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South Bend Redevelopment Commission <br />Regular Meeting - September 4, 1992 <br />6. NEW BUSINESS (Cont.) <br />b. continued... <br />the Palais Royale Acquisition Project <br />Principal and Interest Account of the <br />Redevelopment District Bond Fun. <br />c. Commission aouroval requested for Second <br />Amendment to Lease with American Drug <br />Stores. <br />Ms. Manier explained that the Commission <br />has had a lease with Osco Drug Store for <br />a long time. That lease terminates this <br />month. Under the lease agreement there <br />is the ability to amend the lease to <br />extend the term. The Second Amendment to <br />Lease extends the lease for a period of <br />three successive two year options. The <br />first and second option are at the <br />election of Osco. The third option <br />period would need the approval of both <br />the Commission and Osco. The rental has <br />increased from approximately $17,000 per <br />year to $34,461 for each year in the <br />first two options and $45,948 for each <br />year in the third option. Otherwise, the <br />terms of the lease are the same as the <br />previous lease. <br />Mrs. Kolata noted that when we first <br />entered into the lease with Osco, they <br />spent considerable money on <br />improvements. They waived their right to <br />relocation payments if we asked them to <br />move. However, we agreed to pay them for <br />the depreciated value of the <br />improvements. There was a subsequent <br />problem with the roof and they repaired <br />it and we amended the depreciation <br />schedule. Both depreciation schedules <br />have now expired. <br />The reason for the longer term lease is <br />that Osco's would like to make some <br />additional expenditures in the building. <br />They would like to be assured of the <br />-- availability of the space. We still have <br />the ability to give them 90 days notice <br />-6- <br />PRINCIPAL AND INTEREST ACCOUNT OF <br />THE REDEVELOPMENT DISTRICT BOND <br />FUND <br />