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South Bend Redevelopment Commission <br />Regular Meeting –September 18, 2009 <br /> <br />6. NEW BUSINESS (CONT.) <br /> <br />C. Airport Economic Development Area <br /> <br />(2) continued… <br /> <br />recommending a lease rate of $.75 less than <br />CB Richard Ellis’s because the building is so <br />chopped up, and has other disadvantages. <br />The current lease rate being charged is <br />$1,200 per year. At a 10% discount rate for <br />10.25 years of the remaining lease term, the <br />economic value of the Lease is about <br />$965,000. <br /> <br />The fee negotiated with TCU for the Lease <br />Termination is $686,000. This fee covers the <br />maximum liability of Redevelopment to <br />TCU, including all costs of relocation. <br />Relocation costs to TCU could exceed the <br />$686,000 based on two estimates obtained <br />from moving companies. Day Machinery <br />Movers provided an estimate of $1,055,000 <br />and Clover Machinery Movers estimated <br />$686,000. The Lease Termination <br />Agreement requires TCU to exercise good <br />faith in making sure the maximum amount of <br />parts is moved prior to the Lease Termination <br />date. <br /> <br />Under the Lease Termination Agreement <br />TCU will have possession of the building <br />until 1/31/10, giving them time to arrange for <br />a sale and relocation of the assets, primarily <br />the parts inventory. <br /> <br />Staff recommends the Commission approve <br />the Lease Termination Agreement and <br />related fee of $686,000. <br /> <br />Mr. Varner said he is having a hard time <br />accepting a $1200/yr lease as a $686,000 <br /> 14 <br /> <br />