HomeMy WebLinkAbout6C (1)To: Redevelopment Commission
From: Debrah Jennings, Property Manager
Subject: Policy for Early Termination of Lease
Date: July 26, 2011
Staff is proposing the Redevelopment Commission adopt a policy on Early Termination of Lease for
Redevelopment Retailers that have concluded they are no longer able to operate their business.
Those businesses that have elected to close prematurely before fulfilling their lease term obligations, rather
than holding them responsible for the duration of the lease, staff has drafted a policy to release the retailer from
the lease, provided they meet all qualifications.
Staff is recommending approval of this policy.
H: \WPDATA \correct memo.doc
DEPARTMENT OF REDEVELOPMENT
South Bend, Indiana
Policy for Early Termination of a Lease
INTRODUCTION
The purpose of this policy is to set forth the conditions under which the South Bend
Redevelopment Commission will consider an early termination of a lease in either the Michigan
Street Shops or the Wayne Street Retail Space. The conditions required to release a tenant from
the original lease ensure that the tenant has paid all rent and other financial obligations and is not
relocating to another storefront within the South Bend Central Development Area.
Voluntary "move outs" in Commission owned retail spaces have occurred primarily due
to tenants acknowledging their businesses cannot be sustained. In lieu of incurring further debt
and falling behind on rent, tenants are encouraged to work with the Commission to vacate the
space under amicable terms before the lease term expires.
This Policy allows the Commission to avoid the necessity of collection efforts, and the
costs associated therewith, and allows the Commission to re -lease the space being vacated by the
tenant.
This Policy further recognizes the Commission's willingness to be flexible and work with
tenants that have made a good faith effort, kept current on their rent and have given the
Commission notice of their need to vacate before the lease term expired.
POLICY
Under the following conditions, the South Bend Redevelopment Commission will
consider an Early Termination of Lease upon the Tenant's request.
The Tenant has occupied the space for at least one year.
2. The Tenant is current on all payments due to the South Bend Redevelopment
Commission, including, but not limited to, Rent and Common Area Maintenance (CAM).
3. Rent paid shall be at least sufficient to cover any cost of tenant improvements and leasing
commissions paid by the South Bend Redevelopment Commission.
4. The condition of the space at move out must conform to the requirements of the lease.
5. The tenant and all guarantors of the tenant agree not to relocate to another space within
the South Bend Central Development Area for a period of not less than one year from the
date of the Early Termination of Lease agreement.
If the above conditions are met and the Commission provides for an early termination of
the lease, it will be conditioned on item 5 above. Should the tenant or any guarantor of the
tenant relocate to a space within the South Bend Central Development Area within one year of
the date of the Early Termination of Lease agreement, the Early Termination of Lease agreement
will be null and void, and the former tenant and each guarantor will be held to the original term
of the lease.
ADOPTED at a meeting of the South Bend Redevelopment Commission held on
, 2011 at 1308 County -City Building, 227 West Jefferson Boulevard,
South Bend, Indiana 46601.
CITY OF SOUTH BEND,
DEPARTMENT OF REDEVELOPMENT
Signature
Printed ame and Title
South Bend Redevelopment Commission
ATTEST:
Signature
Printed Name and Title
South Bend Redevelopment Commission