6A(5) Central High Apartments Lease Extension

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('" P- C S-) LEGAL DEPARTMENT INTEROFFICE MEMORANDUM TO: Redevelopment Commissioners FROM: Lawrence J. Meteiver Assistant City Attorney DATE: April 6, 2011 RE: Stephenson Mill and Central High Lease Extensions Stephenson Mill Lease In 1994, the Commission entered into a 30 year lease agreement with Heartland Fund Management, Inc., now Stephenson Mill Associates, LLC, effective September 1, 1994 and terminating September 1, 2024. At the termination of the lease, the tenant has an option to purchase the property for the cost of the improvements done by the Commission in 1994. Central High Lease In 1995, the Commission entered into a 20 year lease agreement with The Alexander Company, Inc., now Central High Associates, LLC, effective December 29, 1995 and terminating December 28, 2015. At the termination of the lease, the tenant has the option to purchase the property for the sum of $299,000.00. Current Status Currently both properties are being refinanced by Kimberly -Clark Corporation (KKC), the managing member of both tenants. In order to refinance, KKC must show a long term interest in both properties for the length of payments of the new loan obligation. For that reason, KKC has requested extensions of both leases. For the Stephenson Mill lease, KKC proposes to simply extend the term of the lease for 35 years. For the Central High lease, KKC proposes to make a balloon payment of $100,000.00 against the purchase option now, with level amortizing payments over the life of the lease extension. I ask for your favorable consideration of the proposals made by Kimberly -Clark Corporation.