6.B.(1) Lease proposal 127 S. Michigan St.

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C~i>~~ Staff Report Lcasc Proposal for LePecp Restaurant Prepared by: Dun Inks I l%18Y)8 Novenil~er o1~2007 the Rede~clopnunt Commission took action to amend LePeep's Lease. The Lease was amended to reflect a renewal fbr 5 years, and provided fbr a reduced lease rate in the tirst year of 54.68 per square toot (51?50 per month). "fhe second through fiifih years had a lease rate of S9 ?7 per square t~x~t (52.500 per month). Since that time. LePecp has closed its Mishawaka location to improve its overall cash flow. At the same time. LePecp has seen rising f~x~d and energy costs at its downto~rn location. Sales at the downto~~-n location arc do~~~°n slightly (about 2°0). While cash flow has improved it is still not positive. LePecp has shared their income statements with us, on a confidential basis. so that ~a~c could confirm their upa-ating performance. We believe LePecp has been and continues to be a valuable retail establishment in the downtown. and that it can be a viable business going ii~rward. Howes°u'. gig en their current operating situation. they arc requesting an additional amendment to their Lease in order to lower rent for the next year. The proposal is to ~_=o fi~om the tirst year Icase rate of S4.68 to 57.49 per square foot (S2.000 per month). Years three throu~~h 5 would remain at the current speciticd lease rate of $9.,7 per square foot. We have discussed this proposal with CB Richard Ellis ow Property Manager and they hove recommended ~~~e approve this proposal especially in light of the current economy and leasing environment. The staff reamnnaulation is to approve the proposal effective A~ovenil~cr 1.2008 (the beginning of the second Icasc year). This ~~~ill retain a long term tenant, a valuable downtown business and enhance their viability to remain so.