AGENDA #4q

 

                                                              MEMORANDUM

 

TO:                  Mayor and Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Renewal of the Lease for a Portion of the Old Post Office Building to the United States Postal Service

 

DATE:             October 27, 2003

 

 

The attached resolution would authorize the Town Manager to execute a lease for a portion of the Old Post Office Building at 179 East Franklin Street to the United States Postal Service for a period of ten years.

 

BACKGROUND

 

On August 15, 1979, the United States Postal Service and the Town of Chapel Hill entered into a lease agreement for a period of 25 years wherein the United States Postal Service leased from the Town, approximately 3,000 square feet of the Old Post Office Building at 179 East Franklin Street for use as a branch post office.  Under the terms of this lease, the Town accepted responsibility for all utilities and maintenance of the leased space and the United States Postal Service agreed to pay rent of $1.00 per year.

 

DISCUSSION

 

In a letter dated April 30, 2003, the United States Postal Service confirmed its desire to renew the lease for a period of ten years.  The term of the renewed lease would be from August 15, 2004, to August 15, 2014.

 

North Carolina General Statute 160A-272 requires that public notice of the intent to lease municipal property be given at lease 10 days prior to the Town Council authorizing such a lease.  In accordance with this statue, a notice appeared in the Chapel Hill News on Friday, October 13, 2003, announcing that the Town Council would consider authorizing, at its October 27, 2003 business meeting, a lease to the United Streets Postal Service of approximately 3,000 square feet of the main floor of the Old Post Office, located at the corner of East Franklin and Henderson Streets.

 

The proposed lease agreement includes the following provisions:

 

·        The duties of the Town under the lease include provision of the designated 3,000 square feet of space, allocation of three dedicated parking spaces, use of the loading dock at the rear of the building, payment for utilities costs (except for telephone and other communications), payment for custodial services and routine maintenance of the building.

 

·        The duties of the United States Postal Service include payment of an annual rent in the amount of $15,140.  This amount is not intended to represent the fair market rental value of the property; rather it represents the approximate annual cost to the Town for the provision of utilities, custodial services and routine maintenance.

 

·        The United States Postal Service may terminate the lease with 90 days notice and the Town may terminate the lease with two year’s notice.

 

On December 11, 2000, the Council Committee on the Old Post Office recommended and the Town Council adopted a resolution that states, in part, the Council’s desire that the United States Postal Service remain in the building. The recommended lease would accomplish the intent of this Council resolution.

 

RECOMMENDATION

 

That the Town Council adopt the attached resolution authorizing the Town Manager to renew the lease of approximately 3,000 square feet of space in the Old Post Office Building to the United States Postal Service for a period of ten years.

 

 

A RESOLUTION AUTHORIZING THE TOWN MANAGER TO RENEW A LEASE FOR A PORTION OF THE OLD POST OFFICE BUILDING TO THE UNITED STATES POSTAL SERVICE FOR A PERIOD OF TEN YEARS (2003-10-27/R-10.1)

 

WHEREAS, the Town Council of the Town of Chapel Hill, on August 15, 1979, pursuant to G.S. 160A-272, authorized the Town Manager to enter into a lease for a portion of the Old Post Office Building to the United States Postal Service; and

 

WHEREAS, the term of said lease was for twenty-five years, beginning on August 15, 1979, and ending on August 14, 2004; and

 

WHEREAS, the United States Postal Service has requested that the lease be renewed for ten years; and

 

WHEREAS, pursuant to G.S. 160A-272, a notice appeared in the October 13, 2003 edition of the Chapel Hill News, announcing that the Town Council would consider authorizing, at its October 27, 2003 business meeting, a lease to the United Streets Postal Service of approximately 3,000 square feet of the main floor of the Old Post Office Building, located at the corner of East Franklin and Henderson Streets;    

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council approves of, and authorizes the Town Manager to enter into on behalf of the Town, a lease to the United States Postal Service of approximately 3,000 square feet of space in the Old Post Office Building at 179 East Franklin Street for use as a branch Post Office, said agreement to contain the following key points:

 

·        The duties of the Town under the lease include provision of the designated 3,000 square feet of space, allocation of three dedicated parking spaces, use of the loading dock at the rear of the building, payment for utilities costs (except for telephone and other communications), payment for custodial services and routine maintenance of the building.

 

·        The duties of the United States Postal Service include payment of an annual rent in the amount of $15,140.  This amount is not intended to represent the fair market rental value of the property; rather it represents the approximate annual cost to the Town for the provision of utilities, custodial services and routine maintenance.

 

·        The United States Postal Service may terminate the lease with 90 days notice and the Town may terminate the lease with two year’s notice.

 

This the 27^th day of October, 2003.