Agenda Item Title:
Authorize Mayor and Finance Officer to Sign Third Amendment to the Ground Lease with Lester Hospitality - Rapid City, L.L.C.
Origination Group:
Legal & Finance Committee
Origination Meeting Date:
08/16/2017
City Council Hearing Date:
08/21/2017
Petitioner:
Lester Hospitality Rapid City L.L.C.
Staff Contact:
Joel Landeen, City Attorney; Craig Baltzer, Civic Center Director
Agenda Item Summary:
The Lester’s approached the City requesting that their ground lease for the Holiday Inn at the Civic Center be amended in order to lengthen the lease term. They are currently looking to finance improvements to the property and the longer lease term is being requested to improve their ability to get favorable financing and justify their investment. Under the current lease the original term expires on December 31, 2019. The Lester’s have the right to extend the lease for 4 additional terms of ten years and one final term of five years. Under the current terms, the lease can be extended until 2064. The Lester’s have already exercised the first ten year extension to December 31, 2029. Under the amended lease, the Lester’s will have the right after 2029 to unilaterally extend the lease for an additional 8 ten year terms, plus one final five year term. The lease could potentially last until 2114. The Civic Center Board reviewed and approved this request at its meeting July 11th.
Funding Source & Fiscal Impact (if applicable):
| Funding | Cost Center |
|---|---|
| None | |
Recommendations:
Origination Recommendation Action:
Approve
Origination Recommendation Notes:
The Civic Center Board recommended approval at its meeting on July 11th. The vote was unanimous.
City Council Options:
Approve or Deny. If you deny, the lease will continue per its original terms.