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A resolution approving the Sixth Amendment to the Lease Agreement between The Metropolitan Government of Nashville and Davidson County, acting by and through the Metropolitan Nashville Police Department, and Signature Center, L.P. for office space for the Police Advocacy Support Services (“PASS”) Program (Proposal No. 2026M-011AG-001).
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WHEREAS, The Metropolitan Government of Nashville and Davidson County (“Metro”), acting by and through the Metropolitan Nashville Police Department, and Signature Center, L.P. are parties to a Lease Agreement approved by Ordinance O96-298 to provide office space for the PASS Program; and,
WHEREAS, Metro and Signature Center, L.P. executed a First Amendment to said lease on August 9, 2001, to extend the term of the original lease, which lease amendment was approved by BL2001-760; and,
WHEREAS, Metro and Signature Center, L.P. executed a Second Amendment to said lease on July 19, 2006, to extend the term of the lease by five years, which lease amendment was approved by RS2006-1374; and,
WHEREAS, Metro and Signature Center, L.P. executed a Third Amendment to said lease on June 8, 2011, to extend the term of the lease by ten years, which lease amendment was approved by RS2011-1678; and,
WHEREAS, Metro and Signature Center, L.P. executed a Fourth Amendment to said lease on May 4, 2021, to extend the term of the lease by three years, which lease amendment was approved by RS2021-920; and,
WHEREAS, Metro and Signature Center, L.P. executed a Fifth Amendment to said lease on May 5, 2022, to extend the term of the lease by three years, which lease amendment was approved by RS2022-1515; and,
WHEREAS, Metro and Signature Center, L.P. have agreed to a Sixth Amendment to the Lease Agreement to extend the term of the lease by five years; and,
WHEREAS, it is to the benefit of the citizens of The Metropolitan Government of Nashville and Davidson County that this Sixth Amendment to the Lease Agreement be approved.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That this Sixth Amendment to the Lease Agreement between The Metropolitan Government of Nashville and Davidson County, acting by and through the Metropolitan Nashville Police Department, and Signature Center, L.P. for office space for the Police Advocacy Support Services Program, a copy of which is attached hereto and incorporated herein, is hereby approved and the Director of Public Property or his designee is authorized to execute it on behalf of the Metropolitan Government.
Section 2. This resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This resolution approves the sixth amendment of a lease agreement between the Metropolitan Nashville Police Department (“MNPD”) and Signature Center, L.P. for the lease of two office suites totaling 7,217 square feet of office space in the building located at 1900 Church Street for use by the police advocacy support services division (“PASS Division”).
MNPD has leased 4,945 feet of this office space (Suite 500”) since 1996 through Ordinance No. O96-298 and through four lease extensions approved by Ordinance No. NL2001-760 and Resolution Nos. RS2006-1374, RS2011-1678, RS2021-920, and RS2022-1515. In 2022, the PASS division added an additional 2,272 square feet of office space (“Suite 502”) and extended the lease for both spaces until June 30, 2027.
This proposed amendment extends the lease for both spaces until June 30, 2032. The monthly rent for Suite 500 is as follows:
|
Lease Year |
Base Rate per Square Foot |
Amortized Monthly Buildout (8 percent) |
Total Annual Rent |
Rent per Square Foot Including Amortized Buildout |
Percent Increase of Total Annual Rent from Prior Lease Year |
|
2027-2028 |
$32.96 |
$680.27 |
$171,150.44 |
$34.61 |
-- |
|
2028-2029 |
$33.95 |
$680.27 |
$176,045.99 |
$35.60 |
2.9% |
|
2029-2030 |
$34.97 |
$680.27 |
$181,089.89 |
$36.62 |
2.9% |
|
2030-2031 |
$36.02 |
$680.27 |
$186,282.14 |
$37.67 |
2.9% |
|
2031-2032 |
$37.10 |
$680.27 |
$191,622.74 |
$38.75 |
2.9% |
Total monthly rent for Suite 500 includes a fee to cover 50 percent of the cost of landlord repairs which includes fresh paint on all walls and cabinets and replacing the flooring throughout the unit. The total cost of this work is determined to be $67,100 and Metro has agreed to pay half, $33,550 in equal monthly installments over the five-year lease extension term with interest at 8 percent. This cost of $680.27 a month is included in the total monthly rent.
The rent for Suite 502 will be as follows:
|
Lease Year |
Rent per Square Foot |
Annual Rent |
Percent Increase from Prior Lease Year |
|
2027-2028 |
$41.24 |
$93,700.01 |
-- |
|
2028-2029 |
$42.48 |
$96,511.01 |
3.0% |
|
2029-2030 |
$43.75 |
$99,406.34 |
3.0% |
|
2030-2031 |
$45.07 |
$102,388.53 |
3.0% |
|
2031-2032 |
$46.42 |
$105,460.18 |
3.0% |
This lease amendment has been approved by the Planning Commission.
Fiscal Note: This amendment will renew the terms of the lease and the base rent amount for Suite 500 and Suite 502 starting July 1, 2027. The new base rental rate for Suite 500 with 4,945 square-foot space is $32.96 per square foot or $162,987.20 per year and. However, Signature Center, L.P. will build an additional 2,272 square feet office space. The total cost of the addition is $67,100 and Metro’s share is 50% or $33,550 which will be amortized through the terms of the lease. This will add $680.27 per month and changes the rental rate to $34.61 per square feet or $171,150.44 per year for the construction work to the premises. The new base rental rate for Suite 502 with 2,272 square foot space is $41.24 per square foot or $93,700.01 per year. The base rental rate will increase approximately by 3% each year.