title
A resolution to approve the Third Amendment to the Lease Agreement between The Metropolitan Government of Nashville and Davidson County and Nashville Metropolitan LLC for office space at 1281 Murfreesboro Pike, Nashville Tennessee (Parcel No. 12000015500) (Proposal No. 2025M-019AG-001).
body
WHEREAS, The Metropolitan Government of Nashville and Davidson County (“Metro”) and Nashville Metropolitan entered into a lease agreement approved by Ordinance BL2023-80 whereby Metro leases office space at 1281 Murfreesboro Pike, Nashville, Tennessee; and,
WHEREAS, Metro and Nashville Metropolitan LLC executed a First Amendment to said lease to expand the leased premises, which lease amendment was approved by RS2024-687; and,
WHEREAS, Metro and Nashville Metropolitan LLC executed a Second Amendment to said lease to allow public meetings to occur in the leased premises, which lease amendment was approved by BL2024-516; and,
WHEREAS, Metro and Nashville Metropolitan LLC desire to amend the agreement to expand the premises by approximately 14,642 square feet; and,
WHEREAS, it is to the benefit of the citizens of The Metropolitan Government of Nashville and Davidson County that this Third 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 the Third Amendment to the Lease Agreement between The Metropolitan Government of Nashville and Davidson County and Nashville Metropolitan LLC, a copy of which is attached hereto and incorporated herein, is hereby approved and the Metropolitan Mayor 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 third amendment to the lease agreement between the Metropolitan Government (“Metro”) and Nashville Metropolitan LLC for office space at 1281 Murfreesboro Pike. Amendments to this lease agreement are allowed through resolutions with twenty-one affirmative votes as provided by Ordinance No. BL2023-80.
The original lease agreement approved through BL2023-80 was for the first, second, and fourth floors in the building, comprising approximately 43,820 in rentable square feet, for use by the Metropolitan Action Commission (“MAC”). The first amendment, approved by Resolution No. RS2024-687, added an additional floor of space for MAC, adding approximately 14,869 square feet for a total of 58,689 square feet. The second amendment, approved by Ordinance No. BL2024-516, changed language in the lease to specifically state that the space would be used for public meetings of MAC and its committees.
The proposed amendment would add an additional floor of space for the Metropolitan Government. This would increase the rentable area by 14,642 of rentable square feet from 58,689 square feet to 73,331 square feet.
The rent for the additional space would continue at its original rate and increase by three percent annually over the course of the 10-year lease that began on April 1, 2024. The new rental rate would either begin within 180 days of receiving approval from the Metropolitan Council or upon receipt of a certificate of occupancy. The rent payments for the premises are as follows:
• Apr. 1, 2025 - Mar. 31, 2026: $121.790.57 per month; $19.93 per rentable square foot
• Apr. 1, 2026 - Mar. 31, 2027: $125,457.12 per month; $20.53 per rentable square foot
• Apr. 1, 2027 - Mar. 31, 2028: $129,245.89 per month; $21.15 per rentable square foot
• Apr. 1, 2028 - Mar. 31, 2029: $133,156.87 per month; $21.79 per rentable square foot
• Apr. 1, 2029 - Mar. 31, 2030: $137,128.97 per month; $22.44 per rentable square foot
• Apr. 1, 2030 - Mar. 31, 2031: $141,223.29 per month; $23.11 per rentable square foot
• Apr. 1, 2031 - Mar. 31, 2032: $145,439.82 per month; $23.80 per rentable square foot
• Apr. 1, 2032 - Mar. 31, 2033: $149,778.57 per month; $24.51 per rentable square foot
• Apr. 1, 2033 - Mar. 31, 2034: $154,239.54 per month; $25.24 per rentable square foot
The lease will remain 10 years in length with two successive options to extend the lease for five years each.
The proposed amendment also allows for public meetings of the Metropolitan Government to be held at the leased building. It also allows the Metropolitan Government to station armed guards at the building.
Fiscal Note: The rental rate for the 3rd floor, for an additional 14,642 square feet, is $19.93 per rentable square feet for annualized rent of $296,339.16 for the remaining term of the current year through March 31, 2026. Metro will receive one month’s rent credit for the 3rd floor addition in the amount of $24,694.93. The Nashville Metropolitan, LLC, also agreed to provide $15.00 per square foot tenant improvement to the office area of 13,124 square feet for a total of $196,860. HVAC services will be provided to the premises during office hours. However, Metro would be responsible for the after-hours HVAC usage at a rate of $40.00 per hour per zone plus 10% administrative fee for overhead costs.