City of San Antonio - File #: 17-1465

• File #: 17-1465
• Type: Real Property Lease
• In control: City Council A Session
• On agenda: 2/23/2017
• Posting Language: An Ordinance authorizing the execution of a five-year lease renewal agreement with Klabzuba Properties III, Ltd, for use of a 22,279 square foot portion of a building located at 106 South Saint Mary’s Street for office space for the Department of Human Services with an annual rent of $423,300.00 in the first year of the term and increasing annually thereafter to $467,856.00 in the fifth and final year of the renewal term. [Lori Houston, Assistant City Manager; John Jacks, Interim Director, Center City Development & Operations]

Date	Ver.	Action By	Action	Result
2/23/2017	1	City Council A Session	adopted	Pass

DEPARTMENT: Center City Development & Operations


DEPARTMENT HEAD: John Jacks


COUNCIL DISTRICTS IMPACTED: 1


SUBJECT:

Lease renewal with Klabzuba Properties III for 22,279 square feet at 106 South Saint Mary's Street.


SUMMARY:

This ordinance authorizes the execution of a five-year lease renewal agreement with Klabzuba Properties III, Ltd, for use of a 22,279 square foot portion of a building, located in Council District 1, at 106 South Saint Mary's Street for the purposes of providing office space for Department of Human Services (DHS). The annual rent will be $423,300.00 in the first year of the term increasing annually thereafter about two and one half percent to $467,856.00 in the fifth and final year of the renewal term.


BACKGROUND INFORMATION:

DHS has occupied this space since January of 2012 under a lease agreement approved by Council on August 11, 2011. The space was constructed under the terms of the initial lease in a manner conducive to the DHS operation housed in this location. Though this renewal term will end on January 31, 2022, as part of the City's strategy to relocate all staff in leased facilities in the downtown area into the refurbished Frost Tower, all DHS staff at this facility will be relocated to the consolidated municipal tower and it is expected that this lease will be terminated prior to that date. Until that time the City has a continuing need for this facility and has structured flexible renewal terms allowing the termination of this lease at or any time after February 1, 2020.


ISSUE:

The existing lease has expired and per its terms the City has an option to renew for an additional five years contingent upon the City timely exercising this option.


ALTERNATIVES:

If the City chooses not to renew this lease at this time, staff would need to be relocated and the lease terminated. Inasmuch as there is no City owned space surplus to our needs available to house these staff and in light of the fact that the City ...