DEPARTMENT: Center City Development and Operations
DEPARTMENT HEAD: John Jacks
COUNCIL DISTRICTS IMPACTED: 1
SUBJECT:
Lease Renewal with Subway Real Estate, LLC at the Houston St. Parking Garage
SUMMARY:
An ordinance authorizing the 1st Renewal and Amendment of Lease Agreement with Subway Real Estate, LLC (Subway) for the continued operation of a Subway restaurant at 240 E. Houston, located at street level within the Houston Street Parking Garage. Per terms of the agreement, Subway will pay the City $238,069.66 in rent over the five-year renewal term. This item also provides renewal rights allowing Subway to extend the lease for an additional five-year term. The City will pay a broker's fee of $8,332.44 to Providence Commercial Real Estate Services.
BACKGROUND INFORMATION:
The City of San Antonio owns and operates the Houston Street Parking Garage, located at the southwest corner of Houston and Navarro Streets, which includes retail and restaurant space at street level. In 2013 the City entered into a lease agreement with Subway for approximately 1,870 Square feet of restaurant space on the ground floor of the parking garage. The lease agreement provided two renewal options of five years each, potentially through December 2028. The City exercised the first renewal effective January 1, 2019. This item will make adjustments to the lease providing an increased rental rate in exchange for an additional five-year renewal option. If approved, the rental rate will increase from $23.26 to $23.98 per square foot annually. The lease also includes a 3% annual rent increase. Subsequent renewals will require City Council approval.
The City utilized Providence Commercial Real Estate Services to assist with the negotiation of the terms and facilitation of the renewal process. Per the City's contract with Providence Commercial Real Estate Services, the City will pay a broker's fee of $8,332.44.
ISSUE:
Approval of this ordinance is consistent with Ci...
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