C O M M E R C I A L R E A L E S TAT E S E R V I C E S
200 Park Avenue 18 t h Floor New York, NY 10166
Michele Freeman First Vice President CB Richard Ellis, Inc. Corporate Services
212 984 7141 Tel 212 984 6640 Fax
[email protected] www.cbre.com
February 26, 2009 Paul Slayton P A Associates 250 West 57th Street Ste 1120 New York, NY 10107 Re:
City of New York – 4650 Broadway HPD
Dear Paul: I hereby submit, on behalf of the City of New York, the following proposal to lease space in the above referenced property upon the following terms and conditions: LANDLORD:
Acadia-P/A Sherman Avenue, LLC
TENANT:
HPD or for such other use as the Commissioner of the Department of Citywide Administrative Services (“DCAS”) may determine in accordance with the use provision (to be negotiated).
PREMISES:
4650 Broadway Borough of Manhattan
SPACE:
Approximately 39,388 rentable square feet of office, and lobby space on the cellar, ground, and fourth floor, which has been verified by the Division of Real Estate Services. Approximately 3,717 rentable square feet of exclusive ramp access and garage area parking on the cellar floor.
TERM: Twenty (20) years from Substantial Completion as defined below RENT COMMENCEMENT:
Three (3) months following Substantial Completion of alterations and improvements.
BASE RENT:
Years 1-5: Years 6-10: Years 11-15: Years 16-20:
$37.25 prsf per annum $42.00 prsf per annum $47.34 prsf per annum $53.35 prsf per annum
This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm's length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto.
PARKING RENT:
Tenant shall also pay $15.00 per square foot with 10% increases every five years, for its designated parking area within the building. The standard City lease provides that rent shall be payable at the end of the month.
OPTION TO RENEW:
Tenant shall have the option to renew the lease for a period of five (5) years at 90% of the Fair Market Value Rental or the then current rent, on six (6) months prior written notice.
TERMINATION:
Tenant shall have the right to terminate the lease on a floor by floor basis, at any time after the fifteenth (15th) year on one year’s prior written notice. In the event of said termination, the Tenant shall pay the Landlord the unamortized portion of the Tenant broker’s commission and the unamortized portion of Landlord’s contribution towards Tenant’s work (TW).
REAL ESTATE TAXES:
Landlord to be responsible for payment of all real estate taxes, assessments, water rates and sewer rents for the space. Tenant shall reimburse the Landlord for its proportionate share (TBD) of any increase in real estate taxes, assessments, water rates, and sewer rents above the base year. The base year shall be (i) the fiscal year following the date of Substantial Completion if it occurs between January 1st and June 30thor the first full calendar year following Substantial Completion if it occurs between July 1st and December 31st.
OPERATING EXPENSES:
Tenant shall reimburse the Landlord for its proportionate share (TBD) of increases in direct operating expenses above the base year. The base year shall be (i) the calendar year in which Substantial Completion occurs between January 1st and April 30th, (ii) the last half of the calendar year in which Substantial Completion occurs and the first half of the following calendar year, if Substantial Completion occurs between May 1st and August 30th, or (iii) the following calendar year, if Substantial Completion occurs between September 1st and December 31st.
CONSTRUCTION TIMEFRAME: Landlord intends to demolish an existing structure and build a new building in accordance with the attached project construction timeline, Exhibit A. ALTERATIONS & IMPROVEMENTS:
Landlord shall, prior to the commencement of the lease term, prepare final architectural plans and engineering plans (the “Final Plans”) and make alterations and improvements in accordance with preliminary architectural plans and specifications approved by DCAS and by the Agency. The Work consists of (i) alterations and improvements, including architectural and engineering plans therefore, that the Landlord shall perform at its sole cost and expense described in the Landlord’s Base Building Scope of Work (“BBW”) and (ii) alterations and improvements that the Landlord shall perform initially at its own cost and expense described in the Tenant’s Scope of Work (“TW”). See attached BBW dated January 30, 2009.
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The total TW cost (defined below) shall not exceed ____. Landlord shall contribute $20/sf towards the TW cost and the Tenant shall reimburse Landlord for the balance up to_______ to be disbursed in one lump sum payment upon the completion of alterations and improvements. The total TW shall not exceed _________. Landlord shall not be responsible to pay any overage in excess of the not to exceed estimate. Landlord shall incur all costs for the preparation of the TW final architectural plans and final engineering plans (the “Final Plans”) at its sole cost and expense. DESIGN/BIDDING/ CONSTRUCTION PROCEDURES:
DESIGN/BIDDING/ CONSTRUCTION DEFINITIONS:
Plans, bidding and C&S and TW construction shall be done in accordance with the attached timeline. Both parties agree to adhere to the attached timeline, which shall become a part of the lease. Failure on the part of either party to meet the schedule therein except force majeure shall cause liquidated .damages to incur, pursuant to the provision below.
The TW cost shall consist of all costs and expenses (excluding construction loan interest and related financing costs) charged to the Landlord for (a) the DCAS approved Architect's fees for change orders for the services required for the TW; (b) the filing fees for the submission of same (change orders only) to the appropriate governmental authorities for approval; (c) the performance of all items of the TW; and (d) one general contractor’s general conditions fee and one contractor's over-head and profit to the extent indicated in contractor's bid only; the Landlord shall not be entitled to be paid an administrative or management fee for the performance of the TW. The Premises shall be deemed "Substantially Complete" upon (1) reasonable review and certification by DCAS of the Landlord's completion of the Work excepting minor details of construction or decoration which do not adversely affect the Tenant's use of the Demised Premises; and (2) receipt by the Landlord and delivery to DCAS of (i) all applicable Building Department and Fire Department inspection sign-offs (including but not limited to Building Department Post Permit TR-1, Equipment Use Permits, a new Temporary Certificate of Occupancy, electrical and plumbing sign-offs, Fire Department and elevator inspections and sign-offs and removal of all Asbestos), (ii) certified air balancing report approved by the Landlord's engineer as being in conformance with the Final Plans, and (iii) Certification from the Landlord’s engineer that a direct electric meter to the Premises has been correctly installed.
DESIGN/BIDDING/ CONSTRUCTION LIQUIDATED DAMAGES:
In the event the Landlord fails to meet its applicable time frames above then the Tenant shall give the Landlord a written Delay Notice advising the Landlord of its failure to so commence, complete and/or perform. If the Landlord fails to commence, complete and/or perform the Work or Final Plans within ten (10) business days from the date of said notice, the Tenant shall give the Landlord a second written notice. If the Landlord fails to commence, complete and/or perform
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the Work or Final Plans within ten (10) business days from the date of the second notice, the Tenant, in addition to any other remedy it may have, at it's option may: (i) as agent of the Landlord perform any of the work and/or plans and deduct the cost thereof from the rent for Work costs, or (ii) terminate this lease on ten (10) business days written notice to the Landlord. Tenant cannot terminate if the landlord is diligently curing its default. Tenant, however, shall not be required to exercise either of the foregoing rights. If the Tenant elects not to terminate the lease, and regardless of whether or not the Tenant provides written Delay Notice to the Landlord, or elects to perform the Work and/or Final Plans as the Landlord's agent, it shall receive a rent credit equivalent to one (1) day of free rent for each day the commencement or Substantial Completion of Work was delayed or time frames were not met.
LANDLORD SERVICES:
Landlord shall provide, pursuant to the Operating Expense Clause in the lease, heat, air conditioning, hot and cold water and elevator services, and access twenty-four (24) hours per day, seven (7) days per week. Landlord shall paint the entire premises, at its sole cost and expense, once in the tenth (10th) year of the lease term.
REPAIRS:
At its sole cost and expense, the Landlord shall be responsible for all interior latent defects pertaining to Landlord’s Work, exterior and structural repairs, including, but not limited to, repairs and replacement of the roof, sidewalks, windows, elevators, electrical, plumbing, heating, ventilation, and air conditioning systems; excluding repairs caused by Tenant’s negligence. Landlord shall provide maintenance/ service contracts for the HVAC equipment. Tenant shall reimburse Landlord for the cost of the contracts through the operating cost escalation payments.
FAILURE TO PROVIDE SERVICES/REPAIRS:
CLEANING:
PROCURING COMMISSION:
ASSIGNMENT/SUBLEASE:
Tenant shall have the right of self-help, i.e. if the Landlord should fail to provide agreed upon services or repairs, as specified in the lease, the Tenant (i) may, as agent for the Landlord, do any of said services or repairs and deduct the cost thereof from base any rent due or that may become due and payable under the lease; not to exceed 30% of each month’s base rent due by Tenant. or (ii) may withhold all rent due and owing to the Landlord until the Landlord performs such services or repairs or (iii) may terminate the lease after due notice to the Landlord and after applicable cure periods. Details shall be negotiated in the lease . Landlord shall provide cleaning and rubbish removal services at its sole cost and expense in accordance with the cleaning schedule attached hereto. The base year cleaning cost will be based upon the cleaning specifications attached to the lease. Landlord recognizes that the Tenant has been represented by CB Richard Ellis, Inc. in these lease negotiations as its Consultant Tenant Representative and that the Landlord shall pay a full brokerage commission pursuant to a separate agreement between the Landlord and CB Richard Ellis, Inc. The Tenant shall have the right to assign the Premises to any other City agency of similar type of use, without the approval of the
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Landlord. Tenant shall have the right to sublease all or a portion of the Premises to third parties with the Landlord’s prior written consent which consent will not be unreasonably delayed, conditioned or withheld.
SECURITY DEPOSIT: COMPLIANCE WITH LAWS/ADA:
ELECTRICITY:
AFTER HOURS SERVICES:
None
Tenant shall require that the premises comply with all present and future federal, state and municipal laws, ordinances, regulations, and requirements, including, but not limited to, ADA and OSHA. Should any modifications to the premises be required to achieve such compliance, the Landlord shall perform the required work at its sole cost and expense. Tenant shall pay for its electricity direct to the public utility. Landlord shall, at its sole cost and expense, provide the meter and any necessary wiring, as per the attached BBW. Tenant can request additional after hours services that Landlord will provide at Tenant’s cost.
HVAC:
Tenant shall pay for cost of fuel and/or electricity to power the independent, tenant controlled HVAC units.
NON-DISTURBANCE:
Landlord shall provide the Tenant with a fully executed NonDisturbance Agreement for any land and building mortgages and guarantee non-disturbance agreements from future mortgages to which the Tenant is required to subordinate its interest.
LANDLORD DISCLOSURE:
DCAS is reviewing your recent landlord disclosure submission.
ASBESTOS:
Landlord shall remove all asbestos containing materials prior to the commencement of the lease. Landlord shall provide an asbestos survey conducted by a licensed asbestos inspector prior to the execution of the lease. If the survey concludes that there is asbestos containing material within the premises that, if maintained in its present condition, does not pose a threat to the health and safety of the occupants of the site, then the Landlord shall regularly perform hazard assessments during the term of the lease and shall abate any deteriorated asbestos which develops in the future. During the term of the lease, if asbestos abatement is necessary, then the rent shall be abated for that portion of the space that becomes un-tenantable during the abatement.
This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm's length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from
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those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto. Please call me at 212-984-7141 if you have any questions or if you require clarification of any of these proposed terms. Very truly yours,
Michele Freeman cc: Michael Garaufis, DCAS Anne Zieha, DCAS Glenn Pymento, DCAS Alex Santana, DCAS John Morrill, CBRE Keith Thompson, CBRE AGREED and ACCEPTED BY:
______________________ AGREED and ACCEPTED BY:
Michael Garaufis DCAS
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