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Home My WebLink AboutCOD-061-08Clarington Leadutg tke Way REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITfTEE ,/n Date: October 20, 2008 ~IU~On~~rry~~'~ Report #: COD-061-08 File # By-law (,b~/8 Subject: CLARINGTON KIDS INC. COURTICE COMMUNITY COMPLEX LEASE SPACE Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-061-08 be received; 2. THAT the Manager of Purchasing be authorized to proceed with an amended lease agreement with Clarington Kids Inc., for the lease of space in the Courtice Community Complex for the term of September 15, 2008 to September 14, 2013; 3. THAT the Mayor and Clerk be authorized to execute the lease agreement in a form satisfactory to the Municipal Solicitor; and 4. THAT the attached By-law marked Schedule "A" authorizing the Mayor and Clerk to execute the proposed Lease Agreement with the Clarington Kids Inc. be forwarded to Council for approval. Submitted by: brie Marano, H.B.Sc., C.M.O. Director of Corporate Services c Reviewed ~ ?~ Franklin Wu, Chief Administrative Officer MM11JB1km CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1 C 3A6 T (905)623-3379 F (905)623-4169 REPORT NO.: COD-061-08 PAGE2 BACKGROUND AND COMMENT 1.1 At their meeting held July 14~', 2008 Council approved report COD-050-08 containing a recommendation to authorize the Manager of Purchasing to proceed with the negotiations of a new lease agreement with Clarington Kids Inc. for the lease space located at the Courtice Community Complex, Courtice. A copy of report COD-050-08 which contained a confidential memorandum has been distributed separately as a confidential attachment marked Schedule "B". 1.2 As per direction negotiations proceeded and an amending lease was prepared by the Solicitor based on using the Consumer Price Index-Ontario as the formula to determine annual lease rate adjustments. The amending lease, conforming to agreed upon terms, was then presented to Clarington Kids owners for execution. 1.3 On October 2ntl, 2008, the Clarington Kids Inc. owner contacted the Manager of Purchasing indicating that they were not prepared to sign the lease as written. The use of (CPI-Ontario) Consumer Price Index-Ontario coupled with the current uncertain economic conditions could see inflation increase dramatically. The alternative offered by Clarington Kids Inc. was CPI-Ontario with a cap to control the increases. 1.4 Under normal circumstances the matter could have been resolved by negotiating a new rate. However, since the initiating report was very specific as to the method used to establish the annual increases the matter is being returned to Council as an update with a recommendation to proceed based on a fixed rate of increase annually. 2. CONCLUSION 2.1 The concerns of Clarington Kids Inc. management has been considered and files reviewed, including the past increases. As a result it is recommended that the amending lease agreement be prepared using fixed annual rates each taking effect on the anniversary date of September 15~", during the five year term. 2.2 For clarification rate increases have been established based on a review of past Clarington Kids Inc. lease rates and CPI-Ontario which have averaged at approximately 2% per year over a ten year period. REPORT NO.: COD-061-08 PAGE3 2.3 The resulting rates have been reviewed with Clarington Kids management and they are agreeable to the proposed rates. 3. INPUT FROM OTHER SOURCES 3.1 This report has been reviewed for recommendation by the Purchasing Manager, with the appropriate departments and circulated as follows for: Concurrence: Director of Community Services Attachments: Attachment 1 -Schedule "A", By-law 2 -Schedule "B" Report COD-050-08 with Confidential Memorandum Schedule "A" THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW 2008- Being a By-law to authorize an agreement between the Corporation of the Municipality of Clarington and Clarington Kids Inc., Courtice, Ontario, to enter into agreement for the lease space at Courtice Community Complex, 2950 Courtice Road North, Courtice, Ontario. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOLLOWS: 1. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the Corporation of the Municipality of Clarington and seal with the Corporation Seal, a agreement between, Clarington Kids Inc., Courtice, Ontario, and said Corporation; and 2. THAT the contract attached hereto as Schedule "A" form part of this By-law. By-law read a first and second time this day of , 2008. By-law read a third time and finally passed this day of , 2008. Jim Abernethy, Mayor Patti L. Barrie, Municipal Clerk SCHEDULE "B" Ui~~~ Leading fhe Way REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATIO COMMITTEE Date: July 7, 2aos ~t~~i°h~~'t~ - ~5~0~ Report #: COD-050-08 File # By-law # Ob ' ~ ~~ Subject: CLARINGTON I(IDS INC. COURTICE COMMUNITY COMPLEX LEASE SPACE Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: THAT Report COD-050-08 be received; 2. THAT the Manager of Purchasing be authorized to proceed with the formal negotiations of a new lease agreement with Clarington Kids Inc., for the lease of space in the Courtice Community Complex for the term of September 15, 2008 to September 14, 2013; 3. THAT the Mayor and Clerk be authorized to execute the lease agreement in a form satisfactory to the Municipal Solicitor; and 4. THAT the attached By-law marked Schedule "A" authorizing the Mayor and Clerk to execute the proposed Lease Agreement with the Clarington Kids Inc. be forwarded to Council for approv . Submitted by: Reviewed b ~ ---~ w u- Marano, H.B.Sc., C.M.O. ranklin Wu, Director of Corporate Services Chief Administrative Officer MMI1JBVcm CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1 C 3A6 T (905)623-3379 F (905)623-4169 REPORT NO.: COD-050-08 1. BACKGROUND AND COMMENT SCHEDULE "B" PAG~2 -- 1.2 The existing lease for Clarington Kids Inc. for space located at the Courtice Community Complex, Courtice, Ontario expires September 14, 2008. 1.3 On May 29, 2008 the Clarington Kids inc. notified the Municipality that they wish to renew the lease for a five year term. Discussions with the owner, Clarington Kids Inc. have covered terms, conditions and formula for calculating the starting lease rate and providing for inflationary increases during the term of the agreement. For information, the current lease rate is $14.54 per square foot, plus GST. Included in the discussion was the reduction in the amount of space required for the Day Care. In this instance the Baby-sitting room will revert to the Complex for its own use thereby reducing the square footage used by Clarington Kids from 5803 to 5556 square feet. 2. CONCLUSION 2.1 in order to proceed a new agreement will be required to cover the lease rates, the terms and the duration. Although the lease rate not has been agreed to, a formula has been agreed upon for the rate adjustment, (current rate per square foot plus CPI Ontario far the month of July). Under the circumstances, it is also recommended that the agreement be reviewed by the Municipality's solicitor. Once a final lease has been prepared and approved by alf parties including the Municipality's Solicitor, the agreement will be provided for execution by the Mayor and Clerk. 2.2 When considering the request for a lease extension the tenants past performance has been taken into account and comments are provided in the attached confidential memorandum. 3. INPUT FROM OTHER SOURCES 3.1 This report has been reviewed for recommendation by the Purchasing Manager with the appropriate departments and circulated as follows for: Concurrence: Director of Community Services Attachments: Attachment 1 -Schedule "A", By-law 2 -Schedule "B°, Confidential Memorandum