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5/5/2010 8:20:12 PM
 
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Section 5: OPA Board Subject: OC Bayside Debacle Msg# 737799
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Jeff, Join the crowd. I have tried to address these issues as they arose including the filling it in lot comments. I don't know the whole background on the negotiation of the dollar value of the lease but it seemed reasonable rent based on property value. As you stated, everything must be returned to original condition at our request upon termination of the lease. I like the lease as structured. He pays all utilities, maintenance and taxes. He provides $1,000,000 in insurance and indemnifies and holds us harmless. The rent has a built in annual increase and the rent is free and clear OPA money. On the question of building a walkway, provided the wetlands issue is resolved to obtain permits and OPA decides to spend money on a walkway, I think we would need to ask Seacrets in particular if we were going to disrupt their use of the property (parking lot and encroachment area). As you know they can't construct without our permission and we strengthened that clause in the new lease to require written approval of the Board of Directors to prevent any President or GM in the future from authorizing alterations without a vote of the Board. I hope that the lease will be returned fully executed so it can be viewed. I think many/most of the concerns will be abated once the document is read and the guesses come to an end. Ted
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For reference, the above message is a reply to a message where: Ted: I guess I am confused... The lease has an annual price of $40,000 or so, escalating. In addition, OPA will not have to pay the real estate tax on the property... I am not sure exactly what that figure is... but let's say it is $35,000 per year. That makes the annual return to OPA $75,000 ($40,000 plus $35,000). Since this is a five year lease... that aggregates to $375,000 on a property that is worth say, $2,500,000. Not too shabby. And at the end of the lease... OPA still owns the property and Seacrets has an obligation to clean it up and return it to OPA in its original condition. I'm not sure what is meant by the county getting a gift from OPA... is it a reduced assessment and lower tax? If so maybe we could get that and maybe we could not. I disagree with the statement that OPA would be far better off with a $75,000 non net lease. The outcome would be the same either way. On the question of permission to put a path across the property... IMHO, once it is leased to Seacrets... OPA (the owner) would need the permission of Seacrets to put anything on the property or use it in any way. For all intents and purposes... Seacrets would be the "owner" of the property for the duration of the lease. Jeff Knepper |
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