ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of June 11, 2011 DATE: May 5, 2011 SUBJECT: Approval of: (1) County Board Option, as Tenant, to Extend the Lease Term for Store No. 2176 at Ballston Common Mall, 4238 Wilson Boulevard, Arlington, Virginia (RPC #14-059-035) ( Leased Premises ); (2) a Second Amendment to Sublease Agreement Extending the Term for the Leased Premises between The County Board of Arlington County, Virginia, as Tenant, and Saint Coletta of Greater Washington, Inc., as Subtenant; and (3) a Second Amendment to Sublease Agreement Extending the Term for the Leased Premises between The County Board of Arlington County, Virginia, as Tenant, and Ellipse Handmade Crafts Inc., formerly Ellipse Fine Crafts, LLC, as Subtenant. C. M. RECOMMENDATIONS: A. Approve: (1) County Board Option, as Tenant, to extend the lease term for Store No. 2176 at Ballston Common Mall, 4238 Wilson Boulevard, Arlington, Virginia (RPC #14-059-035) ( Leased Premises ); (2) a Second Amendment to Sublease Agreement extending the term for the Leased Premises between The County Board of Arlington County, Virginia, as Tenant, and Saint Coletta of Greater Washington, Inc., as Subtenant; and (3) a Second Amendment to Sublease Agreement extending the term for the Leased Premises between The County Board of Arlington County, Virginia, as Tenant, and Ellipse Handmade Crafts, Inc., formerly Ellipse Fine Crafts LLC, as Subtenant. B. Authorize the Real Estate Bureau Chief, or his designee, to execute on behalf of the County Board a letter exercising the Tenant s option to extend the lease term and two Second Amendments, subject to approval of such Amendments as to form by the County Attorney. ISSUE: In order to extend the term of the County s lease at Ballston Common Mall (the Lease ) with FC Ballston Common, LLC, and extend the term of the County s subleases to Saint Coletta of Greater Washington, Inc. ( Saint Coletta ) and Ellipse Homemade Crafts, Inc., formerly Ellipse Fine Crafts LLC ( Ellipse ), the County Board is being County Manager: County Attorney: 14. Staff: Betsy Herbst, DES Real Estate Bureau
requested to take the recommended actions. There are no issues related to this Board item. SUMMARY: Upon County Board approval and execution of the letter of notification to FC Ballston Common, LLC exercising the County s option to renew ( Extension Letter ), the County s lease for retail space consisting of 3,119 square feet, more or less, Store No. 2176, located on the 2 nd floor of Ballston Common Mall, 4238 Wilson Boulevard, Arlington, Virginia ( Premises ), would be extended for a second renewal term of one additional year beginning November 1, 2011. The County would continue to pay rent until expiration of the extended Lease term on October 31, 2012. At the expiration of the second renewal term, if the County desires to continue to occupy the store at Ballston Common Mall, then a new or amended lease would need to be negotiated with the Landlord and approved by the County Board. Similarly, following County Board approval and execution of the Second Amendment to the Saint Coletta Sublease and the Second Amendment to the Ellipse Sublease (collectively, the Amendments ), Saint Coletta would continue to sublet the Premises and pay rent to the County, for an additional year beginning November 1, 2011 and expiring on October 31, 2012. Saint Coletta uses the Premises to operate the Woodmont Weavers program for persons with development disabilities. Ellipse uses a portion of the Premises during specified hours to sell arts and crafts created by local artists from the community. BACKGROUND: Until September 2002, the County operated the Woodmont Weavers Program on the County's real property located at 2422 N. Fillmore St. Thereafter, the County and Ballston Common Associates entered into a License Agreement that granted permission for the County to use Store No. 3072 at Ballston Common Mall for a nominal fee. The program was relocated to Ballston Common Mall in January 2003 to increase visibility, and to enable the program to more fully involve and integrate the community. (See Vicinity Maps attached hereto as Attachments 1 and 2). The County's Department of Human Services ("DHS") selected Saint Coletta to operate the Woodmont Weavers Program in 2004. Saint Coletta's staff has many years of experience working with persons with developmental disabilities. In 2007, the Woodmont Weavers Program was relocated to Store 2176 in order to provide larger retail space. On October 13, 2007, the County Board, as Tenant, approved a Lease for Store No. 2176 between FC Ballston Common, LLC, as Landlord, and approved a sublease between the County Board and Saint Coletta, for an initial term of three (3) years. The Lease contains an option to renew under the same terms and conditions for two additional one-year terms upon at least 90 days prior written notice from the County to the Landlord of the County s intent to renew the Lease term. The first option to renew was exercised by the County in 2010. The first renewal term will expire on October 31, 2011. If the second option to renew is exercised, then the second renewal term would expire on October 31, 2012. If the County desires to continue to occupy the store at Ballston Common Mall after the expiration of the second renewal 2
term, then a new or amended lease will need to be negotiated with the Landlord and approved by the County Board. The Saint Coletta Sublease does not contain an option to renew, so it is necessary that the County enter into a Second Amendment to Sublease with Saint Coletta to extend the term of the Saint Coletta Sublease. The Sublease was amended last year to extend the sublease term for one year until October 31, 2011. The Second Amendment would extend the sublease term for an additional year until October 31, 2012. On November 13, 2007, the County Board also approved the Ellipse Sublease, for an initial term of three (3) years, for use by Ellipse of a portion of the Premises during specified hours, generally during times of the day when the Woodmont Weavers program is not in operation. The Ellipse Sublease also does not contain an option to renew, so a Second Amendment is necessary to extend the term of the Ellipse Sublease. The Sublease was amended last year to revise the monthly rent and to extend the sublease term for one year until October 31, 2011. If the Second Amendment is approved, then the sublease with Ellipse Handmade Crafts will be extended to October 31, 2012. DISCUSSION: A letter providing notice to the Landlord that the County Board is exercising its option to renew the Lease under the same terms and conditions, including a provision that allows for an annual escalation of the fixed minimum rent, is attached as Exhibit A. The fixed minimum rent currently being paid by the County is in the amount of $ 66,204.60 annually or $5,517.05 per month. Beginning on November 1, 2011 and through the second extended term, under the escalation clause in the Lease, the new fixed minimum rent will be $67,528.80 annually or $5,627.40 per month. In addition, the County will continue to pay additional rent as required under the Lease to cover expenses for utilities and taxes. During the second extended term, the additional rent for reimbursement to the Landlord for real estate taxes, electricity, HVAC and water is estimated to be approximately $26,382.60. The Second Amendment to Sublease between the County Board and Saint Coletta, attached as Exhibit B, extends the term of the original Saint Coletta Sublease for one additional year, beginning November 1, 2011 and ending at 11:59 p.m. on October 31, 2012. All other terms of the Saint Coletta Sublease will remain the same, including the payment of nominal rent for the purpose of administering the Woodmont Weavers Program in the Premises. Under state law, localities may donate real or personal property, or money, to nonprofit recreational associations or organizations, provided that the association or organization is not controlled in whole or in part by any church or sectarian society. Saint Coletta is a non-sectarian, non-profit organization that operates school and adult day programs for children and adults with mental retardation and autism. On January 12, 2011, Ellipse Fine Crafts LLC changed its legal status to a corporation, and is now operating under the name of Ellipse Handmade Crafts Inc., the former LLC having been cancelled. The Second Amendment to Sublease between the County Board 3
and Ellipse Handmade Crafts Inc., attached as Exhibit C, extends the term of the original Ellipse Sublease for one additional year, beginning November 1, 2011 and expiring on October 31, 2012. The base rent to be paid by Ellipse to the County remains the same as the prior year in the amount of five thousand four hundred fifteen dollars ($5,415.00) per annum or four hundred fifty-one and 25/100 dollars ($451.25) per month. Ellipse fulfills the function, as required under the County s Lease with FC Ballston, LLC, of keeping the store open during the hours when the mall is open. FISCAL IMPACT: The expenses to be paid by the County to the Landlord for rent and reimbursable real estate taxes, as required under the terms of the Lease between FC Ballston Common, LLC and the County, will be funded from the Department of Human Services, Intellectual and Developmental Vocational Services funding (101.436183.53203.MRVO.0000.M425); the expenses for electric and HVAC will be funded from 101.432100.53203.MRVO.0000.M425; and the expenses for water will be paid from 101.432300.53203.MRVO.0000.M425. The revenue collected by the County from Ellipse under the Second Amendment Sublease Agreement with Ellipse will be used to reduce the Department of Human Services net tax support. CONCLUSION: It is recommended that the County Board approve: (i) the County Board Option, as Tenant, to extend the lease term for Store No. 2176 at Ballston Common Mall, 4238 Wilson Boulevard, Arlington, Virginia (RPC #14-059-035); (ii) the attached Second Amendment to Sublease Agreement with Saint Coletta; and (iii) the attached Second Amendment to Sublease Agreement with Ellipse, all as set forth in Exhibits A, B, and C hereto. 4
670 660 N. STUART ST. 671 850 900 Vicinity Map Ballston Common Mall - Store 2176 Woodmont Weavers Program / Ellipse Fine Crafts 4238 Wilson Blvd 4201 4121 WILSON BLVD. WILSON B 4238 4200 Woodmont Weavers ^ 1 N. RANDOLPH ST. N. GLEBE RD. 3 0 100 Feet Pursuant to Section 54.1-402 of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography flown February 2009 Map prepared by Arlington County GIS Mapping Center Produced and May 2010 17 ARLIN SPRINGS RD. 650 / 665
1131 4521 1133 900 4519 1135 4517 4515 4501 4513 1178 1176 1170 1168 1166 4511 1108 1106 1104 1102 1100 4612 1121 4610 1117H 1109 4608 1117G 1031 1001 800 4606 1117F 4604 4602 1117E 801 4535 4600 4420 4517 4401 851 N. GLEB E RD. 4515 4522 4400 4520 4403 4401 1024 4514 1111 1105 1113 1101 1045 1115 1125 1123 1121 1117 1119 448 438 1119A 4325 446 4401 444 426 424 422 420 428 4350 442 4311 4309 506 440 500 4307 4301 4305 1118 4303 1110 1108 1106 1104 1102 4301 1050 4301 1121 1117 1111 1107 1101 920 421 429 900 4300 423 427 425 909 4427 1114 4245 4250 4425 1110 1102 4421 4423 1100 1050 4419 11 11 A 1105 1103 11 11 B 1053 1049 1041 4417 1045 11 11 C 1029 4223 4415 4413 4411 11 11 D 900 1113E 4409 901 4223 4219 4215 4213 4200 1110C 4201 1110A 4201 1100 1040 1038 4238 1036 1034 1032 1030 1020 4120 4139 4118 4137 1021 4128 4116 4126 4124 4122 4135 4114 4200 4133 1101 935 4112 4131 4106 4108 4110 4117 4121 1110 1108 1106 1104 4100 1000 1001 900 850 901 4040 601 875 4030 4075 4022 4020 4012 4040 4001 4000 4001 4004 1021 888 1015 818 4000 801 901 3912 4005 4006 4004 4003 3929 4002 3924 3920 4001 3900 3933 3901 4000 3931 3932 880 820 3921 3923 3916 3921 3930 3917 3833 3914 3915 3919 3912 3926 3924 3911 3909 3910 3850 3835 3830 3911 3908 3811 3905 3909 3914 3901 3903 3902 556 540 3903 3901 3900 3901 557 3904 553 319 VERMONT AH ST. 11TH ST. N. OR ST. ORD ST. PL. N. 11TH ST. N. N. RANDOLPH ST. 10TH ST (RTE 237) N. ST. 1174 1172 1117A 1117B 1117C 1117D 1136 1134 1132 1114 1112 1110 1108 1106 1104 4407 4411 4405 4409 1126 1124 1122 1120 1118 1116 1102 1100 11 13 D 11 13 C 11 13 B 1113A 4226 4224 4222 4220 4218 4216 4212 4210 4208 4206 4204 4202 1051 1047 1043 1114E 1114D1114C 1114B 1114A 1110D 1110B 1052 1050 1048 1046 1044 1042 1107 1105 1103 1101 Vicinity Map Ballston Common Mall - Store 2176 Woodmont Weavers Program / Ellipse Fine Crafts 4238 Wilson Blvd 1109 1107 1103 1055 T HRU 1025 4126 THRU 4100 1054 THRU 1020 1040 1020 T. 950 900 901 9TH ST. N. 3865 3850 3902 790 THRU 784 N VE RM ONT ST 719 715 704 4600 700 4510 711 709 782 THRU 772 N VE RM ONT ST 705 616 703 7TH N. WAKEFIELD ST. 612 621 608 617 604 613 609 600 516 748 770 768 605 512 4516 601 764 THRU 750 4515 511 746 THRU 742 740 THRU 726 4511 4509 4508 4502 ST. N. 4512 507 720 733 716 710 729 706 734 N. VERMONT ST. N. GLEBE RD. N. TAZE- WELL ST. 727 725 723 702 715 713 711 730 728 726 724 722 720 718 721 719 701 639 620 635 4425 4423 616 608 4421 4419 4427 604 4417 4413 4415 4411 4429 4424 600 601 4409 4431 4422 4407 4433 4405 4435 4420 4403 4437 4418 750 4401 4412 4410 4408 4406 4404 4402 730 4400 728 726 7TH ST. 4338 N. 628 4336 4334 624A 622A 620A 618A 624 4332 657 700 616A 622 4330 4402 653 614 620 649 612 618 645 610 655 616 641 651 637 647 633 643 639 608A 606A 604A 602A 600A 4322 635 621 608 606 604 4320 4318 631 627 625 617 613 609 602 600 4309 4307 623 605 4305 619 601 4303 615 4301 611 607 4314 4312 4300 701 603 670 4225 SPRINGS RD. 540 4221 4219 4217 660 4218 671 WILSON BLVD. 650 665 640 624 ^ 625 615 603 616 600 N. RANDOLPH ST. 501 505 5TH RD. N. 585 675 Woodmont Weavers 4019 4013 4011 N. QUINCY ST. 550 650 750 521 5TH PL. N. 514 518 522 544 525 535 545 555 3910 N. POLLARD ST. N. PIEDMONT ST 6TH ST. N 5TH ST. N. 612 702 603 615 611 607 627 623 619 629 552 548 544 536 532 528 522 609 605 601 613 4631 4610 4615 4629 4631 4611 4607 4600 4619 4621 4623 4611 4609 4607 4603 4521 4517 4605 4524 4516 4514 N. CARLIN 0 350 Feet 4615 4617 4613 4533 4521 4519 4531 4529 4527 4525 4518 4513 4510 4516 4509 4507 4505 4503 4501 4513 4511 4509 4506 4503 4502 N. PARK DR. 436 434 432 430 512 505 503 501 437 435433 530 528 526 431 518 520 522 524 4TH RD. N. 532 N. THOMAS ST. 480 525 / Pursuant to Section 54.1-402 of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography flown February 2009 Map prepared by Arlington County GIS Mapping Center Produced and May 2010 504G 514 504H 478 476 523 521 504I 504J 504F 504E 519 504K 517 504D 504L 504C 515 504B 4407 513 504A 511 509 4405 474 507 472 501 4403 503 505 470 444 450 442 440 4305 469 461 4303 4301 HENDERSON RD. 4225 432 434 436 438 426 424 422 423 4116 4204 4202 4200 417 421 4141 415 4116 411 4114 409 4112 4117 4115 4113 4119 4111 4121 4108 4106 4104 4203 4201 4202 4200 410 4114 408 4112 419 415 N. GLEBE RD. 411 4107 4105 4103 4106 4104 4117 4115 3935 383 381 374 4111 4109 4105 4103 4TH ST. N. 364 362 373 360 4101 3RD 359 357 369 363 353 367. N. 4102 4100 3920 3918 346 3912 3908 344 349 347 351 N. QU 319