Coversheet

ITEM 12.
County Lands - Consent


AGENDA ITEM REPORT

DATE:	November 7, 2023
DEPARTMENT:	County Lands
REQUESTER:	Robert Clemens
TITLE:	Amend Purchase Agreement for Natural Resources' Environmental Laboratory Building

MOTION REQUESTED

A) Approve the Purchase Agreement Amendment between Bushwood Land Development, LLC and Lee County, changing acceptable lease terms, accepting existing lease agreement for Unit 101 and accepting a credit at closing for roof repairs and air conditioning unit repairs/replacements, in the purchase of a 12,720+/- square foot commercial building located at 5248 Red Cedar Drive, Fort Myers. The estimated credit is $250,000;
B) Authorize the Chair to execute the Purchase Agreement Amendment on behalf of the Board; and

C) Authorize the Chair to execute a new lease agreement with the existing tenant in Unit 103.

II.

ITEM SUMMARY

The Board approved a purchase agreement with Bushwood Land Development, LLC for a commercial building located at 5248 Red Cedar Drive, Fort Myers, on June 20, 2023. This location will be used to house the Natural Resources and the State Department of Health Environmental Lab.

The amendment to this purchase agreement changes the terms for the County to receive an estimated $250,000 closing credit for roof repairs/replacement and air conditioning replacements. The closing credit is being accepted instead of seller's repair and/or replacement of a/c units and roof to allow the County to replace these items in its build-out without scraping new improvements.

Also being approved with this item is a new lease and a continued lease, both with existing tenants:

The new lease is for 4,425 sq. ft., with monthly rent of $8,799.94 ($105,359.28 annually), escalating at 3% yearly with the option extend the lease until April 30, 2026.
The continued lease is for 1,907 sq. ft., with monthly rent of $4,021.74 ($51,199.99 annually), escalating at 3% yearly with the option to extend the lease until April 30, 2033.

III.

BACKGROUND AND IMPLICATIONS OF ACTION

	A)	Board Action and Other History
		On June 20, 2023, the Board approved entering into a Purchase Agreement for no more than $2,800,000 to house the Department of Natural Resources and the State Department of Health environmental laboratory to expand the Lee County Medical Examiner footprint at its current site.

	B)	Policy Issues

	C)	BoCC Goals

	D)	Analysis
		Conditions of the purchase included the tenants entering into lease agreements with Lee County. Additionally, the cost for roof repairs/replacement and replacement of air conditioning units are to be credited at closing. The tenant of Unit 101 is unwilling to enter into a lease with the County with similar terms. The tenant of Unit 101 occupies 1,907 square feet at a monthly rent of $4,021.74 ($51,199.99 annually), escalating 3% each May 1st and expiring April 30, 2033 assuming the tenant extends through all terms. Staff recommend continuing under the existing lease with Unit 101 as this space is not immediately needed for the laboratory relocation. The tenant of Unit 103 has agreed to a lease with the County for 4,425 square feet beginning at a monthly rent of $8,799.94 ($105,359.28 annually), escalating at 3% each November 1st and expiring April 30, 2026 assuming the tenant extends through all terms. Staff recommend approving the lease with Lee County. Seller made staff aware that he would replace the roof and air conditioning units in lieu of the average of quotes from Seller and County. Staff desires that the repairs to the roof and replacement of air conditioning units not be completed, as this allows the repairs and replacements to occur with County’s ultimate renovation of the facility for the laboratory operations. Staff recommend approving the amendment to reflect a credit from the Seller of approximately $250,000, which will result in a savings to the renovation costs.

	E)	Options
		1. Approve amendment to the Purchase Agreement accepting credit for HVAC system replacement and roof repair from Seller only, accepting the existing lease for Unit 101, and executing a lease for Unit 103. 2. Reject amendment and terminate the Purchase Agreement.

IV.

FINANCIAL INFORMATION

A)	Current year dollar amount of item:	No funding required.
B)	Is this item approved in the current budget?	N/A
C)	Is this a revenue or expense item?	N/A
D)	Is this Discretionary or Mandatory?	N/A
E)	Will this item impact future budgets? If yes, please include reasons in III(D) above.	No
F)	Fund: General Fund Program: Major Maintenance Project: CW Building Renovations Account Strings: N/A
G)	Fund Type?	N/A
H)	Comments:

V.	RECOMMENDATION
	Approve

VI.	TIMING/IMPLEMENTATION

VII.	FOLLOW UP

ATTACHMENTS:
Description	Upload Date	Type
Amended Agreement for Purchase and Sale	10/9/2023	Agreement
Existing Lease and Addendum for Unit 101	10/9/2023	Backup Material
Lease Agreement Unit 103	10/9/2023	Agreement
Location Maps	10/9/2023	Backup Material
110723R-C-12-Amendment to Agreement for Purchase and Sale of Real Estate	11/14/2023	Agreement
110723R-C-12-Lease Agreement Unit 103	11/14/2023	Agreement

REVIEWERS:
Department	Reviewer	Action	Date
County Lands	Clemens, Robert	Approved	10/25/2023 - 9:48 AM
County Lands	Ottolini, Roland	Approved	10/25/2023 - 9:51 AM
Budget Services	Guttery, Angela	Approved	10/25/2023 - 1:32 PM
Budget Services	Winton, Peter	Approved	10/26/2023 - 8:46 AM
County Attorney	Halverson, David	Approved	10/31/2023 - 8:06 AM
County Manager	Mora, Marc	Approved	10/31/2023 - 12:08 PM