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HomeMy WebLinkAboutPresentation_Renton Market LeaseMarch 23,2026 City Council Finance Committee Jeff Minisci, Facilities Director Renton Market Lease with Logan Market LLC HISTORY •Market concept briefed at COW - April 2019 •Request for Proposal (RFP) posted – May 2019 •City staff presented the Pavilion market concept and recommended tenant to COW – August 2019 •Concept Approved – December 2021 •Concept Completed – January 2022 •Design Phase and Negotiation with Tenant – September 2019 – May 2025 •COVID – March 2020 – May 2023 •Bid Opening – June 10, 2025 •Notice to Proceed – July 2025 •Construction – July 2025 through May 2026 •Closeout – June/July 2026 Renton Market Project Vision & Community Benefit •City-owned facility with leased private operator. •Designed for small incubator spaces, local food, artisans, and community programming •Combines indoor market, outdoor extensions, and Piazza programming. •Creates community gathering space. •Activates the surrounding downtown public spaces. •Alignment with City of Renton Goals. •Support the City’s commitment to a safe, healthy, and vibrant community. •Promotes downtown activation. •Establishes a year around market in Downtown Renton. Premises & Spaces Included •Market Building: 11,783 SF indoor market space. •Outdoor Extension Area: 1,766 SF for outdoor seating. •Piazza: Adjacent public space available for events, community programming, and special activates following the city's parks and recreations permitting system. •Parking: 30 assigned leased stalls in City Center Garage to support market operations. •Storage: Dedicated leased garage storage areas. •Loading Area: North side for vendor deliveries, waste management, and operational access. •Floor Plan North COR Parking Garage Piazza 1 to 3 Kiosks 1 to 3 Kiosks Lease Terms & Key Phases •Initial Term: 10 years April 1, 2026 – March 30, 2036 •Extension Options: Two (2) additional 5-year extensions that require mutual agreement, with the City retaining discretion to decline renewal with advance notice. •Phase 1 – Joint Possession (April 1, 2026): •Tenant improvements with not base rent (Tenant funds kiosks, furnishing, equipment, and build out) Tenant is still responsible for Utilities, insurance, and Leasehold Excise Tax. •Phase 2 – Tenant receives exclusive market possession ( Oct 1, 2026)- Starts base rent. •Phase 3 (April 1, 2032) – Fair Market Value Reassessment to make sure the lease is aligned with market conditions. • Annual rent escalation of 3% for the life of the lease •Lease includes standard termination and default provisions that protect the city. City retains the ability to terminate the agreement and secure a new operator. Step-Up Rent Structure •Years 1–2: $5.00 / SQFT / $58,915 •Years 3–4: $10.00 / SQFT / $117,830 •Year 5: $15.00 / SQFT / $176,745 •Year 6+: Prior year SQFT cost + 3% escalation annually Beyond Base Rent •Parking: $14,357 annually •Storage $100 Month Why Step up rent structure? Markets take time to build vendors and be recruited; events and programming takes time to build momentum. Encourages investment by the operator. The structure allows rent to increase as the market becomes successful and eventually aligning with fair market value. Previous Tenant Rent & Revenue Rent – Per Year $13,540.80 Per SQFT $.1.149xxx Plus Revenue Sharing 2022 - $47,788.54 2023 - $81,240.82 2024 - $74,227.30 Lease Financials Total Revenue Per Year •Year 1-2 $74,472 •Year 3-4 $133,387 •Year 5 $192,302 Tenant Responsibilities •Operate and mange the Renton Market •Ensure operations comply with city zoning and permitted uses •Subtenant must operate consistent with market purpose •Paying all utilities and services cost •Maintenance and repairs of the leased premises •Build out for anchor spaces and the vendor stalls •Two(2) sit-down restaurants •One(1) Cheese monger/butcher/fish monger •Minimum of four(4) artist/prepared food/mixed booth City owns the building; the operator is responsible for the leasing of space and day-to-day operation of the market. Community activation and vendor programming •Tenant is responsible for developing, organizing, and delivering calendar of the public oriented programs and events. •Quarterly Programming Plan of events. •Seasonal or holiday markets. •Cultural celebrations. •Food & culinary events. •Community educational workshops and demonstrations. •Develop and implement a marketing plan to promote the Renton Market. Performance Reporting •Visitor foot traffic and visit count growth •Vendor stall anchor tenant occupancy targets •Customer feedback surveys •Revenue metrics •Operational and Facilities compliance Termination Defaults Remedies •Pay Rent or required fees •Perform lease obligations or operating requirements •Notice & opportunity to Cure •City has enforcement rights •No automatic holdover allowed The lease includes standard default and termination provisions that allow the City to enforce the agreement If obligations are not met, while also providing the tenant an opportunity to correct issues before any action is taken. City Responsibilities •The City’s role is primarily ownership and oversight. Review and approve significant alterations monitor compliance with the lease and ensure that the market continues to operate in a way that aligns with the intended purpose. •Responsible for major structural components of the building systems to protect the city’s investment Thank You! Q&A?