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Agenda 02/11/2025 Item #16B 8 (Lease Agreement between COllier County and LG Mercantile Holdings, LLC for the Sheriff's Office Facilities Management warehouse)2/11/2025 Item # 16.B.8 ID# 2025-333 Executive Summary Recommendation to approve the Lease Agreement between Collier County and LG Mercantile Holdings, LLC, for the Sheriff’s Office Facilities Management warehouse located at 4373 Mercantile Avenue and authorize the Chairman to sign the attached Lease Agreement. OBJECTIVE: To approve a lease agreement for the Sheriff’s Office Facilities Management to continue utilizing the space for Sheriff Operations and administration. CONSIDERATIONS: Since February 2007, the Sheriff’s Office has leased a 7,000-square-foot property located at 4373 Mercantile Avenue for its facilities management, community engagement, telephone, and records storage operations. The space includes 1,200 square feet of air-conditioned warehouse, approximately 5,800 square feet of non- air-conditioned warehouse, two restrooms, and four offices. In 2007, the landlord initially charged $84,000 annually for rent, which included Common Area Maintenance (CAM) charges. Due to the economic climate, the landlord agreed to reduce the rent in 2009 through the First Amendment, lowering the annual charge to $52,800 (paying $4,400 monthly), including CAM. The Second Amendment extended the term of the lease for five additional automatic one-year renewals and increased the rent amount to $54,384 (paying $4,532.00 monthly). The Third Amendment, effective February 15, 2020, increased the rent to $63,000 per year (or $5,250 per month) and established a 3% annual rent increase for the remainder of the lease, which is set to expire on February 14, 2025. The current annual rent is $70,907.04, with monthly payments of $5,908.92. In response to rising property taxes, utilities, and insurance, the landlord has requested an adjustment to the rent in line with prevailing market rates. The proposed new rent is $122,500 annually ($10,208.33 per month) for the first year, with a 3% annual increase. The new rent is set at $17.50 per square foot, aligning with the typical rental rates in the area. A new lease agreement has been prepared, effective February 15, 2025, for a three-year term with three automatic one- year renewal options. The County retains the option to terminate the lease at any time, with or without cause, by providing sixty (60) days' written notice. Consistent with the existing lease, the County will continue to be responsible for all monthly communication and electricity costs associated with its operations at the location. The landlord will cover the costs for water consumption, sewer fees, building maintenance, landscaping, irrigation, air conditioning, and plumbing systems. FISCAL IMPACT: The total rent for the first year, including Common Area Maintenance (CAM) fees, will be $122,500, to be paid in equal monthly installments of $10,208.33. This amount will be withdrawn from the General Fund (0001), Board Paying for Sheriff (106010), Rent Building (644100). GROWTH MANAGEMENT IMPACT: This item is consistent with the Growth Management Plan. LEGAL CONSIDERATIONS: This item has been approved for form and legality and requires a majority vote for Board action. - SAA RECOMMENDATIONS: To approve and authorize the Chairman to execute the attached Lease Agreement. PREPARED BY: Sonja Stephenson, Property Management Specialist ATTACHMENTS: 1. Lease Agreement 2. 2-13-07 Lease Agreement 3. 2-10-09 First Amendment Page 1624 of 3773 2/11/2025 Item # 16.B.8 ID# 2025-333 4. 2-13-14 Second Amendment 5. 2-11-20 Third Amendment Page 1625 of 3773 4373 Mercantile Avenue, Naples FL 34104 THIS LEASE AGREEMENT ('Lease') entered into this _ day of )lt) \ WITNESSETH In consideration of the mutual covenants contained herein, and other valuable consideration, the parties agree as follows: LESSOR hereby leases to LESSEE and LESSEE hereby leases fiom LESSOR approximately 7,000 square feet of warehouse and office space, located at 4373 Mercantile Avenue, Naples, Florida 34110, hereinafter referred to as the "Demised Premises", for the sole purpose of operating a govemment office. LESSEE covenants and agrees not to use, occupy, suffer or permit said Demised Premises or any part thereof to be used or occupied for any purpose contrary to law or the rules or regulations of any public authority. ARTICLE 2. Term of Lease LESSEE shall have and hold the Demised Premises for one three (3) year term ("lnitial Term") commencing on February 15,2025 (the "Effective Date"), and ending February 14,2028. LESSEE is granted the option, provided it is not then in default ofany terms of this Lease, to automatically renew same for three (3) additional one (l) year terms, under the terms and conditions as provided herein. LESSEE, however, reserves the right to terminate this Lease. with or without cause. upon sixty (60) days prior written notice of such termination to LESSOR at the address set fo(h in ARTICLE l4 of this Lease. Said notice shall be elfective upon actual receipt by LESSOR. LESSEE, shall not be required to provide LESSOR with any advanced rent such as security deposit or holding rent. LESSEE is tax exempt and shall provide LESSOR with its tax certificate showing its exempt status. 1 @ I,EASE AGRI]IJMENT between LG Mercantile Holdings LLC, a Florida Limited Liability Company, whose mailing address is 11144 Palmetto Ridge Dr., Naples, FL 34110, hereinafter referred to as "LESSOR" and COLLIER COUNTY, a political subdivision of the State of Florida, whose mailing address is c/o Real Property Management, 2685 Horseshoe Dr. S., Suite 103. Naptes, Florida 34104, hereinafter referred as.LESSEE.' ARTICLL. l. Demised Premises Page 1626 of 3773 LESSEE hereby covenants and agrees to pay as rent for the Demised Premises the sum ofOne Hundred Twenty-Two Thousand and Five Hundred Dollars ($122,500) per year, commencing on February 14,2025, to be paid in equal monthly installments ofTen Thousand, Two Hundred and Eight Dollars and 33/100 Cents ($10,208.33) each month; the LESSEE is tax exempt. All rental payments shall be due and payable in advance on the first day of every calendar month during the term hereof. If the terms of this Lease shall commence on a day other than the first day of the month, LESSEE shall pay rental equal to one thirtieth (l/30th) of the monthly rental multiplied by the number of rental days of such lractional month. Thc annual rent for all renewals thereto shall be calculated as described in Afiicle 4 below ARTICI-E 4. Renewal Term Rent Following the first full year ofoccupancy, the annual rent shall be increased by three (3%) percent compounded for each year throughout the life ofthe lease. ARTICLE 5. Other Expenses and Charges LESSEE shall pay all interior janitorial, electricity and telephone charges pertaining to the Demised Premises. LESSEE shall maintain the air-conditioning filters within the Demised Premises. LESSOR shall be responsible for all elements ofthe maintenance and repair ofthe building and the Demised Premises not stated above, including but not limited to, plumbing, electrical, and air- conditioning systems, landscaping enhancement and/or replacement and irrigation, as well as waste removal, water, sewer, pest control, and lawn services. ARTICLE 6. Modifications to Demised Premises Prior to making any changes, alterations, additions or improvements to the Demised Premises, LESSEE will provide to LESSOR all proposals and plans for alterations, improvements, changes or additions to the Demised Premises for LESSOR'S prior written approval, specifling in writing the nature and extent of the desired alteration, improvement, change, or addition, along with the contemplated starting and completion time for such project. LESSOR or its designee will then have sixty (60) days within which to approve or deny in writing said request for changes, improvements, alterations or additions. LESSOR shall not unreasonably withhold its consent to required or appropriate alterations, improvements, changes or additions proposed by LESSEE. If after sixty (60) days there has been no written rejection delivered by LESSOR to LESSEE regardingsaid proposals or plans, then such silence shall be deemed as a APPROVAL to such request ofLESSEE. LESSEE covenants and agrees in comection with any maintenance, repair work, erection, construction, improvement, addition or alteration of any authorized modifications, additions or improvements to the Demised Premises, to observe and comply with all then and future applicable laws, ordinances, rules, regulation, and requirements olthe United States of America, State of Florida, County of Collier, and any and all govemmental agencies having jurisdiction over the Demised Premises. 2 ARTICLE 3. Rent Page 1627 of 3773 All alterations, improvements, and additions to said Demised Premises shall at once, when made or installed, be deemed as attached to the freehold and to have become property of LESSOR. Prior to the termination of this Lease or any renewal term thereof, or within thirty (30) days thereafter, if LESSOR so directs, LESSEE shall promptly remove all such additions, improvements, alterations. fixtures and installations which were placed in, on or upon the Demised Premises by or on behall of LESSEE, and which are designated in said notice, and repair any damage occasioned to the Demised Premises by such removal and in default thereof, LESSOR may complete said removals and repairs at LESSEE'S expense. ARTICLE 7. Access to Demised l)remises LESSOR, its duly authorized agents, representatives and employees, shall have the right after reasonable oral notice to LESSEE, to enter into and upon the Demised Premises or any part thereof at all reasonable hours for the purpose of examining same and making repairs orjanitorial service therein, and for the purposes ofinspection for compliance with provisions of this Lease. LESSEE covenants and agrees not to assign this Lease or to sublet the whole or any part of the Demised Premises, or to permit any other persons, other than another County agency, to occupy same without the prior expressed written consent of LESSOR. Any such assignment or subletting, even with the consent of LESSOR, shall not relieve LESSEE from liabitity for payment of rent or other sums herein provided or from the obligation to keep and be bound by the terms, conditions and covenants of this Lease. The acceptance ofrent from any other person shall not be deemed to be a waiver of any of the provisions of this Lease or to be a consent to the assignment ol this Lease or subletting of the Demised Premises. ARI'ICLE 9. Indemnity and lnsurance Subject to the limitations of Section 768.28, Florida Statues, LESSEE shall indemnifr and save harmless the LESSOR from and against any and all claims, actions and suits, and from and against any and all losses, damages, costs, charges, reasonable attorneys' fees, payments, expenses and liabilities which LESSOR may sustain or incur to the extent arising from the negligent act or negligent omission ofLESSEE or its agents, contractors or employees. LESSOR shall indemni$ and save harmless the LESSEE from and against any and all claims, actions and suits, and from and against any and all losses, damages, costs, charges, reasonable attomeys'fees, payments, expenses and liabilities which LESSEE may sustain or incur due to the sole negligent act or negligent omission ofLESSOR. LESSEE shall maintain during the course of this Lease, or any renewal thereof, comprehensive general liability coverage including bodily injury and property damage, premises and operations coverage, products and completed operations coverage, broad form property damage coverage, automobile liability coverage including owned automobiles, non-owned automobiles and hired automobiles and contractual liability coverage in an amount ofnot less than One Million and 00/100 Dollars ($ 1,000,000.00) combined single limits. If LESSEE falls under the State of Florida Worker's Compensation Law. coverage shall be provided for all employees. The coverage shall be for statutory limits in compliance with the 3 ARTICLE 8. Assienment and Subletting @ Page 1628 of 3773 applicable State and Federal laws. T'he policy must include Employer's Liability with a limit of One Hundred Thousand and 00/100 Dollars ($100,000.00) each accident. LESSOR and LESSEE on behalf of themselves and all others claiming under them, including any insurer, waive all claims against each other, including all rights of subrogation, for loss or damage to their respective property (including, but not limited to, the Demised Premises) arising from fire, smoke damage, windstorm, hail, vandalism. theft, malicious mischief and any of the other perils normally insured against in an "all risk" of physical loss policy, regardless of whether insurance against those perils is in effect with respect to such party's property and regardless ofthe negligence of either party. Ifeither party so requests, the other parry shall obtain from its insurer a written waiver of all rights of subrogation that it may have against the other party. LESSEE shall give prompt notice to LESSOR in case of fire or accidents in the Premises or in the Building or of defects therein or in the fixtures or equipment. LESSEE hereby acknowledges that LESSOR shall not be liable for any interruption to LESSEE's business for any cause whatsoever, and that LESSEE shall obtain business intemrption insurance coverage should LESSEE desire to provide coverage for such risk. LESSEE shall, at its sole cost and expense, keep the Demised Premises clean at all times. If said Demised Premises are not kept clean in the opinion of LESSOR, LESSEE will be so advised in writing. If corrective action is not taken within thirty (30) days ofthe receipt of such notice, LESSOR will cause the same to be cleaned and corrected and LESSEE shall assume and pay all necessary cleaning costs and such costs shall constitute additional rent which shall be paid by LESSEE within thirty (30) days ofreceipt of written notice ofcosts incuned by LESSOR. ARTICLE I 1. Default by LESSEE Failure of LESSEE to comply with any provision or covenant of this Lease shall constitute a default and LESSOR may, at LESSOR'S option, terminate this Lease after thirty (30) days written notice to LESSEE, unless the default be cured within that notice period (or such additional time as is reasonably required to correct such default). AR]ICLE I2 Def-ault bi' LI:SSOR LESSOR shall in no event be charged with default in the performance of any of its obligations hereunder unless and until LESSOR shall have failed to perform such obligations within ninety (90) days (or such additional time as is reasonably required to correct such default) after written notice from LESSEE to LESSOR properly specifuing wherein LESSOR has failed to perlorm any such obligations. @4 ARTICLE 10. Maintenance Page 1629 of 3773 Any notice which LESSOR or LESSEE may be required to give to the other party shall be in writing to the other party at the following addresses: LESSEE: Board of County Commissioners c/o Real Property Management 2685 Horseshoe Drive S.. Suite 103 Naples, Florida 34104 LESSOR: Domenico and Maria LaGrasta I I 144 Palmetto Ridge Dr. Naples. FL 341 I 0 ARTICLE I4 Surrender of Premises LESSEE covenants and agrees to deliver up and surrender to LESSOR possession of the Demised Premises upon expiration of this Lease. or its earlier termination, broom clean and in as good condition and repair as the same shall be at the commencement of the term of this Lease or may have been put by LESSOR or LESSEE during the continuance thereof, ordinary wear and tear and damage by fire or the elements beyond LESSEE'S control excepted. ARTICLE I5.General Provisions LESSEE fully understands that the police and law enforcement security protection provided by law enforcement agencies to the Demised Premises is limited to that provided to any other business or agency situated in Collier County, and LESSOR acknowledges that any special security measures deemed necessary for additional protection of the Demised Premises shall be the sole responsibility and cost ofLESSEE and shall involve no cost or expense to LESSOR. LESSEE expressly agrees for itself, its successor and assigns, to refrain from any use of the Demised Premises which would interfere with or adversely affect the operation and maintenance ol LESSOR'S standard operations as well as the LESSOR'S right to make improvements upon the Demised Premises as deemed necessary by LESSOR. In compliance with Section 404.056, Florida Statutes, all parties are hereby made aware of the following: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your County Public Health Department. ARTICLE 17. Uf'l'ective Date l'his Lease shall become effective on the Effective Date. 5 @ ARTICLE 13. Notices ARTICLE 16. Radon Cas Page 1630 of 3773 ARTICLE 18. Govemins Law This Lease shall be govemed and construed in accordance with the laws of the Srate of lrlorida. IN WITNESS WHEREOF, the parties hereto have hereunder set forth their hands and seals. AS TO ]]-IE I,ESSEE: DA'TED; ATTEST: CRYSTAL K. KINZEL, Clerk of The Circuit Court and Comptroller BY: , Deputy Clerk AS TO 1'III] LESSOR: .\ DATED: \ ao,u . )g 2.0 tS BY: 0 BY: BOARD OF COUNTY COMMISSIONERS. COLLIER COUNTY, FLORIDA I}Y: BURT L. SATJNDERS. Chairman LG Mercantile Holding, LLC, a Florida Iimited liability Company ><\ .a-n 14) MARIA LAGRASTA. CO LACRAS'|A, (e Sally A. AshJ<ar, Assistant County A ""Kin{ Approved as to form and legality: Page 1631 of 3773 Page 1632 of 3773 Page 1633 of 3773 Page 1634 of 3773 Page 1635 of 3773 Page 1636 of 3773 Page 1637 of 3773 Page 1638 of 3773 Page 1639 of 3773 Page 1640 of 3773 Page 1641 of 3773