Subject:
Title
Second Amendment to Standard Ground Lease and Consolidation Agreement with Brookline PIE Ulmerton, LLC at St. Pete-Clearwater International Airport.
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Recommended Action:
Recommended Action
Approval and execution by the County Administrator of the Second Amendment to Standard Ground Lease and Consolidation Agreement (Amendment) with Brookline PIE Ulmerton, LLC (Brookline) at St. Pete-Clearwater International Airport (Airport).
• The Amendment reduces the Phase II premises of the original Standard Ground Lease and Consolidation Agreement from 12.32 acres to 11.04 acres because two small areas that were originally thought to be a part of the project are not available for development.
• The reduction in the premises size results in a rental credit to the lessee in the amount of $75,012.0 and a reduction in the annual rent from $228,874 to $201,611.
• The Amendment also modifies Exhibits of the Original Agreement and the First Amendment to reflect the updated acreage.
• The fiscal year (FY) 2024 Adopted Budget includes ground lease revenue of $3,940,200.00. The FY25 Proposed Budget includes ground lease revenue in the amount of $4,009,200.00.
Body
Strategic Plan:
Foster Continual Economic Growth & Vitality
4.1 Proactively attract and retain businesses with targeted jobs to the County and the region
Deliver First Class Services to the Public and Our Customers
5.4 Strive to exceed customer expectations
Summary:
The approval of the Amendment will clarify a reduction in the Phase II premises from 12.32 acres to 11.04 acres and the associated rent credit.
Background/Explanation:
Brookline (f/k/a Brookline Development Company, LLC) is a commercial real estate development company specializing in the acquisition, management, development, and redevelopment of commercial real estate. Brookline was formed in 2002 and currently owns and operates over 2 million square feet of commercial real estate that includes retail and office properties in New York, North Carolina, South Carolina, and Florida.
On March 14, 2019, the Airport and Brookline PIE Ulmerton, LLC executed the Standard Ground Lease and Consolidation Agreement (Ground Lease) which combined the previous, separate agreements and clarified the rights and responsibilities associated with Brookline’s use and development of the property.
On June 16, 2021, Brookline executed an Assignment and Assumption of Lease with Elite Air Jet Center, LLC transferring their leasehold rights to Phase III of the project site for development of a jet center.
On October 13, 2023, Brookline executed a First Amendment to Standard Ground Lease and Consolidation Agreement and Assignment and Assumption of Leasehold 1-A which transferred Brookline’s interest in Phase 1 of the project site to R1 Clearwater, LLC, a subsidiary of Baywood Hotels, for the development of a 132-room Marriott Residence Inn Hotel.
Pursuant to paragraph 1 of the Ground Lease, this Amendment reduces Brookline’s Phase II premises from 12.32 acres to 11.04 acres based on the removal of two small areas that were thought to be part of the project, but are not available for development. Brookline has been paying rent for this additional acreage, and the rent credit reimburses them for the excess rent paid. Moving forward, the rent is based on the new, corrected square footage.
Fiscal Impact:
Brookline will receive a rent credit of $75,012 and based on the new premises size, the annual rent will be reduced from $228,874 to $201,611.
The Amendment revenue is included in the FY24 Adopted Budget and the FY25 Proposed Budget. FY24 revenue is not impacted by the Amendment. FY25 revenue is approximately 2.4% less than in previous years due to the $75,012.00 (1.7%) rent credit and the $27,263.72 (0.7%) reduction in the annual premise lease payment.
Delegated Authority:
Authority for the County Administrator to sign this Amendment is granted under Code Section 2-62 (a)(5).
Staff Member Responsible:
Thomas R. Jewsbury, Director, St. Pete-Clearwater International Airport
Partners:
N/A
Attachments:
Second Amendment to Standard Ground Lease Agreement
First Amendment to Standard Ground Lease and Consolidation Agreement and Assignment and Assumption of Leasehold 1-A
Standard Ground Lease and Consolidation Agreement