RECOMMENDATION: Approve and authorize Amendment to Lease Agreement between the Port of Houston Authority of Harris County, Texas (Landlord) and the City of Houston (Tenant), for ground and lease space at 8675 Clinton Drive, Houston, Texas for the Radio Communications Division of Houston Information Technology Services (HITS).
SPECIFIC EXPLANATION: In 2008, the City of Houston purchased a new Public Safety Radio System to replace the outdated system. The new radio system has more channels and is interoperable, allowing the Houston Fire Department, the Houston Police Department and Houston Public Works to communicate more effectively with each other, within the City, and with other public safety entities to serve the needs of a growing community. To facilitate the project, HITS entered into a lease agreement with the Port of Houston Authority for approximately 0.23 acres, to construct a 300’ self-supporting communication tower and ground space for its telecommunications equipment.
The original lease agreement commenced on August 14, 2009, for term of ten-years with two five-year renewal options, at a monthly rental of $2,000. The City has exercised its renewal option, which terminates on November 30, 2024. The parties now desire to amend the lease to adjust the annual base rent to reflect the current market rate. The proposed Amendment will increase the annual rent from $24,000.00 to $24,720.00 beginning on December 1, 2019, or $2,060.00 per month, with an annual escalator of 3% during the lease term. The proposed increase is in accordance with the target monthly rental rate between $1,650 to $2,400, as recommended by the consulting firm hired by HITS to conduct a rent market analysis. Therefore, the General Services Department recommends approval of Amendment to Lease Agreement with the Port of Houston Authority of Harris County, for HITS.
All other terms and conditions of the original lease agreement remain the same.
OPERATING BUDGET FISCAL NOTE: Funding for this item is included in the FY2020 Adopted Budget. Therefore, no Fiscal Note is required as stated in the Financial Policies.
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Estimated Spending Authority
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Department
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FY2020
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Out Years
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Total
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Houston Information Technology Services
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$14,420.00
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$116,821.84
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$131,241.84
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DIRECTOR SIGNATURES/DATE:
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C. J. Messiah, Jr.
General Services Department
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Lisa Kent
Houston Information Technology Services