Agenda

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Item # 6.

Work Session and Regular Meeting

Meeting Date:	04/09/2019
Department:	Economic Development
Pillars:	Innovation in Entrepreneurship & Business
Milestones:	Leverage Addison's assets to grow and expand placemaking business programs and events that will set Addison apart to attract talent and businesses

AGENDA CAPTION:

Consider Action to Approve a Resolution for the First Amendment to Lease Agreement Between Town of Addison and 14671-14683 Midway Road, LP for Approximately 14,800 Square Feet Located at 14681 Midway Road, Commonly Known as The Addison TreeHouse, and Authorize the City Manager to Execute the Agreement.

BACKGROUND:

The purpose of this agenda item is to enter into an agreement with the landlord of the Addison TreeHouse (14671-14683 Midway Road, LP) to extend the expiring lease of the Addison TreeHouse for an additional five years. The Town currently leases 14,800 square feet. The new lease would commence in May 2019 and expire on May 31, 2024.

As part of the negotiations with the landlord, the base rent will increase by 5% to a monthly amount of $17,267 ($207,204 annually) with no annual escalations. The increase is commensurate with average market increases for lease renewals. As a value-add for the increase, the landlord has agreed to address major issues related the Americans With Disability Act (ADA) that were highlighted in the Town of Addison ADA Self-Evaluation & Transition Plan. A construction checklist to be completed by the landlord is attached to the lease extension agreement. It includes improvements to parking, sidewalk slope access to the building, and full bathroom remodels.

All provisions highlighted in the original prime lease executed in February 2014 will remain the same. This includes a pro-rata annual payment share of the operating expenses by the Town not to exceed 7% of the base rent, and occupancy by the Town of Addison of the space is also contingent on annual budget funding by the Town for the space. This means that the Town may exit the lease on an annual basis if City Council decides not to provide funding for the lease of the space for the following year during the annual budget process.

Funding for the space is allocated and available in the Economic Development Budget.

The Addison TreeHouse is home to the Town’s Economic Development & Tourism Department (ED&T), and partners which include the Dallas Entrepreneur Center, Baylor University’s Accelerated Ventures Program, and a satellite office of the North Texas Small Business Development Center. The TreeHouse currently houses 65 startups that employ 80 people. Over the last four years, the TreeHouse has launched over 100 business startups that have brought in over $8 million in private investment. The Addison TreeHouse has become a unique, one-stop shop for individuals who are starting a new business or need a collaborative work environment to grow their business. Notable graduates include companies such as Pickup Now, Divergence Academy, Post It Play It, Spacee, Elacarte, Menu Runners, and Maverick Windows, just to name a few. Partnerships with groups such as SCORE, the Women’s Business Center, and LiftFund, just to name a few, have augmented local programing options.

The large TreeHouse event room has also served as a community space by various departments in the Town to host public meetings, events, and even city council meetings. The space has also provided support to the Town’s business retention and expansion program, by being a venue that has been provided to larger, existing Addison businesses who have needed a large open space to host a meeting.

The Addison TreeHouse helped achieve the goals of the 2010 Economic Development Strategic Plan and will continue to be a focal point in the proposed new economic development strategic plan. The efforts launched at the Addison TreeHouse have been recognized by groups such as Google with its Texas e-City Award, NerdWallet with its recognition of Addison as being the number one place in Texas to start a business, and by the International Economic Development Council for the Town’s support of entrepreneurs.

RECOMMENDATION:

Administration Recommends Approval.

Attachments
Resolution - Treehouse Lease Renewal 2019
Agreement - TreeHouse Original Prime Lease Agreement