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Lease of Office Space Scotia Place Recommendation: That a lease between the City of Edmonton and Morguard Real Estate Investment Trust, WR Equities Inc., and CPP Investment Board Real Estate Holdings Inc., for office space at Scotia Place outlined in Attachment 1 of the March 10, 2008, Asset Management and Public Works Department report 2008PW1519, be approved. Report Summary The action recommended in this report is for the City of Edmonton to lease office space in Scotia Place for a five-year term. Policy A1407A – Provision of Office and Special Purpose Accommodation Focus Area Environmental – Balanced Infrastructure Management Justification of Recommendation The City of Edmonton currently leases space in Scotia Place; the proposed additional space will take advantage of the existing computer network system and will provide an opportunity to share meeting and boardroom spaces. The proposed rental rate reflects current market rent. Attachments 1. Essential Terms and Conditions of the Proposed Lease Report Asset Management and Public Works Department is currently attempting to acquire leased space to accommodate growth within Administration. The demand for space in the downtown precinct cannot be satisfied within the existing City owned or leased space and current market conditions place a premium on a diminishing supply of large blocks of space that are suitable for the City’s use. As such, the space offered in Scotia Place represents an opportunity that exists only for a limited period and that will support the implementation of the corporate reorganization. This lease will be funded from the City Council approved Space Management Program. ROUTING – Transportation and Public Works Committee | DELEGATION – W. D. Burn/R. Daviss WRITTEN BY – L. Smith | March 10, 2008 – Asset Management and Public Works Department 2008PW1519 Page 1 of 1 E 8 Attachment 1 Essential Terms and Conditions of the Proposed Lease 1. Premises 34,800 rentable square feet (more or less) located on the 8th, 9th and 10th floor, Scotia Place, Tower Two. 2. Municipal Address 10060 – Jasper Avenue Legal Description Plan 8221723 Lot A 3. Building Owner/Landlord Morguard Real Estate Investment Trust, WR Equities Inc, and CPP Investment Board Real Estate Holdings Inc. 4. Term of Lease and Base Rent Five-year term to commence October 1, 2008 or such other mutually agreeable date, at a rental rate of $27.00 per square foot. 5. Renewal Option The City has the option to renew the lease for a period of up to five (5) years. The annual base rent for the renewal term would be based on the then existing market rate. 6. Operating Costs The City is responsible for annual operating costs, which are approximately $10.50 per square foot for 2008. 7. Tenant Improvements The premises will require tenant improvements, which are estimated at $40.00 per square foot. 8. Parking The Landlord will provide up to 13 unassigned parking stalls within the building parking facility at a monthly rate of $275 per month per stall, subject to market increases during the term of the lease. 9. Form and Content of the Lease That the agreement be acceptable in form to the Corporate Services, Law Branch and in content to the General Manager of Asset Management and Public Works. Approval of the proposed lease shall include the provision for amendments that the City Manager may deem necessary in order to carry out the intent and parameters of the recommendation. Page 1 of 1 Report: 2008PW1519 Attachment 1