Memorandum 16-128 Yourkowski Lease Amendment and Request to Sublease Lot 88-2

Memorandum 16-128

TO:                       MAYOR BETH WYTHE & HOMER CITY COUNCIL  

THROUGH:         PORT & HARBOR ADVISORY COMMISSION

FROM:                  CITY LEASE STAFF

DATE:                   JULY 13, 2016

SUBJECT:           YOURKOWSKI LEASE AMENDMENT & REQUEST TO SUBLEASE

On July 10, 2015, Michael Yourkowski requested to exercise his final 10-year Option to Renew and make amendments to his lease.  Since then, Mr. Yourkowski has resolved the outstanding lease issues brought up by the City, and met with City Lease Staff to discuss his requested lease amendments/final issue regarding the use of the City’s Right-of-Way.  His Option to Renew was approved by the City Manager on June 30, 2016 and a draft of the First Lease Amendment was provided; this amendment was agreed to by Mr. Yourkowski on July 12, 2016.

The First Lease Amendment, which will retroactively begin December 1, 2015 to be the same as the begin date of Mr. Yourkowski’s 10-year Option to Renew, makes the following changes:

Section 1. Property – Adding a portion of the City of Homer ROW, totaling 611 square feet, to allow the specific use of additional restaurant seating; no other structures or buildings will be allowed.
Section 3. Rent – Amending the base rent to be paid in quarterly installments instead of monthly(beginning January 1, 2016) and adding a separate rent for the portion of the City’s ROW and how it is to be calculated; a request from Mr. Yourkowski that was agreed to by the Port and Harbor Office, who oversees billing.
Section 5. Use & Care of the Property – Adding verbiage regarding the specific use of the added portion of the City’s ROW.
Section 8. Restrictions on Transfer – Amending the section to bring it up to-date with current ground lease policies; it is a goal of City Lease Staff to bring older leases more up to-date with current policies specific to subleasing allowance and security deposit requirements.

In addition to the lease amendments, Mr. Yourkowski has provided to the City Manager and City Lease Staff a list of current/active subleases he has; per Section 8 of his lease, Mr. Yourkowski must request in writing that his sublease agreements be approved by City Council.  The City Manager and Lease Staff have approved the list of subleases and recommend that Mr. Yourkowski be allowed to sublease within the parameters of his approved lease.

Recommendation

Approve the amendments to Michael Yourkowski’s lease with the City of Homer, and to direct the City Manager to sign the First Lease Amendment to Mr. Yourkowski’s lease, retroactively taking affect December 1, 2015 to be the same as the beginning of the 10-year Option to Renew.  Further, staff recommends City Council approve Mr. Yourkowski’s request to sublease.

Attached:                 Yourkowski First Lease Amendment – December 1, 2015

                                        Letter to City from Mike Yourkowski Re: Sublease List, dated May 12, 2016