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Resolution Authorizing an Upset Bid Process to Lease Real Property at 929 N. Front Street
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Department: |
Economic Development |
Meeting Date: |
6/17/2025 |
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Contact Name: |
Aubrey Parsley |
Public Hearing: |
No |
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Contact Phone: |
910-200-8382 |
Advertising Date/Advertised By: |
N/A |
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Attachments: |
Attachment #1: Resolution |
PURPOSE:
The purpose of this resolution is to take in an initial offer and authorize an upset bid process based upon that offer for the lease of a portion of the eighth floor (“Property”) of 929 N. Front Street (“Skyline Center”).
BACKGROUND:
Attached for your consideration is a resolution to receive an initial offer and authorize an upset bid process based on that offer for the lease of the Property. An offer to lease the Property was received from McKim & Creed, Inc. The Property consists of approximately 22,580 rentable square feet of space. The lease term offered has an initial term of eleven (11) years, as well as two (2) options to renew the lease for an additional five (5) years each. The initial annual rent offered for the Property equals $541,920 and escalates annually by 2.5% thereafter.
N.C.G.S §160A-272 authorizes the City to enter into leases exceeding ten years in term, with such leases being treated as a sale of property that may be executed by following the procedures authorized for the sale of real property. N.C.G.S. §160A-269 permits the City to lease property pursuant to upset bid procedure after receipt of an offer.
Should the resolution pass, staff would proceed by 1) posting a bid application form for the Property to www.wilmingtonnc.gov/bids on or before June 23, 2025; and 2) posting a public notice to a newspaper of general circulation on or before June 23, 2025. The postings will describe the property to be leased, the terms and conditions of the lease, and the requirements for submitting a qualifying upset bid within 10 days after the date of publication. Bids would be due on or before 3:00 PM on July 3, 2025.
A qualifying upset bid must be an amount that is at least 10% of the first $1,000 of the original offer plus 5% of the remainder. If a qualifying bid is received, the public notice (advertisement) process would be repeated and the upset bid process would continue until no additional qualifying upset bid is received. After no additional qualifying bid has been received, Council may either 1) award to the highest responsive, responsible bidder; or 2) reject all bids.
Council may reject the original offer before or during the 10-day period from the date of the publication of the public notice. Council may also reject any subsequent qualifying bid. Should an upset bid be received, Council would again be required to vote for approval of the final bid to grant the authority necessary for Staff to conduct the transaction.
budget
BUDGET IMPACT:
The offered lease is expected to generate between $5,665,000 and $6,465,000 in revenue over the initial eleven year period.
recommendation
RECOMMENDATION / ACTION REQUESTED:
Passage of the resolution is recommended.