6.0. EDSR 02-10-1997 - Laserfiche WebLink

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Business Incubator Issues February 6, 1997 Page 5 • 0 Cost of leasehold improvements Anticipated year one expenses of$25,000 These leasehold improvement costs are broken down as follows: 0 Construction of bathroom facilities including septic system and drainfield 0 Construction of walls and doors to accommodate office uses 0 Separation of lights, heat zones, air exchange, installation of electrical and phone jacks, etc. 0 Addition of a heating plant for a portion of the space to be leased. Larry Hickman's contractor has indicated rough costs to complete all of the above activities in order to provide leasable space to the EDA is approximately$30-50,000. The contractor is finalizing these costs at this time. Hickman has indicated he would pay for all the costs of di the leasehold improvements up front, but would require that the 111. EDA reimburse him for such costs prior to taking occupancy of the space. Hickman has indicated the following with regard to the cost of construction of bathroom facilities and the septic system and drainfield: 0 EDA to pay for these costs up front 0 Hickman to repay the EDA at the end of its lease based upon a standard seven year depreciation schedule. For example, if the EDA were to vacate the space at the end of its initial two year term, Larry Hickman would reimburse the EDA for 71.43 percent of the up front costs of construction of the bathroom facilities and septic system/drainfield. Staff and Hickman have also discussed that another major cost is the addition of a heating plant to serve a portion of the building which will be leased by the EDA. Staff's position is that this addition will retain value for the building long after the EDA would vacate the premises and, therefore, the expense of adding a heating plant should be that of the building owners and not the EDA.