City of Alexandria, Virginia
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MEMORANDUM
DATE: JUNE 27, 2023
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER /s/
FROM: JEREMY MCPIKE, DIRECTOR, GENERAL SERVICES
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Public Hearing and Consideration of a Lease Agreement Between the City and Commonwealth of Virginia, Department of General Services (for the Virginia Department of Health), for 44,461 Square Feet of Rentable Space in 4850 Mark Center Drive.
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ISSUE: Consideration of a lease agreement between the City and Commonwealth of Virginia, Department of General Services (for the Virginia Department of Health (VDH)), for 44,461 square feet of rentable space in 4850 Mark Center Drive.
RECOMMENDATION: That City Council authorize the City Manager to execute a lease agreement consistent with the general terms of the attached Lease Agreement with the Commonwealth of Virginia.
BACKGROUND: On February 14, 2023, City Council authorized the City Manager to execute a lease agreement with the Commonwealth of Virginia for 44,461 square feet of rentable space at 4850 Mark Center Drive for a period of 10 years with one five-year renewal option. However, upon final review of the lease prior to execution, the Commonwealth determined that because the total rent for the entire lease term exceeds $5 million the Commonwealth could not execute the lease. Under the 10-year lease, the initial annual rent will be $1.8 million, or over $20 million over the entire 10-year term.
The state submitted language in the FY 2024 State Budget that will allow for the expenditure of the rent funds over $5 million but until the General Assembly and the Governor approve the budget, the lease cannot be executed. In February 2023, the state estimated that it would be another month or more before the Governor approves the budget. At that time because the Health Department had ...
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