Title
Innovation and Technology Data Center Lease Agreement Amendment to Add an Option to Renew
Action
Action:
Approve an amendment to the original lease agreement with Digital 125 N. Myers, LLC to modify the term of the lease adding an option to renew for an additional five years.
Body
Staff Resource(s):
Jeff Stovall, Innovation and Technology
Mike Davis, Engineering and Property Management
Angela Hagerman, Engineering and Property Management
Explanation
* On June 24, 2003, the Innovation and Technology Department (I&T) executed a 10-year lease with two, five-year renewal options for 6,627 square feet at 125 N. Myers Street in uptown Charlotte which expires June 30, 2023. This space is used to operate the City's data center equipment, including the core network and server infrastructure.
* The City currently pays $208,498 per year, or $31 per square foot, in rent with three percent annual rate increases.
* If the City chooses to exercise the option to renew, the lease term will be extended from 2023 to 2028. The City will have until September 30, 2022 to decide whether to exercise the option.
* The data center space is distinct from the new I&T administrative facility located at 5516 Central Avenue that was approved by City Council on October 23, 2017. The administrative facility will be used to consolidate personnel in a traditional office environment, whereas the data center is occupied primarily by equipment rather than employees.
* City staff recommends I&T continue a long-term lease because of the significant expense associated with data center relocation and construction. City staff estimates potential costs to construct a new data center to exceed $10,000,000.
* Terms of the proposed amendment are as follows:
* One, five-year option to renew, and
* $238,572 per year in rent with three percent annual rate increases. This rate is consistent with market rates.
* All other lease terms will remain the same.
Fiscal Note
Funding: I&T Operat...
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