SalemNews.com, Salem, MA

January 25, 2013

Salem council OKs annex lease

By Bethany Bray
STAFF WRITER

---- — SALEM — City councilors voted last night to keep the City Hall Annex at 120 Washington St. for three more years.

With a unanimous vote, the board OK’d a three-year lease that starts at a monthly rent of $30,500 and increases by $1,000 for each of the second and third years.

The council also took a step toward relocating the annex once the three-year lease expires. Moments after approving the lease, the board voted to reactivate a dormant subcommittee to search for a new annex location.

Councilors Jerry Ryan, Michael Sosnowski and William Legault will serve on the search committee, along with representatives from the planning and mayor’s offices, the city’s building inspector, and Salem resident and Realtor George Fallon.

The city has been taking one-year extensions of the 120 Washington St. lease since 2011, when the council rejected Mayor Kim Driscoll’s proposal to sign a five-year deal with the building owner, RCG.

This winter, Driscoll and city Finance Director Richard Viscay urged the council to approve a proposed three-year lease, saying it would save the city $65,000.

If the city were to continue with its year-to-year lease extension, rent and other expenses would total $35,776 per month, according to Viscay.

The annex, a stone’s throw from City Hall, has housed various city departments, including licensing, planning and community development, since 2001. The city’s initial, 10-year lease expired in February 2011.

Councilors sent the lease to the board’s subcommittee on administration and finance this month, which discussed the issue in two sessions.

The subcommittee suggested one change: that any extension of the lease beyond three years must be approved by the City Council. The lease, which is slated to begin March 1, has the option to extend the agreement for up to seven one-year terms beyond the initial three years.

“That is something we don’t want to do,” Councilor Paul Prevey said last night. “Three years is long enough.”

This winter’s discussion and approval of the 120 Washington St. lease contrasts starkly with those in 2011, when debate between the mayor and some councilors became heated.

The subcommittee to search for an alternative location for the City Hall Annex was formed as discussions reached a boiling point, but the group never met.

The council voted to reactivate that subcommittee last night, charging it to report back to the City Council with an update at the board’s first meeting in September.

Fallon, an agent at Tache Real Estate, was at this week’s administration and finance subcommittee meeting and volunteered to join the search committee, Prevey said.

This fall, the city requested proposals for annex office space but received only one reply: RCG, the landlord of 120 Washington St. The request sought a 20,000- to 25,000-square-foot space located 700 feet or less from City Hall.

The lease, negotiated between RCG and city officials, charges $366,000 for the first year’s rent, $378,000 for the second year’s rent and $390,000 for the third year’s rent.

The agreement also asks RCG to install new flooring, repaint walls and renovate the elevator.

Bethany Bray can be reached at bbray@salemnews.com and on Twitter @SalemNewsBB.