The Economic Matters Committee of Annapolis convened on September 17, 2025, to discuss various financial matters, including adjustments to performance rent agreements. The meeting focused on the recent decision to decrease the performance rent percentage from 2% to 1%, while maintaining the base rent at $1,500,000.

Committee members explained that this change was made at the request of the tenant, who cited operational and financial considerations. The tenant argued that a 1% performance rent is more viable given their experience after several years in the facility. Director Moran noted that, based on the financial projections for Fiscal Year 2025, the city would actually receive slightly more rent under the new arrangement, despite the decrease in performance rent. The anticipated short-term impact on the city’s finances was described as minimal, with a net gain expected due to an increase in base rent.

Alderman Savage raised further inquiries regarding the rent structure, specifically about the presence of sufficient out clauses in the agreement. He expressed concern about potential issues that could arise and sought clarification on whether performance standards could be tied to these clauses.

The meeting concluded without additional questions, indicating a consensus on the discussed changes and a focus on long-term financial viability for both the city and the tenant. The committee plans to monitor the situation as the new rent structure takes effect.