Council tells staff to re-offer short-term lease terms to Krabby's while keeping city termination option

After an update on negotiations over the Marina building lease, the council directed staff to re-issue a letter of intent (LOI) offering a five-year lease extension that includes a city-held termination option of 12 months’ notice. Councilmember Urban said the Marina building is an important city asset and reiterated his view that the city should move in a different direction with the space in the future. Staff explained the LOI would propose a five-year initial term to the current tenant but include a condition that the city could terminate the lease with 12 months’ notice if council later decides to redevelop or change the Marina building’s use. City staff stated the rent rate in the LOI was consistent with an earlier study of comparable market values and noted the proposed termination clause was meant to preserve council flexibility while keeping revenue in place if the tenant remains. Staff said they would reissue the LOI and ask the tenant to respond within 30 days; if the tenant declines or does not respond, staff would follow council direction about next steps. Councilmembers said the proposal balanced the tenant’s need for business certainty and the city’s interest in preserving future development options. No formal ordinance or lease amendment was approved at the meeting; staff will follow up with the tenant and return to the council if a signed lease or other recommendation is forthcoming.