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Council approves lease amendment with ATAG at Samtec; extends term and adjusts tenant improvement terms
Summary
The council approved a First Amendment to ATAG's lease at the Sahuarita Advanced Manufacturing and Technology Center (Samtec) to extend the term, increase the tenant improvement allowance for a longer lease and add deferred‑rent payback and limited early‑termination provisions; the vote was unanimous.
Council approved an amendment to the lease with Advanced Technologies Applications Group (ATAG) for 4,500 rentable square feet at the Sahuarita Advanced Manufacturing and Technology Center (Samtec).
Staff presented the amendment as a cleanup and term adjustment to the lease the town approved the prior September. Key provisions in the amendment include: a corrected rentable area (4,500 sq. ft. rather than 5,000), a lease term extended to a total of 128 calendar months (10 years plus eight months of previously negotiated rent abatement captured on the back end), and an increased tenant improvement (TI) allowance of $157,500 to align with other 10‑year tenants.
The amendment also formalizes deferred rent for months 9–12 of the initial year (which had been agreed as an earlier rent abatement). That deferred amount (about $11,700) will be repaid beginning in month 60 and amortized through month 120. ATAG requested the town cover a tenant improvement cost balance (about $49,000) beyond the allowance; the town will recover that amount via an amortized charge of $0.09 per sq. ft. per month through the same term. The amendment contains early‑termination language that allows ATAG to terminate after 48 months without repaying the TI balance only if ATAG builds and occupies a new facility within the town limits.
Staff noted the town will pay for the HVAC control unit and some other landlord‑provided shell improvements, consistent with previous shell‑building arrangements. ATAG’s representatives were unable to attend due to travel issues; staff said ATAG intends to expand in town over time.
A motion to approve the First Amendment to the lease passed unanimously. Council also approved an associated budget amendment to record the additional TI allowance and landlord costs for the HVAC control unit and finish work. Staff noted ATAG’s projected job numbers and payroll remain consistent with the company’s presentation to the council when the original lease was approved.
