Downtown committee recommends City Council approve 5-year lease at 920 State Street with caveats

The Downtown Parking Committee recommended that City Council approve a five-year lease for 920 State Street to Estrella Emporium LLC, doing business as GameSeeker, while urging staff and council to negotiate either a market-rate adjustment at the five‑year option point or to limit the lease to a five‑year term without an option to extend.

Committee member Labrie moved the recommendation and framed it as a negotiation point for council; Labrie said the committee is “supportive of the proposal, but recommends that staff negotiate a fair market adjustment at the option period and if not possible ... the city consider not offering an option, but rather simply renegotiate the lease at the end of 5 years.” The motion carried 3–1 (Pinner, Labrie and Pratt in favor; Newkirk opposed).

Committee staff described the property as one of three downtown parking-owned commercial spaces anchored by the film center at the Libero Garage/Lot 9 complex and said the recommended tenant is an established State Street retailer displaced by prior redevelopment. Staff said the recommended lease length is five years with a five‑year option to extend, a base rent of $3,000 per month, and a 10% percentage rent provision that would apply to monthly sales above a $50,000 threshold. Base rent will adjust annually with the consumer price index; staff said the percentage‑rent threshold had been negotiated up from an earlier lower floor to $50,000 to reflect tenant projections.

The committee asked about marketing and underwriting. Staff said the space was publicly advertised without a listed rental rate and that the city used local market comparables and the tenant’s business plan and financials to evaluate the proposal. Staff also said the tenant’s historical “good months” and future projections would likely exceed the percentage‑rent threshold only during busy periods such as the holidays, and that in most typical months the percentage rent would not apply.

Committee members raised three recurring concerns during discussion: (1) the apparent low effective rent given the city’s gross (not triple‑net) structure and whether the city’s goal was to maximize revenue or curate downtown retail uses; (2) the five‑year option that could effectively lock in terms for up to 10 years unless council negotiates a market adjustment at the option point; and (3) operational details including when the lease would begin and utility metering. Staff said the anticipated occupancy date would allow the tenant to begin build‑out with a target start around Sept. 24 (subject to council approval and permit work), and that utilities will be submetered in‑house so the city can bill actual use rather than provide separate public meters.

The committee’s recommendation will be forwarded to City Council for final approval. Committee members and staff emphasized that the recommendation is advisory to council; if council chooses different terms, that is within council’s authority.

Votes at a glance: The committee voted to recommend approval of the lease with the modification language, motion carried 3–1 (Committee members Pinner, Labrie and Pratt yes; Committee member Newkirk no).

Clarifying details recorded from the meeting: the city proposed a base rent of $3,000/month plus 10% of sales above $50,000/month; 5‑year initial term with a 5‑year tenant option; base rent escalates annually by CPI only; the city will submeter water and electricity (in‑house submeters) for billing; 918 State Street was described earlier in presentation as roughly 1,200 sq ft as a retail footprint, and the incoming tenant reported relocating from about 1,000 sq ft; the target tenant build‑out and start were discussed to enable holiday sales if approved.

Ending: The committee’s recommendation will go to City Council; staff said they can continue negotiations with the tenant and city attorney to incorporate a market‑rate adjustment or to limit the lease to five years before the council vote.