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Real estate committee approves revised 4th amendment for 3 Lockwood Drive lease
Summary
The Charleston City real estate committee approved a revised 4th amendment to the ground lease at 3 Lockwood Drive, shortening the first extension to three years at 3% escalation and scheduling three subsequent five-year options with rent reset to fair market value; Safe Harbor withdrew its proposed assignment, staff said.
The Charleston City Committee on Real Estate voted Dec. 16 to approve a revised fourth amendment to the ground lease for 3 Lockwood Drive, city staff said.
Miss Dinwiddie, a city real estate staff member, told the committee the amendment replaces a previously proposed set of four five-year extension options with an initial three-year extension at the current 3% annual escalation, followed by three five-year options in which rent would be recalculated to ground-lease fair market value. "What we've negotiated with Charleston Marine Holdings...is a 1, 3 year extension period at the 3% escalation rate and then 3 5 year extension periods with the rent being recalculated at the start of the notes to bring it up to a ground lease fair market value," Dinwiddie said.
Dinwiddie said the change reduces the months the lease would remain below market from about 88 months under the prior proposal to roughly 64 months under the revised structure. She also reported that Safe Harbor, which had earlier discussed an assignment, "is no longer going to be moving forward with the acquisition of this lease," a development staff said they learned that afternoon.
The mayor, speaking to the committee, framed the amendment as a pragmatic compromise that avoids the immediate costs and management burdens of taking back the building. "We could make a lot more money, but we probably have to put a decent amount of money into it," he said, adding that the current tenant has been reliable and that reclamation and re-tenanting would require significant investment.
Council member Greg said he appreciated staff work on a compromise and intended to support the amendment. The committee approved the amendment by voice vote; the chair recorded the ayes and stated there were no oppositions.
The committee did not provide a detailed roll-call tally in the transcript. Staff said the amendment on the table is a clean addition of the revised extension terms and does not include relocation-of-improvements provisions that had applied only if Safe Harbor had proceeded with assignment. The amendment will return to the appropriate docket for any final administrative steps required to execute the document.
