Sponsor: Property Management
Title
title
Amended and Restated Lease Agreement with Regions Hospital and Gillette Children’s Specialty Healthcare.
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Recommendation
recommendation
1. Approve the Amended and Restated Lease Agreement with Regions Hospital, 640 Jackson Street, Saint Paul, MN 55101, and Gillette Children’s Specialty Healthcare, 640 Jackson Street, Saint Paul, MN 55101 for the period of January 1, 2020 through December 31, 2040.
2. Authorize the Chair and Chief Clerk to execute the agreement.
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Background
background
In 1872, Ramsey County and the City of Saint Paul established on land owned by the County a hospital to serve the residents of Ramsey County and surrounding areas. The hospital’s operations were overseen by a variety of legislatively created bodies. A nonprofit subsidiary of Ramsey Health Care, Inc. Saint Paul-Ramsey Medical Center, Inc. operated the hospital as the Saint Paul Ramsey Medical Center. In 1992, the County leased the land and buildings to Ramsey Health Care, Inc., which later assigned the lease to Saint Paul-Ramsey Medical Center, Inc. (the Original Lease).In 1997, Saint Paul-Ramsey Medical Center, Inc. changed its name and the name of the hospital to Regions Hospital. The Original Lease has been amended several times. Most recently, in 2018, the Amended and Restated Lease Agreement extended the term to 2100 and consolidated terms from several amendments into one agreement.
Ramsey County consented to Regions Hospital lease with Gillette Children’s Specialty Healthcare (the Gillette Lease) for a portion of the complex under an Amended and Restated Hospital Lease effective January 1, 2002. The Gillette Lease has been amended five times, most recently in 2018.
Regions Hospital and Gillette Children’s Specialty Healthcare have been negotiating since early 2020 and recently requested our approval for the Gillette Lease and amendments be combined into a new unified lease agreement for clarity and to update features of the agreement to be consistent with current conditions. Amending and restating the lease as of January 1, 2020 accomplishes the following:
1. Concisely states the current premises and associated square footage.
2. Clarifies access, use and payment for the west parking ramp.
3. Establishes the term of the Gillette lease through December 31, 2040 and revises the terms for two successive fifteen-year renewal options.
4. Adjusts the rental rate and operating expenses to reflect current conditions and provide greater transparency related to capital improvement costs.
The Amended and Restated Lease combines several interrelated documents into one coherent document that details the relationship between Regions as landlord and Gillette Children’s Specialty Healthcare as tenant. The Amended and Restated Lease does not change the relationships of the County with the other parties, and does not create additional obligations for Ramsey County. Under the terms of the Original Lease, Ramsey County consent for the Amended and Restated Lease is requested.
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County Goals (Check those advanced by Action)
☐ Well-being ☐ Prosperity ☐ Opportunity ☑ Accountability
Racial Equity Impact
There is no known racial equity impact from approving the Amended and Restated Lease.
Community Participation Level and Impact
There was no community participation and there is no known impact on the community related to this real estate transaction. The information about this action is available through the County board documentation that is published on the county’s website: <https://www.ramseycounty.us/>.
☑ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
The Amended and Restated Lease does not incur additional costs for the County.
County Manager Comments
County Board approval is required for all real estate transactions. Amending and restating the agreement consolidates the terms from several amendments for clarity and to update the terms to be consistent with current conditions.
Last Previous Action
On April 3, 2018, the County Board approved the Amended and Restated Lease Agreement between the County and Regions Hospital to extend the term to December 31, 2100 (B2018-123).
Attachments
1. Amended and Restated Lease Agreement.