Mountain Express and town hammer out details on lease

Twenty years, 10-cents a foot and five years of notice

The town of Crested Butte and the board of the Mountain Express bus service are getting closer to finalizing details of a lease to govern a new home for the transportation system. Members of the transportation board and the Town Council met at a work session on Monday, June 23 and agreed to pursue a 20-year lease with five-year review periods. The lease will also include a five-year termination notice when the town decides it wants the Mountain Express to vacate the building.

 

 
The Mountain Express has utilized space in the Crested Butte town shops for decades. The town has asked Mountain Express to leave the current space and build its own structure. The town will provide the land but the Mountain Express must pay for the building. They have secured grants to help with that cost.
Under the proposed lease agreement reached Monday, pass-through costs such as snow plowing, insurance and building maintenance will now be picked up by the bus system. The town will also now receive rent from Mountain Express at 10 cents a square foot, or approximately $3,600 a year. In the past, the bus system paid about $17,000 a year to the town but that included rent and maintenance costs. Under the new lease, that annual amount should be less.
“The only question I have with the pass-through costs is how we arrive at some of the figures,” said Mountain Express chairman Bill Dickerson.
“We will figure the proportional costs,” town manager Susan Parker responded.
“We need to remember that Crested Butte is part of the Mountain Express, too,” said mayor Alan Bernholtz. “We want to be fair.”
While Parker pushed for a five-year lease, the Mountain Express representatives asked for a 25-year lease. After much debate, the council felt comfortable with a 20-year lease, which includes mandated five-year reviews and a five-year notice period to the Mountain Express if the town wanted them out of the building.
“Correct me if I’m wrong, but with any lease, whether it’s one year or 100 years… if either party breaks the terms, there is a problem. Are the five-year reviews necessary?” Dickerson asked. “Whatever the case, the more pinned down it is, the better.”
Board member and Mt. Crested Butte councilmember Gary Keiser reminded the council that they too have members of the Town Council sitting on the board, “so you can get reviews anytime you’d like. You can have monthly reviews if you prefer. But I agree that we both need protection.”
“I just think it is a good business practice to review such contracts in more detail every five years,” said Parker. “Things change.”
Town finance director Lois Rozman explained that she contacted Gunnison County and found it is charging five to 25 cents per square foot annually at its new industrial park. She estimated the new bus facility would come in at approximately 36,000 square feet and felt it was fair to charge 10 cents a square foot. “I’m not trying to reinvent the wheel here,” she told the council. “There is a system in place in the county that appears to work.”
“I like the idea that this is taking on a rational approach and not just coming up with figures out of the air,” stated councilmember Skip Berkshire. “There is a rational reason for the process.”
Dickerson and Keiser agreed that $3,600 a year in rent to the town seemed fair.
Bernholtz brought up the point that the Mountain Express board should start thinking about the agreement with the town concerning their financial services contract, which expires in 2010.
“We are still in a tenuous financial situation and undoubtedly we will be coming to both towns in a month or two for some discussion after we review our financial situation,” said Keiser.
“We are on the right path to crafting a general overall solution,” said Berkshire. “I think we need to get to the point where Mountain Express stands alone and everyone will be better for it. It’s all good.”
At the request of Dickerson, who said the board would not start any building project until lease details are finalized, the town plans to have a draft of the lease for the council at its next meeting. It will then go to the Mountain Express board in July.
 

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