At their April 22 meeting, the City Commissioners unanimously voted to approve a lease amendment for General Dynamics Land Systems, a military vehicle manufacturer. The amendment allows General Dynamics a reduced rent rate to amortize some of the cost of new equipment.
According to the meeting agenda, the City currently leases a 90,932 square-foot building located in Commonwealth Centre to General Dynamics. The City developed the site in 1989 and has been leasing it to General Dynamics since then.
“The current lease term ends in May 2020, and General Dynamics has options to extend the lease four additional years for $2,191,643 ($45,659.23/month or $547,911/year),” staff reports.
According to the meeting agenda, General Dynamics is contemplating expanding manufacturing at its Tallahassee facility with approximately $1,000,000 in new equipment. The new manufacturing line will be used to produce the gunner’s primary sight used in the Abrams tank.
“The new equipment investment will include specialized build fixtures, alignment stands, and test equipment,” staff reports. “In addition to equipment investment, this new manufacturing line will create an estimated 13 new full-time employee positions including 10 hands-on production and three product support employees with annual salaries totaling approximately $795,000.”
To help defray the cost of new equipment, General Dynamics requested an amended lease from the City.
“General Dynamics has requested a lease modification, which would allow them to amortize a portion of the equipment cost and employee investment through a rent reduction,” staff reports. “The modification would include a five-year initial term, beginning on May 26, 2020, plus three additional two-year extension options.”
For the first eight years of the amended lease, the City’s annual revenue will be $438,329. In year nine, the annual lease revenue will increase to $489,987, and in years 10 and 11, it will increase to $547,911.
Staff reports that the approving the lease amendment will promote community job growth.