RYE, N.Y. – Lester’s of Rye will occupy its controversial city-owned space at 1037 Boston Post Road for nine months longer than anticipated after the City Council voted to extend its lease and hired a real estate broker to put the building on the market.
Although the department store’s $275,000-a-year lease was due to end in March, the City Council voted at its meeting Wednesday to extend the lease through Dec. 31, 2013. The city extended the lease to give a brokerage company, CBRE, more time to find interested buyers.
“If we don’t have something in place, we cannot budget. So we would have a gap come March 2013 going forward for the rest of 2013, we won’t have any income,” said Mayor Douglas French. “I’d like to get that locked in place so we are not having a discussion about real estate in the budget discussions.”
Councilman Joseph Sack argued against the extension, saying the city would have more leverage for a sale, possibly to Lester’s. “If the council ends up deciding to give an extension of the lease, it seems to me we should require a very high security deposit, because otherwise what could happen is we could end up holding the bag,” said Sack.
The city holds a two-month security deposit from Lester’s of Rye that was not increased during the previous lease extension a year ago.
The motion to extend the lease was adopted by a vote of 5-2, with dissenting votes from Sack and Councilwoman Catherine Parker.
The City Council also voted unanimously to bypass a 30-day consulting agreement with CBRE to market the property for sale or lease and move forward into a final agreement. City Manager Scott Pickup will negotiate the agreement. In preliminary discussions, CBRE will receive 3 percent of the sale if Lester’s of Rye buys the building or 6 percent of the sale if another company buys it.
“We’ve selected them as our broker, we’ve talked enough about the agreement and we would like to authorize them to move forward with the entity,” said French.
The next Rye City Council Meeting will take place Wednesday, Oct. 10, at 8 p.m. at Rye City Hall, 1051 Boston Post Road.