Work Session

Mayor and Council Work Session November 8, 2022 Agenda "The City of Hagerstown will inspire an inclusive, business-friendly, and sustainable community with clean, safe, and vibrant neighborhoods." "The City of Hagerstown shall be a community focused municipality" The agenda and meeting packet is available at www.hagerstownmd.org/government/agenda "If you don't like something change it. If you can't change it, change your attitude." Maya Angelou 4:00 PM WORK SESSION 4:00 PM 1. 2022 Hagerstown Ice & Sports Complex Annual Report - Eric Deike, Director of Public Works, and Paul Sweeney, Hagerstown Ice Amateur Athletic Association (HIAAA) Board Chair 4:20 PM 2. A-2022-02 - Annexation of Lands of GVP Hagerstown Owner, LLC, 2 Western Maryland Parkway - Kathleen Maher, Director of Planning and Code Administration 4:30 PM 3. MCB Hagerstown (Currwood Development) Financial Incentive Agreement ~ Doug Reaser, Business Development Specialist 4:45 PM 4. Review of Lease - Maryland Watch Works - Doug Reaser, Business Development Specialist 4:50 PM 5. Review of Letter of Intent - State Departments of Labor & Education - Doug Reaser, Business Development Specialist CITY ADMINISTRATOR'S COMMENTS MAYOR AND COUNCIL COMMENTS ADJOURN  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: 2022 Hagerstown Ice & Sports Complex Annual Report - Eric Deike, Director of Public Works, and Paul Sweeney, Hagerstown Ice Amateur Athletic Association (HIAAA) Board Chair Mayor and City Council Action Required: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: File Name Description 2022 Hagerstown Ice & 2022_Hagerstown_Ice___Sports_Complex_Annual_Report.pdf Sports Complex Annual Report  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: A-2022-02 - Annexation of Lands of GVP Hagerstown Owner, LLC, 2 Western Maryland Parkway - Kathleen Maher, Director of Planning and Code Administration Mayor and City Council Action Required: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: File Name Description Nov 8 Memo - Annexation MCC_memo_Follow_up_on_Public_Hearing_Annexation_of_2_WMP_11_3_2022.pdf of 2 Western Maryland Parkway Oct 7 Packet - Annexation Public_Hearing_Packet_Annexation_of_2_Western_Maryland_Parkway_10_25_2022.pdf of 2 Western Maryland Parkway  CITY OF HAGERSTOWN, MARYLAND Planning & Code Administration Department One East Franklin Street • Hagerstown, MD 21740 E-mail: planning@hagerstownmd.org Telephone: 301-739-8577, ext. 138 • Website: www.hagerstownmd.org MEMORANDUM TO: Scott Nicewarner, City Administrator FROM: Kathleen A. Maher, Director of PCAD DATE: November 2, 2022 SUBJECT: A-2022-02 – Annexation of Lands of GVP Hagerstown Owner, LLC, 2 Western Maryland Parkway The public hearing occurred on October 25. The applicant’s representative was the only member of the public who spoke at the hearing. Nothing has been received in writing since the hearing. A follow-up discussion is scheduled for November 8 to review input received and determine next steps towards approval of the annexation resolution. Applicant Request at Public Hearing The applicant representative, Jason Divelbiss, requested that the Mayor and Council delay the effective date of the annexation as a courtesy to the applicant because the building will not be completed by early January and they would like to keep things simple with permitting with the County rather than straddling County and City with permitting after annexation. Mr. Divelbiss provided two alternatives for the Mayor and City Council’s consideration: 1. Delay the effective date of the annexation until December 31, 2023; or 2. Delay the effective date of the annexation until the Use and Occupancy (U&O) certificate is issued for the shell building or July 1, 2023 whichever comes first. Background After months of review with the property owners in 2021 and early 2022, the City entered into an annexation agreement with the applicant on March 8, 2022 that had the City agreeing to delay the start of the annexation process until the project received a building permit from the County. This agreement included the stipulation that any open permits with the County prior to the effective date of annexation would remain under the purview of the County and any permits requested after the effective date would be under the purview of the City. This project is currently under construction under County permits. Mr. Divelbiss indicated construction has been delayed and the project did not yet have a tenant which would delay the submittal of tenant fit-out permits for the project. The shell permit has already been issued and so, as provided for in the annexation agreement, that permit would continue under the purview of Washington County even after a January 6 effective date. Any tenant permit submitted before the effective date would be a County permit and any tenant permit submitted after the effective date would be a City permit. Staff and legal counsel believe that the annexation agreement already adequately addresses the permitting process if annexation proceeds as proposed. Staff Response to Requested Delay Staff would offer three issues for consideration on the requested delay of the effective date of this annexation: 1. This annexation involved a raw piece of ground adjacent to our corporate boundaries that had no previous City water service. The City’s Annexation Policy requires that such properties annex as a condition of receipt of City water. The fact the City agreed to a delay in the start of the annexation process for such an annexation was extraordinary. 2. This project has already been issued a shell permit by the County and per the annexation agreement it will remain under the County purview until that permit is closed out (U&O of the shell). As such, there seems no point in a delay until receipt of U&O certificate for the shell or July 1, 2023, if the purpose of such a delay is to keep the permit with the County and not straddle with the City. 3. An impact to the City of granting the requested delay of the effective date until July 1, 2023 or December 31, 2023 is the further extended delay of the property being on the City tax rolls until July 1, 2024. Next Steps Once the Mayor and City Council makes a decision regarding the applicant’s request, the annexation resolution can be ready for approval on November 22. The annexation would become effective either 45 days later or any delayed date/timeframe agreed upon by the Mayor and City Council. Attachment – packet materials from public hearing C: Jason Morton, City Attorney Ann Rotz, City Attorney Nancy Hausrath, Director of Utilities Jill Thompson, Director of DCED Doug Reaser, Business Development Specialist Steve Bockmiller, Zoning Administrator/Development Review Planner A-2022-02 – Annexation of 2 Western Maryland Parkway 2  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: MCB Hagerstown (Currwood Development) Financial Incentive Agreement ~ Doug Reaser, Business Development Specialist Mayor and City Council Action Required: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: File Name Description MCC_WS_Memo_Curwood_FIA_110822.pdf MCB Hagerstown Financial Incentive Agreement  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development TO: Scott Nicewarner, City Administrator FROM: Doug Reaser, Business Development Specialist DATE: November 2 2022 RE: MCB Hagerstown (Currwood Development) Financial Incentive Agreement At the November 8, 2022 Work Session, staff will review the financial incentive document for MCB Hagerstown. Staff seek guidance on proceeding with the financial incentive agreement. Background: • MCB Hagerstown intends to construct 1.9 million square feet of speculative industrial development. • Capital investment is expected in the $140 million range. • The development is expected to create between 1,500-2000 jobs. • The site is currently not in the Enterprise Zone but is under consideration for future inclusion. • The financial incentive agreement follows terms not dissimilar from the County’s Job Creation and Capital Investment Real Property Tax Credit program. The County would be providing roughly $12 million in tax incentives through utilization of this program. Business Points of Incentive Offer: • The total collective incentive shall not exceed $625,000 in grant back equal to City permit fees paid. o Building 1 would have $425,000 of grant back equal to City permit fees paid. o Building 2 would have $200,000 of grant back equal to City permit fees paid. • The grant funds will be paid within 60 days of the Certificate of Occupancy for the shell building but not be paid before January 1, 2023 for either building/phase. • The offer cannot be combined with the Enterprise Zone should the designation become available. The developer will have the option to proceed with this Financial Incentive or Enterprise Zone at the Developer’s option. • Any monetary distribution and/or budget consideration of incentive funds will be refundable to the City within 90 days of enterprise zone certification. • The development must cause a minimum capital investment and job creation that follows the Washington County Job Creation and Capital Investment Real Property Tax Credit Program as defined in Section 4 (c). o Minimum of $10,000,000 capital investment for each building. o Creation of 100 New Permanent Full-Time Positions for each building. • This incentive will be negated if MCB Hagerstown LLC seeks and achieves an appeal of property assessment before submission of the jobs certification report. • Phase I construction must be completed with a use and occupancy permit by 12/31/24. ______________________________________________________________________________ 14 N. Potomac Street, Suite 200A Hagerstown, MD 21740  • Phase II of construction must be completed with a use and occupancy permit by 12/31/24. • Phase I must be tenant occupied by 6/30/25. • Phase II must be tenant occupied by 6/30/25. • MCB Hagerstown LLC must provide a jobs certification report by 12/31/25. If either building is unable to obtain 100 New Permanent Full-Time Positions, the incentive will be prorated to positions filled out of 100 and reimbursement for the incentive will be required within 90 days (Example: Tenant occupies Building 2 with 50 jobs - $100,000 would be reimbursed). • If these conditions are not met, any granted funds must be repaid to the City of Hagerstown. Staff will be present at the Work Session to discuss this project in detail. Attached: Financial Incentive Agreement, Concept Plan c: Jill Thompson Kathy Maher Michelle Hepburn Nancy Hausrath Rodney Tissue Ann Rotz Jason Morton  FINANCIAL INCENTIVE AGREEMENT by and between the City of Hagerstown, Maryland, and MCB Hagerstown, LLC THIS FINANCIAL INCENTIVE AGREEMENT ("Agreement") is made and entered this _____ day of __________________________, 2022 by and between the City of Hagerstown, Maryland (“the City”), and MCB Hagerstown, LLC, (“MCB”). RECITALS WHEREAS, MCB intends to construct 1.9 million square feet of speculative industrial development, consisting of an approximately 1,200,000 to 1,600,000 square foot building (known as “Building 1”) to be constructed in Phase I and an approximately 300,000 square foot building (known as “Building 2”) to be constructed in Phase II (both Phases collectively referred to as the “Project”); both to be constructed on its real property at 1527 Howell Road, which is located within the corporate limits of the City of Hagerstown, Maryland, in accordance with site plans approved by the Hagerstown Planning Commission on or about April 27, 2022 (Case nos. ZS-2022-02 and ZS-2022-03); WHEREAS, MCB’s total construction budget anticipates $140 million of investment; WHEREAS, the Project has the potential to create more than 2,000 jobs; WHEREAS, the site is not currently located in an Enterprise Zone, but is under consideration for future inclusion in an Enterprise Zone; WHEREAS, the Project is expected to create new jobs and spur economic development on the City’s eastern boundary; and WHEREAS, the City has agreed to provide a monetary incentive to MCB to assist with the Project. Therefore, for and in consideration of the incentives hereinafter provided and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the City and MCB do contract and agree as follows: 1. Incentive Package. The City and MCB agree that the incentive contemplated herein shall be governed by the following provisions: A. Subject to the requirements of this Agreement, the City shall grant back to MCB $425,000.00 of permit fees paid within sixty (60) days of the Certificate of Occupancy for Building 1 or January 1, 2023, whichever comes later. 1 B. Subject to the requirements of this Agreement, the City shall grant back to MCB $200,000.00 of permit fees paid within sixty (60) days of the Certificate of Occupancy for Building 2 or January 1, 2023, whichever comes later. C. In no event shall the total incentive for this Project exceed $625,000.00 in grants back to MCB by the City for actual permit fees paid. D. MCB shall invest or cause to be invested at least $10,000,000 in capital investment for each building. E. MCB shall create at least one hundred (100) New Permanent Full-Time Positions for each building. MCB must provide a jobs certification report by December 31, 2025. If there are fewer than 100 New Permanent Full-Time Positions in one or both buildings, the incentive related to that building shall be prorated by percentage for the actual number of New Permanent Full-Time Positions created in that building (for example, if there are 50 New Permanency Full-Time Positions in Building 2, MCB shall be entitled to an incentive of $100,000.00) and reimbursement for any overpayment must be made by MCB to the City within ninety (90) days of the submission of the jobs certification report. F. Phase I must be completed with a use and occupancy permit no later than December 31, 2024. G. Phase II must be completed with a use and occupancy permit no later than December 31, 2024. H. Phase I must be tenant occupied by June 30, 2025. I. Phase II must be tenant occupied by June 30, 2025. J. If this site becomes included in the Enterprise Zone, MCB shall refund any and all incentive monies received from the City to the City within ninety (90) days of Enterprise Zone certification and MCB shall not be entitled to any incentives under this Agreement. K. If MCB is granted an appeal of the property assessment prior to its submission of the jobs certification report pursuant to subsection E, MCB shall refund any and all incentive monies received from the City to the City within ninety (90) days of said appeal and MCB shall not be entitled to any incentives under this Agreement. L. MCB may apply for benefits or assistance under the Washington County Job Creation program separately and receipt of any such benefit or assistance shall not reduce any incentive hereunder. M. MCB shall maintain good standing on all developer debts, taxes, and any other obligations to the City. The City shall notify MCB in writing if it violates this 2  provision and MCB shall have thirty (30) days from receipt of that written notice to cure. N. If MCB files for bankruptcy or receivership, whether voluntary or involuntary, before complying with all provisions of this Agreement, MCB shall be deemed in default of this Agreement and shall immediately reimburse the City for any and all monies received hereunder. 3. Default. In the event of a default by MCB of any term, provision or condition of this Agreement, the City shall not be required to make any additional payments under this Agreement. Further, the City shall be permitted to charge interest at the rate of Three per cent (3%) fixed per annum on all incentive monies made to MCB until all such monies and interest are repaid in full in addition to pursuing any and all rights at law or in equity, including but not limited to the right to recover consequential damages resulting from MCB’s default. In any action brought by or against the City in the interpretation or enforcement of this Agreement, MCB, in addition to all other damages, shall pay the reasonable value of attorney’s services incurred by the City in such action, together with the City’s litigation expenses and court costs. This provision shall apply regardless of whether the City is represented in such proceedings by an attorney already employed by (or on retainer with) the City or by other counsel or both. 4. Notice. All notices and correspondence under or regarding this Agreement or any provisions hereof shall be in writing and shall be hand-delivered or sent postage prepaid by either (i) United States mail, certified, return receipt requested, or (ii) for delivery the next business day with a nationally recognized express courier: To MC: ADDRESS (with a copy to ________________) To the City at: City of Hagerstown 1 East Franklin Street Hagerstown, Maryland 21740 Attention: Scott A. Nicewarner City Administrator with a copy to: Jason Morton City Attorney 82 West Washington Street Suite 100 Hagerstown, Maryland 21740 5. Laws of Maryland. This Agreement was made and entered into in the State of Maryland and is to be governed by and construed under the laws of the State of Maryland, without regard to conflicts of law principles. The parties hereby consent to the exclusive jurisdiction and venue of 3 the Maryland State Courts located in Washington County, Maryland for the litigation of any issue arising hereunder. 6. Recitals. The Recitals are hereby incorporated into this Agreement as substantive provisions. 7. Entire Agreement: Modification. This Agreement (including Exhibits 1-4 attached hereto) constitutes the entire agreement and understanding of the parties. There are no other promises or other agreements, oral or written, express or implied between the parties other than as set forth in this Agreement. No change or modification of, or waiver under, this Agreement shall be valid unless it is in writing and signed by authorized representatives of the parties. 8. Severability. If any provision of this Agreement shall be determined to be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby, and every provision of this Agreement shall remain in full force and effect and enforceable to the fullest extent permitted by law. 9. Waiver. Neither party's waiver of the other's breach of any term, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition in this Agreement. 10. Survival. This Agreement shall terminate on July 29, 2028; however, the covenants contained herein or liabilities accrued under this Agreement which, by their terms, require their performance after the expiration or termination of this Agreement shall be enforceable notwithstanding the expiration or other termination of this Agreement. 11. Counterparts/Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile or photocopy of a signature of a party shall constitute an original signature, fully binding the party for all purposes. 12. Assignment. This Agreement may not be assigned by either party without the express written consent of the other party. 13. Successors Bound. This Agreement shall be binding on and shall inure to the benefit of the successors, permitted assigns, and legal representatives of the parties hereto. IN WITNESS WHEREOF, the parties have executed this Agreement under their respective seals as of the day and year first above written. WITNESS: MCB Hagerstown, LLC _______________________ BY:_________________________(SEAL) NAME, President 4 ATTEST: CITY OF HAGERSTOWN, MARYLAND _______________________ BY:_________________________(SEAL) Donna K. Spickler, City Clerk Emily Keller, Mayor 5  Currwood Hagerstown LLC Concept Plan City of Hagerstown, Maryland August, 2021 0’ 120’ 240’ 360’ N HOW CONCEPT DATA: ELL ZONED- I-MU ROA PROJECT AREA- 195 ACRES ± D FUNCTIONAL USE- WAREHOUSE (PERMITTED USE) SETBACKS- FRONT YARD- 35’ SIDE YARD- 15' * REAR YARD- 25' * * WHEN ADJOINING A RESIDENTIAL DISTRICT, THE SETBACK 100 YEAR FLOODPLAIN SHALL BE ONE FOOT FOR EACH FOOT OF BUILDING HEIGHT, BUT NOT LESS THAN 35' REQUIRED PARKING- 1 SPACE PER 2,000 SF OF GROSS FLOOR AREA NO TRUCK ACCESS + 1 SPACE PER 200 SF NET FLOOR AREA OF OFFICE OR SALES SPACE (AUTOS ONLY) BUILDING 1 978 SPACES REQUIRED ± BUILDING 2 170 SPACES REQUIRED ± PROPOSED PARKING- BUILDING 1 978 SPACES, 500 TRAILER DROPS SWM BUILDING 2 202 SPACES, 115 TRAILER DROPS AREA PAUL SMITH BOULEVARD WAREHOUSE 2 285,600 SF 952’ X 300’ 202 AUTO SPACES, 115 TRAILER DROPS ED SWM W GE AREA OO D DR IV E WAREHOUSE 1 1,666,560 SF 2,688’ X 620’ 978 AUTO SPACES, 500 TRAILER DROPS SWM SWM AREA AREA SWM AREA POTENTIAL 90’ SWM RIGHT-OF-WAY FOR AREA FUTURE SOUTHERN 100 YEAR FLOODPLAIN BOULEVARD EXTENDED CONCEPT NOTES 1. All base information was gathered from field surveys, local, state and federal GIS sources. 2. This concept plan assumes that the existing constraints shown are accurate. Further on-site investigations may be needed to accurately locate the existing environmental constraints and verify that the concept as shown can be constructed. 3. A traffic impact study will be needed for the final design and engineering phase of this project. 4. For planning purposes, this concept plan shows conceptual off-site road alignments that may impact this site. Further discussions with the local jurisdictions should be had in order to determine the feasibility of these road alignments. 5. No grading or utility design has been performed as part of this study. ACCESS ROAD TO PUMP STATION EXISTING PUMP STATION 6. Proposed stormwater management is conceptual in size and location. The layout may ultimately change to meet specific on-site stormwater management design. 7. To maximize the opportunities for on-site development, retaining walls and underground stormwater management practices might be necessary. 8. Truck access onto Howell Road is prohibited. All driveways and entrances must be approved by the reviewing agencies.  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Review of Lease - Maryland Watch Works - Doug Reaser, Business Development Specialist Mayor and City Council Action Required: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: File Name Description 110822_WS_MWW.pdf Review Lease - Maryland Watch Works  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development TO: Scott Nicewarner, City Administrator FROM: Doug Reaser, Business Development Specialist DATE: November 2, 2022 RE: Review of Lease – Maryland Watch Works Staff will attend the November 8, 2022 Mayor & Council Work Session to review a request of Maryland Watch Works to end their lease early. Background Maryland Watch Works currently leases approximately 2,000 square feet, Suite B-3, at 14 N Potomac St (Elizabeth Hager Center). • Lease began April 1, 2020. • Current rent is $2,000 per month. • City previously included a termination clause for expansion of the businesses allowing 90 days’ notice without penalty. The clause required the tenant to expand to a minimum of 5,500 square feet or more. • Initial term of the lease expires March 31, 2023. Request Maryland Watch Works has requested that the expansion requirement of 5,500 be lowered. The business has indicated they’ve found a more suitable space for their business and would like the City to waive the requirement. Maryland Watch Works has indicated that they would provide 90 days’ notice and be moving to another location within the downtown to a slightly larger space than they are currently occupying. Staff seek direction from Mayor and Council on Maryland Watch Works’ request. Attachments: 4/1/2020 Lease c. Jill Thompson Michelle Hepburn Eric Deike ______________________________________________________________________________ 14 N. Potomac Street, Suite 200A Hagerstown, MD 21740  REQUIRED MOTION MAYOR AND CITY COUNCIL HAGERSTOWN, MARYLAND Topic: Review of Letter of Intent - State Departments of Labor & Education - Doug Reaser, Business Development Specialist Mayor and City Council Action Required: Discussion: Financial Impact: Recommendation: Motion: Action Dates: ATTACHMENTS: File Name Description 110822_WS_DLR-DORS.pdf Letter of Intent - Dept. Labor & Education  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development TO: Scott Nicewarner, City Administrator FROM: Doug Reaser, Business Development Specialist DATE: November 2, 2022 RE: Review of Letter of Intent – Department of Labor and Education Staff will attend the November 8, 2022 Mayor & Council Work Session to review a letter of intent with the state of Maryland. Background Maryland Department of Labor currently leases approximately 11,140 square feet located at 2-6 N Potomac (Elizabeth Hager Center) from the City. • Current lease runs through January 31, 2023. • Current rent is $167,100 per year ($15/ft) Letter of Intent The state is looking to consolidate both the Department of Labor and Division of Rehabilitation Services (DORS) into one location at 2-6 N Potomac. DORS has asked for additional office space and accessibility features on the first floor of Elizabeth Hager Center (see attached concept). They’ve requested architectural drawings without a guarantee of lease in place and staff have asked for a letter of intent to be executed in advance of proceeding with this service. The business points of the agreement include: • Lease term shall be for 10 years • Rent per square foot shall increase to $15.50/ft • City will pay for architectural/engineering services. These fees will be recouped over the first year of the lease as additional rent. • Tenant will pay for buildout of requests from the Department of General Services concept drawing. The amount is not expected to exceed $200,000. • If no lease materializes by January 31, 2023, the cost of services paid by the City for architectural and engineering services will be reimbursed by the state within 30 days of a request. • The letter of intent does include a binding effect for the cost of services that are paid. Staff seek direction from Mayor and Council on proceeding with the letter of intent. Attachments: Letter of Intent, Department of General Services Concept Drawing, Lease c. Jill Thompson ______________________________________________________________________________ 14 N. Potomac Street, Suite 200A Hagerstown, MD 21740 Michelle Hepburn Eric Deike Jim Bender  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development November 22, 2022 Maryland Department of Labor 1100 North Eutaw Street Baltimore, MD 21201 Maryland State Department of Education Division of Rehabilitation Services 2301 Argonne Drive Baltimore, MD 21218 RE: Letter of Intent – 2-6 N Potomac St, Hagerstown, MD 21740 – Improvements and Lease Dear Sir or Madam: The Maryland Department of Labor and the Maryland State Department of Education – Division of Rehabilitation Services have expressed interest in leasing commercial space at 2-6 North Potomac Street in Hagerstown from the City of Hagerstown. However, both departments requested improvements to the space. In order to move forward with those improvements while lease negotiations continue, the City presents this Letter of Intent. If acceptable to your department, please sign below and note that in doing so you are binding your department to reimburse certain costs to the City even if your department does not lease the space.  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development General Terms: 1. Location and size of premises: 2-6 N Potomac St, Hagerstown, MD 21740, consisting of approximately 11,400 square feet of commercial space (not including additions below). 2. Tenants: Maryland Department of Labor and Maryland State Department of Education – Division of Rehabilitation Services 3. Landlord: City of Hagerstown. 4: Lease term: 10 years, commencing February 1, 2023 with one (1) five year option to renew. 5. Rent: $15.50 per square foot. 6. Landlord agrees to perform architectural and engineering work based on drawings provided by Department of General Services. This amount will be reimbursed to the City over the first year in the form of additional rent. 7. Tenant will pay for buildout of requests as outlined by the drawings provided by Department of General Services (attached). This amount is not expected to exceed $200,000.Tenant shall have no claim for reimbursement for these expenses and Tenant shall have no ownership interest in any of the improvements paid for by Tenant. 8. If a lease does not materialize by January 31, 2023, the cost of services paid by the Landlord for architectural and engineering services will be reimbursed by the Tenants within 30 days of the Landlord requesting payment. 9. Binding effect: This Letter of Intent obligates Tenant to reimburse Landlord in full for professional services paid by Landlord even if Tenant does not lease the space. 10. Acceptance: If you agree to the above-mentioned terms, please sign this Letter of Intent and return the duplicate copy within twenty (20) business days after delivery.  CITY OF HAGERSTOWN, MARYLAND Department of Community and Economic Development Sincerely, Emily Keller Mayor City of Hagerstown Acceptance: Tenant Signature Tenant Signature __________________________ __________________________ Maryland Department of Labor Maryland State Department of Education – Division of Rehabilitation Services Date Date __________________________ __________________________