Title
Approval of an Operating Lease Extension Agreement
Presenter:
Wynetta Massey, City Attorney/Chief Legal Officer
Body
Summary:
The City of Colorado Springs owns the Memorial Health System enterprise. In 2012, the voters authorized the City to enter into a Health System Operating Lease Agreement ("Operating Lease") and an Integration and Affiliation Agreement (the "Integration Agreement") with the University of Colorado Health and other related entities (collectively, "UCH-MHS"). The Operating Lease contained an initial forty (40) year term through September 30, 2052, and the Integration Agreement is coterminous with the Operating Lease term. As contemplated by the Operating Lease, the parties conferred and negotiated in good faith and wish to enter into an "Extension Term" as defined in the Operating Lease.
Background:
In accord with the Operating Lease terms, in 2021 the parties discussed the extension of the Operating Lease and Integration Agreement. The parties recognized that the relationship has been mutually beneficial. UCH-MHS has contributed significantly to the economic development of the City, including: the construction and operation of the Grandview hospital facility; the expansion of the Memorial Hospital Central trauma and stroke programs into southern Colorado's first and only Level I trauma center and Comprehensive Stroke Center; the creation of southern Colorado's most comprehensive provider network; and numerous other campus improvements and geographic expansions that have and are anticipated to continue enhance the care available to the residents of Colorado Springs and surrounding areas.
The parties have agreed to extend until October 1, 2032 (the "Extension Term"), the City's right to give notice of termination of the Extension Term. If notice were given on or after October 1, 2032, the Operating Lease would terminate consistent with Section 13.1.4 of the Operating Lease. In essence, the City's agreement to exte...
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