Agenda - Council Work Session - 06/23/2009

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CITY COUNCIL WORK SESSION Topic Report: Lease Property Management By: Sean M. Sullivan, Economic Development Coordinator ~~~~,~l" ! , I I I i , I I \ i I ,:i . li/ ~sEY Background: On December 13,2005, the City Council approved the original property management agreement with Premier Commercial Properties to manage the property located at 6701Hwy 10 (Former NAU Insurance). On June 27,2006 the City Council updated the agreement to its current form and added the properties located at 6101 Hwy 10 (Ralph's Gun and Pawn) and 6745 Hwy 10 (Midwest Car Care). The rate was dropped from $600.00 per parcel to its current rates ranging from $200.00 to $400.00 per parcel, or $1000.00 per month. Payments are made from available lease revenue to Premier Commercial Properties to manage these three properties. It should be noted that any additional lease revenue over the city administrative costs (property management included) is returned to the RALF program. The Property Manager is responsible for keeping the properties leased, and in good working order. The manager also serves as the contact to the tenants for repairs necessary to the property and tenant disputes. Other duties and responsibilities of the property manager are defined in the M~nagement Agreement dated July 28th, 2006. On March 24, 2009 the status of the Property Management Agreement for Highway 10 Right-of - Way Acquisition Loan Fund (RALF) was discussed. That discussion prompted additional questions as to the tax implications of utilizing RALF, and what property management services, were being rendered by Premier Commercial Properties. A tax summary is attached showing what each property generates in taxes and an approximation on what the City ultimately receives from the tax distribution. Staff has also completed a matrix that summarizes the activity reports for Premier Commercial Properties from February of 2006 to the present. The City property manager also has all of the properties listed with: Costar Showcase, MNCAR, Loopnet, GoFish and the Premier Commercial Properties website. Marty Fisher, from Premier Commercial Properties will also be present to answer any questions the City Council may have in regards to ~hat the City is receiving for services under the property management agreement. Action Statement: Based on discussion. Reviewed by: 0 C?",munityDevelopment D~ k . CIty AdmmIstrator CCWS:06/23/2009 Attachments: Copy of Current Property Management Agreement dated 7/28/06 Tax Summary . Activity Report Summary P1