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CITY COUNCIL WORK SESSION <br />Topic Report: Discuss Lease Terms at 6701 and <br />6745 Highway 10 <br />By: Heidi A. Nelson, Deputy City Administrator <br />-~- a <br />.. <br />!--- __- <br />Background: <br />In early March, Council received a letter from Dennis Sharp of K & K Sharp, LLC regarding the lease <br />terms for properties located at 6701 and 6745 Highway 10, the letter is attached for Council review. <br />Mr. Sharp has leased a portion of the space in each of these buildings since 2006. Both lease <br />agreements require that the tenant pay the taxes. For the 6701 building, the front office portion of the <br />building is tax-exempt and is currently leased to Youth First Community of Promise. The rear portion <br />of the building is taxable and is leased to Mr. Sharp for his storage business. This condition of tax- <br />exempt on the front office portion and taxable on the rear storage portion has been the same throughout <br />the term of the lease. For the property located at 6745, the tenant in the front of the building (Midwest <br />Care Care) is responsible for 60% of the taxes and the rear portion leased to Mr. Sharp for his storage <br />business is responsible for 40% of the taxes. <br />Staff has discussed this matter with John Leone, Anoka County Assessor; in addition Mr. Sharp met <br />with John Leone and Sean Sullivan in late winter regarding this matter where the taxable and tax <br />exempt status of the 6701 property was discussed with Mr. Sharp. Mr. Leone noted that for payable <br />taxes 2009, the assessed value of the properties in the Highway 10 corridor were reviewed and many <br />were modified, which resulted in an increase to the taxes on several properties in the corridor. <br />Staff believes that the taxes owed by Mr. Sharp for the lease at 6701 and 6745 Highway 10 are <br />properly stated as noted in the January 8`", 2010 and the January 20~', 2010 correspondence from City <br />Atty. Goodrich to Mr. Sharp. The letters are attached for Council review. <br />Council Action: <br />Direct staff with regard to the terms of the lease for the payment of taxes for leased space at 6701 and <br />6745 Highway 10. <br />Reviewed by: <br />City Administrator: <br />Attachments: <br />March 4~' Letter from K & K Sharp <br />January 8 and January 20, 2010 Letters from Atty. Goodrich <br />February 23, 2010 Follow-up letter from K & K Sharp <br />Lease Agreements for 6701 and 6745 Highway 10 <br />Anoka County tax data for 6701 and 6745 Highway 10 <br />CCWS: 04/27/2010 <br />