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<br />CASE # <br /> <br />l/. 0;;2 <br /> <br />CONSIDER LEASE TERMS FOR <br />6701 AND 6745 HIGHWAY 10 PROPERTIES <br /> <br />By: William K. Goodrich, City Attorney <br /> <br />Background: <br /> <br />The City purchased, with RALF funds, the properties at 6701 and 6745 Highway 10 in 2006. <br />Since that date we have leased the cold storage portions of these properties to Dennis Sharp <br />companies. Starting in 2008 the City required that the leases be amended to collect a base rent <br />plus each property's pro-rata share of property taxes. Staff has determined that the property <br />taxes have risen considerably on the properties and perhaps incorrectly as a result of Anoka <br />County's assessing policies. As you are aware Mr. Sharp has given a notice of termination on <br />both leases. Mayor Ramsey initiated a meeting with Mr. Sharp to discuss the issues. The bottom <br />line is that Mr. Sharp is willing to continue leasing both properties if he can get relief on the rent <br />paid. His current proposal is: <br /> <br />1. To become current on all delinquent rent by paying in full the present rent of <br />$3,266/mo for 6701 and $1,886/mo for 6745 through July 31, 2010. <br />2. Commencing August 1, 2010 pay $2,983.50/mo for 6701 and $1,820/mo for 6745. <br />3. The City would be responsible for the property taxes on each parcel. <br />4. This would be a one-year lease and require the City to propose any rent increases one <br />year prior to the effective date. This would give Mr. Sharp lead time to react <br />accordingly with his RV/boat storage customers. <br /> <br />Per Mr. Sharp's proposal, the City would then is free to allocate the total monthly payment to <br />taxes or base rent as it chooses. <br /> <br />Recommendation: <br /> <br />Mr. Sharp's proposal as above outlined or stay with the present rental amounts. <br /> <br />Funding Source: <br /> <br />Not applicable <br /> <br />Council Action: <br /> <br />Based upon discussion. <br /> <br />Review Checklist: <br /> <br />.~.~. <br /> <br /> <br />)(6~ <br /> <br />City Administrator <br />