Minutes - Council - 06/01/2010 - Special

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APPROVE AGENDA Motion by Councilmember Look and seconded by Councilmember McGlone to approve the agenda as presented. Motion carried. All voted in favor. COUNCIL BUSINESS 4.01. Discuss Acquisition of 7751 Highway #10 -Todd Bialon Property -Portions of this discussion may be closed to the Public. Mayor Ramsey suggested that since portions of this case may be closed to the public, Council should. discuss 4.02 first and come back to 4.01. 4.02. Consider Lease Terms for 6701 and 6745 Highway #10 Properties Deputy City Administrator/Director of Community Development Nelson stated that 6701 and 6745 Highway #10 were purchased with RALF in 2006 and we have leased a portion to Dennis Sharp. In 2008, the City required that the leases be amended to collect a base rent plus each property's pro-rata share of property taxes. Mr. Sharp was at an earlier meeting to talk about his taxes going up. Finance Officer Lund has talked with the County Assessor. Staff feels that the property taxes have risen considerably on the properties and perhaps incorrectly as a result of Anoka County's assessing policies. Mr. Sharp has given a notice of termination on both leases. Mayor Ramsey had initiated a meeting with Mr. Sharp to discuss the issues and Mr. Sharp is willing to continue leasing both properties if he can get relief on the rent paid. Ms. Nelson noted there is a proposal from Mr. Sharp for Council to consider tonight. City Attorney Goodrich presented Mr. Shazp's proposal. He stated that for the City to take in $500 less than we have been taking in at this point would pay taxes and base rent. The base rent now is $1.25 per squaze foot plus taxes on each property, which equates to $3,266 and $1,800 - or $60,000 annually. The base rent, based on Many Fisher's figures, appears too high so with the proposal it would be about 85 cents versus $1.25, which equates to $4800 per month versus $5,300 per month. Mr. Sharp has tried to figure out what the County's appropriate assessed value should be as there doesn't seem to be much rhyme or reason to their figures. Mr. Goodrich reiterated that Mr. Sharp has given the City a termination of lease so now Council needs to decide what they want to do. City Administrator Ulrich stated that we feel this is closer to a mazket rent. Staff would support it and feels it's enough to pay taxes plus, and allows businesses to stay in force. Staff would recommend moving forwazd with the proposal by Mr. Sharp. If Council agrees to this, this would become effective August 1, 2010, and Mr. Sharp would pay the higher rate until then. Mayor Ramsey commented that the City really does not benefit from the rent - it benefits on the taxes. The money goes back into RALF. Special City Council -June 1, 2010 Page 2 of 5