Agenda - Council Work Session - 06/14/2011

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CC Work Session 2. 4. Meeting Date: 06/14/2011 By: Aaron Backman, Administrative Services Title: Discuss Lease Agreement for 6811 Hwy 10 by TMBC, LLC dba Crystal Pierz Marine Background: The City of Ramsey owns the L- shaped parcel of land on the north side of Highway 10 with the address of 6811 Hwy 10. It is located between Ramsey Bicycle on the west and the building leased by Crystal -Pierz Marine and Pro Power Sports on the east. The City's parcel was purchased from Pro Sporting Goods or PSG, LLC through the RALF program in August of 2009. The lot does not have a building on it and is being used solely as a parking lot and outdoor storage facility. Crystal -Pierz Marine wishes to lease City -owned property located at 6811 Highway 10 NW in Ramsey. The same month the City purchased this property, it leased it back to PSG for $1,600 per month. PSG, LLC leases the adjacent building to the east (See attached site map) to TAM, LLC (i.e. Pro Power Sports). TAM, LLC in turn has a sub -lease for a portion of the building to Crystal Pierz Marine. The past lease for this parcel expired 9 /30/10. Neither PSG nor TAM wish to lease this lot, therefore the logical tenant is Crystal Pierz Marine. PSG provided a letter to the City on 9/22/10 indicating that the lease with PSG was ending and that it was up to the City to negotiate with the other two businesses on a new lease. No invoice was sent by the City to PSG after expiration. Crystal Pierz would be paying the same monthly amount as PSG was paying last year -- $1,600 per month. This amount more than covers the property taxes. The Economic Development/Marketing Manager has been in negotiations with the parties involved. Crystal -Pierz Marine has expressed a willingness to accept a one -year lease of the property commencing April 1, 2011 and terminating March 31, 2012. They did not want to pay for the six -month gap. The permitted use would remain the same and the tenant would be leasing the property "as is ". Recommendation: City Staff recommends that the City Council approve the proposed lease with TMBC, LLC dba Crystal Pierz Marine. It would be retroactive to April 1, 2011. Notwithstanding the six -month gap in rental income, the proposed lease would cover all taxes and administrative costs that the City incurs. Funding Source: N /A. Council Action: Discuss the proposed lease for 6811 Hwy 10 by TMBC, LLC dba Crystal Pierz Marine commencing 4/1/11 and ending 3/31/12, and make recommendation to the City Council for formal action. 6811 Hwy 10 Site Map Crystal Pierz Marine Lease Attachments Form Review Inbox Reviewed By Date Kurt Ulrich Kurt Ulrich 06/08/2011 05:51 PM Form Started By: Aaron Backman Started On: 06/08/2011 04:05 PM Final Approval Date: 06/08/2011