Agenda - Council - 07/26/2011 - Laserfiche WebLink

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CC Regular Session 5.2. Meeting Date: 07/26/2011 By: Diana Lund, Finance Title: Consider Lease Terms for 6701 and 6745 Hwy 10 Properties with Sharp & Associates, LLC Background: The City purchased, with RALF funds, the properties at 6701 and 6745 Highway 10 in 2006. Since that date, the city has leased the cold storage portions of these properties to Dennis Sharp companies. Starting 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. Several worksessions have been held to come to an agreement between Mr. Sharp and the City regarding a reasonable rental fee on both properties. That being, a rental fee that would still allow Mr. Sharp to keep his current customers and that would allow the city to recover all of its cost related to taxes, insurance and major maintenance costs. The following proposal was presented at the worksession held on July 26, 2011. 6701 Hwy 10: $1.21 /sq ft or $1851.33 /month (Reduces lease rate from current $1.95 /sq foot) 6745 Hwy 10: $1.97 /sq ft or $1,820.00 /month (Holds the current lease rate constant) The total rent generated on the two properties would be $44,004 annually, which is in line with Mr. Sharp's proposal of $42,669 and which would allow for a 10% maintenance to be set aside for major repairs and for an increase in property taxes and insurance in 2012. On July 18, 2011, Funding Source: These properties were purchased with RALF funds and any rental revenue generated is used to cover costs of the property. Council Action: Based on worksession discussion and if proposal presented: 6701 Hwy 10: $1.21 /sq ft or $1851.33 /month (Reduces lease rate from current $1.95 /sq foot) 6745 Hwy 10: $1.97 /sq ft or $1,820.00 /month (Holds the current lease rate constant) is agreed upon would enter into a one -year contract for the period of August 1, 2011 through July 31, 2012. Rental Proposal 6701& 6745 Hwy 10 Attachments Form Review Inbox Reviewed By Date Kurt Ulrich Kurt Ulrich 07/20/2011 10 :45 AM Form Started By: Diana Lund Started On: 07/19/2011 12:13 PM Final Approval Date: 07/20/2011