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3) Proposed Lease Agreement for 6745 Highway 10 by Independent Auto Service <br /> Economic Development/Marketing Manager Backman reviewed the staff report and staff's <br /> recommendation that the Council consider approving the proposed six -year lease with <br /> Independent Auto Service. <br /> Councilmember McGlone stated he spoke to other businesses along Highway 10 who were not <br /> pleased with this lease because they have mortgages and taxes to pay. He stated he is concerned <br /> about considering like businesses at a lower cost and asked if the leasehold improvements would <br /> be owned by the City. <br /> Mr. Backman indicated Mr. Berg would be installing the leasehold improvements but the <br /> improvements would be the property of Mr. Berg and could be removed. <br /> Councilmember McGlone pointed out the improvements would then not be called "leasehold <br /> improvements." <br /> Councilmember Elvig asked Mr. Berg whether he can use the entire space. <br /> Allen Berg, 7470 - 152 " Lane NW, Ramsey, indicated the first two bays are not usable because <br /> of the open pits and are a liability at this point. The next three bays do not have electrical outlets <br /> or wiring so that will have to be installed. The door remains but the air has also been removed. <br /> Councilmember Elvig stated he understands this is more space than Mr. Berg is interested in but <br /> there is no option to split it up. <br /> Mr. Berg confirmed that to be the case. <br /> Councilmember Elvig stated he appreciates that the proposal had to be creative to address the <br /> space and tenant's needs. <br /> Mayor Ramsey asked what this space should rent for. <br /> Mr. Backman explained the market has changed from five years ago. As a point of comparison, <br /> the rent for RM Golf Carts was at $5.80 /sq. ft. and this proposal is for $5.45/sq. ft. He stated this <br /> could be looked at as an incubator opportunity along Highway 10 for smaller businesses in <br /> Ramsey to expand. That was the case for RM Golf Carts and in this case Mr. Berg would be <br /> expanding from 1,000 sq. ft. to 5,900 sq. ft., hence the stepped up rent rates. Mr. Backman <br /> pointed out there are also restrictions on what the City can do with RALF dollars and properties. <br /> Councilmember Elvig asked whether this use will create new jobs. <br /> Mr. Berg stated he plans to immediately hire two employees and hopes to add an additional <br /> employee by June or July. <br /> City Council Work Session / January 10, 2012 <br /> Page 4 of 13 <br />