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Councilmember Backous noted if the City is sued it will have to defend itself. He stated the City <br />needs to know who the tenants are, especially since it is now on notice. <br />City Attorney Goodrich noted Independent Auto is saying it is not subleasing. <br />Councilmember Elvig stated it seems there is "heartburn" with the business alleged to be <br />subletting. He stated he wants to be sure the City goes after the right party. <br />Mayor Ramsey stated his issue is with liability. <br />Councilmember Strommen asked, if there are two tenants, how does liability change since the <br />lease agreement says the City is not liable. <br />City Attorney Goodrich explained the City has a lease with the tenant who is responsible for the <br />whole property unless he subleases and the City approves the sublease. The tenant is allowed to <br />have a legal commercial business, if insured. <br />Councilmember Strommen asked how liability changes if there is a sublease and the City <br />approves it. <br />City Attorney Goodrich advised the City looks to additional insurance from a subtenant and that <br />would also relieve the tenant of some liability since a portion would be taken over by the <br />subtenant. <br />Councilmember Strommen noted the City's position is unchanged if it approves the sublease and <br />gets additional insurance. She asked if there is any prohibition to prevent an outside towing <br />company from bringing in a vehicle that Independent Auto is working on. <br />City Attorney Goodrich stated that question relates to zoning and he is not sure it would prohibit <br />towing. <br />Councilmember Tossey suggested either 'Independent Auto come forward with the sublease or <br />the City remove the sign advertising First Choice Towing. <br />Councilmember Backous clarified the sign is not the issue because towing can still occupy the <br />building. <br />Councilmember McGlone stated the City may have a $2 million insurance requirement but that <br />will go quickly and then the City will be "on the hook." <br />Councilmember Strommen suggested the City just fix the paperwork (lease) and move on. <br />The consensus of the Council was to direct staff to determine if subleasing is occurring at <br />Independent Auto, 6745 Highway 10 NW, and report back to the City Council. <br />City Council Work Session / June 26, 2012 <br />Page 5 of 6 <br />