Minutes - Council - 12/11/2012 - Laserfiche WebLink

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7. COUNCIL BUSINESS At the invitation of Mayor Ramsey, Elk River High School Senior students introduced themselves and indicated they are in attendance as part of their Government class. 7.01: Request by TK Entertainment (dba Ramsey Raceway) to Amend Lease Agreement City Administrator Ulrich reviewed the staff report and presented the request of TK Entertainment (dba Ramsey Raceway) to amend its lease agreement. If the Council considers approval, staff recommends the lease agreement be revised to have the term coincide with the Interim Use Permit ending date of May 16, 2016. In addition, staff recommends that the early termination provision be retained, but the six -month notice required by the City be extended to allow for a twelve -month notice, which is consistent with other properties purchased along Highway 10. City Administrator Ulrich advised of the new information discovered that the City may have an $8,000 tax liability for 2012. City Attorney Goodrich advised the lease has an early termination provision that is not only tied to road reconstruction and can be terminated for any reason. The Council discussed the termination clause and indicated support that it be the same as used with other businesses. Motion by Councilmember McGlone, seconded by Mayor Ramsey, to authorize the City Administrator and City Attorney to draft and execute the Lease Agreement revisions with TK Entertainment to have a lease term ending date of May 16, 2016, and a twelve -month notice for early termination. Further discussion: The Council discussed the lease term, noting it was originally negotiated at six months due to concern of potential noise and other unknowns. However, this has proven to be a great venue with no issues. The Council next addressed the 2012 tax liability on the property, noting the lease terms are not high enough to pay taxes and still have revenue to donate towards Ramsey's Happy Days. City Administrator Ulrich noted the property is tax exempt so staff may be able to negotiate down the tax liability. In addition, this property is within a Tax Increment District (TIF) so taxes paid would come back to the City. Councilmember Strommen stated she likes this project but this is the opportunity to revisit the issue of who pays taxes and the level of rent. She preferred to delay consideration of extending the term until the tax liability is clearly understood. Councilmember Backous concurred and noted when giving up something in negotiations, you usually get something in return. City Administrator Ulrich explained the City would be cooperating with a local business and giving on the early termination so the lease is consistent with other properties. In addition, it would allow adequate time for this business to find another location within the community should the City terminate the lease. Councilmember Backous stated the City is dealing with two properties on that corner and he found the Wiser Choice Liquor property to be the urgency to get the overpass project shovel ready. He felt the City should be consistent in its actions and he could not reconcile that with extending this lease to 2016. Councilmember Wise stated he will not vote on this case because of his close association with the operators. Councilmember Elvig stated he supports the request but is City Council / December 11, 2012 Page 5 of 13