Agenda - Council - 02/26/2013 - Laserfiche WebLink

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CC Regular Session 7. 1. Meeting Date: 02/26/2013 By: Patrick Brama, Administrative Services Information Title: Consider Lease Agreement with Pro Power Sports & Marine, Inc Background: Staff has been working with Todd Amar, owner and manager of Pro Power Sports & Marine, Inc, over the past two months to negotiate a lease agreement for a portion of City owned property located directly west of and adjacent to 6781 Highway 10 (the "Subject Property"). The purpose of this case is to consider a lease agreement with Pro Power Sports & Marine, Inc. Notification: Observations/Alternatives: SUMMARY OF LEASE: Premises: 22,000 square feet, paved/fenced in area only Term: two year term, beginning March 1, 2013 Termination: one year termination clause for City Insurance: $1,000,000 public liability insurance Rent: $650 monthly, $7,800 annual Property Taxes: City responsible (similar to other RALF properties, covered in base rent)The 2012 taxes on the entire parcel were $12,268.00. Permitted Use: the subject Property will be used and occupied by tenant solely for the purpose of outside storage, display and sales of boats, snowmobiles and similar recreation equipment and accessories as an accessory use of the Tenant's primary business operation located at 6781 West Highway 10. CONSIDERATIONS: • Due to City code, the only available users for the Subject Property is Pro Power Sports and Ramsey Bicycle (outside storage is an accessory use). • Council has indicated a desire develop lease rates as close to market as possible. • Based on previous lease for the Subject Property, rent for the same area was about $800 per month. • Previous lessee indicated a reason for their departure was a too expensive lease rate ($800 per month) • Based on input from Premier Commercial Realty, Staffs recommendation is reasonable given the circumstance even though is sightly below market rental rate. • Staffs recommendation covers all City fixed costs and more. Considering how the negotiation process has transpired, Staff feels $650 per month is a reasonable rate for both parties. Attached is a rent analysis for Council's ingormation. • Pro Power,s asking rental rate is .27 per square foot, the City,s proposal is .355 per square foot and low end of the market rental rate is .40 per square foot. ITEM TO NOTE (History): Pro Power Sport did move a number of empty snowmobile crates onto the Subject Property in mid