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CC Regular Session <br />Meeting Date: 02/25/2014 <br />Submitted For: Patrick Brama, Administrative Services <br />By: Patrick Brama, Administrative Services <br />Information <br />4. 6. <br />Title <br />Approve Lease Agreement with Pro Power Sports for use of City Owned Land for Outside Storage <br />Purpose/Background: <br />Purpose of Case: <br />Approve Updated Lease Agreement with Pro Power Sports for use of City Owned Land for Outside Storage. <br />Background: <br />The City owns a vacant 1.64 acre parcel of land located at 6811 U.S. Highway 10 (north side, between Ramsey <br />Bicycle and Pro Power Sports). This parcel was purchased by the City via the State Right -of -Way Acquisition Loan <br />Fund (RALF) for future U.S. Highway 10 right-of-way (ROW). <br />It is common practice for the City to lease "RALF" properties back to the private sector. The City adopted a policy <br />in March 2013 to guide lease negotiations (attached). <br />In this particular scenario, the City began leasing 6811 U.S. Highway 10 to Pro Power Sports in March of 2013; <br />which terminates in March 2014 (one year lease). Pro Power Sports is proposing a new one year lease at a rate of <br />42 cents per square foot (35 cents in previous lease). The amount of square feet being leased will be 15,000 (22,000 <br />previous lease). The amount of leasable space is being reduced in order to bring the property into compliance with <br />City Code standards in regard to exterior storage in the front yards. Taxes and admin expenses will be covered by <br />the proposed lease rate of $525 per month ($650 previous lease). Pro Power Sports will be responsible for liability <br />insurance and all routine property maintenance costs. Based on discussions with the City's Commercial Property <br />Manager, Premier Commercial Realty, the proposed lease terms are fair and within competitive private market rates. <br />Attached to this case is the proposed one year lease and a rent analysis. <br />Notification: <br />NA <br />Observations/Alternatives: <br />NA <br />Funding Source: <br />Rent proceeds will pay for Admin and Taxes. <br />Recommendation: <br />Approve Attached Lease Agreement with Pro Power Sports for use of City Owned Land for Outside Storage. <br />Action: <br />