Agenda - Council Work Session - 05/24/2016

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• Perhaps, the City should amend our policy for leasing City owned property to provide parameters for these types of situations (economic hardship requests). For example: Maximum economic hardship term, 10 total months ■ 5 months with a max discount of 50% ■ 5 months with a max discount of 25% • This request is slightly unique (meaning not easy to make a direct comparison to the private sector) due to the fact it's a non-profit, it's located on city owned property, it's a start up church, it's a RALF property, and the property is in fair condition. Additionally, it should be noted, the City has provided breaks in lease rates to other tenants in the past for various case -by -case reasons (Independent Auto, Crystal Pierce Marine, Northern Lights Children's Theater, etc.). One example is, we provided a step-up lease for Independent Auto: $100, $350, $650, $1612 over the course of six months. PREMIER COMMERCIAL REALTY The City's leasing agent, Premier Commercial Realty, did vet this request, please see below: "As you know, Northern Lights Church is looking for a rent reduction of 50% of the Lease rate to begin immediately and run for the next 5 months, as well as, a 25% reduction in rent for the next 5 months afterwards (10 consecutive months total)." "I have asked for and received financial reports from the church to include profit/loss, balance sheet and cash flow reports from the previous 2 years. After a review of these reports, [their request appears to be financially justified]. They have indicated [they are making several cuts to their operating budget]. They are willing to provide further financial reports as time moves along. For churches, it is well documented that their offerings fall in the spring and summer and rise again when school is back in session." Premier Commercial Realty indicated it is common for landlords to work with tenants on these types of requests (especially during the great recession). However, in todays market, landlords are becoming less willing to accept this type of request, entirely.