Agenda - Council Work Session - 05/24/2016

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CONSIDERATIONS Listed below are items to consider RE this particular request. A. Leasing out RALF properties keeps properties on the tax rolls. B. M&G Trailer Sales is paying a market rate rent. The City is able to place proceeds from this lease into our general RALF account. Which, then, can be used for various RALF property expenses (maintenance, clean up, 3rd party property manager). C. M&G has a good track record for being a good tenant, community supporter, and respected Ramsey business. D. M&G is creating and retaining jobs, and drawing people into the City of Ramsey. M&G utilizes other Ramsey businesses for their operations, and hires locally. E. M&G is in a tough spot, and have indicated to staff: they want to relocate to a permanent facility in Ramsey. However, they can't do that until they sell their existing property. It is very challenging to get a market rate offer on their property due to the looming U.S. Highway 10 improvements. Therefore, they are essentially stuck, until the State purchases their property. Because they are stuck, they need to make due on their existing site. The proposed expansion is the best way for them to move forward. F. M&G is willing to put down a large deposit on the proposed second lease, to ensure the site will be cleaned up upon termination. M&G is willing to meet all zoning/ land use requirements and processes for the proposed expansion. G. RALF dollars cannot be used for anything outside of RALF properties, specifically including the city's own administrative costs. The city's time and effort related to RALF properties is voluntary (i.e. the Economic Development Manager's time). These rules are guided by the MetCouncil. Lease Agreements do take up a significant amount of staff time. In 2015, the Economic Development Manager (along with supporting staff) negotiated, drafted, and executed 13 lease agreements/ amendments. The City typically has about 10 active lease agreements. Most lease agreements are RALF properties. Even when utilizing a 3rd party property manager on leases that tend to be the most time consuming, the Economic Development Manager still spends a significant amount of time with leases. H. The original intent/ purpose of buying RALF properties is to remove direct access points from U.S. Highway 10, and to acquire property that will be needed for future ROW (link). The practice of leasing back properties is a voluntary initiative made by the City of Ramsey. Further expanding M&G Trailer Sales use on 7443 Highway 10, and further extending the original lease agreement term will not improve safety and reduce congestion along U.S. Highway 10. I. All properties on the north side of U.S. Highway 10, between Armstrong Boulevard and Ramsey Boulevard are scheduled for full acquisition and complete elimination of access. NOTE: this is not the same for properties located east of Ramsey Boulevard (in many cases, said properties would only be needed for partial acquisition).