Minutes - Council Work Session - 05/24/2016

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and property sales of the City. He noted that there are two pending requests and the direction from the Council will assist staff in responding to those requests. Mayor Strommen suggested first considering the temporary reduction in rents. Councilmember Kuzma stated that as a small business owner he is empathetic to other business owners and would support restructuring to provide some relief. He noted that the reduction in rent should be restructured into the back end of the lease. Councilmember Williams stated that she would prefer to look at reductions in rent as a subsidy and treat that similarly to other subsidies. She stated that she would like to review language in the EDA revolving loan fund policy to model after that. She stated that if there is a clear need and the business is an asset to the community, the City should treat that as any other subsidy. Mayor Strommen noted that there may be a conflict with non-profit or religious institutions but agreed that similar language could be used as a model. Councilmember Riley asked for information on the rent market in this area and asked for the opinion of Mr. Fisher. Marty Fisher, Premier Commercial Properties, stated that 90 percent of his work is done in the for profit world. He stated that, generally, if a tenant is asking for a reduction in rent, that is granted, but on a case by case basis and would be dependent on the market. He stated that in today's market, a landlord would work with a tenant on a short-term basis, such as three months, and after that time the tenant would need to step up. He stated that in terms of collecting rent, there is not a difference between for profit and non-profit entities. He stated that the percentage of rental properties owned by the City in the area is a small percentage of the market and would not hurt the market, noting that the property in discussion is not a class A or class B rental unit. Councilmember Riley stated that while he wishes that the City was not involved in the leasing business, that is the reality for the foreseeable future. He did not believe the City should operate differently than a business nor should the City distinguish between for -profit and non-profit. Mayor Strommen stated that there needs to be an understanding of the dynamics because the City is using public funds and therefore additional research should be done on the relationship. She agreed that staff should amend the policy and bring that back for review by the Council. Councilmember Kuzma asked if the tenants along Highway 10 are already receiving lower than market rate rental prices. Asst. City Administrator/Economic Development Manager Brama stated that historically the City has been slightly under market but there has been a strong effort in the last few years to gain the market rate for the rentals. He noted that the lease for 6701 Highway 10 is a market rate rental. City Council Work Session / May 24, 2016 Page 3 of 6