Agenda - Council - 06/28/2016 - Laserfiche WebLink

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CC Regular Session Meeting Date: 06/28/2016 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services 7. 6. Information Title Policy for Leasing City Owned Land Purpose/Background: PURPOSE Amend the attached "Policy for Leasing City Owned Land." NOTE: the need to address the City's leasing policy is the direct result of the two attached tenant requests. This case was first reviewed by the Council at work session on May 28, 2016. Attached are the meeting minutes. The Northern Light Church lease request will be reviewed by the Council in the next case. The M&G Trailer Sales lease request will be reviewed in the future, when M&G Trailer Sales is ready submit proper land use applications. BACKGROUND The City adopted the attached lease policy in 2013. As the policy stands today, it does not provide clear direction for the attached two pending requests. The two primary issues are: (1) providing for the re -negotiation of rent rates in periods of economic hardship, and (2) a policy for land which is slated for full acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study. Typically, the City has 10-15 active leases in play. Leases are managed and negotiated by the City's Administration Department. The City utilizes Marty Fisher, of Premier Commercial Realty, to provide management support on four leases. Notification: NA Observations/Alternatives: Below is an outline of the general policy discussion that occurred on 05/24/2016, general direction provided by the Council, and a summary of the proposed policy amendments. ITEM #1 ISSUE: would the Council consider an amendment to our lease policy to allow/ address, economic hardship requests? In other words, should staff include language in our policy that sets minimums/ maximums for the discounted amount and the term in which we are willing to consider rent reduction requests? DIRECTION: the Council was generally okay with including a provision in our policy to allow for temporary reduction in rent. The policy should (1) not favor/ discriminate between different types of organizations, (2) should include underwriting requirements similar to the City's business subsidy policy, (3) should include a term that is more in -line with standard business practices (less than what was originally requested by Northern Light Church), and (4) should be supported by Premier Commercial Realty. AMENDMENT: the attach policy has been amended to include a provision allowing for a temporary reduction in rent due to an economic hardship. The maximum term is 6 months (3 months at 50% and 3 months at 75%)--which is less than what was originally requested by Northern Light Church (10 months).