Agenda - Council - 07/26/2016 - Laserfiche WebLink

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CC Regular Session 7.6. Meeting Date: 07/26/2016 Submitted For: Patrick Brama,Administrative Services By: Patrick Brama,Administrative Services Information Title Property Management Agreement with Premier Commercial Realty Purpose/Background: PURPOSE The purpose of this case is to consider approving the attached property management agreement with Premier Commercial Realty. The City entered into a month-to-month property management agreement with Premier Commercial Realty in May of 2013. Staff is proposing to add a new property to this agreement(M&G Trailer Sales) and increase Premier Commercial Realty's spending limit from$100 to$500 per incident. BACKGROUND In comparison to most cities,the City of Ramsey owns a fairly large inventory of land. Said inventory of land can be divided into three buckets(1)land available for development and currently listed for sale, (2)public uses,and (3)property purchased for right-of-way to support future road improvements. The third bucket is the subject of this case. The City owns 15 properties located along U.S. Highway 10. The City purchased the majority of these properties through a program known as the right-of-way acquisition loan fund(RALF). This program is administered by the Metropolitan Council, and is funded by the State of Minnesota. The City purchased these properties to help prepare for future improvements to U.S. Highway 10. As we know,a large time gap can exist between when a major road improvement project is planned and when it is actually funded/constructed. As a result,the city has an opportunity to lease back RALF properties purchased for U.S. Highway 10 improvements until said properties are actually needed. In a typical year,the City of Ramsey has 8-15 active leases in play. The majority of leases are located on RALF properties(however,it is not uncommon for the City to have 2-5 scattered site leases in play as well). The city entered into a contract with Premier Commercial Realty in 2013 to help assist staff in managing lease properties. The 2013 management agreement included three city-owned properties(6701, 6745, and 6811 Hwy 10). Staff is proposing 7443 Hwy 10 be added to the new contract. The City only has Premier Commercial Realty manage properties(lease agreements)that have a history of consuming a large amount of staff time. Notification: NA Observations/Alternatives: OBSERVATIONS Lease contracts create work for staff in three general areas (below). Premier Commercial Realty provides major relief to City staff in areas 1 and 2. (1) collection of payments If we have a tenant that consistently pays on time,this item is never an issue for staff.However, if we have a tenant that routinely pays late(or close to late), or pays less than what is owed,or pays multiple payments,or bounces checks, or pre-dates checks,or plays games,this can be a lot of work. Staff needs to constantly follow-up and monitor this type of tenant.Having Premier Commercial Realty on board is ama/or relie&the City's finance department--when considering collection of payments.