Laserfiche WebLink
CC Regular Session 4.4. <br /> Meeting Date: 11/22/2016 <br /> Submitted For: Patrick Brama,Administrative Services <br /> By: Patrick Brama,Administrative Services <br /> Information <br /> Title <br /> Approve Two-Year Lease Agreement Extension with EZ Auto <br /> Purpose/Background: <br /> PURPOSE <br /> Consider renewing lease agreement,via a two-year amendment,with EZ Auto for leasing roughly 32,000 square <br /> feet of outside storage and display(used car sales). <br /> BACKGROUND <br /> This lease premises sits on two city-owned properties totaling roughly 62,000 square feet(GROSS),located on US <br /> Highway 10 near the Armstrong Interchange. The actual leasable space is roughly 32,000 square feet of paved <br /> parking surface. <br /> EZ Auto began leasing this space in 2011, at which time they put in over$100,000 of improvements to meet city <br /> zoning regulations (curb/gutter/payment/drainage/etc.). The original lease agreement includes provisions for two <br /> built-in lease term extensions. Therefore, staff is working off the original lease agreement language,rather than <br /> creating a new lease altogether. <br /> EZ Auto has been a good tenant, and a good corporate citizen for Ramsey. EZ Auto has no issues from a property <br /> management perspective (i.e. illegal usage of neighboring properties,code enforcement issues, late rent payments, <br /> political signs, excessive maintenance requests,etc.). <br /> The only major important component to note with this lease amendment is a reduction in rent. EZ Auto recently <br /> challenged city staff on the lease rate they are paying,as they believed it to be too high. Staff did some research. As <br /> a result of input from the city's leased property manager(Premier Commercial Realty)and making sure we are in <br /> compliance with the city's Policy for Leasing City Owned land, staff is recommending EZ Auto's lease rate be <br /> adjusted. The new lease rate is$0.62 psf.Market is$0.50-$0.75. Most city owned leased properties are at <br /> $0.50-$0.55 psf. The new lease rate covers all city costs (including taxes). The lease rate will be adjusted in the <br /> second year by an increase of 2%. Please see attached breakdown for the math. <br /> The attached lease amendment does include one small item,related to prohibiting political signage. Lastly, it <br /> should be noted, all other terms in the original lease agreement stand(including the City's ability to terminate early <br /> with a 1-year notice). <br /> Observations/Alternatives: <br /> NA <br /> Funding Source: <br /> NA <br /> Recommendation: <br /> NA <br />