Laserfiche WebLink
Mayor Strommen asked for clarification from the tenant that if the current lease is extended, the <br />tenant would be responsible for maintenance and if a more market rate lease is negotiated, the <br />City would be responsible for maintenance. <br />Assistant City Administrator/Economic Development Manager Brama confirmed that if there is <br />a negotiation on a more market rate lease, perhaps the City could make a one-time investment in <br />maintenance but from then on, any maintenance would be the responsibility of the tenant. <br />Councilmember LeTourneau stated that he is curious of the lease rate and asked if there is a <br />current policy on how the rate is viewed, whether the lease could remain at the current rate, or <br />whether the rate should be changed to market. He asked how that would apply to other RALF <br />properties as well. <br />Assistant City Administrator/Economic Development Manager Brama stated that the lowest rate <br />that the City would allow is 90 percent of the market rate. He stated that this lease was <br />negotiated at the lowest point in the economic downfall. He noted that the lease of this building <br />was also an attempt to fill the vacant building and assist a Ramsey business. He stated that this <br />rate is about 60 percent of the market rate and noted that jumping to the market rate would be a <br />substantial difference for the business. <br />Allen Berg, owner of Independent Auto stated that the building was not in 100 percent condition <br />when he began his lease and he is aware that there are not relocation funds available because this <br />is a RALF property and therefore when the road is expanded he will be out of his location with <br />no relocation costs and that is why the lower rate was agreed upon. He noted that he began his <br />building with no assistance and started from nothing. <br />Councilmember Riley stated that it would be helpful to have a memorandum from the City <br />Attorney on this issue. He stated that the most important thing he has heard is that there is a <br />contract in place that should be honored and that should answer the question regarding market <br />value. He stated that with the shape the building is in, perhaps this would be considered market <br />value. He stated that if there are things the tenant would need to do in terms of maintenance <br />under the contract, that should be done. He agreed that the lease language should be clarified to <br />address what will or will not do, but the lease should be renewed. <br />Mayor Strommen agreed that the lease should be extended, and this would be an opportunity to <br />clarify the language in the lease. <br />Councilmember Kuzma asked for additional information on late payments. <br />Assistant City Administrator/Economic Development Manager Brama stated that there is no <br />default language in the contract that would address late payments. He noted that the lease is <br />currently up to date. <br />Mr. Berg replied that there was an issue with late payments when he began leasing the second <br />storage building because of unanticipated problems with summer storage and provided additional <br />City Council Work Session / December 12, 2017 <br />Page 2 of 8 <br />