Agenda - Council - 03/27/2018 - Laserfiche WebLink

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CC Regular Session Meeting Date: 03/27/2018 Submitted For: Patrick Brama, Administrative Services By: Patrick Brama, Administrative Services 4. 6. Information Title Approve Lease Agreement: 6745 Highway 10, Independent Auto Purpose/Background: PURPOSE Approve attached lease agreement with Independent Auto for use of city -owned property. BACKGROUND (CASE) This case was last reviewed by the City Council on 12/12/2017. At that time, the Council provided staff with general direction to work with the tenant as follows: Work with the Tenant to renew the lease for three years, at the rent rate outlined in the original agreement. Staff strongly recommend a complete rewrite of the original lease agreement, to address various issues/ challenges with the existing lease language, and to come into compliance with the city's template lease agreement. Staff also recommended including a $10,000limit/ cap on the city's future investment into property maintenance. Staff also addressed all immediate life/ safety property maintenance issues. Please see 12/12/2017 case and minutes for details. Example issues with original lease agreement: late rent payments, property maintenance issues/ debate of responsibility for property maintenance, use of areas for outside storage. The City Attorney did a complete re -write of the original lease agreement, and has addressed staffs concerns. This agreement has been reviewed by the Tenant (Independent Auto) and the Property Manager (Premier Commercial Realty). Although the Tenant does not desire some of the language in the new lease agreement (i.e. addressing some of the past issues), it appears all parties are agreeable. BACKGROUND (PROPERTY & LEASE) The City purchased 6745 Highway 10 in 2006. Since then, the City has attempted to lease the property back to the private sector. In 2011, City negotiated a 5-year lease agreement with Independent Auto for use of 6745. The original lease term began February 2012, and is set to expire in March of 2018. Attached is the original lease agreement. The original lease agreement provides a 3-year renewal/ option -period for the tenant, at the identical rent rate currently being paid (i.e. no increase in rent for 3-years). The original lease agreement also contains several provisions that allow the City to not renew the lease. Independent Auto is seeking to renew the lease for an additional 3-year term, at the rate outlined in the original lease agreement. Notification: NA Observations/Alternatives: NA