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CC Regular Session <br />Meeting Date: 11/23/2021 <br />Submitted For: Sean Sullivan, Community Development <br />By: Sean Sullivan, Community Development <br />Information <br />5. 19. <br />Title: <br />Adopt Resolution #21-331 Approving Lease with Mille Lacs Motor Sports II, Inc. for Rear 18,200 Square Feet of <br />6701 Hwy 10 NW <br />Purpose/Background: <br />Mille Lacs Motor Sports II, Inc. has presented an offer to lease the rear 18,200 square feet of 6701 Highway 10 NW <br />from December 1, 2021 - May 31, 2024. Staff, along with Premier Commercial Properties (property manager), has <br />been negotiating with the proposed tenant over the past few months. The proposed lease is considered "market rate" <br />according to Premier Commercial Properties. Mille Lacs Motor Sports II, Inc. currently leases space in 6781 Hwy <br />10 NW, 6745 Hwy 10 NW and 6701 Hwy 10 NW and has proven to be a reliable tenant.. The rear 18,200 square <br />feet of 6701 Hwy 10 was recently vacated by the City of Ramsey (Public Works, Police, Fire) and is available for <br />lease. <br />Notification: <br />N/A <br />Observations/Alternatives: <br />The duration of the lease works well with Hwy 10 construction planning as it terminates no later than May 31, <br />2024. This timing would allow for the property to be put for sale on the open market after the improvements to Hwy <br />10 are completed. The City Attorney has reviewed the lease and approves it to form. The proposed lease rates <br />include a base rent of $3.00 per square foot with an inflationary increase of 3% per year as defined below in the key <br />lease terms: <br />Key Lease Terms <br />Location: 6701 Hwy 10 NW - Cold Storage (Rear 18,200 SF) <br />Lease Duration: December 1, 2021 - May 31, 2024 <br />Lease Rate (3.0% inflator): <br />Year 1 (12/1/21 through 5/31/22): $4,550.00 / month <br />Year 2 (6/1/22 through 5/31/23): $4,686.50 / month <br />Year 3 (OPTION PERIOD) (6/1/23 through 5/31/24): $4,827.10 <br />Utilities: Tenant paid <br />Snow Plowing / Sidewalks: Tenant paid (Tenant has agreed to paying "pro-rata" share) <br />Alternatives: <br />1. Approve Resolution #21-3 31 as presented; subject to City Attorney review. <br />2. Approve Resolution #21-331 with changes; subject to City Attorney review. <br />3. Direct staff to continue negotiations with proposed tenant. <br />4. Something else. <br />Funding Source: <br />This item is being handled under normal Staff duties <br />