Agenda - Council - 01/10/2006 - Laserfiche WebLink

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CASE # q K AND K SHARP, LLC LEASE AGREEMENT By: Scan Sullivan, Economic Development / TIF Specialist James E. Norman, City Administrator Background: In September of 2005 the City purchased the property known as the NAU building through RALF Funding. The building included two areas that are suitable for leasing. As the City continues to acquire properties in the Highway 10 corridor it will determine which ones will continue to operate at a profit or breakeven point for the City. To ensure that these buildings remain in service the City agreed to enter into a Management Agreement with.Premier Commercial Properties. The lease being considered between the City and K and K SHARP, LLC, a Minnesota Limited Liability Company would involve this building that currently houses a storage operation for boats and RV's. The fi-ont of the building could be leased out for an office/showroom user at a later date. The Property Manager would be in place to market the vacant space and to manage existing tenants. Observations: Staffhas put together an analysis that shows that the City needs to lease out this building to collect revenues necessary to make the property tax payments (See attached). In subsequent years the City would have the ability to claim an exempt status for the property if renters were unable to be found. It is clear that any revenue generated on this building for tax year 2006 would be beneficial. A change will be made-to the lease to incorporate the City being responsible for property taxes. Recommendation: Enter into a Lease Agreement with K and K SHARP, LLC, a Minnesota Limited Liability Company in the attached form contingent on City Attorney approval. Council Action: Approve attached Lease Agreement contingent on City Attorney approval. Reviewed by: City Attorney 12.13.05 -167-