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the Council does not agree to pay the taxes they will not lease the building. He informed the <br />attorney that staff is recommending that they do not do that. It has been indicated that there are <br />also some other issues. He recommends that this lease remain on a short term, as the City does <br />not want to incur unreasonable liability and a fairly decent market rate is needed to avoid being <br />competitive with the private market. <br /> <br />Mayor Gamec inquired about the timing of the lease. <br /> <br />City Attorney Goodrich replied the lease would be year to year. The tenant wants to be sure the <br />City does not stop the lease in February when it is full of supplies. <br /> <br />Mayor Gamec inquired if care and maintenance of the area will be included in the lease. <br /> <br />City Attorney Goodrich responded in the affirmative. He explained the tenant wanted the City to <br />snowplow and they are resisting that. <br /> <br />Councilmember Elvig expressed concern with entering into any agreement that is not triple net. <br />He inquired about the landlord situation of the storage spaces. <br /> <br />City Attorney Goodrich replied there would be one tenant to take care of the bays and another <br />tenant to take care of the office space. <br /> <br />Councilmember Elvig expressed concern that the amount the City is paying for the property <br />management is a significant percentage of the revenue. He suggested the management fee be a <br />percentage of the space that is leased. He questioned if this agreement would put Premier in a <br />conflict of interest with other projects in the City. <br /> <br />City Attorney Goodrich replied there has been no bidding on this management fee or the lease, <br />and this should be a discussion of the Council. <br /> <br />Mayor Gamec commented this was discussed at the last meeting, and it was agreed that it met <br />the criteria. He stated each project would need to be considered individually and would need to <br />meet the requirements. <br /> <br />City Attorney Goodrich advised it does not stand out to him that this arrangement will cause a <br />conflict of interest with Premier; it could have some relation to the tenants. He advised staff has <br />tried to standardize these types of leases. <br /> <br />Councilmember Elvig asked if the management fee arrangement would be renewable each year. <br /> <br />City Attomey Goodrich replied the management fee arrangement can be canceled within 60 or <br />90 days. <br /> <br />Councilmember Strommen commented it is fine as long as the City is breaking even, but the City <br />will be losing money until they lease out the office space. She noted the projection may change <br />a little if the City is not paying the $30,000 plus in property rexes. <br /> <br />City Council / January 10, 2006 <br />Page 7 of 18 <br /> <br /> <br />