Agenda - Council - 05/09/2023 - Laserfiche WebLink

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CC Regular Session 5.16. Meeting Date: 05/09/2023 By: Sean Sullivan, Community Development Information Title Adopt Resolution #23-099 Approving Lease Agreement of 6745 Hwy 10 NW (front) with Mille Lacs Motor Sports II Purpose/Background: PURPOSE: To consider a lease for the front portion of 6745 Hwy 10 NW. BACKGROUND: Mille Lacs Motor Sports II's primary location in Ramsey is at 6781 Hwy 10. They also currently lease a portion of 6701 Hwy NW and the rear portion of 6745 Hwy 10 NW. This company is growing and needs additional space to operate efficiently. The City filled in the "old Pit Area" in 2021 and worked with the tenant to conduct needed maintenance and the building is in condition to rent as verified by the building official and Fire. The leases premises would be used to conduct repairs on boats and ATV vehicles and the fenced in area would be used for outside storage of product for its business (ATV's, boats, etc.). Originally the City did not include an option to extend the lease past May 31, 2023 and recommended that the building be demolished after the lease was over. However, this arrangement has gone well and City Staff supports leasing it out until the Highway 10 Construction is nearing completion in 2025 and business operations can continue "as -is" for Power Lodge and to give them more time to find a future location. The Tenant has invested over $10,000 to improve the aesthetic and functionality of the building which supports the additional two-year lease in the opinion of staff. Staff believes that this building should be demolished once the Hwy 10 project is complete or is nearing completion and this would be communicated to the Tenant. Notification: N/A Observations/Alternatives: The duration of the lease works well with Hwy 10 construction as it terminates no later than May 31, 2025. This timing would allow time for the property to be demolished and to be put for sale on the open market after the improvements to Hwy 10 are completed. The City Attorney has reviewed the lease and approves it to form. The proposed lease rates include rent of $10 per square foot in Lease Period 1 and $12 per square foot for Lease Period 2 as defined below in the key lease terms: Key Lease Terms Location: 6745 Hwy 10 Front 4.864 SQ Lease Duration: June 1, 2023 - May 31, 2025 Lease Rate : Year 1 (6/1/23 throuah 5/31 /24): $4,053.33 / month Year 2 (6/1/24 through 5/31 /25): $4,864.00 / month Utilities: Tenant paid Snow Plowing / Sidewalks: Tenant paid Maintenance responsibilities are clearly outlined. No political si ncnaage allowed.