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Consider Leases <br /> For Property at 6745 Highway 10 <br /> (Anchor's Away Building) <br />By: William IC Goodrich, City Attorney <br /> <br />CASE <br /> <br />Background: <br /> <br />As Council is aware, the City is in the process of purchasing the property at 6745 Highway 10, <br />known as the Anchor's Away building through the RALF Funds Program. Final Met Council and <br />MNDOT approval is expected shortly..Two businesses currently are leasing space in the building <br />from Ramsey Town Center, LLC, the present owner. The businesses are Quick Lube car repair and <br />car wash and cold storage for Boat/RV storage. The two tenants would like the city to approve <br />leases for their currently occupied spaces. The Quick Lube Lease would be with Veins Ventures, <br />Inc. with the following terms: <br /> <br /> 1. Leased space: 5266 square feet <br />2. Term: five year lease with options to extend <br />3. Rent: 5.14 per square foot per year or $2,255.60 per month (5.14/sq. ft. X 5266 sq. ft. + 12 <br /> = $2,255.60) <br />4. Property Taxes: Tenant shall pay its prorata share of property taxes. Total Property Taxes <br /> on the entire building are $18,788.00. This tenant will occupy approximately 32% of the <br /> building and therefore pay $6,012.00 of the current annual taxes (32% x $18,788). The <br /> balance, or $12,776, of taxes will be for the cold storage facility and would be paid by the <br /> City. However, the County has indicated that based on the relatively low per square foot <br /> rental for the cold storage facility (l.25/sq. ft.) the tax rate may be reduced for the cold <br /> storage area. <br />5. Insurance: City (Landlord) will maintain hazard insurance <br /> <br />With regard to the RV/boat storage, Ramsey Town Center, LLC would like the City to agree on a <br />lease with K & K Sharp, LLC for the lease of the cold storage space. The terms would be the same <br />as those for the NAU building and are as follows: <br /> <br />1. Leased space: 11,200 square feet <br />2. Term: One year with 5 one year renewal options <br />3. Rem: 1.25 per square foot per year or $1,166.66 per month (1.25 per sq. ft. X 11,200 sq. ft. <br /> + 12 = $1,166.66 per month) <br />4. Property taxes: Landlord (City) to pay - see discussion above <br />5. Insurance: City (Landlord) will maintain hazard insurance <br /> <br />Marty Fisher is asking a management fee of $400.00 per month for management of both the cold <br />storage lease and the Quick Lube Lease. <br /> <br />We will have the actual proposed leases available for your review at the Council meeting and <br />review the details of each lease with you at that time. <br /> <br />Council needs to keep in mind in negotiating these leases that (I) all net rent proceeds are remitted <br />to the Met Council, and (2) Council has previously agreed that to the extent possible, these leases <br />need to be "market rate". <br /> <br />-295- <br /> <br /> <br />