Agenda - Council Work Session - 05/14/2024

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•We do not have a high need for that space for our own office/personnel needs. Future extensions are to be mutually agreed to, allowing for regular options to consider our own space needs at timely intervals. •Operating expenses on the shared space do not drastically change without the occupancy of the License Center. However,the license center does generate many visitors daily. •Adjusting License Center signage is a reasonable request. •Completing a flooring upgrade is a reasonable request knowing the current condition. Similarly, improving safety changes is in line with what we are considering in other areas of City Hall for our staff. The handicap door opener is not required,but does provide a good customer service gesture. •The proposed base rent reduction to $14.00/SF is significantly under market rate. •Current CAM Seems to be in the market range (lower side) Options 1. Leave lease as is. •Pros- The financial terms remain as is for the next year. • Cons- The future remains uncertain, and they may choose to terminate the lease on June 30, 2025 or after the final five-year extension. 2. Accept the proposed amendments. •Pros-Increases the likelihood of a long-term agreement and revenue source. This would maintain a service option within the city for our residents and business community. Utilizes excess space within City Hall that we do not have a high need for. • Cons- Reduces revenue now and in the future with smaller escalators tied to future increases. They may still choose to terminate the lease in the future. 3. Counter offer the proposed amendment to reflect current market conditions. •Pros- The financial terms would be consistent with market rate, and if accepted, increase annual revenue. • Cons- The future remains uncertain, and they may choose to terminate the lease on June 30, 2025 or after the final five-year extension. 4. Counter offer the proposed amendment to reduce financial terms. •Pros-Largely the same as accepting the County's proposal,but does not reduce the annual revenue as much. • Cons- The future remains uncertain, and they may choose to terminate the lease on June 30, 2025 or after the final five-year extension. At this point in time, staff does not hold a firm recommendation. Timeframe: Funding Source: Responsible Party(ies): Brian Hagen, City Administrator Outcome: Provide consensus direction on support for a lease amendment and the terms for the Anoka County License Center. Attachments Master Contract 2nd Five-Year Extension Letter Form Review Inbox Reviewed By Date Brian Hagen Brian Hagen 05/07/2024 10:59 PM