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<br />Councilmember Strommen questioned if the personal property and equipment are essential to the <br />building for its current use. <br /> <br />City Administrator Norman replied the car wash equipment and the hoist are included with the <br />equipment. <br /> <br />Councilmember Jeffrey asked if the building is being leased for market value, including the <br />equipment. <br /> <br />City Attorney Goodrich replied he does not believe the lease considers the equipment. Council <br />was informed at the last Council meeting that MnDOT recommends leases at 8% of the value, <br />which this lease is not close to. Council may want to reconsider the rate of the lease. He <br />indicated the rate of the lease was set at $5.14 per square foot, which was determined as a ratio <br />of the building value. He asked if the direction of the Council is to increase the lease rate based <br />on the same ratio, taking into account the additional purchase amount that includes the personal <br />property and equipment. <br /> <br />Consensus of the Council was to direct staff to increase the lease for the Anchor's Away <br />Building located at 6745 Highway 10 NW, taking into consideration the additional purchase <br />amount that includes the personal property and equipment located in the building. <br /> <br />Mayor Gamec asked if the City will be responsible for repairing the hoist if there were to be any <br />problems with it. <br /> <br />City Attorney Goodrich replied the lease is drafted with the tenant responsible for the equipment. <br /> <br />Councilmember Elvig expressed concern that a lease price of $5.14 is unbelievably low for a <br />building with equipment. <br /> <br />Councilmember Cook suggested if the tenants are not interested in using the car wash equipment <br />or hoist it could be removed from the lease and leased out at a higher value to someone that will <br />use it. <br /> <br />Councilmember Jeffrey stated a lease on an oil changing facility would be at a rate of over $5.00 <br />per square foot, plus lIz million dollars in new equipment. He stressed that the City needs to be <br />accountable for a reasonable market rate. <br /> <br />City Administrator Norman indicated the lease on the building was approved at a previous <br />Council meeting; staff will bring the lease back for consideration per Council's direction. <br /> <br />Motion by Councilmember Cook, seconded by Councilmember Elvig, to amend the previously <br />approve Purchase Agreement and Loan Agreement for purchase of the property located at 6745 <br />Highway 10 NW by increasing the purchase price from $1,550,000.00 to $1,749,880.00 for the <br />purchase of said property by use of RALF Funds. <br /> <br />Special City Council / July 5, 2006 <br />Page 3 of 5 <br />