Agenda - Council - 09/26/2006 - Laserfiche WebLink

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Consider Leases For Property at 6745 Highway 10 (Anchor's Away Building) By: William K. Goodrich, City Attorney Sean M. Sullivan, Economic Development Coordinator Background: As Council is aware, the City has purchased the property at 6745 Highway 10, known as the Anchor's Away building through the RALF Funds Program. Two businesses are interested in leasing space in the building from the City. Midwest Car Care, LLC, A Minnesota Limited Liability company, 2618 Clearview Avenue, Mounds View, MN 55112, would like to lease the Lube and Carwash portion of the building. The remaining part of the building is cold storage for Boat/RV storage and K & K Sharp, LLC would like to lease this area. The Quick Lube Lease would be with Midwest Car Care, LLC would have the following terms: 1. Leased space: 5266 square feet 2. Term: five year lease 3. Rent: $3,494.25 /month with a 3.5% increase per year in each of the four years of the remaining lease term. 4. Property Taxes: This portion of the building is 60% of the building's valuation and would therefore pay 60% of its property taxes or approximately $11,770.00 in 2007. 5. Insurance: Tenant will maintain hazard insurance on the building With regard to the RV/boat storage, the proposed lease would be with K & K Sharp, LLC. The terms would be similar to those for the adjacent NAU building and are as follows: 1. Leased space: 11,200 square feet 2. Term: One year with 5 one year renewal options 3. Rent: 1.25 per square foot per year or $1,166.66 per month (1.25 per sq. ft. X 11,200 sq. ft. = 12 = $1,166.66 per month) 4. Property taxes: Tenant to pay — see discussion above. The Tenant's share would be 40% of the taxes or approximately $7,844.00 in 2007. 5. Insurance: City (Landlord) will maintain hazard insurance Pursuant to the City's Management Agreement with Premier Commercial Properties dated) 7/28/06, the management fee will be $400.00 per month for management of both the cold storage lease and the Midwest Car Care Lease. We will have the actual proposed leases available for your review at the Council meeting and review the details of each lease with you at that time. Council needs to keep in mind in negotiating these leases that (1) all net rent proceeds are remitted to the Met Council, and (2) Council has previously agreed that to the extent possible, these leases need to be "market rate ". Recommendation: Approve the leases upon such modified terms as directed by Council. —379—