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<br />would like to lease this area. The Quick Lube Lease would be with Midwest Car Care, LLC <br />would have the following terms: <br /> <br />1. Leased space: 5,266 square feet <br />2. Term: five year lease <br />3. Rent: $3,494.25/month with a 3.5% increase per year in each of the four years of the <br />remaining lease term. <br />4. Property Taxes: This portion of the building is 60% of the building's valuation and <br />would therefore pay 60% of its property taxes or approximately $11,770.00 in 2007. <br />5. Insurance: Tenant will maintain hazard insurance on the building. <br /> <br />City Attorney Goodrich advised with regard to the R V !boat storage, the proposed lease would be <br />with K & K Sharp, LLC. The terms would be similar to those for the adjacent NAU building <br />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. Rent: $1.25 per square foot per year of $1,166.66 per month (1.25 per sq. ft. X 11,200 <br />sq. ft. divided by 12 = $1,166 per month) <br />4. Property Taxes: Tenant to pay - see discussion above. The Tenant's share would be <br />40% ofthe taxes or approximately $7,844.00 in 2007. <br />5. Insurance: City (Landlord) will maintain hazard insurance. <br /> <br />City Attorney Goodrich advised pursuant to the City's Management Agreement with Premier <br />Commercial Properties dated 7/28/06, the management fee will be $400.00 per month for <br />management of both the cold storage lease and the Midwest Car Care Lease. Council should <br />keep in mind in negotiating these leases that (1) all net rent proceeds are remitted to the Met <br />Council, and (2) Council has previously agreed that to the extent possible, these leases need to be <br />"market rate". <br /> <br />City Attorney Goodrich indicated Mr. Sharp does not want to pay property taxes on this lease. If <br />this is agreed to, $1,648 dollars would be the annual net after the property taxes and hazard <br />insurance are paid by the City. <br /> <br />Councilmember Elvig inquired about the City maintaining hazard insurance. <br /> <br />City Attorney Goodrich replied the lube shop will pay their own insurance; however, Mr. Sharp <br />does not want to pay insurance. <br /> <br />Mr. Dennis Sharp stated there are two buildings, the NAU building and the Anchor's Away <br />building. A trade was made with RTC, LLC and the City purchased the NAU building some <br />time ago. He rented the back part of the NAU building, which is a wood structure covered with <br />tin. At the time that building was being leased to them for $1.25 per square foot. They have <br />been taking deposits for people to store their boats, and the. rental rate they have been quoting <br />people averages out to about $215 per boat per year. At this point he cannot call the people and <br />say they will have to pay more in this Anchor's Away building because he needs to pay taxes. <br /> <br />City Council 1 September 26, 2006 <br />Page 34 of 38 <br /> <br />P54 <br />