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

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Councilmember Elvig inquired about the City maintaining hazard insurance. City Attorney Goodrich replied the lube shop will pay their own insurance; however, Mr. Sharp does not want to pay insurance. Mr. Dennis Sharp stated there are two buildings, the NAU building and the Anchor's Away building. A trade was made with RTC, LLC and the City purchased the NAU building some time ago. He rented the back part of the NAU building, which is a wood structure covered with tin. At the time, that building was being leased to them for $1.25 per square foot. They have been taking deposits for people to store their boats, and the rental rate they have been quoting people averages out to about $215 per boat per year. At this point he cannot call the people and say they will have to pay more in this Anchor' s Away building because he needs to pay taxes. He is not interested in leasing the building if they have to pay the taxes and other costs until August 1 st of next year when the lease ends, at which time they start leasing out for the following year and can determine the amount of rent needed per square foot. City Attorney Goodrich noted the Council informed him in August that Mr. Sharp should pay the taxes on the new building. Mr. Sharp stated he was willing to sign the same lease he signed on the NAU building for $1.25 per square foot until August 1, 2007. That was supposed to be negotiated this past August and he had not heard anything. City Attorney Goodrich stated he sent a letter to Mr. Sharp's son in July informing him they would need to pay the taxes on the property. Economic Development Coordinator Sullivan explained in November of every year the City receives their Truth in Taxation notices. At that point staff will know the taxes for the following year. An estimate can be calculated based on this year's rates, but they will not have an exact figure. Councilmember Cook commented if they agree to Mr. Sharp's request they will begin getting the taxes on this property in August 2007, and they do not have anyone else knocking on the door to use this property this year. This lease can cover some of the expenses and be renegotiated next year. Councilmember Elvig concurred. He indicated the City is trying to generate revenue for the State at this point, and the leasing agent should be negotiating this out and bringing it to the City. The City does not have any guarantee with Mr. Sharp for next year or the long term. He would suggest agreeing to Mr. Sharp's request on the lease and engaging the leasing agent to ensure they are getting the best use of the space. Councilmember Cook noted the Council has discussed the importance of being fair to everyone else in the community that is renting property for commercial use. City Council / September 26, 2006 Page 35 of 39