Agenda - Council - 12/28/2006 - Laserfiche WebLink

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Case #13: Request for Preliminary Plat and Preliminary Site Plan Review of Ebony Woods; Case of DPM Investments, Inc. Tabled. %ase #14: Consider Leases for Property at 6745 Highway 10 (Anchor's Away Building) City ttorney Goodrich reviewed that the City has purchased the property at 6745 Highway 10, kno as the Anchor's Away building through the RALF Funds Program. Two businesses are interest in leasing space in the building from the City. Midwest Car Care, a Minnesota Limited bility Company would like to lease the Lube and Carwash portion of the building. The remains part of the building is cold storage for Boat/RV storage and K & K Sharp, LLC would like to ase this area. The Quick Lube Lease would be with Midwest Car Care, LLC would have thelowin~ terms: 1. Leased space: ,266 square feet 2. Term: five year se 3. Rent: $3,494.25/m th with a 3.5% increase per year in each of the four years of the remaining lease term. 4. Property Taxes: This p rtion of the building is 60% of the building's valuation and would therefore pay 60% o f\its property taxes or approximately $11,770.00 in 2007. 5. Insurance: Tenant will mainth~n hazard insurance on the building. City Attorney Goodrich advised with reg d to the RV/boat storage, the proposed lease would be with K 8i K Sharp, LLC. The terms wou 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 opts ns 3. Rent: $1.25 per square foot per year of $1,1 .66 per month (1.25 per sq. ft. X 11,200 sq. ft. divided by 12 = $1,166 per month) 4. Property Taxes: Tenant to pay -see discussion bove. The Tenant's share would be 40% of the taxes or approximately $7,844.00 in 200/\ 5. Insurance: City (Landlord) will maintain hazard insural~ce. City Attorney Goodrich advised pursuant to the City's Management Agreement with Premier Commercial Properties dated 7/28/06, the management fee will e $400.00 per month for management of both the cold storage lease and the Midwest Car Car Lease. Council should keep in mind in negotiating these leases that (1) all net rent proceeds e remitted to the Met Council, and (2) Council has previously agreed that to the extent possible, th se leases need to be "market rate". City Attorney Goodrich indicated Mr. Sharp does not want to pay property taxes on 's lease. If this is agreed to, $1,648 dollars would be the annual net after the property taxes an hazard insurance are paid by the Ciiy. -226- City Council /September 26, 2006 Page 34 of 39