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<br />2) HealthQuest Proposal <br /> <br />Community Development Director Trudgeon indicated the City received a letter of intent <br />regarding the lease of 6701 Highway 10 NW (former NAU Building) by HealthQuest. K & K <br />Sharp currently leases the cold storage portion of the building on the north side and City Council <br />has approved Youth First to lease a portion on the front of the building. <br /> <br />Economic Development Coordinator Sullivan reviewed that the City has been acqUlnng <br />properties as part of the Highway 10 corridor. The City has retained Premier Commercial <br />Properties to manage these properties on Highway 10 and to try to get clients that will lease these <br />spaces. Marty Fisher of Premier Commercial Properties has brought this request to the City for <br />review. Included in the Council's packet is the letter of intent. Staff would like Council to <br />consider whether the requested use is a good use for this location. There are concerns that have <br />come up regarding parking needs for three potential businesses on one site, specifically in <br />relation to the number of spaces. Mr. Sullivan indicated another concern to be considered is that <br />the letter of intent requests a $10 per square foot rate. Mr. Fisher would agree the $12 per square <br />foot rate would be more along market value. Council direction has been to be sure the City is <br />leasing properties at market rate so it is not in competition with the private sector. Mr. Sullivan <br />requested input from Council on whether staff should proceed in trying to bring HealthQuest to <br />this location. <br /> <br />Community Development Director Trudgeon advised there will need to be an updating of the <br />building for compliance with state building and fire codes as necessary. Council should consider <br />as the City leases out these properties what type of investment should be put into the buildings. <br />It should be noted that planning for Highway 10 is underway, but the action timing may be 10 to <br />20 years before the land is needed. <br /> <br />Mr. Sullivan indicated Mr. Fisher will explain the necessary improvements to accommodate two <br />users in the front portion of this building. <br /> <br />Mr. Marty Fisher, Premier Commercial Properties, explained HealthQuest would use the facility <br />for a Snap Fitness, which is a 24 hour operation where people run in for a quick use of the <br />facilities for their workout. The facilities will not include a shower or swimming pool; it will be <br />geared to 20 minute quick in/quick out users. The facilities will be very basic with treadmills in <br />the front area and other aerobic machines in the open area. The little kitchen would be put to use <br />as a general store and office. Mr. Fisher stated the space as it sits today is about 10,000 square <br />feet. There is access through a front door, which is midline between the office spaces, and an <br />exit or entrance door on the east and the west end. For two tenants to utilize this space the <br />vestibule would need to be reconstructed with the door that is currently in place removed and <br />replaced by two doors. The cost for this would be roughly $1,500. Further, there is a demising <br />wall that would have to split the two spaces coming from the vestibule to the back of the <br />building. There is a partial wall currently, so there would need to be about a 20 foot run that is <br />about 16 feet tall. The cost for this would be approximately $3,000 to stud, sheetrock, sand, and <br />paint. Mr. Fisher explained typically tenants use separate utilities and have separate meters, but <br />being there would be a very common use between the two spaces the utilities could likely be <br />prorated and split in half. <br /> <br />City Council Work Session / January 9, 2007 <br />Page 2 of7 <br />