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<br />Councilmember Elvig explained the City will not receive any cash flow from this lease. <br /> <br />Mayor Gamec explained lease revenue from the building would replenish the RALF account; the <br />City would receive administrative costs associated with the lease. <br /> <br />Councilmember Strommen indicated the City would also receive the tax revenue. She stated she <br />is open regarding this use, but agrees that the rate must be at market rate. <br /> <br />Councilmember Look asked if the build-out would be the responsibility of the tenant. <br /> <br />Mr. Fisher replied all build-out is negotiable. There are some things that generally fall to the <br />landlord; some demising of the space is customarily a landlord responsibility. Taking things <br />further to do additional build-outs for the tenant is their request for the City's good graces, but <br />demising the space to make it usable customarily falls to the landlord. <br /> <br />Councilmember Jeffrey indicated this would really be net zero other than the taxes coming in, as <br />costs associated with demising would be deducted from the revenue before forwarding it to the <br />Metropolitan Council. He pointed out the previous discussion in a different lease where the <br />fence that was to be constructed would be subtracted from the revenue prior to forwarding it to <br />RALF. <br /> <br />Mr. Fisher indicated he recalls the discussion at the Council meeting where Council allocated up <br />to $5,000 for the fence and they were to go back and request the cost from the Metropolitan <br />Council. <br /> <br />Councilmember Olson suggested the contract could be drafted to require HealthQuest to <br />complete the necessary demising improvements, which would be deducted from the first lease <br />payments. <br /> <br />Economic Development Coordinator Sullivan indicated Council should consider whether it is a <br />good idea to split the building. This building is potentially high end office space, and to start <br />chopping it up will limit the type of users in the future. <br /> <br />Mr. Fisher commented this is a good point; the building is nice office space as it sits today that <br />would be good space for users such as an engineering firm or a mortgage company. The entire <br />front end of the building is approximately 9,800 square feet. <br /> <br />Councilmember Olson inquired about the number of parking spaces available on the site and <br />HealthQuest's parking needs. <br /> <br />Mr. Fisher replied HealthQuest has requested 30 parking spaces at peak time. Parking is located <br />at the front of the building and it will be very close to 30 stalls; the parking is not striped. <br /> <br />Councilmember Dehen questioned whether 30 spaces for parking are understated. <br /> <br />City Council Work Session / January 9, 2007 <br />Page 4 of7 <br />