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<br />to report back to Council at a future work session. Mr. Sullivan stated staff has met with the <br />proposed tenants and they are agreeable to the $12/SF lease rate required by the City Council. <br />The existing paved parking surface will accommodate the parking needs of both HealthQuest' <br />and Youth First. An inspection of the facility was conducted by the Fire Marshal and Building <br />Official on March 12,2007. The Fire Marshal has required a code notification system with heat <br />indicators inside of the storage area that will sound a local and visual alarm inside and outside of <br />the business to be installed. Another issue that is yet to be resolved is the ventilation system. An <br />inspection has been scheduled and any required upgrades will be made to comply with code. A <br />demising wall and vestibule would also need to be constructed to separate Youth First from <br />HealthQuest. These improvements would require additional expenditures and the cost would be <br />shared with the incoming tenant. The owners of HealthQuest have agreed to share costs <br />associated with the construction of the demising wall and vestibule and will be asked to share <br />costs associated with the ventilation system if needed. Mr. Sullivan advised staff supports <br />executing a lease with HealthQuest as long as all the fire protection, ventilation and required <br />construction are complete, or are agreed to be completed to the satisfaction of the Building <br />Official and Fire Marshal. <br /> <br />Councilmember Dehen inquired about the City's agreement with Youth First for use of the <br />building. <br /> <br />Economic Development Coordinator Sullivan replied Youth First has a lease that can be renewed <br />after six months. Youth First is not in discussions for sharing in any of these costs. <br /> <br />Interim City Administrator Nelson explained the Youth First use of the building was a project <br />the City undertook in terms of providing Youth First space for youth programming for the Oak <br />Terrace' neighborhood. <br /> <br />Councilmember Olson inquired about the type of lease that would be negotiated. <br /> <br />Economic Development Coordinator Sullivan indicated the lease would be structured similar to <br />the Midwest Car Care lease, which he believes includes a 5 year term with an escalator for <br />property taxes the tenant would be responsible for. He explained the front half of this building <br />has been tax exempt until there is a tenant because it was purchased by the City; with the lease it <br />would become taxable for the coming year. <br /> <br />Councilmember Dehen requested information regarding costs for the improvements. <br /> <br />Economic Development Coordinator Sullivan replied these numbers will be available prior to <br />Council approving the lease. <br /> <br />Councilmember Jeffrey pointed out that any City cost for improvements would be deducted <br />before the rent proceeds go to Met Council. The advantage to the City of this lease would be the <br />taxes. <br /> <br />Economic Development Coordinator Sullivan requested direction whether staff should proceed <br />to the next step of negotiating a lease with HealthQuest. <br /> <br />City Council Work Session I April 3, 2007 <br />Page 2 of 14 <br />