Agenda - Council - 04/24/2007 - Laserfiche WebLink

Home

CASE # . Consider Lease For Property at 6701 Highway 10 (former NAU Building) By: William K. Goodrich, City Attorney Sean M. Sullivan, Economic Development Coordinator Background: As Council is aware, the City has purchased the property at 6745 Highway 10, known as the NAU building through the RALF Funds Program. Currently the building is being leased by both Youth First and K & K Sharp. Endurance Sports, LLC dba Healthquest has expressed interest in leasing half of the front portion of the building. The terms of the lease are below. A demising wall and a new vestibule are needed to divide the front portion of the building. In addition, a new ventilation system needs to be installed to accommodate the fitness use for the building. The cost of building the demising wall and vestibule is $3,250 and that cost would be shared on an equal basis with Healthquest and the City. The cost of the ventilation system is $6,879.00 and will be paid by the tenant. A fire alarm system has been installed and the City will perform maintenance on the fire extinguishers. 1. Leased space: 4820 square feet 2. Term: five year lease with options to extend 3. Rent: $12.00 per square foot per year or $4820.00 per month ($12.00 /sq. ft. X 4820 sq. ft. 12 = $4820.00) 4. Property Taxes: Tenant shall pay its prorata share of property taxes which is $917.18 per month ($11,006.20 / 12 months = $917.18). In subsequent years the property taxes will be based on 33% of the taxable market value of the building and it will be paid on a monthly basis. 5. Insurance: City (Landlord) will maintain hazard insurance We will have the proposed lease available for your review at the Council meeting and review the details of each lease with you at that time. Council should keep in mind in negotiating these leases that (1) all net rent proceeds less administration and maintenance are remitted to the Met Council, and (2) Council has previously agreed that to the extent possible, these leases need to be "market rate ". Recommendation: Approve the leases upon such modified terms as directed by Council. Council Action: (1) Motion to approve a Lease Agreement with Endurance Sports, LLC dba Healthquest, for 4,820 square feet of the building located at 6745 Highway 10 upon the terms and conditions of the Lease Agreement reviewed and amended by City Council. Review Checklist: Interim City Administrator CC: 04/24/2007