Minutes - Council - 07/10/2007 - Laserfiche WebLink

Home

Pawn was transferred to TJWB, LLC. Ralph Nissen has provided the City with a written request to transfer the lease to the new entity. The lease clearly states that any assignments of the lease must be approved by the City; the City does not have to allow the assignment, but they cannot unreasonably disallow that. Staff has been advised that the City needs to look at this tenant and whether this is a viable operation and an entity they want to do business with. The initial lease expires in April of 2008, but the lease provides for five I-year extensions, and as with all the City's leases, the lease can be terminated with one year notice if a highway project is coming through. This was a purchase with RALF funds; net proceeds are to be returned to the Metropolitan Council. At this time staff does not have a lot of information about the new tenant. Community Development Director Trudgeon reported that Economic Development Coordinator Sullivan has met with the proposed new tenant who is very interested in cleaning up the property. Council has been provided with a letter received from the proposed new tenant asking that they be assigned the lease. They are interested in cleaning up and paving the yard. They would like to add car pawning to the operation and would like to install more pavement and light standards. They would like to renegotiate their lease to lower the rent to help pay for the improvements. Staff is open to this. Staff does not have a recommendation tonight. They would like to bring the discussion back at a later time after there is more clarification. Mr. Trudgeon stated Council recently had a discussion about property maintenance on Highway IO, and it was heard loud and clear to be sure the City is maintaining their property. Working with the proposed new tenant may provide the clean up of this property and get the property into compliance. Staff would like more time to work with the proposed tenant to be certain that everything is done in the proper way. Staff could bring back a renegotiated lease or if Council would prefer this could be tabled in order for staff to obtain more information. However, the problem with this is that Mr. Nissen would still be responsible for the lease and he is out of the business. Mayor Gamec stated number one is the concern about improving the property. The City has tried to go with market value leased prices on these RALF properties; a rent reduction would only be for a short period of time to cover the improvement costs. He indicated he would only like to deal with one owner, rather than a sublease. City Attorney Goodrich explained this would be an assignment of the lease. Mr. Nissen would like to be relieved from any liability of the lease. This is a unique situation with the City owning the property and the Metropolitan Council having fee title. Council should discuss whether they want to allow used car sales in this location. It is an allowed use, but the City owns the property and can discuss whether to allow the use in the lease. Councilmember Elvig stated he does not have a problem with reassigning the lease. He likes that the business is employing people, but does not really like the idea of reducing the amount of the lease to help pay for improvements; this is typically not standard, especially if the tenant is going to be changing the business. He would not be in favor of this property that is owned by the City being turned into a used car lot. City Attorney Goodrich advised the lease states "The Property shall be used and occupied by Tenant solely for the purpose of office and commercial retail sales and such use by Tenant shall City Council I July 10,2007 Page 12 of 24