Adopt Resolution #21-331 Approving Lease with Mille Lacs Motor Sports II, Inc. for Rear 18,200 Square Feet of 6701 Hwy 10 NW
 

Mille Lacs Motor Sports II, Inc. has presented an offer to lease the rear 18,200 square feet of 6701 Highway 10 NW from December 1, 2021 - May 31, 2024.  Staff, along with Premier Commercial Properties (property manager), has been negotiating with the proposed tenant over the past few months.   The proposed lease is considered "market rate" according to Premier Commercial Properties. Mille Lacs Motor Sports II, Inc. currently leases space in 6781 Hwy 10 NW, 6745 Hwy 10 NW and 6701 Hwy 10 NW and has proven to be a reliable tenant..  The rear 18,200 square feet of 6701 Hwy 10 was recently vacated by the City of Ramsey (Public Works, Police, Fire) and is available for lease.
 

N/A

The duration of the lease works well with Hwy 10 construction planning as it terminates no later than May 31, 2024.  This timing would allow for the property to be put for sale on the open market after the improvements to Hwy 10 are completed.  The City Attorney has reviewed the lease and approves it to form.  The proposed lease rates include a base rent of $3.00 per square foot with an inflationary increase of 3% per year as defined below in the key lease terms:

Key Lease Terms
Location: 6701 Hwy 10 NW - Cold Storage (Rear 18,200 SF)
Lease Duration: December 1, 2021 - May 31, 2024
Lease Rate (3.0% inflator):
                        Year 1 (12/1/21 through 5/31/22): $4,550.00 / month
                        Year 2 (6/1/22 through 5/31/23):   $4,686.50 / month
                        Year 3 (OPTION PERIOD) (6/1/23 through 5/31/24): $4,827.10
                   
Utilities: Tenant paid
Snow Plowing / Sidewalks: Tenant paid (Tenant has agreed to paying "pro-rata" share)

Alternatives:

1. Approve Resolution #21-331 as presented; subject to City Attorney review.
2. Approve Resolution #21-331 with changes; subject to City Attorney review.
3. Direct staff to continue negotiations with proposed tenant.
4. Something else.

This item is being handled under normal Staff duties

Staff recommendation is to approve Resolution #21-331 as presented.

Motion to adopt Resolution #21-331 Approving Lease with Mille Lacs Motor Sports II, Inc. for Rear 18,200 Square Feet of 6701 Hwy 10 NW (as presented); subject to City Attorney review.