Adopt Resolution #24-154 Approving Lease Agreement for 6701 Hwy 10 NW: Case of God's Kingdom Ministry

God's Kingdom Ministry church has presented an offer to lease the west 4,820 square feet of 6701 Highway 10 NW for an additional 2 years.  Staff, along with Premier Commercial Properties (property manager), has been negotiating with the proposed tenant over the past few months.   Staff has negotiated a Lease Agreement for an additional year ending on January 31, 2026. God's Kingdom Ministry Church has been a satisfactory tenant and has been current with rent. The Tenant has been told that this lease situation is temporary, as the Property is RALF owned and will be sold once the Hwy 10 project is completed, or it is known that this parcel will not be needed for the project. The temporary nature of the lease is why it is only for 1 year and includes a 120 day, no questions asked, out for the City. The City does not receive the revenue from RALF leases. The revenue goes to maintain the properties, pay the taxes and the rest goes back to the RALF Program.

None required

God's Kingdom Ministry Church presented a request of a two year extension of their lease with inflationary increases.  The current lease ends January 31, 2025.  The City countered with a one-year extension with an inflationary increase due to the timing of the completion of the Ramsey Gateway Hwy 10 Improvement project.  The proposed new lease would terminate on January 31, 2026 which would put the City in a better position to be able to market the property for sale per the terms of the Loan Agreement with the Met Council (RALF). The proposed lease would not be executed until late 2024 when the existing lease is almost set to terminate.  This gives the City the ability to renegotiate in the event that the tenant becomes delinquent in rent or is in default of the existing lease. The lease rate of $3,879.75 / month for God's Kingdom Ministry Church is a 5% increase that is on the table for consideration.   There is value to having a tenant in the building and maintaining it.  Staff and the Property Manager support accepting the offer with the key terms below.

Key Lease Terms:
Location: 6701 Hwy 10 (West 4,820 SF)
Lease Duration: February 1, 2025 - January 31, 2026
Lease Rate: $3,879.75 / month                                             
Utilities: Tenant paid
Snow Plowing / Sidewalks: Tenant paid (Tenant has agreed to paying "pro-rata" share)
Early Termination: The City can terminate the lease at anytime without cause after giving an 120 day notice.

Alternatives:

1. Motion to Adopt Resolution #24-154 Approving Lease Agreement for 6701 Hwy 10 NW: Case of God's Kingdom Ministry; subject to City Attorney review (as presented)
2. Motion to Adopt Resolution #24-154 Approving Lease Agreement for 6701 Hwy 10 NW: Case of God's Kingdom Ministry; subject to City Attorney review (with changes)
3. Direct staff to continue negotiations with tenant.
4. Something else.

This item is being handled under normal Staff duties.

Motion to Adopt Resolution #24-154 Approving Lease Agreement for 6701 Hwy 10 NW: Case of God's Kingdom Ministry; subject to City Attorney review (as presented)

Motion to Adopt Resolution #24-154 Approving Lease Agreement for 6701 Hwy 10 NW: Case of God's Kingdom Ministry; subject to City Attorney review (as presented)