Review Lease Terms for Independent Auto at 6745 Hwy 10 NW

The City currently owns, and subsequently leases space at 6745 Hwy 10 NW to Independent Auto. Independent Auto is owned by Allen Berg. The Subject Property is located in the Official Map Area, was purchased using Right of Way Allocation and Loan Fund (RALF) dollars, and is part of the future Highway 10 freeway conversion project.

Independent Auto contracts with First Choice Towing for towing services related to the business of Independent Auto. As a contracted service for Independent Auto, First Choice Towing was granted permission by Independent Auto to place its information on the existing ground sign on the Subject Property. Permission was granted by Independent Auto. The City reviewed the existing ground sign in the past for compliance with Building Code and Sign Code requirements. The City has not reviewed a Sign Permit for the replacement sign face including Independent Auto and First Choice Towing. As a contracted service for Independent Auto, Staff would interpret the Sign Code to allow for First Choice Towing to be included as a sign, as it is part of the business model for Independent Auto.

According to Mr. Berg, First Choice Towing is not a sub-leasee of the Subject Property; First Choice Towing is simply a contracted service related to the business of Independent Auto. The vehicles brought to the Subject Property appear to be related to services offered by Independent Auto. It has come to Staff's attention that there is a possibility that First Choice Towing is utilizing the Subject Property in a greater degree than previously stated. At minimum, Staff has been provided evidence of parking multiple commercial vehicles belonging to First Choice Towing on the Subject Property.

Mr. Berg has stated that Independent Auto would desire to sub-lease the Subject Property in the future, but an agreement has not been reached at this time with First Choice Towing. Sub-leasing the Subject Property would provide First Choice Towing with space both in the building and outside storage on the Subject Property. A sub-lease would allow First Choice Towing the opportunity to bring vehicles related to First Choice Towing's operation to the Subject Property, regardless if it were related to Independent Auto. According to the existing lease, Independent Auto would need to obtain written permission from the City to sub-lease the Subject Property. First Choice Towing would need to adhere to current City Code regulations including, but not limited to, off-street parking, operable vehicles, etc.

Mr. Berg will be present at the worksession.

Review of the current lease terms at 6745 Hwy 10 NW is being handled as part of regular staff duties.

Based on discussion. Provide direction to Staff if the City Council desires to require a sub-lease for the Subject Property for the current activities. Provide direction to Staff if the City Council desires any modifications to the existing sign(s) on the Subject Property.