7.4.
CC Regular Session
- Meeting Date:
- 02/26/2013
- Submitted For:
- Patrick Brama
- By:
- Jo Thieling, Administrative Services
Information
Title:
Consider Policy for Leasing City-Owned Land
Background:
The City of Ramsey owns an inventory of real property. A number of City owned properties hold economic value and provide the City with the opportunity of leasing properties to the private sector.
The Community benefits by leasing City owned properties to the private sector as they become taxable. Increasing the overall tax capacity of a community by leasing City owned properties lowers the tax burden for individual tax payers.
The purpose of the proposed policy is to guide the process of developing and negotiating leases for the use of City owned properties. Specifically, this policy outlines standards City Staff shall follow as they negotiate with prospective lessors.
The desired outcome of this policy is to develop a clear, consistent, transparent, and fair process the City Council, prospects, lessees and Staff can rely on as leasing negotiations transpire.
The Community benefits by leasing City owned properties to the private sector as they become taxable. Increasing the overall tax capacity of a community by leasing City owned properties lowers the tax burden for individual tax payers.
The purpose of the proposed policy is to guide the process of developing and negotiating leases for the use of City owned properties. Specifically, this policy outlines standards City Staff shall follow as they negotiate with prospective lessors.
The desired outcome of this policy is to develop a clear, consistent, transparent, and fair process the City Council, prospects, lessees and Staff can rely on as leasing negotiations transpire.
Observations/Alternatives:
Due in large part to a number of transportation projects throughout the community, the City has acquired a number of parcels for future right-of-way (ROW). As a result, the City has negotiated a number of leases with private organizations on various City owned properties.
Internally, the responsibility of negotiating leases has shifted over the past five years. At one time, the City contracted said function with Premier Commercial Realty (outside vendor). Over the past few years, with turnover in City staff, this function has changed hands multiple times internally.
Looking back, it is Staff's observation the City has maintained an inconsistent and unclear policy on how lease agreements are negotiated. This issue has the following real or perceived consequences:
Internally, the responsibility of negotiating leases has shifted over the past five years. At one time, the City contracted said function with Premier Commercial Realty (outside vendor). Over the past few years, with turnover in City staff, this function has changed hands multiple times internally.
Looking back, it is Staff's observation the City has maintained an inconsistent and unclear policy on how lease agreements are negotiated. This issue has the following real or perceived consequences:
- Favoritism or politics
- City being "NOT" business friendly
- Staff "CONFLICT OF INTEREST"
- The City "SHOULD" lease City owned land, even at a discount, to keep it on the tax roles
- Frustration and finger pointing regarding the following specific inconsistencies:
- Taxes
- City or tenant responsibility?
- Paid monthly to the City or by tenant independently; should the City have an escrow?
- Insurance
- Certificate of Insurance, due before closing or not?
- Base rent
- What is it and what does it not include?
- How do we define and how do we arrive at this number?
- Does the City have a price floor?
- Taxes
ALTERNATIVES:
*Discuss and amend the attached draft policy; and direct Staff to revise and bring back to a regular City Council meeting for adoption
*Do not develop a formal policy for leasing City owned land.
*Direct Staff to pursue an alternative direction.
Recommendation:
Discuss and amend the attached draft policy; and direct Staff to revise and bring back to a regular City Council meeting for adoption.
NOTE: Staff would like specific direction regarding base rent. How far below market rate is the Council comfortable with setting a floor (minimum price). The proposed policy calls for a minimum 80% of market rate price.
NOTE: Staff would like specific direction regarding base rent. How far below market rate is the Council comfortable with setting a floor (minimum price). The proposed policy calls for a minimum 80% of market rate price.
Funding Source:
NA
Council Action:
Discuss and amend the attached draft policy; and direct Staff to revise and bring back to a regular City Council meeting for adoption.
NOTE: Staff would like specific direction regarding base rent. How far below market rate is the Council comfortable with setting a floor (minimum price). The proposed policy calls for a minimum 80% of market rate price.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Jo Thieling | 02/21/2013 10:00 AM |
- Form Started By:
- Jo Thieling
- Started On:
- 02/21/2013 09:16 AM
- Final Approval Date:
- 02/21/2013