- Meeting Date:
- 07/26/2016
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title
Purpose/Background:
PURPOSE
The purpose of this case is to consider approving the attached property management agreement with Premier Commercial Realty. The City entered into a month-to-month property management agreement with Premier Commercial Realty in May of 2013. Staff is proposing to add a new property to this agreement (M&G Trailer Sales) and increase Premier Commercial Realty's spending limit from $100 to $500 per incident.
BACKGROUND
In comparison to most cities, the City of Ramsey owns a fairly large inventory of land. Said inventory of land can be divided into three buckets (1) land available for development and currently listed for sale, (2) public uses, and (3) property purchased for right-of-way to support future road improvements. The third bucket is the subject of this case.
The City owns 15 properties located along U.S. Highway 10. The City purchased the majority of these properties through a program known as the right-of-way acquisition loan fund (RALF). This program is administered by the Metropolitan Council, and is funded by the State of Minnesota. The City purchased these properties to help prepare for future improvements to U.S. Highway 10. As we know, a large time gap can exist between when a major road improvement project is planned and when it is actually funded/ constructed. As a result, the city has an opportunity to lease back RALF properties purchased for U.S. Highway 10 improvements until said properties are actually needed.
In a typical year, the City of Ramsey has 8-15 active leases in play. The majority of leases are located on RALF properties (however, it is not uncommon for the City to have 2-5 scattered site leases in play as well). The city entered into a contract with Premier Commercial Realty in 2013 to help assist staff in managing lease properties. The 2013 management agreement included three city-owned properties (6701, 6745, and 6811 Hwy 10). Staff is proposing 7443 Hwy 10 be added to the new contract. The City only has Premier Commercial Realty manage properties (lease agreements) that have a history of consuming a large amount of staff time.
Notification:
Observations/Alternatives:
Lease contracts create work for staff in three general areas (below). Premier Commercial Realty provides major relief to City staff in areas 1 and 2.
If we have a tenant that consistently pays on time, this item is never an issue for staff. However, if we have a tenant that routinely pays late (or close to late), or pays less than what is owed, or pays multiple payments, or bounces checks, or pre-dates checks, or plays games, this can be a lot of work. Staff needs to constantly follow-up and monitor this type of tenant. Having Premier Commercial Realty on board is a major relief to the City's finance department--when considering collection of payments.
(2) routine maintenance and property upkeep (minor issues)
If we have a tenant that takes good care of their property, and follows through on their lease obligations, this item is never an issue. If we have a tenant that is consistently violating city code or property upkeep provisions in the lease agreement, it can be a lot of work for staff--to repeatedly follow-up and closely monitor a property. Additionally, there are a lot of naturally occurring minor maintenance and property upkeep items (or disputes) that arise when owning a property. Having Premier Commercial Realty on board is a major relief to the City's public works department--when considering minor property upkeep.
(3) major/ high level issues
It is not uncommon for larger, higher-level, odd requests/ demands/ issues to arise from City leased properties. In many cases, these items are not "normal" and cannot be simply addressed by the City's Policy for Leasing City Owned Property or by simply hiring a property manager. Many times, these issues get intertwined with the City's zoning code, MnDOT, and other entities. Many times, these issues involve new contracts/ contract amendments, or new policy discussions for the Council. Many times, these items include major contract disputes/ legal items, and large ticket priced items. Having Premier Commercial Realty on board is a minor relief to the City's administration department--when major/ high-level issues.
ALTERNATIVES
(1) approve the attached agreement
(2) amend the attached agreement
(3) obtain multiple proposals, from various professional services firms
(4) terminate agreement, do not utilize a property manager
Funding Source:
Recommendation:
- Addition of 7443 Highway 10
- Increased spending limit for Premier Commercial Realty from $100 to $500
- Minor house keeping items
Action:
Approve the attached Rental Property Management Agreement with Premier Commercial Realty.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Diana Lund | Diana Lund | 07/07/2016 11:24 AM |
| Brian Hagen | Tim Gladhill | 07/21/2016 09:40 AM |
| Kurt Ulrich | Jo Thieling | 07/21/2016 10:46 AM |
- Form Started By:
- Patrick Brama
- Started On:
- 06/23/2016 12:18 PM
- Final Approval Date:
- 07/21/2016