7.6.
CC Regular Session
- Meeting Date:
- 06/28/2016
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title
Policy for Leasing City Owned Land
Purpose/Background:
PURPOSE
Amend the attached "Policy for Leasing City Owned Land."
BACKGROUND
The City adopted the attached lease policy in 2013. As the policy stands today, it does not provide clear direction for the attached two pending requests. The two primary issues are: (1) providing for the re-negotiation of rent rates in periods of economic hardship, and (2) a policy for land which is slated for full acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study.
Typically, the City has 10-15 active leases in play. Leases are managed and negotiated by the City's Administration Department. The City utilizes Marty Fisher, of Premier Commercial Realty, to provide management support on four leases.
Amend the attached "Policy for Leasing City Owned Land."
NOTE: the need to address the City's leasing policy is the direct result of the two attached tenant requests. This case was first reviewed by the Council at work session on May 28, 2016. Attached are the meeting minutes. The Northern Light Church lease request will be reviewed by the Council in the next case. The M&G Trailer Sales lease request will be reviewed in the future, when M&G Trailer Sales is ready submit proper land use applications.
BACKGROUND
The City adopted the attached lease policy in 2013. As the policy stands today, it does not provide clear direction for the attached two pending requests. The two primary issues are: (1) providing for the re-negotiation of rent rates in periods of economic hardship, and (2) a policy for land which is slated for full acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study.
Typically, the City has 10-15 active leases in play. Leases are managed and negotiated by the City's Administration Department. The City utilizes Marty Fisher, of Premier Commercial Realty, to provide management support on four leases.
Notification:
NA
Observations/Alternatives:
Below is an outline of the general policy discussion that occurred on 05/24/2016, general direction provided by the Council, and a summary of the proposed policy amendments.
ITEM #1
ITEM #1
ISSUE: would the Council consider an amendment to our lease policy to allow/ address, economic hardship requests? In other words, should staff include language in our policy that sets minimums/ maximums for the discounted amount and the term in which we are willing to consider rent reduction requests?
DIRECTION: the Council was generally okay with including a provision in our policy to allow for temporary reduction in rent. The policy should (1) not favor/ discriminate between different types of organizations, (2) should include underwriting requirements similar to the City's business subsidy policy, (3) should include a term that is more in-line with standard business practices (less than what was originally requested by Northern Light Church), and (4) should be supported by Premier Commercial Realty.
AMENDMENT: the attach policy has been amended to include a provision allowing for a temporary reduction in rent due to an economic hardship. The maximum term is 6 months (3 months at 50% and 3 months at 75%)--which is less than what was originally requested by Northern Light Church (10 months). Tenant must display past two years financial statements, and must be underwritten by third party professional. Tenant must display a plan for recovering from their economic hardship.
AMENDMENT: the attach policy has been amended to include a provision allowing for a temporary reduction in rent due to an economic hardship. The maximum term is 6 months (3 months at 50% and 3 months at 75%)--which is less than what was originally requested by Northern Light Church (10 months). Tenant must display past two years financial statements, and must be underwritten by third party professional. Tenant must display a plan for recovering from their economic hardship.
ITEM #2
ISSUE: would the Council consider an amendment to our lease policy to allow the leasing and temporary development of land which is slated for acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study?
DIRECTION: the Council was generally okay with allowing the continuation, and expansion of, leasing city owned property located along Highway 10, needed for full acquisition based on the U.S. Highway 10 Access Planning Study. Regarding the policy, the Council wanted to make sure (1) the city was able to terminate leases in a reasonable amount of time when properties are needed in the future, (2) tenants are complying with city zoning regulations -- specifically parking on unimproved surfaces/ unauthorized areas (3) tenants don't use new/ former U.S. Highway 10 accesses, and (3) tenants provide the city with a deposit covering the cost to demolish tenant improvements. The Council was not interested in requiring additional screening or beatification of leased properties (above and beyond the zoning code).
AMENDMENT: the attach policy already includes a provision regarding early termination of leases, if properties are needed for U.S. Highway 10 Improvements. The attached policy has been amended to include a provisions to (1) not allow parking on unimproved surfaces/ unauthorized areas, (2) requiring a deposit, to cover the cost of removing all tenant improvements, and (3) not allow businesses to utilize new (or previous) access points along U.S. Highway 10.
DIRECTION: the Council was generally okay with allowing the continuation, and expansion of, leasing city owned property located along Highway 10, needed for full acquisition based on the U.S. Highway 10 Access Planning Study. Regarding the policy, the Council wanted to make sure (1) the city was able to terminate leases in a reasonable amount of time when properties are needed in the future, (2) tenants are complying with city zoning regulations -- specifically parking on unimproved surfaces/ unauthorized areas (3) tenants don't use new/ former U.S. Highway 10 accesses, and (3) tenants provide the city with a deposit covering the cost to demolish tenant improvements. The Council was not interested in requiring additional screening or beatification of leased properties (above and beyond the zoning code).
AMENDMENT: the attach policy already includes a provision regarding early termination of leases, if properties are needed for U.S. Highway 10 Improvements. The attached policy has been amended to include a provisions to (1) not allow parking on unimproved surfaces/ unauthorized areas, (2) requiring a deposit, to cover the cost of removing all tenant improvements, and (3) not allow businesses to utilize new (or previous) access points along U.S. Highway 10.
Funding Source:
NA
Recommendation:
Approve the attached policy amendments.
Action:
Motion to:
Approve the attached amended and restated Policy for Leasing City Owned Property.
Approve the attached amended and restated Policy for Leasing City Owned Property.
Attachments
- Amended City of Ramsey Lease Policy (2016)
- Policy for Leasing City Owned Property (2013)
- 05242016 CCWS Minutes
- MG Trailer Sales Request
- Northern Light Church Request
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 06/23/2016 11:31 AM |
- Form Started By:
- Patrick Brama
- Started On:
- 06/20/2016 09:33 AM
- Final Approval Date:
- 06/23/2016