Adopt Resolution #20-081 Approval of Lease of 6701 Hwy 10 NW to Mille Lacs Motor Sports II (Power Lodge)

Mille Lacs Motor Sports (Power Lodge) has requested use of an area behind the building at 6701 Hwy 10 for temporary storage of boats and inventory for its business for 60 days.  The request stems from impacts of COVID-19 and its customers not picking up boats during the usual time frames due to a number of other factors.  This is a temporary request for a temporary issue.  Staff has worked with the City Attorney,  Premier Commercial Properties and Mille Lacs Motor Sports to draft a lease agreement for a 60 period.  The market rate for this lease would be $420.00 for the area and time period needed.  Due to the temporary nature of this lease, current COVID-19 impacts, the fact that this company currently has a lease with the City and is in good standing, Staff is recommending that the $420.00 cost of the lease to be refundable if the tenant abides by the terms of the lease.  Due to the unique nature of COVID-19 and ts impacts to businesses in Ramsey, Staff is comfortable granting this request for the lease to be rent free. The rent payment can be seen as a security deposit to ensure the site is restored to original condition. 

N/A

Observations:

The Terms of the lease are straight forward. Here are some of the specifics:

1. Lease.  Landlord leases to Tenant the area outlined in Exhibit A along the rear property line of the property located at 6701 Highway 10 (PID 34-32-25-12-0009) (the Leased Area).
2. Term.  The term of this Lease is from April 29, 2020, through June 30, 2020, unless extended by written agreement executed by both parties.
3. Use.  The Leased Area may only be used for storage of Tenant’s inventory and/or customer’s boats.  The Leased Area may not be used for employee parking or any other use without Landlord’s written permission.  No signage shall be installed by Tenant in or on the Leased Area.  Tenant shall conduct its business and control its agents, employees, invitees and visitors in such a manner as not to create waste, odors, nuisance, or interfere with, annoy or disturb any other tenant of Landlord or Landlord’s employees and agents in its operation of the 6701 Highway 10 property.  Tenant acknowledges that the Leased Area is not fenced except along the rear of the property or otherwise secured in any manner and Landlord makes no representations as to the security of the Leased Area.
4. Access.  To the extent reasonably practicable, the Leased Area shall be accessed by Tenant through the gate on the east fence of Outdoor Storage Area D located at the rear of 6745 Highway 10.  A 15-foot-wide through lane between the rear of the building at 6701 Highway 10 and the Leased Area must be maintained at all times for emergency vehicle access and for City access to the rear of the 6701 building.
5. Rent.  A lump sum fee of $420.00 shall be paid by Tenant to Landlord upon execution of this Lease in full payment of rent for the full term of the Lease.  Landlord shall refund the lump sum fee if Tenant is completely vacated from the Leased Area by the end of business on June 30, 2020.  The Leased Area must be clear of all inventory, customers boats and refuse.  If the Leased Area is not fully vacated as provided herein, the lump sum fee will not be refunded.
6. Maintenance and Improvements.  Tenant is solely responsible for routine maintenance of the Leased Area during the term of the Lease, including trash removal.  Tenant shall not damage the existing parking surface, normal wear and tear excepted.  Any damage to the Leased Area by Tenant, its employees, agents, customers or guests shall be repaired by Tenant at its sole cost.  In the event Tenant does not complete said repairs, Landlord may do so and invoice the cost of such repairs to Tenant plus 15% for overhead incurred by Landlord.  The Leased Area is provided “as is” and Landlord is not obligated to make any improvements to the existing property as part of this Lease.  Tenant shall not make any improvements to the Leased Area without Landlord’s written permission.
7. Assignment or subletting.  Tenant may not assign, transfer, mortgage or encumber this Lease, and may not sublet, rent or permit occupancy or use of the Leased Area, or any part thereof, by any third party.
8. Entry by Landlord.  Landlord, its employees, agents or representatives may enter the Leased Area at all reasonable hours to inspect or make repairs.  Tenant waives any claim for damages or for any injury or inconvenience or for interference with Tenant’s business, and any other loss occasioned thereby.
9. Hold Harmless and Liability Insurance.  Except in the case of the negligence of Landlord, its agents or its employees, Tenant agrees to indemnify, save, hold harmless and defend Landlord against all claims, losses or liabilities for injury or death to any person or for damage to or loss of use of any property arising or resulting from the occupancy or use by Tenant of the Leased Area.  Landlord shall not be liable to Tenant, its agents, employees, representatives, customers or invitees for any personal injury, death or damage to property caused by theft, burglary, fire or for any other cause occurring on or about the Leased Area.  All property kept, stored or maintained within the Leased Area shall be so kept, stored or maintained at the sole risk of the Tenant.  Tenant further agrees to defend and indemnify Landlord from and against any and all claims arising from any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease.  Further, in no event shall Landlord be liable for damages caused by Tenant or Tenant’s employees or agents.  The provisions of this Paragraph shall survive the expiration or termination of this Lease with respect to any damage, injury, death, breach or default occurring prior to such expiration or termination.
10. During the Lease Term and any extension thereof, Tenant shall at all times have in full force and effect a policy of general public liability insurance in the amount of the greater of $2,000,000.00 or the maximum liability for tort liability pursuant to Minnesota Statutes Section 466.04 and any amendments thereto, which insurance shall insure Landlord and Tenant against liability for acts of Landlord and Tenant.

Alternatives:

1. Approve lease, as presented
2. Approve lease, with modifications
3. Not approve the lease

N/A. 

The EDA reviewed the terms of this lease at its April 23, 2020 Meeting and unanimously recommend approval.

Motion to adopt Resolution #20-081 approval of Lease of 6701 Hwy 10 NW to Mille Lacs Motor Sports II.