Adopt Resolution #20-232 Approving Lease Agreement for 6701 Hwy 10 NW: Case of Connections Church
(Portions of the meeting may be closed to the public)

Note: this case is listed with the potential to discuss in closed session. The City Council can request that this case be pulled for discussion and moved into closed session if so desire. However, if the City Council is comfortable moving forward without discussion, this can remain on Consent Agenda. 

Connections Church has presented a Letter of Intent to lease the west 4,820 square feet of 6701 Hwy 10 NW.  Staff, along with Premier Commercial Properties (property manager), has been negotiating with the proposed tenant over the past month.  Connections Church previously leased space in Ramsey Elementary but is no longer allowed to lease there due to the Covid-19 Pandemic.  They currently are meeting outdoors at Elmcrest Park Sunday mornings and are in need of another location before the weather restricts the ability to hold services outdoors.  Connections Church is also in the process of purchasing land on Highway 10 to build their future church.  The west 4,820 square feet of 6701 is currently vacant and has been used sporadically by Youth First over the summer. 

This space was previously occupied by Northern Light Church.  During the last lease period from 11/1/18-10/31/19  Northern Light Church paid $2,962 / month and was also responsible for the Snow Plowing and clearance of snow and ice from the sidewalks.

N/A

The Letter of Intent and offer of $2,500/month by Connections Church is the offer that is on the table for consideration.  Staff and the property manager have tried to negotiate a lease that is closer to market rate, and even to the reduced rate of $2,962 / month that Northern Light Church paid in 2019 but were unable to do so.  Northern Lights Church did pay for snow plowing / sidewalk clearance and the tenant has now agreed to pay its pro-rata share as part of this lease.  Even though the rate of $2,500 / month is significantly below market, there is value to having a tenant in the building and maintaining it. Based on the current office market, the short term nature of the lease and the value of having a tenant in the building, Staff and the Property Manager support accepting the offer with the key terms below.

Key Lease Terms
Location: 6701 Hwy 10 (West 4,820 SF)
Lease Duration: November 1, 2020 - October 31, 2021
Lease Rate: $2,500 / month ($6.22 / SF)
Utilities: Tenant paid
Snow Plowing / Sidewalks: Tenant paid (Tenant has subsequently agreed to paying "pro-rata" share)

Alternatives:

1. Approve the Lease as presented; subject to City Attorney review.
2. Direct staff to continue negotiations with proposed tenant.
3. Do not approve the lease.

This item is being handled under normal Staff duties

The EDA reviewed this item on October 8, 2020 and recommended approval of the lease as presented; subject to City Attorney review 

Motion to adopt Resolution #20-232 approving Lease Agreement for 6701 Highway 10 NW: Case of Connections Church; subject to City Attorney review.