Adopt Resolution #21-093 Approving Lease Agreement of 6781 and 6745 Highway 10 NW with Mille Lacs Motor Sports II

PURPOSE:
Approve the attached lease agreement with Mille Lacs Motor Sports II for use of city owned storage space located at 6745 Highway 10 and 6781 Highway 10.

BACKGROUND:
Mille Lacs Motor Sports II's primary location in Ramsey is 6781 Highway 10. Mille Lacs Motor Sports II has been leasing storage space from the city for several years.  Their existing lease will expire in May 31 2021. Mille Lacs Motor Sports II would like to extend their lease with the city by two years. Mille Lac Motor Sports II is a growing business and has expressed a willingness to remain and grow in Ramsey

The City is in the process of evaluating the condition of the building formerly occupied by Independent Auto (6745 Highway 10 NW).  In the event that this building is demolished along with the metal portion currently being leased, the lease allows the City to move the tenants to 6701 Highway 10 NW. 6701 Highway 10 NW is anticipated to be vacant in the Fall after the Public Works Campus is complete and equipment can be moved to that location.

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The attached lease agreement is generally consistent with the city's other lease agreements and policy for leasing city owned property. The attached lease agreement template was drafted by the City Attorney and reviewed by Staff and the City's property management company--Premier Commercial Properties. Specific notes below:

• Terms/ conditions and language has been updated to be consistent with recent lease agreements.
• Includes rent payments that are market rate. (3% increase from last lease with 3% inflator for year 2)
• Maintenance responsibilities are clearly outlined.
• No political signage allowed.
• Early termination clause included. Per the City's agreement with Premier Commercial Properties, a 5% commission payment will be made to Premier for this lease agreement.
• This lease agreement is being brought forward in conjunction with another lease agreement, for RM Golf Carts. Mille Lac Motor Sports II and RM Golf Carts worked together, as a group, with Staff and Premier Commercial Properties, to come up with this solution. This Council agenda also contains a lease agreement for RM Golf Carts for 6745 Hwy NW.

Lease Revenue. The revenue received from the lease is applied to City administrative costs, property maintenance and to reimburse the Right-of-Away Acquisition Loan Fund (RALF) for the cost of parcel acquisition.

Adopt Resolution #21-093 Approving Lease Agreement of 6781 and 6745 Hwy10 NW with Mille Lacs Motor Sports II; subject to final review by the City Attorney.

Motion to Adopt Resolution #21-093 Approving Lease Agreement of 6781 and 6745 Hwy10 NW with Mille Lacs Motor Sports II; subject to final review by the City Attorney.