Adopt Resolution #23-080 Approving Lease Agreement with RM Golf Carts for 7039 Highway 10

Purpose:
Approve Lease Agreement with RM Golf Carts, Inc. for 7039 Highway 10

Background:
The City has leased 7039 Highway 10 NW to RM Golf Carts, Inc. since 2011.  The Current Lease Agreement is set to expire in June of 2023.  RM Golf Carts has made a request for the City to extend their lease agreement by another two year term. The building is in good condition.

This property was purchased using RALF funds to secure land for the future improvements to Hwy 10.  All rent proceeds are applied city costs for annual property management, property taxes and property maintenance.  Any remaining rent is returned to the RALF program. 
 

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Observations:

Attached to this case is an updated lease agreement.  Here are the major terms:

• Rent is considered near market with 5% increases over future years included (See below)
• Rent covers taxes and base rent (tenant responsible for all other costs)
• Tenant responsible for maintenance / operations costs
• Clause included not allowing for political signs
• Clause included to cover major "damage / destruction" situations (i.e. the City won't be liable)
• Tenant required to have insurance
• Use: golf carts / recreation vehicles sales/ temporary storage/ display
• Clause to allow early termination included

$2,506.35	per month on June 1, 2023 and a like amount on each first day of the month thereafter through May 1, 2024; and
$2,631.66	per month on June 1, 2024 and a like amount on each first day of the month thereafter through May 1, 2025; and

The attached lease agreement template has been drafted/reviewed by the City Attorney.  To date, RM Golf Carts has been a good tenant (maintains property, always pays rent on time).  This lease allows property taxes to be generated on this property and retains a Ramsey business.  The tenant has expressed an interest to purchase this property if it ever becomes available for sale.

Alternatives:

1. Adopt Resolution #23-080 Approving Lease Agreement with RM Golf Carts for 7039 Highway 10 (as presented); subject to City Attorney review
2. Adopt Resolution #23-080 Approving Lease Agreement with RM Golf Carts for 7039 Highway 10 (with changes); subject to City Attorney review
3. Something else

This action is covered under normal staff duties and rent revenue received from RALF held properties.

Staff recommends Adopt Resolution #23-080 Approving Lease Agreement with RM Golf Carts for 7039 Highway 10 (as presented); subject to City Attorney review

Motion to Adopt Resolution #23-080 Approving Lease Agreement with RM Golf Carts for 7039 Highway 10 (as presented); subject to City Attorney review