2.1 Proposed Lease Agreement
M&G Trailer Sales and Service approached City Staff in the fall of 2013 regarding a potential Lease Agreement to utilize City owned land for the purpose of outside sales/display of product..  Over the past six months, M&G Trailer Sales has worked with City Staff to negotiate lease terms and conditions.  Additionally, M&G Trailer Sales was notified the proposed use of City owned land would require an "Interim Use Permit" (IUP).  See section 2.4 below for IUP details.

In summary, the proposed lease follows the City's 2013 adopted "Policy for Leasing City Owned Property."  The proposed lease is market rate, does cover ALL City expenses, does incorporate early termination language (if needed for ROW), and has been reviewed by several City Staff--including the City Attorney.  For a detailed overview of the proposed lease, please see the "Observations" section of this case.

2.2 Subject Property
3.37 acre City owned parcel addressed 7443 U.S. Highway 10.  The Subject Property is located on the north side of highway 10, directly south of the Ramsey Municipal Center and directly east of M&G Trailer Sales (7575 U.S. Highway 10).  The proposed lease calls for the utilization of 40,000 square feet of space located adjacent to M&G Trailer Sales; which, is about 27% of the Subject Property.  The City acquired the Subject Property in 2008 by utilizing the State's RALF Program; see section 2.3 below for details.

2.3 RALF Program
The City of Ramsey owns an inventory of land located along the north side of U.S. Highway 10 for the purpose of future road right-of-way.  The majority of City owned land located along the north side of U.S. Highway 10 was acquired using funding from a State program known as the "Revolving Acquisition Loan Fund" (RALF). 

Once a property is acquired via the State RALF Program, the relevant local municipality becomes the property owner; and, the respective property becomes tax exempt.  Commonly, a significant time period exists from when a property is originally purchased to when a property is actually utilized for road right-of-way.  As a result, local municipalities can lose a portion of tax capacity for an indefinite period of time.

In an effort to (A) allow the private sector to continue utilizing valuable RALF Program acquired land for business purposes; and, (B) provide a remedy for the loss of property tax capacity to local municipalities, the State allows City's to lease RALF Program acquired properties back to the private sector.

2.4 Interim Use Permit (IUP)
M&G Trailer Sales has requested to utilize the Subject Property for outside sales/display of product..  City Code requires outside sales and display areas to be improved to a permanent impervious surface (asphalt, concrete, etc.).  Due to the uncertainty of future U.S Highway 10 improvements, M&G Sales has requested the use of a gravel surface. 

Recently, the City Council approved an ordinance allowing for certain properties located along U.S. Highway to utilize gravel surfaces via an IUP (City Ordinance 13-16 which amends section 117-356 of City Code, allowing for gravel surfaces via an IUP).  M&G Trailer Sales has completed and submitted an IUP application for the use of a gravel surface on the Subject Property.  An IUP addresses various land use regulations (e.g. required screening, storm water, setbacks, etc.).  This application was reviewed and recommended for approval by the Planning Commission on April 3. 

Said IUP application is a separate Council case, and is included on the consent agenda of this meeting.  IMPORTANT NOTE: if the City Council approves the consent agenda, they are not liable/obligated to approve this case (lease agreement).  The proposed IUP requires approval of a lease agreement by the City Council in order to become valid.  If the City Council does not approve the proposed lease agreement, the IUP approved on consent agenda becomes void.