Consider Policy Direction for Various Uses on Leased City Owned Land Located on U.S. Highway 10

PURPOSE
Consider policy direction for "outside sales/ outside storage/ outside display" uses on leased City owned land located on U.S. Highway 10.

BACKGROUND (why is this discussion coming forward now?)
This discussion is before the Council as a result of a pending request for the expansion of an existing lease agreement between the City of Ramsey and M&G Trailer Sales.  Currently, M&G Trailer Sales is leasing about 40,000 square feet of City owned land for the purpose of outside display/ storage/ sales.  This lease agreement is set to terminate on April 22, 2019.  Attached is the lease agreement.  M&G Trailer Sales would like to expand (amend) their current lease agreement to include approximately double the size of their leasable space (about 85,000 square feet total).

BACKGROUND (why does the City own so much land along Highway 10?)
As part of pending/ planned improvements for U.S. Highway 10/ U.S. Highway 169 in Ramsey, the City (or MnDOT) needs to secure property for future right-of-way (ROW).  A commonly utilized method to secure ROW is a MnDOT funded, Metropolitan Council administered, program known as the "right-of-way acquisition loan fund" or RALF.   The City has purchased fifteen "RALF" properties along U.S. Highway 10 to date, and additional purchases will likely be made over time in order to facilitate the planned Highway 10 upgrades.  In many cases, the City has leased back City owned RALF properties to the private sector for commercial use.  The benefit of leasing back properties to the private sector is property taxes are generated, and the City retains active local businesses.

BACKGROUND (why does the M&G request result in a policy discussion at this time?)
The City Council adopted a new strategic plan in 2015.  This plan included a "strategic initiative" to: improve the image of key corridors such as U.S. Highway 10; further more, the plan included a "tactic" to: proactively implement corridor improvements through public investment and code compliance initiatives. Staff anticipates this initiative to commence later this fall. The policy discussion regarding corridor improvement will likely continue into mid-2016.

Additionally, the City's development team consistently receives concerns and comments from various parties related to the image and reputation of the City of Ramsey (in terms of development).  The viewshed of U.S. Highway 10 in Ramsey is perceived to be generally negative, and often may be the only portion of Ramsey that people observe.

As a result of the two items above, Staff has responded to M&G Trailer Sales request by indicating a policy discussion was needed before Staff would be comfortable bringing forward a lease amendment.

ALTERNATIVES

1.  Invite M&G Trailer Sales to bring forward a lease amendment
The Council could provide this direction knowing a larger policy discussion is needed in the future.  And, make this an isolated decision versus comprehensive policy direction.  However, this decision will result in the expanded use into early 2019.  And, Staff would expect potential future requests (from other businesses), to site this case (from an equity perspective).  Attached are reference maps of various City owned properties that either have leases today, or could in the future. The lease would result in permanent improvements.

M&G has indicated a willingness to pave or improve their leased area, and provide the City with an escrow to remove at the time they vacate the property.  M&G is a thriving/ growing Ramsey business.  They have a good reputation in the community (for their customer service and products).  They expect their growth to continue--they are the largest trailer dealership in the State (based on volume of sales).

NOTE: the proposed lease will require land use/ zoning review.  Staff anticipates the need to address screening, surfacing, storm water, emergency access, and other items. If the request comes forward for an expansion utilizing a gravel parking surface, an amendment to the existing Interim Use Permit will be necessary. The request will also require the approval of the Lower Rum River Watershed Management Organization, and requirements for stormwater management.

2.  Do not invite M&G Trailer Sales to bring forward a lease amendment
The Council could utilize this request as the "starting point" for new policy direction to help improve the image/appearance of the Highway 10 corridor.  Staff anticipates similar requests to periodically come forward for the foreseeable future (about 1x per year).

3.  Request additional information/ additional discussion before this request is addressed
The Council may not be comfortable providing direction now, and may need additional information.  It should be noted, this business has indicated they would like to move forward with a lease amendment ASAP. They are also in the process of securing an alternative permanent, long term location, in the City of Ramsey.  They would like to use this lease to fill the gap, from now until they can secure their permanent location.

What are the benefits/ drawbacks of expanding leasable space on City owned property for outside sales/ display?
(+) tax exempt property begins paying property taxes
(+) job growth likely
(+) supporting a local business with a positive reputation, and a desire to secure a permanent location in Ramsey
(+) M&G is a community supporter (Happy Days+)
(-) increases safety issues along U.S. Highway 10, conflicts with the U.S. Highway 10 Access Planning Study (i.e. elimination of accesses)
(-) doesn't address image/ reputation concerns for City of Ramsey
(-) potentially conflicts with City strategic plan
(-) potentially extends unintentional precedence for use of City owned land

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Motion to:
1.  Invite M&G Trailer Sales to bring forward a lease amendment
2.  Not invite M&G Trailer Sales to bring forward a lease amendment
3.  Request additional information/ additional discussion before this request is addressed