2.2.
CC Work Session
- Meeting Date:
- 05/24/2016
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title
Policy for Leasing City Owned Land
Purpose/Background:
PURPOSE
Consider providing staff direction to amend the attached "Policy for Leasing City Owned Land." The need to address the leasing policy is a result of two attached pending requests (see attached).
BACKGROUND
The city adopted the attached lease policy in 2013. As the policy stands today, it does not provide clear direction for the attached two pending requests. The two primary issues are: 1) providing for the re-negotiation of rent in periods of economic hardship, and 2) a policy for land which is slated for acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study.
Consider providing staff direction to amend the attached "Policy for Leasing City Owned Land." The need to address the leasing policy is a result of two attached pending requests (see attached).
BACKGROUND
The city adopted the attached lease policy in 2013. As the policy stands today, it does not provide clear direction for the attached two pending requests. The two primary issues are: 1) providing for the re-negotiation of rent in periods of economic hardship, and 2) a policy for land which is slated for acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study.
Notification:
NA
Observations/Alternatives:
Below is an outline of the general policy direction staff is seeking:
(1) Would the Council consider an amendment to our lease policy to allow/ address, economic hardship requests? In other words, should staff include language in our policy that sets minimums/ maximums for the discounted amount and the term in which we are willing to consider rent reduction requests?
Consideration of policy for leasing City owned property to provide parameters for economic hardship requests. For example:
(1) Would the Council consider an amendment to our lease policy to allow/ address, economic hardship requests? In other words, should staff include language in our policy that sets minimums/ maximums for the discounted amount and the term in which we are willing to consider rent reduction requests?
Consideration of policy for leasing City owned property to provide parameters for economic hardship requests. For example:
Maximum economic hardship term, 10 total months
5 months with a max discount of 50%
5 months with a max discount of 25%
Past practice of the City has provided breaks in lease rates to other tenants in the past for various case-by-case reasons (Independent Auto, Crystal Pierce Marine, Northern Lights Children's Theater, etc.). One example is, we provided a step-up lease for Independent Auto: $100, $350, $650, $1612 over the course of six months.
The City's Real Estate manager, Premier Commercial Realty, indicated it is common for landlords to work with tenants on these types of requests (especially during the great recession). However, as the economy improves, concessions have become less prevalent. Staff is also seeking input from other cities to see if other public agencies have such rent reduction policies.
The attached pending request from Northern Lights Church prompted this policy reconsideration. Some unique factors of the pending request is that it is from a non-profit tenant (so, it is tax exempt) and it’s a City property purchased via the RALF program (so, rent proceeds must go to directly maintenance or back to the RALF program).(2) Would the Council consider an amendment to our lease policy to allow the leasing and temporary development of land which is slated for acquisition as identified in MNDOT's U.S. Highway 10 Access Planning Study? Consider the following policy issues:
- Allow, or don't allow, further expansion of temporary outside display/ sales area on city-owned land (pending negotiation of various details such as landscaping, fencing, pavement, etc.). Staff would like to confirm, that the Council is still generally comfortable with expansions of this type in land proposed to be acquired under the Highway 10 plan.
- Require, or don't require, a provision in our lease policy to require a deposit from the tenant, to cover the cost to remove all improvements they have made to a leased property. The purpose of this would be to eliminate the City's (or MnDOT's) future costs to complete improvements to U.S. Highway 10.
- Require, or don't require, strict adherence to conditions of lease that would regulate items on display in spaces that are designated as green space in city code. Perhaps provide for additional penalties/remedies beyond what normal City code enforcement would provide.
- Allow, or don't allow, tenants to have renewal options beyond the initial lease term (e.g., 5 year renewal options are common), or
- Require, or don't require, a sunset provision on all leases that are located on property between Armstrong Boulevard and Ramsey Boulevard (for example, 5 years out). Based on the Highway 10 Access Planning Study, plans for the Armstrong Interchange project, and concept plans for the Ramsey Boulevard project, these properties are called for full acquisition (and elimination of users). Staff believes leasing city-owned property in this specific area is a direct conflict to several of the city's other goals/ initiatives. If the Council does not address this item via a policy, staff believes requests for leasing in this area will continue to occur until the State is able to purchase all of the properties.
The pending M&G Trailer request, attached, prompted re-consideration of this policy. This particular request can also potentially open up discussion that could span beyond the city's lease policy, and, for example, get into broader corridor development and image issues. However, for the sake of simplicity, staff has limited the policy questions to those listed above..
Funding Source:
NA
Recommendation:
Please see observations section.
Action:
Please see observations section.
Attachments
- Policy for Leasing City Owned Property (2013)
- Northern Light Church Request
- MG Trailer Sales Request
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Jo Thieling | 05/05/2016 12:30 PM |
| Kurt Ulrich | Kurt Ulrich | 05/19/2016 05:25 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 05/03/2016 08:47 AM
- Final Approval Date:
- 05/19/2016