4.4.
CC Regular Session
- Meeting Date:
- 11/22/2016
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title
Approve Two-Year Lease Agreement Extension with EZ Auto
Purpose/Background:
PURPOSE
Consider renewing lease agreement, via a two-year amendment, with EZ Auto for leasing roughly 32,000 square feet of outside storage and display (used car sales).
BACKGROUND
This lease premises sits on two city-owned properties totaling roughly 62,000 square feet (GROSS), located on US Highway 10 near the Armstrong Interchange. The actual leasable space is roughly 32,000 square feet of paved parking surface.
EZ Auto began leasing this space in 2011, at which time they put in over $100,000 of improvements to meet city zoning regulations (curb/ gutter/ payment/ drainage/ etc.). The original lease agreement includes provisions for two built-in lease term extensions. Therefore, staff is working off the original lease agreement language, rather than creating a new lease altogether.
EZ Auto has been a good tenant, and a good corporate citizen for Ramsey. EZ Auto has no issues from a property management perspective (i.e. illegal usage of neighboring properties, code enforcement issues, late rent payments, political signs, excessive maintenance requests, etc.).
The only major important component to note with this lease amendment is a reduction in rent. EZ Auto recently challenged city staff on the lease rate they are paying, as they believed it to be too high. Staff did some research. As a result of input from the city's leased property manager (Premier Commercial Realty) and making sure we are in compliance with the city's Policy for Leasing City Owned land, staff is recommending EZ Auto's lease rate be adjusted. The new lease rate is $0.62 psf. Market is $0.50-$0.75. Most city owned leased properties are at $0.50-$0.55 psf. The new lease rate covers all city costs (including taxes). The lease rate will be adjusted in the second year by an increase of 2%. Please see attached breakdown for the math.
The attached lease amendment does include one small item, related to prohibiting political signage. Lastly, it should be noted, all other terms in the original lease agreement stand (including the City's ability to terminate early with a 1-year notice).
Consider renewing lease agreement, via a two-year amendment, with EZ Auto for leasing roughly 32,000 square feet of outside storage and display (used car sales).
BACKGROUND
This lease premises sits on two city-owned properties totaling roughly 62,000 square feet (GROSS), located on US Highway 10 near the Armstrong Interchange. The actual leasable space is roughly 32,000 square feet of paved parking surface.
EZ Auto began leasing this space in 2011, at which time they put in over $100,000 of improvements to meet city zoning regulations (curb/ gutter/ payment/ drainage/ etc.). The original lease agreement includes provisions for two built-in lease term extensions. Therefore, staff is working off the original lease agreement language, rather than creating a new lease altogether.
EZ Auto has been a good tenant, and a good corporate citizen for Ramsey. EZ Auto has no issues from a property management perspective (i.e. illegal usage of neighboring properties, code enforcement issues, late rent payments, political signs, excessive maintenance requests, etc.).
The only major important component to note with this lease amendment is a reduction in rent. EZ Auto recently challenged city staff on the lease rate they are paying, as they believed it to be too high. Staff did some research. As a result of input from the city's leased property manager (Premier Commercial Realty) and making sure we are in compliance with the city's Policy for Leasing City Owned land, staff is recommending EZ Auto's lease rate be adjusted. The new lease rate is $0.62 psf. Market is $0.50-$0.75. Most city owned leased properties are at $0.50-$0.55 psf. The new lease rate covers all city costs (including taxes). The lease rate will be adjusted in the second year by an increase of 2%. Please see attached breakdown for the math.
The attached lease amendment does include one small item, related to prohibiting political signage. Lastly, it should be noted, all other terms in the original lease agreement stand (including the City's ability to terminate early with a 1-year notice).
Observations/Alternatives:
NA
Funding Source:
NA
Recommendation:
NA
Action:
Motion to:
Approve the attached two-year lease agreement extension between the City of Ramsey and EZ Auto for use of roughly 32,000 square feet of paved parking surface for a used car sale operation.
Approve the attached two-year lease agreement extension between the City of Ramsey and EZ Auto for use of roughly 32,000 square feet of paved parking surface for a used car sale operation.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 11/17/2016 02:09 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 11/09/2016 11:16 AM
- Final Approval Date:
- 11/17/2016