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• FALCON HEIGHTS CITY COUNCIL MINUTES -7- July 28, 2004 Proposed ordinance providing for the addition of rental storage space as an Interim Use in B-3 Zone (continued from July 14, 2004) Mr. Bertz said that education is in a revenue poor environment. The storage rental fees help pay for grounds maintenance and the annual payment TIES pays to the City for services in lieu of taxes. They might have to take revenue from school based product lines. There is limited traffic impact, limited hours, no additional load on City utilities, no external storage and no new construction. He is not aware of any complaints about this from neighbors. Recent discussions with a number of individuals have led them to believe they would have minimal impact on Hollywood Court, other B-3 businesses and the City in general. They are anon-profit, educational organization. They have worked hard to be good neighbors and property owners. They have helped Hollywood Court neighbors with traffic issues and have tried to maintain positive working relationships. Council member Kuettel said that TIES has been there for three years. She asked Mr. Bertz if TIES has been renting storage space for two years, and he said yes. Mr. Bertz said TIES has been there since 2001. Council member Kuettel said that he mentioned reconsideration of the • pilot (payment to City for services in lieu of taxes). TIES was able to do the pilot the first year when they didn't have the rental income. Mr. Bertz said that he believes the first year TIES paid full taxes. The second year they did the pilot they used the storage rental income and revenue from State Fair parking to cover the pilot and grounds' maintenance. Council member Lamb said that TIES is tax exempt, non-profit. Don't they jeopardize their status when they engage in side businesses like this? Mr. Bertz said this income is considered incidental to their primary revenue stream. Their auditors and accountants have no problem with this. They are not a 501(C)(3). They are anon-profit government organization, a school district. Council member Lamb said that TIES is clearly anon-profit organization. He is wondering what it does when it engages in for profit activities. For example, if another non-profit organization ran a gas station for profit, to him somehow that would not be right. It does make sense that there is some incidental number in here. He also fully acknowledges that it isn't the City's jurisdiction to regulate what their tax status is anyway. The question still remains, whether engaging in that activity or to what extent can you engage in that activity and still maintain your non-profit status? If you had 400 buildings could you rent out storage in 400 buildings and still be anon-profit organization? Mr. Bertz said it is directly related to the amount of revenue received from the leasing of those buildings. It is fairly low, $3,000 to $4,000. It has the potential, if he organizes things differently, to result in about $12,000 of revenue. Their revenue stream allows them in the neighborhood of about $25,000-$30,000 of unrelated business income. Council member Lamb said he wanted to clarify or expand something Mr. Bertz had said earlier. If the City would consider this, would Mr. Bertz be willing to work with staff, or whoever was able, to draw up a very specific list of conditions of what would be allowable and what would • not be? Mr. Bertz said absolutely.