06-09-14 Council Packet - Laserfiche WebLink

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CITY COUNCIL AGENDA ITEM 3B STAFF ORIGINATOR: Jeff Karlson MEETING DATE: June 9, 2014 TOPIC: Lease Agreement with New Creations Child Care VOTE REQUIRED: 3/5 INTRODUCTION The Council is being asked to approve a lease agreement with New Creations Child Care and Learning Center for space in the city center formerly occupied by ISD No. 12 for the early childhood learning center. BACKGROUND Independent School District No. 12 entered into a lease agreement in 1998 with the City of Lino Lakes when construction of the city hall complex was completed in that same year. The leased premises consisted of approximately 10,900 square feet. The original term of the lease was from November 1, 1998 to June 30, 2009. The school district renewed the lease for an additional three years before terminating it June 2012. Subsequently, the City contracted Kevin Peck of KW Commercial to market the vacated premises. After nearly two years of deliberating with potential tenants, staff has come to terms with New Creations Child Care and Learning Center. New Creations currently operates two other day care centers in the area. The term of the lease would be July 1, 2014 to June 30, 2019. The annual base rent for the leased premises would be as follows: Months Square Feet Annual Net Rent Per Square Foot Total Net Rent Per Period Monthly Net Rent 1 to 3 5,388 $0.00 $0.00 $0.00 4 to 6 5,388 $5.94 $8,000.00 $2,666.67 7 to 9 6,362 $6.29 $10,000.00 $3,333.33 10 to 12 7,287 $7.68 $14,000.00 $4,666.67 13 to 24 8,327 $7.92 $70,040.00 $5,836.67 25 to 36 8,327 $8.15 $72,141.20 $6,011.77 47 to 48 8,327 $8.40 $74,305.44 $6,192.12 49 to 60 8,327 $8.65 $76,534.60 $6,377.88 The tenant would be charged for annual maintenance costs and for a percentage of the utility bills, which includes gas, electric, sewer and water, and garbage. Since this is a for-profit