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Item No: 7F Meeting Date: Sept 12, 2016 Type of Business: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, City Administrator Item Title/Subject: Resolution 8617, Authorizing the Sending of a Notice of Termination of Lease to Creative Kids Academy - Mounds View, Inc. Introduction: A few times over the last year or so, the YMCA has expressed an interest in becoming the child-care provider at the Mounds View Community Center. The current provider, Creative Kids Academy, has a lease with the City that expires on July 31, 2018. As discussed at the August 1, 2016, work session, the August 22, 2016, Council meeting, and the September 6, 2016, work session, the lease allows for the option of an early termination by providing the tenant with a one-year notice in writing. Representatives from the YMCA and Creative Kids Academy attended the August 22 and September 6 meetings, providing feedback and answering questions. Discussion: When the City purchased the old Bel Rae Ballroom in 1996 and redeveloped the site as the Community Center, one of the services deemed important to include was a child care facility, based on community feedback. Children’s Home Society (CHS), a non-profit entity, was arranged to be the service provider and was the first occupant of the building before the rest of the building was completed. After a few years, CHS closed its operation and the City sought proposals from area child care providers to re-occupy the space, since it had been designed with child care services in mind. In 2001, a new lease with the original owners of Creative Kids was executed. The current tenant, Creative Kids Academy - Mounds View, Inc., has been in the facility since 2009 when it took over the lease from the previous tenant of the same name. The current tenant has been a stable fixture in the building, and the City has had no reason to explore other child care tenant options until the YMCA approached the City with its proposal and asked the Council to give it some consideration. The YMCA has reviewed the current lease and believes that it would be able to provide the same or greater level of child care service in the leased space. If the YMCA were the child care provider, representatives indicate that it would be able maximize the use of the child care space which is generally unused after-hours and on weekends. The YMCA would be positioned to utilize this space in conjunction with other programs, making the space more efficient and more cost-effective to operate. In addition, the YMCA proposes to use their own custodial services at the same cost we are paying our current vendor, thus eliminating the need to have multiple cleaning venders in the building and freeing up city staff to address other maintenance and exterior facility