Agenda Packets - 2007/08/27 - Laserfiche WebLink

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Item No: 7E Meeting Date: August 27, 2007 Type of Business: CB City of Mounds View Staff Report To: Honorable Mayor and City Council From: Kurt Ulrich, City Administrator Item Title/Subject: Resolution 7144 Approving a Revised Lease Agreement with the Twin Cities North Chamber of Commerce Background: The lease agreement with the Twin Cities North Chamber originally was negotiated in 2004, with a term running from January 1, 2004 to January 1, 2009. Because the Mermaid Entertainment and Event Center controlled the space at that time, under a separate lease agreement with the City, the Twin Cities North Chamber lease was done as a tri-party lease between the City, the Chamber, and the Mermaid. When the Mermaid vacated the property the lease was assigned to the City. The Chamber recently ceased its charitable gambling (e.g., pull-tab) operations and cut related staff as of July 31, 2007, and has asked that the City consider revising the current lease rent to eliminate cost of the Gambling Manager’ office. Discussion: The Chamber currently leases approximately 1,263 square feet of office space, including the gaming office.. After the gaming space is removed, the Chamber will continue to lease about 1,000 square feet from the City. The Chamber has been an excellent tenant and the Chamber’s presence in the community provides a strong connection to the north metro business community. The current monthly rent is based upon the following schedule from the lease agreement: Years 2004 – 2005: Gross monthly Rent shall be $1,160.00 Years 2006 – 2008: Gross monthly Rent shall be $1,210.00 The City currently has no annual per cent increase with the Chamber as we do with the other major building tenant, Creative Kids Day Care. The Chamber has been allocating $363 of their $1210/month rent for that office for the gaming operation. With the elimination of the gaming operation staff and revenue, the additional office is no longer needed and the revenue to support the space is gone. The Chamber has agreed to a 12-month extension of the existing lease covering the period Jan. 1, 2009-Dec. 31, 2009. The Chamber has also agreed to share the $75/month cost of the Community Center broadband connection. City staff is recommending that the Chamber pay $860 ($1210 - $350) + $37.50 for broadband from 9/1/07 to 12/31/07, then a 3% increase of the base rent on 1/1/08 and an extension of one additional year with a 3% increase on 1/1/09, plus 50% cost sharing on the broadband. This rent structure would then be more inline with our other tenants by providing for an annual inflationary adjustment.