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<br />Item No: 04A <br />Meeting Date: 1/30/06 <br /> Type of Business: WS <br />City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Kurt Ulrich, City Administrator <br />Item Title/Subject: Consider Banquet Facility Interim Leases <br /> <br /> <br />Background <br />The City recently received notice from Canyon Catering that, effective April 1, 2006, that <br />they will no longer provide services under the current contract (see attached letter: Roy <br />Dodds 1/19/06). In response to this anticipated change, the City Council recently <br />appointed a Mounds View Community Center task Force to help provide direction to the <br />future course of this facility. They are scheduled to report back to the Council on March <br />6, 2006. <br /> <br />The Canyon Catering contract was originally negotiated at a rent of $5,000 per month <br />and was to provide $60,000 per year of lease revenue to the City. The breakeven point <br />for MVCC operations is approximately $58,000 per year in revenue. Canyon Catering <br />currently operates the facility without rent due to the City Hall temporary relocation. They <br />continue to be responsible for paying taxes of about $1,000 a month for the facility. <br /> <br />Discussion <br />With the pending termination date of April 1st approaching, staff is recommending that <br />work begins to secure temporary short-term (i.e., 30 day) lease arrangements with In the <br />Word Church and Canyon Catering to continue operations and to generate revenue for <br />the City until such time a long-term decision is made by the City Council. <br /> <br />The City would attempt to generate lease revenue to cover the entire expenditures of <br />$58,000 needed to make that section of the facility generate a positive cash flow, <br />however, if the entire amount was not achievable, the goal would be to off-set building <br />expenditures as much as possible. <br /> <br />Recommendation <br />Staff recommends that the City Council authorize staff to begin negotiation with Canyon <br />Catering and In the Word Church for short-term lease agreements to cover the period <br />until long term plans for the facility have been formulized. <br /> <br /> <br />Respectfully submitted, <br /> <br />________________________ <br />Kurt Ulrich <br />