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Mounds View City Council March 27, 2000
<br />Regular Meeting Page 12
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<br />Council Member Stigney inquired if the removal of billboards was addressed in the lease
<br />agreement or the resolution. City Attorney Long indicated this was specified in the lease
<br />agreement.
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<br /> Ayes – 4 Nays – 0 Motion carried.
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<br /> 2. Consideration of Lease Agreement with Eller Media Company.
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<br />City Attorney Long stated this item is the lease agreement with Eller Media, as reviewed by the
<br />Council at the previous Work Session. He indicated there is a blank space in the first paragraph
<br />of Page 1 of the agreement. He explained that staff is awaiting the results of a survey that will
<br />provide the proper square footage of the area and the description of the lease premises which will
<br />be inserted in this blank space, prior to execution of the document. He stated the requested action
<br />is that the Council move to authorize the Mayor and the City Administrator to execute this
<br />agreement.
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<br />City Attorney Long advised that paragraph 6a of Page 2 is an important and positive change, due
<br />to the negotiation skills of the City’s Golf Course Superintendent, Finance Director, and its
<br />attorneys. He stated the language of this paragraph is basically the same, however, the dollar
<br />amount has increased by $5,000 per sign, and adds $30,000 per year for the City. He explained
<br />that the previous lease agreement indicated $36,000 per year, per billboard site, for a total of
<br />$216,000 per year, and it is now at $41,000 per year, per billboard site, for a total of $246,000. He
<br />pointed out that this represents a $450,000 gain to the City, over 15 years. He indicated that Eller
<br />Media’s original proposal included some discussion that they would provide advertising services
<br />to the City, however, after considering this, staff felt it would be cleaner from a procedural
<br />standpoint, to take this in the form of a cash payment.
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<br />City Attorney Long stated paragraph 6c indicates that Eller Media will pay the City an additional
<br />$50,000 up front, within one week of the date the permits are obtained, and that is in lieu of the
<br />advertising services they offered. He stated the second sentence indicates there would be
<br />escalating payments in the amount of $12,000 per year for the first five years, $14,000 per year for
<br />the next five years, and $16,000 per year for the last five years. He advised that those amounts
<br />would not be subject to the CPI indexing of the actual rental payments, therefore, the total rental
<br />compensation has been increased to $710,000. He noted the original proposal stated the
<br />marketable value of the advertising services Eller Media had offered was approximately $540,000,
<br />therefore, the City was coming out ahead with these cash payments, and not having to take this in
<br />the form of advertising.
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<br />City Attorney Long stated paragraph 8 specifies the amount the lessee will pay to reimburse the
<br />City for its costs including legal fees, landscape and architect fees, and other costs incurred with
<br />this project. He stated there is a blank space in this paragraph, and staff was attempting to compile
<br />the final bills, after which the total would be inserted, and Eller Media would pay that amount prior
<br />to execution of the document. He advised that this amount would be paid first, followed by the
<br />$50,000 payment one week later when the permits are obtained, and the first rental payment dates
<br />will commence on July 1, 2000.
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<br />Superintendent Hammerschmidt pointed out that the July 1 date may be pushed back a bit, in light
<br />of the timing of this matter.
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