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29 ST.ANTHONY SHOPPING CENTER LLC Post Office Box 555,Wayzata,Minnesota 55391 Phone:(612)333-1663 Fax: (612)333-1877 April 21, 2000 Mike Morenson City of St. Anthony 3301 Silver Lake Rd. Minneapolis, MN 55418 Re: Marketing Proposal Dear Mike: After our discussion with the Mayor regarding what we might do to help find a key tenant for either the City's site or St. Anthony Shopping Center, I came up with a concept that I believe would be beneficial to all concerned with a minimum of upfront money. Background If either the City or the Shopping Center hired a leasing agent, we would probably have to pay the agent a$3/square foot commission if the leasing agent found a suitable tenant and $4.50/square foot if the leasing agent had to split the commission with a second broker who found the tenant. The leasing agent may or may not absorb the initial marketing costs. In our case. . a leasing agent probably would not want to absorb the cost because the number of square feet available to be leased is small. The leasing agent would want us to front the costs of collateral materials. Also, because the number of square feet to be leased is so small,there is little incentive for an agent to spend significant time marketing the property. In reality,the agent would send out brochures, set up a sign on the property and hope that another agent shows up with a tenant and that they can split the $4.50/square foot commission. At best, the leasing agent can get a $3/square foot commission, but in the vast majority of cases two agents will be splitting a $4.50/square foot commission with each of them getting less than$3.00/square foot. Proposal My thought is that the City and the Shopping Center should jointly market our properties, split the marketing cost, and send out brochures to the retail brokers in the Twin City area promoting our properties and offering any broker who brings in a suitable tenant a$4/square foot commission. The advantage is that by splitting the marketing cost we reduce the cost of marketing relative to marketing our properties independently. We offer brokers who have retail clients above market commissions while reducing what we would have to pay if we hired a leasing agent. Lastly,we can coordinate our marketing/leasing to optimize our chances of landing a prime tenant. A couple of thoughts: First, I would be happy to coordinate the effort,prepare a marketing plan/budget for prior approval by the City(I think the entire budget should be under$5000,but that is a function of layout/printing quality/quantity)and handle phonecalls from brokers/tenants. . Second, no one in our organization will get any fees or compensation for our participation; everything would be done at cost. Third,we will use our memberships in the Minnesota morenson lenc.d« 1 421/00 12:52 PM