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it <br /> • MEMORANDUM <br /> DATE: July 10, 1996 <br /> TO: Mayor and Councilmembers <br /> FROM: Michael Morrison, City Manager <br /> ITEM: SAV 2 OFF-SALE STORE <br /> As I indicated to you at the July 9th Council meeting, I have signed the Notice <br /> of Intent to enter into a lease at the Tires Plus building. I did make two changes <br /> that Schoening will discuss with Mary Rothchild. <br /> 1. I am trying to get out of the Apache Wells lease by August 1st instead of <br /> when we take over the new store about January 1st. This would save the <br /> City about $20,000 for the rest of the year. I proposed to them that <br /> • should the City not enter into a new lease, we are obligated to make all <br /> lease payments retro to August 1st to reduce their risk. <br /> 2. The proposal is contingent on Council approval. This just gives us <br /> another out. However, we have one already by the last sentence in the <br /> contingency on Page 4. <br /> In terms of the economics of the proposal, I have discussed this with Roger <br /> Larson and Mike Larson (not related), and the three of us concluded that the <br /> best option would be to inject $200,000 into the store to get the lease down to <br /> $6.25, which is about what we are currently paying at SAV 2. The $200,000 <br /> would come from the HRA project fund. It may be more than $200,000 <br /> depending at what the bids come in at. The Council could pay the HRA money <br /> back from the expectant liquor store profits. That would be solely up to the <br /> Council. <br /> I have had Bill Soth review the proposal and he has no problem with it as it is <br /> currently written. Ste. Marie Company will hire Briggs and Morgan to put a <br /> lease together, which Bill Soth will review on behalf of the City. <br /> If you have any questions, please let me know. <br /> • <br />