2015.10.13 CC Minutes - Laserfiche WebLink

Home Browse Search

October 13, 2015 Additionally, if UMCPI extends the lease for a second 5 -year term, which is very likely, then the City would secure $360,000.00 of non -property tax revenue. The lower level of City Hall has previously had leasers in the space. The space has been vacant for a number of years even though the City has marketed it. If the City updated and remodeled the lower level area with the lease revenue then the area would be more attractive for future leasers. The City would also remodel City Hall bathrooms and make them compliant with the American with Disabilities Act (ADA). Cost estimates for a complete lower level remodel which would include an update of the lower level office area, storage area for City files and archives, and the upper and lower level bathrooms, would cost approximately $299,000.00. There is risk UMCPI does not renew the 2nd 5 -year term and the City would be approximately $50,000.00 short of covering all of the costs of the project. However, the City would have an updated office area, newer storage and filing space, and new ADA compliant bathrooms. If UMCPI agreed to renew for the 2nd term, then the City would generate an estimated additional $61,000.00 in non -property tax revenue over the 10 -year lease. The City Attorney has reviewed the leases. Staff recommended the Council authorize the City Manager to sign the lease agreements with the Minnesota Chiefs of Police Association and UMCPI. Councilmember Burg was excited the space in City Hall would be filled. However, she questioned how the City would cover the cost of the renovations as they were projected to be more than the City would take in for the lease rental rates over the next 10 years. She feared how the City would cover its expenses if the tenants were to vacate the space. Management Analyst/Human Resources Specialist Hatch commented that the tenants would be expected to honor the terms of the lease. He indicated the Chiefs of Police would have a ten-year lease and UMCPI would have a five-year lease. It was noted that the terms of the lease have been reviewed by the City Attorney. City Manager Lotter reported that the City would do an internal loan to complete the necessary renovations at City Hall. Councilmember Burg questioned if the improvements could be kept under $250,000. Management Analyst/Human Resources Specialist Hatch reviewed the proposed improvements in fiuther detail with the Council along with the expenses. Councilmember Strub understood both ofthe proposed tenants were non-profit organizations. He questioned how many employees would be working in the newly renovated space at City Hall. Management Analyst/Human Resources Specialist Hatch discussed the partnership between the two organizations and explained that many of the employees worked from home. He anticipated that 11 of the employees would be working out of the City Hall space and noted staff/board meetings would be held on a monthly basis. Councilmember Strub fully stippoiled the renovation and utilization of this space at City Hall. He would be proud to have the Chiefs of Police and UMCPI renting space in the City of New Brighton. Mayor Jacobsen asked if any of the Chiefs of Police were located outside of the metro area. Public Safety Director Jacobson reported that the majority of the Chiefs of Police that would be attending the monthly board meetings were from outside of the metro area. Councilmember Jacobsen understood that the lower level bathrooms were in need of renovation. He was pleased that staff estimated the renovation expenses on the high end and was curious to see how the final expenses would come in. Councilmember Bauman asked why there was a discrepancy between the office space between the two tenants. Management Analyst/Human Resources Specialist Hatch reported this was at the request of the tenants. Councilmember Bauman questioned if utilities and property taxes were calculated into the lease rates. Management Analyst/Human Resources Specialist Hatch reported after hard negotiations, the City would be covering these expenses. Councilmember Bauman asked if the five-year option for UMCPI would have a rental rate increase. Management Analyst/Human Resources Specialist Hatch commented that the rental rate would remain the same. Councilmember Bauman supported the leasing of this space, however, she feared that the renovation expenses were quite high. She was in favor of getting the proposed improvements more in line with the revenue that would be raised from the tenants. Page 5 of 7