Economic Development Authority - Erik Thorvig, Community Development Director
Title
Title
Approve Termination of Lease Agreement for 10550 Nassau Street NE
end
Executive Summary
Approve termination lease agreement with General Pattern Company for 10550 Nassau Street.
Background
On September 19, 2022, the Blaine EDA approved a purchase agreement for the building a 10550 Nassau Street. The current owner has a lease agreement with General Pattern Company (GPC) that went into effect on September 1, 2022. If the EDA purchases the building, the EDA assumes the existing lease agreement. One of the contingencies of the purchase agreement is the execution of a lease termination between the Blaine EDA and GPC as the City does not want to be a long-term landlord for the building after assuming the lease. GPC is agreeable to terminating the lease agreement. They have secured a new location and are willing to move immediately, however will have expenses incurred to move to another location.
GPC has not made any significant improvements to the building, however, will need to move 50 large injection molds and 20 injection presses into the building as they had no other location to store them as of September 1. These are large pieces of equipment and will cost approximately $92,500 to move into the new location. Initially, GPC had requested the City cover all moving expenses. City staff stated concerns about shouldering the entire cost burden. The moving cost responsibility of the EDA has been negotiated down to $52,286 with the property owner and GPC covering the remaining costs.
Upon execution of a lease termination agreement with GPC, other details related to the sale will occur and closing is anticipated on October 31, 2022.
Financial Impact
The EDA would be responsible for $52,286 towards moving expenses. This would come from the EDA general reserves.
Staff Recommendation
By motion, adopt the attached resolution.
Body
WHEREAS, the Blaine Economic Development Authority approved a purchase of 10550 Nassau Street on September 19, 2022; and
WHEREAS, an existing lease exists between the property owner and General Pattern Company; and
WHEREAS, when the EDA takes ownership of the property, the EDA assumes the lease with General Pattern Company; and
WHEREAS, one of the contingencies of the purchase agreement is an executed lease termination agreement between the EDA and General Pattern Company; and
WHEREAS, General Pattern Company will incur $92,500 in moving expenses to locate to another location; and
WHEREAS, General Pattern Company has requested $52,286 from the Blaine EDA to assist in relocation expenses to agree to terminate the lease.
NOW THEREFORE, BE IT RESOLVED, that the Blaine Economic Development Authority hereby approves providing $52,286 to General Pattern Company and agrees to terminating the lease with General Pattern Company at 10550 Nassau Street and hereby directions the president and executive director to execute necessary documents.
PASSED by the Blaine Economic Development Authority this 10th day of October, 2022.