ECONOMIC DEVELOPMENT AUTHORITY- Erik Thorvig, Economic Development Coordinator
Title
APPROVAL OF A LEASE WITH ARKAD CORP. FOR 2111 105TH AVENUE AND 10525 NASSAU STREET
Background
On April 20th, 2017 the Blaine EDA approved the purchase of 2111 105th Ave. and 10525 Nassau Street. Arkad Corporation currently operates their business from these buildings. Arkad is an assembly and fabricating business. As part of the purchase negotiation, Arkad expressed the desire to continue to operate their business for a period of two years as they prepare to relocate. Staff was amendable to this request as it generally matched the development timeline for Kwik Trip who is planning to construct a new convenience store adjacent to these properties at 10500 Radisson Rd. The following are the general terms of the lease agreement:
1. Arkad would vacate 10525 Nassau St. by 12/31/17. Arkad would lease 2111 105th through 5/31/19.
2. Arkad to pay $475 per month from 6/1/17-5/31/19. ($11,400 value).
3. The city would pay the property taxes for 2111 105th Ave in 2018 and 2019 (approximately $32,000). The property becomes tax exempt in 2020. 10525 Nassau St. becomes exempt in 2018 since it is not leased.
4. Arkad maintains the property including snow removal, building improvements, etc. during the two year period of occupancy.
5. Arkad pays the utilities during the two year period of occupancy.
6. Arkad will carry necessary insurance on the property.
7. Arkad is not permitted to sublet the property.
At the April 20th meeting there was discussion regarding the monthly lease rate and real estate taxes. As indicated at the meeting, the lease back and rate were important in getting the seller to agree to the purchase price. Initially, both parties were about $418,000 off on the purchase price. The seller wanted $1,525,000. In order to get the purchase price down to a number each party felt agreeable to ($1,267,000), each party agreed upon a leaseback of the property and the terms as proposed.
Attachments
Location Map
Lease Agreement
Recommendation
It is recommended that the EDA adopt the attached resolution approving a lease for 2111 105th and 10525 Nassau St.
Body
BE IT RESOLVED by the Board of Commissions (the “Board) of the Blaine Economic Development Authority (the “EDA”), as follows:
WHEREAS, it is one of the goals and purposes of the Blaine EDA to improve the community, strengthen the tax base and enhance employment opportunities; and
WHEREAS, redevelopment of 105th Avenue/Radisson Rd. industrial park has been identified as a redevelopment area in the 2030 comprehensive plan; and
WHEREAS, the properties at 10525 Nassau St. and 2111 105th Ave. are being purchased by the Blaine EDA; and
WHEREAS, the current business has expressed the desire to remain for a period of time for them to plan for relocation of the business; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Blaine Economic Development Authority, City of Blaine, Minnesota, that the President and Executive Director of the Blaine Economic Development Authority are here authorized to execute any and all agreements and documents required for the lease of 10525 Nassau St. and 2111 105th Ave.
PASSED by the Blaine Economic Development Authority this 4th day of May 2017.