City Council Agenda and Packet 2015 08 18

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City Council Meeting Minutes July 28, 2015 Page 20 of 28 Economic Development Director DeJong reviewed the lease proposal for 1600 Empire Road, the current City shop building. The City's operations will be out of the building in the fall of 2015. City Council expressed an interest in leasing the property. An RFP was issued in June of 2015 and noticed on the City's website as well as on Xceligent commercial property database. Two proposals were received: Human Movement Management (HMM) and RCL Land Company. The property includes four structures; a 15,300 SF operations building; a 2,100 SF maintenance building, a 1,000 SF storage building; a 6,300 SF vehicle storage structure on an available 5.55 acres of land and a 100 foot wide strip for outdoor storage Summary of Proposals: Human Movement Management is a Louisville -based event company, which employs 75 people. Their current location is being redeveloped. The proposal includes renovating the main building (offices; workshop and storage functions). They will create a "community" space for events and speeches and propose a future space for larger community events on the norther portion of the property. Renovation costs range from $500,000 to $1,000,000. The Company proposed a lease rate of $8 per SF for years 1 -5 ($139,200 per year) and $10 per SF for years 6 -15 ($174,000). Lease rates are still subject to negotiations. RCL Land Company. Louisville Boat /RV storage on Highway 42, owned by Rob Lathrop, (member of the Louisville Revitalization Commission) is looking to expand operations. RCL would like to relocate and expand his business. They propose to occupy the 100' strip and northern portion of the main property, and improve the area with road base and fencing. They require access onto Highway 42. RCL proposes an 18 -year lease, which includes $14,400 for the first year; $30, 000 for the second year and $30,900 plus 3% increase per year for years 3 — 18. RCL is requesting the brown storage building and all stored materials be removed from the leased area. Overlapping Property — Northern Portion: HMM wants it for room for outdoor storage growth and for a future event space. RCL wants the area for RV storage. HMM would like the brown storage building to remain, whereas RCL would like the building removed for their operations. Fiscal Impact: HMM's proposal is $139,200 per year for years 1 -5 and $174,000 per year for years 6 -15. RCL is proposing $14,400 in Year 1, $30,000 in Year 2, and then an annual 3% increase for the remaining term of the lease. Staff Recommendation: Staff requested Council direction to move forward with a lease with Human Movement Management. Should there remain a potential to facilitate RCL Land Company on the site, direction to negotiate a lease with RCL Land Company. APPLICANT PRESENTATION 50