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Home My WebLink About05.29.12 Work Session Packet City of Farmington Mission Statement 430 Third Street Through teamwork and cooperation, Farmington,MN 55024 the City of Farmington provides quality services that preserve our proud past and foster a promising future. AGENDA CITY COUNCIL WORKSHOP May 29, 2012 Following 6:30 p.m. EDA Meeting 1. CALL TO ORDER 2. APPROVE AGENDA 3. LIQUOR OPERATIONS 4. CITY ADMINISTRATOR UPDATE 5. ADJOURN PUBLIC INFORMATION STATEMENT Council workshops are conducted as an informal work session.All discussions shall be considered fact-finding,hypothetical and unofficial critical thinking exercises,which do not reflect an official public position. Council work session outcomes should not be construed by the attending public and/or reporting media as the articulation of a formal City policy position. Only official Council action normally taken at a regularly scheduled Council meeting should be considered as a formal expression of the City's position on any given matter. *Avis`�` i City of Farmington 430 Third Street Farmington, Minnesota �`'A e' 651.280.6800•Fax 651.280.6899 •A mgo www ci.farmington.mn.us DATE: May 29, 2012 TO: Mayor and City Council Members FROM: David J. McKnight, City Administrator SUBJECT: Liquor Store Operations With the short EDA scheduled for Tuesday, May 29, 2012 one of you asked that we have a work session to discuss possible future locations of the downtown liquor store. A work session with the City Council will provide all of us an opportunity to share thoughts and ask questions on this issue. Just as important it will hopefully provide me with some direction on this time sensitive issue. As you are aware from the work on this issue during the past year, the city has looked at a number of possible sites for a downtown store. We have potentially narrowed the list down to the following sites. These are not the only sites the city can consider but for times sake the list has been narrowed to get the discussion started. I list the general area of the sites so as to not make our negotiating with potential property owners more difficult. The sites and numbers are listed below: 1-Former Rambling River Center building 2-Laundromat building 3-South Highway 3 site 4-Site near Highway 3 and Elm Street 5-North Highway 3 site 6-Current Rambling River Center building I am including the proposal we received from one of the property owners since you have all already received it and I assume will be a point of discussion. Also attached to this memo is a pros/cons list for each of the properties that staff put together and some traffic count information. We did this to provide you with at least some background information on this issue. If you have questions or need additional information please let me know. Thank you for your time on this important matter. Minneapolis-St Paul 4350 Baker Road,Suite 400 MAN+1 952 897 7700 Minnetonka,MN 55343 FAX+1 952 897 7704 Coin www.colliers.com L�O-U 1 e1 s INTERNATIONAL May 16,2012 Randy Distad Parks and Recreation Director Farmington City Hall 430 Third Street Farmington,MN 55024 Re: PROPOSAL TO LEASE SPACE AT TAMARACK RIDGE Property Name: Tamarack Ridge,Farmington,MN Landlord Name: Northland Commercial Dear Randy: Pursuant to our recent conversations, this letter is intended to serve as a proposal for the Farmington City Liquor Store to lease space at the above shopping center under the following terms and conditions. This proposal is subject to Landlord's review and approval of its terms and conditions. This proposal should not be construed to be a binding commitment by either party. 1. Premises: Consisting of approximately 5,058 SF(In-line bays 10, 11 & 12) 2. Tenant: City of Farmington 3. Term: July 1,2012-August 31,2017(5 Years,2 months) 4. Renewal Options: Tenant shall be offered(1)one(5)five year renewal option at market rates. 5. Use: Liquor Store 6. Base Rent: Month 1-2 $0.00 psf(pay CAM and Tax only) Year 1 $9.50 psf $4,004.25/month Year 2 $10.00 psf $4,215.00/month Year 3 $10.50 psf $4,425.00/month Year 4 $11.00 psf $4,636.50/month Year 5 $11.50 psf $4,847.25/month *(Base)Rent shall commence September 1,2012. marmot 'j tIVICIMAVIONAL 4350 Baker Roa4 Suite 400,Minnetonka,MN 55343 Tel 952.897.7700 Fax 952.897.7704 www.welshco.com Farmington City Liquor Store May 18,2012 Paget lCO�1to1S 7. Operating Est.CAM for 2012 $2.22 per square foot or$939.13/month Expenses: Est.Taxes for 2012 $3.77 per square foot or$1,589.23/month Total monthly rent,year 1:$6,532.61 Gas&Electric are separately metered. 8. Percentage Rent: Percentage Rent Clause to be removed from Lease 9. Security Deposit: One month's gross rent,to be held for the first term of the Lease.At the end of the first term,as long as the tenant is in good standing the security deposit shall be applied to month 59.If the tenant is not in good standing then the security deposit shall not be applied. 10. Landlords Work: Landlord to provide space in"as is"condition to Tenant. *Landlord to provide $7.50 per square foot for tenant improvement allowance. In addition to the standard Vanilla shell,Landlord has provided the following improvements: *Vanilla Shell demised: *Drywall paint on ceiling *Lighting allowance package of$6,500.00 *One(1)ADA compliant finished bathroom,standard Landlord Spec (tiled floor&walls, 1 sink& 1 toilet) *(3)200 amp electrical ready for commercial use *New HVAC rooftop units Bay 10(1)5 ton unit,Bay 11 (1)3 ton unit, Bay 12(1)4 ton unit. *HVAC trunk lines. °/ TEAM �` Y Ibf ENNA WV 4L 4350 Baker Road,Suite 400,Minnetonka,MN 55343 Tel 952.897.7700 Fax 952.897.7704 www.welshco.com Farmington City Liquor Store May 18,2012 1. Page 3 Co o l S 11.. Tenant Work: All other work shall be considered Tenant Work and shall include,but not be limited to: *Tenant to provide space plan to Landlord and city *Any additional construction required as a result of Tenant's specific use *All trade fixtures and decorating. *Exterior building signage *Any additional HVAC if necessary for Tenant's own use *My additional SAC/WAC if necessary for Tenant's own use *Tenant shall present invoices and lien waivers evidencing payment of all Tenant Work,including allowance for reimbursement.Tenant shall also provide a copy of their insurance to Landlord(minimum 1 million dollar policy)prior to or upon occupancy and on an annual basis thereafter. *Tenant is responsible for obtaining all permits,and any liquor license required by the City of Farmington 12. Option(Seven Another option is for Tenant to add two years to this lease proposal with Year Lease): the first full year minimum rent at $9.00 psf and the last full year minimum rent at $12.00 psf. Also, there would be a$10.00 psf tenant improvement allowance attached to the seven-year option. 13. Delivery July 1,2012 or upon substantial completion of Landlord Work. Date: 14. Lease/Rent September 1,2012 Commencement: 15. Signage: It is agreed that the Tenant will have the right to incorporate signing on its storefront at the Tenant's expense. All signing shall conform to the Landlord's sign criteria and shall be subject to both Landlord and City approval. 16. Assignment& Tenant shall not assign the Lease or sublet the Premises without prior Subletting: written consent of the Landlord. No assignment shall release Tenant or Tenant Guarantor of any obligations under the Lease. 17. Repairs Landlord shall maintain and repair the common areas of the building, Maintenance& roof,exterior walls and foundations of the building per the lease.Tenant Utilities: will maintain the premises and the portions thereof not the responsibility of Landlord per the lease. RAMMER :' TEAM $ f3tel*Naff19l141 4350 Baker Road,Suite 400,Minnetonka,MN 55343 Tel 952.897.7700 Fox 952.8977704 www.welshco.com Farmington City Liquor Store May 18,2012 �'i Page 4 Co_nets INTERNATIONAL 18. Utilities: Tenant shall pay all utility expenses related to the Premises as of Delivery Date. Electricity and natural gas will be separately metered, and Tenant will have full responsibility for direct payment of utility bills. All SAC/WAC charges shall be Tenant's responsibility. 19. Documentation: Landlord will prepare lease form. 20. Brokerage: Tenant and Landlord agree that no other broker is involved in this transaction other than Colliers International who represents the Landlord. Any commissions due shall be paid by the Landlord pursuant to a separate written agreement between Landlord and the Listing Broker. We look forward to working with you to consummate a Lease.We will prepare a Lease document for your review once we are in agreement on the basic terms and conditions. If you would like to proceed,please sign a copy of this proposal and return it to my attention at your earliest convenience.This letter is not a binding agreement and is intended as a mutual expression of Landlord and Tenant to negotiate in good faith with the intent of entering into a mutually satisfactory,written lease agreement. Landlord's obligation to lease the Premises to Tenant and Tenant's obligation to lease the Premises from Landlord are expressly conditioned upon the Landlord and Tenant entering into a mutually satisfactory written lease agreement(the"Lease"). In the event of any conflict between this proposal and the Lease,the Lease shall control.This proposal is intended to be kept confidential to any outside parties. If you have any questions or comments,please contact me. Sincerely, Agreed and Accepted: q7raf Zachary Stensland Colliers International Minneapolis-St.Paul By: 952-837-3078 Date: TEAM � Y ra►ep+areer�c 4350 Baker Road,Suite 400,Minnetonka,MN 55343 Tel 952.897.7700 Fax 952.89Z 7704 www.welshco.com Farmington City Liquor Store May 18,2012 1'age 5 Col_b_. 'ers INTERNATIONAL EXHIBIT A •- • • c,-..1 0) 4 Ser.. it-•se ... . 2--."4 :..., if' -•`r' o 3 2 a; ... -A- i. X.J )— 0- z MI s.stx...........--‹ ..... I.InicY—. '.t. . I ITI 32. C) .r.. .--. .--4.• 4 %Hill 8LOCK g 17: (1) .:. • --t . A u —. k f. ' ,1 ''' 1 .. .....T il 7 ' • I .. IP ' 2M.HI! .)..-t. 0 5 —1 / NAPATIT P —0 ' sivolam -..--...___, , ..... 1 Irkti-, - - 1 • ‘....\ *--• l' . ; 0) ...3 1 . tvi.At-gt-".„,..,I, I • l'.% '`..\:1\\\. ..::•411• '1:Aritttibt$:: ,`1: -,7ti) , .... ..92,4 fr.. ■,,,I V 1 , ...T, • 1_..... 'H oi .,, -, ••,....*', Ns., ,1 ! .6e*,..1.6. +N•NAPhisfte: . — .L, . • , I • • 9 e;.,..;. . 'I ' : 4;9 1 :1 Hni L ----- --- -•-...- .:. 7,"‘•-• -r0 . -— - • --, wIEFE. ATINEE! at X TEAM ,..740,ecriremcoarfact4C 4350 Baker Roa4 Suite 400,Minnetonka,MN 55343 Tel 952.89Z7700 Fax 952.897.7704 www.welshco.com Pros and Cons of Potential Downtown Liquor Store Relocation Sites Location Pros Cons Other Comments 1-Former 1. City owns property 1. Upgrade HVAC system Rambling River 2. Square footage of building would 2. Upgrade electrical Center Building allow equipment and inventory to be service moved without affecting operations 3. Complete asbestos significantly abatement 3. City fiber optic already in building 4. Would have to make improvements to exterior of the building including a new roof 5. Would have to install fire sprinkler system 6. Would be difficult to accommodate deliveries 7. Would take significant time to complete improvements 8. Lack of adequate parking 9. Location not on major roadway 10. Age of building 11. Temporary solution 2-Laundromat 1. Permanent solution to location of 1. Cost to run City fiber 1. Has offered to turn building downtown liquor store optic to building building into a condo with 2. Ample parking 2. Would have to upgrade City owning 3,000 square 3. Conduit in place along Elm Street electrical service feet and current owner to run City fiber optic 3. Would have to retaining ownership of the 4. Deliveries can easily be complete an addition for 2,000 square foot accommodated the beer cave Laundromat 5. Location is on a major roadway 4. Some neighbors are 2. Adding on beer cave 6. HVAC system does not need to be opposed would result in about 3,600 upgraded 5. Would take some time square feet 7. City would own the store resulting for construction in equity being built 6. Do not own would have 8. Have developed concept plan and to negotiate purchase of construction budget property 9. Good access 10. Higher traffic count Pros and Cons of Potential Downtown Liquor Store Relocation Sites Location Pros Cons Other Comments 3-South Highway I. Permanent solution to location of 1. Cost of running conduit 3 Site downtown liquor store and City fiber optic to site 2. Ample parking 2. Demolition and removal 3. Deliveries can be easily of underground fuel tanks, accommodated pumps and canopy 4. Electrical service exists for coolers 3. Cost and time to 5. Opportunity to redevelop site renovate the building 6. Access better than most other 4. Do not own would have locations to negotiate a purchase 7. Higher traffic count price for property 4-Site Near 1. At a signalized intersection 1. Do not own would have Highway 3 and 2. Conduit for fiber optic ends at Elm to negotiate a purchase Elm Street Street and Hwy 3 intersection price for property 3. New building provides an 2. Access issue from Elm opportunity to design it for a liquor Street and Hwy 3 store versus renovating or retrofitting intersection liquor store in an existing building 3. Time it would take to 4. Higher traffic count demolish existing building and construct a new building 5-North Highway 1. Favorable lease rates in the present 1. Temporary solution will 1. If considering would 3 Site 2. Location is on a major roadway have to decide DT store recommend going with a 3. Ample parking location once lease ends seven year lease to receive 4. Potential synergy with existing 2. Further from the core largest amount of allowance businesses and future new businesses downtown area for buildout of space and 5. Potential quickest construction 3. Cost of running conduit receive a slight reduction in turnaround time of all sites and City fiber optic to site lease rate and also lease 6. Can design the space correctly to for computers, POS system expiration would be in a work for liquor operations and security cameras different year from Pilot 7. Higher traffic count 4. No equity built at the Knob Store end of the lease term 2. Would recommend only 5. Would take time to building out two bays at finish space about 3,500 square feet and 6. Access issue as see what sales do and then commuter traffic late in the if store is successful could afternoon will need to turn expand into third bay for a left across traffic to access total of a little more than the store 5,000 square feet 7. Would not own the property 8. Recent business closings Pros and Cons of Potential Downtown Liquor Store Relocation Sites Location Pros Cons Other Comments 6—Current 1. Deliveries could be easily 1. Would have to upgrade Rambling River accommodated sprinkler system Center Garage 2. Across from bank where deposits 2. Too small of space are made 3. Asbestos abatement 3. City fiber optic already in the would be required building 4. Would have to upgrade electrical service 5. Would have to upgrade HVAC system 6. Location not on major roadway 7. Lack of parking 8. Conflicts with RRC events and programs 9. Require removal of garage doors 10. Temporary solution Page 1 of 1 II 205th St 6 gE in LO L 973- 6 n Rj ; 206th St w d r 2 207th StW 4° } 37965 3000 ...._.209th St W Capl-St—yj Linden St Carver 5t ____210th St W--^-`- a as L Willow 9 K t 4 o _ Rne St � N One 51 L 0 N _..._. - Main St -- 42: 15.-- 12 t0 3 11000 42314 CSn9 41 _ 12{I'�fI iff,I f t _ N tafrl'lb n - 1 e - _ 46 Or.St L Sr .. o_ r o r , Oak St P^ 1 Oak St F 59742 v, _ - tl fj Spruce St M Spruce St _ ____. ._._T_. 3796?‘ ! 110 37960 %"J N L Walnut St 75 _ _w...,..__._.1,50 Walnut St L Sc a N L L it M Loc t5tj Fi 1 1 -215 • All blue numbers represent the total number of vehicles counted on the roadways shown • The red numbers located along side TH 3 are the number of commercial vehicles that have been broken out from the overall total count of vehicles meaning semi-trucks and commercial delivery trucks/vehicles. • The red numbers shown on CSAH 50 are projected future traffic counts http://dotapp7.dot.state.mn.us/geocortex/essentials/web/Geocortex.Essentials.Web.Cached... 5/24/2012