04-0014R

RESOLUTION AUTHORIZING A LEASE AGREEMENT WITH CENTAUR LLC FOR LEASE OF SHOP AND WAREHOUSE SPACE IN WEST DULUTH FOR $1,200 PER MONTH.

BY COUNCILOR STOVER:

RESOLVED, that the proper city officials are authorized to enter into a lease agreement substantially in the form of that on file in the office of the city clerk as Public Document No. _____________ with Centaur L.L.C. for the lease of a shop and warehouse facility in West Duluth for $1,200 per month, one-half payable from the Water Fund 0510, Agency 500, Organization 1915, Object 5441 and one-half payable from the Gas Fund 0520, Agency 500, Organization 1519, Object 5441.


STATEMENT OF PURPOSE:  The purpose of this resolution is to authorize a 3 month lease with Centaur L.L.C. for one of the two buildings that used to make up the West Duluth water and gas tool house on 59th Avenue West.

In May of 2003, the city agreed to sell this tool house facility and surrounding property to Centaur for its redevelopment as a building supplies center. This was done in contemplation of the completion of the new Garfield Avenue water and gas facility which would render the old tool house superfluous to the water and gas department's needs. However, because the department expected to need part of the property until the new building opened, the city only sold Centaur one half of the property, retaining control and use of the other half. Based on the department's best estimates at the time, the city agreed to sell the second half of the property to Centaur no later than December 31, 2003.

Unfortunately, the move to the new building has not proceeded as quickly as had been anticipated and the department finds itself facing the mandatory date to convey title to the second half of the property while still having need to use the property for some additional time, presently estimated at three months.

Centaur has agreed to lease the second half of the property to the city for three months for $1,200 per month with a month-to-month extension provided for, if needed. This resolution would allow closing to occur as provided for in the agreement and also for the department to continue to use the space as long as the need for it is anticipated.