City Council Minutes 03-24-2014 Special (lease)MINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Monday, March 24, 2014 — 5:00 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Tom Perrault, Glen Posusta
Absent: Lloyd Hilgart, Brian Stumpf
Others: Wayne Oberg, Angela Schumann, Kitty Baltos, Tom Pawelk, Soccer Club
President Tony Rowan
1. Call to Order
Mayor Herbst called the special meeting to order at 5:02 p.m.
2. Purpose of Meeting: Discussion of proposed lease for use of the old bowling alley
at 101 Chelsea Road
Clint Herbst introduced the purpose of the meeting and asked Angela Schumann to
lead the discussion. Angela Schumann introduced Tony Rowan, president of the
Youth Soccer Club. Angela Schumann commented that city staff has held a number
of meetings with the Soccer Club and they are very close to a final lease document to
present to the City Council for consideration. However, there are several questions
remaining to be answered and staff would like input from Council. Materials for
discussion include a copy of the draft lease, a diagram of the building, preliminary
improvement cost estimates, and a remediation report.
Angela Schumann touched on some of the terms of the lease including a length of ten
years, process for remediation of hazardous materials (asbestos and mold), portion of
the building that would be leased, amortization of leasehold improvements over five
years if lease were terminated by the City, and allowances for future improvements.
Tom Perrault suggested that the agreement clearly spell out the repayment
responsibility for improvements.
Angela Schumann discussed maintenance and operation costs, which would be paid
by the soccer club. There is a section in the lease on maintenance and repairs which
outlines the responsibilities of the soccer club and the City. In the section on
subletting of the lease, the city would retain the right to use the areas previously used
as a restaurant and bar. The lease provisions further require that the soccer club may
allow other organizations and clubs to use their space for no more than two weeks at a
time. Any regular use would require the soccer club to come back to the city and
work out the terms.
Kitty Baltos talked about potential ways that the Monticello Community Center could
possibly use the restaurant and bar area. She has looked at such things as a youth
gymnastics studio and cross fit studio and they are open to other ideas for potential
uses.
City Council Special Meeting Minutes — March 24, 2014 Page 1
Angela Schumann reviewed the questions related to abatement of hazardous materials
in the building. The soccer club has taken care of the inspection of the building and
the report identifies the areas in the building where remediation is required. Angela
noted that there is asbestos in the building which must be remediated and/or removed
by a licensed professional. The mold in the building also needs to be remediated.
Three options for this remediation were developed, based on staff's discussion with
the club. One of the options was to hire professional services to remove the mold in
the entire building, which is what was recommended by the club's architect and
environmental service. The club had indicated that it is not required to use a
professional for this and the soccer association is interested in using volunteers and
contractors to do this work as another option. It was looked at isolating the portion of
the building to be used by the soccer association and just remediate that area. It was
found that would not be possible and the entire building would need to have the mold
remediated.
Angela Schumann asked Tony Rowan to discuss the option proposed by the soccer
association. Rowan said the soccer club had looked into a professional company to
do the work but the cost would have run over $200,000, which they could not afford.
In their research, they found that it takes about 30 hours of an online course to
become a licensed mold professional. The soccer club has put together a plan to use
volunteers from their group and contractors from the area to assist with the project.
They would cover the liability in their insurance and would take care of the required
gear for removal. Glen Posusta asked what they do with the items that get removed
to eliminate the mold. Rowan noted that those items can be placed in bags in the
garbage roll -offs.
Rowan and Angela Schumann talked about the asbestos removal process. Asbestos
was found in the glue holding the carpet in place. Once the carpet is removed, then
tile or carpet will need to be placed to cover the glue. An asbestos contractor will be
hired for all of the asbestos remediation. There are strict requirements that guide this
process and reports have to be provided to the state regarding remediation efforts.
Glen Posusta asked about shared use and Angela Schumann explained how that is
addressed in the lease agreement. Clint Herbst stated that he is not necessarily
looking for a monthly rental fee, but rather that the soccer club would be fully
responsible for operations and maintenance of the old bowling alley. He suggested
the term of the lease might need to be adjusted and that the soccer club should update
the building as needs to be done. Basically, the city wants proof of insurance
coverage and to have the taxes paid by whoever uses the building.
Angela Schumann asked Clint Herbst if he would rather change the section regarding
term of lease and reimbursement within five years to be accommodated by a flat term
of lease clause. Clint Herbst said he would like to see this as a breakeven opportunity
for the soccer club but not have it be detrimental to the taxpayers.
City Council Special Meeting Minutes — March 24, 2014 Page 2
Rowan talked about some of the existing equipment such as the air handler and
boiler. These are generally in usable condition. The soccer club will be utilizing
members of their club that are in these trades to assist with any upkeep that might be
needed.
Angela Schumann asked Wayne Oberg to discuss the lease section on rent provisions.
Wayne Oberg stated that this was discussed with the EDA who suggested that the rent
be set up to capture all property tax liability including a portion that would be carried
forward into the year following the end of the lease. Wayne Oberg talked about the
property insurance and wasn't sure if the cost would increase when improvements are
made. Any increase could be built into the rental fees. Wayne Oberg calculated that
the rent would run about $11,000 a year for taxes and property insurance. The soccer
club would be responsible for liability insurance for their members and users. Angela
Schumann noted that an arrangement had also been proposed whereby the soccer club
would be paying about $1 a month for rent through the end of the year to offset their
share of the costs for remediation. After that the rent would be based on the cost of
property taxes and insurance. Clint Herbst stated that he would be okay with the
proposal from the soccer club to do the mold remediation; however, he would want to
make sure that the proper procedures are followed. Otherwise, the city should reserve
the right to call in professionals to do the job. Tom Perrault was concerned whether
this would create a burden on staff to manage this project.
Clint Herbst asked about the timeline. Rowan commented that the soccer club would
like to get started as soon as possible to get the remediation done so they can start on
the improvements that need to be done so they can start using the facility in
November of 2014. There was some discussion about unknown damage that might
be found as the work is completed on the building. This may generate further
changes in the lease agreement if it's found that additional remediation or
improvements need to be made. It was noted that inspections done from a prior
hailstorm showed that damage was limited to some dents in the roof but no structural
damage. A contingency plan should not be needed unless additional unexpected
hazardous materials are found. One condition for occupancy will be an air quality
test to be completed after remediation is completed.
Glen Posusta asked if this use would generate other requirements such as
landscaping. Rowan commented that they plan to paint the outside of the building in
a neutral color and do some exterior landscaping at the front of the building.
Tom Perrault asked if the soccer club is responsible for mowing, snow removal and
other grounds maintenance and that was confirmed by Angela Schumann. Angela
Schumann also noted that the soccer club will also be responsible for all utilities and
interior maintenance as long as they are the sole user of the building. It was noted
that, if the City or another group used a portion of the building, there is a provision to
address any potential sharing of those expenses.
City Council Special Meeting Minutes — March 24, 2014 Page 3
3. Adjournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 5:52 P.M.
GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 3 -0 (WITH
HILGART AND STUMPF ABSENT).
Recorder: Catherine M. Shuman J
Approved: April 14, 2014
Attest:
C
AAWinistrator
City Council Special Meeting Minutes — March 24, 2014 Page 4