M I N U T E S PORT AUTHORITY MEETING WEDNESDAY, APRIL 24, 2002 4:30 P.M. CITY HALL COUNCIL CHAMBERS

Members Present: Commissioners Chaffee, Koch (until 5:15 p.m.), Lang, McCarthy, Bednar, Mohrfeld, and Maus.

Members Absent: None.

Staff Present: Patrick McGarvey, David Hoversten, Craig Hoium, and Tom Dankert.

Others Present: George Brophy and Randy Klein

Commissioner Chaffee called the meeting to order at 4:35 P.M.

Motion by Commissioner McCarthy, seconded by Commissioner Maus to approve the minutes of the March 27, 2002 meeting. Carried 6-0.

Community Development Director Craig Hoium discussed the proposed sale agreement between the Austin Port Authority and Auto Parts Headquarters, Inc. Originally, Auto Parts Headquarters, Inc. wanted a purchase agreement for Block 1, Lot 4 of the Burbank Addition. Now it appears that they would prefer Block 2, Lot 1 at the set purchase price of $76,054.38. Commissioner McCarthy questioned where access to the property would be from. Mr. Hoium noted access to the property would be from 8th Street NW, not 18th Avenue. Commissioner McCarthy questioned if easements were going to be in the way of this proposed project. Mr. Hoium noted there should be no problems with easements and the proposed building.

Motion by Commissioner McCarthy, seconded by Commissioner Mohrfeld to approve the land sale of Block 2, Lot 1 to Auto Parts Headquarters, Inc. for $76,054.38. Carried 6-0. Commissioner Koch requested another meeting be called to review and approve the building and site plans before closing on the sale.

Executive Director Patrick McGarvey discussed the proposed lease agreement with Intrepid USA for Suite 102L in the Town Center. Mr. McGarvey noted the current tenant, Edina Realty, requested a month-to-month lease but agreed to a sixty-day notice for termination by either party. The Port Authority agreed to this term, even though we had requested a 120-day notice for termination of the lease. Now, Intrepid USA would like to lease the suite effective July 1, 2002. A lease has been included for review and has the following terms: • 36 month lease. • Base Rent of $3.12 per square foot. • Improvement Rent of $6.25 per square foot for the thirty-six months. • Operating Expense of $5.79 per square foot, adjusted annually for operations cost.

The monthly rent would be $1,421.25 for the 1,125 square foot area. Mr. McGarvey noted Edina Realty contacted him before this meeting noting they are interested in the corner lot (Block 1, Lot 4) 1 in Burbank Addition. Mr. McGarvey noted Intrepid USA may be able to stay in their current location beyond July 1 to allow time for Edina Realty to build a new location, but they would have to check with the landlord and receive approval to do so.

Commissioner Koch questioned if Intrepid USA could sublease the area to Edina Realty. Mr. McGarvey noted the Port Authority would have to approve any sublease agreement. Mr. McGarvey noted Edina Realty could lease the conference room if need be.

Motion by Commissioner Mohrfeld, seconded by Commissioner Koch to approve the 36-month lease agreement with Intrepid USA for Suite 102L in the Town Center. Carried 6-0. Randy Klein of Intrepid USA thanked the Port Authority and noted they were anxious to move in to the Town Center.

Commissioner Maus questioned the City Attorney if he believed that adequate notice is being given to Edina Realty. Mr. Hoversten noted he believed it was, and should be sent via certified mail.

Motion by Commissioner Maus, seconded by Commissioner Mohrfeld to approve the termination of the lease with Edina Realty effective June 30, 2002. Carried 6-0.

Mr. McGarvey indicated that the Port Authority may be requested to approve the selling of a lot in the Burbank Addition to Edina Realty and maybe even finance the office building. No one noted any objections.

Motion by Commissioner McCarthy, seconded by Commissioner Koch to approve the temporary and permanent easements to Mower County for the 18th Avenue NW construction project. Carried 6-0.

Mr. McGarvey discussed the proposed changes to the Port Authority by-laws that would allow the President to vote on issues that come before the Port Authority. Originally, the President was allowed to vote, but in 1998 then President Bob Dahlback requested the by-laws to be changed so the President could only vote to break a tie. Now that Don Brezicka has resigned from the Port Authority, this would be the opportunity to allow the President to vote again and return the board to seven members.

Moved by Commissioner Lang, seconded by Commissioner Bednar to approve a resolution amending the by-laws authorizing the Port Authority president to vote. Carried 6-0.

Motion by Commissioner Lang, seconded by Commissioner McCarthy to approve the request by the Port Authority to the City Council to adopt an ordinance reducing the Port Authority to seven members. Carried 6-0.

Mr. McGarvey discussed the proposed fee schedule for the rental of the conference room at the Town Center. Mr. McGarvey noted , under his proposal, if tenants want to use the conference room, they can at no charge. If outside entities want to use the conference room and they are not-for-profit, they can also use the conference room free of charge. However, if the entity that wishes to use the conference room is a for–profit entity, they will be charged a fee of $50 per day for one to four hours of usage at the Town Center conference room. A four-to-eight hour usage of the Town Center conference room would cost $100. There would also be a policy to require a security deposit.

2 Commissioner Bednar noted her disagreement of not charging current tenants rental for the conference room, as some tenants built and are paying for their own conference room.

DCA Executive Director George Brophy noted the DCA would collect the payments and remit them back to the Austin Port Authority. Mr. Brophy also noted the Port Authority needs to be careful who they have in the building after 5:00. Commissioner Lang noted the conference room should not be rented after 5:00.

Motion by Commissioner Koch, seconded by Commissioner Maus to approve the proposed policy on renting the conference room at the Town Center as discussed above with the added policy of not renting this room after normal business hours unless the renter is a Lessee in the Town Center. Carried 6-0.

Mr. Hoversten discussed the request by Austin Packaging Company (APC) to restrict access by Johnny’s Restaurant customers. Currently, an easement exists allowing Johnny’s customers to use and park in the APC owned parking lot. This easement concerns both APC and their subtenant, Hormel Foods Corporation. APC is now requesting the easement be confined to area’s reasonably necessary to access the restaurant. Mr. Hoversten noted the Port Authority would have to sign the easement, and APC would then have to sign a consent to the easement changes.

Motion by Commissioner McCarthy, seconded by Commissioner Mohrfeld to approve the confining of the easement to Johnny’s Restaurant. Carried 6-0.

In other matters, Mr. McGarvey discussed the possibility that may be coming up in the near future for the transfer of the land known as the Cook Farm site from the City of Austin to the Austin Port Authority. The land can be more easily sold by the Port Authority as the City Council needs a 7-0 vote in order to sell land.

Mr. McGarvey also discussed the status of the parking lot and building of the Austin Packaging Company (APC). Since the events of September 11, 2001 customers of APC are being very cautious of who they do business with, and the parking lot is in bad shape. The pools of water can carry diseases that eventually can get into the facility, so repair is needed. Additionally, the city would like to see the facility painted.

Mr. Hoversten noted the improvements are the responsibility of APC according to the lease agreement, and we have no legal responsibility to fix the parking lot or paint the building. Mr. McGarvey noted a proposal may be forthcoming that has the Port Authority financing the improvements and repayment to be made by the Company.

Commissioner Bednar questioned if APC ever had the last audit, and if the Commissioners would get an update. Mr. Dankert noted he and George Brophy have reviewed the audit for the period ending September 30, 2001. We are not allowed to take the audits out of the facility as it would then be considered public information, for which APC does not want out. Mr. Dankert noted they had a great year ending September 30, 2001 and were profitable. Mr. Brophy also noted the review of the audit and the quarterly financials by the DCA occurs as the DCA has loaned APC some funds. At this point in time there appears to be no danger of default on any loans.

3 Mr. McGarvey noted he would call a special meeting when a proposal is ready for the painting of the APC facility and the repair of the parking lot.

President Chaffee thanked Don Brezicka for his service on the Austin Port Authority. A letter will be written officially thanking Mr. Brezicka for his service.

Motion by Commissioner Mohrfeld, seconded by Commissioner McCarthy, to adjourn at 5:33 pm. Passed 5-0.

Approved:

President:

Secretary:

4