Sponsor: Property Management
Title
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Lease Agreement with 1881 by Lake Elmo Inn, INC. for Restaurant Space at Union Depot
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Recommendation
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1. Approve the lease agreement with 1881 by Lake Elmo Inn, INC. for restaurant space at Union Depot, 214 East 4th Street, Saint Paul, MN, for the period from July 1, 2024, through June 30, 2029, with one additional optional five-year term.
2. Authorize the Chair to execute the lease agreement.
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Background and Rationale
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1881 by Lake Elmo Inn wishes to lease space from Ramsey County Regional Railroad Authority (RCRRA) at the Union Depot for restaurant space. 1881 by Lake Elmo Inn is an established successful caterer for events at Union Depot. The addition of their physical restaurant, 1881 by Lake Elmo Inn, would be a second location for the restaurant. Their original location, Lake Elmo Inn, has over 40 years of successful operations as a restaurant and caterer. 1881 by Lake Elmo Inn has a solid reputation for superior food and quality service. Food is not just food to this successful entrepreneurship; it is a creative and nourishing centerpiece of daily life that brings people together at a common base. 1881 by Lake Elmo Inn will focus on sustaining a welcoming environment at Union Depot by striving to provide quality food and impeccable guest service.
Approving an established local restauranter to lease restaurant space at Union Depot is an ideal partnership for an abundance of reasons, such as, bringing in quality food, providing top notch service, and an overall goal and opportunity to bring people together.
1881 by Lake Elmo Inn and Property Management have negotiated a five-year lease for rentable space in Suites 110-117, Mezzanine, and T-204 - T-206. The term is from July 1, 2024, through June 30, 2029, with one additional optional five-year term. The anticipated opening of the restaurant is
July 18, 2024.
RCRRA will complete minor improvements for 1881 by Lake Elmo Inn upon execution of the lease.
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County Goals (Check those advanced by Action)
☐ Well-being ☐ Prosperity ☒ Opportunity ☐ Accountability
Racial Equity Impact
The racial equity impact of the lease is unknown.
Community Participation Level and Impact
There is no community engagement for this lease agreement.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
This lease includes revenues based on a percentage of sales, varying by category, including 3% of on-site restaurant sales, 10% of on-site catering sales, and 5% of off-site catering sales. The terms of the agreement state that the percentage of on-site restaurant sales will not be collected for the period of July 1, 2024 - April 30, 2025, while the percentage of catering sales will be collected as of the commencement date of the lease.
Due to the decline in operations of the previous occupant of the restaurant space at the Union Depot, revenues related to the restaurant will be lower than originally budgeted for in 2024. However, overall revenue forecasts as of Q1 2024 remain favorable.
This lease includes a tenant allowance for tenant improvements in the amount of $65,000. This cost will be covered by the existing Union Depot operating budget for 2024.
Last Previous Action
None.
Attachments
1. Lease Agreement