Request for Committee Action
A briefing memo explaining the purpose, background, and impact of the requested action.
Temporary lease with the United States Postal Service: 10 W Lake St (RCA-2021-01112)
ORIGINATING DEPARTMENT
To Committee(s)
| # | Committee Name | Meeting Date |
|---|---|---|
| 1 | Business, Inspections, Housing & Zoning Committee | September 28, 2021 |
Action Item(s)
| # | File Type | Subcategory | Item Description |
|---|---|---|---|
| 1 | Action | City Property | Authorizing the City to enter into a lease agreement with the United States Postal Service for space at 10 W Lake St through March 31, 2023, with two three-month extensions at the option of the Director of Community Planning and Economic Development.. |
Ward / Neighborhood / Address
| # | Ward | Neighborhood | Address |
|---|---|---|---|
| 1. | Ward 10 | Whittier | 10 W Lake St, Minneapolis, MN |
Background Analysis
This action approves extending the lease between the City of Minneapolis and the United States Postal Service (USPS) for a temporary post office in the former Kmart building. A temporary post office began operating out of 10 W Lake St under a lease with the City on August 1, 2020. The location provides temporary postal services for two Minneapolis zip codes - 55408 and 55406, both of which lost their permanent building during the civil unrest in the summer of 2020.
The 55408 station at 110 E 31st St suffered severe damage and the 55406 station at 3033 27th Ave S was destroyed, ending services out of that location as well. The USPS was not able to operate any of its services out of either location after the fires and damage and worked with the City to secure the temporary lease in the former Kmart building. Construction to rebuild the damaged space at the 55408 station is expected to be complete in the fall of 2022. The USPS expects to start construction of the 55406 station in the spring of 2022 and complete construction in late summer 2023.
The original temporary lease began August 1, 2020 and is set to expire on July 31, 2022. This action requests an additional eight months be added to the current end date, to March 31, 2023 with two, three-month extensions thereafter at the option of the CPED Director.
The attached standard USPS lease agreement contains the following key terms that differ from the first lease:
- Start date: August 1, 2022
- End date: March 31, 2023
- The USPS retains the right to request two three-month renewal options: (i) 04/01/2023 to 06/30/2023 and (ii) 07/01/2023 to 09/30/2023, with no change in rent, at the CPED Director's optional approval.
The attached standard USPS lease agreement contains the following key terms, and which remain unchanged from the first lease:
- Monthly rent: $30,416.67, due last day of the month ($10/sq ft)
- The leased space includes: ~36,500 sq ft of interior space on the western side of 10 W Lake St building and exclusive access to the loading dock. Build-out of this separate and secure postal center space to be paid for exclusively by the USPS.
- The USPS will pay all utility bills if they remain the sole tenant of the building.
- The USPS reserves the right to the use of up to 184 reserved parking spaces.
- USPS retains the option to terminate the Lease at any time upon 30 days prior written notice.
- City obligations include paying for all outdoor property maintenance, including snow removal, and maintaining all building systems.
- City maintenance, repair, and replacement obligations are capped at $365,000 annually.
Approving this temporary lease, to end no later than September 30, 2023, does not negatively impact the City’s plans for reopening Nicollet Ave and redevelopment of the site. With community engagement, and street design set to begin in 2021, there remains ample time to demolish the structure prior to any construction start.