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1� Item 7. <br /> • City of <br /> Elk <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Marc Nevinski, Assistant Director of Economic Development <br /> DATE: May 14, 2001 <br /> SUBJECT: Consider SolarAttic Request for Market Rate Incubator Lease <br /> Issue <br /> SolarAttic has requested that the EDA renew its market rate lease at the businesses <br /> incubator. The EDA is asked to consider the request. <br /> Background <br /> • SolarAttic is the manufacturer of a technology that draws heat from attic areas to heat <br /> space, water, and pools. Beginning in 1997, SolarAttic spent three years as an incubator <br /> company, bartering stock in lieu of cash rent. Companies are generally limited to two <br /> years in the incubator. In 2000, due to vacancies at the incubator, the EDA granted the <br /> company's request to lease incubator space for cash rent. <br /> Until last year, SolarAttic had leased a total of 3200 sf in two suites. To reduce costs, <br /> at the end of last year the company vacated the larger of the two suites where it <br /> assembled its products. Product assembly continues at an off site location on an "as <br /> needed" basis. The company continues to conduct its sales and administrative activities <br /> in a 1000 sf suite and is currently paying a lease rate of$4.50 per sf. <br /> Recommendation <br /> Genesis Business Centers, the EDA's incubator consultant, has expressed optimism <br /> that the recent rise of energy prices combined with the background of a newly elected <br /> board member will result in the company's success. Staff recommends, given the <br /> availability of space at the incubator, that the EDA consider a market rate lease for <br /> SolarAttic with the following terms: <br /> • Twelve month lease in current suite <br /> • Rate: $6.50/sf (Office space in Elk River is generally between $8-12/sf) <br /> • 45 days notice if space is needed <br /> i <br />