7.0. EDSR 05-14-2001 1� Item 7.
• City of
Elk
River
MEMORANDUM
TO: Economic Development Authority
FROM: Marc Nevinski, Assistant Director of Economic Development
DATE: May 14, 2001
SUBJECT: Consider SolarAttic Request for Market Rate Incubator Lease
Issue
SolarAttic has requested that the EDA renew its market rate lease at the businesses
incubator. The EDA is asked to consider the request.
Background
• SolarAttic is the manufacturer of a technology that draws heat from attic areas to heat
space, water, and pools. Beginning in 1997, SolarAttic spent three years as an incubator
company, bartering stock in lieu of cash rent. Companies are generally limited to two
years in the incubator. In 2000, due to vacancies at the incubator, the EDA granted the
company's request to lease incubator space for cash rent.
Until last year, SolarAttic had leased a total of 3200 sf in two suites. To reduce costs,
at the end of last year the company vacated the larger of the two suites where it
assembled its products. Product assembly continues at an off site location on an "as
needed" basis. The company continues to conduct its sales and administrative activities
in a 1000 sf suite and is currently paying a lease rate of$4.50 per sf.
Recommendation
Genesis Business Centers, the EDA's incubator consultant, has expressed optimism
that the recent rise of energy prices combined with the background of a newly elected
board member will result in the company's success. Staff recommends, given the
availability of space at the incubator, that the EDA consider a market rate lease for
SolarAttic with the following terms:
• Twelve month lease in current suite
• Rate: $6.50/sf (Office space in Elk River is generally between $8-12/sf)
• 45 days notice if space is needed
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