NEW ULM — A lease agreement for Westridge Place was approved by the New Ulm Economic Development Authority (EDA).

The new lease agreement provided clarifications on insurance requirements and maintenances issue for renters of the pod spaces at Westridge Place.

Last year, the New Ulm Economic Development Authority (EDA) purchased a property at 1314 Westridge Road to create a facility to operate a pod model day care to alleviate the pressure of the day care shortage in New Ulm. The building, now called Westridge Place, has space to accommodate four private day care providers.

In June, the EDA reviewed a draft of the lease agreement but tabled a decision until they could work out questions regarding insurance coverage. The EDA board wanted to keep rent low for the daycare space at between $200 and $300 a month. However, insurance coverage for daycare providers was estimated to cost $2,400.

Tuesday, the board reviewed a revised lease agreement that does provide liability waivers. City Manager Chris Dalton said pod space renters could sign a wavier for water activity liability, dog and cat liability and director/officer liability.

Tom Furth, insurance agent for EDA and New Ulm said water activity liability is relatively expensive. He and staff put the waiver into the lease agreement. By signing this waiver the daycare providers would promise in writing that there would be no water activities at the daycare. In pratical terms, this would mean no kiddie wading pools at the facilities.

The dog and cat bite liability waiver would be a written promise no animals would be brought to the daycare.

The director/officer liability is generally only needed if the daycare has a board of directors. It is expected none of the renters for the space would be large enough to have a board of directors.

With these optional waivers it was believed the insurance would not be cost prohibitive for most daycare providers.

Board member Les Schultz asked if monthly rent could be further reduced to off-set the cost of insurance.

Housing Coordinator Heather Bregel said she wanted the renters to have some ownership in the space. Currently, each lease is for two years. Bregel was concerned that if rent was too low, a provider could easily buy out the lease after a few months and leave.

Bregel said they conducted financial feasibility studies with First Children’s Finance. Even if the insurance premiums are on the high end, a daycare business could still be financially feasible.

Board member Michelle Markgraf had questions about who was responsible for maintenance and repairs at Westridge. As an example, if the air conditioning unit went out would the EDA or the renter be responsible for repairs?

Dalton said the lease does require the EDA keep the building up to code, which includes maintenance. If an air conditioner failed, the EDA would need to provide repairs. If damage was caused by the renter, the repairs would be made at the renter’s expense.

New Ulm City Attorney Robert Scott said he felt the revised lease would cover the EDA’s needs.

“I don’t think it is overkill,” Scott said. “I think you are doing something novel here by having this kind of use within a city facility. I think as you go, if you encounter any problems the lease does not address, we can always amend it to meet both parties needs.”

Schultz made the motion to approved the revised lease for Westridge Place Pod Model Daycare. It was unanimously approved.