FARMINGTON - The United States Department of Agriculture has signed a contract for office space inside Farmington City Hall that could sprout into a 20-year lease.

The USDA office is currently housed next to Dakota County Fairgrounds in a county building off Ash Street.

For nine months, city staff and USDA negotiated. Farmington City Council unanimously approved the lease contract Monday, Feb. 5.

"City Hall has plenty of available space to rent out this portion of the expansion to the USDA, and the City Council decided years ago to take action to eliminate barriers and renting out space at City Hall was a priority," said David McKnight, city administrator.

The lease calls for 2,270 square feet of office space from the nearly 5,000 square feet of available. The federal office will share conference rooms, break rooms and bathrooms with city staff.

Randy Distad, parks and recreation director, was at the forefront.

"I cannot stress enough the amount of work that was required from Mr. Distad to make the submittal possible, and without Randy, the City Council would not be considering this lease," McKnight said.

"Thank you for sticking with it," Mayor Todd Larson said.

The USDA will occupy second-floor space used by Farmington Library during its renovations a few years ago.

The lengthy contract consists of a ream of paper. Details can be found on the city website.

The USDA will pay the city $29,545 each year for the first 10 years, and potentially $19,575 annually in years 11-20.

The lease calls for the city to fund a $113,000 buildout on the second floor. Costs will be recovered in rent in the first 10 years. If the USDA terminates the lease prior to 10 years, the agency will be responsible for repaying those costs.

"City staff will determine which fund is best fit to offer this internal loan and bring it back to the appropriate agreements for City Council consideration and approval," McKnight said.

"We should be clear, that of their annual rent payment it is entirely eaten up both by paying the inter fund loan to build the space out and maintain the space upstairs," McKnight added.

A moving date will determined once renovations are complete.

Choosing to lease to another governmental partner is a natural fit for both organizations, he said.

Parking may be an issue.

"I do think it is appropriate we notify businesses located on Oak Street that the USDA will be coming to City Hall and their employees not park in the City Hall parking lot," McKnight explained.

Dakota Motors in downtown Farmington use the city's Second Street parking lot. The city will suggest the company make adjustments to parking lot usage.

The USDA will have two full-time staff plus federal staff coming in from out of state.

Council Member Katie Bernhjelm said, "I think it is worth noting that with the additional traffic from visitors and guests, it will be a good thing for downtown."

Editor's note: A earlier version of this story incorrectly stated the years of the USDA payments.