22.05.055 Length of Lease Term.
(a) The length of term for an initial lease shall be based on the amount of investment the applicant proposes to make in the construction of new permanent improvements on the premises as provided in the application. The City Council may offer a shorter lease term, if the City Council makes specific findings that a shorter lease term is in the best interest of the City.
(b) The maximum term of a lease shall be determined according to the following term table and cannot exceed forty-five (45) years:
APPLICANT’S INVESTMENT/VALUE | MAXIMUM TERM OF YEARS |
|---|---|
$7,500 | 5 |
15,000 | 6 |
22,500 | 7 |
30,000 | 8 |
37,500 | 9 |
45,000 | 10 |
52,500 | 11 |
60,000 | 12 |
67,500 | 13 |
75,000 | 14 |
82,500 | 15 |
90,000 | 16 |
97,500 | 17 |
105,000 | 18 |
112,500 | 19 |
120,000 | 20 |
127,500 | 21 |
135,000 | 22 |
142,500 | 23 |
150,000 | 24 |
157,500 | 25 |
165,000 | 26 |
172,500 | 27 |
180,000 | 28 |
187,500 | 29 |
195,000 | 30 |
202,500 | 31 |
210,000 | 32 |
217,500 | 33 |
225,000 | 34 |
232,500 | 35 |
240,000 | 36 |
247,500 | 37 |
255,000 | 38 |
262,500 | 39 |
270,000 | 40 |
277,500 | 41 |
285,000 | 42 |
292,500 | 43 |
300,000 | 44 |
307,500 | 45 |
(c) Lease Extension. The length of term for a lease extension shall be determined based on the remaining term of the initial lease and the estimated cost of new investment the applicant proposes to make in the construction of new permanent improvements on the premises according to the term table and provided no extension shall extend a lease term past forty-five (45) years.
(d) Lease Renewal for an Existing Lease. A renewal for an existing lease requires the construction of new permanent improvements, and the length of term for a lease renewal for an existing lease shall be determined as follows:
(1) Based on the remaining term of the initial lease according to the term table and the estimated cost of new investment the applicant proposes to make in the construction of new permanent improvements on the premises according to the term table; or
(2) Pursuant to a transaction between the current lessee and a new buyer and prospective lessee and based on the purchase price of existing real property improvements on the premises, as certified by the current lessee and the proposed purchaser in the bill of sale or purchase agreement, to be executed at closing of the transaction and the estimated cost of new investment in the construction of new permanent improvements on the premises according to the term table.
(3) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(e) Lease Renewal for an Expiring Lease. The length of term for a lease renewal of an expiring lease shall be determined as follows:
(1) The purchase price of existing real property improvements on the premises, as certified by the current lessee and the proposed purchaser in the bill of sale or purchase agreement, to be executed at closing of the transaction and the estimated cost of any new investment in the construction of new permanent improvements on the premises according to the term table; or
(2) A professional estimate of the remaining useful life of the real property improvements on the premises, paid for by the applicant, and the estimated cost of any new investment in the construction of new permanent improvements on the premises according to the term table; or
(3) A fair market value appraisal of the existing real property improvements on the premises, paid for by the applicant, and the estimated cost of any new investment in the construction of new permanent improvements on the premises according to the term table.
(4) The term for renewal of an existing lease cannot exceed forty-five (45) years.
(f) If the initial lease, term extension, or lease renewal granted to the applicant requires construction of new permanent improvements, the lease or term extension shall be subject to the following conditions:
(1) The lessee to complete the proposed permanent improvements within two (2) years except in special circumstances that require a longer period of time and which must be approved by the City Council.
(2) The lessee to provide a performance bond, deposit, personal guarantee, or other security if the City Council determines security is necessary or prudent to ensure the applicant’s completion of the permanent improvements required in the lease, renewal, or extension. The City Council shall determine the form and amount of the security according to the best interest of the City, after a recommendation by the City Manager considering the nature and scope of the proposed improvements and the financial responsibility of the applicant.
(3) At no expense to the City, the lessee must obtain and keep in force, during the term of the lease, insurance of the type and limits required by the City for the activities on the premises.
(4) Within thirty (30) days after completion of the permanent improvements, the lessee shall submit to the City written documentation that the improvements have been completed as required. The City Manager shall make a report to the City Council of completion as soon as reasonably practical.
(5) If the applicant shows good cause and the City Council determines the action is in the best interest of the City, the City Council may grant an extension of the time allowed to complete permanent improvements by resolution that is sufficient to allow for the completion of the permanent improvements or for submission of documentation that the permanent improvements have been completed.
(6) If, within the time required, the applicant fails to complete the required permanent improvements, the City shall:
(i) If the application is for a new lease or lease renewal, execute the forfeiture of the performance bond, deposit, personal guarantee, or other security posted by the applicant under subsection (f)(2) of this section to the extent necessary to reimburse the City for all costs and damages, including administrative and legal costs, arising from the applicant’s failure to complete the required improvements, and/or initiate cancellation of the lease or reduce the term of the lease to a period consistent with the portion of the improvements substantially completed in a timely manner according to the best interest of the City.
(ii) If the application is for a lease extension, the City shall terminate the amendment extending the term of the lease or reduce the term of the extension at the City’s sole discretion.
(Repealed and Reenacted Ord. 3072-2019 (Substitute))