Title
Authorization to Amend Lease with Arizona Public Service Company to Extend Term for Electrical Substation at Cave Creek Water Reclamation Plant (Ordinance S-44871)
Description
Request to authorize the City Manager, or his designee, to amend Contract 83529 with Arizona Public Service Company (APS) to extend the term for one year with one, one-year renewal option. Further request authorization for the City Treasurer to accept all funds related to this item.
Report
Summary
APS leases 1.783 acres of land at the Water Services Department's Cave Creek Water Reclamation Plant. APS uses the site for operating an electrical power substation that serves the plant and third-party demands for electricity. The contract with APS is in its final option period and expires Aug. 11, 2018. APS is a long-term tenant in good standing at this location and has requested to extend the term for one year with one, one-year renewal option. Annual base rent during the extended term will be $20,972.15, plus applicable taxes, which is within the range of market rents as determined by the Finance Department's Real Estate Division. Rent at the beginning of the renewal option period will increase at a flat rate of three percent, plus applicable taxes.
Contract Term
The contract will be amended to extend the term for one year, commencing Aug. 12, 2018, with one, one-year renewal option to be exercised upon mutual agreement by the City and APS.
Financial Impact
Revenue during the first year of the extended term will be $20,972.15, plus applicable taxes.
Concurrence/Previous Council Action
Contract 83529 was authorized by Ordinance S-25262, adopted June 3, 1998.
Location
Near the northeast corner of Cave Creek Road and Deer Valley Drive.
Council District: 2
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher, Deputy City Manager Karen Peters, and the Water Services and Finance departments.