Title
Amend City Contract No. 111 - Lease Extension of City-Owned Property at 723 W. Polk Street with the American Legion Post No. 1 (Ordinance S-47830)
Description
Request to authorize the City Manager, or his designee, to amend City Contract No. 111, and any other agreements as necessary (Amendment), with the American Legion Post No. 1, a nonprofit service organization for military veterans (Legion), to extend the lease term for the Legion's use of City-owned property located at 723 W. Polk Street, also known as 364 N. 7th Avenue (the Site), accept real property, and modify certain business terms. Further request authorization for the City Treasurer to accept funds related to this item. There is no expense impact to the General Fund as a result of this action. The lease extension will generate $300 in total revenue to the General Fund.
Report
Summary
On Feb. 20, 1920, the City and Legion entered into a 99-year lease of the 1.7 acre Site for the purpose of creating a location and facility for the Frank Luke Jr. Post No. 1 of the American Legion. The lease agreement terminated on Feb. 20, 2019, pursuant to the terms of the contract. On Sept. 5, 2018, the City Council authorized an extension to the lease which terminated on Aug. 1, 2020, allowing the Legion to celebrate the 100th anniversary of the Legion and Post No. 1 in the building. City staff sent a lease amendment to the Legion for execution; however, the Legion never signed it but has continued to occupy the Site. Concurrently, the Community and Economic Development Department (CEDD) is negotiating the terms of a disposition and redevelopment agreement for the Site, pursuant to a Request for Proposal (RFP) authorized by City Council on June 26, 2019. At a future date, CEDD will seek City Council authorization to enter into a disposition and redevelopment agreement with the responsive proposer of that RFP.
The Legion notified the City that the American Legion's 102nd National Convention will be held in Phoenix in August 2021 and the Frank Luke Jr. Post No. 1 will be showcased as one of the original American Legion posts in the U.S. The proposed amendment would allow the Legion to remain in the building through the National Convention.
Subject to City Council authorization, the following business terms have been negotiated with the Legion and would be implemented through the Amendment.
Term shall be retroactively extended from Feb. 20, 2019 to up to Aug. 1, 2022.
Legion shall provide the City with the following consideration for the lease extension: a) Pay rent of $100 per year for the extension (including previous rental payments owed for years 2019-20 and 2020-21, for a total of $300; b) Provide the equivalent of not less than $6,400 per year of in-kind public benefit services, to be coordinated with, and monitored by, the CEDD. The Legion shall document the in-kind public benefit services for years 2019-20 and 2020-21, or pay to the City a make-up payment of up to $6,400 per year if the Legion does not sufficiently document the in-kind public benefits; and c) Transfer ownership of APN 111-30-085C, a small parcel adjacent to the Site, to the City, at no cost to the City.
Legion shall be responsible for all public and private utilities and property expenses.
Legion shall not renew the lease term of any third party billboard leases on the site.
Legion shall provide insurance and indemnification acceptable to the City.
Amendment may include other terms and conditions deemed necessary or appropriate by the City Manager or his designee.
Contract Term
This Amendment will extend the lease term until up to Aug. 1, 2022, unless earlier terminated by the City.
Financial Impact
There is no expense impact to the General Fund as a result of this action. The Amendment will create a one-time lease payment of $300 which will be deposited into the General Fund.
Concurrence/Previous Council Action
Resolution 524, authorizing this contract, was passed by the Commission of the City of Phoenix on March 3, 1920. Ordinance S-44976, authorizing the first amendment, was passed by the City Council on Sept. 5, 2018, but the amendment was never executed.
Location
723 W. Polk Street (also known as 364 N. 7th Ave.)
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Community and Economic Development Department.