Title
Lease of Real Property from Calvary United Methodist Church for the Head Start Birth to Five and Early Head Start Home Programs (Ordinance S-49125)
Description
Request to authorize the City Manager, or his designee, to lease real property from Calvary United Methodist Church for the City of Phoenix Head Start Birth to Five Program for 20 years plus two, five-year options to extend. Further request authorization for the City Controller to disburse all funds related to this item.
Report
Summary
The Human Services Department desires to lease real property at 7949 W. Indian School Rd. from Calvary United Methodist Church (CUMC) to operate the City of Phoenix Head Start Birth to Five Program (COPB5). Leasing will expand the program by adding space for two full-day classrooms for up to 40 children, office space for COPB5 programs, and a family resource center.
The main leased site includes two buildings with approximately 18,138 square feet made up of offices, classrooms, a kitchen, three outdoor playgrounds, and 20 parking spaces. Monthly base rent is $6,300, plus applicable taxes, which is within market rent as determined by the Finance Department's Real Estate Division. Base rent will be increased annually by one and one-half percent and adjusted every five years to the then market rent.
The main leased site will be renovated pursuant to the Arizona Department of Health Services, Child Care Licensing and the Head Start Program Performance Standards requirements and the operational needs of the COPB5 program by utilizing funds allocated to the City from the U.S. Department of Health and Human Services, Office of Head Start. During renovation of the main leased site, the City will lease an approximate 3,534 square foot annex building for six months with six, one-month options to extend, to begin outreach and administrative functions related to the opening of the COPB5 programs and family resource center. Monthly base rent for the annex building is $2,300, plus applicable taxes, which is within market rent as determined by the Finance Department's Real Estate Division. The City may periodically lease the annex building on a short-term basis, as needed, and as available when occupying the main leased site. The rental rate during any extension period of the annex building will be based on the market rate as determined at that time.
The City will be responsible for operating and maintenance costs, and CUMC will be responsible for structural repairs. The lease may be canceled pursuant to ARS 38-511, or upon 365-day written notification by the City. The lease may contain other terms and conditions acceptable to the City based on use. The lease will include insurance and indemnification provisions acceptable to the City's Risk Management Division and Law Department.
Contract Term
The term of the main leased site, beginning on or about Jan. 1, 2023, will be for a 20-year period with two additional five-year options to extend. The initial term of the annex building will be six months with six, one-month options to extend.
Financial Impact
Annual rent for the main leased site during the initial year is $75,600, plus applicable taxes, to be abated for the first six months of the lease during renovations and occupancy of the annex building. Rent during the six-month term for the annex space is $13,800, plus applicable taxes. Funds are available through the U.S. Department of Health and Human Services, Office of Head Start, allocated through the Human Services Department.
Location
7949 W. Indian School Rd., identified by Maricopa County Assessor parcel number 102-66-127C.
Council District: 5
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Human Services and Finance departments.