Title
Ground Lease with John F. Long Properties, LLLP (Ordinance S-45306)
Description
Request to authorize the City Manager, or his designee, to enter into a ground lease with John F. Long Properties, LLLP (JFL) for up to 3.5 acres of Aviation Department-owned property located north of Luke Air Force Base. The first year rent will be approximately $17,449 ($0.12 per square foot); rent will be adjusted annually thereafter based on the Consumer Price Index.
Report
Summary
Aviation owns approximately 900 acres of land located north of Luke Air Force Base. The majority of this land is being leased to G-Farms Partnership (G-Farms) as farm land. A small portion of this area consists of a railroad line owned by BNSF Railway (BNSF), which was granted access rights under a perpetual easement executed in 1940. JFL has requested access to and use of up to 3.5 acres of this property to build a railroad spur that will connect its property to the existing rail owned by BNSF. The land needed to construct the rail spur is relatively small; the remaining acreage will be used for flood control management.
This agreement is contingent on amending G-Farms’ ground lease in order to remove the 3.5 acres of property from G-Farms’ leasehold.
Contract Term
The term of the lease will be 30 years.
Financial Impact
The first year rent will be approximately $17,449 ($0.12 per square foot); rent will be adjusted annually thereafter based on the Consumer Price Index. Net rent over the 30-year term is approximately $523,000. The rent was determined based on an independent, third party appraiser’s determination of fair market value of the area.
Concurrence/Previous Council Action
This item was recommended for approval by the Phoenix Aviation Advisory Board Business and Development Subcommittee on Dec. 6, 2018 by a vote of 3-0.
Location
Near Peoria Avenue and Litchfield Road.
Council District: Out of City
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.