Title
Authorization to Amend Lease Agreement 141438 for Real Property Located at 425 E. Buckeye Road from LRF3 PHX Buckeye Rd LLC (Ordinance S-52734) - District 8
Description
Request to authorize the City Manager, or his designee, to amend Lease Agreement 141438 with LRF3 PHX Buckeye Rd LLC at 425 E. Buckeye Road to extend the term for five years, with two additional five-year automatic renewals. Further request authorization for the City Controller to disburse all funds related to this item.
Additionally, request the City Council to grant an exception pursuant to Phoenix Code § 42-20 to authorize inclusion in the documents pertaining to this transaction of indemnification and assumption of liability provisions that otherwise would be prohibited by Phoenix Code § 42-18, which is a necessary condition of the tenancy agreement.
Report
Summary
The Police Department currently leases approximately 43,200 square feet of industrial warehouse space for the purpose of parking special operations vehicles, storage of equipment for the search and recovery dive team and information technology support hardware and other department activities. The Department desires to continue operating at this location. The current lease expires August 31, 2026, and will be extended for five years beginning September 1, 2026, through August 31, 2031, with two additional five-year renewals. Base rent during the initial year will be $54,000 per month, plus applicable taxes, which is within the range of market rents as determined by the Real Estate Division. The rent will increase by three and a half percent per year, thereafter.
Contract Term
The lease term will be for five years, beginning September 1, 2026, and ending August 31, 2031, with two additional five-year automatic renewals.
Financial Impact
The lease allows for abatement of rent during the first four months of the initial term beginning September 1, 2026, therefore rent for the initial year is $432,000, plus applicable taxes, beginning September 1, 2026. Rent will increase three and a half percent per year thereafter.
Concurrence/Previous Council Action
- City Council Approved Lease Agreement 141438 (Ordinance S-41691) on May 27, 2015.
Location
425 E. Buckeye Road
Assessor's Parcel Numbers: 112-33-059J, 112-33-059K, 112-33-970A
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Lori Bays and the Police and Finance departments.