Title
***REQUEST TO CONTINUE (SEE ATTACHED MEMO)*** (CONTINUED FROM MARCH 26, 2025) - Authorization to Amend Ground Lease Agreement 9542 with Christown 1755, LLC to Modify the Term and Expand the Premises (Ordinance S-51728) - District 4
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Lease Agreement 9542 with Christown 1755, LLC to modify the term and expand the premises of the ground lease for the Yucca Library. Further request to authorize the City Controller to disburse all funds related to this item.
Additionally, request the City Council to grant an exception pursuant to Phoenix City Code Section 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 City Code Section 42-18, as tenancy agreements include such provisions.
Report
Summary
The City entered into a ground lease beginning September 8, 1960, Lease Agreement 9542, for 43,560 square feet of land located at 5648 N. 15th Avenue (Leased Site) for the Yucca Library. The ground lease expires June 13, 2057. The City intends to expand the library to include an approximate 10,000 square foot addition to the existing building. To accommodate this addition, the Leased Site will expand to include approximately 72,830 square feet of land, identified by Assessor Parcel Number 156-35-004G, for a total of 116,390 square feet of land. Additionally, the lease term will be amended to a 50-year term, beginning July 1, 2025, through June 30, 2075, for continuation of municipal public library services and because of the capital investment necessary for the addition.
Base rent will be $5,000 per month, plus applicable taxes, and will increase ten percent every five years thereafter, which is within the range of market rents as determined by the Real Estate Division. The City is responsible for all development and construction costs for the expansion and for real estate taxes associated with Leased Site. The City is responsible for ongoing maintenance and improvement costs, including landscaping.
Contract Term
The contract term of the ground lease is 50 years beginning July 1, 2025, through June 30, 2075.
Financial Impact
Rent during the first five years of the lease agreement is $60,000 per year, plus applicable taxes, beginning July 1, 2025. Rent will increase ten percent every five years.
Concurrence/Previous Council Action
Lease Agreement 9542, authorized by Ordinance 3825, was adopted October 25, 1966.
Location
5648 N. 15th Avenue
Council District: 4
Department
Responsible Department
This item is submitted by Assistant City Manager Inger Erickson and the Library and Finance departments.