Title
Technical Corrections to Amend Ordinance S-48550 for Lease of Property at 8114 N. Black Canyon Highway (Ordinance S-49177)
Description
Request to authorize the City Manager, or his designee, to amend Ordinance S-48550, authorizing the lease of certain real property and improvements located at 8114 N. Black Canyon Highway, to correct clerical errors, specify the number of options to extend the lease term, permit exceptions to the indemnification and limitation of liability provisions codified in the Phoenix City Code and authorize the right of the City to purchase the property at any time during the lease term subject to certain agreed upon terms between the parties.
Report
Summary
On April 20, 2022, the City Council authorized the acquisition of the property located at 2526 W. Northern, Ordinance S-48504, and the leasing of certain real property and improvements located at 8114 N. Black Canyon Highway, Ordinance S-48550 (the Lease). Staff has since entered into negotiations with the lessor and have identified items in the Lease that require clerical correction and clarification. The ordinance will be revised to reflect the following changes:
- The number of options to extend the lease term lease shall be seven (7), 10-year renewal options.
- A clerical correction for the annual lease rate increase to 2.5 percent. This was the rate agreed upon during initial discussions. The 2.4 percent figure is a clerical error.
- Addition of exceptions to the indemnification and limitation of liability provisions codified in the Phoenix City Code.
- Authorize the right of the City to purchase the subject property at any time during the lease term. If purchased at any time within the first 10 years of the lease term, the seller shall reduce the purchase price paid by the City for the subject property by a prorated amount to be agreed upon and negotiated between the parties.
All other terms under Ordinance S-48550 remain the same.
Contract Term
The initial contract term will remain at 25 years. The number of lease extension options will be seven, 10-year renewal options.
Financial Impact
There is no financial impact as a result of this action.
Concurrence/Previous Council Action
City Council approved entering into a lease for the property located at 8114 N. Black Canyon Highway on April 20, 2022.
Location
8114 N. Black Canyon Highway.
Council District: 5
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Community and Economic Development Department.