Title
Request to Enter into a Lease Agreement with Laveen Elementary School District No. 59 to use Unimproved City owned Property located North of the Northeast Corner of S. 59th Avenue and West Olney Avenue for Public School Facilities (Ordinance S-51859) - District 8
Description
Request to authorize the City Manager, or his designee, to enter into a 75-year Lease Agreement with Laveen Elementary School District No. 59 for use of unimproved City owned property located north of the northeast corner of S. 59th Avenue and W. Olney Avenue in Phoenix, Arizona for the purpose of constructing, maintaining, and operating public-school facilities. Further request to authorize the City Treasurer to accept all funds related to this item.
Additionally, request the City Council to grant an exception pursuant to Phoenix City Code § 42-20 to authorize inclusion in the documents pertaining to this transaction of indemnifications and assumption of liability provisions that otherwise would be prohibited by Phoenix City Code § 42-18, as tenancy agreements include such provisions.
Report
Summary
The Parks and Recreation Department agrees to lease approximately 20 acres of unimproved real property located north of the northeast corner of S. 59th Avenue and W. Olney Avenue in Phoenix, Arizona to Laveen Elementary School District No. 59 for constructing, maintaining, and operating public-school facilities and related activities, together with any related administrative uses. The construction of the school shall include all related infrastructure including but not limited to, ingress and egress, parking, half street improvements, sidewalks, and bus bays to be financed and constructed by the Laveen School District within the leased area in accordance with all zoning, permitting, and environmental requirements.
The term of the Lease Agreement shall be for 75 years beginning July 1, 2025. Base rent will be $78,400 per year, plus applicable rental taxes, and will increase three percent every year thereafter, which is within the range of market rents as determined by the Finance Department's Real Estate Division. Alternatively, the District may pay the base rent in a lump sum of not less than $5,800,000.
Concurrently with this Lease Agreement, the Parks and Recreation Department and Laveen School District have entered into an Intergovernmental Agreement ("IGA") for the shared use and operation of municipal park facilities on a portion of the Premises.
Contract Term
The term of the Lease Agreement is 75 years, beginning July 1, 2025.
Financial Impact
Rent beginning July 1, 2025 will be $78,400, plus applicable rental taxes. Rent will increase three percent every year thereafter. Alternatively, the District may pay the base rent in a lump sum of not less than $5,800,000 by July 10, 2025.
Concurrence/Previous Council Action
This item was approved by the Phoenix Parks and Recreation Board on August 25, 2022.
Location
North of the northeast corner of S. 59th Avenue and W. Olney Avenue, identified by Maricopa County Assessor parcel number 300-02-060B.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager John Chan and the Parks and Recreation and Finance departments.