Title
Authorization to Amend Farming Lease Agreement 152025 with K-B Farms, LLC, to Increase Acreage of the Leased Premises and Extend Term (Ordinance S-49911)
Description
Request to authorize the City Manager, or his designee, to amend Lease Agreement 152025 with K-B Farms, LLC, to increase acreage of the leased premises to approximately 7.94 acres and to extend the lease term for three years, plus three additional one-year options. Further request authorization for the City Treasurer to accept all funds related to this item.
Report
Summary
The Water Services Department owns approximately 41.64 acres of undeveloped land located west of 99th and Southern avenues. K-B Farms currently leases approximately 6.9 acres and is seeking to expand farming operations by 1.04 acres, increasing the leased premises to approximately 7.94 acres. Additionally, the term of the lease will be extended three years, plus three additional one-year options to extend. Annual rent at the beginning of the extended term is $196.69 per acre, plus applicable taxes, to be adjusted three percent annually during the three-year extension and at the beginning of each option period. As consideration for the extension, the tenant will forego the remaining term and options under the existing lease agreement.
K-B Farms is a long-term tenant in good standing. All other terms and conditions will remain the same.
Contract Term
Three years, beginning on or around July 1, 2023, plus three additional one-year options to extend.
Financial Impact
Annual revenue during the first year of the extended term will be $1,561.72, plus applicable taxes.
Concurrence/Previous Council Action
Agreement 152025 authorized by Ordinance S-45991, adopted Sept. 4, 2019.
Location
West of 99th and Southern avenues, within a portion of Maricopa County Assessor parcel numbers 101-49-002K, 101-49-002L, and 101-49-008A.
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Water Services and Finance departments.