Title
Authorization to Lease City-owned Property Located Near 99th and Southern Avenues to K-B Farms, LLC (Ordinance S-45991)
Description
Request to authorize the City Manager, or his designee, to enter into a lease with K-B Farms, LLC for approximately 6.9 acres of undeveloped City-owned land in the vicinity of 99th and Southern avenues for farming purposes. Further request to authorize the City Treasurer to accept all funds related to this item.
Report
Summary
The City-owned land was acquired for the Tres Rios Wetlands project and is being held for future project development. Approximately 6.9 acres of the undeveloped land will be leased as an interim use to generate revenue and reduce maintenance. The area to be leased does not have roadway frontage but is adjacent to a farm along 99th Avenue. K-B Farms, LLC will be responsible for obtaining access from the adjoining property owners prior to commencement of the lease.
The lease will be for a period of three years with two, one-year options to extend. Rent during the first year of the three-year term will be $180 per acre per year, plus applicable taxes, which is within the range of market rents as determined by the Real Estate Division. Rent will increase 3 percent annually beginning the second year of the initial term and each year thereafter, including the option periods.
K-B Farms, LLC shall provide insurance and indemnification acceptable to the City of Phoenix Finance Department's Risk Management Division and Law Department. The lease may be canceled pursuant to ARS 38-511, or upon 90-days prior written notice. The lease may contain other terms and conditions deems necessary by the City.
Contract Term
Three years with two one-year options to extend.
Financial Impact
Annual revenue during the first year will be $1,242 plus applicable taxes.
Location
West of 99th Avenue and south of Southern Avenue, identified by assessor parcel number 101-49-002L and a portion of 101-49-002K.
Council District: 7 and Out of City
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Water Services and Finance departments.