3.20.090 Leasing of real property.
A. Property Available for Leasing. All real property which the city owns, or in which the city has right, title and interest, or to which the city may become entitled, may be leased as provided in this chapter. The term “property” as used in this chapter shall include these interests in real property.
B. Term. No lease shall be for a term of more than 20 years unless the council shall determine from the purpose, use of the premises, and nature of improvements which may be placed thereon that a longer term would benefit the city and would be consistent with city planning. A lease shall first be approved by the city council. Any renewal period or option to renew the lease period shall be included in the term of the lease.
C. Appraisals.
1. Property in General. No property shall be leased or a renewal lease issued unless the property to be leased has been appraised by the city within one year prior to the date contemplated for the commencement of the lease, unless the council, in its discretion, determines that an appraisal is unnecessary.
2. Airport Properties. Airport properties shall be leased in accordance with Federal Aviation Administration requirements associated with aeronautical and nonaeronautical uses and may be appraised by the city when it is determined that it is in the best interests of the airport to do so.
D. Lease Auction. Unless otherwise provided in this chapter, property shall be leased to the highest bidder at a lease auction.
E. Notice. Unless otherwise provided in this chapter, notice of a proposed lease of property shall be published not less than two weeks prior to bid opening date in a newspaper of general circulation in the city. The notice shall set forth a description of the property with interest therein to be leased, and the time, place, and any terms or limitations of the lease auction. Notice shall not be required if the term of the lease is two years or less. Where the lease contains a provision permitting the renewal, extension or modification of the lease, notice is not required for the renewal, the exercise of the option or the modification. The council may waive the requirement of public notice and auction for a lease of property on which substantial improvements are to be placed, or have been placed, when the council, in its discretion, determines from the circumstances of the transaction, the size, location, nature, rentals, terms, proposed use and purpose of the property that a negotiated lease of the property would not substantially affect the fair rental value of the property.
F. Fair Rental Value. Except as provided in subsection (C)(2) of this section, property shall be leased for a fair rental value. “Fair rental value” is the rental computed from the appraised fair rental value of the property and shall mean the highest price described in terms of money for which the property would rent, if exposed for rent for a reasonable time in the open market, for the use permitted by the city. With approval by the city council, the lease of property may be made for a rental less than the fair rental value to a state or federal agency, state political subdivision or nonprofit organization as may be determined by the city manager to be fair and proper, considering the public interest and the nature of the public use or function of the leased premises. Fair rental value shall not be required where the property interest of the city is subject to any term or condition restricting or limiting the ability of the city to obtain the fair rental value of the property.
G. Adjustment of Rental. A lease having a term of more than two years shall provide for adjustment of rentals at specified intervals during the term of lease, and the intervals shall be every five years. This section shall be incorporated in each lease by reference and enforceable as if fully set forth therein.
H. Renewal of Lease. The renewal or extension of the lease shall be considered as a new lease unless renewal or extension is provided for in the lease.
I. Improvements and Chattels. The lease shall provide the terms, conditions and limitations of the removal or reversion of improvements or chattels upon the lease premises after termination of the lease. The retiring lessee may, with the consent of the city manager, sell the improvements to the succeeding lessee. If the improvements or chattels are not removed within the time set forth in the lease, the improvements and chattels may, upon reasonable notice to the lessee, be sold at public sale to be provided by regulations of the city manager. Proceeds of the sale shall be first applied to the city’s costs and expenses of maintaining, removing and selling the improvements and chattels and to rentals for the period of nonremoval. The city may bid at the sale and may be credited with the value of the city’s costs, expenses and rentals due resulting from the nonremoval of the improvements or chattels. The city shall have all other rights, both legal and equitable, any other purchaser would have or acquire by reason of the sale. In addition, should the lease so provide, if the improvements or chattels are not removed within the time set forth in the lease, the improvements and chattels may become the property of the city.
J. Inspection. The lessee shall allow an authorized representative of the city to enter the leased premises for inspection at any reasonable time.
K. Easements and Rights-of-Way. The city expressly reserves the right, without compensation or adjustment in rentals to the lessee, to grant surface, underground or overhead utility easements or rights-of-way in or upon the leased property, if the exercise of the right will not unreasonably interfere with lessee’s improvements placed upon the property and with the lessee’s use of the property.
L. Condemnation. Upon condemnation of the premises or any part thereof by the state, borough, or federal government or agency thereof, including inverse condemnation, the lease shall terminate without any liability to the city. The city shall not be liable in damages or pay any compensation to the lessee as a result of the condemnation terminating the lease.
M. City Manager Regulations. The city manager may provide by regulations for the procedures and form as to applications, surveys, appraisals, auction, bidding, form and substance of lease, termination, forfeiture or any other matter involving the leasing of city property to implement the intent and purpose of this chapter. The absence of a regulation shall not invalidate any auction procedure or lease executed or to be executed by the city, where the requirements of the chapter have been otherwise satisfied.
N. Approval of City Council. The city council shall approve all leases. All leases shall be approved as to form by the city attorney prior to execution. (Ord. 12-008 § 3, 2012; Ord. 246 § 3, 1982)