ITEM TITLE:
#22-37 - Authorizing Lease Amendment No.1 with the Valdez Emergency Assistance and Food Bank for a Portion of Tract D, USS 447
SUBMITTED BY: Nicole LeRoy, Planner
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A
Funding Source: N/A
RECOMMENDATION:
Approve Resolution #22-37 authorizing Lease Amendment No. 1 with the Valdez Emergency Assistance and Food Bank for a Portion of Tract D, USS 447.
SUMMARY STATEMENT:
January 19, 2019 the City of Valdez approved a new lease agreement with the Valdez Emergency Assistance and Food Bank for a portion of Tract D, USS 447. This agreement was retroactively effective from the expiration of their previous lease, with a term June 1, 2017, May 31, 2022 with five, five-year options to renew.
The original term of the lease was for five years, commencing June 1, 2017 and terminating on May 31, 2022 with five, five-year options to renew, per section 2.06 of the lease. The use of property will continue to be for the maintenance and operation of the Valdez Food Bank facility.
The Food Bank has leased this portion of Tract D, USS 447 since 1997 for the amount of $1/year and the Food Bank desires to maintain this lease rate.
Per Valdez Municipal Code Section 4.08.030 - Fair rental value to be used for leases - Exceptions, “the city may lease city lands for less than the fair rental value to any state or federal agency or political subdivision, a public utility, a nonprofit organization, or to a new industry on terms advantageous to the public welfare of the city if the council, by motion passed by not less than six councilmen, determines the lease to be in the best interest of the public.”
The Food Bank is a registered 503(c)(3) non-profit organization. Due to the requested continuation of discounted rent, the approval of this lease amendment requires an affirmative vote of not less than six City Council members.
In addition to extending the term by utilizing extension option one of five options to renew, the approval of this lease amendment will also authorize changes to section 10 of the lease regarding insurance, repealing and replacing the language of section 10 in its entirety with the insurance language in the attached document. Staff has worked with our insurance providers and Legal department to determine best practice for insurance requirements for lease agreements. We are updating insurance language in existing lease agreements accordingly as they come up for renewal. The Food Bank is amenable to this change, and Legal has determined their insurance policy is compliant with the updated language.
Another amendment to be authorized by this resolution is the addition of language in section 9 of the lease to add section 9.02 (see attached language.) Legal has advised us that the addition of this contractual waiver of subrogation meets the insurance requirements to adequately protect the city, without the Food Bank needing to make a revision to their policy.
Pending Council approval of this resolution, staff will work with the City Attorney and the Food Bank to execute lease amendment #1 to their lease, extending the term for an additional five-year period, and amending the insurance sections described above. All other terms and conditions of the agreement will remain the same.