Mountain View Municipal Code Art. XI Leasing of City Property

Except as provided herein, property owned, held or controlled by the city may be leased for a period not to exceed fifty-five (55) years.

(Ord. No. 22.94, 11/22/94; Ord. No. 11.18, § 1, 10/23/18.)

Notwithstanding Section 2.89, the city may lease property for a period exceeding fifty-five (55) years, but not exceeding ninety-nine (99) years, if the city council makes the findings required by subsection a. and the lease provides for a periodic review as set forth in subsection b., below.

a. Findings required. Prior to the final execution of any lease entered into pursuant to this section or prior to the approval of any development on the property to be leased where said development is a condition precedent to lease or rent commencement, the city council shall find all of the following:

1. That the lease and any development on the site is consistent with the City of Mountain View general plan and any applicable precise plan or specific plan; and

2. The property is not now needed for other public purposes; and

3. The term of the lease, including any option to extend, is in the best interest of the city; and

4. This particular lease offers the greatest economic return to the city when compared to other proposals, if any; and

5. A determination that entering into the lease without engaging in a competitive bid process is in the best interest of the city, if applicable.

b. Lease requirements. To qualify as a lease in excess of fifty-five (55) years, the following shall be incorporated into the lease to provide the greatest protection and return for the city and to ensure that the appropriate periodic review of the lease is conducted:

1. The lease shall include a definite term that may include an option period.

2. The lease shall include provisions for the lessee to provide insurance to the city in the form and amounts determined by the city attorney and which names the city as an additional insured.

3. Periodic review:

(a) All leases. The lease shall contain provisions for periodic review by the city that will provide for an analysis as to each of the following: (1) whether the lessee is in compliance with the terms of the lease; (2) whether the property is in good and marketable condition; and (3) whether the level of insurance is adequate or needs to be increased or decreased.

(b) Rent. In addition to the above-described items, the periodic review shall take into consideration the then-current market conditions and may also include an analysis as to whether or not the rent paid by the lessee for the lease is consistent with then-available fair market rents. The lease shall also include a mechanism for adjustments to rent to reflect the fair market value rent at the time of such periodic review. However, this analysis shall not be required during any portion of the lease term for which rent is prepaid or for those leases that include provisions to periodically adjust the rent.

4. Timing of periodic review. The review pursuant to this section as incorporated into the terms of any lease shall be conducted no less frequently than Year 20, Year 40 and Year 60 of the lease term and each ten (10) years thereafter.

5. Severability. The lease shall provide that if any action is filed to contest the length of term of said lease that the city and the lessee will be deemed to have consented to entering into a lease of such lesser term as a court of competent jurisdiction may find appropriate and that neither party to the lease shall be liable to the other party or any third party for entering into the lease or for damages related thereto by reason of the aforementioned judicial proceedings.

(Ord. No. 22.94, 11/22/94; Ord. No. 6.11, § 1, 3/22/11; Ord. No. 11.18, § 1, 10/23/18)