Oakland Municipal Code Art. III Lease of City-Owned Real Property, Generally

This Article shall apply to all leases of City-owned real property by the City, except for the lease (including ground lease) of real property for development, or the special leases or licenses set forth in Article V below. The lease of real property for development shall be governed solely by Article IV below. Special leases or licenses shall be governed by the applicable specific provisions set forth in Article V below.

(Ord. No. 13287, § 3, 1-6-2015)

A. Notice. Notice of the proposed lease of City real property shall be published in the official newspaper of the City, or posted on the City's website, unless the City Administrator or designee elects to list the property with a broker or listing service.

B. Approval by Ordinance. Per Section 219(6) of the Charter, all leases of City-owned real property by the City must be authorized by an ordinance enacted by the City Council, except as provided below. An ordinance may authorize a specific lease of a specific City property, or may authorize general leasing of City property by the City Administrator under parameters provided for in the ordinance.

C. Administrative Authority. Notwithstanding the above, the City Administrator or his or her designee is delegated the full and complete authority to lease City real property in any of the following circumstances:

1. The lease is required by an agency of the state or federal government;

2. The lease is for real property that is undeveloped and less than five thousand (5,000) square feet in land area;

3. The lease is for less than two thousand (2,000) square feet of leasable space;

4. The real property was formerly owned by the Redevelopment Agency or ORSA, and the Redevelopment Agency or ORSA governing body delegated the authority to lease the real property to the administrative staff of the respective agency by resolution; or

5. The lease is for a term of one (1) year or less. For purposes of this subsection, the term shall be calculated based on the maximum lease term the lessee may claim under the terms of the lease without City approval, including unilateral options on the part of the lessee to extend or renew the term. The execution of a month-to-month lease, a lease with a lease term of one (1) year or less that includes an option on the part of the City to extend the lease term past one (1) year, or an agreement or exercise of option to extend a lease term past one (1) year shall not require Council approval, if, after the first year of the lease term, the lease permits the City to terminate the lease unilaterally for any reason upon notice of thirty (30) days or less.

The City Administrator or his or her designee is authorized to negotiate and execute all documents necessary for the lease of such real property and take other actions necessary to complete such lease. No further City Council action is required for such leases.

(Ord. No. 13287, § 3, 1-6-2015)

Real property must be leased for a rent or fee, payable in cash or other consideration, equal to or exceeding the property's fair market rental value, unless the City Council has made a finding and determination that the lease of the property for less than its fair market rental value is in the best interests of the City. In the case of lessees who provide in-kind services in lieu of cash rent, the value of such in-kind services to the City or the community at large may be considered in making the required Council finding and determination. For purposes of this chapter, in-kind services include benefits or values the provider renders to the City or the community at large as a result of the tenancy in lieu of payment of cash. This may include, but not be limited to, property security and maintenance, social and cultural benefits to the community, or other appropriate services.

(Ord. No. 13287, § 3, 1-6-2015)

The following enumerated officers and employees of the City may not as principal, agent, attorney or otherwise, be directly or indirectly interested in the lease of any City-owned real property: Mayor, members of the City Council, members of the City Planning Commission, City Auditor, City Attorney, City Administrator, City Clerk, Director of Finance, Director of City Planning, Director of Planning and Building, Director of Public Works, Real Estate Services Manager, employees of the Real Estate Division, and any other City employee who, because of his or her position with the City, has a potential conflict of interest or a potential advantage over other potential lessees.

(Ord. No. 13287, § 3, 1-6-2015)

Per Section 1001 of the Charter, no lease of City real property may be for a term greater than sixty-six (66) years.

(Ord. No. 13287, § 3, 1-6-2015)