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competitive process. This information will be included when the lease transaction is <br />presented for City Council approval. <br />Leasehold proposals shall be evaluated in terms of: <br />• the amount of consideration offered in the form of rent. <br />• the financial feasibility of the proposal. <br />• the capability, expertise and experience of the potential lessee with respect to the <br />proposed leasehold development and operation. <br />• if new development is proposed, a development plan that includes a description of the <br />development team and its qualifications. <br />• the identity of each person or entity that will have an interest in the proposed lease. <br />• community use and public benefits to be derived (if any). <br />Rate of Return: The City shall obtain fair market rents for its leases commensurate with the <br />highest and best use of the property. The fair market rent shall be based on an appraisal that <br />complies with the definition of Market Rent found in the Uniform Standards of Professional <br />Appraisal Practice (USPAP) published by the Appraisal Foundation. The appraisal shall be <br />no more than six months old at the time the lease transaction is presented for City Council <br />approval. If the cost of an appraisal is not justified by the anticipated rents, the City may <br />choose an alternative method to establish rent. City leases shall contain terms and conditions <br />which will sustain a fair rate of return throughout the duration of the lease. <br />Rental Terms: Rental terms may be negotiated on the basis of fixed rates (flat rent leases) or <br />percentages of the lessee's gross income derived from business conducted on the property, <br />with a provision for a minimum rental (percentage leases). <br />Flat Rate Leases: <br />• Market Rate Adjustments: Flat rate leases shall provide for upward adjustment of rent <br />at least every ten (10) years to current fair market rent. In no event shall the adjusted <br />rent be lower than the rent in existence immediately preceding the adjustment. <br />• Consumer Price Index Adjustments: Flat rate leases shall provide for upward <br />adjustment of rent in the interval term between market rate adjustments by changes in <br />the consumer price index. In no event shall the adjusted rent be lower than the rent in <br />existence immediately preceding the adjustment. The index used for consumer price <br />index adjustments will be the All Urban Consumers index for Los Angeles - Riverside - <br />Orange County, California with a base year of 1982-84. If the U.S. Department of <br />60A-33 <br />