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improvements by an amount more than can be reasonably amortized over the remaining <br />lease term; is not recurring in nature; and is at least ten percent (10%) or more of the value of <br />the existing improvements. It specifically should exclude expenditures to correct deferred <br />maintenance and expenditures for repairs to keep the existing improvements in good <br />condition. The length of any extended lease term shall be calculated by the same method <br />used for calculating the length of new leases. <br />City's Interest in Leasehold Improvements: City lease agreements provide the City the <br />right to assume ownership of the leasehold improvements at the end of the lease. The value <br />of the City's interest in the leasehold improvements can be appraised using widely accepted <br />appraisal methods. In the event the City grants a lessee a lease extension, the City shall be <br />compensated by an amount equal to the change in present value attributable to the deferral <br />of its interest in the leasehold improvements. This amount either can be paid as an upfront <br />payment at the beginning of the extended term or amortized over time with appropriate <br />interest applied. The City shall offset from the value of its interest in the leasehold <br />improvements any increased economic benefit derived from an extended lease. The City <br />shall not receive any compensation for its interest in the leasehold improvements on leases <br />extended prior to the last twenty percent (20%) of the existing term. <br />Security Deposits: The standard security deposit for a new lease agreement shall be <br />equivalent to three (3) month's rent. The security deposit may take the form of cash, an <br />instrument of credit or a faithful performance bond. For a lessee making a substantial <br />investment in improvements, the security deposit will be refunded upon completion of the <br />improvements. <br />Transaction Processing Fees: The City may charge a transaction processing fee in <br />accordance with the schedule of adopted fees. The fee may be waived for transactions that <br />provide benefit to the City. <br />Nothing in this section shall preclude the City from negotiating terms or conditions that may <br />vary from these requirements should that be necessary or required under the particular <br />circumstances of the proposed lease transaction. <br />60A-37 <br />