60D - PROPERTY DISPOSITION POLICY

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(RFPs), a marketing subscription system, direct advertising, use of a Multiple Listing Service (MLS), listing with a broker, posting the property and any other appropriate means. In certain limited situations, the City may exclusively consider a single proposal for lease of City property. Potential lessees wishing to exclusively negotiate with the City must submit for City staff review a business case with sufficient justification as to how it is capable of optimizing the use of the property and return to the City, thereby negating the need for a competitive process. This information will be included when the lease transaction is presented for City Council approval. Leasehold proposals shall be evaluated in terms of: • the amount of consideration offered in the form of rent. • the financial feasibility of the proposal. f. • the capability, expertise and experience of the potential'lessee with respect to the proposed leasehold development and operation. �° • if new development is proposed, a development plan'that\includes a description of the development team and its qualifications. .% .� • the identity of each person or entity that will have an interest in the proposed lease. • special public benefits to be derived (if any)..\\ Rate of Return: The City shall obtain fair market rents W'i s leases commensurate with the highest and best use of the property. The fair `market Irent shall be based on an appraisal that complies with the definition of Market Rent found in the Uniform Stanclwds�f Professional Appraisal Practice (USPAP) published by the Appraisal Foundation. The•appraisal shall be, no more than six months old at the time the lease transaction is presented for City Council approval. If the cost of an appraisal is not justified by the anticipated -rents, the City may choose an alte nr ative method to establish rent. City leases shall contain terms and conditions which will s u'tain a fair rate of return throughout the duration ofthelease. I_ Rental Terrr sy Rental terms may be negotiated .on .the basis of fixed rates (flat rent leases) or percentages of the lessee's gross income derived from business conducted on the property, with a provision fora'minimum rental (percentagelleases). Flat Rate Leases: • Market Rate Adjustments: 'Flat rate leases shall provide for upward adjustment of rent at least every ten (10) years.to current fair market rent. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. • Consumer Price Index Adjustments: Flat rate leases shall provide for upward adjustment of rent in the interval term between market rate adjustments by changes in the consumer price index. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. The index used for consumer price index adjustments will be the All Urban Consumers index for Los Angeles - Riverside - Orange County, California with a base year of 1982-84. If the U.S. Department of Labor indices are no longer published, another substitute index generally recognized as authoritative will be used. Flat rate leases may include pre- determined periodic increases to rent instead of consumer price index adjustments. These periodic increases would occur at least every five (5) years. 7 60D-11