CITY OF HOMER

 

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

Table of Contents

 

 

CHAPTER 1:

Lease Policies / Goals, Purpose, and Responsibility……………………………..3

 

CHAPTER 2:

Lease Committee…………………………………………………………………4

 

CHAPTER 3:

Properties Available for Lease…………………………………………………...5

 

CHAPTER 4:

RFP Process / Competitive Bidding……………………………………………..7

 

CHAPTER 5:

Lease Application Process……………………………………………………….8

 

CHAPTER 6:

Application / Proposal Evaluation Process………………………………………9

 

CHAPTER 7:

Lease Rental Rates……………………………………………………………….10

 

CHAPTER 8:

Reconsideration…………………………………………………………………11

 

CHAPTER 9:

Lease Implementation…………………………………………………………..12

 

CHAPTER 10

Improvements…………………………………………………………………..14

 

CHAPTER 11:

Length of Leases / Options……………………………………………………..15

 

CHAPTER 12:

Lease Rate Adjustments………………………………………………………..17

 

CHAPTER 13

Sub-Leasing…………………………………………………………………….18

 

CHAPTER 14:

Assignments……………………………………………………………………20

 

CHAPTER 15:

Insurance………………………………………………………………………21

 

CHAPTER 16:

Hazardous Materials…………………………………………………………..23

 

CHAPTER 17:

Performance Standards………………………………………………………..24

 

CHAPTER 18:

Conclusion of Lease…………………………………………………………..25

 

CHAPTER 19:

Surplus Equipment Disposal………………………………………………….

 

APPENDICES:

 

Homer City Code / Chapter 18.08 – City Property Leases. last amendment, Ordinance 04-22

 

Resolution 04-25(A), adopted April 26, 2004.

Resolution 07-25(A), adopted June 25, 2007.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICIES AND PROCEDURES

 

 

CHAPTER 1: LEASE POLICIES / GOALS, PURPOSE, AND RESPONSIBILITY

 

1.1  GOALS AND PURPOSE

 

  1. The property lease management policies contained herein are authorized by HCC 18.08 and are intended to provide guidance, clarity, and standardization for all leasing activities on City owned property.
  2. It is the policy of the City of Homer to lease property when it is in the overall best interest of the City to do so. The City will seek to maximize the value of its assets and lease property for the highest and best use.
  3. It is the policy of the City to implement its leasing program in a fair and nondiscriminatory manner. Opportunities for long term leases on City owned properties will be made available to the public through the RFP process described herein.
  4. It is the policy of the City to lease property for a specific purpose or use. Leasing for the purpose of speculation and/or subleasing land will be discouraged.

 

1.2  RESPONSIBILITY

 

  1. The Lease Committee described herein shall be responsible for reviewing this policy manual and making recommendations to the City Council as needed, advising the City Manager or designee as to terms, stipulations, and negotiating approach with respect to leases, evaluating lease applications, and making recommendation to the City Council regarding proposed leases.
  2. The City Manager or designee is responsible for all lease negotiation activities and for implementing and administering the lease policies and procedures.
  3. The City Council has responsibility for approving and adopting the lease policies and for final approval of all leases over six months in duration. 

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICIES AND PROCEDURES

 

 

CHAPTER 2: LEASE COMMITTEE

 

2.1 POLICY

 

  1. It is the policy of the City of Homer to establish and maintain a Lease Committee.

 

2.2 PROCEDURES

 

  1. The City Manager shall establish a Lease Committee that will consist of the Finance Director, the City Planner, the Port and Harbor Director, one member of the Economic Development Commission, one member of an additional commission as determined appropriate by the City Manager, and one member of the public. The Manager shall consult with the Chair of the Commissions to determine who from the Commission and who from the public might best serve the Committee and not be subject to conflicts of interest. The Lease Committee may consult with other department heads such as, the Fire Chief, Police Chief and the Public Works Director and the City Manager or outside professionals as needed and appropriate.

 

  1. The Lease Committee is responsible for: 
    • Reviewing the Lease Policies and Procedures as needed and making recommendations to the City Council
    • Advising the City Manager or designee as to the terms, purposes, stipulations and negotiation approach to proposed leases
    • Reviewing all proposed leases and making recommendations to the City Council
  2. In all cases, the Lease Committee shall make recommendations that are consistent with this policy and procedures manual or make specific findings as to why a deviation is warranted and justified.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 3: PROPERTIES AVAILABLE FOR LEASE

 

3.1 POLICY

 

  1. It is the policy of the City of Homer to provide property for lease through a fair, nondiscriminatory, and standardized process that the public can readily understand and support.
  2. It is the policy of the City that public land shall be leased in a way that maximizes the value of City assets, promotes activities and uses that are in the overall best interest of the City, and are consistent with the Comprehensive Plan.

 

      3.2 PROCEDURES

 

  1. The Lease Committee shall maintain a list of all City properties that have been authorized for lease by the City Council. This list shall be made readily available to the public.  The Lease Committee may also develop a list of additional properties, for City Council review, that it recommends should be made available for lease.
  2. The City Council shall identify which City properties are available for lease through its annual land allocation workshop process which includes the Lease Committee, the Planning Commission, the Port and Harbor Commission, and the Parks and Recreation Commission. 
  3. All properties identified as available for lease by the City Council shall be subject to the lease policies and procedures contained herein.
  4. All uses and activities on lands made available for lease are subject to the City Comprehensive Plan, zoning ordinances, flood ordinance, subdivision ordinance, and other applicable local, state, and federal laws and regulations.
  5. The City Council may restrict specific City properties to certain uses or classes of use. Such properties will be available for leasing only such uses. The City Council has in the past restricted the use of lots immediately adjacent to the Fish Dock to activities directly related to commercial fishing. Similarly, it has restricted uses on lots adjacent to the Deep Water Dock to marine industrial uses with an emphasis on shipping and cargo handling. The purpose for these restrictions is to encourage growth in targeted economic sectors, to insure that the City receives the maximum benefits from the large investment the public has made in those docks, and to provide land for businesses that require close proximity to the docks in order to operate efficiently and profitably.  

CITY OF HOMER

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CHAPTER 4:  REQUEST FOR PROPOSALS (RFP)

 

4.1 POLICY

 

  1. It is the policy of the City of Homer that a request for proposals, or a competitive bidding process be used for the leasing of City owned property. Exceptions to this policy may be made by the City Council as per section 10.2.E of these policies and/or under special or exceptional circumstances. The Council shall review recommendations of the Lease Committee and, if an exception is granted, adopt a resolution finding that it is in the public interest and approving the exception.

 

4.2 PROCEDURES

 

  1. Properties that are available for lease will be advertised by the Lease Committee through the normal City of Homer public notice process a minimum of one time per year. The Lease Committee shall provide such notice within 60 days of the completion of the annual land allocation process and adoption by the Council of the Land Allocation Plan. The committee may advertise more frequently as needed and appropriate.
  2. Requests for Proposals shall be solicited by the Lease Committee during a time frame identified in the advertisements and proposal submittal documents.
  3. The criteria used to score and rank proposals shall include, but not necessarily be limited to, the criteria listed in the evaluation chapter herein.
  4. The Lease Committee shall review, evaluate, score, and rank all responsive proposals and make recommendations to the Manager. If none of the responsive proposals is satisfactory, the Lease Committee may recommend against all of the proposals. The manager shall notify the City Council of the Committee’s recommendations.
  5. The Lease Committee must obtain approval from the City Council before requesting proposals to lease property that is not on the approved list of properties available for lease.
  6. The City Council may by resolution in particular cases approve other bidding or proposal procedures or exceptions to these procedures.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 5:  LEASE APPLICATION PROCESS

 

5.1:  POLICY

 

  1. It is the policy of the City of Homer to provide for a streamlined, standardized, and easily understood lease application process. A full and complete application packet shall be provided to all applicants. Applicants must be qualified under Section 18.08.50 of the Homer City Code.
  2. The City administration will provide for pre-application meetings with all potential applicants to provide relevant information on things like land use regulations, lease policies, the permitting process, and other relevant topics.

 

5.2 PROCEDURES

 

  1. A responsive lease application / proposal shall include:
    1. A completed application form provided by the City
    2. Any applicable fees
    3. A clear and precise narrative description of the proposed use of the property
    4. A specific time schedule and benchmarks for development
    5. A proposed site plan drawn to scale that shows at a minimum property lines, easements, existing structures and other improvements, utilities, and the proposed development including all structures and their elevations, parking facilities, utilities, and other proposed improvements.
    6. Any other information that is directly pertinent to the proposal scoring criteria contained herein
    7. All other required attachments requested on the application form including, but not limited to, the following documentation: applicant information, plot plan, development plan, insurance, proposed subleases, environmental information, agency approvals and permits, fees, financial information, partnership and corporation statement, certificate of good standing issued by an entity’s state of domicile, and references. 
    8. Any other information required by the solicitation or request for proposals.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 6:  APPLICATION / PROPOSAL EVALUATION PROCESS

 

6.1 POLICY

 

  1. It is the policy of the City of Homer to provide for a fair, standardized and objective proposal evaluation process.

 

6.2 PROCEDURES

 

  1. All lease proposals shall be evaluated and scored by the Lease Committee.
  2. The Criteria for evaluating proposals shall include but is not limited to the following:
    1. Compatibility with neighboring uses and consistency with applicable land use regulations including the Comprehensive Plan.
    2. The development plan including all proposed phases and timetables.
    3. The proposed capital investment.
    4. Experience of the applicant in the proposed business or venture.
    5. Financial capability or backing of the applicant including credit history, prior lease history, assets that will be used to support the proposed development.
    6. The number of employees anticipated.
    7. The proposed rental rate.
    8. Other financial impacts such as tax revenues, stimulation of related or spin-off economic development, or the value of improvements left behind upon termination of the lease.
    9. Other long term social and economic development.
  3. Lease Rental Rates
    1. The determination of lease rental rates is addressed in Chapter 7.
  4. After evaluating and scoring the proposals, the Lease Committee shall make a recommendation on a successful bidder to the City Council. The recommendation shall be contained in the form of a memorandum from the City Manager to the City Council that appears on the consent calendar of a regular meeting agenda. If a recommendation to approve a proposal is adopted, the Manager or his designee shall finalize a lease document for presentation to Council for approval.  If the Council approves the lease, it will not be executed until the period for reconsideration under section 8.3 passes.   
  5. Final approval of long term leases (more than six months) rests with the City Council. The Council shall either:
    1. Approve the proposed lease
    2. reject the proposed lease; or
    3. remand the unapproved lease to the Manager with comments

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 7:  Lease Rental Rates

 

7.1 POLICY

 

It is the policy of the City of Homer to provide for a lease rental rate structure that stimulates business activity, promotes the best use of City land, and maximizes the value of City owned real property.

 

7.2 PROCEDURES

 

  1. Lease Rental Rates Generally
    1. All property shall be leased at no less than “fair market rent”. Fair market rent is defined as the rental income that a public and private property would most likely command in the open market; indicated by the current rents paid for comparable space as of the date of the appraisal.
    2. Payment of a higher than market rent resulting from an applicant’s proposal is generally in the public interest and will help to establish fair market rent using current market forces.
    3. The City Council may establish a minimum rent or “asking price.” It may set the minimum rent at an amount equal to or higher than the estimated “fair market rent” if it finds that it is in public interest to do so. It may set uniform rental rates for a class of similar properties that remain available for leasing after the conclusion of a competitive lease offering. 
    4. The Council may approve a lease of City land for less than fair market rent, minimum rent, or uniform rental rate only if the motion approving the lease contains a finding that the lease is for a valuable public purpose or use, and a statement identifying such public purpose or use.
  2. Rental Rate Determination: Factors that may be considered when determining the specific lease rate for individual leases include:
    1. The bid amount contained in the sealed bid proposal
    2. The fair market rent as determined by an appraisal
    3. The highest and best use of the land
    4. The City’s economic development objectives. This includes any incentives the Council may adopt by ordinance to stimulate growth in particular sectors of the economy.
    5. The location of the property
    6. Alternative valuation methodologies as negotiated by both parties.
    7. Parameters set out by the City Council under 7.2 A

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 8: RECONSIDERATION

 

8.1 POLICY

 

It is the policy of the City of Homer to provide for a reconsideration process so that a fully responsive bidder may seek remedies to actions by the City Council that he or she may believe are in error, unfair, or otherwise unsatisfactory. The reconsideration provisions apply only to final approval of a lease by the City Council.

 

8.2 RESPONSIBILITY

 

  1. The City Council is responsible for hearing reconsiderations and for making the final determination on them.
  2. The City Manager is responsible for providing all required staff support necessary to assist the Council in hearing and deciding reconsiderations.

 

8.3 PROCEDURE

 

  1. A fully responsive bidder who believes that the City Council final action on the terms of a proposed lease is unsatisfactory may request a reconsideration.
  2. Reconsideration Process:
    1. A written request for reconsideration must be filed by a fully responsive bidder with the City Clerk within 15 days of the City Council action which is to be reconsidered. Any decision for which reconsideration is not requested within that period shall become final.
    2. The City Clerk shall schedule the matter for reconsideration before the City Council at an appropriate regular meeting.
    3. The person requesting reconsideration and all parties involved in the Council action to be reconsidered, shall be notified by the Clerk of the reconsideration request and the date upon which the Council will reconsider. Such notice shall be given not less than 15 days prior the scheduled reconsideration.
    4. An electronic tape recording shall be kept of the entire reconsideration proceeding and typewritten minutes shall be prepared. The electronic tape recording shall be preserved according to the City’s records retention policy at the time.
    5. The decision of the City Council on reconsideration shall be final. There shall be no appeal.

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

 

CHAPTER 9: LEASE IMPLEMENTATION

 

9.1 POLICY

 

It is the policy of the City of Homer that all leases shall be negotiated and administered in a fair, standardized, and professional manner that is consistent with the Homer City Code and these policies and procedures.

 

9.2 PROCEDURES

 

  1. The Lease Committee and the City Manager shall develop a standardized ground lease document that contains standard provisions applicable to all ground leases. Similarly, the Lease Committee and the City Manager may develop one or more standardized building leases (as many as necessary to apply to each City building available for leasing) containing standard provisions applicable to all leases of space in a city building. The standard lease documents shall be reviewed by the City attorney and approved by the City Council. Standard lease documents provide the baseline requirements and conditions of all city leases. They are the starting point in negotiations and are subsequently structured and modified to meet the specifics of the development proposal with respect to things like term, lease rate, allowed uses, required insurance, and so on.
  2. The terms and conditions of each lease shall be reviewed by the Lease Committee prior to execution. The committee shall make recommendations on terms and conditions to the Manager and the City Council.
  3. The City Manager or designee is responsible for lease negotiations, including any negotiated changes in the standard lease terms. The Manager shall take into consideration the following when negotiating the terms of a lease:
    1. the nature of the proposed use
    2. the type and cost of the improvements to be placed on the property
    3. the period of time required to amortize the improvements
    4. the overall benefit to the City
    5. consistency with the Comprehensive Plan and all other relevant land use codes and regulations
    6. the public need and benefit
    7. the date of commencement and completion of improvements
    8. the value and usefulness of buildings, structures, and other permanent improvements that will remain on the City’s land after termination of the lease.
    9. other factors deemed relevant by the Lease Committee or the City Manager.
  4. The determination of lease rental rates is addressed in Chapter 7.
  5. All leases and attachments, or in the direction of the City Manager a memorandum of lease, shall be recorded in the proper recording office by the Clerk’s office.  The Lessee is responsible for the recording fees.
  6. All leases must require the lessee to comply with applicable zoning, parking, sign, flood, and other pertinent local ordinances and state and federal statutes and regulations.
  7. If a lease is awarded, an as-built survey including elevations performed by an RPLS(Registered Professional Land Surveyor) shall be provided to the City within 6 months of completion of permitted or required development or requirements under the lease. Each additional structure or significant improvement shall require an additional or updated as-built except that the Manager may waive the RPLS requirement. The lessee will be required to subdivide and replat city owned parcels if the lease so requires. All surveys are to be provided by the lessee at his/her expense.
  8. At the time each as-built is submitted, a statement of value including leaseholds and all improvements shall be provided. The Statement of Value shall be either a letter of opinion or appraisal completed by an Alaska Certified General Appraiser.
  9. All development requirements and performance standards contained in the lease shall be strictly enforced and if not complied with or negotiated for modification as per 10.2.B, shall be cause for the lease to be terminated.

 

CITY OF HOMER

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POLICY AND PROCEDURES

 

 

CHAPTER 10:  IMPROVEMENTS

 

 

10.1POLICY

 

It is the policy of the City of Homer that all improvements installed, maintained, occupied, and used on leased City property shall be strictly monitored and shall be consistent with the terms and conditions of the lease and all other applicable codes and regulations.

 

10.2  IMPLEMENTATION

 

  1. Construction of improvements on leased properties shall take place only after review and approval of the construction plans by the Lease Committee and all applicable permits and legal requirements are secured.
  2. Construction of improvements that are not consistent with the lease agreement are prohibited unless they are approved by an amendment to the lease approved by the City Council. The amendment is subject to the same review process as initial leases.
  3. All improvements constructed upon leased property become the property of the City upon termination of the lease unless otherwise provided in the lease, or agreed to by the parties in writing, the lessee shall on or before the lease termination date remove all improvements the lessee is authorized or required to remove and restore the property to the same condition it was in at the time the lease was executed by the lessee.
  4. The lessee shall, during the course of the lease term, be subject to and responsible for payment of assessments related to local improvement districts, payment of its share of the cost of capital improvement projects completed by the City that benefit the property pursuant to the provisions of HCC 18.08.180, and the cost of connection to utilities pursuant to the provisions of  HCC 18.08.190.
  5. Lessee shall be responsible for all municipal property taxes on the leasehold interest in the real property and improvements and sales taxes on the rent payments.

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CHAPTER 11:  LENGTH OF LEASES / OPTIONS

 

11.1 POLICY

 

It is the policy of the City of Homer that the duration of all leases including all options shall be consistent with the provisions of Chapter 18.08 of the Homer City Code and the provisions of these policies and procedures.

 

11.2 PROCEDURES

 

  1. The initial term of leases shall be related to a large degree upon the magnitude of the lessee’s financial investment and the value and usefulness of improvements that lessee will make and leave on the property upon the termination of the lease. It shall also be related, to a lesser degree, upon lessee’s financing and the reasonable amortization requirements of the lessee and financing agency. Generally speaking, the larger the investment, and the greater the value and usefulness of permanent improvements that will remain on the property after termination of the lease, the longer the lease period.
  2. Leases that extend beyond 30 years (including all options) will be treated as exceptional and shall be evaluated on a case by case basis.
  3. Leases shall contain no more than two options for renewal and each option shall be for no more than 25% of the length of the initial base term. The exercise of any option shall be dependent upon lessee not being in breach of any provisions of the lease at that time.
  4. If the lease or the lessee’s approved development plan provides for utilization of the lot for several months a year and the lessee installs improvements or infrastructure, occupies the lot (by persons or things), or does anything else that precludes or devalues utilization of the lot for the remainder of the year by the City or another party, the lessee shall pay either a premium rent for the months the parcel is actually in use or fair market rental for the entire lease year.
  5. It is the policy of the City that equal opportunities should be provided to compete for leasing available public property. A lessee whose initial lease and all options have expired shall have no automatic right of further renewal or extension. In general, it is the policy of the City that the Lease Committee shall offer such properties to the public through the RFP/competitive bidding process described herein.
  6. Lease Renewals: The City Council, after reviewing a recommendation from the Lease Committee, may elect to not require a competitive bidding process for a property whose lease has expired (including all options) if it finds that it is in the best interest of the City to enter into a new lease agreement with the current lessee. If the current lessee is interested in entering into a new lease agreement, he/she must indicate so in writing to the City Manager at least 12 months prior to the expiration of the lease and submit a formal lease application/proposal for evaluation by the Lease Committee. The City will review the application but is under no obligation to enter into a new lease. If the Council chooses to approve such a new lease without a competitive process, it must approve such new lease by resolution within six months that includes a finding that it is in the public interest to do so, after consideration of relevant facts including, but not limited to, the following:
    1. The lessee’s past capital investment and binding commitment to future capital investment
    2. The lessee’s financial condition and prior lease history
    3. The number of persons employed and the prospects for future employment
    4. Tax revenues and other financial benefits to the City of Homer anticipated in the future if the lease is renewed.
    5. Consistency of the past use and intended future use with all applicable land use codes and regulations, the Comprehensive Plan, and Overall Economic Development Plan
    6. Other opportunities for use of the property that may provide greater benefits to the City of Homer.
    7. Other social, policy, and economic considerations as determined by the Council
  7. Short Term Leases
    1. A short term lease of 6 months or less may be approved by the City Manager after review and recommendations by the Lease Committee.
    2. Short term leases are not required to go through the competitive bidding/PFP process described herein
    3. Short term leases shall not include renewable options and no consecutive short term leases for the same property to the same lessee may be issued without the approval of the City Council.
    4. Applicants for short term leases must go through the formal application process described herein.
    5. The City Manager will advise the Council through memorandum or the Manager’s report of all short term leases.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES

 

CHAPTER 12: LEASE RATE ADJUSTMENTS

 

12.1 POLICY

 

It is the policy of the City of Homer to adjust lease rental rates from time to time in order to compensate for inflation, increases in the cost of living, and changing real estate market conditions.

 

12.2 PROCEDURES

 

  1. All leased properties shall be appraised every fifth year. The appraisal shall be conducted by an Alaska Certified General Real estate Appraiser. Appraisals shall be subject to the following:
    1. The lease rate shall be adjusted upward based upon increased property appraisal values. This periodic adjustment compensates for changing market conditions in the area by determining the fair rental value. In the event that an appraisal reveals that fair market rent has declined, the lessee may petition the City for an amendment to the lease and reduction in the lease rate. The City is under no obligation to do so. Any reduction in lease rates must be approved by the City Council and the motion to do so must include a statement regarding why the action is in the public interest.
    2. The cost of the appraisal shall be borne by the lessee. The parties shall select the appraiser by mutual agreement and arrange for the appraisal.
    3. All properties shall be appraised within 6 months prior to the anniversary date of the adjustment year. The newly adjusted lease rate will take effect on the anniversary date.
  2. In addition, all rental rates shall be adjusted annually based upon changes in the Anchorage Consumer Price Index (CPI). No CPI adjustments shall be made in the initial year of the lease or in any year in which an appraisal adjustment occurs.

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CHAPTER 13:  SUB-LEASES

 

13.1 POLICY

 

It is the policy of the City of Homer that City land should be leased for a specific use or purpose approved by the City. City land shall not be leased for the purpose of speculation.  Individual business structures unrelated to the primary permitted use that are owned by the lessee or subtenants of the lessee shall be discouraged.

 

13.2 PROCEDURES

 

  1. If a potential lessee intends to sub-lease City owned property, this intention shall be clearly stated and described in the original lease application and proposal.
  2. In order for a sub-lease to be approved, the right to sub-lease, and the terms and conditions thereon, must be specifically included and stated in the underlying base lease.
  3. All sub-leases must be in writing and executed by the parties. All sub-leases must approved by the City Council after a recommendation is provided by the City Manager and the Lease Committee. Approval must be granted prior to occupancy of the leased premises by the sub-tenant.
  4. All amendments to sub-leases must be in writing and approved by the City Council prior to becoming effective.
  5. Sub-leasing shall not be used as a method to accomplish the transfer of interest in the entire leasehold.
  6. All sub-leases must comply with applicable zoning, parking, sign, flood, and other applicable local ordinances and state and federal statutes.
  7. All sub-leases are subject to the base lease and all sub-tenants must comply with the relevant provisions of the base lease as identified by the Lease Committee. Sub leases of City land are subject to additional rent pursuant to HCC 18.08.120.
  8. Sub-leasing within a building may be approved provided that the terms and conditions of such are clearly set out and described in the original base lease.

      I.    Partnerships: The City may consider and approve a lease and development plan that consists of two or more independent businesses that finance, construct, and occupy the same building                    or improvements. The businesses, business relationship, and proposed uses must be approved by the City in advance. Partnerships such as this are not considered to be a sub-lease.

      J.    Developers/Investors: The City may consider proposals from developers who wish to construct buildings and/or other improvements for the purpose of sub-leasing, if all tenants of the                    building or land are engaged in activities that are permitted by applicable zoning codes and restricted uses as approved by the Council in effect at the time. The lessee will be in violation of the lease if he/she sub-leases for uses other than those permitted by the lease.

13.3     PROCEDURES

 

  1. If a lessee with an assignable lease wishes to assign, the City must first make a determination that the lessee is current and not in default with respect to lease payments, taxes, and other fees that may be owing, and in compliance with any other relevant terms and conditions of the base lease. If the lessee is in good standing and eligible to assign, the following procedures will apply.
  2. The lessee shall request approval of lease assignment in written form and submit a lease assignment document(s) to the Lease Committee.
  3. The Lease Committee shall review the request and assignment document(s), determine whether the proposed assignee is qualified under HCC 18.08.050, and meet with assignee to ascertain whether the assignment would be beneficial to the interests of the City.
  4. The assignee shall submit a new lease application form complete with all attachments and proposals following the process described herein for lease applications, and submit it along with any applicable fees to the Lease Committee for review.
  5. The Lease Committee shall review the application and proposal using the application evaluation criteria described herein.
  6. The Lease Committee shall make a recommendation on the assignment to the City Council for final action.

 

CITY OF HOMER

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CHAPTER 14:  ASSIGNMENTS

 

14.1 POLICY

 

It is the policy of the City of Homer to incorporate an assignment provision into the lease document if that is requested by the lessee. Consent to an assignment request shall be conditioned upon receipt of all current and applicable payments and properly submitted documentation. The proposed assignee must also be acceptable to the City of Homer and commit to develop and use the property in a manner acceptable to the City.

 

14.2 DEFINITIONS

 

  1. Assignable lease:  A lease which contains a provision permitting its assignment by lessee.
  2. Assignment: A transfer of interests or rights to property, real or personal, in possession or in action, or of any estate or right therein.  The assignment of a lease is distinguishable from a sublease to the extent that in assigning, the lessee transfers his entire interest and estate in the premises, whereas, in a sublease, the sublessee acquires something less than the lessee’s entire interest.

 

14.3  RESPONSIBILITY

 

  1. The Lease Committee is responsible for reviewing assignment provisions that may be included in lease documents. The Lease Committee is also responsible for reviewing and making recommendations to the City Council on all requests to assign a City lease.
  2. The City Council is the final authority on all requests to assign.
  3. The City Council may approve assignment of a lease to banks or other financial institutions for financing or other reasons if it determines that to be in the best interest of the City.

 

 

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES MANUAL

 

CHAPTER 15:  INSURANCE

 

15.1 POLICY

 

It is the policy of the City of Homer to require lessees to carry general public liability insurance, environmental insurance if appropriate, workers compensation insurance, and any other insurance coverage determined to be necessary by the City in order to protect City assets and the public interest.

 

15.2 PROCEDURES

 

  1. All lessees shall keep in force for the full term of the lease public liability insurance in the amount of not less than $1 million coverage per occurrence for bodily injury (including death) and property damage. The City of Homer shall be named as an additional insured.
  2. Lessees who intend to conduct activities which could potentially have significant risk of environmental contamination shall also obtain not less than $2 million in environmental insurance (Environmental Impact Insurance and/or Environmental Clean-up Policy, or the equivalent subject to review and approval by the City Manager) with the City of Homer as an additional insured. Environmental Insurance for the purposes of City leasing procedures shall meet the standards of the Environmental Insurance Requirement document attached as Appendix A to these policies. The following procedures apply in determining whether a significant risk of environmental contamination is present:
    1. The City will determine on a case by case basis whether a lease of City property will involve a significant risk of environmental contamination due to the use of the property, the presence of hazardous materials, or the location of the property.
    2. If the City determines that a significant risk is present, the environmental insurance requirement shall apply.
    3. Recommendations by the Manager and Lease Committee on environmental insurance are subject to final approval by the Homer City Council through the lease approval process.
    4. The following are examples of uses that generally will not involve a significant risk of environmental contamination. This list is not exhaustive or all inclusive and is provided for illustrative purposes only: restaurants, retail/charter businesses, commercial fishing gear storage (provided the storage does not include fuels, lubricants, hydraulic fluids, and solvents, or machinery containing any of them, campgrounds, entertainment establishments, drinking establishments, and the ordinary use of commonly used household cleaning agents and office products.
    5. The following are examples of uses that generally will involve a significant risk of environmental contamination. This list is not exhaustive and is provided for illustrative purposes only: a) Storage or processing of logs, chips & other wood products, b) sale, manufacture, distribution, fueling of equipment, or storage of petroleum products, c) repair shops involving the use of solvents, d) activities in the tidelands or in close proximity to environmentally sensitive areas, e) the use of drums to collect, transport, or store waste oil, solvents, or other hazardous materials, f) the use of hazardous materials in manufacturing or processing, g) storage of hazardous waste in quantities sufficient to trigger reporting obligations under the Resource Conservation and Recovery Act, h) outside use or storage of equipment with a risk of leaking fuels, lubricants, solvents or hydraulic fluid. 
  3. Certificates of Insurance showing the required insurance is in effect and identifying the City of Homer as an additional insured shall be provided to the City of Homer initially at the time a lease becomes effective and annually thereafter, and upon every change in insurance provider or insurance coverage.
  4. All insurance policies must be in effect for the duration of the lease term, or longer if stated in the lease, and the City must be notified of any changes to policies.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICY AND PROCEDURES MANUAL

 

 

CHAPTER 16:  HAZARDOUS MATERIALS

 

 

16.1 POLICY

 

It is the policy of the City of Homer to require that all lessees on City owned property take the precautions necessary to protect city property and the surrounding environment from pollution and contamination. All leases of City property, whether they are subject to the Environmental Insurance Requirement or not, shall include terms which impose the minimum requirements for environmental protection set out below.

 

16.2 PROCEDURES

 

  1. The lessee shall not allow hazardous materials to be used or kept on City property, except as specifically permitted or necessary for the lessee’s lawful use and approved of the property.
  2. The lessee’s use of hazardous materials, if permitted, shall comply will all applicable laws and regulations.
  3. The lessee shall not pollute or contaminate the environment with discharges, leaks, or emissions of hazardous materials.
  4. The lessee shall be required to promptly notify the appropriate authorities and the City of any discharge or spill and to clean up the impacted area at lessee’s own expense in compliance with applicable laws.
  5. Lessee shall be fully liable for all damages, costs and expenses related to a violation of the terms of the lease with respect to the use, storage, cleanup, remediation, or disposal of hazardous materials.

 

CITY OF HOMER

PROPERTY MANAGEMENT

POLICIES AND PROCEDURES

 

 

CHAPTER 17:  PERFORMANCE STANDARDS

 

17.1POLICY

 

It is the policy of the City of Homer that leased properties and the improvements on them shall be maintained in a way that provides for the health and safety of the community, and is consistent with community values with respect to zoning, aesthetics, architecture, and other values as determined by the City Council.

 

17.2PROCEDURES

 

  1. All properties leased by the City are to be maintained in a proper, safe, clean, and orderly fashion taking into consideration its permitted use, surrounding, properties, zoning, and other applicable laws and regulations.
  2. The City of Homer reserves the right to enter leased property and the structures thereon at all reasonable times. This includes regular annual inspections.
  3. All commercial structures shall at all times be in compliance with applicable building, fire, mechanical, electrical and other regulations.
  4. Applicable building code and fire marshal inspections must be performed and certified to the City upon completion of all renovations, remodels, and / or new construction.
  5. Easements or Rights-of-Way on the leased parcel shall not be used in any way that interferes with the rights of the holders or any person(s) lawfully using the easement or right-of-way.
  6. Easements or Rights-of-Way outside of the leased parcel and/or immediately adjacent to it shall not be used for storage, parking, or any other authorized uses.
  7. Failure to comply with the performance standards listed in this section or any other provisions or stipulations contained in the lease are grounds for termination of the lease if the lessee does not rectify the problem after reasonable notice by the City.  

 

CITY OF H

OMER

PROPERTY MANAGEMENT

POLICIES AND PROCEDURES

 

 

CHAPTER 18: CONCLUSION OF LEASE

 

18.1 POLICY

 

It is the policy of the City of Homer to provide for a smooth transition and the restoration of City property at the time a lease expires.

 

18.2 PROCEDURE

 

  1. Improvements constructed by the Lessee or sub-lessees shall be left in place unless removal is authorized or required by the provisions of the lease. If the lease authorizes or requires removal of improvements, they may be removed prior to the conclusion of the lease if doing so would not damage the leased property or adjoining properties. Removing improvements shall be coordinated with and approved by the City Manager prior to commencement of activities.
  2. Unless otherwise agreed by the parties, when the lessee is authorized or required to remove improvements, the lessee shall remove all improvements made on the property by lessee prior to termination of the lease. 
  3. When authorized or required to remove improvements, if lessee fails to do so prior to the termination date of the lease, lessee shall forfeit the improvements to the City and shall receive no compensation therefore, or, at the City’s election, pay to the City the costs incurred by the City in removing and disposing of the improvements.
  4. Unless otherwise provided in the lease, or agreed to in writing by the parties, the lessee shall restore the property to the same condition it was in at the time the lease was executed by the lessee.
  5. An environmental inspection (Phase I, plus further testing, including test holes if the need for such further testing is indicated by the Phase I inspection) shall be completed at the termination of the lease at the lessee’s expense. Identified environmental problems shall be rectified by lessee at his/her expense. 

 

Updated 6/27/07