TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: Discussion and Possible Action Regarding the Draft Facility Lease Policy for City-Owned Facilities.
Recommended Action
Discussion and possible action regarding the draft Facility Lease Policy for City-owned facilities.
City Commission Options
Option 1: Direction to bring back the Facility Lease Policy for formal Commission approval using a set price per square foot for all leased property.
• Pros: Provides a uniform and predictable rental rate structure that is easy to administer and apply consistently across all City-owned facilities, regardless of location or use
• Cons: Limits the City’s ability to account for variations in market value conditions, property desirability, or facility-specific factors that may justify higher or lower lease rates
Option 2: Direction to bring back the Facility Lease Policy for formal Commission approval using a set discount based on market value.
• Pros: Allows rental rates to reflect current market conditions while maintaining consistency through a standardized discount, potentially maximizing revenue while supporting public-purpose tenants.
• Cons: Requires additional staff effort and analysis to determine and document market value, which may increase administrative complexity and processing time for leases
Background Information
At the December 2, 2024 City Commission Workshop, the Commission reviewed preliminary recommendations for a facility lease policy, including approaches to valuing City-owned facilities and general lease terms. During that discussion, the Commission requested additional information regarding existing lease terms and associated costs to support the development of a more consistent and transparent approach to establishing rental rates for City-owned property.
In response, staff presents the proposed Facility Lease Policy that provides two options for Commission consideration. Option 1 establishes a single, Commission-set cost per square foot that would apply uniformly to all City-owned property, regardless of location. Option 2 proposes a standardized discount applied to the market value rate per square foot, with market value determined through appraisal or staff analysis of comparable properties and prevailing market conditions.
Under this proposed policy, leases for City-owned property would generally follow commercial lease structure. Tenants would be responsible for improvements to their leased space, subject to City approval, as well as utilities and other costs related to their use of the space. The City would remain responsible for maintaining common areas, major building systems, and the overall structure of the facility.
The proposed facility lease policy does not apply to air and ambulance leases, cell tower agreements, daily or short-term rentals or similar specialty agreements.
The draft Facility Lease Policy has been reviewed by the City Attorney’s Office and is legally correct as to form.
Strategic Plan
Good Governance
Financial Impact
If approved, this policy will assist with the development of future leases and lease fees.
Procurement
Not applicable.
Attachments:
1. Draft Facility Lease Policy
2. December 2, 2024 Commission Workshop Minutes
Prepared by: Chuck Speake, Public Works Director
Department Director: Chuck Speake, Public Works Director