Item 2G: Approval of Land Lease for Hotel on Airport Property

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Approval of Land Lease for Hotel on Airport Property Meeting Date: July 22, 2013 Agenda Item Number: 2G Department: Public Works Staff Contact: Tim Doll www.eugene-or.gov Contact Telephone Number: 541-682-5430 ISSUE STATEMENT The City Council is asked to approve the Public Works Airport Division entering into a 30-year lease with a hotel concessionaire (40 years total—30-year initial term with an option for one 10- year extension). Prior to the City’s Purchasing Division issuing a Request for Proposal for a potential hotel, the council must approve the Airport entering into a long-term lease. BACKGROUND The Airport plans to enter into an agreement with a hotel developer/operator to construct and operate a hotel on land the Airport owns at the corner of Awbrey Lane and Highway 99. This location is outlined in the Airport Master Plan for future commercial development such as a hotel. A long-term agreement is necessary in order to attract such a developer. It is expected that a hotel on Airport property will be an asset to the Airport as well as the community it serves. The Airport desires to issue a Request for Proposal to solicit a hotel developer/operator to construct and operate a full-service national brand hotel. The Eugene Code outlines specific procedures. Pursuant to City Code, Chapter 2 – Section 2.860 – 2.874 establishes the procedures the City must follow to sell, lease or rent City-owned property, unless a different procedure is established by another code section or a council-approved intergovernmental agreement. Section 2.862 authorizes the City Manager to privately negotiate with any person for the disposition of property subject to a “development plan” (such as the Airport Master Plan). When the City Manager determines that such property is suitable for tenant occupancy, the City Manager may lease the property – without future action by the council – but only for a term not to exceed 20 years, and at fair market rent. If the City Manager desires to lease the property for a term which exceeds 20 years, or for less than fair market rent, then the Code requires that the “proposal acceptable to the City Manager be presented to the council for its action,” Eugene Code, Section 2.872. Such approval by the council can take the form of either a motion or resolution. RELATED CITY POLICIES This action item is related to the City Council goals of "Sustainable Development," "Effective, Accountable, Municipal Government" and “Fair, Stable and Adequate Financial Resources.” S:\CMO\2013 Council Agendas\M130722\S1307222G.doc