| ITEM #: 6. DATE: 02/12/2024 AI #:1918 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | CONVEYANCE OF LEASED PROPERTY TO ARIZONA HEALTHCARE PROPERTIES PURSUANT TO LEASE TERMS |
| STAFF PRESENTER(S): | Sarah Chilton, Deputy City Attorney |
SUMMARY
The proposed resolution waives a lease term and provides authorization and direction related to Arizona Healthcare Properties exercise of its right to purchase property currently leased to Arizona Healthcare Properties LLC by the City of Goodyear.
STRATEGIC PLAN ALIGNMENT
None.
RECOMMENDATION
ADOPT RESOLUTION NO. 2024-2389, WAIVING TERM OF LEASE BETWEEN THE CITY AND ARIZONA HEALTHCARE PROPERTIES LLC AND PROVIDING AUTHORIZATION AND DIRECTION TO CITY MANAGER AND STAFF RELATED TO ARIZONA HEALTHCARE PROPERTIES EXERCISE OF ITS RIGHT TO PURCHASE PROPERTY LEASED TO IT BY THE CITY OF GOODYEAR. (Sarah Chilton, Deputy City Attorney)
FISCAL IMPACT
Rather than collecting government property lease excise taxes that were owed under the terms of the lease between Arizona Healthcare Properties LLC (“AHP”) and the City of Goodyear the leased property will be subject to property taxes.
BACKGROUND AND PREVIOUS ACTIONS
The Mayor and Council of the City of Goodyear adopted Resolution 07-1187 on October 9, 2007 approving a development agreement with an affiliate of Cancer Treatment Centers of America, Arizona Healthcare Properties, LLC, an Arizona limited liability company (“AHP”) related to the development of approximately 25 acres located east of 143rd Avenue and north of Filmore Road (the “Property”). The property was to be developed and operated as a cancer treatment hospital and outpatient oncology center by the Cancer Treatment Centers of America (the “CTCA Facility”). On January 15, 2008, pursuant to the terms of the development agreement, the City and AHP conveyed the property upon which the CTCA Facility was to be constructed to the City, and on February 5, 2008, the City and AHP entered into a lease (the “Lease”) pursuant to which the city leased the Property to AHP.
STAFF ANALYSIS
The Lease included terms pursuant to which AHP has the right to purchase the Property subject to the terms set forth in the lease agreement, which included, among other things, a requirement that AHP provide notice of its intent to purchase the Property at least six months prior notice. The Lease required AHP to undertake certain actions to effectuate the purchase including the establishment of an escrow account following its written notice of its election to purchase the Property and to provide the City with a title report. AHP provided City staff a copy of the title commitment on December 6, 2023 and opened an escrow with First American Title Insurance on or about January 4, 2024.
AHP is seeking to close escrow before the end of February 2024 and has asked the City to waive the minimum six-month written notice requirement. Staff has been working with AHP’s attorney on the preparation of the documents needed to complete AHP’s purchase of the Property and can accommodate AHP’s request. The closing will require the execution of a number of documents, including, by way of example, but not limitation, escrow instructions, the special warranty deed conveying the property, and the Termination of the Lease.
Resolution 2024-2389 being presented waives the minimum six-month minimum notice requirement in the Lease, provides authorization to the city manager to execute all documents required to complete AHP’s purchase of the Property and authorizes and directs the city manager and city staff to take all actions necessary to carry out the intent of the resolution and the Lease. Staff is recommending the adoption of Resolution 2024-2389.
AHP is seeking to close escrow before the end of February 2024 and has asked the City to waive the minimum six-month written notice requirement. Staff has been working with AHP’s attorney on the preparation of the documents needed to complete AHP’s purchase of the Property and can accommodate AHP’s request. The closing will require the execution of a number of documents, including, by way of example, but not limitation, escrow instructions, the special warranty deed conveying the property, and the Termination of the Lease.
Resolution 2024-2389 being presented waives the minimum six-month minimum notice requirement in the Lease, provides authorization to the city manager to execute all documents required to complete AHP’s purchase of the Property and authorizes and directs the city manager and city staff to take all actions necessary to carry out the intent of the resolution and the Lease. Staff is recommending the adoption of Resolution 2024-2389.