Commissioner Mast had sought analysis after debate over future of county-owned parcel on South Orange Avenue
Having failed this spring to persuade the majority of her colleagues to support an advertisement of an Invitation to Negotiate on terms for county property located at 261 S. Orange Ave. in downtown Sarasota, Sarasota County Commissioner Teresa Mast did win support for staff research into terms of county leases.
Architecture Sarasota, a nonprofit organization, rents the historic South Orange Avenue structure from the county, as noted during the commission’s discussions this spring.
In late March, Matt Osterhoudt, director of the county’s Planning and Development Services Department, told the board that Benderson Development Co., which owns the site of the County Administration Center on Ringling Boulevard and two adjacent parking lots, had expressed an interest to staff last fall about acquiring the South Orange Avenue parcel.
However, state law necessitates that local government property first be declared surplus and then advertised for sale, instead of allowing for a solitary party to buy a parcel that it wants.
Ultimately, in early May, the majority of the County Commission agreed to hold off on any action regarding the South Orange parcel until discussions between leaders of Architecture Sarasota and Benderson Development had concluded. Commissioner Mark Smith reported on those talks, saying he did not want to “force anybody’s hand, one way or the other.”
In April, the board members had agreed to delay a decision about the property for 18 months.
During the commissioners’ exchanges on April 8, Mast pointed out that Architecture Sarasota is leasing the South Orange site from the county for $10 a year.
She stressed that: “Ten dollars a year,” when the value of the property would indicate a lease calling for a payment between $5,000 and $10,000 a month. So when we talk about being good stewards of our taxpayers’ dollars,” Mast continued, “that is a huge issue for me.”
As it turns out, the report that Mast sought from staff indicates the county’s practice of imposing such low rental fees for not-for-profit organizations such as Architecture Sarasota.
Provided to the commissioners on May 16, the report explains that the direction the commissioners gave staff — on May 20 — called for “an analysis of the County’s current lease [agreements] for County-owned properties comparing terms and conditions.”
In its summary of recent leases for not-for profit entities, the report shows that the City of Venice is leasing the property located at 440 E. Venice Avenue in Venice for $10 a year, to store fire equipment. The term is 10 years with no renewal option, the report notes.
That agreement, which went into effect on May 22, 2024, allows the county to terminate the lease with 120 days of notice, the report adds.
Next, the report says that the Venice Area Audubon Society is renting property standing at 4000 and 4002 S. Tamiami Trail in Venice for $10 a year, for five years. Again, no renewal option was provided. Either party may terminate the agreement with 90 days of notice, the report adds.
That lease went into effect on March 9, 2024, the report notes.
The Architecture Sarasota lease went into effect on Dec. 13, 2023, the report continues. The term is five years, with options for two renewals of five years each. “Either party may terminate [the agreement] with 120 days’ notice,” the report points out.
Yet another not-for-profit county lease went into effect on Dec. 13, 2021, with the Laurel Civic Agency, the report says. The property, located at 509 Collins Road in Nokomis, is used for community service programs that are open to the public, the report adds.
Again, the rent is $10 a year for five years, with one five-year renewal option available. Either party may terminate that lease with 30 days of notice.
The report explains, “Not-for-profit County Leases are typically established with local nonprofit organizations,” such as “recreational groups, service-based nonprofits, or community-based institutions.” Those leases, the report notes, often include a “nominal fee” of $10 a year, with no security deposit necessary. The initial terms, the report continues, “usually span five or ten years, with one or more renewal options. Renewal notice requirements are typically not less than 90 days prior to expiration, although some agreements require as little as 60 days’ notice.”
Those leases also include clauses specifying that the property remain open to the public and that the county “retains access for public or governmental purposes, provided it does not interfere with the tenant’s operations.”
In terms of restrictions in those leases, the report says, “No assignment of the lease is permitted” and “No liens may be placed on the County property for any reason.”
The for-profit leases
In regard to leases with for-profit entities, the report continues, the “agreements are structured differently to reflect the commercial nature of the relationship …”
For example, the report points out that the rents “are based on market value appraisals performed” by the internal appraiser with the county’s Property Management Division, “using both property-specific characteristics and average area rental rates.”
Generally, those leases have a one-year base term, “often with 4 or 5 additional renewal options, depending on the use case and negotiated terms,” the report adds.
Further, the report notes, “These leases are exclusive-use agreements and do not include public access requirements.” However, as with the not-for-profit leases, the agreements do include the provisions that the tenants cannot assign the leases or sublet the property without county consent, and no liens area allowed.
Additionally, most of those leases allow termination by either party, with 90 days of notice, though some provide for notice periods of 30, 60 or 120 days, the report points out.
Moreover, the leases “include termination provisions for breach or non-performance, applicable to both for-profit and non-for-profit tenants.”
The report also explains that the Office of the County Attorney staff reviews every county lease “for legal sufficiency,” before the lease is executed by either party, “ensuring compliance with applicable laws, County policies, and risk mitigation practices.”
A lease tracking system
Another section of the report explains that the Property Management Division, which “is responsible for coordinating the County’s competitive lease process,” launched an initiative in 2023 “in an ongoing effort to improve efficiency and transparency.” The division staff “developed a centralized lease tracking system,” which “has significantly enhanced the monitoring and management of all County leases.”
Key feature of that system are as follows, the report continues:
- “Direct access to all County lease agreements and supporting documentation.
- “Centralized and streamlined display of lease terms and conditions.
- “Clear visibility of critical information such as effective dates, termination/expiration timelines, and renewal statuses.
- “A filterable breakdown of lease agreements by category (e.g., Lease, License, Recreational Use, Legacy Trail Direct Access), tenant name, parcel identification number, nonprofit status, and more.
- “Automated alerts and reminders for upcoming lease expirations,” as well as renewal deadlines.
The system “provides a robust foundation for conducting the requested comparative analysis of lease terms and conditions,” the report points out, referring to Mast’s direction for the assignment.
Altogether, the report says, the county has 123 active agreements. Of those, it adds, 22 involve active leases, with the county as the landlord. Another 26 pertain to recreational use, and 38 are license agreements.
The 22 active leases were the basis for the analysis, the report explained, “as they directly reflect the County’s leasing practices and responsibilities in managing County-owned assets.”