Council approves long-term lease for 62 North 900 East after months of negotiation

Cedar City Council approved a long-term lease for city-owned property at approximately 62 North 900 East after extended discussion about lease length, rent structure and allowable residential uses.

The council voted to approve the lease with negotiated changes that require the tenant to obtain a building permit within eight years and complete construction within two years after permit issuance; the council also agreed to permit residential units only as short-term rentals above the main (ground) floor. The motion passed in a voice vote with one council member opposed, according to the transcript.

The lease retains a 99-year term and continues a rent structure that combines a fixed minimum base rent with a percentage rent clause: the tenant pays 2% of gross sales once an annual breakpoint is exceeded. City staff said the reduced leaseable acreage is now 1.39 acres; staff also said the lease includes a schedule of modest minimum rent escalations (approximately 1% increases over five-year periods as drafted).

Why it matters: The site sits near planned roadway work and is large enough to support a multi-tenant retail building or a mixed-use project. Council members and public commenters warned a very long lease could limit the city's flexibility if the use or operator proves unsatisfactory; supporters argued the term helps make a large project financially viable.

What council and staff said - Tom Jett, the applicant present for the discussion, asked the council to clarify that percentage rent and base rent operate so the higher of the two applies and said he adjusted rent numbers to reflect the slightly smaller…