§ 36-9-11-14 — Lease of space and air rights; deposit of rentals

(a) Space and air rights over a parking
facility may be leased to others for a period not to exceed ninety-nine
(99) years, subject to the following conditions:
(1) The lease must be authorized by an ordinance of the municipal
legislative body, but the municipal works board may negotiate
with interested parties concerning the terms and conditions of the
lease before introduction of the ordinance. After introduction of
the ordinance and before final adoption, a notice of public hearing
must be published in accordance with IC 5-3-1. The notice must
specify a date when a public hearing will be held on the question
of whether the lease is in the best public interest.
(2) The lease must specify the initial purpose for which the leased
space may be used. If the purpose is to erect in the space a
structure attached to the real property constituting the site of the
parking facility, the lease must:
(A) require approval by the works board of the plans and
specifications for any structure to be erected and of the manner
in which it shall be imposed upon or around the real property;
(B) provide for use by the lessee of the areas of the surface of
the site that are essential for the support of the structure to be
erected, as well as for the connection of essential public or
private utilities to the structure and for ingress and egress for
the structure; and
(C) provide that if the construction of the initial structure is not
completed within five (5) years after the date of execution of
the lease, the lease is cancellable at the option of the
municipality.
(3) A structure erected in the space leased must be financed,
operated, maintained, and repaired by the lessee separate from the
parking facility financed, operated, maintained, and repaired by
the municipality, and the municipality has no obligation or
liability to the lessee or creditors of the lessee other than to
provide the air space leased and to permit the use of the site for
the necessary supports for the structure erected in the leased
space, ingress and egress for the structure, and the construction of
essential utilities.
(4) The lease must require the lessee to carry sufficient public
liability and property damage insurance to indemnify the
municipality and protect it from all loss and damage from the
hazards and perils normally insured against by such insurance that
arise out of the existence and operation of a structure in the leased
space.
(5) A structure erected above the parking facility is subject to all
property taxes levied on private property unless the structure is
acquired by the municipality and wholly used for governmental
purposes.
(b) The lease rental received by the municipality is considered
revenue of the parking facility and shall be deposited, handled, and
disbursed in the same manner as other revenues of the parking facility.
However, if the treatment of lease rental as revenues would cause the
revenue bonds to be industrial development bonds under the Internal
Revenue Code as it existed on January 1, 1986, and applicable
regulations under that Code, then the lease rental shall be deposited in
the general fund of the municipality and disbursed in the same manner
as other money in that fund.
[Pre-Local Government Recodification Citation:
19-5-11-11.1.]
As added by Acts 1981, P.L.309, SEC.84. Amended by Acts
1981, P.L.45, SEC.45; P.L.2-1987, SEC.51.