City inks 5-year lease deal with Farrells

City Council unanimously approved at its regular meeting Tuesday a $104,000 five-year lease agreement with Maricopa Manor Business Center for 990 square feet of office space to relocate Maricopa Domestic Water Improvement District’s office.

Vice-Mayor Edward Farrell, who owns the business center with his mother, Alma, did not attend the meeting.

Whether the Farrells will continue to own the center is unclear.

The Farrells had defaulted on three loans totaling nearly $4 million to Great Western Bank for the cluster of offices. They also owed property taxes and flood insurance on the business center at John Wayne Parkway and Garvey Avenue, according to court documents.

A trustee auction to sell the property is scheduled at 10 a.m. Friday in Florence. The auction has been rescheduled four times since its original date of June 14.

The vice mayor said last month he is trying to work out a loan modification with the lender.

A letter dated July 13 from an attorney representing the Maricopa Manor Business Center, Donald W. Powell of Phoenix, states negotiations regarding modifications of the loans had been occurring between the lender the business center for several months and that any and all past-due expenses involving Manor and Great Western Bank are current and resolved.

InMaricopa has left messages for attorneys representing both the bank and the business center to clarify how Farrell can be up-to-date on the loans while at the same time the trustee auction is still scheduled for Friday. The messages were not immediately returned.

The request for the lease agreement was made by Assistant City Manager Roger Kolman, and the lease will be funded through a line item in City Manager Brenda Fischer’s budget.

The center was chosen because it is in the Heritage District, an area serviced by Maricopa Domestic Water, and was lower in total cost than two other options that were considered in the Heritage District, Kolman wrote in a staff report.

The most expensive proposal was for a 1,378-square-foot office space on S.R. 347 for $29,489 a year. The second proposal was for a 1,750-square-foot office space on S.R. 347 for $26,400 a year. The agreement with the Farrells is for $20,790 a year.

The base lease cost for the 990-square-foot space at Maricopa Manor was the highest of the three at $16 per square foot. The base lease costs for the 1,750 square-foot and 1,378-square-foot spaces were $15.08 and $15, respectively.

The water district’s campus is located at 44801 W. Honeycutt Road and needs additional space for 115,000 gallons of water storage. To provide more storage space, the district needs to move its administrative office.

The new storage capacity will improve fire protection for existing residences and businesses in the service area while providing the additional capacity necessary to serve new businesses.

The city is obligated to locate and lease acceptable administrative office space for the district’s offices to relocate to in order to make room for the new water tank on their existing property, Kolman wrote in his report.