Ind. Code § 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:
1. (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;
2. (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
3. (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.