Kings Point Park Lease Agreement
GREAT NECK PARK DISTRICT
FINALIZATION OF 2023 LEASE AGREEMENT
WITH VILLAGE OF KINGS POINT FOR KINGS POINT PARK
The Park District is pleased to announce that a year-long negotiation between the Park District and the Village of Kings Point has concluded in the finalization of a new lease entitling the Park District to operate Kings Point Park as a Park District facility.
Since the last ten year lease expired in 2015, the Park District has continued to use Kings Point Park on a month-to-month tenancy. As a month-to-month tenant, the Park District refrained from investing in any facilities or improvements at Kings Point Park. The lack of investment has negatively impacted the attractiveness and utility of this 172 acre asset.
The current administrations of the Park District and the Village revived lease renewal conversations last year. Now, after much effort, we are pleased to announce that the Lease tentatively agreed to several weeks ago has now been finalized, signed and exchanged by the parties. As a result, the Park District can invest in improvements to the Park to make it the recreational asset that we believe it can be.
The new Lease involves a significant increase in annual rental from the long-standing far-below-market rental that the Park District enjoyed as a month-to-month tenant, and under the prior leases for a term. Kings Point Park is village parkland that, but for special New York State Legislation allowing the rental to the Park District, would be available only to Village residents. The Park District understands the Village’s first obligation is to its residents, and the Village Board’s position that the Village and its taxpayers (who also pay a significant portion of Park District taxes based upon property value assessments) have for decades subsidized for the greater Great Neck community a unique and valuable asset that is the property of Village residents.
To establish a basis for the new annual rental amount, the Park District and the Village each obtained an independent appraisal of the value. The new annual rental amount is lower than both appraisals, reflecting the facility investment obligations of the Park District under the Lease.
Some key terms are as follows:
1. Term. The term is ten years, which is the maximum term allowable under New York State legislation enacted in 1967 that ratified and authorized the Village to ‘alienate’ Kings Point Park, which is village parkland, through a lease to the Park District.
2. Renewal Options. The Park District has conditional options to extend that ten year term for three additional ten year renewal terms, for a total of forty years from now.
3. Annual Rental. The annual base rental is $350,0000 during the entire ten-year initial term. For Lease year eleven, there will be a 10% increase, which again will be a fixed annual rental during the entire ten years of that first renewal term, covering Lease years 11 to 20. The same approach will apply to the second renewal term, covering Lease years 21 to 30, with an increase of 10% over the annual base rent during the first renewal term. The cumulative base rental increase over the first 30 years of the Lease will be approximately 21%, or less than 1% per year. For the 3rd renewal term, covering Lease Years 31 to 40, the annual base rent will increase by the greater of 10% over the annual base rent during the second renewal term, or the increase the Consumer Price Index during the second renewal term.
4. Park District Investment in Improvements to Kings Point Park or Steppingstone Park or other Park District Assets in the Village. The Lease obligates the Park District to invest at least $15 million in Park District assets to make improvements to parks in the Village of Kings Point, at least $10 million of which will be invested in improvements to Kings Point Park. If the Park District does not have funds available from other sources (property taxes, grants, donations, etc.), then the Park District must apply for and obtain bond financing approval from the Town of North Hempstead to enable such investments. In the unlikely event that the Park District fails to pursue or obtain the required funding or complete the investment projects within time frames established under the Lease, then the annual rental will increase until the obligations are satisfied, while a failure to timely obtain the bond financing will give the Village the option to terminate the Lease, exercisable until the Park District obtains the bond financing. The types of improvements pre-approved by the Village are contained in Schedule F to the new Lease.
5. Reimbursement of Park District Investment upon Early Termination or Non-renewal of Lease. So long as the Park District is not in default under the Lease, if the Village terminates the Lease early, or fails to accept a renewal option exercise, then the Village will be required to reimburse the Park District for the amount invested in the bond financing, plus $10 million.
6. Right to Lease Village DPW Property if Village relocates. If the Village is able to relocate its current DPW facility, then the Village will lease the current DPW yard to the Park District. That current DPW yard lot is close to Steppingstone Park, and could be used by the Park District for its own maintenance facility or to relocate parking for Steppingstone, allowing the current Steppingstone parking lot to be transformed into green space or other recreational facilities for users of Steppingstone.