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Title:
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Real Estate Option: 2888 Kyla Avenue
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STRATEGIC OUTCOMES
ACTION
DEPARTMENT:
? Safe & Prosperous
? Motion
City Administration
? Active & Appealing
? Resolution
? Respected & Responsible
? Ordinance - Introduction
DIVISION:
? Connected & Engaged
? Ordinance - Adoption
City Administration
? Unique & Creative
? Public Hearing
TITLE: t
Real Estate Option: 2888 Kyla Avenue
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SUMMARY RECOMMENDATION: Summary Recommendation
Approve an agreement with Top Quality Products, LLC that provides an option to purchase City-owned property. (City Administration) (Jay Simonton)
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STRATEGIC OUTCOME:
This item furthers City Council's strategic outcome of Safe and Prosperous by facilitating economic development.
REPORT:
On May 17, 2010, 360 Networks (USA), Inc. quitclaimed, approximately 2.41 acres of property (the Property) to the City including two modular buildings at 2862 S. Kyla Avenue (Building One) and 2888 S. Kyla Avenue (Building Two). The Property is adjacent to the Union Pacific railroad right-of-way.
In 2013, the City leased Building One and approximately 10,160 square feet of the Property to Zayo Group, LLC (Zayo) for up to four sequential five-year terms (Zayo Lease). The Zayo Lease is in its third five-year term and expires in 2028. The City expects Zayo to request a fourth five-year term that would expire in 2033.
The City uses Building Two as an evidence storage facility for its police department while a new evidence storage facility is being built near Avenue 4E and 36th Street.
Top Quality Products, LLC (Buyer) is developing a bioprocessing facility in Yuma to process an agricultural crop into dry pulp bales and is requesting an option to purchase the Property due to the Property's proximity to the Union Pacific railroad.
The City and Buyer have negotiated a draft agreement on file with the City Clerk titled "Option to Purchase Real Estate" whereby the Buyer would pay the City $20,000.00 for an option to purchase the Property with the following conditions:
1) Buyer will pay the City $930,000.00 for the Property upon exercising the Option to Purchase.
2) Buyer will not exercise the option to purchase before the later of January 1, 2027, or City issuance of a permit for grading and site utilities of Phase II of the anticipated project unless otherwise agreed upon by the parties with the consent by motion of the City Council.
3) The Option to Purchase expires on December 31, 2031, unless the Buyer renews it for an additional five-year term and pays the City an additional $50,000.00.
4) Buyer will maintain the Property in substantially the same condition and perform all of the City's obligations under the Zayo Lease.
5) Buyer will transfer up to 10,000 square feet of reasonably suitable nearby property ("Replacement Property") to the City and allow the City to remove Building Two from the Property and relocate it to the Replacement Property for the purpose of the City entering a new lease with Zayo at the Replacement Property.
The attached Ordinance authorizes the option agreement in accordance with the described terms and, should Buyer exercise the option, the sale of the Property and the acquisition of the Replacement Property.
FISCAL REQUIREMENTS:
CITY FUNDS:
$ 0.00
BUDGETED:
$ 0.00
STATE FUNDS:
$ 0.00
AVAILABLE TO TRANSFER:
$ 0.00
FEDERAL FUNDS:
$ 0.00
IN CONTINGENCY:
$ 0.00
OTHER SOURCES:
$ 0.00
FUNDING: ACCOUNT/FUND #/CIP
TOTAL
$ 0.00
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To total; right click number & choose "Update Field"
FISCAL IMPACT STATEMENT:
This ordinance would generate a positive fiscal impact by the initial payment received from Buyer and by facilitating potential economic development.
ADDITIONAL INFORMATION:
SUPPORTING DOCUMENTS NOT ATTACHED TO THE CITY COUNCIL ACTION FORM THAT ARE ON FILE IN THE OFFICE OF THE CITY CLERK:
NONE
IF CITY COUNCIL ACTION INCLUDES A CONTRACT, LEASE OR AGREEMENT, WHO WILL BE RESPONSIBLE FOR ROUTING THE DOCUMENT FOR SIGNATURE AFTER CITY COUNCIL APPROVAL?
? Department
? City Clerk's Office
? Document to be recorded
? Document to be codified
ACTING CITY ADMINISTRATOR:
DATE:
John D. Simonton
8/26/2025
REVIEWED BY CITY ATTORNEY:
DATE:
Richard W. Files
8/25/2025
Version 2