Chapter 31-3 BUSINESS SITE LEASE REQUIREMENTS

CHAPTER 31-3
BUSINESS SITE LEASE REQUIREMENTS

31-3-1. Terms and Conditions.

Leases shall be governed by the terms and conditions set forth in the business site lease subject to the provisions of this title. The terms and conditions of a lease may be modified only with the approval of the Tribal Council. The lessee is responsible for understanding these terms and conditions within the lease.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-2. Duration and Renewal.

Unless otherwise stated in the lease, no lease shall be approved more than twelve (12) months prior to the commencement of the term of the business site lease. The term shall not be more than twenty-five (25) years except that any such lease may include an option to renew for up to two (2) additional terms, each of which may not exceed twenty-five (25) years. The Tribal Council will not make an approval determination regarding a lease renewal, unless the lessee notifies the Tribal Council of the intent to renew, no later than one (1) year before such lease is due to expire.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-3. Obtaining a Business Site Lease.

Information on obtaining a business site lease shall be available from the Tribal Council, the Tribal Land Office or such other tribal department properly delegated the responsibility by the Tribal Council.

(A) All applicants for a business site lease shall submit the following documents to the Tribal Council, the Tribal Land Office or such other tribal department properly delegated the responsibility by the Tribal Council:

(1) Financial statement that is sufficient to determine the lessee’s ability to carry out the lease;

(2) Site survey and legal description, as required under Section 31-3-5;

(3) Tribal environmental review as required pursuant to Chapter 31-7; and

(4) Other documents as may be required by the Tribal Council and pursuant to the business site leasing procedures.

(B) All business site leases shall contain, at a minimum, the following provisions:

(1) The legal description of the tract, location, or parcel of the land being leased as provided in Section 31-3-5;

(2) The purpose of the lease and authorized uses of the leased premises;

(3) The parties to the lease;

(4) The term of the lease;

(5) The effective date of the lease;

(6) The ownership of permanent improvements and identification of the responsible party for constructing, owning, operating, maintaining, and removing any improvements to the leased premises;

(7) Indemnification of United States and the Nation;

(8) Payment requirements, including provisions regarding acceptable forms of payment, late payments, penalties, and interest, among others;

(9) The dates on which all payments are due;

(10) Language specifying that the lessee shall make payments directly to the Tribal Council;

(11) Unless otherwise provided in the lease, payments may not be made or accepted more than one (1) year in advance of the due date;

(12) Due diligence, insurance, and bonding requirements as provided in this chapter;

(13) If the leased premises are within an Indian irrigation project or drainage district, lease must state the following: “If the leased premises are within an Indian irrigation project or drainage district, except as provided by 25 C.F.R. 171, the lessee must pay all operation and maintenance charges that accrue during the lease term. The lessee must pay these amounts to the appropriate office in charge of the irrigation project or drainage district.”

(C) The Tribal Council or the Tribal Land Office or other tribal department, if delegated to the said office or department by the Tribal Council, shall ensure that a copy of all leases, subleases, assignments, amendments, and renewal notices related to leases, leasehold mortgages, and terminations shall be provided to the Secretary of the Interior, or such other office delegated authority by the Secretary, as required by 25 U.S.C. §415(h)(6)(A) and for purposes of recording with the LTRO. The Tribal Council shall endeavor to provide such notices within thirty (30) days of the effective date of the instrument or action. Additionally, proof of lease payment(s) made directly to the Nation shall also be provided to the Secretary pursuant to 25 U.S.C. §415(h)(6)(B).

(D) The Tribal Land Office is responsible for maintaining all records of all business site leases and for disseminating recorded lease documents to the Tribal Council Secretary and any other tribal department as deemed necessary by the Tribal Council. In carrying out the responsibility to maintain all records of business site leases, the Tribal Land Office shall:

(1) Record each lease in a log which shall contain, at a minimum, the following information:

(a) The name(s) of the lessee of each lease, identified as such;

(b) The date and time of the receipt;

(c) The filing number to be assigned by the Tribal Land Office, which shall be a unique number for each lease and accompanying document; and

(d) The name of the Tribal Land Office staff receiving the lease.

(2) Endorse the following information from the log upon any lease received for recording:

(a) The date and time of receipt of the lease;

(b) The filing number assigned by the Tribal Land Office; and

(3) The Tribal Land Office shall make a true and correct copy of the lease and shall certify it as follows:

I certify that this is a true and correct copy of a document received for recording this date.

Given under my hand and seal this ________ day of __________.

____________________

(Signature)

____________________

(Date)

(4) The Tribal Land Office shall maintain an index where copies of all certified leases and their accompanying documents are located and may be retrieved by a search based on the legal description of the leased premises.

(E) Records of activities taken pursuant to this title are the property of the Nation. Records compiled, developed, or received by the Secretary are the property of the United States.

(F) Unless the business site lease states otherwise, a lease may include, consistent with tribal law, a provision to give tribal preference in hiring for employment purposes.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-4. Space Leases.

Space leases shall be reviewed and approved pursuant to this title.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-5. Land Descriptions.

Business site leases shall contain adequate site surveys and legal descriptions based on metes and bounds, rectangular or lot and block systems sufficient to permit the LTRO to identify the particular leased site and record the lease. Space leases shall contain adequate descriptions of the tribal trust land, location and square footage of the space being leased sufficient to permit the LTRO to identify the particular leased site and record the lease, and may include renderings, architectural drawings or other schematics to illustrate the location of the space.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-6. Appraisal; Local Studies.

(A) The fair market lease value shall be determined by an appraisal or equivalent procedure performed by the Tribal Land Office and approved by the Tribal Council utilizing the following data: improvement cost, replacement cost, earning capacity, sales and lease data of comparable sites or by similar methodology as approved by the Tribal Council and deemed to be in the best interest of the Nation. An appraisal log reporting the methods of appraisal and value of the tribal trust land shall be attached to every business site lease.

(B) Alternatively, the fair market lease value shall be determined by an appraisal performed by a licensed appraiser utilizing the Uniform Standards of Professional Appraisal Practice, or other commonly accepted method of appraisal. An appraisal log describing the method of appraisal and value of the tribal trust land and shall be attached to every business site lease.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-7. Fair Market Lease Value.

(A) No lease shall be approved for less than the present fair market lease value as set forth in the appraisal, except as follows:

(1) The lease is in the development period;

(2) The Tribal Council is providing an incentive for business to locate on tribal trust lands, and desires to provide lease concessions, lease improvement credits and/or lease abatements to attract such businesses; or

(3) The Tribal Council determines such action is in the best interest of the Nation.

(B) A lease may be structured at a flat lease rate.

(D) A lease may be structured based on a percentage of gross receipts, or based on a market indicator.

(E) A lease may provide for periodic review for lease rate adjustments and such review may give consideration to the economic conditions, exclusive of improvement or development required by the contract or the contribution value of such improvements.

(F) A lease may be structured to allow for lease rate adjustments. The lease shall specify how adjustments will be made, who will make such adjustments, when adjustments will go into effect, and how disputes shall be resolved.

(G) The Tribal Land Office shall keep written records of the basis used in determining the fair market lease value, as well as the basis for adjustments. These records shall be presented to the lessee for its review and acceptance or nonacceptance and included in any lease file.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-8. Environmental Review Process.

Unless exempted pursuant to Chapter 31-7, the Tribal Council shall not approve a business site lease until the proposed business site lessee has completed the environmental review process herein. Any lease approved and executed without complying with this section shall be null and void.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-9. Insurance.

(A) A lessee shall provide insurance necessary to protect the interests of the lessor and in amounts sufficient to protect all insurable improvements on the premises.

(B) The insurance may include, but is not limited to, property, liability or casualty insurance, or other insurance as specified in the business site lease.

(D) The Tribal Council may waive this requirement if the waiver is in the best interest of the Nation or the best interest of the lessor. The waiver may be revoked at any time if the waiver ceases to be in the Nation’s or lessor’s best interest.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-10. Performance Bond.

(A) The lessee shall obtain a satisfactory performance bond in an amount sufficient to secure the contractual obligations of the lease. Such bond shall be for the purpose of securing the lessee’s contractual obligations under the business site lease and may guarantee:

(1) The annual lease payment;

(2) The estimated development cost of improvements; and

(3) Any additional amount necessary to ensure compliance with the lease.

(B) The Tribal Council may waive the bond requirement, or reduce the amount, if doing so is in the best interest of the Nation. The Tribal Council, or the Tribal Land Office or other tribal department, if delegated to the said office or department by the Tribal Council, shall maintain written records of waivers and reductions.

(1) Certificates of deposit issued by a federally insured financial institution authorized to do business in the United States;

(2) Irrevocable letters of credit issued by a federally insured financial institution authorized to do business in the United States;

(3) Negotiable Treasury securities; or

(4) Surety bond issued by a company approved by the U.S. Department of the Treasury.

(D) The Tribal Council may impose additional requirements for performance bonds beyond those listed in this title; including, but not limited to, requiring performance bonds to be irrevocable, or requiring notification to the Nation in the event the performance bond is cancelled.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-11. Improvements.

All business site leases shall require the lessee to exercise due diligence and best efforts to complete construction of any improvements within the schedule specified in the business site lease.

(A) Lessee, at lessee’s expense or as otherwise provided in the business site lease, may construct improvements under a business site lease if the lease specifies or provides for the development of:

(1) A plan that describes the type and location of any improvements to be built by the lessee; and

(2) A general schedule for construction of the improvements.

(B) Lessee shall provide the Tribal Council, or the Tribal Land Office or other tribal department, if delegated to the said office or department by the Tribal Council, written justification as to the nature of any delay, the anticipated date of construction of the improvements, and evidence of progress toward commencement of construction. The Tribal Land Office or other tribal department shall report such information to the Tribal Council.

(C) When requested by the Tribal Council, or Tribal Land Office or other tribal department, if delegated to said office or department by the Tribal Council, or otherwise required in the business site lease, lessee shall further provide the Tribal Council, Tribal Land Office or other tribal department, in writing, an updated schedule for construction. The Tribal Land Office or other tribal department shall report such information to the Tribal Council.

(D) Failure of the lessee to comply with these requirements will be deemed a violation of the business site lease and may lead to cancellation of the business site lease pursuant to Chapter 31-5.

(E) Improvements to the premises shall become the property of the Nation unless otherwise provided for in the business site lease. If improvements will be removed, the business site lease shall specify the maximum time allowed for such removal.

(F) A lessee may develop equity value in the improvements, and sell its interest in the business site lease based on the equity value. The Tribal Council, on behalf of the Nation, has a right of first refusal to purchase the interest.

(G) The business site lease may provide that at expiration of the business site lease, the lessor may purchase improvements to the premises at fair market value.

(H) If the business site lease provides that at expiration of the business site lease any reclamation, restoration, or remediation is required due to the nature of the improvements a plan for such action shall be included that sets forth the obligations of the lessor and the lessee.

(I) Unless allowed by applicable federal law, no fee, tax, assessment, levy, or charge imposed by a state or political subdivision shall apply to permanent improvements, activities under business site leases, or the leasehold or possessory interest on tribal trust land. The Nation may impose its own taxes or other charges on the same.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-12. Subleases, Assignments, Amendments and Leasehold Mortgage.

(A) Subleases, assignments, amendments, or leasehold mortgages of any business site lease shall be by written consent of the Tribal Council and lessee, unless otherwise provided herein.

(B) The business site lease may authorize subleases and assignments, in whole or in part, without approval from the Tribal Council and execution from the executing official, provided a copy of the sublease or assignment is provided to the Tribal Council through the Tribal Land Office or other tribal department designated by the Tribal Council, and the following conditions, where applicable, are met and stated in the business site lease:

(1) There is no event of default under the business site lease or violation of this title;

(2) Any restrictions and use limitations on the use of the premises shall continue to apply to any sublessee or assignee;

(3) The proposed assignee or sublessee submits a current financial statement showing financial adequacy; and

(4) The lessee shall not be relieved or released from any of its obligations under the business site lease, except as otherwise expressly authorized therein.

This subsection (B) in no way relieves the lessee or the sublessee from carrying out their duties under the business site lease, which may contain additional restrictions and conditions.

(C) The lease may authorize a leasehold mortgage for the purpose of financing to develop and improve the premises subject to approval by the Tribal Council and execution from the executing official.

(D) If a sale or foreclosure of the lessee’s business or assets occurs and the mortgagee is also the purchaser, the mortgagee may assign the lease without approval of the Tribal Council or lessee, provided the assignee agrees in writing to be bound by all the terms and conditions of the lease. If the purchaser is a party other than the mortgagee, approval by the Tribal Council and execution from the executing official is required, provided the purchaser agrees in writing to be bound by all terms and conditions of the lease.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-13. Applicable Law.

The lease shall state that it is governed by tribal and federal law. The parties to the lease may further provide for the application of any other body of law, such as the laws of a specified state and the order of application. The lease shall further mandate compliance with all applicable laws, ordinances, rules, and regulations, and the business site leasing procedures.

(Enacted by PBP TC No. 2017-358, November 29, 2017)

31-3-14. Lease Approval and Issuance.

The Tribal Council has the authority to give final approval for all business site leases and may delegate some or all of its authority to tribal agencies on behalf of the Nation.

(A) Unless otherwise provided pursuant to Section 31-3-12, a lease that meets the requirements of this title shall be submitted to the Tribal Council, or Tribal Land Office or other tribal department designated by the Tribal Council, for consideration. Final determination of whether the lease shall be approved or not rests with the Tribal Council. After review, if an approval is given, the executing official shall be authorized to sign the lease on behalf of the Nation.

(B) Notice of Decision. The executing official or other such person designated by the Tribal Council shall provide written notice of all final Tribal Council decisions to the prospective lessee, by personal delivery, facsimile transmission, email, or United States first class mail to the mailing address as set forth in the lease documents. Failure to give or receive such notice shall not affect the validity of any determination, recommendation, or action.

(Enacted by PBP TC No. 2017-358, November 29, 2017)