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HomeMy WebLinkAboutA001 - Council Action Form dated January 13, 2026ITEM #:24 DATE:01-13-26 DEPT:ADMIN SUBJECT:DIGITAL BILLBOARD LEASE ON PORTION OF 731 BILLY SUNDAY ROAD COUNCIL ACTION FORM BACKGROUND: City Council first considered the concept of leasing land for a digital billboard along Highway 30 as part of the update on the Linc Project located along Lincoln Way in October 2022. At that time, the developer noted that for the Linc to proceed, the two billboards located on the site would need to be removed and that the billboard owner, Lamar Advertising, would consider ending their leases early if a suitable alternative could be found. Lamar representatives indicated that a digital billboard--which does not currently exist within A m e s -- would be a desirable alternative along the HWY 30 corridor. Staff provided an overview to City Council of the lease concept on City property along Highway 30 by the Hunziker Youth Sports Complex in February 2025. At that time Council, directed staff to proceed with preparing a zoning text amendment to allow for digital billboards and to finalize a lease. In June 2025, the City Council adopted revisions to the Zoning Ordinance to modify billboard standards and create new digital display standards. The City also recently completed the final plat of Billy Sunday Road subdivision to create City lots for leasing and future sale. The lease area is within Lot 3 of the subdivision. Throughout 2025, City staff worked with representatives of Lamar to finalize the terms of a lease agreement. A lease has been prepared and is attached for the City Council's consideration. The following are highlights of the proposed terms: Initial term of 20 years, with two 10-year renewal options Initial rent of $25,000, with rent escalation every 5 years by 15% or CPI, whichever is greater Permission for Lamar to remove trees and prohibition of obstructions on the premises, including along the access drive parallel to Highway 30, within the viewable area directed to Highway 30 At the end of the lease, Lamar removes all materials and restores the site within 90 days Indemnification for the City Prohibits advertising of certain products, such as tobacco, vaping, and adult entertainment Limits on advertising that stigmatizes or taints the reputation of businesses, entities, products, services, or activities taking place or having a presence in the City of Ames 1 The City receives public service announcement advertising at no cost when space is available, with a minimum of four two-week periods per year The lease area of the City property is approximately 320 feet west of the parking lot on the Youth Sports site (see attached site location exhibit). The sign will be set back 10 feet from the private drive and have two angled display boards facing towards Highway 30. The southern edge of the billboard will overhang part of the recently constructed trail in this area. Final details of the billboard design are subject to staff review for conformance to zoning standards as part of a Minor Site Development Plan process. The approval of this lease agreement was originally anticipated in fall 2025. However, more work was needed to address removal of some additional obstructing trees along Highway 30. These trees have been evaluated by the City Forester and they are undesirable volunteer trees in the fence line. The lease agreement now incorporates language requiring Lamar to pay for the removal of these trees and to further pay for installation of replacement trees in a more appropriate location. Staff has obtained a quote for removal and has developed a planting plan for replacement trees. With these issues resolved, the lease agreement may now be considered for approval. ALTERNATIVES: 1. Approve the attached lease agreement with Lamar Advertising to place a digital billboard on City of Ames property known as Lot 3 of the Billy Sunday Subdivision generally addressed as 731 Billy Sunday Road. 2. Direct staff to modify the lease agreement. 3. Do not approve the agreement. CITY MANAGER'S RECOMMENDED ACTION: The proposed digital billboard lease allows for the construction and operation of a digital billboard on City property. In exchange, the City receives three direct benefits: 1) rent payments for the use of the property, 2) the ability to use advertising space on the billboard at no cost for periodic public service advertisements, and 3) the removal of two non-conforming double-sided billboards on Lincoln Way near downtown. The two non-conforming billboards that will be removed will resolve one key barrier to moving forward with the Linc project. City staff believes the proposed lease terms are fair in comparison with terms for other long-term leases of City property. The attached lease has been provided to Lamar representatives and will be signed and returned to the City prior to City Council approval. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1, as described above. ATTACHMENT(S): Location City of Ames Lease - Final.pdf 2 3 Rev 1/8/26 THE COMPANIES Lamar Co # _________ SIGN LOCATION LEASE THIS LEASE AGREEMENT, made this ________ day of ___________________, 20_______, by and between: CITY OF AMES, IOWA (hereinafter referred to as “Lessor”) and THE LAMAR COMPANIES (hereinafter referred to as “Lessee”), provides WITNESSETH “LESSOR hereby leases to LESSEE, its successors or assigns, as much of the hereinafter described lease premises as may be necessary for the construction, repair and relocation of an outdoor advertising structure (“sign”), including necessary struc tures, advertising devices, utility service, power poles, communications devices and connections, in conformance with the drawings and site plan attached to this agreement as Exhibit A, with the right of access to and egress from the sign by LESSEE’S employees, contractors, agents and vehicles and the right to survey, post, illuminate and maintain advertisements on the sign, and to modify the sign to have as many advertising faces, including changeable copy faces or electronic faces, as are allowed by local and sta te law, and to maintain telecommunications devices or other activities necessary or useful in LESSEE'S use of the sign. LESSEE may not modify the sign from the drawings and site plan attached as Exhibit A to this agreement without the written consent of LESSOR; such consent shall not be unreasonably withheld. The premises are a portion of the Lessor’s property located in the County of STORY, State of IOWA, more particularly described as Lot 3 of the Billy Sunday Subdivision that includes a lease area of 45 feet by 60 feet generally located with its eastern boundary 275 feet from west of the NE corner of Lot 3 and the north boundary 45 feet south of the north property line, see Exhibit B for location 1. This Lease shall be for a term of twenty (20) years commencing on the first day of the calendar month following the date of completion of construction of the sign, but not later than 12 month from the approval of the agreement. (“commencement date”). LESSEE may renew this Lease, for up to two (2) additional terms, of ten (10) years each, on the same terms and conditions. Each renewal term shall automatically go into effect unless either party shall give to the other party written notice of non-renewal at least ninety (90) days prior to the expiration of the preceding term. 2. LESSEE shall pay to LESSOR an annual rental of twenty-five thousand ($25,000) Dollars, payable monthly in equal installments of two thousand eighty-three Dollars and thirty-three cents ($2,083.33) each, with the first installment due on the first day of the month following the commencement date. After sixty (60) monthly payments, and every sixty (60) months thereafter, rent shall be increased by 15% or the increase in the Consumer Price Index ("CPI") for the preceding sixty (60) months, whichever is greater. The CPI shall mean the “Consumer Price Index for All Urban Consumers, Midwest Region, All Items” as published by the United States Department of Labor Statistics, or if such index shall be discontinued, the successor index, or if no such successor index sh all exist, then such comparable index as mutually agreed upon by the parties to this agreement. Rent shall be considered tendered upon receipt by LESSOR. 3. LESSEE is aware of the existence of trees and other vegetation on LESSOR’s property that may obstruct the view of the sign from Highway 30, and is further aware that a portion of the adjacent property is owned by LESSOR but leased to and controlled by a third party (Ames Youth Sports Complex, Inc.). The viewable area of the sign from Highway 30 (“Viewable Area”) shall be defined as the triangular area with points located at: 1) the southernmost edge of the sign face, 2) the point where the center point of the eastbound lanes of Highway 30 cross over the center point of the northbound lanes of South Duff Avenue, and 3) the point where the cent er point of the eastbound lanes of Highway 30 cross over the center point of the channel of the South Skunk River. Any veget ation that is partially within the Viewable Area and partially outside the Viewable Area shall be considered wholly within the Viewable Area. During the first one hundred and twenty (120) days following the execution of this Lease, LESSEE may, at its cost, remove any vegetation on the LESSOR’s property that will obstruct the view of the sign within the Viewable Area north of the access drive, except any vegetation on that property owned by LESSOR and leased to a third party, unless that third party consents to such removal. The Lessor shall undertake the removal of certain trees on the adjacent property with the Viewable Area to the east within 120 days of execution of the lease with the requirement of the Lessee to reimburse the Lessor for the removal of trees and for the cost of installing replacement landscaping outside of the Viewable Area. The estimated costs are $12,500 with the final costs payable to the Lessor upon removal of the trees and within 30 days of being invoiced. LESSEE is hereby authorized to remove any such other obstruction or vegetation at LESSEE’S option and at LESSEE’S cost, upon providing thirty (30) days’ advance written notice to LESSOR. If LESSEE identifies tree(s) on the premise that would constitute an obstruction of highway view, and said tree(s) were in existence as of the date first written above, LESSOR shall not remove said trees without installing two (2) replacement trees at locations mutually agreed by the parties for every one (1) tree removed. Replacement tree variety and caliper- or container size for installation shall be subject to LESSOR’S approval and be or corresponding value to the trees removed. LESSEE shall be responsible for compliance with all environmental laws and regulations pertaining to any and all vegetation removal, including but not limited to any specific regulations pertaining t o Indiana bats or other endangered or threatened species. Thereafter, LESSOR agrees not to erect or allow on the premises of the LESSEE’S sign any obstruction of Highway 30 view or any vegetation that may obstruct the Highway 30 view on the premises of the LESSEE’s sign within the Viewable Area or in the area within fifty (50) feet of the Viewable Area . In no event will any vegetation, light poles, or building that is located to the south of the existing private drive located on the premises parallel to Highway 30 and more than 200 feet from the sign face be considered an obstruction. The reference to a Viewable Area does not constitute a covenant, easement, or other interest in the abutting properties that the LESSOR owns. 4. LESSEE may terminate this lease upon giving thirty (30) days written notice in the event of any of the following: a. The sign becomes entirely or partially obstructed in any way, 4 Rev 1/8/26 b. In LESSEE’S opinion the location becomes economically or otherwise undesirable, c. If LESSEE is prevented from constructing or maintaining a sign at the premises by reason of any final governmental law, regulation, subdivision or building restriction, order or other action . LESSEE’s written notice of termination shall include the reason and rationale for such termination. If termination should occur for the reasons outlined in paragraph 4(b) of this agreement in the first five years of the initial term, LESSEE shall be liable for the payment to LESSOR of an amount equal to thirty-six (36) months’ rent, or the balance of the first five years of rent, whichever is less. LESSEE shall have no obligation to pay additional rent if the lease is terminated for the reasons outlined in paragraph 4(a) or 4(c) of this agreement. 5. All structures, equipment and materials placed upon the premises by the LESSEE shall remain the property of LESSEE and may be removed by LESSEE at any time prior to or within ninety (90) days after expiration of the term hereof or any renewal. At the termination of this lease, LESSEE agrees to restore the surface of the premises to its original condition. Should LESSEE fail to remove its structures, equipment and materials from the premises or restore the premises to its original condition within nine ty (90) days of the termination of this lease, LESSOR shall have the right to consider the structures, equipment and materials abandoned, and may remove them, salvage them, and/or restore the premises to its original condition. The cost of such removal and/or restoration shall be billed to and paid by LESSEE, less any salvage value obtained by LESSOR, and LESSEE’s obligation to reimburse LESSOR for such removal and/or restoration shall survive the termination of this lease. LESSEE shall have the right to make any necessary applications with, and obtain permits from, governmental bodies for the construction and maintenance of LESSEE’S sign, at the sole discretion of LESSEE. All such permits and any nonconforming rights pertaining to the premises shall be the property of LESSEE. 6. Should LESSEE fail to pay rent or perform any other obligation under this lease within thirty (30) days after such performance is due, LESSEE will be in default under the lease. In the event of such default, LESSOR must give LESSEE written notice by certified mail and allow LESSEE thirty (30) days thereafter to cure any default. Should LESSEE remain in default thirty (30) days following the receipt of such written notice, LESSOR may terminate this lease. 7. LESSOR represents that it is the owner of the premises and has the right to make this agreement and to grant LESSEE free access to the premises to perform all acts necessary to exercise its rights pursuant to this lease. The Lessor is solely acting as a property owner and not in any other governmental capacity or authority related to the property or site improvements. 8. In the event of any change of ownership of the property herein leased, LESSOR agrees to notify LESSEE promptly of the name, address, and phone number of the new owner, and LESSOR further agrees to give the new owner formal written notice of the existence of this lease and to deliver a copy thereof to such new owner at or before closing. In the event that LESSEE assigns this lease, assignee will be fully obligated under this Lease and LESSEE will no longer be bound by the lease. This lease is binding u pon the personal representatives, heirs, executors, successors, and assigns of both LESSEE and LESSOR. 9. In the event of condemnation of the subject premises or any part thereof by proper authorities, or relocation of the highway, the LESSOR agrees to cooperate with LESSEE to relocate its sign on the premises, subject to applicable zoning law. Any condemnation award for LESSEE’S property in relation to the elimination of or modification of the outdoor advertising structure shall accrue to LESSEE. 10. LESSEE agrees to indemnify LESSOR from all claims of injury and damages to LESSOR or third parties caused by the installation, operation, maintenance, or dismantling of LESSEE’S sign during the term of this lease. LESSEE further agrees to repair any damage to the premises or property at the premises resulting from the installation, operation, maintenance, or dismantlin g of the sign, less ordinary wear and tear. At all times during the term of this Lease, LESSEE shall maintain insurance with limits not less than $1,000,000 combined single limit per specific occurrence for bodily injury, personal injury and property damage covering both General Liability and Automobile Liability and $5,000,000 aggregate coverage covering both General Liability. LESSEE’s insurance shall name the LESSOR as an additional insured and shall require 30 days’ advance notice of cancellation. LESSEE shall furnish LESSOR with certificates of insurance evidencing the coverages required upon request of LESSOR. 11. LESSOR and LESSEE each represent, warrant and agree that they will conduct their activities on the premises in compliance with all applicable laws, which include all federal, state, and local environmental laws, rules, regulations, ordinances, judicial or administrative decrees, orders, decisions, authorizations or permits as may now or hereafter exist. 12. LESSEE agrees to maintain the advertising sign and any appurtenant structures, equipment, or sign faces in a state of good repair. If LESSOR desires to sell or otherwise transfer any interest in the property upon which the sign is situated, LESSEE shall have the right of first refusal to meet any bona fide offer of sale on the same terms and conditions of such offer. Upon LESSEE’S failure to meet such offer in writing within thirty (30) days after written notice thereof from LESSOR, LESSOR may sell the leased premises to the third party in accordance with his offer. 12. Prior to LESSEE removing its sign, and for five (5) years after such removal, LESSOR grants LESSEE a first right of refusal to match any bona fide agreement of LESSOR with a third party for the purpose of permitting off-premise outdoor advertising on any portion of the leased premises. LESSEE has seven (7) days after LESSOR provides to LESSEE a copy of such agreement executed by such third party to match the terms of such agreement. 15. LESSEE agrees that the outdoor advertising sign shall not be used to display: a. Advertisements that promote or relate to: 1) tobacco products (including but not limited to e-cigarettes, vaping products, and traditional cigarettes), 2) controlled substances (regardless of their legality in this or other jurisdictions) or drug paraphernalia, or 3) adult-oriented businesses or services (including but not limited to strip clubs, adult bookstores, escort services, or adult entertainment). b. Advertisements that stigmatize or taint the reputation of an entity, business, product, service, or activity taking place or having a presence within the corporate limits of Ames, Iowa. For example, but not exclusively, disparaging advertisements regarding the City of Ames or Iowa State University. 16. LESSOR may furnish LESSEE with advertisements or public service announcements produced at LESSOR’s sole expense and meeting any advertising design or file size standards as set forth by LESSEE for similar advertisements, which LESSEE shall display on the sign at no cost to LESSOR, insofar as available digital advertising space exists on the sign . The determination of availability of space is in the sole discretion of the LESSEE. However, the LESSEE agrees that at least four advertisement periods of at least two weeks in a manner consistent with commercial displays that occur throughout the day will be made available to the City for public service announcements each calendar year with a minimum of 30 days of notice by the LESSOR. 5 Rev 1/8/26 17. If required by LESSEE, LESSOR will execute and acknowledge a memorandum of lease suitable for recordation. 18. Nothing in this lease is to be interpreted or construed to exempt the LESSEE from obtaining all required permits for the construction and operation of the sign and to maintain the sign in conformance with all local, state, and federal laws regard ing, including Zoning requirements of the Ames Municipal Code. This lease shall be construed in accordance with the laws of the state of Iowa. Any action to enforce the provisions of this agreement or arising from the actions of the parties hereto shall be brought in the Iowa District Court in and for Story County, Io wa, or in the United States District Court for the Southern District of Iowa in Polk County, Iowa. 19. This Lease is NOT BINDING UNTIL ACCEPTED by the General Manager of a Lamar Advertising Company. THE LAMAR COMPANIES, LESSEE: LESSOR: BY: ________________________________________ BY: ___________________________________ _________Jimmy Collins_______________________________ BY: ___________________________________ VICE-PRESIDENT/GENERAL MANAGER DATE: / / DATE: / / ________________________________ LESSOR’S TELEPHONE NUMBER ________________________________ EMPLOYER IDENTIFICATION NUMBER ______________________________________ W-9 Name (as shown on your Income Tax Return) ______________________________________ Property ID (for land on which sign is located) Address of LESSEE: Address of LESSOR: Witnesses (LESSEE) Witnesses (LESSOR) ________________________________ __________________________________ ________________________________ __________________________________ 6 Rev 1/8/26 Exhibit A – Site Plan and Design 7 Rev 1/8/26 Exhibit B- Lease area 45 x 60 ft 8