S.B. 2456 Summary

• Requires lessors of commercial and industrial property with lease terms of five years or more to offer lessees the option to renew leases on fair and reasonable terms.

• Establishes renewal lease parameters including a maximum 5% rate of return (unless fee is subordinated), land value based on 1985 tax-assessed valuation adjusted by consumer price index, and minimum 35-year renewal term with fixed rent for first 15 years and renegotiation every 10 years thereafter.

• Allows lessees unable to agree on renewal terms to either purchase the fee simple title based on appraisal or surrender the lease and improvements, with a 100% windfall surcharge tax assessed to the lessor on the leasehold improvements.

• Requires fair market value calculations in lease renegotiations to be based on the restricted use specified in the lease document, determined by licensed appraisers under uniform professional standards, with disputes resolved by lessee selection rather than arbitration.

• Applies to all property developments leased under master leases executed before or after the act's effective date and prevails over conflicting state laws.