Notwithstanding Section 45308.1 funds received by city retirement systems and not required for current disbursements may be invested in real property or improvements constructed or to be constructed on real property, when such real property or such improvements are acquired for sale or lease to a city, county, school district, political subdivision, or political corporation of this State, subject to the following limitations:
(1) No investment shall be made in such real property or improvements unless it is approved by a four-fifths vote of the members of the body authorized by ordinance to invest the retirement funds.
(2) No such investment shall be made unless the assets of the retirement system exceed five hundred thousand dollars ($500,000), and the investment, together with other investments in real property and improvements, do not exceed twenty-five percent (25%) of the assets of the retirement system.
(3) Before an investment is made in such real property or improvements, the investing authority shall enter into a lease or lease-option agreement with the public agency hereinbefore mentioned, under which said public agency agrees to rent the property at a monthly rental and for a period not to exceed 50 years, sufficient to return not less than the investment, together with interest at a rate hereinafter prescribed. The agreement may contain an option or options to purchase; provided, such option, together with the rentals, will return not less than the investment, together with interest at a rate hereinafter prescribed. In the event a building is built on land owned by the public agency, the agreement may contain an option to purchase the land at any time or at the termination of the lease at its fair market value.
(4) The interest rate each year shall be one-fourth percent (1/4%) higher than the average interest rate received by the retirement system on assets other than real property or improvements for the preceding year.
(5) In order to make the provisions of this section relating to the investment in real property or improvements completely effective, the investing authority is authorized, for investment purposes only, to purchase, sell, or lease real property, or to enter into options therefor; and when necessary for investment purposes to enter into contracts for the construction of buildings, and to repair and maintain such property, and do any and all things necessary to protect the investment including, but not limited to, purchasing insurance against the loss of the property or the loss of use and occupancy of the property. It may also take any other action necessary to carry out the investment provisions of this section. In the construction of buildings the investing authority shall follow, substantially and insofar as applicable, the procedure and limitations prescribed by law for the construction of buildings by the city in which the retirement system is established.
(Added by Stats. 1959, Ch. 168.)