Agreements of lease.

(1) No project financed under the provisions of this part shall be operated by the local agency or any other governmental agency, except that the local agency may temporarily operate or cause to be operated all or any part of a project to protect its interest therein pending any leasing or sale of such project in accordance with this part and, further, no institution for higher education, as defined in s. 243.20(8), which offers the baccalaureate or a higher degree shall be prevented from leasing or operating any dormitory or other housing facility or a dining facility for its own benefit to provide lodging or meals to students in furtherance of a lawful public purpose. A project acquired or constructed by a local agency, unless sold or contracted to be sold, shall be leased to one or more persons, firms, or private corporations for operation and maintenance in such a manner as will effectuate the purposes of this part, under an agreement of lease in form and substance not inconsistent herewith. Any such agreement of lease may provide, among other provisions, that:

(a) The lessee shall at its own expense operate, repair, and maintain the project or projects leased thereunder.

(b) The rent payable under the lease will in the aggregate be not less than an amount sufficient to pay all of the interest, principal, and redemption premiums, if any, on the bonds that will be issued by the local agency to pay the cost of the project or projects leased thereunder.

(c) The lessee shall pay all other costs incurred by the local agency in connection with the financing, construction, and administration of the project or projects leased, except as may be paid out of the proceeds of bonds or otherwise, including, but without being limited to, insurance costs, the cost of administering the bond resolution authorizing the bonds and any trust agreement securing the bonds, and the fees and expenses of trustees, paying agents, attorneys, consultants, and others.

(d) The term of the lease will terminate not earlier than the date on which all such bonds and all other obligations incurred by the local agency in connection with the project or projects leased thereunder are paid in full, including interest, principal, and redemption premiums, if any, or on which adequate funds for such payment are deposited in trust.

(e) The lessee’s obligation to pay rent shall not be subject to cancellation, termination, or abatement by the lessee until such payment of the bonds, or provision for such payment, is made.

(2) Such agreement of lease may contain such additional provisions as in the determination of the local agency are necessary or convenient to effectuate the purposes of this part, including provisions for extensions of the term and renewals of the lease and vesting in the lessee an option to purchase the project leased thereunder pursuant to such terms and conditions consistent with this part as are prescribed in the lease; provided that, except as may otherwise be expressly stated in the agreement of lease to provide for any contingencies involving the damaging, destruction, or condemnation of the project leased or any substantial portion thereof, such option to purchase may not be exercised unless all bonds issued for such project, including all principal, interest, and redemption premiums, if any, and all other obligations incurred by the local agency in connection with such project have been paid in full or sufficient funds have been deposited in trust for such payment; and provided further that the purchase price of such project shall not be less than an amount sufficient to pay in full all of the bonds, including all principal, interest, and redemption premium, if any, issued for the project then outstanding and all other obligations incurred by the local agency in connection with such project.