The department may enter into a lease for a period not to exceed 25 years with the village of Mackinaw City, whereby the village agrees to operate and maintain the parking facilities located on the property described in section 78301 as the Mackinaw City dock, to construct, operate, and maintain buildings on the Mackinaw City dock, or to perform other functions in relation to the Mackinaw City dock, under such terms and conditions as may be agreed upon by the department and the village of Mackinaw City.