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HomeMy WebLinkAboutE2 Lease Hinesley Family LP co. Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Debbie Arkell, Director of Public Services Chris Kukulski, City Manager SUBJECT: Lease Agreement with Hinesley Family Limited Partnership No. 1 For Lot 2, Block 19, Laurel Glen Subdivision Phase 2 MEETING DATE: August 28, 2006 —Consent Agenda BACKGROUND: A term of Annexation placed on the Laurel Glen Annexation required the landowner to dedicate to the City a lot identified during annexation that would have a sewer lift station installed on it, prior to the filing of Phase 2 of a major subdivision of the land. The sewer lift station and lift station building were constructed on the subject parcel, and the sewer lift station is in operation. In January 2004, the landowner expressed an interest in constructing a metal building for their company's use during construction of condominiums within the annexed property, and then donating the building and lot improvements to the city at the time the lot ownership transferred to the city. The landowner noted they would need to use the building for approximately five years after it was constructed. This building will be beneficial to several public service divisions, as they will be able to store equipment at this site and use it as a satellite site for various operations, thus saving considerable time traveling to and from the Shops Complex when doing regular maintenance work on the west side of town (sewer flushing, hydrant flowing, parks maintenance, snow plowing/sanding, etc.) In April 2004, 1 confirmed in writing to the landowner that if he constructed the building on the lot, we would allow him to use the building through a zero rent lease agreement for a maximum of five years after the city attained ownership of the lot, or until the time the company completed their condominium development. Hinesely Family Limited Partnership No. 1 has constructed a 50' x 70' metal building and site improvements on the subject lot, and has been using the property for their construction purposes. The building and use do not conflict with the City's operation and maintenance of the sewer lift station. Commission Memorandum Lot 2, Block 19, Laurel Glen Ph. 2 Lease Agreement August 28, 2006 Consent Agenda Page 2 A Lease Agreement has been reviewed and approved by the City Attorney's office and has been signed by Hinesley Family Limited Partnership No. 1. The lease will begin on the day the property is deeded to the city, which will be the same day the final plat of Laurel Glen Subdivision Phase 2 is filed, and will terminate five years thereafter. The term of the lease may be extended through a written lease extension signed by both parties. The final plat should be on the Commission's agenda within the next month or so. RECOMMENDATION: Authorize the City Manager to sign the Lease Agreement with Hinesley Family Limited Partnership No. 1 for the lease of the utility building and associated site improvements on Lot 2, Block 1.9, Laurel Glen Subdivision, Phase 2, with the lease being effective on the day the lot ownership is transferred to the City of Bozeman. FISCAL EFFECTS: This Lease Agreement will have no fiscal effects on the City. The lessee is required to maintain and keep the building and common areas in good repair, is responsible for all utility charges, and all real estate taxes and special assessments levied on the property, as well as personal property taxes. The tenant must keep the building insured against hazards and casualties, and the City of Bozeman shall be named as an additional insured on the policy. ALTERNATIVES: As suggested by the City Commission. Res ectfully submitte Debra H. Arkell, Director of Public S61rvices Chris A. Kukulski, City Manager Attachments: Lease Agreement Report compiled on August 17, 2006 Cc: Hinesley Family Limited Partnership No. 1 Dave Skelton, Senior Planner James Goehrung, Facilities Superintendent John Alston, Water/Sewer Operations Superintendent LEASE AGREEMENT THIS LEASE AGREEMENT made and entered into this day of 2006, by and between City of Bozeman, Montana (hereinafter referred to as the "Landlord"), whose address is P. O. Box 1230, Bozeman, MT 59771-1230 and Hinesley Family Limited Partnership No. 1 (hereinafter referred to as the "Tenant") whose address is 3663 Durston Road, Bozeman, Montana 59718. WITNESSETH THAT: 1. PREMISES AND TERM. Landlord, in consideration of the rents herein reserved and of the agreements and conditions herein contained, on the part of Tenant to be kept and performed, leases unto Tenant and Tenant hereby rents and leases from Landlord, according to the terms and provisions herein, that certain utility building and lot described in the attached Exhibit A, and all rights, easements and appurtenances thereto belonging, for a term of five (5) years, commencing at midnight of the day previous to the first day of the lease term, which shall be on , 2006, and ending at midnight on the last day of the lease term, which shall be on the , 2011, upon the condition that Tenant pays rent therefore and otherwise pet-forms as in this lease provided. This lease may be extended beyond the above-stated term through a written lease extension signed by both parties. 2. RENTAL. Tenant agrees to pay to Landlord as rental the amount of One Dollar and no/100 ($1.00) per year. 3. POSSESSION. Tenant shall be entitled to possession on the first day of the term of this lease, and shall yield possession to Landlord on the last day of the term of this lease, except as herein otherwise expressly provided. 4. USE OF PREMISES. Tenant covenants and agrees during the term of this lease to use and to occupy the premises for any lawful purposes. Tenant shall make no unlawful use of the premises and agrees to comply with all valid regulations, laws or ordinances of application municipality, the laws of the State of Montana and the Federal government, but this provision shall not be construed as creating any duty by Tenant to members of the general public. 5. QUIET ENJOYMENT, Landlord covenants that its estate in the premises is fee simple; and that Tenant on paying the rent herein reserved and performing all the agreements by 'Tenant to be performed as provided in this lease, shall and may peaceably have, hold and enjoy the premises for the term of this lease from molestation, eviction or disturbance by Landlord or other persons or legal entity whatsoever. 6. CONDITIONS OF PREMISES. Tenant shall take the premises in "as is" condition. Lease Agreement, City of Bozeman/Hinesley Family Partnership No. 1 1 7. TENANT'S DUTY OF CARE AND MAINTENANCE. Tenant shall keep the structural part of the floor, walls, roof, other structural parts of the building and common areas in good repair. S. UTILITIES AND SERVICES. Tenant, during the term of this lease, shall pay, before delinquency, all charges for use of telephone, power, water, sewer and trash. 9. SURRENDER OF PREMISES. Tenant agrees that upon the termination of this lease, it shall surrender, yield up and deliver the premises in good and clean condition, except the effects of ordinary wear and tear and depreciation arising from lapse of time, or damage without fault or liability of Tenant. 10. REMOVAL OF FIXTURES. Tenant may, at the expiration of the term of this lease, or renewal or renewals thereof or at a reasonable time thereafter, if Tenant is not in default hereunder, remove any futures or equipment which the Tenant has purchased or installed in the premises, but will repair any damage as a result of removing any fixtures. 11. ASSIGNMENT AND SUBLETTING. Tenant may assign or sublet the premises with permission of Landlord, which permission shall not reasonably be denied. 12. REAL ESTATE TAXES. All real estate taxes and special assessments levied by lawful authority (but reasonably preserving landlord's rights of appeal) against the real property shall be timely paid by Tenant. 13. PERSONAL PROPERTY TAXES. Tenant agrees to timely pay all taxes, assessments, or other public charges levied or assessed by lawful authority (but reasonably preserving Tenant's rights of appeal) against its personal property on the premises during the term of this lease. 14. PROPERTY INSURANCE. Tenant shall keep the building reasonably insured against hazards and casualties; that is, fire and those items usually covered by extended coverage. Tenant shall provide Landlord with a copy of said insurance, and said insurance shall have a minimum 30 day cancellation notice, shall name the City of Bozeman as an additional insured on the policy, Tenant shall keep the improvements and other- property located within the premises insured against hazards and name the City of Bozeman as additional insured. 15. PARTIAL DESTRUCTION OF PREMISES. In the event of a partial destruction or damage of the premises, which is a business interference, that is, which prevents the conducting of a normal business operation and which damage is reasonably repairable within thirty (30) days after its occurrence, this lease shall not terminate but the rent for the premises shall abate during Lease Agreement, City of Bozeman/Hinesley Family Partnership No. 1 2 the time of such business interference. In the event of partial destruction, Tenant shall repair- such damages within thirty (30) days of its occurrence unless prevented from so doing by acts of God, the elements, the public enemy, strikes, riots, insurrection, government regulations, city ordinances, labor, material or transportation shortages, or other causes beyond Tenant's reasonable control. 16. NOTICES AND DEMANDS. Notices as provided for in this lease shall be given to the respective parties hereto at the respective addresses designated on page on e of this lease unless either party notifies the other, in writing, of a different address. Without prejudice to any other method of notifying a party in writing or making a demand or other communication, such message shall be considered given under the terms of this lease when sent, addressed as above designated, postage prepaid, by registered or certified mail, return receipt requested, by the United States mail and so deposited in a United States mail box. 17. SUCCESSORS AND ASSIGNS. Each and every covenant and agreement herein contained shall extend to and be binding upon the respective successors, heirs, administrators, executors and assigns of the parties hereto; except that if any part of this lease is held in joint tenancy, the successor in interest shall be the surviving joint tenant. 18. FORCE MAJEURE. In the event that either party hereto shall be delayed or hindered or prevented from the performance of any act required hereunder by reason of acts of God, catastrophic weather, riots, insurrection, war, any governmental ruling or injunction beyond the control of Landlord or Tenant, or other reason of a like nature not the fault of the party delayed (all of such reasons or causes referred to in this lease as "force majeure"), then performance of such acts shall be excused for the period of the delay and the period of the performance of any such act shall be extended for a period equivalent to the period of such delay. 19. CHANGES TO BE IN WRITING. None of the covenants, provisions, terms or conditions of this lease to be kept or performed by Landlord or Tenant shall be in any manner modified, waived or abandoned, except by a written instrument duly signed by the parties and delivered to landlord and Tenant. This lease contains the entire agreement of the parties. IN WITNESS WHEREOF, the parties hereto have duly executed this lease in duplicate the day and year first above written. Lease Agreement, City of Bozeman/Hinesley Family Partnership No. 1 3 LANDLORD CITY OF BOZEMAN APPROVED AS TO FORM: By: Chris Kukulski, City Manages- City Attorney ATTEST: Brit Fontenot, City Clerk TENANT HINESLW FAMILYLLIMED ZNERSHIP NO. 1 q 'd By: Cd , ' cit- Charles W. Hinesely, Sr. Lease Agreement, City of Bozeman/Hinesley Family Partnership No. 1 4 �ELI 0-VI r— , i o °p I I J/ 0 n � / : ca 4 (P 51LL fir m � Cl � r�► I I I '� � 1 o r W IL ` C splLL 1 r- 8" pul ti. WI- f' 1 1 0 52 Il ` cn •r 5pILL`CURB 4 y. CL OR I ao co I I ci J 1 o x I I .. o Lu 1 o In I I Q co IN � ;` I II ¢ z I W Q zi {a rn cV 1 o I r., III , 0 I I � —' III < III x , x ---1 'T S 'to Lo Lf7 I I iN- 1 UN� I p G�CID I i �CD � Ii �, j FUTURE ULVERT ttini EXTE SION `n ``,._-..� !! II BL cn I a_LUS2 D (�7ZI p