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HomeMy WebLinkAbout05(L) - Resolution Amending a Lease Agreement with Allina Ambulance for Portions of Fire Station 2 and Authorizing the Mayor and City Manager to Execute ReportCITY OF PRIOR LAKE, MINNESOTA LEASE AGREEMENT THIS LEASE AGREEMENT ("Lease Agreement") is made and entered into this _LtQ_ day of 1 2018, by and between the City of Prior Lake, a Minnesota municipal corporation whose address is 4646 Dakota Street S.E., Prior Lake, MN 55372 ("City"), and Allina Health Systems, a Minnesota non-profit corporation whose address is 2925 Chicago Avenue, Minneapolis, MN 55407-1321 ("Allina"). In consideration of the mutual covenants and promises set forth in this Lease Agreement, the sufficiency of which are not disputed, the City and Allina do hereby agree as follows: DESCRIPTION OF THE LEASED PREMISES. City does hereby lease to Allina and Allina does hereby lease and take from City, portions of the property known as Prior Lake Fire Station No. 2 and located at Lot 1, Block 3, Jeffers Pond 31d Addition, Prior Lake, Minnesota ("Property"), described as follows and collectively referred to as the "Leased Premises": 1.1 Half of a bay (approximately 22' X 44'); 1.2 One office (approximately 120-150 square feet); and 1.3 Common areas on the Property provided the use does not negatively impact the City's use of the Property. TERM. Subject to termination as set forth in this Lease Agreement, the initial term of this Lease Agreement shall be for a term of five (5) years commencing on the 1st day of April, 2018 and terminating on the 31st day of March, 2023 ("Initial Term"). Provided that Allina is not in default under the terms and conditions of this Lease Agreement, the Initial Term may be renewed by mutual written agreement of both parties for an additional five (5) year term ("Extended Term"). The Initial Term and Extended Term are collectively referred to as the "Term 3. USE OF LEASED PREMISES. The Leased Premises shall be used and occupied by Allina solely for staging the delivery of ambulance service within Scott County, Minnesota and for no other purpose, and such use and occupancy shall comply with all applicable federal, state and local laws, statutes, ordinances and governmental rules and regulations. RENT AND SECURITY DEPOSIT, Allina shall pay monthly rent in the amount of One Thousand Four Hundred Thirty -Six and 461100 Dollars ($1,436.46) for the Leased Premises for the calendar year 2018 For the year 2019 and thereafter, the rent shall increase each year by the percentage increase in the January to January, Minneapolis -St. Paul Consumer Price Index as reported by the US Department of Labor Bureau of Labor Statistics for the preceding year. Rent payments shall be made monthly by the 10th day of the given month in which payment is due. A late fee of $25.00 per day shall be assessed for payments received after the 10th day of the month. All rent payments required hereunder shall be paid to the City at 4646 Dakota Street S.E., Prior Lake, MN 55372, Attn: Accounts Receivable, or such other place as determined by the City. Allina shall not be required to pay a security deposit. UTILITIES. The costs for real estate taxes, electric utilities, gas utilities, sewer and water, refuse disposal, general mechanical repair and maintenance not caused by the negligence of Allina, and cleaning services shall be included as part of the rent payment for the Leased Premises. Allina shall be responsible for the payment of telephone, cable and/or internet services beyond the basic service installed at the Property and supplies necessary for Allina's use of the Leased Premises. Page 1 of 9 INSURANCE. 61 Allina shall maintain in full force and effect during the Term, a policy of commercial general liability insurance, in a form acceptable to the City Attorney, protecting Allina from claims for damages for bodily injury, including death, and from claims for property damage. The minimum limits of liability of such insurance shall be $1,000,000 per occurrence and $2,000,000 aggregate. Allina shall be responsible for the payment of all premiums, deductibles, and self -insured retentions, The City shall be named as an additional insured on the commercial general liability policy. The commercial general liability policy shall contain a provision that the policy shall not be cancelled without at least thirty (30) days' advanced written notice to the City, or ten (10) days' written notice for non- payment of premium. Allina shall provide City with a Certificate of Insurance which conforms to the provisions herein, before Allina may operate at the Leased Premises, 6.2 The City shall carry and cause to be in full force and effect a fire and extended coverage insurance policy on the Property, but not the contents owned, leased to, or otherwise in possession of Allina. Said fire and extended coverage insurance policy on the Property covers, without any rating surcharge, a wide range of uses. In the event, however, Allina changes the use of the Leased Premises or contents kept in the Leased Premises, refuses to follow directions from the Fire Inspection Bureau, or fails to maintain general housekeeping any of which cause the City's fire and extended coverage insurance premiums for the Property to increase, then Allina agrees to pay to City any increase in City's premium. 6.3 Allina and City hereby waive any rights each may have against the other on account of any loss or damage occasioned to Allina or City, as the case may be, or their respective property, to the extent such loss or damage is covered by insurance required to be maintained by either Allina or City, under this Lease Agreement. ADDITIONAL INSURANCE. In addition to the insurance requirements set forth above, Allina shall be responsible for any and all insurance which Allina desires to insure its own property which is located and situated on and within the Leased Premises. City shall not be liable to Allina for any loss or damage of any kind whatsoever caused or sustained by reason of failure of any mechanical system within the Property, including but not limited to, the heating or ventilating or air conditioning system servicing the Leased Premises or because of inability to obtain energy or utilities for any reason beyond City's control. 8. INDEMNITY. 8.1 Allina shall indemnify, defend, and hold the City, its Council, agents, employees, attorneys and representatives harmless against and in respect of any and all claims, demands, actions, suits, proceedings, liens, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and attorneys' tees, that the City incurs or suffers, which arise out of, result from or relate to any breach or default on the part of Allina in the performance of any covenant or agreement on the part of Allina to be performed pursuant to the terms of this Lease Agreement or occasioned wholly or in part by any negligent act or omission of Allina, its agents, employees, attorneys and representatives, 8.2 City shall indemnify, defend, and hold Allina, its agents, employees, attorneys and representatives harmless against and in respect of any and all claims, demands, actions, suits, proceedings, liens, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and attorneys' fees, that Allina incurs or suffers, which arise out of, result from or relate to any breach or default on the part of the City in the performance of any covenant or agreement on the part of the City to be performed pursuant to the terms of this Lease Agreement Page 2 of 9 or occasioned wholly or in part by any negligent act or omission of the, its agents, employees, attorneys and representatives. 8.3 No Third -Party Recourse. The City and Allina agree that third parties shall have no recourse against the City or Allina under this Lease Agreement. In all such matters, including court actions, the City and Allina agrees that the indemnification and hold harmless provisions set out in Paragraph 8.1 and 8.2 shall apply to said actions. QUIET ENJOYMENT. Allina, upon payment of the rent herein reserved and upon performance of all of the terms, covenants and conditions of this Lease Agreement by it to be kept and performed, shall at all times during the Term, peaceably and quietly enjoy the Leased Premises without any disturbance from City except that Allina understands and agrees the use of the Leased Premises for the public purpose for which it was constructed shall not constitute a breach of quiet peace and enjoyment of Leased Premises. Upon expiration of the Term or earlier termination of the Lease Agreement, Allina shall surrender the Leased Premises in good condition and repair, except for reasonable wear and tear. 10. MAINTENANCE. 10.1 Allina will keep the Leased Premises in as good a condition as when turned over to Allina, reasonable wear and tear excepted. Allina agrees to keep the Leased Premises in a clean, orderly and sanitary condition and will neither do, nor permit to be done therein, anything which is in violation of insurance policies on the Property or that is contrary to any state or local law, ordinance or regulation thereof. Allina will neither commit nor suffer waste to the Leased Premises. 10.2 City shall, at its own expense, keep in good repair the Leased Premises, including but not limited to, ceilings, windows, floors, all interior walls and all door and electrical fixtures as well as the structural parts of the Property (including, but not limited to, roof, exterior walls, foundation, exterior lighting, HVAC, electrical system and plumbing and fixtures) in which the Leased Premises are located, except where repairs to the Leased Premise and/or Property are required due to the fault or negligence of Allina, its employees or invitees, in which case Allina shall be responsible for reimbursing the City for the costs of such repairs. 11. APPEARANCE AND ACCESS. To the extent obligated herein, City and Allina mutually agree to keep the Property and Leased Premises in a condition of good repair and appearance as their respective responsibilities and rights require. Allina agrees to keep its trash containers, refuse and waste within the Leased Premises and agrees not to litter any of the grounds or entries of the Property. 12. ALTERATIONS. Allina shall not make any alterations to the Leased Premises without the prior written consent of the City, If Allina shall desire to make any such alterations, an accurate description shall first be submitted to and approved by the City. Approval shall not be unreasonably withheld. Any such alterations shall be done by Allina at its own expense. Allina agrees that all such work shall be done in a good, workmanship -like manner, and in conformance with applicable building codes, that the structural integrity of the Property shall not be impaired, and that no liens shall attach to the Property by reason thereof. Allina shall and will in each instance save the City and the Property forever harmless and free of all costs, damages, losses and liabilities of every kind and character which may be claimed, asserted or charged and will preserve and hold the City and the Property forever free and clear from liens for labor and material furnished, Any such alterations shall become the property of the City as soon as they are affixed to the Leased Premises and all right, title and interest therein of Allina shall immediately cease unless otherwise stated in writing. Allina however, shall remain the owner of any installed trade fixture and shall have the right to remove such trade fixture at the expiration or termination of this Lease Agreement, so long as the Leased Page 3 of 9 Premises is restored to its original condition. Any alterations to Leased Premises shall be restored to their original condition at the termination or expiration of this Lease Agreement. 13. MECHANIC'S LIED. In the event any mechanic's lien shall at any time be filed against the Property or any part of the Property by reason of work, labor, services or materials performed or furnished to Allina or to anyone holding the Leased Premises through or under Allina, Allina shall immediately cause the same to be discharged of record, provided however, that Allina shall be entitled to contest such lien in good faith by appropriate proceedings upon furnishing such security as may reasonably be required by City, but in no event more than 150% of the contested amount. If Allina shall fail to cause such lien to be discharged within thirty (30) days after being notified of the filing thereof, then, in addition to any other right or remedy of City, City may, but shall not be obligated to, discharge the same by paying the amount claimed to be due, or by bonding, and the amount so paid by City and all costs and expenses, including reasonable attorneys' fees incurred by City in procuring the discharge of such lien, shall be due and payable in full by Allina to City on demand. 14. ASSIGNMENT. Allina shall not have the right to assign its interest in this Lease Agreement or to sublet the Leased Premises, or any part thereof, except with City's written consent. Any approved assignment or sublet shall be subject at all times to the provisions of this Lease Agreement, provided, however, in such an instance, Allina shall at all times remain obligated hereunder, the same as though no assignment or sublease had occurred. Allina agrees that it will not permit any assignment hereof by operation of law without the consent in writing of City. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the said assignee without the written consent of the City. 15, ENTRY. During the ninety (90) days prior to the expiration of the Term or upon written notice, the City or its agents may exhibit the Leased Premises to prospective lessees and/or purchasers. 16. NOTICES. All notices, consents, demands and requests which may be or are required to be given by either party to the other, shall be in writing and sent by United States registered or certified mail, with return receipt requested, addressed to: Allina: Mary P. Foarde Vice Pres & General Counsel Allina Health Systems Law Department 10905 2925 Chicago Avenue Minneapolis, MN 55407-1321 City Frank Boyles, City Manager City of Prior Lake 4646 Dakota Street Southeast Prior Lake, MN 55372 With a copy to: Allina Health Systems Attn: Margaret Caviness Real Estate Department 10909 2925 Chicago Avenue Minneapolis, MN 55407-1321 With a copy to: Sarah Schwarzhoff Hoff Barry, PA 775 Prairie Center Drive, Suite 160 Eden Prairie, MN 55344 The date which said registered or certified mail is delivered shall be conclusively deemed to be the date on which a notice, consent, demand or request is given or made. The above address of a party may be changed at any time, or from time to time, by written notice given by said party to the other party in the manner herein above provided. Page 4 of 9 17. DEFAULT. The following shall constitute a default of this Lease Agreement: 17.1 Failure to make prompt payment of fees and other amounts due; 17.2 Failure to observe or perform any term, covenant, condition or provision contained in this Lease Agreement; 17.3 The adjudication of Allina as bankrupt by a court of competent jurisdiction, or the entry by such a court of an order approving a petition seeking reorganization of Allina under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof, or the appointment by such a court of a trustee or receiver or receivers of Allina or of all or any substantial part of its property upon the application of any creditor in any insolvency or bankruptcy proceeding or other creditors suit in each case, the order or decree remains unstayed and in effect for ninety (90) days; 17.4 The filing by Allina of a petition in voluntary bankruptcy or the making by it of a general assignment for the benefit of creditors or the consenting by it to the appointment of a receiver or receivers of all or any substantial part of the property of Allina; or the filing by Allina of a petition or answer seeking reorganization under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof; or the filing by Allina of a petition to take advantage of any debtors act; or 17,5 Assignment of Allina's leasehold interest by process of law, 18. NOTICE AND CURE, If either party shall default hereunder and such default shall continue for a period of thirty (30) days after written notice from the non -defaulting party of such default, the non -defaulting party may exercise any of the remedies provided for herein; provided that if the default is of such a nature that it may require more than thirty (30) days to cure, the period to cure may be extended with the written permission of the non -defaulting party. Said time to cure default may be extended for such period of time as specified by the non -defaulting party's written notice to the other party. 19. REMEDIES. Upon a party's default and failure to cure as provided in this Lease Agreement, the non - defaulting party may exercise any of the following remedies. The exercise of one or more of the following remedies shall not be deemed an election or waiver of the right to exercise any other remedy. 19.1 Either party may terminate the Lease Agreement. If the City terminates this Lease Agreement, City may reenter and take full and absolute possession of the Leased Premise as the owner thereof, and free from any right or claim of Allina, or any person or persons claiming through or under Allina; and such election and reentry shall be and constitute an absolute bar to any right to enter by Allina upon the payment of all arrearages of rent and costs after a dispossession under any suit or process for breach of any of the covenants of this Lease Agreement, 19.2 The City may, without terminating the Lease Agreement, enter into and upon the Leased Premises, or any part thereof, and take possession of the same fully and absolutely, without such reentry working a forfeiture of the rents to be paid and the covenants to be performed by Allina for the full Term, and may at the City's election lease or sublet the Leased Premises, or any part thereof, on such terms and conditions and for such rents and for such time as the City may elect, and after crediting the rent actually collected by the City from such reletting on the rents stipulated to be paid under this Lease Agreement by Allina from time to time, collect from Allina any balance remaining due from time to time on the rent reserved under this Lease Agreement, charging to Allina such reasonable expenses as City may expend in putting the Leased Premises in tenantable condition. Wage 5 of 9 19.3 Either party may obtain an order for specific performance, to recover damages and/or obtain any other remedy available at law or in equity. 20. EARLY TERMINATION OF LEASE AGREEMENT. Notwithstanding anything herein to the contrary, either City or Allina may terminate this Lease Agreement at any time, by giving the other party written notice six (6) months prior to the intended early termination date. At the termination date as specified by notice given in accordance with this paragraph, this Lease Agreement shall terminate, and Allina shall surrender the Leased Premises as required herein. 21. SURRENDER OF LEASED PREMISES. Upon termination or expiration of this Lease Agreement, Allina shall deliver up the Leased Premises to the City in as good a condition as said Leased Premises was in as of the date of tender of possession subject to ordinary wear, tear and decay, Allina agreeing not to leave the Leased Premises in an irregular or unkempt manner. Allina agrees to remove all equipment and personal property from the Leased Premises prior to termination or expiration of this Lease Agreement. 22. HOLDING OVER. If Allina shall hold over the Leased Premises or any part thereof after the expiration of the Term or the earlier termination of this Lease Agreement, such holding over shall be construed only to be a tenancy from month to month subject to all of the covenants, conditions and obligations hereof except that the rent shall increase by five percent (5%) of the then existing rent amount due. Nothing herein shall be construed to give Allina any rights to hold over or to continue in possession of the Leased Premises, 23. FIRE REPAIR. In the event of damage to the Leased Premises by fire, the elements or other casualty of whatever kind or nature, the City shall repair the damage with reasonable dispatch. If the damage renders the Leased Premises untenantable in whole or in such part that it is impractical to conduct business therein, the rent shall wholly abate until the damage has been repaired. If the damage renders the Leased Premises untenantable in part but Allina continues to occupy them in part, the rent shall be reduced in the proportion that the unoccupied portion of the Leased Premises bears to the occupied portion of the Leased Premises, until the damage has been repaired. The City shall not be responsible for any loss of Allina's fixtures, property or for any lost profit. If the damage is not repaired by City within a reasonable time, or in any event, within one hundred twenty (120) days of the damage, Allina shall thereupon have the right to terminate the Lease Agreement by giving the City written notice of such termination, 24. CONDEMNATION. The parties hereto agree that if the Leased Premises, or any part thereof, shall be taken or appropriated for any public use by any public or quasi -public authority during the Term, that this Lease Agreement shall terminate as of the date of such appropriation and all condemnation proceeds shall be the sole property of the City. It is further agreed that if this Lease Agreement is terminated because of any such taking of the Leased Premises, that the monthly rent for the month in which the condemnation taking occurs shall be prorated between the parties hereto. 25. CLAIMS. Allina and the City will make no claim against the other party for any loss of or damage to Property and/or the Leased Premises caused by theft, burglary, water, gas, electricity or other means, any of which were beyond the parties control. 26. NONDISCRIMINATION. In connection with the execution of this Lease Agreement, Allina agrees that it and any of its subcontractors„ material suppliers and vendors shall not discriminate against any employee or applicant for employment because of race, creed, age, sex, religion, national origin, affectional preference or any other characteristic protected by local, state or federal statutes, regulation or ordinance. Allina will take affirmative actions to ensure that applicants are employed, and that employees are treated during employment without regard to race, color, sex, national origin, affectional preference or any other characteristic protected by local, state or federal statutes, regulation or ordinance. Such actions shall Page 6 of 9 include, but not be limited to, the following: employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selections for training, including apprenticeship. 27, CERTIFICATE OF COMPLIANCE FOR PUBLIC CONTRACT, If Allina has employed more than twenty (20) full-time employees in Minnesota at any time during the previous twelve (12) months, it shall have an affirmative action plan for the employment of minority person, women and the disabled that has been approved by the Commissioner of Human Rights. Allina shall submit receipt of a Certificate of Compliance issued by the Commissioner signifying that Allina has an approved Affirmation Action Plan by the State Human Rights Department, 28. COMPLIANCE WITH STATE AND FEDERAL LAWS. Allina, in connection with the execution of this Lease Agreement, assumes compliance with the statements and conditions of the Equal Employment Opportunity Act. Allina's use and occupancy of the Leased Premises shall comply with all applicable federal, state and local laws, statutes, ordinances and governmental rules and regulations. 29. RULES AND REGULATIONS. Allina shall perform, observe and comply with all Building codes, rules and policies of the City with respect to the safety, care and cleanliness of the Leased Premises, and the preservation of good order thereon, and, upon written notice thereof to Allina, Allina shall perform, observe and comply with any changes, amendments or additions thereof as from time to time shall be established and deemed advisable by the City. Said rules and policies shall be in writing. 30. ATTORNEYS' FEES. COSTS AND EXPENSES. Any party to this Lease Agreement which prevails in any proceedings, whether judicial, administrative or otherwise, commenced to enforce any rights, obligations, and/or responsibilities under the covenants, terms and conditions of whatever kind or description, of this Lease Agreement, shall be entitled to recover from the other party, or parties hereto, all costs and expenses, including reasonable attorneys' fees, incurred by reason of such proceedings having been commenced and resolved in whatever fashion in favor of the party claiming such reimbursement hereunder. 31. COUNTERPARTS AND SIGNATORIES. This document may be signed in one or more counterparts which, when taken together, shall be one and the same agreement. The persons signing this Lease Agreement have been duly authorized by their respective entities to enter into this Lease Agreement. 32. HEADINGS, The headings herein are inserted only for convenience and reference and shall in no way define, limit or describe the intent of this Lease Agreement, 33. GOVERNING LAW 1 JURISDICTION, This Lease Agreement shall be governed by the laws of the State of Minnesota and such laws shall govern all questions and interpretations concerning the validity and construction of this Lease Agreement and the legal relations among the parties and performance under it. 34. ENTIRE AGREEMENT. This Lease Agreement contains all of the agreements made between the parties and supersedes all prior negotiations, representations or agreements, either written or oral. This Lease Agreement may not be modified orally or in any manner other than by agreement, in writing, signed by all parties to this Lease Agreement. The following Exhibits listed below are made part of this Lease Agreement as if fully set forth herein: Exhibit A Diagram of Leased Premises. 35. SEVERABILITY. If any provision of this Lease Agreement is held invalid, illegal or unenforceable by a Court of competent jurisdiction, the remaining provisions will not be affected. 36. WAIVER. One or more waivers of any covenant, term or condition of this Lease Agreement by the City shall not be construed by Allina as a waiver of a subsequent breach of same covenant, term or condition. Page 7 of 9 The failure or delay on the part of the City to enforce or exercise at any time any of the provisions, rights or remedies of this Lease Agreement shall in no way be construed to be a waiver thereof nor in any way effect the validity of this Lease Agreement or any part thereof or the right of the City to thereafter enforce each and every such provision, right or remedy. 37. BINDING EFFECT. This Lease Agreement and the covenants and conditions herein contained, shall inure to the benefit of and be binding upon the City, its successors and assigns, shall be binding upon Allina, its heirs, successors and assigns, and shall inure to the benefit of Allina and only such assigns of Allina to whom the assignment by Allina has been consented to by City. IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed the day and year first above written. ram Allina: Allina Health Systems R%?h&,Y&aGllTltJ0�1 Richard ^dagnuson (Apr , 2018) By: Richard Magnuson Its: CFO Page 8 of 9 Exhibit A Depiction of Leased Premises Page 9 of 9