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HomeMy WebLinkAbout7C - Dwane and Merlin Arndt Lease Agreement AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: ALTERNATIVES: STAFF AGENDA REPORT 7C RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF LEASE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND DW ANE AND MERLIN ARNDT FOR THE RENTAL OF A MUNICIPAL PARKING LOT OCTOBER 20, 1997 The City of Prior Lake has leased a municipal parking lot located on Colorado Street for approximately the past five years. Actual payment for the parking lot is provided through a contribution from the VFW. The Council was advised through the Weekly Update several weeks ago that 1. The City's method for leasing the lot is not contrary to law or state regulation and 2. That rather than using annual leases the staff proposed to enter into a three year lease agreement for the municipal parking lot. Since we did not receive any feedback to the contrary we have negotiated a three year lease agreement subject to City Council approval. The city utilizes this parking lot as a base of operations for many of its recreation program trips. As such, it does receive usage by the general public and is therefore, of benefit to the community at large. The lease was negotiated some years ago and has been renewed annually since then. The cost of the lease last year was $3,200 and this year is proposed to be the same at $3,200. The VFW pays the full lease amount. Annually the owner must advise the city of the lease amount for the coming year at least 30 days prior to the end of the contract. The city then has 30 days to determine if it wishes to cancel the lease agreement. The lease is attached for council information. Council has the following alternatives: 1. Authorize the Mayor and City Manager to execute the lease as proposed. 2. Revise the lease and authorize its execution. 3. Discontinue the lease relationship. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER H:\AGENDA \A9711.DOC RECOMMENDATION: Alternative 1. The City Attorney has reviewed and recommended modifications to the lease which have been incorporated. therein. Since the cost of the lease is borne by the VFW and it does provide a public purpose and benefit, Staff would recommend approval. ACTION REQUIRED: Adopt a motion and a second to authorize the Mayor and City Manager to execute the municipal parking lot lease for a period of three years as part of the Consent Agenda. ,.1 1J Approved by: Attachments / .. ~,,/ \~- LEASE AGREEMENT THIS AGREEMENT, made and entered into this 1st day of May, 1997, by and between Dwane Arndt and Merlin Arndt, (hereinafter collectively referred to as "Landlord") and the City of Prior Lake, a municipal corporation organized and existing under the laws of the state of Minnesota (hereinafter referred to as "Tenant"). RECITALS ~hereas, Landlord presently owns certain property (hereinafter "Property") located in the City of Prior Lake, County of scott, Minnesota legally described as Lots 6, 7, 8, and 9, Block 15, Town of Prior Lake. Whereas, it is the intention and desire of the Landlord and Tenant to enter into a Lease Agreement whereby Tenant will lease said property from Landlord upon the terms and conditions set forth in this Agreement. IT IS MUTUALLY AGREED: 1. Recitals. The foregoing Recitals are made a part of this Agreement. 2. Leased Premises. Landlord hereby leases to Tenant and Tenant rents of and from Landlord the Property, subject to the terms and conditions of this Lease. 3. Term. The term of this Lease shall be for a period of thirty-six (36) months, effective as of the 1st day of May, 1997 and terminating on the 30th day of April, 2000, both dates inclusive. Provided however, that this Lease may be terminated by either party by providing thirty (30) days written notice to the other party. 4. Rent. Tenant shall pay to Landlord, payable at the address designated in this Lease for service of notice upon Landlord, or at such other place as Landlord may designate in writing to Tenant, as rent, exclusive of any other charge provided for to be paid by Tenant in this Lease. a. For the lease year, the sum of $3,200.00 per annum, payable on or before May 1 of that year. Landlords may, at their option, increase the rent on each May 1, beginning May 1, 1998 by an amount equal to any increase in real estate taxes not including any assessments of any nature, against the property over and above the amounts due and payable in 1997. Notwithstanding the foregoing sentence, in no event shall any increase exceed fifteen (15%) percent of the previous years rent. Landlords shall notify tenants in writing of any increase not less than thirty (30) days prior to May 1st of the year of the increase. b. If the commencement date of the term or the termination date of the Lease falls on a date other than the first day of a month, Tenant shall pay to Landlord on said date rental for the number of days remaining in the calendar month, including said first date computed at a daily rate of one-thirtieth (1/30) of the monthly rental hereinafter specified. "Lease year" shall mean the twelve (12) month period beginning on the first day of the term and each succeeding and consecutive twelve (12) month period thereafter. 5. Environmental Matters. Landlord represents and warrants that he/it has no knowledge of the presence or the release of any hazardous materials as defined under the state and Federal Environmental Protection Laws nor has Landlord received any notice of any such violations from any entity, including the Minnesota Pollution Control Agency and the Federal Environmental Protection Agency. 6. Use of Premises. Tenant shall use the leased premlses as a municipal parking lot during the term of the Lease. 7. Real Estate Taxes and Assessments. Landlord shall pay all real estate taxes and all installments of special assessments, and any taxes in lieu thereof, which may be levied upon or assessed against the Property during the term of this Lease. 8. Care of Leased Premises: Maintenance and Repairs. Tenant shall maintain the Lease Premises in a clean and sanitary condition as its intended use as a private parking lot and shall be responsible to return the premises to Landlord at the conclusion of this Lease in as good condition and repair as existed at the commencement of this Lease. 9. Eminent Domain. If the Leased Premises, or such portion thereof as to render the balance unsuitable for the purposes of Tenant as hereinabove set forth, is taken by condemnation or the right of eminent domain or by private sale in lieu thereof to the potential condemning authority, either party shall be entitled to terminate this Lease upon written notice to the other within thirty (30) days after Tenant has been deprived of possession by such taking or sale. 10. Assignment or Sublease. Tenant may assign or transfer this Lease, or sublease the whole or any part of the Leased Premises, without the pri.or written consent of the Landlord. However, Tenant will remain liable to Landlord for any damage caused to the Leased Premises, or any personal injury or death occurring thereon during the period of this Lease. Provided, further, however, if Tenant provides Landlord evidence that assignee is providing for equal insurance coverage as required of Tenant by this Agreement, then Tenant shall be released from such liability. 11. Liability Insurance. Tenant shall maintain liability insurance on the premises naming Landlords as co- insureds in the amount of $600,000.00 during the term of this Lease and shall hold the landlord harmless from any claims arising out of Tenants use of the Leased Premises. Tenant shall provide Landlord with a copy of the insurance certificate. In no case does Tenant waive the protections and statutary limitations provided by Minnesota Statutes Chapter 466. Landlord shall maintain liability insurance on the Leased Premises in an amount not less than $600,000.00 naming Tenant as additional insured. This requirement will be met by the VFW Club naming the city of Prior Lake as a co-insured under its policy which provides $1,000,000 liability coverage. The Landlord and Tenant each hereby releases the other, to the extent of its insurance coverage, from any and all liability for any loss or damage caused by fire or any of the extended coverage casualties or any other casualty insured against, even if such fire or other casualty shall be brought about by the fault or negligence of the other party, or any persons claiming under it. Nothing in this Lease shall be deemed to release either party hereto from liablity for damages resulting from the fault or negligence of said party or its agents, except that in no event does Tenant waive the statutory protections and limitations provided for in Minnesota statutes Chapter 466 or any other state and/or Federal laws limiting governmental liabili ty.. . 12. Relationship of the Parties. Nothing contained in this Lease shall be deemed or constructed by the parties hereto or by a third party to create the relationship of principal and agent or of partnership or of joint venture or of any association whatsoever between Landlord and Tenant. It shall be expressly understood and agreed that neither the method of computation of rent nor any other provisions contained in this Lease nor any act or acts of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of Landlord and Tenant. 13. Notices. All notices and communications of similar legal import from either Landlord or Tenant to the other, shall be in writing and shall be considered to have been duly given or served if sent by first class certified or registered mail, return receipt requested, postage prepaid, to the other party or parties at its address set forth below, or to such other address as such party may hereafter designate by written notice to the other party or parties: If to Landlord: Dwane Arndt 15822 Candy Cove Trail s. E. Prior Lake, Minnesota 55372 Merlin Arndt 603 7th st. N. E. Grand Rapids, MN 55744 If to Tenant: City of Prior Lake 16200 Eagle Creek Ave. Prior Lake, Minnesota 55372 Attention: City Manager 14. Importance of Each Covenant. Each covenant and agreement on the part of one party is understood and agreed to constitute an essential part of the consideration for each covenant and agreement on the part of the other party. 15. Waiver. The receipt of rent by Landlord with knowledge of any breach of this Lease by Tenant or of any default on the part of Tenant in the observance or performance of any of the obligations or covenants of this Lease shall not be deemed to be a waiver of any provision of this Lease. Payment of rent by Tenant with knowledge of any breach of this Lease by Landlord of any default on the part of Landlord in the observance or performance of any of the obligations or covenants of this Lease shall not be deemed to be a waiver of any provisions of this Lease. No failure on the part of any Landlord or Tenant, as the case may be, to enforce any obligations or covenant herein contained, nor any waiver of any right hereunder by Landlord or Tenant, as the case may be, unless in writing, shall discharge or invalidate such obligation or covenant or affect the right of Landlord or Tenant, as the case may be, to enforce the same in the event of any subsequent breach or default. 16. Invalidity. If any part of this Lease or any provision hereof shall be adjudicated by a Court of competent jurisdiction to be void or invalid, then the remaining provisions hereof not specifically so adjudicated to be invalid, shall be executed without reference to the part or portion so adjudicated, insofar as such remaining provisions are capable of execution. 17. Governing Law. This Lease shall be subject to and governed by the laws of the state of Minnesota and all questions concerning the meaning and intention of the terms of this Lease and concerning the validity hereof and questions relating to performance hereunder shall be adjudicated and resolved in accordance with the laws of that state, notwithstanding the fact that one or more of the parties now is or may hereafter become a resident of a different state. 18. Definition of Landlord and Tenant Joint and Several Liability. The word "Landlord" and "Tenant" used herein shall include the plural thereof, and the necessary changes required to make the provisions hereof apply to corporations, partnerships, associations or men or women shall be construed as if made. If two or more parties are referred to collectively under one designation, the liability of each shall be joint and several. 19. Headings. The headings of the paragraphs and subparagraphs of this Lease are for convenience of reference only and do not form a part hereof and shall not be interpreted or construed to modify, limit or amplify such paragraphs and subparagraphs. 20. Parties in Interest. benefit of and be binding upon administrators, successors and Tenant. This Lease shall inure to the the heirs, executors, assigns of Landlord and 21. Counterparts. number of counterparts, an original, but all of same instrument. This Lease may be executed in any each of which shall be deemed to be which shall constitute one and the A~ u.!.-d~ DWANE ARNDT, LANDLORD ~ LANDLORD ~ MERLIN ARNDT, CITY OF PRIOR LAKE By Mayor By . ci ty Manager TENANT