ConAgra Lease & PurchaseMEMORANDUM
September 10, 2002
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT: Finalization of ConAgra, Inc. Lease Agreement and Real Estate Purchase
Agreement
In October 2000, the City Council initially approved a Lease Agreement and Real Estate
Purchase Agreement to accommodate the relocation of the Peavey Company from its
current location on the 4th Street Peninsula to the 12th Street Peninsula land formerly
occupied by Flynn Ready-Mix. The land exchange was possible due to the relocation of
the Flynn operation to their new facility on Kerper Court.
Over the course of the past two years, the City and Peavey have worked together,
along with the Flynn Ready-Mix Company, to accomplish this land exchange. The new
agreements reflect a decision to eliminate the construction of a docking facility in the
Peosta Channel adjacent to the leased property. The previous agreement required the
City to pay $200,000 toward the cost of constructing that facility. The renegotiated
lease removes that obligation of the City.
In return, the proposed annual lease payments would be reduced $20,000 per year over
the 10 year lease period to reflect the savings to the City by not having to pay $200,000
toward the docking facility. The new annual lease payment will by $53,400.
In addition to the previously agreed upon purchase price of $734,000 for the 4th Street
Peninsula property, the City agrees to pay $100,000 to Peavey to assist in relocating
their storage operation to the 12th Street Peninsula site. The original agreement said
"up to $100,000" toward relocation costs, but current cost estimates for the move and
relocation are well over $100,000. Other minor changes to the document reflect new
closing date and new lease term dates.
Economic Development Director Bill Baum recommends that the City execute the Real
Estate Purchase Agreement for the property on the 4th Street Peninsula and set the
lease Agreement for the property on the 12th Street Peninsula for public hearing on
October 7, 2002. These actions will continue the City's efforts to redevelop the Port of
Dubuque area as envisioned in the recently adopted Master Plan, while ensuring the
continued viability of a local industry.
1 concur with the recommendation and respectfully request Mayor and City Council
approval.
___________________
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Mana§er
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
September 9, 2002
TO:Michael Van Milligen, City Manager
FROM:William Baum, Economic Development Director
SUBJECT:Finalization of ConAgra, Inc. Lease Agreement and Real Estate Purchase
Agreement
Introduction
This memorandum presents for City Council review and approval a resolution of intent to
dispose of property on the 12th Street Peninsula to ConAgra, Inc. (Peavey Company) by Lease
Agreement and to approve a Real Estate Purchase Agreement for the sale of land on the 4th
Street Peninsula to the City.
Background
In October, 2000, the City Council initially approved a Lease Agreement and Real Estate
Purchase Agreement to accommodate the relocation of the Peavey Company from its current
location on the 4th Street Peninsula to the 12th Street Peninsula land formerly occupied by Flynn
Ready-Mix. The land exchange was possible due to the relocation of the Flynn operation to their
new facility on Kerper Court.
The City has continued to work with Peavey to finalize the sale and relocation. Several changes
to the original lease and purchase agreement have been made to meet current needs of
Peavey.
Discussion
Over the course of the past two years, the City and Peavey have worked together, along with the
Flynn Ready-Mix Company, to accomplish this land exchange. The new agreements reflect a
decision to eliminate the construction ora docking facility in the Peosta Channel adjacent to the
leased property. The previous agreement required the City to pay $200,000 toward the cost of
constructing that facility. The renegotiated lease removes that obligation of the City.
In return, the proposed annual lease payments would be reduced $20,000 per year over the 10
year lease period to reflect the savings to the City by not having to pay $200,000 toward the
docking facility. The new annual lease payment will by $53,400.
In addition to the previously agreed upon purchase price of $734,000 for the 4th Street Peninsula
property, the City agrees to pay $100,000 to Peavey to assist in relocating their storage
operation to the 12th Street Peninsula site. The original agreement said "up to $100,000" toward
relocation casts, but current cost estimates for the move and relocation are well over $100,000.
Other minor changes to the document refect new closing date and new lease term dates.
Recommendation
I would recommend that the City sign the Real Estate Pumhase Agreement for the property on
the 4th Street Peninsula and set the Lease Agreement for the property on the 12th Street
Peninsula for public hearing on October 7, 2002. These actions will continue the City's efforts to
redevelop the Port of Dubuque area as envisioned in the recently adopted Master Plan while
ensuring the continued viability of a local industry.
Action Step
The action step is to authorize the Mayor to sign the attached Real Estate Purchase Agreement
and to adopt the attached resolution setting a public hearing on the Lease Agreement.
attachments
F:\USERS\Pm~hre\WPDOCS~-OAN DOC\peaveyleasepu rchase.mvm.doc
STATE OF )
NOTARY PLr~LIC
STATE OF )
) ss.
coLrNTy OF )
NOTARY PDBLIC
4
Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO, 501-02
RESOLUTION OF INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY BY
LEASE AGREEMENT WITH CONAGRA FOODS, INC. d/b/a PEAVEY COMPANY
WHEREAS, the City of Dubuque, Iowa (City) and ConAgra Foods, Inc. d/b/a
Peavey Company (Peavey) have entered into a purchase agreement pursuant to which
City will purchase from Peavey certain real estate; and
WHEREAS, the purchase agreement includes as a condition of the purchase of
the property a proposed Lease Agreement, a copy of which is attached hereto,
pursuant to which City will lease to Peavey the following described real property upon
the terms and conditions set forth therein;
Lot 9, Block 4, River Front Subdivision # 2, Dubuque, Iowa; and
WHEREAS, the City Council has tentatively determined that it would be in the best
interests of the City to enter into the Lease Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City of Dubuque intends to dispose of its interest in the foregoing-
described real property by Lease Agreement, a copy of which is attached hereto.
Section 2. The City Clerk is hereby authorized and directed to cause this
Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a
public hearing on the City's intent to dispose of the foregoing-described real property, to
be held on the 7th day of October, 2002, at 6:30 o'clock p.m. at the public library
auditorium, 11th & Locust, Dubuque, Iowa.
Passed, approved and adopted this 16th day of September, 2002.
Terrance M. Duggan, Mayor
Attest: Jeanne F. Schneider, City Clerk
F:\USERS~Pmyhre\WPDOCS%OANDOC~Intent to Dispose by Lease.doc
Prepared by:
Barry A. Lindahl, Esq. 196 Dubuque Building Dubuque IA 52001 319 583-4113
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") made as of the __ day of
2002, between the CITY OF DUBUQUE, IOWA, a municipal corporation
(Lessor), and CONAGRA FOODS, INC., a Delaware corporation (Lessee).
ARTICLE 1
DEMISE AND TERM
1.1 Demise and Term. In consideration of the rents hereinafter reserved and the
terms, covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to
Lessee the real property described in Exhibit A attached to and made a part of this Lease,
together with any and ail easements and appurtenances thereto and subject to any easements and
restrictions of record (the "Demised Premises"), to have and to hold for an initial term
commencing as of the day of ,2002, and ending on
the day of ,2022 (the "Initial Term"), subject to all of the
terms, covenants, conditions and agreements contained herein.
ARTICLE 2
RENT
Lessee shall pay Lessor (in addition to taxes, assessments, and other charges required to
be paid under this Lease by Lessee) rent for the Demised Premises as follows:
2.1 Base Rent. For the £n:st ten years of this Lease, Lessee shall pay Lessor rent as
follows: $ 53,400.00 per year.
All such Base Rent shall be payable in twelve (12) equal monthly installments on the first
day of each mouth beginning on the first day of the Initial Term.
For rental payable on and after _, 2012, Lessor and Lessee
shall have prepared ninety (90) days prior to such time and ninety (90) days prior to every sixty
(60) months thereafter, an appraisal of the Demised Premises by a certified appraiser experienced
in appraising s/m/lar types of properties in the Dubuque area mutually selected by Lessor and
Lessee. If either party is dissatisfied with the appraisal or the parties cam~ot agree on an
appraiser, each shall, not later than forty-five (45) days prior to January 1 of the appraisal year,
appoint its own appraiser, each of which shall be experienced in appraising similar types of
properties in the Dubuque area and the two appointed by the parties shall select a third
experienced appraiser. The average appraised values of the three appraisers shall be the
appraised value of the Demised Property for the purposes of this Article. The annual rent shall
be ten percent (10%) of the appraised value of the Demised Premises for the sixty (60) month
period following each sixty (60) month appraisal period.
The Demised Premises shall be appraised as vacant, unimproved ground only without
regard to any buildings or other improvements on the Demised Premises.
The annual rent shall be paid in twelve (12) equal monthly installments on the first day of
each month be~aning on ~, 2012.
ARTICLE 3
TITLE TO IMPROVEMENTS AND TRADE FIXTURES
3.1 Trade Fixtures. For the purposes of this Lease, "Trade Fixtures" shall mean all of
Lessee's personal property located on the Demised Premises used in Lessee's business. Title to
Lessee's trade fLxtures (the "Trade FLxtares") is and shall be the sole and exclusive property of
Lessee during the term of this Lease and shall remain the sole and exclusive property of Lessee
after the expiration or termination of this Lease, for whatever reason. Lessor acknowledges and
understands that it shall have no right, title or interest in or to Lessee's Trade Fixtures either
during the term of this Lease, or thereafter (except as hereinafter provided). Lessor
aclmowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate
Lessee's Trade Fixtures, to remove them from the Demised Premises, or to otherwise deal with
all or any portion of such Lessee's Trade Fixtures, at Lessee's sole discretion. Upon ten (10)
days' prior written notice to Lessor, Lessor shall execute and deliver to Lessee a certificate in
recordable form prepared by Lessee stating that Lessor has no interest or right in or to Lessee's
Trade Fixtures, as well as any other or further document which Lessee may reasonably request
from Lessor.
3.2 Improvements. On delivery of possession of the Demised Premises to Lessee,
Lessee may construct, with the prior writtan consent of Lessor, on the Demised Premises such
Improvements necessary to the successful operation of Lessee's business, which consent shall not
be unreasonably withheld. By executing this Lease Lessor hereby grants Lessee written consent
to construct or install on the Demised Premises storage pads for the storage of grain, electrical
equipment and construct or install any such other structures or items necessary for the storage of
grain on the Demised Premises. Ail improvements on the Demised Premises are and shall be the
property of Lessee during the term of this Lease and no longer. Subject to the payment
obligations of Lessor set forth below, upon any termination of this Lease, by reason of any cause
whatsoever, if the Improvements or any part thereof shall then be on the Demised Premises, all
of Lessee's right, title, and interest therein shall cease and terminate, and title to the
Improvements shall vest in Lessor, and the Improvements or the part thereof then within the
Demised Premises shall be surrendered by Lessee to Lessor. No further deed or other instrument
shall be necessary to confmu the vesting in Lessor of title to the Improvements. However, upon
any termination of this Lease, Lessee, upon request of Lessor, shall execute, acknowledge and
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deliver to Lessor a quitclahn deed confirming that all of Lessee's right, title and interest in or to
the Improvements has expired, and that rifle to the Improvements has vested in Lessor.
ARTICLE 4
ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by
mortgage, deed of trust or other proper immanent, its leasehold interest and estate in the
Demised Premises, together with all huprovements on the Demised Premises, as security for any
indebtedness of Lessee, provided that no such encumbrance shall extend beyond the term of this
Lease. Lessee shall provide prompt written notice to Lessor of any such encumbrance together
with a copy of such encumbrance. In the event of any judicial or nonjudicial foreclosure under
any mortgage, deed of trust or other s/milar instrument made by Lessee coveting its leasehold
interest in the Demised Premises, Lessor shall, upon such foreclosure or sale, recognize the
purchaser thereunder as lessee under this Lease, provided such purchaser expressly agrees in
writing to be bound by the terms of this Lease.
4.2 Notice to Holder of Encumbrance: Right of Holder to Cure Lessee's Default. If
Lessee shall encmuber its leasehold interest and estate in the Demised Premises and if Lessee, or
the holder of the indebtedness, its successors and/or assigns (the "Holder") secured by the
encumbrance shall give notice to Lessor of the existence of the encumbrance and the address of
the Holder, then Lessor shall mail or deliver to the Holder, at such address, a duplicate copy of
all notices in writing which Lessor may, from time to time, give or serve on Lessee under and
pursuant to the terms and provisions of this Lease. The copies shall be mailed or delivered to the
Holder at, or near as possible to, the same time the notices are given to or served on Lessee. The
Holder may, at its option, at any time before the tights of Lessee shall be terminated as provided
in this Lease, pay any of the rents due under this Lease or pay any taxes and assessments, or do
any other act or thing required of Lessee by the terms of this Lease, or do any act or thing that
may be necessary and proper to be done in the observance of the covenants and conditions of this
Lease or to prevent the termination of this Lease; provided, however, that the do/rig of any act or
thing requiring possession of the Demised Premises shall be subject to the further rights of
Holder as set forth in Section 16.2. All payments so made and all things so done and performed
by the Holder shall be effective to prevent a foreclosure of the tights of Lessee thereunder as the
same would have been if done and performed by Lessee.
ARTICLE 5
TAXES
Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real
estate of the Demised Premises that become payable during the term hereof and which would
become delinquent if not so paid during the term hereof. Lessee shall further provide to Lessor
official receipts of the appropriate taxing authority or other evidence satisfactory to Lessor
evidencing payment thereof.
During the term of this Lease, Lessee further agrees to pay all other taxes, rates, charges,
levies and assessments, general and special, of every name, nature and k/nd, whether now known
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to the law or hereafter created ~vhich may be taxed, charged, assessed, levied or imposed upon
said real estate and which become payable during the tm-tn hereof and which would become
delinquent if not so paid during the term hereof, any buildings or improvements thereon which
may be taxed, charged, assessed, levied or imposed upon the leasehold estate hereby created and
upon the reversionary estate in said real estate during the term hereof and which become payable
during the term hereof and which would become delinquent if not so paid during the term hereof,
and ail such other taxes, rates, charges, levies and assessments shall be paid by Lessee as they
become due and before they become delinquent during the term hereof.
Lessee agrees to timely pay all taxes, assessments or other public charges levied or
assessed by lawful authority (but reasonably preserving Lessee's rights of appeal) against its
personal property on the premises, during the term of this Lease.
Nothing herein shall require Lessee to pay any of Lessor's income taxes, surtaxes, excess
profit taxes or any taxes on the rents reserved to Lessor hereunder.
Lessee shall at all times have the right to contest in good faith, in any proper proceedings,
in the name of Lessor if necessary, the payment or satisfaction of any such taxes, assessments,
rates, changes or levies so agreed to be paid by Lessee, if the validity thereof, or the right to
assess or levy the same against or collect the same from said Demised Premises or
Improvements, shall be disputed. Upon the conclusion of any such suit or proceedings, or not
less than three (3) months prior to the date when the right to redeem therefrom expires,
whichever will be the earlier, Lessee shall promptly pay and satisfy such disputed tax,
assessment or other charge as finally determined, together with all expenses, costs and attorneys'
fees whatsoever incurred in connection therewith.
ARTICLE 6
REPAIRS
Lessee shall at all times during the term of tiffs Lease, at Lessee's own costs and expense,
keep the Demised Premises and the Improvements thereon, and ail sidewalks, curbs, and all
appurtenances to the Demised Premises, in good order, condition and repair, casualties and
ordinary wear and tear excepted. Lessee shall keep and maintain the Demised Premises and ail
Improvements in a condition consistent with other similarly classed operations. Lessee shall
keep the Demised Premises in such condition as may be required by law and by the terms of the
insurance policies furnished pursuant to this Lease, whether or not such repair shall be interior or
exterior, and whether or not such repair shall be ora structural nature. Upon reasonable notice to
Lessee, Lessor may, at its discretion and at its cost, conduct an annual inspection of the Demised
Premises to determine Lessee's compliance with this Article 6.
ARTICLE 7
COMPLIANCE WITH LAW
7.1 During the term of this Lease, Lessee shall comply with all local, state and federal
laws applicable to Lessee's use of the Demised Premises, including but not limited to the
Americans with Disabilities Act.
7.2 Lessee shall not commit waste on the Demised Premises except as necessary for
its business purposes including the removal or construction of any buildings and Improvements
on the Demised Premises, and shall be liable for any damages to or destruction of any buildings
or Improvements on the Demised Premises resulting from waste and shall be required to repair
or rebuild such buildings or Improvements. Lessee may remove existing Improvements or
construct new Improvements on the Demised Premises subject to all of the terms and conditions
of this Lease provided Lessee has received the prior approval of Lessor, which approval Lessor
shall not unreasonably withhold.
ARTICLE 8
ALTERATIONS
Lessee shall have the right, with Lessor's prior written consent which consent shall not be
unreasonably withheld for any such alteration, addition, or modification that exceeds Fifty
Thousand and 00/100 Dollars ($50,000.00) in cost, at Lessee's expense, from time to time during
the term of this Lease to make any alteration, addition or modification to the Demised Premises
or the Improvements thereon. By executing this Lease Lessor hereby grants Lessee written
consent to construct on the Demised Premises storage pads for the storage of grain, install
electrical equipment and construct or install any such other structures or items necessary for the
storage of grain on the Demised Premises.
ARTICLE 9
USE OF DEMISED PREMISES
Lessee shall operate the Improvements for storage of commodities and shall not
knowingly use or allow the Demised Premises or any buildings or Improvements thereon or any
appurtenances thereto, to be used or occupied for any unlawful purpose or in violation of any
certificate of occupancy. Lessee shall not suffer any act to be done or any condition to exist
within the Demised Premises or in any Improvement thereon, or permit any article to be brought
therein, which is dangerous, unless safeguarded as required by law, or which, in law, constitute a
nuisance, public or private, or which may make void or voidable any insurance in force with
respect thereto.
ARTICLE 10
INSURANCE
10.1 Lessee shall provide and maintain or cause to be maintained at all times during
the process of constructing Improvements (and, from time to time at the request of City, furnish
City with proof of payment of premittms on):
A. Builder's risk insurance, written on the Special Perils Form in an amount equal to
one hundred percent (100%) of the replacement value of Improvements as the same shall
exist fi.om t/me to time during the construction process;
B. Commercial general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations and contractual liability insurance)
together with an Owner's Contractor's Policy with limits against bodily injury and
property damage of not less than $2,000,000.00 for each occurrence (to accomplish the
above-required limits, an umbrella excess liability policy may be used); and
C. Worker's compensation insurance, with statutory coverage.
10.2 Upon completion of construction of Improvements, Lessee shall maintain, or
cause to be maintained, at its cost and expense (and fi.om time to time at the request of City shall
furnish proof of the payment ofpremimns on) insurance as follows:
A. Property insurance against loss and/or damage to Improvements under an
insurance policy written on the Special Perils Form in an amount not less than the full
insurable replacement value of Improvements, but any such policy may have a deductible
amount of not more than $50,000.00. No policy of insurance shall be so written that the
proceeds thereof will produce less than the minimum coverage required by the preceding
sentence, by reason of co-insurance provisions or otherwise, without the prior consent
thereto in writing by City. The term "replacement value" shall mean the actual
replacement cost of Improvements (excluding foundation and excavation costs and costs
of underground flues, pipes, drains and other uninsurable items) and equipment, and shall
be determined from time to time at the request of City, but not more frequently than once
every three years, and paid for by Lessee.
Commercial general liability insurance, including personal injury liability for
injuries to persons and/or property, in the minimum amount for each occurrence and for
each year of $2,000,000.00.
10.3 Ail insurance required by this Article shall be taken out and maintained in
responsible insurance companies selected by Lessee which are authorized under the laws of the
State of Iowa to assume the risks covered thereby or ConAgra Foods, Inc., may at its election
self-insure itself pursuant to the aforementioned guidelines. Lessee shall deposit aunually with
City a certificate or certificates or binders of the respective insurers stating that such insurance is
in force and effect. Unless otherwise provided in this Section, each policy shall contain a
provision that the insurer shall not cancel or modify it without giving written notice to Lessee
and City at least thirty (30) days before the cancellation or modification becomes effective.
Lessee shall furnish City evidence satisfactory to City that the policy has been renewed or
replaced by another policy conforming to the provisions of this Section, or that there is no
necessity therefor under the terms hereof. In lieu of separate policies, Lessee may maintain a
single policy, or blanket or umbrella policies, or a combination thereof, which provide the total
coverage requ/red herein, hi which event Lessee shali deposit with City a certificate or
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certificates of the respective insurers as to the amount of coverage in force upon Improvements,
provided, however, the specific limit shall not be impaired.
10.4 Lessee agrees to notify City immediately in the case of damage exceeding
$500,000.00 in amount to, or destruction of, Improvements or may portion thereof result'rog from
fire or other casualty. Net proceeds of any such insurance ("Net Proceeds"), shall be paid
directly to Lessee, and Lessee shall forthwith repair, reconstruct and restore the Improvements to
substantially the same or an improved condition or value as they existed prior to the event
causing such damage and, to the extent necessary to accomplish such repair, reconstruction and
restoration, Lessee shall apply the Net Proceeds of any insurance relating to such damage
received by Developer to the payment or reimbursement of the costs thereof, subject, however,
to the terms of any mortgage encumbering title to the Property.
10.5 Lessee shall complete the repair, reconstruction and restoration of Improvements,
whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient.
ARTICLE 11
LESSOR'S WARRANTIES AND REPRESENTATIONS
11.1 Lessor's Representation of Good Title. Lessor covenants and warrants that
Lessor is lawfully se/zed in possession of the Demised Premises, and that it has full right and
authority to enter into this Lease for the full term hereof, and covenants and agrees that upon
paying the rent provided for herein, and upon Lessee's performing the covenants and agreements
of this Lease required to be performed by said Lessee, that it will have, hold and enjoy quiet
possession of the Demised Premises. Lessor warrants to Lessee that the Demised Premises are
properly zoned for the conduct of the operation of Lessee's business.
11.2 Lessor makes no representations or warranties as to the condition, including
enviroranental condition, of the Demised Premises and Lessee accepts the Demised Premises as
is.
ARTICLE 12
LESSEE'S WARRANTIES AND REPRESENTATION
12.1 Lessee Compliance With Law.
A. Lessee shall comply with all applicable local, state and federal laws, rules,
regulations and permits with regard to the Demised Premises and its use, occupancy and control
of the Demised Premises.
12.2 Environmental Matters.
A. Lessee covenants and agrees that Lessor shall have no responsibility for or
liability arising from any release of a Hazardous Substance which is caused by or results from
Lessee, Lessee's use, occupancy or control of the Demised Premises, except for Lessor
Hazardous Substances (any Hazardous Substance which leaches or migrates upon the
7
Demised Premises from any property owned by Lessor). Notwithstanding any other
provision of this Lease, Lessee shall not have any responsibility for any Hazardous Substance
which leaches or migrates upon the Demised Premises from any adjacent property or
any release of a Hazazdous Substances which is caused by Lessor or which pre-exists
the date of this Lease.
B. Lessee covenants and agrees to promptly notify Lessor of any release of
Hazardous Substance in, on or about the Demised Premises of which Lessee has actual
knowledge.
C. Lessee covenants and agrees to promptly take any and all necessary and
appropriate response to address any release of Hazardous Substance for which Lessee is
responsible under Section 12.2A. Such response shall include, without limitation, notification to
appropriate governmental authorities, as may be required by law.
D. Lessee covenants and agrees to not manufacture, treat or dispose of
Hazardous Substances at the Demised Premises or knowingly allow the manufacture, trealxnent,
or disposal of Hazardous Substances same on the Demised Premises.
E. Lessor covenants and agrees with Lessee that no Hazardous Substances
have been spilled on or disposed of on the Demised Premises.
For the purposes of ttds Lease, "Hazardous Substance" or "Hazardous
Substances" means any hazardous or toxic substance, material or waste which is or becomes
regulated by any local government, the State of Iowa or the United States Government. It
includes, without limitation, any material or substance that is (i) defined as a "hazardous
substance" or "hazardous waste" under Chapter 455B, Iowa Code, (ii) petroleum and petroleum
products, (iii) asbestos containing materials in any form or condition, (iv) designated as a
"hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33
U.S.C. § t321), (v) defined as a "hazardous waste pursuant to § 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq., (vi) defined as a "hazardous
substance" pursuant to § 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, U.S.C § 9601 et seq., or (v/i) def'med as a "regulated substance" pursuant to
Subchapter IX, Solid Waste Disposal Act (Regulation of Underground Storage Tanks), 42
U.S.C. § 6991 et seq.] The term "Hazardous Substance" shall not include any air emissions
discharged into the atmosphere as allowed by a duly issued permit from the applicable
governmental agency.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification of Lessee.
A. To the extent ailowed by law, Lessor will indemnify and save harmless
Lessee from and against al1 habilities, obligations, claims, damages, penalties, causes of action,
costs and expenses (including, without limitation, reasonable attorneys' fees and expenses)
8
imposed upon or/ncurred by or asserted against Lessee by reason of(a) any accident, injury to or
death of persons or loss of or damage to property occurring on or about the Demised Premises
and resulting from any act or omission of Lessor, (b) any failure on the part of Lessor to perform
or comply with any of the terms of this Lease and (c) any breach on the part of Lessor of any
warranty or representation contained in Article 11. In case any action, suit or proceeding is
brought against Lessee by reason of such occurrence, Lessor will, at Lessor expense and
discretion, either defend such action, suit or proceeding, or cause the same to be defended by
counsel approved by Lessee, which approval will not be unreasonably withheld.
13.2 Indemnification of Lessor. Lessee will indemnify and save harmless Lessor from
and aga'mst all liabilities, obligations, claims, damages, penalties, causes of action, costs and
expenses (including, without limitation, reasonable attorneys' fees and expenses) imposed upon
or incurred by or asserted against Lessor by reason of (a) any accident, injury to or death of
persons or loss of or damage to property occurring on or about the Demised Premises during the
term of this Lease and resulting from any negligence of Lessee or anyone clahuing by, through
or under Lessee during the term of the Lease and (b) any failure on the part of Lessee to perform
or comply in any material respect with any of the material terms of this Lease, and (c) any
material breach on the part of Lessee of any warranty or representation contained in Article 12.
In case any action, suit or proceeding is brought against Lessor by reason of such occurrence,
Lessee will, at Lessee's expense and discretion, either defend such action, suit or proceeding, or
cause the same to be defended by counsel approved by Lessor, which approval will not be
unreasonably withheld.
13.3 Survival. The obligations and liabilities under this Article shall survive and
continue in fall force and effect and shall not be terminated, discharged or released, in whole or
in part, irrespective of the termination or expiration of the term of this Lease.
ARTICLE 14
CONDEMNATION
14.1 Entire Condemnation. If at any time during the term of this Lease all or
substantially all of the Demised Premises or the Improvements thereon shall be taken in the
exercise of the power of eminent dom~Vm by any sovereign, municipality or other public or
private authority, then this Lease shall term'mate on the date of vesting of title in such taking and
any prepaid rent shall be apportioned as of said date. Substantially all of the Demised Premises
and the Improvements thereon shall be deemed to have been taken if the remaining portion of the
Demised Premises shall not be of sufficient size to penuit Lessee, in Lessee's sole discretion, to
operate its business thereon in a manner similar to that prior to such taking.
14.2 Allocation of Award. Any award for such taldng of all or substantially all of the
Demised Premises shall be paid to the parties hereto in accordance with the following:
A. To Lessor, the amount of the award attributable to the Demised Premises,
determined as if this Lease was not in effect at the time of such award, excluding
therefrom the amount of the award atu:ibutable to the Improvements, and all other sums
not directly attributable to the value of the Land constituting the Demised Premises;
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B. To Lessee, the ent'nce award except that portion allocated to Lessor above.
14.3 Partial Condemnation. If less than all or substantially all of the Demised Premises
or the Improvements thereon shall be taken in the exercise of the power of em'ment domain by
any sovereign, municipality or other public or private authority, then Lessee, at its option, may
elect to continue this Lease in full force and effect or terminate this Lease. If Lessee shall elect
to mffmtain this Lease in full force and effect, the award for such partial condemnation shall be
allocated as provided in Section 14.2, and Lessee shall proceed with reasonable diligence to
carry out any necessary repair and restoration so that the remaining Improvc~ments and
appurtenances shall constitute a complete stmctnsal unit or units which can be operated on an
economically feasible basis under the provisions of this Lease. In the event Lessee elects to
continue this Lease in full force and effect after a partial condemnation, the Base Rent shall be
reduced in proportion to the area of the Demised Premises taken.
Should Lessee elect to terminate this Lease upon a partial condemnation, Lessee shall
provide Lessor with written notice of such election within thirty (30) days after the date of
vesting of title for such taking. Lessee shall specify in such written notice the date on which this
Lease shall terminate, which date shall be not less than 60 days nor more than 360 days after
delivery of such notice to Lessor (the "Termination Date"). In the event Lessee terminates this
Lease, as provided for in this Section 13.3, Lessee shall be entitled to the entire award for such
partial taking.
14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised
Premises or the Improvements thereon or the appurtenances thereto shall be taken at any time
during the term of this Lease in the exercise of the power of eminent domain by any sovereign,
municipality, or other authority, the term of this Lease shall not be reduced or affected in any
way, and Lessee shall continue to pay in full the rent, additional rent and other sum or sums of
money and charges herein reserved and provided to be paid by Lessee, and the entire award for
such temporary taking shall be paid to Lessee. Lessee shall repair and restore any and all
damage to the Demised Premises and the Improvements as soon as reasonably practicable after
such temporary taking.
14.5 Effect of Taldn~. If any taking renders the construction of the hotel and
entertainment center impossible, any financial penalties set forth in Section 1.3 due after such
taking shall not be applicable.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
This Lease may not be assigned by Lessee without the prior written consent of the City,
which consent shall not be unreasonably withheld, provided said th/rd party agrees to comply
with the terms and conditions of this Lease.
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ARTICLE 16
DEFAULT
16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee shail fail or neglect to
observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its
part to be observed, kept or performed, and the default shall continue for a period of thirty (30)
days after written notice from Lessor setting forth the nature of Lessee's default (it being
intended that in connection with a default not susceptible of being cured with diligence within
thirty (30) days, the time within which Lessee has to cure the same shall be extended for such
period as may be necessary to complete the same with ali due diligence, but in no event longer
than ninety (90) days), then and in any such event, Lessor shall have the fight at its option, on
written notice to Lessee, to terminate this Lease. Lessor shail thereafter have the right to enter
and take possession of the Demised Premises with process of law and to remove all personal
property fi:om the Demised Premises and ail persons occupying the Demised Premises and to use
ali necessary force therefor and in all respects to take the actual, full and exclusive possession of
the Demised Premises and every part of the Demised Premises as of Lessor's original estate,
without incurring any liability to Lessee or to any persons occupying or using the Demised
Premises for any damage caused or sustained by reason of such entry on the Demised Premises
or the removal ofpersuns or property fi:om the Demised Premises.
16.2 Rights of Holder of Encumbrance in Event Lessee Defaults If Lessee fails or
neglects to observe, keep or perform any of the covenants, terms or conditions contained in this
Lease on its part to be observed, kept or performed, the Holder of any indebtedness secured by
an encumbrance on the leasehold estate under this Lease shall have thirty (30) days after receipt
of written notice from Lessor setting forth the nature of Lessee's default and a reasonable time
thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature
thereof within such thirty (30) days and is diligently prosecuting such proceedings, but in no
event longer than ninety (90) days, within which to endeavor to make good or remove the default
or cause for termination of the Lease. All right of Lessor to terminate this Lease on the failure or
neglect of Lessee to observe, keep and perform the covenants, terms and conditions of this Lease
is, and shall continue to be, at all times prior to payment/n full of the indebtedness to the Holder
of Lessee, subject to and conditioned on Lessor's having first given the Holder written notice
thereof and the Holder having failed to cause the default or cause for termination to be made
good or removed within thirty (30) days after receiving written notice of default or cause for
termination or within a reasonable time thereafter if it shall have commenced foreclosure or other
appropriate proceedings in the nature of foreclosure within such thkty (30) days and is diligently
prosecuting such proceedings, but in no event ionger than ninety (90) days. In the event that the
Lease is terminated due to the Lessee's bankruptcy, insolvency or other proceedings, and in the
event the Holder has complied with the terms of this Section 16.2, then Lessor at Holder's
option, shall enter into a new lease with Holder or the successful bidder at foreclosure on the
same terms as this Lease, for the term then remain/2g, and specifically preserving all unexercised
options.
16.3 Lessee's Rights in the Event of Lessee's Default. If Lessor shall fail or neglect to
observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its
part to be observed, kept or performed, and the default shall continue for a period of thirty (30)
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days after written notice from Lessee setting forth the nature of Lessor's default (it being
intended that in connection with a default not susceptible of being cured with diligence within
thirty (30) days, the time within which Lessor has to cure the same shall be extended for such
period as may be necessary to complete the same with all due diligence, but in no event longer
than ninety (90) days), then and in any such event, Lessee shall have all fights available to it
provided by law or equity.
ARTICLE 17
RIGHT TO CURE OTHER'S DEFAULTS
Whenever and as often as a party shall fail or neglect to comply with and perform any
term, covenant, condition or agreement to be complied with or performed by such party
hereunder, then, following thirty (30) days' prior written notice to such defaulting party (or such
additional time to cure as may be accorded Lessee pursuant to Section 16.1 above, but in no
event longer than ninety (90) days), the other party, at such other party's option, in addition to all
other remedies available to such other party, may perform or cause to be performed such work,
labor, services, acts or things, and take such other steps, including entry onto the Demised
Premises and the Improvements thereon, as such other party may deem advisable, to comply
with and perform any such term, covenant, condition or agreement which is in default, in which
event such defaulting party shall reimburse such other party upon demand, and from time to
time, for ali costs and expenses suffered or incurred by such other party in so complying with or
performing such term, covenant, condition or agreement. The commencement of any work or
the taking of any other steps or performance of any other act by such other party pursuant to the
immediately preceding sentence shall not be deemed to obligate such other party to complete the
curing of any term, covenant, condition or agreement which is in default.
ARTICLE 18
QUIET ENJOYMENT
Lessor covenants that at all times during the term of this Lease, so long as Lessee is not
in default hereunder, Lessee's quiet enjoyment of the Demised Premises or any part thereof shall
not be disturbed by any act of Lessor, or of anyone acting by, through or under Lessor.
ARTICLE 19
ESTOPPEL CERTIFICATES
Each party hereto agrees that at any time and from time to time during the term of this
Lease, within ten (10) days after request by the other party hereto or by any lender having an
interest in Lessee's leasehold estate, it will execute, acknowledge and deliver to the other party
or to such lender or any prospective purchaser, assignee or any mortgagee designated by such
other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if
there have been modifications, that this Lease is in force and effect as modified, and identifying
the modification agreements), (b) the date to which rent has been paid, (c) whether or not there is
any existing default by Lessee in the payment of any rent or other sum of money hereunder, and
whether or not there is any other existing default by either party hereto with respect to which a
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notice of default has been served, and, if there is any such default, specifying the nature and
extent thereof; and (d) whether or not there are any setoffs, defenses or counterclaims against
enforcement of the obligations to be performed hereunder existing in favor of the party executing
such certificate.
ARTICLE 20
WAIVER
No waiver by either party hereto of any breach by the other of any term, covenant,
condition or agreement herein and no failure by any party to exercise any right or remedy in
respect of any breach hereunder, shall constitute a waiver or relinquishment for the future of any
such term, covenant, condition or agreement or of any subsequent breach of any such term,
covenant, condition or agreement, nor bar any right or remedy of the other party in respect of any
such subsequent breach, nor shall the receipt of amy rent, or any portion thereof, by Lessor,
operate as a waiver of the rights of Lessor to enforce the payment of any other rent then or
thereafter in default, or to terminate this Lease, or to recover the Demised Premises, or to invoke
any other appropriate remedy which Lessor may select as herein or by law provided.
ARTICLE 21
SURRENDER
Lessee shall, on the last day of the term of this Lease or upon any tenuination of this
Lease, surrender and deliver up the Demised Premises, with the Improvements then located
thereon into the possession and use of Lessor, without fraud or delay and in good order,
condition and repair, reasonable wear and tear excepted, free and clear of all Iettings and
occupancies, free and clear of all hens and encmnbrances other than those existing on the date of
this Lease and those, if any, created by Lessor, without (except as otherwise provided herein) any
payment or allowance whatever by Lessor on account of or for any buildings and Improvements
erected or maintained on the Demised Premises at the time of the surrender, or for the contents
thereof or appurtenances thereto. Lessee's Trade Fixtures, personal property and other
belongings of Lessee or of any sublessee or other occupant of space in the Demised Premises
shall be and remain the property of Lessee, and Lessee shall have a reasonable time after the
exp/zation of the term of this Lease (not to exceed thirty (30) days) to remove the same.
ARTICLE 22
MEMORANDUM OF LEASE
Each of the parties hereto will, promptly upon request of the other, execute a
memorandum of this Lease in a form suitable for recording setting forth the names of the parties
hereto and the term of this Lease, identifying the Demised Premises, and also including such
other clauses therein as either party may desire, except the amounts of Basic Rent payable
hereunder.
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ARTICLE 23
NOTICES
23.1 Al1 notices, demands or other writings in this Lease provided to be given or made
or sent, or which may be given or made or sent, by either party to the other, shall be deemed to
have been fully given or made or sent when made tn writing and deposited in the United States
mail, registered and postage prepaid, and by facsimile addressed as follows:
TO LESSOR:
City of Dubuque, Iowa
City Manager
City Hall
13~ and Central Avenue
Dubuque IA 42001
Fax 319 589-4149
TO LESSEE:
The Peavey Company
505 East Seventh Street
P.O. Box 1480
Dubuque, IA 52001
ATTN: Delbert Uhlik
WITH COPY TO:
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE 68102
ATTN: James G. Doyle, Vice President Real Estate & Facilities
23.2 The address and/or fax number to which any notice, demand or other writing may
be given or made or sent to any party as above provided may be changed by written notice given
by the party as above provided.
ARTICLE 24
MISCELLANEOUS
24.1 T/me of the Essence. Time is of the essence of this Lease and ali of its
provisions.
24.2 Govemin~ Law. It is agreed that this Lease shall be governed by, construed and
enforced in accordance with the laws of the State of Iowa.
24.3 Paragraph Head/ngs. The titles to the paragraphs of this Lease are solely for the
convenience of the parties and shall not be used to explain, modify, simplify or aid tn the
interpretation of the provisions of this Lease.
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24.4 Modification of Agreement. Any modification of this Lease or additional
obligation assumed by either party in connection with this Lease shall be binding only if
evidenced in a writing signed by each patty or an authorized representative of each party.
24.5 Parties Bound. This Lease shall be bind/ng on and shall inure to the benefit of
and shall apply to the respective successors and assigns of Lessor and Lessee. All references in
this Lease to "Lessor" or "Lessee" shall be deemed to refer to and include successors and assigns
of Lessor or Lessee without specific mention of such successors or assigns.
24.6 Force Majeure. In the event that either party hereto shall be delayed or hindered
in or prevented from the performance of any act required hereunder by reason of strikes,
lockouts, labor troubles, unavailability of construction materials, unavailability or excessive
price of fuel, power failure, hots, insurrection, war, terrorist activities, explosions, hazardous
conditions, fire, flood, weather or acts of God, or by reason of any other cause beyond the
exclusive and reasonable control of the party delayed in perfonning work or doing acts required
under the terms of this Lease (collectively "Force Majeure"), then performance of such act shall
be excused for the period of the delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay.
Attest:
Attest:
Jeanne F. Schneider, City Clerk
LESSOR:
CITY OF DUBUQUE, IOWA
By:
Terrance M. Duggan, Mayor
LESSEE:
CONAGRA FOODS, 1NC.
By:
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EXHIBIT "A"
LEGAL DESCK1PTION OF DEMISED PREMISES
Lot 9, Block 4, River Front Subdivision #2, Dubuque, Iowa
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