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ConAgra Lease Agree - 12th StMEMORANDUM September 23, 2002 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Approval of ConAgra Foods, Inc. Lease Agreement Economic Development Director Bill Baum is recommending approval of a lease of approximately five acres'of City property on the 12th Street Peninsula off of Kerper Boulevard for a period of twenty years at an annual cost of $ 53,400 for each of the first ten years, with the last ten years based on an appraisal every five years, with Peavey paying 10% of the appraised value per year. This property was previously leased to Flynn Ready-Mix. Flynn purchased property from the City on Kerper Court and constructed a new facility. This lease will accommodate the move of Peavey Grain from the north end of the Port of Dubuque and the City acquisition of approximately five acres near the Brewery. I concur with the recommendation and respectfully request Mayor and City Council approval. MCVM/]h Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager William Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM September 23, 2002 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Approval of ConAgra Foods, Inc. Lease Agreement Introduction This memorandum presents for City Council review and approval a resolution approving the disposition of property on the 12th Street Peninsula to ConAgra Foods, Inc. (Peavey Company) by Lease Agreement. A public hearing has been scheduled for October 7, 2002. Background On September 16, 2002, the CityCouncil set a public hearing on the City's intent to dispose of real property by lease to the Peavey Company to accommodate the relocation of Peavey from its current location on the 4th Street Peninsula to the 12th Street Peninsula land formerly occupied by Flynn Ready-Mix. The land exchange is possible due to the relocation of the Flynn operation to their new facility on Kerper Court. 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 property, Lot 9, Block 4, River Front Subdivision #2, is approximately 5 acres and will allow Peavey to continue to store grain and other materials in close proximity to their E. 7th Street facility. During the course ofthe twenty-year lease, the annual lease payment will be $53,400/year for the first ten years and will be based on appraised values thereafter calculated every five years. Other terms and conditions are standard to Cityproperty leases. Recommendation I recommend that the City approve the Lease Agreement with ConAgra Foods, inc. for the property on the 12th Street Peninsula. 7his action supports the Cites 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 adopt the attached resolution. Attachment F:\USERS\Pm~h re\WPDQOS%OANDOC\peaveyleaseapproval.mem.doc Prepared by: BarryA. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 RESOLUTION NO. 543-02 RESOLUTION DISPOSING OF AN INTEREST IN REAL PROPERTY BY LEASE AGREEMENT TO CONAGRA FOODS, INC. dlb/a PEAVEY COMPANY WHEREAS, the City of Dubuque, Iowa (City) is the owner of the real property legally described as: Lot 9, Block 4, River Front Subdivision # 2, Dubuque, Iowa; and WHEREAS, ConAgra Foods, Inc. d/b/a Peavey Company desires to lease the City Property for the purpose of storing commodities and other river-related business activities upon the terms set forth in the Lease Agreement attached hereto; and WHEREAS, the City Council has held a public hearing on the City's intent to dispose of the foregoing-described City Property on the 7th day of October, 2002, pursuant to notice as required by law, and following the public hearing overruled all objections thereto. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council of the City of Dubuque, Iowa, hereby approves the Lease Agreement with ConAgra Foods, Inc. d/b/a Peavey Company, a copy of which is attached hereto, for the above-described City Property. Section 2. The Mayor is hereby authorized and directed to sign the Lease Agreement on behalf of the City of Dubuque. Section 3. The City Clerk is hereby authorized and directed to record this Resolution with the Dubuque County Recorder. Passed, approved and adopted this 7th day of October, 2002. Tbrrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk F:\USERS\Pmyhre\WPDOOS~LOANDOO~Disposebyiease.res.doc CONAGRA FOODS, INC. d/b/a PEAVEY COMPANY LEASE AREA Lot 9, Block 4 River Front Subdivision #2 Prepared by: Ba-~ A. Lindahl, Esq. 330 Main Street, Suite 300, Dubuque Building Dubuque IA 52001 563 583-4113 LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease") made as of the 25th. day of Sept. 2002, between the CITY OF DUBUQUE, IOWA, a municipal corporation (l~ess&), and CONAGRA FOODS, INC.., a Delaware corporation (Lessee). ARTICLE 1 DEMISE AND TERM 1.1 Demise and Term. In consideration of the rents bereina~er 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 all easements and appurtenances thereto and subject to any easements and restrictions of record (the Demised Prremises) and to hold for an initial term commencing as of the 1st day of December, 2002, and ending on the .30th day of November, 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 first 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 month be~nning on the first day of the Initial Term. For rental payable on and after December 1, 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 similar types of properties in the Dubuque area mutually selected by Lessor and Lessee. If either party is dissatisfied with the appraisal or the parties cannot 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 shal~ be paid in twelve (12) equal monthly installments on the first day of each month beginning on December 1, 2012. ARTICLE 3 TITLE TO IMPROVEMEN~ AND TRADE FIXTURES 3.1 Trade Fixtures. For the purposes of this Lease, "Trade Fixtures" sbal! mean ail of Lessee's personal property located on the Demised Premises used in Lessee's business, Tire to Lessee's trade fixtures (the "Trade Fixtures") 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 acknowledges 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 otberqdse 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 cerrificeto 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 written consent of Lessor, on the Demised Premises such Improvements necessa~ 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 graln~ electrical equipment and construct or install any such other structures or items necessary for the storage of grain on the Demised Premises. All 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, rifle, and interest therein shall cease and terminate, and rifle to the Improvements shall vest in Lessor, and the Improvements or the part thereof then within the 2 Demised Premises shall be surrendered by Lessee to Lessor. No further deed or other instrument shall be necessary to confirm 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 deliver to Lessor a quitclaim deed confirming that all of Lessee's fight, title and interest in or to the Improvements has expired, and that title 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 instrument, its leasehold interest and estate in the Demised Premises, .together with all Improvements on the Demised Premises, as security for any indebtedness of Lessee, provided that no such encaxmbrance 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 similar instrument made by Lessee covering its leasehold interest in the Demised Premises, Lessor shall, upon such foreclosure or sale, reco~tmiT~ 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 encumber 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 fights of Lessee shall be terminated as provided in this Lease, pay any of the rents due under this Lease or pay any taxes and ass~.s, ments, 9r 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 doing of any act or thing requiring possession of the Demised Premises shall be subject to the further fights 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 rights 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 3 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 kind, whether now known to the law or hereafter created which may be taxed, charged, assessed, levied or imposed upon said real estate and which become payable during the term 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 bereof and which would become delinquent if not so paid during the term hereof, and all 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 Lesses'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, charges 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 tha conclusion of any such suit or proceedings, or not less ~han 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 this Lease, at Lessee's own costs and expense, keep the Demised Premises and the Improvements thereon, and all 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 all Improvements in a condition consistent with other similarly classed operations. Lessee shall keep the D~mised 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 of a 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. 4 ARTICI .F. 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 Filly 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 Improvemenls 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 I0.1 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 premiums on): A. Builder's risk insurance, written on the Special Perils Formin an amount equal to one hundred percent (100%) of the replacement value of Improvements as the same shah exist from time to time during the construction process; B. Commercial general liability insurance (including operations, contingent liability, operations of subcontractors, corapleted operations and contractual liability insurance) together with an Owner's Cuntraetor'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 s~atutory coverage. 10.2 Upon completion of construction of Improvements, Lessee shall main~in, or cause to be maintained, at its cost and expense (and from time to tirae at the request of City shall furnish proof of the payment of premiums 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 $$0,000.00. 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 aetoal 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 frqm time to time at the request of City, but not more frequently than once every th~e years, and paid for by Lessee. B. Commercial general liability insurance, including personal injmy 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 All 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 annually 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. 6 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 required herein, in which event Lessee shall deposit with .City a certificate or certificates of the respective insurers as to the mount of coverage in force upon hnprovemonts, 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 mount to, or destruction of, Improvements or any portion thereof resuiting from fire or other casualty. Net proceeds of any such insurance ("Net Proceeds"), shall be paid directly to Lessee, and Lessee shall foRhwith 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, reconsWaction 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 ferms of any mortgage encumbering rifle to the Property. 10.5 Lessee shall complete the repair, recons~'uction 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 seized in possession of the Demised Premises, and that it has full fight 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 .~..e Demised Premises are properly zoned for the conduct of the operation of Les see's business. 11.2 Lessor makes no representations or warranties as to the condition, including environmental 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 pem~its with regard to the Demised Premises and its use, occupancy and control of the Demised Premises. 7 12.2 Environmental Matters. A. Lessee covenants and agrees that Lessor shall have no. respousibility for or liability arising from any release of a Hazardous Substance which is caused by or results from Lessee, Lessec's use, occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any Hazardous Substance which leaches or migrates upon the Demised Premises from any property owned by Lessor). Notwithstanding any other provision of thi.~ Lease, Lessee shall not have any responsibility for any Hazardous Sub,ante which leaches or migrates upon the Demised Premises from any adjacent property or any release of a Hazardous 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 necessa~ 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 gnvemmental 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, treatment, or disposal of Hazardous Substances same on the Demised Premises. E. Lessor covenants and agrees with Lessee that no Hazardous Substances have bean spilled on or disposed of on the Demised Premises. For the purposes of this Lease, '~Iazardous Substance" or '~l-Iazardous 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 "haTardous substance" or "hazardous waste" under Chapter 455B, Iowa Code, (ii) petroleum and petroleum products, (iii) asbestos contz~nlng 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. § 1321), (v) defined as a "hazardous waste pursuant to § 1004 oftbe Federal Resource Conservation and. Recovery Act, 42 U.S.C. 96901 et seq., (vi) defined as a ''hazardous substance" pursnant to § 101 of the Comprehensive Environmental Response, Compensation and Liability Act, U.S.C § 9601 et seq., or (vii) defined as a "regulated substance" pursuant to 8ubchapter IX-Solid-'Nme-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. 8 ARTICLE 13 INDEMNIFICATION 13.1 Indemnification of Lessee. A. To the extent allowed by law, Lessor will indemnify and save harmless Lessee from and against 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 Lessee by reason of(a) any accident, injttty to or death of persons or loss of or damage to property occun4ng on or about the Demised Premises and resulting from any act or omission of Lessor, Co) 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 against all liabilities, .obligations, clalms, damages, penalties, muses 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 claiming by, through or under Lessee during the term of the Lease and Co) 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 full 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 tho Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality or other public or private authority, then this Lease shall terminate 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 9 Demised Premises shall not be of sufficient size to permit Lessee, in Lessee's sole discretion, to operate its business thereon in a manner slmilar to that prior to such taking. 142. Allocation of Award. Any award for such taking of all or substantially all ofthe Demised Premises shall be paid to the parties hereto in accordance with the following: A. To Lessor, the mount of the award at~ibutable 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 attributable to the Improvements, and all other sums not directly attributable to the value of the Land constituting the Demised Premises; B. To Lessee, the entire 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 eminent 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 maintain 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 Improvements and appurtenances shall constitute a complete s~ructaral 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 deli.very of such notice to Lessor (the "Termination Date"). In the event Lessee terminates this Lea~[, as prtvided 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 temporavd taking. 14.5 Effect of Taking. If any taking renders the construction of the hotel and 10 cntertainmem center impossible, any financial penalties set forth in Section 1.3 doc aRer such taking shall not be applicable. ARTICLE 15 ASSIG~ 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 third party agrees to comply with the terms and conditions of this Lease. ARTICLE 16 DEFAULT '16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee 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) days after written notice from Lessor setting forth the nature of Lessoc's default (it being intended that in connection with a default not susceptible of being cured with diligence within thirty 00) 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 all due diligence, but in no event longer than ninety (90) days), then and in any such event, Lessor shall have the right at its option, on written notice to Lessee, to terminate this Lease. Lessor shall thereafter have the right to enter and take possession of the Demised Premises with process of law and to remove all personal property from the Demised Premises and all persons occupying the Demised Premises and to use all 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 of persons or property from 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 oftha 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 O0) 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 00) 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 fight 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 continoc to be, at all times prior to payment in 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 11 termination or within a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature of foreclosure within such thirty 00) days' and is diligently prosecuting such proceedings, but in no event longer 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 tern of this Section i6.2, 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 remaining, and specifically preserving all unexercised options. 163 Lessee's Rights in the Event ofLessee's Default. IfLessor 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 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 00) 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 rights available to it provided by law or equity. ARTICLE 17 RIGHT TO CLrRE 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 all 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 12 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 fiom time to time during the term of this Lease, w~thin 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 snm of money hereunder, and whether or not there is any other existing default by either party hereto with respect to which a 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 any 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 Pre.m..ises, 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 termination 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 lettings and occupancies~ free and clear of all liens and encumbrances other than those existing on the date of this Lease and those,.if any, created by Lessor, without (except as othenarise 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 13 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 expiration of the term of this Lease (not to exceed thirty (30) days) to remove the same. ARTICI.R 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, identifb4ng the Demised Premises, and also including such other clauses therein as either party may desire, except the amounts of Basic Rent payable hereunder. ARTICLE 23 NOTICES 23.1 All 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 in 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 %7 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 ATrlq: Delbert Uhlik WITH COPY TO: ConAgra Foods, Inc. One ConAgra Drive Omaha, NE 68102 ATTN: James G. Doyle, Vice President Real Estate & Fac'flities _ 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 bythe party as above provided. ARTICLE 24 14 24.1 provisions. MISCELLANEOUS Time of the Essence. Time is of the essence of this Lease and all of its 24.2 Governing Law. It is agreed that this Lease shall be governed by, conslrued and enforced in accordance with the laws of the State of Iowa. 24.3 Paragyaph Headings. 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 in the interpretation of the provisions of this Lease. 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 party or an authorized representative of each party. · 24.5 Parties Bound. This Lease shall be binding 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 Maieure. 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, riots, insurrection, war, terrorist activities, explosions, hazardous conditions, fire, flood, weather or acts of God, or by reason of any other came beyond the exclusive and reasonable control of the party delayed in performing 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..? extended for a period equivalent to the period of such delay. LESSOR: CITY OF DUBUQUE, IOWA Terrance M. Duggan, Mayor LESSEE: CONAGRA FOODS, INC. 15 ATTEST: Jeanne F. Schneider, City Clerk Attest: VICE PRESIDENT - TAX STATE OF IOWA, COUNTY OF DUBUQUE, ss: in and for the State of Io~x~ personally appeared Terrance M. Duggan and Jeanne F. Schneider, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa; a municipal corporation; that the seal affixed to the foregoing instrument is the corporate seal of the corporation, and that the instrument was si~ed and s~ed o. be~,f of the coarsen; by authority of i~ q~ C?un~.~ as ~ned in Resolution No..~/.~-~ passed by the City Council on the ~x~/.?/~. ~, and Terrance M. Duggan and Jea-~ne ~. ~c-cl~eider acknowledged the execution of' the instrument to be their / ' / /l~o'tary Pn--~lic in and fo~ said State SUSAN M. WINTER ~o"~'~l¢oumsmON NO. 183274 MY COMMISSION EXPIRES 2/14/0.5 Onthis '2-~b~ day of ~>~7~rr~?0e-~ , 20 07~, before me, a Notary Public in and for said county and state, personally appeared I~[~Y-& [~. }~.~(qda. , to me known to be the identical person who subscribed the name of ~ o ~":["0~ -" , a division of ConAgra Foods, Inc., to the foregoing instrument as its and acknowledged the execution thereof to be their voluntary act and deed and the voluntary act and deed of said corporation. Witness my hand and notarial seal the day and year last above written. "O~T~Y PUBLIC 16 EXHIBIT "A' LEGAL DESCRIPTION OF DEMISED PREMISES Lot 9, Block 4, River Front Subdivision #2, Dubuque, Iowa A-1 MEMORANDUM 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 12 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 4 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. I 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 Manager 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 4 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 brmerly 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 haw 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 of a docking facility in the Peosta Channel adjacent to the leased property. The previous agreement required the Cityto 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 br the move and relocation are well over $100,000. Other minor changes to the document retect 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. lease 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:\US ERS\Prn~hre\WPDOCS\LOANDOC\peaveyleasepurchase.mvm.doc 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. dlbla 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 [ibra~J auditorium, 11th & Locust, Dubuque, Iowa. Passed, and this 16~ day of Septemb~e~ 2002. ~ ~.~x~,ttest: Jeanne F. Schneider, City Clerk F;~U SERS~myhr e\WPDO CS\LOANDOC~Inten[ t° Dispose by Lease.do~ SEP-16-O2 MON 04:14 PU TELEG~?H HERflLD RD$ FA× NO, 5885782 P, 06/08 CiTY OF DUBUQUE IOWA OFFIC~IAL NOT CE NOTIOE is her..eb~ g'wen that the C)fty Count, Of DubuClue. leWa. will conduct a pubilo heating at a meeting to ¢or~- menca at 6:60 p.m., on the 7th day of Ootober, 2002, in the Public Ubray Audito~um, 360 West 11th $1mat to oo~slder disposing of Interest l~ rear property Icoated on the ~__~ Twefi'th Sb'sat Extension by lease egrae~enLwith~ Agra, In,, d/'o/a~pe~q~Com- pany, for property located on the Twelfth ~treet Extension. (Copy of sup~'Ung ments a~e on file in Iha City Clerk's Offica a~d may be ¥le~ed during working hours) Written commanls regardhg disposal of sald ~mpedy may be ~ub{~Jtted ~o the Oity Clork's Office on or before time of ~J. b.~c hearln, g. , . A.t said lime alia ~lase p_u~l[c heating, ali citizens and par*den wi[i be given an opportunlly tO be heard far or agsinat disposing v~sual or hearing lm- needing ~:~et~ ' Clerk's Of[ice at or TDD at least ~ the meethg. order of [fie Oity Council day 2002, lt9~7 q CITY OF DUBUQUE, IOWA OFFICIAL NOTICE NOTICE is hereby given that the City Council of Dubuque, Iowa, will conduct a public hearing at a meeting to commence at 6:30 p.m., on the 7th day of October, 2002, in the Public Library Auditorium, 360 West 11th Street, to consider disposing of interest in real property located on the Twelfth Street Extension by lease agreement with ConAgra, Inc., d/b/a/Peavey Company, for property located on the Twelfth Street Extension. (Copy of supporting documents are on file in the City Clerk's Office and may be viewed during working hours) Written comments regarding disposal of said property may be submitted to the City Clerk's Office on or before time of public headng. At said time and place of public hearing, all interested citizens and parties will be given an opportunity to be heard for or against disposing of said property. Any visual or hearing impaired persons needing special assistance or persons with special accessibility needs should contact the City Clerk's Office at (563) 589-4120 or TDD (563) 690-6678 at least 48 hours prior to the meeting. Published by order of the City Council given on the 16th day of September, 2002. Jeanne F. Schneider, CMC City Clerk It 9/27