Lease Ext Jacobsen's Pine St ROE. Marshall Thomas, 1907-1989
Francis J. O'Connor, 1916-1990
ATTORNEYS AT LAW
May 9, 2003
Honorable Terry Duggan
and City Council Members
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
Jacobson's, Inc. Lease with the City of Dubuque; Initial term of September 15, 1985 through September 14,
1995 with three five-year extensions (Pine Street Right-of-Way between 18th and 19th Street)
Dear Honorable Mayor and City Council Members:
The purpose of this letter is to formally request on behalf of Jacobson's, Inc. that the above mentioned Lease
Agreement be extended through September 14, 2005 and to confirm that the five-year option to extend the lease from
September 15, 2005, through September 14, 2010 remains in place subject to the terms and conditions contained in
the original lease.
We are requesting the above formal approval pursuant to the letter we received from Mike Koch dated May 7, 2003.
A copy of Mr. Koch's letter and the original Lease are attached to this letter. If you have any questions, please
contact the undersigned.
Very truly yours,
O'CONNOR & THOMAS, P.C.
John C. O'Connor
JCO:kh
Enclosure
cc: John Shulan
John C. O'Connor I ext. 234 [ joconnor@octhomaslaw.com
DubuqueBuiIding I 700 Locust Street, Suite200 [ P.O. Box599 [ Dubuque, Iowa 52004-0599 I Phone563.557.8400 I Fax563,556.1867
Engineering Division
City Hall
50 West 13th Street
Dubuque, IA 52001-4864
(563) 589-4270 office
(563) 589-4205 fax
May 7, 2003
Mr. John C. O'Connor
Connor & Thomas, PC
Dubuque Building
700 Locust Street, Suite 300
PO Box 599
Dubuque, IA 52004-0599
RE:Jacobson's, lnc. Lease
(Pine Street Right-of-Way Between 18th and 19th Street)
February 14, 2003 Letter
Dear John:
Ordinance 54-85, which you attached to your letter, is the only lease which I am aware
of that was ever entered into between the City and Jacebson's, Inc. in regard to subject
property. The original term of the lease was from September 15, 1985 through
September 14, 1995. The Lessee had the option of extending the lease for three
additional five-year terms after giving notice requesting the extension sixty (60) days
prior to each termination date.
With this in mind, the first lease period would have expired September 14, 1995.
According to the City records available, Jacebson's, Inc., has never requested an
extension of the lease past the first termination date of September 14, 1995.
A letter dated February 20, 2001 was received from Dee A. Runnels of Snyder,
Schwarz, Park & Nelson, PC, attorneys at law in Rock Island, Illinois, advising of
Jacebson's, Inc. desire to continue using the property and to renew the lease. This letter
was a fellow-up to a letter that I had sent to them on February 13, 2001 regarding their
failure to formally extend the lease in the five-year increments as specified. A copy of
my letter to Mr. John Shulan and the response from Snyder, Schwarz, Park & Nelson
are both enclosed for reference.
While there has been a failure of Jacobson's, inc. to formally request extensions of the
lease, they have continued to make payments on the lease in both the base amount and
the cost-of-living adjustment through the last payment of March 23, 2002. It has been
the recent operating policy of the City that in cases where such leases have not formally
been extended but the appropriate lease payments have been made, they are still
considered valid extensions of the lease by virtue of the payment being offered to the
City and acceptance of the payment by the City.
Service People Integrity Responsibility Innovadon Teamwork
Page 2
May 7, 2003
In order to confirm the validity of the lease, I would suggest, however, that Jacobson's,
Inc. write a letter to the City Council requesting a formal extension of the lease through
September 14, 2005. This would place the lease in the approximate mid-point of the
second extension of the lease. Jacobson's should also submit a request to the City
Council sixty (60) days prior to the expiration date of September 14, 2005, requesting
the last allowable extension of the lease through September 14, 2010. Since the original
lease provided for only three additional five-year terms, a new lease would need to be
entered into with the City after September 14, 2010.
As a reminder, the next payment will be due on September 15, 2003. This payment will
be billed to Jacobson's directly after computation of the cost-of-living adjustment to the
base rental amount.
If you have any questions in regard to the above information, please feel free to give me
a call for further clarification.
Sincerely,
Michael A. Koch
Public Works Director
MAK/vjd
cc: Barry Lindahl, Corporation Counsel
Encs.
Resolution No. 272-85
RESOLUTION ACCEPTING AND EXECUTING A
LEASE AGREEMENT WITH JACOBSON'S, INC.
~EAS, Fagle Discount Supermarket is planning for moderm!~tion and
expansion of its store located at 1800 F, lm Street; and
~a~EAS, the owner of the property (Jacobson's, Inc.) desires leasing
Pine Street fram the south property line of Fast 18th Street ~.to the south
property line of East 19th Street for the purposes of accommodating truck
deliveries and employee parking; and
k~, Jacobson's, Inc. is likewise purchasing East 18th Street from
Elm Street to Pine Street to accommodate additional parking and facilitate
delivery of merchandise to the new facility; and
~,~:~.~, the City is reserving unto itself the right for the installa-
tion of utilities and ~l~o provisions for reversion of the lease, in the
· event the leased area is required for roadway purposes; and
W-,~,~AE, pursuant to-a resolution and public notice of a time and place
of hearing, published in the Telesraph Herald, a newspaper of gener~ circu-
lation published in the City of Dubuque, Iowa, on A.u~t 23r 1985 ,
the City Council of the City of Dubuque ~t on Septem~r 3. 1985
at 7:30 p.m. in the Public Library Auditorium, 11th and Locust Street,
Dubuque, Dubuque County, Iowa to consider the proposal for the lease of the
real estate described as Pine Street fram the south property line of Fast
18th Street to the south property line of East 19th Street to Jaoobson's,
Inc.; and
~, the City Council of the City of Dubuque, Iowa overruled any and
all objections, oral or written, tothe proposal to lease the above described
real estate to Jacobson's, Inc.
Section 1. That the lease agreement is hereby accepted and approved.
Section 2. That the Mayor is authorized .and directed to execute the
lease agreement and the City Clerk is hereby directed and authorized to
record a certified copy of this resolution and lease agreement in the
offices of the City A~sessor, the Dubuque County Recorder, and the Dubuque
County Treasurer ..............................
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Passed, approved and adopted this 3rd day of September , 1985.
LEASE - BUSINESS PROPERTY
CITY OF DUBUQUE - JACOBSONS, INC.
This LEASE is made and executed by and between the CITY
OF DUBUQUE, IOWA, a Municipal Corporation, through its City
Council, hereinafter called "LESSOR", and JACOBSONS, INC., an
Iowa Corporation with its principal place of business in Dubuque,
Iowa, hereinafter called, "LESSEE";
WHEREAS, Lessor is owner of a tract of land described as
Pine Street, between the south property line of extended East
18th Street and the south property line of extended East 19th
Street, as shown on the attached plat marked Exhibit "A" and by
reference incorporated herein as though fully set out herein; and
WHEREAS, Lessor and Lessee are desirous of entering into
an agreement whereby Lessor leases to Lessee and Lessee'hires
from Lessor the leased property upon the terms and conditions.
hereinafter set forth;
NOW, TBEREFORE, in-consideration'of the mutual covenants
and agreements of the Lessor and Lessee, each to the other, it is
mutually agreed as follows:
ARTICLE I. TERM OF LEASE.
Lessor hereby leases to Lessee and Lessee hires from
Lessor the leased property for a period of ten (10) years com-
mencing on the 15th day of September, 1985; and ending on the
14th day of September, 1995, with the right to extend the lease
for three (3) additional five (5) year terms. Notice on exten-
sion must be submitted to Lessor sixty (60) days prior to termi-
nation date of the respective period.
ARTICLE II. RENTAL.
The annual base rental (subject to adjustment as herein-
after provided) for-the leased property for the first ten (10)
~ears snail De Two Thousand Dollars ($2,000) per year payable in
advance on the 15th day o~ September, 1955, and on the 15th day
of September o~ each year thereafter during the term of this
lease, or any extension thereof. Commencinq on SeDtember 15.
~9~6, and for each anniversary date thereafter until the original
%erm or any extended term of the lease, the rental shall be
increased as the case may be, in the Revised Consumer Price Index
for all items ("CPI") as published by the U.S. Department of
............ 'Labor, Bureau of Labor Statistics, between the month of
-~September, 19~5, until the month of ~eptember, 1986, an___d eaQh
~ear-thereafter.-~Any additional rental sh~li .b~ ~aid within
.'thirty (30) days following publication of the CPI for the month
-2-
of September. In no event shall the annual rental be reduced
below the base rental. For each five (5) year extension the base
rental shall be ten percent (10%) of the appraised value at the
date of the extension and shall be adjusted annually for "CPI" in
accordance with procedures outilined in the first ten (10) year
period of this article, by usilng September of the beginning year
of the extension as the base year for computation of the CPI
adjustment.
ARTICLE III. USE OF PREMISES.
Tenant covenants and agrees during the term of this
lease to use and occupy the lelased premises solely for parking of
the tenant or Lucky Stores, Inic. or for ingress and egress needs
of any assignee or sublettee of tenant. Under no circUmstance
shall display signs be installed or permitted. Under no circum-
stances shall a building be constructed thereon. There is an
understanding that there is presently an encroachment of a
building on the premises from the existing Eagle Discount
Supermarket. This loading area has a dimension of 16' x 32'
This extension shall be considered a part of this lease agreement'
and to be subject to all terms of this lease agreement.
ARTICLE. IV. ASSIGNMENT AND SUBLETTING.
Lessee may not assign or sublet the premises or any
portion thereof without first securing the written prior consent
of the Lessor. The LeSsee acknowledges and agrees that the
Lessor, in its sole discretion, may refuse to grant consent to
such assignment or sublease. Merger of the Lessee with some
other corporation, or sale of the majority of the stock of the
Lessee corporation to any other corporation, or consolidation,
shall be deemed an assignment or sublease for the purposes of
this section.
Lessor hereby consents to a subletting of the property
subject to this lease to Lucky Stores, Inc. and to Walser Movers,
Inc. A copy of the Sublease Agreement with Walser Movers, Inc.
is attached hereto and made a part hereof by this reference.
ARTICLE V. QUIET ENJOYMENT.
Landlord covenants that its estate in said premises is
fee title owner; and that the tenant on paying the rent herein
reserved and performing all the agreements by the tenant to be
performed as provided in this lease shall and may peaceably have,
hold and enjoy the demised premises for the term of this lease
free from molestation, eviction or disturbance by the landlord or
any other persons or legal entity whatsoewer.
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ARTICLE VI. INSURANCE.
Lessee, assignee or sublettee shall furnish Lessor wijc~_
copy of policy of insurance written by a company authorized to do
business ~n the State of Iowa and insuring L~ssee, reflecting the
-following coverage with waivers of subrog_ation rights, and D_rJ~
viding ~ha~ ~nere snail'be no cancellation or change in the
potlcy until Lessor shall have been ~iven ten (10) days prior
written notice thereof:
(a)
(b)
(¢)
Workmen's Compensation Insurance.
Automobile Liability Insurance~with ~I00,000/
~00r000 bodily injury limits and $100.000
damage limits.
Comprehensive General Liability Insurance with at
least $1,000,000 bodily injury limits and $100r000
property damage limits.
ARTICLE VII. PAYMENT OF RENTS.
Ail rents due and .payable hereunder shall be delivered
to Lessor at its office in Dubuque, Iowa, on or before the due
date specified herein.
ARTICLE VIII. DEFAULT.
If Lessee shall make default in the payment of the
rentals hereunder, or any part thereof, or shall make default in
the performance of any of the other covenants herein contained,
and such default shall continue for a period of thirty (30) days
after written notice thereof, specifying the default complained
of, mailed to Lessee by United States certified mail, return
receipt requested, then it shall be lawful for Lessor, at its
election, to declare the term of this lease ended and to re-enter
upon the leased property, with or without process of law, and to
expel and remove Lessee, or any person or persons in or upon the
same, using such force as may be necessary under the circum-
stances; and if at any time, by reason of such default of the
Lessee and the continuance thereof for such period of thirty (30)
days after written notice has been given, said term shall be so
ended, Lessee hereby covenants and agrees to surrender and
deliver up the leased property peaceably to the Lessor.
Lessor agrees to g~ve notice-of any default not only to'
Lessee, but to Lucky Stores, Inc. Lucky Stores, Inc. shall have
the right; but not the obligation, to cure any default of Lessee.
The notice to Lucky Stores, Inc. shall be sent to:
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Vice President, Real Estate
P. O. Box 67
Rock Island, Illinois 61204-0667
by certified mail, return receipt requested.
ARTICLE IX. INDEMNITY.
Lessee agrees to indemnify and hold harmless the Lessor
from any and all damages or claims whatsoever, actions or causes
of action in law or equity, or damages or claims for damages to
persons or property by reason of the Lessee's use or misuse of
the demised premises and further agrees to reimburse Lessor for
any and all damages to the premises resulting from the misuse of
the property leased. Lessor agrees to promptly give its notice
of any and all claims and actions, as stated aforesaid, and to
permit Lessee and/or its insurance carrier to investigate and
defend the same.
ARTICLE X. SURRENDER OF PREMISES AT END OF TERM OR
EXTENSION THEREOF.
Tenant agrees that upon the termination of this lease,
or extension thereof, it will surrender, yield up and deliver the
leased premises in good, clean Condition. Tenant shall remove
the parking lot at the option of the City upon surrender of the
premises at end of term or renewal thereof. It is understood and
agreed that any property taxes and/or special assessments which
might be levied against the property as the result of the lease
herein entered into by and between the Lessor and the Lessee,
that said taxes and/or special assessments shall be the respon-
sibility of the tenant.
ARTICLE XI. MAINTENANCE OF PREMISES.
It is agreed and understood by and between the parties
hereto that the tenant shall surface and properly maintain the
Street if used as a parking lot in conformance with all City of
Dubuque regulations.
ARTICLE XII. TERMINATION.
After the initial ten (10) years of this lease, Lessor
may terminate said lease upon thirty (30) days written notice to
Lessee for the purpose of the needs of the City for roadway
purposes. The determination of the efficacy of said purpose
shall rest in the sole discretion of Lessor. Termination of the
lease Would also mean the removal of the extended building on the
leased property as previously described as a loading area which
has the dimension of 16' x 32'
Upon termination for any cause whatsoever, Lessor shall have no
liability for payment or reimbursement of any portion of the cost
of the parking lot improvements or other improvements on leased
property.
ARTICLE XIII. ~TILITY EASEMENTS.
Lessor reserves the right for installation or issuance
of per~it~of all utilities necessary for public good. Cost.of
restoratipn of parking surface shall be at Lessor's expense.
~ IN WITNESS WHEREOF, the parties have hereto set their
hands this 21st day of October 1985.
CITY ~BUQUE, IOW~
ATTE~T..es E. Brady, Mayoy
CITY OF DUBUOUE
EXHIBIT A
JACOBSON'S INC. LEASE