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Gavilon Grain, LLC Lease Agreement - Commercial Street_HearingCity of Dubuque ITEM TITLE: SUMMARY: SUGGESTED DISPOSITION: Copyrighted April 6, 2020 Public Hearings # 3. Gavilon Grain, LLC Lease Agreement - Commercial Street (aka East 7th Street) Property Proof of publication on notice of public hearing to consider approval of a Lease Agreement with Gavilon Grain, LLC for the Commercial Street (Seventh Street Lease), which will replace the 1971 Lease Agreement, and the City Manager recommending approval. RESOLUTION Disposing of an interest in real property by Lease Agreement between the City of Dubuque, Iowa and Gavilon Grain, LLC - Commercial Street (Seventh Street) Lease Suggested Disposition: Receive and File; Adopt Resolution(s) ATTACHMENTS: Description Gavilon Industrial Riverfront Leases-MVM August 16, 2016 Riverfront Leases Information Gavilon Lease Recommendation from Engineering Supporting Documents to Steve Sampson Brown Memo-1 Supporting Documents to Steve Sampson Brown Memo--2 Supporting Documents to Steve Sampson Brown Memo-3 Supporting Documents to Steve Sampson Brown Memo-4 Supporting Documents to Steve Sampson Brown Memo-5 Staff Memo Resolution Disposing - Commercial-7th Street Gavilon - Commercial Street Lease (Partially Executed) Type Staff Memo Supporting Documentation Staff Memo Supporting Documentation Supporting Documentation Supporting Documentation Supporting Documentation Supporting Documentation Staff Memo Resolutions Supporting Documentation Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Gavilon Industrial Riverfront Leases DATE: April 2, 2020 Dubuque kitting AINUmerip City 11111, 2007.2012.2013 2017*2019 The City owns approximately 65 acres of prime riverfront industrial property, protected by a levee, with existing barge -docking facilities on the Mississippi River available for private industrial use. The City uses a small part of this to off load and store road salt to treat streets in the winter and to sell to our local government partners. Having this site allows the City to buy salt in bulk and save thousands of dollars a year in salt costs and avoid ever running out of salt in a bad winter. These properties are a limited resource that offers direct access to multi -modal transport methods, including: 1. Three rail lines, with a switching yard within one mile; 2. Existing docking and loading facilities for barges; 3. Four 4-lane highways; and 4. Mississippi River Bridge Crossings into Illinois and Wisconsin, two for vehicles and one for trains. In previous discussions with the Corps of Engineers, the U.S. Fish and Wildlife Service and the Iowa Department of Natural Resources, the City has been told that if a company could find a similar river accessible site conducive to industrial use it would take about 10 years to go through the environmental permitting process and would need to invest well over $20 million to make the site work. These agencies stressed the point, if a site could be found. Using barges and trains is very efficient. One truck trailer can carry 25 tons of product. One rail car can carry 110 tons. One barge can carry 1,750 tons. Relating this to transportation cost one barge equals, 16 rail cars and 70 truck trailers. That creates a great deal of value for the City industrial riverfront sites. In the 1950's and 1960's, the City Dock Commission had full authority over leases for City -owned riverfront property and executed leases for between 50 and 100 years at below market rate with no escalation clauses to spur economic development. The 50-year leases are now coming due. The Dock Commission no longer exists and the City land leases are now considered by the City Council. Gavilon currently leases property from the City of Dubuque at four locations along the 12th Street Peninsula industrial harbor area. In 2013, two of Gavilon's expiring leases were renegotiated as new lease agreements with new rental rates based on fair market value along with market value wharfage rates. Both of these leases have terms that expire in 25 years (2038). Prior to 2008, the original long-term riverfront lease agreements substantially favored the lease tenants. General terms and conditions of the previous lease agreements required the City to pay property taxes and to pay for dredging of the docks adjacent to the lease sites. Historically dredging costs exceeded $100,000 every few years on average. Considering the costs to administer the lease agreements, in some cases prior to 2008, the City was barely breaking even on certain lease agreements. In 2008 the City Council directed City staff to begin negotiating new lease agreements based on fair market value as the existing long-term industrial leases began to expire. Since 2008, all of the City -owned industrial lease sites have been renegotiated with lease rates based on fair market value and more favorable general terms and conditions, including the elimination of all dredging costs and property tax payments except for two remaining Gavilon sites. Gavilon currently operates two industrial lease sites with older lease agreements. One site is adjacent to the Shot Tower and is currently known as the Freebird II LLC — Lease 2 site [now renamed the Commercial Street (East 7th Street) site]. The current lease agreement for this site was entered into in 1971. The existing agreement will expire on November 30, 2021 after a 50-year period. The current lease site is 11.2 acres and has a rent with no cost of inflation adjustment of $6,792 per year. Under the present agreement, annual wharfage revenues are estimated at $22,000/year. The second industrial lease site is adjacent to Kerper Blvd. and Peosta Channel known as the Freebird II LLC — Lease 3 site (now renamed the Purina Drive Lease). The current lease agreement for this site was entered into in 2002. The existing agreement will expire on November 30, 2022 after a 20-year period. The current lease site is 5.2 acres and has a rent that is adjusted only twice in years 10 and 15 via reappraisal. The current annual rent for this property is $58,000 per year. There are no provisions for wharfage revenue in the existing agreement. The City has been attempting to renegotiate new, fair market value -based agreements with Gavilon for the Commercial Street (aka East Seventh Street) Lease and the Purina Drive Lease sites since 2014. City staff and Gavilon have now completed negotiations regarding these two sites and are recommending approval of new lease agreements. I do not think it should be lost on everyone that Gavilon cooperated in these most recent negotiations and agreed to end their current leases over two years early. This will be very beneficial to the City of Dubuque in these challenging economic times and for this we owe them a debt of gratitude. To coincide with the two new lease agreements, two amendments are proposed for the existing Salt Site and Dove Harbor leases so that the wharfage rates for these two existing sites will match the wharfage rates proposed for the Commercial Street and Purina Drive sites. The bullets below summarize the new terms and conditions negotiated as part of the Commercial Street and Purina Drive leases and with the Dove Harbor and Salt Site lease amendments: 2 COMMERCIAL STREET • Term is July 1, 2020 through June 30, 2048. • Lease area is 8.07 acres with Gavilon having an option to rent an additional 1.13 acres within 6 months following the commencement date of the lease. • Lease rent is $43,279.41/acre or a base rent of $349,264 per year with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon will pay to City an annual docking fee of $19,691 with a CPI adjustment which provides Gavilon with exclusive rights to use the shoreline adjacent to their lease site. • Wharfage rates will be Grain/DDGS/Oilseed $ 0.1000/ton, all other goods $0.2500/ton with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon will completely remove the existing warehouse building on the site by no later than December 31, 2023. • Gavilon has rights to use all railroad tracks in the 12th Street Peninsula area. • Railroad Extensions — Gavilon intends to pay for the upgrade to the railroad track spur lines that serve the 12th Street Peninsula (See Exhibit E). The City will agree to support this work by submitting grant applications and advocating for coordination by the Canadian National Railroad. • Gavilon will install landscaping, flagpoles, and a site fence. • Gavilon will pave all parking areas and drive lanes not later than April 1, 2024. • Contribute to cost of reconstruction of Commercial Street by the lesser of the assessment or $145,000. • Any new buildings constructed on the site will be approved by the City and will be aesthetically pleasing. PURINA DRIVE • Term is July 1, 2020 through June 30, 2048. • Lease area is 4.86 acres • Lease rent is $43,279.41/acre or a base rent of $210,338 per year with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon will pay to City an annual docking fee of $17,094 with a CPI adjustment which provides Gavilon with exclusive rights to use the shoreline adjacent to their lease site. • Wharfage rates will be Grain/DDGS/Oilseed $ 0.1000/ton, all other goods $0.2500/ton with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon has rights to use all railroad tracks in the 12th Street Peninsula area. • Railroad Extensions — Gavilon will pay for railroad track upgrade as noted in the Commercial Street lease agreement. • Gavilon will install landscaping and flagpoles. DOVE HARBOR • The lease amendment provides for a change to the wharfage rates for inbound cargo transferred to the Demised Premises by water, rail or motor vehicle for 3 every ton received at the Demised Premises: (a) $0.1000 per ton for grain, whole cotton seed, and dried distillers grain with solubles; and $0.2500 per ton for all other products including fertilizer, salt, and steel rebar. • The wharfage rate on each lease anniversary date shall adjust by the consumer price index however, the wharfage rate shall not exceed three percent (3%) in any one year. SALT SITE • The lease amendment provides for a change to the wharfage rates for inbound cargo transferred to the Demised Premises by water, rail or motor vehicle for every ton received at the Demised Premises: (a) $0.1000 per ton for grain, whole cotton seed, and dried distillers grain with solubles; and $0.2500 per ton for all other products including fertilizer, salt, and steel rebar. • The wharfage rate on each lease anniversary date shall adjust by the consumer price index however, the wharfage rate shall not exceed three percent (3%) in any one year. The wharfage rate change applied to all four Gavilon lease sites is expected to produce a net increase in wharfage revenue of $77,000 per year. Now that almost all of the City -owned industrial riverfront sites will be leased, the City will have gone from earning about $30,000 a year from the lease of these properties, with substantial offsetting expenses, to earning in 2020 an estimated $2.77 million a year in revenues. I want to thank the policy leadership of the Mayor and City Council through this journey. I also want to thank Senior Counsel Barry Lindahl, City Attorney Crenna Brumwell, Project Manager Steve Sampson Brown, City Engineer Gus Psihoyos, Public Works Director John Klostermann, Economic Development Director Jill Connors and the rest of our team as these leases were negotiated. There is no doubt that Barry put his heart and soul into making these negotiations successful since the beginning about 13 years ago. I concur with the recommendation from Senior Counsel Barry Lindahl and respectfully recommend Mayor and City Council approval. 7' Mic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Barry A. Lindahl, Senior Counsel 4 iftilt44 . IVERFRONT LEASES City of Dubuque Riverfront Lease Revenue 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Total: $1,721,192 Total: $139,485 Total: $2,187,724 FY08 Actual FY15 Actual FY19 Projected The City of Dubuque has been promoting new market -rate leases of more than 60 acres of City -owned property along the Missississippi River since 2008 and the Dubuque City Council identified riverfront leases as a high priority during their annual goal -setting session in 2013. In the 195Os and 6Os, the City Dock Commission leased much of the City's industrial riverfront to businesses using 50-year leases to spur economic development and to preserve jobs by enticing businesses to stay and lease undeveloped, riverfront land at significantly discounted rates. Because there was no floodwall along the river at the time, these properties regularly flooded which also lowered their value. The City was responsible for paying the property taxes on the land and dredging so the businesses had access to the river. The costs to the City to maintain the properties outweighed the revenues they were generating, resulting in financial Iosses.Those long-term leases have been expiring in recent years. New and renegotiated lease agreements finalized in recent years are the culmination of a years -long process guided by a study of best practices in other river towns and negotiations with previous lease -holders. The goal was to preserve as many existing business relationships as possible and increase annual revenue. Seven of 10 leases have been renegotiated with new lease rates and inflation adjustments. Freebird II - Lease 3 Start Date: 12/1/2002 End Date: 11/30/2022 Annual Rent: $57,999.96 Wharfage: $0 Gavilon - Dove Harbor Start Date: 9/1/2013 End Date: 8/31/2038 Annual Rent: $511,047.82 Wharfage: $56,704.89 Dubuque Terminals, Inc - Dove Harbor Start Date: 2/1/2013 End Date: 8/31/2038 Annual Rent: $117,362.75 Wharfage: $0 rxecmraF n hthuque bgtol DUB E 11���r Mnsierpiscewr are Mississippi Freebird II - Lease 2 4 Start Date: 12/1/1971 End Date: 11/30/2021 1 Annual Rent: $6,792.00 Wharfage: $22,167.81 Gavilon - Salt Site Start Date: 9/1/2013 End Date: 8/31/2038 Annual Rent: $250,933.66 Wharfage: $13,890.02 Hodge Transit Warehouse Start Date: 4/28/1969 End Date: 10/31/2018 New End Date: 10/31/2043 Annual Rent: $6,355.31 New Annual Rent: $386,349.17 Wharfage: $0 Flint Hills Resources Pine Bend, LLC Start Date: 3/25/1964 End Date: 3/31/2027 Annual Rent: $649,999.92 Wharfage: $27,937.63 ! 'j14 xi ,,"":IMap.ereated bey ®ty, s Dubuque Masterpiece on the Mississippi TO: Michael Van Milligen — City Manager FROM: Steve Sampson Brown - Project Manager Dubuque biking IIII•Meriea City W1TC.LL RN_ I1:,V 1 I I I I I 2007.2012.2013 2017*2019 SUBJECT: Lease Agreements Between the City of Dubuque and Gavilon Grain, LLC a the Commercial Street and Purina Drive Lease Sites Along with Lease Amendments for the Salt Site and Dove Harbor Locations DATE: April 2, 2020 INTRODUCTION This memorandum provides a description of new lease agreements negotiated with Gavilon Grain, LLC (Gavilon) for the 7th Street/Shot Tower and Purina Drive/Peosta Channel Sites along with lease amendments to the Gavilon Salt Site and Dove Harbor location. BACKGROUND Gavilon currently leases property from the City at four locations along the 12th Street Peninsula industrial harbor area. In 2013 two of Gavilon's expiring leases were renegotiated as new lease agreements with new rental rates based on fair market value along with market value wharfage rates. Both of these leases have terms that expire in 25 years (2038). The attached chart shows the details of the FY21 rent and wharfage projected revenues for the 2013 leases known as the Gavilon-Salt Site and Gavilon- Dove Harbor leases. Prior to 2008, the original long term riverfront lease agreements (see attached chart) substantially favored the lease tenants. General terms and conditions of the previous lease agreements required the City to pay property taxes and to pay for dredging of the docks adjacent to the lease sites. Historically dredging costs exceeded $100,000 every few years on average. Considering the costs to administer the lease agreements, in some cases prior to 2008 the city was barely breaking on even on certain lease agreements. In 2008 the City Council directed city staff to begin negotiating new lease agreements based on fair market value as the existing long-term industrial leases began to expire. Since 2008 all of the city owned industrial lease sites have been renegotiated with lease rates based on fair market value and more favorable general terms and conditions including the elimination of all dredging costs and property tax payments except for two remaining Gavilon sites. DISCUSSION Page 1 of 5 Gavilon currently operates two industrial lease sites with older lease agreement. One site is adjacent to the Shot Tower and is currently known as the Freebird II LLC — Lease 2 site. The current lease agreement for this site was entered into in 1971. The existing agreement will finally expire on November 30, 2021 after a 50 year period. The current lease site is 11.2 acres and has a rent with no cost of inflation adjustment of $6,792 per year. Under the existing agreement wharfage fees are as follows: bulk fluids $0.025 per ton, bulk solids $0.05 per ton, $0.15 per ton packaged goods, and grain is charged at five cents per ton for the first 28,000 tons then four cents per ton for the second 28,000 tons and three cents per ton for any additional tonnage over 56,000 ton. Under the present agreement, annual wharfage revenues are estimated at $22,000/year. The second industrial lease site is adjacent to Kerper Blvd. and Peosta Channel known as the Freebird II LLC — Lease 3 site. The current lease agreement for this site was entered into in 2002. The existing agreement will expired on November 30, 2022 after a 20 year period. The current lease site is 5.2 acres and has a rent that is adjusted only twice in years 10 and 15 via reappraisal. The current annual rent for this property is $58,000 per year. There are no provisions for wharfage revenue in the existing agreement. The City has been attempting to renegotiate new, fair market value based agreements with Gavilon for the Shot Tower and Peosta Channel lease sites since 2014. In the past six months Gavilon has come to the table and negotiate in earnest so new agreements can be finalized and executed. As part of the negotiations the lease agreement for the Shot Tower site has been renamed the Commercial Street (aka EAST Seventh Street) Lease. The lease agreement for the Peosta Channel site has been renamed the Purina Drive Lease. City staff and Gavilon have now completed negotiations regarding these two sites and are recommending approval of new lease agreements. To coincide with the two new lease agreements, two amendments are proposed for the existing Salt Site and Dove Harbor leases so that the wharfage rates for these two existing sites will match the wharfage rates proposed for the Commercial Street and Purina Drive sites. The bullets below summarize the new terms and conditions negotiated as part of the Commercial Street and Purina Drive leases and with the Dove Harbor and Salt Site lease amendments: COMMERCIAL STREET • Term is July 1, 2020 through June 30, 2048. • Lease area is 8.07 acres with Gavilon having an option to rent an additional 1.13 acres within 6 months following the commencement date of the lease. • Lease rent is $43,279.41/acre or a base rent of $349,264 per year with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon will pay to City an annual docking fee of $19,691 with a CPI adjustment which provides Gavilon with exclusive rights to use the shoreline adjacent to their lease site. • Wharfage rates will be Grain/DDGS/Oilseed $ 0.1000/ton, all other goods $0.2500/ton with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. Page 2 of 5 • Gavilon will completely remove the existing warehouse building on the site by no later than December 31, 2023. • Gavilon has rights to use all railroad tracks in the 12 Street Peninsula area. • Railroad Extensions — Gavilon intends to pay for the upgrade the railroad track spur lines that serve the 12th Street Peninsula (See Exhibit E). The City will agree to support this work by submitting grant applications and advocating for coordination by the Canadian National Railroad. • Gavilon will install landscaping, flagpoles, and a site fence. • Gavilon will pave all parking areas and drive lanes not later than April 1, 2024. • Contribute to cost of reconstruction of Commercial Street by the lesser of the assessment or $145,000. • Any new buildings constructed on the site will be approved by the City and will be aesthetically pleasing. PURINA DRIVE • Term is July 1, 2020 through June 30, 2048. • Lease area is 4.86 acres • Lease rent is $43,279.41/acre or a base rent of $210,338 per year with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon will pay to City an annual docking fee of $17,094 with a CPI adjustment which provides Gavilon with exclusive rights to use the shoreline adjacent to their lease site. • Wharfage rates will be Grain/DDGS/Oilseed $ 0.1000/ton, all other goods $0.2500/ton with an annual adjustment equal to the consumer price index, but not to exceed 3.0% per year. • Gavilon has rights to use all railroad tracks in the 12 Street Peninsula area. • Railroad Extensions — Gavilon will pay for railroad track upgrade as noted in the Commercial Street lease agreement. • Gavilon will install landscaping and flagpoles. DOVE HARBOR • The lease amendment provides for a change to the wharfage rates for inbound cargo transferred to the Demised Premises by water, rail or motor vehicle for every ton received at the Demised Premises: (a) $0.1000 per ton for grain, whole cotton seed, and dried distillers grain with solubles; and $0.2500 per ton for all other products including fertilizer, salt, and steel rebar. • The wharfage rate on each lease anniversary date shall adjust by the consumer price index however, the wharfage rate shall not exceed three percent (3%) in any one year. SALT SITE • The lease amendment provides for a change to the wharfage rates for inbound cargo transferred to the Demised Premises by water, rail or motor vehicle for every ton received at the Demised Premises: (a) $0.1000 per ton for grain, whole cotton seed, and dried distillers grain with solubles; and $0.2500 per ton for all other products including fertilizer, salt, and steel rebar. Page 3 of 5 • The wharfage rate on each lease anniversary date shall adjust by the consumer price index however, the wharfage rate shall not exceed three percent (3%) in any one year. The wharfage rate change applied to all four Gavilon lease sites is expected produce a net increase in wharfage revenue of $77,000 per year. ACTION STEP It recommend that the resolutions approving the Lease Agreements for the Commercial Street and Purina Drive leases and the First Amendment to Salt Site and Dove Harbor Lease Agreements be submitted to the City Council for consideration and adoption. Attachment(s) SSB\ssb cc: Crenna Brumwell — City Attorney Barry Lindahl — Senior Counsel Gus Psihoyos — City Engineer Page 4of5 Page 5 of 5 eGeneral Notes X I B I B ....._.„.., ..„_.,,,,.., .„.., ---___________ r i ...r - ,F+T= _ ,ter - ` " , *Not ° "X'T TI ❑ IRA . ,:. - ', .5 coo. 4 _ it ` 7 4 �,+A 1 ,� 13 -"Car :la f II y - — i Hill 632 ET CLR ACK 1 - - - - PROPOSED , FENCE _ 'ti e _! r.• aL 3 SEWER LINE i 'r _ J � L:-,... . — II 1 r , RUMS ENTER AR - �_ __ _ ow IN SCALE y �y TRUCK . _ -- + r r ti F - Ill` K LANE, ,; ,� GRADIfG BUILDI,, J , ovaj a 1 ' ,o- ?lj� ti i kr '� 4 ��9� C ' F e • .' i14 ,e E T' T ❑ t '44 ..k w "' - - :. 1, a _: i .+ , F r _ . '_ y ._ j {` + a ' .14 • F \ No. ii Revision/Issue Dates/ lig' • — a I: r rget r _ � rt ' CP ,.,,,,.,03, .P r1Fs .... , .0. til 1"1111 % ' - ,y� any rrri lea�. urt rImo. . • L • iiiiiri y ;A7. . - f - - Ea-• �le,. Firm Name and Address i ._ 0 - ' M - r �.a _r A ,. r, - k ji Project Name and Address �II� r r °•- ` , �� " .. r • 19 y =, r , :. lat 4 .�� r7 -�� I 5 s le�� r;�'�' it s, N �It �' 11 fik ,: $ ° I� _ Site Modification 7th Street Dubuque, IA Rev - 00 Project Dubuque Remodel Sheet Date 2/18/2020 G 0 l Scale As Noted Gavilon Grain - Commercial Street (a.k.a. E. 7th Street) Exhibit A-1 ♦v•♦v♦v♦�: O t• • C�- ., • MISSISSIPPI RIVER (DOVE HARBOR) • NO MOORING BARGES BEYOND THIS POINT DISCLAIMER: This information was compiled using venous data sources available to andlor maintained by the City of Dubuque (the City). By use of this information, the user acknowledges that, while the City utilizes the most cu rent and ac urele information available, the City does not warrant the accuracy or currency of the information or data contained therein. By use of this information, the user agrees the City is not responsible for the misuse or misinterpretation of any information displayed in this map and the Cry is not liable for any loss, damage, or inconvenience caused as a result of reliance on the information. Fence USAGE Permitted Area Demised Premises Option to Rent A *Subject to Survey Verification created by: TWK 2019-01-25 updated by: TWK 2020-03-16 EXHIBIT E RAIL IMPROVEMENTS ANY%A r.r w... MP NM GIN MIME MIMS 1111111MMO MEM w►+.r.....rrel.rrrr *e•r. ....m.••r.wrr..r•rr Railroad Spur Locations I2th Street Peninsula flrd:6.rtl lu :e Drat ornJ -•�--- Qher Railroad Center ine Direct Twofer & Ladder Trade 'Subject to Survey Verification created bj. TWK 2019-01-02 upt•• ,•h, r�...r.r «r.r+«+..• y-r......r.a...... idSpecial Achievement in GIS 2018 Award Winner DISCLAIMER: This information was compiled using venous data sources available to and%or maintained by the City of Dubuque (0e City). By use of this information, the user acknowledges Ihaf while the City utilizes the most current and accurate infonnalion available, the City does not warrant the accuracy or currency of the information or data contained therein. By use of this information, the user agrees the City is not responsible for the misuse or misinterpretation of any information displayed in 0is map and the City is not liable for any loss, damage, or inconvenience caused as a result of reliance on 0e information. Past & Current Lease Rates MISSISSIPPI RIVER (DOVE HARBOR) 8.5" x 11 Sheet 1 inch = 400 feet 0 200 400 Feet *Subject to Survey Verification created by: TWK 2020-02-26 updated by: swing \Lease Agreementstease Exhibits LOCATION NAME Lease Start Date Year 1 Rent Rent Adjustment Wharfage Term (Years) Lease End Date New Lease Start Date FY21 Projected Rent FY21 Projected Wharfage Lease End Date Term (Years) 1 CURRENT LESSEE Freebird-Lease 3 (Gavilon-Purina Drive) 7/1/2020 $210,337.00 $0.00 6/30/2048 28 FORMER LESSEE Flynn Ready -Mix Concrete 1/1/1959 $2,702.20 No $1,350.00 100 12/31/2058 2 CURRENT LESSEE Gavilon-Salt Site 9/1/2013 $268,142.00 $33,048.00 8/31/2038 25 FORMER LESSEE Dubuque Dock Company 3/15/1960 $2,320.00 No $1,250.00 50 2/28/2010 FORMER LESSEE Dubuque Dock Company 7/15/1961 $1,341.60 No $0.00 48 3/14/2010 3 CURRENT LESSEE Hodge Company 11/1/2018 $360,390.00 $0.00 10/31/2043 25 FORMER LESSEE Hodge Transite 11/1/1968 $4,360.00 1% annually $0.00 50 10/31/2018 4 CURRENT LESSEE Gavilon-Dove Harbor 9/1/2013 $545,603.00 $40,968.00 8/31/2038 25 FORMER LESSEE Thruput Terminals 7/25/1962 $927.50 No $1,200.00 50 7/24/2012 FORMER LESSEE Thruput Terminals Tract AA 1/9/1964 $1,092.00 No $1,000.00 48 7/24/2012 5 CURRENT LESSEE Dubuque Terminals (Newt) 2/1/2013 $123,718.00 $0.00 08.31.2038 25 FORMER LESSEE Thruput Terminals Tract AA1 2/24/1971 $793.50 No $1,100.00 41 7/24/2012 6 CURRENT LESSEE Flint Hills Resources 4/1/2014 $686,850.00 $21,000.00 03.31.2024* 10 FORMER LESSEE Dubuque Oil Terminal Co 4/1/1964 $350.00 No $1,666.00 5 3/31/1969 7 CURRENT LESSEE Freebird-Lease 2 (Gavilon-7th Street) 7/1/2020 $368,955.00 $106,115.00 6/30/2048 28 FORMER LESSEE Swift Agricultural Chemicals 12/1/1971 $6,792.00 No $1,708.00 50 11/30/2021 TOTAL REVENUE $20,678.80 $9,274.00 $29,952.80 $2,563,995.00 $201,131.00 $2,765,126.00 * Lease contains option to extend for 3 years Masterpiece on the Mississippi BARRY A. LINDAHL, ESQ. SENIOR COUNSEL MEMO To: Michael C. Van Milligen City Manager DATE: March 27, 2020 Dubuque berd AII•America City 111111 2007+2012+2013 2017*2019 RE: Resolution Approving the Lease Agreement Between the City of Dubuque and Gavilon Grain, LLC - Commercial Street (Seventh Street Lease) Gavilon Grain, LLC (Gavilon) currently leases property from the City of Dubuque on Commercial Street pursuant to a 1971 Lease Agreement. The City and Gavilon have negotiated a new Lease Agreement which will replace the 1971 Lease Agreement. Significant terms of the new Lease Agreement are as follows: • Current acreage reduced to 8.07 acres effective April 1, 2024 to be used for the handling of bulk commodities such as grain, fertilizer, salt, rebar and other bulk commodities; option to lease one additional acre • Term is July 1, 2020 through June 30, 2048 • Annual rent is $349,264.84 with CIP annual adjustment • Annual docking fee is $19,961.00 with CIP annual adjustment • Wharfage fee for all goods transferred to the lease premises with CIP annual adjustment • Remove existing fertilizer building by December 31, 2023 • Pave areas used for vehicle traffic or parking • Landscaping required along Commercial Street • Right to railroad track usage • Contribute to cost of reconstruction of Commercial Street by the lesser of the assessment or $145,000 I recommend that the attached resolution approving the Lease Agreement be submitted to the City Council for consideration and adoption. BAL:tls Attachment cc: Crenna M. Brumwell, City Attorney Gus Psihoyos, City Engineer OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563) 583-4113 / FAX (563) 583-1040 / EMAIL balesq@cityofdubuque.org Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 RESOLUTION NO. 111-20 DISPOSING OF AN INTEREST IN REAL PROPERTY BY LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND GAVILON GRAIN, LLC - COMMERCIAL STREET (SEVENTH STREET) LEASE WHEREAS, the City of Dubuque, Iowa (City) owns certain property on Commercial Street in the City of Dubuque (the Property); and WHEREAS, City desires to enter into a Lease Agreement with Gavilon Grain, LLC for the Property shown on Exhibit A attached to the Lease Agreement; and WHEREAS, the City Council, pursuant to notice published as required by law, held a public hearing on the proposed disposition of the Property on April 6, 2020, and overruled all objections thereto; and WHEREAS, the City Council finds that it is in the best interest of the City to approve the Lease Agreement and the disposition of the Property. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA THAT: Section 1. The City Council of the City of Dubuque, Iowa approves the Lease Agreement between the City and Gavilon Grain, LLC, disposing of the City's interest in the Property. Section 2. The Mayor is hereby authorized and directed to execute the Lease Agreement on behalf of the City. Section 3. The City Manager is hereby authorized and directed to take such actions as are necessary to carry out the terms of the Lease Agreement. 032720ba1 Passed, approved and adopted this 6th day of April, 2020. Attest: Kevi Firnstahl, City Clerk Roy D. ol, Mayor 2 LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND GAVILON GRAIN, LLC COMMERCIAL STREET (aka EAST SEVENTH STREET) LEASE This Lease Agreement ("Lease") is dated July 1, 2020 between the City of Dubuque, Iowa, an Iowa municipal corporation ("Lessor" or "City"), and Gavilon Grain, LLC, a Delaware limited liability company ("Lessee"). SECTION 1. DEMISE AND TERM. 1.1 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 shown on Exhibit A (the "Demised Premises"), to have and to hold for an initial term commencing as of July 1, 2020, (the "Commencement Date"), and ending at midnight on June 30, 2048 (the "Term"), subject to all of the terms, covenants, conditions and agreements contained herein. On April 1, 2024, the area of the Demised Premises shall automatically be reduced to the area of real property shown on Exhibit A-1. (1) Lessee's use of the areas along the shoreline of the Demised Premises and the City's adjacent property located to the southeast of the Demised Premises, and the channel adjacent thereto, is strictly limited to maneuvering or mooring watercraft or barges and transferring the products permitted in Section 1.5 of this Lease. Lessee may not moor any watercraft or barges in any other area controlled by the City unless otherwise provided in a separate lease or written agreement with the City. Lessee's use of the shoreline along the Demised Premises and the City's adjacent property located to the southeast of the Demised Premises as shown on Exhibit A-1 (the "Option Property") subject to Section 1.1(2), and the channel adjacent to thereto, must not block access to the harbor or unreasonably interfere with the use of any other Lessor -owned site leased by any other tenant, with City's maintenance of the flood wall, or with use of the flood wall for flood fighting purposes. (2) Gavilon may, at its sole option, elect to also lease the Option Property for a cost of $43,279.41 per acre per year ("Option Rent"), by providing written notice to Lessor at any time within the six (6) months following April 1, 2024. In the event Lessee exercises such option the Option Property shall be deemed to be part of the Demised Premises and the annual Rent in Section 2.1 shall be increased by the Option Rent effective on the first day of the month immediately following the date on which Gavilon exercises such option. In the event (i) Gavilon does not choose to exercise its option and (ii) City in its sole discretion determine another use for the Option Property, City may upon three (3) months' written notice to Gavilon restrict, with such restrictions City determines appropriate in its sole 1 discretion, Gavilon's use of the shoreline of the Option Property for mooring of Gavilon's barges. 1.2 Lessee agrees to cooperate with Lessor in surveying and platting the Demised Premises and amending this Lease to include the final legal description; provided, however, that Lessee shall not be required to pay for the cost of any such surveying and platting. 1.3 The Demised Premises is subject to a Lease Agreement between Lessor and Swift Agricultural Chemicals Corporation dated November 29, 1971, as subsequently assigned to The Pillsbury Company, as subsequently assigned to ConAgra Foods, Inc., and as subsequently amended and assigned to Lessee (the "1971 Lease Agreement"). Upon commencement of the Term of this Lease, the 1971 Lease Agreement shall terminate. 1.4 Use of Premises. Lessee acknowledges that the Demised Premises is currently zoned HI Heavy Industrial. Notwithstanding such zoning, Lessee agrees that the Demised Premises shall not be used for any of the following uses: Slaughterhouses or stockyards; Manufacture or processing of the following materials: ammonia or chlorine; Manufacture of acid, lime or lime products, and detergent; Sanitary landfills; Sewage treatment plants; Crematoriums; reduction plants; foundries, forges or smelters; and Junk yards, salvage yards. 1.5 Lessee further agrees that the Demised Premises shall be used only for the handling of bulk commodities (grain, solid or liquid fertilizer, salt, whole cotton seed, oilseeds) and or other bulk commodities, steel rebar, and dried distillers grains with solubles (DDGS), and no other purposes without the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed. 1.6 Lessee may store the permitted products set forth in Section 1.5 outdoors, provided any such outdoor storage shall be in accordance with applicable laws, permits and customary industry practices, including not less than the six (6) foot fencing improvements shown on Exhibit B. 1.7 Storm Sewer Easement. Lessor reserves to itself an easement and the right, at its sole cost and expense, to construct, reconstruct, maintain, operate, repair, and remove through, under and across the Demised Premises an underground storm sewer as shown on Exhibit D. Lessee shall not erect any structure over the storm sewer without obtaining the prior written approval of Lessor, which shall not be unreasonably withheld or delayed. By executing this Lease, Lessor hereby consents to any existing structure now in place and grants Lessee written approval to construct or install the railroad track extensions, roads, flat storage and other New Improvements (defined below) over the storm sewer as shown on Exhibit B attached hereto and made a part hereof, as further set forth in Section 2 3. However, prior to any construction over the storm sewer, Lessee shall provide Lessor with an engineer's report reasonably acceptable to Lessor showing that such construction will not cause any damage to the storm sewer. Lessor agrees to cooperate with Lessee in its preparation of any engineer's report by providing Lessee, upon request, with all available information concerning the storm sewer. Lessee shall be responsible for maintaining any structure constructed over the storm sewer and any damage which to the storm sewer which results from such construction. Lessor, its agents or contractors, shall at all times upon reasonable notice of not less than two (2) weeks to Lessee, or such shorter period of notice as is reasonably possible in the event of an emergency reasonably determined by City, have free access to and egress from and over the Demised Premises to maintain or repair the storm sewer, provided that Lessor shall make all reasonable efforts not to interfere with Lessee's operations on the Demised Premises. In the event any Lessee property or improvements located immediately over the storm sewer must be removed or dismantled to perform any work pursuant to this paragraph, Lessor shall take reasonable measures to prevent damage to such property or improvements, perform its work as quickly as possible to reduce interruptions in Lessee's business, and shall reconstruct the storm sewer in a manner which will support the reconstruction of Lessee's improvements, and following completion of such work, Lessor shall restore and recompact the soil to the level of the property prior to performing such work. Lessor shall not be responsible for any damage to Lessee's property or improvements located directly over the storm sewer caused in the course of Lessor exercising any of its rights pursuant to this paragraph, but shall be responsible for any other damage of injury caused by Lessor exercising its rights pursuant to this paragraph. 1.8 Lessee agrees to cooperate with Lessor and not object to the renaming of Commercial Street as East 7th Street. 1.9 Docking Privilege. City grants unto Lessee the exclusive right to dock its vessels and/or barges, according to the terms and provisions herein, along the shoreline of the Demised Premises and the Option Property, and in the channel adjacent thereto during the Term of the Lease, subject to Section 1.1. (1) Docking Fee; Exclusive Use; Maintenance. (a) Lessee agrees to pay to City an annual fee (the Docking Fee) of $19,691.00, payable in twelve equal monthly payments of $1,640.92, due in advance on the first day of each month during the Term. The Docking Fee shall be adjusted on an annual basis as provided in Sec. 2.2. (b) Lessee shall have the exclusive right to use the mooring dolphins in the channel adjacent to the Demised Premises. (c) Lessee takes said premises in their present condition except for any environmental hazard or condition existing on the channel adjacent to the Demised Premises. 3 (d) City's Duty Of Care And Maintenance. City shall have no duty of care or maintenance, including no duty to dredge; provided, however, that the City will cooperate with Lessee and obtain any permits required for such dredging work to be performed by Lessee or its contractor, and shall coordinate joint contribution from all harbor tenants in the event the harbor required dredging. (e) Lessee's Duty Of Care And Maintenance. Lessee shall at all times during the term of this Lease, at Lessee's own costs and expense, keep and maintain the mooring dolphins adjacent to the Demised Premises and Lessee's owned barges and vessels in good condition and repair. City may, at its discretion, upon reasonable notice to Lessee, conduct an inspection during Lessee's normal business hours and while accompanied by Lessee to determine Lessee's compliance with this Section 1.9. Lessee on a reasonable basis shall remove all dead wood, weeds, trash and debris along the shoreline of the Demised Premises; provided, however, that Lessee shall not be required to perform the same if, in Lessee's reasonable judgment, such maintenance cannot be performed in a safe and reasonable manner. (f) Lessee will make no unlawful use of said premises and agrees to comply with all city ordinances, and the laws of the State of Iowa and the United States. (g) On delivery of possession of the Demised Premises to Lessee, Lessee shall not construct any improvements within the channel adjacent to the Demised Premises except as agreed upon in advance, in writing, by City. City shall have the right in its sole discretion to approve the design, appearance and quality of any such improvements, which approval shall not be unreasonably withheld or delayed. (h) Lessee shall not encumber by mortgage, deed of trust, or other instrument, its interest granted in this Section 1.9 without the prior written consent of Lessor which consent shall not be unreasonably withheld. SECTION 2. RENT, AND OTHER PAYMENTS. 2.1 Rent. Lessee shall pay Lessor, in addition to taxes, fees (including but not limited to storm water fees), rates, charges, levies, assessments, and all other charges required to be paid under this Lease by Lessee, annual rent ("Rent") in the amount of $349,264.84 payable in twelve equal monthly payments of $29,105.40, due in advance on the first day of each month during the Term. Such Rent shall be increased as provided in Section 1.1 in the event Lessee exercises its option on the Option Property. 2.2 Rent Adjustment. The Rent for each year of the Term, beginning on the first anniversary date of the Commencement Date and continuing on each subsequent 4 anniversary date thereof, shall be determined by multiplying the Rent in effect immediately prior to the applicable anniversary of the Commencement Date by the CPI Adjustment (as hereinafter defined) and then adding the resulting product, if positive ("CPI Increase"), to the Rent in effect immediately prior to the applicable anniversary date; provided, however, in no event shall the CPI Increase exceed three percent (3%) of the then -current Rent and provided, further, that in no event shall the Rent for any year be less than the Rent for the immediately preceding year. The "CPI Adjustment" shall be a fraction expressed as a decimal, the numerator of which shall be the Current CPI minus the Prior CPI and the denominator of which is the Prior CPI, or 3% whichever amount is less. The "Current CPI" is the latest CPI published prior to the anniversary date of the lease term. The "Prior CPI" is the CPI published in the immediately preceding calendar year for the same month as the Current CPI. The term "CPI" shall mean the "Consumer Price Index for All Urban Consumers (CPI-U)" published by the Bureau of Labor Statistics of the U.S. Department of Labor, All Items (1982-84=100), U.S. City Average, or any successor index thereto, appropriately adjusted. If the CPI ceases to be published and there is no successor thereto, such other government or nonpartisan index or computation shall be used which would obtain a substantially similar result as if the CPI had not been discontinued. 2.3 Payments to City. All invoice payments required by this Lease shall be made payable to "The City of Dubuque, Iowa" and delivered to the City of Dubuque Finance Department, City Hall. Any payments due not paid in full by the due date shall be subject to the lesser of the maximum interest provided by law or the following rates: • 1 % per month 2.4 Wharfage. (1) Lessee shall pay Lessor for all goods, including liquids, transferred to the Demised Premises by water, rail or motor vehicle for every ton received at the Demised Premises as follows: Grain/DDGS/Oilseeds $ 0.1000/ton All other goods $ 0.2500/ton Lessee shall not be required to pay said fee for Lessor's inbound cargo. (2) Wharfage Adjustment for Section 2.4(1). The wharfage for each year of the Term, beginning on the first anniversary date of the Commencement Date and continuing on each subsequent anniversary date thereof, shall be determined by multiplying the wharfage in effect immediately prior to the applicable anniversary date of the Commencement Date by the CPI Adjustment (as hereinafter defined) and then adding the resulting product, if positive ("CPI Increase"), to the wharfage in effect immediately prior to the applicable anniversary date; provided, however, 5 in no event shall any increase in the wharfage rate exceed three percent (3%) of the then -current wharfage rate and provided, further, that in no event shall the wharfage rate for any year be less than the wharfage rate for the immediately preceding year. The "CPI Adjustment" shall be a fraction expressed as a decimal, the numerator of which shall be the Current CPI minus the Prior CPI and the denominator of which is the Prior CPI, or 3% whichever amount is less. The "Current CPI" is the latest CPI published prior to the anniversary date of the lease term. The "Prior CPI" is the CPI published in the immediately preceding calendar year for the same month as the Current CPI. The term "CPI" shall mean the "Consumer Price Index for All Urban Consumers (CPI-U)" published by the Bureau of Labor Statistics of the U.S. Department of Labor, All Items (1982-84=100), U.S. City Average, or any successor index thereto, appropriately adjusted. If the CPI ceases to be published and there is no successor thereto, such other government or nonpartisan index or computation shall be used which would obtain a substantially similar result as if the CPI had not been discontinued. (3) Tonnage reports shall be provided to Lessor by January 15 of each year for the preceding calendar year with the payment for each year due by no later than February 1 immediately following the end of each such year. SECTION 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 connection with Lessee's business. Title to Lessee's 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 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. Existing Improvements on the Demised Premises as of the commencement of the Term are as follows: Any existing tanks, silos, permanently anchored and installed belt conveying systems or piped conveying systems, hard wired electrical 6 systems, railroad tracks and buildings. Lessee shall not construct any new improvements on the Demised Premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed. By executing this Lease, Lessor hereby grants Lessee written consent, but Lessee is not obligated, to construct or install on the Demised Premises a new shop, rail track, truck scale, grading building, direct transfer structure, fence, trees and other improvements generally as shown on Exhibit B attached hereto and made a part hereof (the "New Improvements"), subject to Secs. 1.7 and 3.4 and in compliance with all applicable requirements of the City of Dubuque Code of Ordinances and which, if constructed, shall be completed on or before April 1, 2024. Lessee may make minor alterations to the design of the New Improvements, provided that any material alterations must be approved by Lessor, which approval shall not be unreasonably withheld, and that in the event such approval is not granted, Lessee shall have the option to terminate this Lease. All Existing Improvements and New Improvements (collectively the "Improvements") on the Demised Premises are and shall be the property of Lessee during the Term of this Lease and no longer. Upon the expiration or 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 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 right, title and interest in or to the Improvements has expired, and that title to the Improvements has vested in Lessor. Lessor reserves the right to require Lessee to remove some or all of the Improvements, which Lessee shall accomplish within 30 days of the expiration of this Lease Agreement, provided that Lessor must provide Lessee written notice of which Improvements must be removed not less than 180 days prior to the expiration of the Lease Term. 3.3 Removal of Existing Building. Lessee shall remove the existing dry fertilizer building on the Demised Premises as shown on Exhibit A by December 31, 2023; provided, however, that the deadline for removing the fertilizer building shall be extended for a reasonable period of time in the event of Force Majeure (defined below). 3.4 Compliance with City Ordinances. Lessee shall comply with all applicable City of Dubuque Code of Ordinances with respect to Lessee's construction or installation of the New Improvements. City shall reasonably assist Lessee in obtaining any necessary approvals regarding the New Improvements. 3.5 Landscaping. (1) No fence shall be installed on the Demised Premises without the approval of Lessor, which consent shall not be unreasonably withheld; provided, however, that if such fencing is otherwise required by applicable law, rule or regulation, 7 Lessee may install such fencing without Lessor's consent. (2) Lessee shall, in connection with its installation of the New Improvements, install landscaping in the areas identified on Exhibit B substantially similar to the landscaping shown on Exhibit C. Lessee shall maintain all landscaping on the Demised Premises during the Term of this Lease. 3.6 Flagpoles. Lessee shall, in connection with its installation of the New Improvements, construct on the Demised Premises in the location shown on Exhibit B not less than three (3) 35-foot lighted flag poles, one of which shall display a minimum 5-foot by 8-foot official flag of the City of Dubuque, which official flag Lessor shall provide to Lessee. All flags shall be maintained in a state of good repair at all times and replaced at least every six months. 3.7 Railroad Extensions. (1) Lessee shall have the exclusive right (subject to this paragraph) to use the Lessor owned railroad spur track connecting to the Demised Premises and located off of the Demised Premises shown in yellow on Exhibit E (the "Lessor Track"). Lessor hereby grants Lessee written consent, but Lessee is not obligated, to construct and install the railroad improvements to the Lessor Track shown on Exhibit E (the "Rail Improvements") attached hereto incorporated herein. Lessor shall upon the request of Lessee, request that the CN Railroad, or other applicable party, reinstall the switch serving the Lessor Track. Lessor and Lessee acknowledge that the estimated cost of the Rail Improvements and the associated materials and equipment is $1,500,000.00 based on the estimate provided by Lessee. If Lessor or East Central Intergovernmental Agency receives a state or federal grant and/or loan to rebuild the Rail Improvements, Lessor or East Central Intergovernmental Agency shall contribute such funds to Lessee for the Rail Improvements, or if Lessor or East Central Intergovernmental Agency is prohibited by such grants or loans from contributing the funds to Lessee, then Lessor or East Central Intergovernmental Agency shall pay such funds to the entity constructing the Rail Improvements, and Lessee shall pay the balance of the costs. Lessor's or East Central Intergovernmental Agency's contribution to the Rail Improvements shall not be due and payable to Lessee until thirty (30) days after the Rail Improvements are completed and fully operational and approved by Lessor in Lessor's sole discretion, which shall not be unreasonably withheld or delayed. Provided the Rail Improvements are completed, Lessee at its expense shall maintain the Lessor Track and Rail Improvements in accordance with all applicable laws governing its use thereof; provided, however, that Lessor and its other tenants at the port shall be permitted to use the Lessor Track and Rail Improvements upon the following conditions: (i) use of the Lessor Track and Rail Improvements by any third parties pursuant to this Section shall not interfere with Lessee's use of the Lessor Track or Rail Improvements, (ii) Lessee shall retain first priority to use the Lessor Track and Rail Improvements, (iii) Lessee may charge Lessor or any such third party a reasonable switching charge or other fee for use of the Lessor Track 8 or Rail Improvements and may require any such third party to sign a reasonable indemnity agreement, and (iv) Lessor shall defend, indemnify and hold harmless Lessee from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including reasonable attorney fees) imposed upon, incurred by or asserted against Lessee in connection with Lessor's use of the Lessor Track or Rail Improvements. Lessee agrees that in moving cars with its own locomotives it shall not unreasonably block any public rail crossing of the Lessor Track (East Seventh Street or East Commercial Street), excepting any blocking of a crossing caused by mechanical breakdown, track or switch icing, derailment or other matter beyond Lessee's reasonable control provided that Lessee take reasonable steps to timely address any such issue. The parties hereto acknowledge and agree that this Section 3.7 is part of the consideration for this Lease, and Lessee, subject to the foregoing, agrees to cooperate with said parties to make such connections to the track of Lessee (2) For any railroad tracks on the Demised Premises shown on Exhibit E existing as of the commencement of this Lease and in the event Lessee installs any track on the Demised Premises (together, the "Demised Premises Tracks"), Lessee at its expense shall maintain the Demised Premises Tracks , including at - grade crossings, in accordance with all applicable laws governing its use thereof. Lessee shall have the exclusive right to use the Demised Premises Tracks, and neither Lessor nor any other tenant shall be permitted to use the Demised Premises Tracks without the prior written authorization of Lessee. 3.8 [Reserved]. 3.9 Commercial Street (aka East 7th Street) Reconstruction. If Lessor reconstructs Commercial Street (aka East 7th Street) during the Term of this Lease, Lessee shall reimburse Lessor the lesser of (i) an amount equal to the assessment or (ii) $145,000.00 increased by the CPI Adjustment which shall be a fraction expressed as a decimal, the numerator of which shall be the CPI as of the date of this Lease and the denominator of which is the CPI as of the date of reconstruction, not to exceed 3 percent per year. All costs related to the removal, repair, or replacement of any railroad track owned by Lessee effected by such reconstruction, including the cost of constructing any street crossing, shall be the sole responsibility of Lessor, and Lessor shall promptly remove, repair, or replace such track and/or construct such new or replacement and crossing. Lessee shall design any railroad tracks constructed or reconstructed by Lessee consistent with City's plans for City's 7th Street Reconstruction, provided that such plans are provided to Lessee in advance of Lessee's construction or reconstruction of any tracks and that City's plans shall not materially alter the grade or elevation of any such track without the prior consent of Lessee. 3.10 Paving. Lessee shall not later than April 1, 2024 pave all areas of the Demised Premises used by Lessee for vehicle traffic and parking. Paving shall include asphalt or concrete. 9 3.11 Dust Mitigation. Lessee shall implement and comply with reasonable policies and procedures designed to mitigate against dust emissions caused by vehicular traffic on the Demised Premises. SECTION 4. ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST. Lessee may not encumber by mortgage, deed of trust or other financial instrument, the Demised Premises without the prior written consent of Lessor which consent shall not be unreasonably withheld. SECTION 5. TAXES. 5.1 Lessee agrees to pay to City as additional rent an amount equal to real estate taxes upon the real estate of the Demised Premises that accrue during the Term of this Lease (including taxes accrued during the Term but not due and payable until after the Term), upon receipt of a statement from City, accompanied with all statements from any other taxing authority verifying the amount of such accrued taxes. 5.2 During the Term of this Lease, Lessee further agrees to pay all other taxes, fees, rates, charges, levies, general assessments and special assessments for which Lessor is entitled to impose under statute or ordinance due to the actions or inactions of Lessee, 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 the real estate of the Demised Premises 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 real estate of the Demised Premises 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 all such taxes, fees, rates, charges, levies and assessments shall be paid by Lessee as they become due and before they become delinquent during the Term hereof. 5.3 Lessee agrees to timely pay all taxes, fees, 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 Demised Premises, during the Term of this Lease. 5.4 Nothing herein shall require Lessee to pay any of Lessor's income taxes, surtaxes, excess profit taxes or any taxes on the rents or other amounts reserved or paid to Lessor hereunder. 5.5 Lessee shall at all times have the right to challenge or contest in good faith, in any proper proceedings, in the name of Lessor if necessary, the amount, valuation, payment or satisfaction of any such taxes, fees, assessments, rates, charges or levies so agreed to be paid by Lessee if the amount, valuation or validity thereof, or the right to assess or levy the same against or collect the same from said Demised Premises or Lessee's improvements, shall be disputed, and Lessor shall provide reasonable cooperation in 10 support of any such challenge or contest by Lessee unless Lessor is the entity imposing such taxes, fees, assessments, rates, charges or levies. Upon the conclusion of any such suit or proceedings Lessee shall promptly pay and satisfy such disputed tax, fee, assessment or other charge as finally determined, together with all expenses, costs and attorneys' fees whatsoever incurred in connection therewith. SECTION 6. REPAIRS. 6.1 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, including all sidewalks, curbs, and all appurtenances upon Demised Premises, and the dolphins and structures in the channel adjacent to and serving the Demised Premises and the Option Property for so long as the Option Property is used by Lessee, in good order, condition and repair, and in a safe, clean and neat condition, casualties and ordinary wear and tear excepted. 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 of a structural nature. Upon reasonable notice to Lessee, Lessor may, at its discretion and at its cost, during Lessee's normal business hours and while accompanied by Lessee, conduct an annual inspection of the Demised Premises to determine Lessee's compliance with this Section 6. 6.2 Except for the storm sewer, levee, and floodwall, Lessor shall have no obligation to Lessee for any maintenance expense of any kind on the Demised Premises, including but not limited to sidewalks, private roads, or railroad tracks. Lessor reserves a right of access to the levee and floodwall at all times with reasonable advance notice to Lessee for Lessor's operation and maintenance of the levee and floodwall, provided that Lessor shall make reasonable efforts not to interfere with Lessee's operations. SECTION 7. ALTERATIONS. Lessee shall not, without Lessor's prior written consent, which consent shall not be unreasonably withheld or delayed, make any alteration, addition, or modification to any improvement on the Demised Premises that exceeds One Hundred Thousand Dollars ($100,000.00) in cost. Any alteration, addition, or modification of less than One Hundred Thousand Dollars ($100,000.00) shall not require Lessor's consent. By executing this Lease, Lessor hereby grants Lessee written consent to construct or modify the Improvements on the Demised Premises described in Section 3 as well as the Rail Improvements, subject to the requirements in Section 3. SECTION 8. COMPLIANCE WITH LAW. 8.1 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 and the Smokefree Air Act, Iowa Code Section 142D.3. 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. 11 8.2 Lessee shall also at all times comply with all regulations governing the use of the USACE Permitted Area shown on Exhibit A. In the event Lessee elects to construct an entrance to the USACE Permitted Area, any such construction shall require the prior written approval of Lessor, which shall not be unreasonably withheld, and the United States Army Corps of Engineers. Lessee shall be solely responsible for the cost of any such entrance. SECTION 9. USE OF DEMISED PREMISES. 9.1 Lessee shall not knowingly use or allow the Demised Premises or any buildings or improvements thereon, to be used or occupied for any unlawful purpose or in violation of any certificate of occupancy. Lessee shall not engage in any act or permit any condition to exist within the Demised Premises or in any improvement thereon, or permit any article to be brought therein, which is inherently dangerous, unless safeguarded as required by law, or which, in law, constitutes a public nuisance, or which makes void or voidable any insurance in force with respect thereto. SECTION 10. PARKING. Lessee shall prohibit its employees from parking in City - owned parking stalls anywhere southwest of the railroad bridge in the Port of Dubuque. SECTION 11. INSURANCE. 11.1 Lessee shall maintain during the Term of this Lease insurance as set forth in the City's Standard Insurance Schedule for Lessees of City Property. The insurance coverage limits in such uniform, standardized schedule may from time to time be reasonably amended. The Insurance Schedule is attached to this Lease as Insurance Schedule A. Lessor shall provide written notice of any rate limit amendment to the Insurance Schedule not less than sixty days prior to the effective date of such amendment. 11.2 Lessee shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the reasonable request of City shall furnish proof of such insurance), 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 the Improvements. The term "replacement value" shall mean the actual replacement cost of the 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 reasonable request of City, but not more frequently than once every three years, and paid for by Lessee. 11.3 Lessee agrees to promptly notify City in the case of damage exceeding $250,000 in amount to, or destruction of, Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance ("Net Proceeds"), shall be paid directly to Lessee, and Lessee, in its sole discretion, may remove or repair, reconstruct, restore, or replace the Improvements to substantially the same or an improved condition 12 or value as they existed prior to the event causing such damage subject to the requirements of the City of Dubuque Code of Ordinances and, to the extent necessary to accomplish such repair, reconstruction and restoration, Lessee may apply the Net Proceeds of any insurance relating to such damage received by Lessee to the payment or reimbursement of the costs thereof. Lessee shall notify Lessor of any damage to the flood wall regardless of the amount of such damage. 11.4 Lessee shall complete the removal, replacement, repair, reconstruction or restoration of improvements, whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient. SECTION 12. LESSOR'S WARRANTIES AND REPRESENTATIONS. 12.1 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 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. Lessor otherwise covenants and warrants that it has full authority to grant the rights set forth herein. 12.2 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. SECTION 13. LESSEE'S WARRANTIES AND REPRESENTATION. 13.1 Lessee Compliance With Law. Lessee shall comply with all applicable local, state and federal laws, rules, regulations and permits with regard to the Demised Premises and its use and occupancy of the Demised Premises. 13.2 Environmental Matters. (1) 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 or Lessee's use 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) of Lessor or any third party authorized by Lessor to use the Demised Premises and relating to the use of Demised Premises Tracks by the same. 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 Hazardous Substances which is caused by Lessor or any third party utilizing the Demised Premises Tracks or which pre-exists 13 the date of this Lease; provided, however, that Lessee shall be responsible for pre- existing releases to the extent caused by Lessee. Lessee shall provide reasonable cooperation, assistance, and access to Lessor or other parties investigating and/or responding to a threatened or actual release of a Hazardous Substance. (2) Lessee covenants and agrees to promptly notify Lessor of any release of a Hazardous Substance in, on or about the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises, of which Lessee has actual knowledge. (3) Lessee covenants and agrees to promptly take any and all necessary response required by an environmental regulatory authority having jurisdiction to address any release of a Hazardous Substance for which Lessee is responsible under this Section following advance notice to Lessor. Such response shall include, without limitation, notification to appropriate governmental authorities, as may be required by law. (4) Lessee covenants and agrees to not manufacture, treat or dispose of Hazardous Substances at the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises, or allow the manufacture, treatment, or disposal of Hazardous Substances on the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises. Lessee shall use and store on the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises, only those Hazardous Substances as are associated with its regular business activities, and then only as allowed by law. (5) For the purposes of this 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 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1321), (v) defined as a "hazardous waste" pursuant to § 1004of 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, 42 U.S.0 § 9601 et seq., or (vii) defined 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. SECTION 14. INDEMNIFICATION. 14 14.1 Indemnification of Lessee. To the extent allowed by law, Lessor will defend, 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, injury to or death of persons or loss of or damage to property occurring on or about the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises, resulting from any act or omission of Lessor its agents, employees, lessee's or invitees, (b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease,(c) any breach on the part of Lessor of any warranty or representation contained in Section 12, and (d) any Hazardous Substance on the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises, which is not the responsibility of Lessee pursuant to Section 13.2(1). In case any action, suit or proceeding is brought against Lessee by reason of such occurrence, Lessor will, at Lessor's 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. 14.2 Indemnification of Lessor. Lessee will defend, indemnify and save harmless Lessor 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 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, the shoreline along the Demised Premises or the channel adjacent to 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 (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, (c) any material breach on the part of Lessee of any warranty or representation contained in Section 12, and (d) any Hazardous Substance on the Demised Premises, the shoreline along the Demised Premises or the channel adjacent to the Demised Premises and the area shown on Exhibit E, which is the responsibility of Lessee pursuant to Section 13.2(1). 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. 14.3 Survival. The obligations and liabilities under this Section 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. SECTION 15. CONDEMNATION. 15.1 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 15 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 Demised Premises shall not be of sufficient size to permit Lessee, in Lessee's sole discretion, to operate its business thereon in a manner similar to that prior to such taking. 15.2 Allocation of Award. Any award for such taking of all or substantially all of the Demised Premises shall be paid to the parties hereto in accordance with the following: (1) To Lessor, the amount of the award attributable to the real estate constituting 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 improvements constructed and all other sums not directly attributable to the value of the real estate constituting the Demised Premises; (2) To Lessee, the entire award except that portion allocated to Lessor above. 15.3 Partial Condemnation. (1) 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 15.2, 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 structural 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 Rent shall be reduced in proportion to the area of the Demised Premises taken. (2) 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, Lessee shall be entitled to the entire award for such partial taking. 15.4 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 16 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. SECTION 16. ASSIGNMENT AND SUBLETTING. This Lease may not be assigned by Lessee without the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed, except to a third party acquiring all or substantially all of Lessee's assets related to this Lease. SECTION 17. DEFAULT. 17.1 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 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 all due diligence but in no event longer than one hundred eighty (180) days or in the event such cure relies on the consent or involvement of any regulatory authority, railroad or other third party or is due to Force Majeure such time as a cure can reasonably be effected by promptly initiating and diligently continuing reasonable efforts, 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. 17.2 Lessee's Rights in the Event of Lessor'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) 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 one hundred eighty (180) days, or in the event such cure relies on the consent or involvement of any regulatory authority, railroad or other third party or is due to Force Majeure such time as a cure can reasonably 17 be effected by promptly initiating and diligently continuing reasonable efforts, then and in any such event, Lessee shall have all rights available to it provided by law or equity. SECTION 18. 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 pursuant to 17.1 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. SECTION 19. 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. Notwithstanding the foregoing, Lessor shall have the right upon reasonable notice to Lessee, but not more frequently than once per calendar quarter, to enter the Demised Premised at any reasonable time during Lessee's normal business hours to determine whether Lessee is in compliance with the requirements of this Lease. SECTION 20. 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 to the extent true, 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 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. SECTION 21. WAIVER. No waiver by either party hereto of any breach by the other 18 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 Premises, or to invoke any other appropriate remedy which Lessor may select as herein or by law provided. SECTION 22. SURRENDER. Lessee shall, on the last day of the Term of this Lease or upon any termination of this Lease, surrender and deliver 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 otherwise provided herein) any payment or allowance whatsoever by Lessor on account of or for any buildings and improvements erected or maintained on the Demised Premises at the time of the surrender. Lessee's Trade Fixtures, personal property, equipment, materials 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 expiration of the term of this Lease (not to exceed thirty (30) days) to remove the same. If Lessee fails to remove any Lessee's Trade Fixtures, personal property, equipment, materials or other belongings from the Demised Premises within 30 days of the expiration date of this lease, they will immediately become property of the Lessor. Any costs incurred by Lessor having to remove, relocate, handle, store, sell or dispose of Lessee's items described in this Section shall be paid for by Lessee. SECTION 23. 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 Rent payable hereunder. SECTION 24. NOTICES. 24.1 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, or by UPS or FEDEX with proof of receipt addressed as follows: TO LESSOR: City of Dubuque, Iowa City Manager City Hall 19 50 West 13111 Street Dubuque IA 52001 WITH COPY TO: City Attorney City Hall 50 West 1 3th Street Dubuque IA 52001 TO LESSEE: Gavilon Grain, LLC 1331 Capitol Ave Omaha, NE 68102 Attention: Legal Department WITH COPY TO: Gavilon Grain LLC 505 East 7th Street Dubuque, Iowa 52001 Attn: Delbert Uhlik 24.2 The address 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. SECTION 25. MISCELLANEOUS. 25.1 Time of the Essence. Time is of the essence of this Lease and all of its provisions. 25.2 Governing Law. It is agreed that this Lease shall be governed by, construed and enforced in accordance with the laws of the State of Iowa. 25.3 Paragraph 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. 25.4 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. 25.5 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. 25.6 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 20 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 cause 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 be extended for a period equivalent to the period of such delay. SECTION 26. DISPUTE RESOLUTION. Lessor and Lessee agree that prior to the commencement of any judicial proceeding for any controversy arising out of or relating to the construction or interpretation of this Lease, the parties will engage in mediation in accordance with the Commercial Arbitration Rules of the U. S. Arbitration & Mediation, Midwest ("USA&M") or the American Arbitration Association ("AAA"). The parties shall divide equally all costs of mediation which shall be paid immediately upon billing by the mediation service. SIGNATURE PAGE FOLLOWS 21 LESSOR: CITY OF DUBUQUE, IOWA Attest: By: Kevin S 'Firnstahl, cTty CIe LESSEE: GAVILON GRAIN, LLC Name: 6 Ki V-r4t� Title: �'�`e-4 LIST OF EXHIBITS EXHIBIT A Demised Premises through March 31, 2024 EXHIBIT A-1 Demised Premises beginning April 1, 2024 EXHIBIT B Lessee's New Improvements EXHIBIT C Commercial Street (aka East 7t" Street) Landscaping EXHIBIT D Existing Storm Sewer — Proposed 7th Street Alignment EXHIBIT E Rail Improvements INSURANCE SCHEDULE A • EXHIBIT A DEMISED PREMISES THROUGH MARCH 31, 2024 MISSISSIPPI RIVER ElARBOR} NO MOORING BARGES BEYOND THIS POINT .mws+s-1w carer cn c.w.�. 8.5" z 11" Sheet 1 inch = 260 feel 00 10.0 . 200 Feet A `Subject to Surrey Verification created hy: TWI( 2607-05-24 updated 6y: TWK 202G-02-28 EXHIBIT A-1 DEMISED PREMISES BEGINNING APRIL 1, 2024 • ♦ • h1]SSISSIPPS RIVER c IM1VF. >!AR]it)RI NO MOORING BARGES BEYOND THIS POINT ;4111N. tt1.13 Acres °O*.' ! r++ 'awn �VW ti+ . r f #.•• •• • Q • ++4 ! a 4 SH0 3 •y 'QSED INTERP TIV'S CENTER. ;• •a' : Yqtt ♦ 45a �aowai .up r� I ti•4 h., pva.4w. 31 Vy. . i.-5,dam mal •Tny Wfa•ax xo•nae•r. r. n.wan•a•q,* wa �'N.YM1b-IXTNwl iYmf TI :ryiN Oael.f.1 ryla5au.:h • •n.. i+aw Fence Demised Premaea DACE Permitted Area IM Option m Rent *Subject to Survey Verification created by: TVUK 2019.01-25 updated by: TWK 2020 03-16 EXHIBIT B LESSEE'S NEW IMPROVEMENTS Example Fencing Improvements (Exhibit B Continued) Example Tree Line Improvements (Arborvitae Variety) (Exhibit B Continued) Example of Proposed Shop (Exhibit B Continued) Example of Proposed Direct Transfer Building (Exhibit B Continued) EXHIBIT C COMMERCIAL STREET (aka EAST 7TH STREET) LANDSCAPING Of li '•'. •1''?,t,",11 ■ WININSIN EXHIBIT D EXISTING STORM SEWER - PROPOSED 7TH STREET ALIGNMENT .. a.my Iw.hT a.1ara rr b. •ImY g EMU! 173ACE Reunited Amp prgpacid Ltsse Area OM Arree WE 'Subyect to Survey Verification ptetedhy TW1{ 2(}1B-12-213 updetod br PN% 2019-01-25 MFYti rt�wFn4.4r4M.�Jr31 Fr r.ram nY • -a;rr. rw• mrid NAM 04iVnirlid EXHIBIT E RAIL IMPROVEMENTS Railroad Spur Locations l2th Siree€ Peninsula Raman m be Revered OM, Railroad Crnlerlinr. da. Mid Twofer & Ladder Tracks l r _' ,r: .... • 11:'.3. I •- I 11 11 r1i R I " ubfect to Surrey Verification created by. TWK 2I 19-01-02 updered by INSURANCE SCHEDULE A 1. Gavilon Grain, LLC shall furnish a signed certificate of insurance to the City of Dubuque, Iowa for the coverage required in Exhibit I prior to the lease, license, or permit commencement. All lessees of City property and right of way licensees or permittees shall submit an updated certificate annually. Each certificate shall be prepared on the most current ACORD form approved by the Iowa Insurance Division or an equivalent. Each certificate shall include a statement under Description of Operations as to why the certificate was issued. Eg: Lease Agreement dated as of July 1, 2020. 2. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa and all insurers shall have a rating of A or better in the current A.M. Best's Rating Guide. 3. Each certificate shall be furnished to the Finance Department of the City of Dubuque. 4. The lessee, licensee, or permittee shall be required to carry the minimum coverage/limits, or greater if required by law or other legal agreement, in Exhibit I. Failure to provide the required minimum coverage shall not be deemed a waiver of such requirements by the City of Dubuque. 5. Failure to obtain or maintain the required insurance shall be considered a material breach of the lease, license, or permit. 6. All required endorsements shall be attached to certificate. 7. Whenever a specific ISO form is referenced the current edition of the form must be used unless an equivalent form is approved by the Director of Finance and Budget. The lessee, licensee, or permittee must identify and list in writing all deviations and exclusions from the ISO form. 8. If lessee's, licensee's, or permittee's limits of liability are higher than the required minimum limits then the lessee's, licensee's, or permittee's limits shall be this agreement's required limits. 9. Lessee, licensee, or permittee shall require all subcontractors and sub -subcontractors to obtain and maintain during the performance of work insurance for the coverages described in this Insurance Schedule and shall obtain certificates of insurance from all such subcontractors and sub -subcontractors. Lessee, licensee, or permittee agrees that it shall be liable for the failure of a subcontractor and sub -subcontractor to obtain and maintain such coverage. The City may request a copy of such certificates from the lessee, licensee, or permittee. 10. Lessee, license & permittees shall be responsible for deductibles and self -insured retention. INSURANCE SCHEDULE A (Continued) EXHIBIT I A) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence $1,000,000 Fire Damage Limit (any one occurrence) $50,000 Medical Payments $5,000 1) Coverage shall be written on an occurrence, not claims made, form. The general liability coverage shall be written in accord with ISO form CG 00 01 or business owners form BP 00 02. All deviations from the standard ISO commercial general liability form CG 0001, or Business owners form BP 00 02, shall be clearly identified. 2) Include endorsement indicating that coverage is primary and non-contributory. 3) Include Preservation of Governmental Immunities Endorsement (Sample attached). 4) Include additional insured endorsement for: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees and volunteers. 5) If lessee, licensee, or permittee utilizes Trikkes or Segways in the conduct of business, include an endorsement reflecting that these vehicles are not excluded from Commercial General Liability coverage. 6) Policy shall include Waiver of Right to Recover from Others Endorsement. B) WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory Benefits covering all employees injured on the job by accident or disease as prescribed by Iowa Code Chapter 85. Coverage A Coverage B Statutory —State of Iowa Employers Liability Each Accident Each Employee -Disease Policy Limit -Disease $100,000 $100,000 $500,000 Policy shall include Waiver of Right to Recover from Others endorsement. Coverage B limits shall be greater if required by the umbrella/excess insurer. OR Nonelection of Workers' Compensation or Employers' Liability Coverage under Iowa Code sec. 87.22. Completed form must be attached. INSURANCE SCHEDULE A (Continued) C) POLLUTION LIABILITY Coverage required: X yes no Pollution liability coverage shall be required if the lessee, contracting party, or permittee has any pollution exposure for abatement of hazardous or contaminated materials including, but not limited to, petroleum products, the removal of lead, asbestos, or PCBs. Each occurrence Policy Aggregate $2,000,000 $4,000,000 1) Policy to include job site and transportation coverage. 2) Include additional insured for: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees and volunteers. Use ISO form CG 2010. (Ongoing operations) or its equivalent and CG2037(completed operations) or its equivalent. 3) Include Preservation of Governmental Immunities Endorsement. 4) Provide evidence of coverage for 5 years after completion of project. D) PROPERTY INSURANCE REQUIRED BY LEASE, LICENSE, OR PERMIT X yes no Evidence of property coverage provided: yes Include the City of Dubuque as Lender Loss Payable. E) RIGHT-OF-WAY WORK ONLY: UMBRELLA/EXCESS $1,000,000 X yes no Umbrella/excess liability coverage must be at least following form with the underlying policies included herein. F) FLOOD INSURANCE X yes no Full replacement value. PRESERVATION OF GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmental Immunity. The insurer expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coverage. The insurer further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurer. 4. Non -Denial of Coverage. The insurer shall not deny coverage under this policy and the insurer shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Change in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. SPECIMEN (DEPARTMENT MANAGER: FILL IN ALL BLANKS AND CHECK BOXES) STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Kathy Goetzinger, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald, a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: March 30, 2020, and for which the char is $139.20 Subscribed to before me, a Notar 'ublic in and for Dubuque County, Iowa, this c- day of in , 20 aV.. Notary Public nd for Dubuque County, Iowa. JANET K. PAPE Commission Number 1998E9 My Comm. Exp, DEC 11, 2022 ;„- )14 CITY. OrDUBUQUE, IOWA -OFFICIAL NOTICE cc, ; , PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque; Iowa, will hold a public hea ring on the 6th day ofApril 2020 at p.ni; in the HisinrippederaLBilildinb, 5501Alet 6th Street, second floor Dul?u,ciue, Iowa (and/or by virtual means) at which meeting the City Co).ift oftcpbsg-410 • • ';.a.,isit?9spi.#;ii-ctrei in f.hetpildwitig c21.6.41130 real PralaertY,,kleaefe,..aY49,11'cdc...qir4,..fic... • , ' c' • ' • COMMERCIAL STREET • .• -gichib.litA` , • - • Gavilon Gpitt - ConiiiteiciatStreet • ••hibitA• • /4)1400114 BAROO 11.L-44/0 TIA0 001.NTi; Subjttto 414P;;g471.14c At the meeting,:thee cit9 council will receive oral arid written, comments frorn anyies,identOrpr9pertY,-. owner of said CitYtdihe above action Written comments regarding the above public hearing may be ;•t. ' Submitted to the City Clerk's Office City17iall,c50 W 1 th Street cycler...k,@.cityofd ubuciUe:Org; on or before said time of public hearing. Copies of supporting documents for the public hearings are on file in the City Clerks Office and rnay be viewed during normal working hours. Individuals with limited English ptoficiency, vision,' hearing•Or speech impairments te•OVI ihg special assistance should contact the City Clerk's Office at (563) 589-4100, T. D. (563) 69 0-6678,,ctyc erk@ ; citiofclubugue.org as soon as feasible..Deaf or hard-ohearingindividuals can iseRelaylow_.. a bydialing 71.1, Or (9o) 735-2942. • Dated this 36tii day of March 2020. . ' keviii S. FirnStaill, CityClerk ' . ' - - ' . . ' — - - ' ' . ' • RESOLUTION NO. 98-20 • , • , INTENT TOOISPOSE OF AN INTEREST IN CITY ovrqp11EAL,PROPERTY BY LEASE AGREEMENT ,, • . BETEENTRE'erryHpeCJIBWIU.,,E/ICNAANp.7?A21-V(?r-, G. il1..,JL,....,AC.--rli-771 :,..:.,,... ;:,,':,:-,:'"c.c-c,.. . ,: ,'''-:•'..-,_-, ' ''. STREET (tia'c.: '• • EAST SEVENTH STREET) /;;?: c•c3,cc..:,... ',.,,cc: ,:,.....:,:cf , c vv., z......, . ._ WHEREAS the City of DubLqUeloWth.(05)20ms`he,reaiprggelly:shO.cyn on ExhibitA'ca4aCne'd ,c,....• _, i , hereto: - 'MO •-c;•;•.1'-: ,.. --cfic- .•,c-c-,::,,,,:,,-,,,,c,,,.„,-. . ,. ., ... (the Property) and '.;:,::.,-,,„,, • , ,, , ).AIHERtAS,','Clt-Vaircd DavilPhGrain'., LLC previously !-)i;c41,4to_th:.?i§7l Leas'/?kgir!..1701t'!7-1)e,,, -..?..„,., Property;•and' . . ' -:, WHEREAS; City and GaVIIOnGrain','LLC have.' negotiateda,i;ikkq...40ie-,T,obri:1,t,f,I,,,..7!,,iigAl!ty; attachedlierelgOnd, , WHEREAS4ectitY Council'!is'tentatiyAcleieJyttqd...'lhatit ±.)ycl'i):e:)1•the blcilvilitr,..iktfresViit0:*c)V.1);, toapprouetheLeaseAdreement .. \ Novi4TliERPNFi,, BE IT, RESOLVED RY,TI-I ECITYZOONOL OF THE CITY,1.00,..1)O0U,go , ow4, Secti'o•nA:rfi-ie City of DLit$LIOue;Intehds to.dispose:ofit in ex,es,.,tiln...t..:.ef .,:forego ing 'P 1-iWherii5881edai.•_%:..c,..?q, pi0re40yi00'A6ree,#)"9-qiwitht60,iik:Ccil Grain LLC. c i 'c':C,!:'..cc.1..1c,;',"--:;., ,,....,. •c.'.; ' - - . ...;. c' ::1 ,, SectiOn'21TheCitiClerk:s1561.06Yailithorizedari dd ire 4ectf6CauSelthis Resolutioand'apotieto be ..., published as prescribedby Ic ._. _. '' ia' Code Section 3647 0 4 public ho.r.11199,9 the City'S intent to dispose of aninterest• the foregoing -described real propertyto0,t91,tt?ptiff',.,6t,..ha9of.Ap;r1l.„..-2,.02.,..0;;at 650 In35 the eVerit htia Meeting O'clock -Tan. at the Flisoric FOcipracood!rig,-o vy 111w, , . ....7...,,,,k, ,.-'-'-', , ,riNe .i.'..,„,,,,,-.,-, .:.- r ,i.,:c,ckl,--r-,,c-: •-:--,,,y- Y - -: Attest KOVirl , firristahliCity cle1;1'.cc:',..,:f... c ''. 'f- c c.c,:c-,!ccc-, P&secl,•aplciroyedncicadopted in'iS 254.1 day ot_fifiov-tp39,:..,.: 6 rdeficDi.ibugue-e,clo0a:- 3 V?'..'-' 644t:,-,ticsible 4'.f.Wiilti.cf'",:c ,"-• ;',4'''• Re0.'idol,:i'vlayOr';•1 at ihe,c17iiO4clfeder1 BwlC1j.:ii,..,g)tf?c4gn is . " ' ' • for a .vtiial Meeting and pubilec.,ing0 will b;po e. _. CQVID,1900,sr(itigns ai ...: i„.ti:t1p:,..h/-6,.. e6i)ti 61,..,ricI:ori Piida •_'..-y,-Aj3ill 42020 , at httpsi/AWWW.cityoldUbpque.orgiagenua,,,.. d