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Dubuque Terminals Inc (Newt) LeaseMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Dubuque Terminals, Inc. (Newt) Leases DATE: April 14, 2010 In the 1950's and 1960's, the City of Dubuque 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. The 50 -year leases are now coming due. The Dock Commission no longer exists and City land leases are now considered by the City Council. I am certain the Dock Commission had their legitimate reasons for these leases. However, the City's current position with these leases is that in some years the leases cost the City more than the City receives in revenue (Attachment I). Over the last five years, the total net revenue gain to the City has been approximately $43,000. This industrial riverfront property is approximately 70 acres (Attachment II), which should be generating annual revenues of between two and three million dollars. Remembering that every approximately $200,000 in annual City revenues can reduce the property tax impact on the average homeowner by 1%, this level of new income would have a positive impact on property taxes of between 10% to 15 %. This is especially important since current projections of property increases, without any revenue increase or service cuts, for the next four years are: Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 10.08% 5.50% 10.53% 4.29% Dubuque klitteg AII•AmericaCiiy 2007 Since 2007, the City has been attempting to negotiate lease extensions with some of the existing tenants of the approximately 70 acres of industrial riverfront property as their leases are beginning to expire. In the matter of Agri -Grain Marketing /Cargill, who leases the site in question with this agenda item, the attached July 23, 2008 letter (Attachment III), was sent to them reminding them that their lease will soon expire (July 25, 2012) and that if an extension of their lease was not negotiated by August 13, 2008, that the City would market the property to other parties. No extension of their lease has been negotiated. The City has now negotiated two new leases with Dubuque Terminals, Inc. (Newt Marine). One of the leases is for the Ice Harbor area and is a short-term lease and the other lease is a long -term lease in Dove Harbor. The proposed Ice Harbor lease is for a 4 -year term and the Dove Harbor lease is for 25 years, beginning in 2012, when the Agri -Grain Marketing lease expires. The major provision of the two leases are as follows: Ice Harbor Lease 1.) Rent for harbor frontage and up to 2 acres of water area in the harbor will be $100,000 per year effective July 1, 2010. 2.) Dubuque Terminals, Inc. must vacate the shoreline along the Mississippi River, including removal of all equipment and materials, by June 30, 2010. 3.) Dubuque Terminals, Inc. must vacate the inland leasehold area, including removal of all equipment and materials from the storage yard, and welding shop, upon expiration of the lease on August 31, 2012. 4.) Dubuque Terminals, Inc. must remove 10 bulk liquid tanks by December 31, 2018. 5.) The City agrees to make a five -year low interest loan to Dubuque Terminals, Inc. in an amount not to exceed $50,000 to assist with the costs of such removal. 6.) Both parties agree to cooperate in efforts to jointly market properties in the South Port area. 7.) Dubuque Terminals, Inc. agrees to dismiss the pending appeal of the lawsuit against the City. 8.) This lease is subject to and conditional upon entering into a lease in Dove Harbor (attached). Dove Harbor Lease 1.) The lease is for 6.13 acres of land that is currently leased by Agri -Grain Marketing. 2.) The lease term begins in February 2013 and terminates June 1, 2038. 3.) At the end of each of the first three years, the Dubuque Terminals, Inc. has the option to terminate this lease. 4.) The lease rental rate is $50,000 per acre per year. Portions of the site will be discounted to $10,000, $16,666 and $25,000 per acre because those areas cannot be built upon and some are at times under water. 5.) Dubuque Terminals, Inc. must pay property taxes. 6.) Improvements to the site are at the expense of Dubuque Terminals, Inc. Upon termination of the lease all improvements become the property of the City. 7.) The City agrees to provide 10 -year Tax Increment Financing for qualified leasehold improvements completed within the first five years of the lease. 8.) Dubuque Terminals, Inc. is responsible for landscaping improvements. 9.) The City is responsible for dredging the harbor area one time at the beginning of the lease. Thereafter, all maintenance and dredging is the responsibility of Dubuque Terminals, Inc. 10.) Dubuque Terminals, Inc. agrees that the City will not be charged more than its other customers for the same products provided by Dubuque Terminals, Inc. to its other customers. 11.) Dubuque Terminals, Inc. agrees to dismiss the pending appeal of the lawsuit against the City. 12.) If the City executes a new lease for any industrial property in the Dove Harbor area to any other person for industrial use for rent per acre per year Tess than an amount equal to $50,000 per acre per year, the rent in this agreement shall be reduced to that lesser amount. It is very significant that Dubuque Terminals has agreed to vacate the area south of the Ice Harbor. Since the adoption of the Planned Unit Development in 2003, the City has seen over $300 million in investment in the North Port of Dubuque and anticipates that development to carry over to the South Port. In fact, the City connected the two areas with the construction of Ice Harbor Drive around the west edge of the Ice Harbor. I concur with the recommendation and respectfully request Mayor and City Council approval. h ael C. Van Milligen igen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director Name Land Rental Terms: Saaae Start Yr I 900ZA1 LOOZAI FY 2008 6002AI 0 [OZAI $50,000.00 per acre Agri - Grain Marketing - Lease 1 1862 07 25 Lease & Agreement =$ acre / yr 1971.02.24 Amendment = 10 8 acres leased ; 01000 00 min ss horfage 10.8 1962 Land 03,780.00 511,083.82 03,780.00 00.00 $3,780.00 $540,000.00 Wharfage $11,380.02 $18,321.25 $1,20000 00.00 $1,00000 N/A Alliant Energy 1912 09 08 Agreement = do land Ran Paynxxrt (t): 00 uha fage payment 043 184: Land 90.00 00.00 $0.00 5000 00.00 021,500.00 Wharfage $1,488 17 56,899 23 59,588 90 53,297 48 $3,523.94 N/A Dubuque Terminals, Inc. - Lease 1 Lease & Agreement = $1,31310 per sr 204 1 Land 01,313.00 $1,313.00 01,313.00 $1,313.00 $1,313.00 $102,000.00 Wharfage $0.00 $0.00 00.00 $0.00 $0.00 N/A Dubuque Terminals, Inc. - Lease 2 .96 Lease & Agreement - S6.000 00 per yr +ssharfage 2.76 Land $6,000.00 04,087.37 06,000.00 06,000.00 $-1,000 00 '0340,000.00' Wharfage 01,802.37 01,199.87 $267.29 $272.00 0000 N/A Flint Hills Resources, LP 1961 03..53 Lease & Agreement = 17,00000 +$1,666 00 sharfage due April Excess ssharfage before May 10 19 5 Land 07,000 00 07,000 00 07,000.00 07,000.00 07,000 00 $975,000.00 Wharfage 01,73883 $1,66600 02,94552 01,666.00 01,666 -00 N/A Freebird II, LLC - Lease 1 (formerly ConAgra 1) 196203 11 Lease & Agreement - 53,634.60 +Wharfage (Wharfage credit of $1,250 if paid before 03.15) 8.23 Land $3,634.60 $3,634 60 53,634.60 03,634.60 $2,500.00 0411,500.00 Wharfage 01102458 07,59432 09,210.53 $10.080.19 5',000.00 N/A Freebird II, LLC Lease 2 (fonnerly ConAgra 2) 1971 1129 Lease Agreement =S ,79200 -- rental: plus 01,708 min eharfage I 1 2 Land 06,792 00 $6,792.00 $6.792.00 06,792.00 $6,792.00 0560,000 00 \ harfage $11,024.58 $14,449.84 $12,239.31 $9,059.04 $10,649.18 N/A Freebird II, LLC Lease 3 (formerly ConAgra 3) 2102 09 20 Lease & Agreement =553400.60 per year 5.12 Land 53400 057,85000 053,400.00 $53,400 00 $53,400 00 0256,000 00 Wharfage $0.00 $0.00 90,00 50.00 $0.00 N/A Hodge Company 1969 04 28 Lease &Agreement = 44,19090. 1% per yr (compounded annually; beginning 1973) 8.72 Land 95,810.98 95,869.09 $5,927.78 $5,987 06 06,046.93 $436,000.00 Wharfage $0.00 $0.00 $0.00 $0.00 $0.00 N/A ACTUAL REVENUE SUBTOTAL: 5126,189.13 $14',765.39 S123,298.93 5108,501.37 $108,671.05 Expenses Dredging 834. 02,44 5116,571.40 5111,776,88 537,640.89 8106,509,29 Expenses Property Tax 528,922.00 S32, 736,00 534,102.00 534,060.00 531,418.00 Attachment I Net Income - 51,548.111 422,5 "1.115 53f,.B1111..L5 - 6.32,256.21 • $60,000.00 x 4 acres = $240,000 00+$100,000.00 (small strip access to Ice Harbor) = 0340,000.00 Ii: \SBrown\Leases\Ind. Rtserfront Leases City of Dubuque Old Public Works Garage 5.65 ac Available Hodge Transit Warehouse Co. 8.72 ac 10 -31 -2018 Flint Hill Resources, LP 19.5 ac 3 -31 -2014 Agri -Grain Marketing- Lease 1 10.8 ac 7 -25 -2012 Dubuque Terminals, Inc - Lease 2 2.76 ac 2 -28 -2010 River yNMF Art Pape Transfer, Inc 1.04 ac Annual a k Age s etbT0, m.a 41 ttw.nar 0e 9 -12 -0t, pci a1 20 -0 cidevu se use m €ot 5.12 ac tEVISED 1TTACHMENT II :orrected since ■pril 14, 2010 Memo City of Dubuque Old Publ•c Works Garage 565ac Available Agri [; • ':latket • Lease 1 10.8 ac 7 -25 -2012 Dubuque Termirals, Inc - Lease 2 2.76 at 2 -28 -2010 Freabird II,1•.0 5.12 ac 11- 30-2022 Flint Hill Resources, LP 19.5 ac 3 -31 -2014 Free Glyd 3, LLC 8.23 ac 3 -14 -2010 Dubuque Terminals Inc • Lease 1 204 ac 8 -31 -2012 Freeb!rd II, LLC 11.2 ac 11 -30 -2010 Fc7dge Transit Warehouse Co 8.72 ac 10 -31 -2018 Meng rf..j. ea*A 4flitti■d. 5tiw::y beer nd i L.W. paeea ty.NMa ]ke. _ ii 1. upela nuel amore w the w o n ubuyuwer ▪ r.,,.ph e+ rrtieryh�i„r7 sa Fegl aepii cuo-rn.. aad ipauiy a .. And ac rKt L ee Y w MAW. fora:, tire .. ▪ �l of aU a Mrved • e tbisOata P, Attachment II T HE CITY OF DUB Mttsterpie6•e on the Mississippi Agri -Grain Marketing - Lease 1 Lease Agreement Dubuque ' 11 1 NYC L co 1 • rr ins r f , N 14411k Nit\ �1+ 4 it: ANgummilIOW y • 44111 Ica C a1sF." DISCLAIMER: TMs Inb motion was compiad using the Dubuque Area Gaugropho Information System (DAGtS). Meth Hdudes data created by both me Cdy of Dubuque and Dubuque County. k 1s understood that ohN Ma City of Dubuque and pareasseng agencies Nixed the most current and soarers information avallabb. DAGIS and Ys au poners do not warrant the acare, or arrenry or der Mformaton or dela contea ed herein The C¢y and podwpaS agencies shad not be held fable for any direct IMdect Incidental, mequential. punitive, or specal damages, rhether loreseeabe or unforeseeable. arising out or as authorised or rJoy& dxed use of l ads de or the InabiM to use this data or out of any beach of warranty Meatsaever 90 45 0 1 inch = 200 feet 90 180 Feet W E Map Prepared By KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax: (563) 589-4205 F.\SBrowntLeases\ Agri-Grain Marketing - Lease 1\ Maps and PhotosWgri -Gran Lease D U! THE CIT'OF 110b. uBU Masterpiece Masterpiece on the Mississippi DISCLAIMER This Inbmagon wu umpied urns the Dubuque Area Geographic Inforrroton System Dubuque includes data°mated by both th•Ciy of Dubue aand uqueCou that, . It rs understood t, WIS. De q of Dubuque an d partapattng agencies Nixed the rmst current and sonnets mformatbn available. DAGIS end is supprbs do not xerrent the accuracy or currency of the Mormaton or dela untamed harem. The Cay and pariwpati g egen des she! not be hek fable for any &rect. Indirect Incilerdal. w sequenthl. puritrva, orapecel damages. 3t,ether foreseeable or unforeseeable. arising out of the euerodxed or unauthorized use of this data or the 'nab LM to use this data or out of any breach of warranty whatsoever Alliant Energy Lease Agreement 100 50 1 inch = 200 feet 100 200 Feet WE 6 -lo 0 9 Dubuque pars -t r 11 2 1107 Map Prepared By: KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax (563) 589-4205 F. \SBrowntLeases\ Wliant Energy\Maps and Photos Aliant Energy Lease THE. CITY 01 DUBU?� E Masterpiece i'n 111.' lvfissi.<sippi D ISCLAIMER: This Info mnabon was comyEed using as Dubuque Area Geographic Inforore Eon System (DADIS) Wash mcludes data Dubuque a d Dubuque County It n understood that, of So Gty of Dubuque and partdpabng aye noes unted M rmst cun.nt and accurate ndormatnn availabb. DAGIS and Es',Afars do not warrant the accuracy or currency of the adornalbn or data contained herein. The CM and panedp.bn egena.s shah not be held mbb for any duea Indirect. inc9 ental, nsequentel. ourvaea or special damages. whether lores..ablo or unforeseeable. arming out of the a Wanzed or unauthonaod use of Pis data or the nab My to use tha data or out of any breach of warranty whatsoever Dubuque Terminals, Inc. - Lease 1 Lease Agreement 100 50 1 inch = 200 feet 100 200 Feet N W +E .S g- Dubu '1 2007 Map Prepared By KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax (563) 589 -4205 F. \SBroae LLeases\ Dubuque Terminals Inc\ Maps and Photos \Terminals Lease 1 T1-11. ('IlY 01 DUB A tasfcrpicm on 1he Adi si. <sippi DISCLAIMER: This Information was compiled using the DubuquaArea Geographic Informreton System (DAGIS). which includes data crealad by bth the Cay of Dubpue and Dubuque County It Is understood that, while the city of Dubuque and partldpzbng agencies affixed tie rmst crur<nt and a.anate Information DAGIS and Ss suppliers do not warrant the acaracy or currency of the Information or data conk wed herein. The Coy and particpabrg agencies shall not be held labia for any direct, btlbech Incidental, nsequenlhl, p ica , or special damages, whether foreseeable or unforeseead'e, arising out of the authorized or unauthorized use of this data or the habirty to use this data or out of any beach of warranty whalsc•rar. Dubuque Terminals, Inc. - Lease 2 Lease Agreement 100 50 1 inch = 200 feet 100 200 Feet WE Dubuque katri MArencaLlly 2007 Map Prepared By KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax: (563) 569 -4205 F: \SBrown\Leases\ Dubuque Termnals Inc - Lease 2\ Maps and Photos \Terminals Lease 2 T kit (It' (11 DUBLi A lastcrpitraa on the Mississippi Flint Hill Resources, LP Lease Agreement Dubuque LANA ng 2007 DISCLAIMER: This IrtbmraCOn was m mpiad wing the Dubuque Area Geographic Inform:Mon System (DAGIS), Much includes data created by both lee city of D ubuque and Dubuque County tb understood that while SA Orly of Dubuque and participating agencies tagged the rmst current and accurate Information avai.bb. DAGIS and Ys so pp%rs do not warrant the accuracy or currency of the Yiormatbn or data contained herein. The City end P aAnp.tI g spends shall not be held labe for any dteot Indeed, Incidental. consequentil. puritne, or space! damages. MetMr foreseeable or unforeseeable, arising out of de authonz.d or unauthorized use of gas data or tine lmbl00y to use Ihb data or out of any breach of warranty whatsoever. 100 50 0 1 inch = 200 feet 100 200 Feet WE Map Prepared By: KJZ Crty of Dubuque Engileering Division 50 West 13th Street Dubuque, IA 52001 Phone• (563) 589 -4270 Fax: (563) 589 -4205 F: \SBrownlLeases\ Flint Hils Resources, LP\ Maps and Photos\Fint Hills 7FIF('I1VOF - DUBI. A lnsierpiece on the Mississippi DISCLAIMER: This Ines nvbon was =marled using the Dubuque Area Geographic Intorrn(on System (DAGIS), dated, Fdudes data created by both me Cry of Dubuque and Dubuque County. It is understood that, ¥tine the Cdy d current al Dubuque and partdpadrg agendas utriaed the and acetate Frornvbon available. DAGIS and is suppbers do not warrant tea accuracy or wrrency of the Hormatun or data wnbned Mre4n The Car and pardpating agendas shall not be held table for any drect IMhect Incderdal, consequential, punbr•, or special damages. Mel. loreieeabe or unforeseeable, arm, oM of the authorised or u'aulhoAzed use of iMS dap or the Irabiry to use Ws data or out of any breach of warranty whatsoever. 100 50 0 Freebird - Lease 1 Lease Agreement 1 inch = 200 feet 100 200 Feet WE 4-- '1- ( ) Dubuque Nir�Kauy 'IIII 2007 Map Prepared By: KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589-4270 Fax: (563) 589-4205 F. \SBrownlLeases\ Freebid • Lease 11 Maps and PhotoslFreebird Lease 1 THE CITY Of ( — DU Bt Q AAasfelpiete on the Mississippi Freebird - Lease 2 Lease Agreement • DISCLAIMER: Tints information was mng)ed using to Dubuque Area Geoprapht In/mne. System D s Dubuque and Dubuucw Includes created both toodd the the Ddy or Dubuque ana pa tdpaCCrg agencies Niszed Cu ncst current and accurate iMarnwDn avambla. DAGIS aM is supplots do not warrant Ne accuracy or currency of to r(ormatbn or data Conte itsd herein The Cdy andpanapating agencies sisal not be held tab. for any direct i0eed.Incdeidal. nsequeMil, pu0UUe, or special 0ma2es, %tether loreseeablu or unforeseeable. arising out of the auto need or t nant oozed use of this data or the Irubley to use thu data or out of any breach of wanaray whatsoever 1 inch = 200 feet 100 50 0 100 200 Feet 1 �Q� tWIEL / �. WE Dubuc- Map Prepared By KJZ City of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax• (563) 589 -4205 F.\SBrownlLeases\ Freebid - Lease 2t Maps and PhotoslFreebird Lease 2 1 T HE CITY 0! DUB Masterpiece on the AAississiirpi Freebird - Lease 3 Lease Agreement ( Dubuque 1 � j� 2007 r DISCLAIMER: This Information was candied using the Dubuque Area Geo:RaphM Infosnaaon System (DAG IS). Mach ndudes data creedd by both the City of Duds:, and Dish ague county. P is understood that wale the Cmty of Dubuque and pamtopaing agencies indeed Pte mast current and accurate rnformatian available. DAGIS and Ps suppren do not warrant the accuracy or currency of the eaformatbn or data contained herein The Cely and parl0pett g agencies she. not be had lade for any attract Indirect Matlental, consequential, pleads, or sees damages, whether foreseeable or unforeseeable, arivIg out of the aulhorded or unauthorized use of Res data or the media to use des data or out of any breach of warranty whatsoever. 1 inch = 200 feet 100 50 0 100 200 Feet WE Map Prepared By KJZ Cdy of Dubuque Engineering Division 50 West 13th Street Dubuque, IA 52001 Phone: (563) 589 -4270 Fax (563) 589-4205 F: \SBrovm\Leases\ Freebid - Lease 3\ Maps and Photos \Freebird Lease 3 CHF CIT1 01 r DUBU JE Masterpiece on the klisrissippi Hodge Transit Warehouse Co. Lease Agreement Dubuque lagtd 1 I 34D3 ,. • �. /• ' ,yip 1 �N a OR 1 i � 1 . 0 \ f S ► r i r � J r 4 • ,r 1 DISCLAIMER: This Informabon was mnp$ed uslrp the Dubuque Area Geographe Intorno don System Dubuque and Dubuque Includes data un thatvt le yas dy of Dubuque and parbapating agences W the . r t current and a:aaate bdormatrm available, DAGIS and is suppSors do not xarrant Do accuracy or aurency or the Wormaton or data contained herein. The Cdy and partmpating agencies shall not be held lab). for any dr.d IMHCt. Incidental. nsegwnlhl, puretve, or special damages. whether ror.s.a.bl. or unkhaseeade. arlslrq out or the authorized or uaulhoda.d use of this data or N. bubirty to use this data or out of any Wench of warranty s aIeo.wr. 1 inch = 200 feet 100 50 0 100 200 Feel WE aS. Map Prepared By K. Clty of Dubugl Engineering Divisik 50 West 13th Ste Dubuque, IA 520( Phone: (563) 589 -42. Fax: (563) 589-421 F.1SBIown\Lease Hodge Camper Maps and Photos\Hoch City Manager's Office City Hall 50 West 13th Street Dubuque, Iowa 52001 -4864 (563) 589 -4110 phone (563) 589 -4149 fax (563) 690 -6678 TDD ctymgr @cityofdubuque.org Mr. Fred Oelschlaeger Farm Service Group Leader Cargill Incorporated 3825 Sea Oaks Circle Davenport, IA 52807 Dear Mr. Oelschlaeger, July 23, 2008 THE CITY OF Attachment III The City of Dubuque appreciates that Cargill has been a part of the City's past and we hope that you will be a part of our future. We certainly understand that it might not be possible. You asked about the value of the property in an environment of a declining corn transportation market with the new ethanol plants, and I hope this letter provides you some of that information. That declining market is not what other interested parties have identified as the future of riverfront property. I want to make the City's position clear. Within the August 13, 2008 timeframe, the City wants to give Cargill the first opportunity to lease the property you currently occupy, and is willing to discuss other parcels with you that might be available if another tenant chooses to not extend their lease, and the fact that the City has identified additional areas that are not currently leased. Recently, a nearby industrial parcel without river access sold for $942,623 per acre. However, land value is not the true value of this property. The true value is its access to the river. This year, the City has been visited by businesses from Denmark, Belgium, Holland and Canada, and contacted by a company from Italy about expansion plans. In addition, two of the City's five current tenants are interested in major expansions, and we are not sure of the intent of others. The City has had several discussions with these two. Apparently, the resurgence of the railroad industry is also creating opportunities for vertical integration with barge fleeting and rail. The new investor in the Burlington Northern Santa Fe, and the new railroad player to the Dubuque market, the Canadian Pacific, seem to have identified the marriage of the two most economic shipping methods, barge and rail, as advantageous. Service People Integrity Responsibility Innovation Teamwork Mr. Fred Oelschlaeger July 23, 2008 Page 2 The City has had these approaches without even marketing the property. Should negotiations break down with the current tenants, the City plans trade missions and overtures in China, India and the Middle East. This will be a follow -up to a visit to China last year and a meeting in Washington, D.C. with the U.S. India Business Alliance earlier this year. When we see the over $1 billion investment of ADM in Clinton, with over 1,500 employees, we believe that there will also be interest from other U.S. companies. While we were not previously aware of how world events can have an impact on riverfront property in Dubuque, we have learned that the expansion of the Panama Canal will have significant impact on the property as the price of fuel and the clogged west coast ports, with increasing fees (increased by $400 million in California this year alone), will make the inland transport of imported and exported goods more feasible by barge. One reference piece on the Panama Canal says that canal business will double by 2025, and goes on to say, "Historically, the dry and liquid bulk segments have generated most of the Canal's revenues. Bulk cargo includes dry goods, such as grains (corn, soy and wheat, among others), minerals, fertilizers, coal, and liquid goods, such as chemical products, propane gas, crude oil and oil derivatives. Recently, the containerized cargo segment has replaced the dry bulk segment as the Canal's main income generator, moving it to second place. On the other hand, the vehicle carriers segment has become the third income generator, replacing the liquid bulk segment." The 2007 Water Resource Development Act authorized the Navigation and Ecosystem Sustainability Program of the Upper Mississippi River System. What will be the value of these leases in 10 -15 years when much of the lock system is improved and diesel fuel is costing truckers $10 a gallon, as they are paying in parts of Europe today? Time is of the essence for the City because of all the recent interest in the property and the value of the dollar, giving overseas investors' great financial incentives. Based on current expressions of interest, the City anticipates holding discussions with at least eight other parties, including other agri- businesses, barge firms, railroads and alternative energy providers and manufacturers. Three of these are non -U.S. firms and would be new competitors to the marketplace. We are certain there are others who will be interested, but they are not yet aware of the potential availability of this property. The firms who have approached the City seem to recognize the value of having Mississippi River access, with already permitted docking and loading facilities in a protected harbor and a floodwall, with existing railroad spurs providing service from multiple rail providers (with a rail switching yard within one mile), in a place that has in the last 10 years created ready access to 4 -lane Highways 151, 61 and Highway 20 connecting to Interstates 90/94/35/20/151 /61 /74/88/80 and the Avenue of the Saints Mr. Fred Oelschlaeger July 23, 2008 Page 3 that connects St. Paul, Minnesota, and St. Louis, Missouri. This is accomplished at a crossroads of three rail lines (Burlington Northern Santa Fe, Canadian Pacific and Canadian National) at the point where Illinois, Wisconsin and Iowa all meet with three Mississippi River bridge crossings, including one railroad bridge. The two vehicle bridges are not subject to weight restriction, as are the Savannah, Illinois, Winona, Minnesota, and Prairie du Chien, Wisconsin, bridges. This property is also within several hundred feet of an Alliant Energy electrical generating power plant. Their recognition of the value appears to be combined with the understanding of the possibly 10 -year process that would cost tens of millions of dollars to locate and get permits for a new barge fleeting terminal on the Mississippi River, if it was possible at. all. Even if it were possible, it would probably not be a site with the multi -modal transportation options and flood protections of the Dubuque sites. Dubuque is seeing tremendous growth with approximately 14 million square feet of construction since the year 2000. With the key transportation links that have been put in place since the year 2000, and the fact that there are 67 million people within 500 miles of Dubuque, that growth is expected to continue unabated. We hope Cargill is a part of that growth. As previously mentioned, should Cargill decide not to execute a new lease, we will begin working with Cargill to establish a schedule for environmental testing to begin the process of establishing Cargill's environmental clean -up plan, if one is necessary. I look forward to the expeditious resolution of this lease and the continuation of your corporate presence in Dubuque. MCVM:jh cc: Andy Anderson, Esq., Faegre & Benson, LLP Stuart Ruddy, Esq. Faegre & Benson, LLP Barry Lindahl, City Attorney David Heiar, Economic Development Director Gus Psihoyos, City Engineer Steve Brown, Project Manager Sincerely, 2 t ; 61- A, Michael C. Van Milligen City Manager Masterpiece an the Mississippi TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director SUBJECT: Dubuque Terminals, Inc. (Newt) Leases DATE: April 15, 2010 The major provisions of the two leases are as follows: Dubuque All - America City 2007 INTRODUCTION This memorandum provides a brief description of the attached leases negotiated with Dubuque Terminals, Inc. for the Ice Harbor and Dove Harbor areas. BACKGROUND /DISCUSSION Dubuque Terminals, Inc. has leased land and waterfront areas in the Ice Harbor area. The lease for the waterfront areas expired on February 28, 2010 and the lease on the inland parcel will expire on August 31, 2012 (see attached map). Over the past year, City staff has had several meetings with representatives of Dubuque Terminals, Inc. to negotiate future lease terms, with the understanding that the Ice Harbor will gradually be transforming to a mixed use PUD zoning rather than the previous industrial utilization. A portion of the business use by Dubuque Terminals, Inc. is river dependent. Therefore, the company wants a short term lease to continue operation in the Ice Harbor until other waterfront property becomes available in the Dove Harbor area. The proposed leases would achieve that goal. The proposed Ice Harbor lease is for a 4 year term, with a potential 1 year extension. The Dove Harbor lease will not begin until after the current lease for the property with Agri -Grain Marketing expires in 2012. Ice Harbor 1.) Rent for harbor frontage and up to 2 acres of water area in the harbor will be $100,000 per year effective July 1, 2010. 2.) Dubuque Terminals, Inc. must vacate the shoreline along the Mississippi River, including removal of all equipment and materials, by June 30, 2010. Dubuque Terminals, Inc. will have the right to use shoreline along the Mississippi River when the gates to the Ice Harbor are closed due to flooding at a cost of $350 /day. Any vessels or barges docked may be no more than 2 vessels or barges deep, must at all times be maintained in a good state of repair, and may not be used for the storage of junk or salvage material. 3.) Property taxes will be paid by Dubuque Terminals, Inc. 4.) Improvements to the site become property of the City upon termination of the leases. 5.) Dubuque Terminals, Inc. is responsible for the cost of all improvements to the site. 6.) Dubuque Terminals, Inc. must vacate the inland leasehold area, including removal of all equipment and materials from the storage yard, and welding shop, upon expiration of the lease on August 31, 2012. 7.) Dubuque Terminals, Inc. must remove 10 bulk liquid tanks by December 31, 2018. 8.) The City agrees to make a five -year low interest loan to Dubuque Terminals, Inc. in an amount not to exceed $50,000 to assist with the costs of such removal. 9.) Both parties agree to cooperate in efforts to jointly market properties in the South Port area. 10.) Dubuque Terminals, Inc. agrees to dismiss the pending appeal of the lawsuit against the City. 11.) This lease is subject to and conditional upon entering into a lease in Dove Harbor (attached). 12.) Dubuque Terminals, Inc. agrees not to charge the City more than its other customers for the same products provided to others. Dove Harbor 1.) The lease is for 6.13 acres of land that is currently leased by Agri -Grain Marketing (see attached map). 2.) The lease term begins in February 2013 and terminates June 1, 2038. 3.) At the end of each of the first three years, the Dubuque Terminals, Inc. has the option to terminate this lease. 4.) The lease rental rate is $50,000 per acre per year. Portions of the site will be discounted to $10,000, $16,666 and $25,000 per acre because those areas cannot be built upon and some are at times under water (see attached map). 5.) Dubuque Terminals, Inc. must pay property taxes. 6.) Improvements to the site are at the expense of Dubuque Terminals, Inc. Upon termination of the lease all improvements become the property of the City. 7.) The City agrees to provide 10 -year Tax Increment Financing for qualified leasehold improvements completed within the first five years of the lease. 8.) Dubuque Terminals, Inc. is responsible for landscaping improvements. 9.) The City is responsible for dredging the harbor area, one time at the beginning of the lease. Thereafter, all maintenance and dredging is the responsibility of Dubuque Terminals, Inc. 10.) Dubuque Terminals, Inc. agrees that the City will not be charged more than its other customers for the same products provided by Dubuque Terminals, Inc. to its other customers. 11.) Dubuque Terminals, Inc. agrees to dismiss the pending appeal of the lawsuit against the City. RECOMMENDATION /ACTION STEP I recommend that the Council approve the attached resolutions setting a public hearing on the proposed leases and the disposal of the City's interest in this public property. Attachments F: \USERS \Econ Dev \Newt\20100415 Newt Leases Council Memo.doc Inland Lease r h:l En gl 4eeri ng\Leas eJee me nts\Newtl NewtLeases_SouthPort.m xd o sdf umnplhe Dubuue D u b u q u e Clty o f mo c,rya o moss w,w •upp di oa agene,s shall WI m. IRO •nan y wMhoa - 2311' f TH(i CRY OF DUB Musterpiecc a: the Mississippi ICE HARBOR EXHIBIT A DISCLAIMER: This Information was co mpled uvig the Dubuque Area Geographic Infornabon System h: lEngmeermgLLeaseAgraementsWOterdialNav iLease (DAGIS). which ndudes data created by both the Cly of A9n- GrainLease mud Dubuque and Dubuque County ft is understood Thal, vdvle Mathias EVhOlA ptlf the City of Dubuque and participating agencies ubized the created by 0-MB 2010-02-10. most current and accurate Informaton available, DAGIS and updated 20l0-04-15 mg Es suppliers do not warrant the accuracy or currency of the nformalbn or data contained herein The Coy and paNOdating agencies shat not be held Gable for any direct, Indirect, incidental, consequential. punitle. or special damages. whether foreseeable or unforeseeable, arivng out of the authorized or unauthonzed use of this data or the Inab1M to use this data or out deny breach of warranty whatsoever Area A Area B imi Area C Area D Feet 0 75 150 300 450 600 THE CITY OF DUB Masterpiece o,t the Mississippi RESOLUTION NO. 110-10 INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY OWNED BY THE CITY OF DUBUQUE BY LEASE BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE TERMINALS, INC., AN IOWA CORPORATION (THE DOVE HARBOR LEASE) Whereas, the City of Dubuque, Iowa (City) is the owner of the real property legally described as follows: A part of Government Lot 3 and unplatted slough in Section 19, Township 89 North, Range 3 East of the 5th Principle Meridian all in the City of Dubuque, Dubuque Co., Iowa containing 6.13 acres, more or less, as shown on the attached Exhibit A ; and Whereas, Dubuque Terminals, Inc. desires to lease a part of the property as shown on Exhibit A, attached hereto, for industrial uses and other river related business activities upon the terms set forth in a Lease Agreement which is on file at the office of the City Clerk, City Hall, 13 and Central Avenue, Dubuque, Iowa; and Whereas, City and Dubuque Terminals, Inc. have tentatively agreed to the Lease Agreement, which among other things, provides for a term through June 1, 2038; and Whereas, the City Council believes it is in the best interest of the City of Dubuque to approve the Lease Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City of Dubuque intends to dispose of its interest in the foregoing- described real property by Lease Agreement between City and Dubuque Terminals, Inc. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of the foregoing- described real property by lease, to be held on the 3rd day of May, 2010, at 6:30 o'clock p.m. at the Historic Federal Building, Council Chambers, 350 W. 6 Street, Dubuque, Iowa. Passed, approved and adopted this 19 day of April, 2010. Attest: eanne F. Schneider, CMC, City Clerk D Roy D. Buol, Mayor EXHIBIT A •o f 4' co 0 * Subject to Survey Verification 2010 -04 -15 I DISCLAIMER: Thrsinbrmalion was mmpied h.lEngheermg'lease AgreemenlsTotentlante lease using the Dubuque Area GeographGeographic Inforrnabon System - Agn ease.med (DAGI5), which mdudes data created by both the Cdy of pbthks'E>thibtA.pd/ Dubuque and Dubuque County, It is understood that, while the City of Dubuque and parbopating agencies ull0Zed the created by 001:12010-02-10: mast current and accurate information available, DAGIS and updated 2010-04-15 aQ) Ys supplers do not warrant the accuracy or currency of the mformaten or data oantalned harem The Cdy and parhapabng agencies shall not be hem iabte for any direct, indrect incidental, consequential, punitive, or spec• se l damages, xhether foreseeable or unforeseeable, arising out of the authonzed or unauth onzed use of ells data or the Inabidy to use this data or out of any breach of warranty whatsoever INC Area A c,_„_ Area B img Area C Area D Feet 0 75 150 300 450 600 THE CITY OF DUBUQ Masterpiece on the Mississippi RESOLUTION NO. 111-10 INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY OWNED BY THE CITY OF DUBUQUE BY LEASE BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE TERMINALS, INC., AN IOWA CORPORATION (THE ICE HARBOR LEASE) Whereas, the City of Dubuque, Iowa (City) is the owner of the real property legally shown on Exhibit A; and Whereas, Dubuque Terminals, Inc. desires to lease a part of the property as shown on Exhibit A, attached hereto, for industrial uses and other river related business activities upon the terms set forth in a Lease Agreement which is on file at the office of the City Clerk, City Hall, 13 and Central Avenue, Dubuque, Iowa; and Whereas, City and Dubuque Terminals, Inc. have tentatively agreed to the Lease Agreement, which among other things, provides for a term through June 30, 2014 with a potential one (1) year extension (The Ice Harbor); and Whereas, the City Council believes it is in the best interest of the City of Dubuque to approve the Lease Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City of Dubuque intends to dispose of . its interest in the foregoing- described real property by Lease Agreement between City and Dubuque Terminals, Inc. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of the foregoing- described real property by lease, to be held on the 3rd day of May, 2010, at 6:30 o'clock p.m. at the Historic Federal Building, Council Chambers, 350 W. 6 Street, Dubuque, Iowa. Passed, approved and adopted this 19 day of April, 2010. Attest: Jeanne F. Schneider, CMC, City Clerk oy D. Buol, Mayor EXHIBIT A te ± -�r . ` � . 4 4 _ ..,. LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE TERMINALS, INC. (The Dove Harbor Lease) This Lease Agreement (the Lease) dated for reference purposes this day of , 2010, between the City of Dubuque, Iowa, an Iowa municipal corporation (Lessor), and Dubuque Terminals, Inc., an Iowa corporation (Lessee). SECTION 1. DEMISE AND TERM. 1.1. Demise and Term. In consideration of the rents hereinafter reserved and the terms, covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the real property described as follows: A part of Lot 3 and unplatted slough in Section 19, Township 89 North, Range 3 East of the 5th Principle Meridian all in the City of Dubuque, Dubuque Co., Iowa containing 6.13 acres, more or less, as shown on the attached Exhibit A, subject to surveying and platting of same (the Demised Premises), to have and to hold for an initial term commencing as of the 1 day of February, 2013 (the Commencement Date), and ending at midnight on the 1st day of June, 2038 (the Term), subject to all of the terms, covenants, conditions and agreements contained herein. Lease shall not commence until prior lessee has removed all of their property and debris from the site, and completely relinquished the site back to the city. The initial dredging to be completed by the city, referred to in section 6.4 of this agreement, shall also be completed prior to commencement of this lease. 1.2. Notwithstanding the foregoing, Lessee shall have the option to terminate the Lease effective January 31, 2014, 2015, or 2016 by delivering to Lessor not less than sixty days prior to such termination dates written notice of the exercise of such option. 1.3. Any improvements needed to allow water access to the Demised Premises shall be at the Lessee's expense, except for the initial dredging to be completed by the city as per section 6.4 of this agreement. Lessee agrees that Lessee's use of the Demised Premises shall not interfere with access from Dove Harbor or any other location to the remainder of the parcel or any other parcel by any other person, as may reasonably be determined by Lessor. 1.4. Lessor reserves unto itself and for the benefit of tenants of adjacent property a driveway easement over and across Area D for ingress and egress to adjacent property from and to Kerper Boulevard. Lessee shall at its expense maintain the driveway in a state of good repair during the Lease Term. 041510baI SECTION 2. RENT, TAXES, AND OTHER PAYMENTS. 2.1. Rent. (1) Lessee shall pay Lessor, in addition to taxes, fees, rates, charges, levies, assessments, and all other charges required to be paid under this Lease by Lessee, rent per acre per year, in twelve equal monthly payments commencing on the 1 day of February, 2013, and on the first day of each month thereafter as follows: Area A - $50,000 per acre per year; Area B - $25,000 per acre per year; Area C - $10,000 per acre per year; Area D - $16,666 per acre per year. (2) Rent for each successive year of the Lease Term shall be increased effective July 1 by (i) the increase in the COL as of December 31 of each year compared to the COL as of December 31 of the previous year, or (ii) by 3 %, whichever is greater. (3) Notwithstanding the foregoing, if at any time during the Term, Lessor executed a new lease for any industrial property in the Dove Harbor area to any other person for industrial use for rent per acre per year less than an amount equal to $50,000 per acre per year together with the annual COL adjustment described above, Lessee's rent shall be reduced to such lesser amount of rent per acre per year. This provision shall only apply to the rent per acre per year and shall not include any other term or provision of such leases. 2.2. Taxes. Lessee shall pay all property taxes on the Leased Premises, including the land and any improvements thereon, due and payable during the term of the Lease. 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 Lessee's business. Title to Lessee's trade fixtures (the Trade Fixtures) is and shall be the sole and exclusive property of Lessee during the term of this Lease and shall remain the sole and exclusive property of Lessee after the expiration or termination of this Lease, for whatever reason. Lessor acknowledges and understands that it shall have no right, title or interest in or to Lessee's Trade Fixtures either during the term of this Lease, or thereafter (except as hereinafter provided). Lessor acknowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's Trade Fixtures, to remove them from the Demised Premises, or to 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 2 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. 32. Improvements. (1) On delivery of possession of the Demised Premises to Lessee, Lessee shall not construct any improvements on the Demised Premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld. Upon any termination of this Lease, by reason of any cause whatsoever, if any new Improvements or Improvements existing at the time of the execution of this Lease 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. (2) Lessor agrees to enter into an agreement with Lessee for a 10 -year tax increment financing rebate of property taxes paid by Lessee for qualified leasehold improvements completed within the first 5 years of the Lease in the maximum amount allowed by law. 3.3. Landscaping. (1) Lessee shall install on the Demised Premises not later than one year after the commencement of this Lease decorative wrought -iron fencing and a 10 -foot landscape buffer along all public street frontages with the area within 5 feet on the outside of such fencing planted in annual flowers and the area within 5 feet inside the fencing in planted in trees, annual or perennial flowers, shrubs, and decorative grasses. No fencing or landscaping shall be installed without the prior approval of Lessor and all such fencing and landscaping shall be maintained by Lessee at all times to the satisfaction of Lessor. (2) No other fence shall be installed on the Demised Premises without the approval of Lessor. 3.4. Flagpoles. Lessee shall construct on the Demised Premises in a location approved by Lessor not later than one year after the commencement of this Lease not less than three (3) 35 -foot lighted flag poles, one of which shall display a minimum 5 3 foot by 8 foot official flag of the City of Dubuque. 3.5. Sidewalks. Lessee shall construct on the Demised Premises along all public street frontages not later than one year after the commencement of this Lease sidewalks in accordance with City of Dubuque specifications and of a width of not less than five (5) feet. 3.6. Railroad Extensions. For any railroad tracks existing as of the commencement of this Lease and in the event Lessee installs any track to serve the Demised Premises, Lessee shall construct or maintain such track as will permit Lessor or any other Lessee of Lessor, to connect thereto for the purpose of serving proposed tenants occupying land in the vicinity of the Demised Premises and the parties hereto acknowledge and agree that this 3.6 is part of the consideration for this Lease, and Lessee agrees to cooperate with said parties to make such connections to the track of Lessee. In the event that Lessor should lease additional property to tenant or tenants requiring connection to a track serving Lessee's property, Lessee shall be entitled to charge such tenant making connection to such track a proportionate cost for the track maintenance, based upon the usage by the tenant of Lessee's track calculated on a per railroad car basis. Such costs shall be limited to that part of Lessee's track used by such other tenant or tenants. SECTION 4. ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST. 4.1. Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed of trust or other proper instrument, its leasehold interest and estate in the Demised Premises, together with all Improvements on the Demised Premises, as security for any indebtedness of Lessee, provided that no such encumbrance shall extend beyond the term of this Lease. Lessee shall provide prompt written notice to Lessor of any such encumbrance together with a copy of such encumbrance. In the event of any judicial or nonjudicial foreclosure under any mortgage, deed of trust or other similar instrument made by Lessee covering its leasehold interest in the Demised Premises, Lessor shall, upon such foreclosure or sale, recognize the purchaser thereunder as lessee under this Lease, provided such purchaser expressly agrees in writing to be bound by the terms of this Lease. 4.2. Notice to Holder of Encumbrance; Right of Holder to Cure Lessee's Default. If Lessee shall encumber its leasehold interest and estate in the Demised Premises and if Lessee, or the holder of the indebtedness, its successors and /or assigns (the Holder) secured by the encumbrance shall give notice to Lessor within 30 days thereafter of the existence of the encumbrance and the address of the Holder, then Lessor shall mail or deliver to the Holder, at such address, a duplicate copy of all notices in writing which Lessor may, from time to time, give or serve on Lessee under and pursuant to the terms and provisions of this Lease. The copies shall be mailed or delivered to the Holder at, or near as possible to, the same time the notices are given to or served on Lessee. The Holder may, at its option, at any time before the rights of Lessee shall be terminated as provided in this Lease, pay any of the rents due under this Lease or pay any taxes and 4 assessments, or do any other act or thing required of Lessee by the terms of this Lease, or do any act or thing that may be necessary and proper to be done in the observance of the covenants and conditions of this Lease or to prevent the termination of this Lease; provided, however, that the doing of any act or thing requiring possession of the Demised Premises shall be subject to the further rights of Holder as set forth in 16.2. All payments so made and all things so done and performed by the Holder shall be effective to prevent a foreclosure of the rights of Lessee thereunder as the same would have been if done and performed by Lessee. SECTION 5. TAXES. 5.1. Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real estate of the Demised Premises that become payable during the term hereof and which would become delinquent if not so paid during the term hereof. Lessee shall further provide to Lessor official receipts of the appropriate taxing authority or other evidence satisfactory to Lessor evidencing payment thereof. Lessee shall not be liable to pay delinquent taxes for any time attributable to a prior tenant. 5.2. During the term of this Lease, Lessee further agrees to pay all other taxes, fees, rates, charges, levies and assessments, general and special, of every name, nature and kind, whether now known to the law or hereafter created which may be taxed, charged, assessed, levied or imposed upon said real estate and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, any buildings or improvements thereon which may be taxed, charged, assessed, levied or imposed upon the leasehold estate hereby created and upon the reversionary estate in said real estate during the term hereof and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, and all such other 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 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 reserved to Lessor hereunder. 5.5. Lessee shall at all times have the right to contest in good faith, in any proper proceedings, in the name of Lessor if necessary, the payment or satisfaction of any such taxes, fees, assessments, rates, charges or levies so agreed to be paid by Lessee, if the validity thereof, or the right to assess or levy the same against or collect the same from said Demised Premises or Improvements, shall be disputed. Upon the conclusion of any such suit or proceedings, or not less than three (3) months prior to the date when the right to redeem therefrom expires, whichever will be the earlier, Lessee shall promptly pay and satisfy such disputed tax, 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, and all sidewalks, curbs, and all appurtenances to the Demised Premises, 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, conduct an annual inspection of the Demised Premises to determine Lessee's compliance with this Section 6. 6.2. Lessor shall have the right to require Lessee upon written notice to repair or remove any structure on the Demised Premises which Lessor determines does not comply with the requirements of this Section, and Lessee shall repair or remove, as the notice may require, any such structure within ten days after receipt of such notice. 6.3. Except as provided in Section 6.4, Lessor shall have no obligation to Lessee for any maintenance expense of any kind on the Demised Premises or elsewhere, including but not limited to dredging, public streets, private roads, or railroad tracks. Lessor agrees to cooperate with Lessee to include Lessee's dredging needs in contracts entered into by Lessor for dredging as part of Lessor's other operations but only at Lessee's sole expense. 6.4. Lessor agrees to provide at Lessor's cost a one -time initial dredging to bring the waterfront area to a minimum navigable water depth of 9 feet at normal pool. Such dredging shall be completed prior to the Commencement Date. After such initial dredging, Lessee assumes responsibility for all maintenance dredging. To reduce the costs of the one -time initial dredging, Lessor will consider a predetermined price per cubic yard for dredging and disposal from Sunflower Enterprises. The dredged area shall go from the shoreline at normal pool away from shore until it ties into nine foot navigable water within the harbor. SECTION 7. COMPLIANCE WITH LAW. 7.1. During the term of this Lease, Lessee shall comply with all local, state and federal laws applicable to Lessee's use of the Demised Premises, including but not limited to the Americans with Disabilities Act. 7.2. Lessee shall not commit waste on the Demised Premises except as necessary for its business purposes including the removal or construction of any buildings and Improvements on the Demised Premises, and shall be liable for any damages to or destruction of any buildings or Improvements on the Demised Premises resulting from 6 waste and shall be required to repair or rebuild such buildings or Improvements. Lessee shall not remove any Improvements on the Demised Premises without the prior written approval of Lessor. SECTION 8. ALTERATIONS. Lessee shall not, without Lessor's prior written consent, which consent shall not be unreasonably withheld, make any alteration, addition, or modification to any Improvement on the Demised Premises that exceeds Twenty Five Thousand Dollars ($25,000.00) in cost. Any alteration, addition, or modification of less than Twenty Five Thousand Dollars ($25,000.00) shall not require Lessor's consent. SECTION 9. USE OF DEMISED PREMISES. 9.1. Lessee shall not knowingly use or allow the Demised Premises or any buildings or Improvements thereon or any appurtenances thereto, to be used or occupied for any unlawful purpose or in violation of any certificate of occupancy. Lessee shall not suffer any act to be done or any condition to exist within the Demised Premises or in any Improvement thereon, or permit any article to be brought therein, which is dangerous, unless safeguarded as required by law, or which, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance in force with respect thereto. 9.2. Any vessels or barges docked along the Demised Premises shall at all times be maintained in a good state of repair, and shall not be used for the storage of junk or salvage material. 9.3 Lessee hereby grants access to Lessor to the levee and floodwall at all times for Lessor's operations and maintenance of the levee and floodwall. Lessee acknowledges that there is a clear zone of 20' from the levee and floodwall that must be free from all storage or construction, and Lessee agrees to comply with such free zone requirement at all times. SECTION 10. INSURANCE. 10.1. 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, as such uniform, standardized schedule may from time to time be amended. The current Insurance Schedule is attached to this Lease Agreement as Insurance Schedule A. Lessor shall provide written notice of any amendment to the Insurance Schedule not less than sixty days prior to the effective date of such amendment. 10.2. Upon completion of construction of Improvements, Lessee shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of the payment of premiums on), property insurance against loss and /or damage to Improvements under an insurance policy written on the Special Perils Form in an amount not less than the full insurable replacement value of Improvements, but any such policy may have a deductible amount of not more than $50,000.00. No 7 policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co- insurance provisions or otherwise, without the prior consent thereto in writing by City. The term "replacement value" shall mean the actual replacement cost of Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of City, but not more frequently than once every three years, and paid for by Lessee. 10.3. All insurance required by this Section shall be taken out and maintained in responsible insurance companies selected by Lessee which are authorized under the laws of the State of Iowa to assume the risks covered thereby or Lessee may at its election self- insure itself pursuant to the aforementioned guidelines. Lessee shall deposit annually by not later than July 1 of each year with City a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to Lessee and City at least thirty (30) days before the cancellation or modification becomes effective. Lessee shall furnish City evidence satisfactory to City that the policy has been renewed or replaced by another policy conforming to the provisions of this , or that there is no necessity therefor under the terms hereof. In lieu of separate policies, Lessee may maintain a single policy, or blanket or umbrella policies, or a combination thereof, which provide the total coverage required herein, in which event Lessee shall deposit with City a certificate or certificates of the respective insurers as to the amount of coverage in force upon Improvements, provided, however, the specific limit shall not be impaired. 10.4. Lessee agrees to notify City immediately in the case of damage exceeding $50,000.00 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 shall forthwith repair, reconstruct and restore the Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Lessee shall apply the Net Proceeds of any insurance relating to such damage received by Lessee to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property. 10.5. Lessee shall complete the repair, reconstruction and restoration of Improvements, whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient. SECTION 11. LESSOR'S WARRANTIES AND REPRESENTATIONS. 11.1. Lessor's Representation of Good Title. Lessor covenants and warrants that Lessor is lawfully seized in possession of the Demised Premises, and that it has full right and authority to enter into this Lease for the full term hereof, and covenants and 8 agrees that upon paying the rent provided for herein, and upon Lessee's performing the covenants and agreements of this Lease required to be performed by said Lessee, that it will have, hold and enjoy quiet possession of the Demised Premises. Lessor warrants to Lessee that the Demised Premises are properly zoned for the conduct of the operation of Lessee's business. 11.2. Lessor makes no representations or warranties as to the condition, including environmental condition, of the Demised Premises and Lessee accepts the Demised Premises as is. SECTION 12. LESSEE'S WARRANTIES AND REPRESENTATION. 12.1. 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, occupancy and control of the Demised Premises. 12.2. 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, Lessee's use, occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any Hazardous Substance which leaches or migrates upon the Demised Premises from any property owned by Lessor). Notwithstanding any other provision of 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 which pre- exists the date of this Lease, except as follows: (a) Lessee shall be responsible for known pre- existing releases for which Lessee fails to take due care and adequate precaution and /or for which Lessee's actions or inactions cause a worsening of the release, and (b) Lessee shall provide full cooperation, assistance, and access to Lessor or other parties investigating and /or responding to a threatened or actual release. (2) Lessee covenants and agrees to promptly notify Lessor of any release of Hazardous Substance in, on or about the Demised Premises of which Lessee suspects or has actual knowledge. (3) Lessee covenants and agrees to promptly take any and all necessary and appropriate response to fully address any release of Hazardous Substance for which Lessee is responsible under this Section 12.2(1) following advance notice to Lessor. Such response shall include, without limitation, notification to appropriate governmental authorities, as may be required by law. Lessee shall seek and obtain the concurrence of Lessor as to any such response. Lessee shall respond to such release to the full extent required by law in no event shall Lessee allow limitations or restrictions to be placed on the Demised Premises 9 without the written consent of the Lessor. (4) Lessee covenants and agrees to not manufacture, treat or dispose of Hazardous Substances at the Demised Premises or allow the manufacture, treatment, or disposal of Hazardous Substances on the Demised Premises. Lessee shall use and store on 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 § 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., (vi) defined as a "hazardous substance" pursuant to § 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 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 13. INDEMNIFICATION. 13.1. 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 and resulting from any act or omission of Lessor, (b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease and (c) any breach on the part of Lessor of any warranty or representation contained in Section 11. In case any action, suit or proceeding is brought against Lessee by reason of such occurrence, Lessor will, at Lessor expense and discretion, either defend such action, suit or proceeding, or cause the same to be defended by counsel approved by Lessee, which approval will not be unreasonably withheld. 13.2. Indemnification of Lessor. Lessee will 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 10 expenses) imposed upon or incurred by or asserted against Lessor by reason of (a) any accident, injury to or death of persons or loss of or damage to property occurring on or about the Demised Premises during the term of this Lease and resulting from any negligence of Lessee or anyone claiming by, through or under Lessee during the term of the Lease and (b) any failure on the part of Lessee to perform or comply in any material respect with any of the material terms of this Lease, and (c) any material breach on the part of Lessee of any warranty or representation contained in Section 12. In case any action, suit or proceeding is brought against Lessor by reason of such occurrence, Lessee will, at Lessee's expense and discretion, either defend such action, suit or proceeding, or cause the same to be defended by counsel approved by Lessor, which approval will not be unreasonably withheld. 13.3. Survival. The obligations and liabilities under this 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 14. CONDEMNATION. 14.1. Entire Condemnation. If at any time during the term of this Lease all or substantially all of the Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent 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. 14.2. 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 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 new Improvements constructed by Lessee but not Improvements existing at the commencement of the Term of this Lease, and all other sums not directly attributable to the value of the Land constituting the Demised Premises; (2) To Lessee, the entire award except that portion allocated to Lessor above. 14.3 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 11 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 14.2, and Lessee shall proceed with reasonable diligence to carry out any necessary repair and restoration so that the remaining Improvements and appurtenances shall constitute a complete 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, as provided for in this Section 14.3, Lessee shall be entitled to the entire award for such partial taking. 14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised Premises or the Improvements thereon or the appurtenances thereto shall be taken at any time during the term of this Lease in the exercise of the power of eminent domain by any sovereign, municipality, or other authority, the term of this Lease shall not be reduced or affected in any way, and Lessee shall continue to pay in full the rent, additional rent and other sum or sums of money and charges herein reserved and provided to be paid by Lessee, and the entire award for such temporary taking shall be paid to Lessee. Lessee shall repair and restore any and all damage to the Demised Premises and the Improvements as soon as reasonably practicable after such temporary taking. SECTION 15. 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, provided said third party agrees to comply with the terms and conditions of this Lease. Lessee may sublet parts of the Demised Premises without the prior consent of Lessor provided Lessee's subtenants agree to comply with the applicable terms and conditions of this Lease, and provided further that Lessee shall remain responsible to Lessor for the terms and conditions of this Lease. SECTION 16. DEFAULT. 16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee shall fail or neglect to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, and the default shall continue for a period of thirty (30) days after written notice from Lessor setting forth the nature of 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 12 same with all due diligence, but in no event longer than ninety (90) days), then and in any such event, Lessor shall have the right at its option, on written notice to Lessee, to terminate this Lease. Lessor shall thereafter have the right to enter and take possession of the Demised Premises with process of law and to remove all personal property from the Demised Premises and all persons occupying the Demised Premises and to use all necessary force therefor and in all respects to take the actual, full and exclusive possession of the Demised Premises and every part of the Demised Premises as of Lessor's original estate, without incurring any liability to Lessee or to any persons occupying or using the Demised Premises for any damage caused or sustained by reason of such entry on the Demised Premises or the removal of persons or property from the Demised Premises. 16.2. Rights of Holder of Encumbrance in Event Lessee Defaults. If Lessee fails or neglects to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, the Holder of any indebtedness secured by an encumbrance on the leasehold estate under this Lease shall have thirty (30) days after receipt of written notice from Lessor setting forth the nature of Lessee's default and a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature thereof within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days, within which to endeavor to make good or remove the default or cause for termination of the Lease. All right of Lessor to terminate this Lease on the failure or neglect of Lessee to observe, keep and perform the covenants, terms and conditions of this Lease is, and shall continue to be, at all times prior to payment in full of the indebtedness to the Holder of Lessee, subject to and conditioned on Lessor's having first given the Holder written notice thereof and the Holder having failed to cause the default or cause for termination to be made good or removed within thirty (30) days after receiving written notice of default or cause for termination or within a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature of foreclosure within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days. In the event that the Lease is terminated due to the Lessee's bankruptcy, insolvency or other proceedings, and in the event the Holder has complied with the terms of this Section 16.2, then Lessor at Holder's option, shall enter into a new lease with Holder or the successful bidder at foreclosure on the same terms as this Lease, for the term then remaining, and specifically preserving all unexercised options. 16.3. Lessee's Rights in the Event of Lessee's Default. If Lessor shall fail or neglect to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, and the default shall continue for a period of thirty (30) days after written notice from Lessee setting forth the nature of Lessor's default (it being intended that in connection with a default not susceptible of being cured with diligence within thirty (30) days, the time within which Lessor has to cure the same shall be extended for such period as may be necessary to complete the same with all due diligence, but in no event longer than ninety (90) days), then and in any such event, Lessee shall have all rights available to it provided by law or equity. 13 SECTION 17. RIGHT TO CURE OTHER'S DEFAULTS. Whenever and as often as a party shall fail or neglect to comply with and perform any term, covenant, condition or agreement to be complied with or performed by such party hereunder, then, following thirty (30) days' prior written notice to such defaulting party (or such additional time to cure as may be accorded Lessee pursuant to 16.1 above, but in no event longer than ninety (90) days), the other party, at such other party's option, in addition to all other remedies available to such other party, may perform or cause to be performed such work, labor, services, acts or things, and take such other steps, including entry onto the Demised Premises and the Improvements thereon, as such other party may deem advisable, to comply with and perform any such term, covenant, condition or agreement which is in default, in which event such defaulting party shall reimburse such other party upon demand, and from time to time, for all costs and expenses suffered or incurred by such other party in so complying with or performing such term, covenant, condition or agreement. The commencement of any work or the taking of any other steps or performance of any other act by such other party pursuant to the immediately preceding sentence shall not be deemed to obligate such other party to complete the curing of any term, covenant, condition or agreement which is in default. SECTION 18. QUIET ENJOYMENT. Lessor covenants that at all times during the term of this Lease, so long as Lessee is not in default hereunder, Lessee's quiet enjoyment of the Demised Premises or any part thereof shall not be disturbed by any act of Lessor, or of anyone acting by, through or under Lessor. Notwithstanding the foregoing, Lessor shall have the right upon reasonably notice to Lessee to enter the Demised Premised at any time to determine whether Lessee is in compliance with the requirement of this Lease. SECTION 19. ESTOPPEL CERTIFICATES. Each party hereto agrees that at any time and from time to time during the term of this Lease, within ten (10) days after request by the other party hereto or by any lender having an interest in Lessee's leasehold estate, it will execute, acknowledge and deliver to the other party or to such lender or any prospective purchaser, assignee or any mortgagee designated by such other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if there have been modifications, that this Lease is in force and effect as modified, and identifying the modification agreements), (b) the date to which rent has been paid, (c) whether or not there is any existing default by Lessee in the payment of any rent or other sum of money hereunder, and whether or not there is any other existing default by either party hereto with respect to which a 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 20. WAIVER. No waiver by either party hereto of any breach by the other of any term, covenant, condition or agreement herein and no failure by any party to exercise any right or remedy in respect of any breach hereunder, shall constitute a 14 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 21. SURRENDER. Lessee shall, on the last day of the term of this Lease or upon any termination of this Lease, surrender and deliver up the Demised Premises, with the Improvements then located thereon into the possession and use of Lessor, without fraud or delay and in good order, condition and repair, reasonable wear and tear excepted, free and clear of all lettings and occupancies, free and clear of all liens and encumbrances other than those existing on the date of this Lease and those, if any, created by Lessor, without (except as otherwise provided herein) any payment or allowance whatever by Lessor on account of or for any buildings and Improvements erected or maintained on the Demised Premises at the time of the surrender, or for the contents thereof or appurtenances thereto. Lessee's Trade Fixtures, personal property and other belongings of Lessee or of any sublessee or other occupant of space in the Demised Premises shall be and remain the property of Lessee, and Lessee shall have a reasonable time after the expiration of the term of this Lease (not to exceed thirty (30) days) to remove the same. SECTION 22. MEMORANDUM OF LEASE. Each of the parties hereto will, promptly upon request of the other, execute a memorandum of this Lease in a form suitable for recording setting forth the names of the parties hereto and the term of this Lease, identifying the Demised Premises, and also including such other clauses therein as either party may desire, except the amounts of Basic Rent payable hereunder. SECTION 23. NOTICES. 23.1 All notices, demands or other writings in this Lease provided to be given or made or sent, or which may be given or made or sent, by either party to the other, shall be deemed to have been fully given or made or sent when made in writing and deposited in the United States mail, registered and postage prepaid, and by facsimile addressed as follows: TO LESSOR: City of Dubuque, Iowa City Manager City Hall 50 West 13 Street Dubuque IA 52001 Fax 319 589 -4149 TO LESSEE: Dubuque Terminals, Inc. Carter Newt 15 SECTION 24. MISCELLANEOUS. 5 Jones Street Dubuque IA 52001 23.2. The address and /or fax number to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by the party as above provided. 24.1. Time of the Essence. Time is of the essence of this Lease and all of its provisions. 24.2. 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. 24.3. 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. 24.4. Modification of Agreement. Any modification of this Lease or additional obligation assumed by either party in connection with this Lease shall be binding only if evidenced in a writing signed by each party or an authorized representative of each party. 24.5. Parties Bound. This Lease shall be binding on and shall inure to the benefit of and shall apply to the respective successors and assigns of Lessor and Lessee. All references in this Lease to "Lessor" or "Lessee" shall be deemed to refer to and include successors and assigns of Lessor or Lessee without specific mention of such successors or assigns. 24.6. Force Majeure. In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, unavailability of construction materials, unavailability or excessive price of fuel, power failure, 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 25. DISMISSAL OF LAWSUIT AND RELEASE. Lessee shall at the time of execution of this Lease deliver to Lessor a dismissal of the appeal in GARY NEWT and KAREN NEWT, NEWT MARINE, INC., DUBUQUE BARGE & FLEETING SERVICE, INC. d /b /a NEWT MARINE and DUBUQUE TERMINALS, INC. 16 v. THE CITY OF DUBUQUE, IOWA, together with a release approved as to form by Lessor by the Plaintiffs in such action of all claims against the City of Dubuque, its officers and employees, arising out of the rezoning of Plaintiffs South Port properties and the expiration of Plaintiffs' leases of City property in the South Port. SECTION 26. OTHER CONDITIONS. This Lease shall be subject to and conditioned upon Lessor and Lessee entering to the Ice Harbor Lease attached hereto. SECTION 27. SALE OF PRODUCTS TO LESSOR. Lessee agrees that Lessor will not be charged more than Lessee's other customers for the same products provided by Lessee to its other customers. For purposes of this Section 28, Lessee shall make available to City upon request its books of record and account which show the price or fee charged to its customers. If Lessor discovers that a customer of Lessee is being charged a lower price or fee for the same product, Lessee shall reduce its price or fee to Lessor to the same price or fee being charged to such other customer and shall rebate the difference charged to Lessor for such products together with a surcharge of 25% of the amount of such overcharges for overcharges during the preceding 12 months. SECTION 28. 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. LESSOR: LESSEE: CITY OF DUBUQUE, IOWA DUBUQUE TERMINALS, INC. By: By: Roy D. Buol, Mayor Gary Newt, President Attest: By: Jeanne F. Schneider, City Clerk Carter Newt 17 EXHIBIT A THE DEMISED PREMISES 18 EXHIBIT A wt . a. �e ,,.t„ �....>..M,rWH,.... C.4 af .. o.,, . Cray r ..........t mrd le RIM ..w. Musa . "- ..I..,w. Area A _ Area B 011 Area C {: _ Area D ...MB.. 6....rod. ....r ...wm..d....1...^...n 1..4'.11.••..•. agnYinrl F..n.. ■•.1.....n.I.I....Y•• Feet �b..M *.:. �0 0 75 150 300 450 600 nK CITY or -'� DUBLIQUi %SW.TJw'1r ai Ilr/ Iiw.'q;r 19 INSURANCE SCHEDULE 20 INSURANCE SCHEDULE A INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE 1. AU policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A or better in the current A.M. Best Rating Guide. 2. All Certificates of Insurance required hereunder shall provide a thirty (30) day notice of cancellation to the City of Dubuque, except for a ten (10) day notice for non- payment, if cancellation is prior to the expiration date. 3. shall furnish a signed Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such certificates shall include copies of the following policy endorsements: a) Commercial General Liability policy is primary and non-contributing. b) Commercial General Liability additional insured endorsement, c) Governmental Immunity Endorsements. 4. Each certificate shall be submitted to the contracting department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products-Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage Limit (any one occurrence) $ 50,000 Medical Payments $ 5,000 This coverage shall be written on an occurrence, not a claims made form. Form CG 25 04 03 97 °Designated Location (s) General Aggregate Limit" shall be included. All deviations or exclusions from the standard ISO commercial general liability form CG 0001, or Business Owners form BP 0002, shall be clearly identified. 1 of 2 January 2008 21 INSURANCE SCHEDULE A (Continued) INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE Governmental Immunity Endorsement identical or equivalent to form attached. Additional Insured Requirement: 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 shall be named as an additional insured on General Liability Policies using ISO endorsement CG 20 26 0704 ''Additional Insured - Designated Person or Organization," or it's equivalent. - See Specimen b) WORKERS COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: Each Accident $100,000 Each Employee - Disease $100,000 Policy Limit - Disease $500,000 c) UMBRELLA EXCESS LIABILITY LIQUOR OR DRAM SHOP LIABILITY Coverage to be determined on a case by case basis by Finance Director. Completion Checklist 111 Certificate of Liability Insurance (2 pages) 0 Designated Location(s) General Aggregate Limit CG 25 04 03 97 (2 pages) n Additional Insured 20 26 07 04 0 Governmental Immunities Endorsement 2 of 2 January 2008 22 ACORD., CERTIFICATE OF LIABILITY INSURANCE DATE(IMMOOIYYYY) 12/7/2007 , PRODUCER (563) 123-4567 Insurance Agency Street Address FAX (563) 987 -6543 Ci t POURED Company Street City $t Zip Code THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE ' OLICIES BELOW. INSURERS AFFORDING COVERAGE INSURER A Insurance Company s+avRER e WSURER C JISLAIERD NSURER E NAIC N CO ES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED ABOVE F REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE T AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS MIR ADM LIR AeSe OTHE GES P ALL OVA4ED AUTOS SCHEOULE H IRED AUTOS HON•QY44IEO AU Y A DEDUCIBLE RETENTION $ 0 E y*+.. dsso be a der SPECIAL PROVISIONS CLUSIONS AOOEO BY EHOORSEM City of Dubuque is listed as an additional insured on general liability polic using I50 endorsement form CG 2026 0704 "Additional Insured - Designated Person or Organisation" or its •quivalsnt. General Liability policy is primary i n on - contributing. Form CC 2504 0397 "Designated Locations" general liability aggregate limit is included. Governmental immunities endorsement is included. CERTIFICATE HOLDER INSURANCE PD,,, I x 1a n PEMSATION AND uTY ARTNERIEXECUTIVE UDED'' City of Dubuque 50 West 13th Street Dubuque, IA 52001 ACORD 26 (2 108) INS02S (DIM Oe AMS 48A ITV OCCUR R Y ER POUCY EFFECTIVE DATE IS,' SLIDDNYI CANCELLATION VIP Malgopo Solutions, Inc I1300}327-0645 23 DATE I REPRESEMTA ICY PER CERT1FI MAY USIONS AND C EACH OCCURRENCE T Rie•NTED P EM ;515(Esax+azenu) MED EXP IAN one PusoN PERSONAL i ADV INJURY GENERAL AGGREGATE PRODUCTS - COMP/OP AGO C R Y AUTO ONLY - EA ACCIOE O THER THAN EA AUT ONLY kACH OCCURRENCE AGGREGATE E x I yy � g }'I TC�RY i>MITs I I E L EACH ACCIDENT 1 E L EA OYE.E 1 DI N 000,000 50, 5, 000 1, 000,000 2,000,000 ,000,000 1,000,000 00,000 00,000 00,000 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED EXPIRATION DATE THEREOF, THE ISSUING INSURER MILL ENDEAVOR TO MAIL 30 DAYS WRITTEN Non10E TO THE CERTIRCATE HOLDER NAMED TO THE LEFT, BUT DD SO SHALL IMPOSE NO OBLIGATION OR UABEJTY OF MY KM UPON 111E IR. 113 AC.EMT$ OR REPRESEHTA 43 ACORD CORPORATION MISS Pap1c12 ACORD 25(2001i011) INS025praioe AMS IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the poicy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement, A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the Issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend. extend or alter the coverage afforded by the policies listed thereon. Paps 2 ci 2 24 POLICY NUMBER: COMMERCIAL GENERAL LIABILITY CG 25 04 03 97 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. Designated Location(s): A. For all sums which the insured becomes legally obligated to pay as damages caused by "occur- rences" under COVERAGE A (SECTION I), and for all medical expenses caused by accidents under COVERAGE C (SECTION I), which can be attributed only to operations at a single desig- nated "location shown in the Schedule above: 1. A separate Designated Location General Aggregate Limit applies to each designated "location", and that limit is equal to the amount of the General Aggregate Limit shown in the Declarations. 2. The Designated Location General Aggregate Limit is the most we will pay for the sum of all damages under COVERAGE A, except dam- ages because of "bodily injury" or "property damage" included in the "products-completed operations hazard% and for medical expenses under COVERAGE C regardless of the num- ber of a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 3. Any payments made under COVERAGE A for damages or under COVERAGE C for medical expenses shall reduce the Designated Loca- tion General Aggregate Limit for that desig- nated - location". Such payments shall not re- duce the General Aggregate Limit shown in DESIGNATED LOCATION(S) GENERAL AGGREGATE LIMIT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) the Declarations nor shall they reduce any other Designated Location General Aggre- gate Umit for any other designated 'location" shown In the Schedule above, 4. The limits shown in the Declarations for Each Occurrence, Fire Damage and Medical Ex- pense continue to apply. However, instead of being subject to the General Aggregate Limit shown in the Declarations, such limits will be subject to the applicable Designated Location General Aggregate Limit, B. For all sums which the insured becomes legally obligated to pay as damages caused by "occur- rences" under COVERAGE A (SECTION I), and for all medical expenses caused by accidents under COVERAGE C (SECTION I), which can- not be attributed only to operations at a single designated "location" shown in the Schedule above: 1. Any payments made under COVERAGE A for damages or under COVERAGE C for medical expenses shall reduce the amount available under the General Aggregate Limit or the Products-Completed Operations Aggregate Limit, whichever is applicable: and 2. Such payments shall not redvce any Desig- nated Location General Aggregate Limit. CG 25 04 03 97 Page 1 of 2 25 CG 25 04 03 97 C. When coverage for liability arising out of the "products-completed operations hazard is pro- vided, any payments for damages because of "bodily injury" or "property damage" included In the "products-completed operations hazard' will reduce the Products•Completed Operations Ag- gregate Limit, and not reduce the General Ag- gregate Limit nor the Designated Location Gen- eral Aggregate Limit. D. For the purposes of this endorsement, the Defi- nitions Section is amended by the addition of the following definition: Copyright, Insurance Services Office, Inc., 1996 Page 2 of 2 CG 25 04 03 97 26 "Location' means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway, waterway or right-of-way of a railroad. E. The provisions of Limits Of Insurance (SECTION III) not otherwise modified by this endorsement shall continue to apply as stipulated. POLICY NUMBER: COMMERCIAL GENERAL LIABIUTY CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) 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. Information required to complete this Schedule, if not shown above, will be shown in the Declarations. Section 11 — Who Is An Insured is amended to in- clude as an additional insured the person(s) or or- ganization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property dam- age" or "personal and advertising injury" caused. in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: A. In the performance of your ongoing operations; or B. In connection with your premises owned by or rented to you. All terms and conditions of this policy apply unless modified by this endorsement. CG 20 26 07 04 Includes copyrighted material of Insurance Services Office, Inc with permission. Page 1 of 1 © ISO Properties, Inc.. 2004 27 CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmental Immunity. The insurance carrier 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 insurance carrier 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 insurance carrier. 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier 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 1 of 1 January 2008 28 2.1. Rent. 041310bal LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE TERMINALS, INC. (The Ice Harbor Lease) This Lease Agreement (the Lease) dated for reference purposes this day of , 2010, between the City of Dubuque, Iowa, an Iowa municipal corporation (Lessor), and Dubuque Terminals, Inc., an Iowa corporation (Lessee). SECTION 1. DEMISE AND TERM. In consideration of the rents hereinafter reserved and the terms, covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the real property shown on Exhibit A (collectively the Demised Premises), to have and to hold for an initial term commencing as of the 1 day of March, 2010, and ending at midnight on the 30 day of June, 2014 (the Term), subject to all of the terms, covenants, conditions and agreements contained herein. Expiration of this lease after 4 years is contingent upon acquisition of the Dove Harbor Lease, as attached hereto. If the Dove Harbor Demised Premises are not available as required by the Dove Harbor Lease, at no fault of Lessee, the Term of this Ice Harbor Lease shall be extended to midnight on the 30 day of June, 2015 on the same terms and conditions herein. SECTION 2. RENT, TAXES, AND OTHER PAYMENTS. (1) Parcel A. Lessee shall pay Lessor, in addition to taxes, fees, rates, charges, levies, assessments, and all other charges required to be paid under this Lease by Lessee, rent for Parcel A in the amount of $100,000.00 per year, in twelve equal monthly payments commencing on the 1 day of July, 2010 and on the first day of each month thereafter during the Term. (2) Parcel B. Lessee shall have the right to use the shoreline shown along Parcel B but only when the gates to the Ice Harbor are closed due to flooding and only for the purpose of docking vessels or barges. Lessee shall pay Lessor, rent for use of the Parcel B shoreline in the amount of $350.00 per day or any part of a day. 2.2 Taxes. Lessee shall pay all property taxes on the Leased Premises, including the land and any improvements thereon, due and payable during the Term of the Lease. 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 Lessee's business. Title to Lessee's trade fixtures (the Trade Fixtures) is and shall be the sole and exclusive property of Lessee during the term of this Lease and shall remain the sole and exclusive property of Lessee after the expiration or termination of this Lease, for whatever reason. Lessor acknowledges and understands that it shall have no right, title or interest in or to Lessee's Trade Fixtures either during the term of this Lease, or thereafter (except as hereinafter provided). Lessor acknowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's Trade Fixtures, to remove them from the Demised Premises, or to otherwise deal with all or any portion of such Lessee's Trade Fixtures, at Lessee's sole discretion. Upon ten (10) days' prior written notice to Lessor, Lessor shall execute and deliver to Lessee a certificate in recordable form prepared by Lessee stating that Lessor has no interest or right in or to Lessee's Trade Fixtures, as well as any other or further document which Lessee may reasonably request from Lessor. 3.2 Improvements. On delivery of possession of the Demised Premises to Lessee, Lessee shall not construct any improvements on the Demised Premises without the prior written consent of Lessor, in Lessor's sole discretion. Upon any termination of this Lease, by reason of any cause whatsoever, if any new Improvements or Improvements existing at the time of the execution of this Lease 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. SECTION 4. ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST. 4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed of trust or other proper instrument, its leasehold interest and estate in the Demised Premises, together with all Improvements on the Demised Premises, as security for any indebtedness of Lessee, provided that no such encumbrance shall extend beyond the term of this Lease. Lessee shall provide prompt written notice to Lessor of any such encumbrance together with a copy of such encumbrance. In the event of any judicial or nonjudicial foreclosure under any mortgage, deed of trust or other similar instrument made by Lessee covering its leasehold interest in the Demised Premises, Lessor shall, upon such foreclosure or sale, recognize the purchaser thereunder as lessee under this Lease, provided such purchaser expressly agrees in writing to be bound by the terms of this Lease. 2 4.2 Notice to Holder of Encumbrance; Right of Holder to Cure Lessee's Default. If Lessee shall encumber its leasehold interest and estate in the Demised Premises and if Lessee, or the holder of the indebtedness, its successors and /or assigns (the Holder) secured by the encumbrance shall give notice to Lessor within 30 days thereafter of the existence of the encumbrance and the address of the Holder, then Lessor shall mail or deliver to the Holder, at such address, a duplicate copy of all notices in writing which Lessor may, from time to time, give or serve on Lessee under and pursuant to the terms and provisions of this Lease. The copies shall be mailed or delivered to the Holder at, or near as possible to, the same time the notices are given to or served on Lessee. The Holder may, at its option, at any time before the rights of Lessee shall be terminated as provided in this Lease, pay any of the rents due under this Lease or pay any taxes and assessments, or do any other act or thing required of Lessee by the terms of this Lease, or do any act or thing that may be necessary and proper to be done in the observance of the covenants and conditions of this Lease or to prevent the termination of this Lease; provided, however, that the doing of any act or thing requiring possession of the Demised Premises shall be subject to the further rights of Holder as set forth in 16.2. All payments so made and all things so done and performed by the Holder shall be effective to prevent a foreclosure of the rights of Lessee thereunder as the same would have been if done and performed by Lessee. SECTION 5. TAXES. 5.1 Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real estate of the Demised Premises that become payable during the term hereof and which would become delinquent if not so paid during the term hereof. Lessee shall further provide to Lessor official receipts of the appropriate taxing authority or other evidence satisfactory to Lessor evidencing payment thereof. 5.2 During the term of this Lease, Lessee further agrees to pay all other taxes, fees, rates, charges, levies and assessments, general and special, of every name, nature and kind, whether now known to the law or hereafter created which may be taxed, charged, assessed, levied or imposed upon said real estate and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, any buildings or improvements thereon which may be taxed, charged, assessed, levied or imposed upon the leasehold estate hereby created and upon the reversionary estate in said real estate during the term hereof and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, and all such other 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 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 reserved to Lessor hereunder. 3 5.5 Lessee shall at all times have the right to contest in good faith, in any proper proceedings, in the name of Lessor if necessary, the payment or satisfaction of any such taxes, fees, assessments, rates, charges or levies so agreed to be paid by Lessee, if the validity thereof, or the right to assess or levy the same against or collect the same from said Demised Premises or Improvements, shall be disputed. Upon the conclusion of any such suit or proceedings, or not less than three (3) months prior to the date when the right to redeem therefrom expires, whichever will be the earlier, Lessee shall promptly pay and satisfy such disputed tax, 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, and all sidewalks, curbs, and all appurtenances to the Demised Premises, 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, conduct an annual inspection of the Demised Premises to determine Lessee's compliance with this Section 6. 6.2 Lessor shall have the right to require Lessee upon written notice to repair or remove any structure on the Demised Premises which Lessor determines does not comply with the requirements of this Section, and Lessee shall repair or remove, as the notice may require, any such structure within ten days after receipt of such notice. 6.3 Lessor shall have no obligation to Lessee for any maintenance expense of any kind on the Demised Premises or elsewhere, including but not limited to dredging, public streets, private roads, or railroad tracks. 6.4 In addition to the Demised Premises, Lessee also owns or leases the property shown on Exhibit B (the Lessee Property). (1) Lessee shall: (a) Vacate the shoreline leasehold (adjacent to Parcel B), including removal of all equipment and materials, by June 30, 2010. (b) Vacate the inland leasehold, including removal of all equipment and materials from the storage yard, and welding shop, upon expiration of the lease on August 31, 2012. 4 (c) Remove 10 bulk liquid tanks on or before December 31, 2018. (2) Lessor agrees to make a five -year low interest loan to Lessee an amount not to exceed $50,000 to assist with the costs of such removal. SECTION 7. COMPLIANCE WITH LAW. 7.1 During the term of this Lease, Lessee shall comply with all local, state and federal laws applicable to Lessee's use of the Demised Premises, including but not limited to the Americans with Disabilities Act. 7.2 Lessee shall not commit waste on the Demised Premises except as necessary for its business purposes including the removal or construction of any buildings and Improvements on the Demised Premises, and shall be liable for any damages to or destruction of any buildings or Improvements on the Demised Premises resulting from waste and shall be required to repair or rebuild such buildings or Improvements. Lessee shall not remove any Improvements on the Demised Premises without the prior written approval of Lessor. SECTION 8. ALTERATIONS. Lessee shall not, without Lessor's prior written consent, which consent shall not be unreasonably withheld, make any alteration, addition, or modification to any Improvement on the Demised Premises that exceeds Five Thousand Dollars ($5,000.00) in cost. Any alteration, addition, or modification of less than Five Thousand Dollars ($5,000.00) shall not require Lessor's consent. SECTION 9. USE OF DEMISED PREMISES. 9.1 Lessee shall not knowingly use or allow the Demised Premises or any buildings or Improvements thereon or any appurtenances thereto, to be used or occupied for any unlawful purpose or in violation of any certificate of occupancy. Lessee shall not suffer any act to be done or any condition to exist within the Demised Premises or in any Improvement thereon, or permit any article to be brought therein, which is dangerous, unless safeguarded as required by law, or which, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance in force with respect thereto. 9.2 Any vessels or barges docked along Parcel B shall be no more than 2 vessels or barges deep, shall at all times be maintained in a good state of repair, and shall not be used for the storage of junk or salvage material. 9.3 Lessee hereby grants access to Lessor to the levee and floodwall at all times for Lessor's operations and maintenance of the levee and floodwall. Lessee acknowledges that there is a clear zone of 20' from the levee and floodwall that must be free from all storage or construction, and Lessee agrees to comply with such free zone requirement at all times. SECTION 10. INSURANCE. 5 10.1 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, as such uniform, standardized schedule may from time to time be amended. The current Insurance Schedule is attached to this Lease Agreement as Insurance Schedule A. Lessor shall provide written notice of any amendment to the Insurance Schedule not Tess than sixty days prior to the effective date of such amendment. 10.2 Upon completion of construction of Improvements, Lessee shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of the payment of premiums on), property insurance against loss and /or damage to Improvements under an insurance policy written on the Special Perils Form in an amount not less than the full insurable replacement value of Improvements, but any such policy may have a deductible amount of not more than $50,000.00. No policy of insurance shall be so written that the proceeds thereof will produce Tess than the minimum coverage required by the preceding sentence, by reason of co- insurance provisions or otherwise, without the prior consent thereto in writing by City. The term "replacement value" shall mean the actual replacement cost of Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of City, but not more frequently than once every three years, and paid for by Lessee. 10.3 All insurance required by this Section shall be taken out and maintained in responsible insurance companies selected by Lessee which are authorized under the laws of the State of Iowa to assume the risks covered thereby or Lessee may at its election self- insure itself pursuant to the aforementioned guidelines. Lessee shall deposit annually by not later than July 1 of each year with City a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to Lessee and City at least thirty (30) days before the cancellation or modification becomes effective. Lessee shall furnish City evidence satisfactory to City that the policy has been renewed or replaced by another policy conforming to the provisions of this , or that there is no necessity therefor under the terms hereof. In lieu of separate policies, Lessee may maintain a single policy, or blanket or umbrella policies, or a combination thereof, which provide the total coverage required herein, in which event Lessee shall deposit with City a certificate or certificates of the respective insurers as to the amount of coverage in force upon Improvements, provided, however, the specific limit shall not be impaired. 10.4 Lessee agrees to notify City immediately in the case of damage exceeding $50,000.00 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 shall forthwith repair, reconstruct and restore the Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Lessee shall apply the Net Proceeds of any insurance relating to such damage received by Lessee to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property. 10.5 Lessee shall complete the repair, reconstruction and restoration of Improvements, whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient. SECTION 11. LESSOR'S WARRANTIES AND REPRESENTATIONS. 11.1 Lessor's Representation of Good Title. Lessor covenants and warrants that Lessor is lawfully seized in possession of the Demised Premises, and that it has full right and authority to enter into this Lease for the full term hereof, and covenants and agrees that upon paying the rent provided for herein, and upon Lessee's performing the covenants and agreements of this Lease required to be performed by said Lessee, that it will have, hold and enjoy quiet possession of the Demised Premises. Lessor warrants to Lessee that the Demised Premises are properly zoned for the conduct of the operation of Lessee's business. 11.2 Lessor makes no representations or warranties as to the condition, including environmental condition, of the Demised Premises and Lessee accepts the Demised Premises as is. SECTION 12. LESSEE'S WARRANTIES AND REPRESENTATION. 12.1 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, occupancy and control of the Demised Premises. 12.2 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, Lessee's use, occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any Hazardous Substance which leaches or migrates upon the Demised Premises from any property owned by Lessor). Notwithstanding any other provision of 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 which pre- exists the date of this Lease, except as follows: (a) Lessee shall be responsible for known pre- existing releases for which Lessee fails to take due care and adequate precaution and /or for which Lessee's actions or inactions cause a worsening of the release, and (b) Lessee shall provide full cooperation, assistance, and access to Lessor or other parties investigating and /or responding to a threatened 7 or actual release. (2) Lessee covenants and agrees to promptly notify Lessor of any release of Hazardous Substance in, on or about the Demised Premises of which Lessee suspects or has actual knowledge. (3) Lessee covenants and agrees to promptly take any and all necessary and appropriate response to fully address any release of Hazardous Substance for which Lessee is responsible under this Section 12.2(1) following advance notice to Lessor. Such response shall include, without limitation, notification to appropriate governmental authorities, as may be required by law. Lessee shall seek and obtain the concurrence of Lessor as to any such response. Lessee shall respond to such release to the full extent required by law In no event shall Lessee allow limitations or restrictions to be placed on the Demised Premises without the written consent of the Lessor. (4) Lessee covenants and agrees to not manufacture, treat or dispose of Hazardous Substances at the Demised Premises or allow the manufacture, treatment, or disposal of Hazardous Substances on the Demised Premises. Lessee shall use and store on 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 13. INDEMNIFICATION. 13.1 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 and resulting from any act or omission of Lessor, (b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease and (c) any breach on the part of Lessor of any warranty or representation contained in Section 11. In case any action, suit or proceeding is brought against Lessee by reason of such occurrence, Lessor will, at Lessor expense and discretion, either defend such action, suit or proceeding, or cause the same to be defended by counsel approved by Lessee, which approval will not be unreasonably withheld. 13.2 Indemnification of Lessor. Lessee will 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 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, and (c) any material breach on the part of Lessee of any warranty or representation contained in Section 12. In case any action, suit or proceeding is brought against Lessor by reason of such occurrence, Lessee will, at Lessee's expense and discretion, either defend such action, suit or proceeding, or cause the same to be defended by counsel approved by Lessor, which approval will not be unreasonably withheld. 13.3 Survival. The obligations and liabilities under this 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 14. CONDEMNATION. 14.1 Entire Condemnation. If at any time during the term of this Lease all or substantially all of the Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent 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. 14.2 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 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 new Improvements constructed by Lessee but not Improvements existing at the commencement of the Term of this Lease, and all other sums not directly attributable to the value of the Land constituting the Demised Premises; (2) To Lessee, the entire award except that portion allocated to Lessor above. 14.3 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 14.2, and Lessee shall proceed with reasonable diligence to carry out any necessary repair and restoration so that the remaining Improvements and appurtenances shall constitute a complete 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, as provided for in this 13.3, Lessee shall be entitled to the entire award for such partial taking. 14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised Premises or the Improvements thereon or the appurtenances thereto shall be taken at any time during the term of this Lease in the exercise of the power of eminent domain by any sovereign, municipality, or other authority, the term of this Lease shall not be reduced or affected in any way, and Lessee shall continue to pay in full the rent, additional rent and other sum or sums of money and charges herein reserved and provided to be paid by Lessee, and the entire award for such temporary taking shall be paid to Lessee. Lessee shall repair and restore any and all damage to the Demised Premises and the Improvements as soon as reasonably practicable after such temporary taking. SECTION 15. ASSIGNMENT AND SUBLETTING. This Lease may not be assigned by Lessee without the prior written consent of Lessor, which consent shall not be 10 unreasonably withheld, provided said third party agrees to comply with the terms and conditions of this Lease. Lessee may sublet parts of the Demised Premises without the prior consent of Lessor provided Lessee's subtenants agree to comply with the applicable terms and conditions of this Lease, and provided further that Lessee shall remain responsible to Lessor for the terms and conditions of this Lease. SECTION 16. DEFAULT. 16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee shall fail or neglect to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, and the default shall continue for a period of thirty (30) days after written notice from Lessor setting forth the nature of 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 ninety (90) days), then and in any such event, Lessor shall have the right at its option, on written notice to Lessee, to terminate this Lease. Lessor shall thereafter have the right to enter and take possession of the Demised Premises with process of law and to remove all personal property from the Demised Premises and all persons occupying the Demised Premises and to use all necessary force therefor and in all respects to take the actual, full and exclusive possession of the Demised Premises and every part of the Demised Premises as of Lessor's original estate, without incurring any liability to Lessee or to any persons occupying or using the Demised Premises for any damage caused or sustained by reason of such entry on the Demised Premises or the removal of persons or property from the Demised Premises. 16.2 Rights of Holder of Encumbrance in Event Lessee Defaults. If Lessee fails or neglects to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, the Holder of any indebtedness secured by an encumbrance on the leasehold estate under this Lease shall have thirty (30) days after receipt of written notice from Lessor setting forth the nature of Lessee's default and a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature thereof within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days, within which to endeavor to make good or remove the default or cause for termination of the Lease. All right of Lessor to terminate this Lease on the failure or neglect of Lessee to observe, keep and perform the covenants, terms and conditions of this Lease is, and shall continue to be, at all times prior to payment in full of the indebtedness to the Holder of Lessee, subject to and conditioned on Lessor's having first given the Holder written notice thereof and the Holder having failed to cause the default or cause for termination to be made good or removed within thirty (30) days after receiving written notice of default or cause for termination or within a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature of foreclosure within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days. In the event that the Lease is 11 terminated due to the Lessee's bankruptcy, insolvency or other proceedings, and in the event the Holder has complied with the terms of this 16.2, then Lessor at Holder's option, shall enter into a new lease with Holder or the successful bidder at foreclosure on the same terms as this Lease, for the term then remaining, and specifically preserving all unexercised options. 16.3 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 ninety (90) days), then and in any such event, Lessee shall have all rights available to it provided by law or equity. SECTION 17. RIGHT TO CURE OTHER'S DEFAULTS. Whenever and as often as a party shall fail or neglect to comply with and perform any term, covenant, condition or agreement to be complied with or performed by such party hereunder, then, following thirty (30) days' prior written notice to such defaulting party (or such additional time to cure as may be accorded Lessee pursuant to 16.1 above, but in no event longer than ninety (90) days), the other party, at such other party's option, in addition to all other remedies available to such other party, may perform or cause to be performed such work, labor, services, acts or things, and take such other steps, including entry onto the Demised Premises and the Improvements thereon, as such other party may deem advisable, to comply with and perform any such term, covenant, condition or agreement which is in default, in which event such defaulting party shall reimburse such other party upon demand, and from time to time, for all costs and expenses suffered or incurred by such other party in so complying with or performing such term, covenant, condition or agreement. The commencement of any work or the taking of any other steps or performance of any other act by such other party pursuant to the immediately preceding sentence shall not be deemed to obligate such other party to complete the curing of any term, covenant, condition or agreement which is in default. SECTION 18. QUIET ENJOYMENT. Lessor covenants that at all times during the term of this Lease, so long as Lessee is not in default hereunder, Lessee's quiet enjoyment of the Demised Premises or any part thereof shall not be disturbed by any act of Lessor, or of anyone acting by, through or under Lessor. Notwithstanding the foregoing, Lessor shall have the right upon reasonably notice to Lessee to enter the Demised Premised at any time to determine whether Lessee is in compliance with the requirement of this Lease. SECTION 19. ESTOPPEL CERTIFICATES. Each party hereto agrees that at any time and from time to time during the term of this Lease, within ten (10) days after request by the other party hereto or by any lender having an interest in Lessee's leasehold estate, it will execute, acknowledge and deliver to the other party or to such 12 lender or any prospective purchaser, assignee or any mortgagee designated by such other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if there have been modifications, that this Lease is in force and effect as modified, and identifying the modification agreements), (b) the date to which rent has been paid, (c) whether or not there is any existing default by Lessee in the payment of any rent or other sum of money hereunder, and whether or not there is any other existing default by either party hereto with respect to which a 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 20. WAIVER. No waiver by either party hereto of any breach by the other of any term, covenant, condition or agreement herein and no failure by any party to exercise any right or remedy in respect of any breach hereunder, shall constitute a waiver or relinquishment for the future of any such term, covenant, condition or agreement or of any subsequent breach of any such term, covenant, condition or agreement, nor bar any right or remedy of the other party in respect of any such subsequent breach, nor shall the receipt of any rent, or any portion thereof, by Lessor, operate as a waiver of the rights of Lessor to enforce the payment of any other rent then or thereafter in default, or to terminate this Lease, or to recover the Demised Premises, or to invoke any other appropriate remedy which Lessor may select as herein or by law provided. SECTION 21. SURRENDER. Lessee shall, on the last day of the term of this Lease or upon any termination of this Lease, surrender and deliver up the Demised Premises, with the Improvements then located thereon into the possession and use of Lessor, without fraud or delay and in good order, condition and repair, reasonable wear and tear excepted, free and clear of all lettings and occupancies, free and clear of all liens and encumbrances other than those existing on the date of this Lease and those, if any, created by Lessor, without (except as otherwise provided herein) any payment or allowance whatever by Lessor on account of or for any buildings and Improvements erected or maintained on the Demised Premises at the time of the surrender, or for the contents thereof or appurtenances thereto. Lessee's Trade Fixtures, personal property and other belongings of Lessee or of any sublessee or other occupant of space in the Demised Premises shall be and remain the property of Lessee, and Lessee shall have a reasonable time after the expiration of the term of this Lease (not to exceed thirty (30) days) to remove the same. SECTION 22. MEMORANDUM OF LEASE. Each of the parties hereto will, promptly upon request of the other, execute a memorandum of this Lease in a form suitable for recording setting forth the names of the parties hereto and the term of this Lease, identifying the Demised Premises, and also including such other clauses therein as either party may desire, except the amounts of Basic Rent payable hereunder. 13 SECTION 23. NOTICES. 23.1 All notices, demands or other writings in this Lease provided to be given or made or sent, or which may be given or made or sent, by either party to the other, shall be deemed to have been fully given or made or sent when made in writing and deposited in the United States mail, registered and postage prepaid, and by facsimile addressed as follows: TO LESSOR: TO LESSEE: City of Dubuque, Iowa City Manager City Hall 50 West 13 Street Dubuque IA 52001 Fax 319 589 -4149 Dubuque Terminals, Inc. Carter Newt 5 Jones Street Dubuque IA 52001 23.2 The address and /or fax number to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by the party as above provided. SECTION 24. MISCELLANEOUS. 24.1 Time of the Essence. Time is of the essence of this Lease and all of its provisions. 24.2 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. 24.3 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. 24.4 Modification of Agreement. Any modification of this Lease or additional obligation assumed by either party in connection with this Lease shall be binding only if evidenced in a writing signed by each party or an authorized representative of each party. 24.5 Parties Bound. This Lease shall be binding on and shall inure to the benefit of and shall apply to the respective successors and assigns of Lessor and Lessee. All references in this Lease to "Lessor" or "Lessee" shall be deemed to refer to and include successors and assigns of Lessor or Lessee without specific mention of such successors or assigns. 14 24.6 Force Majeure. In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, unavailability of construction materials, unavailability or excessive price of fuel, power failure, 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 25. JOINT MARKETING. Lessor and Lessee agree to cooperate in the joint marketing of property owned by Lessor and Lessee in the South Port of Dubuque. Lessee further agrees to accept an offer received during the Term of this Lease to lease Lessee's Property (Exhibit B) after June 30, 2014 if the lease price is not less than $60,000 per acre per year which amount shall be increased beginning June 30, 2015 by (i) 3% and by 3% on June 30 of each year thereafter or (ii) the increase in the Cost of Living (COL) for each year, whichever is greater. COL Index means the Consumer Price Index for all items for All Urban Consumers —U.S. City Average, published by the U.S. Department of Labor, Bureau of Labor Statistics or the comparable index in the event the COL Index is replaced by the U.S. Department of Labor. SECTION 26. DISMISSAL OF LAWSUIT AND RELEASE. Lessee shall at the time of execution of this Lease deliver to Lessor a dismissal of the appeal in GARY NEWT and KAREN NEWT, NEWT MARINE, INC., DUBUQUE BARGE & FLEETING SERVICE, INC. d /b /a NEWT MARINE and DUBUQUE TERMINALS, INC. v. THE CITYOF DUBUQUE, IOWA, together with a release approved as to form by Lessor by the Plaintiffs in such action of all claims against the City of Dubuque, its officers and employees, arising out of the rezoning of Plaintiffs South Port properties and the expiration of Plaintiffs' leases of City property in the South Port. SECTION 27. DOVER HARBOR LEASE. This Lease shall be subject to and conditioned upon Lessor and Lessee entering into the Dove Harbor Lease attached hereto. SECTION 28. SALE OF PRODUCTS TO LESSOR. Lessee agrees that Lessor will not be charged more than Lessee's other customers for the same products provided by Lessee to its other customers. For purposes of this Section 28, Lessee shall make available to City upon request its books of record and account which show the price or fee charged to its customers. If Lessor discovers that a customer of Lessee is being charged a lower price or fee for the same product, Lessee shall reduce its price or fee to Lessor to the same price or fee being charged to such other customer and shall rebate the difference charged to Lessor for such products together with a surcharge of 25% of the amount of such overcharge. 15 SECTION 29. 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. LESSOR: LESSEE: CITY OF DUBUQUE, IOWA DUBUQUE TERMINALS, INC. By: By: Roy D. Buol, Mayor Gary Newt, President Attest: By: Jeanne F. Schneider, City Clerk Carter Newt 16 EXHIBIT A LEASE PARCELS A AND B 17 EXHIBIT B THE LESSEE PROPERTY 19 Legend Du:: uque Term Inc. Lease #1 Land owned by Newt/Newt -owned companies 20 INSURANCE SCHEDULE 21 INSURANCE SCHEDULE A INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A or better in the current A.M. Best Rating Guide. 2. All Certificates of Insurance required hereunder shall provide a thirty (30) day notice of cancellation to the City of Dubuque, except for a ten (10) day notice for non- payment, if cancellation is prior to the expiration date. 3. shall furnish a signed Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such certificates shall include copies of the following policy endorsements: a) Commercial General Liability policy is primary and non-contributing. b) Commercial General Liability additional insured endorsement. c) Governmental Immunity Endorsements. 4. Each certificate shall be submitted to the contracting department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products-Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage Limit (any one occurrence) $ 50,000 Medical Payments $ 5,000 This coverage shall be written on an occurrence, not a claims made form. Form CG 25 04 03 97 "Designated Location (s) General Aggregate Limit" shall be included. All deviations or exclusions from the standard ISO commercial general liability form CG 0001, or Business Owners form BP 0002, shall be clearly identified. 1 of 2 January 2008 22 INSURANCE SCHEDULE A (Continued) INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE Governmental Immunity Endorsement identical or equivalent to form attached. Additional Insured Requirement: 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 shall be named as an additional insured on General Liability Policies using ISO endorsement CG 20 26 0704 "Additional Insured — Designated Person or Organization," or it's equivalent. — See Specimen b) WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: Each Accident $100,000 Each Employee — Disease $100,000 Policy Limit — Disease $500,000 c) UMBRELLA EXCESS LIABILITY LIQUOR OR DRAM SHOP LIABILITY Coverage to be determined on a case by case basis by Finance Director. Completion Checklist El Certificate of Liability Insurance (2 pages) LI Designated Location(s) General Aggregate Limit CG 25 04 03 97 (2 pages) Additional Insured 20 26 07 04 fl Governmental Immunities Endorsement 2 of 2 January 2008 23 ACORD,, CERTIFICATE OF LIABILITY INSURANCE PRODUCER (563)123 -4567 Insurance Agency Street Address CCi INSURED Company Street Ci ty COVERAGES ENERAL LIABILITY COMMERCIAL GENERAL LIABILITY CLAMS MADE n OCCUR L AGGREGATE LIMIT APPLIES PER I` 1 PRU- POLICY I X 11Er.T Ti LOC AUTOMOBILE LIABILITY ANY AUTO ALL OWNEO AUTOS S CHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS WORKERS COMPENSATION AND EMPLOYERS' UABILTIY ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? Rya, describe under SPECIAL PROVISIONS Wm OTH CERTIFICATE HOLDER ACORD 26 (2001/08) INS025 (oIo01I$ AMS ST ,Code St Zip Code FAX (563) 987 -6543 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS 140 RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW INSURERS AFFORDING COVERAGE NAIC INSURER A. Insurance Company NSURER B: INSURER C INSURER 0 INSURER E THE POUCIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID C VISR A • • POUGY EFRECTSVE EXPIRATION LTR INSR• TYPE OF INSURANCE POLICY NUMBER DATE IMMmOA'YI oneommortn U CANCELLATION VMP McAgape SoKd,0ns, Inc. (B00)327-0545 24 HOC LICE E AmNTED RE 88 (Ea Oannn/we1 MEDEXP 10 ^. one srso'1 J'ERSOMAL a A0V r (I1Y GENERAL AGGREGATE PROOUCTS- COMP/OP AGG COMBINED SINGLE I MIT (Es accident) BODILY INJURY (P BODILY NJURY (Par accdud) PROPERTY DAMAGE (Pr accident) AUTO ONLY - EA ACCIDENT OTHER THAN EA ACC AUTO ONLY A EACH OCCURRENCE AGGREGATE X EL EACH ACCIDENT DISEASE - EA EMPLOYE l DISEASE - POLICY LEUT $ s S $ S DATE (MMIDWYYYY) 12/7/2007 000,000 50,000 5,000 1,000,000 2,000,000 ,000,000 1 ,000,000 00.000 100.000 500,000 DESCRIPTION OF OPERATIONSILOCATIONSNEHICLESIEXCLUSIONS ADDED BY ENDORSEMENTISPECIAL PROVISIONS City of Dubuque is listed as an additional insured on general liability policies using ISO endorsement fern CG 2026 0704 "Additional Insured - Designated Person or Organisation" or its equivalent. General Liability policy is primary i non - contributing. Form CG 2504 0397 "Designated Locations" general liability aggregate limit is included. Governmental immunities endorsement is included. City of Dubuque 50 West 13th Street Dubuque, IA 52001 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WALL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER. ITS AGENTS OR REPRESENTATIVES AUTHORIZED REPRESENTATIVE O ACORD CORPORATION 1988 P.O. 1 d2 ACORD 25 (2001/08) INS025 (0108)06 AMS IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in Ileu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the Issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. pc� Schedul Page 2012 25 POLICY NUMBER: THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. A. For all sums which the insured becomes legally obligated to pay as damages caused by "occur- rences" under COVERAGE A (SECTION 1), and for all medical expenses caused by accidents under COVERAGE C (SECTION 1), which can be attributed only to operations at a single desig- nated "location" shown in the Schedule above: 1. A separate Designated Location General Aggregate Limit applies to each designated "location", and that limit is equal to the amount of the General Aggregate Limit shown in the Declarations. 2. The Designated Location General Aggregate Limit is the most we will pay for the sum of all damages under COVERAGE A, except dam- ages because of "bodily injury" or "property damage" included in the "products-completed operations hazard", and for medical expenses under COVERAGE C regardless of the num- ber of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 3. Any payments made under COVERAGE A for damages or under COVERAGE C for medical expenses shall reduce the Designated Loca- tion General Aggregate Limit for that desig- nated "location". Such payments shall not re- duce the General Aggregate Limit shown in DESIGNATED LOCATION(S) GENERAL AGGREGATE LIMIT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE 26 COMMERCIAL GENERAL LIABILITY CG 25 04 03 97 Designated Location(s): (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) the Declarations nor shall they reduce any other Designated Location General Aggre- gate Limit for any other designated "location" shown in the Schedule above. 4. The limits shown in the Declarations for Each Occurrence, Fire Damage and Medical Ex- pense continue to apply. However, instead of being subject to the General Aggregate Limit shown in the Declarations, such limits will be subject to the applicable Designated Location General Aggregate Limit. B. For all sums which the insured becomes legally obligated to pay as damages caused by "occur- rences" under COVERAGE A (SECTION I), and for all medical expenses caused by accidents under COVERAGE C (SECTION 1), which can- not be attributed only to operations at a single designated "location" shown in the Schedule above: 1. Any payments made under COVERAGE A for damages or under COVERAGE C for medical expenses shall reduce the amount available under the General Aggregate Limit or the Products-Completed Operations Aggregate Limit, whichever is applicable; and 2. Such payments shall not reduce any Desig- nated Location General Aggregate Limit. CG 25 04 03 97 Page 1 of 2 CG 25 04 03 97 C. When coverage for liability arising out of the "products-completed operations hazard" is pro- vided, any payments for damages because of "bodily injury" or "property damage" included in the "products-completed operations hazard" will reduce the Products-Completed Operations Ag- gregate Limit, and not reduce the General Ag- gregate Limit nor the Designated Location Gen- eral Aggregate Limit. D. For the purposes of this endorsement, the Defi- nitions Section is amended by the addition of the following definition: Copyright, Insurance Services Office, Inc., 1996 "Location" means premises involving the same or connecting lots, or premises whose connection Is interrupted only by a street, roadway, waterway or right-of-way of a railroad. E. The provisions of Limits Of Insurance (SECTION III) not otherwise modified by this endorsement shall continue to apply as stipulated. Page 2 of 2 CG 25 04 03 97 27 COMMERCIAL GENERAL LIABI LT CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) POLICY NUMBER: 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. Information required to complete this Schedule, if not shown above, will be shown in the Declarations. Section 11 — Who Is An Insured is amended to in- clude as an additional insured the person(s) or or- ganization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property dam- age" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: A. In the performance of your ongoing operations; or B. In connection with your premises owned by or rented to you. All terms and conditions of this policy apply unless modified by this endorsement. CG 20 26 07 04 Includes copyrighted material of Insurance Services Office, Inc. with permission. Page 1 of 1 ® ISO Properties, Inc., 2004 28 CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmental Immunity. The insurance carrier 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 insurance carrier 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 insurance carrier. 4. Non - Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier 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 1 of 1 January 2008 29