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Dubuque County Historical Society_Ice Harbor Lease Amendment No. 4Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager Dubuque Iterd NI-America City 11111 ! 2007 SUBJECT: Dubuque County Historical Society Lease Ice Harbor Lease Amendment No. 4 — Recommendation and Approval DATE: July 15, 2010 Assistant City Engineer Bob Schiesl recommends that a public hearing be set for August 2, 2010, on the Fourth Amendment to Lease Agreement between the City of Dubuque and the Dubuque County Historical Society. concur with the recommendation and respectfully request Mayor and City Council approval. MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Gus Psihoyos, City Engineer Bob Schiesl, Assistant City Engineer Michael C. Van Milligen Masterpiece on the Mississippi Dubuque hattil All- AmencaCity 2007 TO: Michael C. Van Milligen, City Manager Gus Psihoyos, City Engineer FROM: Robert Schiesl, Assistant City Engineer fZ SUBJECT: Dubuque County Historical Society Lease Ice Harbor Lease Amendment No. 4 - Recommendation and Approval DATE: July 15, 2010 INTRODUCTION The purpose of this memorandum is to provide the City Council with information related to the Dubuque County Historical Society's request for an amendment to their existing Ice Harbor lease and request that a date for the public hearing be established. BACKGROUND The Dubuque County Historical Society (DCHS) received a $1,230,000 Vision Iowa RECAT Grant to develop an outdoor plaza between the Woodward Museum /Boatyard Exhibit and the new Diamond Jo National River's Center. The outdoor plaza area, or referred to as the Mississippi Plaza, will provide a connection between the two (2) flagship museum facilities and create an integrated campus setting. A copy of the planning level conceptual rendering of the proposed Mississippi Plaza is attached. DISCUSSION For the development of the proposed Mississippi Plaza, this will require an amendment to the existing DCHS Ice Harbor lease with the City. The amended lease will incorporate the existing National Mississippi River Museum & Aquarium site, the location occupied by Ice Harbor Park and the southerly patio area located behind the Diamond Jo National River's Center. An exhibit showing the revised DCHS lease boundary is shown in the attached Exhibit A. The City is also expecting a Sub -Lease Agreement from Peninsula Gaming for the southerly patio area and acknowledgment that none of proposed Mississippi Plaza improvements will affect the Peninsula Gaming lease payments to the City. Finally, there will also be a Sub Sub -Lease with Peninsula Gaming for the 15 foot strip of land along the southerly Ice Harbor pier wall and for part of the existing parking lot that will be modified as part of the proposed Mississippi Plaza improvements. On the August 2, 2010 City Council Agenda, there will also be a request for the City Council to approve a funding agreement contract with Vision Iowa for the RECAT Grant. RECOMMENDATION recommend that the City Council set August 2, 2010, as the date for a public hearing on the proposed lease amendment between the Dubuque County Historical Society and the City for the development of the proposed Mississippi Plaza. ACTION TO BE TAKEN The City Council is requested to set the date for a public hearing on the proposed lease amendment between the Dubuque County Historical Society and the City for the development of the proposed Mississippi Plaza through adoption of the enclosed resolution. Prepared by Robert Schiesl, Assistant City Engineer cc: Cindy Steinhauser, Assistant City Manager RESOLUTION NO. 264 -10 RESOLUTION OF INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY BY FOURTH AMENDMENT TO LEASE BETWEEN THE CITY OF DUBUQE, IOWA AND DUBUQUE COUNTY HISTORICAL SOCIETY WHEREAS, the City of Dubuque, Iowa (City) and Dubuque County Historical Society (DCHS) entered into a Lease Agreement (Lease) on June 5, 2000 for certain real property (Demised Premises) described in Exhibit A thereto; and WHEREAS, City and DCHS amended the Lease by the First, Second and Third Amendments to Lease Agreement; and WHEREAS, City and DCHS desire to further amend the Lease as set forth in the attached Fourth Amendment; and WHEREAS, the City Council has tentatively determined that it would be in the best interests of the City to approve the Fourth Amendment to the Lease with DCHS. 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 real property described in the Fourth Amendment to Lease between City and DCHS. 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 § 364.7 of a public hearing on the City's intent to dispose of the real property described in the Fourth Amendment to Lease, to be held on the 2 day of August, 2010, at 6:30 o'clock p.m. at the Historic Federal Building, Dubuque, Iowa. Passed, approved and adopted this 19 day of July, 2010. ttest: Jeanne F. Schneider, City Clerk Roy D. uol, Mayor FOURTH AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE COUNTY HISTORICAL SOCIETY This Fourth Amendment to Lease Agreement, dated for reference purposes the day of , 2010, is made and entered into by and between the City of Dubuque, Iowa and Dubuque County Historical Society. WHEREAS, the City of Dubuque, Iowa (Lessor) and Dubuque County Historical Society (Lessee) entered into a Lease Agreement (the Lease) on June 5, 2000 for certain real property (Demised Premises), which Lease has been amended by the First, Second and Third Amendments; and WHEREAS, Lessor and Lessee now desire to further amend the Lease as set forth herein. NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS: 1. Article I is amended to read as follows: 1.1 In consideration of the rents hereinafter reserved and the terms, covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee in addition to the real property shown as Lot A on Exhibit A ( "the Museum "), the real property shown as Lot E on Exhibit A ( "the Plaza ") attached hereto and made a part of this Lease, together with any and all easements and appurtenances thereto and subject to any easements and restrictions of record, but excluding the Pedestrian Access Easement shown on Exhibit A, collectively the "Demised Premises ", to have and to hold for a term of forty (40) years commencing on August 1, 2010 and terminating at 11:59 p.m. on July 31, 2050 ( "the Term ") subject to all of the terms, covenants, conditions and agreements contained herein. Lessor and Lessee acknowledge that there currently exist public transient boat docks erected and maintained by Lessor on Lot A. The parties have agreed to modify the boundaries of Lot A as originally defined in the Lease Agreement to reflect Lot A as shown on Exhibit A attached hereto. Lessor agrees to defend, indemnify and hold Lessee harmless from any and all claims for injury or property damage arising out of and /or incidental to the Lessor's operation and maintenance of the transient boat docks. 071510finalrevl ARTICLE I DEMISE AND TERM 1.2 Commencing on January 1, 2019, the Demised Premises shall also include the real property shown as Lot B on Exhibit A, including the Pedestrian Access Easement shown on Exhibit A, ( "the Patio "). 1.3 If Lessee intends to request an extension of the term of this Lease, Lessee shall not later than five years prior to the expiration of the term of this Lease give Lessor written notice of such intention. Lessor shall negotiate exclusively with Lessee for a period of 180 days thereafter for an extension of this Lease. However, nothing herein shall obligate Lessor to agree to any extension of this Lease. 1.4 Excluded from the Demised Premises shall be the existing sheet pile retaining wall and all maintenance, expenses, and any liability associated therewith. Lessor agrees to indemnify and hold harmless Lessee, its board of directors, employees and agents from any bodily injury or property damage claim including, but not limited to, reasonable attorney's fees and expenses of litigation arising out of and /or incidental to Lessor's maintenance of the existing sheet pile retaining wall. Lessee agrees to allow Lessor the right of access to the Demised Premises for the purpose of maintaining and /or replacing the sheet pile retaining wall at the sole cost of Lessor and shall conduct such maintenance and replacement in a timely and reasonable manner with the intent of providing minimal disruption to the Demised Premises. 1.5 Excluded from the Demised Premises shall be the Pedestrian Access Easement shown on Exhibit A, and all maintenance, expenses, and any liability associated therewith. Lessor agrees to indemnify and hold harmless Lessee, its board of directors, employees and agents from any bodily injury or property damage claim, including, but not limited to, reasonable attorney's fees and expenses of litigation arising out of and /or incidental to the maintenance by Lessor and use by the public of the Pedestrian Access Easement shown on Exhibit A. 2. Article II is amended to read as follows: ARTICLE II RENT 2.1. Lessee shall pay Lessor, in addition to taxes, assessments, and other charges required to be paid under this Lease, rent as follows: 1) For the Museum, One Dollar per year ( "the Museum Rent "). 2) For the Plaza (Lot E): a) The rental value for the first year of the lease (2010) for the Plaza is $120,000 per acre, and as a result the first year rent for the Plaza 2 would be $ 74,400 (0.62 acres). Lessor agrees that the rent for the first year lease for the Plaza for this not - for - profit corporation shall be $ 37,200 ( "the Plaza Base Rent "). The Plaza Base Rent for each successive year of the Lease Term shall be increased effective July 1 by the increase in the COL as of December 31 of each year compared to the COL as of December 31 of the previous year. b) Lessee shall be entitled to a reduction of the Plaza Base Rent in the amount of actual costs incurred by Lessee directly incident to Lessee's programs for providing access to, education of, and outreach to low - income and underserved distressed residents of Dubuque, Iowa or residents who lives in the targeted neighborhoods ( "the Plaza Rent Reduction "). For purposes of this Section, low- income residents means residents whose income is no more than 80% of the Area Median Income. Such costs include, but are not limited to, free and reduced admissions, direct wages, direct program costs, direct marketing costs, and direct administrative costs required to plan, implement, monitor and supervise education and activities, and the expenses related thereto, but excluding indirect costs and overhead for on -site or off -site programming. c) Lessee shall provide to Lessor not later than 90 days after the end of each year of the Term, a request for the Plaza Rent Reduction together with written documentation, and such other supporting information as Lessor may reasonably request. The Plaza Rent Reduction request may include the amounts of all qualifying costs incurred by Lessee and not previously rebated for the immediately preceding two years; but in no event shall the Plaza Rent Reduction exceed the Plaza Base Rent for the immediately preceding two years. Lessor shall review and respond to Lessee's request in writing within sixty (60) days of receipt of such request setting forth the amount of the Plaza Rent Reduction. The review by Lessor shall be conducted in consideration of the objective of providing access to educational opportunities for low- income and underserved residents of the City of Dubuque. In the event Lessor and Lessee disagree as to the value of the Plaza Rent Reduction, the parties shall mutually select one (1) arbitrator and the disagreement shall be settled by binding arbitration. The arbitrator shall have no power to change the lease provisions. Both parties shall continue performing their lease obligations pending the decision of the arbitrator. The costs and expenses of the arbitrator shall be shared equally by the parties. d) The amount of the Plaza Base Rent reduced by the Plaza Rent Reduction shall be paid by Lessee to Lessor within 30 days of Lessee's response to the Plaza Rent Reduction request or within 30 days of receipt of the arbitrator's award, whichever later occurs. In no event shall the Plaza Rent Reduction exceed the Plaza Base Rent. 3) For the Patio (Lot B): 3 a) The rental value for the first year of the lease (2019) for the Patio is $ 120,000 per acre, and as a result the first year rent for the Patio would be $ 60,000 (0.50 acres). Lessor agrees that the rent for the first year lease for the Patio for this not - for - profit corporation shall be $ 30,000 ( "the Patio Base Rent "). The Patio Base Rent for each successive year of the Lease Term shall be increased effective July 1 by the increase in the COL as of December 31 of each year compared to the COL as of December 31 of the previous year. b) Lessee shall be entitled to a rental value reduction in the amount of actual costs incurred by Lessee directly incident to Lessee's programs for providing access to, education of, and outreach to low- income and underserved residents of Dubuque, Iowa or residents who lives in the targeted neighborhoods ( "the Patio Rent Reduction "). Such costs include, but are not limited to, free and reduced admissions, direct wages, direct program costs, direct marketing costs, and direct administrative costs required to plan, implement, monitor and supervise education and activities, and the expenses related thereto, but excluding indirect costs and overhead for on -site or off -site programming. c) Lessee shall provide to Lessor not later than 90 days after the end of each year of the Term, a request for the Patio Rent Reduction together with written documentation, and such other supporting information as Lessor may reasonably request. The Patio Rent Reduction request may include the amounts of all qualifying costs incurred by Lessee and not previously rebated for the immediately preceding two years; but in no event shall the Patio Rent Reduction exceed the Patio Base Rent for the immediately preceding two years. Lessor shall review and respond to Lessee's request in writing within sixty (60) days of receipt of such request setting forth the amount of the Patio Rent Reduction. The review by Lessor shall be conducted in consideration of the objective of providing access to educational opportunities for low- income and underserved residents of the City of Dubuque. In the event Lessor and Lessee disagree as to the amount of the Patio Rent Reduction, the parties shall mutually select one (1) arbitrator and the disagreement shall be settled by binding arbitration. The arbitrator shall have no power to change the lease provisions. Both parties shall continue performing their lease obligations pending the decision of the arbitrator. The costs and expenses of the arbitrator shall be shared equally by the parties. d) The amount of the Base Patio Rent reduced by the Patio Rent Reduction shall be paid by Lessee to Lessor within 30 days of Lessee's response to the Plaza Rent Reduction request or within 30 days of receipt of the arbitrator's award, whichever later occurs. In no event shall the Patio Rent Reduction exceed the Patio Rent. ARTICLE XXIII ACCESS TO DEMISED PREMISES 4 23.1. Lessee agrees to provide Lessor a twenty -foot wide public access easement to the Ice Harbor over the Demised Premises at a location designated by Lessor and subject to Lessee's approval, which shall not be unreasonably withheld. Such easement shall in no event extend in a westerly direction beyond a north -south line extending from the southwesterly corner of the utility room of the National River Center Building to the Ice Harbor. Lessee reserves the right hereunder to erect and maintain a boundary fence extending along the north - south line described in the preceding sentence. Further, Lessee agrees to permit access to the Ice Harbor over the Demised Premises for emergency purposes. Lessor agrees that once the location of the access easement has been determined, Lessor shall not require alternate non - emergency access to the Ice Harbor over the Demised Premises unless expressly permitted by Lessee in a separate agreement. Lessee reserves the right, subject to Lessor's prior written approval of plans therefor, to erect and maintain a north -south boundary gateway from the northeast corner of the covered walkway to the Ice Harbor. The twenty -foot wide public access easement located between the boundary fence permitted in the preceding paragraph and the boundary gateway permitted herein shall be open to the public during such times as Lessor shall determine. Lessee shall permit public access through the boundary fence and gateway fence at all times for emergency purposes. 23.2. Lessee agrees to allow Lessor to install and maintain an underground fuel system to service the Ice Harbor Transient Marina Facility at a location on the Demised Premises as selected by Lessor. Lessor shall maintain complete and sole liability and responsibility for the fuel system and the maintenance thereof. Lessor agrees to defend, indemnify and hold Lessee harmless for any and all claims for injury or property damage caused by the use of the underground fuel system. Lessee agrees to be responsible for the complete repair of any damage to private property within the Demised Premises caused by the installation, maintenance, repair or replacement of the underground fuel tanks. Lessor further agrees to be responsible for the complete repair of any damage to public property within the Demised Premises caused by the installation of and any ongoing maintenance of the underground fuel tanks. Lessor shall exercise its rights hereunder in such manner as to cause minimal disruption to Lessee's operations and shall make every reasonable effort to limit the damage or repair costs . 23.3. Lessee agrees to allow Lessor the right of access to the Demised Premises for the purpose of maintaining and /or replacing any and all existing public utilities, infrastructure, equipment and for maintenance needs of Lessor's adjoining property at the sole cost of Lessor and shall conduct such maintenance and replacement in a timely and reasonable manner with the intent of providing minimal disruption to the Demised Premises. Lessor agrees to be responsible for 5 the complete repair of any damage to public property caused by the maintenance, repair or replacement of said public utilities, infrastructure or equipment. Lessee agrees to be responsible for the complete repair of any damage to private property within the Demised Premises caused by the maintenance, repair or replacement of said public utilities, infrastructure or equipment. Lessor shall exercise its rights hereunder in such manner as to cause minimal disruption to Lessee's operations and shall make every reasonable effort to limit the damage or repair costs. 23.4. Lessee agrees to be responsible for and shall incur all costs associated with impacts to or modifications thereon to any existing public utilities, infrastructure or facilities within the Demised Premises as a result of the Lessee's improvements or modifications thereto. 23.5. Lessee agrees that any public fixtures or equipment within the Demised Premises that is removed as a result of the Lessee's improvements or modifications thereto shall remain the property of the Lessor. 23.6. Lessee agrees to be responsible for and shall incur all costs associated with impacts to any and all private utilities located within the Demised Premises as a result of the Lessee's improvements or modifications thereto. 23.7. Lessee agrees to allow private utility providers /owners the right of reasonable access to the Demised Premises for the purpose of maintaining and /or replacing any and all existing private utilities, infrastructure and equipment, at the sole cost of the private utility provider /owner such maintenance and replacement shall be conducted in a timely and reasonable manner with the intent of providing minimal disruption to the Demised Premises. Said private utility provider /owner shall be responsible for the complete repair of any damage to the Demised Premises caused by such utility maintenance or replacement. 23.8. Lessor acknowledges and authorizes Lessee to remove the existing concrete from the Demised Premises for purposes of construction of an outdoor plaza area to be utilized for purposes related to the National Mississippi River Museum and Aquarium. Lessee agrees to clean, seal and maintain any remaining or newly installed decorative concrete located within the Demised Premises in compliance with City standards. Lessee agrees to clean, seal and maintain all decorative concrete located within the Demised Premises on a two - year cycle as required to maintain the appearance and integrity of said decorative concrete. Lessee agrees to incur all costs associated with the cleaning, sealing and maintenance of said decorative concrete pavement surfaces within the Demised Premises. 3. The following new Article 24 is added: 6 ARTICLE XXIV ENVIRONMENTAL 24.1. Lessor shall assume liability and shall indemnify and hold Lessee harmless against all liability or expense arising from any condition which existed, whether known or unknown, at the time of execution of this Lease which condition is not a result of actions of Lessee or which condition arises after date of execution but which is not a result of actions of Lessee. 24.2. Lessee. Lessee expressly represents and agrees: 1) During the lease Term, Lessee's use of the Demised Premises shall not include the use of any hazardous substance without Lessee first obtaining the written consent of Lessor. Lessee understands and agrees that Lessor's consent is at Lessor's sole option and complete discretion and that such consent may be withheld or may be granted with any conditions or requirements that Lessor deems appropriate. 2) During the lease Term, Lessee shall be fully liable for all costs and expenses related to the use, storage, removal and disposal of hazardous substances used or kept on the property by Lessee, and Lessee shall give immediate notice to Lessor of any violation or any potential violation of any environmental regulation, rule, statute or ordinance relating to the use, storage or disposal of any hazardous substance. 3) Lessee, at its sole cost and expense, agrees to remediate, correct or remove from the premises any contamination of the property caused by any hazardous substances which have been used or permitted by Lessee on the premises during any term of this Lease. Remediation, correction or removal shall be in a safe and reasonable manner, and in conformance with all applicable laws, rules and regulations. Lessee reserves all rights allowed by law to seek indemnity or contribution from any person, other than Lessor, who is or may be liable for any such cost and expense. 4) Lessee agrees to indemnify and hold Lessor harmless from and against all claims, causes of action, damages, loss, costs, expense, penalties, fines, lawsuit, liabilities, attorney fees, engineering and consulting fees, arising out of or in any manner connected with hazardous substances, which are caused or created by Lessee during the term of this Lease including, but not limited to, injury or death to persons or damage to property, and including any diminution of the value of the Demised Premises which may result from the foregoing. This indemnity shall survive the cessation, termination, abandonment or expiration of this Lease for a period of five years. 4. This Fourth Amendment is subject to the execution of a sublease between Lessee and Peninsula Gaming, L.L.C. for Lot B (the Plaza), and a sub- 7 sublease between Lessee and Peninsula Gaming, L.L.C. of Lot D and for that part of Lot E subleased by Dubuque Racing Association to Peninsula Gaming, L.L.C. necessary for the construction of the Plaza. 5. All other terms and conditions of the Lease shall remain in full force and effect. LESSOR: LESSEE: CITY OF DUBUQUE, IOWA DUBUQUE COUNTY HISTORICAL SOCIETY By: By: Roy D. Buol, Mayor Attest: Attest: Jeanne F. Schneider City Clerk 8 3RD STREET I. U COAST GUARD PEDESTRAIN ACCESS EASEMENT 15 WIDE LOT A (5.12 ACRE) ® LOT B (0.50 ACRE) Ian LOT D 15 Wide (0.11 ACRE) OM LOT E (0.62 ACRE) EXHIBIT "A" REVISED PER FOURTH AMENDMENT MISSISSIPPI RIVER RIDES Dubuque 0 100' 200' SCALE 1" = 200' FEET CITY OF DUBUQUE ENGINEERING DEPARTMENT CITY HALL, 60 WEST 1Uth 9I 'pu]tN 62001 -6666 E nqH )665 o (4163,15•0-4208 b L CHASM. f . 1011.009, ., 1011.009, z M (ol ioio PORT OF DUBUQUE MUSEUM LEASE EXHIBIT 'A' 51.1 MAW, • PLAZA PLAN A DINING AAAAACC 'i) • PLAZA PLAN B DURRANT' it' E MT. VFW MOM. Ural L•0.1 GENERAL PLAZA PLAN