Engine House #1 Lease with MT, LLC_ Former Housing Dept. BuildingMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
heirg
All - America City
t 1 1 1 If
2007
SUBJECT: Resolution Setting Public Hearing for Lease of Engine House #1 between
the City of Dubuque and Engine House #1 MT, LLC
DATE: February 1, 2011
Economic Development Director Dave Heiar recommends the City Council set a public
hearing for February 22, 2011, on a proposed 40 -year lease between the City of
Dubuque and Engine House #1 MT, LLC., a subsidiary of Dubuque Initiatives, for
Engine House #1, which formerly housed the Housing Department offices.
Crescent Community Health Center and the Head Start program have identified an
interest in leasing portions of this building; however, the building will need to be
renovated to accommodate these tenants. The goal is to historically rehabilitate the
building using historic tax credits (HTC) as a revenue source. The City is ineligible for
HTC's and must turn long -term control over to a separate entity through a long -term
lease. Engine House #1, MT, LLC. is controlled by Dubuque Initiatives, a local not -for-
profit corporation. Engine House #1 MT, LLC. was created to undertake this historic
renovation.
The project is pursuing HTCs because there is a desire to rehabilitate the building back
to its historic condition much like it appeared when it was the first fire station in
Dubuque. This historic renovation will add some cost to the project which can be offset
by receiving HTCs. It is anticipated that this rehabilitation project will also serve as a
potential stimulus to enhance the renovation of other buildings in this area.
The proposed 40 -year lease will provide Engine House #1 MT, LLC with control of the
property during the rehabilitation process. The City agrees to provide a construction
loan to Engine House #1 MT, LLC for expenses related to this rehabilitation project.
Dubuque Initiatives and Engine House #1 MT, LLC. will incur any costs in the process
that are not reimbursed by the City. The City shall receive $1.00 per year through the
8 year and then $10,000 per year. Once the Historic Tax Credit recapture period
expires in seven years, however, the parties could consider other arrangements or
terms.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mi hael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
TO:
FROM:
SUBJECT:
DATE:
Masterpiece on the Mississippi
Michael Van Milligen, City Manager
David J. Heiar, Economic Development Director
Resolution Setting Public Hearing for Lease of Engine House #1 between the
City of Dubuque and Engine House #1 MT, LLC
January 25, 2011
F: \USERS \Econ Dev \18th Street Fire Station\20110126 Memo Notice of Lease.doc
Dubuque
AM- Amedca ley
111 If
2007
INTRODUCTION
This memorandum recommends approval of a resolution setting a public hearing on a proposed
lease between the City of Dubuque and Engine House #1 MT, LLC., a subsidiary of Dubuque
Initiatives for Engine House #1 which formerly housed the Housing Department offices.
BACKGROUND
The Housing Department moved into their new offices at the Federal Building in 2008 and since
that time their former offices on 18 Street have remained vacant. The Housing Department
released an RFP for ideas on re- utilization of the facility. The Crescent Community Health
Center and the Head Start program have identified an interest in leasing portions of the building.
The building will need to be renovated to accommodate these tenants. The goal is to historically
rehabilitate the building using historic tax credits as one of the revenue sources. To facilitate
additional funding from the State and Federal Historic Tax Credit (HTC) programs, the building
must be controlled by an entity eligible to receive HTCs.
DISCUSSION
The City is ineligible for HTCs and must turn long -term control over to a separate entity through
a Tong -term lease. Engine House #1, MT, LLC, a subsidiary of Dubuque Initiatives, is a local
not - for - profit corporation, created to undertake this historic renovation.
The project is pursuing HTCs because there is a desire to rehabilitate the building back to its
historic condition much like it appeared when it was a fire station. This historic renovation will
add some cost to the project which can be offset by receiving HTCs. It is anticipated that this
rehabilitation project will also serve as a potential stimulus to enhance the renovation of other
buildings in this area.
The proposed 40 -year lease will provide Engine House #1 MT, LLC with control of the property
during the rehabilitation process. The City agrees to provide a construction loan to Engine
House #1 MT, LLC for expenses related to this rehabilitation project. A copy of the proposed
lease is attached.
RECOMMENDATION /ACTION STEP
I recommend approval of the attached resolution setting a public hearing on the proposed lease
of Engine House #1 to Engine House #1 MT, LLC.
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of Dubuque, Iowa.
Date of Meeting: February 7, 2011
Time of Meeting: 6:30 o'clock P.M.
Place of Meeting: Historic Federal Building, 350 West 6th Street,
Dubuque, Iowa.
City Clerk, Dubuque, Iowa
(This Notice to be posted)
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for said
meeting is as follows:
• Resolution to Set Hearing on Disposal of Interest in Real Property to
Engine House #1 MT, LLC.
Such additional matters as are set forth on the additional 13 page(s) attached hereto.
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of said governmental body.
The City Council of Dubuque, Iowa, met in regular session, in the Historic Federal
Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date.
There were present Mayor Roy D. Buol, in the chair, and the following named Council
Members:
Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick
Absent: Dirk Voetberg
February 8, 2011
Council Member Ric Jones introduced the following Resolution entitled
"RESOLUTION TO SET HEARING ON DISPOSAL OF INTEREST IN REAL
PROPERTY TO ENGINE HOUSE #1 MT, LLC ", and moved that the same be adopted.
Council Member Kevin Lynch seconded the motion to adopt. The roll was called and the
vote was,
AYES: Braig, Buol, Connors, Jones, Lynch, Resnick
NAYS: None
Whereupon, the Mayor declared the resolution duly adopted as follows:
RESOLUTION NO. 39 -11
RESOLUTION TO SET HEARING ON DISPOSAL OF
INTEREST IN REAL PROPERTY TO ENGINE HOUSE #1
MT, LLC
WHEREAS, the City has received a proposal to transfer possession, by means of a
lease agreement, of the real property owned by the City and located at 1805 Central
Avenue, Dubuque, Iowa (the "Property ") to Engine House #1 MT, LLC, an Iowa limited
liability company (the "Developer "); and
WHEREAS, the City Council has determined that the rehabilitation and
reconstruction of said Property under the terms of the lease agreement proposed by the
Developer is in the best interests of the City and the residents thereof; and
WHEREAS, Section 364.7 of the Iowa Code requires that a public hearing be held
on the proposal to dispose of an interest in real property.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
DUBUQUE, IOWA:
Section 1. That this Council meet in the Historic Federal Building, 350 West
6th Street, Dubuque, Iowa, at 6:30 o'clock P.M. on the 22 day of February, 2011, for the
purpose of taking action on the matter of disposing of an interest in real property, by
means of a lease agreement, to Engine House #1 MT, LLC.
-3-
Section 2. That the Clerk is hereby directed to cause at least one publication to
be made of a notice of said hearing, in a legal newspaper, printed wholly in the English
language, published at least once weekly, and having general circulation in said City, said
publication to be not less than four clear days nor more than twenty days before the date
of said public hearing.
Section 3.
following form:
That the notice of the public hearing shall be in substantially the
NOTICE OF MEETING OF THE CITY COUNCIL OF DUBUQUE,
IOWA, ON THE MATTER OF DISPOSING OF AN INTEREST IN
REAL PROPERTY LOCATED AT 1805 CENTRAL AVENUE IN THE
CITY OF DUBUQUE TO ENGINE HOUSE #1 MT, LLC
PUBLIC NOTICE is hereby given that the Council of the City of Dubuque, Iowa,
will hold a public hearing on the 22 day of February, 2011, at 6:30 o'clock, P.M., in the
Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at which meeting the
Council proposes to take additional action on the proposal to dispose of an interest in real
property, by means of a lease agreement, to Engine House #1 MT, LLC (the
"Developer "), regarding property located at 1805 Central Avenue, Dubuque, Iowa (the
"Property "). The proposed lease agreement would obligate the Developer to rehabilitate
and reconstruct the Property and thereafter lease the same for non -profit or commercial
office use.
At the above meeting the Council shall receive oral or written objections from any
resident or property owner of said City to the proposal. After all objections have been
received and considered, the Council will at this meeting or at any adjournment thereof,
take additional action on the proposal or will abandon the proposal.
This notice is given by order of the Councifof Dubuque, Iowa, as provided by
Sections 364.7 and 362.3 of the City Code of Iowa.
Dated this 1l day of February, 2011.
/s /Jeanne F. Schneider, CMC
City Clerk
(END OF NOTICE)
ATTEST:
PASSED AND APPROVED this 7th day of February , 2011.
i
Mayor
STATE OF IOWA
COUNTY OF DUBUQUE
I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is
a true and complete copy of the portion of the corporate records of said Municipality
showing proceedings of the Council, and the same is a true and complete copy of the
action taken by said Council with respect to said matter at the meeting held on the date
indicated in the attachment, which proceedings remain in full force and effect, and have
not been amended or rescinded in any way; that meeting and all action thereat was duly
and publicly held in accordance with a notice of meeting and tentative agenda, a copy of
which was timely served on each member of the Council and posted on a bulletin boar
or other prominent place easily accessible to the public and clearly designated for that
purpose at the principal office of the Council (a copy of the face sheet of said agenda
being attached hereto) pursuant to the local rules of the Council and the provisions of
Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at
least twenty -four hours prior to the commencement of the meeting as required by said
law and with members of the public present in attendance; I further certify that the
individuals named therein were on the date thereof duly and lawfully possessed of their
respective city offices as indicated therein, that no Council vacancy existed except as may
be stated in said proceedings, and that no controversy or litigation is pending, prayed or
threatened involving the incorporation, organization, existence or boundaries of the City
or the right of the individuals named therein as officers to their respective positions.
WITNESS my hand and the seal of said Municipality hereto affixed this 8 day of
February, 2011.
SEAL
) SS
CERTIFICATE
F: \USERS\Econ Dev \18th Street Fire Station\20110118 Reso notice of lease.doc \10422.121
ity Clerk, Dubuque, Iowa
-7-
CIG -3
LEASE AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
ENGINE HOUSE #1 MT, LLC
THIS LEASE AGREEMENT (the "Lease ") dated for reference purposes the
day of , 2011, is made and entered into by and between the
City of Dubuque, Iowa, an Iowa municipal corporation, with principal offices at City Hall,
50 West 13th Street, Dubuque, Iowa 52001 ( "Landlord ") and Engine House #1 MT,
LLC, an Iowa limited liability company, with principal offices at 700 Locust Street, Suite
#195, Dubuque, Iowa ( "Tenant ").
WITNESSETH:
SECTION 1. PREMISES.
1.1 Landlord, for and in consideration of the rents to be paid and the covenants and
agreements hereinafter contained to be kept and performed by Tenant, does hereby
demise and lease unto Tenant, and Tenant does hereby take and hire from Landlord,
property located at 1805 Central Avenue, within the City of Dubuque, Iowa (the
"Premises ").
1.2 To have and to hold the Premises unto Tenant, its successors and permitted
assigns, for a term ( "Term ") of forty (40) Lease Years (as hereinafter defined)
commencing on the 1 day of March, 2011 (the "Commencement Date ") and ending at
midnight (unless this Lease shall be sooner terminated as hereinafter provided) on the
28 day of February, 2041 Termination Date "). The first "Lease Year" shall begin on
the Commencement Date and shall end on the last day of the twelfth (12th) full month
thereafter. Subsequent Lease Years shall begin on the first day following the end of the
preceding Lease Year.
SECTION 2. RENT.
2.1 Tenant covenants to pay rent to Landlord, at City Hall, 50 West 13th Street,
Dubuque, Iowa 52001, or at such other place Landlord, from time to time, shall
designate in writing from and after the Commencement Date until the Termination Date,
annual rental as follows:
All rental due hereunder shall be paid in advance on the first day of each Lease Year,
EngineHouseLease_121610baI
Lease Years Annual Rental
1 -8
8 -40
$1
$10,000
without any deduction or set -off whatsoever.
2.2 Any payment of rent or other charges or other money due Landlord from Tenant
pursuant to this Lease, paid after five (5) days after the due date thereof shall, at the
option of Landlord, bear interest from the due date to the date of such payment at the
rate of twelve percent (12 %) per annum. Any late charge or interest due hereunder shall
be payable as additional rent. Any payment by Tenant or acceptance by Landlord of a
lesser amount than shall be due from Tenant to Landlord shall be treated as a payment
on account. The acceptance by Landlord of a check for a lesser amount with an
endorsement or statement thereon, or in any letter accompanying such a check, that
such lesser amount is payment in full, shall be given no effect, and Landlord may accept
such check without prejudice to any other rights or remedies which Landlord may have
against Tenant.
SECTION 3. PAYMENT OF TAXES AND OTHER CHARGES.
3.1 Tenant shall, during the Term of this Lease, as additional rent, pay and
discharge punctually, as and when the same shall become due and payable, (i) all
taxes, special and general assessments, water rents, rates and charges, sewer rents
and other governmental impositions and charges of every kind and nature whatsoever,
extraordinary as well as ordinary (hereinafter referred to as "Taxes "), and each and
every installment thereof which shall or may during the Term of this Lease be charged,
levied, laid, assessed, imposed, become due and payable, or liens upon or for or in
respect of the Premises or any part thereof, or any buildings, appurtenances, or
equipment owned by Tenant thereon or therein or any part thereof, together with all
interest and penalties thereon, under or by virtue of all present or future laws,
ordinances, requirements, orders, directives, rules or regulations of the Federal, State,
County, and City governments and of all other governmental authorities whatsoever (all
of which shall also be included in. the term "Taxes" as heretofore defined) and upon
demand shall submit proof to Landlord of each payment thereof immediately upon
making same and (ii) all charges for water, steam, heat, gas, electricity, light and power,
and other utility, utilities, service or services, furnished to the Premises during the Term
of this Lease (hereinafter referred to as "Utility Expenses "). No Taxes or Utility
Expenses levied, imposed or assessed against the Premises during the Lease Term
shall be the obligation of Landlord and all of such Taxes and Utility Expenses shall be
paid by Tenant.
3.2 All Taxes which shall become payable during the calendar or fiscal tax year, as
the case may be, in which the Term of this Lease terminates, shall be apportioned pro
rata between Landlord and Tenant in accordance with the respective periods of such
year during which the Term of this Lease shall be in effect and Tenant shall pay only
that proportion thereof which the part of such period within the Term of this Lease bears
to the entire period.
3.3 Landlord covenants and agrees that if there shall be any refunds or rebates on
account of the Taxes paid by Tenant under the provisions of this Lease, such refund or
2
rebate shall belong to Tenant. Any refunds received by Landlord shall be deemed trust
funds and as such are to be received by Landlord in trust and paid to Tenant forthwith.
3.4 Tenant shall, during the Term of this Lease, pay and discharge promptly when
due, all taxes assessed against and leased by Tenant, Tenant's fixtures, furnishings,
equipment, trade fixtures and inventory placed in or on the Premises during the Term of
this Lease.
3.5 Nothing contained in this Lease shall require or be construed to require Tenant to
pay any franchise, corporate, estate, inheritance, succession, capita] levy or transfer tax
of Landlord, or any income, profits or revenue tax or charge upon the rent payable by
Tenant under this Lease; provided, however, that if at any time during the Term hereof,
under the laws of the United States or any state or political subdivision thereof in which
the Premises are. situated, a tax on rents or other charge by whatever name called is
levied, assessed or imposed against Landlord or the rent payable hereunder to
Landlord, as a substitute in whole or in part for or in addition to any taxes on real estate,
Tenant, in addition to its obligations for payment of all Taxes hereunder, shall pay as
additional rent hereunder, such tax or other charge promptly as the same shall become
due and payable.
SECTION 4. CONTEST OF TAXES AND OTHER CHARGES. During the Term of
this Lease, upon obtaining the prior written consent of Landlord, which consent Landlord
agrees not to unreasonably withhold or delay, Tenant shall have the right to contest by
appropriate proceedings the amount or validity of any Taxes or other charges which
Tenant is obligated to pay in accordance with the provisions of the preceding Section 3.
Tenant shall, nevertheless, promptly pay the same, and nothing contained herein shall
be deemed to confer upon Tenant any right to postpone or defer such payment for any
such purpose. Upon the termination of such proceedings, Tenant shall pay the amount
of any such Taxes including any additional Taxes or other charges as finally determined
therein, the obligation for which may have been incurred by reason of the prosecution of
such proceeding, together with all fees, penalties or other liabilities in connection
therewith. Landlord shall not be required to join in any proceedings under this Section 4
unless any law now or hereafter in effect shall require that such proceedings be brought
by and /or in the name of Landlord or any owner of the Premises, in which event
Landlord shall join in any such proceedings or permit the same to be brought in its
name. Landlord shall not be subject to any liability for the payment of costs or
expenses in connection with such proceedings, and Tenant shall indemnify Landlord
and save Landlord harmless from and against all such costs and expenses.
SECTION 5. INDEMNIFICATION: INSURANCE.
5.1 Tenant covenants and agrees that it will defend, indemnify and save Landlord
harmless from and against any penalties, damages, charges or costs imposed or
resulting from any violation of any law, order of governmental agency or ordinance,
whether occasioned by the neglect of Tenant or those holding under Tenant, and that
3
except as set forth in Section 5.2 below, Tenant will at all times protect, indemnify and
save Landlord harmless against and from all claims, losses, costs, damages or
expenses arising out of or from any accident or other occurrence on or about the
Premises during the Term of this Lease causing injury to any person or property
whomsoever or whatsoever, and will defend, indemnify and save Landlord harmless
from and against any and all claims and against any and all losses, costs, damages or
expenses arising out of any failure of Tenant in any respect to comply with or perform all
the requirements and provisions of this Lease.
5.2 During the Term of this Lease, Landlord covenants and agrees that, Landlord
shall procure and continue in force in the names of the Landlord and Tenant, as their
interests may appear, comprehensive commercial general liability insurance against any
and all claims for injuries to persons occurring in, upon or about the Premises, including
all damage from signs, glass, awnings, fixtures or other appurtenances now or hereafter
erected on the Premises during the Term of this Lease, such insurance at all times to be
in aggregate amounts with a minimum combined single limit not Tess than
Million and No /100ths Dollars
($ ) for injury to persons or property. The premiums on such
insurance shall be deemed additional rent to be paid by Landlord. Such insurance shall
further provide that the insurance may not be canceled, terminated or modified unless
the insurer gives Landlord at least fifteen (15) days prior written notice thereof.
Notwithstanding the provisions herein, Landlord may elect to self- insure for the
insurance requirements under this Section 5.2 and in such event, Landlord shall
indemnify, defend and hold Tenant harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including reasonable attorneys'
fees, consultants fees, and expert fees) which arise during or after the Lease Term
which would have been covered by the insurance required to be obtained under this
Section 5.2. In addition, in the event of Landlord's self- insuring for such risks, such
reasonable charge as is determined by Landlord (not to exceed premiums which would
otherwise be paid for such insurance to a third party) shall be deemed additional rent to
be paid by Tenant unto Landlord upon demand.
5.3 During the Term of this Lease, Landlord covenants and agrees that, Landlord
shall, at its own cost and expense, procure and continue in force, for the benefit of
Landlord, Tenant and the holder of any mortgage on the Premises, as their respective
interests may appear, policies of insurance insuring the Premises against loss or
damage by fire or lightning; against loss or damage by other risks including, but not
limited to, riot and civil commotion, vandalism and malicious mischief; and against such
other risks or hazards as Landlord and Tenant from, time to time reasonably agree in an
amount sufficient to prevent Landlord or Tenant from becoming a co- insurer under the
terms of the applicable policies, but in any event in an amount not less than 100% of the
then full replacement cost of the improvements comprising the Premises (exclusive of
the cost of excavations, foundations and footings below the lowest basement floor),
Tenant's personal property, equipment, trade fixtures and inventory, all without
deduction for physical depreciation. The premiums on such insurance shall be deemed
additional rent to be paid by Tenant unto Landlord upon demand. The proceeds of such
4
insurance shall be payable in accordance with Section 13 of this Lease. Tenant shall,
not carry any insurance concurrent in coverage and contributing in the event of loss with
any insurance required to be furnished by Landlord hereunder if the effect of such
separate insurance would be to reduce the protection or the payment to be made under
Landlord's insurance.
5.4 Except as expressly provided in Section 5.2 above, each of Landlord and Tenant
hereby releases the other from all liability to the other or anyone claiming under them by
way of subrogation or otherwise for any loss specifically required to be insured against
hereunder (including deductible portions), by such party even if such loss shall have
been caused by the fault or negligence of the other party, or anyone for whom such
party may be responsible. All insurance policies carried by either party covering the
Premises, including but not limited to contents, fire and casualty insurance and the
policies required to be carried by Tenant hereunder, shall expressly waive any right on
the part of the insurer against the other party. The parties hereto agree that such
policies will include such waiver clause or endorsement.
SECTION 6. MAINTENANCE TO AND REPAIRS OF THE PREMISES.
6.1 Tenant acknowledges that it has undertaken its own examination of the physical
condition of the Premises, the quality of construction, workmanship, or materials
provided in connection with the Premises, the compliance by the Premises with
applicable legal requirements, the engineering or economic feasibility or viability of the
Premises, and the desirability, merchantability, or fitness of the Premises for any
specific purpose and that Tenant is leasing the Premises solely in reliance on its
investigation of the Premises and subject to all latent and /or patent defects, if any. It is
expressly understood and acknowledged that the Premises is being leased by Tenant in
its "AS IS" present physical condition and Tenant is accepting the Premises in such
condition and is assuming all risk of adverse physical characteristics and existing
conditions.
6.2 Landlord shall, at all times during the Term of this Lease, and at its sole cost and
expense, keep and maintain the Premises in a good state of repair and condition,
including, without limitation, the interior, exterior, structural and non - structural
components of the Premises. Landlord's obligation to maintain the Premises also shall
include ordinary and extraordinary, and unforeseen and foreseen maintenance of the
Premises and of the building and improvements thereon, including, but not limited to the
repairs or replacements of the exterior walls, interior walls, heating, air conditioning and
ventilating systems serving the Premises, windows, doors, glass (which shall be
replaced with glass of the same size and quality), electrical, plumbing and sewage lines
and fixtures serving and within the Premises, floor coverings and ceilings, all docks,
conveyors, fire extinguishers and building appliances of every kind as well as all items,
fixtures and improvements comprising the Premises. When used herein, the term
"repairs" shall include all necessary replacements, renewals, alterations, additions and
betterments. All repairs made by Landlord shall be equal in quality and class to all
original work. Tenant shall not be required to furnish any services or facilities or to make
5
any repairs or alterations in or to the Premises. Landlord hereby assumes the full and
sole responsibility for the condition, repair, replacement, maintenance and management
of the Premises. Landlord shall keep the Premises, sidewalks, and building entrance in
a clean and orderly condition, free of dirt, rubbish, snow, ice and unlawful obstructions.
6.3 Landlord represents and warrants to Tenant that to Landlord's knowledge, the
operation and maintenance of the Premises has been conducted in compliance with all
applicable laws, regulations and ordinances.
SECTION 7. ALTERATIONS AND ADDITIONS.
7.1 Except as set forth in Section 28 hereof, Tenant covenants and agrees not to
make or permit to be made any alterations, improvements and additions to the
Premises or any part thereof except by and with the prior written consent of Landlord.
7.2 All alterations, improvements and additions to the Premises permitted to be
made by Tenant shall be made in accordance with all applicable laws and, except for
removable trade fixtures, shall at once when made or installed be deemed to have
attached to the freehold and to have become the property of Landlord and shall remain
for the benefit of Landlord at the end of the Term or other expiration of this Lease.
Tenant shall maintain all such alterations, improvements and additions in as good order,
repair and condition as they were when installed, reasonable wear and tear and Toss by
fire or other casualty referred to in Section 13.2 and covered by insurance excepted.
7.3 In the event such alterations, improvements and additions as herein provided are
made, Tenant further agrees to indemnify and save Landlord harmless from all costs,
expenses, liens, claims or damages arising out of, or resulting from the undertaking or
making of such alterations, additions or improvements.
7.4 All alterations and additions shall be made and performed promptly in a good and
workmanlike manner. Throughout the progress thereof, Tenant, at its sole expense,
shall maintain, or cause any contractor hired by Tenant to maintain, workers'
compensation insurance covering all persons employed in connection therewith and
with respect to whom death or injury claims could be asserted against Landlord, Tenant
or the Premises, and general public liability insurance for the mutual benefit of Tenant
and Landlord (such insurance to afford protection to such limits and to conform to the
provisions of Section 5 hereof applicable to general public liability insurance).
7.5 Notwithstanding any other provision of this Section 7, no alterations shall be
made by Tenant which would cause a recapture of the anticipated tax credits to be
received in connection with the Rehabilitation (as hereinafter defined).
SECTION 8. MECHANIC'S LIENS.
8.1 Prohibition of Liens on Fee or Leasehold Interest. Tenant shall not suffer or
permit any mechanics' liens, materialmen's or other liens to be filed against the fee
6
interest of the land constituting the Premises. Except for this Lease, the Lease and the
Mortgage, Landlord shall not sell or otherwise dispose of, or grant or convey or cause to
be filed any mortgage lien, mechanics' lien, restriction or other lien or encumbrance
against, the fee interest of the land constituting the Premises.
8.2 Removal of Liens by Lessee. If any such mechanics' liens or materialmen's
liens shall be recorded against Landlord's fee interest in the Premises, Tenant shall
cause the same to be removed or, in the alternative, if Tenant in good faith desires to
contest or to permit to be contested the same, Tenant shall be permitted to do so but in
such case Tenant hereby agrees to cause any party so contesting, including any
sublessee, to indemnify and save Landlord harmless from all liability for damages
occasioned thereby and shall, in the event of a judgment of foreclosure upon said
mechanics' lien, cause the same to be discharged and removed prior to the execution of
such judgment. In the event that Tenant shall fail to remove any such liens(s) in the
manner herein provided, then Landlord may, but shall not be obligated to, take such
action or actions as it deems appropriate to cause the removal of such lien(s).
SECTION 9. OBEDIENCE TO GOVERNMENTAL AUTHORITY AND
REQUIREMENTS OF INSURANCE POLICIES. At all times during the Term of this
Lease, including any periods in which any alterations, additions, or repair work are in
progress in, on or about the Premises or any building, structure or other improvement
now or any time hereafter situated thereon, Tenant, at its sole expense, shall promptly
and fully comply with all laws, ordinances, orders, rules, regulations and requirements of
all federal, state and municipal, governments and the appropriate departments,
commissions, boards and officers thereof, which are applicable to the Premises, the
buildings, structures and other improvements now or at any time thereafter situated
thereon, or the sidewalks, vaults, curbs, gutters or areaways adjoining the Premises, or
which are applicable to the use or manner of use of any of the foregoing. Tenant
likewise shall observe and comply with the requirements of all policies of insurance of
whatsoever nature which Tenant is required to maintain pursuant to the provisions
hereof. The provisions and conditions in Section 7 applicable to alterations, repairs and
other work shall similarly apply to work required to be done under this Section 9.
Tenant shall have the right to contest by appropriate legal proceedings, without cost or
expense to Landlord, the validity of any law, ordinance, order, rule, regulation or
requirement of the. nature referred to in this Section 9, under the same conditions as in
the case of Taxes and other charges, as provided in Section 4 hereof.
SECTION 10. LANDLORD'S ACCESS TO THE PREMISES.
10.1 Tenant covenants and agrees to permit Landlord and Landlord's agents, at
reasonable times during normal business hours, and upon not less than twenty -four (24)
hours' prior written notice, to inspect and examine the Premises and, subject to Section
6.3, to permit Landlord to make such repairs to the Premises which Tenant has failed so
to do, and to permit access to the Premises for other reasonable purposes without the
same being construed as an eviction of Tenant in whole or in part, and the rent shall in
no wise abate while such repairs are being made by reason of Toss or interruption of the
7
business of Tenant- because of the prosecution of such work. Tenant shall have the
right, at its option, to have an agent or representative of Tenant present during all such
inspections and examinations by Landlord and also during the performance of any work
permitted to be performed by Landlord hereunder. All such inspections, examinations
and work undertaken by Landlord shall be performed in such reasonable manner as will
minimize any interference with Tenant's occupancy and use of the Premises.
10.2 Landlord and its agents also shall have the right to enter upon the Premises at
any reasonable time after reasonable prior notice for the purpose of exhibiting the same
to prospective purchasers or mortgagees and for a period commencing sixty (60) days
prior to the expiration of this Lease for the purpose of exhibiting the same to prospective
tenants. Landlord shall, however, use all reasonable efforts to minimize any
interference with Tenant's use and occupancy of the Premises. Landlord may, during
such sixty (60) day period, place signs in or upon the Premises to indicate the
availability of the Premises for rent or sale, which signs shall not be removed,
obliterated or hidden by Tenant.
10.3 If, during the last month of the Term of this Lease, Tenant shall have removed all
of Tenant's property therefrom and shall have fully vacated same, Landlord may
immediately enter and alter, renovate or redecorate the Premises without elimination or
abatement of rent or other compensation and such action shall have no effect on this
Lease. Nothing herein contained, shall be deemed or construed to impose upon
Landlord any obligation, responsibility or liability whatsoever for the care, supervision or
repair of the Premises except as otherwise provided in this Lease.
SECTION 11. SUBLETTING AND MORTGAGING.
11.1 Tenant is allowed to sublease portions of the Premises to other entities but such
entities shall be approved by Landlord, in its sole discretion.
11.2 Any transfer of Tenant's interest under and in this Lease by merger,
consolidation, liquidation or operation of law, or any change in ownership or power to
vote a majority of the ownership interest in Tenant shall constitute an assignment for the
purposes of this Lease and shall require the prior written consent of Landlord.
11.3 An assignment for the benefit of creditors or any transfer by operation of law shall
not be effective to transfer any rights to any assignee, without the written consent of
Landlord first having been obtained. Any purported assignment or subletting not in
compliance herewith shall be void and of no force and effect.
SECTION 12. TRADE FIXTURES IN PREMISES.
12.1 Removable trade fixtures shall not be deemed to become a part of the Premises.
Tenant may, at the expiration of the Term of this Lease, remove all of its trade fixtures,
provided that any and all damage to the Premises resulting from or caused by such
removal shall be promptly repaired at Tenant's expense.
8
12.2 Tenant covenants and agrees that all personal property of every kind or
description which may at any time be in the Premises shall be at Tenant's sole risk, or at
the risk of those claiming under Tenant, and Landlord shall not be liable for any damage
to such property or loss suffered by the business or occupation of Tenant arising from
the bursting, overflowing or leaking of water, sewer or steam pipes, from the heating or
plumbing fixtures, from electric wires, from gas or odors or caused in any manner
whatsoever.
SECTION 13. DAMAGE OR DESTRUCTION.
13.1 Subject to the provisions of Section 13.2, in the event that, at any time during the
Term of this Lease, the buildings and improvements comprising part of the Premises
shall be destroyed or damaged in whole or in part by fire or other cause, all insurance
proceeds payable, under the casualty insurance referred to in Section 5.2 shall be made
available to Tenant for repairs or replacing the same, whereupon Tenant shall repair or
replace the same as promptly as practicable, such repair or replacement work to be
carried out in accordance with the provisions of Section 7, above, and the requirements
of the holder of any mortgage encumbering this Lease or Landlord's interest in the
Premises. All repairs and replacements to buildings and other improvements by Tenant
pursuant to this Section shall be accomplished in such a manner as to restore such
buildings and other improvements to at least as good condition as existed immediately
prior to such damage or destruction. No damage or destruction to the Premises shall
entitle Tenant to surrender possession of the Premises, to terminate this Lease or
relieve Tenant of its liability and obligation to pay timely the full amount of rent and other
charges hereunder and to perform all of its other obligations hereunder.
13.2 Notwithstanding the provisions of Section 13.1 above, in the event of any
material damage to or destruction of the buildings or improvements comprising a part of
the Premises during the last year of the Terra of this Lease, Tenant may terminate the
Lease upon written notice to Landlord whereupon the Lease shall terminate as of the
date set forth on Tenant's notice as if such date were the date set forth for the expiration
hereof. In such event, Tenant shall have no obligation to repair or replace the damage
or destruction, and Tenant shall assign to Landlord the right to any casualty insurance
proceeds payable to Tenant by virtue of the insurance policies referred to in Section 5
hereof.
SECTION 14. EMINENT DOMAIN.
14.1 Interest of Parties on Condemnation. In the event the Premises or any part
thereof shall be taken for public purposes by condemnation as a result of any action or
proceeding in eminent domain, or shall be transferred in lieu of condemnation to any
authority entitled to exercise the power of eminent domain, the interests of Landlord and
Tenant in the award or consideration for such transfer and the effect of the taking or
transfer upon this Lease shall be as provided by this Section.
9
14.2 Total Taking: Termination. Subject to the terms and conditions hereof, in the
event the entire Premises is taken or so transferred, this Lease, and all of the right, title
and interest thereunder shall cease on the date title to such land so taken or transferred
vests in the condemning authority and the proceeds of such condemnation shall be
allocated first to Tenant to the extent of the greater of the value of the Improvements or
the amounts paid, incurred or advanced by Tenant in respect of the Improvements
made by Tenant to the Premises, including the construction, acquisition or other cost of
any Improvements and any other buildings, equipment or improvements so constructed
or acquired, and fees and expenses of engineers and architects, fees, costs and
expenses, incurred in connection with financing any Improvements and other items and
other fees costs and expenses in connection therewith. The balance, if any, shall
belong to the Landlord, so long as no Default or Event of Default shall exist under the
Lease or any other leasehold mortgage, and if such a Default or Event of Default exists,
such proceeds may be retained by Tenant and applied to the payment or prepayment of
any obligations owed by Tenant under the Lease or other leasehold mortgage, as the
case may be, in such order as Tenant may elect, or in such order as required by the
Lease or as directed by a leasehold mortgagee.
14.3 Partial Taking: Termination. In the event of the taking or transfer of only a part of
the Premises leaving the remainder of the Premises in such location or in such form,
shape, or reduced size as to be not effectively and practicably useable in the sole
discretion of Tenant for the purpose of operation of business thereon, this Lease and all
right, title and interest thereunder shall cease on the date title to the Premises or the
portion thereof so taken or transferred vests in the condemning authority and the
proceeds of such condemnation shall be divided as provided in Section 14.2.
14.4 Partial Taking: Continuation with Rent Abatement. In the event of the taking or
transfer of only a part of the Premises leaving the remainder of the Premises in such
location and in such form, shape, or size as to be used effectively and practicably in the
sole discretion of Tenant for the purpose of operation of business thereon, as of the
date title to such portion vests in the condemning authority, this Lease shall continue. In
the event of any such partial taking or transfer, the proceeds thereof shall be made
available to Tenant to make such repairs and replacements that in the judgment of
Tenant, subject to the Lease, and any leasehold mortgagee of Tenant are necessary or
appropriate for the operation of business thereon and to compensate Tenant for any of
its property that was taken, as determined by Tenant. Any such proceeds- remaining
thereafter shall be delivered to Landlord, so long as no Default or Event of Default shall
exist under the Lease or any other leasehold mortgage, and if such a Default or Event
of Default exists, such proceeds may be retained by Tenant and applied to the payment
or prepayment of any obligations owed by Tenant under the Lease or any other
leasehold mortgage, in such order as Tenant may elect, or in such order as required by
the Lease or as directed by a leasehold mortgagee.
SECTION 15. DEFAULT BY TENANT.
15.1 In the event that:
10
(1) Any installment of rent, other charges or other money due Landlord from
Tenant pursuant to this Lease shall not be received by Landlord within five (5)
days after Tenant's receipt of written notice thereof from Landlord; provided,
however, that in no event shall Landlord be required to give more than two (2)
notices of Tenant's failure to pay any rent, other charges or other money due
Landlord in any period of twelve (12) consecutive months, it being understood
that, notwithstanding that such default may have been cured by Tenant as
provided hereunder, the third such failure in any twelve (12) month period shall
constitute and be deemed a "Repeated Default "; or
(2) Tenant shall at any time be in default in the observance or performance of
any of the other covenants, obligations, terms or conditions assumed by or
imposed upon Tenant hereunder and such default continues for a period of
fifteen (15) days after receipt of written notice by Tenant of such default (provided
that if such default shall reasonably take more than fifteen (15) days to cure, said
period of time shall be extended if Tenant shall have commenced the cure within
the fifteen (15) days and thereafter shall be diligently prosecuting the same to
completion); or
(3) A temporary or permanent receiver or trustee of Tenant's property shall be
appointed by any court and the same is not discharged within sixty (60) days; or
(4) Tenant shall make any assignment for the benefit of creditors; or
(5) Any execution or attachment shall be issued against Tenant or Tenant's
leasehold interest hereunder which shall not be discharged within sixty (60) days;
or
(6) Tenant shall commence, or there shall be commenced against Tenant,
proceedings in a court of bankruptcy or insolvency which shall not be discharged
within ninety (90) days; or
(7) Tenant shall abandon or vacate the Premises or shall fail to continuously
occupy and conduct Tenant's business in the Premises; or
(8) Tenant shall fail to complete the Rehabilitation (as hereinafter defined) of
the Premises as provided in Section 28 hereof on or before the end of the fifth
Lease Year, unless such period is otherwise extended by Landlord in writing;
then, and in any one or more of such events, Tenant does hereby authorize and
empower Landlord or Landlord's agent to cancel, terminate, or annul this Lease
at once and to re -enter and take possession of the Premises immediately, and by
force if necessary, without any previous notice of intention to re- enter, and to
remove all persons and their property therefrom, and to use such force in
effecting and perfecting such removal of Tenant as may be necessary and
11
advisable to recover at once first and exclusive possession of the Premises
whether in possession of Tenant or of third persons or otherwise, without being
deemed guilty of any manner of trespass and without prejudice to any remedies
which might otherwise be used by Landlord, in .which event this Lease shall
terminate and Tenant shall indemnify Landlord against all Toss of rent which
Landlord may incur by reason of such termination during the residue of the Term
of this Lease. In the event of a Repeated Default, Tenant shall have no further
Fight to cure same and Landlord, without giving Tenant any notice and without
affording Tenant any opportunity to cure such default, may exercise any rights or
remedies available to Landlord pursuant to this Lease, including without
limitation, the right to terminate this Lease.
15.2 Landlord may, however, at its option, and at any time after such default or
violation of condition or covenant, re -enter and take possession, of the Premises without
such re -entry working a termination of this Lease or a forfeiture of the rents to be paid
and the covenants, agreements and conditions to be kept and performed by Tenant for
the full Term of this Lease. In such event, Landlord shall have the right, but not the
obligation, to divide or subdivide the Premises in any manner Landlord may determine
and to lease or let the same or portions hereof for such periods of time and at such
rentals and for such use and upon such covenants and conditions as Landlord may
elect, applying the net rentals from such letting first to the payment of Landlord's
expenses (including attorney's fees) incurred in dispossessing Tenant and reletting the
Premises and the cost and expense of making such improvements in the Premises as
may be necessary in order to enable Landlord to relet the same, and to the payment of
any brokerage commissions or other necessary expenses of Landlord in connection
with such reletting. The balance, if any, shall be applied by Landlord from time to time
on account of the payments due or payable by Tenant hereunder, with the right
reserved to Landlord to bring such action or proceedings for the recovery of any deficits
remaining unpaid as Landlord may deem favorable from time to time, without being
obligated to await the end of Term hereof for the final determination of Tenant's
account. Any balance remaining, however, after full payment and liquidation of
Landlord's account as aforesaid shall be paid to Tenant with the right reserved to
Landlord at any time to give notice in writing to Tenant of Landlord's election to cancel
and terminate this Lease and the giving of such notice and the simultaneous payment
by Landlord to Tenant of any credit balance in Tenant's favor that may at the time be
owing to Tenant shall constitute a final and effective cancellation and termination of this
Lease and the obligations hereunder on the part of either party to the other.
SECTION 16. WAIVER OF TENANT'S DEFAULT. No waiver of any covenant or
condition or of the breach of any covenant or condition of this Lease shall be taken to
constitute a waiver of any subsequent breach of such covenant or condition nor shall
any such waiver justify or authorize the nonobservance of any other occasion of the
same or of any other covenant or condition hereof, nor shall the acceptance of rent by
Landlord at any time when Tenant is in default under any covenant or condition hereof
be construed as a waiver of such default or of Landlord's right to terminate this Lease
on account of such default, nor shall any waiver or indulgence granted by Landlord to
12
Tenant be taken as an estoppel against Landlord, it being expressly understood that if
at any time Tenant shall be in default in any of its covenants or conditions hereunder, an
acceptance by Landlord of rent during the continuance of such default or the failure on
the part of Landlord promptly to avail itself of such rights or remedies as Landlord may
have, shall not be construed as a waiver of such default, but Landlord may at any time
thereafter, if such default continues, terminate this Lease or assert any other rights or
remedies available to it on account of such default in the manner hereinbefore provided.
SECTION 17. DEFAULT BY LANDLORD.
17.1 Landlord shall in no event be charged with default in the performance of any of
its obligations hereunder unless and until Landlord shall have failed to perform such
obligations within thirty (30) days (or such additional time as is reasonably required to
correct any such default) after notice to Landlord by Tenant properly specifying wherein
Landlord has failed to perform any such obligations.
17.2 If Landlord shall fail to perform any covenant, term or condition of this Lease
upon Landlord's part to be performed, or if Landlord shall be liable to Tenant in any way
arising out of this Lease, and in any such event Tenant shall recover a money judgment
against Landlord, then such judgment shall be satisfied only out of the equity of
Landlord in and to the portion of the Premises then owned by Landlord, and none of
Landlord's personal assets shall in any event be liable for any deficiency; and, if Tenant
shall acquire a lien on any such personal assets or other property of Landlord by
judgment or otherwise, Tenant promptly shall release such lien on such other properties
and assets by executing, acknowledging and delivering to Landlord such instruments
and documents as are prepared by Landlord's attorneys.
SECTION 18. LEASEHOLD MORTGAGES.
18.1 Tenant's Right to Encumber Without Landlord's Consent. Tenant may, at any
time or from time to time during the Term of this Lease, encumber by mortgage or other
security instrument by way of assignment or otherwise, Tenant's interest under this
Lease and the leasehold estate hereby created for any purpose. In no event shall
Tenant be permitted to encumber Landlord's fee interest in the Premises.
18.2 Assignment of Subleases. Tenant shall have the absolute right to collaterally
assign any sublease relating to all or any part of the Premises (a" "Sublease ") to any
leasehold mortgage lender without the Landlord's consent.
18.3 Notice, Obligations of Landlord. If Tenant and /or Tenant's successors and
assigns shall mortgage Tenant's leasehold interest, or any part or parts thereof at any
time in accordance with this Section 18, and if the holder of any such leasehold
mortgage shall at any time, send to Landlord a true copy thereof, together with written
notice specifying the name and address of the leasehold mortgagee (as the case may
be) and the pertinent recording date with respect to such mortgage, Landlord agrees
that so long as any such leasehold mortgage shall remain unsatisfied of record or until
13
written notice of satisfaction is given by the holder to Landlord, the following provisions
shall apply:
(1) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the holder of such leasehold
mortgage. The leasehold mortgagee shall thereupon have the same period as
Tenant plus forty -five (45) days, after service of such notice upon such
mortgagee, to remedy or cause to be remedied the defaults complained of, and
Landlord shall accept such performance by or at the instigation of such leasehold
mortgagee as if the same had been done, by Tenant; provided, that if such
default shall not be curable by the payment of money only, and such leasehold
mortgagee shall be unable to cure any such default within such 45 day time
period notwithstanding the use of diligent efforts, the time within which such
leasehold mortgagee may cure such default shall be extended for such additional
period of time as may be necessary for the completion of such cure with the use
of diligent efforts.
(2) While such leasehold mortgage remains unsatisfied of record, or until
written notice of satisfaction is given by the holder to Landlord, if any default shall
occur which, pursuant to any provision of this Lease, entitles Landlord to
terminate this Lease, and if, before the expiration of forty -five (45) days from the
date of service of notice of termination upon such leasehold mortgagee, such
leasehold mortgagee shall have notified Landlord of such leasehold mortgagee's
desire to nullify such notice and such leasehold mortgagee shall have paid to
Landlord all installments of Rent and Other Charges herein provided for and
which are then in default, and shall have complied or shall commence the work of
complying with all of the requirements of this Lease, if any as are then in default,
and shall prosecute the same to completion with reasonable diligence, and shall
agree to continue.to pay all installments of Rent and Other Charges as the same
becomes due, then and in such event Landlord shall not be entitled to terminate
this Lease and any notice of termination theretofore given shall be of no effect;
(3) If Landlord shall elect to terminate this Lease by reason of any default of
Tenant, then the leasehold mortgagee shall not only have the right to nullify any
notice of termination by timely curing such default, as aforesaid, but also shall
have the right to postpone and extend the specified date for the termination of
this Lease as fixed by Landlord in its notice of termination, for a period of not
more than one hundred eighty (180) days (except as extended as hereinafter
provided), provided that, within forty -five (45) days from the date of service of
notice of termination, such leasehold mortgagee shall cure or cause to be cured
any then existing monetary defaults and shall thereafter pay when due all Rent
and Other Charges and comply with and perform all of the other terms,
conditions and provisions of this Lease on Tenant's part to be complied with and
performed, and provided further that the leasehold mortgagee shall forthwith take
steps to acquire or sell Tenant's interest in this Lease by foreclosure of its
mortgage or otherwise and shall prosecute the same to completion with all due
14
diligence. If at the end of said one hundred eighty (180) day period the leasehold
mortgagee shall have been and shall continue to be diligently engaged in steps
to acquire or sell Tenant's interest herein, the time for said mortgagee to comply
with the provisions of this Section 18 shall be extended for such period as shall
be reasonably necessary to complete such steps with reasonable diligence and
continuity; otherwise, the Lease shall terminate as of the end of such one
hundred eighty (180) day period;
(4) Landlord agrees that the name of the leasehold mortgagee may be added
to the "Loss Payable Endorsement" of any and all insurance policies required to
be carried by Tenant hereunder on condition that the insurance proceeds are to
be applied in the manner specified in this Lease and that the leasehold mortgage
or collateral document(s) shall so provide; and
(5) Landlord agrees that, if this Lease is terminated by reason of any default
by Tenant, then, upon request of the leasehold mortgagee, Landlord will enter
into a new Lease of the Premises with that leasehold mortgagee or its nominee
for the remainder of the Term of this Lease, effective as of the date of such
termination, at the same Rent and Other Charges and upon the terms,
provisions, covenants and agreements as herein contained and subject to the
then existing state of title, and to the rights, if any, of any parties then in
possession of any part of the Premises, provided:
(a) Said mortgagee or its nominee shall make written request upon
Landlord for such new Lease within thirty (30) days after the date of such
termination (as the same may be postponed or extended as hereinbefore
provided) and such written request is accompanied by payment to
Landlord of the sums then due to Landlord under this Lease;
(b) Said mortgagee or its nominee shall pay to Landlord at the time of
the execution and delivery of said new Lease, all sums which would, at the
time of the execution and delivery thereof, be due pursuant to this Lease
for such termination and, in addition thereto, all reasonable expenses,
including reasonable attorneys' fees, to which Landlord shall have been
subjected by reason of such default;
(c) Said mortgagee or its nominee shall perform and observe all
covenants herein contained on Tenant's part to be performed and shall
further remedy any other conditions which Tenant was obligated to
perform under the terms of this Lease and, upon execution and delivery of
such new Lease, any Subleases which may have theretofore been
assigned and transferred by Tenant to Landlord as security under this
Lease shall thereupon be deemed to be held by Landlord as security for
the performance of all of the obligations of the tenant under the new
Lease;
15
(d) Said mortgagee or its nominee, as tenant under the new Lease,
shall be entitled to possession of the Premises, subject to the rights, if
any, of Tenant and any subtenants or other occupants or users of the
Premises claiming by, through or under Tenant; Landlord not being
required to warrant possession of the Premises to the tenant under the
new Lease;
(e) Said new Lease shall be expressly made subject to the rights, if
any, of Tenant under the terminated Lease;
(f) Subject to the rights, if any, of Tenant under the terminated Lease,
the new tenant under such new Lease shall have the same right, title and
interest in and to the buildings and improvements on the Premises as
Tenant had under the terminated Lease; and
(g) Such new Lease shall provide that the new tenant thereunder shall
not have any obligation or liability thereunder after the termination or
earlier expiration of the new Lease except for any obligation or liability
specifically provided herein or any comparable provision in the new Lease.
SECTION 19. ESTOPPEL CERTIFICATES. Tenant covenants and agrees that
within ten (10) days after Landlord's written request, Tenant shall execute and deliver to
Landlord, at no cost and expense to Landlord, a certificate to any proposed mortgagee
or purchaser of all or any portion of the Premises certifying that this Lease is in full force
and effect, that there are no defenses or offsets thereto on Tenant's part, if such be the
case, or if not, stating those claimed by Tenant, and further certifying to such other
matters as Landlord reasonably may request.
SECTION 20. SEPARABILITY. Each and every of the covenants and agreements
contained in this Lease shall be for all purposes construed to be separate and
independent covenants, and the breach of any covenant contained herein by Landlord
shall in no wise or manner discharge or relieve Tenant from Tenant's obligation to
perform each and every of the covenants contained herein. If any term or provision of
this Lease or the application thereof to any person or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of such term
or provision to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and provision of this Lease
shall be valid and shall be enforceable to the fullest extent permitted by law.
SECTION 21. USE OF PREMISES.
21.1 Tenant covenants and agrees that during the Term of this Lease, the Premises
shall be occupied and used for the sole purpose of operating a auditorium, team offices,
box office, community center and activities ancillary thereto, and for no other purpose,
without the prior written consent of Landlord to another use, which consent Landlord
agrees not to unreasonably withhold or delay.
16
21.2 Tenant covenants and agrees not to use or occupy or suffer or permit the
Premises or any part thereof to be used or occupied for any purpose contrary to law or
to the rules or regulations of any public authority. If Tenant shall install any electrical or
other equipment that overloads or exceeds the capacity of the lines in the Premises,
then Tenant shall, at its own expense, make whatever changes are necessary to
comply with the requirements of the insurance underwriters and governmental
authorities having jurisdiction thereover and shall pay the cost of any such additional
equipment or systems.
SECTION 22. ENVIRONMENTAL LIABILITY; USE OF HAZARDOUS MATERIALS.
22.1 Tenant shall not cause or permit any Hazardous Material (as defined in Section
22.2, below) to be brought upon, kept or used in or about the Premises (which term,
includes the building and the land upon which the building is situated) by Tenant, its
agents, employees, contractors or invitees, without the prior written consent of Landlord,
which Landlord shall not unreasonably withhold as long as Tenant demonstrates to
Landlord's reasonable satisfaction that such Hazardous Material is necessary or useful
to Tenant's business and will be used, kept and stored in a manner that complies with
all laws regulating any such Hazardous Material so brought upon or used or kept in or
about the Premises. If Tenant breaches the obligations stated above in this Section
22.1, or if the presence of Hazardous Material on the Premises caused or permitted by
Tenant results in contamination of the Premises, or if contamination of the Premises by
Hazardous Material otherwise occurs for which Tenant is legally liable to Landlord for
damage resulting therefrom, then Tenant shall indemnify, defend and hold Landlord
harmless, from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, diminution in value of the land or
building or both, damages for the loss or restriction on use of rentable or usable space
or of any amenity of the building, damages arising from any adverse impact on
marketing of space, and sums paid in settlement of claims, reasonable attorneys' fees,
consultant fees and expert fees) which arise during or after the Lease Term as a result
of such contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site conditions or any
clean -up, remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Material present in
the soil or ground water on or under the Premises. Without limiting the foregoing, if the
presence of any Hazardous Material in or under the Premises caused or permitted by
Tenant results in any contamination of the Premises, Tenant shall promptly take all
actions at its sole expense as are necessary to return the Premises to the condition
existing prior to the introduction of any such Hazardous Material to the Premises;
provided that Landlord's written approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as such actions would not
potentially have any material adverse long -term or short-term effect on the Premises.
The foregoing indemnity shall survive the expiration or earlier termination of this Lease.
As a condition of Landlord's consent in the first sentence of this Section, Landlord may
require the assumption of personal liability by the shareholders of any corporate Tenant
17
of the foregoing indemnity.
22.2 As used in this Section, the term "Hazardous Material" means any hazardous or
toxic substance, material or waste, including, but not limited to, those substances,
materials, and wastes listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302) and amendments thereto, any
petroleum or petroleum -based products, and such other substances, materials and
wastes that are or become regulated under any applicable local, state or federal law.
22.3 Landlord covenants and agrees that Tenant shall have no liability or other
responsibility pertaining to any Hazardous Materials which exist on the Premises prior to
the Commencement Date. Landlord shall indemnify, defend and hold Tenant harmless
from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including reasonable attorneys' fees) arising out of or attributable to any Hazardous
Material existing on the Premises on the Commencement Date as a result of the acts of
Landlord, or its agents, contractors or employees.
SECTION 23. SURRENDER.
23.1 Tenant covenants and agrees to deliver up and surrender to Landlord
possession of the Premises upon expiration of this Lease, or its earlier termination as
herein provided, broom clean and in as good condition and repair as the same shall be
at the commencement of the Term of this Lease, or may have been put by Tenant or
Landlord during the continuance thereof, ordinary wear and tear and damage by fire
and other insured casualty referred to in Section 13.2 excepted.
23.2 Prior to Tenant's vacating or delivering up the Premises to Landlord, Tenant
shall, at Tenant's cost and expense arid in accordance with Section 7.2 and Section 12
hereof, remove all property of Tenant and shall repair any damage to the Premises
caused by any removal of Tenant's property. Any property not so removed shall be
deemed to have been abandoned by Tenant and may be retained or disposed of by
Landlord, as Landlord shall desire. Tenant's obligation to observe or perform this
covenant shall survive the expiration or termination of the Term of this Lease.
SECTION 24. QUIET ENJOYMENT. If and so long as Tenant (i) pays the rent and
other sums and charges reserved and agreed to be paid by Tenant under this Lease
and any extension of the Term hereof, and (ii) faithfully observes all covenants,
conditions and agreements herein contained, then Tenant shall quietly have and enjoy
the Premises and every part thereof free of hindrance and molestation from Landlord
and anyone claiming by, through or under Landlord.
SECTION 25. BROKERS. Landlord and Tenant each warrant and represent to the
other that neither has employed any broker or finder with respect to any of the
transactions contemplated by this Lease. Landlord or Tenant, as the indemnifying
party, as the case may be, will defend and save the other party harmless from any claim
18
made by any broker or finder for any commissions or other compensation allegedly due
by reason of such indemnifying party's employing any such broker or finder.
SECTION 26. TERM "LANDLORD ". The term "Landlord" as used in this Lease, so
far as covenants or obligations on the part of Landlord are concerned, shall be limited to
mean and include only the owner for the time being of the Premises. If the Premises is
sold or transferred to an independent purchaser, the seller /transferor shall be
automatically and entirely released of all covenants and obligations under this Lease
from and after the date of such conveyance or transfer (except for defaults of the
seller /transferor which arose or accrued prior to the date of conveyance or transfer),
provided the purchaser /transferee with respect to such sale has assumed and agreed to
carry out all covenants and obligations contained in this Lease thereafter to be
performed on the part of Landlord hereunder, it being hereby agreed that the covenants
and obligations contained in this Lease shall be binding upon Landlord, its successors
and assigns, only during their respective successive periods of ownership.
SECTION 27. HISTORIC REHABILITATION. Tenant agrees, as partial
consideration for this Lease, to undertake and complete the historic rehabilitation of the
Premises in accordance with Section 47 of the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provision of succeeding law) on or
before the end of the fifth (5th) Lease Year (the "Rehabilitation "). Tenant shall
immediately undertake the Rehabilitation upon the commencement of this Lease and
shall diligently pursue the Rehabilitation to completion. Tenant shall submit any and all
plans for the Rehabilitation to Landlord and Landlord has the right to approve, suggest
changes, or disapprove such plans. Tenant shall seek to coordinate the Rehabilitation
with Landlord's work adjoining the Premises ( "Landlord's Premises "). The cost of
facilities shared between the Premises and Landlord's Premises (such as the HVAC
system) shall be proportionately allocated between Landlord and Tenant.
SECTION 28. NOTICES. ETC. Any and all notices, requests, designations,
demands, and the like required to be given or served by the terms and provisions of this
Lease or any extension hereof, either by Landlord to Tenant, or by Tenant to Landlord,
shall be in writing, and shall be deemed to have been duly given and served if and when
personally delivered or sent by registered mail or certified mail with the proper postage
prepaid thereon and deposited with the United States Post Office, addressed to the
party intended as follows:
If to Landlord:
City of Dubuque, Iowa
50West 13th Street
Dubuque, Iowa 52001
If to Tenant: Engine House #1 MT, LLC
P.O. Box 1745
Dubuque, Iowa 52004 -1745
19
SECTION 29. NON - MERGER. There shall be no merger of this Lease, or of the
leasehold estate created by this Lease, with the fee estate in the Premises by reason of
the fact that this Lease, the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, may be held, directly or indirectly, by or for
the account of any person who shall own the fee estate in the Premises or any interest
in such fee estate. No such merger shall occur unless and until all persons at the time
having an interest in the fee estate in the Premises and all persons having an interest in
this Lease, or in the leasehold estate created by this Lease, shall join in a written
instrument consenting to and effecting such merger and shall duly record the same.
SECTION 30. MEMORANDUM OF LEASE. Landlord and Tenant agree to execute a
memorandum of lease which Tenant shall; at its sole cost, record in the appropriate
public records. Said memorandum of lease shall set forth such information which shall
be required by the laws of the State of Iowa. This Lease may not be recorded.
SECTION 31. MISCELLANEOUS PROVISIONS.
31.1 The section headings are for convenience only and shall not be considered as a
part of the Lease or as in any way limiting or amplifying the terms and provisions hereof.
31.2 This Lease shall be construed and enforced in accordance with the laws of the
State of Iowa.
31.3 This Lease may not be modified except by an agreement in writing executed by
each of the parties hereto.
31.4 If either party shall be delayed or prevented from the performance of any act
required by this Lease by reason of acts of God, strikes, lockouts, labor troubles,
inability to procure materials, restrictive governmental laws, or regulations or other
cause, without fault and . beyond the reasonable control of the party obligated (financial
inability excepted), performance of such act shall be excused for the period of the delay;
and the period for the performance of any such be extended for a period equivalent to
the period of such delay, provided, however, nothing herein shall excuse Tenant from
the prompt payment of any rent or other charges required by Tenant except as may be
expressly provided elsewhere in this Lease.
20
LANDLORD TENANT
CITY OF DUBUQUE, IOWA
By: By:
Roy D. Buol, Mayor
Name:
Attest: Title:
Jeanne F. Schneider, City Clerk
21
ENGINE HOUSE #1, LLC, MANAGING
MEMBER OF ENGINE HOUSE #1 MT,
LLC