ABC Supply, Inc., Amendment to Lease AgreementMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: ABC Supply Lease Amendment
DATE: November 14, 2011
Dubuque
Ail- Amedca city
2007
Economic Development Director Dave Heiar recommends City Council approval of the
First Amendment to the Lease Agreement with American Builders and Contractor's
Supply Co., Inc. (ABC Supply).
On May 6, 2011, the City entered into a five year lease with ABC Supply Co. for
property located at 10 South Main Street from June 1, 2011 to May 31, 2016. ABC also
leases property in this area from Hendricks Commercial Properties, LLC.
One of the major terms of the five year lease is if ABC was not able to negotiate a lease
with Hendricks Commercial Properties, LLC, they would have the right to terminate the
lease with the City prior to June 1, 2012, with a 30 day notice.
A couple of months ago, the City discovered that the current sprinkler system in the
building had previously been disconnected. In addition, the sprinkler system that was
disconnected did not meet current codes. Replacing the system with a code compliant
dry system will cost $26,075.
The First Amendment to the Lease amends Section 1.1 of the Lease by removing the
last sentence of this paragraph in its entirety. The Tenant has agreed to waive all rights
to terminate the Lease. ABC also agrees to reimburse the City for 1/2 of the replacement
sprinkler system within 30 days of an invoice in the amount of $13,037.50, upon City's
completion of converting the existing wet fire sprinkler system to a dry fire sprinkler
system in accordance with all code requirements, with the work to be completed by City
on or before December 31, 2011.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
m44
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
2
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manger
FROM: David J. Heiar, Economic Development Direct
RE: ABC Supply Lease Amendment
DATE: November 14, 2011
Dubuque
AII4Amerlca City
111 r
2007
INTRODUCTION
This memorandum presents for City Council review and approval of the First Amendment to the
Lease Agreement between the City of Dubuque, Iowa and American Builders and Contractor's
Supply Co., Inc. (ABC Supply).
DISCUSSION
On May 6, 2011, the City entered into a five year lease with ABC Supply Co. for property
located at 10 South Main Street from June 1, 2011 to May 31, 2016. ABC also leases property
in this area from Hendricks Commercial Properties, LLC.
One of the major terms of the five year lease is if ABC was not able to negotiate a lease with
Hendricks Commercial Properties, LLC, they would have the right to terminate the lease with
the City prior to June 1, 2012, with a 30 day notice.
A couple of months ago, the City discovered that the current sprinkler system in the building had
previously been disconnected. In addition, the sprinkler system that was disconnected did not
meet current codes. Replacing the system with a code compliant dry system will cost $26,075.
The First Amendment to the Lease provides for amending Section 1.1 of the Lease by removing
the last sentence of this paragraph in its entirety. The Tenant has agreed to waive all rights to
terminate the Lease. ABC also agrees to reimburse the City for 1/2 of the replacement sprinkler
system within 30 days of an invoice in the amount of $13,037.50, upon City's completion of
converting the existing wet fire sprinkler system to a dry fire sprinkler system in accordance with
all code requirements, with the work to be completed by City on or before December 31, 2011.
The funding for the City's share of converting to the dry fire sprinkler system will come from the
increased lease revenue generated from the renewed lease.
The proposed First Amendment to the Lease Agreement is attached.
RECOMMENDATION /ACTION STEP
I recommend that the City Council approve the First Amendment to the Lease Agreement with
American Builders and Contractor's Supply Co., Inc. (ABC Supply) located at 10 S. Main Street
and authorize the City Manager to sign the First Amendment to the Lease Agreement.
Attachment
Prepared by David J. Heiar, 50 West 13th Street, Dubuque, IA 52001 563 - 589 -4393
RESOLUTION NO. 375 -11
RESOLUTION APPROVING A FIRST AMENDMENT TO THE LEASE AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND AMERICAN BUILDERS AND
CONTRACTOR'S SUPPLY CO., INC. (ABC SUPPLY)
WHEREAS, the City of Dubuque, Iowa (City) owns the real property located at 10
South Main Street in the City of Dubuque, Iowa; and
WHEREAS, City and ABC Supply have negotiated a 5 year Lease Agreement for
the property located at 10 South Main Street, a copy of which Lease Agreement is on file
at the office of the City Clerk, City Hall, 13th and Central Avenue, Dubuque, Iowa; and
WHEREAS, City and ABC Supply have agreed to amend Section 1.1 of the Lease
Agreement where ABC Supply waives all rights to terminate the lease; and
WHEREAS, ABC Supply agrees to reimburse the City for an amount agreed upon
for converting the existing wet fire sprinkler system to a dry fire sprinkler system; and
WHEREAS, the City Council believes it is in the best interests of the City of
Dubuque to approve the First Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The First Amendment between City and ABC Supply is hereby approved
and the City Manager is authorized to execute said amendment on behalf of the City of
Dubuque.
Passed, approved and adopted this 21st day of November, 2011.
Attes -vin S. Firnstahl, City Clerk
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment, made this Ji Day of )11-1 -e /zL , 2011, by and
between City of Dubuque, Iowa (hereinafter called "Landlord "), and American Builders and
Contractors Supply Co., Inc. (hereinafter called "Tenant);
WITNESSETH:
Whereas, by Lease dated May 6, 2011 the Landlord demised unto Tenant certain premises
located at: 10 South Main St., Dubuque, IA for a term commencing on June 1, 2011 and ending
on May 31, 2016; and
Whereas, the Landlord and Tenant are mutually desirous of amending said Lease as is
hereinafter provided:
In consideration of the mutual terms, covenants and conditions herein contained, the
parties hereto agree as follows:
1. Section 1.1 of the Lease shall be amended by removing the last sentence of this
paragraph in its entirety. The Tenant hereby waives all rights to terminate the
Lease.
2. Tenant agrees to reimburse the Landlord within 30 days of an invoice in the
amount of $13,037.50 upon Landlord's completion of converting the existing wet
fire sprinkler system to a dry fire sprinkler system in accordance with all code
requirements, with said work to be completed by Landlord on or before December
31, 2011.
3. That the parties hereto have agreed to the terms of this First Amendment and
except as expressly provided herein, each and all of the remaining terms and
conditions of said Lease is hereby ratified and confirmed and shall continue in full
force and effect.
In Witness Whereof, the parties hereto have executed this agreement on the Day
of , 2011.
LANDLORD:
City of Dubuque, IA
TENANT:
American Builders & Contractors
Supply 2,., Inc.
By: By:
Name: Kendra A. Story, CF