Flint Hills Resources Pine Bend LLC Riverfront Lease Agreement_InitiateMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Lease for Flint Hills Resources Pine Bend, LLC
DATE: February 14, 2012
Dubuque
bierd
All- America City
'I'll®,
2007
Flint Hills Resources Pine Bend, LLC has an existing lease for a 20.09 acre site in Dove
Harbor that will expire on March 31, 2014. The current lease was approved by the Dock
Commission in 1964 and provides for an annual lease payment of $7,000 plus $1,666 in
wharfage fees. The City was responsible for property taxes and dredging costs, which
on average exceeded the annual revenue generated from this lease. The current lease
did not require any adjustment for inflation. Over the past 3 years, City Attorney Barry
Lindahl and Economic Development Director Dave Heiar, assisted by other City staff,
including Project Manager Steve Brown who now manages City leases, have been
meeting with representatives of Flint Hills Resources Pine Bend, LLC to negotiate terms
for a new lease that is more reflective of the actual value of this riverfront property.
The City has approximately 65 acres of prime riverfront industrial property, protected by
a levee, with existing barge- docking facilities on the Mississippi River available for
lease. These available properties are a limited resource that offers direct access to
multi -modal transport methods:
• 3 rail lines (Burlington Northern Santa Fe, Canadian National and Canadian
Pacific) with a switching yard within 1 mile of the harbor.
• Barges (existing docking and loading facilities).
• Four four -lane highways (151 South, 151 North, 61, 20) with connections to
interstate Highways 90, 94, 35, 74, 88 and 80.
• 3 Mississippi River Bridge crossings into Illinois and Wisconsin (two for vehicles,
one for train).
The major provisions of the proposed lease are:
1). Lessee will pay $12,500 per month from January 2012 through March 2014, for a
total of $337,500, to reserve the right to enter into a new lease effective April 1,
2014.
2). The term of the lease is for 10 years (April 1, 2014 — March 31, 2024) with a 3 year
renewal option. The renewal option is automatic unless either party gives notice
prior to September 30, 2022 to discontinue the lease.
3). Lessee will pay $650,000 for the first year of the new lease. In the previous lease,
the Lessee paid $7,000 per year. The entire lease site (see Exhibit B) is 20.09
acres, but this includes street access (Koch Court) and Corp. of Engineers
restricted property (the flood wall). The net usable site is 15.89 acres, or
$40,906.23 per acre.
4). The lease payment will be increased annually by the United States Bureau of Labor
Statistics Producer Price Index (PPI). The lease payment cannot decrease.
5). Lessee is responsible for property taxes. In the previous lease, the City paid the
property taxes on the land and the Lessee paid property taxes on the
improvements.
6). Lessee will pay a wharfage fee of 33¢ per ton for the first 80,000 tons and $2.00 per
ton for any cargo in excess of 80,000 tons. Based on recent volumes (60,000 tons),
the annual wharfage fee revenue is estimated at $19,800. In the previous lease,
the Lessee paid $1,666.
7). Upon termination of the lease, the Lessee shall retain ownership in trade fixtures
(i.e. tanks and loading racks), while site improvements (office, maintenance
buildings, railroad spurs, docks and dolphins) will become property of the City.
8). Lessee will be responsible for required landscaping improvements, including the
placement of 3 lighted flag poles. The Lessor will provide the official City flag for
one of these poles.
9). Lessee is responsible for costs to repair and maintain the leased premises. Lessee
will pay for 1/3 of the cost for repairs to Koch Court, but the City will be responsible
for snow removal from Koch Court.
10). City will pay for 1/2 of dredging cost in 2012. After that initial dredging, the Lessee
will be responsible for all dredging costs. In the previous lease, the City was
responsible for all dredging costs.
The increased revenue from this lease into the general fund estimated at $669,800 in
Fiscal Year 2015 will have a beneficial impact on future property tax levies. This lease
will also impact the City's lease with Dubuque Terminals, Inc. (Newt) which was
approved in May 2010. One of the clauses in the Dubuque Terminals lease indicates
that if the City charges another lessee less than $50,000 per acre, their lease would be
reduced accordingly to reflect the same rates. The Flint Hills Resources Pine Bend,
LLC lease equates to $40,906.23 per usable acre. Staff had projected an annual lease
revenue from Dubuque Terminals of $188,766. Based on the proposed Flint Hills
2
Resources Pine Bend, LLC lease, that annual lease cost for Dubuque Terminals for
2.86 usable acres will be $116,992 reducing this annual lease revenue by $71,774.
Economic Development Director Dave Heiar is recommending that a public hearing be
set for March 5, 2012 on the proposed lease.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:sv
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Jennifer Larson, Budget Director
3
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Lease for Flint Hills Resources Pine Bend, LLC
DATE: February 8, 2012
Dubuque
bitil
All- America City
'I'll®,
2007
PURPOSE
The intent of this memorandum is to outline the main provisions of a proposed riverfront
lease with Flint Hills Resources Pine Bend, LLC, and to request that the City Council set
a public hearing on this lease.
BACKGROUND
Flint Hills Resources Pine Bend, LLC has an existing lease for a 20.09 acre site in Dove
Harbor that will expire on March 31, 2014. The current lease was approved by the
City's Dock Commission in 1964 and provides for an annual lease payment of $7,000
plus $1,666 in wharfage fees. The City was responsible for property taxes and dredging
costs, which on average exceeded the annual revenue generated from this lease. The
current lease did not require any adjustment for inflation. Over the past 3 years, City
staff has been meeting with representatives of Flint Hills Resources Pine Bend, LLC to
negotiate terms for a new lease that is more reflective of the actual value of this
riverfront property.
The City has approximately 65 acres of prime riverfront industrial property, protected by
a levee, with existing barge- docking facilities on the Mississippi River available for lease
(see attached brochure). These available properties are a limited resource that offers
direct access to multi -modal transport methods:
• 3 rail lines (Burlington Northern Santa Fe, Canadian National and Canadian
Pacific) with a switching yard within 1 mile of the harbor.
• Barges (existing docking and loading facilities).
• Four four -lane highways (151 South, 151 North, 61, 20) with connections to
interstate Highways 90, 94, 35, 74, 88 and 80.
• 3 Mississippi River Bridge crossings into Illinois and Wisconsin (two for vehicles,
one for train).
1
Much of the property is located in a harbor protected from river current by a floodwall.
DISCUSSION
Prior to selling or leasing public property for more than a 3 year period, the Iowa code
requires the City to hold a public hearing on the proposed terms of the sale or lease.
Attached is a resolution to set a public hearing on this proposed lease. The major
provisions of this proposed lease are as follows:
1). Lessee will pay $12,500 per month from January 2012 through March 2014, for a
total of $337,500 to reserve the right to enter into a new lease effective April 1,
2014.
2). The term of the lease is for 10 years (April 1, 2014 — March 31, 2024) with a 3 year
renewal option. The renewal option is automatic unless either party gives notice
prior to September 30, 2022 to discontinue the lease.
3). Lessee will pay $650,000 for the first year of the new lease. The entire lease site
(see Exhibit B) is 20.09 acres, but this includes street access (Koch Court) and
Corp. of Engineers restricted property (the flood wall). The net usable site is 15.89
acres, or $40,906.23 per acre.
4). The lease payment will be adjusted annually by the United States Bureau of Labor
Statistics Producer Price Index (PPI).
5). Lessee is responsible for property taxes.
6). Lessee will pay a wharfage fee of 33¢ per ton for the first 80,000 tons and $2.00 per
ton for any cargo in excess of 80,000 tons. Based on recent volumes, the first year
wharfage fee revenue is estimated at $19,800 (60,000 tons). This is not included in
the base lease revenue of $650,000.
7). Upon termination of the lease, the Lessee shall retain ownership in trade fixtures
(i.e. tanks and loading racks), while site improvements (office, maintenance
buildings, railroad spurs, docks and dolphins) will become property of the City.
8). Lessee will be responsible for required landscaping improvements including the
placement of 3 lighted flag poles. The Lessor will provide the official City flag for
one of these poles.
9). Lessee is responsible for costs to repair and maintain the leased premises. Lessee
will pay for 1/3 of the cost for repairs to Koch Court, but the City will be responsible
for snow removal from Koch Court.
10). City will pay for 1/2 of dredging cost in 2012. After that initial dredging, the Lessee
will be responsible for all dredging costs.
2
Further details of the proposed lease are included in the attached lease agreement.
BUDGET IMPACT
The increased revenue from this lease into the general fund estimated at $669,800 in
FY2015 will have a beneficial impact on future property tax levies. This lease will also
impact the City's lease with Dubuque Terminals, Inc. (Newt) which was approved in
May 2010 (see attached map). One of the clauses in the Dubuque Terminals lease
indicates that if the City charges another lessee less than $50,000 per acre, their lease
would be reduced accordingly to reflect the same rates. The Flint Hills Resources Pine
Bend, LLC lease equates to $40,906.23 per usable acre. Staff had projected an annual
lease revenue from Dubuque Terminals of $188,766. Based on the proposed Flint Hills
Resources Pine Bend, LLC lease, that annual lease cost for Dubuque Terminals for
2.86 usable acres will be $116,992 reducing this annual lease revenue by $71,774.
Approximately 3.3 acres of the site being leased to Dubuque Terminals is for an access
easement or is part of the Corp. of Engineers restricted flood wall.
ACTION STEP
I recommend that the City Council approve the attached resolution to set a public
hearing on the proposed riverfront lease to Flint Hills Resources Pine Bend, LLC for
March 5, 2012.
Attachments
F: \USERS \Econ Dev \Flint Hill Resources\20120208Lease for Flint Hills Council Memo_3.doc
3
Masterpiece on the Mississippi
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DUBUQUE, IOWA is a thriving Midwestern
community of 57,000 located on the Mississippi
River at the intersection of Iowa, Illinois, and
Wisconsin.
The City of Dubuque, Iowa has 65 acres of prime
riverFront industrial property, protected by a
levee, with existing barge- doching facilities on the
Mississippi River available for lease.
67 million people live within 500 miles of Dubuque
and 3.1 million live within 100 miles.
MILES FROM DUBUQUE:
Madison, Wisconsin 95
Rockford, Illinois 95
Milwaukee, Wisconsin 144
Chicago, Illinois 175
Des Moines, Iowa 200
Minneapolis /St. Paul, Minnesota 220
St. Louis, Missouri 268
Omaha, Nebraska 290
Indianapolis, Indiana 299
Kansas City, Missouri 305
Nashville, Tennessee 486
5.65 acres
21.07 acres
rr
SA
Rivetfrant Property
Availability by Year
2010 di. 2021
am 2018 2022
2012 2038
2014
DUBUQUE'S MIDWEST LOCATION
OFFERS MAXIMUM CONNECTIVITY
Dubuque offers prime access to the two most economical
shipping methods, barge and rail. The resurgence of the
railroad industry is creating opportunities for vertical
integration with barge fleeting and rail.
The expansion of the Panama Canal will greatly increase the
feasibility of transportation of imported and exported goods
through the Gulf of Mexico and up the Mississippi River.
The Mississippi River Lock System will soon be upgraded
through the 2007 Water Resource Development Act.
The available properties offer direct access to multi -modal
transport methods:
• 3 rail lines (Burlington Northern Santa Fe, Canadian
National, and Canadian Pacific) with a switching yard
within 1 mile of the harbor.
• Barges (existing docking and loading facilities).
• Four four -lane highways (151 South, 151 North, 61, 20)
with connections to Interstate Highways 90, 94, 35, 74,
88, and 80.
• 3 Mississippi River Bridge crossings into Illinois and
Wisconsin (two for vehicles, one for train).
Much of the property is located in a harbor protected from
river current and the city of Dubuque is protected by a
floodwall /levee.
For additional information, please contact:
City of Dubuque Economic Development
Dave Heiar, Director
50 West 13th Street
Dubuque, Iowa 52001
Phone: (563) 589 -4393
Fax: (563) 589 -1733
E -Mail: dheiar @cityofdubuque.org
Masterpiece on the Mississippi
NOTICE OF A
MEETING AND
PUBLIC HEARING OF
THE CITY COUNCIL
OF THE CITY OF
DUBUQUE, IOWA, ON
THE INTENT TO
DISPOSE OF AN
INTEREST IN REAL
PROPERTY OWNED
BY THE CITY OF
DUBUQUE BY LEASE
BETWEEN THE CITY
OF DUBUQUE, IOWA
AND FLINT HILLS
RESOURCES PINE
BEND, LLC, A
DELAWARE LIMITED
LIABILITY COMPANY
PUBLIC NOTICE i5
hereby given that the
City Council of the City
of Dubuque, Iowa, will
hold a public hearing
on the 5th day of
March, 2012, at 6:30
o'clock p.m. at the
Historic Federal Build-
ing, Council Chambers,
350 West 6th Street,
Dubuque, Iowa, at
which meeting the City
Council proposes to
take action on the
disposal of an interest
In real property owned
by the City of Dubuque
by lease between the
City of Dubuque, Iowa
and Flint Hills
Resources Pine Bend,
LLC, for industrial uses
and other river related
business activities
upon the terms set
forth in a Lease
Agreement, which is on
file at the office of the
City Clerk, City Hall,
13th and Central
Avenue, Dubuque,
Iowa.
At the meeting, the
City • Council will
receive oral and
written objections from
any resident or
property owner of said
City to the above
action. After all
objections have been
received and con-
sidered, the City
Council may at this
meeting or at any
adjournment thereof,
take additional action
on the proposal to
enter into the Lease
Agreement. By order of
the City Council said
hearing and appeals
therefrom shall be held
in accordance with and
governed by the
provisions of Chapter
364.7 of the Code of
Iowa _
Dated" the 24th day of
February, 2012.
Kevin S. Firnstahl
City Clerk of Dubuque,
Iowa
RESOLUTION
NO.49 -12
INTENT TO DISPOSE
OF AN INTEREST IN
REAL PROPERTY
OWNED BY THE CITY
OF DUBUQUE BY
LEASE BETWEEN THE
CITY OF DUBUQUE,
IOWA AND FLINT
HILLS RESOURCES
PINE BEND, LLC, A
DELAWARE . LIMITED
LIABILITY COMPANY
Whereas, the City of
Dubuque, Iowa (City) is
the owner of the real
property legally
described as follows:
A part of unplatted
slough and Govern-
ment Lot 3, Section 19,
Township 89 North,
Range 3 East, 5th
Principle Meridian in
the City of Dubuque,
Dubuque County, Iowa
as shown on the
attached Exhibit B.;
and
Whereas, Flint Hills
Resources Pine Bend,
LLC desires to lease a
part of the property as
shown on Exhibit B,
attached hereto, for
industrial uses and
other river related
business activities
upon the terms set
forth in a Lease
Agreement which is on
fill at the office of the
City Clerk, City Hall,
13th and Central
Avenue, Dubuque, Hills Resources Pine
Iowa; and Bend, LLC.
Whereas, City and Section 2. The City
Flint Hills Resources Clerk is hereby
Pine Bend, LLC have authorized and di
tentatively agreed to rected to cause this
the Lease Agreement, Resolution and a notice
which among other to be published as
things, provides for a Prescribed by Iowa
term through March Code Section 364.7 of a
31, 2024; and public hearing on the
Whereas, the City City's intent to dispose
Council believes it is in of the foregoing -
the best interest of the described real property
City of Dubuque to by lease, to be held on
approve the Lease the 5th day of March,
Agreement 2012, at 6:30 o'clock
NOW THEREFORE, BE P.m. at the Historic
IT RESOLVED BY THE Federal Building, Coun-
CITY COUNCIL OF THE cil Chambers, 350 W.
CITY OF DUBUQUE, 6th Street, Dubuque,
IOWA: Iowa.
Section 1. The City of Passed, approved and
Dubuque intends to adopted this 20th day
dispose of its interest of February, 2012.
in the foregoing- Roy D. Buol, Mayor
described real property 'Attest: Kevin S.
by Lease Agreement Firnstahl, City Clerk
between City and Flint 2/24
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa
corporation, publisher of the Telegraph Herald,a newspaper of general circulation
published in the City of Dubuque, County of Dubuque and State of Iowa; hereby
certify that the attached notice was published in said newspaper on the following
dates: February 24, 2012, and for which the charge is $51.34.
Subscribed to before me, a No pry Public in and for Dubuque County, Iowa,
,20a, .
this ,g7,0, day
/ Notary Public in and for Dubuque County, Iowa.
MARY K, WESTERMEYER
Commisalof Numrer 1540.85 a
RESOLUTION NO. 49 -12
INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY OWNED BY
THE CITY OF DUBUQUE BY LEASE BETWEEN THE CITY OF DUBUQUE,
IOWA AND FLINT HILLS RESOURCES PINE BEND, LLC, A DELAWARE
LIMITED LIABILITY COMPANY
Whereas, the City of Dubuque, Iowa (City) is the owner of the real
property legally described as follows:
A part of unplatted slough and Government Lot 3, Section 19, Township
89 North, Range 3 East, 5th Principle Meridian in the City of Dubuque,
Dubuque County, Iowa as shown on the attached Exhibit B.
; and
Whereas, Flint Hills Resources Pine Bend, LLC desires to lease a part of
the property as shown on Exhibit B, attached hereto, for industrial uses and other
river related business activities upon the terms set forth in a Lease Agreement
which is on file at the office of the City Clerk, City Hall, 13th and Central Avenue,
Dubuque, Iowa; and
Whereas, City and Flint Hills Resources Pine Bend, LLC have tentatively
agreed to the Lease Agreement, which among other things, provides for a term
through March 31, 2024; and
Whereas, the City Council believes it is in the best interest of the City of
Dubuque to approve the Lease Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. The City of Dubuque intends to dispose of its interest in the
foregoing- described real property by Lease Agreement between City and Flint
Hills Resources Pine Bend, LLC.
Section 2. The City Clerk is hereby authorized and directed to cause
this Resolution and a notice to be published as prescribed by Iowa Code Section
364.7 of a public hearing on the City's intent to dispose of the foregoing -
described real property by lease, to be held on the 5th day of March, 2012, at
6:30 o'clock p.m. at the Historic Federal Building, Council Chambers, 350 W. 6th
Street, Dubuque, Iowa.
Passed, approved and adopted this 20th day of Febru ry, 2012.
Ke n . Firnstahl, City Clerk
F: \USERS \Econ Dev \Flint Hill Resources \20120208_Resolution set Public Hearing FHR.doc
Roy D. Buo , Mayor
EXHIBIT B
��,� /,/Corps, Restricted
s approx. . 4 ac
PAGiso .■hia6,We..cre,te,e bath the Cty. o.xa>r.nt2I 14ta
c3
Lease Area Easement Corps Restricted
Feet
0 100 200 400 600 800
brUcrieE
Matapiem on the Mississippi
NOTICE OF A MEETING AND PUBLIC HEARING OF THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA, ON THE INTENT TO DISPOSE OF AN INTEREST IN
REAL PROPERTY OWNED BY THE CITY OF DUBUQUE BY LEASE BETWEEN THE
CITY OF DUBUQUE, IOWA AND FLINT HILLS RESOURCES PINE BEND, LLC, A
DELAWARE LIMITED LIABILITY COMPANY
PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will
hold a public hearing on the 5th day of March, 2012, at 6:30 o'clock p.m. at the Historic
Federal Building, Council Chambers, 350 West 6th Street, Dubuque, Iowa, at which
meeting the City Council proposes to take action on the disposal of an interest in real
property owned by the City of Dubuque by lease between the City of Dubuque, Iowa
and Flint Hills Resources Pine Bend, LLC, for industrial uses and other river related
business activities upon the terms set forth in a Lease Agreement, which is on file at the
office of the City Clerk, City Hall, 13th and Central Avenue, Dubuque, Iowa.
At the meeting, the City Council will receive oral and written objections from any
resident or property owner of said City to the above action. After all objections have
been received and considered, the City Council may at this meeting or at any
adjournment thereof, take additional action on the proposal to enter into the Lease
Agreement. By order of the City Council said hearing and appeals therefrom shall be
held in accordance with and governed by the provisions of Chapter 364.7 of the Code of
Iowa.
Dated this day of 2012.
Kevin S. Firnstahl
City Clerk of Dubuque, Iowa
F: A USERS \Econ DevAFlint Hill Resources A20120208_Notice of Public Hearing.doc
Prepared by: Barry A. Lindahl, Esq. 330 Main Street, Suite 300 Dubuque IA 52001 563 583 -4113
LEASE AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA,
AND
FLINT HILLS RESOURCES PINE BEND, LLC
This Lease Agreement (the Lease) dated for reference purposes this day
of , 2012, between the City of Dubuque, Iowa, an Iowa municipal
corporation (Lessor), and Flint Hills Resources Pine Bend, LLC, a Delaware limited
liability company (Lessee).
SECTION 1. DEMISE AND TERM.
1.1. In consideration of the rents hereinafter reserved and the terms, covenants,
conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the
real property described in Exhibit A attached to and made a part of this Lease (20.09
acres), and as shown on Exhibit B, attached hereto, together with any and all
easements and appurtenances thereto and subject to any easements and restrictions of
record (the Demised Premises), to have and to hold for an initial term commencing as of
the 1st day of April, 2014 and ending at midnight on the 31st day of March, 2024 (the
Initial Term), subject to all of the terms, covenants, conditions and agreements
contained herein. At the end of the Initial Term, this Lease will renew without further
action by either party for an additional term of three (3) years unless either party gives
written notice to the other party prior to September 30, 2022 that such party does not
agree to the renewal, which may be for any reason, with or without cause.
1.2. Notwithstanding the foregoing, in the event Lessor elects to construct a river
water current turbine on or adjacent to the Demised Premises, Lessee agrees to grant
such easement as Lessor determines necessary for the construction and operation of
such turbine and associated equipment and transmission lines, which easement shall
be located to the greatest extent possible so as not to interfere with Lessee's
operations. In no event shall Lessor's easement or Lessor's construction interfere with
Lessee's compliance with applicable law.
1.3. Lessee agrees to cooperate with Lessor in platting the Demised Premises and
amending this Lease to include the platted legal description.
1.4. Upon commencement of the Initial Term of this Lease, all prior leases between
Lessor and Lessee for the Demised Premises or any part thereof shall terminate.
1.5. Lessor hereby grants Lessee a nonexclusive easement for ingress and egress to
the Demised Premises over and across the Private Road shown on Exhibit B, attached
012312baI
hereto. Except as provided in Section 6, Lessor shall have no obligation for any
maintenance for the easement area.
1.6. Use of Premises. Lessee acknowledges that the Demised Premises is currently
zoned HI Heavy Industrial. Notwithstanding such zoning, Lessee agrees that the
Demises Premises shall not be used for any of the following uses:
Slaughterhouses or stockyards;
Manufacture or processing of the following materials: ammonia or chlorine;
Manufacture of acid, lime or lime products, and detergent;
Sanitary landfills;
Sewage treatment plants;
Crematoriums; reduction plants; foundries, forges or smelters; and
Junk yards, salvage yards.
1.7. Lessee further agrees that the Demised Premises shall be used only for the
following purposes and no others without the prior written consent of Lessor: Storage,
manufacturing and distribution of petroleum products (including asphalt) and renewable
fuel - related products, subject to Section 9.1.
1.8. Lessee agrees to pay to Lessor upon execution of this Lease by Lessee, in order
to reserve the right to enter into this lease, $12,500 per month commencing on the 1st
day of January 2012, and on the first day of each month thereafter until April 1, 2014,
the last such payment being due March 1, 2014.
SECTION 2. RENT, TAXES, AND OTHER PAYMENTS
2.1. Rent.
(1) Lessee shall pay Lessor, in addition to taxes, fees (including but not
limited to storm water fees), rates, charges, levies, assessments, and all other
charges required to be paid under this Lease by Lessee, rent for the first year of
the Term in the amount of $650,000.00, in twelve equal monthly payments of
$54,166.66 commencing on the 1st day of April 2014, and on the first day of each
month thereafter.
(2) Rent for each successive year of the Lease Term shall be increased
effective April 1 by (i) the increase in the United States Bureau of Labor Statistics
Producer Price Index ( "PPI ") as of December 31 of each year compared to the
PPI as of December 31 of the previous year, but not to exceed three percent
(3 %). In no event, however, shall the rent for any year be less than the rent for
the previous year.
2.2. Taxes. Lessee shall pay all property taxes on the Leased Premises, including
the land and any improvements thereon, due and payable during the term of the Lease.
2
2.3. Wharfage.
(1) Lessee shall pay Lessor $0.33 per ton for the first 80,000 tons annually of
inbound cargo transferred to the Demised Premises by water, rail or motor
vehicle for every ton received at the Demised Premises, and $2.00 per ton for all
such cargo in excess of 80,000 tons.
(2) Tonnage reports shall be provided to Lessor by January 15 of each year
for the preceding calendar year with the payment for each year due by no later
than February 1 immediately following the end of each such year.
2.4. Sale of Products to Lessor. Lessee agrees to offer to sell to Lessor on April 1 of
each year for its seasonal asphalt requirements asphalt and all other products sold by
Lessee at the lowest contracted retail price out of Lessee's Dubuque terminal into the
Iowa market to date for the current year. The offer will be for a defined set of product(s)
and volume(s) at a determined price as mutually agreed to by both parties.
SECTION 3. TITLE TO IMPROVEMENTS AND TRADE FIXTURES
3.1. Trade Fixtures. For the purposes of this Lease, "Trade Fixtures" shall mean the
personal property located on the Demised Premises used in Lessee's business and all
structures above ground, including tanks and loading racks, and excepting, railroad
spurs, buildings, dolphins and docks located on the Demised Premises.
Title to Lessee's trade fixtures (the Trade Fixtures) is and shall be the sole and
exclusive property of Lessee during the term of this Lease and shall remain the sole and
exclusive property of Lessee after the expiration or termination of this Lease, for
whatever reason. Lessor acknowledges and understands that it shall have no right, title
or interest in or to Lessee's Trade Fixtures either during the term of this Lease, or
thereafter (except as hereinafter provided). Lessor acknowledges and agrees that
Lessee shall have the right to encumber, sell, or hypothecate Lessee's Trade Fixtures,
to remove them from the Demised Premises, or to otherwise deal with all or any portion
of such Lessee's Trade Fixtures, at Lessee's sole discretion. Upon ten (10) days' prior
written notice to Lessor, Lessor shall execute and deliver to Lessee a certificate in
recordable form prepared by Lessee stating that Lessor has no interest or right in or to
Lessee's Trade Fixtures, as well as any other or further document which Lessee may
reasonably request from Lessor. Lessee shall remove its Trade Fixtures within thirty
(30) days after the expiration of this Lease Agreement.
3.2. Improvements.
(1) Improvements on the Demised Premises as of the commencement date of
this Lease are the following: office and maintenance buildings, railroad spurs,
dock, and dolphins.
(2) On delivery of possession of the Demised Premises to Lessee, Lessee
3
shall not construct any material Improvements on the Demised Premises without
the prior written consent of Lessor, which consent shall not be unreasonably
withheld.
(3) Upon any termination of this Lease, by reason of any cause whatsoever, if
any new Improvements or Improvements existing at the time of the execution of
this Lease or any part thereof shall then be on the Demised Premises, Lessee
shall have the right to remove any or all such Improvements and if Lessee elects
to remove any Improvements, Lessee shall remove the Improvements within
thirty (30) days after the expiration of this Lease Agreement. Notwithstanding the
foregoing, Lessor may require Lessee to remove any or all of such Improvements
by delivering notice to Lessee not later than one hundred eighty days (180) prior
to the expiration of the Lease, in which event Lessee shall remove the
Improvements within thirty (30) days after the expiration of this Lease
Agreement. With respect to any Improvements not removed by Lessee, all of
Lessee's right, title, and interest therein shall cease and terminate upon
expiration of this Agreement, and title to the Improvements shall vest in Lessor,
and the Improvements or the part thereof then within the Demised Premises shall
be surrendered by Lessee to Lessor. No further deed or other instrument shall be
necessary to confirm the vesting in Lessor of title to the Improvements.
However, upon any termination of this Lease, Lessee, upon request of Lessor,
shall execute, acknowledge and deliver to Lessor a quitclaim deed confirming
that all of Lessee's right, title and interest in or to the Improvements has expired,
and that title to the Improvements has vested in Lessor. Lessor reserves the right
to require Lessee to remove some or all of the Improvements which Lessee shall
accomplish within one - hundred twenty (120) days of the expiration of this Lease
Agreement.
(4) At the time of construction of any new material Improvements on the
Demised Premises, Lessee shall consider the following, but final plans for new
material Improvements will be mutually agreed upon by the Lessor and Lessee:
• LEED certification;
• Alternative energy sources such as solar, or wind - powered; or
• Any other sustainable design elements with the prior written approval
of Lessor.
(5) Upon request of Lessor, Lessee shall provide Lessor with information
satisfactory to Lessor showing that the improvements in Section 3.2(4) have
been completed.
3.3. Landscaping.
(1) Material landscaping or aesthetic improvements will be made by the
Lessee as mutually agreed upon by the Lessor and Lessee. Lessee shall
maintain all landscaping or aesthetic improvements to the satisfaction of Lessor.
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(2) No other fence shall be installed on the Demised Premises without the
approval of Lessor.
3.4. Flagpoles. Lessee shall construct on the Demised Premises in a location
approved by Lessor not later than one year after the commencement of this Lease not
less than three (3) 35 -foot lighted flag poles, one of which shall display a minimum 5
foot by 8 foot official flag of the City of Dubuque, which official flag Lessor shall provide
to Lessee.
3.5. Railroad Extensions.
(1) For any railroad tracks existing as of the commencement of this Lease
and in the event Lessee installs any track to serve the Demised Premises,
Lessee shall construct or maintain such track as will permit Lessor or any other
Lessee of Lessor, to connect thereto for the purpose of serving proposed tenants
occupying land in the vicinity of the Demised Premises and the parties hereto
acknowledge and agree that this Section 3.5 is part of the consideration for this
Lease, and Lessee agrees to cooperate with said parties to make such
connections to the track of Lessee. In the event that Lessor should lease
additional property to tenant or tenants requiring connection to a track serving
Lessee's property, Lessee shall be entitled to charge such tenant making
connection to such track a proportionate cost for the track maintenance, based
upon the usage by the tenant of Lessee's track calculated on a per railroad car
basis. Such costs shall be limited to that part of Lessee's track used by such
other tenant or tenants.
(2) Lessor shall maintain, or cause any of its tenants to maintain, railroad
tracks located on Lessor -owned property other than the Demised Premises that
serve Lessee's property.
SECTION 4. ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
4.1. Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by
mortgage, deed of trust or other proper instrument, its leasehold interest and estate in
the Demised Premises, together with all Improvements on the Demised Premises, as
security for any indebtedness of Lessee, provided that no such encumbrance shall
extend beyond the term of this Lease. Lessee shall provide prompt written notice to
Lessor of any such encumbrance together with a copy of such encumbrance. In the
event of any judicial or nonjudicial foreclosure under any mortgage, deed of trust or
other similar instrument made by Lessee covering its leasehold interest in the Demised
Premises, Lessor shall, upon such foreclosure or sale, recognize the purchaser
thereunder as lessee under this Lease, provided such purchaser expressly agrees in
writing to be bound by the terms of this Lease.
4.2. Notice to Holder of Encumbrance; Right of Holder to Cure Lessee's Default. If
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Lessee shall encumber its leasehold interest and estate in the Demised Premises and if
Lessee, or the holder of the indebtedness, its successors and /or assigns (the Holder)
secured by the encumbrance shall give notice to Lessor within 30 days thereafter of the
existence of the encumbrance and the address of the Holder, then Lessor shall mail or
deliver to the Holder, at such address, a duplicate copy of all notices in writing which
Lessor may, from time to time, give or serve on Lessee under and pursuant to the terms
and provisions of this Lease. The copies shall be mailed or delivered to the Holder at, or
near as possible to, the same time the notices are given to or served on Lessee. The
Holder may, at its option, at any time before the rights of Lessee shall be terminated as
provided in this Lease, pay any of the rents due under this Lease or pay any taxes and
assessments, or do any other act or thing required of Lessee by the terms of this Lease,
or do any act or thing that may be necessary and proper to be done in the observance
of the covenants and conditions of this Lease or to prevent the termination of this
Lease; provided, however, that the doing of any act or thing requiring possession of the
Demised Premises shall be subject to the further rights of Holder as set forth in 16.2.
All payments so made and all things so done and performed by the Holder shall be
effective to prevent a foreclosure of the rights of Lessee thereunder as the same would
have been if done and performed by Lessee.
SECTION 5. TAXES.
5.1. Lessee agrees to pay as additional rent an amount equal to real estate taxes
upon the real estate of the Demised Premises that become payable during the term
hereof and which would become delinquent if not so paid during the term hereof.
Lessee shall further provide to Lessor official receipts of the appropriate taxing authority
or other evidence satisfactory to Lessor evidencing payment thereof.
5.2. During the term of this Lease, Lessee further agrees to pay all other taxes, fees
(including but not limited to storm water fees), rates, charges, levies and assessments,
general and special, of every name, nature and kind, whether now known to the law or
hereafter created which may be taxed, charged, assessed, levied or imposed upon said
real estate and which become payable during the term hereof and which would become
delinquent if not so paid during the term hereof, any buildings or improvements thereon
which may be taxed, charged, assessed, levied or imposed upon the leasehold estate
hereby created and upon the reversionary estate in said real estate during the term
hereof and which become payable during the term hereof and which would become
delinquent if not so paid during the term hereof, and all such other taxes, fees, rates,
charges, levies and assessments shall be paid by Lessee as they become due and
before they become delinquent during the term hereof.
5.3. Lessee agrees to timely pay all taxes, fees, assessments or other public charges
levied or assessed by lawful authority (but reasonably preserving Lessee's rights of
appeal) against its personal property on the premises, during the term of this Lease.
5.4. Nothing herein shall require Lessee to pay any of Lessor's income taxes,
surtaxes, excess profit taxes or any taxes on the rents reserved to Lessor hereunder.
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5.5. Lessee shall at all times have the right to contest in good faith, in any proper
proceedings, in the name of Lessor if necessary, the payment or satisfaction of any
such taxes, fees, assessments, rates, charges or levies so agreed to be paid by
Lessee, if the validity thereof, or the right to assess or levy the same against or collect
the same from said Demised Premises or Improvements, shall be disputed. Upon the
conclusion of any such suit or proceedings, or not less than three (3) months prior to the
date when the right to redeem therefrom expires, whichever will be the earlier, Lessee
shall promptly pay and satisfy such disputed tax, fee, assessment or other charge as
finally determined, together with all expenses, costs and attorneys' fees whatsoever
incurred in connection therewith.
SECTION 6. REPAIRS.
6.1. Lessee shall at all times during the term of this Lease, at Lessee's own costs and
expense, keep the Demised Premises and the Improvements thereon, and all
sidewalks, curbs, and all appurtenances to the Demised Premises, in good order,
condition and repair, casualties and ordinary wear and tear excepted and to a condition
satisfactory to Lessor. Lessee shall keep the Demised Premises in such condition as
may be required by law and by the terms of the insurance policies furnished pursuant to
this Lease, whether or not such repair shall be interior or exterior, and whether or not
such repair shall be of a structural nature. Upon reasonable notice to Lessee, Lessor
may, at its discretion and at its cost, conduct an annual inspection of the Demised
Premises to determine Lessee's compliance with this Section 6.
6.2. Lessor shall have the right to require Lessee upon written notice to repair or
remove any structure on the Demised Premises which Lessor determines does not
comply with the requirements of this Section, and Lessee shall repair or remove, as the
notice may require, any such structure within one - hundred twenty (120) days after
receipt of such notice.
6.3. Lessor shall have no obligation to Lessee for any maintenance expense of any
kind on the Demised Premises, including but not limited to, private roads or railroad
tracks. However, Lessor shall, at Lessor's expense, provide routine maintenance and
snow removal for Koch Court, and shall repair Koch Court by means of asphalt overlay
in 2012, with Lessee paying one -third of the expense of the asphalt overlay.
6.4 Lessee agrees to perform all maintenance dredging necessary to serve the
Demised Premises. For dredging performed in calendar year 2012 only, Lessor agrees
to pay half the reasonable cost incurred by Lessee to complete the dredging operations.
All maintenance dredging costs thereafter shall be the sole responsibility of Lessee. Any
maintenance dredging performed to serve the Demised Premises shall be in
compliance with all local, state and federal regulations, and applicable permits.
(1) Lessor shall be responsible for obtaining and maintaining a current Army
Corps of Engineers Maintenance Dredging Permit (the Permit) and shall promptly
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provide a copy of the Permit to Lessee. Lessee shall be authorized to perform
maintenance dredging necessary to serve the Demised Premises under the
applicable Permit. Any maintenance dredging performed to serve the Demised
Premises shall not exceed the area limits, lines and grades as shown on
attached Exhibit C or as authorized in the Permit.
(2) Lessee shall be responsible for all of the foregoing associated
maintenance dredging costs according to the requirements of the applicable
Permit.
(3) If Lessor incurs costs to remove and dispose of Lessee's dredge material
from the temporary disposal site, Lessee shall be fully responsible for and shall
reimburse Lessor for all costs incurred by Lessor.
SECTION 7. COMPLIANCE WITH LAW.
7.1. During the term of this Lease, Lessee shall comply with all local, state and
federal laws applicable to Lessee's use of the Demised Premises, including but not
limited to the Americans with Disabilities Act and the Iowa Smoke Free Air Act.
7.2. Lessee shall not commit waste on the Demised Premises except as necessary
for its business purposes including the removal or construction of any buildings and
Improvements on the Demised Premises, and shall be liable for any damages to or
destruction of any buildings or Improvements on the Demised Premises resulting from
waste and shall be required to repair or rebuild such buildings or Improvements.
Lessee shall not remove any Improvements on the Demised Premises except as
allowed pursuant to this Lease. All trash, garbage and refuse of any kind shall be
promptly removed from the Demised Premises by Lessee.
SECTION 8. ALTERATIONS. Lessee shall not, without Lessor's prior written
consent, which consent shall not be unreasonably withheld, make any alteration,
addition, or modification to any Improvement on the Demised Premises that exceeds
Twenty -Five Thousand Dollars ($25,000.00) in cost. Any alteration, addition, or
modification of less than Twenty -Five Thousand ($25,000.00) Dollars shall not require
Lessor's consent.
SECTION 9. USE OF DEMISED PREMISES.
9.1. Lessee shall not knowingly use or allow the Demised Premises or any buildings
or Improvements thereon or any appurtenances thereto, to be used or occupied for any
unlawful purpose or in violation of any certificate of occupancy. Lessee shall not suffer
any act to be done or any condition to exist within the Demised Premises or in any
Improvement thereon, or permit any article to be brought therein, which is dangerous,
unless safeguarded as required by law, or which, in law, constitute a nuisance, public or
private, or which may make void or voidable any insurance in force with respect thereto.
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9.2. Any vessels or barges docked along the Demised Premises for purposes other
than active loading /unloading shall be no more than 2 vessels or barges in width away
from the dock, shall at all times be maintained in a good state of repair, and shall not be
used for the storage of junk or salvage material. In no event, however, shall any vessels
or barges interfere with the use of any waterway by other users, nor shall the number of
vessels or barges actively loading or unloading exceed 4 .
9.3. Lessee hereby grants access to Lessor to the levee and floodwall at all times for
Lessor's operations and maintenance of the levee and floodwall. Lessee acknowledges
that there is a U.S. Army Corps of Engineers Clear Zone of 20' from the levee and
floodwall that must be free from all storage or construction, and Lessee agrees to
comply with such free zone requirement at all times. That notwithstanding, but only to
the extent it complies with the rules of the U.S. Army Corps of Engineers, Lessee shall
be allowed to maintain the use and placement of the following existing structures:
fence, dock pipeline for unloading operations, dock walkway, and dock shack.
SECTION 10. INSURANCE.
10.1. Lessee shall maintain during the term of this Lease insurance as set forth in the
City's standard Insurance Schedule for Lessees of City Property, as such uniform,
standardized schedule may from time to time be amended. The current Insurance
Schedule is attached to this Lease Agreement as Insurance Schedule A. Lessor shall
provide written notice of any amendment to the Insurance Schedule not less than sixty
days prior to the effective date of such amendment.
10.2. Upon completion of construction of Improvements, Lessee shall maintain, or
cause to be maintained, at its cost and expense (and from time to time at the request of
City shall furnish proof of insurance as follows:
Property insurance against loss and /or damage to Improvements under an
insurance policy written on the Special Perils Form in an amount not less
than the full insurable replacement value of Improvements, but any such
policy may have a deductible amount of not more than $50,000.00. No
policy of insurance shall be so written that the proceeds thereof will
produce less than the minimum coverage required by the preceding
sentence, by reason of co- insurance provisions or otherwise, without the
prior consent thereto in writing by City. The term "replacement value"
shall mean the actual replacement cost of Improvements (excluding
foundation and excavation costs and costs of underground flues, pipes,
drains and other uninsurable items) and equipment, and shall be
determined from time to time at the request of City, but not more
frequently than once every three years, and paid for by Lessee.
10.3. All insurance required by this Section shall be taken out and maintained in
responsible insurance companies selected by Lessee which are authorized under the
laws of the State of Iowa to assume the risks covered thereby or Lessee may at its
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election self- insure itself pursuant to the aforementioned guidelines. Lessee shall
deposit annually by not later than July 1 of each year with City a certificate or
certificates or binders of the respective insurers stating that such insurance is in force
and effect. Lessee shall furnish City evidence satisfactory to City that the policy has
been renewed or replaced by another policy conforming to the provisions of this , or that
there is no necessity therefor under the terms hereof. In lieu of separate policies,
Lessee may maintain a single policy, or blanket or umbrella policies, or a combination
thereof, which provide the total coverage required herein, in which event Lessee shall
deposit with City a certificate or certificates of the respective insurers as to the amount
of coverage in force upon Improvements, provided, however, the specific limit shall not
be impaired.
10.4. Lessee agrees to notify City immediately in the case of damage exceeding
$50,000.00 in amount to, or destruction of, Trade Fixtures or buildings or any portion
thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net
Proceeds), shall be paid directly to Lessee, and Lessee shall forthwith repair,
reconstruct and restore the Trade Fixtures or buildings to substantially the same or an
improved condition or value as they existed prior to the event causing such damage
and, to the extent necessary to accomplish such repair, reconstruction and restoration,
or remove such Trade Fixtures or buildings. Lessee shall apply the Net Proceeds of any
insurance relating to such damage received by Lessee to the payment or
reimbursement of the costs thereof, subject, however, to the terms of any mortgage
encumbering title to the Property.
10.5. Lessee shall complete the repair, reconstruction and restoration of any railroad
spur, docks, or dolphins, whether or not the Net Proceeds of insurance received by
Lessee for such purposes are sufficient.
SECTION 11. LESSOR'S WARRANTIES AND REPRESENTATIONS
11.1. Lessor's Representation of Good Title. Lessor covenants and warrants that
Lessor is lawfully seized in possession of the Demised Premises, and that it has full
right and authority to enter into this Lease for the full term hereof, and covenants and
agrees that upon paying the rent provided for herein, and upon Lessee's performing the
covenants and agreements of this Lease required to be performed by said Lessee, that
it will have, hold and enjoy quiet possession of the Demised Premises. Lessor warrants
to Lessee that the Demised Premises are properly zoned for the conduct of the
operation of Lessee's business.
11.2. Lessor makes no representations or warranties as to the condition, including
environmental condition, of the Demised Premises and Lessee accepts the Demised
Premises as is.
SECTION 12. LESSEE'S WARRANTIES AND REPRESENTATION.
12.1. Lessee Compliance With Law. Lessee shall comply with all applicable local,
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state and federal laws, rules, regulations and permits with regard to the Demised
Premises and its use, occupancy and control of the Demised Premises.
12.2. Environmental Matters.
(1) Lessee covenants and agrees that Lessor shall have no responsibility for
or liability arising from any release of a Hazardous Substance which is caused by
or results from Lessee, Lessee's use, occupancy or control of the Demised
Premises, except for Lessor Hazardous Substances (any Hazardous Substance
which leaches or migrates upon the Demised Premises from any property owned
by Lessor). Notwithstanding any other provision of this Lease, Lessee shall not
have any responsibility for any Hazardous Substance which leaches or migrates
upon the Demised Premises from any adjacent property or any release of a
Hazardous Substances which is caused by Lessor or which pre- exists the date of
this Lease, except as follows: (a) Lessee shall be responsible for known pre-
existing releases for which Lessee fails to take due care and adequate
precaution and /or for which Lessee's actions or inactions cause a worsening of
the release, and (b) Lessee shall provide full cooperation, assistance, and
access to Lessor or other parties investigating and /or responding to a threatened
or actual release.
(2) Lessee covenants and agrees to promptly notify Lessor of any release of
Hazardous Substance for which Lessee is responsible under this Section 12.2(1)
that exceeds permitted levels as defined by any local, state or federal laws
applicable to Lessee's use of the Demised Premises originating after the
effective date of this Lease ( "Release ") in, on or about the Demised Premises of
which Lessee suspects or has actual knowledge.
(3) Lessee covenants and agrees to promptly take any and all necessary and
appropriate response to fully address any Release following the advance notice
to Lessor required in Section 12.2(2) above. Such response shall include, without
limitation, notification to appropriate governmental authorities, as may be
required by applicable law. Lessee shall respond to such Release to the full
extent required by applicable law; however, in no event shall Lessee allow
limitations or restrictions to be placed on the Demised Premises without the
written consent of the Lessor.
(4) Except as necessary to conduct its operations and use the Demised
Premises as detailed in Section 1.6 and 1.7, Lessee covenants and agrees to not
manufacture, treat or dispose of Hazardous Substances at the Demised
Premises or allow the manufacture, treatment, or disposal of Hazardous
Substances on the Demised Premises. Lessee shall use and store on the
Demised Premises only those Hazardous Substances as are associated with its
regular business activities, and then only as allowed by applicable law.
(5) For the purposes of this Lease, "Hazardous Substance" or "Hazardous
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Substances" means any hazardous or toxic substance, material or waste which
is or becomes regulated by any local government, the State of Iowa or the United
States Government. It includes, without limitation, any material or substance
that is (i) defined as a "hazardous substance" or "hazardous waste" under
Chapter 455B, Iowa Code, (ii) petroleum and petroleum products, (iii) asbestos
containing materials in any form or condition, (iv) designated as a "hazardous
substance" pursuant to 311 of the Federal Water Pollution Control Act (33
U.S.C. § 1321), (v) defined as a "hazardous waste" pursuant to § 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., (vi)
defined as a "hazardous substance" pursuant to § 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.0 § 9601 et
seq., or (vii) defined as a "regulated substance" pursuant to Subchapter IX, Solid
Waste Disposal Act (Regulation of Underground Storage Tanks), 42 U.S.C.
§ 6991 et seq.] The term "Hazardous Substance" shall not include any air
emissions discharged into the atmosphere as allowed by a duly issued permit
from the applicable governmental agency.
SECTION 13. INDEMNIFICATION.
13.1. Indemnification of Lessee. To the extent allowed by law, Lessor will defend,
indemnify and save harmless Lessee from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted
against Lessee by reason of (a) any accident, injury to or death of persons or loss of or
damage to property occurring on or about the Demised Premises and resulting from any
act or omission of Lessor, (b) any failure on the part of Lessor to perform or comply with
any of the terms of this Lease and (c) any breach on the part of Lessor of any warranty
or representation contained in Section 11. In case any action, suit or proceeding is
brought against Lessee by reason of such occurrence, Lessor will, at Lessor expense
and discretion, either defend such action, suit or proceeding, or cause the same to be
defended by counsel approved by Lessee, which approval will not be unreasonably
withheld.
13.2. Indemnification of Lessor. Lessee will defend, indemnify and save harmless
Lessor from and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, reasonable attorneys' fees and
expenses) imposed upon or incurred by or asserted against Lessor by reason of (a) any
accident, injury to or death of persons or loss of or damage to property occurring on or
about the Demised Premises during the term of this Lease and resulting from any
negligence of Lessee or anyone claiming by, through or under Lessee during the term
of the Lease and (b) any failure on the part of Lessee to perform or comply in any
material respect with any of the material terms of this Lease, and (c) any material
breach on the part of Lessee of any warranty or representation contained in Section 12.
In case any action, suit or proceeding is brought against Lessor by reason of such
occurrence, Lessee will, at Lessee's expense and discretion, either defend such action,
suit or proceeding, or cause the same to be defended by counsel approved by Lessor,
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which approval will not be unreasonably withheld.
13.3. Survival. The obligations and liabilities under this Section shall survive and
continue in full force and effect and shall not be terminated, discharged or released, in
whole or in part, irrespective of the termination or expiration of the term of this Lease.
SECTION 14. CONDEMNATION.
14.1. Entire Condemnation. If at any time during the term of this Lease all or
substantially all of the Demised Premises or the Improvements thereon shall be taken in
the exercise of the power of eminent domain by any sovereign, municipality or other
public or private authority, then this Lease shall terminate on the date of vesting of title
in such taking and any prepaid rent shall be apportioned as of said date. Substantially
all of the Demised Premises and the Improvements thereon shall be deemed to have
been taken if the remaining portion of the Demised Premises shall not be of sufficient
size to permit Lessee, in Lessee's sole discretion, to operate its business thereon in a
manner similar to that prior to such taking.
14.2. Allocation of Award. Any award for such taking of all or substantially all of the
Demised Premises shall be paid to the parties hereto in accordance with the following:
(1) To Lessor, the amount of the award attributable to the Demised Premises,
determined as if this Lease was not in effect at the time of such award, excluding
therefrom the amount of the award attributable to new Improvements constructed
by Lessee but not Improvements existing at the commencement of the Term of
this Lease except to the extent Lessee had constructed those Improvements
during a prior leasehold, and all other sums not directly attributable to the value
of the Land constituting the Demised Premises;
(2) To Lessee, the entire award except that portion allocated to Lessor above.
14.3. Partial Condemnation.
(1) If less than all or substantially all of the Demised Premises or the
Improvements thereon shall be taken in the exercise of the power of eminent
domain by any sovereign, municipality or other public or private authority, then
Lessee, at its option, may elect to continue this Lease in full force and effect or
terminate this Lease. If Lessee shall elect to maintain this Lease in full force and
effect, the award for such partial condemnation shall be allocated as provided in
14.2, and Lessee shall proceed with reasonable diligence to carry out any
necessary repair and restoration so that the remaining Improvements and
appurtenances shall constitute a complete structural unit or units which can be
operated on an economically feasible basis under the provisions of this Lease.
In the event Lessee elects to continue this Lease in full force and effect after a
partial condemnation, the Rent shall be reduced in proportion to the value of the
area of the Demised Premises taken.
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(2) Should Lessee elect to terminate this Lease upon a partial condemnation,
Lessee shall provide Lessor with written notice of such election within thirty (30)
days after the date of vesting of title for such taking. Lessee shall specify in such
written notice the date on which this Lease shall terminate, which date shall be
not less than 60 days nor more than 360 days after delivery of such notice to
Lessor (the Termination Date). In the event Lessee terminates this Lease, as
provided for in this 13.3, Lessee shall be entitled to the entire award for such
partial taking.
14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised
Premises or the Improvements thereon or the appurtenances thereto shall be taken at
any time during the term of this Lease in the exercise of the power of eminent domain
by any sovereign, municipality, or other authority, the term of this Lease shall not be
reduced or affected in any way, and Lessee shall continue to pay in full the rent,
additional rent and other sum or sums of money and charges herein reserved and
provided to be paid by Lessee, and the entire award for such temporary taking shall be
paid to Lessee. Lessee shall repair and restore any and all damage to the Demised
Premises and the Improvements as soon as reasonably practicable after such
temporary taking.
SECTION 15. ASSIGNMENT AND SUBLETTING. This Lease may not be assigned
by Lessee without the prior written consent of Lessor, which consent shall not be
unreasonably withheld, provided said third party agrees to comply with the terms and
conditions of this Lease. Lessee may sublet parts of the Demised Premises without the
prior consent of Lessor provided Lessee's subtenants agree to comply with the
applicable terms and conditions of this Lease, and provided further that Lessee shall
remain responsible to Lessor for the terms and conditions of this Lease.
SECTION 16. DEFAULT.
16.1. Lessor's Rights in the Event of Lessee's Default. If Lessee shall fail or neglect to
observe, keep or perform any of the covenants, terms or conditions contained in this
Lease on its part to be observed, kept or performed, and the default shall continue for a
period of thirty (30) days after written notice from Lessor setting forth the nature of
Lessee's default (it being intended that in connection with a default not susceptible of
being cured with diligence within thirty (30) days, the time within which Lessee has to
cure the same shall be extended for such period as may be necessary to complete the
same with all due diligence, but in no event longer than ninety (90) days), then and in
any such event, Lessor shall have the right at its option, on written notice to Lessee, to
terminate this Lease. Lessor shall thereafter have the right to enter and take possession
of the Demised Premises with process of law and to remove all personal property from
the Demised Premises and all persons occupying the Demised Premises and to use all
necessary force therefor and in all respects to take the actual, full and exclusive
possession of the Demised Premises and every part of the Demised Premises as of
Lessor's original estate, without incurring any liability to Lessee or to any persons
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occupying or using the Demised Premises for any damage caused or sustained by
reason of such entry on the Demised Premises or the removal of persons or property
from the Demised Premises.
16.2. Rights of Holder of Encumbrance in Event Lessee Defaults. If Lessee fails or
neglects to observe, keep or perform any of the covenants, terms or conditions
contained in this Lease on its part to be observed, kept or performed, the Holder of any
indebtedness secured by an encumbrance on the leasehold estate under this Lease
shall have thirty (30) days after receipt of written notice from Lessor setting forth the
nature of Lessee's default and a reasonable time thereafter if it shall have commenced
foreclosure or other appropriate proceedings in the nature thereof within such thirty (30)
days and is diligently prosecuting such proceedings, but in no event longer than ninety
(90) days, within which to endeavor to make good or remove the default or cause for
termination of the Lease. All right of Lessor to terminate this Lease on the failure or
neglect of Lessee to observe, keep and perform the covenants, terms and conditions of
this Lease is, and shall continue to be, at all times prior to payment in full of the
indebtedness to the Holder of Lessee, subject to and conditioned on Lessor's having
first given the Holder written notice thereof and the Holder having failed to cause the
default or cause for termination to be made good or removed within thirty (30) days after
receiving written notice of default or cause for termination or within a reasonable time
thereafter if it shall have commenced foreclosure or other appropriate proceedings in
the nature of foreclosure within such thirty (30) days and is diligently prosecuting such
proceedings, but in no event longer than ninety (90) days. In the event that the Lease is
terminated due to the Lessee's bankruptcy, insolvency or other proceedings, and in the
event the Holder has complied with the terms of this 16.2, then Lessor at Holder's
option, shall enter into a new lease with Holder or the successful bidder at foreclosure
on the same terms as this Lease, for the term then remaining, and specifically
preserving all unexercised options.
16.3. Lessee's Rights in the Event of Lessor's Default. If Lessor shall fail or neglect to
observe, keep or perform any of the covenants, terms or conditions contained in this
Lease on its part to be observed, kept or performed, and the default shall continue for a
period of thirty (30) days after written notice from Lessee setting forth the nature of
Lessor's default (it being intended that in connection with a default not susceptible of
being cured with diligence within thirty (30) days, the time within which Lessor has to
cure the same shall be extended for such period as may be necessary to complete the
same with all due diligence, but in no event longer than ninety (90) days), then and in
any such event, Lessee shall have all rights available to it provided by law or equity. If
Lessor's default shall render the Demised Premises of no operational use to Lessee,
and the default shall continue for a period of thirty (30) days after written notice from
Lessee setting forth the nature of Lessor's default, then Lessee shall have no further
obligation for the payment of rent, taxes, or wharfage or for the provision of Products to
Lessor, and Lessee may terminate this Lease Agreement and remove all Trade Fixtures
and Improvements subject to Section 3.2.
SECTION 17. RIGHT TO CURE OTHER'S DEFAULTS. Whenever and as often as
15
a party shall fail or neglect to comply with and perform any term, covenant, condition or
agreement to be complied with or performed by such party hereunder, then, following
thirty (30) days' prior written notice to such defaulting party (or such additional time to
cure as may be accorded Lessee pursuant to 16.1 above, but in no event longer than
ninety (90) days), the other party, at such other party's option, in addition to all other
remedies available to such other party, may perform or cause to be performed such
work, labor, services, acts or things, and take such other steps, including entry onto the
Demised Premises and the Improvements thereon, as such other party may deem
advisable, to comply with and perform any such term, covenant, condition or agreement
which is in default, in which event such defaulting party shall reimburse such other party
upon demand, and from time to time, for all costs and expenses suffered or incurred by
such other party in so complying with or performing such term, covenant, condition or
agreement. The commencement of any work or the taking of any other steps or
performance of any other act by such other party pursuant to the immediately preceding
sentence shall not be deemed to obligate such other party to complete the curing of any
term, covenant, condition or agreement which is in default.
SECTION 18. QUIET ENJOYMENT. Lessor covenants that at all times during the
term of this Lease, so long as Lessee is not in default hereunder, Lessee's quiet
enjoyment of the Demised Premises or any part thereof shall not be disturbed by any
act of Lessor, or of anyone acting by, through or under Lessor. Notwithstanding the
foregoing, Lessor shall have the right upon reasonable notice to Lessee to enter the
Demised Premised at any time to determine whether Lessee is in compliance with the
requirement of this Lease.
SECTION 19. ESTOPPEL CERTIFICATES. Each party hereto agrees that at any
time and from time to time during the term of this Lease, within ten (10) days after
request by the other party hereto or by any lender having an interest in Lessee's
leasehold estate, it will execute, acknowledge and deliver to the other party or to such
lender or any prospective purchaser, assignee or any mortgagee designated by such
other party, a certificate stating (a) that this Lease is unmodified and in force and effect
(or if there have been modifications, that this Lease is in force and effect as modified,
and identifying the modification agreements), (b) the date to which rent has been paid,
(c) whether or not there is any existing default by Lessee in the payment of any rent or
other sum of money hereunder, and whether or not there is any other existing default by
either party hereto with respect to which a notice of default has been served, and, if
there is any such default, specifying the nature and extent thereof; and (d) whether or
not there are any setoffs, defenses or counterclaims against enforcement of the
obligations to be performed hereunder existing in favor of the party executing such
certificate.
SECTION 20. WAIVER. No waiver by either party hereto of any breach by the other
of any term, covenant, condition or agreement herein and no failure by any party to
exercise any right or remedy in respect of any breach hereunder, shall constitute a
waiver or relinquishment for the future of any such term, covenant, condition or
agreement or of any subsequent breach of any such term, covenant, condition or
16
agreement, nor bar any right or remedy of the other party in respect of any such
subsequent breach, nor shall the receipt of any rent, or any portion thereof, by Lessor,
operate as a waiver of the rights of Lessor to enforce the payment of any other rent then
or thereafter in default, or to terminate this Lease, or to recover the Demised Premises,
or to invoke any other appropriate remedy which Lessor may select as herein or by law
provided.
SECTION 21. SURRENDER. Lessee shall, on the last day of the term of this Lease
or upon any termination of this Lease, surrender and deliver up the Demised Premises,
with the Improvements then located thereon into the possession and use of Lessor,
without fraud or delay and in good order, condition and repair, reasonable wear and tear
excepted, free and clear of all lettings and occupancies, free and clear of all liens and
encumbrances other than those existing on the date of this Lease and those, if any,
created by Lessor, without (except as otherwise provided herein) any payment or
allowance whatever by Lessor on account of or for any buildings and Improvements
erected or maintained on the Demised Premises at the time of the surrender, or for the
contents thereof or appurtenances thereto. That notwithstanding, in accordance with
Section 3.2 of this Lease, Lessee may remove any Improvements within thirty (30) days
of termination of the Lease. Lessee's Trade Fixtures, personal property and other
belongings of Lessee or of any sublessee or other occupant of space in the Demised
Premises shall be and remain the property of Lessee, and Lessee shall, except for
Lessor's default, within thirty (30) days after the expiration of the Term of this Lease
remove the same, and shall pay pro -rated rent for each day it remains on the Demised
Premises, and in the event Lessee shall fail to do so, Lessor may cause the Trade
Fixtures to be removed and Lessee agrees pay Lessor for the costs of removal within
thirty (30) days of receipt of a statement therefore from Lessor.
SECTION 22. MEMORANDUM OF LEASE. Each of the parties hereto will, promptly
upon request of the other, execute a memorandum of this Lease in a form suitable for
recording setting forth the names of the parties hereto and the term of this Lease,
identifying the Demised Premises, and also including such other clauses therein as
either party may desire, except the amounts of Basic Rent payable hereunder.
SECTION 23. NOTICES.
23.1. All notices, demands or other writings in this Lease provided to be given or made
or sent, or which may be given or made or sent, by either party to the other, shall be
deemed to have been fully given or made or sent when made in writing and deposited in
the United States mail, registered and postage prepaid, and by facsimile addressed as
follows:
TO LESSOR:
City of Dubuque, Iowa
City Manager
City Hall
50 West 13th Street
Dubuque IA 52001
Fax 319 589 -4149
17
WITH COPY TO: City Attorney
City Hall
50 West 13th Street
Dubuque IA 52001
TO LESSEE: Flint Hills Resources Pine Bend, LLC
c/o Terminal Manager
1550 Koch Court
Dubuque, IA 52001
WITH A COPY TO:
Flint Hills Resources, LP
General Counsel
P.O. Box 2917
Wichita, KS 67201 -2917
23.2. The address and /or fax number to which any notice, demand or other writing may
be given or made or sent to any party as above provided may be changed by written
notice given by the party as above provided.
SECTION 24. MISCELLANEOUS.
24.1. Time of the Essence. Time is of the essence of this Lease and all of its
provisions.
24.2. Governing Law. It is agreed that this Lease shall be governed by, construed and
enforced in accordance with the laws of the State of Iowa.
24.3. Paragraph Headings. The titles to the paragraphs of this Lease are solely for the
convenience of the parties and shall not be used to explain, modify, simplify or aid in the
interpretation of the provisions of this Lease.
24.4. Modification of Agreement. Any modification of this Lease or additional
obligation assumed by either party in connection with this Lease shall be binding only if
evidenced in a writing signed by each party or an authorized representative of each
party.
24.5. Parties Bound. This Lease shall be binding on and shall inure to the benefit of
and shall apply to the respective successors and assigns of Lessor and Lessee. All
references in this Lease to "Lessor" or "Lessee" shall be deemed to refer to and include
successors and assigns of Lessor or Lessee without specific mention of such
successors or assigns.
24.6. Force Majeure. In the event that either party hereto shall be delayed or hindered
18
in or prevented from the performance of any act required hereunder by reason of
strikes, lockouts, labor troubles, unavailability of construction materials, unavailability or
excessive price of fuel, power failure, riots, insurrection, war, terrorist activities,
explosions, hazardous conditions, fire, flood, weather or acts of God, or by reason of
any other cause beyond the exclusive and reasonable control of the party delayed in
performing work or doing acts required under the terms of this Lease (collectively Force
Majeure), then performance of such act shall be excused for the period of the delay and
the period for the performance of any such act shall be extended for a period equivalent
to the period of such delay.
LESSOR: LESSEE:
CITY OF DUBUQUE, IOWA FLINT HILLS RESOURCES PINE
BEND, LLC K P jj
By:
Roy D. Buol, Mayor
Attest:
Kevin S. Firnstahl, City Clerk
19
BY :r <//172-
EXHIBIT A
LEGAL DESCRIPTION
A part of unplatted slough and Government Lot 3, Section 19, Township 89 North,
Range 3 East, 5th Principle Meridian in the City of Dubuque, Dubuque County, Iowa as
shown on the attached Exhibit B.
20
EXHIBIT B
21
EXHIBIT B
.,,,...,,,,,71°.•,,a-,:...=Crida.r•rdaM“.......
7GL'71LtZ::74'; I'''''
k s .,, „, , a.a.rale ,orr-Mal ava:abbe"CACT:11
-• , ..,
Lease Area
L%-f2•D,---c..-.; ..=,^-<<,- ,--,
3,01,-5 s..1.11. lade 'V a, .1.:( otlrtet r<-0e.
Oa•Sip,ert. pas.. or swia.14yra, Mctw ,rtseekk• cr C3
LOarax-tatde. a's, a..■ c•ebt aANce•-•417,....r.aft. wl, e
11.3.aer.rm,leue,stakasoulefangtrea,0
..-a-an1.1.1ttce....■ 0 100 200
Easement
Corps Restricted
Feet
400 600 800
DUB
Alls:rpiece on /iv Alifstspmn
22
EXHIBIT C
23
\ St...it...4
j
SLOE
1,0CAT N
Section
-A
0 30 WY
f!!!!!niiiii■1
110rtzontal Scale
Datum: Mean Si Level
0
1L4
VICINITY
snr 0
e in 3rIlles
AP
15fl'
Hurizmila
cale
Flint UiIia ReSalif,es, LP
Dove Harbor Terminal
Raiiroaa Spw bre
F57,11I 11.-Kk
flick Platform
ma:kteig, Pk
Dove. harbor
LOCATION:
Flint Hits RasourcA,ts, LP:- Dove Harbor Th1011,131
Mississippi River Mile 580,H
City of Dubuque, Iowa
County of Dubuque. State of Iowa
Dubuque
24
2007
CITY OF DUBUQUE
LEASE EXHIBIT C
1.40r ra .noJeo
1.
INSURANCE SCHEouLElnsurance Schedule A
shall furnish a signed Certificate of Insurance to the City of Dubuque, Iowa for the
coverage required in Exhibit I prior to contract inception and at the end of the contract if the term of
contract is longer than 60 days. Each Certificate shall be prepared on the most current ACORD form
approved by the Iowa Department of Insurance or an equivalent.
2. All policies of insurance required hereunder shall be with a carrier authorized to do business in Iowa and
all carriers shall have a rating of A or better in the current A.M. Best's Rating Guide.
3. Each Certificate shall be furnished to the contracting department of the City of Dubuque.
4. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of
Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of
this agreement.
5. All required endorsements to various policies shall be attached to Certificate of insurance.
6. Whenever a specific ISO form is listed, an equivalent form may be substituted subject to the provider
identifying and listing in writing all deviations and exclusions that differ from the ISO form.
7. Provider shall be required to carry the minimum coverage /limits, or greater if required by law or other
legal agreement, in Exhibit I.
25
Insurance Schedule A (continued)
Exhibit
A) COMMERCIAL GENERAL LIABILITY
General Aggregate Limit $2,000,000
Products - Completed Operations Aggregate Limit $1,000,000
Personal and Advertising Injury Limit $1,000,000
Each Occurrence $1,000,000
Fire Damage Limit (any one occurrence) $ 50,000
Medical Payments $ 5,000
a) Coverage shall be written on an occurrence, not claims made, form. All deviations from the
standard ISO commercial general liability form CG 0001, or Business owners form BP 0002,
shall be clearly identified.
b) Include endorsement indicating that coverage is primary and non - contributory.
c) Include endorsement to preserve Governmental Immunity. (Sample attached).
d) Include additional insured endorsement for:
The City of Dubuque, including all its elected and appointed officials, all its employees
and volunteers, all its boards, commissions and /or authorities and their board members,
employees and volunteers, to the extent of Lessee's indemnity obligation hereunder.
B) WORKERS' COMPENSATION, LHWCA & EMPLOYERS LIABILITY
Coverage A
Coverage B
Statutory —State of Iowa
Employers Liability
Each Accident $100,000
Each Employee- Disease $100,000
Policy Limit - Disease $500,000
a) Policy shall include an endorsement providing a waiver of subrogation to the City of
Dubuque.
Longshoreman's and Harbors Workers Compensation Act Coverage
26
IL 10 (12/06) OLD REPUBLIC INSURANCE COMPANY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
CITY OF DUBUQUE, IOWA
GOVERNMENTAL IMMUNITIES ENDORSEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
1 Nonwaiver of Governmental Immunity. The insurance carrier expressly agrees and states that
the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional
Insured does not waive any of the defenses of governmental immunity available to the City of
Dubuque, Iowa under Code of Iowa Section 670.4 as it now exists and as it may be amended
from time to time.
2. Claims Coverage. The insurance carrier further agrees that this policy of insurance shall cover
only those claims not subject to the defense of governmental immunity under the Code of Iowa
Section 670.4 as it now exists and as it may be amended from time to time. Those claims not
subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this
insurance policy.
3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting
any defense of governmental immunity, and may do so at any time and shall do so upon the
timely written request of the insurance carrier.
4. Non - Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the
insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque,
Iowa under this policy for reasons of governmental immunity unless and until a court of
competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by
the City of Dubuque, Iowa.
5. No Other Change in Policy. The above preservation of governmental immunities shall not
otherwise change or alter the coverage available under the policy.
27