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Kephart Store Lease with School District DU~~E ~c/k.~ MEMORANDUM June 24, 2005 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Business Property Lease City of Oubuque and the Oubuque Community School District On May 16, 2005, the City Council approved the award of the construction contract for the City Hall third floor structural repairs. This project will require the Engineering staff currently located on City Hall third floor to temporarily relocate to an off-site location until the work is completed. The lease is for $650 per month plus utilities. City Engineer Gus Psihoyos recommends City Council approval of a lease between the Oubuque Community School District and the City of Dubuque for rental of the former Kephart's Music Center for a period of up to six months. I concur with the recommendation and respectfully request Mayor and City Council approval. /It{ C/'kLL _ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Gus Psihoyos, City Engineer J I . I \. .,~"...... _.J ;"_J 5U~~E ~c/k.~ MEMORANDUM June 24, 2005 FROM: Michael Van Milligen, City Man.]{;)ager Gus Psi hoyos, City Engineer . . TO: SUBJECT: Business Property Lease City of Dubuque and the Dubuque Community School Oistrict INTRODUCTION The purpose of this memorandum is to recommend City Council consideration and approval of a lease between the Dubuque Community School District and the City of Oubuque for the former Kephart's Music Center at 1157 Central Avenue during the City Hall third floor structural repairs project. BACKGROUND On May 16, 2005, the City Council approved the award of the construction contract for the City Hall third floor structural repairs project to Tricon Construction. This project involves the abatement and removal of asbestos flooring materials, installation of a structural grid to support the steel and wood members of the third floor framing system, drywall wrapping, painting, and installation of vinyl composite flooring. The work is scheduled to begin July 18, 2005 and is scheduled to be completed by September 1, 2005. DISCUSSION This project will require the Engineering staff currently located at City Hall third floor to temporarily relocate an off-site location until the work is completed. The Engineering Oepartment has negotiated a lease with the Dubuque Community School District to rent the former Kephart's Music Center at 1157 Central Avenue for a period of three month to six months. Engineering also will use the space for storage of existing office equipment. RECOMMENDATION I recommend that the attached lease between the Oubuque Community School District and the City of Dubuque for the former Kephart's Music Center be submitted to the City Council for consideration and approval. BUDGET IMPACT The estimated lease costs are as follows: Rental Utilities $650 @ 6 Months $350 @ 6 Months $3,900 $2.100 $6,000 Estimate The lease expenditure of $6,000 will be derived from the Fiscal Year 2005 cost- savings of the Grand River Center project. ACTION TO BE TAKEN The City Council is requested to consider and approve the attached lease between the Oubuque Community School District and the City of Oubuque. cc: Dubuque Community School Oistrict Dawn Lang, Finance Director Rich Russell, Building Services Manager LEASE - BUSINESS PROPERTY - SHORT FORM THIS AGREEMENT, made and entered into this , by and between Dubuque Community School District ("Landlord"), whose address, for the purpose of this lease, is 2300 Chaney Rd, Dubuque, Iowa 52001, and City of Dubuque, Iowa ("Tenant"), whose address for the purpose of this lease is City Hall, Dubuque, Iowa 52001. The parties agree as follows: 1. PREMISES AND TERM. Landlord leases to Tenant the following real estate, situated in Dubuque County, Iowa: former Kephart's Music Center premises at 1157 Central, Dubuque, Iowa together with all improvements thereon, and all rights, easements and appurtenances thereto belonging, for a term beginning on the 5th day of July, 2005, and ending on the 30th day of September, 2005, upon the condition that Tenant performs as provided in this lease. 2. RENT. Tenant agrees to pay Landlord as rent $ 650.00 per month, in advance commencing on the 5th day of July, 2005, and on the 5th day of each month thereafter, during the term of this lease. All sums shall be paid at the address of Landlord, or at such other place as Landlord may designate in writing. Delinquent payments shall draw interest at 0 % per annum. 3. POSSESSION. Tenant shall be entitled to possession on the first day of the lease term, and shall yield possession to Landlord at the termination of this lease. SHOULD LANDLORD BE UNABLE TO GIVE POSSESSION ON SAID DATE, TENANT'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT. 4. USE. Tenant shall use the premises only for City offices. 5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as herein provided. (b) Tenant shall keep the following in good repair: roof, exterior walls, foundation, sewer, plumbing, heating, wiring, air conditioning, plate glass, windows and window glass, parking area, driveways, sidewalks, exterior decorating, interior decorating, but only to the extent necessary for Tenant's use of the property. Landlord shall not be liable for failure to make any repairs or replacements. (c) Tenant shall maintain the premises in a reasonable safe, serviceable, clean and presentable condition, and shall make all repairs, replacements and improvements to the premises, as provided above, INCLUDING ALL CHANGES, AL TERA TIONS OR ADDITIONS ORDERED BY ANY LA WFULL Y CONSTITUTED GOVERNMENT AUTHORITY DIRECTL Y RELATED TO TENANT'S USE OF THE PREMISES. Tenant shall make no structural changes or alterations without the prior written consent of Landlord. Tenant agrees to remove all snow and ice and other obstructions from the sidewalk on or abutting the premIses. 6. UTILITIES AND SERVICES. Tenant shall pay for all utilities which may be used on the premises. Landlord shall not be liable for damages for any stoppage for needed repairs or for improvements. 7. SURRENDER. Upon the termination of this lease, Tenant will surrender the premises to Landlord in good and clean condition, except for ordinary wear and tear or damage without fault or liability of Tenant. Continued possession, beyond the term of this Lease and the acceptance of rent by Landlord shall constitute a month-to-month extension of this lease. 8. ASSIGNMENT AND SUBLETTING. No assignment or subletting, either voluntary or by operation of law, shall be effective without the prior written consent of Landlord, which consent shall not unreasonably be withheld. 9. INSURANCE. A. PROPERTY INSURANCE. Landlord and Tenant agree to insure their respective real and personal property for the full insurable value. Such insurance shall cover losses included in the Insurance Services Office Broad Form Causes of Loss (formerly fire and Landlord and extended coverage). To the extent permitted by their policies the Landlord and Tenant waive all rights of recovery against each other. B. LIABILITY INSURANCE. Tenant shall obtain commercial general liability insurance in the amounts of $1,000,000 each occurrence and $1,000,000 annual aggregate per location. This policy shall be endorsed to include the Landlord as an additional insured. 10. LIABILITY FOR DAMAGE. Tenant shall be liable to the Landlord for all damage to the property negligently, recklessly or intentionally caused by Tenant (or its agents, employees or invitees), except to the extent the loss is insured and subrogation is waived under the owner's policy, if permitted by the policy. 11. INDEMNITY Tenant will protect, defend, and indemnify Landlord from and against any and all loss, costs, damage and expenses occasioned by, or arising out of, any accident or other occurrence causing or inflicting injury or damage to any person or property, happening or done in, upon or about the premises, or due directly or indirectly to the tenancy, use or occupancy thereof, or any part thereof by Tenant or any person claiming through or under Tenant. Tenant will procure and maintain liability insurance in amounts not less than $ 1,000,000.00 for any person injured, $ 1,000,000.00 for anyone accident, and with the limits of $ 1,000,000.00 for property damage, which names Landlord as an insured. Tenant's insurance shall be primary to Landlord's insurance. 12. DAMAGE. In the event of damage to the premises, so that Tenant is unable to conduct business on the premises, this lease may be terminated at the option of either party. Such termination shall be effected by notice of one party to the other within 5 days after such notice; and both parties shall thereafter be released from all future obligations hereunder. 13. MECHANICS' LIENS. Neither Tenant, nor anyone claiming by, through, or under Tenant, shall have the right to file any mechanic's lien against the premises. Tenant shall give notice in advance to all contractors and subcontractors who may furnish, or agree to furnish, any material, service or labor for any improvement on the premises. 14. DEFAULT, NOTICE OF DEFAULT AND REMEDIES. EVENTS OF DEFAULT A. Each of the following shall constitute an event of default by Tenant: (1) Failure to pay rent when due; (2) failure to observe or perform any duties, obligations, agreements, or conditions imposed on Tenant pursuant to the terms of the lease; (3) abandonment of the premises. "Abandonment" means the Tenant has failed to engage in its usual and customary business activities on the premises for more than fifteen (15) consecutive business days; (4) institution of voluntary bankruptcy proceedings by Tenant; institution of involuntary bankruptcy proceedings in which the Tenant thereafter is adjudged a bankruptcy; assignment for the benefit of creditors of the interest of Tenant under this lease agreement; appointment of a receiver for the property or affairs of Tenant, where the receivership is not vacated within ten (10) days after the appointment ofthe receiver. NOTICE OF DEF AUL T B. Landlord shall give Tenant a written notice specifying the default and giving the Tenant ten (10) days in which to correct the default. If there is a default (other than for nonpayment of a monetary obligation of Tenant, including rent) that cannot be remedied in ten (10) days by diligent efforts of the Tenant, Tenant shall propose an additional period of time in which to remedy the default. Consent to additional time shall not be unreasonably withheld by Landlord. Landlord shall not be required to give Tenant any more than three notices for the same default within any 365 day period. REMEDIES C, In the event Tenant has not remedied a default in a timely manner following a Notice of Default, Landlord may proceed with all available remedies at law or in equity, including but not limited to the following: (1) Termination. Landlord may declare this lease to be terminated and shall give Tenant a written notice of such termination. In the event of termination of this lease, Landlord shall be entitled to prove claim for and obtain judgment against Tenant for the balance of the rent agreed to be paid for the term herein provided, plus all expenses of Landlord in regaining possession of the premises and the reletting thereof, including attorney's fees and court costs, crediting against such claim, however, any amount obtained by reason of such reletting; (2) Forfeiture. If a default is not remedied in a timely manner, Landlord may then declare this lease to be forfeited and shall give Tenant a written notice of such forfeiture, and may, at the time, give Tenant the notice to quit provided for in Chapter 648 of the Code oflowa. 15. SIGNS. Landlord, during the last 30 days of this lease, shall have the right to maintain on the premises either or both a "For Rent" or "For Sale" sign. Tenant will permit prospective tenants or buyers to enter and examine the premises. 16. NOTICES AND DEMANDS. All notices shall be given to the parties hereto at the addresses designated unless either party notifies the other, in writing, of a different address. Without prejudice to any other method of notifying a party in writing or making a demand or other communication, such notice shall be considered given under the terms of this lease when it is deposited in the U.S. Mail, registered or certified, properly addressed, return receipt requested, and postage prepaid. 17. PROVISIONS BINDING. Each and every covenant and agreement herein contained shall extend to and be binding upon the respective successors, heirs, administrators, executors and assigns of the parties hereto. 18. ADDITIONAL PROVISIONS. Tenant shall have the right to extend this lease for three additional terms of one month each by giving Landlord seven days advance notice in writing prior to the expiration of the then current lease term. Tenant, at Tenant's expense, shall have the right to make such alterations to the premises as may be necessary to extend the Tenant's fiber optic network into the premises, including installation of shelving in the back room, running cables in the ceiling and attachment of the fiber optic cable to the building. All such installations shall be removed by the Tenant at the end of the lease and any damage repaired if requested by Landlord. City of Dubuque, Iowa, TENANT By: Dubuque Community School District, LANDLORD By: