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Old Mill Road Lease Agreement Amendment - David S. Hartig Copyright 2014 City of Dubuque Items to be set for Public Hearing # 1. ITEM TITLE: Old Mill Road Lease Agreement Amendment- Hartig SUMMARY: City Manager recommending a public hearing be set for April 4, 2016 to consider an amended and restated lease agreement with David S. Hartig, Jr., with respect to City- owned residential and commercial properties on Old Mill Road. RESOLUTION of Intent to dispose of an interest in City- owned real property by Amendment to Lease Agreement between the City of Dubuque and David S. Hartig, Jr. for the lease of certain real property at 1620, 1650, 1695 and 1699 Old Mill Road SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s), Set Public Hearing for 4/4/16 ATTACHMENTS: Description Type Hartig Lease Agreement-MVM Memo City Manager Memo Staff Memo Staff Memo Sudmeier Letter Supporting Documentation 2004 Lease Agreement Supporting Documentation Amended & Restated Lease Eyecuted Supporting Documentation Resolution Resolutions THE CITY OF Dubuque UBE I erica .i Masterpiece on the Mississippi 2007-2012-2013 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Hartig Lease Agreement DATE: March 14, 2016 In 2004, the City acquired three residential properties and a commercial property on Old Mill Road. David S. Hartig, Jr. contributed $16,850.00 to the City at that time to be used for the acquisition of the flood-damaged commercial property. Mr. Hartig requested and received a 99 year lease for the four properties. Among other things, the lease requires that the properties be maintained as green space and a nature preserve. Section 8 of the Lease Agreement provides that Hartig may not "assign, sublet or otherwise transfer" the property during the term of the lease. It is not clear what happens to the property upon the death of Mr. Hartig. In order to resolve that uncertainty, Mr. Hartig has proposed an amendment to the lease which will allow him to transfer the lease by will or trust, or assign or otherwise transfer the lease during his lifetime with the City's consent, which consent will not be unreasonably withheld. City Attorney Barry Lindahl recommends the City Council set a public hearing for April 4, 2016 on the Amended and Restated Lease Agreement with David S. Hartig Jr. I concur with the recommendation and respectfully request Mayor and City Council approval. Mic ael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager THE CPTY OF DUB bE MEMORANDUM Masterpiece on the Mississ' 1 BARRY LINDAH CITY ATTORNE To: Michael C. Van Milligen City Manager DATE: March 9, 2016 RE: Hartig Lease Agreement In 2004, the City acquired three residential properties and a commercial property on Old Mill Road. David S. Hartig, Jr. contributed $16,850.00 to the City at that time to be used for the acquisition of the flood-damaged commercial property. Mr. Hartig requested a long-term lease of the four properties. The City Council approved a 99-year lease for the four properties on February 16, 2004. A copy of that Lease Agreement is attached. Among other things, the lease requires that the properties be maintained as green space and a nature preserve. Section 8 of the Lease Agreement provides that Hartig may not "assign, sublet or otherwise transfer" the property during the term of the lease. It is not clear what happens to the property upon the death of Mr. Hartig. In order to resolve that uncertainty, Mr. Hartig has proposed an amendment to the lease which will allow him to transfer the lease by will or trust, or assign or otherwise transfer the lease during his lifetime with the City's consent, which consent will not be unreasonably withheld. Because of the lack of clarity of the current lease language, I recommend that the attached Amended and Restated Lease Agreement be submitted to the City Council for consideration and approval. BAL:tIs Attachment F:\USERS\tsteckle\Lindahl\Hartig,David S.Lease\MVM_ResolutionlntentToDispose_030916.doc OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563)583-4113/FAx (563)583-1040/EMAIL balesq@cityofdubuque.org Law Offices of FUERSTE, CAREW,JUERGENS & SUDMEIER, P.C. 200 SECURITY BUILDING 151 WEST 8TH STREET DUBUQUE,IOWA 52001-6810 STEPHEN J.JUERGENS$ WILLIAM C.FUERSTE(1923-2011) ROBERT L.SUDMEIER $* ALLAN J.CAREW(1933-2015) DOUGLAS M.HENRY$ February 29 2016 MARK J.WILLGING$ y , TELEPHONE: A.THEODORE HUINKER$ (563)556-4011 DANITA L.GRANT t* JENNY L.WEISS $t TELECOPIER: NICHOLAS C.THOMPSON $t RICHARD W.KIRKENDALL$ (563)556-7134 EDWARD F.HENRY$ E-MAIL: BRETT R.KEENAN t V1.AIL@•PUERSTELAW.COM $Licensed in Iowa *Licensed in Wisconsin WRITER'S DIRECT tLicensed in Illinois E-MAIL ADDRESS RSLI DMEIER @FUER STELA W.C'ON1 Barry A. Lindahl 300 Main Street Harbor View Place Ste. 330 Dubuque, IA 52001 Re: Hartig Lease Agreement Dear Barry: We've prepared the within Resolution and an Amended and Restated Lease with the additional language that we prefer by amendment in italics so that it can be easily found. Nonetheless, it would still be in recordable form. Please let us know whether you want any further modification before this goes to Council. Very truly yours, FUERSTE, CARE._ , JUERGENS &SUPMEIER, P.C. ---- BY:...-BY: R SUD RLS/kj Enclosures cc: David S. Hartig, Jr. F ill f.,J` }• ,_ . 1 i{ X539~04 F 19 AN 10, 21 Ct;li;?i Y ft�C01?I;ER Preparer EJ C0..IOWA FEES Information Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 Individual's Name Street Address City Phone Barry A. Lindahl ISBA# 6899 SPACE ABOVE THIS LINE FOR RECORDER LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DAVID S. HARTIG, JR. THIS AGREEMENT, made and entered into this i day of by and between the City of Dubuque (City), whose address, for the purpo of this Lease, is 50 W. 13th Street, Dubuque, IA, 52001 and David S. Hartig, Jr. (Hartig), whose address for the purpose of this Lease is 1495 Southern Avenue, Dubuque, IA, 52003. The parties agree as follows: 1. PREMISES AND TERM. City leases to Hartig the following real estate, situated in Dubuque County, Iowa: Lot 1-1-2-1 Mineral Lot 507 Lot 1-1-2-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-1-2-1-4 Mineral Lot 501 Lot 1 Old Mill Place Lot 2 Papke Place Lot 1-1-2-1-1-2-1-4 Mineral Lot 501 Lot 2-1-1-1-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-2-1-4 Mineral Lot 501 together with all improvements thereon, and all rights, easements and appurtenances thereto belonging, for a term beginning on the 7th day of August, 2004, and ending on the 6th day of August, 2103, upon the condition that Hartig performs as provided in this Lease. 2. RENT. Hartig agrees to pay City as rent $ 1.00 for the term of the Lease. The parties acknowledge that Hartig has previously paid to City the sum of $16,800.00 for City's use in the purchase of the premises. For purposes of this Lease Agreement, such amount shall also be considered rent. 3. POSSESSION. Hartig shall be entitled to possession on the first day of the Lease term, or such earlier date as the parties may agree, and shall yield possession to City at the termination of this Lease. SHOULD CITY BE UNABLE TO GIVE POSSESSION ON SAID DATE, HARTIG'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT. 4. USE. Hartig shall use and maintain the premises only for green space and a nature preserve. No parking of vehicles or storage of vehicles or other materials of any kind shall per permitted on the premises. 5. CARE AND MAINTENANCE. (a) Hartig takes the premises as is. (b) Hartig shall maintain the premises in a reasonable safe, clean and presentable condition, including the mowing of grass. Hartig shall not erect any structure of any kind on the premises without the prior written consent of City. City agrees to remove all snow and ice from the sidewalk on or abutting the premises. (c) Hartig shall upon possession of the premises seed or sod the premises at his expense. Hartig may also at his expense plant such trees of such kind and at such locations as he deems appropriate on the premises. 6. UTILITIES AND SERVICES. Hartig shall pay for all utilities and services which may be used on the premises. 7. SURRENDER. Upon the termination of this Lease, Hartig will surrender the premises to City in good and clean condition. Continued possession, beyond the term of this Lease and the acceptance of rent by City shall constitute a month-to-month extension of this Lease. 8. ASSIGNMENT AND SUBLETTING. Hartig shall not assign, sublet or otherwise transfer the premises or any part thereof, and any attempted assignment, subletting or transfer shall work an automatic forfeiture and termination of this Lease. 9. INSURANCE. Hartig shall obtain general liability insurance as set forth in the City's Insurance Schedule for Lessee's of City Property as such schedule may from time to time be amended. A copy of the current schedule is attached here to. 11. INDEMNITY Hartig will protect, defend, and indemnify City 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 Hartig or any person claiming through or under Hartig. 12. MECHANICS' LIENS. Neither Hartig, nor anyone claiming by, through, or under Hartig, shall have the right to file any mechanic's lien against the premises. 13. DEFAULT, NOTICE OF DEFAULT AND REMEDIES. A. The following shall constitute an event of default by Hartig: Failure to observe or perform any duties, obligations, agreements, or conditions imposed on Hartig pursuant to the terms of the Lease. B. City shall give Hartig a written notice specifying the default and giving Hartig ten (10) days in which to correct the default. If there is a default that cannot be remedied in ten (10) days by diligent efforts of Hartig, Hartig shall propose an additional period of time in which to remedy the default. Consent to additional time shall not be unreasonably withheld by City. City shall not be required to give Hartig any more than three notices for the same default within any 365 day period. C. In the event Hartig has not remedied a default in a timely manner following a Notice of Default, City may declare this Lease to be terminated and shall give Hartig a written notice of such termination. In the event of termination of this Lease, City shall be entitled to prove claim for and obtain judgment against Hartig for the reasonable expenses of the City in regaining possession of the premises, including attorney's fees and court costs. D. In the event of termination of this Lease, Hartig shall be entitled to a pro rata abatement of rent. 14. 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. 15. 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. CITY OF DUBUQUE, IOWA By rf Terrance M. Duggan, Ma At st: Jeanne F. Schneider, City Clerk David S. Hartig, Jr. STATE OF IOWA ss: DUBUQUE COUNTY On this / 7 day of F�-6ej 2004, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared David S. Hartig, Jr., to me personally known, who acknowledged the execution of this instrument to be his voluntary act and deed. PlAk WILLIAM G. BLUM Notary Public, State of Iowa *, .1 COMMISSION# 190485 MY COSSION EYP RES o3 a STATE OF IOWA ss: DUBUQUE COUNTY On this I � v da r' ^�' y of �C � 004, , before me, a Notary Public in and for the State of Iowa, in and for said county ersonally appeared Terrance M. Duggan and Karen M. Chesterman to me personall nown, who being by me duly sworn did say that they are the Mayor and Deputy City Clerk, respectively of the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act a d deed of said Municipal Corporation by it volunt ily executed: OIA, r A s' o ary Public, tate of Iowa Fs t Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 RESOLUTION NO. 77 -04 DISPOSING OF AN INTEREST IN REAL PROPERTY BY LEASE WITH DAVID S. HARTIG, JR. WHEREAS, the City of Dubuque, Iowa (City) is the owner of the following properties: Lot 1-1-2-1 Mineral Lot 507 Lot 1-1-2-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-1-2-14 Mineral Lot 501 Lot 2 Papke Place Lot 1-1-2-1-1-2-14 Mineral Lot 501 Lot 2-1-1-1-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-2-1-4 Mineral Lot 501; and City intends to purchase Lot 1 Old Mill Place, all of which properties are referred to herein as the City Property; and WHEREAS, David S. Hartig, Jr. (Hartig) proposes to lease the City Property on the terms set forth in the form of the attached Lease Agreement; and WHEREAS,. on February 16, 2004, the City Council pursuant to notice published as required by law held a public hearing on its intent to dispose of the City Property pursuant to the Lease Agreement and overruled all objections thereto; AND WHEREAS, the City Council finds that it is in the best interest of the City to approve the Lease Agreement for the City Property. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY.OF DUBUQUE, IOWA: Section 1. The Lease Agreement in the form attached hereto is hereby approved. Section 2. The Mayor is hereby authorized and directed to execute the Lease Agreement. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution to be recorded with the Dubuque County Recorder. Passed, approved and adopted this 16th day of February, 2004. Terrance M. Dugg ayor �JeanneSc�hneid�er, City ttest Cler Prepared by and return to: Robert L.Sudmeier, 151 West 8th St.,Ste.200,Dubuque,IA,52001 Telephone: (563)556-4011 AMENDED AND RESTATED LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DAVID S. HARTIG, JR. AMENDED AND RESTATED LEASE AGREEMENT made and entered into this day of , 2016 by and between the City of Dubuque (City), whose address for the purposes of this Lease is 50 W. 13th St., Dubuque, Iowa 52001 and David S. Hartig, Jr. (Hartig), whose address for the purpose of this Lease is 1495 Southern Ave., Dubuque, Iowa 52003. 1. PREMISES AND TERM. City leases to Hartig the following real estate, situated in Dubuque County, Iowa: Lot 1-1-2-1 Mineral Lot 507 i Lot 1-1-2-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-1-2-1-4 Mineral Lot 501 Lot 1 Old Mill Place Lot 2 Papke Place Lot 1-1-2-1-1-2-1-4 Mineral Lot 501 Lot 2-1-1-1-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-2-1-4 Mineral Lot 501 together with all improvements thereon, and all rights, easements and appurtenances thereto belonging, for a term beginning on the 7th day of August, 2004, and ending on the 6 day of August, 2103,upon the condition that Hartig or successors perform as provided in this Lease. Upon the death of David S. Hartig, Jr., all rights and obligations under the Lease shall continue for the benefit of his heirs, devisees or their member trust beneficiaries with the interest subject to being further devised or transferred to successors in interest for the balance of the term. 2. RENT. Hartig agrees to pay City as rent $1.00 for the term of the Lease. The parties acknowledge that Hartig has previously paid to City the sum of$16,800.00 for City's use in the purchase of the premises. For purposes of this Lease Agreement, such amount shall also be considered rent. 3. POSSESSION. Hartig shall be entitled to possession on the first day of the Lease term, I I I or such earlier date as the parties may agree, and he or successors shall yield possession to City at the termination of this Lease. SHOULD CITY BE UNABLE TO GIVE POSSESSION ON SAID DATE, HARTIG'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT. 4. USE. Hartig shall use and maintain the premises only for green space and a nature preserve. No parking of vehicles or storage of vehicles or other materials of any kind shall be permitted on the premises. 5. CARE AND MAINTENANCE. A. Hartig takes the premises as is. B. Hartig and successors shall maintain the premises in a reasonable safe, clean and presentable condition, including the mowing of grass. Hartig and successors shall not erect any structure of any kind on the premises without the prior written consent of City. City agrees to remove all snow and ice from the sidewalk on or abutting the premises. C. Hartig shall upon possession of the premises seed or sod the premises at his expense. Hartig and successors may also at his expense plant such trees of such kind and at such locations as he deems appropriate on the premises. 6. UTILITIES AND SERVICES. Hartig and successors shall pay for all utilities and services which may be used on the premises. 7. SURRENDER. Upon the termination of this Lease, Hartig or successors will surrender the premises to City in good and clean condition. Continued possession, beyond the term of this Lease and the acceptance of rent by City shall constitute a month-to-month extension of this Lease. 8. ASSIGNMENT AND SUBLETTING. Except as otherwise provided in numbered paragraph I for the balance of any term remaining after Hartig's demise andlor any transfer by Hartig of his leasehold interest to a revocable or irrevocable trust established by him, the Lease shall not be assigned, sublet or transferred and any attempt at assignment, subletting or transfer, other than as addressed in this paragraph and paragraph 1 shall require the City's consent, which consent shall not be unreasonably withheld. 9. INSURANCE. Hartig shall obtain general liability insurance as set forth in the City's Insurance Schedule for Lessee's of City Property as such schedule may from time to time be amended. A copy of the current schedule is attached hereto. 10. INDEMNITY. Hartig will protect, defend, and indemnify City 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 Hartig or any person claiming through or under Hartig. 11. MECHANICS' LIENS. Neither Hartig, nor anyone claiming by, through, or under Hartig, shall have the right to file any mechanic's lien against the premises. 2 I 12. DEFAULT,NOTICE OF DEFAULT AND REMEDIES. A. The following shall constitute an event of default by Hartig: Failure to observe or perform any duties, obligations, agreements, or conditions imposed on Hartig or successors pursuant to the terms of the Lease. B. City shall give Hartig or successors a written notice specifying the default and giving ten (10) days in which to correct the default. If there is a default that cannot be remedied in ten (10) days by diligent efforts of the party or parties in possession shall propose an additional period of time in which to remedy the default. Consent to additional time shall not be unreasonably withheld by City. City shall not be required to give Hartig or successors any more than three notices for the same default within any 365 day period. C. In the event Hartig or successors have not remedied a default in a timely manner following a Notice of Default, City may declare this Lease to be terminated and shall give Hartig or successors a written notice of such termination. In the event of termination of this Lease, City shall be entitled to prove claim for and obtain judgment against Hartig or successors for the reasonable expenses of the City in regaining possession of the premises, including attorney's fees and court costs. D. In the event of termination of this Lease, Hartig and successors shall be entitled to a pro rata abatement of rent. 13. 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. 14. 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. CITY OF DUBUQUE, IOWA By: Roy D. Buol, Mayor David S. Hartig, Jr. Attest: City Clerk 3 STATE OF IOWA ) ) ss: DUBUQUE COUNTY ) On this 1 day of�L/%�t� 'J , 2016, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared David S. Hartig, Jr., to me personally known, who acknowledged the execution of this instrument to be his voluntary act and deed. &olz ftz��w� WL NOREEN M. LARSONCOMMISSION NO. 137222Notary Public, State of Iowa n;.y CcMM1S510N EXPIRES STATE OF IOWA ) ss: DUBUQUE COUNTY ) On this day of , 2016,before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol and to me personally known, who being by me duly sworn did say that they are the Mayor and Deputy City Clerk, respectively of the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. Notary Public, State of Iowa 4 RESOLUTION NO. 99-16 INTENT TO DISPOSE OF AN INTEREST IN CITY OWNED REAL PROPERTY BY AMENDMENT TO LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE AND DAVID S. HARTIG, JR. FOR THE LEASE OF CERTAIN REAL PROPERTY AT 1620, 1650, 1695, AND 1699 OLD MILL ROAD WHEREAS, the City of Dubuque, Iowa is the owner of the following described real property (the Leased Premises): Lot 1-1-2-1 Mineral Lot 507 Lot 1-1-2-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-1-2-1-4 Mineral Lot 501 Lot 1 Old Mill Place Lot 2 Papke Place Lot 1-1-2-1-1-2-1-4 Mineral Lot 501 Lot 2-1-1-1-1-2-1-4 Mineral Lot 501 Lot 2-1-2-1-2-1-4 Mineral Lot 501 and; WHEREAS, on February 17, 2004, the City of Dubuque (City) and the David S. Hartig, Jr. (Hartig) entered into a Lease Agreement for the Leased Premises; and WHEREAS, City and Hartig desire to amend the Lease Agreement as set forth in the attached Amended and Restated Lease Agreement; and WHEREAS, the City Council has tentatively determined that it would be in the best interests of the City to approve the Amended and Restated Lease Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City Council will conduct a public hearing on the proposed Amended and Restated Lease Agreement attached hereto in the City Council Chambers at the Historic Federal Building, 350 W. 6th Street, Dubuque, Iowa on the 4th day of April, 2016 beginning at 6:30 p.m. Section 2. That the City Clerk be and is hereby authorized and directed to publish notice of the public hearing according to law. Passed, approved and adopted this 21st day of Marc 016. Attest: Kevin + Firnstahl, Ci Jerk F:\USERS\tsteckle\Lindahl\Hartig, David S. Lease\IntentToDispose_030916.doc Ric i . Jones, Ma. r Pro -Tem