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HomeMy WebLinkAboutRes1984-035 . . . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 84-35 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE LEASE OF LOT 6, BLOCK 1, MARINA SUBDIVISION TO HOWARD B. JOHNSON WHEREAS, Howard B. Johnson has for over 10 years been leasing Lot 4, Block 1, Marina Subdivision, for the purposes of operating Harbor Marine Supply; and WHEREAS, Mr. Johnson has agreed to trade his interest in Lot 4 in return for the interest held by Juris Mindenbergs in Lot 6, Block 1, Marina Subdivision; and WHEREAS, Mr. Johnson will continue to operate Harbor Marine Supply from the structure that is now located on Lot 6, Block 1, Marina Subdivision; and WHEREAS, such a trade Johnson, but also is in keeping goals for the marina area; benefits not only Mindenbergs and with the City's overall development NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. It is in the public interest to negotiate a lease with Howard B. Johnson for Lot 6, Block 1, Marina Subdivision. Section 2. The City Manager is directed to proceed with executing the lease agreement attached as Exhibit "A" and incorporated herein by reference. Section 3. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 23rd day of April , 19 84 TTY OF SEWARD, ALASKA ~..dI ~ DONALD W. CRIPPS, MAYOR -1- . - CITY OF SEWARD, ALASKA RESOLUTION NO. 84-35 . Cripps, Gillespie, Hilton, Meehan, Williams, Wilson None Swartz None AYES: NOES: ABSENT: ABSTAIN: APPROVED AS TO FORM: ATTEST: HUGHES, THORSNESS, GANTZ, POWELL AND BRUNDIN, Attorneys for the City of Seward, Alaska 7~ t1/~ Fred B. Arvidson, City Attorney (City Seal) . . -2- , " . . I ' . LEASE AGREEMENT This Agreement made and entered into this day of , 1984, by and between the CITY OF SEHARD, a home rule municipal corporation located in the Kenai Peninsula Bor- ough, State of Alaska, hereinafter referred to as "City" and Howard B. Johnson, hereinafter referred to as "Lessee". . WIT N E SSE T H: WHEREAS, City and Lessee are mutually interested in the development of marine related facilities in the Marina Subdivision of the City of Seward, Alaska; and WHEREAS, Lessee has demonstrated to City an intention to continue the development of marine related businesses to serve the people of Seward; and WHEREAS, the City has previously leased to Lessee Lot 4, Block 1, Marina Subdivision, for development; and WHEREAS, Lessee has agreed with Mr. Juris Mindenbergs to trade Lot 4 for Lot 6, Marina Subdivision, and to continue operation of Harbor Marine Supply in the structure located on Lot 6; and WHEREAS, the City has determined that. Lessee's intentions and general development plans coincide with the public interest of the City and will provide increased tax revenues to the City and rental income; FOR AND IN CONSIDERATION OF THE RENTS, COVENANTS, AND CON- DITIONS HEREIN CONTAINED, CITY AND LESSEE AGREE AS FOLLOWS: ARTICLE I. DEMISE. City leases to Lessee, and Lessee leases from the City that certain real property herein called "Leased Land", situated in Seward, Alaska, consisting of approximately 8,357 square . -1- feet, as shown on Exhibit "A" attached hereto and as more particularly described as follows: Lot 6, Block 1, Marina Subdivision, within the City of Seward, Alaska (More precise- ly shown on Exhibit "A" attached hereto) ARTICLE II. CITY"S IVARRANTY OF QUIET ENJOYMENT. Lessee, upon paying the rent and other charges herein provided for and observing and kee?ing the covenants, conditions and terms of this Lease on Lessee's part to be ke?t or performed, shall ?eacefully and quietlv enjoy pos- session of the Leased Land during the term of this Lease without hin- drance by, from or through City, subject, however, to anv encumbrances created or caused by Lessee. ARTICLE III. LEASED LAND ACCEPTED "AS IS". Lessee acknotvl- edges that he has inspected the Leased Land and accepts the same "as is" and without reliance on any representations or warranties of City, or agents of City, as to the physical condition thereof, except as express- ly herein provided. Lessee at his sole cost and expense shall have the right to raze, tear down Dr remove any buildings, structures or improve- ments presently situated on the Leased Land. All funds and proceeds, if any, obtained by Lessee from the disposition of such buildings, struc- tures or improvements may be retained by Lessee. Lessee is aware of the easements as shown on the attached Exhibit "A" and agrees to lease the property subject thereto. ARTICLE IV. USE OF LEASED LAND. 1. Lessee may use the Leased Land for the operation of a marine related business. Lessee understands that operation of such a facility is a maj or consideration for City I S agreement to lease the Leased Land. Lessee agrees that he will not operate any other business -2- . . , . on the Leased Land without the consent of the City. Moreover, City may withhold its consent as to any proposed business or activity which, in City's sole discretion, is not desirable or compatible with the City's Small Boat Harbor area. 2. No assignment or sublease shall be permitted unless approved in writing by the City. Any sublease shall be expressly subject and subordinate to this lease and the rights of the City here- under. The City may elect to not approve any proposed assignment or sublease which, in the City's sole discretion, is not desirable or compatible with the City's Small Boat Harbor area. ARTICLE V. LEASE TERM. . 1. Commencement and Expiration. The term of this Lease shall be thirty (30) years, commencing on June 15, 1971, and ending June 14, 2001, which is the same lease term Lessee enjoyed with the City on Lot 4, Block 1, Marina Subdivision. 2. Options and Extensions. There are no renewal options extending to Lessee under this lease, but by inaction of the parties, the lease shall be deemed to continue from month to month. This lease will not terminate until notice in writing is given by either partv to the other, not later than six months prior to the expiration of the lease term. 3. Surrender of Possession. (a) Subject to the provisions of Article XI below with respect to restoration of buildings and improvements, upon expi- ration of the Lease Term, whether by lapse of time or otherwise, Lessee shall promptly and peacefully surrender the Leased Land. -3- . (b) Upon the expiration of the Lease Term or any sooner termination of this Lease, Lessee agrees to execute, acknowledge and deliver to City a proper instrument in writing, releasing and quit-claiming to the City all right, title and interest of Lessee in and to the Leased Land and all improvements thereto not removed by Lessee as provided herein. ARTICLE VI. RENT. The rental for the Leased Land shall he determined and paid as follows: 1. Any and all annual rental due under this Lease shall be paid in advance upon commencement of this Lease in yearly installments on or before commencement of this Lease and on or before January 1 of each succeeding year. 2. The rental shall be determined as follows: Initially beginning January 1, 1987 and thereafter not less than ninety (90) days prior to the expiration of every fifth lease year the City, at its own expense, shall employ an indepen- dent MAl certified appraiser to determine the fair market rental value of the Leased Land exclusive of Lessee's improvements at the highest and best use of the Leased Land and without consideration of Lessee's intended use of the land unless that use is coinci- dentally the highest and best use of the Land. Within forty-five (45) days after receipt of any such appraisal, City shall provide Lessee a copy of the appraiser's written appraisal report. If Lessee does not object in writing to that appraisal within ten (10) days, the stated rental rate deter- mined by such appraisal shall apply for the next succeeding five lease years. The rental rate shall thus be adjusted every fifth -4- . . . lease year, commencing with the lease year beginning January, 1987, and every fifth year thereafter. If Lessee gives City written notice of objection to the appraised rental rate within ten (10) days of receipt of the appraisal conclusion, Lessee shall then engage a second independent MAl certified appraiser at his sole expense to make.an appraisal of the fair market rental value of the Leased Land at its hi~hest and best use exclusive of Lessee's improvements. Lessee shall furnish City a copy of the second appraisal report within ten (10) days of its receipt by Lessee. If the second appraisal reflects a fair market rental value which varies from the first appraisal by no more than twentv percent (20%), then the new rental rate shall be the average of the first and second appraisal conclusions. If the second appraisal reflects a fair market value which varies from the first appraisal by more thqn twenty percent (20%), then, unless City and Lessee agree on a rate among themselves, the new rental rate shall be determined in accordance with the arbitration provisions contained in Article XV. Lessee's objection to the rental rate and engagement of a second appraiser shall not postpone Lessee's obligation to pay the annual rental as described in City's notice of rental rate based on the first appraisal. Lessee shall pay City the amount of rental rate as fixed by the first appraisal until the question of rental adjustment is finally resolved, at which time an appropriate adjustment will be made if needed. . . -5- 3. Additional Rent and City's Right to Cure Lessee's De- faults. All costs and expenses which Lessee assumes or agrees to pav pursuant to this Lease or to any mortgage or other encumbrance upon the Leased Land or Lessee's leasehold interest shall at City's election be treated as additional rent and, in the event of nonpayment, City shall have all rights and remedies herein provided for in the case of nonpay- ment of rent or of a breach of condition. If Lessee shall default in making any payment required to be made by Lessee, or shall default in performing any term, covenant or condition of this Lease or of any such mortgage or other encumbrance on the part of Lessee to be performed which shall involve the expenditure of money by Lessee, City at City's option may, but shall not be obligated to, make such payment or, on behalf of Lessee, expend such sum as may be necessary to perform and fulfill such term, covenant or. condition, and any and all sums so expended by the City with interest thereon at the maximum rate under the laws of the State of Alaska from the date of such expenditure until repaid, shall be (and shall be deemed to be) additional rent and shall be repaid by Lessee to the City, on demand, but no such payment or expenditure by the City shall be deemed a waiver of Lessee's default nor shall it affect any other remedy of the City by reason of such default. 4. City agrees to lease Lot 6, Block 1, Marina Subdivision at the existing appraised value of $.24 per square foot or $2,000.00 per year from time of signing this Lease until December 31, 1986. 5. Late Payment penalty. Rental payment due but not re- ceived by the due date shall accrue interest at the rate of 12% per annum until paid or the maximum permitted rate under Alaska law, which- ever is higher. -6- . . :. ARTICLE VII. TAXES AND ASSESSMENTS. 1. Lessee to Pay Taxes. Lessee agrees to pay prior to delinquency and directly to the taxing authorities in which the Leased Land is located all real property taxes (plus all personal property taxes on personalty situate on the Leased Land and placed thereon by Lessee or under Lessee's authority), sales taxes, or other business or use taxes levied or assessed upon or against the Leased Land or any improvements thereon or Lessee's business during the Lease Term. Lessee agrees to indemnify and hold City harmless from liability for any other tax, charge, ar assessment of any kind or nature. Lessee shall, within sixty (60) days after any such tax assessment or other charge consti- tuting a lien on the Leased Land shall become due and payable, produce and exhibit to City satisfa~tory evidence of payment. . 2. Lessee to Pay Assessments. Lessee, during the lease term, agrees to pay directly to the public authorities charged with collection thereof any and all assessments levied on the Leased Land for a part of or all of the cost of any public work or improvement assessed according to benefit found by the levying authority to accrue therefrom to the Leased Land, including any charges for anti-pollution, environ- mental, ecological or any other public purposes. If an option is given to pay such assessment(s) in installments, Lessee may elect to pay the same in installments, and in such case Lessee shall be liable only for such installments as shall accrue during the Lease Term. 3. Proration of Taxes and Assessments. If Lessee's obli- gat ion to pay taxes or assessments commences or ends during a tax year, . such obligation shall be appropriately prorated with City bearing the \ remaining cost (or its pro rata share) thereof. -7- 4. Contest. Lessee shall have the right to contest or review any tax, assessment, levy, fee, water or sewer charges or rents, or any other governmental charges which Lessee is obligated to pay. Such proceedings shall, if instituted, be conducted promptly at Lessee's own expense and free from all expense to City. Before instituting any such proceedings, Lessee shall pay under protest such tax, assessment, levy, fee, water or sewer rents or charges or any other governmental charges, or shall furnish to City a surety company bond in a company acceptable to City, or other security reasonably satisfactory to City, sufficient to cover the amount of the contested item or items with interest for the period which such proceedings may be reasonably ex- pected to take and costs securing the payment of such contested item nr items and all interest and costs in connection therewith when finally determined. Notwithstanding the furnishing of any such bond or securi- ty, Lessee shall pay all such items at least twenty (20) days before the time when the Leased Land or any part thereof might be forfeited. The legal proceedings herein referred to shall include appropriate cer- tiorari proceedings and appeals from any orders and judgements therein, but all such proceedings shall be begun as soon as reasonably possible after the imposition or assessment of any contested items and shall be prosecuted to final adjudicatio~ with reasonable dispatch. In the event of any reduction. cancellation or discharge, Lessee shall pay the amount that shall be finally levied or. assessed against the Leased land or adjudicated to be due and payable and, if there shall be any refund payable by the governmental authority with respect thereto, Lessee shall be entitled to receive and retain the same subject, however, to appor- tionment as provided in Paragraph 3 above during the first and last -8- . . . years of tne lease te~. City at City's option may, but shall not be obligated to, contest or review by legal proceedings or in such other manner as may be legal and at City's own expense any tax, assessment, levy, fee, water or sewer rents or charges, or any other governmental charge aforementioned, which shall not be contested or reviewed as aforesaid, and unless Lessee shall promptly join in such contest or review and pay all costs therein, the City shall be entitled to receive and retain any refund payable by the governmental authority with respect thereof. 5. Lessee to Pay Utility Charges. Lessee shall payor cause to be paid all charges for water, heat, gas, electricity, sewers, and any and all other utilities used upon the Leased Land throughout the lease term, including any connection fees. . . ARTICLE VIII. CONSTRUCTION BY LESSEE. 1. Lessee's Right to Build--General Conditions. Lessee shall have the right at any time artd from time to time during the lease term to erect, maintain, alter, remodel, reconstruct, rebuild and replace building(s) and other improvement(s) on the Leased Land, subject to the following conditions: (a) The cost of any construction, reconstruction, demolition, or of any change, alteration or improvements, shall be borne and paid for by Lessee. (b) The Leased Land shall.at all times be kept free of mechanic's, materialmen's, and any other liens, as hereinafter more specifically provided. (c) Any building contractors employed by Lessee or its sub lessees shall be appropriately bonded for one hundred percent -9- 000%) of the contract amount(s) by use of performance and labor and material payment bonds in the customary form when cost of the work is over $10,000.00. Copies of all such bonds shall be fur- nished to the City prior to commencement of construction. (d) Lessee, upon commencement of permissible buildin~ or construction activities on the Leased Land, shall continue such activities through to completion with diligence and continuitv. 2. Lessee's Ownership of Trade Fixtures, Machinery and Equipment. It is expressly understood and agreed that any and all trade fixtures, machinery and equipment of whatsoever nature at any time constructed, placed or maintained upon any part of the Leased Land by Lessee shall be and remain the property of Lessee or its tenants as their interests may appear and may be removed or replaced at any time during the lease term, provided Lessee or its tenants repair any and all damage to the Leased Land resulting from such removal or replacement. 3. Lessee's Right to Remove Improvements and Ownership Thereof. Lessee shall have the right to remove any buildings or im- provements constructed or placed upon the Leased Land by Lessee. prior to the expiration of the Lease. Any buildings or improvements not removed prior to expiration of the Lease shall become the property of City without the payment of any compensation to Lessee. ARTICLE IX. LIENS. 1. Prohibition of Liens on Fee or Leasehold Interest. Lessee shall not suffer or permit any liens to be filed against the fee of the Leased Land nor against Lessee's leasehold interest in the Leased Land nor against any buildings or improvements on the Leased Land by reason of any work, labor, services or materials supplied or claime<i to have -10- . . . been supplied to Lessee or anyone holding the Leased Land or any part thereof through or under Lessee. 2. Removal of Liens by Lessee. If any lieri shall be re- corded against the Leased Land, or any improvements thereof, Lessee shall cause the same to be removed, or, in the alternative, if Lessee in good faith desires to contest the same, Lessee shall be privileged to do so, but in such case Lessee hereby agrees to provide a surety bond from a surety licensed to do business in Alaska in a penal sum equal to one and one-half times the amount of the claim of lien, which bond shall guarantee the payment of the sum which the lien claimant has claimed, together with the lien claimant's reasonable cost of suit in the action. Lessee further agrees to indemnify, defend, and save the City harmless from all liability for damages occasioned thereby and shall, in the . event of a judgement of foreclosure upon said lien, cause the same to be discharged and removed prior to the execution of such judgement. 3. Notice of Non-Responsibility. The City may, as contem- plated by Alaska Statutes 34.35.065 (as now enacted or hereinafter amended) give notice of non-responsibility for any improvements con- structed or made by Lessee on the Leased Land. ARTICLE X. INDEMNITY. Except for claims arising out of acts caused by the negligence of the City or its representatives, Lessee agrees to protect, indemnify, defend and save harmless the City from and against any and all liability arising from acts or omissions of any nature whatsoever of Lessee's officers, servants, employees, contrac- tors, tenants, agents or invitees causing injury to or death of persons . , or loss of or damage to property during the Lease Term, and from any expense incident to defense of and by the City therefrom. If any action -11- or proceeding is brought against the City by reason of any such occur- rences, the City shall notify Lessee in writing of such action or proceeding, whereupon Lessee at Lessee's expense may elect to resist or defend such action or proceeding by counsel approved in writing by the City, such approval not to be withheld unreasonably. ARTICLE IX. INSURANCE AND RESTORATION. 1. Liability Insurance. Lessee, during the Lease Term, shall carry at its expense public liability insurance covering the Leased Land in an amount of not less than $200,000.00 for injury or death to anyone person and $500,080.00 for injury and/or death to any number of persons in anyone accident, and $100,000.00 for property damage or destruction. The minimum requirements in this section may be increased from time to time by the City in accordance with customs and usage for comparable property in the Seward metropolitan area. 2. Fire and Extended Coverage Insurance. Lessee, during the Lease Term, shall keep all buildings and improvements insured at its expense against loss or damage by fire and such other risks as may be included in the customary form of broad form extended coverage (which may exclude earthquakes), in an amount, over and above any deductibles in the governing policies, of not less than the unpaid balance(s) due under any existing deed(s) of trust or mortgage(s) encumbering the buildings or improvements or the City's fees. 3. Blanket Insurance. Lessee may provide any insurance required by this Lease in the form of a blanket policy, provided Lessee furnishes evidence satisfactory to the City indicating the coverage thereunder is at least equal to the coverage obtainable under a separate policy covering the Leased Land only. -12- . . . 4. Additional Named Insured; Rights of Mortgagees (Lenders); Waiver of Subrogation. All insurance policies required to be maintained by Lessee shall name Lessee and the City as the insureds, as their respective interests may appear. All policies shall contain an agree- ment by the insurers that such policies shall not be cancelled without at least thirty days' prior written notice to the City, a~d certificates or copies of all such insurance policies shall be furnished to the City promptly after the issuance thereof. 5. Restoration of Buildings and Improvements. In the event of damage to or destruction of any of the buildings or improvements situated on the Leased Land, then from the insurance proceeds pavable to Lessee, Lessee shall within ninety (90) days after payment of the insurance proceeds commence restoration of the buildings and improve- ments to their condition pr-ior to such damage, provided, however, Lessee's obligation to restore will be limited to the insurance proceeds available to Less~e. All such insurance proceeds shall be deposited and held in trust with such bank having offices in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's mortgagee of the damaged property, and shall be made available to Lessee for its use in restoration or repair, as the case may be, of any damage or destruction to the buildings and improvements on the Leased Land. The proceeds of insurance shall be paid out by such trustee or mortgagee from time to time on certification of the person having supervision of the work that the amount certified is being applied to the payment of the reasonable cost of such work. . . ARTICLE XII. CARE OF LEASED LAND, ACCESS OF THE CITY. -13- 1. Care of Leased Land. Lessee at its own cost and expense shall keep the entire Leased Land and all buildings and improvements which at any time may be situated thereon in good, clean and tidy condition and repair during the Lease Term. 2. Other Access Rights of the City. The City and its agents or representatives shall have the right to enter into and upon the . Leased Land during reasonable hours for the purpose of inspecting the Leased Land and all buildings and improvements thereon. 3. Avoidance of Prescriptive Rights. Lessee shall take such action as may be necessary to preserve the City's title and ownership of the Leased Land free and clear of any public or private rights of way, easements or other interests acquired by prescriptive use or otherwise than as permitted under this Lease, including but not limited to the posting of thoroughfares, walkways and parking areas so as to preserve the right of private ownership therein and prevent any adverse rights thereto accruing through prescriptive use or otherwise than as permitted hereunder. ARTICLE XIII. COMPLIANCE WITH LAWS. 1. Compliance with Laws. Lessee shall comply with all applicable laws, ordinances and regulations of duly constituted pub lic authorities now or hereafter in any manner affecting the Leased Land or any buildings, structures or improvements situated thereon, whether or not any such laws, ordinances or regulations which may be hereafter enacted involve a change of policy on the part of the governmental body enacting the same. Lessee further agrees it will not permit any unlaw- ful occupation, business or trade to be conducted on said premises or -14- . . . . . any use to be made thereof contrary to any law, ordinance or regulation as aforesaid with respect thereto. 2. Contest. Lessee may by appropriate proceedings conducted at Lessee's own expense, contest in good faith the validity or enforce- ment of any law, ordinance or regulation, provided Lessee diligently pursues such contest to a final determination by a court, department or governmental authority or body having jurisdiction thereof; provided that if the City may become liable in any manner for damages, penalties, fines or costs by reason of Lessee's failure to comply with any such law, ordinance or regulation during Lessee's contest thereof, then, as a condition precedent to the commencement and continuation of such pro- ceedings, Lessee shall furnish the City such bond with corporate surety as the City shall reasonably request to save harmless and indemnify the City against liability for any such damages, penalties, fines or costs. At the option of the City, it may at its expense contest the validity or enforcement of any such law, ordinance or regulation. I I ARTICLE XIV. EMINENT DOMAIN. I ,I 1. In the event the Interest of Parties in Condemnation. Leased Land or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority enti- tIed to exercise the power of eminent domain, the interests of the City and Lessee in the award of consideration for such transfer and the effect of the taking or transfer upon this Lease shall be as provided by law. In the event the extent of the taking makes impracticable the continued operation of the marine services and retail merchandise -15- facility, upon written notification by Lessee this Lease and all of the right, title and interest thereunder of Lessee shall cease on the date title to such Land so taken or transferred vests in the condemning authority. 2. Partial Taking--Continuation of Lease. In the event the taking or transfer of a. part of the Leased Land leaves the remainder of the Leased Land in such location and in such form, shape or size, or so accessible as to be effectively and practicably usable in the opinion of the Lessee and the City for the purpose of operation thereon of Lessee's business, this Lease shall terminate and end as to the portion of the Leased Land so taken or transferred as of the date title to such portion vests in the condemning authority and the condemning authority enters into possession but shall continue in full force and effect as to the portion of the Leased Land not so taken or transferred. ARTICLE XV. ARBITRATION. Any controversy or claim arising out of or relating to this Lease, or the breach thereof, shall be settled by arbitration in accordance with the Uniform Arbitration Act of Alaska, and judgement upon the award may be entered in any court having jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three arbitrators in the City of Seward, Alaska, or with the consent of both parties in Anchorage, Alaska. ARTICLE XVI. DEFAULT AND REMEDIES. 1. Default and Termination. (a) If the rent or any other charge shall be in arrears for a period of thirty (30) days, or -16- /. . . . . I (b) If Lessee fails to take reasonable steps to keep and perform any of the covenants or conditions of this Lease within thirty (30) days after written notice of default, or (c) If Lessee files a voluntary petition in bankruptcy or for reorganization under the bankruptcy laws or is adjudged a bankrupt by a court of competent jurisdiction, or (d) If Lessee makes an assignment for the benefit of its creditors, or (e) If a receiver is appointed by a court of competent jurisdiction for Lessee's business and it be established in the receivership proceedings that Lessee is insolvent, or (f) If the leasehold interest hereunder is abandoned bv Lessee, then City may at City's option at once without further notice to Lessee or any other person, terminate this Lease. Upon termination of this Lease as aforesaid, or at the expiration of this Lease and upon the termina- tion of said Lease by its terms, Lessee shall at once surrender pos- session of the Leased Land to the City and remove all Lessee's effects therefrom and may remove all Lessee's buildings and other improvements, and Lessee shall have no further rights hereunder or with respect to the Leased Land. If such possession be not immediately surrendered, the City may forthwith enter into and upon and repossess the Leased Land and expel Lessee or those claiming under Lessee without being deemed guilty in any manner of trespass and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant, and in such event Lessee expressly waives the service of notice of any intention so to terminate this Lease or to retake the -17- Leased Land and waives service of any demand for payment of rent or for possession and for any and every other notice or demand prescribed by any law and hereby waives any claim for damages by reason of such repossession. 2. Reletting. At any time or from time to time after any such expiration or termination, the City may relet the Leased Land, or any part thereof, and any unleased buildings and improvements, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the term of this Lease) and on such conditions (which may include concessions or free rents) as the City, in its discretion, may determine and may collect and receive the rents therefor. The City shall in no way be responsible or liable for any failure to relet the Leased Land, or any part thereof, or for any failure to collect any rent due upon any such reletting. 3. Damages. No such expiration or termination of this Lease shall relieve Lessee of its liability and obligations under this Lease, and such liability and obligations shall survive any such expiration or termination. In the event of any expiration or termination, whether or not the Leased Land, or any part thereof, shall have been relet, Lessee shall pay to the City the net rent and all other charges required to be paid by Lessee up to the time of such expiration or termination of this Lease, and thereafter Lessee, until the end of what would have been the term of this Lease in the absence of such expiration or termination, shall be liable to the City for, and shall pay to the City, as and for liquidated and agreed current damages for Lessee's default, -18- . . . (a) the equivalent of the amount of the rent and charges which would be payab le under this Lease by Lessee if this Lease were still in effect, less (b) The net proceeds received by the City from leasing or reletting the Leased Land and improvements thereon after de- ducting all of City's expenses in connection with such leasing and reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, reasonable attorneys' fees, alteration costs, and expenses of preparation for such reletting. Lessee shall pay such current damages (herein called "deficiency") to the City monthly, and the City shall be entitled to recover from Lessee each monthly deficiency as the same shall arise. At any time after any . such expiration or termination, whether or not the City shall have . collected any monthly deficiencies as aforesaid, the City shall be entitled to recover from Lessee, and Lessee shall pay to the City, on demand, as and for liquidated and agreed final damages for Lessee' s default, an amount equal to the difference between all rent reserved I hereunder for the unexpired portion of the Lease Term and the then fair 'I ! and reasonable net rental value to the City of the Leased Land for the same period. In the computation of such damages, the difference between an installment of rent becoming due hereunder after the date of termina- tion and the fair and reasonable rental value to the City of the Leased Land for the period for which such installment was payable shall be discounted to the date of termination at the rate of six percent (6%) per annum. If the Leased Land, or any part thereof, be leased or relet . ". by the City for the unexpired portion of the Lease Term, or any part thereof, before presentation of proof of such liquidated damages to any -19- court, commission or tribunal, the amount of rent reserved upon such leasing or reletting shall be prima facie evidence of the fair and reasonable rental value for the part or the whole of the premises so leased or relet during the term of the leasing or reletting. Nothing herein contained shall limit or prejudice the right of the City to prove and obtain as liquidated damages by reason of such termination an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which such damages are to be proved, whether or not such amount be greater, equal to, or less than, the amount of the difference referred to above. 4. Accumulation of Remedies. Each right and remedy of the City provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or .other- wise, and the exercise or beginning of the exercise by the City of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or othenlise shall not preclude the simultaneous or later exercise by the City of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. 5. Appointment of Receiver. Upon the commencement of any suit or action by ~he City against Lessee pursuant to any remedy avail- able to the City upon Lessee's default hereunder or at any time thereaf- ter and during the pendency of such suit or action, any court of compe- tent jurisdiction upon the application of the City may at once and without notice to Lessee, its successors or assigns, or any person or persons or tenant or tenants or mortgagee or person claiming any -20- . ---_._-_..~_._- .._-~- ._.._"'.~---- . . . security interest through Lessee. appoint a receiver to collect the rents and profits arising out of the Leased Land, the buildings and improvements thereon and the subleases pertaining thereto and apply such rents and profits to the payment and satisfaction of Lessee' s obliga- tions under this Lease. including without limitation the payment of the rent due the City hereunder, first deducting all proper charges and expenses attending the execution of such trusts, and to have any balance remaining held by such receiver for disposition in accordance with any judgement or decree entered therein or as may be from time to time directed by said court. ARTICLE XVII. GENERAL PROVISIONS. 1. Estoppel Certificates. Either party shall at any time and from time to time, upon not less than thirty days' prior written request by the other party, execute, acknowledge, and deliver to such party. or to its designee, a statement in writing certifying that this Lease is unamended and in full force and effect (or, if there has been any amendment thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extet'lt thereof); and stating the dates to which the rent and other charges have been paid in advance. It is expressly understood and agreed that any such statement delivered pursuant to this section may be relied upon by any prospective assignee or tenant of the Leasehold Estate, or estates, or Lessee or any prospective purchaser of the estate of the City, or any lender or prospective assignee of any lender on the security of the Leased Land or the fee estate, or any part thereof, and any third person. '. . -21- 2. Conditions and Covenants. All the provisions of this Lease shall be deemed as running with the Land, and shall be construed to be "conditions" as well as "covenants", as though the words specif- ically expressing or imparting covenants and conditions were used in each separate provision. 3. No Waiver of Breach. No failure by either the City or Lessee to insist upon the strict performance by the other of any cove- nant, agreement, term or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement and term of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach. 4. Time of Essence. Time is of the essence of this Lease and of each provision. 5. Computation of Time. The time in which any act provided by this Lease is to be done is computed by excluding the first day and including the last, unless the last day is a Saturday, Sunday or a holiday, and then it is also excluded. The term "holiday" shall mean all holidays as defined by the statutes of,Alaska. 6. Successors in Interest. Each and all of the covenants, conditions and restrictions in this Lease shall inure to the benefit of and shall be binding upon the successors in interest of City and the authorized assignees, transferees; tenants, licensees and other succes- sors-in-interest of Lessee. -22- . . . , . . 7. Entire Agreement. This Lease contains the entire agree- ment of the parties with respect to the matters covered by this Lease, and no other agreement, statement or promise made by any party, or to any employee, officer of agent of any party, which is not contained in this Lease shall be binding or valid. 8. This Lease shall be. governed by, con- Governing Law. strued and enforced in accordance with the laws of the State of Alaska. 9. Partial Invalidity. If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, im- paired or invalidated. 10. Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent or of partnership or of j oint venture or of any association between the City and Lessee; and neither the method of computation of rent nor any other provisions contained in this Lease nor any acts of the parties, shall be deemed to create any relationship between the City and Lessee other than the relationship of lessor and lessee. 11. Interpretation. The language in a~l parts of this Lease shall in all cases be simply construed according to its fair meaning and not strictly for or against the City or Lessee.' Unless otherwise provided in this Lease, or unless the context otherwise requires, the following rules of construction shall apply to this Lease: (a) Number and Gender. In this Lease, the neuter gender includes the masculine and the feminine, and the singular number -23- includes the plural; the word "person" includes corporation, partner"'hi.p, firm or Association wherever the context so requires. (b) Mandatory and Permissive. "Shall", "will" and "agrees" are mandatory; "may" is permissive. (c) Captions. Captions of the Articles, Sections and subsections of this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Lease. 12. Amendment. This Lease is not subject to amendment except in writing executed by all parties hereto. 13(a). Delivery of Notices and Rent--Method and Time. All notices, demands or requests from one party to another shall be de- livered in person or be sent by mail, certified or registered, postage prepaid, to the addresses stated in this Section, and shall be deemed to have been given at the time of delivery or making. 13 (b) . Payment of Rent. All rents and other sums payable by Lessee to the City shall be by check, payable to the City, delivered in person or mailed to the City at the following address: City Clerk City of Seward PO Box 167 Seward, AK 99664 and shall be deemed to have been paid when received at such address. 13(c) . Notices to the City. All notices, demands and requests from Lessee to the City shall be given to the C~ty at: City Clerk City of Seward PO Box 167 Seward, AK 99664 -24- . . . , . . and to such other persons at such additional addresses as the City may specify, but not exceeding four in the aggregate. l3(d) . Notices to Lessee. All notices, demands or requests from the City to Lessee shall be given to Lessee at: Howard B. Johnson 3745 Mountain View Drive Anchorage, Alaska 99508 13(e) . Change of Address. Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this Section. 14. Broker's Commission. Each of the parties represents and warrants that there are no claims for brokers' commissions or finders' fees in connection with the execution of this Lease. 15. Attorneys' Fees. If either party hereto institutes any suit, action or arbitration proceeding to collect the rent reserved or to enforce any covenant or agreement hereof or to obtain any of the remedies herein provided, the prevailing party shall be entitled to such sum of money as the court or the arbitration board may adjudge reason- able as costs and attorneys' fees in such suit, action or arbitration proceeding, including any appeal taken by either party in such suit, action or arbitration proceeding. 16. Records. Lessee shall at all times keep or cause to be kept proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to the Leased Land. 17. Minerals. Nothing in this Lease shall authorize Lessee .! to exercise any rights in regard to oil, oil rights, minerals, mineral rights, natural gas, natural gas rights, and/or other hydrocarbons by -25- whatsoever name that may be within or under the Leased Land. The City reserves the right to whipstock or directionally drill and mine from land other than the Leased Land oil or gas wells, tunnels and shafts into, through or across the subsurface of the Leased Land, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines, without, however, the right to disturb the use of the surface or to drill or mine through the upper 500 feet of the subsurface of the Leased Land. 18. Good Faith. The terms of this Lease impose an obligation of good faith on the City and Lessee in the performance and enforcement thereof. 19. Election to Terminate by Lessee. If an earthquake occurs during the term hereof, making the construction, financing, maintenance or operation of an improvement(s), building(s) or other structure(s) on the Leased Land impractical or impermissible, then in such event, provided the Lessee be in good standing hereunder, the Lessee may, in its uncontrolled discretion, elect to terminate this Lease upon: (a) Giving written notice to the City; and (b) Making payment to the City of a sum equal to fifty percent (50%) of the rents payable to the City for the twelve calendar months immediately preceding the notice under (a); and (c) Satisfying or otherwise releasing the City's fee from any encumbrance(s) created as the result of Lessee's actions. All further rights, duties and obligations hereunder shall cease upon receipt by the City of such notice of election to terminate and the fulfilling of conditions (b) and (c). -26- . . 20. Modification of Earlier Lease. This agreement cancels . and supercedes the agreement dated June 25, 1971, for Lot 4, Block 1, Marina Subdivision. ARTICLE XVIII. RECORDING, EXECUTION, COUNTERPARTS. 1. Recording. The parties may, concurrently with the execution of this Lease, execute, acknowledge and record a memorandum of lease. Following recording, the memorandum lease shall be attached to this Lease. 2. Counterparts. This Lease has been executed by the parties in two counterparts, each of which shall be deemed to be an original. 3. Execution. This Lease has been executed by the parties on the day and year first above written. . LESSOR: LESSEE: THE CITY OF SEWARD, ALASKA By: Ronald A. Garzini, City Manager Howard B. Johnson ATTEST: APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN, Attorneys for the City of Seward, Alaska Linda S. Murphy, City Clerk l~rV~ Fred B. Arvidson, City Attorney (City Seal) . \ -27- STATE OF ALASKA ) ) ss. ) THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on this day of 19 ,before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared , City Manager of the City of Seward, known to me and to me known to be the person who executed the foregoing instrument on behalf of the City of Seward, and who acknowledged that he signed the same freely and voluntarily for the uses and purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and year first hereinabove written. NOTARY PUBLIC in and for Alaska My Commission Expires: STATE OF ALASKA ) ) ss. ) THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on this day of 19 ,before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared , known to me and to me known to be the person who executed the foregoing instrument, and who acknowledged that he signed the same freely and voluntarily for the uses and purposes therein contained. I I I I i I i I I I I IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and year first hereinabove written. NOTARY PUBLIC in and for Alaska My Commission Expires: -28- . I I .' I L . .J NORT H :: AcrE S S ROAD Ir NI~"'~! ~. ~ .' ~.96 = 20.2 e ., I.. ~--,.. ~ . ;z '" ... 0 ~ I /~ It / 33' V1 :~ - , ::- >- <( - ~ Q . 'S ~ co .. :::l ,.; V1 ~ I . ;z c:J 0 , = ~ n:: cc 0 ... ;z V1 - I- ". - ;z X ""f 0:: z %2,205 J,l ...... " cc 0 .~..-. 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