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HomeMy WebLinkAbout04102023 City Council Laydown - ZPA LLC Letter Docusign Envelope ID: 1AE06170-5E84-4BB5-9B6C-C4EE0414A46B uj&) April 6 2023 Via email: clerk@cityofseword.net Seward City Council Through Brenda Ballou, City Clerk P.O. Box 167 410 Adams Street Seward, AK 99664 Re: New Lease for Breeze Inn Dear City Council Members: We write together as the current owner of the Breeze Inn and its prospective purchaser, ZPA, LLC. We are not here to rehash the Council's rejection of Resolution 2023-001 to approve assignment of the Breeze Inn's existing lease with the City to ZPA. Juris and ZPA are now proposing a different path from assignment, a new lease with ZPA. Under this scenario, Juris' current lease would be terminated upon approval and execution of a new lease with ZPA and completion of the sale transaction for the Breeze Inn itself. In the new lease, ZPA voluntarily undertakes to address the City's stated concerns. ZPA is committed to operating the Breeze Inn in the best interest of the community, and in a commercially reasonable, fiscally responsible manner. ZPA is also prepared to invest the necessary capital and resources to make it a continuing success. We believe the proposed covenants in the new lease address the concerns voiced at the January 9 City Council meeting. Specifically, the new lease requires that ZPA: • Operate the Breeze Inn on a year-round basis for at least three years after purchase. After that, the lease also covenants that ZPA will operate the Breeze Inn on a year-round basis unless it becomes commercially unreasonable do so as determined by ZPA and its lender. • Cannot assign,transfer, or sell any interest in ZPA orthe new lease to a company primarily engaged in passenger cruise and vacation travel. • Cannot assign,transfer, or sell any interest in ZPA or the new lease to a national or multi- national hotel chain or franchise. • Cannot at any time cause the Breeze Inn to become a franchised hotel. • Must comply with all applicable laws at all times, including compliance with municipal, state, and federal health and safety regulations. We are not aware of any other lessee making similar commitments; however, we feel it is important to correct some of the misconceptions and incorrect assumptions some members of the public previously raised and do our best to address those regardless of merit. DocuSign Envelope ID:1AE06170-5E84-4B85-9B6C-C4EE0414A46B Seward City Council April 5, 2023 Page 2 of 2 The hallmark of an effective public servant is to set personal bias and prejudice aside and evaluate proposed actions based on their merits. Regrettably,that did not happen when the City Council reviewed assignment of the current lease in January. We hope that the City Council now takes the opportunity to consider the important business interests of both Juris Mindenbergs and ZPA in addition to the larger Seward business community. Juris Mindenbergs has invested millions of dollars and decades of work and dedication to establish the Breeze Inn. What seems to have been made apparent over the last several months is that the public and the City Council care deeply about the Breeze Inn's past and future. The Mindenbergs have been trying to sell the Breeze Inn for 14 months. Their expectation and very reasonable and realistic goal was to complete the sale prior to the 2023 summer season. But due to the City's actions, that may not be possible. Between the Mindenbergs and ZPA, they have spent tens of thousands of dollars in professional and due diligence fees to realize that goal. Now it's April, on the eve of the 2023 operating season.The Mindenbergs' investment in the Breeze Inn cannot rightfully or lawfully be held hostage by the City Council's refusal to transfer the underlying ground lease in the Breeze Inn. Every contract in Alaska is protected by the covenant of good faith and fair dealing. Adjudication of significant property rights based on conjecture and hearsay violates that binding covenant. it is improper for a landlord to reject a transfer of a lease interest on arbitrary considerations of personal preference or general sentiment. Juris and ZPA simply ask for a fair opportunity to have the City Council consider accurate and relevant business information bearing on the new lease. The City Council's stated concerns have been addressed in the new lease to the maximum commercially reasonable extent. Every potential tenant for the Breeze Inn will need flexibility to invest and operate the Breeze Inn in a profitable manner. ZPA has the experience, financial resources, and dedication to continue the Breeze Inn's legacy.Thank you for your consideration. Sincerely, JURIS MINDENBERGS ZPA, LLC DocuSigned by:JOL&SWU � Signedyjby- DoeuSigned by: E�! A. S w".4• fwk 69F391AB67041F2A2DCOC849D . 54/7/2023 69�1 � owner of the Elliott Jackson, Member Toni Strauss, Member Breeze Inn