HomeMy WebLinkAboutRES2023-074 OBI Seafoods Amendment 1 CITY OF SEWARD, ALASKA Sponsored by: Regis
RESOLUTION 2023-074
A RESOLUTION OF THE CITY COUNCIL OF SEWARD, ALASKA
APPROVING LEASE AMENDMENT 1 TO THE AMENDED AND
RESTATED LEASE AGREEMENT BETWEEN OBI SEAFOODS, LLC AS
ASSIGNEE OF ICICLE SEAFOODS, INC. AND THE CITY OF SEWARD.
WHEREAS,the City of Seward leased Lots 2A and 3A,Block 2,Marine Subdivision,Block
Two Replat, Plat No.96-28 Seward Recording District,Third Judicial District State of Alaska("the
Property")to Icicle Seafoods pursuant to terms set forth in Lease No. RE-071 on August 17, 1988;
and
WHEREAS, City of Seward Resolution 2018-055 approved a 20 year Amended and
Restated Lease of the Property with Icicle Seafoods on June 25, 2018 ("the Lease"); and
WHEREAS, Icicle assigned the Lease to Ocean Beauty Seafoods, LLC on June 1, 2020
("the Assignment"); and
WHEREAS, the Assignment recognized that Icicle remained responsible to the City under
the terms of the Lease; and
WHEREAS,on or about January 14,2019,Icicle discovered a leak estimated to contain nine
(9) gallons of fuel on the Property ("Spill"); and
WHEREAS, Icicle timely reported the Spill to the State of Alaska, Department of
Environmental Conservation ("ADEC"); and
WHEREAS, ADEC, Icicle and OBI have agreed to a response to the Spill which requires
the City of Seward to allow an Environmental Covenant to be to be recorded against the Property
which contains containing institutional controls,including installation of a concrete cap,restrictions
on the use of the ground water,inspection and reporting requirements,and limitations on uses of the
Property; and
WHEREAS,OBI, Icicle and the City have negotiated terms on which the City will consent
to recording of the Environmental Covenant which require the Lease be amended; and
WHEREAS,Article 32 of the Lease requires that any amendment to the Lease be in writing
and signed by the City and the Lessee; and
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1.The Seward City Council consents to recording of the Environmental Covenant.
Section 2. The Seward City Council approves Lease Amendment 1 to the Amended and
CITY OF SEWARD, ALASKA
RESOLUTION 2023-074
Restated Lease.
Section 3. The Seward City Council finds that the essential terms and conditions of Lease
Amendment No. 1 to the Amended and Restated Lease are in the public interest.
Section 4. This resolution shall take effect 30 days from the date of posting of adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 10`"
day of July, 2023.
THE CITY OF SEWARD, ALASKA
&44.-Altcs C -
Sue McClure, Mayor
AYES: Finch, Osenga, Calhoon, Demoss, McClure
NOES: None
ABSENT: Wells, Barnwell
ABSTAIN: None
ATTEST:
Kris Peck,
City Clerk
(City Seal)
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City Council Agenda Statement
Meeting Date: July 10, 2023
To: City Council
Through: Norm Regis,Acting City Manager
From: Brooks Chandler, City Attorney
Agenda Item: Resolution 2023-074: A Resolution Of The City Council Of Seward,Alaska
Approving Lease Amendment 1 To The Amended And Restated Lease
Agreement Between OBI Seafoods, LLC As Assignee Of Icicle Seafoods, Inc.
And The City Of Seward.
Background and justification:
The City of Seward has a long-standing relationship with the seafood processing industry. Icicle
Seafoods, Inc. operated a processing facility at its current location under the terms of a lease agreement
with the City. The initial lease was approved in 2008 and then extended in 2018. The lease expires in
2038. There are 2 five-year extension options.
In 2019, Icicle and Ocean Beauty Seafoods combined to form a new entity called OBI Seafoods,
LLC. The City Council approved assigning the Icicle lease to OBI in 2020.
On January 14, 2019 a fuel leak from an above ground storage tank of approximately 9 gallons
was discovered. It was reported to ADEC by Icicle shortly thereafter. A site investigation determined
there were multiple contaminants present in the soil in concentrations that required clean up. ADEC
supervised the clean up. A total clean up might have required tearing down the buildings on site to access
and investigate the full extent of contaminated soil. ADEC agreed to an alternative approach which
applied a concrete "cap"over the contamination. The City permitted the cap to be installed and the work
has been completed.
ADEC's approval was conditioned on the property owner(City of Seward) agreeing to
notification of ADEC before excavations greater than 2 feet are begun, and inspecting and maintaining
the cap. This is documented in what is called an Environmental Covenant which will be recorded with
the lease amendment.
The Lease Amendment makes Icicle responsible for complying with the Covenant and requires OBI
to cooperate with Icicle. The Amendment also identifies what happens if the building is destroyed and
specifies that future appraisals for rent adjustments must not consider any contamination or the existence of
the Environmental Covenant. The Lease Amendment makes clear the underlying obligation to return the
property to the City in the same condition as when the lease was made remains in force.
OBI and Icicle have accepted the proposed lease amendment before the Council for approval. The
City Attorney has participated in negotiations and is recommending Council approval.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
410
Certification of Funds
Total amount of funds listed in this legislation: S
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
X Has no fiscal impact
Funds are(✓):
Budgeted Line item(s):
Not budgeted
X Not applicable
AttorneyReview✓ Administration Recommendation
X Yes X Adopt Resolution
Not applicable Other:
C010--,
City Attorney Signature:
411
AMENDED AND RESTATED
LEASE AGREEMENT
between
CITY OF SEWARD, ALASKA
and
Icicle Seafoods Inc.
Effective Date: [ ]
4817-1371-2460v.14 0022769-000022
414
TABLE OF CONTENTS
ARTICLE 1 - LEASED LAND.................................................................................................... 1
1.1 Description of Leased Land.................................................................................... 1
1.2 Covenant of Quiet Enjoyment; Warranty of Title................................................... 2
1.3 Property Accepted................................................................................................... 2
1.4 Permits.................................................................................................................... 2
1.5 Platting.................................................................................................................... 2
1.6 Development ofLeased Land.................................................................................. 2
1.7 Amendment and Restatement of Original Lease..................................................... 3
ARTICLE 2 - LEASE TERM...................................................................................................... 3
ARTICLE 3 - RENTAL RATE................................................................................................... 3
3.1 Initial Rental Rate................................................................................................... 3
3.2 Rental Adjustments.................................................................................................. 4
3.3 Procedure for Rental Adjustment............................................................................ 4
3.4 Effect of Late Appraisal by CITY............................................................................ 4
3.5 Appraisal by LESSEE............................................................................................. 5
3.6 Effective Date ofAdjusted Rental Rate................................................................... 5
3.7 Interim Rental Adjustments..................................................................................... 5
3.8 Rent Payment Credits for Production and Employment......................................... 6
3.9 Late Payment Charge ............................................................................................. 7
ARTICLE 4 - USE OF LEASED LAND .................................................................................... 7
4.1 Use ofLeased Land................................................................................................. 7
4.2 Obligations ofLESSEE........................................................................................... 7
4.3 No Preferential Rights to Use Public Facilities ..................................................... 7
4.4 Adequacy of Public Facilities................................................................................. 8
4.5 Tams and Other Service Fees ............................................................................... 8
4.6 Time for Payment of Utilities and Taxes................................................................. 8
4.7 Other Uses .............................................................................................................. 8
4.8 Use ofPublic Docks and Port Facilities................................................................. 8
ARTICLE 5 - UTILITIES AND RIGHTS OF ACCESS.......................................................... 8
5.1 Utilities.................................................................................................................... 8
5.2 Third-Party Improvements...................................................................................... 9
5.3 Easements ............................................................................................................... 9
ARTICLE 6 - CONSTRUCTION BY LESSEE....................................................................... 10
6.1 Improvements on Leased Land............................................................................. 10
6.2 City Review of Construction ................................................................................. 11
ARTICLE 7 - RETURN OF LEASED LAND/SITE CONDITIONS.................................... 11
ARTICLE 8 - FORCE MAJEURE ........................................................................................... 11
ARTICLE 9 - LESSEE'S ACTS OF DEFAULT..................................................................... 11
ARTICLE 10 - REMEDIES FOR DEFAULT BY LESSEE .................................................. 13
ARTICLE 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE........................ 14
11.1 Real Property Improvements ................................................................................ 15
11.2 Personal Property................................................................................................. 15
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415
ARTICLE 12 - ASSIGNMENT OR SUBLEASE .................................................................... 15
12.1 Assignment ofLease or Subleasing....................................................................... 15
12.2 Assignment ofLease for Security.......................................................................... 15
12.3 Assignment to Affiliate.......................................................................................... 16
12.4 Assignment or Encumbrance by City.................................................................... 16
ARTICLE 13 - LESSEE'S DUTY TO DEFEND/INDEMNIFY............................................ 17
ARTICLE 14 - CITY'S DUTY TO DEFEND/INDEMNIFY ................................................. 17
ARTICLE 15 - INSURANCE.................................................................................................... 17
15.1 Minimum Insurance Requirements ....................................................................... 17
15.2 Subrogation Rights Waived................................................................................... 18
15.3 Restoration of Buildings and Improvements......................................................... 19
ARTICLE 16 - CONDEMNATION.......................................................................................... 20
ARTICLE 17 - ARBITRATION ............................................................................................... 20
17.1 Arbitration............................................................................................................. 20
ARTICLE 18 - MAINTENANCE AND REPAIRS................................................................. 21
18.1 Normal Maintenance ............................................................................................ 21
18.2 Safety Issues.......................................................................................................... 21
18.3 Cost of Repairs...................................................................................................... 22
ARTICLE 19 - ENVIRONMENTAL CONCERNS................................................................ 22
19.1 Hazardous Materials ............................................................................................ 22
19.2 Permits and Reporting.......................................................................................... 24
ARTICLE 20 - ESTOPPEL CERTIFICATES........................................................................ 25
ARTICLE 21 - CONDITIONS AND COVENANTS .............................................................. 25
ARTICLE 22 - NO WAIVER OF BREACH ........................................................................... 25
ARTICLE 23 - TIME OF THE ESSENCE.............................................................................. 26
ARTICLE 24 - COMPUTATION OF TIME........................................................................... 26
ARTICLE 25 - SUCCESSORS IN INTEREST....................................................................... 26
ARTICLE 26 - ENTIRE AGREEMENT ................................................................................. 26
ARTICLE 27 - GOVERNING LAW........................................................................................ 26
ARTICLE 28 - PARTIAL INVALIDITY................................................................................. 26
ARTICLE 29 - RELATIONSHIP OF PARTIES .................................................................... 26
ARTICLE 30 - INTERPRETATION ....................................................................................... 26
ARTICLE 31 - CAPTIONS ....................................................................................................... 27
ARTICLE 32 - AMENDMENT................................................................................................. 27
ARTICLE33 - NOTICES.......................................................................................................... 27
ARTICLE 34 - FIRE PROTECTION FOR LEASED LAND................................................ 28
EXHIBIT A
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416
AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (the "LEASE") is made
by and between the CITY OF SEWARD (the "CITY"), a municipal corporation located in the
Kenai Peninsula Borough, State of Alaska, whose mailing address is P.O. Box 167, Seward,
Alaska 99664 and Icicle Seafoods Inc. (the "LESSEE"), an Alaska corporation whose mailing
address is P.O. Box 79003, Seattle, Washington 98119.
WHEREAS, LESSEE is currently occupying the Leased Land (as defined in Section 1.1
below) pursuant to various leases and most recently pursuant to that certain Ground Lease
(Contract No. RE-071), dated July 11, 1988, as amended by Lease Amendment No. 1 dated June
8, 1989, and by Lease Amendment No. 2 (RE-071) effective as of January 1, 1999, as evidenced
by a Memorandum of Lease and Lease Termination recorded August 23, 1988, in Book 51 at Page
954, and Memorandum of Lease Amendment recorded July 19, 1989 in Book 55 at Page 210 and
by Lease Amendment No. 2 recorded April 4, 2000 in Book 100 at Page 127, all in the Seward
Recording District, Third Judicial District, State of Alaska (collectively, the "ORIGINAL
LEASE") and desires to continue to lease the Leased Land; and
WHEREAS,the City Council of CITY has determined that a continued lease of the Leased
Land (as defined below) to LESSEE for the purposes described herein would be in the public
interest; and
WHEREAS,pursuant to this LEASE, CITY and LESSEE desire to amend and restate the
ORIGINAL LEASE in its entirety; and
WHEREAS, neither CITY nor LESSEE intends that anything in this LEASE shall be
construed as a novation of the ORIGINAL LEASE, and this LEASE shall not effect a novation of
the ORIGINAL LEASE; and
WHEREAS, it is the intent of this LEASE to transfer from CITY to LESSEE the entire
burden of compliance with environmental regulations or controls with respect to LESSEE's
operations on the Leased Land.
NOW THEREFORE, for and in consideration of the mutual promises and covenants
hereinafter contained, the parties hereto agree as follows:
ARTICLE 1 -LEASED LAND
1.1 Description of Leased Land. The Leased Land is located in the City of Seward, Alaska.
The Leased Land is described as follows:
Lots 2A and 3A, Block 2, MARINA SUBDIVISION, BLOCK TWO REPLAT, as shown
on Plat 96-28, Seward Recording District, Third Judicial District, State of Alaska,
consisting of approximately 4.93 acres or 214,804 square feet, more or less (the "Leased
Land")(Tax Parcel ID 145-240-15-LHO1).
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The Leased Land is also depicted on the attached Exhibit A, which is incorporated herein
by reference.
1.2 Covenant of Quiet Enjoyment; Warranty of Title. Subject to the encumbrances as of the
date hereof, any appurtenant easements or rights of way, and any reasonable restrictions
imposed on the Leased Land as part of recording of a plat by CITY, and the provisions of
this LEASE, CITY hereby covenants and warrants that LESSEE shall have the quiet
enjoyment and possession of the Leased Land for the full term of this LEASE.
1.3 Property Accepted "As-is." LESSEE acknowledges that it has inspected the Leased Land
and accepts the same "as-is" and without reliance on any expressed or implied
representations or warranties of CITY (other than the representations in Section 1.2
hereof), or agents of CITY, as to the actual physical condition or characteristics thereof
and the legal description or depiction of the Leased Land in Section 1.1 or Exhibit A hereto.
1.4 Permits. LESSEE, at its sole cost, shall obtain all permits necessary to the construction
and operation of its facilities on the Leased Land. CITY may from time to time, upon
request of LESSEE, execute such documents,petitions, applications, and authorizations as
may be necessary, as the underlying fee owner, to file with an agency or public body
responsible therefor an application for conditional use permits, zoning and re-zoning,
tentative and final tract approval, or precise plan approval that may be required for the
lawful construction and operation of the facilities of LESSEE permitted on the Leased Land
by the terms of this LEASE. However, nothing in this Section shall be construed as
requiring CITY to support or approve any such application or permit requests. If the
agency or public body responsible to approve or grant such application or permit request
is a City of Seward agency, department, or board, LESSEE shall follow all City of Seward
procedures, the same as any other applicant making similar requests of the City of Seward,
according to the Charter, ordinances, resolutions, or any regulation, rules, or procedures of
the City of Seward. Nothing in this Section imposes any duty or responsibility on CITY
to assist LESSEE in obtaining any other permits or approvals, including without limitation
those required by the U.S. Army Corps of Engineers (e.g., wetland fill permits), the
Environmental Protection Agency(e.g., Clean Air Act permits), the Alaska Department of
Public Facilities and Transportation(e.g., right-of-way permits),the Alaska Department of
Fish and Game, and the Alaska Department of Environmental Conservation.
1.5 Platting. If LESSEE requests a replat of the Leased Land, CITY shall assist LESSEE in
the preparation and filing of the replat, and LESSEE shall reimburse CITY for CITY's costs
in assisting with the preparation and filing of the replat. In the event CITY elects to replat,
LESSEE agrees to sign the plat and any other documents necessary to complete the platting
or replatting of any area including all or a portion of the Leased Land. LESSEE shall
accept reasonable restrictions, easements, or plat notes as may be required by CITY or
other governmental authorities as a condition to filing the plat of the Leased Land or the
plat of CITY-owned real property adjacent to the Leased Land.
1.6 Development of Leased Land. LESSEE shall continue to operate a fish processing
facility, a cold storage facility, a meal plant facility, and other uses necessary and
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incidental to the foregoing, through the term of this LEASE. LESSEE understands that
construction and operations of its marine-related business is a major consideration for the
CITY's agreement to lease the Leased Land to LESSEE. LESSEE shall not operate any
other unrelated business on the Leased Land without the consent of the CITY.
a) 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 operation of
the Seward Boat Harbor.
b) In accordance with the provisions of Article 12, no assignment or sublease shall be
permitted, unless approved in writing by CITY. Any sublease shall be expressly
subject and subordinate to this Lease and the rights of the CITY hereunder. The CITY
may elect to not approve any proposed assignment or sublease that might result in a
business or activity that, in the CITY's sole discretion, is undesirable and/or
incompatible with the CITY's Comprehensive Plan.
1.7 Amendment and Restatement of Original Lease. To accommodate LESSEE'S existing
financing, this LEASE amends and restates in its entirety the ORIGINAL LEASE. This
LEASE does not evidence a termination of LESSEE's leasehold interest in,nor a re-leasing
of,the LEASED LAND. Such leasehold interest of the LESSEE in and to the Leased Land
pursuant to the ORIGINAL LEASE shall be continuing in all respects, as amended and
restated by this LEASE. The parties do not intend for this LEASE to be a novation of the
ORIGINAL LEASE, and this LEASE shall not effect a novation of the ORIGINAL
LEASE.
ARTICLE 2 -LEASE TERM
The term of this LEASE (the "Lease Term") shall be in accordance with CITY's
authorization in Resolution No. 2018- (the "Resolution"). The Lease Term shall commence
on the date this LEASE is signed by CITY and that date shall be the effective date of this LEASE
(the "Effective Date"). The Lease Term shall run for approximately 20 years from the Effective
Date, ending at midnight on December 31, 2037. LESSEE shall have the right to extend the term
of this LEASE for 2 additional 5 year periods, provided that:
a) LESSEE exercises its option to extend at least one hundred and eighty (180) days
prior to the expiration of the then current lease term;
b) LESSEE is not in default under any term or provision of this LEASE;
c) LESSEE shall exercise its options to extend by sending written notice in accordance
with the provisions of Article 33 of this LEASE; and
d) The City Council, at the time this option is exercised, approves the extension by
resolution or ordinance.
ARTICLE 3 - RENTAL RATE
3.1 Initial Rental Rate. Commencing on the Effective Date of this LEASE, the annual rental
rate for the Leased Land shall be set at $124,000. Rent shall be payable quarterly in
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advance upon the Effective Date of this Lease (prorated for the balance of the current
quarter) and thereafter on or before the 20th day of the month beginning each calendar
quarter: January 20, April 20, July 20 and October 20. The amount of each quarterly
payment shall be one-quarter of the annual rental rate as initially established or later
adjusted under this Article 3.
3.2 Rental Adjustments. The annual rental payment shall be adjusted on July 1, 2020, and on
the same date every five years thereafter(each a "Rental Adjustment Date"). The adjusted
annual rental payment to be paid under the terms of this Lease shall be the appraised fair
market rental value(the "Fair Market Rental Value") of the Leased Land at the highest and
best use of the Leased Land. The highest and best use of the Leased Land shall be
determined without regard to LESSEE's intended or actual use of the Leased Land unless
that use is coincidentally the highest and best use of the Leased Land. CITY shall complete
such appraisal and deliver a copy of the appraisal report to LESSEE not less than ninety
(90) days before each Rental Adjustment Date.
3.3 Procedure for Rental Adjustment. To adjust the rent as of any successive Rental
Adjustment Date, CITY shall, at its own expense, retain an independent State of Alaska
certified MAI appraiser (Member, Appraisal Institute), who shall determine the "Fair
Market Rental Value" of the Leased Land in accordance with this Article 3, exclusive of
improvements placed thereon by LESSEE at any time but inclusive of all improvements
made by CITY(including those made by CITY before or subsequent to this LEASE). The
appraiser's report shall be delivered to LESSEE not less than ninety (90) days before the
Rental Adjustment Date. The appraiser's determination of Fair Market Rental Value of the
Leased Land shall constitute a final binding determination of the Fair Market Rental Value
and the adjusted annual rental rate until the next Rental Adjustment Date, unless LESSEE
objects to CITY's appraiser's determination of the Fair Market Rental Value. In that case,
LESSEE shall give written notice to CITY of its objection within thirty(30) days of receipt
of the appraiser's report, and LESSEE shall then engage an independent State of Alaska
certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to make an
appraisal of the Fair Market Rental Value in accordance with this Article 3.
If LESSEE's appraisal determines a Fair Market Rental Value that varies from that
determined by CITY's appraisal by no more than twenty percent (20%), then the adjusted
rental rate shall be the average of the rental rates determined by the two appraisals. If
LESSEE's appraisal determines a Fair Market Rental Value that varies from CITY's
appraisal by more than twenty percent (20%), then, unless CITY and LESSEE agree on a
rate themselves, the adjusted annual rental rate of the Leased Land shall be determined in
accordance with the arbitration provisions contained in Article 19 of this LEASE.
3.4 Effect ofLate Appraisal by CITY. If, for any reason, CITY does not complete the appraisal
or deliver a copy of the appraisal report to LESSEE ninety (90) days before the Rental
Adjustment Date, CITY may proceed to complete the appraisal or deliver a copy of the
appraisal report to LESSEE at any time thereafter. However, any such adjusted annual
rental rate shall not be effective until the quarterly payment due date immediately following
the date CITY delivers the appraisal report to LESSEE.
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3.5 Appraisal by LESSEE. If, for any particular Rental Adjustment Date, CITY fails to obtain
an appraisal of the Fair Market Rental Value or fails to deliver the appraisal report to the
LESSEE by the Rental Adjustment Date, LESSEE may engage an independent State of
Alaska certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to
make an appraisal under the terms of this Article 3 and submit a copy to CITY before the
next quarterly rental payment due date. However, LESSEE must notify CITY in writing
within thirty (30) days following the Rental Adjustment Date of LESSEE's election to
obtain an appraisal. If CITY objects to LESSEE's appraiser's determination of the Fair
Market Rental Value, CITY shall give written notice to LESSEE of its objection within
thirty (30) days of receipt of the appraiser's report, and CITY shall then engage an
independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at
CITY's expense to make an appraisal of the Fair Market Rental Value as of the Rental
Adjustment Date and in accordance with this Article 3. If the CITY's appraisal determines
a Fair Market Rental Value that varies from that determined by LESSEE's appraisal by no
more than twenty percent (20%), then the adjusted rental rate shall be the average of the
rental rates determined by the two appraisals. If the CITY's appraisal determines a Fair
Market Rental Value that varies from LESSEE's appraisal by more than twenty percent
(20%), then, unless CITY and LESSEE agree on a rate themselves, the adjusted annual
rental rate of the Leased Land shall be determined in accordance with the arbitration
provisions contained in Article 19 of this LEASE.
3.6 Effective Date ofAdjusted Rental Rate. The adjusted annual rental rate established by this
Article 3 shall apply as of the Rental Adjustment Date if CITY provided a copy of the
appraisal report to LESSEE no later than ninety (90) days before the Rental Adjustment
Date. If the adjusted annual rental rate is based on CITY's late appraisal or late delivery of
the appraisal report to LESSEE, the adjusted rental rate shall be effective beginning with
the quarterly rental payment due date immediately following the date the CITY delivers
the appraisal report to LESSEE. Notwithstanding the above, the exercise by either CITY
or LESSEE of the objection procedure relating to rental adjustment described in this Article
3 shall not postpone LESSEE's obligation to pay rent at the rate established by CITY.
LESSEE shall pay the amount of rent as established or adjusted by CITY until the question
of objection to the rental rate is finally resolved. At such time the objection to the rental
rate is resolved, an appropriate credit or adjustment shall be made retroactive to the date
the new rental rate was established by CITY or in cases where CITY failed to obtain an
appraisal or deliver the appraisal report to the LESSEE, to the Rental Adjustment Date.
3.7 Interim Rental Adjustments. For each year in the period between each Rental Adjustment
Date, excepting the Rental Adjustment Dates, the annual rental payment shall be increased
beginning July 1, 2019 and on July 1 of every year thereafter (each an "Interim Rental
Adjustment Date") in an amount that reflects the increase, if any, in the cost of living for
the previous year as stated in the Consumer Price Index,All Urban Consumers,Anchorage,
Alaska Area, All Items 1967=100 ("CPI"), as published by the United States Department
of Labor, Bureau of Labor Statistics for the most recent period published immediately prior
to the Interim Rental Adjustment Date. In no event shall the rent be less than the previous
year. If the CPI is revised or ceases to be published,the CITY shall instead use such revised
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or other index as most nearly approximates the CPI for the relevant period, and make
whatever adjustment in its application as may be necessary, in the CITY's sole discretion,
to accomplished as nearly the same result as if the CPI had not been revised or ceased to
be published.
3.8 Rent Payment Credits for Production and Employment. Provided that Lessee is not in
default of any Lease provisions and is current in all other payments to City, Lessee shall
be allowed as a credit against regular annual rent payable under Sections 3.1, 3.2 and 3.7
hereof(Regular Rental Rate),certain rent payments credits for production and employment
at the Leased Land. The Lessee shall be entitled to receive credits as follows:
(a) Production Credit. Lessee may deduct from Regular Rent payment due during
a calendar year, a rent payment credit for processing fisheries resources at the
Leased Land during the immediately preceding calendar year.The rent payment
credit shall equal $.50 per ton of all fisheries resources delivered to the Leased
Land by land or water or from within or outside of the City of Seward, Alaska.
(b) Employment Credit. Lessee may deduct from the regular rent payment due
during a calendar year, a rent payment credit for employment at the Leased
Land during the immediately preceding calendar year. The rent payment credit
shall equal $.25 per hour for each Alaska resident employee hour worked at the
Leased Land which exceeds a base annual employment level of 25,000
employee hours. Only hours actually worked by Lessee's non-salaried, Alaska
resident hourly paid employees shall be considered. All employee time must be
for Alaska resident employees of Lessee who are actively engaged in work on
behalf of Lessee at the Leased Land. City shall have the right to verify Lessee's
compliance with provisions of this Article by being provided quarterly certified
payroll records showing the hours worked by Lessee's Alaska resident
employees at the Leased Land.
(c) Alaska Resident Determination. Alaska resident status shall be determined by
Alaska driver's license, Alaska resident fishing license, Alaska PFD recipient
or an employee's Alaska resident address listed on previous years Federal Tax
form.
(d) Provisions Governing Use of All Rent Payment Credits. Rent payment credits
shall be applied only against the Regular Rent due for each calendar year as
otherwise computed under the terms of Lease sections 3.1 and 3.2 hereof, as
such rental rate may be adjusted from time to time. Rent payment credits shall
not be applied to any additional rent described in section 3.9 hereof, taxes
assessments, utilities, other lease obligations paid by City on Lessee's behalf,
late Regular Rental payments not timely made in the calendar year in which
they were due, or late payment penalties. Final determination of the availability
and amount of rent payment credits shall be in the sole reasonable discretion of
City.
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Rent payment credits may be used in any combination; provided however, in
no event shall the total of credits used in any one calendar year exceed 50% of
the annual Regular Rent payments due for a calendar year or $75,000,
whichever is less. Rent payment credits shall not be carried forward from year
to year.
Rent payment credits shall not be earned during the final calendar year of the
lease term whether the lease has expired by its terms or is terminated by either
party to the lease.
3.9 Late Payment Charge. Rental payments not received by the due date shall bear interest
until paid at a rate of 10.5%per annum, or the maximum rate permitted under Alaska law,
whichever is less, plus a flat monthly late fee of $2.50, or such amount as may be
established from time to time by CITY ordinance or resolution and relating to late fees for
CITY leases generally.
ARTICLE 4 - USE OF LEASED LAND
4.1 Use of Leased Land. CITY has limited land available for lease. Use of the Leased Land
by LESSEE has been determined by the City Council of CITY to be in the public interest.
LESSEE may use the Leased Land for fish processing, cold storage, meal plant and other
marine oriented business.
4.2 Obligations of LESSEE. LESSEE may use the Leased Land only in accordance with
applicable CITY zoning code provisions and provided the following conditions are met:
a) The Leased Land is to be completely cleaned and restored to its original condition,
that is, the condition existing prior to this LEASE or in better condition upon
termination of this LEASE.
b) LESSEE agrees to prohibit the use, keeping, storage, or disposal of Hazardous
Materials on the Leased Land except as permitted in Article 19 of this LEASE.
c) LESSEE shall not use the Leased Land in any manner or construct any facilities
thereon which would inhibit the use of adjacent or other lands.
d) LESSEE shall operate a fish processing, cold storage, meal plant and other marine
oriented business on the Leased Land.
e) Any changes to this site require prior CITY approval, through the City Manager.
4.3 No Preferential Rights to Use Public Facilities. This LEASE does not grant to LESSEE
any exclusive rights to use any public port facilities constructed or operated by CITY.
LESSEE will be subject to any tariffs, procedures, rules, and regulations of CITY
concerning the use of such facilities as they may now exist or from time to time be
amended, and LESSEE shall not be entitled to any exclusive use.
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4.4 Adequacy of Public Facilities. CITY makes no representations or warranties as to the
fitness of any particular part or the whole of CITY's public facilities for the uses intended
by LESSEE, and LESSEE has inspected those facilities and has satisfied itself that the
facilities are sufficient for the intended uses by LESSEE. CITY makes no representations
or warranties of any nature with respect to the commercial practicability or accuracy of any
information provided by CITY.
4.5 Tams and Other Service Fees. CITY shall have the right to make amendments to its
tariffs, regulations, and scheduled fees from time to time, even if those adjustments shall
cost LESSEE more for its operations or use of public facilities, and CITY is free to do so
provided only that it does not impose any greater burden or higher rate upon LESSEE than
upon any other similar user of the public facilities.
4.6 Time for Payment of Utilities and Taxes. LESSEE will pay for utilities and taxes related
to operations on the Leased Land and LESSEE's interest in this LEASE and improvements
thereon, if any,before such obligations become delinquent;provided that LESSEE may, in
good faith and before such delinquency, contest any such charge or assessment.
4.7 Other Uses. This LEASE shall not preclude the CITY from actively seeking other and
additional tenants for space, including those who would be in competition with LESSEE
or who might be interested in leasing the Leased Land should this LEASE be terminated
for any reason.
4.8 Use of Public Docks and Port Facilities. Public docks are subject to port and harbor rules
and regulations as adopted by City Council.
ARTICLE 5 -UTILITIES AND RIGHTS OF ACCESS
5.1 Utilities. LESSEE, at LESSEE's sole cost and expense, shall provide for the extension of
public utilities to the Leased Land required for LESSEE's intended operations. In so doing,
LESSEE shall comply with all CITY regulations and requirements, and the tariffs of the
affected utilities, with respect to the construction of those utilities. CITY agrees to
cooperate and assist the LESSEE, through consultation and review, in LESSEE's planning
and engineering of those improvements. All utilities will be located and sized in
accordance to CITY's Master Plan for the area leased. All such construction shall be in
compliance with all applicable building, mechanical and fire codes. Utilities constructed
by the LESSEE within the public right-of-ways or within public utility easements will
normally be accepted and maintained by CITY or utility companies and may be used to
serve other customers of CITY's without payment of fees or reimbursement of construction
cost to the LESSEE. However, this does not preclude several lessees from agreeing to
share the cost of constructing a utility to serve their facilities. CITY or other utility
company may determine that it would be to their benefit to oversize the utility or install
special fittings or equipment in order to serve other existing or future users. The additional
direct costs of such oversizing shall be borne by CITY or other utility company. Such costs
shall be limited to the supplier's cost of the additional fittings, equipment, direct labor, and
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equipment costs to complete the installation. The costs of oversizing pipe or electrical
conduit shall be limited to the difference between the supplier's price to provide the size
required to serve LESSEE's facility and the price of the oversized material required by
CITY or utility company.
LESSEE shall not be entitled to any refund, rebate, or payments from CITY for any rent,
investment, or costs incurred by LESSEE with respect to any required permits for
construction or operation of LESSEE's facilities on the Leased Land, it being the intent of
the parties that the risk of obtaining required permits be solely a risk undertaken by
LESSEE.
5.2 Third-Party Improvements. At the request of LESSEE, CITY shall, from time to time,
execute and deliver, or join in execution and delivery of, such documents as are
appropriate,necessary, or required to impose upon the Leased Land in accordance with the
terms of this LEASE covenants, conditions, and restrictions providing for the granting of
uses of the Leased Land, or any part thereof, the establishment of party walls, the
establishment of mutual and reciprocal parking rights or rights of ingress or egress, or other
like matters (herein called "third-party improvements"), all of which are for the purpose of
the orderly development of the Leased Land as a commercial unit subject, however, to the
conditions that:
a) All such matters shall be limited to the Lease Term and shall terminate upon
termination of this LEASE for whatever reason.
b) Any such matters of a permanent nature extending beyond the Lease Term shall not
be granted without the prior written approval of CITY. In any of the foregoing
instances referred to in this Section, CITY shall be without expense therefor, and
the cost and expense thereof shall be borne solely by LESSEE.
c) At the expiration of the Lease Term (including any extended period) third-party
improvements on the Leased Land other than trade fixtures and equipment shall
become the property of CITY without the payment of any compensation to
LESSEE.
5.3 Easements. In order to provide for the orderly development of the Leased Land and
adjacent lands, it maybe necessary, desirable,or required that street,railroad,water,sewer,
drainage, gas, power line, and other easements and dedications and similar rights be
granted or dedicated over or within portions of the Leased Land. As additional
consideration for this LEASE, CITY and LESSEE each shall, at the request of the other,
join with each other in executing and delivering such documents from time to time and
throughout the Lease Term as may be appropriate, necessary, or required by the several
governmental agencies (including the City of Seward), public utilities, and other users or
tenants of CITY land for the purpose of granting such easements and dedications;provided,
however, that such easements and dedications and similar rights do not unreasonably
interfere with LESSEE's operations. The costs of locating or relocating any public
easements or restrictions of record including any relocation of public road, railroad,utility,
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or other easements shall be at the sole cost and expense of the party requesting the
relocation. CITY shall not refuse reasonable requests for such relocations provided those
relocations do not interfere with or inhibit the overall development of CITY property or
other public property. Any easements or rights of access granted to LESSEE by CITY
need not be exclusive to LESSEE.
ARTICLE 6 - CONSTRUCTION BY LESSEE
6.1 Improvements on Leased Land. LESSEE shall have the right to erect, maintain, alter,
remodel, reconstruct, rebuild, build, and/or replace buildings and other improvements on
the Leased Land, subject to the following conditions:
a) The cost of any construction, reconstruction, demolition, or of any changes,
alterations, or improvements, shall be borne and paid for by LESSEE.
b) The Leased Land shall at all times be kept free of mechanic's and materialmen's
liens.
c) LESSEE shall provide CITY with a copy of all building plans and specifications
and a site development plan or plans(based on a recent survey)for the Leased Land
prior to commencement of construction.
d) LESSEE is solely responsible for resurveying and locating improvements on the
Leased Land in such manner not to violate building setback requirements or
encroach into rights-of-ways or easements. On completion of any improvements,
LESSEE shall provide CITY a copy of an as-built survey depicting the
improvements as completed on the Leased Land.
e) Any general contractor employed by LESSEE shall be appropriately bonded by use
of performance and labor and material payment bonds in the customary form when
cost of the work is equal to or exceeds FIFTY THOUSAND DOLLARS ($50,000).
Copies of all such bonds shall be furnished to CITY prior to commencement of
construction. If the cost of the work is less than FIFTY THOUSAND DOLLARS
($50,000), LESSEE shall provide CITY, if no performance and labor and material
bonds are provided by LESSEE, any necessary assurances or guarantees that the
contemplated work will be performed by the general contractor or by LESSEE. In
the event that LESSEE elects to construct the facility with its own personnel and
equipment, or the personnel and equipment of any corporation or person that is an
"affiliate" of LESSEE as such term is defined in AS 10.06.990(2)or Alaska limited
liability company in which LESSEE maintains a substantial membership interest, a
performance bond shall be required when the cost of the work is equal to or exceeds
FIFTY THOUSAND DOLLARS ($50,000).
f) CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility
for any improvements constructed or effected by LESSEE on the Leased Land.
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g) LESSEE shall comply with all federal, state, and local statutes and regulations with
respect to such construction, including, but not limited to, all applicable building,
mechanical, and fire codes.
6.2 City Review of Construction. CITY shall have the right to review initial plans, including
those supplied to CITY under Section 6.1 hereof, and any future changes or additions to
LESSEE's facilities on the Leased Land, by reviewing the design thereof prior to the
commencement of construction. CITY shall have the right to comment upon that design
and to require LESSEE to make reasonable changes so as to avoid interference with public
operations, but the exercise of these rights shall not imply any obligation to do so nor any
obligation to do so in a particular way. LESSEE shall construct the facility in accordance
with final design specifications approved by CITY. CITY's representatives may monitor
the work and shall have access to the site at all reasonable times. LESSEE shall be solely
responsible for completing all improvements according to LESSEE's plans and
specifications and shall bear all risk, responsibility, and liability for properly surveying the
Leased Land before construction and to place all improvements on the Leased Land
without encroaching upon any land, easements, rights-of-way, or setback requirements.
LESSEE shall obtain the usual and customary performance guarantees from its contractors,
and CITY shall be named as an additional insured.
ARTICLE 7 -RETURN OF LEASED LAND/SITE CONDITIONS
Subject to the provisions of Article 11.1 herein, upon termination of this LEASE for any
reason, LESSEE shall return the Leased Land to CITY in the same condition as at the
commencement this LEASE, subject to normal, non-abusive use. The Leased Land shall be free
of all Hazardous Materials and contamination arising out of or resulting from or occurring during
LESSEE's operations or use of the Leased Land during this LEASE.
ARTICLE 8 -FORCE MAJEURE
In the event either LESSEE or CITY is delayed from performance of any of its obligations
under this LEASE due to acts of nature, acts of the enemies of the United States of America,
sabotage, blockade, insurrection, riot, epidemic, fire, flood, explosion, earthquake/tsunami, civil
disturbance, or war, the time period wherein such performance is to occur shall be extended by
that amount of time necessary to compensate for the delay.
ARTICLE 9 - LESSEE'S ACTS OF DEFAULT
Each of the following shall be a"LESSEE Act of Default"under this LEASE and the terms
"acts of default" and"default" shall mean,whenever they are used in this LEASE, any one or more
of the following events:
9.1 Failure by LESSEE to pay promptly when due, and in no event later than twenty(20) days
from the due date thereof, the rent required to be paid under this LEASE.
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9.2 Failure by LESSEE to comply with Section 4.1 of this LEASE for a period of thirty (30)
days after written notice specifying such failure, requesting that it be remedied, and stating
that it is a notice of default, has been given to LESSEE by CITY; provided, however, that
if said default is such that it cannot be corrected within the applicable period, it shall not
constitute an act of default if corrective action is instituted by LESSEE within the
applicable period and diligently pursued until the default is corrected.
9.3 Failure by LESSEE to observe, fulfill or perform any covenants, conditions, or agreements
on its part to be observed or performed under this LEASE, other than payment of rent or
compliance with Section 4.1, for a period of thirty(30) days after written notice specifying
such failure, requesting that it be remedied, and stating that it is a notice of default, has
been given to LESSEE by CITY; provided, however, that if said default is such that it
cannot be corrected within the applicable period, it shall not constitute an act of default if
corrective action is instituted by LESSEE within the applicable period and diligently
pursued until the default is corrected.
9.4 The making by LESSEE of an assignment for the benefit of creditors,the filing of a petition
in bankruptcy by LESSEE, the adjudication of LESSEE as insolvent or bankrupt, the
petition or application by LESSEE to any tribunal for any receiver or any trustee for itself
or for any substantial part of its property; or the commencement of any proceeding relating
to LESSEE under any bankruptcy, insolvency, reorganization, arrangement, or
readjustment of debt law or statute or similar law or statute of any jurisdiction, whether
now or hereafter in effect which shall remain undismissed for a period of six (6) months
from the date of commencement thereof.
9.5 Violation by LESSEE of any laws or regulations of the United States, or of the State of
Alaska, or any conditions of any permits issued by agencies of the City of Seward, the
Kenai Peninsula Borough, the State of Alaska, or of the United States Government
applicable to LESSEE's use of the Leased Land, pursuant to the regulations of such
agencies, for a period of sixty(60) days after written notice specifying such violation has
been given by the agency charged with the enforcement of such laws, regulations, or
permits to LESSEE;provided,however, if such violation be such that it cannot be corrected
within the applicable period, it shall not constitute an act of default if corrective action is
instituted by LESSEE within the applicable period and diligently pursued until the
violation is corrected. Furthermore,if LESSEE shall contest such alleged violation through
appropriate judicial or administrative channels, the time period specified herein shall not
commence until such proceedings are finally determined provided such proceedings are
diligently pursued; provided, however, that any such extension of time shall not be
effective if the effect of the interim administrative or judicial action is to cause a stoppage,
interruption, or threat to the activities of any person or entity other than those of LESSEE.
9.6 Failure of LESSEE to maintain its operations within the Leased Land or to keep the public
rights of way clear for a period of thirty (30) days after written notice specifying such
failure, requesting that it be remedied, and stating that it is a notice of default, has been
given to LESSEE by CITY; provided, however, that if said default is such that it cannot be
corrected within the applicable period, it shall not constitute an act of default if corrective
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action is instituted by LESSEE within the applicable period and diligently pursued until
the default is corrected.
ARTICLE 10 -REMEDIES FOR DEFAULT BY LESSEE
Whenever an act of default by LESSEE shall have occurred, and any applicable period for
giving notice and any opportunity to cure shall have expired, CITY shall have the following
rights and remedies all in addition to any rights and remedies that may be given to CITY by statute,
common law, or otherwise:
10.1 CITY may distrain for rent due any of LESSEE's personal property which comes into
CITY's possession. This remedy shall include the right of CITY to dispose of personal
property distrained in any commercially reasonable manner. It shall be conclusively
presumed that compliance with the procedures set forth in the Alaska Uniform Commercial
Code (AS 45.29.601-.628) with respect to sale of property shall be a commercially
reasonable disposal.Notwithstanding the foregoing, CITY agrees that its rights set forth in
this Section 10.1 shall be junior to the rights granted to any Lender (as defined in Section
12.2) under a Security Instrument(as defined in Section 12.2), and CITY's consent is not
required for a Lender to enter upon the LEASED LAND and assemble, have appraised,
display, sever, remove, maintain,prepare for sale or lease, advertise, inspect, repair, lease,
transfer and/or sell (at public auction or private sale), take possession of, or otherwise
enforce such Lender's security interest in LESSEE's personal property or other assets
located on the Leased Land in which such Lender holds a security interest.
10.2 CITY may re-enter the Leased Land and take possession thereof and, except for any
personal property of LESSEE which CITY has waived its right to distrain under Section
10.1 above,remove all personal property of LESSEE from the Leased Land. Such personal
property may be stored in place or may be removed and stored in a public warehouse or
elsewhere at the cost of LESSEE all without service of notice or resort to legal process, all
of which LESSEE expressly waives.
10.3 In addition to the above, CITY may:
a) Declare this LEASE terminated;
b) Collect any and all rents due or to become due from subtenants or other occupants
of the Leased Land;
c) Recover from LESSEE, whether this LEASE be terminated or not, reasonable
attorney's fees and all other expenses incurred by CITY by reason of the breach or
default by LESSEE;
d) Recover an amount to be due immediately on breach equal to the unpaid rent for
the entire remaining term of this LEASE.
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e) Recover all damages incurred by CITY by reason of LESSEE's default or breach,
including, but not limited to, the cost of recovering possession of the Leased Land,
expenses of reletting, including costs of necessary renovation and alteration of the
premises, reasonable attorney's fees, and any real estate commissions actually paid.
f) Remove or require the removal of any improvements constructed without CITY
approval (when such approval is required under this LEASE) or constructed
contrary to site development plans approved by CITY and recover all costs and
expense incurred by CITY to remove violating improvements.
10.4 If LESSEE does not immediately surrender possession of the Leased Land after
termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon
and repossess the Leased Land and expel 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 breach of covenant.
10.5 No expiration or termination of this LEASE shall expire or terminate any liability or
obligation to perform of LESSEE's which arose prior to the termination or expiration
except insofar as otherwise agreed to in this LEASE.
10.6 Each right and remedy of 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 otherwise, and the exercise or beginning of the
exercise by CITY of any one or more of the rights and remedies provided for in this LEASE
or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude
the simultaneous or later exercise by CITY of any or all other rights or remedies provided
for in this LEASE or now or thereafter existing at law, or in equity or by statute or
otherwise.
10.7 No delay or omission to exercise any right or power accruing following an act of default
shall impair any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be deemed
expedient.
10.8 Notwithstanding any other provision of this Article X, if this LEASE is rejected in a
bankruptcy or insolvency proceeding or terminated due to LESSEE's breach of Section 9.4
above,upon Lender's written request made not more than forty(40) days after this LEASE
is rejected, CITY will enter into a new lease of the Premises with the nominee of such
Lender for the remainder of the term of this LEASE, at the same rent and under the same
terms and conditions set forth in this LEASE. All sums due and owing to CITY under this
LEASE shall be paid at the time of execution of the new lease.
ARTICLE 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE
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11.1 Real Property Improvements. All improvements constructed by LESSEE or its
predecessors on the Leased Land or on easements to or from the same, such as buildings,
warehouses,conveyor systems, ditches,sewer lines,water lines, dikes or berms and similar
improvements, are the property of LESSEE and shall be removed by LESSEE at the
termination of this LEASE for any reason. All such improvements that are not removed
by LESSEE prior to the termination of this LEASE shall become the property of CITY
upon termination of this LEASE for any reason;provided,however,that CITY may require
LESSEE to remove any improvements designated by CITY and without cost to CITY by
giving notice to LESSEE of such requirement not more than 10 days after termination of
this LEASE and sooner if possible. LESSEE shall have a period not to exceed three
hundred sixty-five(365)days after LEASE termination or LESSEE's receipt of such notice
(whichever is later) in which to remove such improvements, and LESSEE shall pay rent
during such time, and shall continue to pay public utility bills until it has completed the
removal obligations described in this Section 11.1.
11.2 Personal Property. Any other provisions of this LEASE to the contrary notwithstanding,
LESSEE, upon termination of this LEASE for any reason, may, but need not, promptly
remove, in no event later than ninety (90) days from the termination of the LEASE, trade
fixtures and equipment from the Leased Land provided that LESSEE shall repair any
damages to the Leased Land caused by such removal.
ARTICLE 12 -ASSIGNMENT OR SUBLEASE
12.1 Assignment of Lease or Subleasing. The parties recognize that this LEASE has been
determined to be in the public interest by the City Council of CITY for the reasons set forth
in the approving Resolution. The rights and duties created by the LEASE are personal to
LESSEE and CITY has granted the LEASE in reliance upon the business character and
financial capability of LESSEE. Therefore, LESSEE shall not assign or sublease this
LEASE without CITY's prior written consent, in CITY's sole discretion.
12.2 Assignment of Lease for Security. Notwithstanding Section 12.1 above, LESSEE may
assign, encumber, or mortgage its interest in this LEASE or improvements on the Leased
Land, by deed of trust or other security instrument (the "Security Instrument"), to (i) the
State of Alaska to secure the LESSEE's tax obligations, and (ii) one or more entities
engaged in the business of loaning money for LESSEE's development of or operations on
the Leased Land (each beneficiary named in such Security Instrument referred to
hereinafter as the "Lender"). CITY's consent is not required for any Security Instrument
as described herein, or any loan documents related to the same (or any amendment,
modification, restatement, supplement, renewal or substitution thereof), but upon a
Lender's request, CITY shall execute a consent to the Security Instrument or include
consent language in an estoppel certificate provided to CITY pursuant to Article XX of
this LEASE. If requested by a Lender, CITY shall furnish such Lender, at the address
provided to CITY by Lender in writing, with notice of any default or breach of LESSEE
under this LEASE. Lender shall have the right(without being required to do so and without
thereby assuming the obligations of LESSEE under this LEASE)to make good such default
or breach within thirty(30)days after receipt of such written notice specifying such breach.
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Notwithstanding the provisions of Article 10 above, no "LESSEE Act of Default" shall
exist until expiration of thirty (30) days after such notice is furnished to Lender; provided,
a) If Lender, with respect to any default or breach other than a failure to make any
required payment of rent or other money, shall undertake within thirty (30) days
after notice to cure the default or breach and shall diligently and in good faith
proceed to do so, CITY may not terminate this LEASE or relet the Leased Land
unless Lender fails to cure the default or breach within a reasonable period of time
thereafter; and
b) If the default for which notice is given is a breach of Section 9.3, CITY shall not
exercise any of the remedies afforded to it under Article 10 above so long as
LESSEE or Lender remains in possession of the Leased Land and satisfies
LESSEE's obligations under the terms of this LEASE.
This LEASE shall not be terminated upon foreclosure or other assertion by Lender of its
security interest as long as all obligations of LESSEE under the terms of this LEASE
continue to be performed. Any assignee, purchaser at a foreclosure sale, or transferee
shall agree to assume this LEASE and be bound by each and every term of this LEASE.
No amendment,modification or termination of this LEASE prior to its expiration date shall
be effective at any time that the Security Instrument remains effective,unless Lender shall
have given its prior written consent thereto, which consent shall not unreasonably be
withheld. Notwithstanding the forgoing, in the event the Lender does not notify the City
of its election to withhold consent to any amendment, modification or termination of this
Lease within thirty (30) days after receipt of a request for such approval, the Lender will
be deemed to have approved such amendment,modification or termination as the case may
be. If at any time the leasehold interest under this LEASE and the fee estate in the Leased
Land are commonly held, such estates shall remain separate and distinct estates and shall
not merge without the consent of Lender.
12.3 Assignment to Affiliate. Notwithstanding Section 12.1 above, LESSEE may assign this
LEASE to an affiliate of LESSEE or of its parent company(as the term"affiliate"is defined
by AS 10.06.990(2)) or to an Alaska limited liability company in which LESSEE or its
parent company maintains a substantial membership interest; provided, however, that
LESSEE's full faith and credit shall remain obligated under this LEASE as though the
assignment had not taken place.
12.4 Assignment or Encumbrance by CITY. CITY agrees that, so long as any Security
Instrument remains outstanding, the CITY shall not encumber its interest in the Leased
Land or under the LEASE in any respect without the prior written consent of the LESSEE's
Lender. If any deed of trust or similar instrument encumbers the CITY's interest in the
Leased Land (a"CITY Deed of Trust") and is senior in priority to this LEASE, the CITY
agrees to obtain: (i) a non-disturbance agreement in form reasonably satisfactory to Lender
pursuant to which the beneficiary named in such CITY Deed of Trust agrees not to disturb
the possession of LESSEE or Lender and their successors and assigns so long as LESSEE
and Lender and their successors and assigns comply with this LEASE.
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ARTICLE 13 -LESSEE'S DUTY TO DEFEND/INDEMNIFY
LESSEE shall defend,indemnify,and hold harmless CITY,its officials,employees,agents,
and contractors from any and all liability or claims for damages, including personal injuries,
environmental damage, death and property damage arising out of or resulting from LESSEE's use
of the Leased Land or the use of the Leased Land by LESSEE's sublessees, assignees, agents,
contractors, or the public, except for damages arising from the sole negligence or willful acts or
omissions of CITY, its officials, employees, agents, or contractors. If any action or proceeding is
brought against LESSEE by reason of any such occurrence, LESSEE shall notify CITY promptly
in writing of such action or proceeding.
ARTICLE 14 - CITY'S DUTY TO DEFEND/INDEMNIFY
CITY shall defend, indemnify and hold LESSEE harmless from any and all liability or
claims for damages, including personal injuries, death, and property damage arising from the sole
negligence or willful acts or omissions of CITY, its officials, employees, agents, or contractors.
ARTICLE 15 - INSURANCE
15.1 Minimum Insurance Requirements. Prior to commencement of the Lease Term or
LESSEE'S occupancy of the Leased Land, LESSEE shall procure and maintain, at
LESSEE's sole cost and expense, the following insurance:
a) Commercial General Liability Insurance Policy insuring the Leased Premises and
LESSEE's use thereof, with a minimum limit of Two Million Dollars
($2,000,000) on account of bodily injuries or death or property damage for each
occurrence and a minimum limit Two Million Dollars ($2,000,000) annual
general aggregate (such limits may be satisfied through a combination of primary
and umbrella/excess liability insurance). The foregoing policy(ies) shall name
CITY and, upon request, LESSEE's lender, as additional insureds under
LESSEE's insurance policy(ies);
b) Special Form Cause of Loss (excluding earthquake and flood) Property Insurance
Policy, including extended coverage endorsements insuring all of Lessee's
improvements (including LESSEE's stock-in-trade, trade fixtures, furniture,
furnishings, special equipment, floor and wall coverings, and all other items of
personal property of LESSEE located on or within LESSEE'S improvements'
with such coverage to be in an amount equal to one hundred percent (100%) of
the replacement cost thereof. The foregoing policy shall name CITY and
LESSEE's lender, if any, as loss payee under LESSEE's insurance policy with
regard to the permanent leasehold improvements on the Leased Land.
c) Workers' compensation and United States Longshore and Harborworker's
insurance covering Tenant's employees at the Leased Premises as required by
Alaska law;
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d) Commercial automobile liability insurance for hired, owned/registered under
LESSEE's name and non-owned vehicles, including contractual liability with a
single limit of liability not less than One Million and 00/100 Dollars
($1,000,000.00) per accident for bodily injury and property damage combined or
such other amounts as CITY may reasonably request. The foregoing policy shall
name CITY and, upon request, LESSEE's lender, as additional insureds under
Tenant's insurance policy.
The minimum amounts and types of insurance provided by LESSEE shall be subject to
revision at the sole discretion of CITY in accordance with standard insurance practices, in
order to provide continuously throughout the term of this LEASE and any extensions
hereof, a level of protection consonant with good business practice and accepted standards
in the industry. Such factors as changes in the type of or extent of use of the Lease Land,
increases in the cost of living, inflationary pressures, and other considerations, shall be
utilized in assessing whether the minimum insurance requirements should be increased.
CITY shall notify LESSEE of any required increase in insurance coverage. Provisions of
insurance policies required under this Section 15.1 will not be materially altered by
LESSEE during the term of this LEASE, and LESSEE will provide CITY with proof of
insurance upon request.
All such policies shall be written by insurance companies legally authorized or licensed to
do business in the State of Alaska and acceptable to CITY (Best's Rating B+ or better).
CITY shall be listed as an additional insured under all insurance policies. LESSEE shall
furnish CITY, on forms approved by CITY, certificates evidencing that it has procured the
insurance required herein prior to the occupancy of the Leased Land or operation by
LESSEE. Insurance policy deductibles shall be consonant with good business practice and
accepted standards in the LESSEE's industry. Nothing herein contained shall prevent
LESSEE or CITY from placing and maintaining at CITY's or LESSEE's own individual
cost and expense,additional or other insurance as may be desired. The minimum insurance
requirements under this LEASE shall not act to limit LESSEE's liability for any occurrence
and shall not limit LESSEE's duty to defend and indemnify CITY for claims related to this
LEASE or the Leased Land.
15.2 Subrogation Rights Waived. To the extent permitted by law, LESSEE hereby releases
CITY, its elected and appointed officials, employees and volunteers, and others working
on behalf of CITY from any and all liability or responsibility to LESSEE or anyone
claiming through or under LESSEE by way of subrogation or otherwise, for any loss of
any kind (including damage to property caused by fire or any other casualty), even if such
loss shall have been caused by the fault or negligence of the CITY, its elected or appointed
officials,employees or volunteers,or others working on behalf of the CITY. This provision
shall be applicable and in full force and effect only with respect to loss or damage occurring
during the time of LESSEE's occupancy or use (including LESSEE's occupancy or use
prior to the Effective Date of this LEASE), and LESSEE agrees its policies of insurance
will not contain any clause,provision or endorsement that limits LESSEE's right to recover
under such policy if an additional insured has obtained a waiver of subrogation.
4817-1371-2460v.14 0022769-000022 18
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15.3 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, and to the extent that
LESSEE is entitled to any insurance proceeds resulting therefrom, such proceeds shall be
paid to LESSEE's Lender,to be used to restore the LESSEE's improvements in accordance
with the Security Instrument. In the event LESSEE does not have a Lender, then the
insurance proceeds shall be payable to Lessee, and Lessee shall either:
a) Within ninety(90) days after payment of the insurance proceeds, commence
restoration of the buildings and improvements to their condition prior to such
damage, provided, however, that Lessee's obligation to restore will be limited to
the insurance proceeds available to Lessee; or
b) Apply such insurance proceeds first to the cost of removal of the damaged or
destroyed buildings, including any debris or other nuisance occasioned by the
damage or destruction, and restore the Leased Land to a grade and condition
similar to its grade and condition prior to the construction of the buildings or
improvements thereon. Insurance proceeds remaining after the removal of
damaged or destroyed buildings and other improvements, and restoration of the
Leased Land to grade and condition satisfactory to the City may be applied to any
indebtedness owed by Lessee to any lender named as beneficiary under any Deed
of Trust recorded against the Lessee's interest, in order of priority of recordation.
c) Regardless of whether Lessee elects to proceed under a) or b), above, all
insurance proceeds shall be deposited and held in trust with a bank having offices
in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's
mortgagee named in a Deed of Trust granting such mortgagee a beneficial interest
in the damaged property, and shall be made available to Lessee for its use in
either restoring or repairing any damaged or destroyed buildings or improvements
on the Leased Land, or removing the damaged or destroyed buildings or
improvements and restoring the Leased Land to a grade and condition of
reasonable satisfaction to the City. The proceeds of insurance shall be paid out by
such bank or mortgagee from time to time, on certifications, by the person having
supervision of the work, that the amount certified is being applied to the payment
of the reasonable costs of such work. Should the Lessee elect not to restore and
repair damaged buildings and improvements on the Leased Land, all insurance
proceeds remaining after removal of damaged and destroyed buildings and
improvements, and restoration of the Leased Land, may be applied to any
indebtedness by Lessee to any lender named as beneficiary under any Deed of
Trust recorded against the Lessee's interest, in order of priority of recordation,
after receipt of written satisfaction from the City of the restoration of the Leased
Land.
In the event Lessee elects not to restore and repair when substantial damage or destruction
has occurred to the buildings and improvements,this Lease shall terminate, and all Lessee's
obligations hereunder shall expire, upon the date that the City certified in writing its
satisfaction with the restoration of the Leased Land.
4817-1371-2460v.14 0022769-000022 19
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ARTICLE 16 - CONDEMNATION
If all or any part of the Leased Land is condemned for a public use by any government
agency or other duly authorized entity, CITY and LESSEE shall each make a claim against the
condemning or taking authority for the amount of any damage incurred by or done to them
respectively as a result of the taking. Neither LESSEE nor CITY shall have any rights in or to any
award made to the other by the condemning authority;provided, that in the event of a single award
to CITY which includes specific damages for loss of LESSEE's leasehold interest, CITY shall
transmit to LESSEE the amount of such specific damages so found, if any or to LESSEE's Lender
if required by a Security Instrument.
If part but not all of the Leased Land is condemned for public use, LESSEE shall make a
good faith determination as to whether or not the taking of the part of the Leased Land designated
for condemnation will prevent it from continuing to operate on the Leased Land. If LESSEE
determines in good faith that the condemning of such part of the Leased Land will prevent it from
continuing to operate on the Leased Land, LESSEE may notify CITY in writing to this effect, and
this LEASE shall then be terminated for all purposes effective fifteen (15) days from the date
LESSEE sends such notice to CITY, or at such other later date as LESSEE shall specify in its
notice, and such termination shall be treated in the same manner as a termination at the expiration
of the term of this LEASE. LESSEE shall, as a condition precedent to such termination, remove
all encumbrances, debts, and liens to which the Leased Land is subject. If at the time of such
partial taking for public use, LESSEE determines that such partial taking will not prevent it from
continuing to operate, then LESSEE and CITY shall negotiate an equitable and partial abatement
of the rent beginning to be effective on the actual date when LESSEE is effectively prevented from
utilizing the condemned land.
ARTICLE 17 -ARBITRATION
17.1 Arbitration.
a) Disputes between the parties with respect to the performance of this LEASE that
cannot be resolved by the parties,may be submitted to an independent arbitrator for
a settlement pursuant to the provisions of the Alaska Uniform Arbitration Act
(AS 09.43.010 et. sec.), as it now exists or may hereafter be amended from time to
time, and judgment on the award may be entered in any Superior Court in the State
of Alaska. Either party may submit to the other party a request for arbitration and
the party receiving a request shall have twenty (20) days to consent, in writing, to
the use of arbitration to resolve the dispute. Failure of either party to consent will
preclude the use of arbitration for that dispute. The costs and expenses of
arbitration shall be shared equally by the parties, and each party shall bear its own
attorney's fees and costs.
b) Arbitration procedures shall be applicable only to contract, negligence, and similar
claims arising from or related to this LEASE, and shall not be used to resolve or
determine any claim based upon fraud, intentional misrepresentation,nor any claim
based on conduct that is a felony crime in the State of Alaska.
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c) Arbitration of any dispute or claim shall be determined by a single arbitrator
selected from a list of not less than five (5) arbitrators obtained from the presiding
Superior Court Judge or other appropriate judicial officer in Anchorage, Alaska.
The arbitrator shall be a person who (a) has not less than five (5) years legal
experience in the State of Alaska prior to appointment; and (b) such legal
experience includes substantial experience with long-term commercial real
property transactions. Each party shall be provided with a copy of the list and shall
be afforded a maximum of ten (10) working days to become familiar with the
qualifications of the prospective arbitrators. The arbitrator shall be selected by each
party, commencing with the party demanding the arbitration, striking one name
from the list until only a single name remains.
d) Arbitration hearings shall be conducted in Anchorage,Alaska or such other location
as the parties may agree. Each party shall produce at the request of the other party,
at least thirty(30) days in advance of such hearing, (i)the names, addresses, phone
numbers, and email addresses for all witnesses who may testify at the hearing; and
(ii) all documents to be submitted at the hearing and such other documents as are
relevant to the issues or likely to lead to relevant information.
e) In deciding the claim or dispute, the arbitrator shall follow applicable Alaska law,
and the written decision shall be supported by substantial evidence in the record.
Failure to apply Alaska law, or entry of a decision that is not based on substantial
evidence in the record, shall be additional grounds for modifying or vacating an
arbitration decision.
ARTICLE 18 -MAINTENANCE AND REPAIRS
18.1 Normal Maintenance. During the entire term of this LEASE and every extension hereof,
if any, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the Leased Land,
including any improvements placed thereon by LESSEE, in as good condition as received
or constructed by LESSEE, subject to normal, non-abusive use. CITY, at CITY's sole
option and expense,may,prior to the commencement of construction by LESSEE,perform
maintenance and preventative work on the Leased Land, exclusive of improvements placed
thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or
prepare the Leased Land for eventual development by LESSEE or others by grading,
filling, or contouring the Leased Land. Any such work performed by CITY shall be at
CITY's sole expense and risk unless LESSEE agrees, in advance and in writing, to share
such expense and risk. LESSEE shall maintain in first class condition at all times all fire,
pollution, and other protective equipment, if any are placed on Leased Land.
18.2 Safety Issues. CITY may notify LESSEE in writing of any deficiencies in the performance
of LESSEE's maintenance responsibilities as they relate to public health or safety and
LESSEE shall promptly within thirty (30) days of receipt of such notice advise CITY in
writing of its proposed schedule for performance of any work necessary to cure such
deficiencies.
4817-1371-2460v.14 0022769-000022 21
437
If such deficiencies relate to the safety of LESSEE's operation such that the surrounding
land and port facilities are exposed to risk, unnecessary potential hazards, or a risk to the
public interest (as distinguished from a business risk), or if CITY is not satisfied with the
proposed schedule of repairs either because of the delays therein or the scope of the repairs,
then CITY may engage an independent engineering consultant well-versed and
experienced who shall furnish to CITY a comprehensive survey and report for the purpose
of establishing both the need and urgency to perform such maintenance work. As soon as
practicable following receipt of said engineer's determinations and recommendations, if
the report requires repair then LESSEE shall pay the cost of the report and perform such
work in accordance therewith at LESSEE's cost, risk, and expense.
18.3 Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work as being
necessary or advisable or reasonable to protect the public facilities on adjacent land, it may
submit the matter to arbitration; provided, however, that pending the decision of the
arbitrator it shall fully comply with the maintenance requests. If an arbitration award
should ultimately find that the repairs were not necessary, then LESSEE may either deduct
from future rental payments the cost of such repairs or be reimbursed therefor. In deciding
whether repairs requested by CITY or required by an engineering report are necessary, the
arbitration panel is to give primary consideration to the safety and welfare of the Seward
port facilities and the citizens of Seward in light of the highest standards in the industry.
If any facility or service provided by CITY to the Leased Land shall become inadequate
due to changes in environmental control standards or should any facility require updating
or improvement by reason of a change in LESSEE's use of the Leased Land or operations
therefrom, LESSEE shall either construct such improvements at LESSEE's own cost or
reimburse CITY for such work at the option of CITY.
ARTICLE 19 -ENVIRONMENTAL CONCERNS
19.1 Hazardous Materials.
a) Condition of Site. LESSEE has had full opportunity to examine the site for the
presence of any Hazardous Material and accepts the site in "as is" condition.
LESSEE may elect, at LESSEE's sole cost, to conduct a baseline soils test prior to
execution of this LEASE.
b) Release of CITY. Any other provision of this LEASE to the contrary
notwithstanding, LESSEE releases CITY from any and all claims, demands,
penalties, fines, judgments, liabilities, settlements, damages, costs, or expenses
(including, without limitation, attorney's fees, court costs, litigation expenses, and
consultant and expert fees) arising prior to, during, and after the term of this
LEASE, and resulting from the use, keeping, storage, or disposal of Hazardous
Material on the Leased Land by LESSEE or its predecessors in interest, or arising
out of or resulting from LESSEE's operations at the Leased Land or the operations
of its predecessors in interest at the Leased Land except for those claims arising out
4817-1371-2460v.14 0022769-000022 22
438
of CITY's sole negligence or intentional misconduct. This release includes,without
limitation, any and all costs incurred due to any investigation of the Leased Land
or any cleanup,removal, or restoration mandated by a federal, state, or local agency
or political subdivision or by law or regulation.
c) Use of Hazardous Materials on the Site.
i) LESSEE shall not cause or permit any Hazardous Material to be brought
upon, kept, or used in or about the Leased Land except for such Hazardous
Material as is necessary to conduct LESSEE's authorized use of the Leased
Land.
ii) Any Hazardous Material permitted on the Leased Land as provided in this
paragraph, and all containers therefor, shall be used, kept, stored, and
disposed of in a manner that complies with all Environmental Laws or other
laws or regulations applicable to such Hazardous Material.
iii) LESSEE shall not discharge, leak, or emit, or permit to be discharged,
leaked, or emitted, any material into the atmosphere, ground, ground water,
sewer system, or any body of water, if such material (as reasonably
determined by the City, or any governmental authority)does or may,pollute
or contaminate the same, or may adversely affect the (a)health, welfare, or
safety of persons, whether located on the Leased Land or elsewhere; or (b)
condition, use, or enjoyment of the Leased Land or any other area or
personal property.
iv) LESSEE hereby agrees that it shall be fully liable for all costs and expenses
related to the use, storage, and disposal of Hazardous Material kept or
brought on the Leased Land by LESSEE, its authorized representatives and
invitees, and LESSEE shall give immediate notice to CITY of any violation
or potential violation of the provisions of this subparagraph.
d) Indemnification of CITY. Any other provision of this LEASE to the contrary
notwithstanding, LESSEE shall defend, indemnify, and hold CITY harmless from
and against any claims, demands, penalties, fines, judgments, liabilities,
settlements, damages, costs, or expenses (including, without limitation, attorney,
consultant and expert fees, court costs, and litigation expenses)of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of or in any way
related to:
i) The presence,disposal,release, or threatened release of any such Hazardous
Material which is on or from the Leased Land, soil, water, ground water,
vegetation, buildings, personal property, persons, animals, or otherwise;
4817-1371-2460v.14 0022769-000022 23
439
ii) Any personal injury(including wrongful death) or property damage(real or
personal) arising out of or related to such Hazardous Material or any use of
the Leased Land;
iii) Any lawsuit brought or threatened, settlement reached,or government order
relating to such Hazardous Material or any use of the Leased Land; and/or
iv) Any violation of any laws applicable thereto; provided, however, that this
Section 19.1(d) shall apply only if the acts giving rise to the claims,
demands, penalties, fines, judgments, liabilities, settlements, damages,
costs, or expenses (1) occur prior to or during the term of this LEASE; and
(2) arise, in whole or in part, from the use of, operations on, or activities on
the Leased Land by LESSEE or LESSEE's predecessors in interest,
employees, agents, invitees, contractors, subcontractors, authorized
representatives, subtenants, or any other persons. The provisions of this
subparagraph shall be in addition to any other obligations and liabilities
LESSEE may have to CITY at law or equity and shall survive the
transactions contemplated herein and shall survive the termination of this
LEASE.
e) Operator. For all purposes, LESSEE shall be deemed the operator of any facility
on the Leased Land.
f) Hazardous Material Defined. As used in this LEASE, Hazardous Material is any
substance which is toxic, ignitable, reactive, or corrosive or which is regulated by
any Environmental Law. Hazardous Material includes any and all material or
substances which are defined as industrial waste, hazardous waste, extremely
hazardous waste, or a hazardous substance under any Environmental Law.
Notwithstanding any statutory petroleum exclusion, for the purposes of this
LEASE, the term Hazardous Material includes, without limitation, petroleum,
including crude oil or any fraction thereof, petroleum soaked absorbent material,
and other petroleum wastes.
g) Environmental Law Defined. As used in this LEASE,Environmental Laws include
any and all local, state, and federal ordinances, statutes, and regulations, as now in
force or as may be amended from time to time, relating to the protection of human
health and the environment, as well as any judgments, orders, injunctions, awards,
decrees, covenants, conditions, or other restrictions or standards relating to same.
Environmental Laws include, by way of example and not as a limitation of the
generality of the foregoing, Alaska Statutes Title 46, the Resource Conservation
and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Water Act, and the Superfund
Amendments and Reauthorization Act of 1986.
19.2 Permits and Reporting.
4817-1371-2460v.14 0022769-000022 24
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a) Permits Required by Other Governmental Agencies. LESSEE shall obtain all
permits or approvals required by any applicable law or regulation. Copies of all
such permits shall be provided to CITY prior to LESSEE commencing work under
this LEASE. LESSEE shall promptly make all reports to any federal, state, or local
government or agency required by any permit or Environmental Law, including
reports of any spill or discharge of Hazardous Material. The CITY, through the
City Manager,may order LESSEE to immediately cease any operations or activities
on the Leased Land if the same is being carried out without necessary permits, in
violation of the terms of any permit or Environmental Law, or contrary to this
LEASE.
b) Correspondence With and Reports to Environmental Agencies. LESSEE shall
immediately (the same or the next business day) provide CITY with copies of all
correspondence and notice, including copies of all reports between LESSEE and
any state, federal, or local government or agency regulating Hazardous Material
which relates to LESSEE's operations on or use of the Leased Land.
ARTICLE 20 -ESTOPPEL CERTIFICATES
Either party shall at any time and from time to time upon not less than ten (10) 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 extent thereof), the remaining term of this
LEASE and any extensions hereto, stating the dates to which the rent and other charges have been
paid in advance, and such other information as may be reasonably requested by the requesting
party and, where the requesting party is the LESSEE, include such other provisions as a
prospective assignee of the LES SEE's interest in this LEASE or a prospective leasehold mortgagee
would reasonably request.
ARTICLE 21 - CONDITIONS AND COVENANTS
All the provisions of this LEASE shall be construed to be "conditions" as well as
"covenants," as though the words specifically expressing or imparting covenants and conditions
were used in each separate provision.
ARTICLE 22 -NO WAIVER OF BREACH
No failure by either CITY or LESSEE to insist upon the strict performance by the other of
any term, covenant, 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 terms, covenants, or
conditions. No waiver of any breach shall affect or alter this LEASE, but each and every term,
covenant, and condition of this LEASE shall continue in full force and effect with respect to any
other than an existing or subsequent breach.
4817-1371-2460v.14 0022769-000022 25
441
ARTICLE 23 - TIME OF THE ESSENCE
Time is of the essence of this LEASE and of each provision.
ARTICLE 24 - COMPUTATION OF TIME
The time in which any act provided by this LEASE is to be done by shall be 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.
ARTICLE 25 - SUCCESSORS IN INTEREST
Each and all of the terms,covenants, and conditions in this LEASE shall inure to the benefit
of and shall be binding upon the successors in interest of CITY and LESSEE.
ARTICLE 26 -ENTIRE AGREEMENT
This LEASE contains the entire agreement of the parties with respect to the matters covered
by this LEASE, and no other agreement, statement, or promise made by any party which is not
contained in this LEASE shall be binding or valid.
ARTICLE 27 - GOVERNING LAW
This LEASE shall be governed by, construed, and enforced in accordance with the laws of
the State of Alaska. The terms of this LEASE are subject in all respects to the Charter and Code
of Ordinances of CITY in effect on the date of this LEASE, and as they may be hereafter amended,
including, without limitation, Chapter 7.05 of the Seward City Code.
ARTICLE 28 -PARTIAL INVALIDITY
If any 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, impaired, or invalidated.
ARTICLE 29 -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 joint venture
or of any association between 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 CITY and LESSEE other than the relationship of lessee and lessor.
ARTICLE 30 -INTERPRETATION
4817-1371-2460v.14 0022769-000022 26
442
The language in all parts of this LEASE shall in all cases be simply construed according to
its fair meaning and not for or against CITY or LESSEE as both CITY and LESSEE have had the
opportunity to seek assistance of counsel in drafting and reviewing this LEASE.
ARTICLE 31 - CAPTIONS
Captions of the articles,paragraphs, and subparagraphs 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.
ARTICLE 32 -AMENDMENT
This LEASE is not subject to amendment except in writing executed by both parties hereto.
ARTICLE 33 -NOTICES
All notices, demands, or requests from one party to another shall be delivered in person or
be sent by mail, certified or registered, postage prepaid, to the addresses stated in this Article and
to such other persons and addresses as either party may designate. Notice by mail shall be deemed
to have been given at the time of mailing.
All notices, demands, and requests from LESSEE to CITY shall be given to CITY at the
following address:
City Manager
CITY OF SEWARD
PO Box 167
Seward,Alaska 99664
All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at the
following address:
Seward Fisheries
P.O. Box 8
Seward,Alaska 99664
Attn: Plant Manager
With a copy to:
Icicle Seafoods, Inc.
c/o Cooke Aquaculture, Inc.
40 Wellington Row
Saint John,New Brunswick E2L 31-13
Attn: Chief Legal Officer
Each party shall have the right, from time to time,to designate a different address by notice
given in conformity with this Article.
4817-1371-2460v.14 0022769-000022 27
443
ARTICLE 34- FIRE PROTECTION FOR LEASED LAND
LESSEE shall at its sole cost, risk and expense provide fire detection and protection to its
operations on the Leased Land and fire prevention to industry standards for risks to adjacent
facilities such that those risks are minimized. LESSEE shall continue to provide and maintain
industry accepted standards of fire protection such that the City of Scward's ISO rating is not
degraded by reason of L 1:,:5S --E'S olicnition. The parties agree that with the rapid expansion of
technolo,�}, 'n the field of fire prcvcrLt1oiL and control LESSEE's obligations hereunder may vary
during the term of this LEASE and CITY may submit LESSEE's compliance with its obligation
hereunder to arbitration not more frequently than once each five years.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates
herein set forth.
CITY: LESSEE;
CITY OF SEWARD ICICL SEAFOODS, INC
By: By: f
Jim Hunt, City Manager John W o , Chief Operating Officer
Date: Date 07
ATTEST:
Johanna Kinney, CMC
City Clerk
STATE OF ALASKA )
ss..
TI IIRD JUDICIAL DISTRICT }
The f6l'cLo'1n,-, 1I1AI'LITIM11 SELLS ackTi0 ,,\lcdvcd before me this day of
_ . 2 018. hy J i in 11 L.nt. C its Manager of the City of Seward, Alaska, on behalf of
the City.
Notary Public in and for Alaska
My Commission Expires:
STATE OF ALASKA )
ss.
4817-1371-2460v.14 0022769-000022 78
444
THIRD TUDICIAL DISTRICT )
The foregoing instrument was acknowledged before me this 7Aday of .finer
2018, by John Woodruff, Chief Operating Officer,who executed the foregoing document on behalf
of Icicle Seafoods, Inc., a corporation, and affirmed such act to be the free and voluntary act of
such corporation for the uses and purposes mentioned in the instrument.
. NOTRR�, r + Notary Public�inan��forlasa
y o r AU �tC 4 My Commission Expires: 44/&r�
t _
4817-1371-2460v,14 0022769-000022 29
445
EXHIBIT A
Copy of Plat No. 96-28
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4817-1371-2460v.14 0022769-000022 30
446
ASSIGNMENT AND ASSUMPTION OF LKAASE
Seward, Alaska
(City of Seward—Lots 2A and 3A,Block 2,Plat No. 96-28))
This Assignment and Assumption of Lease ("Assignment") is made and entered into as of
the Contribution Date(as such term is defined in the Contribution Agreement defined below), and
is by and between Icicle Seafoods, Inc., an Alaska corporation (hereinafter "Icicle") and OBI
Seafoods, LLC, an Alaska limited liability company(hereinafter"Assignee").
RECITALS
A. Icicle and Ocean Beauty Seafoods LLC, an Alaska limited liability company
(hereinafter "OBS") formed Assignee on May 21, 2019 and have executed an Operating
Agreement for Assignee (the "Operating Agreement").
B. Icicle and OBS are the sole members of Assignee, and each of Icicle and OBS own
fifty percent(50%) of the issued and outstanding membership interests of Assignee.
C. IcicIe, OBS and Assignee are parties to that certain Contribution Agreement dated
as of substantially even date (the "Contribution Agreement") pursuant to which IcicIe and OBS
are,inter alia, contributing certain assets to Assignee and leasing to Assignee certain real property
owned by Icicle, OBS or a subsidiary of Icicle.
D. The Contribution Agreement also requires Icicle to assign and/or sublease its
interest under various leases and agreements to Assignee.
E_ Icicle and the City of Seward, a home rule municipality("Lessor"), are the parties
named in that certain Amended and Restated Lease Agreement dated July 25, 2018 ("Seward
Ground Lease"), the term of which expires on December 31, 2038 subject to two (2) extension
options of five (5) years each, a copy of which is attached hereto as Exhibit A.
F. Pursuant to Section 12.3 of the Seward Ground Lease, Icicle is not required to
obtain the Lessor's prior written consent to this Assignment because OBI is an entity in which
Icicle maintains a substantial membership interest.
ASSIGNMENT AND ASSUMPTION
For and in consideration of the consummation of the transactions specified in the
Contribution Agreement and in order to consummate such transactions as required by the
Contribution Agreement, Icicle and Assignee enter into and execute this Assignment.
1. Icicle hereby transfers,grants,conveys and assigns to Assignee all of Icicle's rights,
title and interest in, to and under the Lease.
2. Assignee hereby accepts the assignment of the Lease and shall be entitled to all of
the rights and benefits accruing to the tenant thereunder arising, and hereby fully and forever
assumes and agrees to perform any and all of Icicle's obligations, duties, undertakings and
Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A, Block 2, Plat No. 96-28)— I
4811-8968-4924v.1 0022769-000026
447
liabilities of any kind whatsoever arising under the Lease on or after the Contribution Date,as fully
and completely as if Assignee was the originally named tenant thereunder.
3. Pursuant to the provisions of the Lease, Icicle shall remain liable and responsible
to the Lessor under the Lease at all times; provided that nothing in the foregoing statement
prohibits Icicle from taking action against Assignee to recover any damages incurred by Icicle
after the Contribution Agreement arising from or in any way related to Assignee's nonperformance
under the Lease.
4. This Assignment may be terminated by the mutual agreement of the parties at any
time. In addition, this Assignment may be terminated at any time by Icicle upon the occurrence
of any of the following events: (a) Lessor declares Assignee or Icicle to be in default under the
Lease, (b)Assignee fails to make any payment due under the Lease to the party entitled to receive
such payment under the terms hereof,(c)the expiration or sooner termination of the Lease without
the renewal thereof by Icicle and the Lessor, (d) the dissolution of Assignee, (e) the transfer of
Icicle's interest in Assignee, or (f) the occurrence of an event described in the Contribution
Agreement or Operating Agreement as one that results in the termination of this or any other real
property lease, assignment or sublease between Icicle and Assignee. Upon the termination of this
Assignment for reasons other than (c), above, Icicle shall be obligated to perform all duties and
obligations, and shall have all the rights as the tenant,under the Lease.
6. This Assignment shall inure to the benefit of, and be binding upon,the respective
legal representatives, successors, and assigns of the parties hereto. Capitalized tenors not defined
herein shall have the means set forth in the Contribution Agreement.
[signatures on following page]
Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A, Block 2, Plat 96-28)-2
4811-8968.4924v.1 0022769-000026
448
DoruSign Envelope ID:2F1DOA69-D24D-4883-, ;-F1559F3G4CF7
ICICLE SEAFOODS,INC. OBI SEAFOODS, LLC
OocuSigned f - � by: 2ACDOACUSIg
ned by:
By: � �a(�t,r
Y KF3717i 1(f7FC41R By.
Name: Glenn B. Cooke Name: Mark Palmer
Title: President Title: Chief Executive Officer
Date: June 1, 2020 Date: June 1, 2020
Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A,Block 2,Plat No, 96-28)-3
449
After recording in the Seward Recording
District, Return to:
City of Seward
P.O- Box 167
Seward, AK 99664
AMENDMENT TO AMENDED AND RESTATED
LEASE AGREEMENT
This Amendment to Amended and Restated Lease Agreement ("Amendment") is
dated and effective as of the last date of signature set forth below and is by and between the
City of Seward, Alaska ("City"), a municipal corporation located in the Kenai Peninsula
Borough, State of Alaska whose mailing address is P.O. Box 167, Seward, Alaska 99664, as
the lessor,Icicle Seafoods Inc.("Icicle"),an Alaska corporation whose mailing address is P.O.
Box 79003, Seattle, WA 98119, as the original lessee, and OBI Seafoods, LLC, ("OBI", and,
collectively with City and Icicle, the "Parties"), an Alaska limited liability company, whose
address is P.O. Box 70739, Seattle, WA 98127, as the current lessee. This Amendment
amends that certain Amended and Restated Lease Agreement dated as of July 25, 2018
("Lease") made of record by a Memorandum of Amended and Restated Lease recorded on
September 6, 2018 as Reception No. 2018-000888-0, records of the Seward Recording
District, Third Judicial District, State of Alaska and re-recorded on September 7, 2018, as
Reception No. 2019-000895-0, records of the Seward Recording District, Third Judicial
District, State of Alaska.
WHEREAS, Icicle and the City entered into the Lease pursuant to which the City
leased the following legally described land ("Leased Land") to Icicle:
Lots 2A and 3A, Block 2, MARINE SUBDIVISION, BLOCK TWO REPLAT, as
shown on Plat 96-28, Seward Recording District, Third Judicial District, State of
Alaska, consisting of approximately 4.93 acres or 214,804 square feet, more or less
(Tax Parcel ID 145-240-15-LHO1);
WHEREAS, pursuant to the authority granted to Icicle in Section 12.3 of the Lease,
on or about June 1, 2020, Icicle entered into an Assignment and Assumption of Lease
("Assignment") with OBI pursuant to which all of Icicle's rights, duties and obligations set
forth in the Lease were assigned to, and assumed by, OBI;
4887-9135-9496v_7 0022769-000022
450
WHEREAS, Section 12.3 of the Lease provides that Icicle remains obligated under
the Lease notwithstanding the Assignment;
WHEREAS, on or about January 14, 2019, Icicle discovered a leak estimated to
contain nine(9)gallons of fuel("Spill")from a fitting on an approximately four hundred(400)
gallon above ground storage tank ("AST") which supplied a blend of approximately seventy
percent (70%) reclaimed used oil and thirty percent (30%) diesel fuel to two boilers located
in improvements on the Leased Land;
WHEREAS, Icicle timely reported the Spill to the State of Alaska, Department of
Environmental Conservation ("Alaska DEC") and has been working diligently with its
consultant, Shannon & Wilson, Inc. ("S&W") to investigate the Spill, clean up the Spill and
monitor the impact of the Spill on the Leased Land in accordance with all applicable legal
requirements under the oversight of the Alaska DEC;
WHEREAS, Alaska DEC has identified the Site as the Icicle Seafoods Seward
Facility, Alaska ADEC File 92332.38.051 (the "Contaminated Site");
WHEREAS, Icicle removed the AST and approximately 10 cubic yards of impacted
soil as part of its response action,but additional excavation activities were deemed not feasible
due to the restricted space and the integrity of adjacent structure foundations,and some portion
of the Spill may remain on the Leased Land under the foundation, footings and floor of
improvements located on the Leased Land(such portion of the Spill, if any exists, hereinafter
the "Residual Contamination");
WHEREAS, the Parties and Alaska DEC recognize the economic inefficiencies
created if the Alaska DEC were to require the existing improvements to be destroyed in order
to perform more investigation and possible clean-up activities to remove the Residual
Contamination on the Leased Land;
WHEREAS, in the spirit of cooperation, the Alaska DEC has required an
Environmental Covenant complying with Alaska Statute 46.04.300-46.04.390, adopting the
Uniform Environmental Covenants Act, recorded on ,
2023, as Reception No. 2023- ,records of the Seward Recording District,Third
Judicial District, State of Alaska containing institutional controls, including installation of a
concrete cap at the Contaminated Site (the"Cap"), restrictions on the use of the ground water,
inspection and reporting requirements, and limitations on uses of the Leased Land as an
alternative to requiring the improvements to be destroyed in order to determine the existence
of the Residual Contamination;
WHEREAS, after recordation of the Covenant, the Alaska DEC is expected to
designate the Contaminated Site as "Cleanup Complete with Institutional Controls"; and
2
4887-9135-9496v 7 0022769-000022
451
WHEREAS, the Parties wish to enter into this Amendment for the purposes of
evidencing their consent to the recordation of the Covenant and to allocate the responsibilities
set forth in the Covenant.
NOW,THEREFORE,for and in consideration of the mutual promises and covenants
hereinafter contained,the Parties agree as follows:
I. The City, as the owner of the Leased Land, executed the Covenant as the
Grantor, and OBI, as the current lessee, executed the Covenant as a holder. Because Icicle
remains obligated under the Lease notwithstanding the Assignment, Icicle executed the
Covenant as an additional Holder. Icicle is recording the fully executed Covenant in the
records of the Seward Recording District, Third Judicial District, State of Alaska immediately
prior to the recordation of this Amendment. icicle shall provide a conformed copy of the
recorded Covenant to the City, OBI and the Alaska DEC not more than ten (10)business days
after the Covenant is recorded.
2. If the Alaska DEC requires the State of Alaska, Department of Revenue
("Alaska DOR")to subordinate the deed of trust granted to the Alaska DOR to secure Icicle's
obligations to pay fish related taxes assessed under Title 43 of the Alaska Statutes,which deed
of trust was recorded in the Seward Recording District on December 15, 2015 as Reception
No.2015-001368-0 and amended by instrument recorded on December 17,2015 as Reception
No. 2015-001378-0, Icicle shall be responsible for obtaining such subordination or otherwise
resolving the issue of priority to the satisfaction of the Alaska DEC and the Alaska DOR. OBI
and the City hereby consent to the recordation of any documents related to resolve the priority
issue between the Alaska DEC and the Alaska DOR.
3. Except as set forth in this Section 3, Icicle is responsible for the performance
of all obligations set forth in the Covenant that are stated to be a duty of the City, OBI or both,
and Icicle shall remain responsible for such performance notwithstanding the termination of
the Lease. So long as OBI is operating the facility located on the Leased Land, OBI agrees to
(i)cooperate with Icicle and all consultants hired by Icicle to perform the obligations set forth
in the Covenant, (ii) allow Icicle and all consultants hired by Icicle to have access to the
Leased Land as necessary to perform the duties and obligations set forth in the Covenant, (iii)
post signs provided by Icicle at each end of the concrete cap setting forth the telephone number
of Icicle and a request for persons to call that number when damage to the Cap is noticed, and
(iv) inspect and annually provide Icicle with photos of the signs and Cap taken during the
fourth quarter of each calendar year. The City agrees to release Icicle from the obligations
set forth in this Amendment upon the first to occur of the following:
(a) the specific and express assumption of Icicle's obligations described in
this Amendment by a lessee other than Icicle in the form of an amendment to the Lease,
3
4887-9135-9496v.7 0022769-000022
452
a modification to the Lease, an amendment and restatement of the Lease, a new lease,
or an agreement comparable to any of the foregoing; or
(b) the Alaska DEC's agreement to terminate the Covenant evidenced by
the recordation of a termination or similar document in the official records of the
Seward Recording District, Third Judicial District, State of Alaska.
4. The Parties acknowledge and agree that if the improvements located on the
Leased Land that currently prevent Icicle from investigating and, to the extent necessary,
remediating the Residual Contamination are ever destroyed before the occurrence of the
conditions set forth in Section 3(a) or Section 3(b), above, and such destruction allows the
economically feasible investigation and, to the extent necessary, remediation of the Residual
Contamination to meet applicable cleanup levels, Icicle will obtain the permission of the City
and the current lessee of the Leased Land (which permission shall not be unreasonably
withheld, conditioned or delayed), investigate the Residual Contamination as Icicle deems
reasonable and necessary, and, if economically feasible, remediate the Residual
Contamination to meet applicable cleanup levels. Icicle shall request a termination of the
Covenant from the Alaska DEC upon completion of the foregoing activities.
5. The City hereby consents to Icicle's construction of an impermeable cap in the
form of a concrete slab on a portion of the Leased Land at a location approved by the Alaska
DEC.
6. Any and all reports any party provides to the Alaska DEC in connection with
the activities described in this Agreement shall also be provided to the other parties hereto at
substantially the same time so long as any such party is an owner, lessee or occupant of the
land.
7. The occurrence of the Spill or the existence of the Residual Contamination or
the recording of the Covenant shall not be taken into account when an appraiser calculates the
Fair Market Rental Value pursuant to the provisions of Article 3 of the Lease for purposes of
Rental Adjustments.
8. Nothing in this Amendment modifies Icicle's or OBI's obligations under
Article 7 and Article 4.2(a) and Article 19 of the Lease with respect to the Spill.
9. Except as set forth in this Amendment, the Lease, as assigned, remains in full
force and effect-
[signatures on following page]
4
4887-9135-9496v.7 0022769-000022
453
IN WITNESS WHEREOF,the parties hereby have sent their hand and seals the dates
herein set forth.
CITY OF SEWARD ATTEST:
By: By:
Norm Regis, Interim City Manager Brenda Ballou, City Clerk
Date:
STATE OF ALASKA )
ss.
THIRD JUDICIAL DISTRICT )
The foregoing instrument was acknowledged before me this day ,
2023 by Norm Regis, Interim City Manager of the City of Seward, Alaska on behalf of the
City.
Notary Public in and for Alaska
My Commission expires:
5
4887-9135-9496v.7 0022769-000022
454
ICICLE SEAFOODS, INC.
By: —(; , XAQ
Name: C.OoreA4acKinnon
Title: Chief Legal Officer
Date: May 19,2023
PROVINCE OF NEW BRUNSWICK )
ss.
The foregoing instrument was acknowledged before me this I day of ,
2023 by rojr-% L;�.�.� , the '�Cj' c _ of
Icicle Seafoods, Inc. on behalf of the corporation.
111u�lpi
Notary Public ir��, �1 LtQ�l ,nswick
Residing at: �,
My Commis 'psi
4 ti
PUBLIC
!!/11VI171/iNt�
6
4887-9135-9496v 7 0022769-000022
455
OBI SEAFOODS, LLC
Name:
Title:
Date:
STATE OF WASHINGTON )
ss.
COUNTY )
The fore oing instrument was acknowledged before me this `� day of �+ ,
2023 by -yUv\ V2o5S , the of
OBI Seafoods, LLC on behalf of the limited liability company.
Notary Public ' and for Washington
Residing at: q 00 � '-
My Commission expires: i
ASHLEY R. MILLER
NOTARY PUBLIC
STATE OF WASHINGTON I
License Number21006569
MY Commission Expires 01/15/2025
4887-9135-9496v.7 0022769-000022
456
After Recordin2 in the Seward
Recording District,Return to:
City of Seward
P.O. Box 167
Seward, AK 99664
Attention: City Attorney
TI S RI W SEC 3 SEWARD MERIDIAN
ENVIRONMENTAL COVENANT
Grantor: City of Seward
P.O. Box 167
Seward, AK 99664
Grantees: OBI Seafoods, LLC ("OBI")
/Holders P.O. Box 70739
Seattle, WA 98127
Icicle Seafood, Inc. ("Icicle")
P.O. Box 79003
Seattle, Washington 98119
Check the following.
X Original Covenant
Amendment of Covenant
RECITALS
I. This document is an environmental covenant (hereafter "Covenant") executed
pursuant to AIaska Statute (AS) 46.04.300-46,04.390, the Act adopting the Uniform
Environmental Covenants Act(hereafter, "the Act")and Title 18 of the Alaska
Administrative Code (AAC) 75.325-390, Site Cleanup Rules,
II. This Covenant subjects the Property to certain activity and use limitations and
requires the Grantor to comply with those limitations as set forth herein and in
accordance with the Act. The applicable activity and use limitations are described in
this Covenant and are necessary to protect human health, safety, welfare or the
environment and to ensure the integrity of the cleanup remedy conducted at the site.
4864-0423-9336v.6 0022769-000022
457
Environmental documents pertaining to the cleanup are available from the Alaska
Department of Environmental Conservation (ADEC or"Department") at the
Contaminated Sites Program Website at htt ://dee.alaska.2ov/s ar/eS /.
III. The Property that is the subject of this Covenant is part of all of a site commonly
known as:
ADEC Site Name: Icicle Seafoods Seward Facility
ADEC Hazard ID: 27085
Site Address: 601 Port Avenue, Seward, AK 99664
This Property is situated in Seward, Alaska, and shown on the site map attached as
Appendix A, and legally described as:
Lots 2A and 3A, Block 2, MARINE SUBDIVISION, BLOCK TWO REPLAT, as
shown on Plat 96-28, Seward Recording District, Third Judicial District, State of
Alaska, consisting of approximately 4.93 acres or 214,804 square feet, more or less
(Tax Parcel. ID 145-240-15-LHO1).
The Property has been leased to Icicle for many years, most currently under the terms
set forth in an Amended and Restated Lease Agreement dated as of July 25, 2018 (the
"Lease"). The Lease was made of record by a Memorandum of Amended and Restated
Lease recorded on September 6, 2018 as Reception No.2018-000888-0,records of the
Seward Recording District, Third Judicial District, State of Alaska and re-recorded on
September 7,2018 as Reception No.2018-000895-0,records of the Seward Recording
District, Third Judicial District, State of Alaska. Pursuant to Section 12.3 of the Lease,
on or about June 1, 2020, Icicle entered into an Assignment and Assumption of Lease
("Assignment") with OBI pursuant to which all of Icicle's rights, duties and
obligations set forth in the Lease were assigned to,and assumed by, OBI. Section 12.3
of the Lease provides that Icicle remains obligated under the Lease notwithstanding
the Assignment, and Icicle further retained all responsibilities related to the
environmental response project described in this Covenant pursuant to separate
agreements with OBI. OBI is the current occupant of the improvements located on
the Property and operates the fish processing facility located thereon.
IV. The Property is the subject of an environmental response project under the site
cleanup rules (18 AAC 75.325-18 AAC 75.390), underground storage tank
regulations (18 AAC 78), federal Comprehensive Environmental Response
Compensation and Liability Act(CERCLA) or federal Resource Conservation and
Recovery Act (RCRA). This Covenant is required because following completion of
a cleanup, residual contamination remains on the Property that is safe for some, but
not all, activities and uses. Residual contamination remaining on the Property
includes the following hazardous substances, pollutants, or contaminants:
2
4864-0425-9336v.6 0022769-OC-0022
458
Media Contaminants
Soil Gasoline Range Or
anie.r (GRO)
Diesel RCtnge Organics(DRO)
Residual RLcnge Organics (RRO)
Bentiene
Toluene
EthylbmZene
Xylenes
1,2,4-Trimethylben_Zene
1,3,5-Tramethylbenj�ene
1,2-Dibromoethane
Tetrachlomethene
Naphthalene
1-Metlylnaphthalene
2 Metbylnaphthalene
V. The Department enters into this Covenant as a "department" under the Act, with all
attendant rights of a "department" under the Act, which include but are not limited to
having a right to enforce this Covenant. This is not an ownership interest and the
rights of ADEC under the Act are not an interest in real property.
VI. For purposes of indexing in the Recorder's office Grantor-Grantee index only, City
of Seward shall be considered the Grantor, and Holders shall be considered the
Grantees.
COVENANT
City of Seward, as Grantor, hereby grants to the Holders and their respective successors and
assigns, the following covenants and declares that the Property as described in the Iegal
description above shall hereinafter be bound by, held, sold, and conveyed subject to the
following requirements set forth in paragraphs I through XVIII, below, which shall run with
the Property in perpetuity and be binding on the Grantor and all parties now or subsequently
having any right, title, or interest in the Property, or any part thereof, and any persons using
the land, as described herein.
I. Summary of Environmental Actions
Site Description and Back round The Icicle processing plant is located on the north
shoreline of the Seward boat harbor in Resurrection Bay. The complex is comprised of
multiple individual structures covered by connecting roofs. Fill and a sheet pile wall form a
bulkhead along the shoreline providing an area for a dock and paved operations yard
between the complex and boat harbor. Port Avenue runs east-west along the north side of
the complex. An aboveground storage tank(AST) spill occurred near the center of the
3
4864-0425-9336v.6 0022769-000022
459
complex in a narrow alleyway between the Old Boiler Room and Bait Holding Freezer
structures. Site plans are included as Figures 1 and 2.
A leak of approximately 9 gallons was discovered on January 14, 2019, from a fitting on an
approximately 400-gallon AST. The AST reportedly supplied a blend of 70 percent
reclaimed used oil and 30 percent diesel fuel to two boilers in the Old Boiler Room. The
400-gallon AST acted as a day tank and was supplied by two 10,000-gallon bulk ASTs.
Icicle reported the spill to ADEC on January 16, 2019.
Characterization and Cleanup Activities. The 400-gallon AST was removed from the
location of the leak on January 16, 2019, and approximately 10 cubic yards of impacted soil
were excavated using hand tools. The resulting excavation measured approximately 28 feet
long and 3 feet wide as shown on Figure 2 and extended up to approximately 3 feet below
ground surface (bgs). Additional excavation activities were deemed not feasible due to the
restricted space and the integrity of adjacent structure foundations.
A limited release investigation was conducted on January 28, 2019. The objectives of the
limited release investigation were to conduct a site reconnaissance to document the spill
response efforts, characterize the soil remaining in place at the location of the release, and
characterize the excavated soil for disposal. Analytical soil samples, collected from the
limits of the excavation, contained concentrations of gasoline range organics (GRO), diesel
range organics (DRO), residual range organics (RRO), eight volatile organic compounds
(VOCs), three polynuclear aromatic hydrocarbons (PAHs), and arsenic greater than the
applicable ADEC cleanup levels. The analytical sample collected from the south sidewall
did not contain concentrations of target analytes greater than the ADEC cleanup levels. The
extent of the contamination after the limited release investigation remained undefined both
vertically and laterally. Groundwater was not encountered during this sampling event.
On February 6, 2019, the ADEC issued a potentially responsible party (PRP) letter
requesting an interim report regarding a path forward to address the size and type of
contamination, as required under IS Alaska Administrative Code (AAC) 75.300(d). In
response to the letter, additional site characterization activities were performed to evaluate
the vertical and lateral extent of the contamination at the AST spill location. The field
activities consisted of advancing seven soil borings, installing seven groundwater
monitoring wells, collecting soil and groundwater samples, and collecting an indoor air
sample. Results of the June 2019 characterization activities showed GRO, DRO, RRO,
VOC, and PAH contamination in soil that exceeded ADEC cleanup levels in Boring MWl
and MW3. Groundwater samples were collected from the seven monitoring wells. Results of
the June 2019 groundwater sampling showed naphthalene and 1,2-dibromoethane
concentrations exceeded the ADEC cleanup levels in the sample from Monitoring Well
MW l positioned at the former AST location. The concentrations of compounds detected in
the indoor air sample did not exceed the ADEC commercial indoor air target levels.
4
4864-0425-9336Y 6 0022769-000022
460
Groundwater samples were collected from the seven wells at the site in September 2019 and
October 2020. Analytical results from the September 2019 and October 2020 sampling
events show that groundwater is not impacted with GRO, DRO, RRO, VOCs, or PAH
concentrations greater than the ADEC cleanup levels.
Contaminants of Concern. During the site characterization and cleanup activities conducted
at the site, soil and groundwater samples have been analyzed for GRO, DRO, RRO, VOCs,
and PAHs. Soil samples were also analyzed for polychlorinated biphenyls (PCBs) and
metals (arsenic, cadmium, chromium, lead, and mercury).
Analytical soil and groundwater results were compared to the ADEC Method Two
Migration to Groundwater and Human Health Cleanup Levels (CULs) for the over 40-inch
precipitation zone, established in 18 AAC 75.341(c), Table B 1, and 18 AAC 75.341(d),
Table B2 and the groundwater CULs established in 18 AAC 75.345, Table C, respectively.
The following contaminants were detected above the applicable cleanup levels and are
considered Contaminants of Concern (COCs):
• GRO (soil)
• DRO (soil)
• RRO (soil)
• Benzene (soil)
• Toluene (soil)
• Ethylbenzene (soil)
• Xylenes (soil)
• 1,2,4-Trimethylbenzene (soil)
• 1,3,5-Trimethylbenzene (soil)
• 1,2-Dibromoethane (soil and groundwater)
• Tetrachloroethene (soil)
•Naphthalene (soil and groundwater)
• 1-Methy]naphthalene (soil)
• 2-Methylnaphthalene (soil)
Arsenic was detected above the applicable cleanup level in soil. The reported concentrations
were consistent with background levels present within the Seward area; therefore, arsenic is
not considered a COC.
Extent of Contamination. Data suggests the extent of impacted soil is presently confined to
the vicinity of the former AST as shown in Figure 2. The lateral extent of the soil
contaminant plume appears to be limited to the area directly beneath the release site. Borings
positioned to the north, west, east, and south of the release site had no detected
concentrations of contaminants except for RRO at a concentration less than CULs in the
boring to the north. Headspace screening and analytical soil sample results indicate the
vertical extent of the soil contamination extends to the groundwater table; however,
groundwater in the vicinity of the release site is not impacted based on the results of two
5
4864-0425-9336v,6 0022769-000022
461
consecutive monitoring events. The maximum remaining contaminant concentrations in soil
and groundwater are shown in Table 1.
Exposure Pathways. Potential exposure pathways and descriptions of site-specific
considerations that increase or decrease the viability of each pathway at the site are provided
below. The site is located in a commercial/industrial area therefore residents arc not
considered viable current or future receptors. It is also recognized that changes in the site
use or other site conditions may affect the viability of potential exposure pathways. In
particular, the exposure pathways will need to be re-evaluated and revised as necessary if
construction occurs at the site or a change in land use occurs.
Soil—Direct contact with impacted soil comprises the incidental ingestion and
dermal absorption exposure routes. Because contaminated soil remains on site within
15 feet of the ground surface, the direct contact exposure pathway (both incidental
ingestion and dermal absorption) is considered complete for future site visitors,
trespassers, commercial/industrial workers, and construction workers. The exposure
pathway is partially mitigated by the presence of clean soil backfill and the concrete
floor slabs of the structures adjacent to the narrow alleyway.
Groundwater-ADEC guidance stipulates that ingestion of groundwater be
considered a potentially complete exposure pathway unless a groundwater use
determination is conducted in accordance with 18 AAC 75.350, and that
determination finds that the groundwater is not "a reasonably expected future source
of drinking water."A groundwater use determination has not been performed;
therefore, ingestion and inhalation of volatile compounds in groundwater are
potentially complete exposure pathways for future site visitors, trespassers,
commercial/industrial workers, and construction workers. One groundwater sample
from June 2019 contained volatile contaminant concentrations, including
naphthalene, above the cleanup levels. Contaminant concentrations did not exceed
the cleanup levels in September 2019 and October 2020.
Air - The outdoor inhalation pathway is potentially complete due to the presence of
VOCs in soil within 15 feet bgs. However, the outdoor air exposure pathway is
partially mitigated by the limited extent of the soil contaminant plume beneath the
central area of the processing plant complex. The inhalation of indoor air exposure
pathway is also potentially complete due to the presence of the VOC-impacted soil
directly beneath the processing plant complex. To evaluate the risk of this pathway, a
24-hour indoor air sample was collected from the space immediately above the
release location in September 2019. The measured concentrations of VOCs were less
than the ADEC commercial indoor air target levels.
Surface Water- The processing plant is located on the north shoreline of the Seward
boat harbor in Resurrection Bay. Groundwater beneath the site flows to the south-
southeast towards the Seward boat harbor. Groundwater samples collected from
6
4864-0425-9336v.6 0022769-000022
462
between the release location and the harbor did not contain elevated levels of
contaminants; therefore, the surface water exposure pathway is not currently
complete.
Other- Other impacted media, including sediment and biota, were not identified at
the site.
Summary. Currently complete and potentially complete exposure pathways have been
identified at the site. The direct contact soil exposure pathway is considered partially
mitigated based on the presence of a clean backfill soil cap and concrete floor slab. Further,
analytical samples of indoor air and groundwater were collected to evaluate if these
pathways were currently complete. The September 2019 results indicate that contaminants
in these pathways are below action levels. Future construction involving excavation in the
vicinity of the fuel release has the highest potential to expose the remaining contaminants to
humans and the environment.
II. Activity and Use Limitations
By acceptance and recordation of this Environmental Covenant, the Grantor, and any
successors in interest, are hereby restricted from using the Property, now or at any time in
the future, as specifically set forth below:
1. Excavation, drilling, and other intrusive activities below a depth of 2 feet
within the area of remaining soil contamination are prohibited, without prior
review and approval from ADEC.
2. The cap (2 feet of clean soil and concrete pad) shall be inspected annually
and maintained as needed to prevent contact with subsurface contaminated
soil, and/or infiltration of water and potential leaching of contaminants. Any
damage to the cap shall be reported to ADEC within ten (1.0) days after
discovery and shall be promptly repaired. Documentation of the repairs shall
be submitted to ADEC within 30 days.
3. In the event that the remaining contaminated soil becomes accessible in the
future due to the building being removed, the landowner shall notify ADEC
and characterize and, if determined necessary, cleanup the soil.
4. ADEC must be notified in advance of the subdivision or replat of the
Property associated with these activity and use limitations. This covenant
must be included as part of future property transactions and attached to
subsequent associated parcels, as determined applicable by ADEC.
5. ADEC approval is required prior to moving any soil or groundwater off site
where contamination remains above applicable cleanup levels. A "site" as
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463
defined by [18 AAC 75.990 (1 15) or 18 AAC 78.995(134)] means an area
that is contaminated, including areas contaminated by the migration of
hazardous substances from a source area, regardless of property ownership.
In the future, if soil will be excavated or groundwater will be brought to the
surface (for example to dewater in support of construction) it must be
characterized and managed following regulations applicable at that time and
ADEC approval must be obtained before moving the soil or water off the
Property.
6. Movement or use of contaminated material in a manner that results in a
violation of 18 AAC 70 water quality standards is prohibited.
7. Groundwater throughout Alaska is protected for use as a water supply for
drinking, culinary and food processing, agriculture including irrigation and
stock watering, aquaculture, and industrial use. Contaminated site cleanup
complete determinations are based on groundwater being considered a
potential drinking water source. In the event that groundwater from this site is
to be used for other purposes in the future, such as aquaculture, additional
characterization and treatment may be required to ensure the water is suitable
for its intended use.
III. Site Figures
The attached Figures I and 2 are site plans drawn to approximate scale that show the
locations of existing structures and the approximate location and extent of remaining soil
contamination which is subject to the activity and use limitations described above.
IV. Conveyance of Interest
The Grantor, when conveying any interest in any part of the Property, including but not
limited to title, easement, Ieases, or other interest, must notify ADEC at least 30 days prior
to conveyance, and must include in any conveyance document a complete copy of this
Covenant.
V. Successors
The covenants, terms, conditions, and restrictions of this instrument shall be binding upon,
and inure to the benefit of the parties hereto and their respective personal representatives,
heirs, successors, and assigns and shall continue as a servitude running in perpetuity with the
Property. The term "Grantor," wherever used herein, and any pronouns used in place
thereof, shall include the persons and/or entities named at the beginning of this document,
identified as "Grantor" and their personal representatives, heirs, successors, and assigns.
The term "Grantee," wherever used herein, and any pronouns used in place thereof, shall
include the persons and/or entities named at the beginning of this document, identified as
8
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464
"Grantee" and their personal representatives, heirs, successors, and assigns. The rights of
the Grantee under this instrument are freely assignable, subject to the notice provisions
hereof.
VI. Prior Notification for Changes-in Land Use including Proposed
Construction
The Grantor shall provide prior notification to the Department of proposed changes in use
of, applications for a building permit for activities that may affect exposure to contaminants
on, or proposals for any site work affecting the contamination on,the Property subject to this
covenant.
VII. Notices and Reporting
Icicle Seafoods, Inc. shall report to ADEC every five (5) years to document the status of
compliance with the activity and use limitations described in this covenant. Such notice and
the reports should be sent to the ADEC at:
Alaska Department of Environmental Conservation
Division of Spill Prevention and Response
Contaminated Sites Program
Attention: Institutional Controls Unit
P.Q. Box 111800
Juneau,AK 998 1 1-1 800
Or be submitted electronically to CS.Submittals@alaska.gov.
VIII. Authorizations
Grantor shall restrict authorizations, including leases, for any portion of the Property to uses
and activities consistent with this Covenant and notify all authorized users of the restrictions
on the use of the Property.
IX. Access
The Department, including its authorized employees, agents, representatives and
independent contractors, shall have the right of access to the Property granted in connection
with implementation or enforcement of this covenant.
X. Enforcement
The Department and other parties, including parties to the environmental covenant,
described in AS 46.04.335 are empowered to administer and enforce the terms of this
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465
covenant using civil authority granted to them in AS 46.03. In addition,the department may
use administrative authority granted to it in AS 46.03.
XI. Waiver of Certain Defenses
This Environmental Covenant may not be extinguished, limited, or impaired through
issuance of a tax deed, foreclosure of a tax lien, or application of the doctrine of adverse
possession, prescription, abandonment, waiver, lack of enforcement, or acquiescence, or
similar doctrine as set forth in AS 46.04.325(o.
XII. Representations and Warranties
Grantor hereby represents and warrants to the ADEC, Holder(s), Grantor(s) and any other
signatories to this Environmental Covenant that, at the time of execution of this
Environmental Covenant, that the Grantor is lawfully seized in fee simple of the Property,
that the Grantor has a good and lawful right and power to sell and convey it or any interest
therein, that the Property is free and clear of encumbrances, except those noted on Appendix
S attached hereto.
XIII. Amendment or Termination
This Covenant runs with the land and is perpetual, unless amended or terminated pursuant to
AS 46.04.330. Except as to the ADEC, all Holders and other signers waive the right to
consent to an amendment or termination of the Environmental Covenant. This
Environmental Covenant may be amended or terminated by consent only if the amendment
or tennination is signed by the ADEC and the current owner of the fee simple of the
Property, unless waived by ADEC. If Grantor no longer owns the Property at the time of
proposed amendment or termination, Grantor waives the right to consent to an amendment
or termination of the Environmental Covenant.
XIV. Controlling Law
This Environmental Covenant shall be construed according to and governed by the laws of
the State of Alaska.
XV. Liberal Construction
Any general rule of construction to the contrary notwithstanding, this instrument shall be
liberally construed in favor of the establishment of activity and use limitations that run with
the land to effect the purpose of this instrument and the policy and purpose of the
environmental response project and its authorizing legislation. If any provision of this
instrument is found to be ambiguous, an interpretation consistent with the purpose of this
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466
instrument that would render the provision valid shall be favored over any interpretation that
would render it invalid.
XVI. Joint Obligation
If there are two or more parties identified as Grantor herein, the obligations imposed by this
instrument upon them shall be joint and several.
XVII. Effective Date
This Environmental Covenant is effective on the date it is recorded with the appropriate
Alaska recorders' office.
XVIII.List of Appendices
Appendix A—Table 1: Maximum Remaining Contaminant Concentrations in Soil and
Groundwater
Appendix B Figures 1 and 2: Map of the Property and Diagram showing location of the
Contamination
Appendix C —List of Recorded Encumbrances or Limited Liability Report
[signatures on following pages]
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CITY OF SEWARD ATTEST:
By: By:
Norm Regis, Interim City Manager Brenda Ballou, City Clerk
Date:
STATE OF ALASKA )
ss.
THIRD JUDICIAL DISTRICT )
The foregoing instrument was acknowledged before me this day of
2023 by Norm Regis, Interim City Manager of the City of Seward, Alaska on behalf of the
City.
Notary Public in and for Alaska
My Commission expires:
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468
ICICLE SEAFOODS, INC.
By:
Name: C. Corey Mac 'neon
Title: Chief Legal Officer
Date: May 19,2023
PROVINCE OF NEW BRUNSWICK )
ss.
The foregoing instrument was acknowledged efore me this day of c
2023 by c , the .. C i ��� ���, of cicle
Seafoods, Inc. on behalf of the corporation.
Not Publi in a car NeTARYnai$tAT,
Residing at: 1 '
My Commission i&pjres It
''I�fj����j/�RU,�u��►3+''�
13
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469
OBI SEAFOODS, LLC
F
Name: ��r
Title:
Date:
STATE OF WASHINGTON )
I� COUNTY )
The foregoing instrument was acknowledged before me this 14 day ti ,
2023 by ,, s S the �
of OBI Seafoods, LLC on behalf of the limited liability company,
ASHLEY R. MILLER Notary Public iiy"and for Washington
NOTARY PUBLIC
STATE OF WASHINGTON Residing at: uw L
License Number 21006569 My Commission expires:
My commission Expires 01115/2025
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470
Appendix A—Table 1: Maximum Remaining Contaminant Concentrations in Soil and
Groundwater
[See following]
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471
APPENDIX A
Table ' C lIc)M)1._Vell
coil- Grnurrdwater-
Suil-NITG Soil-Llatuan Maximum Ground-tvr- Maximm u
CUL* llealth CUI.* Remaining, CUL** Remaining^^
Pa;CAr"ter f-WKg) (rnglhg) (mglKg) (mgfl.) (mgll.)
Gasoline Range Organics(G RO) 2 IAM 1.4I0J+ __ -_li l00l3
Diesel Range Organics(DRO) 230 12,50i1 19,7,no Ji 1.5 0 34,�.I
Residual Range(A�gnnics(R RO) 9-700 22,0(1() 61_. 00 I.I 0 6W,H
Volatile Organic Cumpuuuds(VOCs)
Benzene 0.022 8.P 5,06 0.0046 ND
Toluene 6.7 200 378
l,l ND
Cthylbenzene 0.13 35 4ti.5 UA15 ND
Xylency{tounl) 1.5 57 262 0.19 ND
1?4-Trhnelhylbeozene 1)(It 43 46.4 C,056 VI)
1,2-Dibmmoethane 000024 0.31 &USJ+ 1)(1011075 ND
1.3,5-Trimethylbenzene 0.66 37 14.5 0.060 NI)
4-Isupropyltutucnc - - 5.88 ND
Acelonc 3> 65.000 1.82 14 ND
lsnpropylhenzene(C'umene) 5.6 54 3.74 0.45 ,ND
n-Butylben7ene 13 20 128 1 ND
❑-Pmpylbeuzcnc 9,1 52 8.06 0.66 ND
sc't:-i3utylbenzene 42 28 2_77 2 ND
Ietmchlorocthcnc(PeL.) 0.19 68 13R 0,041 NO
Dichlorodifluorumethane 3.9 110 ND 0200, 0.00033b.!
Other VOC Analyze% Various Variorra ND Vatious ND
1'o1}rrucic;v Aromatic I lydrecarbons(PA I J i
I-Methylnaphthalene 041 68 15.6 0.01 I ND
2-Methyinaphthalenc 1.3 250 22.3 0.036 ND
Acenaphth,ne 17 3,800 0?1 1 1 r
0.530 NI)
Fluorcnc .16 1.500 0.7691 029 ND
Naphthalene 0038 20 13.3 0.0017 ND
Phcnanducuc 39 1.900 0.8721, 0,170 N!)
pwcuc 87 1900 0.273 0.120 ij
Other PAIl.Anal}tce: Various Various ND Valium PolychlorinatedBiphenyls(PCB%) n a 1.0 ND 0AM144Metals
Arsenic 0.20 7.2Z (}00052
Cadmium 91 76 <{1201Chruntiwn 100,000 100.000 43.7 22
Lead Ira4110 2?Mercun 0.36 3.1 0.OG13 000052
Notcs:
" =Snil cleanup level(CUL)is the migration togroundwatcr(M'10)and Ilurntan I lcalrh Mcthnd'iwo level listed in
-Cable 131 or B2,18 AAC 75(November 2020),for the"over 40 inches(precipitation,zone"
d° =Groundwater CUL are listed rn'hable C,18 AAC 75.345(November 2020)
-111c most rccert I,�il analytical data for target analytes from 2019 site characterization and cicamrp sampling
-The mtc<r I III oondwater analytical data from the Clctober 2020 sampling event
lug kg =Milligrae.
rng L =Milligram •,. u
J =An:th't :oacrutranot'cstnitatcd at less than the limit ofquantitatiou
J r -Anm:,,-c-r,;entration possibly hissed high
ND -AnalVte nod detected
-0.606 13 =Analytc cuucc'titrnion estimated as less than 0,606 one,L duc ro a method ur trip blank dutedion
5.06 -Analyze conceriration exceeds ibe soil MTC CUL
6 _Analyre concentration exceeds the soil M'CC and Human Health CUL
16
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472
Appcndix B —Figures 1 and 2; Map of the Property and Diagram showing location of the
Contamination
APPENDIX B,page i of 2
iApproximate Parcel I D 14524015
Property Bourx1ary
-Map adapted tram aerial Imagery provided by Gaogie Earti,Pro
reproducetl by pe—son granled try Goggie Eadh Mapping Serve
imagery dAW April I6,20££
-Abu.glound sloraga tank spoil located il5ide existing Wilding
601 Porl Avenue
Srwartl,Alaska
39Q SITE PLAN
.nvvra�xiixa.[�5 .I1I Lt. Ailgus[2C21 £C2617-005
EpI = MIA OM 6 WILSON,INC. Fig '
17
4864-0425-9336v.6 0022769-000022
473
APPENDIX B,Page 2 of 2
LEGEND
5F Apwoxii ate lccahon I Boning and 14onilonn3 Wet M W I
MW l inalalled by Shannon&wld5on,Inc.In June 2010, #6MW3
Ffe9zer
43
s} Freezer Back Dock Trurk Loading Dock_
10.GMGallon p4 Hcleing
Aw—grcund Slarage Tanks _,1 Estimated Earent
of Sod Contamination
New Bailer Raom
I _ —
MW2
Fcrmer_oceticn of I
-4B0-galon AST Ff er x2
DM Bcller Room
Approximate Lands of
0.7W4 —1 i `Bait January 2019 Excavation
Molding
Truck Loading Dock I Cannery C c 2 F <er
Engna Raom mzi
I
y MW6 I
li
rMW7
[ Cold Slarage
�MW5 Appinkimare 9-0water low dV tlicn
Shorekne
Shoot Piling
Nch
601 Port Avenue
Resu—L-Bay Seward.Alaska
DETAILED SITE PLAN
1..�. Augu6r 2021 102617-D05
wrrrsovinare ocn�e in veer ���� O�SHANNONd WILSdN.f INC.
Fig.2
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Appendix C—List of Recorded Encumbrances or Limited Liability Report
[See following]
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. + First American Limited Liability Report
ISSUED BY
First American Title Insurance Company
Limited Liability Report RE.onRT NUMBER
4064134
File No.:0229-gp64134
Ref No,:
To:Davis Wright Tremaine LLP
Attn:Angie Black
188 West Northern LTS Boulevard,Suite 1100
Anchorage,AK 99503
Limitation of Liability for Informational Reocrt
IMPORTANT-READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION
OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT,LEGAL OPINION,OPINION OF TITLE,TITLE
INSURANCE COMMITMENT OR PRELIMINARY REPORT,OR ANY FORM OF TITLE INSURANCE OR GUARANTY, THIS REPORT
IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR,AND MAY NOT BE USED OR RELIED UPON BY
ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR
WRITTEN CONSENT, FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT T-i- INFORMATION HEREIN IS
COMPLETE OR FREE FROM ERROR,AND THE INFORMATION HEREIN IS PROVIDED WITI:OUT ANY WARRANTIES OF ANY
KIND,AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE
ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN's SOLE LIABILITY FOR ANY LOSS OR DAMAGE
CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT
SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION
AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY
DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY
OF RECIPIENT'S USE OF THE INFORMATION HEREIN,
Farm 5022702(7-1-14) Page 1 of 4 Limited Liability Report(Rev.9-1-11)
20
4854-0425-9336v.6 0022769-000022
476
File No.0229-4064134
Effective Date:May 15,2023 at 8:00 am
Fee:$255.00
Title is vested in:
The City of Seward,a municipal Corporation organized under and operating pursuant to the laws of the State of Alaska
The land referred to in this Report is situated in the State of Alaska and is described as follows:
Lot 2A,Block 2,MARINA SUBDIVISION,BLOCK TWO REPLAT,according to the official plat thereof,filed under Plat
Number 9628,Records of the Seward Recording District,Third Judicial District,State of Alaska.
The title to the herein described land is subject to the matters shown as exceptions herein,which exceptions are not
necessarily shown in order of their priority.
EXCEPTIONS
1- Reservations or exceptions in patents or in acts authorizing the issuance thereof.
2. Taxes and/or Assessments due The Kenai Peninsula Borough for the year 2023,are a lien, but levy
therefore has not been made.
Tax Account No., 145240I5
Land Valuation: $1,625,500.00
Improvements: $0.00
Exemption(s): Possible exemptions.Contact The Kenai Peninsula Borough at
(907)714-2304.
NOTE:Said values have not been certified by The Kenai Peninsula Borough as of this date.
3. Taxes and/or Assessments due The Kenai Peninsula Borough for the year 2022,(Property Tax
Division 907-714-2304;Assessment Department 907-714-2230):
Tax Account No.: 14524015
Levied Amount: $0-00(Municipal)
Balance Due: $0.00
Due Date: 1st half September 15th and 2nd half November 15th Qr entire
Amount due October 15th
Land Valuation: $1,625,500.00
Improvements: $0,00
4. Rights of the public and of governmental bodies in and to that portion of the premises herein
described lying below the high and low water mark of Seward Harbor/Resurrection Bay.
5. Any prohibition or limitation on the use,occupancy or improvements of the land resulting from the
right of the public or riparian owners to use any waters which may cover the land or to use any
portion of the land which is now or may formerly have been covered by water,
6. Any adverse claim based upon the assertion that some portion of said land is tide or submerged
lands,or has been created by artificial means or has accreted to such portion so created.
Form 5022702(7-1-14) Page 2 of 4 Limited Liability Report(Rev.}1-I I)
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File No.0229-4064134
7. Any preference rights which may exist under the Alaska Land Act,terms,provisions and reservations
under the Submerged Lands Act (43 USCA 1301,67 Stat.29)and the enabling act(Public Law 85-
508,72 Stat_339).
8. Terms, provisions and reservations under the Submerged Land Act (43 U.S.C.A. Sections 1301
through 1311)and the rights of the United States of America to regulate commerce, navigation,Flood
control,fishing and production of power.
9. The terms and provisions contained in the document entitled"'Ratification of Prior Action Regarding
Real Property""
Recorded: September 2,1987
Recording No.: Book 48 Page 333
10. Lease and the terms and conditions thereof as disclosed by Memorandum of Lease.
Lessor: City of Seward,a home rule municipal corporation
Lessee: Icicle Seafoods,Inc.,an Alaska corporation
Term: Thirty(30)years from August 10,1988
Dated: August 23, 1988
Recorded: August 30, 1988
Recording Information; Book 51 Page 954
(Affects this and other property)
Memorandum of Lease Amendment recorded luly 19,1989 in Book 55 at Page 2�10.
Lease Amendment Number 2 recorded April 4,2000 in Book 100 at Page 127.
Memorandum of Amended and Restated Lease Recorded September 6,2018 as Serial Number,
2018-000888-0.
"Corrected"Memorandum of Amended and Restated Lease Recorded September 7,2018 as Serial
Number 2018-O00895-0 to Correct the Effective Date of the Memorandum of Amended and Restated
Lease Agreement.
NOTE:Defects,liens,encumbrances or other matters affecting the leasehold estate,whether or not
shown by the public records.
11. The effect of the notes which appear on the plat of said subdivision. (Copy Attached)
12. Easements as dedicated and shown on the plat of said subdivision. (Copy Attached)
13. Deed of Trust in Lieu of Cash Bond and the terms and conditions thereof.
Grantor(frustor: Icicle Seafoods,Inc.
Grantee/Beneficiary: State of Alaska Department of Revenue
Trustee: First American Title Insurance Company
Amount: $15,157,500.00
Dated: December 14,2015
Retarded: December 15,2015
Recording Information: Serial Number 2015-001368-0
(Affects this and other property)
Form 5D22702(7-1-14) Page 3 of 4 Limited Liahllity Repan(Rev.9-1-11)
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478
File No.0229-4064134
Amended Deed of Trust in Lieu of Cash Bond:
Recorded: December 17,2015
Recording Information: Serial Number 2015-001378-0
14. Unrecorded leases or periodic tenancies,if any.
FirstAmencan 77tle Insurance Company
a,-,"it"
Dustyn Fergus,Title Officer
NOTE: The attached plat,if any,is furnished solely for the purpose of assisting in locating the premises and does not
purport to show all highways,roads or easements affecting the property. No reliance should be placed upon this plat for
location or dimensions of the property and no Inability is assumed for the correctness thereof.
Farm S022702(7-1-14) Page 4 of 4 Limited liability Report(Rev.9-1-11)
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