Loading...
HomeMy WebLinkAboutRES2023-097 Army Dispatch Building Lease PH Sponsored by: Regis Public Hearing: August 28, 2023 CITY OF SEWARD,ALASKA RESOLUTION 2023-097 A RESOLUTION OF THE CITY COUNCIL OF SEWARD, ALASKA APPROVING LEASE AMENDMENT NO. 1 WITH THE UNITED STATES OF AMERICA ACTING BY AND THROUGH THE SECRETARY OF THE ARMY WHEREAS, the City of Seward leased Tract A, Marina Subdivision Seward Resort Addition,Plat No.2010-10,Seward Recording District,Third Judicial District State of Alaska("the Property")to the United States of America acting by and through the Secretary of the Army("the Government")pursuant to terms set forth in Lease No.DACA85-5-1100064 effective September 30, 2011 ("the Lease"); and WHEREAS, City of Seward Resolution 2011-061 approved the Lease; and WHEREAS,allowable uses of the Property under the terms of the Lease are limited to the construction,maintenance and operation of a marine dispatch building for purposes related to the use of Government's vessels moored at the City's Small Boat Harbor; and WHEREAS, the Government intends to cease use of vessels moored at the City's small boat harbor; and WHEREAS,the Government wishes to continue to use the Property after it ceases use of vessels moored at the City's small boat harbor for recreational purposes for military personnel specifically as a workout facility and to provide overnight lodging for military personnel on a short term basis ("the Proposed New Use"); and WHEREAS,the Proposed New Use is not permitted under the terms of the Lease and; WHEREAS,Article 34 of the Lease requires that any amendment to the Lease be in writing and signed by the City and the Lessee; and WHEREAS, the Government and the City negotiated an Amendment to the Lease which will allow the Proposed New Use and also implement city policy regarding interim rent adjustments; and WHEREAS,the City of Seward has long supported the men and women who serve in the armed forces of the United States by allowing use of City property 'to provide recreational opportunities for those who serve our country. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF SEWARD, ALASKA that: CITY OF SEWARD, ALASKA RESOLUTION 2023-097 .1 Section 1. The Seward City Council approves Lease Amendment No. 1 to the Lease. Section 2. The Seward City Council finds that the essential terms and conditions of Lease Amendment No. 1 are in the public interest. Section 3. 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 28th day of August, 2023. THE CITY OF SEWARD, ALASKA StMAVVCC L w•.� Sue McClure, Mayor AYES: Wells, Finch, Barnwell, McClure NOES: None ABSENT: DeMoss, Calhoon, Osenga ABSTAIN: None ATTEST: /�"l/ /A—..--- Kris Peck, City Clerk (City Seal) ,,,O O,.F.•�SE{��••.%% SEAL i • : ._,._ I _ �"/gte OF P\-P••s% City Council Agenda Statement Meeting Date: August 28, 2023 To: City Council Through: Norm Regis,Acting City Manager From: Brooks Chandler, City Attorney Agenda Item: Resolution 2023-097: A Resolution Of The City Council Of Seward,Alaska Approving Lease Amendment No. 1 To The Lease Agreement Between The City Of Seward And The United States Of America Acting Through The Secretary Of The Army Background and justification: The City of Seward has a long-standing relationship with the United States Army focused on allowing use of City property to provide recreational opportunities for military members. City property at the harbor has been used since 2011 as a dispatch center for vessels the Army moored at the Small Boat Harbor. The Army recently stopped using those vessels and intends to sell them this fall. The general manager of the Army's Seward Resort recently asked if the City would allow the use of the property to be converted from a dispatch center to a workout facility on the ground floor and short-term rental units on the second floor. These new uses comply with the current zoning regulations for this district but would require a lease amendment. The lease agreement was approved in 2011. The lease expires in 2031. There are 2 five-year extension options. The Lease Amendment expands allowable uses of the property to include the new proposed uses. The Amendment also incorporates the current policy for annual CPI rent adjustments. The United States accepted the proposed lease amendment before the Council for approval. The City Attorney has participated in negotiations. Approval is a policy decision for the Council. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with(citation listed): Comprehensive Plan: 3.1.1.7 Encourage additional military facilities that upgrade Seward as a Morale Welfare and Recreation(MWR)destination. Strategic Plan: Recreation and Leisure: We provide diverse, year-round, indoor and outdoor recreational, educational, and cultural opportunities and facilities for residents and visitors of all ages and socioeconomic backgrounds. Other: Certification of Funds Total amount of funds listed in this legislation: S 0 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 187 XD Not applicable Attorney Review✓ Administration Recommendation X Yes X Adopt Resolution Not applicable Other: City Attorney Signature: 188 LEASE AMENDMENT NO. 1 (Lease No. RE- DACA85-5-1100064- 2011 Lease Agreement between the City of Seward and the United States Army for Tract A, Marina Subdivision Seward Resort Addition) THE CITY OF SEWARD,ALASKA, a home rule municipal corporation, organized and existing under the laws of the State of Alaska, hereinafter referred to as "CITY", and the UNITED STATES OF AMERICA, acting by and through the Secretary of the Army, P.O. Box 6898, JBER, Alaska 99506-0898 hereinafter referred to as "GOVERNMENT",hereby agree that the Lease for Tract A,Marina Subdivision Seward Resort Addition, Plat No. 2010-10, Seward Recording District, Third Judicial District State of Alaska effective September 30, 2011, ("the Lease") is hereby amended as set forth below: 1. The first WHEREAS clause of the Lease, beginning "WHEREAS, the Government desires to lease land" is hereby amended to read as follows: WHEREAS,the GOVERNMENT desires to lease land from the CITY for the construction, maintenance and operation of a marine dispatch building, or a workout facility and nightly lodging for military personnel; and 2. Article 1.1 PREMISES is hereby amended to read as follows: 1.1 PREMISES CITY hereby Leases to GOVERNMENT the following described premises: Approximately 2,546 gross square feet, more or less, of land (the "Premises ")described as: Tract A, Marina Subdivision Seward Resort Addition, according to Plat 2010 -10 recorded in the Seward Recording District, Third Judicial District, State of Alaska, more particularly shown on Exhibits A and B, attached hereto and made a part hereof. Premises will be used for the construction, maintenance and operation of a marine dispatch building for purposes related to the use of GOVERNMENT'S vessels moored at the CITY'S Small Boat Harbor and as a NN orkout facility and nightly lodging for military personnel. 3. Article 3. RENTAL RATE- is amended by adding a new section 3.4.5 to read as follows: 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, 2024 and on July 1 of every year thereafter(each on "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 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 LEASE AMENDMENT N0.1 Page 1 192 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 CPl had not been revised or ceased to be published. 4. Article 4.1 USE OF PREMISES is amended to read as follows: 4.1 USE OF PREMISES. CITY has limited land available for Lease. Use of the Premises by GOVERNMENT for a marine dispatch building,and uses necessary and incidental thereto, including use as a workout facility and for nightly lodging for military personnel has been determined by the City Council of the City of Seward to be in the public interest. S. Article 4.2(f) is amended to read as follows: f. GOVERNMENT shall not allow any camping on the Premises. This Amendment No. I is effective as of September 30,2023. In all other respects,the Lease is to remain unchanged and in full force between the undersigned parties. IN WITNESS WHEREOF,the parties hereto have executed this document,and it is effective this,dday of ,2023. CITY: GOVERNMENT: CITY OF SEWARD, ALASKA Norm Regis mg City Manager UNITED STATES bf AMERICA Acting by and through the SECRETARY OF THE ARMY Brinda L. Hazard Date: �r 3 Q o?Q.Z , Real Estate Contracting Officer LEASE.MMMENT RO k Ape 2 U.S. Army Engineer District,Alaska Date: ATTEST: ry✓ 11�111�1�/ Kris Peck ��.�`OF SEWA,Q'•♦♦♦ City Clerk :���,.�0 S • '•. ~'� • \�Q����\G11�111,,1,1Cp rp1 1/ �ici(Cit Seal) ' ' 2 � � , Ri CA✓ %'••., rgrE pF P - NOTARY - STATE OF ALASKA THIRD JUDICIAL DISTRICTss ) /',�� O THIS IS TO CERTIFY that on this 30 day of ?4 c u ;2023,before me,the undersigned, a Notary Public in and for the State of Alaska,personally appeared Norm Regis,known to me and to me known to be the Acting City Manager for the City of Seward, Alaska,and authorized to execute documents on its behalf,and is the individual named in and who executed the foregoing document on behalf of the City of Seward for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year first hereinabove written. NOTARY PUBL IN AND FOR ALASKA My Commission Expires: ///V-gvg 6 STATE OF ALASKA } )ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this ;1& day of ,2023,before me,the undersigned, a Notary Public in and for the State of Alaska,personally appeared Brinda L.Hazard, known to me to be a Real Estate Contracting Officer for the U.S. Army Corps of Engineers,Alaska District,and authorized to execute documents on its behalf and is the individual named in and LEASE AAUNMIEW NO 1 hp 5 who executed the foregoing document on behalf of the United States of America for the uses and purposes therein set forth. WITNESS my hand and notarial sea] the day and year first hereinabove written. STATE OFALASKA NOTARY PUBLIC IN AND FOR ALASKA NOTARY PUSUC My Commission Expires: W jkM 04-Fite, Ed=L Nutter NVOmrnb*n WIMOfte Return to: Harbormaster City of Seward PO Box 167 Seward,AK 99664 LEASE AMENDMENT NO I r,u.4 LEASE AGREEMENT between CITY OF SEWARD, ALASKA and UNITED STATES OF AMERICA Acting by and through the SECRETARY OF THE ARMY City of Seward Resolution No. US Army Corps of Engineers Lease No.DACA855-1100064 Effective 30 September 2011 City of Seward: / United States of America / 1 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page TABLE OF CONTENTS ARTICLEI—LEASED LAND..............................................................................................................................I 1.1 PREMISES...................................................................................................................................................1 1.2 COVENANT OF QUIET ENJOYMENT....................................................................................................7 1.3 RESERVED. ................................................................................................................................................1 1.4 PROPERTYACCEPTED "AS-IS':............................................................................................................1 1.5 PERMITS.....................................................................................................................................................1 1.6 PLATTING...................................................................................................................................................2 ARTICLE2—LEASE TERM................................................................................................................................2 2.1 LEASE TERM..............................................................................................................................................2 2.2 RENEWAL OPTION.................................................................................................:.................................2 2.3 TERMINATION..........................................................................................................................................3 ARTICLE 3—RENTAL RATE.. .3 3.1 RENTAL.......................................................................................................................................................3 3.2 CENTRAL CONTRACTOR REGISTRATION(CCR). ............................................................................3 3.3 ELECTRONIC FUNDS TRANSFER PAYMENT....................................................................................4 3.4 RENTAL ADJUSTMENTS.........................................................................................................................5 3.5 PROCEDURE FOR RENTAL ADJUSTMENT.........................................................................................S 3.6 EFFECT OF LATE APPRAISAL BY CITY..............................................................................................6 3.7 APPRAISAL BY GOVERNMENT..............................................................................................................6 3.8 EFFECTIVE DATE OF ADJUSTED RENTAL RATE............................................................................7 3.9 PROMPT PAYMENT. ...............................................................................................................................7 ARTICLE4—USE OF PREMISES............................................................. ......................................................8 4.1 USE OF PREMISES...................................................................................................................................8 4.2 OBLIGATIONS OF GOVERNMENT........................................................................................................8 4.3 OBLIGATIONS OF CITY...........................................................................................................................9 4.4 DAMAGES..................................................................................................................................................11 4.5 NO PREFERENTIAL RIGHTS TO USE PUBLIC FACILITIES..........................................................11 4.6 ADEQUACY OF PUBLIC FACILITIES................................................................................................11 4.7 RESERVED...............................................................................................................................................11 4.8 TIME FOR PAYMENT OF UTILITIES.................................................................................................11 City of Seward: / United States of America M 46 a&7 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page ii 4.9 OTHER USES............................................................................................................................................11 4.10 MUTUALITY OF OBLIGATION. ...........................................................................................................11 ARTICLE 5-UTILITIES AND RIGHTS OF ACCESS...................................................................................12 5.1 UTILITIES.................................................................................................................................................12 5.2 WARRANTY...............................................................................................................................................12 5.3 THIRD PARTYIMPROVEMENTS.........................................................................................................12 5.4 EASEMENTS............................................................................................................................................13 ARTICLE 6-CONSTRUCTION BY GOVERNMENT....................................................................................13 6.1 IMPROVEMENTS ON PREMISES.........................................................................................................13 6.2 CITYREVIEW OF CONSTRUCTION....................................................................................................14 ARTICLE 7-RETURN OF LEASED LAND/SITE..........................................................................................14 7.1 RETURN OF PREMISES IN ORIGINAL CONDITION.......................................................................14 2 RETURN OF PREMISES INDIFFERENT CONDITION....................................................................14 ARTICLE8-FORCE MAJEURE......................................................................................................................14 ARTICLE 9-GOVERNMENT'S ACTS OF DEFAULT..................................................................................15 ARTICLE 10-REMEDIES FOR DEFAULT BY LESSEE..............................................................................16 10.1 RIGHTS OF CITY............................................................................................:........................................16 10.2 SURRENDER OFPREMISES.................................................................................................................16 10.3 NO TERMINATION OF OBLIGATION TO PERFORM.......................................................................16 10.4 RIGHTS CUMULATIVE..........................................................................................................................16 10.5 NO WAIVER OF RIGHT...................................................................................... . ..............................16 ARTICLE 11—DEFAULT BY CITY DURING THE TERM..........................................................................16 11.1.DEFAULTBYCITY CITY................................................................................................................................. 11.2 TERMINATIONFOR DEFAULT............................................................................................................17 ARTICLE 12-TITLE TO IMPROVEMENTS INSTALLED BY GOVERNMENT.....................................17 12.1 REAL PROPERTYIMPROVEMENTS...................................................................................................17 12.2 REMOVAL OF PERMANENT REAL PROPERTY IMPROVEMENTS...............:...............................17 12.3 PERSONAL PROPERTY..........................................................................................................................17 City of Seward: / United States of America�/ 198D,(o City of Seward Resolution No. Lease No.DACA85-5-1100064 Page iii ARTICLE 13-ASSIGNMENT OR SUBLEASE................................................................................................17 13.1 ASSIGNMENT OF LEASE OR SUBLEASING......................................................................................17 13.2 ASSIGNMENT OF LEASE FOR SECURITY.........................................................................................17 13.3.ASSIGNMENT TO AFFILIATE..............................................................................................................18 ARTICLE14-INSURANCE...............................................................................................................................18 ARTICLE15-CONDEMNATION.....................................................................................................................18 15.1 CLAIMS.....................................................................................................................................................18 I5.2 TERMINATION........................................................................................................................................19 ARTICLE16—DISPUTES...................................................................................................................................19 16.1 CONTRACT DISPUTES ACT...................... .......................................................................................19 16.2 CLAIMS.....................................................................................................................................................19 16.3 DATE OF DECISION.. 20 16.4 ALTERNATE DISPUTE RESOLUTION. ARBITRATION..................................................................20 16.5 INTEREST PAYMENT.............................................................................................................................21 16.6 PERFORMANCE OF LEASE..................................................................................................................21 ARTICLE 17-MAINTENANCE AND REPAIRS............................................................................................21 17.1 NORMAL MAINTENANCE.....................................................................................................................21 17.2 SAFETYISSUES.......................................................................................................................................21 17.3 COST OF REPAIRS.................................................................................................................................:22 17.4 FIRE AND CASUALTYDAMAGE..........................................................................................................22 ARTICLE 18-ENVIRONMENTAL CONCERNS...........................................................................................22 18.1 HAZARDOUS MATERIALS....................................................................................................................22 18.2 PERMITS AND REPORTING...................................................................:..............................................24 ARTICLE 19-ESTOPPEL CERTIFICATES/STATEMENT OF LEASE.....................................................24 19.1 REQUESTS FOR STATEMENTS OF LEASE.......................................................................................24 19.2 CONDITIONS FOR STATEMENTS OF LEASE...................................................................................25 ARTICLE 20-CONDITIONS AND COVENANTS..........................................................................................25 ARTICLE 21 -NO WAIVER OF BREACH.......................................................................................................25 City of Seward: / United States of America I�{ 199, City of Seward Resolution No. Lease No.DACA85-5-1100064 Page iv ARTICLE 22-TIME OF THE ESSENCE.........................................................................................................25 ARTICLE 23-COMPUTATION OF TIME......................................................................................................25 ARTICLE24—SUCCESSORS BOUND.............................................................................................................25 ARTICLE 25—INTEGRATED AGREEMENT................................................................................................26 ARTICLE26-GOVERNING LAW....................................................................................................................26 ARTICLE 27-PARTIAL INVALIDITY............................................................................................................26 ARTICLE 28-RELATIONSHIP OF PARTIES................................................................................................26 ARTICLE 29-EXAMINATION OF RECORDS..............................................................................................26 ARTICLE 30-GRATUITIES TO GOVERNMENT EMPLOYEES...............................................................26 30.1 GOVERNMENT MAY TERMINATE......................................................................................................26 30.2 PURSUIT OF REMEDIES.......................................................................................................................27 30.3 RIGHTS AND REMEDIES NOT EXCL USIVE......................................................................................27 ARTICLE 31 -OFFICIALS NOT TO BENEFIT...............................................................................................27 ARTICLE32-INTERPRETATION....................................................................................................................27 ARTICLE33-CAPTIONS...................................................................................................................................27 ARTICLE34-AMENDMENT.............................................................................................................................27 ARTICLE35-NOTICES.....................................................................................................................................27 ARTICLE 36—ATTACHMENTS TO LEASE..................................................................................................28 City of Seward: / United States of America 200 D% City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 1 LEASE AGREEMENT THIS Lease, made and entered into this date by and between the CITY OF SEWARD, a municipal corporation located in the Kenai Peninsula Borough, State of Alaska,whose address is P.O.Box 167, Seward, Alaska 99664, and whose interest in the property hereinafter described is that of owner(as certified), for itself, for its heirs, executors, administrators, successors, and assigns, hereinafter called the CITY, and the UNITED STATES OF AMERICA, acting by and through the Secretary of the Army, whose address is U.S. Army Engineer District-Alaska,Real Estate Division (CEPOA-RE), P.O.Box 6898,JBER,Alaska 99506-0898,hereinafter called the GOVERNMENT. WHEREAS, the GOVERNMENT desires to lease land from the CITY for the construction, maintenance and operation of a marine dispatch building;and WHEREAS, the Seward Planning& Zoning commission has approved disposal by lease of uplands owned by the CITY in the Seward Small Boat Harbor;and WHEREAS, the City Council of CITY has determined that lease of the Premises to the GOVERNMENT for the purposes described herein would be in the public interest; NOW THEREFORE, the parties, for the consideration of the premises and the consideration hereinafter mentioned, and the mutual benefits to be derived therefrom,hereto covenant and agree as follows: ARTICLE 1—L,F.ASED LAND Ll PREMISES. CITY hereby Leases to GOVERNMENT the following described premises: Approximately 2,546 gross square feet, more or less, of land (the "Premises") described as: Tract A, Marina Subdivision Seward Resort Addition, according to Plat 2010-10 recorded in the Seward Recording District, Third Judicial District, State of Alaska, more particularly shown on Exhibits A and B, attached hereto and made a part hereof. Premises will be used for the construction, maintenance and operation of a marine dispatch building for purposes related to the use of GOVERNMENT'S vessels moored at the CITY'S Small Boat Harbor. 1.2 COVENANT OF QUIET ENJOYMENT. Subject to the encumbrances as of the date hereof,any reasonable restrictions imposed on the Premises as part of recording of a plat by CITY, and the provisions of this Lease, CITY hereby covenants and warrants that it is unaware of any prior conflicting use of the Premises that would adversely affect GOVERNMENT'S intended use of the subject parcel. L3 RESERVED. 1.4 PROPERTYACCEPTED "AS IS". GOVERNMENT acknowledges that it has inspected the Premises 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 Premises in Article 1.1 or Exhibit A hereto. 1.5 PERMITS. GOVERNMENT, at its sole cost, shall obtain all permits necessary to the construction and operation of its facilities on the Premises. CITY may from time to time, upon request of GOVERNMENT, execute such documents, petitions, applications and authorizations as may City of Seward: / United States of America tk4 V--/ City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 2 be necessary, as the underlying fee owner, to file with an agency or public body responsible therefore, 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 GOVERNMENT permitted on the Premises by the terms of this Lease. However,nothing in this section shall be construed as requiring CITY to support or to 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, GOVERNMENT 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 sections imposes any duty or responsibility on CITY to assist GOVERNMENT 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. L 6 PLATTING. In the event CITY elects to replat, CITY agrees to include the Premises in such replat in accordance with reasonable requests by GOVERNMENT. If GOVERNMENT requests a r-eplat of the Pr-emises prior-to that time,CITY shall assist GOVERNMENT in the pmpafatien and filing of the replat, the costs of such assistance shall be borne by the GOVERNMENT. GOVERNMENT agrees to 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 Premises or the plat of CITY-owned real property adjacent to the Premises. ARTICLE 2—LEASE TERM 2.1 LEASE TERM. a. This Lease is entered into in accordance with Federal Management Regulation, Subchapter C—Real Property, Part 102-73—Real Estate Acquisition, Subpart B— Acquisition by Lease, Sections 102-73.145, 102-73.150, and 102-73.155 and in accordance with CITY'S authorization Resolution No. 2011 Upon effectiveness of the resolution and upon execution of this Lease by CITY and GOVERNMENT, the Lease Term shall commence on September 30, 2011 (the "Effective Date"), subject to termination and renewal rights as may be hereinafter set forth. The Lease Term shall run for approximately 20 years from the Effective Date, ending at midnight on September 29,2031. b. GOVERNMENT'S obligation and legal liability for performance of this Lease beyond September 30, 2012, is contingent upon the availability of annually appropriated funds. Nothing in this Lease shall constitute, or be deemed to constitute, an obligation of future appropriations by the United States or considered as implying that the Congress will appropriate additional funds. 2.2 RENEWAL OPTION. The Government shall have the right to renew this lease for an additional five(5)year period, under the same terms and conditions provided herein by providing written notice to the Lessor of the Government's renewal at least 90 days prior to the expiration of the current term,provided that this lease shall in no event extend beyond September 29,2036. City of Seward: / United States of America 20,'2� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 3 2.3 TERMINATION. GOVERNMENT may terminate this Lease in whole or in part at any time after September 30, 2012 by giving at least ninety (90) days' notice in writing to CITY; and no rental shall accrue after the effective date of termination. ARTICLE 3—RENTAL RATE 3.1 RENTAL. GOVERNMENT shall pay CITY annual rent of$2,160 (Two thousand one hundred sixty dollars and zero cents) at the rate of$540 (Five hundred forty dollars and zero cents) per quarter in arrears commencing on the Effective Date. Rent for a lesser period shall be prorated. Payment shall be made without demand by electronic funds transfer(EFT—direct deposit) payable to: City of Seward, Kenai Peninsula Borough, State of Alaska. Payments shall be made by: U.S.Army Corps of Engineers Finance Center(CEFC-AO),6830 Integrity Drive, Millington, TN 38054-5045. Billing inquires or invoices should be directed to the Finance and Accounting Officer, U.S. Army Engineer District, Alaska, P.O. Box 6898, JBER,Alaska 99506-0898. 3.2 CENTRAL CONTRACTOR REGISTRATION(CCR). a. In order to do business with the United States of America, CITY acknowledges the requirement that CITY must be registaed with Dun and Bradstreet and in the CCR database prior to award, during performance, and through final payment of any contract entered into with GOVERNMENT. To remain active, insuring prompt payment of rent, CITY is required to update, or renew, its registration annually. Rental payments cannot be processed to CITY without an active CCR. No change of ownership of the Leased premises will be recognized by GOVERNMENT until the new owner registers in the CCR system. b. CITY shall enter in the appropriate block, on the GSA Form 3518, entitled Representations and Certifications, the legal entity's name and address, followed by the DUNS or DUNS+4 number that identifies CITY's name and address exactly as stated in the Lease. The DUNS number will be used by GOVERNMENT to verify that CITY is registered in the CCR database. c. If CITY does not have a DUNS number,it shall contact D&B directly to obtain one. (1) CITY may obtain a DUNS number by calling D&B at 1-866-705-5711 or via the Internet at http://www.dnb.com. (2) CITY should be prepared to provide the following information: (i) Company legal business. (ii) Tradestyle, doing business as, or other name by which your entity is commonly recognized. (iii) Company Physical Street Address, City, State,and ZIP Code. (iv) Company Mailing Address, City, State and ZIP Code (if separate from physical). (v) Company Telephone Number. (vi) Date the company was started. City of Seward: / United States of AmericaTUA& -9n3 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 4 (vii) Number of employees at your location. (viii) Chief executive officer/key manager. (ix) Line of business(industry). (x) Company Headquarters name and address (reporting relationship within your entity). d. If CITY does not become registered in the CCR database in the time prescribed by the Government, rental payments to CITY will be delayed until such registration is completed. e. Processing time,which normally takes 48 hours,should be taken into consideration when registering. CITY is responsible for the accuracy and completeness of the data within the CCR database, and for any liability resulting from GOVERNMENT'S reliance on inaccurate or incomplete data. To remain registered in the CCR database after the initial registration, CITY is required to review and update on an annual basis from the date of initial registration or subsequent updates its information in the CCR database to ensure it is current, accurate and complete. Updating information in the CCR does not alter the terms and conditions of this Lease and is not a substitute for a properly executed contractual document. f Change of legal-business Hemp (1) If CITY has legally changed its business name, "doing business as" name, or division name(whichever is shown on the Lease),or has transferred the assets used in performing the contract, CITY shall comply with the requirements of Subpart 42.12 of the Federal Acquisition Regulations (FAR) and provide the responsible Government Contracting Officer a fully revised and initialed/signed GSA Form 3518, entitled Representations and Certifications,along with written notification of its intention to (A) change the name in the CCR database; and (B) provide the Government with sufficient documentation to verify and confirm the legally changed name or change in ownership. (2) If CITY fails to comply with the requirements of paragraph g.(1) of this clause, or fails to perform the agreement at paragraph g.(1)(B) of this clause, and, in the absence of.a properly executed novation or change-of-name agreement, the CCR information that shows CITY to be other than CITY indicated in the Lease will be considered to be incorrect information within the meaning of the "Suspension of Payment"paragraph of the electronic funds transfer(EFT)clause of this contract. (3) The Lessor shall not change the name or address for EFT payments or manual payments, as appropriate, in the CCR record to reflect an assignee for the purpose of assignment of claims. Assignees shall be separately registered in the CCR database. Information provided to the Lessor's CCR record that indicates payments, including those made by EFT, to an ultimate recipient other than that Lessor will be considered to be incorrect information. g. CITY may obtain information on registration and annual confirmation requirements via the internet at http://www.ecr.gov or by calling 1-888-227-2423,or 269-961-5757. 3.3 ELECTRONIC FUNDS TRANSFER PAYMENT. City of Seward: / United States of America City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 5 a. GOVERNMENT will make payments under this Lease by electronic funds transfer (EFT),unless otherwise waived(for hardship or tracking reasons of CITY). CITY must, no later than 30 days before the first payment: (1) Designate a financial institution for receipt of EFT payments. (2) Submit this designation to GOVERNMENT or other GOVERNMENT official, as directed. b. CITY must provide the following information: (1) The American Bankers Association 9-digit identifying number for Automated Clearing House (ACH) transfers of the financing institution receiving payment if the institution has access to the Federal Reserve Communications System. (2) Number of account to which funds is to be deposited. (3) Type of depositor account("C"for checking, "S"for savings). (4) If CITY is a new enrollee to the EFT system, CITY must complete and submit UFC-DISB-4 (Direct Deposit Authorization Form), before payment can be processed. c. If CITY, during the performance of this contract, elects to designate a different financial institution for the receipt of any payment, the appropriate GQVMNMF-Na official must receive notice of such change and the required information specified above no later than 30 days before the date such change is to become effective. d. The documents fiunishing the information required in this clause must be dated and contain the: (1) Signature, title, and telephone number of CITY or CITY's authorized representative. (2) CITY's name. (3) Lease number. e. CITY's failure to properly designate a financial institution or to provide appropriate payee bank account information may delay payments of amounts otherwise properly due. 3.4 RENTAL ADJUSTMENTS. The annual rental payment shall be adjusted on July 1,2015,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 of the Premises at the highest and best use of the Premises. The highest and best use of the Premises shall be determined without regard to GOVERNMENT'S intended or actual use of the Premises unless that use is coincidentally the highest and best use of the Premises. CITY shall complete such appraisal and deliver a copy of the appraisal report to GOVERNMENT not less than ninety(90)days before each Rental Adjustment Date. 3.5 PROCEDURE FOR RENTAL ADJUSTMENT. a. 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 Premises in accordance with this Article 3, exclusive of improvements placed thereon by City of Seward: / United States of America n(iL/ �05 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 6 GOVERNMENT but inclusive of all improvements made by CITY (including those made before or subsequent to this Lease). The appraiser's report shall be delivered to GOVERNMENT not less than ninety(90) days before the Rental Adjustment Date. The appraiser's determination of Fair Market Rental Value of the Premises 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 GOVERNMENT objects to CITY's appraiser's determination of the Fair Market Rental Value. In that case, GOVERNMENT shall give written notice to CITY of its objection within thirty(30)days of receipt of the appraiser's report, and GOVERNMENT shall then engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at GOVERNMENT'S expense to make an appraisal of the Fair Market Rental Value in accordance with this Article 3. b. If GOVERNMENT'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 GOVERNMENT'S appraisal determines a Fair Market Rental Value that varies from CITY's appraisal by more than twenty percent(20%), then,unless CITY and GOVERNMENT agree on a rate themselves, the adjusted annual rental rate of the Premises shall be determined in accordance with the Contract Disputes Act of 1978, or if both parties agree,by arbitration as provided for in Article 16 of this Lease. 3.6 EFFECT OF LATE APPRAISAL BY CITY. If for any reason, CITY does not complete the appraisal or deliver a copy of the appraisal report to GOVERNMENT ninety (90) days before the Rental Adjustment Date, CITY may proceed to complete the appraisal or deliver a copy of the appraisal report to GOVERNMENT 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 GOVERNMENT. 3.7 APPRAISAL BY GOVERNMENT. 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 GOVERNMENT by the Rental Adjustment Date, GOVERNMENT may engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at GOVERNMENT'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, GOVERNMENT must notify CITY in writing within thirty(30) days following the Rental Adjustment Date of GOVERNMENT'S election to obtain an appraisal. If CITY objects to GOVERNMENT'S appraiser's determination of the Fair Market Rental Value, CITY shall give written notice to GOVERNMENT 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 GOVERNMENT'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 GOVERNMENT'S appraisal by more than twenty percent(20%), then,unless CITY and GOVERNMENT agree on a rate themselves, the adjusted annual rental rate of the Premises shall be determined in City of Seward: / United States of America INL/ City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 7 accordance with the Contract Disputes Act of 1978, or if both parties agree,by arbitration as provided for in Article 16 of this Lease. 3.8 EFFECTIVE DATE OF ADJUSTED 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 GOVERNMENT 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 GOVERNMENT,the adjusted rental rate shall be effective beginning with the next rental payment due date immediately following the date CITY delivers the appraisal report to GOVERNMENT. Notwithstanding the above, the exercise by either CITY or GOVERNMENT of the objection procedure relating to rental adjustment described in this Article 3 shall not postpone GOVERNMENT's obligation to pay rent at the rate established by CITY. GOVERNMENT 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 GOVERNMENT, to the Rental Adjustment Date. In either case, the adjusted annual rental rate and effective date shall be memorialized by a supplemental agreement to this Lease. 3.9 PROMPT PAYMENT. a. The GOVERNMENT will make payments under the terms and conditions specified in this Article 3, and in accordance with the Prompt Payment Act (31 U.S.C. §3901). Payment.shall be considered as being made on the day a check is dated or an electronic funds transfer is made. All days referred to in this clause are calendar days, unless otherwise specified. b. Payment due date: Rent shall be paid quarterly in arrears and will be due on the first workday of each quarter, and only as provided for by the Lease. c. In the event there should be payments other than rent, the due date for making such payments shall be the later of the following two events: (1) The 30th day after the designated billing office has received a proper invoice from CITY. (2) The 30th day'after GOVERNMENT acceptance of the work or service. However,if the designated billing office fails to annotate the invoice with the actual date of receipt, the invoice payment due date shall be deemed to be the 30th day after CITY's invoice is dated, provided a proper invoice is received and there is no disagreement over quantity,quality, or CITY compliance with contract requirements. c. Invoice and inspection requirements for payments other than rent. (1) CITY shall prepare and submit an invoice to the designated billing office after completion of the work or service. A proper invoice shall include the following items: (i) Name and address of CITY. (ii) Invoice date. City of Seward: / United States of America��_/ City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 8 (iii) Lease number. (iv) GOVERNMENT's order number or other authorization. (v) Description,price,and quantity of work or services delivered. (vi) Name and address of CITY official to whom payment is to be sent(must be the same as that in the remittance address in the Lease or the order). (vii) Name (where practicable), title, phone number, and mailing address of person to be notified in the event of a defective invoice. (2) GOVERNMENT will inspect and determine the acceptability of the work performed or services delivered within 7 days after the receipt of a proper invoice or notification of completion of the work or services unless a different period is specified at the time the order is placed. If actual acceptance occurs later, for the purpose of determining the payment due date and calculation of interest, acceptance will be deemed to occur on the last day of the 7-day inspection period. If the work or service is rejected for failure to conform to the technical requirements of the contract,the 7 days will be counted beginning with receipt of a new invoice or notification. In either case, CITY is not entitled to any payment or interest lunless actual acceptance by GOVERNMENT occurs. do Interesa Pe ality. (lAn interest penalty shall be paid automatically by GOVERNMENT, without request from CITY, if payment is not made by the due date. (2) Claims involving disputes,and any interest that may be payable,will be resolved in accordance with the Contract Disputes Act of 1978(41 U.S.C. §7101 et seq).. ARTICLE 4—USE OF PREMISES 4.1 USE OF PREMISES. CITY has limited land available for Lease. Use of the Premises by GOVERNMENT for a marine dispatch building, and uses necessary and incidental thereto, has been determined by the City Council of the City of Seward to be in the public interest. 4.2 OBLIGATIONS OF GOVERNMENT. GOVERNMENT may use the Premises only in accordance with applicable CITY zoning code provisions and provided the following conditions are met: a. The Premises shall be completely cleaned and restored to its original condition upon termination of this Lease that is, the condition existing prior to any operations by GOVERNMENT under this or any prior agreement, or in better condition, subject to the exceptions to restoration stated in Article 7 of this Lease. b. GOVERNMENT agrees to prohibit the use, keeping, storage, or disposal of Hazardous Materials on the Premises except as permitted in Article 18 of this Lease. c. GOVERNMENT shall not use the Premises in any manner or construct any facilities thereon which would inhibit the use of adjacent or other lands. d. GOVERNMENT shall use the Premises only for the uses described in Section 4.1. A marine dispatch building shall be constructed and operated by GOVERNMENT on the Premises by September 30,2013. City of Seward: / United States of America ' 'NKv 20Sk City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 9 e. A site plan, attached as Exhibit B, has been submitted and approved by CITY. Any changes to this site require CITY approval,through the City Manager,prior to additional construction. GOVERNMENT's failure to obtain CITY approval of any changes to the site development plan or GOVERNMENT's failure to install the improvements according to the site development plan shall be a GOVERNMENT Act of Default under this Lease. GOVERNMENT shall pay for installation of all utilities in accordance with Article 5 of this Lease. f. GOVERNMENT shall not allow any camping or overnight lodging on the Premises. g. GOVERNMENT shall,at all times,maintain its use and operations within the boundaries of the Premises. There is no parking allowed near the Premises other than paid permit parking in designated areas. 4.3 OBLIGATIONS OF CITY. a. Subordination,Nondisturbance and Attornment. (1) CITY warrants that it holds such title to or other interest'in the premises and other property as is necessary to GOVERNMENT's access to the premises and full use and enjoyment thereof in accordance with the provisions of this Lease. GOVERNMENT agrees,in consideration of the warranties and conditions set forth in this clause, that this Lease is subject and subordinate to any and all recorded mortgages,deeds of trust and other liens now or hereafter existing or imposed upon the premises, and to any renewal, modification or extension thereof. It is the intention of the parties that this provision shall be self-operative and that no further instrument shall be required to effect the present or subsequent subordination of this Lease. GOVERNMENT agrees, however, within twenty (20) business days next following GOVERNMENT's receipt of a written demand, to execute such instruments as CITY may reasonably request to evidence further the subordination of this Lease to any existing or future mortgage, deed of trust or other security interest pertaining to the premises, and to any water, sewer or access easement necessary or desirable to serve the premises or adjoining property owned in whole or in part by CITY if such easement does not interfere with the full enjoyment of any right granted GOVERNMENT under this Lease. (2) No such subordination, to either existing or future mortgages, deeds of trust or other lien or security instrument shall operate to affect adversely any right of GOVERNMENT under this Lease so long as GOVERNMENT is not in default under this Lease. CITY will include in any future mortgage, deed of trust or other security instrument to which this Lease becomes subordinate, or in a separate nondisturbance agreement,a provision to the foregoing effect. CITY warrants that the holders of all notes or other obligations secured by existing mortgages,deeds of trust or other security instruments have consented to the provisions of this clause, and agrees to provide true copies of all such consents to GOVERNMENT promptly upon demand. (3) In the event of any sale of the premises or any portion thereof by foreclosure of the lien of any such mortgage,deed of trust or other security instrument, or the giving of a deed in lieu of foreclosure, GOVERNMENT will be deemed to have attorned to any purchaser, purchasers, transferee or transferees of the premises or any portion thereof and its or their successors and assigns, and any such purchasers and transferees will be deemed to have assumed all obligations of CITY under this City of Seward: / United States of America INIC/ .,I9 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 10 Lease, so as to establish direct privity of estate and contract between GOVERNMENT and such purchasers or transferees, with the same force, effect and relative priority in time and right as if the Lease had initially been entered into between such purchasers or transferees and GOVERNMENT; provided, fiuher, that GOVERNMENT and such purchasers or transferees shall, with reasonable promptness following any such sale or deed delivery in lieu of foreclosure,execute all such revisions to this Lease, or other writings,as shall be necessary to document the foregoing relationship. (4) None of the foregoing provisions may be deemed or construed to imply a waiver of GOVERNMENT's rights.as a sovereign. b. Change of Ownership: (1) If, during the term of this Lease, including any renewals or extensions, title to the Premises is transferred to another party either by sale, foreclosure, condemnation, assignment, or other transaction, CITY (transferor) shall promptly notify GOVERNMENT of said transfer. The following information shall accompany such notification: (i) A copy of the deed or other appropriate instrument transferring title or sufficient interest to Lease to the Premises from the transferor to the new owner. n e new owners taxidentification or social security number. (iii) The new owner's DUNS number and verification of CCR registration. (2) The foregoing information must be received not later than twenty (20) days after the effective date of transfer of title. In any instance, failure to submit the documentation required for a transfer of title will result in a suspension of rental payments until such time as all documentation is received by GOVERNMENT. (3) When the title to Premises leased to GOVERNMENT is transferred, a supplemental agreement shall be entered into by the old and new owners and GOVERNMENT to reflect such change of ownership. c. Assignment of Claims. (1) CTTY, under the Assignment of Claims Act, as amended, 31 USC §3727, may assign its rights to be paid amounts due or to become due as a result of the performance of this Lease to a bank, trust company, or other financing institution, including any Federal lending agency.The assignee under such an assignment may thereafter further assign or reassign its right under the original assignment to any type of financing institution described in the preceding sentence. (2) Any assignment or reassignment authorized under the Act and this clause shall cover all unpaid amounts payable under this Lease,and Assignment of Claims,and shall not be made to more than one party, except that an assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in the financing of this Lease. (3) Subject to the applicable law and the ordinances of the City of Seward,CITY shall not furnish or disclose to any assignee under this Lease any classified document (including this Lease) or information related to work under this Lease, that has City of Seward: / United States of America lAI U, 21S ' City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 11 been clearly designated as classified in writing, until GOVERNMENT authorizes such action in writing. 4.4 DAMAGES. a. Any liability of GOVERNMENT for property damage,personal injury, or death shall be governed by the Federal Tort Claims Act (FICA), 28 U.S.C. §2671 et seq. GOVERNMENT shall not be liable for any loss, destruction or damages to the premises beyond the control and without the fault or negligence of GOVERNMENT,including but not restricted to, acts of nature,lightning, earthquakes,floods, or severe weather and acts of war or terrorism. b. Any requirement for the payment or obligation of funds by GOVERNMENT under this Lease shall be subject to the availability of appropriated funds, and no provision herein shall be interpreted to require obligation or payment of funds in violation of the Anti- Deficiency Act, 31 U.S.C. §1341. GOVERNMENT's liability under this clause may not exceed appropriations available for such payment and nothing contained in this Lease may be considered as implying that Congress will at a later date appropriate funds sufficient to meet deficiencies. The provisions of this clause are without prejudice to any rights CITY may have to make a claim under applicable laws for any other damages than provided herein. y c- am naCF9.n-a T—E4 E RIGHTS MUSE P UBLIG RA GZ&RM&. Except as provided in Section 4.1, this Lease does not grant to GOVERNMENT any exclusive rights to use any public port facilities. GOVERNMENT 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 GOVERNMENT shall not be entitled to any exclusive use. 4.6 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 GOVERNMENT, and GOVERNMENT has inspected those facilities and has satisfied itself that the facilities are sufficient for the intended uses by GOVERNMENT. CITY makes no representations or warranties of any nature with respect to the commercial practicability or accuracy of any information provided by CITY. 4.7 RESERVED. 4.8 TIME FOR PAYMENT OF UTILITIES. GOVERNMENT will pay for utilities related to operations on the Premises including,but not limited to,water, sewer, electric, and waste disposal services,and GOVERNMENT's interest in this Lease and improvements thereon, if any, before such obligations become delinquent; provided that GOVERNMENT may, in good faith and before such delinquency, contest any such charge or assessment. 4.9 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 GOVERNMENT or who might be interested in leasing the Premises should this Lease be terminated for any reason. 4.10 MUTUALITY OF OBLIGATION. City of Seward: / United States of America 16 ZM City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 12 The obligations and covenants of CITY, and GOVERNMENT'S obligation to pay rent and other GOVERNMENT obligations and covenants, arising under or related to this Lease, are interdependent. Either party may,upon issuance of and delivery to the other party of a final decision regarding a claim against the other party, set off such claim, in whole or in part,as against any payment or payments then or thereafter due under this Lease.No set off pursuant to this clause shall constitute a breach of this Lease. ARTICLE 5-UTILITIES AND RIGHTS OF ACCESS 5.1 UTILITIES. GOVERNMENT,at GOVERNMENT's sole cost and expense,shall provide for the extension of public utilities to the Premises sufficient for GOVERNMENT's intended operations. In so doing, GOVERNMENT 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 GOVERNMENT, through consultation and review, in GOVERNMENT's planning and engineering of those improvements. All utilities will be located.and sized in accordance to the City of Seward'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 GOVERNMENT within the public right-of-ways or within public utility easements will normally be accepted and maintained by CITY or other utility compatir, and may be used to serve other eustomers of GOVERNMENT's without payment of fees or reimbursement of construction cost to GOVERNMENT. 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 over-sizing shall be borne by CITY or other party. Such costs shall be limited to the supplier's cost of the additional fittings, equipment, direct labor, and equipment costs to complete the installation.The costs of over-sizing pipe or electrical conduit shall be limited to the difference between the supplier's price to provide the size required to serve its facility and the price of the over-sized material required by CITY or utility company. GOVERNMENT shall not be entitled to any refund, rebate, or payments from CITY for any rent, investment, or costs incurred by GOVERNMENT with respect to any required permits for construction or operation of GOVERNMENT's facilities on the Premises,it being the intent of the parties that the risk of obtaining required permits be solely a risk undertaken by GOVERNMENT. 5.2 WARRANTY. CITY certifies any utilities up to the property line of the Premises to be in good serviceable and operating condition. 5.3 THIRD-PARTY IMPROVEMENTS. a. At the request of GOVERNMENT, 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 Premises in accordance with the terms of this Lease covenants, conditions and restrictions providing for the granting of uses of the Premises, 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 Premises as a commercial unit subject,however,to the conditions that follow: City of Seward: / United States of America/ 2JR) City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 13 b. All such matters shall be limited to the Lease Term and shall terminate upon termination of this Lease for whatever reason. C. 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 therefore, and the cost and expense thereof shall be borne solely by GOVERNMENT. d. At the expiration of the Lease Term (including any extended period) thud-party improvements on the Premises other than portable equipment shall become the property of CITY without the payment of any compensation to GOVERNMENT. 5.4 EASEMENTS. In order to provide for the orderly development of the Premises and adjacent lands, it may be 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 Premises. As additional consideration for this Lease, CITY and GOVERNMENT 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 dedications and similar rights do not unreasonably interfere with GOVERNMENT's operations. The costs of locating or relocating any public easements or restrictions of record including any relocation of public road, railroad, utility, 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 GOVERNMENT by CITY need not be exclusive to GOVERNMENT. ARTICLE 6-CONSTRUCTION BY GOVERNMENT 6.1 IMPROVEMENTS ONPREMISES. GOVERNMENT shall have the right to erect, maintain, alter, remodel, reconstruct, rebuild, build and/or replace buildings and other improvements on the Premises, 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 GOVERNMENT. b. The Premises shall at all times be kept free of mechanic's and material men's liens. c. GOVERNMENT 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 Premises prior to commencement of construction. d. GOVERNMENT is solely responsible for resurveying and locating improvements on the Premises in such manner so as not to violate building setback requirements or encroach into rights-of-ways or easements.On completion of any improvements, GOVERNMENT shall provide CITY a copy of an as-built survey depicting the improvements as completed.on the Premises. City of Seward: / United States of America / Z. k3 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 14 e. GOVERNMENT acknowledges that the Premises may be in a coastal high hazard area, and that construction in this area may be limited or restricted. f. CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility for any improvements constructed or effected by GOVERNMENT on the Premises. g. GOVERNMENT 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.No permanent construction is allowed in any easement. 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 GOVERNMENT's facilities on the Premises,by reviewing the design thereof prior to the commencement of construction. CITY shall have the right to comment upon that design and to require GOVERNMENT 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 or any obligation to do so in a particular way. GOVERNMENT 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. GOVERNMENT shall be solely responsible for completing all improvements according to GOVERNMENT's plans and specifications and shall bear-all fisk.,mspensib4lity, and liability for pr-eperly surveying the P-ra-MR-so-s'h-c-460M construction and to place all improvements on the Premises without encroaching upon any land, easements, rights-of-way, or setback requirements. GOVERNMENT 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 7.1 RETURN OF PREMISES IN ORIGINAL CONDITION. Subject to the provisions of Article 12.1 herein, upon termination of this Lease for any reason, GOVERNMENT shall return the Premises to CITY in the same condition as at the commencement of this Lease,subject to normal,non-abusive use. The Premises shall be free of all Hazardous Materials and contamination arising out of or resulting from or occurring during GOVERNMENT's operations or use of the Premises during this Lease. Prior to the expiration or termination of this Lease, or a reasonable time thereafter, GOVERNMENT shall restore the Premises to the same condition as that existing at the time of entering into the Lease. However, in accordance with Article 12 of this lease, GOVERNMENT shall retain the right to dispose of all permanent improvements placed on the land by sale or abandonment. 7.2 RETURN OF PREMISES INDIFFERENT CONDITION. Notwithstanding the provisions of Section 7.1 and 12.1 herein,upon termination of this Lease for any reason GOVERNMENT may return the Premises in a re-contoured or graded clean, safe, and stable condition different from its original condition provided CITY grants written approval of GOVERNMENT's plans for development of the Premises'contours,including its plans for material extraction and final grade. ARTICLE 8-FORCE MAJEURE City of Seward: / United States of America liAL/ 21 4�; City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 15 In the event either GOVERNMENT or CITY is delayed, without fault or negligence of the party, 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-GOVERNMENT'S ACTS OF DEFAULT Each of the following shall be a "GOVERNMENT 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: a. Failure by GOVERNMENT to pay promptly when due the rent required to be paid under this Lease,subject to the Prompt Payment Act as referenced in Article 3.9. b. Failure by GOVERNMENT to observe, fulfill or perform any covenants, conditions or agreements on its part to be observed or performed under 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 GOVERNMENT 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 GOVERNMENT within the applicable period and diligently pursued until the default is corrected. c. Reserved. d. GOVERNMENT's failure to comply with 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 GOVERNMENT' use of the Premises, pursuant to the regulations of such agencies, for a period of sixty (60) days after written notice specifying such non-compliance has been given by the agency charged with the enforcement of such laws, regulations or permits to GOVERNMENT; provided, however, if such non-compliance 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 GOVERNMENT within the applicable period and diligently pursued until the GOVERNMENT is in compliance. Furthermore, if GOVERNMENT shall contest such alleged non-compliance 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 GOVERNMENT. e. Failure of GOVERNMENT to construct and operate a marine dispatch building by September 30,2013. f. Failure of GOVERNMENT to maintain its operations within the Premises or to keep the public rights of way clear. g. Failure to promptly pay when due any user,wharfage,or other charges by City of Seward and associated with the Seward Small Boat Harbor. City of Seward: / United States of America �� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 16 h. Reserved. i. Use of the Premises,or any portion of the Premises,for camping or overnight lodging. ARTICLE 10-REMEDIES FOR DEFAULT BY LESSEE 10.1 RIGHTS OF CITY Whenever an act of default by GOVERNMENT shall have occurred, and any applicable period for giving notice and any opportunity to cure shall have expired, CITY shall have the following rights, to the extent that they are consistent with the Contract Disputes Act (41 U.S.C. §7101 et seq.)and Article 16 of this Lease: a. CITY may declare this Lease terminated; b. Recover all damages incurred by CITY by reason of GOVERNMENT's default or breach to the extent allowable under applicable law, including,but not limited to,the cost of recovering possession of the Premises,expenses of reletting including costs of necessary renovation and alteration of the Premises, and any real estate commissions actually paid. C. Remove or require the removal of any improvements constructed without CITY approval or constructed contrary to site development plans approved by CITY and ------- r-ecover-all-costs-and_expense_incurr_ed_b_y-CIT-Y-to-r-emoue_violating-impr-ouements._-.__._.—__..___ 10.2 SURRENDER OF PREMISES. If GOVERNMENT does not immediately surrender possession of the, Premises after termination by CITY or upon demand by CITY,CITY may forthwith enter into and upon and repossess the Premises and expel GOVERNMENT 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. 10.3 NO TERMINATION OF OBLIGATION TO PERFORM. No expiration or termination of this Lease shall expire or terminate any liability or obligation to perform of GOVERNMENT's which arose prior to the termination or expiration except insofar as otherwise agreed to in this Lease. 10.4 RIGHTS CUMULATIVE. 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. 10.5 NO WAIVER OF RIGHT. 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. ARTICLE 11-DEFAULT BY CITY DURING THE TERM City of Seward: / United States of AmericaTA�/ 211 j� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 17 11.1. DEFAULT BY CITY. Each of the following shall constitute a default by CITY under this Lease: a. Failure to perform any requirement of this Lease as and when required provided any such failure shall remain uncured for a period of thirty(30)days next following CITY's receipt of notice thereof from GOVERNMENT. b. Repeated and unexcused failure by CITY to comply with one or more requirements of this Lease shall constitute a default notwithstanding that one or all such failures shall have been timely cured pursuant to this clause. 11.2 TERMINATION FOR DEFAULT. If a defauli by CITY occurs, GOVERNMENT may, upon 30 days'notice to CITY,terminate this Lease. ARTICLE 12-TITLE TO IMPROVEMENTS INSTALLED BY GOVERNMENT 12.1 REAL PROPERTYIMPROVEMENTS. All improvements constructed by GOVERNMENT on the Premises, such as buildings, foundations, electric or other utilities, ditches, sewer lines, water lines, dikes or berms and similar improvements,shall remain the property of GOVERNMENT upon termination of this Lease for any reason,and GOVERNMENT shall retain the nght to dispose of any permanent ------ improvements by either sale or disposal.. 12.2 REMOVAL OFPERMANENTREALPROPERTYIMPROVEMENTS GOVERNMENT, upon termination of this Lease for any reason, shall not be required to remove or pay removal costs for any permanent real property improvements placed on the property by GOVERNMENT during the tern of the lease. However,nothing herein shall be interpreted to preclude any supplemental agreement for removal or payment of removal costs. 12.3 PERSONAL PROPERTY. Upon termination of this Lease for any reason other than default by GOVERNMENT, and subject to CITY's consent at such time, GOVERNMENT 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 Premises provided that GOVERNMENT shall repair any damages to the Premises caused by such removal. ARTICLE 13-ASSIGNMENT OR SUBLEASE 13.1 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 GOVERNMENT and CITY has granted the Lease in reliance upon the individual character and financial capability of GOVERNMENT. Therefore, GOVERNMENT shall not assign this Lease without CITY's prior written consent, in CITY's sole discretion. GOVERNMENT may not sublease all or any portion of the Premises or buildings or improvements located thereon. 13.2 ASSIGNMENT OF LEASE FOR SECURITY. City of Seward: / United States of America City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 18 Notwithstanding Section 12.1 above,GOVERNMENT may assign,encumber or mortgage its interest in this Lease or improvements on the Premises, by deed of trust or other security instrument, to an institutional lender ("Lender) for development of or operations on the Premises, provided that Lender shall be subject to all obligations of GOVERNMENT under the terms of this Lease upon foreclosure. CITY shall furnish Lender, at the address provided to CITY by Lender in writing,with notice of any default or breach of GOVERNMENT under this Lease. Lender shall have the right (without being required to do so and without thereby assuming the obligations of GOVERNMENT under this Lease)to make good such default or breach within thirty (30) days after written notice specifying such breach. Notwithstanding the provisions of Article 10 above, no "GOVERNMENT 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 re-let the Premises 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 Article 10.3, CITY shall not exercise any of the remedies afforded to it under Article 10 above so long as GOVERNMENT or Lender remains in possession of the Premises and satisfies ---- -- --GOVERNMENT's-obligations-under-the-terms-ofthis-Lease.—Upon4oreclosure-or-other-------- -- - assertion of its security interest, Lender may further assign, transfer, or dispose of its interests, provided that any subsequent assignee, purchaser or transferee shall remain bound by each and every term of this Lease. 13.3. ASSIGNMENT TO AFFILL4TE. Notwithstanding Section 12.1 above, GOVERNMENT may assign this Lease to an affiliate of GOVERNMENT as that term is defined by AS 10.06.990(2) or Alaska limited liability company in which GOVERNMENT maintains a substantial membership interest; provided, however,that GOVERNMENT's full faith and credit shall remain obligated under this Lease as though the assignment had not taken place. ARTICLE 14- INSURANCE Inasmuch as GOVERNMENT is a sovereign entity, it is self-insured; and as such, is not required to carry liability or any other type of commercial insurance. Any claim against the GOVERNMENT shall be submitted in accordance with the appropriate federal regulation befitting the nature of the claim. ARTICLE 15-CONDEMNATION 15.1 CLAIMS. If all or any part of the Premises is condemned for a public use by any government agency or other duly authorized entity, CITY and GOVERNMENT 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 GOVERNMENT 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 GOVERNMENT's Leasehold interest, CITY shall transmit to GOVERNMENT the amount of such specific damages so found,if any. City of Seward: / United States of America 21 E�t, City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 19 15.2 TERMINATION. If part but not all of the Premises is condemned for public use, GOVERNMENT shall make a good faith determination as to whether or not the taking of the part of the Premises designated for condemnation will prevent it from continuing to operate on. the Premises. If GOVERNMENT determines in good faith that the condemning of such part of the Premises will prevent it from continuing to operate on the Premises, GOVERNMENT 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 GOVERNMENT sends such notice to CITY, or at such other later date as GOVERNMENT 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. GOVERNMENT shall, as a condition precedent to such termination, remove all encumbrances, debts and liens to which the Premises is subject. If at the time of such partial taking for public use, GOVERNMENT determines that such partial taking will not prevent it from continuing to operate,-then GOVERNMENT and CITY shall negotiate an equitable and partial abatement of the rent beginning to be effective on the actual date when GOVERNMENT is effectively prevented from utilizing the condemned land. ARTICLE 16—DISPUTES 16.1 CONTRACT DISPUTES ACT. This Lease is subject to the Contract Disputes Act of. 1978, as amended (41 U.S.0 §7101 et.seq.). Except as provided in the Act, all disputes arising under or relating to this Lease shall be resolved under this Article 16, 16.2 CLAIMS. "Claim,"as used in this Article 16,means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain,the adjustment or interpretation of contract terms, or other relief arising under or relating to this Lease. However, a written demand or written assertion by CITY seeking the payment of money exceeding$100,000 is not a claim under the Act until certified.A voucher,invoice,or other routine request for payment that is not in dispute when submitted is not a claim under the Act. The submission may be converted to a claim under the Act, by complying with the submission and certification requirements of this Article 16, if it is disputed either as to liability or amount or is not acted upon in a reasonable time. a. A claim by CITY shall be made in writing and, unless otherwise stated in this Lease, submitted within 6 years after accrual of the claim to GOVERNMENT for a written decision.A claim by GOVERNMENT against CITY shall be subject to a written decision by GOVERNMENT. (1) CITY shall provide the certification specified in paragraph(d)(2)(iii)of this clause when submitting any claim exceeding$100,000. (2) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. (3) The certification shall state as follows: "I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief, that the amount requested accurately reflect the contract adjustment for which the City of Seward believes the United States of America is City of Seward: / United States of America_ 24� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 20 liable; and that I am duly authorized to certify the claim on behalf of the City of Seward." b. The certification may be executed by any person duly authorized to bind CITY with respect to the claim. 16.3 DATE OF DECISION. For CITY claims of $100,000 or less, GOVERNMENT must, if requested in writing by CITY, render a decision within 60 days of the request. For CITY-certified claims over $100,000, GOVERNMENT must, within 60 days, decide the claim or notify CITY of the date by which the decision will be made. GOVERNMENT's decision shall be final unless CITY appeals or files a suit as provided in the Act. 16.4 ALTERNATE DISPUTE RESOLUTION. ARBITRATION. a. If the claim by CITY is submitted to GOVERNMENT or a claim by GOVERNMENT is presented to CITY, the parties may, by mutual consent, agree to use an independent arbitrator for a settlement pursuant to the provisions of the Alaska Uniform Arbitration Act (AS 09.43.010 et. se .), 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. Notwithstanding the foregoing, arbitration shall not be applicable to claims or disputes involving a requested remedy having a value of more than Fifty Thousand Dollars and No/100s ($50,000) (exclusive of interest and costs). All demands for arbitration and all answering statements thereto that include any claim must contain a statement that the total sum or value in controversy, as alleged by the party making such demand or answering statement, is not more than Fifty Thousand Dollars and No/100s ($50,000.) The arbitrator will not have jurisdiction, power, or authority to consider or make findings (except to deny jurisdiction)concerning any claim, counterclaim, dispute or other matter in question where the amount in controversy of any such claim, counterclaim, dispute or matter is more than Fifty Thousand Dollars and No/100s ($50,000). All such claims over$50,000 will be resolved pursuant to the aforementioned Contract Disputes.Act. 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. c. Written notice of requests for arbitration of disputes may be served by either party to this Lease upon the other party. Arbitration of any dispute or claim shall be determined by a single arbitrator selected from a list of not less than five 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. City of Seward: / United States of America/ 22Q{ 6 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 21 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, 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. 16.5 INTEREST PAYMENT. GOVERNMENT shall pay interest on the amount found due and unpaid from (1) the date that GOVERNMENT receives the claim(certified,if required); or(2) the date that payment otherwise would be due,if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in FAR 33.201,interest shall be paid from the date that GOVERNMENT initially receives the claim. Simple interest on claims shall be paid at the rate,fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which GOVERNMENT receives the claim and then at the rate applicable for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim. 16.6 PERFORMANCE OF LEASE. CITY and GOVERNMENT shall proceed diligently with performance of this Lease,pending final resolution of any request for relief,claim,appeal,or action arising under the Lease. ARTICLE 17-MAINTENANCE AND REPAIRS 17.1 NORMAL MAINTENANCE. During the entire term of this Lease and every extension hereto, if any, GOVERNMENT shall, at GOVERNMENT's sole cost,risk and expense,maintain the Premises, including any improvements placed thereon by GOVERNMENT, in as good condition as received or constructed by GOVERNMENT, subject to normal, non-abusive use. CITY, at CITY's sole option and expense, may, prior to the commencement of construction by GOVERNMENT, perform maintenance and preventative work on the Premises, exclusive of improvements placed thereon by GOVERNMENT, in order to prevent erosion, mitigate damage to plants and animals,or prepare the Premises for eventual development by GOVERNMENT or others by grading,filling or contouring the Premises.Any such work performed by CITY shall be at CITY's sole expense and risk unless GOVERNMENT agrees, in advance and in writing, to share such expense and risk. GOVERNMENT shall maintain in first class condition at all times all fire,pollution and other protective equipment,if any are placed on Premises. 17.2 SAFETYISSUES. CITY may notify GOVERNMENT in writing of any deficiencies in the performance of GOVERNMENT's maintenance responsibilities as they relate to public health or safety and GOVERNMENT 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.If such deficiencies relate to the safety of GOVERNMENT'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 City of Seward: / United States of America / 22�c� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 22 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 GOVERNMENT shall pay the cost of the report and perform such work in accordance therewith at GOVERNMENT's cost, risk and expense, subject to availability of Congressional appropriation of funds. 17.3 COST OF REPAIRS. a. Should GOVERNMENT 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 GOVERNMENT may either deduct from future rental payments the cost of such repairs and report or be reimbursed therefore. b. If any facility or service provided by CITY to the Premises shall become inadequate due to changes in environmental control standards or should any facility require updating or improvement by reason of a change in GOVERNMENT's use of the Premises or operations there from, GOVERNMENT shall either construct such improvements at GOVERNMENT's own cost or reimburse CITY for such work, subject to availability of funds from Congressional appropriation. 17.4 FIRE AND CASUALTYDAMAGE. If the entire premises are destroyed by fire or other casualty, this Lease will immediately terminate. In case of partial destruction or damage,so as to render the premises untenantable, as determined by GOVERNMENT, GOVERNMENT may terminate the Lease by giving written notice to CITY within 15 calendar days of the fire or other casualty; if so terminated, no rent will accrue to CITY after such partial destruction or damage; and if not so terminated, the rent will be reduced proportionately by supplemental Lease agreement hereto effective from the date of such partial destruction or damage. Nothing in this Lease shall be construed as relieving CITY from liability for damage to or destruction of property of the United States of America caused by the willful or negligent act or omission of CITY. ARTICLE 18-ENVIRONMENTAL CONCERNS 18.1 HAZARDOUS MATERIALS. a. Condition of Site. GOVERNMENT has had full opportunity to examine the site for the presence of any Hazardous Material and accepts the Premises in "as is" condition. GOVERNMENT may elect, at GOVERNMENT's sole cost, to conduct a baseline soils test prior to execution of this Lease. b. Release of CITY. Any other provision of the Lease to the contrary notwithstanding, GOVERNMENT 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 Materials on the Premises by GOVERNMENT or arising from GOVERNMENT's operations at the Premises except for those claims City of Seward: / United States of AmericaPY / 222 -O City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 23 arising out of CITY's sole negligence or intentional misconduct. This release includes, without limitation, any and all costs incurred due to any investigation of the Premises 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. (1) GOVERNMENT shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises except for such Hazardous Material as is necessary to conduct GOVERNMENT's authorized use of the Premises. (2) Any Hazardous Material permitted on the Premises as provided in this paragraph, and all containers therefore, 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. (3) GOVERNMENT 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 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 Premises or elsewhere; or(b) condition, use or enjoyment of the Premises or any other area or personal property. (4) GOVERNMENT 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 Premises by GOVERNMENT, its authorized representatives and invitees, and GOVERNMENT shall give immediate notice to CITY of any violation or potential violation of the provisions of this subparagraph. d. Damages. CITY may file a claim pursuant to Article 16 of this Lease 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: (1) The presence, disposal, release or threatened release of any such Hazardous Material which is on or from the Premises, soil, water, ground water, vegetation, buildings,personal property,persons,animals or otherwise; (2) 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 Premises; (3) Any lawsuit brought or threatened,settlement reached or government order relating to such Hazardous Material or any use of the Premises; and/or (4) Any violation of any laws applicable thereto; provided, however, that this Section 18 .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 Premises by GOVERNMENT or GOVERNMENT's predecessors in interest, employees, agents, invitees, contractors, subcontractors, authorized representatives, subtenants or any other City of Seward: / United States of America M/Z/ 293 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 24 persons. The provisions of this subparagraph shall be in addition to any other obligations and liabilities GOVERNMENT 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,GOVERNMENT shall be deemed the operator of any facility on the Premises. 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 (42 U.S.C. §6901 et seq.), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. §9601 et seq.),and the Clean Water Act(33 U.S.C. §1251 et seq.) 18.2 PERMITS AND REPORTING. a. Permits Required by Other Governmental Agencies. GOVERNMENT 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 GOVERNMENT commencing work under this Lease. GOVERNMENT 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. CITY, through the City Manager, may order GOVERNMENT to immediately cease any operations or activities on the Premises 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. GOVERNMENT shall immediately provide CITY with copies of all correspondence and notices, including copies, of all reports between GOVERNMENT and any state, federal or local government or agency regulating Hazardous Material which relate to GOVERNMENT's operations on or use of the Premises. ARTICLE 19-ESTOPPEL CERTIFICATES/STATEMENT OF LEASE 19.1 REQUESTS FOR STATEMENTS OF LEASE Either party shall at any time and from time to time upon not less than thirty(30) days'prior written request by the other party and a prospective lender or purchaser of the Premises, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing City of Seward: / United States of America PP/Z/ 221t City of Seward Resolution No, Lease No.DACA85-5-1100064 Page 25 certifying that the same is issued subject to the conditions stated in this clause and, if such is the case, that (1) the Lease and its amendments, if any, are in full force and effect; (2) the date to which the rent and other charges have been paid in advance, if any; and (3) whether any notice of default has been issued. 19.2 CONDITIONS FOR STATEMENTS OF LEASE Statements issued by GOVERNMENT pursuant to this Article are subject to the following conditions: a. That they are based solely upon a reasonably diligent review of GOVERNMENT's Lease file as of the date of issuance; b. That GOVERNMENT shall not be held liable because of any defect in or condition of the Premises; c. That GOVERNMENT does not warrant or represent that the Premises comply with applicable Federal, State and local law; d. That CITY, and each prospective lender and purchaser are deemed to have constructive notice of such facts as would be ascertainable by reasonable pre-purchase and pre- commitment inspection of the Premises by inquiry to appropriate Federal, State and local Government officials; and e. That such statement shall be certified by the appropriate Contracting Officer having authority to so do. ARTICLE 20-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 21-NO WAIVER OF BREACH No failure by either CITY or GOVERNMENT 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 and no acceptance of full or partial rent or other performance by either party during the continuance of any such breach; 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 then existing or subsequent breach. ARTICLE 22-TIME OF THE ESSENCE Time is of the essence of this Lease and of each provision. ARTICLE 23-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 24—SUCCESSORS BOUND City of Seward: / United States of America 7�Y 1(4 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 26 Each and all of the terms, covenants and conditions in this Lease shall bind, and inure to the benefit of, CITY and GOVERNMENT and their respective heirs, executors, administrators, successors,and assigns. ARTICLE 25—INTEGRATED AGREEMENT THIS LEASE,UPON EXECUTION,CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE MATTERS COVERED BY THIS LEASE;AND NO PRIOR WRITTEN OR ORAL AGREEMENT,EXPRESS OR E%IPLIED,SHALL BE ADMISSIBLE TO CONTRADICT THE PROVISIONS OF THE LEASE.ARTICLE 26- GOVERNING LAW This Lease shall be governed by, construed and enforced in accordance with the laws and regulations of the United States of America, the State of Alaska, and the City of Seward. In the event of any conflict between said laws and regulations,the higher authority shall prevail. ARTICLE 27-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 28-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 GOVERNMENT; 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 GOVERNMENT other than the relationship of lessee and lessor. ARTICLE 29-EXAMINATION OF RECORDS CITY agrees that any duly authorized GOVERNMENT representative shall have the right to have access to and to examine any directly pertinent books, documents, papers, and records of CITY involving transactions related to this Lease, in connection with an official audit of this Lease,until the expiration of three(3)years after final payment of the agreed rental.This Article 29 shall not be construed as obligating CITY to maintain any books, documents, papers or records, and CITY shall not be subject to any penalty or act of default as a result of disposing or destroying CITY books, documents, papers or records pursuant to CITY's record retention policies. ARTICLE 30-GRATUITIES TO GOVERNMENT EMPLOYEES 30.1 .GOVERNMENT MAY TERMINATE. The GOVERNMENT may,by written notice to the CITY,terminate the right of the CITY to proceed under this Lease if it is found, after notice and hearing,by the Secretary of the Army or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise)were offered or given by the CITY, or any agency or representative of the CITY, to any officer or employee of the GOVERNMENT with a view toward securing a Lease or securing favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the performing, of such Lease,provided, that the existence of City of Seward: / United States of America 22.&L\ City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 27 facts upon which the Secretary of the Army or his duly authorized representative makes such findings shall be in issue and may be reviewed in any competent court. 30.2 PURSUIT OF REMEDIES. In the event this Lease is terminated as provided in paragraph 30.1 hereof, GOVERNMENT shall be entitled to pursue the same remedies against CITY as it could pursue in the event of a breach of the Lease by CITY. 30.3 RIGHTS AND REMEDIES NOT EXCL USIVE. The rights and remedies of GOVERNMENT provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Lease. ARTICLE 31-OFFICIALS NOT TO BENEFIT No member of or delegate to Congress, or Resident Commissioner shall be admitted to any share or part of this Lease,or to any benefit that may arise there from; but this provision shall not be construed to extend to this Lease if made with a corporation for its general benefit. ARTICLE 32-INTERPRETATION 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 GOVERNMENT as both CITY and GOVERNMENT have had the opportunity to seek assistance of counsel in drafting and reviewing this Lease. ARTICLE 33-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 34-AMENDMENT This Lease is subject to amendment in writing,agreed to and executed by both parties hereto. ARTICLE 35-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 the day after the time of mailing. All notices, demands and requests from GOVERNMENT to CITY shall be given to CITY at the following address: City Manager CITY OF SEWARD P.O.Box 167 Seward,Alaska 99664 All notices, demands or requests from CITY to GOVERNMENT shall be given to GOVERNMENT at the following address: City of Seward: / United States of America1`(� 2 T City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 28 Department of the Army U.S.Army Engineer District,Alaska Real Estate Division(CEPOA-RE) P.O.Box 6898 JBER,Alaska 99506-0898 Each party shall have the right, from time to time,to designate a different address by notice given in conformity with this Article. ARTICLE 36—ATTACHMENTS TO LEASE The following documents are attached and hereby made part of the Lease. Exhibit A: Plat 2010-10 Exhibit B: Site Plan City of Seward: / United States of America / 228S 6 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 29 IN WITNESS WHEREOF,the parties hereto have executed this Lease the dates herein set forth. CITY: GOVERNMENT: -Z" CITY OF SEWARD UNITED STATES OF AME CA Phillip Oates Acting by and through the City Manager SECRETARY OF THE ARMY Thomas M.Kretzschmar Date: Chief of Real Estate Real Estate Contracting Officer U.S.Army Engineer District,Alaska Date: ATTEST: Johanna Kinney, CMC City Clerk City of Seward: / United States of America (7 229s� City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 30 STATE OF ALASKA ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this day of 2011,before me,the undersigned,allotary Public in and for the State of Alaska,personally appeared Phillip Oates,known to me and to me known to be the City Manager for the City of Seward, Alaska, and authorized to execute documents on its behalf, and is the individual named in and who executed the foregoing document on behalf of the City of Seward for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year first hereinabove written. Notary Public in and for Alaska My Commission Expires: STATE OF ALASKA ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this 2nd day of August,2011,before me,the undersigned,a Notary Public in and for the State of Alaska, personally appeared Thomas M. Kretzschmar, known to me and to me known to be the Chief of Real Estate of the US Army Corps of Engineers,Alaska District,and authorized to execute documents on its behalf, and is the individual named in and who executed the foregoing document on behalf of the United State of America for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year fast hereinabove written. $��Q�\ �:•. ! btiyi� Oubwrib d and sworA to before rna ''NOTARY Not Public in and for Alaska r i �' ;PUBLIC:* mry My Commission Expires: Q �:•.. :� r� i OF NV 'S � tAy Corrxnlssfon tJ Or*tc City of Seward: / United States of America l lb 230 0 City of Seward Resolution No. Lease No.DACA85-5-1100064 Page 31 EXHIBIT A PLAT 2010-10 SSDW'tO'W 47.00' LEGEND of Found J 1/4'Al.Cap Monument = - B Found Reba k At Cap LS 5152 x 42 C a u TRACT A • Found Reba 8•ACop LS 7569 S s,om I 0 Found 5/B'Roba '�' 2546 Sq. Ft u Set 5/6A24-Reba d•Po.�LS 7569 �' S�$ 164.69'Measured 77ih Surrey (164.7Y) Record Data Plot 96-28 8 I I ——— c�Jr.42' to, 00' 27.00' ��9ODo'P1' N89W""r —a—an' 6RG�N4456 071� DETAIL 1'=20' I LOT JA I I ' MANNA SURD 96SJ4' (161.7Y)164.69_ v 58938"14'M' 1T50.02' F u sx3Q (Be95949•e 115a0n I A es elm OF D NI I� gi 12 I kg L I-J " LOT 4A i vIN MARWA SUBO se BLOCK 2 REPLAY i Io Pub/k Paftg and Access famment i Is I Seward Boat Harbor i N I t I I /* (S8959.15'W 13446') S693J'0S-W 1J4.55' CT A� I ZOW ATS 174 I oetan� ' ,.•` eo°va°DARYYF F I 0AM,OMSn 3265 A DA7FD MAY/9,1931 -T_ APPRaWA AY ABOL£ I IM M.LLW PM ALQAA 710E WA FOR MAWA 945 5M I PLAT APPROVAL MALW m 1011211884 7hb plat Was goprowd by the Kanol Pen81sulo Borough Planning I Cocunboran of t(re meefbg of A—V, , I-Xi 7-o0-7 Resurrection Bay City of Seward: / United States of America �L/ 2.1—Ic I ZI L^' Conc, R=p Boordwolk CIA ------------- C3 r ---------—----- (0------ CU 7 9 Gravel poolly Float am 4 ----------- Shed < '800 Veto, ®L7 56 5 AWZ"g it Proposed Lease LEGEND 2546 Sq Ft Found Rebpr & Al. Cap LS515;? A Prop osed PO 54 se ( round Rebbr & Pl, Cap LS7569 Found Rebor Q11 Existing Property Lines' L=31A2' ;L 27.00 R20,00' proposed t Oose 80undories Fire Hy'droli t v�- cruv'�/ Rood 2 Light Pole ! Conc.I m utility Pole, M Telecomm Pedestol Water Valve sign Electric Transforn7er PPOTO KEY PLAN 232 5' SANITARY SEWER Conc Romp 1-5 GRAVITY LINE FROM NEW �b SEWER RETAINAGE Board STRUCTURE. CONNECT TO t 3, EXISTINGS.S. MANHOLE ON NORTH SIDE OF PUBLIC TOILET FACILITY / --EXISTING 61 BUILDING. (APPROX, 300' o D.I. WATER Pn co DISTANCE NORTH) SERVICE Z,o (ALTERNATE OPTION: FORCE MAIN FULL ---------- uo DISTANCE) 2' FORCED shed 3' SANITARY �,fetes -5- )6 E SEWER LINE SETBACK 200 NEW WATER, 9*55'18"(Vf 4 7,00' Li! Z: AMP LINE FROM EXISTING CAP posed Le se I Q, 11 uj 4, LEGEND 03 546 S Found Rebor �31 AL Cap LS5152 WAMT METER Found mebt7r & Pl. Cop LS7569 40Oi i=Azw of0'-0' BUILDING Found Rebor ) SETBACK Fxisting Property Lines =31.4 2' 27 00' R=20,00 UNDERGROUND Proposed Lease f3vundories TANK 4 GRINDER PUMP 9 178:11E Fire Hydron t orovcf Root'! 0'-0' BUILDING Bollards SETBACK Lioht Pole Conc. Utility Pole 0 IT, 'relecomm pedestol O Sign 1!�J Electric Transformer PROPOSED BUILDING; AND UTILITY EXTENSIONS 233