HomeMy WebLinkAboutRes1994-064
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Sponsored by: Jones
CITY OF SEWARD, ALASKA
RESOLUTION NO. 94-064
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, APPROVING A TWENTY-YEAR LEASE
OF CITY-OWNED PROPERTY WCATED ON THE EAST SIDE
OF THE SMALL BOAT HARBOR TO ROBERT H. FERGUSON, ill
WHEREAS, Robert H. Ferguson, ill, has submitted a proposal to the city to lease 1800
square feet of city property located in the tidelands within the northeast corner of the Seward
Small Boat Harbor between the tidal grid and the shoreline; and
WHEREAS, the City Council has determined that a lease of this property would be in
the public interest; and
WHEREAS, a public hearing on the proposed lease was duly advertised and conducted
in accordance with standard city lease procedures;
NOW, TIlEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. A lease agreement between the city of Seward and Robert H. Ferguson, ill,
for development of an 1800 square foot parcel of city property located in the tidelands at the
northeast corner of the Seward Small Boat Harbor is hereby APPROVED.
Section 2. A copy of the lease agreement is attached and incOlporated herein by
reference.
Section 3. This resolution shall take effect 30 days after passage and posting as required
by law.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this
23rd day of May, 1994.
THE CITY OF SEWARD, ALASKA
f~OIJ~ L~
Dave W. Crane, Mayor
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 94-064
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Anderson, Bencardino, O'Brien, Sieminski
Crane, Darling, Krasnansky
None
None
APPROVED AS TO FORM:
Wohlforth, Argetsinger, Johnson & Brecht,
Attorneys for the city of Seward, Alaska
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City Attorney
(City Seal)
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LEASE AGREEMENT
BETWEEN
CITY OF SEWARD
AND
ROBERT H. FERGUSON, III
Lease Agreement: City, Ferguson
May 9,1994
TABLE OF CONTENTS
ARTICLE 1. -- LEASED LAND ..........................................
1 .1 Description of Leased Land ...................................
1.2 Covenant of Quiet Enjoyment; Warranty of Title. . . . . . . . . . . . . . . . . . . . . 1
1.3 Survey of Leased Land ...................................... 2
1.4 Permits ................................................. 2
1.5 Platting ................................................. 2
ARTICLE 2. -- LEASE TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Initial Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Interim Right to Possession ................................... 2
2.3 Lease Subject to Referendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Options to Extend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3. -- RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Initial Rental Rate .......................................... 3
3.2 Rental Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Procedure for Rental Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.4 Late Payment Charge ....................................... 4
ARTICLE 4. -- USE OF LEASED LAND .................................... 4
4.1 Use of Leased Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 No Preferential Rights to Use Public Facilities. . . . . . . . . . . . . . . . . . . . . . . 4
4.3 Adequacy of Public Facilities .................................. 4
4.4 Tariffs and Other Service Fees ................................. 5
4.5 Time for Payment of Utilities and Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.6 Other Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.7 Use of Public Docks and Port Facilities ........................... 5
ARTICLE 5. -- UTILITIES AND RIGHTS OF ACCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Utilities ................................................. 5
5.2 Third Party Improvements .................................... 6
5.3 Easements ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 6. -- CONSTRUCTION BY LESSEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.1 Improvements on Leased Land ................................. 7
6.2 City Review of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 7. -- RETURN OF LEASED LAND/SITE CONDITIONS . . . . . . . . . . . . . . . . . . . . 8
7.1 Return of Leased Land in Original Condition . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2 Return of Leased Land in Different Condition ....................... 8
ARTICLE 8. -- FORCE MAJEURE ........................................ 8
ARTICLE 9. -- CITY ACTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Lease Agreement: City - Ferguson
May 9. 1994
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ARTICLE 10. -- REMEDIES FOR CITY'S ACTS OF DEFAULT ..................... 9
ARTICLE 11. -- LESSEE'S ACTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 12. -- REMEDIES FOR DEFAULT BY LESSEE ........................ 11
ARTICLE 13. -- TITLE TO IMPROVEMENTS INSTALLED BY LESSEE. . . . . . . . . . . . . . . 12
13.1 Real Property Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13.2 Personal Property ........................................ 12
ARTICLE 14. -- SUBLEASE OR ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14.1 Assignment of Lease or Subleasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14.2 Assignment of Lease for Security ...... . . . . . . . . . . . . . . . . . . . . . . . 12
14.3 Assignment to Affiliate .................................... 13
ARTICLE 15. -- LESSEE'S DUTY TO DEFEND/INDEMNIFY. . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 16. -- CITY'S DUTY TO DEFEND/INDEMNIFY. . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 17. -- INSURANCE .......................................... 13
ARTICLE 18. -- CONDEMNATION ...................................... 14
ARTICLE 19. -- ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 20. -- MAINTENANCE AND REPAIRS ............................. 15
20.1 Normal Maintenance ...................................... 15
20.2 Safety Issues ........................................... 16
20.3 Cost of Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 21. -- ENVIRONMENTAL CONCERNS ............................. 17
21 .1 Hazardous Materials ...................................... 17
21 .2 Permits and Reporting ..................................... 18
ARTICLE 22. -- ESTOPPEL CERTIFICATES ................................ 19
ARTICLE 23. -- CONDITIONS AND COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 24. -- NO WAIVER OF BREACH ........ . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 25. -- TIME OF THE ESSENCE .................................. 19
ARTICLE 26. -- COMPUTATION OF TIME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 27. -- SUCCESSORS IN INTEREST ............................... 20
ARTICLE 28. -- ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Lease Agreement: City - Ferguson
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May g, 1994
ARTICLE 29. -- GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 30. -- PARTIAL INVALIDITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 31. -- RELATIONSHIP OF PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE32.--INTERPRETATION ......................................20
ARTICLE 33. -- NUMBER AND GENDER .................................. 21
ARTICLE 34. -- MANDATORY AND PERMISSIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 35. n CAPTIONS ........................................... 21
ARTICLE 36. -- AMENDMENT ......................................... 21
ARTICLE 37. -- NOTICES ............................................ 21
ARTICLE 38. -- FIRE PROTECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Lease Agreement: City - Ferguson
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May 9. 1994
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "LEASE") is made by and between the CITY OF
SEWARD (the "CITY"). a municipal corporation located in the Kenai Peninsula Borough, State
of Alaska, and ROBERT H. FERGUSON, III (the "LESSEE").
WHEREAS, LESSEE has indicated its desire to lease a parcel of land located in the
tidelands within the northeast corner of the Seward Small Boat Harbor between the tidal grid
and the shoreline, an area of approximately 1,800 square feet in size (the "Leased Land"); and
WHEREAS, the City Council of CITY has determined that a lease of the Leased Land
to LESSEE for the purposes described herein would be in the public interest; and
WHEREAS, it is the intent of this LEASE to transfer from CITY to LESSEE the entire
burden of compliance with present or future environmental regulations or controls with respect
to LESSEE's operations on the Leased Land during the lease term.
NOW THEREFORE, for and in consideration of the mutual promises and covenants
hereinafter contained, the parties hereto agree as follows:
ARTICLE 1. -- LEASED LAND
1.1 Description of Leased Land. The Leased Land is located on tidelands located
within the northeast corner of the small boat harbor in the City of Seward, Alaska. In
accordance with Section 1.3, LESSEE will cause the Leased Land to be surveyed by a land
surveyor to establish the legal description of the property.
The area of the Leased Land is 1,800 square feet, more or less. The Leased Land is depicted
on the attached Exhibit "A", which is incorporated herein by reference. The depiction of the
Leased Land in Exhibit "A" is subject to modification as provided in Section 1.3. The parties
intend that Exhibit "A" serve as an interim description of the Leased Land to identify the
Leased Land sufficiently for purposes of public hearing and approval of this LEASE by the City
Council of CITY, and for purposes of the revocable license granted to LESSEE in Section 2.2.
1.2 Covenant of Quiet Enjoyment; Warranty of Title. Subject only to encumbrances
of record as of the date hereof and the provisions of this LEASE, CITY hereby covenants and
warrants that:
a) LESSEE shall have the quiet enjoyment and possession of the Leased Land
for the full term of this LEASE;
b) CITY enjoys management authority of the Leased Land, through consent of
the U.S. Corps of Engineers, subject to the conditions described therein, and is thereby
empowered to enter into this LEASE.
Lease Agreement : City - Ferguson
May 9. 1994
1.3 Survey of Leased Land. Within 90 days from the date of this LEASE, LESSEE, at
its sole cost, will cause the Leased Land to be surveyed by a land surveyor registered in the
State of Alaska. A description of the Leased Land based upon this survey shall be attached
to this LEASE as Exhibit B and shall be incorporated herein by reference. The description of
the Leased Land in Exhibit B shall supersede the description in Exhibit A, and shall be
considered the correct description of the Leased Land for all purposes under this LEASE.
1.4 Permits. LESSEE, at its sole cost, shall obtain all permits necessary to the
construction and operation of its facilities on the Leased Land. CITY agrees from time to time
upon request of LESSEE to execute such documents, petitions, applications and authorizations
as may be necessary to obtain from the agency or public body responsible therefor any
conditional use permits, zoning and re-zoning, tentative and final tract approval and precise
plan approval that is required for the lawful construction and operation of the facilities of
LESSEE permitted on the Leased Land by the terms of this LEASE. Nothing in this Section
imposes any duty or responsibility on the City to assist LESSEE in obtaining any other permits
or approvals, including without limitation those required by the U.S. Army Corps of Engineers
(wetland fill permits) or the Environmental Protection Agency (Clean Air Act permits).
1.5 Platting. CITY intends to re-plat the all public property on a periodic basis in order
to ensure the orderly development of the property and as leases are entered into with various
tenants. CITY agrees to include the Leased Land in the next re-plat in accordance with the
description prepared by LESSEE under Section 1.3. If LESSEE requests a re-plat of the Leased
Land prior to that time, CITY shall assist LESSEE in the preparation and filing of the re-plat,
and LESSEE shall reimburse CITY for the CITY's direct costs in assisting in the preparation and
filing of the re-plat. LESSEE agrees to sign the plat and any other documents necessary to
complete the platting or re-platting of any area including all or a portion of the Leased Land.
ARTICLE 2. -- LEASE TERM
2.1 Initial Term. The LEASE term shall be in accordance with CITY authorization
Resolution No. 94- (the "RESOLUTION"), attached and incorporated herewith by
reference as Exhibit C. The initial term of the LEASE shall commence with the effective date
of the RESOLUTION, and end June 30, 2015.
2.2 Interim Right to Possession. LESSEE is hereby granted a revocable license to enter
upon the Leased Land prior to the expiration of 30 days from the date of passage and posting
of the RESOLUTION, subject to the terms of this Section. The granting of a revocable license
to LESSEE under this Section is for the convenience of LESSEE only and does not grant any
interest in the Leased Land. The revocable license granted under this Section permits LESSEE
to enter upon the Leased Land solely for the purpose of surveying, soils testing and similar
preliminary work. During the term of this revocable license, LESSEE shall not engage in any
storage of materials, clearing, grading, excavation or construction of improvements on the
Leased Land. CITY may revoke the license granted by this Section at any time, including
without limitation upon the filing with the Clerk of CITY of a petition for referendum on the
RESOLUTION.
2.3 Lease Subject to Referendum. LESSEE understands and assumes the risk that
under the Charter and Code of CITY this LEASE may be voided by referendum. The revocable
Lease Agreement: City - Ferguson
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May 9. 1994
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license granted in Section 2.2 shall not affect or reduce the right of the voters of the City of
Seward to reject this LEASE by referendum. LESSEE agrees that if the RESOLUTION is the
subject of a referendum petition filed with the Clerk of City during the term of the revocable
license granted by Section 2.2, LESSEE shall have no rights under this LEASE unless and until
the RESOLUTION is approved by the voters of the City of Seward, and LESSEE shall not be
entitled to any damages or any other relief against CITY in the event the RESOLUTION is not
so approved.
2.4 Options to Extend. LESSEE shall have the right to extend the initial term of this
LEASE for two additional five-year periods (cumulative extensions not to exceed ten years),
provided that:
a) LESSEE exercises any applicable option to extend at least one hundred and eighty
(180) days prior to the expiration of the then current lease term;
b) LESSEE is not in default under any term or provision of this LEASE;
c) LESSEE shall exercise its options to renew by sending written notice thereof in
accordance with the provisions of Article 37 of this LEASE; and
d) The City Council of CITY, at the time each option is exercised, approves the
extension by resolution or ordinance.
ARTICLE 3. -- RENT
3.1 Initial Rental Rate. Commencing on the effective date of this LEASE through June
30, 1995, the annual rental rate for the Leased Land, based on its non-appraised value, shall
be arbitrarily set at ONE DOLLAR AND 50/1 OOTHS ($1.50) per square foot. Rent shall be
payable quarterly in advance on or before the 20th day of the month following the beginning
of each calendar quarter: January 20, April 20, July 20 and October 20.
3.2 Rental Adjustments. As soon as is practical after execution of this LEASE and
before June 30, 1995, CITY shall, at its own expense, retain an independent MAl certified
appraiser who shall determine the fair market value of the Leased Land. On July 1, 1995, and
the date every five years thereafter (each a "Rental Adjustment Date"), the total annual rental
to be paid under the terms of this LEASE shall be adjusted to the fair market value at the
highest and best use of the Leased Land, exclusive of improvements placed thereon by
LESSEE but inclusive of all improvements made by CITY (including those made before or
subsequent to this LEASE). The highest and best use of the Leased Land shall be determined
without regard to LESSEE's intended or actual use of the Leased Land unless that use is
coincidentally the highest and best use of the Leased Land.
3.3 Procedure for Rental Adjustment. Before each Rental Adjustment Date, CITY shall
at its own expense, retain an independent MAl certified appraiser who shall determine the
adjusted annual rental rate at the fair market value of the Leased Land in accordance with
Section 3.2. The appraiser's report shall be delivered to LESSEE not less than 90 days before
the Rental Adjustment Date. If LESSEE objects to the appraiser's determination of the
adjusted rental rate, it shall give written notice to CITY of its objection within thirty (30) days
Lease Agreement : City - Ferguson
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May 9. 1994
of receipt of the appraiser's report, and LESSEE shall then engage a second independent MAl
certified appraiser at its expense to make a second appraisal of the fair market rental value in
accordance with Section 3.2.
If the second appraisal determines a fair market rental rate value which varies from that
determined by the first appraisal by no more than ten percent (10%), then the adjusted rental
rate shall be the average of the rental rates determined by the appraisals. If the second
appraisal determines a fair market rental rate which varies from the first appraisal by more than
ten percent (10%) then, unless CITY and LESSEE agree on a rate themselves, the fair market
rental rate of the Leased Land shall be determined in accordance with the arbitration provisions
contained in ARTICLE 19 of this LEASE.
3.4 Late Payment Charge. Rental payments not received by the due date shall bear
interest until paid at a rate of 1.5% per month or the maximum rate permitted under Alaska
law, whichever is less.
ARTICLE 4. -- USE OF LEASED LAND
4.1 Use of Leased Land. CITY has limited land available for lease. LESSEE's use of
the Leased Land described in this Section has been determined by the City Council of CITY
to be in the public interest, and is of the essence of this LEASE. LESSEE may use the Leased
Land only in accordance with applicable city zoning code provisions in addition to the
following conditions:
a) LESSEE, at its sole cost, will furnish a portable toilet on the Leased Land until such
time as CITY can construct a permanent public restroom on adjacent city land. Construction
of the proposed public restroom facility is expected to begin within ninety (90) days of the
effective date hereof. However, in the event CITY does not proceed in a timely manner in the
construction of said public restroom, LESSEE's obligation to provide a portable toilet on the
Leased Land shall terminate September 30, 1995.
b) LESSEE, at its sole cost, will also build a boardwalk on the beach front within the
boundaries of the Leased Land.
LESSEE shall not use the Leased Land in any manner or construct any facilities thereon which
would inhibit the use of adjacent or other lands.
4.2 No Preferential Rights to Use Public Facilities. This LEASE does not grant to
LESSEE any right to exclusive right to use of any public port or other public facilities
constructed or operated by CITY. LESSEE will be subject to any tariffs, procedures, rules and
regulations of CITY concerning the use of such facilities as they may now exist or from time
to time be amended.
4.3 Adequacy of Public Facilities. CITY makes no representations or warranties as to
the fitness of any particular part or the whole of CITY's public facilities for the uses intended
by LESSEE. LESSEE has inspected those facilities or has examined the plans and
specifications in the case of facilities under construction or planned for construction and has
satisfied itself that the facilities are sufficient for its intended uses. CITY makes no
Lease Agreement: City - Ferguson
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May 9, 1994
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representations or warranties of any nature with respect to the commercial practicability or
accuracy of any information provided by CITY. LESSEE has independently conducted its own
review, investigation, and assessment.
4.4 Tariffs and Other Service Fees. CITY shall have the right to make amendments
to its tariffs, regulations and scheduled fees from time to time even if those adjustments shall
cost LESSEE more for its operations or use of public facilities and CITY is free to do so
provided only that it does not impose any greater burden or higher rate upon LESSEE than
upon any other similar user of the public facilities.
4.5 Time for Payment of Utilities and Taxes. LESSEE will pay for utilities and taxes
related to operations on the Leased Land and LESSEE's interest in this LEASE, if any, before
such obligations become delinquent; provided, that LESSEE may, in good faith and before such
delinquency, contest any such charge or assessment.
4.6 Other Uses. This LEASE shall not preclude the CITY from actively seeking other
and additional tenants for space including those who would be in competition with LESSEE
or who might be interested in leasing the Leased Land to LESSEE should this LEASE be
terminated for any reason.
4.7 Use of Public Docks and Port Facilities. Public docks are subject to port and
harbor rules and regulations as adopted by City Council.
If additional regulatory approval becomes necessary to secure LESSEE's rights to use the Dock
as set forth in this Section, the CITY shall continue to operate the Dock as a public facility and
CITY and LESSEE shall jointly prepare and submit for approval to any regulatory agency having
jurisdiction a Dock Use Agreement including the provisions set forth in this Section. The
parties agree to incorporate in that operation agreement as many of the provisions of this
Section as are not prohibited under applicable law.
ARTICLE 5. -- UTILITIES AND RIGHTS OF ACCESS
5.1 Utilities. LESSEE, at LESSEE's sole cost and expense, shall provide for the
extension of public utilities to the Leased Land sufficient for LESSEE's intended operations.
In so doing, LESSEE shall comply with all CITY regulations and requirements, and the tariffs
of the affected utilities, with respect to the construction of those utilities. CITY agrees to
cooperate and assist the LESSEE in LESSEE's planning and engineering of those
improvements. All utilities will be located and sized in accordance to the CITY's Master Plan
for the area leased. CITY adopted the Uniform Building Code, 1991 edition, and all
construction will be in compliance thereto. Utilities constructed by the LESSEE within the
public right-of-ways or within public utility easements will normally be accepted and
maintained by the City or utility companies may be used to serve other customers of LESSEE's
without payment of fees or reimbursement of construction cost to the LESSEE. However, this
does not preclude several lessees from agreeing to share the cost of constructing a utility to
serve their facilities. The City or 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 cost of over sizing shall be born by the CITY or
utility company. such cost shall be limited to the supplier's cost of the additional fittings and
Lease Agreement: City - Ferguson
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May 9, 1994
equipment and direct labor and equipment cost to complete the installation. The cost 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 his facility and the price of the oversized material required
by the CITY or utility company.
LESSEE shall not be entitled to any refund, rebate, or payments from CITY for any rent,
investment, or costs incurred by LESSEE with respect to any required permits for construction
or operation of LESSEE's facilitates on the Leased Land, it being the intent of the parties that
the risk of obtaining required permits be solely a risk undertaken by LESSEE.
5.2 Third Party Improvements. At the request of LESSEE, CITY shall, from time to
time, execute and deliver or join in execution and delivery of such documents as are
appropriate, necessary or required to impose upon the Leased Land in accordance with the
terms of this LEASE covenants, conditions and restrictions providing for the granting of uses
of the Leased Land, or any part thereof, the establishment of party walls, the establishment
of mutual and reciprocal parking rights or rights of ingress or egress, or other like matters
(herein called "third-party improvements"), all of which are for the purpose of the orderly
development of the Leased Land as a commercial unit subject, however, to the conditions
that:
a) All such matters shall be limited to the lease term and shall terminate upon
termination of this LEASE for whatever reason.
b) Any such matters of a permanent nature extending beyond the lease term shall not
be granted without the prior written approval of CITY. In any of the foregoing instances
referred to in this Section, CITY shall be without expense therefor, and the cost and expense
thereof shall be borne solely by LESSEE.
c) At the expiration of the lease term (including any extended period) third party
improvements on the Leased Land other than portable equipment shall become the property
of CITY without the payment of any compensation to LESSEE.
5.3 Easements. In order to provide for the orderly development of the Leased Land
and adjacent lands, it 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 Leased Land. As additional consideration
for this LEASE, CITY and LESSEE each shall, at the request of the other, join with each other
in executing and delivering such documents from time to time and throughout the lease term
as may be appropriate, necessary, or required by the several governmental agencies (including
the City of Seward), public utilities and other users or tenants of leased land for the purpose
of granting such easements and dedications; provided, however, that such easements and
dedications and similar rights do not unreasonably interfere with LESSEE's efficient 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. Any easements or rights of access granted to LESSEE by CITY need not be
exclusive to LESSEE.
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May 9. 1994
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ARTICLE 6. n CONSTRUCTION BY LESSEE
6.1 Improvements on Leased Land. LESSEE shall have the right to erect, maintain,
alter, remodel, reconstruct, rebuild, build and/or replace buildings and other improvements on
the Leased Land, subject to the following conditions:
a) The cost of any such construction, reconstruction, demolition, or of any changes,
alterations or improvements, shall be borne and paid for by LESSEE.
b) The Leased Land shall at all times be kept free of mechanics and materialmen's liens.
c) LESSEE shall supply CITY with a copy of all building plans and specifications and a
site plan or plans for the Leased Land.
d) Any general contractor employed by LESSEE or its sub-lessees shall be appropriately
bonded by use of performance and labor and material payment bonds in the customary form
when cost of the work is over Fifty Thousand Dollars ($50,000). Copies of all such bonds
shall be furnished to CITY prior to commencement of construction. LESSEE shall provide
CITY, if no performance and labor and material bonds are provided by LESSEE, any necessary
assurance or guarantees that the contemplated work will be performed by the general
contractor or by LESSEE. In the event that LESSEE elects to construct the facility with its
own personnel and equipment, or the personnel and equipment of any corporation or person
that is an "affiliate" of LESSEE as such term is defined in AS 10.06.990(2), a performance
bond shall be required when the cost of the work is over Fifty Thousand Dollars ($50,000).
e) CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility for
any improvements constructed or effected by LESSEE on the Leased Land.
f) LESSEE shall comply with all federal, state and local statutes and regulations with
respect to such construction including any required finding by the City Council of Seward that
such action is in the public interest.
g) LESSEE may add/alter, or remodel improvements at LESSEE's discretion during the
term of this LEASE.
6.2 City Review of Construction. CITY shall have the right to review initial plans and
any future changes or additions to LESSEE's facilities on the Leased Land, by reviewing the
design thereof. CITY shall have the right to comment upon that design and to require LESSEE
to make reasonable changes so as to avoid interference with public operations or other
leaseholders but the exercise of these rights shall not imply any obligation to do so nor any
obligation to do so in a particular way. LESSEE shall construct the facility in accordance with
final design specifications approved by CITY. CITY's representatives may monitor the work
and shall have access to the site at all reasonable times. LESSEE shall obtain the usual and
customary performance guarantees from its contractors and CITY shall be named an additional
insured.
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May 9. 1994
ARTICLE 7. -- RETURN OF LEASED LAND/SITE CONDITIONS
7.1 Return of Leased Land in Original Condition. Upon termination of this LEASE for
any reason, LESSEE shall return the Leased Land to CITY in the same condition as at the
commencement of this LEASE, ordinary wear and tear excepted. The Leased Land shall be
free of all Hazardous Materials and contamination arising out of or resulting from LESSEE's
operations.
7.2 Return of Leased Land in Different Condition. Notwithstanding the provisions of
Section 7.1 above, upon termination of this LEASE for any reason LESSEE may return the
Leased Land in a re-contoured or graded condition different from its original condition provided
LESSEE has complied with the following provisions:
a) CITY has provided written approval of LESSEE's plans for development of the Leased
Land contours, including its plans for material extraction and final grade.
b) CITY has had the opportunity to comment upon LESSEE's plans and to require
LESSEE to make reasonable changes in them in order to provide reasonable assurance that the
extraction of materials, contouring, and grading will not adversely affect the ability of CITY
to lease the Leased Land for commercial development should this LEASE terminate for any
reason and to avoid interference with other operations.
c) The exercise of these rights to review shall not imply any obligation to do so nor any
obligation to do so in a particular way.
d) LESSEE shall submit a preliminary design to CITY within sixty (60) days after
execution of this LEASE, and shall finalize that design within sixty (60) days after receiving
CITY's comments. LESSEE shall comply with the final design specifications as approved by
CITY. CITY's engineer may monitor the work and shall have access to the Leased Land at all
reasonable times for that purpose.
ARTICLE 8. -- FORCE MAJEURE
In the event either LESSEE or CITY is delayed from performance of any of its obligations under
this LEASE, due to acts of God, acts of the enemies of the United States of America,
sabotage, war, 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. -- CITY ACTS OF DEFAULT
Each of the following shall be a "CITY Act of Default" under this LEASE and the terms
"acts of default" and "default" shall mean, when they are used in this LEASE, anyone or
more of the following events:
a) Failure by CITY to fulfill, observe or perform any covenants 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
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May g. 1994
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default, has been given to CITY by LESSEE; 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 CITY within the applicable period and diligently pursued until
the default is corrected.
b) Violation by CITY of any applicable laws or regulations of the United States, the
State of Alaska, the Kenai Peninsula Borough, or the City of Seward 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 pursuant to the regulations of such agencies for
a period of sixty (60) days after written notice specifying such violation has been given by the
agency to CITY; provided, however, if such violation be such that it cannot be corrected
within the applicable period, it shall not constitute an act of default if corrective action is
instituted by CITY within the applicable period and diligently pursued until the violation is
corrected. Furthermore, if CITY shall contest such alleged violation through appropriate judicial
or administrative channels, the time period specified herein shall not commence until such
proceedings are finally determined, provided such proceedings are diligently pursued.
ARTICLE 10. -- REMEDIES FOR CITY'S ACTS OF DEFAULT
Whenever an act of default by CITY shall have occurred, and any applicable period for giving
notice and any opportunity to cure shall have expired, LESSEE shall have the following rights
and remedies in addition to any rights and remedies that may be given to LESSEE by statute,
common law or otherwise:
a) Withhold payment of any rent otherwise due CITY.
b) Refuse to proceed with any of LESSEE's other performance obligations under this
LEASE.
c) Recover whether this LEASE be terminated or not from CITY reasonable attorney's
fees and all other expenses incurred by LESSEE by reason of the default by CITY.
d) Declare this LEASE terminated.
e) No expiration or termination of this LEASE shall expire or terminate any liability or
obligation to perform of CITY's which arose prior to the termination or expiration except
insofar as otherwise agreed to in this LEASE.
f) Each right and remedy of LESSEE provided for in this LEASE shall be cumulative and
shall be in addition to every other right or remedy provided for in this LEASE, now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise or beginning of the
exercise by LESSEE of anyone or more of the rights and remedies provided for in this LEASE,
now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the
simultaneous or later exercise by LESSEE of any or all other rights or remedies provided for
in this LEASE, now or thereafter existing at law or in equity or by statute or otherwise.
g) 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
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May 9. 1994
any such right and power may be exercised from time to time and as often as may be deemed
expedient.
ARTICLE 11. -- LESSEE'S ACTS OF DEFAULT
Each of the following shall be a "LESSEE Act of Default" under this LEASE and the terms" acts
of default" and "default" shall mean, whenever they are used in this LEASE, anyone or more
of the following events:
a) Failure by LESSEE to pay promptly when due, and in no event later than twenty (20)
days from the due date thereof, the rent required to be paid under this LEASE.
b) Failure by LESSEE 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 LESSEE by CITY; provided, however,
that if said default is such that it cannot be corrected within the applicable period, it shall not
constitute an act of default if corrective action is instituted by LESSEE within the applicable
period and diligently pursued until the default is corrected.
c) The making by LESSEE of an assignment for the benefit of creditors, the filing of a
petition in bankruptcy by LESSEE, the adjudication of LESSEE as insolvent or bankrupt, the
petition or application by LESSEE to any tribunal for any receiver or any trustee for itself or for
any substantial part of its property; or the commencement of any proceeding relating to
LESSEE under any bankruptcy, insolvency, reorganization, arrangement or readjustment of
debt law or statute or similar law or statute of any jurisdiction, whether now or hereafter in
effect which shall remain undismissed for a period of six (6) months from the date of
commencement thereof.
d) Violation by LESSEE of any laws or regulations of the United States, or of the State
of Alaska, or any conditions of any permits issued by agencies of the City of Seward, the
Kenai Peninsula Borough, the State of Alaska or of the United States Government pursuant
to the regulations of such agencies, for a period of sixty (60) days after written notice
specifying such violation has been given by the agency charged with the enforcement of such
laws, regulations or permits to LESSEE; provided, however, if such violation be such that it
cannot be corrected within the applicable period, it shall not constitute an act of default if
corrective action is instituted by LESSEE within the applicable period and diligently pursued
until the violation is corrected. Furthermore, if LESSEE shall contest such alleged violation
through appropriate judicial or administrative channels, the time period specified herein shall
not commence until such proceedings are finally determined provided such proceedings are
diligently pursued; provided, however, that any such extension of time shall not be effective
if the effect of the interim administrative or judicial action is to cause a stoppage, interruption
or threat to the activities of any person or entity other than those of LESSEE.
e) The default by LESSEE or any other lease agreement between LESSEE and CITY.
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May 9. 1994
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ARTICLE 12. -- REMEDIES FOR DEFAULT BY LESSEE
Whenever an act of default by LESSEE shall have occurred, and any applicable period for
giving notice and any opportunity to cure shall have expired, CITY shall have the following
rights and remedies all in addition to any rights and remedies that may be given to CITY by
statute, common law or otherwise:
a) CITY may distrain for rent due any of LESSEE's personal property which comes into
CITY's possession. This remedy shall include the right of CITY to dispose of personal property
distrained in any commercially reasonable manner. It shall be conclusively presumed that
compliance with the procedures set forth in the Alaska Uniform Commercial Code (AS
45.09.504) with respect to sale of property shall be a commercially reasonable disposal.
b) CITY may re-enter the Leased Land and take possession thereof and, except for any
personal property of LESSEE which CITY has waived its right to distrain under sub-part (a)
above, remove all personal property of LESSEE from the Leased Land. Such personal property
may be stored in place or may be removed and stored in a public warehouse or elsewhere at
the cost of LESSEE all without service of notice or resort to legal process, all of which LESSEE
expressly waives.
c) Declare this LEASE terminated.
d) Collect any and all rents due or to become due from sub-tenants or other occupants
of the Leased Land.
e) Recover, whether this LEASE be terminated or not, reasonable attorney's fees from
LESSEE and all other expenses incurred by CITY by reason of the breach or default by LESSEE.
f) Recover an amount to be due immediately on breach equal to the rent reserved under
this LEASE discounted to the date of such breach at the rate of eight percent (8%) per year.
If the Leased Land or any part thereof be re-Iet by CITY for the unexpired term of this LEASE,
CITY shall reimburse to LESSEE upon receipt an amount not to exceed the amount received
by CITY under this paragraph.
g) If LESSEE does not immediately surrender possession of the Leased Land after
termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon and
repossess the Leased Land and expel LESSEE without being deemed guilty in any manner of
trespass and without prejudice to any remedies which might otherwise be used for arrears of
rent or breach of covenant.
h) No expiration or termination of this LEASE shall expire or terminate any liability or
obligation to perform of LESSEE's which arose prior to the termination or expiration except
insofar as otherwise agreed to in this LEASE.
i) 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 anyone or more of the rights and remedies provided for in this
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May 9. 1994
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.
jl 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 13..- TITLE TO IMPROVEMENTS INSTALLED BY LESSEE
13.1 Real Property Improvements. All improvements constructed by LESSEE on the
Leased Land or on easements to or from the same, such as buildings, warehouses, conveyor
systems, ditches, sewer lines, water lines, dikes or berms and similar improvements, shall
become the property of CITY upon termination of this LEASE for any reason; provided,
however, that CITY may require LESSEE to remove any improvements designated by CITY
without cost to CITY.
13.2 Personal Property. Any other provIsions of this LEASE to the contrary
notwithstanding, LESSEE, upon termination of this LEASE for any reason, may, but need not,
promptly remove, in no event later than ninety (90) days from the termination of the lease,
trade fixtures and equipment from the Leased Land provided that LESSEE shall repair any
damages to the Leased Land caused by such removal.
ARTICLE 14. -- SUBLEASE OR ASSIGNMENT
14.1 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 RESOLUTION. LESSEE may only assign, sublease or sub-tenant this LEASE or any
part of the Leased Land with CITY's prior written consent which shall be granted if the use
of the Leased Land by the proposed assignee, sublessee or subtenant is:
a) compatible with the use of adjacent lands;
b) a permitted use under the then existing zoning regulations and comprehensive land
use plan; and
c) found to be in the public interest by the City Council of CITY to such assignment or
subletting.
14.2 Assignment of Lease for Security. Notwithstanding Section 14.1 above, LESSEE
may assign, encumber or mortgage its interest in this LEASE or improvements on the Leased
Land, by deed of trust or other security instrument, to an institutional lender ("Lender") for
development of or operations on the Leased Land, provided that Lender shall be subject to all
obligations of LESSEE under the terms of this LEASE. CITY shall furnish Lender, at the
address provided to CITY by Lender in writing, with notice of any default or breach of LESSEE
under this LEASE. Lender shall have the right (without being required to do so and without
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May 9. 1994
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thereby assuming the obligations of LESSEE 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 12 above, no "LESSEE Act of Default" shall exist until expiration of
thirty (30) days after such notice is furnished to Lender; provided,
a) if Lender, with respect to any default or breach other than a failure to make any
required payment of rent or other money, shall undertake within thirty (30) days after notice
to cure the default or breach and shall diligently and in good faith proceed to do so, CITY may
not terminate this LEASE or relet the Leased Land unless Lender fails to cure the default or
breach within a reasonable period of time thereafter; and
b) if the default for which notice is given is a breach of Section 11 (c), CITY shall not
exercise any of the remedies afforded to it under Article 1 2 above so long as LESSEE or
Lender remains in possession of the Leased Land and satisfies LESSEE's obligations under the
terms of this LEASE. Upon foreclosure 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.
14.3 Assignment to Affiliate. LESSEE may assign this LEASE to an affiliate of LESSEE
as that term is defined by AS 10.05 .825( 1}; provided, however, that LESSEE's full faith and
credit shall remain obligated under this LEASE as though the assignment had not taken place.
ARTICLE 15. -- LESSEE'S DUTY TO DEFEND/INDEMNIFY
LESSEE shall defend, indemnify and hold CITY harmless from any and all liability or claims
for damages, including personal injuries, death and property damage arising out of or
resulting from LESSEE's use of the Leased Land or the use of the Leased Land by LESSEE's
sub-lessees, agents or contractors or the public, except for damages arising from the sole
negligence or willful acts or omissions of CITY, its agents, employees, or contractors. If
any action or proceeding is brought against LESSEE by reason of any such occurrence,
LESSEE shall notify CITY promptly in writing of such action or proceeding.
ARTICLE 16. -- CITY'S DUTY TO DEFEND/INDEMNIFY
CITY shall defend, indemnify and hold LESSEE harmless from any and all liability or claims for
damages, including personal injuries, death and property damage arising from the sole
negligence or willful acts or omissions of CITY, its agents, employees, or contractors or from
conditions existing or activities occurring on the Leased Land prior to the effective date of this
LEASE.
ARTICLE 17. -- INSURANCE
Prior to commencement of the lease term, LESSEE shall procure and maintain, at LESSEE's
sole cost and expense, commercial general liability insurance, with limits of liability of One
Million Dollars ($1 ,000,000)for all injuries and/or deaths resulting to anyone person and One
Million Dollars ($1,000,000) limit from anyone occurrence. Coverage under such insurance
shall also include explosion, collapse and underground property damage hazards, and any
claim arising out of or related to any event or happening directly or indirectly caused by or
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May 9. 1994
resulting from the dispersal, discharge, escape, release, removal, or saturation of smoke,
vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, gases, contaminants, or pollutants
into the atmosphere, or in, onto, upon, or into surface or subsurface of a) soil; b) water or
watercourses; c) objects; and, d) any tangible or intangible matter, whether sudden or not.
Such insurance shall include a blanket contractual liability endorsement. The minimum
amounts and types of insurance provided by LESSEE shall be subject to revision in accordance
with standard insurance practices, in order to provide continuously throughout the term of this
LEASE and any extensions hereof, a level of protection consonant with good business practice
and accepted standards in the industry. Such factors as increases in the cost of living,
inflationary pressures, and other considerations, shall be utilized in assessing whether the
minimum insurance requirements should be increased. CITY may notify LESSEE of any
requested increase in insurance coverage.
All insurance policies shall provide for thirty (30) days' notice of cancellation and/or material
change to be sent to CITY at the address designated in ARTICLE 39 of this LEASE. All such
policies shall be written by insurance companies legally authorized or licensed to do business
in the State of Alaska, and acceptable to CITY (Best's Rating B + or better). LESSEE shall
furnish CITY, on forms supplied by CITY, certificates evidencing that it has procured the
insurance required herein prior to the occupancy of the Leased Land or operation by LESSEE.
Nothing herein contained shall prevent LESSEE or CITY from placing and maintaining at CITY's
or LESSEE's own individual cost and expense, additional or other insurance as may be desired.
All of the insurance policies required above as well as any other insurance carried by LESSEE
or CITY shall provide that the insurers waive their rights of subrogation against CITY and
LESSEE and their respective officers, servants, agents or employees. LESSEE further agrees
to waive and agrees to have its insurers waive any rights of subrogation (whether by loan
receipts, equitable assignment or otherwise). with respect to deductibles under such policies
and with respect to damage to equipment including the loss of use thereof, whether insured
or not. LESSEE shall also name CITY as an additional insured on the general liability insurance
policy maintained by LESSEE as required above, excluding coverage for claims resulting from
CITY's sole negligence.
ARTICLE 18. -- CONDEMNATION
If all or any part of the Leased Land is condemned for a public use by any government agency
or other duly authorized entity, CITY and LESSEE shall each make a claim against the
condemning or taking authority for the amount of any damage incurred by or done to them
respectively as a result of the taking. Neither LESSEE nor CITY shall have any rights in or to
any award made to the other by the condemning authority; provided, that in the event of a
single award to CITY which includes specific damages for loss of LESSEE's leasehold interest,
CITY shall transmit to LESSEE the amount of such specific damages so found, if any.
If part but not all of the Leased Land is condemned for public use, LESSEE shall make a good
faith determination as to whether or not the taking of the part of the Leased Land designated
for condemnation will prevent it from continuing to operate on the Leased Land. If LESSEE
determines in good faith that the condemning of such part of the Leased Land will prevent it
from continuing to operate on the Leased Land, LESSEE may notify CITY in writing to this
effect, and this LEASE shall then be terminated for all purposes effective fifteen (15) days
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May 9, 1994
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from the date LESSEE sends such notice to CITY, or at such other later date as LESSEE shall
specify in its notice, and such termination shall be treated in the same manner as a termination
at the expiration of the term of this LEASE. LESSEE shall, as a condition precedent to such
termination, remove all encumbrances, debts and liens to which the Leased Land is subject.
If at the time of such partial taking for public use, LESSEE determines that such partial taking
will not prevent it from continuing to operate, then LESSEE and CITY shall negotiate an
equitable and partial abatement of the rent beginning to be effective on the actual date when
LESSEE is effectively prevented from utilizing the condemned land.
ARTICLE 19. -- ARBITRATION
Any dispute between CITY and LESSEE with respect to any provision of this LEASE or the
rights and obligations of the parties hereunder shall be decided by arbitration, in
accordance with the provisions of this Section.
a) Consent Panel. The party desiring arbitration of a dispute shall give written notice
to that effect to the other party specifying in such notice the name and address of a person
to serve as an arbitrator. Within fifteen (15) days after receipt of such notice the other party
shall give written notice to the first party specifying the name and address of another person
designated to serve as an arbitrator.
If neither party has objected to the other's designation within fifteen (15) days of the
notice by the second party of its designation of an arbitrator, then the two chosen arbitrators
(called the "consent panel") shall select a third person agreeable to both to become the third
member of the consent panel. The consent panel may utilize informal techniques and hold
informal hearings without reference or adherence to the rules or procedures of the American
Arbitration Association. Promptly and within thirty (30) days of concluding any proceeding the
consent panel shall render its written decision. It is the intent of this subparagraph to provide
for a speedy and inexpensive resolution of disputes provided the parties agree to such a
procedure.
b) Formal Arbitration. If either party objects, within fifteen (15) days of the second
party's designation of an arbitrator to the other's choice of an arbitrator pursuant to paragraph
(a) above, or the party desiring arbitration initially decides not to use the consent panel
procedure, then the matter shall be promptly referred to the American Arbitration Association
in accordance with the then existing rules of the American Arbitration Association.
c) Arbitration Awards. Any award by either a consent panel or as a result or
proceedings before a panel pursuant to the rules of the American Arbitration Association shall
be enforceable in accordance with Alaska Statutes. Any award shall include an award of
costs, interest and attorney fees to the prevailing party.
ARTICLE 20. -- MAINTENANCE AND REPAIRS
20.1 Normal Maintenance. During the entire term of this LEASE and every renewal
or extension hereof, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the
Leased Land, including any improvements placed thereon by LESSEE, in as good condition as
received or constructed by LESSEE, ordinary wear and tear excepted. CITY, at CITY's sole
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May 9, 1994
option and expense, may, prior to the commencement of construction by LESSEE, perform
maintenance and preventative work on the Leased Land, exclusive of improvements placed
thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or
prepare the Leased Land for eventual development by LESSEE or others by grading, filling or
contouring the Leased Land. Any such work performed by CITY shall be at CITY's sole
expense and risk unless LESSEE agrees, in advance and in writing, to share such expense and
risk. LESSEE shall maintain in first class condition at all times all fire, pollution and other
protective equipment.
CITY and its authorized representatives may periodically inspect the Leased Land and
facilities constructed thereon in order to ascertain the condition of the public portion of the
Leased Land but the exercise of this right shall not imply any obligation to do so nor any
obligation to do so in any particular way.
20.2 Safety Issues. CITY may notify LESSEE in writing of any deficiencies in the
performance of LESSEE's maintenance responsibilities as they relate to public health or safety
and LESSEE shall promptly within thirty (30) days of receipt of such notice advise CITY in
writing of its proposed schedule for performance of any work necessary to cure such
deficiencies.
If such deficiencies relate to the safety of LESSEE's operation such that the surrounding land
and port facilities are exposed to risk, unnecessary potential hazards, or a risk to the public
interest (as distinguished from a business risk), or if CITY is not satisfied with the proposed
schedule of repairs either because of the delays therein or the scope of the repairs, then CITY
may engage an independent engineering consultant well-versed and experienced who shall
furnish to CITY a comprehensive survey and report for the purpose of establishing both the
need and urgency to perform such maintenance work. As soon as practicable following
receipt of said engineer's determinations and recommendations, if the report requires repair
then LESSEE shall pay the cost of the report and perform such work in accordance therewith
at LESSEE's cost, risk and expense.
20.3 Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work
as being necessary or advisable or reasonable to protect the public facilities on the Leased
Land or on adjacent land, it may submit the matter to arbitration; provided, however, that
pending the decision of the arbitrators it shall fully comply with the maintenance requests.
If an arbitration award should ultimately find that the repairs were not necessary then LESSEE
may either deduct from future rental payments the cost of such repairs or be reimbursed
therefor. In deciding whether repairs requested by CITY or required by an engineering report
are necessary, the arbitration panel is to give primary consideration to the safety and welfare
of the Seward port facilities and the citizens of Seward in light of the highest standards in the
industry.
If any facility or service provided by CITY to the Leased Land shall become inadequate due to
changes in environmental control standards or should any facility require updating or
improvement by reason of a change in LESSEE's use of the Leased Land or operations
therefrom, LESSEE shall either construct such improvements at LESSEE's own cost or
reimburse CITY for such work at the option of CITY.
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May 9, 1994
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ARTICLE 21. -- ENVIRONMENTAL CONCERNS
21.1 Hazardous Materials.
a) Condition of Site. LESSEE has had full opportunity to examine the site for the
presence of any Hazardous Material and accepts the site in "as is" condition. LESSEE is
already in possession of the Leased Land as a successor to the Former Lessee.
b) Release of CITY. Any other provision of this LEASE to the contrary notwith-
standing, LESSEE releases CITY from any and all claims, demands, penalties, fines, judgments,
liabilities, settlements, damages, costs or expenses (including, without limitation, attorney's
fees, court costs, litigation expenses, and consultant and expert fees) arising during and after
the term of the Prior Lease or this LEASE, and resulting from the use, keeping, storage or
disposal of Hazardous Material on the site by Former Lessee or LESSEE, or arising out of or
resulting from Former Lessee's or LESSEE's operations at the site except for those arising out
of the CITY's sole negligence or intentional misconduct. This release includes, without
limitation, any and all costs incurred due to any investigation of the site or any cleanup,
removal or restoration mandated by a federal, state or local agency or political subdivision or
by law or regulation.
c) Use of Hazardous Materials on the Site.
i) LESSEE shall not cause or permit any Hazardous Material to be brought upon,
kept or used in or about the Leased Land except for such Hazardous Material as is necessary
to conduct LESSEE's authorized use of the Leased Land.
ii) Any Hazardous Material permitted on the Leased Land as provided in this
paragraph, and all containers therefor, shall be used, kept, stored and disposed of in a manner
that complies with all Environmental Laws or other laws or regulations applicable to such
Hazardous Material.
iii) LESSEE shall not discharge, leak or emit, or permit to be discharged, leaked
or emitted, any material into the atmosphere, ground, ground water, sewer system or any
body of water, if such material (as reasonably determined by the City, or any governmental
authority) does or may, pollute or contaminate the same, or may adversely affect the (a)
health, welfare or safety of persons, whether located on the Leased Land or elsewhere; or (b)
condition, use or enjoyment of the Leased Land or any other area or personal property.
iv) LESSEE hereby agrees that it shall be fully liable for all costs and expenses
related to the use, storage and disposal of Hazardous Material kept or brought on the Leased
Land by LESSEE, its authorized representatives and invitees, and LESSEE shall give immediate
notice to CITY of any violation or potential violation of the provisions of this subparagraph.
d) Indemnification of CITY. Any other provision of this LEASE to the contrary
notwithstanding, LESSEE shall defend, indemnify and hold CITY harmless from and against
any claims, demands, penalties, fines, judgments, liabilities, settlements, damages, costs or
expenses (including, without limitation, attorney, consultant and expert fees, court costs and
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May g, 1 994
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litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise,
arising out of or in any way related to:
i) the presence, disposal, release or threatened release of any such Hazardous
Material which is on, from or affecting the Leased Land, soil, water, ground water, vegetation,
buildings, personal property, persons, animals or otherwise;
ii) any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Material;
iii) any lawsuit brought or threatened, settlement reached or government order
relating to such Hazardous Material; and/or
iv) any violation of any laws applicable thereto; provided, however, that this
provIsion shall apply only if the acts giving rise to the claims, demands, penalties, fines,
judgments, liabilities, settlements, damages, costs or expenses (a) occur in whole or in part
during or after the term of the Prior Lease or this LEASE; and (b) arise in whole or in part from
the use of, operations on, or activities on the Leased Land by Former Lessee and LESSEE or
their employers, employees, agents, invitees, contractors, subcontractors or authorized
representatives. The provisions of this subparagraph shall be in addition to any other
obligations and liabilities LESSEE may have to CITY at law or equity and shall survive the
transactions contemplated herein and shall survive the termination of this LEASE.
e) Facilitv operator. For all purposes, LESSEE shall be deemed the operator of any
facility on the Leased Land.
f) Hazardous Material defined. As used in this LEASE, Hazardous Material is any
substance which is toxic, ignitable, reactive, or corrosive or which is regulated by any
Environmental Law. Hazardous Material includes any and all material or substances which are
defined as "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, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Water Act, and the Superfund
Amendments and Reauthorization Act of 1986.
21.2 Permits and Reporting.
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a) Permits reauired bv other qovernmental aaencies. LESSEE shall obtain all permits
or approvals required by any applicable law or regulation. Copies of all such permits shall be
provided to CITY prior to LESSEE commencing work under this LEASE. LESSEE shall promptly
make all reports to any federal, state or local government or agency required by any permit
or Environmental Law, including reports of any spill or discharge of Hazardous Material. The
City Manager may order LESSEE to immediately cease any operations or activities on the
Leased Land if the same is being carried out without necessary permits, in violation of the
terms of any permit or Environmental Law, or contrary to this LEASE.
b) Correspondence with and reports to environmental aaencies. LESSEE shall
immediately provide CITY with copies of all correspondence and notice, including copies, of
all reports between LESSEE and any state, federal or local government or agency regulating
Hazardous Material which relates to LESSEE's operations on or use of the Leased Land.
cl Operatinq plan. Promptly and before operations begin, LESSEE shall furnish to CITY
a written development and clean-up plan describing in detail the operations to be conducted
on the Leased Land and the plans of LESSEE to restore the Leased Land to its original
condition.
ARTICLE 22. -- ESTOPPEL CERTIFICATES
Either party shall at any time and from time to time upon not less than ten (10) days' prior
written request by the other party, execute, acknowledge, and deliver to such party, or to its
designee, a statement in writing certifying that this LEASE is unamended and in full force and
effect (or, if there has been any amendment thereof, that the same is in full force and effect
as amended and stating the amendment or amendments), that there are no defaults existing
(or, if there is any claimed default, stating the nature and extent thereof); and stating the dates
to which the rent and other charges have been paid in advance.
ARTICLE 23. -- CONDITIONS AND COVENANTS
All the proVIsions of this LEASE shall be deemed as running with the land, and shall be
construed to be "conditions" as well as "covenants," as though the words specifically
expressing or imparting covenants and conditions were used in each separate provision.
ARTICLE 24. -- NO WAIVER OF BREACH
No failure by either CITY or LESSEE to insist upon the strict performance by the other of any
term, covenant or condition of this LEASE or to exercise any right or remedy consequent upon
a breach thereof, shall constitute a waiver of any such breach or of such terms, covenants or
conditions. No waiver of any breach shall affect or alter this LEASE, but each and every term,
covenant and condition of this LEASE shall continue in full force and effect with respect to any
other then existing or subsequent breach.
ARTICLE 25. -- TIME OF THE ESSENCE
Time is of the essence of this LEASE and of each provision.
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May 9, 1994
ARTICLE 26. -- 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 27. -- SUCCESSORS IN INTEREST
Each and all of the terms, covenants and conditions in this LEASE shall inure to the benefit of
and shall be binding upon the successors in interest of CITY and LESSEE.
ARTICLE 28. .- ENTIRE AGREEMENT
This LEASE contains the entire agreement of the parties with respect to the matters
covered by this LEASE, and no other agreement, statement or promise made by any party
which is not contained in this LEASE shall be binding or valid.
ARTICLE 29. -- GOVERNING LAW
This LEASE shall be governed by, construed and enforced in accordance with the laws of the
State of Alaska. The terms of this LEASE are subject in all respects to the Charter and Code
of Ordinances of CITY in effect on the date of this LEASE, including without limitation,
Chapter 7.05 of the Seward City Code.
ARTICLE 30... 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 31. -- RELATIONSHIP OF PARTIES
Nothing contained in this LEASE shall be deemed or construed by the parties or by any
third person to create the relationship of principal and agent or of partnership or of joint
venture or of any association between CITY and LESSEE; and neither the method of
computation of rent, nor any other provisions contained in this LEASE nor any acts of the
parties, shall be deemed to create any relationship between CITY and LESSEE other than
the relationship of lessee and lessor.
ARTICLE 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 LESSEE as both CITY and LESSEE have had the
assistance of counsel in drafting and reviewing this LEASE.
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ARTICLE 33. -- NUMBER AND GENDER
In this LEASE, the neuter gender includes the masculine and the feminine, and the singular
number includes the plural; the word "person" includes corporation, partnership, firm or
association wherever the context so requires.
ARTICLE 34. -- MANDATORY AND PERMISSIVE
"Shall," "will" and "agrees" are mandatory; "may" is permissive.
ARTICLE 35. -- 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 36. -- AMENDMENT
This LEASE is not subject to amendment except in writing executed by both parties hereto.
ARTICLE 37. -- NOTICES
All notices, demands or requests from one party to another shall be delivered in person or be
sent by mail, certified or registered, postage prepaid, to the addresses stated in this Article
and to such other persons and addresses as either party may designate. Notice by mail shall
be deemed to have been given at the time of mailing.
All notices, demands and requests from LESSEE to CITY shall be given to CITY at the
following address:
ATTN: City Manager
City of Seward
PO Box 167
Seward, Alaska 99664
All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at the
following address:
Robert H. Ferguson, III
PO Box 1 845
Seward, Alaska 99664
Each party shall have the right, from time to time, to designate a different address by notice
given in conformity with this Article.
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ARTICLE 38. -- FIRE PROTECTION
LESSEE shall at its sole cost, risk and expense provide fire protection to its operations on
the Leased Land and fire prevention to industry standards for risks to adjacent facilities
such that those risks are minimized. LESSEE shall continue to provide and maintain
industry accepted standards of fire protection such that the City of Seward's ISO rating is
not degraded by reason of LESSEE'S operation. The parties agree that with the rapid
expansion of technology in the field of fire prevention and control LESSEE's obligations
hereunder may vary during the term of this LEASE and CITY may submit LESSEE's
compliance with its obligation hereunder to arbitration not more frequently than once each
five years.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates
herein set forth.
CITY:
LESSEE:
CITY OF SEWARD
Tyler Jones
City Manager
~ ~~~-
Robert H. Ferguso, I
Date: S-/9/9r
/ /
~
By:
Its:
Date:
ATTEST:
APPROVED AS TO FORM:
WOHLFORTH, ARGETSINGER, JOHNSON
& BRECHT, Attorneys for the City of
Seward
By
Thomas F. Klinkner
City Attorney
Linda Murphy, CMC/AAE
City Clerk
(City Seal)
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STATE OF ALASKA )
) ss.
THIRD JUDICIAL DISTRICT)
THIS IS TO CERTIFY that on this ~ day of~, 1994, before me, the
~ndersigned, a Notary Public in and for the State of AlasJ.a, personally appeared
\jy~ +\.-=+- ~~lI1^- -//1 , known to me and to me known to be the individual
named in and who ijxecuted the foregoing document for the uses and purposes therein set
forth.
WITNESS my hand and notarial seal the day and year first hereinabove written.
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