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HomeMy WebLinkAboutRes1989-097 . . . Sponsored by: Schaefermever CITY OF SEWARD, ALASKA RESOLUTION NO. 89-097 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A LESS THAN FAIR MARKET VALUE LEASE OF LOT 4, FORT RAYMOND SUBDIVISION, WITH THE SEWARD CHAMBER OF COMMERCE WHEREAS, the Seward Chamber of Commerce is a non-profit organization of business and professional people working to build a healthy local economy and to improve the quality of life in Seward; and WHEREAS, the Seward Chamber of Commerce desires to construct a visitor information center/office complex to serve the business community and enhance the visitor industry in the community; and WHEREAS, the city released this property from the Air Force Recreation Camp lease with such a public purpose in mind and has no other plans nor foresees a higher and better public use for Lot 4, Fort Raymond Subdivision; and WHEREAS, in accordance with section 21.78.050 of the Seward Urban District Zoning Code, the City Council finds that the proposed visitor information center is compatible with the Seward Land Use Plan and Zoning code designation for Lot 4, Fort Raymond Subdivision; and WHEREAS, the City Council finds that it is in the public interest to lease Lot 4, Fort Raymond SUbdivision, to the Seward Chamber of Commerce for operation of a visitor information center/office complex; and WHEREAS, it is in the public interest to waive the requirement for an appraisal of the property to be leased to the Seward Chamber of Commerce; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The lease agreement attached and incorporated herein by reference as Exhibit A is hereby approved. section 2. It is in the public interest to not require the disposal of the land subject to the lease agreement by public bid or auction. -1- . . CITY OF SEWARD, ALASKA RESOLUTION NO. 89-097 Section 3. It is in the public interest to waive an appraisal of the property. Section 4. This resolution shall take effect thirty days after the date of passage and posting as required by law. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 28th day of August, 1989. AYES: NOES: ABSENT: ABSTAIN: ATTEST: THE CITY OF SEWARD, ALASKA Gieseler, Hilton, Noll, Simutis Dunham, O'Brien None Meehan APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska . (City Seal) 11 / (fl/J;~ J~ Fred B. Arvidson City Attorney -2- j . LEASE AGREEMENT . THIS AGREEMENT made and entered into this day of 1989, by and between the eITY OF SEWARD, a home rule municipal corporation, located in the Kenai peninsula Borough, State of Alaska, hereinafter referred to as "City", and SEWARD CHAMBER OF COMMERCE, a non-profit corporation, hereinafter referred to as "Lessee". WIT N E SSE T H: WHEREAS, eity and Lessee are mutually interested in the development of the visitor industry with the City of Seward, Alaska; and ~ I WHEREAS, ei ty and Lessee are mutually interested in II enhancing the self reliance of the Seward ehamber of Commerce through its sponsored activities; and WHEREAS, Lessee has demonstrated its commitment to the residents, visitors, and businesses of Seward, Alaska; and WHEREAS, eity, as expressed more fully in the eity Council Resolution No. 89- , has determined that Lessee's intentions and general development plans coincide with the public interest of the eity; and WHEREAS, City and Lessee have reached agreement on the land City is to lease to Lessee, and the general terms and conditions of such a lease; FOR AND IN CONSIDERATION OF THE RENTS, COVENANTS, AND CONDITIONS HEREIN eONTAINED, CITY AND LESSEE AGREE AS FOLLOWS: ARTIeLE I. DEMISE. eity leases to Lessee, and Lessee leases from City that certain real property herein called "Leased Land", situated in Seward, Alaska, consisting of ! approximately 43,778 square feet (1.005 acres), as shown on . I Chamber of Commerce VIe Lease Page 1 i Exhibit A attached hereto and as more particularly described as follows: Lot 4, Fort Raymond Subdivision as 10, Seward Recording District, District, State of Alaska shown on Plat 86- Third Judicial ARTICLE II. CITY'S WARRANTY OF OUIET ENJOYMENT. Lessee, upon observing and keeping the covenants, conditions and terms of this Lease on Lessee's part to be kept or performed, shall ! peacefully and quietly enjoy possession of the Leased Land during the term of this Lease subject to the limitations and conditions set forth in this Agreement. ARTICLE III. LEASED LAND ACCEPTED "AS IS". Lessee i acknowledges that it has inspected the Leased Land and accepts the same "as is" and without reliance on any representations or warranties of City, or agents of eity, as to the physical condition thereof, except as expressly herein provided. ARTICLE IV. USE OF LEASED LAND. 1. Lessee may use the Leased Land for a Chamber of Commerce office/visitor information center. Lessee understands i; that operation of such a facility is a major consideration for City's agreement to lease the Leased Land. Lessee agrees that it will not operate any other business on the Leased Land without the consent of City. Moreover, City may withhold its consent as to any proposed business or activity which, in City's sole discretion, is not desirable or compatible with eity's comprehensive plan. City may refuse to consent to any proposed business or activity which is not a non-profit enterprise. 2. No assignment or sublease shall be permitted unless approved in writing by City. Any sublease shall be expressly subject and subordinate to this Lease and the rights of City hereunder. eity may elect to not approve any proposed assignment or sublease which may result in a business or activity which, in eity's sole discretion, is not desirable or Chamber of Commerce VIe Lease Page 2 II . compatible with City's comprehensive plan and/or other applicable land use regulations. 3. So long as this lease is in effect, the Lessee will allow the City to place and maintain public information signs, including visitor information signs on the leased land equivalent to the signs intended to be placed on the leased land by the City in 1989-90 and approved by the City Council at its meeting of August 28, 1989. . ARTICLE V. ELECTION TO TERMINATE BY CITY. Lessee, as partial consideration for this Lease, expressly undertakes 1) to operate a Chamber of Commerce office/visitor information center; 2) to substantially complete construction of a building of not less than 1,000 square feet, excluding porches and eaves, not later than December 31, 1989; 3) to provide an attractive vegetative screen or fence between the lease site and the adjacent cemetery; 4) to allow no outside storage on site; 5) to allow no overnight occupancy; and 6) to continuously maintain the Alaska Railroad Car currently housing the Visitor's eache at the intersections of Third Ave and Jefferson Street in Seward, for public purposes and use, provided that the obligation of Lessee so to do may be waived by the City upon demonstration that continued maintenance or operation would be impracticable. If Lessee fails to meet any of these requirements in a timely manner, City may, by giving written notice to Lessee, elect to terminate this Lease. All further rights, duties and obligations hereunder shall cease upon receipt by Lessee of such notice. . ARTICLE VI. LEASE TERM. 1. Commencement and EXDiration. The initial term of this Lease shall commence thirty days after posting of Resolution 89-097 and end on June 30, 2000. 2. Extensions. By mutual agreement of the parties, ! there may be up to two extensions of this lease, each for a li '; , i , I Chamber of Commerce VIe Lease :1 :, Page 3 period of Five (5) years, but by inaction of the parties, the Lease shall be deemed to continue from month to month. This lease will not terminate until notice, in writing, is given by either party to the other, not later than three months prior to the expiration of the lease term or any extension thereof. All terms and condi tions of the lease are to be reviewed and mutually agreed upon prior to either extension taking effect. 3. Holdover. If Lessee shall hold over after the expiration of the Lease Term, such tenancy shall be from month to month on all the terms, covenants and conditions of this Lease. 4. Surrender of Possession. a) Subject to the provisions of ARTICLE XI below with respect to restoration of buildings and improvements, upon expiration of the Lease Term, whether by lapse of time or otherwise, Lessee shall promptly and peacefully surrender the Leased Land. b) Upon the expiration of the Lease Term or any sooner termination of this Lease, Lessee agrees to execute, acknowledge and deliver to City a proper instrument, in writing, :! releasing and quit-claiming to City all right, title and interest of Lessee in and to the Leased Land and all '1 improvements thereto not removed by Lessee as provided herein. be ARTICLE VII. determined and 1 . Any and RENT. The rental for the leased land shall paid as follows: all annual rental due under this Lease shall be paid in advance, upon commencement of this Lease, in quarterly installments, with the first installment due on or before commencement of this Lease, and successive installments due on or before successive quarters, beginning January 1, March 1, July 1 and October 1, except as otherwise provided. 2. The rental shall be determined as follows: (a) During the initial term there shall be no rent due under this lease so long as the site is used by Lessee for the Chamber of Commerce VIe Lease Page 4 operations of a Chamber of Commerce office/visitor information center. (b) Should City and Lessee mutuall agree to extend this lease beyond the initial term, a new lease rate shall be negotiated not later than 60 days prior to the initial term expiration (or the expiration of the initial lease extension) and take into consideration the value of the land based upon then current zoning and lanmd use designation; the public contribution of the Chamber operations to the communityp and site improvements made by Lessee. 3. Additional rent and Citv's Riaht to Cure Lessee's Defaults. All costs and expenses which Lessee assumes or agrees to pay pursuant to this Lease, or to any mortgage or other encumbrance upon the Leased Land or lessee's leasehold interest ! shall, at city's election, be treated as additional rent and, in 'I il the event of non-payment, City shall have all rights and I remedies herein provided for in the case of non-payment of rent I or of a breach of condition. If Lessee shall default in making : I any payment required to be made by Lessee, or shall default in ! performing any term, covenant or condition of this Lease or of Ii ;1 any such mortgage or other encumbrance on the part of Lessee to , ,I be performed which shall involve the expenditure of money by ;1 Lessee, eity, at City's option, may, but shall not be obligated 'I :i to, make such payment, or, on behalf of Lessee, expend such sum 'i as may be necessary to perform and fulfill such term, covenant ! , or condition, and any and all sums so expended by City, with interest thereon at the maximum rate under the laws of the State of Alaska from the date of such expenditure until repaid, shall be (and shall be deemed to be) additional rent and shall be repaid by Lessee to city, on demand, but no such payment or expenditure by City shall be deemed a waiver of Lessee's default, nor shall it affect any other remedy of City by reason of such default. 4. Late Payment Penal tv. Rental payment due, but not received by the due date shall be subject to a ten (10%) percent . . . Chamber of Commerce VIe Lease Page 5 delinquency fee, plus one and one-half (1.5%) percent interest per month or the maximum permitted rate under Alaska law, whichever is higher, until paid. ARTICLE VIII. Referendary Petition. The parties understand, and LESSEE is specifically taking the risk that under the Charter and Ordinance provisions for the City of Seward, this lease agreement may be voided by a referendum vote of the people, and that the grant to LESSEE of the right to I possession of the leased premises prior to the passage of thirty (30) days from the date of approval of this lease by the City Council for the City of Seward shall in no way affect or reduce the rights of the voters to reject this lease agreement, in which case LESSEE shall not be entitled to any damages, or any other recovery against CITY. Permitting LESSEE to occupy the land in advance of the lapse of thirty (30) days is for the convenience of LESSEE only and should not be construed as granting any interest in the leased land should this lease be defeated in a referendum election. ARTICLE IX. NO PREFERENTIAL RIGHTS TO USE PUBLIC I FACILITIES. This lease agreement shall not be construed to grant any preferential rights of use to LESSEE of any public I facilities constructed or maintained by the City of Seward. 'I Insofar as use of those facilities is concerned, LESSEE will be subject to any applicable tariffs, procedures, rules and regulations of the City of Seward as they may now exist or from time to time be amended and LESSEE shall not be entitled to any preferential use. The City makes no representations or warranties as to any particular part or the whole of CITY's public facilities with respect to their fitness for the uses intended by LESSEE, and LESSEE has inspected those facilities I and has satisfied itself that the facilities are sufficient for the intended uses by LESSEE. I 'I Chamber of Commerce VIe Lease Page 6 ....~.. .__.iIIi. '...... . . . 1. Right to Provide Substitute Leased Land. CITY has limited land available for lease and LESSEE's intended use of the leased land has been determined by the City Council to be in the public interest. LESSEE understands that there may be competing uses for the leased land which uses may be determined by the eity eouncil to be of greater public interest and in that event, CITY reserves to right to one time, relocate LESSEE from its present leasehold as described in Exhibit A of this lease to a comparable new location selected by the CITY and accepted by LESSEE which acceptance shall not be unreasonably withheld. In the event of such a relocation, CITY shall not be responsible to LESSEE for any of LESSEE's costs associated with the relocation other than direct costs of moving any structure. CITY shall not be responsible for payment of any amounts of lost profits, incidental or consequential damages or any other costs or expenses as the result of CITY's exercise of its rights under this provision. eITY shall provide written notice to LESSEE no less than one hundred twenty (120) days in advance of its intent to require LESSEE to move LESSEE's facilities. ARTICLE X. TAXES AND ASSESSMENTS 1. Lessee to Pav Taxes: Lessee agrees to pay, prior to delinquency and directly to the taxing authorities in which the Leased Land is located, all real property taxes (plus all personal property taxes on personal property situate on the Leased Land and placed thereon by Lessee or under Lessee's authority), sales taxes, or other business or use taxes levied or assessed upon or against the Leased Land or any improvements thereon or Lessee's business during the Lease Term. Lessee agrees to indemnify and hold City harmless from liability for any other tax, charge, or assessment of any kind of nature. Lessee shall, within sixty (60) days after any such tax assessment, or other charge constituting a lien on the Leased Land, shall become due and payable, produce and exhibit to City satisfactory evidence of payment. Chamber of Commerce VIe Lease Page 7 2. Lessee to Pay Assessments. Lessee, during the Lease Term, agrees to pay directly to the public authorities charged work or improvement assessed according to benefit found by the levying authority to accrue therefrom to the Leased Land, including any charges for anti-pollution, environmental, ecological or any other public purposes. If an option is given to pay such assessment(s) in installments, Lessee may elect to pay the same in installments, and, in such case, Lessee shall be liable only for such installments as shall accrue during the Lease Term. 3. Pro-ration of Taxes and Assessments. If Lessee's obligation to pay taxes or assessments commences or ends during a tax year, such obligation shall be appropriately pro-rated, 'I with eity bearing the remaining cost (or its pro rata share) thereof. II 4. Contest. Lessee shall have the right to contest or , ;i review any tax, assessment, levy, fee, water or sewer charges or rents, or any other governmental charges which Lessee is obligated to pay. Such proceedings shall, if instituted, be conducted promptly at Lessee's own expense and free from all expense to City. Before instituting any such proceedings, Lessee shall pay, under protest, such tax, assessment, levy, I : i fee, water or sewer rents or charges or any other governmental charges, or shall furnish to City a surety company bond in a company acceptable to City, or other security reasonably satisfactory to City, sufficient to cover the amount of the contested item or items, with interest for the period of time which such proceedings may be reasonably expected to take, and costs of securing payment of such contested item or items and all interest and costs in connection therewith when finally determined. Notwithstanding the furnishing of any such bond or security, Lessee shall pay all such items at least twenty (20) days before the time when the Leased Land or any part thereof might be forfeited. The legal proceedings herein referred to shall include appropriate certiorari proceedings and appeals Page 8 Chamber of Commerce VIe Lease . . . 'I from any orders and judgments therein, but all such proceedings shall begin as soon as reasonably possible after the imposition or assessment of any contested items and shall be prosecuted to final adjudication with reasonable dispatch. In the event of any reduction, cancellation or discharge, Lessee shall pay the amount that shall be finally levied or assessed against the Leased Land or adjudicated to be due and payable and, if there shall be any refund payable by the governmental authority with respect thereto, Lessee shall be entitled to receive and retain the same, subject, however, to apportionment as provided in Paragraph 3 above during the first and last years of the Lease Term. City, at City's option, may, but shall not be obligated to, contest or review by legal proceedings, or in such other manner as may be legal and at City's own expense, any tax, assessment, levy, fee, water or sewer rents or charges, or any other governmental charge aforementioned, which shall not be contested or reviewed as aforesaid, and unless Lessee shall promptly join in such contest or review and pay all costs therein, the City shall be entitled to receive and retain any refund payable by the governmental authority with respect thereof. 5. Lessee to Pay Utility Charaes. Lessee shall payor cause to be paid all charges for water, heat, gas, electricity, sewers, and any and all other utilities used upon the Leased Land throughout the Lease Term, including any connection fees. ARTICLE XI. CONSTRUCTION BY LESSEE. 1. Lessee~ Riaht to Build - General Conditions. Lessee shall have the right, at any time and from time to time during the Lease Term, to construct, maintain, alter, remodel, reconstruct, rebuild and replace building (s ) and other improvement(s) on the Leased Land, subject to approval of the City and the following conditions: Chamber of Commerce VIe Lease Page 9 in the condemning authority and the condemning authority enters into possession, but shall continue in full force and effect as to the portion of the Leased Land not so taken or transferred. ARTICLE XVIII. ARBITRATION. Any controversy or claim arising out of or relating to this Lease, or the breach thereof, shall be settled by arbitration in accordance with the Uniform Arbitration Act of Alaska, and judgment upon the award may be entered in any court having jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three (3) arbitrators in the city of Seward, Alaska, or, with the consent of both parties, in Anchorage, Alaska. ARTICLE XXI. DEFAULT AND REMEDIES. 1. Default and Termination. a) If the rent or any other charge shall be in arrears for a period of thirty (30) days; or b) if Lessee fails to take reasonable steps to keep and perform any of the covenants or conditions of this Lease within thirty (30) days after written notice of default; or c) if Lessee files a voluntary petition in bankruptcy, or for reorganization under the bankruptcy laws, or is adjudged a bankrupt by a court of competent jurisdiction; or d) if Lessee makes an assignment for the benefit of , its creditors; or e) if a receiver is appointed by a court of competent jurisdiction for Lessee's business, and it be established in the receivership proceedings that Lessee is insolvent, or f) if the leasehold interest hereunder is abandoned by Lessee; then: City may, at City's option, at once and without further notice to Lessee or any other person, terminate this Lease. Upon termination of this Lease as aforesaid, or at the expiration of this Lease and upon the termination of said Lease by its terms, . i Chamber of Commerce VIe Lease Page 16 . a) The cost of any construction, reconstruction, demolition, or of any change, alteration or improvements, shall be borne and paid for by Lessee. b) The Leased Land shall, at all times, be kept free of mechanic's, materialmen's, and any other liens, as hereinafter more specifically provided. c) Any building contractors employed by Lessee or its sub-lessees shall be appropriately bonded for one hundred percent (100%) of the contract amount(s) by use of performance , and labor and materials payment bonds in the customary form when ! cost of the work is over $10,000.00. Copies of all such bonds shall be furnished to the City prior to commencement of construction. d) Lessee, upon commencement of permissible building or construction activities on the Leased Land, shall continue I such activities through to completion with diligence and ,I , continuity. :1 e) Commencement of construction shall mean having II materials and labor on site. Commencement of construction shall take place within ninety (90) days of the signing of this Lease. 2. Lessee's Ownershio of Trade Fixtures, Machinery and Equipment. It is expressly understood and agreed that any and all trade fixtures, machinery and equipment of whatsoever nature at any time constructed, placed or maintained upon any part of the Leased Land by Lessee shall be, and remain, the property of Lessee or its tenants, as their interests may appear, and may be removed or replaced at any time during the Lease Term, provided Lessee or its tenants repair any and all damage to the Leased Land resulting from such removal or replacement. 3. Lessee's Right to Remove Imorovements and Ownership Thereof. Lessee shall have the right, prior to the expiration of the Lease, to remove any buildings or improvements constructed or placed upon the Leased Land by Lessee. Any buildings or improvements not removed prior to the expiration of . . : I Chamber of Commerce VIe Lease I Page 10 the Lease shall become the property of City without the payment of any compensation to Lessee. ARTICLE XII. LIENS. 1. Prohibition of Liens on Fee or Leasehold Interest. Lessee shall not suffer or permit any liens to be filed against i .1 the fee of the Leased Land, nor against Lessee's leasehold interest in the Leased Land, nor against any buildings or improvements on the Leased Land, by reason of any work, labor, services or materials supplied, or claimed to have been supplied, to Lessee or anyone holding the Leased Land, or any part thereof, through or under Lessee. 2. Removal of Liens bv Lessee. If any lien shall be recorded against the Leased Land, or any improvements thereof, Lessee shall cause the same to be removed, or, in the alternative, if Lessee, in good faith, desires to contest the ,1 same, Lessee shall be privileged to do so, but, in such case, Lessee hereby agrees to provide a surety bond from a surety . I licensed to do business in Alaska in a penal sum equal to one , and one-half times the amount of the claim of lien, which bond shall guarantee the payment of the sum which the lien claimant has claimed, together with the lien claimant's reasonable cost of suit in the action. Lessee further agrees to indemnify, defend, and save City harmless from all liability for damages occasioned thereby and shall, in the event of a judgment of foreclosure upon said lien, cause the same to be discharged and removed prior to the execution of such judgment. 3. Notice of Non-ResDonsibility. City may, as contemplated by Alaska statutes 34.35.065 (as now enacted or hereinafter amended), give notice of non-responsibility for any improvements constructed or made by Lessee on the Leased Land. ARTleLE XIII. acts caused by the Lessee agrees to INDEMNITY. Except for claims arising out of negligence of City or its representatives, protect, indemnify, defend and hold City Chamber of Commerce VIe Lease Page 11 . . . harmless from and against any and all liability arising from acts or omissions of any nature whatsoever of Lessee' officers, servants, employees, contractors, tenants, agents or invitees, causing injury to or death of persons, or loss of or damage to property, during the Lease Term, and from any expense incident to defense of and by eity therefrom. If any action or proceeding is brought against City by reason of any such occurrences, City shall notify Lessee, in writing, of such action or proceeding, whereupon Lessee, at Lessee's expense, may elect to resist or defend such action or proceeding by counsel approved, in writing, by City, such approval not to be withheld unreasonably. ARTICLE XIV. INSURANCE AND RESTORATION. 1. Liability Insurance. Lessee, during the Lease Term, shall provide an insurance endorsement showing City as co- insured in an amount of not less than $300,000 comprehensive general liability coverage for premises operations, broad form property damage and personal injury. The minimum requirements in this section may be increased from time to time by City in accordance with customs and usage for comparable property in the Seward metropolitan area. 2. Fire and Extended eoveraqe Insurance. Lessee, during the Lease Term, shall, at its own expense, keep all buildings and improvements insured against loss or damage by fire and such other risks as may be included in the customary form of broad form extended coverage (which may exclude earthquakes), in an amount, over and above any deductibles in the governing policies, of not less than the unpaid balance(s) due under any existing deed(s) of trust or mortgage(s) encumbering the buildings or improvements or City's fees. 3. Blanket Insurance. Lessee may provide any insurance required by this Lease in the form of a blanket policy, provided Lessee furnishes evidence satisfactory to eity, indicating the Chamber of Commerce VIe Lease Page 12 coverage thereunder is at least equal to the coverage obtainable under a separate policy covering the Leased Land only. 4. Additional Named Insured: Riahts of Mortgagors (Lenders I : Waiver of Subroaation. All insurance policies required to be maintained by Lessee shall name Lessee and City as the insureds, as their respective interests may appear. All policies shall contain an agreement by the insurers that such policies shall not be cancelled without at least thirty (30) days' prior written notice to City, and certificates or copies of all such insurance policies shall be furnished to City promptly after the issuance thereof. 5. Restoration of Buildinas and Improvements. In the event of damage to or destruction of any of the buildings or improvements situated on the Leased Land, then, from the insurance proceeds payable to Lessee, Lessee shall, within ninety (90) days after payment of the insurance proceeds, commence Restoration of the buildings and improvements to their condition prior to such damage; provided, however, Lessee's ,j obligation to restore will be limited to the insurance proceeds I available to Lessee. All such insurance proceeds shall be ii deposited and held in trust in such bank having offices in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's mortgagor of the damaged property, and shall be I made available to Lessee for its use in restoration or repair, as the case may be, of any damage or destruction to the buildings and improvements on the Leased Land. The proceeds of insurance shall be paid out by such trustee or mortgagee from time to time on certification of the person having supervision of the work that the amount certified is being applied to payment of the reasonable cost of such work. ARTICLE XV. eARE OF LEASED LAND. ACCESS OF THE eITY. 1. Care of Leased Land. Lessee, at its own cost and I expense, shall keep the entire Leased Land and all buildings and Chamber of Commerce VIe Lease Page 13 . improvements which at any time may be situated thereon in good, clean and tidy condition and repair during the Lease Term. 2. Other Access Riahts of City. City and its agents or representatives shall have the right to enter into and upon the i Leased Land during reasonable hours for the purpose of inspecting the Leased Land and all buildings and improvements thereon. 3. Avoidance of prescriotive Rights. Lessee shall take ., such action as may be necessary to preserve City's title and :1 : i ownership of the Leased Land free and clear of any public or , :1 private rights-of-way, easements or other interests acquired by 'j prescriptive use or otherwise than as permitted under this I Lease, including, but not limited to, the posting of ,I thoroughfares, walkways and parking areas so as to preserve the : i right of private ownership therein and prevent any adverse : I rights thereto accruing through prescriptive use or otherwise ii ,: than as permitted hereunder. I , , , . i ARTIeLE XVI. COMPLIANCE WITH LAWS. 1. Compliance with Laws. Lessee shall comply with all , :1 applicable laws, ordinances and regulations of duly constituted .. , public authorities now or hereafter in any manner affecting the ,I Leased Land or any buildings, structures or improvements i :1 situated thereon, whether or not any such laws, ordinances or ! regulations which may be hereafter enacted involve a change of :; ,! policy on the part of the governmental body enacting the same. Lessee further agrees it will not permit any unlawful occupation, business or trade to be conducted on said premises or any use to be made thereof contrary to any law, ordinance or regulation as aforesaid with respect thereto. 2. Contest. Lessee may, by appropriate proceedings conducted at Lessee's own expense, contest, in good faith, the validity or enforcement of any law, ordinance or regulation, provided Lessee diligently pursues such contest to a final determination by a court, department or governmental authority . . Chamber of Commerce VIe Lease Page 14 or body having jurisdiction thereof; provided that, if City may become liable in any manner for damages, penalties, files or costs by reasons of Lessee's failure to comply with any such law, ordinance or regulation during Lessee's contest thereof, then, as a condition precedent to the commencement and I continuation of such proceedings, Lessee shall furnish City such bond with corporate surety as City shall reasonably request to save harmless and indemnify City against liability for any such i damages, penalties, fines or cots. At City's option, it may, at its own expense, contest the validity or enforcement of any such law, ordinance or regulation. ARTICLE XVII. EMINENT DOMAIN. 1. Interest of Parties in Condemnation. In the event the Leased Land, or any part thereof, shall be taken for public 'I purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, the interests of City and Lessee in the award of consideration for such transfer and the effect of the taking or transfer upon this Lease shall be as provided by law. In the event the extent of the taking makes impracticable the continued operation of Lessee's facility, upon written notification by Lessee, this Lease and all of the right, title, and interest thereunder of Lessee shall cease on the date title to such Land so taken or transferred vests in the condemning authority. 2. Partial Takinq - Continuation of Lease. In the event the taking or transfer of a part of the Leased Land leaves the remainder of the Leased Land in such location and in such form, shape or size, or so accessible as to be effectively and practicably usable in the opinion of the Lessee and City for the purpose of operation thereon of Lessee's business, this Lease shall terminate and end as to the portion of the Leased Land so taken or transferred as of the date title to such portion vestf Chamber of Commerce VIe Lease Page 15 . in the condemning authority and the condemning authority enters into possession, but shall continue in full force and effect as to the portion of the Leased Land not so taken or transferred. ARTICLE XVIII. ARBITRATION. Any controversy or claim arising out of or relating to this Lease, or the breach thereof, shall be settled by arbitration in accordance with the Uniform Arbitration Act of Alaska, and judgment upon the award may be entered in any court having jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three (3) arbitrators in the city of Seward, Alaska, or, with the consent of both parties, in Anchorage, Alaska. . ARTICLE XXI. DEFAULT AND REMEDIES. 1. Default and Termination. a) If the rent or any other charge shall be in arrears for a period of thirty (30) days; or b) if Lessee fails to take reasonable steps to keep and perform any of the covenants or conditions of this Lease within thirty (30) days after written notice of default; or c) if Lessee files a voluntary petition in bankruptcy, or for reorganization under the bankruptcy laws, or is adjudged a bankrupt by a court of competent jurisdiction; or d) if Lessee makes an assignment for the benefit of its creditors; or e) if a receiver is appointed by a court of competent jurisdiction for Lessee's business, and it be established in the receivership proceedings that Lessee is insolvent, or f) if the leasehold interest hereunder is abandoned by Lessee; then: City may, at City's option, at once and without further notice to Lessee or any other person, terminate this Lease. Upon termination of this Lease as aforesaid, or at the expiration of this Lease and upon the termination of said Lease by its terms, . Chamber of Commerce VIe Lease Page 16 Lessee shall at once surrender possession of the Leased Land to City and remove all of Lessee's effects therefrom, and may remove all Lessee's buildings and other improvements, and Lessee shall have no further rights hereunder or with respect to the f Leased Land. If such possession be not immediately surrendered, City may forthwith enter into and upon and repossess the Leased Land and expel Lessee, or those claiming under Lessee, without i ,i being deemed guilty in any manner of trespass, and without i I prejudice to any remedies which might otherwise be used for i ! arrears of rent or preceding breach of covenant, and, in such event, Lessee expressly waives the service of notice of any Land, and waives service of any demand for payment of rent or !I i i for possession and for any and every other notice or demand 1,:,..11 prescribed by any law and hereby waives any claim for damages by reason of such repossession. i! 2. Relettinq. At any time, or from time to time, after I I any such expiration or termination, City may relet the Leased 'I I , Land, or any part thereof, and any unleased buildings and d improvements, for such term or terms (which may be greater or " I less than the period which would otherwise have constituted the ,i balance of the term of this Lease) and on such conditions (which may include concessions or free rents) as City, in its sole discretion, may determine and may collect and receive the rents therefor. City shall in no way be responsible or liable for any f failure to relet the Leased Land, or any part thereof, or for ! any failure to collect any rent due upon any such reletting. 3. Damages. No such expiration or termination of this Lease shall relieve Lessee of its liability and obligations under this Lease, and such liability and obligations shall survive any such expiration and termination. 4. Accumulation of Remedies. Each right and remedy of i City provided for in the 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' :1 Chamber of Commerce VIe Lease Page 17 . exercise by City of anyone or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or 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 hereafter existing at law, or in equity, or by statute, or otherwise. 5. Appointment of Receiver. Upon the commencement of any suit or action by City against Lessee, pursuant to any remedy available to City upon Lessee's default hereunder, or at any time thereafter and during the pendency of such suit or action, any court of competent jurisdiction, upon the application of eity, may at once and without notice to Lessee, its successors or assigns, or any person claiming any security interest through Lessee, appoint a receiver to collect the rents and profits arising out of the Leased Land, the buildings and improvements thereon and the sub-leases pertaining thereto, and apply such rents and profits to the payment and satisfaction of Lessee's obligations under this Lease, including, without limitation, the payment of the rent due City hereunder, first deducting all proper charges and expenses attending the execution of such trusts, and to have any balance remaining held by such receiver for disposition in accordance with any judgment or decree entered therein or as may be, from time to time, directed by said court. . . ARTleLE xx. GENERAL PROVISIONS. 1. 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. 2. No Waiver of Breach. No failure by either eity or Lessee to insist upon the strict performance by the other of any covenant, agreement, term or condition of this Lease or to Chamber of Commerce VIe Lease Page 18 exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement and term of this Lease shall continue in full force and effect with respect to any other then-existing or subsequent breach. 3. Time of Essence. Time is of the essence of this Lease and of each provision. 4. ComDutation of Time. The time in which any act provided by this Lease is to be done is computed by excluding the first day and including the last, unless the last day is a Saturday, Sunday or a holiday, and then it is also excluded. The term KholidayK shall mean all holidays as defined by the statutes of Alaska. 5. Successors in Interest. Each and all of the covenants, conditions and restrictions in this Lease shall inure to the benefit of, and shall be binding upon, the successors in interest of City and the authorized assignees, transferees, tenants, licensees and other successors-in-interest of Lessee. 6. 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, or to any employee, officer or agent of any party, which is not contained in this Lease shall be binding or valid. 7. Governinq Law. This Lease shall be governed by, construed and enforced in accordance with, the laws of the state of Alaska. 8. Partial Invaliditv. If any term, covenant, condition or provision of this Lease is held by a court of competent ) jurisdiction to be invalid, void or unenforceable, the remainder " of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 9. Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties or by any . : Chamber of Commerce VIe Lease I I Page 19 . 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 City and Lessee. 10. Interpretation. The language in all parts of this Lease shall, in all cases, be simply construed according to its fair meaning and not strictly for or against City or Lessee. Unless otherwise provided in this Lease, or unless the contexts otherwise requires, the following rules of construction shall apply to this Lease: a) Number and Gender. In this Lease, the neuter gender includes the masculine and the feminine, and the singular number includes the plural; the word "person" includes corporation, partnership, firm or association wherever the context so requires. b) Mandatorv and Permissive. "Shall," "will" and "agrees" are mandatory; "may" is permissive. c) Captions. Captions of the Articles, Sections and sub-sections of this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, or aid in the interpretation, construction or meaning of the provisions of this Lease. 11. Amendment. This Lease is not subject to amendment, except in writing executed by all parties thereto. 12. a) Deliverv of Notices and Rent - Method and Time. 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 Section, and shall be deemed to have been given at the time of delivery or making. . . Chamber of Commerce VIe Lease Page 20 b) Pavment of Rent. All rents and other sums payable by Lessee to City shall be by check, payable to City, delivered in person or mailed to City at the following address: CITY CLERK CITY OF SEWARD P. O. Box 167 Seward, AK 99664 and shall be deemed to have been paid when received at such address. :1 I ,! c) Notices to City. :1 requests from Lessee to City shall be give to City at: 'I CITY CLERK I, : I CITY OF SEWARD I P. O. Box 167 Seward, AK 99664 All notices, demands and ii ~I and to such other persons at such additional addresses as City i! may specify, but not exceeding four in aggregate. I d) Notices to Lessee. All notices, demands or I requests from City to Lessee shall be given to Lessee at: SEWARD CHAMBER OF COMMERCE P. O. Box 749 Seward, AK 99664 '1 e) Chance of Address. Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this section. 13. Broker's Commission. Each of the parties represents and warrants that there are no claims for brokers' commissions or finders' fees in connection with the execution of this Lease. i 14. Attornevs' Fees. If either party hereto institutes I any suit, action or arbitration proceeding to collect the rent , reserved, or to enforce any covenant or agreement hereof, or to , obtain any of the remedies herein provided, the prevailing party I shall be entitled to such sum of money as the court or the arbitration board may adjudge reasonable as costs and attorneys' fees in such suit, action or arbitration proceeding, including 'I Chamber of Commerce VIe Lease Page 21 . any appeal taken by either party in such suit, action or arbitration proceeding. 15. Records. Lessee shall, at all times, keep or cause to be kept proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of, or in relation to, the Leased Land. 16. Minerals. Nothing in this Lease shall authorize Lessee to exercise any rights in regard to oil, oil rights, minerals, mineral rights, natural gas, natural gas rights, and/or other hydrocarbons by whatsoever name that may be within or under the Leased Land. City reserves the right to whipstock or directionally drill and mine from land other than the Leased Land oil or gas wells, tunnels and shafts into, through or across the subsurface of the Leased Land, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines, without, however, the right to disturb the use of the surface or to drill or mine through the upper 500 feet of the subsurface of the Leased Land. 17. Good Faith. The terms of this Lease impose an obligation of good faith on City and Lessee in the performance and enforcement thereof. 18. Election to Terminate by Lessee. If an earthquake occurs during the term hereof, making the construction, financing, maintenance or operation of an improvement(s), building(s) or other structure(s) on the Leased Land impractical or impermissible, then, in such event, provided the Lessee be in good standing hereunder, the Lessee may, in its uncontrolled discretion, elect to terminate this Lease upon: a) giving written notice to City; and b) making payment to City of a sum equal to fifty (50%) percent of the rents payable to eity for the twelve (12) calendar months immediately preceding the notice under (a); and . . Chamber of Commerce VIe Lease Page 22 c) satisfying or otherwise releasing City's fee from any encumbrance(s) created as the result of Lessee's actions. All further rights, duties and obligations hereunder shall cease I,.' upon receipt by City of such notice of election to terminate and II II the fulfilling of conditions (b) and (c). I' 1,.1 19. Other Conditions. City reserves the right to relocate the building, at City expense, should such a move be necessary II II to accomplish the overall Harbor Boardwalk Project. i I I I I i I I <, ARTICLE XXI. RECORDING, EXECUTION, COUNTERPARTS. 1. Recording. The parties may, concurrently with the execution of this Lease, execute, acknowledge and record a memorandum of lease. Following recording, the memorandum of lease shall be attached to this Lease. j I 2. Counterparts. This Lease has been executed by the l' ; 1 parties in two counterparts, each of which shall be deemed to be . i an original. I 3. Execution. , i parties on the day and year first above written. I , i tl ., 11 '1 This executed by the Lease has been LESSOR: CITY OF SEWARD, ALASKA LESSEE: SEWARD eHAMBER OF COMMERCE 1 i City Manager ITS: ITS: ATTEST: APPROVED AS TO FORM: PERKINS COIE, Attorneys for City of Seward, Alaska " i! Linda S. Murphy, CMC/AAE , City Clerk Fred B. Arvidson (City Seal) Chamber of Commerce VIe Lease Page 23 . . . .1 '1 STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on this day of June, 1989, before me, the undersigned, a Notary Public in and for the State of Alaska, personally appeared and , known to me and to me known to be the individuals named in and who executed the foregoing document, and they acknowledged to me that they were authorized to execute the foregoing document by authority granted them in the Bylaws or by resolution of the Board of Directors of said corporation 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: Chamber of Commerce VIe Lease Page 24