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HomeMy WebLinkAboutRes1987-028 . . . Sponsored by: Garzini CITY OF SEWARD, ALASKA RESOLUTION NO. 87-028 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE NEGOTIATION OF A LONG TERM LEASE OF SEWARD SMALL BOAT HARBOR BOARDWALK LEASE SITE NO. 5 TO MICHAEL G. MCKERN WHEREAS, the city has been methodically enhancing the Small Boat Harbor waterfront through the lease of sites for business and visitor enhancement; and WHEREAS, four previous lease sites have been developed, two through a formal RFP process and, subsequently, two more on a first come, first serve basis, adhering to the price and standards set by the city council; and WHEREAS, Michael G. McKern, dba Captain Hook Charters, has shown an established interest in doing business in the Small Boat Harbor since the spring of 1986, and did sublease a boardwalk building for the 1986 season; and WHEREAS, the success of the previous four buildings indicates that the last two planned sites should be leased; and WHEREAS, Michael G. McKern has requested that he be allowed to lease Boardwalk Site No. 5 for the establishment of a charter fishing/sightseeing business; and WHEREAS, the proposed use is in harmony with the planned acti vi ties of the harbor, the proposed structure meets the quality of construction desired in the harbor, and the lease terms will be the same as previous leases; and WHEREAS, based on these facts, it would not be in the public interest to expend time and funds seeking proposals through a formal proposal process; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager enter into a lease, attached and reference, with Michael G. McKern Harbor Boardwalk Lease Site No.5. is hereby authorized to incorporated herein by for Seward Small Boat -1- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 87-028 Section 2. Be it further resolved that the Seward City Council finds it to be in the public interest to negotiate said lease rather than pursuing a formal request for pro- posals or bids. Section 3. The City Council finds that it would be in the public interest to waive any requirement that an in- dependent appraisal be made of the property prior to nego- tiation and finalization of the lease. Section 4. This resolution shall take effect thirty (30) days following approval. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 27 day of April , 19 87 . THE CITY OF SEWARD, ALASKA AYES: NOES: ABSENT: ABSTAIN: BOOHER, GIESELER, HILTON, MEEHAN, NOLL & SIMUTIS NONE DUNHAH NONE ATTEST: APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN, Attorneys for the City of Seward, AK 7~ N4.J-- Fred B. ArVldson City Attorney (City Seal) -2- . . . !i LEASE AGREEMENT '!his llgreenent made and entered into this day of , 1987, by and between tl1e CITY OF SE.WARD, a hate rule municipal corporation located in the Kenai Peninsula Bor- ough, State of Alaska, hereinafter referred to as "City" and MICHAEL G. M::KERN, hereinafter referred to as "lessee". WIT N E SSE T H: WHERE'.AS, City and lessee are nutually interested in the develcprent of harbor related facilities in the Small Boat Harbor area within the City of Seward, Alaska; and WHERE'.AS, lessee has daronstrated to City an intention to expand and develop a camercial waterfront visitor-related business; and WHERE'.AS, the City has received a proposal fran lessee for developnent of City owned land; and WHERE'.AS, City, as expressed ll'Ore fully in City Council Resolu- tion No. 87- , has determined that lessee's intentions and general develoFfiel1t plans coincide with the public interest of the City and will provide increased tax revenues and rental incare to the City; and ,I , " , , i I :[ I I I ,I , , , I I I II WHERE'.AS, City and lessee have reached agreerrent on the land City is to lease to lessee, the general terms and conditions of such a lease ; FOR AND IN CONSIDERATION OF THE RENTS, COI1ENANTS, AND CON- DITIONS HEREIN CCNl'AINED, CITY AND LESSEE AGREE AS FO:LI.aVS: ARTICLE 1. DEMISE. City leases to lessee, and lessee leases fran the City that certain real property herein called "leased Land", situated in Seward, Alaska, consisting of approximately 900 square feet, -1- :1 I I , , I as shown on Eldribit "A" attached hereto and as !lOre particularly de- scribed as follows: Camercial Lease Site No. 5 i.mrediately adjacent to the Seward Soall Boat Harbor Boardwalk between "B" and "0" Ranps. The Site is within Block 6, Oceanview Subdivision. ARl'ICLE II. CITY'S WARRANTY OF QUIEl' ENJOYMENl'. lessee, upon paying the rent and other charges herein provided for and observing and keeping the covenants, oonditions and tenns of this Lease on lessee's part to be kept or perfomed., shall peacefully and quietly enjoy pos- session of the leased Land during the term of this lease witbJut hin- drance by, fran or through City, subject, however, to any enCl.lllbrances created or caused by lessee. ARl'ICLE III. LEASED LAND 1\C.U.1"TW "AS IS". lessee ackrlc:MI- edges that he has inspected the Leased Land and accepts the sane "as is" and without reliance on any representations or warranties of City, or agents of City, as to the physical oondition thereof, except as express- ly herein provided. ARI'ICLE IV. USE OF LEASED LAND. 1. lessee may use the Leased Land for the oonstruction and operation of charter fishing/sightseeing business. lessee understands I ! i that oonstruction and operation of such a facility is a major I consideration for City's agreerrent to lease the leased Land. lessee agrees that he will not operate any other business on the leased Land without the oonsent of the City. M:lreover, City may withhold its consent as to any proposed business or activity which, in City's sole discretion, is not desirable or ccrrpatible with the City's Soall Boat Harbor area. -2- . . . 2. No assigment or sublease shall be permitted unless approved 1Il writing by the City. Arrj sublease shall be expressly subject and subordinate to this lease and the rights of the City here- under. The City may elect to not approve any pIqlOsed assigrment or sublease which may result in a business or activity which, in the City's sole discretion, is not desirable or carpatible with the City's anall Boat Harbor area. ARI'ICLE V. LEASE TERM. 1. Ccmrencemmt and Expiration. be ten (10) years, camencing on The term of this lease shall , and ending 2. ~tions and EKtensions. There is a renewal ~ion for Lessee to extend this lease for an additional three (3) year period, but by inaction of the parties, the lease shall be deerred to oontinue fran rronth to rronth. This lease will not terminate until notice in writing is given by either party to the other, not later than three rronths prior to the expiration of the lease term. 3. Holdover. If Lessee shall hold over after the expiration of the lease Term, such tenancy shall be fran rronth to rronth on all the terms, oovenants and oonditions of this Lease. 4. SUrrender of Possession. (a) SUbject to the provisions of Article XI below with respect to restoration of buildings and improvenents, upon expi- ration of the Lease Term, whether by lapse of tirre or otherwise, Lessee shall prarptly 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 -3- II I I I , I I i , I I I I I and deliver to City a proper instrurcent in writing, releasing and quit-clairning to the City all right, title and interest of Iessee in and to the Ieased Land and all inl>rovements thereto not t"eIlOVed by Iessee as provided herein. ARTICLE VI. RENI'. The rental for the !eased Land shall be detennined and paid as follows: 1. !my and all annual rental due under this !ease shall be paid in advance upon carrnencement of this Lease in .quarterly installments an or before carrnencement of this !ease and an or before successive quarters beginning January 1, March 1, July 1 and OctciJer 1 of each succeeding year, except as othe:rwise provided. 2. The rental shall be detennined as follows: (a) The lease rate shall be $1500 per annum ($375 per quarter) . i [I I I I 'I i , " (b) Should the City and Lessee IlUtually agree to extend the lease, not less than ninety (90) days prior to the expiration of the lease the City, at its CMl1. expense, may en;>loy an indepen- dent appraiser to determine the fair market rental value of the !eased Land at the highest and best use of the !eased Land and without oonsideratian of Iessee' s intended use of the land unless I '! that use is ooincidentally the highest and best use of the Land. i 3. 1\ddi tional Rent and Ci tv's Right to CUre Iessee' s De- faults. All oosts and expenses which Iessee asStmes or agrees to pay i :1 I !I pursuant to this Lease or to any IOOrtgage or other encurcbrance upon the !eased Land or Iessee' s leasehold interest shall at City I S election be treated as additional rent and, in the event of nonpaynent, City shall have all rights and remedies herein provided for in the case of -4- . . . " II :i , ,I I I i I I ronpaynent of rent or of a breach of condition. If Lessee shall default in II'aking any paynent required to be made by Lessee, or shall default in performing any tenn, covenant or condition of this Lease or of any such rrortgage or other enetmbrance on the part of Lessee to be perfomed which shall involve the expenditure of rroney by Lessee, City at City's option may, but shall not be obligated to, make such payrrent or, on behalf of Lessee, expend such sum as may be necessary to perfonn and fulfill such tenn, covenant or condition, and any and all sums so expended by the City with interest thereon at the maximJm rate under the laws of the State of Alaska fran the date of such expenditure until repaid, shall be (and shall be deemed to be) additional rent and shall be repaid by Lessee to the City, on demand, but no such paynent or I expenditure by the City shall be deemad a waiver of Lessee's default nor i shall it affect any other raredy of the City by reason of such default. I i i 4. Late payrrent Penal ty. Rental paynent due but not ! received by the due date shall be subject to a ten percent (10%) delin- quency fee plus one and one-half percent (l~%) sinple interest per IlDnth until paid or the maximum permitted rate under Alaska law, whichever is higher. ARI'ICLE VII. TAXES AND ASSESSMENTS. 1. Lessee to Pay 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 personalty situate on the Leased Land and placed thereon by Lessee or under Lessee I s authority), sales taxes, or other business or use taxes levied or assessed upon or against the Leased Land or any iIrproverrents thereon or Lessee's business during the Lease Tenn. Lessee -5- II I I agrees to indemnify and hold City harmless fran liability for any other tax, charge, or assessment of any kind or nature. Lessee shall, within sixty (60) days after any such tax assessment or other charge oonsti- tuting a lien en the Leased land shall becane due and payable, produce and exhibit to City satisfactory evidence of payment. 2. Lessee to Pay Assessments. Lessee, during the lease temt, agrees to pay directly to the pJblic authorities charged with collectien thereof any and all assessments levied en the Leased land for a part of or all of the oost of any pJblic work or i.Irproll'E!Ilent assessed acoording to benefit found by the levying authority to accrue therefran to the Leased Land, including any charges for anti"'1X'llution, environ- mental, ecological or any other public p.u:poses. If an option is given to pay such assessment(s) in instal1nents, Lessee way elect to pay the sane in instal1nents, and in such case Lessee shall be liable only for such ihstal1nents as shall accnJ.e during the Lease Tenn. 3. Proration of Taxes and Assessments. If Lessee's ooli- gation to pay taxes or assessments camences or ends during a tax year, such obligation shall be appropriately prorated with City bearing the remaining oost (or its pro rata share) thereof. , I, i' 4. Contest. Lessee shall have the right to oontest or review any tax, assessment, levy, fee, water or sewer charges or rents, , i !I j I ! or any other goverrmental charges which Lessee is cbligated to pay. Such proceedings shall, if instituted, be conducted pratptly at Lessee's own expense and free fran all expense to City. Before instituting any such proceedings, Lessee shall pay under protest such tax, assessment, levy, fee, water or seINer rents or charges or any other goverrurental charges, or shall furnish to City a surety crnpany bond in a carpany -6- . i acceptable to City, or other security reasonably satisfactory to City, sufficient to cover the anount of the contested item or items with interest for the period which such proceedings may be reasonably ex- pected to take and costs securing the payrrent of such contested item or items and all interest and costs in connection therewith when finally detennined. Notwithstanding the furnishing of any such bond or securi- ty, Lessee shall pay all such items at least twenty (20) days before the tilre when the Leased Land or any part thereof might be forfeited. The legal proceedings herein referred to shall include appropriate cer- tiorari proceedings and appeals fran any orders and judgenents therein, I but all such proceedings shall be begun as soon as reasonably possible I i I after the inp:>sition or assessmant of any contested items and shall be prosecuted to final adjudication with reasonable dispatch. In the event . I I .i of any reduction, cancellation or discharge, Lessee shall pay the anount 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 govermrental authority with respect thereto, Lessee shall be entitled to receive and retain the same subject, l1c1..ever, to appor- tionrrent 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, assessmant, levy, fee, water or sewer rents or charges, or any other goverrurental charge aforenentioned, which shall not be contested or reviewed as aforesaid, and unless Lessee shall pratptly join in such contest or review and pay all costs therein, the City shall be entitled to receive . -7- and retain any refund payable by the goverI'llte1tal authority with respect tnereof. 5. Lessee to Pay Utility O1arges. Lessee shall payor cause to be paid all charges for water, heat, gas, electricity, sewers, and ~ and all other utilities used upon the Leased Land througOOut the lease tenn, including ~ connection fees. lIRI'ICLE VIII. a:NSTROCTICN BY LESSEE. 1. lessee's Riqht to Build-General Ccn:iitions. Lessee shall have the right at any ti.rre and fran ti.rre to ti.rre during the lease teJ:Ill to construct, maintain, alter, rE!m:)del, reconstruct, rebuild and replace building (s) and other inprovement (s) on the Leased land, subject to approval of the City in conformity with the anall Boat Ha.tbor Master Plan and the following conditions: (a) The cost of any construction, reconstruction, denDlition, or of ~ change, alteration or il'rprovarents, shall be borne and paid for by Lessee. (b) The Leased Land shall at all tirres be kept free of rrechanic' s, materialmm' s, and any other liens, as hereinafter oore 'I specifically provided. (c) Any building contractors employed. by Lessee or its sublessees shall be appropriately bonded. for one hundred. percent (lOOt) of the contract anount(s) by use of perfonnance and labor and material paynent bonds in the custanary fOJ:Ill when cost of the \'IOrk is over $10,000.00. Copies of all such bonds shall be fur- nished to the City prior to camencsrent of construction. 'I Ii II I i I i I II , I ! , , , , i -8- . . . I I! (d) Lessee, upon ccmrencenent of permissible building or construction activities on the Leased Land, shall continue such activities through to oorrpletion with diligence and continuity. (e) Ccmrencenent of construction shall trean having materials and labor on site. Ccmrencenent of construction shall take place within 90 days of the signing of this Lease and construction shall be carrpleted within 90 days of comrencenent of construction. 2. Lessee's Ckmership of Trade Fixtures, Machinery and Equi);Xllel1t. It is expressly understcod and agreed that any and all trade fixtures, machinery and equi);Xllel1t 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 rerroved or replaced at any tine during the lease tem, provided Lessee or its tenants repair any and all darrage to the Leased Land resulting fran such rerroval or replacenent. :1 Thereof. 3. Lessee's Right to Ferrove Irrproverrents and Q.mership Lessee shall have the right to rerrove any buildings or im- proverrents constructed or placed upon the Leased Land by Lessee prior to the expiration of the Lease. MY buildings or ilrproverrents not rerroved prior to the expiration of the Lease shall becorre the property of the City without the payrrent of any compensation to Lessee. ARI'ICLE IX. LIENS. 1. Prohibition of Liens on Fee or Leasehold Interest. Lessee shall not suffer or permit any liens to be filed against the fee of the Leased Land nor against Lessee's leasehold interest in the Leased Land nor against any buildings or inproverrents on the Leased Land by reason of any work, labor, services or materials supplied or clairred to have -9- been supplied to Lessee or anyone holding the Leased Land or any part thereof thrc:ugh or under Lessee. 2. Rercoval of Liens by Lessee. If any lien shall be re- corded against the Leased land, or any iltproverrents thereof, Lessee shall cause the same to be rennved, or, in the alternative, if Lessee in I I I I I' , I , I I I i I I 1 good faith desires to contest the same, Lessee shall be privileged to do so, but in such case Lessee hereby agrees to provide a surety bond fran a surety licensed to do business in Alaska in a penal stmI equal to one and one-half tilres the arrount of the claim of lien, which bond shall guarantee the payrrent of the stmI which the lien clailnant has cl.ai.ned, together with the lien claimant's reasonable cost of suit in the action. Lessee further agrees to indamify, defend, and save the City haJ:m1ess fran all liability for dall'ages occasioned thereby and shall, in the event of a judgenent of foreclosure upon said lien, cause the same to be discharged and rennved prior to the execution of such judgenent. 3. Notice of ~n-Rasponsibility. The City may, as contem- plated by Alaska Statutes 34.35.065 (as now enacted or hereinafter anended) give notice of non-responsibility for any iltprovenents con- strocted or made by Lessee on the Leased Land. ARI'ICLE X. INDEMNITY. Except for claims arising out of acts caused by the negligence of the City or its representatives, Lessee agrees to protect, indamify, defend and save harmless the City fran and against any and all liability arising fran acts or anissions of any nature whatsoever of Lessee I s officers, servants, errployees, contrac- tors, tenants, agents or invitees causing injury to or death of persons 1 1 1 Ii I or loss of or danage to property during the Lease Term, and fran any expense incident to defense of and by the City therefran. If any action -10- . . . or proa:!eding is brought against the City by reason of any such occur- rences, the City shall notify lessee in writing of such action or proceeding, whereupon lessee at lessee' s expense may elect to resist or I defend such action or proceeding by counsel approved in writing by the I I I I 'I II I I I I I I , I 1 I , 1 1 City, such approval not to be withheld unreasonably. ARTICLE XI. lliSURANCE AND RESTORATICN. 1. Liability Insurance. Lessee, during the Lease '!'enn, shall provide a certificate of insurance showing the City as co-insured in an arrount of not less than $300,000 catl'rehensive general liability cover- age for premises operations, broad fonn property damage and personal injury. The minimum requirenents in this section may be increased fran tine to tine by the City in accordance with customs and usage for ccrrparable property in the Seward rretropolitan area. 2. Fire and Extended Coverage Insurance. lessee, during the Lease '!'enn, shall keep all buildings and irrproverrents insured at its expense against loss or damage by fire and such other risks as may be included in the custanary fonn of broad fonn extended coverage (which may exclude earthquakes), in an arcount, over and above any deductibles in the governing policies, of not less than the unpaid balance (5) due under any existing deed (s) of trust or rrortgage (s) en=bering the buildings or irrproverrents or the City's fees. 3. Blanket Insurance. Lessee may provide any insurance required by this Lease in the fonn of a blanket policy, provided Lessee furnishes evidence satisfactory to the City indicating the coverage thereunder is at least equal to the coverage obtainable under a separate policy covering the Leased Land only. -11- II II ,I !I I 4. Additional Naned Insured; Rights of ~rtgagees (Lenders); Waiver of 9.Jbrogation. All insurance policies required to be maintained by lessee shall nane lessee and the City as the insureds, as their reSPective interests may appear. All policies shall .contain an agree- ment by the insurers that such policies shall not be cancelled wi trout at least thirty days' prior written notice to the City, and certificates or copies of all such insurance policies shall be furnished to the City pratptly after the issuance thereof. 5. Restoration of Buildings and Inl>roverrents. In the event of damage to or destruction of any of the buildings or inproverents situated on the Leased land, then frcm the insurance proceeds payable to lessee, lessee shall within ninety (90) days after payrrent of the insurance proceeds c::amence restoration of the buildings and inprove- ments to their condition prior to such damage, provided, holNever, lessee's obligation to restore will be limited to the insurance proceeds available to lessee. All such insurance proceeds shall be deposited and held in trust with such bank having offices in Seward and/or Anchorage, Alaska, as lessee rray designate, or with Lessee's m:>rtgagee of the damaged property, and shall be rrade available to lessee for its use in restoration or repair, as the case rray be, of any damage or destruction to the buildings and inprovercents on the Leased Land. The proceeds of insurance shall be paid out by such trustee or m:>rtgagee frcm tine to il ! tine on certification of the person having supervision of the work that the arrnmt certified is being applied to the payrrent of the reasonable cost of such work. ARI'ICLE XII. CARE OF LEASED lAND, 1\CCESS OF '!HE CITY. -12- II t, . . . condition and repair during the lease Term. 2. other Access Rights of the City. The City and its agents or representatives shall have the right to enter into and upon the leased Land during reasonable hours for the purpose of inspecting the leased Land and all buildings and inprovenents thereon. 3. Avoidance of Prescriptive Rights. lessee shall take such action as may be necessary to preserve the City's title and ownership of the leased Land free and clear of any public or private rights of way, , I !i !I easements or other interests acquired by prescriptive use or otherwise than as permitted under this lease, including but not limited to the posting of thoroughfares, walkways and parking areas so as to preserve the right of private ownership therein and prevent any adverse rights thereto accruing through prescriptive use or otherwise than as permitted hereunder. ARI'ICLE XIII. <XJMPLIAOCE WITH I.AWS. 1. Carpliance with Laws. lessee shall catply with all applicable laws, ordinances and regulations of duly oonstituted public authorities now or hereafter in any manner affecting the leased Land or any buildings, structures or inprovenents 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 governrrental body enacting the saIre. lessee further agrees it will not permit any unlaw- ful occupation, business or trade to be oonducted on said premises or I i , I i i I I I i -13- :1 jl I I 'I any use to be nade thereof oontrary to any law, ordinance or regulation as aforesaid with respect thereto. 2. Contest. lessee nay by awropriate proceedings oonducted at lessee's own expense, contest in good faith the validity or enforce- I I I I I I' law, ordinance or regulation during lessee's oontest thereof, then, as a I I II I i !I II II II I, ment of any law, ordinance or regulation, provided lessee diligently pursues such contest to a final determinaticn by a court, depart:nent or govermrental authority or 00dy having jurisdicticn thereof; provided that if the City nay becaTe liable in any manner for damages, penalties, fines or oosts by reason of lessee's failure to carply with any such condition precedent to the camencenelt and continuation of such pro- ceedings, lessee shall furnish the City such bond with ooqx>rate surety as the City shall reasonably request to save hannless and indemnify the City against liability for any such damages, penalties, fines or oosts. At the option of the City, it nay at its expense contest the validity or enforcenelt of any such law, ordinance or regulation. ARI'ICLE XIV. Fl>1INENI' [)(}.lAIN. 1. Interest of Parties in Condelmation. In the event the i Leased Land or any part thereof shall be taken for public purposes by i ! I condelmation as a result of any action or proceeding in eminent demain, or shall be transferred in lieu of oondeIm1ation to any authority enti- tled to exercise the power of eminent demain, the interests of the 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 rrakes ilrpracticable the oontinued operation of the self service car wash, gas station and retail -14- . . . merchandise 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 con- daming authority. 2. Partial Taking--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 the City for the purpose of operation thereon of Lessee's business, this Lease shall terminate and end as to the porticn of the Leased Land so taken or transferred as of the date title to such portion vests in the condemning authority and the conderming 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. ARI'ICLE }IN. ARBITRATICN. 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 judgerreIlt upon the award may be entered in any court having : I jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three arbitrators in the City of Seward, Alaska, or with the consent of both parties in Anchorage, Alaska. ARI'ICLE XVI. DEFAULT AND REMEDIES. 1. Default and Termination. . i (a) If the rent or any other charge shall be in arrears for a pericxi of thirty (30) days, or -15- (b) If lessee fails to take reasonable steps to keep and perfonn any of the covenants or conditions of this lease within thirty (30) days after written notioe of default, or (c) If lessee files a voluntary petitioo in bankruptcy or for reorganization under the bankruptcy laws or is adjudged a bankrupt by a oourt of c:x:I'lpetent 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 c:x:I'lpetent jurisdictioo for lessee I s business and it be established in the reoeivership proceedings that lessee is insolvent, or (f) If the leaserold interest hereunder is abandoned by lessee, then I City may.at City's option at onoe without further notioe to lessee or !I II I I I I il I I 'I :1 I. II II II ! any other person, tenninate this lease. Upon tennination of this lease as aforesaid, or at the expiration of this lease and upon the tennina- tion of said lease by its tenns, lessee shall at onoe surrender pos- session of the leased Land to the City and renove all lessee's effects therefran and may rE!lDV'e all lessee's buildings and other iltprOllements, and lessee shall have no further rights hereunder or with respect to the leased land. If such possession be not imredi.ately surrendered, the City may forthwith enter into and upon and repossess the leased Land and expel lessee or those claiming under lessee without being deemed guilty in any rranner of trespass and without prejudice to any rerredies which might otherwise be used for arrears of rent or preceding breach of cOllenant, and in such event lessee expressly waives the service of notioe of any intention so to tenninate this lease or to retake the -16- . . . , . i leased land and waives servioe of any danand for payment of rent or for , .i II !I ,. Ii I I i , j I I I I I' possessioo and for any and every other notioe or demand prescribed by any law and hereby waives any claim for damages by reason of such repossession. 2. Reletting. At any time or fran time to time after any such expiration or tennination, the City may relet the leased land, or any part thereof, and any unleased buildings and improverrents, for such tenn or tenns (which may be greater or less than the period which \',Quld otherwise have oonstituted the balanoe of the tenn of this Lease) and on such oonditions- (which may include oonoessions or free rents) as the City, in its discretion, may detennine and may oollect and reoeive the .1 :1 , i rents therefor. The City shall in no way be responsible or liable for any failure to relet the Leased Land, or any part thereof, or for any failure to oollect any rent due upon any such reletting. 3. Damages. No such expiration or tennination of this lease shall relieve lessee of its liability and obligations under this lease, ; i and such liability and obligations shall survive any such expiration or '1 tennination. In the event of any expiration or tennination, whether or not the leased land, or any part thereof, shall have been relet, Lessee shall pay to the City the net rent and all other charges required to be paid by Lessee up to the time of such expiration or tennination of this Lease, and thereafter Lessee, until the end of what \',Quld have been the tenn of this Lease in the absenoe of such expiration or tennination, shall be liable to the City for, and shall pay to the City, as and for liquidated and agreed current damages for Lessee's default, -17- " Ii , , (a) the equivalent of the anount of the rent and charges which 'NOUld be payable under this Lease by lessee if this lease were still in effect, less (b) The net proceeds reoei ved by the City fran leasing or reletting the leased Land and inprCNements thereon after de- ducting all of City I S expenses in oonnectioo with such leasing and reletting, including, without limitation, all repossession oosts, brokerage ccmnissions, legal expenses, reasonable attorneys' fees, alteration oosts, and expenses of preparation for such reletting. lessee shall pay such current damages (herein called "deficiency") to the City rronthly, and the City shall be entitled to rE!CO\ler fran lessee each rronthly deficiency as the same shall arise. At any time after any such expiration or tennination, whether or not the City shall have collected any IlOnthly deficiencies as aforesaid, the City shall be entitled to recOIler fran lessee, and lessee shall pay to the City, on demand, as and for liquidated and agreed final damages for lessee's default, an anount equal to the differenoe between all rent reserved hereunder for the unexpired portion of the Lease Tenn and the then fair and reasonable net rental value to the City of the leased land for the same period. In the carputation of such damages, the differenoe between an install1rent of rent becaning due hereunder after the date of tennina- tion and the fair and reasonable rental value to the City of the leased Land for the period for which such installlrent was payable shall be disoounted to the date of tennination at the rate of six peroent (6%) per annum. If the leased land, or any part thereof, be leased or relet by the City for the unexpired portion of the Lease Tenn, or any part thereof, before presentation of proof of such liquidated damages to any -18- . . . court, camti.ssion or tribunal, the anount of rent reserved upon such leasing or reletting shall be prima facie evidenoe of the fair and reasonable rental value for the part or the whole of the premises so leased or relet during the tenn of the leasing or reletting. Nothing herein oontained shall limit or prejudioe the right of the City to prove and dltain as liquidated damages by reason of such tennination an arrount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which such damages are to be proved, whether or not such anount be greater, equal to, or less than, the arrount of the differenoe referred to above. 4. 1\cCUlTUlation of Remadies. Each right and ratedy of the City prO\lided for in this lease shall be CUlTUlative and shall be in addition to every other right or ratedy prO\lided for in this lease or now or hereafter existing at law or in equity or by statute or other- wise, and the exercise or beginning of the exercise by the City of any one or IlOre of the rights or rerredies provided for in this lease or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the si.nultaneous or later exercise by the City of any or all other rights or remadies provided for in this lease or now or hereafter existing at law or in equity or by statute or otherwise. 5. Appointrrent of Receiver. Upon the ccmrenoerrent of any suit or action by the City against lessee pursuant to any retredy avail- able to the City upon Lessee's default hereunder or at any time there- after and during the pendency of such suitor action, any oourt of carpetent jurisdiction upon the application of the City may at onoe and without notioe to lessee, its sucoessors or assigns, or any person or persons or tenant or tenants or IlOrtgagee or person claiming any -19- security interest through lessee, at:POint a reoeiver to oollect the rents and profits arising rot of the leased Land, the buildings and inproverrents thereon and the subleases pertaining thereto and awly such rents and profits to the payment and satisfaction of lessee 's dlliga- tions under this lease, including without limitation the payment of the rent due the City hereunder, first deducting all proper charges and expenses attending the execution of such trusts, and to have any balance remaining held by such reoeiver for disposition in acoordanoe with any judgement or decree entered therein or as may be fran time to time directed by said oourt. ARl'ICLE XVII. GENERAL PROITISICNS. 1. Estoppel Certificates. Either party shall at any t:i.ne and fran time to time, upon not less than thirty days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a stateltent in writing oertifying that this lease is unanended and in full foroe and effect (or, if there has been any arrendrrent thereof, that the same is in full foroe and effect as arrended and stating the amendrrent or arrendrrents), that there are no defaults existing (or, if there is any clained default, stating the nature and extent thereof) I and stating the dates to which the rent and other charges have been paid in advanoe. It is expressly understood and agreed that any such statement delivered pursuant to this section may be relied upon by any prospective assignee or tenant of the Leasehold Estate, or estates, or Lessee or any prospective purchaser of the estate of the City, or any lender or prospective assignee of any lender on the securi ty of the leased Land or the fee estate, or any part thereof, and any third person. -20- . II Ii I lease shall be de€!red as running with the land, and shall be oonstrued , I i il , 2. Conditions and Covenants. All the provisions of this to be "conditions" as well as "covenants", as though the \\lOrds specif- ically expressing or illparting COIlenants and conditions were used in each separate provision. 3. No Waiver of Breach. No failure by either the City or Lessee to insist upon the strict perfomanoe by the other of any cove- nant, agreement, tem or condition of this Lease or to exercise any right or remady oonsequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, tem or condition. No waiver of any breach shall affect or alter this lease, but each and every oovenant, oondi tion, agreement and tenn of this lease shall oontinue in full foroe and effect with respect to any other then existing or subsequent breach. . 4. Time of Essenoe. Time is of the essenoe of this lease and of each provision. 5. Conputation of Time. The time in which any act provided by this Lease is to be done is carputed 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. '!be tenn "holiday" shall rrean all holidays as defined by the statutes of Alaska. 6. Successors in Interest. Each and all of the cO\lenants, 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, lioensees and other succes- sors-in-interest of Lessee. . -21- 7. Entire llgreercent. This lease oontains the entire agree- nent of the parties with respect to the matters COITered by this lease, and no other agreercent, statement or pranise nade by any party, or to any e!lployee, officer of agent of any party, which is_ not oontained in this lease shall be binding or valid. 8. Governing raw. 'lhi.s lease shall be governed by, oon- strued and enforced in accordanoe with the laws of the State of Alaska. 9. Partial Invalidity. If any tenn, covenant, oondition or prCllTision of this lease is held by a oourt of c:x:I'lpetent jurisdiction to be invalid, void or unenforoeable, the rett'ainder of the provisions shall rerrain in full foroe and effect and shall in no way be affected, im- paired or invalidated. 10. Relationship of Parties. Nothing oontained in this lease shall be deemed or oonstrued 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 the City and lessee; and neither the rrethod of CCITpltation of rent nor any other prOllisions oontained in this lease nor any acts of the parties, shall be deerred to create any relationship between the City and lessee other than the i i i relationship of lessor and lessee. ., II 11. Interpretation. The language in all parts of this Lease shall in all cases be sint>ly oonstrued acoording to its fair rreaning and not strictly for or against the City or lessee. Unless otherwise ! I I I prO\lided in this Lease, or unless the context otherwise requires, the following rules of oonstruction shall apply to this Lease: (a) Nurrber and Gender. In this Lease, the neuter gender includes the masculine and the feminine, and the singular mmber -22- . . . II il !I !I I includes the plural; the \'oUrd "person" includes oorporation, partnership, finn or association wherever the oontext so requires. (b) Mandatory and Pennissive. "Shall" , "will" and "agrees" are mandatory; "may" is pennissive. I I I I I i I i I i I II notioes, demands or requests fran one party to another shall be de- (c) Captions. Captions of the Articles, Sections and subsections of this lease are for oonvenienoe and reference only, and the \\lOrds oontained therein shall in no way be held to explain, IlOdify, anplify or aid in the interpretation, oonstruction or meaning of the provisions of this Lease. 12. lIllendrrent. 1his lease is not subject to amendment except in writing executed by all parties hereto. 13(a). Delivery of Notioes and Pent-~thod and Time. All livered in person or be sent by mail, oertified or registered, postage I prepaid, to the addresses stated in this Section, and shall be deerred to I I I' , have been given at the tine of delivery or making. 13 (b) . payroont of Rent. All rents and other sums payable by Lessee to the City shall be by check, payable to the City, delivered .! in person or mailed to the City at the folla.ving address: 'I City Clerk City of Seward PO Box 167 Seward, AI< 99664 and shall be deemed to have been paid when received at such address. 13 (c) . Notioes to the City. All notioes, demands and " I I requests fran Lessee to the City shall be given to the City at: City Clerk City of Seward PO Box 167 Seward, AI< 99664 -23- Ii , I and to such other persons at such additional addresses as the City may specify, but not exceeding four in the aggregate. l3(d). Notices to lessee. All notioes, demands or requests fran the City to lessee shall be given to lessee at: 13{e). Mike M::Kern PO Box 64 Seward, AI< 99664 Change of Address. Fach party shall have the right, fran time to time, to designate a different address by notioe given in oonfonnity with this Section. l4. Broker's Camli.ssicn. Each of the parties represents and warrants that there are no clai.m; for brokers' ccmni.ssions or finders' fees in oonnectioo with the execution of this lease. 15. Attorneys' Fees. If either party hereto institutes any suit, action or arbitration proceeding to oollect the rent reserved or II to enforoe any covenant or agreement hereof or to obtain aIr:! of the Ii rercedi.es herein provided, the prevailing party shall be entitled to such i I sum of nuney as the oourt or the arbitration board may adjudge reason- II able as oosts and attorneys' fees in such suit, action or arbitration I proceeding, including any appeal taken by either party in such suit, ! , " 'I ,. " acticn or arbitration proceeding. 16. Records. lessee shall at all times keep or cause to be II II II II I I I I I I I kept proper books of reoord 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. 17. 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 -24- . whatsoever name that may be within or under the leased Land. The 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, wi~t, however, the right to distUJ:b the use of the surfaoe or to drill or mine through the upper 500 feet of the subsurfaoe of the leased Land. 18. Good Faith. The tenns of this lease impose an cbligation of good faith on the City and lessee in the perfonnanoe and enforc::ercent thereof. . 19. Election to Tenninate by City. lessee, as partial oonsideration for this lease, expressly undertakes (l)to build an approved wood frarre building rot to exceed 16 feet by 14 feet~ (2) to COller the remainder of the lease site with a boardwalk oonnecting with adjaoent sites and the City boardwa1k~ (3) to allow no outside storage on site~ (4) to allow no OIlernight occupancy~ (5) to operate said facility for a minimum of a 90-day period annually. If Lessee fails to neet any of these requirements in a timely manner, the City may, by giving written notioe to Lessee, elect to tenninate this lease. All further rights, duties and ooligations hereunder shall oease upon reoeipt by lessee of such notice. 20. Election to Tenninate by lessee. If an eartIquake occurs during the tenn hereof, making the oonstruction, financing, maintenance or operation of an improvement{s), building(s) or other structure(s) on . -25- 'I " the I.eased Land inpractical or illFennissible, then in such event, prOIlided the lessee be in good standing hereunder, the lessee may, in its uncontrolled discretion, elect to tenninate this lease upon: (a) Giving written notioe to the CitYi, and (b) Making payment to the City of a sum equal to fifty peroent (50%) of the rents payable to the City for the twelve calendar IlOnths :iImediately preoedirq the notice under (a); and (e) Satisfying or otherwise releasing the City's fee fran any encuni:>ranoe(s) created as the result of Lessee's actions. All further rights, duties and obligations hereunder shall cease upon reoeipt by the City of such notioe of election to tenninate and the I I I! cate the building at City expense srould such a IOOVe be neoessary to I fulfilling of conditions (b) and (c). The City reserves the right to relo- 21. other Conditions. accarplish the overall Harlx>r Boardwalk Project. I I II II execution of this lease, execute, acknCMledge and record a merrorandum of II I ARl'ICLE XVIII. REXX>RDING, EXEX:.Ul'ION, caJNI'ERPARI'S. 1. Reoor~. The parties may, concurrently with the lease . FollCMing reoording, the nerrorandum lease shall be attached to this lease. ,i 2. Counterparts. This lease has been executed by the 'I i I parties in two oounterparts, each of which shall be deemed to be an 'I , ' original. 3. Execution. This Lease has been executed by the parties on the day and year first above written. -26- . . . ,I LESSOR: T .F~EE: THE CI'lY OF SEWARD, AIASKA CAPl'AIN HOOK CliARI'ERS By: Ronald A. Garzim, City Manager By: Michael G. M:Kern ATl'EST: APPRJIlED AS 'IO ro~: HUGHES, mORSNESS, GANl"L, ~ & BRUNDIN, Attorneys for the City of Seward, Alaska 7~ (l/~.I. Fred B. Arndsoo, City Attorney Linda S. M.1rphy, City Clerk (City Seal) STATE OF ALASKA ss. THIRD JUDICIAL DISTRIcr THIS IS 'IO CERl'IFY that on this day of , 19 , before me, the undersigned, a Notary Public in and for the State of"""""AI"aska, duly ccmnissioned and S\\1Orn as such, personally appeared , City Manager of the City of Seward, known to me and to me known to be the person who executed the foregoing i instrument on behalf of the City of Seward, and who acknowledged that he I signed the same freely and voluntarily for the uses and purposes therein contained. I I ,I ii IN WITNESS WHERroF, I have hereunto set mj hand and seal on the day and year first hereinabOlle written. 'i .i :1 I I N<JrARY PUBLIC in and for Alaska My Ccmn:ission Expires: -27- STATE OF AIASKA ss. THIR> JUDICIAL DISTRIcr THIS IS 'ID CJ::;KL'.ll'Y that 00 this day of , 19 , before me, the undersigned, a Notary Public in and for the State of Alaska, duly ccmnissioned and sworn as such, ~rsonally appeared , known to me and to me known to be the person who executed the foregoing instrurrent, and who acknowledged that he signed the same freely and voluntarily for the uses and purposes therein oontained. IN wrmESS WHERIDF, I have hereunto set my hand and seal on II the day and year first herei.nabol7e written. I I I , I II i I NC1l'ARY PUBLIC in and for Alaska My Camtission Expires: -28- D. 2~ 4l(~ II: c ~ HARBOR 1 2 3 t\ "S ~ '!loo~,,", ~oOSr <{OO s.t' ~. ,f ,o..l~ I:' ,= , - __J 3."0 . \ III .., ,. \ Ii \ l .-. --- .:;1 p " ,/1 zo JtI .#P ftJ '0 10 ,,, "", ,. I\Alt1l0\IMASTElt'S llUlLlllllG \ leALa ,..20' . SEWARD SMALL BOAT HARBOR BOARDW ALK LEASE SITES . .. .