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HomeMy WebLinkAboutRes2006-102Sponsored by: Wohlforth, Johnson, Brecht, Cartledge & Brooking CITY OF SEWARD, ALASKA RESOLUTION 2006-102 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AMENDED AND RESTATED AGREEMENT FOR LEASE OF TRACT 2A, WATERFRONT TRACTS, AND ADJACENT TIDELANDS, AND THE LEASE, OPERATION AND MAINTENANCE OF THE ALASKA SEALIFE CENTER WITH THE SEWARD ASSOCIATION FOR THE ADVANCEMENT OF MARINE SCIENCE WHEREAS, the City of Seward ("City") and the Seward Association for the Advancement of Marine Science ("SAAMS") entered into an Agreement for Financing, Lease, Construction, Operation, and Maintenance of the Alaska SeaLife Center dated as of April 28, 1995, as amended (the "Original Agreement"); and WHEREAS, SAAMS generated the concept and secured support for a marine research, education and rehabilitation institution in Seward, Alaska to be operated by SAAMS as an independent, nonprofit organization with a mission to understand and maintain the integrity of the marine ecosystem of Alaska; and WHEREAS, SAAMS secured funding for the improvements to house this institution through the Alaska Legislature, the City's issuance of non -recourse revenue bonds, solicitation of private donations and the Exxon Valdez Oil Spill Trustee Council, whose administrative arm was the Alaska Department of Fish and Game, in response to the need for better marine research infrastructure in Alaska and a forum to educate the public about the marine ecosystem of Alaska; and WHEREAS, the City supported this concept by providing waterfront property for the site of the improvements under a long-term lease and operating agreement, acting as a conduit for grant funding for the construction of the improvements, including under the Cooperative Agreement (defined below), and issuing non -recourse revenue bonds secured by SAAMS to provide partof the financing for the construction of the improvements; and WHEREAS, the City is the owner of Tract 2A, Waterfront Tracts (the "Site"), on which SAAMS has constructed and operates improvements owned by the City (the "Improvements") housing an institution for marine research, rehabilitation, husbandry and education pursuant to the Original Agreement, and the adjacent tidelands (the "Tidelands"); and WHEREAS, the City and the State of Alasl<a Department of Fish and Game are parties to a Cooperative Agreement for the Construction, Operation, and Maintenance of Research Infrastructure Improvements at the Alaska ScaLife Center, in Seward, Alaska executed in April 1995, as amended ,.... (the "Cooperative Agreement"), concerning the construction, operation and maintenance of the CITY OF SEWARD, ALASKA RESOLUTION 2006-102 research and rehabilitation components of the Improvements described therein (the "EVOS Facility"); and WHEREAS, the parties intend to transfer all of the obligations of the City under the Cooperative Agreement and the EVOS Trustee Council Resolution adopted November 2, 1994 to SAAMS; and WHEREAS, one of the principal purposes of the Original Agreement was to provide for the construction of the Improvements, the construction of the Improvements is complete, and those terms of the Original Agreement have been fully performed; and WHEREAS, the Original Agreement recognized the City's issuance of non -recourse revenue bonds to provide part of the financing for the Improvements, including provisions to ensure SAAMS managed the Improvements in a manner that would generate revenue sufficient to pay debt service on the bonds; and WHEREAS, SAAMS requested additional amendments to the Original Agreement to reflect the completion of the construction of the Improvements, the complete retirement in 2001 of all non - recourse revenue bonds issued by the City, the parties' experience with the operation and maintenance of the Improvements since their completion, and to support the efficient operation and maintenance of the Improvements for the benefit of SAAMS' mission and the Seward community in the future; and WHEREAS, it will serve the convenience of both parties to amend and restate the terms of the Original Agreement in a single document; and WHEREAS, the City Council has determined that it is in the public interest to enter into this Agreement for the lease of the Site and the Improvements by negotiation and without appraisal of the fair market value of the Site and the Improvements because of the public benefits provided by the SeaLife Center to the Seward community. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. For the reasons stated in the above recitals, which are incorporated herein by reference, it is in the public interest to enter into an Amendment and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent Tidelands and the Lease, Operation and Maintenance of the Alaska SeaLife Center in substantially the form presented at this meeting. CITY OF SEWARD, ALASKA RESOLUTION 2006-102 Section 2. The City Manager is hereby authorized to enter into an amended and restated agreement in substantial form as presented at this meeting and incorporated herein by reference, and to make such changes as necessary to finalize the agreement between the parties but without changing the substantial terns and conditions as described therein. Section 3. This resolution shall take effect thirty (30) days after its adoption and posting. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 10`h day of October, 2006. T H E CITY OF SEWARD, ALASKA ! n Vanta Shafer, Mayo AYES: Dunham, Valdatta, Lorenz, Schafer, Bardarson, Thomas, Shafer NOES: None ABSENT: None ABSTAIN: None ATTEST: Je Lewis, CM Cit Clerk (City Seal) • d we ca a S v, .G+► Wohlforth I Johnson I Brecht Cartledge I Brooking A PROFESSIONAL CORPORATION Eric A. Auten Telephone Julius J. Brecht Cheryl Rawls Brooking ATTORNEYS AT LAW 907.276.6401 Cynthia L. Cartledge 900 WEST STH AVENUE, SUITE 600 Facsimile Michael Gatti 907.276.5093 Robert M. Johnson ANCHORAGE, ALASKA 99501-2048 Bradley E. Meyen Website Eric E. Wohlforth www.akatty.com October 9, 2006 Mayor and Members of Council, City of Seward P.O. Box 167 Seward, Alaska 99664 Re: Proposed Amendments to Agreement with the Seward Association for the Advancement of Marine Science; Our File No. 4337.1022 Submitted for your review and consideration is a proposed Amended and Restated Agreement for Lease of Tract 2A Waterfront Tracts, and Adjacent Tidelands, and the Lease Operation and Maintenance of the Alaska Seal-ife Center. The Seward Association for the Advancement of Marine Science ("SAAMS") entered into an agreement with the City of Seward effective April 28, 1995 entitled the "Agreement for Financing, Lease, Construction, Operation and Maintenance of the Alaska Seal-ife Center." Recently, SAAMS asked the City Council to consider amending and restating the agreement between the parties to reflect that construction is complete, the bonds issued by the City have been paid off, and SAAMS'operation of the Alaska Seal-ife Center have evolved over the past ten years. SAAMS now seeks to amend and restate the agreement to reflect the current situation with regard to operating the facility and leasing the adjacent tidelands. In developing the proposed amended and restated agreement, certain guidelines were followed. These principally include (a) SAAMS' acceptance of all of the City's obligations described in the EVOS Resolution and the ADF&G Cooperative Agreement, (b) maintaining the term of the agreement, (c) continuing to allow SAAMS to use the land owned by the City and to operate the Alaska Seal-ife Center in the building owned by the City without payment of rent (rent is paid for lease of the tidelands), and (d) reducing the reserve fund amounts required to be maintained by SAAMS. 1ADocs\43371022\L2Mayor and Members of Council.wpd Mayor and Members of Council, City of Seward Re: Proposed Amendments to Agreement with the Seward Association for the Advancement of Marine Science; Our File No. 4337.1022 October 9, 2006 Page 2 In response to SAAMSproposal and informal input from the City council received at the public work session held on August 16, 2006, our office worked on behalf of the City to negotiate the document presented to council for its review and approval. This letter summarizes the changes between the existing agreement and the proposed amended and restated agreement. 1. The name of the agreement is changed to reflect that this is an amended and restated agreement, as well as the fact that the financing and initial construction on the site has been completed. The title also reflects the inclusion of the tidelands and incorporates five amendments that have occurred since the initial effectiveness of the agreement on April 28, 1995. 2. All definitions related to the initial construction and the bonds previously issued by the City have been deleted because the al construction is complete and the bonds have been paid off. 3. Definitions of "Project" and "Property" are deleted and in their place are the new terms "Site" and "Improvements." The Site is the real property on which the Improvements are located. The Improvements include the building, which is owned by the City of Seward. 4. The "Renewal and Replacement Fund Requirement" and the "Terminatior. Fund Requirement" are redefined. sectionSAAMS is representing and warranting, as it had before, that it is not in default of any particular agreements. In addon, at this time SAAMS is representing and warranting that it is not in default of any grant agreement. 6. In section 5.4 SAAMS is required to adopt an annual plan for proactive maintenance of the improvements. The first annual plan will be adopted in conjunction with SAAMS fiscal year 2007 budget which is expected to be adopted in October 2006. The plan will identify all routine and periodic maintenance, costs of such maintenance and a schedule of performance. 7. In section 5.5 the Renewal and Replacement Fund is modified to eliminate the schedule of annual payments to be deposited into the fund. Instead, SAAMS currently has $500,000 in the fund and has agreed to maintain that maximum amount, provided that if SAAMS utilizes that fund for major repairs, then SAAMS has five years to restore the fund. Despite the amount remag in the fund at any particular time, SAAMS' responsibility to maintain and repair the improvements in a timely manner is maintained. The Renewal and Replacement Fund is indexed for inflation at 3% per year. A fixed rate, 1ADocs143371022\L2Mayor and Members of Council.wpd .Mayor and Members of Council, City of Seward Re: Proposed Amendments to Agreement with the Seward Association for the Advancement of Marine Science; Our File No. 4337.1022 October 9, 2006 Page 3 as opposed to a fluctuating rate such as CPI, allows SAAMS to invest the fund at a specified rate. The average annual CPI increase over the past 21 years is approximately we are currently in an "increasing" phase. A fixed rate of 3% was agreed to be a fair number over a long period of time. it In section 5.6 the Termination Fund is revised to reflect that SAAMS currently has $700,Ili set aside to operate the Improvements for a one year period. This fund will be maintained at that level subject to increases of 3% per year (see discussion in paragraph 7 above). As with the Renewal and Replacement Fund, SAAMS is responsible for all costs related to operating the facility for that one year period even if such costs are in excess of the amount in the Termination Fund. 9. In section 9.1 SAAMS is expressly permitted to sublease any part of the Site subject to compliance with three stated conditions. SAAMS must provide the City with a copy of the essential terms of each sublease, all subleases shall be for uses that are accessory and subordinate to the use of the Site and Improvements for marine research and education facility, and the sublease will not conflict with or impair SAAMS status as a 501 (c)(3) nonprofit organization. 10. Section 10.13 is a new section describing the relationship between the parties and acknowledges that neither party is liable for the other party's debts or obligations except as described in this agreement. 11. In section 10.14 there is an express recognition by each of the parties that SAAMS may engage in activities separate and apart from this agreement and its relationship with the City. To ease any concerns of the City that SAAMS may divert funds from its responsibilities under this agreement to other activities, SAAMS included a mission statement in section 2.2.10 and a representation and warranty to the City that SAAMS will not take any action or fail to take any action that will have a material adverse effect on SAAMS' performance of its primary corporate purpose and mission as described in subsection 2.2.10 of the agreement. 12. Section 10.15 clarifies use of the name "Alaska Seal-ife Center." In the past there has been some disagreement and concern about use of the name Alaska Seal-ife Center and specifically the use or control of funds designated for the Alaska Seal-ife Center. This pro ' vision clarifies that SAAMS is authorized to accept and utilize funds designated for the Alaska Seal-ife Center through the term of this agreement. Section 10. 15 also recognizes that the name Alaska Seal-ife Center is defined in the Cooperative Agreement between the City and the Department of Fish and Game and this agreement does not affect the use of that term as it is used in the Cooperative Agreement. 1ADocs\43371022\L2Mayor and Members of Council.wpd Mayor Ivlayor and Members of Council, City of Seward Re: Proposed Amendments to Agreement with the Seward Association for the Advancement of Marine Science; Our File No. 4337.1022 October 9, 2006 Page 4 Respectfully submitted, Cheryl A. rooking Cbrooking@akafty.com 1:\Docs\43371022\L2Mayor and Members of Council.wpd