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Sponsored by: Regis
CITY OF SEWARD, ALASKA
RESOLUTION 2021-012
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN
ADDITIONAL FIVE-YEAR LEASE AGREEMENT WITH CHUGACH
REGIONAL RESOURCES COMMISSION FOR THE OPERATION OF
THE ALUTIIQ PRIDE SHELLFISH HATCHERY
WHEREAS, the Alutiiq Pride Shellfish Hatchery operates on land leased by the City
of Seward, which the City of Seward leases to the University of Alaska; and
WHEREAS, file Chugach Regional Resources Commission requests permission to
operate the shellfish hatchery for an additional five-year lease term from 2021-2026 with
option to extend for one five-year extension; and
WHEREAS, the Alutiiq Pride Shellfish Hatchery has provided local jobs and
diversifies the local economy; and
WHEREAS, shellfish aquaculture increases economic industry in Seward.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. Thecitymanager shaebyaAln®d to enterinto anadditional five-yearterm lease
as attached herein with the Chugach Regional Resources Commission for the Alutiiq Pride
Shellfish Hatchery.
Section 2. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 25'
day of January, 2021.
TH Y F SEWARD, ALASKA
Christy Ter ,Mayor
AYES: DeMoss, Baclaan, McClure, Casagranda, Seese, Osenga, Terry
' NOES: None
ABSENT: None
ABSTAIN: None
CITY OF SEWARD, ALASKA
RESOLUTION 2021-012
ATTEST:
6 le4altoitl .:'
Brenda J. City i
Clerk ---
(City
• SEAL
OF
11
1
Agenda Statement
Meeting Date: January 25, 2021
To: City Council
Through: Norm Regis, Acting City Manager
Agenda Item: Approval of an Additional Five -Year Lease with Chugach Regional
Resources Commission for operation of the AIutiiq Pride Shellfish
Hatchery
BACKGROUND & JUSTIFICATION:
The Alutiiq Pride Shellfish Hatchery has operated at its current location for many years. The land
is leased by the City of Seward from the University of Alaska which in turn, leases the land to the
shellfish hatchery operator. In 2006, Chugach Regional Resource Commission (CRRC) took over
operation of the facility and entered into a five-year lease with the City of Seward. CRRC now
requests permission to enter into a five-year lease agreement from 2021-2026 with option to extend
for one five-year extension.
The City of Seward has worked cooperatively with CRRC on building maintenance and code
inspection issues and CRRC has removed all hazardous materials previously stored at the facility.
Shellfish hatcheries increase economic growth by providing a wealth of job opportunities
throughout Alaska, including the City of Seward.
INTENT: To authorize the City Manager to enter into an additional five-year lease with Chugach
Regional Resources Commission for operation of the Alutiiq Pride Shellfish Hatchery.
CONSISTENCY CHECKLIST: Yes No NIA
. ............................................ .........
I. Comprehensive Plan (2030, approved by Council 2017): X
2. Strategic Plan: (1999): X
3. Other (list): X
FISCAL NOTE:
The annual rental rate is $0 per year with no requirement for periodic adjustments.
Approved by Finance Department:
ATTORNEY REVIEW: Yes No
RECOMMENDATION:
Council approve Resolution 2021.-.....................m.......... „, authorizing the City Manager to enter into a five-
year lease with Chugach Regional Resources Commission for the Alutiiq Pride Shellfish Hatchery.
LEASE AND OPERATING AGREEMENT FOR
THE ALUTIIQ PRIDE MARINE INSTITUTE AND SHELLFISH HATCHERY
Dated: January 25, 2021
BY AND BETWEEN:
THE CITY OF SEWARD
and
CHUGACH REGIONAL RESOURCES COMMISSION
TABLE OF CONTENTS
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Definitions.................................................................................................................................. 2
LeasedPremises.........................................................................................................................4
RentalRate.................................................................................................................................4
Management and Operation of Facility........................................................................................4
Representations and Warranties of CRCC....................................................................................
5
Lease and Sublease Control.......................................................................................................6
Operating Costs and Utilities.......................................................................................................6
Maintenanceand Repairs...........................................................................................................6
Cost -Sharing ...............................................................................................................................
8
Liens.......................................................................................................................................
8
Indemnification and Hazardous Materials.................................................................................
8
MothballPlan.......................................................................................................................10
Natureof Relationship..........................................................................................................
10
InspectionAccess.................................................................................................................11
Term of Agreement and Option to Extend..............................................................................11
Insurance...............................................................................................................................
12
Default...................................................................................................................................13
Remedies of the City on CRRC's Default...............................................................................14
PropertyOwnership...............................................................................................................15
Notices..................................................................................................................................
16
EntireAgreement...................................................................................................................16
Amendments..........................................................................................................................16
NoAssignment......................................................................................................................16
Survival.................................................................................................................................16
ForceMajeure.......................................................................................................................
16
LEASE AND OPERATING AGREEMENT FOR THE SEWARD ALUTIIQ PRIDE MARINE
INSTITUTE AND SHELLFISH HATCHERY
This Lease Agreement for the Alutiiq Pride Marine Institute and Shellfish Hatchery (the
"Agreement") is made this 251h day of January 2021, by and between the City of Seward,
P.O. Box 167, Seward, Alaska 99664 (the "City") and Chugach Regional Resources
Commission, a non-profit corporation organized under the laws of the State of Alaska,
1840 Bragaw Street, Anchorage, Alaska 99508 ("CRRC"); and
WHEREAS, the City is the owner of real property ("Property") located in the City of
Seward, Alaska and more particularly described herein; and
WHEREAS, the City, as Lessor, leased the Property to the University of Alaska (the
"University") as Lessee from July 1, 1970 through June 30, 2069, under the conditions
of that Lease Agreement dated March 7, 1991, recorded April 8, 1991, at Book 60, Page
776 in the Records of the Seward Recording District, State of Alaska, as amended (the
"Lease"); and
WHEREAS, the University uses a portion of the Property for the University of Alaska,
Fairbanks School of Fisheries and Ocean Sciences, Institute of Marine Science, Seward
Marine Center ("Seward Marine Center"); and
WHEREAS, under a certain sublease dated October 2, 1995, the University subleased a
portion of the Property (the "Site" as herein defined) to the Alaska Department of Fish
and Game to construct, operate and maintain a Mariculture Production Facility ("MPF")
and Mariculture Technical Center ("MTC") (the MPF and MTC are collectively, the
"Facility" as herein defined); and
WHEREAS, the purpose of the MPF is to produce seed stocks for Alaska aquatic farms
and the purpose of the MTC is to focus on maricultural research in Seward; and
WHEREAS, the Alaska Department of Fish and Game, the City of Seward, and Qutekcak
Native Tribe entered into mutual agreements in December 1997 for the operation of the
MPF and to cover maintenance costs at the MTC while producing high quality spat and
aquatic plant seed stock for the Alaska maricultural industry; and
WHEREAS, QNT began operating the Facility in 1997; and
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 1 OF 17-
WHEREAS, QNT, with the consent of the City, assigned its rights to operate the Facility
to CRCC and the City entered into a lease of the Facility with CRCC in 2006 (Lease 906-
91); and
WHEREAS, the City has determined that a new Lease of the Facility with CRCC under
the same terms and conditions as Lease 906-91 for another 5 (five) year term, with options
to extend for five additional years, is in the public interest and will serve a public purpose
by continuing to assist shellfish research and development of the shellfish fanning
industry and promoting jobs and economic development locally; and
WHEREAS, the City has determined that the Facility complements the adjacent Alaska
Sea Life Center and Seward Marine Center by providing additional research and
educational opportunities in Seward; and
WHEREAS, CRRC has determined that a renewed lease of the Facility, which CRRC
operates under the name "Alutiiq Pride Marine Institute," serves the interests of its
seven constituent Alaska Native villages by providing seed stock to the Tribes,
promoting the cultivation of indigenous food sources, mariculture habitat preservation,
educating Alaska Natives and non -Natives in shellfish farming and the Alaska
manculture industry, and providing employment opportunities.
NOW THEREFORE IN MUTUAL CONSIDERATION OF THE MUTUAL
COVENANTS and in promises expressed herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Definitions
The following terms shall, for the purposes of this Agreement, have the following
meanings:
• "Agreement" means this Lease and Operating Agreement for the Alutiiq
Pride Marine Institute and Shellfish Hatchery.
• City" means the City of Seward, Alaska.
• "CRRC" means the Chugach Regional Resources Commission.
• "Facility" means, collectively, the MPF and MTC and all ponds, parking areas,
structures and land on or pertinent to the Site as depicted in Exhibit B to the
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 2 OF 17-
Sublease (collectively, the "Facility").
• "Force Majeure" means acts of nature, acts of the enemies of the United States of
America, sabotage, blockade, insurrection, not, epidemic, fire, flood, explosion,
earthquake, tsunami, civil disturbance or war.
• "Hazardous Material" means any substance:
o the presence of which requires investigation or remediation under any
federal, Alaska State or local statute, regulation, ordinance, order, action,
policy, or common law; or
o which is or becomes defined as a "hazardous waste," "hazardous material,"
"hazardous chemicals," "hazardous substance," "oil," "pollutant," or
"contaminant" under any federal, Alaska state or local statute, regulation,
rule, or ordinance or amendments thereto including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
(42.U.S.C. Section 2701 et seq.), the Oil Pollution Act of 1990 (33 U.S.C.
Section 2701 et seq.), Title 46 of the Alaska Statutes, and applicable
portions of Title 18 of the Alaska Administrative Code.
• "Lease" means the agreement between the City, as Lessor, and the University, as
Lessee, effective July 1, 1970 through June 20, 2069 under the conditions of that
Lease Agreement dated March 7, 1991, recorded April 8, 1991 at Book 60, Page
776 in the Records of the Seward Recording District, State of Alaska, as amended.
• "MTC" means Mariculture Technical Center.
• "MPF" means Mariculture Production Facility.
• 'Property" means the all of Tracts IA and 113 Waterfront Tracts Subdivision,
Mariculture Addition, according to Plat 97-18, located in the Seward Recording
District, Third Judicial District, State of Alaska, excluding that portion of Tract
113 beginning at the South West comer of said Tract 1B, thence N 05EI4'46" E a
distance of 115.626 meters (379feet) along the western property boundary to the
true point of beginning, thence continuing Northerly along the property boundary
a distance of 10.950 meters (36feet), thence N 56E30'44" E a distance of 11.394
meters (37feet) along the property boundary adjoining Railroad Avenue, thence S
31E25'29" W a distance of 20.146 meters (66feet) to the true point of beginning,
Said parcel containing 0.0049 hectares (527 Square Feet), more or less.
• "Site" means All of Tract 1B, Waterfront Tracts Subdivision, Mariculture
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 3 OF 17-
Addition, according to Plat 97-18, located in the Seward Recording District, Third
Judicial District, State of Alaska, EXCEPTING THEREFROM beginning at the
South West corner of said Tract 113, thence N 05E14'46" E a distance of 115.626
meters (379 feet) along the western property boundary to the true point of
beginning, thence continuing Northerly along the property boundary a distance of
10.950 meters (36 feet), thence N 56E30'44" E a distance of 11.394 meters (37
feet) along the property boundary adjoining Railroad Avenue, thence S 31E25'29"
W a distance of 20.146 meters (66 feet) to the true point of beginning.
• "Sublease" means the agreement between the University, as Sublessor, and the
City, as Sublessee, effective May 28, 2003 for sublease of the Site to the City.
• "Tenn" means the five-year tern of this Agreement, effective January 25, 2021
through January 25, 2026, unless extended or terminated as provided herein.
• "University" means the University of Alaska.
2. Leased Premises
2.1 Premises Leased. City leases the Facility to CRCC.
2.2 Facility accented "As -is." CRRC acknowledges that it is fully aware of the
condition of the Facility and accepts the same "as -is" and without reliance on any expressed
or implied representations and warranties of City or agents of City as to the actual physical
condition or characteristics thereof.
3. Rental Rate
The annual rental rate is $0 per year. No periodic adjustments are required.
4. Management and Operation of Facility
CRRC shall maintain, operate, and control the Facility and shall do so to a standard that is
comparable to that of other well -operated and maintained marine research facilities
throughout the United States.
4.1 Payment of Expenses. CRRC shall be responsible for the payment of all
expenses relating to the management and operation of the Facility.
4.2 Compliance with Laws. CRRC shall comply at all times with all Federal,
State, Kenai Peninsula Borough, and City statutes, ordinances, rules, regulations and
judicial and administrative decisions governing the use and operation of the Facility,
including, without limitation, the terns and provisions of the conditional use permit for
the Facility issued by the City Planning and Zoning Commission.
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 4 OF 17-
4.3 Taxes, Assessments, and Other Charles. CRRC shall pay all real and
personal property taxes, sales taxes, special assessments, and other charges of every
description levied on or assessed against the Site, improvements on the Site, and personal
property located on the Site, to the full extent of installments falling due during the Tenn.
CRRC shall make all such payments before delinquency and before any fine, interest, or
penalty shall become due or be imposed by operation of law for their nonpayment;
provided that CRRC may pay any such payment in installments where permitted by law,
but shall pay any installment with interest before delinquency. CRRC may contest the
legal validity or amount of any tax, assessment, or charge for which CRRC is responsible
under this Agreement. If CRRC contests any such tax, assessment, or charge CRRC may
withhold or defer payment or pay under protest, but shall protect the City and the Site from
any lien by surety bond or other appropriate security.
4.4 Taxation. To the extent that sales by CRRC and rents paid to CRRC related to
the visitor and educational parts of the Site are exempt from City sales tax only because
CRRC is a non-profit corporation, CRRC will collect on all such sales and rents and
remit to the City an amount equal to the City sales tax that would be due on such sales
and rents if such sales and rents were not exempt.
5. Representations and Warranties of CRCC
5.1 CRRC is a non-profit corporation duly organized, validly existing and in
good standing under the laws of the State of Alaska, and has all corporate power and all
government licenses, authorizations, consents, and approvals required to carry on its
business in every jurisdiction where it conducts business.
5.2 The execution, deliver and performance by CRRC of this Agreement are
within CRRC's corporate powers, have been duly authorized by all necessary corporate
action, do not contravene or violate (1) CRRC's Articles of Incorporation or Bylaws; (ii)
any law, rule or regulation applicable to it; (iii) any restriction in any agreement or
instrument to which it is a party or by which it or any of its property is bound; or (iv) any
order, writ, judgment, award, injunction or decree applicable to it.
5.3 CRRC has and will maintain expertise in managing and operating a
mancultural research and production facility adequate for the efficient and safe
operation, management and maintenance thereof.
5.4 CRRC has all the necessary equipment and agrees to maintain such
equipment in working order for the purposes of conducting its activities as described in
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 5 OF 17-
this Agreement. CRRC further warrants that it has obtained a Shellfish/ Aquatic
Plant/Shellfish Hatchery Permit from the Alaska Department of Fish and Game to operate
a shellfish hatchery pursuant to AS 16.40.100 - 16.40.199.
6. Lease and Sublease Control
This Agreement is subject to the terms and conditions of the Sublease attached hereto as
Exhibit A, and the Lease attached hereto as Exhibit B. CRRC shall be responsible for
complying with the terms and conditions of the Sublease and any amendments thereto and
the Lease, and any amendments thereto except that CRRC shall not be responsible for
removing any improvements to the Site upon termination of this Agreement. In the event
of any ambiguity between this Agreement and the Sublease, the terms of the Sublease
shall prevail. In the event of ambiguity between the Agreement and the Lease, the terms
of the Lease shall prevail.
7. Operating Costs and Utilities.
7.1. Operating Costs. CRRC shall maintain the Facility at its own cost. Any
direct or indirect costs incurred by CRRC for the management and operation of the
shellfish hatchery and the maintenance of the Facility will be the sole responsibility of
CRRC. This includes but is not limited to utility costs, operating supplies, salaries,
insurance, and Facility upkeep. CRRC shall provide, without reimbursement, all shared
utilities, including heatedprocess water and electricity to the MTC. CRRC and any MTC
occupant shall negotiate utility compensation for each project initiated at the MTC. The
negotiated agreements shall be in writing and signed by both parties. A copy shall be
provided to the City.
7.2. Utilities. CRRC shall be responsible for the maintenance, repair or
replacement of any failure, defect, deficiency, or impairment of any water supply
system, drainage or sewer system, electrical supply system, electrical apparatus, wires,
or other utilities serving the Facility during the Tenn.
8. Maintenance and Repairs
Routine and long-term maintenance plans for the Facility shall be prepared by CRRC
and submitted to the City for review and approval no later than March 1, 2021. The
plans shall be updated yearly prior to December 31st. The plans will be incorporated as
part of this Agreement.
8.1 Routine Maintenance Plan. The routine maintenance plan shall include, but
not be limited to, thefollowing:
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 6 OF 17-
A. A schedule for day-to-day preventative and non -routine maintenance.
B. Complying with the Shellfish/MTC operations manuals and preventative
maintenance schedules provided by any governmental agency or authority having
jurisdiction.
C. Maintaining the grounds in a clean, safe and sanitary fashion, including adherence
to applicable provisions of the Sublease Agreement in accordance with all applicable
laws, ordinances, orders and regulations of any governmental agency or body having
jurisdiction over the Site.
8.2 Long Term Maintenance Plan. The long-term plan shall include, but not be limited
to the following:
A. Painting of all exposed surfaces.
B. Replacement of all pumps and all items that wear out.
C. Structural maintenance, repair and reconstruction including, but not limited to,
plumbing, heating, electrical systems, roofs, interior walls, exterior walls,
foundation, tanks in a manner which will not jeopardize coverage provided by any
insurance company or companies insuring all or any part of the Facility.
If the maintenance specified in the routine and long -tern plans, or otherwise determined
necessary by the City, is not completed in a timely manner by CRRC, the City will notify
CRRC in writing of the need for correction. If the correction is not made by CRRC within
a reasonable period of time considering the severity of the problem, the City, at its sole
discretion, may correctthe deficiencies by any reasonable means. CRRC shall promptly pay
the City all such costs. Bills may be sent directly to CRRC for payment.
8.3 Repairs. CRRC shall be responsible for all repairs to the Facility necessary during
the life of the Agreement.
8.3.1 Repairs shall be accomplished in a timely manner. If the repair is not made
by CRRC within a reasonable period of time, considering the severity of the problem,
the City, at its sole discretion may correct the deficiencies by any reasonable means, all
costs of which shall be promptly paid by CRRC. Bills may be sent directly to CRRC for
payment.
8.3.2 CRRC shall maintain the level of repair and maintenance necessary to
ensure that upon completion or termination of the Agreement, the Facility is returned to
the City in as good a condition as when received by CRRC, excluding normal wear and
tear.
8.3.4 The annual budget developed by CRRC shall identify the amount allocated
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 7 OF 17-
annually by CRRC for repairs to the Facility.
9. Cost -Sharing
Notwithstanding any other provision of this Agreement, CRRC shall not be required to
pay more than the City's share of utilities, maintenance and repairs required by the
Sublease Agreement.
10. Liens
CRRC shall be solely responsible for paying for all labor performed upon or materials
furnished to the Facility, including maintenance or repair, furnished at the request of
CRRC. CRRC shall keep the Facilities under CRRC's jurisdiction, free and clear of all
mechanics', labor, or materialmen's liens arising from the performance of labor upon or
furnishing materials to the Facility. CRRC shall post and record notices of non -
responsibility for the benefit of the City and the University pursuant to AS 34.35.065, AS
34.35.150 and any other applicable laws.
CRRC shall keep any improvements it undertakes to existing structures and land free and
clear of all liens and shall hold the City and the University harmless from all costs or
liability resulting from such improvements.
11. Indemnification and Hazardous Materials
To the fullest extent permitted by law, CRRC agrees to defend, indemnify and hold
harmless the City of Seward, its elected and appointed officials, employees, and
volunteers against any and all liabilities, claims, demands, lawsuits, or losses, including
costs and attorney fees incurred in defense thereof, arising out of or in any way connected
or associated with this lease.
CRRC shall indemnify, hold harmless, and defend the City, its officers, agents, and
employees from and against all claims arising from death or injury of any person or
damage to any property, occurring in or about the Facility, and CRRC shall pay all costs
of the City, including attorney fees and legal costs, upon receiving notice by the City
thereof, except under any circumstances in which such death, injury, or damage to
property is caused by the intentional, reckless, or negligent conduct of the City, its
officers, agents, and employees; provided, however, that in the event of concurrent
negligence, then each parry shall bear the costs and expenses attributable to it.
11.1 The City shall not be responsible for the condition of the Site, or the
Facility, or the property of any third party that may be on the Site. The City makes
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 8 OF 17-
no representations or warranties respecting the condition of the Facility.
11.2 CRRC shall indemnify, defend and hold the City harmless from and
against any and all claims, demands, damages, losses, liens, costs and expenses
(including attorney's fees and disbursements) which accrue to or are incurred by the
City arising directly or indirectly from or out of or in any way connected with (1) the
inaccuracy of the certifications contained in this Agreement; and (ii) subject to the
provisions of paragraph 4.1., for (a) any activities on or related to the Facility during
CRRC's possession or control which directly or indirectly results in the Site being
contaminated with a Hazardous Material; (b) the discovery of a release of a
Hazardous Material on the Property; and (c) the clean-up, removal, or remediation
of Hazardous Materials on the Property.
11.3 CRRC agrees no Hazardous Materials will be stored onsite during the
term of this Lease.
11.4 If contamination of the Site or of other property or water by Hazardous
Materials occurs or has occurred from CRRC's operations, beginning from when
CRRC first took control of the operation of the Facility in 2006, CRRC, at its sole
expense, shall promptly remediate and restore the affected area in accordance with all
applicable local, state, and federal laws and regulations, and to the satisfaction of the City.
Such remediation and restoration of the affected area by CRRC must not adversely impact
the future operation and development of the Site. The obligations of CRRC in this
paragraph shall survive the completion or termination of this Agreement.
11.5 If contamination of the Facility, the Site, or of other property or water by
Hazardous Materials occurs, or has occurred from CRRC's or QNT's operations,
beginning from when QNT first took control of the operation of the Facility in 1997,
CRRC shall indemnify, defend, and hold the City and the University harmless from any
and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses, including
sums paid in settlement of claims, attorney's fees, consultants fees, expert fees, which are
the result of such contamination. This indemnification of the City and the University by
CRRC includes costs incurred in connection with any investigation of site conditions or
any cleanup, remediation, removal, or restorative work required by federal, state, or local
governmental agencies because of Hazardous Materials present in soil, sediment,
groundwater or state or federal waters. The obligations of CRRC in this paragraph shall
survive the completion or termination of this Agreement.
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 9 OF 17-
12. Mothball Plan.
CRRC shall prepare a Mothball Plan, as described below, and assumes and remains responsible
for the implementation of such plan including financial liability according to the terms of this
Agreement, to the extent the City would otherwise have such responsibilities.
12.1. Mariculture Technical Center/Shellfish Hatchery Mothballine.
Mothballing is defined here as putting the Facility into a non -operational status. It is a strategy
exercised upon notice of termination when there is a reasonable chance that a shellfish hatchery
will again operate on the Property in the future. The mothballing focuses on preparing the
Facility for a down time that makes it simple to reactivate production. It includes, but is not
limited to, the following actions: removal of all plants and animals, disinfection of tanks, pipes,
filters, containers, proper storage of all equipment and nonperishable supplies, and installation
of an adequate number of alarms for protection of the facility and equipment from vandals,
thieves and the weather. The intent is to insure ease of future operations by protecting the
Facility and all equipment. CRRC shall, at a minimum perform the following: (1) properly
dispose of all animals and plants; (ii) repair, clean and disinfect all walls, floors, and other
building components; (iii) leave grounds surrounding the Facility in a clean and neat fashion
with all trash and useless items removed; (iv) prepare electric and mechanical devices for
storage; (v) clean, disinfect and plastic wrap all hatchery culture equipment; (vi) drain and flush
all systems and replace all sand in filters; (vii) protect outside tanks from all weather conditions;
(viii) install security devises; and (ix) pay all utility costs including, but not limited to, heat,
electricity, and phone service to provide approved internal environmental protection to the
Facility. The City may inspect the Facility upon CRRC's notification that the mothballing is
complete. If CRRC fails to mothball the Facility to the satisfaction of the City, the City may
accomplish the mothballing and bill CRRC for all costs. CRRC shall repay all sums so expended
by the City within thirty days of receipt of a bill for collection.
13. Nature of Relationship.
The relationship of CRRC to the City shall be that of an independent contractor to perform
those services set forth in this Agreement or such other services as to which the parties may
from time to time agree in writing. CRRC is not an employee, partner, or j oint venturer
with the City. CRRC's work shall not be subject to supervision by the City and CRRC
shall establish its work schedule, in its discretion, and the process and methods to perform
the services required by this Agreement. CRRC represents that it has specific expertise in
maricultural management, and that it will perform all services in accordance with
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
-PAGE 10 OF 17-
applicable laws, reasonable and ordinary business customs, and in an efficient manner.
14. Inspection Access.
The City, through its authorized agents shall have the right at reasonable times and in a
reasonable manner so as not to interfere with CRRC's operations, to have access to the
Facility for the purpose of confirming that CRRC is conducting its operations in the manner
required by this Agreement or to conduct an inspection or audit. CRRC shall reimburse the
City for the City's reasonable costs in utilizing consultants for inspections, audits, and
reviews of the Facility and its records, including, without limitation, accounting,
environmental, safety, health, regulatory compliance, and operational reviews. Absent
negligent, reckless, or willful misconduct by the City, CRRC shall indemnify and hold
harmless the City from all claims or liabilities for damages arising out of any injury or
property damage sustained while upon the Facility as permitted under this section.
15. Term of Agreement and Option to Extend
15.1 Term: Provided that CRRC has complied with 16 (Insurance), this Agreement
shall be effective January 25, 2021, and terminate:
A. On January 25, 2026 (five years) unless extended or terminated as provided in this
Agreement;
B. Upon termination of the Sublease;
C. Thirty (30) days following written notice by the City of an Event of Default as
defined in Section 17 of this Agreement:
i. If such Event of Default is one of a nature curable within thirty (30)
days and such default has not been cured; or
ii. If such Event of Default is of a nature not curable within thirty (30)
days, then in the event CRRC fails to commence the curing of such
default within such thirty (30) day period and diligently prosecute
the curing of the same; and provided that CRRC shall not have the
opportunity to cure if a prior default of any nature and prior notice
of default has occurred within one hundred eighty (180) days of
such notice; or
D. Without any liability of the City to CRRC, the City may terminate this Agreement
on 180 days' notice to CRRC.
15.2 Options to Extend. CRRC shall have the right to extend the term of this
Agreement for 1 additional five (5) year period, provided that:
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
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A. CRRC exercises any applicable option to extend at least 30 days
prior tothe expiration of the then current tern;
B. CRRC is not in default under any tern or provision of this Agreement; and
C. CRRC shall exercise its options to extend by sending written notice
thereof in accordance with the provisions of Section 20 of this
Agreement.
16. Insurance
CRRC shall obtain and maintain during the tern hereof, the following minimum insurance
coverages, as required by the Lease and this Agreement. Certificates of Insurance are to
be provided to the City upon execution of this Agreement, and prior to the inception of
work or occupancy, and must provide for a thirty (30) day prior notice to the City and
the University of cancellation, nonrenewal, or material change of the policies. Current
Certificates of Insurance evidencing compliance with the requirements of this
paragraph shall be provided to City on or before each January 25 during the tern hereof
and upon renewal of each required policy. Failure to comply with these provisions for
insurance and Certificates of Insurance shall be an Event of Default. Excepting workers
compensation, all policies are to be endorsed to name the University and the City
additional insureds and shall provide a waiver of subrogation in favor of the University
and the City. All insurance shall be on an occurrence and not a claims made basis.
A. Workers compensation and Employers Liability Insurance as required by AS.
23.30.045. The coverage must include statutory coverage for states in which
employees are engaging in work and employer's liability protection not less
than Five Hundred Thousand ($500,000) per person, Five Hundred Thousand
($500,000) per occurrence. Where applicable, coverage for all federal acts
(i.e., U.S.L. & H. and Jones Act) must also be included.
B. Comprehensive (Commercial) General Liability Insurance with coverage
limits not less than Two Million Dollars ($2,000,000) combined single limit
per occurrence and annual aggregate where generally applicable including
premises operations, independent contractors, products/completed
operations, broad form property damage, blanket contractual, and personal
injury endorsements.
C. Comprehensive Automobile Liability Insurance covering all owned, hired,
and non -owned vehicles with coverage limits not less than Two Million
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
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Dollars ($2,000,000) combined single limit per occurrence bodily injury and
property damage.
D. All Risk Property Insurance (including earthquake and flood) on the
Man* culture Technical Center/Shellfish Hatchery and equipment forming part of
or otherwise connected to the Facility, in such amounts and with such
deductibles as under good management practices are ordinarily provided for
similar buildings and equipment, but in no event in an amount less than the
replacement value of the Facility. The City shall also be named as a loss payee
on any settlement under this insurance and CRRC shall be obligated to pay the
deductibles.
The City, at its option, has the right to pay any delinquent premium upon any of the
policies if necessary to prevent a cancellation, nonrenewal, or material alteration thereof,
and CRRC agrees that it shall, within thirty (30) days, reimburse the City.
17. Default
17.1 Events of Default of CRCC. Each of the following events shall constitute an
Event of Default under this Agreement:
17.1.1 Failure to Pay. The failure of CRRC to pay any sum of money due under
this Agreement within ten (10) days after the same is due hereunder.
17.2 Default of Covenants or Conditions.
17.2.1 Failure to Pay. Failure by CRRC in the performance or observance of
any covenant or condition of this Agreement (other than a default involving the payment of
money or under Section 17.1.1 hereof), which default is not cured within thirty (30) days
after the giving of notice thereof by the City, unless such default is of a nature that it cannot
be cured within such thirty (30) day period, in which case no Event of Default shall be
declared so long as CRRC shall commence the curing of the default within such thirty (30)
day period and shall thereafter diligently prosecute the curing of same.
17.3 Compliance with Health and Life/Safety Codes. Failure by CRRC to operate
or maintain the Facility in compliance with health and life/safety codes as required by this
Agreement, local, state, or Federal law or permit.
17.4 Representations or Warranties. If any representation or warranty by CRRC
contained in this Agreement or any document provided to the City by CRRC is false in any
material respect as of the date of the making or furnishing thereof and which would have a
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
SHELLFISH HATCHERY
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material adverse effect on the Facility or this Agreement.
17.5 Execution, Insolvency. The sale of CRRC's interest in this Agreement under
attachment, execution, or similar legal process; or if CRRC is adjudicated as bankrupt or
insolvent under any state bankruptcy or insolvency law or an order for relief is entered
against CRRC under the federal Bankruptcy Code.
17.6 Filing of Bankruptcy Petition. The commencement of a case under any
chapter of the federal Bankruptcy Code by or against CRRC, or the filing of a voluntary or
involuntary petition proposing the adjudication of CRRC as bankrupt or insolvent, or the
reorganization of CRRC, or an arrangement by CRRC with its creditors.
17.7 Admission of Inability to Pay Debts. The admission in writing by CRRC of
its inability to pay its debts when due.
17.8 Appointment of Receiver or Trustee. The appointment of a receiveror trustee
for the business or property of CRRC, unless such appointment shall be vacated within ten
(10) days of its entry.
17.9 Assienment for Benefit of Creditors. The making by CRRC of an assignment
for the benefit of its creditors, or if in any other manner CRRC's interest in this Agreement
shall pass to another by operation of law.
17.10 Dissolution. The voluntary or involuntary dissolution of CRRC.
17.11 Lease Agreement, The failure of CRRC to comply with any tern of the
Sublease.
17.12 Other Events of Default. The occurrence of any other event described as
constituting an Event of Default of CRRC elsewhere in this Agreement.
18. Remedies of the Citv on CRRC's Default
Upon the occurrence and continuation of CRRC's Event of Default, the City, without
notice to CRRC in any instance (except where expressly provided for below), in addition
to all remedies available at law, may do any one or more of the following with respect to
CRRC:
18.1 Termination. Terminate this Agreement and the rights created herein by
giving notice of such election to CRRC. The City, by written notice, may terminate this
Agreement, in whole or in part, when it is in the best interest of the City.
18.2 Recover Monies. Recover all monies owed by CRRC to the City under the
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reimbursement provision of this Agreement.
18.3 Enter Property, Take Possession of Property: With or without judicial
process, enter the Facility and take possession of all goods, inventory, equipment, fixtures,
accounts, general intangibles, and all other personal property of CRRC situated in or on, or
used in connection with, the Facility without liability for trespass or conversion, and may
sell all or any part thereof at public or private sale.
18.4 Perform Obligations. Without assuming any obligation to do so, perform,
on behalf of and at the expense of CRRC, any obligation of CRRC under this Agreement
which CRRC has failed to perform and of which the City shall have given CRRC notice,
the cost of which performance by the City, shall be payable by CRRC to the City upon
demand, and such sums shall bear interest until paid at a rate equal to ten and one-half
percent (I0.5%) or the highest rate permitted by Alaska law, whichever is less.
18.5 Specific Performance. Seek specific performance of any term or provision of
this Agreement.
18.6 Use of Property, If this Agreement is terminated, the City may enter into other
agreements providing for use of the Facility for such term or terms (which may be greater
or less than the period which otherwise would have constituted the balance of the term) and
on such terms and conditions (which may include concessions or free use and alterations of
the Facility) as the City, in its absolute discretion, may determine. If required by the City in
writing prior to the effective date of termination, CRRC shall implement and complete the
Mothball Plan. Thereafter, and with the termination of the Agreement, CRRC shall have no
further obligations under the Agreement unless expressly stated otherwise in this
Agreement.
18.7 Other. Nothing herein shall limit the City's remedies at law or in equity.
19. Property Ownership
Nothing in this agreement transfers the title, land jurisdiction, or ownership of buildings
or structures from the City to CRRC.
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20. Notices
Notices required by this Agreement shall be in writing and shall be effective when hand -
delivered or when received if sent by registered or certified mail, return receipt
requested, or three (3) days following postmark if sent by first class mail, postage
prepaid to the addresses listed below. Each party shall notify the others in writing of
any change in address:
The City: City of Seward
P.O. Box 167, Seward, Alaska 99664
Attn: City Manager
with a copy to. -
Boyd, Chandler, Falconer & Munson, LLP
911 West 8th Avenue, Suite 302, Anchorage, Alaska 99501
The Operator: Chugach Regional Resources Commission
1840 Bragaw Street, Anchorage, Alaska 99507
Attn: Jeff Hetrick
21. Entire Agreement
CRRC and the City acknowledge that this Agreement constitutes the entire agreement
between the parties hereto.
22. Amendments
No changes or modifications may be made to this Agreement without prior written consent
signed by the City and CRRC.
23. No Assignment
This Agreement may not be assigned in whole or in part.
24. Survival
CRRC's responsibilities and duties under Section II - Indemnification, and Section 12 -
Mothball Plan of this Agreement shall survive the termination of this Agreement.
25. Force Maieure
In the event of Force Majeure resulting in substantial damage to the Facility, the City and
CRRC shall assess the damage and elect to repair the Site, contract out the repairs, or
terminate the Agreement without fault. The ability to repair will be based on available
funding and the level of damage sustained. Neither parry will be responsible for any loss or
damage resulting from a force majeure.
LEASE AND OPERATING AGREEMENT FOR THE ALUTIIQ PRIDE MARINE INSTITUTE AND
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IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
day and year first above written.
ATTEST:
Brenda Ballou, MMC
City Clerk
CITY OF SEWARD
Noonan Regis, Acting City Manager
CHUGACH REGIONAL RESOURCES
COMMISSION
By:
Jeff Hetrick, Director
The University consents to the above Agreement.
UNIVERSITY OF ALASKA
By:
Its:
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