HomeMy WebLinkAboutRES2023-001 Breeze Inn Lease Assignment to ZPA - FAILED Sponsored by: Bower
Public Hearing: January 9, 2023
A,LI
� Request for Reconsideration: January 10, 2023
Reconsideration: January 23, 2023
Reconsideration Failed: January 23, 2023
CITY OF SEWARD,ALASKA
RESOLUTION 2023-001
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A
CONSENT ASSIGNMENT TO ZPA, LLC,TO THE LEASE AGREEMENT
L04-096 WITH JURIS MINDENBERGS,FOR LOT 3B,BLOCK 1,MARINA
SUBDIVISION,CITY OF SEWARD,KENAI PENINSULA BOROUGH PLAT
2005-8,SEWARD RECORDING DISTRICT,THIRD JUDICIAL DISTRICT,
STATE OF ALASKA, TO AMEND ARTICLES 3, 6.1, 11.2 AND 12.3, AND
EXTENDING THE TERM OF THE LEASE FOR 17 YEARS,AND TO ADD
TWO FIVE-YEAR OPTIONS TO EXTEND
WHEREAS,Juris Mindenbergs("Lessee")has requested an Assignment of Lease to ZPA,
LLC of the existing lease agreement with the City of Seward for 74,180 square feet,more or less of
Lot 3B, Block 1, Marina Subdivision, City of Seward, Kenai Peninsula Borough, Plat No. 2005-8
recorded in the Seward Recording District, Third Judicial District, State of Alaska; and
WHEREAS,Article 14 of the Lease provides that the Lessee shall have the right to assign
the lease upon findings by the City Council that use is found to be in the public interest;and that the
proposed assignee has credit-worthiness and operating experience suitable to manage any facilities
on the lease site; and
WHEREAS,the lease site will continue to be utilized as a hotel,restaurant and retail shop
and is consistent with current zoning and land use regulations; and
WHEREAS, the current lease has been in effect since October 1, 2005; and
WHEREAS,the current lease will expire September 30, 2035; and
WHEREAS,ZPA,LLC is requesting to extend the lease term by seventeen years and to add
two five year options to extend; and
WHEREAS,ZPA,LLC has credit-worthiness and operating experience suitable to manage
any facilities on the lease site; and
WHEREAS, the city is amending Article 3 by adding 3.8, Interim Rental Adjustments.
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
CITY OF SEWARD, ALASKA
RESOLUTION 2023-001
OF SEWARD,ALASKA that:
Section 1. The City Manager is hereby authorized to enter into Consent to Lease Assignment
to ZPA, LLC, in substantially the form as attached hereto.
Section 2. The recitals set forth above are incorporated herein by reference and adopted as
findings of the City Council. For the reasons stated, an assignment to ZPA, LLC, in the form
presented at this meeting is found to be in the public interest.
Section 3. The City Manager is hereby authorized to amend and extend the lease with ZPA,
LLC in substantially the form as presented at this meeting is found to be in the public's interest.
Section 4. This resolution shall take effect thirty (30) days from the date and posting of
adoption or on the date of closing of the sale of the improvements on the lease site to ZPA, LLC,
whichever is later.
PASSED AND APPROVED by the City Council of the City of Seward,Alaska,this 9th day
of January, 2023.
THE CITY OF SEWARD,ALASKA
FAILED
Sue McClure, Mayor
AYES: None
NOES: Osenga, Calhoon, Finch, DeMoss,Wells, Barnwell, McClure
ABSENT: None
ABSTAIN: None
ATTEST:
Brenda J. Ballou, MMC
City Clerk
(City Seal)
City Council Agenda Statement
Meeting Date: January 9, 2023
To: City Council
Through: Janette Bower, City Manager
From: Norm Regis, Harbormaster
Agenda Item: Resolution 2023-001, Authorizing The City Manager To Enter Into A
Consent Assignment To ZPA, LLC,To The Lease Agreement L04-096
With Juris Mindenbergs, For Lot 3B, Block 1, Marina Subdivision, City
Of Seward, Kenai Peninsula Borough Plat 2005-8, Seward Recording
District, Third Judicial District, State Of Alaska. To Amend Articles 3,
6.1, 11.2 And 12.3 And Extending The Term Of The Lease For 17
Years And To Add Two Five Year Options To Extend
Background and justification:
Juris Mindenbergs currently has Lease L04-96 containing 74,180 square feet more or less of Lot 3B
Block 1 Marina Subdivision, City of Seward, Alaska and recorded as Plat No.2005-8 in Seward
Recording District, Third Judicial District, State of Alaska.
Juris Mindenbergs has requested approval to assign the lease to ZPA, LLC, which will continue to
use the leased land for a Hotel, Restaurant, and Retail shop. Article 14 of the lease allows lease
assignments upon findings by City Council that the use is found to be in the public interest and that
the proposed subtenant has credit-worthiness and operating experience suitable to manage the
facilities on the leased property.
The current lease L04-96 will expire on September 30, 2035. ZPA, LLC. would like to request a
seventeen-year extension to the lease which would make the lease term ending date September30,
2052.
ZPA, LLC. Is also requesting two five-year options to extend on approval of the City Council.
The City is also amending Article 3 adding 3.8, which was not in the original lease.
3.8 Interim Renta/Adjustments. For each year in the period between each Rental Adjustment
Date, excepting the Rental Adjustment Dates, the annual rental payment shall be increased
beginning July 1, 2023 and on July 1 of every year thereafter (each on "Interim Rental
Adjustment Date") in an amount that reflects the increase, if any, in the cost of living for
the previous year as stated in the Consumer Price Index,All Urban Consumers,Anchorage,
Alaska Area, All Items 1967=100 ("CPI"), as published by the United States Department of
Labor, Bureau of Labor Statistics for the most recent period published immediately prior to
the Interim Rental Adjustment Date. In no event shall the rent be less than the previous
year. If the CPI is revised or ceases to be published, the CITY shall instead use such
revised or other index as most nearly approximates the CPI for the relevant period, and
make whatever adjustment in its application as may be necessary, in the CITY's sole
discretion, to accomplished as nearly the same result as if the CPI had not been revised or
ceased to be published.
164
This is consistent with the methodology used in all new lease actions approved by the City Council.
Certain lease provisions that created a deadline for construction of an addition to the hotel are
being deleted since the addition has already been built.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan: Attract new business and industry to the greater Seward area.
Strategic Plan: Attract new industry: Develop an aggressive marketing campaign which
highlights the diverse resources, and quality of life that make Seward a
great place to live and establish a business or industry.
Other:
Certification of Funds
Total amount of funds listed in this $ 62,000.00
legislation:
This legislation (✓):
X Creates revenue in the amount of: $ $62,000.00
Creates expenditure in amount of: $
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (✓):
X Budgeted Line
item(s):
Not budgeted
Not applicable
Unassigned Fund Balance and Available Unrestricted Cash Balance Information
Fund (✓):
x General SMIC Electric Wastewater
Boat Harbor Parking F1 Water F1 Healthcare
Motor Pool x Other Harbor
Unassigned Fund Balance*: $ *unaudited numbers
Available Unrestricted Cash $
Balance*:
Finance Director Signature:
165
Attorney Review
x Yes Attorney
Signature:
Not Comments:
applicable
Administration Recommendation
x Approve
Resolution
Other:
166
ASSIGNMENT OF LEASE
RE-L09-095
TIIIS ASSIGNMENT OF LEASE ("Assignment") made and entered into between Juris
Mindenbergs, Lessee, 4128 148"' Avenue NE, Redmond, Washington 99052, hereinafter called
"ASSIGNOR",and ZPA,LLC 1120 Huffman Road STE 24,Anchorage,Alaska 99515,hereinafter
called"ASSIGNEE" with the consent of the City of Seward, hereinafter called "LESSOR".
WHEREAS,ASSIGNOR and LESSOR,a home rule municipal corporation,organized and
existing under the laws of the State of Alaska, are parties to a Lease dated October 1", 2005, as
amended by the First Amendment to Lease Agreement dated September 7, 2006 (collectively as
amended, the "Lease"). Subject to the covenants, conditions and stipulations in the Lease,
ASSIGNOR leases from LESSOR the following improved real property: Lot 3, Block 1, Marina
Subdivision,City of Seward,Alaska and recorded as Plat No.2005-8 in Seward Recording District,
Third Judicial District, State of Alaska,consisting of approximately 72,125 square feet,more or less
("Premises").
WHEREAS, ASSIGNOR and ASSIGNEE are parties to a Purchase and Sale Agreement
dated October 4,2022("Purchase Agreement"),which includes the sale of the improvements on the
Premises and assignment of the Lease.
WHEREAS, this Assignment is conditioned upon the occurrence of the following two
events and shall only become effective ("Effective Date")on the date which is the later of: 1)thirty
(30) days from the date and posting of adoption of a passed and approved resolution by the City
Council of Lessor authorizing the City Manager to enter into a Consent to Assignment to
ASSIGNEE, or 2) closing under the Purchase Agreement ("Closing Date"). Failure of either
condition precedent shall result in this Assignment being null and void.
WITNESSETH,that for valuable consideration paid by the ASSIGNEE to the ASSIGNOR,
receipt whereof is hereby acknowledged,the ASSIGNOR assigns to the ASSIGNEE all of its right,
title and interest in and to the Lease to ASSIGNEE as of the Closing Date. After the Closing Date
ASSIGNOR shall have no further obligations under or liabilities arising from the Lease, except; 1)
those arising from or related to circumstances prior to the Closing Date; and 2) those based on
ASSIGNOR's duty to defend and inde4nnify the Landlord pursuant to Article 15 of the Lease;and 3)
those based on Article 14.1( e) of the Lease.
ASSIGNEE accepts the assignment and delegation and assumes and covenants during the
continuance of said Lease term to pay the rents reserved and to perform the covenants, conditions,
and stipulations in said lease, as amended,to be performed by the ASSIGNOR, including without
limitation,Article 21 —Environmental Concerns and to keep indemnified the ASSIGNOR against
all actions,claims,and demands whatsoever in respect to the said rents,covenants,conditions,and
stipulations, or anything relating thereto.
4876-6230-7642,v.2
170
ASSIGNOR agrees to indemnify, hold harmless and defend ASSIGNEE from and against
any obligations,liabilities,costs and claims(including reasonable attorney's fees)arising as a result
of or with respect to the Lease that are attributable to the period of time prior to the Closing Date.
ASSIGNEE agrees to indemnify, hold harmless and defend ASSIGNOR from and against any
obligations,liabilities,costs and claims(including reasonable attorney's fees)arising as a result of or
with respect to the Lease that are attributable to the period of time from and after the Closing Date.
ASSIGNEE agrees to indemnify LESSOR in accordance with Article 14.1 ( d)of the Lease.
This Assignment shall be binding on and inure to the benefit of the ASSIGNOR and
ASSIGNEE, their heirs, executors, administrators, successors in interest and assigns. This
Assignment shall be governed by and construed in accordance with the laws of the State of Alaska.
This Assignment may be executed in multiple counterparts,which together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the dates
indicated.
ASSIGNOR: A SI NE
r � .
JuriVlindenbergs ZPA LLC `*�y����rri•••
By: Charles Jackson .�•O��.I-..NoV•.,•
Its: Authorized Member �; T
�p
SE U =
Date: z Date: ,'!.3
F
4dpaax �at a4
)ss
TUIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this day of ,2022,personally appeared before
me the undersigned, a Notary Public in and for the State of•�� to me known to-4vr�ts
'� m
who executed the foregoing instrument and acknow1 e '``ge tobleme'�& said instrument to
be the free and voluntary act and deed, for the uses and purposes therein mentioned of the
corporation and on oath stated that they are authorized to execute said instrument on behalf of the
corporation.
WITNESS my hand and notarial seal the day and year first hereinabove written.
4876-6230-7642,v.2
171
STATE OF WASHINGTON)
COUNTY OF KING)
THIS IS TO CERTIFY that on thisb-01 day of November, 2022, personally appeared
before me the undersigned,a Notary Public in and for the State of Washington,to me known to Juris
Mindenbergs who executed the foregoing instrument and acknowledged to me the said instrument
to be the free and voluntary act and deed, for the uses and purposes therein mentioned of the
corporation and on oath stated that he is authorized to execute said instrument on behalf of the
corporation.
WITNESS my hand and notarial seal the day and year first hereinabove written.
�:Mf�TINE A�L�EMA T BlK
Notary Public Notary Public in and for Washington
Staq of Washington My Commission Expires: �}�p jwjnnz�3
W
Lieans*Number 208803
My Cornrnission Expires
un 2623
4876-6230-7642, v.2
172
CONSENT TO ASSIGNMENT
This CONSENT TO ASSIGNMENT is made and entered into by the City of Seward
("City").
RECITALS
A. The City and Juris Mindenbergs are parties to that certain Lease Agreement L04-
096; dated as of 10/1/2005, as evidenced in that certain Memorandum of Lease
recorded 10-2-2006 as Serial No.2006-001447-0; and
B. The legal description of the leased property is:
Lot 3B Block 1 Marina Subdivision, City of Seward, Alaska and recorded as
Plat No.2005-8 in Seward Recording District, Third Judicial District, State
of Alaska. and
C. Juris Mindenbergs has asked that the City consent to the assignment of all of
right, title, and interest in and to the Agreement to ZPA, LLC.
CONSENT
1. City hereby consents to the assignment of Juris Mindenbergs right, title
and interest in and to the Agreement to ZPA, LLC's assumption of all of the obligations
of Juris Mindenbergs (the assignment and assumption of the Agreement is collectively
referred to herein as the "Assignment"). Following the Assignment, the Agreement
shall continue in full force and effect with ZPA, LLC, substituted for Juris Mindenbergs
as applicable.
The undersigned has executed this Consent to Assignment as of the date set forth
below.
City of Seward
Date:
By:
Janette Bower, City Manager
ATTEST:
Brenda Ballou, City Clerk
173