HomeMy WebLinkAboutRES2023-097 Army Dispatch Building Lease PH Sponsored by: Regis
Public Hearing: August 28, 2023
CITY OF SEWARD,ALASKA
RESOLUTION 2023-097
A RESOLUTION OF THE CITY COUNCIL OF SEWARD, ALASKA
APPROVING LEASE AMENDMENT NO. 1 WITH THE UNITED STATES
OF AMERICA ACTING BY AND THROUGH THE SECRETARY OF THE
ARMY
WHEREAS, the City of Seward leased Tract A, Marina Subdivision Seward Resort
Addition,Plat No.2010-10,Seward Recording District,Third Judicial District State of Alaska("the
Property")to the United States of America acting by and through the Secretary of the Army("the
Government")pursuant to terms set forth in Lease No.DACA85-5-1100064 effective September 30,
2011 ("the Lease"); and
WHEREAS, City of Seward Resolution 2011-061 approved the Lease; and
WHEREAS,allowable uses of the Property under the terms of the Lease are limited to the
construction,maintenance and operation of a marine dispatch building for purposes related to the use
of Government's vessels moored at the City's Small Boat Harbor; and
WHEREAS, the Government intends to cease use of vessels moored at the City's small boat
harbor; and
WHEREAS,the Government wishes to continue to use the Property after it ceases use of
vessels moored at the City's small boat harbor for recreational purposes for military personnel
specifically as a workout facility and to provide overnight lodging for military personnel on a short
term basis ("the Proposed New Use"); and
WHEREAS,the Proposed New Use is not permitted under the terms of the Lease and;
WHEREAS,Article 34 of the Lease requires that any amendment to the Lease be in writing
and signed by the City and the Lessee; and
WHEREAS, the Government and the City negotiated an Amendment to the Lease which
will allow the Proposed New Use and also implement city policy regarding interim rent adjustments;
and
WHEREAS,the City of Seward has long supported the men and women who serve in the
armed forces of the United States by allowing use of City property 'to provide recreational
opportunities for those who serve our country.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF SEWARD,
ALASKA that:
CITY OF SEWARD, ALASKA
RESOLUTION 2023-097
.1
Section 1. The Seward City Council approves Lease Amendment No. 1 to the Lease.
Section 2. The Seward City Council finds that the essential terms and conditions of Lease
Amendment No. 1 are in the public interest.
Section 3. This resolution shall take effect 30 days from the date of posting of adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 28th
day of August, 2023.
THE CITY OF SEWARD, ALASKA
StMAVVCC L w•.�
Sue McClure, Mayor
AYES: Wells, Finch, Barnwell, McClure
NOES: None
ABSENT: DeMoss, Calhoon, Osenga
ABSTAIN: None
ATTEST:
/�"l/ /A—..---
Kris Peck,
City Clerk
(City Seal) ,,,O O,.F.•�SE{��••.%%
SEAL i • :
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�"/gte OF P\-P••s%
City Council Agenda Statement
Meeting Date: August 28, 2023
To: City Council
Through: Norm Regis,Acting City Manager
From: Brooks Chandler, City Attorney
Agenda Item: Resolution 2023-097: A Resolution Of The City Council Of Seward,Alaska
Approving Lease Amendment No. 1 To The Lease Agreement Between The City
Of Seward And The United States Of America Acting Through The Secretary Of
The Army
Background and justification:
The City of Seward has a long-standing relationship with the United States Army focused on allowing use
of City property to provide recreational opportunities for military members. City property at the harbor
has been used since 2011 as a dispatch center for vessels the Army moored at the Small Boat Harbor.
The Army recently stopped using those vessels and intends to sell them this fall. The general manager of
the Army's Seward Resort recently asked if the City would allow the use of the property to be converted
from a dispatch center to a workout facility on the ground floor and short-term rental units on the second
floor. These new uses comply with the current zoning regulations for this district but would require a
lease amendment. The lease agreement was approved in 2011. The lease expires in 2031. There are 2
five-year extension options.
The Lease Amendment expands allowable uses of the property to include the new proposed uses. The
Amendment also incorporates the current policy for annual CPI rent adjustments.
The United States accepted the proposed lease amendment before the Council for approval. The City
Attorney has participated in negotiations. Approval is a policy decision for the Council.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan: 3.1.1.7 Encourage additional military facilities that upgrade Seward as a Morale
Welfare and Recreation(MWR)destination.
Strategic Plan: Recreation and Leisure: We provide diverse, year-round, indoor and outdoor
recreational, educational, and cultural opportunities and facilities for residents and
visitors of all ages and socioeconomic backgrounds.
Other:
Certification of Funds
Total amount of funds listed in this legislation: S 0
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
X Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
187
XD Not applicable
Attorney Review✓ Administration Recommendation
X Yes X Adopt Resolution
Not applicable Other:
City Attorney Signature:
188
LEASE AMENDMENT NO. 1
(Lease No. RE- DACA85-5-1100064- 2011 Lease Agreement between the City of Seward and the
United States Army for Tract A, Marina Subdivision Seward Resort Addition)
THE CITY OF SEWARD,ALASKA, a home rule municipal corporation, organized and existing
under the laws of the State of Alaska, hereinafter referred to as "CITY", and the UNITED STATES OF
AMERICA, acting by and through the Secretary of the Army, P.O. Box 6898, JBER, Alaska 99506-0898
hereinafter referred to as "GOVERNMENT",hereby agree that the Lease for Tract A,Marina Subdivision
Seward Resort Addition, Plat No. 2010-10, Seward Recording District, Third Judicial District State of
Alaska effective September 30, 2011, ("the Lease") is hereby amended as set forth below:
1. The first WHEREAS clause of the Lease, beginning "WHEREAS, the Government desires to
lease land" is hereby amended to read as follows:
WHEREAS,the GOVERNMENT desires to lease land from the CITY for the construction,
maintenance and operation of a marine dispatch building, or a workout facility and nightly lodging
for military personnel; and
2. Article 1.1 PREMISES is hereby amended to read as follows:
1.1 PREMISES
CITY hereby Leases to GOVERNMENT the following described premises:
Approximately 2,546 gross square feet, more or less, of land (the "Premises ")described as:
Tract A, Marina Subdivision Seward Resort Addition, according to Plat 2010 -10 recorded in
the Seward Recording District, Third Judicial District, State of Alaska, more particularly
shown on Exhibits A and B, attached hereto and made a part hereof. Premises will be used
for the construction, maintenance and operation of a marine dispatch building for purposes
related to the use of GOVERNMENT'S vessels moored at the CITY'S Small Boat Harbor and as a
NN orkout facility and nightly lodging for military personnel.
3. Article 3. RENTAL RATE- is amended by adding a new section 3.4.5 to read as
follows:
INTERIM RENTAL 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, 2024 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
LEASE AMENDMENT N0.1 Page 1
192
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 CPl had not been
revised or ceased to be published.
4. Article 4.1 USE OF PREMISES is amended to read as follows:
4.1 USE OF PREMISES.
CITY has limited land available for Lease. Use of the Premises by GOVERNMENT
for a marine dispatch building,and uses necessary and incidental thereto, including use as a
workout facility and for nightly lodging for military personnel has been determined by the
City Council of the City of Seward to be in the public interest.
S. Article 4.2(f) is amended to read as follows:
f. GOVERNMENT shall not allow any camping on the Premises.
This Amendment No. I is effective as of September 30,2023.
In all other respects,the Lease is to remain unchanged and in full force between the undersigned
parties.
IN WITNESS WHEREOF,the parties hereto have executed this document,and it is effective
this,dday of ,2023.
CITY: GOVERNMENT:
CITY OF SEWARD, ALASKA
Norm Regis mg City Manager UNITED STATES bf AMERICA
Acting by and through the
SECRETARY OF THE ARMY
Brinda L. Hazard
Date: �r 3 Q o?Q.Z , Real Estate Contracting Officer
LEASE.MMMENT RO k Ape 2
U.S. Army Engineer District,Alaska
Date:
ATTEST:
ry✓
11�111�1�/
Kris Peck ��.�`OF SEWA,Q'•♦♦♦
City Clerk :���,.�0
S
• '•. ~'� • \�Q����\G11�111,,1,1Cp
rp1 1/ �ici(Cit Seal) ' ' 2 � � , Ri
CA✓
%'••., rgrE pF P - NOTARY -
STATE OF ALASKA
THIRD JUDICIAL DISTRICTss ) /',�� O
THIS IS TO CERTIFY that on this 30 day of ?4 c u ;2023,before me,the undersigned, a
Notary Public in and for the State of Alaska,personally appeared Norm Regis,known to me and to me
known to be the Acting City Manager for the City of Seward, Alaska,and authorized to execute
documents on its behalf,and is the individual named in and who executed the foregoing document on
behalf of the City of Seward for the uses and purposes therein set forth.
WITNESS my hand and notarial seal the day and year first hereinabove written.
NOTARY PUBL IN AND FOR ALASKA
My Commission Expires: ///V-gvg 6
STATE OF ALASKA }
)ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ;1& day of ,2023,before me,the
undersigned, a Notary Public in and for the State of Alaska,personally appeared Brinda L.Hazard,
known to me to be a Real Estate Contracting Officer for the U.S. Army Corps of Engineers,Alaska
District,and authorized to execute documents on its behalf and is the individual named in and
LEASE AAUNMIEW NO 1 hp 5
who executed the foregoing document on behalf of the United States of America for the uses and
purposes therein set forth.
WITNESS my hand and notarial sea] the day and year first hereinabove written.
STATE OFALASKA NOTARY PUBLIC IN AND FOR ALASKA
NOTARY PUSUC My Commission Expires: W jkM 04-Fite,
Ed=L Nutter
NVOmrnb*n WIMOfte
Return to: Harbormaster
City of Seward
PO Box 167
Seward,AK 99664
LEASE AMENDMENT NO I r,u.4
LEASE AGREEMENT
between
CITY OF SEWARD, ALASKA
and
UNITED STATES OF AMERICA
Acting by and through the
SECRETARY OF THE ARMY
City of Seward Resolution No.
US Army Corps of Engineers Lease No.DACA855-1100064
Effective 30 September 2011
City of Seward: / United States of America /
1
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page
TABLE OF CONTENTS
ARTICLEI—LEASED LAND..............................................................................................................................I
1.1 PREMISES...................................................................................................................................................1
1.2 COVENANT OF QUIET ENJOYMENT....................................................................................................7
1.3 RESERVED. ................................................................................................................................................1
1.4 PROPERTYACCEPTED "AS-IS':............................................................................................................1
1.5 PERMITS.....................................................................................................................................................1
1.6 PLATTING...................................................................................................................................................2
ARTICLE2—LEASE TERM................................................................................................................................2
2.1 LEASE TERM..............................................................................................................................................2
2.2 RENEWAL OPTION.................................................................................................:.................................2
2.3 TERMINATION..........................................................................................................................................3
ARTICLE 3—RENTAL RATE.. .3
3.1 RENTAL.......................................................................................................................................................3
3.2 CENTRAL CONTRACTOR REGISTRATION(CCR). ............................................................................3
3.3 ELECTRONIC FUNDS TRANSFER PAYMENT....................................................................................4
3.4 RENTAL ADJUSTMENTS.........................................................................................................................5
3.5 PROCEDURE FOR RENTAL ADJUSTMENT.........................................................................................S
3.6 EFFECT OF LATE APPRAISAL BY CITY..............................................................................................6
3.7 APPRAISAL BY GOVERNMENT..............................................................................................................6
3.8 EFFECTIVE DATE OF ADJUSTED RENTAL RATE............................................................................7
3.9 PROMPT PAYMENT. ...............................................................................................................................7
ARTICLE4—USE OF PREMISES............................................................. ......................................................8
4.1 USE OF PREMISES...................................................................................................................................8
4.2 OBLIGATIONS OF GOVERNMENT........................................................................................................8
4.3 OBLIGATIONS OF CITY...........................................................................................................................9
4.4 DAMAGES..................................................................................................................................................11
4.5 NO PREFERENTIAL RIGHTS TO USE PUBLIC FACILITIES..........................................................11
4.6 ADEQUACY OF PUBLIC FACILITIES................................................................................................11
4.7 RESERVED...............................................................................................................................................11
4.8 TIME FOR PAYMENT OF UTILITIES.................................................................................................11
City of Seward: / United States of America M 46
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City of Seward Resolution No.
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Page ii
4.9 OTHER USES............................................................................................................................................11
4.10 MUTUALITY OF OBLIGATION. ...........................................................................................................11
ARTICLE 5-UTILITIES AND RIGHTS OF ACCESS...................................................................................12
5.1 UTILITIES.................................................................................................................................................12
5.2 WARRANTY...............................................................................................................................................12
5.3 THIRD PARTYIMPROVEMENTS.........................................................................................................12
5.4 EASEMENTS............................................................................................................................................13
ARTICLE 6-CONSTRUCTION BY GOVERNMENT....................................................................................13
6.1 IMPROVEMENTS ON PREMISES.........................................................................................................13
6.2 CITYREVIEW OF CONSTRUCTION....................................................................................................14
ARTICLE 7-RETURN OF LEASED LAND/SITE..........................................................................................14
7.1 RETURN OF PREMISES IN ORIGINAL CONDITION.......................................................................14
2 RETURN OF PREMISES INDIFFERENT CONDITION....................................................................14
ARTICLE8-FORCE MAJEURE......................................................................................................................14
ARTICLE 9-GOVERNMENT'S ACTS OF DEFAULT..................................................................................15
ARTICLE 10-REMEDIES FOR DEFAULT BY LESSEE..............................................................................16
10.1 RIGHTS OF CITY............................................................................................:........................................16
10.2 SURRENDER OFPREMISES.................................................................................................................16
10.3 NO TERMINATION OF OBLIGATION TO PERFORM.......................................................................16
10.4 RIGHTS CUMULATIVE..........................................................................................................................16
10.5 NO WAIVER OF RIGHT...................................................................................... . ..............................16
ARTICLE 11—DEFAULT BY CITY DURING THE TERM..........................................................................16
11.1.DEFAULTBYCITY CITY.................................................................................................................................
11.2 TERMINATIONFOR DEFAULT............................................................................................................17
ARTICLE 12-TITLE TO IMPROVEMENTS INSTALLED BY GOVERNMENT.....................................17
12.1 REAL PROPERTYIMPROVEMENTS...................................................................................................17
12.2 REMOVAL OF PERMANENT REAL PROPERTY IMPROVEMENTS...............:...............................17
12.3 PERSONAL PROPERTY..........................................................................................................................17
City of Seward: / United States of America�/
198D,(o
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page iii
ARTICLE 13-ASSIGNMENT OR SUBLEASE................................................................................................17
13.1 ASSIGNMENT OF LEASE OR SUBLEASING......................................................................................17
13.2 ASSIGNMENT OF LEASE FOR SECURITY.........................................................................................17
13.3.ASSIGNMENT TO AFFILIATE..............................................................................................................18
ARTICLE14-INSURANCE...............................................................................................................................18
ARTICLE15-CONDEMNATION.....................................................................................................................18
15.1 CLAIMS.....................................................................................................................................................18
I5.2 TERMINATION........................................................................................................................................19
ARTICLE16—DISPUTES...................................................................................................................................19
16.1 CONTRACT DISPUTES ACT...................... .......................................................................................19
16.2 CLAIMS.....................................................................................................................................................19
16.3 DATE OF DECISION.. 20
16.4 ALTERNATE DISPUTE RESOLUTION. ARBITRATION..................................................................20
16.5 INTEREST PAYMENT.............................................................................................................................21
16.6 PERFORMANCE OF LEASE..................................................................................................................21
ARTICLE 17-MAINTENANCE AND REPAIRS............................................................................................21
17.1 NORMAL MAINTENANCE.....................................................................................................................21
17.2 SAFETYISSUES.......................................................................................................................................21
17.3 COST OF REPAIRS.................................................................................................................................:22
17.4 FIRE AND CASUALTYDAMAGE..........................................................................................................22
ARTICLE 18-ENVIRONMENTAL CONCERNS...........................................................................................22
18.1 HAZARDOUS MATERIALS....................................................................................................................22
18.2 PERMITS AND REPORTING...................................................................:..............................................24
ARTICLE 19-ESTOPPEL CERTIFICATES/STATEMENT OF LEASE.....................................................24
19.1 REQUESTS FOR STATEMENTS OF LEASE.......................................................................................24
19.2 CONDITIONS FOR STATEMENTS OF LEASE...................................................................................25
ARTICLE 20-CONDITIONS AND COVENANTS..........................................................................................25
ARTICLE 21 -NO WAIVER OF BREACH.......................................................................................................25
City of Seward: / United States of America I�{
199,
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page iv
ARTICLE 22-TIME OF THE ESSENCE.........................................................................................................25
ARTICLE 23-COMPUTATION OF TIME......................................................................................................25
ARTICLE24—SUCCESSORS BOUND.............................................................................................................25
ARTICLE 25—INTEGRATED AGREEMENT................................................................................................26
ARTICLE26-GOVERNING LAW....................................................................................................................26
ARTICLE 27-PARTIAL INVALIDITY............................................................................................................26
ARTICLE 28-RELATIONSHIP OF PARTIES................................................................................................26
ARTICLE 29-EXAMINATION OF RECORDS..............................................................................................26
ARTICLE 30-GRATUITIES TO GOVERNMENT EMPLOYEES...............................................................26
30.1 GOVERNMENT MAY TERMINATE......................................................................................................26
30.2 PURSUIT OF REMEDIES.......................................................................................................................27
30.3 RIGHTS AND REMEDIES NOT EXCL USIVE......................................................................................27
ARTICLE 31 -OFFICIALS NOT TO BENEFIT...............................................................................................27
ARTICLE32-INTERPRETATION....................................................................................................................27
ARTICLE33-CAPTIONS...................................................................................................................................27
ARTICLE34-AMENDMENT.............................................................................................................................27
ARTICLE35-NOTICES.....................................................................................................................................27
ARTICLE 36—ATTACHMENTS TO LEASE..................................................................................................28
City of Seward: / United States of America
200 D%
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 1
LEASE AGREEMENT
THIS Lease, made and entered into this date by and between the CITY OF SEWARD, a municipal
corporation located in the Kenai Peninsula Borough, State of Alaska,whose address is P.O.Box 167,
Seward, Alaska 99664, and whose interest in the property hereinafter described is that of owner(as
certified), for itself, for its heirs, executors, administrators, successors, and assigns, hereinafter called
the CITY, and the UNITED STATES OF AMERICA, acting by and through the Secretary of the
Army, whose address is U.S. Army Engineer District-Alaska,Real Estate Division (CEPOA-RE),
P.O.Box 6898,JBER,Alaska 99506-0898,hereinafter called the GOVERNMENT.
WHEREAS, the GOVERNMENT desires to lease land from the CITY for the construction,
maintenance and operation of a marine dispatch building;and
WHEREAS, the Seward Planning& Zoning commission has approved disposal by lease of uplands
owned by the CITY in the Seward Small Boat Harbor;and
WHEREAS, the City Council of CITY has determined that lease of the Premises to the
GOVERNMENT for the purposes described herein would be in the public interest;
NOW THEREFORE, the parties, for the consideration of the premises and the consideration
hereinafter mentioned, and the mutual benefits to be derived therefrom,hereto covenant and agree as
follows:
ARTICLE 1—L,F.ASED LAND
Ll PREMISES.
CITY hereby Leases to GOVERNMENT the following described premises:
Approximately 2,546 gross square feet, more or less, of land (the "Premises") described as:
Tract A, Marina Subdivision Seward Resort Addition, according to Plat 2010-10 recorded in
the Seward Recording District, Third Judicial District, State of Alaska, more particularly
shown on Exhibits A and B, attached hereto and made a part hereof. Premises will be used
for the construction, maintenance and operation of a marine dispatch building for purposes
related to the use of GOVERNMENT'S vessels moored at the CITY'S Small Boat Harbor.
1.2 COVENANT OF QUIET ENJOYMENT.
Subject to the encumbrances as of the date hereof,any reasonable restrictions imposed on the
Premises as part of recording of a plat by CITY, and the provisions of this Lease, CITY
hereby covenants and warrants that it is unaware of any prior conflicting use of the Premises
that would adversely affect GOVERNMENT'S intended use of the subject parcel.
L3 RESERVED.
1.4 PROPERTYACCEPTED "AS IS".
GOVERNMENT acknowledges that it has inspected the Premises and accepts the same"as-
is" and without reliance on any expressed or implied representations or warranties of CITY
(other than the representations in Section 1.2 hereof), or agents of CITY, as to the actual
physical condition or characteristics thereof and the legal description or depiction of the
Premises in Article 1.1 or Exhibit A hereto.
1.5 PERMITS.
GOVERNMENT, at its sole cost, shall obtain all permits necessary to the construction and
operation of its facilities on the Premises. CITY may from time to time, upon request of
GOVERNMENT, execute such documents, petitions, applications and authorizations as may
City of Seward: / United States of America tk4 V--/
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 2
be necessary, as the underlying fee owner, to file with an agency or public body responsible
therefore, an application for conditional use permits,zoning and re-zoning,tentative and final
tract approval, or precise plan approval that may be required for the lawful construction and.
operation of the facilities of GOVERNMENT permitted on the Premises by the terms of this
Lease. However,nothing in this section shall be construed as requiring CITY to support or to
approve any such application or permit requests. If the agency or public body responsible to
approve or grant such application or permit request is a City of Seward agency, department,
or board, GOVERNMENT shall follow all City of Seward procedures,the same as any other
applicant making similar requests of the City of Seward,according to the Charter,ordinances,
resolutions, or any regulation, rules or procedures of the City of Seward. Nothing in this
sections imposes any duty or responsibility on CITY to assist GOVERNMENT in obtaining
any other permits or approvals, including without limitation those required by the U.S.Army
Corps of Engineers (e.g., wetland fill permits), the Environmental Protection Agency (e.g.,
Clean Air Act permits), the Alaska Department of Public Facilities and Transportation(e.g.,
right-of-way permits),the Alaska Department of Fish and Game, and the Alaska Department
of Environmental Conservation.
L 6 PLATTING.
In the event CITY elects to replat, CITY agrees to include the Premises in such replat in
accordance with reasonable requests by GOVERNMENT. If GOVERNMENT requests a
r-eplat of the Pr-emises prior-to that time,CITY shall assist GOVERNMENT in the pmpafatien
and filing of the replat, the costs of such assistance shall be borne by the GOVERNMENT.
GOVERNMENT agrees to accept reasonable restrictions, easements,or plat notes as may be
required by CITY or other governmental authorities as a condition to filing the plat of the
Premises or the plat of CITY-owned real property adjacent to the Premises.
ARTICLE 2—LEASE TERM
2.1 LEASE TERM.
a. This Lease is entered into in accordance with Federal Management Regulation,
Subchapter C—Real Property, Part 102-73—Real Estate Acquisition, Subpart B—
Acquisition by Lease, Sections 102-73.145, 102-73.150, and 102-73.155 and in
accordance with CITY'S authorization Resolution No. 2011 Upon
effectiveness of the resolution and upon execution of this Lease by CITY and
GOVERNMENT, the Lease Term shall commence on September 30, 2011 (the
"Effective Date"), subject to termination and renewal rights as may be hereinafter set
forth. The Lease Term shall run for approximately 20 years from the Effective Date,
ending at midnight on September 29,2031.
b. GOVERNMENT'S obligation and legal liability for performance of this Lease beyond
September 30, 2012, is contingent upon the availability of annually appropriated funds.
Nothing in this Lease shall constitute, or be deemed to constitute, an obligation of future
appropriations by the United States or considered as implying that the Congress will
appropriate additional funds.
2.2 RENEWAL OPTION.
The Government shall have the right to renew this lease for an additional five(5)year period,
under the same terms and conditions provided herein by providing written notice to the
Lessor of the Government's renewal at least 90 days prior to the expiration of the current
term,provided that this lease shall in no event extend beyond September 29,2036.
City of Seward: / United States of America
20,'2�
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 3
2.3 TERMINATION.
GOVERNMENT may terminate this Lease in whole or in part at any time after September
30, 2012 by giving at least ninety (90) days' notice in writing to CITY; and no rental shall
accrue after the effective date of termination.
ARTICLE 3—RENTAL RATE
3.1 RENTAL.
GOVERNMENT shall pay CITY annual rent of$2,160 (Two thousand one hundred sixty
dollars and zero cents) at the rate of$540 (Five hundred forty dollars and zero cents) per
quarter in arrears commencing on the Effective Date. Rent for a lesser period shall be
prorated. Payment shall be made without demand by electronic funds transfer(EFT—direct
deposit) payable to: City of Seward, Kenai Peninsula Borough, State of Alaska. Payments
shall be made by: U.S.Army Corps of Engineers Finance Center(CEFC-AO),6830 Integrity
Drive, Millington, TN 38054-5045. Billing inquires or invoices should be directed to the
Finance and Accounting Officer, U.S. Army Engineer District, Alaska, P.O. Box 6898,
JBER,Alaska 99506-0898.
3.2 CENTRAL CONTRACTOR REGISTRATION(CCR).
a. In order to do business with the United States of America, CITY acknowledges the
requirement that CITY must be registaed with Dun and Bradstreet and in the
CCR database prior to award, during performance, and through final payment of any
contract entered into with GOVERNMENT. To remain active, insuring prompt payment
of rent, CITY is required to update, or renew, its registration annually. Rental payments
cannot be processed to CITY without an active CCR. No change of ownership of the
Leased premises will be recognized by GOVERNMENT until the new owner registers in
the CCR system.
b. CITY shall enter in the appropriate block, on the GSA Form 3518, entitled
Representations and Certifications, the legal entity's name and address, followed by the
DUNS or DUNS+4 number that identifies CITY's name and address exactly as stated in
the Lease. The DUNS number will be used by GOVERNMENT to verify that CITY is
registered in the CCR database.
c. If CITY does not have a DUNS number,it shall contact D&B directly to obtain one.
(1) CITY may obtain a DUNS number by calling D&B at 1-866-705-5711 or via the
Internet at http://www.dnb.com.
(2) CITY should be prepared to provide the following information:
(i) Company legal business.
(ii) Tradestyle, doing business as, or other name by which your entity is
commonly recognized.
(iii) Company Physical Street Address, City, State,and ZIP Code.
(iv) Company Mailing Address, City, State and ZIP Code (if separate from
physical).
(v) Company Telephone Number.
(vi) Date the company was started.
City of Seward: / United States of AmericaTUA&
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City of Seward Resolution No.
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(vii) Number of employees at your location.
(viii) Chief executive officer/key manager.
(ix) Line of business(industry).
(x) Company Headquarters name and address (reporting relationship within
your entity).
d. If CITY does not become registered in the CCR database in the time prescribed by the
Government, rental payments to CITY will be delayed until such registration is
completed.
e. Processing time,which normally takes 48 hours,should be taken into consideration when
registering. CITY is responsible for the accuracy and completeness of the data within the
CCR database, and for any liability resulting from GOVERNMENT'S reliance on
inaccurate or incomplete data. To remain registered in the CCR database after the initial
registration, CITY is required to review and update on an annual basis from the date of
initial registration or subsequent updates its information in the CCR database to ensure it
is current, accurate and complete. Updating information in the CCR does not alter the
terms and conditions of this Lease and is not a substitute for a properly executed
contractual document.
f Change of legal-business Hemp
(1) If CITY has legally changed its business name, "doing business as" name, or
division name(whichever is shown on the Lease),or has transferred the assets used
in performing the contract, CITY shall comply with the requirements of Subpart
42.12 of the Federal Acquisition Regulations (FAR) and provide the responsible
Government Contracting Officer a fully revised and initialed/signed GSA Form
3518, entitled Representations and Certifications,along with written notification of
its intention to (A) change the name in the CCR database; and (B) provide the
Government with sufficient documentation to verify and confirm the legally
changed name or change in ownership.
(2) If CITY fails to comply with the requirements of paragraph g.(1) of this clause, or
fails to perform the agreement at paragraph g.(1)(B) of this clause, and, in the
absence of.a properly executed novation or change-of-name agreement, the CCR
information that shows CITY to be other than CITY indicated in the Lease will be
considered to be incorrect information within the meaning of the "Suspension of
Payment"paragraph of the electronic funds transfer(EFT)clause of this contract.
(3) The Lessor shall not change the name or address for EFT payments or manual
payments, as appropriate, in the CCR record to reflect an assignee for the purpose
of assignment of claims. Assignees shall be separately registered in the CCR
database. Information provided to the Lessor's CCR record that indicates
payments, including those made by EFT, to an ultimate recipient other than that
Lessor will be considered to be incorrect information.
g. CITY may obtain information on registration and annual confirmation requirements via
the internet at http://www.ecr.gov or by calling 1-888-227-2423,or 269-961-5757.
3.3 ELECTRONIC FUNDS TRANSFER PAYMENT.
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a. GOVERNMENT will make payments under this Lease by electronic funds transfer
(EFT),unless otherwise waived(for hardship or tracking reasons of CITY). CITY must,
no later than 30 days before the first payment:
(1) Designate a financial institution for receipt of EFT payments.
(2) Submit this designation to GOVERNMENT or other GOVERNMENT official, as
directed.
b. CITY must provide the following information:
(1) The American Bankers Association 9-digit identifying number for Automated
Clearing House (ACH) transfers of the financing institution receiving payment if
the institution has access to the Federal Reserve Communications System.
(2) Number of account to which funds is to be deposited.
(3) Type of depositor account("C"for checking, "S"for savings).
(4) If CITY is a new enrollee to the EFT system, CITY must complete and submit
UFC-DISB-4 (Direct Deposit Authorization Form), before payment can be
processed.
c. If CITY, during the performance of this contract, elects to designate a different financial
institution for the receipt of any payment, the appropriate GQVMNMF-Na official must
receive notice of such change and the required information specified above no later than
30 days before the date such change is to become effective.
d. The documents fiunishing the information required in this clause must be dated and
contain the:
(1) Signature, title, and telephone number of CITY or CITY's authorized
representative.
(2) CITY's name.
(3) Lease number.
e. CITY's failure to properly designate a financial institution or to provide appropriate
payee bank account information may delay payments of amounts otherwise properly due.
3.4 RENTAL ADJUSTMENTS.
The annual rental payment shall be adjusted on July 1,2015,and on the same date every five
years thereafter (each a "Rental Adjustment Date"). The adjusted annual rental payment to
be paid under the terms of this Lease shall be the appraised fair market rental value of the
Premises at the highest and best use of the Premises. The highest and best use of the
Premises shall be determined without regard to GOVERNMENT'S intended or actual use of
the Premises unless that use is coincidentally the highest and best use of the Premises. CITY
shall complete such appraisal and deliver a copy of the appraisal report to GOVERNMENT
not less than ninety(90)days before each Rental Adjustment Date.
3.5 PROCEDURE FOR RENTAL ADJUSTMENT.
a. To adjust the rent as of any successive Rental Adjustment Date, CITY shall, at its own
expense, retain an independent State of Alaska certified MAI appraiser (Member,
Appraisal Institute),who shall determine the"Fair Market Rental Value" of the Premises
in accordance with this Article 3, exclusive of improvements placed thereon by
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GOVERNMENT but inclusive of all improvements made by CITY (including those
made before or subsequent to this Lease). The appraiser's report shall be delivered to
GOVERNMENT not less than ninety(90) days before the Rental Adjustment Date. The
appraiser's determination of Fair Market Rental Value of the Premises shall constitute a
final binding determination of the Fair Market Rental Value and the adjusted annual
rental rate until the next Rental Adjustment Date, unless GOVERNMENT objects to
CITY's appraiser's determination of the Fair Market Rental Value. In that case,
GOVERNMENT shall give written notice to CITY of its objection within thirty(30)days
of receipt of the appraiser's report, and GOVERNMENT shall then engage an
independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at
GOVERNMENT'S expense to make an appraisal of the Fair Market Rental Value in
accordance with this Article 3.
b. If GOVERNMENT'S appraisal determines a Fair Market Rental Value that varies from
that determined by CITY's appraisal by no more than twenty percent (20%), then the
adjusted rental rate shall be the average of the rental rates determined by the two
appraisals. If GOVERNMENT'S appraisal determines a Fair Market Rental Value that
varies from CITY's appraisal by more than twenty percent(20%), then,unless CITY and
GOVERNMENT agree on a rate themselves, the adjusted annual rental rate of the
Premises shall be determined in accordance with the Contract Disputes Act of 1978, or if
both parties agree,by arbitration as provided for in Article 16 of this Lease.
3.6 EFFECT OF LATE APPRAISAL BY CITY.
If for any reason, CITY does not complete the appraisal or deliver a copy of the appraisal
report to GOVERNMENT ninety (90) days before the Rental Adjustment Date, CITY may
proceed to complete the appraisal or deliver a copy of the appraisal report to
GOVERNMENT at any time thereafter. However,any such adjusted annual rental rate shall
not be effective until the quarterly payment due date immediately following the date CITY
delivers the appraisal report to GOVERNMENT.
3.7 APPRAISAL BY GOVERNMENT.
If for any particular Rental Adjustment Date, CITY fails to obtain an appraisal of the Fair
Market Rental Value or fails to deliver the appraisal report to the GOVERNMENT by the
Rental Adjustment Date, GOVERNMENT may engage an independent State of Alaska
certified MAI appraiser (Member, Appraisal Institute) at GOVERNMENT'S expense to
make an appraisal under the terms of this Article 3 and submit a copy to CITY before the
next quarterly rental payment due date. However, GOVERNMENT must notify CITY in
writing within thirty(30) days following the Rental Adjustment Date of GOVERNMENT'S
election to obtain an appraisal. If CITY objects to GOVERNMENT'S appraiser's
determination of the Fair Market Rental Value, CITY shall give written notice to
GOVERNMENT of its objection within thirty (30) days of receipt of the appraiser's report,
and CITY shall then engage an independent State of Alaska certified MAI appraiser
(Member, Appraisal Institute) at CITY's expense to make an appraisal of the Fair Market
Rental Value as of the Rental Adjustment Date and in accordance with this Article 3. if the
CITY's appraisal determines a Fair Market Rental Value that varies from that determined by
GOVERNMENT'S appraisal by no more than twenty percent (20%), then the adjusted rental
rate shall be the average of the rental rates determined by the two appraisals. If the CITY's
appraisal determines a Fair Market Rental Value that varies from GOVERNMENT'S
appraisal by more than twenty percent(20%), then,unless CITY and GOVERNMENT agree
on a rate themselves, the adjusted annual rental rate of the Premises shall be determined in
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accordance with the Contract Disputes Act of 1978, or if both parties agree,by arbitration as
provided for in Article 16 of this Lease.
3.8 EFFECTIVE DATE OF ADJUSTED RENTAL RATE.
The adjusted annual rental rate established by this Article 3 shall apply as of the Rental
Adjustment Date if CITY provided a copy of the appraisal report to GOVERNMENT no later
than ninety(90)days before the Rental Adjustment Date. If the adjusted annual rental rate is
based on CITY's late appraisal or late delivery of the appraisal report to GOVERNMENT,the
adjusted rental rate shall be effective beginning with the next rental payment due date
immediately following the date CITY delivers the appraisal report to GOVERNMENT.
Notwithstanding the above, the exercise by either CITY or GOVERNMENT of the objection
procedure relating to rental adjustment described in this Article 3 shall not postpone
GOVERNMENT's obligation to pay rent at the rate established by CITY. GOVERNMENT
shall pay the amount of rent as established or adjusted by CITY until the question of
objection to the rental rate is finally resolved. At such time the objection to the rental rate is
resolved, an appropriate credit or adjustment shall be made retroactive to the date the new
rental rate was established by CITY or in cases where CITY failed to obtain an appraisal or
deliver the appraisal report to GOVERNMENT, to the Rental Adjustment Date. In either
case, the adjusted annual rental rate and effective date shall be memorialized by a
supplemental agreement to this Lease.
3.9 PROMPT PAYMENT.
a. The GOVERNMENT will make payments under the terms and conditions specified in
this Article 3, and in accordance with the Prompt Payment Act (31 U.S.C. §3901).
Payment.shall be considered as being made on the day a check is dated or an electronic
funds transfer is made. All days referred to in this clause are calendar days, unless
otherwise specified.
b. Payment due date: Rent shall be paid quarterly in arrears and will be due on the first
workday of each quarter, and only as provided for by the Lease.
c. In the event there should be payments other than rent, the due date for making such
payments shall be the later of the following two events:
(1) The 30th day after the designated billing office has received a proper
invoice from CITY.
(2) The 30th day'after GOVERNMENT acceptance of the work or service.
However,if the designated billing office fails to annotate the invoice with
the actual date of receipt, the invoice payment due date shall be deemed
to be the 30th day after CITY's invoice is dated, provided a proper
invoice is received and there is no disagreement over quantity,quality, or
CITY compliance with contract requirements.
c. Invoice and inspection requirements for payments other than rent.
(1) CITY shall prepare and submit an invoice to the designated billing office after
completion of the work or service. A proper invoice shall include the following
items:
(i) Name and address of CITY.
(ii) Invoice date.
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(iii) Lease number.
(iv) GOVERNMENT's order number or other authorization.
(v) Description,price,and quantity of work or services delivered.
(vi) Name and address of CITY official to whom payment is to be sent(must
be the same as that in the remittance address in the Lease or the order).
(vii) Name (where practicable), title, phone number, and mailing address of
person to be notified in the event of a defective invoice.
(2) GOVERNMENT will inspect and determine the acceptability of the work
performed or services delivered within 7 days after the receipt of a proper invoice
or notification of completion of the work or services unless a different period is
specified at the time the order is placed. If actual acceptance occurs later, for the
purpose of determining the payment due date and calculation of interest,
acceptance will be deemed to occur on the last day of the 7-day inspection period.
If the work or service is rejected for failure to conform to the technical
requirements of the contract,the 7 days will be counted beginning with receipt of a
new invoice or notification. In either case, CITY is not entitled to any payment or
interest
lunless actual acceptance by GOVERNMENT occurs.
do Interesa Pe ality.
(lAn interest penalty shall be paid automatically by GOVERNMENT, without request
from CITY, if payment is not made by the due date.
(2) Claims involving disputes,and any interest that may be payable,will be resolved in
accordance with the Contract Disputes Act of 1978(41 U.S.C. §7101 et seq)..
ARTICLE 4—USE OF PREMISES
4.1 USE OF PREMISES.
CITY has limited land available for Lease. Use of the Premises by GOVERNMENT for a
marine dispatch building, and uses necessary and incidental thereto, has been determined by
the City Council of the City of Seward to be in the public interest.
4.2 OBLIGATIONS OF GOVERNMENT.
GOVERNMENT may use the Premises only in accordance with applicable CITY zoning
code provisions and provided the following conditions are met:
a. The Premises shall be completely cleaned and restored to its original condition upon
termination of this Lease that is, the condition existing prior to any operations by
GOVERNMENT under this or any prior agreement, or in better condition, subject to the
exceptions to restoration stated in Article 7 of this Lease.
b. GOVERNMENT agrees to prohibit the use, keeping, storage, or disposal of Hazardous
Materials on the Premises except as permitted in Article 18 of this Lease.
c. GOVERNMENT shall not use the Premises in any manner or construct any facilities
thereon which would inhibit the use of adjacent or other lands.
d. GOVERNMENT shall use the Premises only for the uses described in Section 4.1. A
marine dispatch building shall be constructed and operated by GOVERNMENT on the
Premises by September 30,2013.
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e. A site plan, attached as Exhibit B, has been submitted and approved by CITY. Any
changes to this site require CITY approval,through the City Manager,prior to additional
construction. GOVERNMENT's failure to obtain CITY approval of any changes to the
site development plan or GOVERNMENT's failure to install the improvements according
to the site development plan shall be a GOVERNMENT Act of Default under this Lease.
GOVERNMENT shall pay for installation of all utilities in accordance with Article 5 of
this Lease.
f. GOVERNMENT shall not allow any camping or overnight lodging on the Premises.
g. GOVERNMENT shall,at all times,maintain its use and operations within the boundaries
of the Premises. There is no parking allowed near the Premises other than paid permit
parking in designated areas.
4.3 OBLIGATIONS OF CITY.
a. Subordination,Nondisturbance and Attornment.
(1) CITY warrants that it holds such title to or other interest'in the premises and other
property as is necessary to GOVERNMENT's access to the premises and full use
and enjoyment thereof in accordance with the provisions of this Lease.
GOVERNMENT agrees,in consideration of the warranties and conditions set forth
in this clause, that this Lease is subject and subordinate to any and all recorded
mortgages,deeds of trust and other liens now or hereafter existing or imposed upon
the premises, and to any renewal, modification or extension thereof. It is the
intention of the parties that this provision shall be self-operative and that no further
instrument shall be required to effect the present or subsequent subordination of
this Lease. GOVERNMENT agrees, however, within twenty (20) business days
next following GOVERNMENT's receipt of a written demand, to execute such
instruments as CITY may reasonably request to evidence further the subordination
of this Lease to any existing or future mortgage, deed of trust or other security
interest pertaining to the premises, and to any water, sewer or access easement
necessary or desirable to serve the premises or adjoining property owned in whole
or in part by CITY if such easement does not interfere with the full enjoyment of
any right granted GOVERNMENT under this Lease.
(2) No such subordination, to either existing or future mortgages, deeds of trust or
other lien or security instrument shall operate to affect adversely any right of
GOVERNMENT under this Lease so long as GOVERNMENT is not in default
under this Lease. CITY will include in any future mortgage, deed of trust or other
security instrument to which this Lease becomes subordinate, or in a separate
nondisturbance agreement,a provision to the foregoing effect. CITY warrants that
the holders of all notes or other obligations secured by existing mortgages,deeds of
trust or other security instruments have consented to the provisions of this clause,
and agrees to provide true copies of all such consents to GOVERNMENT promptly
upon demand.
(3) In the event of any sale of the premises or any portion thereof by foreclosure of the
lien of any such mortgage,deed of trust or other security instrument, or the giving
of a deed in lieu of foreclosure, GOVERNMENT will be deemed to have attorned
to any purchaser, purchasers, transferee or transferees of the premises or any
portion thereof and its or their successors and assigns, and any such purchasers and
transferees will be deemed to have assumed all obligations of CITY under this
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Lease, so as to establish direct privity of estate and contract between
GOVERNMENT and such purchasers or transferees, with the same force, effect
and relative priority in time and right as if the Lease had initially been entered into
between such purchasers or transferees and GOVERNMENT; provided, fiuher,
that GOVERNMENT and such purchasers or transferees shall, with reasonable
promptness following any such sale or deed delivery in lieu of foreclosure,execute
all such revisions to this Lease, or other writings,as shall be necessary to document
the foregoing relationship.
(4) None of the foregoing provisions may be deemed or construed to imply a waiver of
GOVERNMENT's rights.as a sovereign.
b. Change of Ownership:
(1) If, during the term of this Lease, including any renewals or extensions, title to the
Premises is transferred to another party either by sale, foreclosure, condemnation,
assignment, or other transaction, CITY (transferor) shall promptly notify
GOVERNMENT of said transfer. The following information shall accompany
such notification:
(i) A copy of the deed or other appropriate instrument transferring title or
sufficient interest to Lease to the Premises from the transferor to the new owner.
n e new owners taxidentification or social security number.
(iii) The new owner's DUNS number and verification of CCR registration.
(2) The foregoing information must be received not later than twenty (20) days after
the effective date of transfer of title. In any instance, failure to submit the
documentation required for a transfer of title will result in a suspension of rental
payments until such time as all documentation is received by GOVERNMENT.
(3) When the title to Premises leased to GOVERNMENT is transferred, a
supplemental agreement shall be entered into by the old and new owners and
GOVERNMENT to reflect such change of ownership.
c. Assignment of Claims.
(1) CTTY, under the Assignment of Claims Act, as amended, 31 USC §3727, may
assign its rights to be paid amounts due or to become due as a result of the
performance of this Lease to a bank, trust company, or other financing institution,
including any Federal lending agency.The assignee under such an assignment may
thereafter further assign or reassign its right under the original assignment to any
type of financing institution described in the preceding sentence.
(2) Any assignment or reassignment authorized under the Act and this clause shall
cover all unpaid amounts payable under this Lease,and Assignment of Claims,and
shall not be made to more than one party, except that an assignment or
reassignment may be made to one party as agent or trustee for two or more parties
participating in the financing of this Lease.
(3) Subject to the applicable law and the ordinances of the City of Seward,CITY shall
not furnish or disclose to any assignee under this Lease any classified document
(including this Lease) or information related to work under this Lease, that has
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been clearly designated as classified in writing, until GOVERNMENT authorizes
such action in writing.
4.4 DAMAGES.
a. Any liability of GOVERNMENT for property damage,personal injury, or death shall be
governed by the Federal Tort Claims Act (FICA), 28 U.S.C. §2671 et seq.
GOVERNMENT shall not be liable for any loss, destruction or damages to the premises
beyond the control and without the fault or negligence of GOVERNMENT,including but
not restricted to, acts of nature,lightning, earthquakes,floods, or severe weather and acts
of war or terrorism.
b. Any requirement for the payment or obligation of funds by GOVERNMENT under this
Lease shall be subject to the availability of appropriated funds, and no provision herein
shall be interpreted to require obligation or payment of funds in violation of the Anti-
Deficiency Act, 31 U.S.C. §1341. GOVERNMENT's liability under this clause may not
exceed appropriations available for such payment and nothing contained in this Lease
may be considered as implying that Congress will at a later date appropriate funds
sufficient to meet deficiencies. The provisions of this clause are without prejudice to any
rights CITY may have to make a claim under applicable laws for any other damages than
provided herein.
y c- am naCF9.n-a T—E4 E RIGHTS MUSE P UBLIG RA GZ&RM&.
Except as provided in Section 4.1, this Lease does not grant to GOVERNMENT any
exclusive rights to use any public port facilities. GOVERNMENT will be subject to any
tariffs,procedures,rules and regulations of CITY concerning the use of such facilities as they
may now exist or from time to time be amended, and GOVERNMENT shall not be entitled to
any exclusive use.
4.6 ADEQUACY OF PUBLIC FACILITIES.
CITY makes no representations or warranties as to the fitness of any particular part or the
whole of CITY's public facilities for the uses intended by GOVERNMENT, and
GOVERNMENT has inspected those facilities and has satisfied itself that the facilities are
sufficient for the intended uses by GOVERNMENT. CITY makes no representations or
warranties of any nature with respect to the commercial practicability or accuracy of any
information provided by CITY.
4.7 RESERVED.
4.8 TIME FOR PAYMENT OF UTILITIES.
GOVERNMENT will pay for utilities related to operations on the Premises including,but not
limited to,water, sewer, electric, and waste disposal services,and GOVERNMENT's interest
in this Lease and improvements thereon, if any, before such obligations become delinquent;
provided that GOVERNMENT may, in good faith and before such delinquency, contest any
such charge or assessment.
4.9 OTHER USES.
This Lease shall not preclude the CITY from actively seeking other and additional tenants for
space including those who would be in competition with GOVERNMENT or who might be
interested in leasing the Premises should this Lease be terminated for any reason.
4.10 MUTUALITY OF OBLIGATION.
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The obligations and covenants of CITY, and GOVERNMENT'S obligation to pay rent and
other GOVERNMENT obligations and covenants, arising under or related to this Lease, are
interdependent. Either party may,upon issuance of and delivery to the other party of a final
decision regarding a claim against the other party, set off such claim, in whole or in part,as
against any payment or payments then or thereafter due under this Lease.No set off pursuant
to this clause shall constitute a breach of this Lease.
ARTICLE 5-UTILITIES AND RIGHTS OF ACCESS
5.1 UTILITIES.
GOVERNMENT,at GOVERNMENT's sole cost and expense,shall provide for the extension
of public utilities to the Premises sufficient for GOVERNMENT's intended operations. In so
doing, GOVERNMENT shall comply with all CITY regulations and requirements, and the
tariffs of the affected utilities, with respect to the construction of those utilities. CITY agrees
to cooperate and assist GOVERNMENT, through consultation and review, in
GOVERNMENT's planning and engineering of those improvements. All utilities will be
located.and sized in accordance to the City of Seward's Master Plan for the area Leased. All
such construction shall be in compliance with all applicable building, mechanical and fire
codes. Utilities constructed by GOVERNMENT within the public right-of-ways or within
public utility easements will normally be accepted and maintained by CITY or other utility
compatir, and may be used to serve other eustomers of GOVERNMENT's without payment
of fees or reimbursement of construction cost to GOVERNMENT. However, this does not
preclude several lessees from agreeing to share the cost of constructing a utility to serve their
facilities. CITY or other utility company may determine that it would be to their benefit to
oversize the utility or install-special fittings or equipment in order to serve other existing or
future users. The additional direct costs of such over-sizing shall be borne by CITY or other
party. Such costs shall be limited to the supplier's cost of the additional fittings, equipment,
direct labor, and equipment costs to complete the installation.The costs of over-sizing pipe or
electrical conduit shall be limited to the difference between the supplier's price to provide the
size required to serve its facility and the price of the over-sized material required by CITY or
utility company. GOVERNMENT shall not be entitled to any refund, rebate, or payments
from CITY for any rent, investment, or costs incurred by GOVERNMENT with respect to
any required permits for construction or operation of GOVERNMENT's facilities on the
Premises,it being the intent of the parties that the risk of obtaining required permits be solely
a risk undertaken by GOVERNMENT.
5.2 WARRANTY.
CITY certifies any utilities up to the property line of the Premises to be in good serviceable
and operating condition.
5.3 THIRD-PARTY IMPROVEMENTS.
a. At the request of GOVERNMENT, CITY shall, from time to time, execute and deliver,
or join in execution and delivery of: such documents as are appropriate, necessary, or
required to impose upon the Premises in accordance with the terms of this Lease
covenants, conditions and restrictions providing for the granting of uses of the Premises,
or any part thereof: the establishment of party walls, the establishment of mutual and
reciprocal parking rights or rights of ingress or egress,or other like matters(herein called
"third-party improvements"), all of which are for the purpose of the orderly development
of the Premises as a commercial unit subject,however,to the conditions that follow:
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b. All such matters shall be limited to the Lease Term and shall terminate upon termination
of this Lease for whatever reason.
C. Any such matters of a permanent nature extending beyond the Lease Term shall not be
granted without the prior written approval of CITY. In any of the foregoing instances
referred to in this Section, CITY shall be without expense therefore, and the cost and
expense thereof shall be borne solely by GOVERNMENT.
d. At the expiration of the Lease Term (including any extended period) thud-party
improvements on the Premises other than portable equipment shall become the property
of CITY without the payment of any compensation to GOVERNMENT.
5.4 EASEMENTS.
In order to provide for the orderly development of the Premises and adjacent lands, it may be
necessary, desirable or required that street, railroad, water, sewer, drainage, gas, power line
and other easements and dedications and similar rights be granted or dedicated over or within
portions of the Premises. As additional consideration for this Lease, CITY and
GOVERNMENT each shall, at the request of the other,join with each other in executing and
delivering such documents from time to time and throughout the Lease Term as may be
appropriate, necessary, or required by the several governmental agencies (including the City
of Seward), public utilities and other users or tenants of CITY land for the purpose of
dedications and similar rights do not unreasonably interfere with GOVERNMENT's
operations. The costs of locating or relocating any public easements or restrictions of record
including any relocation of public road, railroad, utility, or other easements shall be at the
sole cost and expense of the party requesting the relocation. CITY shall not refuse reasonable
requests for such relocations provided those relocations do not interfere with or inhibit the
overall development of CITY property or other public property. Any easements or rights of
access granted to GOVERNMENT by CITY need not be exclusive to GOVERNMENT.
ARTICLE 6-CONSTRUCTION BY GOVERNMENT
6.1 IMPROVEMENTS ONPREMISES.
GOVERNMENT shall have the right to erect, maintain, alter, remodel, reconstruct, rebuild,
build and/or replace buildings and other improvements on the Premises, subject to the
following conditions:
a. The cost of any construction,reconstruction,demolition,or of any changes,alterations or
improvements,shall be borne and paid for by GOVERNMENT.
b. The Premises shall at all times be kept free of mechanic's and material men's liens.
c. GOVERNMENT shall provide CITY with a copy of all building plans and specifications
and a site development plan or plans (based on a recent survey) for the Premises prior to
commencement of construction.
d. GOVERNMENT is solely responsible for resurveying and locating improvements on the
Premises in such manner so as not to violate building setback requirements or encroach
into rights-of-ways or easements.On completion of any improvements, GOVERNMENT
shall provide CITY a copy of an as-built survey depicting the improvements as
completed.on the Premises.
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e. GOVERNMENT acknowledges that the Premises may be in a coastal high hazard area,
and that construction in this area may be limited or restricted.
f. CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility for any
improvements constructed or effected by GOVERNMENT on the Premises.
g. GOVERNMENT shall comply with all federal, state and local statutes and regulations
with respect to such construction, including but not limited to all applicable building,
mechanical,and fire codes.No permanent construction is allowed in any easement.
6.2 CITY REVIEW OF CONSTRUCTION.
CITY shall have the right to review initial plans, including those supplied to CITY under
Section 6.1 hereof;and any future changes or additions to GOVERNMENT's facilities on the
Premises,by reviewing the design thereof prior to the commencement of construction. CITY
shall have the right to comment upon that design and to require GOVERNMENT to make
reasonable changes so as to avoid interference with public operations, but the exercise of
these rights shall not imply any obligation to do so or any obligation to do so in a particular
way. GOVERNMENT shall construct the facility in accordance with final design
specifications approved by CITY. CITY's representatives may monitor the work and shall
have access to the site at all reasonable times. GOVERNMENT shall be solely responsible
for completing all improvements according to GOVERNMENT's plans and specifications
and shall bear-all fisk.,mspensib4lity, and liability for pr-eperly surveying the P-ra-MR-so-s'h-c-460M
construction and to place all improvements on the Premises without encroaching upon any
land, easements, rights-of-way, or setback requirements. GOVERNMENT shall obtain the
usual and customary performance guarantees from its contractors, and CITY shall be named
as an additional insured.
ARTICLE 7-RETURN OF LEASED LAND/SITE
7.1 RETURN OF PREMISES IN ORIGINAL CONDITION.
Subject to the provisions of Article 12.1 herein, upon termination of this Lease for any
reason, GOVERNMENT shall return the Premises to CITY in the same condition as at the
commencement of this Lease,subject to normal,non-abusive use. The Premises shall be free
of all Hazardous Materials and contamination arising out of or resulting from or occurring
during GOVERNMENT's operations or use of the Premises during this Lease. Prior to the
expiration or termination of this Lease, or a reasonable time thereafter, GOVERNMENT shall
restore the Premises to the same condition as that existing at the time of entering into the
Lease. However, in accordance with Article 12 of this lease, GOVERNMENT shall retain
the right to dispose of all permanent improvements placed on the land by sale or
abandonment.
7.2 RETURN OF PREMISES INDIFFERENT CONDITION.
Notwithstanding the provisions of Section 7.1 and 12.1 herein,upon termination of this Lease
for any reason GOVERNMENT may return the Premises in a re-contoured or graded clean,
safe, and stable condition different from its original condition provided CITY grants written
approval of GOVERNMENT's plans for development of the Premises'contours,including its
plans for material extraction and final grade.
ARTICLE 8-FORCE MAJEURE
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In the event either GOVERNMENT or CITY is delayed, without fault or negligence of the
party, from performance of any of its obligations under this Lease due to acts of nature, acts
of the enemies of the United States of America, sabotage, blockade, insurrection, riot,
epidemic, fire, flood, explosion, earthquake/tsunami, civil disturbance, or war, the time
period wherein such performance is to occur shall be extended by that amount of time
necessary to compensate for the delay.
ARTICLE 9-GOVERNMENT'S ACTS OF DEFAULT
Each of the following shall be a "GOVERNMENT Act of Default" under this Lease and the
terms "acts of default" and "default" shall mean, whenever they are used in this Lease, any
one or more of the following events:
a. Failure by GOVERNMENT to pay promptly when due the rent required to be paid under
this Lease,subject to the Prompt Payment Act as referenced in Article 3.9.
b. Failure by GOVERNMENT to observe, fulfill or perform any covenants, conditions or
agreements on its part to be observed or performed under this Lease for a period of thirty
(30) days after written notice specifying such failure, requesting that it be remedied, and
stating that it is a notice of default, has been given to GOVERNMENT by CITY;
provided, however, that if said default is such that it cannot be corrected within the
applicable period, it shall not constitute an act of default if corrective action is instituted
by GOVERNMENT within the applicable period and diligently pursued until the default
is corrected.
c. Reserved.
d. GOVERNMENT's failure to comply with any laws or regulations of the United States,or
of the State of Alaska, or any conditions of any permits issued by agencies of the City of
Seward, the Kenai Peninsula Borough, the State of Alaska or of the United States
Government applicable to GOVERNMENT' use of the Premises, pursuant to the
regulations of such agencies, for a period of sixty (60) days after written notice
specifying such non-compliance has been given by the agency charged with the
enforcement of such laws, regulations or permits to GOVERNMENT; provided,
however, if such non-compliance be such that it cannot be corrected within the applicable
period, it shall not constitute an act of default if corrective action is instituted by
GOVERNMENT within the applicable period and diligently pursued until the
GOVERNMENT is in compliance. Furthermore, if GOVERNMENT shall contest such
alleged non-compliance through appropriate judicial or administrative channels, the time
period specified herein shall not commence until such proceedings are finally determined
provided such proceedings are diligently pursued; provided, however, that any such
extension of time shall not be effective if the effect of the interim administrative or
judicial action is to cause a stoppage, interruption or threat to the activities of any person
or entity other than those of GOVERNMENT.
e. Failure of GOVERNMENT to construct and operate a marine dispatch building by
September 30,2013.
f. Failure of GOVERNMENT to maintain its operations within the Premises or to keep the
public rights of way clear.
g. Failure to promptly pay when due any user,wharfage,or other charges by City of Seward
and associated with the Seward Small Boat Harbor.
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h. Reserved.
i. Use of the Premises,or any portion of the Premises,for camping or overnight lodging.
ARTICLE 10-REMEDIES FOR DEFAULT BY LESSEE
10.1 RIGHTS OF CITY
Whenever an act of default by GOVERNMENT shall have occurred, and any applicable
period for giving notice and any opportunity to cure shall have expired, CITY shall have the
following rights, to the extent that they are consistent with the Contract Disputes Act (41
U.S.C. §7101 et seq.)and Article 16 of this Lease:
a. CITY may declare this Lease terminated;
b. Recover all damages incurred by CITY by reason of GOVERNMENT's default or
breach to the extent allowable under applicable law, including,but not limited to,the
cost of recovering possession of the Premises,expenses of reletting including costs of
necessary renovation and alteration of the Premises, and any real estate commissions
actually paid.
C. Remove or require the removal of any improvements constructed without CITY
approval or constructed contrary to site development plans approved by CITY and
------- r-ecover-all-costs-and_expense_incurr_ed_b_y-CIT-Y-to-r-emoue_violating-impr-ouements._-.__._.—__..___
10.2 SURRENDER OF PREMISES.
If GOVERNMENT does not immediately surrender possession of the, Premises after
termination by CITY or upon demand by CITY,CITY may forthwith enter into and upon and
repossess the Premises and expel GOVERNMENT without being deemed guilty in any
manner of trespass and without prejudice to any remedies which might otherwise be used for
arrears of rent or breach of covenant.
10.3 NO TERMINATION OF OBLIGATION TO PERFORM.
No expiration or termination of this Lease shall expire or terminate any liability or obligation
to perform of GOVERNMENT's which arose prior to the termination or expiration except
insofar as otherwise agreed to in this Lease.
10.4 RIGHTS CUMULATIVE.
Each right and remedy of CITY provided for in this Lease shall be cumulative and shall be in
addition to every other right or remedy provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise,and the exercise or beginning of the exercise by
CITY of any one or more of the rights and remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by CITY of any or all other rights or remedies provided for in
this Lease or now or thereafter existing at law,or in equity or by statute or otherwise.
10.5 NO WAIVER OF RIGHT.
No delay or omission to exercise any right or power accruing following an act of default shall impair
any such right or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed expedient.
ARTICLE 11-DEFAULT BY CITY DURING THE TERM
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11.1. DEFAULT BY CITY.
Each of the following shall constitute a default by CITY under this Lease:
a. Failure to perform any requirement of this Lease as and when required provided any such
failure shall remain uncured for a period of thirty(30)days next following CITY's receipt
of notice thereof from GOVERNMENT.
b. Repeated and unexcused failure by CITY to comply with one or more requirements of
this Lease shall constitute a default notwithstanding that one or all such failures shall
have been timely cured pursuant to this clause.
11.2 TERMINATION FOR DEFAULT.
If a defauli by CITY occurs, GOVERNMENT may, upon 30 days'notice to CITY,terminate
this Lease.
ARTICLE 12-TITLE TO IMPROVEMENTS INSTALLED BY GOVERNMENT
12.1 REAL PROPERTYIMPROVEMENTS.
All improvements constructed by GOVERNMENT on the Premises, such as buildings,
foundations, electric or other utilities, ditches, sewer lines, water lines, dikes or berms and
similar improvements,shall remain the property of GOVERNMENT upon termination of this
Lease for any reason,and GOVERNMENT shall retain the nght to dispose of any permanent ------
improvements by either sale or disposal..
12.2 REMOVAL OFPERMANENTREALPROPERTYIMPROVEMENTS
GOVERNMENT, upon termination of this Lease for any reason, shall not be required to
remove or pay removal costs for any permanent real property improvements placed on the
property by GOVERNMENT during the tern of the lease. However,nothing herein shall be
interpreted to preclude any supplemental agreement for removal or payment of removal costs.
12.3 PERSONAL PROPERTY.
Upon termination of this Lease for any reason other than default by GOVERNMENT, and
subject to CITY's consent at such time, GOVERNMENT may, but need not, promptly
remove, in no event later than ninety (90) days from the termination of the Lease, trade
fixtures and equipment from the Premises provided that GOVERNMENT shall repair any
damages to the Premises caused by such removal.
ARTICLE 13-ASSIGNMENT OR SUBLEASE
13.1 ASSIGNMENT OF LEASE OR SUBLEASING.
The parties recognize that this Lease has been determined to be in the public interest by the
City Council of CITY for the reasons set forth in the approving Resolution. The rights and
duties created by the Lease are personal to GOVERNMENT and CITY has granted the Lease
in reliance upon the individual character and financial capability of GOVERNMENT.
Therefore, GOVERNMENT shall not assign this Lease without CITY's prior written consent,
in CITY's sole discretion. GOVERNMENT may not sublease all or any portion of the
Premises or buildings or improvements located thereon.
13.2 ASSIGNMENT OF LEASE FOR SECURITY.
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City of Seward Resolution No.
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Notwithstanding Section 12.1 above,GOVERNMENT may assign,encumber or mortgage its
interest in this Lease or improvements on the Premises, by deed of trust or other security
instrument, to an institutional lender ("Lender) for development of or operations on the
Premises, provided that Lender shall be subject to all obligations of GOVERNMENT under
the terms of this Lease upon foreclosure. CITY shall furnish Lender, at the address provided
to CITY by Lender in writing,with notice of any default or breach of GOVERNMENT under
this Lease. Lender shall have the right (without being required to do so and without thereby
assuming the obligations of GOVERNMENT under this Lease)to make good such default or
breach within thirty (30) days after written notice specifying such breach. Notwithstanding
the provisions of Article 10 above, no "GOVERNMENT Act of Default" shall exist until
expiration of thirty(30) days after such notice is furnished to Lender;provided.
a. If Lender,with respect to any default or breach other than a failure to make any required
payment of rent or other money, shall undertake within thirty (30) days after notice to
cure the default or breach and shall diligently and in good faith proceed to do so, CITY
may not terminate this Lease or re-let the Premises unless Lender fails to cure the default
or breach within a reasonable period of time thereafter; and
b. If the default for which notice is given is a breach of Article 10.3, CITY shall not
exercise any of the remedies afforded to it under Article 10 above so long as
GOVERNMENT or Lender remains in possession of the Premises and satisfies
---- -- --GOVERNMENT's-obligations-under-the-terms-ofthis-Lease.—Upon4oreclosure-or-other-------- -- -
assertion of its security interest, Lender may further assign, transfer, or dispose of its
interests, provided that any subsequent assignee, purchaser or transferee shall remain
bound by each and every term of this Lease.
13.3. ASSIGNMENT TO AFFILL4TE.
Notwithstanding Section 12.1 above, GOVERNMENT may assign this Lease to an affiliate
of GOVERNMENT as that term is defined by AS 10.06.990(2) or Alaska limited liability
company in which GOVERNMENT maintains a substantial membership interest; provided,
however,that GOVERNMENT's full faith and credit shall remain obligated under this Lease
as though the assignment had not taken place.
ARTICLE 14- INSURANCE
Inasmuch as GOVERNMENT is a sovereign entity, it is self-insured; and as such, is not
required to carry liability or any other type of commercial insurance. Any claim against the
GOVERNMENT shall be submitted in accordance with the appropriate federal regulation
befitting the nature of the claim.
ARTICLE 15-CONDEMNATION
15.1 CLAIMS.
If all or any part of the Premises is condemned for a public use by any government agency or
other duly authorized entity, CITY and GOVERNMENT shall each make a claim against the
condemning or taking authority for the amount of any damage incurred by or done to them
respectively as a result of the taking. Neither GOVERNMENT nor CITY shall have any
rights in or to any award made to the other by the condemning authority; provided,that in the
event of a single award to CITY which includes specific damages for loss of
GOVERNMENT's Leasehold interest, CITY shall transmit to GOVERNMENT the amount
of such specific damages so found,if any.
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15.2 TERMINATION.
If part but not all of the Premises is condemned for public use, GOVERNMENT shall make a
good faith determination as to whether or not the taking of the part of the Premises designated
for condemnation will prevent it from continuing to operate on. the Premises. If
GOVERNMENT determines in good faith that the condemning of such part of the Premises
will prevent it from continuing to operate on the Premises, GOVERNMENT may notify
CITY in writing to this effect, and this Lease shall then be terminated for all purposes
effective fifteen (15) days from the date GOVERNMENT sends such notice to CITY, or at
such other later date as GOVERNMENT shall specify in its notice,and such termination shall
be treated in the same manner as a termination at the expiration of the term of this Lease.
GOVERNMENT shall, as a condition precedent to such termination, remove all
encumbrances, debts and liens to which the Premises is subject. If at the time of such partial
taking for public use, GOVERNMENT determines that such partial taking will not prevent it
from continuing to operate,-then GOVERNMENT and CITY shall negotiate an equitable and
partial abatement of the rent beginning to be effective on the actual date when
GOVERNMENT is effectively prevented from utilizing the condemned land.
ARTICLE 16—DISPUTES
16.1 CONTRACT DISPUTES ACT.
This Lease is subject to the Contract Disputes Act of. 1978, as amended (41 U.S.0
§7101 et.seq.). Except as provided in the Act, all disputes arising under or relating to this
Lease shall be resolved under this Article 16,
16.2 CLAIMS.
"Claim,"as used in this Article 16,means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money in a sum certain,the
adjustment or interpretation of contract terms, or other relief arising under or relating to this
Lease. However, a written demand or written assertion by CITY seeking the payment of
money exceeding$100,000 is not a claim under the Act until certified.A voucher,invoice,or
other routine request for payment that is not in dispute when submitted is not a claim under
the Act. The submission may be converted to a claim under the Act, by complying with the
submission and certification requirements of this Article 16, if it is disputed either as to
liability or amount or is not acted upon in a reasonable time.
a. A claim by CITY shall be made in writing and, unless otherwise stated in this Lease,
submitted within 6 years after accrual of the claim to GOVERNMENT for a written
decision.A claim by GOVERNMENT against CITY shall be subject to a written decision
by GOVERNMENT.
(1) CITY shall provide the certification specified in paragraph(d)(2)(iii)of this clause
when submitting any claim exceeding$100,000.
(2) The certification requirement does not apply to issues in controversy that have not
been submitted as all or part of a claim.
(3) The certification shall state as follows: "I certify that the claim is made in good
faith; that the supporting data are accurate and complete to the best of my
knowledge and belief, that the amount requested accurately reflect the contract
adjustment for which the City of Seward believes the United States of America is
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City of Seward Resolution No.
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liable; and that I am duly authorized to certify the claim on behalf of the City of
Seward."
b. The certification may be executed by any person duly authorized to bind CITY with
respect to the claim.
16.3 DATE OF DECISION.
For CITY claims of $100,000 or less, GOVERNMENT must, if requested in writing by
CITY, render a decision within 60 days of the request. For CITY-certified claims over
$100,000, GOVERNMENT must, within 60 days, decide the claim or notify CITY of the
date by which the decision will be made. GOVERNMENT's decision shall be final unless
CITY appeals or files a suit as provided in the Act.
16.4 ALTERNATE DISPUTE RESOLUTION. ARBITRATION.
a. If the claim by CITY is submitted to GOVERNMENT or a claim by GOVERNMENT is
presented to CITY, the parties may, by mutual consent, agree to use an independent
arbitrator for a settlement pursuant to the provisions of the Alaska Uniform Arbitration
Act (AS 09.43.010 et. se .), as it now exists or may hereafter be amended from time to
time, and judgment on the award may be entered in any Superior Court in the State of
Alaska. Notwithstanding the foregoing, arbitration shall not be applicable to claims or
disputes involving a requested remedy having a value of more than Fifty Thousand
Dollars and No/100s ($50,000) (exclusive of interest and costs). All demands for
arbitration and all answering statements thereto that include any claim must contain a
statement that the total sum or value in controversy, as alleged by the party making such
demand or answering statement, is not more than Fifty Thousand Dollars and No/100s
($50,000.) The arbitrator will not have jurisdiction, power, or authority to consider or
make findings (except to deny jurisdiction)concerning any claim, counterclaim, dispute
or other matter in question where the amount in controversy of any such claim,
counterclaim, dispute or matter is more than Fifty Thousand Dollars and No/100s
($50,000). All such claims over$50,000 will be resolved pursuant to the aforementioned
Contract Disputes.Act. The costs and expenses of arbitration shall be shared equally by
the parties,and each party shall bear its own attorney's fees and costs.
b. Arbitration procedures shall be applicable only to contract,negligence,and similar claims
arising from or related to this Lease, and shall not be used to resolve or determine any
claim based upon fraud, intentional misrepresentation, nor any claim based on conduct
that is a felony crime in the State of Alaska.
c. Written notice of requests for arbitration of disputes may be served by either party to this
Lease upon the other party. Arbitration of any dispute or claim shall be determined by a
single arbitrator selected from a list of not less than five arbitrators obtained from the
presiding Superior Court Judge or other appropriate judicial officer in Anchorage,
Alaska. The arbitrator shall be a person who (a)'has not less than five (5) years legal
experience in the State of Alaska prior to appointment; and (b) such legal experience
includes substantial experience with long-term commercial real property transactions.
Each party shall be provided with a copy of the list and shall be afforded a maximum of
ten (10) working days to become familiar with the qualifications of the prospective
arbitrators. The arbitrator shall be selected by each party, commencing with the party
demanding the arbitration, striking one name from the list until only a single name
remains.
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d. Arbitration hearings shall be conducted in Anchorage, Alaska or such other location as
the parties may agree. Each party shall produce at the request of the other party, at least
thirty(30) days in advance of such hearing, all documents to be submitted at the hearing
and such other documents as are relevant to the issues or likely to lead to relevant
information.
e. In deciding the claim or dispute,the arbitrator shall follow applicable Alaska law,and the
written decision shall be supported by substantial evidence in the record. Failure to apply
Alaska law, or entry of a decision that is not based on substantial evidence in the record,
shall be additional grounds for modifying or vacating an arbitration decision.
16.5 INTEREST PAYMENT.
GOVERNMENT shall pay interest on the amount found due and unpaid from (1) the date
that GOVERNMENT receives the claim(certified,if required); or(2) the date that payment
otherwise would be due,if that date is later, until the date of payment. With regard to claims
having defective certifications, as defined in FAR 33.201,interest shall be paid from the date
that GOVERNMENT initially receives the claim. Simple interest on claims shall be paid at
the rate,fixed by the Secretary of the Treasury as provided in the Act, which is applicable to
the period during which GOVERNMENT receives the claim and then at the rate applicable
for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim.
16.6 PERFORMANCE OF LEASE.
CITY and GOVERNMENT shall proceed diligently with performance of this Lease,pending
final resolution of any request for relief,claim,appeal,or action arising under the Lease.
ARTICLE 17-MAINTENANCE AND REPAIRS
17.1 NORMAL MAINTENANCE.
During the entire term of this Lease and every extension hereto, if any, GOVERNMENT
shall, at GOVERNMENT's sole cost,risk and expense,maintain the Premises, including any
improvements placed thereon by GOVERNMENT, in as good condition as received or
constructed by GOVERNMENT, subject to normal, non-abusive use. CITY, at CITY's sole
option and expense, may, prior to the commencement of construction by GOVERNMENT,
perform maintenance and preventative work on the Premises, exclusive of improvements
placed thereon by GOVERNMENT, in order to prevent erosion, mitigate damage to plants
and animals,or prepare the Premises for eventual development by GOVERNMENT or others
by grading,filling or contouring the Premises.Any such work performed by CITY shall be at
CITY's sole expense and risk unless GOVERNMENT agrees, in advance and in writing, to
share such expense and risk. GOVERNMENT shall maintain in first class condition at all
times all fire,pollution and other protective equipment,if any are placed on Premises.
17.2 SAFETYISSUES.
CITY may notify GOVERNMENT in writing of any deficiencies in the performance of
GOVERNMENT's maintenance responsibilities as they relate to public health or safety and
GOVERNMENT shall promptly within thirty(30)days of receipt of such notice advise CITY
in writing of its proposed schedule for performance of any work necessary to cure such
deficiencies.If such deficiencies relate to the safety of GOVERNMENT's operation such that
the surrounding land and port facilities are exposed to risk, unnecessary potential hazards, or
a risk to the public interest(as distinguished from a business risk), or if CITY is not satisfied
with the proposed schedule of repairs either because of the delays therein or the scope of the
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repairs, then CITY may engage an independent engineering consultant well-versed and
experienced who shall furnish to CITY a comprehensive survey and report for the purpose of
establishing both the need and urgency to perform such maintenance work. As soon as
practicable following receipt of said engineer's determinations and recommendations, if the
report requires repair then GOVERNMENT shall pay the cost of the report and perform such
work in accordance therewith at GOVERNMENT's cost, risk and expense, subject to
availability of Congressional appropriation of funds.
17.3 COST OF REPAIRS.
a. Should GOVERNMENT dispute the necessity of any maintenance work as being
necessary or advisable or reasonable to protect the public facilities on adjacent land, it
may submit the matter to arbitration;provided, however,that pending the decision of the
arbitrator it shall fully comply with the maintenance requests. If an arbitration award
should ultimately find that the repairs were not necessary, then GOVERNMENT may
either deduct from future rental payments the cost of such repairs and report or be
reimbursed therefore.
b. If any facility or service provided by CITY to the Premises shall become inadequate due
to changes in environmental control standards or should any facility require updating or
improvement by reason of a change in GOVERNMENT's use of the Premises or
operations there from, GOVERNMENT shall either construct such improvements at
GOVERNMENT's own cost or reimburse CITY for such work, subject to availability of
funds from Congressional appropriation.
17.4 FIRE AND CASUALTYDAMAGE.
If the entire premises are destroyed by fire or other casualty, this Lease will immediately
terminate. In case of partial destruction or damage,so as to render the premises untenantable,
as determined by GOVERNMENT, GOVERNMENT may terminate the Lease by giving
written notice to CITY within 15 calendar days of the fire or other casualty; if so terminated,
no rent will accrue to CITY after such partial destruction or damage; and if not so terminated,
the rent will be reduced proportionately by supplemental Lease agreement hereto effective
from the date of such partial destruction or damage. Nothing in this Lease shall be construed
as relieving CITY from liability for damage to or destruction of property of the United States
of America caused by the willful or negligent act or omission of CITY.
ARTICLE 18-ENVIRONMENTAL CONCERNS
18.1 HAZARDOUS MATERIALS.
a. Condition of Site. GOVERNMENT has had full opportunity to examine the site for the
presence of any Hazardous Material and accepts the Premises in "as is" condition.
GOVERNMENT may elect, at GOVERNMENT's sole cost, to conduct a baseline soils
test prior to execution of this Lease.
b. Release of CITY. Any other provision of the Lease to the contrary notwithstanding,
GOVERNMENT releases CITY from any and all claims, demands, penalties, fines,
judgments, liabilities, settlements, damages, costs or expenses (including, without
limitation,attorney's fees,court costs,litigation expenses,and consultant and expert fees)
arising prior to, during, and after the term of this Lease, and resulting from the use,
keeping,storage or disposal of Hazardous Materials on the Premises by GOVERNMENT
or arising from GOVERNMENT's operations at the Premises except for those claims
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arising out of CITY's sole negligence or intentional misconduct. This release includes,
without limitation, any and all costs incurred due to any investigation of the Premises or
any cleanup, removal or restoration mandated by a federal, state'or local agency or
political subdivision or by law or regulation.
c. Use of Hazardous Materials on the Site.
(1) GOVERNMENT shall not cause or permit any Hazardous Material to be brought
upon, kept or used in or about the Premises except for such Hazardous Material as
is necessary to conduct GOVERNMENT's authorized use of the Premises.
(2) Any Hazardous Material permitted on the Premises as provided in this paragraph,
and all containers therefore, shall be used,kept, stored and disposed of in a manner
that complies with all Environmental Laws or other laws or regulations applicable
to such Hazardous Material.
(3) GOVERNMENT shall not discharge, leak or emit, or permit to be discharged,
leaked or emitted, any material into the atmosphere, ground, ground water, sewer
system or any body of water,if such material(as reasonably determined by City,or
any governmental authority)does or may,pollute or contaminate the same,or may
adversely affect the(a)health, welfare or safety of persons,whether located on the
Premises or elsewhere; or(b) condition, use or enjoyment of the Premises or any
other area or personal property.
(4) GOVERNMENT hereby agrees that it shall be fully liable for all costs and
expenses related to the use, storage and disposal of Hazardous Material kept or
brought on the Premises by GOVERNMENT, its authorized representatives and
invitees, and GOVERNMENT shall give immediate notice to CITY of any
violation or potential violation of the provisions of this subparagraph.
d. Damages. CITY may file a claim pursuant to Article 16 of this Lease from and against
any claims, demands, penalties, fines,judgments, liabilities, settlements, damages, costs
or expenses(including,without limitation, attorney, consultant and expert fees, court
costs and litigation expenses) of whatever kind or nature, known or unknown, contingent
or otherwise,arising out of or in any way related to:
(1) The presence, disposal, release or threatened release of any such Hazardous
Material which is on or from the Premises, soil, water, ground water, vegetation,
buildings,personal property,persons,animals or otherwise;
(2) Any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Material or any use of the
Premises;
(3) Any lawsuit brought or threatened,settlement reached or government order relating
to such Hazardous Material or any use of the Premises; and/or
(4) Any violation of any laws applicable thereto; provided, however, that this Section
18 .1 (d) shall apply only if the acts giving rise to the claims, demands, penalties,
fines,judgments, liabilities, settlements, damages,costs or expenses(1)occur prior
to or during the term of this Lease; and(2)arise in whole or in part from the use of,
operations on, or activities on the Premises by GOVERNMENT or
GOVERNMENT's predecessors in interest, employees, agents, invitees,
contractors, subcontractors, authorized representatives, subtenants or any other
City of Seward: / United States of America M/Z/
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City of Seward Resolution No.
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Page 24
persons. The provisions of this subparagraph shall be in addition to any other
obligations and liabilities GOVERNMENT may have to CITY at law or equity and
shall survive the transactions contemplated herein and shall survive the termination
of this Lease.
e. Operator. For all purposes,GOVERNMENT shall be deemed the operator of any facility
on the Premises.
f. Hazardous Material Defined. As used in this Lease,Hazardous Material is any substance
which is toxic, ignitable, reactive, or corrosive or which is regulated by any
Environmental Law. Hazardous Material includes any and all material or substances
which are defined as industrial waste hazardous waste, extremely hazardous waste or a
hazardous substance under any Environmental Law. Notwithstanding any statutory
petroleum exclusion, for the purposes of this Lease, the term Hazardous Material
includes, without limitation, petroleum, including crude oil or any fraction thereof,
petroleum soaked absorbent material and other petroleum wastes.
g. Environmental Law Defined.As used in this Lease,Environmental Laws include any and
all local, state and federal ordinances,statutes, and regulations,as now in force or as may
be amended from time to time, relating to the protection of human health and the
environment, as well as any judgments, orders, injunctions, awards, decrees, covenants,
conditions, or other restrictions or standards relating to same. Environmental Laws
include, by way of example and not as a limitation of the generality of the foregoing,
Alaska Statutes Title 46, the Resource Conservation and Recovery Act of 1976 (42
U.S.C. §6901 et seq.), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of 1986
(42 U.S.C. §9601 et seq.),and the Clean Water Act(33 U.S.C. §1251 et seq.)
18.2 PERMITS AND REPORTING.
a. Permits Required by Other Governmental Agencies. GOVERNMENT shall obtain all
permits or approvals required by any applicable law or regulation. Copies of all such
permits shall be provided to CITY prior to GOVERNMENT commencing work under
this Lease. GOVERNMENT shall promptly make all reports to any federal,state or local
government or agency required by any permit or Environmental Law, including reports
of any spill or discharge of Hazardous Material. CITY, through the City Manager, may
order GOVERNMENT to immediately cease any operations or activities on the Premises
if the same is being carried out without necessary permits,in violation of the terms of any
permit or Environmental Law,or contrary to this Lease.
b. Correspondence With and Reports to Environmental Agencies. GOVERNMENT shall
immediately provide CITY with copies of all correspondence and notices, including
copies, of all reports between GOVERNMENT and any state, federal or local
government or agency regulating Hazardous Material which relate to GOVERNMENT's
operations on or use of the Premises.
ARTICLE 19-ESTOPPEL CERTIFICATES/STATEMENT OF LEASE
19.1 REQUESTS FOR STATEMENTS OF LEASE
Either party shall at any time and from time to time upon not less than thirty(30) days'prior
written request by the other party and a prospective lender or purchaser of the Premises,
execute, acknowledge, and deliver to such party, or to its designee, a statement in writing
City of Seward: / United States of America PP/Z/
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Lease No.DACA85-5-1100064
Page 25
certifying that the same is issued subject to the conditions stated in this clause and, if such is
the case, that (1) the Lease and its amendments, if any, are in full force and effect; (2) the
date to which the rent and other charges have been paid in advance, if any; and (3) whether
any notice of default has been issued.
19.2 CONDITIONS FOR STATEMENTS OF LEASE
Statements issued by GOVERNMENT pursuant to this Article are subject to the following
conditions:
a. That they are based solely upon a reasonably diligent review of GOVERNMENT's Lease
file as of the date of issuance;
b. That GOVERNMENT shall not be held liable because of any defect in or condition of the
Premises;
c. That GOVERNMENT does not warrant or represent that the Premises comply with
applicable Federal, State and local law;
d. That CITY, and each prospective lender and purchaser are deemed to have constructive
notice of such facts as would be ascertainable by reasonable pre-purchase and pre-
commitment inspection of the Premises by inquiry to appropriate Federal, State and local
Government officials; and
e. That such statement shall be certified by the appropriate Contracting Officer having
authority to so do.
ARTICLE 20-CONDITIONS AND COVENANTS
All the provisions of this Lease shall be construed to be "conditions" as well as "covenants,"
as though the words specifically expressing or imparting covenants and conditions were used
in each separate provision.
ARTICLE 21-NO WAIVER OF BREACH
No failure by either CITY or GOVERNMENT to insist upon the strict performance by the
other of any term, covenant or condition of this Lease or to exercise any right or remedy
consequent upon a breach thereof and no acceptance of full or partial rent or other
performance by either party during the continuance of any such breach; shall constitute a
waiver of any such breach or of such terms, covenants or conditions. No waiver of any
breach shall affect or alter this Lease,but each and every term,covenant and condition of this
Lease shall continue in full force and effect with respect to any other then existing or
subsequent breach.
ARTICLE 22-TIME OF THE ESSENCE
Time is of the essence of this Lease and of each provision.
ARTICLE 23-COMPUTATION OF TIME
The time in which any act provided by this Lease is to be done by shall be computed by
excluding the first day and including the last, unless the last day is a Saturday, Sunday or a
holiday,and then it is also excluded.
ARTICLE 24—SUCCESSORS BOUND
City of Seward: / United States of America 7�Y 1(4
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 26
Each and all of the terms, covenants and conditions in this Lease shall bind, and inure to the
benefit of, CITY and GOVERNMENT and their respective heirs, executors, administrators,
successors,and assigns.
ARTICLE 25—INTEGRATED AGREEMENT
THIS LEASE,UPON EXECUTION,CONTAINS THE ENTIRE AGREEMENT OF THE
PARTIES WITH RESPECT TO THE MATTERS COVERED BY THIS LEASE;AND NO
PRIOR WRITTEN OR ORAL AGREEMENT,EXPRESS OR E%IPLIED,SHALL BE
ADMISSIBLE TO CONTRADICT THE PROVISIONS OF THE LEASE.ARTICLE 26-
GOVERNING LAW
This Lease shall be governed by, construed and enforced in accordance with the laws and
regulations of the United States of America, the State of Alaska, and the City of Seward. In
the event of any conflict between said laws and regulations,the higher authority shall prevail.
ARTICLE 27-PARTIAL INVALIDITY
If any provision of this Lease is held by a court of competent jurisdiction to be invalid,void
or unenforceable, the remainder of the provisions shall remain in full force and effect and
shall in no way be affected,impaired or invalidated.
ARTICLE 28-RELATIONSHIP OF PARTIES
Nothing contained in this Lease shall be deemed or construed 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 CITY and GOVERNMENT; and neither the method of
computation of rent, nor any other provisions contained in this Lease nor any acts of the
parties, shall be deemed to create any relationship between CITY and GOVERNMENT other
than the relationship of lessee and lessor.
ARTICLE 29-EXAMINATION OF RECORDS
CITY agrees that any duly authorized GOVERNMENT representative shall have the right to
have access to and to examine any directly pertinent books, documents, papers, and records
of CITY involving transactions related to this Lease, in connection with an official audit of
this Lease,until the expiration of three(3)years after final payment of the agreed rental.This
Article 29 shall not be construed as obligating CITY to maintain any books, documents,
papers or records, and CITY shall not be subject to any penalty or act of default as a result of
disposing or destroying CITY books, documents, papers or records pursuant to CITY's
record retention policies.
ARTICLE 30-GRATUITIES TO GOVERNMENT EMPLOYEES
30.1 .GOVERNMENT MAY TERMINATE.
The GOVERNMENT may,by written notice to the CITY,terminate the right of the CITY to
proceed under this Lease if it is found, after notice and hearing,by the Secretary of the Army
or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or
otherwise)were offered or given by the CITY, or any agency or representative of the CITY,
to any officer or employee of the GOVERNMENT with a view toward securing a Lease or
securing favorable treatment with respect to the awarding or amending, or the making of any
determinations with respect to the performing, of such Lease,provided, that the existence of
City of Seward: / United States of America
22.&L\
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 27
facts upon which the Secretary of the Army or his duly authorized representative makes such
findings shall be in issue and may be reviewed in any competent court.
30.2 PURSUIT OF REMEDIES.
In the event this Lease is terminated as provided in paragraph 30.1 hereof, GOVERNMENT
shall be entitled to pursue the same remedies against CITY as it could pursue in the event of a
breach of the Lease by CITY.
30.3 RIGHTS AND REMEDIES NOT EXCL USIVE.
The rights and remedies of GOVERNMENT provided in this clause shall not be exclusive
and are in addition to any other rights and remedies provided by law or under this Lease.
ARTICLE 31-OFFICIALS NOT TO BENEFIT
No member of or delegate to Congress, or Resident Commissioner shall be admitted to any
share or part of this Lease,or to any benefit that may arise there from; but this provision shall
not be construed to extend to this Lease if made with a corporation for its general benefit.
ARTICLE 32-INTERPRETATION
The language in all parts of this Lease shall in all cases be simply construed according to its
fair meaning and not for or against CITY or GOVERNMENT as both CITY and
GOVERNMENT have had the opportunity to seek assistance of counsel in drafting and
reviewing this Lease.
ARTICLE 33-CAPTIONS
Captions of the articles, paragraphs and subparagraphs of this Lease are for convenience and
reference only, and the words contained therein shall in no way be held to explain, modify,
amplify or aid in the interpretation,construction or meaning of the provisions of this Lease.
ARTICLE 34-AMENDMENT
This Lease is subject to amendment in writing,agreed to and executed by both parties hereto.
ARTICLE 35-NOTICES
All notices, demands or requests from one party to another shall be delivered in person or be
sent by mail, certified or registered, postage prepaid, to the addresses stated in this Article
and to such other persons and addresses as either party may designate.Notice by mail shall be
deemed to have been given the day after the time of mailing. All notices, demands and
requests from GOVERNMENT to CITY shall be given to CITY at the following address:
City Manager
CITY OF SEWARD
P.O.Box 167
Seward,Alaska 99664
All notices, demands or requests from CITY to GOVERNMENT shall be given to
GOVERNMENT at the following address:
City of Seward: / United States of America1`(�
2 T
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 28
Department of the Army
U.S.Army Engineer District,Alaska
Real Estate Division(CEPOA-RE)
P.O.Box 6898
JBER,Alaska 99506-0898
Each party shall have the right, from time to time,to designate a different address by notice
given in conformity with this Article.
ARTICLE 36—ATTACHMENTS TO LEASE
The following documents are attached and hereby made part of the Lease.
Exhibit A: Plat 2010-10
Exhibit B: Site Plan
City of Seward: / United States of America /
228S 6
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 29
IN WITNESS WHEREOF,the parties hereto have executed this Lease the dates herein set
forth.
CITY: GOVERNMENT:
-Z"
CITY OF SEWARD UNITED STATES OF AME CA
Phillip Oates Acting by and through the
City Manager SECRETARY OF THE ARMY
Thomas M.Kretzschmar
Date: Chief of Real Estate
Real Estate Contracting Officer
U.S.Army Engineer District,Alaska
Date:
ATTEST:
Johanna Kinney, CMC
City Clerk
City of Seward: / United States of America (7
229s�
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 30
STATE OF ALASKA )
ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this day of 2011,before me,the undersigned,allotary
Public in and for the State of Alaska,personally appeared Phillip Oates,known to me and to me known to
be the City Manager for the City of Seward, Alaska, and authorized to execute documents on its behalf,
and is the individual named in and who executed the foregoing document on behalf of the City of Seward
for the uses and purposes therein set forth.
WITNESS my hand and notarial seal the day and year first hereinabove written.
Notary Public in and for Alaska
My Commission Expires:
STATE OF ALASKA )
ss.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this 2nd day of August,2011,before me,the undersigned,a Notary Public
in and for the State of Alaska, personally appeared Thomas M. Kretzschmar, known to me and to me
known to be the Chief of Real Estate of the US Army Corps of Engineers,Alaska District,and authorized
to execute documents on its behalf, and is the individual named in and who executed the foregoing
document on behalf of the United State of America for the uses and purposes therein set forth.
WITNESS my hand and notarial seal the day and year fast hereinabove written.
$��Q�\ �:•. ! btiyi� Oubwrib d and sworA to before rna
''NOTARY
Not Public in and for Alaska r i
�' ;PUBLIC:* mry
My Commission Expires: Q �:•.. :� r�
i OF NV
'S � tAy Corrxnlssfon tJ Or*tc
City of Seward: / United States of America l lb
230 0
City of Seward Resolution No.
Lease No.DACA85-5-1100064
Page 31
EXHIBIT A
PLAT 2010-10
SSDW'tO'W 47.00'
LEGEND
of Found J 1/4'Al.Cap Monument
= - B Found Reba k At Cap LS 5152 x 42 C a
u
TRACT A • Found Reba 8•ACop LS 7569 S s,om I
0 Found 5/B'Roba '�'
2546 Sq. Ft u Set 5/6A24-Reba d•Po.�LS 7569 �'
S�$ 164.69'Measured 77ih Surrey
(164.7Y) Record Data Plot 96-28
8 I I
——— c�Jr.42'
to, 00'
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N89W""r —a—an'
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I
LOT JA I I
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96SJ4' (161.7Y)164.69_
v 58938"14'M' 1T50.02' F
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DA7FD MAY/9,1931
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WA FOR MAWA 945 5M I PLAT APPROVAL MALW m 1011211884
7hb plat Was goprowd by the Kanol Pen81sulo Borough Planning I
Cocunboran of t(re meefbg of A—V, , I-Xi 7-o0-7 Resurrection Bay
City of Seward: / United States of America �L/
2.1—Ic I
ZI L^'
Conc, R=p
Boordwolk CIA
-------------
C3
r ---------—----- (0------ CU
7 9
Gravel poolly
Float am 4
-----------
Shed
< '800
Veto, ®L7 56 5
AWZ"g
it
Proposed Lease
LEGEND
2546 Sq Ft
Found Rebpr & Al. Cap LS515;?
A Prop
osed PO 54
se
( round Rebbr & Pl, Cap LS7569
Found Rebor
Q11
Existing Property Lines' L=31A2'
;L 27.00 R20,00' proposed t Oose 80undories
Fire Hy'droli t
v�-
cruv'�/ Rood 2
Light Pole !
Conc.I m utility Pole,
M
Telecomm Pedestol
Water Valve
sign
Electric Transforn7er
PPOTO KEY PLAN
232
5' SANITARY SEWER
Conc Romp 1-5 GRAVITY LINE FROM NEW
�b SEWER RETAINAGE
Board STRUCTURE. CONNECT TO
t 3, EXISTINGS.S. MANHOLE
ON NORTH SIDE OF
PUBLIC TOILET FACILITY
/ --EXISTING 61 BUILDING. (APPROX, 300'
o D.I. WATER Pn co DISTANCE NORTH)
SERVICE Z,o (ALTERNATE OPTION:
FORCE MAIN FULL
---------- uo DISTANCE)
2' FORCED
shed 3' SANITARY
�,fetes
-5- )6
E SEWER LINE
SETBACK 200 NEW WATER,
9*55'18"(Vf 4 7,00' Li! Z:
AMP LINE FROM
EXISTING CAP
posed Le se I Q,
11 uj
4, LEGEND
03 546 S Found Rebor �31 AL Cap LS5152
WAMT METER Found mebt7r & Pl. Cop LS7569
40Oi
i=Azw
of0'-0' BUILDING Found Rebor
) SETBACK Fxisting Property Lines
=31.4 2'
27 00' R=20,00 UNDERGROUND Proposed Lease f3vundories
TANK 4 GRINDER
PUMP
9 178:11E Fire Hydron t
orovcf Root'! 0'-0' BUILDING Bollards
SETBACK
Lioht Pole
Conc. Utility Pole
0
IT, 'relecomm pedestol
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1!�J Electric Transformer
PROPOSED BUILDING; AND UTILITY EXTENSIONS
233