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HomeMy WebLinkAboutRes1989-130 . . . sponsored by: Schaefermever CITY OF SEWARD, ALASKA RESOLUTION NO. 89-130 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A LEASE AGREEMENT TO EXPIRE IN MAY 1990 WITH CHUGACH ALASKA CORPORATION FOR A ONE-ACRE PARCEL MORE OR LESS LOCATED WITHIN THE SEWARD MARINE INDUSTRIAL CENTER WHEREAS, Chugach Alaska Corporation wishes to lease land at the Seward Marine Industrial Center for temporary storage of a modular logging camp; and WHEREAS, the Lessee has pledged that there will be no personnel in habitation at the site; and WHEREAS, the Lessee has pledged to vacate the property prior to May 1, 1990; and WHEREAS, it is in the public interest to waive appraisal of the subject property for a lease of such short duration; and WHEREAS, the subject property has not been identified for any other use by the city during the proposed term of this lease; and WHEREAS, it is in the public interest to enter into this short term lease agreement at a rate determined by the city administra- tion, based on other leases in the area, to be a fair market rental rate; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is hereby authorized to execute a Short Term Lease Agreement with Chugach Alaska Corporation, a copy of which is attached and incorporated herein by reference, for a I one-acre parcel of property located within USS 4827 to be used for modular housing storage for a term to expire May 1990. Section 2. It is in the public interest to waive appraisal of the subject property. Section 3. This resolution shall take effect thirty (30) days following passage and posting as required by law. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 23rd day of OctOber, 1989. -1- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 89-130 THE CITY OF SEWARD, ALASKA ~ ~, Mayor AYES: NOES: ABSENT: ABSTAIN: Burgess, Dunham, Hilton, Noll, sieminski, Simutis None Meehan None ATTEST: (City Seal) APPROVED AS TO FORM: Perkins coie, Attorneys for the city of Seward, Alaska (9fl/L J ~ Fred B. Arvidson city Attorney -2- . LEASE AGREEMENT THIS AGREEMENT made and entered into effective as of the 28th day of September, 1989, by and between the CITY OF SEWARD, ALASKA, a municipal corporation located in the Kenai Peninsula Borough, State of Alaska, hereinafter referred to as "CITY" and Chugach Alaska Corporation, hereinafter referred to as "LESSEE". WHEREAS, Leasee wishes to lease land at the Seward Marine Industrial Center for purposes of temporary storage of a modular logging camp~ and, WHEREAS, city desires to accomodate such temporary lease request~ and, WHEREAS, Leasee intends to store the camp only until April of 1990~ and, . WHEREAS, LEASEE has pledged that there will be no personnel in habitation at the site~ and, WHEREAS, LESSEE ha~ ~dicated its desire area of approximately ttri.. :l thousand (~O, 000) hereinafter called the "leased land"~ and to lease a one acre, square feet in size, WHEREAS, the City Council of the City of Seward has determined that a lease of the leased land would be in the public interest~ and WHEREAS, it is the intent of this lease to alleviate from CITY the entire burden of compliance with present or future environmental regulations or controls with respect to LESSEE I S operations on the leased land during the lease term. NOW THEREFORE, for and in consideration of the mutual promises and covenants hereinafter contained, the parties hereto agree as follows: ARTICLE 1. -- T.F.1.~ED LAND . 1.1. DESCRIPTION OF LEASED LAND. The leased land granted by CITY under this lease (hereinafter referred to as "leased land") 1 is located in Seward, Alaska. The leased land is more particularly described as follows: Aproximately 30,000 square feet outlined in red as indicated on exhibit "An, attached. All lease land is located within USS 4827, Seward, Alaska. 1.2 Warrantv of Title: Covenant of Ouiet Eniovment. Subject only to restrictions of title or provisions of this lease, CITY hereby covenants that LESSEE shall have the quiet enjoyment and possession of the leased land for any use authorized hereunder for the full term of this lease. CITY owns the leased land free and clear of all encumbrances and is fully empowered to enter into this lease. CITY is unaware of any prior conflicting use of the property which would adversely affect LESSEE's intended use of the 1. 3--Zonina. Land Use. CITY represents that the current zoning classification of the leased land is Industrial. In the event that at any time LESSEE deems it necessary or appropriate to obtain use, zoning or subdivision and precise plan approval for the leased land, or any part thereof, CITY agrees from time to time upon request of LESSEE to execute such documents, petitions, applications and authorizations as may be appropriate or required to obtain from the agency or public body responsible therefore any conditional use permits, zoning and re-zoning, tentative and final tract approval and precise plan approval. This section shall impose no duty or responsibility on CITY to assist LESSEE in obtaining any other permits or approvals for operation or construction, such as those required by the U.S. Army Corps of Engineers (wetland fill permits) or the Environmental Protection Agency (Clean Air Act permits), etc. CITY shall cooperate in good faith with LESSEE in LESSEE's efforts to promptly obtain any required permits for construction or operation of LESSEE's facilities on the leased land. herein by reference. ARTICLE 2. -- T.RA~E TERM 2 .l--Initial Term. This lease shall commence thirty (30) days after passage and posting of Resolution 89-~ authorizing this lease agreement, and shall continue until May 1, 1990. Lessee has reviewed the provisions of the Seward Code and specifically Chapter 7.05 and understands and agrees to the conditions under which this lease is issued. 2 . 2.2--Interim Riaht to Possession. The parties understand and Lessee is specifically taking the risk that under the Charter and Ordinance provisions for the City of Seward this lease agreement may be voided by a referendum vote of the people. LESSEE is herein granted the right to possession of the leased premises prior to the passage of thirty (30) days from the date of approval of this lease by the city Council for the city of Seward. This interim right to possession shall not affect or reduce the rights of the voters to reject this lease agreement in which case LESSEE shall not be entitled to any damages, or any other recovery against CITY. LESSEE shall have the right to enter the leased premises immediately upon the execution of this lease. Permitting LESSEE to occupy the land in advance of the lapse of thirty (30) days is for the convenience of LESSEE only and should not be construed as granting any interest in the leased land should this lease be defeated in a referendum election. ARTICLE 3. -- RENT . 3.l--Initial Rental Rate. Through May 1, 1990 the annual rental rate shall be twenty-five ($.25) per square foot. The rent shall be payable quarterly in advance on or before the twentieth day of the month following the beginning of each quarter - April 20th, July 20th, October 20th and January 20th. The anniversary date of this lease shall be thirty (30) days following the approval of this lease agreement by the City council of the City of Seward. 3.2--Late PaYment Penaltv. Rental payment due, but not received, by the due date shall accrue interest at l% per month or the maximum permitted rate under Alaska law, whichever is higher. ARTICLE 4. -- USE OF LEASED LAND CITY has limited land available for lease and LESSEE's intended use of the leased land has been determined by the city Council to be in the public interest. 4.l--Use of the leased land. LESSEE may use the land only for the outside storage of 12 logging camp modular housing units, provided the following conditions are met: a) No live-ins (no person to live in, on or near the stored modules). . 3 b) Site is to be completely restored to its present condition or better upon prior to the termination of this lease. c) Modules must be moved at leasee expense to another city supplied site of similar characteristics within 90 days of leasee receipt of a notice to move as issued from the City of Seward. d) Leasee aqrees to prohibit the use, keepinq, storaqe, or disposal of hazardous materials on the site. LESSEE will not use the land in any manner or construct any facilities thereon which would inhibit the use of adjacent or other lands. 4.2--No Preferential Riahts to Use Public Facilities. This lease aqreement shall not be construed to qrant any exclusive riqhts of use to LESSEE of any public port facilities constructed or maintained by the City of Seward. Insofar as use of those facilities is concerned, LESSEE will be subject to any required tariffs, procedures, rules and regulations of the City of Seward as they may now exist or from time to time be amended and LESSEE shall not be entitled to any exclusive use. 4.3--Adeauacv of Public Facilities. CITY makes no representations or warranties as to any particular part or the whole of CITY's public facilities with respect to their fitness for the uses intended by LESSEE, and LESSEE has inspected those facilities and has examined the plans and specifications of those facilities under construction or planned for construction and has satisfied itself that the facilities are sufficient for the intended uses by LESSEE. CITY makes no representations or warranties of any nature with respect to the commercial practicability or accuracy of any information provided by CITY. 4.4--Tariffs and Other Service Fees. CITY shall have the right to make amendments to its tariffs, regulations and scheduled fees from time to time even if those adjustments shall cost LESSEE more for its operations or use of public facilities and CITY is free to do so provided only that it does not pose any greater burden or hiqher rate upon LESSEE than upon any other similar user of the public facilities. 4.5--Time for PaYment of utilities. Taxes. LESSEE will pay for utilities and taxes related to operations on the leased land and LESSEE's interest in this lease aqreement, if any, before such obliqations become delinquent; provided, that LESSEE may, in qood 4 . faith and before such payment, contest any such charge or assessment. ARTICLE 5. -- UTILITIES AND RIGHTS OF ACCESS 5.l--utilities. LESSEE, at LESSEE's sole cost and expense, shall provide for the extension of public utilities to the leased land sufficient for LESSEE's intended operations. In so doing, LESSEE shall comply with all city regulations and requirements with respect to the construction of those utilities. CITY agrees to cooperate and assist LESSEE in LESSEE's planning and engineering of those improvements and, further, to assist in coordinating the actual connection of those utilities to the City system. CITY agrees to make reasonable efforts to provide connection of utilities to the City system7 however, the parties recognize that circumstances may arise, including the availability and priority of utility service crews, which might not be adequate to meet LESSEE's needs. . LESSEE shall not be entitled to any refund, rebate, or payments from CITY for any rent, investment, or costs incurred by LESSEE with respect to any required permits for construction or operation of LESSEE's facilities on the leased land, it being the intent of the parties that the risk of Obtaining required permits be solely a risk undertaken by LESSEE. 5.2 --Third Partv ImDrovements. At the request of LESSEE, 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 leased land and in accordance with the terms of this Agreement covenants, conditions and restrictions providing for the granting of uses of the leased land, 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 leased land as a commercial unit subject, however, to the conditions that: a) All such matters shall be limited to the lease term and shall terminate upon termination of the lease for whatever reason. . b) 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 5 therefore, and the cost and expense thereof shall be borne solely by LESSEE. c) At the expiration of the lease term (including any extended period) third party improvements on the leased land other than portable equipment shall become the property of CITY without the payment of any compensation to LESSEE. 5. J--Future Easements. In order to provide for the more orderly commercial development of the leased land and adjacent lands, and publicly owned facilities in the Seward Marine Industrial Center area, 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 leased land. As additional consideration for this lease, both CITY and LESSEE 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 the general lease area for the purpose of granting such easements and dedications; provided, however, that such easements and dedications and similar rights do not unreasonably interfere with LESSEE's efficient operations. The costs of locating or relocating any public easements or restrictions of record including any relocation of public road, railroad, utility, or other easement 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 the general lease area. Any easements or rights of access granted to LESSEE by CITY need not be exclusive to LESSEE. ARTICLE 6. -- CONSTRUCTION BY LESSEB 6.l--LESSEE shall have the right to erect, maintain, alter, remodel, reconstruct, rebuild, build and/or replace buildings and other improvements on the leased land, subject to the following conditions: a) The cost of any such construction, reconstruction, demolition, or of any changes, alterations or improvements, shall be borne and paid for by LESSEE. b) The leased land shall at all times be kept free of mechanics and materialmen's liens. 6 . c) LESSEE shall supply CITY with a copy of all building plans and specifications and a site plan or plans for the leased land. d) Any general contractor employed by LESSEE or its sublessees shall be appropriately bonded by use of performance and labor and material payment bonds in the customary form when cost of the work is over Fifty Thousand Dollars ($50,000). Copies of all such bonds shall be furnished to CITY prior to commencement of construction. LESSEE shall provide CITY, if no performance and labor and material bonds are provided by LESSEE, any necessary assurance or guarantees that the contemplated work will be performed by the general contractor or by LESSEE. In the event that LESSEE elects to construct the facility with its own personnel and equipment, or the personnel and equipment of any corporation or person that is an "affiliate" of LESSEE as such term is defined in A.S. 10.05.825(1), a performance bond shall be required when the cost of the work is over Fifty Thousand Dollars ($50,000). e) CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility for any improvements constructed or effected by LESSEE on the leased land. . f) LESSEE shall comply with all federal, state and local statutes and regulations with respect to such construction including any required finding by the City Council of Seward that such action is in the public interest. g) LESSEE may add/alter, or remodel improvements at LESSEE's discretion during the term of this lease. 6.2--citv Review of Plans/Specifications. CITY shall have the right to review initial plans and any future changes or additions to LESSEE's facility by reviewing the design thereof, and CITY shall have the right to comment upon that design and to require LESSEE to make reasonable changes to conform to safety considerations and so as to avoid interference with public operations but the exercise of these rights shall not imply any obligation to do so nor any obligation to do so in a particular way; LESSEE 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. LESSEE shall obtain the usual and customary performance guarantees from its contractors and LESSOR shall be named an additional insured. . 7 ARTICLE 7. -- RE'.l'tJRN OF PREMISES/SITE CONDITION 7.1--Return of Premises in oriainal Condition. Upon termination of this lease for any reason, LESSEE shall return the leased land to CITY in the good condition, useable as it was originally intended. The leased land shall be free of all Hazardous Material at the leased land arising out of or reSUlting from LESSEE's operations of the leaseed land. 7.2--Return of Premises in Different Condition. Notwithstanding the provisions of Section 7.l above, upon termination of this lease for any reason LESSEE may return the land in a re-contoured or graded condition different from its original condition provided LESSEE has complied with the following provisions: a) CITY has provided written approval of LESSEE's plans for development of the property contours, including its plans for material extraction and final grade, and b) CITY has had the opportunity to comment upon LESSEE's plans and to require LESSEE to make reasonable changes in them in order to provide reasonable assurance that the extraction of materials, contouring and grading will not adversely affect the ability of CITY to lease the leased land for commercial development should this lease terminate for any reason and to avoid interference with other port operations, and c) The exercise of these rights to review shall not imply any obligation to do so nor any obligation to do so in a particular way, and d) LESSEE shall submit a preliminary design to CITY within sixty (60) days after execution of a lease, and shall finalize that design within sixty (60) days after receiving CITY's comments. LESSEE shall comply with the final design specifications as approved by CITY. CITY's engineer may monitor the work and shall have access to the site at all reasonable times. ARTICLE 8 -- FORCE MAJEURE In the event either LESSEE or CITY is delayed from performance of any of its obligations under this lease, due to acts of God, acts of the enemies of the united States of America, war, sabotage, blockade, insurrection, riot, epidemic, fires, floods, explosions, earthquakes/tsunami or civil disturbance, the time period wherein 8 . such performance is to occur shall be extended by that amount of time necessary to compensate for the delay. ARTICLE 9.-- LESSEE'S ACTS OF DEFAULT Each of the following shall be a IlLESSEE Act of Defaultll under this lease and the terms "acts of defaultll and IIdefaultll shall mean, whenever they are used in this lease, anyone or more of the following events: a) Failure by LESSEE to pay promptly when due, and in no event later than twenty (20) days from the due date thereof, the rentals required to be paid under this lease. . b) Failure by LESSEE 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 LESSEE 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 LESSEE within the applicable period and diligently pursued until the default is corrected. c) The making by LESSEE of an assignment for the benefit of creditors, the filing of a petition in bankruptcy by LESSEE, the adjudication of LESSEE as insolvent or bankrupt, the petition or application by LESSEE to any tribunal for any receiver or any trustee for itself or for any substantial part of its property; or the commencement of any proceeding relating to LESSEE under any bankruptcy, insolvency, reorganization, arrangement or readj ustment of debt law or statute or similar law or statute of any jurisdiction, whether now or hereafter in effect which shall remain undismissed for a period of six (6) months from the date of commencement thereof. . d) violation by LESSEE of 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 pursuant to the regulations of such agencies, for a period of thirty (30) days after written notice specifying such violation has been given by the agency charged with the enforcement of such laws, regulations or permits to LESSEE; provided, however, if such violation be such that it cannot be corrected within the applicable period, it shall not constitute an act of default if 9 corrective action is instituted by LESSEE within the applicable period and diligently pursued until the violation is corrected. Furthermore, if LESSEE shall contest such alleged violation 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 LESSEE. ARTICLE 10. -- REMEDIES FOR DBFAULT BY LESSEE Whenever an act of default by LESSEE shall have occurred, and any applicable period for giving notice and any opportunity to cure shall have expired, CITY shall have the following rights and remedies in addition to any rights and remedies that may be given to CITY by statute, common law or otherwise: a) CITY may distrain for rent due any of LESSEE' s personal property which comes into CITY's possession. This remedy shall include the right of CITY to dispose of personal property distrained in any commercially reasonable manner. It shall be conclusively presumed that compliance with the procedures set forth in the Alaska Uniform Commercial Code (AS 45.09.504) with respect to sale of property shall be a commercially reasonable disposal. b) CITY may re-enter the leased land and take possession thereof and, except for any personal property of LESSEE which CITY has waived its right to distrain under sub-part (a) above, remove all personal property of LESSEE from the leased land. Such personal property may be stored in place or may be removed and stored in a public warehouse or elsewhere at the cost of LESSEE all without service of notice or resort to legal process, all of which LESSEE expressly waives. c) Declare this lease terminated. d) Collect any and all rents due or to become due from sub-tenants or other occupants of the leased land. e) Recover, whether this lease be terminated or not, reasonable attorney' s fees from LESSEE and all other expenses incurred by CITY by reason of the breach or default by LESSEE. f) Recover an amount to be due immediately on breach equal to the rent reserved under this lease discounted to the date 10 . of such breach at the rate of eight percent (8%) per year. If the leased land or any part thereof be re-let by CITY for the unexpired term of this lease, CITY shall reimburse to LESSEE upon receipt an amount not to exceed the amount received by CITY under this section. g) If LESSEE does not immediately surrender possession of the leased land after termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon and repossess the leased land and expel LESSEE 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. h) No expiration or termination of this lease shall expire or terminate any liability or obligation to perform of LESSEE's which arose prior to the termination or expiration except insofar as otherwise agreed to in this lease. . i) 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 anyone 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. j) 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 ll. -- TITLE TO IMPROVEMENT INSTU.T.F.D BY LESSEE ll.l--Real Propertv Improvements. All improvements constructed by LESSEE on the leased land or on easements to or from same, such as buildings, warehouses, conveyor systems ditches, sewer lines, water lines, dikes or berms, and similar improvements, shall become the property of CITY upon the termination of this lease for any reason; provided, however, that CITY may require LESSEE to remove any improvements designated by CITY without cost to CITY. . 11 ll.2--Personal ProDertv. Any other provisions of this lease to the contrary notwithstandinq, LESSEE, upon termination of this lease for any reason, may but need not promptly remove, and in no event later than sixty (60) days from the termination of the lease, trade fixtures and equipment from the leased land provided that LESSEE shall repair any damaqes to the leased land caused by such removal. ARTICLE l2. -- SUBT.'RIUIE OR ASSIGNMENT l2.1--Assianment of Lease of Subleasina. The parties recoqnize that this lease has been determined to be in the public interest by the city council of the City of Seward for the reasons set forth in Resolution 89-___ LESSEE may only assiqn, sublease, or sub-tenant this lease or any portion of the leased land with CITY's written consent which shall be qranted if the use by the proposed assiqnee, sublessee, or sub-tenant is: a) compatible with the use of adjacent lands, includinq the adjacent leased land: b) is a permitted use under the then exiStinq zoninq requlations and comprehensive land use plan: and c) is found to be in the public interest by the City Council of the City of Seward. l2.2--Assianment to Affiliate. LESSEE may assiqn this lease to an affiliate of LESSEE as that term is defined by AS 10.05.825(1): provided, however, that LESSEE's full faith and credit shall remain obliqated under this lease agreement as thouqh the transfer had not taken place. ARTICLE l3. -- LESSEE'S DUTY TO DEFEND IINDEMNIFY LESSEE shall defend, indemnify and hold CITY harmless from and aqainst any and all liability or claims arisinq from acts or omissions of any person and of any nature whatsoever occurrinq on or relatinq to LESSEE's operations at or use of the site, causinq injury to, or death of persons, or loss of, or damage to property, and from any expense, includinq attorneys fees, incident to the defense of and by CITY therefrom except for claims arisinq out of the sole negligence of the CITY, its aqents or employees. If any action or proceedinq is brouqht aqainst LESSEE by reason of any such occurrences, LESSEE shall promptly notify CITY in writinq of such action or proceeding. 12 . . . ARTICLE l4. -- INSURANCE Prior to commencement of occupation of the leased land, LESSEE shall procure and maintain, at LESSEE's sole cost and expense, commercial general liability insurance, with limits of liability of FIVE HUNDRED THOUSAND DOLLARS ($500,000) for all injuries and/or deaths resulting to anyone person and ONE MILLION DOLLARS ($1,000,000) limit from anyone occurrence. The limit of liability for property damage shall be FIVE HUNDRED THOUSAND DOLLARS ($500,000) for each occurrence and aggregate. coverage under such insurance shall also include explosion, collapse and underground property damage hazards. Such insurance shall include a blanket contractual liability endorsement. For non-owned watercraft of LESSEE or its customers any "watercraft exclusion" in the commercial liability insurance policy shall be eliminated. Protection and indemnity insurance shall be provided with the same limits as the commercial liability insurance for the use of LESSEE- owned watercraft. LESSEE shall also provide fire and extended coverage insurance for any buildings, equipment, machinery, vessels of customers or any other property stored or being worked on by LESSEE upon the leased land at replacement value rather than original cost. LESSEE shall provide Workmen's Compensation Insurance and insurance under the Harbor Workers and Longshoremen I s compensation Act, and warehouse and motor vehicle insurance and any other insurance required under any permit or tariff of the city of Seward, Alaska. The minimum amounts and types of insurance provided by LESSEE shall be subject to revision in accordance with standard insurance practices, in order to provide continuously throughout the term of this agreement and any extensions hereof, a level of protection consonant with good business practice and accepted standards in the industry. Such factors as increases in the cost of living, inflationary pressures, and other considerations, shall be utilized in assessing whether the minimum insurance requirements should be increased. CITY may notify LESSEE of any requested increase in insurance coverages. All insurance policies shall provide for thirty (30) days' notice of cancellation and/or material change to be sent to CITY at the address designated in ARTICLE 38 of this lease. All such policies shall be written by insurance companies legally authorized or licensed to do business in the State of Alaska, and acceptable to CITY (Best's Rating B+ or better). LESSEE shall furnish CITY, on forms supplied by CITY, certificates evidencing that it has procured the insurance required herein prior to the occupancy of the leased land or operation by LESSEE. Nothing herein contained shall prevent LESSEE or CITY from placing and maintaining at CITY's 13 or LESSEE's own individual cost and expense, additional or other insurance as may be desired. All of the insurance policies required above as well as any other insurance carried by LESSEE or CITY shall provide that the insurers waive their rights of subrogation against CITY and LESSEE and their respective officers, servants, agents or employees. LESSEE further agrees to waive and agrees to have its insurers waive any rights of subrogation (whether by loan receipts, equitable assignment or otherwise), with respect to deductibles under such pOlicies and with respect to damage to equipment including the loss of use thereof, whether insured or not. LESSEE shall also name CITY as an additional insured on the general liability insurance policy maintained by LESSEE as required above, excluding coverage for claims resulting from CITY's sole negligence. LESSEE shall provide CITY promptly and without request copies of all insurance binders and policies upon receipt thereof by LESSEE. ARTICLE l5. -- CONDEMNATION If all or any part of the leased land is condemned for a public use by any government agency or other duly authorized entity, CITY and LESSEE 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 LESSEE 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 LESSEE's leasehold interest, CITY shall transmit to LESSEE the amount of such specific damages so found, if any. If part, but not all of the leased land is condemned for public use, LESSEE shall make a good faith determination as to whether or not the taking of the part of the leased land designated for condemnation will prevent if from continuing to operate on the leased land. If LESSEE determines in good faith that the condemning of such part of the leased land will prevent it from continuing to operate on the leased land, LESSEE may notify CITY in writing to this effect, and this lease shall then be terminated for all purposes effective fifteen (l5) days from the date LESSEE sends such notice to CITY, or at such other later date as LESSEE 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. LESSEE shall, as a condition precedent to such termination, remove all encumbrances, debts and liens to which the leased land is subject. If at the time of such partial taking for 14 . . . public use, LESSEE determines that such partial taking will not prevent it from continuing to operate, then LESSEE and CITY shall negotiate an equitable and partial abatement of the rent beginning to be effective on the actual date when LESSEE is effectively prevented from utilizing the condemned land. ARTICLE l6. -- ARBITRATION Any dispute between CITY and LESSEE with respect to any provision of this lease or the rights and obligations of the parties hereunder shall be decided by arbitration, in accordance with the provisions of this paragraph. Consent Panel. The party desiring arbitration of a dispute shall give written notice to that effect to the other party specifying in such notice the name and address of a person to serve as an arbitrator on its behalf. Within fifteen (15) days after receipt of such notice the other party shall give written notice to the first party specifying the name and address of a person designated to serve as an arbitrator on its behalf. . If neither party has objected to the others designation within fifteen (15) days of the notice by the second party of its representative of an arbitrator, then the two chosen arbitrators (called the "consent panel") shall select a third person agreeable to both to become the third member of the consent panel. The consent panel may utilize informal techniques and hold informal hearing without reference or adherence to the rules or procedures of the American Arbitration Association. Promptly and within thirty (30) days of concluding any proceeding the consent panel shall render its written decision. It is the intent of this subparagraph to provide for a speedy and inexpensive resolution of disputes provided the parties agree to such a procedure. Arbitration Awards. Any award shall be enforceable in accordance with AlaSka Statutes. Any award shall include an award of costs, interest and attorney fees. ARTICLE 17. -- MAINTENANCE AND REPAIRS l7.l--Normal Maintenance. During the entire remaining term of this lease and every renewal or extension hereof, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the leased land, including any improvements placed thereon by LESSEE, in as good condition as received or constructed by LESSEE, ordinary wear and tear excepted. CITY, at CITY's sole option and expense, may, prior to the commencement of construction by LESSEE, perform maintenance 15 and preventative work on the leased land, exclusive of improvements placed thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or prepare the leased land for eventual development by LESSEE or others by grading, filling or contouring the leased land. Any such work performed by CITY shall be at CITY's sole expense and risk unless LESSEE agrees, in advance and in writing, to share such expense and risk. LESSEE shall prevent the discharge of any pollutants to any public sewer system beyond those for which the system was designed. LESSEE shall maintain in first class condition at all times all fire, pollution and other protective equipment. CITY may periodically inspect the leased land and facilities constructed thereon in order to ascertain the condition of the public portion of the premises but the exercise of this right shall not imply any obligation to do so nor any obligation to do so in any particular way. l7.2--Safetv Issues. CITY may notify LESSEE in writing of any deficiencies in the performance of LESSEE's maintenance responsibilities as they relate to pUblic health or safety and LESSEE 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 LESSEE'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 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 LESSEE shall pay the cost of the report and perform such work in accordance therewith at LESSEE's cost, risk and expense. l7.3--Cost of Recairs. Should LESSEE dispute the necessity of any maintenance work as being necessary or advisable or reasonable to protect the public facilities on the leased land or on adjacent land facilities, it may submit the matter to arbitration~ provided, however, that pending the decision of the arbitrators it shall fully comply with the maintenance requests. If an arbitration award (which shall include costs, interest and l6 . attorneys' fees) should ultimately find that the repairs were not necessary then LESSEE may either deduct from future rental payments the cost of such repairs or be reimbursed therefor. In deciding whether repairs requested by CITY or required by an engineering report are necessary the arbitration panel is to give primary consideration to the safety and welfare of the Seward port facilities and the citizens of Seward to the highest standards in the industry. If any facility or service provided by CITY to the leased land shall become inadequate due to changes in environmental control standards or should any facility require updating or improvement by reason of a change in LESSEE's use of the leased land or operations therefrom, LESSEE shall either construct such improvements at LESSEE's own cost or reimburse CITY for such work at the option of CITY. ARTICLE l8. -- ENVIRONMENTAL CONCERNS . l8.l--Hazardous Materials. a) Condition of site. LESSEE has had full opportunity to examine the site for the presence of any Hazardous Material and accepts the site in "as is" condition 1 however, prior to the effective date of this lease, LESSEE may complete a base line assessment of the lease site to be be attached hereto as Exhibit B. b) Release of CITY. Any other provision of this lease agreement to the contrary notwithstanding, LESSEE 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 during or after the term of this lease agreement, and resulting from the use, keeping, storage or disposal of Hazardous Material on the site by LESSEE, or arising out of or resulting from LESSEE's operations at the site except for those arising out of the CITY'S sole negligence or intentional misconduct. This release includes, without limitation, any and all costs incurred due to any investigation of the site 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. i) LESSEE shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the leased property except for such Hazardous Material as is necessary to LESSEE's authorized use of the leased land. 17 ii) Any Hazardous Material permitted on the leased land 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. iii) LESSEE 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 the 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 leased land or elsewhere, or (b) the condition, use or enjoyment of the leased land or any other area or personal property. iv) LESSEE 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 leased land by LESSEE, its authorized representatives and invitees, and LESSEE' shall give immediate notice to CITY of any violation or potential violation of the provisions of this subparagraph. d) Indemnification of CITY. Any other provision of this lease agreement to the contrary notwi thstanding , LESSEE shall defend, indemnify and hold CITY harmless 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 (i) the presence, disposal, release, or threatened release of any such Hazardous Material which is on, from or affecting the leased land, soil, water, ground water, vegetation, buildings, personal property, persons, animals, or otherwise; (ii) any personal injury (including wrongful death) or property damage (real or personal) arising our of or related to such Hazardous Material; (iii) any lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Material; and or (iv) any violation of any laws applicable thereto; provided, however, that this provision shall apply only if the acts giving rise to the claims, demands, penalties, fines judgments, liabilities, settlements, damages, costs, or expenses (a) occur in whole or in part during or after the term of this lease agreement, and (b) arise in whole or in part from the use of, operations on, or activities on the leased land by LESSEE or its employers, l8 . employees, agents, invitees, contractors, subcontractors or authorized representatives. The provisions of this subparagraph shall be in addition to any other obligations and liabilities LESSEE may have to City at law or equity and shall survive the transactions contemplated herein and shall survive the termination of this lease agreement. e) Facilitv oDerator. For all purposes, LESSEE shall be deemed the operator of any facility at the leased land. f) Hazardous material defined. As used in this lease agreement 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 "hazardous waste," "extremely hazardous waste" or a "hazardous substance" under any Environmental Law. Notwithstanding any statutory petroleum exclusion, for the purposes of this lease agreement 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 agreement 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, the Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental Response, compensation and Liability Act of 1980, the Clean Water Act, and the Superfund Amendments and Reauthorization Act of 1986. l8.2--Permits and ReDortina. . a) Permits reauired .bv other aovernmental aaencies. LESSEE 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 LESSEE commencing work under this lease. LESSEE 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. The City Manager may order LESSEE to immediately cease any operations or activities on the leased land 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 agreement. 19 b) Corresoondence with and reoorts to environmental aqencies. LESSEE shall immediately provide CITY with copies of all correspondence and notice, including copies, of all reports between LESSEE and any state, federal or local government or agency regulating Hazardous Material which relates to LESSEE's operations on or use of the leased land. c) Ooeratinq olano Promptly and before operations begin, LESSEE shall furnish to CITY a written development and clean-up plan describing in detail the operations to be conducted on the leased land and the plans of LESSEE to restore the leased land to its original condition. ARTICLE 19. -- ESTOPPEL CERTIPXCATES Either party shall at any time and from time to time upon not less than ten (lO) days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this lease is unamended and in full force and effect (or, if there has been any amendment thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extent thereof); and stating the dates to which the rent and other charges have been paid in advance. ARTICLE 20. -- CONDITIONS AND COVENANTS. All the provisions of this lease shall be deemed as running with the land, and shall be construed to be "conditions" as well as "covenants", as though the words specifically expressing or imparting covenants and condi tions were used in each separate provision. ARTXCLE 21. -- NO WAXVBR OP BREACH No failure by either CITY or LESSEE 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, shall constitute a waiver of any such breach or of such terms, covenant or condition. 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 OP ESSENCE Time is of the essence of this lease and of each provision. ARTICLE 23. -- COMPUTATXON OP TIME 20 . 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. ARTICLB 24. -- SUCCBSSORS IN INTERES'l' Each and all of the terms, covenants and conditions in this lease shall inure to the benefit of and shall be binding upon the successors in interest of CITY and LESSEE. ARTICLB 25. ENTIRE AGREBMENT This lease contains the entire agreement of the parties with respect to the matters covered by this lease, and no other agreement, statement or promise made by any party which is not contained in this lease shall be binding or valid. ARTICLB 26. -- GOVERNING LAW This lease shall be governed by, construed and enforced in accordance with the laws of the state of Alaska. ARTICLB 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. ARTICLB 28. -- RELATIONSHIP OF PARTIBS 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 LESSEE: 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 LESSEE other than the relationship of lessee and lessor. ARTICLB 29. -- 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 LESSEE as both CITY and LESSEE have had the assistance of attorneys in drafting and reviewing this lease. ARTICLB 30. -- NUMBER AND GENDER . 21 In this lease, the neuter gender includes the masculine and the feminine, and the singular number includes the plural~ the word "person" includes corporation, partnership, firm or association wherever the context so requires. ARTICLB 31. -- MAHDATORY AIm PBRMISSIVE "Shall", permissive. "will" and "agrees" are mandatory~ "may" is ARTICLB 32. -- CAPTIONS captions of the Sections and Subsections 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. ARTICLB 33. -- AMENDMBNT This lease is not subj ect to amendment except in writing executed by both parties hereto. ARTICLB 34. -- DBLIVERY OP NOTICBS - METHOD OP TIMB 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 ARTICLE 38 and to such other persons and addresses as ei ther party may designate notice shall be deemed to have been given at the time of mailing. ARTICLB 35. -- NOTICES All notices, demands and requests from LESSEE 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 LESSEE shall be given to LESSEE at the following address: Chugach Alaska corporation 3000 A Street Anchorage, Alaska 22 . "-"" . ......" .' . ..-<,,:T 16 ':3'3 15:06 ':HUf;HCH Hf ,:,:,pP. ':. ' __" ":"_' __ __,.._...... __" .! _,;"",u"", ,_~_! 1-1 C',2 .:::. '.T~CLB 34. -- CHANGE OF ADDR!Sa Each par1:y shall have the right, troll! time ~o time, to desiqnat~ a different aadress by notice given in conformity with thil Art~cle. AR~ICL~ 37. -- FIRE PROTECTION LESSE~ ahall at its ~ol. cost, risk and expense provide fire protection to its operations on ~h. leased land and fir. prevention to industry standards ~or risks to adjacent port facilitios $uch that tho.e ri$k$ arQ minim12ed. LESSEE shall continue to provide and main~ain industry accepted standards or fire protection such that the City of Seward's ISO rating is not degraded by reason ot LESSEE's operation. The parties agree that 'tlith the rapid expansion of technology in the field of fire prevention and control LtSSEE's obligations hereund~r may vary durin9 the term of this lease and CITY may submit LESSEE'g compliance ~ith its obligation hereunde~ to arbitration not more frequently than once each five years. IN WXTNBSS WHEREOF, the p~r~ies hereto have set their hand" and seals the date first ~3reinbefore set forth. CITY: CITY OF SEWARD LESSEE: chugach Alaska Corporation ~~'1;;t:v~^ = DARRYL SCHAEFERMEYER CITY MANft"GER By: 23 - ... ... & ~f ~A ~~ \ \ ~ .", .. .~ ./ a\ ' --- --- . ~ . .~ ~ \ ~ - -/ ,,"N. 89 'Or.. . .. ~' .: ~ SIIDR4!J1J:1 1'4' n.lt:lT H4"" . lc\ ... ' ,_ ,..__'t~,2-5,/27 $".FI. i . :::... -,~~.:, . .... 7:.' J!tA. t ~ ' . . ," .,....,.~ ~ ~ ~!~~~'4~"JI/. 2~O.~'1 ~ ~{tJt:~;~/4r,4~f~~, ~ c:):'......:' LIASI , '" -:.!~ ~ .14tW St. FI. t) ~ \. : 7:1?tJ." '-. \ ~ I' 200.00', .. :", '" 89- 2-!'47"H1. I,'S"~. 7~' < NEC'.v. t/3S 1r;.~1 . - I'i7. SLM tR f' 4.C', I' 5tJOo. 000 AI. . 50017. 000 e. ~ ~ ~ Ro.c. ~ ~ /I. 8'.27 '.38' t!' I, ,.~.. 7(. , --.. --\ 30' Pi/. cos~.m~",., --'_ _ -----A C'.v. (,/ss I(H/14e2 h'~M' w/47/v... c:oap . 35.39.". III. ~ 50/4.5"4E. l'.: '" ffI ffI- , I r"'" I ~- ,- , ~J' ...,1,-; /~,,::,,' . I -1-- \- ! ~kJ.:;I A. ROAD ~ ~ ~ ~ lQ ~ 50' 50' J Y 281.00' - . " ,I I," ell ,,1 /:'1 ~' -7 ,_, ,_,...' 4or"....l,_ / ~c~ l/SS4827 liT 8l/tl iA ;4e. J /(i48.10 .v. '""- 503 g. 4/4 SCA~I J'; 100' "_" __ I EXHIBIT "A" L'I.. __ _ _ ____JJ J J . T SEWARD MARINE INDUSTRiAl PARK FOR SHORESIDE PETROLElJ1 dba HARBOR FUEL SERVICES Ravrnond M. Burgess RPLS 3753-5 Box 228, Sewerd,AIC 9966.. Ph. 907-22"-3026 Job No1235-88 CITY OF SEWARD, AI..1&A August I 988