Loading...
HomeMy WebLinkAboutRes1986-032 . . . . . CITY OF SEWARD, ALASKA RESOIDTION NO. 86-32 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE ISSUANCE OF A SUBSTlTUI'E LEASE FOR CCM1ERCIAL WATERFRCNr BOAlIDVALK SITE NO. 3 m THE SMALL BOAT HARBOR TO TRAILS NORI'H, me. WHEREAS, the Seward City Council previously held public hearings and approved the issuance of a lease to Trails North, Inc., for the oonstruction of a oomrercial building and operation of a gift shop and bus tour business ~ and WHEREAS, the original intent of the lease was to have the lessee oonstruct the buildings with the cost being credited against the lease for up to a period of three years and the City retaining ownership of the building~ and WHEREAS, it appears that this is not a workable arrangerrent for either the lessee or the City~ and ~7HEREAS, the City intent is not to cwn. buildings and rnake large sums of money on leases, but to enoourage economic grCMth within the oommmity and to build a viable tax base through prosperous business developrrent~ NCW, THEREFORE, BE IT RESOLVED BY 'IHE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is hereby authorized to substi- tute the attached lease in place of that lease approved by the Council on June 24, 1985, with Trails North, Inc. The attached lease is inoor- porated herein by reference as a part of this resolution. Section 2. This resolution shall take effect thirty (30) days following its adoption. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 14 day of April , 19 86 THE CITY OF SEWARD, ALASKA ~e -4w~b HARRY GIESELER, MAYOR -1- . . . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 36-32 AYES: NOES: ABSENT : ABSTAIN: ATI'EST: BOOHER, GIESELER, GILLESPIE, HILTON, MEEHAN, SCHOLL & SIMUTIS NONE NONE NONE APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, PCMELL AND BRUNDIN, Attorneys for the City of Seward, Alaska (City Seal) 7~ aI~_ Fred B. Arvidson, City Attorney -2- . . . . . LEASE- AGREE1-1ENT This Agreerrent made and entered into this day of , 1986, by and between the CITY OF SD1APD, a horre rule municipal corporation located in the Kenai Peninsula Bor- ough, State of Alaska, hereinafter referred to as "City" and Trails North. Inc. hereinafter referred to as "Lessee". WIT N E SSE T H: ~1HEREAS, City and Lessee are Im.ltually interested in the developrrent of harbor related facilities in the anall Boat Harbor area within the City of Seward, Alaska~ and ~lHEREAS, Lessee has derronstrated to City an intention to expand and develop a cornrercial waterfront visitor-related business~ and ~'iHEREAS,' the City has received a proposal from Lessee for developrrent of City ONl1.ed land ~ and WHEREAS, City, as expressed more fully in City Council Resolu- !I , has detemined that Lessee's intentions and general tion No. developrrent plans coincide with the public interest of the City and will I " II provide increased tax revenues and rental incorre to the Ci ty ~ and WHEREAS, City and Lessee have reached agreement on the land City is to lease to Lessee, the general terms and conditions of such a lease~ FOR AND IN CONSIDERATION OF THE RENTS, COVENANTS, AND CON- DITIONS HEREIN CONTAINED, CITY AND LESSEE AGREE. AS :FOLI.aVS: ARI'ICLE 1. DEMISE. City leases to Lessee, and Lessee leases fran the City that certain real property herein called "Leased Land", situated in Seward, Alaska, consisting of approximately 900 square feet, -1- ?~ 1\:'. . . . . . " as shONl1. on Exhibit "A" attached hereto and as more particularly de- scribed as follONs: I; 'i :I " I I I I I I i I :I I :I ,I ! i Comrercial Lease Site No. 3 imrrediately adjacent to the Seward Small Boat Harbor Boardwalk between "B" and "D" Ramps, the Site to include use of a wood frame building. The Site is wi thin Block 6, Oceanview Subdivision. ARI'ICLE II. q:TY' S WARRANTY OF QUIEI' ENJOTIIJENT. Lessee, upon paying the rent and other charges herein provided for and observing and keeping the covenants, conditions and terms of this Lease on Lessee I s part to be. kept or perforrred, shall peacefully and quietly enjoy pos- session of the Leased Land -during the tem of this Lease without hin- drance by, fran or through City, subject, however, to any encumbrances created or caused by Lessee. ARI'ICLE III. LEASED LAND ACCIP'l'W "AS IS". Lessee acknowl- edges that he has inspected the Leased Land and accepts the same "as is" and without reliance on any representations or warranties of City, or II I agents of City, as to the physical condition thereof, except as express- ly herein provided. ARI'ICLE IV. USE OF LEASED LAND. 1. Lessee may use the Leased Land for the construction and operation of a gift shop and tour bus business Lessee understands that construction and operation of such a facility is a rnajor consideration for City's agreement to lease the Leased Land. Lessee .agrees that he will not operate any other business on the Leased Land without the consent of the City. fureover, City rnay withhold its consent as to any proposed business or activity which, in City's sole discretion, is not desirable or canpatible with the City's Small Boat Harbor area. -2- . . . ,I . . 2. No assignment or sublease shall be pemitted unless approved in writing by the City. Any sublease shall be expressly subject and subordinate to this lease and the rights of the City here- under. The City may elect to not approve any proposed assignment or sublease which rnay result in a business or activity which, in the City's sole discretion, is not desirable or canpatible with the City's Small Boat Harbor area. ARI'ICLE V. LEASE TERM. 1. Comrencement and Expiration. be ten (10) years, ccmrencing on The tem of this Lease shall and ending 2. Options and Extensions. There is a renewal option for Lessee to extend this lease for an additional three (3) year period, but by inaction of the parties, the lease shall be deemed to continue from month to month. This lease will not teminate until notice in writing is given by either party to the other, not later than three months prior to the expiration of the lease tem. 3. Holdover. If Lessee shall hold over after the expiration of the Lease Tem, such tenancy shall be from month to month on all the terms, oovenants and conditions of this Lease. 4. Surrender of Possession. (a) Subject to the provisions of Article XI below with respect to restoration of buildings and irrprovements, upon expi- ration of the Lease Tem, whether by lapse of time or otherwise, Lessee shall pranptly and peacefully surrender the Leased Land. (b) Upon the expiration of the Lease Tem or any sooner temination of this Lease, Lessee agrees to execute, acknowledge -3- . . . . . il :1 and deliver to City a proper instrurrent in writing, releasing and quit-claiming to the City all right, title and interest of Lessee 'I I ! I in and to the Leased Land and all irrprovements thereto not rerroved by Lessee as provided herein. ARI'ICLE VI. RENT. The rental for the Leased Land shall be determined and paid as folla.vs: 1. Any and all annual rental due under this Lease shall be paid in advance upon cormencerrent of this Lease in yearly installments on or before comrrencement of this Lease and on or before July 1 of each succeeding year, except as otherwise provided. 2. The rental shall be determined as follows: (a) The lease rate shall be $1500 per annum. (b) Should the City and Lessee IlUltuall y agree to extend I I i I I I I' i i the lease, not less than ninety (90) days prior to the expiration of the lease the City, at its 0Nl1. expense, rnay employ an indePen- dent appraiser to detemine the fair market rental value of the Leased Land at the highest and best use of the Leased Land and without consideration of Lessee's intended use of the land unless that use is coincidentally the highest and best use of the Land. 3. Additional Rent and City's Right to Cure Lessee's [)e- faults. All costs and expenses which Lessee assurres or agrees to pay pursuant to this Lease or to any m:>rtgage or other encurrbrance upon the Leased Land or Lessee's leasehold interest shall at City's election be treated as additional rent and, in the event of nonpayrrent, City shall have all rights and rerredies herein provided for in the case of nonpay- rrent of rent or of a breach of condition. If Lessee shall default in making any payrrent required to be rnade by Lessee, or shall default in -4- . . . . . perfoming any tem, covenant or oondition of this Lease or of any such mortgage or other encumbrance on the part of Lessee to be perforrred which shall involve the expenditure of money by Lessee, City at City's option may, but shall not be obligated to, make such payment or, on behalf of Lessee, expend such sum as may be necessary to perfom and fulfill such tem, covenant or oondition, and any and all sums so expended by the City with interest thereon at the rraxirmJm rate under the laws of the State of Alaska from the date of such expenditure until repaid, shall be (and shall be deerred to be) additional rent and shall be repaid by Lessee to the City, on demand, but no such payment or expenditure by the City shall be deerred a waiver of Lessee's default nor shall it affect any other rerredy of the City by reason of such default. 4. Late Payment Penalty. Rental payment due but not received by the due date shall be subject to a ten percent (10%) delin- quency fee plus one and one-half percent (l~%) sinple interest per month until paid or the maxirm.un permitted rate under Alaska law, whichever is higher. I ARI'ICLE VII. TAXES AND ASSESSMENTS. 11 I 1. Lessee to Pay Taxes. Lessee agrees to pay prior to I delinquency and directly to the taxing authorities in which the Leased Land is located all real property taxes (plus all personal property taxes on personalty situate on the Leased Land and placed thereon by Lessee or under Lessee's authority), sales taxes, _or other business or use taxes levied or assessed upon or against the Leased Land or any inprovements thereon or Lessee's business during the Lease Tenn. Lessee agrees to indemnify and hold City hamless from liability for any other . tax, charge, or assesSIrent of any kind or nature. Lessee shall, within -5- . . Ii II d II ,I '! " " <i II d i ': I I I II I . . . sixty (60) days after any such tax assesSIrent or other charge consti- tuting a lien on the Leased Land shall becane due and payable, produce and exhibit to City satisfactory evidence of payment. i '.; 2. Lessee to Pay Assessments. Lessee, during the lease agrees to pay directly to the PUblic authorities charged with tem, " I collection thereof any and all assessments levied on the Leased Land for a part of or all of the cost of any public work or irrproverrent assessed acoording to benefit found by the levying authority to accrue therefrom I ~! to the Leased Land, including any charges for anti-pollution, environ- mental, ecological or any other public purposes. If an option is given to pay such assessment (s) in installrrents, Lessee rnay elect to pay the same in installrrents, and in such case Lessee shall be liable only for such installrrents as shall accrue during the Lease Tem. 3. Proration of Taxes and Assessments. If Lessee 's obli- gation to pay taxes or assessments cOITllEIlces or ends during a tax year, such obligation shall be appropriately prorated with City bearing the remaining cost (or its pro rata share) thereof. 4. Lessee shall have the right to contest or Contest. review any tax, assessment, levy, fee, water or sewer charges or rents, or any other governmental charges which Lessee is obligated to pay. Such proceedings shall, if instituted, be conducted pronptl y at Lessee's 0Nl1. expense and free from all expense to City. Before instituting any such proceedings, Lessee shall pay under protest such tax, assessment, levy, fee, water or sewer rents or charges or any other governIrental charges, or shall furnish to City a surety canpany bond in a oonpany acceptable to City, or other security reasonaDl y satisfactory to City, sufficient to cover the anDunt of the contested item or items with -6- . . . . . interest for the period which such proceedings may be reasonably ex- pected to take and costs securing the paYrrent of such contested item or items and all interest and costs in oonnection therewith when finally detemined. Notwithstanding the furnishing of any such bond or securi- ty, Lessee shall pay all such items at least twenty (20) days before the time when the Leased Land or any part thereof might be forfeited. The legal proceedings herein referred to shall include appropriate cer- tiorari proceedings and aPpeals from any orders and judgerrents therein, but all such proceedings shall be begun as soon as reasonably possible after the inposition or assessment of any oontested items and shall be prosecuted to final adjudication with reasonable dispatch. In the event of any reduction, cancellation or discharge, Lessee shall pay the anDunt that shall be finally levied or assessed against the Leased land or adjudicated to be due and payable and, if there shall be any refund payable by the governrrental authority with respect thereto, Lessee shall I i I !I !I I I be entitled to receive and retain the same subject, ~ver, to appor- , tionment as provided in Paragraph 3 above during the first and last years of the lease tem. City at City's option may, but shall not be obligated to, contest or review by legal proceedings or in such other manner as rnay be legal and at City's 0Nl1. expense any tax, assessment, levy, fee, water or sewer rents or charges, or any other governmental charge aforementioned, which shall not be oontested or reviewed as aforesaid, and unless Lessee shall pronptly join ID such contest or review and pay all oosts therein, the City shall be entitled to receive and retain any refund payable by the governmental authority with respect thereof. -7- . . . I e . 5. Lessee to Pay Utility Charges. Lessee shall payor cause to be paid all charges for water, heat, gas, electricity, sewers, and any and all other utili ties used upon the Leased Land throughout the lease tem, including any connection fees. ARI'ICLE VIII. CONSTRUCTION BY LESSEE. 1. Lessee's Right to Build--General Conditions. Lessee shall have the right at any tirre and from time to tirre during the lease tem to construct, maintain, alter, remodel, reconstruct, rebuild and replace building (s) and other irrprovement (s) on the Leased Land, subject to approval of the City in confomi ty with the Small Boat Harbor Master Plan and the following oonditions: (a) The oost of any construction, reconstruction, demolition, or of any change, alteration or irrprovements, shall be II I I I I 1 I borne and paid for by Lessee. (b) The Leased Land shall at all times be kept free of rrechanic' s, materialmen 's, and any other liens, as hereinafter more specifically provided. (c) Any building contractors enployed by :Lessee or its sublessees shall be appropriately bonded for one hundred percen!: (100%) of the contract anDunt (s) by use of perfOTIllance and labor and material paYrrent bonds in the customary fom when cost of the work is over $10,000.00. Copies of all such bonds shall be fur- nished to the City prior to ccmrencement of construction. (d) Lessee, upon ccmrencement of permissible building or construction activities on the Leased Land, shall continue such acti vi ties through to conpletion with diligence and continuity. -8- e . . (e) Comrencement of construction shall rrean having materials and labor on site. COImEncerrent of construction shall take place within 90 days of the signing of this Lease and construction shall be conpleted within 90 days of corrrrencerrent of oonstruction. 2. Lessee's ONnership of Trade Fixtures, Machinery and Equipment. It is expressly understood and agreed that any and all trade fixtures, rnachinery and equiprrent of whatsoever nature at any time constructed, placed or maintained upon any part of the Leased Land by Lessee shall be and remain the property of Lessee or its tenants as their interests may aPpear and may be rerroved or replaced at any tirre during the lease tem, provided Lessee or its tenants repair any and all damage to the Leased Land resulting from such rerroval or replacement. 3. Lessee's Right to Rerrove Inprovements and ONnership Thereof. Lessee shall have the right to rerrove any buildings or im- provements constructed or placed upon the Leased Land by Lessee prior to the expiration of the Lease. lmy buildings or irrproverrents not rerroved prior to the expiration of the Lease shall becorre the property of the City without the payment of any compensation to Lessee. ARTICLE IX. LIENS. 1. Prohibition of Liens on Fee or Leasehold Interest. Lessee shall not suffer or pemit any liens to be filed against the fee of the Leased Land nor against Lessee's leasehold interest in the Leased Land nor against any buildings or irrprovements on the Leased Land by reason of any work, labor, services or materials supplied or claimed to have been supplied to Lessee or anyone holding the Leased Land or any part thereof through or under Lessee. . . -9- . . . e . 2. Rerroval of Liens by Lessee. If any lien shall be re- corded against the Leased Land, or any irrprovements thereof, Lessee shall cause the same to be removed, or, in the alternative, if Lessee in good faith desires to contest the same, Lessee shall be privileged to do so, but in such case Lessee hereby agrees to provide a surety bond from a surety licensed to do business in Alaska in a penal sum equal to one and one-half times the anDunt of the claim of lien, which bond shall guarantee the payrrent of the sum which the lien claimant has clairred, together with the lien claimant's reasonable cost of suit in the action. Lessee further agrees to indemnify, defend, and save the City hamless from all liability for damages occasioned thereby and shall, in the event of a judgerrent of foreclosure upon said lien, cause the same to be discharged and rerroved prior to the execution of such judgement. 3. Notice of Non-Responsibility. The City may, as contem- plated by Alaska Statutes 34.35.065 (as now enacted or hereinafter I I I I I arrended) give notice of non-responsibility for any irrprovements con- structed or rnade by Lessee on the Leased Land. ARTICLE X. INDEMNITY. Except for claims arising out of acts caused by the negligence of the City or its repres~ntatives, .Lessee agrees to protect, indemnify, defend and save harmless the City fran and against any and all liabi)i ty arising from acts or omissions of any nature whatsoever of Lessee I s officers, servants, enployees, contrac- tors, tenants, agents or invitees causing injury to or death of persons or loss of or damage to property during the Lease Tem, and from any expense incident to defense of and by the City therefran. If any action or proceeding is brought against the City by reason of any such occur- rences, the City shall notify Lessee in writing of such action or -10- . . . II I I - . proceeding, whereupon Lessee at Lessee's expense rnay elect to resist or defend such action or proceeding by oounsel approved in writing by the City, such approval not to be withheld unreasonably. ARI'ICLE XI. INSURANCE AND RESTORATION. 1. Liability Insurance. Lessee, during the Lease Tem, shall provide a certificate oj: insurance showing the City as co-insured in an amount of not less than $300,000 canprehensive general liability oover- age for premises operations, broad form property damage and personal injury. The minirm.un requirerrents in this section may be increased from time to time by the City in accordance with customs and usage for canparable property in the Seward rretropolitan area. 2. Fire and Extended Coverage Insurance. Lessee, during the Lease Tem, shall keep all buildings and improvements insured at its expense against loss or damage by fire and such other risks as may be included in the custanary fom of broad fom extended ooverage (which may exclude earthquakes), in an arrount, over and above any deductibles in the governing policies, of not less than the unpaid balance (s) due under any existing deed(s) of trust or mortgage(s) encurrbering the buildings or improvements or the City' s fees. 3. Blanket Insurance. Lessee may provide any insurance required by this Lease in the fom of a blanket policy, provided Lessee furnishes evidence satisfactory to the City indicating the coverage thereunder is at least equal to the coverage obtainable under a separate policy covering the Leased Land only. 4. Additional Named Insured~ Rights of ~rtgagees (Lenders) ~ Waiver of SUbrogation. All insurance policies required to be maintained by Lessee shall narre Lessee and the City as the insureds, as their -11- . . . . . respective interests rnay appear. All policies shall contain an agree- ment by the insurers that such policies shall not be cancelled without at least thirty days' prior written notice to the City, and certificates or copies of all such insurance policies shall be furnished to the City pronptly after the issuance thereof. 5. Restoration of Buildings and Inprovements. In the event of damage to or destruction of any of the buildings or irrprovements situated on the Leased Land, then from the insurance proceeds payable to Lessee, Lessee shall within ninety (90) days after payment of the insurance proceeds cornrence restoration of the buildings and irrprove- ments to their condition prior to such damage, provided, however, Lessee's obligation to restore will be limited to the insurance proceeds available to Lessee. All such insurance proceeds shall be deposited and held in trust with such bank having offices in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's mortgagee of the damaged property, and shall be made available to Lessee for its use in restoration or repair, as the case may be, of any damage or destruction to the buildings and irrprovements on the Leased Land. The proceeds of insurance shall be paid out by such tustee or mortgagee frcrn time to time on certification of the person having supervision of the work that the anDunt certified is being applied to the payment of the reasonable cost of such work. ARI'ICLE XII. CARE OF LEASED LAND, ACCESS OF THE CITY. 1. Care of Leased Land. Lessee at its 0Nl1. cost and expense shall keep the entire Leased Land and all buildings and inprovements \vhich at any time may be situated thereon in good, clean and tidy condition and repair during the Lease Tem. -12- . . . :\ , . . 2. Other Access Rights of the City. The City and its agents or representatives shall have the right to enter into and upon the Leased Land during reasonable hours for the purpose of inswcting the Leased Land and all buildings and irrproverrents thereon. 3. Avoidance of Prescriptive Rights. Lessee shall take such action as may be necessary to preserve the City's title and ownership of the Leased Land free and clear of any public or private rights of way, easements or other interests aaruired by prescriptive use or otheI:Wise than as pemitted under this Lease, including but not limited to the posting of thoroughfares, walkways and Parking areas so as to preserve the right of private ONl1.ership therein and prevent any adverse rights thereto accruing through prescriptive use or otherwise than as permitted hereunder. ARI'ICLE XIII. COMPLIANCE WITH LAWS. 1. Conpliance with Laws. Lessee shall conpl y with all applicable laws, ordinances and regulations of duly oonstituted public authorities nCM or hereafter in any manner affecting the Leased Lmd or any buildings, structures or irrprovements situated thereon, whether or not any such laws, ordinances or regulations which may be hereafter enacted involve a change of policy on the part of the gove:rnrrental body enacting the sarre. Lessee further agrees it will not pemit any unlaw- ful occupation, business or trade to be oonducted on said premises or any use to be made thereof contrary to any law, ordinance or regulation as aforesaid with respect thereto. 2. Contest. Lessee rnay by appropriate proceedings conducted at Lessee's 0Nl1. expense, oontest in good faith the validity or enforce- ment of any law, ordinance or regulation, provided Lessee diligently -13- . . . p.1rsues such contest to a final determination by a court, departrrent or governmental authority or body having jurisdiction thereof~ provided that if the City rnay become liable in any manner for damages, penalties, fines or costs by reason of Lessee's failure to conply with any such law, ordinance or regulation during Lessee's oontest thereof, then, as a condition precedent to the comrencerrent and continuation of such pro- ceedings, Lessee shall furnish the City such bond with oorporate surety as the City shall reasonably request to save hamless and indermify the City against liability for any such damages, penalties, fines or costs. At the option of the City, it may at its expense oontest the validity or enforcement of any such law, ordinance or regulation. ARI'ICLE XIV. EMINENT I:XM'UN. 1. Interest of Parties in Condermation. In the event the Leased Land or any part thereof shall be taken for public purposes by condermation as a result of any action or proceeding in eminent domain, or shall be transferred.in lieu of condermation to any authority enti- tled to exercise the POWer of eminent domain, the interests of the City and Lessee in the award of consideration for such transfer and the effect of the taking or transfer upon this Lease shall be as provided by law. . . In the event the extent of the taking rnakes irrpracticable the continued operation of the self service car wash, gas station and retail merchandise facility, upon written notification by Lessee this Lease and all of the right, title and interest thereunder of Lessee shall cease on the date title to such Land so taken or transferred vests in the con- denm.ing authority. -14- . . . 2. Partial Taking-Continuation of Lease. In the event the taking or transfer of a part of the Leased Land leaves the remainder of the Leased Land in such location and in such form, shape or size, or so accessible as to be effectively and practicably usable in the opinion of the Lessee and the City for the purpose of operation thereon of Lessee's business, this Lease shall teminate and end as to the portion of the Leased Land so taken or transferred as of the date title to such portion vests in the condenning authority and the conderming authority enters into possession but shall continue in full force and effect as to the portion of the Leased Land not so taken or transferred. ARI'ICLE YN. ARBITRATION. kny controversy or claim arising out of or relating to this - Lease, or the breach thereof, shall be settled by arbitration in accordance with the Unifom Arbitration Act of Alaska, and judgerrent upon the award may be entered in any court having jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three arbitrators in the City of Seward, Alaska, or with the consent of both parties in Anchorage, Alaska. ARTICLE XVI. DEFAULT AND REMEDIES. 1. Default and Temination. (a) If the rent or any other charge shall be 111 arrears for a period of thirty (30) days, or (b) If Lessee fails to take reasonable steps to keep and perfom any of the covenants or conditions of this Lease within thirty (30) days after written notice of default, or (c) If Lessee files a voluntary petition in bankruptcy or for reorganization under the bankruptcy laws or is adjudged a bankrupt by a court of canpetent jurisdiction, or . . -15- . . . Ii I i I I I . . (d) If lessee makes an assignrrent for the benefit of its creditors, or (e) If a receiver is appointed by a court of competent jurisdiction for Lessee's business and it be established in the receivership proceedings that Lessee is insolvent, or (f) If the leasehold interest hereunder is abandoned by Lessee, then City rnay at City's option at once without further notice to Lessee or any other person, terminate this Lease. Upon termination of this Lease as aforesaid, or at the expiration of this Lease and upon the temina- tion of said Lease by its terms, Lessee shall at once surrender pos- session of the Leased Land to the City and rerrove all Lessee's effects therefran and may rerrove all Lessee's buildings and other irrprovements, and Lessee shall have no further rights hereunder or with respect to the Leased Land. If such possession be not :irnrrediately surrendered, the City rnay forthwith enter into and upon and repossess the leased Land and expel Lessee or those claiming under Lessee without being deemed guilty in any manner of trespass and without prejudice to any rerredies which might otherwise be used for arrears of rent or preceding breach of covenant, and in such event Lessee expressly waives the service of notice of any intention so to terminate this Lease or to retake the Leased Land and waives service of any demand for payrrent of rent or for possession and for any and every other notice or demand prescribed by any law and hereby waives any claim for damages by reason of such repossession. 2. Reletting. At any tirre or from time to tirre after any such expiration or temination, the City may relet the Leased Land, or -16- . . . . . any part thereof, and any unleased buildings and irrproverrents, for such tem or terms (which may be greater or less than the period which would otherwise have constituted the balance of the tem of this Lease) and on such conditions (which rnay include concessions or free rents) as the City, in its discretion, may detemine and may collect and receive the rents therefor. The City shall ill no way be responsible or liable for 'I I I any failure to relet the Leased Land, or any part thereof, or for any failure to collect any rent due upon any such reletting. 3. Damages. No such expiration or temination of this Lease shall relieve Lessee of its liability and obligations under this Lease, and such liability and obligations shall survive any such expiration or temination. In the event of any expiration or temination, whether or not the Leased Land, or any part thereof, shall have been relet, Lessee shall pay to the City the net rent and all other charges required' to be paid by Lessee up to the time of such expiration or temination of this Lease, and thereafter Lessee, until the end of what would have been the tem of this Lease in the absence of such expiration or temination, shall be liable to the City for, and shall pay to the City, as and for liquidated and agreed current damages for Lessee's default, (a) the equivalent of the anDunt of the rent and charges which would be payable under this Lease by Lessee if this Lease were still in effect, less (b) The net proceeds received by the City from leasing or reletting the Leased Land and :i.nprovements thereon after de- ducting all of City's expenses in connection with such leasing and reletting, including, wi thout limitation, all repossession costs, -17- . . . il I , I I I e. . brokerage corrmissions, legal expenses, reasonable attorneys 1 fees, alteration costs, and expenses of preParation for such reletting. Lessee shall pay such current damages (herein called "deficiency") to the City monthly, and the City shall be entitled to recover from Lessee each monthly deficiency as the sarre shall arlse. At any time after any such expiration or temination, whether or not the City shall have collected any rronthly deficiencies as aforesaid, the City shall be entitled to recover fran Lessee, and Lessee shall pay to the City, on demand, as and for liquidated and agreed final damages for Lessee 's default, an anDunt equal to the difference between all rent reserved hereunder for the unexpired portion of the Lease Tem and the then fair and reasonable net rental value to the City of the Leased Land for the I I II I i I I I I I II I I same period. In the corrputation of such damages, the difference between an installment of rent becoming due hereunder after the date of temina- tion and the fair and reasonable rental value to the City of the Leased Land for the period for which such installrrent was payable shall be discounted to the date of temination at the rate of six percent (6%) per annum. If the Leased Land, or any part thereof, be leased or relet by the City for the unexpired portion of the Lease Term, or any part thereof, before presentation of proof of such liquidated damages to any court, oommission or tribunal, the anDunt of rent reserved upon such leasing or reletting shall be prima facie evidence of the fair and reasonable rental value for the part or the whole of the p:r:-emises so leased or relet during the tem of the leasing or reletting. futhing herein oontained shall limit or prejudice the right of the City to prove and obtain as liguicc tee! (li'U,ny~s 'Jy reason of such temination all anDunt equal to the rnaxirm.un allowed by any statute or rule of law in effect at -18- . . . . . the tine when, and governing the proceedings in which such damages are to be proved. whether or not such ar:Dunt be greater, equal to, or less than, the amount of the difference referred to above. 4. Accumulation of Rerredies. Each right and rerredy of the City provided for in this Lease shall be cumulative and shall be in addition to every other right or rerredy provided for in this Lease or now or hereafter existing at law or in equity or by statute or other- wise, and the exercise or beginning of the exercise by the City of any one or more of the rights or rerredies 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 the City of any or all other rights or rerredies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. 5. Appointrrent of Receiver. Upon the corrnencerrent of any suit or action by the City against Lessee pursuant to any rerredy avail- able to the City upon Lessee's default hereunder or at any time there- after and during the pendency of such suitor action, any court of canpetent jurisdiction upon the application of the City may at once and without notice to Lessee, its successors or assigns, or any person or persons or tenant or tenants or mortgagee or person claiming any securi- ty interest through Lessee, appoint a receiver to collect the rents and profits arising out of the Leased Land, the buildings and irrprovements thereon and the subleases pertaining thereto and apply such rents and profits to the payment and satisfaction of Lessee's obligations under this Lease, including without limitation the payment of the rent due the Ci ty hereunder, first deducting all proper charges and expenses attend- ing the execution of such trusts, and to have any balance remaining held -19- . . . I 'I . . by such receiver for disposition in accordance with any judgement or decree entered therein or as may be from time to tirre directed by said court. ARTICLE XVII. GENERAL PROVISIONS. 1. EstoPpel Certificates. Either party shall at any tiIre and frcm time to tirre, upon not less than thirty days' prior written request by the other party, execute, ackna.vledge, and deliver to such party, or to its designee, a staterrent in writing certifying that this Lease ~s unarrended and in full force and effect (or, if there has been any arrendrrent thereof, that the same is in full force and effect as arrended and stating the arrendrrent or arrendrrents), 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. It is expressly understood and agreed that any such staterrent delivered pursuant to this section may be relied upon by any prospective assignee or tenant of the Leasehold Estate, or est.ates, or Lessee or any proSPective purchaser of the estate of the City, or any lender or prospective assignee of any lender on the securi ty of the Leased Land or the fee estate, or any part thereof, and any third person. 2 . Conditions and Covenants. All the provisions of this Lease shall be deerred as running with the Land, and shall be construed to be "conditions" as well as "covenants", as though the words specif- ically expressing or irrparting covenants and conditions were used in each seParate provision. 3. No Waiver of Breach. No failure by either the City or Lessee to insist upon the strict perfoTIllance by the other of any -20- . . I ]1 ! covenant, agreerrent, tem or oondition of this Lease or to exercise any . right or rerredy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreerrent, tem or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition,. agreerrent and tem of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach. 4. Time of Essence. 'T" ..l1lE is of the essence of this Lease and of each provision. 5. Corrputation of Time. The time in which any act provided by this Lease is to be done is 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. The term "holiday" shall rrean . all holidays as defined by the statutes of Alaska. 6. Successors in Interest. Each and all of the covenants, conditions and restrictions in this Lease shall inure to the benefit of and shall be binding upon the successors in interest of City and the authorized assignees, transferees, tenants, licensees and other succes- sors-in-interest of Lessee. 7. Entire Agreerrent. This Lease contains the entire agree- rrent of the parties with respect to the matters covered by this Lease, and no other agreerrent, statement or promise rnade by any party, or to any enployee, officer of agent of any party, which is not contained in this Lease shall be binding or valid. a. Governing Law. This Lease shall be governed by, con- . strued and enforced in accordance with the laws of the State of Alaska. -21- II I I . . . 9. Partial Invalidity. If any tem, covenant, oondition or provision of this Lease is held by a court of corrpetent 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, im- paired or invalidated. 10. Relationship of Parties. Nothing contained in this Lease shall be deerred 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 the City and Lessee~ and neither the rrethod of oorrputation of rent nor any other provisions contained in this Lease nor any acts of the parties, shall be deerred to create any relationship between the City and Lessee other than the relationship of lessor and lessee. . 11. Interpretation. The language in all parts of this Lease shall in all cases be sinply construed according to its fair rreaning and not strictly for or against the City or Lessee. Unless otherwise provided in this Lease, or unless the conta'tt otherwise requires, the follo.ving rules of oonstruction shall apply to this Lease: (a) Number and Gender. In this Lease, the neuter gender includes the rnasculine and the feminine, and the singular munber includes the plural~ the word "person" includes corporation, partnership, fim or association wherever the context so requires. (b) Mandatory and Pemissi ve. "Shall", "will" and "agrees" are mandatory~ "may" is permissive. (c) Captions. Captions of the Articles, 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, -22- Ij " . . . modify, amplify or aid III the interpretation, construction or meaning of the provisions of this Lease. 12. Arrendrrent. This Lease is not subject to arrendment except in writing executed by all parties hereto. 13 (a) . Delivery of Notices and Rent--Method and Time. All notices, demands or requests from one party to another shall be de- livered in person or be sent by mail, certified or registered, postage prepaid, to the addresses stated in this Section, and shall be deemed to have been given at the time of delivery or making. 13 (b). Payrrent of Rent. All rents and other sums payable by Lessee to the City shall be by check, payable to the City, delivered in person or mailed to the City at the following address: . City Clerk City of Seward PO Box 167 Seward, AK 99664 and shall be deerred to have been paid when received at such address. 13(c). Notices to the Ci ty . All notices, demands and requests from Lessee to the City shall be given to the City at: City Clerk City of Seward PO Box 167 Seward, AK 99664 and to such other persons at such additional addresses as the City may specify, but not exceeding four in the aggregate. 13 (d) . Notices to Lessee. All notices, demands or requests from the City to Lessee shall be given to Lessee at: . -23- . . . . . 13 (e). Change of Address. Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this Section. 14. Broker's Comnission. Each of the parties represents and warrants that there are no claims for brokers' ccmnissions or finders' fees in oonnection with the execution of this Lease. 15. Attorneys I Fees. If either party hereto institutes any suit, action or arbitration proceeding to oollect the rent reserved or to enforce any covenant or agreement hereof or to obtain any of the rerredies herein provided, the prevailing party shall be entitled to such sum of money as the court or the arbitration board may adjudge reason- able as costs and attorneys' fees in such suit, action or arbitration proceeding, including any appeal taken by either party in such suit, action or arbitration proceeding. 16. Reoords. Lessee shall at all times keep or cause to be kept proper books of record and account in which full, true and correct entries will be rnade of all dealings or transactions of or in relation to the Leased Land. 17. Minerals. Nothing in this Lease shall m:thorize Lessee to exercise any rights in regard to oil, oil rights, minerals, mineral rights, natural gas, natural gas rights, and/or other hydrocarbons by whatsoever name that may be within or under the Leased Land. The City reserves the right to whipstock or directionally drill and mine from land other than the Leased Land oil or gas wells, tunnels and shafts into, through or across the subsurface of the Leased Land, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, -24- . . . Ii " 'I i . . retunnel, equip, rnaintain, repair, deepen and operate any such wells or mines, without, however, the right to disturb the use of the surface or to drill or mine through the upPer 500 feet of the subsurface of the Leased Land. 18. Good Faith. The terms of this Lease inpose an obligation of good faith on the City and Lessee in the perfoTIllance and enforcerrent thereof. 19. Election to Teminate by Ci ty . Lessee, as partial consideration for this Lease , expressly undertakes (1) to build a conces- sion shop not to exceed 16 feet by 14 feet~ (2) to cover the remainder of the lease site with a boardwalk connecting with adjacent sites and the City boardwalk~ (3) to allo.v no outside storage on site~ (4) to allow no overnight occuPanCY; (5) to operate said facility for a rninirm.un of a 90-day period annually. If Lessee fails to rreet any of these requirements in a timely manner, the City may, by giving written notice to Lessee, elect to teminate this Lease. All further rights, duties and obligations hereunder shall cease upon receipt by Lessee of such notice. 20. Election to Teminate by Lessee. Ii: an earthquake occurs during the term hereof, making the oonstruction, financing, rnaintenance or operation of an irrproverrent (s), building (s) or other structure (s) on the Leased Land inpractical or inpemissible, then in such event, provided .the Lessee be in good standing hereunder, the Lessee rnay, in its uncontrolled discretion, elect to terminate this Lease upon: (a) Giving written notice to the City~ and -25- . . . . . il ,I (b) Making payrrent to the City of a sum equal to fifty percent (50%) of the rents payable to the City for the twelve calendar months irnrrediately preceding the notice under (a) ~ and (c) Satisfying or othexwise releasing the City's fee from any encumbrance(s) created as the result of Lessee's actions. All further rights, duties and obligations hereunder shall cease upon receipt by the City of such notice of election to teminate and the fulfilling of oonditions (b) and (c). Ii I I I I 21. Other Conditions. The City reserves the right to relo- cate the building at City expense should such a move be necessary to accanplish the overall Hamor Boardwalk Project. ARI'ICLE XVIII. RECORDING, EXECUl'ION, COON'I'ERPARl'S. 1. Recording. The parties may, concurrently with the execution of this Lease, execute, acknCllt-lledge and record a rremorandum of lease. FollCllt-ling reoording, the rremorandum lease shall be attached to this Lease. I I Ii II parties in two counterParts, each of which shall be deemed to be an Ii I I 2. This has been executed by the CounterParts. Lease original. 3. Execution. This Lease has been executed by the parties on the day and year first above written. LESSOR: LESSEE: THE CITY OF SEWARD, ALASKA By: . Ronald A. Garzini, City Manager By: I I 'I -26- . . . . . , I ATIEST: APPROVED AS 'ID FORM: HUGHES, THORSNESS, GANTZ, PCWELL & BRIJNDIN, Attorneys for the City of Seward, Alaska Linda S. Murphy, City Clerk Fred B. Arvidson, City Attorney II II I 'I i I 1 (City Seal) STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT THIS IS 'ID CERI'IFY that on this day of 19 , before rre, the undersigned, a Notary Public in and for the State of Alaska, duly oorrrnissioned and sworn as such, personally aPpeared , City Manager of the City of Seward, knONl1. to rre and to rre known to be the person who executed the foregoing instrument on behalf of the City of Seward, and who acknowledged that he signed the sarre freely and voluntarily for the uses and Purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and year first hereinabove written. I II :j I I i I i NarARY PUBLIC in and for Alaska My Corrmission Expires: STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT THIS IS 'ID CERI'IFY that on this day of , , 19 , before rre, the undersigned, a Notary Public in and for the State of Alaska, duly oonmissioned and sworn as such, personally appeared , knONl1. to rre and to rre knONl1. to be the person who executed the foregoing inst.rurcent, and who acknowledged that he signed the same freely and voluntarily for the uses and purposes therein oontained. -27- 1. " . . . IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and year first hereinabove written. NarARY PUBLIC in and for Alaska My Commission Expires: '! Ij 'J 'i 'i -28- . ;i i1 'I ,; q " 'I . - a: o 03, ~ r . .z~ -' -'-c:. ~~- - \ <:$>. \~ \~ , . "fl (J 0 ro c IS"" , "');:> , ,1>:;;- .J J: \~ 1- Vl ,\ ~ 0 ~ () ~ .')'2 J-P~ Ii. . \4' ct ~ ~ .. <:) \~ 'JI <:r ' ~ - \) ..---- <€' IY) - . . " o en caUl CC~ ... en $ Ul t-.cn 44 ~~ ~~ ...~ S~ en c C a ~ c "'c ~~ \II en ~ \ \ <:l ,~ \ \ ~ ~ -- '. o Cot ~ : ~ ~ ; .c (.) ,. ~ "'l , ~ N <::; - <::. - - - - ? " '\ -z,) d.. - - - - --