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HomeMy WebLinkAboutContract 20192019 GROUND LEASE Between CITY OF COLUMBIA HEIGHTS As Lessor and COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY As Lessee Dated as of September 1, 2007 This instrLUZlent was drafted by: KENNTDY ~ GRAVEN, (_TIARTF12FT7 (AJp) 470 U.S. Bank Plaza Mumeapolis, Mllulesota 55402 (612)337-9300 Errar! L~uka~awn document ~rrnperty name. THIS GROUND LEASE, dated as of Septembea• 1, 2007, by and between the CITY OF COLUMBIA I-SIGHTS, a home rule charter city and political subdivision of the State of Minnesota (the "City"}, as Lessor and the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a rr• t t r r•.• r r•~• t r__t~ _r~t__ c~,._~_ _rnnt____~_.__ i~~~r..t_,.... :,.t_ panne nouy cuaToraie anu punt~c anu punucaa suvuavisioii ~a uie ~tatc ut ivtutucavta ~w~c~uGt vJnu ,ts successors and assigns as lessee hereundea•, the "Authority"), as Lessee. WITNESSETH: In consideration of the anutual covenants hereinafter set forth, the parties hereto agree as follows: ARTICLE I llemise Of Sites And Warranties Section 1.01. Demise. Subject to and upon the teens, conditions, covenants and undertakings hereinafter set forth, the City hereby leases alld pemuts the use to, and the Authority hereby leases from the City, the property described in Exhibit A attached hereto, located in Anoka County, Minnesota (hereinafter called the "Sites"), subject to the reservation of easements described in Section 4.05 hereof.. Section 1.02. Warranties. The City covenants and wan°ants to tl~e Authority: (1) That the City has good and marketable title to the Sites, has authority to enter into, execute and deliver this Ground Lease, has duly authorized the execution. and delivery of t1~is Ground Lease and has duly executed and delivered this Ground Lease; (2) That the Sites are not subject to any dedication, easement, right-of--way, reservation in patent, covennlt, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the constnaction of certain muiueipal liquor store facilities (hereina.fter called the "Facilities"} on the Sites, as contemplated by that cea~tain Lease-Purchase Agreeanent by and between the City and the Authority of even date herewith (hereinafter called the "Lease"); (3) That all taxes, assessments or impositions of any kind with respect to the Sites, except current taxes, have been paid in full; (4} That the Sites are properly zoned for the puapose of the Facilities; and (~} That the City has authority to enter into, execute and deliver the Lease, has duly authorized its execution alid delivery, and has duly executed and delivered the Lease. Section 1.03. Enviroiunental Covenants. To the best lc~~owledge of the City, without conducting investigation, (i} no dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances, as defined in or govenled by the provisions of any federal, state or local law, statute, code, ordinance, regulation, reduirement or aisle relating thereto (collectively, "Enviroiunental Regulations"}, and also including ureafonnaldehyde, polychlorinated biphenyls, Error! i;nknown document property name. asbestos, asbestos contailiing materials, nuclear fuel ar waste, radioactive mater-ials, explosives, carcinogens and petroleum products, or any other waste, material, substance, pollutant or eontan~~allt which would subject the owner of the Sites and the Facilities to any damages, penalties or liabilities under any applicable Environmental Regulation (collectively, "Hazardous Substances") are now or have been stared, located, generated, produced, processed, treated, transported, incorporated, discharged, emitted, released, deposited or disposed. of in, upon, under, over or from the Sites or the Facilities u~ violation of any Environmental Regulation; (ii) no threat exists of a discharge, release or emission of a Hazardous Substance upon or from the Sites into the environment; (iii) the Sites have not been used as or for a mine, a landfill, a dwnp or other disposal facility, an industrial or manufactiu-ing facility, or a gasoline service station; (iv) no underground storage tank is located at the Sites or has previously been located therein but leas been removed therefrom; (v) no violation of any Enviror~ineiztal Regulation now exists relating to the Sites or the Facilities, no notice of any such violation or any alleged violation thereof has been issued or given by any govei7unental entity or agency, and there is not now any investigation or repot-t involving the Sites or the Facilities by any goven~inental entity or agency wlueh in any way relates to I=lazardous Substances; (vi) no person, party or private ar govenzmental agency or entity has given airy notice of or asserted any claim, cause of action, penalty, cost or demand far payment or compensation, whether or not involving any injury or threatened injury to human health, the environment or natural resources, resulting or allegedly resulting from any activity or event described in (i) above; (vii) there are not now any actions, suits, proceedings or damage settlements relating in any way to Hazardous Substances, in, upon, under, ovei° or from the Sites, (viii) the Sites are not listed in the United States Environmental Protection Agency's National Priorities List of Hazardous Waste Sites or any other list of Hazardous Substance sites maintained by any federal, state or local governmental agency; and (ix) the Sites are not subject to arty lien or claim for lien or throat of a lien in favor of any govei-riinental entity or agency as a result of ally release or theatened release of any Hazardous Substance. The City shall not store, locate, generate, produce, process, treat, transport, incorporate, discharge, emit, release, deposit or dispose of any Hazardous Substance in, upon, under, over or from the Sites or the Facilities in violation of any Environmental Regulation, shall not permit any Hazardous Substance to be stored. located, generated, produced, processed, treated, transported, incorporated, discharged, emitted, released, deposited, disposed of or to escape therein, thereupon, thereunder, thereover or therefrom in violation of any Envirormlental Regulation, sha1.1 cause all iazardous Substances to be properly removed therefrom and properly disposed of in accordance with all applicable Environmental Regulations, and shall not install or pei~nit to be installed airy underground storage tank therein or thereunder in violation of any Environmental Regulations wlueh are applicable to the Sites and the Facilities. In the event any Hazardous Substance is found upon, under, over or from the Sites or the facilities in violation of any Enviroiunental Regulation or if any lien or claim for lien ilz favor of any govermnental entity or agency as a i°esult of any i°elease of airy Hazardous Substance is threatened, the City, at its sole cost and expense, shall, within ten days of such finding, deliver written notice thereof to the Authority and the Trustee (as defined in the Lease} and shall promptly remove such Hazardous Substances upon, under, over or from the Sites or the Facilities and prevent the imposition of any liens against the Sites or the facilities far rho cleanup of any Hazardous Materials. Such removal shall be conducted aid completed in compliance with all applicable F,n•or! rlnCaiown document property name. 2 federal, state and local laws, regulations, rules, ordinances and policies, in accordance with the orders and directives of all federal, state and local goverlimental authol•ities. In the event the City has not removed such Hazardous Substances within. a time period deemed reasonable by the Tnistee, the City shall, a.t the written direction of the Trustee, take such remedial action as the Trustee shall direct. In the event the City shall not comply with the written directions of the Trustee within the tinge flame established within its written directions, the City hereby grants to the Authority alzd the Trustee an irrevocable license to remove Hazardous Substances from, repair, clean up, and detoxify the Sites and the Facilities and agrees to reimburse the Authority and the TI-ustee far all of their costs therefor. The City reserves the right to recover from responsible third parties all costs or 1°eimbursements paid by the City under this Section L03. The City further agrees, to tl~IC extent pel-lnitted by Mi1~l~esata law, to reill~burse the Authority and the Trustee for any and all claims, demands, judgments, penalties, liabilities, costs, damages and. expenses, including court costs and attorneys' fees directly or indirectly incurred by the Authority and the Trustee (prior to trial, at trial and on appeal} in any action against or involving the Authority or the Trustee, resulting fi om any breach of the foregoing covenants, or from the discovery of any Hazardous Substance, in, upon., under ar over, or emanating from the Sites or the Facilities, whether or not the City is responsible therefor, it being the intent of the City, the Authority and the Trustee that the Authority and the Trustee shall have no liability or responsibility for damage ar injury to hmnarl health, the envirornnent or natural resources caused. by, for abatement and/or clean up of, or otherwise with respect to, Hazardous Substances by virtue of the interests of the Authority and the Trustee in the Sites and the Facilities pursuant to this Ground Lease, or hereafter created, or as the result of the Authority or the Trustee exercising any of its or their rights ar remedies with respect thereto hereunder or under a1~y other instrulnPnt, including but not limited to beconung the owner thereof by foreclosure or conveyance in lieu of foreclosure. The foregoing representations, warranties arld covenants of this Section shall be deemed continuing covenants, representations arld warranties for the benefit of the Autlror•ity and the Trustee, including but not limited to any purchaser at a foreclosure sale, any transferee of the title of t11e Trustee or any other purchaser at a foreclosure sale, and any subsequent owner of the Sites or the Facilities, and shall survive the satisfaction or release of this Ground Lease, a1~y foreclosure of a mortgage lien under the Indel~t:ure ar a.ny other itastr•ument, and/or any acquisition of title to the Sites or the Facilities or airy pa1-t thereof by the Aufliohity ar the Trustee, by deed in lieu of foreclosure of otherwise. Any amounts covered by the foregoing shall bear interest from the date incurred at the rilaXirl2:itln rate pe17311tted by law al2d Siiall be paj%abie On derTiarld. ART][CL)~+ I][ TCYTiI Allt~ Retlt Section 2.01. Term.. The term of this Ground Lease shall commence as of the day arld year f rst above written, and shall end on the date the term of this Ground Lease is terminated in aceordarrce with Section 3.01. hereof. Section 2.02. Rent. Tl~e rent for the entire term of this Ground Lease shall be C7ne Dollar ($1.00}, payable in one insta.Ilment i1i advance on the Closing Date, as defined ir7 the Lease. Error! Cinknown document property name. j ARTICLE III Termination Section 3.01. Ter2uilation. Subject to the other provisions of this Ground Lease, this Ground Lease shall terminate upon the occurrence of any one of the following events: (1) The earlier of September 1, 2057 or the date on which the City has paid all Lease Payments owing by the City as lessee under the Lease. (2) The exercise by the City of its option to prepay the Lease Payments and all other sums due in accordance with the terms a22d conditions of the Lease. (3) The termination of the Lease Term by the City for non-appropriation pursuant to Section 5.6 of the Lease and the receipt by the Authority of a2nounts fram the sublease or other disposition of the Authority's interest in the Sites and the Facilities sufficient to: (a) Reimburse the Authority for all administrative costs and expenses, including reasonable attorneys' fees, incurred by the Autharity as a result of the termination. of the Lease Tern and the sublease or sale of the Authority's interest in the Sites aild the Facilities; and (b) Reimburse the Authority for all capital costs and expenses in any 2nanner incurred by the Authority with respect to preparing the Sites and the Facilities for sublease for commercial or other ].awful purposes (as used in this Ground Lease, the right to sublease the Sites includes the right to sell all leasehold interests in the Sites); al7d (c) Pay to the Authority the unpaid principal of and 2~terest on the Bonds descr2bed 122 the Lease, (4) The termination of the Lease Tenn upon t11e occurrence of an Event of Default by the City under Article X of the Lease and the receipt by the Authority of am~our~ts from the sublease or sale of the Authority's interest i21 the Sites and the Facilities sufficient to: (a) Reimburse the Authority for all administrative costs and expenses, including reasonable attorneys' fees, incurred by the Autharity as a result of the Event of Default and the termination of the Lease and the sublease or sale of the Authority's interest i2z the Sites and the Facilities; and (b) Reimburse the Authority for all capital costs and expenses in any manr2er incurred by the Authority with respect to preparing the Sites and the Facilities for sublease far commmercial or other lawful purposes; and Errors Linkno~~n dncE~ment property name. (c} Pay to the Authority the unpaid principal of and interest on the Bonds described in the Lease. The amounts referred to in paragraphs (a), (b) and (c) of Subsection 3.01(3) or 3.01(4}, as applicable, are hereinafter referred to as the "Reimbursement Amount." Section 3.02. Use of Revenues. After termination of the Tenn of tl~e Lease by the City because ofnon-appropriation pursuant to Section 5.6 of the Lease or termination of the Tern of the Lease upon the occurrence of an Event of Default under Article X of the Lease, revenues received by the Authority from the Sites and the Facilities as contemplated i11 Subsection 3.01(3) or 3.01(4} shall be applied as follows: FIRST An amount thereof equal to ongoing administrative costs and costs of operation of the Sites and the Facilities maybe retained by the Authority; SECOND Ail amount thereof equal to interest on the outstanding Reimbursement Amount at the ~°ate of 3.0 percent per aiulum may be retained by the Authority; and THIRD Any remaining amount thereof shall be retained by the Authority and credited to the payment of the Reimbursement Amount. Use of the Sites and the Facilities by the Authority or any affiliate of the Authority, other than for the purpose of assuming carit~•ol, malting any necessary changes in the Sites or the Facilities, and the initial subleasing thereof, shall be treated as the sublease thereof on a monthly basis at the then current monthly value. Section 3.03. Reports. h1 the event that the Tenn of the Lease is terminated by the City because of non-appropriation pursuant to Section 5.6 of the Lease or terminated by the Authority as a result of the occurrence of an Event of Default by the City thereunder, the Authority shall peep co~r~plete Gild accurate regards regarding any sublease of the Sites a~~d t1~e Facilities and shall, within sixty days after the end of each Fiscal Year of the City, deliver a written report to the City showing: (a) all amounts received by the Author-ity from any sublease of the Sites aJ1d the Facilities; (b) an analysis as to whether the Authority has received ille Reimbursement At`rioutit, with alI supporting calculations; and (c) the date, if any, during the next Fiscal Year of the City on which the Authority expects to receive the Reimbursement At110ltnt. Such. written report shall be verified by a certified public accountant or firm of certified public accountants not in the regular employ of the Authority. The City sha1111ave the right, at its own expense, to examine all of the Authority's records insofar as they relate to the Sites alid the Facilities. Such examination shall be made at the Authority's offices during normal business hours. Section 3.04. City's Option to Pay Reimbursement Amount. In the event that the Lease rI'ern is terminated by the City because ofnon-appropriation pursuant to Section 5.6 of the Lease or terminated by the Authority as a result of the oecui•rence of an Event of Default by the City thereunder, the unpaid balance of the Reimbursement Amount and any other payment required under Section 3.02 hereof may be paid by the City at any time. Upon such payment, this Czround Errors t'nkn~wn document property name. Lease and t11e Authority's interest u1 the Sites and the Facilities shall terlnirlate; provided, that if the Authority's interest in the Sites or the Facilities has been subleased to any sublessee pursuant to any sublease that is still in effect, this GroLmd Lease shall not terminate, but t11e Authority shall assign and Set OVer' t0 the ~;rty all Ot the AUt110rlty'S interest m Lrle ~1teS arlu talc i'aCilttiCS graiiwu uiiu<.i this Ground Lease, subject to all existing rights cs°eated ir~r the Sites and the Facilities by all such subleases, and the City shall be entitled to all rent paylments with respect to arly subleases of the Sites and the Facilities. Section 3.05. Effect of Ternination of Lease. hi the event that the Lease Tenn is terminated by the City because of non-appropriation pursuant to Sectionn 5.6 of the Lease or terminated by the Authority as a result of the occurrence of art Event of Default by the City the~reurlder, tine Cit;~ shall have r1o continuiing obligation under this Ground Lease after such termination, other than to eontillue to allow the Authority or the Trustee to continue to use and enjoy the Sites and the Facilities as provided herein. ARTICLE IV Use Of Sites; Additional Covenants Section 4.01. Use. The Authority shall not use or permit the use of t11e Sites for any ulnlawful propose. Section 4.02. Guiet Enjoyment. The City covenants that upon the Authority's paying tine rent reserved herein, and performing all conditions and covenants set forth in this Ground Lease and the Lease, the Authority shall and may peaceably have, hold and enjoy the Sites for the terln of this Ground Lease. The Authority covenants that upon expiration of this Ground Lease, it shall give the City peaceable possession. of the Sites, together with the Facilities and arly other improvements constructed thereon pursuant to the Lease. Section 4.03. Assi_gnlnent and Subletting. The Authority shall have the right to assign. its interest in this Ground Lease, and to sublet the Sites in accordance with the Lease. Specifically, on the date of execution of this Ground Lease, the Authority shall assign all of its right, title and interest hereunder to the Trustee n~~ned i11 the Lease, and the City hereby consents to such assignment. From and after such assigmnent, all references herein to the Authority s11a11 be deemed to be references to the Trustee. Section 4.04. Additional Covenants. In the event that any person or entity, however organized (other than the Authority or arly assignee of the Authority), shall be determined to hold any interest other than art easement that in any manner affects the City's good and marketable title to the Sites, the City shall use its best efforts to acquire the interest so held, such acquisition to be made at the City's sole cost and expense. The City hereby agrees to save and keep harnless the Authority, or any assignee of the Authority, fiom and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorrneys' fees, but only in tine event that litigation is actually commenced by tine Authority) of whatever kind arld nature, imposed on, irncuned by or asserted against the Authority, or arny assignee of the Authority, r~.rrort ~Inknown document prtrperty name. ~ that in any way relate to or arise out of the assertion of any interest affecting the City's goad and merchantable title to the Sites by any person or entity, however organized (other than the Authority or any assignee of the Authority}. Section 4.05. Reservation of Easement. The City expressly reserves easements over, Colder, across and through. the Sites, for access, parking and utility purposes, for the benefit of the property excepted from the description of the Sites i.n Exhibit A hereto. Such easement shall include the contilzuing right to use all driveway, walkway, access, parking and utility improvements and facilities presently Located on or under the Sites and the right to maintain, repair and replace stack improvements anal facilities. ARTICLE V Miscellaneous Section 5.01. Binding Effect. This Ground Lease shall be binding upon, and inure to the benefit of, the parties hereto, and their successors and assigns. Section 5.02. Certain Defined Terms. Unless the context hereof cleal-1y requires otherwise, capitalized teens used in this Ground Lease and defined in the Lease are used herein with the same measungs as set forth in the Lease. ("I`he remainder of thus page is intentionally heft blank.} En•or! Unknow~~n document protrerty name. IN WITNESS WHEREOF, the parties hereto Dave executed this Ground Lease as of the date first above written. ~.~ r CITY uFCC~LuiviisiAHEiGI-T5 ivliivrvESvTA STATE OF MINNESOTA ss COUNTY (JF ANOI~A The foregoing instrument was acknowledged before me this "7 day of °' ~~ ~ 2007 by Gary L. Petersan, the Mayor of the City of Columbia Heights, Miiulesota ALithority, a home rule charter city and political subdivision under the laws of Minnesota, by and on behalf of said authority. t - otary Public The foregoing instrument was acknowledged before me this °~ day of ~~'" ~r, 2007 by Walter R. Fehst, the City Manager of the City of Columbia Heights, Mimlesota, a home rule charter city and political subdivision under the laws of Minnesota, by and on behalf of said authority. ;- ¢[g ~q C a !"~: x al s,- _ _, Its Mayor-Gary ' .Petersan ~y ~ ~ fs~ ~~" Its City Manager-yam alter R. Fellst . -~ Notary Public Error! E~nknow^ doc~rment property name. COLUMBIA HEIGHTS ECONOMIC nrr.r~ ~rT /ITIT ~TrRTT tcl,l ~~ v ~i,vrivi~iv 1 1hUTHORITY ~°° ~'~ ~.,~._- ._.._.. Its President-G L. Peterson _~ Its Executive Director- alter R. Fellst STATE OF MINNESOTA ss COUNTY OF ANOKA The foregoing instrument was aclalowledged before me this ~~?~ day of e 'J B3~ ~` ~~t~^irrber, 200 7 by Gary L. Peterson, the Presideni of the Columbia Heights Econon:~~c Development Authority, a public body corporate and politic and political subdivision Linder the laws of Minnesota, by and on behalf of said authority. ~c- ~n STA T E OF iviii~I2vESO T A ss COUNTY OF ANOKA Notar P ltt y The foregoing instrument was acknowledged before me this _ day of ,~ ~~~°` •, 2007 by Walter R. Fehst, the Executive Director of the Columbia Heights Economic Development Authority, a public body corporate and politic and political subdivision under the laws of Mim~esota, by and on behalf of said authority. ~` ' ~>~ ~ %` ' 611 Notary Public Error! Linknorvn document property name. 4 EXHIBIT A LEGAL DESCRIPTIONS 0-F SITES 37th Avenue Liquor Store: Lots 2 and 2A, Bloclc 1, Hart Lalce Addition., according to the plat thereof on file in the Office of the Registrar of Titles and the Office of the County Recorder in and for r"~nol<a County, Mi~~desota Lot 2, Bloclc 1 is registered property Central Avenue Liquor Store: Lot 19, Revised Auditor's Subdivision No. 15, according to the plat thereof on file in the Office of the Registrar of Titles and the Office of the County Recorder in anal for Anoka County, Minnesota Error! L?nknos~~n document property name. ( Q