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HomeMy WebLinkAbout6.d. Community Center - Armory Lease Agreement EXECUTIVE SUMMARY City Council Regular Meeting: September 15, 2015 AGENDA ITEM: Community Center/Armory Lease Agreement AGENDA SECTION: Consent PREPARED BY: Dan Schultz, Parks and Recreation Director AGENDA NO. 6.d. ATTACHMENTS: Proposed Lease Agreement APPROVED BY: ddj RECOMMENDED ACTION: Motion to approve the 2015 - 2018 Armory Lease Agreement with the Minnesota State Armory Building Commission (MSABC). ISSUE The City of Rosemount has a lease agreement with the Minnesota State Armory Building Commission (MSABC) for use of portions of the National Guard Armory. The lease agreement outlines the portions of the Armory that the City will have access to. This arrangement has been in place for a number of years and has worked well for both parties. For the past few years we have been operating on a month to month lease with the MSABC. The MSABC has recently asked to the City to consider entering into a new agreement that includes a number of maintenance projects that need to be addressed at the Armory/Community Center. The maintenance projects are identified in section 11 subsections A – D. The lease agreement identifies the cost sharing plan for each improvement. Funding for the future projects will be proposed in the City’s Capital Improvement Plan (CIP). As outlined in the lease agreement, the City will pay a monthly lease fee of $1,400 to the MSABC. The lease payment allows the City access to the gymnasium, auditorium, and classrooms. The monthly lease amount has remained the same since the lease originated in the early 1990’s. The City Attorney has reviewed the proposed lease agreement and is comfortable with the document from a legal standpoint. SUMMARY The Parks and Recreation Department staff is recommending approval of the attached lease agreement with the Minnesota State Armory Building Commission (MSABC). 1 AGREEMENT BETWEEN THE MINNESOTA STATE ARMORY BUILDING COMMISSION AND THE CITY OF ROSEMOUNT TO LEASE SPACE WHEREAS, the Minnesota State Armory Building Commission, hereinafter referred to as MSABC, has constructed an armory in the City of Rosemount; and WHEREAS, Minn. Stat., Sec. 193.145, Subd. 5, anticipates that portions of such armory can be leased to other entities as long as such lease does not conflict with the lease to and use of the armory by the State of Minnesota for military purposes; and WHEREAS, the City of Rosemount, hereafter referred to as City, desires to utilize a portion of said armory; and WHEREAS, the MSABC desires to enter into an agreement with the City for the use of the armory when it is not being used for military purposes. NOW, THEREFORE, BE IT AGREED that the MSABC does hereby lease to the City, and the City does hereby accept lease of, that portion of the armory located in the City of Rosemount, also known as the Rosemount National Guard Training and Community Center as described on Attachment A hereto, on the following terms and conditions: 1. TERM: The term of this agreement shall be for two years and four months beginning October _____, 2015 and continuing to January 31, 2018, whereupon this lease shall continue on a month-to-month basis until canceled or modified in writing. Lessee agrees not to assign this lease or any portion thereof without first obtaining the written consent of the lessor. 3. CANCELLATION: The MSABC reserves the right to cancel this lease at any time in the event that an emergency arises that shall make necessary the use of this armory by the military forces for the State of Minnesota, and that no claims for any damage that may result to the City from any such cancellation shall be asserted or maintained against the MSABC. In the event of a cancelation, the MSABC will provide a written notification to the city. 2 2. PAYMENT: The City agrees to pay the MSABC the sum of One Thousand Four Hundred and no/100 Dollars ($1,400.00) each month. The amount is payable on an annual basis. All payments are to be made payable to the MSABC and mailed to Executive Director – MSABC, Veterans Service Building, 20 West 12th Street, St. Paul MN 55155. 4. LIABILITY: The MSABC shall defend, indemnify, and hold harmless the City, its officials, employees and agents, from any and all claims, causes of action, lawsuits, damages, losses or expenses, including attorney fees, arising out of or resulting from the MSABC’s performance of the duties required under this lease, provided that any such claim, damages, loss or expense is attributable to bodily injury, sickness, diseases or death or to injury to or destruction of property including the loss of use resulting therefrom and is caused in whole or in part by any negligent act or omission or willful misconduct of the MSABC. All such liability and indemnity shall be limited to the coverage provided by the MSABC’s insurance carrier, if any, and if no coverage is provided therefor, by limits imposed by Minn. Stats., Sec. 466.04. The City shall defend, indemnify and hold harmless the MSABC, its officials, employees and agents, from any and all claims, causes of action, lawsuits, damages, losses or expenses, including attorney fees, arising out of or resulting from the City’s performance of the duties required under this lease, provided that any such claim, damages, loss or expense is attributable to bodily injury, sickness, diseases or death or to injury to or destruction of property including the loss of use resulting therefrom and is caused in whole or in part by any negligent act or omission or willful misconduct of the City. All such liability and indemnity shall be limited to the coverage provided by the City’s insurance carrier, if any, and if no coverage is provided therefor, by limits imposed by Minn. Stats., Sec. 446.04. 5. COMPLIANCE WITH LAW: The City agrees to comply with all of the laws, rules and regulations of the United States and the State of Minnesota, and the rules and regulations of the 3 MSABC for the government and management of said armory together with all rules and requirements of the Police and Fire Departments of the City of Rosemount. Furthermore, the City shall obtain all permits or licenses required by any provision of law, municipal charter or ordinance for the conduct of programs and activities organized and managed by the City on the leased premises, and the MSABC and the State of Minnesota shall not be responsible for the City’s failure to obtain such permits and licenses or to comply with any other requirement imposed upon the City for the conduct of such activity. 6. VACATION: The City agrees to vacate the leased premises, remove debris and restore same to ordinary cleanliness within one week after cancellation of this lease unless a new lease or renewal period is negotiated. 7. ALLOCATION OF SPACE: MSABC shall have sole control and use of space designated ARNG as described in Attachment B. The City shall have sole control and use of the space designated City as described in Attachment B. MSABC and the City shall cooperatively share the space designated Shared as described in Attachment B. Operations and control of Shared space shall be subject to the terms described below in section seven of this agreement labeled schedule of use. 8. SCHEDULE OF USE: It is agreed and understood that the facility is primarily for use by the Minnesota National Guard and that military activities must take precedence over any use by the City. The City and the MSABC shall cooperate to avoid any conflicts between uses. The MSABC shall provide the City with a written schedule of its use of the armory’s shared facilities one year in advance. This schedule will become part of the lease. The City will incorporate this schedule into the City’s schedule. It is understood that the schedule may change from time to time, and the MSABC shall give reasonable notice to the City in such cases. If, for any reason, the schedule requires changing by the City, the City shall give reasonable notice to the MSABC. 4 9. OPERATING COSTS: On the basis of the space and time utilized under this and future leases with the City, the City will pay water, sewer, electricity, heating and other services and utilities associated with its use or lease of the facilities. The City will bill the State of Minnesota, Department of Military Affairs (State) for electric and gas usage on a monthly basis. The State shall be responsible for 70% of the electric bill, and 48% of the gas meter bill. The electric meter associated with the City sole use space shall be the full responsibility of the City. The City and the State will negotiate a Maintenance Agreement on an annual basis. The maintenance agreement shall outline respective routine maintenance responsibilities and costs for the facility. These responsibilities will include cleaning and routine maintenance duties for the building, mechanical air handler contract, chiller contract, janitorial supplies, and grounds keeping and snow removal. It is understood by the parties that other questions may arise during operation of the facility. Both parties pledge their cooperation to make this work for the public benefit. The parties agree to cooperate in every reasonable manner operate a facility that first and foremost shall be considered a military structure for use by the National Guard and, second, shall be considered a public facility for use by the public. The City agrees to make no change in the stage, curtains, electric wiring, fixtures or furnishings of those portions of the armory or shared spaces covered by the lease. The expense of any agreed upon changes shall be assumed by the City and shall include the cost of restoring the premises to its former conditions without damage. 10. MINOR REPAIR AND MAINTENANCE: The State of Minnesota, Department of Military Affairs shall be responsible for maintenance of any specially fenced secure area for military vehicles or any accessory building utilized to store government equipment, for all areas designated MNARNG sole use space as described in Attachment B, and shall be responsible for maintenance and repair of shared areas incident to and after use by the National Guard. The City shall be 5 responsible for maintenance of all City sole use space as designated in Attachment B, and shall be responsible for maintenance and repair of shared areas incident to and after use by the City or City generated lease of the building. The City shall have personnel on the premises at all times during City use or City generated lease of the building and shall be responsible for securing the building when personnel are not present. 11. CAPTIAL REPAIRS AND NON RONROUTINE MAINTENANCE: Each party acknowledges that certain nonroutine maintenance and capital repairs, including but not limited to roof repairs, mechanical repairs, and plumbing and wiring repairs will be necessary to maintain the building in a serviceable and desirable condition. Breakdown contributions for capital repairs and nonroutine maintenance to the building shall be subject to the following: a. ROOF REPLACEMENT: The facility contains approximately 114,337 square feet of roof. The city shall be responsible for full roof replacement costs of roof directly associated with City sole use space located in the upper level of the facility. As laid out in Attachment C, this will be the equivalent to approximately 46,245 square feet, or 39.6% of the total replacement cost. The State is responsible for full roof replacement costs of roof directly associated with ARNG and Shared space. As laid out in Attachment C, this will be the equivalent to approximately 69,092 square feet, or 60.4% of the total replacement cost. b. MECHANICAL REPAIRS: (HVAC/Installed mechanical equipment) The City shall be responsible for 36% of repairs to the HVAC and installed mechanical equipment that services the entire building. The State shall be responsible for 64% of repairs to the HVAC and installed mechanical equipment that services the entire building. The City shall be responsible for any mechanical upgrades solely beneficial to the designated City space as listed in Attachment B. 6 c. PARKING LOTS: As laid out in Attachment D, the south parking lot is the sole responsibility of the City, the east parking lot is the sole responsibility of the State, and the west parking lot is shared responsibility split equally between both parties. The south lot makes up 43% of the total bituminous parking space, the east lot makes up 33% of the total bituminous parking space, and the west lot makes up 24% of the total bituminous parking space. In the event of maintenance on the entire sum of the parking lot surface, the City shall pay 55% of the total cost of maintenance and the State shall pay 45% of the total cost of maintenance. d. DRILL FLOOR/GYNMASIUM: The City shall be responsible for fifty percent (50%) of all capital repairs and non-routine maintenance to the gymnasium/drill hall. The City shall be responsible for all maintenance and repair of damages directly incident to and after use by the City or City generated lease of the building The State shall be responsible for fifty percent (50%) of all capital repairs and non-routine maintenance to the gymnasium/drill hall. The State is responsible for all maintenance and repair of damages directly incident to and after use by the State use. Each party acknowledges that besides the aforementioned, there may be other unforeseen maintenance needs to arise. Both parties pledge their cooperation to resolve any additional needs or issues that arise with a mutually beneficial solution. 7 12. NOTICE: Any notices under this lease may be given to the MSABC by sending to: Executive Director Minnesota State Armory Building Commission Veterans Service Building 20 West 12th Street St. Paul MN 55155 and to the City by sending to: Rosemount Parks and Recreation Department Attn: Dan Schultz, Director of Parks and Recreation 13885 South Robert Trail Rosemount, MN 55068 13. INSURANCE: Each party shall maintain insurance on their property interests in the facility. IN TESTIMONY WHEREOF, both parties have hereunto set their hands and seals this _____ day of ________________, 201__. CITY OF ROSEMOUNT By: Its: By: Its: MINNESOTA STATE ARMORY BUILDINGCOMMISSION By: Its: By: Its: A ATTACHMENT A Schedule of City’s Anticipated and Requested Use of Facilities Schedule of Use: Area of Building: Dates and Time of Use: (1) Gymnasium, Gym Storage Sunday thru Saturday from 7:00 a.m. to NE corner and Locker Room 10:00 p.m. except where it conflicts with Areas those days scheduled as drill dates with the City. (2) Classrooms #204, 206, 208, Same as above 210, 212, 214, 215, 216, 221 and Auditorium and Auditorium Storage (3) Kitchen, lower level Same as above B-1 Attachment B-1 Upper Level Use Designation B-2 Attachment B-2 Main Level Use Designation B-3 Attachment B-3 Whole Facility Use Designation - By Square Foot and Percentage ARNG Use Space Main Level ARNG Total 32,814 Main Level Full Floor Total 77,390 Upper Level ARNG Total 33,382 Upper Level Full Floor Total 57,947 TOTAL 66,196 TOTAL 135,337 ARNG % of Facility use Space 48.91% City Use Space Main Level City Total 33,801 Main Level Full Floor Total 77,390 Upper Level City Total 14,677 Upper Level Full Floor Total 57,947 TOTAL 48,478 TOTAL 135,337 City % of Facility use Space 35.82% Shared Use Space Main Level Shared Total 10,775 Main Level Full Floor Total 77,390 Upper Level Shared Total 9,888 Upper Level Full Floor Total 57,947 TOTAL 20,663 TOTAL 135,337 Shared % of Facility use Space 15.27% C Attachment C Roof Replacement Designation ARNG – Approx. 69,092 Sq. ft. City – Approx. 45,245 Sq. ft. D Attachment D Parking Lot Designation