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HomeMy WebLinkAbout5.e. Old City Hall Lease / Purchase Agreementi"44 April 4, 1987 TO: Mayor Knutson' Councilmembers: Napper Tucker Walsh Willard �ty o� osernount CLERK'S FILE 9 l- 0 7 2875 -145TH ST. W ROSEMOUNT. MINNESOTA 55068 612--423-4411 FROM: Stephan Jilk, Administrator/Clerk RE:_ Old City Hall Lease/Purchase Agreement - Dakota County AVTI Gentlemen: Attached is the final draft of lease/purchase agreement for the old city hall with Dakota County AVTI. The basic content of the agreement has not been changed from the last draft you received, butthedocument has been revised in order that it hopefully reads a little better. I would like to review the highlights or majorpoints' of the agreement for you: (1) The agreement is for three years commencing July 1, 1987 and terminating July 1 1990. There is no method set out inthis agreement to automatically extend it. The purpose of this was to place some pressure on AVTI to conclude the purchase. (2) The lease payments are $2500 a month, and AVTI'is to pay all utilities and is responsible ,for general maintenance of all the property except the ballfield and the grass area south of the ballfield and west of city hall. (3) The city will have the use of the ballfield and the grass area until the property is sold. (4) Up to 15 months ($37,500) of lease payments may be used as credit toward a purchase price of $270,000. A decision and notification to us must'be made within six months of July 1, 1990 if they are going to purchase. (5) The city retains a one acre easement in the northwest corner of the property for the location of the civil defense siren and a water system. We will also receive an access easement to that one acre. This one acre must be maintained by us if we locate the water system there. (6) We must provide potable water to the facility. If the property is purchased we are obligated to either drill a new well, build a new water supply system or connect the building to a third source; i.e. university system. I recommend that we begin immediately to do this and not wait until the AVTI purchases the property. CLR 's LE 19 8? p Old City Hall Agreement April 3, 1987 Page 2 (7) The civil defense siren has to be moved to the one acre site at our cost. AVTI will do as much of the work, at no cost to us, as they can through their lineman program. (8) AVTI will pay the cost of all required insurance for the property either through us or directly, except for the one acre site if we build a rural water system there. (9) Cost of capital improvements not covered by insurance; i.e. roof, boiler, etc., will be borne in the following manner: 1st year of agreement -- 100% city 2nd year of agreement -- 50% city; 50% AVTI 3rd year of agreement -- 100% AVTI. The rest of the contract is basic contract language. I feel the agreement is a good one. We've done a couple of things which we may not have if this was through a private party; but on the same hand, we have a responsible buyer with no problems on zoning or use (which is set out specifically in the agreement). I recommend we approve the agreement. I will be pleased to receive your comments or questions on this matter before or at the Council meeting. In expectation of approval by you, Don McGuire will be present at our meeting to present the original document for signature. I believe he is doing this as a "formalization" of the discussions on the contract since he has been dealing with me up to this point and wants to make just a few comments to you all as officials of the city. Respe tfully, Ste an Jilk Administrato /Clerk smj Attachment CLEWS 1987 07 3/25/87 LEASE/OPTION TO PURCHASE AGREEMENT THIS AGREEMENT is entered into between the City of Rosemount, a Minnesota municipal corporation, as Lessor (hereinafter referred to as "Lessor"), and Dakota County Area Vocational Technical Institute Intermediate School District 917, as Lessee (hereinafter referred to as "Lessee") in consideration of the convenants herein contained, as follows: 1. DESCRIPTION OF PROPERTY - Lessor hereby leases to said Lessee that certain land and premises lying in the County of Dakota, State of Minnesota, generally known as the old city hall, legally described as follows: The SW1/$ of the SE1/4 of the NEI/4, Section 27, Range 115, Township 19, except the South 230 feet of the West 225 feet thereof. As used herein the term "premises" refers to the real property above described and to any improvements located thereon from time to time during the term hereof. The existing building consists of approximately 8,000 square feet. 2. TERM - This lease shall be in effect for a period of three (3) years, commencing on July 1, 1987 and terminating on June 30, 1990• 3. RENT - The Lessee agrees to pay Lessor as rent for said land and premises for the full term hereof, the sum of -1- ci.IMIs 1'9 8? 0 7 Thirty Thousand and no/100 Dollars ($30,000.00) per annum in equal monthly installments of Two Thousand Five Hundred and no/100 ($2-,500.00) payable in advance on the first day of each and every month for and during the full term hereof. Lessee at its option may prepay rent. 4. UTILITIES - The Lessee agrees to promptly pay all costs of electricity, gas, oil, sewer, water, and other uti- lities as may be provided to such leased land and premises. 5. SUBLETTING AND ASSIGNMENT - The Lessee may sublet the premises in whole or in part, but the making of a sublease shall not release the Lessee from, or otherwise affect in any manner, any of the Lessee's obligations under this agreement. The Lessee shall not assign, transfer, or sublet this lease, or any interest herein, without the prior written consent of Lessor. Said consent shall not be unreasonably withheld, and a consent to an assignment shall not be deemed to be consent to any subsequent assignment. Any assignment without such consent shall be void. 6. USE OF LEASEHOLD - During the term hereof, the Lessee shall comply with all applicable laws affecting the leased land and premises. The leased land and premises shall not be used for any unlawful purposes by the Lessee or any sublessee. The premises shall be.occupied and used pri- marily as a day care facility to service students, faculty and staff of Dakota County Technical Vocational Institute. The intended use by Lessee is the operation of a childcare -2- CLERKS FILE 07 facility, with a maximum of approximately 140 slots. 7. RIGHT OF ENTRY - The Lessor, its employees and agents shall have the right to enter upon the leased land and premises at all reasonable times with the Lessee's per- mission for the purpose of inspecting it or carrying out its other responsibilities under this lease. The Lessor in making any such entry shall not disrupt the Lessee's use of the leased land and premises. 8. QUIET ENJOYMENT - The Lessor agrees that the Lessee, on performing the covenants herein, shall and may peaceably and quietly have, hold and enjoy the leased land and premises for the term hereof, except as otherwise pro- vided in this lease. 9. MAINTENANCE OF THE LEASEHOLD - The Lessee shall be responsible for the normal operation and maintenance of the leased land and premises, except as otherwise provided in paragraph 11 hereof. 10. ALTERATIONS; IMPROVEMENTS - (a) Alterations, improvements, and changes permitted. The Lessee shall have the right to make such alterations, improvements, and changes to the building from time to time as it may deem necessary; provided that prior to making any structural alterations, improvements, or changes, the Lessee shall obtain Lessor's written approval of plans and specifi- cations therefor, which approval Lessor shall not unreaso- nably withhold. In the event of disapproval, Lessor shall -3- c RKS 19 87 4 7 give to the Lessee an itemized statement of reasons there- for. If Lessor does not disapprove the plans and specifica- tions provided for in this paragraph within thirty (30) days after the same have been submitted to Lessor, such plans and specifications shall be deemed to have been approved by Lessor. The Lessee shall in no event make any alterations, improvements, or other changes of any kind to any building on the premises that will adversely affect the structural integrity of the building. (b) Removal or replacement. At the expiration or other termination of this lease, the Lessee shall have no obligation to remove or replace any alterations, improve- ments or changes to the leased premises or, except as other- wise provided in the case of injury or damage, to return the premises to their original condition at the commencement of the lease. (c) Disposition of new improvements. Except as other- wise specified herein, all alterations, improvements, changes, or additions made in or to the land and premises shall be the property of Lessor, and the Lessee shall have only a leasehold interest therein, subject to the terms hereof, except as otherwise agreed to in writing by the par- ties at the time of the modifications. The Lessee may remove any property installed by Lessee in the nature of equipment or fixtures, which may be removed without adver- sely affecting the structural integrity of the building, -4- GIRO l 9 8 7 FILE 0 provided that the Lessee shall repair any damages caused due to the removal of fixtures or equipment. 11. DAMAGE, REPAIRS AND DESTRUCTION OF THE PREMISES - (a) Damage and Repairs. The Lessee assumes respon- sibility for loss, damage, or injury to the leased premises caused by its officers, employees, invitees or others in connection with the Lessee's activities, or by its occupancy of the leased premises, other than by reasonable wear and tear, and except for casualty losses subject to property and casualty insurance losses insured by the Lessor, or major capital expenditures as provided in paragraph (c) hereof, and subject to repair by the Lessor as provided in paragraph (b) and (e) hereof. Upon the expiration or termination of this lease as provided herein, the Lessee shall return the property herein described to the Lessor and the Lessee shall repair such damage or injury to the premises, other than ordinary and reasonable wear and tear. (b) Destruction. If during the term hereof the leased premises or the improvements thereon shall be injured or destroyed by fire or the elements, or through any other cause, so as to render the leased premises unfit for occu- pancy, or to make it impossible to conduct the business of the Lessee thereon, or to such an extent that they cannot be repaired with reasonable diligence within sixty (60) days- -5- C 1987 p? from the happening of such injury, then either party may terminate this lease from the date of such damage or destruction, and the Lessee shall immediately surrender the leased premises and all interest therein to the Lessor, and the Lessee shall pay rent only to the time of such damage or destruction; and in case of any such termination, the Lessor may re-enter and repossess the leased premises discharged of this Tease, and may dispossess all parties then in possession thereof. If repairs are not completed within sixty (60) days, and if neither party terminates this lease, then rent shall not run or accrue after the injury and during the process of repairs, and up to the time when the repairs shall be completed, except only that the Lessee shall during such time pay a prorata portion of such rent apportioned to the portion of the leased premises which are in condition for occupancy or which may be actually occupied during such repairing period. If, however, the leased pre- mises shall be so slightly injured by any cause aforesaid, as not to be rendered unfit for occupancy, then the Lessor shall repair the same with reasonable promptness, and in that case the rent shall not cease or be abated during such repairing period. All improvements or betterments placed by the Lessee on the leased premises shall, however, in any event, be repaired and replaced by the Lessee at its own expense and not at the expense of the Lessor to the extent said improvements or betterments represent fixtures or -6- clay's 1 y pFILE ' ? equipment which may be removed by Lessee at the termination of this lease. (e) Major Capital Expenditures. The Lessor shall be responsible for any major capital expenditures required during the first tweleve (12) months of the Tease, including but not limited to boiler replacement, roof repair, or other major structural repair, provided that written demand is given to Lessor during the first twelve (12) months of the lease. During the thirteenth (13th) through twenty-fourth (24th) months of the lease the Lessor and Lessee shall share equally any major capital expenditures required, provided that written demand is given to Lessor during the thir- teenth (13th) through twenty-fourth (24th) months of the lease. During the twenty-fifth (25th) through thirty-sixth (36th) months of the lease the Lessee shall be responsible for all major capital expenditures. 12. INSURANCE The Lessee shall maintain liability insurance during the term of the lease. The policies shall provide coverage of not less than $1,000,000 in the event of bodily injury or death to one person, not less than $1,000,000 in the event of bodily injury or death to any number of persons in any one occurrence, and not less than $1,000,000 for damage or injury to property. The Lessee shall eause.the Lessor to be named on said liability poli- cies as an additional named insured. -7- CLERKS � y � j FILE The Lessor shall maintain casualty, including fine and extended coverage, for casualty loss to the building in amounts acceptable to Lessee and Lessor, and name Lessee as an additional named insured. Lessee agrees to reimburse Lessor for the cost of the premiums for the casualty insurance within thirty (30) days following the date that proof of payment is provided to Lessee., 13. OPTION TO PURCHASE In consideration of all other provisions of this agreement, Lessor hereby grants to Lessee the exclusive option to purchase the real estate, building, and personal property attached to said facility for the total sum of Two Hundred Seventy Thousand and no/10'0 Dollars ($270,000.00). It is further agreed that the base rent pur- suant to paragraph 3 of this lease to a maximum of fifteen (15) months ($37,500.00)shall be applied as -a credit to said purchase price for rent actually _paid. The Lessee shall notify the Lessor of intent to exer- cise its option no later than six (6) months prior to the termination of this lease, in writing. Lessee's right to exercise this option to purchase is conditioned upon this lease not having been previously terminated, and Lessee having observed and complied with all terms and conditions of the lease required of Lessee up to the time of the exer- cise of the option to purchase. The purchase price of $270,000.00, less any credit applicable, by the terms of this lease, shall be paid in cash to Lessor at the date of -8- ct�•s ! y 01 .closing, which shall be no more than ninety (90) days after written notice of intent to purchase. On the date of closing, Lessor shall convey the premises to Lessee free and clear of all liens and encumbrances, except those Lessee may have created or suffered against the premises, or charges that may have become a lien against the premises during the period of this lease and except the easement rights of Lessor hereinafter set forth. 14. EASEMENT - During the term of the lease and following termination of the lease, if the Lessee exercises its option to purchase, the Lessor shall retain an easement as follows. The Lessor shall retain an easement for the construction, operation and maintenance of a well, water storage and distribution system. The easement, consisting of one (1) acre more or less, shall be legally described as follows, to -wit: The North 208.7' of the West 208.7' of the following described tract: The SW1/4 of the SEI/4 of the NE1/4, Section 27, Range 115, Township 19, except the South 230 feet of the West 225 feet thereof. Lessor acknowledges that the Lessee intends to use the real property to operate a childcare facility and other similar purposes, and agrees that the use of the property pursuant to the Lessor's easement shall not be inconsistent with the intended use by Lessee. The Lessor shall also have an easement for access to -9 CLERK's 198/ 0 7 FILE the above described property, the location of said easement for access shall be as designated by the Lessee and shall not be inconsistent with the intended use of the premises by Lessee. If Lessor exercises its right to use the above described one acre tract for the designated purposes, the Lessor agrees that it will maintain, at its cost, all usual and customary insurance coverage, including casualty for fire and extended coverage, liability, and damage to pro- perty. The Lessee shall be named as an additional insured on said policies, and the policy limits shall be in amounts not less than the amounts required of Lessee pursuant to paragraph 12. 15. EXISTING BALLFIELD Lessee hereby agrees that during the term of this lease Lessor may continue to use an existing ballfield, and in conjunction with the use of the ballfield may use the grass area West of the parking lot and the area South of the ballfield for parking. Said use, by Lessor, shall be substantially equivalent to the previous use of the premises by the Lessor. Lessor shall be respon- sible for all costs maintaining said areas. Lessor shall provide written notice to Lessee in advance of its intended schedule of use of the premises. The parties mutually agree to cooperate in scheduling the use of the ballfields and adjacent parking areas. 16. WATER SUPPLY The leased premises are not con- _10- CLERK'S 198/ 0 FILE nected to City water. The water supply is obtained from a private well located on the leased premises. Lessor agrees that prior to the commencement date of said lease, that Lessor shall provide proof satisfactory to Lessee that the water supply is potable and that the water complies with the requirements of applicable federal, state and local laws, including but not limited to the provisions of Minnesota Statutes Chapter 156A and Minnesota Rules for Water Supplies and Wells set forth in Chapters 4720, 4725, and 4727. Lessor further agrees that it will cause said water and well to be tested periodically as required by law, and at the request of Lessee at such additional times as may be requested and are reasonable. Lessor further agrees that if the well or water supply fails to meet any federal, state, or local law, or any of the specific statutes cited herein, the Lessor, at its expense, shall immediately have such problems repaired. Lessor further agrees that if Lessee exercises its option to purchase that the Lessor will immediately cause a new well to be dug in conformity with local, state and federal laws and the specific statutes and rules cited herein. That in addition to any such requirements of law, that said well will provide adequate supplies of potable water to meet the intended uses and needs of Lessee. The requirements set forth in this provision, including but not limited to testing, any necessary modifications or repairs, -11- CLERK'S FILE y 01 0 and the providing of a new well, shall be at the sole expense of the Lessor. Lessor as an alternative may provide water through a third party source, or through a city operated system. If either of these alternatives is elected, the Lessor shall provide at its cost all labor and materials to connect the Lessee with the water source. 17. CIVIL DEFENSE SIREN - The Lessor agrees, prior to the commencement of the lease, to remove the existing civil defense siren from the present location. The Lessee agrees that said civil defense siren may be relocated on the one acre tract described at paragraph 14. 18. SUCCESSORS BOUND - It is mutually agreed that all; the _terms and conditions of this agreement shall, subject to the provisions on assignment, transfer and subletting, extend, apply to and bind the successors and assigns of the respective parties hereto as fully as the respective parties are themselves bound. 19. TERMINATION FOR CAUSE If either the Lessor or the Lessee fails to keep and perform the covenants herein contained, or hereafter entered into, then the party so failing does hereby authorize and fully empower the other party to terminate and annul this lease. Said right to terminate this agreement requires the party alleging a default to provide written notice to the other party, as set forth in this lease, specifying the default(s) and the action required to remedy said default(s). The defaulting -12- Offs 1987 -0 7 FILE party shall have a reasonable time to correct said default, but, in any event, no less than fourteen (14) days following the service of notice. In the event of Lessor's failure, Lessor further empowers the Lessee to quit the leased,premi- ses and to declare any and all rents not otherwise due and payable abated. In the event of the Lessee's failure, the Lessee further empowers the Lessor to perfect such removal as it may deem advisable to recover exclusive possession of all of said premises, including any and all improvements, building or otherwise of a permanent nature, upon the premi- ses at that time. 20. SURRENDER - The voluntary or other surrender of the lease by the Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing subleases or subtenancies, or may, at the option of Lessor, operate as an assignment to it of any or all such subleases or subtenancies 21. REPRESENTATIONS - There are no promises or repre- sentations except those contained in this agreement and this agreement may only be changed in writing signed and acknowledged by both parties and not by any verbal represen- tations made by either party hereto. 22. NOTICES - The following individuals have been designated by the Lessor and the Lessee to respond to inquiries regarding the leased land and premises and are further authorized to accept service of process and receive -13- • CLERK'S 1987 * 0 and give receipt for notices and demands, and in the case of the Lessor, accept the rental payments required herein, in connection with this lease. LESSOR'S DESIGNEE: Name: City Administrator Address: 2875 -145th Street W. Rosemount, Minnesota 55068 LESSEE'S DESIGNEE: Name: Superintendent of Schools Address: 1300 E. 145th Street Rosemount, Minnesota 55068 The individual or address to which any notice, demand or other writing may be given or made or sent to either party may be changed by written notice given by such party. 23. REMEDIES - In addition to the rights and remedies for default set forth in this lease, the parties shall have such rights and remedies as provided by law in the event of default. IN WITNESS WHEREOF, THE Lessor and the Lessee by their respective officers on the dates indicated, have signed and executed this agreement. Executed by Lessor LESSOR: City of Rosemount on the day of 19 by Mayor by City Administrator -14- CCS -198?. p FILE Dakota County Area Vocational Technical School Executed by Lessee LESSEE: Intermediate District 917 on the day of 19 by Chairman by Clerk _15_