CR 2003-034 Approve Site Lease Agreement
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C1TY OF
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HOPKINS
February 13, 2003
Council Report 2003-034
Approve Site Lease Agreement with SuperValu Corp. - Public Works
Department Temporary Relocation
Proposed Action.
Staff recommends adoption of the following motion: Move that Council approve
a lease aqreement between the City of Hopkins and SuperValu, Inc. for the
temporary relocation of the Public Works Department to the SuperValu North
Annex site.
Overview.
The upcoming Public Works site redevelopment includes the demolition of
existing storage facilities and extensive site improvements. Public Works
equipment and employees must be relocated during the construction work. After
consideration of three different potential sites, the SuperValu North Annex site
was chosen as the most suitable. The site provides adequate buildings, ground
space and access. Public Works will move during the months of March and
April, as weather permits. The City Attorney drafted the proposed agreement;
SuperValu has reviewed it and will sign the agreement.
Primary Issues to Consider.
. Agreement terms and conditions
The lease provides 31,775 sf of building space and 1.7 acres of land. The cost is
$6,900/month + utility costs with the ability to reduce the cost if it becomes
possible to vacate one of the buildings prior to the end of the lease term.
Supporting information.
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Steven J. Stadler, Public Works Director
Financial Impact: $ 6.g00/month Budgeted: Y/N l Source: City facility
project fund
Related Documents (CIP, ERP, etc.):
Notes:
LEASE
Hopkins, Minnesota (Facility 1875)
This Lease ("Lease") is made and entered into by and between the Landlord and
Tenant identified in Paragraph 1 of this Lease, effective N\ CW-G\.' 3 ,2003
(the "Execution Date").
1. Parties. The parties to this Lease are SUPERV ALU INC., a Delaware
corporation, hereinafter called "Landlord" and the City of Hopkins, a municipal
corporation under the laws of the State of Minnesota, hereinafter called "Tenant."
2. Demise and Premises. Subject to the tem1S and conditions stated in this
Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord, during the
term specified in Paragraph 3 of this Lease, two buildings and land (the "Premises") as
shown and crosshatched on the site plan (the "Site Plan") attached hereto as Exhibit B
and incorporated herein by reference. The Premises are located on property legally
described in Exhibit A attached hereto and incorporated herein by reference (the
"Property"). The two buildings included in the Premises are designated on the Site Plan
as the "TK" building, which contains approximately 11200 square feet, and the "Apex"
building, which contains approximately 20,575 square feet. Tenant reserves the right to
eliminate and remove either the TK building or the Apex building from the Premises and
this Lease upon thirty (30) days' prior written notice to Landlord specifying the building
to be removed. If Tenant serves such notice on Landlord, Tenant shall remove all of
Tenant's personal property, equipment and trade fixtures from the building in question at
the end of said thirty (30) day period, and the rent payable under Paragraph 4 shall be
reduced at the end of said thirty (30) day period based upon the following formula:
$ '),000.00 orthe monthly rent stated in Paragraph 4 of this Lease is
allocated to the land included as part of the Premises and the balance of
$ 11.900.00 is allocated to the two buildings. If the TK building is
. removed from the Lease, the monthly rent amount allocated to the buildings shall be
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reduced by 35.25%. If the Apex building is removed from the Premises, the monthly rent
allocated to the buildings shall be reduced by 64.75%.
3. Term and Conditions of Use. The initial term of this Lease shall commence
on the Execution Date, and shall terminate on the 31 st day of January, 2004, unless earlier
terminated as hereinafter provided.
Notwithstanding anything to the contrary contained in this Agreement. either
party may terminate this Lease at any time by written notice to the other party, which
such termination shall be effective on a date specified in such notice but in no event
earlier than the 1201h day following delivery of such notice. Upon the effective date of
such termination, this Lease and Tenant's right to the use of the Premises shall temlinate,
and neither party shall have any further obligations hereunder.
Tenant shall be entitled to the exclusive use of the Premises, but solely for the use
and purposes specified in Paragraph 5 of this Lease, during the entire term of this Lease.
Landlord shall not during the term of this Lease construct any improvements upon or
otherwise alter the Premises so as to prevent or hinder the use thereof by Tenant for the
use and purposes described in Paragraph 5 of this Lease.
4. Rent. Tenant agrees to pay Landlord, at the address stated in Paragraph 13 of
this Lease, monthly rent in the amount of Six Thousand Nine Hundred Dollars
($6,900.00), payable upon execution of this Lease and thereafter on the first day of each
and every month during the term of this Lease, prorated for any partial month, without
demand therefor or deduction or set off.
In addition, Tenant shall pay, directly to the utility company providing same, the
cost of all utilities furnished to the Premises during the teml of this Lease.
5. Use of Premises. Tenant shall use the Premises only for the parking and
maintaining of Tenant's Public Works vehicles and equipment, for office use related to
such parking and maintenance, and for any other lawful use related to Tenant's Public
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Works Department activities. Tenant shall comply with all applicable state and local
laws, ordinances and regulations in its use of the Premises.
6. Maintenance of Premises. Landlord shall have no obligation whatsoever to
maintain, repair, restore, replace or improve the Premises during the term of this Lease
and, to the extent the Premises require any maintenance, repair, restoration, or
replacement during the term of this Lease, same shall be perfol1ned by Tenant. However,
Tenant shall be obligated only to perform routine maintenance and repairs. Neither
Tenant nor Landlord shall have any obligation to perform any capital improvements,
repairs or replacements of any part or component of the Premises. In the event the
Premises require any capital improvements, repairs or replacements, such as (by means of
example only and not limitation) leaking roof or HV AC failure, then (i) either Landlord
or Tenant may, at its option, in its sole discretion, perform such capital improvement,
repair or replacement at its own expense, and (ii) if neither party performs such capital
improvement, repair or replacement. Tenant may terminate this Lease at any time by
written notice to Landlord, which such termination shall be effective on any date
specified in such notice. Upon the effective date of such termination, this Lease and
Tenant's right to the use of the Premises shall terminate, and neither party shall have any
further obligations hereunder. Tenant is not relying on any representation or warranty of
Landlord or other person concerning the Premises, including, without limitation, the
condition of the Premises or its fitness for any particular use or purpose, and Tenant is
leasing the Premises based upon its own investigation and inquiry; Tenant hereby waives,
and Landlord hereby disclaims, all warranties of any type or kind whatsoever as to the
Premises, express or implied, including those of fitness for a particular purpose,
tenantability, habitability, and use. Tenant is leasing the Premises in its "AS IS, WHERE
IS" physical condition and in an "AS IS, WHERE IS" state of repair. If physical damage
is caused to the Premises or any improvements located on the Premises by Tenant or
Tenant's employees or agents or contractors, Landlord may notify Tenant of such
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damage, including a description of the damage. and Tenant shall thereafter proceed to
repair such damage, at Tenant's sole expense. If Tenant fails to commence repair of any
damage caused by Tenant, or Tenant's employees or agents or contractors, within thirty
(30) days of delivery of such notice from Landlord, or should Tenant fail to proceed with
reasonable diligence to complete the repair of any damage caused by Tenant, Landlord
may repair such damage, and Tenant shall reimburse Landlord for all reasonable costs
and expenses incurred in completing such repairs.
7. Alterations. No alteration or modification or improvement (including signs)
shall be made by Tenant in or to the Premises without the prior consent of Landlord in
writing, which consent may be granted or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord acknowledges and, subject to approval of plans
therefore, which approval Landlord agrees not to unreasonably withhold, consents to
Tenant's re-establishing utilities to the Premises, installing bathrooms and a breakroom,
installing necessary fencing, providing for ingress and egress from 2nd Street to the
Premises. and installing screening if required pursuant to the Existing Agreement (as
defined below).
As used in this Agreement, "Existing Agreement" shall mean that certain
Redevelopment Agreement dated as of July 20, 1998 between Landlord and Housing and
Redevelopment Authority In and For the City of Hopkins, Minnesota, a public body
politic and corporate under the laws of the State of Minnesota, as such Redevelopment
Agreement has been or will be amended by that cer1ain First Amendment To
Redevelopment Agreement dated on or about the date hereof. Tenant acknowledges that
it has reviewed the Existing Agreement, and Tenant agrees to abide by and comply with
all terms and conditions of the Existing Agreement insofar as it relates to the use of the
Premises and Tenant's rights under this Lease~, provided jiHO provision of this Lease
shall be interpreted to excuse or relieve either Landlord or Tenant from any of its
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obligations under the Existing Agreement except that during the term of this Lease
Landlord sball not be required to comply with any terms or conditions urthe Existing
Agreement insofar as it relates to the lIse oCtbe Premises and Tenant's rights under this
Lease~ By means ofexamplc and not limitation. notwithstandin~ anything to the contrary
contained in the Existing ^grcemcnt. Landlon..l shall have no obligation during the term
of this Lease to install any screening or the Premises.
8. Destruction of Premises. [Intentionally deleted].
9. Subleasing and Assignment. Tenant shall not assign its rights under this
Lease or sublet the Premises without the prior written consent of Landlord, which consent
may be granted or withheld in Landlord's sole discretion.
10. Non-liability of Landlord: Indemnity of Landlord by Tenant. This Lease
is made on the express condition that except for injury or damage caused by Landlord's
negligence or willful misconduct, the Landlord shall be free from all liabilities, claims,
obligations and damages for or by reason of any injury or injuries to any person, persons
or property of any kind of nature whatsoever resulting from the use of the Premises by
Tenant, or Tenant's agents or employees or contractors, from any cause or causes
whatsoever during the term of this Lease, whether occasioned by any occupancy or use of
the Premises or any activity carried on by the Tenant, or Tenant's agents or employees or
contractors. The Tenant further covenants and agrees to indenmify, save, hold harmless
and defend the Landlord from all liabilities, claims, obligations, damages, charges,
expenses and costs (including, but not limited to, Landlord's reasonable attorney's fees)
arising out of or resulting from the use of the Premises by Tenant, or Tenant's agents or
employees or contractors, including, but not limited to, the liabilities, claims, obligations
and damages referred to the foregoing provisions of this paragraph and any release of any
hazardous substances by Tenant. its employees, contractors or assigns. durin!: the term of
this Lease.
11. Insurance and \Vaiver of Subrogation. Tenant shall, during the term of
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this Lease. purchase in advance and carry the following insurance at ils own expense: (a)
"All Risk" fire and extended coverage insurance insuring Tenant's personal property,
furniture, trade fixtures, inventory and business record against loss from all insurable
events for the full replacement value thereof: (b) comprehensive general public liability
insurance covering all acts of Tenant and its employees and agents and insuring against
all claims arising from injury to persons or damage to property in or about the Premises
in a single limit amount of not less than $":U,OOO,OOO.OO for personal injury or death and
not less than $500,000.00 for property damage and fire legal liability. All such insurance
shall name Landlord as an additional insured and shall provide for thirty (30) days' prior
written notice to Landlord prior to cancellation, non-renewal, material modification or
termination. Certificates of all such insurance shall be delivered to Landlord prior to
occupancy of the Premises by Tenant and at least thirty (30) days prior to the termination
date of any existing policy.
Landlord shalL during the Term 0[tl1i5 LcaE;c. 1'1aintain Sl:mdard. all risk
insuranc'.= on the ~wo buildings lo(,:at~d on 1J,e Premises insuring ag:.tinst loss by fire and
other perils covered by a sj;~lI1dard extended coverage endonsement. S'-lch insurance shall
be in an amollnt of not less than the full ins'.lrabl€ 'ia]uc of said buildings. Landbrd also
shall maintain, during the Term of this Lease, comprehensive general public liability
insurance coveril',!; the leba] liability of Landlord :.lgainst claims for bodily injury. death
or propel1y damage occurri],g on or ahout the Premises in a single] imit amount or not
less than $'1.000,000.00 for pcrsonal inj'-lry or death and notleDS than $500.000.00 for
proper1.)' damage. Certific:ltes of all such im;'.lranC€ shall be delivered to Tenant '-Ipon
execution orthi~; Lea~;e have no obli~Jtion to maintain any insurance (including without
limitation property or liability insurance) ,vith respect to the Premises or the Property.
Notwithstanding any other provision in this Lease to the contrary, Landlord and
Tenant hereby release one another, their respective officers, officials, agents, partners and
employees from any and all liability or responsibility (to the other or anyone claiming
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through or under them by way of subrogation or otherwise) for any loss or damage
covered by insurance actually carried or coverable by the insurance required by this
Paragraph 11, even if such loss or damage shall have been caused by the fault or
negligence of the other party, or anyone for whom such party may be responsible.
12. Default and Termination.
a) Anyone of the following events shall constitute an Event of Default:
i) Tenant shall fail to pay any installment of monthly rent as provided
in Paragraph 4 of this Lease within ten (l0) days after Tenant
receives notice from Landlord that such installment or payment is
due;
ii) Tenant shall violate or fail to perform any of the other terms,
covenants or conditions of this Lease and such default shall
continue for thirty (30) days after notice from Landlord, unless
such default cam10t be cured in the exercise of reasonable diligence
within said thirty (30) day period, in which event Tenant shall be
allowed such additional time, up to a maximum of ninety (90)
days, as is needed to cure such default with all due diligence;
b) If an Event of Default shall have occurred and be continuing, Landlord
may at its sole option by written notice to Tenant terminate this Lease. Neither the
passage of time after the occurrence of the Event of Default nor exercise by Landlord or
any other remedy with regard to such Event of Default shall limit Landlord's right under
this Paragraph 12. b).
c) If an Event of Default shall have occurred and be continuing, whether or
not Landlord elects to terminate this Lease, Landlord may enter upon and repossess the
Premises (said repossession being hereinafter referred to as "Repossession") by force,
summary proceedings, ejectment or otherwise, and may remove Tenant and all other
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persons and property therefrom.
d) Neither the termination of this Lease pursuant to Paragraph 12. b) Nor
Repossession of the Premises pursuant to Paragraph 12. c) shall relieve Tenant of its
liabilities and obligations under this Lease, all of which shall survive any such
termination or Repossession. provided Tenanfs obligation to pay rent shall terminate 30
days after such termination.
e) Inunediately upon expiration or earlier termination of this Lease, Tenant
shall vacate the Premises. and remove all personal property belonging to Tenant or
Tenant's employees, agents or contractors therefrom.
13. Notices. All notices provided by this Lease shall be in writing and shall be
given to the other party as follows:
To the Tenant:
City of Hopkins
Attention: Steven Stadler
1010 First Street South
Hopkins, J\1N 55343
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To the Landlord:
SUPERVALU INC.
Attention: Legal Department
11840 Valley View Road
Eden Prairie, MN 55344
All notices shall be personally delivered to the individual identified above or sent by
certified United States mail, return receipt requested. Personally delivered notices shall
be effective as of the date of delivery. Mailed notice shall be effective two (2) days after
the date of mailing. Either party may change such party's address for notice purposes by
written notice to the other as provided in this Paragraph 13.
14. Applicable Law. This Lease and the rights and obligations of the parties
hereunder shall be interpreted in accordance with the laws of the State of Minnesota.
15. Amendment~ Modification or Waiver. No amendment, modification or
waiver of any condition, provision or term of this Lease shall be valid or of any effect
unless made in writing, signed by the pm1y or parties to be bound or a duly authorized
. representative, and specifying with particularity the extent and nature of such
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amendment, modification or waiver. Any waiver by any party of any default of another
party shall not affect or impair any right arising from any subsequent default. Nothing
herein shall limit the remedies and rights of the parties hereto under and pursuant to this
Lease.
16. Entire Agreement. This Lease contains the entire understanding of the
parties hereto with respect to the transactions described herein and supersedes all prior
agreements and understandings between the parties with respect to such subject matter.
No representations, warranties, undertakings or promises, whether oral, implied, written
or otherwise, have been made by either party to the other unless expressly stated in this
Lease or unless mutually agreed to in writing between the parties after the date hereof~
and neither party has relied on any verbal representations, agreements or understandings
not expressly set forth herein.
17. Captions. Headings or Titles. All captions, headings or titles in the
. paragraphs or sections of this Lease are inserted for convenience of reference only and
shall not constitute a part of this Lease as a limitation of the scope of the particular
paragraphs or sections to which they apply.
IN WITNESS WHEREOF, the undersigned Landlord and Tenant have executed
this Lease Agreement etfective as of the ~ _ _ day of
,2003.
LANDLORD:
SUPERV ALU INC'.
TENANT:
CITY OF HOPKINS
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Exhibit A
Legal Description of Property
Exhibit B
Site Plan Showing Premises
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