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CR 93-219 Railroad Authority Lease Agreement ( \ I "{ yo: . .:cD: 'i -s- ~ December 14, 1993 o I ~ Council Report 93-219 P K HENNEPIN COUNTY REGIONAL RAILROAD AUTHORITY LEASE AGREEME~T FOR R.O.W. BETWEEN 17TH AND 18TH AVENUE NORTH . ProDosed Action. Staff recommends adoption of the following motion: Move to authorize the Mavor and City Manager to execute lease No. 73-34044 between the city of Hopkins and the Hennepin County Regional Railroad Authority for former railroad right of way located between 17th Avenue North and 18th Avenue North with the understandinq that chanqes may be made to the lease aqreement which are non-substantive in nature or are of advantaqe to the City. Overview In August of 1987 the City of Hopkins and the Hennepin County Regional Railroad Authority entered into a lease agreement for the southwesterly 24 feet of HCRRA right of way located between . 18th Avenue North and the alley that runs between 18th Avenue North and 17th Avenue North. The city began leasing this right of way as a means to provide for drive thru access between the alley and 18th Avenue for snowplowing, refuse removal, emergency vehicles, and general vehicle traffic. The lease between the City and Hennepin county Regional Railroad Authority was negotiated at a cost of $1 per year and automatically renewed itself each year since 1987. The HCRRA has proposed a new lease with the City of Hopkins which increases the rent from $1 per year to $944.76 per year or $78.73 per month. primary Issues to Consider I 0 Why is the right of way needed for access purposes? 0 What are the specifics of the proposed lease agreement? 0 What is the reason for increasing the rent? Information 0 0 reement . . Harmening Development Director CR93-219 . Page 2 primary Issues to consider 0 Why is the right of way needed for access purposes? 18th Avenue North and the alley located between 17th and 18th Avenue North are dead ends. In order to meet operational needs for Public Works, and in particular refuse removal operations, the lease for the former railroad right of way was negotiated with the county. By gaining access over the right of way a loop system was created which avoided the need for Public Works equipment to back out of the alley and 18th Avenue North during refuse removal or snow plowing operations. Also, this loop system insured better pUblic safety access and general access for the neighborhood. 0 What are the specifics of the proposed lease agreement? - 24 foot wide lease area (similar to previous lease). - Three year lease. Lease may be terminated on 30 days notice by either party. . - Rent is $78.73/month or $944.76/year. - City is responsible for maintaining the property. - city indemnifies County from any claims due to wrongful acts or negligence on the part of the city. - city shall carry liability insurance, etc. for the use of the property. - At the request of the County the City must pay for any environmental testing of the site if a concern should become apparent that the site may have become contaminated. staff will be discussing the appropriateness of this provision further with the city Attorney. 0 What is the reason for increasing the rent? The HCRA has proposed a rent increase from $1 per year to approximately $945 for the use of the right-of-way. The proposed rent appears to relate directly to the amount of a storm sewer run-off charge which Hennepin County is billed . by the City each year. A storm sewer run-off charge is paid by everyone who owns property in the City of Hopkins. Hennepin County has directed the HCRA to increase the rent for right-of-way properties so that they can recoup this storm sewer run-off charge. ~._~ ~~ CR93-219 . Page 3 Staff has expressed strong concerns to the County regarding the cost of the lease and is trying to negotiate a lower price. Due to the fact the City's refuse removal operations benefit the most from this easement it is recommended the Refuse Fund be used as the source of funds to pay for the lease. Alternatives 0 Approve the action as recommended by staff. 0 Do not approve staff's recommendation and make a determination that the City will not enter into a new lease agreement. This may have implications on Public Works operations. 0 Direct staff to attempt to negotiate an alternate lease agreement with Hennepin county. . . . I -.-- -,~- t LOCATION - I . MAP I i 1 i I NO. 7 ,. -i " , \1\0 i . ~ ~oo{ (9) I ~. (8) LEASED PROPERTY , f ; , (7) , " l" ST. 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HENNEPIN COUNTY REGIONAL RAILROAD AUTHORITY Lease No. 73-34044 Southwest Street Level, Government Center Minneapolis, Minnesota 55487-0016 ( 612/348-9260) LEASE AGREEMENT THIS AGREEMENT, entered into by and between the HENNEPIN COUNTY REGIONAL RAILROAD AUTHORITY, a Minnesota political subdivision, LESSOR, and City of Hopkins, 1010 First Street South. Hopkins, MN . 55343, LESSEE; In consideration of the covenants by and between the parties, IT IS HEREBY AGREED: I. LEASED PREMISES . LESSEE agrees to lease from LESSOR, and LESSOR agrees to lease to LESSEE, that certain property described as follows: The southwesterly 24 feet of Hennepin County Regional Railroad Authority right of way located between 18th Avenue North and the alley that runs between 18th Avenue North and 17th Avenue North in the City of Hopkins, as shown in pink on the attached exhibit map. II. USE OF LEASED PREMISES The Leased Premises shall be for the use of LESSEE, its agents, officers and employees and invitees for the following specified purpose and shall be limited to that specified use: Temporary roadway to provide access for refuse trucks and snow plowing. III. TERM, OPTION TO RENEW, AND TERMINATION LESSEE acknowledges that the Leased Premises were acquired by LESSOR specifically and solely for the purpose of constructing a light rail transit system and its associated facilities and that it is LESSOR's intention to lease the Leased Premises only until they are needed for that purpose. Nothing in this Lease shall be deemed to evidence any change by LESSOR of its . intended use of the Leased Premises forlight rail transit purposes or other permitted transportation purposes. Rather, LESSOR has agreed to the terms of this Lease to provide a temporary income- HCRRA 2 1 . . . producing use for th~ Leased Premises during the time required for further planning and development of the light rail transit system or other transportation purposes. The term of this Lease shall. be for a period of thirty~six months commencing on January, 1, 1994, and terminating at 2400 hours on December 31, 1997. LESSOR or LESSEE may terminate this Lease or any renewal, at any time, by giving thirty (30) days' written notice to vacate Leased Premises. Thirty (30) days after service of said notice, this Lease and all rights hereunder shall terminate except for such rights as may have accrued to either party prior to such termination. At the expiration of thirty (30) days, without further notice or demand, LESSEE shall deliver possession of the Leased Premises to the LESSOR and shall remove all property placed upon the Leased Premises which.it desires and has the right to remove. If it shall fail to remove such property, its right to do so shall cease at the option of the LESSOR, and LESSEE's title thereto shall be forfeited and the same shalLbelong to the LESSOR; or, in such case, if the LESSOR so elects, it may, at any time after the termination, tear down and/or remove any or all property at the expense. of LESSEE. without any liability for damages. LESSEE shall thereupon promptly reimburse LESSOR for all expenses incurred by it in such removal. Upon such termination of this Lease, rent shall be paid by the LESSEE to the date of . termination fixed by said notice, and if rent has been paid in advance, LESSOR shall refund to LESSEE the unearned portion for the period extending beyond such .date of termination, and LESSEE shall have no further rights under this Lease. IV. RENT . LESSEE agrees to pay to LESSOR the sum of Seventy-ei2htand 73/100 dollars ($78.73) monthly for said premises. 'Such rent shall be due and payable on the first day of each monthofthis Lease and shall be delivered in person or mailed to LESSOR at the address set forth in Section XV. LESSEE pays all costs for water, sewer, heat, and electricity and any other utilities, if any, used or consumed in connection with the Leased Premises, including waste or trash removal costs and snow plowing. V. MAINTENANCE AND REPAIRS At all times during its occupancy of the Leased Premises, LESSEE shall be responsible for 100 percent of the expense of maintaining the Leased Premises and the fixtures and equipment in good repair; and shall use reasonable precaution to prevent waste, damage, or injury; and. shall modify, repair, or replace equipment when necessary. LESSOR shall not be liable to. LESSEE or those claiming by, through, or under LESSEE for any injury, death, or property damage occurring. in, on, or about the Leased Premises. . .Without limitations of the foregoing, LESSOR shall not be liable for any loss or damage which may be sustained by LESSEE or others in, about, or adjacent to the Leased Premises by reason of the HCRRA 2 2 . present or future condition of repair of the Leased Premises, or for loss or damage arising from the acts or omissions of LESSEE or other .tenants or occupants. . LESSEE will make no alterations, additions, or improvements to the exterior of the building or design or structure of the LeaSed Premises or modify the use or purpose of the Leased Premises without prior written consent from LESSOR. . VII. INDEMNIFICATION AND INSURANCE A Indemnification , LESSEE shall defend, indemnify, and hold harmless LESSOR, its Commissioners, officers, agents, and employees from any liability, claims, damages, costs, judgments, or expenses, including reasonable attorney's fees, resulting directly or indirectly from a negligent or intentionally wrongful act.or omission of LESSEE, its contractors, subcontractors, agents, employees, customers or invitees, in the performance of this Lease. B. Insurance In order to protect itself, as well as LESSOR under . the indemnity provisions . hereinabove set forth, LESSEE or LESSEE's contractors, subcontractors or agents performing work on the premises shall purchase and maintain in force .at all times .during the term of this Lease the following minimum insurance coverages applicable to the Leased Premises, . affiliated activities, and/or this Lease: Limits 1. Commercial General Liability to include the follow- ing coverages and insurance. limits. Contractual Liability coverage must be included. General Aggregate $1,000,000 Products-Completed Operations Aggregate 1,000,000 Personal and Advertising Injury 1,000,000 Each Occurrence - Combined Bodily Injury and Property Damage 1,000,000 Fire Damage - Any One Fire 50,000 Medical Expense - Per Person 5,000 2. Automobile Liability including. owned, non-owned, and hired automobiles. Combined Bodily Injury and Property Damage $1,000,000 . 3. Workers' Compensation and Employers' Liability HCRRA 2 3 - ,,:-,^,- '. a. Workers' Compensation - Statutory. If the contractor is based outside of the State of Minnesota, coverage must apply to Minnesota laws. b. Employers' liability. Bodily injury. by: Accident - Each Accident $100,000 Disease - Policy limit 500,000 . . Disease - Each Employee. 100,000 An umbrella or excess policy over primary liability coverages is an acceptable method to provide the required insurance limits. The above establishes minimum insurance requirements. It is the sole responsibility of the LESSEE to determine the need for and to procure additional coverage which may be needed in connection with this Lease. All insurance policies shall be open to inspection by the LESSOR, and copies of policies shall be submitted to the LESSOR upon written request. . This Lease shall be valid when the LESSEE has obtained required insurance and filed . an acceptable certificate of insurance with the Authority. The certificate shall: . . Name Hennepin County Regional Railroad Authority as' certificate holder and as an additional insured with respect to operations covered under the Lease for all liability coverages except Workers' Compensation and Employers' Liability. . List any exceptions to the insurance requirements. . . Amend the certificate of insurance to . show Hennepin County. Regional Railroad Authority will receive. 30 days written notice in the event of cancellation, non- renewal, or material change in any described policies. Delete the wording: "Endeavor to" and "but failure to provide. such written notice shall impose no obligation or liability of any kind upon the company its agents or representatives." All certificates of insurance shall provide that the insurance company shall give. thirty (30) days' written notice to both LESSEE and LESSOR of cancellation, . non-renewal, or any material changes in the policy and certificates of insurance shall so state. VII. ASSIGNMENT AND SUBLETTING LESSEE shall not, except with the. prior written consent of LESSOR, . assign, sublet, mortgage, pledge, or in any manner transfer the Leased Premises or this Lease. . HCRRA 2 4 . VIII. COMPLIANCE WITH LAWS, ORDINANCES, AND RULES LESSEE agrees to comply with all laws, ordinances, and regulations of federal, state, municipal and local government agencies as they apply to its occupancy of the Leased Premises and/ or the business it transacts on the Leased Premises. LESSEE shall comply with any reasonable rules adopted by LESSOR for the safety, care, and cleanliness of the Leased Premises and for the preservation of good order therein and shall at all times keep the Premises clear and safe. LESSEE shall not permit the existence of . any nuisance on said Premises., IX. TRADE FIXTURES, MACHINERY, AND EQUIPMENT LESSOR agrees that all trade fixtures, machinery, equipment, furniture, or other personal property kept or installed on the Leased Premises by LESSEE shall not become the property of LESSOR and may be removed by LESSEE, subject to LESSOR's rights as set forth in Section III. LESSEE agrees that it shall be fully responsible for the repair of any damage to the Leased Premises caused by the removal of. any of its trade fixtures, machinery, equipment, furniture, or other personal property. . X. REMEDIES OF LESSOR It is further agreed between the parties hereto, that if the said LESSEE shall breach or make default in any of the conditions, covenants or agreements of this Lease, which breach or default shall continue for fifteen (15) days a.fter LESSEE's receipt of written notice thereof from LESSOR, then it shall be lawful for the LESSOR, then or at any time thereafter, to declare this Lease ended, and to re-enter said premises and take possession thereof and to use any reasonable or necessary lawful force for regaining possession; whereupon the rights and obligations of the parties shall be the same as above specified in the case of termination at the end of thirty (30) days' notice; and it is hereby further agreed and provided that any waiver at any time .of a breach of any condition, covenant or agreement of this Lease shall extend. only to the particular breach so waived and shall, in no manner, impair or affect the existence of such condition, covenant or agreement, or the right of LESSOR thereafter to avail itself of same and any subsequent breach thereof. In the event LESSOR has to take action for repossession of said property, LESSEE, its assigns or heirs shall be liable for reasonable attorney's fees incurred by LESSOR. XI. ENVIRONMENTAL CONCERNS LESSEE shall not create or permit any condition of the premises that could present a threat to human health or to the environment. LESSEE shall defend, indemnify and hold harmless LESSOR and its affiliates from any suit or claim growing out of any damages alleged to have been caused by, contributed to, or aggravated by the violation by LESSEE, or any sub-LESSEE, . contractor, sub-contractor or agent of LESSEE of any federal, state or local laws, ordinances, regulations or requirements pertaining to solid or other wastes, chemicals, oil and gas, toxic, HCRRA 2 5 --, . ' . corrosive, or hazardous materials, air, water (surface or groundwater) or noise pollution, and the storage, handling, use or disposal of any such material by LESSEE or any sub-LESSEE, contractor, sub-contractof.or agent of LESSEE performing work on or from the Premises. LESSEE shall bear the expense of all practices or work, preventative, investigative or remedial, which may be required because of any conditions of the Premises caused by LESSEE or any use of the Premises by LESSEE or those claiming by, through, or under LESSEE, during LESSEE's period of occupancy . or during LESSEE's ownership or use prior to the date of this Lease. LESSEE expressly agrees that the indemnification defense and hold harmless obligations it hereby assumes shall survive cancellation of this. Lease. LESSEE agrees that. statutory limitation periods on actions to enforce these obligations shall not' be deemed to commence until LESSOR discovers any such health. or enviromi1ental impairment, and LESSEE hereby knowingly and voluntarily waives the benefits of any shorter limitation period. LESSOR shall have the right, but not the duty, to enter upon the Premises from time to time as set forth below to inspect the premises for environmental contamination and in the course thereof to conduct soil and groundwater testing. LESSOR may enter the Premises during regular business hours of LESSEE without prior notice, and may enter the Premises during periods other than regular business hours either with prior written consent of LESSEE or without if LESSOR reasonably believes that'an emergency exists on the Premises. .LESSOR shall conduct , . any such inspections or testing so as to minimize interference with LESSEE's business operations. .. '. LESSOR's entry onto the Premises pursuant to this paragraph shall not relieve the LESSEE's obligation to pay rent under this Lease. Notwithstanding the foregoing, LESSEE is not responsible, by virtue of the terms of this Lease, for any contamination existing on the Premises prior to LESSEE's use or occupancy of the Premises. . XII. .TESTING PROVISION At the request of LESSOR, upon the termination of the Lease, or during the term hereof, . LESSEE shall pay for the services of a state-approved contractor to sample what appears .. to be any visibly contaminated areas of the premises. For any contaminated areas, LESSEE's contractor shall provide remediation recommendations to LESSOR, and shall perform remediation to the satisfaction of LESSOR. Copies of the results shall be forwarded to LESSOR by LESSEE to ensure that the premises are returned to LESSOR reasonably free .of pollution and in compliance with all applicable state and federal laws and regulations. The provisions of this paragraph shall survive the termination of this Lease. XIII. RIGHT OF ENTRY LESSOR may enter the Leased Premises at any time to examine, inspect, or protect . the premises and to make alterations, renovations, or repairs. HCRRA 2 6 . XIV. AMENDMENTS No waivers, alterations or modifications of this Lease or any agreements in connection therewith shall be valid unless in writing duly executed by both LESSOR and LESSEE herein. XV. NOTICES All notices required or permitted pursuant to this Lease shall be directed to the following individuals and shall be either hand-delivered or mailed to the following addresses: To LESSEE: City of Hopkins 1010 First Street South Hopkins, MN 55343 Attention: Steven M. Mielke, City Manager To LESSOR: Hennepin County Regional Railroad Authority Southwest Street Level . Government Center . Minneapolis, MN 55487-0016 . Attention: Don Lawrence XVI. ACCEPTANCE LESSEE understands that the premises are a former railroad right of way and may contain certain pollutants that may be hazardous to human health. LESSEE accepts the premises with the full knowledge that this potential hazard may exist. XVII. LIENS AND ENCUMBRANCES LESSEE shall not permit any liens or encumbrances to be established or to remain against the Leased Premises. liens or encumbrances for purposes of this section mean any mortgage, pledge, security interest, lienor encumbrance on (or affecting) any portion of the Leased Premises, including (without limitation) tax liens or encumbrances and liens or encumbrances with respect to work performed or equipment or material furnished in. connection with LESSEE's use of the Leased Premises. . . HCRRA 2 7 . -~- ~ ----.." -,_._," , . LESSEE having signed this Lease, and the Hennepin County Regional Railroad Authority's Commissioners having duly approved this Lease on the _ day of _, 1993, and pursuant to such approval, the proper officials having signed this ,Lease, the parties hereto agree to be bound by the provisions of this Lease. HENNEPIN COUNTY REGIONAL RAILROAD AUTHORITY Upon proper execution, this agreement will be legally valid and. binding. By: Chair, Board of Commissioners Assistant County Attorney And: Date: Executive Director .APproved as to execution: LESSEE - CITY. OF HOPK.lNS. . Assistant County. Attorney StevenM. Mielke, City Manager Date: Date: The City is organized pursuant to: Plan A Plan B Charter - - - . HCRRA 2 8 ..,- -j~"-'--- --, ,~ , -~ -:-~ :::::::::;::::: .~=---- ::::::::::::--..--:-= =::-' /___ .. ~ \ . ..\~ \ v'.,.' ~ / ~ \.. . /. \ / \ .,'\.. ./ ,'" / \. . / \ \ .,' /' ..../ / ... ...... .:/ / .'" ../. / ,..' -' . . ' / . . '<0 v'. . ~ / / . , .' 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