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CR 2013-108, Approve Parking Lot Lease Agreement - City Parking Lot 750CITY OF I* NOPKINS October 9, 2013 Council Report 2013-108 Approve Parking Lot Lease Agreement — City Parking Lot 750 Proposed Action. Staff recommends adoption of the following motion: Move that City Council approve a parking lot lease agreement between the City of Hopkins and Sidal Realty Co. LLLP for the leasing of city parking lot 750. Overview. The owners of the Gallery Flats apartments are in need of additional tenant parking to help meet the expected demand. They approached the City to determine if there were any parking lots/areas that could be leased to them for the next five (5) years. The Gallery Flats project was developed with a 1.1 parking stall to dwelling unit ratio. The Gallery Flat owners believe additional parking is needed until the new Southwest Light Rail line is operating. Currently, City parking lot 750 is scarcely used and has 37 parking stalls. The lot has a 3 -hr parking limit or all day with a permit. City staff negotiated a 5 -year parking lot lease agreement, the terms are shown below. Primary Issues to Consider. • Agreement terms and conditions The lease term is five (5) years from October 1, 2014 — Sept 30, 2019. The rent is $24,000/year + 100% of real estate taxes and assessments. Tenant would have exclusive use of the parking lot for parking of non-commercial vehicles for occupants or guests of the Gallery Flats development. The tenant is responsible for all parking lot maintenance. The City can terminate the lease by giving a 365 - day written notice or if a redevelopment project is being considered the City gives an advance 365 -day notice and a 180 -day notice after the redevelopment is approved by the City. Supporting information. • Proposed parking lot lease agreement • Aerial view and photo of parking lot 750 • 2013 Parki Study excerpts Steven J. Stadler, Public Works Director PARKING LOT LEASE This Parking Lot Lease ("Lease") is made and entered into by and between the Landlord and Tenant identified in Paragraph 1 of this Lease, effective , 2014. 1. Parties. The parties to this Lease are the City of Hopkins, a municipal corporation under the laws of the State of Minnesota, hereinafter called "Landlord" and Sidal Realty Co. Limited Partnership, LLP, hereinafter called "Tenant." 2. Demise and Premises. Subject to the terms and conditions stated in this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord, during the term and for the hours of use specified in Paragraph 3 of this Lease, all of the parking lot, driveway, access and other Parking Improvements (collectively "Parking Improvements") located or to be located on certain land ("Real Property") located in the southeast quadrant of the intersection of Ninth Avenue North and First Street North, in the City of Hopkins, outlined and designated on Exhibit A attached hereto and incorporated herein by reference. The Real Property and the Parking Improvements are hereinafter collectively referred to as the "Premises." 3. Term. The term of this Lease shall commence on the 1St day of October, 2014, ("Commencement Date") and shall terminate on the 30tW day of September, 2019, unless earlier terminated as hereinafter provided. The Tenant may terminate the Lease by providing advance written notice of said termination to the other party not less than one hundred twenty (120) days prior to the effective date of the Lease termination. In addition to the Events of Default as described in Paragraph 12 below, the Landlord may terminate the Lease by providing advance written notice of said termination to the other party not less than 365 days prior to the effective date of the Lease termination or in the event that a real estate development or redevelopment project (the "Project") receives final approval from the Hopkins City Council or the Hopkins Housing and Redevelopment Authority Hopciv\GalleryFlarsTotlease ("HRA") and the Project includes use of some or all of the Premises, subject to the following notice and timing requirements: (i) Landlord shall provide written notice to Tenant at such time as Landlord begins consideration of a specific Project for the Premises, and the date that Landlord terminates the Lease shall be at least 365 days after the date of such notice, and (ii) once a Project receives final approval, the Landlord shall provide to the Tenant not less than 180 days written notice prior to the effective date of the Lease termination. Tenant shall be entitled to the exclusive use of the Premises during the entire term of this Lease. 4. Rent and Taxes. Tenant agrees to pay Landlord, at the address stated in Paragraph 13of the Lease, annual rent in the amount of Twenty-four thousand and 00/100 dollars ($24,000.00), said rent to be payable in twelve equal monthly payments, the first installment to be paid in advance on or before the Commencement Date of this Lease and each subsequent monthly installment to be paid on or before the first day of each succeeding month, said payments to be made each and every month during the term of the Lease without demand therefor or deduction or set off. In addition to the annual rent, Tenant shall also pay to Landlord as additional rent hereunder 100% of the annual real estate taxes and installments of special assessments payable with respect to the Premises. Tenant shall not, however, be obligated to pay any real estate taxes attributable to the value of any building or structure now or hereafter located on the Premises other than the Parking Improvements. The Tenant's tax payments shall be made in twelve equal monthly payments, the first payment to be made in advance on or before the Commencement Date and each subsequent monthly payment to be paid on or before the first day of each succeeding month, said payments to be made each and every month during the term of this Lease without demand therefor or deduction or set off. If the term of this Lease includes only a partial calendar year, the real estate taxes and installments of special assessments payable by Tenant shall be prorated on a daily basis so that Tenant pays only the real estate taxes and installments of special assessments for those days during which the term of this Lease is in effect. No provision of this Lease shall be interpreted to require Tenant to pay any income, excess Hopciv\GalleryFlarsTotlease profit or other tax assessed against Landlord, with the exception of real estate taxes and special assessments assessed against the Premises. 5. Use of Premises. Tenant shall have exclusive use the Premises for the sole purpose of providing parking of non-commercial vehicles for occupants or guests of the Tenant's Gallery Flats development. Tenant shall comply with all applicable state and local laws, ordinances and regulations in its use of the Premises. Without limiting the foregoing, Tenant agrees that its use of the Premises shall comply with the requirements of Minnesota Statutes Section 459.14, Subd. 4, the provisions of which are incorporated in this Lease, and that Tenant shall not allow the sale or offer for sale of any merchandise or supplies, including gasoline or oil, or the cleaning, repair or furnishing of services other than parking upon the Premises. 6. Maintenance of Premises. Tenant shall perform, at Tenant's expense, all snow plowing, snow removal, maintenance, repair, resurfacing, striping and sweeping of the Parking Improvements during the term of this Lease. If damage is caused to the Premises or the Parking Improvements by Tenant or Tenant's employees, customers or agents, Landlord may but shall not be required to repair such damage, and Tenant shall reimburse Landlord for all reasonable costs and expenses incurred in completing such repairs. Landlord shall have no obligation or duty to improve, administer or operate the Premises and the Parking Improvements. Without limiting the generality of the foregoing, Landlord shall have no obligation to provide lighting or security for the Premises or the Parking Improvements. Tenant shall permit Landlord, and Landlord's agents and employees, to enter the Premises at all times for the purposes of performing maintenance and repair work, and there shall be no abatement of the rent due hereunder by reason of such entry by Landlord and Landlord's agents and employees. 7. Alterations. No alteration or modification or improvement (including signs, except as provided for in Paragraph 18 below) shall be made by Tenant in or to the Premises without the prior consent of Landlord in writing, which consent shall not be unreasonably withheld. Hopciv\Gal leryFlarsTotlease 8. Destruction of Premises. If the Premises or the Parking Improvements thereon shall be damaged or destroyed by any cause so as to render the Parking Improvements thereon unfit for their intended use, without the fault or neglect of Landlord or any person for whose conduct Landlord may be liable, Tenant shall undertake to repair such damage or destruction at Tenant's own expense. This Lease shall remain in full force and effect following such damage or destruction, and the rent payable under Paragraph 4 of this Lease shall not be abated while such repairs are being completed. If the destruction or damage was caused by the negligence or intentional conduct of Landlord, or Landlord's agents or employees, the rent, prorated to the extent the Parking Improvements located on the Premises are rendered untenantable, shall be equitably abated. 9. Subleasing and Assignment. A. Tenant shall not assign its rights under this Lease or sublet the Premises or any part thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Tenant shall be allowed to sublet or assign this Lease, without Landlord's consent, to any entity that controls, is controlled by or is under common control with Tenant or to any entity resulting from a merger or acquisition with or by Landlord. As a condition to any permitted subletting or assignment of Tenant's interest in this Lease, Tenant shall provide Landlord with a written sublease or assignment of Tenant's interest in this Lease whereby the subtenant or assignee agrees to be bound by and perform all of the terms, covenants and conditions of this Lease. Further any permitted subletting or assignment shall not relieve Tenant of Tenant's obligations under this Lease, all of which shall survive any subletting or assignment. B. Notwithstanding anything to the contrary in Paragraph 9.A., the Tenant shall be entitled to sublease individual parking spaces on the Premises solely to occupants of the Tenant's Gallery Flats development. Tenant is not permitted to sublease any parking space or spaces to persons or entities who are not then -current occupants of the Gallery Flats development. However, the Tenant's annual aggregate charges for all of the Premises parking spaces paid for by the Gallery Flats occupants, as Hopciv\GalleryFlarsTotlease measured beginning on the Commencement Date for the following 12 -month period and for each succeeding 12 -month period, may not exceed the annual total rent and other charges paid by the Tenant to the Landlord for use of the Premises. 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, employees, customers, subtenants as provided in Paragraph 9.B or invitees, 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, employees, customers, subtenants as provided in Paragraph 9.B or invitees. The Tenant further covenants and agrees to indemnify, save, hold harmless and defend the Landlord from all liabilities, claims, obligations, damages, charges, expenses and costs (including Landlord's reasonable attorney's fees) arising out of or resulting from the use of the Premises by Tenant, or Tenant's agents, employees, customers, subtenants as provided in Paragraph 9.B or invitees, including, but not limited to, the liabilities, claims, obligations and damages referred to the foregoing provisions of this paragraph. 11. Insurance. Tenant shall, during the term of this Lease, maintain comprehensive general public liability insurance insuring against personal injury and property damage occurring as a result of or in connection with Tenant's use of the Premises in a single limit amount of not less than $1 million for personal injury or death and not less than $500,000 for property damage. Such insurance shall name Landlord as an additional insured, and Tenant shall provide Landlord with certificates evidencing Tenant is maintaining such insurance. Such insurance shall also require the insurer to give Landlord at least 30 days' prior written notice the cancellation or termination of the insurance policy. 12. Default and Termination. Hopciv\GalleryFlarsTodease a) Any one of the following events shall constitute an Event of Default: i) Tenant shall fail to pay any installment of rent or payment for real estate taxes or special assessments as provided in Paragraph 4 of this Lease when said 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 ten (10) days after notice from Landlord, unless such default cannot be cured in the exercise of reasonable diligence within said ten (10) day period, in which event Tenant shall be allowed such additional time 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 persons and property therefrom. d) Neither the termination of this Lease pursuant to Paragraph 12. b) Non -Repossession of the Premises pursuant to Paragraph 12. c) or otherwise shall relieve Tenant of its liabilities and obligations under this Lease, all of which shall survive any such termination or Repossession. e) If an Event of Default shall have occurred and Landlord retains an attorney to prosecute the enforcement of all or any of the terms, covenants, agreements or conditions of this Lease, the collection of any rent due or to become due, or the recovery of possession of the Premises, Tenant agrees to reimburse Landlord, for Landlord's reasonable attorney's fees, together Hopciv\Gal IeryFlars\Lotlease with the actual cost of maintaining any action commenced in law or equity by said attorneys for the services of the attorneys, whether suit is actually filed or not. Such reimbursement shall be payable within thirty (30) days of demand therefore. f) Upon termination of this Lease, Tenant shall vacate the Premises, and remove all personal property belonging to Tenant or Tenant's employees and agents 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: Bruce P. Rubinger General Partner Sidal Realty Co. Limited Partnership, LLLP 6730 Walker Street St. Louis Park, MN 55426 To the Landlord: City of Hopkins Attention: Michael Morrison, City Manager 1010 First Street South Hopkins, MN 55343 Copy to: Steiner & Curtiss, P.A. 1011 First St. S. #400 Hopkins, MN 55343 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 party or parties to be bound or a duly authorized representative, and specifying with Hopciv\Gal leryFlarsTotlease particularity the extent and nature of such 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. 18. Parking Enforcement. During the term of this Lease, the Tenant may erect signs on the Premises giving notice that the Parking Improvements are reserved for the exclusive use of Tenant's designees. The Tenant shall enforce any such parking restrictions for the Parking Improvements and the Landlord will not enforce any parking restrictions such as those followed by Landlord for other publicly -owned parking lots in the City of Hopkins. Landlord shall have no liability to Tenant, nor shall there be any reduction in the payments due Landlord under this Lease, if parties use the Parking Improvements despite any Tenant enforcement activities. Hopciv\GalleryFlarsTotlease IN WITNESS WHEREOF, the undersigned Landlord and Tenant have executed this Lease Agreement effective as of the day of , 2013. LANDLORD: CITY OF HOPKINS TENANT: Sidal Realty Co. Limited Partnership, LLLP By By Its Its By By Its Its_ Hopciv\GalleryFlarsTodease 4 y tr4.. �� ■iiiil� � .Yds '�': � *'"',''.',ray r• � w its a } '00 1 fi � aw IV n 4 y tr4.. 41/1. '�': � *'"',''.',ray r• � a� 4 y tr4.. 0 k 0 7 ITY OF HOPKINS PARKING STUDY AUGUST 2013 PUBLIC PARKING SUPPLY A# WALKER PARKING CONSULTANTS PROJECT # 21-3893.00 The public parking facilities and their supply are located in the following figure. Figure 3: Public Parking Facilities i Source: City of Hopkins 440 Ramp behveen 10th & g S hr 3i 11,400 Lllth Ave S 44DB Around Ramp -south i hr 3 F kijAround Ramp - north & 3 hr 2 00C southeast �rillth Ave N, h block north of Mainstreet 11th Ave N, % block north plt of Mainstreet [ifflh Ave N, % block north of Mainstreet ,�,FLots on 91h & 0th Ave N, _% block north of Mainstreet t st St N & 9th Ave N i 1st St N & 10th Ave N Total Parking Spaces in Municipal Lots None }7 Nl on= 354 u ITY OF HOPKINS PARKING STUDY AUGUST 2013 WALKER PARKING CONSULTANTS PROJECT # 21-3893.00 The weekday evening also provides ample parking supply. Limited vehicle occupancy counts were taken in areas within the study area which serve evening activity such as the Movie Theater and restaurants/ bars. Only Lot 200 experienced significant activity at 97% occupancy. The remaining public facilities were underutilized. The on -street parking along Mainstreet between 13th Avenue and 11 th Avenue was also well utilized at around 50%. The private parking south of the movie theater was well utilized at 80% occupancy. The remaining. parking areas within the study area were underutilized. Table 3: Public Parking Occupancy Facility Name Supply Morning Occupancy Afternoon Occupancy Evening Occupancy Lot 200 67 22 28 65 Lot 300 69 53 55 2 Parking Ramp 414 141 144 194 Lot 500/500A 117 26 47 32 Lot 600 128 102 74 21 Lot 700/750 128 40 56 19 Lot 800 95 __401 44 6 Total 1,01 EF1 424 448 339 Source: Walker Parking Consultants 14 CITY OF HOPKINSA# WALKS PARKING STUDY PARKINGCONSu�i, Ts AUGUST 2013 PROJECT # 21-3893.00 Table 7: Future Development Parking Demand Block Development Name Type Units Ratio Demand 12 Vacant Restaurant Restaurant 8,000 SF 18 144 4 -Medical Office MOB 20,000 SF 4.5 90 ' 5 Rommel Property Restaurant 10,000 SF 18 180 5 Vacant Retail Retail 6,000 SF 6.1 37 6 Apartments Apartments 7 U nits 1.65 12 7 Apartment Apartments 250 U nits 1.65 413 10 HSPHD Office 91 People 1.1 100 12 Elks Redevelopment Retail 10,000 SF 6.1 61 12 Elks Redevelopment Apartments 40 Units 1 40 12 Gallery Flats Apartments 163 U nits 1.65 269 17 Johnson Building Redevelopment Hotel 150 Rooms 1.25 188 17 Johnson Building Redevelopment Restaurant 5,000 SF 18 90 17 Light Rail Transit Transit 1,200 Riders Daily 200 Excludes reductions for restaurant patrons already parked for another purpose such as work. Source: Development information provided by City of Hopkins 21 CITY OF HOPKINS WALKER PARKING STUDY PARKING CONSULTANTS AUGUST 2013 PROJECT # 21-3893.00 Figure 7: Future Development Parking Demand Source: Walker Parking Consultants The parking demand for each future development was analyzed against the existing parking availability determine the future parking adequacy. The following table outlines the future parking adequacy once the proposed developments are completed. The result of these developments includes parking inadequacies in several areas listed below and identified in the following figure. • Block 2 - An existing 8,000 square foot vacant restaurant is expected to be reopened creating an additional demand of 144 vehicles or a public parking shortage which results in an 86 spaces deficit on that block. 1►�a -1 CITY OF HOPKINS WALKER PARKING STUDY 4W PARKING CONSULTANTS AUGUST 2013 PROJECT # 21-3893.00 • Block 5 - The new brew pub and leasing of the existing 6,000 square feet of the retail is anticipated to create a parking shortage of 188 spaces on that block. • Block 4 - The potential Medical Office project located on Block 4 (Lot 700) will create a public parking shortage. This parking inadequacy is anticipated to be 109 spaces. and be generated by the new demand from the medical office as well as the loss of parking supply from Lot 700. • Block 12 - Once the Elks Lodge redevelopment is completed a parking shortage of 67 spaces is anticipated. • Block 17 - The proposed hotel and restaurant on the site of the current Johnson Building will generate a shortage of 29 spaces. Figure 8: Future Parking Inadequacy Locations Source: Walker Parking Consultants 23 TM A 0'.