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CR 2014-022 Approve Parking Lot Lease Agreement - Zion Lutheran Church Parking LotG�TY OF 4* HOPKINS February 14, 2014 Council Report 2014-022 Approve Parking Lot Lease Agreement — Zion Lutheran Church Parking Lot 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 Zion Lutheran Church for the leasing of the Zion Lutheran church parking lot. Overview. For several decades the city has benefited from the use of the Zion Lutheran parking lot adjacent to Burnes Park. Park users regularly use this parking lot in support of large and small picnic events or just for a family visit to the park. The parking lot is deteriorated and in need of rehabilitation. The City has negotiated a 25 -year lease agreement with the church — the agreement calls for the City to pay for roughly one half of the estimated $250,000 project cost. The parking lot improvements are proposed to be packaged with the contract to rehab the Hobby Acres streets. The church would reimburse the city for its share of costs and there is a provision that allows the church to pay off approximately $35,000 in yearly installments over a 5 -year period at 3.87% interest. Primary Issues to Consider. • Agreement terms and conditions Supporting information. • Proposed parking lot lease agreement • Aerial phot parking lot (. - Steven J. Stadler, Public Works Director Financial Impact: $ 125,000.00 Budgeted: Y/N N Source: Storm Sewer fund Related Documents (CIP, ERP, etc.): Notes: Council Report 2014-022 Page 2 Analysis of Issues • Agreement terms and conditions o City has non-exclusive use of the parking lot for 25 years o Early termination requires amortized payback to City of Hopkins o Zion performs all parking lot maintenance/repair except that the City agrees to sweep the parking lot once/year o Minimum $89,000 payment to City 30 days after completion of reconstruction o Zion's balance of payment due in annual installments over a 5 -year period o City carries standard insurance and indemnification of Landlord for City's use o The agreement would be recorded against the property 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 Zion Evangelical Lutheran Church of Hopkins, a non-profit corporation under the laws of Minnesota, hereinafter called "Landlord" and the City of Hopkins, a municipal corporation under the laws of Minnesota, hereinafter called "Tenant." 2. Demise and Premises. Landlord hereby leases to Tenant, and Tenant leases from Landlord, for the Term stated in Paragraph 3 of this Lease, the non-exclusive use of that part of the parking lot, driveway and access improvements (collectively "Parking Improvements") owned by Landlord and located on Landlord's real property at 241 - 50' Avenue North, Hopkins, Minnesota, outlined and designated on Exhibit A attached hereto and incorporated herein by reference. The Parking Improvements and the land on which they are located are herein referred to as the "Premises". Landlord also grants to Tenant the non-exclusive right of access and passage over that part of Landlord's property adjacent to the Premises that is improved with parking lot, driveway and access improvements for the purpose of ingress and egress to and from Minnetonka Mills Road for vehicles using the Premises for the uses and purposes stated in this Lease. 3. Term. This Lease shall commence on the shall terminate on the day of day of , 2014, and 2038, unless earlier terminated as hereinafter provided (the "Term"). Tenant shall be entitled to the use of the Premises for the purposes stated herein during the Term. 4. Rent. In consideration of Landlord's agreement to lease the Premises to Tenant, and in lieu of payment of rent, Tenant agrees to reconstruct the Parking Improvements and share in the costs of said reconstruction as set forth in Paragraph 5.b. of this Lease. Landlord agrees that the said 1 reconstruction and cost sharing by Tenant shall constitute full and fair consideration for Landlord's agreement to lease the Premises to Tenant upon the terms and conditions stated in this Lease. In the event this Lease is terminated before the end of the Term and there is no Tenant Event of Default as described in Paragraph 12, Landlord shall pay to Tenant the amount that Tenant contributed for reconstruction of the Premises reduced by a yearly amortized amount over the entire length of the Term to the actual date of the termination. 5. Use of Premises. Tenant shall use the Premises only for public parking purposes for the parking of vehicles used by persons using the adjacent City -owned public park known as Burnes Park and for City -owned maintenance vehicles while performing maintenance and repair work at Burnes Park. Landlord retains the right to use the entire Premises and all of the Parking Improvements for parking purposes and for other purposes incident to the operation of Landlord's church facility at 241 - 5 t Avenue North, Hopkins. Such use of the Premises by Landlord shall be in common with Tenant's permitted use under this Lease. Landlord shall not enter into any other leases permitting parties other than Landlord and Tenant to use or occupy the Premises. 6. Maintenance and Improvement of Premises. a. Maintenance. Landlord shall perform, at Landlord's expense, all snow plowing, snow removal, maintenance, repair, resurfacing, striping and sweeping of the Parking Improvements during the term of this Lease except as set forth in Paragraph 6.b. Landlord shall similarly maintain and repair the adjacent parking lot and access improvements providing access from the Premises to Minnetonka Mills Road. The snow removal, maintenance and repair work to be performed by Landlord shall be performed in such a manner and at such times that the Parking Improvements shall 2 remain in a condition comparable to or better than their condition on the date of this Lease and be suitable for the uses described in this Lease during its entire term. If damage is caused to the Premises or the Parking Improvements by Tenant or persons using the Parking Improvements pursuant to this Lease, Landlord may repair such damage, and Tenant shall reimburse Landlord for all reasonable costs and expenses incurred in completing such repairs. 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. Tenant shall have no obligation to reimburse Landlord for the expenses incurred by Landlord in performing snow plowing, snow removal, maintenance, repair, resurfacing, re -striping and sweeping of the Parking Improvements, except as expressly stated in this Lease. Nevertheless, Tenant shall sweep the Premises, in a manner consistent with publicly -owned parking lots in the City of Hopkins, a minimum of once per year during the Term at Tenant's sole expense. b. Improvement. Tenant shall reconstruct the Parking Improvements to City of Hopkins standards, including, but not limited to, resurfacing and stripping (the "Reconstruction"). The Reconstruction shall commence during the spring of 2014. Tenant, its employees, contractors and agents shall have the right to enter the Premises to perform the services related to the Reconstruction. During the Reconstruction, the Landlord shall not interfere with the Reconstruction and shall 3 adhere to the reasonable directions of the Tenant to allow for the Reconstruction, which may include, but are not necessarily limited to, the prohibition of the use of the Premises for parking during the Reconstruction period. The Tenant and Landlord agree to share the costs of the Reconstruction. The costs are based on the preliminary engineering estimate attached as Exhibit B. The actual costs to the Landlord and the Tenant shall be based on the quantities and contractor bid prices that are similar to those described on attached Exhibit B. The contractor shall be selected by the Tenant shall be the lowest, responsible bidder as required by Minn. Stat. §471.345. Upon completion of the Reconstruction, as determined by the Tenant, the Tenant shall send an invoice to Landlord with the actual amount of the Landlord's share of the Reconstruction (the "Actual Reconstruction Cost"). The Landlord shall make payment to Tenant of the Actual Reconstruction Cost in the amount of $89,000.00 to be paid within 30 days of delivery of the invoice, with the remaining Actual Reconstruction Cost balance being paid in even yearly installments over a 5 -year period, plus accruing interest of 3.87% per annum. The first installment shall be made on the 1 -year anniversary of the above-mentioned $89,000.00 payment and each successive installment shall made yearly thereafter on the same month and day, with each installment including principal and interest, and the Actual Reconstruction Cost, plus interest, shall be paid in full on the last installment. If Landlord fails to make any said payment, as provided above, then any unpaid amount shall accrue interest of 8% per annum and Tenant may accelerate the remaining and unpaid Actual Reconstruction Cost in the event of non-payment. n Tenant may bring an action to recover said amount and any accrued interest. In such an event, the prevailing parry shall be due from the non -prevailing party its costs and attorneys fees. 7. Alterations. No alteration or modification or improvement 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. 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 unfit for their intended use, Landlord shall undertake to repair such damage or destruction at Landlord's own expense. This Lease shall remain in full force and effect following such damage or destruction. If Landlord fails to proceed to repair such damage or destruction with commercially reasonable diligence then the Tenant may terminate this Lease with 30 days notice, and right to cure, and the Landlord shall be responsible to pay Tenant the amortized amount for the Reconstruction as set forth in Paragraph 4. The provisions of this paragraph 8 shall not be interpreted to relieve Tenant from liability for damage caused to the Parking Improvements resulting from the fault or neglect of Tenant or any person for whose conduct Tenant may be liable. 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 shall not be unreasonably withheld. 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. 10. Non -liability of Landlord; Indemnity of Landlord by Tenant. This Lease is made on the express condition that 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 any person using the Premises pursuant to this Lease, 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 by any person using the Premises pursuant to this Lease. Tenant further covenants and agrees to indemnify, save, hold harmless and defend 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 any person using the Premises pursuant to this Lease, 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 liability insurance coverage 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 liability insurance shall be in the form of and provide such types of coverage as the liability insurance policies maintained from time to time by Tenant to insure Tenant's activities and those of the public at City - owned facilities. 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. No provision of this paragraph 11 or this Lease shall be deemed to waive, limit or reduce any common law or statutory immunity from liability that may be available to Tenant, all such immunities being expressly reserved by Tenant. 12. Default and Termination. Cs a) It shall constitute an Event of Default under this Lease if Tenant shall violate or fail to perform any of the 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 reasonable diligence. b) If an Event of Default shall have occurred and be continuing, Landlord may at its sole option upon thirty (30) days prior written notice to Tenant terminate this Lease, provided this Lease shall not terminate if such default is cured within such thirty (30) day time period. 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") in accordance with law, and may remove Tenant and all other persons and property therefrom. Provided Landlord has not terminated this Lease, such Repossession shall not relieve Tenant of its liabilities and obligations under this Lease, all of which shall survive Repossession. d) Upon termination of this Lease, Tenant shall vacate the Premises, and remove all personal property, if any, belonging to Tenant therefrom. e) In the event of any litigation or arbitration proceeding to enforce the provisions of this Lease, the prevailing party in such proceeding, in addition to any damages awarded to such party, shall be entitled to an award of such prevailing party's reasonable attorneys' fees, together with the actual costs of maintaining such proceeding. 7 13. Notices. All notices or other communications provided or required by this Lease shall be in writing and shall be given to the other party as follows: To the Tenant: City of Hopkins Attn: Public Works Director 1010 First Street South Hopkins, MN 55343 To the Landlord: Zion Evangelical Lutheran Church of Hopkins Attn: 2415 Ih Avenue North 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 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 8 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 or a limitation of the scope of the particular paragraphs or sections to which they apply. 18. Covenants of Landlord. Landlord covenants it has the right to make this Lease for the term stated herein and covenants that if Tenant shall pay the rent and perform all of the covenants, terms and conditions of this Lease to be performed by Tenant, Tenant shall, during the term of this Lease, enjoy the use of the Premises in accordance with the terms of this Lease without interference or hindrance from those claiming through or under Landlord. 19. Parking Enforcement. During the term of this Lease, Tenant shall, at Tenant's expense, enforce such parking restrictions as Tenant shall deem appropriate and in accordance with the terms of this Lease in a manner consistent with the parking enforcement procedures followed by Tenant for publicly -owned parking lots in the City of Hopkins, and Tenant's rights under this Lease shall include the right to have parking enforcement personnel enter the Premises for the purpose of such enforcement. Any parking enforcement by Tenant shall be subject to the review and approval of the Landlord. While Tenant has assumed responsibility for enforcement the parking restrictions as described in this paragraph, Tenant does not warrant it will prevent the use of that part of Landlord's parking lot located outside of the Premises by members of the public and Tenant does not undertake to prevent such unauthorized uses. Tenant shall have no monetary liability to Landlord for 2 unauthorized use of the Parking Improvements or Landlord's adjacent parking lot by members of the Public. 20. Memorandum of Lease. Upon execution of this Lease, the Landlord and Tenant shall execute and cause to be recorded against the Premises a memorandum of lease, in a form reasonably acceptable both parties that memorializes the essential terms of this Lease. IN WITNESS WHEREOF, the undersigned Landlord and Tenant have executed this Lease Agreement effective as of the day of , 2014. LANDLORD: TENANT: ZION EVANGELICAL LUTHERAN CITY OF HOPKINS CHURCH OF HOPKINS By By Its Its LIM Its 10 EXHIBIT A Drawing of Landlord's Property Delineating Parking Lot Premises Subject to Lease 11 12 EXHIBIT B Preliminary Engineer's Estimate PRELIMINARY ENGINEEWS ESTIMATE 2014 HO88Y ACRIA TkAIL,13TH AVE N, 6 ZION CNUHCH PARKDICI LOT IMPROVFII IMI CITY OF N00K11N% MN ON MOJECT NM T496105M INNER sucacm Moo LOT WIM111 ITEM N0 1"M UFKT F5TfYWTFD UNIT PNCL FSTINATED OUAXTt Y FSTIMATED TOTAL PARKING LOT SURFACE WHO CHURCH COSM t _ T. 9 MCNIII VATICIN _ _ _ Np YFMPMT ANDDfi1VEWA PAVEtJPNT ONNEIVAYS ANDM.LEYS LUMP SLRA I 90,000.W YO Awl SDYO I WMI 6.50 so - 30G 40 4 RPMOYEDRAIWOE8TMGMIIE F M no _ 1 __ SSW 6 ABMDON LLT A _ _ 1.06 3000 6 SAWING CONCRETE PAVEMW LL -DEP AO 140 sw 7 SAWAQFk481TUVtr)LIGPAVEINIENI FULL -DEP OQ 10 R IIiCNWX-1r41J1IHA ION Roflr*]W EPWIA11 - ` A0 YD Cil YD S1.00 ._ W 4 90 >Li ,.Lm 11 12 13 d_ASS6AOOFtl70ATEWE AECLMMBMWINDL1EtWWACE 121NpIOLP 1 rINTMINOM WLAFUM CWFISF INEU4061 C1l YO TAN 00 sirce AO 90 M li= 650 1 700 L 10,ODO f 5e,t1u 14 WTUTANOWfAATEWALFOR MIXUTNE_ WN100 24 11 41ITUMWXCtMA EMIAL" FAGKWM GAL CLW am 1 16 a ccxWFIETE WALK 80 FT _ AQ fT ! 1101 18 6.0014CRETEPEOE61TON4RM,Pa 80 YD sw 10 500 19 MC CONMOL +QO 0.56 3 EM 20 ' SOLID LITE - WF67E EPDXY T 4000 000 21 22 1P' Si0L1DLIFE • WHTE EPDXY _. . _ .. 111REC1LARWY1V• W VE E Y___--_. 1.2bwo 00 1 23 _. V19TT.lM PAVE''A4FNr F • CH 5000159 24 26 -t;i'ODSY PO67 _. - EACH EACH _ SD.DD $1 Lo 6 26 PVUJEE-FIA 1o1CM PARKING EACH 100. 6 600 27PANEL-VIS111RPAWWIG S S 210 26 SAGN PAM NIOS-NOTENTER _ F4 IOD.OQ P 2W1 30 3 SINE:EI SWEEPER WIIH%1KA1LM ., INOMOMI1 "I R 61+u Wk 270 M YO IOD.OQ dio 53D 1,000 SUMOTOTAL . CWHYX C09T6 tufa �idTiRBkR�Y-"`- _ - . _ ESTIMATED CONSTRUCTION COST (CHURCH COSTS • SCHEDULE 0 $124,35D DRAINAGE IMPAMMENT16 PUIDUC SIDEWALK & L1n1iLMMUN0 IWY COS A 1 g S 7 TE E LLW aM L $0.0000 04 5 3. 450 4 !`OONCRETE WALK I1W S 4W n ' OONDRETEPED[STHIAN AM ,' 4 6 I iTJNCATED DdM69 10 ko- T ---- T -- .•. _ -T- �F _ LIN FT LIN Fr ou $12A0 $10DU M3 _ awo I I LAMDSCAT LALWWANDE - RWKTM REPAIR, ETC, SO YD LuW4W 2.co am Is_ I I .1,OW a 2,W 12 RAN dMOEiO EXGAVAT4DN ISO 9 1.W 13 14 RAN GARDEN PL ANT RAW t+AR HANb1VOOD MULCH f W YD 00 ___ _ 42 9,5W rr is 1 I T1c T EACH5100.00 LIN FT $1.00 5 4D0 r 8 1 EACH WCOAD K LUMP WA 19 2D SrF ET SWEVVH WITH 014"701`1 NF -I YCA3TINO Bt NOLIMQ0_ EACH _ r11I _, -- 400IE 2,2W 21 NrrHMIF+8007VLASTWG f3TOPWISfVWKJ EACH 375"D 2 Ibw 22 IVnCPIPE6LWEACLVUESIGN3CW GIOIW1 AO 40 _1,7!00 23 16' AC PIPE SEWEA CL V DESIGN 9000 STC"Al $40.00 225 9 SAW 24 CONST OFIAINAGE S I FIUCI DES 4M--4-8* H t 1 2,z+ me 27.. txlll Dl4aw sF `TWErw- t x_ BP41IN TIE ITIM101 DE ECr TCt C1Q LTIN3 L>FiMNAt3E STiWGTURE H EACH -- _ EACIi 160000 1 fiC0�0 .00 2 2 611 }__-- 7W LIBTOTAL- COBTB ESTIMATED ODNMUaM COSTS (CffVJSCIiEDIUL9 D . - _ 75,450 13