CR 2014-029 Approve Parking Lot Lease Agreement - City Parking Lot 750G, TY OF
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NOPKINS
March 14, 2014
Council Report 2014-029
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 an expected short term demand until the Green Line
Extension Light Rail is operational. 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. 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 $23,500/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 tenant must provide 3 parking stalls to the
owners of the adjacent Professional Building at 29 9t" Ave N at a cost of
$300/stall + retain one of the existing handicap parking stalls. The City can
terminate the lease by giving a 180 -day written notice in the event that a
redevelopment project is being considered which impacts this property.
Supporting information.
• Proposed parking lot lease agreement
• erial view nd photos of parking lot 750
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 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 30th 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 Landlord not less than one hundred twenty (120) days prior to the
effective date of the Lease termination. In addition to the termination provision in Paragraph 12
below, the Landlord may terminate the Lease with notice to Tenant not less than one hundred eighty
days prior to the effective date of the Lease termination 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 ("HRA") and the Project includes use of some or all
Hopciv\GalleryFlars\Lotlease
of the Premises. 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 13 of
the Lease, annual rent in the amount of Twenty-four thousand and 00/100 dollars ($23,500.00), 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
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 and for providing a maximum of five (5) parking stalls for exclusive use by the owners of
Hopciv\GalleryFlarsTotlease
the adjacent professional building located at 29 9th Avenue N, (hereinafter "Professional Building
Owners"). These five stalls shall be located along the north edge of the 29 9th Avenue N building, at
the southwest corner of the parking lot. Tenant shall charge the Professional Building Owners a fee no
greater than $300/stall/year for each parking stall. Additionally, tenant shall provide one handicapped
user (ADA) parking stall located north of and adjacent to the 9th Avenue entrance to the parking lot.
There shall be no rent charged for the one handicapped stall. Terms regarding payment, default and
termination for these five parking stalls shall be set by separate agreement between Tenant and
Professional Building Owners. Tenant annual rent amount, as stipulated in para 4.,will be reduced by
$350 for each parking stall provided to the Professional Building Owners. 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
Hopciv\Gal IeryFlarALotlease
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.
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., and subject to the terms in
Hopciv\Gal leryFlarsTotlease
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 and Professional Building Owners as set
forth in Paragraph 5.. 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 or Professional Building
Owners. However, the Tenant's annual aggregate charges for all of the Premises parking spaces paid
for by the Gallery Flats occupants and Professional Building Owners, as 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
Hopciv\GaI leryFlars\L.otlease
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.
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 effective immediately. Neither the passage of
time after the occurrence of the Event of Default nor exercise by Landlord of 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
Hopciv\GalleryFlars\Lotlease
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
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 Mornson, City Manager
1010 First Street South
Hopkins, MN 55343
Copy to: Hoff, Barry & Kozar, P.A.
775 Prairie Center Drive, Suite 160
Eden Prairie, Minnesota 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
Hopciv\Ga11eryF1ars\Lot1ease
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
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 shall erect signs
on the Premises giving notice that the Parking Improvements are reserved for the exclusive use of
Tenant's designees. The lease between the Tenant and the Professional Building Owners shall
Hopciv\GalleryFlars\Lotlease
provide that the Professional Building Owners may erect signs reserving their parking stalls for their
exclusive use. 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.
IN WITNESS WHEREOF, the undersigned Landlord and Tenant have executed this Lease
Agreement effective as of the day of , 2014.
LANDLORD: TENANT:
CITY OF HOPKINS Sidal Realty Co. Limited Partnership, LLLP
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