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HomeMy WebLinkAboutItem 06.c Date: Item No. CITY HALL LEASE AGREEMENT WITH DAKOTA COUNTY FOR TEMPORARY LICENSE CENTER Proposed Action Staff recommends adoption of the following motion: Move to approve a lease agreement with Dakota County for space located at city hall for a temporary license center. Overview The Heritage Library and License Center will be closed beginning this fall for renovation. Dakota County staff approached the City about available space within the city for temporary space, and together we identified approximately 910 square feet of unused office space adjacent to the parks and recreation department in city hall. This space will be used primarily for their license center activities, but there will also be limited library pick up and drop off capabilities. Staff sees this as an opportunity to be a good steward of shared public resources between the City and County, as well as an opportunity to showcase city activities to people who normally would not visit city hall. Primary Issues to Consider • What are the terms of the proposed lease? 1) Dakota County will lease the property for $1500/month (roughly $19.78/sf annually) 2) The lease will begin November 15th, 2018 (so as not to interfere with election activities) and will end by October 31, 2019 3) All leasehold improvements (with the exception of fiber and communications equipment) will be the responsibility of the County, and they will be responsible for returning the property to pre-lease condition 4) County activities will only occur during normal city hall business hours 5) Either party may terminate the lease with 30 days written notice Supporting Information • Proposed Lease Agreement Financial Impact: $ Budgeted: Y☐ N☒ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Good Value for Public Services Report Completed by: Justin Miller, City Administrator 18,000 revenue September 17, 2018 1 197569v4 LEASE AGREEMENT THIS LEASE AGREEMENT is made by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation, (“City”) and DAKOTA COUNTY, a political subdivision of the State of Minnesota (“County”). The parties mutually agree as follows: 1. LEASED PREMISES. Subject to the terms and conditions of this Lease, City leases to County and County rents from City, the areas identified as the “Leased Premises” on Exhibit A attached hereto within the Lakeville City Hall building (“Building”) located on the property at 20195 Holyoke Avenue, Lakeville, MN 55044, (the “Property”), legally described as Lot 1, Block 1, Heritage Library Addition, Dakota County, Minnesota, according to the recorded plat thereof, containing approximately 910 square feet of rentable space, hereinafter referred to as the “Leased Premises.” County, its officers, its agents, employees, customers or invitees, shall be allowed the use of the common areas within the Building, and exterior walkways and parking areas. 2. TERM. The term of this Lease (the “Term”) shall commence on November 15, 2018 (the “Commencement Date”), and end on midnight on October 31, 2019 (the “Expiration Date”), unless this Lease shall be sooner terminated as hereinafter provided. 3. RENT. As and for Rent of the Leased Premises, the County shall pay to the City $1,500.00 per month. Rent shall be paid on the Commencement Date and thereafter on the 1st day of each month during the term of the Lease, partial months shall be pro-rated. County's failure to make any monetary payment required of County hereunder within fifteen (15) days of the due date therefore shall result in the imposition of a service charge for such late payment in the amount of Seventy-five and No/100 Dollars ($75.00). In addition, any sum not paid within thirty (30) days of the due date therefore shall bear interest at a rate equal to the lesser of eighteen percent (18%) or the maximum amount permitted by law from the date due until paid. 4. UTILITIES AND SERVICES. (a) Utilities and Services. The City shall furnish for the use of the County at no cost the following utilities: i. Cost of all heating, ventilation and air conditioning of the Leased Premises including electrical and gas; ii. Cost of all electricity for lighting and operating business machines and other equipment in the Leased Premises; iii. Cost of all gas; iv. Cost of all water and sewer; v. Costs of refuse and recycling services; vi. Cost of all replacement of all overhead lighting; vii. Janitorial services. 2 197569v4 County agrees to observe reasonable precautions to prevent waste of heat, electricity, water, air- conditioning or any other utility or service, whether such is furnished by City, or obtained and paid for by County. (b) Additional Services. If County requests any other utilities or building services in addition to those identified above the cost thereof shall be borne by County, who shall reimburse City monthly for the same. (c) Interruption of Services. County understands, acknowledges and agrees that any one or more of the utilities or other building services identified above may be interrupted by reason of accident, emergency or other causes beyond City's control, or may be discontinued or diminished temporarily by City or other persons until certain repairs, alterations or improvements can be made; that City does not represent or warrant the uninterrupted availability of such utilities or building services; and that any such interruption shall not be deemed an eviction or disturbance of County's right to possession, occupancy and use of the Leased Premises or any part thereof, or render City liable to County in damages by abatement of rent or otherwise, or relieve County from the obligation to perform its covenants under this Lease. 5. TAXES AND ASSESSMENTS. Taxes and Assessments shall mean all real estate taxes levied or assessed upon or with respect to the land or improvements comprising the Property including the Building or Rent or other sums payable hereunder. If, at any time during the Term of this Lease, a tax or excise on rents or income or other tax however described is levied or assessed by the United States or the State of Minnesota, or any political subdivision thereof, on account of the Rent hereunder or the interest of the City under this Lease, such tax or excise shall constitute and be included as a tax hereunder and shall be paid by the County. Should the State of Minnesota or any political subdivision thereof, or any other governmental authority having jurisdiction over the Property impose a tax, assessment, charge, or fee, which the City shall be required to pay, wholly or partially, in substitution for or as a supplement to such real estate taxes or levy against the land, or Building, to the extent that the same is in substitution for or as a supplement to said real estate taxes, such taxes, assessments, fees or charges shall be deemed to constitute taxes hereunder and shall be paid by the County. Notwithstanding the foregoing, taxes shall not include any tax on the City’s income. 6. LEASEHOLD IMPROVEMENTS. Except for installation of fiber and other communication equipment, no leasehold improvements shall be made by the County to the Leased Premises without approval by the City. The County shall be solely and exclusively responsible for the cost of any leasehold improvements approved by the City. All such improvements shall comply with the State Building Code and all federal, state and local regulation. Installation and location of fiber and communication improvements requires prior approval by the City Public Works Director. Plans and specifications for all approved improvements shall be provided to the City within 30 days of completion of the improvements. The County will indemnify the City and save it harmless from and against any and all claims, actions, suits at law or equity, judgments, expenses, costs, liabilities, fines and debts in connection with any injury, loss or damage associated with the improvements. The County, its contractors or agents, shall complete construction of any and all improvements in a good and workmanlike manner, utilizing new and first grade material, in conformity with all applicable federal, state, and local laws, ordinances, rules, regulations, building codes, fire regulations and applicable insurance requirements. Unless otherwise approved by the City, all leasehold 3 197569v4 improvements shall be removed upon termination of the Lease, and the County shall return the Leased Premises to its pre-lease condition. 7. DELIVERY OF POSSESSION. County acknowledges that it has inspected the Leased Premises and accepts the Leased Premises “as is”. City makes no representations as to the repair of the Leased Premises and that no promises to alter, remodel or improve the Leased Premises have been made by the City except as provided under this Agreement and County agrees to make any repairs necessary for County to use the Leased Premises. 8. USE OF THE LEASED PREMISES. (a) Specific Use / “As is” Basis. The Leased Premises shall be occupied and used exclusively for the County’s license center, and limited library use and shall not be used for any other purpose, without written permission of the City. County hereby accepts the Leased Premises on an “as is” basis without any representations or warranties by City as to its fitness for County’s business or use or for any other particular purpose except as expressly set forth herein. (b) Covenants Regarding Use. In connection with its use of the Leased Premises, County agrees to do the following: i. County shall use the Leased Premises and conduct its business thereon in a safe, careful, reputable and lawful manner; shall keep and maintain the Leased Premises in as good a condition as they were when County first took possession thereof, ordinary wear and tear excepted, and shall make all necessary repairs to the Leased Premises other than those which City is obligated to make as provided elsewhere herein. ii. County shall not commit, nor allow to be committed, in, on or about the Leased Premises any act of waste, or use or permit to be used on the Leased Premises any hazardous substance, equipment or other thing which might cause injury to person or property or increase the danger of fire or other casualty in, on or about the Leased Premises; permit any objectionable or offensive noise or odors to be emitted from the Leased Premises; or do anything, or permit anything to be done, which would, in City's opinion, disturb or tend to disturb other users of the Building. iii. County shall not overload the floors, ceilings, or walls of the Leased Premises beyond their designed weight-bearing capacity. City reserves the right to direct the positioning of all heavy equipment, furniture and fixtures which County desires to place in the Leased Premises so as to distribute properly the weight thereof, and to require the removal of any equipment or furniture which exceeds the weight limit specified herein. iv. County shall not use the Leased Premises, nor allow the Leased Premises to be used, for any purpose or in any manner which would, in City's opinion, invalidate any policy of insurance now or hereafter carried on the Leased Premises or increase the rate of premiums payable on any such insurance policy. Should County fail to comply with this covenant, City may, at its option, require County to stop engaging in such activity or to reimburse City for any 4 197569v4 increase in premiums charged during the term of this Lease on the insurance carried by City on the Leased Premises and attributable to the use being made of the Leased Premises by County. v. County’s use of the Leased Premises shall be consistent with the normal business hours of operation of the Building. vi. County shall comply with all City rules and regulations concerning the use of the Leased Premises, Building and Property. (c) Compliance with Laws. County shall not use or permit the use of any part of the Leased Premises for any purpose prohibited by law. 9. SIGNS. County shall not inscribe, paint, affix or display any signs, advertisements or notices on the Leased Premises or in the Leased Premises and visible from outside the Leased Premises, except for such signage, advertisements or notices as City at City’s discretion specifically permits by written consent. All signs shall comply with all ordinances, rules and regulations of the City. 10. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES. (a) Except as set forth herein, County shall, at its expense, make any necessary repairs to the Leased Premises, Building and Property and every part thereof, ordinary wear and tear excepted, including the heating, air conditioning, electrical and plumbing equipment and facilities servicing the Leased Premises and Building and, such other repairs which may be required by reason of acts or negligence of County, its agents, employees, customers or invitees, or the particular nature of County's use of the Property. County shall be responsible for repairing any damage to the Property and Building caused by the installation or moving of County's furniture, equipment and personal property. (b) Except as otherwise provided herein, in the event that, at the request of County, City, at its option, performs any maintenance, repairs or servicing of the Building or Property which is the obligation of County hereunder, then County shall pay City directly therefor. In the event there is any warranty in effect in connection with repairs or replacements made by County and if City is unwilling to pursue the warranty claim, then County shall have the right to pursue the warranty claim in connection with the repair and/or replacement made by County. (c) Upon expiration or earlier termination of this Lease, County shall surrender the Leased Premises to City broom clean and in good condition and repair, normal wear and tear excepted. (d) County shall, at County’s expense, promptly repair all damage caused by the County to the Leased Premises and replace or repair all damaged or broken fixtures, equipment and appurtenances with materials equal in quality and class to the original materials, under the supervision and subject to the approval of City, and within any reasonable period of time specified by City. If County fails to do so, City may, but need not make such repairs and replacements, and County shall pay City the cost thereof, including City's Costs, forthwith upon being billed for same. As used in this Lease, the term "City's Costs" shall mean five percent (5%) of any costs or expenses paid by City, in order to reimburse City for all overhead, general conditions, fees and other costs and expenses arising from City's actions or involvement. 5 197569v4 (e) Reserved Rights. City reserves the right to make, at any time or times, at its own expense, repairs, alterations, additions and improvements, structural or otherwise, in or to the Leased Premises and the Building, and to perform any acts related to the safety, protection or preservation thereof, and during such operations to take into and through the Leased Premises or any part of the Building all material and equipment required and to close or temporarily suspend operation of entrances, doors, corridors, or other facilities, provided that City shall cause as little inconvenience or annoyance to County as is reasonably necessary in the circumstances, and shall not do any act which permanently reduces the size of the Leased Premises. City may do any such work during ordinary business hours and County shall pay City for overtime and for any other expenses incurred if City agrees to conduct such work during other hours as requested by County. 11. MAINTENANCE AND REPAIRS. It shall be the duty of the City to maintain at its own expense, in working condition, all appurtenances within the scope of this Lease Agreement, including the maintenance of proper plumbing, wiring, heating (and, where applicable, cooling) devices and ductwork. City shall, at its own expense, make such necessary repairs, so as to continue to provide all such service appurtenances as are required by this Lease Agreement, provided, however, that City shall not be responsible for repairs upon implements or articles which are the personal property of County, nor shall the City bear the expense of repairs to the Leased Premises necessitated by damage caused by County beyond normal wear and tear. 12. ASSIGNMENT AND SUBLETTING. County may not assign or otherwise transfer its interest in this Lease or sublet the Leased Premises or any part thereof without the express, prior written consent of City. Any sublease of the Leased Premises must be consistent with County’s use of the Leased Premises. Sub-leases must provide the same level of insurance required under this Lease and must be reviewed by City’s legal counsel prior to final approval by City. 13. DEFAULTS AND REMEDIES. (a) Default by County. The occurrence of any one or more of the following events shall be a default and breach of this Lease by County: i. County shall fail to pay any monthly installment of Rent or any other charges set forth in this Lease within fifteen (15) days after the same shall be due and payable. ii. County shall fail to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease for a period of thirty (30) days after notice thereof from City; provided, however, that if the term, condition, covenant or obligation to be performed by County is of such nature that the same cannot reasonably be performed within such thirty-day period, such default shall be deemed to have been cured if County commences such performance within said thirty-day period and thereafter diligently undertakes to complete the same, but in any event completes cure within ninety (90) days after notices from City. 6 197569v4 iii. County shall vacate or abandon or fail to occupy for a period of thirty (30) days, the Leased Premises or any substantial portion thereof; or iv. County causes or permits a hazardous condition to exist on the Leased Premises and fails to cure such condition immediately after notice thereof from City. (b) Remedies of City. Upon the occurrence of any event of default set forth in this Lease, City shall have the following rights and remedies, in addition to those allowed by law, any one or more of which may be exercised without further notice to or demand upon County: i. City may re-enter the Leased Premises and cure any default of County, in which event County shall reimburse City for any costs and expenses which City may incur to cure such default; and City shall not be liable to County for any loss or damage which County may sustain by reason of City’s action, regardless of whether caused by City’s negligence or otherwise. ii. City may terminate this Lease as of the date of such default, in which event: (1) Neither County nor any person claiming under or through County shall thereafter be entitled to possession of the Leased Premises, and County shall immediately thereafter surrender the Leased Premises to City; (2) City may re -enter the Leased Premises and dispossess County or any other occupants of the Leased Premises by summary proceedings, ejectment or otherwise, and may remove their effects, without prejudice to any other remedy which City may have for possession or arrearages in rent; (3) Notwithstanding the termination of this Lease, County shall be responsible for payment of all of City’s cost and expenses for any repairs required for County’s failure to maintain the Leased Premises, Building or Property pursuant to Paragraph 10. The liabilities and remedies specified herein shall survive the termination of this Lease. iii. City may sue for injunctive relief or to recover damages for any loss resulting from the breach. iv. County is responsible for any charges that have been forgone by the City including, but limited to, prorated property taxes in the year of default and the year following default. Any agreement for an extension of the Term or any additional period thereafter shall not thereby prevent City from terminating this Lease for any reason specified in this Lease. If any such right of termination is exercised by City during the Term or any extension thereof, County's right to any further extension shall thereby be automatically canceled. Any such right of termination of City contained herein shall continue during the Term and any subsequent extension hereof. (c) Default by City and Remedies of County. City shall not be deemed to be in default under this Lease until County has given City written notice specifying the nature of the default and 7 197569v4 City does not cure such default within thirty (30) days after receipt of such notice or within such reasonable time thereafter as may be necessary to cure such default where such default is of such a character as to reasonably require more than thirty (30) days to cure. City failure to cure its defaults under this Lease shall entitle County to terminate the Lease immediately, and pursue claims for any damages caused County by City’s default hereunder, in addition to such other rights and remedies as may exist under applicable law. (d) Waiver of Covenants. Failure of City to insist, in any one or more instances, upon strict performance of any term, covenant, condition, or option of this Lease, or to exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such term, covenant, condition, or option, but the same shall continue and remain in full force and effect. The receipt by City of rents with knowledge of breach in any of the terms, covenants, conditions, or options, of any of this Lease to be kept or performed by County shall not be deemed a waiver of such breach, and City, shall not be deemed to have waived any provision of this Lease unless expressed in writing and signed by City. 14. ACCESS TO THE LEASED PREMISES. City, its employees and agents of the Leased Premises shall have the right to enter any part of the Leased Premises at all reasonable times for the purposes of examining or inspecting the same and for making such repairs, alteration or improvements to the Leased Premises as City may deem necessary or desirable. If representatives of County shall not be present to open and permit such entry into the Leased Premises at any time when such entry is necessary or permitted hereunder, City and its employees and agents may enter the Leased Premises by means of a master key or otherwise, City shall incur no liability to County for such entry, nor shall such entry constitute an eviction of County or a termination of this Lease, nor entitle County to any abatement of rent therefore. 15. INSURANCE AND LIABILITY. (a) It shall be the duty of City and County to maintain insurance or self-insurance on their own property, both real and personal. Notwithstanding anything apparently to the contrary in this Lease Agreement, City and County hereby release one another and their respective partners, officers, employees and property manager from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for loss or damage, 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. (b) City and County agree that each party will be responsible for its own acts and the results thereof to the extent authorized by law and shall not be responsible for the acts of any others and the results thereof. Liability shall be governed by the provisions of the Minnesota Tort Claims Act, Minnesota Statutes, Section 466.04, and other applicable law. 16. FIRE OR OTHER CASUALTY. If the Leased Premises shall be destroyed or damaged by fire, tornado, flood, civil disorder, or any cause whatsoever, so that the Leased Premises become untenantable, the rent shall be abated from the time of such damage and the County shall have the option of terminating this Lease Agreement immediately or allowing the City such amount of time as the County deems reasonable to restore the damaged premises to tenantable condition. 8 197569v4 17. TERMINATION. City may terminate this Lease as authorized under the provisions of this Agreement. In addition to any other provisions for termination under this Agreement, County may terminate this Lease upon thirty (30) days’ written notice to City. 18. SURRENDER OF LEASED PREMISES. Upon the expiration, or earlier termination, of this Lease, County shall surrender the Leased Premises to City, together with all keys, access cards, alterations, improvements, and other property as provided elsewhere herein, in broom-clean condition and in good order, condition and repair, except for ordinary wear and tear and damage which County is not obligated to repair, failing which City may restore the Leased Premises to such condition at County's expense, which shall be payable upon demand. Alterations and fixtures attached to the Leased Premises shall remain a part thereof and shall not be removed unless City elects to permit removal. Upon such expiration or termination County's trade fixtures, furniture and equipment shall remain County's property and County shall have the right to remove the same prior to the expiration or earlier termination of this Lease, County shall promptly repair any damage caused by any such removal, and shall restore the Leased Premises to the condition existing prior to the installation of the items so removed. Any of County's trade fixtures, furniture or equipment not so removed shall be considered abandoned and may be retained by City or be destroyed. Any wiring or cabling installed by County in the Leased Premises or in shafts or ducts shall, at City’s request, be removed by County at County's expense on or before the Expiration Date or earlier termination of this Lease. If County fails to remove any such wiring or cabling, City may have the same removed at County's expense. In addition, upon expiration or earlier termination of the Lease, the County will promply clean the carpet of the Leased Premises and the length of the hallway abutting the Leased Premises to the Building exits. 19. QUIET ENJOYMENT. Except as may be provided in this Lease to the extent that it may be applicable, if and so long as County pays the prescribed Rent and performs or observes all of the terms, conditions, covenants and obligations of this Lease required to be performed or observed by it hereunder, County shall at all times during the term hereof have the peaceable and quiet enjoyment, possession, occupancy and use of the Leased Premises without any interference from City or any person or persons claiming the Leased Premises by, through or under City, subject to any mortgages, underlying leases or other matters of record to which this Lease is or may become subject. 20. FORCE MAJEURE. All of the obligations of City and of County under this Lease are subject to and shall be postponed for a period equal to any delay or suspension resulting from fires, strikes, acts of God, and other causes beyond the control of the party delayed in its performance hereunder, this Lease remaining in all other respects in full force and effect and the Term not thereby extended. 21. NOTICE AND PLACE OF PAYMENT. (a) All rent and other payments required to be made by County to City shall be delivered or mailed to City at the address set forth below or any other address City may specify from time to time by written notice given to County. 9 197569v4 (b) All payments required to be made by City to County shall be delivered or mailed to County at the address set forth in Paragraph 21(c) hereof or at any other address within the United States as County may specify from time to time by written notice given to City. (c) Any notice, demand or request required or permitted to be given under this Lease or by law shall be deemed to have been given if reduced to writing and mailed by Registered or Certified mail, postage prepaid, to the party who is to receive such notice, demand or request at the address set forth below or at such other address as City or County may specify from time to time by written notice. When delivering such notice, demand or request shall be deemed to have been given as of the date it was so delivered or mailed. City: City of Lakeville 20195 Holyoke Avenue Lakeville, MN 55044 Attention: City Administrator With a copy to: City Attorney Campbell Knutson P.A. 860 Blue Gentian Road, Suite 290 Eagan, MN 55121 County: Dakota County 1590 Highway 55 Hasting, MN 55033 Attention: Michael Lexvold With a copy to: County Attorney’s Office Attn: Civil Division 1560 Highway 55 Hastings, MN 55033 22. MISCELLANEOUS GENERAL PROVISIONS (a) Applicable Law. This Lease and all matters pertinent thereto shall be construed and enforced in accordance with the laws of the State of Minnesota. (b) Entire Agreement. This Lease, including all Exhibits and Addenda, constitutes the entire agreement between the parties hereto and may not be modified except by an instrument in writing executed by the parties hereto. (c) Binding Effect. This Lease and the respective rights and obligations of the parties hereto shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto as well as the parties themselves; provided, however, that City, its successors and assigns shall be obligated to perform City's covenants under this Lease only during and in respect of their successive periods as City during the term of this Lease. 10 197569v4 (d) Severability. If any provision of this Lease shall be held to be invalid, void or unenforceable, the remaining provisions hereof shall not be effected or impaired, and such remaining provisions shall remain in full force and effect. (e) Time of Essence. Time is of the essence of this Lease and each of its provisions. (f) Recording of Lease. Neither City nor County shall record this Lease. IN WITNESS WHEREOF, the parties have by their duly authorized officers, executed this Lease Agreement, intending to be bound thereby. CITY OF LAKEVILLE By ______________________________ Douglas P. Anderson, Its Mayor And: _____________________________ Charlene Friedges, Its City Clerk COUNTY OF DAKOTA By: ___________________________ ______________ Its: ___________________________ Approved as to Form ____________________________________ Assistant County Attorney Date 11 197569v4 EXHIBIT A DEPICTION OF LEASED PREMISES