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HomeMy WebLinkAboutRESOLUTION NO. 2016-56 Fairfax/419915-23/City)IallSubleasc—I Irg/nppry Hearing/Approval/City Hall Sublease 419915-23 Fairfax, Iowa June 14, 2016 The City Council of the City of Fairfax, Iowa, met on June 14, 2016, at 6:00 o'clock p.m., at 525 Vanderbilt Street, Fairfax, Iowa. The meeting was called to order by the Mayor, and the roll was called showing the following Council Members present and absent: Present: JoAnn Beer, Mike Daly, Joe Kell, Nick Volk and Marianne Wainwright Absent: None. This being the time and place specified for taking action on the proposal to enter into a sublease with Guaranty Bank & Trust Company for property to be used as the city hall, the Mayor called for any written or oral objections. Written objections were filed by the following: None Oral objections were made by the following: Mary Catherine Selzer asked if the amount in the hearing notice was for only one year. She was informed that was a not to exceed number for three years and offered information about the specifics of each year's projected expenses. She had no further questions nor any objections. Whereupon, the Mayor declared the hearing closed. -1- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Fairfax/419915-23/CityHallSublease—I Irg/Appry After due consideration and discussion, Council Member Kell introduced the resolution next hereinafter set out and moved its adoption, seconded by Council Member Daly. The Mayor put the question upon the adoption of said resolution, and the roll being called, the following Council Members voted: Ayes: Beer, Daly, Kell, and Wainwright Nays: Volk. Whereupon, the Mayor declared the resolution duly adopted as hereinafter set out. -2- DORSEY & WHITNEY LLP,ATTORNEYS, DES MOINES, IOWA Fairfax/419915-23/CityFlallSublease—I Irg/nppry RESOLUTION NO. 2016-56 APPROVING AND AUTHORIZING A SUBLEASE WITH GUARANTY BANK & TRUST COMPANY WHEREAS, the City of Fairfax (the "City"), in Linn County, State of Iowa, has heretofore proposed to enter into a sublease (the "Sublease Agreement") with Guaranty Bank & Trust Company, in a principal amount not to exceed $350,000, pursuant to the provisions of Section 364.4 of the Code of Iowa, with respect to certain property located at 300 8`I' Street Court for use by the City as a city hall, and has published notice of the proposed action and has held a hearing thereon, and the Council may now authorize and approve the Sublease Agreement; NOW, THEREFORE, Be It Resolved by the City Council of the City of Fairfax, Iowa, as follows: Section 1. The City Council hereby determines to enter into the Sublease Agreement with Guaranty Bank & Trust Company as sublessor, in substantially the form that has been placed on file with the City Clerk, providing for a sublease to the City of property located at 300 8t1' Street Court for a term of three years, with two consecutive one-year options, with rent in the amount of $60,000 annually, for the purpose set forth in the preamble hereof, provided that all payments of rent shall be subject to annual appropriation by the City Council. Section 2. The Sublease Agreement is hereby approved, and the Mayor and City Clerk are hereby authorized to execute the Sublease Agreement on behalf of the City and also to execute all related documents. Section 3. All resolutions or parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Passed and approved June 14, 2016. Burnell G. Frieden, Mayor Attest: 2k Cynt is K. Stimson, City Clerk/Treasurer -3- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Fairfax/4199 15-23/City)IallSublcasc—I Irg/nppry On motion and vote, the meeting adjourned. Burnell G. Frieden, Mayor Attest: Cynt p is K. Stimson, City Clerk/Treasurer -4- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Fairfax/419915-23/Cilyl lallSublease—I Irg/Appry STATE OF IOWA COUNTY OF LINN SS: CITY OF FAIRFAX 1, the undersigned, City Clerk of the City of Fairfax, Iowa, do hereby certify that as such City Clerk I have in my possession or have access to the complete corporate records of the City and of its Council and officers and that I have carefully compared the transcript hereto attached with the aforesaid corporate records and that the transcript hereto attached is a true, correct and complete copy of all the corporate records in relation to the authorization and approval of a certain Sublease Agreement, and that the transcript hereto attached contains a true, correct and complete statement of all the measures adopted and proceedings, acts and things had, done and performed up to the present time with respect thereto. I further certify that no appeal has been taken to the District Court from the decision of the City Council to enter into the Sublease Agreement. WITNESS MY HAND this 17`" day of Tune, 2016. Cyntl Ya K. Stimson, City Clerk/Treasurer -5- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA SUBLEASE AGREEMENT T]IIS SUBLI ASE: AGREI:ME_`NT, made and entered into this (,Ltt11 2016. by and between Guaranty Bank and Trust Company ("Sublessor"), whose address, for the purpose ol' this lease is 302 Third Ave SE, Cedar Rapids, IA 52401, and City of Fairfax, Iowa ("Sublessee"). whose address for the purpose of this lease is Fairfax, Iowa. The parties agree as follows: 1. PREMISES AND TERM. Sublessor leases to Sublessee the following real estate, situated in Linn County, Iowa: Lot 1, Prairie Creek Estates Second Addition to the City of Fairfax, Linn County, Iowa together with all improvements thereon, and all rights, casements and appurtenances thereto belonging,however, excepting therefrom and/or subject thereto: a) a drive-up ATM on the parcel, and the necessary area for the drive-up to and from the ATM, to be operated and maintained by Sublessor: and b) the area of the vault in the building that houses Suhlessor's safe deposit boxes: and C) the rights and privileges of all guests who have reserved the community room on the premises as of /1 „( 2016, which reservations Sublessee is aware of and agrees to honor and abide by. for a tern beginning on July I, 2016, and ending on June 30, 2019, upon the condition that Sublessee performs as provided in this Sublease. Providing Sublessee is not in default Sublessor grants Sublessee two successive options to extend this Sublease, each for a 1 year term. Sublessee shall give Sublessor notice of its exercise of each option 90 days or more prior to the termination of the Sublease term then in effect. 2. RENT. Sublessee agrees to pay Sublessor as rent $60,000.00 per year, payable in two equal payments of$30,000.00 on July I and January 1 beginning on July 1, 2016 for the terns of this Sublease. Rent for any partial year shall be prorated as additional rent. All payments of rent shall be subject to annual appropriation by the City Council of the Sublessee. All sums shall be paid at the address of Sublessor, or at such other place as Sublessor rnaN designate in writing. Delinquent payments shall draw interest at 5% per annum. In addition to Rent, see paragraph 9, below. 3. POSSESSION. SubleSsee shall be entitled to possession on the first day of the sublease term, and shall yield possession to Sublessor at the termination of this Sublease. 4, USE. Sublessee shall use the premises only for lawful purposes. 5. CARE AND MAINTENANCE. (a) Sublessee shall keep the following in good repair: elevator, interior decorating. irticriol. plumbing, security system (except for the security system for Sublessor's vault area where it is keeping its safe deposit boxes)and building locks after locks are re-keyed or replaced by Sublessor. (b) Sublessor shall keep the following in good repair: roof, exterior walls, foundation, sewer, plumbing external to the building, heating, wiring, air conditioning, plate glass. vtiindovys and window glass. Sublessee grants Sublessor reasonable access to inspect the roof at least annually. (c) Sublessee shall maintain the premises in a reasonable safe, serviceable. clean and presentable condition. and except for the repairs and replacements provided to be made by Sublessor in subparagraph (b) above, shall make all repairs, replacements and improvements to the premises, including all changes, alterations or additions ordered by any lawfully constituted government authority directly related to Sublessee's use of the premises. Sublessee shall make no structural changes or alterations without the prior written consent of Sublessor. SUhIeSSee shall provide for its garbage and other waste collection, its interior cleaning and janitorial service. including toilet paper, paper towels all light bulb replacement, all other supplies, and all windovt washing. 6. UTILITIES AND SERVICES. Sublessee shall pay for all utilities and services "hich may be used on the premises. Sublessor shall not be liable for damages for failure to perforn1 as herein provided,or for any stoppage for needed repairs or for improvements or arising from causes beyond the control of Sublessor, provided Sublessor uses reasonable diligence to resume such services. 7, SURRENDER. Upon the termination of this sublease or any sublease extension, Sublessee will surrender the premises to Sublessor in good and clean condition,except for ordinary wear and tear or damage without fault or liability of Sublessee. Continued possession, beyond the term of this Sublease and the acceptance of rent by Sublessor shall constitute a month-to-month extension of this sublease. 8. ASSIGNMENT AND SUBLETTING. No assignment or subletting, either voluntary or by operation of law, shall be effective without the prior written consent of Sublessor, which consent shall not unreasonably be withheld. 9. REAL ESTATE TAXES AND COMMON AREA MAINTENANCE The subject premises is part of a larger commercial center located on I.,ots I, ? and 3. Prairie Creek Estates Second Addition to the City of'Fairfax, Linn County, Iowa. A. In addition to Rent, Sublessee shall also pay the annual real estate taxes for L,ot l, where Sublessee's Premises is primarily situated. Sublessor. or its agent, shall estiniatc the annual taxes for said Lot I and Sublessee shall pay one half'(1/2) thercol'evcry six months. in advance, together with the payment of rent. Sublessor or its agent shall reconcile actual real estate ta\cs for said I c)t I within ninety (90)days following end ofcalendar year. In the event the aggregate of Suhlcsscc's installments during the year shall be less than the amount of taxes due from Sublessee, such deficiency shall be paid to Sublessor or its agent within ten (10) days after demand therefore. In the event the aggregate of'Sublessee's installments during the year shall be greater than the amount of taxes due from Sublessee, such overage shall be applied to the following year's tax hill, unless said overage occurs during the last year of the term, in which case the Sublessee shall be reimbursed for any overage within ten (10) days of'reconciliation. 13. In addition to Rent. Sublessee shall also pay Sublessee's share of the annual common arca maintenance expenses which shall be computed by multiplying the total amount of the annual common area maintenance expenses for bots I. 2 and 3, Prairie Creck Btates Second Addition to the City of Fairfax, Linn County, Iowa by a fraction, the numerator of'which shall he the nUn1bc1_ of square feet in the subject premises, and the denominator of which shall be tire total number of square feet of developed space that makes up the commercial center located on Lots L 2 and 3. Sublessor shall estimate the common area maintenance expenses and Sublessee shall pay one half (1/2) thereof every six months in advance, together with the payment of rent. Sublessor shall reconcile and adjust Sublessee's portion of the common area maintenance expenses with the actual common area maintenance expenses in the same manner as provided for property taxes in Section 9A above. In no case shall CAM include any capital improvements. T-he annual increase in controllable common areas expenses is limited to seven percent (7%) of' the prior years controllable common areas expenses. Controllable common areas expenses would he those which are reasonably controllable by landlord and would specifically exclude insurance, utilities and snow/ice removal. C. For the term of this lease, the maximum combined property tax and CAM the Sublessee is responsible for is $2,000 per month with the Sublessor responsible for any combined property tax and CAM in excess of$2,000 per month. 10. INSURANCE. A. PROPERTY INSURANCE:. Sublessor and Sublessee agree to insure their respective real and personal property for the full insurable value. Such insurance shall cover losses included in the special form causes of loss (formerly all risks coverage). B. LIABILITY INSURANCE: Inc. and Cedar Oma LLC) as an additional insured on a noncontributory basis. 1 1. LIABILITY FOR DAMAGE. Each party shall be liable to the other for all damage to the property of the other negligently, recklessly or intentionally caused by that party (or their agents, employees or invitees), except to the extent the loss is insured and subrogation is waived under the owner's policy. 12. INllEMNITY Except for any negligence of Sublessor, Sublessee will protect, defend, and indemnify Sublessor from and against any and all loss,costs,damage and expenses occasioned by,or arising out of, any accident or other occurrence causing or inflicting injury or damage to an\ person or property, happening or done in, upon or about the premises, or due directly or indirectly to the tenancy, use or occupancy thereof, or any part thereof by Sublessee or any person claiming through or under Sublessee. 13. DAMAGE. In the event of damage to the premises, so that Sublessee is unable to conduct business on the premises, this lease may be terminated at the option of either party. Such termination shall be effected by notice of one party to the other within 20 days after such notice; and both parties shall thereafter be released from all future obligations hereunder. 14. MECHANICS' LIENS. Neither Sublessee, nor anyone claiming by, through.. or under Sublessee, shall have the right to file any mechanic's lien against the premises. Sublessee shall give notice in advance to all contractors and subcontractors who may furnish, or agree to furnish, any material, service or labor for any improvement on the premises. 15. DEFAULT, NOTICE OF DEFAULT AND REMEDIES. EVENTS OF DETAUL,T A. Each of the following shall constitute an event of default by Sublessee: (1) Failure to pay rent when due; (2) failure to observe or perform any duties,obligations, agreements,or conditions imposed on Sublessee pursuant to the terms of the lease; (3) abandonment of the premises. "Abandonment" means the Sublessee has failed to engage in its usual and customary business activities on the premises for more than fifteen (15) consecutive business days: (4) institution of voluntary bankruptcy proceedings by Sublessee; institution of involuntary bankruptcy proceedings in which the Sublessee thereafter is adjudged a bankruptcy; assignment for the benefit of creditors of the interest of Sublessee under this lease agreement; appointment of a receiver for the property or affairs of Sublessee, where the receivership is not vacated within ten (10) days after the appointment of the receiver. NOTICE OF DEFAULT B. Sublessor shall give Sublessee a written notice specifying the default and giving the Sublessee ten (10) days in which to correct the default. If there is a default (other than for nonpayment of a monetary obligation of Sublessee, including rent) that cannot be remedied in tell (10) days by diligent efforts of the Sublessee, Sublessee shall propose an additional period of time in which to remedy the default. Consent to additional time shall riot he unreasonahlN \v ithheld by Sublessor. Sublessor shall not be required to give Sublessee any more than three notices for the same default within any 365 day period. REMEDIES C. In the event Sublessee has not remedied a default in a timely manner following a Notice of Default, Sublessor may proceed with all available remedies at law or in equity, including but not limited to the following-. (1) Termination. Sublessor may declare this lease to be terminated and shall give Sublessee a written notice of such termination. In the event of tcrnnination ol'this ]case, Sublessor shall he entitled to prove claim for and obtain judgment against SUhIeSSCe for the balance of the rent agreed to be paid for the terra herein provided. plus all expenses of Sublessor in regaining possession of the premises and the reletting thereof, including attorney's fees and court costs, crediting against such claim, however, any amount obtained by reason of such reletting; (2) Forfeiture. If a default is not remedied in a timely manner, Sublessor may then declare this lease to be forfeited and shall give Sublessee a written notice of such forfeiture. and ma\. at the brae. give Sublessee the notice to quit provided for in Chapter 648 of the Code of'Iowa. 16. SIGNS. Sublessor or landlord, during the last 90 days of this lease, shall have the right to maintain on the premises either or both a "For Rent" or "For Sale' sign. Sublessee will permit prospective Sublessees or buyers to enter and examine the premises. Within 120 days of' this lease, Sublessor shall remove "MOE" and "Guaranty Bank" from the monument sign located on the premises and shall remove its main signs oil the sides ofthe building. Sublessor retains the rights for signage associated with the drive-up A"t M. Sublessor shall cancel or- has cancelled its lease for the digital sign with its landlord, Regent Investment lie.. effcetive the commencement of this Sublease Agreement. Sublessee may contract to use the digital sign directly with Regent Investment Inc. 17. NOTICES AND DEMANDS. All notices shall he given to the parties hereto at the addresses designated unless either party notifies the other. in writing, of a different address. Without prejudice to any other method of notifying a party in writing or making a demand or other communication, such notice shall be considered given under the terms of this lease when it is deposited in the U.S. Mail, registered or certified, properly addressed, return receipt requested,and postage prepaid. 18. PROVISIONS BINDING. Each and every covenant and agreement herein contained shall extend to and be binding upon the respective successors and assigns of the parties hereto. 19. ADDITIONAL, PROVISIONS. A. There are no restrictions on the number of parking spaces the Sublessee may use on the larger commercial center that includes the subject parcel. B. Included in the Sublease are Sublessor's tables and chairs in the community room. desks on the first floor, fire resistant file cabinets, and any other furnishings the parties agree to prior to signing the Sublease Agreement. C. Included in the Sublease are the drive-up tray, the night drop and the cash vault. D. Sublessor shall within 30 days of this lease remove the check writing kiosk and the teller stand/counter and shall match up the carpet tiles as best as possible. Sublessor shall not remove the power and dataports in the teller stand/counter area, and shall not remove any Internet wiring. E. Sublessor has exclusive rights to maintain and operate a drive-up ATM on the premises, including the necessary traffic lanes for that drive-up ATM. F. Sublessor may, but is not required to remove the tube drive-up equipment, at any time during the Sublease term. G. Sublessor and Sublessor's invitees shall have the right to continue to use the main vault for safe deposit boxes, but only during regular publicly open business hours of Sublessee or through prior arrangements with the Sublessee. Sublessee agrees to permit an employee of Sublessor to be present to permit its invitees to access their safe deposit boxes during those hours. Sublessor shall have the right to remove any or all of the safe deposit nests from the main vault during this sublease. 11. Sublessor will coordinate with Sublessee to transfer the alarm system in place on the premises (except to the extent it pertains to Sublessor's ATM and sate deposit boxes in the main vault) to Sublessee should Sublessee desire to make use of same. I. Included in this Sublease is the moveable screen and projector in the community room. Guaranty Bank and Trust Company, City of 1=airl'ax, Iowa, SUBLESSOR SUBLESSIT .0'—' r