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HomeMy WebLinkAboutVIII-19 Authorize Signature - Boat Harbor Lease Agreement with Hastings Marins, Inc. City Council Memorandum To: Mayor Fasbender & City Councilmembers From: City Administrator Dan Wietecha Date: December 19, 2022 Item: Hastings Marina Lease 2023-2027 Council Action Requested: Approve Boat Harbor Lease Agreement with Hastings Marina, Inc. for January 1, 2023 through December 31, 2027. Background Information: The City owns 6 parcels on Clay and E. 1st Streets. These parcels, along with land owned by the Plan Family, comprise the Hastings Marina. The Plans have had a series of 5-year leases for the City parcels for several decades. The current 5-year lease expires December 2022. The recommended contract specifies the annual amount of rent for each year with 4% increases each year (consistent with the average over the last 5-year term). The recommended contract also cleans up what had been a series of amendments over the years into a new single contract. Financial Impact: Revenues: 2023 $14,523 2024 $15,104 2025 $15,708 2026 $16,336 2027 $16,990 Committee Discussion: n.a. Attachment: Boat Harbor Lease Agreement VIII-19 1 BOAT HARBOR LEASE AGREEMENT This Boat Harbor Lease Agreement (“Agreement”) is made and executed this _____ day of ______________, 2022, by and between the City of Hastings, 101 4th Street East, Hastings, Minnesota 55033, a Minnesota municipal corporation, hereafter (“City”), Lessor; and James Plan, Candice A. Plan, and Hastings Marina, Inc., 1111 1st Street East, Hastings, Minnesota 55033, a Minnesota corporation, hereafter collectively (“Plans”), Lessees. RECITALS WHEREAS, the City, in consideration of the rents and covenants of this Agreement, does hereby lease to the Plans and the Plans do hereby lease from the City, the following described real property and all fixtures and improvements thereon in the City of Hastings, Dakota County, Minnesota, for use as a small boat harbor: Commencing at the Northwest corner of Lot One (1), Block One Hundred (100), Town of Hastings, then South to the South line of First Street; thence East Thirty-three feet (33’); thence Southeast to a point on the East line of Lot One (1), Block One Hundred Thirteen (113), Seventy-five feet (75’) South of the Northeast corner thereof; thence South to the North line of Second Street; thence East to the East line of Clay Street; thence South to the South line of Second Street, thence Ease to the Vermillion River, thence North and West along the Vermillion River and Mississippi River to the place of the beginning (the “Premises”); WHEREAS, the Plans agree to lease the property described above and all fixtures and improvements thereon in its current condition, without liability or obligation on the part of the City to make alterations, improvements, repairs or dredging of the marina or channel, except as provided herein, and under the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual consideration contained herein, it is hereby agreed as follows: 1. TERM. The term of this Agreement shall be for a period of five (5) years and shall begin on January 1, 2023, and shall continue through December 31, 2027 (“Initial Term”), subject to the rights of the City and the Plans to terminate the Agreement as provided herein. The City grants the Plans an option to renew this Agreement for one additional five-year (5) term upon the expiration of the Initial Term of this Agreement. Any such renewal shall be upon the same terms and conditions contained in this Agreement, except the City reserves the right to renegotiate the rent provisions, which shall be memorialized in a written amendment to this Agreement. In order to exercise the renewal option, the Plans must notify the City in writing of their intention to renew this Agreement and must provide such notification no later than six (6) months prior to the termination of the Initial Term of this Agreement. Immediately thereafter, the City and the Plans shall enter into negotiations regarding the rent to be paid to the City during the second five-year (5) term. If no agreement is reached prior to the termination of the Initial Term, this Agreement shall terminate. VIII-19 2 2. TERMINATION AND REMEDIES. A. Termination by Either Party. This Agreement may be terminated by either party upon thirty (30) days’ written notice delivered to the other party to the addresses listed in Section 22 of this Agreement. Upon termination under this provision, if there is no default by the City, the Plans shall be responsible for paying rent to the City on a prorated basis through the effective date of termination. B. Termination Due to Default. This Agreement may be terminated by either party upon written notice in the event of substantial failure by the other party to perform in accordance with the terms of this Agreement. The non-performing party shall have thirty (30) calendar days from the date of the termination notice to cure or to submit a plan to cure that is acceptable to the other party. C. Remedies. i. Notwithstanding the above, the Plans shall not be relieved of liability to the City for damages sustained by the City as a result of any breach of this Agreement by the Plans. ii. Should the Plans, together or individually, be deemed by a court of competent jurisdiction to be insolvent, subject to the laws relating to bankruptcy, during the term of this Agreement, the occurrence of any such event shall be deemed a breach of this Agreement and the Plans shall then surrender the premises but shall remain liable for the Premises pursuant to this Agreement. iii. In the event of the death or incapacity of all James Plan, Candice A. Plan, or the dissolution of Hastings Marina, Inc., the City shall have the right to terminate this Agreement by delivering written notice of termination to the Plans. Subject to the applicable bankruptcy laws, neither this Agreement nor any interest therein shall pass to any trustee in bankruptcy, insolvency or reorganization proceedings, creditors through attachment, execution or otherwise, or assignees for benefit for creditors, whether voluntary, involuntary or by operation of law. iv. The rights or remedies provided for herein shall not limit the City, in case of any default to the Plans, from asserting any right or remedy allowed by law, equity, or by statute. 3. RENT. A. The Plans shall pay annually to the City a fixed base rent (“Rent”) for each of the lease years during the term of this Agreement as follows: VIII-19 3 January 1, 2023 to December 31, 2023 $14,523.00 January 1, 2024 to December 31, 2024 $15,104.00 January 1, 2025 to December 31, 2025 $15,708.00 January 1, 2026 to December 31, 2026 $16,336.00 January 1, 2027 to December 31, 2027 $16,990.00 B. The fixed base rent for each of the lease years as specified in this section shall be paid annually to the City in full, due and payable no later than March 31st of each lease year. Each rent payment due to the City shall be mailed by the Plans to the address listed for the City in Section 22 of this Agreement. C. If the Plans default in any payment of rent, or if the Plans shall make default in the payment of any item or any charge required to be paid by the Plans hereunder, or if this Agreement shall terminate by reason of the Plans’ insolvency, the City may immediately terminate this Lease and/or re-enter the Premises and remove all persons or any property therefrom, and repossess the Premises without such re-entry and repossession working a forfeiture or waiver of the rents to be paid and the covenants to be performed by the Plans during the term of this Agreement. D. No payment by the Plans or receipt by the City of a lesser amount than the amount then due under this Agreement shall be deemed to be other than on account of the earliest portion thereof due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and the City may accept such check or payment without prejudice to the City’s right to recover the balance due or to pursue any other remedy as provided in this Agreement. 4. USE. The Plans shall use the Premises only to operate a small boat harbor and for no other purpose without the prior written consent of the City. The Plans agree to occupy the Premises at all times during the term of this Agreement, to operate continuously the entire Premises as a small boat harbor, and to conduct its business on the Premises at all times in good faith and in a high grade and reputable manner. The Plans shall promptly comply with all laws, ordinances, orders, and regulations affecting the Premises or their business therein and any applicable insurance company requirements affecting the cleanliness, safety, use and occupation of the Premises. The Plans shall only allow storage of boats and vehicles on the Premises that are in working order or which are being actively repaired. The Plans shall keep the Premises clean and free from rubbish and abandoned personal property at all times. 5. ASSIGNMENT. Except as expressly authorized in this section, the Plans shall not assign or in any manner transfer any of its rights or obligations under this Agreement or sublet the Premises or any part thereof. The Plans may lease or grant license rights for individual boat slips to end users of those boat slips. 6. SURRENDER OF PREMISES. At the expiration of the term of this Agreement or upon termination of the Agreement as provided herein, the Plans shall quietly yield and surrender possession of the Premises to the City in as good of condition and repair as when the Plans took possession of it, with the exception of reasonable wear and tear. The Plans shall have the VIII-19 4 right to remove all their personal property from the Premises within one hundred and twenty (120) days after the effective date of termination of this Lease, provided that the Plans repair any damage and restore any areas disturbed as a result of the removal of their personal property. The Plans shall indemnify the City against all loss and liability resulting from delay by the Plans in surrendering the Premises and from removal of their personal property from the Premises. 7. CLAY STREET. The City agrees to maintain the grade on Clay Street as it approaches the boat ramp on the Premises. The City further agrees to maintain the present parking facilities on and adjacent to Clay Street, adjacent to the Premises, and the blacktop approach ramp on the Premises. 8. HARBOR FACILITIES. The Plans agree to do the following: A. Maintain adequate toilet facilities for the use of patrons on the Premises; B. Comply with all applicable state and federal laws and regulations, including, but not limited to, fire codes, safety codes, employment safety laws, environmental laws and regulations which are now in effect and which may come into effect during the term of this Agreement; C. Install and maintain adequate boat docks and slips for rental to owners of small boats; D. Maintain adequate lighting facilities on the docks and boat slips; E. Maintain proper facilities for loading, unloading and launching boats; F. Complete all necessary cleanup and remediation of any hazardous material spills according to federal, state, county and local standards now in place, and as may be amended from time to time; G. Comply with the Americans with Disabilities Act as it may apply to the Premises and the small boat harbor operated by the Plans; and H. Keep all docks, slips and other harbor facilities in good repair and condition. 9. IMPROVEMENTS AND GOVERNMENT APPROVALS. Except as expressly authorized herein, the Plans shall not make improvements or alterations to the Premises without the prior written consent of the City. Prior to undertaking any improvements or alterations to the Premises, and before applying for any approvals from the applicable governmental entities having jurisdiction over the Premises or the proposed improvements or alterations, the Plans shall provide a written request to the City describing in detail the proposed improvements or alterations and containing all survey and engineering certifications reasonably necessary for the City to make a decision whether to grant or withhold consent to the proposed improvements or alterations. The decision whether to grant or withhold consent to any proposed improvements or alterations shall be within the sole discretion of the City and the City may VIII-19 5 condition its consent upon the Plans obtaining written approval from other governmental entities. The Plans agree that in the event they wish to construct improvements or undertake alterations that require the approval of any governing body, including but not limited to the U.S. Army Corps of Engineers, the Minnesota Department of Natural Resources, Dakota County, or the City of Hastings, the Plans shall, at their sole cost and expense, apply for and receive all required written approvals prior to the time they order or begin constructing the improvements or alterations on the Premises. The Plans shall provide proof of all such approvals to the City and in the event any such governmental entity denies an application of the Plans to undertake improvements or alterations to the Premises, the Plans shall also immediately provide notice of the denial to the City. Nothing herein shall act as a waiver or pre-approval of any application to undertake any improvement or alteration of the Premises which requires approval of the City of Hastings as a governing body having zoning or regulatory control over the Premises. The Plans shall not be obligated to obtain prior written consent from the City to undertake improvements or alterations to the Premises to the extent the proposed improvements do not require approval of any governmental entity and the project cost in any calendar year does not exceed $10,000 in totality. All signage on the Premises must comply with all applicable laws and regulations including municipal sign and zoning regulations. 10. INSURANCE. During the term of this Agreement, the Plans shall, at their expense, maintain in full force and effect the following insurance: A. General Liability Insurance, with a limit of Two Million Dollars ($2,000,000.00) for any number of claims arising out of a single occurrence. B. Workers’ Compensation Insurance in accordance with statutory requirements. C. Automobile Liability Insurance, with a combined single limit of One Million Dollars ($1,000,000.00) for each person and One Million Dollars ($1,000,000.00) for each accident. D. Pollution Liability Insurance, with a limit of Two Million Dollars ($2,000,000.00) for any number of claims arising out of a single occurrence. The coverage afforded under the pollution liability insurance policy must cover losses caused by gradual leakage as well as sudden and accidental causes. The amount of pollution liability insurance shall be increased by the Plans if the City, in its sole discretion, deems it reasonably necessary during the term of this Agreement. The City must be named as additional insured on all required insurance policies. The Plans further agree to provide certificates of insurance to the City demonstrating that the required insurance coverage is in full force and effect for the entire term of this Agreement and showing the City as an additional insured. Certificates of insurance must be provided at the initial signing of this Agreement, annually on January 1st of each lease year thereafter, and at other times as may be requested by the City. The insurance required by this paragraph shall be placed with a company licensed to do business and in good standing in the State of Minnesota. VIII-19 6 11. DREDGING. No dredging shall be completed unless and until the Plans have acquired all necessary governmental approvals for the dredging, including from the U.S. Army Corps of Engineers and the Minnesota Department of Natural Resources. The City agrees to reasonably cooperate with the efforts and applications of the Plans to obtain all governmental approvals necessary for the Plans to undertake dredging of the boat harbor or channel, provided that the City shall not be obligated to incur costs or expend significant staff time or resources to assist the Plans with such efforts and applications. The City shall not be responsible for any costs associated with any approved dredging of the boat harbor or channel. All dredging shall be undertaken at the sole expense of the Plans. 12. EQUAL OPPORTUNITY. The Plans agree not to discriminate against persons wanting to use the boat harbor facility on the basis of age, race, color, creed, religion, national origin, sex, marital status, status within regard to public assistance, disability, sexual orientation or familial status. 13. TAXES. The Plans shall be responsible for all taxes assessed and associated with the Premises, whether now in effect or which may be imposed in the future during the term of this Agreement. This includes, but is not limited to, any real estate taxes, payment in lieu of taxes and personal property taxes. 14. HAZARDOUS MATERIALS. A. As used in this section, the phrase “hazardous substance(s)” shall mean any substance, the presence of which requires an investigation or remediation under any environmental law or common law, any dangerous, toxic, corrosive, flammable, infectious, radioactive, or other hazardous pollutants, petroleum products, solvents, chemical, wastes or substances which are regulated by any environmental or other applicable laws. B. The Plans agree to pay, protect, indemnify, save and hold harmless the City, its agents, employees, successors and assigns from and against any and all liabilities, losses, damages, penalties, costs of action, suits, claims, demands or judgments, to the extent caused by the deposit, storage, disposal, burial, dumping, injecting, spilling, leaking, or the placement or release of a hazardous substance in or on the Premises, by the Plans or its agents, employees, lessees, licensees, or successors. The obligations of the Plans under this section shall survive any termination of this Agreement. C. The Plans will use the Premises in compliance with any local, state or federal zoning, environmental or hazardous waste laws or other environmental laws or regulations during the term of this Agreement. The Plans shall dispose of any cleaning materials, including rags, cloths, liquids, gases, oil, or chemical compounds off the Premises promptly after use, in compliance with all applicable statutes, rules and regulations. D. The Plans will comply with any periodic reporting requirements concerning the use, storage, disposal or transportation of any toxic or hazardous substances including, but not limited to, any reporting requirements relating to any storage tanks located on the VIII-19 7 Premises. If required, the Plans shall file reports on any such activities with the appropriate federal, state or local authority. If, at any time during the term of this Agreement any local, state or federal authority should request a report on any toxic or hazardous substances the Plans have stored, used or disposed of on or from the Premises, the Plans will either cause said report to be made as soon as practicable at its own cost and expense or if not made within thirty (30) days of the City’s request for the same, will reimburse the City, as additional rent, for the City’s cost of obtaining said report. E. At the expiration or termination of this Agreement, the Plans shall remove any tanks for storage of any toxic or hazardous substances installed by the Plans in compliance with all applicable statutes, rules and regulations. 15. UTILITIES. Electricity, gas, and water will be furnished to the Premises by the applicable utility companies. It shall be the Plans’ responsibility to pay for all the utilities servicing the Premises. All utilities shall be directly billed to the Plans by the provider of each such utility or service. The City shall not be liable in damages or otherwise if the furnishing by any supplier of any utility or other service to the Premises shall be interrupted or impaired for any reason. 16. INDEMNITY. A. The Plans agree to defend, indemnify and hold harmless the City from and against any and all claims, damages, demands, costs and expenses, including, without limitation, attorney’s fees, arising from: (1) the Plan’s use of the Premises; (2) any breach or default by the Plans in the performance of any covenant under this Agreement; (3) any injury to a person or damage to property occurring in or around the Premises, or (4) any negligent act, error or omission of the Plans, its agents, contractors, servants, employees, sublessees, concessionaires or licensees, in or around the Premises. B. The City shall not be liable and the Plans waive and release the City, its employees, public officials, agents, and contractors, from all claims, liabilities and causes of action against the City, its employees, public officials, agents and contractors for all damage, injury to or loss or destruction of person(s) or property, including, without limitation, all improvements, fixtures, equipment, supplies and merchandise on the Premises, sustained by the Plans or the Plan’s employees, agents, lessees, licensees, and servants resulting from any accidents or occurrences on or around the Premises and from any equipment located on or around the Premises or appurtenances thereto. C. In the event claims, losses, damages, or expenses are caused by the joint or concurrent negligence of the City and the Plans, they shall be borne by each party in proportion to its own negligence. D. In the event that one or more individuals, corporations, partnerships or other entities, or any combination of two or more thereof, shall sign this Agreement as the Plans, the liability of each such individual, corporation, partnership or other entity to perform all obligations hereunder shall be joint and several. In like manner, in the event that the VIII-19 8 Plans named in this Agreement shall be a partnership or other business association, the members of which are, by virtue of state, or general law, subject to personal liability, then in that event, the liability of each such member shall be deemed to be joint and several. 17. EMINENT DOMAIN. In the event all or any material portion of the Premises is taken by condemnation, the Parties may terminate this Agreement by written notice to the other party, whereupon the City and the Plans shall, subject to the provisions hereof, be released and discharged of all duties and obligations hereunder. Such written termination notice shall be made within fifteen (15) days after title to the part of the Premises taken rests in the condemning authority. In the event a nonmaterial portion of the Premises is taken by condemnation; the Agreement shall not terminate and shall continue in full force and effect. All damages or compensation awarded or provided as a result of any condemnation shall belong to the City. Nothing herein shall preclude the Plans from pursuing any claim for relocation expenses or damages as may be recoverable by the Plans. 18. ACCESS TO PREMISES. The City shall have the right to enter upon the Premises during all business hours for the purpose of inspecting the Premises, or for the purpose of exhibiting the same to prospective purchasers or others; provided, however, that any entries shall be made in such a manner so as not to unreasonably interfere with the Plans’ operations on the Premises. The City shall not be liable to the Plans in any manner for any expense, loss or damage by reason thereof, nor shall the exercise of such right be deemed an eviction or disturbance of the Plans’ use or possession of the Premises. 19. DELAY IN PERFORMANCE. Neither City nor the Plans shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the nonperforming party. For purposes of this Agreement, such circumstances include, but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war, riots, and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage; judicial restraint; and inability to procure permits, licenses or authorizations from any local, state, or federal agency for any of the supplies, materials, accesses, or services required to be provided by either City or the Plans under this Agreement. If such circumstances occur, the nonperforming party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. 20. CITY’S REPRESENTATIVE. The City has designated Dan Wietecha to act as the City’s representative with respect to this Agreement. He shall have complete authority to transmit instructions, receive information, interpret, and define the City’s policy and decisions with respect to the subject matter of this Agreement. 21. PLAN’S REPRESENTATIVE. The Plans have designated James Plan and Candice A. Plan to be the primary contacts for the City for this Agreement. They shall be assisted by other staff members as necessary to facilitate the boat launch services provided on the Premises pursuant VIII-19 9 to this Agreement. If the Plans desire to remove or replace these individuals as their representatives pursuant to this Agreement, they must notify the City. 22. NOTICES. When notice is required under this Agreement, such notice shall be communicated in writing and shall be deemed sufficient when such notice is legally served upon the other Party or when sent by registered or certified mail, return receipt requested, postage prepaid, to the address listed in this section for each party: IF TO THE CITY: IF TO THE PLANS: City of Hastings Hastings Marina, Inc. Attn: City Administrator 1111 1st Street East 101 E. 4th Street Hastings, MN 55033 Hastings, MN 55033 23. GENERAL PROVISIONS. A. Independent Contractor Status. Nothing contained herein shall be deemed or construed by anyone as creating the relationship of principal and agent or of partnership or join venture between the parties hereto. All services provided by the Plans, its officers, agents and employees pursuant to this Agreement shall be provided as employees of the Plans or as independent contractors of the Plans and not as employees of the City for any purpose. B. City Code Compliance. The Plans shall comply with all code enforcement and property maintenance requirements established by the City. If found in violation of any code enforcement or property maintenance requirements, any deficiencies shall be remedied with a reasonable timeframe. C. Headings. The headings of the sections contained herein are for convenience only and do not define, limit or construe the contents of such sections. D. Amendments. All negotiations, considerations, representations and understandings between the parties are incorporated herein, and may only be modified or altered by written agreement signed by both parties. E. Recording. The Plans shall not record this Lease without the written consent of the City. F. Severability. If any term or provision of this Agreement shall be found to be void or invalid, such invalidity shall not affect the remaining terms of this Agreement, which shall continue in full force and effect. G. Governing Law. The laws of the State of Minnesota shall govern the validity, performance and enforcement of this Agreement. Any actions brought by the City or the Plans to enforce the terms of this Agreement shall be venued in Dakota County District Court. VIII-19 10 H. Data Practices Compliance. The City and the Plans must comply with the Minnesota Government Data Practices Act, Minnesota Statute Chapter 13, as it applies to all data provided by the City under this Agreement. The civil remedies of Minnesota Statute § 13.08 apply to the release of data referred to in this subdivision by either the City or the Plans. If the Plans receive a request to release data referred to in this subdivision, the Plans must immediately notify the City. The City will give the Plans instructions concerning the release of the data to the requesting party before the data is released. I. Audit. Under Minnesota Statute § 16.C.05, subd. 5, the Plan’s books, records, documents, and accounting procedures and practices relative to this Agreement are subject to examination by the State of Minnesota and/or the Minnesota State Auditor or Legislative Auditor, as appropriate for a total of six (6) years. J. Waiver. A waiver by either City or Plans of any breach of this Agreement shall be in writing. Such a waiver shall not affect the waiving party’s rights with respect to any other or further breach. K. Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior communications, understandings and agreements relating to the subject matter hereof, whether oral or written. [The remainder of this page is intentionally left blank] VIII-19 11 IN TESTIMONY WHEREOF, both parties have hereunto set their hands the day and year first above written. CITY OF HASTINGS _____________________________ Mary Fasbender, Mayor _____________________________ Kelly Murtaugh, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ___ day of ______________, 2022, by Mary Fasbender and Kelly Murtaugh, the Mayor and City Clerk of the City of Hastings, Minnesota, a Minnesota Municipal Corporation. ____________________________________ Notary Public VIII-19 12 _____________________________ James Plan _____________________________ Candice A. Plan HASTINGS MARINA, INC., A MINNESOTA CORPORATION _____________________________ By: __________________________ Its: __________________________ STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ___ day of ______________, 2022, by James Plan, a (married, single) person. ______________________________ Notary Public VIII-19 13 STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ___ day of ______________, 2022, by Candice A. Plan a (married, single) person. ______________________________ Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ___ day of ______________, 2022, by ___________________________ as ______________________ of Hastings Marina, Inc. a Minnesota Corporation, on behalf of the Corporation. ______________________________ Notary Public VIII-19