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Agr Farm Lease(~. L. CL.ARK .JAI~S F'. MIZ~ ALI~REY G. LINVIL. L~ ~. DOUGLA~ MILLER I..A. HC NALLEY July 25, 1973 CLARK, I~IZE, LINVILLE ~ MILLER CHAi=F'r"Ir RE D LAW Olrlrl CES ~OU"I"H EIGHTH- BOX 134.3 SALINA~ KAN.~s.S ~7401 Mr. Norris Olson City Manager City - County Building 300 West Ash Salina, Kansas 67401 Re: Lease of Hocking Farms, Inc., on former Airport Authority land Dear Mr. Olson: The subject lease contains the following provision: "(6). Termination of Lease: The Authority reserves theright to terminate this lease as to any portion of the Premises in the event said Premises or any portion thereof are needed for industrial purposes or for the use of the Authority or any other political subdivision. In the event the Authority desires to terminate said lease as to any portion of the Premises, then the Authority shall give the Lessee sixty days written notice of its intention to do so and shall describe the portion of the Premises affected thereby. In the event said lease is cancelled as to a portion of said Premises, then the Authority agrees to reimburse Lessee for any growing crops on Premises for which the lease is cancelled and the cash rent for said year and the remainder of lease period shall be proportionately reduced." Hocking Farms, Inc., claims the lease, a copy of which is annexed, is valid and subsisting. Neither the Board of Commissioners of the City nor the Airport Authority authorized or directed the termination of the lease nor has either, in conformance with the terms of the paragraph, aforesaid, pur- suant to the lease and the existi~facts, selected by notice to Hocking Farms, Inc., the portion of the described property to be subjected to bona fide public use. It is Hocking Farms, Inc., contentions that: (i) The City, without any constituted authority complying with the terms of the lease and in contravention thereof, is trespassing upon the Mr. Norris Olson Re: Hocking Farms - Airport'Authority Lease July 25, 1973 Page Two leasehold of Hocking Farms, Inc.; (ii) the only portion of the property covered by the lease, that can be removed therefrom, is that portion to be subjected directly to an actual bona fide governmental use after specific bona fide notice of the selection for such use as provided in the lease and an ensuing actual subjection of the selected portion to governmental use; (iii) that an appropriate adjustment in rental under the lease directly flows from the removal of parts of the property from the lease for such use; and (iv) the City is going to subject only a very small portion of the poroperty to governmental use within the term of the lease. Hocking Farms, Inc., additionally claims as an offset against future rentals payable under the lease all damages suffered by it as a consequence of the Airport Authority failing to provide Hocking Farms, Inc., possession of 110 acres for use for the planting of wheat for 1973 harvesting. At the time of the execution of the lease, June 13, 1972, there were 110 acres of growing wheatland which Hocking Farms was to have farmed immediately after the wheat was harvested thereon. Larry Bengtson is familar with the claims of Hocking Farms, Inc., in this regard. It is to be observed that as a consequence of this default by the Authority that Hocking Farms, Inc., would have land avail- able for only four wheat crops, although it is liable for five years' rent. Hocking Farms, Inc., is in lawful possession of the property covered by the lease and, subject only to the bona'fide removal of portions of the property from the lease under the aforesaid paragraph in a reasonable and proper manner pursuant thereto, it is going to maintain and continue to claim the total right of possession for the term of the annexed lease until such time, if ever, that a court of competent jurisdiction by a final judgment terminates the company's right to possession of all or some portion of the property. When Allan J. Hocking, President of Hocking Farms~ Inc., met with you and Larry, you stated that the City considered the lease terminated except for planting land to wheat for this coming year and you were going to submit the land, or a part thereof, for rent to the public for agricultural purposes. As you are no doubt aware, Hockin~Farms, Inc., was in possession of the property covered by the lease when the City acquired the property. So far as Hocking Farms, Inc., is concerned, the lease was then and is now~valid and subsisting. The notice purportedly terminating the lease is in contra- vention of the specific terms of the lease, and the then existing and now existent facts, and we consider that purported notice of termination is a nullity. Mr. Norris Olson Re: Hocking Farms - Airport Authority Lease July 25, 19 73 Page Three Based on the best available information, the City will not within the terms of the lease have a bona fide need for over twenty (20) acres for govern-~ mental use. A governmental authority provided the form o~ the lease, it will, therefore, be strictly construed against the government. We believe that it is a very strained construction ~or the City to claim a government "use" of any portion of the property which, as you and Larry stated, it in- tends to lease for agricultural purposes. We believe Hocking Farms, Inc., has a valid enforceable right ~mder the lease. Hence, it elects to stand upon and claim the right. As a matter of compromise and without prejudice to the rights of Hocking Farms, Inc., careful consideration will be given to negotiating a valid lease on such of the property as is available for farming operations from time to.time. A proper share crop rental and a variable rental on the grass based on the price of beef will be considered. .Since~e~ yours,  .., i MILLER, CHARTERED C~C/11 Enclosure cc: Mr. L. O. Bengtson LEASE ....... This Lease Agreement, made and entered into this _13th day ~z~'~,~ AI AUTHORITY of Saline, of .Jun=-, 1972, by and between o-r~,'- N. POP. T- Author~ =y Salin=_ County, Kansas, hereinafter referred to as the "' ~= " and HOCKING FAPd-~S, iNC., a Kansas corporation with principal offices and place of business in Saline County, KAnsas, hereinafter referred to as the "Lessee", WITNESSETH: That 'the Authority in consideration of the rents, covenants, agreements and Conditions hereinafter stipUlated to be paid and performed by the Lessee, does hereby let and lease unto said Lessee the following described premises, to wit: Section Seven (7), Township Fifteen (15) South, Range Three (3) West of the Sixth Principal Meridian in Saline County, Kansas (except area used for water storage tank by City of Sa!ina), together with the appurtenances thereunto belonging hereinafter referred to as the Prem_ses : (1). Term of Lease: To have and to hold the same for and during the term contmencing on the !st day of August, 1972 and terminating on the 31st day of July, 1977, inc!usive., .subject however, to the qualifications hereinafter provided. (2). Rental': Lessee agrees to pay the Authority as rental~ Th.r=y Thousand Five Hundred and for said Premises the sum of ~ ~ Ninety Dollars ($30,590.00) which shall be paid in five (5) equal annual installments of Six Thousand One Hundred and Eighteen Dollars ($6,11~.00) which annual rental shall be payable as follows: $1,000.00 on August 1st of/each year and $5,118.00 on November 1st of each year. (3). Use of Premises: Lessee agrees to use the Premises for grazing and agricultural purposes only as hereafter specified. (a). Pasture Land: That portion of the Premises which is now in native grass may not be cultivated and if used for grazing purposes, the sam=- must he enclosed by a four strand barb wire fence constructed in a good and workmanlike manner at ~he ,~xm~nse of the Lessee ?-..ny fanc-_$ constructed shall become_ a part of tke Pr~mises and may not be removed by L~ss~ upon tar- ruination of said lease. All fences now on the Premises shall be kept in a good sta~e of repair by Lesse=. Lessee si~all graze the pasture land in accordanc~ with the ~ ~=' a~ep~_~ principles of good pasture management. (b). Cultivated Land: Lessee agrees to farm said-land in due season and in a n~,~,~=~ ~ ....... and workman- like manner and not to allo~.z ;,;asta upon said Premis~s by virtue of failure to properly protect said land from wind or water erosion. (c) . Government Agricultural Programs: Authority - - aD~.d~ng by all terms and conditions of any governmental agri- cultural programs which are now in effect or may ~= applicable during the terms of this ~===- ..... =; that the Lessee shall be entitled to receive any and all subsi- dies or government payments which the Authority ~ ~ be entitled to as the owner of said Pr=_mises. '' (4). Possession: Lessee skal! be entitled to posse:~sion on August 1, 1972 of all ground now und. er cultivation and upon ~.,;hich there are no growing crops. Cu!t~va~_~ land upon whicl~ p~esent tenant has growing crops shall be given as .soon as the 19'72 crop growing thereon has been harvested by the present tenant (excludes right of present tenant to harvest crops by grazing), however in no event later than December 1, 1972. Possession of that portion of Premises in native grass and' used for grazing purposes %~ill be given on Nover~er 1, 1972. Parties agree +hat upon termination of tn~s lease in the year 1977, that Lessee %~ill surrender possession of said Premises to the Authority at the following tides: (1) All land planted to wheat as soon as 1977 crop has. been harvested; (2) Pasture land (native grass) on or before November 1, 1977; (3) All cultivated land upon %.;hich no crops are growing on or before ~Lgust 1, 1977, and (4) All land planted to other crops as soon as crop has been harvested (excludes harvesting by grazing) but J.n no event later than December 1, 1977. (5) EasA.m~_nt: Authority retains the right to enter upon n_c ..=sar: said Premises to perform any and all' ~ =~- ~, maintenance in connection with its utility lines (~..~ater, sewerage, gas) located thereon; also to remove, replace, salvage or modify such existing utility lines and appurtenances as the Authority shall designate. (6). 'Termination of Lease: 'The Authority reserves the riqht to terminate this lease as to any portion of the Premises in the event said Premises or any portion thereof are needed for industrial purposes or for the use of the Authority or any or/ear political subdivision, in t.~e event the Authority desires to terminate said 'lease as to any portion of the Premises, ' ~-~ Authorlty shall give the Lessee sixty days written notice of ~ ~'-= the portion of the ~ ~ ~ == intention to do so and shall descr=~- affected thereby. In the event said lease is cancelled as .to a portion of said ~ = ~= ~, then +h= Authority agrees to reim/~urse Lessee for any growing crops on Premi == for w.~nh the lease is cancelled and the cash rent for said year and th~ remainder of lease period shall be proportionately reduced. (7) Liability Insurance: Lessee agrees to secure 'and main- rain public liability insurance to protect the Authority and it- . ~- ~ ~ njurv self against any lzability which may arise as a r~ul~ ,Df _ ~ or accident on or about the Premises. Said policy shall be. written by a reliable insurance company authorized to do business within the State of Kansas in the amount of $100,000.00 in casa of injury or damage to one person and $300,000.00 in case of injury or damage to more than one person in the same accident or occurrence and $100,000.00 ~r property damage. Lessee shall deliver to the Authority a certificate of such insurance on re- quest. (8). Ownership of Fixtures: It is understood and agreed by 'and between the parties hereto that any additions, improvements or fixtures attached to the Premises. or placed on or about said ~__ shall be considered as personal property and Premises by Leso~ - shall remain the property of Lessee who shall have the right to -3- remove the s~e from the Premises upo, n th~ expiration of this lease so long as such removal does not ir~,Dair t~%~ struct~ural feature of the improvements presently on the leased Premises. Provided, hot, ever, in ~'-~ ~n_.s l~ase ~ne event of termination· of ~] : due to a breach of covenant by the Lessee, then all fixtures an,-] improvements shall become the propar~y of the Autl!ority and may not be removed from the Premises. (9). Waiver: Waiver by th~ Authority. of any breach of this lease shall not be construed as a continuing %,~aivar of a subse- quent breach nor imply further indulgence. · ev~n~ said Lessee shall fail (10) Breach of Lease: In the = ~ to comply ·w_tn any substantial term, condition or covenant of this lease %;ithin ten days after written notice so to do has been mailed to it by said Authority, or in the event said Lsssee aban- dons said Premises before the end of the term, or in the event .said Lessee is adjudged bankrupt or inso!vant or makes an assign- ment for the benefit of creditors or com~its any act of baPi<ruptcy, any of such events shall be deemed an immediate breach and for- feitura of this lease and all unpaid installments of' rent and other expenses herein provided for shall ir~ediate!y become due and payable. (11). Utilities: Lessee ~hall at its o%~.~n expense obtain and pay for all electricity, water, gas, se~'er use fees., or other utilities used by it during the term of this lease or any exten- sions thereof, including the cost of maintenance and ope. ration of the heating system for the. Premises. (12). Liens: Lessee shall pay, satisfy and discharqe all liens and obligations of any nature and kind ~,~hatsoever created by or the obligations of the Lessee which shall attack to or ba / imposed upon said Premises and shall indem~nify, save and[ ?.~old harmless said Authority from such payment and from all daraages and ex.~enses attendant thereto. (13). Assignment of Leas%: Lessee shall not assign this lease or any interest therein and shall not sukl~t the Premises -4- or any part thereo~, or allow any p=rson to occupy or ~s~a said Premises or any por=~on =[~ou. ~ .... con- sent of the Authority. 7: consent to one assignment.or subletting for use by any other p%rscn s~.~a!l not be deem. ed to a consent to any subsequ~n~ assignm'ent (14). Inspection of Premises: Lessee agrees that tile Auth- ori'ty, or its agents, may at all reasonable times have free access uner._on - to said demised Premises and buildings examining or inspecting the condition of the same or exercising any right or po,,~er reserved to the Authority under the terms and provisions of this agreement. (15). t~otices: All notices to be given oursuant to lease shall be addressed to the Salina Airport Authority, Salina, ~'~-_e_ at Salina, Kansas, 67401, 'or as Kansas, 67401, and to ~ ._ Le== may from time to time be directed by the parties, Noti¢:e shall- be deemed to have been duly given if and %..~hen enclosed ~._n a prop- erly sealed envelope or %,;rapper addressed as aforesaid and mailed p~ _pa_d by reo. istered or certified mail with postace ~= ~ · (16) . General Clauses: (a). Lessee shall comply with all applicable laws, ordinances and regulations of ~' = state county and municipality wherein tile same demised Premises are located ~.vith regards to construction, sanitation, licenses, or permits to 'do business and all ot]ner matters. (b). Lessee shall pay to the proper governmental agencies and as they become due and payable all taxes, assessments and similar charges which at any time dur- ing the term of this lease may be taxed, assessed or imposed upon the Lessee with respect to or upon the leased Premises except those ~-~hich the Authority has in this lease agreed to pay. (c). That any property of the Authority damaged or c_otro=ed by the Lessee, incident to the Less e s -5- use and occupation of said Premises, shall be promptly r~paired or replaced by t!~e Lessee to the satisfactic, n- of said Authority or in lieu of such repair or replace- ment, the Lessee shall, if so required by said Authority, pay to the Authority money in an amount sufficient to compensate for the loss' sustained by the Authority by reason of damage or destruction of said property. (d). In the avant the Lessee fails or neglects to procure the insurance required by this !ease or to pay the premiums thereon or to properly maintain and keep in force said insurance, the Authority shall have the right and privilege to procure such insurance and to ~remiums paid shall pay t~he premiums thereon and any ~ be deemed as additional .rental and shall be due and payable with the next installment of rent due hereunder. (e). Lessee acknowledges that it has and kno~,s the condition of the leased prouerty and is understood that the same is bare,Dy leased without: any representation or ,~,~arranty by the Authority 'wha%so- · " t:~= Authority ever and wlthout ob!igatio, n on the Dart of ~ =~= ad. di~ ~ thereto to r,.~ake any alterations, r-p ..... or ~_o,,s . (f). i-~o Lessee shall use or permit to be used any portion of the property under its control for s:kgns, billboards or displays, other khan those connected ~ith its own operations t~ereon. Advertising signs must be located on the bui~'~- . .the Premises and shall contain more than 120 square feet in area. Flashing or illuminated signs in which the light is not maintained ~ - -, and constant in intensity and color shall be s ta.,_onar~ prohibited. (g). All loading docks for buildings or warekouse shall be maintained on ~.le -~ _ or rear of the buildings. (h). Lessee shall not be the agent of the Authority in ~%a]:ing repairs or other improvements to the above -6- Premises and no m~chanics !ians or claims thereunder shall be valid against the Authority or against th~- interest of the Authority in said property. (i). i~o materials, supplies or equipment shall stored or be ~.=rm~d to remain on any part of th% Drop- erty outside of the buildings constructed thereon, unless such storage shall be sight-screened from the street. Such storage shall be confined to the rear and sides of buildings and in no instances be~.~=~=~-~ on tkat sid=- of the building paralleling an existing or proposed street. · ~_m=s keep the Premises (j) The Lessee must at all ~ - and buildings in a safe, clean, ~¢holeson~condition, and comply zn all ~ =pects to all government, health and police requirements and the Lessee will renove at its own expense any rubbish which may accumulate on said property. · (k). Open, unpaved areas shall be grassed and landscaped to present a pleasing appearance and such grass and landscaping kept reasonably mov~e~ and. trimmed. This agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the respective parties to this agreement. IN ~[ITNESS WHEiqEOF, the respective parties have hereunto caused this instrument .to be executed on its behalf by its duly authorized officers all on the'date and year first above mentioned. Secretary ATTEST: :~ .> e c r e t a r y ~,~/ Salina Airport Authority Ch'~.i~'~ ~Bo~rd of D:i.?e~,tors ! Hocking Farms,?-~nc~. ~