Lease Agreement - Drive-Thru Recycling Center LEASE AGREEMENT
This Lease Agreement ("Lease") is made and entered into this 6th day of March,
2018 by and between KMJJM, L.L.C., a Kansas limited liability company ('Lessor"), and
the CITY OF SALINA, KANSAS, a Kansas municipal corporation ("Lessee").
1. Property Description. Lessor, in consideration of the rents, covenants, agreements, and
conditions hereinafter agreed to be paid and performed by Lessee, and subject to the
condition precedent set forth in Paragraph 2 below, leases unto Lessee the real estate
legally described in the attached and incorporated Exhibit A, together with any
improvements constructed or to be constructed thereon and the appurtenances
thereunto belonging, as depicted on the attached and incorporated Exhibit B (the
"Premises").
2. Condition Precedent— Environmental Inquiry. The force and effect of this Lease shall
be subject to satisfaction of the condition precedent of Lessee's determination, in its
sole discretion, of the acceptable environmental status of the Premises based upon
Lessee's "all appropriate inquiry'. in the form of a Phase I environmental site
assessment (ASTM E1527-13) of the Premises [including a Kansas Department of
Health and Environment (KDHE) file review] and, if warranted, a Phase II
environmental site assessment. Lessee acknowledges that it is in the parties' common
interest that the Phase I environmental assessment and, if warranted, the Phase II
environmental assessment, be completed as rapidly as possible. Lessee agrees to
provide Lessor with a copy of the environmental site assessment(s).
2.1 Phase I. Within 14 days following execution of this Lease, Lessee shall, at its
expense, contract for completion of a Phase I environmental assessment of the
Premises (including KDHE file review). Within 14 days of receipt of the Phase I
report, Lessee shall,in its sole discretion and under the authority of its city manager,
exercise one of the following options:
(a) Execute with Lessor an Addendum to this Lease establishing the effective date
of the Lease ("Effective Date");
(b) Provide Lessor with written notification of its election not to lease the Premises
based upon the results of the Phase I environmental site assessment, upon which
the condition precedent shall be deemed unmet and this Lease shall be of no
further force and effect; or
(c) Provide Lessor with written notification that it has contracted for a Phase 11
environmental site assessment of the Premises.
2.2 Phase II. If Lessee elects to contract for completion of a Phase II environmental
site assessment of the Premises, within 21 days of receipt of the Phase II report,
Lessee shall, in its sole discretion and under the authority of its city manager,
exercise one of the following options:
1
(a) Execute with Lessor an Addendum to this Lease establishing the effective date
of the Lease ("Effective Date"); or
(b) Provide Lessor with written notification of its election not to lease the Premises
based upon the results of the Phase II environmental site assessment, upon
which the condition precedent shall be deemed unmet and this Lease shall be
of no further force and effect.
3. Term, Term Commencement Date, and Holdover.
3.1. Term and Term Commencement Date of Lease. This Lease shall be for a term of
three (3) years commencing as of the date on which Lessor's architect certifies in
writing to Lessor and Lessee that Lessor has completed the leasehold
improvements described in Section 9 below ("Term Commencement Date"), and
terminating on the date that is thirty-six (36) months thereafter ("Primary Term"),
subject to the option for renewal and extension hereinafter set forth.
3.2. Delivery of Possession; Early Entry. Lessor agrees to deliver possession of the
Premises to Lessee in a completed condition and ready for occupancy on the Term
Commencement Date. Lessee shall be permitted entry to the Premises after the
Effective Date and prior to the Term Commencement Date for the purposes of
completing the Lessee Improvements described in Section 9 below and installing
equipment and fixtures necessary for Lessee's proposed use of the Premises on the
Term Commencement Date. Such early entry will be subject to all the terms and
provisions of this Lease as though the Term Commencement Date had occurred,
except for the obligations to pay Basic Rent and Additional Rent, which
obligations will commence on the Term Commencement Date. Prior to the Term
Commencement Date, the parties will mutually (i) make an inspection of the
Premises, (ii) note any defects or deficiencies found to exist on the Premises, (iii)
jointly prepare a list of any such defects and deficiencies, and (iv) as necessary to
allow for Lessee's use and operation of the Premises,jointly agree on an allocation
of responsibility for addressing the defects and deficiencies.
3.3. Holdover. If the Lessee remains in possession of all or any part of the Premises
after the expiration of this Lease, without the express or implied consent of the
Lessor, such occupancy shall be considered to be a "Holdover Tenancy" from
month-to-month only, and not a renewal or extension of this Lease for any further
term. Such Holdover Tenancy shall be subject to every other provision, covenant
and agreement contained herein. However, the rental rate as defined in Section 6
herein shall be increased one hundred and fifty percent (150%) of the then current
rate. The foregoing provisions of this Subsection are in addition to and do not
affect the right of re-entry or any right of the Lessor hereunder or as otherwise
provided by law and in no way shall such provisions affect any right which the
Lessor may have otherwise to recover damages, to the extent permissible by
applicable law, from Lessee for loss or liability incurred by the Lessor resulting
from the failure by Lessee to surrender the Premises, or for any other reason.
Nothing contained in this Subsection shall be construed as consent by Lessor to
2
any holding over by Lessee and the Lessor expressly reserves the right to require
Lessee to surrender possession of the Premises to Lessor as provided in this Lease,
and to the extent permissible by applicable law, upon the expiration of this Lease.
4. Option to Renew. The Lessee is hereby given the option to renew this Lease for two
additional terms of three years each at the expiration of the Primary Term. In the event
the Lessee elects to exercise its option hereunder, it must notify the Lessor in writing
at least ninety(90)days prior to the expiration of the then current term. The Basic Rent
for the option period shall be as calculated in accordance with Section 6.2 below.
5. Lessee's Purchase Option.
5.1. Grant of Option. Lessor grants to Lessee an exclusive option to purchase the
Premises plus the paved portion of vacated Seventh Street adjoining the west
boundary of the Premises(the-Optioned Property")at the end of the Primary Term
of this Lease, and on each annual anniversary date thereafter during any option
period, provided that Lessee gives notice to Lessor, in writing.. of Lessee's
intention to exercise the option at least ninety (90) days prior to the expiration of
the Primary Term or the annual anniversary date thereafter, as applicable, and
provided further that Lessee completely performs all terms and provisions of this
Lease on Lessee's part to be performed.
5.2. Determination of Purchase Price. The purchase price for the Optioned Property
shall be equal to the then-current fair market value of the Optioned Property
excluding and without taking into account the existence of the Lessee
Improvements constructed pursuant to Section 9.2, as determined hereunder, but
shall not be less than$200,000.00. The fair market value of the Optioned Property
(excluding the Lessee Improvements) shall be determined by appraisal as of the
date of Lessee's written notice of its intention to exercise such option, conducted
by a qualified appraiser mutually agreed upon by Lessee and Lessor. If Lessee
and Lessor cannot agree on an appraiser, then each of Lessee and Lessor,
collectively, shall select an appraiser and the resulting two appraisers shall select
a third appraiser. The average of the three appraised values reached by the three
appraisers shall be the fair market value for purposes of this option. Upon receipt
of the final written appraisal, Lessee shall have fourteen(14)days to elect whether
to complete the purchase option and purchase the Optioned Property for the greater
of either the appraised value or S200,000.00. If Lessee elects to complete the
purchase option, or if the Optioned Property appraises for less than $200,000.00
and Lessee elects not to proceed with the purchase option, the cost of the appraisal
shall be shared equally by the parties. If the Optioned Property appraises for more
than $200,000 and Lessee elects not to proceed with the purchase option, the full
cost of the appraisal will be paid by Lessee. If Lessee elects not to proceed with
the purchase option following an appraisal pursuant to this Section 5.2. Lessee's
election shall not preclude Lessee's future exercise of the purchase option in
accordance with Section 5.1.
3
5.3. Title Commitment. Upon Lessee's exercise of the option and no later than twenty
(20)days prior to closing, Lessor shall provide Lessee with a commitment for title
insurance covering the Premises in the amount of the purchase price, showing
marketable title in and to the Optioned Property to be in Lessor, free and clear of
all liens and encumbrances, except: (1) liens and encumbrances created by Lessee;
(2) easements and restrictions of record, if any; and (3) the standard exceptions
noted in Schedule B of the Commitment for Title Insurance. Lessee shall have a
reasonable time, not to exceed ten (10) business days, after receipt of the
commitment for title insurance, to examine the same and notify Lessor of any
written objections relative to the marketability of title. Lessor shall then have a
reasonable time to remove defects to which valid objections have been made. If
Lessor, acting in good faith and with diligence cannot furnish marketable title to
the Optioned Property,then the exercise of the option shall, at the option of Lessee,
be null and void. If a dispute arises between the parties about marketability of the
title, the Title Standards adopted from time to time by the Bar Association of the
State of Kansas, and the Kansas Marketable Title Act, as amended, shall control.
5.4. Closing; Costs. In the event that Lessee exercises such option hereunder, the
purchase of the Optioned Property from Lessor shall be for cash or on payment
terms otherwise agreed upon by the parties. Such purchase shall close within four
(4) months of the date of Lessee's written notice of its intention to exercise such
option. At closing, Lessor shall convey the Optioned Property to Lessee by
warranty deed, and this Lease shall become void. Following closing, a title
insurance policy shall be issued showing title to the Optioned Property vested in
Lessee. The cost of title insurance, escrow fees, and closing charges shall be
shared equally by the parties. Real estate taxes and assessments, if any, shall be
prorated to the closing date.
6. Rent.
6.1. Basic Rent. Lessee agrees to pay the Lessor a Basic Rent for the leasing of the
Premises the sum of Two Thousand Seven Hundred and Twenty-Seven and no/100
($2,727.00)per month,the first of which shall be due on the Term Commencement
Date, prorated as necessary. The rent payments thereafter shall be payable
monthly in advance and shall be due on the first day of each month for that month.
6.2. Adjustment to Basic Rent. Basic Rent shall be increased at the commencement of
each three(3) year option period as follows:
1"Option Term Years 4-6 $2,891.00
2"a Option Term Years 7-9 $3,064.00
6.3. Additional Rent. In addition to the Basic Rent, Lessee covenants and agrees that
it will be responsible for Additional Rent, which shall include the following
components:
4
6.3.1. Taxes. Lessor agrees to pay all real estate taxes which are levied against
the Premises during the term of this Lease. During the term of this Lease,
however, Lessee shall pay as Additional Rent any increase in the real estate
taxes levied against the Premises over the agreed-upon base year amount of
$5,900.00. The increase in Lessor's taxes for each year over the base
amount of$5,900.00 shall be divided by 12 and the amount so determined
shall be added to each month's rent payments following Lessor's written
notice to Lessee of such increase.
6.3.2. Property Insurance. During the term of this Lease, Lessee shall pay as
Additional Rent any increase in the premiums on Lessor's commercial
property insurance over the agreed-upon base year amount of$972.00. Any
increase in Lessor's insurance premiums over the base amount shall be
divided by 12 and the amount so determined shall be added to each month's
rent payments following Lessor's written notice to Lessee of such increase.
6.3.3. Late Charge. If the rent amount due hereunder is not received by the Lessor
within fifteen(15) days of due date, a late charge of One Hundred and Fifty
Dollars ($150.00) will be assessed against the Lessee. Failure to pay the
rent and the late charge within twenty (20) days shall be grounds for
termination of this Lease, solely at the discretion of the Lessor, and not as a
termination right for Lessee, in addition to recovery of the unpaid rent and
the late charge.
7. Insurance.
7.1. Lessee's Liability Insurance. Lessee shall purchase from and maintain in a
company or companies lawfully authorized to do business in the State of Kansas
such insurance as will protect Lessee from claims set forth below which may arise
out of or result from Lessee's operations and for which Lessee may be legally
liable.
7.1.1. Claims for damages because of bodily injury, occupational sickness or
disease, or death of Lessee's employees;
7.1.2. Claims for damages because of bodily injury, sickness or disease, or death
of any person other than Lessee's employees;
7.1.3. Claims for damages insured by usual personal injury liability coverage;
7.1.4. Claims for damages, other than the leased property, because of injury to or
destruction of tangible property, including loss of use resulting there from;
7.1.5. Claims for damages because of bodily injury including death of a person,
or property damage arising out of the ownership, maintenance or use of a
motor vehicle;
5
7.2. General Policy Requirements. The insurance required by Section 7.1 and Section
7.2 shall be written for not less than the limits of liability specified below or as
required by law, whichever coverage is greater. Coverages, whether written on an
occurrence or claims-made basis, shall be maintained without interruption from
date of commencement of this Lease. All insurance policies must be issued by an
insurance carrier which has a Best's general policyholder's rating (as published in
the most recent issue of Best's Key Rating Guide, Property-Casualty) of not less
than A- and a financial size category of V or greater(which equates to an adjusted
policyholders' surplus of$4-$25 million).
7.2.1. Commercial General Liability, which is no more restrictive than ISO Form
CG0001 1/96 or any revision thereof with minimum limits of liability of:
$ 2,000,000 General Aggregate
$ 2,000,000 Products-Completed Operations Aggregate
$ 1,000,000 Personal & Advertising Injury
$ 1,000,000 Each Occurrence
$ 200,000 Fire Damage (Any one fire)
7.2.2. Comprehensive Auto Liability for owned, non-owned and hired vehicles
with combined single limits of liability of$1,000,000 per occurrence.
7.3. Certificates of Insurance. Certificates of insurance acceptable to the Lessor shall
be filed with the Lessor prior to commencement of this Lease. These certificates
and the insurance policies required by this Section 7 shall contain a provision that
coverages afforded under the policies will not be canceled or allowed to expire
until at least 30 days' prior written notice has been given to the Lessor.
7.4. Primary Policies; Waiver of Subrogation. Lessee agrees that its insurance policies
will be amended to be primary without right of contribution from the Lessor or its
insurance policies, that Lessee's insurance policies will be amended to state that
its insurer agrees to waive its right of subrogation against the Lessor and that the
above insurances will not be invalidated for the Lessor by any action, inaction or
negligence of the insured. All amounts of claims, losses or damages resulting from
deductible clauses or self-insured retentions shall be for the account of the Lessee.
7.5. Additional Insured. Lessee agrees that all liability policies will be amended to
name the Lessor as an additional insured.
7.6. Contractors. All independent contractors hired by Lessee will be held to the same
insurance requirements as the Lessee. The Lessor will be named as an additional
insured on independent contractors' policies, and Lessee will provide the Lessor,
upon request, with copies of such independent contractors' Certificates of
Insurance.
6
7.7. No Limitation of Liability. The requirement of Lessee to purchase and maintain
insurance shall not, in any manner, limit or qualify the liabilities and obligations
otherwise assumed by Lessee under this Lease.
7.8. Claims Made Insurance. Lessee shall,to the extent reasonably possible, obtain the
liability insurance required hereunder on an occurrence basis. If any insurance
required herein is to be issued or renewed on a claims made basis, the retroactive
date of such insurance shall be no later than the commencement date of this Lease
and shall provide that in the event of cancellation or non-renewal of the insurance,
the discovery period for insurance claims (tail coverage) shall be for a period of
not less than two years.
7.9. Lessor's Liability Insurance. The Lessor shall be responsible for purchasing and
maintaining the Lessor's usual liability insurance.
7.10. Property Insurance.
7.10.1. Lessor shall purchase and maintain, with a company or companies lawfully
authorized to do business in the State of Kansas, commercial property
insurance written on a"special causes of loss"policy form. The policy must
include a clause that provides for all claims to be made on a replacement
cost basis (not on an actual cash value basis) and without deduction being
made for depreciation. The policy must be an amount equal to 100% of the
full replacement cost of the Improvements (without any deduction being
made for depreciation) as determined by the Lessor on an annual basis,
using Marshall/Swift or another comparable commercial building cost
estimating guide.
7.10.2. Prior to the commencement of this Lease, Lessor shall file with the Lessee
an Evidence of Property Insurance form that includes insurance coverages
required by this Section 7.10.
7.10.3. The Lessor and Lessee waive all rights against each other, for damages
caused by fire or other causes of loss to the extent covered by property
insurance required pursuant to this Section 7.10 or other property insurance
applicable to the leased Premises, except such rights as they have to the
proceeds of such insurance held by Lessee as fiduciary. The policies shall
provide such waivers of subrogation by endorsement or otherwise. A
waiver of subrogation shall be effective as to a person or entity even though
(1) that person or entity would otherwise have a duty of indemnification,
contractual or otherwise, (2) did not pay the insurance premium directly or
indirectly, (3) and whether or not the person or entity had an insurable
interest in the property damaged.
7
7.10.4. In the event of a failure by Lessor to secure such insurance or to pay the
premiums thereon, the Lessee shall have the right and privilege to secure
such insurance or pay the premiums thereon, which amount shall be due and
payable by Lessor, upon demand.
8. Use of Premises. Lessee agrees to use the Premises for the sole purpose of operating a
recycling center and other activities normally associated with waste and recyclables
management. All activities will comply with applicable law or regulations.
9. Improvements to Premises.
9.1. Lessor Restroom Improvements. As soon as reasonably possible following the
Effective Date, Lessor agrees to cause to be constructed on the Premises certain
sewer and waterline service connections and restroom improvements(collectively,
"Lessor Improvements"). The Lessor Improvements shall be constructed pursuant
to certain plans and specifications ("Lessor Plans and Specs") attached hereto as
Exhibit C. Lessor shall be responsible for payment of all costs and expenses
incurred for construction of the Lessor Improvements in accordance with the
Lessor Plans and Specs. No modifications shall be made to the Plans and Specs
except by written change order signed by the Lessor and Lessee. Lessor agrees to
diligently prosecute all work necessary to complete the Lessor Improvements and
shall deliver possession of the Leased Premises to Lessee as soon as reasonably
possible, but not later than sixty(60) days after the Effective Date.
9.2. Lessee Improvements. As soon as reasonably possible following the Effective
Date, Lessee agrees to cause to be constructed on the Premises certain
improvements in connection with Lessee's planned use of the Premises for
purposes of operating a municipal recycling collection facility and other normally
associated activities (collectively, "Lessee Improvements"). The Lessee
Improvements shall be constructed pursuant to certain plans and specifications
("Lessee Plans and Specs") attached hereto as Exhibit D. Lessee shall be
responsible for payment of all costs and expenses incurred for construction of the
Lessee Improvements in accordance with the Lessee Plans and Specs. No
modifications shall be made to the Lessee Plans and Specs except by written
change order signed by the Lessor and Lessee. Lessor agrees to diligently
prosecute all work necessary to complete the Lessee Improvements and shall be
completed not more than twelve (12) months from the term commencement.
9.3. Right of Lessee to Construct Fence. Lessee may, at its sole cost and expense,
construct a fence around the perimeter of the Premises, along with gates in such
locations as deemed necessary by Lessee for Lessee's planned use of the Premises.
9.4. Other Lessee Improvements. Lessee may, with the written consent of the Lessor,
which consent shall not be unreasonably withheld, build and construct
improvements on the Premises; provided, however, that prior to commencement
of any such work the Lessee shall submit construction and site plans thereof to the
8
Lessor for its approval and secure the necessary building permits from the City of
Salina. Any repairs, improvements or new construction shall conform to the
following:
9.4.1. Any improvements on the Premises shall be restricted to those
improvements related to Lessee's use of the Premises as described in
Section 8 of this Lease.
9.4.2. All construction shall conform to the applicable Building Code.
9.5. Signs. Lessee shall have the right at all times during the term of this Lease, at its
sole expense, to place, install, maintain, and repair signage on the Premises or
improvements thereon, in compliance with applicable law.
10. Inspection of Premises by Lessor. Lessee agrees to permit Lessor and its authorized
representatives to enter the Premises during reasonable hours and upon reasonable
advance notice, for the purposes of inspecting the Premises or making any necessary
repairs or alterations to the Premises.
11. Access Area. During the term of this Lease, Lessor grants to Lessee the nonexclusive
right of vehicular ingress and egress to the Premises over and across the land owned by
Lessor adjoining the west boundary of the Premises, as described and depicted on the
attached Exhibit E (`'Access Area"). Lessor will not interrupt or obstruct access to the
Access Area,or any entrances to the Access Area. Lessor will use all reasonable means
to prevent any interruption or obstruction of access over and across the Access Area by
any third party.
12. Removal of Personal Property. On or before the date of expiration or termination of
this Lease, or any extension thereof, the Lessee shall vacate the Premises, remove its
personal property(including cameras and signage) therefrom and restore the Premises
to as good an order and condition as that existing upon the commencement of the term
of this Lease, normal wear and tear excepted. If, however, the Lessee fails to remove
the personal property and/or to restore the Premises to substantially the same condition
as existed at commencement of the Lease, then the Lessor may remove the personal
property and restore the Premises and may retain the personal property until such time
as Lessee reimburses the Lessor for all its expenses connected therewith.
13. Default and Remedies.
13.1. Default. If either party fails to comply with any term of this Lease within ten
(10) days after written notice to comply has been mailed by the non-defaulting
party to the defaulting party, such failure shall be deemed an immediate breach
of this Agreement ("Event of Default").
9
13.2. Remedies. Upon the occurrence of an Event of Default, the non-defaulting
party shall have the following rights and remedies, in addition to any other
rights and remedies provided under this Lease or by law:
13.2.1. The non-defaulting party shall have the right to terminate this Lease or
terminate the defaulting party's rights under this Agreement.
13.2.2. The non-defaulting party may pursue any available remedy at law or in
equity (including specific performance) by suit, action, mandamus or other
proceeding to enforce and compel the performance of the duties and
obligations set forthin this Lease, to enforce or preserve any other rights or
interests of the non-defaulting party under this Lease or otherwise existing
at law or in equity and to recover any damages incurred by the non-
defaulting party resulting from such Event of Default.
14. Waiver. Waiver by the Lessor of any breach of this Lease shall not be construed as a
continuing waiver of a subsequent breach nor imply further indulgence.
15. Attorney Fees. In the event a breach occurs of any agreement or obligation contained
in this Lease on the part of the Lessee or Lessor or be kept or performed, and a breach
shall be established, the prevailing party shall be entitled to recover all expenses
incurred thereof, including reasonable attorney fees.
16. Repairs to Improvements on Premises. During the term of the Lease, Lessor will keep
the roof, foundation and exterior walls(specifically excluding walk doors and overhead
doors)on the Premises in a good state of repair. Lessee covenants that during the term
of this Lease it will properly care for the Premises and appurtenances and suffer no
waste or injury, make all interior repairs in and about the Premises and fixtures and
appurtenances, necessary to preserve the same in good order and condition, which
repairs shall be in a class equal to the original work.
16.1. HVAC. Lessee shall be responsible for all routine maintenance and repairs
necessary to keep the heating and/or cooling system, in a good state of repair
and in good working condition. Additionally, the Lessee shall at Lessee's
expense cause any HVAC units placed on the Premises to be serviced annually
by a licensed HVAC contractor, or as specified by the manufacturer.
16.2. Other Maintenance. Lessee shall be responsible for all routine maintenance
and repairs necessary to keep the plumbing, electrical systems and doors in a
good state of repair and in good working condition. Maintenance to be
performed by the Lessee includes but is not limited to janitorial services,
supply and replacement of lighting fixtures including light bulb and ballast
replacement, cleaning of stoppages in plumbing fixtures, drain line and septic
systems, replacement of floor covering, building interior painting, repairing
and replacing building and overhead door motors, chains and belts and
landscaping as originally approved and installed. Lessee is responsible for
10
maintaining electric loads within the design capacity of the system. The
Lessee shall be responsible for maintaining the outside storage yard, including
fencing, and the parking lot including pavement, striping and signage.
16.3. Lessor's Rights. In the event Lessee fails to keep said Premises in good order
and repair then the Lessor may perform all repairs which may be necessary in
about the demised Premises and the cost of such repairs shall be and constitute
additional rental.
17. Utilities. The Lessee shall, at its own expense, obtain and pay for all electricity, water,
gas, sewer use fees, or other utilities used by Lessee during the term of this Lease.
18. Liens. The Lessee shall pay, satisfy and discharge all liens and obligations of any
nature and kind whatsoever created by or the obligations of the Lessee which shall
attach to or be imposed upon the Premises and shall indemnify, save and hold harmless
the Lessor from such payment and from all resulting damages and expenses.
19. Assignment of Lease. The Lessee shall not assign this Lease or any interest therein
and shall not sublet the Premises or any part thereof, or allow any person to occupy or
use the Premises or any portion thereof,without the prior written consent of the Lessor.
A consent to one assignment or subletting for use by any other person shall not be
deemed to be a consent to any subsequent assignment.
20. Estoppel Certificates. If required by the Lessor from time to time the Lessee does
hereby agree to execute an estoppel certificate in a form as provided by the Lessor upon
request. If the Lessee does not provide the estoppel certificate within 15 days from the
date of written request by the Lessor the Lessee does hereby authorize the Lessor to
execute the estoppel certificate on behalf of the Lessee.
21. Indemnification and Hold Harmless. To the fullest extent permitted by law subject to
the terms, conditions and limitations of the Kansas Tort Claims Act or other statutes
applicable to governmental entities, the Lessee shall indemnify and hold harmless the
Lessor, its affiliates and its officers, directors, employees, agents, representatives,
guests and invitees ("Lessor Indemnitees") from and against claims, damages, losses,
liabilities, fines, penalties, costs, and expenses (including attorney's fees, consultant
costs, environmental investigation, remedial or removal costs and natural resource
damages) (collectively, "Losses'), but only to the extent the aggregate of such Losses
arising out of a single occurrence or accident do not exceed applicable policy limits
under the Lessee's commercial general liability insurance policy, and only if such
Losses arise out of or result from (i) Lessee's occupancy and or use of the Premises;
(ii) any breach of this Lease by the Lessee; and/or(iii) the acts, omissions, negligence
or willful misconduct of any persons used or employed directly or indirectly by the
Lessee or any independent contractor.
22. Notices. All notices to be given pursuant to this Lease shall be addressed to the parties
as follows:
11
Lessor City Clerk
Attn: Director of Public Works Department
P.O. Box 736
Salina, KS 67402-0736
Lessee KMJJM, L.L.C.
Attn: Charles Henry, Managing Member
525 N. Poplar
Solomon, KS 67480
23. Damage by Casualty.
23.1. If the Premises are destroyed or damaged by fire or other casualty so as to be
wholly or partially untenantable, the rent shall abate during the period that the
Premises is untenantable; provided, however, that if the Premises shall be
rendered only partially untenantable, the monthly rental required herein shall
be proportionately reduced or abated on a fair and equitable basis. If the
Premises are destroyed or damaged so as to be wholly or partially untenantable
for more than one hundred (120) calendar days, the Lessee may, at its sole
option terminate this Lease. If this Lease is so cancelled, rent shall be paid
only to the date of cancellation and the Lessee shall surrender the Premises to
the Lessor after being allowed a reasonable time to locate a substitute site,
remove its personal property and otherwise conclude its affairs at the Premises.
"Untenantable" as used in this paragraph shall be deemed to mean such a
condition as renders the Premises unsuitable for Lessee to carry on its business
therein; and the judgment of Lessee,reasonably exercised, shall control in such
regard.
23.2. If the Lessee does not elect to terminate this Lease in case of destruction or
damage by casualty pursuant to Section 23.1 above, this Lease shall continue
in full force and effect and the Lessor shall restore the Premises to at least its
previous condition, and to Lessee's satisfaction, within a reasonable time. For
that purpose, the Lessor and its agents and contractors may enter the Premises.
Rent shall totally abate during the period of such restoration. The Lessor's
obligation to restore the Premises shall be absolute, and shall not be limited by
the amount of available insurance proceeds.
24. General Clauses.
24.1. The Lessee shall comply with all applicable laws, ordinances and regulations
of the state, county and municipality in which the Premises are located with
regard to construction, sanitation, licenses or permits to do business and all
other matters.
24.2. The 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
12
during the term of this Lease may be taxed, except those which the Lessor has
in this Lease agreed to pay.
24.3. The Lessee shall not be the agent of the Lessor in making repairs or other
improvements to the Premises and no materialman's liens or claims thereunder
shall be valid against the Lessor or against the interest of the Lessor in the
Premises. -
24.4. All materials, supplies, or equipment stored outside of the buildings located on
the Premises shall be stored in an orderly manner so as not to create a nuisance
or fire hazard and shall be in compliance with all applicable governmental
regulations.
--24:5.' The Lessee must at all times keep the Premises and buildings in a safe and
clean condition and comply in all respects with all government, health, and
police requirements. The Lessee will remove at its own expense any rubbish
which may accumulate on the property.
24.6. The Lessee shall be responsible for snow removal on the Premises as required
by Lessee's occupancy and shall keep unpaved areas grassed and landscaped
to present a pleasing appearance. Such grass and landscaping shall be kept
reasonably mowed and trimmed.
25. Cash-Basis Law. Lessor acknowledges and agrees that (a) Lessee is a political
subdivision of the State of Kansas and subject to the Kansas cash-basis law, K.S.A. 10-
1102,et seq.,and amendments thereto,and(b)notwithstanding anything to the contrary
in this Lease, Lessee is obligated only to pay periodic payments under this Lease as
may be made from(i)funds budgeted and appropriated for that purpose during Lessee's
current budget year or (ii) funds made available to Lessee from any lawfully operated
revenue producing source. If the City Commission of the City of Salina fails to
appropriate funds to pay periodic payments due and payable under this Lease, Lessee
will make all reasonable efforts to promptly provide notice to Lessor of the non-
appropriation; provided, however, the effect of City Commission's non-appropriation
is not preconditioned upon notice of the non-appropriation by the Lessee to the Lessor.
26. Recording. Lessee and Lessor agree to execute a memorandum evidencing the
existence and duration of this Lease, and identifying Lessee's option to purchase the
Premises, which shall be recorded with the office of the Saline County, Kansas Register
of Deeds.
27. Binding Effect. This Lease shall be binding upon the heirs, beneficiaries, personal
representatives, successors, and assigns of the Lessor and the Lessee.
{Signature page follows)
13
The Lessor and the Lessee have each caused this Lease to be executed by its duly
authorized officers on the date shown.
KMJJM, L.L.C. (Lessor)r)
Date: nem I} , 2018 By: ,
Charles Henry, Man g Member
CITY OF SALINA (Lessee)
Date: M4 r'i 6 , 2018 By:
Joe Cit
g � Y Ma ager
ATTEST
Date: Mai i (Q , 2018 By: 1a2 (v( Cit
andi Wicks, CMC, City Clerk
14
EXHIBIT A
Description of Premises
Lot Two (2) and a portion of Lot Four (4) on Santa Fe Avenue, and Lot One
(1) and a portion of Lot Three (3) on Seventh Street, and a portion of vacated
Seventh Street right-of-way and vacated alley in Original Town Salina, Saline
County, Kansas, being more particularly described as follows:
Beginning at the Northeast corner of said Lot Two (2), said point also being
the intersection of the South right-of-way line of North Street and the West
right-of-way line of Santa Fe Avenue; thence on an assumed bearing of South
00° 02' 43" East on the East line of said Lot Two (2), a distance of Forty-nine
and Eighty-five Hundredths (49.85) feet to the Southeast corner of said Lot
Two (2), said point being the intersection of said West right-of-way line and
the Northerly right-of-way line of the Atchison, Topeka and Santa Fe
Railroad; thence South 78° 49' 11" West on said Northerly right-of-way line,
a distance of Two Hundred Fifty-five and Sixteen Hundredths (255.16) feet
to the Southwest corner of said Lot Three (3); thence 80° 50' 03" West
continuing on said Northerly right-of-way line, a distance of Sixty-two and
Three Hundredths (62.03) feet; thence North 00° 49' 06" East a distance of
One Hundred Eleven and Fifty-five Hundredths (111.55) feet to a point on
said South right-of-way line; thence South 89° 34' 08" East on said South
right-of-way line, a distance of Three Hundred Nine and Ninety-three
Hundredths (309.93) feet to the point of beginning,
LESS the portion of vacated Seventh Street right-of-way.
15
EXHIBIT B
Depiction of Improvements on Premises
North Street Na
NNNNNN\ 1
Rest morn: T
- V • ADA Compliant 1 Gate• • Water/Sewer Hookup
'71 • Heated
s ..
• 6' black chainlink perimeter fence in
• 2 each — 16' wide vehicle gates
• Gates — open to inside perimeter
• Fence — not attached to building
Helps prevent illegal dumping
i_ , .1'1 ' • Enables onsite parking of vehicles
- Provides general security of facility
EXHIBIT C
Plans and Specs for Lessor's Improvements
• Construct water and sewer lines and complete all necessary hook-ups; restore
site(prior to city staff completing asphalt parking area and driving lane).
• Construct code-compliant, ADA-accessible, heated restroom (minimum 6' x 8'
or 48 square feet) with a toilet, sink, mirror, hand soap dispenser, and towel
dispenser, and water heater in the northeast corner of the building.
17
EXHIBIT D
Plans and Specs for Lessee's Improvements
• Santa Fe Concrete: @1,835 Sq. Ft./$6,100. City crews will emplace a new concrete
approach and driveway from Santa Fe Avenue west to the edge of the existing concrete
located at the building's front entranceway equaling approximately 1,835 square feet.
• North Street Concrete: @390 Sq. Ft./$1,100. City crews will emplace a new concrete
approach and driveway from North Street south and east to the edge of the existing
concrete located at the building's rear exit equaling approximately 390 square feet.
• New Asphalt and Parking Stalls: $21,700. City crews will emplace a new asphalt
parking area and driving lane from Santa Fe Avenue west to the edge of the existing
concrete located at the building's rear exit, running parallel to the building on the north
side along North Street. Crews will also provide the necessary painted pavement
markings for one ADA-accessible and six regular parking spaces.
• New Approach and Curb & Gutter: $1,000. Repair and/or replace curb and gutter as
needed to support the new concrete approach along Santa Fe Avenue.
• New Black 6' Chainlink Fence w/ Two Gates: $11,555. Contract the installation of a
6' black chainlink perimeter fence around the northern,eastern, and southern perimeter
of the property. The fence along the west perimeter will be installed in line with the
end of the building in order to keep the vacated portion of Seventh Street outside of the
fenced-in area. The fence will have two I6-foot gates; one at the entrance drive off
Santa Fe Avenue and one at the end of the asphalt driving lane at the west end exit.
Staff will coordinate and pay for Westar to remove the utility pole currently located at
the west end of the property in the area of the exit gate on the north side of the building.
• Signage and miscellaneous items: City crews will emplace or have emplaced a facility
sign and numerous informational, operational and traffic control signs at various
locations on the property, including outside of and within the building, as well as other
furniture, equipment and supplies essential to the operation of the recycling center.
These will be retained by the city when the lease is terminated.
18
EXHIBIT E
Description and Depiction of Access Area
A PORTION OF VACATED SEVENTH STREET RIGHT-OF-WAY
SAUNA, SALINE COUNTY. KANSAS
NORTH STREET R/W-\
— — �€ RAIROA0
- _____
IIIIIIIIIIIIIIIIIIIIIII
S • CmraiEit Sin. POINT OF BEGINNING
POINT OF
COMMENCMENT
• `STREET BLOCKADE NE COR, LOT 2 ON SANTA FE
S 89'34'08' E 549.67' --.�,.;rnsaa;>m1 N 89'34'08' W 264.93'
NW COR. LOT I •• :4-.00'
ON NORTH STREET 25 BUILHNG
:.•. •: ' I v SETBACK
t . .• '::..:IL PER ZONING
•
-cb
In i• •.I 1
f '••. II
LeBUILDING
BDING
A
O I .� € RNUtOA
SCALE: 1. a 30 p� • �1. •.
Cn, O :' . . .'•(1!n I ON SANTA SE COR. TFE 3
A Z ' •:.. : •.. I 49'170 W
§ N 80'50103' E ". 'F, ::�1�.j. - - s 7855.16'
S 17.30' ` / S-8 �•, - ON7TH
CCOOR, LOT 3
5
VACATED LOO' R/M PER
2. ORDINANCE 3-0 99-9924
$ Q ATCHISON, TOPEKA AND SANTA FE (RAILROAD
t. (R/W VARIES)
La _ —
6
1
O
II
742 DUVAU. AV[AUE
, KANSAS 67401
PH. (785)823-36x3-3400 I FAx (765) 623-3411
•: saavens n I . Yr.
... ncenn
♦ KAv
W VALLEY ENGINEERING 6.16-17 2 of 2
0393EXB-ACCESS WA
19