HomeMy WebLinkAbout20090921 - VIII-C-2September 15, 2009
TO: The Honorable Mayor and Council
FROM: John Crrossman, EDRA Dir.
RE: Authorize execution of NSP sublease, portion of 412E 4d' Street
Xcel plans to demolish the brick building behind the Mississippi Belle that they have
been using for anoffice-workspace for local maintenance. They had planned to replace
the space with a trailer unit on their substation property at the west edge of the city beside
55. The Public Works Director, Tom Montgomery, suggested that they lease space in the
former UBC lumber building instead. The City has leased this building, 412E 4`~ Street,
from the EDRA. The building serves as a garage and storage facility.
NSP has indicated they would like to lease 300 square feet including an oi~ce-work area
and one parking space. The EDRA has consented to the City subleasing the space, with
the rent passing through to the EDRA. The City Attorney, Dan Fluegel, drafted the lease
and NSP has agreed to it.
Terms:
• Length of lease: same as City: November 7, 2013.
• Notification of termination: The City lease has a 90 day notification period, so
the City would also give NSP 90 days notice if they intended to terminate.
• Rent: $3,000 per year, all included except phone.
• Liability: Lease includes hold harmless, liability and insurance provisions. The
building is also insured under the City's master policy.
Notes:
The expected use of the property occupied by 412E 4~` Street is parking for future
commuter transit. As this building is the furthest from the depot, and the best
constructed, it is likely to be the last one the EDRA would turn over for commuter
parking. The station block, Block 1 and the site of the former UBC building adjacent to
3rd Street would be more than sufficient for the initial park and ride facilities with 200 to
250 spaces.
ACTION: Authorize the Mayor and City Clerk to execute the sublease with Northern
States Power for 412E 4~'.
SUBLEASE AGREEMENT
This sublease agreement was entered into on September 2009, between the City of
Hastings, a Minnesota Municipal Corporation, of 101 East 4~St eet, Hastings, MN 55033,
referred to as "Lessor," and Northern States Power Company, a Minnesota Corporation, with
its principal place of business at 414 Nicollet Mall, Mezzanine, Minneapolis, MN 55401,
referred to as "Lessee."
.RECITALS
WHEREAS, Lessor currently leases from the Hastings Economic Development and
Redevelopment Authority, a public body corporate and politic under the laws of the State of
Minnesota (hereinafter "Hastings EDRA"), certain real property located at 412 and 415
Fourth Street East, Hastings, (hereinafter "Total Landlord Premises") pursuant to a written
Lease dated November 7, 2006 and Assignment of Lease dated July 20, 2009, copies of which
are attached hereto as Exhibit A (hereinafter "the Primary Lease").
WHEREAS, the terms of the Primary Lease provide that Lessor is leasing the Total
Landlord Premises on an interim basis; Hastings EDRA has the right to terminate the Primary
Lease at anytime by giving ninety (90) days written notice to Lessor; and Hastings EDRA
must consent to any sublease by the Lessor.
WHEREAS, Lessor desires to lease a portion of the Total Landlord Premises to
Lessee and Lessee desires to sublease that portion of the property from Lessor, subject to
certain terms, restrictions and requirements including all requirements and restrictions
contained in the Primary Lease.
NOW, THEREFORE, Lessor and Lessee do hereby agree as follows:
1. Demised Premises. Lessor, in consideration of the covenants herein contained, to be
kept and performed by the Lessee, does hereby lease to the Lessee and the Lessee does hereby
lease from Lessor that certain portion of the property located at 412 Fourth Street East,
Hastings, MN 55033, including the non-exclusive use of approximately 96 square feet of
office space, 200 square feet of garage parking stall, and the non-exclusive use of the existing
men's and women's restrooms, as depicted on the sketched attached hereto as Exhibit B
(hereinafter "Premises").
2. Term and Commencement.
2.1 Term. The term of this Lease shall be from the Commencement Date until
November 7, 2013, unless eazlier terminated. Lessor shall have the right to terminate this
Lease at any time during the term hereof by giving ninety (90} days written notice to Lessee
upon which Lessee shall vacate the premises and return possession of the premises to Lessor.
Lessee shall have the right to terminate the Lease at anytime during the term hereof by giving
ninety (90) days written notice to Lessor. The term can be extended by written agreement of
both Lessor and Lessee.
2.2 Commencement Date. The Commencement Date shall be the date the last of
the parties sign this Lease.
3. Improvements. The Fremises is being leased in an "AS IS" condition. To the extent
requested by Lessee, Lessee shall be allowed to construct a secure office area within the
location shown on the attached Exhibit B. Further, Lessee shall be authorized to construct a
secure, fenced shelving unit in the gazage azea.
4. Use of the Demised Premises. It is agreed that the Premises shall be used by the
Lessee solely for the following purpose: utility operations office and storage of vehicles and
equipment.
S. Rent; Tazes and Utilities. Lessee shall be responsible for payment of rent and other
costs associated with the Premises as follows:
S. l Rent. During the term of this Lease Lessee shall pay rent to Lessor in the
amount of $250.00 per month payable on the 1 ~` day of each month.
S.2 Tazes, Utilities and Assessments. Lessor is exempt from the assessment of
real estate taxes against its properties under Minnesota law. However, if for some reason real
estate taxes are lawfully assessed against the Premises after the Commencement Date and
during the term of this Lease, Lessee shall be responsible for the payment of its pro-rata share
of the assessed real estate taxes prior to delinquency, subject to Lessee's right to terminate the
Lease as provided herein. Lessor shall be responsible for the payment of all utility charges
applicable to the premises during the term of this Lease except for charges for any telephone
or Internet services ordered by Lessee, the costs of which shall be billed directly to, and paid
by, Lessee. Lessee shall independently determine the electrical utility servicing the property
is adequate for Lessee's intended use of the Premises and Lessee shall not cause any overload
to the electrical utility service.
6. Maintenance. Lessor shall have sole responsibility for the maintenance of ali aspects
of the Premises, including, without limitation, the roof and structural portions, and will keep it
in reasonable condition, subject to reasonable weaz and teaz and damage by fire and the
elements excepted. Lessee will keep the premises in an orderly, clean and sanitary condition
as required by the laws and ordinances applicable thereto; and will not do or permit to be done
on the Premises anything in violation of the laws or ordinances applicable thereto. Lessor
shall be responsible for garbage removal costs.
7. Insurance.
7.1 Lessee shall maintain comprehensive general liability insurance, naming
Lessor and Hastings EDRA as additional insured, with respect to accidents occurring on or
about the Premises or arising out of the use thereof in reasonable amounts, but not less than
$1,000,000.00 for injury or death to any person, $1,000,000.00 for injuries or deaths arising
out of any one accident, and $1,000,000.00 for property damage, with reasonable deductible
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clauses, written by companies licensed to do business in the State of Minnesota and will
deliver to Lessor a certification of such insurance providing for fifteen (15) days written
notice to Lessor prior to cancellation thereof.
7.2 Lessor shall keep the Premises insured against loss by fire and extended
coverage perils in the amount ofreplacement coverage as determined by Lessor. The
insurance shall be written by companies licensed to do business in the State of Minnesota.
Lessee shall maintain casualty insurance for a1I personal property stored by Lessee within the
Premises.
8. Alterations and Liens.
8.1 Lessee shall not be allowed to alter or remodel the Premises without the prior
written consent of Lessor, which consent will not be unreasonably withheld. As provided in
Section 3 hereof, Lessee shall be allowed to make certain improvements to the Premises.
8.2 In the event that a lien is placed against the Premises as a result of any
construction or alteration done by or at the request of Lessee, Lessee shall satisfy or remove
the same within ten (10) days of receipt of notice from Lessor. So long as the laws of this
State shall provide for the filing of a statutory bond to eliminate the attachment of mechanic's
or materialmen's liens to real estate, Lessee shall require that its contractor or itself shall take
such steps as are provided by law for the filing of said statutory bond to remove any such lien
in the event Lessee contests the validity of such lien. If the same is not removed within ten
(I O) days from the date of written notice from Lessor, Lessor shall have the right at Lessor's
option of paying the same or any portion thereof and the amounts so paid, including attorney's
fees and expenses connected therewith, shall be deemed to be additional rent due from Lessee
to Lessor and shall be paid to Lessor immediately upon provision to Lessee of a bill for same.
Lessee shall indemnify and save harmless Lessor from and against all losses, claims,
damages, costs or expenses suffered by Lessor by reason of any repairs, installations or
improvements made by Lessee.
9. Damage. If the Premises is damaged or destroyed by Lessee or any person under its
control, Lessee shall repair or replace the same to substantially the same condition as existed
immediately prior to such damage or destruction unless Lessor agrees that repair or
replacement is not necessary.
10. Default.
10. i In the event the Lessee should (a) default in the payment of any of the rentals
within ten (10) days of notice that same is due hereunder or (b) default in the keeping or
performing of any other term or condition of this Lease and fail to remove such default within
thirty (30) days after receipt of notice in writing from the Lessor specifying the nature of such
default, -then and in any such event the Lessor is hereby authorized to re-enter said Premises,
to eject the Lessee, and take full possession of said Premises and to terminate this Lease at it's
option.
11. Condemnation.
11.1 If the whole of the Premises shall be taken by any public authority under the
power of eminent domain, this Lease shall terminate when possession thereof shall be
required by the appropriating or condemning authority, or when legal title to the Premises
shall vest in the appropriating or condemning authority, whichever shall first occur.
12. Lessors Access to Premises. Lessor has disclosed and Lessee acknowledges that the
Premises must be open for access by employees of Lessor to access the electrical panel, alarm,
garage area and restrooms. Lessee agrees to provide access to all areas of the Premises,
excluding any areas made secure by future improvements as provided herein, without
advanced notice.
I3. Assigning or Subletting. Lessee will not assign this Lease, and not sublet any part of
the Premises without the prior consent in writing of the Lessor.
14. Indemnity.
14.1 The Lessee agrees to indemnify, defend and hold Lessor and Hastings EDRA
and their partners, officers and employees harmless from and against any claim, loss or
expense arising out of injury, death or property loss or damage occurring in the Premises,
except to the extent caused by the negligent act or intentional misconduct of Lessor or
Hastings EDRA or their partners, officers, employees, or invitees.
14.2 The Lessor agrees to indemnify, defend and hold Lessee and its partners,
officers and employees harmless from and against any claim, loss or expense arising out of
injury, death or property loss or damage occurring as a result of Lessor's or Hastings ED12A's
acts or omissions, to the extent caused by the negligent act or intentional misconduct of
Lessor or Hastings EDRA or their partners, officers, employees, or invitees.
15. Mutual Release. Lessor and Lessee hereby release one another and their respective
partners, officers and employees and property manager from any and all liability (to the other
or anyone claiming through or under them by way of subrogation or otherwise) for any loss or
damage covered by property insurance or coverable by a customary policy of insurance even
if such loss or damage shall have been caused by the fault or negligence of the other parry, or
anyone for whom such-party may be responsible.
1 b. Notices. All notices, consents, demands and requests which may be or are required to
be given by either party to the other, shall be in writing, and shall be deemed given or served
when deposited in the United States mail by registered or certified mail, postage prepaid,
addressed as follows:
If tQ Lessor: City of Hastings
101 Fourth Street East
Hastings, NiN 55033
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If to Lessee: Xcel Energy
Attn: Real Estate Services
414 Nicollet Mall
Mezzanine
Minneapolis, MN 55401
If to Hastings EDRA: Hastings Economic Development and
Redevelopment Authority
10 i Fourth Street East
Hastings, MN 55033
Such addresses may be changed from time to time by either party by serving notices as above
provided.
17. Attorneys Pees. In the event either party hereto institutes legal action or proceedings
arising out of or in any way connected with this Lease, the non-prevailing party shall
reimburse the prevailing parry for all reasonable attorney fees and costs incurred in connection
herewith.
18. All Agreements Included. This Lease embodies all the agreements between the
parties hereto respecting the premises hereby demised. All subsequent changes and
modifications to be valid shall be embodied within a written instrument duly executed by the
parties hereto.
19. Paragraph Headings. The headings of the several pazagraphs contained herein are
for convenience only and do not define, limit, or construe the contents, construction or
meaning of the provisions of this Lease.
20. Laws of Minnesota. The laws of the State of Minnesota shall govern the validity,
performance and enforcement of this Lease.
21. Saving Clause. The invalidity or unenforceability of any provision of this Lease shall
not affect or impair the validity of any other provision.
22. Successors and Assigns. All of the terms, covenants, provisions and conditions of
this Lease shall be binding upon and inure to the benefit of the parties hereto, their respective
successors and assigns.
23. Consents. Lessor and Lessee covenant and agree that whenever, pursuant to the terms
of this Lease, consent, satisfaction, determination or approval is required or permitted of
Lessor and Lessee, such consent, satisfaction, determination or approval shall not be
unreasonably determined, withheld or delayed.
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24. Hazardous Materials.
24.1 Lessee shall not use, store, manufacture, dispose of or discharge any pollutants,
contaminants, or harmful or hazardous substances in excess of the USDOT reportable
quantities far Dangerous Goods and Hazardous Materials from or on the Premises or
otherwise occupy or permit the Premises to be occupied or used in a manner which:
24.1.1 violates any law, regulation, rule or other governmental requirement;
24.1.2 impairs the health, safety or condition of any person or property; or
24.1.3 adversely affects the use, enjoyment or value of the Premises or the
surrounding property.
24.2 Lessee shall promptly notify Lessor of the breach, or the potential or threatened
breach, of any of the provisions of this paragraph. Lessor shall have the right of access to the
Premises to inspect, test and, in Lessor's sole discretion, remedy any potential environmental
problem. Lessee shall indemnify and hold Lessor and its officers, shareholders, partners,
employees, and agents, harmless from any loss, claim, liability or expense (including, without
limitation, attorneys' fees, court costs, consultant fees, expert fees, penalties, fines, removal,
clean-up, transportation, disposal, restoration expenses, diminution in value of the Premises,
damages for the loss or restriction on use of rentable or usable space or of any amenity of the
Premises, damages arising from any adverse impact on marketing of space) arising in
connection with Lessee's failure to comply with the provisions of this paragraph.
24.3 Lessee will indemnify, defend, save and hold harmless Lessor and Hastings
EDRA and their officers, directors, shareholders, employees, agents, partners, and their
respective heirs, successors and assigns (collectively "Indemnified Parties") against and from,
and to reimburse the Indemnified Parties with respect to, any and all damages, claims,
liabilities, loss, costs and expenses (including, without limitation, all attorney's fees and
expenses, court costs, administrative costs and costs of appeals), incurred by or asserted
against the Indemnified Parties by reason of or arising out of Lessee's failure to comply with
the provisions of this paragraph.
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IN WITNESS WHEREOF the respective parties hereby have executed this Lease
Agreement on the day and year first above written.
By:
(SEAL)
By:
STATE OF MINNESOTA )
} ss.
COUNTY OF DAKOTA )
LESSOR:
City of Hastings,
a Minnesota Municipal Corporation
Paul J. Hicks, Mayor
Melanie Mesko Lee, Assistant
City Administrator/City Clerk
LESSEE:
Northern States Power Company,
a Minnesota Corporation
By:
Kristen C. Karabensh
It's: Director of Real Estate Services
The foregoing instrument was acknowledged before me this day of ,
2009 by Paul J. Hicks, Mayor of the City of Hastings, a Minnesota municipal corporation, and
by Melanie Mesko Lee, Assistant City Administrator/City Clerk of the City of Hastings, a
Minnesota municipal corporation, on behalf of said corporation.
Notary Public
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STATE OF Zti:QNNE50TA )
ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this day of ,
2009 by Kristen C. Karabensh, Director of Real Estate Services for Northern States Power
Company, a Minnesota Corporation, on behalf of the corporation.
Notary Public
CONSENT TO SUBLEASE
The Hastings Economic Development and Redevelopment Authority hereby consents
to the City of Hastings subleasing a portion of the property at 412 East Fourth Street,
Hastings, Minnesota to Northern States Power Company, a Minnesota Corporation, pursuant
to the Lease attached hereto.
Hastings Economic Development and
Redevelopment Authority in and for the
City of Hastings, a Public Body Corporate
and Politic under the Laws of the State of
Minnesota
$y:
Pamela Hoizem
It's President
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