HomeMy WebLinkAbout4.B.2. Authorize Execution of Lease Agreement with Arvig Communications on L-16 Lift station Site CITY OF SHAKOPEE _ r VT
Memorandum��`
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Authorize the Execution of a Lease Agreement with Arvig Communications on
the L -16 Site
DATE: December 18, 2012
ACTION SOUGHT:
For City Council to approve a lease agreement with a telecommunications company on the L -16
site.
BACKGROUND:
Arvig Communication is installing fiber communication lines in the City and to Lift Station L -16
and the SPU building. This work is underway and nearly completed.
Part of this installation, Arvig needs to install a Retransmission Node Control Center for its
operations. In working with staff, utilizing a portion of the L -16 site would work very well for
Arvig. The lease area being proposed is as shown on the attached location drawing.
A lease agreement has been prepared by the City attorney which includes the lease payments
renewals, insurance requirements, waiver of liability and the articles that protect the City in this
lease.
Arvig has agreed to the payment conditions included in the lease and staff feels the area being
leased will not affect the City operations of the lift station. If approved, Arvig would like to start
December 19 to meet the end of year deadline.
ALTERNATIVES:
1. Authorize the appropriate City officials to execute the Lease Agreement with Arvig
Communications Systems for land on the L -16 site.
2. Do not approve the lease agreement.
3. Table for additional information.
BUDGET IMPACT:
This lease agreement will generate a small revenue for the City.
RECOMMENDATION:
Staff would recommend Alternative No. 1.
RELATIONSHIP TO VISIONING:
This supports Goal E: "Deliver effective and efficient public services by a staff of well- trained,
caring, and professional employees ".
ACTION REQUESTED:
Authorize the appropriate City officials to execute the Lease Agreement with Arvig
Communications Systems for land on the L -16 site.
J ✓.0
Bruce Lo P.
Public Works Director
ENGR 2012PROJ ECTS- COUNCILAuthorizetheExecutionofaLeaseAgreementwithArvigCommunicationsontheL- 16Site
SITE LEASE AGREEMENT
This Site Lease Agreement ( "Agreement ") is made as of December 17, 2012 by and between City of
Shakopee, a Minnesota municipal corporation ( "City "), whose address is 129 South Holmes Street,
Shakopee, MN 55379, and Arvig Enterprises, Inc. a Minnesota Corporation ( "Tenant "), whose
address is 150 Second Street SW, Perham, MN 56573 for the leasing of certain City -owned property
pursuant to the following terms:
1. PROPERTY. The City owns the property ( "Property ") described in Exhibit A. Tenant
desires to lease a 16' x 20' feet portion of the Property ( "Leased Premises ") to construct a concrete
pad, fencing and a 10' x 14' concrete building to house remote switching, control and re-
amplification equipment ( "Communications Facilities "). The Leased Premises is depicted in the
aerial photograph attached as Exhibit A -1 and a picture of the building is attached as Exhibit A -2.
The exact location of the building on the Leased Premises is subject to the City's reasonable
approval.
2. TERM. The initial term of this Agreement shall begin on January 1, 2013 ( "Commencement
Date on December 31, 2017 ( "Initial Term "). Tenant is allowed to enter the Property beginning
December 18, 2012 for purposes of commencing site preparation, construction of the building, and
installation of the Communications Facilities.
3. RENT.
A. Rent Amount. As consideration for this Agreement, Tenant shall pay to the City an
annual rent in the amount of $2,400 for each year of the Initial Term plus any applicable
sales tax. The annual rent for each year of the Initial Term and for each year of an Option
Term is due and payable on January 1 of each year.
B. Taxes. Tenant will pay all property taxes (if any) assessed against the Property or the
Leased Premises.
C. City Costs. At the time of executing this Agreement, Tenant shall pay the City $1,000 for
the City's costs related to drafting and processing this Agreement.
4. OPTION TERMS. Subject to the terms and conditions contained in this Agreement, this
Agreement shall automatically renew for up to 3 additional and successive renewal terms of 5 years
each (each, an "Option Term ") unless Tenant gives the City written notice of Tenant's intention not
to extend at least thirty 30 days before the expiration of the then - current term. The annual rent for
the first Option Term shall be 5% higher than the annual rent for the Initial Term and the annual rent
for each of the succeeding Option Terms shall be 5% higher than the annual rent for the immediately
preceding Option Term.
5. USE.
A. General. Tenant shall use the Leased Premises solely for the purpose of constructing,
maintaining and operating a concrete pad, fencing and a 10' x 14' concrete building to house
remote switching, control and re- amplification equipment.
1
B. Access to Leased Premises. The City shall provide Tenant with access to the Leased
Premises 24 hours per day, 7 days per week, except that City may require Tenant to make
advance arrangements for access with a City - designated security official, which official will
be available twenty -four (24) hours per day, seven (7) days per week. Tenant shall be fully
liable for any and all loss, damage or claim associated with its use of the Leased Premises
and access to the City's Property.
6. CONDITIONS
A. The contractor that will be constructing the building must complete a building permit
application with the City's Building Inspections Division and a building permit must be
issued before construction can begin. An electrical permit must also be obtained prior to
commencement of construction. Also the project will comply with applicable building
codes and city inspection processes as determined by the Building Official or his
designees.
B. No advertising shall be displayed on or affixed to the building.
C. Tenant is responsible for the maintenance and upkeep of the building.
D. The exterior materials and colors of the building shall be similar to the exterior building
depicted on Exhibit A -2.
7. UTILITIES. Payment for electric service, telephone or other utility services to the Leased
Premises shall be Tenant's responsibility.
8. INSURANCE.
A. Indemnity. Tenant shall indemnify City and hold City harmless from and against any
and all claims and demands relating to the negligence or misconduct of Tenant, its agents and
employees, including the payment of reasonable attorneys' fees and costs for damages to
property and injury or death to persons, including any payments made under any workers'
compensation law or any plan for employees' disability and death benefits, which may arise
out of or be caused by the installation, maintenance, presence, use or removal of Tenant's use
of the Leased Premises, except as said claim or demand may arise out of or in any way result
from the willful misconduct of City, its employees, agents or invitees.
B. Workers Compensation. Tenant must maintain Workers' Compensation insurance in
compliance with all applicable statutes. The policy shall also provide Employer's Liability
coverage with limits of $500,000 bodily injury each accident, $500,000 bodily injury by
disease, policy limit, and $500,000 bodily injury by disease, each employee.
C. General Liability. Tenant must maintain an occurrence form Commercial General
Liability Coverage, including coverage for mobile equipment. Such coverage shall provide
for third party bodily injury and property damage arising out of the use, maintenance, or
operation of the Leased Premises. Tenant must maintain aforementioned Commercial
General Liability Coverage with limits of liability of $1,000,000 each occurrence;
$1,000,000 personal and advertising injury; $5,000,000 general aggregate, and $5,000,000
products and completed operations aggregate. These limits may be satisfied by the
2
Commercial General Liability Coverage or in combination with an Umbrella or Excess
Liability Policy, provided coverage afforded by the Umbrella or Excess Policy is no less than
the underlying commercial General Liability Coverage.
D. Automobile Liability. Tenant must carry Commercial Automobile Liability Coverage.
Coverage shall afford total combined single limits in the amount of $1,000,000 per accident.
The liability limits may be afforded under the Commercial Automobile Liability Policy, or in
combination with an Umbrella or Excess Liability Policy provided coverage afforded by the
Umbrella or Excess Policy is no less than the underlying Commercial Automobile Liability
coverage. Coverage shall be provided for third party bodily injury and property damage
arising out of the ownership, use maintenance or operation of all owned, non - owned, and
hired automobiles. The Commercial Automobile Policy shall include at least statutory
personal injury protection, uninsured motorists and underinsured motorists coverages.
F. Additional Insured - Certificate of Insurance. Tenant shall provide, prior to tenancy,
evidence of the required insurance in the form of a Certificate of Insurance issued by a
company reasonably acceptable to City (rated A or better by A.M. Best), licensed to do
business in the state of Minnesota, which includes all coverages required in this Paragraph.
Tenant will name City as an Additional Insured on the Commercial General Liability and
Commercial Automobile Liability Policies. The Certificate(s) shall provide that the coverage
may not be canceled except in accordance with the terms of such policies.
G. Casualty. Neither party shall be liable to the other (or to the other's Successors or
assigns) for any loss or damage caused by fire or other casualty which could be insured
against under the terms of standard fire and extended coverage (all risk) insurance policies,
regardless of cause or origin, including fault or negligence of the other party or anyone for
whom such party may be responsible.
9. TERMINATION.
A. Termination Events. Except as otherwise provided in this Agreement, this Agreement
may be terminated, without any penalty or further liability, on 60 days notice as follows:
1. by either party upon default of any covenant or term by the other party which
default is not cured within sixty (60) days of receipt of written notice of
default (without, however, limiting any other rights available to the parties
pursuant to any other provisions in this Agreement); or
2. by Tenant if it is unable to obtain or maintain any license, permit or other
governmental approval necessary to the construction or operation of the
Communications Facilities.
3. by City, upon one (1) year's prior written notice to Tenant, if its City Council
decides, for any reason, to re -use or redevelop the Property in a manner
inconsistent with the continued use of the Leased Premises by Tenant.
B. Site Restoration. Upon expiration of this Agreement or if this Agreement is terminated
or not renewed, Tenant shall have 90 days from the termination or expiration date to remove
all of its facilities and equipment, including but not limited to the concrete pad, fence,
building, and Communications Facilities. If those facilities are not removed to the
3
reasonable satisfaction of the City, the City shall remove them and Tenant is responsible for
all costs incurred by the City in doing so.
10. MAINTENANCE AND OPERATION PROPERTY.
A. City Right to Operate. City shall have the right to operate its facilities on the Property in
such manner as will best enable it to fulfill its own service requirements. City shall not be
liable to Tenant for any interruption of the service of Tenant or for interference with the
operation of Tenant's use of the Leased Premises, unless due solely to the negligence or
willful misconduct of City, its employees, agents, or invitees.
B. Limitations of City's Liability. If City negligently causes interruption of the business of
Tenant or for any other City breach of this Agreement, City's liability for damages to Tenant
shall be limited to the actual and direct costs of equipment removal, relocation or repair and
shall specifically exclude any recovery for value of the business of Tenant as a going
concern, future expectation of profits, loss of business or profit or related damages to Tenant.
11. HAZARDOUS SUBSTANCES. City represents that it has no knowledge of any substance,
chemical, or waste on City's Property that is identified as hazardous, toxic or dangerous in any
applicable federal, state or local law or regulation. City shall hold Tenant harmless from and
indemnify Tenant against any damage, loss, expense, response costs, or liability, including
consultant fees and attorneys' fees resulting from the presence of hazardous substances on, under, or
around City's Property or resulting from hazardous substances being generated, stored, disposed of,
or transported to, on, under, or around City's Property as long as the hazardous substances were not
generated, stored, disposed of, or transported by Tenant or its employees, agents or contractors.
Tenant represents and warrants that hazardous substances will not be generated, stored, disposed of
or transported to, on, under, or around City's Property by Tenant. Tenant shall hold City harmless
from and indemnify City against any damage, loss, expense, response costs, or liability, including
consultant fees and attorneys' fees resulting from hazardous substances generated, stored, disposed
of, or transported to, on, under, or around City's Property by Tenant or its employees, agents or
contractors.
12. CASUALTY. If any portion of the Property is damaged by any casualty and such damage
adversely affects Tenant's use of the Leased Premises, this Agreement shall terminate as of the date
of the casualty if Tenant gives written notice of the same within thirty (30) days after Tenant
receives notice of such casualty.
13. CONDEMNATION. If a condemning authority takes any portion of City's Property and
such taking adversely affects Tenant's use of the Leased Premises in Tenant's sole determination,
this Agreement shall terminate as of the date of the taking and City will be entitled to all the
proceeds from such condemnation. Sale of all or part of the Property to a purchaser with the power
of eminent domain in the face of the exercise of such power shall be treated as a taking by
condemnation.
14. QUIET ENJOYMENT. Tenant, upon performance of its obligations under this Agreement,
shall peaceably and quietly have, hold and enjoy the Leased Premises subject to primary use by the
City for its lift station facility.
15. MISCELLANEOUS.
4
A. Authority; Title. City represents and warrants that City has full authority to enter into
this Agreement and that any person or entity executing in a representative capacity for City
has full authority to do so. City represents that it will have good and marketable title to the
Property and Leased Premises on the Commencement Date.
B. Integration Amendment. This Agreement supersedes all prior discussions and
negotiations and contains all agreements and understandings between City and Tenant. This
Agreement may only be amended in writing signed by all parties. All Exhibits are
incorporated into this Agreement by reference. No provision of this Agreement will be
deemed waived unless expressly waived in writing by the waiving party. No waiver shall be
implied by delay or other act or omission of either party. No waiver by either party of any
provisions of this Agreement shall be deemed a waiver of such provision with respect to any
subsequent matter relating to such provision.
C. Counterparts. This Agreement may be signed in counterparts by the parties.
D. No Assignment. Tenant may not assign or transfer this Agreement at any time or
sublease a portion of the Leased Premises without City's prior written consent, which will
not be unreasonably withheld, conditioned or delayed; provided however, that Tenant may
assign its interest to any affiliate, contract affiliate or entity commonly -owned by Tenant's
parent company or to any successor -in- interest acquiring fifty -one percent (51 %) or more of
its stock or assets.
G. Notice. Notices shall be in writing and sent by United States Mail, postage prepaid,
certified or registered with return receipt requested or by courier service to the address set
forth beneath the signature of each party below.
H. Governing Law. This Agreement shall be construed in accordance with the laws of
Minnesota.
I. No Broker. Tenant represents that they have not been represented by a real estate broker
or other listing agent in connection with this Agreement in this transaction for purposes of
commission, fee or other - payment to such broker or any other leasing agent claiming to have
represented Tenant
J. Document Execution. The parties shall cooperate with one another regarding any
reasonable requests made subsequent to execution of this Agreement to correct any clerical
errors contained in the Agreement and to provide any and all additional documentation
deemed necessary to effectuate the transaction contemplated by this Agreement.
K. Severability. If any term of this Agreement is 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.
L. Headings. Headings set forth in this Agreement are for convenience, only, and are not to
be construed against the content of any paragraphs.
M. Exhibits. This Agreement contains the following exhibits:
A. Legal Description of Property
5
A -1 Aerial Photograph of Leased Premises
A -2 Picture Depicting Tenant's Building
IN WITNESS WHEREOF, the parties have executed this Agreement the on the dates noted
below.
CITY OF SHAKOPEE
By:
Its Mayor
By:
Its City Administrator
STATE OF MINNESOTA )
)ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of
2012, by Brad Tabke and Mark McNeill, the Mayor and City Administrator respectively of the City
of Shakopee, a Minnesota Municipal Corporation on behalf of the Municipal corporation.
Notary Public
Arvig Enterprises, Inc., a Minnesota Corporation
By:
Its:
STATE OF MINNESOTA
)ss.
COUNTY OF
The foregoing instrument was acknowledged before me this day of
2012, by , the of Arvig Enterprises, Inc., a
Minnesota Corporation, on behalf of the corporation.
Notary Public
6
EXHIBIT A
Legal Description of Property
Commencing at the Southwest corner of the Southwest Quarter of the Northeast Quarter of said Section
6; Township 115, Range 22, thence on an assumed bearing of North 0 degrees 02 minutes 15 seconds
West along the Westerly line of said Southwest Quarter of the Northeast Quarter a distance of 1,276.84
feet to the Northerly right -of -way line of State Highway No. 101; thence North 79 degrees 15
minutes 36 seconds East along said Northerly right -of -way line a distance of 270.79 feet; thence North 10
degrees 38 minutes 28 seconds West a distance of 294.60 feet; thence North 79 degrees 21 minutes 32
seconds East a distance of 160 feet; thence North 9 degrees 38 minutes 20 seconds West a distance of 55.25
feet; thence South 79 degrees 21 minutes 32 seconds West a distance of 55.05 feet to the point of beginning
of the land to be described; thence North 10 degrees 41 minutes 39 seconds West a distance of 189.87 feet;
thence South 79 degrees 15 minutes 20 seconds West a distance of 1 17.28 feet; thence South 10 degrees
35 minutes 17 seconds East a distance of 177.60 feet; thence South 18 degrees 53 minutes 47
seconds West to the intersection with a line drawn South 79 degrees 21 minutes 32 seconds
West from the point of beginning; thence North 79 degrees 21 minutes 32 seconds East to the point of
beginning.
7
EXHIBIT A-1
Aerial Photograph of Leased Premises
L-16 Site
. •
ihirt
. ... _ ,
, - -
, . .
• k ,... ,
7 k .
e '
•
. .
,-----
r---c-i
; .
lit ,
\ . \ • --
.
,,,. ••
‘,4 L--- \----3
r \
--- - , \ u.......................
t
tore
1-. , A toti
BLUFF AVENUE
8
EXHIBIT A-2
Picture Depicting Tenant's Building
i 'P..
' !• . .4 Yff
"- ' __... .. ,
3 I 1
.. .
1" - :, , • A, .,
A 1 fit . 4
• 0 '"' 41 ' A ■ .' ' 1
fr '.-.: ' • , 4
.. le • li i ' ' 1 4 ' : :
." ,.'
'
• p
, .
-
' t, .
1 . • I 1
1 l o ll
•
• I
i . ,.. 1 ■
. ,
t
■ 44
-' ) ' .. .,. _,......, .
, .....
. ,- ,,
- , ,„„ ..,
.. f 3 li
I IM - r - - *....
...
. %,
. .. p 3
• I
....*_* .
..-
fill
irek: ,
t
-- " '
. - 4 ... 4 aso .,
f
.... •
„ ......... +.1"."7
1 .."'
.3 ......,............"'""'
- - -
...t.4,.
,
_. -- _ -
'-., . .: k..A.: - , - .1 - • - , - '
. - . ;-..-- ..4 -tt... -- . - ...- - -1-1....- x - !:, ,- - 10(..,' *L'i
4- -.C4 . * t • t 4*. ' e ''t:•,..erf'-131154411e* hi"-
c '''‘ ,----,.. •,*, _ -.., '°- ' , ..4*. .45. ,:. 41 ):"'", • Vnir, 4 . '41 v4.4:::" *
v
* *. k*.."`• 4 g , --'''!.f - t - ,..„ . .4" . ; -le --..*: - ,:, ,... -'t--: *-- • .',# :- - „it,
-,..„ ;0 - 1,... .. ,-;,----; .. - - , ......z.. st...,.! - ..... A ,.,
. ou
ZA:
' .- 4:Y . '• ' ..... ° . , ' 2 3. • . ., : •CeZ 7 , * h ;Cif " " . ■ 4 .. -•It it `; - • ..
••••., ' _ - • — 4-4.i..../:-• ' " . , v- ir . : ''' i t. ' - " • :
. . 03 -
4 r . . '') .• • .4•14.{: `,01, -I . i;,.. -,- r. • v 7. ..;e• ,• _; . - t,,T•it
, ; : •
?.... ... -. - .1.c . . '. . Pi 1 , . . . .... ' • 61' r . ' 4 ' :
11.r.: 4 7 4.7 '. ' V . 'IC 4 .. : '' 1 ... . . WIC * • • "`Vt, .• . , i g , : o f l ir t ''''. c. '
to t
,.....,, _ -, -4 r- i t , ..• - " t ri.• . ..:0•• • .*'' . ....
4 ,
4, 1.,0); - ..•... ir-;4. ...... ' . •
9