Fiscal Note
Initial annual rent of $790 is anticipated. For the first year, the Real Estate Section will retain about $500 for administrative costs. Rent is subject to annual adjustment during the first five years based upon changes in assessed land value. There is no anticipated impact upon the tax levy or cost controls.
Title
Authorizing the Mayor and City Clerk to execute a lease with Postal Partners, LLC, the owner of property located at 441 North Lake Street, to accommodate the existing encroachment of the owner's building into the City's adjacent Lake Street Parking Ramp property.
Body
WHEREAS, in 1968 the City granted a Land Use Agreement to Franchise Realty Interstate Corporation (n/k/a McDonald's Real Estate Company), the owner of the property located at 441 North Lake Street, allowing for the encroachment of a one-story commercial building into the adjacent City-owned property located at 414 North Lake Street, commonly known as the Lake Street parking Ramp; and
WHEREAS, by deed dated January 24, 2007, McDonald's Real Estate Company transferred ownership of its property at 441 North Lake Street to Postal Partners, LLC; and
WHEREAS, the terms of the Land Use Agreement do not allow for its transfer to a new owner; and
WHEREAS, Postal Partners, LLC desires to enter into a lease with the City to accommodate the existing building encroachment; and
WHEREAS, the terms of a lease have been negotiated between Postal Partners, LLC and City of Madison Parking Utility and Real Estate Section staff; and
WHEREAS, the City Attorney's office has reviewed and approved the lease as to form.
NOW THEREFORE BE IT RESOLVED that the Mayor and City Clerk are authorized to execute a lease with Postal Partners, LLC (the "Lessee") to accommodate the existing encroachment of the Lessee's building at 441 North Lake Street (the "Lessee's Building") into the adjacent City-owned property located at 414 North Lake Street (the "City's Property"), subject to the following terms and conditions:
1. The "Leased Premises" shall consist of approximately 158 square feet of the City's Property, as described on Exhibit A and depicted on Exhibit B.
2. The term of the lease shall be for a period of 30 years.
3. During the first five (5) years of the lease, the Lessee shall pay to the City an annual rent equal to ten percent (10%)of the current assessed per square foot land value of the Lessee's Property, multiplied by the square footage area of the Leased Premises. Annual rent for the first year of the lease is calculated as follows: 10% x $50/sq. ft. x158 sq. ft. = $790.00.
4. Commencing in year six (6), rent shall increase by 5% per each five (5) year period.
5. In the event the Lessee's Property becomes tax-exempt, rent shall be calculated in accordance with Paragraph 3 based on the last annual assessed land value of the Lessee's Property prior to it becoming tax-exempt.
6. No subletting of the Leased Premises shall be permitted. The Lessee shall be permitted to sell, assign, transfer, sublease, mortgage, pledge, encumber, grant and convey its interests in the lease and the improvements located on the Leased Premises (which actions are collectively referred to herein as "Transfers"), but only if such Transfer is made simultaneously with the Transfer of the Lessee's Property to the same purchaser or transferee of the lease and the improvements located on the Leased Premises.
7. No modification, improvement, alteration, redecoration, or remodeling of the Lessee's Building located on the Leased Premises shall be undertaken without prior written approval of the City's Real Estate Section, and any plans for any of the same are subject to written approval of the City's Real Estate Section. In all cases, the Lessee is responsible for following all applicable ordinances, codes, statutes, and laws, and obtaining all permits required for any construction activity.
8. The City shall have no responsibility or liability for any maintenance of the Leased Premises or improvements in the Leased Premises, and the City shall have no responsibility or liability for any damage to the Leased Premises, improvements, facilities or contents, caused by acts of God, and the Lessee shall hold the City harmless therefrom.
9. The Lessee shall be responsible for the cost of and contracting for the demolition of all improvements located upon the Leased Premises upon the expiration or termination of the lease.
10. The Lessee shall be required to carry commercial general liability insurance including contractual liability with no less than the following limits of liability, as may be adjusted, from time to time, by the City's Risk Manager: bodily injury, death and property damage of $1,000,000 per occurrence. In the event the Lessee's per occurrence limit has an annual aggregate, the annual aggregate will not be less than $2,000,000. The policy or policies shall name the City as an additional insured.
11. The Lessee shall be liable to and shall indemnify, defend and hold harmless the City, and its officers, officials, agents, and employees, against all loss or expense (including liability costs and attorney's fees) by reason of any claim or suit, or of liability imposed by law upon the City or its officials, officers, agents or employees for damages because of bodily injury, including death at any time resulting therefrom, sustained by any person or persons or on account of damages to property, including loss of use thereof, arising from, in connection with, caused by or resulting from the acts or omissions of the Lessee and/or its officials, officers, agents, employees, assigns, guests, invitees, sublessees or subcontractors, in the performance of the lease, whether caused by or contributed to by the negligent acts of the City, its officers, officials, agents, and employees.
12. The Lessee shall represent and warrant that its use of the Leased Premises will not generate any hazardous substance, and it will not store or dispose on the Leased Premises nor transport to or over the Leased Premises any hazardous substance in violation of any applicable federal, state or local law, regulation or rule. The Lessee shall further agree to hold the City harmless from and indemnify the City against any release of such hazardous substance and any damage, loss, or expense or liability resulting from such release including all attorneys' fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or intentional acts of the City, its employees or agents. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic radioactive substance, or other similar term by any federal, state or local environmental law, regulation or rule presently in effect or promulgated in the future, as such laws, regulations or rules may be amended from time to time; and it shall be interpreted to include, but not be limited to, any substance which after release into the environment will or may reasonably be anticipated to cause sickness, death or disease or damage to or loss of use of real or personal property.
13. The Lessee shall allow the City and its agents and employees to use the rooftop and air space above the Lessee's Building for the purpose of inspecting or making repairs or alterations to the north wall of the Lake Street Parking Ramp. The Lessee shall provide the City with a key to the existing ladder cover on the Lessee's Building. Access to the rooftop and air space above the Lessee's Building shall be at no cost to the City. The City shall be responsible for any damage to the rooftop of the Lessee's Building resulting from the City's use thereof.
14. The City shall have the right to terminate the lease upon 30 days written notice in the event of the Lessee's default or upon 180 days written notice in the event the Leased Premises are desired for any public use or purpose.
15. The Lessee shall have the right, at its sole option, to terminate the lease upon 180 days written notice.
16. Upon the expiration or termination of the lease, the Lessee, at the Lessee's cost, shall demolish and remove from the Leased Premises all improvements located thereon. The Lessee shall repair any resulting damage to the north wall of the Lake Street Parking Ramp and shall restore the north wall to its original condition. In addition, the Lessee shall install on the Leased Premises a concrete slab at grade level. Demolition, removal and restoration shall be accomplished within sixty (60) days of expiration or termination of the lease, except as may be adjusted by the City to allow for winter conditions.