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2010R20-Schertz Chamber Lease/Operating AgreementRESOLUTION NO. 10-R-20 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AN OPERATING AGREEMENT AND A COMMERCIAL LEASE AGREEMENT WITH THE SCHERTZ CHAMBER OF COMMERCE, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City staff of the City of Schertz (the "City") has recommended that the City enter into an agreement concerning basic operations (the "Operating Agreement") and a Commercial Lease Agreement for the Kramer House with the Schertz Chamber of Commerce; and WHEREAS, the City Council has determined that it is in the best interest of the City to contract with the Schertz Chamber of Commerce pursuant to the Operating Agreement and the Commercial Lease Agreement attached hereto as Exhibit A (together, the "Agreements"); and WHEREAS, the Schertz Chamber of Commerce has approved the Agreements. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the Agreements with the Schertz Chamber of Commerce in substantially the forms set forth on Exhibit A. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Resol 10-R-20.doc Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 27th day of April, 2010. CITY OF SC ERTZ ERAS ~~~~ Mayor ATTEST: ~ G~ ~i y Secretary (CITY SEAL) Resol 10-R-20.doc EXHIBIT A OPERATING AGREEMENT AND COMMERCIAL LEASE AGREEMENT Resol 10-R-20.doc A-1 AGREEMENT This Agreement made and entered into as of this 1st day of October, 2009 (this "Agreement") is between the City of Schertz, Texas, a political subdivision of the State of Texas (the "City"), and the Schertz Chamber of Commerce, a Texas non-profit corporation (the "Chamber"). RECITALS WHEREAS, future economic growth and development within the City are key goals of both the City and the Chamber; WHEREAS, the City previously devoted a significant amount of City staff time to events and programs promoting economic development and the positive image of the City; WHEREAS, the Chamber has taken responsibility for such events and has removed this burden from City staff; WHEREAS, in order to effectively coordinate such events and programs in the near future, the Chamber needs continual fmancial support from the City; WHEREAS, the Chamber anticipates that such funding will only be necessary for approximately five (5) years, providing sufficient time for the Chamber to grow and increase its sources of outside funds; and WHEREAS, the City and the Chamber desire to enter into an arrangement to best utilize available resources to promote the City. AGREEMENT For and in consideration of the mutual promises, covenants, benefits, and obligations hereafter set forth, the City and the Chamber hereby agree and contract as follows: ARTICLE I RESPONSIBILITIES OF THE CHAMBER 1.01 Functions and Projects. The Chamber will exclusively coordinate certain economic development and community development functions previously staffed and presented by the City, including, but not limited to, operating the visitor's center. The Chamber will partner with the City to accomplish certain other projects, including, but not limited to, Relocation Packets, a City Business Directory, a City Visitors' Guide, aCity/area map, and a Chamber Coin. 1.02 Visitor's Center. Pursuant to a separate Commercial Lease Agreement effective October 1, 2009, the Chamber will operate the Kramer House as a Visitors' Center for the City. This Visitors' Center will be used to promote and enhance tourism and business development in the City. soa9~sois 1.03 Request for Financial Support. The Chamber will, at the beginning of the City's annual budgeting process for the fiscal year beginning October 1, 2010, provide the City a proposed budget, detailing the anticipated costs for that fiscal year and breaking out the amount and purposes of funding requested from the City. The Chamber will provide such request annually to a representative designated by the City Manager (the "City Representative"), until the expiration of this Agreement. 1.04 Reports to Citv Council. The Chamber will provide a written report to the City Council on the date this Agreement is first executed and thereafter quarterly during the term of this Agreement, commencing July 1, 2010. This report will detail the actions of the Chamber to date, as well as detail all City funds expended. ARTICLE II RESPONSIBILITIES OF THE CITY 2.01 City Re rp esentative. The City Manager will designate an employee of the City to act as the City Representative. The City Representative will act as liaison between the City and the Chamber in all matters relating to this Agreement. The City Representative will be responsible for recommending approval, denial, or modification of the annual budget request of the Chamber and approving, denying, or modifying the budget and staffing arrangements for particular activities covered by this Agreement. 2.02 City Functions. The City will partner with the Chamber to accomplish certain projects, including, but not limited to, Relocation Packets, a City Business Directory, a City Visitors' Guide, aCity/area map, and a Chamber Coin. 2.03 Financial Support. The City will provide funding to the Chamber for the remainder of fiscal year 2010 as described on Exhibit A. Future funding shall be determined in the course of the City's annual budgeting process, as described in Section 1.03. Funding by the City shall be made from legally available City funds. ARTICLE III GENERAL AND MISCELLANEOUS PROVISIONS 3.01 Term. The initial term of this Agreement shall be through September 30, 2010. This Agreement shall be extended thereafter for successive one (1) year periods unless either party notifies the other in writing not later than thirty (30) days prior to the end of the then current term of this Agreement that it does not want to extend the term hereof. This Agreement, and the parties' obligations hereunder, shall terminate at the end of the then-current term if either party gives such notice. This Agreement may be modified by the City and Chamber to address agreed projects for the ensuing fiscal year. In any case, this Agreement shall terminate on September 30, 2010. 3.02 Regulatory Requirements. This Agreement and the obligations of the parties hereunder are subject to all rules, regulations, and laws that may be applicable by the United States, the State of Texas, or any regulatory agency having jurisdiction as to the matter in question. 50297801.3 2 3.03 Implied Waiver. The failure of either parry hereto to insist, in any one or more instances, upon performance of any the terms, covenants, or conditions of this Agreement shall not be construed as a waiver or relinquishment of the future performance of any such term, covenant or condition by the other party hereto, but the obligation of such ogler parry with respect to such future performance shall continue in full force and effect. 3.04 Abprovals or Consents. Whenever this Agreement requires or permits approvals or consents to be hereafter given by any party hereto, such parties agree that such approval or consent shall not be unreasonably withheld. Such approval or consent shall be given in writing and shall be effective without regazd to whether given before the time required herein. 3.05 Addresses and Notices. Unless otherwise provided in this Agreement, any notice, communication, request, replay or advice (herein severally and collectively for convenience called "notice") herein provided or permitted to be given, made or accepted by either party to the other must be in writing and may be given or be served by depositing the same in the United States Mail, postpaid and registered or certified and addressed to the parry to be notified, with return receipt requested, or by delivering the same to an officer of such part, or by prepaid telegram or facsimile, when appropriate, addressed to the part), to be notified. Notice deposited in the mail in the manner herein above described shall conclusively deemed to be effective, unless otherwise stated in this Agreement, from and after the expiration of three (3) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the addresses of the parties shall, until change as hereinafter provided, be as shown below. The parties shall have their right to specify as its address any other address in the State of Texas by at least fifteen (15) days written notice to the other parry. If to the City to: City of Schertz, Texas 1400 Schertz Pazkway Schertz, Texas 78154 Attention: City Manager If to the Chamber to: Schertz Chamber of Commerce 1730 Schertz Pazkway P.O. Box 564 Schertz, TX 78154 Attention: President or Chair of the Boazd 3.06 Severability. The provisions of this Agreement are severable, and if any word, phrase, clause, sentence, paragraph, section or other part of this Agreement or the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and the application of such word, phrase, clause, sentence, paragraph, section or other part of this Agreement to the other persons or circumstances shall not be affected thereby. 3.07 Sole. Agreements. This Agreement and the Commercial Lease Agreement relating to the Kramer House constitute the entire agreement between the parties relative to the subject matter hereof. There have been and are no agreements, covenants, representations, or 50297801.3 3 warranties between the parties as to the subject matter hereof other than those expressly stated or provided for herein. 3.08 Cooperation. Each parry hereby agrees that it will take all actions and execute all documents necessary to fully carry out the purposes and intent of this Agreement. 50297801.3 4' IN WITNESS WHEREOF, the parties have executed the Agreement in multiple copies, each of which shall be deemed an original as of the date and year first written above. CITY OF SCHERTZ By: Don Taylor City Manager Chair of the Board 50297801.3 S-1 Exhibit A Requested Funding for October 1, 2009 through September 30, 2010 Description Rent Civic Center RentaUMonthly Meeting Salary Administrative Assistant at $12/hour for 2080 Hours Payroll Tax Administrative Assistant Presidential Salary Support Directory Support Maps TOTAL Amount $7,800 $3,000 $27,360 $1,909 $5,000 $12,000 $1,159 $58,228 5029780].3 A-1 COMIVVI[ERCTAi, LEASE AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which aze hereby acknowledged and confessed, the Landlord named below leases to the Tenant named below, and Tenant leases from Landlord, the Premises described below pursuant to the terms of this Commercial Lease Agreement (this "Lease") entered into effective as of the Effective Date specified below. A. Basic terms of the Lease- 1. Effective Date: October 1, 2009 2. Landlord: CITY OF SCHERTZ, TEXAS 3. Landlord's Contact Information: 1400 Schertz Parkway Schertz ,Texas 78154 Attention: City Manager Phone: (210) 619-1020 Facsimile: (210) 619-1050 Email: detaylor@schertz.com 4. Tenant: SCHERTZ CHAlViBER OF COMI~~RCE 5. Tenant's Contact Information: 1730 Schertz Pazkway Schertz, Texas 78154 Attention: President/Chair of the Board Phone: (210) 566-9000 Facsimile: (210) -- Email: President@schertzchamber.org 6. Premises: The Kramer House -located at 1730 Schertz Parkway, and more particulazly described on Exhibit A 7. Base Rent: Six Hundred Fifty Dollazs and No/100 ($650.00) per month payable in quarterly installments for the Kramer House 8. Commencement Date: October 1, 2009 9. Termination Date: September 30, 2014, as may be extended pursuant to Section H(26) of this Lease or by written agreement of the Landlord and Tenant 10. Security Deposit: $0.00 50297783.3 1 11. Use: Business headquarters and Visitors' Center 12. Insurance: Amount of liability insurance to be maintained by Tenant: Death/bodily injury: One Million and No/100 Dollars ($1,000,000.00) Property: Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) B. Definitions- 1. "Rent" means Base Rent, plus any other amounts of money due Landlord by Tenant under the terms of this Lease. 2. "Essential Services" means utility connections reasonably necessary for occupancy of the Premises for the Use. C. Tenant agrees to- 1. Lease the Premises for the entire term of this Lease beginning on the Commencement Date and ending on the Termination Date. 2. Accept the Premises in their present condition "AS IS". 3. Pay quarterly, in advance, on the first day of each January, April, July, and October, the Base Rent to Landlord at Landlord's address; provided, the Base Rent due on October 1, 2009 and January 1, 2010 has been paid, and the Base Rent due on April 1, 2010, totaling $1,950.00, shall be due and payable on the date that this Lease is signed by Landlord and Tenant. The next quarterly payment of Base Rent shall be due and payable on July 1, 2010. 4. Pay, as Additional Rent, all other amounts due under this Lease, when due and payable. 5. Pay a late charge of five percent (5%) of any Rent not received by Landlord by the tenth day after it is due, and, so long as Rent is paid within this timeframe, such payment shall not be a default under this Lease. 6. Allow Landlord to enter the Premises to perform Landlord's obligations, inspect the Premises, and show the Premises to prospective purchasers or tenants, at reasonable times and upon reasonable notice. 7. Repair, replace, and maintain any part of the Premises that Landlord is not obligated to repair, replace, or maintain, normal wear excepted. 8. Repair any damage to the Premises caused by Tenant. 50297783.3 2 9. Submit in writing to Landlord any request for repairs, replacement, and maintenance that are the obligations of Landlord. 10. Maintain public liability insurance for the Premises and the conduct of Tenant's business, naming Landlord as an additional insured, in the amounts stated in Section A(12) of this Lease. 11. Deliver certificates of insurance to Landlord when requested. 12. Indemnify, defend, and hold Landlord harmless from any loss, attorney's fees, court and other costs, or claims arising out of Tenant's use of the Premises, except to the extent caused by Landlord or Landlord's agents, employees, invitees, licensees, or visitors. 13. Vacate the Premises on termination of this Lease. 14. Within fifteen (15) business days after Landlord's written request, execute an estoppel certificate that states the Commencement Date and Termination Date of this Lease, identifies any amendments to this Lease, describes any rights to extend the Term or purchase rights, lists defaults by Landlord, and provides any other information reasonably requested by Landlord. D. Tenant agrees not to- 1. Use the Premises for any purpose other than stated in this Lease. 2. Create a nuisance or commit waste on the Premises. 3. Use the Premises in any way that is extrahazardous and would increase Landlord's insurance premiums. 4. Alter the Premises, except for painting, flooring, and maintenance-related alterations, without Landlord's consent. 5. Allow a lien to be placed on the Premises. 6. Use the roof on the Premises, except for locating the HVAC serving the Premises in the same or similar manner as it is currently located. E. Landlord agrees to- t. Lease to Tenant the Premises for the entire term beginning on the Commencement Date and ending on the Termination Date. 2. Provide the following services to Tenant: landscaping maintenance, utilities, routine facility maintenance, janitorial service, telephone, and Internet. 50297783.3 3 F. Landlord agrees not to- Interfere with Tenant's possession of the Premises as long as Tenant is not in default, and further provided that Tenant is not in default, Tenant shall have the peaceful, quiet, and undisturbed use and possession of the Premises and all rights and privileges pertaining thereto, subject to the terms, conditions, and provisions of this Lease. G. Assignment This Lease is not assignable and is non-transferable by Tenant. H. Landlord and Tenant agree to the following- 1. Alterations. Any physical additions or improvements to the Premises made by Tenant will become the property of the Landlord. 2. Release of Claims/Subrogation. Landlord and Tenant release each other from any claim, by subrogation or otherwise, for any damage to the Premises by reason of fire or the elements, regardless of cause, including negligence of Landlord or Tenant. This release applies only to the extent that it is permitted by law, the damage is covered by insurance proceeds, and the release does not adversely affect any insurance coverage. 3. Notice to Insurance Companies. Landlord and Tenant will notify the issuing insurance companies of the release set forth in the preceding paragraph and will have the insurance policies endorsed, if necessary, to prevent invalidation of the insurance coverage. 4. Casualty/Total or Partial Destruction. a. If the Premises are damaged by casualty and Landlord elects to restore the Premises, Landlord will, at its expense, restore the Premises to substantially the same condition that existed before the casualty. If Landlord chooses to restore, Landlord will notify Tenant in writing of the estimated time to restore and give Tenant an option to terminate this Lease by notifying Landlord within ten (10) business days. If Tenant does not terminate this Lease, the Lease will continue and Landlord will restore the Premises. If Landlord fails to complete restoration within ninety (90) days from the date of written notification by Landlord to Tenant of Landlord's election to repair the casualty, Tenant may terminate this Lease by written notice to Landlord. b. If Landlord elects not to restore the Premises, this Lease will terminate. 5. CondemnationlSubstantial or Partial Taking. a. If the Premises cannot be used for the purposes contemplated by this Lease because of condemnation or purchase or deed in lieu of condemnation, this Lease will terminate. 50297783.3 4 b. Whether or not any portion of the Premises is taken by condemnation or purchase or deed in lieu of condemnation, Tenant may elect to terminate this Lease if fifty percent (50%) or more of the Premises is taken. a. If there is a condemnation or purchase in lieu of condemnation and this Lease is not terminated, the Rent payable during the unexpired portion of the Term will be adjusted as may be fair and reasonable. d. Tenant will have no claim to the condemnation award or proceeds in lieu of condemnation; however, Tenant may, to the extent permitted by applicable law, pursue a separate claim against the condemning authority or against the parry taking by purchase or deed in lieu of condemnation for Tenant's moving expenses, inconvenience, business interruption, depreciation, loss of leasehold estate, and/or similar loss in a proceeding independent of Landlord's condemnation suit. 6. Default by LanddordlEvents. Defaults by Landlord are failing to comply with any provision of this Lease within ten (10) days after written notice and failing to provide Essential Services to Tenant within three (3) days after written notice. 7. Default by Landlord/Tenant's Remedies. Tenant's remedies for Landlord's default are to sue for damages and/or equitable relief and, if Landlord does not provide an Essential Service for thirty (30) days after written notice of default, Tenant may terminate this Lease and be released from any further obligations hereunder. 8. Default by Tenant/Events. Defaults by Tenant are (a) failing to pay timely Rent, (b) abandoning or vacating a substantial portion of the Premises, or (c) failing to comply within ten (10) days after written notice with any provision of this Lease other than the defaults set forth in (a) and (b) above. 9. Default by Tenant/Landlord's Remedies. Landlord's remedies for Tenant's default are limited to the following: (a) enter and take possession of the Premises, after which Landlord may relet the Premises on behalf of Tenant and receive the Rent directly by reason of the releasing, at such time Tenant shall not have any further obligations under this Lease; (b) enter the Premises and perform Tenant's obligations, resulting in Tenant being liable to Landlord for the cost incurred by Landlord to perform Tenant's obligations; and (c) terminate this Lease by written notice to Tenant, thus releasing Tenant from any further obligations under this Lease. 10. Default/Waiver/Mitigation. It is not a waiver of default if the nondefaulting party fails to declare immediately a default or delays in taking any action. Pursuit of any remedies set forth in this Lease does not preclude pursuit of other remedies in this Lease. Landlord and Tenant have a duty to mitigate damages. 11. Holdover. If Tenant does not vacate the Premises following termination of this Lease, Tenant will become a tenant from month-to-month at a Base Rent of $1,000 per month and either party may terminate this Lease upon thirty (30) days written notice to the other parry. 50297783.3 12. Alternative Dispute Resolution. Landlord and Tenant agree to mediate in good faith before filing a suit for damages. 13. Attorneys' Fees. If either party retains an attorney to enforce this Lease, the party prevailing in litigation is entitled to recover reasonable attorneys' fees and court and other costs. 14. Venue and Applicable Law. Venue is in Guadalupe County, Texas, and this Lease shall be construed and interpreted in accordance with the laws of the State of Texas. 15. Exhibits. The exhibits are incorporated herein as matters of contract as if set forth fully herein. 16. Entire Agreement. This Lease is the entire agreement of the parties as to the subject matter hereof, and there are no oral representations, warranties, agreements, or promises pertaining to this Lease not incorporated in writing in this Lease. 17. Amendment of Lease. This Lease may be amended only by an instrument in writing signed by Landlord and Tenant. 18. Limitation of Warranties. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES THAT EXTEND BEYOND THOSE EXPRESSLY STATED IN THIS LEASE. 19. Notices. Any notice required or permitted under this Lease must be in writing. Any notice required by this Lease will be deemed to be delivered (whether actually received or not) when deposited with the United States Postal Service, postage prepaid, certified mail, return receipt requested, and addressed to the intended recipient at the address(es) shown in this Lease, which addresses may be changed from time to time. Notice may also be given by regular mail, personal delivery, courier delivery, facsimile transmission, or other commercially reasonable means and will be effective when actually received. Any address for notice may be changed by written notice delivered as provided herein. 20. Abandoned Property. Landlord may retain, destroy, or dispose of any property of Tenant or other person left on the Premises at the end of the term of this Lease, including any renewals hereof. 21. Title. Landlord hereby represents and warrants that (i) it has good and indefeasible fee simple title to the Premises, (ii) it has the full right and authority to make this Lease, and (iii) the Premises are free and clear of all contracts, agreements, encumbrances, or defects in title of any nature whatsoever, other than the matters created by or with the consent of Tenant, that would restrict or prevent the use or enjoyment by Tenant of the Premises or the rights or privileges granted under this Lease. 22. Headings. The descriptive headings of the paragraphs contained in this Lease are inserted for convenience only and shall not control, affect, limit, expand, or modify the meaning or construction of any of the provisions hereof. 50297783.3 6 23. Counterpaf-ts. The Lease may be executed in multiple counterparts, and such counterparts, when taken together, shall have the full force and effect of an original, fully executed instrument. 24. Invalidity. If one or more of the provisions hereof shall for any reason be held to be invalid, illegal, or unenforceable in any respect under applicable law, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and this Lease shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 25. Binding Effect. This Lease shall apply to and be binding on the heirs, successors, executors, administrators, and assigns of the Landlord and Tenant. 26. Extensions. Tenant shall have the option to extend this Lease, under the terms herein, upon written notice to Landlord given at least forty-five (45) days prior to the then applicable Termination Date, for one or more additional terms. Each additional term shall be twelve (12) months in duration. In no event shall the term of this Lease exceed five (5) years without the express written consent of the Landlord. [Signatures on the Following Page J 50297783.3 7 This Commercial Lease Agreement is executed to be effective as of the Effective Date. LANDLORD: CITY OF SCHERTZ, TEXAS, a Texas home-rule municipality /~ By: DON E. TAYLO City Manager TENANT: CHAMBER OF COMMERCE By Chair of the Board 50297783.3 S-1 FXRTRTT uA" Leal Description of the Property ~ To be attached J 502977A3.3 Exhibit "!~"