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HomeMy WebLinkAboutMO # 1643MUNICIPAL ORDER NO. 1643 A MUNICIPAL ORDER AUTHORIZING THE MAYOR TO EXECUTE AN AMENDED REAL ESTATE LEASE BETWEEN THE MARKET HOUSE THEATRE AND THE CITY OF PADUCAH FOR LEASE OF THE SOUTHERN END OF THE MARKET HOUSE BUILDING BE IT ORDERED BY THE CITY OF PADUCAH, KENTUCKY: SECTION 1. That the Mayor is hereby authorized to execute an Amended Real Estate Lease between the Market House Theatre and the City of Paducah, Kentucky. This agreement is for leasing the southern end of the Market House Building located at 141 Kentucky Avenue. SECTION 2. The term of the aforesaid lease authorized in Section 1 above shall commence on February 1, 2012, and expires January 31, 2032. The lease shall automatically renew for additional periods of two (2) years per renewal term, unless either party gives written notice of termination no later than 90 days prior to the end of the term or renewal term. The lease provisions during any such renewal term shall be the same as those contained in the attached amended real estate lease. SECTION 3. This Order shall be in full force and effect from and after the date of its adoption. ATTEST: J&rno��sa&-Ojc-- Tammara S. Brock, City Clerk Adopted by the Board of Commissioners, January 10, 2012 Recorded by Tammara S. Brock, City Clerk, January 10, 2012 \mo\Lease amended — Market House Theatre 2012 AMENDED REAL ESTATE LEASE Market House Theatre portion of Market House Building WHEREAS, the City of Paducah owns the Historic Market House Building and desires to support the Arts in Paducah by making space in it available to the Market House Theatre, and WHEREAS, In April, 2005, the City of Paducah extended the Lease Agreement with the Market House Theatre for space in the Market House building. Although that lease does not expire until April 1, 2015, the Market House Theatre is requesting an extension of the Lease at this time so that the theatre can incorporate the space into the strategic planning and decision-making process that it is currently conducting. NOW, THEREFORE, this Lease Agreement (this "Lease") is dated February 1, 2012, by and between City of Paducah ("Landlord"), and Market House Theatre ("Tenant"), and the parties agree as follows: PREMISES. Landlord, in consideration of the lease payments provided in this Lease, leases to Tenant the Southern end of the Market House Building (the "Premises") located at 141 Kentucky Avenue, Paducah, KY 42001. The Market House Building is situated on Second Street and between Broadway and Kentucky Avenue in Paducah, Kentucky. The Southern end of the building begins at the entrance facing Kentucky Avenue and includes 185 linear feet of the length of the building measuring along Second Street. LEGAL DESCRIPTION. A sketch of the Premises subject to this Lease is attached as Exhibit "A". TERM. The lease term will begin on February 1, 2012, and will terminate on January 31, 2032, unless sooner terminated as provided herein. Either party may terminate the Lease prior to the end of the lease term by giving the other party written notice specifying the early termination date, which early termination date shall be at least two (2) years from the date that said notice is delivered to the other party. LEASE PAYMENTS. Tenant shall pay to Landlord lease payments of $1.00, payable in advance, on the first day of each year, for a total lease payment of $20 over the term of the Lease. Lease payments shall be made to the Landlord at Paducah City Hall, 300 South 5t' Street, Paducah, KY 42002-2267. POSSESSSION. Tenant shall be entitled to possession on the first day of the term of this Lease, and shall yield possession to Landlord on the last day of the term of this Lease, unless otherwise agreed by both parties in writing. At the expiration of the term, Tenant shall remove its goods and effects and peaceably yield up the Premises to Landlord in as good a condition as when delivered to Tenant, ordinary wear and tear excepted. USE OF PREMISES. Tenant may use the Premises only for productions, operations, and community services of a non-profit community theatre. The Premises may be used for any other purpose only with the prior written consent of Landlord, which shall not be unreasonably withheld. Tenant shall notify Landlord of any anticipated extended absence from the Premises not later than the first day of the extended absence. STORAGE. Tenant shall be entitled to store items of personal property in the building during the term of this Lease. Landlord shall not be liable for loss of, or damage, to such stored items. PROPERTY INSURANCE. Landlord and Tenant shall each maintain appropriate insurance for their respective interests in the Premises and property located on the Premises. Landlord shall be named as an additional insured in such policies. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies. Tenant shall also maintain any other insurance that Landlord may reasonably require for the protection of Landlord's interest in the Premises. Tenant is responsible for maintaining casualty insurance on its own property. LIABILITY INSURANCE. Tenant shall maintain commercial general liability insurance on the Premises and business conducted thereon with a limit of at least $1,000,000 per occurrence and $2,000,000 in the aggregate. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies. WORKERS' COMPENSATION INSURANCE. Tenant shall throughout the Term and any Renewal Terms of this Lease maintain Worker's compensation insurance to the extent required by law and to the extent necessary to protect Landlord and the Premises against worker's compensation claims. RENEWAL TERMS. This Lease shall automatically renew for additional periods of two (2) years per renewal term, unless either party gives written notice of termination no later than 90 days prior to the end of the term or renewal term. The lease provisions during any such renewal term shall be the same as those contained in this Lease. MAINTENANCE. Landlord is responsible for maintenance and repair of the roof, sidewalks, structural parts of the building, and all outward facing elements of the Premises (including outside walls, overhangs, doors, windows, gutters and architectural ornament features). Landlord is responsible for Major Repairs to the heating and air conditioning system, electrical system and plumbing. Major Repairs are defined as repairs or replacements of the heating and air conditioning system, electrical system and/or plumbing the cumulative cost of which in a given year of this lease (running from February 1 through January 31) exceeds $7,500. Any dispute regarding a Major Repair which cannot be resolved by the administrative staff of the Landlord and the Tenant will be decided unilaterally by the Paducah City Commission. Tenant is responsible for all other items of maintenance. Subject to Landlord's - maintenance and repair obligations set forth in the preceding paragraph,- Tenant shall keep the Premises in good condition and repair, including, but not by way of limitation, wall and floor coverings, electric lights, light fixtures, all interior doors and windows, interior paint and inside maintenance. Tenant shall also be responsible for maintaining the heating and air conditioning system, electrical system and plumbing in good condition and repair up to an annual cumulative cost of $7,500. Landlord shall not be obligated to make any repairs to the roof, outside walls, heating and air conditioning system, electrical system, or plumbing or the structural components thereof when such repairs are necessitated by the fault, act or negligence of the Tenant, or any of its servants, employees, agents, invitees, or customers. Within 45 days after the beginning of the Lease term, Landlord and Tenant will cooperatively develop a comprehensive list of items presently requiring repair or maintenance by Landlord and will jointly establish a prioritized list for completion on a feasible timeline. Landlord and Tenant will thereafter update the maintenance/repair list on at least a biennial basis. Beginning with Landlord's Fiscal Year 2013 Budget, Landlord will incorporate the maintenance/repair list in to it's comprehensive facilities maintenance schedule and will, subject to budgetary authorization, annually allocate an amount of money sufficient to conduct a reasonable program of repair and maintenance in recognition of Landlord's obligations under this Lease. UTILITIES AND SERVICES. Tenant shall be responsible for all utilities and services incurred in connection with the Premises. TAXES. Tenant shall pay all taxes and fees attributable to the Premises, the use of the Premises, or the operation of its business in the City. DESTRUCTION OR CONDEMNATION OF PREMISES. If the Premises are partially destroyed by fire or other casualty to an extent that prevents the conducting of Tenant's use of the Premises in a normal manner, and if the cost of repair is less than $300,000, Landlord shall repair the Premises. However, if the cost of repair is $300,000 or more, or if Landlord is prevented from repairing the damage by forces beyond Landlord's control, or if the property is condemned, Landlord may terminate the Lease upon twenty days' written notice of such event or condition. Tenant shall give Landlord immediate notice of any damage to the Premises. DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound. Subject to any governing provisions of law to the contrary, if Tenant fails to cure any obligation within 30 days after written notice of such default is provided by Landlord to Tenant, Landlord may take possession of the Premises without further notice (to the extent permitted by law), and without prejudicing Landlord's rights to damages. In the alternative, Landlord may elect to cure any default and the cost of such action shall be added to Tenant's financial obligations under this Lease. Tenant shall pay all costs, damages, and expenses (including reasonable attorney fees and expenses) suffered by Landlord by reason of Tenant's defaults. All sums of money or charges required to be paid by Tenant under this Lease shall be additional rent, whether or not such sums or charges are designated as "additional rent". The rights provided by this paragraph are cumulative in nature and are in addition to any other rights afforded by law. CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative, and shall not be construed as exclusive unless otherwise required by law. REMODELING OR STRUCTURAL IMPROVEMENTS. Tenant shall have the obligation to conduct any construction or remodeling (at Tenant's expense) that may be required to use the Premises as specified above. Tenant may also construct such fixtures on the Premises (at Tenant's expense) that approximately facilitate its use for such purposes. Such construction shall be undertaken and such fixtures may be erected only with the prior written consent of the Landlord, which shall not be unreasonably withheld. Tenant is responsible for preparing construction plans and obtaining required building and electrical and plumbing permits from the city or state Inspection office. Tenant shall not install awnings or signage on any part of the exterior of the Premises without Landlord's prior written consent. ACCESS BY LANDLORD TO PREMISES. Subject to Tenant's consent (which shall not be unreasonably withheld), Landlord shall have the right to enter the Premises to make inspections, provide necessary services, or show the unit to prospective buyers, tenants or workers. However, Landlord does not assume any liability for the care or supervision of the Premises. As provided by law, in the case of an emergency, Landlord may enter the Premises without Tenant's consent. INDEMNITY REGARDING USE OF PREMISES. To the extent permitted by law, Tenant agrees to indemnify, hold harmless, and defend Landlord from and against any and all losses, claims, liabilities, and expenses, including reasonable attorney fees, if any, arising from claims made by persons or entities not parties to this Lease, which Landlord may suffer or incur in connection with Tenant's possession, use or misuse of the Premises, except for such losses, claims, liabilities, and expenses arising from Landlord's act or negligence. DANGEROUS MATERIALS. Tenant shall not keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might substantially increase the danger of fire on the Premises, or that might be considered hazardous by a responsible insurance company, unless the prior written consent of Landlord is obtained and proof of adequate insurance protection is provided by Tenant to Landlord. �✓ MECHANICS LIENS. Neither the Tenant nor anyone claiming through the Tenant shall have the right to file mechanics liens or any other kind of lien on the Premises and the filing of this Lease constitute notice that such liens are invalid. Further, Tenant agrees to (1) give actual advance notice to any contractors, subcontractors or suppliers of goods, labor, or services that such liens will not be valid, and (2) take whatever additional steps that are necessary in order to keep the premises free of all liens resulting from construction done by or for the Tenant. NOTICE. Notices under this Lease shall not be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed as follows: LANDLORD: City Manager City of Paducah 300 South 5' Street Paducah, KY 42002-2267 TENANT: Executive Director Market House Theatre 132 Market House Square Paducah, KY 42001 Said addresses may be changed from time to time by either party by providing notice as set forth above. Notices mailed in accordance with the above provisions shall be deemed received on the third day after posting. GOVERNING LAW. 'This Lease shall be construed in accordance with the laws of the State of Kentucky. JOINT RIGHT OF REFUSAL. Tenant, along with other tenants who occupy the Market House Building at the inception of this Lease renewal, shall have the first,right of refusal to lease any additional space in the Market House Building (the "Additional Space") that comes available during the term of this Lease. Landlord will give Tenant notice, as well as notice to other qualifying tenants, promptly upon learning that any Additional Space will become available. Such notice will describe the Additional Space and provide the expected date on which it will be available for occupancy. Tenant, and other qualified and interested tenants, will have sixty (60) days after receipt of such notice to express interest in occupying the Additional Space. Should more than one qualifying tenant express interest in occupying such Additional Space, the Landlord will make a determination as to the allocation the Additional Space. In the event that the Market House Theatre comes to occupy any Additional Space during the term of this Lease, the term shall extend for the remainder of this Lease. Except as the parties may otherwise agree in writing at the time, the other terms and conditions for the lease of the Additional Space shall be identical to those in this Lease except that the cumulative annual amount of maintenance and repair costs for the heating and air conditioning system, electrical system, and plumbing for which Tenant shall be responsible will be determined by multiplying $7,500 by a fraction, the numerator of which is the square footage of the Additional Space and the denominator of which is the square footage of the premises. Such Additional Space shall be subject to the provisions contained in the Maintenance provision of this Lease. ENTIRE AGREEMENT/AMENDMENT. This Lease Agreement contains the entire agreement of the parties and there are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Lease. This Lease may be modified or amended in writing, if the writing is signed by the party obligated under the amendment. EARLY TERMINATION BY LANDLORD. In the event that Landlord exercises its right to terminate the Lease prior to January 31, 2032, by giving Tenant at least two (2) years advance written notice of the early termination, Landlord will pay to Tenant an early termination fee to offset Tenant's expenses in transitioning to a new location. The early termination fee shall be an amount determined as the rental payments a landlord of space comparable to the Premises could expect to receive under a one-year, triple net lease that begins as of the date of the early termination of this Lease. SEVERABILITY. If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision, it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. WAIVER. The failure of either party to enforce any provisions of this Lease shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease. BINDING EFFECT. The provisions of this Lease shall be binding upon and insure to the benefit of both parties and their respective legal representatives, successors and assigns. LANDLORD: City of Paducah By: William F. Paxton, Mayor TENANT: Market House Theatre By: Michael Cochran, Executive Director Date: Date: