Hockaday Lease AgreementTHIS AGREEMENT, made and entered into this day of January, 2007 by and
between the City of Kalispell, a municipal corporation hereinafter called CITY, and the
Hockaday Museum of Art, a non-profit corporation, hereinafter called HOCKADAY;
WITNESSETH:
WHEREAS, on the 20th day of June 2001, the parties did enter into an agreement
whereby CITY leased to the HOCKADAY that certain premises known as Hockaday
Museum of Art and owned by the CITY more particularly described as follows:
Lots I and 2 of Block 64, of Kalispell, Montana, according to the map or
plat thereof on file and of record in the office of the County Clerk and
Recorder of Flathead County, Montana.
WHEREAS, such lease of said premises has been found to have been to the mutual benefit
of the parties and to the people of the City of Kalispell and Flathead County, and
WHEREAS, it is the intent of the parties that a similar lease arrangement should be
continued;
WHEREAS, it is the desire of the HOCKADAY to invest in further major renovations to
the premises, to purchase the adjacent lot for the CITY, to construct improvements
thereon to create further space and to do so requires the HOCKADAY, for financing
reasons, to have a long-term leasehold interest in the premises.
NOW, THEREFORE, the CITY does demise, lease and let to the HOCKADAY, and
HOCKADAY does agree to lease and rent from the CITY said premises under the
following terns and conditions:
1. Term: The term of this lease agreement shall be for a period of THIRTY (30) years
commencing the ! a day of 200 7. Pursuant to the Development Agreement
entered into between the part14 this sine date, a new lease agreement, upon the terms set
forth therein, shall be executed upon the completion of the Project described therein.
2. Consideration: The HOCKADAY shall pay to the CITY, as rent, the sum of $1.00 per
year in advance; receipt of the rental for the first year of this term of this lease is hereby
acknowledged by the CITY. Rent for subsequent years of the term of this lease is due
and payable on the annual anniversary date hereof.
3. Insurance- Indemnification: The HOCKADAY shall hold the CITY harmless from
any loss, cost or damage to the contents of the premises that may arise in connection with
this lease or the use of the demised premises by the HOCKADAY, or its agents, or
employees, or any other person using the premises. The HOCKADAY shall insure said
contents against fire damage and other hazard to or loss of said contents for the full term
City of Kalispell/Hockaday Museum Lease Page 1 of 5
of this lease in an amount equal to the full value of said contents as may be housed in the
premises. The City agrees that should said premises be totally or partially destroyed by
hazard during the term of this lease, that any insurance money payable to the CITY as a
result will be utilized to rebuild or repair said building unless the HOCKADAY elects to
terminate the lease after and as a result of such hazard occurrence.
The City Clerk shall be furnished with a certificate reflecting the foregoing hazard
insurance within 30 days of the effective date of this lease; continuing certificates shall be
furnished to reflect the required coverage at all times.
4. Maintenance, Repairs and Utilities: The HOCKADAY intends to do extensive
construction and remodeling to the premises on the existing property as well as to the
adjacent property purchased by the CITY. The CITY has not charged more than nominal
rental for the premises in the belief that such purchase construction and remodeling will
be to the ultimate benefit to the CITY in lieu of a higher rental charge.
The CITY shall provide the HOCKADAY with a minimum annual maintenance
allowance of $6,600.00. HOCKADAY will be responsible for all maintenance, repairs,
upkeep and the security of said building and all utilities used thereon during the entire
term of this lease and shall further be required to and be responsible for maintenance of
lawn and shrubs and removal of ice and snow.
The HOCKADAY represents that it has inspected and examined the demised premises
and accepts them in their present condition, and agrees that the CITY shall not be
required to make any improvements or repairs upon the premises demised or any part of
them. The HOCKADAY agrees to make all improvements and repairs at the
HOCKADAY's sole cost and expense,
The HOCKADAY will not suffer waste, destruction or damage to occur on the premises
nor will the HOCKADAY allow any lien to be filed against the premises without written
permission of the City Manager. The CITY may require the HOCKADAY to furnish
additional security for any such lien allowed against the premises.
5. Nothing contained in this agreement shall prohibit the CITY from making available, to
the HOCKADAY, through the budgetary process such additional sums as the CITY
deems necessary to assist in the purchase or construction of improvements or to perform
maintenance upon the property leased to the HOCKADAY. HOCKADAY shall provide
the CITY with its annual general budget on or before the I" day of May each year and
may request a larger annual maintenance budget if such request is found to be supported
by the City Council. In addition, HOCKADAY shall, upon request of the City Manager,
furnish information covering the operating policies and costs of operation of said
premises.
City of Kalispell/Hockaday Museum Lease Page 2 of 5
6. Use: Said premises is intended for and may be used only for the exhibition and display
of the visual and performing arts, as well as lectures, public and private meetings,
readings, discussion groups, gallery talks and recitals in music, dance, drama and other
related arts and for classes and instruction in the arts and crafts, particularly those
incidental to this area. In addition to the foregoing, the premises may be used for a sales
gallery operated by the HOCKADAY to develop and exhibit local artists and such other
artists as HOCKADAY may wish to include, the proceeds from said gallery to go to the
HOCKADAY.
7. Assi nnability: This lease is not assignable, however, the HOCKADAY may sublet,
with City council approval, on a temporary basis portions of said premises for uses
connected and logically associated with the intended cultural use of the premises.
S. Termination: Failure of the HOCKADAY to perform any or all of the covenants
required by this lease shall be a breach hereof. This lease may, upon such a breach, be
terminated by the CITY on sixty days written notice to the HOCKADAY and the
HOCKADAY's failure to perform said covenant during such notice period, i.e., if the
CITY feels there has been a breach of any obligation it will provide the HOCKADAY
with written notice specifying in detail the alleged breach. If within sixty (60) days of the
date of service of said Notice the HOCKADAY corrects said alleged breach then its
rights under this lease shall be fully reinstated and this lease shall continue the same as if
no default had occurred.
The HOCKADAY may terminate this lease and surrender the premises to the CITY at
any time upon sixty days written notice to the City Clerk. Should the premises be more
than 50% destroyed by fire the HOCKADAY may terminate this lease by written notice
thereof to the CITY and the insurance proceeds thereafter received by the CITY under
paragraph 3 above, need not be used to rebuild the building. If less than 50% of the
building is destroyed, the HOCKADAY will rebuild or repair the premises unless agreed
otherwise by the CITY.
In the event that the HOCKADAY holds over and remains in possession of the demised
premises with the consent of the CITY, that holding over shall be deemed to be from
month to month only, and upon all of the same rents, terms, covenants and conditions as
contained here.
It is agreed that the written notice required under the termination provisions of this
agreement, or any notice required herein, may be served upon the HOCKADAY by either
personal service, or by registered or certified mall directed to the HOCKADAY at the
following address:
Hockaday Museum of Art
302 Second Avenue East
Kalispell, Montana 59901
City of Kalispell/Hockaday Museum Lease Page 3 of 5
Service by mail shall be complete, and the notice period for termination of this Lease
Agreement shall commence to run, on the date said notice is deposited in any U. S. Post
Office.
IN WITNESS WHEREOF, both parties have hereunto set their hands and seals this 1
day of 2007.
CITY OF KALISPELL HOCKADAY MUSE M OF ART
Ja es H. Patric , City Manager
Date: j' z- `67 Date: -' z 7
City of Kalispell/Hockaday Museum Lease Page 4 of 5
STATE OF MONTANA }
) ss.
County of Flathead )
On this to day of _ , 2007, before me, a Notary Public for the State
of Montana, personally appeed F,-d �t� a , in his authorized capacity as
President of the Board of Directors of the HOCKADAY MUSEUM OF ART and proved
to me to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal the day and year hereinabove first written.
SEAL
STATE OF MONTANA )
) ss.
County of Flathead )
NOTARY (PUBLIC for the State of Montana
Residing at: .I
My Commission ex ires: 1 bs/
On this % /day of�wuca2�1= , 2007, before me, a Notary Public for the State
of Montana, personally appe(red Jafxfes H. Patrick, proved to me to be the person whose
name is subscribed to the within instrument, and acknowledged to me that he executed
the same in his authorized capacity as City Manager of the City of Kalispell.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year hereinabove first written.
.44C L _.
NOTARY P I
SEAL Residing at:X
My Commission
for the State of Montana
City of KalispeWHockaday Museum Lease Page 5 of 5
Gabriel said her intent is not to have Dr. Abbott complete his construction; her intent is to know
whether the building as it stands now meets the codes and to require him to fix the fence that he took
down.
Olson argued the building inspector will issue the building permit and tell Dr. Abbott what needs to
be fixed. He said once it's fixed then the building inspector will sign off on it; that's the way it
works. Olson said it's not right if he follows all the rules and then the Council rejects it.
Mayor Kennedy noted that Gabriel is simply trying to get the City's inspectors access to the property
to check out the building and report back to the Council. She said at that time the Council can take a
final vote on whether to sell the easement with the attached conditions.
Atkinson said we know the building doesn't meet code because the garage is built on a monolithic
slab. He said that's not unusual for a free standing garage, but not for a connection with a house.
There was discussion as to what the motion on the floor actually states and Gabriel reiterated the
intent of her amendment was not to muddy the waters, it was simply to get the building inspections
done and to get the fence put back up. She said then the issue can come back to Council.
White suggested the Council back up, reconsider Gabriel's amendment and withdraw it, vote on the
main motion as amended once by Herron, then move forward with a new motion.
Gabriel moved to rescind her amendment. The motion was seconded.
The motion to rescind the amendment carried upon vote with Gabriel, Hafferman, Herron,
Kluesner, Larson, Olson, and Mayor Kennedy voting in favor, and Atkinson and Kenyon
voting against.
The main motion with one amendment failed upon vote with Atkinson, Gabriel, Kenyon,
Larson, and Mayor Kennedy voting in favor, and Hafferman, Herron, Kluesner, and Olson
voting against.
Gabriel moved that City staff be authorized to inspect Dr. Abbott's property and make a
report back to the Council, and Dr. Abbott be directed to reinstall the fence or post a bond to
insure the reinstallation of the fence when weather permits. The motion was seconded.
The motion carried upon vote with Atkinson, Gabriel, Kenyon, Larson, and Mayor Kennedy
voting in favor, and Hafferman, Herron, Kluesner, and Olson voting against.
G/14. HOCKADAY MUSEUM OF ART LEASE (moved from Consent Agenda)
The Hockaday is requesting a long term lease with the City in order to initiate a capital campaign to
expand the existing facility. The new lease would be for a term for 30 years.
Kalispell City Council Minutes
Dec 4, 2006
Page 13
Kenyon moved the Hockaday Museum of Art be granted a 30 year lease. The motion was
seconded.
Patrick gave a staff report and answered questions.
Hafferman stated it is important that the public get behind this because there will have to be a major
fundraiser. He said he was bothered, however, that a development agreement for the purchase of the
adjacent property is not being presented with the lease.
Patrick responded the direction of the Council at the work session was to deal with both issues
separately.
The motion carried unanimously upon vote.
H. MAYOR/COUNCIL/CITY MANAGER'S REPORTS (No Action)
Patrick invited Council to a Legislative Luncheon on Tuesday, December 19 starting at 11:30 a.m. at
the Central School Museum.
I. ADJOURN
The meeting was adjourned at 11:05 p.m.
ATTEST:
Theresa White
City Clerk
Approved December 18, 2006
Kalispell City Council Minutes
Dec 4, 2006
Page 14