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08. Lakers Lease - Kalispell Legion Baseball Association_CITYOFM- City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903 _ Telephone: (406) 758-7701 Fax: (406) 758-7758 MONTANA REPORT TO: Honorable Mayor and City Council FROM: Mike Baker, Director, Parks and Recreation Jane Howington, City Manager SUBJECT: Lakers Lease MEETING DATE: December 5, 2011 BACKGROUND: The original lease between the City of Kalispell and the Kalispell Legion Baseball Association expired on May 1, 2011. At this time, a new 20 year lease commencing on May 1, 2011, has been written, reviewed, and approved by the Kalispell City Manager, City Attorney, Parks and Recreation Director and the Kalispell Legion Baseball Association. The lease is for property owned by the City of Kalispell and commonly known as Griffin Field and Archie Roe Field, including the maintenance building, equipment area, and concession building. The twenty-year (20) term of this Lease shall be divided into four five-year periods. At the end of each subsequent five-year period, the parties shall review the financial situation of the Lakers for the purpose of determining the amount of rent to be paid for the next five-year period. The Lakers • shall maintain the leased premises in as good condition as of the date of this Lease. • shall pay for the cost of water used in the concession stand building, sewage, garbage collection and electrical usage for that portion of the leased premises designated as Griffin Field and Archie Roe Field. • shall purchase and supply to the City fertilizer or other chemicals as requested by the City, not to exceed a total of $1,000. The City • shall perform the following services on the leased premises: a) Mow, irrigate and maintain outfield and infield grass for use as a baseball field. b) Improve, develop and maintain roadways, parking areas, pathways and other areas outside of Griffin Field. c) Maintain, repair, drain and winterize the water system servicing the leased premises. • shall provide electricity, water and sewage utilities to the leased property. RECOMMENDATION: Motion to approve the Lakers Lease and authorize City Manager to execute lease on behalf of the City. FISCAL EFFECTS: The rent for the first five-year period shall be one percent (1%) of the Gross Receipts. The Lakers will receive credit toward rent for documented contributions in labor and/or materials for the maintenance and approved improvements of the leased premises. ALTERNATIVES: As suggested by the City Council. Respectively submitted, 'Mike Baker, Director, Parks and RecresTion Report compiled November 29, 2011 ,Ane Howington City Manager Return to: CITY Clerk P.O. Box 1997 Kalispell, MT 59903-1997 THIS LEASE AGREEMENT is made and entered into this _ day of November, 2011 by and between the CITY OF KALISPELL, a Montana municipal corporation duly authorized under the laws of the state of Montana, of 201 First Avenue East, Kalispell, Montana 59901, (hereinafter referred to as "CITY") and the KALISPELL LEGION BASEBALL ASSOCIATION, a Montana not -for -profit corporation, of 134 First Avenue West, Kalispell, MT 59901 (hereinafter referred to as "LAKERS"). WITNESSETH: The CITY, for and in consideration of the agreements of the LAKERS, hereinafter set forth, hereby leases to the LAKERS, and the LAKERS hereby lease from the CITY, certain real property owned by the CITY, and particularly described as follows, to -wit: Those portions of the property owned by the City of Kalispell and commonly known as Griffin Field and Archie Roe Field including the maintenance and equipment area and building located amidst same, which is located in Begg Park and as shown on the map attached hereto, situated in the SEI/, NE'/ Section 19, Township 28 North, Range 21 West P.M.,M. Flathead County, Montana. TERM OF LEASE: The term of this Lease shall commence on the 1st day of May, 2011 and shall continue for a term of 20 years unless terminated sooner as hereinafter provided. GROSS RECEIPTS: For the purpose of this Lease "gross receipts" shall be all gross receipts obtained by the LAKERS from (1) Lakers Baseball game day ticket sales (Season Pass sales specifically excluded) (2) concession stand sales at Lakers Baseball activities and (3) fees charged by the LAKERS for use of the facilities by others. RENT: The LAKERS shall pay to CITY, as rent, a sum to be determined annually as herein provided, payable in arrears, commencing May 1, 2011 and continuing on the first day of May throughout the term of this Lease. BASEBALL FIELDS LEASE AGREEMENT - Page - 1 The first rental period shall be deemed to be the calendar year 2011, and the amount of rent due shall be one percent (1%)of the Gross Receipts (as defined above), obtained by the LAKERS during that period of time. This period is established to coincide with the LAKERS' fiscal year which terminates on December 31, annually. The parties agree that no rent is due for the calendar year 2010 (otherwise payable May 1, 2011), and further agree that no rent shall be due in any subsequent year of this Lease provided that the LAKERS perform the covenants and conditions as set forth in this Lease, and further provided that the LAKERS contribute as set forth in this Lease, and further provided that the LAKERS contribute in labor and/or materials toward maintenance and improvement of the leased premises a dollar amount equivalent to the annual rental payment set forth hereinabove. For example, if the LAKERS contribution of labor and/or materials in 2011 equals or exceed one percent (I %) of its Gross Receipts in the same year, no rental payment is due and owing on May 1, 2012. The twenty-year (20) term of this Lease shall be divided into four (4) five (5) year periods. The rent for the first five-year period shall be one percent (1) of the Gross Receipts. At the end of the first five year period and at the end of each subsequent five-year period the parties shall review the financial situation of the LAKERS for the purpose of determining the amount of rent to be paid for the next five year period. It is agreed that in no event shall the amount of rent be raised or lowered for any five year period by more than an additional one percent (1%) of annual Gross Receipts, once raised or lowered, that rent shall apply for the next five-year period. Said rent payment shall be mailed or delivered to the CITY at the Office of Treasurer, 201 First Avenue East, Kalispell, MT 59901. LESSEE'S FINANCIAL REPORTS: Annually, on or before the first day of May, in conjunction with the payment of the annual rent, the LAKERS shall present to the CITY for review a copy of the LAKER's annual financial report completed in accordance with generally accepted accounting principles. The LAKER's financial records will be subject to an audit conducted by, and at the option of, the CITY (internal staff or contract auditor). The cost of such audit shall be paid by the CITY. TIME OF ESSENCE AND BINDING EFFECT: It is mutually agreed by and between the parties hereto that the time of payment shall be an essential part of this lease agreement, and that all of the covenants and agreements herein contained shall extend to and be binding upon the parties hereto, and their successors and assigns. FIVE-YEAR REVIEW_ At the end of each five years of this Lease it is hereby agreed that either party may upon written notice given to the other, no later than October 1st of the fifth year, tenth year and fifteenth year, specify in writing that there are matters contained in the Lease (other than the length of term) which because of a sense of urgency or import require discussion and possible renegotiation. It is further agreed that any such discussions and renegotiations shall take place and be concluded within sixty (60) days from the date of the notice. BASEBALL FIELDS LEASE AGREEMENT - Page - 2 MEET AND CONFER_ Notwithstanding any other provisions of this Lease, the CITY and the LAKERS shall meet and discuss goals, objectives, substantial capital improvements, operation and maintenance no later than March 1 of each calendar year and again the following September of each calendar year during the term of this Lease. The CITY and the LAKERS by mutual agreement may adjust the operation, maintenance responsibility or either terms at any time by executing an addendum to this Lease. USE, COMPLIANCE WITH LAWS, SIGNS: The leased premises shall be used by the LAKERS for the purpose of conducting youth baseball and other specific purposes approved by the parties, hereto, which are not detrimental to the leased premises. The LAKERS shall keep the leased premises in a clean and orderly condition and shall conduct its activities thereon in a careful and safe manner without constituting the violation of any ordinance, statute, regulation, or other order of any governmental authority, nor shall LAKERS maintain, permit, or suffer any nuisance to occur or exist on the leased premises. The LAKERS may affix appropriate signs to the property designating its identification and use, as well as commercial signs to the outfield fence and other locations as the LAKERS may deem appropriate as a means of raising funds to support its program, provided that the signs shall be tastefully done and remain in good condition. MAINTENANCE AND REPAIRS: The LAKERS shall maintain the leased premises in as good condition as of the date of this Lease, or as may be put by the CITY or LAKERS during the term hereof, and return the leased premises to the CITY at the expiration of said Lease in said condition, reasonable wear and tear and damage by the elements excepted. The LAKERS shall police and pick up all litter resulting from use of leased area for all activities. The CITY shall perform the following services on the leased premises: a) Mow, irrigate and maintain outfield and infield grass for use as a baseball field. b) Improve, develop and maintain roadways, parking areas, pathways and other areas outside of Griffin Field. c) Maintain, repair, drain and winterize the water system servicing the leased premises. PRIMARY USE: The LAKERS shall have primary use of Griffin and Archie Roe Fields. Other sports or non -sports activities on the leased premises shall be only with the mutual consent of the CITY and LAKERS, provided that the LAKERS alone may consent to use of the fields by other youth baseball organizations. The parties recognize that a substantial amount of money has been expended to improve the leased premises and that the LAKERS may charge a reasonable fee for its use by others, which fee must first be approved by the CITY. All fees collected by the LAKERS charged to patrons of its activities or others for use of the leased premises shall be the exclusive property of the LAKERS. Notwithstanding the provisions of this section, it is expressly understood and agreed that in the event the CITY is successful in attracting a minor league professional baseball team to the Kalispell area, the LAKERS and the CITY shall schedule the use of said Griffin Field in a manner to facilitate both programs and all parties with ownership interest in the facilities shall negotiate an agreement by which the resulting revenue, if any, derived from Minor BASEBALL FIELDS LEASE AGREEMENT - Page - 3 League usage of these facilities shall be shared prior to CITY approval for facility usage by a Minor League Organization. UTILITIES: The CITY shall provide electricity, water and sewage utilities to the leased property. The LAKERS shall pay for the cost of water used in the concession stand building, sewage, garbage collection and electrical usage for that portion of the leased premises designated as Griffin Field and Archie Roe Field. The CITY shall bear the cost of all other water (including irrigation). The CITY shall separately meter water in the concession building. FERTILIZER: The LAKERS shall purchase and supply to the CITY fertilizer or other chemicals as requested by the CITY for development and maintenance of turf areas on Griffin Field first priority and Archie Roe field second priority. The contribution by the LAKERS for these materials shall not exceed One Thousand and No/100 Dollars $1,000.00 in a given calendar year. The CITY agrees that its obligation to develop and maintain turf areas is not limited to the materials purchased by the LAKERS. PERSONAL PROPERTY: The parties agree that personal property furnished by the LAKERS upon Griffin Field shall remain the property of the LAKERS and may be removed upon termination of this Lease. Such personal property shall include but not be limited to baseball equipment, concession equipment, foodstuffs, scoreboards (Excepting mounting beams, foundation, wiring and conduit), public address and acoustic systems, training equipment, tarps, advertising signs, safety equipment and maintenance equipment. INDEMNIFICATION: a. To the fullest extent permitted by law, the LAKERS agree to defend, indemnify, and hold the CITY harmless against claims, demands, suits, damages, losses, and expenses connected therewith that may be asserted or claimed against, recovered from or suffered by the CITY by reason of any injury or loss, including but not limited to, personal injury, including bodily injury or death, property damage, occasioned by, growing out of, or in any way arising or resulting from any intentional or negligent act on the part of the LAKER's agents or employees. Likewise to the fullest extent permitted by law, the CITY agrees to defend, indemnify, and hold the LAKERS harmless against claims, demands, suits, damages, losses, and expenses connected therewith that may be asserted or claimed against, recovered from or suffered by the LAKERS by reason of any injury or loss, including but not limited to, personal injury, including bodily injury or death, property damage, occasioned by, growing out of, or in any way arising or resulting from any intentional or negligent act on the part of the CITY's agents or employees. b. The LAKERS shall maintain those insurances as may be required by CITY as set forth below, and the LAKERS shall provide CITY with proof of such insurance coverage within ten (10) days following execution of this Agreement and at least annually thereafter during the term of the lease. The LAKERS shall notify the CITY thirty (30) days prior to the expiration of any such required insurance coverage and shall ensure such required insurance coverage is timely renewed during the term of this Agreement so that there is no lapse in coverage during this Lease BASEBALL FIELDS LEASE AGREEMENT - Page - 4 Agreement. The LAKERS shall further notify the CITY within two (2) business days of the LAKER's receipt of notice that any required insurance coverage will be terminated or the LAKERS decision to terminate any required insurance coverage for any reason. INSURANCE. The LAKERS shall maintain in full force and effect during the term of this Lease general liability insurance (bodily injury and property damage) in the amount of $750,000 per occurrence and $1,500,000 annual aggregate to protect against liability for damage claims through use of or arising out of injuries occurring in or around the leased premises during times when LAKERS baseball activities are scheduled. The insurance policy must name the CITY as the contract holder or as an additional insured and be written on a "primary —noncontributory basis." The coverage shall be obtained from an insurance company that is duly licensed and authorized to transact insurance business and write insurance within the state of Montana, with a minimum of "A.M. Best Rating" of A-, VI, as will protect the LAKERS, the various acts of subcontractors, the CITY and its officers, employees, agents, and representatives from claims for bodily injury and/or property damage which may arise from activities under this Lease. All insurance coverage shall remain in effect throughout the life of this Lease. All insurance policies must contain a provision or endorsement that the coverage afforded will not be canceled, materially changed, or renewal refused until at least forty-five (45) days prior written notice has been given to the LAKERS, the City, and all other additional insured to whom a certificate of insurance has been issued. A copy of the policy will be provided by the LAKERS to the CITY. The CITY agrees that it will maintain during the term of this Lease, fire, other casualty and extended coverage insurance on the physical improvements located on the premises, but its coverage need not include personal property or trade futures on the leased premises not belonging to the CITY. The parties further agree that any third party use of the leased premises shall provide the CITY with satisfactory evidence of insurance coverage at similar levels. DEFAULT, BANKRUPTCY AND TERMINATION. - In the event that: (a) The LAKERS shall default in the payment of any installment of rent or other sum herein specified and such default shall continue for thirty (30) days after written notice thereof; or (b) The LAKERS shall default in the observance or performance of any other of the LAKER's covenants, agreements, or obligations hereunder and such default shall not be corrected within ninety (90) days after written notice thereof; or (c) The LAKERS shall be declared bankrupt or insolvent according to law, or, if any assignment shall be made of LESSEE's property for the benefit of creditors; The CITY shall have the right thereafter, when such default continues, to re-enter and take complete possession of the leased premises, according to law, and to declare the term of this lease ended, and to remove the LAKER's effects, without prejudice. In doing so no additional rent payments may be collected from the LAKERS; however, if the LAKERS shall default, after BASEBALL FIELDS LEASE AGREEMENT - Page - 5 reasonable notice thereof, in observance or performance of any conditions or covenants on the LAKER's part to be observed or performed by virtue of any of the provisions in any article of this lease, the CITY, without being under any obligation to do so and without thereby waiving such default, may remedy such default for the account and at the expense of the LAKERS. NOTICE: No notice from the CITY to the LAKERS relating to the leased premises or the occupancy thereof, shall be deemed duly served unless personally served upon or mailed to the LAKERS, registered or certified mail, return receipt requested, postage prepaid, and addressed to the LAKERS at its address as follows: The Lakers 134 First Avenue West Kalispell, Montana 59901 Any notice from the LAKERS to the CITY relating to the leased premises or the occupancy thereof, shall be deemed duly served, if personally served upon or if mailed to the CITY by registered or certified mail, return receipt requested, postage prepaid, and addressed to the CITY at the address as follows: City Manager City of Kalispell 201 First Avenue East Kalispell, Montana 59901 SURVIVAL: The parties' indemnification obligations shall survive the termination or expiration of this Agreement for the maximum period allowed under applicable law. HEADINGS: The headings used in this Agreement are for convenience only and are not be construed as a part of the Agreement or as a limitation on the scope of the particular paragraphs to which they refer. WAIVER: A waiver by the CITY of any default or breach by the LAKERS of any covenants, term•, or conditions of this Agreement does not limit CITY's right to enforce such covenants, terms, or conditions or to pursue CITY's rights in the event of any subsequent default or breach. SEVERABILITY: If any portion of this Agreement is held to be void or unenforceable, the balance thereof shall continue in effect. APPLICABLE LAW.• The parties agree that this Agreement is governed in all respects by the laws of the State of Montana and the parties expressly agree that venue will be in Flathead County, Montana, and no other venue. BINDING EFFECT: This Agreement is binding upon and inures to the benefit of the heirs, legal representatives, successors, and assigns of the parties. AMENDMENTS: This Agreement may not be modified, amended, or changed in any respect except by a written document signed by all parties. NO THIRD -PARTY BENEFICIARY: This Agreement is for the exclusive benefit of the parties, does not constitute a third -party beneficiary agreement, and may not be relied upon or enforced by a third party. COUNTERPARTS: This Agreement may be executed in counterparts, which together constitute one instrument. ASSIGNMENT: The LAKERS may not assign this Agreement in whole or in part without the prior written consent of the CITY. No assignment will relieve the LAKERS of its responsibility for the performance of the Agreement. AUTHORITY: Each party represents that it has full power and authority to enter into and perform this Agreement and the person signing this Agreement on behalf of each party has been properly authorized and empowered to sign this Agreement. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. ATTEST: City Clerk ATTEST: Secretary Cl111Y'(lT�= I ' r By Tammi Fisher, Mayor KALISPELL LEGION BASEBALL ASSOCIATION By KLBA President BASEBALL FIELDS LEASE AGREEMENT - Page - 7 STATE OF MONTANA ) ):ss County of Flathead ) On this day of November, 2011, before me, the undersigned, a Notary Public for the State of Montana, personally appeared and as President and Secretary of the KALISPELL LEGION BASEBALL ASSOCIATION, a Montana not -for - profit corporation, and acknowledged to me that they each executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year in this certificate first above written. Notary Public, State of Montana Printed Name: Residing at My Commission Expires STATE OF MONTANA ) ):ss Co=inry of Flathead ) On this day of November, 2011, before me, a Notary Public in and for the State of Montana, personally appeared JANE HOWINGTON, known to me to be the City Manager of the City of Kalispell, a municipality, that executed the within instrument, and acknowledged that such City Manager subscribed, sealed and delivered said instrument as the free and voluntary act of said municipality, for the uses and purposes therein set forth, and that she was duly authorized to execute the same on behalf of said municipality. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and year first above written. Notary Public, State of Montana Residing at My Commission Expires BASEBALL FIELDS LEASE AGREEMENT - Page - 8