HomeMy WebLinkAbout11727RESOLUTION NO. 11727
A RESOLUTION APPROVING AN AGREEMENT
BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND
PUEBLO DEVELOPMENT FOUNDATION TRANSFERRING
BY SPECIAL WARRANTY DEED LOT 38, PUEBLO
MEMORIAL AIRPORT INDUSTRIAL PARK SUBDIVISION
TO PUEBLO DEVELOPMENT FOUNDATION AND
AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL
TO EXECUTE SAME
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1
The Agreement dated October 26, 2009 between Pueblo a Municipal Corporation
and Pueblo Development Foundation transferring by Special Warranty Deed Lot 38,
Pueblo Memorial Airport Industrial Park Subdivision to Pueblo Development
Foundation, a copy of which is attached hereto, having been approved as to form by the
City Attorney, is hereby approved.
SECTION 2
The President of the City Council is authorized to execute and deliver the
Agreement and Special Warranty Deed in the name of the City and the City Clerk is
directed to affix the seal of the City thereto and attest same.
SFrTin S
This Resolution shall become effective upon final passage and approval.
INTRODUCED: October 26. 2009
A77TSTFD SY:
CITY CLERK
BY: Judy Weaver
COUNCILPERSON
APPR D' } �-
PRESIDENTaf Cfty Council
ED
Background Paper for Proposed
RESOLUTION
AGENDA ITEM # N -8
DATE: October 26, 2009
DEPARTMENT: Law Department
TITLE
A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION AND PUEBLO DEVELOPMENT FOUNDATION TRANSFERRING BY
SPECIAL WARRANTY DEED LOT 38, PUEBLO MEMORIAL AIRPORT INDUSTRIAL
PARK SUBDIVISION TO PUEBLO DEVELOPMENT FOUNDATION AND
AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME
ISSUE
Should the City transfer property at the Pueblo Memorial Airport Industrial Park to
Pueblo Development Foundation for lease in conjunction with a job creating capital
improvement project?
PEDCO recommends approval.
BACKGROUND
Foundation will enter into a lease of the Property with The Water Company, LLC to
locate its business at the Pueblo Memorial Airport Industrial Park ( "Lease "). The Lease
shall be a triple -net lease for an initial term of two years with the option to renew for
three additional 1 -year terms. Rent will be $23,000 per month during the initial 2 -year
term and $13,475 per month during each 1 -year renewal term. Foundation will loan The
Water Company approximately $450,000 to remodel the Property and to relocate its
business to the Property ( "Loan "). Foundation will retain and apply the rent to the
payment of the Loan (approximately 22 months). Thereafter, all rent and other
payments received by Foundation under the Lease (except general property taxes) shall
be held in trust by Foundation for the benefit of the City and, immediately after receipt
thereof, Foundation shall deliver and pay the rent and other payments under the Lease
received by Foundation to City, less $1,150.00 of the rent to be retained by Foundation
as reimbursement to Foundation for its expenses incurred in participating in this
transaction and as Lessor under the Lease.
City will transfer title to the Property to Foundation by special warranty deed
contemporaneously with the execution of the Lease. Foundation shall not use,
encumber, lease, sell, assign or otherwise transfer the Property, except for the Lease.
Foundation will cause the Property to be insured against loss or other casualty for its full
replacement value. The proceeds of such insurance shall be paid solely to the City.
FINANCIAL IMPACT
Foundation will take over property maintenance, utilities and insurance costs and
release City therefrom.
AGREEMENT
THIS AGREEMENT entered into as of October 26, 2009 between Pueblo, a Municipal
Corporation ( "City") and Pueblo Development Foundation, a Colorado Nonprofit Corporation
( "Foundation "), WITNESSETH
WHEREAS, the building consisting of approximately 26,000 square feet and approximately
3.92 acres of land commonly known as 31965 United Avenue, Pueblo, Colorado, legally described
as Lot 38, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado (the
"Property ") is available for lease in conjunction with a job creating capital improvement project; and
WHEREAS, City is willing to transfer title to the Property to Foundation upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, City and Foundation agree as follows:
1. Foundation will enter into a lease of the Property with The Water Company, LLC to
locate its business at the Pueblo Memorial Airport Industrial Park ( "Lease "). The Lease shall be a
triple -net lease for an initial term of two years with the option to renew for three additional 1 -year
terms. Rent will be $23,000 per month during the initial 2 -year term and $13,475 per month during
each 1 -year renewal term. Foundation will loan The Water Company approximately $450,000 to
remodel the Property and to relocate its business to the Property ( "Loan "). Foundation will retain
and apply the rent to the payment of the Loan (approximately 22 months). Thereafter, all rent and
other payments received by Foundation under the Lease (except general property taxes) shall be held
in trust by Foundation for the benefit of the City and, immediately after receipt thereof, Foundation
shall deliver and pay the rent and other payments under the Lease received by Foundation to City,
less $1,150.00 of the rent to be retained by Foundation as reimbursement to Foundation for its
expenses incurred in participating in this transaction and as Lessor under the Lease.
2. City will transfer title to the Property to Foundation by special warranty deed
contemporaneously with the execution of the Lease. Foundation shall not use, encumber, lease, sell,
assign or otherwise transfer the Property, except for the Lease. Foundation will cause the Property to
be insured against loss or other casualty for its full replacement value. The proceeds of such
insurance shall be paid solely to the City.
3. The property will be conveyed by City and shall be accepted by Foundation in its
present condition "AS IS" and "WITH ALL ITS FAULTS." Foundation understands and agrees that
City has made no representations, express or implied, as to the quantity, quality or condition of the
Property, environmentally or otherwise.
4. Foundation shall perform all covenants and conditions on the part of the Lessor to be
performed under this Agreement and the Lease, and shall enforce all covenants and conditions on the
r
performed under this Agreement and the Lease, and shall enforce all covenants and conditions on the
part of the Lessee to be performed under the Lease. Foundation shall give written notice to City of
any of Lessee =s defaults under the Lease. Foundation =s obligations under this Agreement shall be
secured by a first deed of trust on the Property and Foundation shall execute and deliver to City its
deed of trust in form and content approved by the City Attorney. The deed of trust shall be recorded
immediately after the recording of the special warranty deed.
5. If Foundation defaults in the performance of any covenant or provision of this
Agreement or Lease, Foundation shall within ten (10) days after written demand by City, convey
marketable fee simple title to the Property to City free of liens and encumbrances except liens and
encumbrances existing at the time Foundation acquired title to the Property from the City and
Foundation =s deed of trust securing the performance of this Agreement, and assign the Lease to the
City.
6. If any provision of this Agreement is declared by a court of competent jurisdiction to
be invalid or unenforceable, such determination shall not affect the other provisions of this
Agreement which shall remain in full force and effect.
7. The provisions of this Agreement are and will be for the benefit of City and
Foundation only and not for the benefit of any third party, and accordingly, no third party shall have
any right or remedy hereunder or the right to enforce any provision of the Agreement.
8. This Agreement shall be binding up and inure to the benefit of the City and
Foundation and their respective successors and assigns, provided Foundation may not assign this
Agreement or any of its rights hereunder without the prior written consent of City.
9. The covenants and agreements set forth in this Agreement are covenants running with
the Property, shall survive the execution, delivery and recordation of the special warranty deed, and
shall not merge nor be deemed to have merged by special warranty deed.
Executed at Pueblo, Colorado, the day and year first above written.
Pueblo, a Municipal Corporation
By_ d�J
President of the City Coun it
Attests_:
City- Jerk
Approved as to form:
Pueblo Development Foundation
BY `�'
President l
Attest: A
Secr tary
City A6omey
1828201 WD 12/21/2009 12:46:47 PM
Page: I of 1 R 6.00 D 0.00 T 6.00
Gilbert Ortiz Clerk /Recorder, Pueblo County, Cc
SPECIAL WARRANTY DEED
Tile "Grantor" (whether one or more than one),
Pueblo, a municipal corporation
Whose legal address is 1 City Hall Place,
Pueblo, Colorado, 81003
of the * County of Pueblo and State of
Colorado for the consideration or Ten Dolla
and Valuable Consideration
in hand paid, hereby sells and conveys to Pueblo Development
(whether one or more than one), the "Grantee ", whose legal address is 301
200, .Pueblo, CO 81003 ,of the
State of Colorado , the following real property in the
and State of Colorado, to wit:
:s and Other Good
>D=XK%kt$ ),
Foundation
N. Main Street, Suite
County or Pueblo and
*County of
Lot 38 Pueblo Memorial Airport Industrial
Park Subdivision
Documentary Fee: None, consideration
less than $500.00
also known by street address as: 31965 United Avenue, Pueblo, Colorado, 81001
and assessor's schedule or parcel number: 330021008
with all its a qurtenances, and warrants the title against all persons claiming under the Grantor, subject to all
lie ances, easements, restrictions, reservations,
co ri�r1t� a}' onditions of record.
~ s` 26th day of October 20 09
;� 91gned this
tte$t:
�, „City C
W :
Pueb a municipal corporation
By
President of the City 1 69ouncil
STATE OF COLORADO
SS.
County of Pueblo
"
The foregoing instrument was acknowledged before me this �L — day of October , 20 09
by Ortegon as President of the City Council and Gina— Dutcher as
City Clerk of Pueblo, icipal corporation.
GG pS..O / Witness my hand and official seal.
' My commission expires: 9 17 12-01l
�� N
•. �'uBU.. ,
v ••.........•
*Insert "City and" where applicable. OF Nu�bliu
Name and Address of Person Creating Newly Created Legal Description (S 38 -35- 106.5, C. It. S.)
No. 900, Rev. 1 -06. SPECIAL WARRANTY DIED tShort Farm) V
nmdford Pahlishing, 1743 Wazae St., Denver, CO Stl -'tl —(303) 292 2 — www.bmdfordpablishing.com — 1 -06
1828202 TD 1212112009 12:46:47 PM
Page: 1 of 1 R 6.00 D 0.00 T 6.00
Gilbert Ortiz Clerk/Recorder, Pueblo County, Co
mill V16MWAIC1`1111f+W W WitWN N,h 11111
DEED OF TRUST
THIS DEED OF TRUST, Dated October 28, 2009 ,between
Pueblo Development Foundation, a Colorado
nonprofit corporation
the rantor herein, whose address is -
361 N. Main Street, Pueblo, "CO 81003 of the
'County of Pueblo and State of Colorado, and
the PUBLIC TRUSTEE of the County or City and County in which the property described
below is situated, in the State of Colorado,
Witness:
Ir
The grantor, to secure a promissory note or notes hereinafter referred to in the singular, dated
fbtVX ]PAakprt4O45EktTfO1: J#
XDa%X, payable,to the order of the City of Pueblo
the beneficiary "herein 1 City Hall Place, Pueblo,
Colorado, 81003
' ,xidBx�6atc�e2tlactxaf.
a�mmxhexotnfmua�shr�t6saeofxtxhcxnOxSc apm�a��IaP�2sX�tk
does hereby grant and convey unto said Public Trustee the following described property, situate in the County
of Pueblo state of Colorado, to wit: Lot 38, Pueblo Memorial Airport
Industrial Park Subdivision, Pueblo County, Colorado
*The purpose of this deed of trust is to secure grantor's
performance of its obligations under that certain Agreement
dated October 26, 2009 between grantor and City of Pueblo (the
"Agreement "). Wherever the terms "promissory note," "note," or
"indebtedness" are referred to herein, they shall, individually
or jointly, be deemed and construed to be the Agreement.
also known by street and number as 31965 United Avenue, Pueblo, CO 81001
TO NAVE AND TO HOLD the same iogdI:9 rlm"alfapplMd9As, Rr t�st iah payrrwm of said note or any part thereof or interest
- thereon, or in the performance of any covenants hereinafter set forth, then upon the beneficiary (note holder) filing notice of election and demand for sale, said Public Trustee,
.after advertising nonce of said sale weekly, for not ess than four weeks, in some newspaper ofgeneral circulation in said county, shall sell said property in the manner provided
by law in effect at the time of filing said notice and demand, at public auction for cash, at any proper place designated in the notice of sale. Out of the proceeds of said sale said
Trustee shall retain or pay first all fees, charges and costs and all moneys advanced for taxes, insurance and assessments, oron any priorencumbrance, with interest thereon, and
pay the principal and interest due on said note, rendering the overplus (if any) unto the grantor; and after the expiration of the time of redemption, said Truslee shall execute and
deliver to the purchaser a deed to the property sold. The beneficiary may purchase said property or any pan thereof at such sale.
The rancor c pants that at the imc pf de wary of these presents, he is seized of said property in fee simple, and that said pro Fly is free of encumbrances, except easmen restrictions, covenants and conditions o record.
The grantor also covenants that he will keep all buildings insured with a company approved by the beneficiary for fire and extended coverage in an amount equal to the unpaid
balance of said note with loss payable to the beneficiary, will deliver a copy of the fwlicy to the beneficiary and will pay all taxes and assessments against said property and
amounts due on prior encumbrances. If grantor shall fail to pay insurance premiums, taxes or amounts due on prior encumbrance, the beneficiary may pay the same and all
amounts shall become additional indebtedness due hereunder; and in case of foreclosure, he will pay an attorney's feeX In a reasonable
amount.
Should the beneficiary hereunder be made a party to any action affecting this deed of most or the title to said property, the grantor agrees that all court costs and a reasonable
attomey's fee paid by the beneficiary shall become additional indebtedness due hereunder, and the grantor does hereby release and waive all claims in said property as a
homestead exemption or other exemption now or hereafter provided by law.
It is agreed that in case of default in payment of said principal or interest or a breach of any of the covenants herein, then said principal sum hereby secured and interest thereon
may at the option of the beneficiary become due and payable at once, anything in said now to the contrary notwithstanding and possession of said property will thereupon be
delivered to the beneficiary, and on failure to deliver such possession the beneficiary shall be entitled to a receiver for said property, who may be appointed by any court of
competent iursidiction.
Whenever used herein the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. All of the covenants
herein shell be binding upon the respective heirs, personal representatives, successors and assigns of the parties hereto.
Executed the day and year first Punic written.
(SEA (�
Attest: Pueblo Development Foundation
Sec etar
By, ilresiclerfu �
STATE OF COLORADO -
County of
" � = December
r ggotplment was acknowledged before me this /' day of ?9f 2009 "
y� as President of Pueblo Development
at„1 ri,.�aColorado nonprofit corporation.
ion ims It ;�(c�`3 -a ! .Witness my hand and official seal.
( (� t C o "' o
'I {Ifl.l'edVer,inBeR' ' aDd . Notary Public
C
Namleidd Addressof Pe"oh Cell Newty Created Legal Description@ 3&35-10,5, CI '.S.)
' ' ,l,\
Ne. 923B. Rev 6-92 - DEED OF TRUST (Public Trustee) without Due an Sale Clause
Bradford Publishing, 1743 Wazee SL, Denver, CO 80202 — (303) 292 -2500 — 2 -98
October 26, 2009 ,
LEASE
!b. v-" 4vt6A
THIS LEASE entered into as of 9ctel3eg,4 2009 by and between Pueblo Development
Foundation, a Colorado nonprofit corporation (the "Lessor ") and The Water Co. a Delaware Limited
Liability Corporation (the "Lessee "), with WITNESSETH:
WHEREAS, the Lessor is or will be owner of 31965 United Ave, Pueblo, CO, consisting of a
building containing approximately 23,950 square feet (the "Building ") located on approximately 3.92
acres of land (the "Land ") (collectively the Land and Building are referred to herein as the "Leased
Premises "), and
WHEREAS, subject to the covenants and conditions of this Lease, Lessor will remodel the
building in accordance with plans and specifications therefore prepared by Able Consulting Services, Inc.
(the "Architect ") and approved by Lessor and Lessee, and
WHEREAS, Lessee is desirous of leasing the Leased Premises upon the terms and conditions
hereinafter set fort;
NOW, THREFORE, in consideration of the mutual promises, covenants and conditions contained
herein, Lessor and Lessee hereby agree as follows:
Article 1. Leased Premises.
1.01 Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, subject
to the covenants, provisions and conditions herein, the Leased Premises.
1.02 This Lease and Lessee's use of the Leased Premises are subject to the easements, right -
of -way, covenants, conditions, restrictions, reservations and limitations appearing of record, and
applicable zoning and land use laws, ordinances, codes, and regulations governing and regulating the
Leased Premises and its use.
1.03 Lessee shall be Bound by and comply with the covenant and restrictions set forth in the
Special Warranty Deed from the city of Pueblo to Lessee, a copy of which is attached hereto as Exhibit
"A" and incorporated herein.
Article 2. Building Construction
2.01 Subject to confirmation that any and all encumbrances are subordinate to the Deed of
Trust executed in favor of Lessor, Lessor shall cause the Building to be remodeled as herein provided (the
"Remodeling ") and shall pay the actual cost of Remodeling up to but not to exceed $450,000.00 (the
"Maximum Construction Costs ").
2.02 All costs and expenses of Remodeling in excess of the Maximum Construction Costs
( "Excess Construction Costs ") shall be the sole responsibility of the Lessee and shall be paid by Lessee to
Lessor in cash or certified funds within five (5) days after such Excess Construction Costs are incurred.
2.03 The Remodeling shall be designed and constructed
(a) In accordance with the plans, specifications therefore prepared by the Architect (the
"Architect's Plans ") and the construction contract documents with the General Contractor approved by
Lessee and Lessor (the "Construction Documents "). The Architect's Plans and Construction Documents
after approval in writing by both Lessor and Lessee shall be incorporated herein by reference, as it set out
herein in full; and
(b) by general contractor selected by Lessor after competitive bidding which allow qualified
local contractors to participate in the competitive bidding procedures (the "General Contractor "). The
General Contractor shall to the extent feasible use local subcontractors and suppliers. The term "local"
means companies having their principal places of business in the City of Pueblo.
2.04 Lessor shall cooperate in good faith to cause the Remodeling to be substantially
completed on December 18, 2009 or as soon thereafter as practical. The failure for any reason to
substantially complete the Remodeling by December 18, 2009 shall not affect the validity of this Lease
nor the obligations of Lessor and Lessee hereunder, and shall not constitute a breach or default by Lessor
hereunder.
2.05 All changes in the approved Architect's Plans and Construction Documents shall be
approved by Lessor and Lessee. The failure of Lessor or Lessee to approve or reject any proposed change
in the Architect's Plans or Construction Documents, or any modification thereto, or any proposed change
to the work within the general scope of construction contemplated by the construction Documents, within
five (5) days after receipt shall constitute approval thereof, provided, however, that all changes which
result in the construction costs to be greater than the MAXIMUM Construction Costs must be approved
in writing by both Lessor and Lessee,. And Lessee shall pay to Lessor the cost of such change in cash or
certified funds within five (5) days after the approval of such change by Lessor and Lessee.
2.06 Whenever in this Article 2 or in any Article of this Lease, the approval or consent of
Lessor or Lessee is required, such approval or consent shall not be unreasonably withheld, conditioned or
delayed.
Article 3. Term
3.01 The Term of this Lease shall be two (2) years commencing January 1, 2010 and ending
two (2) years thereafter ( "Term "). If Lessee does not agree that the Remodeling has been substantially
completed on the date specified in the notice from Lessor, Lessee shall promptly notify Lessor in writing
of its objections to those matters which are not substantially completed. Lessor shall consider, in good
faith, Lessee's objections and shall either (i) extend the Commencement Date, or (ii) respond with an
explanation of why substantial completion has occurred and the Commencement Date shall be the same
as previously stated in 2.04. Lessor and Lessee acknowledge and agree that certain obligations under
various Articles of this Lease shall commence prior to Commencement Date, including but not limited to
Article 2, Building Construction, and Lessor and Lessee agree to and are bound by any such Articles prior
to the Commencement Date.
3.02 If not in default hereunder, Lessee shall have the option to renew this Lease for an
additional three terms of one (1) year each upon the same provisions, covenants and conditions, except
Lessee shall have no further option to renew thus Lease beyond the expiration of the fifth (5) year of
occupancy. The option to renew shall be exercised by Lessee by delivering to Lessor written notice of
Lessee's exercise of the option at least ninety (90) days prior to the last day of the Term of this Lease. If
Lessee fails for any reason to give timely notice of its exercise of the option to renew, the option rights
granted hereby shall automatically terminate.
Article 4. Rent.
4.01 Lessee shall pay to Lessor monthly rent of $23,000.00 in advance, without notice or
demand, beginning with the Commencement Date and on the same day of each month thereafter, until
such time as the expense of the Remodeling has been repaid by applying the $23,000.00 paid per month.
Thereafter, until the end of the Term, the monthly rent shall be reduced to $14,625.00 per month.
Monthly rent shall be $14,625.00 per month for the Renewal Term, if the Lessee exercises the renewal
option in 3.02.
4.03 All monthly rent and other payments required to be made by Lessee hereunder which
shall remain unpaid fifteen (15) days after their due dates shall bear interest at the rate of ten percent
(10 %) per annum until paid. All rent and other payments shall be made at or mailed by United States
mail to the following address: Pueblo Development Foundation, 301 N. Main St., Pueblo, CO 81003 or
such other address as Lessor may from time to time designate to Lessee in writing.
4.04 Lessee's obligation to pay rent and other payments to Lessor hereunder is absolute and
unconditional and rent or additional rent shall not be offset, abated, reduced or withheld for any cause
whatsoever.
4.05 U is the intent of the parties hereto that this Lease be a "triple net" lease with Lessor
incurring no obligation, monetary or otherwise, except for the Remodeling under Article 2 hereof.
Article 5. Use of Leased Premises.
5.01 The leased Premises shall be used and occupied by Lessee exclusively for commercial
purposes associated with or incident to lessee's business activities.
5.02 Lessee shall use the Leased Premises in a careful, safe and proper manner in compliance
with all laws and regulations applicable to the Leased Premises and Lessee's use thereof. Lessee shall not
cause, maintain or permit any nuisance or waste in, on, or about the Leased Premises.
5.03 Lessee shall not abandon nor cease to conduct business on the Leased Premises for any
period longer than 180 consecutive days.
Article 6. Condition of Premises
6.01 EXCEPT AS SPECIFICALLY SET FORTH IN THIS LEASE, IT IS UNDERSTOOD
AND AGREED THAT LESSOR IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY
WARRANTY OR REPRESENTATION OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE LEASED PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OR REPRESENTATION AS TO HABITABILITY, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN THE COVENANT OF QUIET
POSESSION SET FORTH IN ARTICLE 20), ZONING, PHYSICAL OR ENVIRONMENTAL
CONDITIONS, UTILITIES, GOVERNMENTAL APPROVALS, COMPLIANCES OF THE LEASED
PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS
OF ANY DOCUMENT OR OTHER INFORMARION PROVIDED TO LESSEE BY ANY OTHER
PERSON, OR ANY OTHER MATTER OR THING REGAWRDING THE LEASED PREMISES.
6.02 The taking of possession of the Leased Premises by Lessee after Commencement Date
shall be conclusive evidence that the Remodeling has been completed in compliance and accordance with
the approved Architect's Plans and Construction Documents, that Lessee accepts the Leased Premises in
its then present condition "As Is, Where Is, With All Faults" and that the Leased Premises are in good and
satisfactory condition at the time such possession was taken.
Article 7. Alterations and Improvements
7.01 Lessee shall not make any additions, alterations or improvements in or to the Lease
Premises ( "Alterations ") without Lessor's prior written consent. Lessee shall not permit or allow any
lien to be filed or recorded against the Leased Premises or Lessor's interest therein, and Lessee shall fully
cooperate with Lessor in obtaining the protection afforded Lessor under Section 38 -19 -105, C.R.S. All
Alterations made in or to the Leased Premises by Lessee shall become part of the Leased Premises and be
surrendered with the Leased Premises t the termination of this Lease.
7.02 All equipment, fixtures and improvements of a detachable or temporary nature installed
or placed upon the Leased Premises by Lessee, including trade fixtures, shall remain the property of
Lessee, subject to Lessee's right, at its option, to remove same not later than ten (10) days after
termination of this Lease. Lessee, at its expense, shall promptly repair any damage resulting from such
removal. The failure of lessee to remove its equipment, fixtures and detachable improvements within ten
(10) days after termination of this Lease, shall at the option of Lessor, be deemed an abandonment of such
property and Lessor may dispose of such property as the Lessor, in its sole discretion, may determine.
Article 8. Repairs and Maintenance
8.01 Except for Remodeling as provided in Article 2 hereof, Lessor shall not be obligated to
repair, maintain or alter the Leased Premises or any part thereof. Lessee, at its expense, shall keep and
maintain the Leased Premises, including, without limitation, the Building, structural components, roofs,
walls, fixtures, and electrical, heating, mechanical, plumbing and air conditioning systems, and adjacent
sidewalks and parking area, in good condition and repair and in a good, clean and safe condition at all
times and return the same to Lessor in as good condition and state of repair as the same were in as of
Commencement Date, except for ordinary wear.
8.02 If Lessee becomes obligated to make repairs which are or may be covered by any
manufacturer's or General Contractor's warranty issued to or for the benefit of Lessor, Lessor will assign
and transfer to Lessee it interest in any such warranty for the purpose of making such repairs. If any such
warranty may not be legally assigned, Lessor, at the request and expense of Lessee, will in good faith
enforce such warranty on behalf of Lessee.
8.03 If Lessee becomes obligated to make repairs caused by an occurrence covered by the
insurance described in Article 11.01, the net proceeds of such insurance shall be made available to Lessee
to offset the cost of such repairs.
Article 9. Right of Entry
Lessor, or Lessor's officers, employees, agents and representatives, as the case may be, may enter
the Leased Premises during normal business hours upon written or verbal notice to Lessee, except notice
shall not be required in case of emergency, such as fire.
Article 10. Assignment
Lessee shall not voluntarily or by operation of law assign all or any part of the Lease or Lessee's
interest therein without the express written consent of Lessor, which consent will not be unreasonably
withheld. Lessor may withhold its consent if the proposed assignee's financial standing and
responsibility at the time of the proposed assignment is sufficient in the Lessor's sole discretion to give
assurance of performance and compliance with all terms and conditions of this Lease. Upon such an
assignment and consent, Lessee shall be released from all obligations arising or occurring under this
Lease after the effective date of such assignment and consent, provided that such assignee shall execute,
acknowledge and deliver to Lessor and assumption agreement in form and substances satisfactory to
Lessor, whereby assignee agrees to observe and keep all the terms, provisions, covenants and conditions
to be observed, performed and kept by Lessee hereunder. Any assignment or attempted assignment of the
Lease or any interest herein by Lessee without Landlord's express written consent shall be null and void.
Article 11. Insurance and Indemnification
11.01 Lessee shall indemnify and hold Lessor harmless from and defend Lessor against any and
all claims or liability, including cost of defense and reasonable attorney fees, for any injury or damage to
Lessee or its officers, agents or employees, or to Lessee's property, or to any third person, or to property
of any third person: (a) occurring in, on or about the Leased Premises or any part thereof by or from any
cause whatsoever except injury or damage caused by the wrongful or intentional acts of Lessor, its
officers or employees; or (b) arising out of or resulting from the Leased Premises , or any condition
thereon, or from Lessee's use and occupancy of the Leased Premises, or any equipment therein or
appurtenances thereto, or any activity conducted thereon.
11.02 Lessee shall secure and maintain in full force and effect, at its expense, during the Term
and Renewal Term, if applicable, of this Lease, commercial liability insurance including personal injury,
property damage and contractual coverage in the minimum amount of $2,000,000.00 combined single
limits naming Lessor as an additional insured.
1 1.03 Lessee shall secure and maintain during the Term of this Lease Colorado Worker's
Compensation insurance or other similar coverage in the statutorily mandated amounts.
11.04 A copy of each insurance policy, or certificate thereof, issued by an association or
company authorized to issue such policy or policies under the law of the State of Colorado containing a
provision prohibiting cancellation or material modification of the insurance except after thirty (30) days'
notice to Lessor, shall be delivered to the Lessor within thirty (30) days after date of this Lease and
thereafter the Lessee will furnish to Lessor evidence of the continuance of the insurance coverage
required herein within a reasonable time after the same has been issued.
Article 12. Fire and Extended Coverage Insurance
12.01 Lessee shall, at its expense, during the Term and renewal of this Lease, secure and
maintain in full force and effect "All — Risk" property insurance (including, without limitations, fire,
extended coverage and all risk perils including mechanical breakdown) upon the Leased Premises. Such
insurance shall be in an amount not less than the full replacement value of the Building and improvements
(without deduction for physical depreciation), and issued by an insurance company or association
authorized to issue such policies under the taws of the State of Colorado and approved by Lessor, shall
contain a deductable of not more than $5,000.00 and name the Lessor as the insured, with a standard
Colorado mortgage clause in favor of the City of Pueblo, and shall not be subject to cancellation,
reduction or modification upon less than thirty (30) days' written notice to Lessor. Such insurance, by its
terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor and the City
of Pueblo, and their respective officers, agents and employees, for any loss or damage resulting from
covered perils. Lessee will furnish to Lessor evidence of such insurance and its continuance during the
Term and Renewal Term of this Lease.
12.02 Lessee shall, at its expense, secure and maintain fire and extended coverage insurance on
all fixtures, equipment and improvements installed by Lessee on the Leased Premises. Such insurance, by
its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor and the
City of Pueblo, and their respective officers, agents and employees, for any loss or damage resulting from
covered perils.
12.03 A copy of each insurance policy, or certificate thereof, issued by an association or
company authorized to issue such policy or policies under the law of the State of Colorado containing a
provision prohibiting cancellation or material modification of the insurance except after thirty (30) days'
notice to Lessor, shall be delivered to the Lessor within thirty (30) days after date of this Lease and
thereafter the Lessee will furnish to Lessor evidence of the continuance of the insurance coverage
required herein within a reasonable time after the same has been issued.
Article 13. Taxes and Assessments
13.01 Lessee shall promptly pay 1/12 of the estimated real property taxes with the monthly rent
payment. The estimated real property tax will be based upon the last known actual real property tax paid.
This money will be held in trust by the Lessor to be used to pay the actual real property taxes for the year
the monthly taxes were collected. Lessee will pay for any additional monies needed to pay the property
tax within 30 days of notification if the monies collected during that year are short of the real property tax
due. If the monies collected exceed the real property tax due, then the Lessee has the option to continue
the balance towards the current year estimated real property tax or request a refund of the account
balance. The account balance, if requested, shall be paid within 30 days of the written request except if
the Lessee has an outstanding balance due of rent or property tax payable to the Lessor. Real property
taxes shall be prorated for periods falling within the Term and Renewal Term of this Lease.
Notwithstanding the foregoing, Lessee shall have no responsibility to pay and/or discharge any
mechanic's liens arising out of or relating to failure to pay for Remodeling made by Lessor prior to
Commencement Date, provided Lessee has paid to Lessor all Excess Construction Costs.
13.02 Lessee shall pay, before delinquency, any and all property taxes levied or charged against
any of the personal property belonging to it and situated on the Leased Premises or used in connection
with the operation and maintenance of the Building on the Leased Premises.
13.03 Lessee shall have the right to contest or review, by legal proceedings at its own expense,
and if necessary in the name of the Lessor, or in such other manner as it may deem suitable, any tax,
assessment, levy or charge herein agreed to be paid by Lessee under this Article 13. Lessee may defer
payment of any such contested item if in connection with the proceeding instituted by Lessee there shall
have been obtained a stay of the collection of the item so contested. In the event of such contest, Lessee
shall give Lessor written notice prior to the commencement of any such contest which shall be at least at
least ten (10) days prior to the delinquency of the item in contest and, on request of the Lessor, Lessee
shall give to Lessor a good and sufficient surety bond indemnifying Lessor and the Leased Premises
against any such tax, assessment, levy or other charge and from any cost, liability or damage arising out
of such contest. In the event any notices of proposed increases in taxes, assessments, levies or charges
which are the obligation of the Lessee are received by Lessor, it shall promptly, but in no event later than
45 days after receipt thereof, forward the same to Lessee in order that Lessee may proceed with payment
or contest procedures within the periods provided for such purposes.
13.04 Lessee shall furnish Lessor within thirty (30) days after any amount is payable by Lessee
under this article 13, official receipts of the appropriate taxing authority or lien holder of other proof
satisfactory to Lessor evidencing such payments as are required under this Article 13.
Article 14. Utilities.
Lessee shall pay, before delinquent, City of Pueblo's combined service fee and all charges for
sewer, water, gas, electricity, telephone and all other utility services furnished to or used in or supplied to
the Leased Premises. Lessor shall not be obligated to furnish or provide any utilities, facilities or services
of any kind.
Article 15 Damage to or Destruction of Premises.
15.01 If, during the Term or Renewal Term of this Lease, the Leased Premises shall be damaged
to such an extent that the repair of such damage and the restoration of the Leased Premises can be
accomplished, with reasonable diligence, within one hundred eighty (190) days after such damage, Lessee
shall promptly repair such damage and cause the Leased Premises to be restored to their condition prior to
the event causing the damage. If, during the Term or Renewal Term of this Lease, the Leased Premises
shall be destroyed or damaged, or partially destroyed or damaged, without Lessee's fault to such an extent
that the repair of such destruction or damage and the restoration of the Leased Premises cannot be
accomplished, with reasonable diligence, within one hundred eighty (180) days after destruction or
damage, then Lessee shall promptly notify Lessor in writing of such fact within forty- five(45) days after
the date of such destruction or damage, and Lessee shall thereafter have the right, during a period of thirty
(30) days following such notification, to terminate this Lease by written notice to the Lessor, declaring
this Lease to be terminated provided, however, that, as a condition precedent to such termination, all
proceeds of insurance required to be maintained by Lessee under Article 12.01, an amount equal to the
insurance proceeds which would have been available but for such failure shall be paid by Lessee to
Lessor. Unless such notice of immediate termination shall be given within such 30 -day period, this Lease
shall continue in full force and effect and Lessee shall promptly repair such destruction or damage and
cause the Leased Premises to be restored to their condition prior to the event causing the destruction or
damage. In the event the Leased Premises are destroyed or damaged, or partially destroyed or damaged
without Lessee's fault, the monthly rent payable by Lessee shall be abated proportionately according to
the floor area of the Leased Premises which is useable by Lessee. Such abatement shall continue for the
period commencing with such damage or destruction and ending when Lessee completes repair work or
reconstruction, provided Lessee diligently commences and expeditiously completes the repair work or
reconstruction.
15.02 Lessee shall make the repairs, restoration or rebuilding as expeditiously as possible in
accordance with plans and specification submitted to and approved in writing by Lessor and in
compliance with all applicable laws, regulations and codes.
Article 16. Eminent Domain.
If the whole or substantial part of the Leased Premises shall be taken or condemned by any
competent authority for any public or quasi - public use or purpose under any statute or by the right of
eminent domain, or purchased under threat of such taking, then this Lease shall terminate on the date
when the condemning authority takes possession of the Leased Premises or the substantial part thereof so
taken. There shall be no apportionment of the award for taking or condemnation, the entire award going
to the Lessor, provided Lessee shall have the right to recover any award which may be made for damages
to or condemnation of Lessee's movable trade fixtures, equipment, furniture and furnishings or payments
for relocation, if any.
Article 17. Quiet Possession.
Lessee shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the other
terms hereof, provided that Lessee pays the monthly rent and additional rent herein recited and performs
all of Lessee's covenants and agreements contained herein and in the City Agreement.
Article 18. Default.
18.01 In the event of default at any time by Lessee in the payment of the monthly rent or
additional rent herein provided for or in the performance of any other of its covenants herein contained,
Lessor shall have the right, after thirty (30) days' notice in writing to Lessee and Lessee's failure within
said thirty (30) day period to cure said default, or if said default does not relate to the payment of money
and cannot by its nature be cured within said thirty (30) day period, to undertake and diligently pursue
action to cure said default, to either:
(a) terminate this Lease and re -enter and take possession of the Leased Premises, and /or
(b) pursue any remedy whatsoever provided by law, and/or
(c) re -enter and take possession of the Leased Premises and use its best efforts to re -let the
same for and on account of Lessee for the then full remaining portion of the unexpired Term or
Renewal Term of this Lease or for any shorter period, and to collect and receive payment of rent
therefore, but no such re -entry or re- letting shall be construed as a termination of this Lease or as a release
of Lessee from Lessee's obligation to perform any other covenant herein contained. It expressly being
understood and agreed that in the event of any such re -entry or re- retting buy Lessor such re-entry shall
not operate to terminate this Lease or alter the obligation of Lessee to perform its covenants and to pay
monthly rent or additional rent pursuant to the terms hereof unless Lessor expressly so elects pursuant to
paragraph 18.01(a) above. Lessor shall in no way be responsible or liable for any failure to re -let the
Leases Premises, or any part thereof, or for any failure to collect any rent due upon such re- letting. No
notice from Lessor hereunder or under a forcible entry and detainer statute or similar law constitutes an
election by Lessor to terminate this Lease unless such notice specifically so states. Lessor reserves the
right following any such re -entry and/or re- letting to exercise its right to terminate this Lease; and /or
(d) cure the default on Lessee's behalf and at Lessee's expense, in which event, all costs,
expenses and reasonable attomey's fees incurred by Lessor in curing the default together with interest
thereon at the rate of ten (10) percent per annum shall constitute additional rent payable to Lessor by
Lessee upon demand.
18.02 If Lessor does not elect to terminate this Lease but takes possession as provided for in
Article 18.01(c), Lessee shall pay to Lessor the monthly rent and other charges at the times and in the
manner as herein provided which would be payable if such repossession had not occurred, less the net
proceeds, if any, of any re- letting of the Leased Premises after deducting all Lessor's reasonable expenses
including, without limitation, all repossessions costs, brokerage commissions, legal expenses, attorneys'
fees, alterations and repair costs and expenses of preparation of such re- letting.
18.03 In the event the parties hereto become involved in a dispute arising out of this Lease, or the
performance or breach thereof, the Court shall award costs, expenses, and attorney fees to the prevailing
party.
18.04 If Lessee violates any of the terms and provisions of this Lease or defaults in any of its
obligations hereunder other than the payment of monthly rent or other sum payable hereunder, such
violation may be restrained or such obligation enforced by injunction at the instance and request of Lessor
without the showing of any special damages or an inadequate remedy at law.
Article 19. Waiver and Time of Essence.
No waiver of any breach or breaches of any provision, covenant or condition of this Lease shall
be construed to be a waiver of any preceding or succeeding breach of such provision, covenant or
condition, or of any other provision, covenant or condition. Acceptance of monthly rent or partial
monthly rent by Lessor shall not constitute a waiver of any then existing or subsequent breach or default.
Time is of the essence for each and every provision, covenant and condition herein contained and on the
part of Lessee to be done and performed.
Article 20. Assignment by Lessor.
Lessor shall have the right to transfer and assign, in whole or in part, all its right and obligations
hereunder and in the Leased Premises, and in such event and upon Lessor's transferee assuming Lessor's
obligations hereunder no further liability or obligation shall thereafter accrue against Lessor hereunder.
Lessor shall give Lessee written notice of its intent to make an assignment or transfer of this Lease and a
copy of the Express (written) assumption agreement between Lessor and assignee or transferor.
Article 21. Subordination to Mortgage.
This Lease shall be and is hereby made subordinate to any mortgage or deeds of trust of Lessor
which may now or hereafter encumber the Leased Premises and to all renewals, modification,
consolidations, replacements and extensions thereof. This clause shall be self - operative and no further
instrument of subordination need be required by any mortgagee. This clause shall be for the benefit of
any mortgagee. In confirmation of such subordination, however, Lessee shall, at Lessor's request,
execute promptly any appropriate certificate, subordination agreement or instrument that Lessor may
request. Lessee hereby constitutes and appoints Lessor the Lessee's attorney -in -fact to execute any such
certificate, subordination agreement or instrument for and on behalf of Lessee. Notwithstanding the fact
that this Lease is and shall be subordinate as provided above, Lessee will as a result of the enforcement of
the default or foreclosure provisions of such mortgage or deed of trust, including conveyance by deed in
lieu of foreclosure, automatically become the Lessee of the person or party succeeding to the interest of
Lessor without change in the terms or other provisions of this lease and Lessee agrees to attom to such
party; provided, however, that such mortgagee or successor in interest shall not (i) be bound by any
amendment or modification to the Lease made without the written consent of such mortgagee or such
successor in interest; (ii) be liable for any previous act or omission by Lessor under this Lease; or (iii) be
subject to any offset which shall theretofore have accrued to Lessee against Lessor. Lessee further agrees,
upon demand, to execute such non - disturbance and attornment agreements as any such mortgagee or
successor shall request.
Article 22. Estoppel Certificate.
At Lessor's request, Lessee will execute either an estoppel certificate addressed to Lessor's
mortgagee or any prospective successor of Lessor, or a third -party agreement among Lessor, Lessee and
said mortgagee or successor, certifying to such facts (if true) regarding the status and terms of this Lease
as may be requested, and agreeing to such notice provisions and other matters as such mortgagee or
successor may reasonably require connection with Lessor's financing or the conveyance of the Leased
Premises,
Article 23. Notices.
All notices, demands or communications of any kind which may be required or desired to be
served, given or made by Lessee upon or to Lessor, under the terms of or in connection with this Lease,
shall be sufficiently served, given or made (as an alternative to personal service upon Lessor) if such
notice, demand or communication is sent by certified United States mail, addressed to:
Pueblo Development Foundation
301 N. Main St., Suite 200
Pueblo, Colorado 81003
(or to such other person or address as may be hereafter from time to time be designated for this purpose
by Lessor to Lessee in writing). All notices, demands or communications of any kind which may be
required or desired to be served, given or made by Lessor upon or to Lessee, under the terms of or in
connection with this Lease, shall sufficiently served, given or made (as an alternative to personal service
upon Lessee) if such notice, demand or communication is sent by certified United States Mail, addressed
to:
The Water Company, Inc.
31965 United Ave.
Pueblo, Colorado 81001
(or to such other person or address as may hereafter from time to time be designated for this purpose by
Lessee to Lessor in writing).
Article 24. Environmental Provisions.
24.01 For the purpose of this Lease, "Hazardous Materials" means any hazardous or toxic
substance, material or waste which is or become regulated by any local government authority, the State of
Colorado or the United States government and shall include, but not be limited to (1) substances defined
as "hazardous waste ", "restricted hazardous waste ", "hazardous substance" or "hazardous material" under
any applicable federal, state or local law or regulation ( "Environmental Regulations "), (2) asbestos -
containing materials, (3) PCBs. (4) petroleum or petroleum based products, and (5) lead.
24.02 Lessee will comply with Environmental Regulations that are applicable to the Lessee and
its use of the Leased Premises. No activity shall be undertaken by the Lessee, its employees, agents,
licensees, invitees, contractors or subcontractors, on all or any portion of the Leased Premises which
would cause or permit: (i) the presence, use, generation, release, discharge, storage or disposal of any
Hazardous Material in, on, under, about, or from the Leased Premises or any part thereof in violation of
any Environmental Regulations; (ii) any portion of the Leased Premises to become hazardous waste
treatment, storage or disposal facility without receiving proper governmental authorization, and in
compliance with all Environmental Regulations; or (iii) the discharge of pollutants or effluents into any
water source or system, or the discharge into the air of any emissions without receiving proper
governmental authorization, and in compliance with all Environmental Regulations, including, without
limitation, the Federal Water Pollution Control Act, U.S.C. Section 1221 et seq. and the Clean Air Act, 42
U.S.C. Section7401 et se q.
24.03 Lessee agrees to defend, indemnify and forever hold harmless the Leased Premises, City
of Pueblo and Lessor, and their respective agents, successors, and assigns, as their interest may appear,
from all claims, losses, damages, penalties, expenses and costs, including, but not limited to, attorneys'
fees, remedial, and cleanup costs, incurred by reason of the use, storage, generation, release, discharge,
maintenance, disposal, or removal of Hazardous Materials in, on, under, about or from the Leased
Premises, or any part thereof, by Lessee, its employees, agents, licensees, invitees, contractors and
subcontractors. The provisions of Article 24 shall expressly survive the expiration of the Term or other
termination of this Lease.
Article 25. Miscellaneous Provisions
25.01 Colorado Law This Lease shall be governed by the laws of the State of Colorado and
shall be construed in accordance therewith without reference to such State's choice of law and /or conflict
of law principles.
25.02 Writing for Waiver or Modification No provision of this Lease may be waived or
modified except by an agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
25.03 Binding Effect This Lease sets forth the entire and complete understanding and
agreement of the parties hereto. Lessee acknowledges and agrees that it has not relied upon any
statements, representations, agreements or warranties of Lessor except such as are expressed herein. This
Lease shall be binding on the parties, their successors and approved assigns.
25.04 Construction Throughout this Lease, the singular shall include the plural; the plural shall
include the singular; and the masculine and neuter shall include the feminine, wherever the context so
requires.
25.05 Text to Control The headings of sections are included solely for convenience of
reference. If any conflict between any heading and the text of this Lease exists, the text shall control.
25.06 Severabilitv If any provision of this Lease is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining provisions. On the
contrary, such remaining provisions shall be fully severable, and this Lease shall be construed and
enforced as if such invalid provisions had never been inserted in the Lease.
25.07 Venue and Jury Trial Lessor and Lessee agree that the venue for all actions or causes of
action relating to this Lease or the Leased Premises shall be Pueblo County, Colorado. All such actions
shall be filed in the District Court, County of Pueblo, State of Colorado, and Lessor and Lessee submit to
the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial.
25.08 Lessee's Warranties Lessee and the persons signing this Lease on behalf of Lessee
represent and warrant that such parties and Lessee have the requisite power and authority to enter into,
execute and deliver the Lease and that this Lease is a valid and legally binding obligation of Lessee
enforceable against Lessee in accordance with its terms.
25.09 Time of Essence Time shall be of the essence as to the performance of all terms,
conditions and obligations under this Lease.
25.10 Third Parties The provisions of this Lease are and will be for the benefit of Lessor and
Lessee only and not for the benefit of any third party, and accordingly, not third party shall have any
right or remedy hereunder or the right to enforce any provision of this Lease.
25.11 Brokerage Commission Lessor and Lessee each represent to the other that they have not
entered into any agreement or incurred any obligation in connection with the Lease transaction which
might result in the obligation to pay a brokerage commission to any brother. Each party shall indemnify
and hold the other party harmless from and against any claim or demand by any broker or other person for
bringing about this Lease who claim to have dealt with such indemnifying party, including all expenses
incurred in defending any such claim or demand (including reasonable attorney's fees).
25.12 Representatives Lessee designates Victoria Hauser as its representative with authority to
act for and on behalf of Lessee. Lessor designates its representative with
authority to act for and on behalf of Lessor, either party may, by written instrument given to the other
pursuant to Article 23, change such party's designated representative.
IN WITNESS WHEREOF, Lessor and Lessee, by their duly authorized representatives, have
executed this Lease on the day and year first above written.
PUEBLO DEVELOPMENT FOUNDATION
/1s�
1 ',.
Title: President
THE WATER COMPANY
By L C 3 1�t u�
Name: Victoria Hauser
Title: Chief Financial Officer
[SEAL]
Attest:
Name:
STATE OF COLORADO )
COUNTY OF PUEBLO )ss.
[SEAL]
Attest:
Name: - cet 6C IC r
The foregoing instrument was acknowledged before me this day of v�x
2009 by
Witness my hand and official seal.
My commission expires:
1
[SEAL]
Notary tic