HomeMy WebLinkAbout13061RESOLUTION NO. 13061
A RESOLUTION APPROVING A REAL ESTATE MANAGEMENT
AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION, AND BARCLAY CLARK RELATING TO THE
POPE BLOCK AND AUTHORIZING THE PRESIDENT OF CITY
COUNCIL TO EXECUTE SAID AGREEMENT
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Agreement dated September 22, 2014 between Pueblo, a Municipal Corporation,
and Barclay Clark relating to the Pope Block, a copy of which is attached hereto (“Agreement”)
having been approved as to form by the City Attorney, is hereby approved. The President of the
City Council is authorized to execute and deliver the Agreement in the name of the City and the
City Clerk is directed to affix the seal of the City thereto and attest same.
SECTION 2.
The officers and staff of the City are directed and authorized to perform any and all acts
consistent with the intent of this Resolution and the attached Agreement to effectuate the
transactions described therein.
SECTION 3.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: September 22, 2014
BY: Chris Nicoll
COUNCILPERSON
City Clerk’s Office Item # M-4
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: September 22, 2014
TO: President Sandra K. Daff and Members of City Council
VIA: Gina Dutcher, City Clerk
FROM: Sam Azad, City Manager
SUBJECT: A RESOLUTION APPROVING A REAL ESTATE MANAGEMENT AGREEMENT
BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND BARCLAY CLARK
RELATING TO THE POPE BLOCK AND AUTHORIZING THE PRESIDENT OF
CITY COUNCIL TO EXECUTE SAID AGREEMENT
SUMMARY:
Attached is a proposed Resolution approving a one-year Real Estate Management Agreement
with Barclay Clark relating to the Pope Block which is to become the property of the City of
Pueblo.
PREVIOUS COUNCIL ACTION:
On January 27, 2014 by Resolution No. 12888, City Council approved the acquisition by the
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City of 310 Court Street, 220 W. 4 Street, and 301 and 317 N. Main Street, Pueblo, CO 81003
commonly referred to as “the Pope Block” from the PEDCO Foundation.
BACKGROUND:
The Property was acquired from QualMed, Inc., a Delaware corporation, and Foundation Health
Systems, Inc., a Delaware corporation, on August 5, 1999 when title to the Property was placed
in the name of the PEDCO Foundation. Since 1999, the Foundation has leased portions of the
Property to various tenants, including Receivables Management Services, Inc., who have
entered into employment agreements with the City. The Foundation is not able to pay the
operating expenses of the Property and wishes to transfer ownership of the Property to the City.
Ownership of the Pope Block will require the City to hire a property manager
FINANCIAL IMPLICATIONS:
Under the proposed Management Agreement, Mr. Clark will receive a monthly management fee
of $1,500. The agreement also provides that Mr. Clark is entitled to receive a leasing fee (equal
to 6% of the gross rent) for new tenants who locate their businesses in the Pope Block. Under
the Criteria Ordinance found at Sec. 14-4-85.1 of the Municipal Code, such expenses would be
eligible for reimbursement from the 1/2 cent sales tax fund.
BOARD/COMMISSION RECOMMENDATION:
Not applicable.
STAKEHOLDER PROCESS:
Not applicable.
ALTERNATIVES:
Maintenance of the status quo in which the Pope Block continues to be owned by the PEDCO
Foundation and the Foundation’s net operating losses are paid by the City.
RECOMMENDATION:
Approval of this Resolution.
Attachments:
Proposed Resolution and proposed Management Agreement with Barclay Clark.
PROPERTY MANAGEMENT AGREEMENT
This Property Management Agreement(this "Agreement") is made this 22nd day of September, 2014,
between the City of Pueblo, a Colorado municipal corporation organized under the laws of the State
of Colorado, having its principal office at 200 S. Main Street, Pueblo, CO 81003 ("Owner"), and
Barclay Clark, having his principal office at 511 W. 29th Street, Pueblo, CO 81003 ("Manager").
In consideration of the mutual benefits and obligations set forth in this Agreement, the parties agree
as follows:
SECTION ONE. APPOINTMENT AND TERM
Appointment.
1.1. Appointment. Owner appoints Manager to manage the office building (and related land and
other improvements) located at 310 Court Street, 220 W. 4ch Street and 301 and 317 N. Main Street,
Pueblo, CO 81003 (Parcel No. 536126001) commonly referred to as the "Pope Block Building" (the
"Property").
Term.
1.2 Term. This Agreement is for a term (the "Term") of one (1) year commencing on October 1,
2014 and ending on September 30, 2015. This Agreement shall then automatically renew and
continue in full force and effect for successive periods of one (1) year, unless sooner terminated
pursuant to the following paragraph 1.3.
Termination.
1.3. Termination. Both Owner and Manager agree that this Agreement shall terminate upon the
earlier of(a) the closing of a sale, transfer or exchange by Owner of Owner's entire interest in the
Property or its right to collect the income from the Property or (b) sixty (60) days' prior written
notice of such termination from either party.
Independent Contractor.
1.4. Independent Contractor. Owner retains Manager as an independent contractor to manage the
Property. Manager shall be responsible for hiring contractors and determining methodology for
management in accordance with this Agreement. Except in emergency situations, Manager's
authority to act on behalf of Owner is limited to that which is expressly delegated in this Agreement.
SECTION TWO. MANAGEMENT
Manager's Duties.
2.1. Manager's Duties. With regard to management of the Property, Manager agrees, at the cost and
expense of Owner,to:
2.1.1. Manage and operate the Property in a commercially reasonable manner consistent
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with local industry practices;
2.1.2. Enforce all leases with tenants of the Property in accordance with their terms
(provided that Owner shall execute all leases);
2.1.3. Execute service and other agreements which Manager deems necessary to provide for
the maintenance and operation of the Property subject to the Budgetary Limitations
(as defined below in this Agreement) and Major Decisions (as defined below in this
Agreement), it being understood and agreed that all such service agreements shall be
executed by Manager;
2.1.4. Notify Owner of any matter which in the opinion of Manager is material to the
operation of the Property;
2.1.5. Supervise the repair and maintenance of the Property subject to the Budgetary
Limitations and Major Decisions; and
2.1.6. Provide for the normal maintenance and repair as provided in the then current
Budget.
Budgetary Process.
2.2. Budgetary Process. With regard to budgetary matters and Property expenditures, Manager
agrees, for Owner's account, to:
2.2.1. Prepare and submit a budget and operating plan to Owner for approval for each
calendar year during the term of this Agreement ("Budget and Operating Plan"); and
2.2.2. Implement and incur the obligations and expenditures provided for in the Budget and
Operating Plan. Manager shall not incur any obligation or expend any sum which
would exceed that provided for in any approved Operating Budget except to the
extent approved by the Owner("Budgetary Limitations").
Accounting and Reporting.
2.3. Accounting and Reporting. Manager agrees to:
2.3.1. Keep and maintain books of accounts and records with regard to management of the
Property(such records and accounts shall be Owner's property); and
2.3.2. Provide monthly financial reports in the manner and format requested by the Owner.
Collection and Disbursements.
2.4. Collection and Disbursements. Manager agrees to:
2.4.1. Collect all rents, security deposits, late fees and other revenues from the Property and
deposit all such collections in an operating account (the "Operating Account") with a
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bank approved by Owner (Manager shall not commingle funds from the Property
with other funds of Manager); and
2.4.2. Disburse funds from the Operating Account to pay expenditures incurred in
accordance with the terms of this Agreement. If funds on hand are insufficient to pay
expenses, Manager shall notify Owner and Owner will deposit the required funds in
the Operating Account promptly.
General Standards.
2.5.1. Manager shall perform its duties under this Agreement in a commercially reasonable
manner consistent with local industry practices. With regard to handling of funds,
Manager shall account to Owner for all funds received and disbursed in accordance
with this Agreement.
2.5.2. Owner shall have the right to inspect and make copies of all books and records
pertaining to the Property upon twenty-four (24) hours' prior written notice to
Manager during the normal business hours of Manager.
Major Decisions
2.6. "Major Decisions" are defined to be a response, resolution or settlement of
circumstances which arise other than in the ordinary course of business. Examples
include, but are not limited to, damage to the Property, evictions, renovations to the
Property, construction activities on the Property, rent abatement or other concessions
given to new or existing tenants. Manager agrees that all Major Decisions shall be
made by the Owner.
Related Party Service.
2.7 Related Party Service. If any service provided with respect to the Property is to be provided
by a party affiliated with Manager, Manager shall notify Owner of this fact prior to acquiring such
service and shall obtain Owner's express approval before proceeding with such service.
SECTION THREE. LEASING
Manager shall have the exclusive engagement for leasing available space to new tenants at the
Property. All new leases or extensions of existing leases shall be signed by the Owner. Manager also
shall be responsible for administering all existing leases relating to the Property. Manager's specific
leasing duties shall be established by Owner from time to time.
SECTION FOUR. COMPENSATION
Management Fee.
4.1. Management Fee. For management services under this Agreement, Manager shall be paid a
monthly fee of$1,900.00.
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Fee for New Leases from New Tenants.
4.2. Fee. For any new lease from a new tenant at the Property obtained by Manager,
Manager shall be paid by Owner a fee equal to five percent (5%) of the gross rent to
be paid by a new tenant pursuant to a new lease.
Payment.
4.3. Payment. The Management Fee shall be payable monthly. Any New Lease Fee shall
be paid when the new tenant begins occupancy at the Property. All such fees shall be
payable out of the Operating Account or to the extent not paid out of the Operating
Account, paid by Owner to Manager when due.
SECTION FIVE. INSURANCE AND INDEMNIFICATION
Insurance.
5.1. Insurance. Owner shall insure the Property against loss by fire or other casualty. In addition to
property insurance, Owner shall also maintain general liability insurance for the Property. It is
understood and agreed that such insurance shall not cover the errors or omissions of Manager.
Indemnification.
5.2. Indemnification. Owner shall indemnify, defend, and hold Manager harmless from and against
all loss, costs, expenses, claims, demands, or legal proceedings (including costs, expenses, and
reasonable attorneys' fees) of any kind or nature related to the Property and the management of the
Property, except with respect to claims arising out of Manager's gross negligence, or willful or
intentional misconduct. Manager shall indemnify, defend and hold Owner harmless from and against
all loss, costs, expenses, claims, demands, or legal proceedings (including costs, expenses, and
reasonable attorneys' fees) due to the gross negligence or willful or intentional misconduct of
Manager. The terms and conditions of this paragraph 5.2 shall survive the termination or expiration
of this Agreement.
SECTION SIX. DEFAULT; REMEDIES
If either party defaults in performance of any of its obligations under this Agreement, which default
continues for a period of thirty (30) days after receipt of written notice of the default, then the
nondefaulting party may immediately terminate this Agreement by written notice to the other party
and the nondefaulting party may seek an action against the defaulting party for actual damages only
(and not for consequential damages, special damages, punitive damages or lost profits). If within the
thirty-day period noted above, the defaulting party diligently pursues a cure of the default, the
nondefaulting party will grant a thirty-day extension during which it will not terminate this
Agreement, so long as defaulting party continues to diligently pursue a cure.
SECTION SEVEN. DUTIES UPON TERMINATION OR EXPIRATION
Manager's Duties.
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7.1. Manager's Duties. Upon termination or expiration of this Agreement, Manager shall promptly
deliver to Owner complete copies of all books and records maintained by Manager for the Property
and all funds in possession of Manager belonging to Owner or received by Manager with regard to
the Property. Any unpaid obligations incurred by Manager during the term of this Agreement and
related to the operation of the Property shall become the obligation of and be payable by Owner.
Owner's Duties.
7.2. Owner's Duties. Owner shall compensate Manager for all fees earned under this Agreement
through the date of termination.
SECTION EIGHT. STATE-IMPOSED MANDATES PROHIBITING
ILLEGAL ALIENS FROM PERFORMING WORK
8.1. At or prior to the time this Agreement is executed, Manager shall submit to the Owner its
certification that it does not knowingly employ or contract with an illegal alien who will perform
work under this Agreement and that the Manager will participate in either the "E-Verify Program"
created in Public Law 208, 104th Congress, as amended and expanded in Public Law 156, 108th
Congress, as amended, that is administered by the United States Department of Homeland Security
or the "Department Program" established pursuant to §8-17.5-102(5)(c) C.R.S. that is administered
by the Colorado Department of Labor and Employment in order to confirm the employment
eligibility of all employees who are newly hired for employment to perform work under this
Agreement.
8.2. Manager shall not:
8.2.1. Knowingly employ or contract with an illegal alien to perform work under this
Agreement;
8.2.2. Enter into an Agreement with a contractor that fails to certify to Manager that the
contractor and subcontractors, if any, does not knowingly employ an illegal alien to
perform work under this Agreement.
8.3. The following state-imposed requirements apply to this Agreement:
8.3.1. The Manager shall confirm the employment eligibility of all employees who are
newly hired for employment to perform work under this Agreement through
participation in either the E-Verify Program or Department Program.
8.3.2. The Manager is prohibited from using either the E-Verify Program or Department
Program procedures to undertake pre-employment screening of job applicants while
this Agreement is being performed.
8.3.3. If the Manager obtains actual knowledge that a contractor or subcontractor
performing work under this Agreement knowingly employs or contracts with an
illegal alien,the Manager shall:
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A. Notify the contractor or subcontractor and the Owner within three (3) days
that the Manager has actual knowledge that the contractor or subcontractor is
employing or contracting with an illegal alien; and
B. Terminate the contract or subcontract if within three (3) days of receiving the
notice required above the contractor or subcontractor does not stop employing
or contracting with the illegal alien; except that the Manager shall not
terminate the contract or subcontract with the contractor or subcontractor if,
during such three (3) days, the contractor or subcontractor provides
information to establish that the contractor subcontractor has not knowingly
employed or contracted with an illegal alien.
8.3.4. Manager is required to comply with any reasonable request by the Colorado
Department of Labor and Employment (hereinafter referred to as "CDLE") made in
the course of an investigation that CDLE is undertaking pursuant to its authority
under §8-17.5-102(5), C.R.S.
8.4. Violation of this Section by the Manager shall constitute a breach of Agreement and grounds
for termination.
8.5. As used in this Section, the terms "contractor" and "subcontractor" shall mean any contractor
or subcontractor of Manager rendering services within the scope of this Agreement.
SECTION NINE. PERA LIABILITY.
Manager shall reimburse the Owner for the full amount of any employer contribution required to be
paid by the City of Pueblo to the Public Employees' Retirement Association ("PERA") for salary or
other compensation paid to a PERA retiree performing contracted services for the Owner under this
Agreement. The completed PERA form shall be attached as part of this signed Agreement.
SECTION EIGHT. MISCELLANEOUS PROVISIONS
Notices.
10.1. Notices. All notices given under this Agreement shall be made in writing and given to the
addressee at the address specified at the top of this Agreement or such other address specified by
notice given pursuant to this paragraph. Notices shall be given by certified mail, return receipt
requested, or by hand delivery, and shall be effective upon receipt at the address of the addressee.
Assignment.
10.2. Assignment. This Agreement shall not be assigned by Manager without the prior written
consent of the Owner, which consent may be granted, denied, or conditioned in Owner's sole and
absolute discretion.
Governing Law and Venue.
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10.3. Governing Law and Venue. This Agreement shall be governed by the laws of the State of
Colorado. Venue for any action arising under this Agreement or for the enforcement of this
Agreement shall be in a state court with jurisdiction located in Pueblo County, Colorado. To the
maximum extent permitted by law, each party to this Agreement waives its right to a jury trial.
Waiver of Subrogation.
10.4. Waiver of Subrogation. To the extent that Owner or Manager are compensated by insurance
for damages sustained by them as a result of any damage to the Property, each party waives its right
of recovery against the other and agrees that no party shall have any right of recovery against the
other by way of subrogation or assignment, and each party shall take steps to provide that the
insurance policy provides for same.
Entire Agreement; Third-Party Beneficiaries.
10.5. Entire Agreement; Third-Party Beneficiaries. This Agreement represents the entire
agreement between Owner and Manager with regard to management of the Property and all prior
agreements are superseded by this Agreement. This Agreement is for the sole benefit of Owner and
Manager and no other party is benefited by this Agreement.
Binding Effect.
10.6. Binding Effect. This Agreement shall bind and inure to the benefit of the parties to this
Agreement and their respective heirs, executors, administrators, legal representatives, successors and
assigns, except as this Agreement states otherwise.
Time of Essence.
10.7. Time of Essence. Time is of the essence with respect to this Agreement.
No Waiver.
10.8. No Waiver. No delay or failure to exercise any right under this Agreement, nor a partial or
single exercise of a right under this Agreement, will waive that right or any other right under this
Agreement.
Modification.
10.9. Modification. No modification of this Agreement shall be valid unless in writing and signed
by both parties.
Counterparts.
10.10. Counterparts. This Agreement and all other copies of it are considered one agreement. This
Agreement may be executed concurrently in one or more counterparts, each of which will be
considered an original, but all of which together constitute one instrument.
Severability.
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10.11. Severability. If a court of competent jurisdiction holds any one or more of the provisions of
this Agreement to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or
unenforceability will not affect any other provision of this Agreement, which will be construed as if
it had never contained the invalid, illegal, or unenforceable provision.
Attorneys' Fees.
10.12. Attorneys' Fees. If any action at law or in equity, including any action for declaratory relief,
is brought to enforce or interpret this Agreement, the prevailing party is entitled to recover
reasonable attorneys' fees and costs from the other party in addition to any other relief that may be
awarded. The court may award attorneys' fees and costs in a trial of the action or in a separate action
brought to litigate the issue of attorneys' fees and costs.
Relationship of the Parties
10.13. Relationship. Nothing in this Agreement is intended to, or shall be deemed to constitute, a
partnership or joint venture between the parties, or to create any agency or partner relationship
between the parties. Neither party shall hold itself out as a partner, joint venture, agent, or
representative of the other under this Agreement. This Agreement does not constitute a lease or
create any tenancy or possessory interest in Manager. Manager's rights hereunder may be terminated
in the manner provided in this Agreement without proceeding as required in the Forcible Entry and
Detainer Act.
TABOR Compliance
10.14. No Multi-Fiscal Year Obligation on City. This Agreement is expressly made subject to the
limitations of the Colorado Constitution. Nothing herein shall constitute, nor deemed to constitute,
the creation of a debt or multi-year fiscal obligation or an obligation of future appropriations by the
City Council of Pueblo, contrary to Article X, § 20 Colorado Constitution or any other constitutional,
statutory or charter debt limitation. Notwithstanding any other provision of this Agreement, with
respect to any financial obligation of the Owner which may arise under this Agreement in any fiscal
year after 2014, in the event the budget or other means of appropriations for any such year fails to
provide funds in sufficient amounts to discharge such obligation, such failure shall not constitute a
default or breach of this Agreement by the Owner. The obligations of the Owner under this
Agreement are subject to annual appropriations made for that purpose by the City Council of Pueblo.
The parties have executed this Property Management Agreement at Pueblo, CO the day and year first
set forth above.
Barclay Clark
STATE OF COLORADO )
) SS.
COUNTY OF PUEBLO )
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The foregoing instrument was acknowledged before me on this pg `day of 41tryttP(
2014, by Barclay Clark.
Witness my official hand and seal.
My Commission Expires: ALA ell �q i 96111
JEAN'E R.GONLHLES , /
NO CARY PUBLIC , )
STATE OF COLORADO ' ,fir
NOTARY ID 20134016224 ary Public ,
MY COMMISSION EXPIRES MARCH 29,2017
Attest: Pueblo, a Municipal Corporation
City lerk /
By 2�I7dtak- Imo. ,
r�
President of the City Council
Y-.:__[SEAL]
APPROVED AS TO FORM: Date: 7 -- a5, 144
.-: a4-1,;..i. -'. [.<701/....a.1. --
City Attorney
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