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Home My WebLink About09428 ORDINANCE NO. 9428 AN ORDINANCE APPROVING AN AMENDMENT TO A LEASE AGREEMENT AND AN AMENDMENT TO AN EMPLOYMENT AGREEMENT AND BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND ACTIVARMOR, LLC, A COLORADO LIMITED LIABILITY COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE SAID AMENDMENTS BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Amendment to Lease Agreement dated February 25, 2019 between the City of Pueblo, a Colorado municipal corporation (“City”) and ActivArmor, LLC, a Colorado limited liability company (the “Company”), a copy of which is attached hereto (“Lease Amendment”), having been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver the Lease Amendment in the name of the City and the Acting City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2. The Amendment to Employment Agreement dated February 25, 2019 between the City and the Company, a copy of which is attached hereto (“Employment Amendment”), having been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver the Employment Amendment in the name of the City and the Acting City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3. The officers and staff of the City are authorized and directed to perform any and all acts consistent with this Ordinance and the attached amendments which are necessary or desirable to implement the transactions described therein. SECTION 4. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on February 25, 2019 . Final adoption of Ordinance by City Council on March 11, 2019 . President of City Council Action by the Mayor: Approved on March 13, 2019 . ☒ □ Disapproved on based on the following objections: _ Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST Acting City Clerk City Clerk’s Office Item # R-2 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: February 25, 2019 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, Acting City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AN AMENDMENT TO A LEASE AGREEMENT AND AN AMENDMENT TO AN EMPLOYMENT AGREEMENT AND BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND ACTIVARMOR, LLC, A COLORADO LIMITED LIABILITY COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE SAID AMENDMENTS SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign Amendments to an Employment Agreement and Lease Agreement with ActivArmor, LLC, a Colorado limited liability company (the “Company”). PREVIOUS COUNCIL ACTION: On March 18, 2018, by Resolution No. 13921, City Council authorized the transfer of $250,000 from the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund, for the benefit of the Company as follows:  Fifty thousand dollars ($50,000) for the purchase of equipment to be used and installed at Company’s manufacturing facility;  A rent abatement of Two Hundred Thousand Dollars for the lease of section “1 West” of the Pope Block Building, located at 317 North Main Street in downtown Pueblo and the payment of the Company’s rent at the Business and Technology Center, located at 301 N. Main Street in downtown Pueblo. BACKGROUND: The Company’s business plan, as it pertains to Pueblo County, is centered on the manufacture and sale of 3-D printed personalized body casts and splints for distribution outside of Pueblo County. The Company has agreed to employ not less than twenty-three (23) full-time employees at its manufacturing and distribution center. The Company is currently operating out of the Business and Technology Center, located at 301 N. Main Street in downtown Pueblo. The Company wishes to move up the date of its planned relocation to the Pope Block Building and also wants to rent space in the “2 East” section of the Pope Block Building rather than the “1 West” section as previously planned. The changes require conforming amendments to the previously approved Lease Agreement and Employment Agreement. FINANCIAL IMPLICATIONS: None. Under the two proposed amendments, the Company will not receive additional funds from the City of Pueblo. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: The Company’s plans to expand its operations in downtown Pueblo have changed. If this Ordinance is not approved, the Company’s new timetable and location will be inconsistent with the existing Lease Agreement and Employment Agreement. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. Attachments: Proposed Ordinance; proposed Amendment to Lease Agreement; proposed Amendment to Employment Agreement. AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment to Employment Agreement (the "Amendment") is made as of this 25th day of February, 2019, by and between the City of Pueblo, a Colorado municipal corporation ("Landlord")and ActivArmor, LLC, a Colorado limited liability company ("Tenant"). Recitals WHEREAS, Landlord and Tenant entered into that certain Employment Agreement dated March 12, 2018 (the "Agreement"); and WHEREAS, Landlord and Tenant desire to modify the Agreement pursuant to the provisions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises set forth herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Landlord and Tenant hereby agree to the following: Agreement 1. The definition of"Facility" contained in Section 1 of the Agreement shall be deleted in its entirety and replaced with the following: "Facility" means the portion of either 301 N. Main St. Ste 205 (or other suite as agreed to by the Pueblo Economic Development Corporation)or the Pope Block Building wherein Company conducts its business operations. 2. The definition of"Lease" contained in Section 1 of the Agreement shall be deleted in its entirety and replaced with the following: "Lease" means leases and amendments thereto between the Company and the City and leases and amendments thereto between the Company and the Pueblo Economic Development Corporation. 3. Section 2 (a) 2 of the Agreement shall be deleted in its entirety and replaced with the following: 2. Grant the Company a rent abatement of Two Hundred Thousand Dollars ($200,000). 4. Section 10 (a) 2 of the Agreement shall be deleted in its entirety and replaced with the following: (a) if to City, Mayor, City of Pueblo, 1 City Hall Place, 2id Floor, Pueblo, Colorado, 81003, with copy to City Attorney, 1 City Hall Place, 3rd Floor, Pueblo, Colorado, 81003, or 1 5. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 6. Ratification. Except as expressly stated herein, the Agreement shall remain in full force and effect. If there is any conflict between the Agreement and the terms of this Amendment, the terms of this Amendment shall control. 7. Counterparts. This Amendment may be executed in one or more counterparts,each of which shall be deemed an original and all of which shall constitute one and the same document with the same effect as if all parties had signed the same original. The parties further agree that transmission of this Amendment by telecopy or via email in a PDF format shall be deemed transmission of the original Amendment for all purposes. IN WITNESS WHEREOF, the parties to this Amendment have set forth their hand, to be effective upon final approval by the Mayor and City Council. City of Pueblo, Colorado a Colorado municipal corporation By: Wt.A ! Name: Nicholas A. Gra Isar Title: Mayor ativvi-up Attested by:4- C La Acting City Cler Approved as to form: .6v1,‘A.,,) 1—< 7014d-g, Name: Daniel C. Kogovsek C Title: City Attorney COMPANY: ActivArmor, LLC a Colorado lilni eJ liabi ' onpany t ' Name: Diana E. Hall Title: Manager 2 PERSONAL GUARANTY The Continuing Guaranty which I signed on or about March 12,2018 is hereby ratified and shall remain in full force and effect and is applicable to this Amendment. I personally guarantee the payment of the full amount of(a)Company's Repayment Obligation; and(b) Company's other financial obligations as described in and in accordance with the Agreement and this Amendment. Diana E. Ha , individually STATE OF COLORADO ) ) ss. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me this t 3 day of TeJD 2019 by Diana E. Hall as Manager of ActivArmor, LLC, a Colorado limited liability company. Witness my hand and official seal. My commission expires: O3-I Q f dO -S C/1 ‘ [ SEAL] % �1 ' BRITTNY MCALISTER Notary Public NOTARY PUBLIC-STATE OF COLORADO NOTARY ID 20154004609 MY COMMISSION EXPIRES FEB 2, 2023 3 AMENDMENT TO LEASE AGREEMENT This Amendment to Lease Agreement (the "Amendment") is made as of this 25th day of February, 2019, by and between the City of Pueblo, a Colorado municipal corporation ("Landlord") and ActivArmor, LLC, a Colorado limited liability company ("Tenant"). Recitals WHEREAS, Landlord and Tenant entered into that certain Lease dated March 12, 2018 (the "Agreement"); and WHEREAS, Landlord and Tenant desire to modify the Agreement pursuant to the provisions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises set forth herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Landlord and Tenant hereby agree to the following: Agreement 1. Articles 1,2 and 3 of the Agreement shall be deleted in their entirety and replaced with the following: ARTICLE 1 BASIC DATA Each reference in this Lease to any of the terms contained in this Article or otherwise defined in this Agreement will be construed to incorporate the definitions or data stated under that term, defined as follows: 1.1. Building: Pope Block Building, 317 North Main Street, Pueblo, CO 81003 1.2. Leased premises: Rentable square feet(RSF) located section"2 East"of the Building, as follows: YEAR SQUARE FEET 1 1,260 2 TBD 3 TBD 4-10 TBD 1.3. Term: Initial term: 120 months Extended term: Two (2) five (5) year renewal options 1 1.4. Commencement date: February 1, 2019, subject to the availability of the space descried herein. Nothing contained herein requires Landlord to hold the availability of the facility for the Tenant. 1.5. Base rent: $12 per square foot, subject to the abatements described in Article 4 below. Tenant also agrees to pay its pro-rata share of Building's Operating Expenses as described in Article 4 below. 1.6. Renewal option: Tenant only upon written notice 90 days prior to termination date 1.7. Tenant improvement allowance: None 1.8. Agency disclosure and commission: None 1.9. Landlord address: Attn: Mayor 1 City Hall Place, 2nd Floor Pueblo, CO 81003 Phone: (719) 553-2655 1.10. Landlord's property management representative: Barclay Clark Re/Max 511 West 29th Street Pueblo, CO 81008 Phone: (719) 585-8716 1.11. Tenant address: Attn: Diana E. Hall,4400 Rawhide Road, #154, Pueblo, CO 81008 ARTICLE 2 LEASE OF PREMISES 2.1. Leased Premises. In consideration of the mutual covenants and agreements herein contained, Landlord hereby leases to Tenant the premises of approximately 1,260 rentable square feet("RSF") located in the Building(the"Leased Premises")together with all appurtenances. The Leased Premises are located in the following sections of the Building: 2 East. Notwithstanding anything to the contrary contained in this Agreement, neither the size nor location of the Leased Premises may be modified during the first year of occupancy without Tenant's prior written consent. 2.2. Common Areas. Tenant shall have, as appurtenant to the Leased Premises, the non- exclusive right to use, and permit its invitees to use in common with other tenants of the Building, public lobbies, hallways, stairways, elevators, walkways necessary for access to Leased Premises, 2 loading areas, pedestrian sidewalks and other areas or facilities which are in the Building which are public in nature. ARTICLE 3 TERM 3.1. Commencement Date; Term. This Lease shall have a ten (10) year term ("Term"). The Lease Term begins (the "Commencement Date") on February 1, 2019 and terminates on January 31, 2029 (the "Termination Date"). 3.2. Options. Provided Tenant is in full compliance with terms and conditions of this Lease, Tenant may extend the Term for an Extended Term as follows. Tenant may exercise two (2), five (5) year renewal options with 90 days prior notice to the Landlord. The rent and other terms and conditions of this Lease will remain unchanged for the renewal options. 2. Section 4.1 of the Agreement shall be deleted in its entirety and replaced with the following: 4.1. Base Rent. Tenant's base rent for the Term of this Lease is Twelve Dollars ($12.00) per square foot, subject to the following rent abatements: YEAR SQUARE FEET RENT PER RENT BASE RENT RENTED SQUARE FOOT ABATED OWED 1 1,260 $12.00 $15,120.00 $0 2 TBD $12.00 Remaining TBD balance of $200,000 rent abatement commitment 3 TBD $12.00 Remaining TBD balance of $200,000 rent abatement commitment 4-10 TBD $12.00 Remaining TBD balance of $200,000 rent abatement commitment 2. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 3. Ratification. Except as expressly stated herein, the Agreement shall remain in full force and effect. If there is any conflict between the Agreement and the terms of this Amendment, the terms of this Amendment shall control. 3 4. Counterparts. This Amendment may be executed in one or more counterparts,each of which shall be deemed an original and all of which shall constitute one and the same document with the same effect as if all parties had signed the same original. The parties further agree that transmission of this Amendment by telecopy or via email in a PDF format shall be deemed transmission of the original Amendment for all purposes. IN WITNESS WHEREOF, the parties to this Amendment have set forth their hand, to be effective upon final approval by the Mayor and City Council. LANDLORD City of Pueblo, Colorado a Colorado municipal corporation • By: _____r Name: icholas A. Grade ar Title: Mayor Attested by:,__aity)d.„ Acting City Clerk `J Approved as to form: . 4kytoNd.‘4d1 i—<57(2 Name: Daniel C. Kogovsek Title: City Attorney TENANT: ActivArmor, LLC -1 a Colorado limit d 'ability co By Nam e Diana E. Hall Title: Manager 4 PERSONAL GUARANTY The Continuing Guaranty which I signed on or about March 12,2018 is hereby ratified and shall remain in full force and effect and is applicable to this Amendment. I personally guarantee the payment of the full amount of (a) the Tenant's Base Rent Obligation; (b) the Tenant's Obligation to Pay a Pro Rata Portion of the Operating Expenses of the Pope Block Building; and (c)Tenant's other financial obligations as described in and in accordance with the Agreement and this Amendment. Diana E.Hall, individually STATE OF COLORADO ) ) ss. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me this 13 day of , 2019 by Diana E. Hall as Manager of ActivArmor, LLC, a Colorado limited liability company. Witness my hand and official seal. My commission expires: Oc /U / a oat �� c( SEAL Notary Public BRITTNY MCALISTER NOTARY PUBLIC-STATE OF COLORADO NOTARY ID 20154004609 MY COMMISSION EXPIRES FEB 2,2023 5