HomeMy WebLinkAbout09440ORDINANCE NO. 9440
AN ORDINANCE APPROVING A LEASE BETWEEN THE
CITY OF PUEBLO, A COLORADO MUNICIPAL
CORPORATION AND IQOR US, INC., A DELAWARE
CORPORATION, FOR THE LEASE OF CITY OWNED
PROPERTY LOCATED AT 317 NORTH MAIN STREET,
PUEBLO, COLORADO 81003 AND AUTHORIZING THE
MAYOR TO EXECUTE SAID LEASE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Lease dated March 1, 2019 between the City of Pueblo, a Colorado municipal
corporation and iQor US Inc., a Delaware corporation, a copy of which is attached hereto,
having been approved as to form by the City Attorney, is hereby approved. The Mayor is
authorized to execute and deliver the lease 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 officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Ordinance and the attached Lease which are necessary or
desirable to effectuate the transactions described therein.
SECTION 3.
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 March 11, 2019 .
Final adoption of Ordinance by City Council on March 25, 2019 .
President of City Council
Action by the Mayor:
Approved on March 28, 2019
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Disapproved on based on the following objections:
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Mayor
Action by City Council After Disapproval by the Mayor:
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Council did not act to override the Mayor's veto.
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Ordinance re-adopted on a vote of , on
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Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
Acting City Clerk
City Clerk’s Office Item # R-7
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: March 11, 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 A LEASE BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION AND IQOR US, INC., A DELAWARE
CORPORATION FOR THE LEASE OF CITY OWNED PROPERTY LOCATED AT
317 NORTH MAIN STREET, PUEBLO, COLORADO 81003 AND AUTHORIZING
THE MAYOR TO EXECUTE SAID LEASE
SUMMARY:
Attached is an Ordinance approving and authorizing the Mayor to sign a lease with iQor US Inc.
a Delaware corporation.
PREVIOUS COUNCIL ACTION:
On November 23, 2015, by Resolution No. 13341, City Council approved a Lease with iQor for
approximately 41,379 square feet of the Pope Block Building located at 317. N. Main Street in
downtown Pueblo.
BACKGROUND:
iQor wishes to expand its operations and desires to rent 12,198 square feet of additional space
located on the third floor west of the Pope Block Building for a three (3) year term. In addition,
iQor has requested an option to renew the lease for an additional three (3) years.
FINANCIAL IMPLICATIONS:
iQor’s base rent for the Term of this Lease shall be as follows:
Dates Cost per Square Foot
03/01/19 to 02/29/20 $4.00
03/01/20 to 02/28/21 $5.00
03/01/21 to 02/28/22 $6.00
Should iQor exercise its option to renew this Lease for an additional three (3) year term, iQor’s
base rent shall be as follows:
Dates Cost per Square Foot
03/01/22 to 02/28/23 $7.00
03/01/23 to 02/29/24 $8.00
03/01/24 to 02/28/25 $9.00
The Pope Block Building in downtown Pueblo contains approximately 101,992 square feet of net
rentable space. iQor currently rents 41,379 square feet under the 2015 lease. Under the proposed
lease, iQor has agreed to rent an additional 12,978 square feet. Under both leases, iQor has
agreed to pay its proportional share of the Building’s Common Area Maintenance (CAM))
expenses. In addition to base rent, iQor has agreed to pay its pro-rata share (approximately 53%
percent) of the following CAM expenses:
Maintenance and management of the building
Building utilities
Repair of the building
Building property taxes
Building use taxes not abated through the Pueblo Urban Enterprise Zone
Building insurance
Building fire systems
However, due to the uncertainty and volatility of the call center industry, iQor has the option of
cancelling both leases and vacating the Pope Block Building with only sixty days prior notice to
the City.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If this Ordinance is not approved, iQor may move or close its call center in downtown Pueblo.
RECOMMENDATION:
Approve the Ordinance.
Attachments:
Proposed Ordinance and Lease.
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March 25, 2019
LEASE
This Lease (the "Lease") is made as of this 1st day of April, 2019,by and between City
of Pueblo, Colorado, a Colorado municipal corporation("Landlord") and iQor US Inc., a
Delaware for-profit corporation("Tenant").
ARTICLE 1
BASIC DATA
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Each reference in this Lease to any of the terms contained in this Article or otherwise
defined in this Lease will be construed to incorporate the definitions or data stated under that
term, defined as follows:
1.1. Building: 317 North Main Street, Pueblo, CO 81003
1.2. Leased premises: Approx. 12,978 square feet located in the 3rd Floor West of the
Building
1.3. Term: Initial term: 35 months
1.4. Commencement date: April 1, 2019
1.5. Renewal option: One (1)three (3)year renewal option
1.6. Tenant improvement allowance: None
1.7. Agency disclosure and commission: Barclay Clark is acting as Landlord's Agent.
CBRE, Inc. is acting as Tenant's Agent, represented by Brad T. Bird and Jared May. Landlord's
Agent's commission, if any, will be paid by Landlord. Tenant's Agent's commission, if any,
will be paid by Tenant.
1.8. Landlord address:
Attn: Mayor
1 City Hall Place, rd Floor
Pueblo, CO 81003
Phone: (719) 553-2655
1.9 Landlord's property management representative:
Barclay Clark
317 N. Main St.
Pueblo, CO 81003
Phone: (719) 585-8716
1.10. Tenant address:
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iQor US Inc.
Attn: General Counsel
200 Central Ave., Suite 700,
St. Petersburg, FL 33701
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 12,978 square feet
located in the Building(the "Leased Premises")together with all appurtenances. The Leased
Premises are located in the following sections of the Building: third floor west. Notwithstanding
anything to the contrary contained in this Lease, neither the size nor location of the Leased
Premises may be modified during the Term without Tenant's prior written consent.
2.2. Right of First Refusal. During the Term of the Lease, Tenant shall have an
ongoing Right of First Refusal on the unleased space adjacent and contiguous to the Leased
Premises.
2.3 Common Areas. Tenant shall have, as appurtenant to the Leased Premises,the non-
exclusive right to use, and permit its invitees and employees to use in common with other tenants
of the Building,public lobbies, hallways, stairways, elevators, walkways necessary for access to
Leased Premises, 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 thirty-five (35) month term
("Term"). The Lease Term begins on April 1, 2019 (the "Commencement Date") and terminates
on February 28, 2022 (the"Termination Date"). 3.2. Option to Renew: Tenant shall have
one (1)three (3) year renewal option to extend this Lease from March 1, 2022 to February 28,
2025 (the"Renewal Option"). Tenant shall have the right to exercise the Renewal Option with
ninety (90)days' prior notice to Landlord at the same terms and conditions as this Lease.
3.3. Termination Without Cause Option: Tenant shall have the continuing option to
cancel this Lease, as it pertains to all, or any portion of the Leased Premises, for any reason
whatsoever,by providing Landlord sixty(60) days prior written notice which shall specify the
termination date and the portion of the Leased Premises being vacated.
ARTICLE 4
RENT AND ADDITIONAL CHARGES
4.1. Base Rent. Tenant's base rent for the Term of this Lease shall be as follows:
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Dates Cost per Square Foot
04/01/19 to 02/29/20 $4.00
03/01/20 to 02/28/21 $5.00
03/01/21 to 02/28/22 $6.00
All payments of base rent due under this Lease shall be payable in advance on the first day of
each month and shall be paid and addressed to Landlord at: c/o Barclay Clark, 317 N. Main
Street, Pueblo, CO 81003 or at such other address as Landlord may designate to Tenant from
time to time.
4.1.1. Should Tenant exercise its Renewal Option to renew this Lease, Tenant's base
rent shall be as follows:
Dates Cost per Square Foot
03/01/22 to 02/28/23 $7.00
03/01/23 to 02/29/24 $8.00
03/01/24 to 02/28/25 $9.00
4.2. Tenant's Obligation to Pay a Pro Rata Portion of the Operating Expenses of the
Building. Commencing on the Commencement Date, and on the first day of each month
thereafter during the Term of this Lease, as an additional charge, Tenant must pay to Landlord
Tenant's estimated pro rata share of the Building's estimated Operating Expenses for the current
calendar year, based upon the actual Operating Expenses for the prior calendar year in the
manner of payment for the base rent described in Section 4.1 above. On or before March 1 of
each year during the Term of this Lease, beginning with the Commencement Date, Landlord
shall provide Tenant with documentation which demonstrates the Building's actual Operating
Expense for the prior calendar year, along with a calculation of the difference between Tenant's
estimated pro rata Operating Expense payments for such calendar year and the Tenant's actual s '
pro rata share of the Operating Expense for that calendar year. In the event of an underpayment,
Tenant shall pay the difference to Landlord or Landlord shall refund the overpayment to Tenant.
Notwithstanding the foregoing, if Landlord does not supply said documentation within one
hundred eighty (180)days after the end of each calendar year, Landlord shall have forfeited its
opportunity to seek reimbursement from Tenant for any underpayment such documentation
subsequently reveals,however such limitation does not act to waive Landlord's duty to supply
Tenant with said documentation within a reasonable time thereafter. In addition, Tenant shall
have the right, at its own cost to audit Landlord's records of Operating Expenses within forty-
five (45) days of receipt of said documentation and shall recover a reimbursement for any
expenses improperly accounted for and included in Operating Expenses. In the event such audit
reveals discrepancies which in the aggregate amount to more than ten percent(10%) different
than that previously reported by Landlord,then Landlord shall reimburse Tenant for all
reasonable costs associated with conducting said audit.
4.3. Operating expenses: NNN Expenses will cover the Tenant's pro rata share of the
following items:
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• Maintenance and Management of the Building
• Building Utilities
• Repair of Building
• Building Property Taxes
• Building use taxes
• Building Insurance
• Building Fire Systems
4.4. Operating expenses formula: Tenant shall pay its pro-rata share of the Operating
Expenses for the Building according to the following formula: square footage leased by the
Tenant divided by 101,992 square feet(net rentable space in the Building)times total Operating 4
Expenses.
4.5. Tenant's Tax Obligations. Tenant shall be solely responsible for the payment of its
own tax obligations and agrees that said obligations shall not be paid as part of the Building's
Operating Expenses. Tenant's own tax obligations include, but are not limited to, sales and use
taxes, personal property taxes and possessory interest real property taxes.
ARTICLE 5
USE !
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5.1. Use. Tenant may use the Leased Premises for general, executive, service, sales and
administrative office purposes, including as a telephone call center and including any uses .
incidental to any of the foregoing. Any change of use by the Tenant shall require the prior
written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned
or delayed.
5.2. Compliance with Laws. During the Term of this Lease, Tenant shall comply with
all applicable laws, rules, regulations and ordinances of all federal, state, county and municipal
authorities having jurisdiction over the Leased Premises or the Building. During the Term of this
Lease, Landlord shall comply with all applicable laws,rules, regulations and ordinances of all
federal, state, county and municipal authorities having jurisdiction over the Building.
ARTICLE 6
ALTERATIONS AND SIGNS
6.1. Tenant's Alterations. Alterations, installations, improvements, additions or other
physical changes to the Leases Premises shall not be made by the Tenant without the prior 7
written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned
or delayed.
6.2 Signage. The size, location, color and design of any sign placed by the Tenant on
the Leased Premises or Building, shall be subject to the Landlord's prior written approval,not to
be unreasonably withheld, conditioned or delayed.
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6.3 Liens. Tenant must keepthe Leased Premises and this Lease free from any
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mechanic's, materialman's, or similar liens or encumbrances, and any claims therefore for labor
or materials furnished Tenant. If Tenant fails to do so, Landlord may pay the amount or take
such other action as Landlord deems necessary to remove such claim, lien or encumbrance,
without being responsible for investigating the validity thereof The amount so paid and costs
incurred by the Landlord will be deemed additional rent under this Lease payable upon demand,
without limitation as to other remedies available to Landlord.
6.4. Surrender. On the Termination Date of this Lease, Tenant shall quit and surrender
the Leased Premises in substantially the same condition as they were on the Commencement
Date, reasonable wear and tear excepted. Tenant may remove, but shall not be required to
remove, any fixtures, alterations or improvements made to the Leased Premises, provided that
Tenant repairs any damage caused by such removal. Any items of personal property not 'u
removed by Tenant on the Termination Date of this Lease may be retained or disposed of by
Landlord, at Tenant's expense. '.
ARTICLE 7
INDEMNIFICATION AND INSURANCE
7.1. Landlord's Indemnity. Landlord shall defend, indemnify and save harmless Tenant
and its agents and employees against all costs (including, without limitation, reasonable
attorneys' fees), damages or claims whether for personal injury, bodily injury or property
damage, during the Term of this Lease, occurring in the Building, if caused by an act or omission
by Landlord or its agents or employees, arising out of Landlord's operations or Landlord's use or
occupancy of the Building.
7.2 Tenant's Indemnity. Tenant shall defend, indemnify and save harmless Landlord
and its agents and employees against all costs (including, without limitation,reasonable
attorneys' fees), damages or claims whether for personal injury, bodily injury or property
damage, during the Term of this Lease, occurring in the Building, if caused by an act or omission
by Tenant or its agents or employees, arising out of Tenant's operations or Tenant's use or
occupancy of the Building.
7.3 Landlord's Insurance.
7.3.1. Liability Insurance. During the Term of this Lease, Landlord must maintain
insurance covering Landlord's liability for ownership, maintenance and use of the Building,
including the Common Areas. Such insurance must provide limits of not less than $1 million
with respect to injury to any one person, $1 million with respect to any one occurrence and
$500,000 with respect to property damage arising out of any one occurrence.
7.3.2 Property Insurance. Landlord must maintain"all-risk"property insurance covering
the Building against loss or damage resulting from fire or other insurable loss.
7.4. Tenant's Insurance.
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7.4.1. Liability Insurance. During the Term, Tenant must maintain insurance covering
Tenant's liability for occupation and use of the Leased Premises and the Building, including the
Common Areas. Such insurance must provide limits of not less than$1 million with respect to
injury to any one person, $1 million with respect to any one occurrence and $250,000 with
respect to property damage arising out of any one occurrence.
7.4.2. Worker's Compensation Insurance. Tenant shall maintain and keep in force an all
employees compensation insurance policy as required under the laws of the State of Colorado.
7.5. Insurance Requirements. All insurance required to be carried by the parties _;!
hereunder shall be issued by responsible insurance companies qualified to do business in the
State of Colorado. The parties further agree to provide each other with copies of certificates of
insurance for all policies required.
7.6 Waiver of Subrogation. The parties to this Lease hereby release each other and their
respective officers, agents, managers, directors, and employees from any and all claims and
demands for loss, damages, expense or injury to any person or the Building or to personal
property or improvements which are caused by or result from any risk insured against under
insurance policies carried or required to be carried by the parties and in force at the time of any
such loss,to the extent such loss is covered by such parties' policies. The parties shall each
obtain from their respective insurers waivers of all rights of subrogation, which the insurer of one
party might have against the other party and Landlord and Tenant shall each indemnify the other
against any loss or expense, including reasonable attorneys' fees, resulting from the failure to
obtain such waivers of subrogation.
ARTICLE 8
ASSIGNMENT
8.1. Internal Assignments. Notwithstanding anything in this Lease to the contrary,
Tenant has the right to assign this Lease or sublet the Leased Premises, without Landlord's
consent, to a parent, subsidiary, or affiliate of Tenant,to a company that has been merged or
consolidated with Tenant, or to a company acquiring all or substantially all of Tenant's physical
assets at the Leased Premises.
8.2. Outside Assignment Requirements. It shall be necessary for Tenant to obtain
Landlord's prior, written consent to any other proposed assignment of this Lease or subletting of
the Leased Premises. However, Landlord's consent must not be unreasonably or unduly
withheld, conditioned, or delayed,provided, however,that Landlord may withhold consent
thereto if in the exercise of its sole judgment it determines that:
8.2.1. Financial Condition. The financial condition of the proposed assignee or subtenant
is not consistent with the extent of the obligations undertaken by the proposed assignment or
sublease; or
8.2.2. Proposed Use. The proposed use of the Leased Premises is not appropriate for the
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Building or in keeping with the character of the existing tenancies of the Building.
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ARTICLE 9
CASUALTY AND RESTORATION
9.1. Restoration. Upon any damage due to fire or other casualty, if such casualty results
in damage to more than 5%of the gross leasable area of the Building, Landlord may, in its sole
discretion, upon thirty (30)days written notice to Tenant after such casualty, terminate this
Lease. Landlord may also, in its sole discretion, undertake restoration of the Building and
complete such restoration, with due diligence, after such casualty.
9.2. Equitable Adjustment. Upon any damage due to fire or other casualty, whether or
not Landlord decides to undertake restoration of the Building,the parties agree that the Tenant's
obligation to pay base rent and a pro rata portion of the Operating Expenses of the Building shall
be equitably abated and apportioned from the date of such casualty until such repairs are
completed or until Tenant vacates the Leased Premises.
ARTICLE 10
DEFAULT AND REMEDIES
10.1. Tenant's Default. If Tenant(a) fails to make its monthly payment of Tenant's base
rent or pro rata portion of the Operating Expenses for more than 10 days after Tenant receives
notice of such failure from Landlord; or(b) fails to perform or observe any other agreement or
condition contained in this Lease, and such failure is not corrected within thirty (30) days after
Tenant receives notice from Landlord of such failure, then, in addition to all other remedies
available at law or in equity, Landlord has the right to terminate this Lease and recover
possession of the Leased Premises in the manner prescribed by law.
10.2. Landlord's Default. If Landlord fails to perform or observe any agreement or
condition contained herein, and such failure is not corrected within thirty (30) days after
Landlord receives notice from Tenant of such failure,then, in addition to all other remedies
available at law or in equity, Tenant has the right to terminate this Lease.
10.3. Disputes. In the event of an unresolved dispute between Landlord and Tenant
regarding the performance by either party of an obligation or condition of this Lease, as a
condition precedent to the filing of litigation, authorized representatives of Landlord and Tenant
will use good faith and commercially reasonable efforts to resolve such disputes.
ARTICLE 11
GENERAL PROVISIONS
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11.1. Notices. Notices, consents, and demands required or permitted to be given
hereunder must be in writing and be effective when received or refused, whether by hand
delivery,nationally recognized overnight courier(with evidence of receipt or refusal), or U.S.
Mail (return receipt requested),to the parties' respective Address stated in Article 1 of this
Lease, or to such other address as the parties designate by written notice to each other, and each
party may identify additional parties to receive copies of same.
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11.2. Holding Over. Should Tenant hold over in possession of the Leased Premises after
the expiration of the Term, as extended, such holding over shall not be deemed to extend the
Term or renew this Lease, but this Lease will continue as a tenancy from month to month upon
the terms and conditions stated herein.
11.3. Waiver/Remedies. The failure of Landlord or Tenant to insist upon strict
performance by the other of any of the provisions of this Lease or to exercise any option herein
conferred will not be deemed as a waiver or relinquishment for the future of any such provision
or option. Except as expressly provided otherwise herein, all rights and remedies provided for
herein or otherwise existing at law or in equity are cumulative, and the exercise of one or more
rights or remedies by either party shall not preclude or waive its right to the exercise of any or all
the others.
11.4. Partial Invalidity. If any provision of this Lease or the application thereof to any
person or circumstance is, at any time or to any extent, invalid or unenforceable,the remainder
of this Lease will not be affected thereby, and each such provision will be valid and will be tm
enforced to the fullest extent permitted by law.
11.5. Attorneys' Fees. In the case of any litigation among the parties under this Lease,
the prevailing party will be entitled to reimbursement for its reasonable costs, including
reasonable attorneys' fees, incurred in any such dispute.
11.6. Entire Agreement. This Lease contains the entire and exclusive agreement between
the parties relating to the Leased Premises and may not be modified except by written instrument
signed by the party to be bound thereby.
11.7. Venue and Waiver of Trial by Jury. In the event of any litigation arising under this
Lease, exclusive venue for any such litigation shall be Pueblo County, Colorado. All such
litigation shall be filed in the District Court and each party submits to the jurisdiction of such
District Court. Landlord and Tenant hereby waive trial byjm'Yin any action, proceeding, or
counterclaim brought by either against the other, upon any matters whatsoever arising out of or in
any way connected with this Lease, Tenant's use or occupancy of the Premises and/or any claim
of injury or damage.
11.8. Relationship of the Parties. Neither Party shall be, or hold itself out as, agent of
the other or as joint venturers or partners under this Lease.
11.9. Drafting of Agreement. Each Party acknowledges that this Lease was fully
negotiated by the Parties and,therefore,no provision of this Lease shall be interpreted against any
Party because such Party or its legal representative drafted such provision.
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11.10. No Third Party Beneficiaries. The provisions of this Lease are for the exclusive
benefit of the Parties hereto and their successors and permitted assigns, and no third party shall be
a beneficiary, or have any rights by virtue of this Lease.
11.11. Counterparts. This Lease may be executed in any number of counterparts, and ;'
each such counterpart shall be deemed for all purposes to be an original, and all such counterparts
shall together constitute but one and the same original.
11.12. Survival. Whether or not specifically noted within any section or provision of this �p
Lease, any provision of this Lease which must survive termination of this Lease in order to be
effective will so survive such termination.
IN WITNESS WHEREOF, this Lease is executed and delivered as of the date first above
written.
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TENANT:
IQOR US INC., A DELAWARE CORPORATION i
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Signature
!i A ed.( C 1 i'
Title
Aer, \ 2. i 7.0(q
Date
Floe; cl, i
STATE OF �'�1' ' - )
) SS.
COUNTY OF Pifstl(4S )
The foregoing instrument was acknowledged before me on this day of ,
2019, by ,4ilii(_ / , as .2 o!41 of iQor US Inc.,;a Delaware for-profit
corporation. oottilulqo
\�����Np,\DAP. vF ���i
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cP 0 ER;6Fto�• 2 +t
Witness my official hand and seal. q* 4 o° '2o't
My Commission Expires: 0/I G lo2I s cc 15'800 01,
I� eain Insures.' 2- N.
qL� D�0. I V.,._- ///�4�ill 11je 11 N�0\o\\\\
Notary Public
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LANDLORD:
CITY OF PUEBLO
!le .
Nicholas A. Gradisar, ayor
[ SEAL ]
Attest:
Acting City Clerk
Approved as to Form
Daniel C. Kogovsek, City Attoi6ey
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