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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 ☒ □ 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-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. v�..2'. Substituted Copy 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 4,4 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: 1 Substituted Copy March 25, 2019 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: 2 Substituted Copy March 25, 2019 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: 3 v3 4., Substituted Copy March 25, 2019 • 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 ! I 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. 4 , Substituted Copy March 25, 2019 6.3 Liens. Tenant must keepthe Leased Premises and this Lease free from any Y 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. 5 Substituted Copy March 25, 2019 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 il Building or in keeping with the character of the existing tenancies of the Building. 6 Substituted Copy March 25, 2019 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 try 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. 7 Substituted Copy March 25, 2019 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. 8 Substituted Copy March 25, 2019 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. w TENANT: IQOR US INC., A DELAWARE CORPORATION i _,,---- ----- C G r 1Q 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 ,*01;574' i� ., 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 9 Substituted Copy March 25, 2019 LANDLORD: CITY OF PUEBLO !le . Nicholas A. Gradisar, ayor [ SEAL ] Attest: Acting City Clerk Approved as to Form Daniel C. Kogovsek, City Attoi6ey 10