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Home My WebLink About09589 ORDINANCE NO. 9589 AN ORDINANCE APPROVING AN AMENDMENT NO. 1 TO A LEASE BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND PROFESSIONAL BULL RIDERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR STORAGE SPACE LOCATED AT 317 NORTH MAIN STREET, PUEBLO, COLORADO 81003 AND AUTHORIZING THE MAYOR TO EXECUTE SAID AMENDMENT NO. 1 BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Amendment No. 1 to the Lease (“Amendment”) between the City of Pueblo, a Colorado municipal corporation, and Professional Bull Riders, LLC, a Delaware Limited Liability Company, dated November 11, 2019 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 said Amendment 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 authorized and directed to perform any and all acts consistent with this Ordinance and the attached Amendment 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. REST OF THIS PAGE LEFT INTENTIONALLY BLANK SIGNATURE PAGE TO FOLLOW Action by City Council: Introduced and initial adoption of Ordinance by City Council on October 28, 2019. Final adoption of Ordinance by City Council on November 11, 2019 . President of City Council Action by the Mayor: ☒ Approved on November 14, 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 City Clerk City Clerk’s Office Item # R-5 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: October 28, 2019 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AN AMENDMENT NO. 1 TO A LEASE BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND PROFESSIONAL BULL RIDERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR STORAGE SPACE LOCATED AT 317 NORTH MAIN STREET, PUEBLO, COLORADO 81003 AND AUTHORIZING THE MAYOR TO EXECUTE SAID AMENDMENT NO. 1 SUMMARY: Attached is a Proposed Ordinance approving and authorizing the Mayor to sign an Amendment No.1 to a lease between the City of Pueblo and Professional Bull Riders, LLC, a Delaware Limited Liability Company (“PBR”). PREVIOUS COUNCIL ACTION: On July 25, 2016, by Resolution No. 13480, City Council approved a one year lease agreement with PBR with two (2) one year options to extend which PBR subsequently exercised. BACKGROUND: PBR wishes to continue to lease storage space in the Pope Block building located at 317 North Main Street in Downtown Pueblo. The Pope Block building is owned by the City of Pueblo. FINANCIAL IMPLICATIONS: PBR will continue to lease 2,400 square feet of space located on the first floor of the Pope Block building. The monthly rental will be $2,250. The lease term is for thirteen (13) months beginning December 1, 2019 and ending December 31, 2020. PBR will have the option of extending the lease for two (2) one year terms with rent to increase 3% each year. The City may relocate PBR to a different space in the Pope Block Building provided that the new premises contains a minimum of 2,400 square feet. PBR shall have the option of terminating the Lease if Tenant does not agree to the relocation. The Pope Block Building in downtown Pueblo contains approximately 101,992 square feet of net rentable space. PBR currently rents and will continue to rent 2,400 square feet of the Pope Block Building. PBR has agreed to pay its proportional share of the Building’s Common Area Maintenance (CAM)) expenses. In addition to base rent, PBR has agreed to pay its pro-rata share 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 BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this Ordinance is not approved, the City will lose approximately $27,000 in annual rental income for the Pope Block Building. RECOMMENDATION: Approve the Ordinance. Attachments: Proposed Ordinance and proposed Amendment No. 1 to Lease. AMENDMENT NO. 1 TO LEASE THIS AMENDMENT NO. 1 TO LEASE ("Amendment No. 1") entered into this 11th day of November, 2019 between the City of Pueblo, a Colorado municipal corporation("Landlord") and Professional Bull Riders, LLC a Delaware limited liability company ("Tenant"). The Landlord and Tenant are referred to collectively in this Agreement as the"Parties"and individually,without differentiation, each as a"Party." WHEREAS, Landlord and Tenant entered into an original Lease ("Lease") dated July 1, 2016 through which Landlord leased approximately 2,400 rentable square feet ("RSF") located in the Pope Block Building (the " Leased Premises") located at 317 N. Main Street, Pueblo, CO 81003; and WHEREAS, Landlord and Tenant wish to extend the term of the Lease and to increase the rent payable by Tenant to Landlord under the extended term. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: a. Replacement of Article 3. The parties hereby agree that Article 3 of the Lease is stricken and is hereby replaced and amended to read as follows: ARTICLE 3 - TERM 3.1. Commencement Date; Term. This Lease shall have a thirteen (13) month term ("Term"). The Lease Term begins (the "Commencement Date") on December 1, 2019 and terminates on December 31, 2020 (the "Termination Date"). 3.2. Relocation. The Parties agree that during the Term and any Extended Term of this Lease, Landlord may relocate Tenant to a different space in the Pope Block Building provided that the new premises contains a minimum of 2,400 square feet. Tenant shall have the option of terminating this Lease if Tenant does not agree to the relocation. 3.3. 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), one (1) year renewal options with 90 days prior notice to the Landlord. The rent specified in this Lease will increase by 3%per year in each renewal year. 3.4. 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 1 the termination date and the portion of the Leased Premises being vacated. b. Replacement of Article 4. The parties hereby agree that Article 4 of the Lease is stricken and is hereby replaced and amended to read as follows: ARTICLE 4 - RENT AND ADDITIONAL CHARGES 4.1. Base rent. Tenant's base rent for the Term of this Lease shall be$27,000.00 payable in monthly installments of$2,250.00. 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 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: • Maintenance and Management of the Building • Building Utilities • Repair of Building • Building Property Taxes 2 • 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 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. c. The Lease between the Parties, which is incorporated herein by this reference, shall remain in full force and effect, except as amended by this Amendment No. 1. Executed at Pueblo, Colorado, the day and year first above written. LANDLORD: [ SEAL ] City of Pueblo, a Colorado Municipal Corporation Atte OUtAO By City Clerk Nicholas A. radisar Mayor TENANT PROFESSIONAL BULL RIDERS, LLC A DELA ARE LIMITED LIABILITY COMPANY By: au/0a)1: 10,1vive Name: GU?luf?Gt - - ll�lrl CY- Title: Manager STATE OF (,,-O�OVado ) ) ss. COUNTY OF ?Utr2 O ) 3 The foregoin instrument was acknowledged before me this 1 I.jJ day of 6.e t Q worl 2019 by Anil as Manager of Professional Bull Riders, LLC. Witness my hand and official seal. My commission expires: J 1�� g0 i D�D. [ SEAL ] Alit I,. / r• Not.I Public JESSICA R.SINKS NOTARY PUBLIC STATE OF COLORADO NOTARY ID 20124054465 MY COMMISSION EXPIRES AUGUST 22,2020 4