HomeMy WebLinkAbout09650 ORDINANCE NO. 9650
AN ORDINANCE APPROVING AN AMENDMENT NO. 2 TO A
LEASE AGREEMENT AND AN AMENDMENT NO. 2 TO AN
EMPLOYMENT AGREEMENT 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 No. 2 to Lease Agreement dated January 27, 2020 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 No. 2”) having
been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to
execute and deliver the Lease Amendment No. 2 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 Amendment No. 2 to Employment Agreement dated January 27, 2020 between the
City and the Company, a copy of which is attached hereto (“Employment Amendment No. 2”),
having been approved as to form by the City Attorney, is hereby approved. The Mayor is
authorized to execute and deliver the Employment Amendment No. 2 in the name of the City and
the 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 January 13, 2020.
Final adoption of Ordinance by City Council on January 27, 2020.
President of City Council
Action by the Mayor:
☒ Approved on January 29, 2020 .
☐ 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-10
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: January 13, 2020
TO: 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. 2 TO A LEASE
AGREEMENT AND AN AMENDMENT NO. 2 TO AN EMPLOYMENT
AGREEMENT 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 second 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 ($200,000) 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.
On March 11, 2019, by Ordinance No. 9428, City Council approved first amendments to the
Employment Agreement and Lease Agreement in order to accelerate the date of Company’s
planned relocation to the Pope Block Building and also accommodate the Company’s plan to rent
space in the “2 East” section of the Pope Block Building rather than the “1 West” section as
previously approved.
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 proposed second amendments to the Employment Agreement and Lease Agreement make
two important changes. First, the allocation of economic development funds is changed to the
following:
One Hundred Fifty Thousand Dollars ($150,000) for the purchase of equipment to
be used and installed at Company’s manufacturing facility;
A rent abatement of One Hundred Thousand Dollars ($100,000) for the lease of
space located in 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.
Second, the Company will reduce the amount of space rented in the Pope Block Building from
1,260 square feet to 500 square feet.
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 business plan will be inconsistent with the existing
Lease Agreement as amended and Employment Agreement as amended.
RECOMMENDATION:
The Pueblo Economic Development Corporation recommends approval of this Ordinance.
Attachments: Proposed Ordinance; proposed Amendment No. 2 to Lease Agreement; proposed
Amendment No. 2 to Employment Agreement.
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement (the "Amendment No. 2") is made
as of this 27th day of January, 2020, by and between the City of Pueblo, a Colorado municipal
corporation("City") and ActivArmor, LLC, a Colorado limited liability company ("Company").
Recitals
WHEREAS, City and Company entered into that certain Employment Agreement dated
March 12, 2018 (the "Agreement"); and
WHEREAS,City and Company entered into that certain First Amendment to Employment
Agreement dated February 25, 2019 ("Amendment No. 1"); and
WHEREAS, City and Company desire to modify the Agreement and Amendment No. 1
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, City and Company hereby agree to the following:
Agreement
1. Amendment. Section 2 (a) 1 and 2 of the Agreement and Amendment No. 1 shall
be deleted in their entirety and replaced with the following:
1. Advance to Company One Hundred Fifty Thousand Dollars
($150,000) for the purchase of equipment to be used and installed at
the Facility;
2. Grant the Company a rent abatement of One Hundred Thousand
Dollars ($100,000).
2. Successors and Assigns. This Amendment No. 2 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 and Amendment
No. 1 shall remain in full force and effect. If there is any conflict between the Agreement and
Amendment No. 1 and the terms of this Amendment No. 2, the terms of this Amendment No. 2
shall control.
4. Counterparts. This Amendment No. 2 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 No. 2 by telecopy or via email in a PDF format
shall be deemed transmission of the original Amendment No. 2 for all purposes.
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IN WITNESS WHEREOF, the parties to this Amendment No. 2 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: .24011�G�P/‘ ao��'r'mi
Name: Nicholas A. Gra isar
Title: Mayor
Attested b • O. ! dii'A. L'VYYLA-
City Clerk ii
Approved as to form:
40t,Vt,Lti '' A<7Peat i -,
Name: Daniel C. Kogovse
Title: City Attorney
COMPANY:
ActivArmor, LLC
a Coloriability ow.
___ado-Itniite5
`'
c
Name:l3iana E. Hall
Title: Manager
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 the Agreement,Amendment No. 1 and this
Amendment No. 2. 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
accordance with the Agreement, Amendment No. 1 and this Amendment No. 2.
Dia . " . Ha 1, individually
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STATE OF COLORADO )
) ss.
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this day of ,
2020 by Diana E. Hall as Manager of ActivArmor, LLC, a Colorado limited liability ompany and
in her individual capacity as it pertains to the Personal Guaranty.
Witness my hand and official seal.
seal.
My commission expires: "Pa-zS,LD j2, . /
[ SEAL ] '
NOELLE ROSE GUNTER Notary Public
Notary Public—State of Colorado
Notary 10 20144007034
My Commission Expires Feb 25 2022
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AMENDMENT NO. 2 TO LEASE AGREEMENT
This Amendment to Lease Agreement (the "Amendment No. 2") is made as of this 27th
day of January, 2020, 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 entered into that certain Amendment to Lease
Agreement dated February 25, 2019 ("Amendment No. 1"); and
WHEREAS, Landlord and Tenant desire to modify the Agreement and Amendment No. 1
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
2 500
3 TBD
4-10 TBD
1.3. Term: Initial term: 120 months
Extended term: Two (2) five (5) year renewal options
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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, 2"d Floor
Pueblo, CO 81003
Phone: (719) 553-2655
1.10. Landlord's property management representative:
Daniel C. Kogovsek
City Attorney
One City Hall Place, 3rd Floor
Pueblo, CO 81003
Phone: (719) 562-3899
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 500 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,
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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
2 500 $12.00 $6,000.00 $0
3 TBD $12.00 Remaining TBD
balance of
$100,000 rent
abatement
commitment
4-10 TBD $12.00 Remaining TBD
balance of
$100,000 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 and Amendment
No. 1 shall remain in full force and effect. If there is any conflict between the Agreement and
Amendment No. 1 and the terms of this Amendment No. 2, the terms of this Amendment No. 2
shall control.
4. Counterparts. This Amendment No. 2 may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall constitute one and
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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 No. 2 by telecopy or via email in a PDF format
shall be deemed transmission of the original Amendment No. 2 for all purposes.
IN WITNESS WHEREOF, the parties to this Amendment No. 2 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: L
Name: Nicholas A. Gr disar
Title: Mayor
Attested by: c3Utir\G
Qv7
Crty Clerk
Approved as to form:
Name: Daniel C. Kogovsel
Title: City Attorney
TENANT:
ActivArmor, LLC
a Colorado.-Iimited�iability ny
By
Name: 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 the Agreement, Amendment No. 1 and this
Amendment No. 2. 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, Amendment No. 1 and this Amendment No. 2.
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Diana E. Hall, individually
STATE OF COLORADO )
) ss. •
COUNTY OF PUEBLO )
The foregoing instrument was acknowledged before me this 3 day of m Q J ,
2020 by Diana E. Hall as Manager of ActivArmor, LLC, a Colorado limited liability company and
in her individual capacity as it pertains to the Personal Guaranty.
Witness my hand and official seal.
My commission expires: )a/at,)01 I .
SCAL ". U
�INDY J.CAPRITTA l
NOTARY PUBLIC
STATE OF COLORADO Notary Public
NOTARY ID 19934016940
I fi OMISSION EXPIRES 12/20/2tiiJ
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