Loading...
HomeMy WebLinkAboutPort Townsend School District - Mountain View Lease 2014 & Memo of LeaseMountain View Elementary School Lease(2014) Page 1 of 15 LEASE AGREEMENT THIS LEASE is made at Port Townsend, Washington, this _24Nay of 2014, by and between PORT TOWNSEND SCHOOL DISTRICT NO. 50 OF JEFFERSON COUNTY, WASHINGTON, a Municipal Corporation, hereinafter referred to as "LESSOR" or DISTRICT," and THE CITY OF PORT TOWNSEND, a Municipal Corporation, hereinafter referred to as "LESSEE" or"CITY," pursuant to RCW Ch. 39.33. RECITALS: A. LESSOR is a public school district in Jefferson County, Washington. LESSOR owns the Mountain View Elementary School building ("School" or "Building") and the associated property and improvements, located at 1919 Blaine Street, Port Townsend collectively the "Leased Premises" or"Premises"). B. LESSEE is the municipal government of the City of Port Townsend, Washington. C. In 2009 LESSOR, having determined that the Premises are surplus to the future foreseeable needs of LESSOR, entered into a five-year Lease Agreement (dated August 10, 2009) with the CITY for the CITY to use the Premises for municipal purposes. The Lease Agreement contained renewal provisions. The Lease Agreement is recorded August 12, 2009 at Auditor File No. 545736, records of Jefferson County. D. LESSOR hereby confirms that the Premises are surplus to the future foreseeable needs of LESSOR. E.The parties desire to enter into this new Lease Agreement for the Premises on the terms set forth herein. F.By this Lease Agreement, the parties desire to continue the mutually beneficial relationship they have enjoyed for their constituents with respect to the Premises initially undertaken with the parties' Lease Agreement in 2009. They desire by this Lease Agreement to maintain and enhance services to their respective constituents, and improve the overall efficiency of their respective operations. Among other things, this Lease Agreement: 1.Allows the CITY to undertake emergency roof repairs and new roof work and mechanical (HVAC) repairs and upgrades with an estimated cost of $2.8 million. Without a long-term lease of fifteen (15) years, the CITY would not be in a position to utilize grant funding and otherwise justify making the investment in these repairs and upgrades. The repairs and upgrades benefit the CI"fY by lowering operating costs at the Premises, and benefit the DISTRICT by making valuable long-term improvements to its facility. With the benefit of the additional fifteen (15) year option term, the CITY will look for additional funding sources, including from community partners that would allow additional capital improvements to address deferred maintenance. Mountain View Elementary School Lease(2014) Page 2 of 15 2.Allows continued CITY operation of the pool. This not only benefits the community, but benefits the DISTRICT by helping to ensure the pool facility is available for use by students of the DISTRICT. It is understood that while the Lease Agreement helps the CITY to continue to operate the pool, the pool has operational and capital issues and is subject to possible closure if unexpected emergency repairs are required and funding is not available to make the repairs or it is not feasible to make the repairs because the cost of the repairs is not reasonable given other potential pool costs or other needs of the CITY. 3.Allows continued operation of community nonprofit entities on the Mountain View School Premises (for example, Red Cross, Food Bank, YMCA, ReCyclery). For example, the ReCyclery provides benefits to the DISTRICT by providing bicycle education and safety training for DISTRICT students. 4.Maintains the Police Station on the Mountain View School Premises, which greatly benefits the CITY. IN CONSIDERATION OF THE RECITALS, TERMS, COVENANTS AND CONDITIONS SET OUT HEREIN, THE DISTRICT AND CITY HEREBY AGREE AS FOLLOWS: 1.PROPERTY DESCRIPTION LESSOR does hereby lease to LESSEE the Premises, which includes the Mountain View Elementary School, the associated property, and improvements on the property, which is legally described as: Estate Edition, Block 176, lots 2 and 4, 6 and 8 and a portion of the vacated streets adjacent; Block 177, lots 1 to 4, 6 & 8 and a portion of the vacated streets adjacent; Block 178, lots 1 to 8 plus a portion of the vacated streets adjacent; Block 179, lots 1 to 8 and a portion of the vacated streets adjacent; and Block 180, lots 1 to 8 and a portion of the vacated streets adjacent, Gaines Street adjacent 1 & 2. 2.TERM OF LEASE; EXTENSION a) This lease shall be for a period of fifteen (15) years, commencing September 1, 2017, and shall expire on August 31, 2032 (the "Initial Term"). The parties' existing Lease Agreement (recorded August 12, 2009 at Auditor File No. 545736) shall remain in effect through August 31, 2017 (except as specifically modified by this Lease Agreement) b) LESSEE has an option to extend this Lease Agreement as follows: At any time during the Initial Term of the Lease Agreement that is prior to August 31, 2030 (two years before the expiration of the initial term), LESSEE may give written notice to the LESSOR of LESSEE'S intent to extend the Lease Agreement by an additional fifteen (15) years for a term commencing September 1, 2032 and terminating on August 31, 2047 (the "Option Term"). In Mountain View Elementary School Lease(2014) Page 3 of 15 the event LESSEE exercises the option, all the terms and conditions of the Lease Agreement shall apply during the option term. c) Beyond August 31, 2032 (end of Initial Term), if the option is not exercised, or beyond August 31, 2047, if the option is exercised, this Lease Agreement shall continue in force from year to year thereafter on the same terms, unless terminated by either party, by giving at least two (2) years written notice of termination for the Lease Agreement to terminate on the anniversary date that is more than two (2) years after the notice. 3. RENTAL AMOUNT AND PAYMENT SCHEDULE In consideration of the lease of the Leased Premises to LESSEE, LESSEE shall perform all obligations set forth in this Lease Agreement and pay rent as follows: a) Rent under the 2009 Lease Agreement continues through December 31, 2014. Commencing January 1, 2015 and ending December 31, 2016, rent under the parties' 2009 Lease Agreement is modified to be $60,000 per year, payable in twelve (12) monthly installments on or before the 10th of each month, with no CPI. b) Commencing January 1, 2017 and ending December 31, 2019, rent under this Lease Agreement is $60,000 per year, payable in twelve (12) monthly installments on or before the 10th of each month, with no CPI. Thereafter, rent is $1/year. Rent takes into account the substantial contribution the CITY (LESSEE) is making for emergency roof repairs and new roof work and mechanical (HVAC) repairs and upgrades with an estimated cost of$2.8 million. Rent also takes into account the benefit to the community and the DISTRICT (LESSOR) from the Lease Agreement by helping to ensure the pool facility is available for use by students of the DISTRICT. 4.TAXES AND ASSESSMENTS LESSEE shall pay all taxes and assessments, if any, upon the Premises and upon the buildings and improvements thereon which are assessed during the lease term. 5.UTILITIES a) LESSEE shall pay, throughout the term of this Lease Agreement, all charges for all utility services furnished to the Premises, including but not limited to light, heat, electricity, gas, water, sewage, and garbage removal. b) LESSOR shall not be liable for any reason for any loss or damage resulting from an interruption of any of such services. 6.USE OF LEASED PREMISES Mountain View Elementary School Lease(2014) Page 4 of 15 a) LESSEE and all of its assignees and sublessees shall use the Leased Premises for municipal purposes only, and no other purposes, except as otherwise provided in this Lease Agreement. Provided, nothing prevents the CITY from using the Premises for incidental uses not directly related to the furnishing of municipal services, for example, using the Premises for community meetings, food drives, voting location, City offices, other agency offices, or recreational services (for example, YMCA). b) In addition, since partnering may be necessary for funding additional improvements and facilities at the Premises, the LESSEE may partner with community non- profit entities and other agencies to provide for additional improvements and facilities at the Premises. Such use could include, for example, a non-profit entity constructing and operating a new recreational facility on the premise utilizing a fee-based operational model. Construction of any new facilities by the CITY by itself and/or with partners at the Premises requires LESSOR's approval, which shall not be unreasonably withheld. c) Should LESSOR desire, LESSOR and LESSEE agree to cooperate to allow use of a classroom for students involved in community programs on such terms as are mutually agreed to. d) LESSEE shall comply with all federal, state and local laws and ordinances related to use of the said Premises. 7.ALTERATION a) Subject to LESSOR'S prior written permission (which shall not be unreasonably withheld), LESSEE may undertake at LESSEE'S expense leasehold improvements. All work shall be done in a manner consistent with applicable legal requirements. b) If the LESSOR approves a Facility Master Plan, the City may undertake improvements consistent with the Plan without additional LESSOR permission on a case-by-case basis. All work will be done in a manner that the City would require if the project were done for a City-owned facility. c) LESSEE and LESSOR agree to cooperate in applying for any grants to fund agreed LESSEE or LESSOR improvements. d) Upon termination of this Lease Agreement, either by expiration or by default of LESSEE, any leasehold improvements shall be considered a part of the real property of LESSOR free from any interest of the LESSEE. By way of example only: leasehold improvements include things attached to or incorporated into the premises like wiring, walls, and light fixtures; leasehold improvements do not include things like demountable pictures and signage. 8.SIGNS AND BUILDING IDENTIFICATION No signs shall be erected or maintained on the property without LESSOR'S prior written consent, which shall not be unreasonably withheld. Mountain View Elementary School Lease(2014) Page 5 of 15 9.CONDITION OF PREMISES. LESSEE accepts the premises in "as is" condition as of the date of this Lease Agreement, and the DISTRICT makes no warranties or guarantees of any kind as to the condition of the same. The DISTRICT agrees to transfer and assign any and all interest it may have in any manufacturer's, contractor's or vendor's warranties related to the Building or any portion thereof. 10. MAINTENANCE AND REPAIR See Paragraph 35 for additional terms regarding repairs. a) During the existence of this Lease Agreement, LESSEE shall, at its own expense, at all times keep the Leased Premises in a neat, clean, sanitary, and well-maintained manner, and use the Premises and the common areas in accordance with applicable laws, ordinances, rules, regulations and requirements of governmental authorities. The LESSEE shall permit no waste, damage or injury to the Premises. b) LESSEE's obligation to keep and maintain the Premises in good order, condition, and repair includes without limitation all plumbing and sewage facilities on the Premises, floors including floor coverings), doors, locks, and closing devices, window casements and frames, glass and plate glass, grilles, all electrical facilities and equipment, HVAC systems and equipment, and all other appliances and equipment of every kind and nature, and all landscaping upon, within, or attached to the Premises. In addition, LESSEE will at its sole cost and expense install or construct any improvements, equipment, or fixtures required by any governmental authority or agency as a consequence of LESSEE'S use and occupancy of the Premises. LESSEE will replace any damaged plate glass within forty-eight (48) hours after the occurrence of such damages. c) LESSOR will assign to LESSEE, and LESSEE will have the benefit of, any guarantee or warranty to which LESSOR is entitled under any purchase, construction, or installation contract relating to a component of the Premises that LESSEE is obligated to repair and maintain. LESSEE will have the right to call upon the contractor to make such adjustments, replacements, or repairs that are required to be made by the contractor under such contract. d) At the expiration of this Lease Agreement, LESSEE shall return the Premises to LESSOR in the same condition in which received (or, if altered by LESSEE with LESSOR'S consent, then the Premises shall be returned in such altered condition), reasonable wear and tear excepted. e) LESSEE, at its sole cost, shall keep the structure of the School, including the roof and foundation, in good order, condition and repair, and as may be required to comply with any laws and regulations, subject to and provided as follows: Mountain View Elementary School Lease(2014) Page 6 of 15 1) LESSOR shall not be responsible for any interruption or disturbance of LESSEE's business, service, or occupancy because of any maintenance or repair of any items or for any damage, injury or loss for failure to maintain or repair of any items. 2) LESSEE shall notify LESSOR of any hazardous conditions which become apparent to LESSEE or its agents, employees, contractors, or invitees. 3) LESSEE shall notify LESSOR of LESSEE's intent to perform work or repairs under this section 10, paragraph (5) of the Lease Agreement. Said notice shall be in writing and be given at least sixty (60) days in advance of the work or repairs unless an emergency exists that makes giving notice impractical and impossible (in which event, notice shall be given immediately). All work and repairs shall be undertaken in a professional and workmanlike manner according to applicable laws and regulations. 11. INSPECTION BY LESSOR LESSOR reserves the right to inspect the Leased Premises at any and all reasonable times throughout the term of this Lease Agreement; provided that it shall not interfere unduly with LESSEE's operations. The right of inspection reserved to LESSOR hereunder shall impose no obligations on the LESSOR to make inspections to ascertain the condition of the Premises and shall impose no liability upon LESSOR for failure to make such inspections. 12. ACCIDENTS, LIABILITY, INSURANCE, RELEASE a) Indemnification / Hold Harmless. LESSEE shall defend, indemnify, and hold harmless the LESSOR, its officers, officials, employees and volunteers from and against any and all claims, suits, actions, or liabilities for injury or death of any person, or for loss or damage to property, which arises out of LESSEE'S use of the Premises, from the conduct of LESSEE'S business, or from any activity, work or thing done, permitted, or suffered by LESSEE in or about the Premises, except only such injury or damage as shall have been occasioned by the sole negligence of the LESSOR. b) LESSEE Insurance. At all times during the term and any renewals, Lessee will carry and maintain, at LESSEE's expense, the following insurance, in the amounts specified or such other amounts as LESSOR may from time to time reasonably request: 1) Liability. Bodily injury and property damage liability insurance, with a combined single occurrence limit of not less than $1,000,000, or such greater amount as LESSOR may reasonably require at any time. All such insurance will be equivalent to coverage offered by a commercial general liability form including, without limitation, personal injury and contractual liability coverage for the performance by LESSEE of the indemnity agreements set forth in this lease; 2) Property. LESSEE shall purchase and maintain during the term of the lease all-risk property insurance, including earthquake and flood, covering the Building and LESSEE's contents for their full replacement value without any coinsurance Mountain View Elementary School Lease(2014) Page 7 of 15 provisions. All policy proceeds will be used for the repair or replacement of the property damaged or destroyed; however, if this Lease Agreement ceases under the provisions of Section 15 (Damage or Destruction), LESSEE will be entitled to any insurance proceeds resulting from damage to LESSEE'S furniture and fixtures, machinery and equipment, stock, and any other personal property; LESSOR shall be named as a loss payee to the extent of LESSOR's interests. 3) LESSEE shall provide LESSOR with certificates of insurance demonstrating that LESSEE has secured the required coverage on the Premises. c) Waiver of Title 51. It is further specifically and expressly understood that the indemnification provided herein constitutes LESSEE's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Lease Agreement. 13. ASSIGNMENT OR SUBLEASE a) Because consideration for this Lease Agreement is based in part on LESSEE providing a substantial public benefit, LESSEE shall not assign or transfer this lease, without LESSOR'S prior written consent, which LESSOR may withhold in LESSOR'S sole discretion. b) LESSEE may, upon approval of the LESSOR, which shall not be unreasonably withheld, sublet a portion of the school to other entities if in the judgment of the LESSEE and LESSOR that sublet is beneficial to the public purposes of the parties. Under the 2009 Lease Agreement, LESSOR approved subleases or use agreements to a number of current occupants at the Premises, including YMCA, Recyclery, Red Cross, Working Image, and Food Bank. These entities are approved for continued sublease or use agreement under this Lease Agreement. c) This Lease Agreement or any interest therein shall not be assignable or transferable by operation of law or by any process or proceeding of any court, or otherwise, without the written consent of the LESSOR. 14. DEFAULTS a) LESSEE Defaults. Time is of the essence of this agreement, and in the event of the failure of LESSEE to perform its obligations, or to keep any of the covenants or agreements herein set forth to be kept and performed, the LESSOR may elect to terminate this Lease Agreement and re-enter and take possession of the Premises with or without process of law; provided, however, that LESSEE shall be given thirty (30) days' notice in writing stating the nature of the default in order to permit LESSEE to remedy such default within said thirty day period, or in the event the default cannot be reasonably remedied within said thirty days, that LESSEE commence to remedy within that period and diligently prosecutes such remedy to completion. Mountain View Elementary School Lease(2014) Page 8 of 15 b) LESSOR Defaults. In the event LESSOR shall fail to keep and perform any of the covenants and agreements herein contained, and such failure continues for thirty (30) days after written notice from the LESSEE (unless such failure cannot be cured within such thirty (30) day period and LESSOR commences to cure within that period and diligently prosecutes such cure to completion), then the LESSEE shall have all rights and remedies applicable at law or in equity. 15. DAMAGE OR DESTRUCTION a) In the event the Premises or any portion of the Premises are destroyed by reason of fire or other cause, LESSEE will immediately notify LESSOR. If the Building, or any portion of the Building, is damaged or destroyed by fire or any other cause, LESSOR will promptly repair or rebuild the Building at LESSEE'S expense, so as to make the Building as least equal in value to the Building immediately prior to the occurrence and as nearly similar to it in character as is practical and reasonable. LESSOR will apply and make available the net proceeds of any fire or other casualty insurance paid to LESSOR, after deduction of any costs of collection including attorney fees, for repairing or rebuilding. Cost of repair and rebuilding includes the cost of any architect and engineer to prepare and review any plans and specifications. Rent is not abated pending the repairs and rebuilding except to the extent LESSOR receives a net sum as proceeds of any rent insurance. b) If during the term of this Lease Agreement, whether initial or extended, the Building is so damaged by fire of otherwise that the cost of restoration exceeds fifty percent of the replacement value of the Building (exclusive of the foundations) immediately prior to the damage, either LESSOR or LESSEE may within thirty days of the damage give notice of its election to terminate this Lease Agreement, Provided, LESSEE will have no obligation to repair or rebuild, and the entire insurance proceeds will belong to LESSOR. 16. LIENS; ENCUMBRANCES LESSEE shall keep the Premises free from any liens or encumbrances arising out of any work performed for, materials furnished to, or obligations incurred by LESSEE and shall hold LESSOR harmless against the same, and further, shall not place or cause to be put in place any liens or encumbrances against the Premises or the School, and the same shall be void and of no effect. 17. EMINENT DOMAIN; RECAPTURE The parties agree that during the term of the Lease Agreement, or any extension, that neither party will exercise the power of eminent domain. PROVIDED, If LESSOR needs the property for school purposes, it may on two years' notice terminate the Lease Agreement. In this event, the LESSOR would be responsible to compensate the LESSEE for its investment in the property and facilities, minus deprecation. 18. WAIVER OF SUBROGATION Mountain View Elementary School Lease(2014) Page 9 of 15 LESSEE and LESSOR hereby release and discharge each other from all claims, losses and liabilities arising from or caused by any hazard covered by property insurance on or in connection with the Premises or Building. This release shall apply only to the extent that such claim, loss or liability is covered by insurance. 19. INSOLVENCY If LESSEE shall file a petition in bankruptcy, or if LESSEE shall be adjudged bankrupt or insolvent by any court, or if a receiver of the property of LESSEE shall be appointed in any proceeding brought by or against LESSEE, or if LESSEE shall make an assignment for the benefit of creditors, or if any proceeding shall be commenced to foreclose any mortgage or any other lien on LESSEE'S interest in the Premises or on any personal property kept or maintained on the Premises by LESSEE, the LESSOR may, at its option, terminate this Lease Agreement. 20. WAIVER OF DEFAULTS The acceptance of the benefits of this Lease Agreement by the LESSOR for any period or periods after a default by LESSEE shall not be deemed a waiver of such default unless the LESSOR shall so intend and shall so advise LESSEE in writing. No waiver by the LESSOR of any default hereunder by LESSEE shall be construed to be or act as a waiver of any subsequent default by LESSEE. 21. QUIET ENJOYMENT Providing LESSEE observes and performs all terms and provisions of this Lease Agreement to be observed or performed by LESSEE, LESSOR shall secure to LESSEE during the lease term the quiet and peaceful possession of the Premises as against any adverse claim of LESSOR or any party claiming under LESSOR in accordance with the terms and provisions of this Lease Agreement. 22. SURRENDER At the end of the term of this Lease Agreement, LESSEE will surrender the Premises in good order and condition, ordinary wear and tear excepted. LESSEE will not remove any trade fixtures or equipment, or improvements or facilities, fastened to the Building or attached to the Premises without LESSOR'S consent. 23. ARBITRATION Any controversy or claim arising out of or related to this Lease Agreement or the breach or alleged breach thereof shall be settled according to the procedures of the American Arbitration Association. Any costs, expenses and legal fees incurred in arbitration shall be awarded as determined in the course of the arbitration, and may be awarded to the prevailing party. Jurisdiction for any arbitration action shall be Jefferson County. 24. ADVANCES BY LESSOR FOR LESSEE Mountain View Elementary School Lease(2014) Page 10 of 15 If LESSEE shall fail to do anything required to be done by it under the terms of this Lease Agreement, the LESSOR may, at its sole option and in its sole and absolute discretion, do such act or thing on behalf of LESSEE, and upon notification by LESSOR of the cost thereof to the LESSEE, LESSEE shall promptly pay LESSOR the amount of that cost. Any such payment made by LESSOR on behalf of LESSEE shall bear interest at the rate of twelve (12%) percent per annum until paid in full. 25. NOTICES All notices hereunder may be personally served, delivered or mailed. If mailed, they shall be sent by certified or registered mail to the following addresses: LESSOR: Superintendent Port Townsend School District 1610 Blaine St. Port Townsend, WA 98368 LESSEE: City Manager City of Port Townsend City Hall 250 Madison Street, #201 Port Townsend, WA 98368 or to such other respective addresses as either party hereto may hereafter from time to time designate in writing. Notices sent by mail shall be deemed to have been given when properly mailed, and the postmark affixed by the United States Post Office shall be conclusive evidence of the date of mailing. 26. SEVERABILITY If any provision of this Lease Agreement is found by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the remainder of the Lease Agreement will not be affected, and in lieu of each such provision that is found to be illegal, invalid, or unenforceable, a provision will be added as a part of this Lease Agreement that is as similar to the illegal, invalid, or unenforceable provision as may be legal, valid, or enforceable. 27. "LESSEE" INCLUDES LESSEES, ETC. The words "LESSOR" and "LESSEE", when used herein, shall be applicable to one or more persons, as the case may be, and the singular shall include the plural, the neuter shall include the masculine and feminine, and if there be more than one principal in the LESSEE, the Mountain View Elementary School Lease(2014) Page 11 of 15 obligations of the LESSEE hereunder shall be joint and several among all its principals. The words "person(s)" whenever used shall include individuals, firms, associations and corporations and any other legal entity. The language in all parts of this Lease Agreement shall in all cases be construed as a whole and in accordance with its fair meaning, and shall not be construed strictly for or against LESSOR or LESSEE, both LESSOR and LESSEE having negotiated and bargained for this Lease Agreement and its terms and provisions. 28. ENTIRE AGREEMENT; REVOCATION OF PRIOR AGREEMENTS This Lease Agreement contains the entire agreement of the parties hereto with respect to the leasing, use, and occupancy of the Premises, and no other agreement, statement, promise, representation or understanding by any party hereto, or any of their respective agents, representatives, employees or principals which is not contained in this Lease Agreement is hereby mutually rescinded and revoked and shall not be binding or valid. 29. AMENDMENTS Any amendments or additions or modifications to this Lease shall be in writing executed by the parties hereto. Neither LESSEE nor LESSOR shall be bound by any verbal or implied agreements. 30. VENUE Venue for any action hereunder shall be the Superior Court of Jefferson County, Washington and the laws of the State of Washington shall govern this lease. LESSEE consents to the jurisdiction of such court. 31. CAPTIONS The captions of this lease are for convenience only and do not in any way limit, amplify, or modify the provisions of this Lease Agreement. 32. ADVICE OF COUNSEL; CONSTRUCTION The parties warrant and represent to each other that they have had representation by legal counsel and/or have had the opportunity to be represented by legal counsel during all stages in the negotiation of this Lease. The parties further agree that they have participated in the negotiating and drafting of this Lease and stipulate that this Lease shall not be construed more favorably with respect to either party. 33. AUTHORIZATION The undersigned warrant and represent that they are authorized on behalf of each corporate entity to execute this Lease Agreement on behalf of each entity. The DISTRICT and CITY warrant that they have approved this Lease Agreement by duly adopted motion or resolution approved by their legislative bodies in open public meeting. Mountain View Elementary School Lease(2014) Page 12 of 15 34. RECORDING On execution of this Lease Agreement by both parties, either party may record a Memorandum of Lease Agreement in Jefferson County. 35. MAJOR REPAIRS; ROOF AND HVAC; DISTRICT CONTRIBUTION a) The parties by this paragraph provide for and define limits to the LESSEE's obligation to repair. In addition to paragraphs 10 MAINTENANCE AND REPAIR, 12 ACCIDENTS, LIABILITY, INSURANCE, RELEASE, and 15 DAMAGE, DESTRUCTION, OR MAJOR REPAIRS and notwithstanding these or any other provisions of this Lease Agreement, in the event of a"major repair" to the Leased Premises or buildings (including component systems), then: 1) The CITY may in its discretion choose not to fund the repair, and shall be under no obligation to do so. 2) Rent is not abated during the term of the lease (except as provided in Paragraph 15, where damage exceeds 50% of the replacement cost, where either party may elect to terminate the Lease Agreement). b) "Major Repair" means the cost to repair an item or damage costs more than 25,000 in any calendar year, and is not covered by insurance or warranty. For example, if the HVAC system fails, and the cost to repair (hypothetically) comes to $40,000 (after applying any insurance or warranty available for the repair), the CITY is not obligated to undertake the repair although it may choose to do so). In this example, nothing requires the CITY to undertake partial repairs to the item in one year costing (say) $25,000, and complete the repairs in a second year at a cost (say) of$15,000 (although it may choose to do so). Likewise, if in any calendar year, an item (for example, the HVAC system) breaks, and the CITY repairs the item for (say) 20,000, and the item breaks a second time in the same year with the cost for the second repair, combined with the cost for the first repair exceeding $25,000, there is no obligation to repair. c) Nothing prevents the parties from agreeing, in the event of a major repair, on a fair share allocation of expense to accomplish repairs. Any such agreement shall be by written agreement signed by both parties. This provision is not subject to arbitration. d) The CITY agrees in consideration of this Lease Agreement that it will undertake emergency roof repairs and new roof work and mechanical (HVAC) repairs and upgrades with an estimated cost of$2.8 million. The work is further defined in Attachment A. All work will be done in a manner that the CITY would require if the project were done for a CITY-owned facility, and shall be completed within three (3) years of the date of this Lease Agreement. Funding in part comes from grants obtained by the CITY. To the extent necessary to obtain the grant, the DISTRICT will cooperate as the owner of the Premises in signing grant agreements, so long as the CITY has the primary obligation to perform under the grant agreement. These repairs and upgrades are referred to as Phase 1 improvements. Mountain View Elementary School Lease(2014) Page 13 of 15 e) The parties have identified additional improvements to the Premises referred to as Phase 2 improvements. These improvements largely relate to energy improvements with a cost of approximately $2.5 million. The CITY is exploring options for funding these improvements. The DISTRICT agrees to contribute to future capital upgrades on the Premises, as determined by a DISTRICT facilities plan (which is currently being developed), and so long as DISTRICT receives adequate funding from the state and/or voter approved levy or bond for the DISTRICT's capital plan. Any decision on funding and undertaking future improvements is subject to approval by the City Council and/or District Board of Directors. LESSOR LESSEE PORT TOWNSEND SCHOOL DISTRICT CITY OF PORT TOWNSEND By By DCA04.9 David Engle, Superintende David G. Timmons, City Manager Date: Ll1 ' Date: Attest: Approved as to Form: all ,&.. I, e Pamela Kolacy, MMC, City CIA John P. Watts, City Attorney Mountain View Elementary School Lease(2014) Page 14 of 15 STATE OF WASHINGTON ) ss. COUNTY OF JEFFERSON ) On this day of 2014, before me the undersigned, a Notary Public duly commissioned and sworn, pers nallared David Engle, known to be the Superintendent of the Port Townsend School District, that executed the foregoing Lease Agreement for the Mountain View Elementary School, and acknowledged the said instrument to be the free and voluntary act and deed of said entity, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the said instrument on behalf of the entity. WITNESS my hand and official seal hereto affixed the day and year in this certificate above written. Print name] Laurie McGinnis NOTARY PUBLIC in and for the State of PUBL1 Washington, residing at Jefferson County. My appointment expires: 5 •v't 3 `-7 FWA STATE OF WASHINGTON ) ss. COUNTY OF JEFFERSON ) On this.`t' day of 2014, before me the undersigned, a Notary Public duly commissioned and sworn, pers6fially appeared David Timmons, known to be the City Manager of the CITY OF PORT TOWNSEND, the municipality that executed the foregoing Lease Agreement for the Mountain View Elementary School, and acknowledged the said instrument to be the free and voluntary act and deed of said municipality, for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute the said instrument on behalf of the municipality. WITNESS my hand and official seal hereto affixed the day and year in this certificate above written. CAW Print name] ( L]d LV LQ rttl iS o M NOTARY PUBLIC in and for the State of v ovow Washington, residing at ..RQ1-` & Tr q My appointment expires: 3.1 PUBL% OF Mountain View Elementary School Lease(2014) Page 15 of 15 ATTACHMENT A City- School District Lease) 1. Lighting 2. Boiler 3. HVAC 4. Envelope 5. Controls 6. Classroom Building Roof t) 313PGS : 2 LEASE04144201DR30Art $104.50 CITY OF PORT TOWNSEND1dd"I" Cl,untY WA Audi tor's of f ice Rose Ann Cerrot k„ AtAdi tar City of Port Townsend City Attorney's Office 250 Madison Street NO REAL ESTATEPortTownsend, WA 98368 EXCISE TAX REQUIRED JEFFERSON COUNTY TREASURER By: i Grantor: Port Townsend School District No. 50 of Jefferson County Grantee: City of Port Townsend Tax Parcel Numbers: 949817602, 949817701, 949817801, 949817901, 949818001 (portion) Abbreviated Legal Descriptions: Estate Addition Blk 176 Lots 2,4,6 & 8 &ptn vac streets adj; Blk 177 Lots 1-4, 6& 8 w/ptn vac Scott St adj Lot 8; Blk 178 Lots 1-8 w/vac streets;Blk 179 Lots 1-8 w/ptn vac Gaines St adj 7&8;Blk 180 Lots 1-8 &ptn vac Gaines St adj 1 &2 MEMORANDUM OF LEASE This Memorandum of Lease evidences that a lease agreement("Lease")was entered into as of June 24,2014,by and between the Port Townsend School District No. 50 of Jefferson County, Washington,a Washington municipal corporation("Lessor"), and the City of Port Townsend,a Washington municipal corporation("Lessee"), for certain real property located at 1919 and 1925 Blaine Street,Port Townsend, County of Jefferson, State of Washington,including the Mountain View Elementary School and associated property. Subject lease is for an initial term of fifteen (15)years, commencing on September 1,2017,with an option to renew for an additional fifteen(15)year term. The Lease was amended on May 15,2019,to modify the description of the leased premises,removing the portion occupied by the Recyclery. The leased property is legally described as follows: Estate Edition,Block 176, lots 2 and 4,6 and 8 and a portion of the vacated streets adjacent;Block 177, lots 1 to 4, 6 & 8 and a portion of the vacated streets adjacent; Block 178, lots 1 to 8 plus a portion of the vacated streets adjacent; Block 179, lots I to 8 and a portion of the vacated streets adjacent; and Block 180, lots 1 to 8 and a portion of the vacated streets adjacent, Gaines Street adjacent 1 &2 except for the west 155 Feet of Block 180 of the Plat of The Estate Addition to the City of Port Townsend, Washington, per Book 2 of Plats, page 21. Situate in Jefferson County, Washington. In witness whereof,Lessor and Lessee have duly executed this Memorandum of Lease as of the date and year last written below. LESSOR: LESSEE: PORT TOWNSEND SCHOOL DISTRICT NO. 50, CITY OF PORT TOWNSEND, a Washington municipal corporation a Washington municipal corporation r s aUx5;,101y Manager Sandy ss t-Crabtrce,Stiper€timident Date: Date: _....... .... ... 1 Approved as to Form;. llVcld tireerawoc l„ "aty t caMey STATE OF WASHINGTON ss, COUNTY OF JEFFERSON On this day of..... x"021,before me personally appeared John Mauro,to rage knownto be tlae 'ity Manger 1'the f..it:y od'Icrt frrr raetrl,the narrraieilrality that executed the foregoing instrument and acknowledged it to be the free and voluntary act and deed of the municipality, for the uses and purposes mentioned in the instrument, and on oath stated that he is authorized to execute the instrunien fip" f of tilen1unieip"llity, I z. YW,/ . 6;l 1, Print name:] I Notary Public in and for the State of Washington, OV1F t residing at A My commission expires: ... OFfdfiVd6f9"t0"eR%0 STATE OF WASHINGTON ss. COUNTY OF JEFFERSON nOnthisidayof m 2021, before me personally appeared Sandy Gessner- Crabtree, to me known to be the Super'itrtendent of the Port Townsend School District No. 50,the entity that executed the foregoing instrument and acknowledged it to be the free and voluntary act and deed of the entity,for the uses and purposes mentioned in the instrument, and on oath stated that she is authorized to execute the instrument on behalf of the entity. CCfinisa rle Print name:] 1A Notary Public in and for the State of Washington, residing at My commission expires: 'MA-q, a23 f I " OF V4 2