05/22/2012 - City Council Finance CommitteeFINANCE COMMITTEE MEETING
MAY 22, 2072
72 -2 PM
CONFERENCE ROOM 2A &B
AGENDA
AGENDA ADOPTION
�3 II. NADER NOORYSHOKRY- REQUEST FOR INTEREST WAIVER ON
ASSESSMENT DEFERRAL AGREEMENT
III. FIRE ADMINISTATION LEASE
IV. CEDAR GROVE REDEVELOPMENT UPDATE
V. OTHER BUSINESS
Vi. ADJOURNMENT
City of Evan demo
TO: FINANCE COMMITTEE
FROM: CITY ADMINISTRATOR HEDGES
DATE: MAY 18 2012
SUBJECT: FINANCE COMMITTEE MEETING / TUESDAY, MAY 22,12 -2 PM,
CONFERENCE ROOM 2A&yB
A Finance Committee meeting is scheduled for Tuesday, May 22 from 12 -2 p.m. in Conference
Room 2A &B. As a reminder, in keeping with past practice, no plans are being made to provide
lunch on the 22" d , so, if you could, please plan to bring a "brown bag" lunch or eat before the
meeting.
Enclosed is an agenda and background memos for each item to be discussed at the meeting.
Please feel free to contact me .if you have any questions in advance of the May 22 Finance
Committee meeting.
/s /Thomas L. Hedges
City Administrator
Agenda Information Memo
Finance Committee Meeting
May 22, 2012
II. NADER NOORYSHOKRY— REQUEST FOR INTEREST WAIVER ON
ASSESSMENT DEFERRAL AGREEMENT
ACTION TO BE CONSIDERED:
To provide direction to staff regarding Mr. Nader Nooryshokry's request for an interest
waiver on his assessment deferral agreement.
FACTS:
® On December 21, 2011 staff sent a courtesy letter to Mr. Nooryshokry informing
him that per the terms of a 1999 Assessment Deferral and Settlement
Agreement assessments were being placed on his properties for collection
beginning with taxes payable in 2012.
In res to the letter Mr. Nooryshokry called staff asking for forgiveness of
the interest on the deferral and was asked to write a letter making a formal
request that could be processed by staff to the City Council.
® Mr. Nooryshokry sent that letter dated March 10., 2012 to City Administrator
Hedges.
• At the March 20, 2012 Listening Session the matter was directed to the Finance
Committee for consideration.
• Mr, Nooryshokry has been advised of this meeting and was informed that the
— Finance- C–o.mmittee- would- have- the - background - material -in- advance -of the
meeting. When asked if he had to attend, staff responded to him that this
meeting was his opportunity to engage in a conversation with the elected
officials, although they may or may not have questions regarding his request.
His previous communications have included requests to make a "face to face"
appeal.
ATTACHMENTS:
e Enclosed on pages L " through is a copy of the 1999 Assessment
Deferral and Settlement Agreement.
• Enclosed on page C � is a copy of the staff letter advising Mr. Nooryshokry
of the assessments being levied.
® Enclosed on page is a copy of Mr. Nooryshokry's letter requesting the
waiver of interest.
• Enclosed on page ,1 is a chronological summary of the property platting,
the improvement projects, the original assessments, the court challenge, the
agreement, and the new assessments.
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ASSESSMENT DEFERRAL AND SETTLEMENT AGREEMENT
1631461
This Assessment Deferral and Settlement Agreement ( "Agreement ") is made this 2 .day
Of J cL L-Y , 1999, by and between NADER NOORYSHOKR:Y and GITY NOORYSHOKRY,
husband and wife, (hereinafter "Landowners "), and the CITY OF EAGAN, a Minnesota municipal
corporation (hereinafter "City ") (hereinafter collectively referred to as the "Parties ").
WHEREAS, Landowners are the fee owners of property located in the City of Eagan, County
of Dakota, State of Minnesota and legally described as: ...
V� Lot 1, Block 1, Joseph A, Spande First Addition, except t e ast 9,0•f'6et thereof. I - Ll -q ,b(.) - o:�a -a
dm
1 D " Y�f �a�) -C ?I. r >
WHEREAS, as part of Public Improvement Project No, 663 (hereinafter the "Project "), the
(! i Property was assessed, using athree (3) lot oqt lvalent formida,.for the following:
Improvement Amount
Water Lateral $1 5,165.93
Servic Pairs for Water /Sewer $ 8
Street and Storm Sewer Trunk $13,500.00
TOTAL: $36,855.93
(hereinafter the "Assessment ");
WHEREAS, the Landowners objected to the Assessment and filed a Notice of Appeal of the
assessment with the Dakota County District Court captioned Nader Nooryshokry v, City of Eagan,
(District Court File No. C1 -99 -8095) (hereinafter the "Assessment Appeal. "); and
WHEREAS, the Parties are desirous of resolving the Assessment Appeal tipon the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. the.
Parties do hereby agree as follows:
Ll
i
l , Settlement of Assessment Appeal The Assessment against the Property is hereby
reduced to the following:
Improvement Assessment Amount
Water Lateral $ 9,310.00
Service.Pairs for Water /Sewer $ 8,190,00
Street and Storm Sewer Trunk $13500.00
TOTAL: $31,000,00
(hereinafter the "Reduced Assessment ").
2, Allocation of Reduced Assessment, The Reduced Assessment against the Property
shall be paid as follows:
A. Immediate .Assessment The Property shall be immediately
assessed for the following:
Improvement Assessment Amount
Water Lateral $ 3,103.33
Service Pairs for Water /Sewer $ 2,730.00
f 1 Street and Storm Sewer Trunk 4,500.00
TOTAL: $10,333.33
(hereinafter the "Immediate Assessment ").
__. The Imm ediate Assessment will be pay able over a term of fifteen ( 15 )
years at six and one -half percent (6' %) interest.
B, Deferred Anessrn_e_ nt . The remaining portion of the Reduced
Assessment, namely:
Improvement Assessment Amount
Water Lateral $ 6,206.67 -
3 iQ� 3
'Service Pairs for Water /Sewer $ 5,160.00 - 0.01
Street and Storm Sewer Truiflc $ 9 —
TOTAL: $20,666,67
(hereinafter the "Deferred Assessment" )
shall be deferred as set forth below.
2
I
The Deferred Ass;�sstxlent shall be'deferred without interest until
�July.�31 `2001 Ind shall thereafter accrue interest at the rate of six
and one -half percent (6 ' /Z %) per annum, Said deferment shall
end if the Property is sold or until December 31, 2011, whichever
occurs first.
I _ Then, the Deferred Assessment shall be payable over a term of five
I (5) years at six and one half percent interest per annum (6 ' /z% per
annum).
3. Waiver. The Landowners hereby waive their right to object or appeal to the
Immediate Assessment or tile Deferred Assessment, pursuant to Minn. Stat. §429.081
and further waive notice of hearing on this Agreement.
4. Settlement of Assessment Appeal The Parties shall execute a Stipulation of
Dismissal With Prejudice, dismissing the assessment appeal.
5. Binding Effect This Agreement shall be binding upon and inure to the benefit of the
Parties' heirs, successors and assigns and shall rtin with the land.
P tricia B. Awada
Its: Mayor
By" VanOverbeke
3
(0
STATE OF MINNESOTA)
)ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this A day of ,
1999, by Nader Nooryshokry and Gity Nooryshokry, husband and wife, a 11
MARK D, MOHL E
NO'fAR�pUfl
0� �
�•rv� •..;�,��'�� � qh „oTA ary Public
2���Y'SLN'h::%'' � .[• ;�i�;I:.",,�:,l�n7liu'.+J�1A ,�1�2 u S
STATE OF MINNESOTA)
)ss,
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this 7,L•(.day of .a� ,
1999, by Patricia E. Awada and E, J. VanO•verbeke, the Mayor and Clerk of the Ci of Eagan, a
Minnesota municipal corporation, on behalf of the municipal corporation..
Noiar a is
APPROVED AS TO FORM:
City Attorney's Office
Dated: (e15 kl,�
APPROVED AS TO CONTENT:
Public Works Department
Dated: /57/J9
4
JUDY M, JENKINS
NOTARY PUBLIC MINNESOTA
My Commisslun Expires Jan-3
Noiar a is
APPROVED AS TO FORM:
City Attorney's Office
Dated: (e15 kl,�
APPROVED AS TO CONTENT:
Public Works Department
Dated: /57/J9
4
n �
THIS INSTRUMENT WAS DRAFTED BY:
Al" I �
SEVERSON, SHELDON, DOUGHERTY &
MOLENDA, P,A,
7300 West 147th Street, Suite 600
Apple Valley MN 55124
(61.2) 432 -3136
(RBB /1anw #20616885)
Project 663
5
i
December 21, 2011
Nader and Gity Nooryshokry
1550 Highview Ave
Eagan, MN 55121
Re: 1999 Assessment Deferral and Settlement Agreement
Dear Nader and Gity,
This is a reminder that according to the Assessment Deferral and Settlement Agreement
1631461 between you and the City of Eagan, the deferment of the Deferred Portion of
the special assessment related to Public Improvement Project #663 ends December 31,
2011. A copy of the agreement is enclosed.
According to the agreement, parcels 10- 49800 -01 -010 and 10- 49800 -01 -030 are
assessed for the $34.,659.74 total, where $20,666.67 is the original deferred assessment
and $13,993:07 is interest accrued from July 31, 2001 to December 31, 2011. The
assessment is payable over a term of five years at six and one -half percent interest per
— annum. —T -he- assessment amount will- be- cer- tified -to- Dakota- County-to -be- collected -with
your property taxes over the next five years, beginning with the taxes payable in 2012.
Payment due in 2012 is $9,184.86.
If you have questions please call Alexandra O'Leary at 651 -675 -5032.
Sincerely,
Tom Pepper
Chief Financial Officer
Encl.; Assessment Deferral and Settlement Agreement
M
March 10,2012
To the City of Eagan
Mr, Thomas I- Iedges
City Administrator
From Nader and Gity Nooryshokry
1556 Highview Ave.
Eagan, MN 55121
Re: 1999 Assessment Deferral and Settlement Agreement
Dear Mr. Hedges,
In response to the letter on December 21", 2011 received from the City of Eagan, I would like
to express my concern about the total amount of the assessment and added interest on my
properties. Based on the agreement concluded on July 24,1999 between the City of Eagan and
I, a balance of $20,666.67 was left on 2 properties.
My concern is the $13,993.07 interest added on top of the original assessment amount. I would
like to contest this matter due to economic hardship and soft:real estate market which has left me
unable to sell nay properties and pay my original assessment. My request is that I do not want
this balance added to my property taxes and assessment since I am not able to pay this total
amount, which will lead to default and a greater loss of my property which I have lived over 10
years.
At this point, I am asking the City of Eagan to agree to accept the original assessment amount
of $20,666,67, and waive the added interest which I can not afford. With this proposal, I have
every intention to pay the original assessment, as I will be borrowing the funds in order to take
care of this matter as my growing concern of my properties and home at risk of loss. I believe
that City of Eagan would like to help to the resident of this community. I wanted to thank you for
your time and consideration, Please feel free to contact me with any questions or concerns you
may have, and I look forward in hearing from you soon.
Sincerely, �y-
Nader Nooryshokr y `J
Chronological Summary of Assessment/Platting Activity 16- May -1.2
Water Services Street
Lateral Wat/Sew Storm Tr.k. Total
City Improvements (Approved by CC April 7, 1998)
Lot 1 Block 1 Joseph A. Spande Addition
(10 -401 QO -01 -001)
Project 663 Assessed three (3) lot equivalents 15,165.93 8,190.00 13,500.00 36,855.93
Assessments (Approved by CC May 4, 199.9)
Assessment Appealed to District Court (Notice of Appeal Received May 19,1999)
Reduced by agreement to ; } ;9,31y0=00`z8,�90 °04t} 13k50� O 5, 37OU0400
Reduction 5,855.93 - - 5,855.93
Parcel 10-40100-01 -001 Subdivided To: (Preliminary 3 -16 -1999, Final 10- 5- 1999)
10- 49800 -01 -010 (House built in 2000 current property owners are Nader & Gity Nooryshokry)
(Estimated Property Value $487,500)
10 49800 - 01 - 020 (House built in 2004 current property owners are Nader & Gity Nooryshokry)
.(Estimated Property Value $580,400)
10- 49800 -01 -030 (Vacant lot current property owners are Nader & Gity Nooryshokry)
(Estimated Peoperty Value $61,100)
Amount Assessed Per Agreement (Signed by City July 24,1999) (One Lot)
In 1999 to parcel 10- 49800 -01 -020 3,103.33 2,730.00 4,500.00 10,333.33
Paid in full in 1999
Amount Deferred Per Agreement (Signed by City July 24, 1999) (Two Lots)
Parcel 10-49800-01-010 3,103.33 2,730.00 4,500.00 10,333.33
Parcel 10-49800-01-030 3,103.34 2,730.00 4,500.00 10,333.34
Deferment Terms
Without interest until July 31, 2001
Interest at 6.5% per annum after July 31, 2001
Deferment ends if the property is sold or until December 31, 2011, whichever occurs first
New Principal:
Original Principal 20,666.67
Accrued Interest 13,993.06
Total 34,659.73
New Assessment Per Deferment Agreement:
Assessment Rate 6.50%
Term 5 years (2012 - 2016)
Assessed to:
Parcel 10- 49800 -01 -010 17,330.00
Parcel 10- 49800 -01 -030 17, 330.00
34,660,00
Agenda Information Memo
Finance Committee Meeting
May 22, 2012
III. FIRE ADMINISTRATION LEASE MODIFICATION -- JBL COMPANIES
ACTION TO BE CONSIDERED:
To make a recommendation to the City Council regarding the modification of the lease for the
former Fire Administration Building for JBL Companies.
FACTS:
When the Fire Safety Center opened in 2011, the City moved forward to dispose of former Fire
Station #2 and the former Fire Administration Building. Station 42 was sold to Competition
Engines and remodeled to be the receiver site for the business that was .moving out of Cedar
Grove. The timing of the potential sale of the former Fire Administration Building was more
challenging due to the general economy and the general office vacancy market in the city and the
region.
At that time, the City was approached by Jeff Larson of JBL Companies, a long -time, local
property management firm, who indicated that he was about to relocate his offices. He
expressed interest in leasing the Fire Administration Building on a flexible basis to permit the
City time to complete the rezoning of the property and consider its options for selling it.
While the City does not intend to be a landlord in the long term, this offer appeared to be a win -
win for the parties, by generating income while the economy improved and the land use steps
were bang talceir. 1 -'ving - the buildinTumupied also permitted - the City save a.substantial - —
amount on its insurance, which is substantially lower if the building is occupied than if it is
vacant.
JBL tools occupancy of the building in July, 2011, and has operated there since that time. In
January, 2012, it came to staff's attention that the monthly rental payment from JBL had not been
received. Staff followed up with Mr. Larson, who apologized for the oversight and indicated that
it would be corrected.
Since that time, JBL has made rent payments through the month of February, but in follow up
discussions, staff was informed by Mr. Larson that the firm had experienced the loss of a number
of their clients .around January 1 and, despite a reduction in staff, it was continuing to experience
cash flow challenges. Staff and the City Attorney consulted in this regard and, while Mr. Larson
expressed a desire to modify the lease to bring it current, it was determined that to maintain the
arm's length relationship with JBL, it was necessary to issue a notice of default.
On April 18, 2012, Mr. Larson submitted a proposal for the modification of the lease that would
provide for a modification of the area of the building under JBL's control, permission to sublease
�a
to additional tenants and make leasehold improvements for that purpose and to define a revised
payment and repayment schedule to come current and set a modified lease rate. That proposal is
enclosed for your review.
Within the last several days, staff has been advised that Mr. Larson may be able to secure
alternative space at another location and may choose to vacate the former Fire Administration
Building in lieu of modifying the lease. Staff will be discussing this option with Mr. Larson on
Monday afternoon and will advise the Committee of the outcome of the discussion. The month
to month nature of the lease would have permitted such .a decision, whether the current situation
had arisen or not. If Mr. Larson chooses this option, it would still be expected that JBL pay the
outstanding balance of the lease obligations until the relocation would occur.
Depending upon whether the Committee recommends a modification of the lease or JBL
relocates, the Committee will also be asked for additional input on the options of leasing the
property to another third party until the commercial real estate market further improves or taking
the steps to list the property for sale of solicit proposals for that purpose. As the Committee is
aware, at this point the property has been reguided and rezoned and could be sold to a third party,
if a satisfactory price could be achieved.
ATTACHMENTS:
• Lease Agreement on pages �'\ through `3S
® City Attorney correspondence on pages ?-\_ through
• JBL Proposal for Lease Modification on pages g through L40
�_:?_1
LEASE
—A This Lease Agreement ( "Agreement ") is made and entered into this �ay of
& 2011., by and between the City of Eagan, a Mint municipal
corporation, ( "Landlord ") and JBL Companies, Commercial Real Estate Services, Inc,, a
Minnesota corporation d/b /a JBL Companies ( "Tenant "),
DEFINITIONS
"Property .and Building" - That certain real property located the City of Eagan, County of
Dakota and located at 3795 Pilot Knob Road, including all buildings and site improvements
located thereon,
"Demised Premises" - That certain Building located at 3795 Pilot Knob Road consisthlg of
10,000 square feet of office space and approximately 2,600 square feet of garage space, The
Demised Premises includes the parking lot and landscaped areas as well,
TERM
1. For :and in consideration of the rents, terms, provisions and covenants herein, Landlord
hereby lets, leases and demises to Tenant the Demised Premises on a month- to�ntonfh
basis commencing on the July 1, 2011 (the "Conuu,encement Date ") and expiring upon
either party providing a minimum 30 -day notice that it does not intend to renew this
l ease- (the "Expiration - Date "),- uizless- sooner- teritninated -as ltereh provided�Notice
must be given prior to the first day of any calendar month to be effective for the
following month, Notwithstanding any contained herein to the contrary, in the event
that Landlord desires to terminate tl-ds lease Agreement within the first six months from
the effective date, Landlord shall provide at least 60 days notice that it does not intend to
renew this .Agreement.
BASK RENT
2. Tenant shall to pay to Landloxd base rent for the Demised Premises ( "Base Rent "),
exclusive of any other charge provided for ir1 this Lease to be paid by Tenant, as set forth
below, Base Rent shall be payable in equal monthly ixtstallmelts, in advance,
commencing on the first full month of the term of this Lease, and continuing on the first
day of each subsequent month during the term hereof, Base Rent shall be paid without
setoff, deduction, demand or cotmterclairn of any nature whatsoever, in advance on the
first day of each and every calendar month during the term hereof,
H
Monthly Base Rent - Officg 10,000 sq, ft, at $8,00 per sq, ft, for a total of
$6,666,67 per month (the lower level -- the basement is part of the office space
rented)
Monthly Base Rent -_Garage; 2,600 sq. ft, at $4,00 per sq, ft, for a total of
$866,67 per month
Total Base Rent Each Month 7 533 3
M the event the county removes the tax exempt status for the Demised Premises, the
Tenant .shall reimburse Landlord for any taxes assessed to the City and this shall be
deemed "Additional Rent," All Rent and Additional Rent and other sums payable
hereunder by Tenant which are not paid when due shall bear interest from the clue date
at the rate of twelve percent (12 %) per annum (the "Default Rate "),
COVENANT TO PAY RENT
3. The covenants of Tenant to pay the base Rent are each independent of any other
covenant, condition, provision or agreement contained ha this Lease, All rents are
payable to Landlord at;
City of Eagan
Attn: Christina. Scipioni, Clerk
3830 Pilot Knob Road
Eagan, MN 55122
(or such other address indicated M writing by Landlord),
UTILITIES
4, The Demised Premises contains mains acid conduits to supply water, gas, electricity and
sanitary sewage to the Properly, Tenant shall pay, when due, all charges for .sewer
usage or rental, garbage, disposal, refuse removal, water, electricity, gas, fuel oil, LP,
gas, telephone and any other utility services or energy source furnished to the Demised
Premises during the term of this Lease, and any renewal or extension thereof, if
Landlord elects to furnish any of the foregoing utility services or other services
furnished or caused to be furnished to Tenant, then the rate charged by Landlord shall
not exceed the rate Tenant would be required to pay to a utility company or service
company furnishung any of the foregoing utilities or services,
6
`S
CARE AND REPAIR OF DEMISED PREMISES
5, Tenant shall., at all tines throughout the term of this Lease, including renewals and
extensions, and at its sole expense, keep and maintain the Dernised .Premises in a clean,
safe, sanitary and first class condition and h1 compli.aiLee with all applicable laws, codes,
ordinances, rules and regulations. Tenant's obligations hereunder do not include the
maintenance, repair and replacement, if necessary, of heathng and air conditioning
fixtures, equipment, and systems (the "HVAC Equipment "), When used h1 this
provision, the term. "repairs" shall include replacements or renewals when necessary,
and all such repairs made by the Tenant shall be equal In quality and class to the original
work. Tenant shall keep accurate and complete records of the performance of all
scheduled maintenance under such contract and shall provide copies thereof to
Landlord from time to time upon request by Landlord, The Tenant shall keep and
maintain all portions of the Demised Premises and the sidewalk and areas adjohnhng the
same in a clean and orderly condition, free of accumulation of dirt, and rubbish,
If 'Tenant fails, refuses or neglects to maintain or repair the Demised Premises as
required in this Lease, after notice shall have been given Tenant ]n accordance wi
Article 33 of this Lease, Landlord may make :such repairs without liability to Tenant for
any loss or damage that may accrue to Tenant's merchandise, fixtures or other property
or to Tenant's business by reason thereof, and upon completion thereof, Tenant shall pay
to Landlord all costs plus 15% for overhead incurred b Landlord in making such
repairs upon presentation to Tenant of bill therefor; provided, however, that no notice
shall be required in the event of any liazardous or emergency condition,
Landlord shall repair, at its expense, the structural portions of the Buildhng; provided,
------- where :structural- repairs-are .- required- to- .bemade -by - reasoia - -of -_the- acts -of -- -
Tenant, the costs thereof shall be borne by Tenant and payable by Tenant to Landlord
upon demand,
Except as otherwise provided herein, the Landlord shall be responsible for all outside
maintenance of the Demised Premises, including grounds and parking areas, as well as
maintenance of any and all landscaping, irrigation and green space, Tenant shall be
responsible for all snow removal,
� �P
SIGNS
6, Any sign, lettering, picture, notice or advertisement installed on or in any part of the
Property and visible from the exterior of the Building, or visible from the exterior of the
Demised Premises, shall be subject to Landlord's prior approval and shall be installed at
Tenant's expense, In the event of a violation of the foregoing by Tenant, Landlord may
remove the same without any liability and may charge the expense incurred by such
removal to Tenant,
ALTERATIONS, INSTALLATION, FIXTURES /AS -IS
7. Tenant hereby accepts the condition of the Demised Premises hi an "As -Is, Where -Is"
basis and Landlord makes no representation as to the suitability of the Demised
Premises for any purpose, Tenant acknowledges that there are miscellaneous cubicles,
office furniture and appliances that have been left on the Demised Premises, Tenant
acknowledges that these are the property of Landlord. and may not be removed by
Tenant and they shall remahn on the Demised Premises following termination of this
Agreement,
Except as hereinafter provided, Tenant shall not make any .alteration, additions, or
improvements In or to the Demised Premises or add, disturb or in any way change any
plumbing or wiring thereha without the prior written consent of the Landlord, In the
event alterations are required by any governmental agency by reason of the use and
occupancy of the Demised Premises by Tenant, Tenant shall make such alterations at its
own cost and expense after first obtaining Landlord's approval of plans and
specifications therefor and furnishing such hldenullfication as Landlord may reasonably
_ require .__agahnst._li.eils,_costs,_ damages -- and _ - expenses-- arisha.g�-oui -of- such - alterations, --
Alterations or additions by Tenant must be made hn compliance with all laws,
ordinances and governmental regulations affecting the Property and Tenant shall
warrant to Landlord that all such alterations, additions, or improvements shall be in
strict compliance with all relevant laws, ordinances, goveriunental regulations, permits
and insurance requirements. Construction of such alterations or additions shall
commence only upon Tenant obtaining and exhibiting to Landlord the requisite
approvals, licenses and permits and indemnification against liens, All alterations,
installations, physical additions or improvements to the Demised Premises made by
Tenant shall at once become the property of Landlord and shall be surrendered to
Landlord upon the termination of this Lease; provided, however, this clause shall not
apply to movable equipment or furniture owned by Tenant, which may be removed by
Tenant at the end of the term of this Lease if Tenant is not then in default, Tenant shall
be responsible for all costs related to improvements or modifications to the Demised
Premises required or necessary to comply with The Americans With Disabilities Act of
1990 (ADA), or similar statutes or law,
9
111
POSSESSION
8, Except as hereinafter provided, Landlord shall deliver possession of the Demised
Premises to 'Tenant hi the condition required by this Lease on or before the
Commencement Date, Landlord shall not be liable In any respect for any failure to
deliver possession of the Demised Premises to Tenant on or before the Commencement
Date, Tlie rentals herein reserved shall commence on the date when possession of the
Demised Premises is delivered by Landlord to Tenant, Any occupancy by Tenant prior
to the beginning of the term shall hn all respects be the same' as that of a Tenant tinder
this Lease, Landlord shall have no responsibility or liability for loss or damage to
fixtures, facilities or equipment installed or left on the Demised Premises,
SECURITY AND DAMAGE DEPOSIT
9, Tenant contemporaneously with the execution of this Lease, has deposited with
Landlord the sum of Two Thousand Five Hundred and 00/100 Dollars ($2,500,00),
receipt of which is acknowledged hereby by Landlord, which deposit is to be held. by
Landlord, without liability for interest, as a security and damage deposit for the faithful
payment and performance by Tenant of all of its obligations hereunder, during the term
hereof and any extension hereof, Landlord may co- mingle such deposit with Lanidlord's
own funds and to use such security deposit for such purpose as Landlord may
determhie, In the event of the failure of Tenant to keep and perform any of the terms,
covenants mid conditions of this Lease to be Kept and performed by Tenant during the
term hereof and any extension hereof, and without lunithng any other remedy available
to Landlord, then Landlord either with or without terminating this Lease, may (but shall
not be required to) apply such portion of said deposit as may be necessary to
- _ -- - _ compensates -repay Landlord -fox- all. losses_or- damages_sustained_or to be_ sustained -by - - -. -- — - -- -
Landlord due to such breach on the part of Tenant, itncludirig, but not limited to overdue
and unpaid rent, any other , n payable by Tenant to Landlord pursuant to tlne
provisions of this Lease, damages or deficiencies In any reletting of the Demised
Premises, and reasonable attorney's fees incurred by Landlord, Should the entire
deposit or any portion thereof, be appropriated and applied by Landlord., hi accordance
with the provisions of this paragraph, Tenant upon written demand by Landlord, shall
remit forthwith to Landlord a sufficient amount of cash to restore said security deposit
to the original sum deposited, and T'enant's failure to do so withhl five (5) days after
receipt of such demand shall constitute a breach of this Lease, Said security deposit
shall be returned to Tenant, less any amounts retained by Landlord pursuant to the
provisions of this paragraph, at the end of the term of this Lease or any renewal thereof,
or upon the earlier termination of this Lease, Tenant shall. have no right to anticipate
return of said deposit by withholdhig any amount required to be paid pursuant to the
provisions of this Lease or otherwise,
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Iii the event Landlord shall sell the Property, or shall otherwise convey or dispose of its
interest in this Lease, Landlord may assign said security deposit or any balance thereof
to Landlord's assignee, whereupon Landlord .shall be released from all liability for the
return or repayment of such security deposit and Tenant shall look solely to the said
assignee for the return and repayment of said security deposit. Said security deposit
shall not be assigned or encumbered by Tenant without the written consent of Landlord,
and any assignment or encumbrance without such consent shall not bind Landlord. In
the event of any xightful and permitted assignment of this Lease by Tenant, said security
deposit shall be deemed to be held by Landlord as a deposit.made by the assignee, and
Landlord shall have no further liability with respect to the return of said security deposit
to the Tenant,
USE
10, The Demised Premises shall be used and occupied by Tenant solely for the purposes of
general office and educational conference facility use so long as such use is in
compliance with all applicable laws, ordinances and governmental regulations affecting
the Building and Demised Premises, 'Ih.e Demised Premises shall not be used hi such
imarmer that, in accordance with any requirement of law or of any public authority,
Landlord shall be obligated, as a result of the purpose or maiuler of said use, to male
any addition or alteration to or in the Building, The ..Deimised.Premises shall not be used
in any manner which will increase the rates required to be paid for public liability or for
fire and extended coverage insurance covering the Demised Premises. Tenant shall
occupy the Demised Premises, conduct its business and control its agents, employees,
invitees and visitors in such a way as is lawful and reputable, and will not permit or
create any nuisance, noise, odor, or otherwise interfere with, annoy or disturb any other
_tenant-in the_ B wilding _in.its_normal:bushiess_o. Aerations__ or_ Latidlor_d._in_its_mailageinen.t
of the Building, Tenant's use of the Demised Premises shall conform to all the
Landlord's rules and regulations .relating to the use of the Demised Premises, Outside
storage on the Demised Premises of any type of equipment, property -or materials
owned or used by Tenant or its customers or suppliers shall not be permitted,
ACCESS TO DEMISED PREMISES
11, The Tenant agrees to permit the Landlord and the authorized representatives of the
Landlord to enter the Demised Premises at all tunes during usual business hours for the
purpose of inspecthlg the same and making any necessary repairs to the Demised
Premises and performing any work therein that may be necessary to comply with any
laws, ordinances, rules, regulations or requirements of any public authority or of the
Board. of Dire Underwriters or any similar 'body or that the .Landlord may deem
necessary to prevent waste or deterioration in connection with the Demised Premises,
Nothir g herein shall imply any duty upon the part of the Landlord to do any such work
which, under any provision of this Lease, the Tenant may be required to perform and
V�
the performance thereof by the Landlord shall not constitute a waiver of the Tenant's
default in failing to perform the same. The Landlord may, during the progress of any
work in the Demised Premises, keep and store upon the Demised Premises all necessary
materials, tools and equipment, The Landlord shall not in any event be liable for
Inconvenience, annoyance, disturbance, loss of business, or other damage of the Tenant
by reason of snaking repairs or the performance of any work in the Demised Premises,
or on account of bringing materials, supplies and equipment into or through the
Demised Premises during the course thereof and the obligations of the Tenant under this
Lease shall not thereby be affected h-L any manner whatsoever.
Landlord reserves the right to enter upon the Demised Premises at any time in the event
of an emergency and at reasonable hours to exllibitthe Demised Premises to prospective
purchasers or others; and to exhibit the Demised Premises to prospective Tenants and to
the display "For Sale" or "For Lease" or similar signs on the Property or windows or
doors in the Demised Premises,
DAMAGE OR DESTRUCTION
12. In the event of any damage or destruction to the Demised Premises by fire or other cause
during the tern hereof, the following provisions shall apply,
a, If the Building is damaged by fire or any other cause to such extent that the cost
of restoration, as reasonably estimated by Landlord, will equal or exceed fifty
percent (50 %) of the replacement value of the Building (exclusive of foundations)
just prior to the occurrence of the damage, then Landlord may, no later than the
thirtieth (30ai) day following the damage, give Tenant written notice of
_ Landlord's_ election _to_terminate_this_Lease.
b. If the cost of restoration as estimated by Landlord will equal or exceed seventy -
five percent (75 %) of said replacement value of the Building and if the Demised
Premises are not suitable as a result of said damage for the purposes .for which
they are demised hereunder, in the reasonable opinion of Landlord and Tenant,
then Tenant may, no later than the thirtieth (30th) day following the damage,
give Landlord a written notice of election -to terminate this Lease.
c. If the cost of restoration as estimated by Landlord shall amount to less than fifty
percent (50 %) of said replacement value of the Building, or if, despite the cost,
Landlord does not elect to terminate this Lease, Landlord shall restore the
Building and the Demised Premises with reasonable promptness, subject to
delays beyond Landlord's control and delays in the receipt of insurance proceeds
by Landlord; and Landlord shall not be responsible for restoring or repairing
leasehold. improvements of the Tenant,
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d, In the event either of the elections to terminate is properly exercised, this Lease
shall be deemed to terminate on the date of the .receipt of the notice of election
and all rents shall be paid up to that date, Tenant shall have 116 claim against
Landlord for the value of any unexpired term of this Lease,
e. In any case where damage to the Building shall .materially affect the Demised
Premises so as to render them unsuitable in whole or in part for the purposes for
which they are demised hereunder, then, unless such destruction was wholly or
partially caused by the negligence or breach of the terms of this Lease by Tenant,
its employees, agents or representatives, a portion of the rent based upon the
extent to which the Demised Premises are rendered unsuitable shall be abated
until repaired or restored., If the destruction or damage was wholly or partially
caused by -negligence or breach of the terms of this Lease by Tenant as aforesaid
and if Landlord shall elect to rebuild, the rent shall not abate and the Tenant shall
remain liable for the same,
CASUALTY INSURANCE
1:3, a, In the event that the use of the Demised Premises by Tenant increases the
premium rate for insurance carried by Landlord on the improvements of which
the Demised Premises are a part, Tenant shall pay Landlord, upon demand, the
amount of such premium .increase, If Tenant installs any electrical equipment-
that overloads the power lines to the Building or its wiring, Tenant shall, at its
owin expense, matte whatever changes are necessary to comply with the
requirements of the insurance underwriter, insurance rating bureau and
governmental authorities having jurisdiction,
e. Tenant shall during the term of this Lease, obtairi and maintain in full force and
effect at its sole,cost and expense a policy or policies of insurance insuring all of
its personal property located within the Demised Premises from time to time, as
well as all tenant improvements made thereto, against loss or damage by fire,
explosion or other such hazards and contingencies for the full replacement value
thereof, Such policy or policies shall provide that thirty (30) :days written notice
must be given to Landlord prior to cancellation or modification thereof, Tenant
shall furnish evidence satisfactory to Landlord at the time this Lease is executed
and thereafter from time to time upon request by Landlord that such coverage is
in full force and effect.
PUBLIC LIABILITY INSURANCE
M Tenant shall during the term hereof, keep hi full force and effect at its expense a policy
or policies of public liability insurance with respect to the Demised Premises and the
business of Teznant.in amounts not less than $1,000,000 per occurrence, $2,000,000
C`
aggregate using current ISO General Liability forms or equivalent namffig the Landlord
as an additional insured, Such policy or policies shall provide that tl -.rty (30) days
written notice must be given to Landlord prior to cancellation or modification thereof,
Tenant shall furnish evidence satisfactory to Landlord at the time this Lease is executed
and •thereafter upon request by Landlord that such coverage is ha full force and effect,
DEFAULT OF TENANT
15, a, In the event of any failure of Tenant to,, pay any Base Rent or other amounts due
hereunder withh'i five (5) days after the same shall be due, or any failure to
perform any other of the terms, conditions or covenants of this Lease to be
observed or performed by Tenant with all reasonable diligence, but in any event
for more than thirty (30) days after written notice of such failure shall have been
given to Tenant, or if Tenant or an agent of Tenant shall falsify any report
required to be furnished to Landlord pursuant to the terms of this Lease, or if
Tenant or any guarantor of this Lease shall become bankrupt or insolvent, or file
any debtor proceedings, or any person shall file against Tenant or any guarantor
of this Lease in any court pursuant to any statute either of the United States or of
any state a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of Tenant's �or any such
guarahtor's property, or if Tenant or any such guarantor mal <es an assignment
for the benefit of creditors, or petitions for or enters into any similar
arrangement, or if any guarantor of this Lease shall be hi default in the
performance of any covenant, duty or obligation under any guaranty or other
agreement entered into with or h-i favor of Landlord and such default shall
remain uncured for a period of thirty (30) days or more after notice of such
Tenan sha]Lahan.d -onswr vavcate_the Demisecl_P_remises or_suffer this— --
Lease to be taken under any writ of execution (any one or more of the foregoing
shall constitute an "Event of Default "), then in any such event Tenant shall be in
default hereunder, and Landlord, in addition to any other rights and remedies it
may have, shall have the immediate right of re -entry and may remove all persons
and property from the Demised Premises and such property may be removed
and stored in a public warehouse or elsewhere at the sole cost of, and for the
account of Tenant, all without service of notice or resort to legal process and
without being ,guilty of trespass, or becoming liable for any loss or damage
which may be occasioned thereby,
b. Upon the occurrence of an Event of Default, Landlord shall have the right (in
addition to any other rights or remedies) to either terminate this Lease or, from
time to tune, without terminathig this Lease, to terminate Tenant's right of
possession of the Demised Premises, If Landlord terminates Tenant's right of
possession only, Landlord may, but shall in no event be obligated to, make such
alterations and repairs as may be necessary in order to relet the Deirdsed
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Premises, and relet the Demised Premises or any part thereof upon such terns. or
terms (which may be for a term extending beyond the terse of this lease) and at
such rental or rentals and upon such other terns and conditions as Landlord in
its sole discretion may deem advisable. Upon any such reletth all rentals
received by the Landlord from such reletting shall be .applied first to the
payment of any indebtedness other than rent due hereunder froin Tenant to
Landlord; second, to the payment of any costs and expenses of such reletting,
Including brokerage fees and attorney's fees and costs of such alterations and
repairs; third, to the payment of the rent due and unpaid payment of future rent
as the same may become due and payable hereunder, If such rentals received
from any such reletting during any month are less than that to be paid during
that month by Tenant hereunder, Tenant, upon demand, shall pay any such
deficiency to Landlord, No such reentry or tat <hig possession of the Demised
Premises by Landlord shall be construed as an election on its - part to term
this Lease .unless a written notice of such intention is given to Tenant.
Notwithstanding any such reletting without termination, Landlord may at any
time after such to-entry ai.1d. reletting elect to terminate .tlds Lease, and in
addition to any other remedies it may have, it may recover from any Tenant all
damages it may incur by reason of such .breach, .including the cost of recovering
the Demised Premises, reasonable attorney's fees, and Including the worth at the
time of such termination of the excess, if any, of the amount of rent and charges
equivalent to rent reserved.in this Lease for the remainder of the stated tern over
the then reasonable rental value of the Demised .Premises for the remainder of
the stated term, all of - which amounts shall be immediately due and payable from
Tenant to Landlord.
option,_in_additlon io any - other_ rights_oi - remedies - available — to it hl this Lease or otherwise by law, statute or equity, spend such money as is
necessary to cure any default of Tenant herein and the amount so spent, and
costs incurred, including attorney's .fees in curing such default, shall be paid by
Tenant, upon demand,
d, In the event suit shall be brought for recovery of possession of the Demised
Premises, for the recovery of rent or any other amount due under the provisions
of this Lease, or ha connection with any Event of Default, and an Event of Default
shall be established, Tenant shall pay to Landlord all expenses incurred in
connection therewith, including attorney's fees, together with interest on all such
expenses at the Default Sate from the date of such breach,
e. Tenant hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining possession of
the Demised Premises, by reason of any Event of Default hereunder, or
to
otherwise, Tenant also waives any demand for possession of the Demised
Premises, and any demand for payment of rent and any notice of intent to re-
enter the Demised Premises, or of intent to terminate this Lease, other than the
novices above provided h1 this Article, and waives any and every other notice or
demand prescribed by any applicable statutes or laws,
f. No remedy herein or elsewhere in this Lease or otherwise by law, statute or
equity, conferred upon or reserved to Landlord shall be exclusive of any other
remedy, but shall be cumulative, and may be exercised from time to time and as
often as the occasion may arise,
HOLD HARMLESS
16, Except to the extent any liability for damage or loss is caused by the gross negligence of
Landlord, its agents or employees, Tenant shall hold harmless Landlord, the mayor,
councihnembers and Lm officers, agents and employees, from any liability for
damages to any person or property h, or upon the Demised Premises and the Demised
Premises, including the person and the property of Tenant and its employees and all
persons in the Buildhlg at its or their invitation or sufferance, and from all damages
resulting from Tenant's failure to perform the covenants or other provisions of this
Lease, All property kept, maintained or stored on the Demised Premises shall be so
kept, maintained or stored at the sole risk of Tenant, Tenant agrees to pay all sums of
money in respect of any labor, service, materials, supplies or equipment furnished or
alleged to have been furnished to Tenant in or about the Demised Premises, and not
furnished on order of Landlord, which may be secured by any mechanic's materialmen's
or other lien provided that Tenant may contest such Tien, upon providing Landlord
_ -- - Ctde- wah sekurity ag ainst su lien, any such 1 sir e duced .to fi naLjudgment and -if - -- such judgment or process thereon is not stayed, or if stayed and said stay expires, then
Tenant shall immediately pay and discharge said judgment. Landlord shall have the
right to post and maintain on the Denased Premises, notices of non - responsibility under
the laws of the State of Minnesota.
NON- LIABILITY
17, Landlord shall not be liable for damage to any property of Tenant or of others located on
the Demised Premises, nor for the loss of or damage to any property of Tenant or of
others by theft or otherwise, Without li niting the foregoing, Landlord shall not be liable
for any injury or damage to persons or property resulting from fire, explosion, ally
injury or damage to persons or property resulting from fire, explosion., falling plaster,
stearn, gas, electricity, water, rain or snow or leaks from any part of the Demised
Premises or from the pipes, appliances, or plumbing works or from the roof, street or
subsurface or from any other place or by dampness or by any such damage caused by
other Tenants or persons in the Demised Premises, occupants of adjacent property, of
11
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the buildings, or the public or caused by operations in construction of any private,
public or quasi�public work, Landlord shall not be liable for any latent defect in the
Demised Premises, All property of Tenant kept or stored on the Demised Premises shall
be so kept or stored at the risk of Tenant only and Tenant shall hold Landlord harmless
from any claims arising out of damage to or loss of the same, including subrogation
claims by Tenant's insurance carrier,
ASSIGNMENT OR SUBLETTING
1.8, Tenant agrees to -use and occupy the Demised .Premises throughout the entire term
hereof for the purpose or purposes herein. specified and for no other purposes, in the
manner and to substantially the extent now intended, and not to transfer or assign this
Lease or sublet said Demised Premises, or any part thereof, whether by voluntary act,
operation of 'law, or otherwise, without obtaining the prior written consent of Landlord
in each instance, Landlord recognizes that the following subtenants are affiliated with
Tenant and may occupy the Demised Premises; Colors Consulting; Emerson
Technologies; and JBL Maintenance, Tenant shall .seek such consent of Landlord by a
written request therefor, setting :forth such :information as Landlord may deem
necessary, Consent by Landlord may be withheld in Landlord's sole discretion,
Landlord's rights to assign, this Lease are and shall remain unqualified. No such
assignment or subleasiing shall relieve the Tenant from any of Tenant's obligations in this
Lease contained, nor shall any assignment or sublease or other transfer of this Lease be
effective unless the assignee, subtenant or transferee shall at • the time of such
assignment, sublease or transfer, assume in w riting for the benefit of Landlord, its
successors and assigns, all of the terms, covenants and conditions of this Lease thereafter
to be performed by Tenant mid shall agree ha writing to be bound thereby.
ATTORNMENT
19, 1x1 the event of a sale or assignment; of Landlord's interest in the Demised Premises or
this Lease, Tenant shall attorn to such assignee or other party and recognize such party
as Landlord hereunder; provided, however, Tenant's peaceable possession will not be
disturbed so long as Tenant faithfully performs its obligations under this Lease. Tenant
shall execute, on demand, any attornment agreement required by any such party to be
executed, containing such provisions as such party may require,
NOVATION IN THE EVENT OF SALE
20, a, In the event of the sale of the Buildhag, Landlord shall be and hereby is relieved
of all of the covenants and obligations created hereby accruing from and after the
date of sale, and such sale shall result automatically in the purchaser assuming
and agreeing to carry out all the covenants and obligations of Landlord herein,
12
as
b. The Tenant: agrees at any three and from time to time upon not less than ten (10)
days prior written request by the Landlord to execute, acknowledge and deliver
to the Landlord a statement In writirng certifying that this Lease is unnnodified
and in full force and effect (as modified and stating the modifications, if any) anal
the dates to which the base rent and other charges have been paid in advance, if
any, it being intended that any such statement delivered pursuant to this
paragraph may be relied upon by any prospective purchaser of the fee or
mortgagee or assignee of any mortgage upon the fee of the Demised Premises,
SUCCESSORS AND ASSIGNS
21. The terms, covenants mad conditions hereof shall be binding upon and inure to the
successors and permitted assigns of the parties hereto,
REMOVAL OF FIXTURES
22, Notwithstanding anything contained in this Lease, if Landlord requests then Tenant will
promptly remove at the sole cost and expense of Tenant all fixtures, equipment and
alterations made by Tenant, at the time Tenant vacates the Demised Premises, and
Tenant will promptly restore said Demised Premises to the condition that existed
immediately prior to said fixtures, equipment and alterations having been made, all at
the sole cost and expense of Tenant,
QUIET ENJOYMENT
23. Landlord warrants that it has full right to execute and to perform this Lease and to grant
- -- th esta demi sed, and that Tenant, upon payment o the rents and other amounts clue -- -- and the performance of all the terms, conditions, covenants and agreements on Tenant's
part to be observed and performed under this Lease, may peaceably and quietly enjoy
the Demised Premises for the bushless uses permitted hereunder, subject, nevertheless,
to the terms and conditions of this Lease,
RECORDING
24, Tenant shall not record this Lease or any memorandum hereof without the written
consent of Landlord,
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OVERDUE PAYMENTS
25, All monies due under this Lease from Tenant to Landlord shall be due on demand,
unless otherwise specified and if not paid when due, shall result in the hnposition of a
service charge for such 'late payment in the amount of twelve percent (12 %) of the
amount due,
SURRENDER
26, On the Expiration Date or upon the termination hereof on a day other than. the
Expiration Date, Tenant shall peaceably surrender the Demised Premises broom. -clean in
.good order, condition and repair, reasonable wear and tear only excepted. O.tn or :before
the Expiration Date or upon termination of this Lease on a day other than the Expiration
Date, Tenant shall, at its expense, remove all trade fixtures, personal property,
equipment and signs, together with any fixtures, alterations or improvements required
by Landlord and any property not removed shall be deemed to have been abandoned,
Any damage caused in the removal of such items shall be repaired by Tenant and at its
expense, All alterations, additions, improvements and fixtures (other than trade
fixtures) which shall have been made or installed by Landlord or Tenant upon the
Demised Premises and all floor covering so installed shall remain upon and be
surrendered with the Demised Premises as a part thereof, without disturbance,
molestation or injury, and without charge, at the expiration of termination of this Lease,
If the Demised Premises are not surrendered on the Expiration Date or the date of
termination, Tenant shall indemnify Landlord against loss or liability arising out of or
relating to any claims resulting from such failure, including without linnitation, any
claims made by any succeeding Tenant founded on such delay, Tenant shall promptly
_ surrender all ke for the _DeYnised Prernis s Landlord at the plaee_tlnen_fixed_ for_ —__. __
payment of rent and shall inform Landlord of combinations of any locks and safes on
the Demised Premises, ,
HOLDING OVER
27, In the event of a holding over by Tenant after expiration or termination of this Lease
without the consent in writing of Landlord, Tenant shall be deemed a Tenant at
sufferance and shall pay rent for such occupancy at the rate of one and one -half the last -
current aggregate Base Pent, prorated for the entire holdover period, plus all attorney's
fees and expenses incurred by Landlord in enforcing its rights hereunder, plus any other
damages occasioned by such holding over,
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ABANDONMENT
28, In the event Tencurt shall remove its fixtures, equipment or machinery or shall vacate the
Demised Premises or any part thereof prior to the Expiration Date of this Lease, or shall
discontinue or suspend the operation of its business conducted on the Demised
Premises for a period of more than thirty (30) consecutive days (except during any time
when the Demised Premises may be rendered untenantable by reason of fire or other
casualty), then in any such event Tenant shall be deemed to have abandoned the
Demised Premises and such abandonment shall constitute an Event of Default under the
terms of this Lease,
CONSENTS BY LANDLORD
29. Whenever provision is made under this Lease for Tenant securing the consent or
approval by Landlord, such consent or approval shall only be valid if it is made in
writing,
NOTICES
30, Any notice required or permitted under this Lease shall be deemed sufficiently given or
secured if sent by registered or certified return receipt mail to the following:
If to Tenant: JBL Companies
3795 Pilot Knob Road
Eagan, MN 55122
-
Attn: Christina Seipioni, Clerk
3830 Pilot Knob Road
Eagan, MN 55121
With a copy to: Severson, Sheldon, Dougherty & Molenda, P,A,
Attn: Robert B, Bauer
7300 West 147 Street, .Suite 600
Apple Valley, MN 55124
Either party may by like written notice at any time designate a different address to which
notices shall subsequently be sent,
15
a?
RULES AND REGULATIONS
31. Tenant shall observe and comply with such rules and regulations as Landlord may from
three to time prescribe, on written notice to Tenant, for the safety, care, cleanliness and
operation of the Building.
INTENT OF PARTIES
32, Except as otherwise provided herein, the Tenant covenants and agrees that if it shall at
any time fail to pay any cost or expense required to be paid by Tenant hereunder, or fail
to take out, pay for, maintain or deliver any of the Insurance policies above required, or
fail to make any other payment or perform any other act on its part to be made or
performed as hi this Lease provided, then the Landlord may, but shall not be obligated
so to do, and without notice to or demand upon the Tenant and without waiving or
releasing the Tenant from any obligations of the Tenant in this Lease contained, pay any
such cost or expense, effect any such insurance coverage and pay premiums therefor,
and may make any other payment or perform any other act on the part of the 'Tenant to
be made and performed as ii-i this Lease provided, in such manner and to such extent as
the Landlord may deem desirable, and h-i exercising any such right, to also pay all
necessary and incidental costs and expenses, employ counsel and incur and pay
reasonable attorneys' fees, All sums so paid by Landlord and all necessary and
Incidental costs and expenses in coitriection.with the performance of any such act by the
Landlord, together with interest thereon at the rate of twelve percent (12 %) per annum
from the date of making of such expenditure, by Landlord, shall be payable to Landlord
on demand, Tenant covenants to pay any such sum or sums with interest as aforesaid
and the Landlor sh all have the sam _ xigl-►tsan remedies in -A'h_v ent of -the—
nonpayment thereof by Tenant as in the case of default by Tenant in the payment of the
Base Rent payable raider this Lease,
GENERAL
33. a. The Lease does not create the relationship of principal agent or of partnership or
of joint venture or of any association between Landlord a11d Tenant, the sole
relationship between the parties hereto being that of Landlord and Tenant,
b. No waiver of any default of Tenant hereunder shall be implied from any
omission by Landlord to take any action on account of such default if such
default persists or is repeated, and no express waiver shall affect any default
other than the default specified h the express waiver and that only for the time
and to the extent therein stated. One or more waivers by Landlord shall not then
be construed as a waiver of a subsequent breach of the same covenant, term or
condition, The consent to or approval by Landlord of any act by Tenant
16
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requiring Landlord's consent or approval shall not waive or render unnecessary
Landlord's consent to or approval of any subsequent similar act by Tenant shall
be construed to be both a covenant and a condition. No action required or
permitted to be taken by or on behalf of Landlord under the terms or provisions
of this Lease shall be deemed to constitute an eviction or disturbance of Tenant's
possession of the Demised Premises. All preliminary .negotiations are merged
into and incorporated in this Lease, The laws of the State of Mu shall
govern the validity, performance and enforcement of this Lease.
C. This Lease constitutes the entire agreement between Landlord and Tenant
affecting the Demised Premises and there are no other agreements, subsequent
alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless reduced to writing and executed h the same form
and manner in which this Lease is executed,
d. If any agreement, covenant or condition of this Lease or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such agreement, covenant or
condition to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall, not be affected thereby and each agreement,
covenant or condition of this Lease shall be valid and be enforced to the fullest
extent permitted by law,
e, If any person or entity extending credit to Landlord in connection with the
Building requires a change In this Lease which does not materially decrease,
diminish or restrict any of Tenant's rights hereunder, Tenant agrees, at the
req , to prorn execute and defer i Lanndlord n_amendrnernt
to this Lease incorporating such required changes; provided, however, that
Tenant shall not be required to agree to any such changes which would change
the financial obligations of Tenant.hereunder., the location or size of the Demised
Premises, the term of this Lease or which would otherwise materially decrease,
diminish or restrict any of Tenant's rights hereunder.
f. The submission of this Lease for examination does not constitute a reservation of
or option for the Demised Premises, and this Agreement of Lease s11all become
effective as a .Lease only upon execution and delivery thereof by Landlord and
Tenant,
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HAZARDOUS .MATERIAL
34. a, The Demised Premises hereby leased shall be used by and /or at the sufferance of
Tenant only for the purpose set forth hn Article 11 above and for no other
purposes. Tenant shall not use or permit the use of the Demised Premises in any
manner that will tend to create waste or .a nuisance, or will tend to unreasonably
disturb other tenants in the Building or the Demised Premises, Tenant, its
employees and all person visiting or doing business with Tenant in the Demised
Premises shall be bound by and shall observe the reasonable rules and
regulations made by Landlord relating to the Demised Premises, the Building or
the Demised Premises of which notice in writhng shall be given to the Tenant,
and all such rules and regulations shall be deemed to be incorporated into and
form a part of this Lease,
b, Tenant covenants thxough the Lease Term, at Tenant's sole cost and expense,
promptly to comply with all laws and ordh ces and the orders, rules and
regulations and requirements of all federal, state and municipal, governments
and appropriate departments, commission, boards, and officers thereof, and the
orders, rules and regulations of the Board of Pire Underwriters where the
Demised Premises are situated, or any other body now or hereafter as well as
extraordinary, and whether or not the same require structural repairs or
alterations, which may be applicable to the Demised Premises, or the use or
manner of use of the Demised Premises. Tenant will likewise observe and
comply with the requirements of all policies of public liability, fire and all other
policies of insurance at any time in force with respect to the building and
improvements on the Demised Premises and the equipment thereof,
C, In the event any Hazardous Material (hereinafter defined) is brought or caused
to be brought into or onto the Demised Premises, the Br ilding or the Demised
Premises by Tenant, its agents, employees, contractors or invitees, Tenant shall
handle any,such material hn compliance with all applicable federal, state and /or
local regulations, For purposes of this Article, ".Hazardous Material" means and
includes any hazardous, toxic or dangerous waste, substance or.material defined
as such in (or for purposes of) the Comprehensive Environmental Response,
Compensation, and Liability Act, any so- called "Superfund" or "Superlien" law,
or any federal, state or local statute, law, ordinance, code, rule, regulation, order
decree regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance or materials, as
now or at any time hereafter ha effect (collectively, "Environmental Laws "),
Tenant shall submit to Landlord on an annual basis copies of its approved
hazardous materials communication plan, OSHA monitoring plane, and permits
required by the Resource Recovery and Conservation Act of 1976, if Tenant is
required to prepare, file or obtain any such plans or permits, Tenant will
18
:�3,
hadezamify and hold harmless Landlord from any losses, liabilities, damages,
costs or expenses (includhag reasonable attorneys' fees) which Landlord may
suffer or incur as a result of Tenant's breach of this Section 37 or its introduction
into or onto the Demised Pren-ises, Building or Demised Premises of ally
Hazardous Material, This Article shall survive the expiration or sooner
termination of this Lease.
FORCE MAJEUR.E
35, Either party's failure to perform the terms and conditions of this Lease, in whole or in
part, other than any term requiring the payment of money, shall not be deemed a breach
or a default hereunder or give rise to any liability of such party to the other if such
failure is attributable to any unforeseeable event beyond such party's reasonable control
and not caused by the negligent acts or o nissiom or the willful misconduct of such
party, includitlg, without limitation, flood., drought, earthquake, storm, pestilence,
lightning, Paid other natural catastrophes and acts o£ God; epidemic, war riot, civic
disturbance or disobedience, and act of the public enemy, fire, accident, wreck, washout,
and explosion; strike, lockout, labor dispute, and failure, threat of failure, or sabotage of
such party's facilities; delay In transportation or car shortages, or inability to obtain
necessary labor, materials, components, equipment, services, energy, or utilities through
such party's usual and regular sources at usual and regular prices; and any law,
regulation, .order or injunction of a court or governmental authority, whether valid or
Invalid and including, without limitation, embargoes, priorities, requisitions, and
allocations or restrictions of facilities, equipment or operations. In the event of the
occurrence of such a force majeure event, the party unable to perform promptly .shall
notify the other party.
EMINENT DOMAIN
36. If all or any substantial part of the Property shall be acquired by the exercise of eminent
domain, Landlord may terminate this Lease by giving written notice to Tenant on or
before the date possession thereof is so taken,
CAPTIONS
V. The captions are inserted only as a matter of convenience and for reference, and in no
way define, limit or describe the scope of this Lease nor the intent or any provision
thereof.
19
-a
IN WITNESS WHEREOF, the Landlord and the Tenant have caused these presents to be
executed in form and manner sufficient to bind them at law, as of the day and year first above
written,
TENANT:
JBL Companies, Commercial Real Estate
Services, Inc,, a Minnesota corporation
d /b /a JBL Companies
Its: �. ..• r
LANDLORD:
City of Eagan, a Minnesota municipal
corporation
By: # & L -
Mike Maguire
Its: Mayor qq
By: lG� ,zSJ G.Gc�lc✓
Christina Scipioni
Its: U4-4 W rPC
20
D Dougherty, Molenda, 5olfest, Hills & Bauer RA,
OUGHERTY MOLENDA.
�M IM a 1113 Attorneys I Advisors
April 12, 2012
JBL Companies, Commercial Real Estate Services, Inc.
d /b /a JBL Companies
Attn: Jeffrey B, Larson
3795 Pilot Knob Road
Eagan, MN 55122
RE: Notice of Default /3795 Pilot Knob Road
Our File No. 206 -31349
Dear Mr. Larson:
Robert B. Bauer
Direct dial: (952) 953 -8847
E -mail: rbauer @dtnshb.com
As you know, this office :serves as legal counsel to the City of Eagan, We have
been advised by the City Finance Department that rent for the months of March and
April are delinquent. Enclosed please find an invoice from the City for the
outstanding rent together with a per diem charge until the delinquent rent has been
paid,
Pursuant to 'Section 15 of the Lease, you are hereby notified that a default has
occurred under the Lease and you have 30 days from the date of this letter to cure
cure the default, we will seek all available legal remedies, Thank you for your
prompt attention to this matter.
Very truly yours, .
t' V 6
Robert B, Bauer
RBB /lcmw
Enclosure
cc: Thomas L. Kedges, City Administrator
' Qualified Neutral Under Mlnn, Gen, R• Prac,114 1 ' MSBA Board Certified Real Property Specialist
3 Registered Patent Attorney I Individual Attorneys also Licensed In Iowa, Wisconsin and Mlssourl
S
office
7300 West 147th Street
Suite 600
Apple Valley, MN 55124
(952) 43 2 -3 136 Phone
(952) 432 -3780 Fax
www,dmshb,com
Attorneys
Michael G. Dougherty"
Michael E, Molenda'
Loren M. Solfest'
Sharon K• Hills
Robert B, Bauer"'
i
Terrence A. Merritt'
Annette NI, Margarlt
Gary L, Huusko'
Christine J, Cassaillus
Brian J, Wlsdorf'
Michael D, Klemm'''
Emily Fax Williams
Matthew J, Schaap
Thomas R, Donely
Jessica L, Sanborn
Ryan J. Bles
William M. TopW
Erin E. Boarschel
ma
CITY OF DAGAN
3830 PILOT IWOA ROAD
I+AGAN MN 551.22.1897
661075-6021
H WWgAd&mvl 100802
JBL COMPANI'u"
3795 PIVOT INOI3 ROAD
EAGAN, MN 55122
INVOICE 4343
Invoice hate 4112/12
INV0100 R MAIM AblO.'UNT
rA v1v.�v
2012 MARCH & APRIL RENT 15,197.86
3795 Pilot Knob Road
Mazola Rent = $7,533,31
Interest = $76,57
April Rent = $7,533,34.
Interest: $64.61(11. days)
interseat based on Mazoh / April outstanding balance
Total Amount Invoiced 16,197,86
Sales Tax
Total Balance Due 15,197:86
uwne�„ rura�+ m���msnsrnar�srcvnvna, rnn, aew+ �m+ uuw�a�, z+ ve��awarwuvesuur�rwmra, wru,,, am�sraeram�wamwummrowwr .,��e�awaxmstro,
(7,609,91 +7,533,34 � 15,143.25) '
1.51.43.25
0,12
366 0,00032787 31 0,010164 15,143.25 153,9
3
per diem rate Interest 4.
� {'p
rent
Interest
Total
March
7.,533,34
76.57
7,609,91
0;01,01639
Interest
76.57
31
March
31
0.08
0.12 0,010164
Year
366
Merch Aprll
rent due
Interest
Total
Aprll
15,143.25
54.61
15,197,€36
0,009896
14£3.95
1.1 days
11
Month
30
54.61
April
30
0,08
0,12 01009836
Year
366
(7,609,91 +7,533,34 � 15,143.25) '
1.51.43.25
0,12
366 0,00032787 31 0,010164 15,143.25 153,9
3
per diem rate Interest 4.
� {'p
D Dougherty, Molen.da, Solfest, Hills & Bauer RA,
CaTJGHERrY :I OLENDA..
q Attorneys I Advisors
April .25, 2012
JBL Companies, Commercial Real Estate Services, Inc..
d /b /a JBL Companies
Attn: .J.ef ley B. Larson
3795 Pilot Knob Road
Eagan, MN 55122.
RE: Fire Administration Building
O.ur File No, 206 - 313.49
Dear Mr, Larson:
Robert B. Bauer
Direct dial: .(952) 953
E -mail; rbauer @dmshb:com
Via Email & U.S. Mail
, j effreyboj,blcoXixp-,tiiles,com
This is by way of follow -up to our :meeting of April .13 201.2 and your proposal of
April 18, 20:1.2, Because of the upcoming City Council schedules, we :likely will
riot haze an opportunity to have the Council consider and :approve your proposal
prior to the expiration of the 30 days referenced in my letter of April 12, 201.2, As
such I am reschidittg my notice of cancellation set forth in n y letter of April 12,
2012, pending discussion with the Council of the now lease terms that you have
p roposed in your letter of April i.8 20. 12,
Nothing in this correspondence shall be deemed a waiver of the City's rights loader
its lease. Thank you for your attention to this matter.
Very truly }yours,
Rober.tB., Bauer
RBB /kmw
cc: Thomas L.:Hedg.es, City Administrator
' Qualified Neutral .Under Mlnn: Gen, R. P.rac: 114 1 2 MSBA Board Certified Real Property Specialist
3 Registered Patent Attorney I Individual Attorneys also 'Licensed In Iowa, Wisconsin and Missouri
Office
7S0O West 147thStteet
Suite 600
i Applo Valloy, MN 55124
(952)432.3136 Phono
(952) 432 -3780 rox
www.dmshb.com
i
I Attorneys
i
MlchaeRG. Dougherty "'
I
Michael E: Molenda
Loren:M. S.olfast ° '`
Sharon K. Hills
Robert B, Saner"
Terrence A, Morritt'
d
Annette M. Margarit
__ _Stephen:A._Ling'-
.Gary L: Huus&
I .Chrlstlne 1, Casselllus
Brian 1. Wisdorf''
r Michael :Q, :Klemm'
Emily Fox Williams
MatthewJ. Schnap
i
t Thomas R..DOnely'
Jesslca L: Sanborn
Ryan J. Bles
William M.'ropka
i
Erin E: Boerschel
—39
April 18, 2012
Mr, Tom Hedges
City of Eagan
3830 Pilot Knob Road
Eagan, MN 55122
C a un'les
RE; Fire Administration Building
Pilot Knob Road
Dear Tom;
I want to thank you and Bob for taking the time to meet with me on Friday, April
13, 2012, I appreciate the opportunity to share my personnel issues over the past
few years along with the unforeseen lost business that JBL has recently
experienced,
As I mentioned, when we occupied the facility we had need for the entire first
floor and the garages and we felt we were in a position to take the second level as
well and open it for community.business people to utilize. We have charged a
nominal fee in some cases in order to defray the cost of table set up and cleaning,
With the above said and the loss of half our revenue along with the outlook of a
$30,000 a month cash shortage through at least July 2012, I would like to propose
the followin
TERM: A one year lease term guaranty and then the `
same notice provision as now.
RATE /EXPENSES; Maintain the same annual rate; as, originally
agreed to ($90,400,08); howaver,paying under
the following scenario;
$0.00 for March 20,12...'
$2,533,34 for Aprii;:Deeember 2012 ::;;;:.;; •;.
$5,033,34 for January. April 2013
$7,533,34 May 2013 on
The shortfall will be paid in one of two.:forms;
all sublease (discussed below) revenue to. be
applied to the total shortfall amouzC .Af
$62,533,34 (see attached worksheirt) or .12 equal
J B L COMPANIES • 3795 Pilot Knob Road •Eagan MN 55122 P1 .1- 1 Flo,ne ;.;051.686.0212...0 fax; 651. 606.6113
installments of $5,211,11 commencing on June
1, 2013,
SUBLEASE: We would have the ability to construct some
private offices without damaging the initial
integrity of the space and provide lien free
construction, A sublease would be written
where the payment will go directly to the City
of Eagan and applied to the shortage of overall
rental payments,
EVENT SPACE: We would continue to allow events for the
community; however, should the opportunity
arise for a revenue generating opportunity we
would approach the City for approval and apply
Income to the shortfall,
I hope the above proposal is acceptable to the City and the Counsel, As we
discussed, the original lease was structured to allow the City to gain some revenue
while investigating its needs for the building, Under a normal lease scenario we
would have had. a free rent period and stepped rent payments to meet the ultimate
revenue _goal, I am proposing a hybrld that helps solve part of JBL's immediate
financial needs while allowing the City to obtain revenue and plan for the future.
JBL Rent shortfall Worksheet
2012
Billable Rent
payment
Shortage
March
$
7,533,34
$
-
$
7,533,34
April
$
7,533.34
$
2,533,34
$
5,000.00
May
$
7,533,34
$
2,533.34
$
5,000.00
June
$
7,533,34
$
2,533.34
$
5,000,00
July
$
7,533.34
$
2,533.34
$
5,000.00
August
$
7,533,34
$
2,533,34
$
5,000.00
September
$
7,533,34
$
2,533.34
$
5,000,00
October
$
7,533.34
$
2,533.34
$
5,000.00
November
$
7,533,34
$
2,533,34
$
5,000.00
December
$
7,533.34
$
2,533,34
$
5,000,00
2013
January
$
7,533,34
$
5,033,34
$
2,500,00
February
$
7,533.34
$
5,033,34
$
2,500.00
March
$
7,533.34
$
, 5,033,34
$
2,500,00
April
$
7,533.34
$
5,033,34
$
2,500,00
Total
$105,466,76
$
42,93342
$
62,533,34
+12
$ 5,211,11
LA. D
Agenda Information Memo
Finance Committee Meeting
May 22, 2012
IV. CEDAR GROVE REDEVELOPMENT OPTIONS
ACTION TO BE CONSIDERED:
To provide direction to staff regarding financial aspects of potential redevelopment
options.
FACTS:
• The Finance Committee has been designated by the City Council to review and
provide recommendations to the Council regarding matters pertaining to the
Cedar Grove Redevelopment District. Since the Committee last met, progress has
been made with respect to the EDA approval of the Paragon Outlets preliminary
concept plan and preliminary redevelopment agreement. The latter contemplates
the negotiation of a purchase agreement for the development parcel. Staff and the
City Attorney have begun that discussion with Paragon and we wish to provide an
update on those discussions and the policy issues implied by various terms.
• In addition, the EDA's development partners, Len Pratt and Jim McCaffrey have
been working with the prospects who may wish to acquire and develop other
parcels within the district. It would be timely to provide an update on those
discussions at this time and to :discuss the strategy for responding to proposals
pending further commitments relative to the Paragon project.
• Related to that discussion and in consideration of the recent experience with
Paragon- Outl - et - and wit p ospects id - eTitified - by Greater MSP, staf would --
begin a conversation with the Committee regarding a definition of a protocol for
interaction with businesses or developers wishing to define development
opportunities within the City, but requesting confidentiality during .a due diligence
process.
• Finally, staff will provide an update on proposed public improvement in the Cedar
Grove area in 2012 and advise the Committee on the application of CDA
Redevelopment Incentive Grant funds for the Cedar Grove Parkway Trail in lieu
of the prior plan for shared parking improvements in the vicinity of Jensens
Supper Club and Cedarvale Lanes.
ATTACHMENTS: Information will be distributed and reviewed at the Committee
meeting.
LA 1