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15 - Event Center Lease AgreementItem No. 15 TO: Mayor & Council FROM: John Godwin, City Manager SUBJECT: EVENT CENTER DATE: July 12, 2019 BACKGROUND: In late 2015, after a number of years of trying to transfer their Events Center to the city, we took the facility over from the Red River Valley Fair Association. The center had been used successfully for many years by the association as a bingo hall. When that failed they tried to make it work as an event center for daily or hourly rent. However, due to the age of the building, the lack of paid fair staff to maintain it, its distance from the main fair area, and a general lack of interest, the association needed to divest itself of the facility. Because the city owns the land it sits on, we were the logical entity to take it over. STATUS OF ISSUE: Although the city added no new staff for the center, we nonetheless invested a good bit of time and money in the facility, including replacing HVAC units, painting the building inside and out, repairing and refinishing the floors, replacing all the ceiling tiles, and purchasing new tables and chairs. We have increased overall rentals, and have developed some programming for seniors, but the building is still underutilized and a financial drain. Although we were not seeking to rid ourselves of the facility, Samantha Hughes recently contacted us about leasing the facility to prepare and serve meals under a federal program(s). This will be a good service for the community, and because the facility will be leased full-time, it will also have the positive effect of reducing our time and costs taking care of the center. BUDGET: Will generate new revenues and reduce expenditures. RECOMMENDATION: Approve attached lease and authorize the city manager to execute. LEASE AGREEMENT STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LAMAR § THIS AGREEMENT IS MADE AND ENTERED INTO this _day of , 2019, by and between the CITY OF PARIS, TEXAS, a municipal corporation, acting by and through its Mayor, duly authorized, hereinafter referred to as LESSOR, and hereinafter referred to as LESSEE, WITNESSETH: For and in consideration of the payment to LESSOR, of the sum of One thousand two hundred and no/100 Dollars ($1,200.00) per month, and other good and valuable consideration, LESSOR does hereby lease, rent, and let unto the LESSEE that portion of the property known as the City of Paris Events Center, described on Exhibit A, attached hereto and made a part hereof for all legal purposes, hereinafter referred to as PREMISES. LESSEE hereby leases said real property from LESSOR subject to the terms, covenants, and conditions stated below, and shall have the right and privilege to construct and maintain certain improvements of said property. LESSEE accepts property "as is." Except to the extent provided herein and subject to the provisions hereof, LESSEE shall have and hold the leased premises, together with all rights, privileges, easements, appurtenances, and immunities belonging to or in any way appertaining to said leased premises, including, but not limited to, any and all easements, rights, title and privileges of LESSOR now or hereafter existing in, to, or under said leased premises. IN CONSIDERATION WHEREOF, it is mutually agreed by and between LESSOR and LESEE: 1. LESSEE will use and maintain the described PREMISES for activities, including preparing, packaging, and serving food, subject to the requirements specified herein. 2. That the initial term of this Lease shall be for three (3) years, beginning on the 1St day of August, 2019 and ending on the 31St day of July, 2022; provided, however, that this Lease I shall be extended and automatically renewed for an additional two (2) year term, unless either party to the agreement provides written notice to the other party of intent to terminate said Lease, said notice to be provided by or before April 30, 2022. In the event an automatic renewal is extended this Lease shall have a final termination date of the July 31, 2024. 3. LESSEE shall, at its sole cost and expense at all times during the term of this Lease: Keep and maintain property and facilities in good condition and repair, and make good to LESSOR any and all injuries and damages to the same caused by LESSEE or those under her; Comply with all fire, building, and property maintenance codes and zoning regulations now in force, or that may be hereafter enacted with regard to the use of the airport premises; Maintain roofs and walls free from leaks and damage; Maintain parking area in stable, workable condition, reasonably free from holes and standing water; and Maintain property clear of clutter and junk. 4. LESSEE will, upon the expiration of this Lease, peaceably yield up to LESSOR all and singular the premises and all future erections, additions, or repairs to or upon same, if any, in good repair, including but not limited to the hangar building and any permanent installation of equipment and fixtures. 5. LESSEE shall take every reasonable effort and accommodation to ensure accessibility to the LCC facilities by persons with disabilities. 6. In the event LESSEE fails to comply with this paragraph, LESSOR may notify LESSEE in writing that such maintenance shall be done, and in the event that LESSEE fails to correct the condition within thirty (30) days of LESSOR's written notice, LESSOR or its authorized designee may enter the PREMISES and provide the necessary maintenance, and LESSEE agrees to pay LESSOR such expenses within fifteen (15) days upon receipt of an invoice. This is not to be construed as a duty or obligation of LESSOR to make any repair or perform any work or cleaning which the LESSEE is required to make or perform. 7. LESSEE shall make no additions, changes, improvements, or modifications to PREMISES without the prior written approval of LESSOR. In the event of such consent, all improvements or modifications shall be made at the expense of LESSEE and, at the expiration of this Lease, shall become the property of the City of Paris. 8. That, in addition to use of PREMISES, LESSEE shall have full access to and use of the kitchen facilities and related equipment, as is, subject to any rules for use of same which LESSOR may impose. 9. That LESSEE shall, at LESSEE's sole cost and expense, be responsible for providing all furniture, furnishings, office equipment, and other similar equipage necessary to the N use of PREMISES. That all such personal property belonging to LESSEE located on PREMISES and/or in the improvements located thereon shall be there at the sole risk of the LESSEE. LESSOR shall have no liability or responsibility for any theft, misappropriation, or damage to any personal property belonging to LESSEE, any customer or other invitee of the LESSEE. LESSEE shall remove all items of personal property from the PREMISES upon termination or expiration of this Lease. If LESSEE fails to remove such property from PREMISES upon termination or expiration of this Lease, then LESSOR retains the right to remove or have removed at the expense of LESSEE all such property, and LESSEE agrees to pay LESSOR for such expense of removal within fifteen (15) days after receipt of an invoice from LESSOR. 10. That LESSEE will take good care of the PREMISES and be responsible for and make good to LESSOR for all injuries and damages to the same and will deliver same to LESSOR at the expiration or termination of this Lease in as good condition as when leased, ordinary wear and tear excepted; and LESSEE will, upon the expiration of this Lease, peaceably yield up to LESSOR or the City of Paris, all and singular PREMISES and all future modifications, additions, or repairs to or upon same, in good repair. 11. That LESSEE agrees that it will at all times keep PREMISES clean and free of trash and litter, and will at all times adhere to and be in strict conformance with all state and local laws and ordinances. 12. That LESSEE shall pay or cause to be paid all charges for water, heat, gas, electricity, sewer, trash, and all other utilities used on PREMISES throughout the term of this Lease, including any connection fees. 13. That it shall be lawful for LESSOR's designated representatives to enter upon and into the PREMISES, and every part thereof, at all times for the purpose of inspecting and examining the condition thereof. 14. That LESSEE shall not erect, paint upon, attach, exhibit or display in, on, or about said PREMISES any sign without the prior express written consent of the LESSOR's designated representative. 15. LESSEE COVENANTS AND AGREES TO INDEMNIFY AND DOES HEREBY INDEMNIFY, HOLD HARMLESS AND DEFEND CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY DAMAGE OR LOSS AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR ASSERTED (INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND EXPENSES OF ATTORNEYS, EXPERT WITNESSES AND 3 OTHER CONSULTANTS) ARISING OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THE NEGLIGENT OR OTHERWISE WRONGFUL ACTS OR OMISSIONS OF LESSEE, ITS AGENTS, SERVANTS, CONTRACTORS, OR EMPLOYEES IN CONNECTION WITH THIS LEASE, INCLUDING BUT NOT LIMITED TO INJURY OR DAMAGE TO CITY PROPERTY. SUCH INDEMNITY SHALL SURVIVE THE TERM OF THIS LEASE. THERE IS NO JOINT ENTERPRISE BETWEEN LESSOR AND LESSEE. 16. LESSEE shall maintain, during the life of Lease, and any extensions hereof, general liability coverage with minimum limits for damages resulting from bodily injury or death of $250,000 per person and $500,000 per occurrence, and $250,000 per occurrence for property damage, or a combined single limit of $500,000, or in such other amounts mutually agreed upon to fully and reasonably protect both LESSEE and LESSOR. LESSOR shall be named as an additional insured with a waiver of subrogation in favor of LESSOR. All costs of such insurance shall be borne by LESSEE. Such insurance policy or policies must be issued by a reputable provider licensed to write such policies in the State of Texas. 17. With regard to all insurance required under this Lease, it is expressly provided that such insurance policy or policies shall and must be written and issued by a reputable insurance company or companies, with LESSOR as an additional insured, subject to approval by the City Attorney of the City of Paris; and LESSEE or LESSEE's insurance carrier or carriers shall deliver a copy of any such policies to the City Clerk of the City of Paris prior to occupation of leased premises, evidencing the fact that such insurance is in full force and effect at all times during this Lease, and any extension hereof, and specifically noting thereon that LESSOR is an additional insured. All such policies shall be written so that the LESSOR will be notified of cancellation or of any restrictive amendment of the policies at least thirty (30) days prior to the effective date of such cancellation or amendment. Notice shall be by certified mail, return receipt requested. LESSEE agrees that if LESSEE does not keep all insurance required under this Lease in full force and effect, LESSOR may declare this Lease, and all rights and interest created by it, to be terminated. 18. LESSEE shall at no time permit the foreclosure of any tax liens to LESSEE's Leasehold interest in PREMISES or the buildings, fixtures, or other improvements thereon. LESSEE shall have the right in good faith and at its own sole cost and expense to contest any such taxes, charges, and assessments, and shall be obligated to pay the contested amount, plus any penalties and interest imposed, only if and when finally determined to be due. At any time that the payment of any item of taxes, special assessments, or governmental charges which LESSEE is obligated to pay under the provisions of this paragraph remain unpaid and uncontested later than fifteen (15) days before the same shall become delinquent, LESSOR may declare this Lease, and all rights and interest created by it, to be terminated. 4 19. That LESSEE will not sublet PREMISES, or any part thereof, without the consent, in writing, of LESSOR first had and obtained, in hand. 20. LESSEE, LESSEE's successors or assigns, agrees that (i) no person, on the grounds of race, color, creed, sex, age, national origin, or disability shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; (ii) that, in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person, on the grounds of race, color, creed, sex, age, national origin, or disability shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. 21. That the following events shall be deemed to be events of default by LESSEE under this Lease. A. Failure of LESSEE to comply with any term, condition, or covenant of this Lease, and such failure is not cured within thirty (30) days after written notice thereof to LESSEE, by LESSOR. B. Insolvency, the making of a transfer in fraud of creditors, or the making of an assignment for the benefit of creditors by LESSEE or any guarantor of LESSEE's obligations. C. Filing of a petition under any section or chapter of the National Bankruptcy Act, as amended, or under any similar law or statute of the United States or any State thereof by LESSEE or any guarantor of LESSEE's obligations, or adjudication as a bankrupt or insolvent in proceedings filed against LESSEE or such guarantor. D. Appointment of a receiver or trustee for all or substantially all of the assets of LESSEE or any guarantor of LESSEE's obligations. E. Abandonment by LESSEE of any substantial portion of PREMISES or cessation of use of PREMISES for the purposes leased, as identified herein above. F. The filing of any lien against PREMISES resulting from any act or omission of LESSEE which is not discharged or contested in good faith as determined by LESSOR by proper legal proceedings within fifteen (15) days of receipt of actual notice by LESSEE, unless LESSEE posts a bond within this time period equal to the amount of the lien. 22. In the event of any default by LESSEE that is not cured within thirty (30) days of receiving notice from LESSOR, LESSOR may, in addition to any other remedies available to it, terminate this Lease. In addition to the termination and forfeiture right, LESSOR shall have the following rights and remedies upon default by LESSEE: 5 A. The recovery of any damages, costs, fees, and expenses incurred by LESSOR as a result of the breach of the Lease by LESSEE, including reasonable attorneys' fees and expenses. B. The removal of all persons from PREMISES, and the removal and storage, at LESSEE's expense, of all property said PREMISES. C. Any other right or remedy, legal or equitable, that LESSOR is entitled to under applicable law. 23. No termination shall relieve LESSEE of the obligation to deliver and perform on all outstanding obligations and requirements prior to the effective date of the termination and LESSEE's liabilities under this Lease shall continue. 24. In the event of any such termination as above enumerated, LESSOR shall have the right at once and without further notice to LESSEE to enter and take full possession of PREMISES occupied by the LESSEE under this Lease. Upon the termination of this Lease for any reason, LESSEE shall yield up said buildings, facilities, fixtures, and equipment to LESSOR in the same condition as when received. 25. In the event of the failure on the part of the LESSEE upon the termination of this Lease to immediately remove from PREMISES all property owned by it, LESSOR may effect such removal and store such property at LESSEE's expense. LESSEE further covenants and agrees to pay and discharge all reasonable costs, attorney's fees, and expenses that may be incurred by LESSOR in enforcing the covenants, conditions, and agreements of this Lease, re- entering and/or repossessing PREMISES, restoring the same to good and proper repair/order, and protecting all city property. 26. The failure of LESSOR to declare this Lease terminated for any of the reasons set out above shall not bar the right of LESSOR to subsequently terminate this Lease for any of the reasons set out above. 27. That the waiver by LESSOR of any breach by LESSEE of the terms, covenants, conditions, or provisions of this Lease shall not be deemed to be a waiver of any other breach of the same or other term, covenant, condition, or provision of this Lease, regardless of when the breach has occurred. 28. That, in case any one or more of the provisions contained in this Lease shall, for any reason, be held by a Court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of the Agreement, and this Lease shall be construed as if the invalid, illegal, or unenforceable provision had never been included herein 2 29. That this Lease Agreement constitutes the sole and only agreement of the parties to this Lease and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter of this Lease. 30. That no amendment, modification, or alteration of the terms of this Lease shall be binding unless it is in writing, dated subsequent to the date of this Lease, and duly executed by the parties to this Lease. 31. That the rights and remedies provided by this Lease are cumulative, and the use of any one right or remedy by LESSOR shall not preclude or waive its right to use any or all other remedies. These rights and remedies are given in addition to any other rights the LESSOR may have by law, statute, ordinance, or otherwise. 32. That all notices required under this Lease must be given by certified mail or registered mail, at the following addresses: LESSEE Attn: Samantha Hughes xxx xxx Paris, TX 75460 CITY Attn: City Manager City of Paris P.O. Box 9037 Paris, TX 75461-9037 33. Any party may change the address to which notices are to be sent by giving the other party notice of the new address in the manner provided in this paragraph. 34. That this Lease shall not be assignable by LESSEE without the express written consent of the LESSOR. 35. That this Lease shall be binding upon, and inure to the benefit of, the respective heirs, executors, administrators, legal representatives, successors, and assigns when permitted by this Lease. 36. That this Lease shall be construed under, and in accordance with the laws of the State of Texas, and all obligations of the parries created by this Lease are performable in Lamar County, Texas. Venue for State court actions arising under this Lease shall be exclusively in the courts of Lamar County, Texas; venue for federal court actions arising under this Lease shall be exclusively in the federal courts for the Eastern District of Texas. 7 IN WITNESS WHEREOF, the parties hereto have executed this agreement the day and year first above written, By: ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney CITY OF PARIS, PARIS, TEXAS John Godwin, City Manager LESSEE