28 - Event Center New Lease AgreementNo. 28
TO: Mayor, Mayor Pro Tem & City Council
FROM: Grayson Path, City Manager
Stephanie Harris, City Attorney
SUBJECT: Event Center
New Lease
DATE: November 14, 2022
BACKGROUND:
On July 22, 2019, the City and Supreme All, Inc., working through Ms. Samantha Hughes, entered
into a lease agreement for the City's Event Center, located at 1875 Fitzhugh Avenue (northeast
corner of the Fairgrounds). The terms of the lease are summarized as:
1. Rent: $1,200.00/month
2. Three years, August 1, 2019 — July 31, 2022 with auto renewal for two additional years
unless notice is provided by either party by April 30, 2022.
3. Use and maintain for meal services and other related activities, including preparing,
packaging, and serving food.
4. Tenant is to be responsible for maintenance of facility and parking area, although this is
debatable in the language.
The tenant's primary need of the building was for its kitchen facility in order to prepare meals for
the Boys and Girls Club. Each day of the work week while school is in session, Supreme All, Inc.
prepares a dinner meal for the youth who attend the Boys and Girls Club. Speaking with Jason
Machice, Executive Director for the Boys and Girls Club, Supreme All, Inc. has provided a needed
service that cannot be easily replaced.
On June 13, 2022, the City Council agreed to waive Ms. Hughes' rent through the summer due to
the Boys and Girls' Club being unable to utilize her services as the School was providing a meal
each day for kids in the summer months. Ms. Hughes would resume her food service operation
once school reopened and the school ceased providing a meal to the Boys and Girls Club each day.
At this council meeting, it was discussed expanding the lease for other uses and possibly amending
the lease through negotiation.
STATUS OF ISSUE:
Ms. Hughes and City Staff have worked these past few months to renegotiate the lease. Ms.
Hughes initially requested to add assembly -type uses to the lease, such as educational programs,
classes, adult training, youth activities, etc., utilizing the larger rooms in the building that have
gone primarily unused to -date. However, an investigation in to the building code compliance of
this building revealed that in order to authorize a Certificate of Occupancy for such uses, over
$ l 00k in expenses would be needed in upgrading the fire suppression, fire alarm, and ADA parking
lots. This was in addition to numerous smaller issues with the building (maintenance such as FRP
panels in restrooms, GFCI outlets in kitchen, backflow preventer for water service, HVAC repairs,
etc.). These smaller issues are of lesser expense and given they are good issues to address in order
to perform basic maintenance and extend the life of the building, the City Manager has already
ordered they be completed by staff and appropriate contractors. However, with the need for
significant upgrades prior to assembly -type uses occurring, Ms. Hughes and Mr. Path have agreed
to drop this from the negotiation and focus entirely on her food preparation services and now a tax
business.
The attached proposed lease consists of the following significant changes:
1. Reduction in monthly rent from $1,200.00 to $800.00 per month.
2. Reduction in rented space from the entire building to now strictly the kitchen, office,
bathrooms in the northwest corner of building, and utility closet.
3. City will take on maintenance of building and parking lot.
4. Extension of lease to 2025 with options to 2027.
5. Issuance of a Conditional Certificate of Occupancy, limiting occupancy to 10 people or
less at all times.
6. City will perform the above stated basic maintenance to building identified during our
inspection in order to maintain the life of the building.
7. Tenant shall be responsible for basic cleaning and maintenance of leased spaces.
8. Tenant shall operate a food preparation service from the kitchen and is allowed to operate
her tax service business from the office.
9. Tenant shall pay all utilities as we are unable to separate out utilities between leased spaces
and the rest of the building.
The majority of the rest of the lease is substantially the same as the existing lease. This new lease
better defines the two parties' roles than the first lease. In addition, due to frequent breaking of
the front glass doors by unknown individuals tearing up the parking lot, we are installing metal
doors and plan to extend chains at the entrances to the parking lot.
BUDGET:
The current lease is for $1,200.00 per month with Ms. Hughes providing for all utilities, but
substantially only being able to utilize the kitchen due to code issues with the rest of the building
and limitations in the lease itself. It is debatable who is responsible for maintenance of the
building, but the City has been doing it in recent months.
The proposed new lease is for $800.00 per month with Ms. Hughes continuing to provide for all
utilities and the City clearly taking on the maintenance of the building.
As part of our research, a local realtor was approached and asked for a market rate for leasing a
building such as the Event Center. The report showed a recommended monthly lease of $6,500.00
to $8,900.00. Given the condition of the building, the role the City is taking on (maintenance), the
addition of her tax business, and the limitation to specific portions of the building, the City
Manager simply took the square footage of the limited portions being leased, divided that by the
total square footage of the building, and applied this as a ratio to the recommended rates. There is
an estimated 8,500 square feet to the building and 900 square feet for the proposed leased spaces.
This means the proposed lease is for 11% of the building which puts the range to about $690 -
$950 per month. We settled on $800/month to bring before you tonight.
Given much of the time needed to perform this negotiation was taken by the City due to other
priority tasks interfering, we have not asked that Ms. Hughes resume her monthly payment while
we negotiate the new lease. It took time to revisit this topic and then further time to organize an
inspection and review the results. It took further time to determine next steps based on those
results, which finally ended with the negotiated lease you have before you tonight.
OPTIONS:
1. Approve the lease as presented.
2. Request additional information, edits to the lease, and/or further negotiation of the monthly
rate.
3. Reject the lease and resume the current lease, to which Mr. Hughes must resume her
monthly payment of $1,200.00/month.
RECOMMENDATION:
1. Approve the lease as presented.
LEASE AGREEMENT—CITY OF PARIS EVENT CENTER
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LAMAR §
THIS AGREEMENT IS MADE AND ENTERED INTO this 14th day of November,
2022, by and between the CITY OF PARIS, TEXAS, a municipal corporation, acting by
and through its city council, duly authorized, hereinafter referred to as LESSOR, and
Samantha Hughes, hereinafter referred to as LESSEE.
WITNESSETH:
For and in consideration of the payment to LESSOR, of the sum of Eight
Hundred AND NO/100 Dollars ($800.00) per month and other good and valuable
consideration, LESSOR does hereby lease, rent, and let unto the LESSEE a portion of
the property known as the City of Paris Events Center, "Event Center", located at 1875
Fitzhugh Avenue, said portion specifically described as the kitchen, office, small
restrooms on the northwest corner of the building, and utility closet, hereinafter
referred to as PREMISES, to which LESSEE shall have full access. Said kitchen
excludes the use of the hood and any frying and grease equipment. LESSEE shall have
access to other portions of the Event Center as are incidental and necessary to access
PREMISES as described above.
LESSEE hereby leases said real property from LESSOR subject to the terms,
covenants, and conditions stated below. 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 WHEROF, it is mutually agreed by and between LESSOR
and LESSEE:
1. LESSEE will use and maintain the described PREMISES for meal
services and other related activities, including preparing, packaging, and serving
food, along with the administrative activities necessary thereto, subject to the
requirements specified herein. Lessee may also use the Premises for conducting a tax
preparation business subject to the limitations of the Conditional Certificate of
Occupancy described herein.
2. That the initial term of this Lease shall be for three (3) years, beginning
on the 1St day of December, 2022 and ending on the 30th day of November, 2025;
provided, however, that this Lease 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 August 1, 2025. In the event an automatic renewal is extended, this Lease
shall have a final termination date of the November 30, 2027.
3. The parties hereto acknowledge that the PREMISES are in need of
repair. LESSOR shall, as soon as is practicable, undertake repairs of the kitchen, office,
small restrooms on the northwest corner of the building, and utility closet to bring
those portions of the building into compliance with building, maintenance, and fire
codes, and shall issue to LESSEE a Conditional Certificate of Occupancy for those
portions of the PREMISES said Conditional Certificate of Occupancy limiting
occupancy of the PREMISES to ten (10) or fewer persons.
4. LESSEE shall, at her sole cost and expense at all times during the term
of this Lease: be responsible for day to day maintenance and cleaning of the interior
of the leased PREMISES, make good to LESSOR any and all injuries and damages to
the same caused by the negligence or willful acts of LESSEE or those acting under her,
and 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 PREMISES. LESSOR shall be responsible for: maintenance and repair of the
remainder of the building; maintenance and repair of the exterior of the entire
building including parking areas; maintenance and repair of the HVAC system; and
repairs of the leased PREMISES not occasioned by the negligence or willful acts of
LESSEE or those acting under her.
5. 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, minus ordinary wear and tear, including but not
limited to any permanent installation of equipment and fixtures.
6. 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, shall be done in accordance with all applicable building and
maintenance codes, and, at the expiration of this Lease, shall become the property of
the City of Paris.
7. 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 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 the 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.
8. That LESSEE agrees that it will at all times keep PREMISES clean and
free of trash and litter as well as Event Center and parking lot 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.
9. Due to an inability to separate utility services between the Event Center
and PREMISES, LESSEE shall pay or cause to be paid all charges for water, heat, gas,
electricity, sewer, trash, and all other utilities used at the Event Center throughout the
term of this Lease, including any connection fees. Should LESSOR lease out additional
space within the Event Center, this agreement shall be amended to subdivide utility
charges.
10. That it shall be lawful for LESSOR's designated representatives to enter
upon and into the Event Center and PREMISES, and every part thereof, at all times for
the purpose of inspecting and examining the condition thereof.
11. That LESSEE shall not erect, paint upon, attach, exhibit or display in, on,
or about the Event Center or said PREMISES any sign without the prior express
written consent of the LESSOR's designated representative.
12. LESSEE CONVENANTS 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
EPENSES OF ATTORNEYS, EPERT WITNESS AND 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 THEIS 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.
13. 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 $25,000.00 per person and $500,000.00 per occurrence, and
$250,000.00 per occurrence for property damage, or a combined single limit of
$500,000.00, 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.
14. 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.
15. Should any taxes be levied on account of LESSEE's lease of the
PREMISES as part of the Event Center, said taxes shall be paid solely by LESSEE.
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 that 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.
16. That LESSEE will not sublet PREMISES, or any part thereof, without the
consent, in writing, of LESSOR first had and obtained, in hand. Should the LESSOR
decide to lease out other parts of the Event Center, LESSEE shall be given sixty (60)
day notice, and same shall be grounds for LESSEE to terminate this LEASE. In such
event, LESSEE shall give LESSEE thirty (30) days' notice of termination, with the
termination to become effective on the thirty-first (31St) day following LESSOR's
receipt of said notice, and LESSEE shall be responsible for rental payments through
the remainder of the month in which such termination goes into effect.
17. 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 otherwise subjected to
discrimination in the use of said facilities; (ii) that, 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.
18. 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.
19. 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:
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 on said PREMISES.
C. Any other right or remedy, legal or equitable, that LESSOR is entitled to
under applicable law.
20. 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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.
29. That all notices required under this Lease must be given by certified
mail or registered mail, at the following addresses:
LESSEE
Attn: Samantha Hughes
627 5th Street NE
Paris, TX 75460
CITY
Attn: City Manager
P.O. Box 9037
Paris, TX 75461-9037
30. 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.
31. That this Lease shall not be assignable by LESSEE without the express
written consent of the LESSOR.
32. 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.
33. That this Lease shall be construed under, and in accordance with the
laws of the State of Texas, and all obligations of the parties 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 federal courts for the
Eastern District of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this agreement the
day and year first above written,
CITY OF PARIS, PARIS, TEXAS
�1
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
Grayson Path, City Manager