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06-B-Lease - 1231 N. MainAGENDA INFORMATION SHEET PROJECT: Consider a resolution awarding a lease on property located on part of Lots 6 and 7, City Block 25 lA, being number 1231 N. Main Street. BACKGROUND: The City has for a period of time owned a portion of Lots 6 and 7 in City Block 25 lA, located at 1231 N. Main Street. The property was originally obtained for and will eventually be used for street expansion purposes. In the meantime, the City had leased the property out to interested property owners and it has primarily been used as an automobile sales lot in the past. The previous tenant at the location was Mr. Larry Richardson. The Lease with Mr. Richardson subsequently came to an end, and Mr. Richardson no longer wanted to continue his use of the property. Consequently, following established procedure, the City Council on December 11, 2000, adopted Resolution No. 2000-176 authorizing advertisement for competitive bids on the lease of the property. No bids were received in response to the City's advertisement. Subsequent to the advertising process, Mr. Allen Phillips approached the City proposing to lease the property, again for an automobile sales lot. DESCRIPTION: The proposed lease agreement contains terms similar to prior leases for this property. The duration of the lease is for a one (1) year term, with three (3) annual renewal options available to the Lessee, for a total possible term of four (4) years. The first two (2) years would be at a rental of $250.00 per month, or $3,000.00 per year. In the third year, the rent would escalate $25.00 per month to a total of $3,300.00 for the year, and in the fourth year of the lease the rent would again escalate to $300.00 per month or $3,600.00 per year. COST: No additional cost is anticipated to be incurred by the City; this agreement should result in revenue to the City. LOCATION: The property is located at Lots 6 and 7, City Block 25 iA, 1231 N. Main Street. RECOMMENDED ACTION: Consider approval ofthe resolution authorizing the lease agreement. STAFF CONTACT: Larry W. Schenk, City Attorney SCHEDULE: The term of the lease provides that Mr. Phillips' occupancy will begin April 15,2001, at which time his first rental payment will be due. COUNCIL DATE: Consider for approval at City Council's special March 26, 2001, Council meeting. ADDITIONAL MATERIAL: See attached copy of proposed resolution and accompanying lease agreement. DRAFT ALICEkRESWORK\CURRENTkN Main Lease Res March 23, 2001 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AWARDING A LEASE ON PROPERTY LOCATED ON PART OF LOTS 6 AND 7, CITY BLOCK 251A, BEING NUMBER 1231 N. MAIN STREET, PARIS, TEXAS; AUTHORIZING THE EXECUTION OF A LEASE FOR SAID PROPERTY; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Paris did heretofore, on the 1 lth day of December, 2000, in Resolution No. 2000-176, authorize the advertisement for a lease on property located on part of Lots 6 and 7, City Block 251A, located on N. Main Street; and, WHEREAS, no bids were received in response to the initial advertisement; and, WHEREAS, the City has now received a proposal from Allen Phillips to lease said property for an auto sales lot and such proposal is fair and reasonable to the City of Paris; and, WHEREAS, the form of the Lease Agreement, attached hereto as Exhibit A, should, in all things, be approved, and the Mayor should be authorized to execute the same; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That a proposal by Allen Phillips for a lease on property located on part of Lots 6 and 7, City Block 25 iA, located on N. Main Street, in the initial amount of $3,000.00 annual rental, payable in twelve (12) equal monthly payments of $250.00 each, be, and the same is hereby, accepted and let. Section 3. That the form of the Lease Agreement between the City of Paris and Allen Phillips, attached hereto as Exhibit A, be, and the same is hereby, approved. Section 4. That the Mayor be, and he is hereby, authorized and directed to execute, on behalf of the City of Paris, the Lease Agreement with Allen Phillips upon the terms and conditions and in the form shown in Exhibit A, attached hereto. Section 5. That this resolution shall be effective from and after its date of passage. PASSED AND APPROVED this 26th day of March, 2001. ATTEST: Michael J. Pfiester, Mayor Mattie Cunningham, City Clerk APPROVED AS TO FORM: Larry W. Schenk, City Attorney LEASE AGREEMENT COUNTY OF LAMAR } } KNOW ALL MEN BY THESE PRESENTS: STATE OF TEXAS } THIS LEASE AGREEMENT is made this 26th day of March, 2001, by and between the CITY OF PARIS, PARIS, TEXAS, a municipal corporation, acting by and through its Mayor, Michael J. Pfiester, duly authorized, hereinafter referred to as LESSOR, and ALLEN PHILLIPS, P. O. Box 6211, Paris, Lamar County, Texas 75462, hereinafter referred to as LESSEE, WITNESSETH For and in consideration of the payment of the sum of THREE THOUSAND AND NO/100 DOLLARS ($3,000.00) per year, payable to the CITY OF PARIS, a municipal corporation, as follows: $250.00 on or before April 15, 2001, with a like payment on or before the 1st day of each month thereafter during the remainder of the term hereof, said CITY OF PARIS does hereby lease, rent, and let unto ALLEN PHILLIPS that certain property located on part of Lots 6 and 7, City Block 25 lA, being number 1231 N. Main Street, Paris, Texas, more fully described on Exhibit A, 1. TERM attached hereto and made a part hereof. The term of this lease is for one (1) year, beginning on the 1 st day of April, 2001, and ending on the 14th day of April, 2002, at which time and on which date the same shall terminate, unless sooner terminated as herein specified and provided, during which time LES SEE may and shall occupy the same and use the same as an automobile sales lot, and for no other purpose. It is further agreed by LESSOR and LESSEE that LESSEE shall have the option to renew such Lease for an additional period of one (1) year, the rental for the renewal to be in the sum of THREE THOUSAND AND NO/100 DOLLARS ($3,000.00), payable to the CITY OF PARIS, a EXHIBIT A Lease Agreement...Page 1 municipal corporation, as follows: $250.00 on or before April 15, 2002, with a like payment on or before the 1 st day of each month thereafter during the remainder of the term of first option, which ends April 14, 2003. The granting of said first option is subject to the requirements set forth in paragraph 9 and the right to terminate by either party set forth in paragraph 10. It is further agreed to by LESSOR and LESSEE that LESSEE shall have a second option to renew such Lease for an additional period of one (1) year, the rental for the second renewal to be in the sum of THREE THOUSAND THREE HUNDRED AND NO/100 DOLLARS ($3,300.00), payable to the CITY OF PARIS, a municipal corporation, as follows: $275.00 on or before April 15, 2003, with a like payment on or before the 1 st day of each month thereafter during the remainder of the term of the second option, which ends April 14, 2004. The granting of said second option is subject to the requirements set forth in paragraph 9 and the right to terminate by either party set forth in paragraph 10. It is further agreed to by LESSOR and LESSEE that LESSEE shall have a third option to renew such Lease for an additional period of one (1) year, the rental for the third renewal to be in the sum of THREE THOUSAND SIX HUNDRED AND NO/100 DOLLARS ($3,600.00), payable to the CITY OF PARIS, a municipal corporation, as follows: $300.00 on or before April 15, 2004, with a like payment on or before the 1 st day of each month thereafter during the remainder of the term of the third option, which ends April 14, 2005. The granting of said third option is subject to the requirements set forth in paragraph 9 and the right to terminate by either party set forth in paragraph 10. 2. RENT That LESSEE pay to LESSOR, or order, at the City Hall in the City of Paris, the agreed rental in advance, promptly and without neglect, default, and delay. Lease Agreement...Page 2 3. HOLD HARMLESS That LESSEE agrees to indemnify, save, keep, and hold harmless LESSOR from and against any and all demands, debts, liabilities, suits, claims, and causes of action of every kind and character whatsoever for damage or injuries to persons and/or property occurring on the leased premises resulting from LESSEE's, his invitees', agents', servants', or employees' use, and LESSOR shall not be liable to LESSEE, his invitees, agents, servants, employees, or visitors due to the improvements located thereon, or hereafter constructed, or any other condition of the premises being improperly constructed, maintained, or being or becoming out of repair; LESSEE hereby waives any defects therein and agrees to hold and save LESSOR harmless from all claims for any such damages or injuries. 4. INSURANCE REQUIREMENTS That LESSEE must, at all times during the term of this Agreement, and any extensions hereof, keep and maintain in full force and effect a policy or policies of insurance, providing at least $250,000.00 per person and $500,000.00 for any single occurrence for bodily injury or death and $100,000.00 for any single occurrence for injury to or destruction of property, indemnifying all persons for any and all damages, personal injuries, or property damages sustained in or upon the premises of said leased property, or any part thereof, as the result of the negligence of LESSEE, his invitees, agents, servants, or employees, and shall pay all premiums due thereon when due. 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 his insurance carrier or carriers shall deliver a copy of any such policies to the City Clerk of the City of Paris, 150 1st Street S.E., Paris, Texas 75460, or furnish to said City Clerk a current letter or certificate from such company or Lease Agreement...Page 3 companies, 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 LES SOR 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, addressed to the LESSOR at the following address: 75461-9037. City Clerk, City of Paris, P. O. Box 9037, Paris, Texas 5. WASTE, NUISANCE AND UNLAWFUL USE PROHIBITED That LESSEE shall not commit, or suffer to be committed, any waste on the leased premises, nor shall LESSEE maintain, commit, or permit the maintenance or commission of any nuisance on the leased premises or use the lease premises for any unlawful purpose. That LESSEE shall not do or permit anything to be done in or about the leased premises which shall in any way conflict with any law, ordinance, rule or regulation affecting the occupancy and use of the leased premises which is or may hereafter be enacted or promulgated by any public authority; or suffer to be committed any waste on the leased premises; or allow the premises to be used for any improper, immoral, or unlawful purpose. 6. PROPERTY CONDITION That LESSEE will take good care of the leased premises and be responsible and make good to LESSOR all injuries and damages to the same caused by LESSEE or those under him and will deliver same to LESSOR at the expiration or termination of this lease in as good condition as when completed, usual wear and tear alone excepted; and 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, in good repair. Lease Agreement...Page 4 LESSEE shall not install, erect, or provide any device, in addition to such devises and equipment presently located at and in use and in connection with the operation of the leased premises, without first securing the written permission for such installation or provision from the City Manager of the City of Paris. 7. INSPECTION That it shall be lawful for LESSOR to enter upon and into the leased premises and every part thereof at all times for the purpose of inspecting and examining the condition thereof. 8. ASSIGNMENT OF LEASE That LESSEE has the right to assign this lease, only after first having received written permission from the City Manager of the City of Paris, with such assignee having all rights, privileges, and obligations contained in this lease. 9. DEFAULT Should LESSEE default in or fail or refuse to keep any of the covenants, conditions, stipulations, or provisions herein contained, then the LESSOR shall, in addition to any and all rights afforded LES SOR under this lease or state law for such default, including, but not limited to, the right to seek monetary damages for injury to the property, specific performance, or other remedies, have the right to terminate said lease by giving the LESSEE thirty (30) days notice in writing of its intention to terminate said lease, and LESSOR shall have the immediate right of possession to any and all properties, improvements, or equipment thereon located, which may be disposed of by the LESSOR as it sees fit. If LESSEE shall at any time abandon such leased property and premises, or shall by any means evidence his desire or intention to cease to operate thereon an automobile sales lot, the LES SOR may, at its option, cancel this lease by delivery of written notice of cancellation, signed by Lease Agreement...Page 5 the City Manager of the City of Paris, without liability to LESSEE, his heirs or assigns, and in such event LESSOR shall be entitled to and may dispose of, as it may see fit, any and all improvements or equipment located thereon. 10. TERMINATION That either party may, at its option, terminate this lease by giving the other party thirty (30) days notice, in writing, of its intention to terminate. The terms of this lease are binding on and the benefits herein inure to the heirs, administrators, and executors of LESSEE and the successors and assigns of LESSOR. EXECUTED ON the dates shown in acknowledgments below. CITY OF PARIS, PARIS, TEXAS LESSOR: By: Michael J. Pfiester, Mayor ATTEST: Mattie Cunningham, City Clerk APPROVED AS TO FORM: Larry W. Schenk, City Attorney LESSEE: Allen Phillips Lease Agreement...Page 6 STATE OF TEXAS COUNTY OF LAMAR BEFORE ME, the undersigned authority, on this day personally appeared MICHAEL J. PFIESTER, Mayor of the City of Paris, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 26th day of March, 2001. Notary Public, State of Texas STATE OF TEXAS } } COUNTY OF LAMAR } BEFORE ME, the undersigned authority, on this day personally appeared ALLEN PHILLIPS, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __, 2001. __ day of Notary Public, State of Texas Lease Agreement...Page 7