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HomeMy WebLinkAboutLEASE 2017 REAL ESTATE LEASE A This Lease ("Lease") is dated as of the 6AA day of Mb7cch, 2017, but effective for all purposes as of January 1, 2017, by and between the City of Jeffersonville, Indiana by and through the Jeffersonville Department of Redevelopment, a municipal corporation, duly organized and existing under the laws of the State of Indiana ("Landlord"), and Community Action Southern Indiana, Inc., a not-for-profit corporation duly organized and existing under the laws of the State of Indiana ("Tenant"). In consideration of the rents, and mutual covenants contained in this Lease, Landlord and Tenant agree as follows: 1. PREMISES & USE. Landlord leases to Tenant and Tenant rents from Landlord the space in the building located at 1613 East 8th Street,Jeffersonville, IN 47130, commonly known as the Eastlawn Building, as outlined in red on Exhibit A, attached hereto and incorporated herein (the "Premises"), containing approximately 53,000 square feet, with all equipment, appurtenances, and accessories related thereto. Tenant will use the Premises for the sole purpose of providing social service programs consistent with the administration and operation of the Head Start program, including but not limited to classroom instruction and other related education activities, including parent/staff meetings, and for other not-for-profit purposes associated with Tenant's mission. 2. TERM. The term of this Lease is a ten-year period beginning on the 1st day of January, 2017 and ending on the 31st day of December, 2027 (the "Term"). 3. RENT. Tenant agrees to pay Landlord, without notice or demand, annual rent, payable monthly, in advance, on the twenty-fifth (25th) day of each month during the Term of this Lease as follows: Lease Year Annual Rent Monthly Amount 1/1/17-12/31/18 $95,004.00 $7,917.00 1/1/19-12/31/20 $97,704.00 $8,142.00 1/1/21-12/31/22 $100,485.00 $8,373.75 1/1/23-12/31/24 $103,349.43 $8,612.45 1/1/25-12/31/26 $106,299.79 $8,858.32 Tenant must make lease payments to the Landlord by tendering Tenant's payment to Landlord's Notice Address as set out in Paragraph 27, below. Any rent Tenant fails to pay when due will incur an 8% penalty. If Tenant fails to pay rent on a timely basis, and after appropriate notice as provided herein, fails to cure within the allotted time, Landlord must promptly notify the designated representative of the Administration for Children and Families ("ACF"). The parties agree that ACF may then intervene to ensure that the Tenant, or another agency ACF designates, pays the rent. The Landlord agrees to accept rent payments from ACF's designee as if the Tenant had paid the rent. Landlord must grant ACF ninety (90) days from the date of ACF's receipt of notice that the Tenant failed to timely pay rent in which to cure the Tenant's default. 4. POSSESSION. Tenant is in and shall be entitled to remain in possession of the Premises on the first (V) day of the Term of this Lease, and Tenant must yield possession of the Premises to Landlord on the last day of the Term of this Lease, unless both parties agree otherwise in writing. At the expiration of the Term, Tenant must remove its goods and effects and peaceably yield up the Premises to Landlord in as good a condition as when delivered to Tenant, ordinary wear and tear excepted. 5. STORAGE. Tenant is entitled to store items of personal property on the Premises relating to its operations during the Term of this Lease. Landlord is not liable for loss of, or damage to, Tenant's personal property. If Tenant vacates or abandons the Premises or is dispossessed by process of law, any of Tenant's personal property left on the Premises will be deemed abandoned at the option of the Landlord and will become the Landlord's property. 1 288409_5 6. ALTERATIONS. Tenant may not materially improve or materially alter the Premises in any manner without the Landlord's prior written consent, which consent may not be unreasonably withheld. Subject to the Federal Interest set out in Paragraph 10 of this Lease, all improvements or alterations erected or made on the Premises will belong to the Landlord upon expiration, or sooner termination, of this Lease. 7. REPAIRS & MAINTENANCE. Landlord and Tenant shall equally share in the cost of maintaining the roof, outside walls, and other structural parts of the building. Tenant is responsible for day-to-day cleaning of the Premises and such maintenance as is required to offset normal wear and tear resulting from its use. As to all shared maintenance costs associated with the building, improvements, fixtures, machinery or equipment attached to or serving the Property, Landlord hereby covenants and agrees to create and maintain during the term of this Lease a joint maintenance account for the purpose of generating a source of funds for the payment of maintenance of the Property (the "Maintenance Account"). Landlord covenants to pay into the Maintenance Account, an amount equal to $417.00 per month, which amount shall be taken from the Tenant's monthly payments of rent called for in Paragraph 3 of this Lease. Landlord further covenants and agrees to pay from Landlord's separate funds, or cause to be paid, into the Maintenance Account, an additional amount equal to $417.00 per month; so that the aggregate funds in the Maintenance Account shall be equivalent to $834.00 per month or$10,008 annually. Landlord's commitment to tender a portion of Tenant's monthly rent payments to the Maintenance Account shall commence on the date of this Lease and shall continue on the twenty-fifth (25th) day of each month during the Term of this Lease. Landlord may elect the means and manner of payment of its portion of the Maintenance Account; so long as such amount equals $417.00 per month. The Maintenance Account shall be established at a financial institution mutually acceptable to Landlord and Tenant, shall use Landlord's tax identification number, shall be named "Eastlawn Building Maintenance Account," shall require two signatures on each check and the authorized signatories on the account shall be (i) the Director of the Landlord and (ii) the Executive Director of Tenant (or such other person as either of the signatories may appoint following written notice to the other party. The funds in the Maintenance Account will be used first to pay for, or in the case of emergency, reimburse the Tenant, as the case may be, reasonable and necessary capital and non-capital repairs, improvements of the Property. In the event Landlord fails to fund the Maintenance Account in the manner set forth above, Tenant may directly fund the Maintenance Account (or pay the cost of the repair in the event there are insufficient funds in the Maintenance Account) and deduct any amounts so funded by Tenant and for which Landlord is obligated (the "Landlord Shortfall") from the next installment of monthly rent due under the Lease until such time as the Landlord Shortfall paid by Tenant have been recouped. Any funds remaining in the Maintenance Account at the end of the Term of this Lease, shall be divided equally amount Landlord and Tenant. Either party may recommend to the other party repairs or improvements to the structure, equipment and machinery of the Premises, which are to be funded from the Maintenance Account. The Tenant must use all reasonable precaution to prevent waste, damage or injury to the Premises. 8. LIENS. Nothing in the Lease may be deemed or construed in any way as constituting the consent or request of the Landlord, express or implied, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to, or repair or maintenance of, the Premises or any part thereof, nor as giving the Tenant any right, power or authority to contract form or permit the rendering of any services, or the furnishing of any materials that would give rise to the filling of any lien against the Premises. 9. RELEASE OF LIENS. If any mechanics', laborer's or materialman's lien is filed against the Premises as a result of Tenant's maintenance, alterations or improvements to the Premises, the Tenant, within thirty (30) days after notice of the lien's filling, must cause the lien to be discharged of record by whatever means necessary. If the Tenant fails to discharge the lien within the thirty (30) day period, then in addition to other remedies Landlord may have, Landlord may, but is not obligated to, discharge the lien by whatever means Landlord deems necessary in its sole discretion. Any costs Landlord incurs in discharging the lien, including reasonable attorney fees and costs, together with interest at the rate of twelve percent (12%) per annum, constitute additional rent under this Lease, and Tenant must pay this rent to Landlord on demand. 2 288409_5 10. FEDERAL INTEREST. In accordance with the terms of the Head Start Act, 42 U.S.0 Sec. 9831 et seq., 45 C.F.R. Parts 74, 92 and 1309, and relevant decisions of the U.S. courts, the United States of America will have a Federal Interest (the "Federal Interest") in the Premises if the Tenant uses Head Start grant funds awarded by the Administration for Children and Families ("ACF") to make improvements to the Premises. The Federal Interest will be evidenced by a "Notice of Federal Interest" recorded by the Tenant in the Recorder's Office of Clark County, Indiana, as soon as practicable after any related grant documents are executed. If the Landlord terminates this Lease prior to the expiration of the Term of this Lease, the Landlord will reimburse ACF for the prorated value of any improvements the Tenant made to the Premises with grant funds ACF provided. The prorated value will be determined using the following formula: [Total cost of improvement/ Number of months remaining in Term of Lease when improvement is completed] x Number of months remaining in Term of Lease at termination = Landlord's reimbursement to ACF. Upon receipt of the reimbursement due under the formula, ACF will execute a release of the Notice of Federal Interest. 11. LEASEHOLD MORTGAGES. Tenant may not mortgage or pledge this Lease. 12. UTILITIES AND SERVICES. Tenant must timely pay for all utilities and services Tenant incurs in connection with the Premises. Any utility or service charges Tenant allows to become delinquent constitute additional rent under this Lease, and Tenant must pay this rent to Landlord on demand. 13. INSURANCE. Landlord must keep the building of which the Premises are a part insured against loss or damage by fire. All insurance required by this provision is carried for the sole benefit of the Landlord. Tenant must, at its sole expense, maintain public liability insurance, issued by companies reasonably satisfactory to Landlord, against claims for general liability, bodily injury and property damage occurring in or about the Premises in a minimum amount of One Million Dollars ($1,000,000.00) per occurrence. Upon request by Landlord Tenant shall provide Landlord with appropriate proof that adequate insurance is in force issued by companies reasonably satisfactory to Landlord and reflecting Landlord as an additional named insured. Landlord must receive advance written notice from the insurer prior to any termination of Tenant's insurance policies. Tenant is responsible for maintaining fire and extended coverage insurance on its personal property. 14. INDEMNIFICATION. Unless caused by the negligent act or omission of Landlord, its agents and employees, neither Landlord nor it agents or employees shall be liable for, and Tenant waives all claims for, damage, including but not limited to consequential damages, to person, property or otherwise, Tenant, or any person claiming through Tenant, sustains resulting from any accident or occurrence in or upon the Premises, including but not limited to damage resulting from: (a) any equipment or appurtenances for which Landlord is not responsible becoming out of repair; (b) injury done or caused by wind, water or other natural element; (c) any defect in or failure of plumbing, heating or air conditioning equipment, electric wiring, gas, water and steam pipes, stairs, porches railings or walks; (d) broken glass; (e) the backing up of any sewer pipe or downspout; (f) the bursting, leaking or running of any tank, tub, washstand, water closet, waste pipe, drain or any other pipe or tank in, upon or about the building or Premises; (g) the escape of steam or hot water; (h) water, snow or ice upon the premises; (i) the falling of any fixture, plaster or stucco; (j) damage to or loss by theft or otherwise of Tenant's property or others' property; and (k) acts or omissions of persons in the Premises or any other persons or entities in the building or on Landlord's property. Tenant must indemnify and hold Landlord harmless against all expenses, liabilities, and claims of every kind, including reasonable attorney fees, arising out of either(1) Tenant's failure to perform any of the terms or conditions of this Lease, (2) any injury or damage occurring on or about the Premises, except for injury or damage caused solely by Landlord's, Landlord's agents or employees, or another tenant's, negligent acts or omissions, (3) Tenant's failure to comply with any law of any governmental authority, or (4) any mechanic's lien or security interest filed against the Premises or equipment, materials or alterations of the Premises arising from Tenant's maintenance, improvements or alterations to the Premises. 15. TAXES. Landlord and Tenant agree and acknowledge that, because Landlord is a municipal corporation and 3 288409_5 Tenant is a tax-exempt entity, they do not anticipate any real estate, personal property or any other taxes or assessments will accrue as a result of the Tenant's use and occupation of the Premises. However, if any taxes accrue as a result of Tenant's failure to submit any documentation necessary to acquire or maintain its tax-exempt status, Tenant, and not the Landlord, is responsible for payment of any such taxes. 16. ASSIGNMENT & SUBLETTING. Tenant may not assign this Lease, nor may Tenant sublet the Premises or use the Premises for any purpose other than as provided in this Lease without the written consent of the Landlord, which consent Landlord may not reasonably withhold.. 17. SUBORDINATION. This Lease and Tenant's rights hereunder are subject and subordinate to the lien of any and all mortgages, renewals, modifications or extensions of mortgages, that now or may hereafter affect the Premises. Tenant must execute, acknowledge and deliver to Landlord, on Landlord's demand, any and all instruments that Landlord deems necessary or proper to subordinate this Lease and all Tenant's rights herein to the lien of any mort ages, renewals, modifications or extensions of mortgages. Tenant hereby designates Landlord its attorney-in-fact for the purpose of executing, acknowledging and delivering any subordination instrument Landlord requires, if Tenant fails to do so immediately upon Landlord's demand. 18. CONDITION OF PREMISES. Tenant hereby accepts the Premises in its existing condition and state of repair. Tenant agrees that Landlord has made no representations, statements or warranties, express or implied, with respect to the condition of the Premises except as contained in this Lease. Landlord is not liable for any latent defects. 19. DESTRUCTION OF PREMISES. If the Premises are partially destroyed by fire or other casualty to an extent that prevents the conducting of Tenant's use of the Premises in a normal manner, and if the damage is reasonably repairable within sixty (60) days after the occurrence of the destruction, and if the cost of repair is less than Ten Thousand Dollars ($10,000.00), Landlord shall repair the Premises and a just proportion of the rent shall abate during the period of the repair according to the extent to which the Premises have been rendered untenantable. However, if the damage is not repairable within sixty days, or if the cost of repair is Ten Thousand Dollars ($10,000.00) or more, or if Landlord is prevented from repairing the damage by forces beyond Landlord's control, this Lease shall terminate upon twenty (20) days written notice of such event or condition by either party, and any unearned rent paid in advance by Tenant shall be apportioned and refunded to it. Tenant shall give Landlord immediate notice of any damage to the Premises. 20. DEFAULTS. Tenant is in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound. Tenant must pay all costs, damages and expenses (including reasonable attorney fees and expenses) Landlord suffers by reason of Tenant's default(s). All sums of money or charges Tenant is required to pay under this Lease are deemed additional rent, whether or not this Lease designates those sums or charges as"additional rent." If an event of default occurs, Landlord must give ACF written notice of the default contemporaneous with Landlord's written notice to Tenant. Notwithstanding any other provision of this Lease, Landlord may not commence eviction or any other remedies that affect possession of the premises until after: (i) ACF has been properly served with notice of Tenant's default and Landlord's intent to exercise remedies; and (ii) one of the following events has occurred: (a) the responsible ACF official informs the Landlord in writing that ACF has decided not to cure the default; or (b) ACF fails to timely cure the default within the time periods set out below. The parties agree that ACF may intervene to ensure that the Tenant, or another agency ACF designates, cures the default. Landlord must accept the payment of rent, or performance of any other obligation, by ACF's designee as if paid or performed by Tenant. Landlord must grant ACF ninety (90) days from the date of ACF's receipt of notice of Tenant's default to cure the Tenant's default, or with respect to non-monetary defaults that ACF cannot with due diligence cure with ninety (90) days, if ACF promptly commences to cure the default and diligently proceeds with action reasonably calculated to cure the default, then Landlord must grant ACF the additional time necessary to fully cure the default. 4 288409_5 Tenant agrees to provide ACF with notice: (a) of any Tenant's default under this Lease on the date of its discovery of the default, and (b) that the Landlord has notified Tenant of Landlord's intent to exercise the remedy of eviction, or any other remedy, on the day that the Tenant receives the notice from Landlord. Landlord agrees to provide ACF with notice: (a) of any Tenant default under this Lease as soon as practical after Landlord first receives knowledge of the default; and (b) that the Landlord intends to exercise any of its remedies on the day Landlord decides to exercise the remedy or remedies. The Landlord's remedies are: (1) taking possession of the Premises, without prejudicing Landlord's rights to damages, or in the alternative, (2) curing any default and adding the cost of the cure to Tenant's financial obligations under this Lease. The Landlord may exercise these remedies only after giving the notice required by this Lease to ACF. The parties agree that ACF's designation of another agency to assume Tenant's rights, obligations and liabilities under this Lease ("Replacement Tenant") is not an event of default under this Lease and does not trigger any remedy under this Lease. 21. ACF'S REPLACEMENT OF TENANT. Notwithstanding any other provision of this Lease, the Landlord and Tenant recognize and agree that in the event of a default, or ACF's withdrawal or termination of the Tenant, this Lease may be assumed by a Replacement Tenant designated by ACF. The Landlord has the right to approve the Replacement Tenant, but Landlord's approval may not be unreasonably withheld or delayed. Tenant agrees that if ACF designates a Replacement Tenant, the Tenant will relinquish possession and all property interests that the Tenant might have in the Premises to the Replacement Tenant, subject to any compensation that the Tenant may be entitled to receive under federal law. 22. CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative, and may not be construed as exclusive unless otherwise required by law. 23. ACCESS BY LANDLORD TO PREMISES. Landlord has the right to enter the Premises at all reasonable business hours to make inspections and make necessary repairs. However, Landlord does not assume any liability for the care or supervision of the Premises except as otherwise provided in this Lease. In the case of an emergency, Landlord may enter the Premises at any time without Tenant's consent. 24. DANGEROUS MATERIALS. Tenant shall not keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might substantially increase the danger of fire on the Premises, or that might be considered hazardous by a responsible insurance company. 25. COMPLIANCE WITH REGULATIONS. Tenant must promptly comply with all laws, ordinances, requirements and regulations of the federal, state, county, municipal and other authorities, and the fire insurance underwriters. 26. [Intentionally Omitted]. 27. NOTICE. Notices under this Lease are not valid unless given or served in writing and forwarded by certified mail, postage prepaid, addressed as follows: LANDLORD: City of Jeffersonville Department of Redevelopment 500 Quartermaster Court Jeffersonville, IN 47130 ATTN: City Attorney 5 288409_5 TENANT: Community Action Southern Indiana, Inc. 1613 E. 8th Street Jeffersonville, IN 47130 Either party may change its address from time to time by providing written notice as set forth above. 28. NOTICE TO ACF. Whenever notice to ACF is required under this Lease, the Landlord and the Tenant covenant and agree to provide both telephonic and written notification (by certified, registered mail, return receipt requested) to the following ACF offices, or to their successors: Assistant Regional Administrator Administration for Children and Families Office of Community Programs 233 N. Michigan Avenue, Fourth Floor Chicago, IL 60601 (312) 353-4237 and to: Associate Commissioner The Office of the Commissioner Administration for Children and Families Department of Health and Human Services P.O. Box 1182 Washington, D.C. 20013 (202) 205-8572 and to: Office of the General Counsel United States Department of Health and Human Services 772A Humphrey Building 220 Independence Avenue, S.W. Washington, D.C. 20201 (202) 690-7741 If one or more of the ACF offices listed above has a change of name and/or telephone number, the Tenant and the Landlord further agree to take all reasonable action necessary to discover and notify the appropriate government office. The Landlord and Tenant covenant and agree to include the following information in the written notice to ACF whenever such notice is required under this Lease: (a) The full names, addresses, and telephone number of the Landlord and the Tenant; (b) The following statement, prominently displayed at the top of the first page of the Notice; The federal interest in certain real property or equipment used for the Head Start Program may be at risk. Immediately give this notice to the appropriate government official. (c) The date and nature of the default and the manner in which the default may be cured and/or an explanation of other circumstances which required the notice; (d) In the event that the Landlord will be exercising the remedy of eviction and/or other remedies, the date or expected date of the eviction and/or exercise of other remedies. 6 288409_5 The Tenant covenants and agrees to give the Landlord written and telephonic notice of any change of name, address, and/or telephone number of an ACF office listed above. If one or more of the ACF offices listed above stops operating,the Tenant covenants and agrees to give the succeeding federal office(s) to which notice must be given. 29. GOVERNING LAW. This Lease shall be construed in accordance with the laws of the State of Indiana. 30. ENTIRE AGREEMENT/MODIFICATIONS. This Lease Agreement contains the entire agreement of the parties and there are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Lease. This Lease may only be modified or amended by a written document executed by both parties. The Tenant may not surrender the Premises prior to the end of the Lease Term; terminate or cancel the Lease; modify, extend, change, supplement, alter or amend the Lease in any respect; or waive, excuse, condone or in any way release or discharge Landlord of or from the terms, covenants and conditions the Landlord is to perform or observe, without ACF's prior written consent, which may not be unreasonably withheld or delayed. The Landlord may not, modify, extend, change, supplement, alter or amend the Lease in any respect, without ACF's prior written consent, which may not be unreasonably withheld or delayed 31. SEVERABILITY. If any portion of this Lease, or its application to any person or circumstance, is held to any extent invalid or unenforceable for any reason, the remainder of the Lease, or the application of the affected provision to persons or circumstances other than those concerning which it is invalid or unenforceable, is not affected and each remaining Lease provision remains valid and enforceable to the fullest extent permitted by law. If a court finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision, it would become valid and enforceable,then such provision shall be deemed to be written, construed, and enforced as so limited. 32. WAIVER. A party's failure to enforce any provisions of this Lease may not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease. The Landlord's acceptance of Rent is not a waiver of any earlier breach by Tenant of any term, covenant or condition of this Lease, regardless of Landlord's knowledge of the breach when the rent is accepted. No covenant,term or condition of this Lease may be deemed waived unless waived in writing. 33. BINDING EFFECT. The provisions of this Lease are binding upon and inure to the benefit of both parties and their respective legal representatives, successors and assigns. 34. REPLACEMENT LEASE. This Lease constitutes a renewal, replacement and restatement of that certain Lease dated December 6, 2001, by and between Landlord and Tenant, as amended by the certain Agreement to Amend Real Estate Lease executed by and between Landlord and Tenant on or around April 2015 ("Prior Lease"). Tenant acknowledges that there is or may have been past due rental amounts due and owing to Landlord under the Prior Lease. However, Landlord acknowledges that Tenant expended funds maintaining the building and Premises for years prior to 2015, for which Landlord is responsible under the Prior Lease. Both parties acknowledge the difficulty in ascertaining the exact amounts of past due rent owed by Tenant versus maintenance expenses paid by Tenant. The Landlord and Tenant agree to treat those sums as offsetting and by executing this Lease acknowledge and agree that all claims, demands, or other amounts due from or against either party to the other under the Prior Lease are hereby released and waived in all respects. [Signature page to follow] 7 288409_5 IN WITNESS WHEREOF, the parties hereto have executed this Real Estate Lease effective as of the date fist set forth above. LANDLORD: CITY OF JEFFERSONVILLE, INDIANA BY&THROUGH THE JEFFERSONVILLE ENT OF REDEVELOPMENT By: Robert Waiz, Executive Director TENANT: COMMUNITY ACTION SOUTHERN INDIANA, INC. By: L' Phil Ellis, Executive Director 8 288409_5