HomeMy WebLinkAbout2021-05-17-Resolution 2021-194_Farm Lease, Phillips-Hamilton IncTHE CITY OF WAUKEE, IOWA
RESOLUTION 2021-194
APPROVING FARM LEASE WITH PHILLIPS-HAMILTON, INC.
IN THE NAME AND BY THE A UTHORITY OF THE CITY OF WA UKEE, IO WA
WHEREAS, City Staff received an offer to lease city -owned property for farming purposes;
AND,
WHEREAS, the subject property is property acquired for development of the Waukee Civic
Campus which is not ready for development at this time and would likely overgrow if not
farmed; AND,
WHEREAS, the City Council believes that it is in the best interest of the City to lease the
property to Phillips -Hamilton, Inc., which will, in addition to providing rental income to the
City, assure the property's use and mitigate maintenance expense to the City; AND,
WHEREAS, the terms of the lease with Phillips -Hamilton, Inc., are contained in the Farm
Lease, attached as Exhibit A.
NOW THEREFORE BE IT RESOLVED that the Farm Lease attached as Exhibit A should be
and the same is hereby approved. The Mayor is hereby authorized to sign the lease on behalf of
the City.
Passed by the City Council of the City of Waukee, Iowa, and approved this the 17"' day of May,
2021.
Courtney C arke, Mayor
Attest:
-EW)U0 0. 60:��q
Rebecca D. Schuett, City Clerk
RESULTS OF VOTE:
AYE NAY ABSENT ABSTAIN
Anna Bergman Pierce
X
R. Charles Bottenberg
X
Chris Crone
X
Larry R. Lyon
X
Ben Sinclair
X
FARM LEASE
FARM #178
This lease is made this 6 day of May, 2021, by and between City of Waukee, Party of the First Part, also hereinafter referred to as
Owner, which shall in all cases include the Owner's designated agent and Phillips Hamilton, Inc., Party of the Second Part, Hertz Farm
Management, Inc., Agent, also hereinafter referred to as Operator.
SECTION I. DISCLOSURE OF AGENCY
It is clearly understood and agreed by the parties hereto that Hertz Farm Management, Inc. represents the Operator only in this
transaction. Hertz .Farm Management, Inc, is not and will not be the Agent of the Owner. All information obtained by Hertz Farm
Management, Inc. From the Owner will be available to the Operator. The Owner should carefully read all provisions of this agreement
to ensure that they adequately express Owner's understanding of the transaction. If legal advice is desired, Owner should consult an
attorney.
The undersigned Owner acknowledges reading the above Disclosure and the undersigned Owner understands and agrees to its terms.
CITY OF W i ' .E
Date
ti
Owner j 1 Date
SECTION DESCRIPTION �"F FARM °
The Owner, in consideration of the terms specified herein, leases to the Operator for agricultural purposes the following described
property:
Government Lot 1 and Government Lot 4
located in Boone Township, Dallas County, Iowa, containing 37.42 tillable acres, more or less, including and subject to all easements
now existing or which the Owner may grant in the future and all existing buildings. Easement damage payments for crop loss are subject
to the rights of the Operator in accordance with the crop division terms of this lease. In case any portion of the above described real
estate is required for public use and is taken by condemnation or otherwise, the proceeds shall go to the Owner. If growing crops are
damaged, the Operator's share of the value of same shall go to the Operator.
SECTION I1I. LENGTH OF LEASE.
The term of this lease shall be for the period beginning May ,:�, 2021, to February 28, 2022, and continuing thereafter from year to year
unless either party gives written notice to the other as specified by Iowa law, such to be given on or before September 1 of the lease year
to become effective the following March 1.
SECTION IV. LAND USE
The described property shall be used for agricultural purposes: using land use plan, cropping program, and conservation practices as
specified by Owner. Changes therefrom shall be made only with the consent of the Owner. Cultivate and otherwise operate the property
in a rcasonable manner and in accordance with generally recognized and approved agricultural practices. When so directed by the
Owner: farm on the contour, use minimum tillage, residue management, or no -till agricultural practices. Operator agrees to apply
minimum fertilizer amounts, expressed in pounds per acre, to maintain or improve long-term soil fertility, according to the following:
Pz05
K20
Corn
60
60
Soybeans
30
50
Alfalfa
65
250
Oats
35
100
Wheat
40
25
Operator will receive no refund for fertilizer carryover at the end of this lease.
Operator shall comply fully with the Conservation Plan on file with the USDA Natural Resources Conservation Service. The farm shall
be contoured wherever practical. Operator agrees not to plant soybeans following soybeans on the farm, not to moldboard plow, and to
leave crop residue on the surface for conservation purposes. No more than 1-1/4# dry or I quart liquid Atrazine per acre per year may
be applied.
The Operator shall not maintain soil pH at an average of 5.5 to 7.5 for each field by applying lime as needed upon consent of the Owner.
All quarry limestone spread and paid for by Operator will be considered depleted 25% each year. Any undepleted limestone for which
Operator has paid will be refunded by Owner at the termination of this lease. Within 45 days after any limestone is applied, Operator
shall furnish to Owner copies of all scale tickets.
All liquid and pell-lime will be considered depleted in the year it is applied. There will be no refund on these types of lime.
A written cropping program will be provided to the Operator at the beginning of each year which will be followed by the Operator.
Changes therefrom shall be made only with the consent of the Owner.
SECTION V. DIVISION OF CASH RENT
The Operator agrees to pay the Owner a cash rental payable to City of Waukee as follows:
Item Due Date
37.42 acres @ $235/acre = Total $8,793.70 May i
In the event rent is not paid when due, it shall accrue interest at the rate of 15% per annum on the unpaid balance.
* Future rents will be due on March 1 each year.
Government Program (FSA) Average Crop Revenue payments will be divided between the Owner and Operator equal to the division
of the crop. All other payments from the Commodity Credit Corporation, including diversion and cost share, will be 100% payable to
the Owner.
*Conservation Stewardship Program. The Agricultural Act of 2014 includes a Conservation Stewardship Program whereby the
Owner and/or the Operator may be eligible to receive a payment for conservation practices. Whether to participate in this program
will be at the option of the Owner. (Payments under this program will be shared _% by the Owner and 100% by the Operator.)
(To participate in this program will require a mutual agreement between Owner and Operator and a mutual agreement on how the
payments will be shared.) Operator shall not receive any payments under the Conservation Stewardship Program beyond the term of
this lease or any extension thereof. Operator agrees to assign his interest in this program and all future payments to the Owner at the
conclusion of this lease or extension of this lease thereof.
Operator shall carry Revenue Protection on corn and soybeans sufficient to guarantee a minimum of 75% of the yield and 100% of the
price, respectively, on the herein described property and pay said premiums.
SECTION Vl. OPERATOR DUTIES AND CONDITIONS
The Operator shall:
l . Operate the faun in an efficient and workmanlike manner and possess at his expense the essential farm machinery needed to operate
the farm.
2. Control weeds in fields, fencerows, road ditches, building lots, and all areas of the farm by mowing or spraying with 2,4-D.
3. Protect all desirable vegetation, such as grass, field borders, grass waterways, shrubs, and trees; also not to plow or otherwise disturb
permanent vegetation without the consent of the Owner.
4. Keep the premises in as good condition as reasonable use will permit.
5. Perform labor necessary in making minor repairs and improvements.
6. Walk or spray all soybean fields for control of postemergence weeds.
7. Cut legume hay not later than September 10.
8. Furnish labor and supervise the drying and storage of all crops grown on the farm.
9. Assist with erosion control and maintenance and establishment of grass waterways.
10. Incur no expense for or on account of Owner without first obtaining the Owner's consent.
11. Permit no livestock to trample soft fields or allow no hogs to root in fields or lots.
12. Investigate broken or inoperative tile and report same to the Owner. Provide labor for minor repairs to broken tile and keep intakes
and outlets open.
13. Comply with all insurance safety requirements or regulations to help safeguard the Owner's insurance coverage.
14. In the event of damage to crops, buildings, or improvements by any natural or man-made disaster, the Operator shall notify the
Owner by telephone or in writing within 24 hours.
15. The Operator shall carry minimum insurance limits and coverages as follows: (a) Worker's Compensation Insurance and Employer's
Liability as required by State and Federal law; (b) Farmers Comprehensive General Liability and/or umbrella liability coverage
with respect to the Operator's use and occupancy of the premises, products, and completed operations with bodily injury and
property damage liability limits of not less than $1,000,000 per occurrence, $1,000,000 annual aggregate; (c) Automobile Bodily
Injury and Property Damage Liability on all owned, non -owned, hired, or leased automotive equipment in conjunction with
operations, in amounts not less than $300,000 per occurrence. As evidence to the above, the Operator shall submit to the Owner
certificates of insurance on an annual basis or within 30 days of the date of this lease agreement.
16. Government Programs. At the option of the Owner, the Operator agrees to participate in any offered program of the United States
Department of Agriculture for crop production control, soil conservation or range improvement, and observe the terms and
conditions of said program. The Operator agrees to preserve cropland acreage bases allowed under USDA Farm Program provisions
by planting, certifying, and maintaining the allowable program crops and/or set -aside acres. The Operator shall not be allowed to
combine this parcel with another farm unit for government program purposes without written permission from the Owner. Operator
agrees to fully comply with and implement the Natural Resources Conservation Service Conservation Plan that is of record on this
farm. In the event the Operator fails to comply with or implement the Conservation Plan, or causes the FSA acreage bases to
decrease, he shall pay the Owner damages to be determined and the lease shall be null and void immediately.
17. Global Positioning. All data obtained through global positioning on the farm is jointly shared by Owner and Operator. Costs of
soil tests will be shared 0% by the Owner and 100% by the Operator. Copies of all soil test reports shall be provided to the Owner.
18. The Operator agrees to furnish receipts for all expenses and sales pertaining to the farm business. The Owner shall reconcile the
division of crops, account for inventories from time to time, make periodic income or expense settlements, and receive from the
Operator information required to make an annual accounting of all Owner -Operator business transactions. The method used for
dividing the accounting for the harvested grain shall be a customary method and approved by the Owner.
19. Comply with local, state, and federal laws and regulations pertaining to groundwater contamination and hazardous waste storage or
disposal. Follow label directions in the handling and application of all chemicals used on the premises.
20. The Operator shall furnish to the Owner a crop plat of seed, chemicals, and fertilizer applied if requested. Chemical information to
include all requirements for reporting restricted use pesticides.
21. Operator to pay all electrical bills.
22. Operator to pay for all repairs to buildings and equipment.
23. Control rats and other rodents in and around buildings by baiting.
SECTION VII. ADDITIONAL AGREEMENTS
1. Mineral Rights. The Owner reserves all right to any minerals on or underlying the farm.
2. Water Supply. No guarantee, either expressed or implied, is made by Owner for a continuous and adequate water supply.
3. Owner's Lien. Operator grants to Owner, in addition to a statutory Landlord's Lien, a security interest as provided in the Iowa
Uniform Commercial Code and a contractual lien on all Operator's exempt and non-exempt personal property kept or used on
the described farm including, but not limited to, all crops growing or grown on the farm, and the proceeds and products thereof,
all contract rights concerning such crops, proceeds and/or products, all proceeds of insurance collected on account of destruction
of such crops, all contract rights and U.S. government and/or state agricultural farm program payments in connection with the
above described premises whether such contract rights be payable in cash or in kind, including the proceeds from such rights,
as security for all sums due or which will become due from Operator to Owner. At Owner's request, Operator shall provide
Owner with a list of potential buyers for the crops grown on the farm and shall sign financing statements prepared by Owner
to perfect Owner's liens and security interests.
Following is a list of potential buyers of the products grown on this farm. Operator agrees to deliver and sell such products to
no buyers other than those listed. Owner shall deliver Notice of Security Interest to those and only those buyers listed. Operator
acknowledges that it shall be unlawful to sell such products to any buyer not listed without first obtaining the written consent
of the Owner.
1. Heartland Coop
2.
3.
4. Yielding Possession. The Operator agrees that, on termination of this lease, he will yield possession to the Owner without
further demand or notice. Premises shall be in as good order and condition as when same were entered by the Operator. Loss
by fire, tornado, forces beyond Operator's control and ordinary wear and tear are excepted. If the Operator wrongfully
withholds possession of the premises after the date of termination, he shall pay to the Owner the sum of $200.00 for each day
he remains in possession thereafter as liquidated damages.
5. Removal of Portable Buildings. The Operator shall have the right to remove from the farm any portable buildings which he
has placed upon the farm at his own expense. Such moving must be done at termination of the lease, unless additional time is
granted in writing by Owner. The Owner shall in no way be responsible for property owned by the Operator. If such property
is not removed, it shall be considered abandoned and the Operator shall claim no further interest in it, except by written
agreement between Owner and Operator.
6. Release of Recovery Rights. Each party hereby releases the other from claims for recovery for any loss or damage to any
property owned by either party which is insured under valid and collectible insurance policies to the extent of any recovery
collectible under such insurance. It is further agreed that waiver shall apply only when permitted by the applicable policy of
insurance.
7. Environmental Provisions. Operator will operate the farm in strict conformity with the provisions of the applicable
environmental laws and regulations and will apply the appropriate soil and water conservation practices. All hazardous, toxic
materials or agricultural chemicals will be transported, stored, handled, applied and properly disposed of as required by law,
including the acquisition of any required pesticide applicators license, and the maintenance of all pesticide application records
as required by state or federal law, including the Workers Protection Standard. Operator will notify the Owner immediately of
any conditions on the farm that may not be in compliance with applicable laws or regulations. The Operator has a sound
working knowledge of the soil and water conservation practices to be used on the property in the performance of this
Agreement. The Operator has a sound working knowledge of the federal, state, and local environmental laws and regulations
relevant to the performance of this Agreement. The Operator will, upon request of the Owner's Agent, complete and return an
environmental questionnaire. The Operator will indemnify, defend and hold harmless, the Owner and Owner's Agent, against
any loss ofdamages arising by reason of the Operator's failure to comply with the environmental and conservation compliance
provisions of this Agreement. The Operator agrees that the indemnification agreements contained herein will survive the
termination or cancellation of the agreement.
Owner reserves all hunting, trapping and fishing rights.
SECTION VII1. RIGHT OF ENTRY
The Owner reserves the right to enter the premises at any reasonable time to inspect the property, to work and make improvements as
he shall deem necessary. Upon notice of lease termination, the Operator agrees to permit the Owner or his lessee or agent to enter the
premises to do customary tillage and operations on any land from which the current grain crops have been harvested and on any hay
ground after November 1.
SECTION IX. TRANSFER OF INTEREST
The Operator agrees not to assign or sublease any part of the premises without written consent of the Owner. The lease shall be binding
upon the heirs, assignees, or successors in interest of the respective parties hereto.
SECTION X. VIOLATION OF TERMS OF LEASE
If the Operator violates the terms of this lease, the Owner shall have the right to pursue the legal and equitable remedies to which entitled.
Operator's failure to pay any rent when due shall cause unpaid rent to become immediately due and payable, without any notice to or
demand upon Operator.
SECTION XI. LIMIT OF LIABILITY
The Owner makes no guarantee of the farm's productivity and assumes no liability for any condition, visible or not, which may affect
the growing crops. The Operator agrees to indemnify, defend, and hold the Owner harmless against any loss or damage arising by
reason of the Operator's failure to comply with the environmental and conservation compliance provisions of the lease. The Operator
agrees to accept the described property as is and shall not hold the Owner responsible for any condition, visible or not, of the described
property.
SECTION XII. ATTORNEY FEES AND COURT COSTS
If either party files suit to enforce any of the terms of this Lease, the prevailing party shall be entitled to recover court costs and reasonable
attorneys' fees.
SECTION XIII. :INDEMNIFICATION
The Operator shall indemnify, defend, and hold harmless the Owner from all costs, losses, liabilities, claims, penalties, or expenses
(including reasonable attorney's fees), imposed upon or incurred by or asserted against Owner by reason o£ (a) any failure on part of
Operator to perform or comply with any of the terms of the Lease; (b) any enforcement or remedial actions taken by Owner in the event
of a failure to perform or comply with the terms of this lease; or (c) any litigation, negotiation, or transaction in which Owner becomes
involved or concerned (without Owner's fault) respecting the lease, the leased premises, or the use or occupancy thereof by the Operator.
SECTION XIV. OTHER PROVISIONS
It is understood and agreed that this is not a partnership agreement. Neither party shall mortgage or otherwise encumber jointly owned
or co -owned property, nor pledge the credit of the other party hereto for any purpose whatsoever without the consent of the other party.
Other provisions to this lease agreement are listed below:
Subject to the Owner perfecting a first security interest in the 2021 crop and all future crops.
2. Subject to sale by Owner. In the event property is sold, all cash rent received will be refunded without interest. Upon notice of
lease cancellation, the Operator agrees to promptly refund any and all USDA Farm Program payments received and transfer all
program benefits to the succeeding Owner and/or Operator.
3. This lease does not include any land enrolled in the Conservation Reserve Program. Owner will receive 100% of CRP payments.
Operator agrees to perform necessary field operations for CRP land on a custom basis. Payment for each operation will be
determined by the average custom rate as shown in the most recent Iowa State University custom survey.
It is further understood that both parties have read the terms and provisions of this lease agreement and have agreed to abide by the
terms and provisions herein.
SEVERABILITY: If any provision or provisions of this Agreement shall be held to be invalid, illegal, unenforceable or in conflict with
the law of any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
IN WITNESS WHEREOF, we affix our signatures this )'1Aday of May, 2021.
T1
PHILLIPS HAMILTON_IN.C,__ _.._..�,
HERTL FARM MANAGEMENT, Inc. CITY OF WAUKEE
Agent for Operator
By
415 t.,l'. .Box Ll0
Neva a, IA 50201-0500
Office Telephone: 515-382-1500
42-1152140
Social Security # / Federal ID #
Https://hortzassociatesltd.sharepoint.com/siteslztreh 0000-00178/Shared
Documents/Permanent File/Leases/0-178 Phillips Hamilton -City of Waukee.docx
42-6006605
"Tax ID#
515-978-7900 _....._._. _...._ ..____.
Telephone
Aerial Map