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HomeMy WebLinkAbout2019-09-16-J06 City Hall Annex Lease Agr_ApprovalAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: September 16, 2019 AGENDA ITEM:Consideration of approval of a resolution authorizing action to enter into a Lease Agreement – Business Property with SPLaw Properties, LLC FORMAT:Resolution SYNOPSIS INCLUDING PRO & CON: On 09/03/2019, the Waukee City Council held a public hearing and approved taking additional action on a Lease Agreement for a City Hall Annex to house the Development Services Department. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: The City has negotiated a 10-year lease with SP Law Properties, LLC to lease 3,298 s.f. of space. The monthly rent would be $4,397.33 or $52,767.96 annually. The lease would start October 1, 2019. The plan is to move Development Services into the space and the current interior improvements work very well and will require only minor improvements. The lease can be terminated by the City in the 7th, 8th or 9th year of the lease upon 90 day written notice to the Landlord. The City is also paying to the Landlord $3,000 to help cover their moving costs. COMMISSION/BOARD/COMMITTEE COMMENT: N/A STAFF REVIEW AND COMMENT: City staff recommends approving the lease agreement. RECOMMENDATION: Approve the resolution. ATTACHMENTS: I. Proposed Resolution II. Lease Agreement – Business Property PREPARED BY:Dan Dutcher REVIEWED BY: J6 RESOLUTION 19- RESOLUTION AUTHORIZING ACTION TO ENTER INTO A LEASE AGREEMENT-BUSINESS PROPERTY WITH SPLAW PROPERTIES, LLC IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $700,000 FOR THE LEASE AGREEMENT - BUSINESS PROPERTY (GENERAL FUND) WHEREAS, Waukee, State of Iowa (the "City"), is in need of funds to pay costs of real property for use by the City, and it is deemed necessary and advisable that a lease agreement in the aggregate principal amount of not to exceed $700,000 be entered into for such purpose; and WHEREAS, pursuant to notice published as required by Sections 364.4 and 384.25 of the Code of Iowa, as amended (the "Code"), this Council held a public meeting and hearing upon the proposal to institute proceedings for the authorization of a lease agreement in the aggregate principal amount of not to exceed $700,000 for such purposes, and the Council is therefore now authorized to proceed with the authorization of the lease agreement; and WHEREAS, SPLaw Properties, LLC, as defined herein, has agreed to make available to the City the Business Property pursuant to the terms of a Lease Agreement (the "Lease"), between the City, as Tenant, and SPLaw Properties, LLC, as Landlord thereunder; and WHEREAS, the City agrees to repay SPLaw Properties, LLC the Base Rent and, including reimbursement of insurance costs to the Landlord, over a period of 10 years, all as set forth in the Lease; and WHEREAS, this Council has determined that the term of the Lease does not exceed the economic life of the property being acquired pursuant thereto; and WHEREAS, the Lease will be payable from the General Fund; and WHEREAS, the City has a population of more than 5,000, but not more than 75,000, and the principal amount of the lease does not exceed $700,000, and aggregate payments under all lease agreements payable by the City from the General Fund do not exceed 10% of the last certified General Fund budget; and WHEREAS, there has been presented at this meeting the Lease between the City and SPLaw Properties, LLC; and WHEREAS, it appears that such instrument is in appropriate form and is an appropriate instrument for the purposes intended. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WAUKEE, IOWA: Section 1. Definitions. The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: "Base Rent" shall mean the monthly cost of use of space as outlined in the Lease. "Business Property" shall mean the "premises", situated in Dallas County, Iowa, as equipped and more particularly described in the Lease. "Financing Documents" shall mean any insurance, delivery, transcript and incumbency certificates to be delivered in conjunction with the closing of the Lease. "Fiscal Year" shall mean the twelve-month period beginning on July 1 of each year and ending on the last day of June of the following year, or any other consecutive twelve-month period adopted by the Governing Body or by law as the official accounting period of the System. Requirements of a Fiscal Year as expressed in this Resolution shall exclude any payment of principal or interest falling due on the first day of the Fiscal Year and include any payment of principal or interest falling due on the first day of the succeeding Fiscal Year. "General Fund" shall mean the fund established to receive all moneys from taxes and other sources for City government purposes as provided in Section 384.3, Code of Iowa. "Governing Body" shall mean the City Council of Waukee, Iowa, or its successor in function with respect to the operation and control of the System. "Issuer" or "City" or "Tenant" shall mean Waukee, State of Iowa. "Lease" shall mean the Lease Agreement – Business Property, by and between the City and SPLaw Properties, LLC. "Rebate Fund" shall mean the fund so defined in and established pursuant to the Tax Exemption Certificate. "Resolution" shall mean this resolution authorizing the issuance of the Lease. "SPLaw" shall mean SPLaw Properties, LLC, having its principal place of business in Waukee, Iowa, and being authorized to conduct business in the State of Iowa. "Treasurer" shall mean the Director of Finance or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Lease issued hereunder. Section 2. Authority and Purpose. The Lease authorized by this Resolution shall be issued pursuant to Sections 362.4(4) and 384.25 of the Code of Iowa, and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa. The Lease is hereby authorized in the aggregate amount of not to exceed $700,000 for the purpose of paying costs of the use of the Business Property. Section 3. Approval of Lease. SPLaw shall make the Business Property available to the City pursuant to the Lease, which provides for the repayment by the City of Base Rent and reimbursable insurance costs from the date of possession, as outlined in the Lease in the amounts and in installments as specified therein, and the form and content of the Lease, the provisions of which are incorporated herein by reference, hereby are in all respects authorized, approved and confirmed, and the Mayor and the City Clerk are hereby authorized, empowered and directed to execute, attest, seal and deliver the Lease for and on behalf of the City, including necessary counterparts and in substantially the form and content now before this meeting but with such changes, modifications, additions or deletions therein as shall to them seem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of their approval of any and all changes, modifications, addition or deletions therein from the form and content of the Lease now before this meeting, and from and after the execution and delivery of the Lease, the Mayor and the City Clerk are hereby authorized, empowered and directed to do all such acts and things and execute all such documents as may be necessary to carry out and comply with the provisions of the Lease as executed. Section 4. Additional Documents. The Mayor, City Clerk, and Finance Director (as appropriate) are hereby authorized, empowered and directed to execute, attest, seal and deliver for and on behalf of the City any and all Financing Documents and any other additional certificates, documents, opinions or other papers and perform all other acts, including without limitation the execution of all closing documents, as they may deem necessary or appropriate in order to implement and carry out the intent and purposes of this Resolution. Section 5. Levy and Certification of Annual Tax; Other Funds to be Used. (a) Levy of Annual Tax. That for the purpose of providing funds to pay Base Rent and Insurance under the Lease hereinafter authorized to be issued, there shall be levied in the General Fund for each future year the following direct annual tax on all of the taxable property in Waukee, Iowa, to-wit: AMOUNT* FISCAL YEAR (JULY 1 TO JUNE 30) YEAR OF COLLECTION $40,544 2019/2020 $54,058 2020/2021 $54,058 2021/2022 $54,058 2022/2023 $54,058 2023/2024 $56,696 2024/2025 $56,696 2025/2026 $56,696 2026/2027 $56,696 2027/2028 $56,696 2028/2029 (NOTE: For example the levy to be made and certified against the taxable valuations of January 1, 2018, will be collected during the fiscal year commencing July 1, 2019). *In addition, any maintenance or other costs payable under the Lease shall be paid from the General Fund. (b) Resolution to be Filed With County Auditor. A certified copy of this Resolution should be filed with the County Auditor of Dallas County, State of Iowa, and said Auditor is hereby instructed in and for each of the years as provided, to levy and assess the tax hereby authorized in Section 2 of this Resolution, in like manner as other taxes are levied and assessed, and such taxes so levied in and for each of the years aforesaid be collected in like manner as other taxes of the City are collected, and when collected be used for the purpose of paying principal and interest on said Lease issued in anticipation of said tax, and for no other purpose whatsoever. (c) Additional City Funds Available. Principal and interest coming due at any time when the proceeds of said tax on hand shall be insufficient to pay the same shall be promptly paid when due from current funds of the City available for that purpose and reimbursement shall be made from such special fund in the amounts thus advanced. Section 6. Lease Fund. The tax shall be assessed and collected each year at the same time and in the same manner as, and in addition to, all other taxes in and for the City, and when collected they shall be converted into a special fund within the General Fund to be known as the "LEASE DEBT SERVICE FUND 2019 NO. 1" (the "Lease Fund"), which is hereby pledged for and shall be used only for the payment of the principal of and interest on the Lease herein authorized to be issued. Section 7. Registration of Lease; Appointment of Registrar; Transfer; Ownership and Delivery. (a) Registration. The ownership of the Lease may be transferred only by the making of an entry upon the books kept for the registration and transfer of ownership of the Lease, and in no other way. The City Clerk is hereby appointed as Registrar and Paying Agent under the terms of this Resolution. Registrar shall maintain the books of the Issuer for the registration of ownership of the Lease for the payment of principal of and interest on the Lease as provided in this Resolution. The Lease shall be negotiable as provided in Article 8 of the Uniform Commercial Code subject to the provisions for registration and transfer contained in the Lease and in this Resolution. (b) Transfer. The ownership of the Lease may be transferred only upon the Registration Books kept for the registration and transfer of the Lease and only upon surrender thereof at the office of the Registrar together with an assignment duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar, along with the address and social security number or federal employer identification number of such transferee (or, if registration is to be made in the name of multiple individuals, of all such transferees). In the event that the address of the registered owner of the Lease (other than a registered owner which is the nominee of the broker or dealer in question) is that of a broker or dealer, there must be disclosed on the Registration Books the information pertaining to the registered owner required above. Upon the transfer of the Lease, a new fully registered Lease, of any denomination permitted by this Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transferred fully registered Lease, and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. Any costs or expenses, including counsel fees, of the Registrar incurred in connection with an exchange or transfer of the Lease shall be paid by the holder of the Lease requesting such transfers as a condition precedent to the exercise of the privilege of making such exchange or transfer. (c) Registration of Transferred Lease. In all cases of the transfer of the Lease, the Registrar shall register, at the earliest practicable time, on the Registration Books, the Lease, in accordance with the provisions of this Resolution. (d) Ownership. As to the Lease, the person in whose name the ownership of the same shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of the Lease and the premium, if any, and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Lease, including the interest thereon, to the extent of the sum or sums so paid. Section 8. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the Issuer and the holder or holders of the Lease, and after the issuance of any of the Lease no change, variation or alteration of any kind in the provisions of this Resolution shall be made in any manner, except as provided in the next succeeding Section, until such time as all of the Lease, shall have been satisfied and discharged as provided in the Lease. Section 9. Severability Clause. If any section, paragraph, clause or provision of this Resolution be held invalid, such invalidity shall not affect any of the remaining provisions hereof, and this Resolution shall become effective immediately upon its passage and approval. Section 10. Repeal of Conflicting Resolutions. All resolutions in conflict herewith are hereby repealed. PASSED AND APPROVED this 16th day of September, 2019. _____________________________ Mayor ATTEST: ______________________________ City Clerk