02-1124Council File # � a+ � ��y
Green Sheet # O ��.
Presented By
Referred To
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
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Committee: Date
2 WHEREAS, on September 30, 2002, the City of Saint Paul ( the "City") and the County
3 of Ramsey ( the "Count}�') entered into a I,ease Agreement with an Option to Purchase ( the
4 "Original Lease") certain property and improvements presenfly owned by the County and
5 commonly known as the Benz building for use by the City as a public safety building and related
6 puiposes; and
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WHEREAS, Article 3 of the Original Lease provided that the City would pay various
costs including base rent on a monthly basis to the County in an amount sufficient to cover the
County's costs associated with revenue bonds it would issue for the purpose of financing the
repair, renovation and remodeling of the said premises for use by the City as a pubiic safety
building; and
WFIEREAS, Article 4of the Original L.ease provided that in calendar year 2003 the
County will issue revenue bonds in an amount sufficient to yield Twelve Million Dollars
($12,000,000) to finance the repair, construction, renovation and other expenses of the City to
furnish and equip the said premises for occupancy by the City as a public safety building; and
WHEREAS, Articlel8 of the Original Lzase provided that the Ciry would pay to the
County the sum of One Million, Five Hundred Thousand Doliars ($1,500,000.00) as Option
Earnest Money to preserve the City's option to purchase the said premises from the County and
that pursuant to Article 18 of the Original I.ease the City paid the said sum on or about
September 30, 2002; and
WHEREAS, as the financing details set forth in the Original L.ease progressed in
connection with the requirements of the County's said Bond issuance, staff from the City and
County recognized that it would be mutually desirable to amend the Original Lease in order to
better reflect the City's obligations as the reai financial party in interest regazding paying the
County for its costs associated with undertaking the repair, construction, renovation and rents
necessary to operate the said building as a public safety building; and
WHEREAS, such amendments to the Original lease as are attached hereto and are
incorporated herein be reference in the attached Amended and Restated Lease Agreement (the
"Amended L.ease") and include a prepaymendpurchase option in favor of the City, a semiannua]
base rent payment schedule, an option to both the City and the County to refund the bonds upon
approval of both parties, and an option to offset the base rent payments through earnings on the
County's bond fund and debt service reserve fund; and
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WI�REAS, City staff have recommended that the Amended Lease relaung to the Benz
building by and between the County and the City be approved; and
WHEREAS, City staff have further recommended that it is pmdent and desirable far the
City, in connection with the terms and conditions set forth in the Amended Lease, to review and
approve additional documents and conditions in connection with entering into the Amended
Lease; and
WHEREAS, these documents include a Continuing Disclosure Agreement which is
issued in the ordinary course of business in connection with the issuance of revenue bonds and
which is attached hereto and incorporated herein by reference; and
WHEREAS, City staff have recommended that the Continuing Disclosure Agreement
relating to the revenue bonds by and between the County and the City be approved; now
THEREFORE, BE IT RESOLVED, the Council of the City of Saint Paul, upon the
recommendation of staff, hereby approves the said Amended I.ease and the said Continuing
Disclosure Agreement for the Benz Building in substantially the forms submitted, with such
deletions, completions and changes therein as aze necessary and appropriate and approved by
Bond Counsel, the City Attorney and City Staff; and
BE IT FURTHER RESOLVED, that the Mayor, City Clerk and Director, Office of
Financial Services, are hereby authorized and directed to execute the Amended Lease and the
Continuing Disclosure Agreement and that the same are also authorized and directed to execute
such other documents as are contemplated thereby or are necessary in connection therewith; and
BE IT FURTHER RESOLVED, that the approval hereby given to the said documents
includes approval of such additional details therein as may be necessary and appropriate, such
modifications thereof, deletions therefrom and additions thereto prior to their execution as may
be necessary and appropriate and approved by the City Attorney, Bond Counsel, City staff and
the City officials authorized to execute them, and includes approval of such related instruments
as may be required to be executed in connection with the various documents referred to above;
and
BE IT FURTHER RESOLVED, that City Attorney, Bond Counsel, City staff and City
officials aze hereby authorized to approve any said changes and related instruments on behalf of
the City upon deternunation by them that such changes and related instruments are consistent
with this Resolution and are necessary or desirabie to effectuate the purposes hereof. The
execution of any instrument by the appropriate officer or officers of the City herein authorized
shall be conciusive evidence of the approval of such documents in accordance with the terms
hereof; and
BE IT FURTHER RESOLVED, that the Council of the City of Saint Paul, in
connection with the said approvals, states the following in connection with the County's issuance
of the revenue bonds:
1. Funds: Arbitraee. Until expended on the Benz building, the proceeds of the Bonds shall
be held in the custody of the Trustee pursuant to an Indenture. Payments on the Amended L.ease
shall be made from annual appropriarions, and moneys to make such payment shall not be
segregated in any special fund. No portion of those proceeds of the Bonds within the control of
the City shall be used direcfly or indirectly to acquire higher yielding investments or to replace
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2 6. Countv's Official Statement. The County, in conjunction with its advisor Springsted
3 Incorporated and City staff, has prepared an Official Statement in connection with the offering of
4 the Bonds which makes disclosures about, among others, the City, Amended and Restated Lease
5 and Bonds. The City hereby approves the use of the Official Statement in connecrion with the
6 offering of the Bonds.
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funds which were used directl or indirectl to ac uire hi her ieldin mvestments, exce t 1 b �� \ �� y
Y Y 9 S Y g� P�)
for a reasonable temporary period until such proceeds are needed for the purpose for which the
Amended Lease is entered into, and (2) in addirion to the above in an amount not greater than
$100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in any
City account which will be used to make payments on the Amended Lease in excess of amounts
which under then-applicable federal azbitrage regulations may be invested without regazd as to
yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said
arbitrage regulations on such investments after taking into account any applicable "temporary
periods" or "minor portion" made available under the federal arbitrage regulations. In addition,
those proceeds of the Bonds within the control of the City and moneys used to make payments on
the Amended Lease shall not be invested in obligations or deposits issued by, guaranteed by or
insured by the United States or any agency or instmmentality thereof if and to the extent that
such investment would cause the Bonds or Amended Lease to be "federally guaranteed" within
the meaning of Section 149(b) of the federal Intemal Revenue Code of 1986, as amended (the
"Code").
17 2. No General Obligation Pledge. The Amended Lease is not a general obligation of the
18 City but rather is payable from amounts to be annually appropriated, and the full faith, credit and
19 taYing powers of the City shall not be and are not pledged. Base rent override rental payments
20 and operating cost rent payments on the Amended I.ease aze due monthly, and base rent
21 payments are due semiannually five-sixths in arrears and one-sixth in advance, all over the
22 approximately 22-year term of the Amended Lease.
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24 3. Records and Certificates. The officers of the City aze hereby authorized and directed to
25 prepare and furnish to the County, and to the attorneys approving the legality of the Bonds and
26 Amended Lease, certified copies of all proceedings and records of the City relating to the
27 Amended I.ease and to the financial condition and affairs of the City, and such other affidavits,
28 certificates and information as aze required to show the facts relating to the legality of the
29 Amended I.ease and the legality and mazketability of the Bonds as the same appear from the
30 books and records under their custody and control or as otherwise Irnown to them, and all such
31 certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed
32 representations of the City as to the facts recited therein.
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4. Negative Covenants as to Use of Proceeds and Project. The City hereby covenants not to
use the proceeds of the Bonds or Amended Lease or to use the Project, or to cause or permit them
to be used, or to enter into any defened payment arrangements for the cost of the Project, in such
a manner as to cause the Amended Lease or Bonds to be "private activity bonds" within the
meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that it
will take no actions over the term of the Amended Lease that would cause the Amended I.ease or
Bonds to be private activity bonds, and the average term of the Amended L.ease is not longer than
reasonably necessary for the governmental purpose of the Amended L.ease. The City hereby
covenants not to use those proceeds of the Amended Lease or Bonds which are within the control
of the City in such a manner as to cause the Amended L,ease or Bonds to be "hedge bonds" within
the meaning of Section 149(g) of the Code.
5. Ternunation of Amended Lzase. The Amended Lease provides the City with the option
to terminate at the end of any fiscal year during its term. The City and City Council on the date
this Kesolution is adopted intend and reasonably expect to appropriate and to pay the rent due
pursuant to the Amended Lease for the entire term of the Amended L.ease.
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2 FINALLY RESOLVED, that the appropriate City officials are hereby authorized to
3 enter into and execute an Amended and Restated Lease Agreement and Continuing Disclosure
4 Agreement relative to the Benz Building.
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of Financial Services
DA7E INITNTED
,,,:5,oz GREEN SHEET
mmzwate
�2/24/�2
ASSIGN
NUMBERFOR
ROUTING
ORDER
TOTAL # OF SIGNATURE PAGES
No 114022
u DEPARTMENT�IREG�OR L 41 CITTCAUNCIL
I
'LS_e
� CITYATfORNEY L�� ] CI1YG rcr
❑ FlNPNGIALSERVICES�IR FlNANCIpLSERVIACCTG I
� MAYOR ❑ I
1_ (CLIP ALL LOCATIONS FOR SIGNATURE) (
��attached resolution authorizes the proper City officials to execute an amended and restated lease agreemement for
Benz public safety building.
ir+i ivrv Hpprove �H� or rce�ect (i
PLANNING COMMISSION
GB COMMITTEE
CIVIL SERVICE COMMISSfON
(Who, Vvhat, Wnen, VYnere, Why)
RSONAL SERVICE CONTRACTS MUSTANSWER THE FOLLOWING QUESTIONS:
Has this person/firm everworked untler a conVact for Nis tlepartmenY?
YES NO
Has this person/firtn ever been a ary emPloyee?
VES NO
Does ihis person/firtn possess a skill not nortnally possessed by any cu�rent dry employee?
VES NO
Is this person/firm a targeted ventlof�
YES NO
p1310 dll VES 305We15 00 52p3fdt2 Sh2C� aptl 2�fdCh �O pR20 ShEE[
City, authorizetl by cvunal resofution 02-823, antl County have ffireatly enteretl irito a Lease �reemeM tlatetl as of September 30, 2002
�e Benz public safery bwltling, but as Ne financin9 has progressetl the Ciry stafi has found it benMdal to Ne Ciry to make cetlain fechnical changes to the lease
itled in the amended antl restated lease
IF APPROVED
setfouM in ihe Amentletl Lease AgreemeN ace financially benefival to Ne LLie City.
IF APPROVED
APPROVED
have ro proceetl with the transacM1On basetl on fhe Originai Lease.
�OUNT OF TRANSACTION $
SOURCE
INFORMATION (EXPLAIN)
COST/REVENUE BUDGETEO (CIRCLE ONE) YES
ACTNITY NUMBER
NO
O�.-11�4.
CON'I'INLJING DISCLOSURE AGREEMENT
This Continumg Disclosure Agreement (this "Disclosure Agreement") is by and between Ramsey
County, Minnesota (the "Lssuer"), and the City of Saint Paul, Minnesota (the "City"), in connection with
the issuance of the Issuer's $13,930,OQ0 PuUlic Facility Lease Revenue Sonds, Series 2�03A (City of
Saint Paul, Minnesota, Lease Obligarion) (the "Bonds"). The Bonds are being issued pursuant to a
Resolurion of the Issuer adopted December � 2002 (the "Resolution"), and a Mortgage and Trust
Indenture dated as of January 1, 2003 (the "Indenture"), between the Issuer and
as trustee (the "Tmstee"). The Issuer and City covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Aereement. This Disclosure Agreement is being
executed and delivered by the Issuer and City for the benefit of the Owners of the Bonds and in order to
assist the Participaring Underwriters in wmplying with SEC Rule 15c2-12(b)(5). The City is an
obligated person with respect to the Bonds.
SECTION 2. Definifions. In addirion to the definirions set forth in and pwsuant to the
Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise
defined in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any annual financial information provided by the City pursuant to,
and as described in, Secfions 3 and 4 of this Disclosure Agreement.
"Audited Financial Statements" shall mean the financial statements of the City audited annually
by an independent certified public accounting firm or the State Auditor of the State, prepared pursuant to
generally accepted accounting principles promulgated by the Financial Accounring Standards Boazd,
modified by govemmental accounting standards promulgated by the Government Accounring Standards
Board.
"Dissemination Agent" shall mean such pariy from time to rime designated in writing by the
Issuer or City to act as information dissemination agent and which has filed with the Issuer or City a
written acceptance of such designation.
"Fiscal Year" shall be the fiscal year of the City.
"Governing Body" shall, with respect to the Bonds, have the meaning given that term in
Minnesota Statutes, Section 475.51, Subdivision 9.
"MSRB" shall mean the Municipal Securities Rulemaking Board.
"National Repository° shall mean any Nationally Recognized Municipal Securities Information
Repository for purposes of the Rule. Currently, the following are Narional Repositories:
Bloomberg Municipal Repository
100 Business Park Drive
Skillman NJ 08558
Phone: (609) 279-3225
Fax: (609)279-5962
E-Mail: munisna bloomber�.com
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FT Interactive Data
Attn: NRMSIR
100 William Sh
New York NY 10038
Phone: (212) 771-6999
Faac: (212) 771-7390 (Secondary Market Information)
E-Mail: Nrmsir(a7ftid.com
Standard & Poor's J. J. Kenny Repository
55 Water Street - 45`� Floor
New York NY 10041
Athi: Repository Services
Phone: (212) 438-4595
Fas: (212) 438-3975
E-Mail: nrmsir reoositorvCa�sandp.com
DPC Data Inc.
One Executive Drive
Fort I,ee NJ 07024
Phone: (201) 346-0701
Fas: (201)947-0107
E-Mail: Nrmsir@dpcdata.com
"Occurrence(s)" shall mean any of the events listed in Section S.A. of this Disclosure Agreement.
"Official Statement" shall be the Preliminaiy Official Statement dated November _, 2002,
prepared in connecfion with the Bonds, and an addendum thereto dated December � 2002.
"Owners" shall mean the registered holders and, if not the same, the beneficial owners of any
Bonds.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to
comply with the Rule in connecfion with offering of the Bonds.
"Repository" st�all mean each National Repository and each State Depository.
"Resolurion" shall mean the resolufion adopted by the Governing Body of the Issuer providing
for, and authorizing the issuance of, the Bonds pursuant to the Indenture.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securifies and Exchange Commission
under the 5ecurities Exchange Act of 1934, as the same may be amended from rime to time or interpreted
by the Securities and Exchange Commission.
"State" shall mean the State of Minnesota.
"State Depository" shall mean any public or private repository or entity designated by the State as
a state depository for the purpose of the Rule. As of the date of this Disclosure Agreement, there is no
State Depository in Minnesota.
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SECTION 3. Provision of Annual Renorts.
A. Beginning in connecrion with the Fiscal Yeaz ending on December 31, 2��2, the
City shall, or stiall cause the Disseminarion Agent to, as soon as available but not later than December 31,
2003, and by December 31 of each year thereafter, provide to each Repository an Annual Report which is
consistent with the requirements of Section 4 of this Disclosure Agreement.
B. If the City is unable to provide to the Repositories an Annual Report by the date
required in subsection A, the City shall send a notice of such delay and estimated date of delivery to each
Repository or to the MSRB and to the State Depository, if any.
SECTION 4. Content and Format of Annual Reoorts. The City's Annual Report shall contain
or cross reference the financial informarion and operating data pertaining to the City listed below as of the
end of the preceding Fiscal Year. The Annual Report may be submitted to each Repository as a single
document or as separate documents comprising a package, and may cross-reference other information as
provided in this Disclosure Agreement.
The following type of fmancial information and operafing data shall be supplied:
A. an update of the type of informafion contained in the Official Statement under the
capfion CITY PROPERTY VALUES;
B. an update of the type of information contained in the Official Statement under the
captions GENERAI, OBLIGATION DEBT, REVENUE DEBT AND LEASE OBLIGATIONS,
and REVENUE DEBT OBLIGATIONS;
C. an update of the type of information contained in the Official Statement under the
caption TAX RATES, LEVIES AND COLLECTIONS;
D. an update of the type of informafion contained in the Official Statement under the
caption CITI' FUNDS ON HAND;
E. an update of the type of information contained in the Official Statement under the
caprion CTTY INVESTMENTS;
F. an update of the type of information contained in the Official Statement under the
capfion and subheadings GENERAI, INFORMATION CONCERNING THE CITY —"Major
Employers in Ramsey County", "Average Annual Labor Force Data" and "Annual Building
Pernuts Issued by the City";
G. data extracted from preliminary, unaudited financial statements of the City and
from past audited financial statements of the City in the form and of the type contained in
Appendix IV of the Official Statement; and
H. Audited Financial Statements of the City. The Audited Financial Statements of
the City may be submitted to each Repository sepazately from the balance of the Annual Report.
In the event Audited Financial Statements of the City aze not available on or before the date for
filing the Annual Report with the appropriate Repositories as set forth in Section 3.A. above,
unaudited financial statements shall be provided as part of the Annual Report. The accounting
principles pursuant to which the financial statements will be prepared will be pursuant to
generally accepted accounting principles promulgated by the Financial Accounfing Standards
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Board, as such principles are modified by the governmental accounting standards promulgated by
the Government Accounting Standards Board, as in effect from time to rime. If Audited
Financial Statements aze not provided because they are not available on or before the date for
filing the Annual Report, the CiTy shall promptly pmvide them to the Repositories when
available.
SECTION 5. Renorting of Si ificant Events.
A. This Secrion 5 shall govern the giving of notices of the occurrence of any of the
following events with respect to the Bonds, if material:
(1) principal and interest payment delinquency;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial difficulries;
(4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substiturion of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events affecting the tas-exempt status of the security;
(7) modificarions to rights of security holders;
(8) optional or unscheduled redempfion of any Bonds;
(9) defeasances;
(10) release, subsfitution or sale of property securing repayxnent of the Bonds; and
(11) rating changes.
B. Whenever an event listed in Section S.A. above has occurred, the City shall as
soon as possible deternune if such event would constitute material information for Owners of Bonds. If
laiowledge of the Occurrence would be material, the City shall promptly file a notice of such Occurrence
with each National Repository or the MSRB and with the State Depository, if any.
C. The City agrees to provide or cause to be provided, in a timely manner, to each
National Repository ar the MSRB and to the State Depository, if any, notice of a failure by the CiTy to
provide the Annual Reports described in Section 4.
SECTION 6. Terminafion of Reportine Oblieafion. The City's obligations under this
Disclosure Agreement sk�all terminate upon the legal defeasance, prior redemption or payment in full of
all of the Bonds.
SECTION 7. Disseminafion AQent. The Issuer or City may, from rime to time, appoint or
engage a Disseminarion Agent to assist the City in carrying out its obligations under this Disclosure
Agreement, and may discharge any such Disseminafion Agent, with or without appointing a successor
Disseminarion Agent. ff the Trustee, upon the request of the City as set forth in Secfion 11-1 of the
Indenture, is the Disseminarion Agent, the Disseminarion Agent shall have only such dufies as are
specifically set forth in this Disclosure Agreement and no implied duties or obligarions shall be read into
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this Disclosure Agreement against the Dissemination Agent, and the Disseminarion Agent shall not be
required to take any action to cause the City to comply with its obligations under this Disclos�se
Agreement, and the Dissemination Agent has no power or authority to enforce the City's performance of
its duries and obligafions under this Disclosure Ageement.
SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the Issuer and City may amend this Disclosure Agreement, and any provision of this
Disclosure Agreement may be waived, if (a) a change in law or change in the ordinary business or
operarion of the City has occurred, (b) such amendment or waiver would not, in and of itself, cause the
undertaldngs herein to violate the Rule if such amendment or waiver had been effective on the date hereof
but taldng into account any subsequent change in or official interpretarion of the Rule, and (c) such
amendment or waiver is supported by an opinion of counsel expert in federal securities laws to the effect
that such amendment or waiver would not materially impair the interests of Owners.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed
to prevent the Issuer or City from disseminating any other information, using the means of disseminarion
set forth in this Disclosure Agreement or any other means of communicarion, or including any other
inforxnation in any Annual Report or notice of an Occurrence, in addition to that which is required by this
Disclosure Agreement. If the Issuer or City chooses to include any infoxmation in any tlnnual Report or
norice of an Occurrence in addition to that which is specifically required by this Disclosure Agreement,
the Issuer or City shall have no obligation under this Disclosure Agreement to update such information or
include it in any future Annual Report or notice of an Occurrence.
SECTION 10. Default. In the event of a failure of the City to provide inforxnation required by
this Disclosure Agreement, any Owner may take such actions as may be necessary and appropriate,
including seeldng mandamus or specific performance by court order, to cause the City to comply with its
obligarions to provide information under this Disclosure Agreement. A default under this Disclosure
Agreement shall not be deemed an Event of Default under the Resolution or Indenture, and the sole
remedy under this Disclosure Agreement in the event of any failure of the City to comply with this
Disclosure Agreement shall be an acfion to compel performance.
SECTION 11. Beneficiaries. This Disclosure Ageement shall inure solely to the benefit of the
Issuer, City, Participating Underwiiters and Owners from time to time of the Bonds, and shall create no
rights in any other person or entity.
SECTION 12. Reserved Riehts. The Issuer and City reserve the right to discontinue providing
any information required under the Rule if a final detexxninarion should be made by a court of competent
jurisdicrion that the Rule is invalid or otherwise unlawful or, subject to the provisions of Section 8 hereof,
to modify the undertaking under this Disclosure Agreement if the Issuer or City determines that such
modification is required by the Rule or by a court of competent jurisdiction.
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Date: 7anuary � 2003.
RAMSEY COUN'i'Y. IvIINNESOTA
By
Its Chair of the County Boazd
Approved as to Form: By
Its County Manager
Assistant County Attomey
$13,930,000 Public Facility Lease Revenue Bonds, Series 2003A (Saint Paul — Benz Building Project)
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Date: January _, 2003.
CITY OF SAINT PAUL, MINNESOTA
By
Its Mayor
Approved as to Form: By
Its Duector, O�ce of
Financial Services
Assistant City Attomey
$13,930,000 Public Facility Lease Revenue Bonds, Series 2003A (Saint Paul — Benz Building Project)
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AMENDED AND RESTATED
LEASE AGREEMENT
Tlus Axnended and Restated Lease, hereinafter, together with any supplements,
amendments, or e�ibits, "the I,ease", is made and entered into as of this 16"' day of December,
2002, by and between the County of Ramsey, a political subdivision of the State of Mivnesota
(the County), and the City of St. Paul, Minnesota, a home rule charter city and a municipal
corparation under the laws of the State of Mimiesota (the City).
RECTTALS
WHEREAS, the County owns real property and improvements (the PROPERTY) more
particularly described in Exhibit A which is attached hereto and incorporated herein; and
WIIEREAS, the City desires to lease the Property from the County, and the County
desires to lease the Property to the City, far the term and under the conditions stated herein; and
WIIEREAS, the parties intend that the City use the property for Pubiic Safety offices and
related purposes; and
WHEREAS, the building which is on the Property is vacant and unready for office use;
and
WHEREAS, it is the desire of the parties that the County undertake to repair, renovate,
and remodel the building for use as a Public Safety office facility by the City; and
WHEREAS, the County is willing and able to repair, renovate, and remodel the building
for the above purposes; and
WHEREAS, the County is willing and able to finance the repair, renovarion and
remodeling of the building through the use of the proceeds of the sale of Revenue Bonds (the
Bonds) in the year 2003; and
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WHEREAS, the City is willing and able to reimburse the County for the expense the
County incurs for issuance and repayment of the Bonds through the rents it will pay to the
County in this Lease of the Property; and
WIIEREAS, to implement the foregoing plans the parties, on or about September 30,
2002 entered into a Lease Agreement (Original Lease); and
WHEREAS, the parties have agreed to amend and restate the terms of the Original Lease
to conform to the requirements of Bond documents, provide for different Base Rent Payment
dates, provide for early retirement of the bonds and accelerated purchase of the Property, by the
City, allocate interest earnings, and clarify the tas exempt nature of the Original Lease,
NOW, THEREFORE, in consideration of the foregoing recitals, the other terms and
conditions hereof, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby aclrnowledged by the parties, the Original Lease is amended and restated as
follows:
ARTICLE 1. PROPERTY
In consideration of the Obligation of the City to pay Rent (as defined in Article 3) and in
consideration of the other terms and provisions of this agreement, the County hereby leases to
the City, and the City hereby takes from the County, the Property, together with all rights,
privileges, easements, and appurtenances belonging to or pertaining to the Property.
ARTICLE 2. TERM
The Term of this lease shall commence on January 1, 2004 (Commencement Date) and
terminate on December 31, 2023 (Termination Date) for a term of two hundred forty months (the
Term).
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Notwithstanding the foregoing, if the Property shall, on the scheduled Commencement
Date of the Term, not be ready for occupancy by the City because construction has not yet been
completed, or by reason of any Building operations, repair or remodeling to be done by the
County, the County shall use good faith efforts to complete such conshuction, Building
operations, repair or remodeling and to deliver possession of the Property to the City. The
County, using such good faith efforts, shall not in any way be liable for failure to obtain
possession of the Property for the City or to timely complete such construction, Building
operations, repair or remodeling, but Addition Rent, as defined herein, payable by the City under
this Lease shall abate until the date the County is able to tender possession of the Property to the
City, which date shall be deemed the "Commencement Date;" and the Term shall be
automarically extended so as to include the full number of months of the Term, except that if the
Commencement Date is other than the first day of a calendar month, such Term shall also be
extended for the remainder of the calendar month in which possession is tendered.
The taking of possession by the City shall be deemed conclusively to establish that the
Property has (a) been remodeled, renovated and repaired in accordance with the provisions of the
Work Agreement which is attached hereto as Exhibit B and made in part hereof; and (b) are in
good and satisfactory condition as of the date when possession was taken.
Base Rent, as defined herein, shall not abate during any period of time the building is not
ready far occupancy by the City because conshuction or remodeling has not been completed, and
the City shall make the Base Rent payments on the dates and in the amounts specified in the Rent
Schedule.
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ARTICLE 3. RENT
(a) Base Rent. Base rent shali be the sum of money sufficient to pay the annual debt
service, including principal, interest, and any other chazges, of the Bonds or Reissue Bonds. The
City shall pay Base Rent, without demand, deduction, or set off, for the entire Term, in the
amount and at the tnne stated in the Rent Schedule, which is attached hereto and incorporated
herein as Eachibit C. Base Rent shall be payable semi-annually, on June 1 and December 1, with
the first payment due June 1, 2004, and the final payment due December 1, 2023.
If at any time during the term of this Lease, the County, with the consent of the City,
which consent shall not be unreasonably withheld, is able to and does redeem the Bonds and
reissue bonds at a lower interest rate (the Reissue Bonds) the County shall recalculate the Base
Rent to reflect the lower debt service. All provisions of this Lease which apply to the Bonds
shall then apply to the Reissue Bonds. Provided, however, that the County shall not extend the
redemption date for any such Reissue Bonds beyond the term hereof.
(b) Base Rent Override. As Additional Rent, if the City elects to assume
management of the Property as provided in Article 5 hereof, there shall be added to the Base
Rent a Base Rent Override in the amount of two hundred thousand dollars ($200,000.00) per
year, which Base Rent Override shall be paid in equal monthly installments of sixteen thousand
six hundred sixty seven dollars ($16,667.00), commencing on the first day of the first month in
which the City assumes management of the building.
(c) Operating Costs• As Additional Rent, the City shall pay Operating Costs as
defined herein.
As used in this Lease, the term "Operating Costs" shall mean any and all expenses, costs
and disbursements of any kind and nature whatsoever incurred by the County in connection with
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the management, maintenance, operation and repair of the Property, which the County shall pay
or become obligated to pay in respect of a calendaz year regazdless of when such Operating Costs
were incurred. Operating Costs shall include, but not be limited to, the costs of maintenance,
repairs, and repiacements to the Building, including, downspouts, gutters, painting sprinkler
systems, roof and walls; property management fees, salaries, fringe benefits and related costs
payable to employees of the County whose duties aze connected with the Property; insurance
costs to the extent not separately paid for by the City pursuant to Article 10; all heating and air
conditioning costs, electricity, sewer and water and other utility costs not separately metered to
the City; landscape maintenance, trash and snow removal. Operating Costs shall not include the
following: (i) costs of curing construction defects to the Building; (ii) depreciation; (iii) any cost
or expenditure (ar portion thereo� for which the County is reimbursed, whether by insurance
proceeds or otherwise; and (iv) any repairs or replacements to tenant improvements which are
paid for from funds in the Capital Reserve for Replacements Fund established in Article 3(g).
Notwithstanding anything contained herein to the contrary, any structural repairs or replacements
to the Building, ar of any capital improvements made after the Commencement Date which are
intended to reduce Operating Costs or of any capital improvements which are required under any
governmental laws, regulations, or ordinances which were not applicable to the Property at the
time it was constructed, including, without limitation, the Americans With Disabilities Act
(ADA), shall be included in Operating Costs.
Not later than May 31, 2004, and during May of each year ar as soon thereafter as is
practicable, the County shall give the City written notice of its estimates of the amounts payable
under Article 3(c) for the following calendar year. On or before the first day of January of said
following calendar yeaz, and on or before the first day of each month thereafter, the City shall
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pay to the County one twelfth (1/12) of such estimated amounts. If at any time during such
calendar yeaz it appears to the County that the amounts payable under Article 3(c) will vary from
its estimate by more than five percent (5%), the County may, by written notice to the City, revise
its estimate for such year, and subsequent payments by the City for such year shall be based upon
such revised estunate.
Within ninety (90) days after the end of such full calendar year of the term or as soon
thereafter as practicable, the County shall deliver to the City a summary of the total Operating
Costs for the previous calendar yeaz. If such snmmary shows an amount due from the City that
is less than the estimated payments previously paid by the City (the Excess Amount), the County
shall credit the Excess Amount against Operating Costs next foliowing due hereunder until the
Excess Amount is exhausted; provided, however, that if the suminary shows an Excess Amount
for the year in which this Lease expires or is not appropriated or is cancelled pursuant to Article
19, the summary shall be accompanied by a refund of the Excess Amount to the City. If such
summary shows an amount due from the City that is more than the estimated payments
previously paid by the City, the City shall pay the deficiency to the County as Additional Rent
within thirty (30) days after delivery of the summary. If the City non-appropriates or otherwise
cancels this Lease pursuant to Article 20 hereof, the City shall also pay, within thirty (30) days of
after it vacates the premises, any such obligation.
(d) Estimated Onerating Costs. The parties agree that for the period commencing on
the Commencement Date and ending December 31, 2004, Operating Costs are estimated to be
eight hundred ninety thousand dollars ($890,000.00) (Base Year Operating Costs). On or before
January 2, 2004, and on or before the first day of each month thereafter, the City shall pay to the
County one twelfth (1/12) of the Base Year Operating Costs. If at any time during 2004 it
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appeazs to the County that the amounts payable this Article 3(c) will vary from the parties
estimate by more than five percent (5%), the County may, be written notice to the City, revise its
estimate and subsequent payments by the City for 2004 shall be based upon such revised
estimate.
(e) Rip,ht to Audit. The City or its representatives shall have the right to examine the
County's books and records of Operating Costs during normal business hours within twenty (20)
days following the fiunishing of the suminary to the City. Unless the City takes written
exception to any item within thirty (30) days following the fiunishing of the summary to the City
(which item shall be paid in any event), such suminary shall be considered as final and accepted
by the City.
(� Preterm Reimbursement. As additional Rent, the City shall, on or before the date
the first Rent payment is due, pay to the County a11 bond counsel, financial consultant, and
related fees which the County incurs by reason of issuance of the Bonds and which are not
capitalized in the Bonds. The County shail provide the City with a statement of such Preterm
costs it incurred with thirty (30) days of issuance of the Bonds.
In addition, if the County is required by law to maintain a debt service reserve surplus in
order to avoid levying a tax of any kind, the City shall pay a Base Rent Reserve in the amount
required by law each year. The Base Rent Reserve payment shall be due in full on the first day
of January each calendar year during the term. Provided that, if the City pays the County in a
timely manner all of the Rent payments required by this Lease, the County shall give a credit or
return to the City a sum equal to the previous year's Base Rent Reserve on February 1 of each
calendar year.
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(g) Capital Reserve for Replacements. As Additional Rent, the City shall pay the
sum of Four Thousand One Hundred Sixty-seven dollars ($4,167.00) per month for a Capital
Reserve for Replacements (the Replacement Reserve). The County shall establish a separate
account for the Replacement Reserve, which will be used solely for the repair or replacement of
tenant improvements and will not be used for or applied to structural repairs, replacements, or
improvements to the building. So long as the County is managing the property pursuant to
Article 4, the parties shall jointly agree on expenditures from this account; provided that if an
emergency arises which affects the structural integrity of the Building or otherwise requires
immediate expenditure of funds, the County may, in its discretion, make such changes without
consulting with the City.
If the City elects to assume management of the Property as provided in Article 5, on the
date it so assumes management the County will transfer to the City the balance of any funds
remaining in Replacement Reserve Account, after all unpaid obligations haue been paid. During
any period when the City manages the Property its obligation to pay the Capital Reserve for
Replacements, as Additional Rent, shall be suspended.
The County shall not be responsible for or become liable for paying for any portion of
tenant improvement repairs or replacements except as provided in this Article 3(g).
(h) Any interest earned on unexpended Bond proceeds shall be credited to the semi-
annual Base Rent payment. Any unexpended debt service reserve funds shall be credited to Base
Rent payments due in 2023, except as otherwise provided in the Bond or Reissue Bond
documents.
(i) If during any calendar yeaz during the Term any withdrawals are made from a
debt service reserve fund required by the Bond or Reissue Bond documents to be maintained, or
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if such debt service reserve is devalued pursuant to the Bond or Reissue Bond documents, the
City shall, on or before December 31 of such year, replenish such funds.
ARTICLE 4. TAE COUNTY'S RESPONSIBILITIES
(a) Propertv Mana eg ment• The County shall manage and operate the Properiy
(Properry Management) as follows: Except for reasonable weaz and tear and any casualty
against which the City was obligated to insure under this Lease, the County shall maintain all
parts of the Building, making all necessary repairs and replacements, whether ordinary or
extraordinary, structural or non-structural, including, but not limated to windows, glass and plate
glass, doors, eniries, interior walls and finish work, floors and floor coverings, heating and air
conditioning systems, pluxnbing works and fixtures, pest extermination, regular removai of trash
and debris, and provide j anitorial and other maintenance/service program for servicing all hot
water, heating and air conditioning systems and equipment servicing the premises. The County
shall contract for all utilities, including heat, electricity and sewer and water, and excluding
telephone/telecommunications.
(b) Bond Issuance. In the calendar year 2003, the County will issue Revenue bonds
in an amount sufficient to yield $12 million cash for the repair, conshuction and renovation of
the building, and other expenses of the City to furnish and equip the building for its purposes and
move its Public Safety functions into the building.
ARTICLE 5. THE CITY'S RESPONSIBILITIES
On or before March 31, 2003, the City may assume Properiy Management by notification
to the County. After Mazch 31, 2003, the City may, at its option, assume Property Management,
the City must give the County two (2) calendar year's notice of its intent to assume Property
Management responsibility. Upon such assumption, the City's obligation to pay Operating Costs
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as additional rent shall cease, and the City's Rent Obligation shall be Base Rent and Base Rent
Override as defined in Article 3(a) and 3(b) hereof. Upon such assumption, the County's
Responsibilities under Article 4(a) shall cease, and the County shall have no further obligation
with respect to operarion, maintenance or repairs to the Property.
ARTICLE 6. INSPECTION
The County and the County's agents and representatives shall have the right to enter and
inspect the Building at any reasonable time for the purpose of ascertaining the condirion of the
Building or in order to make such repairs and perform such actions as may be required or
permitted to be made by the County under the terms of this Lease.
ARTICLE 7. ASSIGNMENT AND SUBLETTING
The City may not assign, sublet or otherwise permit occupancy of the Building or any
portion thereof by third parties without the County's prior written consent, which may be
withheld in the discretion of the County, and such restriction shall be binding on any assignee or
subtenant to which the County has consented. Notwithstanding any permitted assignment or
subletting, the City shall at all times remain directly, primarily and fully responsible and liable
far the payment of the Rent and for compliance with all of its other obligations under the terms
of this Lease. Upon occurrence of an Event of Default, if the Building or any part thereof aze
then assigned or subiet, the County, in addition to any other remedies herein provided or
provided by law, may, at its option, collect directly from any assignee or sub-tenant all amounts
due and becoming due to the City under such assigunent or lease and apply such amounts
against any sums due to the Cowity from the City hereunder, and no such collection shall be
construed to constitute a novation or release of the City from the further performance of its
obligations hereunder. The County's acceptance of rent following any assignment or other
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transfer prohibited by this Article shall not be deemed a consent by the County to such
assignment or other transfer nor shall the same be deemed a waiver of any right or remedy of the
County for breach of this Article.
If the City assigns this Lease or sublets all or any portion of the Building without first
obtaining the County's consent as required by this Article, said assignment or Lease shali be null
and void and of no force or effect. The County's consent to an assignment, Sublease or other
transfer of any interest of the City in this Lease or the building shall not be deemed to be a
consent to any subsequent assignment, transfer, use or occupation.
The City agrees to any assignment of all or part of this Lease by the County to a bond
trustee as security for the Bonds ar Reissue Bonds. At the request of the County, the City shall
pay Base Rent directly to a trustee for the Bonds or Reissue Bonds.
ARTICLE 8. FIRE AND CASUALTY DAMAGE
(a) Notice of Casualtv. If the Building should be damaged or destroyed by fire,
tornado or other casuaity, the City shall give immediate oral and written notice thereof to the
County.
(b) Continuation of Lease. Notwithstanding the destruction of the Building by fire,
flood, tornado, riot, civil disturbance, act of terrorism, or from any other cause, this Lease shall
remain in fixll force and effect and the City's obligation to pay Base Rent shall continue for any
remaining term of this Lease.
(c) Repair of Property. If the Building should be destroyed or damaged by any cause,
the City, at its option, may rebuild or repair the Building. Upon completion of such rebuilding or
repair and reoccupation of the Building by the City, the County shall resume management of the
Building and the City shall pay Rent, including Base Rent and Operating Costs, as determined on
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the date of re-occupancy. If the City has elected to manage the Building pursuant to Article 5,
the County shall not be required to resume management of the Building.
(d) Removal of Personal Propertv. In the event of any damage to the Building or the
Property by any peril contemplated by this Article, the City shall, prompfly after the occurrence
of such damage and at its sole cost and expense, remove from the Property any personal properiy
on the Property belonging to any of the City, its agents, employees, contractors, licensees ar
invitees. The City hereby indemnifies, holds harmless and agrees to defend the County from any
loss, liability, damage, judgment, cost or expense, including attorneys' fees through all appellate
levels arising out of any claim of damage or injury by any of the City, its agents, employees,
contractors, licensees or invitees as to itself or themselves or their respective properties arising as
a result of the removal or failure to remove such personal property. The County and the City
agree that the County shail have no obligation to secure the Building or the Property in the event
of a casualty and that the risk of loss, by destruction, the8 or otherwise, to the personal property
of the City, its agents, employees, contractors, licensees or invitees shall be borne, as between
the County and the City, entirely by the City.
ARTICLE 9. LIABILITY, WAIVER AND RELEASE
(a) No Liabilitv. The County shall not be liable for and the City will indemnify and
hold the County hannless from any loss, liability, claims, suits, costs and expenses, including
attorneys' fees, arising out of any claim of injury ar damage on or about the Property arising
from any cause whatsoever other than the County's gross negligence or willful misconduct. The
County shall not be liable to the City ar the City's agents, employees, contractors, licensees or
invitees for any damage to persons or property arising from any cause whatsoever except the
County's gross negligence or willfixl misconduct and the City assumes all risks of damage to
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such persons or property. The County shall not be liable or responsible for any loss or damage to
any property or person occasioned by theft, fire, force majeure, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition or order of govemmental body or authority, or
other matter beyond control of the County, or for any injury or damage or inconvenience which
may arise through repair or alteration of any part of the Building, or failure to make repairs, or
from any cause whatsoever except the County's willful acts or gross negligence. Nothing in the
foregoing provisions shall be construed as a waiver of the tort liability limits and defenses as set
forth in Minn. Stat. Secrion 466.01 et. seq. The indemnification language in Article 9 shall apply
if and when the City exercises its rights to assume management of the property pursuant to
Article 5.
(b) Waiver and Release. Except as provided below, each of the County and the City
agrees to rely entirely upon its own property insurance with respect to any damage, loss or injury
to its property.
Each of the County and the City hereby releases the other and the other party's directors,
officers, employees, agents and others acting on the other party's behalf (collectively, the
`Yeleased parties") from all claims and all liability or responsibility to the releasing party and to
any person claiming through or under the releasing party, by way of subrogation or otherwise,
for any loss or damage to the releasing party's business or property caused by fire or other peril,
even if such fire or other peril was caused in whole or in part by the negligence or other act or
omission of one or more of the released parties. Notwithstanding the foregoing, the release from
liability and waiver or subrogation provided for shall (i) only be effective to the extent that the
loss or damage to the releasing party's business or property is actually covered by insurance; and
(ii) not apply to the extent of any deductible (or deductibles) applying under such insurance.
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ARTICLE 10. INSURANCE
T'he City, at its sole cost and expense, shall obtain and maintain in effect at all times a
policy or policies of insurance as follows:
(a) Insurance insuring the Building against loss or damage by fire, explosion, and
other insurable hazards and contingencies for the full replacement value of the
Building (the Property Policy). The Property Policy shall name the County as an
insured and loss payee as its interests may appear.
(b) The City shall be responsible for the payment of any deductibles and co-insurance
penalties under the Property Policy or policies.
(c) Insurance policies required by this Paragraph shall be in a form reasonably
acceptable to the County, with an insurer or insurers having a Best rating of A-,
X, or better and qualified to do business in Minnesota, and shall require at least
thirty (30) days prior written notice to the County of termination, cancellation,
non-renewal or material alteration. The liability insurance under Article 10(a)
shall be primary with respect to the County and its agents and not participating
with any other available insurance.
(d) Prior to the Commencement Date, and on the anniversary of the Commencement
Date and at such other time as the County may request, the City shall deliver to
the County a Certificate evidencing such policies, or other evidence reasonably
satisfactory to Landlord, confirming: (A) the terms of the Insurance; (B) that the
premiums have been paid at least one (1) year in advance; and (C) that the
policies are in full force and effect. If the City has a blanket insurance policy
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providing coverage for several properties of the City, including the Property, the
County will accept Certificates of such insurance, provided.
(1) The certificate states the amounts of insurance and types of coverage;
(2) The amounts and types of coverage are at least equal to the amounts and
types that would be required by this Lease; and
(3) The policies comply with the other requirements of this Lease.
ARTICLE 11. CONDENINATION
(a) Total Taking. If the whole or any substantial part of the Building is taken for any
public or quasi-public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof and the taking would prevent or
materially interfere with the use of the Property or the Building for the purpose for which they
are being used, this Lease shall terxninate and the Base Rent and Operating Costs shall be abated
during the unexpired portion of this Lease effecrive when the physical taking of the Property
shall occur.
(b) Partial Taking. If part of the Property shali be taken for any public or quasi-
public use under any governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, and this Lease is not terminated as provided in the
subparagraph above, this Lease shall not terminate but the Operating Costs payable hereunder
during the unexpired portion of this Lease shall be reduced to such extent as may be fair and
reasonabie under all of the circumstances.
(c) Awards. In the event of any such tal�ng or private purchase in lieu thereof, the
County and City shall each be entitled to receive and retain such separate awards and/or portion
of lump sum awards as may be allocated to their respective interest in any condemnation
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proceedings, provided that the City shall not be entitled to receive any award for its loss of its
leasehold interest, or other property which would have become the property of the County upon
ternunation of this Lease; the right to such awazd being hereby assigned to the County. The City
shall be entitled to any award it receives for relocation pursuant to Minnesota Statutes Section
ll 7.50 and zelated Federal Statutes and Regulations.
ARTICLE 12. QiJIET ENJOYMENT
The County represents and warrants that it has or will acquire fuil right and authority to
enter into this Lease and that the City, upon paying the Rent and performing its other covenants
and agreements under this Lease, shall peaceably and quietly have, hold, and enjoy the Property,
subject to the terms and provisions of this Lease.
ARTICLE 13. EVENTS OF DEFAULT
Each of the following events shall be deemed to be an Event of Default by the City under
this Lease:
(a) The City shall fail to pay any installment or other payment of Rent herein when
due, and such failure shall continue for a period of five (5) days from the date
such payment was due;
(b) The City shall vacate or abandon all or a substantial portion of the Property;
provided however, that such vacation or abandonment shall not constitute a
default hereunder unless, in the County's reasonable estimation, the City has
failed to comply with its obligation to maintain the Property as required under this
Lease;
(c) The City shall fail to insure and provide evidence of such insurance in accordance
with Article 10;
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(d) The City shall fail to comply with any term, provision or covenant of this Lease
(other than the foregoing in this Article 13), and shall not cure such failure within
twenty (20) days after written notice thereof from the County to the City.
ARTICLE 14.
Upon the occurrence of any such Events of Default as described in Article 13 hereof, the
County shall, in addition to any and all remedies it may have at law or in equity, have the option
to pursue any one or more of the following remedies without further notice or demand:
(a) The County may, at its election, terminate this Lease ar terminate the City's right
of possession only, without terminating the Lease;
(b) Upon any terminarion of this Lease, whether by lapse of rime or otherwise, or
upon any termination of the City's right to possession without terminarion of this
Lease, the City shall surrender possession and vacate the Property immediately
and deliver possession thereof to the County, and the City hereby grants to the
County full and free license to enter into and upon the Property in such event with
or without process of law and to repossess the County of the Property as of the
County's former estate and to expel ar remove the City and any others who may
be occupying or within the Froperty and to alter all locks and other security
devices at the Property and to remove any and all property therefrom, without
being deemed in any manner guilty of trespass, eviction or forcible enhy or
detainer, and without incurring any liability for any damage resulting therefrom.
The City hereby waives any right to claim damage far such re-entry and
expulsion, and such entry and possession shall not terxninate this Lease or release
the City, in whole or in part, from any obligation, including the City's obligation
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to pay all Rent payable by the City hereunder, for the Term or any other right
given to the County hereunder or by operation of law;
(c) The County may, but need not, relet the Properry or any part thereof for such Rent
and upon such terms as the County, in it sole discrerion, shall determine
(including the right to relet the Property as part of the larger area and the right to
change the character or the use made of the Property), and the County shall not be
required to accept any tenant offered by the City or to observe any inshuctions
given by the City about such reletting. In any such case, the County may make
repairs, alterations and additions in ar to the Property, and redecorate the same to
the extent the County deems necessary ar desirable, in it sole discretion. All Rent
and other sums received by the County from any such reletting shall be applied as
follows: first, to the payment of any indebtness other than Rent due hereunder
from the City to the County; second, to the payment of any costs and expenses of
such alterations and repairs; third, to the payment of the County's expenses of
relet6ng, including, without limitation, broker's commissions, reasonable attorney
fees and lease inducements, such as moving or leasehold improvement
allowances; fourth, to the payment of Rent due and unpaid hereunder; and the
residue, if any, shall be held by the County and applied in payment of future Rent
as the same may be come due and payable hereunder. If such Rent and other
sums received from such reletting during any month be less than the Rent to be
paid during said month by the City hereunder, the City shall pay such deficiency
to the County. Such deficieacy shall be calculated and paid monthly.
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Notwithstanding any such re-entry by the County, the County may at any time
hereafter elect to terminate this Lease for such previous breach.
(d) The City acknowledges that the damages the County would incur in terminating
this Lease following a default by the City would be difficult to estimate or
ascertain.
Therefore, the City agrees that in the event the County elects to terniinate this
Lease, the County may, in addition to other remedies available at law or in equity,
declare all unpaid Rent payable under this Lease immediately due and payable, as
liquidated damages, and not a penalty, and in addirion, recover from the City
further liquidated damages, and not as a penalty, an amount equal to the sum of
the following: (i) all unpaid Rent that is payable by the City hereunder and that
accrues through the effective date of termination; (ii) all Base Rent for the term of
the Lease accruing from the date of termination to expiration of the term of this
Lease and which is necessary for the County to defease the Bonds, which the
County will do at the earliest date possible under the terms of any Bond indenture.
(e) Any and all property which may be removed from the Property by the County
pursuant to the authority of the Lease or of law, to which the City is or may be
entitied, may be handled, removed and stored, as the case may be, by ar at the
direction of the County at the risk, cost and e7cpense of the City, and the County
shall in no event be responsible for the value, preservation or safekeeping thereof.
The City shall pay to the County, upon demand, any and all expenses incurred in
such removal and all storage charges against such property so long as the same
shall be in the County's possession or under the County's control. Any such
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property of the City not retaken by the City from storage within thirry (30) days
after removal from the Property shall, at the County's option, be deemed
conveyed by the City to the County under this Lease as by a bill of sale without
further payment or credit by the County to the City.
(� Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law, nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of any
Rent due to the County hereunder or of any damages accruing to the County by
reason of the violation of any of the terms, provisions and covenants herein
contained. No act or thing done by the County or its agents during the Term shall
be deemed a terminarion of this Lease or an acceptance of the surrender of the
Property, and no agreement to terminate this Lease or accept a surrender of said
Property shall be valid unless in writing signed by the County. No waiver by the
County of any violation or breach of any of the terms, provisions and covenants
herein contained shall be deemed or construed to cons6tute a waiver of any other
violation or breach of any of the terms, provisions and covenants herein
contained. The County's acceptance of the payment of Rent or other payments
hereunder after the occurrence of an Event of Default shall not be conshued as a
waiver of such default, unless the County so notifies the City in writing.
Forbearance by the County to enforce one or more of the remedies herein
provided upon an Event of Default shall not be deemed or construed to constitute
a waiver of such default ar of the County's right to enforce such remedies with
respect to such default or any subsequent default.
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ARTICLE 15. PROPERTY TAX DIS'IRIBUTION OFFSET
The County may, in its discretion, recover any sums due to it under the provisions of
Article 14 hereof by withholding from any property taac distribution due from the County to the
City under the provisions of Minnesota Statutes Chapter 276.
ARTICLE 16. NOTICES
Any notices or communications required or desired to be given hereunder shall be in
writing and shall be deemed effective and received upon personal delivery or five (5) days after
the deposit in the United States mail, certified, postage prepaid, return receipt required, to the
County or the City at the following addresses:
THE COUNTY
Paul Kirkwold
Ramsey County Manager
250 Courthouse
St. Paul, MN 55102
THE CTI'Y
Peter White
Real Estate Division
140 City Hall
St. Paul, MN 55102
ARTICLE 17. HAZARDOUS SUBSTANCES
The City shall at all times comply with all applicable local, state and federal laws,
ordinances and regulations relating to Hazardous Substances. "Hazardous Substances" means
(1) any oil, petroleum product, flammable substances, explosives, radioactive materials,
hazardous wastes or substances, toxic wastes or substances, infectious wastes or substances or
any other wastes, materials or pollutants that (A) pose a hazazd to the Property or Building or to
persons on or about the Property or Building or (B) cause the Property or Building to be in
violation of any hazardous materials laws; (2) asbestos in any form, urea-formaldehyde foam
insulation, transformers or other equipment that contains dielectric fluid containing
polychlorinated biphenyl, or radon gas; (3) any chemical, materiais or substance defined as or
included in the defuution of "hazazdous sabstances," "hazazdous wastes," "hazardous materials,"
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"extremely hazazdous waste," "restricted hazardous waste," "infecfious waste," or "toxic
substances," or words of similar import under any applicable local, state or federal law or under
the regulations adopted or gublications promulgated pursuant thereto, including, but not limited
to, the Comprehensive Environmentai Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. §§9601, et seq.; the Hazardous Materials Transportation Act, as amended,
42 U.S.C. §§6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
§§1251, et seq.; (4) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority or may or could pose a hazard to the health
and safety of the occupants of the Building or Property or the owners and/or occupants of
property adjacent to or surrounding the Property, or any other person or entity coming upon the
Property or adjacent property; and (5) any other chemical, material or substance that may or
could pose a hazard to the environment. The City shall not: (i) use the Building or Property for
the storage of Hazardous Substances except for such acrivities that are part of the course of the
City's ordinary business (the "Permitted Activities"); provided, such Permitted Acrivities are
conducted in accordance with all applicable laws, orders, regularions and ordinances; (ii) use the
Building ar Property as a landfill or dump; or (iii) install any underground tanks of any type at
the Property. The City shall at its own expense maintain in effect any and all pernuts, licenses ar
other governmental approvals, if any, required for the City's use of the Property and require the
same of any subtenants. The City shall make and cause any subtenant to make all disclosures
required of the City by any laws, and shall comply and cause any subtenant to comply with all
orders concerning the City's use of the Property issued by any gove�ental authority hauing
jurisdiction over the Property and take all action required by such governmental authoriries to
bring the City's activities on the Property into compliance with all environmental and other laws,
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rules, regulations and ordinances affecting the Property. If at any time the City shali become
awaze, or have reasonable cause to believe, that any Hazardous Substance has been released or
has otherwise come to be located on or beneath the property, the City shall gve written notice of
that condition to the Counry immediately after the City becomes so aware. The City shall be
responsible for, and shall indemnify, defend and hold the County harmless from and against, all
environmental claims, demands, damages and liabiliries, including, without limitation, court
costs and reasonable attorney fees, if any, arising out of, or in connecrion with, the generation,
storage, disposal or other presence of any Hazazdous Substance in, on or about the Building or
Property during the Terxn or that the City caused or pernutted. The indexnnification provided by
this Articlel7 shall survive the termination of this Lease.
ARTICLE 18. OPTION TO PURCHASE AT END OF TERM
Provided that the City is not in default of any material terms, conditions, or covenants
contained in this Lease at the time of the exercise of this option to purchase, at the end of the
term hereof the City shall have the option to purchase the Property for the sum of one million
five hundred thousand dollars ($1,500,000.00)(the Option Purchase Price).
On or before September 30, 2002, the City shall pay to the County the sum of one miilion
five hundred thousand dollars ($1,500,000.00) as Option Earnest Money. The Option Earnest
Money shall be held by the County, without interest, as earnest money in connection with the
City's option to purchase the Premises contemplated in this Article 18 or in Article 19, (and not
as any payment of Rent or additional rent under the Lease), and the principal amount thereof
shall be credited against the Option Purchase Price payable by the City on the Option Closing
Date.
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The City shall exercise the option to purchase that is contemplated in this Article 18 or in
Article 19 by delivering written notice to that effect to the County (the Exercise Norice). The
Exercise Notice shall designate the date the City desires to close upon the purchase contemplated
thereby (the Option Closing Date). The Opfion Closing Date shall not occur earlier than: (1) for
the oprion provided by Article 18, the last day of the Term, or (2) for the opfion provided by
Article 19, the last day of the third calendaz month after the date of the exercise notice, unless
otherwise agreed by the parties.
In the event of the timely delivery of the Exercise Notice by the City the parties shall
proceed to a closing on the purchase and sale of the PROPERTY in accordance with the
following terms:
(a) The closing date (the "Date of Closing") shall be the Option Closing Date, or the
succeeding business day if such day is not a business day;
(b) The balance of the purchase price less the Option Earnest Money shall be payable
in immediately available funds at closing;
(c) The County shall convey title to the Subject Property by Quit Claim deed, subject
to reservations, covenants, easements and restrictions of record without effective
forfeiture provisions, Permitted Encuxnbrances, this Lease, the right of ail who
claim through the City, alllevied and pend'mg special assessments, the right of
any occupants, and building and zoning laws and other ordinances, but for the
option provided by Article 19, the ritle transferred shall be in fee simple
determinable, ritle to terminate and revert to the County if the Property ceases to
be used by the City for public safety purposes prior to the end of the original
Term of this Lease.
(d) Except for any filing fees associated with the satisfaction of any mortgages or
other liens created by the County, which shall be paid by the County, the City
shall pay all fees and tases due in connection with the reco"rding of the deed and
other conveyance doctunents;
(e) The City shall be solely responsible for the payment of all costs incurred in
providing a title insurance coxnxnihnent or other evidence of title for the Subject
Property that the City desires to obtain, and the City shall be solely responsible
for any closer's fee, title insurance premiums, survey, engineering, environmental
and other due diligence costs;
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( fl The City shall have paid to the County all amounts due under the Lease through
the Date of Closing;
(g) Upon the occurrence of the Date of Closing, this Lease shall be ternunated and of
no fm�ther force and effect.
If the City elects to terminate this Lease by non-appropriation, pursuant to Article 20
hereof, or if the property is acquired by eminent domain pursuant to Article 11, this oprion and
the option contemplated by Article 19 shall expire, lapse, and be of no further force. Upon such
ternrination by non-appropriation, or acquisition under eminent domain, the County shall, within
six months of the date this Lease terminates, refund to the City the Option Eamest Money,
without interest.
ARTICLE 19. OPTION TO PURCHASE DURING TERM
During the term hereof, the City shall have the option to purchase the Property, and as an
aspect thereof to prepay and terminate this Lease, for the sum of the following:
(1) One million five hundred thousand dollars ($1,500,000) (which shall be satisfied
by the County's retention of the Option Earnest Money described in Article 18);
plus
(2) The present value on the Date of Closing of the Base Rent Override due for the
remainder of the original term of this Lease, using the yield on the Bonds (being
the County's bonds for the Property issued in 2003, or any refunding issue
thereo fl as the discount factor; plus
(3) A sum sufficient, with investment earnings thereon, to redeem and prepay the
principal of and interest on all the Bonds on a date certain for which notice of call
can be given. In the event that the Bonds are not at the time prepayable, the
amount paid pursuant to this clause sha11 be the amount which, invested so as not
to cause the Bonds to be arbitrage bonds, is necessary to fund an escrow account
in full that constitutes a defeasance of the Bonds. The County must have received
the purchase price before giving notice of redemption of the Bonds.
Additional provisions relating to the exercise of this option are set forth in Article 18.
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ARTICLE 20. ANNUAL APPROPRIATION LEASE
The City's obligafions under this Lease are subject to an annual appropriafion by the
City, and the City has the right to terminate this Lease by declining to appropriate funds for the
Base Rent and any Addirional Rent, including operating costs. The City must notify the County
not later than September 1 of its decision not to appropriate funds for its obligations under this
agreement for the following yeaz.
Such notification and non appropriation of funds by the City shall not be an event of
default, as defined in Article 13, and this Lease shall terminate and be ofno further force and
effect on December 31 of the year in which such notification and non appropriation is made, and
the parties obligations hereunder shall terminate without penalty at 12:00 pm. on December 31
(The Termination Date).
Prior to 12:00 pm. on the Ternunation Date, the City shall peaceably and quiefly leave,
yield up and surrender the Property to the County in good repair and serviceable condition. For
purposes hereof, and without limiting the generality of the foregoing, the Property shall be
surrendered on such date in at least the following condition:
(a) free from all liens and encumbrances;
(b) in material compliance with all state and local building and fire codes applicable
hereto; and
(c) all licenses and permits of any governmental authority applicable to operation and
use of the Property shall be transferred to the County to the extent transferable.
The City shall leave the Property broom clean and free of occupants. The City shall
remove from the Property on or before the Termination Date all personal property situated
thereon which was not purchased with proceeds of the Bonds, pursuant to Article 4(b), and
which is not otherwise owned by the County, or subject to the lien of any mortgage, and at its
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sole cost and expense shall, on or prior to such Termination Date, repair any damage caused by
such removal. Property not so removed shall become the properiy of the County, which may
thereafter cause such property to be removed from the Properiy and disposed of, but the cost of
such removal and disposal as well as the cost of repairiug any damage caused by such removal
sha11 be borne by the City.
The provisions of this Article 20 are intended to and shall be interpreted to comply with
the provisions of Minnesota Statutes Section 465.71 (2002).
ARTICLE 21. ALTERATIONS; CONDITION OF PREMISES UPON EXPIRATION
The City shall not make any alterations, additions or improvements to the Property
(including but not limited to roof and wall penetrations) without the prior written consent of the
County. The City may, without consent of the County, but at its own cost and expense and in a
good worlrnianlike manner erect such shelves, bins, machinery and trade fixtures as it may deem
advisable, without altering the basic character of the Building and without overloading or
damaging such Building, and in each case complying with all applicable governmentallaws,
ordinances, regulations and other requirements. Prior to commencing any such alterations,
additions or improvements City shall provide such assurances to County, including, without
limitation, waivers of lien, surety company performance and payment bonds and(or personal
guaranties of persons of substances, as the County shall require to assure payment of the costs
thereof and to protect the County against any loss from mechanics', laborers', materialmen's or
other liens. All alterations, additions, installations, improvements and partitions erected by the
City, including, without limitation, all telephone and data communications cabling ("Cabling"),
shall be and remain the property of the County during the Term and the City shall, unless the
County otherwise elects as provided below, remove all alterations, additions, installations,
54696 2 �
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improvements and partirions, including, without limitation, the Cabling, erected or installed by
the City and restore the Property to its original condition by the earliest of (a) the Expiration
Date, (b) the date of tennivation of this Lease prior to the Expiration Date or (c) the vacating of
the Property without termination of this Lease (said eazliest date may be referred to as the
"Restoration Date"); provided, however, that if the County so elects, in writing, prior to the
Restoration Date, such alterations, additions, installations, unprovements, partitions and Cabling
(other than trade fixtures and personal property of the City) shall become the property of the
County as of the Restoration Date and shall be delivered to the County with the Property. All
shelves, bins, machinery and trade fixtures installed by the City shall be removed by the City by
the Restoration Date if required by the County, and upon any such removal the City shall restore
the Property to its original condition. All such removals and restoration shall be accomplished in
a good and workmanlike manner and shall not damage the primary shuctural qualities of the
Building.
ARTICLE 22. MISCELLANEOUS
(a) Gender: etc. Words of any gender used in this Lease shall be held and construed
to include any other gender, and word in the singular number shall be held to
include the plural, unless the context otherwise required.
(b) Binding Effect. The terms, provisions and covenants and conditions contained in
this L,ease shall appiy to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective legal representatives, successors and permitted
assigns, except as otherwise herein expressly provided. The City agrees to funiish
promptly upon demand, a corporate resolution, or other appropriate
documentation evidencing the due authorization of the City to enter into this
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Lease. Nothing herein contained shall give any other tenant in the Building any
enforceable rights either against the County or the City as a result of the
covenants and obligations of either party stated herein.
(d) Cantions. The captions inserted in this Lease are for convenience only and in no way
define, limit or otherwise describe the scope or intent of this Lease, or any
provision hereof, or in any way affect the interpretation of this Lease.
(e) Amendment. This Lease may not be altered, changed or amended except by an
instrument in wriring signed by both parties hereto.
( fl Survival of Oblieations. All obligations of the City hereunder not' fully performed as
of the expiration or earlier termination of the Term shall survive the expiration or
earlier termination of the Term, including without limitation, all payment
obiigations with respect to Operating Costs and all obligations concerning the
condition of the Property. Upon the expirarion or earlier termination of the Term,
the City shali pay to the County the amount as esrimated by the County, necessary
(i) to repair and restore the Property as provided herein; and (ii) to dischazge the
City's obligation for Operating Costs or other amounts due the County. All such
amounts shall be used and held by the County for payment of such obligations of
the City, with the City being liable for any additional costs upon demand by the
County, or with any excess to be returned to the City after all such obligations
have been determined and satisfied.
(g) Severabilitv. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the Term, then and in
that event, it is the intention of the parties hereto that the remainder of this Lease
54696 2C�
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shall not be affected thereby, and it is aiso the intention of the parties to this Lease
that in lieu of such clause or provision of this Lease that is illegal, invalid or
unenforceable, there be added as a part of this Lease a clause or provision as
similar in terms to such illegal, invalid or unenforceable clause or provision as
may be possible and be legal, valid and enforceable.
(h) Waiver of Jury Trial; Jurisdiction. Each of the County and the City hereby waives
any right to a trial by jury in any action relating to this L,ease. This Lease shall be
enforced in the District Court, Second Judicial District, State of Minnesota.
(i) Complete Agreement. This Lease contains all of the agreements and understandings
relating to the leasing of the Property and the obligations of the County and the
City in connection with such leasing. The County has not made, and the City is
not relying upon, any warranUes ar representations, promises or statements made
by the County or any agent of the County, except as expressiy stated herein. This
Lease supersedes any and all prior agreements and understandings between the
County and the City and alone expresses the agreement of the parties.
(j) Governine Law. This Lease, the rights of the parties hereunder and the interpretation
hereof shall be governed by, and construed in accordance with, the internal laws
of the State of Minnesota, without giving effect to conflict of laws principles
thereof.
(k) Construction. The parties agree that counsel for both parties have reviewed this
Agreement. Accordingly, neither pariy shall deemed to have drafted this
Agreement and it shall not be conshued against either party by virhxe of the
drafting thereof in the event of a dispute.
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ARTICLE 23. EXHIBITS
E�chibits A, B, and C attached hereto aze hereby incorporated by reference.
ARTICLE 24. TAX EXEMPTION
To this effect the City shall (1) file a form 8038-G with respect to this L,ease; (2) maintain
a register of ownership of this Lease so that it is in registered form; (3) not use any porkion of the
proceeds of this Lease directly or indirectly to acquire higher yielding investments or to replace
funds which were used directly or indirectly to acquire higher yielding investments, except (a)
for a reasonable temporary period until such proceeds aze needed for the purpose for which this
Lease is issued and (b) in addition to the above in an amount not greater then $100,000; (4) not
invest any proceeds of this Lease or any sums from time to time held in any City account which
will be used to pay principal or interest to become due on this Lease at a yield in excess of the
applicable yield restrictions imposed under then-applicable federal azbitrage regulations on such
investments after taking into account any applicable "temporary periods" or "minor portion"
made auailable; (5) not invest any proceeds of this Lease or other relevant moneys in obligations
or deposits issued by, guaranteed by or insured by the United States or any agency or
instrumentality thereof if and to the extent that such inveshnent would cause this Lease to be
"federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue
Code of 1986, as amended (the "Code"); (6) not use the proceeds of this Lease or the facility, or
cause or permit them to be used, or enter into any deferred payment arrangements for the cost of
the facility, in such a manner as to cause this Lease to be a"private activity bond" within the
meaning of Section 103 and 141 through 150 of the Code (for this purpose, the City reasonably
expects that no action will be taken over the term of this Lease that would cause this Lease to be
a private activity bond, and the auerage term of this Lease is not longer than reasonably
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necessary for the govemmental purposes of the issue); (7) not use the proceeds of this Lease in
such a manner as to cause this Lease to be a"hedge bond" within the meaning of Section 149(g)
of the Code; (8) comply with requirements necessary under the Code to establish and maintain
the exclusion from gross income under Section 103 of the Code of interest on this I,ease,
including without lunitarion requirements relating to temporary periods for inveshnent,
limitations on amounts invested at a yield greater than the yield on this Lease, and the rebate of
excess inveshnents earnings to the United States (for this purpose, if any elections are available
now or hereafter with respect to azbitrage or rebate matters relating to this Lease, the Mayor,
Clerk, Treasurer and_Director, Office of Financial Services, or any of them , aze hereby
authorized and directed to make such elections as they deem necessary, appropriate or desirable
in connecrion with this Lease, and all such elections shall be, and shall be deemed and treated as,
elections of the City). The City shall also be responsible for calculating and paying any azbitrage
rebate with respect to the Bonds or any Reissue Bonds. The County will cooperate with the City
in executing and submitting the Internal Revenue Service (1RS) form 8038-T (or other applicable
forms) in connection therewith.
The City does not reasonably expect to terminate this Lease pursuant to its right of non-
appropriarion, but this representation shall in no way limit the City or estop it from exercising its
right of non-appropriation.
The interest the City pays on this Lease shall be specifically identified on a schedule to be
attached hereto upon the County's issuance of its Bonds.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement.
APPROVED AS TO FORM:
Assistant County Attorney
APPROVED AS TO FORM:
Assistant City Attomey
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RAMSEY COUNTY
�
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Jim McDonough, Chair
Board of Commissioners
Bonnie Jackelen, Chief Clerk
Board of Commissioners
CTTY OF SAINT PAUL, MINNESOTA
:
Its Mayor
and by:
Its Director, Office of Financial Services
and by:
/
Its City Clerk
�