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HomeMy WebLinkAboutResolution - 2022-R0531 - New Joyland Amusement Park Lease Agreement - Mackenzie ParkResolution No. 2022-R0531 Item No. 5.31 December 13, 2022 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, the Joyland Amusement Park Lease Agreement by and between the City of Lubbock and Joyland Amusement Park, Inc. regarding the lease of certain real property located at Mackenzie Park in Lubbock, Texas, and related documents. Said Lease is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council on ATTEST: Rebe a Garza, City Secre APPROVED AS TO CONTENT: December 13, 2022 t�g TRAY Ef YOR -'02&� WLA>t+-- ---- Brooke Witcher, Assistant City Manager APPROVED AS TO FORM: R Bro e, Assistant City Attorney RES.Lease-Joyland Amusement Park Lease Agreement 12.8.22 Resolution No. 2022-R0531 Joyland Amusement Park Lease Agreement The following Lease Agreement ("Agreement" herein) is made and entered into by and between the City of Lubbock, Texas, ("City" herein), Joyland Amusement Park, Inc. ("Joyland" herein) of Lubbock County, Texas. For and in consideration of the rental terms set forth herein, City hereby agrees to lease to Joyland all of the that certain area in Mackenzie Park known as Joyland Amusement Park ("Leased Premises" herein) located within Mackenzie Park in Lubbock, Texas ("Park" herein) and further described in the attached Exhibit "A" which is incorporated by reference as if set out verbatim. Section 1 DEFINITIONS As used herein, the following terms shall have the following meanings: A) "Permanent Improvements" shall mean any building that is fixed in place and unable to be moved about the Leased Premises, including but not limited to existing fixed to a foundation metal buildings. B) "Temporary Improvements" shall mean all improvements to the Leased Premises that are not Permanent Improvements, including, without limitation, any ride or portable building. Section 2 GENERAL TERMS A) Use of the Leased Premises: The purpose of this Agreement is for Joyland to maintain and operate an amusement park ("Facility" herein) for the entertainment and recreation of the Citizens of Lubbock, Texas and the surrounding South Plains. All equipment used in the construction, operation, and maintenance of the Facility shall meet commercial industry standards for safety and recreation purposes. The Joyland shall first secure the written consent of the City Manager of the City of Lubbock or his/her designee before Joyland engages in any activity or use of the Leased Premises not specifically authorized under this Agreement. B) Term and Automatic Renewal: The term of this Agreement shall be for five (5) years from date hereof, and shall be automatically extended for successive five (5) year terms not to exceed forty (40) years in any event unless either party shall give written notice of termination to the other party one hundred and eighty (180) days prior to the expiration of the then current five (5) year term, as the case may be. C) Commencement Date: January 1, 2023. D) Termination Date: December 31, 2062, subject to the automatic renewal and notice of termination. E) Assignment: Joyland shall not assign, transfer, and sell any of its interest in this Agreement for any reason, without obtaining the approval of the City Council of the City of Lubbock prior to the assignment, transfer, or sale. F) Annual rental rate and payment schedule: 1) Joyland agrees to make an annual payment of $36,000.00 per year to City beginning in 2023 as set forth below. This amount shall be adjusted annually based upon the immediately preceding year's All Items Consumer Price Index for All Urban Consumers (CPI-U) indicator as determined by the United States Bureau of Labor Statistics regarding the Dallas -Fort Worth - Arlington region at the beginning of each calendar year provided however the annual CPI-U increase shall not exceed: a) 4.00% annually for the period of January 1, 2024 through December 31, 2027; b) 3.50% annually for the period January 1, 2028 through December 31, 2032; c) 3.00% annually for the period January 1, 2033 through December 31, 2037; d) 2.50% annually for the period January 1, 2037 through December 31, 2042; or e) 2.00% annually for the period January 1, 2043 through December 31, 2047, provided however the annual rent for this period may not exceed $65,000 annually. 2) Subject to the adjustment for CPI as described herein, see above Section 2, F) 1), the annual payment is to be paid in four (4) equal payments of $9,000.00 on or before the following days of each year as set forth below, unless such day falls on a weekend or holiday, then payment will be due on the following business day: a) June 1 S`, b) July 1 S`, c) August I", and K d) September V. 3) The City shall notify Joyland in writing, on or before March ls` of each year, of any increase in the annual rental rate for the lease year then in effect. G) Rent Abatement I) Notwithstanding anything to the contrary contained herein and provided that no default by Joyland and'or termination occurs hereunder beyond any applicable notice and cure period, the City hereby agrees that Joyland shall not be required to pay annual rent for the following years ("Abatement Period" herein) for and in consideration of the following capital improvements to the Leased Premises: a) 2023 Abatement — Install 1,000 linear feet of six-foot (6'), minimum height, chain link fence with security wiring on top, such as barbwire or razor wire, and curbing where possible; Update the main restroom facility inside the Leased Premises, with such updates including updates to fixtures, stalls, and new paint. b) 2024 Abatement — Install 1,000 linear feet of six-foot (6'), minimum height, chain link fence with security wiring on top, such as barbwire or razor wire, and curbing where possible; Update the two (2) remaining restroom facilities inside the Leased Premises with such updates including updates to fixtures, stalls, and new paint. c) 2025 Abatement — Install or replace 12,000 sq. ft. of pedestrian walkway with the Leased Premises. 2) All capital improvements must be complete, accepted and approved by the City Manager of the City of Lubbock, or his/her designee, on or prior to December 31 of the applicable Abatement Period. Failure to complete the required capital improvements and receive the approval of the City as required herein shall result in a default by Joyland and the full rental payment shall be due on December 31 of the applicable Abatement Period. The City shall not unreasonably withhold acceptance and approval of any capital improvements contemplated herein. Joyland shall still be entitled to abatement in the event Joyland completes necessary capital improvements prior to the applicable abatement period. H) Termination 1) If Joyland does not timely pay all sums due to the City when such sums become due and payable according to provisions of this Agreement, or if Joyland shall abandon, or cease operation of the of Joyland at the Leased Premises for a period of thirty (30) days or more during any period that Joyland is traditionally operated, or if Joyland is not performing any terms, provisions, covenants, or conditions of this Agreement, then Joyland shall be in default. In said event of default, if default continues for more than twenty (20) days after written notice is provided to Joyland describing, in detail, the nature of the default and the requirements to cure the default, the City shall have the right to cancel this Agreement. If, however, Joyland's default reasonably requires more than twenty (20) days to cure, Joyland will not be in default if the cure is commenced within the 20-day period and is diligently pursued. Diligent pursuit shall mean acting to cure the default without any unreasonable delay or unreasonable cessation, and unreasonable delay and unreasonable cessation shall mean and include, without limitation, any delays or cessations not the fault of Joyland or within the reasonable control of Joyland. Provided, however, that as to those actions or circumstances which Joyland should do, discontinue doing, or correct which create a danger to the planned activities for the Facility, the dangerous actions or circumstances shall be cured by Joyland immediately upon written notice by the City, or Joyland shall cease operations until such conditions or circumstances are cured. The planned activities for the Facility are the maintenance and operation of an amusement park for the entertainment and recreation of the Citizens of Lubbock. 2) In case of any default which continues for more than twenty (20) days after notice is given as herein required, the City may, at its option, instead of canceling this Agreement, take possession of the Leased Premises and relet the same for the account of Joyland, and Joyland shall be liable to the City for the amount of fee payable hereunder for the remainder of the Agreement five year term then in effect, less the net amount received by the City on account of such reletting, such net amount to be the total amount received by such reletting, less necessary costs and expenses, including without limitation, the expense of renovating, repairing, and advertising incurred in connection with the reletting of the Leased Premises. Joyland hereby grants, and at all times the City shall have, a contractual lien on Joyland's property in the Leased Premises to secure the performance of all of Joyland's obligations hereunder which contractual lien shall be in addition to all liens provided as a matter of law. Joyland may remove its personal property, including Temporary Improvements thereon, within one hundred and twenty (120) days of the 4 notice by the City of default and the City's request to remove same. After such time, the City, in addition to the other rights or remedies it may have, shall have the right to remove all persons and property from the Leased Premises at the sole cost of Joyland. Such property shall become the property of the City. The City shall agree to subordinate its security interest on Temporary Improvements and other property of Joyland (except for any Permanent Improvements, which become the property of the City upon termination of the Lease) to Joyland's lenders for the purpose of Joyland securing financing for its business operations, including without limitation financing for the acquisition or repair of any Temporary Improvement. 3) JOYLAND HEREBY WAIVES ALL CLAIMS FOR DAMAGES WHICH MAY BE CAUSED BY THE RE-ENTRY OF THE CITY AND THE TAKING OF POSSESSION OF THE LEASED PREMISES OR REMOVAL OR STORAGE OF THE FURNITURE AND PROPERTY AS HEREIN PROVIDED, AND WILL SAVE THE CITY HARMLESS FROM ANY LOSS, COSTS, OR DAMAGES OCCASIONED BY THE CITY THEREBY, AND NO SUCH RE-ENTRY SHALL BE CONSIDERED OR CONSTRUED TO BE FORCIBLE ENTRY. NO SUCH RE- ENTRY OR TAKING POSSESSION OF THE LEASED PREMISES BY THE CITY SHALL BE CONSTRUED AS AN ELECTION ON ITS PART TO TERMINATE THIS AGREEMENT UNLESS A WRITTEN NOTICE OF SUCH INTENTION BE GIVEN TO JOYLAND OR UNLESS THE TERMINATION IS DECREED BY A COURT OF COMPETENT JURISDICTION. 4) Waiver of Statutory Notice to Quit. In the event the City exercises its option to cancel this Agreement upon the happening of any or all of the events set forth herein, a notice of cancellation shall be sent to Joyland, and upon such cancellation, Joyland hereby agrees that it will promptly surrender possession of the Leased Premises to the City. 5) Surrender of Premises. Joyland covenants and agrees that it will, at the termination of this Agreement, in whatever manner such termination may be brought about, promptly surrender and deliver the Leased Premises to the City in the same condition as it existed at the time of execution of this Agreement, excepting ordinary wear and tear. Joyland, having paid all fees and not in default thereof, shall be given a reasonable time, not to exceed one hundred and twenty (120) days after the termination of this Agreement, to remove all of the Joyland's personal property and temporary improvements according to the provisions outlined in this Agreement. 6) Non -Waiver for Breach. No acceptance of fees by the City after it is due, and no delay on the part of the City in enforcing any obligation of Joyland, shall be construed as a waiver or any default then, theretofore, or thereafter existing in the performance of any other obligation undertaken by Joyland. No lawful termination of this Agreement shall release Joyland from responsibility or liability to the City for fees theretofore due and unpaid nor from the performance of any of the covenants, agreements, or stipulations by Joyland herein undertaken to be kept and performed. Section 3 USE, MAINTENANCE & IMPROVEMENTS Joyland agrees, binds and obligates itself as an independent contractor, to: A) operate all concessions in the Leased Premises in a manner that is reasonably acceptable to the City, or its duly authorized agents, and in accordance with all laws, rules, regulations, and ordinances of the City that are in effect or become effective during the term of this Agreement; B) keep the Leased Premises in a clean and sanitary condition, including maintaining all plants, trees, grasses, Permanent Improvements and Temporary Improvements within the Leased Premises in such a state of repair as the same are in at the commencement of this Agreement, subject to reasonable use and wearing of said plants, trees, grasses, buildings, Permanent Improvements and Temporary Improvements; C) make capital improvements which, in Joyland's sole opinion, will enhance the Leased Premises' value, patrons' use of the Leased Premises, and the revenue of the Leased Premises; provided however, that any Permanent Improvements made by Joyland to the Leased Premises, shall become the property of the City at the expiration or termination ofthe lease, and all Temporary Improvements will remain Joyland's property subject to removal upon the expiration or termination of this Agreement; D) notify the Lubbock Police Department in the event of weekend and holiday traffic control issues at Mackenzie Park to allow for reasonable patron and emergency access to and from the Park; E) submit requests for Capital Improvement Projects concerning Mackenzie Park to the Directors of the Parks and Recreation and Public Works departments of the City by March I of each year for the following City fiscal year; F) Joyland shall be solely responsible for, and shall be required to obtain, any and all permits required by Federal, State, or local law in conducting its operations on the Leased Premises. Such permits shall include, but not be limited to, Texas Alcoholic Beverage Commission licenses or permits, food establishment permits, zoning permits, and High Plains Underground Water District licenses or permits; 11 G) Joyland agrees to abide by all laws, statutes, ordinances, rules, and regulations of Federal, State, local, and other duly constituted public authorities having jurisdiction over Joyland or the Leased Premises. Joyland agrees to conduct all activities in the Leased Premises in accordance with the standards now established or that may be reasonably established later by any competent and lawful authority; H) Joyland may install a water well within the Leased Premises. If Joyland installs a water well within the Leased Premises, Joyland shall be solely responsible for any and all costs associated with said water well. Joyland shall abide by all laws, statutes, ordinances, rules, and regulations of Federal, State, local, and other duly constituted public authorities having jurisdiction over water wells, including High Plains Underground Water District. and I) Joyland may install a splashpad and water recreation area to the Leased Premises. City agrees, binds and obligates itself to: A) install a water meter serving Joyland as close as reasonably possible adjacent to Joyland's west boundary line. As required by City rules, regulations and ordinances, Joyland shall be responsible for connecting Joyland's water service line to the new meter, within fourteen (14) calendar days of meter installation; B) maintain and repair the water main serving Joyland up to the water meter serving Joyland. The water service line between the water meter serving Joyland and any required Reduced Pressure Zone equipment for the water line serving Joyland, only, shall be the responsibility of Joyland; C) maintain, repair, and improve all areas outside of the Leased Premises in keeping with the state of repair of the Park itself, including, without limitation, maintaining, clearing, improving, and ensuring the proper and adequate flow of the creek that navigates through Mackenzie Park; D) completion of Capital Improvement Project 92318 Major Sanitary Sewer Mains Rehabilitation, in order to repair and improve sewer lines servicing the Leased Premises; E) when necessary for maintaining public safety, provide weekend and holiday traffic control and security at Mackenzie Park to allow for reasonable patron and emergency access to and from the Park; F) provide Joyland ingress and egress access to the Leased Premises via the Interstate 27 access road north of the Leased Premises. Except for emergency situations, in the event that Interstate 27 access will not be available, the City shall provide Joyland thirty (30) days notice and coordinate with Joyland to minimize any impact of access closure; G) coordinate with Joyland regarding future Capital Improvement Projects that will impact or effect Joyland, the Leased Premises, or Mackenzie Park; and H) provide Joyland with the name, title and telephone number of the individual at the Lubbock Police Department who is responsible for scheduling weekend and holiday traffic control at Mackenzie Park. I) The City retains the right to make improvements to the Park, in cooperation with Joyland and at the City's sole cost, which in the discretion of the City are necessary or desirable in order that the public might obtain full enjoyment of the Park. The City shall take best commercial efforts to not unreasonably disrupt Joyland's operation of the Leased Premises. In the event the City's actions contemplated in this paragraph materially disrupt Joyland's operation of the Leased Premises rent shall be abated for that period of time that Joyland ceases operations due to the City's actions affecting the Leased Premises. J) Joyland agrees to request written approval from the City of Lubbock's City Manager, or his designee, for any and all changes, additions, or alterations in the design and placement of any Permanent Improvement in the Leased Premises, which shall not be unreasonably withheld. The City shall have thirty (30) business days from the receipt of Joyland's request to deny the same in writing. If the City does not timely deny the request in writing, the request will be deemed approved. Should the City Manager, or his designee, deny a request, Joyland shall be entitled to request approval from the City Council. Section 4 INSURANCE Joyland agrees to incur the costs to obtain and maintain during the entire duration of the lease term, insurance with an insurance underwriter acceptable to the City and that is authorized to do business within the State of Texas, as follows: A) Comprehensive General Liability Insurance in the amount of ONE MILLION AND N0/100 DOLLARS ($1,000,000.00) (combined single limit) for bodily injury and property damage claims resulting from Joyland's business operations of the Leased Premises. B) Fire and Extended Coverage Insurance on all improvements located in and on the Leased Premises in amounts sufficient to cover replacement costs of such improvements or the maximum for which the improvements are insurable, whichever is less. C) Joyland shall maintain Worker's Compensation Insurance sufficient to meet the State of Texas statutory guidelines. In the event of loss, in whole or in part, of any Permanent Improvement insured pursuant to the provisions in this Section and the Agreement, Joyland shall apply all proceeds received from such insurance toward either: (A) rehabilitation or repair of such Permanent Improvement, at the option of the City; (B) the construction of new improvements within the Leased Premises that meets Joyland's approval; or (C) the complete removal of the subject Permanent Improvement. If, during the term of this Agreement, Joyland's improvements are totally or partially destroyed from a risk required to be covered by the insurance described in this Section and Agreement, or otherwise covered by insurance, this Agreement shall not terminate. Joyland shall timely restore or cause to be restored the improvements to the extent of the insurance proceeds received. Certificates of insurance or other satisfactory evidence of insurance shall be filed with the City by Joyland prior to the Commencement Date. Each policy shall include a waiver of subrogation and name the City as an additional insured as its interest may appear. Each policy shall also provide that the insurer shall notify the City of any alteration, renewal, or cancellation of its terms and that such policy will remain in full force and effect until ten (10) days after such notice is received by the City. Section 5 ACCESS City and its duly authorized agents and representatives are hereby authorized by Joyland to enter the Leased Premises, all buildings, and view all equipment and improvements in the Leased Premises for the purpose of inspecting the entire area for all lawful purposes provided such entry and inspection is conducted during normal business hours and with at least a twenty- four (24) hour notice to Joyland prior to the entrance. This section is exclusive to the purpose of inspections of Joyland and is not applicable to the City's right to enter Joyland or the Park for emergency situations or to exercise police powers or other emergency services. Section 6 DEFAULT Should Joyland neglect or otherwise fail to perform or observe any of the conditions, agreements, or covenants contained within this Agreement that are or were to be performed by Joyland, and shall not cure such failure within twenty (20) days after written notice from the City describing, in detail, the nature of the default and the requirements to cure the default, then the City may, enter into and upon the Leased Premises, and any part thereof, and repossess the same, and expel Joyland along with Joyland's concessions without being deemed guilty of any manner of trespass, without prejudice to any remedies which might otherwise be used for obtaining possession of the Leased Premises or rent in arrears, and upon entry by the City, the lease shall terminate as to Joyland. Save and except Joyland shall remove all Temporary Improvements from the Leased Premises as provided herein. If, however, Joyland's default V] reasonably requires more than twenty (20) days to cure, Joyland will not be in default if the cure is commenced within the 20-day period and is diligently pursued. Diligent pursuit shall mean acting to cure the default without any unreasonable delay or unreasonable cessation, and unreasonable delay and unreasonable cessation shall mean and include, without limitation, any delays or cessations not the fault of Joyland or within the reasonable control of Joyland. Should Joyland be declared bankrupt according to law, or if any assignment of the premises is made for the benefit of creditors, the City may lawfully and immediately at any time, without notice or demand to Joyland, enter into and upon the Leased Premises, and any part thereof, and repossess the same, and expel Joyland along with Joyland's concessions without being deemed guilty of any manner of trespass, without prejudice to any remedies which might otherwise be used for obtaining possession of the Leased Premises or rent in arrears, and upon entry by the City, the lease shall terminate as to Joyland. Save and except Joyland shall remove all Temporary Improvements from the Leased Premises as provided herein. Should City neglect or otherwise fail to perform or observe any of the conditions, agreements, or covenants contained within this Agreement that are or were to be performed by the City, and fail to cure or begin to repair, remedy or cure the same within fifteen (15) days after the City's receipt of written notice from Joyland, the City shall forfeit its rental rate from the date of notice until such time as the actions of neglect or failures are remedied to the approval of Joyland. Section 7 GENERAL PROVISIONS City and Joyland mutually agree and understand the following: A) Governing Law: The laws of the State of Texas govern this Agreement. B) Venue Provision: Any action or proceeding arising out of this Agreement must be brought in Lubbock County, Texas. C) Attorneys' Fees: Should legal action or litigation ever arise out of this Agreement or in connection to this Agreement, the losing party agrees to reimburse the winning party for costs and attorneys' fees. D) Severability: The terms of this Agreement are severable, so that if a court finds any term or section to be invalid or unenforceable, all remaining terms and sections shall continue to be valid and enforceable. E) Multiple Subparts: This Agreement may be executed in multiple originals and counterparts, each of which shall be an original and all of which shall constitute a single Agreement binding on the parties. F) Entire Agreement: This Agreement constitutes and represents the entire 10 agreement between the City and Joyland, and supersedes and extinguishes all prior agreements, understandings, representations, warranties and arrangements of any nature, whether oral or written, between the City and Joyland relating to the lease of the Leased Premises. The Agreement shall be binding upon and inure to the benefit of the City and Joyland and their respective successors and permitted assigns. G) Agreement Amendments: Amendments to this Agreement are permitted as long as the amendment is in writing and signed by both the City and Joyland. No oral, unwritten, or unsigned amendments shall have any effect or validity on this Agreement. H) No rule of construction against the drafter: Any rule of construction to the effect that any ambiguity is to be resolved against the drafting party shall not be applied to the interpretation of this Agreement. I) Authority to Sign: The person(s) signing below certify that they possess the authority to fully bind the City and Joyland to the terms and conditions set forth in this Agreement. J) Rights and Remedies Reserved: The parties reserve the right to exercise any right or remedy available to them by law, contract, equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a court of competent jurisdiction. Further, the parties shall not be subject to any arbitration process prior to exercising its unrestricted right to seek judicial remedy. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. To the extent of any conflict between this provision and another provision in, or related to, this Agreement, the former shall control. K) Funding and Future Improvements: The Parties understand and acknowledge that any City funding of this Agreement or future Capital Improvement Project is contained in City's annual budget and is subject to the approval of the City in each fiscal year. The Parties further agree that should the governing body of the City fail to approve a budget which includes sufficient funds for the continuance of this Agreement or any Capital Improvement Project, or should the governing body of the City fail to certify funds for any reason, such an event shall not be considered a breach of any obligation created in this Agreement. When the funds budgeted or certified during any fiscal year by the City to discharge its obligations under this Agreement are expended, Joyland's sole and exclusive remedy shall be to terminate this Agreement. L) No Indemnification by City: The parties expressly acknowledge that the City's authority to indemnify andior hold harmless any third party is governed by Article XI, Section 7 of the Texas Constitution and any provision which purports to require indemnification by the City is invalid. M) Compliance with Chapter 2270, Subtitle F, Title 10, Texas Government Code: Joyland warrants that it is in compliance with Chapter 2270, Subtitle F, Title 10 of the Texas 11 Government Code by verifying that: (1) it does not boycott Israel; and (2) it will not boycott Israel during the term of the contract. N) Contingency: Notwithstanding anything provided in this lease, the parties' obligations herein are subject to and contingent upon (A) Joyland's acquisition of substantially all the assets of Joyland Amusement Park, being the business currently operated on the Leased Premises, from Mackenzie Park Playground, Inc., David Dean, and Kristi Dean, and (B) Joyland's lender's approval of the terms of this lease. Sovereign Immunity Acknowledged and Retained: THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT NO PROVISION OF THIS AGREEMENT IS IN ANY WAY INTENDED TO CONSTITUTE A WAIVER BY ANY PARTY OF ANY IMMUNITIES FROM SUIT OR LIABILITY THAT A PARTY MAY HAVE BY OPERATION OF LAW. THE CITY OF LUBBOCK RETAINS ALL GOVERNMENTAL IMMUNITIES. CITY OF LUBBOCK: By: Date: December 13, 2022 1"r—ay`PayW, 16ayor of Lubbock ATTEST: By: P 2 C Date: December 13, 2022 Re cca (Becky) Garza, ecretary JO4YLAN Date:Aple�� APPROVED AS TO CONTENT: By: Lk) t 'r Brooke Witcher, Assistant City Manager 12 APPROVED AS TO FORM: By: Ryan ooke, Assistant City Attorney Date: l Z- ` ^ ZZ 13