Loading...
HomeMy WebLinkAboutResolution - 2014-R0189 - Lease Agreement - KF Thiel & Sons - 05/22/2014Resolution No. 2014-RO189 May 22, 2014 Item No. 6.22 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, a Lease Agreement by and between the City of Lubbock and K. F. Thiel & Sons, and related documents. Said Lease Agreement 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: May 22, 20? " Qvl�� �.'w Rebe ca Garza, City Secreta APPROVED AS TO CONTENT: Kelly Campbell, Executive Director of Aviation APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney vw: ccdocs"RES. Lease Agrmt-Thiel April 29, 2014 Resolution No. 2014-RO189 THE STATE OF TEXAS § CITY OF LUBOCK § LEASE AGREEMENT This LEASE AGREEMENT, herein after referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas, by and between the CITY OF LUBBOCK (referred to herein as City) and K. F. THIEL & SONS, (referred to herein as Lessee). WITNESSETH: WHEREAS, City owns, controls and operates Lubbock Preston Smith International Airport (referred to herein as Airport), situated in Lubbock County, Texas, and has authority to grant certain rights and privileges with respect thereto, including those hereinafter set forth; and WHEREAS, City owns the following described tracts of land comprising a part of the Airport property and has determined that said land should be put to a productive use; and WHEREAS, City reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent the Lessee herein and all other persons from erecting, or permitting to be erected, any building or other structure on Airport property which, in the opinion of the City, would limit the usefulness of the Airport or constitute a hazard to aircraft; and WHEREAS, City deems it advantageous to itself and to its operation of the Airport to lease unto Lessee the premises described herein, together with certain privileges, rights, uses and interests therein, as hereinafter set forth; and NOW THEREFORE, for and in consideration of the mutual promises, covenants, terms and conditions, both general and special, as hereinafter set forth, City hereby grants to Lessee the rights and privileges hereinafter described. Lessee agrees to accept the duties, responsibilities and obligations as hereinafter set forth; and the parties hereto, for themselves, their successors and assigns, agree as follows: ARTICLE ONE DEMISE OF LEASED PREMISES LEASED PREMISES. City does hereby lease unto Lessee the premises described and being: Farm #4187: +/- 954.5 acres The acreage and location of land covered by this Lease can be changed, as needed due to future land acquisition and development, by an amendment including the changes signed by the Director of Aviation and the Lessee. Such amendments shall be kept on file at the office of the Director of Aviation. PURPOSE AND PRIVILEGES. Lessee shall use the leased premises solely for the purpose of planting, cultivating and harvesting crops of such diversification and acreage as may be agreed upon by the Director of Aviation and the Lessee prior to each planting season, or at such times during the year as may be necessary to determine what crops shall be planted. Such agreement shall be obtained before cultivation is commenced. Nothing in this Agreement shall be construed as granting to Lessee any right to operate any other business or concession on the Airport premises except as enumerated herein. ARTICLE TWO TERM TERM. The term of this Agreement shall be for a ten (10) year period, commencing on June 1, 2014 and ending on May 31, 2024. This Lease shall automatically be extended for two (2) additional five (5) year terms unless terminated by Lessee or City with sixty (60) days written notice. HOLDING OVER. This Agreement will terminate without further notice when the lease term (or any extension thereof) expires, and if the Lessee holds over after the term expires such hold over will not constitute a renewal of the Agreement or give Lessee any rights under this Agreement in or to the premises K. F. Thiel & Sons 2 ARTICLE THREE RENTAL FEES RENTAL. In consideration of the rights and privileges herein granted, Lessee shall pay to the City in accordance with the following schedule: A. One-fourth (1/4) of all cotton produced. B. One-fourth (1/4) of all Government payments for cotton acreage diverted in accordance with Government conservation programs or other Government Programs. C. Cash rent on other crops as may be negotiated from time to time with the Director of Aviation, committed to writing and signed by both Lessee and the Director of Aviation. Lessee shall deliver to the City at the cotton gin, free of any charges, one-fourth (1/4) of all lint cotton in the bale, together with the seed therefrom, and shall deliver to the City at the City -designated elevator one-third (1/3) of other crops grown on said land; provided, however, that if cotton is sold as ginned, settlement for cotton and cotton seed shall be promptly made to the Airport on the same day as the same is sold, or as soon as practicable thereafter. CROP FERTILIZATION COSTS. The parties hereto mutually agree that fertilization of farm land is and will be mutually beneficial and should be undertaken as warranted. The City agrees to pay one-fourth (1/4) of any agreed fertilizing program costs on cotton crops and one-third (1/3) of any agreed fertilizing program costs on all other crops. The parties agree that a letter agreement outlining the fertilizing program and its maximum monetary limitations shall be executed annually by Lessee and the Director of Aviation prior to commencing any fertilizing options. The parties further agree that the City's share of agreed fertilization program costs shall be deducted from rentals owed by Lessee to the City in each and every year throughout the term of this Lease. K. F. Thiel & Sons ARTICLE FOUR RIGHTS RESERVED TO CITY AIRPORT SAFETY. City reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from constructing or permitting construction of any building or other structure on or off the Airport which, in the opinion of City, would limit the usefulness of the Airport or constitute a hazard to aircraft. TIME OF EMERGENCY. In the event of a war or national emergency, the City shall have the right to lease the landing area and any other portion of the Airport to the United States for governmental use and, if such lease is executed, the provisions of this instrument, insofar as they are inconsistent with the provisions of the lease to the United States, shall be suspended. DEVELOPMENT OF AIRPORT. All rights, privileges or interests acquired herein by the Lessee or other persons, at the option of the City, following written notice of thirty (30) days, may be suspended or terminated, is such suspension or termination is found by the City, acting in good faith, to be necessary for the development of the Airport, or for the development or promotion of aeronautical operations. CITY'S RIGHT TO PREMISES. City reserves the right to go upon leased premises at any time to survey, lay off contour lines, build terraces and drill wells, construct and maintain water and other utility lines, and to make any improvements. Should Lessee fail or refuse to properly tend, cultivate and harvest the crops on the premises, City shall have the right to enter upon said premises and hire sufficient labor for that purpose, the cost of which shall be repaid to City out of the portion of the crops belonging to Lessee. It is understood that this Lease is made subject to all existing easements and all rights under mineral deeds and leases heretofore granted or assigned and recorded in the Real Property Records of Lubbock County, Texas, and subject to the right of the City to develop and explore for oil, gas and minerals on said land; and such rights and the right of ingress and egress over and upon said lands are herein expressly reserved to City, its agents, successors and assigns. K. F. Thiel & Sons 4 ARTICLE FIVE RIGHTS & LIMITATIONS OF LESSEE ACCESS. Lessee is herein granted the right of ingress to and egress from the leased premises over and across common or public roadways serving the Airport. Such right of ingress and egress, however, shall be subject to all laws, ordinances, rules and regulations now existing or hereafter promulgated by the City of Lubbock or other lawful authority. LAND WORK. Lessee shall promptly break, prepare and plant the cultivated land upon such premises for each growing season and shall cultivate and work the planted crops when necessary. Lessee shall provide all necessary labor and materials to keep all growing crops free from damaging weeds and grass. Lessee shall gather, harvest and market said crops. Lessee agrees to provide and pay all costs of insecticides, desiccants and defoliation. Lessee agrees that none of the tillable land will be allowed to lie out or be taken out of production without the written consent of the Director of Aviation. If for any reason, Lessee fails to plant any crop(s) in due time and season, or if the crop is destroyed by the elements, or Lessee otherwise fails to develop a mature profitable crop in a reasonable time, such acreage shall revert to City absolutely, unless Lessee notifies the Director of Aviation in writing as soon as reasonably expected of such condition, and obtains a written consent to plant such acreage in such crops as may be mutually agreed upon. Lessee agrees that during the term of this Agreement, Lessee shall cultivate said land, whether planted or not, so as to minimize the blowing of top soil, sand and dust onto the ramps, runways and taxiways of the Airport. WATER WELLS. Lessee may have and is hereby given the right to use the seven (7) existing City -owned irrigation water wells on the premises, but Lessee shall provide the pumps and motors for the operation of said wells. Lessee may drill additional water wells on the land for the purpose of irrigating crops grown thereon. It is understood that said wells shall be drilled at locations designated by the Director of Aviation and without cost to the City. All wells drilled on said land shall be the property of the City. All motors and pumps owned by Lessee may be removed by Lessee at the expiration of the Agreement. Lessee shall cap the wells if the motors and pumps are removed. If the motors and pumps are left on the premises thirty (30) days from K. F. Thiel & Sons the date of termination of this Agreement, they shall be deemed abandoned and will become the property of the City. WEEDS AND GRASS. Lessee agrees to keep down all weeds and grasses and prevent seeding and spreading. Lessee shall not allow a volunteer crop of any kind to mature on said land. LIVESTOCK. Lessee agrees no livestock will be on the leased premises. LAST YEAR OF LEASE. As the crops are gathered from any said land during the last year of this Lease, Lessee shall surrender possession of such portions thereof, so the City or future tenant may prepare the said land for cultivation for the following year. Crops which would not ordinarily be harvested before the termination of the last year of the Lease, shall be planted without written consent of the Director of Aviation. Any crops growing on said land in violation of this provision shall revert to City as its absolute property, together with any plowing or work done by Lessee without such written consent. IMPROVEMENTS ON PREMISES. Lessee agrees to keep all fences, buildings and other improvements in as good condition as they are at the execution of this Agreement, the usual wear and tear expected. If buildings or other improvements on the leased premises are destroyed or damaged so they cannot be repaired except by substantially rebuilding them, City shall be under no obligation to rebuild or repair said buildings or improvements. No alterations in the buildings or improvements shall be made and no substantial improvements shall be placed on the premises by Lessee without the written consent of the Director of Aviation. Both parties herein agree that any improvements placed thereon contrary hereto shall become the property of the City and shall not be removed by Lessee, in whole or in part. RECORDS. Lessee agrees to keep adequate records and books of account, to be inspected by the Director of Aviation or a duly authorized representative , and to annually render to the City a satisfactory written account showing the total number of bales of cotton produced from said land and/or the total number of applicable units of other crops produced therefrom, and the sales price thereof. K. F. Thiel & Sons ARTICLE SIX INSURANCE Lessee shall carry and maintain insurance at all times this Lease is in effect, at Lessee's sole expense with an insurance underwriter authorized to do business in the State of Texas and acceptable to the City, against claims of general liability and automobile liability resulting from Lessee's business activities at the Airport. City may review and adjust the insurance limits in order to reflect reasonable coverage as necessary. Farm General Liability Insurance — Lessee shall have Farm General Liability Insurance with limits of $300,000 combined single limit in the aggregate and per occurrence. Comprehensive Automobile Liability Insurance — Lessee shall have Comprehensive Automobile Liability Insurance, with limits of not less than bodily injury/property damage $300,000 combined single limit, to include all owned and non -owned vehicles, including employer's non -ownership liability hired and non -owned vehicles. The above-mentioned liability policies shall all include a waiver of subro ag tion and name City as an additional insured. Certificates of insurance with the endorsements or other satisfactory evidence of insurance shall be filed with the Director of Aviation prior to execution of this lease. The insurer shall notify the Director of Aviation of any alteration, renewal or cancellation, and remain in full force and effect until at least thirty (30) days after such notice of alteration, renewal or cancellation is received by the Director of Aviation. IDEMNIFICATION. The Lessee shall be deemed to be an independent contractor and operator responsible to all parties for its respective acts and omissions, and the City shall in no way be responsible therefore. Lessee shall indemnify and hold harmless, to the fullest extent permitted by law, City, and City's respected officers, employees, elected officials and agents, from and against any and all losses, damages, claims or liabilities, of any kind or nature, which arise directly or indirectly, or are related to, in any way, manner or form, the activities of Lessee contemplated hereunder. Lessee further covenants and agrees to defend any suits or administrative proceedings brought against the City and/or City's respective officers, employees, elected officials and/or agents on account of any claim for which it is obligated to indemnify City, and to pay or discharge the full amount or obligation of any such claim incurred by, K. F. Thiel & Sons accruing to, or imposed on City, or City's respective officers, employees, elected officials and/or agents, as applicable, resulting from the settlement or resolution of said suits, claims, and or administrative proceedings. In addition, Lessee shall pay to City, City's respective officers, employees, elected officials and/or agents, as applicable, all attorney fees incurred by such parties in enforcing Lessee's indemnity in this section. Indemnification — Environmental Harm. Without limiting any provisions of this Agreement, Lessee shall also defend, indemnify and hold City and its respective officers, employees, elected officials and agents harmless from and against all suits, actions, claims, demands penalties, fines liabilities, settlements, damages, costs and expenses (including but not limited to reasonable attorney and consultant fees, court costs and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, brought against City arising out of or in any way related to: 1. Any actual, threatened or alleged contamination by hazardous substances of the Premises or contamination by hazardous substances of the Airport by Lessee or its agents; 2. The presence, disposal, release or threatened release of hazardous substances by Lessee or its agents at the Airport that is on, from or affects the soil, air, water, vegetation, buildings, personal property, persons, animals or otherwise. 3. Any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to hazardous substances by Lessee at the Airport; or 4. Any violation by Lessee of any Environmental Laws that affect the Airport. ARTICLE SEVEN GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions. Failure of the Lessee to comply with any requirement of Article Six or Seven shall be cause for immediate termination of this Agreement by City. K. F. Thiel & Sons RULES AND REGULATIONS. City reserves the right to issue through the Director of Aviation such reasonable rules, regulations and procedures for activities and operations conducted on the Airport as deemed necessary to protect and preserve the safety, security and welfare of the Airport and all persons, property and facilities located thereon. The Lessee's officers, agents, employees and guests will obey all rules and regulations which may be promulgated from time to time by the City or authorized agent at the Airport, or by other lawful authority, to ensure the safe and orderly conduct of operations and traffic on the Airport. The taxiways, runways and adjacent safety areas of the Airport shall not be used by the Lessee or any agent or employee of the Lessee as a passage or roadway for any tractor, plow, implement or other vehicle of any character, and Lessee shall not otherwise enter in or upon these areas or park any equipment or vehicle upon said areas. No irrigation ditch shall be placed in such close proximity to a taxiway, runway or safety area on the Airport so that the foundations thereof or surface may be flooded or weakened by water seepage, and no irrigation ditch shall be constructed at any location unless expressly approved by the Director of Aviation. NON-DISCRIMINATION PRACTICES. Lessee, its agents and employees will not discriminate against any person or class of person by reason of age, sex, race, handicap, religion or national origin in providing any services or in the use of any of its facilities provided for the public, in any manner prohibited by Federal Aviation Administration Regulations. Lessee further agrees to comply with such enforcement procedures as the United States Government might demand that the City take in order to comply with the Sponsor's Assurances. Lessee agrees not to illegally discriminate against any employee or applicant for employment because of age, sex, race, handicap, religion or national origin. FEES, TAXES, AND PERMITS. Lessee shall pay for all licenses, permits, clearances, rights- of-way and other matters necessary to conduct business. Lessee shall pay promptly when due all fees, taxes and charges assessed under local, state or federal statutes or ordinances insofar as they are applicable. Delinquency in payment of such obligations after any protest has been settled shall, at the option of the City, be cause for immediate termination of this Lease. K. F. Thiel & Sons ADDITIONS, IMPROVEMENTS OR ALTERATIONS. Lessee shall not make, permit or suffer any additions, improvements or alterations to the leased premises which constitute any major structural change or changes without first submitting plans and specifications for such additions, improvements or alterations to the Director of Aviation and securing prior written consent from the Director of Aviation. Any such additions, improvements or alterations made with the consent of the Director of Aviation shall be solely at the expense of the Lessee and, unless such consent provides specifically the title to the additions or improvements so made shall vest in the Lessee, title thereto shall at all times remain in City, and such additions or improvements shall be subject to all terms and conditions of this Agreement, provided however, that any trade fixtures installed by Lessee may be removed by Lessee at its expense. The Lessee agrees to hold City harmless from all Mechanic's and Materialman's Liens arising from any construction, additions, improvements, repairs or alterations effected by the Lessee. Any property installed or added by Lessee which becomes permanently attached to the leased premises shall become the property of City upon termination of this Agreement, provided however, that any trade fixtures installed by Lessee may be removed by Lessee at its expense. TRASH, GARBAGE, REFUSE, ETC. Lessee shall provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse produced as a result of Lessee's business operations on leased premises. BUSINESS SOLICITATIONS. All of Lessee's business operations and solicitations will be confined to the leased premises or such other premises at the Airport that have been leased to Lessee. NO ASSIGNMENT OR SUBLETTING. Lessee will not directly or indirectly assign, sublet, sell, hypothecate or otherwise transfer this Lease or any portion of the leased premises without the prior written consent of the Director of Aviation. No such assignment or subletting shall affect Lessee's obligations to make all required payments. ABANDONMENT. Should Lessee abandon said premises, or sell or attempt to sell any part of the crops before they are matured or harvested, all of Lessee's interest in all said crops shall be immediately forfeited to City, and City shall have the right to enter upon and take possession of said premises. K. F. Thiel & Sons 10 EXCLUSIVITY. Lessee's right to conduct business at the Airport shall be nonexclusive. WAIVER. The failure of City to insist in any one or more instance upon performance of any of the terms, covenants or conditions of this Lease shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants or conditions, and Lessee's obligation with respect to such future performance shall continue to be in full force and effect. Furthermore, the acceptance of rentals or fees by City after Lessee's failure to perform, keep or observe any of the terms, covenants or conditions of the Lease shall not be deemed a waiver by City to cancel this Agreement for such failure. TITLE TO LEASED PREMISES. Lessee agrees that it does not acquire any equity or title to the leased premises as a result of this Agreement and the property herein leased shall remain the sole property of City. City grants Lessee a leasehold interest by and through this Agreement. STORED CONTENTS. Lessee agrees to limit the outside storage of any and all materials, components, assemblies and repaired and manufactured products to the area on the leased premises and to control the growth of vegetation and weeds on the leased premise. ARTICLE EIGHT TERMINATION Lessee agrees to give peaceful possession of said property at the termination of this Lease in as good condition as reasonable use and wear will permit. It being the absolute intention of the parties hereto is that this Lease shall expire upon the date above determined. This Agreement is subject to termination for the reason set forth below, provided that thirty (30) days written notice is given to the Lessee. In the event Lessee fails or refuses to keep and perform any covenant or condition of this Lease in the time and manner here stated, the Director of Aviation shall have the right, to declare this Agreement null and void and enter and take possession of said premises without being deemed guilty of trespass and without prejudice to any other remedy the City may have for the collection of rents or the enforcement of this Lease. In case of City's sale of said premises during the tenancy by Lessee thereof to a purchaser who desires possession, Lessee agrees to surrender the same at once upon receipt by him of the actual present value of the growing crops, and the refund of the prorate part of the cash payment K. F. Thiel & Sons I1 for grass land, if any, according to the calendar year that has passed, such value to be determined by Lessee and Director of Aviation. If they cannot agree, three disinterested parties, one to be selected by the Director of Aviation, one by Lessee and the two to choose a third, and their decision as to value shall be binding. ARTICLE NINE MISCELLANEOUS PROVISIONS NOTICES. Notices to the City required or appropriate under this Lease shall be deemed sufficient if in writing and mailed by registered mail with postage prepaid to the Director of Aviation, Lubbock Preston Smith International Airport, 5401 N. MLK Blvd., Unit 389, Lubbock, Texas 79403. Notices to the Lessee required or appropriate under this Lease shall be deemed sufficient if in writing and mailed by registered mail with postage prepaid to K.F. Thiel & Sons, 2102 E. County Road 6000, Lubbock, Texas 79403. PARTIES BOUND. This Agreement binds, and inures to the benefit of, the parties to the Lease and their respective heirs, executors, administrators, legal representative, successors, and assigns. APPLICABLE LAW. This Agreement is to be construed under Texas law, and all obligations of the parties created by this Lease are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Agreement, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. ATTORNEY'S FEES. Should City institute legal action to collect rent due under this Agreement or damages for default of any covenant made herein, a reasonable sum shall be added to the amount of recovery for attorney's fees together with all costs of court. NON -ARBITRATION. The City reserves the right to exercise any right or remedy available to it 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 City 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 document, this provision shall control. K. F. Thiel & Sons 12 PRIOR AGREEMENTS. Both parties hereby agree that this instrument constitutes the final Agreement to the parties and that all other previous agreements, leases and contracts between the parties which pertain to the property described herein are hereby declared null and void. AMENDMENT. No amendment, modification, or alteration of this Lease is binding unless in writing, dated subsequent to the date of this Lease, and duly executed by the parties. EXECUTED THIS 22nd day of May , 2014. CITY OF LUBBOCK ROBERTSON, MAYOR ATTEST: Reb cca Garza, City Secretar APPROVED AS TO CONTENT: Kelly Campbell, Executive Director of Aviation APP D A TO FORM: Chad Weaver, Assistant City Attorney K. F. THIEL & SONS BY: '" Im 01�'f OAMS THIEL Date: K. F. Thiel & Sons 13 oWraIff I vRAr 0- �M�M