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HomeMy WebLinkAbout05/16/2017 10 Parking Lot Utilization Agreement with JEM Development CompanyBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 10. For Meeting of: May 16, 2017 ITEM TITLE: Reviewof 2015 agreement between JEM Development and the City of Yakima for parking lot utilization in the downtown core SUBMITTED BY: Sean Hawkins, Economic Development Manager, 575-6274 SUMMARY EXPLANATION: In 2015, the City Council approved a two year agreement with JEM Development for public parking lot utilization of privately owned parking lots in two locations: the first lot is on the northeast corner of 4th Street and Staff Sergeant Pendleton Way and the second lot is on the southeast corner of Naches Parkway and Chestnut Street. These parking lots contain a combined total of 260 parking spots. The agreement allowed these privately owned parking lots to be opened up for all day public usage in exchange for the City covering the property taxes on the lots, utility costs and performing basic maintenance services. The total cost, annually, for both lots is estimated at $7,500 (approximately $1,000 for the Chestnut lot and $6,500 for the 4th Street lot). The current agreement terms allow the City to renew the lease for up to four (4) additional two (2) year terms ending on May 31, 2025. City staff conducted an occupancy study of both lots in late March and early April and found that daytime occupancy of the parking lot at 4th Street and SSGT Pendleton Way was 30-40% full and 5-15% full for the Chestnut Street and Naches Parkway lot. It is important to note that if Council decided to remove the Chestnut Street lot from this agreement that the City and our guests would still retain access to the lot for our training center usage. The following are options for City Council consideration: 1) Renew the agreement for both parking lots for another two year term; 2) Alter the agreement to allow public parking in only one of the lots; 3) Cancel the extension of the agreement and return the parking lots to private usage. ITEM BUDGETED: STRATEGIC PRIORITY: Economic Development APPROVED FORCt* SUBMITTAL: `City Manager STAFF RECOMMENDATION: BOARD/COMMITTEE RECOMMENDATION: The Council Economic Development Committee reviewed this agreement and authorized the occupancy study at their March 23, 2017 meeting. The occupancy information and agreement was reviewed again at the Council Economic Development Committee at their April 27, 2017 meeting. At that meeting, the Committee recommended bringing the agreement to the full council for consideration. ATTACHMENTS: Description Upload Date Type D 2015 Parking Lot Agreement Wth JEM De lopment 51812017 Co r Merno D JEM Dew1opment Parking Occupancy 5/812017 CO r Merno RESOLUTION NO. R-2015-062 A RESOLUTION authorizing the City Manager to execute an agreement between JEM Development Company and the City of Yakima for parking lot utilization in the downtown core. WHEREAS, the City of Yakima has an opportunity to provide the use of additional parking spaces in the downtown area where residents and visitors can park while enjoying the restaurants, wineries, attractions, and entertainment offered in downtown Yakima; and WHEREAS, JEM Development owns several vacant parking lots in the downtown core and is willing to make two of them available to the City of Yakima for the convenience of downtown visitors; and WHEREAS, the City desires to enter into a two-year agreement with JEM Development to use a total of 260 of JEM's parking spaces, 180 of which are located in the area of North 4th Street and Staff Sgt. Pendleton Way and 80 of which are located at the corner of Naches Avenue & Chestnut Ave.; and WHEREAS, JEM Development will make the 260 parking spaces available for public parking at no cost to the City of Yakima in accordance with the terms of the Parking Agreement attached hereto and incorporated herein by this reference; and WHEREAS, the City will be responsible for maintaining the lots in their current condition, performing basic maintenance duties, and paying the annual property tax of $7,422 for the two lots which equates to $28.00 per space annually; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute the attached and incorporated two-year Parking Agreement with JEM Development for use of 260 parking spaces in the downtown core area. ADOPTED BY THE CITY COUNCIL.this 5th day of May, 2015. Micah Cawl y, Mayor ATTEST: onya Claar Te ,City Cler __� LEASE AGREEMENT — PARKING LOTS City of Yakima And JEM Development Company THIS LEASE AGREEMENT- PARKING LOTS (the "Lease") is entered into and effective as of the 6," -"day of May, 2015 (herein the "Effective Date"), by and between JEM Properties, LLC, Morrier Family Realty, LLC, and JEM Development Real Estate, Inc., doing business as JEM Development Company (collectively, the "Lessor"), and the City of Yakima, a municipal corporation (the Lessee, hereafter called "City"). Lessor and City are sometimes referred to herein collectively as the "parties". I. Recitals A. The companies comprising Lessor are a corporation or limited liability company, each of which is duly formed and existing under the laws of the State of Washington, with principal business offices located at 402 East Yakima Avenue, Suite 1200, Yakima, Washington 98901. B. City is a municipal corporation duly formed and existing under the laws of the State of Washington, with City Hall located at 129 North 2nd Street, Yakima, Washington 98901. C. Lessor owns, operates and maintains property and structures, more particularly described below, which are adequate and available for parking of vehicles. Lessor and City desire to enter this Lease, whereby Lessor will make available to City the described parking lots and structures for parking of vehicles for the public and for access of the public in connection with the parking of vehicles. II. Agreement In consideration of the mutual covenants, conditions and benefits in this Lease, the Lessor and the City agree as follows. 1. The Premises. The Lessor hereby leases to the City, and the City hereby leases from the Lessor, the following six (6) parcels situated in the City of Yakima, Yakima County, Washington (collectively called the "Premises"), and as further collectively shown on the maps attached hereto as Exhibit "A," which Exhibit "A" is hereby incorporated herein by this reference: (A) Parking Lot A: North 4th Street and North Naches Avenue Parcels. The following three (3) parcels comprise Parking Lot A, improved as paved parking lots with 80 parking spaces, collectively: (i) Parking Lot, 101 North 4th Street. This parcel is approximately 0.45 acre in size and is located at the corner of East "A" Street and North 4th Street. This parcel is legally described as follows: Lots 14, 15 and 16 of Block 89. Plat of Yakima, being within the Northwest quarter of Section 19, Township 13, Range 19 E.W.M.; EXCEPT the South 10 feet of said Lot 16 for street right of way. Yakima County Assessor's Parcel No. 191319-21447. (ii) Parking Lot, 107 North 4th Street. This parcel is approximately 0.32 acre in size and is located north of and abutting Parcel (i) described above. This parcel is legally described as follows: Lots 12 and 13, Block 89, Plat of Yakima Yakima County Assessor's Parcel No. 191319-21445. (iii) Parking Lot, 108 North Naches Avenue. This parcel is approximately 0.32 acre in size and is located east of and abutting Parcel (ii) described above. This parcel is legally described as follows: Lots 4 and 5, Block 89, Plat of Yakima Yakima County Assessor's Parcel No. 191319-21440. Parcel A(i) above is owned of record by Morrier Family Realty, LLC, a Washington limited liability company. Parcels A(ii) and A(iii) above are owned of record by JEM Development Real Estate, Inc., a Washington corporation (the legal name of which was changed from "Yakima Mall Shopping Center Corporation" to "JEM Development Real Estate, Inc.", by Amendment to Articles of Incorporation filed with the Washington Secretary of State's office). (B) Parking Lot B: Parcels on southeast corner of intersection of East Chestnut Avenue and South Naches Avenue. The following three (3) parcels comprise Parking Lot B, improved as paved parking lots with parking spaces, collectively: 2 (i) Parking Lot, 101 South Naches Avenue. This parcel is approximately 8,796 square feet in size and is located at the southeast corner of the intersection of East Chestnut Avenue and South Naches Avenue. This parcel is legally described as follows: Lot 16 and the North one-third of Lot 15, Block 112, Plat of Yakima. Yakima County Assessor's Parcel No. 191319-13426. (ii) Parking Lot, 103 South Naches Avenue. This parcel is approximately 8,985 square feet in size and is located south of and abutting parcel (i) described above. This parcel is legally described as follows: The North two-thirds of Lot 14, and the South two-thirds of Lot 15, Block 112, Plat of Yakima. Yakima County Assessor's Parcel No. 191319-13425. (iii) Parking Lot, 105 South Naches Avenue. This parcel is approximately 9,191 square feet in size and is located south of and abutting parcel (ii) described above. This parcel is legally described as follows: Lot 13, and the South one-third of Lot 14, Block 112, Plat of Yakima. Yakima County Assessor's Parcel No. 191319-13424. Said parcels comprising Parking Lot B are owned of record by JEM Properties, LLC, a Washington limited liability company. 2. Term. The parties agree and understand that the purpose of this Lease is to provide additional public parking spaces during the time that the "Downtown Plaza" (situated on the City -owned property commonly known as 22 South 3rd Street (Yakima County Assessor's Parcel No. 191319-24507)) is being constructed. Consequently, the term of this Lease will commence upon the date that a written "Notice to Commence" is issued by City to Lessor (hereafter the "Commencement Date"). The initial term of this Lease will be for a two (2) year period ending on the second (2"d) anniversary date of the Commencement Date, subject to administration on a month-to-month basis until termination as set forth below. 3 7 Unless earlier terminated in accordance with the terms hereof, this Lease shall be automatically renewed for four (4) additional two-year terms; provided that, the final term shall in any event end no later than May 31, 2125. Either party shall have the right to terminate this Lease in its entirety, or the right to modify the Lease by terminating the application of this Lease to any one or more of the parking lots comprising Parking Lot A or Parking Lot B as defined and described in Section 1 above, upon sixty (60) days prior written notice in accordance with and pursuant to Section 17 below. Either party may elect nonrenewal of this Lease, or modification of this Lease by withdrawing any one or more of the parking lots comprising Parking Lot A or Parking Lot B as defined and described in Section 1 above, by delivering written notice of nonrenewal to the other party at least sixty (60) days prior to the date of the expiration of the then term of this Lease. Notwithstanding the above, the parties anticipate that City will issue its Notice to Commence within two years after execution of this Lease. If such Notice to Commence is not issued by City on or prior to the 2nd anniversary date of the Effective Date then this Lease shall expire and terminate without further notice to either party. 3. Use. City shall use the Premises as parking lots for the general public (and not for City's employees, contractors and the like) and for no other use or purpose. City shall not allow its employees or any other persons to use the Premises for any use or purpose other than parking for the general public without the prior written consent of the Lessor, which consent may be withheld in the Lessor's sole and absolute discretion. City shall have the sole right and authority to regulate and control use of such parking lots for the general public during the term of this Lease, and may post appropriate signage governing allowable purposes and parking times. City shall not permit anything to be done in or about the Premises that will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Provided that, notwithstanding the foregoing, City may permit its employees and its guests the non-exclusive use of Parking Lot B in the manner and to the extent as provided in that certain Lease dated February 17, 2015, by and between City and The Tower, LLC, a Washington limited liability company (and an affiliate of Lessor herein) for the lease of Suite 100 in that certain property known and generally referred to as the "Tower Annex." 4. Rent. City will not pay rent, but Lessor agrees and acknowledges that performance of City's improvements, maintenance and repair obligations, as well as other mutual benefits, as set forth herein and below, constitute good and sufficient consideration supporting this Lease. 5. City Improvements. City will restripe all of the parking lots comprising Parking Lot A and Parking Lot B and will provide signage as deemed appropriate in City's sole discretion, all at City's sole cost. For purposes of information only, the City estimates that the cost of restriping of Parking Lot A will be approximately $3,000.00. 6. Security Deposit. None 4 7. Utilities. City shall pay any and all telecommunication, cable, and all other accounts directly with the utility providers. 8 charges for water, sewer, gas, electricity, utilities at the Premises and shall establish 8. Maintenance and Repair; Upkeep of Premises; Hazardous Substances. City is solely responsible for all maintenance and repair of the Premises, including but specifically not limited to snow removal. City shall keep the Premises in a neat and safe condition. The City shall maintain the Premises in compliance with all laws, ordinances, or regulations governing the Premises and the City's use of the Premises. The Lessor shall have no obligation to make any repairs or improvements to the Premises from and after the Effective Date and during the term of this Lease. City's duties to repair and maintain the Premises shall not include any duty or responsibility to replace pavement on the Premises, or to repair damage to such pavement caused by ordinary wear and tear. City's duty to repair pavement shall be limited to that portion of any existing pavement excavated by City to facilitate installation of lighting or any other approved City improvement. City shall not keep on or around the Premises, for the use, disposal, treatment, transportation, generation, storage or sale, any substances designated as or containing components designated as hazardous, dangerous, toxic or harmful, and/or which are subject to regulation as hazardous substances by any federal, state or local law, regulation, statue or ordinance (collectively referred to as "Hazardous Substances"). Without limiting the foregoing City shall with respect to any such Hazardous Substance comply promptly, timely, and completely with all governmental regulations regarding Hazardous Substances. In the event City shall be found to have violated any of the above covenants, any and all costs incurred by Lessor as a result of City's non- compliance, including Lessor's attorneys fees and costs, shall be additional rent and shall be due and payable to Lessor immediately upon demand by Lessor. Without limiting the foregoing, City shall be fully and completely liable to Lessor for and shall indemnify, defend and hold Lessor harmless from and with respect to any and all cleanup costs and any and all other charges, fees, penalties (civil and criminal) imposed by any governmental authority with respect to the use, disposal, treatment, transportation, generation and/or sale of Hazardous Substances, in or about the Premises. 9. Property Taxes. Upon commencement of this Lease and continuing during the term of this Lease, City shall be responsible for paying the property taxes. 10. Condition. City has had the opportunity to inspect the Premises prior to signing this Lease and accepts the Premises in their "AS IS" condition without any representation from the Lessor as to its condition or suitability for City's intended use. 11. Alterations. Except as set forth above in Paragraph 5 of this Lease, City shall not make any alterations, additions, or improvements to the Premises without first obtaining 5 the written consent of the Lessor, which consent may be withheld in the Lessor's sole discretion. 12. Liability; Indemnification; Release. City hereby agrees to indemnify and to hold Lessor harmless from and to defend Lessor against: (a) any and all claims of liability for any injury or damage to any person or property whatsoever occurring in, on or about the Premises or any part thereof, except only those claims for liability arising solely from the intentional acts or gross negligence of Lessor or its agents or representatives in, on or about the Premises; (b) any and all claims arising from any breach or default in the performance of any obligation on City's part to be performed under the terms of this Lease, or arising from any act or negligence of City, or any of its agents, contractors, employees or invitees; and (c) any and all costs, attorneys fees, expenses and liabilities incurred by Lessor relating to any such claims in (a) or (b) above or in any action or proceeding brought thereon. Nothing in this Lease or in this section shall create any obligation by either party (or both parties) to defend, hold harmless or indemnify any person or member of the public entering upon or using the Premises described herein. Nothing in this Lease or in this section shall be construed to create any liability for any personal injuries (including death) or property damage caused by or resulting from the use of the Premises by any third party and/or member of the public entering upon or using the Premises or parking spaces described herein. 13. Insurance. City will procure and maintain, at its sole cost and expense, during the term of this Lease, insurance satisfactory to the Lessor, insuring the Lessor (a) from liability for damage to person or property and (b) for contractual liability arising in whole or in part from action or inaction by, or on behalf of, the City arising out of the rights or obligations of City under this Lease. For the avoidance of doubt, City does not have responsibility to obtain insurance for replacement of the Premises in the case of a catastrophic 'event, which coverage is the responsibility of the Lessor in Lessor's discretion. As of the Commencement Date of this Lease, and continuing without interruption during the term of this Lease, City shall provide certificate(s) of insurance to Lessor on behalf of City. The certificate(s) of insurance shall meet the following minimum requirements. Commercial General Liability Insurance. City shall provide Lessor with a certificate of insurance as proof of commercial liability insurance and commercial umbrella liability insurance with a total liability limit of the limits required in the policy, subject to minimum limits of Two Million Dollars ($2,000,000.00) per occurrence combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate. The certificate shall clearly state who the -provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Lease. The policy shall name the Lessor, its officers, agents, and employees as additional insureds. City shall not cancel or change the insurance Ci IN without first giving Lessor thirty (30) calendar days prior written notice. The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and licensed in the State of Washington 14. Assignment; Sublease. City shall not assign this Lease and City shall not sublease the Premises in whole or in part. 15. Lessor's Right of Access. The Lessor, or the Lessor's employees or agents, shall have the right to enter the Premises in a reasonable manner upon reasonable advance notice to City to inspect the Premises or to conduct surveys, testing, or studies in connection with any engineering, design, financing, or permitting activities related to potential development of the Premises; provided, however, that no notice will be required in emergency circumstances where it is impractical to provide City with advance notice. The Lessor shall use reasonable efforts to minimize any disruption of City's activities. 16. Default. Each of the following shall constitute an Event of Default: a. The City fails to maintain at all times the insurance required by this Lease. b. Either party fails to comply with any agreement or requirement in this Lease, other than the obligations listed in subsection (a), for a period of thirty (30) days after notice from the Lessor. If an Event of Default has occurred and continues, the non -defaulting party may terminate this Lease and pursue any other remedies available under Washington state law. In any litigation, the substantially prevailing party shall be entitled to collect from the other party, in addition to any damages, all reasonable costs, fees, and expenses, including reasonable attorneys' fees, incurred by the prevailing party in pursuing its remedies. 17. Termination. Either party may terminate this Lease in whole or in part by delivering at least sixty (60) days' advance written Notice of Termination to the other party. For avoidance of doubt, the City or Lessor may terminate this Lease in its entirety or only in part by terminating the lease with respect to any one or more of the parking lots comprising Parking Lot A and Parking Lot B as defined and described in Section 1 above. On the expiration of the Term, or any earlier termination of this Lease, the City shall: (a) immediately vacate the Premises (or the portion thereof terminated); (b) repair all damage to the Premises (or the portion thereof terminated) caused by the City's removal of its equipment and property from the Premises; and (c) restore the terminated Premises to the general condition that existed at the commencement of the Term, reasonable wear and tear excepted. The City's indemnity obligation shall survive the termination or expiration of this Lease. 18. Entire Agreement, Applicable Law, Venue. This Lease contains the entire agreement of the parties with respect to the leasing of the Premises and no "i representations or agreements not included in this Lease shall be enforceable unless in writing and signed by the party to be charged. This Lease shall be governed by and interpreted in accordance with the laws of the State of Washington. Venue for any action arising out of the performance, breach or enforcement of this Lease shall lie in Yakima County, Washington. IN WITNESS WHEREOF, the Lessor and the City have caused this Lease to be executed by their duly authorized agents as of on the date first written above. CITY: CITY OF YAKIMA ATTES: RV, aSonyaClaar ee, City Clerk CITY CONTRACT M j015 --ii 3 RESOLUTION NO: A- i20/ S^ 4, Z LESSOR: JEM DEVELOPMENT REAL ESTATE, INC.; JEM PROPERTIES, LLC; MORRIER FAMILY REALTY, LLC _6___ZZ _<�_ -IN -Joseph Morrier, President and Manager, respe2tively By: &JA #A- L� M. Hvf&cretary 19 Cal -4c ATTESTATION D., 12 STATE OF WASHINGTON ) ) ss. Yakima County ) At Yakima, Washington, this 5 day of -M 1:::�- , 2015, personally appeared JOSEPH MORRIER, President, and E/, z,t6L*t lne &reG , Secretary, duly authorized officers agent of JEM Development Real Estate, Inc., and JOSEPH MORRIER, as Manager of JEM Properties, LLC and as Manager of Morrier Family Realty, LLC, and acknowledged this instrument, by said officers sealed and subscribed, to be said officers' free act and deed and the free act and deed of the LESSOR named above. DR,q�'��,, ` :v OOTARYCPO. �`"• PUBL%G m 'Z= A OW PS STATE OF WASHINGTON ) ss. Yakima County j,,& e NOTARY PUBLIC in and for the Stat of Washington, residing at: A10t� My Commission Expires, -eb. a�', oltn At Yakima, Washington, this (o 0 day of , 2015, personally appeared TONY O'ROURKE, City Manager of the City 6f Yakima, CITY named above, and acknowledged this instrument, by said officer sealed and subscribed, to be said officer's free act and deed and the free act and deed on behalf of the CITY named above. - � - /� aAt,� KAARREALLYN NO Y PUBLIC in and for/the State of Notary Public Washington, residing at: State of Washington My Commission Expires My Commission Expires: April 11, 2016 ITEM TITLE ti UMMAR Y EXPLANATION Item No 5 For Meeting of May 5 2015 13 R e s ol uti on authorizing the City Man ag er to enter a Parki n Agreem ent with JE M D ev el opm ent C omp_any Sea. Hx,,v -tris Economic D evelopin exit Manager 575 6274 The following two year agreement will allow the City to lease 260 new public parking spaces from JEM Development The parking lot locations are on the Northeast corner of N 4th Street and Sergeant Pen dleton ay (780 spaces) arid.; tie S outheast comer of Naches Avenue and Chestnut Stre et 0 spaces) There rs no fee to lease the parking spaces over the course of the agreement however the City will agree to the fol lo� ing item 1) The City will agree to pay the property taxes on both lots whi ch is estimated to be 7 422 per year or 28 00 per spare annually The City will agree to fix pot holes in each lot and restripe each lot The City will perforin basic ma ntenance including street sweeping weed abatement or other basic litter removal serviees The City x.11 in demnify JEMbevel op dent for any claims of li ability Resolution X Contract Start Date Item Budgeted Fundin g S our c efFi sc al Imp act Strategic Priority In suranee Required9 No A4 to Orchnance Economic Develop ent APPROVED F'Old City Manager SUBBETTAL P,ECOMhIENDATION Staff re c om m en ds Council authonze the Qty Manager to si n the parlung agreemeni bet een JEM Development and the City of Yakima ATTACHMENTS Description Upload Cute Type D R esolution wth J E hal D ev fort p girt€ An g 42 0x201 5 14 Cover M em o D Parking lot lease JEM Development 4r -10r.1015 Coven M e o m v 121 m Z m v 2. c m ILAv 2. im f4 21, 10. 10.