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HomeMy WebLinkAboutCrystal Distribution - Business Property Lease - 7.5.2022BUSINESS PROPERTY LEASE This Business Property Lease (the "Lease") is entered into as of July 5 , 2022, by and between the City of Waterloo, Iowa, an Iowa municipal corporation ("Landlord"), whose address for the purpose of this Lease is 715 Mulberry Street, Waterloo, Iowa, 50703, and Crystal Distribution Services, Inc. ("Tenant"), whose address for the purpose of this Lease is P.O. Box 1744, Waterloo, Iowa, 50704. The parties acknowledge that Tenant has owned the leased premises and has conducted its business thereon for several years and that Landlord purchased the premises from Tenant as provided in a certain Development Agreement (the "DA") between the parties dated May 17, 2021 and recorded June 17, 2021 as Doc. No. 2021- 26625. The DA also provides for Tenant to construct new facilities for its business on adjacent property. 1. PREMISES AND TERM. Landlord leases to Tenant, and Tenant hereby rents and leases from Landlord, according to the terms and provisions herein, the following described real estate, situated in Black Hawk County, Iowa, to wit: See Exhibit "A" attached hereto. Commonly known as 1442, 1508 and 1620 Sycamore Street, Waterloo, Iowa, with the improvements thereon and all rights, easements, and appurtenances thereto belonging, for a term commencing upon execution of this Lease and continuing until and including June 30, 2027, upon the condition that Tenant pays rent therefor and otherwise performs as provided in this Lease. Notwithstanding the foregoing, Tenant may terminate the lease at an earlier date by 30 days' advance written notice to Landlord. 2. RENTAL. Tenant agrees to pay to Landlord as rental for said term, as follows: $ 1.00 per year, in advance, due upon signing of this Lease. No security deposit. 3. POSSESSION. Tenant shall be entitled to possession on the first day of the term of this Lease, and shall yield possession to the Landlord at the time and date of the close of this Lease term, except as herein otherwise expressly provided. 4. USE OF PREMISES; PRIOR USE. Tenant covenants and agrees during the term of this Lease to use and to occupy the leased premises only for activities and purposes in keeping with and incidental to general commercial purposes such as Tenant currently conducts on the premises. Landlord has not reviewed zoning or other applicable legal requirements or limitations imposed by any local, state, or federal governmental authority that may affect Tenant's use of the premises, and Landlord makes no representation or warranty that the premises is suitable for Tenant's intended use. Tenant shall conduct its own review of applicable law and shall be solely responsible for meeting all legal requirements, including but not limited to building permits, Iicensure, or governmental approval. The parties acknowledge that Tenant is the former owner of the premises and that this Lease is a lease -back following Landlord's purchase of the premises according to the terms of a development agreement between the parties. 5. QUIET ENJOYMENT. Landlord covenants that its estate in said premises is fee simple and that the Tenant on paying the rent herein reserved and performing all the agreements by the Tenant to be performed as provided in this Lease, shall and may peaceably have, hold and enjoy the demised premises for the term of this Lease free from molestation, eviction or disturbance by the Landlord or any other persons or legal entity whatsoever. (But see paragraph 14, below.) Landlord shall have the right to mortgage all of its right, title, interest in said premises at any time without notice, subject to this Lease. 6. CARE AND MAINTENANCE OF PREMISES. Each party shall perform its responsibilities of repair and maintenance to the end that the premises will be kept in a safe and serviceable condition. Neither party will permit nor allow the premises to be damaged or depreciated in value by any act, omission, or negligence of itself, its agents or employees. 1 (a) Tenant takes said premises in their present condition except for such repairs and alterations as may be expressly herein provided or to which Landlord may hereafter give its prior written consent. Tenant acknowledges that it is the former owner of the premises and that it is fully familiar with the condition of same. (b) LANDLORD'S DUTY OF CARE AND MAINTENANCE. Landlord shall have no duty whatsoever to care for or maintain the premises or any part thereof. (c) TENANT'S DUTY OF CARE AND MAINTENANCE. Tenant shall, after taking possession of said premises and until the termination of this Lease and the actual removal from the premises, at its own expense, care for, maintain, and repair the exterior and interior parts of said premises in a reasonably safe and serviceable condition consistent with its own needs and pursuant to applicable law, ordinance or regulation. Tenant will furnish its own interior and exterior decorating. Tenant's duties under this Section shall include, but not be limited to, the foundation, roof, and other structural parts of the premises, all fixtures and mechanical systems, and any other feature of the premises that is commonly cared for, repaired, or maintained by a landlord. Tenant at its own expense may install floor covering and will maintain such floor covering in good condition. Tenant will be responsible for the plate glass in the windows of the leased premises and for maintaining the sidewalks and parking areas on and abutting the leased premises. Tenant shall make no structural alterations or improvements without the Landlord's prior written approval of the plans and specifications therefor. Tenant shall be responsible for all necessary upkeep of lawns, grounds, and landscaping, if any, to keep the premises well -maintained. Tenant shall be responsible to control and/or clear ice and snow from all sidewalks and parking areas on or abutting the premises. (d) Tenant will make no unlawful use of said premises and agrees to comply with all valid regulations of the Board of Health, municipal ordinances, the laws of the State of Iowa and the federal government, but this provision shall not be construed as creating any duty by Tenant to members of the general public. Tenant will not allow trash of any kind to accumulate on said premises or the parking area, yards, or sidewalks, and it will remove same from the premises at its own expense. (e) Tenant shall have responsibility for and perform all acts necessary for compliance with the Americans with Disabilities Act. 7. FACILITY SERVICES. (a) UTILITIES AND SERVICES. Tenant, during the term of this Lease, shall pay before delinquency all charges for use of telephone, water, sewer, gas, electricity, power, television, Internet, garbage or trash disposal, and all other utilities or services of whatever kind and nature which may be used in or upon the leased premises. (b) AIR CONDITIONING AND HEATING equipment shall be initially furnished by Landlord, and Tenant shall maintain, repair, and replace same according to Tenant's needs. (c) JANITOR SERVICE shall be furnished at the expense of Tenant. 8. END OF TERM. (a)This Lease shall terminate upon expiration of the original term, unless terminated earlier in accordance with the terms of Section 1. (b) SURRENDER OF PREMISES AT END OF TERM. Tenant agrees that upon the termination of this Lease it will surrender, yield up and deliver the leased premises in good and clean condition, except the effects of ordinary wear and tear and depreciation arising from lapse of time, or damage not covered by insurance. (c) REMOVAL OF FIXTURES. Tenant may, at the expiration of the term of this Lease, or renewal or renewals thereof or at a reasonable time thereafter, if Tenant is not in default hereunder, remove any equipment which said Tenant has installed in the leased premises, providing said Tenant repairs any and all damages caused by removal. Notwithstanding the foregoing, all leasehold improvements made by Tenant and all fixtures installed by Tenant shall remain upon the premises and shall be the sole property of Landlord. (d) HOLDING OVER. Tenant shall not continue to occupy the premises beyond the Lease term without the express prior written consent of Landlord. 2 9. ASSIGNMENT AND SUBLETTING. Tenant may not assign this Lease or sublet the premises or any part thereof without the prior written consent of Landlord. Notwithstanding anything to the contrary in this paragraph, Tenant may assign this Lease to the surviving entity in connection with any corporate merger, consolidation or reorganization to which Tenant is a party. 10. PROPERTY TAXES. Tenant shall pay all installments of real estate taxes, and all increases in installments, that would become delinquent if not paid during the term of this Lease. Tenant shall also timely pay all taxes, assessments, or other public charges levied or assessed by lawful authority against its personal property on the premises during the term of this Lease. Tenant shall pay all special assessments that would become delinquent if not paid during the term of this Lease. Each party reserves the right to protest any assessment of taxes. 11. INSURANCE. (a) Tenant agrees that it will at its own expense procure and maintain hazard insurance (i.e., fire and extended coverage) on the Property for the benefit of the parties as their respective interest may appear. Coverage shall be not less than $500,000. From and after delivery of possession, Landlord shall provide no fire and extended coverage insurance on said premises for the benefit of Tenant. Certificates or copies of said policies, naming Landlord as an additional insured, and providing for thirty (30) days' advance notice to Landlord before cancellation, shall be delivered to Landlord no later than the date that Tenant begins to occupy the leased premises. A renewal certificate shall be provided to Landlord prior to expiration of any policy. Tenant's share of such insurance proceeds is hereby assigned and made payable to Landlord to secure rent or other obligations then due and owing by Tenant to Landlord. To the extent permitted by their policies, Landlord and Tenant waive all rights of recovery against each other. (b) Tenant further covenants and agrees that it will at its own expense procure and maintain commercial general liability insurance in the amount of not less than $1,000,000 per occurrence and $3,000,000 annual aggregate. Such insurance shall cover liability arising from premises operations, independent contractors, personal injury, products, and completed operations and liability assumed under an insured contract, including but not limited to the activities of Tenant, its employees and agents. Certificates or copies of said policies, naming Landlord as an additional insured, and providing for thirty (30) days' advance notice to Landlord before cancellation, shall be delivered to Landlord within no later than the date that Tenant begins to occupy the leased premises. A renewal certificate shall be provided to Landlord prior to expiration of any policy. (c) Tenant will not do or omit the doing of any act which would vitiate any insurance, or increase the insurance rates in force upon the real estate improvements on the premises or upon any personal property of Tenant upon which Landlord by law or by the terms of this Lease, has or shall have a lien. (d) Tenant further agrees to comply with recommendations of Iowa Insurance Services Office, or its successor office, and to be liable for and to promptly pay, as if current rental, any increase in insurance rates on said premises and on the building of which said premises are a part, due to increased risks or hazards resulting from Tenant's use of the premises otherwise than as herein contemplated and agreed. 12. INDEMNITY. Except as to any negligence of Landlord or its agents in the performance of any obligation of Landlord under this Lease, Tenant will protect, indemnify, and save harmless Landlord, its officers, officials, employees, and agents, from and against any and all claims, demands, causes of action, loss, costs, expenses, damages and liabilities of any type or nature (including but not limited to attorneys' fees and expenses) occasioned by, or arising out of, any accident or other occurrence causing or inflicting injury and/or damage to any person or property, that happens or is done, in, upon, or about the leased premises, or due directly or indirectly to the tenancy, use, or occupancy thereof, or any part thereof by Tenant or any person claiming through or under Tenant. Prior to occupancy of the leased premises hereunder, Tenant has had the opportunity to test the premises for toxic or hazardous substances, mold, and other environmental matters, and Tenant agrees that the indemnities set forth in this paragraph shall include but not be limited to any claims, demands, losses, or causes of action arising from or relating to such matters. The provisions of this paragraph shall survive the expiration, abandonment, or termination of this Lease for any reason. 13. FIRE AND CASUALTY. (a) PARTIAL DESTRUCTION OF PREMISES. In the event of a partial destruction or damage of the leased premises which causes a business interference by preventing the conduct of a normal business operation, and which damage is reasonably repairable within sixty (60) days after its 3 occurrence, this Lease shall not terminate but the rent for the leased premises shall abate during the time of such business interference. In the event of partial destruction, Tenant shall have the option to repair such damages. (b) ZONING. If the zoning ordinance of the municipality in which this property is located makes it impossible for Landlord, using diligent and timely effort, to obtain necessary permits and to repair and/or rebuild so that Tenant is able to conduct its business on these premises, then such partial destruction shall be treated as a total destruction as in the next paragraph provided. (c) TOTAL DESTRUCTION OF BUSINESS USE. In the event of a destruction or damage of the leased premises, including the parking area (if a parking area is a part of the subject matter of this Lease), so that Tenant is not able to conduct its business on the premises, and which damages cannot be repaired within sixty (60) days, this Lease may be terminated at the option of either the Landlord or Tenant. Such termination in such event shall be effected by written notice of one party to the other, within twenty (20) days after such destruction. Tenant shall surrender possession within ten (10) days after such notice issues and, each party shall be released from all future obligations hereunder, Tenant paying rental pro rata only to the date of such destruction. 14. CONDEMNATION. (a) DISPOSITION OF AWARDS. Should the whole or any part of the demised premises be condemned or taken by a competent authority for any public or quasi -public use or purpose, each party shall be entitled to retain, as its own property, any award payable to it. Or in the event that a single entire award is made on account of the condemnation, each party will then be entitled to take such proportion of said award as may be fair and reasonable. (b) DATE OF LEASE TERMINATION. If the whole of the demised premises shall be so condemned or taken, Landlord shall not be liable to Tenant except and as its rights are preserved as in paragraph 14(a) above. 15. TERMINATION OF LEASE; DEFAULTS OF TENANT; OTHER REMEDIES. (a) TERMINATION UPON EXPIRATION OR UPON NOTICE OF DEFAULTS. This Lease shall terminate upon expiration of the demised term. Upon default by Tenant in accordance with the terms and provisions of this Lease, or upon Tenant's abandonment of the premises by failure to engage in its usual and customary business activities on the premises for more than fifteen (15) consecutive business days, this Lease may at the option of the Landlord be canceled and forfeited, provided, however, before any such cancellation and forfeiture except as provided in 15(b) below, Landlord shall give Tenant a written notice specifying the default, or defaults, and stating that this Lease will be canceled and forfeited ten (10) days after the giving of such notice, unless such default, or defaults, are remedied within such grace period. As an additional optional procedure or as an alternative to the foregoing (and neither being exclusive of the other), Landlord may proceed as provided in paragraph 22 below. (b) BANKRUPTCY OR INSOLVENCY OF TENANT. In the event Tenant is adjudicated a bankrupt or in the event of a judicial sale or other transfer of Tenant's leasehold interest by reason of any bankruptcy or insolvency proceedings or by other operation of law, but not by death, and such bankruptcy, judicial sale, or transfer has not been vacated or set aside within ten (10) days from the giving of notice thereof by Landlord to Tenant, then and in any such events Landlord may, at its option, immediately terminate this Lease and, upon giving of ten (10) days' written notice by Landlord to Tenant, re-enter said premises, all to the extent permitted by applicable law. (c) OTHER REMEDIES. In addition to any remedies set forth in this Section 15 or otherwise available under applicable law, in the event of a default Landlord may exercise any one or more of the following remedies: (i) Declare due, sue for, and receive from Tenant the sum of all payments and other amounts then due and owing under this Lease, plus the accelerated balance of future payments; (ii) Terminate this Lease; (iii) Collect from Tenant all other amounts due and owing under this Lease; (iv) Charge interest on all sums due hereunder from and after the date of default at the rate of 18% per annum, compounded monthly, until paid in full, but in no event more than the maximum rate permitted by law. In addition, Landlord may use any other remedies available to it under applicable law. (d) In the circumstances described in paragraphs (a)-(c) above, waiver as to any default shall not constitute a waiver of any other or subsequent default, and no delay in exercising any right or remedy shall operate as a waiver of any right or remedy or modify the terms of this Lease. Remedies will be applied cumulatively, to the extent allowed by law. Tenant agrees to pay Landlord all costs and expenses, including attorneys' fees, incurred by Landlord in exercising or attempting to exercise any of its rights or remedies or in defending against 4 the claims of Tenant. If appropriate in the circumstances, remedies will include those available under UCC Article 9. As an additional optional procedure or as an alternative to the foregoing (and neither being exclusive of the other), Landlord may proceed as provided in paragraph 22 below, (e) The parties agree to the jurisdiction and venue of the Iowa District Court for Black Hawk County in any action to construe, interpret, or enforce this Lease. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN ANY WAY RELATED TO THIS LEASE, WHETHER DIRECTLY OR INDIRECTLY. (f) Acceptance of keys, advertising, and re renting by Landlord upon Tenant's default shall be construed only as an effort to mitigate damages by Landlord, and not as an agreement to terminate this Lease. 16. RIGHT OF EITHER PARTY TO MAKE GOOD ANY DEFAULT OF THE OTHER. If default shall be made by either party in the performance of, or compliance with, any of the terms, covenants, or conditions of this Lease, and such default shall have continued for thirty (30) days after written notice thereof from one party to the other, the person aggrieved, in addition to all other remedies now or hereafter provided by law, may, but need not, perform such term, covenant, or condition, or make good such default, and any amount advanced shall be repaid forthwith on demand, together with interest at the rate of 10%u per annum from the date of advance. 17. SIGNS. (a) Tenant shall have the right and privilege of attaching, affixing, painting, or exhibiting signs on the leased premises, provided only (1) that any and all signs shall comply with the ordinances of the municipality in which the property is located and with the laws of the State of Iowa; (2) such signs shall not change the structure of the building; (3) such signs if and when taken down shall not damage the building; and (4) such signs shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld. Tenant's signage upon the premises at commencement of the Lease term is hereby approved by Landlord. (b) Landlord during the last ninety (90) days of this Lease, or extension, shall have the right to maintain in the windows or on the building or on the premises either or both a "For Rent" or "For Sale" sign and Tenant will permit, at such time, prospective tenants or buyers to enter and examine the premises. 18. MECHANIC'S LIENS. Neither Tenant nor anyone claiming by, through, or under Tenant, shall have the right to file or place any mechanic's lien or other lien of any kind or character whatsoever upon said premises or upon any building or improvement thereon, or upon the leasehold interest of Tenant therein, and notice is hereby given that no contractor, subcontractor, or anyone else who may furnish any material, service, or labor for any building, improvements, alteration, repairs or any part thereof, shall at any time be or become entitled to any lien thereon, and for the further security of Landlord, Tenant covenants and agrees to give actual notice thereof in advance to any and all contractors and subcontractors who may furnish or agree to furnish any such material, service, or labor. 19. LANDLORD'S LIEN AND SECURITY INTEREST. Landlord shall have, in addition to the lien given by law, a security interest as provided by the Uniform Commercial Code as codified in the State of Iowa upon all personal property, and all substitutions, replacements, accessories, and accessions thereto and thereof, kept and used on the leased premises by Tenant. Landlord may proceed at law or in equity with any remedy provided by law or by this Lease for the recovery of rent or for termination of this Lease because of Tenant's default in its performance. 20. SUBSTITUTION OF EQUIPMENT, MERCHANDISE. ETC. Tenant shall have the right, from time to time during the term of this Lease, to sell or otherwise dispose of any personal property of Tenant situated on the leased premises, when in the judgment of Tenant it shall have become obsolete, outworn, or unnecessary in connection with the operation of Tenant's business on the leased premises; provided, however, that Tenant shall, in such instance and at its own expense, substitute for such items of personal property so sold or otherwise disposed of, a new or other item in substitution thereof, in like or greater value and adopted to the affixed operation of the business upon the leased premises (unless no substituted article or item is necessary), 21. OTHER PROVISIONS. N/A. 22. RIGHTS CUMULATIVE. The various rights, powers, options, elections, and remedies of either party as provided in this Lease shall be construed as cumulative and no one of them as exclusive of the others or exclusive 5 of any rights, remedies, or priorities allowed either party by law, and shall in no way affect or impair the right of either party to pursue any other equitable or legal remedy to which either party may be entitled as long as any default remains in any way unremedied, unsatisfied, or undischarged. 23. NOTICES AND DEMANDS. Notices as provided for in this Lease shall be given to the respective parties hereto at the respective addresses designated on page one of this Lease unless either party notifies the other, in writing, of a different address. Without prejudice to any other method of notifying a party in writing or making a demand or other communication, such message shall be considered given under the terms of this Lease when sent, addressed as above designated, postage prepaid, by registered or certified mail, return receipt requested, by the United States mail and so deposited in a United States mail box. 24. BINDING EFFECT. Each and every covenant and agreement herein contained shall extend to and be binding upon the respective heirs, personal representatives, successors, and assigns of the parties hereto; except that if any part of this Lease is held in joint tenancy, the successor in interest shall be the surviving joint tenant. 25. CHANGES TO BE IN WRITING. None of the covenants, provisions, terms, or conditions of this Lease to be kept or performed by Landlord or Tenant shall be in any manner modified, waived, or abandoned, except by a written instrument duly signed by the parties and delivered to the Landlord and Tenant. This Lease contains the entire agreement of the parties and supersedes any and all discussions, negotiations, understandings, or agreements pertaining to the subject matter hereof. 26. CONSTRUCTION. Words and phrases herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine, feminine, or neuter, according to the context. IN WITNESS WHEREOF, the parties hereto have duly executed this Business Property Lease as of the date first written above. LANDLORD TENANT City of Waterloo, Iowa Crystal Distribution Services, Inc. Querduz By: By: Quentin Hart, Mayor KerCey Eerchre Attest: Kelley Felchle, City Clerk 6 Th.mas J. Po- resident EXHIBIT "A" Legal Description Parcel "I" of Plat of Survey Doc. #2022-4295, being a part of: Lot 2, "Cowin's Subdivision in Riverside Addition to Waterloo, Iowa"; AND vacated Elm Street and Block 5, Riverside Addition to the City of Waterloo, Black Hawk County, Iowa; AND the Beltline R.R. Switch lying between Blocks 5 and 9, Riverside Addition to the City of Waterloo, Black Hawk County, Iowa; AND vacated Division Street and Block 2, "Morning Side Addition" in Waterloo, Iowa. 7