BMPC SOUTH Agreement
addendum
THIS BMPC SOUTH Agreement ADDENDUM (this “Addendum”) is entered into this ____ day of December 2010, by and between the City of Lawrence, a municipal corporation (hereinafter the “City”) and The Bowersock Mills & Power Company (which is one and the same company as “The Bowersock Mills and Power Company” and “Bowersock Mills and Power Company”), a Kansas corporation (hereinafter “Bowersock”).
WHEREAS, by that certain agreement titled “Agreement” and dated April 5, 1977 (hereinafter the “Base Agreement”), the City granted Bowersock a ground lease to occupy, possess and use, for a period of 50 years, certain land used in connection with the operation of a hydroelectric power plant, including a maintenance shop building, together with turbines, generators, and all other improvements, fixtures, machinery, and equipment used in connection with the power plant, with Bowersock retaining ownership of buildings, turbines, generators, and all other improvements, fixtures, machinery, and equipment (the power plant and other property of Bowersock retained ownership being hereinafter collectively the “BMPC South”); and
WHEREAS, the Base Agreement provides that the dam spanning the Kansas River just east of and generally parallel with the Massachusetts Street bridge, commonly known and referred to as the Bowersock Dam (hereinafter the “Dam”), remains owned by Bowersock, and outlines the rights and obligations of the City and Bowersock with respect to the operation and maintenance of the Dam during the term of the ground lease and Bowersock’s use and occupancy of the South Property; and
WHEREAS, in the Base Agreement, the City also granted to Kansas Fibreboard, Inc., a Kansas corporation, and to Justin D. Hill, Sr. and Stephen Higdon Hill, a ground lease to occupy, possess and use, for a period of 30 years, certain land under the building known as Bowersock Warehouse-Building 1A; and
WHEREAS, the rights of Kansas Fibreboard, Inc. and Justin D. Hill, Sr. and Stephen Higdon Hill were succeeded to by Bowersock, pursuant to assignments of all rights under the Base Agreement, which assignments the City approved by that certain agreement titled “Extension Agreement” and dated November 21, 2000 (hereinafter the “Extension Agreement”); and
WHEREAS, in the Extension Agreement, the term of the ground lease for possession and occupancy of the land originally leased to Kansas Fibreboard, Inc. was extended from an original term of 30 years to 50 years, to correspond with the term of Bowersock’s ground lease to occupy, possess and use the land pursuant to the Base Agreement; and
WHEREAS, to facilitate the construction of the Lawrence Riverfront Mall, Bowersock subsequently relinquished its rights with respect to some of the land encumbered by the Base Agreement; and
WHEREAS, by that certain agreement titled, “Ground Lease” and dated November 11, 2002 (the “2002 Agreement”), the City and Bowersock entered into a lease pursuant to which Bowersock was given the right to occupy, possess and use, for a period expiring November 11, 2027, certain land more particularly described in said 2002 Agreement, for driveway purposes; and
WHEREAS, by that certain agreement titled, “Extension and Modification Agreement” and dated August 29, 2009 (hereinafter the “Extension and Modification Agreement”), the City and Bowersock amended the Base Agreement, as previously extended by the Extension Agreement, to refine and clarify their respective rights and obligations with respect to maintenance of the Dam and to extend the period for Bowersock’s use, occupancy, and possession of the property subject to the Base Agreement and the 2002 Agreement an additional 50 years to April 5, 2077; and
WHEREAS, Bowersock has obtained Special Use Permit No. SUP-3-4-10 (approved by Ordinance No. 8529) to construct, maintain, and operate a hydroelectric powerhouse (“BMPC North”) on the north bank of the Kansas River immediately east of the Kansas River Bridge, at a site commonly known as 250 North Powerhouse Road in the City of Lawrence, County of Douglas, Kansas; and
WHEREAS, by that certain agreement titled “BMPC South Agreement” and dated November 24, 2010 (hereinafter the “BMPC South Agreement”), the City and Bowersock clarified and expanded the legal description of the real estate on the south bank of the Kansas River that is subject to the Base Agreement, the Extension Agreement, the 2002 Agreement, and the Extension and Modification Agreement to include the land legally described on Exhibit A, attached hereto and incorporated herein by reference (hereinafter the “Leased Premises”).
WHEREAS, the City and Bowersock enter into this Addendum to provide Bowersock with an option to extend all of the agreements referenced in the preceding paragraph (collectively the “Existing Agreements”) beyond their current expiration dates of April 5, 2077.
NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements contained herein, the parties to this Addendum agree as follows:
1. Renewal Periods. Bowersock shall have 6 successive options to renew and extend the Existing Agreements from the date upon which they would otherwise expire, for separate renewal periods of 10 years each (each a “Renewal Period”) (a total possible extension of 60 years), with the first 10-year Renewal Period to commence on the day after the current expiration date of the Existing Agreements. If Bowersock elects to exercise any one of said 10-year options, it shall do so by giving notice of such election to City. If Bowersock elects to exercise any one of said options to renew, the term shall be automatically extended for the 10-year Renewal Period covered by the option so exercised. The terms and conditions of any Renewal Period shall be upon the same terms and conditions as are in effect hereunder immediately preceding the commencement of such Renewal Period, except that the fixed rent for the Renewal Period shall be as provided in Section 2. The right of renewal under this Section may be assigned or otherwise transferred as collateral security in connection with any leasehold mortgage.
2. Renewal Rental Rate. If Bowersock exercises any option under Section 1 to extend the term of the Existing Agreements, the annual rent during any applicable Renewal Period shall be the fair market rental rate of the Leased Premises, considered without the benefit or burden of any of the Existing Agreements or any of Bowersock’s improvements installed or constructed on or adjacent to the Leased Premises, valued consistent with the highest and best use of the Leased Premises as of the first day of the applicable Renewal Period. To determine the fair market rental value, each party shall designate an appraiser who shall be a member of the American Institute of Real Estate Appraisers (or any successor association or body of comparable standing if such institution is not then in existence) and shall have been actively engaged in the appraisal of real estate situated in the vicinity of the Leased Premises for a period of not less than 5 years immediately preceding his appointment. If the two appraisers agree upon the fair market rental rate of the Leased Premises, that amount shall govern. If the two appraisers cannot agree, their appraisals shall be averaged and that average amount shall govern. The annual rent for the first year of each Renewal Period shall be paid in one lump sum on the first day of the Renewal Period or the date the annual rent for the Renewal Period is finally calculated, whichever is later. The annual rent for each subsequent year of each Renewal Period shall be paid in one lump sum on the anniversary of the Renewal Period.
3. Reaffirmation. Provisions in the Existing Agreements contrary to the provisions of this Addendum are amended and superseded. Except as amended by this Addendum, the Existing Agreements are reaffirmed.
4. Counterparts. This Addendum may be executed in any number of counterparts (delivered by U.S. mail, fax, overnight delivery service or electronic mail), each of which shall be deemed to be an original and all such counterparts taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, this Addendum is executed by the parties on dates set forth below, effective as of the date first above written.
CITY:
City of Lawrence, Kansas,
a municipal corporation
By: __________________
David L. Corliss, City Manager
BOWERSOCK:
The Bowersock Mills & Power Company, a Kansas corporation
By:
Stephen H. Hill, President
ACKNOWLEDGEMENT
STATE OF KANSAS )
) ss
COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this _____ day of December 2010, before me, the undersigned, a Notary Public in and for the County and State aforesaid came David L. Corliss, City Manager of the City of Lawrence, Kansas, a municipal corporation, who is personally known to me to be the same person who executed the within and foregoing instrument of writing, and duly acknowledged the execution of the same to be the free act and deed of such city.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
Notary Public
My Commission Expires:
ACKNOWLEDGEMENT
STATE OF KANSAS )
) ss
COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this ______ day of December 2010, before me, the undersigned, a Notary Public in and for the County and State aforesaid, came Stephen H. Hill, President of The Bowersock Mills & Power Company, a Kansas corporation, who is personally known to me to be the same person who executed the foregoing instrument of writing, and such person duly acknowledged the execution of the same to be the free act and deed of such company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above mentioned.
Notary Public
My Commission Expires:
Exhibit A
[Legal Description of Land on South Bank of Kansas River]
All that part of the Southwest Quarter of Section 30, Township 12 South, Range 20 East, in the City of Lawrence, Douglas County, Kansas, described as follows:
COMMENCING at the Southeast corner of Lot 2, Block 1, The World Company Addition No.1, a subdivision in the City of Lawrence, Douglas County, Kansas, said point further described as the point of intersection of the North right of way line of 7th Street and the West right of way line of New Hampshire Street; thence North 1 degree 49 minutes 33 seconds West along the West right of way line of New Hampshire Street and its Northerly prolongation a distance of 805.79 feet to a point on the South line of a lease description as filed in Book 428 at Page 822, said point also lying on the North right of way line of the Atchison, Topeka and Santa Fe Railroad as established by Case No. CV31910B; thence North 77 degrees 27 minutes 00 seconds West along the North right of way line of said Railroad and the South line of said Lease as filed in Book 428 at Page 822, a distance of 31.78 feet to the Southwest corner of said Lease, the POINT OF BEGINNING; thence continuing North 77 degrees 27 minutes 00 seconds West along the North right of way line of said Railroad a distance of 299.96 feet to a point; thence North 7 degrees 26 minutes 30 seconds East a distance of 61.11 feet to a point on the North line of Tract A, Survey Record No. 4317; thence South 75 degrees 22 minutes 45 seconds East along the North line of said Tract A, a distance of 52.64 feet to a point; thence South 80 degrees 14 minutes 56 seconds East along the North line of said Tract A, a distance of 139.78 feet to the Northeast corner thereof; thence South 77 degrees 37 minutes 26 seconds East a distance of 113.03 feet to a point on the West line of said Lease as filed in Book 428 at Page 822; thence South 12 degrees 25 minutes 11 seconds West along the West line of said Lease as filed in Book 428 at Page 822 a distance of 66.13 feet to the POINT OF BEGINNING and containing 19,155 Square Feet or 0.440 Acres, more or less; EXCEPT AND EXCLUDING any portion of the stairway on the western end of the foregoing land that leads to the deck of the Kansas River Bridge.