MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is made this ____ day of _________, 2016, by and between the City of Lawrence, Kansas, a municipal corporation, and HERE Kansas Property Owner, LLC, a Delaware limited liability company, or its assigns.
RECITALS
A. The City of Lawrence, Kansas, is a municipal corporation ("City"), and, inter alia, has the authority under the Kansas Neighborhood Revitalization Action of 1994, codified as amended at K.S.A. 12-17,115 et seq. (“NRA”), to grant certain incentives for the redevelopment of certain areas and also has the authority to use, control, and maintain the Rights of Way of the City.
B. HERE Kansas Property Owner, LLC, a Delaware limited liability company, or its successors or assigns, ("HERE"), owns that real property, located in Lawrence, Douglas County, Kansas, and commonly known as 1101 and 1115 Indiana Street (the "HERE Property")(The legal description of the HERE property is affixed hereto as Exhibit A and is incorporated herein by reference).
C. On August 5, 2014, the City passed Ordinance No. 9021, which ordinance designated the HERE Property as a Neighborhood Revitalization Area and approved the Neighborhood Revitalization Plan establishing HERE’s plan for redeveloping the HERE Property.
D. Consistent with Ordinance No. 9021, on August 6, 2014, the City and HERE entered into a Neighborhood Revitalization Act Cooperative Agreement and on August 12, 2014, entered into a Neighborhood Revitalization Act Performance Agreement, which documents established the rights and obligations of the parties regarding the redevelopment of the HERE Property under the NRA.
E. On December 9, 2014, the City, HERE, and Kansas University entered into a Development and License Agreement, whereby, inter alia, in exchange for the improvement and maintenance of certain parking and sidewalks within the City’s Rights of Way on Mississippi Street and Indiana Street, which Rights of Way are adjacent to the HERE Property, HERE was granted certain rights and privileges.
F. On July 1, 2015, after the City Commission had approved the elevations of the proposed redevelopment of the HERE Property, the City, consistent with terms of the City Code, administratively approved the Final Development Plan, which Final Development Plan provided, inter alia, for the interior warehousing of enough automobiles for the entire residential occupancy of the HERE mixed-use redevelopment by way of an automated, robotic parking system.
G. On September 9, 2015, the City and HERE entered into a Cost-sharing Agreement, whereby the parties agreed, subject to the terms of that agreement, to share certain costs regarding the reconstruction of certain portions of the City’s Rights of Way on Mississippi Street and 11th Street, both of which are adjacent to the HERE Property, and to the relocation of certain City infrastructure located within those Rights of Way.
H. On December 21, 2015, HERE filed an application to revise the approved Final Development Plan, seeking to replace the automated, robotic parking system (the company supplying the system in the interim had filed for bankruptcy) with a valet parking system, which would reduce the number of automobiles it could park in its interior warehouse, would require recirculation of automobiles on Mississippi Street, and would require access to the second floor of the warehouse area from 11th Street.
I. On the same date noted above, the City and HERE entered into a Revised Cost-sharing Agreement, whereby the parties modified certain terms of their original Cost-sharing Agreement.
J. In the event that the City approves HERE’s application to revise the approved Final Development Plan, the City and HERE enter into this Memorandum of Understanding restating and clarifying certain rights and obligations of the parties as set forth in the various agreements noted above.
TERMS
NOW THEREFORE, in light of the mutual promises and obligations contained herein, and in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the parties agree as follows:
1. Valet Parking System. HERE shall have operational on the HERE Property a twenty-four-hours-a-day seven-days-a-week valet parking system for as long as the mixed-use redevelopment of the HERE Property shall include a residential component, or until HERE provides a sufficient number of self-parking spaces, on-site and/or off-site in compliance with the City Code, accommodating a sufficient number of automobiles that would permit full occupancy of the mixed-use redevelopment of the HERE Property under the City Code.
2. Valet Parking System Escrow Fund. Prior to occupancy, HERE shall deposit with the City the sum of $50,000.00, which sum shall be held in escrow by the City. In the event that HERE fails to provide valet parking service in accordance with paragraph 1, supra, and does not provide such valet parking service for a period of seventy-two (72) hours, then the City shall be entitled to transfer the sum $5,000.00 per day, as liquidated damages hereunder, to the Affordable Housing Trust Fund, or to a similar fund of the City’s choosing. If the escrow fund is depleted and HERE, its successors or assigns, still fails to provide a valet parking system, then HERE shall immediately reduce its occupancy to the number of occupants that would be permitted by the City Code for the number of automobiles it can provide self-parking for on-site or off-site in accordance with the City Code. If the balance of the escrow dips below $50,000.00, but is not depleted, HERE, its successors or assigns, shall, within seven days after resuming its valet parking system, deposit sufficient funds with the City to bring the Valet Parking Escrow Fund to $50,000.00.
3. Valet Parking System Complies with the NRA. To the extent that HERE, its successors and assigns, complies with paragraphs 1 and 2, supra, the parties acknowledge that a valet parking system complies substantially with the parties’ Neighborhood Revitalization Act Performance Agreement and the Final Development Plan, both of which specifically contemplate the use of an automated, robotic parking system.
4. Residential Parking. The parties acknowledge that, even with the valet parking system, HERE is unable to provide sufficient warehousing or self-parking spaces to accommodate a sufficient number of automobiles under the City Code to sustain full occupancy of the mixed-use redevelopment of the HERE Property. Accordingly, HERE shall only be entitled to the residential occupancy permitted by the City Code for the number of automobiles that it can warehouse within its interior and the number of on-site and off-site self-parking spaces that it can provide in compliance with the City Code. HERE shall endeavor to develop and to implement a plan to provide additional warehousing and/or self-parking spaces for the full number of automobiles required by the City Code to bring its mixed-use redevelopment of the HERE Property to full occupancy. Said plan shall be submitted to the City no later than July 31, 2016.
5. Substantial Completion and Parking. The Neighborhood Revitalization Act Performance Agreement provides that HERE shall not be entitled to receive any incentive under that agreement or the NRA until such time as it substantially completes construction. The parties acknowledge and understand that the term “substantially complete” shall mean that construction is 90% completed and HERE has provided, within its interior warehouse and/or on-site and off-site self-parking that meets City Code, for 100% occupancy of the residential and commercial components of the mixed-use redevelopment of the HERE Property. HERE acknowledges and agrees that it shall not be entitled to receive any incentive under the Neighborhood Revitalization Act Performance Agreement or the NRA until the January following the time that it achieves approval by the City for 100% occupancy of the residential and commercial components of the mixed-use redevelopment of the HERE Property. Nothing in this Memorandum of Understanding shall be construed to extend the term of the NRA.
6. No Access from 11th Street or Recirculation on Mississippi Street. Despite that which was provided in the original proposed revised Final Development Plan, HERE shall not be permitted to access the mixed-use redevelopment of the HERE Property from 11th Street. Access to the second-floor of the automobile warehouse, shall be limited to the interior of the mixed-use structure. Additionally, HERE shall not recirculate automobiles on Mississippi Street for relocation in its warehouse. It shall maintain a configuration of its valet parking system such that recirculation on Mississippi Street shall not be necessary to move automobiles from the drop-off area to its warehouse area.
7. Parking on Mississippi Street and Indiana Street. All parking on Mississippi Street and Indiana Street shall be allocated toward fulfilling the parking requirements of the City Code for the commercial component of the mixed-use redevelopment of the HERE Property. Only in the event that the number of automobiles that can be accommodated by the parking spaces on Mississippi Street and Indiana Street exceed the requirements of the City Code for the commercial component of the mixed-use redevelopment of the City Code, shall HERE be permitted to allocate any of the parking on Mississippi Street or Indiana Street toward the fulfilling the parking requirements of the City Code for the residential component of the mixed-use redevelopment of the HERE Property.
8. Parking Fees on Mississippi Street and Indiana Street; Donation to Affordable Housing Trust Fund. The Development and License Agreement, dated December 9, 2014, provides that, for the purposes of constructing and maintaining the parking areas on Mississippi Street and Indiana Street, HERE shall retain all parking fees generated by that parking area. HERE hereby agrees to donate the sum of $100,000.00 per year to the City’s Affordable Housing Trust Fund, or to some other similar fund of the City’s choosing, for the term of the Development and License Agreement. Said donations shall commence on July 1, 2017, and shall be made to the City on each subsequent July 1 thereafter for as long as the Development and License Agreement or this Memorandum of Understanding remains in effect.
9. Incentives. HERE acknowledges and agrees that, in addition to providing sufficient parking as required in paragraph 5, supra, it shall not be entitled to receive any incentives under the Neighborhood Revitalization Act Performance Agreement or the NRA until such time as it complies will all terms and conditions of this Memorandum of Understanding. Also, HERE acknowledges and agrees that, in the event that it is in compliance with terms of this Memorandum of Understanding and then should fall out of compliance, then the aforementioned incentives shall be suspended until HERE again achieves full compliance. Again, nothing in this Memorandum of Understanding shall be construed to extend the term of the NRA.
10. Term. This Memorandum of Understanding shall run concurrent with the parties’ Development and License Agreement, dated December 9, 2014. Those terms related to the incentive shall run concurrent with the NRA and shall not be construed to extend the term of the NRA.
11. Authorization. Each of the persons executing this Memorandum of Understanding, in behalf of their respective parties, represent and warrant that they have the authority to bind the party in behalf of whom they have executed this Memorandum of Understanding, and that all acts requisite to the authorization to enter into and to execute this Memorandum of Understanding have been taken and completed.
12. Binding Effect. This Memorandum of Understanding shall, at all times, be binding upon the City and HERE, and all parties claiming by, through, or under them, and shall run with the land, and shall be for the benefit of and shall oblige all future owners of the HERE Property; provided, however, that the rights, duties, and obligations of the parties, as set forth herein, shall cease with the termination of his, her, or its ownership of their respective property, or portion thereof, except for those duties and obligations arising during the period of his, her, or its ownership. HERE may assign any rights or obligations under this Memorandum of Understanding to any third-party upon the written approval of the City, which approval shall not be unreasonably withheld, and upon such assignment shall be fully released from any obligations hereunder that may arise after the effective date of any such assignment, unless any proposed assignee assumes this Memorandum of Understanding, at which point HERE shall be irrevocably released for all obligations hereunder whether arising before or after the assignment.
13. Indemnification. During the time that this Memorandum of Understanding is in effect, the parties agree to indemnify, defend, save, and hold harmless the other party, including the other party's officers, commissioners, agents, employees, grantees, and assigns, from and against all claims, actions, liabilities, damages, costs, expenses, and judgments, including attorneys’ fees, which relate to, arise out of, or are in any way related to the redevelopment of the HERE Property.
14. Severability. If any section, sentence, clause, or phrase of this Memorandum of Understanding is found to be invalid by any court of competent jurisdiction, it shall not affect the validity of any remaining provision of this Memorandum of Understanding.
15. Governing Law. This Memorandum of Understanding shall be construed and enforced in accordance with and shall be governed by the laws of the State of Kansas.
16. Adoption of Recitals. The above-stated recitals are incorporated herein by reference, are hereby made a part of this Memorandum of Understanding, and shall be as effective as if repeated verbatim.
17. Entire Agreement. This Memorandum of Understanding represents the entire agreement between the City and HERE and supersedes all prior negotiations, representations, or agreements, either written or oral. This Memorandum of Understanding may be amended only by written instrument signed by both the City and HERE
[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
IN WITNESS WHEREOF, the City and HERE have executed this Memorandum of Understanding with the full intent to bind themselves and their successors and assigns.
CITY:
CITY OF LAWRENCE, KANSAS, a municipal corporation
________________________________
THOMAS M. MARKUS
City Manager
ACKNOWLEDGMENT
THE STATE OF KANSAS )
) ss:
THE COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this ____ day of _________________, 2016, before me the undersigned, a notary public in and for the County and State aforesaid, came Thomas M. Markus, as City Manager of the City of Lawrence, Kansas, who is personally known to me to be the same person who executed this instrument in writing, and said person fully acknowledged this instrument to be the act and deed of the aforementioned entity.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last written above.
________________________________
Notary Public
My Appointment Expires:
HERE:
HERE KANSAS PROPERTY OWNER, LLC, a Delaware limited liability company
________________________________
JAMES LETCHINGER
Manager
ACKNOWLEDGMENT
THE STATE OF ILLINOIS )
) ss:
THE COUNTY OF COOK )
BE IT REMEMBERED, that on this ____ day of _________________, 2016, before me the undersigned, a notary public in and for the County and State aforesaid, came James Letchinger, as Manager of HERE Kansas Property Owner, LLC, a Delaware limited liability company, who is personally known to me to be the same person who executed this instrument in writing, and said person fully acknowledged this instrument to be the act and deed of the aforementioned entity.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last written above.
________________________________
Notary Public
My Appointment Expires: