LEASE AGREEMENT
THIS LEASE AGREEMENT is made this ____ day of _________, 2017, by and between the City of Lawrence, Kansas, a municipal corporation, and Kansas Golf Association, a Kansas not-for-profit corporation.
RECITALS
A. The City of Lawrence, Kansas ("City"), a municipal corporation, owns and operates a municipal golf course known as Eagle Bend Golf Course, located at 1250 East 902 Road, Lawrence, Douglas County, Kansas.
B. On the premises of Eagle Bend Golf Course, the City operates a Golf Pro Shop and a Golf Cart Storage Facility, which, through the approval of a phased capital improvement project, the City intends to renovate, adding event space, changing areas and restrooms, storage space, and office space and to build a new, larger Golf Cart Storage Facility.
C. Kansas Golf Association (“KGA”), a Kansas not-for-profit corporation, has, since 1908, governed amateur golf in the state of Kansas. Among other things, KGA conducts championship tournaments for amateur golfers, administers the Kansas Junior Golf Association and KGA Senior Series programs, maintains the United States Golf Association (“USGA”) Handicap system, performs course ratings, and provides golf-related programs and scholarships within the state of Kansas.
D. KGA wishes to lease from the City approximately 1,300 square feet of office space at the renovated Eagle Bend Golf Course Golf Cart Storage Facility for the purposes of relocating its offices.
E. KGA also wishes to use space within the renovated Golf Pro Shop for the display of exhibits and memorabilia related to Kansas golf history.
F. The City wishes to lease to KGA approximately 1,300 square feet of office space at the renovated Eagle Bend Golf Course Golf Cart Storage Facility for the purposes of administering its programs and to let KGA use additional space in the Eagle Bend Golf Course Pro Shop for the display of exhibits and memorabilia related to Kansas golf history, subject to KGA's execution of this Lease Agreement (“Lease”) and compliance with its 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 the City and KGA, the City and KGA agree as follows:
TERMS
1. Lease of Space. The City hereby agrees that, in exchange for the payment of Rent and the giving of other good and valuable consideration, as described in Sections 3 and 7, infra, it will to lease to KGA approximately 1,300 square feet of office space (“Leased Space”) within the renovated Eagle Bend Golf Course Golf Cart Storage Facility (“Cart Barn”) for its exclusive use as offices for the purpose of administering its programs. The Leased Space shall be designed to include three (3) executive offices, a large workroom that would accommodate three (3) workstations, a storage room, a private bathroom, a break room with sink and refrigerator, private access and security, “backdoor” access for event gear loading, and segregated storage for KGA’s event gear. The preliminary footprint of the Leased Space is affixed hereto as “Exhibit A.” In the event that the City intends to change the footprint of the Leased Space prior to occupancy of KGA, the parties agree to meet and to confer regarding those changes.
2. Additional Space. The City also agrees that, for good and valuable consideration received herein, but as an accommodation to KGA and without the requirement of the payment of Rent, it will let KGA use space (“Let Space”) within the Eagle Bend Golf Course Pro Shop for the display of exhibits and memorabilia related to Kansas golf history.
3. Rent.
(a) In consideration for the Leased Space and other good and valuable consideration, as described in Section 6, infra, KGA shall pay to the City, on a monthly basis, as Rent, the sum of TWO THOUSAND FIVE HUNDRED DOLLARS AND NO CENTS ($2,500.00).
(b) Rent shall be payable to the City in monthly installments, due on the first day of each month during the Term of this Lease. Rent payments shall be made payable to the City of Lawrence, Kansas, and shall be delivered to the City of Lawrence, Kansas, Parks and Recreation Department, Office of the Director. For rent payments that are not received until after the 15th day of the month, KGA shall be assessed a late fee of $250.00.
4. Term of the Lease.
(a) The Initial Term of this Lease shall be five (5) years, commencing on the first day of the month following the completion of the renovated Cart Barn and KGA’s occupancy of the Leased Space (“Commencement Date”) and terminating at 11:59 p.m. five years thereafter, unless this Lease is otherwise terminated earlier.
(b) The parties intend that the Leased Space shall be completed and ready for occupancy prior to January 31, 2018. The City will use reasonable efforts to complete the construction of the Leased Space so that the Leased Space shall be ready for occupancy prior to January 31, 2018. If the Leased Space is completed and ready for occupancy prior to January 31, 2018, the parties agree that KGA may commence occupancy at that time.
(c) In the event of a material adverse change to KGA’s business, as a result of loss of revenue from the operation of the USGA Handicap system for the State of Kansas by reason of changes to policies or procedures of the USGA, KGA shall have the right to terminate this Lease by giving 180-days’ written notice to the City.
5. Option Terms. KGA shall have the option to extend the Initial Term of this Lease for four (4) additional and successive five-year terms (individually, “the Option Term” and, collectively, “the Option Terms”). The Lease shall, at the end of the Initial Term or any Option Term, unless it is the fourth Option Term, automatically be extended an additional Option Term, unless either party notifies the other of its intent to terminate or to renegotiate this Lease at least one hundred eighty (180) days prior to the termination of the then-current Term. Option Terms shall be deemed a continuation of this Lease and shall not be considered a new Lease or an amendment hereto.
6. The City's Covenants. In addition to granting to KGA the Leased Space and the Let Space at the Cart Barn, the City agrees to the following:
(a) The City will afford KGA the opportunity to be actively involved in the architectural design of the Leased Space.
(b) The City will afford KGA the opportunity to be actively involved in the architectural design of the Let Space.
(c) Before making any major repairs or schedule changes at Eagle Bend Golf Course or the Cart Barn, the City agrees to inform KGA of such proposed action.
(d) The City will pay all utility costs for the Cart Barn, including all ordinary utility costs for the Leased Space, including water, sewage, trash removal, electricity, gas, and all other utilities serving the Cart Barn and the Leased Space. If the City believes that the utility costs for the Leased Space are extraordinary or unreasonable, the parties shall meet to discuss separately metering the Leased Space for utilities, which shall be the City’s sole remedy in such an event.
(e) The City will pay all taxes related to the Cart Barn. For the purposes herein, taxes shall mean all taxes, impositions, assessments, and all other governmental charges, if any, which are levied, assessed, or imposed upon or which become due and payable in connection with the Cart Barn during the term of this Lease.
(f) The City shall at its sole cost and expense, unless otherwise provided herein, keep and maintain in good condition and repair, the foundation, roof, exterior walls, plumbing, HVAC system, pipes and conduits, and other systems of the Cart Barn that serve the Leased Space (excluding those systems where such obligation is the duty of a utility provider). The City shall also repair any damage to the foregoing caused by the negligence, recklessness, or willful misconduct of KGA, but shall be entitled to indemnification from KGA for the costs of said repair.
(g) KGA staff and KGA visitors shall have free right and license for non-exclusive access and use of the Eagle Bend Golf Course parking lot.
7. KGA's Covenants. In addition to paying Rent to the City for the Leased Space, KGA agrees to the following:
(a) KGA, shall take good care of the interior of the Leased Space, shall at all times keep the Leased Space in a clean and sanitary condition, and will not commit or permit or suffer to be done any waste, damages, disfigurement, vandalism, destruction, fire, or injury to the Leased Space or the Pro Shop. KGA shall be responsible for procuring its own janitorial services in the Leased Space. KGA shall also be responsible for any routine repairs or maintenance to the interior of the Leased Space.
(b) KGA shall take good care, shall, at its own cost and expense, maintain the displays of exhibits and memorabilia related to Kansas golf history that will be located within the Let Space, shall at all times keep the displays of exhibits and memorabilia related to Kansas golf history in a clean and sanitary condition, and will not commit or permit or suffer to be done any waste, damages, disfigurement, vandalism, destruction, fire, or injury to the displays of exhibits and memorabilia related to Kansas golf history or the Eagle Bend Golf Course Pro Shop. KGA shall also be responsible for any routine repairs or maintenance of the displays of exhibits and memorabilia related to Kansas golf history.
(c) KGA may create, purchase, install, and maintain appropriate exterior signage, advertising its location, provided that such signage complies with City Code and is approved in advance by the City. KGA agrees that the City shall have the right to approve the type and location of any such signage.
(d) Provided that (i) the fees for using the Eagle Bend Golf Course are reasonable and competitive with other similarly-situated golf courses, (ii) the Eagle Bend Golf Course is available to host the events at required dates and times, and (iii) the condition of the Eagle Bend Golf Course is acceptable for competitive events, KGA agrees to conduct a minimum number of golf competitions at the Eagle Bend Golf Course annually. At a minimum, those events will include, but not be limited to: The Kansas Four-Ball (two days), a Kansas Junior Section Event (1 day), a KGA Senior Series event (1 day), and the Last Chance Qualifier for the Kansas Amateur (1 day). Other possible competitions might include, but not be limited to USGA qualifiers, events sanctioned by Heartland Golf, and other KGA multi-day championships.
(e) KGA also agrees to work with City Staff at Eagle Bend Golf Course to plan and administer programs intended to “grow the game” by attracting more golfers, specifically juniors, women, and seniors, to the Eagle Bend Golf Course.
8. Use. KGA may use the Leased Space for office and related uses related the administration of its programs. KGA may use the Let Space for the creation, location, and maintenance of displays of exhibits and memorabilia related to Kansas golf history.
9. Fixtures. Subject to the City's prior approval, KGA may install such equipment and business and trade fixtures, as it deems necessary, and such items shall remain the property of KGA and shall be removed by KGA prior to the termination of this Lease. KGA shall repair any damage occasioned by removal.
10. Default. If either the City or KGA fails to perform or observe any material term, covenant, provision, or condition of this Lease, then that party will be in default under this Lease. In the case of default, the other party shall send to the party in default a Notice of Default.
11. Right to Cure. From the date of written Notice of Default from the other party, the party in default shall have thirty (30) days to cure any default. If the City defaults on any obligation hereunder, KGA may, at its option, cure the City's default and the City shall thereafter, upon written demand of KGA, be responsible to KGA for the payment of any costs of such cure.
12. Failure to Cure. If the party in default fails to cure the default in the time prescribed by Section 11, supra, then the other party shall have the right to terminate this Lease and may, at its discretion, pursue any other remedies that may be available to it at law or in equity and not otherwise proscribed by the terms of this Lease. If KGA terminates this Lease for City’s failure to cure a default, City shall refund to KGA a pro-rated portion of the rental payment paid by KGA for the month in which the default occurs.
13. Termination and Removal of Lessee’s Property. Upon the expiration or termination of this Lease, KGA shall quit and surrender the Leased Space to the City. All improvements constructed by KGA shall be and become part of the property of the City, except usual trade fixtures installed by KGA in accordance with Section 9, supra, that are not so affixed to the Leased Space as to damage the Leased Space upon removal.
14. Force Majeure.
(a) A “Force Majeure Event” is any event or cause beyond the reasonable control of the party claiming relief, including any action by or omission of a governmental agency or authority (including any government-imposed moratorium on activities related to this Lease or any subsequent change in government rules, regulations, codes, ordinances, or laws), material shortages, third-party labor disputes, epidemic, war, riot, civil disturbance, act of public enemy or enemies, terrorist act, sabotage, any act of God, or any damage as a result of fire, floods, earthquakes, lightning, or other casualty.
(b) Neither the City nor KGA will be considered in default under this Lease if such party’s performance is delayed by virtue of a Force Majeure Event. Upon the occurrence of such event, the parties agree to confer in good faith and to agree upon an equitable, reasonable action to continue performance under this Lease, provided, however, that the rent payable by KGA to the City shall abate for any period during which KGA's use of the Leased Space is limited as a result of a Force Majeure Event. The City and KGA will use commercially reasonable efforts to minimize the delay caused by any Force Majeure Event and to resume affected performance when reasonably possible. The City will be solely responsible for all repairs and reconstruction -- which repairs and construction will be at its discretion -- of the Pro Shop and the Leased Space following a Force Majeure Event.
(c) In the event that a Force Majeure Event prevents either party from performing under the Lease for a period of 180 days, then either party, upon written notice to the other, may terminate this Lease. In such event, the City shall pay to KGA a pro-rated share of the Rent paid by KGA for the month in which the Force Majeure Event occurred. Upon such termination and the refund of any Rent, if any, all parties will be relieved of performance under this Lease, except that a party will continue to be liable for any breaches that occurred and were not cured prior to termination.
15. Subordination. This Lease shall be subject to and subordinate to any mortgage or deed of trust ("Mortgage") now or at any time hereafter constituting a lien or charge upon the Leased Space or the Pro Shop. KGA shall, at any time hereafter, on demand, execute any instruments, releases, or other documents that may be required by any mortgagee for the purpose of subjecting and subordinating this Lease to the lien of any such Mortgage; provided that the City shall use commercially reasonable efforts to obtain from the holder of the Mortgage a nondisturbance agreement.
16. Insurance.
(a) KGA agrees to procure and maintain, at its sole costs and expense, from responsible companies authorized to do business in the State of Kansas the following insurance: (i) Commercial General Liability, including coverage for (A) premises/operations, (B) products/completed operations, (C) personal and advertising injury, and (D) contractual liability, with a combined single limit of not less than $500,000.00 each occurrence or the equivalent; and (ii) Workers’ Compensation in amounts required by applicable law.
(b) KGA shall, as a material condition of this Lease, prior to occupancy, deliver to the City Clerk a certificate or certificates of insurance that the above insurance is in force, that the City has been named as an additional insured, and that said policies of insurance will not be cancelled or materially changed with respect to areas and entities covered without first giving the City thirty (30) days prior written notice. KGA shall make available to the City, on request, the policies declarations pages and a certified copy of the policies in effect so that limitations and exclusions can be evaluated for appropriateness of overall coverage.
17. Indemnification.
(a) During the time that this Lease is in effect, KGA agrees to indemnify, defend, save, and hold harmless the City, its 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 KGA's use of the Leased Space or any portion thereof or the maintenance thereof, on account of any injury to third parties or damage to the property of third parties caused by the negligence, recklessness, or willful misconduct of KGA. This indemnification clause shall not apply to any injury or damage caused by the City’s own negligent, reckless, or willful misconduct, or that of its agents.
(b ) During the time that this Lease is in effect, the City agrees to indemnify, defend, save, and hold harmless KGA, its officers, trustees, 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 KGA's use of the Leased Space or any portion thereof or the maintenance thereof, on account of any injury to third parties or damage to the property of third parties caused by the negligence, recklessness, or willful misconduct of the City. This indemnification clause shall not apply to any injury or damage caused by KGA’s own negligent, reckless, or willful misconduct, or that of its agents.
18. Quiet Possession. The City covenants that KGA, on paying Rent and performing the covenants herein required, shall and may peaceably and quietly have, hold, and enjoy the Leased Space during the term of this Lease, free from any disturbance by the City, its agents or employees, or others acting within the control of the City.
19. Holding Over. Should KGA hold over for any reason after the expiration of the Term, said holding over shall create only a month-to-month tenancy, terminable on thirty (30) days written notice from either party to the other.
20. Relationship of Parties. Nothing set forth herein shall be deemed or construed by the parties, nor by any third party, as creating the relationship of principal and agent, partnership, or joint venture between the parties hereto, it being understood and agreed that no provision contained herein, nor any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of Lessor and Lessee.
21. Waiver of Subrogation. The parties mutually waive their respective rights of recovery against each other for any loss of or damage to either party’s property to the extent that such damage is insured by an insurance policy required to be in effect at the time of such loss or damage. Each party shall obtain any special endorsements, if required by its insurer, whereby the insurer waives its rights of subrogation against the other party. The provision is intended to waive fully, and for the benefit of the parties hereto, any rights and claims which might give rise to a right of subrogation in favor of any insurance carrier.
22. Limitation of Liability. Neither party shall be liable to the other for lost profits, special, incidental, punitive, exemplary, or consequential damages, including but not limited to frustration of economic or business expectations, loss of profits, loss of capital, cost of substitute product(s), facilities, or services, or down time costs, even if advised of the possibility of such damages. Further, the liability of one party to the other for damages under this Lease, excluding liabilities relating to a party’s indemnification obligations as set forth in Section 16, supra, or any other damages permitted under this Lease, is limited to the total amount payable by KGA to the City under this Lease to which the dispute relates.
23. Authorization. Each of the persons executing this Lease, in behalf of the respective parties, represents and warrants that he or she has the authority to bind the party in behalf of whom he or she has executed this Lease, and that all acts required and necessary for authorization to enter into and to execute this Lease have been completed.
24. Assignment. This Lease may not be sold, assigned, transferred, or sublet without the prior written approval or consent of both parties.
25. Notice. Notice under this Lease shall be provided in writing to the parties at the following addresses:
Notice to KGA:
Kansas Golf Association
Attn: Executive Director
1250 East 902 Road
Lawrence, Kansas 66044
Notice to the City:
City of Lawrence, Kansas
City Manager’s Office
6 East 6th Street
P.O. Box 768
Lawrence, Kansas 66044
26. Successors and Assigns. This Lease shall be binding upon and inure to the benefit of the parties, their respective heirs, personal representatives, successors, and assigns.
27. Non-waiver. Failure of either party to insist on strict performance of any of the conditions, covenants, terms, or provisions of this Lease or to exercise any of its rights hereunder shall not waive such rights, but the party shall have the right to enforce such rights at any time and to take such action as might be lawful or authorized hereunder, whether in law or equity.
28. Severability. If any section, sentence, clause, or phrase of this Lease is found to be invalid by any court of competent jurisdiction, it shall not affect the validity of any remaining provision of this Lease.
29. Venue. The parties agree that the appropriate venues for any legal actions arising out of this Lease are the District Court of Douglas County, Kansas, or, if federal jurisdiction exists, the United States District Court for the District of Kansas.
30. Governing Law. This Lease shall be governed by the laws of the State of Kansas.
31. Miscellaneous.
(a) This Lease supersedes all prior discussions and negotiations and contains all agreements and understandings between the City and KGA with respect to the subject matter hereof. This Lease may only be amended by a writing signed by all parties.
(b) The provisions of the Lease relating to indemnification shall survive any termination or expiration of this Lease. Any provision of this Lease that would require performance subsequent to the termination or expiration of this Lease shall likewise survive any such termination or expiration.
(c) This Lease may be executed in duplicate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The signature pages from one (1) or more counterparts may be removed from such counterparts and such signature pages all attached to a single instrument.
(d) The recitals are incorporated herein by reference as if set forth herein in full.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have caused this Lease Agreement to be executed as of the date noted above.
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 __________, 2017, 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:
KGA:
KANSAS GOLF ASSOCATION, a Kansas not-for-profit corporation
________________________________
KIM D. RICHEY
Executive Director
ACKNOWLEDGMENT
THE STATE OF KANSAS )
) ss:
THE COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this ____ day of _________, 2017, before me the undersigned, a notary public in and for the County and State aforesaid, came Kim D. Richey, as Executive Director of the Kansas Golf Association, a Kansas not-for-profit corporation, 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: