HomeMy WebLinkAboutItem 16 Lease Agreement for Springfield Depot Premises with Springfield Chamber of Commerce
AGENDA ITEM SUMMARY Meeting Date: February 4,2008
Meeting Type: Regular Session
Department: City Manager's Office
Staff Contact: Jeff Towery ~
S P R I N G FIE L D Staff Phone No: 3627
C I T Y C 0 U N C I L Estimated Time: 5 Minutes
ITEM TITLE: LEASE AGREEMENT FOR SPRINGFIELD DEPOT PREMISES WITH
SPRINGFIELD CHAMBER OF COMMERCE
ACTION
REQUESTED:
Authorize/not authorize the City Manager to execute the proposed commercial
lease with Springfield Chamber of Commerce for the Springfield Depot Premises.
ISSUE
STATEMENT:
The Springfield Depot is currently owned by the Springfield Depot Foundation and
is occupied by the Springfield Chamber of Commerce. Over the past several
months the Chamber has been reviewing various options for locating all or a
portion of their offices and the Foundation has been reevaluating their ability to
effectively own, operate and maintain the facility. Consistent with options
discussed with the Council during a work session last summer, the Foundation
Board has decided to dissolve effective February 1,2008 conditioned on the City's
ability to take ownership of the facility and approval of a lease between the City
and the Chamber. The form of the proposed lease is based on a standard
commercial lease. The Chamber will occupy the same space they currently use and
will pay the same rate paid to the Foundation ($0.80 per square foot) and will
manage the meeting space for the facility. Commercial lease rates in downtown
range from $0.50 to $1.00 per square foot. The Chamber will pay for the taxes and
utilities consistent with their share ofthe building. The City will take on the major
maintenance and upkeep expected for a commercial owner.'
The City Attorney has reviewed and approved the lease and the Chamber has
signed the lease.
ATTACHMENTS:
Attachment 1: Commercial Lease
DISCUSSION/
FINANCIAL
IMPACT:
Staff members from Development Services and Public Works have done initial
work to assess building needs and improvement projects as well as potential next
steps for maintenance and upkeep of the facility. Upgrading the HV AC system and
repairing the rails on top of the building appear to be the highest priority repairs and
order of magnitude costs for those jobs are expected to be approximately $35,000
and $5,000 respectively. Staff recommends that an architectural analysis be
conducted to identify needed improvement projects and projected costs. Total
budget impact will be subjectto phasing. Staff will identify sources and
timeframes for expenditures and will present options for implementation to the
Council and/or Budget Committee as appropriate.
COMMERCIAL LEASE
Date: January 1, 2008
Between: City of Springfield . ("Landlord")
A Municipal Corporation of the State of Oregon
225 Fifth Street
'Springfield, OR 97477
And: Springfield Chamber of Commerce ('Tenant")
A Corporation Organized Under the Laws Under the State of Oregon
101 South A Street
Springfield, OR 97477
Landlord leases to Tenant and Tenant leases from Landlord the following described
property (the "Springfield Depot Premises") for the purpose of providing a Visitor's
Service Center on the terms and conditions stated below:
See Exhibit A (add parking lot spaces for Chamber employees and visitors to the
Chamber), attached hereto and incorporated herein by reference. The parking lot
immediately to the south of Exhibit A is available for parking by tenants, employees and
visitors to the Chamber. The parking lot is more particularly described and set forth in
Exhibit B, attached hereto and incorporated herein by reference.
Including all improvements thereon.
Section 1. Occupancy
1.1 Original Term. The term of this lease shall commence February 1, 2008 and
continue through January 31, 2013 unless sooner terminated as hereinafter provided.
1.2 Possession. Tenant's right to possession and obligations under the lease shall
commence on February 1, 2008.
1.3 Renewal Option. If the lease is not in default at the time each option is
exercised or at the time the renewal term is to commence, upon mutual agreement the
parties may renew this lease for 3 successive terms of 1 year each, as follows:
(1) Each of the renewal terms shall commence on the day following expiration of
the preceding term.
(2) The option may be exercised by written notice to Landlord given not less than
60 days prior to the last day of the expiring term. The giving of such notice shall be
sufficient to make the lease binding for the renewal term without further act of the
parties. Landlord and Tenant shall then be bound to take the steps required in
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connection with the determination of rent as specified below.
(3) The terms and conditions of the lease for each renewal term shall be identical
with the original term except for rent and except that Tenant will no longer have any
option to renew this lease that has been exercised. Rent for each year of the original
term and any renewal term shall be the greater of (a) the rental during the preceding
original or renewal term or (b) a rental as determined in Section 1.3(4) below.
(4) The base rent provided in Section 2.1 shall be increased or decreased in the
month of January each year by a percentage equal to 100% of the percentage change
in the Consumer Price Index published by the United States Bureau of labor Statistics of
the United States Department of Labor. Comparisons shall be made using the index
entitled u.s. City Average-All Items and Major Group Figures for All Urban Consumers
(1982-84 = 100), or the nearest comparable data on changes in the cost of living if
. such index is no longer published. The change shall be determined by comparison of
the figure for December of the previous year, with that of December of each succeeding
year. In no event, however, shall base rent be reduced below that payable during the
first year of this lease.
Section 2. Rent
2.1 Base Rent. During the original term, Tenant shall pay to Landlord as base
rent the sum of 80 cents per square foot which is $696 for the term of the Lease. Rent
shall be payable on the first day of each month in advance at such place as may be
designated by Landlord except that rent for the first month has been paid upon the
execution of this lease, and Landlord acknowledges receipt of this sum.
2.2 Security Deposit. To secure Tenant's compliance with all terms of this lease,
Tenant has paid Landlord the sum of $1,000 as a deposit. The deposit shall be a debt
from Landlord to Tenant, refundable within 30 days after expiration of the lease term or
other termination not caused by Tenant's default. Landlord may commingle the deposit
with its funds and Tenant shall not be entitled to interest on the deposit. Landlord shall
have the right to offset against the deposit any sums owing from Tenant to Landlord
and not paid when due, any damages caused by Tenant's default, the cost of curing
any default by Tenant should Landlord elect to do so, and the cost of performing any
repair or cleanup that is Tenant's responsibility under this lease. Offset against the
deposit shall not be an exclusive remedy in any of the above cases, but may be invoked
by Landlord, at its option, in addition to any other remedy provided by law or this lease
for Tenant's nonperformance. Landlord shall give notice to Tenant each time an offset
is claimed against the deposit, and, unless the lease is terminated, Tenant shall within
10 days after such notice deposit with Landlord a sum equal to the amount of the offset
so that the total deposit amount, net of offset, shall remain constant throughout the
lease term.
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2.3 Additional Rent. All taxes, insurance costs, utility charges that Tenant is
required to pay by this lease, and any other sum that Tenant is required to pay to
Landlord or third parties shall be additional rent.
Section 3. Use of the Premises
3.1 Permitted Use.
(1) The Premises shall be used for Visitor's Service Center and for no other
purpose without the consent of Landlord, which consent shall not be withheld
unreasonably. Tenant may sublease the premises for purposes other than a Visitor
Service Center.
(2) With respect to the use of the Visitor's Service Center, in addition to the
leased premises Tenant shall maintain in a clean and safe environment the interior
hallway, the conference room, the bathrooms, and the freight room. Tenant shall
manage the use of the conference room and the freight room. Tenant may lease the
conference room and freight room for not to exceed the following nominal rates to the
public: During normal business hours 8:00-5:00 $2 per hour + $1 per person; after
hours $15 per hour and $1 per person; refundable deposit of $25. Tenant may retain
all rent collected from such leasing of the conference room and freight room. Tenant
shall maintain general cleaning, janitorial and trash services as needed to operate the
common areas and the conference room and the freight room availability to public use.
(3) Tenant may utilize the railcar for storage, Provided However, Landlord and
Tenant agree that such use for storage purposes may be terminated at the sole
discretion of Landlord in the event that Landlord wishes to utilize the railcar for
purposes representing the historic status of the Depot.
3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall:
(1) Conform to all applicable laws and regulations of any public authority affecting
the premises and the use, and correct at Tenant's own expense any failure of
compliance created through Tenant's fault or by reason of Tenant's use.
(2) Refrain from any activity that would make it impossible to insure the Premises
against casualty, would increase the insurance rate, or would prevent Landlord from
taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor,
allowing Landlord to obtain reduced premium rates for long-term fire insurance policies,
unless Tenant pays the additional cost of the insurance.
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(3) Refrain from any use that would be reasonably offensive to other tenants or
owners or users of neighboring premises or that would tend to create a nuisance or
damage the reputation of the premises.
(4) Refrain ,from loading the electrical system or floors beyond the point
considered safe by the City of Springfield Building Qfficial or Fire Marshal.
(5) Refrain from making any marks on or attaching any sign, insignia, antenna,
aerial, or other device to the exterior or interior walls, windows, or roof of the premises
without the written consent of landlord.
(6) Tenant shall not cause or permit any Hazardous Substance to be spilled,
leaked, disposed of, or otherwise released on or under the Premises. Tenant may use
or otherwise handle on the Premises only those Hazardous Substances typically used or
sold in the prudent and safe operation of the business specified in Section 3.1(1).
Tenant may store such Hazardous Substances on the Premises only in quantities
necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with
all Environmental laws and exercise the highest degree of care in the use, handling,
and storage of Hazardous Substances and shall take all practicable measures to
minimize the quantity and toxicity of Hazardous Substances used, handled, or stored on
the Premises. Upon the expiration or termination of this lease, Tenant shall remove all
Hazardous Substances from the Premises. The term Environmental law shall mean any
federal, state, or local statute, regulation, or ordinance or any judicial or other
governmental order pertaining to the protection of health, safety or the environment.
The term Hazardous Substance shall mean any hazardous, toxic, infectious or
radioactive substance, waste, and material as defined or listed by any Environmental
law and shall include, without limitation, petroleum oil and its fractions.
3.3. Historical Status. The Depot is listed on the National Register of Historic
Structures and the City of Springfield Historic landmark Inventory. Tenant shall take
no action to adversely affect the Historic Status Designation of the Depot. The Tenant
will assure that any use of the building will not be adverse to the building, equipment,
operation, or materials that represent the historic status of the Depot, its character and
integrity as described in Springfield Development Code Section 3.3-900 Historic Overlay
District. Tenant may use discretion relative to individuals, groups or organization to
insure the buildings historical status, safety and integrity. Any liquor use on the
premises shall be in accordance with OlCC requirements and proof of insurance.
3.4 Historic Commission. Tenant understands and agrees that City may choose
to consult with and seek recommendations froIT} the Springfield Historic Commission
with respect to the Depot. Tenant agrees to reasonably work with and make available
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the conference room and freight room without charge for Landlord and Springfield
Historic Commission. The Historic Commission may meet at the conference room or
freight room on a regular basis without charge.
Section 4. Repairs and Maintenance
4.1 Landlord's Obligations. The following shall be the responsibility of Landlord:
(1) Repairs and maintenance of the roof and gutters, exterior walls (including
painting), bearing walls, structural members, floor slabs, and foundation.
(2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in
common by Tenant and Landlord or tenants of other portions of the same building.
(3) Repair and maintenance of exterior water, sewage,. gas, and electrical services
up to the point of entry to the leased Premises.
(4) Repair of the heating and air conditioning system other than ordinary
maintenance.
(5) Repair and maintenance of the railcar.
(6) Repair and maintenance of exterior decking.
(7) Repair and maintenance of landscaping, irrigation, Bill Fitch Park, and
Springfield, signage. '
(8) All maintenance and repair necessary to maintain any Historical Status
Designation.
(9) Landlord will explore with Springfield Utility Board whether any funds or
financing programs may be available for the purposes of electric conservation. Tenant
may participate in such exploration.
4.2 Tenant's Obligations. The following shall be the responsibility of Tenant:
(1) Repair of interior walls, ceilings, doors, windows, and related hardware, light
fixtures, switches, and wiring and plumbing from the. point of entry to the premises.
(2) Any repairs necessitated by the negligence of Tenant, its agents, employees,
and invitees, except as provided in Section 6.2 dealing with waiver of subrogation, but
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including repairs that would otherwise be the responsibility of landlord under Section
4.1.
(3) Ordinary preventive maintenance of the HVAC system.
(4) Ordinary maintenance of the heating and air conditioning system and any
repairs necessary because of improper maintenance.
(5) Any repairs or alterations required under Tenant's obligation to comply with
laws and regulations as set forth in Section 4.2(1).
(6) All other repairs to the premises which landlord is not required to make under
Section 4.1.
4.3 Reimbursement for Repairs A~sumed. If Tenant fails or refuses to make
repairs that are required by this Section 4, Landlord may make the repairs and charge
the actual costs of repairs to Tenant. Such expenditures by landlord shall be
reimbursed by Tenant on demand together with interest at the rate of 9% per annum
from the date of expenditure by landlord. If landlord fails or refuses to make repairs
that are required by this Section 4, Tenant may make the repairs and charge the actual
cost of repairs to landlord. Such expenditures by Tenant may be deducted from rent
and other payments subsequently becoming due or, at Tenants election, collected
directly from landlord. Except in an emergency creating an immediate risk of personal
injury or property damage, neither party may perform repairs which are the obligation
of the other party and charge the other party for the resulting expens~ unless at least
15 days before work is commenced, and the defaulting party is given notice in writing
outlining with reasonable particularity the repairs required, and such party fails within
that time to initiate such repairs in good faith.
4.4 Inspection of Premises. Landlord shall have the right to inspect the Premises
at any reasonable time or times to determine the necessity of repair. Whether or not
such inspection is made, the duty of landlord to make repairs shall not mature until a
reasonable time after Landlord has received from Tenant written notice of the repairs
that are required.
Section 5. Alterations
5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on
the Premises of any kind without first obtaining landlord's written consent. All
alterations shall be made in a good and workmanlike manner, and in compliance with
applicable laws and building codes. As used herein, "alterations" includes the
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installation of computer and telecommunications wiring, cables, and conduit.
5.2
Ownership and Removal of Alterations. All improvements and alterations performed on
the Premises by either Landlord or Tenant shall be the property of Landlord when
installed unless the applicable Landlord's consent or work sheet specifically provides
otherwise.
Section 6. Insurance
6.1 Insurance Required. Landlord shall keep the Premises insured at Landlord's
expense with an all risk policy with replacement cost coverage on the building structure.
This policy may include earthquake or flood coverage at Landlord's option. Tenant, at
Tenant's option, shall carry contents insurance on any property .of Tenant on the
Premises.
6.2 Waiver of Subrogation. Neither party shall be liable to the other (or to the
other's successors or assigns) for any loss or damage caused by fire or any peril
included in a standard all risk policy. In the event of an insured loss, neither party's
insurance company shall have a subrogated claim against the other. This waiver shall
be valid only if the insurance policy in question expressly permits waiver of subrogation
or if the insurance company agrees in writing that such a waiver will not affect
coverage under the policies. Each party agrees to use best efforts to obtain such an
agreement from its insurer if the policy does not expressly permit a waiver of
subrogation.
Section 7. Taxes; Utilities
7.1 Property Taxes. Tenant shall pay as due all taxes on its personal property
located on the Premises. Tenant shall pay as due all real property taxes and special
assessments levied against the Premises. As used herein, real property taxes includes
any fee or charge relating to the ownership, use, or rental of the Premises, other than
taxes on the net income of Landlord or Tenant.
7.2 Special Assessments. If an assessment for a public improvement is made
against the Premises, Landlord may elect to cause such assessment to be paid in
installments, in which case all of the installments payable with respect to the lease term
shall be treated the same as general real property taxes for purposes of Section 8.1.
7.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax
or assessment as long as such contest is conducted in a manner that does not cause
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any risk that Landlord's interest in the Premises will be foreclosed for nonpayment.
Landlord shall cooperate in any reasonable manner with such contest by Tenant.
7.4 Proration of Taxes. Tenant's share of real property taxes and assessments for
the years in which this lease commences or terminates shall be prorated based on the
portion of the tax year that this lease is in effect.
7.5 New Charges or Fees. If a new charge or fee relating to the ownership or use
of the Premises or the receipt of rental therefrom or in lieu of property taxes is
assessed or imposed, then, to the extent permitted by law, Tenant shall pay such
charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or
franchise tax levied on the net income derived by Landlord from this lease.
7.6 Payment of Utilities Charges. Tenant shall pay when due all charges for
services and utilities incurred in connection with the use, occupancy, operation, and
maintenance of the Premises, including (but not limited to) charges for fuel, water, gas,
electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and
janitorial services. If any utility services are provided by or through Landlord, charges
to Tenant shall be comparable with prevailing rates for comparable services. If the
charges are not separately metered or stated, Landlord shall apportion the charges
based on square footage occupied by Tenant, and Tenant shall pay its apportioned
share on demand.
Section 8. Damage and Destruction
8.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not
apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall
be accomplished with all reasonable dispatch subject to interruptions and delays from
labor disputes and matters beyond the control of Landlord.
8.2 Destruction. If the Premises are destroyed or damaged such that the cost of
repair exceeds 10% of the value of the structure before the damage, either party may
elect to terminate the lease as of the date of the damage or destruction by notice given
to the other in writing not more than 45 days following the date of damage. In such
event all rights and obligations of the parties shall cease as of the date of termination,
and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by
Tenant and attributable to the anticipated term. If neither party elects to terminate,
Landlord shall proceed to restore the Premises to substantially the same form as prior
to the damage or destruction. Work shall be commenced as soon as reasonably
possible and thereafter shall proceed without interruption except for work stoppages on
account of labor disputes and matters beyond Landlord's reasonable control.
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8.3 Rent Abatement. Rent shall be abated during the repair of any damage to the
extent the premises are untenantable except that there shall be no rent abatement
where the damage occurred as the result of the fault of Tenant.
8.4 Damage Late in Term. If damage or destruction to which Section 8.2 would
apply occurs within one year before the end of the then-current lease term, Tenant may
elect to terminate the lease by written notice to Landlord given within 30 days after the
date of the damage. Such termination shall have the same effect as termination by
Landlord under Section 9.1(1).
Section 9. Eminent Domain
9.1 Partial Taking. If a portion of the Premises is condemned and Section 9.2
does not apply, the lease shall continue on the following terms:
(1) Landlord shall be entitled to all of the proceeds of condemnation, and Tenant
shall have no claim against Landlord as a result of the condemnation.
(2) Landlord shall proceed as soon as reasonably possible to make such repairs
and alterations to the Premises as are necessary to restore the remaining Premises to a
condition as comparable as reasonably practicable to that existing at the time of the
condemnation.
(3) After the date on which title vests in the condemning authority or an earlier
date on which alterations or repairs are commenced by Landlord to restore the balance
of the Premises in anticipation of taking, the rent shall be reduced in proportion to the
reduction in value of the Premises as an economic unit on account of the partial taking.
If the parties are unable to agree on the amount of the reduction of rent, the amount
shall be determined by arbitration.
(4) If a portion of Landlord's property not included in the Premises is taken, and
severance damages are awarded on account of the Premises, or an award is made for
detriment to the Premises as a result of activity by a public body not involving a
physical taking of any portion of the Premises, this shall be regarded as a partial
condemnation to which Sections 9.1(1) and 9.1(3) apply, and the rent shall be reduced
to the extent of reduction in rental value of the Premises as though a portion had been
physically taken.
9.2 Total Taking. If a condemning authority takes all of the Premises or a portion
sufficient to render the remaining premises reasonably unsuitable for the use that
Tenant was then making of the premises, the lease shall terminate as of the date the
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title vests in the condemning authorities. Such termination shall have the same effect
as a termination under Section 9.1(1). Landlord shall be entitled to all of the proceeds
of condemnation, and Tenant shall have no claim against Landlord as a result of the
condemnation.
9.3 Sale in Lieu of Condemnation. Sale of all or part of the premises to a
.purchaser with the power of eminentdomain in the face of a threat or probability of the
exercise of the power shall be treated for the purposes of this Section 9 as a taking by
condemnation.
Section 10. Liability and Indemnity
10.1 Liens
(1) Except with respect to activities for which Landlord is responsible, Tenant shall
pay as due all claims for work done on and for services rendered or material furnished
to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay
any such claims or to discharge any lien, Landlord may do so and collect the cost as
additional rent. Any amount so added shall bear interest at the rate of 9% per annum
from the. date expended by Landlord and shall be payable on demand. Such action by
Landlord shall not constitute a waiver of any right or remedy which Landlord may have
on account of Tenant's default.
(2) Tenant may withhold payment of any claim in connection with a good-faith
dispute over the obligation to pay, as long as Landlord's property interests are not
jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days
after knowledge of the filing, secure the discharge of the lien or deposit with Landlord
cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an
amount sufficient to discharge the lien plus any costs, attorney fees, and other charges
that could accrue as a result of a foreclosure or sale under the lien.
10.2 Indemnification. Tenant shall indemnify and defend Landlord from any
claim, loss, or liability arising out of or related to any activity of Tenant on the Premises
or any condition of the Premises in the possession or under the control of Tenant.
Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third
parties, or by any condition of the Premises except to the extent caused by Landlord's
negligence or breach of duty under this lease, and the extent of any Landlord liability is
subject to limitations imposed by Oregon Revised Statutes including but not limited to
the Oregon Governmental Tort Claims Act.
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10.3 Liability Insurance. Before going into possession of the Premises, Tenant
shall procure and thereafter during the term of the lease shall continue to carry the
following insurance at Tenant's cost: A Comprehensive General Liability policy with
limits of $1,000,000 per occurrence for bodily injury and property damage with a
$2,000,000 aggregate on products and completed operations. Such insurance shall
cover Landlord for all Tenant's activities conducted on or directly or indirectly related to
Tenant's use of the Premises. Landlord shall be named as an additional insured on this
liability policy. Coverage shall be issued in a company that is rated at least A- by Best
insurance rating service and approved by Landlord. A certificate of insurance
evidencing such insurance and bearing endorsements requiring 10 days' written notice
to Landlord prior to any material change-in coverage or cancellation shall be furnished
to Landlord prior to Tenant's occupancy of the property. Failure by Tenant to maintain
the required insurance will be grounds for immediate cancellation of this Lease.
Section 11. Quiet Enjoyment; Mortgage Priority
11.1 Mortgage Priority. This lease is and shall be prior to any mortgage or deed
of trust ("Encumbrance") recorded after the date of this lease and affecting the
Premises. However, if any lender holding such an Encumbrance requires that this lease
be subordinate to the Encumbrance, then Tenant agrees that the lease shall be
subordinate to the Encumbrance if the holder thereof agrees in writing with Tenant that
as long as Tenant performs its obligations under this lease no foreclosure, deed given in
lieu of foreclosure, or sale pursuant to the terms of the Encumbrance, or other steps or
procedures taken under the Encumbrance shall affect Tenant's rights under this lease.
If the foregoing condition is met, Tenant shall execute the written agreement and any
other documents required by the holder of the Encumbrance to accomplish the
purposes of this paragraph. If the premises are sold as a result of foreclosure of any
Encumbrance thereon, or otherwise transferred by Landlord or any successor, Tenant
shall attorn to the purchaser or transferee.
11.2 Estoppel Certificate. Either party will, within 20 days after notice from the
other, execute and deliver to the other party a certificate stating whether or not this
lease has been modified and is in full force and effect and specifying any modifications
or alleged breaches by the other party. The certificate shall also state the amount of
monthly base rent, the dates to which rent has been paid in advance, and the amount
of any security deposit or prepaid ren.t. Failure to deliver the certificate within the
specified time shall be conclusive upon the party from whom the certificate was
requested that the lease is in full force and effect and has not been modified except as
represented in the notice requesting the certificate.
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Section 12. Assignment and Subletting
No part of the Premises may be assigned, mortgaged, or subleased, nor may a
right of use of any portion of the property be conferred on any third person by any
other means, without the prior written consent of Landlord. This provision shall apply
to all transfers by operation of law.
Section 13. Default
The following shall be events of default:
13.1 Default in Rent. Failure of Tenant to pay any rent or other charge within 10
days after written notice that it is due.
13.2 Default in Other Covenants. Failure of Tenant to comply with any term or
condition or fulfill any obligation of the lease (other than the payment of rent or other
charges) within 20 days after written notice by Landlord specifying the nature of the
default with reasonable particularity. If the default is of such a. nature that it cannot be
completely remedied within the 20-day period, this provision shall be complied with if
Tenant begins correction of the default within the 20-day period and thereafter
proceeds with reasonable diligence and in good faith to effect the remedy as soon as
practicable.
13.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit
of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication
that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant;
the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a
dismissal of the petition within 30 days after filing; attachment of or the levying of
execution on the leasehold interest and failure of Tenant to secure discharge of the
attachment or release of the levy of execution within 10 days shall constitute a default.
If Tenant consists of two or more individuals or business entities, the events of default
specified in this Section 13.3 shall apply to each individual unless within 10 days after
an event of default occurs, the remaining individuals produce evidence satisfactory to
Landlord that they have unconditionally acquired the interest of the one causing the
default. If the lease has been assigned, the events of default so specified shall apply
only with respect to the one then exercising the rights of Tenant under the lease.
13.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises
for one or more of the purposes permitted under this lease, unless such failure is
excused under.other provisions of this lease.
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Section 14. Remedies on Default
14.1 Termination. In the event ofa default the lease may be terminated at the
option of Landlord by written notice to Tenant. Whether or not the lease is terminated
by the election of Landlord or otherwise, Landlord shall be entitled to recover damages
from Tenant for the default, and Landlord may reenter, take possession of the
premises, and remove any persons or property by legal action or by self-help with the
use of reasonable force and without liability for damages and without having accepted a
surrender.
14.? Reletting. Following reentry or abandonment, Landlord may relet the
Premises and in that connection may make any suitable alterations or refurbish the
Premises, or both, or change the character or use of the Premises, but Landlord shall
not be required to relet for any use or purpose other than that specified in the lease or
which Landlord may reasonably consider injurious to the Premises, or to any tenant that
Landlord may reasonably consider objectionable. Landlord may relet all or part of the
Premises, alone or in conjunction with other properties, for a term longer or shorter
than the term of this lease, upon any reasonable terms and conditions, including the
granting of some rent-free occupancy or other rent concession.
14.3 Damages. In the event of termination or retaking of possession following
default, Landlord shall be entitled to recover immediately, without waiting until the due
date of any future rent or until the date fixed for expiration of the lease term, the
following amounts as damages:
(1) The loss of rental from the date of default until a new tenant is, or with the
exercise of reasonable efforts could have been, secured and paying out.
(2) The reasonable costs of reentry and reletting including without limitation the
cost of any cleanup, refurbishing, removal of Tenant's property and fixtures, costs
incurred under Section 14.5, or any other expense occasioned by Tenant's default
including but not limited to, any remodeling or repair costs, attorney fees, court costs,
broker commissions, and advertising costs.
(3) Any excess of the value of the rent and all of Tenant's other obligations under
this lease over the reasonable expected return from the premises for the period
commencing on the earlier of the date of trial or the date the premises are relet, and
continuing through the end of the term. The presentvalue of future amounts will be
computed using a discount rate equal to the prime loan rate of major Oregon banks in
effect on the date of trial.
COMMERCIAL LEASE Page -13
ATTACf.IMENT 1 - PAGE 13
14.4 Right to Sue More than Once. Landlord may sue periodically to recover
damages during the period corresponding to the remainder of the lease term, and no
action for damages shall bar a later action for damages subsequently accruing.
14.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation
under this lease, Landlord shall have the option to do so after 30 days' written notice to
Tenant All of Landlord's expenditures to correct the default shall be reimbursed by
Tenant on demand with interest at the rate of 9% annum from the date of expenditure
by Landlord. Such action by Landlord shall not waive any other remedies available to
Landlord because of the default.
14.6 Remedies Cumulative. The foregoing remedies shall be in addition to and
shall not exclude any other remedy available to Landlord under applicable law.
Section 15. Surrender at Expiration
15.1 Condition of Premises. Upon expiration of the lease term or earlier'
termination on account of default, Tenant shall deliver all keys to Landlord and
surrender the Premises in first- class condition and broom clean. Alterations
constructed by Tenant with permission from Landlord shall not be removed or restored
to the original condition unless the terms of permission for the alteration so requir:e.
Depreciation and wear from ordinary use for the purpose for which Tenant is
responsible shall be completed to the latest practical date prior to such surrender.
Tenant's obligations under this section shall be subordinate to the provisions of Section
8 relating to destruction.
15.2 Fixtures
(1) All fixtures placed upon the Premises during the term, other than Tenant's
trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord
so elects, Tenant shall remove any or all fixtures that would otherwise remain the
property of Landlord, and shall repair any physical damage resulting from the removal.
If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to
Tenant with interest at the legal rate from the date of expenditure.
(2) Prior to expiration or other termination of the lease term Tenant shall remove
all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to
do so, this shall be an abandonment of the property, and Landlord may retain the
property and all rights of Tenant with respect to it shall cease or, by notice in writing
given to Tenant within 20 days after removal was required, Landlord may elect to hold
Tenant to its obligation of removal. If Landlord elects to require Tenant to remove,
COMMERCIAL LEASE Page -14
ATTACHMENT 1 - PAGE 14
Landlord may effect a removal and place the property in public storage for Tenant's
account. Tenant shall be liable to Landlord for the cost of removal, transportation to
storage, and storage, with interest at the legal rate on all such expenses from the date
of expenditure by Landlord.
15.3 Holdover
(1) If Tenant does not vacate the Premises at the time required, Landlord shall
have the option to treat Tenant as a tenant from month to month, subject to all of the
provisions of this lease except the provisions for term and renewal, or to eject Tenant
from the Premises and recover damages caused by wrongful holdover. Failure of
Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is
required to remove under this lease shall constitute a failure to vacate to which this
section shall apply if the property not removed will substantially interfere with
occupancy of the Premises by another tenant or with occupancy by Landlord for any
purpose including preparation for a new tenant.
(2) If a month-to-month tenancy results from a holdover by Tenant. under this
Section 15.3, the tenancy shall be terminable at the end of any monthly rental period
on written notice from Landlord given not less than 10 days prior to the termination
date which shall be specified in the notice. Tenant waives any notice that would
otherwise be provided by law with respect to a month-to-month tenancy.
Section 16. Miscellaneous
16.1 Nonwaiver. Waiver by either party of strict performance of any provision of
this lease shall not be a waiver of or prejudice the party's right to require strict
performance of the sam~ provision in the future or of any other provision.
16.2 Attorney Fees. If suit or action is instituted in connection with any
controversy arising out of this lease, the prevailing party shall be entitled to recover in
addition to costs such sum as the court may adjudge reasonable as attorney fees at
trial, on petition for review, and on appeal.
16.3 Notices. Any notice required or permitted under this lease shall be given
when actually delivered or 48 hours after deposited in United States mail as certified
mail addressed to the address first given in this lease or to such other address as may
be specified from time to time by either of the parties in writing.
16.4 Succession. Subject to the above-stated limitations on transfer of Tenant's
interest, this lease shall be binding,on and inure to the benefit of the parties and their
COMMERCIAL LEASE Page -15
ATTACHMENT 1 - PAGE 15
'respective successors and assigns.
16.5 Recordation. This lease shall not be recorded without the written consent of
Landlord.
16.6 Entry for Inspection. Landlord shall have the right to enter upon the
Premises at any time to determine Tenant's compliance with this lease, to make
necessary repairs to the building or to the Premises, or to show the Premises to any
prospective tenant or purchaser, and in addition shall have the right, at any time during
the last two months of the term of this lease, to place and maintain upon the Premises
notices for leasing or selling of the Premises.
16.7 Interest on Rent and Other Charges. Any rent or other payment required of
Tenant by this lease shall, if not paid within 10 days after it is due, bear interest at the
rate of 9% per annum (but not in any event at a rate greater than the maximum rate of
interest permitted by law) from the due date until paid. In addition, if Tenant fails to
make any rent or other payment required by this lease to be paid to Landlord within
five days after it is due, Landlord may elect to impose a late charge of five cents per
dollar of the overdue payment to reimburse Landlord for the costs of collecting the
overdue payment. Tenant shall pay the late charge upon demand by Landlord.
Landlord may levy and collect a late charge in addition to all other remedies available
for Tenant's default, and collection of a late charge shall not waive the breach caused
by the late payment.
16.8 Proration of Rent. In the event of commencement or termination of this
lease at a time other than the beginning or end of one of the specified rental periods,
then the rent shall be prorated as of the date of commencement or termination and in
the event of termination for reasons other than default, all prepaid rent shall be
refunded to Tenant or paid on its account. '
16.9 Time of Essence. Time is of the essence of the performance of each of
Tenant's obligations under this lease.
By:
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TENANT:
Springfield Chamber~1ommerce
By: (]f0.-.{M-
/
LANDLORD:
City of Springfield
. COMMERCIAL LEASE Page -16
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