HomeMy WebLinkAboutItem 14- Property Management Contract AGENDA ITEM SUMMARY Meeting Date: 5/6/2024
Meeting Type: Regular Meeting
Staff Contact/Dept.: Allie Camp
Staff Phone No: 541-726-3688
Estimated Time: 5 minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Provide Financially
Responsible and
Innovative Government
Services
ITEM TITLE: PROPERTY MANAGEMENT CONTRACT
ACTION
REQUESTED:
Direct the City Manager to enter/not enter into an agreement, substantially in the
form provided, with Campbell Commercial Real Estate for commercial property
management services.
ISSUE
STATEMENT:
Property management entails expertise that City staff do not have or anticipate the
strategic need to expand into.
ATTACHMENTS: 1. Draft contract C#3621
2. Resolution 2022-14
DISCUSSION/
FINANCIAL
IMPACT:
In September of 2023, the City Manager’s Office released a Request for Proposals
(RFP) for a Commercial Property Management Company. The RFP was marketed
on the City’s website and through emails to seven potential applicants, three of
which responded to a Request for Information released by the City for property
management services in 2018. Additional marketing was done on the City’s website
and through real estate and title company networking platforms. The RFP was open
for 34 days and received one response from an out-of-state firm. Staff ultimately
cancelled the RFP because the single respondent was not able to meet on-site
requirements without greatly impacting costs.
Draft Contract C#3621 (ATT 1) was established with a sole source procurement,
and the value of the contract is $235,400 over three plus fiscal years. The vendor,
Campbell Commercial Real Estate, has expertise in portfolios like the City’s and
has been working successfully with Lane Council of Governments. Staff met with
Campbell Commercial multiple times to assess philosophy, expertise,
responsiveness, quality of service, and suitability for working with government.
The contract scope includes both City and Springfield Economic Development
Agency properties that currently lease to tenants, have the potential to lease to
tenants, or require expertise to maintain the property’s values. Contract expenses
will be proportionally divided across budgets.
Resolution 2022-14 (ATT 2) was used to inform how best to work with this
contractor. It defines a timeline and a draft lease for spaces at Booth Kelly. This
draft lease has also been used for SEDA owned properties. This lease will continue
to be utilized by Campbell Commercial to assure that the policy and goals of the
Resolution are achieved. If properties or tenants require different terms than what is
defined in Resolution 2022-14, those leases will come to Council for approval as in
the past. The term of the Resolution, through FY27, was used to determine the term
of the contract with Campbell Commercial.
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Commercial Real Estate
Management Agreement
Contract #3621
Between: City of Springfield, (”Owner”)
A Municipal Corporation of the State of Oregon
225 5th Street
Springfield, OR 97477
And: L G Campbell Company, Inc., (“Agent”)
DBA Campbell Commercial Real Estate
Effective Date: May _______, 2024
AGREEMENT
Section 1 APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT AND ACCEPTANCE
Owner hereby appoints Agent as sole and exclusive Agent of Owner to manage
the Property described in paragraph 1.2 upon the terms and conditions provided herein.
Agent accepts the appointment and agrees to furnish the services of its organization for
the management of the Property; and Owner agrees to pay all e xpenses in connection
with those services.
1.2 DESCRIPTION OF PROPERTY
The Property to be managed by Agent under this Agreement is described as:
Glenwood Master Plan Area
Map included below- areas in green are City/SEDA ownership. The tax lots included in this
scope of work are highlighted with pink.
• 4190 Franklin Boulevard (the Skillern building)- industrial building; currently
vacant and will remain vacant; will require regular drive by visits to assure it
remains clean, safe, secured.
• 207 N. Concord- industrial building; currently vacant and will remain vacant; will
require regular drive by visits to assure it remains clean, safe, secured.
• 4102-4150 Franklin Boulevard- vacant lot; will require regular drive by visits to
assure it remains clean, safe, secured.
• 325 N. Brooklyn Street (the Brombaugh Building)- small fabrication shop with
seven tenants sharing space; currently working through leasing structure.
• 4250-4258 Franklin Boulevard (the location of Trax Motor Sports)- leased to an
individual who subleases to the sports shop on the site.
Unaddressed tax lots in the Glenwood Master Plan Area
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Map included below- areas in green are City/SEDA ownership. The tax lots included in this
scope of work are highlighted with pink.
• TL 17-03-34-41-00400
• TL 17-03-34-41-00500
• TL 17-03-34-41-01300
• TL 17-03-34-41-00700
• TL 17-03-34-42-01000
• TL 17-03-34-42-00700
• TL 17-03-34-42-00504
• TL 17-03-34-42-00501
Glenwood other
• 3697 Franklin (Ace Trading)- small commercial building; approximately 3,200
square feet; currently vacant and will remain vacant; purchased for future
Franklin Boulevard improvements; will require regular drive by visits to assure it
remains clean, safe, secured.
• 4095 Franklin Boulevard (formerly Tom Tapper’s Tavern)- fully fenced vacant lot;
purchased for Franklin Boulevard improvements and future redevelopment; will
need landscaping services.
Downtown
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Additional properties may be added to the scope of services upon acquisition by
the City or SEDA.
1.3 TERM
The term of this Agreement shall be for an Initial period of three (3) years (the
"initial term") from the 1st day of May 2024, to and including the 30th day of June, 2027,
with Owner retaining two (2) one-year options to renew unless terminated as provided in
section 19 herein. Each of said one-year renewal periods is referred to as a "term year."
Section 2 BANK ACCOUNTS
The accounts established under this Agreement shall at all times be established
in Owner's name but under Agent's control. Agent's designees shall be the only parties
authorized to draw upon such account. No amounts deposited in any accounts
established under this Agreement shall in any event be commingled with any other funds
of Agent.
2.1 OPERATING ACCOUNT
Agent shall establish twoaccounts known as The City of Springfield Account
and the SEDA account, within Agent's client trust accounts, but separate and apart
from Agent's corporate accounts, for the deposit of receipts collected as described
herein, in a bank or other institution whose deposits are insured by the federal
government. Such depository shall be selected by the Agent. However, Agent shall
not be held liable in the event of bankruptcy or failure of a depository. Funds in the
138 Main Street - office building, approximately 1,800 square feet, 1 tenant
contracted for the space as part of their service contract with the City (tenant
does not pay rent).
236 and 240 Main Street (Vino and Vango)- commercial, storage, and surface
parking; one tenant; approximately 2,600 and 3,100 square feet respectively.
303 S 5th Street (Booth Kelly Industrial Complex)- office/commercial/light
industrial/storage; approximately 250,000 square feet; 16 tenants, mostly long
term; one vacant tenant space; minimal vacant non-tenant space; will require
landscaping and regular drive by visits to assure it remails clean, safe, secured.
220 5th Street (Carter Building site)- vacant lot, undeveloped; will require regular
drive by visits to assure it remains clean, safe, secured.
101 S. A Street (The Depot Building)- office building approximately 3,500 square
feet; a portion of the adjacent parking lot; 1 tenant.
101 S. A Street (Train car)- small historic train car; included in lease with 101 S.
A Street.
735-765 A Street (The Memorial Building)- commercial building approximately
17,700 square feet; small adjacent parking lot; currently utilized by Springfield
Police Department for training; will need landscaping services.
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Operating Account remain the property of Owner subject to disbursement of
expenses by Agent as described in this Agreement Properties listed in section 1.2.,
will be allocated to Agent by Owner.
2.1.1 CONTINGENCY RESERVE
Owner agrees to maintain a contingency reserve in an amount sufficient to
enable Agent to pay the obligations of Owner under this Agreement as they become
due. Owner and Agent shall review the amount of the contingency reserve from time to
time and shall agree on a new contingency reserve amount when such is required.
Section 3 COLLECTION OF RENTS AND OTHER RECEIPTS
3.1 AGENT’S AUTHORITY
Agent shall collect (and give receipts for, if necessary) all rents, charges and
other amounts receivable on Owner's account in connection with the management and
operation of the Property. Such receipts shall be deposited in the Operating Account
maintained by Agent for the Property.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may collect from tenants any or all of the
following: an administrative charge for late payment of rent, a charge for returned or non-
negotiable checks, Agent shall account to Owner for such charges.
3.3 SECURITY DEPOSITS
Agent shall collect, deposit, and disburse tenants' security deposits in
accordance with the terms of each tenant's lease. Agent shall comply with all
applicable state or Inca! laws concerning the responsibility for security deposits and
interest, if any
Section 4 DISBURSEMENTS FROM OPERATING ACCOUNT
4.1 OPERATING EXPENSES
From the Operating Account, Agent is hereby authorized to pay or reimburse
itself for all expenses and costs of operating the Property and for all other sums due
Agent under this Agreement, including Agent's compensation under Section 15.
4.2 DEBT SERVICE
Owner shall give Agent advance written notice of at least fifteen days if Owner
desires Agent to make any additional monthly or recurring payments (such as mortgage
indebtedness, general taxes, or special assessments, or fire, steam boiler, or other
insurance premiums) out of the proceeds from the Property. If Owner notifies Agent to
make such payments after the beginning of the term of this Agreement, Agent shall have
the authority to name a new contingency reserve amount pursuant to paragraph 2.1.1 of
this Agreement, and Owner shall maintain this new contingency reserve amount at all
times in the Operating Account.
4.3 NET PROCEEDS
To the extent that funds are available, and after maintaining the cash
contingency reserve amount as specified in paragraph 2.1.1, Agent shall transmit cash
(
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.
balances to Owner periodically, as follows: Monthly at end of month. Such periodic cash
balances shall be remitted to the following person(s), in the percentage(s) specified, and
at the address(es) shown:
City Account Number(s) To Be Charged (Include Percentages):
Account Number Percentage
229-01100-1007-611008 (GW) 16.5%
230-01100-1007-611008 (DT) 16.5%
618-07300-7902-611008 (BK) 67%
Section 5 AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event that the balance in the Operating Account is at any time insufficient to pay
disbursements due and payable under paragraphs 4.1 and 4.2 above, Owner shall, immediately
upon notice, remit to Agent sufficient funds to cover the deficiency and replenish the
contingency reserve. In no event shall Agent be required to use its own funds to pay such
disbursements, nor shall Agent be required to advance any monies to Owner, to the Security
Deposit Account, or to the Operating Account.
Section 6 FINANCIAL AND OTHER REPORTS
By the tenth day of each month, Agent shall furnish Owner with a statement of cash
receipts and disbursements from the operation of the Property during the previous month. In
addition, Agent shall, on a mutually acceptable schedule, prepare and submit to Owner such
other reports as are agreed on by both parties.
6.1 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request periodic audits of all applicable accounts
managed by Agent, and the cost of such audit(s) shall be paid by Owner.
The Agent shall keep proper books of the account, recording all income and
expense attributed to the property, permit Owner, or assigned auditor, to inspect the
books at all reasonable times, and retain the books for at least six (6) years. After the
end of the six-year retention period Agent will destroy the books unless instructed
otherwise in writing.
Section 7 ENFORCEMENT OF LEASES
Agent is authorized to institute, in Owner's name, all legal actions or proceedings for the
enforcement of any lease term, for the collection of rent or other income from the Property, or
for the evicting or dispossessing of tenants or other persons from the Property, with Owner’s
prior approval. Agent is authorized to sign and serve such notices as Agent deems necessary
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for lease enforcement, including the collection of rent or other income. Agent is authorized,
when expedient, to settle, compromise, and release such legal actions or suits or reinstate such
tenancies. Any monies for such settlements paid out by Agent shall not exceed $1,500.00
without prior approval by Owner. Attorneys' fees, filing fees, court costs, and other necessary
expenses incurred in connection with such actions and not recovered from tenants shall be paid
out of the Operating (and/or) Reserve Account(s) or reimbursed directly to Agent by Owner.
Agent may select the attorney of its choice to handle such litigation.
Section 8 MAINTENANCE AND REPAIR
Agent ls authorized to make or cause to be made, through contracted services or otherwise, all
ordinary repairs and replacements reasonably necessary to preserve the Property in its present
condition and for the operating efficiency of the Property, and all alterations required to comply
with lease requirements, governmental regulations, or insurance requirements, Agent is also
authorized to decorate the Property and to purchase or rent, on Owner's behalf, all equipment,
tools, appliances, materials, supplies, uniforms, and other items necessary for the management,
maintenance, or operation of the Property. Such maintenance and decorating expenses shall be
paid out of the Operating (and/or) Reserve Account(s). This section applies except where
decorating and/or maintenance are at tenants' expense as stipulated in a lease.
8.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE EXPENSE
The expense to be incurred for any one item of maintenance, alteration,
refurbishing, or repair shall not exceed the sum of $2,500.00, unless such expense is
specifically authorized by Owner, or is incurred under such circumstances as Agent shall
reasonably deem to be an emergency. In an emergency where repairs are immediately
necessary for the preservation and safety of the Property, or to avoid the suspension of
any essential service to the Property, or to avoid danger to life or property, or to comply
with federal, state, or local law, such emergency repairs shall be made by Agent at
Owner's expense without prior approval.
8.2 AUTHORIZATION OF AGENT’S MAINTENANCE PERSONNEL
Owner authorizes Agent's use of Agent's maintenance staff for operations of the
building. Agent shall maintain complete records of hours as they are assigned to specific
tasks which shall be available to Owner upon request. Maintenance staff shall be
charged at the rate of $50.00 per hour, which rate can be changed upon written
agreement between Agent and Owner. All materials shall be charged Owner at the
actual cost with no markup by Agent. ·
Section 9 CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts for nonrecurring items of expense, not to
exceed $2,000.00 unless approved by the Owner, and to enter into agreements in Owner’s
name for all necessary repairs, maintenance, minor alterations, and utility services. Agent shall,
in Owner’s name and at Owner’s expense, make contracts on owner’s behalf for electricity, gas,
fuel, or water and such other services as Agent shall deem necessary or prudent for the
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operation of the Property. All utility deposits shall be the Owner’s responsibility, except that
Agent may pay same from the Operating (and/or) Reserve Account(s) at Owner’s request.
Section 10 RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this Agreement shall be that of Principal and Agent, and
all duties to be performed by Agent under this Agreement shall be for and on behalf of Owner, in
Owner's name, and for Owner account. In taking any action under this Agreement, Agent shall
be acting only as Agent for Owner, and nothing in this Agreement shall be construed as creating
a partnership, joint venture, or any other relationship between the parties to this Agreement
except that of Principal and Agent, or as requiring Agent to bear any portion of losses arising out
of or connected with the ownership or operation of the Property. Nor shall Agent at any time
during the period of this Agreement be considered a direct employee of Owner. Neither party
shall have the power to bind or obligate the other except as expressly set forth in this
Agreement, except that Agent is authorized to act with such additional authority and power as
may be necessary to carry out the spirit and intent or this Agreement.
Section 11 SAVE HARMLESS
The Owner shall save the Agent harmless from all claims, actions and judgment for
damages on account of injuries to person or property suffered or claims to have been suffered
by an employee of their person whomsoever in or about the property and to defend the Agent
against same. Owner shall not hold Agent liable for any error in judgment or for any mistake of
fact or law, or for anything which Agent may do or refrain from doing hereinafter except in cases
of willful misconduct or gross negligence. Owner agrees that Agent shall have no liability for the
existence or use by any person other than Agent or an agent of Agent of any hazardous
substance as defined by state or federal law; and Owner agrees to hold Agent harmless from
any such claims.
Section 12 LIABILITY INSURANCE
Owner shall obtain and keep in force adequate insurance against physical damage (e.g.,
fire with extended coverage endorsement, boiler and machinery, etc.) and against liability for
loss, damage, or injury to property or persons which might arise out of the occupancy,
management, operation, or maintenance of the Property. The amounts and types of insurance
shall be acceptable to both Owner and Agent, and any deductible required under such
insurance policies shall be Owner's expense. Agent shall be covered as an additional Insured
on all liability Insurance maintained with respect to the Property. Liability insurance shall be
adequate to protect the interests of both Owner and Agent and in form, substance, and amounts
reasonably satisfactory to Agent. Owner agrees to furnish Agent with certificates evidencing
such insurance or with duplicate copies of such policies within fifteen (15) days of the execution
of this Agreement. If Owner fails to do so, Agent may, but shall not.be obligated to, place said
insurance and charge the cost thereof to the Operating (and/or) Reserve Account(s). Said
policies shall provide that notice of default or cancellation shall be sent to Agent as well as
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Owner and shall require a minimum of thirty (30) days' written notice to Agent before any
cancellation of or changes to said policies.
Section 13 AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for any acts or omissions of Owner, or any
previous owners of the Property, or any previous management or other agent of either. Agent
assumes no liability for any failure of or default by any tenant in the payment of any rent or other
charges due Owner or in the performance of any obligations owed by any tenant to Owner
pursuant to any lease or otherwise. Nor does Agent assume any liability for previously unknown
violations of environmental or other regulations which may become known during the period this
Agreement is in effect. Any such regulatory violations or hazards discovered by Agent shall be
brought to the attention of Owner in writing, and Owner shall promptly cure them.
Section 14 OWNER RESPONSIBLE FOR ALL EXPENSES OF LITIGATION
Owner shall pay all expenses incurred by Agent, including, but not limited to, reasonable
attorneys' fees and Agent's costs and time, and any liability, fines, penalties or the like, in
connection with any claim, proceeding, or suit involving an alleged violation by Agent or Owner,
or both, of residential landlord tenant law or other law affecting the Property or activities related
to the Property.
14.1 FEES FOR LEGAL ADVICE
With Owner’s approval, Owner shall pay reasonable expenses incurred by Agent
in obtaining legal advice regarding compliance with any law affecting the Property or
activities related to the Property. If such expenditure also benefits others for whom Agent
in this Agreement acts in a similar capacity, Owner agrees to pay an apportioned
amount of such expense.
Section 15 AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided by Agent under this Agreement (and
exclusive of reimbursement of expenses to which Agent is entitled hereunder), Owner shall pay
Agent as follows:
15.1 FOR MANAGEMENT SERVICES
During the term of this agreement, the Owner will pay to Agent, monthly a fee
equal to-
$7,700/month for the first 12 months.
$5,500/month for months 13 through 38.
Breakdown:
FY 24 (May- June 2024 at $7,700/month): $15,400
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FY 25 (July 2024- April 2025 at $7,700/month; May- June 2025 at
$5,500/month): $88,000
FY 26 (July 2025- June 2026 at $5,500/month): $66,000
FY 27 (July 2026- June 2027 at $5,500/month): $66,000
These fees shall be collected by Agent from the Property during the month
together with any out-of-pocket expenses and any fees charged to tenants. The Agent
may pay the fee to itself as an expense of the operation. For services above and
beyond those noted above, an additional fee will be negotiated. Agent shall pay over net
funds after expenses with the monthly operating statement, except that Agent may retain
a reasonable amount in reserve if deems it prudent.
15.2 NEW LEASES FOR COMMERCIAL PROPERTY
If during the term of this agreement, a new or existing lease is procured for any
commercial portion of the subject premises, Agent will be paid a lease commission of
_5_% of the scheduled gross rental for the full term of the lease of such new tenant, and
2.5 % for renewal of existing leases.
15.3 ADDITIONAL SERVICES
Should the Agent provide any services to the Owner which are not customary
services or services not required hereunder such as, but not limited to, services related
to coordination of rehabilitation, remodeling, reconstruction or tenant improvements, tax
appeals refinancing of Project, or implementation of an asbestos abatement or
operations and maintenance plan or any other such requirements of local, state or
federal laws (“Additional Owner Services”), then a separate charge for such Additional
Services shall be shall be billed at an hourly rate or on other such basis as may be
agreed upon between the parties
15.4 LITIGATION EXPENSE
In the event of litigation between the parties to this agreement, arising out of or
relating to the terms of this agreement, including any appeal therefrom and including any
bankruptcy proceeding in which either party is a debtor, the prevailing party shall be
entitled to recover its reasonable attorney fees from the other.
Section 16 REPRESENTATIONS
Owner represents and warrants: That Owner has full power and authority to enter this
Agreement; that there are no written or oral agreements affecting the Property other than tenant
leases, copies of which have been furnished to Agent; that there are no recorded easements,
restrictions, reservations, or rights of way which adversely affect the use of the Property for the
purposes intended under this Agreement; that to the best of Owner's knowledge, the property is
zoned for the intended use; that all leasing and other permits for the operation of the Property
have been secured and are current; that the building and its construction and operation do not
violate any applicable statutes, laws, ordinances, rules, regulations, orders, or the like
(including, but not limited to, those pertaining to hazardous or toxic substances); that the
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building does not contain any asbestos, urea, formaldehyde, radon, or other toxic or hazardous
substance; and that no unsafe condition exists.
Section 17 STRUCTURAL CHANGES
Owner expressly withholds from Agent any power or authority to make any structural
changes in any building, or to make any other major alterations or additions in or to any such
building or to any equipment in any such building, or to incur any expense chargeable to Owner
other than expenses related to exercising the express powers vested in Agent through this
Agreement, without the prior written consent of the Owner.
However, such emergency repairs as may be required because of danger to life or
property, or which are immediately necessary for the preservation and safety of the Property or
the safety of the tenants and occupants thereof, or required to avoid the suspension of any
necessary service to the Property, or to comply with any applicable federal, state, or local laws,
regulations, or ordinances, shall be authorized, and Agent shall notify Owner appropriately.
Section 18 BUILDING COMPLIANCE
Agent does not assume and is given no responsibility for compliance of the Property or
any building thereon or any equipment therein with the requirements of any building codes or
with any statute, ordinance, law, or regulation of any governmental body or of any public
authority or official thereof having jurisdiction, except to notify Owner promptly or forward to
Owner promptly any complaints, warnings, notices, or summonses received by Agent relating to
such matters. Owner represents that to the best of Owner's knowledge the Property and all
such equipment comply with all such requirements, and Owner authorizes Agent to disclose the
ownership of the Property to any such officials and agrees to indemnify and hold Agent, its
representatives, servants, and employees, harmless of and from all loss, cost, expense, and
liability whatsoever which may be imposed by reason of any present or future violation or
alleged violation of such laws, ordinances, statutes, or regulations.
Section 19 TERMINATION
19.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either Owner or Agent, with or without
cause, during the initial term year or of any following term year upon the giving of a
minimum of Forty-Five (45) days prior written notice to the other party. Effective date or
termination shall be the last day of the calendar month following the minimum notification
period.
19.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, this Agreement shall terminate in any event, and
all obligations of the parties hereunder shall cease (except as to liabilities or obligations
which have accrued or arisen prior to such termination, or which accrue pursuant to
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paragraph 19.3 as a result of such termination, and obligations to insure and indemnify),
upon the occurrence of any of the following events:
(a) BREACH OF AGREEMENT--Thirty (30) days after the receipt of notice by
either party to the other specifying in detail a material breach of this Agreement, if such
breach has not been cured within said thirty (30) day period; or if such breach is of a
nature that it cannot be cured within said thirty (30) day period but can be cured within a
reasonable time thereafter, if efforts to cure such breach have not commenced or/and
such efforts are not proceeding and being continued diligently both during and after such
thirty (30) day period prior to the breach being cured. HOWEVER, the breach of any
obligation of either party hereunder to pay any monies to the other party under the terms
of this Agreement shall be deemed to be curable within thirty (30) days.
(b) FAILURE TO ACT, ETC.--ln the event that any insurance required of Owner
is not maintained without any lapse, or it is alleged or charged that the Property, or any
portion thereof, or any act or failure to act by Owner, its agent and employees with
respect to the Property, fails to comply with any law or regulation, or any order or ruling
of any public authority, and Agent, in its sole discretion, considers that the action or
position of Owner or its representatives with respect thereto may result in damage or
liability to Agent, or disciplinary proceeding with respect to Agent's license, Agent shall
have the right to terminate this Agreement at any time by written notice to Owner of its
election to do so, which termination shall be effective upon the service of such notice.
Such termination shall not release the indemnities of Owner set forth herein.
(c) EXCESSIVE DAMAGE--Upon the destruction of or substantial damage to the
Property by any cause, or the taking of all or a substantial portion of the Property by
eminent domain, in either case making it impossible or impracticable to continue
operation of the Property.
(d) INADEQUATE INSURANCE--lf Agent deems that the liability insurance
obtained by Owner per section 12 is not reasonably satisfactory to protect its interest
under this Agreement, and if Owner and Agent cannot agree as to adequate insurance,
Agent shall have the right to cancel this Agreement upon the service of notice to Owner.
19.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement before the end of the initial term or any
subsequent term year as provided in paragraph 19.1 above for any reason other than for
a breach by Agent under paragraph 19.2(a) above, or if (ii) Agent terminates this
Agreement for a breach by Owner under para- graph 19.2(a) above or pursuant to the
provisions of paragraphs 19.2(b) or 19.2(d) above, then in any such event, Owner shall
be obligated to pay Agent compensation through the last effective day of the contract.
19.4 OWNER RESPONSIBLE FOR PAYMENTS
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Upon termination of or withdrawal from this Agreement, owner shall assume the
obligations of any contract or outstanding bill executed by Agent under this Agreement
for and on behalf of Owner and responsibility for payment of all unpaid bills. In addition,
Owner shall furnish Agent security, in an amount satisfactory to Agent, against any
obligations or liabilities which Agent may have properly incurred on Owner's behalf under
this Agreement.
Agent may withhold funds for ninety (90) days after the end of the month in which
this Agreement is terminated, in order to pay bills previously incurred but not yet invoiced
and to close accounts. Agent shall deliver to Owner, within ninety (90) days after the end
of the month in which this Agreement is terminated, any balance of monies due Owner
or of tenant security deposits, or both, which were held by Agent with respect to the
Property, as well as a final accounting reflecting the balance of income and expenses
with respect to the Property as of the date of termination or withdrawal, and all records,
contracts, leases, receipts for deposits, and other papers or documents which pertain to
the Property.
Section 20 INDEMNIFICATION SURVIVES TERMINATION
All representations and warranties of the parties contained herein shall survive the
termination of this Agreement. All provisions of this Agreement that require Owner to have
insured or to defend, reimburse, or indemnify Agent (including, but not limited to, paragraphs
2.1, 2.3, 5, 10, 12, 13, 14, 15.7, 18, 19.3, and 19.4) shall survive any termination; and if Agent is
or becomes involved in any proceeding or litigation by reason of having been Owner's Agent,
such provisions shall apply as if this Agreement were still in effect.
Section 21 HEADINGS
All headings and subheadings employed within this Agreement and in the accompanying
List of Provisions are inserted only for convenience and ease of reference and are not to be
considered in the construction or interpretation of any provision of this Agreement.
Section 22 FORCE MAJEURE
Any delays in the performance of any obligation of Agent under this Agreement shall be
excused to the extent that such delays are caused by wars, national emergencies, natural
disasters, strikes, labor disputes, utility failures, governmental regulations, riots, adverse
weather, and other similar causes not within the control of Agent, and any time periods required
for performance shall be extended accordingly.
Section 23 COMPLETE AGREEMENT
This Agreement, including any specified attachments, constitutes the entire agreement between
Owner and Agent with respect to the management and operation of the Property and
supersedes and replaces any and all previous management agreements entered into or/and
negotiated between Owner and Agent relating to the Property covered by this Agreement. No
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change to this Agreement shall be valid unless made by supplemental written agreement
executed and approved by Owner and Agent. Except as otherwise provided herein, any and all
amendments, additions or deletions to this Agreement shall be null and void unless approved by
Owner and Agent in writing. Each party to this Agreement hereby acknowledges and agrees
that the other party has made no warranties, representations, covenants, or agreements,
express or implied, to such party, other than those expressly set forth herein, and that each
party, in entering into and executing this Agreement, has relied upon no warranties,
representations, covenants, or agreements, express or implied, to such party, other than
those expressly set forth herein.
Section 24 RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon or reserved to either of the parties to this
Agreement is intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy given under this
Agreement or now or hereafter legally existing upon the occurrence of an event of default under
this Agreement. The failure of either party to this Agreement to insist at any time upon the strict
observance or performance of any of the provisions of this Agreement, or to exercise any right
or remedy as provided in this Agreement, shall not impair any such right or remedy or be
construed as a waiver or relinquishment of such right or remedy with respect to subsequent
defaults. Every right and remedy given by this Agreement to the parties to it may be exercised
from time to time and as often as may be deemed expedient by those parties.
Section 25 APPLICABLE LAW AND PARTIAL INVALIDITY
The execution, interpretation, and performance of this Agreement shall in all respects be
controlled and governed by the laws of the State of Oregon. If any part of this Agreement shall
be declared invalid or unenforceable, Agent shall have the option to terminate this Agreement
by notice to Owner.
Section 26 NOTICES
Any notices, demands, consents, and reports necessary or provided for under this
Agreement shall be in writing and shall be addressed as follows, or at such other address as
Owner and Agent individually may specify hereafter in writing:
Agent: Campbell Commercial Real Estate
Patric Campbell
777 High St, #100
Eugene, Oregon 97401
patricc@campbellre.com
541-484-2214
Owner: City of Springfield and SEDA representative– Allie Camp
acamp@springfield-or.gov
541.726.3688
Attachment 1
Page 13 of 15
{00033167:1}
Such notice or other communication may be mailed by United States registered or
certified mail, return receipt requested, postage prepaid, and may be deposited in a United
States Post Office or a depository for the receipt of mail regularly maintained by the post
office. Such notices, demands, consents, and reports may also be delivered by hand or by
any other receipted method or means permitted by law. For purposes of this Agreement,
notices shall be deemed to have been "given" or "delivered" upon personal delivery thereof
or forty-eight (48) hours after having been deposited in the United States mails as provided
herein.
Section 27 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS
This agreement shall be binding upon the parties hereto and their respective personal
representatives, heirs, administrators, executors, successors and assigns.
SIGNATURES
City of Springfield L G Campbell Company, Inc.
A Municipal Corporation of the dba Campbell Commercial
State of Oregon Real Estate
By: By:
Name: Name:
Title: Title:
Date: Date:
Attachment 1
Page 14 of 15
{00033167:1}
EXHIBIT A
Fee Schedule for Additional Services
Additional Services as per section 15.3 of the Management Agreement must be requested by the
owner prior to incurring a fee obligation. Fees for such requested services are as follows:
1. Maintenance and repair performed by Campbell Commercial maintenance
personnel are billed at time and materials. Labor rates are currently $50.00 per
hour for general maintenance. These rates are subject to change. Maintenance
people are on-call 24 hours per day for emergency call out. Call outs between
the hours of 5:00 p.m. and 8:00 a.m. are billed at time and one half. Regular
rates apply Monday through Friday at 8:00 a.m. to 5:00 p.m.
2. All other services shall be billed at an hourly rate or on other such basis as may
be agreed upon between the parties.
Attachment 1
Page 15 of 15
CITY OF SPRINGFIELD, OREGON
RESOLUTION NO. 2022-14
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO COMMERCIAL LEASES
OF THE BOOTH KELLY PROPERTY THROUGH JULY 1, 2027
WHEREAS, ORS 271.310(1) provides that whenever a political subdivision, including the City of
Springfield, owns real property that is not needed for public use or whenever the public interest can be
furthered, the political subdivision may sell, convey, exchange, or lease for not more than 99 years all
or any part of the property to another governmental body, private individual, or corporation;
WHEREAS, ORS 271.310(4) further states that a political subdivision may lease property that is not
immediately needed for public use if the property will not be needed for public use within the period of
the lease;
WHEREAS, ORS 271.360 requires that every lease entered into pursuant to the statutes must be
authorized by ordinance or order, including resolution, of the body executing the lease and shall
provide terms and conditions as fixed and determined by the governing body;
WHEREAS, the City of Springfield owns the real property commonly referred to as the Booth Kelly Mill
site (Map &Tax Lot 17-03- 35-00-00307-1416799);
WHEREAS, the suites and other spaces within the Booth Kelly Mill site are not needed for public use
within the next five (5) years, and it is in the public interest to offer all or part of the property for lease
to other governmental bodies, private individuals, or corporations;
WHEREAS, the City Council would like to delegate its authority to enter into month-to-month leases
for all or part of the Booth Kelly Mill site to the City Manager because tenants of month-to-month
leases change regularly; and
WHEREAS, the City Council wishes to authorize the City Manager to enter into leases on the terms
and conditions as generally provided in the form of lease agreement attached as Exhibit A, or as may
be modified with approval from the City Attorney;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD:
Section 1: The City Council hereby delegates its authority to enter into month-to-month
leases of the Booth Kelly Mill site to the City Manager, upon the terms and conditions as provided in
Exhibit A or other terms and conditions approved by the City Attorney.
Section 2: The City Council hereby delegates its authority to waive penalties and interest
regarding late lease payments to the City Manager, and delegates to the City Manager the authority to
take all other enforcement actions that the City Manager determines are necessary to enforce the
terms of a lease agreement including, but not limited to, issuing notices of default, terminating
tenancies, and accounting for security deposits.
Section 3: This Resolution terminates on July 1, 2027, unless extended by further resolution
of the City Council.
Attachment 2
Page 1 of 18
Section 4: This Resolution will take effect immediately upon adoption by the Council and
approval by the Mayor.
ADOPTED by the Common Council of the City of Springfield this 18 day of April , 2022,
by a vote of 5 for and 0 against. (1 absent - Pitts)
ATTEST:
TO &
APPROVED
ASAS TO FORM
r uza-1Cra r
DATE: 4118199
City Recorder S PRI NG FI ELD CITY ATTORN EY'S OFFICE
Resolution No.2022-14Attachment 2
Page 2 of 18
Exhibit A, Page 1 of 16
COMMERCIAL LEASE AGREEMENT
Contract#
Date:Date]
Between: City of Springfield Landlord")
A Municipal Corporation of the State of Oregon
225 Fifth Street
Springfield,OR 97477
And: Tenant Name] Tenant")
303 S. 5th Street, Suite [##]
Springfield,OR 97477
Phone: [###-###-####]
Landlord leases to Tenant and Tenant leases from Landlord the following described
property(the"Premises")on the terms and conditions stated below:
Booth Kelly Center, 303 S. 5th Street, Suite[###], Springfield,Oregon 97477.
Description of leased space with approximate square footage].
Section 1. Occupancy
1.1 Oriainal Term. The original term of this lease shall commence [Date] and continue
through [End date—one year unless otherwise agreed upon] unless sooner terminated
or extended as set forth in this Lease Agreement.
1.2 Possession. Tenant's right to possession and obligations under the lease shall
commence on [Date].
1.3 Renewal. Unless Tenant notifies Landlord in writing prior to the expiration
of the initial term, this lease will automatically renew on a month-to-month basis upon
the same terms and conditions provided herein,except that rent will be adiusted as
provided in Section 2. 3. During the renewal term, this lease may be terminated by
either party without cause based upon 30 days written notice. Tenant shall have the
rEliti8 r
the tome the eptien is exeFeised.-
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 3 of 18
Exhibit A, Page 2 of 16
Section 2. Rent
2.1 Base Rent. During the original term,Tenant shall pay to Landlord base rent in the
amount of$ [Total annual rent] per year. Rent shall be paid in monthly installments of
Monthly rent] per month commencing on [Date] and continuing on the first day of
each month thereafter during the term of this Lease. Rent for any partial calendar
month will be prorated based on a thirty(30)day month for the number of days during
that partial month the premises are occupied by Tenant.
2. 2 Additional Rent. In addition to the Base Rent,Tenant shall pay all utilities(see
Section 7. 6), all real property taxes levied or assessed against the entire premises(see
Section 7.1)and all insurance premiums incurred by the Landlord for the premises(see
Section 6.1). The additional rent shall be paid by Tenant within ten(10)days after
demand therefore by Landlord; provided, however that at Landlord's sole discretion
option Tenant shall pay one twelfth of the estimated annual taxes and insurance
premiums each month with the base rent if the base rent is paid in monthly
installments.
2. 3 Base Rent for Renewal Term. 1R the n eRt that Tr.r aRt n s the FeRewal
ept+eRs, ;eR t he base rent for the renewal term shall be adjusted for the first
month of the renewal term and every 12 months thereafter, by the increase in the
Western Region C.P.I.-U City Size B based on preceding 12 months percentages
speE 1.
2.4 Security Deposit. To secure Tenant's compliance with all terms of this lease,
Tenant shall pay Landlord the sum of$[Deposit amount] as a deposit. [Ifnew/ease for
prior tenantinciude the following:Tenant and Landlord agree that the deposit paid on
date of original lease) under lease C####shall be applied to the present lease.]The
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 4 of 18
Exhibit A, Page 3 of 16
deposit shall be a debt from Landlord to Tenant, refundable within THIRTY(30)days
following expiration of the lease term or other termination not caused by Tenant's
default. 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
or any damage to premises caused by Tenants conduct, under this lease or under prior
lease C1371. Offset against the deposit shall not be an exclusive remedy in any of the
above cases, but may be invoked by Landlord,as 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 TEN (10)days following 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.
Section 3. Use of the Premises
3.1 Permitted Use.
The Tenant shall use and occupy the Premises continuously during the term of the
lease. The premises shall be used for[description of tenant's approved uses of the
leased premises] and for no other purpose without the consent of Landlord,which
consent is in Landlord's sole discretion.
There will be no storage of Tenant's merchandise, inventory, equipment or other
materials outside the leased premises. Other than the leased premises, no other areas
of Booth Kelly building or the Booth Kelly parking area and grounds shall be utilized for
storage by Tenant. [Description of any approved use of parking areas,storage aside
from vehicle parking,such as cafe parking,etc.]Tenant parking is not to exceed [#]
vehicles.
3. 2 Restrictions on Use. In connection with the use of the Premises,Tenant shall:
a) 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, but Tenant
shall not be required to make any structural changes to effect such compliance unless
such changes are required because of Tenant's specific use.
b) 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.
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 5 of 18
Exhibit A, Page 4 of 16
c) 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.
d) Refrain from loading the electrical system or floors beyond the point
considered safe by a competent engineer or architect selected by Landlord.
e) 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 prior written consent of Landlord.
f) 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. 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.
g) Tenant shall promptly take any and all actions,at its sole cost and expense,
as are necessary or appropriate to return the Premises or other private or public
facilities where Lessee Contamination is present to the condition existing prior to the
introduction of the Lessee Contamination; provided that Landlord's approval of such
actions shall first be obtained,which approval shall not be unreasonably withheld if
such actions would not potentially have any material adverse effect on the Premises or
other private or public facilities. All contractors, laboratories and engineering firms
hereinafter"Consultants")chosen by Tenant to undertake any remedial action that
may be necessary or appropriate on or about the Premises or other private or public
facilities to remediate Lessee Contamination shall be approved by Landlord prior to their
employment by Tenant,which approval will not be unreasonably withheld. Consultants
shall be licensed and bonded in accordance with all applicable laws. Duplicate copies of
all reports and findings made by Consultants with regard to the condition of the
Premises or other private or public facilities shall be delivered to Landlord concurrently
with their delivery to Tenant. Tenant shall have the work done by the Consultants at
Tenant's sole expense and shall indemnify and hold Landlord and Landlord's agents and
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 6 of 18
Exhibit A, Page 5 of 16
employees harmless from and against any and all loss,costs, liability,damage and
expense relating to or arising from any damage or injury to Tenant,the Consultants, or
the agents of either of them,and for any liability to any third party incurred by any of
them,and for any claim by any third party against Landlord,or Landlord's agents or
employees by reason of any such work conducted by Consultants
h)As used herein,the term "Hazardous Substances" means any
hazardous,toxic, infectious or radioactive substance, material or waste that has been
previously regulated during the previous tenancy of Tenant or is or becomes regulated
during the term of this lease by any Environmental Law(as defined in Section 3. 2(6)
above)or any local governmental authority,the State of Oregon,or the United States
Government for the purpose of protecting human health or the environment. The term
Hazardous Substances" includes,without limitation, petroleum oil and its fractions and
any material or substance which is designated as a hazardous substance pursuant to
the Water Pollution Control Act(33 USC Section 1317); or defined as hazardous waste
pursuant to the Resource Conservation and Recovery Act(42 USC Section 6901 et
seq.); or defined as a hazardous substance pursuant to the Comprehensive
Environmental Response,Compensation and Liability Act of 1980,as amended (42 USC
Section 9601 et seq.); or defined as a hazardous material pursuant to the provisions of
the Springfield Fire Code,as adopted by the City or County in which the subject
property is located,as amended from time to time.
Section 4. Repairs and Maintenance
4.1 Landlord's Obligations. The following shall be the responsibility of Landlord:
a) Repairs and maintenance of the roof and gutters,exterior walls(including
painting), bearing walls,structural members,floor slabs,and foundation.
b) Repair of sidewalks,driveways,curbs,shared parking areas, and areas used
in common by Tenant and Landlord or tenants of other portions of the same building.
c) Repair and maintenance of exterior water,sewage,gas,and electrical
services up to the point of entry to the leased Premises.
d) Repair of the heating and system other than ordinary maintenance.
4.2 Tenant's Obligations. The following shall be the responsibility of Tenant:
a) Repair of interior walls,ceilings,doors,windows,and related hardware, light
fixtures,plumbing fixtures,switches,and wiring and plumbing from the point of entry
to the Premises.
b) Any repairs necessitated by the negligence of Tenant,its agents, employees,
and invitees, including repairs that would otherwise be the responsibility of Landlord.
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 7 of 18
Exhibit A, Page 6 of 16
c) Ordinary maintenance of the heating system and any repairs necessary
because of improper maintenance.
d) Any repairs or alterations required under Tenant's obligation to comply with
laws and regulations as set forth in Section 3.2(a).
e) Repair of leased parking area including paving,striping and fencing.
f) All other repairs to the premises which Landlord is not required to make
under Section 4.1.
4.3 Landlord's Interference with Tenant. In performing any repairs,replacements,
alterations,or other work performed on or around the Premises, Landlord shall not
cause unreasonable interference with use of the Premises by Tenant. Tenant shall
have no right to an abatement of rent nor any claim against Landlord for any
inconvenience or disturbance resulting from Landlord's activities performed in
conformance with the requirement of this provision.
4. 4 Reimbursement for Reoairs Assumed. If either party fails or refuses to make
repairs that are required by this Section,the other party may make the repairs and
charge the actual costs of repairs to the first party. Such expenditures by Landlord
shall be reimbursed by Tenant on demand together with interest at the rate of 120/0
per annum from the date of expenditure by Landlord. Such expenditures by Tenant
may be deducted from rent and other payments subsequently becoming due or, at
Tenant's election, collected directly from Landlord. Except in an emergency creating
an immediate risk of personal injury or property damage, neither parry may perform
repairs which are the obligation of the other party and charge the other parry for the
resulting expense unless at least 15 business days before work is commenced,the
defaulting parry is given notice in writing outlining with reasonable particularity the
repairs required,and such parry fails within that time to initiate such repairs in good
faith.
4.5 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,which consent
shall not be unreasonably withheld. All alterations shall be made in a good and
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 8 of 18
Exhibit A, Page 7 of 16
workmanlike manner,and in compliance with applicable laws and building codes.
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. Improvements and alterations installed by Tenant
shall,at Landlord's option,be removed by Tenant and the premises restored unless
the applicable Landlord's consent or work sheet specifically provides otherwise.
Section 6. Fire Insurance
6.1 Fire Insurance. Landlord shall keep the Premises insured on a standard all risks
of loss insurance policy including,at Landlord's option,earthquake and flood coverage.
Tenant shall pay for this insurance as additional rent in accordance with Section 2. 2.
Tenant may carry,and shall bear the expense of,any similar insurance insuring the
personal property of Tenant and Tenant improvements on the Premises. Tenant shall
purchase business interruption insurance in an amount sufficient to pay for one year's
rent.
6.2 Waiver of Subroaation. Neither the Landlord nor the Tenant shall be liable to the
other for loss arising out of damage to or destruction of the Premises,or the building
or improvements of which the Premises are a part or with which they are connected,
or the contents of any thereof,when such loss is caused by any of the perils which are
or could be included within or insured against by a standard all risk property insurance
policy. All such claims for any and all loss, however caused, hereby are waived. Such
absence of liability shall exist whether or not the damage or destruction is caused by
the negligence of either Landlord or Tenant or by any of their respective agents,
servants,officials,or employees. It is the intention and agreement that the Landlord
and the Tenant shall provide their own property insurance and that both parties shall
look to their respective insurance carriers for reimbursement for any such loss,and
further, that the insurance carriers involved shall not be entitled to subrogation under
any circumstances against any party to this lease. Neither the Landlord nor the
Tenant shall have any interest or claim in the other's insurance policy or policies,or
the proceeds thereof, unless specifically covered therein as a joint insured.
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 all real property taxes and special assessments
levied against the premises as additional rent in accordance with Section 2. 2.
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
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 9 of 18
Exhibit A, Page 8 of 16
treated the same as general real property taxes as set forth in Section 7.1.
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 any
risk that Landlord's interest in the Premises will be foreclosed for nonpayment.
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 on
an equitable basis, 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 8. 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 and shall be performed in
accordance with the provisions of Section 4.
8.2 Destruction. If the Premises are destroyed or damaged such that the cost of
repair exceeds 25%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
00023566:1} C####-Commercial Lease Agreement:[Tenant Name]
Resolution No.2022-14Attachment 2
Page 10 of 18
Exhibit A, Page 9 of 16
reasonable control.
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.
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:
a) 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.
b) 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.
c) 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.
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
title vests in the condemning authorities. 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 City Eminent Domain. Nothing in this Lease shall preclude the City of Springfield
from exercising its power of eminent domain to acquire the interest of Tenant in this
Lease.
Section 10. Liability and Indemnity
10.1 Liens. 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
12%per annum from the date expended by Landlord and shall be payable on
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Resolution No.2022-14Attachment 2
Page 11 of 18
Exhibit A, Page 10 of 16
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.
10.2 Indemnification. Tenant shall defend, indemnify and hold harmless 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.
10. 3 Liability Insurance. Before taking possession of the Premises,Tenant shall
procure and thereafter during the term of the lease shall continue to carry the
following insurance,whose A.M. Best rating is A-or better,at Tenant's cost:
Commercial General Liability Insurance(occurrence version) in a responsible
company, with limits of not less than $2,000,000 per single claimant per occurrence
and$3,000,000 in the aggregate. Such insurance shall cover all risks arising directly
or indirectly out of Tenant's activities on or any condition of the Premises,and shall
name Landlord as an additional insured. A Certificate evidencing such insurance and
bearing endorsement requiring 30 days written notice to Landlord prior to any
material change or cancellation shall be furnished to Landlord prior to Tenant's
occupancy of the Premises. Landlord's liability insurance shall be excess of and not
contributing with Tenant's liability coverage. Tenant understands that Landlord is a
public entity subject to the requirements of the Oregon Governmental Tort Claims
Act, ORS 30.260 et seq. In the event that Landlord's financial obligations or liabilities
are modified by any amendment to the liability limits imposed by the Oregon
Governmental Tort Claims Act,Tenant agrees that the limits regarding liability
insurance set forth in this Section 10. 3 will be modified to conform to such limits.
Tenant and Landlord shall sign an amendment to this lease incorporating such
modification. All limits required by this Section 10.3 may be satisfied by a
combination of Comprehensive General Liability and Excess Liability policies.
Section 11. Assignment and Subletting
11.1 No Assignment. 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. If Tenant is a corporation or
partnership,this provision shall apply to any transfer of a majority voting interest in
stock or partnership interest of Tenant. No consent in one instance shall prevent the
provision from applying to a subsequent instance. Landlord shall consent to a
transaction covered by this provision when withholding such consent would be
unreasonable in the circumstances.
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Exhibit A, Page 11 of 16
Section 12. Default
The following shall be events of default:
12.1 Default in Rent. Failure of Tenant to pay any rent or other charge within 10
days after it is due. If Tenant defaults in the payment of rent due and payable by
Tenant and such default continues for 10 days after Landlord has given Tenant notice
specifying the same; provided,however, during any 12 month period,Tenant shall be
entitled to only 2 notices as set forth in this section and any subsequent failure to pay
rent when due and payable shall be a default without requirement of notice.
12.2 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.
12.3 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 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.
Section 13. Remedies on Default
13.1 Termination. In the event of a 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.
13.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises
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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.
13.3 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:
a) 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.
b) 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 13.5,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.
c) 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 present value 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.
13.4 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.
13.5 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 twelve percent(12%) per 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.
13.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall
not exclude any other remedy available to Landlord under applicable law.
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Exhibit A, Page 13 of 16
Section 14. Surrender at Expiration
14.1 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 require. 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.
14.2 Fixtures. 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.
a) 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, 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.
14.3 Holdover. 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.
Section 15. Miscellaneous
15.1 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
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performance of the same provision in the future or of any other provision.
15.2 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 or arbitrator may adjudge reasonable as attorney fees at
arbitration,at trial,and on any appeals.
15.3 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 to
the following address,or to such other address as specified by that party in writing:
To Landlord:City Manager's Office
City of Springfield
225 Fifth Street
Springfield,OR 97477
Phone: 541.726.3700
To Tenant: Tenant Name]
Tenant Mailing Address]
PH: ###-###-####
EMAIL: @
15.4 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
respective successors and assigns.
15.5 Recordation. This lease,or any memorandum thereof,shall not be recorded
without the prior express written consent of Landlord.
15.6 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.
15.7 Interest on Rent/Late Payment and Other Charaes. 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 12%per annum 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 ten 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
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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.
15.8 Time of Essence. Time is of the essence of the performance of each of Tenant's
obligations under this lease.
15.9 Oregon Law. This agreement is subject to,and shall be interpreted in accordance
with,the laws of the State of Oregon.
15.10 Assignment/Sublet. This Lease will not be assigned, subleased,or otherwise
transferred except with the consent of Landlord,which consent may be granted or
denied in Landlord's sole discretion. Any transfer of an ownership interest in Tenant of
fifty percent(50%)or more will be deemed an assignment subject to this Section
15.10. This Lease may be assigned by Landlord without the consent of Tenant.
15.11 Soil/Waste. Tenant will not store,treat,deposit, place,or dispose of treated or
contaminated soil, industry by-products,or any other form of waste on the Property or
Premises,without the prior written consent of Landlord,which consent may be granted
or denied in Landlord's sole discretion.
15.12 Landlord Consent or Action. In the event this Lease is silent on the standard for
any consent,approval,determination,or similar discretionary action,the standard is the
sole discretion of Landlord, rather than any standard of implied good faith or
reasonableness. If Tenant requests Landlord's consent or approval under any provision
of the Lease and Landlord fails or refused to give the consent or approval,Tenant will
not be entitled to any damages as a result of the failure or refusal,whether or not
unreasonable. In the event Landlord has expressly agreed, in writing, not to act
unreasonably in withholding its consent or may not unreasonably withhold its consent
as a matter of law, and Landlord has, in fact,acted unreasonably in either of those
instances,Tenant's sole remedy will be an action for specific performance or injunction.
Whenever consent,approval,or direction by Landlord is required under the terms
contained herein,all such consent,approval,or direction must be received, in writing,
from the Property Management Coordinator of Landlord.
15.13 Subordination. This Lease is subordinate to any ground lease, mortgage,deed
of trust,or other hypothecation or security device(collectively, "Security Device"), now
or hereafter placed on the Property,to any and all advances made on the security
thereof,and to all renewals, modifications,and extensions thereof. Tenant agrees that
the holders of any Security Devices(in this Lease together referred to as"Lender")
have no liability or obligation to perform any of the obligations of Landlord under this
Lease. Tenant consents to any and all future mortgages or encumbrances which
Landlord may place on the premises.
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15.14 Signage. Subject to the consent of Landlord,Tenant will be permitted to install
signage that is in compliance with local sign ordinances.
IN WITNESS WHEREOF,the parties have executed this Commercial Lease Agreement to
be effective the date first set forth above.
Landlord: Tenant:
CITY OF SPRINGFIELD Tenant Name]
By: Nancy Newton,City Manager By: [Signer name,signer position]
GUARANTEE
Guarantor, [Name of Guarantor as an individual], unconditionally and irrevocably
guarantees the performance by[Tenant name] (Tenant)of each and every obligation
by Tenant under the Lease described above. This guarantee shall be continuing and
shall terminate only upon the satisfaction by Tenant of each and every one of Tenant's
obligations under this Lease in accordance with its terms, including but not limited to
payment of the amount due. I, myself,and my heirs,successors and assigns waive
notice of acceptance, notice of non-payment, protest and notice of protest with respect
to the obligation covered by the Lease.
This guarantee shall bind Guarantor jointly and severally and his respective heirs,
personal representatives,and assigns. In the event of any action to enforce any of the
terms or conditions of this guaranty,the prevailing party or parties shall be entitled to
recover from the other party or parties' reasonable attorney fees fixed by the trial court
and all appellate courts.
GUARANTOR:
Name: [ Name of Guarantor as an individual] Date
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