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HomeMy WebLinkAbout31-91 RESOLUTION• RESOLUTION NO. 31-91 7 A RESOLUTION AUTHORIZING THE EXECUTION OF LEASE/OPTION AGREEMENT. WHEREAS, Lessor has provided funds collected from non -regular fee and tax revenues to construct certain educational facilities; and, WHEREAS, said. educational facilities will be constructed adjoing existing education facilities owned by Lessee; and, WHEREAS, Lessee desires to lease'the educational facilities constructed and currently jointly owned by Lessor and Lessee; and, WHEREAS, Lessor is willing to lease Lessor's interest in said educational facilities to Lessee subject to the terms of this agreement. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section_1. That the Mayor and City Clerk are hereby authorized and directed to execute the Lease/Option Agreement between the City of Fayetteville, Arkansas and Fayetteville School District No. 1, a copy of which is attached hereto and made a part hereof. t . PASSED AND APPROVED this 19th day of Februarv. , 1991. s• r yATTEST: S .may . e0' ' City Cl rk-- ''E'fY ' Aj1 NV . `O • • • ;� LEASE/OPTION AGREEMENT This LEASE/OPTION executed this 19th day of February, 1991, and to be effective upon completion of the educational - facilities referenced herein, by and between the City of Fayetteville, Arkansas, hereinafter called "Lessor" and Fayetteville School District No. 1, hereinafter called "Lessee." WHEREAS, Lessor has provided funds collected from non -regular fees and tax revenues to construct certain educational facilities; and, WHEREAS, said educational facilities will be constructed adjoining existing educational facilities owned by Lessee; and, WHEREAS, Lessee desires to lease the educational facilities constructed and currently jointly owned by Lessor and Lessee; and, WHEREAS, Lessor is willing to lease Lessor's interest in said educational facilities to Lessee subject to the terms of this agreement. NOW, THEREFORE, LESSOR AND LESSEE HEREBY MUTUALLY AGREE: 1. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, Lessor's interest in the educational facilities constructed and currently jointly owned by Lessor and Lessee on the real properties described in Exhibit "A" attached hereto and made a part hereof. 2. The term of this lease shall be 20 years commencing on completion of the educational facilities referenced herein; the execution date hereof; provided, this lease shall automatically be extended for four (4) additional terms of 20 years each unless Lessor or Lessee serve written notice of termination at least 180 days prior to the expiration date of the initial term or any successive term. 3. Lessee shall pay Lessor fluctuating annual lease payments equivalent to the increase in the annual ad valorem tax, or payment in lieu of tax revenues received by Lessee during the current school year from construction of new industrial facilities, or the construction of new additions to existing industrial facilities, or the construction of new commercial facilities, or the addition to existing commercial facilities, exceeding $1,000,000 in assessed value per new construction of industrial and commercial facilities or new addition to existing industrial and commercial facilities within the geographical area of Fayetteville School District No. 1 less the proportion of growth revenue required by Arkansas statutes to be expended for employee salaries and benefits; provided, the lease payments due hereunder shall continue on an annual basis until the equivalent of. 100% of the first year growth revenue from such facilities shall have been paid. It is specifically understood that the aforementioned $1,000,000 limitation applies only to new commercial and industrial construction and expansion and not construction or expansion of a residential nature. If no increase in the annual ad valorem tax from such facilities is received by the Lessee (and no continuing payment is required based on an earlier increase in the ad valorem tax from such facilities), Lessee shall not owe Lessor any lease payment for the use of the demised premises in such year. The. term "industrial facilities," as used herein, shall mean, but is not 2 limited to, manufacturing facilities, warehouses, distribution facilities, repair and maintenance facilities and corporate and management offices for industrial facilities. It is further understood that the parties agree that the intent of the foregoing provision is that the Lessee shall not suffer a net loss of revenue in paying any lease payments pursuant to the terms of this agreement. 4. Lessor shall have the option, at any time before Lessee exercises its option under this agreement, to purchase the Lessee's interest in the demised educational facility or any portion thereof on a dollar for dollar basis. 5. Lessee shall have the option, at any time after the completion of construction, to purchase the Lessor's interest in the demised educational facility for the sum of ONE DOLLAR ($1.00). 6. At all times during the term of this lease, Lessee shall maintain the demised premises in good condition at Lessee's sole expense. Lessee shall also be responsible for repairs to the demised premises at Lessee's sole expense. Lessor shall have the right to inspect the demised premises at all times. 7. At all times during the term of this lease, Lessee shall maintain, at Lessee's sole expense, fire and extended coverage insurance on the demised premises in an amount equivalent to the replacement costs of said premises. Lessor shall be named as an additional insured under the insurance policy required herein or a separate certificate shall be issued providing coverage to the Lessor for such occurrences and amounts. Should the demised premises be damaged ordestroyed by any cause covered by said insurance policy, Lessee may use the insurance proceeds to repair or reconstruct said educational facilities or to construct a new educational facility, at its option. 8. Lessee shall pay the cost of all utility services to the demised premises, including but not limited to, water, sewer, sanitation, electricity, natural gas, telephone, and cable television. 9. Should Lessee fail to make the payment due hereunder, including an annual lease. payment, an insurance premium payment, a maintenance or repair bill, or a utility bill, Lessor shall have the right to make such payment, to charge the cost to Lessee, and to maintain an action against Lessee in a court of law for said cost should Lessee fail to reimburse Lessor within 30 days from receipt of written demand for reimbursement. 10. All revenues received by lessor under this lease shall be deposited into an interest bearing account designated the "Fayetteville Economic Development Revolving Fund" and shall be used in such manner as the Fayetteville City Board of Directors may determine necessary to stimulate economic development in that geographical part of the City of Fayetteville that is located within the boundaries of Fayetteville School District No. 1. Such use may include, but shall not be limited to, expenditures for improving the Fayetteville Industrial Park, developing new industrial areas, water or sewer service, service or access roads to industry, and tourism. The•Board may appoint an advisory board 4 or commission to assist them in determining the use of such revenues. Lessor shall provide an annual report to Lessee within ninety (90) days following the end of each calendar year during the term hereof expenditures Fund. containing information related to the income and of the Fayetteville Economic Development Revolving 11. The "WHEREAS" clauses to this agreement are a substantive portion of this document and are incorporated by reference herein. 12. If any term or other provision of this agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this agreement shall nevertheless remain in full force and effect. IN WITNESS WHEREOF, this LEASE/OPTION has been executed on the date first above written. BY ATTEST: BY 42:4 0 City erk�is sy CITY OF FAYETTEVILLE, ARKANSAS Fred Vorsanger, (rlhyor FAYETTEVILLE SCHOOL DISTRICT NO. 1 BY -44 7dy McDonald, President Sue Gohn, Secretary fsdlease.rm EXHIBIT "A" TO LEASE/OPTION AGREEMENT A part of the SW; of the SA of Section 16, T -16-N, R -30-W, Fayetteville, Washington County, Arkansas, described as beginning at the intersection of the existing West Right -of - Way of Buchanan Street and the existing South Right -of -Way of Stone Street; thence along said Right -of -Way of Buchanan Street, South 413.50 feet; thence N 89°25'41" W 253.35 feet; thence N 0°34'19" E 254 feet; thence S 89°25'41" E 31.5 feet; thence N 0°34'19" E 157.3 feet to the said South Right -of -Way of Stone Street; thence along said Right -of -Way, East 217.73 feet to the point of beginning, containing 2.265 acres, more or less. EXHIBIT "A" TO LEASE/OPTION AGREEMENT A part of the SW; of the SW; of Section 16, T -16-N, R -30-W, Fayetteville, Washington County, Arkansas, described as beginning at the intersection of the existing West Right -of - Way of Buchanan Street and the existing South Right -of -Way of Stone Street; thence along said Right -of -Way of Buchanan Street, South 413.50 feet; thence N 89°25'41" W 253.35 feet; thence N 0°34'19" E 254 feet; thence S 89°25'41" E 31.5 feet; thence N 0°34'19" E 157.3 feet to the said South Right -of -Way of Stone Street; thence along said Right -of -Way, East 217.73 feet to the point of beginning, containing 2.265 acres, more or less. • fees and, RESOLUTION AUTHORIFING THE EXECUTION OF LEASE/OPTION AGREEMENT WHEREAS, Lessor has and tax revenues to provided funds collected from non -regular construct certain educational facilities; WHEREAS, said educational facilities will be constructed adjoining existing educational facilities owned by Lessee; and, WHEREAS, Lessee desires to lease the educational facilities constructed and currently jointly owned by Lessor and Lessee; and, WHEREAS, Lessor is willing to lease Lessor's interest in said educational facilities to Lessee subject to the terms of this agreement. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF EDUCATION OF FAYETTEVILLE SCHOOL DISTRICT NO. 1: The President and Secretary of the Fayetteville Board of Education are hereby authorized and directed to execute the Lease/Option Agreement between the City of Fayetteville, Arkansas and Fayetteville School District No. 1, hereto`and made a part hereof. ADOPTED this Sue Gohn, Secretary fsdreso2. rm a copy of which is attached day of February, 1991. Judy McDonald, President LEASE/OPTION AGREEMENT This LEASE/OPTION executed this 19th day of February, 1991, and to be effective upon completion of the educational facilities referenced herein, by and between the City of Fayetteville, Arkansas, hereinafter called "Lessor" and Fayetteville School District No. 1, hereinafter called "Lessee." WHEREAS, Lessor has provided funds collected from non -regular fees and tax revenues to construct certain educational facilities; and, WHEREAS, said educational facilities will be constructed adjoining existing educational facilities owned by Lessee; and, WHEREAS, Lessee desires to lease the educational facilities constructed and currently jointly owned by Lessor and Lessee; and, WHEREAS, Lessor is willing to lease Lessor's interest in said educational facilities to Lessee subject to the terms of this agreement. NOW, THEREFORE, LESSOR AND LESSEE HEREBY MUTUALLY AGREE: 1. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, Lessor's interest in the educational facilities constructed and currently jointly owned by Lessor and Lessee on the real properties described in Exhibit "A" attached hereto and made a part hereof. 2. The term of this lease shall be 20 years commencing on completion of the educational facilities referenced herein; the execution date hereof; provided, this lease shall automatically be extended for four (4) additional terms of 20 years each unless Lessor or Lessee serve written notice of termination at least 180 days prior to the expiration date of the initial term or any successive term. 3. Lessee shall pay Lessor fluctuating annual lease payments equivalent to the increase in the annual ad valorem tax, or payment in lieu of tax revenues received by Lessee during the current school year from construction of new industrial facilities, or the construction of new additions to existing industrial facilities, or the construction of new commercial facilities, or the addition to existing commercial facilities, exceeding $1,000,000 in assessed value per new construction of industrial and commercial facilities or new addition to existing industrial and commercial facilities within the geographical area of Fayetteville School District No. 1 less the proportion of growth revenue required by Arkansas statutes to be expended for employee salaries and benefits; provided, the lease payments due hereunder shall continue on an annual basis until the equivalent of 100% of the first year growth revenue from such facilities shall have been paid. It is specifically understood that the aforementioned $1,000,000 limitation applies only to new commercial and industrial construction and expansion and not construction or expansion of a residential nature. If no increase in the annual ad valorem tax from such facilities is received by the Lessee (and no continuing payment is required based on an earlier increase in the ad valorem tax from such facilities), Lessee shall not owe Lessor any lease payment for the use of the demised premises in such year. The term "industrial facilities," as used herein, shall mean, but is not 2 limited to, manufacturing facilities, warehouses, distribution facilities, repair and maintenance facilities and corporate and management offices for industrial facilities. It is further understood that the parties agree that the intent of the foregoing provision is that the Lessee shall not suffer a net loss of revenue in paying any lease payments pursuant to the terms of this agreement. 4. Lessor shall have the option, at any time before Lessee exercises its option under this agreement, to purchase the Lessee's interest in the demised educational facility or any portion thereof on a dollar for dollar basis. 5. Lessee shall have the option, at any time after the completion of construction, to purchase the Lessor's interest in the demised educational facility for the sum of ONE DOLLAR ($1.00). 6. At all times during the term of this lease, Lessee shall maintain the demised premises in good condition at Lessee's sole expense. Lessee shall also be responsible for repairs to the demised premises at Lessee's sole expense. Lessor shall have the right to inspect the demised premises at all times. 7. At all times during the term of this lease, Lessee shall maintain, at Lessee's sole expense, fire and extended coverage insurance on the demised premises in an amount equivalent to the replacement costs of said premises. Lessor shall be named as an additional insured under the insurance policy required herein or a separate certificate shall be issued providing coverage to the Lessor for such occurrences and amounts. Should the demised premises be damaged or destroyed by any cause covered by said insurance policy, Lessee may use the insurance proceeds to repair or reconstruct said educational facilities or to construct a new educational facility, at its option. 8. Lessee shall pay the cost of all utility services to the demised premises, including but not limited to, water, sewer, sanitation, electricity, natural gas, telephone, and cable television. 9. Should Lessee fail to make the payment due hereunder, including an annual lease payment, an insurance premium payment, a maintenance or repair bill, or a utility bill, Lessor shall have the right to make such payment, to charge the cost to Lessee, and to maintain an action against Lessee in a court of law for said cost should Lessee fail to reimburse Lessor within 30 days from receipt of written demand for reimbursement. 10. All revenues received by lessor under this lease shall be deposited into an interest bearing account designated the "Fayetteville Economic Development Revolving Fund" and shall be used in such manner as the Fayetteville City Board of Directors may determine necessary to stimulate economic development in that geographical part of the City of Fayetteville that is located within the boundaries of Fayetteville School District No. 1. Such use may include, but shall not be limited to, expenditures for improving the Fayetteville Industrial Park, developing new industrial areas, water or sewer service, service or access roads to industry, and tourism. The Board may appoint an advisory board • or commission to assist them in determining the use of such revenues. Lessor shall provide an annual report to Lessee within ninety (90) days following the end of each calendar year during the term hereof expenditures Fund. containing information related of the Fayetteville Economic to the income and Development Revolving 11. The "WHEREAS" clauses to this agreement are a substantive portion of this document and are incorporated by reference herein. 12. If any term or other provision of this agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this agreement shall nevertheless remain in full force and effect. IN WITNESS WHEREOF, this LEASE/OPTION has been executed on the date first above written. .. "ABY t;`f CitytA �Ci Sue Gohn, Secretary cla BY CITY OF FAAYEETTEVILLE, ARKANSAS Fred Vorsanger,`"Mayor FAYETTEVILLE SCHOOL DISTRICT NO. 1 y McDonald, President fsdlease. rm