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HomeMy WebLinkAbout112-04 RESOLUTIONLEASE This Agreement, made and entered into this 20th day of July, 2004, by and between the City of Fayetteville of Fayetteville, whose address is 113 West Mountain and OPO Enterprises, Inc. whose address is 1 West Center, Fayetteville, Arkansas, 72701. WITNESSETH: 1. LEASED PREMISES. For and in consideration of the rents, covenants and agreements herein entered into and agreed upon by OPO Enterprises, Inc as obligations to the City of Fayetteville, the City of Fayetteville leases to OPO Enterprises, Inc., subject to the terms and conditions contained herein, the improved seating area adjoining the old Post Office Building within the fence containing approximately 1,676.16 square feet more or less, situated in Washington County, Arkansas as shown by the Site Plan of Wittenberg, Delony & Davidson, Inc. as attached as Exhibit A. To have and to hold said premises unto said OPO Enterprises, Inc. for and during the term herein stated, subject to the covenants, terms, coriditions and liens herein contained. 2. TERM. This lease shall commence on September 1, 2004 and shall extend for an initial term of two (2) years. If OPO Enterprises, Inc. shall have fully performed every agreement and covenant on OPO Enterprises, Inc. part to have been kept and performed under the term of this lease at the time of exercise and at the time of renewal, OPO Enterprises, Inc. is hereby granted the right if mutually agreeable with the City of Fayetteville and option to extend this lease, upon the same terms, for an additional period of two (2) years, with such option to be exercised in writing by OPO Enterprises, Inc. not later than one hundred eighty (180) days prior to the expiration of the basic or original term of this lease OPO Enterprises, Inc. may extend for up to four additional' two (2) year extension periods utilizing the same procedures outlined above if mutually agreed to by both OPO Enterprises, Inc. and City of Fayetteville for a total lease period of twelve (12) years. 3. RENT. OPO Enterprises, Inc. agrees to pay to City of Fayetteville the annual rental rate of $2,400.00 payable in monthly installments of $200.00 each, to be paid in advance beginning on the first day of August, 2004 and on the first day of each and every month thereafter. No security deposit shall be required. • 4. USE. OPO Enterprises, Inc. agrees to use the leased premises for the purpose of operating an outdoor dining area and for no other purpose or purposes without the written consent of the City of Fayetteville having been obtained in advance. 5. CONSTRUCTION OF IMPROVEMENTS. Any alteration of the improvements within the City of Fayetteville's leased premises must be approved by the Mayor prior to such alteration. 6. INGRESS AND EGRESS. Except for emergency and handicapped access, all ingress and egress to and from the leased premises shall be through the Old Post Office building. Handicapped access is limited to the east area of the leased premises. 7. MUSIC. OPO Enterprises, Inc. agrees that only live non -amplified music will be permitted on the leased premises which shall not be loud enough to disturb persons enjoying the Square Gardens. 8. SIGNS AND ADVERTISING. No sign, picture, advertisement, or notice shall be displayed on any part of the leased premises visible to the public without the previous consent, in writing, or the City of Fayetteville. 9. LITTER REMOVAL. OPO Enterprises, Inc. shall provide daily litter removal from the portion of the Town Square in front of its public entrances. 10. NON -SUCCESSION. This lease agreement shall inure only to the benefit of and be binding upon the parties hereto and not to their respective heirs, successors and assigns. This lease is not assignable without the consent of the City of Fayetteville. 11. TAXES. OPO Enterprises, Inc. shall pay any and all ad valorem taxes special improvement district taxes levied and assessed against said premises and the improvements located thereon during the term of this lease 12. COMPLIANCE WITH LAWS. OPO Enterprises, Inc. agrees not to violate any law, ordinance, rule or regulation of any government authority having jurisdiction of the leased premises. 13. INSURANCE OF OPO ENTERPRISES, INC.'S PROPERTY. OPO Enterprises, Inc. shall be solely responsible for maintaining insurance on its property, including but not limited to movables, trade fixtures installed by OPO Enterprises, Inc., furniture, furnishings and inventory. 14. RIGHT OF INSPECTION. The City of Fayetteville shall have the right, in person or through the City of Fayetteville's duly authorized representative, at all reasonable times to inspect the leased premises. 2 • • 15. ALTERATIONS. OPO Enterprises, Inc. shall have the right and privilege to make, at OPO Enterprises, Inc.'s expense, ordinary repairs and alterations to the leased premises; however, no alterations shall be made without the prior written consent of the City of Fayetteville. 16. FIXTURES. All trade fixtures installed by OPO Enterprises, Inc. or acquired by OPO Enterprises, Inc. independently of this lease shall remain OPO Enterprises, Inc.'s property and may be removed by OPO Enterprises, Inc. at the expiration of this lease, provided, however, OPO Enterprises, Inc. shall restore the leased premises and repair any damage thereto caused by such removal. 17. ACCEPTANCE OF PREMISES. The OPO Enterprises, Inc. acknowledges it has inspected the premises and determined them adequate for its intended uses. OPO Enterprises, Inc. accepts the premises in their current condition. 18. MAINTENANCE OF LEASED PREMISES. OPO Enterprises, Inc. shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by OPO Enterprises, Inc. in connection with utility services of whatever kind or nature including any sewer charges and pickup of OPO Enterprises, Inc.'s trash and garbage. OPO Enterprises, Inc. shall be responsible for maintaining the improvements upon the leased premises in a satisfactory condition and the premises shall, at all times, be maintained in a neat and orderly condition. OPO Enterprises, Inc.'s business operations will be carried on in accordance with the highest standards for such businesses, particularly in the areas of cleanliness and service. 19. INDEMNIFICATION OF CITY OF FAYETTEVILLE. OPO Enterprises, Inc. shall defend, indemnify and hold the City of Fayetteville harmless against any expense, claim, loss or liability as the result of any breach by OPO Enterprises, Inc., OPO Enterprises, Inc.'s agents, servant, employees, customers, visitors or licensees, of any covenant or condition of this lease, or as a result of OPO Enterprises, Inc.'s use or occupancy of the demised premises, or the carelessness, negligence of improper conduct of OPO Enterprises, Inc., OPO Enterprises, Inc.'s agents, servants, employees, customers, visitors or licensees. To facilitate the provisions hereof, OPO Enterprises, Inc. shall keep and maintain at all times during the term of this lease, or any extension thereof, in full force and effect with a company or companies acceptable to City of Fayetteville, insurance against third party liability by reason of OPO Enterprises, Inc.'s occupancy of the demised premises with limits of liability thereunder of not less 3 • than $100,000.00 per person and $500,000.00 per accident with $500,000.00 coverage for property damage. 20. RETURN OF LEASED PROPERTY. At the end of the term of this lease, or upon any other earlier termination, OPO Enterprises, Inc. agrees promptly and peaceably to restore possession of the leased premises to the City of Fayetteville in as good condition as they were when delivered to OPO Enterprises, Inc., ordinary wear and tear excepted. To accommodate this covenant, OPO Enterprises, Inc. hereby waives any and all notice to which OPO Enterprises, Inc. may be entitled under the laws of the State of Arkansas as a prerequisite to a suite against OPO Enterprises, Inc. for the unlawful detention of the property. 21. NOTICES. Any notice called for or permitted under the terms hereof shall be given in writing and sent by certified mail to OPO Enterprises, Inc., at P.O. Box 519, Flippen, AR 72634 and to the Mayor's Office, City of Fayetteville, 113 W. Mountain St., Fayetteville, AR 72701. If such certified mail is returned to sender, the City of Fayetteville may provide adequate notice by posting said Notice on the premises. 22. WASTE. OPO Enterprises, Inc. agrees not to commit waste, not permit waste to result or to be done to or upon the aforesaid property and premises; not to conduct any other business thereon or therein, nor store or permit to be stored thereon or therein any explosives, combustible substances or materials or any nature, which would increase the fire hazard or cause a premium to be charged for insurance higher than that charged for the present use of said property; and not to operate nor permit to be operated, nor to exist thereon or therein, any public or private nuisance. 23. RIGHT TO CURE. If OPO Enterprises, Inc. shall default in any of the covenants, agreements, conditions, or undertakings herein contained to be kept, observed and performed by OPO Enterprises, Inc., the City of Fayetteville shall give notice of such default in writing to OPO Enterprises, 'Inc. and OPO Enterprises, Inc. shall have thirty (30) days from and after the giving of such notice to eliminate and/or cure the cause of such default. If said default is eliminated or cured with the aforementioned thirty (30) days, OPO Enterprises, Inc. shall not be considered in default or in breach of this lease 24. SEVERABILITY. Each paragraph of this lease agreement is severable from all other paragraphs. In the event any court of competent Jurisdiction deterrmnes that any paragraph or subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and subparagraphs will remain in full force and effect. 4 • • 25. INTERPRETATION. This lease agreement shall be interpreted according to and enforced under the laws of the State of Arkansas. 26. ENTIRE AGREEMENT. This lease agreement contains the entire agreement of both parties hereto, and no other oral or written agreement shall be binding on the parties hereto. 27. NON -WAIVER PROVISION. The failure of the City of Fayetteville or OPO Enterprises, Inc. to insist upon the strict and literal performance of any agreement or conditions herein or to exercise any option retained or granted by reason of a default by OPO Enterprises, Inc. shall not constitute a waiver of the City of Fayetteville's right thereafter to insist upon and enforce full performance of such conditions and agreements. IN WITNESS WHEREOF, the City of Fayetteville and OPO Enterprises, Inc. have hereunto set their hands and seals and have caused their names to be hereunto affixed by the undersigned officers who are duly authorized to act, on this 20th day of July, 2004. OPO ENTERPRISES, INC. CITY OF FAYETTEVILLE, ARKANSAS By: )4 f GARY HER Title: Attest: By p111,11„p,1// 4- `•G�6FtYJTR�S,a��, DA COON , =:\+•• G\SVO,c•�•es Mayor rU; :13 1 c ;FAVEUEVILLE; •1,0 S. .r�i 2 •. KAN P'J2+ titin ..••� ,,,,,roN,„ Attest: Name & Title Sondra Smith, City Clerk 5 • 0 17 • • V1 �1 Top c z3-5 0 101:A S!!if; "I AlOri 4De 1 __ — mes ithitittri — _�,� ox 'ITTENBERG, DELONY& DAVIDS_QN_INC- I O0.•\Ur ¶ILCI If CI I 1 1 l I Hoail� Gtr b1P�.-. NAME OF FILE: CROSS REFERENCE: Item # Date Resolution No. 112-04 w/agreement Document 1 06/30/04 memo to mayor & City Council 2 draft resolution 3 draft lease 4 map of leased area 5 memo to mayor & City Council 6 copy of City Council minutes 3/3/98 7 copy of City Council minutes 7/7/98 8 copy of City Council minutes 7/21/98 g copy of Res. 100-98 w/lease 10 memo to City Council 11 copy of lease 12 draft resolution 13 draft lease 14 Staff Review Form 15 email to Gary Dumas 16 email to cpearman from Gary Dumas 17 memo to Gary Dumas NOTES: • City Council Agenda Memo To: Mayor and City Council From: Gary Dumas �3---r—s Date: June 25, 2004 Subject: Resolution Approving Lease with OPO Enterprises, Inc for the patio within the Square Garden on the Town Square Recommendation: Staff recommends approval of the attached resolution providing for the lease of the 1,676.16 square feet patio within the Square Garden on the Town Square for $1.00 annually plus other good and valuable consideration. Background: The site of the former Hog City Diner has been vacant for several months. The former tenant provided some improvements and made the patio space useable. The City had and still has no investment in the patio improvements. A new tenant, OPO Enterprises, is now requesting a lease from the City for the patio area to be used in conjunction the new activity. This new enterprise will include a soda fountain, restaurant, and downstairs sports bar. Discussion: The lease proposed differs from the prior lease in a few areas. 1. The term of the lease is for two years with 4 two year extensions. 2. Access to the patio may be gained through the existing gate along the west side of the property or through the opening along the east side. 3. Only live non -amplified music is permitted. 4. Lessee will be responsible for damage to plant materials and will provide daily litter control for the Garden and Inner Square. 5. Annual lease will be $1.00 plus other good and valuable consideration. Budget Impact: There will be some savings of staff time in not having to perform daily maintenance cleaning the Gardens and Square. • 7/zo/o t ©PO { pristcl 1oft 6/25/2004 11:37:50 AM RESOLUTION NO. A RESOLUTION APPROVING A TWO YEAR LEASE WITH OPO ENTERPRISES, INC. FOR RENTAL RATE OF $1 PER YEAR PLUS OTHER GOOD AND VALUABLE CONSIDERATION, FOR A PERIOD OF TWO (2) YEARS, AND ALLOWING THE LESSEE FIVE ADDITIONAL TWO (2) YEAR PERIODS RENEWING THE LEASE FOR OUTDOOR DINING ON THE TOWN SQUARE FOR A TOTAL LEASE PERIOD OF TWELVE (12) YEARS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves a lease with OPO Enterprises, Inc for a rental rate $1 per year plus other good and valuable consideration, for a period of two (2) years, and allowing the Lessee five additional two (2) year periods renewing the lease for outdoor dining on the Town Square if mutually agreeable with the City. A copy of the lease with attachments are attached hereto marked Exhibit "A" and Exhibit "B" and made a part hereof. PASSED AND APPROVED this day of , 2004. APPROVED: By: Dan Coody, Mayor ATTEST: By: Sondra Smith, City Clerk LEASE This Agreement, made and entered into this day of , 2004, by and between the City of Fayetteville, whose address is 113 West Mountain, hereinafter called Lessor, and OPO Enterprises, Inc., whose address is 1 West Center, Fayetteville, Arkansas 72701, hereinafter called Lessee, WITNESSETH: 1. LEASED PREMISES. For and in consideration of the rents, covenants and agreements herein entered into and agreed upon by the Lessee as obligations to the Lessor, the Lessor lets, leases and demises unto Lessee, subject to the terms and conditions contained herein, the following described property containing approximately 1,676.16 square feet more or less, situated in Washington County, Arkansas: See Exhibit B attached hereto and made a part hereof. To have and to hold said premises unto the said Lessee for and during the term herein stated, subject to the covenants, terms, conditions and liens herein contained. 2. TERM. This lease shall commence on the date of this agreement and shall extend for a term of two (2) years 3. OPTION TO EXTEND. If the Lessee shall have fully performed every agreement and covenant on Lessee's part to have been kept and performed under the term of this lease at the time of exercise and at the time of renewal, the Lessee is hereby granted the right if mutually agreeable with the City an option to extend this lease, upon the same terms, for an additional period of two (2) years, with such option to be exercised in writing by the Lessee not later than one hundred eighty (180) days prior to the expiration of the basic or original term of this lease. Lessee may extend for up to four additional two (2) year extension periods utilizing the same procedures outlined above if mutually agreed to by both Lessee and Lessor for a total lease period of twelve (12) years. 4. RENT. Lessee agrees to pay to Lessor the rental rate of $1 per year plus other good and valuable consideration. The rental rate of $1 per year plus other good and valuable consideration shall constitute the basic rental for the lease. USE. Lessee agrees to use the lease premises for the purpose of operating an outdoor dining area and for no other purpose or purposes without the written consent of Lessor having been obtained in advance. 6. CONSTRUCTION OF IMPROVEMENTS. All improvements constructed by the Lessee on the leased premises shall be accomplished within the boundaries of • • the leased premises and Lessee shall make every effort to conduct such construction so as to have a minimal impact on the town square gardens. 7. INGRESS AND EGRESS. Access to the leased premise may be from the existing gate access along the west fence or from the existing access along the east line. 8. MUSIC. Lessee agrees that only live non -amplified music will be permitted on the property in compliance with all City codes. 9. SIGNS AND ADVERTISING. No sign, picture, advertisement, or notice shall be displayed on any part of the leased premises visible to the public without the previous consent, in writing, of the Lessor. 10. SQUARE GARDEN & LITTER REMOVAL. Lessee will be responsible for any damage to Square Garden plantings and shall provide daily litter removal from the Town Square. 11. COST OF REPLANTING. Lessee agrees to reimburse Lessor for all reasonable costs, including material and labor, incurred by Lessor in any replanting made necessary by the construction of any and all improvements made by the Lessee to the leased property or by damage caused by Lessee's patrons' use of the Square Garden. 12. NON -SUCCESSION. This lease agreement shall insure only to the benefit of and be binding upon the parties hereto and not to their respective heirs, successors and assigns. 13. TAXES. Lessee shall pay any and all ad valorem taxes special improvement district taxes levied and assessed against said premises and the improvements located thereon during the term of this lease. 14. COMPLIANCE WITH LAWS. Lessee agrees not to violate any law, ordinance, rule or regulation of any government authority having jurisdiction of the leased premises. 15. INSURANCE OF LESSEE'S PROPERTY. Lessee shall be solely responsible for maintaining insurance on his property, including but not limited to movables, trade fixtures installed by Lessee, furniture, furnishings and inventory. 16. RIGHT OF INSPECTION. The Lessor shall have the right, in person or through Lessor's duly authorized representative, at all reasonable times to inspect the leased premises. • • 17. ALTERATIONS. Lessee shall have the right and privilege to make, at Lessee's expense, ordinary repairs and alterations to the leased premises; however, no alterations shall be made without the prior written consent of Lessor. 18. FIXTURES All trade fixtures installed by Lessee or acquired by Lessee independently of this lease shall remain Lessee's property and may be removed by Lessee at the expiration of this lease; provided, however, Lessee shall restore the leased premises and repair any damage thereto caused by such removal. 19. ACCEPTANCE OF PREMISES. The Lessee shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by Lessee in connection with utility services of whatever kind or nature including any sewer charges and pickup of Lessee's trash and garbage. 20. MAINTENANCE OF LEASED PREMISES. The Lessee shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by Lessee in connection with utility services of whatever kind or nature including any sewer charges and pickup of Lessee's trash and garbage. The Lessee shall be responsible for maintaining the improvements upon the leased premises in a satisfactory condition and the premises shall, at all times, be maintained in a neat and orderly condition. Lessee's business operations will be carried on in accordance with the highest standards for such businesses, particularly in the areas of cleanliness and service. 21. INDEMNIFICATION OF LESSOR. The Lessee shall defend, indemnify and hold the Lessor harmless against any expense, claim, loss or liability as the result of any breach by the Lessee, Lessee's agents, servant, employees, customers, visitors or licensees, of any covenant or condition of this lease, or as a result of the Lessee's use or occupancy of the demised premises, or the carelessness, negligence or improper conduct of the Lessee, Lessee's agents, servants, employees, customers, visitors or licensees. To facilitate the provisions hereof, the Lessee shall keep and maintain at all times during the term of this lease, or any extension thereof, in full force and effect with a company or companies acceptable to Lessor, insurance against third party liability by reason of the Lessee's occupancy of the demised premises with limits of liability thereunder of not less than $100,000 per person and $500,000 per accident with $500,000 coverage for property damage. 22. RETURN OF LEASED PROPERTY. At the end of the term of this lease, or upon any other earlier termination, the Lessee agrees promptly and peaceably to restore possession of the leased premises to the Lessor in as good condition as they were when delivered to Lessee, ordinary wear and tear excepted. To accommodate this covenant, the Lessee hereby waives any and all notice to which • • Lessee may be entitled under the laws of the State of Arkansas as a prerequisite to a suit against Lessee for the unlawful detention of the property. 23. NOTICES Any notice called for or permitted under the terns hereof shall be given in writing and sent by certified mail to the Lessee at P.O. Box 519, Flippen, AR 72634, and to the Lessor at 113 West Mountain, Fayetteville, Arkansas 72701. 24. WASTE. Lessee agrees not to commit waste, not permit waste to result or to be done to or upon the aforesaid property and premises; not to conduct any other business thereon or therein, nor store or permit to be stored thereon or therein any explosives, combustible substances or materials of any nature, which would increase the fire hazard or cause a premium to be charged for insurance higher than that charged for the present use of said property; and not to operate nor permit to be operated, nor to exist thereon or therein, any public or private nuisance. 25. RIGHT TO CURE If the Lessee shall default in any of the covenants, agreements, conditions, or undertakings herein contained to be kept, observed and performed by the Lessee, the Lessor shall give notice of such default in writing to the Lessee and the Lessee shall have thirty (30) days from and after the giving of such notice to eliminate and/or cure the cause of such default. If said default is eliminated or cured within the aforementioned thirty (30) days, the Lessee shall not be considered in default or in breach of this lease. 26. SEVERABILITY. Each paragraph of this lease agreement is severable from all other paragraphs In the event any court of competent jurisdiction determines that any paragraph or subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and subparagraphs will remain in full force and effect. 27. INTERPRETATION. This lease agreement shall be interpreted according to and enforced under the laws of the State of Arkansas. 28. ENTIRE AGREEMENT. This lease agreement contains the entire agreement of both parties hereto, and not other oral or written agreement shall be binding on the parties hereto. 29. NON -WAIVER PROVISION. The failure of the Lessor or Lessee to insist upon the strict and literal performance of any agreement or conditions herein or to exercise any option retained or granted by reason of a default by the lessee shall not constitute a waive of the Lessor's right thereafter to insist upon and enforce full performance of such conditions and agreements. IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and seals and have caused their names to be hereunto affixed by the undersigned officers who are duly authorized to act, on this _ day of , 2004. • • ATTEST: By: Name & Title ATTEST: By: Sondra Smith, City Clerk LESSEE: By: Name & Title LESSOR: CITY OF FAYETTEVILLE, ARKANSAS A Municipal Corporation. By: Dan Coody, Mayor • FAYETTEVI LLE THE CITY OF FAYEIIEVIIIE, ARKANSAS KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT • TO: Dan Coody, Mayor City Council FROM: Kit Williams, City Attorne DATE: July 1, 2004 RE• Lease of city -owned plaza adjoining the old Post Office on the Square In order to accommodate and encourage the Hog City Diner to occupy the old Post Office (which had remained empty after the "Old Post Office" and associated downstairs bar had closed), the City Council agreed to lease a portion of city owned lands adjoining the building upon several conditions. The City agreed to charge only $1,677.00 annual rent for the first ten years. Extension of the lease would have the rent increased by theamount of Consumer Price Index increase since the inception of the lease. The reason for this very modest rent was primarily because Hog City agreed to build and pay for very substantial permanent improvements to our property so they could utilize it as an enclosed outdoor dining area for their restaurant. The originally proposed rent had been three times higher ($419.25 per month or $5,031 00 annually). Hog City's president, Michael O'Brien agreed to that amount according to the minutes of the July 7, 1998 City Council meeting (attached). However, at the next City Council meeting, Mr. O'Brien requested a reduction to $1,677.00 annual rent. He stated: "They've been willing to risk close to a million dollars, and counting, in this project" (Minutes of July 21, 1998 City Council Meeting, page 3). He pointed out that he agreed to spend $3,000.00 to construct a new potting • • shed for the city as well as numerous improvements on the city property "a beautiful fence, screening, lattice work, pillar columns, the concrete leveled and a fountain. These would remain if the restaurant ever closes." (Minutes of July 21, 1998 City Council Meeting, page 4). "Mayor Hanna stated it is not unusual for cities to give businesses incentives to locate there. It creates Jobs, tax money, and, in this case, it brings back something to the square that has been missed He felt a $1 a sq. ft. was a fair charge for the concrete driveway they already have the use of and will improve." (Minutes of July 21, 1998 City Council Meeting, page 5). Even taking into consideration the $3,000.00 for the new potting shed and the many thousands of dollars of improvements made to turn a driveway into an enclosed seating area with a fountain and bar, the reduction of the rent from $5,031.00 to $1,677.00 only passed when Mayor Hanna broke the 4-4 aldermen vote. Now the taxpayers of Fayetteville own a beautiful seating area for 75- 80 people. (Minutes of July 7, 1998 City Council Meeting, page 8 — estimate by restaurant owner) This improved, ready to go seating area is certainly worth far more than the $139.75 monthly rent agreed to by a divided City Council as an incentive for the improvements to be made. One way to determine the fair rent would be to base it upon the rent being charged by the building's owner. The outdoor seating would constitute a very large increase in the restaurant's seating capacity for the six months or so per year it would be usable. However, a substantial portion of the total rent would be tied to the kitchen facilities inside so that amount would need to be deducted before whatever percentage of seasonal seating capacity the plaza represents could be used as a fair market rent amount. Just as with all other city properties and assets, the City Council must ensure we receive fair market value for the taxpayers The outdoor seating area for the old Post Office is not only surrounded by beautiful city paid landscaping, the improvements to the plaza were an investment for the taxpayers, financed by accepting a lower monthly rent to get the Hog City to build and pay for these improvements. • • • • Not only is this plaza area beautiful and inviting, it may be important to the restaurant owners if they wish to allow a smoking area. It certainly provides an unique outdoor environment that the building otherwise cannot offer. Music was also an important concern of the City Council in 1998 and was controlled in the first lease in paragraph 9 "Lessee agrees not to provide or allow any live music on the premises and any amplified music will be limited to background music for the outdoor dining area." The new proposed lease allows "live non -amplified music" which can be far louder (drums, brass instruments, etc.) than "background music." Entry areas are changed to allow entry directly into the plaza (rather than through the old Post Office). Could this become a stand alone bar? The amount of rent, control of music, and allowable access points should all be carefully considered before entering into a long term (12 year) lease of the city's enclosed plaza area adjoining the old Post Office. ITTENBERG, DELONY & DAVIDSON, INC. �.-ic+a+.• I , to Hotoorry prom • • • • • • 100 March 3, 1998 the construction of this project total $454,498.71. Mayor Hanna informed the Council that if this is passed at this meeting, the only thing preventing this from being completed this year would be procuring the steel. Charles Venable, Assistant to the Public Works Director, stated the traffic count taken just after Joyce Street opened was 7,000 cars a day on this one -lane bridge. It has increased since then. This project will provide four lanes. Alderman Williams moved to accept the resolution. Alderman Daniel seconded. Upon roll call, the resolution passed on a vote of 7 to O. RESOLUTION 29-98 AS RECORDED IN THE CITY CLERK'S OFFICE. USE OF SOUARE GARDENS FOR OUTSIDE DINING Mayor Hanna introduced consideration of a.conceptual plan for outdoor dining on park property located within the Square Gardens. Mike O'Brien, Cafe Company, stated there is an area where they have an existing easement that is part of the Parks Department that they would like to turn into outdoor dining. He passed out a handout regarding what is being proposed. He asked that the Council review this and recommend that the staff negotiate an agreement for the purpose of using this area for outdoor dining. Richard Alderman, architect, used a drawing to walk through the area. He pointed out how this would provide convenient access for the handicapped. He stated this would not impact any of the existing gardens, except for moving a potting shed. Mr. O'Brien stated this area would be closed to the public during non business hours. They are looking at the screening requirements. Alderman Williams stated he would hate to see a tall fence. Outdoor dining was recommended in town meetings to enhance the downtown area. The attractiveness of this would be in sitting by the garden. Mr. Alderman stated the screening is required and dictated by ABC. He stated he wanted the Council's approval to begin negotiation with the City staff to come up with what the City requires. They would also work with the historic people. Mr. O'Brien stated the State law requires the classification of private club if open and serving alcohol on Sundays. Alderman Williams stated he has a problem with making a public space into a private club. He pointed out that Jose's is both a 16 C March 3, 1998 private club and not a private club. Mr. O'Brien stated an integral part of their concept is the ability for people to imbibe and have choices of where they want to sit. The screening is a requirement for the liquor license. Mr. Alderman stated there is no need to explore what the exact screening requirements are unless the Council gives some indication they are interested in this concept. Alderman Young stated the Council would want to have that information. Alderman Zurcher expressed reservations about having alcohol out in the Square Gardens. Alderman Miller cautioned the Council about setting a precedent for leasing park land to a business. Mayor Hanna stated the request is for approval for this business to work out with staff a plan to lease the easement and to have it presented to the Council. Alderman Trumbo moved this approval. Alderman Pettus seconded. Lonnie Gibson, former owner of the Old Post Office Restaurant, encouraged the Council to support this club. He stated he would like to be able to have a drink outside. This will bring people and money to the Square. Upon roll call, the motion carried on a vote of 7 to 0. WARD BOUNDARIES Mayor Hanna introduced discussion of ward boundaries. Mayor Hanna suggested that each alderman chose a configuration from the four suggested and submit it at the agenda session. This would be added first under old business at the next meeting. Alderman Pettus asked for population trends. Ben Mayes, Administrative Services Director, stated the choices are Alderman Schaper's, configuration D; Alderman Williams's, configuration E; Alderman Young's, configuration F; and Randy Zurcher's, configuration G. Adjournment Mayor Hanna adjourned the meeting at 10:05 p.m. 101 r1 • • 17 241 • JULY 7, 1998 restrictive covenants to protect the neighbors. He supported putting a condemnation ordinance on first reading. Alderman Pettus felt putting it on the first reading would be coercive. Alderman Trumbo stated he favors free enterprise and did not support condemnation. .Alderman Williams stated condemnation would not be appropriate, if this were still Ms. Januarys property and she did not want it to be used for a city park. He stated she did want it to be a City park. This is a rare circumstance. Paula Marinoni, audience member, stated this is a very special and important piece of property. The Arkansas Historic Preservation Program in Little Rock confirmed that the area just a block south of this property, called Big Spring, was the earliest documented settlement in Fayetteville. During the Battle of Fayetteville, minor skirmishes took place throughout the surrounding countryside.. This area has never been developed. It has rock work, but the land has never been altered. The • Council needs to think about preserving this. area. It may be archaeologically significant. She quoted from Section 7.9 of the 2020 Plan regarding historical resources and their relationship to the community. She stated she discussed this in great detail with Ms. January over a year ago and Ms. January said she would like it to be preserved. In March, Ms. January again expressed her desire for this to be a park and preserved. The day before the Parks Board meeting recently, Ms. January said she would still like for this to be a park and that she would sell it to the City for $50,000. The current owners upped their offer knowing the. City was intending to purchase the property. Ms. Marinoni stated she is working on a.midtown trail that. has over • 50 historic sites. This could be added to that. Mayor Hanna called for the vote. Upon roll call, the motion to put a condemnation ordinance on first reading failed on a vote of 4 to 2, with Aldermen Trumbo and Pettus voting no.and Mayor Hanna declining to vote. HOG CITY DINER Mayor Hanna introduced a resolution approving a patio area lease between the City of Fayetteville and Hog City Diner. • 7 242 JULY 7, 1998 Alderman Pettus asked how many plants would have to be moved. Richard Alderman, architect, showed drawings. They want just enough room along the curb to get in and get the work done. The contractor is required by the specifications to build the project from the inside out and not have any access or any movement through the gardehs. They need two feet to put the posts in. He referred to site plan No. 1. He showed where a few plants would have to be moved. Susan Ferrall, Square Gardens Manager, stated there is a lot of plant material that would have to be dug up in the heat of the summer. Everything will have to be potted, as there is no place to put it at this point. That park will have to be redesigned. She stated she would prefer to see this done after the freeze. This is the height of the season. Mr. Alderman stated that from a financial standpoint, it is important to have this done by fall, when the students come back. He stated they have made every effort to restrict the contractor and to come up with a sequence of events to control the activity. He showed the back elevation as it will look. He stated it would take four to six weeks to complete. Alderman Young asked what exactly will be constructed. He had • envisioned a board deck. Michael O'Brien, Cafe Company, stated they are proposing to level it with concrete, which would result in a retaining wall in an area that is now prone to flooding, sloping the concrete to distribute it. This also suits the American Disabilities Act and will be a smoother approach to the lift that will be placed at the entrance of the patio. He stated they would basically tie into the existing concrete at its highest level. If this ever were to revert back to the City, it will be an improved space.. They will tie the drains from the building into an underground drainage system that will tie into the City's. The drainage problem will be corrected. It will be basically what is there now, but level. Mr. Alderman stated decking is hard for a wheel chair to toll over and would have spaces which things could fall through. Mr. O'Brien estimated the outdoor dining area would seat 75 to 80 people. He thought the outdoor area could be used about five months out of the year. He would like to see three to four table turn overs in the evening and two at lunch. 8 • • JULY 7,•1998 Alderman Schaper calculated the P potential revenue from the outdoor dining to be $3,000 a.day, gross. Rent typically'goesaround two to two and a half percent of the gross on an annual basis. He stated this would be a lot more than the dollar a square foot per year being proposed. Mr. O'Brien responded that formula is based on improved space. This is unimproved, exterior space being used five months out of the year. All the improvements are at their expense. Alderman Schaper stated the proposed terms represent a tremendous bargain. It is conservatively worth 10 times more. Mr. O'Brien stated the City will get something for space that is not producing now. It will invigorate the town square and produce tax revenue. Alderman Williams had concerns about the length of the lease. This lease is almost a deed. He stated citizens have expressed concern about increased noise from music and conversation. Alderman Young was concerned about the option to extend on the • same terms. Alderman Schaper stated the question is whether this is a good idea, conceptually, or not. He has had calls from folks saying Dickson Street is the place for lively, outdoor eating. The square gardens are special. We need more public input on whether this is a wise thing to be doing. Mayor Hanna stated he has been worried about the lack of activity around the square at night. There are not many people there to be disturbed at night. He stated the City will be getting their two percent just from the HMR tax. Many visitors have been disappointed not to find a restaurant in the middle of the square. Mr. O'Brien stated the lease term of 25 years ties in with their commitment. They. envision, the revitalization of the downtown area. Alderman Williams stated we need to look at the lease very carefully. Some people enjoy the quiet of the square. Mr. O'Brien responded that he has had impressive, positive feed back, from his customer base, which is 2,500 to. 3,000 people a • week. 9 JULY 7, 1998 r. Alderman Trumbo would like to see the lease have five-year increments, $3 a sq. ft., and CPI escalator clauses on the annual index for increases. Mayor Hanna asked if Mr. O'Brien would be comfortable with an initial lease term of 10 years with five-year renewals and some kind of escalator clause. Mr. O'Brien replied he would be. Alderman Zurcher stated he was not sure this is a good concept, but he would consider a ten-year lease with five-year increments and all the numbers multiplied by ten and a guarantee that construction would not be started until after the first freeze. Alderman Schaper suggested a five-year initial term. Mr. O'Brien stated the proposal of ten years is acceptable. Alderman Williams stated the City still needs to have some power and discretion and not have the lease automatically renew. Alderman Schaper stated the outdoor music is a sensitive issue • for him. The City owns this property. It is right next to the square gardens and he wants to protect the people who want to enjoy the gardens without intrusion. Mayor Hanna asked if the City could have some kind of control over the music. Mr. O'Brien stated that would be no problem. Alderman Pettus asked about the cost of moving plants. Mr. O'Brien stated they would absorb the expenses incurred. They would leave it up to Susan Ferrall to determine the costs. They could also provide assistance in relocating the plants. The time to develop the project is now. The market changes in the fall and waiting for the freeze would put them in the middle of bad weather and the Christmas light program. Alderman Zurcher thought they should be able to wait one season, if they are in this for the long term. Mayor Hanna asked if the lease could be reworked incorporating the items discussed and be voted on at the next meeting. ' I 10 •- 245 • JULY 7, 1998 Mr. O'Brien stated their preference would be for a ten-year lease, not five years. Alderman Pettus asked about the clause in paragraph 20 of the lease which reads, "...not to conduct any business thereon..." City Attorney Rose explained this refers to running a business other than this. He agreed to insert the word "other. Mr. O'Brien stated time is of the essence to them. He asked if it could be voted on at this meeting, if they agreed to the ten - years terms, the $3 figure, and assisting Susan Ferrall.as she dictates. ,_Alderman Williams stated the biggest mistakes made by the City have been when decisions were hurried. Bill Stiles, 117 Rock, did not agree that this real estate is so valuable. There are a bunch of empty buildings on the square. The square is dying. This man wants to do something to bring people back to the square and the City should let, him do it. • Paula Marinoni, citizen, stated she has expertise in judging the ambiance of a garden. She can tell what a garden has going for it and what it needs. Consistency is part of what makes a garden desirable to people. The square is not as vital as it used to be. She asked what guarantee there is that there would be no live, amplified music. People may want something different from Dickson Street, but she does not believe this will happen. These people have only been in. business three or four months and we do not know them well; but they are getting ready to totally.change the centerpiece of Fayetteville and drastically change the ambiance in the garden.' She, asked if it could be put in the lease that they can't have live; outdoor, amplified music. Mayor Hanna stated they have told the City they wouldn't have and under the terms of the lease they can be told they can't do it. Richard Alexander, resident of the historic district, downtown/Dickson St. developer, and beard member of the Downtown Dickson Street Enhancement Project, -encouraged the Council to view this project favorably and to, get the best terms.possible in the lease. The City's efforts to revitalize the downtown are aimed not just at tourism but at supporting businesses. The battle to save the square is not over. this project offers an ambiance and another reason.to go to the gardens. • 11 246 JULY 7, 1998 • Bootsie Ackerman, Director of the Downtown Dickson Enhancement Project, stated they have asked citizens of Fayetteville what they'd like to see in the community. Outdoor dining is always mentioned. She stated the owners of this business want nothing more than to improve our community and add a beautiful business. Ron Bumpas"s, representing the owner of the building, stated they supported the garden long before the City put money in it. He mentioned other cities that have revitalized with outdoor restaurants. The improvements made here will create more activity. No one else will use the property. He urged coming up with fair terms. Alderman Trumbo moved to table this until the next meeting. Alderman Pettus seconded. Upon roll call, the motion carried on a vote of 6 to 0. REFUND AND/OR ROLLBACK OF MILLAGE Mayor Hanna introduced discussion of the millage refund/rollback. Alderman Williams stated he would like to have input from the fire and police pension boards. Eldon Roberts, Assistant Police Chief and employees' representative to the Police Pension Board, stated there are two pension plans. He foresees no financial problems regarding the new one. The old one is suffering. He gave a history of the police pension plans. Even with this increase, benefit increases cannot be given to people who retired long ago. He stated they cannot stand to lose any of the fund's assets and opposed use of the assets for any reason other than paying benefits. He supported not giving the money back until and unless we have to. City Attorney Rose stated it might be conceivable to reimburse the pension funds out of the general fund, if the City desired. Pete Reagan, Fire Captain and Fire Pension Board member, stated they have two systems. This millage affects the old pension system. The .5 mil produced $230,000 last year. The insurance turn back money is another source of income. There are no built- in cost -of -living increases in their fund. There have been benefit increases because the fund has done well at different times. He stated the fund is no longer actuarially sound. In order to receive funds, the millage would have to be increased to a full mil. They are currently $1.295 million under funded. He 12 • ` 261 • July 21, 1998 City Attorney Rose replied it could be put anywhere the Council wants it. He stated he had passed out the changes that are necessary and a copy of the UDO. He explained it became a more complicated project. because all the changes that had been made previously were made from the old ordinances, pre-UDO. Staff has not had yet a. chance to verify that all the changes have been incorporated. It has been suggested that they need to look at it before it is read before the Council. It was decided to remove this from the current agenda and to put it on the next one. Upon roll call, the motion to approve the consent agenda carried ona vote of 7-0-1, with Alderman Young abstaining. Alderman Trumbo asked if item H, Youth Center, under New Business could be moved to the beginning of New Business, as the Youth Center Board was meeting later that night. It was agreed to do this. '3 OLD BUSINESS • HOG CITY DINER Mayor Hanna introduced a resolution approving a patio area lease between the City of Fayetteville and Hog City Diner. Alderman Williams handed out two proposed amendments to the lease. The first amendment was to Article 3, Option to Extend.. He stated as it reads now, after the initial 10 -year period at the option of the Lessee, not the City,the lease can be extended for up to five, five-year periods. He felt the Council sitting ten years from now should have the opportunity to use their own judgement to decide whether or not to continue the lease. That gives. the Lessee ten year's to recoup expenses. •If everything is worked out, the lease could be extended with the approval"of'the City Council at that point in time. Michael O'Brien; owner, stated they'd been surprised at the last Council meeting by the objections to the dollar amount proposed and the term proposed. He stated they had had choices in selecting where to build the restaurant. They felt the Old Post Office was an outstanding location, despite the fact that people were leaving the square. They've been willing .to risk close to a million dollars, and counting, in this project. He stated objections to the dollar amount and term had caught him off guard, as two other cities are offering tax incentives, 3 2 S • 82 July 21, 1998 concessions, and other things to entice them to put a restaurant in. Mr. O'Brien stated he has done research since the last meeting. He stated the City negotiated a lease for the plaza portion of the town center with a private individual. It is a 25 -year lease with $120,b00 up -front payment for 11,500 sq. ft. That equates to $.42 a foot. He stated a number of the Council members had found fault with the proposed $1 per sq. ft. for the restaurant, yet it was double what the City had offered a private individual. He noted the concessions made to the other individual. Mr. O'Brien stated his business would bring more people to the square. He asked for an explanation of the Council's action concerning these two lease situations. Alderman Schaper responded that there is a significant difference between creating a public open space and leasing City land for an individual's profit. Alderman Pettus agreed it is a double standard. The restaurant will bring a great deal of money and life to the square. Mr. O'Brien stated he wanted to amend the proposed lease back to •� his original request of $1 a sq. ft., $1,677 a year, and a twenty-five year lease. He stated if the Council wants them to relocate, their method is inappropriate and unfair. Alderman Daniel asked if he felt the $1 amount is a fair market price. Mr. O'Brien replied he'd sat down with staff, based on instructions from the Council. At that time, it was conveyed to him that the town square was valued at $10 to $12_a sq. ft. He'd suggested taking 10% and deducting the cost incurred to build the potting shed and other improvements. This came to $1 a sq. ft., based on 1,677 sq. ft. He stated the improvements would be a beautiful fence, screening, lattice work, pillar columns, the concrete leveled, and a fountain. These would remain if the restaurant ever leaves. Alderman Daniel agreed that this would be an asset to the square and the restaurant owners deserve some breaks. Alderman Schaper agreed this would be nice, but it would be done for the benefit of the business owners. He stated he thought this amount had already been agreed to. ' y 4 263 f • July 21, 1998 Alderman Trumbo stated he had suggested $3 a sq. ft. as compromise. The•City's land agent had said the going. rate for unimproved property is $1.50. Alderman Trumbo upped this to $3, which he thought was an equitable compromise. Alderman Miller was open to the amendment, as most leases are up to the landlord as to whether they are open or not. He stated he often walks around the square at night and the only life there at that time is the restaurant. He stated the difference between the proposed rents is a drop in the bucket to the City. Mayor Hanna stated it is businesses incentives to money, and, in this case, that has been missed. He for the concrete driveway improve. not unusual for cities to give locate there. It creates jobs, tax it. brings back something to the square felt a $1 a sq. ft. was a fair charge they already have the use of and will Alderman Zurcher stated he. supports the resolution and does not think the restaurant owners are getting anti -business sentiment from the Council. The Council is trying to get the best deal for the citizens. Alderman Williams reiterated his desire not.to tie the future Council's hands regarding this. Ten years is plenty of time to recoup the investment. Mr..•O'Brien stated the future governing body would know they have him, over a barrel, because it would be.a very profitable venture and all the improvements would be in place. He did -not want to find himself going through this again. He again requested that the lease be amended to the $1 a sq. ft., back to the original amount of $1;677 a sq. ft. Regarding the term, he stated this has been a very unpleasant experience and asked the Council to .just say if they want the restaurant to go away. - Alderman Pettus stated that from her experience with commercial leases, ten years is ridiculous. Alderman Williamsstated that if the Council passed the lease without any provision for discretion in the future, it is a 35 - year lease. Alderman Young stated the decision is wants the patio out there. He noted the owners would have. to comply with ordinances. whether or not the Council that according to the lease, all City and State rules and 26.4 July 21, 1998 Alderman Williams stated it would have to be a material breach proved in court before the lease could be broken. He asked Mr. O'Brien if he were saying that if the Council approves the lease extension in ten years, he would not want the Council to go forward with the lease. Mr. O'Brien replied that is correct. Alderman Williams moved his amendment. Alderman Zurcher seconded. Upon roll call, the amendment failed on a vote of 1 to 7, with Alderman Williams voting yes. Mayor Hanna stated it has been requested by the petitioner to put the monetary terms of the lease back to $1 a sq. ft. Alderman Daniel so moved. Alderman Miller seconded. Upon roll call, the motion carried on a vote of 5-4-0, with Mayor Hanna voting yes and Aldermen Williams, Schaper, Young, and Zurcher voting no. Alderman Williams stated he had a proposed amendment on Article 6, Use. The current proposal states the Lessee agrees to use the {{ leased premises for the purpose of operating an outdoor dining •_ area and for no other purpose. He stated he wants to see outdoor dining but does not want to see a beer garden on the square. Alderman Williams moved to amend the lease to not allow alcoholic beverages to be sold or consumed on the City's leased premises. There was no second. Alderman Schaper stated he would not support this. It would be up to the owner to control the patrons and not cause any disturbances. Alderman Trumbo also, did not support this. There are adequate regulations to control this. Alderman Miller moved the resolution. There was no second. Alderman Schaper stated he had an amendment to make concerning outdoor music. He read Article 9 and stated he would like to add words to further clarify it: "Such music shall not be loud enough to be plainly audible from the sidewalks of the square gardens." He stated "plainly audible" is a term used in the noise ordinance. 6 • 265 • July 21, 1998 Mr. O'Brien stated if someone stopped behind the patio, they may hear jazz but it would not be disruptive or offensive. The. desireS is for background music that allows for conversation but obscures nearby conversation. He stated this amendment is fine with him. Alderman Daniel seconded the amendment. Alderman Young stated any music will be plainly audible. Mr.. O'Brien stated he agreed with the amendment in principle, but you get into the: definition of plainly audible. There is the public sidewalk and then there is the brick walkway in the garden about six to eight feet from the proposed screening. Alderman Schaper stated his intent is the public sidewalk and describing it differently would be fine. Alderman Young felt the original wording, which restricts the music to the premises, covers what Alderman Schaper is trying to do. As long as it is not intrusive, everyone will be happy. • Mr. O'Brien, upon further consideration, stated the phrasing in the lease is sufficient. If it is changed, it could come back to haunt them through one person's complaint. It is very subjective. Alderman Trumbo agreed the language in Article 9 is more than sufficient. Upon roll call, the amendment failed on a vote of 3 to 5, with Aldermen Williams, Schaper, and Zurcher voting yes. Alderman Young moved to. approve the lease handed out at the agenda session with the one change on the price the Council amended. Alderman Miller seconded. Alderman Williams asked about parking spaces. Alett Little, Planning Director, stated that under the parking proposal in the zoning ordinance for, properties in.C-3 and C-4., so long as those areas are not expanded, they are not required to provide additional parking. The.question becomes is this area being expanded. The way the ordinance is currently. written, parking for restaurants is calculated at one space per two hundred sq. ft. This would require eight or nine parking spaces. I • 7 266 July 21, 1998 There -are two ways to address this. If there is adequate public parking within 600', a decision made by the Planning Commission, no additional parking is required. A waiver may be requested. The applicant would bring to the Planning Commission a request for shared parking with a signed agreement with a private landowner, or they could pay the fee of $1,200 per space waived. The applicant is the person leasing the property. Alderman Schaper stated there is clearly adequate public parking within 600'. Upon roll call, the resolution passed on a vote 7 to 1, with Alderman Williams voting no. RESOLUTION 100-98 AS RECORDED IN THE CITY CLERK'S OFFICE. CRACKER BARREL Removed from agenda at applicant's request. COMPENSATION FOR ALDERMEN Mayor Hanna introduced an ordinance amending Section 31.16 of the • Code of Fayetteville by increasing compensation for aldermen from $350 per month to $700 per month. City Attorney Rose read the ordinance for the second time. Alderman Miller stated he has always believed a city council should be paid a living wage. It was a fight to get even $350 a month. The present council is all college educated and running a business of over $80 million a year for $4.50 an hour. He said the additional $64,000 would not pay the Mayor's wages or the City Attorney's. It won't even buy a bathroom in -a park. This is not a venue for the rich and famous. It is so everyone can dedicate the time needed to do the job right. Alderman Daniel stated council work is rewarding but also stressful. Even so, she would not support a raise. She does not feel it would keep people from running. Alderman Young reported that most people he's heard from have supported the increase. Alderman Williams does not oppose an increase but thinks this is too much. The Council does not serve for money. 8 - • • RESOLUTION NO. LQ0-48 MICROFILMED A RESOLUTION APPROVING A LEASE WITH HOG CITY DINER FOR A ANNUAL RENTAL RATE OF $1,677 PAYABLE IN MONTHLY INSTALLMENTS OF $139.75, FOR A PERIOD OF TEN (10) YEARS, WITH A FIVE (5) YEAR OPTION, AND ALLOWING THE LESSEE FOUR ADDITIONAL FIVE (5) YEAR PERIODS RENEWING THE LEASE FOR OUTDOOR DINING ON THE TOWN SQUARE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves a lease with Hog City Diner for a • annual rental rite of $1,677 payable in monthly installments of $139.75, for a period of ten (10) years, with a five (5) year option, and allowing the Lessee four additional five (5) year periods renewing the lease for outdoor dining on the Town Square. A copy of the lease with attachments are attached hereto marked Exhibit "A" and Exhibit "B" and made a part hereof. PASSED AND APPROVED this 21 t day of July , 1998. APPROVE : By: red Hanna, Mayor ATTEST: By: y3≤ 61 Heather Woodruff, Ci& Clerk L 5 i � I • 4 t EXHIBIT A LEASE • This Agreement, made and entered into this 2/st day of Tu .i , 1998, by and between the City of Fayetteville, whose address is 113 West Mountain, hereinafter called Lessor, and Hog City Diner Company, whose address is I West Center, Fayetteville, Arkansas 72701, hereinafter called Lessee, WITNESSETH: 1. LEASED PREMISES. For and in consideration of the rents, covenants and agreements herein entered into and agreed upon by the Lessee as obligations to the Lessor, the Lessor lets, leases and demises unto Lessee, subject to the terms and conditions contained herein, the following described property containing approximately 1,676.16 square feet more or less, situated in Washington County, Arkansas: See Exhibit A attached hereto and made a part hereof. To have and to hold said premises unto the said Lessee for and during the term herein stated, subject to the covenants, terms, conditions and liens herein contained. 2. TERM. This lease shall commence on the date of this agreement and shall extend for a term of ten (10) years. 3. OPTION TO EXTEND. If the Lessee shall have fully performed every agreement • and covenant on Lessee's part to have been kept and performed under the term of this lease at the time of exercise and at the time of renewal, the Lessee is hereby granted the right and option to extend this lease, upon the same terms, for an additional period of five (5) years, with such option to be exercised in writing by the Lessee not later than one hundred eighty (180) days prior to the expiration of the basic or original term of this lease. Lessee may extend for up to four additional five (5) year extension periods utilizing the same procedures outlined above. 4. RENT. Lessee agrees to pay to Lessor the annual rental rate of $1,677.00 payable in monthly installments of $139.75 each, to be paid in advance beginning on the first day of the month following the issuance of a Certificate of Occupancy for the leased premises and on the first day of each and every month thereafter. The annual rental rate of $1,677.00 shall constitute the basic rental for the lease. During any five (5) year extension hereof, this lease shall be recalculated for such five (5) year tern in accordance with the following procedure: The basic rental herein set forth of $1,677.00 shall be divided by the figure in the Consumer Price Index appearing in the column "Food Items" or in any similar breakdown therein for the month of August 1998, and then multiplying that amount by the corresponding index for the month next preceding the first month of the next five (5) year term of this lease. The Consumer Price Index referred to is the [Revised 1953 Consumer Price Index U.S. (1957-1959 equal to 100) New Series • •Page 3 Lease --Hog City Diner beginning with January, 1964 (reflecting the change in prices of goods and services purchased by city wage earners and clerical -worker families to maintain their level of living)] published by the Bureau of Labor Statistics, United States Department of Labor. If the Bureau of Labor Statistics changes the form or the basis of calculating the Consumer Price Index, the parties agree to request the Bureau to make available, for the life of this agreement, a monthly Consumer Price Index in its present form and calculated on the same basis as its present form as the Index for 1998. The figure so obtained shall be used for calculating a comparative rental figure for the extended term of this lease, and the Lessee shall be liable to the Lessor for whichever is the larger of the rental so calculated upon comparison thereof, and if it appears that the adjusted rental rate based upon fluctuations in the Consumer Price Index results in a larger minimum rental than that applying to the original term of this lease, then such larger sum of rent shall be the rental to be paid by the Lessee during the remaining or extended term of this lease. 5. ADDITIONAL CONSIDERATION. As additional consideration for the leased premises Lessee agrees to construct a new potting shed for use in maintaining the town square gardens at the location indicated on Exhibit "A", attached hereto at a cost not to exceed $3,000 and in a design mutually agreed upon by the parties hereto. • 6. USE. Lessee agrees to use the lease premises for the purpose of operating an outdoor dining area and for no other purpose or purposes without the written consent of Lessor having been obtained in advance. 7. CONSTRUCTION OF IMPROVEMENTS. All improvements constructed by the Lessor on the leased premises shall be accomplished within the boundaries of the leased premises and Lessor shall make every effort to conduct such construction so as to have a minimal impact on the town square gardens. Construction shall proceed in substantially the same stages and manner as set forth in Section 01100 of the Project Manual attached hereto as Exhibit B. 8. INGRESS AND EGRESS. Except for emergency and handicapped access, all ingress and egress to and from the leased premises shall be through the Old Post Office building. Handicapped access is limited to the east area of the leased premises. 9. MUSIC. Lessee agrees not to provide or allow any live music on the premises and any amplified music will be limited to background music for the outdoor dining area. 10 SIGNS AND ADVERTISING. No sign, picture, advertisement, or notice shall be displayed on any part of the leased premises visible to the public without the previous consent, in writing, of the Lessor. 11. COST OF REPLANTING. Lessee agrees to reimburse Lessor for all reasonable costs, including material and labor, incurred by Lessor in any replanting made. necessary by the • construction of any and all improvements made by the Lessee to the leased property. Page 4 • Lease --Hog City Diner 12. NON -SUCCESSION. This lease agreement shall insure only to the benefit of and be binding upon the parties hereto and not to their respective heirs, successors and assigns. 13. TAXES. Lessee shall pay any and all ad valorem taxes special improvement district taxes levied and assessed against said premises and the improvements located thereon during the term of this lease. 14. COMPLIANCE WITH LAWS. Lessee agrees not to violate any law, ordinance, rule or regulation of any governmental authority having jurisdiction of the leased premises. 15. INSURANCE OF LESSEE'S PROPERTY. Lessee shall be solely responsible for maintaining insurance on his property, including but not limited to movables, trade fixtures installed by Lessee, furniture, furnishings and inventory. 16. RIGHT OF INSPECTION. The Lessor shall have. the right, in person or through Lessor's duly authorized representative, at all reasonable times to inspect the leased premises. 17. ALTERATIONS. Lessee shall have the right and privilege to make, at Lessee's expense, ordinary repairs and alterations to the leased premises; however, no alterations shall be made without the prior written consent of Lessor. • 18. FIXTURES. All trade fixtures installed by Lessee or acquired by Lessee independently of this lease shall remain Lessee's property and may be removed by Lessee at the expiration of this lease; provided, however, Lessee shall restore the leased premises and repair any damage thereto caused by such removal. 19. ACCEPTANCE OF PREMISES. It is expressly understood and agreed by the Lessee that it is leasing the demised premises in its current condition and that if the plumbing or electrical wiring proves to be inadequate for its purposes that it may, at its own expense, have such required additional plumbing and electrical wiring installed. 20. MAINTENANCE OF LEASED PREMISES. The Lessee shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by Lessee in connection with utility services of whatever kind or nature including any sewer charges and pickup of Lessee's trash and garbage. The Lessee shall be responsible for maintaining the improvements upon the leased premises in a satisfactory condition and the premises shall, at all times, be maintained in a neat and orderly condition. Lessee's business operations will be carried on in accordance with the highest standards for such businesses, particularly in the areas of cleanliness and service. 21. INDEMNIFICATION OF LESSOR The Lessee shall defend, indemnify and hold • the Lessor harmless against any expense, claim, loss or liability as the result of any breach by the • Page 5 Lease --Hog City Diner Lessee, Lessee's agents, servant, employees, customers, visitors or licensees, of any covenant or condition of this lease, or as a result of the Lessee's use or occupancy of the demised premises, or the carelessness, negligence or improper conduct of the Lessee, Lessee's agents, servants, employees, customers, visitors or licensees. To facilitate the provisions hereof, the Lessee shall keep and maintain at all times during the term of this lease, or any extension thereof, in full force and effect with a company or companies acceptable to Lessor, insurance against third party liability by reason of the Lessee's occupancy of the demised premises with limits of liability thereunder of not less than $100,000 per person and $500,000 per accident with $500,000 coverage for property damage. 22. RETURN OF LEASED PROPERTY. At the end of the term of this lease, or upon any other earlier termination, the Lessee agrees promptly and peaceably to restore possession of the leased premises to the Lessor in as good condition as they were when delivered to Lessee, ordinary wear and tear excepted. To accommodate this covenant, the Lessee hereby waives any and all notice to which Lessee may be entitled under the laws of the State of Arkansas as a prerequisite to a suit against Lessee for the unlawful detention of the property. 23. NOTICES. Any notice called for or permitted under the terms hereof shall be given in writing and sent by certified mail to the Lessee at 1 West Center, Fayetteville, Arkansas 72701, • and to the Lessor at 113 West Mountain, Fayetteville, Arkansas 72701. 24. WASTE. Lessee agrees not to commit waste, nor permit waste to result or to be done to or upon the aforesaid property and premises; not to conduct any other business thereon or therein, nor store or permit to be stored thereon or therein any explosives, combustible substances or materials of any nature, which would increase.the fire hazard or cause a premium to be charged for insurance higher than that charged for the present use of said property; and not to operate, nor permit to be operated, nor to exist thereon or therein, any public or private nuisance. 25. RIGIIT TO CURE. If the Lessee shall default in any of the covenants, agreements, conditions, or undertakings herein contained to be kept, observed and performed by the Lessee, the Lessor shall give notice of such default in writing to the Lessee and the Lessee shall have thirty (30) days from and after the giving of such notice to eliminate and/or cure the cause of such default. If said default is eliminated or cured within the aforementioned thirty (30) days, the Lessee shall not be considered in default or in breach of this lease. 26. SEVERABILITY. Each paragraph of this lease agreement is severable from all other paragraphs. In the event any court of competent jurisdiction determines that any paragraph or subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and subparagraphs will remain in full force and effect. 27. INTERPRETATION. This lease agreement shall be interpreted according to and • enforced under the laws of the State of Arkansas. Page 6 Lease --Hog City Diner 28. ENTIRE AGREEMENT. This lease agreement contains the entire agreement of both parties hereto, and not other oral or written agreement shall be binding on the parties hereto. 29. NON -WAIVER PROVISION. The failure of the Lessor or Lessee to insist upon the strict and literal performance of any agreement or condition herein or to exercise any option retained or granted by reason of a default by the lessee shall not constitute a waive of the Lessor's right thereafter to insist upon and enforce full performance of such conditions and agreements. IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and seals and have caused their names to be hereunto affixed by the undersigned officers who are duly authorized so to act, on this F day of L , 1998. LESSOR: • CITY OF FAYETTEVILLE, ARKANSAS i - A Municipal Corporation. B u \• A By/ Fred Hanna, Mayor ATTEST: By: Heather Woodruff, City Jerk • n I • FAYE'T'TEVILLE. THE CITY OF FAYETTEVIIIE. ARKANSAS KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY LEGAL DEPARTMENT DEPARTMENTAL CORRESPONDENCE TO: City Council FROM: Kit Williams, City Attorney DATE: July 20, 2004 RE: Revised Lease with OPO Enterprises, Inc. Mayor Coody has obtained a new proposed lease with OPO Enterprises, Inc. with an annual rent of $2,400.00 at $200.00 per month. Although this is a tiny fraction of the rent being charged for the Old Post Office building itself, it does represent an increase of over 43% from the previous rent (which had been kept low while Hog City amortized their thousands of dollars of improvements to turn a parking area into an enclosed outdoor seating area). I have revised the Lease to remove outdated references to construction (since this was finished by Hog City) and brought its language up to current standards. OPO Enterprises, Inc. will now only have to remove litter from in front of its two entrances. The emergency exit gate on the West into the garden area has been (with OPO Enterprises; Inc.'s consent) again limited to emergency only exits instead of being permitted as a regular entrance/exit to the outdoor seating area. This was the original requirement in the Hog City lease to protect the plantings near this gate. With an annual rent of $2,400.00 instead of the litter removal from the Square Garden sidewalks and $1.00, this lease is probably legal. It obviously remains a very good deal for OPO Enterprises, Inc. $200.00 per month is probably the lowest possible amount under an adequacy analysis. It is still up to the City Council as "trustees for the people of the municipality they represent" to determine the appropriateness of this proposed lease. LEASE This Agreement, made and entered into this 20th day of July, 2004, by and between the City of Fayetteville of Fayetteville, whose address is 113 West Mountain and OPO Enterprises, Inc. whose address is 1 West Center, Fayetteville, Arkansas 72701. WITNESSETH: 1. LEASED PREMISES. For and in consideration of the rents, covenants and agreements herein entered into and agreed upon by OPO Enterprises, Inc. as obligations to the City of Fayetteville, the City of Fayetteville leases to OPO Enterprises, Inc., subject to the terms and conditions contained herein, the improved seating area adjoining the old Post Office Building within the fence containing approximately 1,676.16 square feet more or less, situated in Washington County, Arkansas as shown by the Site Plan of Wittenberg, Delong & Davidson, Inc. as attached as Exhibit A. To have and to hold said premises unto said OPO Enterprises, Inc. for and during the term herein stated, subject to the covenants, terms, conditions and liens herein contained. 2. TERM. This lease shall commence on August 1, 2004 and shall extend for an initial term of two (2) years. If OPO Enterprises, Inc. shall have fully performed every agreement and covenant on OPO Enterprises, Inc. part to have been kept and performed under the term of this lease at the time of exercise and at the time of renewal, OPO Enterprises, Inc. is hereby granted the right if mutually agreeable with the City of Fayetteville and option to extend this lease, upon the same terms, for an additional period of two (2) years, with such option to be exercised in writing by OPO Enterprises, Inc. not later than one hundred eighty (180) days prior to the expiration of the basic or original term of this lease. OPO Enterprises, Inc. may extend for up to four additional two (2) year extension periods utilizing the same procedures outlined above if mutually agreed to by both OPO Enterprises, Inc. and City of Fayetteville for a total lease period of twelve (12) years. 3. RENT. OPO Enterprises, Inc. agrees to pay to City of Fayetteville the annual rental rate of $2,400.00 payable in monthly installments of $200.00 each, to be paid in advance beginning on the first day of August, 2004 and on the first day of each and every month thereafter. No security deposit shall be required. 4. USE. OPO Enterprises, Inc. agrees to use the leased premises for the purpose of operating an outdoor dining area and for no other purpose or purposes without the written consent of the City of Fayetteville having been obtained in advance. II 5. CONSTRUCTION OF IMPROVEMENTS. Any alteration of the improvements within the City of Fayetteville's leased premises must be approved by the Mayor prior to such alteration. 6. INGRESS AND EGRESS. Except for emergency and handicapped access, all ingress and egress to and from the leased premises shall be through the Old Post Office building. Handicapped access is limited to the east area of the leased premises. 7. MUSIC. " OPO Enterprises, Inc. agrees that only live non -amplified music will be permitted on the leased premises which shall not be loud enough to disturb persons enjoying the Square Gardens. 8. SIGNS AND ADVERTISING. No sign, picture, advertisement, or notice shall be displayed on any part of the leased premises visible to the public without the previous consent, in writing; or the City of Fayetteville. 9. LITTER REMOVAL. OPO Enterprises, Inc. shall provide daily litter removal from the portion of the Town Square in front of its public entrances. 10. NON -SUCCESSION. This lease agreement shall inure only to the benefit of and be binding upon the parties hereto and not to their respective heirs, successors and assigns. This lease is not assignable without the consent of the City of Fayetteville. 11. TAXES. OPO Enterprises, Inc. shall pay any and all ad valorem taxes special improvement district taxes levied and assessed against said premises and the improvements located thereon during the term of this lease. 12. COMPLIANCE WITH LAWS. OPO Enterprises, Inc. agrees not to violate any law, ordinance, rule or regulation of any government authority having jurisdiction of the leased premises. 13. INSURANCE OF OPO ENTERPRISES, INC.'S PROPERTY. OPO Enterprises, Inc. shall be solely responsible for maintaining insurance on its property, including but not limited to movables, trade fixtures installed by OPO Enterprises, Inc., furniture, furnishings and inventory. 14. RIGHT OF INSPECTION. The City of Fayetteville shall have the right, in person or through the City of Fayetteville's duly authorized representative, at all reasonable times to inspect the leased premises. 15. ALTERATIONS. OPO Enterprises, Inc. shall have the right and privilege to make, at OPO Enterprises, Inc.'s expense, ordinary repairs and alterations to the leased premises; however, no alterations shall be made without the prior written consent of the City of Fayetteville. 16. FIXTURES. All trade fixtures installed by OPO Enterprises, Inc. or acquired by OPO Enterprises, Inc. independently of this lease shall remain OPO Enterprises, Inc.'s property and may be removed by OPO Enterprises, Inc. at the expiration of this lease; provided, however, OPO Enterprises, Inc. shall restore the leased premises and repair any damage thereto caused by such removal. 17. ACCEPTANCE OF PREMISES. The OPO Enterprises, Inc. acknowledges it has inspected the premises and determined them adequate for its intended uses. OPO Enterprises, Inc. accepts the premises in their current condition. 18. MAINTENANCE OF LEASED PREMISES. OPO Enterprises, Inc. shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by OPO Enterprises, Inc. in connection with utility services of whatever kind or nature including any sewer charges and pickup of OPO Enterprises, Inc.'s trash and garbage. OPO Enterprises, Inc. shall be responsible for maintaining the improvements upon the leased premises in a satisfactory condition and the premises shall, at all times, be maintained in a neat and orderly condition. OPO Enterprises, Inc.'s business operations will be carried on in accordance with the highest standards for such businesses, particularly in the areas of cleanliness and service. 19. INDEMNIFICATION OF CITY OF FAYETTEVILLE. OPO Enterprises, Inc. shall defend, indemnify and hold the City of Fayetteville harmless against any expense, claim, loss or liability as the result of any breach by OPO Enterprises, Inc., OPO Enterprises, Inc.'s agents, servant, employees, customers, visitors or licensees, of any covenant or condition of this lease, or as a result of OPO Enterprises, Inc.'s use or occupancy of the demised premises, or the carelessness, negligence of improper conduct of OPO Enterprises, Inc., OPO Enterprises, Inc.'s agents, servants, employees, customers, visitors or licensees. To facilitate the provisions hereof, OPO Enterprises, Inc. shall keep and maintain at all times during the term of this lease, or any extension thereof, in full force and effect with a company or companies acceptable to City of Fayetteville, insurance against third party liability by reason of OPO Enterprises, Inc.'s occupancy of the demised premises with limits of liability thereunder of not less 3 than $100,000.00 per person and $500,000.00 per accident with $500,000.00 coverage for property damage. 20. RETURN OF LEASED PROPERTY. At the end of the term of this lease, or upon any other earlier termination, OPO Enterprises, Inc. agrees promptly and peaceably to restore possession of the leased premises to the City of Fayetteville in as good condition as they were when delivered to OPO Enterprises, Inc., ordinary wear and tear excepted. To accommodate this covenant, OPO Enterprises, Inc. hereby waives any and all notice to which OPO Enterprises, Inc. may be entitled under the laws of the State of Arkansas as a prerequisite to a suite against OPO Enterprises, Inc. for the unlawful detention of the property. 21. NOTICES. Any notice called for or permitted under the terms hereof shall be given in writing and sent by certified mail to OPO Enterprises, Inc., at P.O. Box 519, Flippen, AR 72634 and to the Mayor's Office, City of Fayetteville, 113 W. Mountain St., Fayetteville, AR 72701. If such certified mail is returned to sender, the City of Fayetteville may provide adequate notice by posting said Notice on the premises. 22. WASTE. OPO Enterprises, Inc. agrees not to commit waste, not permit waste to result or to be done to or upon the aforesaid property and premises; not to conduct any other business thereon or therein, nor store or permit to be stored thereon or therein any explosives, combustible substances or materials or any nature, which would increase the fire hazard or cause a premium to be charged for insurance higher than that charged for the present use of said property; and not to operate nor permit to be operated, nor to exist thereon or therein, any public or private nuisance. 23. RIGHT TO CURE. If OPO Enterprises, Inc. shall default in any of the covenants, agreements, conditions, or undertakings herein contained to be kept, observed and performed by OPO Enterprises, Inc., the City of Fayetteville shall give notice of such default in writing to OPO Enterprises, Inc. and OPO Enterprises, Inc. shall have thirty (30) days from and after the giving of such notice to eliminate and/or cure the cause of such default. If said default is eliminated or cured with the aforementioned thirty (30) days, OPO Enterprises, Inc. shall not be considered in default or in breach of this lease. 24. SEVERABILITY. Each paragraph of this lease agreement is severable from all other paragraphs. In the event any court of competent jurisdiction determines that any paragraph or subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and subparagraphs will remain in full force and effect. 4 25. INTERPRETATION. This lease agreement shall be interpreted according to and enforced under the laws of the State of Arkansas. 26. ENTIRE AGREEMENT. This lease agreement contains the entire agreement of both parties hereto, and no other oral or written agreement shall be binding on the parties hereto. 27. NON -WAIVER PROVISION. The failure of the City of Fayetteville or OPO Enterprises, Inc. to insist upon the strict and literal performance of any agreement or conditions herein or to exercise any option retained or granted by reason of a default by OPO Enterprises, Inc. shall not constitute a waiver of the City of Fayetteville's right thereafter to insist upon and enforce full performance of such conditions and agreements. IN WITNESS WHEREOF, the City of Fayetteville and OPO Enterprises, Inc. have hereunto set their hands and seals and have caused their names to be hereunto affixed by the undersigned officers who are duly authorized to act, on this 20th day of July, 2004. OPO ENTERPRISES, INC. CITY OF FAYETTEVILLE, ARKANSAS By: GARY FANCHER DAN COODY Mayor Title: By: Attest: Name & Title Attest: Sondra Smith, City Clerk 0 C.a- OPp £n+ec cr'tseS RESOLUTION NO. A RESOLUTION APPROVING A TWO YEAR LEASE WITH OPO ENTERPRISES, INC. FOR RENTAL RATE OF $1 PER YEAR PLUS OTHER GOOD AND VALUABLE CONSIDERATION, FOR A PERIOD OF TWO (2) YEARS, AND ALLOWING THE LESSEE FIVE ADDITIONAL TWO (2) YEAR PERIODS RENEWING THE LEASE FOR OUTDOOR DINING ON THE TOWN SQUARE FOR A TOTAL LEASE PERIOD OF TWELVE (12) YEARS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves a lease with OPO Enterprises, Inc for a rental rate $1 per year plus other good and valuable consideration, for a period of two (2) years, and allowing the Lessee five additional two (2) year periods renewing the lease for outdoor dining on the Town Square if mutually agreeable with the City. A copy of the lease with attachments are attached hereto marked Exhibit "A" and Exhibit "B" and made a part hereof. PASSED AND APPROVED this _ day of , 2004. APPROVED: By: Dan Coody, Mayor ATTEST: By: Sondra Smith, City Clerk LEASE This Agreement, made and entered into this day of , 2004, by and between the City of Fayetteville, whose address is 113 West Mountain, hereinafter called Lessor, and OPO Enterprises, Inc., whose address is 1 West Center, Fayetteville, Arkansas 72701, hereinafter called Lessee, WITNESSETH: LEASED PREMISES. For and in consideration of the rents, covenants and agreements herein entered into and agreed upon by the Lessee as obligations to the Lessor, the Lessor lets, leases and demises unto Lessee, subject to the terms and conditions contained herein, the following described property containing approximately 1,676.16 square feet more or less, situated in Washington County, Arkansas: See Exhibit B attached hereto and made a part hereof. To have and to hold said premises unto the said Lessee for and during the term herein stated, subject to the covenants, terms, conditions and liens herein contained. 2. TERM. This lease shall commence on the date of this agreement and shall extend for a term of two (2) years. 3. OPTION TO EXTEND. If the Lessee shall have fully performed every agreement and covenant on Lessee's part to have been kept and performed under the term of this lease at the time of exercise and at the time of renewal, the Lessee is hereby granted the right if mutually agreeable with the City an option to extend this lease, upon the same terms, for an additional period of two (2) years, with such option to be exercised in writing by the Lessee not later than one hundred eighty (180) days prior to the expiration of the basic or original term of this lease. Lessee may extend for up to four additional two (2) year extension periods utilizing the same procedures outlined above if mutually agreed to by both Lessee and Lessor for a total lease period of twelve (12) years. 4. RENT. Lessee agrees to pay to Lessor the rental rate of $1 per year plus other good and valuable consideration. The rental rate of $1 per year plus other good and valuable consideration shall constitute the basic rental for the lease. 5. USE. Lessee agrees to use the lease premises for the purpose of operating an outdoor dining area and for no other purpose or purposes without the written consent of Lessor having been obtained in advance. 6. CONSTRUCTION OF IMPROVEMENTS. All improvements constructed by the Lessee on the leased premises shall be accomplished within the boundaries of the leased premises and Lessee shall make every effort to conduct construction so as to have a minimal impact on the town square gardens. INGRESS AND EGRESS. Access to the leased premise may be from the existing gate access along the west fence or from the existing access along the east line. MUSIC. Lessee agrees that only live non -amplified music will be permitted on the property in compliance with all City codes. SIGNS AND ADVERTISING. No sign, picture, advertisement, or notice shall be displayed on any part of the leased premises visible to the public without the previous consent, in writing, of the Lessor. SQUARE GARDEN & LITTER REMOVAL. Lessee will be responsible for any damage to Square Garden plantings and shall provide daily litter removal from the Town Square. COST OF REPLANTING. Lessee agrees to reimburse Lessor for all reasonable costs, including material and labor, incurred by Lessor in any replanting made necessary by the construction of any and all improvements made by the Lessee to the leased property or by damage caused by Lessee's patrons' use of the Square Garden. NON -SUCCESSION. This lease agreement shall insure only to the benefit of and be binding upon the parties hereto and not to their respective heirs, successors and assigns. TAXES. Lessee shall pay any and all ad valorem taxes special improvement district taxes levied and assessed against said premises and the improvements located thereon during the term of this lease. COMPLIANCE WITH LAWS. Lessee agrees not to violate any law, ordinance, rule or regulation of any government authority having jurisdiction of the leased premises. INSURANCE OF PROPERTY. Lessee shall be solely responsible for maintaining insurance on his property, including but not limited to movables, trade fixtures installed by Lessee, furniture, furnishings and inventory. Lessee shall maintain during the term or this lease comprehensive general liability insurance in the amount of $1,000,000 for each occurrence, to protect all claims arising out of the use of leased premises that result in bodily injury, death, or property damage. The policy or policies shall contain a clause that the insurer will not cancel or decrease insurance coverage without giving the City 60 days notice in writing. • r • 16. RIGHT OF INSPECTION. The Lessor shall have the right, in person or through Lessor's duly authorized representative, at all reasonable times to inspect the leased premises. 17. ALTERATIONS. Lessee shall have the right and privilege to make, at Lessee's expense, ordinary repairs and alterations to the leased premises; however, no alterations shall be made without the prior written consent of Lessor. 18. FIXTURES. All trade fixtures installed by Lessee or acquired by Lessee independently of this lease shall remain Lessee's property and may be removed by Lessee at the expiration of this lease; provided, however, Lessee shall restore the leased premises and repair any damage thereto caused by such removal. 19. ACCEPTANCE OF PREMISES. The Lessee shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by Lessee in connection with utility services of whatever kind or nature including any sewer charges and pickup of Lessee's trash and garbage. 20. MAINTENANCE OF LEASED PREMISES. The Lessee shall be liable for all license fees, occupation taxes and the like in connection with the operation of any business on the leased premises, and shall pay all charges incurred by Lessee in connection with utility services of whatever kind or nature including any sewer charges and pickup of Lessee's trash and garbage. The Lessee shall be responsible for maintaining the improvements upon the leased premises in a satisfactory condition and the premises shall, at all times, be maintained in a neat and orderly condition. Lessee's business operations will be carried on in accordance with the highest standards for such businesses, particularly in the areas of cleanliness and service. Lessee shall be responsible for repairs to fence surrounding the patio area if damage is caused by lessee use of leased area. 21. INDEMNIFICATION OF LESSOR. The Lessee shall defend, indemnify and hold the Lessor harmless against any expense, claim, loss or liability as the result of any breach by the Lessee, Lessee's agents, servant, employees, customers, visitors or licensees, of any covenant or condition of this lease, or as a result of the Lessee's use or occupancy of the demised premises, or the carelessness, negligence or improper conduct of the Lessee, Lessee's agents, servants, employees, customers, visitors or licensees. To facilitate the provisions hereof, the Lessee shall keep and maintain at all times during the term of this lease, or any extension thereof, in full force and effect with a company or companies acceptable to Lessor, insurance against third party liability by reason of the Lessee's occupancy of the demised premises with limits of liability thereunder of not less than $100,000 per person and $500,000 per accident with $500,000 coverage for property damage. 22. RETURN OF LEASED PROPERTY. At the end of the term of this lease, or upon any other earlier termination, the Lessee agrees promptly and peaceably to restore possession of the leased premises to the Lessor in as good condition as they were when delivered to Lessee, ordinary wear and tear excepted. To accommodate this covenant, the Lessee hereby waives any and all notice to which Lessee may be entitled under the laws of the State of Arkansas as a prerequisite to a suit against Lessee for the unlawful detention of the property. 23. NOTICES. Any notice called for or permitted under the terms hereof shall be given in writing and sent by certified mail to the Lessee at P.O. Box 519, Flippen, AR 72634, and to the Lessor at 113 West Mountain, Fayetteville, Arkansas 72701. 24. WASTE. Lessee agrees not to commit waste, not permit waste to result or to be done to or upon the aforesaid property and premises; not to conduct any other business thereon or therein, nor store or permit to be stored thereon or therein any explosives, combustible substances or materials of any nature, which would increase the fire hazard or cause a premium to be charged for insurance higher than that charged for the present use of said property; and not to operate nor permit to be operated, nor to exist thereon or therein, any public or private nuisance. 25. RIGHT TO CURE. If the Lessee shall default in any of the covenants, agreements, conditions, or undertakings herein contained to be kept, observed and performed by the Lessee, the Lessor shall, give notice of such default in writing to the Lessee and the Lessee shall have thirty (30) days from and after the giving of such notice to eliminate and/or cure the cause of such default. If said default is eliminated or cured within the aforementioned thirty (30) days, the Lessee shall not be considered in default or in breach of this lease. 26. SEVERABILITY. Each paragraph of this lease agreement is severable from all other paragraphs. In the event any court of competent jurisdiction determines that any paragraph or subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and subparagraphs will remain in full force and effect. 27. INTERPRETATION. This lease agreement shall be interpreted according to and enforced under the laws of the State of Arkansas. 28. ENTIRE AGREEMENT. This lease agreement contains the entire agreement of both parties hereto, and not other oral or written agreement shall be binding on the parties hereto. I 29. NON -WAIVER PROVISION. The failure of the Lessor or Lessee to insist upon the strict and literal performance of any agreement or conditions herein or to exercise any option retained or granted by reason of a default by the lessee shall not constitute a waive of the Lessor's right thereafter to insist upon and enforce full performance of such conditions and agreements. IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and seals and have caused their names to be hereunto affixed by the undersigned officers who are duly authorized to act, on this _ day of , 2004. ATTEST:• By: Name & Title ATTEST: By: Sondra Smith, City Clerk LESSEE: By: Name & Title LESSOR: CITY OF FAYETTEVILLE, ARKANSAS A Municipal Corporation. By: Dan Coody, Mayor STAFF RIJEW FORM - FINANCIAL OBLIGATION* XXX AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council Meeting of: July 20, 2004 FROM: Gary Dumas Operations Department Name Division Department ACTION REQUIRED: Resolution Approving Lease with OPO Enterprises, Inc. for the patio within the Square Garden on the Town Square for $1.00 annually plus other good and valuable consideration. COST TO CITY: ($1.00) $ - Parks Category/Project Budget Program Category / Project Name Account Number Funds Used to Date Program / Project Category Name Project Number Remaining Balance Fund Name BUDGET IEW: Budgeted Item Budget Adjustment Attached Budge Tanager Date RANT/LEASE REVIEW: Date Manager Date Internal Ali itor Date City Attorney STAFF Date Purchasing Manager Division Head Date _ - -ZS- o4 Department Date ll &-6-VY// Finan e & Internal Services Dir. Date Chie dministra ve Off' er Date Mayor Dae Date Received in Mayor's Office 3a oT, Date Cross Reference: Previous Ord/Res#: Orig. Contract Date: Orig. Contract Number: New Item: Yes No Otaff Review Form - Page 2 • Description Comments: Budget Manager Accounting Manager Cit"tytttorne "Co /,,,�-�a�� 4a i raiv+45 tilt,n{ /LC LAJH 61 IOck Jr C2,t(; 1r#ho: %- Ic Purchasing Manager ADA Coordinator Internal Auditor Grants Coordinator Meeting Date Reference Comments: L r4� i�'J • 20, 2004 Staff X02; •'� �4 `` ox e' ^& 1sL uc.YR•- v.�C ^n c $ & Ji_ mow. - `S't aura S ,2.00 IMt1 tS Rola 4a O From: Clarice Pearman To: Dumas, Gary Subject: OPO lease The City Council passed a resolution leasing city property on the square with OPO Enterprises. However your backup for this item does not include a signed lease. Please let me know when I might expect to receive a signed agreement to continue the resolution processing. Thanks. Clarice Clarice Pearman - Re: OPO lease Page 1 From: Gary Dumas To: Clarice Pearman Date: 7/22/04 10:08AM Subject: Re: OPO lease Kit has the lease and it is signed. >>> Clarice Pearman 07/22/04 09:46AM >>> The City Council passed a resolution leasing city property on the square with OPO Enterprises. However your backup for this item does not include a signed lease. Please let me know when I might expect to receive a signed agreement to continue the resolution processing. Thanks. Clarice FAYETTE\ILLE • THE CITY OF FAYETTEVILLE, ARKANSAS City Clerk Division 113 West Mountain Fayetteville, AR 72701 Telephone: (479) 575-8323 DEPARTMENTAL CORRESPONDENCE To: Gary Dumas Operations Director From: Clarice Buffalohead-Pearman City Clerk Division Date: July 20, 2004 Re: Resolution No. 112-04 The City Council passed a resolution, July 20, 2004, approving a lease agreement OPO Enterprises for the square garden property. Attached is a copy the resolution and lease. The resolution with attachments will be recorded in the city clerk's office and microfilmed. If anything else is needed please let the clerk's office know. /cbp attachments cc: Nancy Smith, Internal Auditor I a RESOLUTION NO.112-04 A RESOLUTION TO APPROVE A TWO YEAR LEASE OF 1,676 SQUARE FEET OF CITY PROPERTY ADJOINING THE OLD POST OFFICE BUILDING TO OPO ENTERPRISES, INC. FOR AN ANNUAL RENTAL OF $2,400.00 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the lease attached as Exhibit A with OPO Enterprises, Inc. for an annual rent of $2,400.00 and authorizes the Mayor to sign said lease. PASSED and APPROVED this the 20`s day of July, 2004. APPROVED: EIlifts "'�. O,.;G�. to. �3 By: FAYETTEVILLE: D4NCOODY, Mayor • ATTEST: %yC,,,o GT vON C�..•` 'Huuuul By: SONDRA SMITH, City Clerk