HomeMy WebLinkAbout244-21 RESOLUTION0 FPYErr,
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113 West Mountain Street
Fayetteville, AR 72701
(479)575-8323
Resolution: 244-21
File Number: 2021-0733
THEATRESQUARED, INC. LEASE AGREEMENT AMENDMENT:
A RESOLUTION TO APPROVE AN AMENDMENT TO THE LEASE AGREEMENT WITH
THEATRESQUARED, INC. TO REMOVE 91 SQUARE FEET OF PROPERTY FROM THE
LEGAL DESCRIPTION, AND TO ALLOW THE RESIDENTIAL FACILITIES TO BE USED AS
SHORT TERM RENTALS WHEN NOT NEEDED FOR PERFORMANCES
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 an amendment
to the Lease Agreement with TheatreSquared, Inc. to remove 91 square feet of property from the legal
description and to allow the residential facilities to be used as short term rentals when not needed for
performances.
PASSED and APPROVED on 10/5/2021
Attest:
GOER KI
�.`��••' CITY
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Kara Paxton, City Clerk Treasurer: FgyE�E��C :;_
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Page 1 Printed on 10/0/21
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479)575-8323
Text File
File Number: 2021-0733
Agenda Date: 10/5/2021 Version: 1 Status: Passed
In Control: City Council Meetinq File Type: Resolution
Agenda Number: A.12
THEATRESQUARED, INC. LEASE AGREEMENT AMENDMENT:
A RESOLUTION TO APPROVE AN AMENDMENT TO THE LEASE AGREEMENT WITH
THEATRESQUARED, INC. TO REMOVE 91 SQUARE FEET OF PROPERTY FROM THE LEGAL
DESCRIPTION, AND TO ALLOW THE RESIDENTIAL FACILITIES TO BE USED AS SHORT TERM
RENTALS WHEN NOT NEEDED FOR PERFORMANCES
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 an amendment to the
Lease Agreement with TheatreSquared, Inc. to remove 91 square feet of property from the legal description
and to allow the residential facilities to be used as short term rentals when not needed for performances.
City of Fayetteville, Arkansas Page 1 Printed on 101612021
Peter Nierengarten
Submitted By
City of Fayetteville Staff Review Form
2021-0733
Legistar File ID
10/5/2021
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
9/16/2021 SUSTAINABILITY/RESILIENCE (631)
Submitted Date Division / Department
Action Recommendation:
Staff recommends approval of a lease amendment with Theatre Squared, Inc. for the premises located at 477 W.
Spring St., in consideration of the terms and conditions more fully described in the lease amendment.
Account Number
Project Number
Budgeted Item? No
Does item have a cost? No
Budget Adjustment Attached? No
Budget Impact:
Current Budget
Funds Obligated
Current Balance
Item Cost
Budget Adjustment
Remaining Budget
Fund
Project Title
V20210527
Purchase Order Number: Previous Ordinance or Resolution # 121-16
Change Order Number: Approval Date:
Original Contract Number:
Comments:
CITY OF
FAYETTEVILLE
ARKANSAS
MEETING OF OCTOBER 5, 2021
TO: Mayor and City Council
THRU: Susan Norton, Chief of Staff
FROM: Peter Nierengarten, Environmental Director
DATE: September 15, 2021
SUBJECT: Lease Amendment with Theatre Squared
CITY COUNCIL MEMO
RECOMMENDATION:
Staff recommends approval of a lease amendment with Theatre Squared, Inc. for the premises
located at 477 W. Spring St., in consideration of the terms and conditions more fully described
in the lease amendment.
BACKGROUND:
On June 7, 2016, the Fayetteville City Council approved Resolution No. 121-16 authorizing a
long-term lease agreement with Theatre Squared, Inc. for property located at the southeast
corner of Spring Street and West Ave (477 W. Spring Street). Since that time Theatre Squared
constructed a state -of -the-art theatrical performance facility on the premises, including a
restaurant/coffee shop and several residential apartments.
During right-of-way acquisition phase of the Ramble/Cultural Arts Corridor project along West
Ave, it was discovered that a portion of the property leased to Theatre Squared is being utilized
by the property owner to the south, Lushbaugh Holdings, LLC at 418 W. Meadow St. for
driveway access to the property. Lushbaugh Holdings, LLC has requested an access easement
for that portion of property from the City in order to continue using the driveway.
DISCUSSION:
The lease amendment with Theatre Squared, Inc. excludes from the leased premises the 91
square foot portion of property used as a driveway by Lushbaugh Holdings, LLC, the property
owner to the south.
Additionally, during discussions with Theatre Squared, Inc. about the lease amendment, they
requested an additional amendment to the portion of the lease regarding assignment and
subletting. Their request is to allow residential units on the premises to be rented as short term
rentals when not needed for visiting performance artists, playwrights, set/lighting/costume
designers or directors.
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
BUDGET/STAFF IMPACT:
None
Attachments:
Amendment No. 1 to Lease Agreement Between the City of Fayetteville, Arkansas and
TheatreSquared, Inc.
Exhibit A
• Resolution No. 121-16
Amendment No. 1 to Lease Agreement
Between the City of Fayetteville, Arkansas
And TheatreSquared, Inc.
WHEREAS, the Fayetteville City Council approved Resolution No. 121-16 authorizing
a long term lease agreement with TheatreSquared, Inc. for approximately 0.90 acres of land at
477 W. Spring Street (the "Lease Agreement") and the Lease Agreement was signed by Mayor
Lioneld Jordan on behalf of the City of Fayetteville on June 9, 2016; and
WHEREAS, TheatreSquared has requested an amendment to the Lease Agreement to
allow it to utilize its residential facilities as short term rentals when not being used to provide
free housing for visiting artists and others involved in its artistic endeavors; and
WHEREAS, the City and TheatreSquared wish to remove from the Leased Premises a
91 square foot portion of land currently used as a driveway by the property owner to the south.
NOW, THEREFORE, The City of Fayetteville ("City"), TheatreSquared, Inc.
(TheatreSquared) hereby amend the Lease Agreement as follows:
1. Section 1 of the Lease Agreement is amended to replace Exhibit "A" with the new
Exhibit "A" attached hereto, which excludes from the Leased Premises the 91 square foot
portion of property used as a driveway by Lushbaugh Holdings, LLC, the property owner to the
south.
2. Section 17 of the Lease Agreement is amended to read as follows:
(17) Assignment and Subletting. Subject to Section 39, Theatre Squared, Inc. may not
assign, sublet, mortgage or otherwise encumber its interest or estate in the Premises, or any part
thereof, or its rights pursuant to this Lease Agreement, without the prior written consent of City of
Fayetteville, Arkansas, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing. Lessee shall be permitted to allow use oft he Premises by art -related entities and resident
companies. Temporary subletting of community meeting or education space and subletting
portions of its planned residential facilities to visiting performance artists: playwrights: set,
lighting. costume and similar designers: and directors around the period of their performances.
rehearsals for said performances or artistic work at the Theatre Squared. Inc.'s theater are
authorized without further Resolution of the City Council. When not needed for the above -
described purposes. TheatreSquared may utilize its residential facilities as short term rentals
(regardless of whether such rentals are art -related) without further Resolution of the City Council.
Any assignment or subletting by Theatre Squared, Inc. shall not act or release Theatre Squared,
Inc. from its obligations pursuant to this Lease Agreement.
CITY OF
,111111111/�/ iviayvi �.yv'lcyC.ruuar
;ATTE T: ���G�ER K / •T �ii��� /V/
City Clerk Treasurer _ FAYEJ?c ILL
Date:
�OIVt Cw`ATRE SQUARED, INC.
By:
Title: E.re utive Director
ATTEST:
—I CA-
Secretary
Date: September 17 . 2021
EXHIBIT "A"
DESCRIPTION OF PREMISES
LEGAL DESCRIPTION:
A PART OF BLOCK 9 IN THE ORIGINAL PLAT OF THE TOWN OF FAYETTEVILLE, AR
AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE NW CORNER OF BLOCK
9 THENCE S87027'31"E 155.00 FEET, THENCE S03°00'42"W 151.50 FEET, THENCE
S87027'3I"E 6.00 FEET, THENCE S03000'42"W 92.13 FEET, THENCE N87043'20"W 161.76
FEET, THENCE N03011' 17"E 244.38 FEET TO THE P.O.B., CONTAINING 0.88 ACRES
MORE OR LESS SUBJECT TO EASEMENTS AND RIGHT OF WAY OF RECORD.
LESS AND EXCEPT: A FIFTEEN FOOT STRIP DESCRIBED AS BEGINNING AT THE
NORTHWEST CORNER OF BLOCK 9; THENCE NORTH 89 DEGREES 27 MINUTES 19
SECONDS EAST 15 FEET; THENCE SOUTH 0 DEGREES 06 MINUTES 07 SECONDS WEST
151.50 FEET; THENCE SOUTH 89 DEGREES 27 MINUTES 19 SECONDS WEST 15 FEET;
THENCE NORTH 0 DEGREES 06 MINUTES 07 SECONDS EAST 151.50 FEET TO THE
POINT OF BEGINNING.
LESS AND EXCEPT: A part of the Southwest Quarter (SW'/) of Block Numbered Nine (9) in the City of
Fayetteville, Arkansas, also being described as follows, to -wit: Beginning at the Southwest corner of said
Block Nine (9), thence North 02°41'07" East 81.28 feet along the existing right-of-way of West Avenue to
the point of beginning which is the northwest corner of the property described in Instrument No. 2004-
17115; thence North 02°41'07" East 2.50 feet; thence South 87°59'49" East 40.61 feet; thence South
02'15'00" West 2.00 feet; thence North 88°42'06" West 40.63 feet to the point of beginning, having an area
of 91 square feet, more or less.
\
Not to Scale
765-01751-00
City of Fayetteville
477 W. Spring
Warranty Deed
Inst. No. 95-286605
N 02041'07" E
S 87059'49" E 40.61'
S 02015'00" W
2.50'
2.00'
R
N 88042'06" W 40.63'
P.O.B.
ai
C
pp
N
Q
00
765-01754-000
Lushbough Holdings LLC
418 Meadow Street
w
Warranty Deed
s
Inst. No. 2004-17115
i
I�
O
O
Z
N
O
Z
P.O.C.
Southwest Corner
Block 9 of the
Original Town Plat
Less &
Except 91
S.F
EXHIBIT
THEATERSQUARED, INC.
AUG.2021
113 West Mountain
Street Fayetteville,
AR 72701
(479)575-8323
Resolution: 121-16
File Number: 2016-0278
THEATRE SQUARED, INC.:
A RESOLUTION TO APPROVE A LONG TERM LEASE OF THE SPRING AND WEST PARKING
LOT WITH THEATRE SQUARED, INC. TO CONSTRUCT A PERFORMANCE THEATER WITH
EDUCATIONAL AND COMMUNITY EVENT SPACE.
WHEREAS, in August of 2015, Theatre Squared, Inc. announced it had been awarded an Our Town
grant from the National Endowment of the Arts to begin exploratory work for a new theater; and
WHEREAS, in September the Walton Family Foundation selected Theatre Squared, Inc. for the first
Northwest Arkansas Design Excellence Program grant; and
WHEREAS, in October the Fayetteville City Council expressed its support for Theatre Squared, Inc.'s
proposed theater project to be built on the City owned parking lot at Spring and West and requested that
the City negotiate terms of the lease; and
WHEREAS, after City staff discovered a 15foot wide strip of land along West Street was not in the
City's clear ownership and no surviving owners could be located, the Fayetteville City Council
authorized the Fayetteville City Attorney's Office to file a condemnation action for this 15 foot strip; and
WHEREAS, after extensive negotiations, the City Administration forwards for the City Council's approval,
rejection or modification the final draft lease presented by Theatre Squared, Inc.
NOW THEREFORE, 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 Agreement
between the City of Fayetteville, Arkansas and Theatre Squared, Inc. attached hereto as an exhibit and
Page 1 Printed on 618116
Resolution: 121-16
File Number. 2016-0278
authorize Mayor Jordan to sign this Lease Agreement with its initial 25 year lease term and three
automatic renewal 25 year lease terms.
PASSED and APPROVED on 6/7/2016
Attest:
Sondra E. Smith, City Clerk
Treasurer
Page 2 Printed on 618116
City of Fayetteville, Arkansas 113West Mountain Street
•�;` = Fayetteville, AR 72701
(479) 575-8323
` Text File
File Number: 2016-0278
Agenda Date: 6/7/2016 Version: 1 Status: Passed
In Control: City Council Meeting
Agenda Number: D. 3
THEATRE SQUARED, INC.:
File Type: Resolution
A RESOLUTION TO APPROVE A LONG TERM LEASE OF THE SPRING AND WEST PARKING
LOT WITH THEATRE SQUARED, INC. TO CONSTRUCT A PERFORMANCE THEATER WITH
EDUCATIONAL AND COMMUNITY EVENT SPACE
WHEREAS, in August of 2015, Theatre Squared, Inc. announced it had been awarded an Our Town
grant from the National Endowment of the Arts to begin exploratory work for a new theater; and
WHEREAS, in September the Walton Family Foundation selected Theatre Squared, Inc. for the first
Northwest Arkansas Design Excellence Program grant; and
WHEREAS, in October the Fayetteville City Council expressed its support for Theatre Squared, Inc.'s
proposed theater project to be built on the City owned parking lot at Spring and West and requested that
the City negotiate terms of the lease; and
WHEREAS, after City staff discovered a 15 foot wide strip of land along West Street was not in the
City's clear ownership and no surviving owners could be located, the Fayetteville City Council
authorized the Fayetteville City Attorney's Office to file a condemnation action for this 15 foot strip;
and
WHEREAS, after extensive negotiations, the City Administration forwards for the City Council's
approval, rejection or modification the final draft lease presented by Theatre Squared, Inc.
NOW THEREFORE, 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
Agreement between the City of Fayetteville, Arkansas and Theatre Squared, Inc. attached hereto as an
exhibit and authorizes Mayor Jordan to sign this Lease Agreement with its initial 25 year lease term and
three automatic renewal 25 year lease tenns.
City of Fayetteville, Arkansas Page 1 Printed on 61812016
City of Fayetteville Staff Review Form
2016-0278
Legistar File ID
6/7/2016
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
Jeremy Pate 5/24/2016 Development Services /
Development Services Department
Submitted By Submitted Date Division / Department
Action Recommendation:
Approval of a lease with Theatre Squared, Inc. forth e premises located at the corner of West Avenue and Spring
Street, in consideration of the terms and conditions more fully described in the Lease Agreement
Budget Impact:
Account Number
Project Number
Budgeted Item? NA Current Budget
Funds Obligated
Current Balance
Does item have a cost? No Item Cost
Budget Adjustment Attached? No Budget Adjustment
Fund
Project Title
Remaining Budget L
V20140710
Previous Ordinance or Resolution #
Original Contract Number:
Comments:
Approval Date:
CITY OF
Fay4Z —Ile
ARKANSAS
MEETING OF JUNE 07, 2016
TO: Fayetteville City Council
THRU: Mayor Lioneld Jordan
CITY COUNCIL AGENDA MEMO
FROM: Jeremy Pate, Development Services Director ---
DATE: May 24, 2016
SUBJECT: Theatre Squared — Lease Agreement
RECOMMENDATION:
Approval of a lease with Theatre Squared, Inc. for the premises located at the corner of
West Avenue and Spring Street, in consideration of the terms and conditions more fully described
in the Lease Agreement
BACKGROUND:
Theatre Squared is a non-profit professional theatre in downtown Fayetteville offering an
intimate live theatre experience for 30,000 patrons each year, the only theater of its kind in a 150-
mile radius. Theatre Squared offers visitors access to professional artists in productions that are
conceived, rehearsed and performed only in Fayetteville; broadly accessible ticket prices, many
of which are subsidized for Fayetteville residents; educational programs reaching 1500
Fayetteville students at no cost; and free tickets for clients of various non-profit organizations in
Fayetteville. It is the top -rated attraction for Fayetteville on the on-line service TripAdvisor, and
has received recognition by the American Theatre Wing, founder of the Tony Awards, as one of
the nation's ten best emerging theaters. The organization is currently leasing space from the
Walton Arts Center in the Nadine Baum Studio as its primary performance area, and has several
satellite locations for storing equipment, offices and other supporting activities.
Growth in the organization and region suggests that the capacity of Theatre Squared has
yet to be realized. A study commissioned by the theatre determined that their rapid and sustained
growth over the past 10 years, a tenfold increase in audience and budget since 2009, along with
national recognition and the cultural arts amenities drawing visitors to the region, compels the
organization to explore opportunities for an expanded and new permanent home. Significant
infrastructure challenges, operating constraints and immediate capacity issues emerged from this
long-term facilities plan, resulting in a new focus on building "an intimate, state-of-the-art,
permanent home."
In August of 2015 Theatre Squared announced the award of a competitive Our Town grant
from the National Endowment of the Arts to begin the design exploration process. In September,
the Walton Family Foundation selected Theatre Squared as an inaugural project for the Northwest
Arkansas Design Excellence Program, providing significant grant funding to support exceptional
architecture and design, thereby funding the design costs for the project. The City supported
Mailing Address:
113 W. Mountain Street wvw.fayetteville-ar.gov
Fayetteville, AR 72701
Theatre Squared in these grant applications, to provide a new, world -class theatre in downtown
Fayetteville. After reviewing several sites to locate a new permanent home in downtown
Fayetteville, where the synergy of cultural arts, entertainment and necessary supporting amenities
are available, Theatre Squared determined the property best situated to add to the performing
arts destination that is downtown Fayetteville is a site at the southeast corner of West Avenue
and Spring Street, home to a parking lot that was utilized as a construction staging and Walton
Arts Center staff parking for much of 2014-2015. This property offers the size and proximity to
public parking, the Walton Arts Center, Dickson Street, and other amenities that a downtown
theatre needs to thrive.
In October 2015, the City Council approved Resolution 186-15, expressing the City's
support of Theatre Squared and its intent to negotiate a lease to utilize the property at the
southeast corner of West Avenue and Spring Street for a new performance facility. The mayor,
staff and City Attorney's office have drafted and negotiated with Theatre Squared the terms of the
agreement, which are included for the Council's consideration.
DISCUSSION:
As discussed in October, the staff fully supports this endeavor, as we believe the economic
and cultural impact of an expanded, unique theatre in the downtown can be a significant draw for
tourism and economic development to the City, supporting restaurants, shopping and other
establishments. Theatre Squared has agreed to fundraise and construct a major theatrical
performance facility on the premises, including other customer convenience facilities such as a
coffee shop or restaurant, retail/gift shop, and a residential facility for performing artists and
related persons. Highly professional performances meeting at a minimum the quantity and quality
of those performed over the past year are required as part of the lease, and Theatre Squared
may also provide facilities for community activities, educational programming, and gathering
spaces. Additional details regarding the programming of the planned spaces will be described by
Theatre Squared.
BUDGET/STAFF IMPACT:
Currently this property contains a public, pay parking lot containing approximately 54
spaces. For the better part of 2014-2015, the property was out of commission as a parking lot,
serving as a lay-down/staging area for the parking deck construction as well as temporary
dedicated parking for Walton Arts Center staff. The revenue from this parking lot, like all public
parking downtown, is dedicated to paying back the bonds issued for the deck construction,
though revenue reports show the subject lot is the least used and least revenue -generating of
any of the lots in the Entertainment District. During the initial discussion of the proposal, the
Finance Director made it clear that the Spring Street Parking Deck needed to be open and
operational before considering the lease, as this lot's revenue projection is to be transferred to
the deck for the continued bond payments, to offset the revenue lost once Theatre Squared
takes over the lot. If agreed upon, the lease will not take effect until the project is formally
approved and ready to be constructed, with proof of financing the capital costs in hand.
Attachments:
Letter of Request
FATE Pe"
r
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 186-15
File Number: 2015-0407
THEATRE SQUARED CITY COUNCIL SUPPORT:
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S SUPPORT OF THEATRE SQUARED AND ITS
INTENT TO LEASE 0.8 ACRE OF CITY PROPERTY AT THE SOUTHEAST CORNER OF WEST
AND SPRING AS THEATRE SQUARED'S NEW PERMANENT PERFORMANCE FACILITY
WHEREAS, Theatre Squared is a non-profit professional theater organization offering 220 performances
annually in the Entertainment District and in local schools and is the only such theater of this nature in a 150
mile radius; and
WHEREAS, Theatre Squared offers professional theater productions for broadly accessible and partially
subsidized ticket prices; and
WHEREAS, Theatre Squared has provided free educational programs for 1,500 Fayetteville students and is
listed as one of America's top ten emerging theaters; and
WHEREAS, Theatre Squared has received (with City of Fayetteville support) a competitive Our Town
grant from the National Endowment for the Arts to begin the design exploration process for a new facility.
NOW, THEREFORE, 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 expresses its support of
Theatre Squared and its intent to lease 0.8 acres of City property at the southeast corner of West and Spring
as Theatre Squared's new permanent performance facility.
PASSED and APPROVED on l 0/6/2015
Page 1 Printed on 1017115
Resolution 186-15
Approved: Attest:
l.,'soi _ Id 4dan, �or Sondra E. Smith, City Clerk Treasurer
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•
Page 2 Printed on 1017115
LEASE AGREEMENT
BETWEEN
THE CITY OF FAYETTEVILLE, ARKANSAS
and
THEATRE SQUARED, INC.
Table of Contents
Page
1. Premises and Improvements Leased ................. ............................................................ 1
2. Teriii.......................................................... .............. .................................. ...................
.1
3. Rental...... ..................... ................................................................................................
.4
4. Theatre Squared. Inc.'s Develoument and Construction of its theatrical
performance facilities and ancillary facilities..............................................................4
5.
Taxes ....................................... . ................................................................................
A
6.
Ins€irance.......................................................................................................................5
7.
Waiver of Subrogation Ri lits... ......... ................... .................................. ...._............... 6
8.
Maintenance ba Theatre S uared Inc............................................................................6
9.
Utilities..........................................................................................................................6
10.
Surrender of Premises....................................................................................................7
11.
No Offsets......................................................................................................................7
12.
Theatre Squared, Inc.'s Use...........................................................................................7
13.
Abatement of Theatre Squared, Inc.'s Obligations.......................................................8
14.
Restoration of Improvements.........................................................................................8
15.
Waste - Liens.................................................................................................................9
16.
Indemnification..............................................................................................................9
17.
Assignment and Subletting.........................................................................................10
18.
Total Condemnation of the Premises............................................................................11
19.
Partial Condemnation of the Premises..........................................................................11
20.
Holding Over ......... .......................11
.....................................................................
21.
Inspection....................................................................................................................12
22.
Default.........................................................................................................................12
23.
Remedies.....................................................................................................................13
24.
No Waiver...................................................................................................................14
25.
Quiet Enjoyment.........................................................................................................14
26.
Further Assurances......................................................................................................15
27.
Entire Agreement........................................................................................................15
28.
Severability.................................................................................................................15
29.
Applicable Law ....................... .............................15
30.
Venue..........................................................................................................................15
31.
Amendment.................................................................................................................15
32.
Headings.....................................................................................................................16
33.
Recorded Memorandum..............................................................................................16
34.
Binding Effect.............................................................................................................16
35.
Notices........................................................................................16
36.
Representations and Warranties of Theatre Squared Inc...........................................17
37.
Execution....................................................................................................................18
38.
Counterparts...........................................................................................................6....18
39.
Construction Financing...............................................................................................18
Table of Contents
(continued)
Exhibit A Description of Real Property
Exhibit B Plan of Development
Exhibit C Memorandum of Lease
LEASE AGREEMENT
This Lease Agreement from the City of Fayetteville, Arkansas to Theatre Squared, Inc. is
effective upon the approval by the Fayetteville City Council by Resolution and signature of Mayor
Lioneld Jordan and the approval of the Board of Directors of Theatre Squared, Inc. and authorized
signature of its Chairperson.
RECITALS:
The term of the lease does not begin to run nor is possession of the City's parking lot upon
which Theatre Squared, Inc.'s project is to be built transferred to Theatre Squared, Inc. until its
Large Scale Development (or similar development proposal) has been approved by the Fayetteville
Planning Commission or Fayetteville City Council and Theatre Squared, Inc. certifies to the City of
Fayetteville that it has the finances in hand or properly pledged to the City's satisfaction to construct
a substantial (majority) portion of its project. The City of Fayetteville acknowledges that Theatre
Squared may be required to complete its project in phases or stages over several years.
In consideration of the terms and conditions contained herein, the sufficiency of which
is acknowledged by the City of Fayetteville, Arkansas and Theatre Squared, Inc., the parties
agree as follows:
(1) Premises and Improvements Leased. Subject to the terms and conditions set
forth in this Lease Agreement, the City of Fayetteville, Arkansas leases and lets the Premises
located at the corner of West Avenue and Spring Street in Fayetteville as more particularly
described in Exhibit "A" unto Theatre Squared, Inc. who hereby accepts the Premises as is.
(2) Term.
(A) Initial Term. Unless sooner terminated as set forth below, the term of this Lease
Agreement shall be twenty-five (25) years, commencing after the date City of
Fayetteville, Arkansas and Theatre Squared, Inc. execute this Lease Agreement and
when Theatre Squared, Inc. obtains approval of its Large Scale Development or
similar development proposal from the Planning Commission or City Council and
certifies to the City of Fayetteville that Theatre Squared, Inc. has the finances in
hand to construct a substantial (majority) portion of its project. This date shall be
denoted the "Lease Commencement Date" and shall continue through the last day
of the month at 5:00 PM CST in which the twenty-fifth (25'h) anniversary of the
Lease Commencement Date occurs.
(B) Second Term. At the end of the original Term, Theatre Squared, Inc. shall have the
option to extend the Term of this Lease Agreement for a second period of twenty-
five (25) years subject to the terms and conditions herein set forth, provided Theatre
Squared, Inc. has continued to abide by all of its promises, commitments,
representations and warranties of this Lease Agreement and is not otherwise in
default. Theatre Squared, Inc. may execute its option to extend the Term by
providing written notice to the City of Fayetteville, Arkansas at least six (6) months
prior to the expiration of the original Term. After receipt of Theatre Squared, Inc.'s
written notice to extend its rental term, the City shall within one month notify
Theatre Squared, Inc. in writing if the City believes that Theatre Squared, Inc. has
failed to abide by any of its promises, commitments, representations or warranties or
otherwise is in default of this Lease Agreement. Theatre Squared, Inc. shall have at
least 5 months thereafter to cure any such alleged default or failure.
(C) Third Term. At the end of the second Term, Theatre Squared, Inc. shall have the
option to extend the Term of this Lease Agreement for a third period of twenty-five
(25) years subject to the terms and conditions herein set forth, provided Theatre
Squared, Inc. has continued to abide by all of its promises, commitments,
representations and warranties of this Lease Agreement and is not otherwise in
default. Theatre Squared, Inc. may execute its option to extend the Tenn by
providing written notice to the City of Fayetteville, Arkansas at least six (6) months
prior to the expiration of the second Term. After receipt of Theatre Squared, Inc.'s
written notice to extend its rental term, the City shall within one month notify
Theatre Squared, Inc. in writing if the City believes that Theatre Squared, Inc. has
failed to abide by any of its promises, commitments, representations or warranties or
otherwise is in default of this Lease Agreement, Theatre Squared, Inc. shall have at
least 5 months thereafter to cure any such alleged default or failure.
(D) Fourth Term. At the end of the third Term, Theatre Squared, Inc. shall have the
option to extend the Term of this Lease Agreement for a fourth period of twenty-five
(25) years subject to the terms and conditions herein set forth, provided Theatre
Squared, Inc. has continued to abide by all of its promises, commitments,
representations and warranties of this Lease Agreement and is not otherwise in
default. Theatre Squared, Inc. may execute its option to extend the Tenn by
providing written notice to the City of Fayetteville, Arkansas at least six (6) months
prior to the expiration of the third Term. After receipt of Theatre Squared, Inc.'s
written notice to extend its rental term, the City shall within one month notify
Theatre Squared, Inc. in writing if the City believes that Theatre Squared, Inc. has
failed to abide by any of its promises, commitments, representations or warranties or
otherwise is in default of this Lease Agreement. Theatre Squared, Inc. shall have at
least 5 months thereafter to cure any such alleged default or failure.
(3) Rental. As primary rental for the Premises Theatre Squared, Inc. agrees to faithfully
perform all of the Representations and Warranties of Theatre Squared, Inc. contained in Paragraph
36 of this Lease Agreement. As additional rental, Theatre Squared, Inc. shall pay in full on a timely
basis all costs, expenses, fees, and assessments owed in connection with any Theatre Squared, Inc.'s
development and construction upon the site.
(4) 'rhetltre Squared, 111c.'s DcN.Clopluent at)d Corlstrlictirrn of its tfleatric al
performance facilities and ancillary facilities. As a primary consideration to support this
Lease Agreement, Theatre Squared, Inc. agrees that it will fund raise and construct a major
theatrical performance facility on the Premises. Ancillary facilities including offices, parking
and loading areas and customer convenience facilities such as: a restaurant or coffee shop, a
retail or gift shop, a residential facility for visiting performance artists, directors, playwrights,
set, lighting, costume and similar designers, and community meeting and educational areas, etc.
may also be constructed in harmony with the principal theater on the Premises.
(5) Taxes. As additional rental, Theatre Squared, Inc. shall pay, before they become
delinquent, all ad valorem taxes, if any, and special or general assessments, if any, lawfully levied or
assessed against the Premises, or which may become a lien against the Premises, or which become
due and payable during the term hereof. Upon giving notice to City of Fayetteville, Arkansas,
Theatre Squared, Inc. may, in good faith and in the manner provided by law, contest any such tax or
assessment against the Premises; provided, all costs and expenses incident to contesting such taxes
or assessments shall be paid by Theatre Squared, Inc., and Theatre Squared, Inc. shall: (i) if
necessary to prevent any sale of the Premises or any loss or damage to City of Fayetteville,
Arkansas, pay such tax or assessment under protest; (ii) in the event of an adjudication adverse to
Theatre Squared, Inc., promptly pay such tax or assessment; (iii) indemnify and hold City of
4
Fayetteville, Arkansas harmless against any losses or damages arising from such contest; (iv) take
all such other actions as may be reasonably necessary to prevent any such sale or loss; and (v)
before such taxes or assessments become delinquent, deliver to City of Fayetteville, Arkansas proof
of Theatre Squared, Inc.'s timely and full payment of all such taxes and assessments. The duty of
indemnification shall survive the expiration or termination of this Agreement. Additionally, nothing
contained in this provision shall be a waiver of City of Fayetteville, Arkansas's right, at City of
Fayetteville, Arkansas's cost, to challenge the imposition of any type or kind of taxes on the
Premises.
(6) Insurance. Nothing contained herein shall obligate or otherwise require City of
Fayetteville, Arkansas to procure or maintain any insurance pertaining to the Premises. Theatre
Squared, Inc. will constantly at its sole cost and expense keep the Premises insured under special
form policies of fire and extended coverage for its full insurable value, with vandalism, sprinkler
leakage, and malicious mischief insurance, and such other reasonable additional coverages as may
from time to time be designated by City of Fayetteville, Arkansas, including, without limitation, all-
risk coverage, boiler and machinery insurance, flood insurance and earthquake insurance added as
endorsements to said insurance policy. This insurance must be maintained with a reliable insurance
company or companies licensed to do business in the state of Arkansas. These policies shall also
include a replacement cost coverage endorsement and must meet all coinsurance requirements of
the insurer, in an amount affording coverage of not less than eighty percent (80%) of the full
insurable value of the Premises. Such policy or policies shall provide that coverage is
noncancelable without thirty (30) days prior written notice to City of Fayetteville, Arkansas.
Theatre Squared, Inc. further agrees to carry and maintain commercial general liability
insurance written as primary coverage with a reliable insurance company licensed to do business
in the state of Arkansas, and acceptable to City of Fayetteville, Arkansas, covering occurrences
that may arise on the Premises as a result of the operations thereon, in amounts not less than
$1,000,000 per occurrence for bodily injury and $1,000,000 per occurrence for property damage
and $3,000,000 per occurrence of combined bodily injury and property damage. All policies
required by this provision shall be jointly payable to the Theatre Squared, Inc, and the City.
(7) Waiver of Subrogation Rights. City of Fayetteville, Arkansas and Theatre
Squared, Inc. each hereby waive their respective rights of subrogation against the other for any
and all claims and causes of action whatsoever arising out of any injury upon, or loss or damage
to, the Premises, or any part thereof, resulting from any risk or peril insured against by any of the
insurance policies herein required or purchased by the Theatre Squared, Inc. City of
Fayetteville, Arkansas and Theatre Squared, Inc. shall each promptly notify their respective
insurers of such waiver of subrogation rights.
(8) Maintenance by Theatre Squared, Inc. Theatre Squared, Inc. shall, at its sole
cost, risk and expense: (i) maintain the Premises in good condition and repair, excepting therefrom
only normal, reasonable wear and use; (ii) keep the Premises in a clean, safe and sanitary condition;
(iii) make, or cause to be made, all necessary repairs, whether interior, exterior or structural, on the
Premises; and (iv) provide for the reasonable care, landscaping and cleaning of the Premises.
(9) Utilities. Theatre Squared, Inc. shall, at its sole cost and expense, provide utilities
for the Premises, including without limitation all initial installation or connection fees or charges,
and all monthly fees, service charges or late charges for electricity, television, cable, telephones,
water, gas, sewer and garbage service, or any other expenses arising out of, or incident to Theatre
Squared, Inc.'s occupancy of the Premises.
(10) Surrender of Premises. At the termination under this Lease Agreement or the
expiration and non -renewal of a Term: (i) Theatre Squared, Inc. shall surrender and deliver to City
of Fayetteville, Arkansas the Premises in good repair and condition, excepting therefrom only
damage by fire, tornado or other casualty and normal, reasonable wear and use; and (ii) all
improvements and fixtures affixed to the Premises shall be and remain the sole property of City of
Fayetteville, Arkansas without any payment whatsoever by City of Fayetteville, Arkansas to
Theatre Squared, Inc. or any offset in favor of Theatre Squared, Inc. against City of Fayetteville,
Arkansas.
(11) No Offsets. In the event Theatre Squared, Inc. shall have any claim whatsoever
against City of Fayetteville, Arkansas, such claim may not be offset against the rental
considerations.
(12) Theatre Squared, Ine.'s Use. Theatre Squared, Inc. shall use and occupy the
Premises as a nonprofit performance arts theater for citizens of Fayetteville and surrounding area.
Theatre Squared, Inc. may provide or contract for related ancillary support services and educational
activities for Fayetteville citizens, school children and others. At all times Theatre Squared, Inc.
shall conduct its business and control its agents, employees, invitees, licensees, and all other persons
entering upon the Premises, or any part thereof, under the authority or by permission of Theatre
Squared, Inc., in such a manner as is lawful and reputable. Theatre Squared, Inc. shall not permit,
allow or otherwise suffer any operations to be conducted on the Premises that would cause the
suspension or cancellation of the fire and extended coverage insurance policies required under
Paragraph 5. Theatre Squared, Inc., in the use and occupancy of the Premises, and in the conduct of
its business thereon, shall at all times comply with all applicable plat or zoning restrictions, deed
restrictions, and all other laws, statutes, ordinances, or regulations applicable to the Premises, and
7
Theatre Squared, Inc. shall, at its sole cost and expense, secure and maintain all necessary licenses
and permits required for the conduct of its business upon the Premises.
(13) Abatement of Theatre Squared, Inc.'s Obligations. Theatre Squared, Inc.'s
obligations and duties pursuant to this Lease Agreement, including without limitation its obligations
under this Lease Agreement, shall not be abated, terminated or diminished during any period that
the Premises, or any part thereof, are untenantable, except as provided in Paragraphs 14, 18 or 19;
provided, however, that Theatre Squared, Inc. shall remain responsible to pay all amounts required
to be paid under this Lease Agreement and that became due and owing prior to the events identified
in Paragraphs 14, 18 or 19.
(14) Restoration of Improvements. In the event any or all improvements to the
Premises are either partially or entirely destroyed or damaged by any cause whatsoever, Theatre
Squared, Inc. shall notify City of Fayetteville, Arkansas of such loss or damage. Thereafter, Theatre
Squared, Inc. shall, at its sole cost, risk and expense, promptly commence and diligently complete,
or cause to be promptly commenced and diligently completed: (i) the removal of any debris on the
Premises, salvaging to the extent economically feasible any salvageable or reusable materials
remaining thereon, and Theatre Squared, Inc. shall promptly alleviate any dangerous conditions
existing on the Premises as a result of such damage or destruction; and (ii) the repair and restoration
of the Premises, so that upon the completion of such repairs and restoration, the Premises will (a) be
suitable for Theatre Squared, Inc.'s use, (b) have a commercial value at least as great as that before
such loss or destruction, and (c) retain, to the extent practicable, the same appearance and character.
If such loss, damage or destruction results from a casualty covered by one or more policies of
casualty insurance, the proceeds of such policies shall, to the extent necessary, be paid to Theatre
Squared, Inc, as reimbursement for its reasonable expenses incurred in the repair and restoration of
Is
the Premises; provided, however, prior to the payment to Theatre Squared, Inc. of the proceeds of
such insurance policies, Theatre Squared, Inc. shall deliver to City of Fayetteville, Arkansas
satisfactory evidence of the completion of such repairs and restoration, and the cost thereof, and the
reasonableness of all such costs. If the proceeds from such insurance policies are insufficient to
reimburse Theatre Squared, Inc. for its expenditures relating to the repair and restoration of the
Premises, Theatre Squared, Inc. alone shall bear all costs of such repairs and restoration which are
in excess of the proceeds of such insurance policies. In the event the proceeds of such insurance
policies are greater than the sums required to repair and restore the Premises, all such remaining
sums shall be the sole property of Theatre Squared, Inc.
(1 S) Waste - Liens. Theatre Squared, Inc. shall not allow or suffer: (i) any waste of the
Premises; or (ii) permit, by reason of any act of Theatre Squared, Inc. or failure by Theatre Squared,
Inc. to perform any act required herein, any liens or other encumbrances to attach to, or to exist
against, the Premises.
(16) Indemnification. Theatre Squared, Inc. shall indemnify, defend, save and hold
harmless City of Fayetteville, Arkansas from and against all liabilities, claims, losses, damages,
fines or causes of action (including without limitation all costs of court, investigation, or attorney's
fees incurred in connection with such causes of action or claims and any appellate litigation) due to
any death or personal injury to any person whomsoever or any property damage whatsoever arising
out of, from, or pertaining to:
(A) Theatre Squared, Inc.'s operations or the conduct of its business upon the
Premises, including without limitation any condition pertaining to the Premises
attributable thereto; and
(B) Any breach violation, or nonperformance of any term, covenant, or provision under
Q
this Lease Agreement by Theatre Squared, Inc., its employees, invitees, licensees
and agents.
If City of Fayetteville, Arkansas is made a party to any suit or legal action for damages
arising from the negligence or other actions of Theatre Squared, Inc., its employees, invitees,
licensees, or agents (including any of the causes enumerated above), City of Fayetteville, Arkansas
shall give notice to Theatre Squared, Inc. of such suit or legal action and Theatre Squared, Inc. shall
thereupon assume all burden, cost and expense incident to the defense, investigation, and settlement
of such cause of action or claim, including all costs of court, investigation and attorney's fees in
connection therewith, and Theatre Squared, Inc. shall promptly pay any judgment which may be
obtained in such suit or legal action against the City of Fayetteville, Arkansas. The City of
Fayetteville does not waive its statutory sovereign immunity nor does Theatre Squared, Inc.
waive any charitable immunity by any provision within this Lease Agreement.
(17) Assignment and Subletting. Subject to Section 39, Theatre Squared, Inc. may
not assign, sublet, mortgage or otherwise encumber its interest or estate in the Premises, or any
part thereof, or its rights pursuant to this Lease Agreement, without the prior written consent of
City of Fayetteville, Arkansas, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Lessee shall be permitted to allow use of the Premises by art -
related entities and resident companies. Temporary subletting of community meeting or
education space and subletting portions of its planned residential facilities to visiting
performance artists; playwrights; set, lighting, costume and similar designers; and directors
around the period of their performances, rehearsals for said performances or artistic work at the
Theatre Squared, Inc.'s theater are authorized without further Resolution of the City Council.
Any assignment or subletting by Theatre Squared, Inc. shall not act or release Theatre Squared,
10
Inc. from its obligations pursuant to this Lease Agreement.
(18) Total Condemnation of the Premises. If, during the term under this Lease
Agreement, all or a substantial part of the Premises are condemned by an entity having the power of
eminent domain, and if such condemnation will materially interfere with Theatre Squared, Inc.'s use
of the Premises so that the Premises cannot be made suitable for occupation by reasonable repairs or
restoration, or if the Premises are sold to such condemning authority or entity under the threat of
condemnation, then Theatre Squared, Inc. may terminate this Lease Agreement by giving notice
thereof to City of Fayetteville, Arkansas; thereafter, any award of damages in connection with such
condemnation proceedings, or the proceeds of any such sale made to such condemning authority,
shall be and remain the sole property of Theatre Squared, Inc. as to the value of any improvements
and the sole property of the City of Fayetteville, Arkansas with regard to the value of land or real
property taken.
(19) Partial Condemnation of the Premises. In the event less than a substantial portion
of the Premises is taken or condemned by an entity having the power of eminent domain, or sold to
such entity under the threat of condemnation, so that such condemnation or sale will not materially
interfere with Theatre Squared, Inc.'s use of the Premises, this Lease Agreement shall not terminate,
and Theatre Squared, Inc. shall, at its sole expense, cost and risk, promptly commence and
diligently complete, or cause to be promptly commenced and diligently completed, the repair and
restoration of the Premises, so that upon the completion of such repairs and restoration the Premises
will, to the extent practicable, be suitable for use by Theatre Squared, Inc. and retain the same basic
appearance, character and commercial value as immediately preceding such condemnation or sale.
(20) Holding Over. In the event Theatre Squared, Inc. shall hold over on the
Premises, or any part thereof, after the termination under this Lease Agreement or the expiration
of the Term or any extension, unless otherwise agreed in writing such holding over shall
constitute and be construed as a tenancy from year to year only.
(21) Inspection. City of Fayetteville, Arkansas, acting through its authorized agents
and representatives, shall have the right to enter upon the Premises at any and all reasonable
times for the purpose of inspecting the general state of repair and condition of the Premises, or
for any other reasonable purpose whatsoever, including, but not limited to, emergencies.
(22) Default. Any or all of the following shall constitute an event of default ("Event of
Default") pursuant to the terms under this Lease Agreement:
(A) Theatre Squared, Inc.'s failure for any reason whatsoever to comply with the
terms, covenants, conditions and agreements contained herein including its
Representations and Warranties of Paragraph 36 or to promptly discharge any and
all of its obligations and duties pursuant hereto, including without limitation
Theatre Squared, Inc.'s failure to pay any sum herein required or failure to
provide proof of payment of same;
(B) The filing of a petition in bankruptcy by or against Theatre Squared, Inc. pursuant
to any section or chapter of the Bankruptcy Code, as amended, or any other
similar law or statute of the United States of America or any state thereof, or
entering into any agreement, plan of reorganization or composition with creditors,
or any committee thereof,
(C) Theatre Squared, Inc.'s becoming insolvent or making a transfer or assignment
for the benefit of creditors;
(D) The appointment of a receiver or trustee for all, or a substantial part, of Theatre
Squared, Inc.'s assets; or
12
(E) The issuance of process for execution upon or the attachment of Theatre Squared,
Inc.'s property upon, or interest in, the Premises.
(23) Remedies. Upon the occurrence of any Event of Default, Theatre Squared, Inc.
waives all statutory rights of ejectment, and City of Fayetteville, Arkansas shall have the option
of pursuing any one or more of the following remedies upon written notice to Theatre Squared,
Inc. If such default is pursuant to a cause shown in (22) (A), Theatre Squared, Inc. shall be
notified by the City in writing pursuant to paragraph 35 and have three months from such notice
to respond and cure such default prior to its ejectment from the Premises:
(A) Terminate this Lease Agreement, in which event Theatre Squared, Inc. shall
promptly surrender the Premises to City of Fayetteville, Arkansas, and, if Theatre
Squared, Inc. fails to do so, City of Fayetteville, Arkansas may, without prejudice
to any other remedy which it may have for possession of the Premises or the
collection of any arrearages in rental payments, enter upon, and take possession
of, the Premises and expel or remove any agent, representative or employee of
Theatre Squared, Inc. or any other person who may be occupying the Premises, or
any part thereof, under the authority of Theatre Squared, Inc., without being liable
for prosecution of any claim for damages therefore; Theatre Squared, Inc. agrees
to pay to City of Fayetteville, Arkansas on demand the amount of all losses and
damages which City of Fayetteville, Arkansas may suffer by reason of such
termination, whether through an inability to relet the Premises on satisfactory
terms or otherwise;
(B) Enter upon or take possession of the Premises and expel or remove any agent,
representative or employee of Theatre Squared, Inc., or any other person
13
occupying the Premises, or any part thereof, under the authority of Theatre
Squared, Inc., without being liable for prosecution or any claim for damages
therefore; or
(C) Enter upon the Premises without being liable for prosecution or any claims for
damages therefore, and do and perform whatever acts Theatre Squared, Inc. is
obligated to do pursuant to the terms under this Lease Agreement. Theatre
Squared, Inc. shall reimburse City of Fayetteville, Arkansas on demand for any
expenses which City of Fayetteville, Arkansas may incur in thus affecting
compliance with Theatre Squared, Inc.'s obligations pursuant hereto, including,
without limitation, all court costs and attorney's fees.
(24) No Waiver. The waiver by the City of Fayetteville or Theatre Squared, Inc. of
any breach or violation of any provision under this Lease Agreement shall not act or be
construed as a waiver of any prior or subsequent breach hereof, nor shall the pursuit of any of the
foregoing remedies (as set forth in Paragraph 23) preclude the pursuit of any other remedies
provided herein or applicable law, nor shall the pursuit of any remedy provided herein or by
applicable law constitute a forfeiture or waiver of any payments or other sums payable to City of
Fayetteville, Arkansas pursuant hereto, or of any damages accruing to City of Fayetteville,
Arkansas by reason of Theatre Squared, Inc.'s violation of any of the terms, conditions, and
covenants contained herein.
(25) Quiet Enjoyment. City of Fayetteville, Arkansas warrants and represents to
Theatre Squared, Inc. that it has the right and power to execute and perform this Lease
Agreement and that Theatre Squared, Inc., upon the payment of rental and the performance of
the other covenants and terms contained herein, shall peaceably and quietly have, hold, and
14
enjoy the Premises during the full term under this Lease Agreement.
(26) Further Assurances. From time to time, and at all times, City of Fayetteville,
Arkansas and Theatre Squared, Inc. shall do all such further acts as may be reasonably required
to fully perform and carry out the terms and intent under this Lease Agreement.
(27) Entire Agreement. This Lease Agreement constitutes the sole and only
agreement between City of Fayetteville, Arkansas and Theatre Squared, Inc. concerning the
subject matter hereof and supersedes all prior agreements, arrangements or understandings, if
any, whether written or oral, relating to the subject matter hereof.
(28) Severability. In case any one or more of the provisions contained in this
agreement shall for any reason whatsoever be held invalid, illegal or otherwise unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Lease Agreement shall be construed as if such illegal, invalid or unenforceable
provision had never been contained as a part hereof.
(29) Applicable Law. This Lease Agreement shall be interpreted and construed, and
the respective rights of City of Fayetteville, Arkansas and Theatre Squared, Inc. governed,
according to the laws of the State of Arkansas. Nothing contained in this Lease Agreement shall
be deemed, construed or operate as a waiver of any immunities to suit available to the Theatre
Squared, Inc., the City or their respective trustees, officials, or employees.
(30) Venue. The venue of any suit, cause of action or other legal proceeding
pertaining to this Lease Agreement shall be in Washington County, Arkansas.
(31) Amendment. This Lease Agreement may only be amended by a writing
executed by both City of Fayetteville, Arkansas and Theatre Squared, Inc., and thereafter duly
delivered by each respectively to the other and incorporated by reference as a part hereof.
15
(32) Headings. The headings of the respective articles or paragraphs under this Lease
Agreement are for the purpose and convenience of reference only, and are not intended to be a
part of, or to affect the meaning and interpretation of, this Lease Agreement. The Recitals as the
beginning of the Lease Agreement are and shall be construed in harmony with all other
substantive provisions of this Lease Agreement.
(33) Recorded Memorandum. Concurrently with the execution and delivery under
this Lease Agreement, City of Fayetteville, Arkansas and Theatre Squared, Inc. shall execute,
deliver and promptly file for record in the deed records of Washington County, Arkansas, a
memorandum evidencing this Lease Agreement in substantially the same form as the attached
Exhibit "C", to which reference is made for all purposes.
(34) Binding Effect. This Lease Agreement is binding upon and shall inure to the
benefit of the City of Fayetteville, Arkansas and Theatre Squared, Inc. and their respective
successors in title and permitted assigns.
(35) Notices. All notices, information, offers, payments of rental, or other
communications herein required or permitted, shall be in writing and shall be properly given,
made or sent when delivered personally to the below identified representative of such parry
addressed in such writing, or when mailed by prepaid certified or registered mail, return receipt
requested, or by overnight delivery service, to such party at its respective address as follows:
If to City of Fayetteville, Arkansas:
Office of the Mayor
113 West Mountain St.
Fayetteville, AR 72701
If to Theatre Squared, Inc.:
Theatre Squared, Inc.
112 West Center Street, Ste. 440
16
Fayetteville, AR 72701
Attention: Executive Director
or to such other respective addresses either City of Fayetteville, Arkansas or Theatre Squared, Inc.
may hereafter designate and give notice thereof to the other.
(36) Representations and Warranties of Theatre Squared, Inc. Theatre Squared,
Inc. hereby covenants and warrants to City of Fayetteville, Arkansas that:
(A) Theatre Squared, Inc. is a not -for -profit corporation incorporated pursuant to the
laws of the State of Arkansas, has duly paid all applicable franchise taxes and
charter fees, and is duly authorized to do business in the State of Arkansas;
(B) The undersigned individual, acting as the duly authorized agent of Theatre
Squared, Inc., has full power and authority to execute this Lease Agreement as the
act and deed of Theatre Squared, Inc.; provided, however, Theatre Squared, Inc.'s
taking possession of the Premises, or any part thereof, shall be conclusively
deemed as Theatre Squared, Inc.'s ratification under this Lease Agreement; and
Theatre Squared, Inc. has fully and completely inspected the Premises, and as of
the effective date hereof the Premises are adequate and sufficient for the purposes
for which they are herein leased.
(C) At all times during the Term, Theatre Squared, Inc. shall operate, manage and
maintain the Premises at the corner of West Avenue and Spring Street in
Fayetteville, Arkansas competently and in a manner that is at least as highly
professional as the quality and quantity of Theatre Squared, Inc.'s performances
and activities which occurred in 2015. This performance requirement shall be
temporarily suspended for required repairs, remodeling or renovations.
(D) Theatre Squared, Inc. shall ensure that its sublessees and residential tenants shall
17
behave appropriately and legally, and not unreasonably disturb its neighbors.
(37) Execution. This Lease Agreement was executed by City of Fayetteville,
Arkansas and Theatre Squared, Inc. on the dates shown respectively on the acknowledgments of
each, but is effective for all purposes on the effective date as set forth above.
(38) Counterparts. This Lease Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and together shall constitute one and the same
instrument. Signatures transmitted electronically via PDF copy or via facsimile shall be binding
and make this Lease Agreement effective.
(39) Construction Financing. City acknowledges that Theatre Squared, Inc. intends
to obtain financing for the construction of the theatrical performance facility on the Premises. In
order to facilitate the approval of financing, and subject to City's reasonable approval of the
lender, City agrees that Theatre Squared, Inc., may mortgage its interest in this Lease to its
lender. The parties acknowledge and agree that City shall in no way be liable to pay any sums
due by Theatre Squared, Inc. to mortgagee nor shall City be obligated to perform the obligations
of Theatre Squared, Inc. under any such mortgage. In the event of a tenant default under the
lease per Paragraph 22, the mortgagor will give mortgagee, or its assignee or designee, the right
to assume the rights and obligations of Theatre Squared, Inc. The assignment of these rights and
obligations to a tenant or tenants satisfying the conditions of the Lease will be subject to
approval by the City as specified in Paragraph 17. The mortgagee, its assignee or designee, may
be permitted to hold the Premises without the commercial operation thereof for such period of
time as may be necessary to find such a substitute non-profit corporation capable of satisfying
the conditions set forth in Paragraph 36. City agrees to give the mortgagee notice of any default
by Theatre Squared, Inc. and a period of not less than thirty (30) days to cure any default on
18
ATTEST-.
q4w"�
City Clerk
Date:
r,
cC-) wFTTEVILLE;
'� • Ilk A tA' -."S
il,rlry HIM
Fit
Date: 2 S Wct 4 , 2016
CITY OF F.
THEATRE SQUARED, INC.
BY:
Title: —424� IM-ARJ
19
EXHIBIT "A"
DESCRIPTION OF PREMISES
LEGAL DESCRIPTION:
A PART OF BLOCK 9 IN THE ORIGINAL PLAT OF THE TOWN OF FAYETTEVILLE, AR
AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE NW CORNER OF BLOCK
9 THENCE S87027'31"E 155.00 FEET, THENCE S03°00'42"W 151.50 FEET, THENCE
S87027'3I"E 6.00 FEET, THENCE S03°00'42"W 92.13 FEET, THENCE N87°43'20"W 161.76
FEET, THENCE NO3°11'17"E 244.38 FEET TO THE P.O.B., CONTAINING 0.88 ACRES
MORE OR LESS SUBJECT TO EASEMENTS AND RIGHT OF WAY OF RECORD.
LESS AND EXCEPT: A FIFTEEN FOOT STRIP DESCRIBED AS BEGINNING AT THE
NORTHWEST CORNER OF BLOCK 9; THENCE NORTH 89 DEGREES 27 MINUTES 19
SECONDS EAST 15 FEET; THENCE SOUTH 0 DEGREES 06 MINUTES 07 SECONDS WEST
151.50 FEET; THENCE SOUTH 89 DEGREES 27 MINUTES 19 SECONDS WEST 15 FEET;
THENCE NORTH 0 DEGREES 06 MINUTES 07 SECONDS EAST 151.50 FEET TO THE
POINT OF BEGINNING.
NOTE: The City of Fayetteville is filing an eminent domain lawsuit and quiet title lawsuit
to acquire and confirm clear title to the portion of the above -described property that is
excepted from the entire property. Once fee simple title is vested and confirmed in the City
of Fayetteville, the Description of Premises will include the excepted property.
Exhibit A
EXHIBIT "B"
PLAN OF DEVELOPMENT — THEATRE SQUARED, INC.'S DEVELOPMENT PROPOSAL
The Development Proposal includes an approximately 50,000 square -foot professional theatre
building to be located at the Southeast corner of West Ave. & Spring St. in Downtown Fayetteville.
The project is intended to become the new home for TheatreSquared (T2), currently the only
professional theatre offering a year-round season within a 150-mile radius of Fayetteville and
winner of the American Theatre Wing's National Theatre Company Award. The theatre building
will provide intimate performance and rehearsal spaces as well as design workshops, staff offices,
education space, and public spaces to serve T2's audience. A separate residential building will
provide housing for TheatreSquared's visiting artists from across the country, who currently stay
during rehearsal and performances in lodging donated by Fayetteville community members.
The project is in design development under the auspices of the Walton Family Foundation's
Northwest Arkansas Design Excellence program. Through this initiative, a team led by London -
based theatre designers Charcoalblue and international design award winners Marvel Architects
have been selected and are gathering input through community sessions as well as workshops with
staff and artists to develop a site an(l building design. PI.ITIS Neill be released to the public and be
submitted to the C ity's revicNv process in fall 2016. The project will conform to all architectural
standards in the city`s Downtown ]Master flan and provide a walkable link between two of the "four
corners" in the Downtown Entertainment Overlay District.
This large-scale cultural construction project will have a considerable impact on Fayetteville's local
economy, generating nearly $40 million in direct and indirect spending during construction and
nearly doubling TheatreSquared's ongoing economic impact to more than $4 million annually after
the building is completed.
TheatreSquared's facility vision statement, as drafted by a committee of community members in
March 2015, reads in part:
"We see TheatreSquared as its own center, a destination and a place of origin. The
work created here will draw audiences from near and far and be our region's export
to the world's theatre centers ---Chicago, New York and London. We see a gathering
placea theatre commons —that is welcoming and fascinating, alive with activity.
A building that draws the eye and evokes curiosity. A place that invites, hints at the
unusual, and suggests something significant will happen here.
"Here in our community, we see a permanent home for remarkable theatre, done
well and with passion. We see a premier national theatre in Northwest Arkansas."
Exhibit B
EXHIBIT "C"
MEMORANDUM EVIDENCING THE LEASE AGREEMENT
STATE OF ARKANSAS )
)ss
COUNTY OF WASHINGTON )
THIS MEMORANDUM is executed to evidence the terms contained in a written instrument
executed,5 r►.t. _ 2016, and effective as provided therein, styled "Lease Agreement",
by the City of Fayetteville, Arkansas (collectively, "City of Fayetteville, Arkansas") has leased the
herein described real property to Theatre Squared, Inc. Council, Inc. ("Theatre Squared, Inc."), a non-
profit corporation, with its principal place of business in Fayetteville, Arkansas. Such Lease
Agreement pertains to the following described tract of real property, to wit:
LEGAL DESCRIPTION:
A PART OF BLOCK 9 IN THE ORIGINAL PLAT OF THE TOWN OF FAYETTEVILLE, AR
AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE NW CORNER OF BLOCK
9 THENCE S87027'31"E 155.00 FEET, THENCE S03°00'42"W 151.50 FEET, THENCE
S87027'3I"E 6.00 FEET, THENCE S03°00'42"W 92.13 FEET, THENCEN87°43'20"W 161.76
FEET, THENCE NO3°11'17"E 244.38 FEET TO THE P.O.B., CONTAINING 0.88 ACRES
MORE OR LESS SUBJECT TO EASEMENTS AND RIGHT OF WAY OF RECORD.
LESS AND EXCEPT: A FIFTEEN FOOT STRIP DESCRIBED AS BEGINNING AT THE
NORTHWEST CORNER OF BLOCK 9; THENCE NORTH 89 DEGREES 27 MINUTES 19
SECONDS EAST 15 FEET; THENCE SOUTH 0 DEGREES 06 MINUTES 07 SECONDS WEST
151.50 FEET; THENCE SOUTH 89 DEGREES 27 MINUTES 19 SECONDS WEST 15 FEET;
THENCE NORTH 0 DEGREES 06 MINUTES 07 SECONDS EAST 151.50 FEET TO THE
POINT OF BEGINNING.
NOTE: The City of Fayetteville is filing an eminent domain lawsuit and quiet title lawsuit
to acquire and confirm clear title to the portion of the above -described property that is
excepted from the entire property. Once fee simple title is vested and confirmed in the City
of Fayetteville, the Description of Premises will include the excepted property.
This memorandum evidencing the Lease Agreement shall be filed for record in the deed
records of Washington County, Arkansas.
EXECUTED AND EFFECTIVE this day of,-3ane , 2016.
Exhibit C
r'%loolIIf 11111I
G\ p
FAYI=TTEVILLE,
ATTEST:
lop
' G.
City Clerk
Date: & —G 9 , 2016
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)ss:
COUNTY OF WASHINGTON )
On this theq44" day of , 2016, before me, the undersigned, a Notary Public, duly
commissioned, r�qne—U
alified an acting within and for said County and State, appeared in person the
within -named TQfkan and n,d �a &,Sm to me persona9ly well
known, who stated they were the Mayor and City Clerk of the City of Fayetteville, Arkansas, a
municipality, and were duly authorized in their respective capacities to execute the foregoing
instrument for and in the name and behalf of said municipality, and further stated and acknowledged
that they had so signed, executed, and delivered said foregoing instrument for the consideration, uses
and purposes therein mentioned and set forth.
1N TESTIMONY WI-1EREOF, I have hereunto set my hand and official seal on this ay
of ��. � , 2016.
wa_.
of ry Public
My Commission Expires:
80 -��,
`
•
401► r
• P 00 .r.
►r�A2�r ���@S S i� r �k"'
Exhibit C
6
STATE OF ARKANSAS
COUNTY OF WASHINGTON
THEATRE SQUARED, INC.
BY:
Title:
ACKNOWLEDGMENT
)ss:
On this the 12--L-01 day of L. 2016, before one, the undersigned, a Notaiy Public,
duly commissioned. qualified and a i.ng within and for as id Coun
mty
and State, appeared in person the
within-naed � n 0 �coy r and {��� to me personally well
known, who stated they were the Chairman and Treasurer of Theatre Squared, Inc., a non-profit
corporation, and were duly authorized in their respective capacities to execute the foregoing
instrument for and in the name and behalf of said non-profit corporation, and further stated and
acknowledged that they had so signed, executed, and delivered said foregoing instrument for the
consideration, uses and purposes therein mentioned and set forth.
N TESTIMONY WHEREOF, l have hereunto set my hand Bind official seal 011 this day
of,
My Commission Expires:
,_ 1. `
Publi
JENNIFER L VINSON
MY COMMISSION N 12402544
EWRES: January 17. 2025
WashirgtM Ccunl
Exhibit C
DEPARTMENTAL CORRESPONDENCE
OFFICE. OF THE
CITY ATTORNEY
TO: Mayor Jordan
City Council
CC: Don Marr, Chief of Staff
Paul Becker, Finance Director
Jerem Pate Develo ment Services D'ir t
y p ec or
Xj,
FROM: Kit Williams, City Attorney
DATE: May 24, 2016
RE: Proposed Lease Agreement with Theatre Squared, Inc.
Kit `'�Jitlianis
City Attorney
Blake Pennington
,Assistant City Attorney
Patti Mutford
Paralegal
In early January of this year, I submitted a draft Lease Agreement to
Theatre Squared, Inc.'s attorney after its tentative approval by Mayor Jordan.
Attached is my January 8, 2016 memo to Mayor Jordan, Chief of Staff Marr and
Finance Director Becker about this draft lease. The most important paragraphs
to review remain as identified in that memo.
A couple of months later, Theater Squared, Inc.'s attorney responded and
suggested several changes to the lease. Please see my attached memo of March
24, 2016 outlining the incorporation of the proposed changes that met with
Mayor Jordan's approval. We then furnished what we thought was the "Final
Draft" of the lease to their attorney on March 30, 2016. We were surprised when
Theatre Squared, Inc. sent us another draft Lease Agreement in April with more
proposed changes.
Again 1 incorporated the proposed changes that Mayor Jordan had agreed
to and asked Paul to return it to Theatre Squared, Inc.'s Executive Director. After
Paul did so, Theatre Squared, Inc.'s attorney asked for a word version copy
which my office supplied on May 16, 2016.at 8:36 a.m.
On May 191h at 3:53 p.m., their attorney supplied my office with a revised
Lease Agreement which is the version Mayor Jordan has authorized to be
furnished to the City Council for its review, consideration, approval or rejection,
or to be changed by the City Council to meet its approval (copy of email
attached). The version presented by the Theatre Squared, Inc.'s attorney is in
your packet as its final proposed lease.
POTENTIAL ISSUES
Potential issues for City Council's determination include the building
plans and provisions within the lease to allow use of a "residential facility" for
visiting artists and playwrights. This residential facility is to be constructed as
part of this theater project. Theatre Squared, Inc. also desires inclusion of a
"restaurant" that can sell alcohol and a "retail or gift shop" as part of its project.
CONCLUSION
The City Council has the authority to approve as presented, to reject and
deny the lease, or to withhold approval unless changes or amendments are
agreed to by Theater Squared, Inc. The Mayor can only sign such Lease
Agreement if the City Council passes an approving Resolution.
jUA
OFFICE OFTHE
CITY ATTORNEY
DEPARTMENTAL CORRESPONDENCE
TO: Mayor Jordan
Don Marr, Chief of Staff
Paul Becker, Finance Director 1
FROM: Kit Williams, City Attorney
DATE: January 8, 2016
RE: Draft Lease Agreement with Theatre Squared, Inc.
Kit Williams
City Attorney
Blake Pennington
Assistant City Attorney
Patti Mulford
Paralegal
I used the recently negotiated Lease Agreement with the Walton Arts Center as
my model for this new proposed Lease. That Lease Agreement was originally drafted
by the Walton Arts Center attorney and is probably more complex and detailed than is
really necessary. However, since both the Walton Arts Center attorney and the U of A
attorney approved that Lease, I used many of the same provisions in this new Lease
Agreement with Theatre Squared, Inc. I have attached the draft Lease Agreement.
Pursuant to Theatre Squared, Inc.'s request the lease terms are for 25 years each
with automatic renewals for three additional terms or a total of 100 years. This is longer
than the Walton Arts Center lease which is an initial term of 25 years and two (rather
than three) subsequent almost automatic renewals (for a total of 75 years). Please let me
know if this is okay.
Important Paragraphs To Review
(3) Rental
(4) Theatre Squared, Inc.'s Development and Construction of its theatrical
performance facilities and ancillary facilities
(12) Theatre Squared, Inc.'s Use
(17) Assigrunent and Subletting
(22) Default
(23) Remedies
(36) Representations and Warranties of Theatre Squared, Inc.
Please let me know if we need to make any changes to those paragraphs or
anywhere else in the Lease Agreement.
DEPARTMENTAL CORRESPONDENCE
OFFICE OF THE
CITY ATTORNEY
Kit Williams
City Attorney
Mayor JordanBlake Pennington
TO: Ma y J Assistant City Attorney
Don Marr, Chief of Staff Patti Mulford
Jeremy Pate, Development Services Director Paralegal
�r-
FROM: Kit Williams, City Attorney
DATE: March 2412016
RE: Proposed revisions to Theatre Squared, Inc.'s Lease
Pursuant to Theatre Squared, Inc.'s requests, I have revised portions of
page 4, 10, and 17 of the Lease (attached). At this point, I have left in the fourth
25 year term which makes this virtually a 100 year lease even though this causes
me some legal concerns.
On page 4, I took out (without their request) some unneeded and
repetitious language in paragraph (3). They sought major changes in paragraph
(4) which I could not recommend. I did, however, remove "at its own expense"
since Theatre Squared, Inc. may receive some public financing, but inserted a
requirement "that it will fundraise" to make clear it is Theatre Squared, Inc.'s
burden to obtain the finances to build its project.
Rather than agreeing to their requested very broad (in type and number)
of "customer convenience facilities", I expanded their authority from "a coffee
shop" to "a restaurant or coffee shop" to prevent them from constructing spaces
for several bars and restaurants that could compete with the private
Entertainment District businesses that an expanded Theatre Squared is supposed
to help. I did the same by refusing to allow "facilities such as retail", but allowed
"a retail or gift shop". This allows Theatre Squared, Inc. to choose one retail
facility, but not install several.
I also authorized their planned "residential facility", but limited it to
"visiting performance artists or directors" so it cannot be just rooms or
apartments for rent for any guest or tenant in competition with local private
hotels or apartment buildings. Basically, I tried to give them the authority that
they told us they wanted, but not such broad authority to do much more than
they told us they wanted to do which could place local private businesses in an
unfair competitive position.
On page 10, paragraph (17) Assignment and Subletting, I continued with
our authorization for them to sublet their "planned residential facilities to
visiting performance artists and directors around the period of their
performances at the Theatre Squared, Inc.'s theater (not the Walton Arts Center's
Performance Hall)... without further Resolution of the City Council." They are
also similarly authorized for "Temporary Subletting of community meeting or
educational spaces...."
Despite their request, I have maintained that subleases for the coffee
shop/restaurant and the gift shop/retail store must be approved by the City
Council. These leases would likely be much longer and potentially much more
impactful on local businesses and so deserve City Council review and approval.
Finally, I made some changes to paragraph (36) Representation and
Warranties of Theatre Squared, Inc. in subsection (C). I refused to remove the
most important consideration to support this Lease Agreement which is their
commitment to operate their new theater "in a manner that is at least as highly
professional as the quality and quantity of (its) performances and activities
which occurred in 2015." I did acknowledge that this "performance requirement
shall be temporarily suspended for required repairs, remodeling or renovations."
This provision is really unnecessary because necessary repairs would always be a
reasonable excuse for not being able to put on performances and would be
legally implied in the Lease Agreement.
I also added (D) to ensure Theatre Squared, Inc. knows it must control its
sublessees (restaurants which can serve alcohol) and tenants in its residential
unit so they behave legally and do not unreasonably disturb neighbors.
I simply rejected all the other unnecessary or unreasonable changes
proposed by Theater Squared, Inc. After your review and approval (or your
suggested changes have been included), I will submit these proposed revisions to
their attorney.
Williams, Kit
From: Cliff McKinney <cmckinney@ggtlaw.com>
Sent: Thursday, May 19, 2016 3:53 PM
To: Mulford, Patti; Williams, Kit
Subject: RE: Theatre Squared proposed lease
Attachments: Theatre Squared Lease 06 redline City's 5-16-16.doc; Theatre Squared Lease 06.doc
Please find attached my comments to the city's latest draft. Of course, these revisions are subject to my client's
review. Here are the highlights of the revisions:
1. The word "playwright" has been added to Section 4 and Section 17.
2. In Section 17, we added language from the Walton Arts Center lease to allow the Premises to be used by art -
related entities and resident companies.
3. We added a new Section 39. This language was added at the request of one of the prospective lenders. We
need this concept in order to get banks comfortable enough to provide the financing Theatre Squared will need
to construct the facility.
I have a meeting first thing in the morning, but I am available the rest of the day to discuss these changes. I am also
available this afternoon or evening-1 will be working late today. I understand that we are trying to meet a deadline of
tomorrow so that we can be on the next city council agenda.
Cliff
From: Mulford, Patti [mailto:pmulford@fayetteville-ar.gov]
Sent: Monday, May 16, 2016 8:36 AM
To: Cliff McKinney <cmckinney@ggtlaw.com>; Williams, Kit <kwilliams@fayetteville-ar.gov>
Subject: RE: Theatre Squared proposed lease
Final revised lease attached. Thanks.
Patti
From: Cliff McKinney [mailto:cmckinnev@gstlaw.com]
Sent: Friday, May 13, 2016 6:04 PM
To: Mulford, Patti <pmulford@fayetteville-ar.gov>; Williams, Kit <Icwilliams@fayetteville-ar.gov>
Subject: RE: Theatre Squared proposed lease
Kit —I am sorry I missed your call today. However, I was forwarded a memo today dated April 26 that contains a revised
draft of the lease. The revised draft is in PDF. Can you please send me the Word version so I can review that? It is much
easier for me to do so than reviewing a PDF.
From: Cliff McKinney
Sent: Monday, April 04, 2016 1:59 PM
To: 'Mulford, Patti' <pmulford@fayetteville-ar.gov>
Cc:'Williams, Kit' <Icwilliams@fayetteville-ar.gov>
Subject: RE: Theatre Squared proposed lease
I wanted to follow-up on this. Do you have the revised lease in Word format?
LEASE AGREEMENT
I: J1111:9��1►1
THE CITY OF FAYETTEVILLE, ARKANSAS
and
THEATRE SQUARED, INC.
Table of Contents
Page
1.
Premises and Improvements Leased.............................................................................1
2.
Term..............................................................................................................................1
3.
Rental............................................................................................................................4
4.
Theatre Squared, Inc.'s Development and Construction of its theatrical
performance facilities and ancillary facilities...............................................................4
5.
Taxes.............................................................................................................................4
6.
Insurance.......................................................................................................................5
7.
Waiver of Subrogation Rights......................................................................................6
8.
Maintenance by Theatre Squared, Inc............................................................................6
9.
Utilities..........................................................................................................................6
10.
Surrender of Premises....................................................................................................6
11.
No Offsets......................................................................................................................7
12.
Theatre Squared, Inc.'s Use...........................................................................................7
13.
Abatement of Theatre Squared, Inc.'s Obligations .......................................................7
14.
Restoration of Improvements.........................................................................................8
15.
Waste - Liens.................................................................................................................9
16.
Indemnification..............................................................................................................9
17.
Assignment and Subletting.........................................................................................10
18.
Total Condemnation of the Premises............................................................................10
19.
Partial Condemnation of the Premises..........................................................................11
20.
Holding Over..............................................................................................................11
21.
Inspection....................................................................................................................11
22.
Default.........................................................................................................................12
23.
Remedies.....................................................................................................................12
24.
No Waiver...................................................................................................................14
25.
Quiet Enjoyment.........................................................................................................14
26.
Further Assurances......................................................................................................14
27.
Entire Agreement........................................................................................................14
28.
Severability.................................................................................................................15
29.
Applicable Law...........................................................................................................15
30.
Venue..........................................................................................................................15
31.
Amendment.................................................................................................................15
32.
Headings.....................................................................................................................15
33.
Recorded Memorandum..............................................................................................15
34.
BindingEffect ffect.............................................................................................................16
35.
Notices........................................................................................................................16
36.
Representations and Warranties of Theatre Squared, Inc...........................................16
37.
Execution....................................................................................................................17
38.
Counterparts................................................................................................................17
39.
Construction Financing...............................................................................................18
Table of Contents
(continued)
Exhibit A Description of Real Property
Exhibit B Plan of Development
Exhibit C Memorandum of Lease
LEASE AGREEMENT
This Lease Agreement from the City of Fayetteville, Arkansas to Theatre Squared, Inc. is
effective upon the approval by the Fayetteville City Council by Resolution and signature of Mayor
Lioneld Jordan and the approval of the Board of Directors of Theatre Squared, Inc. and authorized
signature of its Chairperson.
RECITALS:
The term of the lease does not begin to run nor is possession of the City's parking lot upon
which Theatre Squared, Inc.'s project is to be built transferred to Theatre Squared, Inc. until its Large
Scale Development (or similar development proposal) has been approved by the Fayetteville Planning
Commission or Fayetteville City Council and Theatre Squared, Inc. certifies to the City of Fayetteville
that it has the finances in hand or properly pledged to the City's satisfaction to construct a substantial
(majority) portion of its project. The City of Fayetteville acknowledges that Theatre Squared may be
required to complete its project in phases or stages over several years.
In consideration of the terms and conditions contained herein, the sufficiency of which
is acknowledged by the City of Fayetteville, Arkansas and Theatre Squared, Inc., the parties
agree as follows:
(1) Premises and Improvements Leased. Subject to the terms and conditions set
forth in this Lease Agreement, the City of Fayetteville, Arkansas leases and lets the Premises
located at the corner of West Avenue and Spring Street in Fayetteville as more particularly
described in Exhibit "A" unto Theatre Squared, Inc. who hereby accepts the Premises as is.
(2) Term.
(A) Initial Term. Unless sooner terminated as set forth below, the term of this Lease
Agreement shall be twenty-five (25) years, commencing after the date City of
Fayetteville, Arkansas and Theatre Squared, Inc. execute this Lease Agreement and
when Theatre Squared, Inc. obtains approval of its Large Scale Development or
similar development proposal from the Planning Commission or City Council and
certifies to the City of Fayetteville that Theatre Squared, Inc. has the finances in hand
to construct a substantial (majority) portion of its project. This date shall be denoted
the "Lease Commencement Date" and shall continue through the last day of the
month at 5:00 PM CST in which the twenty-fifth (25th) anniversary of the Lease
Commencement Date occurs.
(B) Second Term. At the end of the original Term, Theatre Squared, Inc. shall have the
option to extend the Term of this Lease Agreement for a second period of twenty-five
(25) years subject to the terms and conditions herein set forth, provided Theatre
Squared, Inc. has continued to abide by all of its promises, commitments,
representations and warranties of this Lease Agreement and is not otherwise in
default. Theatre Squared, Inc. may execute its option to extend the Term by providing
written notice to the City of Fayetteville, Arkansas at least six (6) months prior to the
expiration of the original Term. After receipt of Theatre Squared, Inc.'s written notice
to extend its rental term, the City shall within one month notify Theatre Squared, Inc.
in writing if the City believes that Theatre Squared, Inc. has failed to abide by any of
its promises, commitments, representations or warranties or otherwise is in default of
this Lease Agreement. Theatre Squared, Inc. shall have at least 5 months thereafter
to cure any such alleged default or failure.
(C) Third Term. At the end of the second Term, Theatre Squared, Inc. shall have the
option to extend the Term of this Lease Agreement for a third period of twenty-five
(25) years subject to the terms and conditions herein set forth, provided Theatre
Squared, Inc. has continued to abide by all of its promises, commitments,
representations and warranties of this Lease Agreement and is not otherwise in
default. Theatre Squared, Inc. may execute its option to extend the Term by providing
written notice to the City of Fayetteville, Arkansas at least six (6) months prior to the
expiration of the second Term. After receipt of Theatre Squared, Inc.'s written notice
to extend its rental term, the City shall within one month notify Theatre Squared, Inc.
in writing if the City believes that Theatre Squared, Inc. has failed to abide by any of
its promises, commitments, representations or warranties or otherwise is in default of
this Lease Agreement. Theatre Squared, Inc. shall have at least 5 months thereafter
to cure any such alleged default or failure.
(D) Fourth Term. At the end of the third Term, Theatre Squared, Inc. shall have the option
to extend the Term of this Lease Agreement for a fourth period of twenty-five (25)
years subject to the terms and conditions herein set forth, provided Theatre Squared,
Inc. has continued to abide by all of its promises, commitments, representations and
warranties of this Lease Agreement and is not otherwise in default. Theatre Squared,
Inc. may execute its option to extend the Term by providing written notice to the City
of Fayetteville, Arkansas at least six (6) months prior to the expiration of the third
Term. After receipt of Theatre Squared, Inc.'s written notice to extend its rental term,
the City shall within one month notify Theatre Squared, Inc. in writing if the City
believes that Theatre Squared, Inc. has failed to abide by any of its promises,
commitments, representations or warranties or otherwise is in default of this Lease
Agreement. Theatre Squared, Inc. shall have at least 5 months thereafter to cure any
such alleged default or failure.
(3) Rental. As primary rental for the Premises Theatre Squared, Inc. agrees to faithfully
perform all of the Representations and Warranties of Theatre Squared, Inc. contained in Paragraph 36
ofthis Lease Agreement. As additional rental, Theatre Squared, Inc. shall pay in full on a timely basis
all costs, expenses, fees, and assessments owed in connection with any Theatre Squared, Inc.'s
development and construction upon the site.
(4) Theatre Squared, Inc.'s Develol)ITIc111 indl Construction of its theatrical
performance facilities and ancillary facilities. As a primary consideration to support this Lease
Agreement, Theatre Squared, Inc. agrees that it will fund raise and construct a major theatrical
performance facility on the Premises. Ancillary facilities including offices, parking and loading
areas and customer convenience facilities such as: a restaurant or coffee shop, a retail or gift shop,
a residential facility for visiting performance artists, directors, playwrights, set, lighting, costume
and similar designers, and community meeting and educational areas, etc. may also be constructed
in harmony with the principal theater on the Premises.
(5) Taxes. As additional rental, Theatre Squared, Inc. shall pay, before they become
delinquent, all ad valorem taxes, if any, and special or general assessments, if any, lawfully levied or
assessed against the Premises, or which may become a lien against the Premises, or which become
due and payable during the term hereof. Upon giving notice to City of Fayetteville, Arkansas, Theatre
Squared, Inc. may, in good faith and in the manner provided by law, contest any such tax or
assessment against the Premises; provided, all costs and expenses incident to contesting such taxes or
assessments shall be paid by Theatre Squared, Inc., and Theatre Squared, Inc. shall: (i) if necessary
to prevent any sale of the Premises or any loss or damage to City of Fayetteville, Arkansas, pay such
tax or assessment under protest; (ii) in the event of an adjudication adverse to Theatre Squared, Inc.,
promptly pay such tax or assessment; (iii) indemnify and hold City of Fayetteville, Arkansas harmless
4
against any losses or damages arising from such contest; (iv) take all such other actions as may be
reasonably necessary to prevent any such sale or loss; and (v) before such taxes or assessments
become delinquent, deliver to City of Fayetteville, Arkansas proof of Theatre Squared, Inc.'s timely
and full payment of all such taxes and assessments. The duty of indemnification shall survive the
expiration or termination of this Agreement. Additionally, nothing contained in this provision shall
be a waiver of City of Fayetteville, Arkansas's right, at City of Fayetteville, Arkansas's cost, to
challenge the imposition of any type or kind of taxes on the Premises.
(6) Insurance. Nothing contained herein shall obligate or otherwise require City of
Fayetteville, Arkansas to procure or maintain any insurance pertaining to the Premises. Theatre
Squared, Inc. will constantly at its sole cost and expense keep the Premises insured under special form
policies of fire and extended coverage for its full insurable value, with vandalism, sprinkler leakage,
and malicious mischief insurance, and such other reasonable additional coverages as may from time
to time be designated by City of Fayetteville, Arkansas, including, without limitation, all-risk
coverage, boiler and machinery insurance, flood insurance and earthquake insurance added as
endorsements to said insurance policy. This insurance must be maintained with a reliable insurance
company or companies licensed to do business in the state of Arkansas. These policies shall also
include a replacement cost coverage endorsement and must meet all coinsurance requirements of the
insurer, in an amount affording coverage of not less than eighty percent (80%) of the full insurable
value of the Premises. Such policy or policies shall provide that coverage is noncancelable without
thirty (30) days prior written notice to City of Fayetteville, Arkansas.
Theatre Squared, Inc. further agrees to carry and maintain commercial general liability
insurance written as primary coverage with a reliable insurance company licensed to do business
in the state of Arkansas, and acceptable to City of Fayetteville, Arkansas, covering occurrences
that may arise on the Premises as a result of the operations thereon, in amounts not less than
$1,000,000 per occurrence for bodily injury and $1,000,000 per occurrence for property damage
and $3,000,000 per occurrence of combined bodily injury and property damage. All policies
required by this provision shall be jointly payable to the Theatre Squared, Inc. and the City.
(7) Waiver of Subrogation Rights. City of Fayetteville, Arkansas and Theatre
Squared, Inc. each hereby waive their respective rights of subrogation against the other for any
and all claims and causes of action whatsoever arising out of any injury upon, or loss or damage
to, the Premises, or any part thereof, resulting from any risk or peril insured against by any of the
insurance policies herein required or purchased by the Theatre Squared, Inc. City of Fayetteville,
Arkansas and Theatre Squared, Inc. shall each promptly notify their respective insurers of such
waiver of subrogation rights.
(8) Maintenance by Theatre Squared, Inc. Theatre Squared, Inc. shall, at its sole cost,
risk and expense: (i) maintain the Premises in good condition and repair, excepting therefrom only
normal, reasonable wear and use; (ii) keep the Premises in a clean, safe and sanitary condition; (iii)
make, or cause to be made, all necessary repairs, whether interior, exterior or structural, on the
Premises; and (iv) provide for the reasonable care, landscaping and cleaning of the Premises.
(9) Utilities. Theatre Squared, Inc. shall, at its sole cost and expense, provide utilities for
the Premises, including without limitation all initial installation or connection fees or charges, and all
monthly fees, service charges or late charges for electricity, television, cable, telephones, water, gas,
sewer and garbage service, or any other expenses arising out of, or incident to Theatre Squared, Inc.'s
occupancy of the Premises.
(10) Surrender of Premises. At the termination under this Lease Agreement or the
expiration and non -renewal of a Term: (i) Theatre Squared, Inc. shall surrender and deliver to City of
6
Fayetteville, Arkansas the Premises in good repair and condition, excepting therefrom only damage
by fire, tornado or other casualty and normal, reasonable wear and use; and (ii) all improvements and
fixtures affixed to the Premises shall be and remain the sole property of City of Fayetteville, Arkansas
without any payment whatsoever by City of Fayetteville, Arkansas to Theatre Squared, Inc. or any
offset in favor of Theatre Squared, Inc. against City of Fayetteville, Arkansas.
(11) No Offsets. In the event Theatre Squared, Inc. shall have any claim whatsoever
against City of Fayetteville, Arkansas, such claim may not be offset against the rental considerations.
(12) Theatre Squared, Inc.'s Use. Theatre Squared, Inc. shall use and occupy the
Premises as a nonprofit performance arts theater for citizens of Fayetteville and surrounding area.
Theatre Squared, Inc. may provide or contract for related ancillary support services and educational
activities for Fayetteville citizens, school children and others. At all times Theatre Squared, Inc. shall
conduct its business and control its agents, employees, invitees, licensees, and all other persons
entering upon the Premises, or any part thereof, under the authority or by permission of Theatre
Squared, Inc., in such a manner as is lawful and reputable. Theatre Squared, Inc. shall not permit,
allow or otherwise suffer any operations to be conducted on the Premises that would cause the
suspension or cancellation of the fire and extended coverage insurance policies required under
Paragraph 5. Theatre Squared, Inc., in the use and occupancy of the Premises, and in the conduct of
its business thereon, shall at all times comply with all applicable plat or zoning restrictions, deed
restrictions, and all other laws, statutes, ordinances, or regulations applicable to the Premises, and
Theatre Squared, Inc. shall, at its sole cost and expense, secure and maintain all necessary licenses
and permits required for the conduct of its business upon the Premises.
(13) Abatement of Theatre Squared, Inc.'s Oblil4ations. Theatre Squared, Inc.'s
obligations and duties pursuant to this Lease Agreement, including without limitation its obligations
7
under this Lease Agreement, shall not be abated, terminated or diminished during any period that the
Premises, or any part thereof, are untenantable, except as provided in Paragraphs 14, 18 or 19;
provided, however, that Theatre Squared, Inc. shall remain responsible to pay all amounts required to
be paid under this Lease Agreement and that became due and owing prior to the events identified in
Paragraphs 14, 18 or 19.
(14) Restoration of Improvements. In the event any or all improvements to the Premises
are either partially or entirely destroyed or damaged by any cause whatsoever, Theatre Squared, Inc.
shall notify City of Fayetteville, Arkansas of such loss or damage. Thereafter, Theatre Squared, Inc.
shall, at its sole cost, risk and expense, promptly commence and diligently complete, or cause to be
promptly commenced and diligently completed: (i) the removal of any debris on the Premises,
salvaging to the extent economically feasible any salvageable or reusable materials remaining
thereon, and Theatre Squared, Inc. shall promptly alleviate any dangerous conditions existing on the
Premises as a result of such damage or destruction; and (ii) the repair and restoration of the Premises,
so that upon the completion of such repairs and restoration, the Premises will (a) be suitable for
Theatre Squared, Inc.'s use, (b) have a commercial value at least as great as that before such loss or
destruction, and (c) retain, to the extent practicable, the same appearance and character. If such loss,
damage or destruction results from a casualty covered by one or more policies of casualty insurance,
the proceeds of such policies shall, to the extent necessary, be paid to Theatre Squared, Inc. as
reimbursement for its reasonable expenses incurred in the repair and restoration of the Premises;
provided, however, prior to the payment to Theatre Squared, Inc. of the proceeds of such insurance
policies, Theatre Squared, Inc. shall deliver to City of Fayetteville, Arkansas satisfactory evidence of
the completion of such repairs and restoration, and the cost thereof, and the reasonableness of all such
costs. If the proceeds from such insurance policies are insufficient to reimburse Theatre Squared, Inc.
8
for its expenditures relating to the repair and restoration of the Premises, Theatre Squared, Inc. alone
shall bear all costs of such repairs and restoration which are in excess of the proceeds of such insurance
policies. In the event the proceeds of such insurance policies are greater than the sums required to
repair and restore the Premises, all such remaining sums shall be the sole property of Theatre Squared,
Inc.
(15) Waste - Liens. Theatre Squared, Inc. shall not allow or suffer: (i) any waste of the
Premises; or (ii) permit, by reason of any act of Theatre Squared, Inc. or failure by Theatre Squared,
Inc. to perform any act required herein, any liens or other encumbrances to attach to, or to exist
against, the Premises.
(16) Indemnification. Theatre Squared, Inc. shall indemnify, defend, save and hold
harmless City of Fayetteville, Arkansas from and against all liabilities, claims, losses, damages, fines
or causes of action (including without limitation all costs of court, investigation, or attorney's fees
incurred in connection with such causes of action or claims and any appellate litigation) due to any
death or personal injury to any person whomsoever or any property damage whatsoever arising out
of, from, or pertaining to:
(A) Theatre Squared, Inc.'s operations or the conduct of its business upon the Premises,
including without limitation any condition pertaining to the Premises attributable
thereto; and
(B) Any breach violation, or nonperformance of any term, covenant, or provision under
this Lease Agreement by Theatre Squared, Inc., its employees, invitees, licensees and
agents.
If City of Fayetteville, Arkansas is made a party to any suit or legal action for damages arising
from the negligence or other actions of Theatre Squared, Inc., its employees, invitees, licensees, or
agents (including any of the causes enumerated above), City of Fayetteville, Arkansas shall give
notice to Theatre Squared, Inc. of such suit or legal action and Theatre Squared, Inc. shall thereupon
assume all burden, cost and expense incident to the defense, investigation, and settlement of such
cause of action or claim, including all costs of court, investigation and attorney's fees in connection
therewith, and Theatre Squared, Inc. shall promptly pay any judgment which may be obtained in such
suit or legal action against the City of Fayetteville, Arkansas. The City of Fayetteville does not
waive its statutory sovereign immunity nor does Theatre Squared, Inc. waive any charitable
immunity by any provision within this Lease Agreement.
(17) Assignment and Subletting. Subject to Section 39, Theatre Squared, Inc. may not
assign, sublet, mortgage or otherwise encumber its interest or estate in the Premises, or any part
thereof, or its rights pursuant to this Lease Agreement, without the prior written consent of City of
Fayetteville, Arkansas, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, Lessee shall be permitted to allow use of the Premises by art -related entities and resident
companies. Temporary subletting of community meeting or education space and subletting
portions of its planned residential facilities to visiting performance artists; playwrights; set,
lighting, costume and similar designers; and directors around the period of their performances,
rehearsals for said performances or artistic work at the Theatre Squared, Inc.'s theater are
authorized without further Resolution of the City Council. Any assignment or subletting by
Theatre Squared, Inc. shall not act or release Theatre Squared, Inc. from its obligations pursuant
to this Lease Agreement.
(18) Total Condemnation of the Premises. If, during the term under this Lease
Agreement, all or a substantial part of the Premises are condemned by an entity having the power of
eminent domain, and if such condemnation will materially interfere with Theatre Squared, Inc.'s use
10
of the Premises so that the Premises cannot be made suitable for occupation by reasonable repairs or
restoration, or if the Premises are sold to such condemning authority or entity under the threat of
condemnation, then Theatre Squared, Inc. may terminate this Lease Agreement by giving notice
thereof to City of Fayetteville, Arkansas; thereafter, any award of damages in connection with such
condemnation proceedings, or the proceeds of any such sale made to such condemning authority,
shall be and remain the sole property of Theatre Squared, Inc. as to the value of any improvements
and the sole property of the City of Fayetteville, Arkansas with regard to the value of land or real
property taken.
(19) Partial Condemnation of the Premises. In the event less than a substantial portion
of the Premises is taken or condemned by an entity having the power of eminent domain, or sold to
such entity under the threat of condemnation, so that such condemnation or sale will not materially
interfere with Theatre Squared, Inc.'s use of the Premises, this Lease Agreement shall not terminate,
and Theatre Squared, Inc. shall, at its sole expense, cost and risk, promptly commence and diligently
complete, or cause to be promptly commenced and diligently completed, the repair and restoration of
the Premises, so that upon the completion of such repairs and restoration the Premises will, to the
extent practicable, be suitable for use by Theatre Squared, Inc. and retain the same basic appearance,
character and commercial value as immediately preceding such condemnation or sale.
(20) Holding Over. In the event Theatre Squared, Inc. shall hold over on the Premises,
or any part thereof, after the termination under this Lease Agreement or the expiration of the Term
or any extension, unless otherwise agreed in writing such holding over shall constitute and be
construed as a tenancy from year to year only.
(21) Inspection. City of Fayetteville, Arkansas, acting through its authorized agents
and representatives, shall have the right to enter upon the Premises at any and all reasonable times
for the purpose of inspecting the general state of repair and condition of the Premises, or for any
other reasonable purpose whatsoever, including, but not limited to, emergencies.
(22) Default. Any or all of the following shall constitute an event of default ("Event of
Default") pursuant to the terms under this Lease Agreement:
(A) Theatre Squared, Inc.'s failure for any reason whatsoever to comply with the terms,
covenants, conditions and agreements contained herein including its
Representations and Warranties of Paragraph 36 or to promptly discharge any and
all of its obligations and duties pursuant hereto, including without limitation
Theatre Squared, Inc.'s failure to pay any sum herein required or failure to provide
proof of payment of same;
(B) The filing of a petition in bankruptcy by or against Theatre Squared, Inc. pursuant
to any section or chapter of the Bankruptcy Code, as amended, or any other similar
law or statute of the United States of America or any state thereof, or entering into
any agreement, plan of reorganization or composition with creditors, or any
committee thereof,
(C) Theatre Squared, Inc.'s becoming insolvent or making a transfer or assignment for
the benefit of creditors;
(D) The appointment of a receiver or trustee for all, or a substantial part, of Theatre
Squared, Inc.'s assets; or
(E) The issuance of process for execution upon or the attachment of Theatre Squared,
Inc.'s property upon, or interest in, the Premises.
(23) Remedies. Upon the occurrence of any Event of Default, Theatre Squared, Inc.
waives all statutory rights of ejectment, and City of Fayetteville, Arkansas shall have the option of
12
pursuing any one or more of the following remedies upon written notice to Theatre Squared, Inc.
If such default is pursuant to a cause shown in (22) (A), Theatre Squared, Inc. shall be notified by
the City in writing pursuant to paragraph 35 and have three months from such notice to respond
and cure such default prior to its ejectment from the Premises:
(A) Terminate this Lease Agreement, in which event Theatre Squared, Inc. shall
promptly surrender the Premises to City of Fayetteville, Arkansas, and, if Theatre
Squared, Inc. fails to do so, City of Fayetteville, Arkansas may, without prejudice
to any other remedy which it may have for possession of the Premises or the
collection of any arrearages in rental payments, enter upon, and take possession of,
the Premises and expel or remove any agent, representative or employee of Theatre
Squared, Inc. or any other person who may be occupying the Premises, or any part
thereof, under the authority of Theatre Squared, Inc., without being liable for
prosecution of any claim for damages therefore; Theatre Squared, Inc. agrees to pay
to City of Fayetteville, Arkansas on demand the amount of all losses and damages
which City of Fayetteville, Arkansas may suffer by reason of such termination,
whether through an inability to relet the Premises on satisfactory terms or
otherwise;
(B) Enter upon or take possession of the Premises and expel or remove any agent,
representative or employee of Theatre Squared, Inc., or any other person occupying
the Premises, or any part thereof, under the authority of Theatre Squared, Inc.,
without being liable for prosecution or any claim for damages therefore; or
(C) Enter upon the Premises without being liable for prosecution or any claims for
damages therefore, and do and perform whatever acts Theatre Squared, Inc. is
13
obligated to do pursuant to the terms under this Lease Agreement. Theatre Squared,
Inc. shall reimburse City of Fayetteville, Arkansas on demand for any expenses
which City of Fayetteville, Arkansas may incur in thus affecting compliance with
Theatre Squared, Inc.'s obligations pursuant hereto, including, without limitation,
all court costs and attorney's fees.
(24) No Waiver. The waiver by the City of Fayetteville or Theatre Squared, Inc. of any
breach or violation of any provision under this Lease Agreement shall not act or be construed as a
waiver of any prior or subsequent breach hereof, nor shall the pursuit of any of the foregoing
remedies (as set forth in Paragraph 23) preclude the pursuit of any other remedies provided herein
or applicable law, nor shall the pursuit of any remedy provided herein or by applicable law
constitute a forfeiture or waiver of any payments or other sums payable to City of Fayetteville,
Arkansas pursuant hereto, or of any damages accruing to City of Fayetteville, Arkansas by reason
of Theatre Squared, Inc.'s violation of any of the terms, conditions, and covenants contained herein.
(25) Quiet Enjoyment. City of Fayetteville, Arkansas warrants and represents to
Theatre Squared, Inc. that it has the right and power to execute and perform this Lease Agreement
and that Theatre Squared, Inc., upon the payment of rental and the performance of the other
covenants and terms contained herein, shall peaceably and quietly have, hold, and enjoy the
Premises during the full term under this Lease Agreement.
(26) Further Assurances. From time to time, and at all times, City of Fayetteville,
Arkansas and Theatre Squared, Inc. shall do all such further acts as may be reasonably required to
fully perform and carry out the terms and intent under this Lease Agreement.
(27) Entire Agreement. This Lease Agreement constitutes the sole and only agreement
between City of Fayetteville, Arkansas and Theatre Squared, Inc. concerning the subject matter
1E
hereof and supersedes all prior agreements, arrangements or understandings, if any, whether
written or oral, relating to the subject matter hereof.
(28) Severability. In case any one or more of the provisions contained in this agreement
shall for any reason whatsoever be held invalid, illegal or otherwise unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this
Lease Agreement shall be construed as if such illegal, invalid or unenforceable provision had never
been contained as a part hereof.
(29) Applicable Law. This Lease Agreement shall be interpreted and construed, and
the respective rights of City of Fayetteville, Arkansas and Theatre Squared, Inc. governed,
according to the laws of the State of Arkansas. Nothing contained in this Lease Agreement shall
be deemed, construed or operate as a waiver of any immunities to suit available to the Theatre
Squared, Inc., the City or their respective trustees, officials, or employees.
(30) Venue. The venue of any suit, cause of action or other legal proceeding pertaining
to this Lease Agreement shall be in Washington County, Arkansas.
(31) Amendment. This Lease Agreement may only be amended by a writing executed
by both City of Fayetteville, Arkansas and Theatre Squared, Inc., and thereafter duly delivered by
each respectively to the other and incorporated by reference as a part hereof.
(32) Headings. The headings of the respective articles or paragraphs under this Lease
Agreement are for the purpose and convenience of reference only, and are not intended to be a part
of, or to affect the meaning and interpretation of, this Lease Agreement. The Recitals as the
beginning of the Lease Agreement are and shall be construed in harmony with all other substantive
provisions of this Lease Agreement.
(33) Recorded Memorandum. Concurrently with the execution and delivery under
15
this Lease Agreement, City of Fayetteville, Arkansas and Theatre Squared, Inc. shall execute,
deliver and promptly file for record in the deed records of Washington County, Arkansas, a
memorandum evidencing this Lease Agreement in substantially the same form as the attached
Exhibit "C", to which reference is made for all purposes.
(34) Binding Effect. This Lease Agreement is binding upon and shall inure to the
benefit of the City of Fayetteville, Arkansas and Theatre Squared, Inc. and their respective
successors in title and permitted assigns.
(35) Notices. All notices, information, offers, payments of rental, or other
communications herein required or perm itted, shall be in writing and shall be properly given, made
or sent when delivered personally to the below identified representative of such party addressed in
such writing, or when mailed by prepaid certified or registered mail, return receipt requested, or
by overnight delivery service, to such party at its respective address as follows:
If to City of Fayetteville, Arkansas:
Office of the Mayor
113 West Mountain St.
Fayetteville, AR 72701
If to Theatre Squared, Inc.:
Theatre Squared, Inc.
112 West Center Street, Ste. 440
Fayetteville, AR 72701
Attention: Executive Director
or to such other respective addresses either City of Fayetteville, Arkansas or Theatre Squared, Inc.
may hereafter designate and give notice thereof to the other.
(36) Representations and Warranties of Theatre Squared, Inc. Theatre Squared,
Inc. hereby covenants and warrants to City of Fayetteville, Arkansas that:
(A) Theatre Squared, Inc. is a not -for -profit corporation incorporated pursuant to the
laws of the State of Arkansas, has duly paid all applicable franchise taxes and
charter fees, and is duly authorized to do business in the State of Arkansas;
(B) The undersigned individual, acting as the duly authorized agent of Theatre Squared,
Inc., has full power and authority to execute this Lease Agreement as the act and
deed of Theatre Squared, Inc.; provided, however, Theatre Squared, Inc.'s taking
possession of the Premises, or any part thereof, shall be conclusively deemed as
Theatre Squared, Inc.'s ratification under this Lease Agreement; and Theatre
Squared, Inc. has fully and completely inspected the Premises, and as of the
effective date hereof the Premises are adequate and sufficient for the purposes for
which they are herein leased.
(C) At all times during the Term, Theatre Squared, Inc. shall operate, manage and
maintain the Premises at the corner of West Avenue and Spring Street in
Fayetteville, Arkansas competently and in a manner that is at least as highly
professional as the quality and quantity of Theatre Squared, Inc.'s performances
and activities which occurred in 2015. This performance requirement shall be
temporarily suspended for required repairs, remodeling or renovations.
(D) Theatre Squared, Inc. shall ensure that its sublessees and residential tenants shall
behave appropriately and legally, and not unreasonably disturb its neighbors.
(37) Execution. This Lease Agreement was executed by City of Fayetteville, Arkansas
and Theatre Squared, Inc. on the dates shown respectively on the acknowledgments of each, but
is effective for all purposes on the effective date as set forth above.
(38) Counterparts. This Lease Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and together shall constitute one and the same
17
instrument. Signatures transmitted electronically via PDF copy or via facsimile shall be binding
and make this Lease Agreement effective.
(39) Construction Finanein. City acknowledges that Theatre Squared, Inc. intends to
obtain financing for the construction of the theatrical performance facility on the Premises. In order
to facilitate the approval of financing, and subject to City's reasonable approval of the lender, City
agrees that Theatre Squared, Inc., may mortgage its interest in this Lease to its lender. The parties
acknowledge and agree that City shall in no way be liable to pay any sums due by Theatre Squared,
Inc. to mortgagee nor shall City be obligated to perform the obligations of Theatre Squared, Inc.
under any such mortgage. In the event of a tenant default under the lease per Paragraph 22, the
mortgagor will give mortgagee, or its assignee or designee, the right to assume the rights and
obligations of Theatre Squared, Inc. The assignment of these rights and obligations to a tenant or
tenants satisfying the conditions of the Lease will be subject to approval by the City as specified
in Paragraph 17. The mortgagee, its assignee or designee, may be permitted to hold the Premises
without the commercial operation thereof for such period of time as may be necessary to find such
a substitute non-profit corporation capable of satisfying the conditions set forth in Paragraph 36.
City agrees to give the mortgagee notice of any default by Theatre Squared, Inc. and a period of
not less than thirty (30) days to cure any default on Theatre Squared, Inc's behalf. City also agrees
to timely execute any commercially reasonable estoppel certificates or subordination, non -
disturbance or attornment agreements as Theatre Squared's lender, its assignee or designee, may
request.
18
ATTEST;
City Clerk
Date; 6 -e f .2016
�01%iIIIIIIII.p.,,,
ate'• � •w�t
►U.
`FAYE EVILLE:;O
.NS
A
Date: 1,� ,� Gs 6 i . 2016
It., ARKANSAS
THEATRE SQUARED,
/rINC.
By: !
Title: 1�
19
EXHIBIT "A"
DESCRIPTION OF PREMISES
LEGAL DESCRIPTION:
A PART OF BLOCK 91N THE ORIGINAL PLAT OF THE TOWN OF FAYETTEVILLE, AR
AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE NW CORNER OF BLOCK
9 THENCE S87027'31"E 155.00 FEET, THENCE S03°00'42"W 151.50 FEET, THENCE
S87°27'31"E 6.00 FEET, THENCE S03°00'42"W 92.13 FEET, THENCE N87°43'20"W 161.76
FEET, THENCE N03011'17"E 244.38 FEET TO THE P.O.B., CONTAINING 0.88 ACRES
MORE OR LESS SUBJECT TO EASEMENTS AND RIGHT OF WAY OF RECORD.
LESS AND EXCEPT: A FIFTEEN FOOT STRIP DESCRIBED AS BEGINNING AT THE
NORTHWEST CORNER OF BLOCK 9; THENCE NORTH 89 DEGREES 27 MINUTES 19
SECONDS EAST 15 FEET; THENCE SOUTH 0 DEGREES 06 MINUTES 07 SECONDS WEST
151.50 FEET; THENCE SOUTH 89 DEGREES 27 MINUTES 19 SECONDS WEST 15 FEET;
THENCE NORTH 0 DEGREES 06 MINUTES 07 SECONDS EAST 151.50 FEET TO THE
POINT OF BEGINNING.
NOTE: The City of Fayetteville is filing an eminent domain lawsuit and quiet title lawsuit
to acquire and confirm clear title to the portion of the above -described property that is
excepted from the entire property. Once fee simple title is vested and confirmed in the City
of Fayetteville, the Description of Premises will include the excepted property.
Exhibit A
EXHIBIT "B"
PLAN OF DEVELOPMENT — THEATRE SQUARED, INC.'S DEVELOPMENT PROPOSAL
The Development Proposal includes an approximately 50,000 square -foot professional theatre
building to be located at the Southeast corner of West Ave. & Spring St. in Downtown Fayetteville.
The project is intended to become the new home for TheatreSquared (T2), currently the only
professional theatre offering a year-round season within a 150-mile radius of Fayetteville and
winner of the American Theatre Wing's National Theatre Company Award. The theatre building
will provide intimate performance and rehearsal spaces as well as design workshops, staff offices,
education space, and public spaces to serve T2's ;:audience. A separate residential building will
provide housing for TheatreSquared's visiting artists from across the country, who currently stay
during rehearsal and performances in lodging donated by Fayetteville community members.
The project is in design development under the auspiccs ofthc Walton Firmly Foundation's
Northwest Arkansas Design Excellence program. Throug11 this initiative.. a rearm led by London -
based theatre designers Charcoalblue and international design award winners Marvel Architects
have been selected and are gathering input through community sessions its well as workshops with
staff and arti,,,� to dcveloh a site and building design. Plans will be released to the public and be
submitted to the C ity's re oew process in fall 2016. The project »°ill conform to all arehitectural
standards in the city's 1 mv,ntown Master Plan and provide a walkable link between two ofthc "four
corners" in the Downtown Entertainment Overlay District.
This large-scale cultural construction project will have a considerable impact on Fayetteville's local
economy, generating nearly $40 million in direct and indirect spending during construction and
nearly doubling TheatreSquared's ongoing economic impact to more than $4 million annually after
the building is completed.
TheatreSquared's facility vision statement, as drafted by a committee of community members in
March 2015, reads in part:
"We see TheatreSquared as its own center, a destination and a place of origin. The
work created here will draw audiences from near and far and be our region's export
to the world's theatre centers ---Chicago, New York and London. We see a gathering
place --a theatre commons ---that is welcoming and fascinating, alive with activity.
A building that draws the eye and evokes curiosity. A place that invites, hints at the
unusual, and suggests something significant will happen here.
"Here in our community, we see a permanent home for remarkable theatre, done
well and with passion. We see a premier national theatre in Northwest Arkansas."
Exhibit B
EXHIBIT "C"
MEMORANDUM EVIDENCING THE LEASE AGREEMENT
STATE OF ARKANSAS
)ss
COUNTY OF WASHINGTON
THIS MEMORANDUM is executed to evidence the terms contained in a written instrument
executed,:�l Lp#x t _ _ 1 , 2016, and effective as provided therein, styled "Lease Agreement",
by the City of Fayetteville, Arkansas (collectively, "City of Fayetteville, Arkansas") has leased the
herein described real property to Theatre Squared, Inc. Council, Inc. ("Theatre Squared, Inc."), a non-
profit corporation, with its principal place of business in Fayetteville, Arkansas. Such Lease
Agreement pertains to the following described tract of real property, to wit:
LEGAL DESCRIPTION:
A PART OF BLOCK 9 IN THE ORIGINAL PLAT OF THE TOWN OF FAYETTEVILLE, AR
AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE NW CORNER OF BLOCK
9 THENCE S87°2731"E 155.00 FEET, THENCE S03°00'42"W 151.50 FEET, THENCE
S87°27'31"E 6.00 FEET, THENCE S03°00'42"W 92.13 FEET, THENCE N87°43'20"W 161.76
FEET,, THENCE NO3-11'17E 244.38 FEET TO THE P.O.B., CONTAINING 0.88 ACRES
MORE OR LESS SUBJECT TO EASEMENTS AND RIGHT OF WAY OF RECORD.
LESS AND EXCEPT: A FIFTEEN FOOT STRIP DESCRIBED AS BEGINTNING AT THE
NORTHWEST CORNER OF BLOCK 9; THENCE NORTH 89 DEGREES 27 MINUTES 19
SECONDS EAST 15 FEET; THENCE SOUTH 0 DEGREES 06 MINUTES 07 SECONDS WEST
151.50 FEET; THENCE SOUTH 89 DEGREES 27 MINUTES 19 SECONDS WEST 15 FEET;
THENCE NORTH 0 DEGREES 06 MINUTES 07 SECONDS EAST 151.50 FEET TO THE
POINT OF BEGINNING.
NOTE: The City of Fayetteville is filing an eminent domain lawsuit and quiet title lawsuit
to acquire and confirm clear title to the portion of the above -described property that is
excepted"from the entire property. Once fee simple title is vested and confirmed in the City
of Fayetteville, the Description of Premises will include the excepted property.
This -memorandum evidencing the Lease Agreement shall be filed for record in the deed
records'of Washington County, Arkansas.
EXECUTED AND EFFECTIVE this day of ( , 2016.
Exhibit C
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•'• 6NI Y OF "• ` `
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ATTEST:
City Clerk
Date: — O Q , 2016
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)ss:
COUNTY OF WASHINGTON )
ARKANSAS
On this the day of 2016, Before nte, the undersigned, a Notary Public, duly
commissioned, qualified and actin wit] in and or said County d State., appeared in person the
within -named �� n- and DNk0- r , S Otte personally well
known, who stated they were the Mayor and City Clerk of the City of Fayetteville, Arkansas, a
municipality, and were duly authorized in their respective capacities to execute the foregoing
instrument for and in the name and behalf of said municipality, and further stated and acknowledged
that they had so signed, executed, and delivered said foregoing instrument for the consideration, uses
and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on this �day
cs[ g_, T 2016.
My Commission Expires:
r L � �► �r
Notary Pulalrc
Exhibit C
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6
STATE OF ARKANSAS
COUNTY OF WASHINGTON
THEATRE SQUARED, INC.
By: -- -
Title:
ACKNOWLEDGMENT
)ss:
On this the, day of ff . t, - 2016. before me. the undersigned, a Notate Public.
duly cornrnissioned, qualified and aiz{ing within and Ior sijid `ou;iry and State, appeared in person the
within -Hauled bin 0' and ° J) to Hie personally well
known, who state they were the Chairman and Treasurer of Theatre Squared, Inc., a non-profit
corporation, and were duly authorized in their respective capacities to execute the foregoing
instrument for and in the name and behalf of said non-profit corporation, and further stated and
acknowledged that they had so signed, executed, and delivered said foregoing instrument for the
consideration, uses and purposes therein mentioned and set forth.
T ESTIIVIONY WHEREOF. I have hereunto set my hand and official seal on this clay
of `[� , 2016.
My Commission Expires:
{
No
JENNIFER L VINSON
MY COMMISSION N 12402W
EXPIRES; January 17, 2025
Washington County
Exhibit C