Loading...
HomeMy WebLinkAboutReg 2011-04-04 Item 6C - Lease Agreement - Digital Billboard with Clear Channel Outdoors for $25,000 Per Year COUNCIL AGENDA SYNOPSIS 0l IL'A ti q Initials ITEM No. t y Meeting Date I Prepared by Mayo s�review 1 Council review TRW fl I 03/28/11 I BJM 1 (Ag (.i y 04/04/11 BJM r 290:_ I I I I I 69.C, ITEM INFORMATION CAS NUMBER: 11-039 STAFF SPONSOR: BRANDON MILES ORIGINAL AGENDA DATE: 3/28/11 AG KNDA ITI Ivr TITLE Authorizing the Mayor to enter into a lease agreement with Clear Channel Outdoors for the construction of a digital billboard on City owned property. C.\ 1 EGORY Discussion Motion Resolution L Ordinance Bid Award n Public Hearths Other Mtg Date 03/28/11 Mtg Date 4/4/11 Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date S1)( )NSOR Council Mayor Adtn Svcs DCD Finance Fire Legal I I P&R Police PW SI'ONSOR's The City owns a 9,400 square foot parcel located at the NE corner of West Valley Hwy and SUMMARY South 180th Street. Clear Channel Outdoors (CCO) has approached the City about the possibility of leasing the property for the construction and operation of a digital billboard. CCO would pay the City a starting lease rate of $25,000 per year. As required by City Code, prior to installation, CCO would remove ten billboard faces elsewhere in the City. RINrl?\C'FE) BY fl COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte fl Utilities Cmte Arts Comm. Parks Comm. Planning Comm. DATE: 3/14/11 COMMITTEE CHAIR: COUNCILMEMBER SEAL RECOMMENDATIONS: SPONSOR /ADMIN. Department of Community Development COMMIYIEE Unanimous Approval; Forward to Committee of the Whole COST IMPACT FUND SOURCE EXPENDITURE REQUIRED AMOUNT B UDGETED APPROPRIATION REQUIRED $N /A $N /A $N /A Fund Source: N/A Comments: The proposed agreement will provide the City over $400,000 in revenue over 15 years. I MTG. DATE RECORD OF COUNCIL ACTION 03/28/11 Forward to next Meeting MTG. DATE ATTACHMENTS 03/28/11 Informational Memo dated 3/1/11 Lease Agreement in Final Form Aerial Photo of Site Minutes from the Community Affairs and Parks Committee Meeting of 3/14/11 04/04/11 Lease agreement with housekeeping chance on Page 1 and strengthened hold harmless language on Page 3, in strike through underlined format 1 53 54 CLEAR CHANNEL OUTDOOR LEASE AGREEMENT Lease 1. This Lease Agreement "Lease is dated effective as of April 1 2011, and entered into by and between CITY OF TUKWILA "Landlord and CLEAR CHANNEL OUTDOOR, INC., a Delaware corporation "Tenant Landlord hereby leases to Tenant the real estate commonly known as 2140 SW 43` Street and situated in the City of Tukwila, County of King in the State of Washington, whose permanent property tax number and legal description are attached hereto and incorporated herein by reference as Exhibit A (the "Property The Property is leased for the purpose of erecting, maintaining, operating, improving, supplementing, posting (whether physically, digitally or via other remotely changeable technology), illuminating, repairing, repositioning and /or removing outdoor advertising structure, including, without limitation, fixture connections, electrical and broadband supply and connections, panels, signs whether digital, static or similar technologies), copy and any other equipment and accessories as Tenant may place thereon (collectively, the "Structure This Lease includes all necessary rights of ingress and egress. Tenant may license the use of the Structure, or any portion thereof, for any lawful purpose. 2. This Lease shall be in effect for an initial term of fifteen (15) years, commencing on the date construction permits are approved by the City of Tukwila. If for any reason Tenant is unable to either complete construction of the Structure and /or fails to obtain the necessary governmental authorizations to operate the Structure, Tenant may terminate this Lease immediately upon notice to Landlord. If the structure is not built within 1 year of mutual execution of this lease agreement then the lease shall terminate. This Lease Agreement shall not be construed as a building-or land use permit and /or public works oermit.- Tenant is responsible for obtaining necessary city permits prior to constructing the structure. CLEAR CHANNEL shall have the right to terminate this Lease at the end of any monthly period during the initial term or any subsequent term upon notice to Landlord served not less than thirty (30) days prior to the end of any monthly period. 3. Tenant shall pay Landlord rent in the amount of Twenty Five Thousand Dollars ($25,000.00) per year payable in full upon commencement of the term and each anniversary date thereafter for the period of time commencing when tenant has approval from governmental entities for the construction of the structure. Annual rent shall increase by seven and one half percent (7.5 on the fifth (5 and tenth (10 anniversaries of the Lease commencement. 4. This Lease shall continue in full force and effect for its initial term from the date construction permits are approved by the City of Tukwila. During any term of this Lease and for a period of ninety (90) days following the expiration or earlier termination of this Lease, Landlord hereby grants to Tenant a right of first refusal, acceptance of which is exercisable at Tenant's sole discretion, to match the material terms of any offer acceptable to Landlord for the use or purchase of all or any portion of the Property and /or to match the material terms of any offer acceptable to Landlord for the use of purchase of any parcel or collection of parcels that includes the Property (the "Offer"), which includes, without limitation, similar time periods for performance and investigation as are set forth in the Offer A copy of all relevant document(s) containing the Offer received by Landlord shall be delivered to Tenant (the "Offer Documents Tenant shall then have twenty (20) days from its receipt of the Offer Documents in which to match the material terms of the Offer by giving notice of acceptance to Landlord. If Tenant rejects the Offer and the Property transfers pursuant to the terms of the Offer, Landlord shall promptly notify Tenant of such transfer and provide Tenant with any relevant contact information and rental payment submission addresses of such new owner of the Property. Prior to transferring ownership of the Property, Landlord shall furnish the new owner with a copy of this Lease. 5. Tenant is and shall remain the owner of the Structure until Tenant no longer has any rights to use or possess the Property whether (1) under this Lease, or any extension, renewal, or modification of this Lease; (2) by operation of law; (3) as a holder -over tenant; or (4) as such right is otherwise held by Tenant, provided, however, that Tenant has the right to remove the Structure at any time. Tenant must remove the structure within 30 -days of termination of this Lease or termination of tenant's right to use or possess the property. If tenant fails to remove the structure, the Landlord may remove the structure and seek reimbursement from the tenant for the removal and disposal of the sign and any associated legal fees. If for any reason Tenant's Structure is removed, materially damaged or destroyed, all rent payments shall cease for up to ninety (90) days until the Structure is rebuilt and all necessary governmental authorizations are obtained to operate the Structure. After 90 days tenant shall pay fifty percent (50 of the scheduled rent until repairs or replacement is completed or Tenant may terminate the Lease. If the Structure is removed for any reason, only the above ground portions of the Structure need be removed. Tenant has the sole right to make any necessary applications with, and obtain permits from, governmental entities for the construction, use and maintenance of the Structure. All such permits and other rights to outdoor advertising on the Property shall remain the property of Tenant. Tenant shall have no obligation to pursue any zoning matter or to continue to maintain any permit. Any such action shall be at Tenant's option. 55 6. Landlord and Landlord's tenants, agents, employees or other persons acting on Landlord's behalf, shall not place or maintain any object on the Property or any neighboring real property owned or controlled by Landlord, excluding City of Tukwila owned right of way or easements, which, in Tenant's sole opinion, would obstruct the view of the advertising copy or display on the Structure. If Landlord fails to remove the obstruction within fifteen (15) days after notice from Tenant, Tenant may in its sole discretion: (a) remove the obstruction at Landlord's expense; (b) cancel this Lease, remove any or all of the Structure, and receive all pre -paid rent for any unexpired term of this Lease; or (c) reduce the rent to One Hundred Dollars ($100.00) per year while the obstruction continues. Tenant may trim any trees and vegetation currently on the Property and on any neighboring property owned or controlled by the Landlord as often as Tenant in its sole discretion deems appropriate to prevent obstructions. Without limiting the foregoing, Landlord shall not permit the Property or any neighboring property owned or controlled by Landlord to be used for off premise advertising. 7. If, in Tenant's sole opinion: (a) the view of the Structure's advertising copy becomes entirely or partially obstructed, (b) electrical service is unavailable; (c) the Property cannot safely be used for the erection or maintenance of the Structure for any reason; (d) the Property becomes unsightly; (e) there is a diversion, reduction or change in directional flow of traffic from the street or streets currently adjacent to or leading to or past the Property; (f) the Structure' value for advertising purposes is diminished; (g) Tenant is unable to obtain or maintain any necessary permit for the erection, use and /or maintenance of the Structure; or (h) the Structure's use is prevented or restricted by law, or Tenant is required by any governmental entity to reduce the number of billboards operated by it in the city, county or state in which the Structure are located; then Tenant may immediately at its option either: (i) reduce rent in direct proportion to the loss suffered; or (ii) cancel this Lease pursuant to paragraph 2 and receive all pre -paid rent for any unexpired term of this Lease. In addition, if Tenant is prevented from illuminating its signs by law, or other cause beyond Tenant's control, the rent shall be reduced by one -third for such period of non illumination. In the event that rent is reduced as outlined in this paragraph landlord and tenant shall first use best efforts to resolve the issue which has caused the rent reduction. In the event that a mutually agreeable solution can not be reached in 30 days then Landlord may terminate the Lease after giving Tenant at least 90 days notice. 8. (a) If the Structure or the Property, or any part thereof, is condemned by proper authorities or taken without the exercise of eminent domain, whether permanently or temporarily; (b) if any right -of -way from which the Structure is visible is relocated; (c) if there is a diversion, reduction or change in directional flow of traffic from the street or streets currently adjacent to or leading to or past the Property; (d) if visibility to the Structure is impaired; (e) if the value or utilization of the Structure is reduced; (f) or the Structure's use is prevented or otherwise restricted, then Tenant shall have the right to relocate the Structure on Landlord's remaining property or to terminate this Lease upon not less than thirty (30) days' notice and to receive all pre -paid rent for any unexpired term of this Lease. Tenant shall be entitled to all compensation and other remedies provided by law, including, without limitation, just compensation for the taking of the Structure and Tenant's leasehold interest in this Lease, limitation on the use or maintenance of the Structure, loss of goodwill, and /or relocation assistance. Landlord shall assert no rights in such interests. If condemnation proceedings are initiated, Landlord shall use its best efforts to include Tenant as a party thereto. No right of termination set forth anywhere in this Lease may be exercised prior to the sale to any entity with the power of eminent domain or by or for the benefit of any entity with the power of eminent domain. 9. Landlord represents that it is the owner (or owner's authorized agent) of the Property and has the authority to enter into this Lease. Landlord shall provide a readily accessible access point to the Property for Tenant to enter and exit the Property for installation and maintenance of the Structure. Access will be granted either from the east through the neighboring cabinet shop property or Landlord will grant permission for Tenant to gain access over the curb and sidewalk on the south end of the Property. In the event that a ramp needs to be constructed for safe truck access to the Property Tenant shall construct such a ramp at its own expense. The cost associated with constructing the ramp shall be reimbursed by Landlord via a rent credit in the amount of the cost of the ramp not to exceed five thousand dollars, ($5,000). 10. If the Property is currently encumbered by a deed of trust or mortgage, ground lease or other similar encumbrance, Landlord shall deliver to Tenant on or before the commencement date hereof a non disturbance agreement in a form reasonably acceptable to Tenant. 11. If (a) Tenant has not been informed of the current address of Landlord or its authorized agent, or (b) two or more of the monthly payments sent by Tenant are not deposited by Landlord within ninety (90) days after the last such payment is sent by Tenant, then no further rent shall be payable hereunder for the period commencing with the due date of the first such payment not deposited and continuing until Landlord (i) gives Tenant notice of its business address or that of its authorized agent or (ii) deposits all previous payments. In either case, Tenant's rent obligations shall be reinstated retroactively as if neither event described in (a) or (b) of this section had occurred. 56 12. Tenant shall indemnify and hold Landlord harmless from all injuries to the Property or third persons caused by Tenant's employees, agents, licenses and contractors and for all claims demands, lawsuits for damaaes arising out of Tenant's use of the Prooertv. Tenant shall indemnify and hold Landlord harmle 'c from all injuries to the Property or third persons caused by Tenant, Tenant's employeac, agents, licensees and contractors. Landlord shall indemnify and hold Tenant harmless from all injuries to Structure or third persons caused by Landlord, Landlord's employees, agents, licensees and contractors. 13. This Lease is binding upon the heirs, assigns and successors of both Landlord and Tenant. Landlord agrees not to assign this Lease to any competitor of Tenant without Tenant's prior written permission. Tenant shall have the absolute right to assign or sublet the structure. Landlord shall have the right to use the property and lease remaining portions of the property provided those leases do not impact Tenants use of the property or Tenants about to maintain the Structure. Landlord agrees not to lease any portions of the property to a competitor of Tenant. 14. Any notice to any party under this Lease shall be in writing sent by certified or registered mail, and shall be effective on the earlier of (a) the date when delivered and receipted for by a person at the address specified within this Lease, or (b) the date which is three (3) days after mailing (postage prepaid) by certified or registered mail, return receipt requested, to such address; provided, that in either case notices shall be delivered to such other address as shall have been specified in writing by such party to all parties hereto prior to the notice being delivered. 15. This Lease shall be governed exclusively by the provisions hereof and by the laws of the state in which the Property is located, as the same may from time to time exist without regard to conflicts of laws provisions. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Lease may be brought against any of the parties only in the courts within the county in which the Property is located, or, if it has or can acquire jurisdiction, in the United States District Court for the applicable district located in the applicable county where the Property is situated, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. If suit is brought or an attorney is retained by any party to this Lease because the other party breached this Lease, the prevailing party shall be entitled to reimbursement for reasonable attorneys' fees and all related costs and expenses. 16. Neither Landlord nor Tenant shall be bound by any terms, conditions or oral representations that are not set forth in this Lease. This Lease represents the entire agreement of Tenant and Landlord with respect to the Structure and the Property and supercedes any previous agreement. Landlord hereby grants Tenant all rights necessary to record a memorandum of this Lease without Landlord's signature, including a limited power of attorney for such purpose. TENANT: LANDLORD: CLEAR CHANNEL OUTDOOR, INC. CITY OF TUKWILA By: By: Its: Jim Haggerton, Mayor Branch Address: Printed Name of Landlord: Address: Tel No. Tel No. Tax ID No. ATTEST /AUTHENTICATED APPROVED AS TO FORM Christy O'Flaherty, CMC, City Clerk City Attorney Date approved by City Council 57 Exhibit A Permanent Property Tax Number: 362304 -9037 Legal Description: POR OF NW 1/4 BEG 30 FT N 1275.75 FT W FROM NE CORNER OF HENRY ADAMS DONATION CLAIM TH N 120 FT TH W 98 FT TH S 57 FT TH W 72 FT TO ELY MGN OF WEST VALLEY HWY TH SLY ALG SAID ELY MGN TAP 30 FT N OF PLW N LINE OF HENRY ADAMS DONATION CLAIM TH E TO POB LESS POR FOR STATE HWY 58