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HomeMy WebLinkAboutFIN 2024-10-28 Item 1A - Lease Agreement - 6300 Building Office Space with Sound Cities AssociationCity of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM TO: Finance and Governance FROM: Brandon Miles, Director CC: Thomas McLeod DATE: October 7, 2024 SUBJECT: Sound Cities Association Lease Agreement (2025/26) ISSUE The current lease agreement for office space in the 6300 building with Sound Cities Association (SCA) expires on December 31, 2024. Staff is proposing to enter into a new two-year lease agreement with SCA. BACKGROUND SCA is a local non-profit corporation composed of member cities with a population of with 150,000 or fewer people that works locally and partners regionally to create livable, vital communities through advocacy, education, leadership, mutual support and networking. The City of Tukwila is a member of SCA. Since 2006 SCA has leased office space from the City in the 6300 building. The current two-year lease with SCA expires at the end of the year. DISCUSSION Staff is proposing a two-year lease agreement from January 1, 2025 — December 31, 2026, to coincide with the biennium budget cycle. The rent per square foot, per year, will increase modestly. The total annual revenue for 2025 will be $28,495.00 and in 2026 the revenue will be $29,189.00. Revised Code of Washington 35A.11.010 and 35A.11.020 all lease agreements must go before City Council for authorization, unless the City Council has delegated its authority. FINANCIAL IMPACT Unless terminated, as permitted under the agreement, the lease agreement will generate $57,684.00 in general fund revenue for the City. RECOMMENDATION The Committee is being asked to forward this item to the November 4 consent agenda for final approval to authorize the Mayor to execute the new lease agreement. ATTACHMENTS • Draft lease agreement with Sound Cities Association for office space in the 6300 building. 1 2 wq City of Tukwila ss c�i 6200 Southcenter Boulevard, Tukwila WA 98188 >\ /20 s LEASE AGREEMENT Agreement Number: THIS LEASE AGREEMENT is made between the City of Tukwila ("the City" or "Lessor") and Sound Cities Association ("Sound Cities Association" or "Lessee"). IN CONSIDERATION OF the mutual benefits and conditions hereinafter contained, the parties hereto agree as follows: 1. Premises. Lessor is the owner of the commercial Boulevard, Tukwila, Washington (the "Property") Lessee, a portion of the Property consisting of a "Premises"). The Premises do not include the conduits, wires, fixtures and equipment abov the Property or the buildings thereon. he City share of the Property that the Premise rentable area of the Premises to the agr of this Lease. p ' ty located at 6300 Southcenter sso •es hereby agree to lease to ximately . •0 rentable square feet (the erior .11s, roo , and beneath, pipes, ducts, ended ceiling, or any other portion of Lessee agree that the Lessee's pro-rata t of 45%, based on the ratio of the agreed rea of the entire Property as of the date 2. Term. This Agreement s be ' ' - nd effect for a period commencing January 1, 2025 and ending Dece d26, unless sooner terminated under the provisions set forth in Section 22. Upohis Lease the Lessee shall surrender all keys and/or access cards to the Cit 3. Possession. Lessee • eemed to have accepted possession of the Premises in an "as - is" condition. The City es no representations to Lessee regarding the Premises including the structural condition of the Premises and the condition of all mechanical, electrical and other systems. Lessee shall be responsible for performing any work necessary to bring the Premises into condition satisfactory to Lessee. Lessee shall not engage in any improvements or alterations to the Premises without the express written consent of the City. 4. Rent. Base rent shall be set at $19.50 per square feet per year, or $28,459.00 per year, to be paid in monthly installments of $2,371.62 for the period of January 1, 2025 - December 31, 2025 and $20.00 per square feet per year, or $29,189.00 per year, to be paid in monthly installments of $2,431.43 for the period of January 1, 2026 - December 31, 2026. Rent shall be due on the first day of each month. If payment is not received by the fifth day of each month, Lessee shall be responsible for paying a late fee equivalent to five percent (5%) of the delinquent amount in addition to the past due payment. All delinquent sums not paid within thirty (30) days of the due date shall bear interest at the rate of twelve percent (12%) per Sound Cities Association 2025-2026 Lease Agreement Page 1 of 9 3 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: annum. Interest on all delinquent amounts shall be calculated from the original due date to the date of payment. The City's acceptance of less than the full amount of any payment due from Lessee shall not be deemed an accordance and satisfaction or compromise of such payment. 5. Leasehold Excise Tax. Lessee shall pay leasehold excise tax due pursuant to RCW 82.29A to Lessor by the first day of each month at the rate of 12.84% of the base rent set forth in Section 4 herein, such amount being $304.44.00 per month for January 1, 2025 - December 31, 2025 and $312.15 per month for January 1, 2026 - December 3 2026. The leasehold excise tax shall be paid in addition to the monthly rental payme► .nd any other payments required under this Lease. If the State of Washington changes l -holdexcisetax,thetaxpayable by the Lessee each month under this Lease shall . orrespo gly modified in compliance with RCW 82.29A without further action by the ties. 6. Use of Premises by Lessee. Lessee sh Premises shall be used only for the us purpose without the prior written cons Premises that is unlawful or th. 'll inc or cause the cancellation of to be committed any was not do or permit anything .one interfere with the r clients and visit 7. Lessee Maintenan Premises for general office use. The lied h- and for not for any other business or o act shall be done on or around the the e isting rate of insurance on the Premises the Premises. Lessee shall not commit or allow or any public or private nuisance. Lessee shall he Premises which will obstruct, cause injury or enants, or occupants of the Premises or their customers, pair Responsibility. Lessee shall, when and if needed, at Lessee's sole expense, - repairs to the Premises and every part thereof; and Lessee shall maintain the Premises in a neat, clean, sanitary condition. Lessee shall surrender the Premises to the City in good condition upon the termination of this Lease, reasonable wear and tear expected. 8. Signage. Lessee shall obtain the City's written consent before installing any signs on the Premises and shall install any approved signage at Lessee's sole expense and in compliance with all applicable laws. Lessee shall not damage or deface the Premises when installing or removing signage and shall repair any damage to the Premises caused by such installation or removal. 9. Utilities, Equipment and Services. The City shall provide the Premises with the following services, the cost of which shall be included in the rent paid by Lessee: water, electricity, and heating/cooling seven (7) days per week and janitorial services five (5) nights per week, exclusive of holidays. Sound Cities Association 2025-2026 Lease Agreement Page 2 of 9 4 wq City of Tukwila ss c�i 6200 Southcenter Boulevard, Tukwila WA 98188 >\ /20 s Agreement Number: The Lessee shall pay the City $110 per month for internet service, payable on the first of each month along with rent. The City shall provide six (6) extensions to the City phone system for use by the Lessee and will maintain the phone system at no additional cost to the Lessee. Lessee shall be responsible for all costs associated with long distance and other toll calls which may be billed separately by the City. Charges will be invoiced upon recei f phone bill and will be payable within 30-days. On an annual basis, the Lessee shall provide an i equipment and software utilized by the Le requested for purchase by the City to update at actual cost. Any hardware equipment or reviewed by the City's Technology a ` •vatio and supportability prior to purchase a Virus checking software and Service Center is manda Lessee. Any virus signature to automatically u ntory lis the City detailing hardware A hard equipment or software s inventory will be billed to the Lessee re purchased by the Lessee shall be vice Center for system compatibility proved by the City's Technology and Innovation omputers, laptops and servers in use by the ease• . the virus checking software company shall be set e Lessee's software updated to the latest version available. 10. Destruction of Pre he Premises are completely or partially destroyed by fire or other casualty, of if th- - damaged by an uninsured casualty, or by an insured casualty to such an extent that the damage cannot be repaired within sixty (60) days of the occurrence, the City shall have the option to restore the Premises or to terminate this Agreement on thirty (30) days written notice, effective as of any date not more than sixty (60) days after the occurrence. If this Section becomes applicable, the City shall advise the Lessee within thirty (30) days after such casualty whether the City elects to restore the Premises or to terminate this Agreement. If the City elects to restore the Premises, it shall commence and complete the restoration work with due diligence. For the period from the date of the casualty until completion of the repairs (or the date of termination of this Agreement, if the City elects not to restore the Premises) the monthly base rent shall be abated in the same proportion that the untenantable portion of the Premises bears the whole thereof, unless the casualty results from Lessee's negligence or its breach of obligations under this Agreement. 11. Hazardous Substances. Lessee shall not generate, release, spill, store, deposit, transport or dispose of (collectively "Release") any hazardous substances, sewage, petroleum products, Sound Cities Association 2025-2026 Lease Agreement Page 3 of 9 5 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: radioactive substances, medicinal, bacteriological, or disease -producing substances, hazardous materials, toxic substances or any pollutants or substances defined as hazardous or toxic in accordance with applicable federal, state and local laws and regulations in any reportable quantities (collectively "Hazardous Substances") in, on or about the Premises. Lessee shall attach a separate list of Hazardous Substances they propose to store on site and the City must accept the list in writing or Hazardous Substances cannot be stored on site. The Lessee shall indemnify, hold harmless and defend the City from any and all claims, liabilities, losses, damages, clean-up costs, response costs and expenses, including reasonable attorneys' fees, arising out of or in any way related to the r -ase by the Lessee or any of its agents, representatives or employees, or to the prese ' .f such Hazardous Substances in, on or about the Premises occurring at any time afte e - -ctive date of this Agreement to the full extent of the Lessee's liability. 12. Alterations and Additions. After obtaining t make, at its sole expense, such additional impro it may deem necessary or desirable. A done in conformity with plans and spe shall be done in a workmanlike •- ner . `:' all 13. Liens. Lessee shall keep materials furnished, or obli 14. Insurance. The against claims connection with th itten consent of the City, Lessee may tints or alterations to the Premises which construction done by Lessee shall be ved by the City. All work performed b-come the property of the City. m any liens arising out of any work performed, ncu - i by Lessee. and maintain for the duration of the Lease, insurance ersons or damage to property which may arise from or in peration and use of the leased Premises. a. No Limitation The Lessee's maintenance of insurance as required by the Lease shall not be construed to limit the liability of the Lessee to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. b. Minimum Scope of Insurance. The Lessee shall obtain insurance of the types described below: i. Commercial General Liability insurance shall be at least as broad as Insurance Services Office (ISO) occurrence form CG 00 01 and shall cover premises and contractual liability. The City shall be named as additional an insured on Lessee's Commercial General Liability insurance policy using ISO Additional Insured -Managers or Lessors of Premises Form CG 2011 or a substitute endorsement providing at least as broad coverage. ii. Property insurance shall be written on an all risk basis. Sound Cities Association 2025-2026 Lease Agreement Page 4 of 9 6 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: c. Minimum Amounts of Insurance. Lessee shall maintain the following insurance limits: i. Commercial General Liability insurance shall be written with limits no less than $2,000,000 each occurrence, $2,000,000 general aggregate. ii. Property insurance shall be written covering the full value of the Lessee's property and improvements with no coinsurance provisions. c. Other Insurance Provisions. The Lessee's Commercial General Liability insurance policy or policies are to contain or be endorsed to contain that t respect to the City. Any insurance, self-insurance, or by the City shall be in excess of the Lessee's insura shall be primary insurance as rance pool coverage maintained hall not contribute with it. d. Acceptability of Insurers. Insurance is to b- .ced with inss with a current A.M Best rating of not less than A: VII. e. Verification of Coverage. Lessee sh'sh th- with original certificates and a copy of any applicable amendatory endor - . g, but not necessarily limited to, the additional insured endorsem-• -vide _ he insurance requirements of the Lessee. f. Waiver of Subrogation. all claims, losses, and lia insurance on or i only to the ex g. Cit 's Pro•ert Lease, all-risk prope hereby release and discharge each other from om or caused by any hazard covered by property ith the Premises or said building. This release shall apply oss or liability is covered by insurance. he City shall purchase and maintain during the term of this urance covering the Building for full replacement value without any coinsurance provisions. h. Notice of Cancellation. The Lessee shall provide the City with written notice of any policy cancellation, within two (2) business days of receiving such notice. i. Failure to Maintain Insurance. Failure on the part of the Lessee to maintain the required insurance shall constitute a material breach of this Lease upon which the City may, after giving five (5) business days notice to the Lessee to correct the breach, terminate this Lease or, at its discretion, procure or renew such insurance and pay and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand. j. City Full Availability of Lessee Limits. If the Lessee maintains higher insurance limits than the minimums shown above, the City shall be insured for the full available limits of Commercial General and Excess or Umbrella liability maintained by the Lessee, irrespective Sound Cities Association 2025-2026 Lease Agreement Page 5 of 9 7 wq City of Tukwila ss c�i 6200 Southcenter Boulevard, Tukwila WA 98188 >\ /20 s Agreement Number: of whether such limits maintained by the Lessee are greater than those required by this Lease or whether any certificate of insurance furnished to the City evidence limits of liability lower than those maintained by the Lessee. 15. Indemnification and Hold Harmless. Lessee shall defend, indemnify, and hold harmless the City, its officers, officials, employees and volunteers from and against any and all claims, suits, actions, or liabilities for injury or death of any person, or for loss or damage to property, which arises out of Lessee's use of Premises, or from the conduct of Lessee's business, or from any activity, work or thing done, permitted, or suffered b ssee in or about the Premises, except only such injury or damage as shall have been • .sioned by the sole negligence of the City. It is further specifically and expressly under .. .t the indemnification provided herein constitutes the Lessee's waiver of immuni nder In. rial Insurance, Title 51 RCW, solely for the purposes of this indemnification. s waiver has b- mutually negotiated and agreed to by the Lessee and City. The provisi of tsection shall survive the expiration or termination of this Lease. 16. Assignment and Subletting. Lessee s is Lease or sublet any portion of the Premises. Any sublease or assi . • ent vio .tion of this provision shall be void. 17. Default. Failure by Les provisions of this Lease, w written notice fro Lease. Lessee s to the City. erform any of the covenants, conditions or al • - shall continue for a period of ten (10) days after the default, shall constitute a default and breach of this ity . mptly of any default not by its nature necessarily known 18. Access. After reasona otice from the City (except in the cases of emergency where no notice is required) the Lessee shall permit the City and its agents, employees and contractors to enter the Premises at all reasonable times to make repairs, alterations, improvements or inspections. This section shall not impose any repair or other obligation upon the City not expressly stated elsewhere in this Agreement. 19. Compliance with Laws, Rules and Regulations. Lessee shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force relation to or affecting the conditions, use, or occupancy of the leased premises. Lessee shall faithfully observe and comply with City rules and regulations. 20. Permits. Lessee shall, at its sole cost and expense, be responsible for obtaining any required permits and licenses necessary to perform the work and covenants of this Lease. Sound Cities Association 2025-2026 Lease Agreement Page 6 of 9 8 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: 21. Notices. All notices under this Lease shall be in writing and shall be effective when mailed by certified mail or delivered to the addresses listed below. Notices to Lessor shall be sent to: City of Tukwila ATTN: Mayor's Office 6200 Southcenter Boulevard Tukwila WA 98188 Notices to Lessee shall be sent to: Sound Cities Association ATTN: Executive Director 6300 Southcenter Blvd, Suite 206 Tukwila WA 98188 22. Termination. Either party may terminate this Agree outlined in Section 17 or at any time on or before th minimum of thirty (30) days written notice to the 23. Applicable Law; Venue: Attorneys' Fees. construed in accordance with the laws of the arbitration, or other proceeding is i parties specifically understand and ag The prevailing party in any suc on s enti if the other party is in default as p er party. on of this Lease by providing a eement shall be governed by and of Washington. In the event any suit, rce any term of this Agreement, the e' hall be in King County, Washington. ed to its attorneys' fees and costs of suit. 24. Authority of Lessee. T • he dividual executing this Lease on behalf of the Lessee represent and warr. s e : my authorized to execute and deliver this Lease and upon executi. -as. binding upon the Lessee in accordance with the terms herein. 25. Waiver and Forbea waiver by the City of any breach or default by the Lessee of any of its obligations or c. .nts herein shall be deemed to be a waiver of any subsequent breach or default of the same or any other obligation or covenant, nor shall forbearance by the City to seek remedy for any break or default of the Lessee be deemed a waiver by the City of its rights and remedies with respect to such breach or default. 26. Entire Agreement - Modification. This Lease Agreement together with all exhibits or addenda expressly incorporated herein by reference and attached hereto shall constitute the whole agreement between the parties. There are no terms, obligations, covenants or conditions other than those contained herein. Except as otherwise provided, no modification or amendment of this Lease Agreement shall be valid or effective unless evidenced by an agreement in writing signed by both parties. 27. Severability and Survival. If any term, condition or provision of this Lease is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. Sound Cities Association 2025-2026 Lease Agreement Page 7 of 9 9 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: CITY OF TUKWILA SOUND CITIES ASSOCIATION By: By: Thomas McLeod Mayor Attest: By: Andy YuonCity Clerk Approved as to form: By: City Attorney Executive Director /s Sound Cities Association 2025-2026 Lease Agreement Page 8 of 9 10 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 STATE OF WASHINGTON ) ss. COUNTY OF KING Agreement Number: I certify that I know or have satisfactory evidence that Allan Ekberg is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowle• d it as the Mayor of the City of Tukwila to be the free and voluntary act of such party for the -s and purposes mentioned in the instrument. Dated this_ _ day of , 2022. [Stamp or Seal] STATE OF WASHINGTON COUNTY OF KING Print Name) t ntment expires I certify that I kno hay- .atisfactory evidence that Deanna Dawson is the person who appeared before me, and sai. .n acknowledged that she signed this instrument, on oath stated that she was authorized to execute the instrument and acknowledged it the Executive Director of Sound Cities Association to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated this_ _ day of , 2022. [Stamp or Seal] Notary Public for Washington (Printed or Stamped Name of Notary) Residing at My appointment expires: Sound Cities Association 2025-2026 Lease Agreement Page 9 of 9 11