4.5 SR 03-18-2024City of
Elk -
River
To
City Council
Meeting Date
March 18, 2024
Item Description
Lease Agreement: GLG Elk River, LLC - Spikes
Request for Action
Item Number
4.5
Prepared By
Zack Carlton, Community Development Director
Reviewed by:
Cal Portner
Tina Allard
Action Requested
Approve, by motion, the parking lot lease agreement with GLG Elk River, LLC - Spikes and Houles.
Background/Discussion
On February 5, 2024, the City Council reviewed a proposal from GLG EII< River, LLC (Spikes and Houles) to
lease a portion of the city -owned parking lot between Highway 10 and the railroad. Spikes proposes using a
portion of the parking lot for seasonal greenhouse, storage, and display of their products.
The City Council directed staff to work with the applicant and prepare a three-year agreement allowing
Spikes to use a portion of the city -owned lot in support of their business operations. City staff and our city
attorney drafted the attached agreement, which Spikes has reviewed and approved. GLG Elk River, LLC is
prepared to sign the agreement upon approval from the City Council.
Financial Impact
GLG Elk River, LLC will pay the city $6,000 per year for the three years of the lease agreement.
Mission/Policy/Goal
Attachments
Parking Lot Lease Agreement
The Elk River Vision
A avelcoming community with revolutionary and spirited resourcefulness, exceptional service, and community p p W E R E U A Y
engagement that encourages and inspires prosperity
229
PARKING LOT LEASE AGREEMENT
THIS LEASE AGREEMENT ("Agreement") is made on the day of
, 2024, ("Effective Date") by and between the CITY OF ELK RIVER, a
Minnesota municipal corporation, 13065 Orono Parkway, Elk River, MN 55330 ("City"), and
GLG Elk River, LLC, a Minnesota limited liability company, 5715 Blaine Avenue East, Inver
Grove Heights, MN 55076 ("Lessee").
WHEREAS, the City is the owner of real property in the City of Elk River, Sherbune
County, Minnesota, Parcel ID No. 75-00596-0020, which is currently a public parking lot ("Lot");
WHEREAS, Lessee is owner of property at 906 Highway 10, Elk River, MN 55330, Parcel
ID No. 75-00407-0030 ("Lessee Property") from which it operates Spikes & Houles Feed, Seed
and Pet Supply store;
WHEREAS, Lessee seeks additional space for a temporary green house, product display,
and additional customer parking ("Commercial Purposes") contemplated adjacent to the Lessee
Property; and
WHEREAS, the Lessee desires to rent approximately 10,500 SF of the Lot from the City,
as identified on Exhibit A ("Premises"), and the City desires to lease the Premises to the Lessee
for Commercial Purposes.
NOW, THEREFORE, the City and Lessee agree as follows:
1. LEASE OF PROPERTY. The City, in consideration of the rent, terms, and conditions of
this Agreement, does hereby exclusively lease unto Lessee, and Lessee does hereby rent, lease,
hire, and take from the City, subject to the terms and conditions of this Agreement, the Premises.
Lessee takes and rents the Premises from the City "as is" and "where is" without any liability or
obligation on the part of the City to make any alterations, improvements, or repairs of any kind or
nature, on or about said Premises.
2. TERM. The initial term of this Agreement ("Initial Term") shall be for a period of 3 years,
commencing on April 1, 2024, and ending on March 31, 2027.
3. RENT. Lessee hereby agrees to pay rent in the sum of Six Thousand and 0/100 Dollars
($6,000.00) per year for the Premises, payable on the first day of the month in monthly installments
of $500.00.
4. INSURANCE.
A. Lessee agrees to obtain and maintain during the term of this Lease the following
insurance coverage:
1. Worker's Compensation. The Lessee must maintain Workers'
Compensation insurance in compliance with all applicable statutes, rules, and regulations.
The policy shall also provide Employer's Liability coverage with limits of not less than
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$500,000 Bodily Injury each accident, $500,000 Bodily Injury by disease, policy limit, and
$500,000 Bodily Injury by disease, each employee.
2. General Liability. The Lessee must maintain an occurrence form
comprehensive general liability coverage. Such coverage shall include, but not be limited
to, bodily injury, property damage -- broad form, and personal injury, for the hazards of
Premises/Operation, broad form contractual liability, independent contractors, and
products/completed operations.
The Lessee must maintain aforementioned comprehensive general liability
coverage with limits of liability not less than $1,000,000 each occurrence; $1,000,000
personal and advertising injury; $2,000,000 general aggregate, and $2,000,000 products
and completed operations aggregate. These limits may be satisfied by the comprehensive
general liability coverage or in combination with an umbrella or excess liability policy,
provided coverage afforded by the umbrella or excess policy are no less than the underlying
comprehensive general liability coverages.
3. Automobile Liability. The Lessee must carry Automobile Liability
coverage. Coverage shall afford total liability limits for Bodily Injury Liability and
Property Damage Liability in the amount of $1,000,000 per accident. The liability limits
may be afforded under the Commercial Policy, or in combination with an Umbrella or
Excess Liability Policy provided coverage of rides afforded by the Umbrella Excess Policy
are no less than the underlying Commercial Auto Liability coverage. Coverage shall be
provided by Bodily Injury and Property Damage for the ownership, use, maintenance or
operation of all owned, non -owned and hired automobiles. The Commercial Automobile
Policy shall include at least statutory personal injury protection, uninsured motorists and
underinsured motorists coverages.
4. Lessee Property Insurance. The Lessee must keep in force for the duration
of the Lease a policy covering damages to its property at the Premises. The amount of
coverage shall be for the full insurable value and be sufficient to replace the damaged
property, loss of use and comply with any ordinance or law requirements.
5. Hazardous Materials Coverage. Lessee must carry sufficient coverage, to
the reasonable satisfaction of City, for damage caused by Hazardous Materials.
6. Excess Liability. Lessee shall also maintain an umbrella or excess liability
insurance policy with a combined single limit of $2,000,000.00 which provides coverage
in excess of all other coverages (except Workers' Compensation) required to be maintained
by Lessee under this Lease.
B. Additional Insured - Certificate of Insurance. The Lessee shall provide evidence of
the required insurance in the form of a Certificate of Insurance issued by a company (rated A or
better), licensed to do business in the State of Minnesota, which includes all coverages required in
this Paragraph. Lessee will name the City as an Additional Insured on the General Liability and
Commercial Automobile Liability Policies. The Certificate(s) shall also provide the coverage may
not be cancelled, non -renewed, or reduced without thirty (30) days prior written notice to the City.
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5. INDEMNIFICATION.
A. Lessee shall indemnify and save harmless the City against all liabilities, damages,
claims, fines, penalties, costs and other expenses, including all attorneys' fees, which may be
imposed upon, incurred by or asserted against the City by reason of the following, except for any
of the following that result from the grossly negligent or intentionally malicious act or omission
of the City or its agents:
1. any use or condition of the Premises or any part thereof,
2. any personal injury or property damage occurring on the Premises;
3. any negligence on the part of Lessee, Lessee's agents, contractors, licensees
or invitees;
4. any failure by Lessee, any agent or invitee of Lessee to comply with any
requirement of any governmental authority;
5. any prosecution or defense of any suit or other proceeding in discharging
the Premises or any part thereof from any liens, judgments or encumbrances created upon
or against the same by Lessee, any agent or invitee of Lessee or against Lessee's interest
in the Premises;
6. any proceedings in obtaining possession of the Premises after the
termination of this Lease by forfeiture or otherwise;
7. any litigation commenced by or against Lessee to which the City is made a
party without any fault on the part of the City;
8. any response costs, other damages and expenses (including attorneys' fees)
which may be imposed upon, incurred by or asserted against the City by reason of the use,
release, threatened release or disposal of Hazardous Wastes at the Premises by Lessee, any
agent or invitee of Lessee; and
9. any failure on the part of Lessee to perform or comply with any covenant or
agreement required to be performed or complied with by Lessee hereunder.
B. This indemnity does not cover matters arising out of the gross negligence or willful
misconduct of City. It is expressly understood that Lessee's obligations under this Section shall
survive the expiration or termination of this Agreement for any reason.
C. In case any action or proceeding is brought against City or its officials, agents,
employees, guests or invitees by reason of any such claim, Lessee, upon notice, will defend such
action or proceeding by responsible counsel selected by Lessee and reasonably acceptable to City.
6. ASSUMPTION OF RISK. The Lessee takes possession of the Premises under this Lease
subject to the usual hazards of storing personal property and equipment on a vacant lot, and agrees
to assume all risk of accidents to Lessee, and Lessee's guests, invitees, employees, and/or agents
in furtherance of the use of the Premises.
7. USE.
A. Lessee shall use the Premises solely for Commercial Purposes in connection with
its retail use of the Lessee Property.
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B. Lessee shall not store any flammable, explosive, toxic, hazardous (except for
sanitation chemicals), or dangerous materials on the Premises.
C. Lessee shall at all times keep and maintain the Premises in a neat, clean, and
sanitary condition, free from waste or debris, and shall remove, at Lessee's expense, all garbage
and refuse of any kind and shall neither permit nor commit any waste or nuisance thereon.
D. The Lessee shall not allow any activity that violates local, state, or federal law
including the unlawful presence, possession, or sale of controlled substances or firearms.
8. ASSIGNMENT AND SUBLEASE. Lessee will neither assign this Lease in whole or in
part nor sublease all or part of the Premises, without the consent of the City in its sole discretion.
Which approval will not be unreasonably withheld.
9. SIGNS. Lessee may install temporary (not permanently affixed to the ground) signs on
the Premises in accordance with all federal, state and local statutes, laws, ordinances, and codes.
10. REPAIRS, MAINTENANCE, AND ALTERATIONS.
A. Lessee will, at its sole cost and expense, maintain the Premises and which shall
include all repair, sweeping, striping, snow removal and all necessary improvements to the
Premises. Snow must be completely cleared from the Premises within 48 hours of a snowfall.
B. Lessee shall promptly notify the City of any conditions that might cause damage to
the Premises. The notice may be oral or in writing.
C. Lessee shall have the right to make alterations, additions, or improvements (the
"Alterations") to the Premises upon receiving written permission from the City.
D. Lessee will not allow any liens to be placed against the Property as a result of its
work on the Property.
11. END OF TERM. At the end of this Lease, Lessee will surrender the Premises in good
order and condition, ordinary wear and tear excepted. If Lessee is not then in default, Lessee may
remove from the Premises. This Lease shall terminate immediately if one of the following occurs:
A. Lessee ceases to own Lessee Property. Unless assigned or sold and the use of the
Premises remains the same or similar, and the Lessee and or assigns outlined in Sec. 8
of this agreement is in good standing and meeting the terms and conditions of this
Lease.
B. Lessee Property is no longer used for Commercial Purposes.
12. CITY'S ACCESS. City, its agents, employees, and contractors may enter the Premises
without notice to Lessee.
13. EVENTS OF DEFAULT. The following occurrences are "Events of Default":
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A. Lessee fails to pay rent within five (5) days after notice or demand from City;
B. Lessee vacates or abandons the Premises; or
C. Lessee breaches any of the other agreements, terms, covenants, or conditions which
this Lease requires Lessee to perform, if such breach continues for a period of thirty (30) days after
notice by City to Lessee or if such breach cannot reasonably be cured within thirty (30) days, then,
if Lessee commences to cure within said thirty (30) days and thereafter diligently prosecutes the
cure, Lessee shall have a reasonable time period to affect its cure.
14. REMEDIES. If any one or more Event of Default shall have happened and be continuing,
the City may:
A. Without terminating this Lease, re-enter and take possession of the Premises and
exclude Lessee from using the Premises until the Event of Default is cured with not less than five
(5) days' written notice to the Lessee;
B. Terminate the Term of this Lease and exclude Lessee from possession of the
Premises with not less than five (5) days' written notice to the Lessee; or
C. Take any action at law or in equity which may appear necessary or desirable to
enforce performance and observance of any obligation, agreement, or covenant contained herein.
15. MISCELLANEOUS.
A. Holding Over. Lessee must vacate the Premises no later than 11:59 p.m. on the last
day of the Lease. If Lessee remains in possession of the Premises after the end of this Lease with
permission from the City, Lessee will occupy the Premises as a Lessee from month -to -month,
subject to all conditions, provisions, and obligations of this Lease in effect on the last day of the
Term.
B. Binding Effect. This Lease will inure to the benefit of, the City of Elk River and
will be binding upon, City's successors and assigns. This Lease will inure to the benefit of, GLG
Properties, LLC and will be binding upon, the Lessee's successors and assigns so long as the
succession or assignment is permitted under this Agreement.
C. Taxes. Lessee shall pay all personal and real estate taxes on the Premises if this
Agreement causes the Property to be taxed. The City shall invoice Lessee for any such amounts
and Lessee shall have thirty (30) days to pay the same.
D. Entire Agreement; Modification. This written Agreement constitutes the complete
agreement between the parties and supersedes any prior oral or written agreements between the
parties regarding the Property. There are no verbal agreements that change this Agreement and no
waiver of any of its terms will be effective unless in a writing executed by the parties. The City
and Lessee may only amend the terms of this Lease in writing signed by both parties.
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E. Governing Law. This Agreement has been entered into in the State of Minnesota
and shall be governed by and construed in accordance with the laws of the State of Minnesota.
Any litigation or mediation regarding this matter shall be venued in Sherbune County, Minnesota.
F. Notices. All notices required herein shall be in writing and delivered personally or
mailed to the addresses provided below and if mailed, are effective as of the date of mailing:
TO City: City of ELK River
Attn: City Administrator
13065 Orono Parkway
Elk River, MN 55330
with copy to: Campbell Knutson, P.A.
Attn: Elk River City Attorney
Grand Oak Office Center I
860 Blue Gentian Road, Suite 290
Eagan, MN 55121
TO Lessee: GLG Elk River, LLC
5715 Blaine Avenue East
Inver Grove Heights, MN 55076
G. Recording of Agreement. This Agreement may not be recorded against the Property
or any other property held by the City.
H. Counterparts. This Agreement may be executed in one or more counterparts each
of which when so executed and delivered shall be an original, but together shall constitute one and
the same instrument.
(SIGNATURES ARE ON THE FOLLOWING PAGE)
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IN WITNESS WHEREOF, Lessee has executed this Agreement the day of
, 2024.
[print name]
Its
IN WITNESS WHEREOF, City has executed this Agreement the day of
, 2024.
CITY OF ELK RIVER
And
John J. Dietz, Mayor
Tina Allard, City Clerk
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