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11.1 SR 11-04-2024City of Elk - River To City Council Meeting Date November 4, 2024 Item Description FT Center Leased Space Rental Rate Request for Action Item Number 11.1 Prepared By Joe Stremcha, Business Services Director/Assistant City Administrator Reviewed by Cal Portner Tina Allard Action Requested Discuss the FT Center Leased Space as the 2022-24 contract will expire in December. Background/Discussion The City Council has a standing agreement with Elk River Youth Hockey Association for use of various leased spaces in the facility. The City Council was provided this information on September 16, 2024, and the MFAC was invited to participate in future discussions as directed. Financial Impact The various facility rates have a direct impact on the FT Center budget. Mission/Policy/Goal Responsible for every dollar - good stewards. Attachments I. 2022-31 ERYH Lease 2. FT Center Lease Space Rates 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 106 Agreement 2022-31 LEASE AGREEMENT This LEASE AGREEMENT ("Lease") is made and effective as of G 17 , 2022, by and between the CITY OF ELK RIVER, a Minnesota municipal corporation (hereinafter referred to as the "Landlord") and ELK RIVER YOUTH HOCKEY ASSOCIATION (hereinafter referred to as the "Tenant"). The Landlord and Tenant hereby agree as follows: ARTICLE 1— LEASED PREMISES Subject to the terms, covenants and conditions of this Lease, Landlord does hereby lease and let unto Tenant, and Tenant does hereby lease and take from Landlord, in the building (`Building") owned by Landlord located at 1000 School Street, Elk River, MN 55330, that space identified on Exhibit A attached hereto and incorporated herein, (hereinafter referred to as the "Leased Premises"). Tenant agrees to take and does take the Leased Premises in its "as is" condition. The Building and the Property are known as and hereinafter jointly referred to as the "Community Center". ARTICLE 2 — TERM OF LEASE A. The term of this Lease shall be for 24 months (hereafter referred to as the "Initial Term") upon the rentals and subject to the conditions set forth in this Lease, including Exhibit A attached hereto. B. Landlord shall have the right to terminate this Lease for any reason upon 30 days' written notice to Tenant. The notice to terminate shall state the date upon which the Lease is terminated and the Leased Premises must be vacated. Tenant shall vacate the Leased Premises on or before that date. Failure by Tenant to vacate the Leased Premises on or before the termination date shall entitle Landlord to enter the Leased Premises, remove all property of Tenant and cause the Leased Premises to be put into the condition and state of repair required by this Lease. Tenant, on demand, shall pay the Landlord's costs thereof. ARTICLE 3 - USE A. The Leased Premises shall be used by the Tenant solely for the purposes set forth on Exhibit A hereto and for no other purpose without the prior written consent of the Landlord. B. The Leased Premises shall not be used in violation of any applicable federal, state, or local law, ordinance, rule, or regulation, and Tenant shall comply with the same at its sole cost and expense. C. Notwithstanding anything to the contrary herein, Tenant shall have the reasonable non-exclusive right to use the Common Areas (as hereinafter defined) of the Property and the Building with the Landlord, its employees, agents and invitees, as may from time to time exist, including but not limited to the parking facilities, sidewalks, driveways, access ways, common hallways, walkways, landscaped areas and public restrooms ("Common Areas") and the Landlord shall have the full control, management and direction of the Common Areas. The Landlord Page 39 of 106 reserves the right at any time and from time to time to reduce, increase, enclose or otherwise change the size, location, layout and nature of the Common Areas. D. Tenant covenants and agrees that Tenant shall not handle, use, store or dispose of any flammables, explosives, hazardous or toxic wastes or materials (as may be defined by Federal or State Law), on or about the Leased Premises or the Property, without Landlord's prior written consent (which consent may be withheld or denied for any or no reason). E. Tenant shall not perform any act or carry on any practice that may damage the Leased Premises or any other part of the Property. F. Tenant shall keep the Leased Premises safe, clean and in as good condition and repair as they were in at the time Tenant took possession of same, reasonable wear and tear excepted. G. Tenant agrees that it and its guests, employees, contractors, invitees and all others connected with the Tenant's operations at the Leased Premises shall abide by all reasonable rules and regulations from time to time established by the Landlord by written notice to the Tenant with respect to the Community Center and/or the Common Area portions thereof. H. Tenant shall keep all trash, refuse, and the like in covered metal or plastic cans, which cans shall be kept within the Leased Premises at all times, unless an exterior storage area is specifically designated for Tenant's use by Landlord in which event the Tenant shall deposit all trash, refuse and the like in the exterior storage area. Tenant shall ensure that the Leased Premises are secure at all times. J. If Tenant shall fail to keep and preserve the Leased Premises in the state of condition required by the provisions of this Lease, Landlord may at its option put or cause the same to be put into the condition and state of repair agreed upon, and in such case the Tenant, on demand, shall pay the cost thereof. ARTICLE 4 — RENT Tenant agrees to pay to Landlord as rent (hereinafter called "Rent") for the Leased Premises the amounts shown on Exhibit A attached hereto. ARTICLE 5 - NON -LIABILITY OF LANDLORD Except in the event of gross negligence or willful misconduct of Landlord, its agents, employees or contractors, Landlord shall not be liable for any loss or damage for failure to furnish heat, air conditioning, electricity, water, sprinkler system, sewer or gas service. Landlord shall not be liable for personal injury, death or any damage from any cause about the Leased Premises or the Community Center except if caused by Landlord's gross negligence or willful misconduct. ARTICLE 6 - INSPECTION The Landlord, its employees or agents shall have the right without any diminution of rent or other charges payable hereunder by Tenant to enter the Leased Premises at all reasonable times 2 Page 40 of 106 for the purpose of inspection, cleaning, repairing, testing, altering or improving the same or said Community Center, but nothing contained in this Article shall be construed so as to impose any obligation on the Landlord to make any repairs, alterations or improvements. Access by Landlord to the Leased Premises shall be preceded by 24 hours written or verbal notice by Landlord to Tenant, except in the event of an emergency. ARTICLE 7 —ALTERATIONS Tenant will not make any alterations, repairs, additions or improvements in or to the Leased Premises or add, disturb or in any way change any locks, plumbing or wiring therein without the prior written consent of the Landlord. ARTICLE 8 - ASSIGNMENT AND SUBLETTING Tenant agrees that Tenant does not have the right to assign, sublet, license or encumber this Lease, the Leased Premises, or any part thereof, whether by voluntary act, operation of law, or otherwise, without the specific prior written consent of Landlord in each instance. ARTICLE 9 - LOSS BY CASUALTY If the Community Center is damaged or destroyed by fire or other casualty, Landlord or Tenant shall have the right to terminate this Lease, provided it gives written notice thereof to the other party within ninety (90) days after such damage or destruction. ARTICLE 10 - WAIVER OF SUBROGATION Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by fire or any of the extended coverage or supplementary contract casualties, even if such fire or other casualty shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible; provided however, that this release shall be applicable and in force and effect only with respect to loss or damage occurring during such times as the releasing parry's policies shall contain a clause or endorsement to the effect that any such release would not adversely affect or impair said policies or prejudice the right of the releasing party to recover thereunder. Landlord and Tenant agree that they will request their insurance carriers to include in their policies such a clause or endorsement. If extra cost shall be charged therefor, each party shall advise the other of the amount of the extra cost, and the other party, at its election, may pay the same, but shall not be obligated to do so. ARTICLE 11- SURRENDER On the last day of the Term of this Lease or on the sooner termination thereof in accordance with the terms hereof, Tenant shall peaceably surrender the Leased Premises in good condition and repair. Page 41 of 106 ARTICLE 12 - HOLDING OVER Tenant will, at the expiration of this Lease, whether by lapse of time or termination, give up immediate possession to Landlord. If Tenant fails to give up possession the Landlord may pursue all remedies available to it for recovering possession of Leased Premises. ARTICLE 13 - INDEMNITY, INSURANCE AND SECURITY A. Tenant will keep in force at its own expense for so long as this Lease remains in effect public liability insurance with respect to the Leased Premises in which Landlord shall be named as an additional insured, in companies and in form acceptable tcp�idlord with a minimum combined limit of liability of Three Dollars (� aid insurance shall also ��lo- la]-z.z „ c� �'t provide for contractual liability coverag yen orsement. �'enant will further deposit with Landlord the policy or policies of such insurance or certificates thereof, or other acceptable evidence that such insurance is in effect, which evidence shall provide that Landlord shall be notified in writing thirty (30) days prior to cancellation, material change, or failure to renew the insurance. Tenant further covenants and agrees to indemnify and hold Landlord and Landlord's manager of the Community Center harmless for any claim, loss or damage, suffered by Landlord, Landlord's manager or Landlord's other tenants caused by any act or omission by Tenant or Tenant's members; or Tenant's failure to comply with any and all governmental laws, rules, —ardrrransesar-regalation&-appheabk-te-the-u-se-of the-Leaseed_ Premises and its occupancy. y B. Tenant shall be responsible for the security and safeguarding of the Leased Premises and all property kept, stored or maintained in the Leased Premises. Tenant shall maintain in force throughout the Term, insurance upon all contents of the Leased Premises, including that owned by others and Tenant's equipment and any alterations, additions, fixtures, or improvements in the Leased Premises acknowledged by Landlord to be the Tenant's. C. Landlord shall carry and cause to be in full force and effect a fire and extended coverage insurance policy on the Community Center, but not any contents owned, leased or otherwise in possession of Tenant. ARTICLE 14 - NOTICES All notices from Tenant to Landlord required or permitted by any provisions of this Lease shall be directed to Landlord postage prepaid, certified or registered mail, at 13065 Orono Parkway, Elk River, MN 55330. All notices from Landlord to Tenant required or permitted by any provision of this Lease shall be directed to Tenant, postage prepaid, certified or registered mail, at the Leased Premises and at: ARTICLE 15 - APPLICABLE LAW This Lease shall be construed under the laws of the State of Minnesota. 0 Page 42 of 106 IN WITNESS WHEREOF, this Lease has been duly executed by the parties hereto as of the day and year indicated above. LANDLORD: CITY OF ELK RIVER Aj Tina Allard, City Clerk TENANT: ELK RIVER YOUTH HOCKEY ASSOCIATION Name: Its: 5 Page 43 of 106 EXHIBIT A Leased Areas and Rent: 1. OFFICE: a. ERYHA will have exclusive use of the office area located in the West Locker Room (Room #126, 209 SQ/FT). 2. STORAGE (A): a. ERYHA will have exclusive use of the Storage Room in the East Locker Room Hallway, adjacent to the Coaches Room. (Room # 148,271 SQ/FT). 3. STORAGE (B): a. ERYHA will have exclusive use of the Storage Room in the East Locker Room Hallway, across from Girl's HS Locker room. (Room # NA, 238 SQ/FT). 4. TRAINING AREA: a. ERYHA will have exclusive use of the Training Area in Rear of Fieldhouse. (1800 SQ/FT) 90'x20'. SQ/FT I SQ/FT Rate Annual Monthly OFFICE STORAGE (A) 209 $ 8.00 $1,672.00 $139.33 271 $ 8.00 $2,168.00 $180.67 STORAGE (B) 238 $ 8.00 $1,904.00 $158.67 TRAINING AREA 1800 $ 8.00 $14,400.00 $1,200.00 TOTAL 2518 $ 8.00 $20,144.00 $1,678.67 A-1 Page 44 of 106 OFFICE SPACE o � D L i =OI-- I 0 0 ;a- ��--yy STORAGE A STORAGE B �K 'Yost JoL- o 0 10L tea.. • � � i d 3 :cj Ha TRAINING AREA Page 45 of 106 FT Center 2025 Rates Lease Space Ex: ERYHA Based on Current Rates Office 209 $139.33 Storage (A) 271 $180.67 Storage (B) 238 $158.67 Training Area 1800 $1,200 Total 2518 $1,678.67 1 SQFT = $0.667/Month ($8/year) Ex.a 1*Backcheck Based on Current Rates 3038 SQFT = $4,,294/Month 1 SQFT = $1.41/Month ($16.92/year) Ex: Metro Self Storage Based on Current Rates 250 SQFT = $389/Month w/ 1st two months 75 % off promotion 1 SQFT = $1.36/Month ($16.32/year) Ex: Self Storage MN Based on Current Rates 250 SQFT = $195/Month 1 SQFT = $.78/Month ($9.36/year)