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ORDINANCE NO 14;974 3 12
No AN ORDINANCE TO APPROPRIATE MONIES FOR EXECUTION
1 OF A LEASE AGREEMENT WITH METROCENTRE IMPROVEMENT
DISTRICT NO. 1 OF LITTLE ROCK, ARKANSAS, FOR
'k PURPOSES OF BUILDING PARKING DECKS IN DOWNTOWN
LITTLE ROCK; AND FOR PURPOSES OF APPROVING A
ro LEASE AGREEMENT BETWEEN METROCENTRE IMPROVEMENT
O DISTRICT NO. 1 AND THE CITY OF LITTLE ROCK;
? AND FOR OTHER PURPOSES.
v
WHEREAS, an appropriation was made in Ordinance No.
v
14,802, of 1985 by the Board of Directors in the sum of
$400,000.00 to be used for the building of parking decks in
downtown Little Rock; and
WHEREAS, interest on this $400,000.00 appropriation of
$40,000.00 will have accrued by the end of 1985; and
WHEREAS, an agreement is being entered into between the
City of Little Rock and Metrocentre Improvement District No. 1 in
which the City agrees to provide $500,000.00 for the purchase of
land upon which to build the south parking deck; and
WHEREAS, the City and Metrocentre Improvement District
No. 1 have agreed to enter a lease agreement to effect the
building of this parking deck and to set forth the terms to be
followed during the life of the lease.
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS
OF THE CITY OF LITTLE ROCK, ARKANSAS:
SECTION 1. The sum of $60,000.00 is appropriated by the
Board of Directors and it is to be used with the $40,000.00
interest from the appropriation made in Ordinance No. 14,802, for
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1 a total appropriation of $500,000.00 to be used by the City for
2 the purchase of land for the location of the south parking deck.
3
4 SECTION 2. The terms of the agreement between the City
5 of Little Rock and Metrocentre Improvement District No. 1 are set
6 forth as follows:
7
8 LEASE AGREEMENT
9 This Lease Agreement is entered into on the date shown at
10 the end hereof, by and between the City of Little Rock, Arkansas
11
12 (Lessor), and Metrocentre Improvement District No. 1 of Little
13 Rock, Arkansas (Lessee), an Arkansas central business improvement
14 district.
15
16 1. Definitions. In addition to words and terms
17 elsewhere defined in this Lease Agreement, the following words
18 and terms shall have the following meanings:
19
20 (a) "Additional Rent" shall mean amounts accrued
21 and paid pursuant to Section 5(c) hereunder;
22 (b) "Basic Rent" shall mean the annual amount
23
24 computed pursuant to Section 5(a) hereunder;
25 (c) "Bonus Rent" shall mean the annual amount
26 required to be paid pursuant to Section 5(d) hereof;
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28 (d) "Capital Rent" shall mean the annual amount
29 accrued pursuant to Section 5(e) hereunder, and paid
30 pursuant to Section 6 hereunder;
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32 (e) "Debt Service" shall be the amounts of
33 principal and interest required to be paid by Lessee
34 pursuant to the terms of the Indenture of Trust
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1 relating to Lessee's Special Assessment and Revenue
2 Bonds dated November 1, 1985; and
3
4 (f) "Net Revenues" shall mean gross annual
5 parking revenues received from operation of the
6 parking decks plus current year Lessee improvement
7
8 district assessments, less Lessee operation and
9 maintenance expenses (including the $20,000 Basic Rent).
10 2. Lease of Premises. For and in consideration of the
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12 rent reserved and the covenants herein, and subject to the
13 conditions set forth herein, Lessor leases to Lessee and Lessee
14 leases from Lessor the following premises in Pulaski County,
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16 Arkansas:
17 Parcel "A ": Lots 7, 8, 9, 10, 11 and 12,
18 Block 7, Original City of Little Rock;
19 Parcel "B ": West one -half of Block 3,
20 Original City of Little Rock;
21 which premises shall hereinafter be collectively referred to as
22 the "Leased Premises ".
23
24 3. Use of Premises. Lessee shall use and operate the
25 Leased Premises in connection with the construction and operation
26 of public parking facilities and related facilities and for no
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28 other purpose without the prior written consent of Lessor, which
29 shall not be unreasonably withheld.
30 4, Term. The term of this Lease is for fifty years and
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32 2 months beginning on November 1, 1985 and ending December 31,
33 2035.
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1 5. Rent. For the rights granted hereunder, Lessee shall
2 pay to Lessor a rental calculated annually and payable quarterly
3
4 on or before January 10, April 10, July 10, and October 10 of
5 each year, calculated as follows:
6 (a) Basic Rent. No rent shall be payable until
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8 commercial operation of the parking decks has commenced. For the
9 first five years after commencement of commercial operation,
10 Basic Rent shall be $10 per year. For each year thereafter,
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12 Basic Rent shall be computed as $20,000 per year.
13 (b) Payment of Basic Rent. Basic Rent shall be
14 payable with other parking deck operation and maintenance
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16 expenses, that is, the flow of funds will be, first, to Debt
17 Service and, second to operation and maintenance of the parking
18 deck; including the $20,000 Basic Rent.
19
20 (c) Additional Rent. Commencing with the sixth year
21 after commerical operation of the parking decks has commenced,
22 Additional Rent shall accrue in the amount of $45,000 per year.
23
24 Additional Rent shall be payable after Debt Service and operation
25 and maintenance expenses have been paid (including the $20,000
26 Basic Rent), based on the percentage by which Net Revenues cover
27
28 Debt Service, as follows:
29 Additional Percentage
30
Rent Coverage
31 Additional $20,000 payable when percentage equals 1108
32 Additional $20,000 payable when percentage equals 1158
Additional $ 5,000 payable when percentage equals 1258
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34 To the extent that Additional Rent accrues but is not
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payable due to a percentage of coverage insufficient to require
payment of Additional Rent as described above, such accrued but
unpaid Additional Rent shall be deferred and paid in later years,
as follows:
Accrued but unpaid Additional Rent shall be paid in any
year in which the balance of Net Revenues less Debt Service
exceeds $50,000, in the annual amount of such excess for such
year.
(d) Bonus Rent. If Net Revenues exceed one hundred
and thirty -five percent (1358) of Debt Service, Bonus Rent equal
to two percent (28) of gross parking revenues shall be payable.
If Net Revenues exceed one hundred and forty -five (1458) of Debt
Service, Bonus Rent equal to three percent (38) of gross parking
revenues shall be payable.
(e) Capital Rent. For the first five years after
commencement of commercial operation of the parking decks,
Capital Rent in the annual amount of $65,000 shall accrue.
Capital Rent shall not be payable in these years, except at the
sole option of Lessee. Capital Rent may be paid in whole or in
part at any time at the sole option of the Lessee. Any accrued
but unpaid Capital Rent shall be included in the option price
calculated pursuant to Section 6 hereof at the time such option
is exercised.
6. option to Purchase. Lessee shall have the option to
purchase the Leased Premises at any time on or before the
expiration of the lease term. Lessee shall exercise its option
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by giving written notice thereof to Lessor not later than sixty
days prior to the date on which it intends to purchase the Leased
Premises.
(a) The option price for Parcels A and B during each
of the following years shall be as follows:
Year
1985 through December 31, 1998
1999 through December 31, 2011
Base Amount
$1,150,000
$1,150,000 plus the lesser
of (a) 58, compounding
annually, or (b) the Consumer
Price Index for all urban
expenditures, compounding
annually;
provided, however, that to determine the option price in any
given year, the base amount calculated above shall be increased
by all accrued but unpaid Basic Rent, Additional Rent and Capital
Rent, and further provided that the base amount shall be reduced,
if the Lessor grants, leases, sells, bargains or conveys the east
one -half of Block 3, original City of Little Rock, at a price
exceeding $500,000, by the amount of excess, or in the case of a
lease, by an amount equal to ten (10) times the average annual
lease payments to be received from said land over the term of
said lease.
(b) The option price for the years 2012 through 2035
shall be based on an appraisal of the property to be made in the
year 2012, as follows:
Lessee, at its expense, and Lessor, at its expense,
shall each employ an appraiser to evaluate the Leased
Premises. If an agreement between Lessor and Lessee
concerning the appraised value cannot be reached, a
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1 third appraiser will be retained by the two appraisers
2 with the costs to be shared equally between the
parties. In such a case, the appraised value shall be
3 the average of the three appraisals.
4 The appraised value obtained pursuant to this paragraph
5
6 (b) shall be increased or decreased, as the case may be, to
7 determine the option price, in the same manner described in
8
paragraph (a) above.
9
10 (c) As an alternative to the purchase option granted
11 pursuant to paragraphs (a) and (b) above, Lessee may purchase
12 Parcels A and B separately, at any time, provided Parcel A is
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14 purchased first. In such a case, the option price for Parcels A
15 and B shall be determined as follows:
16 Parcel A: 43.588 times the option price calculated
17 pursuant to paragraph a or b, above as
18 applicable;
19 Parcel B: 56.428 times the option price calculated
20 pursuant to paragraph a or b, above, as
applicable.
21
22 7. Utilities. Lessee shall pay all charges for gas,
23 electricity, light, heat, power, water, sewer and telephone and
24 other utility services supplied to or used in connection with the
25
25 Leased Premises, which utilities shall be separately metered, and
27 shall indemnify Lessor against any liability therefor.
28 8. Repairs. Lessee, at its expense, shall make all
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30 repairs necessary to maintain the Leased Premises in good
31 condition. Lessee, at its expense, shall make all other repairs
32 and do all other things to maintain all improvements currently,
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1 existing or hereafter placed on the Leased Premises in good
2 condition. Lessee shall not commit nor permit waste.
3
4 9. Mechanic's Liens. Lessee shall not permit mechanic's
5 or materialman's liens or other similar liens to be imposed on
6 any or all of the Leased Premises.
7
7 10. Alterations. No alteration, addition or improvement
9 to the Leased Premises shall be made by Lessee without the prior
10 written consent of Lessor, which shall not be unreasonably
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12 withheld. As a condition precedent to consent, Lessor may
13 require a contractor's bond with surety thereon and other
14 reasonable safeguards. Lessee shall provide Lessor, within
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15 thirty days after completion, with a copy of the plans of such
17 alterations, additions or improvements, as constructed, if such
18 plans are readily available.
19
20 11. Liability Insurance and Indemnity. Lessee, at its
21 expense, shall maintain in full force and effect comprehensive
22 general liability insurance with respect to the Leased Premises
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24 with both Lessor and Lessee as named insureds, with no less than
25 $1,000,000.00 combined single limit of liability per occurrence.
26 Lessee shall indemnify and hold Lessor harmless of and from any
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29 loss, expense or damage by reason of Lessee's operations on the
29 Leased Premises, except as may be caused by Lessor's negligence.
30 12. Fire Insurance. Lessee, at its expense, shall
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32 maintain in full force and effect insurance against loss or
33 damage by fire and extended coverage (including sprinkler
34 leakage, vandalism and malicious mischief) covering the buildings
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1 and improvements currently existing or hereafter placed upon the
2 Leased Premises, in an amount at least equal to full replacement
3
4 cost. Lessee, at its expense, shall maintain in full force and
5 effect fire and extended coverage insurance on its leasehold
6 improvements, machinery, equipment, and contents situated on the
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8 Leased Premises.
9 13. Fire and Other Damage. If any portion of the
10 building, structure or improvements of which the Leased Premises
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12 is a part is damaged or destroyed by fire or other casualty,
13 Lessee shall forthwith give notice thereof to Lessor, and Lessee
14 shall, at its expense, forthwith repair, restore or replace the
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16 damaged or destroyed improvements, and complete the same as soon
17 as reasonably possible to the condition they were in prior to
18 such damage or destruction, except for such changes in design or
19
20 materials as may then be required by law. To the extent that the
21 proceeds of insurance are insufficient to pay the entire cost of
22 making such restoration, Lessee shall bear such costs.
23
24 14. Compliance With Law. Lessee, at its expense, shall
25 comply with all laws, orders and regulations of governmental
26 authorities, and with any direction of any public officer,
27
28 pursuant to law, which shall impose any duty upon Lessor or
29 Lessee with respect to the Leased Premises.
30 15. Right of Entry. Lessor may enter the Leased
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32 Premises, during normal business hours, for the purpose of
33 inspecting same and performing any work which Lessor elects to
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undertake made necessary by reason of Lessee's default under the
terms hereof.
16. Assignment and Subletting. This lease shall not be
assigned nor the Leased Premises sublet without the prior written
consent of the Lessor, which shall not be unreasonably withheld.
Such assignment or subletting shall not affect or alter Lessee's
obligations hereunder. Lessee shall have the right to assign or
sublease to an affiliate, subsidiary or parent company without
Lessor's prior written consent.
17. Condemnation. In the event of the taking of all or
a part of the Leased Premises by the exercise of eminent domain,
the respective rights of Lessor and Lessee to compensation for
the taking shall be those provided by law at the time of the
taking. If, as a result of the taking, the Leased Premises are
no longer suitable for use by Lessee for the purposes leased,
this lease shall terminate and Lessee's obligation to pay rent
shall terminate as of the date of taking. If the taking is
partial, and, if in Lessee's sole determination such taking does
not render the Leased Premises unsuitable for use by Lessee for
the purpose leased, this lease shall continue in full force and
effect, without reduction in rent
to condemn the Leased Premises.
Lessor hereby covenants not
18. Subordination. Lessor hereby subordinates this
lease to any mortgage or encumbrance which the Lessee may have
placed, or may hereafter place, upon the Leased Premises
specifically including but not limited to, the lien created under
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the Indenture of Trust relating to Metrocentre's Special
3z2
Assessment and Revenue Bonds dated November 1, 1985. Lessor
shall execute any instrument which may be deemed necessary to
further render any such mortgage or encumbrance, whenever made or
recorded, superior and prior to this lease.
19. Surrender of Premises. On termination of this lease
in course or by Lessor's action, Lessee shall surrender the
Leased Premises in as good condition as they were in at the
beginning of the term hereof, reasonable wear and tear excepted.
All additions, fixtures and improvements shall become the
property of Lessor. Any personal property of Lessee, including
but not limited to machinery and equipment shall remain the
property of Lessee. Lessee shall repair any damage to the Leased
Premises caused by the removal of any of its property and shall
replace any portion of the Leased Premises altered by the removal.
Upon Lessee's failure to surrender the Leased Premises, Lessee,
in addition to the damages otherwise recoverable, shall be liable
to Lessor for all damages that Lessor sustains directly caused by
Lessee's failure to surrender, including damages awarded any
succeeding tenant against Lessor based on Lessor's failure to
deliver possession of the Leased Premises to the succeeding
tenant.
20. Default by Lessee. Upon Lessee's failure to pay any
rent thirty days after same becomes due or upon Lessee's failure
to observe or perform any of the other conditions, agreements or
provisions hereof after Lessor shall have given Lessee notice in
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1 writing of such failure on.the part of Lessee and Lessee shall
2 not have remedied such failure within thirty days after giving of
3
4 such notice, Lessor may:
5 (a) Take possession of the Leased Premises and
6 lease or rent same for the account of Lessee upon such
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8 terms as may be acceptable to Lessor, and apply the
9 proceeds received therefrom, after paying the expenses
10 thereof, toward the payment of the rent which Lessee
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12 herein is obligated to pay hereunder and collect the
13 balance thereof from Lessee; or
14 (b) Take possession of the Leased Premises and
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16 collect from Lessee all damages sustained by reason
17 of Lessee's default; or
18 (c) Terminate forthwith all Lessee's rights
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20 hereunder; or
21 (d) Pursue any remedy or remedies which may be
22 available at law or in equity.
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24 21. Lessor's Right to Perform. If Lessee shall be in
25 default hereunder, Lessor may cure such default on behalf of
26 Lessee, in which event Lessee shall reimburse Lessor for all sums
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28 paid to effect such cure.
29 22. Lessee to Provide Audited Financial Statements.
30 Lessee shall annually provide Lessor with audited financial
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32 statements concerning the operations of the parking decks.
33 23. Other Rights of Lessor. Should bankruptcy,
34 insolvency, receivership proceedings or assignment for the
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1 benefit of creditors of any kind be instituted by or against
2 Lessee or should Lessee's interest in this lease be sold under
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4 execution or other legal process or devolve or pass by operation
5 of law to any other person or corporation without the prior
6 written consent of Lessor, then, at the option of Lessor, that
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8 shall be considered a breach of the terms and conditions of this
9 lease, and Lessor may pursue the remedies provided for herein.
10 24. Notices. Notices hereunder shall be given in
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12 writing, first class mail, postage prepaid, to:
13 LESSOR:
14 City of Little Rock, Arkansas
15 City Hall
16 500 West Markham
Little Rock, Arkansas 72202
17 Attention: Director of Finance and Administration
18 LESSEE:
19
20 Metrocentre Improvement District No. 1 of
Little Rock, Arkansas
21 Suite 307, Hall Building
22 Little Rock, Arkansas 72201
Attention: Executive Director
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24 25. Performance by Parties. Time is of the essence as
25 to each of the terms and conditions herein to be performed by
26 either party hereto. The failure to insist upon performance in
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28 any one or more instances shall not be a waiver of the right
29 thereafter to insist upon full performance. Receipt by Lessor of
30 rent with knowledge of the breach of the terms and conditions
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32 hereof by Lessee shall not be deemed a waiver of such breach.
33 The failure of either party to exercise any rights hereunder
34 shall not be deemed a waiver of such rights.
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26. No Covenant Concerning Assessments. Anything in
this Agreement to the contrary notwithstanding, no provision
herein contained shall constitute an obligation or covenant of
the Lessee to raise assessments charged to the property owners
within the jurisdiction of Lessee..
27. Lessor Exempt from Lessee Assessments. Because of
the concessions Lessor has made on rent during the first five
years of this lease, the Lessor will be exempt from, and shall
not be required to pay improvement district taxes on the Leased
Premises levied by Lessee on property owners within the
jurisdiction of Lessee during the term of this Agreement.
28. Covenants Running with the Land. Lessee
acknowledges the covenants running with the land contained in a
certain Memorandum between the United States Department of
Housing and Urban Development and the Little Rock Housing
Authority, dated September 8, 1978, and agrees that all rentals
and payments received hereunder will be applied or used in a
manner consistent and appropriate thereto.
29. Amendment. This Lease Agreement may be amended at
any time after the payment
mutual consent of both the
30. Separability.
part of a provision hereof
to the particular item, an
entire lease.
in full of Debt Service with the
Lessor and Lessee.
In the event that any provision or
is held invalid, it shall be limited
d shall not operate to invalidate the
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31. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of
the parties hereto subject to the provisions of paragraph 14.
32. Execution. This instrument has been executed in
duplicate.
33. Law. This Agreement shall be governed by the law of
Arkansas.
34. Paragraph Headings. Section headings are for
convenient reference only and shall not in any way limit the
substance thereof.
EXECUTED this 18th day of October 1985.
CITY OF LITTLE ROC KANSAS
BY:
TITLE:
ATT� T:
CIT CLERK
ATTEST:
TITLE:
326
METROCENTRE IMPROVEMENT
DISTRICT NO. 1 OF LITTLE ROCK,
ARKANSAS yy�
6%�n,n„a i� o : (JiYW t. X08 9`^1
YBYY:
TITLE:
SECTION 3. All laws and parts of laws inconsistent
herewith are hereby repealed.
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PASSED: October 18, 1985
ATTEST-
CITY LERK JA ZECH
A
.• K STODOLA
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APPROVED:
MAYOR THOU S A. PRINCE
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