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HomeMy WebLinkAboutPR 11971: LEASE AGREEMENTinteroffice MEMORANDUM To: From: Date: Subject: Mayor, City Council, City Manager k,~ / Mark T. Sokolow, City Attorney / Z~ ~ Judith S. Rawls, First Assistant City Attorney November 7, 2002 P. R. No. 11971; Council Meeting of November 12, 2002 Attached is P. R. No. 11971 authorizing a lease agreement of the premises at Lots numbered Twenty-one, Twenty- two, Twenty-three and Twenty-four (21, 22, 23 & 24) in Block Number One Hundred Thirty-three (133) of the City of Port Arthur, Jefferson County, Texas between the City of Port Arthur and Mardi Gras of Southeast Texas, Inc. It is substantially similar to a 1997 lease that the City has with Mardi Gras for lots 13, 14, 15 and W. 5.5' of lot 16 in block 130. This was tabled at the last meeting. I changed the lease term from November 1, 2002 October 31, 2022 t__qo January 1, 2003 - December 31, 2023. I am also attached a copy of the November 1, 2002 correspondence of Mardi Gras. MTS/ts Attachment cc: Mardi Gras of Southeast Texas ATTN: Joseph Richard 3830 Hwy 365 Port Arthur, TX 77642 November 1, 2002 of southeast texas, inc. Port Arthur City Council City of Port Arthur 444 4th St. Port Arthur, TX 77640 Re: P. R. No. 11971 City Council Meeting of October 29, 2002 Dear Mayor and Council Members, We appreciate the Council's time in considering our request. During the meeting, there were comments made that need clarification. · A staf6ment was made that the 601 Procter Street property lease between Mardi Gras and the City is detrimental to the City. Here is the history. In 1993, the property was in the process of being demolished by the then private owner. As a result of a fire and in the interest of public safety, the Fire Department halted demolition and that action became a severe controversial issue between the owner and the City. The City and owner were unable to resolve the dispute and the City asked Mardi Gras to step in, buy the property and donate it to the City. We came to an agreement with the owner, paid the owner off and donated the property to the City. In addition, there were approximately twenty citizens that had filed claims for a refund of monies they paid in advance to the owner for salvage. Mardi Gras also settled these claims to avoid litigation. Eventually the city had the building demolished at its expense. This situation was costly to the City and Mardi Gms but it eliminated an unpleasant eyesore. Because of Mardi Gras involvement, we were gratefully granted right of first refusal (in the property deed) should we find a use for it. Later, we requested and received approval to construct the present float den that we donated to the City in return for a 25 year lease ~ $1.00 per year. Mardi Gras is responsible for maintenance and insurance. Today, most people agree that the float den has helped improve the appearance of downtown and of course Mardi Gras considers it a needed and valuable property for its use. · A statement was made that the City absorbs Mardi Gras event expenses. Mardi Gras pays for all overtime with benefits and equipment needed by the City with the exception of City owned equipment such as trash containers and street cleaning equipment. We do not pay for time in advance preparation when there is no overtime. We recognize that managemenffdepartment head personnel spend time during normal working hours for advance planning and preparation. In the past, the City has felt that this is a responsibility it has as most city governments do. We observe that city employees generally have a positive attitude and do the best they can in making this a quality event. · A statement was made that the City doesn't get anything out of Mardi Gras. Generally, area citizens are proud of the event. It has attracted millions of visitors to the area. It was and continues to be a major catalyst for downtown property improvement. Mardi Gras makes available at no charge its fencing and barricades to needy non-profits that sponsor events in downtown. Mardi Gras paid for the upgrade to the electrical equipment at the stage area. It also promotes commerce throughout the year and instills a sense of pride in our community. Mardi Gras is committed to paying one-half the cost of the pending stage cover for the Procter Street Pavilion. to page 2 - 3830 Hwy. 365 · Port Arthur, Texas 77642 ,~ (409)721-8717 · Fax (409)721-8700 page 2 · A statement was made that Mardi Gras is wealthy and makes too much money. Mardi Gras, a 504 C (4) non-profit organization substantially contributes to nineteen 501C (3) organizations that put up the seed money for start-up in 1992. These are all located in Port Arthur and are the legal owners of Mardi Gras of Southeast Texas, Inc. It has an unpaid staff and depends solely on volunteers with the exception of City employees. It takes hundreds of volunteers working thousands of hours to stage the event. It is mainly for this reason we operate profitably along with support from private business. We maintain a reserve fund that surely will eventually be needed considering possible catastrophic weather. While these organizations have considered tapping the reserve for their own use, they have chosen to maintain the fund. A case study is the Galveston Mardi Gras. Enclosed is information that reflects Galveston's financial situation in connection with that event. Last year the City of Galveston (tax payers) lost $350,000 on Mardi Gras. Note that ticket prices are double Port Arthur's and a free night is not offered. Mardi Gras Southeast Texas has not increased prices in years. (see enclosure-source of information from Galveston newspaper) Not mentioned at the Council but an area of past contention is the Mardi Gras policy that everyone must pay when entering the entertainment area unless that person is a Mardi Gras volunteer. We feel this is a needed policy and continues to be abused. Mardi Gras board members and family members are also required to pay. City officials performing official City business are not required to pay when arrangements are made in advance with Mardi Gras or the City coordinator, Dr. Thigpen. Mardi Gras will then provide passes to Dr. Thigpen for officials. Should City Council want additional information or there are other issues to be discussed, we are available at your convenience. Respectfully, Floyd Marceaux, President Jdseph Richard, Treasurer cc:CityManager cc: City ARorney cc:CitySecretary Galveston slashes Mardi Gras budget !Date: 10/27/02 1:13:29 PM Central Standard Time From: d u_b4243 _5_@ y a h_o_o, c _o_m Reply-to: d ub42435~h20_0_ _0. ne~ iTc: benii@portarthur.net, F_marcea~aol.com_ Thousands slashed from Mardi Gras budget By Richard Massey The Daily News Published October 27, 2002 GALVESTON -- City councilman Johnny Smecca announced Friday that about $115,000 has been shaved off the Mardi Gras budget. The cuts wer~ '~nade in the area dedicated to essential city services: public safety, sanitation, traffic control and emergency operations. The preliminary budget is $600,000, down from last year's figure of $715,000. The cuts are not expected to compromise the safety of the thousands who come here each year to ddnk, party and jockey for beads. The annual push to secure public safety and entertainment arrangements for Mardi Gras is in full swing, as city officials and park board staffers are solidifying the budget, sponsors and entertainment lineup. The event, which will celebrate the~3Lnfnr~,sts of the .. world, is expected to attract up(~Ypeople to ~'~ the island over two weekends. Smecca, who serves as council representative to the park board, is working with city officials to create a tight budget that still meets security and sanitation needs. This is the first year the park board would pay for all expenses and receive all revenues. The city will front the money for city services and be compensated shortly after the event by the park board. In November, the city and the board are supposed to ratify an agreement outlining the reimbursement terms. The agreement cedes $1 of ticket sales -- projected to generate $60,000 -- back to the city. The money is to be used to provide city services for smaller events that focus on the local community. "At this point, we've put a lot of work into making this happen," said Smecca. He said that in the past, city department heads basically set aside a pile of money similar to what Monday, October 28, 2002 America Online: Fmarceaux , - Pa~e 2 or'2 had been set aside in the previous year. "V~ don't accept that," said Smecca, who on Friday huddled with park board trustee Gerry DelPrate, park board administrator Lou Muller, police chief Bob Pierce, fire chief Danny V~ber, traffic manager Mike Dricks and emergency management director Eliot Jennings. The individual budgets for police, fire protection, traffic control, sanitation, the sheriff's department, code enforcement and emergency operations were reviewed. Extra attention has been paid to the budget this year because the city is assuming a risk by fronting Mardi Gras dollars to the park board. City Manager Steve LeBlanc has been blunt in his goal that the city "be made whole" after the event. Last year, the city'~[(~St about $350,000. Smecca said he was pleased with what he and the Mardi Gras team had accomplished. "That's what you're supposed to do as a council member," he said. Chris V~olwine, special events manager for the park board, along with special projects coordinator Brett Foley, is handling the bulk of the planning at the staff level. Woolwine and Foley have wrangled sponsorships and have lined up nine acts for the first weekend of Mardi Gras. Mardi Gras: First weekend: Feb. 21-23 Second weekend: Feb 28 - March 2 Fat Tuesday: March 4 ~O' ""'~ Police: $253,000 Fire: $12,500 SherifFs department: $88,000 Code enforcement: $4,000 Emergency operations center: $12,500 Sanitation: $80,000 Traffic control: $80,000 Supplies: $70,000 .Mardi Gras Southeast Texas Gate PriclnE Thursday No Charge Friday $5.00 Advance $4.00 Saturday 10.00 Advance 9.00 Sunday 8.00 Advance 7.00 Under Age 12 No Charge Do you Yahoo[? Y! W,~b Hosting - Let the expert host your web site http:/h, vebhosting.yahoo.corn/ Monday, October 28, 2002 America Online: Fmarceaux RESOLUTION NO. P. R. NO. 11971 11/07/02 Amended ts A RESOLUTION AUTHORIZING A LEASE AGREEMENT OF THE PREMISES AT LOTS NUMBERED TWENTY-ONE, TWENTY-TWO, TWENTY-THREE AND TWENTY-FOUR (21, 22, 23 & 24), IN BLOCK N~MBER ONE HUNDRED THIRTY-THREE (133) OF THE CITY OF PORT ARTHUR, JEFFERSON COUNTY, TEXAS BETWEEN TEE CITY OF PORT ART~ua AND MARDI GRAS OF SOUTHEAST TEXAS, INC. WHEREAS, the City Council desires development by leasing a tract or parcel of Lots numbered Twenty-one, Twenty-two, 23 & 24) of CITY the same appears to promote land located at: Twenty-three and in Block Number One Hundred OF PORT ARTHUR, Jefferson on the map or plat Twenty-four (21, 22, Thirty-three (133) County, Texas as records of Jefferson County, Texas. NOW THEREFORE, OF PORT ARTmdR: Section 1. That true and correct. economic Southeast Texas, Section 3. be spread upon the Minutes BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY the facts and opinions in the preamble are Section 2. That the City Council of the City of Port Arthur hereby authorizes and directs the City Manager of the City of Port Arthur to execute on behalf of the City of Port Arthur a lease agreement in substantially the same form as Exhibit "A" attached hereto between the City of Port Arthur and Mardi Gras of Inc. That a copy of the caption of this Resolution of the City Council. READ, ADOPTED AND APPROVED on this __ day of , A.D., 2002, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , City Council , NOES: ATTEST: OSCAR ORTIZ, MAYOR EVANGELINE GREEN, CITY SECRETARY APPROVED AS TO FORM: MARK T. SOKOLOW, CITY ATTORNEY APPROVED FOR ADMINISTRATION: STEVE FITZGIBBONS, CITY MANAGER EXHIBIT "A" THE STATE OF TEXAS COUNTY OF JEFFERSON LEASE OF REAL PROPERTY THIS LEASE is made and entered into effective the 1st day of January, 2003, by and between the CITY OF PORT ARTHUR, hereinafter called "Lessor", and MARDI GRAS OF SOUTHEAST TEXAS, INC., hereinafter called "Lessee". WITNESSETH: Lessor agrees to lease and to let unto Lessee, upon the terms and conditions hereinafter set forth, the real property described as follows: Lots numbered Twenty-one, Twenty-two, Twenty-three and Twenty-four (21, 22, 23, 24) in Block Number One Hundred Thirty-three (133) of CITY OF PORT ARTHUR, Jefferson County, Texas. Said lots are also denoted in Exhibit "A". II. The Lease shall be for a term of twenty (20) years. The lease shall commence on the 1st day of January, 2003, and will end of the 31st day of December, 2023. IlL Lessee covenants and agrees to pay Lessor, as the minimum rent for the demised premises for the pr/mary term of this Lease, the sum of One Dollar ($1.00) per year. IV. There are no implied or express warranties that the leased premises is fit for the uses contemplated by the Lessee. The Lessee has fully inspected the leased premises and accepts the premises "AS IS". Lessee covenants that at its expense it shall maintain the demised premises and improvements thereon in good condition and repair during the term of this Lease and upon termination of this Lease to deliver the premises to Lessor in good condition and repair and in at least as good condition as that in which they were delivered, allowing for ordinary wear and tear. It is further agreed between Lessor and Lessee that if during the term of this Lease the demised premises shall be injured or destroyed by fire or other casualty not the fault of Lessee, as aforesaid, so as to make it impossible to conduct the business of Lessee thereon, or to such an extent that same cannot be repaired with reasonable diligence within ninety (90) days from the happening of such injury or destruction, then Lessor may terminate this Lease and Lessor shall retain any insurance proceeds and this Lease shall terminate as of the date of such injury or destruction. Lessee shall immediately surrender the demised premises and all interest therein to Lessor, and Lessee shall pay rent only to the time of such surrender; and in case of any such injury or destruction, Lessor may reenter and repossess the demised premises, and may dispossess all parties then in possession thereof. VI. Lessee shall not be entitled to sublet or assign this Lease except by and upon the prior written consent and approval of Lessor. VII. All rent shall be payable to Lessor at its offices in Port Arthur, Jefferson County, Texas, at the address set forth in Paragraph XX below, or at such other address which Lessor in writing selects. VIII. Lessor shall not be liable to Lessee or to Lessee's patrons, employees, Licensees, permittee or visitors for any damage to person or property caused by the act or negligence of Lessee or any other tenant of said demised premises. It is understood and agreed that the Lessee is an independent contractor hereunder. Lessee hereby agrees and undertakes to exonerate, and indemnify and hold harmless the City, its officers, agents, and all employees from and against and all liability, loss, damages, expenses, claims or judgments arising from the actions of the Lessee, his or her agents or employees or as a result of the Lessee's failure to use and employ reasonable skill and care. IX. Lessee agrees that it will promptly execute, fulfill and comply with all ordinances and regulations of the State, County, City and other governmental agencies pertaining to said demised premises, and all ordinances imposed by the Board of Health, Sanitary and Police Departments for the correction, prevention and abatement of nuisances in or upon or connected with said demised premises during the term of this Lease, at Lessee's sole expense and cost. Lessee shall, in case of casualty, give immediate notice in writing to Lessor. If the casualty is not the fault of the Lessee, Lessor shall thereupon elect whether or not to repair the damages or terminate this Lease as provided herein. XI. The agreements, conditions, covenants and terms herein contained shall in every case apply to, be binding upon and inure to the benefit of the respective parties hereto, their successors and assigns, with the same force and effect as if specifically mentioned in each instance where a party hereto is named; provided, however, that no assignment or under letting by Lessee in violation of the provisions of this Lease shall vest in any such assignee or under tenant any right or title in or to the leasehold estate hereby created. XlI. No assent, express or implied, by Lessor to any breach of any of Lessee's covenants, agreements, conditions or terms hereof, shall be deemed or taken to be a waiver of any succeeding breach of any covenant, agreement, condition or term hereof. XIII. Lessor agrees that Lessee shall have the right to place personal property, including signs, all of which must be acceptable to Lessor, on the demised premises. It is agreed that all personal property placed on the demised premises by Lessee may be removed by Lessee at the termination of this Lease, provided: (i) Lessee shall not then be in default of the performance of any of its agreements, conditions, covenants or terms hereof, (ii) the demised premises shall be left by Lessee substantially in the same condition that existed at the beginning of the terms, (iii) no such property shall be removed by Lessee if such removal should permanently injure the demised premises, and (iv) removal of any such property shall be effected within fifteen (15) days after the expiration of said tenn. All damage caused to the demised premises by such removal shall be repaired by Lessee at its own cost and expense prior to the termination of the Lease. Lessor shall have the right and privilege to retain and in the discretion of Lessor to dispose of any personal property of Lessee which remains on or attached to the demised premises subsequent to the expiration of the 15-day period referred to hereinabove, and Lessee hereby transfers, conveys and quitclaims unto Lessor and Lessor's heirs, successor and assigns, all right, tire, ownership and interest in and to said property. The storage building shall remain on the property and become the property of the City. XIV. Lessee shall not make any alterations, modifications or improvements to the demised premises, without the prior written consent of Lessor, and after such consent has been given, unless otherwise agreed upon in writing, all such improvements, modifications and additions constructed by Lessee upon the demised premises, shall become the property of the Lessor. XV. Lessor hereby covenants and agrees that Lessee shall and will, upon payment of all the rents and all other sums of money herein provided to be paid by Lessee, and upon fully observing and performing the covenants and agreements herein provided to be observed and performed by Lessee, quietly and peaceably possess and enjoy said above described premises, unless said Lease be sooner terminated under and in accordance with any of the provisions herein elsewhere contained. XVI. If any of the fixed rent herein reserved to be paid by Lessee shall not be paid when same becomes due and payable, or if Lessee shall default in the performance of any of the other agreements, conditions, covenants, or terms herein contained, or if Lessee shall abandon the demised premises for a period of thirty (30) days or more, or ifa petition or answer for reorganization of Lessee or the owner of Lessee's interest hereunder, shall be approved by any court or judge, or if Lessee, or the then owner of the Lessee's interest hereunder, shall be adjudicated insolvent or bankrupt, or if Lessee, or the then owner of Lessee's interest hereunder, shall make a general assignment for the benefit of creditors, or shall take any benefit under any insolvency or bankruptcy act, or have a receiver, trustee or other fiduciary appointed for its property, or if Lessee's leasehold interest shall be taken on execution of other process of law, or if this Lease, or the estate of Lessee hereunder, shall be transferred or pass to or devolve upon any other person, firm, association or corporation, except in the manner provided hereunder, then and in any of said events, Lessor, or those claims under him may immediately, or at any time thereaRer, have the right to terminate and end this Lease, and the term hereby granted, as well as all of the right, title and interest of Lessee hereunder, by giving Lessee ten (10) days notice in writing; and it is agreed that upon the expiration of the term fixed in such notice, if the said non-payment, default or other cause of termination specified in such notice shall not have been made good or removed, this Lease and the term hereby granted and created, shall, at the option of Lessor, or those claiming under it, wholly cease and any time thereaRer, and without further notice or demand, Lessor may enter into and upon the demised premises or any part thereof, and repossess same as its first and former estate, and expel Lessee, and those claiming under it, and remove its effects without being taken or deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant. XVII. Lessee shall have no power to do any act or to make any contract that may create or be the foundation for any lien upon the present or other estate of the leasehold and demised premises except as herein elsewhere specifically provided; and should any such lien be created or filed, Lessee, at its own cost and expense, shall liquidate and discharge same in full within thirty (30) days next after the filing thereof, and should Lessee fail to discharge same, that shall constitute a breach of Lessee's covenant herein. Furthermore, Lessee hereby grants unto Lessor an express landlord's lien in and to all of the property owned by Lessee and placed upon and with the property above described for the purpose of securing and enforcing the payment of the rental obligations and other obligations undertaken by Lessee herein. Lessee further agrees that Lessor shall have all the remedies available under the Landlord Lien Statutes of the State of Texas, in addition to other remedies available to Lessor under and by virtue of the provisions of this Lease. XVIII. Lessee agrees that in taking this Lease, it is governed by its own inspection of the premises and its own judgment of its desirability for its purposes; that no agreements, stipulations, reservations, exceptions or conditions whatsoever have been made or entered into in regard to said premises or this Lease which will in any way vary, contradict or impair the validity of this Lease or of any of its terms and conditions, and that no modification of this Lease shall be binding unless it be in writing and executed and acknowledged in due form for recording by all the parties hereto. Furthermore, Lessee takes this Lease and the demised premises subject only to recorded easements, rights-of- way and restrictions affecting the occupation and use and subject to all statutes, ordinances and regulations and competent governmental authority affecting the occupancy and use hereof, and the business to be engaged in by Lessee, in force now and subsequently during the term of this Lease. Under no circumstances, shall the Lessor be liable for any lost business or lost profits of the Lessee. XlX. Any word, group of words, phrase, sentence, paragraph or provision herein prohibited by law, or decision by a court of final jurisdiction shall be ineffective to the extent of such prohibition without invalidating the remaining provisions hereof. Any notice given by either party to this lease shall be deemed given when served by the United States mail, certified, retum receipt requested, to the following respective addresses: If to Lessor: City of Port Arthur P. O. Box 1089 Port Arthur, TX 77641-1089 ATTN: Stephen Fitzgibbons, City Manager If to Lessee: Mardi Gras of Southeast Texas, Inc. 3830 Highway 365 Port Arthur, TX 77642 ATTN: Floyd Marceaux, President Lessee shall pay all annual ad valorem taxes on the demised premises that may be due and Lessee shall be responsible for all personal property taxes and other taxes on the contents of the demised premises. Lessee shall be responsible for the payment of all utility bills as they may accrue. Lessee shall, at its own expense, purchase and maintain a policy or policies of insurance written by an insurer licensed to conduct business in the State of Texas, including the perils and risks of bodily injury, death and property damages, and in the following minimum limits, to include: Commercial General Liability occurrence type insurance ("XCU" and products/completed operations coverage must be included; and City of Port Arthur, its officers, agents and employees must be named as an additional insured): Bodily Injury $1,000,000 single limit per occurrence or $1,000,000 each person/$1,000,000 per occurrence; b. Property Damage $100,000 per occurrence; and c. Minimum aggregate policy year limit of $2,000,000· Contractual Liability Insurance covering the indemnity provision of this Lease in the same amount and coverage as provided for Commercial General Liability Policy, specifically referring to this Lease. Prior to taking possession of the premises, Lessee shall provide an original of said policies of insurance as required herein, and same shall contain an endorsement specifying that the insurer shall not cancel said policies without giving Lessor at least ten (10) days written notice of cancellation. Lessee may, but is not required to, purchase and maintain in effect during the terms of this Lease a policy or policies of insurance written by a company or companies qualified to write insurance in the State of Texas, providing insurance coverage against damage to all buildings and improvements, which policy or policies shall be in an amount equal and sufficient, subject to approval by Lessor, to cover the insurable value of such buildings and improvements. Lessee agrees that if additional improvements are made during the term of the Lease, additional insurance coverage may be obtained in an amount equal and sufficient to cover the insurable value of such addition and improvements. The cost of premiums for all such policies of insurance shall be paid by Lessee and shall bear the joint names of Lessor and Lessee and duplicate original policies shall be delivered to Lessor. The proceeds from such policies shall be used, if payable, in accordance with the terms relating thereto as herein provided. At such time as any policy provided under this section shall expire or terminate, renewal or additional policies shall be procured and maintained by Lessee in like manner and to like extent. If Lessee elects to not purchase said insurance coverage against damages to buildings and improvements provided in the immediately preceding paragraph, Lessor may, but is not required to, purchase said coverage for Lessor's sole use and benefit. Lessee shall reimburse the Lessor for the cost of the insurance within ten (10) days. The Lessee agrees to the following: Lessee shall construct a 100-foot X 100-foot metal building with an estimated cost of $100,000. The metal building shall have a bathroom, all utilities and plumbing in accordance with all City and State codes and regulations. Lessee will be responsible for all utilities service to the premises. The metal building construction shall be completed within nine (9) months of the commencement of this lease. The Lessee is permitted to use the building for storage of Mardi Gras equipment, fencing, barricades and other miscellaneous Mardi Gras supplies. This does not include hazardous material. Lessor is permitted to use the building for storage if space is not being used or is not needed for Mardi Gras equipment or supplies. Lessor agrees to remove any property Lessor may store in the facility, upon reasonable notice from Lessee. The Lessee shall be responsible for all maintenance of the property and improvements. 5. The storage building, once it is built, shall become the property of the City of Port Arthur. SIGNED AND EXECUTED ON THE __ day of _, 2002. BY: ATTEST: MARDI GRAS OF SOUTHEAST TEXAS, INC. "LESSEE" Secretary SIGNED AND EXECUTED ON THE BY: __ day of CITY OF PORT ARTHUR "LESSOR" City Manager ., 2002. ATTEST: City Secretary