HomeMy WebLinkAboutPR 23173: TEN YEAR LEASE AGREEMENT WITH THE OPTION TO RENEW FOR FIVE ADDITIONAL YEARS WITH ISLAND GROCERY AD CAJUN CABINS �rS
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INTEROFFICE MEMORANDUM
Date: May 12, 2023
To: The Honorable Mayor and City Council
Through: Ron Burton, City Manager
From: George Davis, Director of Pleasure Island
RE: P.R. 23173 —Execute a ten-year lease agreement with the option to renew for
five additional years with Island Grocery and Cajun Cabins
Introduction:
The intent of this Agenda Item is to request the City Council's approval of P.R. No. 23173
authorizing the City Manager to execute a lease agreement between the City of Port Arthur and
SM Brother & Sisters Corporation dba Island Grocery and Cajun Cabins for approximately
2.96 acres located at 1900 Martin Luther King, Jr. Dr., Port Arthur, Texas 77640.
Background:
The City of Port Arthur approved a five-year lease renewal with Monica Momin for
approximately 2.96 acres located at 1900 Martin Luther King, Jr. Dr. The lease has expired and
SM Brother & Sisters Corporation dba Island Grocery and Cajun Cabins wishes to enter into a
ten-year lease on the property with an option to renew for an additional five years.
Budget Impact:
None
Recommendation:
It is recommended that the City Council approve P.R.No. 23173 authorizing the City Manager
to execute a lease agreement between the City of Port Arthur and SM Brother & Sisters
Corporation dba Island Grocery and Cajun Cabins for approximately 2.96 acres located at 1900
Martin Luther King, Jr. Dr., Port Arthur, Texas 77640.
"Remember,we are here to serve the Citizens of Port Arthur"
P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8182 X FAX 409.983.8294
P. R. # 23173
05/12/2023 gd
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF
PORT ARTHUR AND SM BROTHER& SISTERS CORPORATION
DBA ISLAND GROCERY AND CAJUN CABINS FOR
APPROXIMATELY 2.96 ACRES LOCATED AT 1900 MARTIN
LUTHER KING, JR. DR., PORT ARTHUR, TEXAS, 77640.
WHEREAS, the City of Port Arthur is the fee simple owner of the land located at
1900 Martin Luther King Jr. Drive on Pleasure Island; and
WHEREAS, the City, by and through the Pleasure Island Commission previously
held a 25-year lease agreement with Jerry and Patty Oltremari, to operate Jep's Island Emporium
at this location; and
WHEREAS, pursuant to Resolution No. 14-614, the City Council granted consent
to the assignment of lease and sale of the improvements on this property between Jerry and Patty
Oltremari, dba Jep's Island Emporium and Monica Momin which includes authorization for the
renewal of a five-year lease with an option to renew for an additional five-year period; and
WHEREAS, Monica Momin and SM Brother & Sisters Corporation dba Island
Grocery and Cajun Cabins is requesting for the City to enter into a new long-term lease for the
land to show their commitment to operating the business and establish stability; and,
WHEREAS, SM Brother & Sisters Corporation dba Island Grocery and Cajun
Cabins agrees to enter into a ten (10) year lease agreement with an option to renew for an
additional five(5) years; now,therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR, TEXAS:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That the City Council hereby authorizes the City Manager to enter
into a lease agreement between the City of Port Arthur and SM Brother & Sisters Corporation
dba Island Grocery and Cajun Cabin, in substantially the same form as attached hereto as Exhibit
Section 3. That a copy of the caption of this Resolution be spread upon the
Minutes of the City Council.
P. R. #23173
05/12/2023 gd
READ, ADOPTED AND APPROVED THIS day of , A.D., 2023, at a
Regular Meeting of the City Council of the City of Port Arthur, by the following vote:
AYES:(Mayor)
Councilmembers:
NOES:
Thurman"Bill" Bartie
Mayor
ATTEST:
Sherri Bellard
City Secretary
APPROVED AS TO FORM:
(,64e1
al Tizeno, sq.
City Attorney
APPROVED AS TO ADMINISTRATION:
Ron Burton
City Manager
Georg Day'
Director of Pleasure Island
P. R. #23173
05/12/2023 gd
APPROVED AS TO AVAILABILITY OF FUNDS:
Kandy Damigl
Interim Director of Finance
ifton Wil tams, CPPB
Purchasing Manager
P. R. # 23173
05/12/2023 gd
Exhibit "A"
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
LEASE AGREEMENT
THIS LEASE AGREEMENT (hereafter "Agreement"), is dated as of
, 2023 and is entered into by and between City of Port Arthur, a Home
Rule municipality of the State of Texas (hereafter "Lessor"), whose address is 444 4th Street,
Port Arthur, TX 77641-1089, and SM Brother & Sisters Corporation dba Island Grocery
and Cajun Cabins, hereafter called "Lessee." whose address for purposes of notice under this
lease is 1900 Martin Luther King, Jr. Dr.. Port Arthur, Texas, 77640. Lessor and Lessee are
sometimes individually referred to as a"Party"and collectively as the"Parties".
The parties agree as follows:
1. AGREEMENT TO LEASE: DESCRIPTION OF THE PROPERTY. The Lessor
leases to the Lessee, and the Lessee rents from the Lessor, the following described commercial
land: (see attached property description).
2. TERMS OF LEASE. The term of the lease is as follows:
The term of this lease shall be a period of ten (10)years, commencing on 1st day of June,
2023, and ending at on 31'day of May, 2033. Provided, however, that the Lessee shall have the
option to renew this lease for an additional term of five (5) years, on like terms and conditions,
by delivering a written notice of intention to renew lease to Lessor no later than ninety (90) days
from the end of the term.
3. RENTAL.
a. Lessee shall pay to Lessor as rent at the address set forth above, or at any
other address that Lessor may designate,the minimum annual rent of$18,216.26.
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b. The minimum annual rent shall be payable in monthly installments of
$1,518.02, and shall be paid in advance on the first day of each calendar month during
the term of this lease and any renewal of it.
c. All payments due from Lessee to Lessor under the terms of this lease,
including but not limited to monthly rental payments, shall be paid promptly when due to
Lessor at the place Lessor designates in writing. If any payment is not received by
Lessor by midnight on the 10th day following the day on which the payment is due, a late
fee equal to ten percent (10%) of the delinquent payment shall be due from Lessee to
Lessor as additional rent.
d. The first month's rent and the last month's rent shall be paid when this
lease is signed.
e. In the event that Lessee shall exercise its option to renew this lease, as
provided in Section 2. Lessor may require an adjustment in the amount of rental payment
for the renewal term with a certified appraisal supporting the adjustment.
4. TAXES.
a. The term " taxes" as used in this lease shall include all real property taxes
on the building, the land on which the building is situated, and the various estates in the
building and the land, including the Lessor' s interest in the property and the Lessee's
interest under this lease. The term "taxes" shall also include all personal property taxes
levied on the property used in the operation of the building or on the premises; taxes of
every kind and nature levied and assessed in lieu of, in substitution for, or in addition to,
existing or additional real or personal property taxes on the building, land, or personal
property, whether or not now customary or within the contemplation of the parties to this
lease. "Taxes" also shall include the cost to the lessor of contesting the amount, the
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validity, or the applicability of any taxes mentioned in this section.
b. Lessee covenants and agrees that Lessee will timely pay all taxes, as
defined herein, lawfully levied by any taxing jurisdiction with authority to tax the
property. Failure to timely pay any tax levied on the property before the delinquency date
for such tax is a material breach of this lease and the Lessor may terminate the Lease
upon thirty(30) days written notice to the Lessee, unless the Lessee cures such breach by
promptly paying amounts owed, together with any penalty or interest owed. In lieu of or
in addition to termination of the Lease, Lessor may at Lessor' s choosing pay the property
tax, penalty and interest owed, and invoice the Lessee for the same. Lessee shall
reimburse Lessor for any invoiced amount within thirty (30) days of the date of the
invoice.
c. Lessee further covenants and agrees that the Lessee will each year timely
file with the Jefferson County Appraisal District a rendition statement as required by
Section 22.01 of the Texas Tax Code for all tangible personal property used by the
Lessee on the leased property for the production of income that Lessee owns or manages
and controls as a fiduciary on January 1. The Lessee shall also timely file an annual
report with the Jefferson County Appraisal District a report under Section 22.04, of the
Texas Tax Code, listing the name and address of each owner of property that is in its
possession or under its management on January 1 by bailment, lease, consignment, or
other arrangement.
d. In the event Lessee places or allows the placement of taxable personal
property not owned by the Lessee on the premises, Lessee further agrees that the
imposition of penalty or interest for failure to timely pay taxes on such property,
regardless of ownership, is a material breach of Lessee' s obligations under this lease, and
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the Lessor may terminate the Lease upon thirty (30) days written notice to the Lessee,
unless the Lessee or the property owner cures such breach by paying amounts owed,
together with any penalty or interest owed,prior to the expiration of the thirty(30) days.
e. THE PARTIES UNDERSTAND AND AGREE THAT THE LESSEE
SHALL PAY taxes and other charges as enumerated in this Article and shall deliver
official receipts evidencing such payments unto the Lessor at the place at which rental
payments are required to be made. If, however,the Lessee desires to contest the appraisal
of the property or any other matter within the scope of Chapter 41, Tax Code,the Lessee
may do so provided the Lessee gives the Lessor notice of its intention to do so and timely
pays the amount of taxes not in dispute. Lessee covenants and agrees to notify the City of
any litigation of any nature involving the imposition or payment of ad valorem taxes on
the property, including but not limited to litigation under Subtitle E or F,Tax Code.
5. SECURITY DEPOSIT. Concurrent with the execution of this lease. Lessee has
deposited with Lessor the sum of$0.00 (zero dollars).
6. SUBORDINATION. This lease and all rights of Lessee under it are and shall be
subject to and subordinate to the rights of any mortgage holder now or hereafter having a
security interest in the leased premises or any other encumbrances Lessor desires to place on the
property.
7. LESSEE'S COVENANTS. Lessee further covenants and agrees as follows:
a. To pay the rent and every installment of it when it comes due; to use the
premises in a careful and proper manner for the express purpose of operating a
convenience store and gas station business; to commit or permit no waste or damages to
the premises; to conduct or permit no business or act that is a nuisance or may be in
violation of any federal, state, or local law or ordinance; to surrender the premises on
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expiration or termination of this lease.
b. To pay all costs of fuel, electricity, garbage, telephone, and all other
utilities used on the premises. All those amounts shall be paid within 10 days of
becoming due.
c. To maintain at all times during the lease term, at Lessee's cost, a
comprehensive public liability insurance policy protecting Lessor against all claims or
demands that may arise or be claimed on account of Lessee's use of the premises, in an
amount of at least $1,000,000.00 for injuries to persons in one accident, $1,000.000.00
for injuries to any one person, and $1,000,000.00 for damages to property. The insurance
shall be written by a company or companies acceptable to Lessor, authorized to engage in
the business of general liability insurance in the state of Texas. Lessee shall deliver to
Lessor annual certificates demonstrating that insurance is paid up and copies of the
insurance policies issued by the insurance companies. Lessee further agrees to maintain
at all times during the lease term, at Lessee's cost, broad-coverage fire and casualty
insurance on its property (including inventory) and to provide Lessor with a copy of the
policy and a certificate issued by the insurance company demonstrating that insurance is
paid up. At its option, Lessor may request Lessee to obtain a certified statement by each
insurance carrier containing a clause providing that the insurance carrier will give Lessor
30 days' written notice before any cancellation shall be effective. The insurance policies
shall be provided by Lessee and shall be for a period of at least one year. If Lessee fails
to furnish policies or certificates showing policies to be paid in full as provided in this
lease, Lessor may obtain the insurance, and the premiums on that insurance will be
deemed additional rental to be paid by Lessee to Lessor on demand.
d. To indemnify and hold harmless Lessor and the leased premises from all
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costs, losses, damages, liabilities, expenses, penalties, and fines whatsoever that may
arise from or be claimed against Lessor or the leased premises by any person or persons
for any injury to person or property or damage of whatever kind or character arising from
the use or occupancy of the leased premises by Lessee; from any neglect or fault of
Lessee or the agents and the employees of Lessee in using and occupying the premises;
or from any failure by Lessee to comply and conform with all laws, statutes, ordinances,
and regulations of any governmental body or subdivision now or hereafter in force. If
any lawsuit or proceeding shall be brought against Lessor or the leased premises on
account of any alleged violations or failure to comply and conform or on account of any
damage, omission, neglect, or use of the premises by Lessee, the agents and employees of
Lessee, or any other person on the premises, Lessee agrees that Lessee or any other
person on the premises will defend it, pay whatever judgments may be recovered against
Lessor or against the premises on account of it, and pay for all attorneys' fees in
connection with it, including attorneys' fees on appeal.
e. To make no alterations in or additions or improvements to install any
equipment in or maintain signs advertising its business on the premises without, in each
case, obtaining the written consent of Lessor. If any alterations. additions, or
improvements in or to the premises are made necessary by reason of the special use and
occupancy of the premises by Lessee, Lessee agrees that it will make all such alterations,
additions. and improvements in or to the premises at its own expense and in compliance
with all building codes, ordinances, and governmental regulations pertaining to such
work, use, or occupancy. Lessee agrees that it will hold Lessor harmless against all
expenses, liens, claims, and damages to either property or person that may or might arise
because any repairs, alterations, additions, or improvements are made.
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f. To permit Lessor to enter, inspect, and make such repairs to the leased
property as Lessor may reasonably desire, at all reasonable times, and to permit Lessor to
put on the leased premises a notice that Lessee may not remove stating that the premises
are for rent one month preceding the expiration of this lease.
8. LESSOR'S COVENANTS. Lessor covenants and agrees as follows:
a. To warrant and defend Lessee in the enjoyment and peaceful possession of
the premises during the aforesaid term.
b. If the premises are destroyed or so damaged by fire, casualty, or other
disaster that they become untenantable, Lessor will have the right to render the premises
tenantable by repairs within 90 days from the date of damage with reasonable additional
time, if necessary, for Lessor to adjust the loss with insurance companies insuring the
premises, or for any other delay occasioned by conditions beyond the control of Lessor.
If the premises are not rendered tenantable within that time, either party will have the
right to terminate this lease by written notice to the other. In the event of such
termination, the rent shall be paid only to the date of the damage. If the lease is not
terminated, rent nevertheless shall be abated during the period of time from the date of
damage to the date of physical occupancy by Lessee or date of complete restoration,
whichever occurs first.
9. DEFAULT IN PAYMENT OF RENT. If any rent required by this lease is not
paid when due, Lessor will have the option to:
a. Terminate this lease, resume possession of the property. and recover
immediately from Lessee the difference between the rent specified in the lease and the
fair rental value of the property for the remainder of the term, reduced to present worth;
or
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b. Resume possession and re-lease or rent the property for the remainder of
the term for the account of Lessee and recover from Lessee at the end of the term or at
the time each payment of rent comes due under this lease, whichever Lessor may choose.
the difference between the rent specified in the lease and the rent received on the re-
leasing or renting.
10. DEFAULTS OTHER THAN RENT. If either Lessor or Lessee fails to perform
or breaches any agreement on this lease other than the agreement of Lessee to pay rent, and this
failure or breach continues for 10 days after a written notice specifying the required performance
has been given to the party failing to perform, (a) the party giving notice may institute action in a
court of competent jurisdiction to terminate this lease or to complete performance of the
agreement, and the losing party in that litigation shall pay the prevailing party all expenses of the
litigation, including reasonable attorneys' fees; or (b) Lessor or Lessee may, after 30 days'
written notice to the other, comply with the agreement or correct any such breach, and the costs
of that compliance shall be payable on demand.
11. INSOLVENCY, BANKRUPTCY, ETC., OF LESSEE. If Lessee is declared
insolvent or adjudicated a bankrupt; if Lessee makes an assignment for the benefit of creditors; if
Lessee's leasehold interest is sold under execution or by a trustee in bankruptcy; or if a receiver
is appointed for Lessee, Lessor, without prejudice to its rights hereunder and at its option, may
terminate this lease and retake possession of the premises immediately and without notice to
Lessee or any assignee, transferee, trustee, or any other person or persons, using force if
necessary.
12. LESSOR TO HAVE LIEN. Lessor will have a lien against all goods, equipment,
furniture, and other personal property of Lessee brought, stored, or kept on the leased premises
during the lease term, in the aggregate amount of all rent, damages, and other sums that may at
8
any time be owed by Lessee to Lessor under the lease. In the event of any default by Lessee,
Lessor may foreclose the lien in the same manner that a mortgage would be foreclosed, and in
that event, Lessee shall be obligated for all court costs and reasonable attorneys' fees.
13. ELECTION BY LESSOR NOT EXCLUSIVE. The exercise by Lessor of any
right or remedy to collect rent or enforce its rights under this lease will not be a waiver or
preclude the exercise of any other right or remedy afforded Lessor by this lease agreement or by
statute or law. The failure of Lessor in one or more instances to insist on strict performance or
observations of one or more of the covenants or conditions of this lease or to exercise any
remedy, privilege, or option conferred by this lease on or reserved to Lessor shall not operate or
be construed as a relinquishment or future waiver of the covenant or condition or the right to
enforce it or to exercise that remedy, privilege, or option; that right shall continue in full force
and effect. The receipt by Lessor of rent or any other payment or part of payment required to be
made by the Lessee shall not act to waive any other additional rent or payment then due. Even
with the knowledge of the breach of any covenant or condition of this lease, receipt will not
operate as or be deemed to be a waiver of this breach, and no waiver by Lessor of any of the
provisions of this lease, or any of Lessor's rights, remedies, privileges, or options under this
lease, will be deemed to have been made unless made by Lessor in writing.
No surrender of the premises for the remainder of the term of this lease will be valid
unless accepted by Lessor in writing. Lessee will not assign or sublet this lease without Lessor's
prior written consent. No assignment or sublease will relieve the assignor or sublessor of any
obligation under this lease. Each assignee or sublessee, by assuming such status, will become
4 obligated to perform every agreement of this lease to be performed by Lessee, except that a
sublessee shall be obligated to perform such agreements only insofar as they relate to the
subleased part of the property and the rent required by the sublease. Sublessee will be obligated
9
to pay rent directly to Lessor only after Sublessor's default in payment and written demand from
Lessor to Sublessee to pay rent directly to Lessor.
14. ADDRESSES FOR PAYMENTS AND NOTICES. Rent payments and all
notices required or permitted to be given pursuant to this Agreement shall be in writing and sent
to the Parties, either by personal delivery, by United States mail, postage pre-paid, sent by
registered or certified mail with return receipt requested or by commercial overnight courier, as
follows:
LESSOR: City of Port Arthur
444 4th Street,
Port Arthur, TX 77641-1089
ATTN: City Manager
Copy to:
Pleasure Island Department
520 Pleasure Pier Blvd.
Port Arthur, TX 77640
ATTN: Director of Pleasure Island
LESSEE: SM Brother& Sisters Corporation dba
Island Grocery and Cajun Cabins
1900 Martin Luther King, Jr. Dr.,
Port Arthur, Texas, 77640
Notices to Lessee may be mailed or delivered to the leased premises, and proof of
mailing or posting of those notices to the leased premises will be deemed the equivalent of
personal service on Lessee. All notices to either party shall be sent by certified or registered
mail, return receipt requested.
15. CAPTIONS. The captions and paragraphs or letters appearing in this lease are
inserted only as a matter of convenience and in no way define, limit, construe, or describe the
scope or intent of the sections or articles of this lease or affect this lease in any way.
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16. TEXAS LAW. This lease will be governed by the laws of the state of Texas, as
to both interpretations and performance.
17. ENTIRE AGREEMENT. This lease sets forth all the promises, agreements,
conditions, and understandings between Lessor and Lessee relative to the leased premises. There
are no other promises, agreements, conditions, or understandings, either oral or written, between
them. No subsequent alteration, amendment, change, or addition to this lease will be binding on
Lessor or Lessee unless in writing and signed by them and made a part of this lease by direct
reference.
18. TERMS INCLUSIVE. As used herein, the terms "Lessor" and "Lessee" include
the plural whenever the context requires or admits.
19. REPRESENTATIVES BOUND HEREBY. The terms of this lease will be
binding on the respective successors, representatives, and assigns of the parties.
20. COUNTERPARTS. This Agreement may be executed with counterpart signature
pages and in duplicate originals, each of which shall be deemed an original, and all of which
together shall constitute a single instrument:
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Lease Agreement
on day of , 2023.
LESSOR:
CITY OF PORT ARTHUR, TEXAS,
a municipal corporation
BY:
Ronald Burton,
City Manager
11
ATTEST:
Sherri Bellard, City Secretary
APPROVED AS TO FORM:
Val Tizeno, City Attorney
ACKNOWLEDGMENT
STATE OF TEXAS §
§
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned Notary Public, on this day personally appeared Ronald
Burton, City Manager, known to me to be the person whose name is described to the foregoing
instrument, and acknowledged to me that he executed the same as the act and deed of the City of
Port Arthur, for the purposes and consideration therein expressed, and the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS day of
,A.D., 2023.
NOTARY PUBLIC, STATE OF TEXAS
12
LESSEE:
SM BROTHER& SISTERS CORPORATION
dba ISLAND GROCERY
By:
Name:
Title:
ACKNOWLEDGMENT
STATE OF TEXAS §
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned Notary Public, on this day personally appeared
, known to me to be the person whose name is described to the
foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed
of Sunoco Pipeline L.P., for the purposes and consideration therein expressed, and the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of
,A.D., 2023.
NOTARY PUBLIC, STATE OF TEXAS
13
EXHIBIT "A"
(Property Descriptions)
(LAND ONLY)
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Property ID: 85110
Geographic ID: 053110-000-001900-00000
Property ID: 85114
Geographic ID: 053110-000-005000-00000
14