HomeMy WebLinkAbout1991-12-23 92-64 ORDERCOUNCIL ACTION
Iter No. 92-64
Date Q99ember 18, 1991
Item/Subject: Order - Authorizing the City Manager to Execute Lease
Amendment with General Electric Company.
Responsible Department: Community and Economic Development
General Electric Coapany is proposing to extend an existing lease
agreement for three buildings at BIA. The existing lease expires in
1993 and includes 2 extension options. The proposed amendment would
extend the term until December 31. 2006.
Approval of the amendment will allow the City and General Electric
to work with Danger Target Corporation in refinancing of the existing
loan which enabled the expansion of General Electric facilities in
1987 and in the financing of future fuel tank replacement The final
lease amendments are being prepared. A summary of the proposed
amendments is attached. Staff and the Community and Economic
Development Committee recommend approval. i m
Department Head
Manager's Comments:
City manager
Associated Information:da
Finance Director
City Sol'c'tor
a888ge -
Pirst Reading Page 1 of 3
Referral
92-64
Awipedto Counedor Sav ar, December 23, 1991
CITY OF BANGOR
QITLEJ (Orberf Auth rnzmg the,City Manager. to Execute__a Lease -
Amendment
ease
Ams a t with. General Electric company_. .....
By rhe My Con<B of Me MY ofBmWor:
ORDERED,
THAT WHEREAS, -General Electric Company is interested
in extending its existing lease for buildings 466, 488 and 489 at
Bangor International Airport from the current expiration in 1993
to a tern ending in 2006; and
WHEREAS, General Electric is a major tenant at.
Bangor International Airport and major employer in the City of
Bangor; and
WHEREAS, the proposed amendment will assist in
extending and solidifying General Electric Company's presence in
the City of Bangor. -
BOW, THEREFORE, BE IT ORDERED THAT the City
Manager is hereby authorised and directed on behalf of the City of
Bangor to execute a lease amendment, a copy of which is on file in
the office of the City Clerk, with General Electric Company for
buildings 466, 488, 489 at Bangor International Airport.
92-64
In City Council Decembei 23.1991 0 R D E R
Passed as amended
Amended by adding effective Title,
date Jenueiy 2,1992 and Subst1tuk&Roriving the City Manager to execute
of Lease a kg¢se Amentlmmt with General Electric Co.
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92-64
Summary of proposed Amendments
to Lease with General Electric
for Buildings 466, 488, and 489
Backarountl
- In 1987, the City and G.E. negotiated a lease which resulted
in the expansion of G.E.'a presence in Bangor. This agreement
'included project financing from Target Area Corporation, a -
profit development entity.
The initial term of this lease expires in June of 1993. The
lease provides for one (1) four year extension option and one. (1)
ten year extension option.
In order- to facilitate the refinancing of the Target
Corporation loan and to assist.in financing fuel tank improvements,
General Electric wishes to convert the existing lease to a 15 year
lease commencing in January of 1992.
Qutline of Pronoaed Lease Amendments
* Lease extended until December 31., 2006
* Lease rare changed to reflect refinancing. Base rate would
remain the same
* Lease rate to be further changed to reflect actual cost of
G.E.'s share of fuel tank replacement
Lease requires enough fire/casualty insurance to cover
,balance of Target Note - -
- If City passes ordinance or regulation which prohibits
'lessee's use of premises for manufacturing, City has
responsibility for. paying balance of, note
* If premises are taken by eminent domain, balance of note
must be covered by damage award
+ Language is added regarding hazardous material liability.
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5.3o Y.nr,.
THIRD AMENDMENT TO LEASE
'11.1s i.d F Kw stbwIC lT To LEwsEt�tsso., a J G<..<4- fon
WHEREAS: Lessor and Lessee are parties to a certain Leact L�su
dated January , 1969, as .emended by an "Option to Leat"
dated June 1,'-1973 an "Amendment to Option to Lease" dated
November 26, 1975 an "Indenture Of Lease" dated June 10, 1987
as amended by "First Amendment", dated March 23, 1900; by
"Second Amendment", dated March 21, 1988, by "Rental Agreement"
dated April 29, 1988, and by "Revised Rental Agreement" dated
August 1, 1988 (herein collectively refs n'ed to as "the Least")
(tvirs Wafter referred to as -"the Le66e1111 and
WHEREAS, Lessor and Lessee wish to amend tbt Lease as set
forth herein,
NOW THEREFORE, the Lessor and Leasee mutually agree to
amend the Leese as follows:
1. The recitals are amended to read as fellows:
WHEREAS, the. City of Bangor' is the owner of an airport
commonly known as "Bangor international Airport," formerly
known as Bow Air Force Base, and located in the City of Bangor,
county of Penobscot, State of Maine (hereinafter aemetimes
referred to as the "Airport"); and
WHEREAS, Lessee Is currently leasing certain land and
certain bulldingc known as buildings 466, 488 and 489 at tilt
Airport for industrial manufacturing and related warehousing
purposes; and
WHEREAS,- Lessor and. Lessee have -agreed to amend the
present lease to extend the term thereof and to reflect the
understandingof -the parties Including certain understandings.
regarding the removal and replacement of certain undergt'ovnd
fuel tanks located on the Seated promisee; and
WHEREAS, BangorTarjet Arab Development Corporation has
borrowed funs to finance certain improvements to the premises,' .
and will give to Fleet Bank of Maine two promissory notes (tile
"Bangor Target Notes"),.NOte A to refinance an existing loan
and Note B to finance, the removal and replacement of fuel -
storage tanks, the repayment of which is secured
sad is to be paid from the re0tal payments;
2. ARTICLE It ie deleted in its entirety and Is replaced
with the following:
ARTICLE II
The balance of the term of this Lease shall be a period of
fifteen (IS) years COmmenei119 JanVary 1, 1952 and terminating
on December 31. 2006.
S. ARTICLE III is deleted in its entirety and replaced
with the following
ARTICLE III
RESTAL
A. Lessee covenants and agrees to Day to the Lessor as
rental the sum of , per annum, payable in
monthly installLeents of per mmrth, payable 'ae
of data of closing plum such sum ae may be required
to amattite Note IS for the balance of the term. The
first payment required to amortize the Target Note
due on the date hereof shall be due not later than
January 13, 1992 and subsequent payments shall be
made on the let of each month Commencing February 1,
1952 in amounts equal to tilt Ta1•get Nota amovtisatlon
plus the City .rental of thing Thousand five Hundred
sixty-six Dollars and Thirty-three Cents ($9,566.33);
and
B. Commencing may 1,3998 and Continuing on the first Of
each and every month thereafter, to and including
Dscemben 1, 2006, the LaSeee Shall pay the Lessor the
sum of Eleven Thousand Three Hundred Twenty-elghi.
Dollars and Sixty-one Cents (R11,32e.61j petmonth,
plus such sum as may be required to. amortize the'
2
Bangor Target Notes for the balance of the term of
the Lease, payable on the first of sech month; and -
C. The base rental set forth in paragraph'A above shall
be adjusted automatically to reflect any amounts due
_tovBangor Target on account of additional borrowing
to finance the removal aanI re lagement of underground
fuel storage tanks,Pe The en [Yfi set foorrth hsrfin 4ssce,
$hall also be adjusted automatically to reflect
changes in the permeate required to amortize the
Bangor Target Notes resulting from lnteresr rate
adjustments on the 5th and loth year anniversary of
the date of the Notes; provided that changes in the
principal. balance of &aid Notes may Occur only with
permission of the Lessee,
D. - All monthly installments of rant required hereunder
shall be paid in advance, on the first business day
Of each month during the term. Lessee shall pay all
rentals herein required, witbout prior demmud
therefor, in lawful money of the United states at the
address of the Lessr as herein eat forth or at such
other place as the Lessor shell designate.
E. If any rental payment of Leasee required hereunder is
late for any reason whatsoever, Leasee shall pay a
late fee or penalty equal to interest and penalties
which may be imposed upon Bangor Target Area
Development corporation as a result of lets Payments
made on the Bangor Target Note. The schedule of late
fees and penalties Is attached hereto as Exhibit "Be.
e. ARTICLE IV is amended as follower
a) balete .Paragraph B In its entirety.
b) Modify Paragraph b by adding at the and of the first
sentence an additional subsection to be designated
(fl which states "and (f) to remove existing
underground fuel .storage facilities and to replace
such facilities with above. or below ground
facilities constructed in accordance with Federal,
state, and municipal Law.
S. ARTICLE V is amended by deleting the second
parenthetical phrase from the middle of the paragraph.
5. ARTICLE X is amended to read:
ARTICLE X '
DAMAGE Cy FIRE OR 014ER CAEVA.LTY
Throughout the. term of chis Lease, Lessor, at its own
expense, shall keep the buildings on the leased premises
insured against lose or damage by fire with extended coverage
endorsement in all amount sufficient to prevent the Lessor from
becoming a ro•inaurer under the terms of the applicable
policies but, in any avant, in all amount not less than Eighty
Percent (901) of the full insurable value as determined from
time to time, , mite term "full insurable value" shall mean the
somal replacement cost (exclusive of the cost of excavation,
foundations, and footings below the basement floor) without
deduction for depreciation.. such insurance shall be issusd by
financially responsible insurers duly authorized to do business
in the State of Maine.. The Lessor shall furnish the Lessee
with certificates of such insurance prior to the commencement
of the leas* term. All payments made to Lessor on account of
losses, sboll be applied in accordance with the provisions
contained in this Article X.
If any of the buildings or improvemente standing or
erected upon the leased premises shall be destroyed or damaged
in whole orillpart by fire or other Casualty insured against
'under Lessor's policies of insurance, Lessor, to the extent of
available Insurance proceeds only, shall repair, replace or
rebuild the same as near as practicable to the Character of the
'buildings or improvements existing immadiataly prior to such
occurrence.
LC the event Of a,wL damage or destrtwclon, an abatement
of rent shall be made corresponding to the time during which
and to the extent to which the premises may not be need by the
Lessee, and Lessee shall be entitled to receive a prorate
refund of any advance rent paid by it during the period In
which the premises were wholly or partially destroyed or
damaged and such period shall be added to the term of the Lease
provided, however, the rent shall not be abated to an amount
lose than the monthly payment plus any additional interest,
charges or costs due at any time pursuant to the Bangor Target
Notes.
With respect to the Lessor's repair obligations hereunder,
if the damage to the building or buildings, as the case may be,
is so substantial that such damage cannot reasonably be
repaired, replaced or rebuilt within a parted of Ninety (90)
days, Leasee may terminate this Lassa by civing notice to
Lessor of its intention to terminate within sixty (601 days of
the date of loss provided, however, Lessee and/or Lessor shall
first apply the proceeds of the casualty insurance to pay the
balance due plus accrued interest, charges or costs pursuant
to the Bangor Target Notes, It is a condition of this Lease
that such Insurance shall always be maintained in amounts
sufficient to cover the balance due on the Bangor Target Notes.
Insofar as and to the extent the following provisions may
be effective without Invalidating or making It impossible to
secure insurance coverage obtainable from responsible insurance
companies doing business in the state of Maine (even t1i3ugh
extra premium may result therefrom), the Lessor and Isaacs
mutually agree that with respect to any loss which is covered
by insurance then being carried by them reapeotively, the mile
carrying such insurance and Sustaining Ouch lots release$ the
other of and from all claims with respect to each loss and they
mutually agree that their respective insurance companies shall
have no right of subrogation against tha other oil account
thereof. In the event that extra Premium is payable by either
party as a result of this provision, the other party shall
reimburse the party paying such premium the amount of Cite extra
premium. If,at the request of one party, this release and
non-anhrogatiOn. Provision is waived, then the oblieatlon of
reimbursement shall cease for such period of time as such
waiver shall be effective, but nothing,contained in this
paragraph shall be deemed to .modify or otherwise effect
releasee -elsewhere heroin contained of either party from -
liability for claims. -
J. XRTICLE XIII is amended as follows:
.Paragraph -3 Is amended to read as follows:
(3) If the estate hereby created shall be tallen on
execution or by other process of law with respect to Lessee
than, in any of. the said cases (notwithstanding any license of
any forme) breach of covenant or waiver of the benefit hereof
or consent in a former instance), the Lessee may be considered
In default horeunder, and. the. Lessor lawfully may, immediately
or at any time thereafter, and without demand or notice, enter
into and upon the said Premises or any part thereof, in the
name of the whole and repossess the same as of the Lessor's ,
former estate, and expel the Leasee and those claiming through
or under it and remove its or their effects (forcibly if
necessary) 'without prejudice to any remedies which might
otherwise be used for arrears of rept or preceding breach of
covenant, and upon entry as aforesaid, this Lease shall
terminate, and the Lessee covenants and agrees to pay And shall
be liable for the days originally. fixed herein for the payment
thereof, amounts equal, to the several installments of rents and
other charges reserved as they would, under the terms of this
Lease, become due If this Lease had not been terminated or 11
the Lessor had not entered or re-entered as ,aforesaid.
Provided, however, that if said breach by Lessee results in the
6 -
amounts due, together with accrued interest, chargee and costa
pursuant to the terve of said Notes, liotwitheeanding the
foregoing, Lessee's liability shall not exceed the difference,
1f any, between the rental which would have been due for any
such month had there been no such termination, and the amount
being received by Lentos as rent from occupants of cold
premises. in order to mitigate Lessee's damage hereunder,
Lessor agrees to make every reasonable effort to secure
subsequent tanants, at a rental equal to the rental due
hereunder.
It Is further mutually agreed that (1) if any City
ordinance, State statute or Federal Statnta of regulation anal)
be enacted or adopted which would prohibit Lessee's use of the
existing structures on the demised promises as a manufacturing
plant and related warehousing; or (2) if Lanese shall neglect
or fall to perform or observe any covenant, term or provision
or condition hereof on its part to be performed or observed and
such default shall continue fat a period of thirty (30) days
after written .notice thereof by Lessee, and Lessor shall not
have commenced and diligently pursued and remedy of said
dsfett, then in either of said eases (notwithstanding any
]Jcense of any prior breach of covenant or waiver of the
benefit thereof(, the Lessee may terminate this Lease and be
relieved of any further obligation hereunder or may rceedy said
breach and deduct the cost of such remedial action from the
rent to become due thereunder. provided however, that
notwithstanding the foregoing, Lessee shall contbme to pay to
Target or Fleet Bank of.Maing amounts snfflcleut to emoftizb
the Bangor Target Notes. in such event, Lessor agrees that if
such action is necessitated pursuant to this paragraph it shall
indemnify and bold Lessee harmless for such payments by Leasee.
If this Lease is terminated due to the possess of any CitY.
ordinance or regulation or due to Lessor's failure or neglect
to perform or observe any covenant, term or provision of
Condition of this lease or for any *that reason dile t0 leasor'e
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e56�PF9iih
L ac e��•� a O-.Val'£SY�OLbliaeEVO-'enY
C QY®Nant+J)`rT. `®L -[VE 9Y1{i°R04�'ItS-a-`3laa'fbC-(°C
negligence, the Lessor shall
Pay the balance due plus accrued interest, charges or costs
payable under the terms of the Darfur Target Notes.
3 ARTICLE XVI is amended to read as follows:
ARTICLE sVI
EMLI$NT DOMAIN
If the demised premises, or such portion thereof as to
render the balance (when reconstructed) unsuitable for the
purposes of Lessee shall be taken by condemnation or right Of
eminent domain, Lessee upon written notice to the Lessor shall
he entitled to terminate this Leese, provided that such notice
is give[' within sixty (60) day$ after tine date of such taking.
should any part of the demised premises be s0 taken or
condemned And ShouldthisLease not be terminated in
accordance with the foregoing provisions, Lessor covenants and
agrees promptly after such taking or condemnation to restore
the building of which the demised premises are a part to as
nearly its like condition prior to such taking as shall be
practical. out of any award for any taking of tile'demised
premises, Lesseeshall be so entitled to receive compensation
for its leasehold interest and improvements. ,In the event of
any Goch talong of the premises, the rent or a fain and just
proportion thereof according t0 the nature slid extent of the
damage aastainad shall be abated.
Provided however, that notwithstanding the foregoing,
Lessee shall continue to pay to Target or Pleat -Bank of Maine
amountssufficient toamortize the Bangor Target Notes. In
such event, Lessor agrees that if such action Is necessitated
by toe actions of the Lessor it shell indemnify and hold Lessee
harmless -for such payments by Lessee.
If a governmental authority other than Lessor takes sailor
which will cause the Lease to be terminated Or the rept to be
abated so to fall below the payment due on the Bangor Target
Note$, Lessee and/or Lessor shall apply the. proceeds of any
damage award to either pay the outatanding balance due on th<
Bangor Target Ucte5 or to repay said Notes 11,• sufflcleut
amount to cause the rent to be equal to or greater than the
monthly payment of the Bangor Target Notes.
9. The Lease is -further amended by adding the following
Article;
MTLCLM Haul
) ZARnoys MATERIALS f.
(1) Leoeor Warrants and represents that theydemised
premieeb Shall remainthroughout the term o: this Leaea, free of
ali Hazardous Materials, as de£lned in this Article, except for
L63ee6 Hazardous Hateriale, as defined in this Article.
it furtherance of this warranty) Lessos shall,
(a) immediately tosward'to Losses copies at any
and all notices, correapandonca, warnings, guidellnas,
or ether written materials hereafter received front or
given to, any governmental authority in 'connection with
Hazardous. materials and their relationshipto the
demised promises) _
(b) conduct and complete, at its ownexpansa, all
investigations, etudies, sampling and testing, and all
rem
ed.al remavai, andotheractions necessary to clean
up and remove all Hazardous Materials in, uadar, upon,
from, or affecting the demised promisee, to the. extent
required by and in accordaneo with all applicable
federal, state, and local laws, regulationa, rules,
ordinances, and policies, and in accordance with orders
and directives of any federal, State, or local
governmental authority)
(c) Defend, Sndamnifyf and hold harmless Leasee,
its employees, agents, officers, and directors fr$m and
against any and all elaime, demands, penalties, final,
liabilities, settlements, damages, costa, or expenoes
(including, without limitation, attorney, engineering, \
and consultant fees, investigation, testing and
laboratory fecal court coots, and litigation expenses)
of whateverkind or nature, known or unknown, contingent
or otherwise, arising out or in any way related out
(i) the discovery, presence, disposal,
release, or threatened release of any
Hazardous Materiels within, under, upon, from,
or into the demised premises)
(ii) any personal injury (including
wrongful death) or property damage (real or
Personal) arising out of or related to any
Hazardous Materials, which concern the demises
premiseel
(iii) any legal action brought or
threatened before any court or agency, "
settlement reached, or government order
relating to any Hazardous Materials which
concern the demised promisee) and/or
(1v) any violation of Iowa, orders, ,
regulations, requiromants, or demands of
government authorities now in affect or in
effect at any time in the future, which are ^
haaad upon or in any way related to any
Hazardous Materials which concern the demised
a
' p=.minae:
proved, however, that
{{this indemnity shall net apply with
91.
2
respect to Leasee Hazardous Matorieia as defined in paragraph (7) \
of this Article.
(2). Leasee warrants and roproaaote that, as to Losses
Hasardous Mateciala, as defined at paragraph (2) of this Article,
Lessee shallt
(a) immediately forward to Lasser copies of any
and
all notice$, correspondence, warnings, guideline,
or other written materials hezeafter'recsived from, or
given to, any governments' authority in connection with
Leasee maaardoue Materials and their relationship to the
demised premises;
(b) .conduct and complete, at its own expense, all
investigations, etudlsa, sampling and tseting, and all
remedial removal, and other actions necessary to clean
up and remove all Lessee Hazardous Materials ins under, _
upon, from, or affecting the demieed premises, to the
extent required by end in accordance with all applicable
federal, Staea, and'llocal lawn, regulations, gull♦e,
ordinances, and policiesr end in accordance with ,I rders
and directives of any federal, State, er local '
governmental authority) except that if a dispute 6xi$te
in good faith concerning whether Leases Masardoye
Materials. are involved, the Lessor *hall perform thaws
' functions under subparagraph (1)(b), &Dover *ubJbct to e
determination underlparagraph (a), below,(c) defend,
indemnify, and hold harmless Leeeor, its employees„ggparm ,
Officers and directors, from and against any sad ail 1Sime,
. - _
3 't,
demander penalties, tinea,llabilltiea, settlements, damages, \
costs, or expenses (including, without limitation, attorney,
engineering, and consultant fees, Investigation, testing and
laboratory feet, court coats, and litigation expenses) of
whatever kind or nature, known or unknown, contingent or
otherwise, arising out or in any way related to%
(i) the discovery, presancao disposal, '
:elaase, or threatened relosea at Lessee
Hazardous Materials within, under, upon, from,
or into the demised premises;.
(ii) any personal injury(including
wrongful death) or property damage (real or
.personal) arising out of or related to Leasee
Hazardous Materials, which concern the damiaes
premises)
(iii) .any legal action brought or
threatened before any court or agency,
settlement reached, or government order
relating to Laeaoe Hazardous Materials whish
s concern the demigod premleay and/or
(iv) any violation of laws, orders,
Id
regulations, roquiremnnts, or demands of
government authorities now in effect or in
effect at any time in the future, which art
based upon or in any way related to Lessee
_a_
Hazardous Materials which concern the demised \
promisee;
provided, however, that this indemnity shall only apply with
respect too Lasses Hazardous Materials.
(3) AS used in this Article, •Lessee Hazardous
Materials' shall mean these Hazardous Materials placed on the
demised premises by Lessee or Lessee-0 employeoa, &genre,
contractors or business inviteao (hereinaftor, "Lessee's
agente")(exclYding Leafier sr its employees, agents, contractors '
or business invitees) at any ties while this Leads shall be in.
affect.
(a) Lessee Hazardous Materials shall not include
Hazardous Materials plaead on the demised premises which are
attributable to the underground storage facilities on the demigod
premises (including but limited to any leak? Spill from or
rupture or malfunction of ouch facilities or their
appurtenances), the removal and raplaeoment of which facilities
is contemplated by Lasmt and Lassos under separate agreement,
excluding any negligent acts in the filling of the said
facilities by Lauee's agsnts.
(b) Following the completion of removal and
replacement of the lamt of the said underground storage
facilitiea,. Lessee Hazardous Materials shall include Hazardous
Materials placed on the demigod premien! by Leasee or its agents
• attributable to the replacement Storage facilities to be placed
on the demiead premises,
(6) As used horsier 'Hazardous Hatoriale•. shall mean
flammable explosives, radioactive materials, hazardous materials, \
hazardous waste, hazardous or toxic substances or matter, oil or
other petroleum products, asbestos, Chemicel.poliutants or
related, materials, including, as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 19ac,
as amended (42 V.S.T. SS. 9601 eq ,Qeg.), the Hazardous materials
Transportation Act, an amended (49 V.S.O. 99 801 at sly.), the
Resource Conservation and Recovery Act, he'&tended (49 V.S.C.
SS 691 Rq "a .)t applicable Maine statutes, or Any similar
federal, State, or local law, or in the regulations adopted and
publications promulgated pursuant. thereto, or any other
substances or saaterials constituting a hazard, peril, or threat
to the health of persons) animals, or plant life.. -
(e) The parties agree to submit any disputes concerning
whetber, or the extent to which, Hazardous Materials are Leasee
Hazardous materials, as dofined above, or the extent to which
costs, 106909, claims or expenses of any kindareattributable to
-Leeoae Hazardous Materials, to'binding-arbitration under the
applicable rules and procedures of the American Arbitration
A9eociatiou, by an arbitrator selected by agreement of the
parties or, failing agreement, appointed by the American
Arbitration Aasociation.
IN WITN^a S9 WHEREOF, ClT Or BANGOR ties caused this
Instrument to be signed in its name by its City Manager, hereunto
duly authorized by vote duly authorized and taken by,the City
Council of the city of Bangor, dated December ` 1991, and
i
GENIRAL ELECTRIC COt4aNY hes caused this instrument to be signed
DEC 23 191 IT: 13 RUDtlfa IM LL : R 9 \
in its corporate name by its corporate officer hereunto duly
auehcrirad� this day of January, 1992,
NITSESSR' CITY OF EASGGRt MkINE -
BY:
F0TT
IT9 CITY .MANAGER
MREURkTO DULY AUTRORI290
NITNESSZ, GENERAL ELECTRIC COWANY
8YR
ITS
NEREOSTO MY AUTHORI2 ED