HomeMy WebLinkAbout2008.01.14 Council Special Meeting Packet AGENDA
PASCO CITE'COUNCIL
Special Meeting 7:00 p.m. January 14,2008
1. CALL TO ORDER.
2. ROLL CALL
(a) Pledge of Allegiance.
3. BUSINESS ITEMS:
(a) Baseball Stadium Lease:
1. Agenda Report from Gary Crutchfield,City Manager dated December 13, 2007.
2. Proposed Lease Agreement (Council packets only; copy available in the City Manager's
office, the Pasco Library or on the city's website at www.pasco-wa.gov for public
review).
MOTION: I move to approve the 10-year lease agreement with Northwest Baseball
Ventures for the Baseball Stadium and, further, authorize the Mayor to sign the agreement.
4. ADJOURNMENT.
AGENDA REPORT
TO: City Council December 13,2007
FROM: Gary Crutchfi Manager Regular Mtg.: 12/17/07
Re-submitted—Regular Mtg.: 1/7/08
Re-submitted—Special Mtg.: 1/14/08
SUBJECT: Baseball Stadium Lease
I. REFERENCE(S):
]. Proposed Lease Agreement (Council packets only; copy available in the City Manager's
office, the Pasco Library or on the city's website at www.pasco-wa.gov for public
review)
II. ACTION REQUESTED OF COUNCIL/STAFF RECOMMENDATIONS:
1/14: MOTION: I move to approve the 10-year lease agreement with Northwest Baseball
Ventures for the Baseball Stadium and, further, authorize the Mayor to
sign the agreement.
111, FISCAL IMPACT:
See discussion below.
IV. HISTORY AND FACTS BRIEF:
A) The city's professional baseball stadium, built in 1995 has been leased to Northwest
Baseball Ventures since June 2004. That five-year lease will expire at the end of 2008.
The general provisions of the lease include rent at $15,000/year the first year, rising by
$2,500 each year to $25,000 in 2008; tenant pays for most utilities; city provides major
structure repair. The tenant was also obligated to spend $50,000 in tenant improvements
at the stadium in the first two years of the lease; in exchange, the city provided the right
to sell (rent)the stadium name for the period of the lease.
B) Over the past four years the tenant has established a strong presence in the Tri-Cities
community and has developed a stronger fan base (average ticket sales have increased
each of the past four years). The tenant has performed its responsibilities under the lease
satisfactorily and has been timely with all rent and other payments due the city. Given
the improved business operation being realized, the tenant desires a new lease agreement
be established before the current lease expires. Inasmuch as finding a replacement tenant
would require about a year, it is also in the city's interest to determine whether or not a
new lease agreement is acceptable, at the soonest opportunity.
C) The new lease provides a longer term arrangement for occupancy of the stadium by a
tenant that is realizing some success in growing the business. It is also structured to
provide the city the strong probability of a "break even" on the stadium operation each
year, as revenues/taxes from the tenant are expected to offset the city's cost obligations
each year(other than debt service), assuming no major structural repair work is required.
Beyond that, the tenant's installation of the modular office building speaks volumes as to
the tenant's commitment to the Tri-Cities market for professional baseball.
V. DISCUSSION:
A) The proposed 10-year lease provides for the following(key)changes:
• Term: the old five-year lease will be replaced by a 10-year lease but will include a
five-year extension(thus, a total of 15 years), subject to mutual agreement on rent for
the extension period;
• Rent: the base rent in 2008 will remain $25,000 (same as old lease), but will increase
$1,000 each year (essentially represents a 4% annual increase) through the initial 10-
year lease term. Rent for the five-year extension is subject to negotiation and mutual
agreement at that time;
3(a)
• Additional Rent: the city has received a modest payment from the tenant over the
past two years under the current lease provision (5% of adjusted ticket revenue
exceeding $250,000 annually). The proposed lease will increase the threshold to
$400,000 and increase the deduction for MLB from 5% to 7% over the lease term.
The effect of the change is that the city will likely receive no additional rent payment
in 2008,but such payments are likely to resume in 2009 or 2010, at the latest.
• Utilities: tenant will pay for all utilities (except well water) consumed by the stadium
operation.
• Winterization: city has performed this service (to assure its proper execution) with
reimbursement of cost by tenant; under new lease, city will continue to perform the
service but will not be reimbursed its cost.
• Office Building: tenant is required to install modular office building at its expense;
city will credit base rent by 1/15"' of tenant's cost but not more than $175,000 over
the 15-year lease period.
• Termination: if lease terminated by tenant prior to tenth year, no obligation on city
to pay balance of rent credit owed for office building; if the city increases rent for
five year renewal period more than acceptable by tenant, the city is obligated to pay
balance of rent credit.
• Naming Rights: tenant will have right to sell (rent)name of stadium for term of lease
(same as current lease).
• Insurance: new lease increases tenant insurance obligations, from $1 million
occurance/$2 million aggregate (old lease) to $2 million occurance/$5 million
aggregate(new lease).
B) The city's lease revenue and costs are estimated as follows:
Lease Revenue:
2008 2009 2010
Rent $25,000 $26,000 $27,000
Additional Rent 0 0 $1,000
Admissions Tax $9,900 $10,500 $11,000
Cross Revenue $34,900 $36,500 $39,000
Rent Credit(max) -$11,666 - 11 666 -$11,666
Net Revenue $23,234 $24,834 $27,334
Annual Operating Expenses:
Personnel $500
Supplies $500
Professional * $1,000
Insurance $5,000
Electricity(well) $1,000
Repair/Maintenance * $15,000
Administration/Accounting $2,000
$25,000
* variable
C) The only risk to the city in the proposed lease is the possibility of a major repair being
required during the term. For that reason, staff has insisted on a terni not to exceed ten
years (the tenant prefers 15 years), as it will provide the city an opportunity to assess its
exposure before agreeing to the five-year extension.
D) The provisions for stadium naming rights (Section Xi V) has been revised to incorporate
the tenant's offer to spend at least $5,000 on stadium improvements for each year they
have a stadium name sponsorship agreement(in other words, each year they have income
from a stadium sponsor, they will spend $5,000 on the stadium). Such improvements
may occur in aggregate (perhaps $20,000 for one improvement in the fourth year) and
must be approved by the city prior to construction. This provision would be subject to
renegotiation at the end of the 10-year lease,if desired by either party.
E) Staff recommends the proposed lease be approved.
BASEBALL STADIUM
LEASE
THIS BASEBALL STADIUM LEASE ("Lease") is made and entered into this day
of January, 2008, by and between the CITY OF PASCO, a Washington municipal corporation
("City"), and NORTHWEST BASEBALL VENTURES I LLC, a Washington limited liability
company(the "Tenant").
RECITALS:
City owns certain real property in Franklin County, Washington, legally described in
Exhibit A attached hereto (the "Property"), upon which City has constructed a baseball stadium
and related improvements (the "Baseball Stadium"). Tenant desires to lease from City, and City
agrees to lease to Tenant, the Property and Baseball Stadium (collectively the "Premises") on the
terms and conditions set forth herein. This Lease is intended to supersede and replace in its
entirety that certain Baseball Stadium Lease entered into by City and Tenant dated June 8, 2004
(the "2004 Lease"). By executing this Lease, City and Tenant agree that the 2004 Lease shall be
terminated effective December 31, 2007.
NOW, THEREFORE, City and Tenant hereby agree:
1. LEASE
City leases to Tenant and Tenant leases from City, in accordance with the terms hereof,
the Premises (including the Baseball Stadium located thereon).
11. USES
2.1 Uses.
a. Use. Subject to Section 2.1c, Tenant shall have the exclusive and
unrestricted right to use and operate the Premises for any baseball or non-baseball events that
Tenant sponsors or that Tenant allows third parties to sponsor. Tenant shall operate the Premises
in a sound and professional manner. The Premises shall be a public facility, and the seating,
parking, concession stands, restroom facilities, and other specified areas thereof shall be open to
the public, subject to reasonable admission fees and other reasonable restrictions.
Notwithstanding the foregoing, Tenant may not use the Premises, or permit any other person or
entity to use the Premises, for any improper, immoral or unlawful purpose, for a use or purpose
inconsistent with applicable zoning or the primary use of the Premises for professional baseball
purposes, or for any use that would constitute a public or private nuisance or would make void or
voidable any insurance then in force with respect to the Premises. Tenant also may not use the
Premises, or permit any other person to use the Premises, for flea markets, bazaars, or similar
events for the sale of used or second-hand items.
-1-
b. Baseball Equipment, This Lease includes the right of Tenant to use at the
Premises the baseball equipment identified in Exhibit B attached hereto (the "Equipment"). City
makes no warranty or representation concerning the condition of such Equipment. Tenant agrees
to maintain such Equipment in good working condition (reasonable wear and tear excepted) and
to replace items of Equipment as reasonably necessary. Upon the expiration of the Term (as
defined below) of this Lease all items of Equipment, including replacements thereof, shall
belong to City, provided that with respect to replacements that are less than two (2) years old as
of the date of expiration of the Lease, such replacements shall become the property of the City
only if the City reimburses Tenant for the unamortized cost incurred by Tenant to purchase such
replacements, based upon an amortization period of the lesser of sixty (60) months or the useful
life of such replacements.
C. Other Uses. Subject to the scheduling provisions set forth in this Lease,
City shall have the right to use the Premises for up to five (5) community events sponsored by
City (each a "Community Event") per calendar year during the Term, including a 4th of July
fireworks display. Each day of a multi-day Community Event shall count as one Community
Event. Tenant shall allow community baseball events and baseball events sponsored by local
colleges and universities to take place in the Baseball Stadium at the lowest reasonable rental
rate possible, and subject to the availability of the Baseball Stadium. Such baseball events shall
not be deemed Community Events. Non-baseball events sponsored by Tenant or by third parties
and Community Events shall, collectively, be "Other Events." Tenant shall operate the Baseball
Stadium during Community Events and City shall reimburse Tenant for Tenant's reasonable
actual out-of-pocket cost of operating the Baseball Stadium during such events, including utility
costs.
2.2 Exclusive Rights. Tenant shal I have the exclusive right during the Term to do the
following:
a. To use the Premises (including the locker rooms) for professional baseball
purposes and to conduct Other Events permitted by this Lease;
b. To allow third party sponsors to use the Premises to conduct Other Events
permitted by this Lease;
C. To use the baseball team office located within the Premises;
d. To use the storage facilities dedicated to the baseball team and its
equipment;
e. To solicit advertisements to be located on the interior walls of the Baseball
Stadium, including without limitation, those to be located on the scoreboard, and to solicit
advertisements to be located on that portion of the exterior walls of the Baseball Stadium above
the concourse area and described in Exhibit C, and to install and receive and retain all revenue
from such advertisements. Tenant may not display advertisements on the exterior walls of the
Baseball Stadium, other than above the concourse area, without City's prior consent.
Advertisements that occur inside or on the exterior walls of the Stadium may not include or
connote adult content, firearms or tobacco. City may place signage within the Baseball Stadium
announcing upcoming City functions and events with Tenant's prior consent, which consent may
not be unreasonably withheld.
-2-
f. To direct all aspects of the operation, management and control of the
Premises, except as expressly set forth in this Lease;
g. To sell food, drink and souvenir concessions (collectively "Concessions")
to patrons of the Premises during baseball games or Other Events, subject to the provisions
contained in Section VIII below, and to retain all revenues therefrom; and
h. To use the press box area during baseball games, and during all Other
Events sponsored by Tenant or third parties taking place within the Baseball Stadium. Public
address equipment provided by Tenant shall be available for the use by City for Community
Events, provided such public address equipment is operated by an employee or designee of
Tenant or an employee or designee of City trained to use such equipment and approved by
Tenant (such approval not to be unreasonably withheld). If the public address equipment is
operated by an employee or designee of Tenant for a Community Event, City shall reimburse
Tenant for the reasonable actual costs to make such employee or designee available to operate
such equipment.
2.3 Scheduling. On or before September 1" of each calendar year, beginning
September 1, 2008, City shall deliver to Tenant a schedule of the soccer tournaments to be held
during the next calendar year in the playing fields adjacent to the Baseball Stadium. Tenant shall
use its best efforts to prevent the Northwest League (the "Northwest League"), which is a
member of the National Association of Professional Baseball ("NAPBL") from scheduling a
Minor League Baseball game in the Baseball Stadium on a date that a soccer tournament will be
held in the playing fields adjacent to the Baseball Stadium. If a Minor League Baseball game is
scheduled in the Baseball Stadium on the date of a soccer tournament, Tenant shall schedule
such baseball game as a night game. City shall submit a request to Tenant to use the Baseball
Stadium for a Community Event at least thirty (30) days before the proposed date of the
Community Event, Tenant shall make reasonable efforts to accommodate City's scheduling
requests for Community Events. Tenant shall also make reasonable efforts to accommodate
other soccer tournaments in the playing fields adjacent to the Baseball Stadium (in addition to
those designated under the first sentence of this Section 2.3) if requested by City. Soccer
tournaments scheduled for 2008 are listed in Schedule 1, which dates are acknowledged by
Tenant.
In addition to the foregoing, Tenant shall not schedule a baseball game or Other Event on
the 4`h of July, and the Baseball Stadium shall be reserved for the City's 4 1 of July fireworks
display.
Ili. TERM
3.1 Term. The term of this Lease shall commence on January 1, 2008 (the "Effective
Date"), and shall expire on December 31, 2017, unless extended pursuant to Section 3.2 below
(the "Initial Term").
3.2 Extension Option. Tenant shall have one (1) option to extend the Initial Tenn for
five (5) years, subject to the terns provided herein (the "Extension Tenn"). The Extension Term
together with the Initial Term are referred collectively as the "Term".
-3-
(a) If, at the time of exercise, Tenant has performed all Tenant's covenants and is
not in default under any of the terms of the Lease beyond any applicable cure period, then
Tenant, on giving written notice to City not earlier than twenty-four (24) months, and not later
than eighteen (18) months prior to the last day of the Initial Term of the Lease, shall have the
right to extend the Initial Term of the Lease for an additional term of five (5) years upon the
same terms and conditions as contained in the Lease, except for the Rent. The Extension Term
shall commence on the day immediately succeeding the last day of the Initial Term of the Lease
and shall end at midnight on the day immediately preceding the fifth anniversary of the first day
of the extended term unless sooner terminated in accordance with the provisions of the Lease.
The Rent during the Extension Term shall be mutually agreed upon between City and Tenant no
later than twelve (12) months prior to the last day of the Initial Term of the Lease. If City and
Tenant have not mutually agreed on the Rent at least twelve (12) months prior to the last day of
the Initial Term, then the exercise of the extension option shall be deemed to be ineffective and
this Lease shall automatically terminate on the last day of the Initial Term.
IV. RENT, ADDITIONAL PAYMENTS
4.1 Rent. Tenant agrees to pay annual rent in the following amounts ("Rent"):
Period Annual Rent
From the Effective Date to 12/31/08 $25,000
1/1/09 to 12/31/09 $26,000
1/1/10 to 12/31/10 $27,000
1/l/11 to 12/31/11 $28,000
1/1/12 to 12/31/12 $29,000
1/1/13 to 12/31/13 $30,000
1/1/14 to 12/31/14 $31,000
111115 to 12/31/15 $32,000
]/1/16 to 12/31/16 $33,000
1/1/17 to 12/31/17 $34,000
Rent shall be paid to City at 525 North 3`d Avenue, Pasco, Washington 99301, Attention:
City Treasurer ("City's Address"). Tenant shall pay Rent in a lump sum annually on June 15 of
each calendar year during the Term. Tenant shall pay a late service charge on all past due rent at
the rate of five percent (5%) per month, but in no event higher than the legal limit. The Rent
specified in this Section 4.1 includes the leasehold excise tax which is payable in accordance
with Chapter 82.29A RCW (the "Leasehold Tax"). Tenant shall pay the Rent to City, and City
will forward to the State of Washington as required by law that portion of the Rent which is
allocable to the Leasehold Tax.
If City raises the admission tax on tickets to view events in the Baseball Stadium above
two and one-half percent (2.5%), the Rent set forth above shall be reduced on a dollar for dollar
basis for each year the dollar amount of admission taxes collected by Tenant for such year in
excess of 2.5% of the price of each ticket sold. In the event Tenant has already paid Rent, City
shall refund to Tenant a portion of the Rent overpaid as a result of the application of this
provision.
-4-
4.2 Additional Rent.
a. Tenant shall pay City as additional rent ("Additional Rent") for each
Lease Year (beginning with the Lease Year commencing January 1, 200$) Eve percent (5%) of
all base ticket revenues associated with the use and operation of the Premises by Tenant, in
excess of $400,000. "Base ticket revenues" shall mean the base ticket revenues for all paid
tickets to attend and/or view events sponsored by Tenant. Base ticket revenues shall be the
actual revenues generated by all ticket sales, exclusive of (i)revenues to pay admission taxes,
(ii) trade and complementary tickets, and (iii) the MLB ticket tax as set forth in Schedule 2
attached hereto, not to exceed 7% for purposes of calculating base ticket revenues hereunder. If
Tenant packages tickets with other goods and/or services (e.g., hot dogs, soft drinks, etc.), base
ticket revenues shall be calculated only on that portion of revenues reasonably allocated to the
tickets to view the event, which will in no case be less than fifty percent (50%) of the face value
of the ticket. If Tenant sells tickets at a discount from their face value, base ticket revenues shall
be calculated from the discounted price of such tickets. Ticket revenues based on season or
advanced ticket sales shall be deemed "collected" by Tenant for purposes of determining
Additional Rent on the respective dates that events covered by such tickets actually occur. No
Additional Rent shall be payable for Community Events or "free" events if Tenant is merely
reimbursed its reasonable costs to make the Premises available for such event. For purposes of
calculating Additional Rent, a Lease Year shall be the 12-month period from January 1 to the
next December 31.
b. With respect to Other Events at the Premises sponsored by a third party,
Tenant shall pay City as Additional Rent ten percent (10%) of the net sublease/license fees paid
to Tenant by the third party to use the Baseball Stadium for such Other Event. Net
sublease/license fees shall be the sublease/license fees paid to the Tenant with respect to such
Other Event, less the reasonable and actual costs and expenses incurred by Tenant with respect to
such Other Event.
C. On or before October 1, of each year, Tenant shall remit to City a
summary events reconciliation statement for the year to date, and including the entire baseball
season. The reconciliation statement shall set forth ticket sales for all events sponsored by
Tenant and net sublease/license fees paid to Tenant by third parties during such year to date. If
as a result of such statement Additional Rent is due, such Additional Rent shall be paid
simultaneously with the delivery of such statement. If Tenant or a third party sponsors Other
Events in such year after the effective date of the reconciliation statement, then within ten (10)
days after such Other Event, Tenant shall remit to City a reconciliation statement for such Other
Event and pay any Additional Rent (if any) due as a result of such Other Event.
d. Tenant shall maintain documentation and records verifying the ticket sales
for each event held within the Baseball Stadium sponsored by Tenant and net sublease/license
fees for each event held within the Baseball Stadium sponsored by a third party for a period of
two (2) years after the date of such event. Upon written request by City, Tenant shall make such
documentation reasonably available for an audit by City, or its duly authorized representatives,
to verify the accuracy of the Additional Payments remitted by Tenant.
-5-
e. If the Additional Rent is included in contract rent for purposes of
calculating the Leasehold Tax, City shall pay such Leasehold Tax, including all applicable
penalties and interest thereon, from the Additional Rent remitted by Tenant and the Additional
Rent shall be deemed to have been reduced by the amount of such Leasehold Tax.
f. Tenant shall include in all written agreements with third parties that
sponsor Other Events, the right of City to audit such third parties' records regarding payment of
sublease/license fees.
V. UTILITIES
5.1 Utilities
a. Utility Charges. Tenant shall pay or cause to be paid when due, and shall
indemnify, protect and hold harmless City and the Premises from all charges for public or private
utility services to the Premises during the Term, including without limiting the generality of the
foregoing, all charges for heat, light, electricity, potable water, gas, telephone service, garbage
collection and sewer and drainage service. Notwithstanding the foregoing, the City shall provide
un-metered well irrigation water to Tenant at no cost to Tenant.
b. Interruptions of Utility Services. City shall not be liable to Tenant in
damages or otherwise (1) if any utility shall become unavailable from any entity (including City)
supplying or distributing such utility, or (ii) for any interruption in any utility service (including,
without limitation, any heating, air-conditioning or sprinkler) caused by the making of any
necessary repairs or improvements or by any cause, and the same shall not constitute a
termination of this Lease or an eviction of Tenant. If any utility service, used at the Premises and
for which City is responsible, shall be interrupted, City shall restore such utility service as soon
as practical.
VI. CONDITION OF PREMISES; IMPROVEMENTS
6.1 Current Condition. Tenant agrees to accept the Premises and Baseball Stadium in
its current "as is, where is" condition. Tenant acknowledges the opportunity prior to its
execution of this Lease to conduct a thorough inspection of the Premises.
6.2 Air Conditioning.
The air conditioning, previously installed by Tenant in the "home team" clubhouse/locker
room, is part of the Premises, and during the Term shall be maintained by Tenant at Tenant's
cost. Upon expiration or earlier termination of this Lease, the air conditioning equipment shall
become the property of City,without additional cost or expense to City.
6.3 Improvements. Tenant has requested City's permission to install certain fixtures
on the Premises during the Lease Term. City consents to Tenant's request pursuant to the
requirements and conditions contained in this Section 6.3.
-6-
a. City shall allow Tenant to install a modular office building on the Property
containing approximately square feet (the "Improvements"). Tenant shall use good
faith and diligent efforts to complete the construction of the Improvements and for the
Improvements to be ready for occupancy no later than .rune 15, 2008. The Improvements shall
be constructed and installed according to all governing laws and regulations, including but not
limited to, the Americans with Disabilities Act. Prior to constructing or installing the
Improvements, Tenant shall submit to City plans and specifications for the Improvements for
City approval, such approval not to be unreasonably withheld. The location of the Improvements
shall be subject to the prior approval of City. During the Term of the Lease, Tenant shall
maintain ownership of the Improvements; however, at the expiration of the Term, City may (i)
require Tenant to remove the Improvements or (ii) allow Tenant to abandon the Improvements,
at which time, the Improvements shall become part of the Property and be owned by City.
b. Following completion of the Improvements, Tenant shall provide City
with an accounting of the actual third-party costs and expenses incurred by Tenant to install the
Improvements, including paint, carpet/flooring and any built-in cabinets and counters, such costs
not to include fees to Tenant or affiliates of Tenant, furniture or fixture costs, or other non-third
party expenses. If requested by the City, the accounting shall be accompanied by receipts,
contracts, or any other reasonable evidence of the costs incurred by Tenant for the
Improvements. Upon City review and approval of such accounting, the costs incurred by Tenant
to install the Improvements shall constitute the Approved Costs.
C. City shall provide Tenant with an annual credit against the Rent in an
amount equal to one-fifteenth (1/15`") of the Approved Costs, such credit not to exceed $11,666
annually or$175,000 in the aggregate(the"Rent Credit").
d. If City and Tenant mutually agree upon the Rent during the Extension
Term and extend this Lease through the Extension Term, then Tenant shall be eligible for the
Rent Credit through the Extension Term. If Tenant terminates this Lease after the expiration of
the Initial Term without exercising its option to extend the Lease, then Tenant shall have
forfeited any remaining Rent Credit.
e. If Tenant exercises its option to extend this Lease but City and Tenant
have not mutually agreed on the Rent for the Extension Term at least twelve (12) months prior to
the last day of the Initial Tenn, then (i) upon expiration of this Lease following the end of the
Initial Term and provided that Tenant has otherwise complied with the terms of this Lease,
Tenant shall receive one-third (1/3) of the Rent Credit as a termination fee within sixty (60) days
following the last day of the Initial Term; and (ii) this Lease shall terminate upon the expiration
of the Initial Term. Notwithstanding the preceding sentence, if City proposes an amount for
annual Rent for the Extension Term which does not exceed $34,000, and Tenant does not accept
this proposal, then Tenant shall have forfeited any right to a termination fee upon the expiration
of this Lease.
VII. REPAIRS AND MAINTENANCE
7.1 City Obligation. City shall, at its own cost and expense, maintain and repair all
structural portions of the Premises in a good and safe condition during the Term, reasonable wear
and tear excepted, promptly after City is made aware of the need for such structural maintenance
and/or repair. Structural portions of the Premises shall include, without limitation, all sidewalks
-7-
and the roof, structural walls, structural members (including structural elements of the light
poles, scoreboard and outfield fence), floor slabs and foundation of the Baseball Stadium and
plumbing and electrical repairs that require alteration of floor slabs, foundations, roof or exterior
walls. If governmental laws, rules, regulation or ordinances ("Applicable Laws") change such
that the Premises no longer complies with Applicable Laws and can no longer be used for its
intended purposes without repair or improvements, the City shall have the first option to alter or
repair the Premises to bring it into compliance with Applicable Laws. if City does not bring the
Premises into compliance with Applicable Laws within a reasonable period of time, Tenant shall
have the right, but not the obligation, to make the alterations or repairs necessary to bring the
Premises into compliance with Applicable Laws. If neither City nor Tenant elect to bring the
Premises into compliance with Applicable Laws, Tenant may terminate this Lease in its sole
discretion. The foregoing shall only apply to changes required to be made to the Premises in
order to comply with Applicable Laws so that the Premises can continue to be used for its
intended purposes and does not apply under circumstances where the Premises becomes a
nonconforming structure, but for which changes are not required for the continued use of the
Premises.
7.2 Tenant Obligations._
a. Tenant shall be responsible, at its own cost and expense, for the routine
maintenance and upkeep and routine nonstructural repairs of the Premises during the Term,
including interior walls, ceilings, doors, windows, light fixtures, switches, wiring and plumbing
not the responsibility of City under Section 7.1 above, and heating and air conditioning systems
and equipment. Tenant shall also be responsible for the cost of cleaning the Premises and the
cost of cleaning supplies and other routine supplies required to operate the Premises, all in
accordance with customary standards for similar facilities and prudent maintenance practices.
b. Notwithstanding the foregoing, City shall be responsible for all routine
maintenance and repair of the Premises required by or arising from use of the Premises for
Community Events. City shall fulfill its maintenance and repair obligations under this
Section 7.2 immediately after use of the Premises for Community Events.
C. Tenant shall also be responsible for garbage disposal and other cleaning of
the Premises and Parking Areas (as defined below) following each game or Other Event
sponsored by Tenant or a third parry, and for payment of all expenses of staff and services for
each game or Other Event sponsored by Tenant or a third party, including without limitation
parking attendants, security officers, ticket salespeople and attendants, ushers, and, if applicable,
medical personnel and vehicles. Tenant shall also be responsible for maintaining the baseball
team office and locker rooms while Tenant is entitled to the exclusive use thereof. Tenant will
permit no waste, damage or injury to the Premises. At the expiration or sooner termination of
this Lease, Tenant will quit and surrender the Premises in a neat and clean condition (reasonable
wear and tear excepted), and will deliver up all keys belonging to the Premises to City, or City's
agent. Should Tenant fail to tender possession of the Premises to City as provided herein, City
shall have the right to perform the work necessary to put the Premises in a neat and clean
condition (reasonable wear and tear excepted), at Tenant's expense, and Tenant agrees to
reimburse City for the costs to do so.
-8-
d. Tenant shall not damage or deface the Premises, nor shall Tenant allow its
guests and invitees to damage or deface the Premises. Tenant and Tenant's guests and invitees
shall not do anything which may injure the buildings or other improvements or be a nuisance or
menace. All deliveries of supplies and material to the Premises shall be made at such hours and
in accordance with such rules as City may reasonably prescribe. Tenant will not permit an
accumulation of boxes, waste, or other refuse matter. Trash and garbage shall be stored, until
disposed, within areas designated by City for such purposes.
e. In addition, Tenant agrees as follows:
(i) Care of Plumbing Facilities. Plumbing facilities shall not be used for
any other purpose than that for which they were constructed.
(ii) Cleaning of Kitchens. Tenant shall have the Concessions ventilation
equipment cleaned at least every six(6) months, and Tenant upon request shall provide City with
evidence that the work has been done for the most recent period.
(iii) Odors. Tenant shall not permit the emission of offensive odors from
the Premises or allow permeation through interior or exterior walls.
(iv) Tenant To Pgy For Violation. The expense of any breakage,
stoppage or damage resulting from a violation of this Section 7.2 shall be borne by Tenant.
(v) City May Demand Repairs. If City reasonably deems necessary any
repairs required to be made by Tenant, it may demand that Tenant make the same forthwith, and
if Tenant refuses or neglects to commence such repairs and complete the same with reasonable
dispatch, City may make or cause such repairs to be made and Tenant agrees, forthwith, on
demand, to pay to City the cost thereof with interest at the maximum rate permitted by law at the
time City incurs said cost of repairs.
7.3 Plumbing System Winterization. Notwithstanding the other provisions of this
Lease, the City shall be responsible for the work associated with draining and winterizing the
plumbing system of the Premises each year(either using a third party plumber or using City staff
based upon protocols established by plumbing professionals).
7.4 Baseball Field/Grass Maintenance.
a. Tenant shall be responsible at its sole cost and expense for the year-round
maintenance, upkeep, repair and care of the baseball field and the other grass areas of the
Baseball Stadium, including the preparation and maintenance of the playing field before, during
and after each game or Other Event sponsored by Tenant. Such upkeep and maintenance shall
include fertilizing, mowing, aeration, irrigation and all other matters associated with the
maintenance of the playing field and other grass areas. All such upkeep and maintenance shall
be in accordance with the standards and specifications attached hereto as Exhibit E, or otherwise
directed by City. Tenant shall also be responsible at its sole cost and expense for all fertilizer
and other supplies required for the upkeep and maintenance of the playing field and other grass
areas of the Baseball Stadium.
-9-
b. If Tenant fails to maintain the playing field and the other grass areas of the
Baseball Stadium as herein required, City shall have the right to do so, at Tenant's expense, and
Tenant agrees to reimburse City for the costs to do so.
C. Tenant shall also have the exclusive right to use a portion of the
maintenance facility just beyond the left field outfield fence of the Baseball Stadium for the
storage of maintenance equipment and other uses associated with the maintenance of the baseball
field and other grass areas of the Baseball Stadium.
VIII. CONCESSIONS
8.1 Concessions. Except as otherwise set forth herein, Tenant shall have the
exclusive right, during baseball games and Other Events held in the Baseball Stadium, subject to
the provisions set forth below, to sell Concessions in the Premises and in the Parking Areas (as
defined below) and to retain all revenues therefrom. Such right may be exercised by Tenant
directly or through a sublicensee.
a. Concession Equipment. Tenant shall supply at its own expense and in its
sole discretion all equipment, fixtures and supplies, and all staff and other persons required or
necessary to provide Concessions to patrons of the Premises.
b. Tenant to Use Adequate Electrical Equipment. If Tenant supplies any
concessions electrical equipment that overloads the electrical lines in the Premises, Tenant shall
at its own expense (but only with the prior consent of City) make whatever changes are
necessary to meet the electrical requirements consistent with the.requirements of the insurance
underwriters and governmental authorities having jurisdiction.
C. Liquor License. City shall not object to or interfere with the efforts of
Tenant or its sublicensee to secure a permit to sell alcoholic beverages as one of the Concessions
sold inside the Baseball Stadium.
8.2 Concession Services. Tenant or its sublicensee shall operate and supply
Concessions and concession services during baseball games and Other Events sponsored by
Tenant or third parties on such terms and conditions as Tenant deems appropriate. Tenant shall
also provide concession services for Other Events not sponsored by Tenant (including
Community Events) at levels and with staffing as reasonably necessary to provide appropriate
concession service given the nature of the event and the expected attendance.
If Concessions are not provided by Tenant at appropriate levels for Community Events or Other
Events not sponsored by Tenant, then City may permit another entity to sell Concessions from
portable concession stands brought into the Premises for such purposes.
IX. PARKING
9.1 Generally. Adjacent to the Premises is an area for vehicle parking containing
approximately 1000 parking spaces and depicted on the map attached hereto as Exhibit F (the
"Parking Area") City hereby grants Tenant a non-exclusive license to use the Parking Area on
the terms set forth below.
-10-
a. Throughout the Term of this Lease, (i)Tenant shall have the exclusive
right to control, use and operate the Parking Area for baseball games and Other Events sponsored
by Tenant or third parties at the Premises and (ii) City shall have the exclusive right to control,
use and operate the Parking Area for Community Events and for soccer tournaments played at
the adjacent playfields. Tenant shall be entitled to retain all parking.revenue generated during
periods when Tenant controls and operates the Parking Area, and City shall be entitled to retain
all parking revenues generated during periods when City controls and operates the Parking Area.
Tenant shall provide parking attendants to operate the Parking Area for baseball games and
Other Events sponsored by Tenant and City shall provide parking attendants to operate the
Parking Area for Community Events and for events at the adjacent playfields. Tenant shall be
responsible at its sole cost to clean the Parking Area after baseball games and Other Events
sponsored by Tenant. City shall be responsible, at its sole cost, to clean the Parking Area after
Community Events and soccer tournament held at the adjacent playfields.
b. If an evening Minor League Baseball game is scheduled on the same date
as a soccer tournament: (i) Tenant and City shall work together to accommodate each others'
needs for use of the Parking Area, including an agreement on when control of the Parking Area
will change from City to Tenant; and (ii) Tenant shall honor the parking privileges of soccer
tournament spectators that have paid City to use the Parking Area. During such times, Tenant
and City shall cooperate in good faith to manage the Parking Area so that Tenant receives all
parking revenue associated with the baseball game and City receives all parking revenues
associated with the soccer tournament being conducted at the adjacent playfields, and with
Tenant providing the parking attendants to operate the Parking Area immediately prior to and
during title baseball game.
X. ESTOPPEL
Within fifteen (15) days of presentation, Tenant shall execute, acknowledge, and deliver
to City, at no expense to City, any estoppel certificate requested by City, certifying in writing, if
such shall be true, that Tenant shall be in occupancy, that this Lease is in full force and effect,
specifying the dates to which the rent and other charges shall have been paid, and stating that
there have been no defaults by City and such other representations as may be requested by a
lender, mortgagee or beneficiary.
XI. TENANT ALTERATIONS
Except as provided above in Section 6.3, Tenant shall not make any material alterations,
additions, or improvements in the Premises (including any alterations that affect structural
portions of the Premises, or any electrical, plumbing or similar system) without first obtaining
City's written consent(which may be withheld in its reasonable discretion). All such alterations,
additions and improvements shall be at the cost and expense of Tenant, and shall become the
property of City and shall remain in and be surrendered with the Premises as a part hereof at the
termination of this Lease, without disturbance, molestation, or injury except for any
improvements that City may elect to require Tenant to remove. Notwithstanding the foregoing,
Tenant may remove concessions equipment and similar fixtures from the Premises if Tenant
originally paid the cost to acquire and install such equipment and/or fixtures and if Tenant fully
repairs all damage caused by the removal of such equipment and/or fixtures. If Tenant shall
perform work with the consent of City, as aforesaid, Tenant agrees to comply with all laws,
-11-
ordinances, rules and regulations of the appropriate city or county, and any other authorized
public authority. Tenant further agrees to hold City harmless from damage, loss or cost arising
out of the said work.
XII. INSURANCE
12.1 Tenant Insurance.
a. Tenant, at its sole expense, shall place and maintain in effect throughout
the term of this Lease the following insurance (collectively, the "insurance"): (i) Commercial
general liability insurance with limits of not less than $2,000,000 each occurrence and
$5,000,000 in the aggregate, written on Insurance Services Office (ISO) occurrence form CG 00
O1, insuring against all liability arising out of and in connection with Tenant's use and occupancy
of the Premises and with Tenant's exercise of its rights granted under this Lease, including
premises and contractual liability and naming City and its employees, officers and agents as
additional insureds using ISO Additional Insured-Managers or Lessors of Premises Form CG 20
11 or a substitute endorsement providing equivalent coverage, and (ii) in the event Tenant or its
sublicensee offers alcoholic beverages in or around the Premises, "Dram Shop" and/or
"Innkeeper's Liability" insurance against claims or liabilities arising directly or indirectly to
persons or property on account of the sale or dispensing of beer, wine or other alcoholic
beverages, with a combined single limit coverage of $2,000,000 bodily injury and property
damage liability, or in greater amounts if required by law, in form and substance reasonably
acceptable to City, and naming City and its employees, officers and agents as additional
insureds, and (iii)worker's compensation and employer's liability insurance covering employees
at the Premises employed by Tenant (to the extent required, and in the amounts required by
applicable laws).
b. Certificates of such coverage and endorsements, in form satisfactory to
City, shall be furnished to City and each shall provide that said coverage will not be changed or
cancelled without forty-five (45) days written notice to City. The limits of coverage described
above shall be increased from time to time as reasonably requested by City and to the extent
consistent with prudent risk management practices and insurance standards for similar facilities.
Tenant's insurance coverage shall be primary as respects City. Any insurance, self-insurance or
insurance pool coverage maintained by City shall be excess of Tenant's insurance and shall not
contribute with it. All insurance shall be placed with insurers with a current A. M. Best rating of
not less than A:VII.
C. In the event the Insurance required under this section is not maintained, or
if an Event of Default occurs, City shall have the right (but not the obligation) to place and
maintain the Insurance required to be placed and maintained by Tenant hereunder. Tenant
agrees, on demand, to pay to City the amounts expended therefor with interest at the maximum
rate permitted by law from the tune City incurs said costs of Insurance.
d. In the event Tenant fails to place and maintain the Insurance required
hereunder, City shall have the right (but not the obligation) to require the immediate cessation of
the sale of alcoholic beverages at the Premises.
-12-
12.2 City Insurance. City shall purchase and maintain during the term of this Lease
all-risk property insurance covering the Premises and the Baseball Stadium, for their full
replacement cost without coinsurance provisions.
12.3 Waiver of Subrogation. Tenant and City hereby release and discharge each other
from all claims, losses and liabilities arising from or caused by any hazard covered by property
insurance on or in connection with the Premises and Baseball Stadium. This release shall apply
only to the extent that such claim, loss or liability is covered by insurance.
XIII. DAMAGE OR DESTRUCTION
If the Premises or Baseball Stadium are damaged by fire or other casualty under
circumstances where the cost to repair does not exceed $500,000 and the loss is covered by
insurance maintained by City, the damage shall be repaired by City, and until such repairs are
completed, rent shall be abated in proportion to the portion of the Premises which is unusable by
Tenant in the conduct of its business (but there shall be no abatement of rent by reason of any
portion of the Premises being unusable for a period equal to three(3) days or less).
If the costs to repair such damage exceeds $500,000, or the loss is not covered by
insurance maintained by City, City at its option may elect to repair the Premises, in which event
rent shall be abated as provided above. City shall make such election whether or not to rebuild
within thirty (30) days of such damage.
If City does not elect to make such repairs, or if it reasonably appears that such repairs
cannot be made within one hundred eighty (180) days of the date of such damage, then either
party may, by written notice to the other within forty-five (45) days of the date of damage,
terminate this Lease.
XIV. NAMING RIGHTS
During the Term of this Lease, Tenant shall have the right to offer to sell and to sell the
right to name the Baseball Stadium to third parties and to retain all revenues therefrom, subject
to the provisions below. City shall have the right to approve the name and the form of any
naming rights agreement, which approval shall not be unreasonably withheld or delayed. In the
absence of a naming rights agreement, the Baseball Stadium shall continue to be named "Pasco
Stadium." Tenant may not name the Baseball Stadium after Tenant. The name of the Baseball
Stadium may not connote or be affiliated with adult content, firearms or tobacco. Upon
expiration of or earlier termination of this Lease, any naming rights agreement shall also
terminate and no longer be in force or effect.
For every professional baseball season (June through August or part thereof) (the
"Season") that a naming rights agreement exists, Tenant shall spend a minimum average of
$5,000 on capital improvements to the Baseball Stadium.
Tenant may spend such sums on capital improvements at one time and from time to time
while a naming rights agreement exists, provided that Tenant spends at least $25,000 on capital
improvements during the first five years of any naming rights agreement. By way of example,
Tenant may spend $5,000 each Season, may spend $10,000 every two Seasons, may spend
-13-
$4,000 the first Season, nothing the second Season and $11,000 the third Season, or may spend
$25,000 in a single year(and applied over a five Season period), provided that Tenant spends an
average of$5,000 for each Season and at least $25,000 during the first five Season period. If at
the end of the term of a naming rights agreement, Tenant has not spent the required amounts on
capital improvements, Tenant shall pay to City a naming rights termination fee equal to 150% of
such shortfall.
On or before February 1 of each year, Tenant shall provide City with an accounting of the
costs expended in the prior calendar year by Tenant on capital improvements to the Baseball
Stadium. At the request of City, Tenant shall provide to City with copies of invoices and other
information to substantiate the amounts so spent.
Tenant must obtain prior City approval to any capital improvements undertaken by
Tenant under this Section XIV, such approval not to be unreasonably withheld. Capital
improvements funded by Tenant under this Section XIV shall not include any capital
improvements installed by Tenant under any other provision of this Lease.
XV. DEFAULTS; REMEDIES
15.1 Defaults: Remedies.
a. Events of Default. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Tenant (an "Event of
Default"):
(i) The failure by Tenant to make any payment of Rent by the tenth
(10`h) day after such amount is due;
(ii) The failure by Tenant to make any other payment required to be
made by Tenant hereunder (other than a payment specified in subsection (i) above), including,
without limitation, Additional Rent, utility payments, insurance premiums or other charges,
within five (5) days after receiving written notice from City of such failure to pay;
(iii) The failure by Tenant to observe or perform or the violation of any
of the other covenants, conditions or provisions of this Lease to be observed or performed by
Tenant, where such failure shall continue for a period of twenty (20) days after Tenant's receipt
of written notice of default or violation from City; provided, however, that if the nature of
Tenant's obligation is such that more than twenty (20) days are required for performance, then
Tenant shall not be in default if Tenant commences performance within such 20-day period and
thereafter diligently prosecutes the same to completion and in any event completes such
performance within ninety (90) days of Tenant's receipt of such written notice; or
(iv) The failure by Tenant to use the Premises for professional baseball
purposes as a franchisee of the Northwest League.
b. Upon an Event of Default, then, without prejudice to any other remedies
which City might have, City may, at its election, declare this Lease forfeited and the Lease term
ended, and re-enter the Premises, with or without process of law, and remove all persons or
chattels therefrom.
-14-
15.2 Removal of Property.
a. In the event of any re-entry or taking possession of the Premises for
default, City shall have the right, but not the obligation, to remove from the Premises all personal
property of Tenant located therein, and may store the same in any place selected by City,
including but not limited to a public warehouse, at the expense and risk of the owners thereof,
with the right to sell such stored property, without notice to Tenant, after it has been stored for a
period of thirty (30) days or more. The proceeds of such sale to be applied first to the cost of
such sale, second to the payment of the charges for the storage, if any, and third to the payment
of any other sums of money which may then be due from Tenant to City under any of the terms
hereof, the balance if any without interest to be paid to Tenant.
b. Tenant hereby waives all claims for damages that may be caused by City's
re-entering and taking possession of the Premises or removing and storing the property of Tenant
as provided in this Lease, and will hold City harmless from loss, costs or damages occasioned
City thereby. No such reentry shall be considered or construed to be a forcible entry.
15.3 City May ReLet. In such case of re-entry, City may relet the Premises upon such
terms as it sees fit, for a term which may expire either before or after the expiration date of this
Lease, and to such persons or entities as it desires, including without limitation another
professional baseball league.
15.4 Tenant Still Liable for Rent. City shall not be liable for damages by reason of
such re-entry. Notwithstanding any such re-entry by City, the liability of Tenant for the Rent
provided for herein shall not be extinguished for the balance of the Lease Term. Tenant agrees
to pay to City any deficiency arising from a re-entry and re-letting of the Premises at a lesser
rent, and Tenant shall pay such deficiencies each month as the amount thereof is ascertained by
City.
15.5 Tenant to Pay Cost of ReLetting. Upon reletting Tenant shall be immediately
liable to pay to City the cost and expense of reletting and of such repairs as may be incurred by
City in readying the Premises for reletting.
15.6 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive, but shall, where ever possible, be cumulative with all other remedies at law or in
equity.
15.7 Default by City. City shall not be in default unless City fails to perform
obligations required of City within twenty (20) days after written notice by Tenant to City,
provided, however, that if the nature of City's obligation is such that more than twenty (20) days
are required for performance then City shall not be in default if City commences performance
within such 20-day period and thereafter diligently prosecutes the same to completion. If City
fails to cure any such default within the allotted time, Tenant may cure such default itself and
offset the cost thereof against Rent payable hereunder.
-15-
XVX. HAZARDOUS SUBSTANCES
16.1 Hazardous Substances.
a. Tenant shall not dispose of or otherwise allow the release of any
hazardous waste or materials in, on or under the Premises, or any adjacent property, or in any
improvements placed on the Premises, in violation of applicable law. Tenant represents and
warrants to City that Tenant's intended use of the Premises does not involve the use, production,
disposal or bringing on to the Premises of any hazardous waste or materials in violation of
applicable law. As used herein, the term "hazardous waste or materials" includes any substance,
waste or material defined or designated as hazardous, toxic or dangerous (or any similar term) by
any federal, state or local statute, regulation, rule or ordinance now or hereafter in effect. Tenant
shall promptly comply with all statutes, regulations and ordinances, and with all orders, decrees
or judgments of governmental authorities or courts having jurisdiction, relating to the use,
collection, treatment, disposal, storage, control, removal or cleanup of hazardous waste or
materials, in, on or under the Premises or any adjacent property, or incorporated in any
improvements, at Tenant's expense.
b. After notice to Tenant and a reasonable opportunity for Tenant to effect
such compliance, City may, but is not obligated to, enter upon the Premises and take such actions
and incur such costs and expenses to effect such compliance as it deems advisable to protect its
interest in the Premises; provided, however that City shall not be obligated to give Tenant notice
and the opportunity to effect such compliance if(i) such delay might result in material adverse
harm to City or the Premises, (ii) Tenant has already had actual knowledge of the situation and a
reasonable opportunity to effect such compliance, or (iii) an emergency exists. Whether or not
Tenant has actual knowledge of the release of hazardous waste or materials on the Premises or
any adjacent property as the result of Tenant's use of the Premises, Tenant shall reimburse City
for the frill amount of all costs and expenses incurred by City in connection with such
compliance activities, and such obligation shall continue even after the termination of this Lease.
Tenant shall notify City immediately of any release of any hazardous waste or materials on the
Premises.
C. Notwithstanding the foregoing, Tenant shall not be responsible for any
cleanup, liabilities, claims, damages, costs and expenses of any kind or nature that arise or result
from any contamination of the Premises or surrounding property by hazardous waste or
materials, except for such contamination that is caused by Tenant or its employees or agents. If
Tenant cannot operate the Baseball Stadium because of contamination of the Premises or
surrounding property by hazardous waste or materials not caused by Tenant or its employees or
agents, Tenant shall have the right to terminate this Lease without further liability hereunder.
XVII. OTHER PROVISIONS
17.1 Surrender of Premises. At the expiration of the term of this Lease, or at the earlier
termination of this lease, Tenant shall surrender the Premises in good condition, reasonable wear
and tear excepted.
17.2 Intentionally Deleted.
-16-
17.3 Liens and Solvency. Tenant shall keep the Premises free from any liens arising
out of any work performed, materials furnished or obligations incurred by Tenant and hold City
harmless therefrom including all costs and attorney's fees. In the event Tenant becomes
insolvent, voluntarily or involuntarily bankrupt, or if a receiver, assignee or other liquidating
officer is appointed for the business of Tenant, then City may cancel this Lease at City's option
and Tenant shall nevertheless be liable for any further losses or damages sustained by City so
caused by Tenant.
17.4 Assignment. Tenant shall have the right to assign this Lease or let or sublet the
whole or part of the Premises with the written consent of City, which consent may not be
unreasonably withheld. Notwithstanding the foregoing, City shall consent to any assignment or
sublease of this Lease by Tenant: (a) to any entity controlled by Tenant that owns the Team; and
(b) to any purchaser of the Team that (i)has been approved by the National Association of
Professional Baseball, (ii) holds a franchise to operate such team by the Northwest League, and
(iii)has retained a management team with prior experience managing a professional sports team
to operate such team. Any purported assignment or sublet shall be of no effect if not consented
to by City. Any assignment or sublet of this Lease shall not extinguish or diminish the liability
of Tenant hereunder.
17.5 Non-Waiver. The failure of either party to insist upon strict performance of any
of the covenants and agreements of this Lease, or to exercise any option herein conferred in any
one or more instances, shall not be construed to be a waiver or relinquishment of any such, or
any other covenants or agreements, but the same shall be and remain in full force and effect.
17.6 Costs and Attorney's Fees. All costs and expenses, including attorneys' fees at
trial and on appeal in a reasonable amount, incurred by City or by Tenant in enforcing the
obligations of Tenant or City under this Lease, shall be paid by the defaulting party to the
prevailing party upon demand. The venue of any legal action brought under the terms of this
Lease shall be in the county in which the Premises are situated.
17.7 Transfer by City. If City shall assign its interest under this Lease or transfer its
interest in the Premises, such transferee shall be required to assume all obligations of City under
this Lease, City shall be relieved of any obligation accruing hereunder after such assignment or
transfer, and such transferee shall thereafter be deemed to be City hereunder.
17.8 Heirs and Successor. Subject to the provisions hereof pertaining to assignment
and subletting, the covenants and agreements of this Lease shall be binding upon the heirs, legal
representatives, successors and assigns of any or all of the parties hereto.
17.9 Holdover. If Tenant shall, with the written consent of City, holdover after the
expiration of this [.,ease, such tenancy shall be on a month-to-month tenancy, which tenancy may
be terminated by either party upon twenty (20) days notice to the other party. During such
tenancy Tenant agrees to pay to City the same rental as provided herein, unless a different rent is
agreed upon, and to be bound by all of the applicable terms and conditions of this Lease.
17.10 Mutual Release and Waiver. To the extent a loss is covered by insurance in force,
City and Tenant hereby mutually release each other from liability and waive all right of recovery
against each other for any loss from perils insured against under their respective fire or other
insurance policies, including any causes of loss forms attached thereto; provided, that this
-17-
agreement shall be inapplicable if it would have the effect of invalidating any insurance coverage
of City or Tenant
17.11 Notices. All notices under this Lease shall be in writing and shall be deemed to
have been duly given if personally delivered, sent by confirmed facsimile, overnight courier
services or registered or certified mail, postage prepaid, and shall be deemed given upon delivery
if personally delivered, upon the earlier of actual receipt or one day after it is sent, if sent by
overnight courier or confirmed facsimile, or three days after it is sent by registered or certified
mail. All notices or other communications shall be made as follows:
If to City: City of Pasco
525 North P Avenue
Pasco, Washington 99301
Attention: City Manager
Facsimile No.: (509) 545-3403
If to Tenant: Northwest Baseball Ventures I, LLC
6200 Burden Blvd.
Pasco, WA 99301
Attention: President
Facsimile No.: (509) 547-9570
17.12 Compliance with Laws. All operations or activities upon, or any use or
occupancy of the Baseball Stadium and Premises, or any portion thereof, by Tenant or any
person claiming through Tenant shall be in all material respects in compliance with all state,
federal and local laws, ordinances, rules, regulations, permits, standards, and requirements.
17.13 Indemnification.
a. Tenant agrees to and shall indemnify, defend and hold City, City's
successors and assigns, and the, officers, employees, agents and contractors of City, harmless
from and against any and all claims (including without limitation third parry claims for death,
personal injury or real or personal property damage), actions, administrative proceedings
(including both formal and informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs,.liabilities (including sums paid in settlements of claims), interest or losses,
including reasonable attorneys' and paralegals' fees and expenses (including any such fees and
expenses incurred in enforcing this Agreement or collecting any sums due hereunder), consultant
fees, and expert fees, together with all other costs and expenses of any kind or nature that arise
directly or indirectly from or in connection with (i) Tenant's use, occupation and/or control of
the Premises during events other than Community Events, and including without limitation any
injury or claim of injury to person or property, of any nature and howsoever caused, (ii) from any
breach of the terms of this Lease, or (iii)any violation of any governmental or insurance
requirements by Tenant, its sublessees, assignees, invitees, agents, employees, contractors, or
licensees, provided that such indemnity shall not extend to matters that may arise out of the gross
negligence or willful acts of City or City's agents, employees or contractors.
b. City agrees to and shall indemnify, defend and hold Tenant, Tenant's
successors and assigns, and the directors, officers, shareholders, employees, agents and
-18-
contractors of Tenant, harmless from and against any and all claims (including without limitation
third party claims for death, personal injury or real or personal property damage), actions,
administrative proceedings (including both formal and informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, liabilities (including sums paid in settlements
of claims), interest or losses, including reasonable attorneys' and paralegals' fees and expenses
(including any such fees and expenses incurred in enforcing this Agreement or collecting any
sums due hereunder), consultant fees, and expert fees, together with all other costs and expenses
of any kind or nature that arise directly or indirectly from or in connection with (i) City's use,
occupation and/or control of the Premises during a Community Event, and including without
limitation any injury or claim of injury to person or property, of any nature and howsoever
caused, (ii) from any breach of the terms of this Lease, or (iii) any acts arising from the gross
negligence or willful misconduct of City, provided that such indemnity shall not extend to
matters that may arise out of the gross negligence or willful acts of Tenant or Tenant's agents,
employees or contractors.
17.14 Time is of the Essence of this Lease. Time is of the essence in the performance of
all obligations of Tenant and City under this Lease.
17.15 City Approvals. City shall, from time to time, designate one or more people who
are authorized on behalf of City to give consents or approvals required of City hereunder. Such
designation shall remain effective until such time as City notifies Tenant in writing of a new
designee or designees. At the outset, City's designee shall be Gary Crutchfield, City Manager.
17.16 Force Majeure. Notwithstanding anything in this Lease to the contrary, each
party's obligations to perform under this Lease shall be excused to the extent that such
performance is prevented, delayed or rendered impracticable by events beyond that party's
reasonable control, provided such party shall have exercised all reasonable efforts to avoid such
events. Such events shall include, without limitation, inclement weather, acts of God, strikes,
civil commotion, riot, war and any other cause whether similar or dissimilar to those enumerated
that is reasonably beyond the control of the party obligated to perform. Force Majeure shall not
include financial inability to perform (regardless of the cause) and shall not apply to defaults
arising out of the loss by Tenant of its franchise to operate a professional baseball team with the
Northwest League.
17.17 Counterparts, This Lease may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. This Lease or any counterpart may be executed and delivered by facsimile
transmission with an executed hard copy to follow.
-19-
IN WITNESS WHEREOF, City and Tenant have executed this Lease the day and year
first above written.
CITY OF PASCO
By:
Its:
NORTHWEST BASEBALL VENTURES I LLC,a
Washington limited liability company
By:
Its:
EXHIBITS AND SCHEDULE:
Exhibit A — Legal Description of Property
Exhibit B — List of Included Equipment
Exhibit C — Concourse Exterior Wall Advertising Area
Exhibit D — Intentionally Blank
Exhibit E — Field Maintenance Standards (two pages)
Exhibit F — Parking Area
Schedule 1 — 2008 Soccer Tournament Dates
Schedule 2 — MLB Tax
-20-
STATE OF WASHINGTON
ss.
COUNTY OF FRANKLIN
I certify that I know or have satisfactory evidence that is the
person who appeared before me, and said person acknowledged that said person signed this
instrument, on oath stated that said person was authorized to execute the instrument and
acknowledged it as the of City of Pasco, a municipal corporation, to be
the free and voluntary act of such City for the uses and purposes mentioned in the instrument.
Dated this day of , 2008.
(Signature of Notary)
(Legibly Pont or Stamp Name of Notary)
Notary public in and for the State of Washington,
residing at
My appointment expires
-21-
STATE OF WASHINGTON
ss.
COUNTY OF FRANKLIN
I certify that I know or have satisfactory evidence that is the person
who appeared before me, and said person acknowledged that said person signed this instrument,
on oath stated that said person was authorized to execute the instrument and acknowledged it as
the of Northwest Baseball Ventures I LLC, a Washington limited liability
company to be its free and voluntary act for the uses and purposes mentioned in the instrument.
Dated this day of 12009.
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the State of Washington,
residing at
My appointment expires
-22-
Exhibit A
Legal Description
Pasco Baseball Stadium
(without Parking Lot)
The South 700 feet of the North 1850 feet of the West 550 feet of the East 1043± feet of the
northwest corner of Section 15, Township 9 North, Range 29 East W.M. Franklin County,
Washington.
EXHIBIT A
Exhibit B
Baseball Equipment
Batting Cage: Full cover batting cage with minimum dimensions of 18' wide, 14' deep and
9' high. It is recommended that the cage be portable and made of aluminum
frame to provide maximum maintainability.
Field Screens: Pitching Screen: 7' high x 8' wide with 4' x 4' notch in upper corner.
Double Play Screen: 7' high x 14' wide with hinged wings.
First Base Screen: 7' high x 8' wide.
Shag Protector Screen: 7' high x 8' wide.
EXHIBIT B
Exhibit C
Concourse 1 Y Area
West Side
East Side
EXHIBIT C
. _ ��.� �. �I 1 T�.r� t r 7•Y�I— I
';{ � if' j���w�'•+pl .+ilt?a�.rvl...►6we."!,a^ K'.r�!.,:�.rk_ N°i.+yi�..s.,•�r.r r�yrA.adH�`y�,y .rA:w,Y...1�,, ,��
'..Z Iry•'1�� wt� ')'�1•,Y �r tom—.vr�'�N r`i'i... t� A•.v.
Exhibit D
Intentionally Blank
EXHIBIT D
Exhibit E
Tri-Cities Baseball Stadium
Maintenance Standards
PROGRAM FREQUENCY DETAIL
Fertilizing April—October Application of complete NPK fertilizer
with trace minerals at 7 lbs. per 1,000 sq.
ft. monthly in April, June, July and
August. Equivalent to ESN 18-3-15. In
October equivalent to 20-5-15 at 7 lbs.
per 1,000 sq. ft. Apply quick release
fertilizer at rate of 7 lbs. per 1,000 sq. ft.
in front of pitchers mound or any other
worn areas.
Aeification May—October Monthly in May, June, July and October.
Flag all irrigation heads prior to
aerification. Do not aerify clay areas.
Mowing March — October March—April mow at 2" height. Two
weeks prior to team practice mow at 1-
1/2" and maintain until October. Mow
playing field minimum of every other day
and all other areas twice per week.
Edging May— September Edge all base paths and infield perimeter
twice per month.
Irrigation March—October Irrigate as needed but no less than 4 times
per week for 1 hr. Immediately repair
system as needed.
Chemical March—November Identify turf problems and correct
Applications immediately. Apply fungicide 15`week of
November. Apply penetrating agent or
other chemicals as needed.
EXHIBITS
Game Day May— September l. Drag and water infield as needed.
Field Preparation 2. Wash loose dirt back into grass at dirt
infield grass transition areas.
3. Cover area in front of pitchers mound
during practice and pre game warm
UP.
4. Drag and clean all red rock warning
track areas.
5. Line infield as per baseball standards.
6. Paint outfield out-of-play lines
weekly or as needed.
Miscellaneous Year Round 1. Apply a minimum of 2 tons soil
conditioner to the top 1" of all infield
clay areas.
2. Repair safety net and wall pads as
needed.
3. Overseed all areas at the rate of 25
lbs. per acre. Seed mixture to be
approved by City based on turf
analysis.
4. Spray fence lines with herbicide twice
a year or as needed.
EXHIBIT E
Exhibit F
Parking Area
fi�dlT ONLY
• PARKING LOT
t
T OMt.Y
XHI IT F
SCHEDULEI
2008 SOCCER TOURNAMENT DATES
SCHEDULEI
SCHEDULE2
MLB TAX SCHEDULE
• 2008: 6%
2009: 6%
- 2010: 6.5%
- 2011-2014: 7%
SCHEDULE2