HomeMy WebLinkAboutFranklin County TRAC Financing Lease 1994TRAC FACILITY
FINANCING LEASE
by and between
FRANKLIN COUNTY, WASHINGTON, as Lessor
and
THE CITY OF PASCO, WASHINGTON, as Lessee
Foster Pepper & Shefelman
Rp� �_,, 1111 Third Avenue, Suite 3400
E V E i V 9`�p E� Seattle, Washington 96101
OCT 11 1994
CITY CLERK'S OFFICE
Table of Contents
Page (s)
ARTICLE
I
EFFECTIVE DATE: LEASED TRAC FACILITY . . . .
. 3
1.1 Effective Date . . . . . . . . .
. 3
1.2 Lease of TRAC Facility . . . . . . . .
. 3
ARTICLE
II
DEFINITIONS . . . . . . . . . . . . . . .
. 3
2.1 Definitions . . . . . . . . . . . . . .
. 3
ARTICLE
III
TRAC Facility . . . . . . . . . .
. 4
3.1 Plan and Specifications . . . . .
. 4
3.2 Construction of the TRAC Facility . . .
. 5
3.3 Alteration of Planned Improvements . .
. 5
3.4 City Disclaimer . . . . . . . . . . . .
. 5
3.5 County Disclaimer . . . . . . . . . . .
. 5
ARTICLE
IV
LEASE TERM . . . . . . . . . . . . . . . . .
. 5
ARTICLE
V
POSSESSION . . . . . . . . . . . . . . . . .
. 5
ARTICLE
VI
RENTAL PAYMENTS . . . . . . . . . . . . . . .
. 6
6.1 Rental Payments . . . . . . . . . . . .
. 6
6.2 Aggregate Amount of Rent . . . . . . .
. 6
6.3 Rent Payment and Pledge . . . . . . . .
. 6
6.4 optional Prepayment of Rent . . . . . .
. 7
ARTICLE
VII
TAXES, ASSESSMENTS AND UTILITIES . . . . . .
. 8
7.1 Taxes and Assessments . . . . . . . . .
. 8
7.2 Utilities . . . . . . . . . .
. 8
7.3 County Responsibilities . . . . . . . .
. 8
ARTICLE
VIII
ASSIGNMENT AND SUBLETTING . . . . . . . . .
. 8
8.1 No Assignment Without Consent . . . . .
. 8
ARTICLE
IX
LIENS AND ENCUMBRANCES . . . . . . . . . . .
. 9
ARTICLE
X
EMINENT DOMAIN . . . . . . . . . . . . .
. 9
10.1 Substantial or Total Taking . . . . . .
. 9
10.2 Right of Eminent Domain Not Limited . .
. 9
ARTICLE
XI
DEFAULT BY CITY . . . . . . . . . . . . . . .
. 9
11.1 Defaults . . . . . . . . . . . . . . .
. 9
11.2 Waiver . . . . . . . . . . . . . . . .
. 10
11.3 Force Majeure . . . . . . . . . . . . .
. 10
ARTICLE
XII
CITY'S OPTION TO EXTEND TERM OF THE LEASE . .
. 11
-i-
Page (s)
ARTICLE
XIII CITY'S OPTION TO PURCHASE LEASED PROPERTY . . .
11
13.1 Option to Purchase . . . . . . . . . . .
11
13.2 Exercise of Option . . . . . . . . . . .
12
13.3 Conveyance of the Leased Property . . . .
12
13.4 Failure to Exercise Option to Purchase
12
ARTICLE
XIV NATURE OF LEASE . . . . . . . . . . . . . . . .
12
14.1 Performance Under Lease . . . . . . . . .
12
14.2 Lease Nonterminable . . . . . . . . . . .
13
ARTICLE
XV ACCESS BY LESSOR . . . . . . . . . . . . . . .
13
ARTICLE
XVI SURRENDER OF LEASED PROPERTY . . . . . . . . .
13
ARTICLE
XVII OWNERSHIP OF IMPROVEMENTS . . . . . . . . . . .
13
ARTICLE
XVIII QUIET ENJOYMENT . . . . . . . . . . . . . . . .
14
ARTICLE
XIX HAZARDOUS WASTE . . . . . . . . . . . . . . . .
14
ARTICLE
XX MISCELLANEOUS . . . . . . . . . . . . . . . . .
15
21.1 Notices . . . . . . . . . . . . . . . . .
15
21.2 No Joint Venture . . . . . . . . . . . .
15
21.3 No Merger . . . . . . . . . . . . . . . .
15
21.4 Interest . . . . . . . . . . . . . .
15
21.5 Covenant Regarding Tax -Exempt Status of
Lease Payments . . . . . . . . . . . . .
16
21.6 Amendment . . . . . . . . . . . . . . . .
16
21.7 Entire Agreement . . . . . . . . . . . .
16
21.8 Partial Invalidity . . . . . . . . . . .
16
21.9 Attorneys' Fees . . . . . . . . . . . . .
16
21.10 Recording . . . . . . . . . . . . . . . .
16
21.11 Governing Law, Time . . . . . . . . . . .
17
21.12 No Waiver of Rights . . . . . . . . . . .
17
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
0113557.03
-11-
TRAC FACILITY
FINANCING LEASE
by and between
FRANKLIN COUNTY, WASHINGTON, as Lessor
and
THE CITY OF PASCO, WASHINGTON, as Lessee
THIS FINANCING LEASE (the "Lease") is made as of this
Firs.}- day of Oc.4-ober , 1994, by and between Franklin
County, Washington (the "County"), a municipal corporation duly
formed and existing under the laws of the State of Washington, and
the City of Pasco, Washington (the "City"), a municipal corporation
organized under the laws of Washington.
WHEREAS, by Resolution No. afl9 gni Q*64
Ns I the City has determined that it is in the best
interests of the citizens of the City to join with the County in
providing for the financing, acquisition, and operation of a public
trade, recreation and agricultural center, consisting of an exhibit
hall, a multipurpose arena, and a central core public facility,
together with contiguous parking and ancillary improvements, and
personal property owned or hereafter acquired, constructed or
installed (collectively, the "TRAC Facility"); and
WHEREAS, the City is authorized by RCW 35.42.200 to execute
leases for a period of years, with or without an option to purchase
with the State or any of its political subdivisions, or with any
private party for the lease of any real or personal property, or
property rights, which statute provides that for leases that
finance .the acquisition of property by a city, the aggregated
portions of lease payments over the term of the lease which are
allocable to principal will constitute debt, which may not result
in a total indebtedness in excess of one and one-half percent of
the taxable property of such city; and
WHEREAS, in order to preserve debt capacity, the City desires
to structure the financing of the acquisition of' property
0113557.03
(including the acquisition of improvements) by means of the City's
entering into a lease that will finance the acquisition of and
improvement to an undivided one-half interest in the TRAC Facility
(to be defined more specifically in this Lease) by the City and
that will secure a portion of limited tax general obligation bonds
to be issued by the County to pay a part of the costs of the TRAC
Facility; and
WHEREAS, the County owns all right, title and interest in the
land on which the TRAC Facility is to be constructed (the
"Premises"); and
WHEREAS, the County and the City have entered into an
Interlocal Cooperation Agreement under which the County will issue
its limited tax general obligation bonds in the estimated amount of
$2,400,000 and its unlimited tax general obligation bonds (if
approved by the voters of the County) in the estimated amount of
$3,900,000, the net principal proceeds of which, together with a
State of Washington grant, will pay the cost of acquiring,
constructing and equipping the TRAC Facility on the Premises (the
"Construction Costs,,); and
WHEREAS, the City and its taxpayers desire to share in paying
those Construction Costs, both by supporting the approval and
issuance of the County's unlimited tax general obligation bonds,
under which County taxpayers owning property in the City will pay
approximately one-third of the debt service, and acquiring an
undivided one-half interest in the TRAC Facility from the County;
and
WHEREAS, the City does not presently have the debt capacity to
issue its limited tax general obligation bonds to pay the
$1,200,000 acquisition price for that undivided one-half ownership
interest in the TRAC Facility, but does have allowable statutory
authority to enter into this Lease and incur indebtedness under RCW
35.42.200; and
WHEREAS, the County is authorized, p rsuant to its Resolution
No. OkLt- 12.10 adopted 'i Awn 1994, and the City iisa4���c�
authorized, pursuant to its 6!eelii � No. �210ct ,
JAV% 31 1994, to enter into this Lease and to comply fully with
the terms hereof;
NOW, THEREFORE, pursuant to law and for and in consideration
of the promises, covenants and conditions hereinafter contained,
the parties hereto agree as follows:
0113557.03
2
ARTICLE I
EFFECTIVE DATE: LEASED TRAC FACILITY
1.1 Effective Date. This Lease and all of the terms and
conditions hereof shall become effective as of the date first set
forth above.
1.2 Lease of TRAC Facility. The County leases to the City,
and the City leases from the County, an undivided one-half interest
in the entire TRAC Facility located on the Premises. The TRAC
Facility is subject to all easements, reservations, and
encumbrances and restrictions of record.
ARTICLE II
2.1 Definitions. For purposes of this Lease, the terms
defined in this Article, except as herein otherwise expressly
provided, shall have the following meanings:
"City" means the City of Pasco, Washington, an optional
municipal code city duly organized and existing under the laws of
the State of Washington.
. "County" means Franklin County, Washington, a municipal
corporation, duly organized and existing under the laws of the
State of Washington.
"Events of Default" means those occurrences described in
Article XI giving rise to the County's remedies.
"Interlocal Cooperation Agreement" means the "Interlocal
Cooperation Agreement between the City of Pasco and Franklin
County, Washington, Regarding the Financing, Acquisition and
Ownership of a Multi -Purpose Arena Exhibition Facility",
executed by the County as ofOc T S , 1994, and by the City as
of 2 1994, as that eemen�t"may be amended from time
to time. T'S✓
.l
"Lease" means this Financing Lease for the TRAC Facility by
and between the City and the County under which an undivided one-
half interest in the TRAC Facility together with improvements
thereon is being leased by the County to the City with an option to
purchase, dated as of this date.
"Leased Property" means an undivided one-half interest in the
TRAC Facility.
0117557.03
"Lease Term" means the lease term of this Lease which shall
commence, on this date, and which ends on the expiration or sooner
termination of this Lease.
"Obligations" means the County's $2,400,000 par value Limited
Tax General obligation Bonds, 1994, issued to pay part of the
costs of the TRAC Facility.
"Premises" means the real property owned by the County and
described in Exhibit B.
"Rent" means the amount of rent payable by the City to the
County hereunder, as set forth on the Rent Schedule attached as
Exhibit C and incorporated herein by this reference.
"Rent Payment Date" means three business days prior to the
dates principal and/or interest are due and payable on the
Obligations.
"Rent Schedule" means the schedule set forth as Exhibit C
hereto, setting forth each Rent Payment Date that Rent is payable
by the City hereunder in accordance with Article VI hereof.
"TRAC Facility" means, collectively, the improvements as
generally described in Exhibit A of this Lease, but does not
include the Premises.
"Transaction Costs" means the reasonable out-of-pocket costs
of the County for paying, purchasing, calling or defeasing all or
part of the obligations as a result of the City's exercising its
option to prepay Rent.
ARTICLE III
TRAC Facility
3.1 Plan and Specifications. The County shall proceed with
carrying out its duties under the Interlocal Cooperation Agreement
by designing and constructing the TRAC Facility on the Premises,
subject to the provision of the Interlocal Cooperation Agreement.
Following the effective date of this Lease the County shall
undertake all action necessary to obtain any required construction
permits and authorization from any federal, state or municipal
government or department or subdivision having jurisdiction over
the Premises and TRAC Facility, including without limitation, the
preparation of an environmental impact statement, if required, for
construction of the TRAC Facility as provided in the Interlocal
Cooperation Agreement.
0113557.03
3.2 Construction of the TRAC Facility. The County shall
commence construction of the TRAC Facility promptly following
receipt of all necessary permits, and shall thereafter construct
the TRAC Facility as described in Exhibit A. The TRAC Facility
shall in all respects comply with all municipal, state and federal
laws, ordinances, rules and regulations applicable thereto,
including, without limitation, the preparation of an environmental
impact statement, if required.
3.3 Alteration of Planned Improvements. Subject to the
provisions of the Interlocal Cooperation Agreement, the County may
alter all or any part of the TRAC Facility described in Exhibit A.
3.4 City Disclaimer. Notwithstanding any other provision of
this Lease to the contrary, the City is under no obligation to
construct or supervise construction of the TRAC Facility, except as
set forth in this Article and the Interlocal Cooperation Agreement.
3.5 County Disclaimer. Notwithstanding any other provision
of this Lease to the contrary, the County is under no obligation to
spend any money to construct the TRAC Facility other than the
principal proceeds of its Obligations, the principal proceeds of
the County's Unlimited Tax General Obligation Bonds authorized by
the voters of a special election on February 8, 1994, and money
received by the County from the State of Washington or any other
entity for the TRAC Facility.
ARTICLE IV
LEASE TERM
4.1 The Lease Term, and the City's obligation to pay Rent
hereunder, commences on this date. This Lease, and the Lease Term,
shall expire one year after the payment of the last installment of
Rent hereunder or upon the completion of the City's purchase of the
Leased Property under Article XIII hereof, unless otherwise
terminated or extended in accordance with the terms and provisions
hereof.
ARTICLE V
POSSESSION
5.1 As of this date, the County may take possession of the
TRAC Facility on behalf of both the County and the City for the
purposes and under the provisions described and contained in the
Interlocal Cooperation Agreement.
0113557.03
5
ARTICLE VI
RENTAL PAYMENTS
6.1 Rental Payments. The City shall pay to the County, its
successors or assigns, without deduction or offset of any kind, as
Rent for the lease of the Leased Property the principal component
and the interest component payable on each Rent Payment Date as set
forth on the Rent Schedule, which is calculated to equal one-half
of the debt service due on the Obligations on each Rent Payment
Date. As reflected on the Rent Schedule, rent is payable
semiannually three business days prior to the principal and
interest payment dates for the Obligations. If the City prepays
any or all Rent under Section 6.4 hereof, or if the County redeems
or defeases any Obligations with proceeds of the obligations,
grants or refunding obligations, or with revenues of the TRAC
Facility, then the Rent Schedule shall be revised to reflect such
change. Any such revised Rent Schedule shall become effective only
upon its filing with the County and the City accompanied by a
verification of an independent certified public accounting firm
that under the revised Rent Schedule the Rent payable in each year
as shown on the revised Rent Schedule will provide for the full and
timely payment of the City's one-half share of the outstanding
Obligations.
6.2 Aggregate Amount of Rent. The aggregate amount of R_ it
payable hereunder (including the principal component but exclud ng
the interest component of all Rent reflected on the Rent Schedule)
shall not cause the City: (i) to have incurred an amount of lease
debt in excess of that permitted the City by RCW 35.42.200, as then
in effect after considering the aggregate principal component of
rental hereunder together with all other financing lease debt of
the City; or (ii) to have incurred total non -voted indebtedness in
excess of one and one-half percent of assessed valuation of the
City as prescribed by RCW 35.42.200; or (iii) to have incurred
total indebtedness in excess of the amount prescribed by
RCW 39.36.020. The City shall file a certificate to this effect
with the County upon execution of this Lease. The City represents
and warrants that it will not exceed the applicable debt limit
during the term of this Lease.
6.3 Rent Payment and Pledge.
a. The City pledges to pay Rent and any real estate
excise or leasehold taxes imposed and collected by the City
pursuant to RCW 82.46 and Ordinance No. l� Q S from,.%
hotel/motel excise taxes collected by it and from its general`
taxes levied without a vote of the City's electors. However,
the City reserves the right to use any money legally available
to provide for the payment of some or all of the Rent and
taxes. For as long as this Lease is in effect and Rent is due
0113557.03
6
and payable, the City irrevocably pledges to include in its
budget and levy the maximum hotel/motel excise tax permitted
to the City and ad valorem taxes annually within the
applicable constitutional and statutory tax limitations
provided by law without a vote of the electors of the City on
all of the taxable property within the City in an amount
sufficient, together with other money legally available and to
be used therefor, to pay when due the principal and interest
components of the Rent, and the full faith, credit and
resources of the City are pledged irrevocably for the annual
levy and collection of those taxes and the prompt payment of
that principal and interest. The obligation of the City to
pay the Rent is absolute and unconditional, and the City shall
not be entitled to any credit against Rent, abatement or
reduction thereof or set-off there against, due or alleged to
be due to or by reason of any past, present or future claims
of the City against the County or others, under this Lease or
otherwise; nor shall the obligation of the City to pay the
Rent be terminated or otherwise affected by reason of any
defect in, damage to, loss of possession or use of, or
destruction of all or any part of the TRAC Facility from
whatever cause, except as provided herein or in the Interlocal
Cooperation Agreement; nor shall the City have the right to
annul or terminate this Lease for any reason, its being.the
intention of the parties that the amounts payable hereunder
shall continue to be payable in the manner and at the times
herein provided, subject to applicable statutory and
constitutional limitations on tax levies applicable to non -
voted indebtedness and lease financings by cities.
b. Rent to be Paid to the County. The City shall make
each Rent payment to the County in such manner as to ensure
its receipt by the County on the Rent Payment Date.
/c,_+-"4& prize, o� fP06r*
6.4 Optional Prepayment ofRent. /The City shall have the
right and option to prepay the principa component of the Rent in
whole or in part, in $5,000 increments, together with any accrued
interest component„on the Rental Payment Dates.
J
rrr.rc nom oocor x•�^*rm cr•vnnrrr n•
Irrevocable notice of such intent to prepay Rent shall be
given to the County in writing not less than 60 days in advance of
the intended prepayment date. Such total or partial prepayment may
be made at any time on or after Dexu%bS r I , Zoog{ on the date set
0113557.03
for such prepayment, the City shall pay to the County in cash or
same day available funds, an amount equal to the portion of Rent to
be prepaid, together with interest thereon to the date of
prepayment and Transaction Costs.
ARTICLE VII
TAXES, ASSESSMENTS AND UTILITIES
7.1 Taxes and Assessments. If required under the Interlocal
Cooperation Agreement, the City shall pay and discharge all real
and personal property taxes, general and special assessments and
all other charges or taxes levied on or assessed against the Leased
Property and the Premises located thereon to the full extent of
installments falling due within the Lease Term. Such taxes,
assessments and other charges shall be paid and discharged before
delinquency and before any fine, interest, or penalty shall become
due or shall be imposed by operation of law for their non-payment.
By entering into this Lease, the City does not waive any exemptions
from taxes, assessments or other charges that it may have.
7.2 Utilities. During the entire Lease Term, the City shall
make such payments required of it under the Interlocal Cooperation
Agreement for all gas, water, electricity, sewer, garbage removal
and other utilities, materials and services that may be furnished
to or used or consumed on or about the TRAC Facility. By entering
into this Lease, the City does not waive any exemptions from such
charges that it may have but must pay its share of the costs
pursuant to Section 8.4 of the Interlocal Cooperation Agreement.
7.3 County Responsibilities. The County shall make all
payments required by the Interlocal Cooperation Agreement and the
taxes, assessments, fees and charges referred to in this Article
and applicable to its undivided one-half interest in the TRAC
Facility.
ARTICLE VIII
ASSIGNMENT AND SUBLETTING
8.1 No Assignment Without Consent. Neither the County's nor
the City's interests, the rights or obligations under this Lease
shall be assignable or transferable by operation of law or by any
process or proceeding of any court, or otherwise, without the prior
written consent of the County and City, which consent shall not be
unreasonably withheld, and may not be assigned or transferred to
any private person or entity.
0113557.03
ARTICLE IX
LIENS AND ENCUMBRANCES
9.1 Subject to the availability of Revenues from the TRAC
Facility and the payment of costs pursuant to Section 8.4 of the
Interlocal Cooperation Agreement, the County shall keep the TRAC
Facility free and clear of any liens and encumbrances arising out
of use, occupancy or operation of the TRAC Facility by the County
hereunder. The City shall not lien or encumber the Leased Property
except as may be permitted by the County.
ARTICLE X
EMINENT DOMAIN
10.1 Substantial or Total Taking. At any time during the
Lease Term, if all or substantially all of the TRAC Facility is
acquired or condemned by eminent domain for any public or quasi -
public purpose, the City's right of possession of the portion of
the TRAC Facility so acquired or condemned shall terminate.
However, this Lease shall remain in full force and effect with
respect to the City's obligation to pay Rent. The City shall remain
liable for payment of remaining Rent when and as due as calculated
under Article VI hereunder and the County or its assignee shall
retain the rights to collect and apply that Rent.
Any condemnation award first shall be used to redeem or
defease the then outstanding Obligations and the balance then shall
be paid to the City in proportion to its leasehold interest in the
TRAC Facility to be used by the City for any lawful purpose and,
consistent with provisions of Article VI, at the City's option may
be applied towards the prepayment, purchase or call of any
outstanding Obligations (and the remaining Rent obligation of the
City shall be reduced by the amount of such condemnation award so
applied to the payment of the Obligations).
10.2 Right of Eminent Domain Not Limited. Nothing in this
Lease shall be deemed to limit the City's power of eminent domain.
ARTICLE XI
DEFAULT BY CITY
11.1 Defaults. If (i) the City does not pay Rent by the third
business day following the Rent Payment Date; or (ii) the City
shall default in the performance or observance of any of the other
term, covenant, condition or provision of this Lease for 30 days
after written notice and demand, or if such default shall be of
such a nature that the same practicably cannot be cured within that
30 -day period and the City shall not within that 30 -day period
0113557.03
9
commence with due diligence and dispatch to cure and perform such
defaulted term, covenant, condition or agreement, or if the City
shall within that 30 -day period commence with due diligence and
dispatch to cure and perform such defaulted term, covenant,
condition or agreement and shall thereafter fail or neglect to
prosecute and complete with due diligence and dispatch the curing
and performance of such defaulted term, covenant, condition or
agreement; or (iii) there shall be filed by or against the City in
any court or other tribunal pursuant to any statute or other rule
of law, either of the United States or of any state or of any other
authority now or hereafter exercising jurisdiction, a petition in
bankruptcy or insolvency proceedings or for reorganization or for
the appointment of a receiver or trustee of all or substantially
all of the City's property, or for any other form of debtor relief,
unless such petition be filed against the City and if in good faith
the City shall promptly thereafter commence and diligently
prosecute any and all proceedings appropriate to secure the
dismissal of such petition and shall secure such dismissal within
60 days after the date of filing or the commencement of such
proceeding; or (iv) if the City makes an assignment for the benefit
of creditors; then and in any such case, at the County's option and
in addition to all other rights, or remedies, the County may,
following the expiration of any cure period, if any provided herein
for such default, reenter the Leased Property, using such force as
may be necessary, and repossess itself thereof, as of its former
estate, and remove all persons and property from the Leased
Property. Such reentry shall not constitute a termination of this
Lease, and, notwithstanding any such reentry, the liability of the
City for the Rent provided for herein shall not be extinguished for
the balance of the term of this Lease, and the City shall make good
to the County any deficiency arising from receipt by the County of
a lesser rental than that hereinbefore agreed upon. In no event
shall the City's obligation to pay Rent be accelerated.
11.2 Waiver. Neither the acceptance of Rent nor any other
actions or omissions of the County at any time or times after the
happening of any event of default under this Lease, shall operate
as a waiver of any past or future violation, breach or failure to
keep or perform any covenant, agreement, term or condition hereof,
or deprive the County of its right to take legal or equitable
action against the City, including the compelling of the setting
aside and payment of the amounts payable hereunder, upon the
written notice provided for herein including the right to declare
an event of default hereunder, at any time that an event of default
may exist, or be construed so as to at any future time estop the
County from promptly exercising any other option, right or remedy
that it may have under any term or provision of this Lease.
11.3 Force Majeure. If by reason of force maieure the City or
the County is unable in whole or in part to perform its respective
obligations under this Lease, other than (in the case of the City)
0113557.03
10
its obligation to pay Rent, the non-performing party shall not be
deemed in default during the continuance of such inability, if
notice thereof is given to the other party. The term "force
maieure" as used herein means, without limitation, the following:
acts of God; strikes, lockouts or other industrial disturbances;
acts of public enemies; orders or restraints of any kind of the
government of the United States of America or the State of
Washington or their respective departments, agencies, or officials,
or any civil or military authority; insurrections; riots;
landslides; volcanoes; earthquakes; fires; storms; droughts;
floods; explosions; breakage or accident to machinery, transmission
pipes or canals; or any other cause or event not reasonably within
the control of the non-performing party and not resulting from its
negligence. The non-performing party agrees, however, to remedy
with all reasonable dispatch the cause or causes preventing such
party from carrying out its agreements hereunder; but the
settlement of strikes, lockouts and other industrial disturbances
shall be within the discretion of the non-performing party and such
party shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the
opposing party or parties when such course is unfavorable to the
non-performing party in the judgment of that party. It is the
purpose and intent of this provision that, if the occurrence of any
such delay, the time or times for performance with respect to the
construction of the TRAC Facility and the other obligations of the
parties under this Lease, as applicable, shall be extended for the
period of the delay, if the party seeking the benefit of the
provisions of this subparagraph shall, within 20 days after the
beginning of any such delay, notify the other party in writing of
the cause or causes thereof and shall make all reasonable efforts
to correct such causes or otherwise return to full compliance with
this Lease.
ARTICLE XII
CITY'S OPTION TO EXTEND TERM OF THE LEASE
12.1 The City shall have the option upon the expiration of
the Lease to extend the Lease Term for any such period and upon
such conditions as may be agreed upon by the County and the City.
ARTICLE XIII
CITY'S OPTION TO PURCHASE LEASED PROPERTY
13.1 Option to Purchase. The City shall have the option,
subject to applicable law, to purchase the Leased Property on any
date during the Lease Term for a price equal to the amount required
to defease, prepay, call or purchase one-half of the principal of
the Obligations then outstanding, plus accrued interest thereon,
together with all the County's Transaction Costs required in
0113557.03
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connection with such defeasance, prepayment, call or purchase. The
price is referenced herein as the "Leased Property Purchase Price."
If there are no outstanding Obligations at the time the City
exercises its option to purchase the Leased Property then the
purchase price shall be $1.00.
13.2 Exercise of Option. The City shall give the County 90
days' prior written notice of its election to exercise its option
to purchase under Section 13.1 hereof in the form set forth in
Exhibit D attached hereto. The purchase price shall be paid in
cash or same-day available funds on the closing date specified in
such notice (or such other date as the City and the County may
reasonably agree).
13.3 Conveyance of the Leased Property. On the closing date
specified in the notice of election to exercise the purchase
option, or such other date as the City and the County may agree,
the County shall convey the Leased Property to the City by
statutory warranty deed, free and clear of all liens and
encumbrances, except those in existence as of the date of this
Lease and those that have been incurred under the Interlocal
Cooperation Agreement, and this Lease shall terminate. The*County
shall not be required to make any representations regarding the
conditions of the Leased Property and the City agrees to accept the
Leased Property in an "as is" condition. Nothing in this Lease
shall be construed to require the City to exercise the purchase
option herein granted. Any conveyance of the Leased Property, and
the City's ownership thereof shall be subject to the Interlocal
Cooperation Agreement.
13.4 Failure to Exercise Option to Purchase. If the City does
not exercise its option to purchase the Leased Property, then not
less than one year prior to the scheduled expiration of this Lease,
the City and the County shall consult with one another to determine
the disposition of the Leased Property following expiration of the
Lease in accordance with the terms of the Interlocal Cooperation
Agreement.
ARTICLE XIV
NATURE OF LEASE
14.1 Performance Under Lease. Except as otherwise expressly
provided in this Lease, the obligations of the City to pay Rent and
to perform and observe all other covenants and agreements of the
City contained herein shall be absolute and unconditional, and the
failure by the City to pay Rent at the time and in the amounts set
forth in the Rent Schedule as and when the same become due shall
constitute an event of default under this Lease. All Rent shall be
made without notice or demand and without set-off, counterclaim,
abatement, deduction or defense whatsoever.
0113557.03
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14.2 Lease Nonterminable. Except as otherwise expressly
provided herein, this Lease shall not terminate, nor shall the City
or the County have any right to terminate this Lease or to be
released or discharged from any obligations or liabilities
hereunder for any reason, including, without limitation, damage or
destruction of the Leased Property, it being the intention of the
parties hereto that all Rent payable by the City hereunder shall
continue to be payable in all events in the manner and at the times
herein provided unless the obligation to pay the same shall be
terminated pursuant to the express provisions of this Lease. This
Lease shall not, at the option of either or both of the parties,
terminate upon the City's exercise of its option to prepay Rent
unless all Rent is thereby paid or provided for and the portion of
the Obligations secured by the Rent under this Lease are redeemed
or defeased.
ARTICLE XV
ACCESS BY LESSOR
15.1 At any time during the term hereof the County and City
or their agents shall have the right to enter the Leased Property,
at reasonable times and upon reasonable notice, to examine the
same.
ARTICLE XVI
SURRENDER OF LEASED PROPERTY
16.1 Unless the City has extended the Lease Term under
Article XII hereof or purchased the Leased Property under Article
XIII, the City shall promptly yield and deliver to the County
possession of the Leased Property and any additional improvements
at the expiration date of this Lease.
ARTICLE XVII
OWNERSHIP OF IMPROVEMENTS
17.1 Subject to the Interlocal Cooperation Agreement and this
Lease, all improvements now or hereafter made to the Leased
Property are and shall be the property of the County (except for
the City's leasehold interest therein) during, and after the term
of this Lease, unless the Leased Property is purchased by the City
under Article XIII. Upon termination of this Lease, ownership and
title to any permanent improvements affixed to the Leased Property
shall automatically vest in the County and shall be returned to the
County as provided in the Interlocal Cooperation Agreement.
0113557.03
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ARTICLE XVIII
QUIET ENJOYMENT
18.1 subject to the Interlocal Cooperation Agreement, the
City, upon fully complying with and promptly performing all of the
terms, covenants and conditions of this Lease on its part to be
performed, shall have and quietly enjoy the Leased Property for the
term set forth herein.
ARTICLE XIX
HAZARDOUS WASTE
19.1 The operations of the County on its behalf and the
City's behalf under the Interlocal Cooperation Agreement shall
comply in all material respects with all applicable federal, state
and local laws, regulations, orders and requirements affecting or
concerning the environment, public health or safety, including but
not limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et sea.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
§ 6901 et seg.; the Toxic Substances Control Act, 15 U.S.C. § 2601
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
§ 1801 et se .; the Clean Air Act, 42 U.S.C. § 7401 et sea.; the
Clean Water Act, 33 U.S.C. § 1251 et seq.; the Washington Model
Toxics Control Act, RCW 70.105D; the Washington Hazardous Waste
Management Act, RCW 70.105; the Washington Solid Waste Management
Act, RCW 70.95; the Washington Clean Air Act, RCW 70.94; the
Washington Water Pollution Control Act, RCW 90.48; any amendments
to and regulations promulgated under the foregoing statutes; and
any other similar statute, regulation or ordinance now or hereafter
enacted.
In the event a release or threatened release of a contaminant
occurs or is otherwise discovered at the premises, the City shall
be entitled to (a) require the County to cease all operations which
pose a risk of releasing a contaminant into the environment; and/or
(b) require the County to begin an immediate cleanup of any and all
contamination at the premises to the extent necessary to achieve
full compliance with applicable environmental statutes and
regulations. The City shall be entitled to obtain immediate
injunctive relief from a court of competent jurisdiction to enforce
this provision. These remedies shall be in addition to, and not in
substitution for, any other remedies available to the City under
applicable law.
0113557.03
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ARTICLE XX
MISCELLANEOUS
21.1 Notices. Any notices required in accordance with any of
the provisions herein shall be sent by registered or certified mail
addressed to the County or the City, respectively as follows:
To the City: City of Pasco
412 W. Clark
Pasco, WA 99301
Attention: City Manager
With a copy to the City Attorney.
To the County: Franklin County
1016 North 4th Avenue
Pasco, WA 99301
Attention: Clerk of the Board of
County Commissioners
or at such other place as the County or the City may in writing
direct. All notices shall be deemed effective upon receipt,
refusal of delivery or attempted delivery.
21.2 No Joint Venture. It is not intended by this Lease to,
and nothing contained in this Lease shall, create any partnership,
joint venture or other arrangement between the County and the City
other than is provided in the Interlocal Cooperation Agreement. No
term or provision of this Lease is intended to be, or shall be, for
the benefit of any person, firm, organization or corporation shall
have any right or cause of action hereunder.
21.3 No Merger. In no event shall the interest, estate or
rights of the County hereunder merge with any interest, estate or
rights of the City as lessee under this Lease, it being understood
that such interest, estate and rights of the County shall be deemed
to be separate and distinct from the City's interest, estate or
rights as lessee under this Lease, notwithstanding that any such
interests, estates or rights shall at any time or times be held by
or vested in the same person, corporation or other entity.
21.4 Interest. If the City shall fail to pay, when the same
is due and payable, any Rent set forth in Article VI, or any
additional rent or additional sums of money to be paid by the City
under this Lease, such unpaid amounts shall bear interest from the
due date thereof until paid at the rate of one percentage point per
annum above the interest applicable to the unpaid Rent installment.
0113557.03
15
Interest on unpaid amounts covered by the Interlocal
Cooperation Agreement but not this Lease shall be as provided in
the Interlocal Cooperation Agreement.
21.5 Covenant Regarding Tax-Exempt Status of Lease Payments.
The City and the County covenant and agree that they shall take no
action to impair the tax-exempt status, if any, of the interest
component of the Rent hereunder and the obligations.
21.6 Amendment. This Lease may not be amended except by
written instrument approved by resolution duly adopted by the
County approved by City ordinance or resolution.
21.7 Entire Agreement. Except for the Interlocal Cooperation
Agreement, this Lease, any exhibits or attachments hereto and
forming a part hereof, sets forth the entire agreement of the
County and the City concerning the Leased Property, and there are
no other agreements or understandings, oral or written, between the
County and the City. Any subsequent modification of this Lease
shall be binding upon the County and the City only if reduced to
writing and signed by the party intended to be bound in the manner
authorized herein by Section 21.6.
21.8 Partial Invalidity. If any term, covenant or condition
of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term, covenant
or condition to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
21.9 Attorneys' Fees. If litigation between the City and the
County or their successors or assigns to enforce a right or rights
provided by or arising from this Lease, the nonprevailing party
=hall pay to the prevailing party reasonable attorneys' fees and
other costs and expenses of litigation, including any appeals which
may be taken. The amount of costs and attorneys' fees shall be
included in any judgment or award for the prevailing party and the
court or arbitrator in any such litigation shall determine which is
the prevailing party. Any litigation expenses, including
attorneys' fees, owed by the City to the County under this section
shall not be chargeable against the County as part of the City's
costs related to the TRAC Facility.
21.10 Recording. Upon the request of either party hereto the
other party shall join in the execution of a memorandum or so-
called "short form" of this Lease for the purposes of recordation.
That memorandum or short form of this Lease shall describe the
parties, the Leased Property and the Lease.
0113557.03
16
21.11 Governing Law, Time. This Lease and the rights of the
parties hereto shall be governed and construed in accordance with
the laws of the State of Washington. Times of day stated in this
Lease shall be the times applicable to Franklin County, Washington.
21.12 No Waiver of Rights. No course of dealing between the
parties or any delay in exercising any rights hereunder shall
operate as a waiver of any rights of any party.
IN WITNESS WHEREOF, the parties hereto have executed this
instrument as of the day and year first above set forth.
ATTEST:
Clerk,//of the Board
FRANKLIN COUNTY, WASHINGTON - Lessor
By L �
Chair Board of C tissioners
CITY OF PASCO, WASHINGTON - Lessee
/ j
�I ]
By
(VA k,aIf
0113557.03
17
STATE OF WASHINGTON )
) ss.
COUNTY OF F rc-), y\/ L f) )
On this \O day of O (Abe r , 1994, before me,
the undersigned, a Notary Public in and for the State of
Washington, duly commissioned and sworn, personally appeared
to me known to be the M AYD R
OF THE CITY OF PASCO, WASHINGTON that executed the within and
foregoing instrument, and acknowledged that instrument to be the
free and voluntary act and deed of that City, for the uses and
purposes therein mentioned and on oath stated that he/she is
authorized to execute that instrument.
WITNESS my hand and official seal hereto affixed the day and
year in this certificate above written.
.a�NED. ,.
NOTAgy'0 _`
pUBL%G 2
��� ZIq Y05,1g95G�0
\AS
F WH�N/
STATE OF WASHINGTON )
ss.
COUNTY OF
NOTARY PUBLIC in and for the State
of Washington, residing a /'�
My commission expires:
On this I(iday of (-)LAQVX L 1994, before me,
the undersigned, a Notary Public in and for the State of
Washington, duly commissioned and sworn, personally appeared
`��� YYli1�P , to me known to be the CHAIR OF THE
BOARD OF COMMISSIONERS OF THE FRANKLIN COUNTY, WASHINGTON that
executed the within and foregoing instrument, and acknowledged that
instrument to be the free and voluntary act and deed of that
County, for the uses and purposes therein mentioned and on oath
stated that he/she is authorized to execute that instrument.
WITNESS my hand and official seal hereto affixed the day and
year in this certificate above written.
NOTARY PUBLIC in and for the S' -ate
of Washington, residing atr� _ Cs
My commission expires:
0113557.03
18
EXHIBIT A
DESCRIPTION OF TRAC Facility
TRAC Facility shall mean the trade, recreation, and
agricultural center, which shall contain an exhibit hall, a multi-
purpose arena, and a central core public facility, together with
contiguous parking and ancillary improvements required in
conjunction with said facility by the County or any Governmental
Authority, and all other personal property, tangible or intangible,
that is now owned or hereafter Acquired, constructed or installed
by the County, and is used or useful in connection with the
ownership, operation and management of said facility; provided, the
term "TRAC Facility" shall not include the Premises, the commercial
activities contemplated on the Premises or Phase II.
0113557.03
EXHIBIT B
DESCRIPTION OF PREMISES
The North 1000.00 feet of the following described property: the
West 1630.00 feet of that portion of the North half and West
1630.00 feet of that portion of Southwest quarter, both lying
Northerly of the Northerly line of Interstate Highway No. 182
all in Section 15, Township 9 North, Range 29 East W.M.
Records of Franklin County, Washington. (37.5 acres more or less)
J
EXHIBIT C
RENT SCHEDULE
Rent is due three business days PRIOR to the following dates in the following amounts:
DATES
PRINCIPAL
COMPONENT
INTEREST
COMPONENT
TOTAL RENT
DUE
6/
1/95
50,321.67
50,321.67
12/
1/95
25,000.00
37,741.25
62,741.25
6/
1/96
36,903.75
36,903.75
12/
1/96
35,000.00
36,903.75
71,903.75
6/
1/97
35,731.25
35,731.25
•12/
1/97
40,000.00
35,731.25
75,731.25
6/
1/98
34,391.25
34,391.25
12/
1/98
40,000.00
34,391.25
74,391.25
6/
1/99
33,111.25
33,111.25
12/
1/99
40,000.00
33,111.25
73,111.25
6/
1/00
31,831.25
31,831.25
12/
1/00
45,000.00
31,831.25
76,831.25
6/
1/01
30,391.25
30,391.25
12/
1/01
45,000.00
30,391.25
75,391.25
6/
1/02
28,951.25
28,951.25
12/
1/02
50,000.00
28,951.25
78,951.25
6/
1/03
27,351.25
27,351.25
12/
1/03
50,000.00
27,351.25
77,351.25
6/
1/04
25,751.25
25,751.25
12/
1/04
55,000.00
25,751.25
80,751.25
6/
1/05
23,991.25
23,991.25
12/
1/05
60,000.00
23,991.25
83,991.25
6/
1/06
22,221.25
22,221.25
12/
1/06
65,000.00
22,221.25
87,221.25
6/
1/07
20,271.25
20,271.25
12/
1/07
65,000.00
20,271.25
85,271.25
6/
1/08
18,305.00
18,305.00
12/
1/08
70,000.00
18,305.00
88,305.00
6/
1/09
16,170.00
16,170.00
12/
1/09
70,000.00
16,170.00
86,170.00
6/
1/10
14,017.50
14,017.50
12/
1/10
80,000.00
14,017.50
94,017.50
6/
1/11
11,497.50
11,497.50
12/
1/11
80,000.00
11,497.50
91,497.50
6/
1/12
8,977.50
8,977.50
12/
1/12
90,000.00
8,977.50
98,977.50
6/
1/13
6,142.50
6,142.50
12/
1/13
95,000.00
6,142.50
101,142.50
6/
1/14
3,150.00
3,150.00
12/
1/14
100,000.00
3,150.00
103,150.00
12/
1/15
1.00
0.00
1.00
After 12/1/15 and before any purchase, rent shall be $1.00 per year.
EXHIBIT D
FORM OF NOTICE OF ELECTION OF OPTION TO PURCHASE
(Date)
To: Franklin County, Washington
You are notified that the City of Pasco, Washington (the
"City") has elected to exercise its option to purchase one-half
undivided interest in the TRAC Facility ("the Leased Property")
currently leased by the City pursuant to the Financing Lease (the
"Lease") by and between the City and the County dated
on (date of Paymentl This Purchase
Option is being exercised pursuant to Article XIII of the Lease.
The City is now, and on the date set forth above for payment will
be, in full compliance with all terms and conditions of the Lease.
In accordance with Article XIII, the City shall purchase that one-
half undivided interest in the TRAC Facility for a price equal tc
the Leased Property Purchase Price, as defined in the Lease.
CITY OF PASCO, WASHINGTON
By
Authorized Representative
0113557.03