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AGENDA
CITY COUNCIL REGULAR MEETING
September 22, 2020
5:00 PM, City Council Chambers
130 S Galena Street, Aspen
I.CALL TO ORDER
II.ROLL CALL
III.SCHEDULED PUBLIC APPEARANCES
IV.CITIZENS COMMENTS & PETITIONS
(Time for any citizen to address Council on issues NOT scheduled for a public hearing. Please
limit your comments to 3 minutes)
Please call: +1-720-650-7664,
Meeting number (access code): 126 107 7427
Meeting password: 81611
V.SPECIAL ORDERS OF THE DAY
a) Councilmembers' and Mayor's Comments
b) Agenda Amendments
c) City Manager's Comments
d) Board Reports
VI.CONSENT CALENDAR
(These matters may be adopted together by a single motion)
VI.A.Draft Minutes for September 8th, 2020
VII.NOTICE OF CALL-UP
VIII.FIRST READING OF ORDINANCES
IX.PUBLIC HEARINGS
IX.A.Ordinance No. 13, Series of 2020 - Vacation Rental Business License Regulations
IX.B.Ordinance #14, Series of 2020 - Isis Building Debt Refinancing
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IX.C.Ordinance #15, Series of 2020 - 2020 Supplemental Adjustment for APCHA and
Component Unit Funds
X.ACTION ITEMS
X.A.Resolution #081, Series of 2020 - Roadway for Restaurant and Retail Recovery
XI.ADJOURNMENT
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REGULAR MEETING ASPEN CITY COUNCIL SEPTEMBER 8TH, 2020
At 5:00 p.m. Mayor Torre called the regular meeting to order with Councilmembers Richards, Mesirow,
Mullins and Hauenstein joining via video conference.
PUBLIC COMMENT:
Miller Ford – Mr. Ford said he is an Aspen resident and is part of a 12-step recovery fellowship in Aspen.
He said they typically operate under anonymity, but unfortunately, he had to break that this past week.
He has gone to the county and now he is coming to the city to be allowed groups greater than 10, and a
space, to hold their meetings.
Mayor Torre thanked him for coming forward.
Ms. Ott said they are aware of the request and are working to meet the request and are looking at the
Red Brick as a potential meeting spot.
Austin Weiss said he is working closely with Sara Roy at the Red Brick and they have recently opened up
the conference rooms over the past month for different uses.
Councilwoman Mullins thanked Miller for coming forward with this as it’s an important group. She
hopes we can get it worked out ASAP considering the change in the weather.
Mayor Torre brought up the library and Miller said the library is considering it currently and it’s an ideal
spot for them to meet and he will wait to see if that passes. Mr. Ford thanked council for their help.
Lee Mulcahy – Mr. Mulcahy said he is grateful for many things. He said there is a homeless call on Friday
and sometimes Ward participates. He said the encampment faces eviction. He is bringing this to
council’s attention because St. Mary’s can’t house the homeless this winter. He mentioned he’s never
been able to get onto a citizen board. He said congrats to Skippy being voted into APCHA and the
governor’s eviction committee. He said on September 23
rd at 9 a.m. online is his appeal in court. They
can’t lose or give up.
Mayor Torre asked about the encampment and if Lee is supportive of letting it stay there. Mr. Mulcahy
said that since they don’t have access to indoor shelter, they should not be evicted.
Shawn Cox – Ms. Cox said her comments are in regard to Lee Mulcahy’s case, and that they would really
like to settle this. She owned a large apartment building in Los Angeles. She always tried to help her
section 8 tenants. She would think that the government entity would try to help their citizens to stay in
their homes.
COUNCILMEMBER COMMENTS:
Councilman Hauensteinsaid it’s snowing out and to drive safely. He’s looking forward to another season
of the Colorado Avalanche.
Councilwoman Richards said the election is drawing closer and closer. She’s here to say to check your
registration on Pitkinvotes.org to update records as necessary and to make sure they have a current and
accurate mailing address. It’s the most important thing you can do.
Councilman Mesirow said that Aspen is still behind on the census. Please fill it out. Please everyone also
vote and talk about voting. There hasn’t been a more consequential election in our lifetime.
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REGULAR MEETING ASPEN CITY COUNCIL SEPTEMBER 8TH, 2020
Councilwoman Mullins had the same message regarding the election and the census. She mentioned
that she does food distribution every Wednesday morning and said there are still a lot of families in
need right now. Phillip Supino said the census deadline is still September 30th.
Mayor Torre had the same message regarding the census and voting. 2020census.gov is where to fill out
the census and it’s simple to log in and fill it out. There is a weather watch tonight, so please be careful
on the roads. This is a great week to lay low after Labor Day since COVID is still around.
CITY MANAGER COMMENTS: None.
BOARD REPORTS:
Councilman Mesirow said in the last APCHA board meeting, they spoke about hiring the second hearing
officer.
Mayor Torre said there was a Board of Health meeting last week, which saw them dealing with children
returning to school, testing, etc. He may have an impromptu CAST meeting next week.
CONSENT CALENDAR:
Councilwoman Mullins pulled Resolution #072 and asked if the original contractor rebid the project and
PJ Murray said no. Mayor Torre asked what the term of the project is and Ms. Murray said it will take
between 20 and 25 days.
Mayor Torre pulled #078 and said it’s a large contract and he wants staff comments on the cost.
Chris Everson said there is still a large civil engineering project at hand, landscaping, irrigating, utilities,
etc., which is why the project cost is so high.
Councilman Hauenstein said he’s comfortable with this.
Councilwoman Richards motioned to approve the consent calendar, Councilwoman Mullins seconded.
Roll call vote: Hauenstein, yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
PUBLIC HEARING: Resolution #076, Series of 2020 – Vacation Rental Licensing
Phillip Supino introduced the resolution and explained that it says the council isopen to a conversation
and the conversation can take place when the ordinance is read.
Mayor Torre said we are asking for all vacation rentals to be tracked. He asked about each property
having its own business license and about batch reporting.
Councilman Hauensteinmotioned to approve Resolution #076, Councilwoman Richards seconded.
Mayor Torre opened the public hearing.
Councilman Hauenstein and Councilwoman Richards withdrew their motion and second.
Public Comment:
Tricia McIntyre – Ms. McIntyre said she is with Aspen Luxury Vacation Rentals. She said she thought this
had been talked about already for Condo Hotels and doing batch reporting. She said the most important
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REGULAR MEETING ASPEN CITY COUNCIL SEPTEMBER 8TH, 2020
question is related to sales tax. Every property should have a sales tax number related to it and several
places aren’t charging sales tax at all. She said her business is at a disadvantage because someone can
book with AirBNB or VRBO for cheaper because they aren’t charging sales tax.
Donnie Lee – Mr. Lee is the General Manager at the Gant. He is lending his support to the resolution.
This is a great first step in getting our hands around the market that is out there and not abiding by
regulations. He’s interested in a bigger conversation but wanted to lend his support tonight.
Councilwoman Mullins motioned to pass Resolution #076, Councilwoman Richards seconded.
Roll call vote: Hauenstein, yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
ORDINANCE #13, SERIES OF 2020 – Vacation Rental Code Amendments
Mr. Supino gave a reminder of the current vacation rental regulations in the City of Aspen. Pete
Strecker went over financial considerations. On February 24th, council gave direction and support for
need for business license and tax compliance, need for better permitting, minority supported exemption
for private properties under management company, majority supported exemption for Condo Hotels.
Ordinance #13 would require individually addressed properties to obtain a business license and vacation
rental permit, defines Condo Hotel and exempts Condo Hotels from individual Business License and
Vacation Rental Permit requirements. Staff recommends approval of the ordinance.
Councilwoman Richards motioned to read; Councilwoman Mullins seconded. Roll call vote: Hauenstein,
yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
City Clerk, Nicole Henning, read Ordinance #13.
Councilwoman Mullins motioned to approve Ordinance #13, Councilman Hauenstein seconded.
Roll call vote: Hauenstein, yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
ORDINANCE #14, SERIES OF 2020 – Isis Theater Building – Debt Refinancing
Mr. Strecker summarized this ordinance and recommended approval.
Councilwoman Richards motioned to read, Councilman Mesirow seconded. Roll call vote: Hauenstein,
yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
Ms. Henning read Ordinance #14.
Councilwoman Richards motioned to approve Ordinance #14; Councilwoman Mullins seconded. Roll call
vote: Hauenstein, yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
ORDINANCE #15, SERIES OF 2020 – APCHA Units
Mr. Strecker explained that this is for new software for APCHA and a million dollar increase for
repurchase of a single family unit in Burlingame.
Councilwoman Richards motioned to read Ordinance #15; Councilwoman Mullins seconded. Roll call
vote: Hauenstein, yes; Mesirow, yes; Mullins, yes; Richards, yes; Torre, yes. 5-0, motion carried.
Councilwoman Mullins motioned to approve Ordinance #15, Councilman Hauenstein seconded.
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REGULAR MEETING ASPEN CITY COUNCIL SEPTEMBER 8TH, 2020
______________________
Nicole Henning, City Clerk
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Page 1
Ordinance No. 13, Series of 2020 – Vacation Rental Business License Requirements
MEMORANDUM
TO:Mayor Torre and City Council
FROM:Pete Strecker, Director Finance Department
Phillip Supino, Director Community Development Department
MEMO DATE:September 14, 2020
MEETING DATE:September 22, 2020
RE:Vacation Rental Land Use Code Amendment: Second Reading
of Ord. No. 13, Series of 2020
REQUEST OF COUNCIL:The Finance and Community Development Departments,
request approval of a Land Use Code Amendment to the vacation rental and business
license regulations in the Land Use Code.
SUMMARY AND BACKGROUND: Staff is re-starting a process begun with Council on
November 12th, 2019. A follow-up work session was held on February 24
th, 2020. The
issue at hand is that there is currently inadequate compliance with business license and
Short-term Rental (STR) permitting regulations, reducing the taxes collected by the City
from STR businesses and undermining the City’s ability to monitor and regulate the
industry. Amending the STR regulations in the Land Use Code will provide Finance and
Community Development the tools and information required to improve tax compliance
and collect essential data about STRs in town.
After direction from Council on February 24
th and completion of public outreach to the
lodging community, the process was placed on hold due to the COVID-19 pandemic. Staff
is now presenting a revised ordinance to Council in response to previous Council direction
and public outreach. In response to public comment from lodge and management
company operators and Council support for an exemption, “Condo Hotel” units may obtain
one vacation rental permit and one business license for the total number of managed
condominium units located on the property and made available as vacation rentals. All
other Vacation Rental properties and units are required to obtain an individual and sperate
business license and vacation rental permit.
At the September 8th meeting, City Council approved Policy Resolution No. 076, Series
of 2020, providing staff direction to amend the vacation rental and definitions sections of
the Land Use Code. Council passed Ordinance No. 13, Series of 2020 on First Reading
and set the Second Reading hearing for September 22nd.
Land Use Requests and Review Procedures: All code amendments are subject to a
three-step process:
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Ordinance No. 13, Series of 2020 – Vacation Rental Business License Requirements
1.Step 1: Public Outreach is a requirement in consideration of a Policy Resolution.
The Finance Department has engaged the business community, specifically
property managers and “Condo Hotel” managers, those most directly impacted by
this change. Community Development Staff has also placed a notice regarding the
Land Use Code amendments in the Community Development Newsletter that is
emailed bi-weekly to approximately 500 local businesses and interested parties.
2.Step 2: Policy Resolution by City Council indicating if an amendment should be
pursued – Policy Resolution No. 076, Series of 2020.
3. Step 3: Public Hearing on Ordinance outlining specific code amendments.
DISCUSSION: Ordinance No. 13 requires each individually addressed residential
property or unit applying to obtain a City of Aspen Vacation Rental Permit to first
obtain a City of Aspen Business License pursuant to Municipal Code Chapter 14.08,
Business Licenses. Under the proposed ordinance, Condo-Hotels, as defined in Section
26.100.104, may obtain one vacation rental permit and one business license for the total
number of managed condominium units located on the property and made available as
vacation rentals. This exemption is in response to Council direction and public input.
The definition of “Condo Hotel” was developed in coordination with Condo Hotel operators
and aligns with related regulations and standards in the LUC for lodge properties. The
definition distinguishes between more traditional condominiumized lodges, which offer
central management for the vacation/short-term rental component of the business, and
private vacation rental properties managed by a property manager. The following
language in the definition makes this distinction: “Condo Hotels must include the following
services: common reservation system, and on-site, in-person management.” Without
both of these elements, a vacation rental must be individually licensed.
This distinction ensures that the handful of traditional Condo Hotel properties in town may
cover their properties under one license, while individually owned, private residential
properties which may be used as vacation rentals must obtain separate business
licenses. Making this distinction is essential to achieving Council’s goals with respect to
licensing, permitting, tax remittance, and regulatory compliance for vacation rentals.
At the September 8th First Reading, Council sought clarity on whether management
companies and others filing tax reports for multiple vacation rental properties. Finance
staff stated that batch reporting, whereby a management company uploads one
aggregate file including the tax data for multiple taxable vacation rentals, is permitted
under the ordinance.
Passage of the draft ordinance will ensure the Finance Deaprtment can effectively use
the new compliance software systems to collect the required taxes from all vacation rental
businesses in town. It will also provide staff with needed data about the nature and extent
of the vacation rental market to better inform future policy making.
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Ordinance No. 13, Series of 2020 – Vacation Rental Business License Requirements
FINANCIAL IMPACTS:
Finance will see an increase in Business License Fee collections and Sales and Lodging
Tax collections.
ENVIRONMENTAL IMPACTS: At this time, Staff does not anticipate any environmental
impacts associated with the proposed Land Use Code amendment.
ALTERNATIVES: Council may choose not to approve the code amendment. This would
hinder the collection of additional taxes collected by the City from STR businesses and
reduce the City’s ability to monitor and regulate the industry.
RECOMMENDATION:Staff recommends approval of Ordinance No. 13, Series of 2020
on Second Reading.
RECOMMENDED MOTION (All motions are proposed in the affirmative):
“I move to approve Ordinance No. 13, Series of 2020.”
CITY MANAGER COMMENTS:
ATTACHMENTS
None.
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Ordinance No. 13, Series of 2020
Page 1 of 3
ORDINANCE NO. 013
SERIES OF 2020
AN ORDINANCE OF THE ASPEN CITY COUNCIL AMENDING THE CITY OF ASPEN
LAND USE CODE VACATION RENTAL REGULATIONS
WHEREAS, in accordance with Chapters 26.208 and 26.310 of the City of Aspen Land
Use Code, the City Council of the City of Aspen directed the Community Development
Department to draft a Land Use Code amendment to rescind and reinstate language pertaining to
Vacation Rental properties and the requirement for each individual property address or unit to
obtain a business license; and,
WHEREAS, pursuant to Chapter 26.310, a request to amend the text of Title 26 of the
Municipal Code shall begin with Public Outreach, then a PolicyResolution reviewed and acted on
by City Council, with final action by City Council after reviewing and considering the
recommendation from the Community Development;and,
WHEREAS, pursuant to Section 26.310.020(B)(1), the Community Development
Department conducted Public Outreach publishing information on the Code amendment in the
Community Development Monthly Newsletter. The Finance Department conducted direct public
outreach to parties who would be affected by this amendment; and,
WHEREAS, pursuant to Section 26.310.020(B)(2), during a duly noticed public hearing
on September 8th, 2020, the City Council approved Policy Resolution No. 076, Series of 2020, by a
vote of five to zerorequesting a Land Use Code amendments to rescind andreinstate new language
pertaining to Vacation Rental properties and the requirement for each individual property address
or unit to obtain a business license;and,
WHEREAS, the City Council has reviewed the proposed Land Use Code amendment at 1st
Reading on September 8th, 2020 and at 2
nd Reading September 22nd, 2020 and finds that the
amendments meet or exceed all applicable standards pursuant to Chapter 26.310;and,
WHEREAS, the proposed Land Use Code amendment will foster better governance by
aiding in Finance Department data tracking and tax remittance review and creates better overall
compliance with Business Licenses and Vacation Rental property permitting; and,
WHEREAS, the proposed amendment is also consistent and compatible with the goals
and objectives of the City of Aspen and the Aspen Area Community Plan (AACP); and,
WHEREAS, the Aspen City Council finds that this Ordinance furthers and is necessary for
the promotion of public health, safety, and welfare; and
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ASPEN, COLORADO THAT:
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Ordinance No. 13, Series of 2020
Page 2 of 3
Section 1: Code Amendment Objective
The objective of the proposed Land Use Code amendment is to require each individual Vacation
Rental propertyaddress or unit obtain a business license.
Section 2:
City of Aspen Land Use Code Section 26.104.100, Definitions, is hereby amended to include the
following:
Condo Hotel. A residential Lodge use where the development is comprised of individually owned
condominium residential units within a common development, governed by a Condominium
Association, with an approved condominium plat filed with the Pitkin County Clerk and Recorder,
and in accordance with the Colorado Condominium Ownership Act, C.R.S. 38-33.
Condo Hotels must include the following services:
common reservation system; and
on-site, in-person management;
Condo Hotels must include a minimum of three of the following services and on-site amenities:
commercial kitchen or other in-house food service;
on or off-site fitness or gym facilities;
pool, hot tub, or sauna facilities;
guest lounge;
entertainment facilities accessible to guests;
bar or restaurant;
retail or services (such as guide services, concierge, equipment rental or repair, spa or
beauty facilities);
meeting, conference, entertainment, or ballroom facilities;
ground transportation services;
other amenities as may be provided to address the specific lodge needs.
As Condo Hotel units are primarily residential units, and secondarily lodge units available for
short-term occupancy, owners of Condo Hotel units are exempted from the Lodge Use maximum
occupancy period of 30 consecutive days and 90 cumulative days per calendar year.
Hotel. see Lodge and Boutique Lodge Use Categories in section 26.104.110
Lodge. see Lodge and Boutique Lodge Use Categories in section 26.104.110
Motel. see Lodge and Boutique Lodge Use Categories in section 26.104.110
Section 2:
The following shall be deleted from City of Aspen Land Use Code Section 26.104.100:
Lodge. Same as hotel.
Motel. Same as hotel.
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Ordinance No. 13, Series of 2020
Page 3 of 3
Section 3:
City of Aspen Land Use Code Section 26.575.220.D.2 is hereby amended to read as follows:
Each individually addressed residential property or unit applying to obtain
a City of Aspen Vacation Rental Permit shall first obtain a City of Aspen
Business License pursuant to Municipal Code Chapter 14.08, Business
Licenses. Condo-Hotels, as defined in Section 26.104.100, may obtain one
vacation rental permit and one business license for the total number of
managed condominium units located on the property and made available as
vacation rentals.
Section 4:
Cityof Aspen Land Use Code Section 26.575.220.E.3 is hereby deleted in its entirety.
Exceptions for Multi-family dwelling units. Multi-family dwelling units
within the same complex have the option to submit aconsolidated Vacation
Rental Permit application for multiple units managed by one local owner
representative. If multi-family dwelling units use different owner
representatives, separate applications shall be required.
Section 5:
Any scrivener’s errors contained in the code amendments herein, including but not limited to
mislabeled subsections or titles, may be corrected administratively following adoption of the
Ordinance.
Section 6: Effect Upon Existing Litigation.
This ordinance shall not affect any existing litigation and shall not operate as an abatement of any
action or proceedingnow pendingunderor byvirtueof the ordinances repealedor amended asherein
provided, and the same shall be conducted and concluded under such priorordinances.
Section 7: Severability.
If anysection, subsection, sentence, clause,phrase, or portion of this ordinanceis for anyreason held
invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a
separate,distinct and independent provision and shall not affect the validityof the remaining portions
thereof.
Section 8: Effective Date.
In accordancewith Section 4.9 of theCityof Aspen Home RuleCharter, this ordinanceshallbecome
effective thirty (30) days following finalpassage.
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Ordinance No. 13, Series of 2020
Page 4 of 3
Section 9:
A public hearing on this ordinance shall be held on the 22nd day of September 2020, at a meeting of
the Aspen City Council commencing at 5:00 p.m. in the City Council Chambers, Aspen City Hall,
Aspen, Colorado, a minimum of fifteen days prior to which hearing a public notice of the same shall
be published in a newspaper of general circulation within the City of Aspen.
INTRODUCED, READ AND ORDERED PUBLISHED as provided by law, by the City Council
of the City of Aspen on the 8
th day of September 2020.
Attest:
Nicole Henning, City Clerk Torre, Mayor
FINALLY, adopted, passed and approved September 22
nd, 2020.
Attest:
Nicole Henning, City Clerk Torre, Mayor
Approved as toform:
James R. True, City Attorney
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CITY OF ASPEN, COLORADO
ORDINANCE NO. 14
(SERIES OF 2020)
AN ORDINANCE CONCERNING THE REFINANCING OF THE CITY OF
ASPEN PUBLIC FACILITIES AUTHORITY TAXABLE CERTIFICATES
OF PARTICIPATION (ISIS THEATER PROJECT), SERIES 2007A, AND
IN CONNECTION THEREWITH AUTHORIZING THE EXERCISE OF
THE CITY’S OPTION TO PURCHASE THE ASPENFILM PROPERTY
FROM THE AUTHORITY AND THE EXECUTION AND DELIVERY OF
A SITE LEASE AGREEMENT, A LEASE PURCHASE AGREEMENT AND
OTHER DOCUMENTS RELATED THERETO.
WHEREAS, the City of Aspen, Pitkin County, Colorado (the “City”) is a duly organized
and existing home rule municipality of the State of Colorado, created and operating pursuant to
Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the
“Charter”); and
WHEREAS, pursuant to Section 10.8 of the Charter, the City is authorized to enter into
one or more leases or lease-purchase agreements for land, buildings, equipment and other property
for governmental or proprietary purposes; and
WHEREAS, for the purpose of financing the cost of acquiring certain property in the City
known as the Isis Theater Condominiums (the “Prior Project”), there has previously been executed
and delivered:
i. A Special Warranty Deed dated as of February 15, 2007, conveying the
Prior Project from CC Aspen, LLC, an Arizona limited liability company,
to the Authority (the “Leased Property”); and
ii. A Lease Purchase Agreement dated as of February 1, 2007 (the “2007
Lease”), by and between the City, as lessee, and the City of Aspen Public
Finance Authority, as Lessor (the “Authority”); and
iii. A Mortgage and Indenture of Trust dated as of February 1, 2007 (the “2007
Indenture”), by and between the Authority and The Bank of Cherry Creek,
N.A. (now UMB Bank, n.a.), as Trustee (the “2007 Trustee”); and
WHEREAS, pursuant to the 2007 Indenture, there were issued to investors the City of
Aspen Public Facilities Authority Taxable Certificates of Participation (Isis Theater Project),
Series 2007A (the “2007 Certificates”); and
WHEREAS, pursuant to the 2007 Indenture, the 2007 Certificates are subject to
redemption prior to maturity on any date on and after March 1, 2017, from moneys received by
the 2007 Trustee from exercise of the City of its option to purchase the Leased Property; and
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WHEREAS, pursuant to the 2007 Lease, the City has the option to purchase the Leased
Property and to cause the redemption of the 2007 Certificates; and
WHEREAS,a portion of the Leased Property was previously acquired by the City and
conveyed to Isis Aspen Holdings, LLC and a portion of the 2007 Certificates was redeemed in
connection with the acquisition and conveyance; and
WHEREAS, the Leased Property now consists of a condominium unit currently
subleased by the City to AspenFilm, f/k/a Independent Films, Inc. d/b/a AspenFilm (the
“AspenFilm Sublease”); and
WHEREAS, the City Council of the City (the “Council”) hereby determines that it is in
the best interests of the City and its inhabitants that the City exercise its option to acquire the
Leased Property in order to refinance the 2007 Certificates and to construct additional
improvements to the Leased Property (collectively, the “2020 Project”); and
WHEREAS, pursuant to a request for proposals from the City, Zions Bancorporation, a
national banking association (“Zions”) has proposed to fund the refinancing of the 2007
Certificates by purchasing Taxable Refunding and Improvement 2020 Certificates of Participation,
Series 2020, dated as of their date of delivery in the aggregate principal amount of not to exceed
$2,500,000 (the “2020 Certificates”) which will be issued pursuant to an Indenture of Trust (the
“2020 Indenture”) entered into by Zions Bancorporation, National Association, acting solely in its
capacity as trustee under the 2020 Indenture (the “2020 Trustee”); and
WHEREAS, concurrently with the acquisition of the Leased Property the City will (i)
enter into a Site Lease Agreement with the 2020 Trustee to lease the Leased Property to the 2020
Trustee (the “2020 Site Lease”) and (ii) enter into a Lease Purchase Agreement with the 2020
Trustee (the “2020 Lease”, and together with the “2020 Site Lease”, the “Transaction Documents”)
for the purpose of refinancing the 2007 Certificates and restructuring the City’s payments pursuant
to the 2007 Lease so as to effect certain financial benefits for the City; and
WHEREAS, pursuant to the 2020 Lease, and subject to the right of the City to terminate
the 2020 Lease and other limitations as therein provided, the City will pay certain Base Rentals
and Additional Rentals (as such terms are defined in the 2020 Lease) in consideration for the right
of the City to use the Leased Property; and
WHEREAS,the City’s obligation under the 2020 Lease to pay Base Rentals and
Additional Rentals will be from year to year only; will constitute currently budgeted expenditures
of the City; will not constitute a mandatory charge or requirement in any ensuing budget year; and
will not constitute a general obligation or other indebtedness or multiple fiscal year financial
obligation of the City within the meaning of any constitutional, statutory or Charter limitation or
requirement concerning the creation of indebtedness or multiple fiscal year financial obligation
(except as provided in Section 10.4 of the Charter concerning the limitation of City indebtedness
to 20% of the assessed valuation of taxable property in the City), nor a mandatory payment
obligation of the City in any ensuing fiscal year beyond any fiscal year during which the 2020
Lease shall be in effect; and
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WHEREAS, the 2020 Certificates will evidence proportionate interests in the right to
receive certain revenues under the 2020 Lease, will be payable solely from the sources therein
provided and shall not directly or indirectly obligate the City to make any payments beyond those
appropriated for any fiscal year during which the 2020 Lease shall be in effect; and
WHEREAS, the proceeds of the sale of the 2020 Certificates will be utilized to effect
the 2020 Project; and
WHEREAS, the Leased Property will continue to be subleased by the City to
AspenFilm, f/k/a Independent Films, Inc. d/b/a AspenFilm pursuant to an amended AspenFilm
Sublease; and
WHEREAS,Section 11-57-204 of the Supplemental Public Securities Act, constituting
Title 11, Article 57, Part 2, Colorado Revised Statutes, as amended (the “Supplemental Act”),
provides that a public entity, including the City, may elect in an act of issuance to apply all or any
of the provisions of the Supplemental Act; and
WHEREAS, there has been presented to the Council and are on file with the City Clerk
the proposed forms of Transaction Documents; and
WHEREAS, capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the 2020 Lease.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO,the following:
Section 1. Short Title. This Ordinance shall be known and may be cited by the short title
“2020 AspenFilm Lease Purchase Ordinance.”
Section 2. Recitals Incorporated. The above and foregoing recitals are incorporated
herein by reference and adopted as findings and determinations of the Council.
Section 3. Ratification and Approval of Prior Actions. All action heretofore taken (not
inconsistent with the provisions of this Ordinance) by the Council or the officers, agents or
employees of the Council or the City relating to the acquisition of the Leased Property pursuant to
the 2007 Lease, the redemption of the 2007 Certificates, the lease of the Leased Property by the
City to the Trustee pursuant to the 2020 Site Lease, the leasing of the Leased Property to the City
by the Trustee pursuant to 2020 Lease, and the financing of the costs of the 2020 Project by the
issuance of the 2020 Certificates and the execution and delivery of the Transaction Documents is
hereby ratified, approved and confirmed.
Section 4. Finding of Best Interests. The Council hereby finds and determines, pursuant
to the Constitution, the laws of the State of Colorado and the Charter, that the 2020 Project, and
the financing of the costs thereof pursuant to the terms set forth in the 2020 Lease are necessary,
convenient, and in furtherance of the City’s purposes and are in the best interests of the inhabitants
of the City and the Council hereby authorizes and approves the same.
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Section 5.Supplemental Act; Parameters. The Council hereby elects to apply all of
the Supplemental Act to the Transaction Documents and in connection therewith delegates to each
of the Mayor, the City Manager or the Finance Director of the City the independent authority to
make any determination delegable pursuant to Section 11-57-205(1)(a-i), Colorado Revised
Statutes, in relation to the Transaction Documents, and to execute a sale certificate (the “Sale
Certificate”) setting forth such determinations, including without limitation, the term of the 2020
Lease and the rental amount to be paid by the City pursuant to the 2020 Lease, subject to the
following parameters and restrictions:
a) the 2020 Lease term shall not extend beyond December 31, 2037;
b) the term of the 2020 Site Lease shall not extend more than 10 years beyond
the term of the 2020 Lease;
c) the aggregate principal amount of the Base Rentals payable by the City
pursuant to the 2020 Lease shall not exceed $2,500,000;
d) the maximum annual repayment amount of Base Rentals payable by the
City pursuant to the 2020 Lease shall not exceed $200,000;
e) the maximum total repayment amount of Base Rentals payable by the City
pursuant to the 2020 Lease shall not exceed $3,000,000;
f) the maximum interest rate on the interest component of the Base Rentals
relating to the 2020 Certificates shall not exceed 5.00%.
Pursuant to Section 11-57-205 of the Supplemental Act, the Council hereby
delegates to each of the Mayor, the City Manager or the Finance Director the independent authority
to sign or to accept a binding bid for purchase of the 2020 Certificates and to execute any
agreement or agreements in connection therewith.
The Council hereby agrees and acknowledges that the proceeds of the 2020
Certificates will be used to finance the 2020 Project and to pay other costs of issuance.
Section 6. Approval of Documents. The Transaction Documents, in substantially the
forms on file with the City Clerk, are in all respects approved, authorized and confirmed, and the
Mayor of the City is hereby authorized and directed for and on behalf of the City to execute and
deliver the Transaction Documents, in substantially the form and with substantially the same
content as on file with the City Clerk, provided that such documents may be completed, corrected
or revised as deemed necessary by the parties thereto in order to carry out the purposes of this
Ordinance.
Section 7. Authorization to Execute Collateral Documents. The City Clerk is hereby
authorized and directed to attest all signatures and acts of any official of the City in connection
with the matters authorized by this Ordinance and to place the seal of the City on any document
authorized and approved by this Ordinance. The Mayor, the City Clerk, the City Manager, the
Finance Director and other employees and officials of the City are hereby authorized and directed
to execute and deliver for and on behalf of the City any and all additional 2020 Certificates,
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documents and other papers, and to perform all other acts that they may deem necessary or
appropriate in order to implement and carry out the transactions and other matters authorized by
this Ordinance, including, without limitation, the modification or amendment of the AspenFilm
Sublease. The approval hereby given to the various documents referred to above includes an
approval of such additional details therein as may be necessary and appropriate for their
completion, deletions therefrom and additions thereto as may be approved by the City Manager or
the Finance Director prior to the execution of the documents. The execution of any instrument by
the appropriate officers of the City herein authorized shall be conclusive evidence of the approval
by the City of such instrument in accordance with the terms hereof.
Section 8.No General Obligation Debt. No provision of this ordinance, the 2020
Lease, the Indenture, or the 2020 Certificates, shall be construed as creating or constituting a
general obligation or other indebtedness or multiple fiscal year financial obligation of the City
within the meaning of any constitutional, statutory or home rule charter provision (except as
provided in Section 10.4 of the Charter concerning the limitation of City indebtedness to 20% of
the assessed valuation of taxable property in the City), nor a mandatory charge or requirement
against the City in any ensuing fiscal year beyond the then current fiscal year. The City shall have
no obligation to make any payment with respect to the 2020 Certificates except in connection with
the payment of the Base Rentals and certain other payments under the 2020 Lease, which payments
may be terminated by the City in accordance with the provisions of the 2020 Lease. No provision
of the 2020 Lease or the 2020 Certificates shall be construed or interpreted as creating an unlawful
delegation of governmental powers nor as a donation by or a lending of the credit of the City within
the meaning of Sections 1 or 2 of Article XI of the Colorado Constitution. Neither the 2020 Lease
nor the 2020 Certificates shall directly or indirectly obligate the City to make any payments beyond
those budgeted and appropriated for the City’s then current fiscal year.
Section 9.Reasonableness of Rentals. The Council hereby determines and declares
that the Base Rentals due under the 2020 Lease, in the maximum amounts authorized pursuant to
Section 5 hereof, constitute the fair rental value of the Leased Property and do not exceed a
reasonable amount so as to place the City under an economic compulsion to renew the 2020 Lease
or to exercise its option to purchase the Leased Property pursuant to the 2020 Lease. The Council
hereby determines and declares that the period during which the City has an option to purchase the
Leased Property from the Trustee (i.e., the entire maximum term of the 2020 Lease) does not
exceed the useful life of the Leased Property.
Section 10.No Recourse against Officers and Agents. Pursuant to Section 11-57-209
of the Supplemental Act, if a member of the Council, or any officer or agent of the City acts in
good faith, no civil recourse shall be available against such member, officer, or agent for payment
of the principal or interest on the 2020 Certificates. Such recourse shall not be available either
directly or indirectly through the Council or the City, or otherwise, whether by virtue of any
constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the
2020 Certificates and as a part of the consideration of their sale or purchase, any person purchasing
or selling such certificate specifically waives any such recourse.
Section 11.Repealer. All bylaws, orders, resolutions and ordinances of the City, or
parts thereof, inconsistent with this ordinance or with any of the documents hereby approved are
hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as
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reviving any bylaw, order, resolution or ordinance of the City, or part thereof, heretofore repealed.
All rules of the Council, if any, which might prevent the final passage and adoption of this
ordinance as an emergency measure at this meeting of the Council be, and the same hereby are,
suspended.
Section 12.Severability. If any provision of this Ordinance, or the application of such
provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall
not affect other provisions or applications of this Ordinance which can be given effect without the
invalid provision or application, and to this end the provisions of this Ordinance are declared to be
severable. The City Council hereby declares that it would have passed this Ordinance and each
provision thereof, even though any one of the provisions might be declared unconstitutional or
invalid. As used in this Section, the term “provision” means and includes any part, division,
subdivision, section, subsection, sentence, clause or phrase; the term “application” means and
includes an application of an ordinance or any part thereof, whether considered or construed alone
or together with another ordinance or ordinances, or part thereof, of the City.
Section 13. Interpretation. This Ordinance shall be so interpreted and construed as to
effectuate its general purpose.
Section 14. Charter Controls. Pursuant to Article XX of the State Constitution and the
Charter, all State statutes that might otherwise apply in connection with the provisions of this
Ordinance are hereby superseded to the extent of any inconsistencies or conflicts between the
provisions of this Ordinance and the Sale Certificate authorized hereby and such statutes. Any
such inconsistency or conflict is intended by the Council and shall be deemed made pursuant to
the authority of Article XX of the State Constitution and the Charter.
Section 15. Safety Clause. The Council hereby finds, determines and declares that this
Ordinance is promulgated under the general police power of the City, that it is promulgated for the
health, safety and welfare of the public, and that this Ordinance is necessary for the preservation
of health and safety and for the protection of public convenience and welfare. The Council further
determines that this Ordinance bears a rational relation to the proper legislative object sought to
be obtained.
Section 16.Electronic Signatures. In the event the Mayor, City Clerk, City Manager,
Finance Director or other employee or official of the City that is authorized or directed to execute
any agreement, document, certificate, instrument or other paper in accordance with this Ordinance
(collectively, the “Authorized Documents”) is not able to be physically present to manually sign
any such Authorized Document, such individual or individuals are hereby authorized to execute
Authorized Documents electronically via facsimile or email signature. Any electronic signature
so affixed to any Authorized Document shall carry the full legal force and effect of any original,
handwritten signature. This provision is made pursuant to Article 71.3 of Title 24, C.R.S., also
known as the Uniform Electronic Transactions Act.
Section 17. Publication. The City Clerk is ordered to publish this Ordinance in
accordance with Article IV of the Charter.
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Section 18. Effective Date. This Ordinance shall be effective thirty (30) days after final
passage of the Ordinance upon second reading by the Council, as provided in Section 4.9 of the
Charter.
INTRODUCED, READ AND PASSED ON FIRST READING by the City Council of the City
of Aspen at its regular meeting on September 8, 2020, as provided by the City’s Charter and
applicable law.
[SEAL]
By:
Mayor
Attest:
By:
City Clerk
READ, PASSED ON SECOND READING, FINALLY ADOPTED AND APPROVED AND
ORDERED PUBLISHED WITHIN 10 DAYS OF SUCH FINAL PASSAGE by the City
Council of the City of Aspen at its regular meeting on September 22, 2020, as provided by the
City’s Charter and applicable law.
[SEAL]
By:
Mayor
Attest:
By:
City Clerk
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STATE OF COLORADO )
)
COUNTY OF PITKIN )ss.
)
CITY OF ASPEN )
I, Nicole Henning, the City Clerk of the City of Aspen, Colorado, do hereby certify
that:
1.The foregoing pages are a true and correct copy of an ordinance (the
“Ordinance”) passed and adopted by the City Council (the “Council”) at a regular meeting held on
September 8, 2020.
2.The passage of the Ordinance on first reading on September 8, 2020, was
duly moved and seconded and the Ordinance was approved by a vote of _____ to _____ of the
members of the Council as follows:
Name “Yes”“No”Absent Abstain
Torre, Mayor
Ward Hauenstein
Skippy Mesirow
Ann Mullins
Rachael Richards
3.The passage of the Ordinance on second and final reading was duly moved
and seconded at a regular meeting of the Council on September 22, 2020, and the Ordinance was
approved on second and final reading by a vote of ___ to ___ of the members of the Council as
follows:
Name “Yes”“No”Absent Abstain
Torre, Mayor
Ward Hauenstein
Skippy Mesirow
Ann Mullins
Rachael Richards
4.The members of the Council were present at such meetings and voted on
the passage of such Ordinance as set forth above.
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5.The Ordinance was authenticated by the signature of the Mayor, sealed with
the City seal, attested by the City Clerk, and recorded in the minutes of the Council.
6.There are no bylaws, rules or regulations of the Council that might prohibit
the adoption of the Ordinance.
7.Notices of the meetings of September 8, 2020 and September 22, 2020, in
the forms attached hereto as Exhibit A were posted at the City Hall not less than 24 hours prior to
each meeting in accordance with law.
8.The Ordinance was published in full on September __, 2020 after first
reading, and published by title only on September __, 2020, after second reading, by posting on
the City’s internet website, www.cityofaspen.com, as provided by Section 4.10(h) of the City’s
Home Rule Charter.
WITNESS my hand and the seal of the City affixed this ____ day of September, 2020.
City Clerk
(SEAL)
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54328686.v2
54462827.v1
EXHIBIT A
(Attach Notice of Meetings of
September 8, 2020 and September 22, 2020)
23
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Kimberley Crawford, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Site and Improvement Lease is exempt from
the documentary fee.
SITE LEASE AGREEMENT
DATED AS OF OCTOBER 23,2020
BETWEEN
CITY OF ASPEN,COLORADO,
AS LESSOR
AND
ZIONS BANCORPORATION,NATIONAL ASSOCIATION,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE,
AS LESSEE
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This SITE LEASE AGREEMENT, dated as of October 23, 2020 (this “Site Lease”), is by
and between the City of Aspen, Colorado, a home rule municipality duly organized and validly
existing under the Constitution and laws of the State of Colorado (the “City”), as lessor, and Zions
Bancorporation, National Association, Denver, Colorado, a national banking association duly
organized and validly existing under the laws of the United States of America, solely in its capacity
as trustee under the Indenture (the “Trustee”), as lessee.
PREFACE
Unless the context otherwise requires, capitalized terms used herein shall have the
meanings ascribed to them herein and in the Lease Purchase Agreement, dated as of October 23,
2020 (the “Lease”) between the Trustee, as lessor, and the City, as lessee.
RECITALS
1.The City is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the City (the “Charter”).
2.Pursuant to Section 10.8 of Article X of the Charter, the City is authorized to enter
into one or more leases or lease-purchase agreements for land, buildings, equipment and other
property for governmental or proprietary purposes.
3.For the purpose of financing the cost of acquiring certain property in the City
known as the Isis Theater Condominiums (the “Prior Project”), there has previously been executed
and delivered:
a.A Special Warranty Deed dated as of February 15, 2007, conveying the
Prior Project from CC Aspen, LLC, an Arizona limited liability company, to the Authority
(the “Leased Property”); and
b.A Lease Purchase Agreement dated as of February 1, 2007 (the “2007
Lease”), by and between the City, as lessee, and the City of Aspen Public Finance
Authority, as Lessor (the “Authority”); and
c.A Mortgage and Indenture of Trust dated as of February 1, 2007 (the “2007
Indenture”), by and between the Authority and The Bank of Cherry Creek, N.A. (now
UMB Bank, n.a.), as Trustee (the “2007 Trustee”).
4.Pursuant to the 2007 Indenture, there were issued to investors the City of Aspen
Public Facilities Authority Taxable Certificates of Participation (Isis Theater 2020 Project), Series
2007A (the “2007 Certificates”).
5.Pursuant to the 2007 Indenture, the 2007 Certificates are subject to redemption prior
to maturity on any date on and after March 1, 2017, from moneys received by the 2007 Trustee
from exercise of the City of its option to purchase the Leased Property.
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6.Pursuant to the 2007 Lease, the City has the option to purchase the Leased Property
and to cause the redemption of the 2007 Certificates.
7.The Leased Property now consists of a condominium unit currently subleased by
the City to AspenFilm, f/k/a Independent Films, Inc. d/b/a AspenFilm (the “AspenFilm Sublease”).
8.The City Council of the City (the “Council”) has determined that it is in the best
interests of the City and its inhabitants that the City exercise its option to acquire the Leased
Property in order to refinance the 2007 Certificates and to construct additional improvements to
the Leased Property (collectively, the “2020 Project”).
9.The Council has determined that it is in the best interests of the City and its
inhabitants to provide for the financing the 2020 Project by entering into this Site Lease and the
Lease.
10.The City owns, in fee title, the Site (the “Site”) and the premises, buildings and
improvements located thereon, (as more particularly described in Exhibit A attached hereto, the
“Leased Property”).
11.To accomplish the 2020 Project, the Trustee will acquire a leasehold interest in the
Site by leasing the Site from the City pursuant to this Site Lease and will lease the Site back to the
City pursuant to the Lease.
12.The Trustee and the City intend that this Site Lease set forth their entire
understanding and agreement regarding the terms and conditions upon which the Trustee is leasing
the Leased Property from the City.
13.Contemporaneously with the execution and delivery of this Site Lease and the
Lease, the Trustee will execute and deliver an Indenture of Trust (the “Indenture”) pursuant to
which there is expected to be executed and delivered certain certificates of participation (the
“Certificates”) dated as of their date of delivery that will evidence proportionate interests in the
right to receive certain revenues as provided in the Indenture, will be payable solely from the
sources therein provided, and will not directly or indirectly obligate the City to make any payments
beyond those appropriated for any fiscal year during which the Lease shall be in effect.
14.The proceeds of the Certificates will be utilized for the 2020 Project as well as for
the payment of the costs of execution and delivery of the Certificates.
15.The City proposes to enter into this Site Lease with the Trustee as material
consideration for the Trustee’s agreement to lease the Leased Property to the City pursuant to the
Lease. The Trustee shall pay in full its rental payment due under this Site Lease on the date hereof
which rental payment shall be used by the City to effect the 2020 Project, all pursuant to this Site
Lease, the Lease and the Indenture.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
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Section 1.Site Lease and Terms. The City hereby demises and leases to the Trustee
and the Trustee hereby leases from the City, on the terms and conditions hereinafter set forth, the
Leased Property, subject to Permitted Encumbrances as described in Exhibit B hereto.
The term of this Site Lease shall commence on the date hereof and shall end on September
1, 2047 (the “Site Lease Termination Date”), unless such term is sooner terminated as hereinafter
provided. If, prior to the Site Lease Termination Date, the Trustee has transferred and conveyed
the Trustee’s leasehold interest in all of the Leased Property pursuant to Article 12 of the Lease as
a result of the City’s payment of (a) the applicable Purchase Option Price thereunder; or (b) all
Base Rentals and Additional Rentals, all as further provided in Section 12.2 of the Lease, then the
term of this Site Lease shall end in connection with such transfer and conveyance.
The term of any sublease of the Leased Property or any portion thereof, or any assignment
of the Trustee’s interest in this Site Lease, pursuant to Section 5 hereof, the Lease and the
Indenture, shall not extend beyond September 1, 2047. At the end of the term of this Site Lease,
all right, title and interest of the Trustee, or any sublessee or assignee, in and to the Leased
Property, shall terminate. Upon such termination, the Trustee and any sublessee or assignee shall
execute and deliver to the City any necessary documents releasing, assigning, transferring and
conveying the Trustee’s, sublessee’s or assignee’s respective interests in the Leased Property.
Section 2.Rental. The City acknowledges that the amount of $2,127,000 which has
been paid to the City or its designee constitutes full and adequate consideration for conveyance of
the leasehold interest in the Site conveyed to the Trustee pursuant to this Site Lease. The estimated
useful life of the 2020 Project exceeds the maximum term of this Site Lease.
Section 3.Purpose. The Trustee shall use the Leased Property solely for the purpose
of leasing the Leased Property back to the City pursuant to the Lease and for such purposes as may
be incidental thereto; provided, that upon the occurrence of an Event of Nonappropriation or an
Event of Lease Default and the termination of the Lease, the City shall vacate the Leased Property,
as provided in the Lease, and the Trustee may exercise the remedies provided in this Site Lease,
the Lease and the Indenture.
Section 4.Owner in Fee. The City represents that (a) it is the owner in fee of the
Leased Property, subject only to Permitted Encumbrances as described in Exhibit B hereto, and
(b) the Permitted Encumbrances do not and shall not interfere in any material way with the Leased
Property. The Trustee acknowledges that it is only obtaining a leasehold interest in the Leased
Property and pursuant to this Site Lease.
Section 5.Sales, Assignments and Subleases. Unless an Event of Nonappropriation
or an Event of Lease Default shall have occurred and except as may otherwise be provided in the
Lease, the Trustee may not sell or assign its rights and interests under this Site Lease or sublet all
or any portion of the Leased Property, without the written consent of the City.
In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not
terminated, the Trustee may sublease the Leased Property or any portion thereof, or sell or assign
the Trustee’s leasehold interests in this Site Lease, pursuant to the terms of the Lease and the
Indenture, and any purchasers from or sublessees or assignees of the Trustee may sell or assign its
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respective interests in the Leased Property, subject to the terms of this Site Lease, the Lease and
the Indenture. The City and the Trustee (or any purchasers from or assignees or sublessees of the
Trustee) agree that, except as permitted by this Site Lease, the Lease and the Indenture and except
for Permitted Encumbrances (including purchase options under the Lease), neither the City, the
Trustee, nor any purchasers from or sublessees or assignees of the Trustee will sell, mortgage or
encumber the Leased Property or any portion thereof during the term of this Site Lease.
The Trustee and any other person who has the right to use the Leased Property under this
Site Lease, at its own expense, may install equipment and other personal property in or on any
portion of the Leased Property unless it is permanently affixed to the Leased Property or removal
of it would materially damage the Leased Property, in which case it will become part of the Leased
Property.
Section 6.Right of Entry. To the extent that the Lease is terminated and this Site
Lease is still in effect, the City reserves the right for any of its duly authorized representatives to
enter upon the Leased Property at any reasonable time to inspect the same or to make any repairs,
improvements or changes necessary for the preservation thereof.
Section 7.Termination. The Trustee agrees, upon the termination of this Site Lease,
to quit and surrender all of the Leased Property, and agrees that any permanent improvements and
structures existing upon the Leased Property at the time of the termination of this Site Lease shall
remain thereon.
Section 8.Default. In the event the Trustee shall be in default in the performance of
any obligation on its part to be performed under the terms of this Site Lease, which default
continues for 30 days following notice and demand for correction thereof to the Trustee, the City
may exercise any and all remedies granted by law, except that no merger of this Site Lease and of
the Lease shall be deemed to occur as a result thereof and that so long as any Certificates are
Outstanding and unpaid under the Indenture, the Base Rentals due under the Lease shall continue
to be paid to the Trustee except as otherwise provided in the Lease. In addition, so long as any of
the Certificates are Outstanding, this Site Lease shall not be terminated except as described in
Section 1 hereof.
Section 9.Quiet Enjoyment and Acknowledgment of Ownership. The Trustee at
all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy the
Leased Property, subject to the provisions of the Lease and the Indenture, and the City hereby
acknowledges that the Trustee shall have a leasehold interest in all improvements or additions to
be built on the Leased Property subject to this Site Lease, the Lease and the Indenture.
Section 10.Trustee’s Disclaimer. It is expressly understood and agreed that (a) this
Site Lease is executed by Zions Bancorporation, National Association, solely in its capacity as
Trustee under the Indenture, and (b) nothing herein shall be construed as creating any liability on
Zions Bancorporation, National Association, other than in its capacity as Trustee under the
Indenture. All financial obligations of the Trustee under this Site Lease, except those resulting
from its willful misconduct or negligence, are limited to the Trust Estate.
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Section 11.Taxes; Maintenance; Insurance. During the Lease Term of the Lease and
in accordance with the provisions of the Lease, including Sections 9.1 and 9.3 thereof, the City
covenants and agrees to pay any and all taxes, assessments or governmental charges due in respect
of the Leased Property and all maintenance costs and utility charges in connection with the Leased
Property. In the event that (a) the Lease is terminated for any reason, (b) this Site Lease is not
terminated, and (c) the Trustee subleases all or any portion of the Leased Property or sells or
assigns its interests in this Site Lease, the Trustee, or any purchaser, sublessee or assignee of the
Leased Property (including the leasehold interests of the Trustee resulting from this Site Lease)
shall pay or cause to be paid when due, all such taxes, assessments or governmental charges and
maintain the Leased Property in good condition and working order. Any such payments that are
to be made by the Trustee shall be made solely from (a) the proceeds of such sale, subleasing or
assignment, (b) from the Trust Estate, or (c) from other moneys furnished to the Trustee under
Section 8.02(m) of the Indenture, and in the absence of available moneys identified in the
preceding clauses (a) through (c), the Trustee shall be under no obligation to pay or cause to be
paid when due, all such taxes, assessments or governmental charges and maintain the Leased
Property in good condition and working order.
The provisions of the Lease shall govern with respect to the maintenance of insurance
hereunder during the Lease Term of the Lease. In the event that (a) the Lease is terminated for
any reason, and (b) this Site Lease is not terminated, the Trustee, or any sublessee, purchaser or
assignee of the Leased Property shall obtain and keep in force, (i) commercial general liability
insurance against claims for personal injury, death or damage to property of others occurring on
or in the Leased Property in an amount not less than the limitations provided in the Colorado
Governmental Immunity Act (Article 10, Title 24, Colorado Revised Statutes, as heretofore or
hereafter amended), and (ii) property insurance in an amount not less than the full replacement
value of the Leased Property. Any such insurance that is to be obtained by the Trustee shall be
paid for solely from (a) the proceeds of such sale, subleasing or assignment, (b) from the Trust
Estate, or (c) from other moneys furnished to the Trustee under Section 8.02(m) of the Indenture.
All such insurance shall name the Trustee, any sublessee, purchaser or assignee and the City as
insured. The Trustee shall be named loss payee. The City and the Trustee shall waive any rights
of subrogation with respect to the Trustee, any sublessee, purchaser or assignee, and the City, and
their members, directors, officers, agents and employees, while acting within the scope of their
employment and each such insurance policy shall contain such a waiver of subrogation by the
issuer of such policy.
Nothing in the preceding paragraphs or in this Site Lease shall be interpreted or construed
to require the Trustee to sublease all or any portion of the Leased Property or sell or assign its
interests in this Site Lease, in the event that the Lease is terminated for any reason and this Site
Lease is not terminated.
Section 12.Damage, Destruction or Condemnation. The provisions of the Lease
shall govern with respect to any damage, destruction or condemnation of the Leased Property
during the Lease Term of the Lease. In the event that (a) the Lease is terminated for any reason
and (b) this Site Lease is not terminated, and either (i) the Leased Property or any portion thereof
is damaged or destroyed, in whole or in part, by fire or other casualty, or (ii) title to or use of the
Leased Property or any part thereof shall be taken under the exercise of the power of eminent
domain, the City and the Trustee, or any sublessee, purchaser or assignee of the Leased Property
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from the Trustee shall cause the Net Proceeds of any insurance claim or condemnation award to
be applied in accordance with the provisions of Article 10 of the Lease.
Section 13.Hazardous Substances. Except for customary materials necessary for
operation, cleaning and maintenance of the Leased Property, none of the City, the Trustee or any
sublessee, purchaser or assignee of the Leased Property from the Trustee shall cause or permit any
Hazardous Substance to be brought upon, generated at, stored or kept or used in or about the
Leased Property without prior written notice to the City and the Trustee and all Hazardous
Substances, including customary materials necessary for construction, operation, cleaning and
maintenance of the Leased Property, will be used, kept and stored in a manner that complies with
all laws regulating any such Hazardous Substance so brought upon or used or kept on or about the
Leased Property, provided unless the Trustee has exercised its right to take possession of the
Leased Property after the occurrence and continuance of an Event of Lease Default, the Trustee
shall have no responsibility under this Section to monitor or investigate whether the Leased
Property complies with environmental laws or is subject to any Hazardous Substance. If the
presence of Hazardous Substance on the Leased Property caused or permitted by the City, the
Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the
case may be, results in contamination of the Leased Property, or if contamination of the Leased
Property by Hazardous Substance otherwise occurs for which the City, the Trustee or any sublessee
or assignee of the Leased Property, as the case may be, is legally liable for damage resulting
therefrom, then the City, the Trustee or any sublessee, purchaser or assignee of the Leased Property
from the Trustee, as the case may be, shall reimburse the other party for its reasonable and
necessary legal expenses to defend the parties hereto or assignees hereof that have not caused or
permitted such contamination and are not so legally liable with respect to this Site Lease from
claims for damages, penalties, fines, costs, liabilities or losses; provided that the cost of such
defense, (a) in the case of the Trustee, shall be payable solely from the Trust Estate, or (b) in the
case of the City, shall be payable only if the cost of such defense has been annually appropriated
by the City. This duty to reimburse legal expenses is not an indemnification. It is expressly
understood that none of the City, the Trustee or any sublessee, purchaser or assignee is
indemnifying any other person with respect to this Site Lease. Without limiting the foregoing, if
the presence of any Hazardous Substance on the Leased Property caused or permitted by:
(a)the Trustee after the Trustee has exercised its right to take possession of the
Leased Property after the occurrence and continuance of an Event of Lease Default, or any
sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may
be, results in any contamination of the Leased Property, the Trustee or any sublessee,
purchaser or assignee of the Leased Property from the Trustee, as the case may be, shall
provide prior written notice to the City and the Trustee and promptly take all actions, solely
at the expense of the Trust Estate as are necessary to effect remediation of the
contamination in accordance with legal requirements; or
(b)the City, results in any contamination of the Leased Property, the City shall
provide prior written notice to the Trustee and promptly take all actions, solely at the
expense of the City, which expenses shall constitute Additional Rentals, as are necessary
to effect remediation of the contamination in accordance with legal requirements.
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Section 14.Third Party Beneficiaries. It is expressly understood and agreed that the
Owners of the outstanding Certificates are third party beneficiaries to this Site Lease and
enforcement of the terms and conditions of this Site Lease, and all rights of action relating to such
enforcement, shall be strictly reserved to the City, as Lessor, and the Trustee, as Lessee, and their
respective successors and assigns, and to the Owners of the Certificates. Except as hereinafter
provided, nothing contained in this Site Lease shall give or allow any such claim or right of action
by any other or third person on this Site Lease. It is the express intention of the City and the
Trustee that any person other than the City, the Trustee or the Owners of the Certificates receiving
services or benefits under this Site Lease shall be deemed to be an incidental beneficiary only.
Section 15.Partial Invalidity. If any one or more of the terms, provisions, covenants
or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or
voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or
decree of which becomes final, none of the remaining terms, provisions, covenants and conditions
of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and
enforceable to the fullest extent permitted by law.
Section 16.No Merger. The City and the Trustee intend that the legal doctrine of
merger shall have no application to this Site Lease and that neither the execution and delivery of
the Lease by the Trustee and the City nor the exercise of any remedies under this Site Lease or the
Lease shall operate to terminate or extinguish this Site Lease or the Lease, except as specifically
provided herein and therein.
Section 17.Amendments. This Site Lease may only be amended, changed, modified
or altered as provided in the Indenture.
Section 18.Notices. All notices, statements, demands, consents, approvals,
authorizations, offers, designations, requests or other communications hereunder by either party
to the other shall be in writing and shall be sufficiently given and served upon the other party if
delivered personally or if mailed shall be made by United States registered mail, return receipt
requested, postage prepaid, at the addresses indicated in the Lease, or to such other addresses as
the respective parties may from time to time designate in writing, by Electronic Means or in such
other manner as authorized by the City or the Trustee, as the case may be.
Section 19.Recitals. The Recitals set forth in this Site Lease are hereby incorporated
by reference and made a part of this Site Lease.
Section 20.Section Headings. All section headings contained herein are for
convenience of reference only and are not intended to define or limit the scope of any provision of
this Site Lease.
Section 21.Execution. This Site Lease may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all together shall constitute but one and the
same Site Lease.
Section 22.Governing Law. This Site Lease shall be governed by and construed in
accordance with the State of Colorado without regard to choice of law analysis.
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Section 23.No Waiver of Governmental Immunity. No provision of this Site Lease
shall act or be deemed to be a waiver by the City of the Colorado Governmental Immunity Act,
C.R.S. §24-10-101, et seq.
Section 24.Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by Electronic Means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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S-1
IN WITNESS WHEREOF, the City and the Trustee have caused this Site Lease to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
CITY OF ASPEN, COLORADO,
as Lessee
By:
Torre, Mayor
ZIONS BANCORPORATION, NATIONAL
ASSOCIATION, solely in its capacity of
Trustee under the Indenture, as Lessor
By:
Neil B. Witoff, Vice President
Zions Bank Division
(SEAL)
Attest:
By:
Nicole Henning, City Clerk
[Signature Page to the Site Lease Agreement]
33
N-1
STATE OF COLORADO )
)
COUNTY OF PITKIN ) ss.
)
CITY OF ASPEN )
The foregoing instrument was acknowledged before me this _____ day of
______________, 2020, by Torre and Nicole Henning, as Mayor and City Clerk, respectively, of
the City of Aspen, Colorado.
WITNESS my hand and official seal.
Notary Public
(SEAL)
* * * * * * * * * * * * * * * * * *
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this _____ day of
______________, 2020, by Neil B. Witoff, as Vice President of Zions Bancorporation, National
Association, as Trustee.
Notary Public
(SEAL)
[Notary Page to the Site Lease Agreement]
34
B-1
EXHIBIT A
DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of the real property and the buildings and improvements
located thereon as set forth below, as amended from time to time.
Site:Commercial Unit A, ISIS THEATER CONDOMINIUMS, according to the Condominium
Map thereof recorded December 9, 1999 in Plat Book 52 at Page 1 as Reception No.
438434 and the First Amended Condominium Map recorded September 29, 2011 in Book
98 at Page 14 as Reception No. 583124 and the Second Amended Condominium Map
recorded September 11, 2014 in Plat Book 108 at Page 6 as Reception No. 613396 and as
defined and described by the Condominium Declaration for Isis Theater Condominiums
recorded December 9, 1999 as Reception No. 438433 and First Amendment to the
Condominium Declaration recorded September 29, 2011 as Reception No. 583123.
406 E. Hopkins Avenue, Unit A, Aspen, CO 81611
35
B-2
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” means, as of any particular time: (a) liens for taxes and
assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to
the provisions of the Lease; (b) this Site Lease, the Lease, the Indenture and any related fixture
filing and any liens arising or granted pursuant to the Lease or the Indenture; (c) utility, access and
other easements and rights of way, licenses, permits, party wall and other agreements, restrictions
and exceptions which the Mayor or the City Representative certifies will not materially interfere
with or materially impair the Leased Property, including rights or privileges in the nature of
easements, licenses, permits and agreements as provided in the Lease; and (d) the easements,
covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was
subject when leased to the Trustee pursuant to this Site Lease, as shown below and which do not
interfere in any material way with the Leased Property.
The easements, covenants, restrictions, liens and encumbrances (if any) to which title to
the Leased Property was subject when leased to the Trustee pursuant to this Site Lease are as
follows:
1)Liens for ad valorem taxes and special assessments not then delinquent, if
applicable.
2)This Site Lease.
3)The Lease.
4)All other encumbrances appearing of record on the date hereof as shown on
the title insurance policy delivered to the Trustee in connection with this Site Lease.
36
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Kimberley Crawford, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Lease Purchase Agreement
is exempt from the documentary fee.
LEASE PURCHASE AGREEMENT
DATED AS OF [CLOSING DATE]
BETWEEN
ZIONS BANCORPORATION,NATIONAL ASSOCIATION,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE,
AS LESSOR
AND
CITY OF ASPEN,COLORADO,
AS LESSEE
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This Table of Contents is not a part of this Lease and is only for convenience of
reference.
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS................................................................................................................4
Section 1.1 Certain Funds and Accounts .............................................................................................4
Section 1.2 Definitions.........................................................................................................................4
ARTICLE 2 REPRESENTATIONS AND COVENANTS.................................................................9
Section 2.1 Representations and Covenants of the City.......................................................................9
Section 2.2 Representations and Covenants of the Trustee................................................................10
Section 2.3 Nature of Lease...............................................................................................................11
Section 2.4 City Acknowledgement of Certain Matters.....................................................................11
Section 2.5 Relationship of City and Trustee.....................................................................................11
ARTICLE 3 LEASE OF THE LEASED PROPERTY......................................................................13
ARTICLE 4 LEASE TERM...............................................................................................................14
Section 4.1 Duration of Lease Term..................................................................................................14
Section 4.2 Termination of Lease Term.............................................................................................15
ARTICLE 5 ENJOYMENT OF THE LEASED PROPERTY...........................................................16
Section 5.1 Trustee’s Covenant of Quiet Enjoyment.........................................................................16
Section 5.2 City’s Need for the Leased Property; Determinations as to Fair Value and Fair
Purchase Price.................................................................................................................16
ARTICLE 6 PAYMENTS BY THE CITY........................................................................................17
Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the City...........................17
Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals.........................................17
Section 6.3 Manner of Payment.........................................................................................................18
Section 6.4 Nonappropriation............................................................................................................19
Section 6.5 Holdover Tenant..............................................................................................................20
Section 6.6 Prohibition of Adverse Budget or Appropriation Modifications ....................................21
ARTICLE 7 LEASING OF THE SITE; TITLE INSURANCE.........................................................22
Section 7.1 Leasing of the Site; Title Insurance.................................................................................22
ARTICLE 8 TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES...........23
Section 8.1 Title to the Leased Property............................................................................................23
Section 8.2 No Encumbrance, Mortgage or Pledge of the Leased Property......................................23
ARTICLE 9 MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES .....................24
Section 9.1 Maintenance of the Leased Property by the City............................................................24
Section 9.2 Modification of the Leased Property; Installation of Furnishings and Machinery
of the City........................................................................................................................24
Section 9.3 Taxes, Other Governmental Charges and Utility Charges..............................................24
Section 9.4 Provisions for Liability and Property Insurance..............................................................25
Section 9.5 Advances.........................................................................................................................26
Section 9.6 Granting of Easements....................................................................................................26
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ARTICLE 10 DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF
NET PROCEEDS..........................................................................................................27
Section 10.1 Damage, Destruction and Condemnation........................................................................27
Section 10.2 Obligation to Repair and Replace the Leased Property ..................................................27
Section 10.3 Insufficiency of Net Proceeds.........................................................................................28
Section 10.4 Cooperation of the Trustee..............................................................................................29
ARTICLE 11 DISCLAIMER OF WARRANTIES; OTHER COVENANTS.....................................30
Section 11.1 Disclaimer of Warranties ................................................................................................30
Section 11.2 Further Assurances and Corrective Instruments .............................................................30
Section 11.3 Compliance with Requirements......................................................................................30
Section 11.4 Release and Substitution of Leased Property..................................................................30
Section 11.5 Covenant to Reimburse Legal Expenses.........................................................................31
Section 11.6 Access to the Leased Property; Rights to Inspect Books................................................31
ARTICLE 12 PURCHASE OPTION...................................................................................................32
Section 12.1 Purchase Option..............................................................................................................32
Section 12.2 Conditions for Purchase Option......................................................................................32
Section 12.3 Manner of Conveyance...................................................................................................32
ARTICLE 13 ASSIGNMENT AND SUBLEASING..........................................................................34
Section 13.1 Assignment by the Trustee; Replacement of the Trustee................................................34
Section 13.2 Assignment and Subleasing by the City..........................................................................34
ARTICLE 14 EVENTS OF LEASE DEFAULT AND REMEDIES...................................................35
Section 14.1 Events of Lease Default Defined ....................................................................................35
Section 14.2 Remedies on Default.......................................................................................................35
Section 14.3 Limitations on Remedies.................................................................................................36
Section 14.4 No Remedy Exclusive.....................................................................................................37
Section 14.5 Waivers ...........................................................................................................................37
Section 14.6 Agreement to Pay Attorneys’ Fees and Expenses...........................................................37
Section 14.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws................37
ARTICLE 15 MISCELLANEOUS......................................................................................................38
Section 15.1 Sovereign Powers of City................................................................................................38
Section 15.2 Notices.............................................................................................................................38
Section 15.3 Third Party Beneficiaries ................................................................................................38
Section 15.4 Binding Effect.................................................................................................................39
Section 15.5 Amendments ...................................................................................................................39
Section 15.6 Amounts Remaining in Funds.........................................................................................39
Section 15.7 Triple Net Lease..............................................................................................................39
Section 15.8 Computation of Time......................................................................................................39
Section 15.9 Payments Due on Holidays.............................................................................................39
Section 15.10 Severability .....................................................................................................................39
Section 15.11 Execution in Counterparts...............................................................................................40
Section 15.12 Applicable Law...............................................................................................................40
Section 15.13 The Trustee is Independent of the City...........................................................................40
Section 15.14 Governmental Immunity.................................................................................................40
Section 15.15 Recitals............................................................................................................................40
Section 15.16 Captions...........................................................................................................................40
Section 15.17 Trustee’s Disclaimer .......................................................................................................40
Section 15.18 Electronic Transactions...................................................................................................40
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EXHIBIT A DESCRIPTION OF LEASED PROPERTY.......................................................A-1
EXHIBIT B PERMITTED ENCUMBRANCES.....................................................................B-1
EXHIBIT C BASE RENTALS SCHEDULE ..........................................................................C-1
EXHIBIT D FORM OF NOTICE OF LEASE RENEWAL...................................................D-1
40
1
This LEASE PURCHASE AGREEMENT, dated as of [closing date] (this “Lease”), is by
and between ZIONS BANCORPORATION, NATIONAL ASSOCIATION, Denver, Colorado, a national
banking association duly organized and validly existing under the laws of the United States of
America, solely in its capacity as trustee under the Indenture (the “Trustee”), as lessor, and the
CITY OF ASPEN, COLORADO, a Colorado home rule municipality duly organized and existing
under the Constitution and laws of the State of Colorado (the “City”), as lessee.
RECITALS
1.All capitalized terms used in these Recitals and not otherwise defined shall have
the meanings given to them in the Section 1.2 hereof, unless the context otherwise requires.
2.The City is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the City (the “Charter”).
3.Pursuant to Section 10.8 of Article X of the Charter, the City is authorized to
enter into one or more leases or lease-purchase agreements for land, buildings, equipment and
other property for governmental or proprietary purposes.
4.For the purpose of financing the cost of acquiring certain property in the City
known as the Isis Theater Condominiums (the “Prior Project”), there has previously been
executed and delivered:
a.A Special Warranty Deed dated as of February 15, 2007, conveying the
Prior Project from CC Aspen, LLC, an Arizona limited liability company, to the
Authority (the “Leased Property”); and
b.A Lease Purchase Agreement dated as of February 1, 2007 (the “2007
Lease”), by and between the City, as lessee, and the City of Aspen Public Finance
Authority, as Lessor (the “Authority”); and
c.A Mortgage and Indenture of Trust dated as of February 1, 2007 (the
“2007 Indenture”), by and between the Authority and The Bank of Cherry Creek, N.A.
(now UMB Bank, n.a.), as Trustee (the “2007 Trustee”).
5.Pursuant to the 2007 Indenture, there were issued to investors the City of Aspen
Public Facilities Authority Taxable Certificates of Participation (Isis Theater 2020 Project),
Series 2007A (the “2007 Certificates”).
6.Pursuant to the 2007 Indenture, the 2007 Certificates are subject to redemption
prior to maturity on any date on and after March 1, 2017, from moneys received by the 2007
Trustee from exercise of the City of its option to purchase the Leased Property.
7.Pursuant to the 2007 Lease, the City has the option to purchase the Leased
Property and to cause the redemption of the 2007 Certificates.
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2
8.The Leased Property now consists of a condominium unit currently subleased by
the City to AspenFilm, f/k/a Independent Films, Inc. d/b/a AspenFilm (the “AspenFilm
Sublease”).
9.The City Council of the City (the “Council”) has determined that it is in the best
interests of the City and its inhabitants that the City exercise its option to acquire the Leased
Property in order to refinance the 2007 Certificates and to construct additional improvements to
the Leased Property (collectively, the “2020 Project”).
10.The Council has determined that it is in the best interests of the City and its
inhabitants to provide for the financing the 2020 Project by entering into this Site Lease and the
Lease.
11.The City owns, in fee title, the Site (the “Site”) and the premises, buildings and
improvements located thereon, (as more particularly described in Exhibit A attached hereto, the
“Leased Property”).
12.To accomplish the 2020 Project, the Trustee will acquire a leasehold interest in
the Site by leasing the Site from the City pursuant to the Site Lease and will lease the Site back
to the City pursuant to the Lease.
13.The payment by the City of Base Rentals and Additional Rentals hereunder in any
future Fiscal Year is subject to specific Appropriations and the renewal by the Council of this
Lease for such future Fiscal Year. The Base Rentals and Additional Rentals payable by the City
under this Lease shall constitute current expenditures of the City.
14.Neither this Lease nor the payment by the City of Base Rentals or Additional
Rentals hereunder shall be deemed or construed as creating an indebtedness of the City within
the meaning of any provision of the Colorado Constitution, the Charter or the laws of the State of
Colorado, concerning or limiting the creation of indebtedness by the City (except as provided in
Section 10.4 of the Charter concerning the limitation of City indebtedness to 20% of the assessed
valuation of taxable property in the City), and shall not constitute a multiple fiscal year direct or
indirect debt or other financial obligation of the City within the meaning of Article X,
Section 20(4) of the Colorado Constitution or a mandatory charge or requirement against the
City in any ensuing Fiscal Year beyond the then current Fiscal Year. The obligation of the City
to pay Base Rentals and Additional Rentals hereunder shall be from year to year only, shall
constitute currently budgeted expenditures of the City, shall not constitute a mandatory charge or
requirement in any ensuing budget year, nor a mandatory payment obligation of the City in any
ensuing Fiscal Year beyond any Fiscal Year during which this Lease shall be in effect. In the
event that this Lease is not renewed, the sole security available to the Trustee, as lessor
hereunder, shall be the Leased Property.
15.The Trustee is executing this Lease solely in its capacity as trustee under the
Indenture, and subject to the terms, conditions and protections provided for therein.
16.The Trustee and the City intend that this Lease sets forth their entire
understanding and agreement regarding the terms and conditions upon which the City is leasing
the Leased Property from the Trustee.
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3
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the Trustee and the City agree as follows:
43
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ARTICLE 1
DEFINITIONS
Certain Funds and Accounts. All references herein to any funds and
accounts shall mean the funds and accounts so designated which are established under the
Indenture.
Definitions. All capitalized terms used herein and not otherwise defined
shall have the meanings given to them in the Indenture. In addition, the following capitalized
terms shall have the following meanings under this Lease, provided, however, that in the event of
any inconsistency between definitions in the Indenture and below, any term defined below shall
have the meaning ascribed to it herein.
“Additional Certificates” means Additional Certificates which may be executed and
delivered pursuant to the Indenture.
“Additional Rentals” means the payment or cost of all:
(a)(i) reasonable expenses and fees of the Trustee related to the performance
or discharge of its responsibilities under the provisions of this Lease, the Site Lease or the
Indenture, (ii)the cost of insurance premiums and insurance deductible amounts under
any insurance policy reasonably deemed necessary by the Trustee to protect the Trustee
from any liability under this Lease, approved by the City Representative, which approval
shall not be unreasonably withheld, (iii)reasonable legal fees and expenses incurred by
the Trustee to defend the Trust Estate or the Trustee from and against any legal claims,
and (iv)reasonable expenses and fees of the Trustee incurred at the request of the City
Representative;
(b)taxes, assessments, insurance premiums, utility charges, maintenance,
upkeep, repair and replacement with respect to the Leased Property and as otherwise
required under this Lease; and
(c)all other charges and costs (together with all interest and penalties that
may accrue thereon in the event that the City shall fail to pay the same, as specifically set
forth in this Lease) which the City agrees to assume or pay as Additional Rentals under
this Lease.
Additional Rentals shall not include Base Rentals.
“Appropriation” means the action of the Council in annually making moneys available
for all payments due under this Lease, including the payment of Base Rentals and Additional
Rentals.
“Approval of Special Counsel” means an opinion of Special Counsel to the effect that the
matter proposed will not adversely affect the excludability from gross income for federal income
tax purposes of the Interest Portion of the Base Rentals paid by the City under this Lease.
“AspenFilm” means AspenFilm, f/k/a Independent Films, Inc. d/b/a AspenFilm.
44
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“AspenFilm Sublease” means the [insert name of revised sublease] between the City and
AspenFilm.
“Base Rentals” means the rental payments payable by the City during the Lease Term,
which constitute payments payable by the City for and in consideration of the right to possess
and use the Leased Property as set forth in Exhibit C (Base Rentals Schedule) hereto. Base
Rentals does not include Additional Rentals.
“Base Rentals Payment Dates” means the Base Rentals Payment Dates set forth in
Exhibit C (Base Rentals Schedule) hereto.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday or a day
(a) on which banks located in Denver, Colorado, are required or authorized by law or executive
order to close or (b) on which the Federal Reserve System is closed.
“Certificates” means the “Certificates of Participation, Series 2020, evidencing
Proportionate Interests in the Base Rentals and other Revenues under an annually renewable
Lease Purchase Agreement dated as of [closing date], between Zions Bancorporation, National
Association, solely in its capacity as trustee under the Indenture, as lessor, and the City of Aspen,
Colorado, as lessee” dated as of their date of delivery, executed and delivered pursuant to the
Indenture.
“Charter” means the home rule charter of the City, and any amendments or supplements
thereto.
“City” means the City of Aspen, Colorado.
“City Manager” means the City Manager of the City or his or her successor in function.
“City Representative” means the Mayor, the City Manager or the Finance Director or
such other person at the time designated to act on behalf of the City for the purpose of
performing any act under this Lease, the Site Lease or the Indenture by a written certificate
furnished to the Trustee containing the
“Council” means the City Council of the City or any successor to its functions.
“Counsel” means an attorney at law or law firm (who may be counsel for the Trustee)
who is satisfactory to the City.
“C.R.S.” means Colorado Revised Statutes.
“Event(s) of Lease Default” means any event as defined in Section 14.1 of this Lease.
“Event of Nonappropriation” means the termination and non-renewal of this Lease by the
City, determined by the Council’s failure, for any reason, to appropriate by the last day of each
Fiscal Year, (a) sufficient amounts to be used to pay Base Rentals due in the next Fiscal Year
and (b) sufficient amounts to pay such Additional Rentals as are estimated to become due in the
next Fiscal Year, as provided in Section 6.4 of this Lease. An Event of Nonappropriation may
45
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also occur under certain circumstances described in Section 10.3(c) of this Lease. The term also
means a notice under this Lease of the City’s intention to not renew and therefore terminate this
Lease or an event described in this Lease relating to the exercise by the City of its right to not
appropriate amounts due as Additional Rentals in excess of the amounts for which an
Appropriation has been previously effected.
“Finance Director” means the Finance Director of the City or his or her successor in
functions, if any.
“Fiscal Year” means the City’s fiscal year, which begins on January 1 of each calendar
year and ends on December 31 of the same calendar year, or any other twelve month period
which the City or other appropriate authority hereafter may establish as the City’s fiscal year.
“Force Majeure” 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, the State of Colorado or any of their departments,
agencies or officials or any civil or military authority; insurrection; riots; landslides; earthquakes;
fires; storms; droughts; floods; explosions; breakage or accidents to machinery, transmission
pipes or canals; or any other cause or event not within the control of the City in its capacity as
lessee hereunder or the Trustee.
“Hazardous Substance” means and includes: (a) the terms “hazardous substance,”
“release” and “removal” which, as used herein, shall have the same meaning and definition as set
forth in paragraphs (14), (22) and (23), respectively, of Title 42 U.S.C. §9601 and in Colorado
law, provided, however, that the term “hazardous substance” as used herein shall also include
“hazardous waste” as defined in paragraph (5) of 42 U.S.C. §6903 and “petroleum” as defined in
paragraph (8) of 42 U.S.C. §6991; (b) the term “superfund” as used herein means the
Comprehensive Environmental Response, Compensation and Liability Act, as amended, being
Title 42 U.S.C. §9601 et seq., as amended, and any similar State of Colorado statute or local
ordinance applicable to the Leased Property, including, without limitation, Colorado rules and
regulations promulgated, administered and enforced by any governmental agency or authority
pursuant thereto; and (c) the term “underground storage tank” as used herein shall have the same
meaning and definition as set forth in paragraph (1) of 42 U.S.C. §6991.
“Indenture” means the Indenture of Trust, dated as of [closing date], entered into by the
Trustee, as the same may be amended or supplemented.
“Initial Term” means the period which commences on the date of delivery of this Lease
and terminates on December 31, 2020.
“Interest Portion” means the portion of each Base Rentals payment that represents the
payment of interest set forth in Exhibit C (Base Rentals Schedule) hereto.
“Lease” means this Lease Purchase Agreement, dated as of [closing date], between the
Trustee, as lessor, and the City, as lessee, as the same may hereafter be amended.
“Lease Remedy” or “Lease Remedies” means any or all remedial steps provided in this
Lease whenever an Event of Lease Default or an Event of Nonappropriation has happened and is
46
7
continuing, which may be exercised by the Trustee as provided in this Lease and in the
Indenture.
“Lease Term” means the Initial Term and any Renewal Terms as to which the City may
exercise its option to renew this Lease by effecting an Appropriation of funds for the payment of
Base Rentals and Additional Rentals hereunder, as provided in and subject to the provisions of
this Lease. “Lease Term” refers to the time during which the City is the lessee of the Leased
Property under this Lease.
“Leased Property” means the Site and the premises, buildings and improvements situated
thereon, including all fixtures attached thereto, as more particularly described in Exhibit A to
this Lease, together with any and all additions and modifications thereto and replacements
thereof, including, without limitation, the easements, rights of way, covenants and other rights
set forth in the documents listed on Exhibit B attached hereto.
“Net Proceeds” means the proceeds of any performance or payment bond, or proceeds of
insurance, including self-insurance, required by this Lease or proceeds from any condemnation
award, or proceeds derived from the exercise of any Lease Remedy or otherwise following
termination of this Lease by reason of an Event of Nonappropriation or an Event of Lease
Default, allocable to the Leased Property, less (a) all related expenses (including, without
limitation, attorney’s fees and costs) incurred in the collection of such proceeds or award; and
(b) all other related fees, expenses and payments due to the City and the Trustee.
“Owners” means the registered owners of any Certificates.
“Permitted Encumbrances” with respect to the Leased Property, means, as of any
particular time: (a) liens for taxes and assessments not then delinquent, or liens which may
remain unpaid pending contest pursuant to the provisions of this Lease; (b) the Site Lease, this
Lease, the Indenture and any related fixture filing and any liens arising or granted pursuant to the
Site Lease, this Lease or the Indenture; (c) utility, access and other easements and rights of way,
licenses, permits, party wall and other agreements, restrictions and exceptions which the City
Representative certifies will not materially interfere with or materially impair the Leased
Property, including rights or privileges in the nature of easements, licenses, permits and
agreements as provided in this Lease or other Project Contracts; (d) any sublease of the Leased
Property that are permitted pursuant to the terms and provisions of Section 13.2 hereof; and
(e) the easements, covenants, restrictions, liens and encumbrances (if any) to which title to the
Leased Property was subject when leased to the Trustee pursuant to the Site Lease, as shown on
Exhibit B hereto and which the City Representative certifies do not and will not interfere in any
material way with the intended use of the Leased Property.
“Prepayment” means any amount paid by the City pursuant to the provisions of this
Lease as a prepayment of the Base Rentals due hereunder.
“Principal Portion” means the portion of each Base Rentals payment that represents the
payment of principal set forth in Exhibit C (Base Rentals Schedule) hereto.
“Project” means the payment in full of the purchase option price under the 2007 Lease
and redemption of the 2007 Certificates, the costs of the construction of improvements to the
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Leased Property, and the costs of execution and delivery of the Lease, the Site Lease, the
Indenture, and the Certificates.
“Purchase Option Price” means the amount payable on any date, at the option of the
City, to prepay Base Rentals, terminate the Lease Term and purchase the Trustee’s leasehold
interest in the Leased Property, as provided herein.
“Rate Reset Date” means September 1, 2035 and September 1, 2036.
“Renewal Term” means any portion of the Lease Term commencing on January 1 of any
calendar year and terminating on or before December 31 of such calendar year as provided in
Article 4 of this Lease.
“Revenues” means (a) all amounts payable by or on behalf of the City or with respect to
the Leased Property pursuant to this Lease including, but not limited to, all Base Rentals,
Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals;
(b) any portion of the proceeds of the Certificates deposited into the Base Rentals Fund created
under the Indenture; (c) any moneys which may be derived from any insurance in respect of the
Certificates; and (d) any moneys and securities, including investment income, held by the
Trustee in the Funds and Accounts established under the Indenture (except for moneys and
securities held in any defeasance escrow account).
“Site” means the real property owned by the City and leased by the City to the Trustee
under the Site Lease and subleased by the Trustee to the City under this Lease, the legal
description of which is set forth in Exhibit A hereto, or an amendment or supplement hereto.
“Site Lease” means the Site Lease, dated as of [closing date], between the City, as lessor,
and the Trustee, as lessee, as the same may hereafter be amended.
“Special Counsel” means any counsel experienced in matters of municipal law and listed
in the list of municipal bond attorneys, as published semiannually by The Bond Buyer, or any
successor publication. So long as the Lease Term is in effect, the City shall have the right to
select Special Counsel.
“Trustee” means Zions Bancorporation, National Association, acting in the capacity of
trustee pursuant to the Indenture, and any successor thereto appointed under the Indenture.
“2007 Certificates”means the City of Aspen Public Facilities Authority Taxable
Certificates of Participation (Isis Theater 2020 Project), Series 2007A.
“2007 Lease”means the Lease Purchase Agreement dated as of February 1, 2007 (the
“2007 Lease”), by and between the City, as lessee, and the City of Aspen Public Finance
Authority, as Lessor.
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ARTICLE 2
REPRESENTATIONS AND COVENANTS
Representations and Covenants of the City. The City represents and
covenants to the Trustee, to the extent allowed by law and subject to renewal of this Lease and
Appropriation as set forth in Article 6 hereof as follows:
(a)The City is a home rule municipal corporation duly organized and existing
within the State under the Constitution and laws of the State and its Charter. The City is
authorized to enter into this Lease and the Site Lease and to carry out its obligations
under this Lease and the Site Lease. The City has duly authorized and approved the
execution and delivery of this Lease, the Site Lease and all other documents related to the
execution and delivery of this Lease and the Site Lease.
(b)The City owns the Leased Property and the Trustee has a leasehold
interest in the Leased Property pursuant to the Site Lease.
(c)The leasing of the Leased Property to the Trustee pursuant to the Site
Lease and the leasing or subleasing of the Leased Property from the Trustee, under the
terms and conditions provided for in this Lease, and the implementation of the Project by
the City, are necessary, convenient and in furtherance of the City’s governmental or
proprietary purposes and are in the best interests of the citizens and inhabitants of the
City. The City will apply the net proceeds derived from the proceeds of the Certificates
to effectuate the Project.
(d)Neither the execution and delivery of this Lease and the Site Lease, nor
the fulfillment of or compliance with the terms and conditions of this Lease and the Site
Lease, nor the consummation of the transactions contemplated hereby or thereby,
conflicts with or results in a breach of the terms, conditions or provisions of any
restriction or any agreement or instrument to which the City is now a party or by which
the City or its property is bound, or violates any statute, regulation, rule, order of any
court having jurisdiction, judgment or administrative order applicable to the City, or
constitutes a default under any of the foregoing, or results in the creation or imposition of
any lien or encumbrance whatsoever upon any of the property or assets of the City,
except for Permitted Encumbrances.
(e)The City agrees that, except for non-renewal and nonappropriation as set
forth in Article 6 hereof, if the City fails to perform any act which the City is required to
perform under this Lease, the Trustee may, but shall not be obligated to, perform or cause
to be performed such act, and any reasonable expense incurred by the Trustee in
connection therewith shall be an obligation owing by the City (from moneys for which an
Appropriation has been effected) to the Trustee shall be a part of Additional Rentals, and
the Trustee shall be subrogated to all of the rights of the party receiving such payment.
(f)There is no litigation or proceeding pending against the City affecting the
right of the City to execute this Lease or the Site Lease or the ability of the City to make
the payments required hereunder or to otherwise comply with the obligations contained
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herein, or which, if adversely determined, would, in the aggregate or in any case,
materially adversely affect the property, assets, financial condition or business of the City
or materially impair the right or ability of the City to carry on its operations substantially
as now conducted or anticipated to be conducted in the future.
(g)Except for customary materials necessary for construction, operation,
cleaning and maintenance of the Leased Property, the City shall not cause or permit any
Hazardous Substance to be brought upon, generated at, stored or kept or used in or about
the Leased Property without prior written notice to the Trustee, and all Hazardous
Substances, including, customary materials necessary for construction, operation,
cleaning and maintenance of the Leased Property, will be used, kept and stored in a
manner that complies with all laws regulating any such Hazardous Substance so brought
upon or used or kept in or about the Leased Property. If the presence of any Hazardous
Substance on the Leased Property caused or permitted by the City results in
contamination of the Leased Property, or if contamination of the Leased Property by any
Hazardous Substance otherwise occurs for which the City is legally liable for damage
resulting therefrom, then the City shall include as an Additional Rental any amount
necessary to reimburse the Trustee for legal expenses incurred to defend (to the extent
that an Appropriation for the necessary moneys has been effected by the City) the Trustee
from claims for damages, penalties, fines, costs, liabilities or losses. The reimbursement
of the Trustee’s legal expenses is not an indemnification. It is expressly understood that
the City is not indemnifying the Trustee and expenses of such defense shall constitute
Additional Rentals. Without limiting the foregoing, if the presence of any Hazardous
Substance on the Leased Property caused or permitted by the City results in any
contamination of the Leased Property, the City shall provide prior written notice to the
Trustee and promptly take all actions at its sole expense (which expenses shall constitute
Additional Rentals) as are necessary to effect remediation of the contamination in
accordance with legal requirements.
Representations and Covenants of the Trustee. The Trustee
represents and covenants as follows:
(a)So long as no Event of Indenture Default has occurred and is then
continuing or existing, except as specifically provided in the Site Lease or this Lease or
as necessary to transfer the Trust Estate to a successor Trustee, the Trustee shall not
pledge or assign the Trustee’s right, title and interest in and to (i)this Lease or the Site
Lease, (ii)the Base Rentals, other Revenues and collateral, security interests and
attendant rights and obligations which may be derived under this Lease or the Site Lease
and/or (iii)the Leased Property and any reversion therein or any of its or the Trustee’s
other rights under this Lease or the Site Lease or assign, pledge, mortgage, encumber or
grant a security interest in its or the Trustee’s right, title and interest in, to and under this
Lease or the Site Lease or the Leased Property except for Permitted Encumbrances.
(b)Neither the execution and delivery of this Lease and the Site Lease or the
Indenture by the Trustee, nor the fulfillment of or compliance with the terms and
conditions thereof and hereof, nor the consummation of the transactions contemplated
thereby or hereby conflicts with or results in a breach of the terms, conditions and
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provisions of any restriction or any agreement or instrument to which the Trustee is now
a party or by which the Trustee is bound, or constitutes a default under any of the
foregoing.
(c)To the Trustee’s knowledge, there is no litigation or proceeding pending
against the Trustee affecting the right of the Trustee to execute this Lease and the Site
Lease or to execute the Indenture, and perform its obligations thereunder or hereunder,
except such litigation or proceeding as has been disclosed in writing to the City on or
prior to the date the Indenture is executed and delivered.
Nature of Lease. The City and the Trustee acknowledge and agree that
the Base Rentals and Additional Rentals hereunder shall constitute currently budgeted and
appropriated expenditures of the City and may be paid from any legally available funds. The
City’s obligations under this Lease shall be subject to the City’s annual right to terminate this
Lease (as further provided herein), and shall not constitute a mandatory charge or requirement in
any ensuing Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be
construed or interpreted as creating a general obligation, multiple fiscal year financial obligation,
or other indebtedness of the City within the meaning of any constitutional, Charter or statutory
debt limitation (except as provided in Section 10.4 of the Charter concerning the limitation of
City indebtedness to 20% of the assessed valuation of taxable property in the City). No
provision of this Lease shall be construed or interpreted as creating an unlawful delegation of
governmental powers nor as a donation by or a lending of the credit of the City within the
meaning of Article XI, Sections 1 or 2 of the Colorado Constitution. Neither this Lease nor the
execution and delivery of the Certificates shall directly or indirectly obligate the City to make
any payments beyond those duly budgeted and appropriated for the City’s then current Fiscal
Year. The City shall be under no obligation whatsoever to exercise its option to purchase the
Trustee’s leasehold interest in the Leased Property. No provision of this Lease shall be
construed to pledge or to create a lien on any class or source of City moneys, nor shall any
provision of this Lease restrict the future issuance of any City bonds or obligations payable from
any class or source of City moneys (provided, however, certain restrictions in the Indenture shall
apply to the issuance of Additional Certificates). In the event that this Lease is not renewed by
the City, the sole security available to the Trustee, as lessor hereunder, shall be the Leased
Property.
City Acknowledgement of Certain Matters. The City acknowledges
the Indenture and the execution and delivery by the Trustee of the Certificates pursuant to the
Indenture. The City also acknowledges the Trustee’s authority to act on behalf of the Owners of
the Certificates with respect to all rights, title and interests of the Trustee in, to and under this
Lease, the Site Lease and the Leased Property.
Relationship of City and Trustee. The relationship of the City and the
Trustee under this Lease is, and shall at all times remain, solely that of lessee and lessor; and the
City neither undertakes nor assumes any responsibility or duty to the Trustee or to any third party
with respect to the Trustee’s obligations relating to the Leased Property; and the Trustee does not
undertake or assume any responsibility or duty to the City or to any third party with respect to
the City’s obligations relating to the Leased Property. Notwithstanding any other provisions of
this Lease: (a)the City and the Trustee are not, and do not intend to be construed to be, partners,
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joint ventures, members, alter egos, managers, controlling persons or other business associates or
participants of any kind of either of the other, and the City and the Trustee do not intend to ever
assume such status; and (b) the City and the Trustee shall not be deemed responsible for, or a
participant in, any acts, omissions or decisions of either of the other.
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ARTICLE 3
LEASE OF THE LEASED PROPERTY
The Trustee demises and leases the Leased Property to the City and the City leases the
Leased Property from the Trustee, in accordance with the provisions of this Lease, subject only
to Permitted Encumbrances, to have and to hold for the Lease Term.
The City and the Trustee acknowledge that the City owns the Leased Property and the
City has leased the Leased Property to the Trustee pursuant to the Site Lease; and the City and
the Trustee intend that there be no merger of the City’s interests as sublessee under this Lease
and the City’s ownership interest in the Leased Property so as to cause the cancellation of the
Site Lease or this Lease, or an impairment of the leasehold and subleasehold interest intended to
be created by the Site Lease and this Lease.
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ARTICLE 4
LEASE TERM
Duration of Lease Term. The Lease Term shall commence as of the
date hereof. The Initial Term shall terminate on December 31, 2020. This Lease may be
renewed, solely at the option of the City, for 17 Renewal Terms, provided, however, that the
Lease Term shall terminate no later than December 31, 2037, except that the Renewal Term
beginning on January 1, 2037 shall terminate upon the City’s payment of the final Base Rental
payment as set forth in Exhibit C. The City hereby finds that the maximum Lease Term
hereunder does not exceed the weighted average useful life of the Leased Property. The City
further determines and declares that the period during which the City has an option to purchase
the Trustee’s leasehold interest in the Leased Property (i.e., the entire maximum Lease Term)
does not exceed the useful life of the Leased Property.
The Finance Director or other officer of the City at any time charged with the
responsibility of formulating budget proposals for the City is hereby directed to include in the
annual budget proposals submitted to the Council, in any year in which this Lease shall be in
effect, items for all payments required for the ensuing Renewal Term under this Lease until such
time, if any, as the City may determine to not renew and terminate this Lease. Notwithstanding
this directive regarding the formulation of budget proposals, it is the intention of the City that
any decision to effect an Appropriation for the Base Rentals and Additional Rentals shall be
made solely by the Council in its absolute discretion and not by any other official of the City, as
further provided in the following paragraph. During the Lease Term, the City shall in any event,
whether or not the Lease is to be renewed, furnish the Trustee with copies of its annual budget
promptly after the budget is adopted. The Trustee shall have no duty to examine the City’s
annual budget.Unless otherwise available on the website of the City, the City shall deliver to the
Trustee a copy of the City’s audited annual financial statements no later than 270 days after the
end of each Fiscal Year. The Trustee shall have no duty to examine the City’s annual financial
statements.
Not later than December 15 of the then current Initial Term or any Renewal Term the
City Representative shall give written notice (in substantially the form set forth in Exhibit D
attached hereto) to the Trustee that either:
(a)the City has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1)sufficient amounts
authorized and directed to be used to pay all of the Base Rentals and (2)sufficient
amounts to pay such Additional Rentals as are estimated to become due, all as further
provided in Sections 6.2, 6.3 and 6.4 of this Lease, whereupon, this Lease shall be
renewed for the ensuing Fiscal Year; or
(b)the City has determined, for any reason, not to renew this Lease for the
ensuing Fiscal Year.
Subject to the provisions of Section 6.4(a) hereof, the failure to give such notice shall not
constitute an Event of Lease Default, nor prevent the City from electing not to renew this Lease,
nor result in any liability on the part of the City. The City’s option to renew or not to renew this
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Lease shall be conclusively determined by whether or not the applicable Appropriation has been
made on or before December 31 of each Fiscal Year, all as further provided in Article 6 of this
Lease.
The terms and conditions hereof during any Renewal Term shall be the same as the terms
and conditions hereof during the Initial Term, except that the Purchase Option Price and the Base
Rentals shall be as provided in Article 12 and Exhibit C (Base Rentals Schedule) hereof.
Termination of Lease Term. The Lease Term shall terminate upon the
earliest of any of the following events:
(a)the expiration of the Initial Term or any Renewal Term during which there
occurs an Event of Nonappropriation pursuant to Section 4.1 and Article 6 of this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(b)the occurrence of an Event of Nonappropriation under this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(c)the conveyance of the Trustee’s leasehold interest in the Leased Property
under this Lease to the City upon payment of the Purchase Option Price or all Base
Rentals and Additional Rentals, for which an Appropriation has been effected by the City
for such purpose, as provided in Section 12.2(a) or (b) of this Lease; or
(d)an uncured Event of Lease Default and termination of this Lease under
Article 14 of this Lease by the Trustee.
Except for an event described in subparagraph (c) above, upon termination of this Lease, the City
agrees to peacefully deliver possession of the Leased Property to the Trustee.
Termination of the Lease Term shall terminate all unaccrued obligations of the City
under this Lease, and shall terminate the City’s rights of possession under this Lease (except to
the extent of the holdover provisions of Sections 6.5 and 14.2(c)(i) hereof, and except for any
conveyance pursuant to Article 12 of this Lease). All obligations of the City accrued prior to
such termination shall be continuing until the Trustee gives written notice to the City that such
accrued obligations have been satisfied.
Upon termination of the Lease Term any moneys received by the Trustee in excess of the
amounts necessary to terminate and discharge the Indenture, shall be paid to the City.
The City shall not have the right to terminate this Lease due to a default by the Trustee
under this Lease.
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ARTICLE 5
ENJOYMENT OF THE LEASED PROPERTY
Trustee’s Covenant of Quiet Enjoyment. The Trustee hereby
covenants that the City shall, during the Lease Term, peaceably and quietly have, hold and enjoy
the Leased Property without suit, trouble or hindrance from the Trustee. The Trustee shall not
interfere with the quiet use and enjoyment of the Leased Property by the City during the Lease
Term so long as no Event of Lease Default shall have occurred. The Trustee shall, at the request
of the City and at the cost of the City, cooperate fully in any legal action in which the City
asserts against third parties its right to such possession and enjoyment, or which involves the
imposition of any taxes or other governmental charges on or in connection with the Leased
Property. In addition, the City may at its own expense join in any legal action affecting its
possession and enjoyment of the Leased Property and shall be joined in any action affecting its
liabilities hereunder.
The provisions of this Article 5 shall be subject to the Trustee’s right to inspect
the Leased Property and the City’s books and records with respect thereto as provided in Section
11.6 hereof.
City’s Need for the Leased Property; Determinations as to Fair
Value and Fair Purchase Price. The City has determined and hereby determines that it has a
current need for the Leased Property. It is the present intention and expectation of the City that
this Lease will be renewed annually until the Trustee’s interests in the Site Lease are released
and unencumbered title to the Leased Property is acquired by the City pursuant to this Lease; but
this declaration shall not be construed as contractually obligating or otherwise binding the City.
The City has determined and hereby determines that the Base Rentals under this Lease during the
Lease Term for the Leased Property represent the fair value of the use of the Leased Property
and that the Purchase Option Price for the Leased Property will represent the fair purchase price
of the Trustee’s leasehold interest in the Leased Property at the time of the exercise of the option.
The City has determined and hereby determines that the Base Rentals do not exceed a reasonable
amount so as to place the City under an economic compulsion to renew this Lease or to exercise
its option to purchase the Trustee’s leasehold interest in the Leased Property hereunder. In
making such determinations, the City has given consideration to the estimated current value of
the Leased Property, the uses and purposes for which the Leased Property will be employed by
the City, the benefit to the citizens and inhabitants of the City by reason of the use and
occupancy of the Leased Property pursuant to the terms and provisions of this Lease, the City’s
option to purchase the Trustee’s leasehold interest in the Leased Property and the expected
eventual vesting of unencumbered title to the Leased Property in the City. The City hereby
determines and declares that the period during which the City has an option to purchase the
Trustee’s leasehold interest in the Leased Property (i.e., the entire maximum Lease Term for the
Leased Property) does not exceed the weighted average useful life of the Leased Property.
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ARTICLE 6
PAYMENTS BY THE CITY
Payments to Constitute Currently Budgeted Expenditures of the
City. The City and the Trustee acknowledge and agree that the Base Rentals, Additional Rentals
and any other obligations hereunder shall constitute currently budgeted expenditures of the City,
if an Appropriation has been effected for such purpose. The City’s obligations to pay Base
Rentals, Additional Rentals and any other obligations under this Lease shall be from year to year
only (as further provided in Article 4 and Sections 6.2 and 6.4 hereof), shall extend only to
moneys for which an Appropriation has been effected by the City, and shall not constitute a
mandatory charge, requirement or liability in any ensuing Fiscal Year beyond the then current
Fiscal Year. No provision of this Lease shall be construed or interpreted as a delegation of
governmental powers or as creating a multiple fiscal year direct or indirect debt or other financial
obligation whatsoever of the City or a general obligation or other indebtedness of the City within
the meaning of any constitutional, Charter provision or statutory debt limitation, including
without limitation Article X, Section 20 of the Colorado constitution (except as provided in
Section 10.4 of the Charter concerning the limitation of City indebtedness to 20% of the assessed
valuation of taxable property in the City). No provision of this Lease shall be construed or
interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a
lending of the credit of the City within the meaning of Sections 1 or 2 of Article XI of the
Constitution of the State. Neither this Lease nor the Certificates shall directly or indirectly
obligate the City to make any payments beyond those for which an Appropriation has been
effected by the City for the City’s then current Fiscal Year. The City shall be under no
obligation whatsoever to exercise its option to purchase the Trustee’s leasehold interest in the
Leased Property. No provision of this Lease shall be construed to pledge or to create a lien on
any class or source of City moneys, nor shall any provision of this Lease restrict the future
issuance of any City bonds or obligations payable from any class or source of City moneys
(provided, however, that certain restrictions in the Indenture shall apply to the issuance of
Additional Certificates).
Base Rentals, Purchase Option Price and Additional Rentals.
(a)The City shall pay Base Rentals for which an Appropriation has been
effected by the City, directly to the Trustee during the Initial Term and any Renewal
Term, on the Base Rentals Payment Dates and in the “Total Base Rentals” amounts set
forth in Exhibit C (Base Rentals Schedule) attached hereto and made a part hereof. A
portion of each payment of Base Rentals for the Certificates is designated and will be
paid as interest, and Exhibit C (Base Rentals Schedule) hereto sets forth the Interest
Portion of each payment of Base Rentals for the Certificates. The City shall receive
credit against its obligation to pay Base Rentals to the extent moneys are held by the
Trustee on deposit in the Base Rentals Fund created under the Indenture and are available
to pay Base Rentals. The City acknowledges that upon receipt by the Trustee of each
payment of Base Rentals, the Trustee, pursuant to the terms of the Indenture, is to deposit
the amount of such Base Rentals in the Base Rentals Fund.
The Base Rentals set forth in Exhibit C shall be recalculated in the event of the
execution and delivery of Additional Certificates as provided in the Indenture and shall
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also be recalculated in the event of a partial redemption of the Certificates. In such event
the City Representative shall provide the Trustee with a revised Base Rentals Schedule.
(b)The City may, on any date, pay the then applicable Purchase Option Price
for the purpose of terminating this Lease and the Site Lease in whole and purchasing the
Trustee’s leasehold interest in the Leased Property as further provided in Article 12 of
this Lease. Subject to the Approval of Special Counsel, the City may also, at any time
during the Lease Term, (1)prepay any portion of the Base Rentals due under this Lease
and (2)in connection with such prepayment, recalculate the Base Rentals set forth in
Exhibit C (Base Rentals Schedule). The City shall give the Trustee notice of its
intention to exercise either of such options not less than forty-five (45) days in advance of
the date of exercise and shall deposit with the Trustee by not later than the Business Day
preceding the date of exercise an amount equal to the Purchase Option Price due on the
date of exercise or the applicable amount of Base Rentals to be prepaid. If the City shall
have given notice to the Trustee of its intention to prepay Base Rentals but shall not have
deposited the amounts with the Trustee on the date specified in such notice, the City shall
continue to pay Base Rentals which have been specifically appropriated by the Council
for such purpose as if no such notice had been given. The Trustee may waive the right to
receive forty-five (45) days advance notice and may agree to a shorter notice period in
the sole determination of the Trustee. The Base Rentals set forth in Exhibit C (Base
Rentals Schedule) shall also be recalculated upon any Rate Reset Date. Any such revised
Exhibit C (Base Rentals Schedule) shall be prepared by the City Representative and
delivered to the Trustee. The Trustee may rely upon such revised Exhibit C (Base
Rentals Schedule) and has no duty to make an independent investigation in connection
therewith.
(c)All Additional Rentals shall be paid by the City on a timely basis directly
to the person or entity to which such Additional Rentals are owed. Additional Rentals
shall include, without limitation, the reasonable fees and expenses of the Trustee,
reasonable expenses of the Trustee in connection with the Leased Property and for the
cost of taxes, insurance premiums, utility charges, maintenance and repair costs and all
other expenses expressly required to be paid hereunder,. All of the payments required by
this paragraph are subject to Appropriation by the City; provided, however, a failure by
the City to budget and appropriate moneys for any of the payments required by this
paragraph shall constitute an Event of Nonappropriation.
If the City’s estimates of Additional Rentals for any Fiscal Year are not itemized in the
budget required to be furnished to the Trustee under Section 4.1 of this Lease, the City shall
furnish an itemization of such estimated Additional Rentals to the Trustee on or before the 15th
day preceding such Fiscal Year.
Manner of Payment. The Base Rentals, for which an Appropriation
has been effected by the City, and, if paid, the Purchase Option Price, shall be paid or prepaid by
the City to the Trustee at its corporate trust office by wire transfer of federal funds, certified
funds or other method of payment acceptable to the Trustee in lawful money of the United States
of America.
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The obligation of the City to pay the Base Rentals and Additional Rentals as required
under this Article 6 and other sections hereof in any Fiscal Year for which an Appropriation has
been effected by the City for the payment thereof shall be absolute and unconditional and
payment of the Base Rentals and Additional Rentals in such Fiscal Years shall not be abated
through accident or unforeseen circumstances, or any default by the Trustee under this Lease, or
under any other agreement between the City and the Trustee, or for any other reason including
without limitation, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Leased Property, commercial frustration of purpose, or failure of
the Trustee, to perform and observe any agreement, whether expressed or implied, or any duty,
liability or obligation arising out of or connected with this Lease, it being the intention of the
parties that the payments required by this Lease will be paid in full when due without any delay
or diminution whatsoever, subject only to the annually renewable nature of the City’s obligation
hereunder as set forth in Section 6.1 hereof, and further subject to the City’s rights under Section
10.3 hereof. Notwithstanding any dispute between the City and the Trustee, the City shall,
during the Lease Term, make all payments of Base Rentals and Additional Rentals in such Fiscal
Years and shall not withhold any Base Rentals or Additional Rentals, for which an Appropriation
has been effected by the City, pending final resolution of such dispute (except to the extent
permitted by Sections 8.2 and 9.3 hereof with respect to certain Additional Rentals), nor shall the
City assert any right of set-off or counterclaim against its obligation to make such payments
required hereunder. No action or inaction on the part of the Trustee shall affect the City’s
obligation to pay all Base Rentals and Additional Rentals, for which a specific Appropriation has
been effected by the City for such purpose, in such Fiscal Years subject to this Article (except to
the extent provided by Sections 8.2 and 9.3 hereof with respect to certain Additional Rentals).
Nonappropriation. In the event that the City gives notice that it intends
to not renew this Lease as provided by Section 4.1 hereof or the City shall not effect an
Appropriation, on or before December 31 of each Fiscal Year, of moneys to pay all Base Rentals
and reasonably estimated Additional Rentals coming due for the next ensuing Renewal Term as
provided in Section 4.1 hereof and this Article, or in the event that the City is proceeding under
the provisions of Section 10.3(c) hereof (when applicable), an Event of Nonappropriation shall
be deemed to have occurred; subject, however, to each of the following provisions:
(a)In the event the Trustee does not receive the written notice provided for by
Section 4.1 hereof or evidence that an Appropriation has been effected by the City on or
before December 31 of a Fiscal Year, then the Trustee shall declare an Event of
Nonappropriation on the first Business Day of the February following such Fiscal Year or
such declaration shall be made on any earlier date on which the Trustee receives official,
specific written notice from the City that this Lease will not be renewed. In order to
declare an Event of Nonappropriation, the Trustee shall send written notice thereof to the
City.
(b)The Trustee shall waive any Event of Nonappropriation which is cured by
the City, within 30 days of the receipt by the City of notice from the Trustee as provided
in (a) above, by a duly effected Appropriation to pay all Base Rentals and sufficient
amounts to pay reasonably estimated Additional Rentals coming due for such Renewal
Term.
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(c)Pursuant to the terms of the Indenture, the Trustee may waive any Event
of Nonappropriation which is cured by the City within a reasonable time with the
procedure described in (b) above.
In the event that during the Initial Term or any Renewal Term, any Additional Rentals shall
become due which were not included in a duly effected Appropriation and moneys are not
specifically budgeted and appropriated or otherwise made available to pay such Additional
Rentals within 60 days subsequent to the date upon which such Additional Rentals are due, an
Event of Nonappropriation shall be deemed to have occurred, upon notice by the Trustee to the
City to such effect (subject to waiver by the Trustee as hereinbefore provided).
If an Event of Nonappropriation occurs, the City shall not be obligated to make payment
of the Base Rentals or Additional Rentals or any other payments provided for herein which
accrue after the last day of the Initial Term or any Renewal Term during which such Event of
Nonappropriation occurs; provided, however, that, subject to the limitations of Sections 6.1 and
14.3 hereof, the City shall continue to be liable for Base Rentals and Additional Rentals allocable
to any period during which the City shall continue to occupy, use or retain possession of the
Leased Property.
Subject to Section 6.5 hereof, the City shall in all events vacate or surrender possession
of the Leased Property by March 1 of the Renewal Term in respect of which an Event of
Nonappropriation has occurred.
After March 1 of the Renewal Term in respect of which an Event of Nonappropriation
has occurred, the Trustee may proceed to exercise all or any Lease Remedies.
The City acknowledges that, upon the occurrence of an Event of Nonappropriation (a)the
Trustee shall be entitled to all moneys then being held in all funds and accounts created under the
Indenture (except any defeasance escrow accounts) to be used as described therein and (b)all
property, funds and rights then held or acquired by the Trustee upon the termination of this Lease
by reason of an Event of Nonappropriation are to be held by the Trustee in accordance with the
terms of the Indenture.
Holdover Tenant. If the City fails to vacate the Leased Property after
termination of this Lease, whether as a result of the occurrence of an Event of Nonappropriation
or an Event of Lease Default as provided in Section 14.2(a) hereof, with the written permission
of the Trustee it will be deemed to be a holdover tenant on a month-to-month basis, and will be
bound by all of the other terms, covenants and agreements of this Lease. Any holding over by
the City without the written permission of the Trustee shall be at sufferance. The amount of rent
to be paid monthly during any period when the City is deemed to be a holdover tenant will be
equal to (a)one-sixth of the Interest Portion of the Base Rentals coming due on the next
succeeding Base Rentals Payment Date plus one-twelfth of the Principal Portion of the Base
Rentals coming due on the next succeeding Base Rentals Payment Date on which a Principal
Portion of the Base Rentals would have been payable with appropriate adjustments to ensure the
full payment of such amounts on the due dates thereof in the event termination occurs during a
Renewal Term plus (b)Additional Rentals as the same shall become due.
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Prohibition of Adverse Budget or Appropriation Modifications. To
the extent permitted by law, the City shall not, during any Fiscal Year of the Lease Term, make
any budgetary transfers or other modifications to its then existing budget and appropriation
measures relating to the Leased Property or this Lease which would adversely affect the City’s
ability to meet its obligation to pay Base Rentals and duly budgeted and appropriated Additional
Rentals hereunder.
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ARTICLE 7
LEASING OF THE SITE; TITLE INSURANCE
Leasing of the Site; Title Insurance. As further provided in Section
8.1 hereof, fee simple title to the Site shall be held by the City. Pursuant to the Site Lease, the
City shall lease the Site to the Trustee. The Trustee shall be provided with an owner’s title
insurance policy insuring the Trustee’s leasehold interest in the Site pursuant to the Site Lease,
subject only to Permitted Encumbrances, in an amount not less than the aggregate principal
amount of the Certificates or such lesser amount as shall be the maximum insurable value of the
Leased Property. Such policy, or a binding commitment therefor, shall be provided to the
Trustee concurrently with the issuance of each series of Certificates.
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ARTICLE 8
TITLE TO LEASED PROPERTY;
LIMITATIONS ON ENCUMBRANCES
Title to the Leased Property. At all times during the Lease Term, title
to the Site shall remain in the City, subject to the Site Lease, this Lease, the Indenture and any
other Permitted Encumbrances. Except personal property purchased by the City at its own
expense pursuant to Section 9.2 of this Lease and personal property purchased by the City, the
Leased Property Project, and any and all additions and modifications to or replacements of any
portion of the Leased Property Project shall be held in the name of the Trustee, subject to this
Lease and Permitted Encumbrances, until foreclosed on or conveyed as provided in Section 7.02
of the Indenture or Article 7 of this Lease, or until the termination of the Site Lease,
notwithstanding (i)the occurrence of an Event of Nonappropriation as provided in Section 6.4 of
this Lease or one or more Events of Default as defined in Section 14.1 of this Lease; (ii)the
occurrence of any event of damage, destruction, condemnation or construction defect or title
defect, as provided in Article 10 of this Lease; (iii)termination of the right of the City to direct
the acquisition, construction and equipping of the Leased Property Project pursuant to the last
sentence of Section 7.1 of this Lease; or (iv)the violation by the Trustee (or by the Trustee as
assignee of the Lessor pursuant to the Indenture) of any provision of this Lease.
The City shall have no right, title or interest in the Leased Property Project, or any
additions and modifications to or replacements of any portion thereto, except as expressly set
forth in this Lease.
No Encumbrance, Mortgage or Pledge of the Leased Property.
Except as may be permitted by this Lease, the City shall not permit any mechanic’s or other lien
to be established or remain against the Leased Property; provided that, if the City shall first
notify the Trustee of the intention of the City to do so, the City may in good faith contest any
mechanic’s or other lien filed or established against the Leased Property, and in such event may
permit the items so contested to remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom if the City shall deliver to the Trustee an opinion of Counsel
stating that by nonpayment of any such items the Trustee’s leasehold interest in the Leased
Property will not be materially endangered, and the Leased Property or any part thereof will not
be subject to loss or forfeiture, otherwise the City shall promptly pay and cause to be satisfied
and discharged all such unpaid items (provided, however, that such payment shall not constitute
a waiver of the right to continue to contest such items). The Trustee will cooperate in any such
contest. Except as may be permitted by this Lease,the City shall not directly or indirectly create,
incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or
with respect to the Leased Property, except Permitted Encumbrances. The City shall promptly,
at its expense,take such action as may be necessary to duly discharge any such mortgage,
pledge, lien, charge, encumbrance or claim not excepted above.
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ARTICLE 9
MAINTENANCE; TAXES; INSURANCE
AND OTHER CHARGES
Maintenance of the Leased Property by the City. Subject to its right
to not appropriate and as otherwise provided in Section 9.3 hereof, the City agrees that at all
times during the Lease Term, the City will maintain, preserve and keep the Leased Property or
cause the Leased Property to be maintained, preserved and kept, in good repair, working order
and condition, and from time to time make or cause to be made all necessary and proper repairs,
including replacements, if necessary. The Trustee shall have no responsibility in any of these
matters or for the making of an y additions, modifications or replacements to the Leased Property.
Modification of the Leased Property; Installation of Furnishings
and Machinery of the City. The City shall have the privilege of making substitutions,
additions, modifications and improvements to the Leased Property, at its own cost and expense,
as appropriate and any such substitutions, additions, modifications and improvements to the
Leased Property shall be the property of the City, subject to the Site Lease, this Lease and the
Indenture and shall be included under the terms of the Site Lease, this Lease and the Indenture;
provided, however, that such substitutions, additions, modifications and improvements shall not
in any way damage the Leased Property or cause the Leased Property to be used for purposes
other than lawful governmental functions of the City (except to the extent of subleasing
permitted under Section 13.2 hereof); and provided that the Leased Property, as improved or
altered, upon completion of such substitutions, additions, modifications and improvements, shall
be of a value not less than the value of the Leased Property immediately prior to such making of
substitutions, additions, modifications and improvements.
The City may also, from time to time in its sole discretion and at its own expense, install
machinery, equipment and other tangible property in or on the Leased Property. All such
machinery, equipment and other tangible property shall remain the sole property of the City in
which the Trustee shall have no interests; provided, however, that title to any such machinery,
equipment and other tangible property which becomes permanently affixed to the Leased
Property shall be included under the terms of the Site Lease, this Lease and the Indenture, in the
event that such Leased Property would be damaged or impaired by the removal of such
machinery, equipment or other tangible property.
The City shall have the right to make substitutions to the Leased Property upon
compliance with the provisions set forth in Section 11.4 hereof.
Taxes, Other Governmental Charges and Utility Charges. In the
event that the Leased Property shall, for any reason, be deemed subject to taxation, assessments
or charges lawfully made by any governmental body, the City shall pay the amount of all such
taxes, assessments and governmental charges then due, as Additional Rentals. With respect to
special assessments or other governmental charges which may be lawfully paid in installments
over a period of years, the City shall be obligated to provide for Additional Rentals only for such
installments as are required to be paid during the upcoming Fiscal Year. Except for Permitted
Encumbrances, the City shall not allow any liens for taxes, assessments or governmental charges
to exist with respect to the Leased Property (including, without limitation, any taxes levied upon
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the Leased Property which, if not paid, will become a charge on the rentals and receipts from the
Leased Property, or any interest therein, including the leasehold interests of the Trustee), or the
rentals and revenues derived therefrom or hereunder. The City shall also pay as Additional
Rentals, as the same respectively become due, all utility and other charges and fees and other
expenses incurred in the operation, maintenance and upkeep of the Leased Property.
The City may, at its expense, in good faith contest any such taxes, assessments, utility
and other charges and, in the event of any such contest, may permit the taxes, assessments, utility
or other charges so contested to remain unpaid during the period of such contest and any appeal
therefrom if the City shall deliver to the Trustee an opinion of Counsel stating that by
nonpayment of any such items the value of the Leased Property will be not materially
endangered and the Leased Property will not be subject to loss or forfeiture, and the Trustee will
not be subject to liability, otherwise such taxes, assessments, utility or other charges shall be paid
forthwith (provided, however, that such payment shall not constitute a waiver of the right to
continue to contest such taxes, assessments, utility or other charges).
Provisions for Liability and Property Insurance. The City shall
cause casualty and property insurance to be carried and maintained with respect to the Leased
Property in an amount equal to the estimated replacement cost of the Leased Property. Such
insurance policy or policies may have a deductible clause in an amount deemed reasonable by
the Council. The City may, in its discretion, insure the Leased Property under blanket insurance
policies which insure not only the Leased Property, but other buildings as well, as long as such
blanket insurance policies comply with the requirements hereof. If the City shall insure against
similar risks by self-insurance, the City may, at its election provide for casualty and property
damage insurance with respect to the Leased Property, partially or wholly by means of a self-
insurance fund. If the City shall elect to self-insure, the City Representative shall annually
furnish to the Trustee a certification of the adequacy of the City’s reserves. The Trustee shall be
named additional insured and loss payee on any casualty and property insurance.
The City shall cause public liability insurance to be carried and maintained with respect
to the activities to be undertaken by and on behalf of the City in connection with the use of the
Leased Property, in an amount not less than the limitations provided in the Colorado
Governmental Immunity Act (Article 10, Title 24, Colorado Revised Statutes, as heretofore or
hereafter amended). Such insurance may contain deductibles and exclusions deemed reasonable
by the Council. The public liability insurance required by this Section may be by blanket
insurance policy or policies. If the City shall insure against similar risks by self-insurance, the
City, at its election may provide for public liability insurance with respect to the Leased
Property, partially or wholly by means of a self-insurance fund. If the City shall elect to self-
insure, the City Representative shall annually furnish to the Trustee a certification of the
adequacy of the City’s reserves. The Trustee shall be named as additional insured and loss payee
on any public liability insurance.
Any casualty and property damage insurance policy required by this Section shall be so
written or endorsed as to make payments under such insurance policy payable to the City and the
Trustee. Each insurance policy provided for in this Section shall contain a provision to the effect
that the insurance company shall not cancel the policy without first giving written notice thereof
to the City at least 30 days in advance of such cancellation. All insurance policies issued
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pursuant to this Section, or certificates evidencing such policies, shall be deposited with the
Trustee. No agent or employee of the City shall have the power to adjust or settle any loss with
respect to the Leased Property in excess of $25,000, whether or not covered by insurance,
without the prior written consent of the Trustee.
The City shall provide the Trustee with evidence that the insurance required pursuant to
this Section is in effect. A certification by the City Representative that such insurance is in effect
shall be sufficient evidence of insurance. A certificate of insurance from the City or the City’s
insurance agent will also be acceptable evidence of insurance. On or about October 1 in each
year the City shall provide annual certification that the insurance required pursuant to this
Section is in effect.
If, at any time during the term of this Lease, it is determined that any part of the Leased
Property is located in a flood zone, as determined in accordance with 12 CFR Chapter 1, Part 22
or its successor (the “Flood Insurance Regulations”), the City, at its own expense, shall obtain
and maintain for the entire term of this Lease flood insurance covering the Leased Property in
such form and amount as is required under the Flood Insurance Regulations. If at any time
during the term of this Lease, the City shall fail to maintain such adequate flood insurance, the
Trustee may, to the extent permitted by law, purchase such insurance on the City’s behalf, and
the cost thereof shall be deemed to be an Additional Rental payable by the City on the Trustee’s
demand as specified in Section 6.2(c) of this Lease. The City shall provide evidence of the
renewal or replacement of such flood insurance at least 15 days prior to its expiration.
Advances. If the City fails to pay any Additional Rentals during the
Lease Term as such Additional Rentals become due, the Trustee may (but shall not be obligated
to) pay such Additional Rentals and the City agrees to reimburse the Trustee to the extent
permitted by law and subject to Appropriation as provided under Article 6 hereof.
Granting of Easements. As long as no Event of Nonappropriation or
Event of Lease Default shall have happened and be continuing, the Trustee, shall upon the
request of the City, (a)grant or enter into easements, permits,licenses, party wall and other
agreements, rights-of-way (including the dedication of public roads) and other rights or
privileges in the nature of easements, permits, licenses, party wall and other agreements and
rights of way with respect to any propert y or rights included in this Lease (whether such rights
are in the nature of surface rights, sub-surface rights or air space rights), free from this Lease and
any security interest or other encumbrance created hereunder or thereunder; (b)release existing
easements, permits, licenses, party wall and other agreements, rights-of-way, and other rights
and privileges with respect to such property or rights, with or without consideration; and
(c)execute and deliver any instrument necessary or appropriate to grant, enter into or release any
such easement, permit, license, party wall or other agreement, right-of-way or other grant or
privilege upon receipt of: (i)a copy of the instrument of grant, agreement or release and (ii)a
written application signed by the City Representative requesting such grant, agreement or release
and stating that such grant, agreement or release will not materially impair the effective use or
materially interfere with the operation of the Leased Property, and will not materially adversely
affect the security intended to be given by or under the Indenture, the Site Lease or this Lease.
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ARTICLE 10
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
Damage, Destruction and Condemnation. If, during the Lease Term,
(a)the Leased Property shall be destroyed (in whole or in part), or damaged
by fire or other casualty; or
(b)title to, or the temporary or permanent use of, the Leased Property or the
estate of the City or the Trustee in the Leased Property is taken under the exercise of the
power of eminent domain by any governmental body or by any person, firm or entity
acting under governmental authority; or
(c)a breach of warranty or a material defect in the construction, manufacture
or design of the Leased Property becomes apparent; or
(d)title to or the use of all or a portion of the Leased Property is lost by
reason of a defect in title thereto,
then, the City shall be obligated to continue to pay Base Rentals and Additional Rentals (subject
to Article 6 hereof).
Obligation to Repair and Replace the Leased Property. The City and
the Trustee, to the extent Net Proceeds are within their respective control, shall cause such Net
Proceeds of any insurance policies, performance bonds or condemnation awards received to be
deposited in a separate trust fund. All Net Proceeds so deposited shall be applied to the prompt
repair, restoration, modification, improvement or replacement of the Leased Property by the
City, upon receipt of requisitions by the Trustee signed by the City Representative stating with
respect to each payment to be made:
(a)the requisition number;
(b)the name and address of the person, firm or entity to whom payment is
due;
(c)the amount to be paid; and
(d)that each obligation mentioned therein has been properly incurred, is a
proper charge against the separate trust fund and has not been the basis of any previous
withdrawal and specifying in reasonable detail the nature of the obligation, accompanied
by a bill or a statement of account for such obligation.
The Trustee shall have no duty to review or examine the accompanying bill, invoice or
statement of account, but may conclusively rely on the properly executed disbursement request.
The City and the Trustee shall agree to cooperate and use their best reasonable efforts subject to
the terms of the Indenture to enforce claims which may arise in connection with material defects
in the construction, manufacture or design of the Leased Property or otherwise. If there is a
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balance of any Net Proceeds allocable to the Leased Property remaining after such repair,
restoration, modification, improvement or replacement has been completed, this balance shall be
used by the City, to:
(a)add to, modify or alter the Leased Property or add new components
thereto, or
(b)prepay the Base Rentals with a corresponding adjustment in the amount of
Base Rentals payable under Exhibit C (Base Rentals Schedule) to this Lease, or
(c)accomplish a combination of (a) and (b).
Any repair, restoration, modification, improvement or replacement of the Leased
Property paid for in whole or in part out of Net Proceeds allocable to the Leased Property shall
be the property of the City, subject to the Site Lease, this Lease and the Indenture and shall be
included as part of the Leased Property under this Lease.
Insufficiency of Net Proceeds. If the Net Proceeds (plus any amounts
withheld from such Net Proceeds by reason of any deductible clause) are insufficient to pay in
full the cost of any repair, restoration, modification, improvement or replacement of the Leased
Property required under Section 10.2 of this Lease, the City may elect to:
(a)complete the work or replace such Leased Property (or portion thereof)
with similar property of a value equal to or in excess of such portion of the Leased
Property and pay as Additional Rentals, to the extent amounts for Additional Rentals
which have been specifically appropriated by the City are available for payment of such
cost, any cost in excess of the amount of the Net Proceeds allocable to the Leased
Property, and the City agrees that, if by reason of any such insufficiency of the Net
Proceeds allocable to the Leased Property, the City shall make any payments pursuant to
the provisions of this paragraph, the City shall not be entitled to any reimbursement
therefor from the Trustee, nor shall the City be entitled to any diminution of the Base
Rentals and Additional Rentals, for which a specific Appropriation has been effected by
the City for such purpose, payable under Article 6 of this Lease; or
(b)apply the Net Proceeds allocable to the Leased Property to the payment of
the Purchase Option Price in accordance with Article 12 of this Lease, or an appropriate
portion thereof. In the event of an insufficiency of the Net Proceeds for such purpose, the
City shall, subject to the limitations of Section 6.1 hereof, pay such amounts as may be
necessary to equal that portion of the Purchase Option Price which is attributable to the
Leased Property for which Net Proceeds have been received (as certified to the Trustee
by the City); and in the event the Net Proceeds shall exceed such portion of the Purchase
Option Price, such excess shall be used as directed by the City in the same manner as set
forth in Section 10.2 hereof; or
(c)if the City does not timely budget and appropriate sufficient funds to
proceed under either (a) or (b) above, an Event of Nonappropriation will be deemed to
have occurred and, subject to the City’s right to cure, the Trustee may pursue remedies
available to it following an Event of Nonappropriation.
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The above referenced election shall be made by the City within 90 days of the occurrence
of an event specified in Section 10.1 of this Lease. It is hereby declared to be the City’s present
intention that, if an event described in Section 10.1 hereof should occur and if the Net Proceeds
shall be insufficient to pay in full the cost of repair, restoration, modification, improvement or
replacement of the Leased Property, the City will use its best efforts to proceed under either
paragraph (a) or paragraph (b) above; but it is also acknowledged that the City must operate
within budgetary and other economic constraints applicable to it at the time, which cannot be
predicted with certainty; and accordingly the foregoing declaration shall not be construed to
contractually obligate or otherwise bind the City.
Cooperation of the Trustee. The Trustee shall cooperate fully with the
City in filing any proof of loss with respect to any insurance policy or performance bond
covering the events described in Section 10.1 of this Lease and in the prosecution or defense of
any prospective or pending condemnation proceeding with respect to the Leased Property and
the enforcement of all warranties relating to the Leased Property. So long as no Event of Lease
Default or Event of Nonappropriation has occurred and is then existing, the Trustee shall not
voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance
claim performance or payment bond claim, prospective or pending condemnation proceeding
with respect to the Leased Property without the written consent of the City.
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ARTICLE 11
DISCLAIMER OF WARRANTIES; OTHER COVENANTS
Disclaimer of Warranties. THE TRUSTEE HAS NOT MADE AND
WILL NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED
PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE LEASED PROPERTY. THE CITY HEREBY ACKNOWLEDGES AND DECLARES
THAT THE CITY IS SOLELY RESPONSIBLE FOR THE MAINTENANCE AND
OPERATION OF THE LEASED PROPERTY, AND THAT THE TRUSTEE HAS NO
RESPONSIBILITY THEREFOR. For the purpose of enabling the City to discharge such
responsibility, the Trustee constitutes and appoints the City as its attorney in fact for the purpose
of asserting and enforcing, at the sole cost and expense of the City, all manufacturer’s warranties
and guaranties, express or implied, with respect to the Leased Property,as well as any claims or
rights the Trustee may have in respect of the Leased Property against any manufacturer, supplier,
contractor or other person. Except as otherwise provided in this Lease, the Trustee shall not be
liable for any direct or indirect,incidental, special, punitive or consequential damage in
connection with or arising out of this Lease or the existence, furnishing, functioning or use by the
City of any item, product or service provided for herein except that nothing shall relieve the
Trustee’s liability for any claims, damages, liability or court awards, including costs, expenses
and attorney fees, relating to or arising from the Trustee’s actions or omissions that result from
the negligence, bad faith or intentional misconduct of the Trustee or its employees.
Further Assurances and Corrective Instruments. The Trustee and
the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such amendments hereof or supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate or incorrect
description of the Leased Property.
Compliance with Requirements. During the Lease Term, the City and
the Trustee shall observe and comply promptly to the extent possible with all current and future
orders of all courts having jurisdiction over the Leased Property, provided that the City and the
Trustee may contest or appeal such orders so long as they are in compliance with such orders
during the contest or appeal period, and all current and future requirements of all insurance
companies writing policies covering the Leased Property.
Release and Substitution of Leased Property. So long as no Event of
Lease Default or Event of Nonappropriation shall have occurred and be continuing, the City shall
prepare and the Trustee shall release all or any portion of the Leased Property, and shall execute
all documents necessary or appropriate to reconvey or release such portion of the Leased
Property to the City, free of all restrictions and encumbrances imposed or created by the Site
Lease, this Lease or the Indenture, upon receipt by the Trustee of the following: (a)a written
request of the City Representative for such release, describing the portion of the Leased Property
to be released; (b)a certificate of the City Representative certifying (i)the fair market value of
the portion of the Leased Property to be released and the fair value of the Trustee’s interest in
any real property to be substituted for the portion of the Leased Property to be released; (ii)that
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the disposition of the portion of the Leased Property to be released and the substitution therefor
of the real property to be substituted for the portion of the Leased Property to be released (if any)
will not materially adversely affect the ability of the City to operate the Leased Property or to
fulfill its obligations under this Lease; (iii)that any real property to be substituted for a portion of
the Leased Property to be released is necessary or useful to the operation of the Leased Property;
and (iv)that the fair market value of the Trustee’s interest in any real property to be substituted
for the portion of the Leased Property to be released, together with cash to be paid by the City to
the Trustee, if any, is at least equal to the fair market value of the portion of the Leased Property
to be released; (c)appraisals of the fair market value of the portion of the Leased Property to be
released and any real property to be substituted for the portion of the Leased Property to be
released, respectively, by a member of the American Institute of Real Estate Appraisers (MAI);
and (d)supplements and amendments to the Site Lease, this Lease and the Indenture and any
other documents necessary to effect the substitution for any portion of the Leased Property to be
released. The City agrees that any cash paid to the Trustee pursuant to the provisions of this
Section shall be used to redeem or defease Outstanding Certificates.
Covenant to Reimburse Legal Expenses. To the extent permitted by
law, the City shall defend and hold harmless the Trustee against claims arising from the alleged
negligent acts or omissions of the City’s public employees, which occurred or are alleged to have
occurred during the performance of their duties and within the scope of their employment, unless
such acts or omissions are, or are alleged to be, willful and wanton. Such claims shall be subject
to the limitations of the Colorado Governmental Immunity Act, C.R.S. 24-10-101 to 24-10-120.
The City shall include as Additional Rentals, the reimbursement of reasonable and necessary fees
and expenses incurred by the Trustee to defend the Trustee from and against all claims, by or on
behalf of any person, firm, corporation or other legal entity arising from the conduct or
management of the Leased Property or from any work or thing done on the Leased Property
during the Lease Term requested by the City, or from any condition of the Leased Property
caused by the City. This duty to reimburse the Trustee’s legal expenses is not an indemnification
and it is expressly understood that the City is not indemnifying the Trustee and, as previously
stated, is limited to Net Proceeds and moneys, if any, in excess of such Net Proceeds, for which
an Appropriation has been effected.
Access to the Leased Property; Rights to Inspect Books. The City
agrees that the Trustee shall have the right at all reasonable times to examine and inspect the
Leased Property (subject to such regulations as may be imposed by the City for security
purposes) and all of the City’s books and records with respect thereto, but the Trustee has no
duty to inspect the Leased Property books or records. The City further agrees that the Trustee
shall have such rights of access to the Leased Property as may be reasonably necessary to cause
the proper maintenance of the Leased Property in the event of failure by the City to perform its
obligations under this Lease. The Indenture allows the City to have the right at all reasonable
times to examine and inspect all of the Trustee’s books and records with respect to the Leased
Property and all funds and accounts held under the Indenture.
The City and its representatives shall have the right to examine and inspect the books and
records of the Trustee relating to the Leased Property at all reasonable times from the date of this
Lease and until three years after the termination date of this Lease.
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ARTICLE 12
PURCHASE OPTION
Purchase Option. The City shall have the option to purchase the
Trustee’s leasehold interest in the Leased Property, but only if an Event of Lease Default or an
Event of Nonappropriation has not occurred and is then continuing. The City may exercise its
option on any date by complying with one of the conditions set forth in Section 12.2.
The City shall give the Trustee notice of its intention to exercise its option not less than
forty-five (45) days in advance of the date of exercise and shall deposit the required moneys with
the Trustee on or before the date selected to pay the Purchase Option Price. The Trustee may
waive such notice or may agree to a shorter notice period in the sole determination of the
Trustee.
If the City shall have given notice to the Trustee of its intention to purchase the Trustee’s
leasehold interest in the Leased Property or prepay Base Rentals, but shall not have deposited the
amounts with the Trustee on the date specified in such notice, the City shall continue to pay Base
Rentals, which have been specifically appropriated by the City for such purpose, as if no such
notice had been given.
Conditions for Purchase Option. The Trustee shall transfer and
release the Trustee’s leasehold interests in the Leased Property to the City in the manner
provided for in Section 12.3 of this Lease; provided, however, that prior to such transfer and
release, either:
(a)the City shall have paid the then applicable Purchase Option Price which
shall equal the sum of the amount necessary to defease and discharge the Indenture as
provided therein (i.e., provision for payment of all principal and interest portions of any
and all Certificates which may have been executed and delivered pursuant to the
Indenture shall have been made in accordance with the terms of the Indenture) plus any
fees and expenses then owing to the Trustee; or
(b)the City shall have paid all Base Rentals set forth in Exhibit C (Base
Rentals Schedule) hereto, for the entire maximum Lease Term, and all then current
Additional Rentals required to be paid hereunder.
At the City’s option, amounts then on deposit in any fund held under the Indenture
(except any defeasance escrow funds) may be credited toward the Purchase Option Price.
Manner of Conveyance. At the closing of the purchase or other
conveyance of all of the Trustee’s leasehold interest in the Leased Property pursuant to Section
12.2 of this Lease, the Trustee shall release and terminate the Site Lease, this Lease and the
Indenture and execute and deliver to the City any necessary documents releasing, assigning,
transferring and conveying the Trustee’s leasehold interest in the Leased Property, as they then
exist, subject only to the following:
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(a)Permitted Encumbrances, other than the Site Lease, this Lease and the
Indenture;
(b)all liens, encumbrances and restrictions created or suffered to exist by the
Trustee as required or permitted by the Site Lease, this Lease or the Indenture or arising
as a result of any action taken or omitted to be taken by the Trustee as required or
permitted by the Site Lease, this Lease or the Indenture;
(c)any lien or encumbrance created or suffered to exist by action of the City;
and
(d)those liens and encumbrances (if any) to which title to the Leased Property
was subject when leased to the Trustee.
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ARTICLE 13
ASSIGNMENT AND SUBLEASING
Assignment by the Trustee; Replacement of the Trustee. Except as
otherwise provided in this Lease and the Indenture, this Lease may not be assigned by the
Trustee for any reason other than to a successor by operation of law or to a successor trustee
under the Indenture or with the prior written consent of the City which consent shall not be
unreasonably withheld. The Trustee will notify the City of any assignment to a successor by
operation of law.
If an Event of Lease Default or Event of Nonappropriation has occurred and is
continuing, the Trustee may act as herein provided, including exercising the remedies set forth in
Section 14.2, without the prior written direction of the City.
Assignment and Subleasing by the City. This Lease may not be
assigned by the City for any reason other than to a successor by operation of law. However, the
Leased Property may be subleased, as a whole or in part, by the City, without the necessity of
obtaining the consent of the Trustee or any owner of the Certificates subject to each of the
following conditions:
(a)This Lease, and the obligations of the City hereunder, shall, at all times
during the Lease Term remain obligations of the City, and the City shall maintain its
direct relationships with the Trustee, notwithstanding any sublease; and
(b)The City shall furnish or cause to be furnished to the Trustee a copy of any
sublease agreement.
The Trustee acknowledges that the City is subleasing the Leased Property pursuant to the
AspenFilm Sublease and that the Trustee covenants not to disturb AspenFilm’s occupancy of the
Lease Property so long as AspenFilm is in compliance with the AspenFilm Sublease. This
covenant shall survive the termination of this Lease. Upon the occurrence of any Event of Lease
Default and termination of the Lease Term, the City assigns all of its right title and interest in the
AspenFilm Sublease to the Trustee.
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ARTICLE 14
EVENTS OF LEASE DEFAULT AND REMEDIES
Events of Lease Default Defined. Any one of the following shall be
Events of Lease Default under this Lease:
(a)failure by the City to pay any Base Rentals or Additional Rentals, which
have been specifically appropriated by the City for such purpose, during the Initial Term
or any Renewal Term, on or before the date on which they are due; or
(b)subject to the provisions of Section 6.5 hereof, failure by the City to
vacate or surrender possession of the Leased Property by March 1 of any Renewal Term
in respect of which an Event of Nonappropriation has occurred; or
(c)failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder, other than as referred to in
(a) or (b), (and other than a failure to comply with Section 11.6 hereof) for a period of 30
days after written notice, specifying such failure and requesting that it be remedied shall
be received by the City from the Trustee, unless the Trustee shall agree in writing to an
extension of such time prior to its expiration; provided that if the failure stated in the
notice cannot be corrected within the applicable period, the Trustee shall not withhold its
consent to an extension of such time if corrective action can be instituted by the City
within the applicable period and diligently pursued until the default is corrected; or
(d)failure by the City to comply with the terms of the Site Lease.
The foregoing provisions of this Section 14.1 are subject to the following limitations:
(i)the City shall be obligated to pay the Base Rentals and Additional
Rentals, which have been specifically appropriated by the City for such purpose,
only during the then current Lease Term, except as otherwise expressly provided
in this Lease; and
(ii)if, by reason of Force Majeure, the City or the Trustee shall be
unable in whole or in part to carry out any agreement on their respective parts
herein contained other than the City’s agreement to pay the Base Rentals and
Additional Rentals due hereunder, the City or the Trustee shall not be deemed in
default during the continuance of such inability. The City and the Trustee each
agree, however, to remedy, as promptly as legally and reasonably possible, the
cause or causes preventing the City or the Trustee from carrying out their
respective agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the City.
Remedies on Default. Whenever any Event of Lease Default shall have
happened and be continuing beyond any applicable cure period, the Trustee may, or shall at the
request of the owners of a majority in aggregate principal amount of the Certificates then
Outstanding and upon indemnification as to costs and expenses as provided in the Indenture,
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without any further demand or notice, take one or any combination of the following remedial
steps:
(a)terminate the Lease Term and give notice to the City to vacate and
surrender possession of the Leased Property, which vacation and surrender the City
agrees to complete within thirty (30) days from the date of such notice; provided, in the
event the City does not vacate and surrender possession on the termination date, the
provisions of Section 6.5 hereof shall apply;
(b)lease or sublease the Leased Property or sell or assign any interest the
Trustee has in the Leased Property, including the Trustee’s leasehold interest in the
Leased Property;
(c)recover from the City:
(i)the portion of Base Rentals and Additional Rentals, for which a
specific Appropriation has been effected by the City for such purpose, which
would otherwise have been payable hereunder, during any period in which the
City continues to occupy, use or possess the Leased Property; and
(ii)Base Rentals and Additional Rentals, for which a specific
Appropriation has been effected by the City for such purpose, which would
otherwise have been payable by the City hereunder during the remainder, after the
City vacates and surrenders possession of the Leased Property, of the Fiscal Year
in which such Event of Lease Default occurs; or
(d)take whatever action at law or in equity may appear necessary or desirable
to enforce its rights in and to the Leased Property under the Site Lease, this Lease and the
Indenture.
Upon the occurrence of an Event of Nonappropriation, the Trustee shall be entitled to
recover from the City the amounts set forth in Section 14.2(c)(i) hereof if the City continues to
occupy the Leased Property after December 31 of the Fiscal Year in which such Event of
Nonappropriation occurs.
The Trustee shall also be entitled, upon any Event of Lease Default, to any moneys in any
funds or accounts created under the Indenture (except any defeasance escrow accounts).
Limitations on Remedies. The remedies in connection with an Event
of Lease Default shall be limited as set forth in this Section. A judgment requiring a payment of
money may be entered against the City by reason of an Event of Lease Default only as to the
City’s liabilities described in paragraph (c) of Section 14.2 hereof. A judgment requiring a
payment of money may be entered against the City by reason of an Event of Nonappropriation
only to the extent that the City fails to vacate and surrender possession of the Leased Property as
required by Section 6.4 of this Lease, and only as to the liabilities described in paragraph (c)(i) of
Section 14.2 hereof. The remedy described in paragraph (c)(ii) of Section 14.2 of this Lease is
not available for an Event of Lease Default consisting of failure by the City to vacate and
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surrender possession of the Leased Property by March 1 following an Event of
Nonappropriation.
No Remedy Exclusive. Subject to Section 14.3 hereof, no remedy
herein conferred upon or reserved to the Trustee, is intended to be exclusive, and every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved in
this Article 14, it shall not be necessary to give any notice, other than such notice as may be
required in this Article 14.
Waivers. The Trustee may waive any Event of Lease Default under this
Lease and its consequences. In the event that any agreement contained herein should be
breached by either party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other breach hereunder.
Payment of Base Rentals or Additional Rentals by the City shall not constitute a waiver of any
breach or default by the Trustee hereunder.
Agreement to Pay Attorneys’ Fees and Expenses. In the event that
either party hereto shall default under any of the provisions hereof and the nondefaulting party
shall employ attorneys or incur other expenses for the collection of Base Rentals or Additional
Rentals, or the enforcement of performance or observance of any obligation or agreement on the
part of the defaulting party herein contained, the defaulting party agrees that it shall on demand
therefor pay to the nondefaulting party, to the extent permitted by law, the reasonable fees of
such attorneys and such other reasonable expenses so incurred by the nondefaulting party.
Notwithstanding the foregoing, any such fees and expenses owed by the City hereunder shall
constitute Additional Rentals for all purposes of this Lease and shall be subject to Appropriation.
Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. To the extent permitted by law, in the case of an Event of Nonappropriation
or an Event of Lease Default neither the City nor any one claiming through or under the City
shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force in order to prevent or hinder the
enforcement of the Indenture; and the Trustee and the City, for themselves and all who may at
any time claim through or under it, hereby waives, to the full extent that it may lawfully do so,
the benefit of all such laws. Notwithstanding the foregoing, it is expressly understood that the
City cannot and does not hereby waive its right to set up, claim or seek to take advantage of its
police powers or its Colorado constitutional or statutory right of eminent domain.
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ARTICLE 15
MISCELLANEOUS
Sovereign Powers of City. Nothing in this Lease shall be construed as
diminishing, delegating, or otherwise restricting any of the sovereign powers or immunities of
the City. Nothing in this Lease shall be construed to require the City to occupy and operate the
Leased Property other than as lessee, or to require the City to exercise its right to purchase the
Leased Property as provided in Article 12 hereof.
Notices. All notices, certificates or other communications to be given
hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
certified or registered mail, postage prepaid, addressed as follows:
If to the Trustee:
Zions Bancorporation, National Association
1001 17th Street, Ste. 850
Denver, Colorado 80202
Attn: Corporate Trust & Escrow Services
Email: DenverCorporateTrust@zionsbancorp.com
Email: neil.witoff@zionsbancorp.com
Phone: (720) 947-7438
If to the City:
City of Aspen, Colorado
130 South Galena Street
Aspen, Colorado 81611-1975
Attention: Finance Director
Email: pete.strecker@cityofaspen.com
Phone: (970) 920-5007
The City and the Trustee may, by written notice, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent.
Third Party Beneficiaries. It is expressly understood and agreed that
the Owners of the outstanding Certificates are third party beneficiaries to this Lease and
enforcement of the terms and conditions of this Lease, and all rights of action relating to such
enforcement, shall be strictly reserved to the City, as lessee and the Trustee, as lessor, and their
respective successors and assigns, and to the Owners of the Certificates. Except as hereinafter
provided, nothing contained in this Lease shall give or allow any such claim or right of action by
any other or third person on this Lease. It is the express intention of the City and the Trustee that
any person other than the City, the Trustee, or the Owners of the Certificates receiving services
or benefits under this Lease shall be deemed to be an incidental beneficiary only.
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Binding Effect. This Lease shall inure to the benefit of and shall be
binding upon the Trustee and the City and their respective successors and assigns, subject,
however, to the limitations contained in Article 13 of this Lease.
Amendments. This Lease may only be amended, changed, modified or
altered as provided in the Indenture.
Amounts Remaining in Funds. It is agreed by the parties hereto that
any amounts remaining in the Base Rentals Fund or any other fund or account created under the
Indenture (except any defeasance escrow account), upon termination of the Lease Term, and
after payment in full of the Certificates (or provision for payment thereof having been made in
accordance with the provisions of this Lease and the Indenture) and fees and expenses of the
Trustee in accordance with this Lease and the Indenture, shall belong to and be paid to the City
by the Trustee, as an overpayment of Base Rentals.
Triple Net Lease. This Lease shall be deemed and construed to be a
“triple net lease” and, subject to the prior Appropriation requirements hereof, the City shall pay
absolutely net during the Lease Term, the Base Rentals, the Additional Rentals and all expenses
of, or other payments in respect of, the Leased Property as required to be paid by the City under
this Lease, for which a specific Appropriation has been effected by the City for such purpose,
free of any deductions, and without abatement, deduction or setoff (other than credits against
Base Rentals expressly provided for in this Lease).
Computation of Time. In computing a period of days, the first day is
excluded and the last day is included. If the last day of any period is not a Business Day, the
period is extended to include the next day which is a Business Day. If a number of months is to
be computed by counting the months from a particular day, the period ends on the same
numerical day in the concluding month as the day of the month from which the computation is
begun, unless there are not that many days in the concluding month, in which case the period
ends on the last day of that month. Notwithstanding the foregoing, Base Rentals shall be
recalculated in the event of any Prepayment of Base Rentals as provided in Section 6.2(b) hereof.
Payments Due on Holidays. If the date for making any payment or the
last day for performance of any act or the exercising of any right, as provided in this Lease, shall
be a day other than a Business Day, such payment may be made or act performed or right
exercised on the next succeeding Business Day, with the same force and effect as if done on the
nominal date provided in this Lease.
Severability. Except for the requirement of the City to pay Base
Rentals for which a specific Appropriation has been effected by the City for such purpose and
the requirement of the Trustee to provide quiet enjoyment of the Leased Property and to convey
the Trustee’s leasehold interest in the Leased Property to the City under the conditions set forth
in Article 12 of this Lease (which, if held invalid or unenforceable by any court of competent
jurisdiction, may have the effect of invalidating or rendering unenforceable the other provisions
of this Lease), in the event that any other provision of this Lease shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
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Execution in Counterparts. This Lease may be simultaneously
executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Applicable Law. This Lease shall be governed by and construed in
accordance with the law of the State of Colorado.
The Trustee is Independent of the City. Neither the Trustee nor any
agent or employee of the Trustee shall be or shall be deemed to be an agent or employee of the
City. The Trustee acknowledges that the Trustee and its employees are not entitled to
unemployment insurance benefits of the City unless the Trustee or a third party otherwise
provides such coverage and that the City does not pay for or otherwise provide such coverage.
The Trustee shall have no authorization, express or implied, to bind the City to any agreements,
liability or understanding except as expressly set forth herein.
Governmental Immunity. Notwithstanding any other provisions of
this Lease to the contrary, no term or condition of this Lease shall be construed or interpreted as
a waiver, express or implied, of any of the immunities, rights, benefits, protections or other
provisions of the Colorado Governmental Immunity Act, Section 24-10-101, et. seq., C.R.S., as
now or hereafter amended.
Recitals. The Recitals set forth in this Lease are hereby incorporated by
this reference and made a part of this Lease.
Captions. The captions or headings herein are for convenience only and
in no way define, limit or describe the scope or intent of any provisions or Sections of this Lease.
Trustee’s Disclaimer. It is expressly understood and agreed that (a)the
Lease is executed by Zions Bancorporation, National Association, solely in its capacity as
Trustee under the Indenture, and (b)nothing herein shall be construed as creating any liability on
Zions Bancorporation, National Association, other than in its capacity as Trustee under the
Indenture. All financial obligations of the Trustee under this Lease, except those resulting from
its willful misconduct or negligence, are limited to the Trust Estate.
Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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S-1
IN WITNESS WHEREOF, the parties have executed this Lease Purchase Agreement as
of the day and year first above written.
CITY OF ASPEN, COLORADO,
as Lessee
By:
Torre, Mayor
ZIONS BANCORPORATION, NATIONAL
ASSOCIATION, solely in its capacity of
Trustee under the Indenture, as Lessor
By:
Neil B. Witoff, Vice President
Zions Bank Division
(SEAL)
Attest:
By:
Nicole Henning, City Clerk
[Signature Page to the Lease]
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N-1
STATE OF COLORADO )
)
CITY OF ASPEN ) ss.
)
COUNTY OF PITKIN )
The foregoing instrument was acknowledged before me this _____ day of __________,
2020, by Torre and Nicole Henning, as Mayor and City Clerk, respectively, of the City of Aspen,
Colorado.
WITNESS my hand and official seal.
Notary Public
(SEAL)
* * * * * * * * * * * * * * * * * *
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this _____ day of __________,
2020, by Neil B. Witoff, as Vice President of Zions Bancorporation, National Association, as
Trustee.
Notary Public
(SEAL)
[Notary Page to the Lease]
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A-1
EXHIBIT A
DESCRIPTION OF LEASED PROPERTY
The Leased Property consists of the Site and the premises, buildings and improvements
located thereon (with the exceptions noted below) as set forth below, as amended from time to
time.
Site:Commercial Unit A, ISIS THEATER CONDOMINIUMS, according to the
Condominium Map thereof recorded December 9, 1999 in Plat Book 52 at Page 1 as
Reception No. 438434 and the First Amended Condominium Map recorded September
29, 2011 in Book 98 at Page 14 as Reception No. 583124 and the Second Amended
Condominium Map recorded September 11, 2014 in Plat Book 108 at Page 6 as
Reception No. 613396 and as defined and described by the Condominium Declaration for
Isis Theater Condominiums recorded December 9, 1999 as Reception No. 438433 and
First Amendment to the Condominium Declaration recorded September 29, 2011 as
Reception No. 583123.
406 E. Hopkins Avenue, Unit A, Aspen, CO 81611
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B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” as defined in Section 1.2 of this Lease and the following:
1)Liens for ad valorem taxes and special assessments not then delinquent, if
applicable.
2)The Site Lease.
3)This Lease.
4)All other encumbrances appearing of record on the date hereof as shown
on the title insurance policy delivered to the Trustee in connection with this Lease.
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C-1
EXHIBIT C
BASE RENTALS SCHEDULE(1)
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C-2
Base Rental payments are due on February 20 and August 20 of each year during the Lease
Term. The Base Rentals have been calculated on the basis of a 360-day year of twelve 30-
day months and any recalculation of Base Rentals under Section 6.2(b) hereof shall be done
on the same basis. If Base Rentals are stated to be due on any date that is not a Business
Day, such Base Rentals shall be due on the next day that is a Business Day without the
accrual of interest on Base Rentals between such dates.
Statement Regarding the Leased Property
The duration of the Lease, throughout the maximum Lease Term, does not exceed the
weighted average useful life of the Leased Property.
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D-1
EXHIBIT D
FORM OF NOTICE OF LEASE RENEWAL
To:Zions Bancorporation, National Association, as Trustee
Attention: Corporate Trust and Escrow Services
The undersigned is the City Representative of the City of Aspen, Colorado (the “City”).
The City is the lessee under that certain Lease Purchase Agreement, dated as of [closing date]
(the “Lease”), between the City and Zions Bancorporation, National Association, solely in its
capacity of Trustee under the Indenture, as the lessor thereunder. I am familiar with the facts
herein certified and am authorized and qualified to certify the same. The undersigned hereby
states and certifies:
(a)the City has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts
authorized and directed to be used to pay all the Base Rentals and (2) sufficient amounts
to pay such Additional Rentals as are estimated to become due, all as further provided in
Sections 6.2, 6.3 and 6.4 of the Lease, whereupon, the Lease shall be renewed for the
ensuing Fiscal Year;
Initial
or
(b)the City has determined not to renew the Lease for the ensuing Fiscal
Year.
Initial
CITY OF ASPEN, COLORADO
By:
City Representative
Date:
88
MEMORANDUM
TO:City Council
FROM:Pete Strecker, Finance Director
THROUGH:Sara Ott, City Manager
MEETING DATE:September 22, 2020
RE:Isis Theater Building Debt Refinancing
REQUEST OF COUNCIL:Staff is requesting Council approval of documents associated
with refinancing the Isis Theater building’s roughly $2 million debt obligation that remains
from the original issuance in 2007. By facilitating the refinancing of this debt, a net present
value savings of $447,088 can be achieved and will assist Aspen Film (the current tenant)
in its sublease obligations it has to the City.
SUMMARY AND BACKGROUND:Most recently discussed with Council at the August
11, 2020 work session, the City has been working on a refinancing of the outstanding
balance on debt issued in 2007. When the debt was first issued, the City was engaged
as a financing partner to help preserve the space as public benefit for tourists and locals
alike to enjoy. Debt was issued on the open market using certificates of participation
(COPs) and allowed for the value of the real estate to be used as collateral to secure the
debt. Following the Sept 1 annual principal payment, there is $1.96 million in debt
outstanding.
The ownership structure and leasing arrangements between parties for the Isis Theater
building is as follows:
The Aspen Public Facilities Authority acts as landlord of the building.
The City of Aspen leases the building from the Authority.
Aspen Film subleases the building from the City of Aspen.
Metropolitan Film entered into an operating lease for the theater with Aspen Film.
DISCUSSION:As one can likely imagine, the interest rate environment has changed
dramatically since 2007. With this change, there is a significant opportunity to refinance
the outstanding debt and achieve real savings. Currently, the remaining seventeen years
of debt service has interest charges of 5.66% and escalating to as high as 5.96% in the
last few years. The proposed new structure will have interest rates locked at 2.89% for
the first fifteen years, with the last two years having a variable rate (currently estimated
at 3.51%).
To achieve the refinancing, the ownership and lease structure will need to be modified.
Under the new proposal, the Aspen Public Facilities Authority will convey ownership to
the City of Aspen, and the City of Aspen will borrow funds from Vectra Bank in exchange
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for a leasehold by Vectra Bank, which will then lease back the property to the City in
exchange for the loan repayments – this will be effectively the same financing
arrangement that exists now (with a single certificate of participation) but with new
members.
The City will still then sublease the property to Aspen Film like it always has. Ultimately,
this will eliminate the need for the Aspen Public Facilities Authority and the ownership of
the building will reside with the City of Aspen.
FINANCIAL IMPACTS: The City still is the holder of the debt under this arrangement.
While this remains, ultimately Aspen Film will be the largest benefactor of this refinancing
as the sublease to this tenant is intended to pay off the remaining debt obligation. As
such, the $447,088 net present value savings will be passed on to Aspen Film, but it will
also be reflected in the City’s financials within the Debt Service Fund (250 Fund) through
a reduction in lease payments and expenditures over the course of the next seventeen
years (or sooner if Aspen Film is able to retire the debt on a more rapid schedule).
RECOMMENDATIONS:Staff recommends approval on second reading for the
authorizing ordinance #14, new site lease and lease purchase agreement to facilitate this
debt refinancing.
CITY MANAGER COMMENTS:
ATTACHMENTS:
(1)Ordinance
(2)Site Lease
(3)Lease
90
MEMORANDUM
TO: City Council
FROM: Pete Strecker, Finance Director
THROUGH: Sara Ott, City Manager
MEETING DATE: September 22, 2020
RE: 2nd Reading – 2020 Supplemental for APCHA & Component Unit Funds
Request of Council: Staff is requesting Council consideration of needed budgetary adjustments
to the Housing Administration Fund (APCHA operations), and APCHA Development Fund. In
total, the supplemental requests an increase of $3.3M from $4.5M to $7.8M. The majority of this
increase is related to two items: the acquisition of a single-family home at Burlingame ($1M true
spending authority increase plus $1M double count for transfers between funds) and the roll-
forward spending authority associated with the HomeTrek software solution for unit inventory,
compliance and communication.
In addition to the above, there are also lesser increases new requests that include (a) strategic
plan development and outreach; (b) funding for broadcasting board meetings; (c) carryforward
funds for IT networks and workstations; and (d) a technical increase for previously omitted
workers compensation premium costs and employee separation costs.
Original Budget Supplemental Revised Budget
Proj. Opening Balance $3,932,563 $1,566,331 $5,498,894
Original Revenues $3,897,800 $0 $3,897,800
Transfers $0 $1,000,000 $1,000,000
Revenues $3,897,800 $1,000,000 $4,897,800
Base $2,606,534 $0 $2,606,534
New Requests (Exh B) $110,000 $32,500 $142,500
Carry Forwards (Exh C) $0 $1,440 $1,440
Technical (Exh E) $0 $74,510 $74.510
COVID Reductions (Exh F) $0 ($20,350) ($20,350)
Operating Budget $2,716,534 $88,100 $2,804,634
Original $1,202,650 0 $1,202,650
Carry Forwards (Exh D) $0 $1,279,500 $1,279,500
Technical (Exh E) $0 $1,000,000 $1,000,000
Capital Outlay $1,202,650 $2,279,500 $3,482,150
Debt Service $535,210 $0 $535,210
Net Appropriations $4,454,394 $2,367,600 $6,821,994
Technical (Exh E) $0 $1,000,000 $1,000,000
Transfers $0 $1,000,000 $1,000,000
Total Appropriations $4,454,394 $3,367,600 $7,821,994
Proj. Ending Balance $3,375,969 ($801,269) $2,574,700
1 91
Recommendations: Staff recommends second reading approval of the revised spending
plan for 2020, allowing for the re-appropriation of one-time capital and operational project
budgets that lapsed at the end of 2019, approval of new requested funding, and to also
reduce spending in other areas to respond to a new economic environment.
City Manager Comments:
2 92
2020 APPROPRIATIONS BY FUNDExhibit AFund NameProjected Opening Balance2020 Adopted Revenue2020 Supplemental2020 Amended Revenue Budget2020 Adopted Expense2020 Supplemental2020 Amended Expense Budget2020 Ending BalanceTrust Fiduciary Funds620 ‐ Housing Administration Fund$2,090,595 $2,306,350 $1,000,000 $3,306,350 $2,470,584 $2,367,600 $4,838,184$558,761 622 ‐ Smuggler Housing Fund$409,531 $81,140$0 $81,140 $73,860$0 $73,860$416,811 632 ‐ APCHA Development Fund$1,738,232 $0$0$0$0 $1,000,000 $1,000,000$738,232 641 ‐ Truscott Phase II Fund$1,181,744 $1,084,150$0 $1,084,150 $1,542,640$0 $1,542,640$723,254 642 ‐ Aspen Country Inn Fund$78,792 $426,160 $0 $426,160 $367,310 $0 $367,310$137,642 Subtotal Trust and Agency Funds$5,498,894 $3,897,800 $1,000,000 $4,897,800 $4,454,394 $3,367,600 $7,821,994$2,574,700 RevenuesExpenses393
Revenue
Department/Description New Revenue Transfer
Purchase of Foreclosed Properties: This funding will be used for the potential purchase of property in the
Burlingame area. Funds are being transferred from the APCHA Housing Development Fund.
$0 $1,000,000
620 ‐ Housing Administration Fund $0 $1,000,000
Total Revenue / Transfers In:$0 $1,000,000
2020 SUPPLEMENTAL REVENUE DETAIL
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Exhibit B ‐ New Requests
Department/Description Operating Capital
Strategic Plan Development and Public Outreach ‐ Conduct strategic planning and guideline development
as required by the intergovernmental agreement between APCHA, the City, and Pitkin County.
$25,000 $0
APCHA Board Meeting Broadcasting: This will pay for the broadcast of APCHA board meetings on the web
via Grassroots TV.
$7,500 $0
620 ‐ Housing Administration Fund $32,500 $0
Total New Requests ‐ Operating / Capital:$32,500 $0
2020 SUPPLEMENTAL NEW REQUESTS
5 95
Exhibit C ‐ Operation Carry Forwards
2020 OPERATIONAL CARRY FORWARDS
Department/Description Amount
Aggregate Workstation Replacement Carry Forwards $1,440
620 ‐ Housing Administration Fund $1,440
Total Operational Carry Forward Requests:$1,440
6 96
Exhibit D ‐ Capital Carry Forwards
2020 CAPITAL CARRY FORWARDS
Project Title
Lifetime
Budget
2019 Carry
Forward
Completion
Estimate
50744 Housing Info Mgmt System and Efficiency Reforms Solutions $1,405,000 $1,273,700 Fall 2020
51096 Core City Network ‐ APCHA ‐ 2019 $5,800 $5,800 Fall 2020
620 ‐ Housing Administration Fund $1,279,500
Total Capital Carry Forward:$1,279,500
7 97
Exhibit E ‐ Technical Adjustments
2020 TECHNICAL ADJUSTMENTS
Department/Description Operating Capital Transfer
Purchase of Foreclosed Properties: This funding will be used for the potential purchase of property in the
Burlingame area. Funds are being transferred from the APCHA Housing Development Fund.
$0 $1,000,000 $0
Workers' Compensation was not loaded in the system when the 2020 Budget Resolution was calculated
for adoption. This action corrects this oversight.
$10,430 $0
Resignation Payout as included in City policies around accrued paid time off, extended sick leave banks
and separation agreements. One‐time.
$64,080
620 ‐ Housing Administration Fund $74,510 $1,000,000 $0
Purchase of Foreclosed Properties: This funding will be used for the potential purchase of property in the
Burlingame area. Funds are being transferred from the APCHA Housing Development Fund.
$0 $0 $1,000,000
632 ‐ APCHA Development Fund $0 $0 $1,000,000
Total Technical Adjustments ‐ Operating / Capital / Transfers:$74,510 $1,000,000 $1,000,000
8 98
Exhibit F ‐ COVID Expense Adjustments
2020 COVID EXPENSE ADJUSTMENTS
Fund Labor Other Operating Capital Transfers Total
620 ‐ Housing Administration Fund ($20,350)$0 $0 $0 ($20,350)
Total ($20,350)$0 $0 $0 ($20,350)
Total Labor + Other Operating:($20,350)
9 99
ORDINANCE No. 15
(Series of 2020)
AN ORDINANCE APPROPRIATING AN INCREASE IN THE
HOUSING ADMINISTRATION FUND OF $2,367,600;
APCHA DEVELOPMENT FUND OF $1,000,000.
WHEREAS, by virtue of Section 9.12 of the Home Rule Charter, the City Council may make
supplemental appropriations; and
WHEREAS, the City Manager has certified that the City has unappropriated current year revenues
and/or unappropriated prior year fund balance available for appropriations in the following
funds: Housing Administration Fund, and APCHA Development Fund.
WHEREAS, the City Council is advised that certain expenditures, revenue and transfers must be
approved.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO:
Section 1
Upon the City Manager’s certification that there are current year revenues and/or prior year fund
balances available for appropriation in the above-mentioned funds, the City Council hereby
makes supplemental appropriations as itemized in the Exhibit A.
Section 2
If any section, subdivision, sentence, clause, phrase, or portion of this ordinance is for any reason
invalid or unconstitutional by any court or competent jurisdiction, such portion shall be deemed
a separate, distinct and independent provision and such holding shall not affect the validity of
the remaining portion thereof.
INTRODUCED, READ, APPROVED AND ORDERED PUBLISHED AND/OR POSTED ON FIRST
READING on the 8
th of September 2020.
ATTEST:
________________________ ________________________
Nicole Henning, City Clerk Torre, Mayor
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A public hearing on the ordinance shall be held on the 22nd of September 2020, in the City
Council Chambers, City Hall, Aspen, Colorado.
FINALLY ADOPTED AFTER PUBLIC HEARING on the 22
nd of September 2020.
ATTEST:
________________________ ________________________
Nicole Henning, City Clerk Torre, Mayor
Approved as to Form:
________________________
Jim True, City Attorney
101
MEMORANDUM
TO:Mayor and City Council
FROM:Pete Rice, PE, Division Manager, Engineering Department
THROUGH:Scott Miller, Director, Public Works
MEMO DATE:September 14th, 2020
MEETING DATE:September 22nd, 2020
RE:Roadway for Restaurant and Retail Recovery
REQUEST OF COUNCIL: Staff seeks approval of Resolution 81-2020 by Council to grant
staff authority to extend the closure of the Roads for Restaurant and Retail Recovery (R4)
programs initiated by Resolutions 33-2020 and 52-2020 until November 1
st, 2020.
BACKGROUND: The COVID-19 pandemic has created an unprecedented economic
challenge for businesses within the city. The restaurant and retail industries in Aspen
have been hit especially hard due to the nature of Aspen as a resort town. As businesses
begin to reopen, they will be allowed to operate at a limited capacity to meet social
distancing requirements provided by Pitkin County Health Orders.
To help invigorate the economic recovery in Aspen, City Council passed Resolution 33-
2020 to allow businesses in the core to utilize space within the roadway for commerce.
This open-air space allows restaurants and retailers to conduct business and
simultaneously adhere to public health orders.
During the implementation process, the goals of this initiative were to:
Address COVID-19 impacts and provide relief to the community
Increase physical space to facilitate social interaction, community connection, and
commercial activity while adhering to Pitkin County Health Order gathering
guidelines
Implement a street plan that is safe for the public and reflective of the feedback
received from the community and business owners
Facilitate economic recovery efforts through a transparent process with
opportunity for participation.
The project has successfully incorporated all these goals into the resulting product, which
is currently implemented in the streets of the downtown core for participating businesses.
As of today, twenty-two businesses have activated spaces in front of their storefront for
restaurant seating or merchandise display. The City provided 50 planter boxes to create
the boundary and safely approved utilization of the right-of-way for each business.
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Per Resolution 33-2020, the planned end date of the activation areas is October 12th,
2020.
City Council approved Resolution 52-2020 on June 23
rd, 2020, which has allowed Staff
to “apply discretion with regards to application and enforcement” of regulations within the
Land Use Code pertaining to temporary signage, outdoor vending and merchandising,
lighting, and decking, tenting, canopy, and umbrella sections. This resolution is in effect
until October 12th, 2020.
DISCUSSION: Due to the success of the implementation of the R4 programs through
Resolutions 33-2020 and 52-2020, business owners have indicated they would like to
extend the continuation of authority beyond the approved October 12th date. To
accommodate this, Staff recommends extending the R4 programs through November 1
st
to allow businesses an additional three weeks of right-of-way utilization.
Staff will be presenting a new resolution at a later date that will ask for authority on similar
programs to be applied during the winter period.
FINANCIAL IMPACTS: The proposed extension does not require additional funding, but
will decrease parking revenue in a similar manner compared to this summer.
RECOMMENDATIONS:Staff recommends approving Resolution 81-2020 to grant
continuation of authority to extend Resolutions 33-2020 and 52-2020 through November
1st, 2020.
CITY MANAGER COMMENTS: ____________________________________________
______________________________________________________________________
______________________________________________________________________
ATTACHMENT A –Resolution # 081, Series 2020
ATTACHMENT B –6/1/2020 Council Work Session Memo
ATTACHMENT C –6/23/2020 Council Regular Meeting Memo
103
RESOLUTION # 81
(Series of 2020)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN
GRANTING CONTINUATION OF STAFF AUTHORITY TO EXTEND
RESOLUTIONS 33-2020 AND 52-2020 UNTIL NOVEMBER 1
st, 2020.
WHEREAS, City Council in Resolution # 033, Series of 2020, established
six outcome statements and related objectives for the City of Aspen COVID-19
relief efforts; and
WHEREAS, Outcome #4 as stated in Resolution # 033, Series of 2020,
provided the following direction to Council and City staff response efforts:
“Proactively and swiftly work to minimize further economic disruption and
actively encourage its recovery;” and
WHEREAS, City Council in Resolution #052. Series of 2020, gave direction
to staff regarding enforcement of regulation in the Land Use Code that may impact
economic recovery efforts, including, but not limited to the use of public right-of-
way for business activity
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF ASPEN, COLORADO,
That the City Council of the City of Aspen hereby approves the continued
authorization of staff authority of Resolutions # 033 and # 052, Series of 2020, past
the current sunset of October 12th, 2020 until November 1st, 2020.
INTRODUCED, READ AND ADOPTED by the City Council of the City of
Aspen on the 22
nd day of September 2020.
Torre, Mayor
I, Nicole Henning, duly appointed and acting City Clerk do certify that the
foregoing is a true and accurate copy of that resolution adopted by the City Council
of the City of Aspen, Colorado, at a meeting held September 22
nd, 2020.
Nicole Henning, City Clerk
104
MEMORANDUM
TO: Mayor and City Council
FROM: Pete Rice, P.E., Engineering Division Manager
Mike Tunte, Landscape Architect and Construction Manager
Ben Anderson, Planner
Mitch Osur, Parking Services Director
Carly McGowan, Project Manager I
Nancy Lesley, Director of Special Events
THROUGH: Trish Aragon, P.E. City Engineer
Scott Miller, Public Works Director
Austin Weiss, Parks and Open Space Director
MEMO DATE: May 29th, 2020
MEETING DATE: June 1st, 2020
RE: Roadway for Restaurant and Retail Recovery
REQUEST OF COUNCIL: Staff seeks direction from Council on the potential for
expanding commercial activity into the public right-of-way in the downtown core in order
to increase the number of customers served within health order guidelines and to create
more diverse offerings for businesses, residents, and visitors.
BACKGROUND: The COVID-19 pandemic has created an unprecedented economic
challenge for businesses within the city. The restaurant and retail industries in Aspen
have been hit especially hard due to the nature of Aspen as a resort town. As businesses
begin to reopen, they will be allowed to operate at a limited capacity to meet social
distancing requirements provided by Pitkin County Health Orders.
To help invigorate the economic recovery in Aspen, citizens have indicated the need to
utilize public space within the roadways for businesses within Aspen. Limits will be placed
on people and tables allowed within a building for the foreseeable future. Allowing
additional space within the roadway will create an activated area for restaurants or
retailers to place additional tables in a manner that meets social distancing requirements.
Initiative Goals:
• Address COVID-19 impacts and provide relief to the community
• Increase physical space to facilitate social interaction, community connection, and
commercial activity while adhering to Pitkin County Health Order gathering
guidelines
• Implement a street plan that is safe for the public and reflective of the feedback
received from the community and business owners.
105
• Facilitate economic recovery efforts through a transparent process with
opportunity for participation
PUBLIC OUTREACH: In considering the use of public right-of-way for commercial uses,
public outreach began immediately to assure the city is meeting community goal
objectives prior to developing full concepts. A survey was posted on Aspen Community
Voice on May 15th to obtain guidance from the community in using the public space on
roadways. The survey received 722 responses from the community and 2,047
participants visited the page for information. The Aspen Community Voice Survey results
are shown in Attachment A in full detail.
Key responses from the survey include the following:
• 90% of the respondents were somewhat comfortable visiting businesses with
outdoor space utilized compared to only 47% without any activation.
• 93% of the respondents support outdoor commerce as part of the COVID-19
response and recovery.
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• Participants are largely supportive of the activation in the public right of way.
• Varying ideas and technical details for each specific area that staff will need to
assess and refine.
• Clear definition on timeline for the pilot project.
• Equal opportunity for streets that were not indicated on the survey map.
• To-go/takeout food areas near the restaurant need to be addressed and is
important to maintain.
• Need for a balanced approach to parking closures.
• All business types should be included.
• Consideration should be given to temporarily ease open container restrictions.
The next phase of public and business outreach will begin after receiving direction from
Council on implementation. It is anticipated that staff will begin immediately discussing
details with interested businesses and implementing measures to help facilitate economic
needs. The process will continually be modified through the summer as staff receives
feedback and record observations.
Additional Operational Considerations:
• There are geographic constraints to what streets can be fully closed or offer
modified closures. We understand not every area of town will offer the same
opportunity due to safety and program administration.
• Emergency services vehicle access
• The City of Aspen will also evaluate plan with the Phase 3 Reopening of Pitkin
County Public Health Order.
DISCUSSION:
The process to implement immediate measures to provide stimulation for the businesses
is a plan that will continually adapt and modify as needed for the community.
Staff will discuss the options of utilizing a full roadway closure or a modification to the
street closure in detail. Staff is seeking direction on which options are preferred by
Council. This direction will allow staff to begin the process of implementation immediately
with each business.
There are three general approaches that are being considered by Staff for this work
session. The approaches are:
1. No Change to the Streetscape
2. Street Modification
3. Full Street Closure
A future evolution of a modified street approach will be described briefly. This would
include any additions of decks to provide ADA access to the roadway use, planters or
additional measures to help supplement the space. The street modification for the
purposes of this work session is one that can be quickly implemented to provide needed
space to the businesses.
107
The chart below describes the benefits and challenges associated with each approach.
The next step would begin the application process for the businesses by turning in the
form to the Clerks Office. Staff is prepared to begin working closely with each business
to create space in the manner preferred by Council. Staff will remain flexible and
adaptable for the first few weeks as adjustments may be needed to suit the needs of the
individual business. It’s anticipated that white jersey barriers and flexible measures will
be provided quickly to create activated space. Safety will be a top priority as staff will
continue to work with the businesses on measures that can be implemented within the
activation areas.
Staff will return to Council to discuss further steps to be taken that would include full
implementation measures that could include ADA accessibility, aesthetics, durability and
additional safety. This session will review the concepts placed for the activation areas
and discuss measures that need additional time and expenses to complete.
FINANCIAL IMPACTS: The proposed program is reflective of Council’s direction in
Resolution 33-2020 to provide options for the City to assist small business during the
current economic crisis.
Immediate closure of street for one block $4,000
Immediate Street Modification for one block $24,000
Future evolution of activated areas that may
include 4 decks, planters, striping or similar
additions to improve the roadway for business
extensions.
RECOMMENDATIONS: Staff is seeking direction on which is the preferred method of
extending use of the right of way commercial uses by Council to aid in economic recovery.
$125,500
108
CITY MANAGER COMMENTS: ____________________________________________
______________________________________________________________________
______________________________________________________________________
109
MEMORANDUM
TO:Mayor Torre and Aspen City Council
FROM:Ben Anderson, Principal Long-Range Planner
Community Development
THROUGH:Phillip Supino, Community Development Director
MEMO DATE:June 17, 2020
MEETING DATE:June 23, 2020
RE:Resolution # 052, Series of 2020
REQUEST OF COUNCIL:Community Development staff requests City Council consider
Resolution # 052, Series of 2020. This resolution, as recommended, would provide staff
with Council direction in the application and enforcement of Land Use Code regulations
that intersect with several of the strategies being used in the economic recovery efforts
related to the COVID-19 public health crisis.
SUMMARY AND BACKGROUND: As businesses and organizations re-open and
respond to Colorado and Pitkin County public health orders, social distancing
requirements are difficult to comply with if limited to existing indoor and outdoor spaces.
The City is working to provide additional space in the right-of-way and flexibility in
regulations to encourage and support our businesses and organizations in their re-
opening.
While the Community Development Department fully supports these efforts, the Land Use
Code (LUC) contains multiple provisions that if strictly applied and enforced, will impede
these efforts and add costs to our businesses and organizations. Under normal
circumstances, these regulations protect important community values around aesthetics,
disruptive temporary uses, and how commerce happens in our downtown. The passage
of Resolution # 033, Series 2020 provided clear policy direction regarding Council’s desire
to modify enforcement of certain City regulations of business activities.
The proposed Resolution # 052 is a response to that direction. The resolution would
provide Community Development staff with direction with regards to the application and
enforcement of applicable LUC provisions for a temporary period through October 12,
2020. This date corresponds with the proposed duration of the opening of the public right-
of-way for use by downtown businesses. The proposed resolution will support Council’s
policy direction memorialized in Resolution # 033, Series 2020.
DISCUSSION: This Resolution is a response to a recognition by Community
Development staff that the essential efforts toward economic recovery intersect with
115110
Staff Memo – Resolution # 052
Page 2 of 2
multiple provisions in the Land Use Code. Staff applauds the creative solutions being
implemented in response to COVID-19 and identified how these efforts may conflict with
long-established regulations in our commercial zones. It does not seem appropriate to
simply ignore established regulations. Staff seeks Council direction to consider the larger
context of our current crisis and work towards reasonable, pragmatic solutions with
respect to the short-term enforcement of certain Land Use Code provisions.
Here are the primary areas of regulation that would be included in this direction:
Temporary signage and sandwich boards
Outdoor vending and merchandising
Lighting
Temporary Uses, including Growth Management requirements for uses that go
beyond 14 days
Commercial Design Review requirements related to temporary structures,
materials, and use of Pedestrian Amenity areas
Multiple sections of the Land Use Code related to decking, tenting, canopies,
umbrellas, and similar structures. Discretion on this topic would apply to these
types of uses on both public right-of-way and commercial and organizational
uses on private property.
The proposed resolution will provide Community Development staff the direction from
Council needed to work with individual businesses and property owners to develop
creative solutions to their business needs. While staff believes flexibility is the operating
idea in this situation, one thing will not be compromised. As always, public health, safety
and welfare is the priority. No required reviews or inspections related to work that would
initiate a building or tent permit will be waived.
FINANCIAL IMPACTS: Temporary Use of tent structures beyond 14 days typically
requires Council review and affordable housing mitigation. Staff is proposing that
between now and October 12th, tents (both in the right-of-way and on private property)
are exempt from any required AH mitigation (and review by Council). For Council’s
information, the mitigation for these tents required by code is relatively minimal and was
implemented along with the review process as a disincentive for the use of tents rather
than as an important source of mitigation revenue.
ENVIRONMENTAL IMPACTS: N/A
ALTERNATIVES:Council may choose not to approve Resolution # 052, Series 2020, in
which case, staff will continue to enforce relevant provisions of the Land Use Code in the
context of increased outdoor businesses activity. This may impact the implementation of
Council’s COVID response goals outlined in Resolution # 052, Series 2020.
RECOMMENDATIONS:Staff recommends approval of Resolution # 052, Series of 2020.
CITY MANAGER COMMENTS:
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