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HomeMy WebLinkAboutagenda.council.worksession.20160607 CITY COUNCIL WORK SESSION June 07, 2016 4:00 PM, City Council Chambers MEETING AGENDA I. Board Interviews II. Power House Lease Discussion P1 P2 I. P3 I. P4 I. P5 I. P6 I. P7 I. P8 I. P9 I. P10 I. P11 I. P12 I. P13 I. P14 I. P15 I. P16 I. P17 I. P18 I. P19 I. P20 I. P21 I. P22 I. P23 I. P24 I. P25 I. P26 I. P27 I. P28 I. P29 I. P30 I. MEMORANDUM TO: MAYOR and COUNCIL MEMBERS FROM: JAMES R. TRUE DATE: June 3, 2016 RE: June 7, 2016 Work Session Regarding Old Powerhouse Proposed Lease ══════════════════════════════════════════════════════════════════ BACKGROUND: On March 10, 2015, City Council offered to the Aspen Power Plant (APP) the opportunity to enter into negotiations with the City for the lease of the property known as the Old Power House, the former location of the Aspen Art Museum. Discussions with staff and Council and APP have been ongoing. A draft lease was presented to APP by City staff as a basis for the discussions. Although several modifications to the original draft have been passed between the parties, no final decisions regarding the terms of the lease have been made. A work session has been scheduled for June 7, 2016, the purpose of which is to open the discussions of the project to the public. DISCUSSION: As noted above, a draft of a proposed lease was submitted to APP and has gone through some iterations, terms of which have been discussed with Council. On June 1, 2016, APP sent a new redlined version of a lease draft. A copy of this latest lease version and the email cover from APP’s attorney are attached to this memo. Although this proposal from APP addresses many of the issues raised by neighbors and Council, including limitations on the use of “hard liquor” and restrictions on events that would conflict with Theatre Aspen, it also contains provisions that have not been previously presented to or otherwise discussed by Council. For instance, this proposal contemplates a complete restructure of the leasing entity with a provision that the lease is subject to the receipt of a determination letter from the IRS granting the applicant IRC 501(c) tax exempt status. These and all other issues related to the lease will be discussed at the work session. Staff will request that a special meeting be noticed in the event that Council feels it is appropriate to adjourn to an executive session. Staff would not propose that APP representatives or any third parties be invited into such executive session. P31 II. From: Chris Bryan [mailto:cbryan@garfieldhecht.com] Sent: Wednesday, June 1, 2016 12:05 PM To: Jim True <jim.true@cityofaspen.com> Subject: Aspen Power Plant -- redline lease Jim, Regarding the Old Powerhouse located at 590 North Mill Street, attached is the redline of the proposed Lease Agreement between the City of Aspen and the Aspen Power Plant, Inc. (APP), a Colorado nonprofit corporation. Even though the defined term “nonprofit organization” is not used anywhere in Section 26.710.250’s provisions concerning Public zone districts, to avoid any disputes concerning compliance with zoning regulations, the APP nevertheless has begun the process of applying for a favorable determination letter from the IRS to satisfy the “nonprofit organization” definition set forth in Section 26.104.100 of the City of Aspen Land Use Code. This obviates any perceived need to rezone the property or for City Council to accept any staff recommendation for a PD overlay regarding non- conforming uses of the property. As you will see in the attached redline, the APP has modified its proposed programming to address the concerns of the handful of neighbors who have voiced opposition to the project. These include the following: • The abolition of parking in the existing parking lot will encourage pedestrian access and bicycling, as well as public transit; these No Parking restrictions will solve surrounding homeowners’ concerns about traffic. • Towing and/or booting of cars unauthorizedly parked along South Spring Street, North Mill Street, and Gibson Avenue will be strictly enforced. • The food-and-beverage operation and any outdoor special events will end by 10 p.m. • No hard alcohol will be on the menu at the food-and-beverage operation; beer, wine, and non- alcoholic beverages will be served. The APP’s food-and-beverage operation will comply with all local and state alcohol regulations and obtain necessary permits and licenses. • No outdoor amplified music will be allowed at the premises. Noise will be monitored in accordance with municipal regulations. • The facilities will be closed no more than 28 days per calendar year (excluding state and federal holidays), and no longer than 2 consecutive weeks at a time. The Generator space will be accessible by authorized users 24 hours a day, 365 per year, by a keycard for secured entry and exit. • Access to the riverfront and adjacent park areas for enjoyment and picnicking and other uses will remain open to the public. • No on-site manufacturing or brewing of beer will occur on the Premises. • No outdoor special events will occur 30 minutes before, or during, or 30 minutes after a scheduled live performance by Theatre Aspen. • Outdoor special events will be capped to 28 “event days” per year, no more than 18 of which will occur between June 1 and August 31 of each calendar year. The number of outdoor special event days may include up to 4 mandated by the City. P32 II. The APP organizers believe these restrictions and policies will allow the project to move forward and for a lease to be finalized and executed. Please let me know if you have any questions. Thanks, CHRIS Christopher D. Bryan Shareholder GARFIELD & HECHT, P.C. Please note our new address: 625 East Hyman Avenue, Suite 201 Aspen, Colorado 81611 Telephone: (970) 925-1936 Facsimile: (970) 925-3008 E-mail: cbryan@garfieldhecht.com Website: www.garfieldhecht.com P33 II. LEASE AGREEMENT THIS LEASE AGREEMENT is made and executed on ___ day of ______, 2016, by and between the CITY OF ASPEN, Colorado, a home rule municipal corporation (hereinafter referred to as the “City” or “Lessor”), and ASPEN POWER PLANT, INC. a Colorado nonprofit corporation (hereinafter referred to as the “Power Plant” or “Lessee”). W I T N E S S E T H: WHEREAS, the Power Plant desires to renovate and lease property known as the Old Power House Building, 590 North Mill Street, Aspen, Colorado. The property subject to this lease is more particularly described in Exhibit A, attached hereto (the “Premises” or “Property”); and, WHEREAS, the City is willing to allow the Power Plant to renovate and lease said space under certain terms and conditions; and, WHEREAS, the parties hereto desire to execute a Lease Agreement which sets forth the agreement of the parties hereto in this regard; and, WHEREAS, the City and the Power Plant are authorized to enter into this Lease Agreement for the purposes set forth herein. NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions contained herein, the parties agree as follows: 1. Duration. The initial term of this Lease Agreement shall be for a period of ten (10) years, effective October 1, 2016, and terminating on September 30, 2026. Subject to Lessee’s satisfactory adherence to all of the terms and conditions herein, Lessee shall have the option at the end of the initial term to renew for an additional Lease term of five (5) years. Thereafter, also subject to Lessee’s satisfactory adherence to all of the terms and conditions herein, Lessee shall have two (2) additional options to renew for five (5) additional years each. (The total term of this Lease shall not exceed twenty-five (25) years; an initial term of ten (10) years and three (3) optional renewal terms of five (5) years each.) The Lease terms described herein are subject to the Events of Default provisions set forth herein. The renewal terms shall be renewed automatically unless Lessee provides written notice, six (6) months prior to the end of the term that it does not intend to renew its option. At the conclusion of the final option term, Lessee shall have the right to request that the Lessor negotiate in good faith an extension of the lease for an additional period of time. Lessor hereby agrees to negotiate in good faith such an extension. 2. Premises. The Premises subject to this Lease Agreement shall be as shown on Exhibit A appended hereto and by this reference made a part hereof as if fully set forth here. 3. Use. The Premises may be used by Lessee solely for the following uses P34 II. 2 · The Generator - Collaborative Work Space with accessory uses of a television studio and media lab, a food-and-beverage operator, event space, and common area. As a condition to this Lease Agreement, Lessee shall seek to obtain a favorable determination letter from the Internal Revenue Service regarding its tax exempt status. The parties agree that in the event Lessee receives notification from the IRS that it does not qualify for tax exempt status, then either party may terminate this Lease Agreement and neither party shall be found to be in default due to such termination. The uses permitted on the Leased Premises shall comply in all respects with any and all conditions required by the City in any approvals that may be granted to the Lesseeby the Aspen City Council pursuant to the Aspen Municipal Code. In addition, Lessee commits to provide all services contemplated herein and represented in its proposals at prices deemed to be reasonable and affordable. Lessee shall not use the Premises for any other purposes without the City’s written consent. Lessee’s use and occupancy of the above-described Premises shall comply with the rules, regulations and ordinances of any governmental authority having jurisdiction over the Premises or the activities performed thereon. Additionally, Lessee shall not use the Premises in any manner that will create an increase in the rate of insurance or a cancellation of any insurance policy, even if such use may be in furtherance of Lessee’s operations, without first obtaining the City’s authorization. In the event that Lessee proposes to use the Premises in a manner that would increase the City 's insurance premiums, the City and Lessee agree to discuss such plans to determine if there is a way to minimize the costs to the City and still permit the proposed activity to take place. Lessee shall not keep, use or sell anything prohibited by any policy of fire insurance covering the Premises. 4. Rent. Lessee agrees to pay a total of $________ per year to the City as rent for the Premises, payable in twelve (12) monthly installments on the fifth day of each month. Rent is calculated based on a rent of $15.00/sq. foot for the first floor and $10.00 per year for the second floor. 5. Days and Hours of Operation: The Generator shall remain open and accessible by keycard entry twenty-four (24) hours a day, three-hundred sixty-five (365) days per year. The television studio and media lab shall maintain hours and days of operation that the operators deem reasonable. Any food and beverage operator shall have the following obligations and limitations: Beer and wine and non-alcoholic beverages may be served; no hard liquor may be served (except at special events). No on-site manufacturing or brewing of beer shall be permitted P35 II. 3 at the Premises. Except as otherwise set forth below for Special Events, hours of operation shall be from 7:00 am until 10:00 pm. The food and beverage operation shall be open to the public no less than ten (10) hours each day, and no fewer than six (6) days per week, excluding holidays. Seasonal closures shall not exceed four (4) weeks per year, but no more than two (2) consecutive weeks per year. 6. Noise Restrictions. Prior to the commencement of the lease, the City and Lessee shall undertake a noise monitoring program to determine maximum conditions to ensure compliance with the City’s noise ordinance, as amended from time to time. The noise monitoring program shall verify compliance with the noise ordinance, by Lessee, before opening and shall assure that both daily operations and any allow special events comply with the noise ordinance. In addition, Lessee shall continue monitoring throughout the tenancy given background noise levels may vary. The noise monitoring program shall be filed with the City of Aspen Environmental Health Department, who may require it to be updated as needed. It is understood that at no point shall the operation or any activity on the premises violate the City’s noise ordinance. In addition to these restrictions, Lessee agrees there shall be no amplified music outside of the building. 7. Parking. Parking on the premises shall be limited to ADA compliant parking and parking or standing of delivery and service vehicles. The number of such parking spaces shall be as designated by the City’s parking department prior to the commencement of the lease. Parking will not be allowed on North Spring Street or on Gibson Avenue. The City will take such steps that are necessary to assure compliance with the parking restrictions. If the Lessee has a special event on the property pursuant to Section 8, below, or otherwise closes the property for a private event, the Lessee or the party holding the event may provide a shuttle service from the City’s parking garage. Lessee shall engage a towing company or auto-boot operator to enforce “no parking” restrictions along Gibson Avenue, South Spring Street, and North Mill Street. 8. Special Events. There shall be allowed during any calendar year of the tenancy a total of twenty-eight (28) “event days” for Special Events, no more than eighteen (18) of which may occur between June 1 and August 31 of each calendar year. More than one Special Event may occur on one “event day.” Special Events are events that are conducted in whole or in part outside of the building on the premises and that render the property, or a part thereof, closed to the public. Such events shall include but not be limited to small community gatherings, outdoor stage productions, weddings, charity fundraisers, and private parties. Any amplification of any communication during a special event shall be through the use of equipment owned by the Lessor and rented to Lessee or owned by the Lessee and approved by the City. Under no circumstance shall any outside entity be allowed to use amplified music or any amplified communication equipment not approved by the City. . Special Events shall be limited to the hours of noon until 10:00 pm, but may not occur during scheduled live performances at Theatre Aspen. In addition, outdoor Special Events must conclude at least 30 minutes before a scheduled live performance at Theatre Aspen begins and may not start until P36 II. 4 at least 30 minutes after a scheduled live performance at Theatre Aspen ends. . Up to four (4) Special Events per year may be those mandated by Lessor as City-sponsored or –supported events. 9. Food and Wine Festival. The Lessee shall provide space on the lawn of the premises for an event sponsored by Food and Wine, if the organizers of Food and Wine request such space. If this space is provided pursuant to this section, it shall not be counted in any limitation for Special Events or closings or any other restrictions set forth herein. 10. Construction. The Building will be brought up to the current applicable City building code(s). This includes but is not limited to: Water: provide an adequate water service for the use of the building. Sewer: provide an adequate sanitary service for the use of the building. Gas: Existing gas service should be adequate for the proposed use. Electrical: Existing electrical vault on the northwest end of the building should be adequate for the proposed use. HVAC: A new heating and air conditioning system as needed. Fire Suppression: A Fire suppression system adequate for the use of the building. Other: necessary repair or replacement of the roof, windows, walls, concrete floor, second floor ramp, etc. are all the responsibility of the City. Any ADA compliance is also the responsibility of the cCity. The City’s contribution to this construction will be limited to $1,350,000 – all funding necessary to accomplish the necessary building improvements beyond that amount will be the responsibility of the lessor. In addition, the Power Plant is responsible for the finishing the building for their proposed uses. This includes any and all fixtures and equipment specific to The Generator and its permitted accessory uses. 11. Taxes, Other Governmental Charges and Utility Charges. a. . In the event that the use, possession, construction or equipping of the Premises is found to be subject to taxation in any form, the Lessee shall pay same as they respectively come due; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during any individual term of the Lease. b. Lessee may at its expense and in good faith contest any taxes, assessments, and other charges and, in the event of any such contest, may permit the taxes, assessments, or other charges so contested to remain unpaid during the period of such contest and an appeal therefrom unless P37 II. 5 the City shall notify the Lessee that, in the opinion of the City Attorney, by nonpayment of any such items the title will be materially endangered or the Premises or any portion thereof will be subject to loss or forfeiture, or the City will be subject to liability, in which event 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. 12. Alterations. In addition to any modifications set forth in Paragraph 10, above, any alterations to the premises shall be subject to the following conditions and requirements: a. Lessee may at its own expense make reasonable and necessary alterations or improvements to the Premises. All alterations, additions and improvements shall be performed in a workmanlike manner, in accordance with all applicable building and safety codes, and shall not weaken or impair the structural integrity of the building or lessen the value of the premises. Lessee shall give Lessor written notice no less than thirty (30) days in advance of the commencement of any construction, alteration, addition, improvement, or repair estimated to cost in excess of One Thousand Dollars ($1,000.00), except in cases of emergency repairs. b. Lessee agrees that prior to any construction or installation of alterations, additions or improvements, Lessee shall post in a conspicuous place within the Premises a notice of non-liability for mechanic’s lien as specified at Section 38-22-105, C.R.S. on behalf of the Lessor and shall notify Lessor of such posting and the exact location of the same. A copy of the required notice shall be delivered from Lessor at Lessee’s request. Perfection of a mechanic’s lien against the Premises as a result of Lessee’s acts or omissions may be treated by Lessor as a material breach of this Lease. 13. Liens. a. Lessee shall keep all of the Premises and every part thereof and all buildings and other improvements at any time located thereon free and clear of any and all mechanics’, materialmen’s and other liens for or arising out of or in connection with work or labor done, services performed, or materials or appliances used or furnished for or in connection with any operations of Lessee, any alteration, improvement, or repair or addition which Lessee may make or permit or cause to be made, or any work or construction, by, for, or permitted by Lessee on or about the premises, or any obligations of any kind incurred by Lessee, and at all times promptly and fully to pay and discharge any and all claims on which any such lien may or could be based, and to indemnify Lessor and all of the premises and all buildings and improvements thereon against all such liens and claims of liens and suits or other proceedings pertaining thereto. b. If Lessee desires to contest any such lien, it shall notify Lessor of its intention to do so within ninety (90) days after the filing of such lien. In such case, and provided that Lessee shall on demand protect Lessor by a good and sufficient surety bond, or such other security that is P38 II. 6 deemed adequate by the City, against any such lien and any cost, liability, or damage arising out of such contest, Lessee shall not be in default hereunder until thirty (30) days after the final determination of the validity thereof, within which time Lessee shall satisfy and discharge such lien to the extent held valid; but the satisfaction and discharge of any such lien shall not, in any case, be delayed until execution is had on any judgment rendered thereon, and such delay shall be a default of Lessee hereunder. In the event of any such contest, Lessee shall protect and indemnify Lessor against all loss, expense, and damage resulting there from. 14. Maintenance. Lessee shall, throughout the term of this Lease, at its own cost, and without any expense to Lessor, keep and maintain the Premises, and all appurtenances thereto, in good sanitary, and neat order, condition and repair. Lessor shall not be obligated to make any repairs, replacements, or renewals of any kind, nature or description whatsoever to the Premises or improvements therein. The obligations for maintenance by Lessee shall include the obligation to keep the lawn in good condition, watering and mowing on a regular basis and the obligation to perform snow removal on the trail, accesses to the building and the parking lot, except that the City shall be solely responsible for maintaining any public thoroughfares or easement areas at its expense. 15. Access to Premises. Upon at least twenty-four (24) hours prior notice, except in cases of emergency, Lessee shall permit Lessor or its agents and employees to enter the Premises at all reasonable hours to inspect the Premises or make repairs that Lessee may neglect or refuse to make in accordance with the provisions of this Lease Agreement. Before entering the Premises to make repairs, Lessor shall give Lessee notice and a reasonable period of time to make necessary repairs. 16. Indemnification of Lessor. Lessor shall not be liable for any loss, injury, death, or damage to persons or property which at any time may be suffered or sustained by Lessee or by any person whosoever may at any time be using or occupying or visiting the Premises or be in, on, or about the same, whether such loss, injury, death, or damage shall be caused by or in any way result from or arise out of any act, omission, or negligence of Lessee or of any occupant, visitor, or user of any portion of the Premises, or shall result from or be caused by any other matter or thing whether of the same kind as or of a different kind than the matters or thing above set forth, and Lessee shall indemnify Lessor against all claims, liability, loss, or damage whatsoever on account of any such loss, injury, death, or damage. Lessee hereby waives all claims against Lessor for damages to the Premises and improvements that are now or hereafter placed or built on the Premises and to the property of Lessee in, on, or about the Premises, and for injuries to persons or property in or about the Premises, from any cause arising at any time. The last two preceding sentences shall not apply to loss, injury, death, or damage arising by reason of the negligence or misconduct of Lessor, its agents, or employees, subject to those terms, conditions and limitations as contained in the Colorado Governmental Immunity Act, Section 24-10-101, et seq. 17. Provisions Regarding Insurance. a. At its own expense Lessee shall carry and maintain casualty and property damage insurance sufficient to protect the full replacement value of the interior of the Premises and Lessee’s personal property located therein. P39 II. 7 b. At its own expense Lessee shall carry and maintain workers’ compensation insurance, if required by law, and comprehensive general public liability insurance against all direct or contingent loss or liability for property damage, personal injury or death occasioned by reasons of the operation, control or construction upon the Premises, in such amounts as set forth, naming the City as additional or co-insureds. Lessee shall maintain said coverage in full force and effect at all times during the term of this Lease. In the case of any claims-made policy, the necessary retroactive dates and extended reporting periods shall be procured to maintain such continuous coverage. (i) Workers’ Compensation insurance, if required by law, to cover obligations imposed by applicable laws for any employee engaged in the performance of work under this contract, and Employers' Liability insurance with minimum limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) for each accident, FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) disease - policy limit, and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) disease - each employee. Evidence of qualified self-insured status may be substituted for the Workers' Compensation requirements of this paragraph. (ii) General Liability insurance with minimum combined single limits of ONE MILLION DOLLARS ($1,000,000.00) each occurrence and TWO MILLION DOLLARS ($2,000,000.00) aggregate. The policy shall be applicable to all premises and operations. The policy shall include coverage for bodily injury, broad form property damage (including completed operations), personal injury (including coverage for contractual and employee acts), blanket contractual, independent contractors, products, and completed operations. The policy shall contain a severability of interests provision. The insurance obtained by the Lessee shall stand as primary insurance for the Property and be procured from a company authorized to do business in the State of Colorado and be satisfactory to the City. All policies as required herein shall contain a waiver of subrogation by the insurer against City. If, absent negligence or fault on the part of the Lessee, the Property shall be damaged by fire or other catastrophe so as to render said premises wholly unoccupiable, and if such damage is so great that a competent licensed architect in good standing in Pitkin County, Colorado, as selected by the City within thirty (30) days from the date of loss, shall certify in writing to the City and the Lessee that the Property, with reasonable diligence, cannot be made fit for occupancy within ninety (90) days from the happening of the occurrence of the damage, then this agreement may terminate and City may re-enter the Property and take possession. The Lessee shall subordinate its rights and interests in any insurance proceeds as provided for in any insurance policy as required by this agreement. If, however, the damage is not such as to prevent reoccupation and use of the Property within ninety (90) days, then repairs thereto shall be undertaken by City with all reasonable speed to restore the Property to its former condition and the agreement shall remain in effect. P40 II. 8 The Lessee shall name City as co-insured or additional insured on all insurance policies and such policies shall include a provision that written notice of any non-renewal, cancellation or material change in a policy by the insurer shall be delivered to City thirty (30) days in advance of the effective date. The parties hereto understand and agree that City is relying on, and does not waive or intend to waive by any provision of this contract, the monetary limitations (presently $350,000.00 per person and $990,000 per occurrence) or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, Section 24-10-101 et seq., C.R.S., as from time to time amended, or otherwise available to City, its officers, or its employees. c. Lessee shall furnish the Lessor with a copy of all required insurance policies or certificates evidencing such required coverage. To the extent available, all insurance policies maintained pursuant to this Lease Agreement shall contain the following endorsement: It is hereby understood and agreed that this insurance policy may not be canceled by the surety until thirty (30) days after receipt by the City of Aspen, by registered mail, of a written notice of such intention to cancel or not to renew. e. In the event full insurance coverage required by this Lease is not maintained as provided for herein, Lessor may, but shall be under no obligation to, purchase the required policies of insurance and pay the premiums necessary and provide for payment thereof and all amounts so advanced therefore by Lessor, if any, shall be added to rent due from Lessee. 18. Damage or Destruction. If prior to the termination of this Lease the Premises or any portion thereof are destroyed, in whole or in part, or are damaged by fire or other casualty, the parties shall cause the Net Proceeds of any insurance claim to be applied to the prompt repair, restoration, modification, replacement or improvement of the Premises. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to the Lessee. If Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvements, referred to hereinabove, Lessee shall complete the work and pay any cost in excess of the amount of the Net Proceeds, in which case Lessee shall not be entitled to any reimbursement therefore from Lessor. Notwithstanding the foregoing, the parties may agree to other application of such Net Proceeds. 19. Condemnation. If during the term of this Lease, or any renewal of it, the whole or part of the Premises or such portion as will make the Premises unusable for the purpose leased, or the leasehold interest, be condemned by public authority, including the City, for public use, then the Lease term granted herein shall cease as of the date of the vesting of title in the premises in such condemning authority, or when possession is given to such authority, whichever event occurs first. Upon such occurrence, Lessee shall not be entitled to any part of the condemnation proceeds, if any, for the value of the unexpired term of this Lease or for any other estate or interest in the Premises, such amount belonging entirely to the Lessor. P41 II. 9 20. Abandonment of Premises. Lessee shall not vacate or abandon the Premises at any time during the term hereof; if Lessee shall abandon or surrender the Premises, or be dispossessed by process of law, or otherwise, any personal property belonging to Lessee and left on the Premises shall be deemed to be abandoned, at the option of Lessor, except such property as may be encumbered to Lessor. 21. Events of Default Defined. The following shall be “Events of Default” under this Lease and the terms “Event of Default” and “Default” shall mean, whenever they are used in this Lease, any one or more of the following events: a. Failure by the Lessee to pay any rent or other payment required to be paid herein at the time specified; or, b. Failure to use the Premises for the periods set forth in paragraph __, above; provided, however, that time spent for the purpose of maintenance, remodeling, or repairs to the Premises and/or for events beyond the control of the Lessee shall not be counted; or, c. Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, unless the Lessor agree in writing to an extension of time or waiver prior to its expiration; or, d. Lessee’s interest in this Lease or any part hereof is assigned or transferred without the written consent of the Lessor, except as provided herein, either voluntarily or by operation of law or otherwise; or, e. A proceeding under the United States Bankruptcy Code or any federal or state bankruptcy, insolvency, or similar law or any law providing for the appointment of a receiver, liquidator, trustee or similar official for the Lessee or of all or substantially all of its assets, is instituted without its consent and is not permanently stayed or dismissed within sixty (60) days, or if the Lessee offers to the Lessee’s creditors to effect an extension of time to pay the Lessee’s debts or asks, seeks or prays for a reorganization or to effect a plan of reorganization, or for readjustment of the Lessee’s debts, or if the Lessee shall make a general or any assignment for the benefit of the Lessee’s creditors; a. Lessee abandons or vacates any part of the Premises; or b. Lessee fails to commence the Renovation within two years of the date of this Lease Agreement or fails to complete the Renovation no less than twelve (12) months thereafter commencement of construction. 22. Remedies on Default. In the event of a Default remains uncorrected for a period of ten (10) days after Landlord has given written notice thereof pursuant to applicable law, then Landlord may, at Landlord’s option, undertake any of the following remedies without limitation: (a) declare the Term of the Lease ended; (b) terminate Lessee’s right to possession of the Premises and reenter and repossess the Premises pursuant to applicable provisions of the P42 II. 10 Colorado Forcible Entry and Unlawful Detainer statute; (c) recover all present and future damages, costs, and other relief to which Landlord is entitled; (d) pursue Landlord’s lien remedies; (e) pursue breach of contract remedies; and (f) pursue any and all available remedies in law or equity. In the event possession is terminated by reason of a Default prior to expiration of the Term, Lessee shall remain responsible for the Rent, subject to Landlord’s duty to mitigate such damages. 23. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity. No delay or omission hereunder 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. 24. Non-Discrimination. The parties hereto agree to comply with all laws, ordinances, rules and regulations that may pertain or apply to the Premises and its use. In performing under this Lease, Lessee shall not discriminate against any worker, employee or job applicant, or any member of the public, because of race, color, creed, religion, ancestry, national origin, sex, age, marital status, physical handicap, affectional or sexual orientation, family responsibility or political affiliation, nor otherwise commit an unfair employment practice. 25. Attorneys’ Fees. If any action at law or in equity shall be brought to recover any rent under this Lease, or for or on account of any breach of, or to enforce or interpret any of the covenants, terms, or conditions of this Lease, or for the recovery of the possession of the Premises, the prevailing party shall be entitled to recover from the other party as part of the prevailing party’s costs reasonable attorneys’ fee, the amount of which shall be fixed by the court and shall be made a part of any judgment or decree rendered. 26. Notices. All notices to be given with respect to this Lease shall be in writing. Each notice shall be personally delivered by hand or shall be sent by an overnight courier, to the party to be notified at the address set forth herein or at such other address as either party may from time to time designate in writing: If to the Power Plant: 304 East Hopkins Avenue c/o Duncan Clauss Aspen, Colorado 81611 With a copy to: Christopher D. Bryan, Esq. Garfield & Hecht, P.C. P43 II. 11 625 East Hyman Avenue, Suite 201 Aspen, Colorado 81611 If to City: City of Aspen, Colorado 130 South Galena Street Aspen, Colorado 81611 Attention: City Manager With a copy to: City of Aspen, Colorado 130 S. Galena Street Aspen, Colorado 81611 Attention: City Attorney Every notice shall be deemed to have been given at the time it is hand-delivered or one (1) day following the day it was deposited with the overnight courier. 27. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Lessor and the Lessee and their respective successors and assigns. 28. Severability. In the event any 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. 29. Amendments. The terms of this Lease shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the City and the Lessee. 30. Execution in Counterparts. This Lease shall be executed in three counterparts, each of which shall constitute but one and the same instrument. 31. Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State of Colorado. 32. Captions. The captions or headings in this Lease are for convenience of reference only and in no way define, limit or describe the scope or intent of any provision or sections of this Lease. 33. Waiver. The waiver by Lessor of, or failure of Lessor to take action with respect to any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition, or subsequent breach of the same, or any other term, covenant, or condition therein contained. The subsequent acceptance of rent by Lessor or the acknowledgement by Lessor of Lessee’s exercise of an option to renew the term of the Lease as provided herein shall not be deemed to be a waiver of any preceding breach by Lessee of any P44 II. 12 term, covenant, or condition of this Lease, regardless of Lessor’s knowledge of such preceding breach. 34. Entire Agreement. This Lease constitutes the entire agreement between the City and the Power Plant. No waiver, consent, modification or change of terms of this Lease shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein regarding this Lease or the Premises leased hereunder. 35. Further Assurances. The parties agree to execute and deliver such additional documents and agreements as necessary to carry out the intent of this Lease. 36. No Third Party Beneficiaries. This Lease is not intended to create any right in or for the public, or any member of the public, including any subcontractor, supplier or any other third party, or to authorize anyone not a party to this Lease to maintain a suit to enforce or take advantage of its terms. The duties, obligations and responsibilities of the parties to this Lease with respect to third parties shall remain as imposed by law. IN WITNESS WHEREOF, the City has executed this Lease in its name with its seal hereunder affixed and attested by its duly authorized officers, and the Power Plant has caused this Lease Agreement to be executed in its name and attested by its duly authorized officer. All of the above occurred as of the date first written above. CITY OF ASPEN, COLORADO By: ___________________________________ Steve Skadron, Mayor ATTEST: ________________________________ Linda Manning, City Clerk ASPEN POWER PLANT By: _________________________________ Title: ___ _____ WITNESS: _______________________________ P45 II. 13 P46 II.