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Home My WebLink About1996-178E \WPDOCS\ORD\CHA[BER3 LSE ORDINANCE NO AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE THE THIRD ADDENDUM TO THE LEASE BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE, PROVIDING FOR A SUBROGATION OF MORTGAGEE CLAUSE, AND PROVIDING AN EFFECTIVE DATE WHEREAS, on the 21st day of August, 1973, the City of Denton, Texas and the Denton Chamber of Commerce entered into a lease for a term of twenty-five years, beginning the 1st day of September, 1973 and ending on the 31st day of August, 1998 on the following described property, to wit lying and being situated in the City of Denton, County of Denton, State of Texas, being Lot 15, Block 431 of the City of Denton, Texas (approximately 25,000 square feet) the same being land owned by the City situated on the north-east corner of Parkway and Carroll Boulevard ("Base Lease"), and WHEREAS, on the 16th day of March, 1976, the City and the Chamber entered into that certain addendum to lease extending the term of the Base Lease for a period of twenty-five years to end on the 31st day of August, 2023, and WHEREAS, on the 2nd day of April, 1996, the City and the Chamber entered into that second addendum to lease extending the term of the base lease for a period of an additional twenty-five years, to extend the lease through the 31st day of August, 2048, and WHEREAS, the Chamber is desirous of making ma3or improvements to the leased premises as described above in an amount of approxi- mately $400,000, and the City has received a request from the Chamber to include a subrogation of mortgagee clause in the lease, which is necessary in the event that the Chamber needs to borrow money from a mortgagee to complete its improvement pro3ect, and WHEREAS, the City considers that the inclusion of a subroga- tion of mortgage clause in the lease is essential to support the activities of the Chamber to promote economic development and tourism within the city and that these activities constitute a part of the Chamber's program under TEX LOC GOV'T CODE §380 001 to promote economic development and to stimulate business and com- mercial activity and constitute a public purpose, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Mayor, or in his absence, the Mayor Pro Tem, is hereby authorized to execute the Third Addendum to Lease between the City of Denton and the Denton Chamber of Commerce, a true, complete, and correct copy of which is attached hereto and made a part hereof for all purposes SECTION II That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the day of , 1996 JACK VILLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY M AFTER RECORDING RETURN TO HERB PROUTY, CITY ATTY 215 E MCKINNEY DENTON, TEXAS 76201 STATE OF TEXAS COUNTY OF DENTON 97-1168R § KNOW ALL MEN BY THESE PRESENCE § THIRD ADDENDUM TO LEASE 0192!)V This Third Addendum to that certain Agreement of Lease made the 21st day of August, 1973 by and between the City of Denton, Texas, known herein as "Lessor" and the Denton Chamber of Commerce, known herein as "Lessee", as amended, hereinafter referred to as "base lease" RECITALS WHEREAS, on the 21st day of August, 1973, Lessee and Lessor entered into a lease for a term of twenty-five years, beginning the 1st day of September, 1973 and ending on the 31st day of August, 1998 on the following described property, to wit lying and being situated in the City of Denton, County of Denton, State of Texas, being Lot 15, Block 431 of the City of Denton, Texas (approximately 25,000 square feet) the same being land owned by the Lessor situ- ated on the north east corner of Parkway and Carroll Boulevard, and WHEREAS, on the 16th day of March, 1976, Lessor and Lessee entered into that certain addendum to lease extending the term of the base lease for a period of twenty-five years to end on the 31st day of August, 2023, and WHEREAS, on the 2nd day of April, 1996, Lessor and Lessee entered into that second addendum to lease extending the term of the base lease for a period of an additional twenty-five years, to extend the lease through the 31st day of August, 2048, and WHEREAS, the Lessee is desirous of making major improvements to the building on the leased premises as described above in an amount of approximately $400,000, and Lessor has received a request from Lessee to include a subrogation of mortgagee clause in the lease, which is necessary in the event that Lessee needs to borrow money from a mortgagee to complete its improvement project, and WHEREAS, the Lessor considers the inclusion of a subrogation of mortgage clause in the lease is essential to the activities of Lessee to promote economic development and tourism within the City and to its improvement program, and that these activities consti- tute a part of the Lessor's program under TEX LOC GOV'T CODE §380 001 to promote economic development and to stimulate business and commercial activity and constitute a public purpose, NOW, THEREFORE, The Lessor and Lessee hereby agree to addend the base lease in accordance with the following terms and conditions 1 That Section IV of the base lease is hereby amended to read as follows SECTION IV A At the expiration of the term of this lease, Lessor will acquire full ownership of the building and improvements, free and clear of any indebtedness or obligations, subject only to subsection B hereof Within ten days of the expiration of the lease, Lessee will vacate the leased premises and will transfer and convey the building, improvements, and premises to Lessor B Any person, corporation, or institution that lends money to Lessee for construction of any structure, building, or improvement and retains a security interest in said structure, building, or improvement shall, upon default of Lessee's obligations to said mortgagee, have the right to enter upon that portion of the leased pre- mises upon which said fixture is located and operate or manage the structure, building, or improvement according to the provisions of the agreement, for a period not to exceed the term of the mortgage with Lessee, or until the loan is paid in full, whichever comes first, but in no event longer than the term of this lease Mortgagee shall not be obligated to operate any business upon the leased premises during its tenancy of the leased premis- es, and mortgagee shall not conduct any business upon the leased premises which is not related to the promotion of economic development and tourism within the city or an activity to promote and stimulate business and commercial activity within the City of Denton, Texas or any other purpose related to the activities of a Chamber of Com- merce If, during mortgagee's occupation of the leased premises, mortgagee finds a suitable substitute tenant to operate a business related to the economic development and tourism activities described above on such portion of the leased premises, it may, with Lessor's written con- sent, assign such portion of the lease to such assignee Lessor agrees that it will not unreasonably withhold or delay its approval of such assignment It is expressly understood and agreed that the rights of the mortgagee referred to herein are limited and restricted to those improvements constructed with funds borrowed from mortgagee, that mortgagee shall have no right to exer- cise, possess, or assign any options or rights of refusal not exercised by Lessee prior to default, and that mortgagee shall have no right to use, possess, occupy, or assign any lease tracts upon which no mortgage -financed fixtures are located In the event that the mortgagee and the Lessee provide written notice of the name and address of the mortgagee hereunder to the Lessor, through its City Manager, in the event of any default by Lessee of the terms and obligations of this lease, the Lessor shall give written notice to the mortgagee of such default by the Lessee If, within thirty days of the date of said notice, mortgagee remedies any such default and in writing agrees to assume all of the obligations of Page 2 Lessee under said lease, mortgagee shall have the right to occupy, operate, and assign the leased premises as set forth herein 3 That save and except as amended hereby, all the sections, sentences, paragraphs, terms and conditions of the original base lease, as amended, shall remain in full force and effect IN TESTIMONY HEREOF, the a duly authorized repres ative of th parties bove have hereunto executed same on the N day of 1 1996 CITY OF DENTON, TEXAS BY ` JACK MIh Fj , MAYOR ATTEST,% (� JENNIFER WALTERS, CITY SECRETARY W-1 AV TO LEGAL FORM L PROUTY, CITY ATTORNEY BY �ZJ E \WPDOCS\K\CHAMER3 LSE DENTONER OF COMMERCE BY CHARLES W CARPENTER, RESIDENT Page 3 r � +10 r r �u 11i'Ir' ,? C� Ir11)l Olt' L�,U( JNT v rrxns { s` riled for ker ord In DENTQtI r"0II111Y, 1X N01,40kAt t r TTM H0DGr 6/( r1t11JTY rtrINK On Mar PG 097 At 3^T1nm Doc,/Num 91 R00193% Doc/fyp(� I I rl Recordinry: `I 00 Doc/Mgmt G.00 Rol el It It WA7 Dop'ty 14RANDrc