1996-178E \WPDOCS\ORD\CMAMBER3 5SE
ORDINANCE NO _q'&-r'¢L
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE THE THIRD ADDENDUMTO
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 anto a lease for
a term of twenty-fave years, beglnnang the 1st day of September,
1973 and endang on the 31st day of August, 1998 on the following
described property, to wit lyang and beang situated an the City
of Denton, County of Denton, State of Texas, being Lot 15, Block
431 of the Caty of Denton, Texas (approxamately 25,000 square feet)
the same beang land owned by the Caty smtuated on the north-east
corner of Parkway and Carroll Boulevard ("Base Lease"), and
WHEREAS, on the 16th day of March, 1976, the Cmty and the
Chamber entered into that certaan addendum to lease extendmng the
term of the Base Lease for a peraod of twenty-fare years to end on
the 31st day of August, 2023, and
WHEREAS, on the 2nd day of Aprml, 1996, the City and the
Chamber entered anto that second addendum to lease extendang the
term of the base lease for a peraod of an addataonal twenty-fmve
years, to extend the lease through the 31st day of August, 2048,
and
WHEREAS, the Chamber ms desarous of makang ma]or amprovements
to the leased premases as descrmbed above in an amount of approxm-
mately $400,000, and the Caty has receaved a request from the
Chamber to include a subrogataon of mortgagee clause an the lease,
whach as necessary in the event that the Chamber needs to borrow
money from a mortgagee to complete ars mmprovement project, and
WHEREAS, the City consaders that the anclusaon of a subroga-
taon of mortgage clause an the lease is essentaal to support the
actavat~es of the Chamber to promote econommc development and
tourism within the caty and that these actavltaes constitute a part
of the Chamber's program under TEX LOC GOV'T CODE §380 001 to
promote economac development and to stimulate busaness and com-
mercial actavity and constatute a publac purpose, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor, or in has absence, the Mayor Pro
Tem, as hereby authormzed to execute the Thard Addendum to Lease
between the Caty of Denton and the Denton Chamber of Commerce, a
true, complete, and correct copy of which as attached hereto and
made a part hereof for all purposes
SECTION II That this ordinance shall become effective
Immediately upon ~ts passage and approval
PASSED AND APPROVED thls the~ day of~~_~__, 1996
JAC~
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AFTER RECORDING RETURN TO 97-1168R
HERB PROUTY, CITY ATTY
215 E MCKINNEY
DENTON, TEXAS 76201
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENCE
COUNTY OF DENTON §
THIRD TO LEAS O19 ' G
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-f~ve 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 ma]or 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 ~s 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
i That Section IV of the base lease ~s 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 sa~d mortgagee, have
the right to enter upon that portion of the leased pre-
mlses upon which said fixture ~s located and operate or
manage the structure, building, or improvement according
to the provisions of the agreement, for a per~od not to
exceed the term of the mortgage w~th 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 port~on 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 ~s expressly
understood and agreed that the r~ghts of the mortgagee
referred to herein are limited and restricted to those
improvements constructed w~th funds borrowed from
mortgagee, that mortgagee shall have no right to exer-
cise, possess, or assign any options or r~ghts 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-f~nanced
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 authorlzed repres~n~_~tlve of
th~~bove,have~~ 1996hereunto executed same on the ~- day of
CITY OF DENTON, TEXAS
JACK
A~TEST~
JENNIFER WALTERS,~I~Y SECRETARY
A D A TO LEGAL FORM
H~%R~ERT L PROUTY, CITY ATTORNEY
DENTON CHAMBER OF COMMERCE
CHARLES W CARPENTER, ~RESIDENT
Page 3
DEN;OH ¢OUH1Y, ;×
HONORAB~ TIM HODG~S/IOUNTY
At ~om
~)oc/Num 9/ R0019396
Doc/fyp~ I I f/
Doc/Mqmt 6.00
[<~ elpt Il 9607
Deputy I~RAND [C