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20-930ORDINANCE NO.20-930 AN ORDINANCE OF THE CITY OF DENTON, APPROVING AND AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO SIGN A SECOND AMENDMENT TO MEDICAL OFFICE BUILDING LEASE BY AND BETWEEN COLUMBIA MEDICAL CENTER OF DENTON SUBSIDIARY, L.P. AND THE CITY OF DENTON FOR THE CONTINUED USE AND OCCUPANCY OF PREMISES AT 3535A- 1 SOUTH 1-35E DENTON, TEXAS BY THE CITY OF DENTON FIRE DEPARTMENT; AUTHORIZING THE CITY MANAGER TO SIGN A LETTER AGREEMENT RELATED TO THE SAME PROPERTY FOR A TWO MONTH RENT ABATEMENT AND TWO MONTH LEASE EXTENSION; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") has previously entered into a three (3) year Medical Office Building Lease and First Amendment to Medical Office Building Lease agreement (collectively, the “Lease”) with Columbia Medical Center of Denton Subsidiary, L.P. ("Columbia"), to lease space at 3535 A-1 South 1- 35E, Denton, Texas 76210 (the "Medical Center") for the use and occupancy of space to house the City’s Fire Department until the construction of Fire Station 8 is completed; and WHEREAS, in order to continue to use and occupy the premises until the construction of Fire Station 8 is complete, the City desires a Second Amendment to Medical Office Building Lease (“Second Amendment”) to renew the existing Lease for one year, with two renewal options; and WHEREAS, Columbia has offered the City a two (2) month rent abatement in exchange for a two (2) month extension to the Second Amendment (“Abatement”); and WHEREAS, the City Council deems it is in the public interest to enter into a Second Amendment to Medical Office Building Lease for the Fire Department and to accept the proffered abatement of rent for a two (2) month lease extension; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference. SECTION 2. The Second Amendment and Abatement are hereby approved. The City Manager, or his designee, is hereby authorized to execute the Second Amendment and Abatement, both attached hereto and incorporated herein by reference, and to carry out the duties and responsibilities of the City under the Second Amendment and Abatement. SECTION 3. The City Manager, or his designee, is authorized to expend such funds and perform such obligations as required in the Amendment and Abatement. SECTION 4. The City Manager, or his designee, is hereby further authorized to amend the Lease to extend the term of the Lease up to six (6) months beyond the term of the Second Amendment, as extended by the Abatement, in exchange for further rent abatement or deferment and is authorized to execute such further amendment(s) to the Lease and expend such funds and perform such obligations as required to accomplish such further amendment(s). SECTION 5. This ordinance shall become effective immediately upon its passage and approval. The motion }AIn this ordinance was made by U -O#/Vf /ayN A/ and the ordinance was passed and approved by theseconded by following vote Aye Nay Abstain Absent Mayor Chris Watts: Gerard Hudspeth, District 1 : Keely G. Briggs, District 2: Jesse Davis. District 3 : John Ryan, District 4: Deb Armintor, At Large Place 5 : Paul Meltzer, At Large Place 6: y/ 32 ,/ V‘ / r‘ r‘ PASSED AND APPROVEDthis the M day of 2020 U 'S. MAYORCHRIS W. ATTEST: ROSA RIOS, CITY SECRETARY All 1111111 a APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: DowSign Envelope ID: 5194529/b547 C)447/b9D2G42E36B670887 Standard Form Amendment 03/2019 Education Building, 3535 A South 1.35E, Suite 3535 A. 1 Denton, Texas 76210 SECOND AMENDMENT TO MEDICAL OFFICE BUILDING LEASE THIS SECOND AMENDMEIVr TO MEDICAL OFFICE BUILDING LEASE (this “Amendment”) is made as of April 28, 2020 (the “Date of this Amendment”), by and between Columbia Medical Center of Denton Subsidiary, L.P. (“Landlord”) and City of Denton, A Home Rule Municipal Corporation (“Tenant”), under the following circumstances Landlord and Tenant have entered into that certain Medical Office Building Lease, dated as of November 8, 2016 (such lease as it may have been amended is hereinafter referred to as the “Lease”), whereby Landlord has leased to Tenant premises consisting of approximately 1.431 rentable square feet and known as Suite 3535A- 1 (the “Premises“) on the first fIst) floor of the building located at 3535 A South 1-35E, Denton. Texas 76210 (the “Building”); and Landlord and Tenant desire to enter into this Amendment in order to modify certain terms of the Lease NOW THEREFORE, in consideration of the premises and the agreements and covenants contained herein, Landlord and Tenant agree that the Lease is amended and modified as follows A. Amendments 1 Term. The initial Term of the Lease is hereby extended for an additional period (the “Extended Term”) commencing on the “Extended Term Commencement Date” (as defined below) and expiring at 11:59 p.m. on the “Extended Term Expiration Date” (as defined below). “Extended Term Commencement Date” shall mean the later of May 1. 2CW or the date of execution of this Amendment by Landlord as set forth in Landlord’s signature block. “Extended Term Expiration Date” shall mean the later of April 30, 20Z or the last day of the Extended Term Lease Year. “Extended Term Lease Year” shall mean the period beginning on the Extended Term Commencement Date and ending on the first anniversary of the last day of the calendar month in which the Extended Term Commencement Date occurs (unless the Extended Term Commencement Date is the first day of a calendar month, in which event such first Extended Term Lease Year shall end on the day prior to the first anniversary of the Extended Term Commencement Date) and each twelve (12) month period thereafter during the Term of this Lease. 2 Base Rent. (a) Beginning on the Extended Term Commencement Date, the amount of Base Rent payable in accordance with Section 2 of the Lease shall be as provided, subject to adjustment as provided herein Annual Base Rent Rate $14.70/r.s.f. Annual Base Rent Monthly Rent Installment $21,035.70 $1,752.98 (b) Base Rent is not subject to adjustment during the Extended Term 3 If the Lease is in a One Year Extension Term at the time of the commencement of the Extended Term, then such One Year Extension Term shall terminate upon the commencement of the Extended Term, 4 The Lease is hereby amended by replacing Section a with the following Section a thereto: 23. Option to Terminate. So long as Tenant is not in default under the terms of this Lease, then subject to the terms of this Section, if Tenant relocates its fire department to a new fire station on the Hospital campus (the “New Building”) Tenant may terminate this Lease at any time during the Term of the Lease by giving Landlord not less than W days prior written notice of termination, Furthermore, subject to the terms of this Section, if Tenant relocates its fire department to the New Building, Landlord may terminate this Lease at any time by giving Tenant not less than W days prior written notice of termination. Landlord’s receipt of a copy of the certificate of occupancy for the New Building shall be a condition precedent to the termination of this Lease under this Section. If such notice of termination and the delivery of the certi6cate of occupancy for the New Building each shall be duly given, then this Lease shall terminate upon the later of the following (the “Termination Date”): (i) the date of termination set forth in such notice, (ii) the W 2020-0002502 DocuSign Envelope ID: 5194529Ap547b447A-9D2&42E36B670887 Educadon Building, 3535 A South 1.35E, Suite 3535 A-1 Denton, Texas 76210 day after the date Landlord receives such notice of termination, or (iii) such other date as may be agreed upon in writing by Landlord and Tenant. Tenant shall surrender the Premises to Landlord in accordance with the provisions of Section 16.1(a) of this Lease on or before the Termination Date. Notwithstanding anything to the contrary set forth herein, (x) no exercise of the foregoing termination option shall extend the term of this Lease and (y) if following the Termination Date, Tenant has not vacated and surrendered the Premises in accordance with Section 16.1(a) of this Lease. then this Lease shall not terminate, but instead shall continue as an Unauthorized Holdover subject to Section 16.1(b). The parties agree that in the event this Lease is terminated pursuant to this Section, they shall not enter into a new lease or agreement for the lease or occupancy of the Premises by Tenant at any time prior to one year after the Commencement Date. Upon termination as provided above, both parties shall be released of all obligations and liabilities arising under this Lease following the effective date of termination; provided that the parties shall remain liable under the provisions of the preceding sentence and for all obligations under this Lease that have accrued prior to such termination or are otherwise intended to survive tennination of this Lease. 5 The Lease is amended to add the following Section a thereto SECTION 24. OPTION TO RENEW a. 1. Options to Renew Term, Tenant shall have two G) options to extend the Term of this Lease by one a) year each (each such optional extended term is hereinafter called an “Extended Term”). Each Extended Term shall be on and subject to the same terms, covenants and conditions as herein contained except as otherwise set forth in this Section B. This option shall be exercised only by written notice from Tenant to Landlord and given no less than ninety (90) days prior to the expiration of the initial Term or the then expiring Extended Term, as the case may be. Notwithstanding anything to the contrary set forth herein, the term of this Lease shall not be extended for an Extended Term if Tenant is in default under the terms of this Lease at the time of the exercise of the option for such Extended Term or at the expiration of the term in which the option to extend is exercised. a2. Rent During Extended Term. Annual Base Rent per square foot for an Extended Term shall be an amount equal to “Fair Market Base Rental Rate”. As used herein the term “Fair Market Base Rental Rate” shall be the fair market annual rental of the Premises determined by Landlord based on a survey of annual rental rates being charged in the market area which encompasses the Building, for space comparable to the Premises, taking into account the quality and age of the Building; the floor level, quality of tenant improvements provided and other relevant factors and assuming lease terms which allocate responsibility, charges and expenses for taxes, insurance and other costs of operating, maintaining and repairing the Building and the Premises in the same manner as this Lease. The current Base Rent Rate being charged by Landlord for other leases of space in the Building may be considered by Landlord in determirring the Fair Market Rental Rate, The Fair Market Rental Rate shall be subject to such periodic annual adjustments as determined by Landlord to be consistent with fair market annual rental rates in the market area. As promptly as possible after Tenant exercises its option for the Extended Term, Landlord shall notify Tenant in writing of its determination of the Fair Market Base Rental Rate and the new proposed Base Rent for the Extended Term and the provisions for future periodic adjustments to Base Rent during the Extended Term. Within forty-five (45) days after Tenant’s receipt of Landlord’s notice and proposal, Tenant may withdraw its exercise of the option for the Extended Term, in which event this option shall be canceled and of no further force and effect. If Tenant does not withdraw its exercise of the option by the end of such forty-five (45) day period, then the new Base Rent and the provisions for periodic adjustments to Base Rent during the Extended Term shall be in accordance with the terms of Landlord’s proposal as set forth in its notice to Tenant or, if applicable, any subsequent modified proposal approved in writing by both Landlord and Tenant, B. 1 Miscellaneous Except as amended by this Amendment, the Lease is not otherwise amended, and the Lease is hereby rati6ed and confirmed and remains in full force and effect, as amended hereby. In the event of a conflict between the terms of this Amendment and the terms of the Lease, the terms of this Amendment shall control. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. Defined terms used in this Amendment not defined herein shall have the meaning set forth in the Lease 2020-0002502 2 DocuSign Envelope ID: 5194529A-547b447A-9D2642E36B670887 Education Building, 3535 A South 1'35E, Suite 3535 A- 1 Denton, Texas 76210 iN WITNESS WHEREOF, the parties have duly executed this Amendment as of the day and year first above written ATTEST ROSA RIOS, CITY SECRETARY TENANr City of Denton, A Home Rule Municipal Corporation –.„: L\\tilt III// APRROVBb AS TO LEGAL FORM: AARON'tEAL, crrY ATTORNEY Name: Todd Hileman _Title: City Manager Date,5/5 /goA a THIS AGREE)wENT HAS BEEN BOTH REVIEWED AND APPROVED AS TO Financial and operational obligations and Business terms Caphab9q}elO2©al EstateDate: ' ‘ WITNESS As to Landlord: LANDLORD Columbia Medical Center of Denton Subsidiary, L.P. By: Columbia North Texas Subsidiary GP, LLC Its: General Partner By : (Witness Signature) (Signature) Name: Nicholas L. Paul (Witness Printed Name)Title: Vice President (Witness Signature) Date Witness Printed Name) 2020-0002502 LEASE AMENDMENT LETTER AGREENWNT (“Amendment”) April 17, 2020 City of Denton Texas, A Home Rule Municipal Corporation 332 E. Hickory Denton, TX 76201 Re :Medical Office Building Lease or Medical Office License Agreement (as applicable) dated November 8, 2016 between Columbia Medical Center of Denton Subsidiary, L.P, as Landlord, and City of Denton Texas, A Home Rule Municipal Corporation, as Tenant, for Premises known as Suite 3535 A-1 in the building located at 3535 A South 1-35E, Denton, Texas 76210 (including any amendments, the “Lease”) Dear City of Denton Texas, A Home Rule Municipal Corporation: Thank you for being such a valued tenant. You have informed us that you wish to receive a Rent Deferrnent Period (defined below) from the Landlord during which certain portions of rent payable under your Lease would not be payable by you under the Lease. By signing this Amendment below, each of the Landlord and Tenant make the agreements, amendments and representations set forth in this Amendment. The Landlord and Tenant agree that the Lease is hereby deemed amended to provide for and include all of the following: 1 Rent Deferment Period. Effective as of the date this Amendment has been fUlly executed by the Landlord and the Tenant, Tenant’s obligations under the Lease to pay Rent (as defined below) shall be abated for a two-month period of either (a) April 2020 and May 2020 or (b) May 2020 and June 2020 (such 2-month period being called the “Rent Deferment Period”). “Rent” as used in this Amendment shall mean the following if and to the extent the following are defined in and payable under the Lease: Base Rent, Tenant’s Proportionate Share of Operating Costs, Tenant’s Proportionate Share of Excess Operating Costs, Tenant’s Proportionate Share of Excess TIU Costs, Tenant’s Proportionate Share of Excess Real Estate Taxes, License Fee, Storage Space Fee and FF&E Rent; provided, however, that Rent as used in this Amendment shall not include the following obligations and the following obligations are not forgiven, deferred, abated, or waived hereby: (a) any taxes that Tenant is required by the Lease to pay directly to the taxing authority; (b) any premium for any insurance policy that Tenant is required to obtain under the Lease; (c) any utilities that Tenant is required by the Lease to: (1) pay directly to the utility carrier or provider, or (2) reimburse to Landlord in full (rather than as a proportionate share), and (d) any other sum payable by Tenant under the Lease that is not expressly included above in the definition of Rent. Tenant shall indicate its election of the months constituting the Rent Deferment Period as either (a) or (b) by checking the applicable box near its signature to this Amendment. If no box is checked, the parties agree that the Rent Deferment Period shall be (b) May 2020 and June 2020. 2.Extended Term; Extended Term Base Rent. In consideration for the Rent Deferment Period, the Term of the Lease is hereby extended for an additional period of two (2) months (such additional two months being called the “Extended Months”). The Extended Months will be on and subject to the same terms, covenants, and conditions as if the Extended Months were originally part of the current Term of the Lease, and the monthly Base Rent or License Fee, as the case may be, payable during the Extended Months shall equal the Base Rent or License Fee payable for the month immediately preceding the commencement of the Extended Months. 3.Effect of Amendments. You agree to timely perform and continue to perform all terms and obligations under your Lease as amended hereby, including without limitation the obligation to make all payments under your Lease other than Rent during the Rent Deferment Period. Except as amended by this Amendment, the Lease is not otherwise amended, and the Lease is hereby ratified and confirmed and remains in full force and effect, as amended hereby. Any oral statements regarding the subject matter of this Amendment are merged herein. Neither the Lease nor this Amendment may be modified or amended except in writing signed by Landlord and Tenant. 4.Counterparts and Electronic Signatures. This Amendment and any other or future amendments may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by facsimile or by email in portable document format and signatures electronically signed in accordance with the Uniform Electronic Transaction Act, as adopted in the state in which the Premises are located, and with the United States ESIGN Act, shall have the same effect as the delivery of original signatures and shall be binding upon and enforceable against the parties hereto as if such facsimile were an original executed counterpart. 5 Waiver. Neither the rent abatement described in this Amendment, nor any waiver by Landlord of any breach or default of any term, agreement, covenant, or condition of the Lease, as amended hereby, shall be deemed to be a waiver of any other term, agreement, covenant, or condition hereof or of any subsequent breach by Tenant of the same or any other term, agreement, covenant, or condition. Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to render unnecessary the obtaining of Landlord’s consent to or approval of any subsequent act of Tenant, whether or not similar to the act so consented to or approved. No act or thing done by Landlord or Landlord’s agents during the Term of the Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such a surrender shall be valid unless in writing and signed by Landlord. The subsequent acceptance of Rent shall not be deemed a waiver of any preceding breach by Tenant of any agreement, covenant or obligation of Tenant or any other term or condition of the Lease. No delay in billing or any failure to bill Tenant for any Rent, nor any inaccurate billing of Rent shall constitute a waiver by Landlord of its right to collect and to enforce Tenant’s obligation to pay the full amount of Rent due and payable under the Lease, as amended by this Amendment, and as the same may be adjusted or increased from time- to-time 6.Regulatory Matters. Landlord and Tenant enter into this Amendment with the intent of conducting their relationship and implementing the agreements contained in the Lease (as amended hereby) in full compliance with applicable federal, state and local law, including without limitation, the Medicare/Medicaid Anti-Kickback statute (the “Anti-Kickback Law”) and Section 1877 of the Social Security Act (the “Stark Law”), as amended and/or waived, including without limitation by the Centers for Medicare & Medicaid Services’ COVID-19 Stark blanket waivers. Notwithstanding any unanticipated effect of any of the provisions of the Lease, as amended, neither party will intentionally conduct itself under the terms of the Lease or this Amendment in a manner that would constitute a violation of the Anti-Kickback Law or the Stark Law. Without limiting the generality of the foregoing, Landlord and Tenant expressly agree that nothing contained in the Lease or this Amendment shall require either party to refer any patients to the other, or to any affiliate or subsidiary of the other. If any legislation, regulation or government policy is passed or adopted, the effect of which would cause either party to be in violation of such laws due to the existence of any provision of the Lease or this Amendment, then Landlord and Tenant agree to negotiate in good faith for a period of ninety (90) days to modify the terms of the Lease, as amended hereby, to comply with applicable law. Should the parties hereto fail to agree upon modified terms to this Lease within this time, then either Landlord or Tenant may immediately terminate the Lease by giving written notice to the other party. Sincerely, t>;abc VL wba £4£ZL Diane McAlister, Property Manager On behalf of Columbia Medical Center of Denton Subsidiary, LP AGREED TO BY: Landlord: Columbia Medical Center of Denton Subsidiary, LP By: Name: Nicholas L. Paul Title: Vice President Date : Tenant :b\\\tt 11111/ ome Rule Municipal Co oration Name: Todd Hilernan :i: 1 : : C i 1!][ ][%; IEpIpIIIa Z2 Tenant elects its Rent Deferment Period by marking the applicable box below: a April 2020 and May 2020 B May 2020 and June 2020 The undersigned Guarantor(s) join in the execution of this Amendment to consent to such amendment and hereby agree that its (their) Guaranty of the Lease shall also apply fully to all obligations of Tenant under the Lease as amended by this Amendment and any future amendments or modifications without need for further consent by Guarantor. Guarantor : No Guaranty Under Current Lease DoCuSQn Envelope ID: 79C9D2DD-1 17F-+69B-943E-73449FA72564 THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED as to financial and operational obligations and business terms. ATTEST: ROSA RIOS, CITY SECRETARY DeAnna cody PRINTED NAME Deputy D1 rector TITLE Caplta1 Projects-Rea1 Estate DEPARTMENT APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY „/W-