2006-283
S:\Our Documcnts\Ordinances\06\GDAC.doc
ORDINANCE NO. 2006- 2 &3
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN EXTENSION OF A
LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND THE GREATER
DENTON ARTS COUNCIL, INC. FOR LEASING AND RENOVATION OF CERTAIN REAL
PROPERTY OWNED BY THE CITY OF DENTON; PROVIDING FOR THE EXPENDITURE
OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Denton hereby finds that the lease agreement
between the City and the Greater Denton Arts Council, Inc. ("GDAC"), attached hereto and
made a part hereof by reference (the "Agreement") serve a municipal and public purpose and is
in the public interest; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The findings set forth in the preamble of this Ordinance are incorporated
by reference into the body of this Ordinance as iffully set forth herein.
SECTION 2. The City Manager, or his designee, is hereby authorized to execute the
Agreement and to exercise all rights and carry out the duties and responsibilities of the City of
Denton under the Agreement, including the expenditure of funds as provided in the Agreement.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the 2.0 ft; day of &/O!ern her
,
,2006.
6!f:a (2~~
PERR . McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
"
"
.
.
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LEASE AGREEMENT
WHEREAS, the City of Denton, Texas (the "CITY" or "Lessor") and the Greater Denton
Arts Council, Inc. ("GDAC" or "Lessee") entered into that certain lease agreement dated
September 1, 1981 providing for leasing and renovation of certain real property owned by the
CITY (the "Existing Lease"); and
WHEREAS, the initial 25 year term of the Existing Lease is due to expire on August 31,
2006 and the parties desire to enter into this lease agreement (this "Agreement" or "Lease") to
take effect on September 1, 2006 and thereby superceding the Existing Lease; and
WHEREAS, GDAC is a Texas Non-Profit Corporation dedicated to the promotion and
provision of artistic performances of all kinds for the benefit of the citizens of Denton; and
WHEREAS, this Agreement promotes the goals of the CITY's Public Arts Policy as
follows:
In recognition of the role that public art already plays in Denton, by interpreting its
history, character, and aspirations, and of the importance of integrating public art into the daily
lives of its citizens, the City of Denton's Public Art Policy has been established to achieve the
following goals:
);- Create distinct, attractive, and inviting public space by including public art as an
integral part of the design of spaces and around development.
);- Celebrate Denton's cultural heritage and diversity by encouraging collaboration
between artists and the community.
);- Distinguish Denton's image in the metroplex by providing for the creation of
quality public art in locations of prominent stature.
);- Foster community education and enjoyment of public art.
);- Promote a community environment that attracts artists to live and work,
businesses to invest and locate, and residents to thrive.
);- Encourage participation in the provision of public art through public and private
investment.
);- Advance collaboration between the City of Denton and the Greater Denton Arts
Council (GDAC) in achieving the goals of this policy, Now, Therefore,
In consideration of the mutual covenants contained herein, the parties agree as follows:
SECTION 1. LEASED PREMISES
Subject to the terms and conditions contained in this Agreement, Lessor hereby leases to
Lessee and Lessee hereby leases from Lessor that certain real property together with
improvements thereon and appurtenances thereto located at the southeast corner of Hickory
Street and Bell Avenue, commonly known as the Visual Arts Center of Denton, and legally
described as lots 6, 7, and 8 of Block 3 of the Railroad Addition to the City of Denton, Denton
County, Texas (the "Property" or "Leased Premises"). All other real property leased under the
Existing Lease, including the electric plant property now being used by the CITY as a fire
station, was previously removed from the Existing Lease and is not a part of this Lease.
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SECTION 2. TERM
The term of this Lease shall be for a period of25 years, commencing September 1, 2006.
SECTION 3. CONSIDERATION
It is the opinion of the CITY that the prior remodeling and renovations made by GDAC
under the Existing Lease has resulted in enhancement of the value of the Leased Premises
thereby accruing multiple benefits to the citizens of the City of Denton, which are consistent with
the type benefits historically provided for citizens by municipal governments, and therefore
fulfills a valid municipal and public purpose and is in the public interest. Therefore, such
benefits together with the lease payments provided herein, and other of Lessee's covenants, are
good, valuable, and adequate consideration for the leasing of the Leased Premises under this
Agreement. Lessee shall pay rent in the amount of $1.00 per year, which has been paid in full
for the 25-year term as of the effective date of this Agreement.
SECTION 4. USE OF THE PROPERTY
Lessee shall use the Property primarily to promote and provide the citizens of Denton
with artistic performances and presentations of any and all kinds including, but not limited to
music, theater, art, dance and film. Such performances shall be open to the public without
discrimination for such charges as determined by the Lessee. In addition, the Property may also
be used for other ancillary public purposes, but with the understanding that the primary use will
be for the visual arts. Lessor will be able to use the Property for CITY events at no charge,
subject to the availability of space. Lessee hereby agrees not to use the Leased Premises for any
other purposes without the written consent of Lessor.
SECTION 5. COVENANTS OF LESSEE
1. Insurance. The Lessee shall during the term of this Lease and any extension thereof
purchase and keep in full force and effect, a policy or policies of insurance written by a company
or companies qualified to write insurance in the State of Texas and having an AM Best rating of
B+ or better, providing for the following coverage:
a. Primary hazard insurance coverage in the amount of $1,000,000, covering the
building having a maximum deductible of $1000. Proceeds from any such policy or
policies shall be payable to Lessor. Lessee is solely responsible for providing
insurance for any contents on the premises and the Lessor shall have no liability or
responsibility for loss or damage to said contents. The Lessor reserves the right to
insure the building in excess of the above amount, which coverage shall be secondary
to the insurance required of Lessee.
b. Personal injury and property damage liability insurance in the minimum amount of
$100,000 per occurrence for property damage, $500,000 per occurrence and
$250,000 per person per occurrence for bodily injury or death. Such policy or
policies of insurance shall name the City as an insured party. The parties recognize
and acknowledge that the amounts of coverage provided for herein are, as of the date
of this Lease, the maximum limits of liability imposed upon municipal governments
under actions brought against said governmental units under the Texas Tort Claims
Act. (Section 101.023 of the Civil Practices and Remedies Code) Should the limits
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under said act be increased during the term of this Lease, Lessee shall increase the
amounts of coverage provided for herein to an amount equal to the maximum amount
of possible liability imposed under the Act.
Lessee shall provide Lessor with certificates of insurance or copies of policies of
insurance required to be secured by Lessee herein upon the effective date of this Lease, and
thereafter no less than annually or prior to the expiration or renewal of such policies.
2. Janitorial Services. Janitorial services are defined as cleaning services for the
interior of the building. Lessee shall provide janitorial services to maintain the premises in a
reasonably clean condition. Lessee and Lessor shall each be responsible for and agree to pay for
fifty percent (50%) of the first $10,000 of costs of said janitorial services up to an amount of
$5,000 per annum each. Seventy-five percent (75%) of any janitorial costs incurred above the
original $10,000 per annum shall be paid by Lessee and the remaining twenty-five percent (25%)
shall be paid by Lessor. Lessee shall provide Lessor with written proof of all janitorial costs.
3. Maintenance. Maintenance or maintain is defined as on-going work and repairs to
the Leased Premises necessary to maintain the Property in the same condition throughout the
term of the Lease as is reasonably practicable, normal wear and tear excepted. Maintenance does
not include janitorial services, remodeling, or the construction of additional improvements.
Lessee shall maintain at its sole cost the landscaping and irrigation system. Lessor shall maintain
the building and those areas outside the building, not including landscaping and irrigation
system. Lessee shall reimburse Lessor on an annual basis for all building maintenance costs up
to a maximum amount of $2,500 per year. Lessor shall be responsible for building maintenance
costs exceeding $2,500 per year. Lessor shall provide Lessee with written proof of all building
maintenance costs. Should Lessee desire to provide maintenance services for the building it may
do so by providing Lessor with notice of such work before it is performed and by providing
Lessor with written proof of such costs after the work is performed. The cost of such
maintenance services will be credited against Lessee's annual $2,500 share for maintenance
costs.
4. Future Adjustments. The parties agree that the cost sharing arrangement for
janitorial and maintenance services will be reassessed periodically, but not less than every five
years.
SECTION 6. DESTRUCTION OF LEASED PREMISES
If the building or other improvements on the Leased Premises should be damaged or
destroyed by fire, tornado, or other casualty, the Lessor shall have the option to either repair or
rebuild the same to substantially the condition in which they existed prior to such damage,
provided the repairs or reconstruction can be made wholly from the proceeds of insurance
coverage provided for by the Lessee. Should there not be sufficient monies available from such
insurance proceeds to repair or reconstruct the Leased Premises to substantially the condition in
which they existed prior to such damage, the Lessor may cancel this Lease.
SECTION 7. UTILITY COSTS
Lessor shall pay for electric utilities up to a maximum of 308,000 kilowatt hours usage
per lease year. All electric costs above such maximum annual usage will be reimbursed to
Lessor by Lessee no later than 60 days after Lessee receives written notice of such overage.
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Lessor shall pay for water utilities up to a maximum of 450,000 gallons usage per lease year for
the Leased Premises and all wastewater and solid waste charges. Lessor shall provide Lessee
with written information of monthly usage on a monthly basis. All water utility costs above this
maximum annual usage will be reimbursed to Lessor by the Lessee no later than 60 days after
Lessee receives written notice of such overage. Lessee shall pay for costs of any telephone
services. The parties agree that the utility usage and cost sharing arrangement will be reassessed
periodically, but not less than every five years. Notwithstanding the foregoing, it is understood
that the annual maximums set forth in this section will not be increased.
SECTION 8. FINANCIAL STATEMENT, AUDIT
Lessee shall furnish Lessor within thirty (30) days after the expiration of each lease year
during the term of this lease a financial statement for prior fiscal year along with audited copy
when received showing the total amount of monies received and expenditures made by Lessee
during that year. Lessor shall have the right at all reasonable times to examine and audit, at
Lessor's expense, the books and records of Lessee.
SECTION 9. ACCESS TO LEASED PREMISES
Lessee shall permit Lessor or its agents to enter the Leased Premises at all reasonable
hours to inspect and maintain the Leased Premises or make repairs.
SECTION 10. QUIET ENJOYMENT
Lessor warrants that Lessee shall be granted peaceable and quiet enjoyment of the Leased
Premises free from any eviction or any interference by Lessor so long as the Property Lessee is
not in default of any terms of this Lease.
SECTION II. INDEMNITY
Lessee agrees to indemnify and hold Lessor harmless against any and all claims,
demands, damages, costs, judgments and expenses, including reasonable attorneys' fees for the
defense thereof arising from the conduct or management of Lessee's activities in the Leased
Premises or from any breach or from any act or negligence of Lessee, its agents, contractors,
employees, concessionaires or licensees in or about the leased premises.
SECTION 12. ENERGY AND WATER CONSERVATION
The Lessee pledges to do everything within its power to enforce the best possible energy
and water conservation practices during its use of the Leased Premises.
SECTION 13. ASSIGNMENT OF SUBLEASE
Lessee shall not assign this Lease and shall not sublease the Leased Premises or any part
thereof without the express written consent of the Lessor.
SECTION 14. TERMINATION
If Lessee defaults in the performance of any term, covenant, or condition required to be
performed by it under this Agreement, Lessor may terminate this Agreement on giving at least
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15 days notice to Lessee of such intention to terminate, thereby terminating this agreement on the
date designated in such notice unless Lessee shall have cured such default prior to expiration of
the 15 day period.
SECTION 15. LEGAL CONSTRUCTION AND VENUE
In case anyone or more of the provision contained in this agreement shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such validity, illegality or
unenforceability shall not affect any other provision thereof, and this agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been contained herein.
This Agreement shall be construed under the laws of the State of Texas and is fully performable
in Denton County, Texas. Exclusive venue for the enforcement or interpretation of this
Agreement shall be a court of competent jurisdiction located in Denton County, Texas.
EXECUTED this the 2.0 i:IJ day of C <;;; ,-rf-ern her , 2006.
,
CITY OF DENTON, TEXAS
BY~
HOWARD MARTIN
INTERIM CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
BY:
N e:
President
~u~
ATTEST:
City Secretary
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