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#2 Action on proposed revisions to Rotary Gardens lease agreement CITY MANAGER’S MEMORANDUM October 5, 2009 TO: City Council FROM:Eric Levitt, City Manager SUBJECT: Action on proposed revisions to Rotary Gardens lease agreement. Request Recently, representatives from the Rotary Gardens Board of Directors contacted the City Manager’s office to request modifications to their lease agreement for the Rotary Gardens property. th Gary Smith and Dave Jennings of Rotary Gardens will attend the October 12 meeting to present the requested lease changes to the City Council. City Manager Recommendation The City Manager recommends approval of the proposed agreement. Suggested Motion I move to approve the changes to the Rotary Gardens lease. Background Rotary Gardens is a 20-acre non-profit botanic garden home to many themed gardens. The Gardens has existed for twenty years and is located on property owned by the city; the lease with the Gardens expires in May, 2089. Proposed Lease Changes The Board of Directors has asked for lease changes because they feel they have successfully managed the Gardens for twenty years and would like to modify the agreement to reflect the current independent management of the Gardens. The Gardens are proposing several significant lease changes: 1. The Gardens would be able to make capital improvements and changes to City property without prior Common Council review or consent. (section 3C) However, the Gardens must inform the City of the modifications. (section 4E) Through this provision, if the City has concerns it can submit notice of its concerns prior to the improvements occurring. 2. The Gardens would operate under self-control, with the Board and Director able to establish rules and procedures for the Gardens; however, they would inform the City Manager prior to implementation. (section 3D) These decisions would include the design, planting and maintenance of the horticultural plantings. 1 3. This lease has allowed the City the opportunity to assist with renovating/repairing garden buildings at our discretion; this section has been updated to include the Horticultural Building as one of the sites we may wish to improve. (section 4B) 4. The lease requires the City to use insurance proceeds to make repairs/replacements to the Gardens, provided the situation is subject to the conditions outlined in the lease. This means that if the City does not receive insurance funding, we do not have to pay for damages. Additionally, the City is not obligated to provide other funding for damages, reconstruction, repair, or improvement beyond the amount of insurance proceeds the City receives. (section 4D) 5. The Gardens may charge a fee to enter. This would include charging a fee for anyone wishing to fish in the lagoon from the Gardens property. The Gardens believe this is similar to what the State of Wisconsin requires for those wishing to fish within a state park. (section 7A) The Gardens would no longer have to provide free restrooms to the public because access would be restricted to those who have paid to enter. The Gardens has restrooms available during all open hours to those that have paid the entrance fee. 6. The City will no longer tell the Gardens how much fire insurance they need to purchase; rather, this decision will be left to the Gardens. (section 8A) The lease requires the Gardens to have worker’s compensation and liability coverage. (sections 8C 1 and 2) 7. The Gardens must submit an annual financial statement to the City. (section 9E) 8. The agreement could be terminated by either party with 120 days notice to the other party. 2 CITY OF JANESVILLE and ROTARY GARDENS, INC. ROTARY GARDENS LEASE AGREEMENT This (hereinafter the is made by and between the LEASE AGREEMENT "AGREEMENT") CITY OF a Wisconsin Municipal Corporation located in the County of Rock with its principal place of JANESVILLE, business at 18 North Jackson Street (hereinafter the and the "CITY"), ROTARY GARDENS, INC. (aka aWisconsin non-profit 501(c)(3) organization conducting its principal place of Rotary Botanical Gardens), business at 1455 Palmer Drive in the City of Janesville, County of Rock, State of Wisconsin (hereinafter the "LESSEE"). the is the owner of developed park land located in the City of Janesville, County of Rock, WHEREAS, CITY State of Wisconsin, known as Rotary Gardens; and, th Rotary Gardens is a successful organization celebrating its 20 year of existence, the need for WHEREAS, management and veto power over the day-to-day operations of Rotary Gardens no longer exists, the CITY lease is hereby revised. in consideration of the fulfillment of the obligations of the parties hereinafter set forth and NOW, THEREFORE, for other good and valuable consideration, the receipt of which is hereby acknowledged, IT IS by and between the as follows: MUTUALLY AGREED AND PROMISED, CITY and LESSEE 1.PREMISES hereby leases to the and the hereby leases from the for the term The CITY LESSEE LESSEE CITY, and upon each of the conditions, promises and obligations hereinafter set forth, A. That part and portion of to be known as Blackhawk Park "Rotary Botanical Gardens", incorporating approximately 20.0 acres of land, depicted and described more fully in Exhibit "A" which is attached hereto and incorporated herein as if fully set forth. B.A two-story brick structure currently upon known as the Rath ROTARY GARDENS Environmental Center comprising approximately One Thousand Four Hundred Ninety Six (1,496) square feet, and the Parker Education Center addition of approximately 11,500 square feet. C. The Horticulture Building comprising of 6,786 square feet. D. The west property line between Rotary Gardens and Lions Beach may be subject to change from time to time. The exact location of the west property line will be subject to the mutual agreement of the City, Rotary Gardens, and the Janesville Lions Club. E. Any and all current and future land, structures, buildings and improvements thereon. (Hereinafter A and B and C and D and all the land and buildings, structures and improvements thereon, current and future, jointly shall be referred to as ROTARY GARDENS.) Rotary Gardens/City of JanesvilleLease AgreementPage 1 of 1,Revised (date) 2. TERM OF LEASE The initial term of this lease shall be for ninety-nine (99) years commencing on 1 May 1990 and ending on 30 May 2089. 3. USE OF THE PROPERTY AND BUILDINGS A.has the authority to use for the purposes of management of The LESSEE ROTARY GARDENS a botanical garden, a Visitor and Educational Center, administrative offices, and a Horticulture Center. B.is responsible for any and all costs arising from and/or pertaining to design, The LESSEE development, repair, renovation and maintenance. C.has the authority to occupy, use, develop and maintain The LESSEE ROTARY GARDENS solely for the purposes of developing and maintaining a botanical garden, Visitor's Center, and Horticulture Building and such other directly related purposes and uses thereto in a manner consistent with Common Council Resolutions relating to this lease, this existing AGREEMENT, ordinances, and all other public park land uses or policies, written or by custom CITY CITY . Thewill inform the by letter in advance of any major improvements LESSEECity Manager allowing a minimum of thirty (30) days for response from the prior to implementation of such CITY The shall abide by the input of the City Manager and Common LESSEE improvements. Council in implementing the Work. D.The has the authority, from time to time, to establish such various rules and procedures LESSEE for using .Each and every such rule, prior to taking effect, shall be ROTARY GARDENS shared with the City Manager. 4. MAINTENANCE,REPAIRS, DAMAGE AND RESTORATION. A.shall, throughout the term of this solely at its own cost and The LESSEE AGREEMENT, expense, develop, improve, keep and maintain including, but not ROTARY GARDENS, limited to any and all vegetation, buildings, structures, improvements, public facilities, and accessories of whatsoever kind and nature which are now and which may later become a part of in as good or better a condition than the same were at the beginning ROTARY GARDENS of thisor later addition, reasonable wear and tear excepted. AGREEMENT B.may, solely at its expense and discretion, restore, repair and/or rehabilitate such The CITY structures including, but not limited to, the Visitor's Center, Horticultural Building, gazebo, bridge and other permanent structures, which may be destroyed or damaged by vandalism, fire or other cause. C.The fully or partial damage or destruction of any part or portion of shall not ROTARY GARDENS release the from any obligation or promise contained in this LESSEE AGREEMENT. D.shall be obligated to make such repairs, replacements and/or restorations of whatsoever The CITY kind, nature or description to or to any buildings or improvements thereon ROTARY GARDENS upon receiving such insurance payment therefore subject to the following conditions: 1.The shall not be obligated to provide funds or other resources beyond the amount of any CITY insurance payment received. 2.The shall not be obligated to pay any portion of any amount or type of deductible CITY required to be paid for the release of or in addition to insurance payments. Rotary Gardens/City of JanesvilleLease AgreementPage 2 of 2,Revised (date) 3.The option to repair, replace or restore any building or improvement, or to submit payments for the repair, replacement or restoration of any building or improvement to the shall LESSEE, remain at the discretion of the CITY. E.shall inform the in advanceof all alterations, additions, repairs, permanent The LESSEE CITY decorations, restorations or other improvements or modifications. 5. LESSEE'S RESPONSIBILITY A.has the authority and responsibility to develop and maintain The LESSEE ROTARY as a botanical garden, Visitor's Center, and Horticulture Center and such other GARDENS appurtenant uses and purposes directly related thereto. 6. CITY'S RESPONSIBILITY A.shall have no responsibility whatsoever, at any time, to provide funding, manpower, The CITY materials, supplies, vehicles or equipment for any development, improvements or of LESSEE'S maintenance of any part or portion of ROTARY GARDENS. B.shall snow plow the entire asphalt parking lot adjacent to the Visitor's Center. The CITY 7. RENT A.shall develop and maintain as a botanical garden and The LESSEE ROTARY GARDENS Visitor's Center open and available to all members of the public at reasonable hours. A reasonable admission fee may be applied with advance notice to the . CITY B.shall not require of the nor shall the pay to the any rent The CITY LESSEE, LESSEE CITY, or rental payment for the lease or use of ROTARY GARDENS. 8. INSURANCE A.shall obtain pay for and at all times maintain all risk fire insurance coverage for The LESSEE and the personal property and plant life and materials thereon. ROTARY GARDENS B.Such coverage shall be written on a replacement value basis. C.In addition, the shall obtain, pay for and at all times maintain the following coverage: LESSEE 1. Worker's Compensation covering the full statutory liability of the and arising from LESSEE CITY and or pertaining to development, maintenance, operation and use of LESSEE'S ROTARY GARDENS. 2.General Liability Coverage against all peril including personal injury and contractual with limits of One Million Dollars for each occurrence and Two not less than ($1,000,000.00) Million Dollarsin the aggregate naming the as co-insured or ($2,000,000.00) CITY additional insured under the policy(ies). Such policy shall include fire legal LESSEE'S Rotary Gardens/City of JanesvilleLease AgreementPage 3 of 3,Revised (date) liability with limits of not less than One Hundred Thousand Dollars Proof of ($100,000.00). such coverage shall be provided to the CITY. D.The City shall maintain and pay for: 1.Property insurance for covering current and future fully completed ROTARY GARDENS structures and additions thereto of such nature and covering such structures, buildings, improvements and additions thereto which is customary and consistent with the current CITY'S policy with the Wisconsin Local Government State Property Insurance Fund. The coverage CITY'S shall take effect when the structure or building is fully constructed andaccepted by the CITY. Until such event, and during all times when the building or structure is under construction, renovation, and/or remodeling, the shall acquire and maintain adequate insurance for LESSEE same. 2.The coverage shall attach, commence and be bound no earlier than such time(s) and/or CITY'S upon such events as is currently provided to the in the current policy with the CITY CITY'S Wisconsin Local Government State Property Insurance Fund. 3.The current building and structure insurance has a deductible. In the event that a claim CITY'S is made against the insurance for structure(s) and/or CITY'SROTARYGARDENS building(s), the shall be responsible for and shall timely pay to the the entire LESSEECITY amount of such deductible in each instance. E.Nothing in this shall be construed so as to authorize or permit any insurer of the AGREEMENT or the to be subrogated to any right of the or against the other arising CITYLESSEECITYLESSEE under this .The is fully responsible for all of its own acts and omissions AGREEMENTLESSEE and those of its own employees, agents, representatives, officers, officials and related others. 9. FINANCIAL GAIN A.The may undertake reasonable and project related financial gain activities upon LESSEEROTARY and directly contiguous public parkland provided that any and all proceeds GARDENSCITY therefrom shall be used exclusively by for the further enhancement and operations of LESSEE . ROTARYGARDENS B.Such financial gain activities include, but are not limited to, free will donations, commercial photography sessions, rental payments, special events and concession sales. C.The may, at its discretion, charge an admission fee to individuals and groups using or LESSEE visiting .The has the sole authority to periodically adjust any fees as ROTARYGARDENSLESSEE approved by its governing body. D. In conformance with Paragraph 9.C., if the decides to implement and then, from time to LESSEE time, change admission fees at Rotary Gardens, said fee schedule and changes thereto must be shared with the City prior to implementation. E.The LESSEE shall annually submit to the a financial statement within 30 days of completion CITY of the annual audit. Rotary Gardens/City of JanesvilleLease AgreementPage 4 of 4,Revised (date) 10. UTILITIES A. The shall be solely responsible and timely pay for the installation of any and all utility LESSEE services and laterals howsoever requested or required. B. The shall be solely responsible and timely pay any and all monthly and periodic LESSEE expenses necessary or desired to maintain said utility services including but not limited to, electrical, water, wastewater, storm sewer, gas, telephone and cable TV. 11. EASEMENTS A.This is subject to all easements of record. AGREEMENT 12. COMPLIANCE WITH LAWS A.shall at all times, fully comply with and obey each and every applicable rule, The LESSEE regulation, law, ordinance, statute and order of any governmental unit, body, and court lawfully exercising authority over its operation and use. ROTARY GARDENS, 13. MISCELLANEOUS Ashall work together to maintain an acceptable water level, which meets .The LESSEE and CITY the best interest of Lions Beach and the botanical gardens. Furthermore, the and shall work together to preserve, maintain and enhance the CITY LESSEE water quality. B.This shall be binding upon the parties hereto, their respective heirs, devisees, personal AGREEMENT representatives, administrators, successors, transferees, and assigns. C.This shall be construed and enforced in accordance with the Laws of the State of AGREEMENT Wisconsin. D.This shall not be assigned nor conveyed, nor any of obligations AGREEMENT LESSEE'S transferred by to any person without prior written approval from the LESSEE CITY. 15. MODIFICATIONS AND TERMINATION OF LEASE AGREEMENT A.This may be modified or amended upon the mutual written and executed AGREEMENT agreement of the and CITY LESSEE. B.1. This shall not be varied or waived by any oral representations or promise of either AGREEMENT party or their agents. 2. Each and every modification and amendment hereto shall be in writing, agreed to, and executed by both parties. Rotary Gardens/City of JanesvilleLease AgreementPage 5 of 5,Revised (date) C.Notwithstanding anything else in this to the contrary, this AGREEMENTAGREEMENT may be terminated unilaterally at any time upon written notice by the or the CITY LESSEE at least one hundred twenty (120) days in advance. 16. INDEMNIFICATION A.shall, at all times, and hereby does indemnify, save and hold harmless the and each LESSEE CITY and every of its elected officials, officers, employees, agents, representatives, agents, successors, heirs, and assigns from and against any and all claims damages, liability, expenses, costs, judgments, actions, demands and responsibility of whatsoever kind or nature arising from and/or pertaining to the useofand shall further indemnify and hold the above LESSEE'S ROTARY GARDENS harmless from and against any and all claims damages, liability, expenses, costs, judgments, actions, demands and responsibility of whatsoever kind or nature arising from and/or pertaining to any negligence and other acts of , its agents, employees, officers, members, customers, invites, LESSEE contractors, subcontractors, successors, heirs, assigns, and all other persons; and against all costs, attorney fees, expenses and liabilities incurred in the defense of such claim or any action proceeding brought thereon. B.The liability referred to herein includes, but is not limited to, statutory liability and liability under Worker's Compensation Laws in connection with claims for damage as a result of injury or death of any person, and property damage sustained by its agents and employees, officers, LESSEE, customers, members, invites, contractors, subcontractors, successors, heirs, assigns, and all other persons. Dated and revised in Janesville, Wisconsin, this _____ day of ________________ 2009 CITY OF JANESVILLE:ROTARY GARDENS, INC. Eric LevittGary L. Smith, Chairman of the Board City Manager Jean A. WulfDick Peck, Secretary City Clerk/Treasurer Approved as to Form: Waldemar Klimczyk City Attorney Rotary Gardens/City of JanesvilleLease AgreementPage 6 of 6,Revised (date)