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5446
NAD GUARDHOUSE CABIN FOUNDATION
Lease Agreement - N.A.D. Log Cabin
Parks
LEG 12-1
i/i/2oi5
12/31/2019
6/30/2019
Comments:
LEASE AGREEMENT
THIS LEASE AGREEMENT (hereinafter "Lease") is between the CITY of
BREMERTON, a municipal corporation, (hereinafter "City"), and the NAD Guardhouse Cabin
Foundation, a Washington non-profit corporation (hereinafter "Lessee").
RECITALS
WHEREAS, the City now owns certain land known as N.A.D. Park; and
WHEREAS, it is the parties' desire to enter a Lease for a portion of N.A.D. Park,
specifically the N.A.D. Log Cabin and adjoining property, by entering a five (5) year Lease, with
an option to extend for five (5) years in consideration of proposed improvements to the Cabin by
Lessee;
NOW, THEREFORE, the City and Lessee agree as follows:
AGREEMENT
1. PROPERTY.
1.1 Property Defined. The Lessee leases from the City real property, including�a
building which is approximately nine hundred ninety (990) square feet and is commonly known
as the N.A.D. Log Cabin, located at 1900 Austin Drive, Bremerton, within the confines of
N.A.D. Park; said leased property is legally described in EXHIBIT A and further described in
the site plan in EXHIBIT B(the "Property"). EXHIBITS A and B are attached hereto and
incorporated herein by reference.
1.2 Survev, Mans, and Plans. Lessee is not relying upon and the City is not making
any representations about any survey, plat, diagram, and/or legal description provided by the
City.
1.3 Inspection. The City makes no representation regarding the condition of the
Property or the improvements located on the Property, and leases the Property "as is." Lessee
agrees to assume liability and indemnify the City pursuant to section 12.1 below.
2. USE.
2.1 Permitted Use. The Lessee and the City shall have the following rights to use the
Property and the adjacent parking lot under this Lease:
(a) Property. Lessee shall use the Property for Lessee activities and
events, environmental and historical education, activities supporting recreational use of N.A.D.
Park, and community meetings (the "Permitted Use"). Lessee shall make the Property available
to the Bremerton Parks and Recreation Department and non-profit groups providing sanctioned
activities at N.A.D. Park on a space available basis. Lessee may charge a reasonable fee for use
of the Property provided that all fees collected are to be used toward the cost of the
improvements listed in EXHIBIT C, other maintenance or improvements of the Property, and
costs associated with other Lessee Permitted Uses. The Property shall not be used for other
business or purposes without the prior written consent of the City. The Property shall not be
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Lease - NAD Cabin
used for illegal purposes. This Lease shall not be construed as the City's waiver of land use,
building code provisions, or permitting that would otherwise apply to any improvements or uses
of the site.
(b) Parking Lot. Lessee shall have non-exclusive access to the adjacent
public parking lot north of the Property for parking as needed for Lessee's Permitted Use of the
Property.
2.2 Restrictions on Use. Lessee shall not cause or permit any damage to natural
resources on or adjacent to the Property. Lessee shall not commit or allow to be committed any
waste in or upon the Property. Lessee shall not generate, release, spill, store, deposit, transport,
or dispose of any hazardous substances as set forth in section 10 below. Lessee shall not cause or
allow any filling activity, including moving deposits of any matter, to occur on the Property
without required permits and written approval by the City. If Lessee fails to comply with all or
any of the restrictions on the use of the Property set out in this subsection 2.2, the City shall
notify Lessee and provide Lessee a reasonable deadline to take all steps necessary to remedy the
failure. If Lessee fails to do so in a timely manner, then the City may take any steps reasonably
necessary as determined by the City, to remedy this failure. Upon demand by the City, Lessee
shall pay all costs of such remedial action, including but not limited to the costs of moving,
removing and disposing of any material placed improperly on the Property. This section shall
not in any way limit Lessee's liability as set forth in this Lease. The covenants contained in
section 2.2 shall survive expiration or termination of this Lease.
2.3 Conformance with Laws. Lessee shall, at all times and at its sole cost, keep
current and comply with all conditions and terms of any permits, licenses, certificates,
regulations, ordinances, statutes, and other government rules and regulations regarding its use or
occupancy of the Property. Lessee shall•obtain all permits, including occupancy permits.
2.4 Liens and Encumbrances. Lessee shall keep the Property free and clear of any
liens and encumbrances arising out of or relating to its use or occupancy of the Property.
3. TERM.
3.1 Term Defined. The term of this Lease is five (5) years (the "Term"), beginning on
the lst day of January, 2015 (the "Commencement Date"), and ending on the 31 day of
December, 2019 (the "Termination Date"), unless terminated sooner under the terms of this
Lease ("Initial Term").
3.2 Ontion to Extend. Lessee shall have the option of extending this Lease for up to
one additional five (5) year term ("Option Period") upon delivering written notice to the City
sixty (60) days prior to the expiration of the Term, if the Lessee timely and satisfactorily
completes the tasks listed in EXHIBIT C, which is attached hereto and incorporated herein by
reference.
3.3 Early Termination Durin� Option Period. If Lessee exercises its option to extend
the Lease under section 3.2, the parties shall have the following additional rights under this
agreement. Lessee shall have the right to terminate the Lease at any time during the Option
Period upon giving the City sixty (60) days prior written notice of termination. If the City
determines that the Property is needed for City purposes (as opposed to private or commercial
uses), the City may terminate the Lease, without cost or penalties, at any time during the Option
Period upon giving the Lessee one hundred eighty (180) days prior written notice of termination.
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3.4 End of Term. Upon the expiration or termination of the Term or Option Period,
as applicable, Lessee shall surrender the Property to the City in the same or better condition as
existed on the Commencement Date, reasonable wear and tear excepted.
3.5 Hold Over. If Lessee remains in possession of the Property after the Termination
Date or Option Period, as applicable, the occupancy shall not constitute an extension or renewal
of the Lease. The occupancy shall be a month-to-month tenancy, which may be terminated by
either party on thirty (30) days written notice. The monthly rent during the holdover shall be in
the amount of 100% of the Fair Market Value for renting the building and land, payable by the
first day of each month, and all the terms of this Lease applicable to a month-to-month tenancy
shall apply during the holdover period. If the City provides a notice to vacate the Property in
anticipation of the termination of this Lease or at any time after the Termination Date or Option
Period, as applicable, and Lessee fails to vacate within the time set forth in the notice, then
Lessee shall be a trespasser, shall owe the City all amounts due under applicable law, and shall
pay all costs and attorney's fees incurred by the City in removing Lessee and its personal
property from the Property.
4. CONSIDERATION.
There is no monthly lease payment during the Term or Option Period of this Lease. The
consideration for the Lessee's use of the Property is the improvements the Lessee shall make to
the Property at Lessee's sole expense, timely and to the satisfaction of the City, set forth in
EXffiBIT C, and the City's right to use the property on a limited basis pursuant to Section 2.1
above.
5. OTHER EXPENSES.
During the Term and Option Period, Lessee shall pay the following additional expenses:
5.1 Utilities and Services. Lessee shall pay all fees charged for utility services in
connection with the use and occupancy of the Property, including but not limited to water, sewer,
storm water, electricity, gas, and telephone service. Lessee shall also pay all costs associated
with the alarm system, if Lessee chooses to use the system. City shall be responsible for
maintenance of utility laterals to the building and the sewer grinder pump. Lessee shall be
assessed actual costs of repair, as determined by the City, in the event of damage to the grinder
pump unit caused by Lessee's activities and/or misuse of such unit.
5.2 Leasehold Excise Tax, Other Taxes and Assessments. Lessee agrees to pay the
leasehold excise tax pursuant to Chapter 82.29A RCW currently in the amount of 12.84 percent
and as may be adjusted pursuant to Ch. 82.29A RCW. Since consideration for the Lease is based
on Lessee improvements to the Property in lieu of Lease payments, for purposes of assessment
and payment of the leasehold excise tax, the leasehold value of the property is based on the
factors as set forth in EXHIBIT D in the amount of $ 5,040.00 per year. Lessee may or may not
have to pay all or a portion of the leasehold excise tax, depending on whether Lessee applies for
and qualifies for an exemption under RCW 82.29A.130.
The leasehold value will be adjusted every year during the Term and Option Period of
this Lease based upon the prior year's Consumer Price Index (CPI) for All Urban Consumers
(CPI-U) as published by the United States Department of Labor for Seattle-Tacoma-Bremerton,
all items (1982-84=100). For purposes of the CPI adjustment, the base shall be the June 2014
CPI index June to June every five years (i.e. June 2014 - June 2019). The CPI adjustment shall
occur on the following January 1 of each year during the Term and Option Period of this Lease.
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Lease - NAD Cabin
In addition, Lessee agrees to pay when due the leasehold excise tax, or any additional
assessments thereto, with respect to any payment or obligation hereunder, which is deemed by �
the State of Washington to be taxable rent under said chapter and to indemnify and hold the City
harmless from the same.
Lessee shall pay quarterly to the City by the fifteenth day of the month following the end
of each quarter, or as otherwise required by the State of Washington, the amount of the leasehold
tax owing. Lessee may prepay these quarterly payments on a semi-annual or annual basis or as
otherwise approved by the City.
5.3 Failure to Pav. If Lessee fails to pay any of the amounts due under this Lease, the
City may pay the amount due, and recover its cost in accordance with the provisions of section 7.
6. CITY OBLIGATIONS.
During the Term and Option Period, the City shall provide and pay for trash service,
except disposal of demolition or construction debris. The City shall maintain the flag pole.
7. LATE PAYMENTS AND OTHER CHARGES.
7.1 Late Char�e. If any Lease payment is not received by the City within ten (10)
days of the date due, Lessee shall pay to the City a late charge equal to four percent (4%) of the
amount of the Lease to defray the overhead expenses of the City incident to the delay.
7.2 Interest Penalty for Past Due Lease Payments and Other Sums Owed. If a Lease
Payment is not paid within thirty (30) days of the date due, then Lessee shall, in addition to
paying the late charges determined under subsection 7.1 above, pay interest on the amount
outstanding at the rate of one percent (1%) per month until paid. If the City pays or advances any
amounts for or on behalf of Lessee, including but not limited to leasehold taxes, taxes,
assessments, insurance premiums, costs of removal and disposal of unauthorized materials
pursuant to section 2 above, costs of removal and disposal of improvements pursuant to section 8
below, or other amounts not paid when due, Lessee shall reimburse the City for the amount paid
or advanced and shall pay interest on that amount at the rate of one percent (1 °Io) per month from
the date the City notifies Lessee of the payment or advance.
7.3 No Counterclaim, Setoff, or Abatement of Rent. Except as expressly set forth
elsewhere in this Lease, rent and all other sums payable by Lessee pursuant to this Lease shall be
paid without the requirement that the City provide prior notice or demand, and shall not be
subject to any counterclaim, setoff, deduction, defense or abatement.
8. IMPROVEMENTS, REPAIR AND MAINTENANCE.
8.1 Ownership of Improvements. So long as this Lease remains in effect, Lessee shall
retain ownership of all trade fixtures and other removable improvements it may place on the
Property (collectively "Lessee-Owned Improvements"). Lessee-Owned Improvements shall not
include permanent construction, reconstruction, alterations, or additions to the Property by the
Lessee or the City ("City-Owned Improvements"), or any Unauthorized Improvements as defined
in subsection 8.5 below. Upon Lessee's completion of each of the required improvements listed
in EXHIBIT C or any other permanent improvements, such improvements are the property of
the City.
8.2 Construction. Lessee shall obtain all building and other required construction
permits. Prior to Lessee commencing any construction, alteration, renovation, replacement, or
major repair, Lessee shall submit written plans describing the proposed work to the Parks
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Lease - NAD Cabin
Director or his/her designee for approval. Construction activity shall not commence until plans
are approved in writing. Lessee shall obtain a performance and payment bond in an amount
equal to 100°Io of the estimated cost of construction for major repairs and permitted
improvements unless otherwise waived by the City's Risk Management Specialist. The
performance and payment bond shall be maintained until the costs of construction, including all
laborers and material persons, have been paid in full. Upon completion of construction, Lessee
shall promptly provide the City with as-built plans and specifications, unless this requirement is
waived in writing by the Parks Director or designee. The provisions of this section do not
obviate any permit requirements that may apply to the proposed activity. Except for those items
identified in this Lease as City obligations, all improvements to the Property, including those
listed in EXHIBIT C, shall be completed at Lessee's sole expense, and shall be done in
compliance with all laws and governmental requirements.
8.3 Minor Repair and Maintenance. Lessee shall, at its own expense, maintain the
Property and all improvements (regardless of ownership) in good order and repair, and in a clean
and safe condition. The City's consent and approval shall not be required for any routine
maintenance or minor repair made by the Lessee that does not result in the construction,
alteration, renovation, replacement or major repair on the Property.
8.4 Removal. Unless otherwise agreed by the City in writing, Lessee-Owned
Improvements, trade fixtures and personal property shall be removed by Lessee by the
Termination Date. If the Lessee-Owned Improvements remain on the Property after the
Termination Date, they shall become the property of the City without payment by the City, or if
the City removes them, Lessee shall reimburse the City for the costs of removing the items and
Lessee waives all claims for loss or damages to such items.
8.5 Unauthorized Improvements. Improvements made on the Property without the
City's prior consent pursuant to subsection 8.2 or which are not in conformance with the plans
submitted to and approved by the City ("Unauthorized Improvements") shall immediately
become the property of the City, unless the City elects otherwise. Regardless of ownership of
Unauthorized Improvements, the City may, at its option, require Lessee to sever, remove, and
dispose of them, charge Lessee rent for the use of them, or both. If Lessee fails to remove an
Unauthorized Improvement upon request, the City may remove it and Lessee shall reimburse the
City for the cost of removal and disposal.
8.6 Government-Required Repairs. Lessee shall, at its sole expense, make any and all
additions, repairs, alterations, maintenance, replacements, or changes to the Property or to any
improvements on the Property which may be required by any public authority, unless the City is
obligated in this Lease to maintain the particular item needing repair.
8.7 Cit,y Re airs. The City shall not be required to make any alterations, maintenance,
replacements, or repairs in, on, or about the Property, or any part thereof, during the Term or
Option Period, except as specified in this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 Major Dama�e. In the event the Property, at no �fault of the Lessee, is damaged to
such an extent as to render the same unusable in whole or in substantial part, or is destroyed,
Lessee shall give the City immediate written notice thereof, and it shall be optional with City to
repair or rebuild the same. The City shall have not more than thirty (30) days after date of such
notification to notify Lessee in writing of the City's intention to repair or rebuild the Property, or
the part so damaged. If the City elects to repair or rebuild Property, the City shall perform the
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Lease - NAD Cabin
work of such repairing or rebuilding without unnecessary delay, and during such period the
required timeline for Lessee's tasks in EXHIBIT C shall be stayed. If City shall fail to give the
notice aforesaid, or� chooses not to repair or rebuild, Lessee shall have the right to declare this
Lease terminated by written notice served upon the City. If the City decides not to repair or
rebuild the Property, the City may terminate this Lease, unless the Lessee chooses to repair or
rebuild the Property at its own expense and so notifies the City in writing within thirty (30) days
of the City's decision. If Lessee chooses to repair or rebuild, its obligations under EXHIBIT C
shall remain.
9.2 Lessee-Caused Dama�e. Damage or destruction caused by Lessee's use of the
Property shall be repaired at the sole expense of Lessee.
10. HAZARDOUS SUBSTANCES.
Lessee shall not generate, release, spill, store, deposit, transport, or dispose of
(collectively "Release") any hazardous substances, sewage, petroleum products, hydrocarbons,
radioactive substances, medicinal, bacteriological, or disease-producing substances, hazardous
materials, toxic substances or any pollutants or substances defined as hazardous or toxic in
accordance with applicable federal, state, and local laws and regulations ("Hazardous
Substances") in, on or about the Property. Lessee shall indemnify, defend and hold the City
harmless from any and all claims, liabilities, losses, damages, cleanup costs, response costs, and
expenses (including reasonable attorneys' fees) arising out of or in any way related to the Release
by Lessee, or any of its agents, representatives, or employees, or the presence of such Hazardous
Substances in, on or about the Property occurring at any time after the Commencement Date and
arising out of the activities of Lessee, or any of its agents, representatives or employees. The
provisions of this paragraph shall survive termination or expiration of this Lease.
11. ASSIGNMENT AND SUBLETTING.
Lessee shall not sell, convey, mortgage, assign, pledge, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or the Property without the City's prior
written consent. Such consent shall be at the City's sole discretion.
12. INDEMNITY.
12.1 Lessee agrees that the leased Property, which includes the Log Cabin, is in serious
disrepair, agrees that the parties may not know all defects in the Property and leases the Property
"as is," and agrees that the Lessee is solely responsible for ensuring that the Property is safe for
use and occupancy. The City shall not be liable for any injury to any person or for any loss of or
damage to any property (including property of Lessee) occurring in or about the leased Property
and caused by or resulting from any act or omission by Lessee, or any officer, agent, employee,
guest, invitee, or visitor of Lessee; and, during the full Term and Option Period, Lessee agrees
and covenants to indemnify,. defend, and hold harmless the City and those persons who were,
now are, or shall be duly elected or appointed officials or members or employees or agents
thereof, against and from any loss, damage, costs, charge, expense, liability, claim, demand, or
judgments of whatsoever kind or nature whether to persons or property, to the extent arising on
said Property, or on any areas adjoining the same, which is under the control or use of Lessee
pursuant to this Lease and arising out of or in connection with Lessee's use and occupancy of
said Property. �
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Lease - NAD Cabin
12.2 The City agrees and covenants to indemnify, defend, and hold harmless the
Lessee, its officers, employees, and agents thereof, against and from any loss, damage, costs,
charge, expense, liability, claim, demand, or judgment of whatsoever kind or nature whether to
persons or property, arising out of or in connection with the City's sole negligence in its
performance under this Lease.
12.3 Should a court of competent jurisdiction determine that this Lease is subject to
RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons
or damages to property caused by or resulting from the concunent negligence of Lessee and the
City, its officers, officials, employees, and volunteers, the Lessee's liability hereunder shall be
only to the extent of the Lessee's negligence. IT IS FURTHER SPECIFICALLY AND
EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED HEREIN
CONSTITUTES THE LESSEE'S WANER OF IMMUNITY U�NDER INDUSTRIAL
INSURANCE, TITLE 51, RCW, SOLELY FOR THE PURPOSES OF THIS
INDEMNIFICATION. This waiver has been mutually negotiated by the parties.
The provisions of section 12 shall survive the expiration or termination of this Lease.
13. INSURANCE.
13.1 General Commercial Liability Insurance. Lessee, at its own expense, shall
provide and keep in force with companies acceptable to Lessor comprehensive general liability
insurance in the amount of not less than One Million Dollars ($1,000,000.00) per occurrence for
bodily injury and property damage. Lessee shall furnish Lessor with a certificate of such policy
within thirty (30) days of the Commencement Date of this Lease and whenever required shall
satisfy the City that such policy is in full force and effect. Such policy shall name the City as an
additional insured and shall be primary and noncontributing with any insurance or self-insurance
carried by the City. The policy shall further provide that it shall not be canceled or altered.
without twenty (20) days prior written notice to the City.
13.2 Builder's Risk Insurance. During the time periods when the Lessee is making
improvements to the Property, Lessee shall obtain Builder's Risk Insurance in an amount that
will cover the value of Lessee's building materials. Lessee shall hold the City harmless for any
loss or damage to Lessee's materials.
13.3 Worker's Comnensation. During the time periods when the Lessee is making
improvements to the Property, Lessee shall provide evidence of appropriate Worker's
Compensation covering all workers on site. The City will not provide Worker's Compensation
coverage.
13.4 Professional Liabilitv Insurance. Any licensed professional who does work on or
for the property must have insurance with limits no less than $1,000,000 per occurrence/claim.
13.5 Permanent Improvements. Once improvements are permanently affixed to the
property, they belong to the City and are covered by the City's insurance.
13.6 Hazard Insurance. Lessee shall adequately insure all of Lessee's personal
property, which is all property that is not permanently affixed to the property.
13.7 Certificate of Insurance. Lessee shall provide to the City documentary evidence,
certified by the insurer, of all insurance required in this Lease.
13.8 Subro a�. The City shall not be liable to Lessee (by way of subrogation or
otherwise) or to any insurance company insuring the other party for any loss or damage to any
building, structure, or other tangible property, or any resulting loss of income, or losses under
worker's compensation laws and benefits, if any such loss or damage is covered by insurance
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benefiting the party suffering such loss or damage or was required to be covered by insurance
pursuant to this Lease. Lessee shall, upon obtaining the policies of insurance required give
notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
14. DEFAULT AND REMEDIES.
14.1 Acts Constitutin� Default. The occurrence of any one or more of the following
events shal] constitute a default and breach of this Lease by Lessee:
(a) Lessee abandons or vacates the Property;
(b) Lessee fails to comply with any law, regulation, policy, or order of any
lawful governmental authority;
(c) Lessee becomes insolvent or files for bankruptcy;
(d) Lessee makes or has made or furnishes or has furnished any warranty,
representation or statement to Lessor in connection with this Lease, which is or was false or
misleading in any material respect when made or furnished; �
(e) Lessee fails to complete the Improvements during the Initial Term of this
lease set forth in EXHIBIT C during the time frames listed; or
(� Lessee fails to comply with any other provision of this Lease.
14.2 Lessee's Default. In case of a violation of subsection 14.1(e) or 14.1(fl by Lessee,
the City shall notify Lessee in writing of such violation. The Lessee shall cure any default that
imposes an immediate threat to the public health, safety or welfare within 24 hours. All other
violations shall be cured within thirty (30) days following the delivery of said notice; provided,
however, that if the nature of Lessee's default is such that more than thirty (30) days are
reasonably required for such cure, then Lessee shall not be deemed to be in default if Lessee
commences such cure within said thirty (30) days and thereafter diligently prosecutes such cure
to completion. In the event of the failure of the Lessee to remedy any default or violation of the
provisions herein contained within the period of time specified in the notice, this Lease and all
rights of Lessee hereunder shall be terminated and the City shall have the right to enter upon the
Property and re-take possession thereof. Continued violations for same or similar reasons may
be grounds for immediate termination if a subsequent violation occurs after the City gives notice
that it intends to terminate upon the further occurrence of similar violations.
14.3 Immediate Termination. Except as set forth in subsection 14.2, iri the event of any
default or breach by Lessee, the City may at any time terminate this Lease by written notice to
Lessee, and the City shall have the right to immediately enter upon the Property and re-take
possession thereof, without the necessity of a court order to do so.
15. ENTRY BY THE CITY. At any and all reasonable times during regular business hours,
upon one (1) day prior notice to Lessee, City reserves and shall have the right to enter the
Property to inspect the same a reasonable number of times, to submit the Property to prospective
purchasers or Lessees, to repair the Property, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to be performed,
always providing that the entrance to the Property shall not be blocked thereby and further
providing that the business of Lessee shall not be interfered with unreasonably. Lessee hereby
waives any claim for damages or for any injury or inconvenience to or interference with Lessee's
business or any loss of occupancy or quiet enjoyment of the Property, and any other loss
occasioned thereby, if City shall have taken every reasonable measure to avoid any such injury,
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Lease - NAD Cabin
inconvenience or interference. City shall have the right to use any and all means which City may
deem proper to open any doors or otherwise obtain access to the Property in an emergency,
without liability to Lessee except for any failure to exercise due care for Lessee's property, and
any entry to the Property obtained by City by any of said means or otherwise shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Property or an eviction of Lessee from the Property or any portion thereof.
16. NOTICE. Any notices required or permitted under this Lease may be personally
delivered, delivered by facsimile machine, or mailed by certified mail, return receipt requested, to
the following addresses or to such other places as the parties may direct in writing from time to
time:
The City: Director of Parks and Recreation
City of Bremerton
680 Lebo Blvd.
Bremerton, WA 98310
Lessee: NAD Guardhouse Cabin Foundation
c/o John Hayes Larson
1338 Broadway Ave.
Bremerton, WA 98337
A notice shall be deemed given and delivered upon personal delivery, upon receipt of a
confirmation report if delivered by facsimile machine, or three (3) days after being mailed as set
forth above, whichever is applicable.
17. MISCELLANEOUS.
17.1 Authoritv. Lessee and the person or persons executing this Lease on behalf of
Lessee represent that Lessee is qualified to do business in the State of Washington, that Lessee
has full right and authority to enter into this Lease, and that each and every person signing on
behalf of Lessee is authorized to do so.
17.2 Successors and Assi�. This Lease shall be binding upon and inure to the benefit
of the parties, their successors, assigns, and all parties legally empowered with signatory rights of
any party hereto.
17.3 Entire Agreement. This Lease, including the exhibits and addenda, if any,
contains the entire agreement of the parties. All prior and contemporaneous agreements,
promises, representations, and statements relating to this transaction or to the Property, if any, are
merged into this Lease.
17.4 Nondiscrimination. Lessee shall not discriminate in employment or services to
the public on the basis of sex, race, color, creed, national origin, age, sexual orientation, marital
status, physical, mental or sensory handicap except an employment action based on a bona fide
occupational qualification.
17.5 Waiver. The waiver by the City of any breach or default of any term, covenant, or
condition of this Lease shall not be deemed to be a waiver of such term, covenant, or condition;
of any subsequent breach or default of the same; or of any other term, covenant, or condition of
this Lease. The City's acceptance of a Lease payment shall not be construed to be a waiver of
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any preceding or existing breach other than the failure to pay the particular Lease payment that
was accepted.
17.6 Cumulative Remedies. The rights and remedies of the City under this Lease are
cumulative and in addition to all other rights and remedies afforded to the City by law or equity
or otherwise.
17.7 Time is of the Essence. TIME IS OF THE ESSENCE as to each and every
provision of this Lease.
17.8 Severabilitv. If any provision of this Lease shall prove to be invalid, void, or
illegal, it shall in no way affect, impair, or invalidate any other provision of this Lease.
17.9 Costs and Attorney Fees. If, by reason of any default or breach on the part of
either party in the performance of any of the provisions of this Lease, a legal action is instituted,
each party agrees to pay its own costs and attorney fees in connection therewith.
17.10 A�nlicable Law and Venue. This Lease shall be interpreted and construed in
accordance with the laws of the State of Washington. Any reference to a statute shall mean that
statute as presently enacted or hereafter amended or superseded. Venue for any action arising out
of or in connection with this Lease shall� be in the Superior Court for Kitsap County, Washington.
17.11 Modification. Any modification of this Lease must be in writing and signed by
the parties. The City shall not be bound by any oral representations or statements.
17.12 Survival of Covenants. The covenants contained herein survive the termination or
expiration of the Lease for the applicable statute of limitation periods.
17.13 Quiet Enjovment. The City covenants and agrees that Lessee, upon performing
the terms and conditions of the Lease, may peacefully hold and enjoy the Property during said
term without any interruption by the City, its successors or assigns. City will use its best efforts
not to interfere with Lessee's business or right of access to and from the Property during the term
of this Lease. '
17.14 Recordin� of Lease. Neither the City nor Lessee shall record this Lease.
17.15 Execution. This Lease may be executed in several counterparts, each of which
shall be deemed an original instrument.
THIS AGREEMENT requires the signature of all parties and is executed as of the date of the
last signature below.
CITY OF BItEMERTON
By: Patt nt
Its: May r
Date: !z ' z f �' �4
AS TO FORM:
Roger A. Lubov�h, C
,
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NAD GUARDHOUSE CABIN
FOUNDATION
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Date: l�� Z�l�/`1
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STATE OF WASHINGTON
COUNTY OF KITSAP
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I certify that I know or have satisfactory evidence that Patty Lent is the person who
appeared before me, and acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument, and acknowledged it as Mayor of the City of Bremerton to
be the free and voluntary act of such City for the uses and purposes mentioned in the instrument.
WITNESSETH my hand and seal this ���1day of �� � , 2014.
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F WASH►�
STATE OF WASHINGTON
COUNTY OF KITSAP
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�OT�R��UBLIC in a for
Wash ngton, residing at �
My commission expires / .
tate of
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I certify that I know or have satisfactory evidence that is the person
who appeared before me, and acknowledged that he signed this instrument, on oath stated that he
was authorized to execute the instrument, and acknowledged it to be the free and voluntary act
for the uses and purposes mentioned in the instrument.
and seal this a� day of ���1-Ul.m�� , 2014.
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Washington, residing at
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Lease - NAD Cahir�
EXHIBIT A
Legal Description
That portion of Government Lot 4(SW �/4 of the SW 1 /a) of Section 9, Township 24
North, Range 1 East, W.M., situate in the City of Bremerton, Kitsap County,
Washington, more particularly described as follows:
Beginning at the SW corner of said Section 9, an existing monument, thence
easterly along the south line of said Section 9 and the northerly right of way of
Kitsap Way (formerly SR 21A) 90 feet to its intersection with the centerline of
Austin Drive and the True Point of Beginning; thence northerly along said
centerline of Austin Drive 154 feet; thence easterly on a line parallel and 12 feet
north of the north wall of an existing log cabin 90 feet; thence southerly on a line
parallel and 35 feet east of the east wall of said existing log cabin 154 feet to the
south line of said Section 9; thence westerly along said south line 90 feet to the
True Point of Beginning.
Except Austin Drive.
Consisting of approximately 11,500 square feet.
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EXHIBIT C
Lessee Improvements and Work Schedule
It is recognized that the time frames set forth below for the Improvements may need to be modified based
on the results of the various investigations and repairs. The Work Schedule may be altered with the Parks
Director's approval. (Irrespective of any changes in the work schedule, all improvements must be
completed within the Initial Term of this lease in order to exercise the option to extend this lease pursuunt
to section 3.2 above. )
1 Year
Investigations:
• Asbestos
• Lead Paint
• Termite & Pest
• Electrical System
• Chimney
• Mold
Minor Repairs:
• Locks & security system update
• Fix up & paint the back room
• Fix, uncover, & bar windows
• Install internal accessible ramp between levels
• Repair loading dock
• Shore-up sagging floor
• Clean, fix, & recap chimney
• Clean moss/debris off of roof
• Clean out crawl space
• Seal & cover holes in logs (temporary fix)
• Insulate water piping
• Fix roof leak
• Install low flow toilet & lavatory faucet
2" Year • �--- ,._
Minor Repairs:
• Roof replacement
• Crawlspace: open access, clean out crawlspace, install vapor barrier if needed
• Paint exterior of addition
Major Repairs:
• Restroom accessibility: determine best option to develop fully accessible restroom in cabin;
construct needed improvements to meet ADA code
3' & 4� Years
Minor Repairs:
• Replace the flooring
• Painbseal the logs
Major Repairs:
• Gutter & downspout replacement
• Replace all logs and sections of logs that are deemed unsound due to dry rot, insect
infestation, wear or other causes with wooden logs of a type that maintain the character of
and uphold the structural integrity of the building
• Insulation — floor & roof: verify presence of insulation; increase insulation depth where
needed '
• Stabilize and repair the cabin's foundation
• Install a foundation for the addition
EXHIBIT D
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1
A•C•E PS,Inc.
l�ppraisal • Consulting • Environmental Screening
September 16, 2014
Mr. Roger Lubovich
City Attorney
City of Bremerton
345 6th Street
Suite 600
Bremerton, WA 98337
RE: ANALYSIS OF MARKET RENT - 1900 Austin Drive, Bremerton, WA
Assessor's Tax Pazcel No. 082401-4-020-2007
Dear Mr. Lubovich:
At your request, I have completed an analysis of the Fair Market Rent for the above referenced building
located within the NAD Park. The purpose of this analysis is to establish the "Fair Mazket Rent" for the
subject property. The intended use is to assist in determining the appropriate lease tax as determined by
statute.
Scope of Analysis
The lease rate which is set forth is based on site inspection and analysis of pertinent data. The rate was
established based upon a comparative analysis of other leased properties which are similar in utility to the
subject property.
Property Overview
The subject of this report is an old log cabin, 1090 square feet in size, which was built in 1934 and was
reportedly, the guardhouse for the ammunition depot which was once located on the 78 acre site. The
cabin has been maintained over the years and some structural work was completed on the log wa11 a
number of years ago, however, there is signifcant 1og repair which is needed at this time. The interior is
old and dated but is functional. There are three rooms, one of which is a lazge open room used for
meetings. There is also one bathroom. The roof is in need of replacement as there are active roof leaks
in the vicinity of the firepIace. A portion of the building has sloping floors indicating that there is some
floor support/foundation work which also needs to be completed. The Boy Scouts of America had
previously occupied the cabin for meetings but has since vacated the building. Users of the building
share the available parking with Park visitors as there is no dedicated pazking for the building. The
building is served by public water, power and phone is also available. Sewage disposal is handled by an
individual septic system which appears to be functioning at this time.
P.4. Boa 3241, Silverdale, Was6ington 98353 (360) 692-5081 Faa (360) 692-5126 email acepsinc@yahoo.com
Report Type
The regort type is a Summary Report. This analysis is intended to conform with Standazd I of the
Uniform Standards of Professional Appraisal Practice, as it applies to tlus type af consulting assignment.
This report also was completed in compliance with the professional and ethical standazds adhered to by
members of the National Association of Independent Fee Appraisers, of which the authar is a member in
good standing.
Potentaal Users of the Suilding
The property is located off of the main arterial roadway and is accessed by a local access road which runs
through the NAD Park from State Highway 3 to Kitsap Way. There is sorne txa£fic flow from vehicles
driving through the park as a"short-cut" to the State Highway, but trai�ic flow and visibility is insufficient
for a successful retail business. Past uses ha.ve included use as a meeting place for non-profit
organizations. The building could function as a dance studio, martial arts classroom, pilates or yoga
studio or could serve as administrative offices or headquarters for a non-profit organization or foundation
which does not require high traffic flow or a large number of parking spaces. Typical,ly these types of
users are not so much concerned about the location of the building but require an open floor plan with
restroom. Given the fairly open floor plan of the building, the building could also be used for storage if
the roof is replaced to elizninate the active roof leak.
Methodology
The bwildiung, as it currently sits, is disparately in need of repairs and is not desirable in it's condition.
While the building is capable of generating some income, it is not lilcely to command a high lease rate due
to the condition. Nevertheless, the only reliable method for determining the potential income which the
building is able to generate is by comparison with other spaces being rented for uses similaz to those
which have been identified as patential uses for the subject building.
Analysis �
For purposes of this analysis, lease comparables were chosen based upon the following criteria:
a) Location away from major retail corridoz with limited visibility
b) Older structures with similaz utility
c) Buildings is less than average condition
d) Older storage units in similaz locations
Summ$ry of Comparable Lease Data for Buildings o# Simil�r Utility
Survey of Storage Rates
Market lease rates for older storage complexes in the Kitsap County area were taken surveyed and data
from previous appraisals were analyzed according to their similarity in age, condition and location.
Based upon file data, dated between 6/2012 and 9/2014, mini-storage rates for similarly desirable storage
space ranged from $.58 per square foot for large units to $ 1.20 per square foot for smaller units. Larger
units being those which are larger than 8x10.
Recapitulation and Conclusion
There is very little rental data available for structures of this type in unique locations like the subject's.
The process of dete��n�ng the fair market rent for the subject bui�dia�g included the analysis of two rental
properties which aze in less than average condition and are in similar locations off of major arterial
roadways. The lease raxes they produce range from $.54 per square foot to $.72 per square foot. The
Retsil property is in better conditian but is similaz in location. The Anderson Hill Road property is similaz
in condition but the location is slightly superior to the subjects. This suggests a narrowed range of rates
and also suggests that the appropriate rate is near the lower end of this range. Tbe storage space rate
survey produced a range from $.58 per square foot for large units to $ 1.20 per square foot for smaller
units. The subject would be larger than the largest storage unit found in the survey which suggests that the
rate if used for storage may be less than $.58 per square foot.
The survey of lesser utilzlity buildings suggests a rate which is less than $ 54/sf and the survey of larger
storage units suggests a rate which is less than $.58 per square foot. For the purposes of this lease rate
analysis, a rate of $.50 per square foot of the building is considered appropriate. When this rate is applied
to the subject's building size, the following estimated Monthly Fair Market Rent is produced:
1,090 square feet aQ $.50/sf= $ 545.00
Rounded to $ 545.00 per month
Adjustments to Market RentlAdjusted Market Rent
The tenant is responsible for all maintenance of the building. The roof needs to be replaced immediately
if the building is to have any significant utility. The estimated cost to remove the old roof and replace
with a metal roof is $ 7,500. This capital expense equals $125 per month of the initial five yeaz term of
the lease. When this pro-rated cast is subtracted from the "as repaired" market rent calculation, the
following "as is" market rent is produced:
$ 545.00 per mo. -$ 125 per mo. _$ 420.00 (As is Fair Market Rent)
If you have any questions after you have had time to thoroughly read. the report, please feel free to call my
office.
Respectfully submitted,
�i
/ //
Rick D. Wells, IFAS
WA State Certified General Appraiser #1100344
LOCATION MAP
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