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HomeMy WebLinkAbout5797AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Lease Agreement with Alexander Cart Rentals, Inc. for Gold Mountain Golf Course Cart Pad Study Session Date: COUNCIL MEETING Date: Department: Presenter: Phone: 7S 12/13/17 12/20/17 Parks Jeff Elevado A360) 473-5428 SUMMARY: The City ("Lessor") and Alexander Cart Rentals, Inc. ("Lessee") desire to enter into a new lease for the property at Gold Mountain Golf Club for Lessee's golf cart rental business. The current lease with Lessee expires December 31, 2017, and the new lease will commence January 1, 2018. ATTACHMENTS: 1) Lease FISCAL IMPACTS (Include Budgeted Amount): 2018 revenue of $13,200 to Gold Mountain Golf Course Fund. STUDY SESSION AGENDA: ❑ No Presentation N Full Presentation STUDY SESSION ACTION: N Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the Lease Agreement with Alexander Cart Rentals, Inc. for the property at Gold Mountain Golf Club for Lessee's golf cart rental business; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: dApprove Forth Updated 01/07/15 ❑ Deny ❑ Table ❑ Continue ❑ No Action LEASE THIS LEASE is entered into on the date fully executed by and between THE CITY OF BREMERTON, a municipal corporation, (hereinafter referred to as "City"), and ALEXANDER CART RENTALS, INC., a Washington corporation, (hereinafter referred to as "Lessee"). WHEREAS, the City is the owner of Gold Mountain Golf Club ("Golf Club"), which ownership includes the land upon which said golf complex is located, the buildings and other improvements which are a part thereof; and WHEREAS, Lessee has a private golf cart rental business and agrees to provide golf cart services to COLUMBIA HOSPITALITY ("Operator") of the Golf Club from this business at a reduced rate. Lessee desires to lease land from the City at the Golf Club for the storage of golf carts associated with Lessee's business ("Lease"), and NOW, THEREFORE, for valuable consideration and by mutual consent of the parties, the prior Lease between the parties is hereby terminated in its entirety and replaced with a new lease as follows: 1. PREMISES. City does hereby lease to the Lessee the cart pad consisting of approximately 15,000 square feet of land ("Cart Pad") as set forth in Exhibit A, also referred to herein as ("Premises"), said exhibits attached hereto and incorporated by reference. The Premises are located upon real property commonly known as the Gold Mountain Golf Club (`Golf Club") legally described as Section 36, Township 24 N, Range 1 West, WM in Kitsap County, Washington. 2. TERM. The term of this Lease shall be for one (1) year commencing on January 1, 2018 (the "Commencement Date") and ending on December 31, 2018 (`Initial Term"). At the expiration of the Initial Term, this Lease will automatically renew for one year annual terms unless terminated as provided in Section 17 below. 3. CONSIDERATION. (a) Rent. Lessee shall pay annual rent of Thirteen Thousand Two Hundred Dollars ($13,200.00) (`base lease payment"), which includes utilities as set forth in Section 6 or the Lease, for its use of the Cart Pad payable in monthly installments on the first of each month during the term of this lease. In addition to the Base Lease Payment, Lessee shall pay a leasehold excise tax, pursuant to Subsection (c) below. (b) Consumer Price Index Adjustments. Beginning in January 1, 2019, the Base Lease Payment shall be adjusted every year during the term(s) of this Lease based upon the prior years' Consumer Price Index (CPI) for all urban consumers 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 2017 CPI index June to June every year (i.e. June 2017 - June 2018). The CPI adjustment shall occur on the following January 1 st of each year during the term of this Lease. Gold Mountain — Cart Pad Lease (c) Leasehold Excise Tax. In addition to the Lease Payment, Lessee shall pay a leasehold excise tax, pursuant to RCW 82.29A.030, on all Lease Payment amounts paid to the City, currently in the amount of 12.84 percent of the base Lease Payment and as may be adjusted pursuant to Ch. 82.29A RCW. Lessee shall pay the leasehold excise tax with the applicable lease payment. 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 Lessor harmless from the same. (d) Holding Over. If Lessee remains in possession of the Premises or any part thereof after the expiration or termination of this Lease without the express written consent of City, such occupancy shall be a tenancy from month-to-month at a rental in the amount of 100% of the Fair Market Value for renting the land and upon all the terms hereof applicable to a month-to-month tenancy. 4. USE OF PREMISES. (a) Cart Pad. The Lessee shall have the right to use the Cart Pad for the storage, maintenance and operation of its private golf cart rental business. (b) City's Use of Cart Pad. By mutual agreement of the Director of Parks and Recreation, or his or her designee and Lessee, portions of the Golf Pad may be used by the City for use associated with the need for overflow parking for events at the Golf Club. In no event shall the City be able to use the Golf Pad for overflow parking without at least 90 days notice to the Lessee. (c) Compliance with Laws. Lessee shall not use the Premises or any part thereof for any illegal purpose. Lessee shall not engage in any activity with respect to or on the Premises other than the express uses and purposed stipulated therein, without obtaining prior written consent from the City, which consent can be withheld for any reason. Lessee agrees to conform to municipal, county, and state codes, statutes, ordinances, and regulations concerning the use and occupation of the Premises. 5. ADDITIONAL TERMS AND CONDITIONS. (a) Management of Lease. The management of this Lease relating to the day to day operations and use of the Cart Pad by Lessee will be by and through the Operator of the Golf Club as authorized and directed by Lessor. The contact for the Operator is: sm Mark Knowles Columbia Hospitality 360-415-6872 7263 West Belfair Valley Road Bremerton, WA 98312 (b) Cart Rental. Lessee will rent its carts to City on an as needed basis at $25 per 2 Gold Mountain — Cart Pad Lease (e) Cart Washing. Lessee will wash its carts in a different location (opposite of first tee -box Cascade). Lessee will locate the washing area away from the first tee box. (d) Tents. Lessee will power -wash the tent structures as necessary. (e) Fence. Lessee will maintain, at Lessee's expense, the six (6) foot wooden fence previously installed by Lessee (as identified on Exhibit A) to mostly visually block carts, etc. from the view line of parking lot. 6. UTILITIES. The City agrees to provide and pay all charges for electricity, water, sewer, gas/propane, garbage, telephone, and for all other public utilities used at the Premises. The City shall not be responsible for failure of provision of these services unless said failure is due to nonpayment for services. 7. ALTERATIONS AND ADDITIONS. Lessee shall not make or allow to be made any alterations, improvements, or changes to or of the Premises or any party thereof without the prior written consent of City, and all improvements, alterations, or changes so made, shall become a part of the leased Premises and shall belong to City upon expiration or sooner termination of this Lease unless otherwise agreed to by the parties. With respect to such alterations, improvements or changes to the Premises requested by Lessee, City's consent shall not be unreasonably withheld. In the event City consents to the making of any alterations, additions, or improvements to the Premises by Lessee, the same shall be made by Lessee at Lessee's sole cost and expense, the Premises and Lessee's leasehold interest therein shall remain free from any lien of any kind whatsoever, and construction of such alterations, additions or improvements shall be done in compliance with all laws and governmental requirements. 8. MAINTENANCE AND REPAIRS. (a) The City's Repairs. 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 unless the premises suffers damage as a result of actions or inaction by the City. (b) Lessee's Repairs, Alteration, Maintenance and Replacement. (i) Lessee shall, at its sole cost and expense, keep and maintain the Property and all improvements (regardless of ownership) in good order and repair, in a clean, attractive, and safe condition. City and Lessee agree that the current condition of the premises is satisfactory. (ii) All additions, repairs, alterations, replacements or changes to the Property and to any improvements on the Property shall be made in accordance with, and ownership shall be governed by, Section 7, above. 9. LIENS. Lessee shall keep the Premises, Lessee's leasehold interest therein and the Building and Land on which the Premises are situated free from any liens arising out of any work performed, materials furnished, or obligations incurred by Lessee. 10. INDEMNIFICATION. Lessee shall indemnify, defend and hold City harmless from all loss damage, liability or expense resulting from any injury to any person or any loss of or 3 Gold Mountain — Cart Pad Lease damage to any property caused by or resulting from any act or omission of Lessee or any officer, agent, employee, guest, invitee or visitor of Lessee in or about the Premises, but the foregoing provision shall not be construed to make Lessee responsible for injuries to third parties caused by the negligence of City or any officer, agent, employee, guest, invitee or visitor of City. City shall not be liable for any loss or damage to person or property sustained by Lessee, or other persons, which may be caused by theft or any act of negl&t of any Lessee, or of any other person, or by any other cause, unless caused by the sole negligence of City or its officers, licensees, agents, employees, guests, invitees or visitors. 11. LIABILITY INSURANCE; HAZARD INSURANCE. (a) Liability Insurance. Lessee, at its own expense, shall provide and keep in force with companies acceptable to City 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 City with a certificate of such policy within thirty (30) days of the Commencement Date of this Lease and whenever required shall satisfy City that such policy is in full force and effect. Such policy shall name City as an additional insured and shall be primary and noncontributing with any insurance carried by City. The policy shall further provide that it shall not be canceled or altered without twenty (20) days prior written notice to City. (b) Hazard Insurance. Throughout the term of this Lease, City shall procure and maintain fire, hazard and extended coverage insurance on the Premises. Should the premises become uninhabitable due to loss or become uninhabitable for any other reason the City shall have the option of terminating this lease. 12. DAMAGE OR DESTRUCTION. In the event the Premises are damaged to such an extent as to render the same unusable in whole or in substantial part, or are destroyed, Lessee shall give City or City's agent immediate written notice thereof, and it shall be optional with City to repair or rebuild the same. City shall have not more than thirty (30) days after date of such notification to notify Lessee in writing of City's intention to repair or rebuild the Premises, or the part so damaged and, if City elects to repair or rebuild Premises, City shall prosecute the work of such repairing or rebuilding without unnecessary delay, and during such period the rent of the Premises shall be abated in the same ratio that that portion of the Premises rendered for the time being unfit for occupancy shall bear to the whole of the Premises. If City shall fail to give the notice aforesaid, Lessee shall have the right to declare this Lease terminated by written notice served upon City or City's agent. In the event that there is not sufficient insurance to pay for the repair or rebuilding of any damaged structure, then the City, in its sole discretion, may terminate this Lease. Provided, however, prior to terminating the Lease for this reason, the City shall discuss with the Lessee other ways to provide for the funding shortfall, but such will not prohibit the City from terminating the lease. 13. PERSONAL PROPERTY. Where furnished by or at the expense of Lessee, all movable property, furniture, furnishings and trade fixtures, other than those affixed to the Premises so that they cannot be removed without material damage, shall remain the property of and be removable by Lessee, and in case of damage by reason of such removal, Lessee shall restore the Premises to good order and condition. Lessee shall pay or cause to be paid before delinquency any and all taxes levied or assessed and which become payable during the term 4 Gold Mountain — Cart Pad Lease hereof upon all Lessee's improvements, equipment, furniture, fixtures, and other personal property located in the Premises. 14. ENTRY BY CITY. At any and all reasonable times during regular business hours, upon one (1) day's prior notice to Lessee, City reserves and shall have the right to enter the Premises to inspect the same a reasonable number of times, to submit the Premises to prospective purchasers or Lessees, to repair the Premises without abatement of Rent, and may for the 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 Premises 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 Premises, and any other loss occasioned thereby, if City shall have taken every reasonable measure to avoid any such injury, 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 Premises in an emergency, without liability to Lessee except for any failure to exercise due care for Lessee's property, and any entry to the Premises 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 Premises or an eviction of Lessee from the Premises or any portion thereof. 15. ASSIGNMENT AND SUBLETTING. Lessee shall not either voluntarily or by operation of law assign, transfer, mortgage, pledge hypothecate, or encumber this Lease or any interest therein and shall not sublet the Premises or any part thereof or any right or privilege of Lessee thereto or allow any person (the employees, agents, servants, and invitees of Lessee excepted) to occupy or use the Premises or any portion thereof, without the prior written consent of City, which consent by City shall not be unreasonably withheld. Any such assignment or subletting without compliance with the terms of this paragraph shall be void and shall, at the option of City, constitute a default under the terms of this Lease. If Lessee is a corporation, any transfer of this Lease from Lessee by merger, consolidation, or liquidation or any change in the ownership or power to vote in the majority of the outstanding voting stock of Lessee shall constitute an assignment for purposes of this paragraph. Consent to one assignment, subletting, occupation, or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation, or use by another person. Consent to any such assignment or subletting shall in no way relieve Lessee of any liability under this Lease. City may assign the Rent herein provided to any person, partnership, corporation, or bank, and Lessee agrees when notified in writing by the assignee of such assignment to make the Rent payments to assignee under the terms of said assignment. lb. LESSEE'S DEFAULT. In case of violation of this Lease 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. Any default in the payment of monies due under any provision of this Lease shall be cured within 10 days. 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 Gold Mountain — Cart Pad Lease covenants, agreements, or conditions 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 Premises 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. 17. REMEDIES ON DEFAULT. (a) Termination and Re-entry. This Lease can be terminated for good cause. Good cause shall mean any of the following; (i) failure to timely cure a default of this Lease after notice as provided in Section 16 above, (ii) termination or expiration of this Lease between the City and the Lessee, (iii) lack of sufficient insurance proceeds to rebuild or repair the facility after damage or destruction; (iv) insolvency of the Lessee, or the appointment of a receiver to administer its financial affairs, or (v) any reason specified elsewhere in this Lease, or the attachments hereto, that is designated as grounds for termination. (b) Termination for convenience. Following the expiration of the Initial term as defined in Section 2 above, either party can terminate this lease for convenience upon one hundred twenty (120) days notice to the other party. Such notice shall be in writing and delivered to the address provided herein. Upon the termination of the Lease, the Lessee shall vacate the Premises, and the City may immediately reenter and take possession of the Premises without the necessity of a court order to do so. (b) Costs of Recovery. Lessee agrees to pay City the cost of recovering possession of the Premises, the expense of reletting, and any other costs or damages arising out of Lessee's default including, without limitation, the costs of removing persons and property from the Premises, the costs of repairing or altering the Premises for reletting, brokers' commissions, and legal expenses and fees. Notwithstanding any termination, reentry, or reletting, the liability of Lessee for the Rent and Additional Rent for the balance of the term of this Lease shall not be extinguished and Lessee shall pay and City may recover from Lessee at the time of termination, reentry, or reletting, the excess, if any, of the amount of the Rent reserved in this Lease for the balance of the term hereof over the then reasonable rental value of the Premises for the same period. Reasonable rental value shall mean the amount of rental which City does or could reasonably be expected to obtain as rent for the remaining balance of the Lease term. (c) Removal of Personal Property. In the event of a retaking of possession of the Premises by City, Lessee shall remove all personal property located thereon and upon failure to do so upon demand of City, City may remove and store the same in any place selected by City, including but not limited to a public warehouse, at the expense and risk of Lessee. If Lessee shall fail to pay the cost of storing any such property after it has been stored for a period of thirty (30) days or more, City may sell any or all of such property at a public or private sale and shall 6 Gold Mountain — Cart Puri Lease apply the proceeds of such sale first to the cost of such sale, secondly to the payment of the charges for storage, if any, and thirdly to the payment of any other sums of money which may be due from Lessee to City under the terms of this Lease, and the balance, if any, to Lessee. Lessee hereby waives all claims for damages that may be caused by City's lawfully reentering and taking possession of the Premises or lawfully removing and storing the property of Lessee as herein provided and will save City harmless from loss or damages occasioned by City thereby, whether such lawful reentry shall be considered or construed to be a forcible entry. (d) Remedies Cumulative. The remedies hereinafter described shall be cumulative and City shall be entitled to pursue any other remedy now or hereafter available to City under the law or judicial decisions of the State of Washington. 18. HAZARDOUS SUBSTANCES. Except as disclosed on an annual basis to the City, 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 Premises. Lessee shall indemnify, defend and hold 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 Premises 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. 19. GENERAL PROVISIONS. City and Lessee agree to the following general provisions: (a) 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, the losing party agrees to pay all reasonable costs and attorney fees in connection therewith. It is agreed that the venue of any legal action brought under the terms of shall be in Kitsap County. (b) Insolivency. In the event that the Lessee shall become insolvent or go into bankruptcy, this Lease may be canceled at the option of the City without notice, and the City may take immediate possession of the Premises and the whole thereof and the same shall not become an asset in bankruptcy. (c) 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. (d) Waiver. Failure to insist upon strict compliance with any terms, covenants or conditions of this Lease shall not be deemed a waiver of such, nor shall any waiver or relinquishment of such right or power at any time be taken to be a waiver of any other breach. (e) Binding Effect. This Lease shall be binding upon the heirs, successors, assigns and all other parties legally empowered with signatory rights of any or all of the parties hereto. 7 Gold Mountain — Cart Pad Lease (f) Paragraph Headings. The paragraph or section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof. (g) Severability. Any provisions of this Lease which shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provision shall remain in full force and effect. (h) Previous Agreements Superseded. The terms and conditions of this Lease supersede the terms, obligations and conditions of any existing or prior agreement between the parties regarding the subject matter of this Lease. (i) Entire Agreement. This Lease, including the exhibits and statutes referenced herein contain the entire agreement between the Parties and are the embodiment of all written or oral representations between the parties hereto. (j) Amendments. This Lease may be amended at any time only by written agreement signed by the parties. (k) Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. (1) Recordation. Neither City nor Lessee shall record this Lease, but a short form memorandum hereof may be recorded at the request of City. (m) Quiet Possession. Upon Lessee paying the Rent reserved hereunder and performing all of the covenants, conditions, and provisions on Lessee's part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term hereof, subject to all the provisions of this Lease. The Premises are leased subject to any and all existing encumbrances, conditions, rights, covenants, easements, restrictions, rights-of-way, and any matters of record, applicable zoning and building laws, and such matters as may be disclosed by inspection or survey. (n) Execution. This Lease may be executed in several counterparts, each of which shall be deemed an original instrument. (o) Notices. All notices to be given hereunder shall be in writing and shall be personally delivered and receipt acknowledged, sent by United States certified mail, return receipt requested, sent by facsimile, with original delivered within three (3) days, or sent by overnight delivery through public or private service, delivery charge prepaid, and addressed to the party at the respective mailing address as herein set forth. To City: Director of Parks and Recreation City of Bremerton 345 6th Street, Suite 100 Bremerton, WA 98337 8 Gold Mountain — Cart Pad Lease To Lessee: Scott Alexander Alexander Cart Rentals, Inc. 3410 Circle Way Bremerton, WA 98312 It is understood that each party may change the address to which notice may be sent by giving a written notice of such change to the other party hereto in the manner herein provided. (p) Lessee's Corporate Authority. Lessee is a Washington Limited Liability Company, and each individual executing this Lease on behalf of said LLC represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with a duly adopted resolution of the board of directors of said corporation or in accordance with the bylaws of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. Lessee further represents and warrants that it is fully registered and qualified to do business in the State of Washington. IN WITNESS WHEREOF the parties hereto have executed this Lease on the date set forth below. CITY OF BREMERTON GREG EELER, Mayor DATE:-3-'Z—'201S APPROVED AS TO FORM: RO 'ER A. LUBOVICH, City Attorney ALEXANDER CART RENTALS, INC. By: SWTT ALEWDER Its: DATE: Z -2 Z Z�' ► R:\Legal\Legal\Files\CUrsent Active Files\Gold Mountain\Cart Pad Leases\Cart Pad Lease 2018.doc (Notary Acknowledgment on Next Page) 9 Gold Mountain — Cart Pad Lease STATE OF WASHINGTON ) ) ss. COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that Greg Wheeler is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he was authorized to execute the instrument, and acknowledged it as the 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. �' • • • • • • . �s NOTARY PUBLIC in for the State of • 's Washington, residing at BC�fiY1CX"rC�l . • NOTARY PUKIC My commission expires -1 /lar-�O • COMM. EX • PiRES JULY 6, 2020 STATE ��P• ? N ) 11i.s ) ss. COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that Scott Alexander is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument, and acknowledged it as the of Scott Alexander's Golf Shop, Inc. to be the free and voluntary act of such Corporation for the uses and purposes mentioned in the instrument. DATED: (--ek 22 ZG )2 �- " �V� • c.cG�id�IJv�-- NOTARY PUBLIC 2d fo.tr the State of Washington, residing at Pay--E-r) � � My commission expires`1 /15/2.OI I tiGURS 1z . i s 01AR Y • • _ .;� j,�• 9-9.��.Q�a;�p OF'WPAX 10 Gold Mountain — Cart Pad Lease