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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/20/2008 - SECOND READING OF ORDINANCE NO. 048, 2008, AUTHORI ITEM NUMBER: 13 AGENDA ITEM SUMMARY DATE: May 20, 2008 FORT COLLINS CITY COUNCIL STAFF: John Stokes Daylan Figgs SUBJECT Second Reading of Ordinance No. 048,2008,Authorizing the Lease of a Portion Of Running Deer Natural Area To Hageman Earth Cycle, Inc. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY Running Deer Natural Area was purchased in 3 transactions between 1998 and 2000. Included in the purchase was a 15-acre parcel leased to Hageman Earth Cycle by the previous owners for the operation of an organic material drop off site, material processing, and sale of landscape products. This portion of Running Deer has been leased to Hageman Earth Cycle since 2001. This Ordinance, unanimously adopted on First Reading on May 6,2008,authorizes a new lease for one year with up to nine renewals. Since adoption on First Reading,staff has reviewed and revised the proposed Lease Agreement with Hageman Earth Cycle, in order to more fully address concerns that were raised in the Council's discussion of the item. In addition to clarifying that the Lease may only be renewed by mutual agreement, the Lease Agreement has also been modified to more specifically outline the requirements for stormwater planning and improvements on the Premises, and to set an interim deadline for that process. In addition,the Lease Agreement has been revised to make clear that any composted materials brought to the Premises must be from a legally compliant composting facility. Finally,a term has been added to the Lease requiring Hageman Earth Cycle,Inc.,to provide a written report to the City upon request, regarding the actions taken by Hageman to identify and arrange for use of one or more relocation sites for Hageman's operations on the Premises and adjoining property. In addition, the Ordinance has been revised to direct the City Manager to at least annually review the status of compliance with lease and regulatory requirements and efforts by the Lessee to identify and arrange for a relocation site, and to report the outcome to the Council. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- May 6, 2008. (w/o original attachments) 2. Lease Agreement ATTACHMENT ITEM NUMBER: 25 AGENDA ITEM SUMMARY DATE: May 6, 2006 FORT COLLINS CITY COUNCIL FF: John Stokes Daylan Figgs SUBJECT First Reading of Ordinance No. 048, 2008, Authorizing the Lease of a Portion Of Running Deer Natural Area To Hageman Earth Cycle, Inc. RECOMMENDATION The Land Conservation and Stewardship Board recommended in a 4-3 vote that City Council not approve the lease to Hageman Earth Cycle. The Natural Resources Advisory Board recommended in a 6-2 vote that City Council approve the lease to Hageman Earth Cycle. Staff recommends this lease appro d for e n asons: environmental issues and concerns are addressed with th rms a le Hagem Earth Cycle will pay a fair market lease rate. FINANCIAL IMPACT Hageman Earth Cycle will pay an annual rate of$18,480 ($1540/month)the first year of the lease. The lease rate will increase 4% annually. There will be a modest amount of staff time devoted to lease-related administrative duties. EXECUTIVE SUMMARY Running Deer Natural Area was ase tr doYEC n 1998 and 2000. Included in the purchase was a 15-acre pUhe o Ha y the previous owners for the operation of an organic mater ite, a rond sale of landscape products. This portion of Running Deerle d a manle since 2001. The term of the new lease is for one year with up to nine renewals. BACKGROUND Running Deer Natural Area was purchased in 3 transactions between 1998 and 2000. A 15-acre portion of the property was leased to Hageman Earth Cycle by the City of Fort Collins Natural Areas May 6, 2008 -2- Item No. 25 for a seven-year period from July 1,2001 through June 30,2008. Hageman Earth Cycle utilizes the lease area as part of an organic waste recycling service offered by its business. As the only organic waste recycling business for public use in Fort Collins,Hageman Earth Cycle is responsible for the diversion of approximately 65,0 is of- m waste stream destined for the land fill. No other organic m rial off s i to e in Fort Collins. Other activities allowed in the lease include th torage d sal f scape oducts. The initial five-year lease period was intended to provide transition time for Hageman Earth Cycle to relocate to a new location. As additional two-year lease was approved in 2006 to allow additional time for relocation. Past correspondence indicates clearly the City's desire for Hageman's Earth Cycle to relocate. However, Hageman has not been able to transition to a new location and has requested a renewal of the lease. In addition to the fact that Hageman's Earth Cycle has not been able to move, this lease has been challenging for other reasons. Environmental concerns including dust complaints and suspected soil and water contamination have been raised in past years. In November 2007, the Colorado Department of Public Health and Environment (CDPHE) cited Hageman Earth Cycle for composting without a permit. While the citation was resolved between Hageman and CDPHE, it did emphasize the need to assess current environmental conditions and to determine if historic or recent operations have resulted in an` adverse impact to the site. A Limited Phase II Enviro ntal A ssme Y rom December 2007 through January 2008 to examine wa ands con ion . Five groundwater wells, 3 composite soil samples, and 2 s efwa at wer . Based on field observations and a review of the laboratory results, there is no evidence that groundwater at the site has been adversely impacted by metals, volatile organic compounds (VOC's), semi volatile organic compounds(SVOC's),organochlorine pesticides(OCP's),organophosphorous pesticides(OPP's), nitrate-nitrite, or fecal coliforms. While select metals, VOCs, SVOCs, OCPs, nitrate-nitrite, and fecal coliforms compounds were detected in pools of surface water/leachate it does not appear that these compounds are infiltrating into underlying groundwater at the site,based on the results of this assessment work. No significant concerns were identified in the Phase II report. To continue to monitor the ground water in the area and to prevent the movement of soil and water offsite several conditions were placed in the lease. The Lessee must design a Stormwater Management Plan consistent with the standards established in the Urban Drainage and Flood Control Manual,Volume 3,(the"Standards")which is published by the Denver Urban Drainage and Flood Control District. The Plan will include a descr' ion o face a r tr s terns designed, constructed and maintained to accomplish each d all o e foil 1)m ge and accommodate flow onto the Property during peak discharge 25- , 4- storm nt and a 100-year,24-hour storm event; and(2)control and collect the onfite run-off water volume resulting from a 25-year,24-hour storm event on the Property and a 100-year, 24-hour storm event on the Property; and (3) contain and manage leachate that is generated when precipitation comes in contact with materials maintained on or in the vicinity of the Property or in any way by Lessee; and(4)a 100-foot buffer (or other dimension as the City determines to be appropriate upon review and consideration of the Stormwater Management Plan) must be planted with native vegetation constructed around the existing wetlands located adjacent to the Property and depicted on an attached map; and, (5) all May 6, 2008 -3- Item No. 25 leachate collection structures must be constructed of compacted or in-situ earthen materia4or other low permeability materials to achieve hydraulic conductivity of less than or equal to 1 x 10 cm/sec. The Plan shall be developed under the direction of a professional engineer and submitted to the City for review and approval prior to, e ' rov ents required by the Plan. All improvements must be approv and b O b 008 or by such other date as the parties mutually agree is acce ble. In addition to the lease terms discussed above, the lessee will be required to obtain any permits, licenses, or other approvals or grants of authorization required in order to conduct its activities. Further,this lease does not allow for the composting or dyeing of material on site and all composted material stored for sale must originate from a permitted composting facility. Also, the lessee will be required to collect and analyze soil and water samples on an annual basis in an effort to monitor environmental conditions of the lease area. Sample locations will be identified by Natural Area staff and all analysis will follow appropriate EPA methodology. Prior to the end of the lease, the lessee will be required to remove all personal property or improvements, including all foundations, slabs, and fences, fill and level any excavations, and restore the ground to a condition that is level and free and clear of debris or other materials. This lease is a one year lease w' tOOwk a t a in place the full term, it will enable Hageman Earth Cycle t ontinti fa p 'o of 10 years. Benefits include the continued diversion of approx ately 6is ards of o anic waste from the landfill on an annual basis. The 10-year lease al lessee 10 years to recoup the financial costs of the required surface water control system and other improvements outlined in the lease. It also allows staff to focus on managing the lease with the understanding that Hageman Earth Cycle may be on site for a 10-year term. The Natural Areas Program has estimated that restoration of currently owned Natural Areas will take approximately twenty years to accomplish, and the restoration of the lease parcel has not been scheduled to occur during the maximum term of the lease. While the property is occupied by Hageman,the maintenance requirements for the City will be reduced as a result of Hageman's use and maintenance of the property. In addition,the interim use will generate revenues for the Natural Areas program. Staff has recommended against sale of the property to Hageman, as the long-tern objectives of preserving this property are important and will be met by the City's continued ownership and eventual restoration of the lease area. Several different options were d' d th C e on and Stewardship Board and the Natural Resources Adviso Boar etin s the options are discussed below. 1. Sale of the 15-acre lease Ha C cle. oral Resources staffrecommends against selling the lease area to Hageman Earth Cycle. Some of the long-term environmental reasons for this recommendation include: the close association with wetlands on Running Deer Natural Area;shallow depth to ground water(and the potential for contamination);and potential movement of material stored on Hageman to the Poudre during flood events. While these issues can be mitigated in the mid-term, any development in this location for the long-term is undesirable. Also,this property was purchased as a Natural Area as part of May 6, 2008 -4- Item No. 25 a planned gateway to the City. Future development in this area is likely to be employment and research and development related. 2. Shorter-term lease. Thi w p the suggestion of developing a multi-agency task for to id to t lut o organic waste recycling within Fort Collins. Natural R ources ff do n avor a s rter-term lease for several reasons. Primarily, Natural Res sta s believe— t site-based improvements and investments are financially feasible with a short-term lease. Natural Resources staff does not recommend continuing in a lease arrangement of any length without proper environmental controls. 3. Termination of the lease. (LCSB recommendation). While this recommendation would allow the Natural Areas Program to restore the lease area back to native vegetation,Natural Resources staff does not recommend it. Staff s understanding is that Hageman Earth Cycle has not been able to find a suitable local, relocation site. Thus, if Earth Cycle is unable to continue organic recycling operations, it is possible that for at least some period of time there would be no organic recycling options available to the public. Thus, approximately 65,000 cubic yards of organic material now being diverted would enter the landfill on an annual basis. 4. One-year lease with 9 resewals o ndation . This option places several conditions on ease dyes o en ncerns. The expense to Hageman for the design and cons ction o e sit ovement an be spread over a 10-year period. The lease can be tern by p so if o r viable organic recycling options become available the City and Hageman Earth Cycle can adapt to changing business conditions. This option maintains Natural Area ownership of the lease area and allows for the eventual restoration of the property to natural conditions. Natural Areas program plans for restoring the Property and making it available for public use do not call for restoration activity on the Property until after the proposed lease term. Organic recycling will continue to be provided to the public at this location during the term of the lease. ATTACHMENTS 1. Minutes from the Land Conservation and Stewardship Board meeting - April 9, 2008. 2. Minutes from the Natural Resources Advisory Board meeting- April 16, 2008. 3. Power Point presentation. ATTACHMENT May 14,2008 GROUND LEASE AGREEMENT THIS AGREEMENT("the Agreement"),is made and entered into this_day of 2008, by and between THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, (the "Lessor") and Hageman Earthcycle, Inc. (the "Lessee"). WITNESSETH: 1. The Pronertv. The Lessor owns that certain parcel of real property located in the County of Larimer, State of Colorado, which real property is described on Exhibit "A" attached hereto and incorporated by reference together with all improvements and appurtenances thereto(the "Property"). 2. Leased Premises. In consideration of the payment of the rent herein provided for and the keeping and performance of the covenants and obligations herein set forth, the Lessor hereby leases to Lessee and Lessee leases from the Lessor that portion of the Property as shown on Exhibit "B"attached hereto and incorporated herein by this reference(the"Premises"), subject to the terms and conditions set forth hereinafter. 3. As Is Condition of Premises. It is understood that Lessee has inspected the Premises and takes them"AS IS". Lessor shall have no obligation to make any changes,removals,or repairs of any kind. Lessee shall use the Premises only in the manner described in paragraph 7 hereof. Lessee has occupied the Premises since prior to the Lessor's ownership thereof, and the parties acknowledge and agree that all obligations of Lessee related to the condition of the Premises as set forth herein, are hereby deemed applicable to Lessee's entire occupancy of the Premises. 4. Rental Payment by Lessee. As of the date of this Ground Lease Agreement, Lessee shall pay monthly, in advance, as rental for the Premises the sum of One Thousand Five Hundred and Seventy Dollars ($1,570.00) to be paid on or prior to the first day of each month hereafter. Lessor shall increase the amount of rent due for the Premises in accordance with fair market rental rates for comparable property, not to exceed an increase of four percent (4%) in any year, if this Agreement is renewed or extended beyond the current period.Billing or acceptance by Lessor of any rental shall not imply a definite term or otherwise restrict either party from terminating this Agreement as provided in paragraph 5. Payment of rental specified herein is subject to a late payment charge of one and one-half percent (1.5%)per month (18% per annum), on balance past due over thirty (30) days. 1 5. Term. This Lease shall be for a period of the one(1)year beginning on July 1,2008, and ending on June 30,2009,subject to renewal as described herein. The Lease is renewable for up to nine(9)additional one(1)year terms by agreement of both parties. In order to renew the Lease, Lessee must provide written notice to Lessor no fewer than ninety(90)days prior to the expiration of the initial term of its desire to renew the Lease for an additional term, including written documentation that the facility is in compliance with any permits, licenses, or other approvals or grants of authorization required in order to conduct its activities on the Leased Premises ("Approvals") whether from the City of Fort Collins, Latimer County, an agency of the State of Colorado, or any other entity with applicable jurisdiction, and the requirements of this Lease. If Lessor desires,in its discretion,to renew the Lease in accordance with the request of Lessee,Lessor must provide written notice to Lessee of such renewal prior to the expiration of the Lease term, or the Lease will automatically terminate and Lessee shall have no further Lease rights hereunder. 6. Covenants. Upon Lessee's payment of the rent herein specified and upon Lessee's performance of the terms of this Agreement, Lessee shall at all times during this Agreement term peaceably and quietly enjoy the Premises without any disturbance from the Lessor or any person claiming through the Lessor except as otherwise expressly provided herein. 7. Permissible Use of the Premises. A. Lessee shall use and occupy the Premises for the sole and exclusive purpose of maintaining and operating thereon Hageman Earthcycle,Inc.,which may include: (1) accepting organic materials from the public such as soil, grass clippings, leaves, tree branches and similar materials, and manure, (2) processing such materials by grinding, chipping, and/or "bark dyeing," as hereinafter more specifically described, but not composting, into finished landscaping products, and(3) sale of landscape products. Lessee shall not use or allow the use of the Premises for any composting, as that term is or may in the future be defined in federal, state or local law. Lessee may sell and/or store on the Premises composting materials,provided that such materials originate from a facility that complies with all applicable regulations and legal requirements, including, but not limited to, applicable regulations of the Colorado Department of Public Health and Environment ("CDPHE"), if any. B. Lessee shall not allow the deposit or storage on the Premises of materials that have been treated with preservatives,including but not limited to chromated copper arsenate, creosote and pentachlorophenol. C. Lessee shall not accept or allow to be placed on the Premises any materials or substances or items other than those listed hereinabove and Lessee shall have an affirmative obligation to prevent the deposit of any materials, substances or items not so permitted, including but not limited to inorganic materials, any biohazards, any hazardous materials or other regulated materials or 2 substances,any food or restaurant waste,animal carcasses,containers with or without contents, or human wastes. D. Lessee shall not allow any dyeing activity or machinery on the Premises. E. Lessee shall not sublease, rent or otherwise make available the Premises to third parties for possession, occupation or use. F. The parties acknowledge that Lessee intends to invite or permit third parties to be present on the Premises for the purpose of depositing materials in accordance with this provision. Lessee acknowledges and agrees that Lessee shall be responsible for any damage, injury or other consequence resulting from the act or omission of any such invitee, or other person present on the Premises during the term of this Agreement. 8. Repairs, Maintenance, and Conduct. A. The Lessee, during the term of this Agreement, shall keep and maintain the Premises,including without limitation,the grounds and landscaping in good condition. The Lessee shall maintain the Premises in a clean and orderly and safe condition,and free of litter,debris,weeds,nuisances, and any unsightly or dangerous condition as required by the ordinances, resolutions, statutes and health, sanitary and police regulations and standards of the City of Fort Collins, the County of Larimer, State of Colorado, or other governmental authority with jurisdiction over the Premises. The Lessee shall neither permit nor suffer any violation of the same or any disorderly noise or nuisance about the Premises having a tendency to annoy or disturb persons not on the Premises to an extent that is unreasonable given the surrounding area and current or zoned uses. B. Lessee shall neither commit nor permit any damage,deterioration,littering or contamination of the Premises and shall notify the City promptly of any damage to the same. C. The Lessee shall not affix, erect or maintain on the Premises any sign or advertisement without first obtaining the Lessor's approval as to the sign or advertisement to be erected on the Premises. 9. Taxes, Assessments and Utility Charges. In the event that the Premises, or any portion thereof,shall,for any reason,be deemed subject to taxation,assessments or charges lawfully made by any governmental body, Lessee shall pay all such taxes, assessments and governmental charges when due. Lessee shall be responsible for payment of any utility services placed on the Premises by Lessee. Lessee shall be responsible for and shall pay for providing trash containers, placed on the Premises, of sufficient size to meet Lessee's reasonable needs and weekly trash removal services. 3 10. Insurance. Lessee shall maintain at all times during the term of this Agreement a "commercial general liability" insurance policy with a Combined Single Limit of$1,000,000.00 covering its activities hereunder, which policy shall name Lessor as an additional insured. Lessee shall also maintain at all times during the term of this Agreement a"commercial vehicle liability" insurance policy with a Combined Single Limit of $500,000.00 covering any vehicles used by Lessee on the Premises, and shall meet statutory requirements for the provision of worker's compensation insurance. A certificate of insurance for each of these policies shall be submitted to the City, at the time of signing of this Agreement. 11. Destruction of Premises. In the case of damage to the Premises by fire,flood,or any other such casualty, whether by act of God or nature or third parties, and if the damage renders the Premises untenantable in whole or part,then,at the Lessee's option,this Agreement shall cease and terminate and the rent shall be apportioned to the time of damage,provided,however,that if Lessee chooses not to terminate the Agreement,Lessee shall repair the damage with reasonable dispatch and there shall be no abatement or apportionment of the rent due to the damage. In determining what constitutes reasonable dispatch,consideration will be given to delays caused by strikes,adjustment of insurance or other causes beyond the Lessee's or the Lessor's control. 12. Encumbrances. Lessee shall pay all costs and charges for work done by it or caused to be done by it, in or to the Premises and for all materials furnished in connection with such work. In no event shall Lessee be entitled to cause or permit the establishment of any lien or other encumbrance on the Premises. 13. Requirements of Law. At all times during the term of this Agreement,Lessee shall observe and comply promptly with all then current laws,ordinances,resolutions,orders,covenants, restrictions,rules and regulations and standards of the federal,state and local governments,and of all courts or other governmental authorities having j urisdiction over the Premises or any portion thereof, whether the same are in force at the commencement of this Agreement or are in the future passed, enacted or directed. Lessee shall require compliance with the foregoing by all invitees or licensees present on the Premises through Lessee,and shall make diligent effort to prevent the violation of any such requirements by trespassers or any other persons present on the Premises during the term of this Agreement. Lessee shall be required to obtain any permits,licenses,or other approvals or grants of authorization required in order to conduct its activities on the Leased Premises ("Approvals") whether from the City of Fort Collins, Larimer County, an agency of the State of Colorado, or any other entity with applicable jurisdiction. The Lessor shall be entitled to documentation regarding any such Approvals upon request to Lessee. The Lessee shall provide to Lessor written copies of the Fugitive Dust Plan as approved by Larimer County prior to the beginning of the Lease Tenn, and shall provide to Lessor any renewal, modification, notice of termination or violation of the same, throughout the term of the Lease: 14. Environmental Concerns. Lessee shall not create or permit any condition on the Premises that could present a threat to human health or the environment. Lessor may at its option at any time conduct an environmental audit of the Premises,at Lessor's cost and expense,to determine if any environmental damage to the Premises has occurred during Lessee's occupancy thereof. The Lessee, at his or her sole expense, shall provide on an annual basis laboratory analysis for surface water/leachate samples and surface soil samples collected at sites determined by Lessor. Surface 4 water/leachate and surface soil testing must occur on the Premises on an annual basis as described herein. In any given year, surface water/leachate samples shall be analyzed for all or a portion as determined by Lessor in its sole discretion of the following: Dissolved target analyte list (TAL) metals by EPA Methods 6020/7470A.;Semi-volatile organic compounds(SVOCs)by EPA Method 8270; Volatile organic compounds (VOCs) by EPA Method 8260; Organochlorine pesticides (OCPs) and organophosphorous pesticides (OPPs) by EPA Methods 8081A and 8041A, respectively; Dissolved nitrate-nitrite and fecal coliforms by EPA Methods 353.2 and 9222D, respectively. In any given year,surface soil samples shall be analyzed for all or a portion as determined by Lessor in its sole discretion of the following: total TAL metals by EPA Methods 6020/7471A; Organochlorine pesticides (OCPs) and organophosphorous pesticides (OPPs) by EPA Methods 8081A and 8041A; Semi-volatile organic compounds (SVOCs) by EPA Method 8270. Additional analyses as determined by Lessor to be appropriate in light of the information available at the time of the sampling or analysis must also be performed at Lessee's expense. All detected metals, VOC's SVOC's, OCP's and OPP's, or any other analytes, will be reported as required by applicable CDPHE standards. Lessee shall pay all expenses for any further investigation or remedial action that may be required as a result of said audit or surface water/leachate and soil sample analysis, to investigate ascertain or correct any environmental concern or damage, and except as otherwise directed by Lessor, all necessary work shall be performed by Lessee immediately upon notice from Lessor of the need for further investigation or remediation. The foregoing obligation of Lessee to carry out work at the direction of Lessor shall not apply in the event that Lessee has proven to the satisfaction of Lessor, in its sole discretion: 1) that the potential environmental condition of concern was not caused or aggravated by the actions of Lessee or Lessee's use of or activities on the Premises;and 2)said environmental condition was not reasonably within Lessee's ability to prevent or control. Lessee must provide copies to Lessor of the results of any and all laboratory testing conducted in accordance with this paragraph. Further,Lessee must provide to Lessor copies of any and all laboratory personnel communications relevant to the testing required by this section, or communications with CDPHE or other regulatory or governmental entity regarding the Premises, Lessee's operations, or other related matters. 15. Stormwater Management Plan. The Lessee must design a Stormwater Management Plan(the"Plan")consistent with the requirements established in the Regulations Pertaining to Solid Waste Sites and Facilities, 6 CCR 1007-2, Part 1, by CDPHE. Specifically, the Plan must be prepared consistent with: 1)6 CCR 1007-2, Section 14.2.1 (Minimum Standards of Operation for All Composting Facilities); 2) Section 14.4.2 (Design and Operations Plan Requirements); 3) 6 CCR 1007-2, Section 14.4.3; and 4)any applicable local, state,or federal stormwater management regulations,ordinances or requirements.The Plan must include a a 100-foot(or such other length as Lessor determines is necessary upon Lessor's review and consideration of the Plan in draft form) vegetated buffer(or other structure or feature as approved by the Lessor)around the existing wetland located adjacent to the Property and depicted on the map that is marked as Exhibit C and incorporated herein by reference. The Plan shall include detailed specifications for said buffer or 5 other feature, including but not limited to the number, specific type and quality of vegetation to be planted, and a landscaping plan, all of which must be satisfactory to Lessor. The Plan shall be developed under the direction of a professional engineer and prepared and submitted to the Lessor for review and approval prior to construction of any of the improvements required by the Plan. Lessee must prepare and submit to Lessor for approval no later than July 1, 2008,a schedule for development and submission of the Plan to Lessor for review and approval,and for expected timing of construction of any related improvements. The Plan must be approved and all improvements called for in the approved Plan must be constructed no later than October 1, 2008, unless Lessor agrees in writing to extend the final date for completion. Lessee shall provide to Lessor as-built drawings accurately depicting the location and nature of the improvements no later than thirty (30) days following completion of the improvements. Lessee must at all times maintain the Property and operate all of Lessee's related operations in a manner consistent with the Plan to the extent possible until such time as the improvements called for in the Plan have been completed. Upon completion of such improvements,Lessee must at all times maintain the Property and operate all of Lessee's related operations in a manner wholly consistent with the Plan. 16. Default by Lessor. If the Lessor shall breach any of the conditions required to be performed by the Lessor under this Agreement,Lessee may elect to terminate this Agreement upon giving at least thirty (30) days notice to the Lessor of its intention to so do, in which event this Agreement shall terminate upon the date fixed in such notice unless the Lessor shall have meanwhile cured such default. Election by Lessee to terminate under this provision shall not be construed as a waiver of any of Lessee's rights as a non-defaulting party to such other remedies as may be available in law or equity. 17. Default by Lessee. If the rent provided for above, or any part thereof, shall be in arrears,or if default shall be made by Lessee in any of the covenants or agreements herein contained, the Lessor shall give to Lessee five (5)days notice to correct any default in the payment of rent,or to undertake performance which will cure any other default; and if said rent is not paid or cure commenced within the said five (5) day period, or if Lessee fails to diligently pursue the work thereafter required to cure such other default, or if Lessee allows any default to recur within 180 days of original default,it shall be lawful for the Lessor,at the Lessor's election,to declare Lessee's right of possession ended and to enter into the Premises,or any part thereof,and with process of law to expel,remove,and put out Lessee or any person or persons occupying the same,and to repossess and enjoy the Premises as in the first and former state of said Lessor,and in the event of such failure to correct said default. Lessee hereby covenants and agrees to surrender and deliver up the Premises peaceably to the Lessor upon notice of the termination under this paragraph, and to remove all personal property within twenty one (21) days of receipt of notice of termination. Lessee shall be responsible for the payment of all rents accrued during the twenty one(21)day period when personal property remains on the Premises, even if Lessee no longer has possession of the Premises. 18. Termination of Lease by Lessee Lessee may terminate this Agreement at will on thirty (30) days advance written notice. 6 19. Obligations at Termination. In the event the Lessee terminates this Lease as described herein,the parties do not renew the Lease as described herein,or the final renewal term,if any, expires by its terms on June 30, 2018, Lessee shall remove all personal property or improvements not owned by Lessor (regardless of their owner or source), including, without limitation,all foundations,slabs,and fences,and Lessee shall clear the Premises,including filling in and leveling any excavations,and restoring the ground to a condition that is level and free and clear of debris or other materials or substances deposited on the Premises by Lessee, prior to the termination of this Agreement, all at Lessee's expense. If Lessee fails to remove said property or improvements prior to termination, Lessee hereby grants the Lessor the absolute right to keep, convey, destroy, or otherwise dispose of the same in any manner Lessor chooses, and, in addition, Lessee agrees to pay any net costs incurred by Lessor in doing so,within ten(10)days of receipt of Lessor's statement therefor. If Lessee shall remain in the possession of the Premises after the termination of the Lease, Lessee shall be deemed guilty of an unlawful detainer of the Premises under the law and shall be subject to eviction and removal. 20. Lessor's Right to Enter the Premises. The Lessor,or its agents shall at all reasonable times, be permitted to enter upon the Premises, excluding the improvements, for the purpose of inspecting the Premises. 21. Assignment or Subleasing. This Agreement shall not be assigned or subleased by Lessee. 22. Holding Over. If after the expiration of the term of this Agreement, Lessee fails to surrender possession of the Premises, Lessee shall be deemed to be in default and subject to the default provisions set forth in Section 16, above. If any holding over on the Leased Premises by Lessee is determined to constitute a tenancy hereunder, such tenancy shall be deemed to be a week to week tenancy. Any personal property on the Premises shall become the property of the Lessor if it remains on the Premises after the termination of this Agreement. 23. Notices. Any notice by either party to the other shall be in writing and shall be deemed to be duly given only if delivered personally, or mailed by certified mail, return receipt requested, in a postage prepaid envelope addressed to the parties as follows: LESSEE: Roger Hageman Hageman Earthcycle Inc. 35012 East Prospect Street Fort Collins, CO 80525 LESSOR: City of Fort Collins Attention: Real Estate Services P.O. Box 580 Fort Collins, CO 80522 WITH A COPY TO: Natural Resources Director City of Fort Collins P.O. Box 580 Fort Collins, CO 80522 7 The addresses hereinabove set forth may be changed by either party by giving written notice to the other party of the change of address. 24. Attorneys' Fees. In the event that either party shall default under any of the provisions of this Agreement and the non-defaulting party shall commence litigation to enforce this Agreement,the defaulting party shall be liable for all costs,expenses and reasonable attorneys' fees incurred by the non-defaulting party concerning such litigation. 25. Indemnity. Lessee agrees to indemnify and hold harmless Lessor from any loss, damage, injury or death arising from any act or omission of Lessee, Lessee's invitees, licensees, employees, or agents, or from any default by Lessee under the terms of this Lease,to the person or property of the parties hereto and their employees,and to the person or property of any other person or corporation while on or near the Premises. 26. No Waiver. The failure of Lessor, at any time, to assert rights pursuant to this Agreement shall not constitute a waiver of the right of Lessor to make subsequent assertions of such rights. 27. Additional Obligations of Lessee. The parties acknowledge that Lessee owns property adjacent to the Premises, and that the actions of Lessee on said adjacent property may impact upon the condition on, under or over the Premises or City of Fort Collins Natural Area properties(the"City Natural Area")in the vicinity of the Premises. Consequently,as a condition of this Agreement,the default of which shall be grounds for action by Lessor as set forth in paragraph 17,above,together with such other legal or equitable remedies as may be available to Lessor,Lessee agrees as follows: A. In addition to complying fully with any and all applicable legal requirements associated therewith, Lessee shall carry out any tub grinder or other dust- generating operations, whether on or in the vicinity of the Premises, in a manner so as to avoid the emission or escape into the open air of smoke, ashes, dust, dirt, grime, acids, fumes, gases, vapors, odors or any other substances or combination of substances in such amounts or in such a manner as may cause inj ury or damage to the Premises or to the City Natural Area,or may endanger or tend to endanger the health, safety or welfare of persons using or at the Premises or the City Natural Area,or interfere with the normal use, operation or function of the City Natural Area. B. In addition to complying fully with any and all applicable legal requirements associated therewith, Lessee shall provide effective secondary containment adequate to prevent the flow or migration in any manner of any petroleum products, hazardous or toxic substances or waste, or any other product, substance or material not permitted on the Premises pursuant to paragraph 7, above, onto the Premises or the City Natural Area. 8 C. Lessee shall provide effective containment of surface water flow adequate to prevent the movement beyond the lease boundaries of any sediment, wood chips,or any other material deposited or stored on the premises. In addition, Lessee shall maintain the Premises,including containment structures such as constructed dikes, ponds, and channel excavations in a manner consistent with and conforming to documentation in Lessor's possession until such time as the Plan referenced in paragraph 15 above is approved by Lessor. If Lessor approves the Plan,Lessee shall begin to and continue to maintain the Premises,including containment structures such as constructed dikes,ponds, and channel excavations in a manner consistent with and conforming to the Plan at all times thereafter. D. Lessee must provide to Lessor promptly upon request a written status report providing current information regarding the actions taken by Lessee on the Premises and in performance of the terms and conditions of this Agreement. In addition, Lessee must provide to Lessor promptly upon request a written status report providing current information regarding the actions taken by Lessee to identify and arrange for use of one or more relocation sites for Lessee's operations on the Premises and adjoining properties. 28. Miscellaneous. A. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Colorado. B. All obligations of the Lessor hereunder are expressly contingent upon the annual appropriation of funds sufficient to carry out the same by the City Council of the City of Fort Collins. C. In construing this Agreement, feminine or neuter pronouns shall be substituted for those masculine in form and vice versa, and plural terms shall be substituted for singular and singular for plural in any place in which the context so requires. D. The covenants,terms,condition,provisions and undertakings in this Agreement shall extend to and be binding upon the heirs,executors, administrators,successors,and assigns of the respective parties hereto as if they were in every case named and expressed and shall be construed as covenants running with the land. Wherever reference is made to either of the parties hereto, it shall be held to include and apply also to the heirs, executors, administrators, successors, and assigns of such party as if in each and every case so expressed. E. The captions of paragraphs in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit 9 or describe the scope or intent of this Agreement or of any provisions herein. F. This Agreement contains the entire agreement between the parties and cannot be changed or terminated orally,but only by an agreement in writing signed by the parties hereto. G. If any provisions of this Agreement shall be declared invalid or unenforceable,the remainder of this Agreement shall continue in full force and effect. H. The persons who have executed this Agreement represent and warrant that they are duly authorized to execute this Agreement in their individual or representative capacity as indicated. I. To the extent necessary to effectuate the intended rights and obligations of the parties hereto, the obligations of the Lessee to indemnify or hold Lessor harmless hereunder,and the rights granted to Lessor hereunder in the event of a default or failure of Lessee to comply with the terms of this Agreement, shall survive the termination of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Ground Lease Agreement, as of the date first written above. LESSEE: By: Name: Title: LESSOR: CITY OF FORT COLLINS,COLORADO, a Municipal Corporation By: Dann A. Atteber y, City Manager 10 ATTEST: APPROVED AS TO FORM: City Clerk Assistant City Attorney 11 ORDINANCE NO . 048 , 2008 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE LEASE OF A PORTION OF RUNNING DEER NATURAL AREA TO HAGEMAN EARTH CYCLE, INC . WHEREAS , in 1998 through 2000, the City of Fort Collins purchased certain land known as Running Deer Natural Area (the "Natural Area") for its Natural Areas program; and WHEREAS, a portion of the Natural Area has previously been occupied and used by Hageman Earth Cycle, Inc . ("Hageman") for the deposit and storage of tree limbs, leaves, and other yard waste and organic materials for composting, mulching and other reuse ; and WHEREAS , the City has, in the acquisition of natural areas , established a practice of working with pre-existing users and tenants of acquired property in transitioning the properties to public natural area ownership ; and WHEREAS , pursuant to this practice and to City Council ' s authorization in Ordinance No. 85 , 20011 the City previously leased to Hageman that portion of the Natural Area shown on Exhibit "A" (the "Lease Area"), in order to continue its use of that property for the above- referenced purposes ; and WHEREAS , by adoption of Ordinance No. 48 , 2006, the City later extended the lease to Hageman of the Lease Area for an additional two-year period; and WHEREAS , in leasing the Lease Area to Hageman, the initial lease term of five years and the extension of an additional two years was intended to allow sufficient time for Hageman to transition its operations to a new location; and WHEREAS , Hageman has not relocated its operations as anticipated, and has requested an additional one-year lease with the option to extend the lease for nine one-year terms ; and WHEREAS , City staff has negotiated with Hageman a proposed lease agreement similar to the existing lease agreement but with several additional lease terms and conditions designed to ensure that no adverse environmental impact occurs, to protect ground water in the area, and to prevent the movement of soil and water from the Lease Area; and WHEREAS , the lease agreement negotiated with Hageman and containing such provisions, dated May 14, 2008 , is on file in the Office of the City Clerk and available for public inspection (the "Lease Agreement") ; and WHEREAS the Lease Agreement establishes an initial one-year term with nine possible one-year extensions, subject to approval by the City, for a monthly rental amount of $ 1 , 540 for the initial term; and WHEREAS , the Natural Areas program has a limited annual budget for restoration of properties and the restoration of the Lease Area is not a high priority among the properties to be restored; and WHEREAS , the interim use of the Lease Area as described herein, in exchange for payment of the required monthly rent and maintenance of the Lease Area by Hageman during the term of the lease, together with the eventual restoration of the Lease Area will further, rather than interfere with or impair, the City ' s long-term intended uses of the Lease Area; and WHEREAS, City staff has also determined that the lease rate of $ 1 , 540 per month is consistent with the approximate fair market lease rate for comparable property; and WHEREAS, pursuant to Section 23 - 114 of the Code of the City of Fort Collins, the Council is authorized to lease any and all interests in real property owned in the name of the City, provided that Council first finds that the lease is in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows : Section 1 . That the lease by the City of the Lease Area to Hageman, under the terms and conditions set forth herein and in the Lease Agreement, is in the best interests of the City of Fort Collins . Section 2 . That the City Manager is hereby directed to at least annually review the status of Hageman ' s compliance with the terms and conditions of the related regulatory requirements, as well as the efforts by Hageman to identify and arrange for a relocation site, and to report the outcome of such review to City Council, which report should include a statement as to whether the lease is being renewed for an additional year. Section 3 . That the City Manager is hereby authorized to enter into the Lease Agreement-, togetirerin the form on file in the office of the City Clerk, with suchany other rued provisions determined by the City Manager, in consultation with the City Attorney, to be necessary and appropriate to protect the interest of the City by the eity Manager, in consultation with the eity Attorney, determines to be necessary and appropriate to protect the interests of the Cry, including any necessary changes to the legal description of the Property, as long as such changes do not materially increase the size or change the character of the leased premises, and is further authorized to extend the term of the same for the full potential term of ten years, as provided herein. -2- Introduced, considered favorably on first reading, and ordered published this 6th day of May, A.D . 2008 , and to be presented for final passage on the 20th day of May, A. D . 2008 . Mayor ATTEST : City Clerk Passed and adopted on final reading on the 20th day of May, A . D . 2008 . Mayor ATTEST : City Clerk - 3 -