HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/06/2017 - ITEMS RELATING TO THE LEASE FINANCING OF THE FIREHAgenda Item 21
Item # 21 Page 1
AGENDA ITEM SUMMARY June 6, 2017
City Council
STAFF
John Voss, Controller
Josh Birks, Economic Health Director
SUBJECT
Items Relating to the Lease Financing of the Firehouse Alley Parking Garage.
EXECUTIVE SUMMARY
A. First Reading of Ordinance No. 081, 2017, Authorizing the Leasing of Certain City Property and the
Execution and Delivery by the City of a Site Lease, a Lease Purchase Agreement, and Other Documents
and Matters in Connection with the Financing of the City’s Acquisition of Certain Parking Facilities; Setting
Forth Certain Parameters and Restrictions with Respect to the Financing; and Providing for Other Matters
Related Thereto.
B. First Reading of Ordinance No. 082, 2017, Appropriating the Lease Financing Proceeds in the Capital
Projects Fund to be Used for the Purchase of a Portion of the Firehouse Alley Parking Structure and to
Pay for Related Lease Financing Costs.
The purpose of this item is to authorize the financing and acquisition of the Firehouse Alley Parking Structure.
Total costs are projected to be $8,430,000. The City will acquire approximately 216 spaces located on the
second and third floors.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinances on First Reading.
BACKGROUND / DISCUSSION
City Council adopted Resolution 2015-101 on November 17, 2015, that approved a Construction and Purchase
Agreement for the City's purchase of parking spaces in the proposed Jefferson Street Parking Structure (now
called Firehouse Alley Parking Structure).
Project Overview
The public-private partnership has constructed a 3-level mixed-use parking structure with 335 parking spaces
and 2,988 square feet of retail space, located at the corner of Chestnut and Jefferson Streets, (the Project).
The Project is a public-private partnership between the City of Fort Collin and the developers of The Elizabeth
Hotel (Bohemian Companies, McWhinney, and Sage Hospitality - collectively the Developer). The structure
entry will be on Chestnut Street and the retail spaces will face onto Old Firehouse Alley. The Project will
contain all required vehicle and bicycle parking for the hotel.
Parking
The Project is designed as a three-bay structure with a central ramp for moving between floors. The central
ramp allows for the exterior of the structure on all four faces to have horizontal floors. This construction allows
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for an efficient use of the available footprint and a structure that addresses the streets and alley with a
consistent façade free of the impacts from the required ramps. The structure will be constructed above ground
with the exception of a short downward ramp on the first floor. The floor to ceiling height on the ground floor
will be higher to accommodate retail space facing the alley. The result is approximately 323 parking spaces
over three levels. (see Table 1)
Table 1
Parking Count By Floor and Type
Tier Standard Van Accessible Accessible Total
Ground 84 2 2 88
Second 117 0 2 119
Third 114 0 2 116
Total 315 2 6 323
Of the parking, 107 of spaces will be dedicated to The Elizabeth Hotel (approved by the Planning and Zoning
Board on August 10, 2015) and the remaining 216 spaces will be public parking managed by the City. The
hotel’s parking will include all of the ground floor with the balance of spaces located on the second floor. The
remaining spaces on the second and third level will be available for public parking. The ground floor will have
limited access for hotel patrons and staff only and will be used for hotel valet and general parking. The
remaining hotel spaces will be designated as “Reserved for Hotel Use” using signs on the second floor. (see
Table 2)
Table 2
Parking Count By Floor and Use
Tier Hotel Public Total
Ground 84 4 88
Second 23 96 119
Third 0 116 116
Total 107 216 323
Retail
The Project includes 2,988 square feet of retail facing Old Fire House Alley that will contain artisan and hotel
supporting retailers. This retail is located immediately across the alley from the Fort Collins Hotel bar and lobby
space and will create an active and vibrant alley. In addition, the Project includes the façade improvements for
a similar amount of retail along the Jefferson Street structure face. This retail will not be constructed during the
initial Project. This Jefferson Street facing retail will be reserved for future construction when nearby
development has created a more active pedestrian atmosphere along Jefferson Street. The City will be able to
drive the timing of this construction through an option specified in the purchase and sale agreement.
Design Considerations
The proposed design is a result of a thoughtful context-sensitive approach by the Developer. Although the
Project is outside of the Old Town Historic District, the design team utilized the Old Town Historic District
Design Standards to inform the building and site design. In addition, the design team referred to the River
District Design Guidelines for Structured Parking 6.25 thru 6.27 for guidance on design. The result is a
structure that bridges the industrial character of the River District to the historic character of the Old Town
Historic District.
The Project was reviewed and recommended for approval by the Landmark Preservation Commission (LPC)
on September 28, 2015 and approved by the Planning and Zoning Board on October 8, 2015.
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Downtown Public Parking Demand
The Parking Plan includes a Parking Demand Model that provides insights into future parking needs based on
existing and future land uses. This model, combined with additional staff analysis, generated an estimate of the
overall demand for additional public parking in the Downtown area. Table 3 (excerpted from the Parking Plan)
summarizes the estimate of future public parking demand over a 10-year period.
Table 3
Future Public Parking Demand: 10 Year Horizon
The analysis indicates a demand for approximately 910 spaces over the 10-year horizon with an additional 600
spaces needed to support a proposed 1,500 seat performance hall. Therefore, the Project as proposed meets
24 percent of the projected need for all future public parking demand and 43 percent of the demand from
background growth in demand as projected by the Parking Demand Model. The Project as proposed also
locates the 216 additional public parking spaces in one of the seven identified target areas within the Parking
Plan. Therefore, the Project aligns with the needs and locations identified within the Parking Plan for additional
public parking.
Partnership Structure
As recommended in the Parking Plan, this Project uses a Public Private Partnership to deliver additional public
parking in the Downtown area. In the proposed partnership, the Developer of The Elizabeth Hotel is
constructing the Project and when completed (anticipated in August 2017), the Developer will sell the City
approximately 216 parking stalls in two condominium spaces. The process is very similar to the approach used
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to construct the new Foothills Activity Center and the Council Tree Public Library. In addition, this approach
allows for the City to utilize tax-exempt financing.
Financing Overview
The financing method for the City’s acquisition of the parking spaces is a lease-lease back transaction with the
issuance of certificates of participation. The purchaser of the certificates of participation will be Vectra Bank
and the Senior Center is being used as the leased property in the lease-lease back transaction.
The Downtown Development Authority (DDA) has drafted an intergovernmental agreement (IGA) that City
Council will consider at its July 5, 2017, regular meeting. The DDA intends to contribute $300,000 a year
toward the lease payments beginning in 2019. The DDA Board is still considering the form of the IGA and is
expected to finalize and approve the IGA at their June meeting. In addition, after June 2018, monies being
used for the payment of the lease-purchase financing transaction for the Civic Center Parking Structure and
215 North Mason will become available to use for the lease payments under this lease-lease back transaction.
Closing on the financing package is scheduled for July 18 and the City’s acquisition of the parking spaces in
the structure is anticipated to occur in late August or September 2017.
CITY FINANCIAL IMPACTS
The lease-lease back financing transaction will provide $8.43 million of proceeds to be repaid over a term of 10
years at 2.48% interest. Lease payments, subject to annual appropriation, begin in 2018 and go through 2027
with average annual payments of $962,000. Beginning in 2019, the DDA is expected to contribute $300,000
annually to these lease payments. The rest will come from available monies after the final payment on the
lease-purchase financing transaction for the Civic Center Parking Structure and the 215 North Mason
administrative building, which final payment occurs on June 1, 2018. General Fund monies previously used for
those lease payments will be used for the lease payments under the lease-lease back transaction involving the
Senior Center.
BOARD / COMMISSION RECOMMENDATION
City Council Finance and Audit Committee discussed this item May 15, 2017.
ATTACHMENTS
1. Council Finance Committee minutes, May 15, 2017 (draft) (PDF)
2. Site Lease (PDF)
3. Lease Agreement (PDF)
4. Powerpoint presentation (PDF)
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Minutes (DRAFT)
05/15/17
10:00 am ‐ noon
CIC Room
Council Attendees: Mayor Wade Troxell, Gerry Horak, Ross Cunniff, Ken Summers
Staff: Mike Beckstead, Jeff Mihelich, John Duval, Travis Storin, John Voss, Tiana Smith,
Lawrence Pollack, Andres Gavaldon, Noelle Currell, Joanne Cech , Jackson Brockway,
Lance Smith, ,Josh Birks, Jackie Theil, Carrie Daggett, Laurie Kadrich
Others: Kevin Jones (Chamber of Commerce), James Manire First Southwest, Kathi Mathis TB
Group (Metro Districts)
Meeting called to order at 10:03 am
Ross Cunniff moved to approve Minutes for the April 28th Council Finance Meeting. Ross Cunniff seconded the
motion. Minutes were approved unanimously.
Ken Summer is proposed new Council Finance Committee member replacing Gerry Horak.
A. Parking Garage Financing
John Voss, Controller
Debt Financing ‐ received 5 proposals and selected Vectra Bank as best overall
First payment January 15, 2018
Final payment July 15, 2027
Average Annual Payment $962,000
Rate 2.48%
Callable at anytime with no prepay fee
Borrowing
Issue Costs* $ 80,000
Purchase Price 8,350,000
Total 8,430,000
Request is for an additional $55K ‐ from reserves in 2018
2018 General Fund Reserves ($902k in 2018 budget, need $55k more)
2019 and forward
General Fund ongoing $662,000
DDA contribution $300,000
ATTACHMENT 1
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Mike Beckstead; IGA is in process ‐ this was presented to DDA last week and they are supportive ‐ the
Firehouse Alley garage plan to continue 4 years beyond the debt service. Takeaway from retreat on Saturday ‐
fund balance presentation in July will be helpful.
James Manire, financial advisor from First Southwest; internal process ‐ externals include financing mechanism
which is a lease purchase structure ‐ this is how the bank views it. The City Senior Center as the existing asset in
this transaction which will allow us to generate the funds. We were pleased to get the 5 proposals and looking
forward to more lease purchase structured transactions.
Actions;
Mike to schedule a meeting with Ken Summers to bring him up to speed.
This is scheduled to come to Council as a leasing ordinance on June 6th for 1st Reading
and 2nd Reading will be July 5th
The closing is scheduled for July 18th
Mayor Troxell; good to go
B. Long Term City Debt Funding Needs ‐ Debt Service Planning
Travis Storin, Director of Account
John Voss, Controller
SUBJECT FOR DISCUSSION Debt Service Planning
EXECUTIVE SUMMARY There are several large projects being considered in the fifteen years that will likely need
debt financing. In an ideal world new debt service would perfectly dovetail with completion of other debt
service. Ongoing money is freed up when debt service discontinues. As the base case scenario shows, there is
simply not enough debt service ending to close the gap that may be caused by new debt service. The
presentation and discussion is intended to highlight the issues and propose some options to close the gap.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Should staff investigate refinancing of the 2012/2004 debt, related to police and natural areas, in an
effort to lower annual cash outflows?
2. Should staff plan on using General Government Capital Expansion Fees to lower the amount needed to
finance a new City Hall and as well as lower annual debt service?
3. Should staff draft the details of a program which sets aside money in the Budgeting for Outcomes
process?
4. Feedback on assumptions such as specific projects and project timing.
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Sarah P. Tasker, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Site and Improvement
Lease Agreement is exempt from the documentary fee.
SITE AND IMPROVEMENT LEASE AGREEMENT
DATED AS OF JULY __, 2017
BETWEEN
CITY OF FORT COLLINS, COLORADO
AS LESSOR
AND
U.S. BANK NATIONAL ASSOCIATION,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE,
AS LESSEE
ATTACHMENT 2
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This SITE AND IMPROVEMENT LEASE AGREEMENT, dated as of July __, 2017
(this “Site Lease”), is by and between the CITY OF FORT COLLINS, COLORADO, a home rule
municipality duly organized and validly existing under the Constitution and laws of the State of
Colorado (the “City”), as lessor, and U.S. BANK NATIONAL ASSOCIATION, Denver, Colorado, a
national banking association duly organized and validly existing under the laws of the United
States of America, solely in its capacity as trustee under the Indenture (the “Trustee”), as lessee.
PREFACE
Unless the context otherwise requires, capitalized terms used herein shall have the
meanings ascribed to them herein and in the Lease Agreement, dated as of July __, 2017 (the
“Lease”), between the Trustee, as lessor, and the City, as lessee, or as set forth in the Indenture
(hereinafter defined).
RECITALS
1. The City is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the City (the “Charter”).
2. The City is authorized by Article XX, Section 6 of the Colorado Constitution and
Part 8 of Article 15 of Title 31, Colorado Revised Statutes (“C.R.S.”), to enter into rental or
leasehold agreements in order to provide necessary land, buildings, equipment and other property
for governmental or proprietary purposes.
3. The City Council of the City (the “City Council”) is authorized by Chapter 23,
Article IV, Division 2 of the Fort Collins, Colorado, Municipal Code, to lease any and all
interests in real property owned in the name of the City if the City Council first finds that the
lease is in the best interest of the City.
4. The City desires to acquire approximately 200 parking spaces in a parking facility
(the “Project”) that is being constructed by Bohemian Companies in connection with a hotel
development project in downtown Fort Collins.
5. The City Council has determined that it is in the best interest of the City to
finance the acquisition of the Project by entering into this Site Lease and the Lease.
6. The City Council has determined that the leased property under this Site Lease
and the Lease will consist of a site consisting of approximately 8.75 acres (the “Site”) and the
buildings and improvements located thereon, which consists of the Fort Collins Senior Center (as
more particularly described in Exhibit A attached hereto, the “Leased Property”).
7. To finance the acquisition of the Project, (a) the City will lease the Leased
Property to the Trustee pursuant to this Site Lease, and (b) the Trustee will lease the Leased
Property back to the City pursuant to the Lease. The City will retain fee title to the Leased
Property and the Trustee will have a leasehold interest in the Leased Property, subject to the
Lease.
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8. The Trustee and the City intend that this Site Lease set forth their entire
understanding and agreement regarding the terms and conditions upon which the Trustee is
leasing the Leased Property from the City.
9. Contemporaneously with the execution and delivery of this Site Lease and the
Lease, the Trustee will execute and deliver an Indenture of Trust (the “Indenture”) pursuant to
which there is expected to be executed and delivered certain certificates of participation (the
“Certificates”) dated as of their date of delivery that shall evidence proportionate interests in the
right to receive certain Revenues (as defined in the Lease), shall be payable solely from the
sources therein provided, and shall not directly or indirectly obligate the City to make any
payments beyond those appropriated for any fiscal year during which the Lease shall be in effect.
10. The net proceeds of the Certificates will be used to finance the acquisition of the
Project and pay the costs of issuance of the Certificates.
11. The City proposes to enter into this Site Lease with the Trustee as material
consideration for the Trustee’s agreement to lease the Leased Property to the City pursuant to the
Lease. The Trustee shall prepay in full its rental payments due under this Site Lease which rental
payments shall be used by the City to finance the acquisition of the Project and pay the costs of
issuance, all pursuant to this Site Lease, the Lease and the Indenture.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows;
Section 1. Site Lease and Terms. The City hereby demises and leases to the Trustee
and the Trustee hereby leases from the City, on the terms and conditions hereinafter set forth, the
Leased Property, subject to Permitted Encumbrances as described in Exhibit B hereto.
The term of this Site Lease shall commence on the date hereof and shall end on
December 31, 2032 (the “Site Lease Termination Date”), unless such term is sooner terminated
as hereinafter provided. If, prior to the Site Lease Termination Date, the Trustee has transferred
and conveyed the Trustee’s leasehold interest in all of the Leased Property pursuant to Article 12
of the Lease as a result of the City’s payment of (a) the applicable Purchase Option Price
thereunder; or (b) all Base Rentals and Additional Rentals, all as further provided in Section 12.2
of the Lease, then the term of this Site Lease shall end in connection with such transfer and
conveyance.
In the event that the Lease is terminated and this Site Lease remains in effect, and the
Trustee exercises its remedies pursuant to this Site Lease and the Indenture, then the term of this
Site Lease shall end when the outstanding remaining principal amount of the Certificates, plus
accrued interest thereon, have been paid or provision has been made for such payment, provided
that in the event that the payment of such Certificates has been made from a sale or assignment
of the Trustee’s leasehold interest herein, then this Site Lease shall remain in effect in
accordance with the terms and provisions of any such sublease or assignment. Notwithstanding
the foregoing or any provision to the contrary contained herein or in the Indenture, the term of
any sublease of the Leased Property or any portion thereof, or any assignment of the Trustee’s
interest in this Site Lease, pursuant to Section 5 hereof, the Lease and the Indenture, shall not
extend beyond December 31, 2032.
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At the end of the term of this Site Lease, all right, title and interest of the Trustee, or any
sublessee or assignee, in and to the Leased Property, shall terminate. Upon such termination, the
Trustee and any sublessee or assignee shall execute and deliver to the City any necessary
documents releasing, assigning, transferring and conveying the Trustee’s, sublessee’s or
assignee’s respective interests in the Leased Property.
Section 2. Rental. The City acknowledges that the amount of $________ constitutes
fair market value and full and adequate consideration for conveyance of the leasehold interest in
the Leased Property conveyed to the Trustee pursuant to this Site Lease. On the date hereof,
such amount has been deposited as follows: (1) $___________ has been deposited with the City
and will be used to finance the acquisition of the Project, and (2) $__________ has been
deposited into the Costs of Execution and Delivery Fund and will be used to pay the Costs of
Execution and Delivery.
Section 3. Purpose. The Trustee shall use the Leased Property solely for the purpose
of leasing the Leased Property back to the City pursuant to the Lease and for such purposes as
may be incidental thereto; provided, that upon the occurrence of an Event of Nonappropriation or
an Event of Lease Default and the termination of the Lease, the City shall vacate the Leased
Property, as provided in the Lease, and the Trustee may exercise the remedies provided in this
Site Lease, the Lease and the Indenture.
Section 4. Owner in Fee; Permitted Encumbrances. The City represents that (a) it
is the owner in fee of the Leased Property, subject only to Permitted Encumbrances as described
in Exhibit B hereto, and (b) the Permitted Encumbrances do not and shall not interfere in any
material way with the Leased Property.
Section 5. Sales, Assignments and Subleases. Unless an Event of Nonappropriation
or an Event of Lease Default shall have occurred and be continuing, and except as may otherwise
be provided in the Lease, the Trustee may not sell or assign its rights and interests under this Site
Lease or sublet all or any portion of the Leased Property, without the prior written consent of the
City.
In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not
terminated, the Trustee may sublease the Leased Property or any portion thereof, or sell or assign
the Trustee’s leasehold interests in this Site Lease, pursuant to the terms of the Lease and the
Indenture, and any purchasers from or sublessees or assignees of the Trustee may sell or assign
its respective interests in the Leased Property, subject to the terms of this Site Lease, the Lease
and the Indenture. The City and the Trustee (or any purchasers from or assignees or sublessees
of the Trustee) agree that, except as permitted by this Site Lease, the Lease and the Indenture and
except for Permitted Encumbrances (including purchase options under the Lease), neither the
City, the Trustee, nor any purchasers from or sublessees or assignees of the Trustee will sell,
mortgage or encumber the Leased Property or any leasehold interest therein, or any portion
thereof during the term of this Site Lease.
The Trustee and any other person who has the right to use the Leased Property under this
Site Lease, at its own expense, may install machinery, equipment and other tangible property in
or on any portion of the Leased Property. All such machinery, equipment and other tangible
property shall remain the sole property of the Trustee or such other person; provided, however,
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that title to any such machinery, equipment and other tangible property shall become part of the
Leased Property and be included under the terms of this Site Lease to the extent that (a) any such
machinery, equipment or other tangible property is permanently affixed to the Leased Property
or (b) the removal of such machinery, equipment or other tangible property would damage or
impair the Leased Property.
Section 6. Right of Entry. The City reserves the right, so long as no Event of
Nonappropriation or Event of Lease Default shall have occurred and is continuing, for any of its
duly authorized representatives to enter upon the Leased Property at any reasonable time to
inspect the same or to make any repairs, improvements or changes necessary for the preservation
thereof.
Section 7. Termination. The Trustee agrees, upon the termination of this Site Lease,
to quit and surrender all of the Leased Property, and agrees that any permanent improvements
and structures existing upon the Leased Property at the time of the termination of this Site Lease
shall remain thereon.
Section 8. Default. In the event the Trustee shall be in default in the performance of
any obligation on its part to be performed under the terms of this Site Lease, which default
continues for 30 days following notice and demand for correction thereof to the Trustee, the City
may exercise any and all remedies granted by law, except that no merger of this Site Lease and
of the Lease shall be deemed to occur as a result thereof and that so long as any Certificates are
Outstanding and unpaid under the Indenture, the Base Rentals due under the Lease shall continue
to be paid to the Trustee except as otherwise provided in the Lease. In addition, so long as any
of the Certificates are Outstanding, this Site Lease shall not be terminated except as described in
Section 1 hereof.
Section 9. Quiet Enjoyment and Acknowledgment of Ownership. The Trustee at
all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy the
Leased Property, subject to the provisions of this Site Lease, the Lease and the Indenture.
Section 10. Trustee’s Disclaimer. It is expressly understood and agreed that (a) this
Site Lease is executed by U.S. Bank National Association solely in its capacity as Trustee under
the Indenture, and (b) nothing herein shall be construed as creating any liability on U.S. Bank
National Association other than in its capacity as Trustee under the Indenture. All financial
obligations of the Trustee under this Site Lease, except those resulting from its willful
misconduct or negligence, are limited to the Trust Estate.
Section 11. Taxes; Maintenance; Insurance. During the Lease Term of the Lease
and in accordance with the provisions of the Lease, including Sections 9.1 and 9.3 thereof, the
City covenants and agrees to pay any and all taxes, assessments or governmental charges due in
respect of the Leased Property and all maintenance costs and utility charges in connection with
the Leased Property. In the event that (a) the Lease is terminated for any reason, (b) this Site
Lease is not terminated, and (c) the Trustee subleases all or any portion of the Leased Property or
sells or assigns its interests in this Site Lease, the Trustee, or any purchaser, sublessee or
assignee of the Leased Property (including the leasehold interests of the Trustee resulting from
this Site Lease) shall pay or cause to be paid when due, all such taxes, assessments or
governmental charges and maintain the Leased Property in good condition and working order.
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Any such payments that are to be made by the Trustee shall be made solely from (a) the proceeds
of such sale, subleasing or assignment, (b) from the Trust Estate, or (c) from other moneys
furnished to the Trustee under Section 8.02(m) of the Indenture, and in the absence of available
moneys identified in the preceding clauses (a) through (c), the Trustee shall be under no
obligation to pay or cause to be paid when due, all such taxes, assessments or governmental
charges and maintain the Leased Property in good condition and working order.
The provisions of the Lease shall govern with respect to the maintenance of insurance
hereunder during the Lease Term of the Lease. In the event that (a) the Lease is terminated for
any reason, (b) this Site Lease is not terminated, and (c) the Trustee subleases all or any portion
of the Leased Property or sells or assigns its interest in this Site Lease, the Trustee, or any
sublessee, purchaser or assignee of the Leased Property shall obtain and keep in force, (i)
commercial general liability insurance against claims for personal injury, death or damage to
property of others occurring on or in the Leased Property in an amount not less than $1,000,000
per occurrence, $2,000,000 aggregate, and (ii) property insurance in an amount not less than the
full replacement value of the Leased Property. Any such insurance that is to be obtained by the
Trustee shall be paid for solely from (a) the proceeds of such subleasing, sale or assignment, (b)
from the Trust Estate, or (c) from moneys furnished to the Trustee under Section 8.02(m) of the
Indenture and in the absence of available moneys identified in the preceding clauses (a) through
(c), the Trustee shall be under no obligation to obtain or keep in force such insurance coverages.
All such insurance shall name the Trustee, any sublessee, purchaser or assignee and the City as
insured and the Trustee as loss payee. The City and the Trustee shall waive any rights of
subrogation with respect to the Trustee, any sublessee, purchaser or assignee, and the City, and
their members, directors, officers, agents and employees, while acting within the scope of their
employment and each such insurance policy shall contain such a waiver of subrogation by the
issuer of such policy.
Subject to Section 16 hereof, nothing in the preceding paragraphs or in this Site Lease
shall be interpreted or construed to require the Trustee to sublease all or any portion of the
Leased Property or sell or assign its interests in this Site Lease, in the event that the Lease is
terminated for any reason and this Site Lease is not terminated.
Section 12. Damage, Destruction or Condemnation. The provisions of the Lease
shall govern with respect to any damage, destruction or condemnation of the Leased Property
during the Lease Term of the Lease. In the event that (a) the Lease is terminated for any reason
and (b) this Site Lease is not terminated, and either (i) the Leased Property or any portion thereof
is damaged or destroyed, in whole or in part, by fire or other casualty, or (ii) title to or use of the
Leased Property or any part thereof shall be taken under the exercise of the power of eminent
domain, the City and the Trustee, or any sublessee, purchaser or assignee of the Leased Property
from the Trustee shall cause the Net Proceeds of any insurance claim or condemnation award to
be applied in accordance with the provisions of Article 10 of the Lease.
Section 13. Hazardous Substances. Except for customary materials necessary for
operation, cleaning and maintenance of the Leased Property, none of the City, the Trustee or any
sublessee, purchaser or assignee of the Leased Property from the Trustee shall cause or permit
any Hazardous Substance to be brought upon, generated at, stored or kept or used in or about the
Leased Property without prior written notice to the City and the Trustee and all Hazardous
Substances, including customary materials necessary for construction, operation, cleaning and
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maintenance of the Leased Property, will be used, kept and stored in a manner that complies with
all laws regulating any such Hazardous Substance so brought upon or used or kept on or about
the Leased Property, provided unless the Trustee has exercised its right to take possession of the
Leased Property after the occurrence and continuance of an Event of Lease Default, the Trustee
shall have no responsibility under this Section to monitor or investigate whether the Leased
Property complies with environmental laws or is subject to any Hazardous Substance. If a
Hazardous Substance is caused or permitted to be placed on the Leased Property by the City, the
Trustee, or any sublessee, purchaser, or assignee of the Leased Property from the Trustee, as the
case may be, and such Hazardous Substance results in contamination of the Leased Property, or
if contamination of the Leased Property by a Hazardous Substance otherwise occurs for which
the City, the Trustee or any sublessee or assignee of the Leased Property, as the case may be, is
legally liable for damage resulting therefrom, then the City, the Trustee or any sublessee,
purchaser or assignee of the Leased Property from the Trustee, as the case may be, shall
reimburse the other party for its reasonable and necessary legal expenses to defend the parties
hereto or assignees hereof that have not caused or permitted such contamination and are not so
legally liable with respect to this Site Lease from claims for damages, penalties, fines, costs,
liabilities or losses; provided that the cost of such defense, (a) in the case of the Trustee, shall be
payable solely from the Trust Estate, or (b) in the case of the City, shall be payable only if the
cost of such defense has been annually appropriated by the City. This duty to reimburse legal
expenses is not an indemnification. It is expressly understood that none of the City, the Trustee
or any sublessee, purchaser or assignee is indemnifying any other person with respect to this Site
Lease. Without limiting the foregoing, if the presence of any Hazardous Substance on the
Leased Property is caused or permitted by:
(a) the Trustee after the Trustee has exercised its right to take possession of
the Leased Property after the occurrence and continuance of an Event of Lease Default,
or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the
case may be, results in any contamination of the Leased Property, the Trustee or any
sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may
be, shall provide prior written notice to the City and the Trustee and promptly take all
actions, solely at the expense of the Trust Estate as are necessary to effect remediation of
the contamination in accordance with legal requirements; or
(b) the City, results in any contamination of the Leased Property, the City
shall provide prior written notice to the Trustee and promptly take all actions, solely at
the expense of the City, which expenses shall constitute Additional Rentals, as are
necessary to effect remediation of the contamination in accordance with legal
requirements.
Section 14. Third Party Beneficiaries. It is expressly understood and agreed that the
Owners of the outstanding Certificates are third party beneficiaries to this Site Lease and
enforcement of the terms and conditions of this Site Lease, and all rights of action relating to
such enforcement, shall be strictly reserved to the City, as Lessor, and the Trustee, as Lessee, and
their respective successors and assigns, and to the Owners of the Certificates. Except as
hereinafter provided, nothing contained in this Site Lease shall give or allow any such claim or
right of action by any other or third person on this Site Lease. It is the express intention of the
City and the Trustee that any person other than the City, the Trustee or the Owners of the
7
Certificates receiving services or benefits under this Site Lease shall be deemed to be an
incidental beneficiary only.
Section 15. Amendments. This Site Lease may only be amended, changed, modified
or altered with the prior written consent of the City and the Trustee and in accordance with the
provisions of the Indenture. So long as ZB, N.A. (the “Initial Purchaser”) is the registered
Owner of all Outstanding Certificates, this Site Lease may not be materially amended, changed,
modified or altered without the prior written consent of the Initial Purchaser, which consent shall
not be unreasonably withheld.
Section 16. Right of Initial Purchaser to Direct Remedies. Notwithstanding any
provisions to the contrary contained herein, so long as the Initial Purchaser is the registered
Owner of all Outstanding Certificates, the Initial Purchaser shall have the right to direct all
remedies taken by the Trustee hereunder. Before taking any such action as directed by the Initial
Purchaser, the Trustee shall be entitled to the indemnification provided in the Indenture.
Section 17. Partial Invalidity. If any one or more of the terms, provisions, covenants
or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or
voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or
decree of which becomes final, none of the remaining terms, provisions, covenants and
conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall
be valid and enforceable to the fullest extent permitted by law.
Section 18. No Merger. The City and the Trustee intend that the legal doctrine of
merger shall have no application to this Site Lease and that neither the execution and delivery of
the Lease by the Trustee and the City nor the exercise of any remedies under this Site Lease or
the Lease shall operate to terminate or extinguish this Site Lease or the Lease, except as
specifically provided herein and therein.
Section 19. Notices. All notices, statements, demands, consents, approvals,
authorizations, offers, designations, requests or other communications hereunder by either party
to the other shall be in writing and shall be sufficiently given and served upon the other party if
delivered personally or if mailed shall be made by United States registered mail, return receipt
requested, postage prepaid, at the addresses indicated in the Lease, or to such other addresses as
the respective parties may from time to time designate in writing, or in such other manner as
authorized by the City or the Trustee, as the case may be.
Section 20. Recitals. The Recitals set forth in this Site Lease are hereby incorporated
by this reference and made a part of this Site Lease.
Section 21. Section Headings. All section headings contained herein are for
convenience of reference only and are not intended to define or limit the scope of any provision
of this Site Lease.
Section 22. Execution. This Site Lease may be executed in any number of
counterparts, each of which shall be deemed to be an original but all together shall constitute but
one and the same Site Lease.
8
Section 23. Governing Law. This Site Lease shall be governed by and construed in
accordance with the law of the State of Colorado without regard to choice of law analysis.
Section 24. No Waiver of Governmental Immunity. Notwithstanding any other
provisions of this Site Lease to the contrary, no term or condition of this Site Lease shall be
construed or interpreted as a waiver, express or implied, of any of the immunities, rights,
benefits, protections, limitations to liability or other provisions of the Colorado Governmental
Immunity Act, Section 24-10-101, et. seq., C.R.S., as now or hereafter amended, or under any
other law.
Section 25. Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
Section 26. Annual Appropriation. Consistent with Article X, §20 of the Colorado
Constitution, any financial obligation of the City under this Site Lease shall be from year to year
only, shall be subject to annual appropriation, shall extend only to monies currently appropriated,
and shall not constitute a mandatory charge, requirement, debt or liability beyond the current
fiscal year. To the extent that any of the City's obligations under this Site Lease are deemed to
constitute a multiple fiscal-year financial obligation, the City’s performance will be conditioned
upon annual appropriation by the City Council, in its sole discretion.
IN WITNESS WHEREOF, the City and the Trustee have caused this Site Lease to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
CITY OF FORT COLLINS, COLORADO,
as Lessor
U.S. BANK NATIONAL ASSOCIATION,
solely in its capacity as Trustee under the
Indenture, as Lessee
By: By:
Wade Troxell, Mayor Authorized Officer
[SEAL]
ATTEST:
____________________________________
Wanda Winkelmann, City Clerk
9
10
STATE OF COLORADO )
) ss.
CITY OF FORT COLLINS )
)
COUNTY OF LARIMER )
The foregoing instrument was acknowledged before me this ____ day of July, 2017, by
Wade Troxell, as Mayor of the City of Fort Collins, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
****************
STATE OF COLORADO )
) ss.
CITY OF FORT COLLINS )
)
COUNTY OF LARIMER )
The foregoing instrument was acknowledged before me this ____ day of July, 2017, by
Wanda Winkelmann, as City Clerk of the City of Fort Collins, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
****************
11
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER)
The foregoing instrument was acknowledged before me this _____ day of July, 2017, by
Jennifer Petruno, as an authorized officer of U.S. Bank National Association, as Trustee.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of the Site and the buildings and improvements located thereon as
described below, as amended from time to time.
SITE:
Tracts A, B and C, Fort Collins Senior Center PUD, City of Fort Collins, County of Larimer,
State of Colorado.
IMPROVEMENTS LOCATED ON SITE
The Fort Collins Senior Center, consisting of a two story, 60,487 square foot recreation building.
B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” means, as of any particular time: (a) liens for taxes and
assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to
the provisions of the Lease; (b) this Site Lease, the Lease, the Indenture and any related fixture
filing and any liens arising or granted pursuant to the Lease or the Indenture; (c) utility, access
and other easements and rights of way, licenses, permits, party wall and other agreements,
restrictions and exceptions which the City Representative certifies will not materially interfere
with or materially impair the use or value of Leased Property, including rights or privileges in
the nature of easements, licenses, permits and agreements as provided in the Lease; and (d) the
easements, covenants, restrictions, liens and encumbrances to which title to the Leased Property
was subject when leased to the Trustee pursuant to this Site Lease, as shown below, and which
the City Representative has certified do not and will not interfere in any material way with the
intended use of the Leased Property.
The easements, covenants, restrictions, liens and encumbrances to which title to the
Leased Property was subject when leased to the Trustee pursuant to this Site Lease, and which
the City Representative has certified do not and will not interfere in any material way with the
intended use of the Leased Property, are as follows:
1) RIGHT OF WAY EASEMENT AS GRANTED TO CITY OF FORT COLLINS IN
INSTRUMENT RECORDED APRIL 02, 1985, UNDER RECEPTION NO. 85015147.
2) RIGHT OF WAY EASEMENT AS GRANTED TO CITY OF FORT COLLINS IN
INSTRUMENT RECORDED APRIL 02, 1985, UNDER RECEPTION NO. 85015149.
3) TERMS, CONDITIONS AND PROVISIONS OF SITE AND LANDSCAPE COVENANTS
RECORDED AUGUST 23, 1985 AT RECEPTION NO. 85041841.
4) EASEMENTS, CONDITIONS, COVENANTS, RESTRICTIONS, RESERVATIONS AND
NOTES ON THE PLAT OF FORT COLLINS SENIOR CENTER PUD RECORDED
SEPTEMBER 15, 1993 UNDER RECEPTION NO. 67048.
5) RIGHT OF WAY EASEMENT AS GRANTED TO PUBLIC SERVICE COMPANY OF
COLORADO IN INSTRUMENT RECORDED OCTOBER 24, 1994, UNDER RECEPTION
NO. 94086461.
6) RIGHT OF WAY EASEMENT AS GRANTED TO US WEST COMMUNICATIONS INC IN
INSTRUMENT RECORDED AUGUST 07, 1995, UNDER RECEPTION NO. 95047825.
7) RIGHT OF WAY EASEMENT AS GRANTED TO IN INSTRUMENT RECORDED JULY 28,
2000, UNDER RECEPTION NO. 2000050999 AND MEMORANDUM RECORDED
OCTOBER 3, 2000 AT RECEPTION NO. 2000068406.
8) TERMS, CONDITIONS AND PROVISIONS OF AGREEMENT RECORDED APRIL 10, 2006
AT RECEPTION NO. 2006026212.
9) TERMS, CONDITIONS AND PROVISIONS OF DEED OF DRAINAGE EASEMENT
RECORDED APRIL 10, 2006 AT RECEPTION NO. 2006026213.
10) TERMS, CONDITIONS AND PROVISIONS OF CROSSING AGREEMENT RECORDED
MAY 05, 2014 AT RECEPTION NO. 20140022383.
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Sarah P. Tasker, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Lease Agreement is exempt
from the documentary fee
LEASE AGREEMENT
DATED AS OF JULY __, 2017
BETWEEN
U.S. BANK NATIONAL ASSOCIATION,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE,
AS LESSOR
AND
CITY OF FORT COLLINS, COLORADO,
AS LESSEE
ATTACHMENT 3
i
This Table of Contents is not a part of this Lease and is only for convenience of
reference.
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ........................................................................................................... 6
Section 1.1 Certain Funds and Accounts. .............................................................................. 6
Section 1.2 Definitions........................................................................................................... 6
ARTICLE 2 REPRESENTATIONS AND COVENANTS .......................................................... 12
Section 2.1 Representations and Covenants of the City. ..................................................... 12
Section 2.2 Representations and Covenants of the Trustee. ................................................ 13
Section 2.3 Nature of Lease. ................................................................................................ 14
Section 2.4 City Acknowledgment of Certain Matters. ....................................................... 15
Section 2.5 Relationship of City and Trustee. ..................................................................... 15
ARTICLE 3 LEASE OF THE LEASED PROPERTY................................................................. 16
ARTICLE 4 LEASE TERM ......................................................................................................... 17
Section 4.1 Duration of Lease Term. ................................................................................... 17
Section 4.2 Termination of Lease Term. ............................................................................. 18
ARTICLE 5 ENJOYMENT OF THE LEASED PROPERTY ..................................................... 19
Section 5.1 Trustee’s Covenant of Quiet Enjoyment........................................................... 19
Section 5.2 City’s Need for the Leased Property; Determinations as to Fair Value and Fair
Purchase Price. .................................................................................................. 19
ARTICLE 6 PAYMENTS BY THE CITY .................................................................................. 20
Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the City............. 20
Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals. ......................... 20
Section 6.3 Manner of Payment. .......................................................................................... 21
Section 6.4 Nonappropriation. ............................................................................................. 22
Section 6.5 Holdover Tenant. .............................................................................................. 23
Section 6.6 Prohibition of Adverse Budget or Appropriation Modifications. ..................... 24
ARTICLE 7 SITE LEASE; TITLE INSURANCE ....................................................................... 25
Section 7.1 Site Lease. ......................................................................................................... 25
Section 7.2 Title Insurance. ................................................................................................. 25
ARTICLE 8 TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES ...... 26
Section 8.1 Title to the Leased Property. ............................................................................. 26
Section 8.2 No Encumbrance, Mortgage or Pledge of the Leased Property........................ 26
ii
ARTICLE 9 MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES ................. 27
Section 9.1 Maintenance of the Leased Property by the City. ............................................. 27
Section 9.2 Modification of the Leased Property; Installation of Furnishings and Machinery
of the City. ........................................................................................................ 27
Section 9.3 Taxes, Other Governmental Charges and Utility Charges................................ 27
Section 9.4 Provisions For Liability and Property Insurance. ............................................. 28
Section 9.5 Advances. .......................................................................................................... 29
Section 9.6 Granting of Easements. ..................................................................................... 29
ARTICLE 10 DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET
PROCEEDS .................................................................................................................................. 30
Section 10.1 Damage, Destruction and Condemnation. ........................................................ 30
Section 10.2 Obligation to Repair and Replace the Leased Property. ................................... 30
Section 10.3 Insufficiency of Net Proceeds. .......................................................................... 31
Section 10.4 Cooperation of the Trustee................................................................................ 32
ARTICLE 11 DISCLAIMER OF WARRANTIES; OTHER COVENANTS ............................. 33
Section 11.1 Disclaimer of Warranties. ................................................................................. 33
Section 11.2 Further Assurances and Corrective Instruments. .............................................. 33
Section 11.3 Compliance with Requirements. ....................................................................... 33
Section 11.4 Release and Substitution of Leased Property.................................................... 33
Section 11.5 Tax Covenants .................................................................................................. 34
Section 11.6 Covenant to Reimburse Legal Expenses. .......................................................... 35
Section 11.7 Access to the Leased Property; Rights to Inspect Books. ................................. 35
ARTICLE 12 PURCHASE OPTION ........................................................................................... 36
Section 12.1 Purchase Option. ............................................................................................... 36
Section 12.2 Transfer, Conveyance and Release of Leased Property. ................................... 36
Section 12.3 Manner of Conveyance. .................................................................................... 36
ARTICLE 13 ASSIGNMENT AND SUBLEASING .................................................................. 38
Section 13.1 Assignment by the Trustee; Replacement of the Trustee. ................................ 38
Section 13.2 Assignment and Subleasing by the City. .......................................................... 38
ARTICLE 14 EVENTS OF LEASE DEFAULT AND REMEDIES ........................................... 39
Section 14.1 Events of Lease Default Defined. ..................................................................... 39
Section 14.2 Remedies on Default. ........................................................................................ 39
Section 14.3 Limitations on Remedies. ................................................................................. 40
Section 14.4 No Remedy Exclusive....................................................................................... 41
Section 14.5 Waivers. ............................................................................................................ 41
Section 14.6 Agreement to Pay Attorneys’ Fees and Expenses. ........................................... 41
Section 14.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. 41
iii
ARTICLE 15 MISCELLANEOUS .............................................................................................. 42
Section 15.1 Sovereign Powers of City. ................................................................................ 42
Section 15.2 Notices. ............................................................................................................. 42
Section 15.3 Third Party Beneficiaries. ................................................................................. 42
Section 15.4 Binding Effect. .................................................................................................. 43
Section 15.5 Amendments. .................................................................................................... 43
Section 15.6 Amounts Remaining in Funds. ......................................................................... 43
Section 15.7 Triple Net Lease. ............................................................................................... 43
Section 15.8 Computation of Time. ....................................................................................... 43
Section 15.9 Payments Due on Holidays. .............................................................................. 43
Section 15.10 Severability. ...................................................................................................... 43
Section 15.11 Execution in Counterparts................................................................................. 44
Section 15.12 Applicable Law. ................................................................................................ 44
Section 15.13 The Trustee Is Independent of the City............................................................. 44
Section 15.14 Governmental Immunity. .................................................................................. 44
Section 15.15 Recitals. ............................................................................................................. 44
Section 15.16 Captions. ........................................................................................................... 44
Section 15.17 Trustee’s Disclaimer. ........................................................................................ 44
Section 15.18 Electronic Transactions. .................................................................................... 44
Section 15.19 Information to Initial Purchaser.. ...................................................................... 45
EXHIBIT A: DESCRIPTION OF LEASED PROPERTY ....................................................... A-1
EXHIBIT B: EXISTING PERMITTED ENCUMBRANCES ..................................................B-1
EXHIBIT C: BASE RENTALS SCHEDULE ..........................................................................C-1
EXHIBIT D: FORM OF NOTICE OF LEASE RENEWAL ................................................... D-1
4
This LEASE AGREEMENT, dated as of July __, 2017 (this “Lease”), is by and between
U.S. Bank National Association, Denver, Colorado, a national banking association duly
organized and validly existing under the laws of the United States of America, solely in its
capacity as trustee under the Indenture (the “Trustee”), as lessor, and the City of Fort Collins,
Colorado, a Colorado home rule municipality (the “City”), as lessee.
PREFACE
All capitalized terms used herein will have the meanings ascribed to them in Article 1 of
this Lease.
RECITALS
1. The City is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the City (the “Charter”).
2. The City is authorized by Article XX, Section 6 of the Colorado Constitution and
Part 8 of Article 15 of Title 31, Colorado Revised Statutes (“C.R.S.”), to enter into rental or
leasehold agreements in order to provide necessary land, buildings, equipment and other property
for governmental or proprietary purposes.
3. The City Council of the City (the “City Council”) is authorized by Chapter 23,
Article IV, Division 2 of the Fort Collins, Colorado, Municipal Code, to lease any and all
interests in real property owned in the name of the City if the City Council first finds that the
lease is in the best interest of the City.
4. The City desires to acquire approximately 200 parking spaces in a parking facility
(the “Project”) that is being constructed by Bohemian Companies in connection with a hotel
development project in downtown Fort Collins.
5. The City Council has determined that it is in the best interest of the City to
finance the acquisition of the Project by entering into a Site and Improvement Lease with the
Trustee (the “Site Lease”) and this Lease.
6. The City Council has determined that the leased property under the Site Lease and
this Lease will consist of a site consisting of approximately 8.75 acres (the “Site”) and the
buildings and improvements located thereon, which consists of the Fort Collins Senior Center (as
more particularly described in Exhibit A attached hereto, the “Leased Property”).
7. To finance the acquisition of the Project, (a) the City will lease the Leased
Property to the Trustee pursuant to the Site Lease, and (b) the Trustee will lease the Leased
Property back to the City pursuant to this Lease. The City will retain fee title to the Leased
Property and the Trustee will have a leasehold interest in the Leased Property, subject to the
Lease.
8. The payment by the City of Base Rentals and Additional Rentals hereunder in any
future Fiscal Year is subject to specific Appropriations and the renewal by the City Council of
5
this Lease for such future Fiscal Year. The Base Rentals and Additional Rentals payable by the
City under this Lease shall constitute current expenditures of the City.
9. Neither this Lease nor the payment by the City of Base Rentals or Additional
Rentals hereunder shall be deemed or construed as creating an indebtedness of the City within
the meaning of any provision of the Colorado constitution, the Charter or the laws of the State of
Colorado concerning or limiting the creation of indebtedness by the City, and shall not constitute
a multiple fiscal year direct or indirect debt or other financial obligation of the City within the
meaning of Article X, Section 20(4) of the Colorado constitution or a mandatory charge or
requirement against the City in any ensuing Fiscal Year beyond the then current Fiscal Year.
The obligation of the City to pay Base Rentals and Additional Rentals hereunder shall be from
year to year only, shall constitute currently budgeted expenditures of the City, shall not constitute
a mandatory charge or requirement in any ensuing budget year, nor a mandatory payment
obligation of the City in any ensuing Fiscal Year beyond any Fiscal Year during which this
Lease shall be in effect. In the event that this Lease is not renewed, the sole security available to
the Trustee, as lessor hereunder, shall be the Leased Property, and any monies available under
the Indenture in accordance with the terms and provisions thereof.
10. The Trustee is executing this Lease solely in its capacity as trustee under the
Indenture, and subject to the terms, conditions and protections provided for herein.
11. The Trustee and the City intend that this Lease set forth their entire understanding
and agreement regarding the terms and conditions upon which the City is leasing the Leased
Property from the Trustee.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the Trustee and the City agree as follows:
6
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Funds and Accounts. All references herein to any funds and
accounts shall mean the funds and accounts so designated which are established under the
Indenture.
Section 1.2 Definitions. All capitalized terms used herein and not otherwise defined
shall have the meanings given to them in the Indenture, unless the context otherwise requires.
Capitalized terms used herein shall have the following meanings under this Lease:
“Additional Certificates” means Additional Certificates which may be executed and
delivered pursuant to the Indenture.
“Additional Rentals” means the payment or cost of all:
(a) (i) reasonable expenses and fees of the Trustee related to the performance
or discharge of its responsibilities under the provisions of this Lease, the Site Lease or the
Indenture, including the reasonable fees and expenses of any person or firm employed by
the City to make rebate calculations under the provisions of Section 3.05 of the Indenture
and the expenses of the Trustee in respect of any policy of insurance obtained in respect
of the Certificates executed and delivered with respect to this Lease, (ii) the cost of
insurance premiums and insurance deductible amounts under any insurance policy
reasonably deemed necessary by the Trustee to protect the Trustee from any liability
under this Lease, approved by the City Representative, which approval shall not be
unreasonably withheld, (iii) reasonable legal fees and expenses incurred by the Trustee to
defend the Trust Estate or the Trustee from and against any legal claims, and(iv)
reasonable expenses and fees of the Trustee incurred at the request of the City
Representative;
(b) taxes, assessments, insurance premiums, utility charges, maintenance,
upkeep, repair and replacement with respect to the Leased Property and as otherwise
required under this Lease;
(c) rebate payments as provided in this Lease; and
(d) all other charges and costs (together with all interest and penalties that
may accrue thereon in the event that the City shall fail to pay the same, as specifically set
forth in this Lease) which the City agrees to assume or pay as Additional Rentals under
this Lease.
Additional Rentals shall not include Base Rentals.
“Appropriation” means the action of the City Council in annually making moneys
available for all payments due under this Lease, including the payment of Base Rentals and
Additional Rentals.
7
“Approval of Special Counsel” means an opinion of Special Counsel to the effect that the
matter proposed will not adversely affect the excludability from gross income for federal income
tax purposes of the Interest Portion of the Base Rentals paid by the City under this Lease and
attributable to the Certificates.
“Base Rentals” means the rental payments payable by the City during the Lease Term,
which constitute payments payable by the City for and in consideration of the right to possess
and use the Leased Property as set forth in Exhibit C (Base Rentals Schedule) hereto, as it may
be amended from time to time. Base Rentals does not include Additional Rentals.
“Base Rentals Payment Dates” means the Base Rentals Payment Dates set forth in
Exhibit C (Base Rentals Schedule) hereto.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday or a day
(a) on which banks located in Denver, Colorado are required or authorized by law or executive
order to close or (b) on which the Federal Reserve System is closed.
“Certificates” means the “Certificates of Participation, Series 2017, Evidencing
Proportionate Interests in the Base Rentals and other Revenues under an annually renewable
Lease Agreement dated as of July __, 2017, between U.S. Bank National Association, solely in
its capacity as trustee under the Indenture, as lessor, and the City of Fort Collins, Colorado, as
lessee” dated as of their date of delivery, executed and delivered pursuant to the Indenture. As
used herein, the term “Certificates” does not include “Additional Certificates.”
“Charter” means the home rule charter of the City, and any amendments or supplements
thereto.
“City” means the City of Fort Collins, Colorado.
“City Council” means the City Council of the City or any successor to its functions.
“City Manager” means the City Manager of the City or his or her successor in function.
“City Representative” means the Mayor, the City Manager or the Financial Officer or
such other person at the time designated to act on behalf of the City for the purpose of
performing any act under this Lease, the Site Lease or the Indenture by a written certificate
furnished to the Trustee containing the specimen signature of such person or persons and signed
on behalf of the City by the Mayor.
“Costs of Execution and Delivery” means all items of expense directly or indirectly
payable by the Trustee related to the authorization, execution and delivery of the Site Lease and
this Lease and related to the authorization, sale, execution and delivery of the Certificates, as
further defined in the Indenture.
“Counsel” means an attorney at law or law firm (who may be counsel for the Trustee).
“CRS” means Colorado Revised Statutes.
8
“Event(s) of Lease Default” means any event as defined in Section 14.1 of this Lease.
“Event of Nonappropriation” means the termination and non-renewal of this Lease by the
City, determined by the City Council’s failure, for any reason, to appropriate by the last day of
each Fiscal Year, (a) sufficient amounts to be used to pay Base Rentals due in the next Fiscal
Year and (b) sufficient amounts to pay such Additional Rentals as are estimated to become due
in the next Fiscal Year, as provided in Section 6.4 of this Lease. An Event of Nonappropriation
may also occur under certain circumstances described in Section 10.3(c) of this Lease. The term
also means a notice under this Lease of the City’s intention to not renew and therefore terminate
this Lease or an event described in this Lease relating to the exercise by the City of its right to
not appropriate amounts due as Additional Rentals in excess of the amounts for which an
Appropriation has been previously effected.
“Financial Officer” means the Financial Officer of the City or his or her successor in
functions, if any.
“Fiscal Year” means the City’s fiscal year, which begins on January 1 of each calendar
year and ends on December 31 of the same calendar year, or any other twelve month period
which the City or other appropriate authority hereafter may establish as the City’s fiscal year.
“Force Majeure” means, without limitation, the following: acts of God; strikes, lockouts
or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America, the State of Colorado or any of their departments,
agencies or officials or any civil or military authority; insurrection; riots; landslides; earthquakes;
fires; storms; droughts; floods; explosions; breakage or accidents to machinery, transmission
pipes or canals; or any other cause or event not within the control of the City in its capacity as
lessee hereunder or the Trustee.
“Hazardous Substance” means and includes: (a) the terms “hazardous substance,”
“release” and “removal” which, as used herein, shall have the same meaning and definition as set
forth in paragraphs (14), (22) and (23), respectively, of Title 42 U.S.C. §9601 and in Colorado
law, provided, however, that the term “hazardous substance” as used herein shall also include
“hazardous waste” as defined in paragraph (5) of 42 U.S.C. §6903 and “petroleum” as defined in
paragraph (8) of 42 U.S.C. §6991; (b) the term “superfund” as used herein means the
Comprehensive Environmental Response, Compensation and Liability Act, as amended, being
Title 42 U.S.C. §9601 et seq., as amended, and any similar State of Colorado statute or local
ordinance applicable to the Leased Property, including, without limitation, Colorado rules and
regulations promulgated, administered and enforced by any governmental agency or authority
pursuant thereto; and (c) the term “underground storage tank” as used herein shall have the same
meaning and definition as set forth in paragraph (1) of 42 U.S.C. §6991.
“Indenture” means the Indenture of Trust, dated as of July __, 2017, entered into by the
Trustee, as the same may be amended or supplemented.
“Initial Purchaser” means ZB, N.A., and its successors, as the initial purchaser of all the
Certificates. All references to the Initial Purchaser hereunder shall be applicable for so long as,
and only to the extent that, the Initial Purchaser is the sole owner of all Outstanding Certificates.
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All references herein to the Initial Purchaser shall be of no force and effect in the event that the
Initial Purchaser is not the sole Owner of all Outstanding Certificates.
“Initial Term” means the period which commences on the date of delivery of this Lease
and terminates on December 31, 2017.
“Interest Portion” means the portion of each Base Rentals payment that represents the
payment of interest set forth in Exhibit C (Base Rentals Schedule) hereto.
“Lease” means this Lease Agreement, dated as of July __, 2017, between the Trustee, as
lessor, and the City, as lessee, as the same may hereafter be amended.
“Lease Remedy” or “Lease Remedies” means any or all remedial steps provided in this
Lease whenever an Event of Lease Default or an Event of Nonappropriation has happened and is
continuing, which may be exercised by the Trustee as provided in this Lease and in the
Indenture.
“Lease Term” means the Initial Term and any Renewal Terms as to which the City may
exercise its option to renew this Lease by effecting an Appropriation of funds for the payment of
Base Rentals and Additional Rentals hereunder, as provided in and subject to the provisions of
this Lease. “Lease Term” refers to the time during which the City is the lessee of the Leased
Property under this Lease.
“Leased Property” means the Site and the premises, buildings and improvements situated
thereon, including all fixtures attached thereto, as more particularly described in Exhibit A to
this Lease, together with any and all additions and modifications thereto, substitutions and
replacements thereof, including, without limitation, the easements, rights of way, covenants and
other rights set forth in the documents listed on Exhibit B attached hereto.
“Mayor” means the Mayor of the City, or his or her successor in duties.
“Net Proceeds” means the proceeds of any performance or payment bond, or proceeds
of insurance, including self-insurance, required by this Lease or proceeds from any
condemnation award, or any proceeds derived from the exercise of any Lease Remedy or
otherwise following termination of this Lease by reason of an Event of Nonappropriation or an
Event of Lease Default, allocable to the Leased Property, less (a) all related expenses (including,
without limitation, attorney’s fees and costs) incurred in the collection of such proceeds or
award; and (b) all other related fees, expenses and payments due to the City and the Trustee.
“Owners” means the registered owners of any Certificates or Additional Certificates.
The Initial Purchaser shall be the initial registered owner of all of the Certificates.
“Permitted Encumbrances” with respect to the Leased Property, means, as of any
particular time: (a) liens for taxes and assessments not then delinquent, or liens which may
remain unpaid pending contest pursuant to the provisions of this Lease; (b) the Site Lease, this
Lease, the Indenture and any related fixture filing and any liens arising or granted pursuant to the
Site Lease, this Lease or the Indenture; (c) utility, access and other easements and rights of way,
licenses, permits, party wall and other agreements, restrictions and exceptions which the City
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Representative certifies will not materially interfere with or materially impair the use or value of
the Leased Property, including rights or privileges in the nature of easements, licenses, permits
and agreements as provided in this Lease; (d) any sublease of the Leased Property that is
permitted pursuant to the terms and provisions of Section 13.2 hereof; and (e) the easements,
covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was
subject when leased to the Trustee pursuant to the Site Lease, as shown on Exhibit B hereto and
which the City Representative certifies do not and will not interfere in any material way with the
intended use of the Leased Property.
“Prepayment” means any amount paid by the City pursuant to the provisions of this
Lease as a prepayment of the Base Rentals due hereunder.
“Principal Portion” means the portion of each Base Rentals payment that represents the
payment of principal set forth in Exhibit C (Base Rentals Schedule) hereto.
“Project” means the acquisition of 200 parking spaces in a parking facility that is being
constructed by Bohemian Companies in connection with a hotel development project in
downtown Fort Collins, that is being financed with the net proceeds of the Certificates.
“Purchase Option Price” means the amount payable on any date, at the option of the
City, to defease the Indenture, prepay Base Rentals, terminate the Lease Term and purchase the
Trustee’s leasehold interest in the Leased Property as provided herein and in the Indenture.
“Renewal Term” means any portion of the Lease Term commencing on January 1 of any
calendar year and terminating on or before December 31 of such calendar year as provided in
Article 4 of this Lease.
“Revenues” means (a) all amounts payable by or on behalf of the City or with respect to
the Leased Property pursuant to this Lease including, but not limited to, all Base Rentals,
Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals;
(b) any portion of the proceeds of the Certificates or the Additional Certificates deposited into
the Base Rentals Fund; and (c) any moneys and securities, including investment income, held by
the Trustee in the Funds and Accounts established under the Indenture (except for moneys and
securities held in the Rebate Fund and any defeasance escrow account).
“Site” means the real property, with all its appurtenances, owned by the City and leased
by the City to the Trustee under the Site Lease and subleased by the Trustee to the City under
this Lease, the legal description of which is set forth in Exhibit A hereto, or an amendment or
supplement hereto.
“Site Lease” means the Site and Improvement Lease Agreement, dated as of July __,
2017, between the City, as lessor, and the Trustee, as lessee, as the same may hereafter be
amended.
“Special Counsel” means any counsel experienced in matters of municipal and federal tax
law and listed in the list of municipal bond attorneys, as published semiannually by The Bond
Buyer, or any successor publication. So long as the Lease Term is in effect, the City shall have
the right to select Special Counsel.
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“Tax Certificate” means the Tax Compliance Certificate entered into by the City with
respect to this Lease and the Certificates.
“Tax Code” means the Internal Revenue Code of 1986, as amended, and all regulations
and rulings promulgated thereunder
“Trustee” means U.S. Bank National Association, acting solely in the capacity of trustee
pursuant to the Indenture, and any successor thereto appointed under the Indenture.
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ARTICLE 2
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of the City. The City represents and
covenants to the Trustee, to the extent permitted by law and subject to renewal of this Lease and
Appropriation as set forth in Article 6 hereof, as follows:
(a) The City is a home rule municipal corporation duly organized and existing
within the State under the Constitution and laws of the State and its Charter. The City is
authorized to enter into this Lease and the Site Lease and to carry out its obligations
under this Lease and the Site Lease. The City has duly authorized and approved the
execution and delivery of this Lease, the Site Lease and all other documents related to the
execution and delivery of this Lease and the Site Lease.
(b) The City owns the Leased Property and the Trustee has a leasehold
interest in the Leased Property pursuant to the Site Lease.
(c) The leasing of the Leased Property to the Trustee pursuant to the Site
Lease and the leasing of the Leased Property from the Trustee, under the terms and
conditions provided for in this Lease, and the acquisition of the Project by the City, are in
the best interests of the City and serve a valid public purpose. The City will apply the net
proceeds derived from the proceeds of the Certificates to finance the acquisition of the
Project and to pay the Costs of Execution and Delivery.
(d) Neither the execution and delivery of this Lease and the Site Lease, nor
the fulfillment of or compliance with the terms and conditions of this Lease and the Site
Lease, nor the consummation of the transactions contemplated hereby or thereby,
conflicts with or results in a breach of the terms, conditions or provisions of any
restriction or any agreement or instrument to which the City is now a party or by which
the City or its property is bound, or violates any statute, regulation, rule, order of any
court having jurisdiction, judgment or administrative order applicable to the City, or
constitutes a default under any of the foregoing, or results in the creation or imposition of
any lien or encumbrance whatsoever upon any of the property or assets of the City,
except for Permitted Encumbrances.
(e) The City agrees that, except for non-renewal and nonappropriation as set
forth in Article 6 hereof, if the City fails to perform any act which the City is required to
perform under this Lease, the Trustee may, but shall not be obligated to, perform or cause
to be performed such act, and any reasonable expense incurred by the Trustee in
connection therewith shall be an obligation owing by the City (from moneys for which an
Appropriation has been effected) to the Trustee shall be a part of Additional Rentals, and
the Trustee shall be subrogated to all of the rights of the party receiving such payment.
(f) There is no litigation or proceeding pending against the City affecting the
right of the City to execute this Lease or the Site Lease or the ability of the City to make
the payments required hereunder, or to otherwise comply with the obligations contained
herein, or which, if adversely determined, would, in the aggregate or in any case,
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materially adversely affect the property, assets, financial condition or business of the City
or materially impair the right or ability of the City to carry on its operations substantially
as now conducted or anticipated to be conducted in the future.
(g) Except for customary materials necessary for the operation, cleaning and
maintenance of the Leased Property, the City shall not cause or permit any Hazardous
Substance to be brought upon, generated at, stored or kept or used in or about the Leased
Property without prior written notice to the Trustee, and all Hazardous Substances,
including, customary materials necessary for construction, operation, cleaning and
maintenance of the Leased Property, will be used, kept and stored in a manner that
complies with all laws regulating any such Hazardous Substance so brought upon or used
or kept in or about the Leased Property. If the presence of any Hazardous Substance on
the Leased Property caused or permitted by the City results in contamination of the
Leased Property, or if contamination of the Leased Property by any Hazardous Substance
otherwise occurs for which the City is legally liable for damage resulting therefrom, then
the City shall include as an Additional Rental any amount necessary to reimburse the
Trustee for legal expenses incurred to defend (to the extent that an Appropriation for the
necessary moneys has been effected by the City) the Trustee from claims for damages,
penalties, fines, costs, liabilities or losses. The reimbursement of the Trustee’s legal
expenses is not an indemnification. It is expressly understood that the City is not
indemnifying the Trustee and expenses of such defense shall constitute Additional
Rentals. Without limiting the foregoing, if the presence of any Hazardous Substance on
the Leased Property caused or permitted by the City results in any contamination of the
Leased Property, the City shall provide prior written notice to the Trustee and promptly
take all actions at its sole expense (which expenses shall constitute Additional Rentals) as
are necessary to effect remediation of the contamination in accordance with legal
requirements.
(h) The City covenants and agrees to comply with any applicable covenants
and requirements of the City set forth in the Tax Certificate.
(i) The City has never non-appropriated or defaulted under any of its payment
or performance obligations or covenants, either under any municipal lease of the same
general nature of this Lease, or under any of its bonds, notes, or other obligations of
indebtedness for which its revenues or general credit are pledged.
Section 2.2 Representations and Covenants of the Trustee. The Trustee represents
and covenants as follows:
(a) So long as no Event of Indenture Default has occurred and is then
continuing or existing, except as specifically provided in the Site Lease or this Lease or as
necessary to transfer the Trust Estate to a successor Trustee, the Trustee shall not pledge or
assign the Trustee’s right, title and interest in and to (i) this Lease or the Site Lease, (ii) the Base
Rentals, other Revenues and collateral, security interests and attendant rights and obligations
which may be derived under this Lease or the Site Lease and/or (iii) the Leased Property and any
reversion therein or any of its or the Trustee’s other rights under this Lease or the Site Lease or
assign, pledge, mortgage, encumber or grant a security interest in its or the Trustee’s right, title
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and interest in, to and under this Lease or the Site Lease or the Leased Property except for
Permitted Encumbrances.
(b) Neither the execution and delivery of this Lease and the Site Lease or the
Indenture by the Trustee, nor the fulfillment of or compliance with the terms and conditions
thereof and hereof, nor the consummation of the transactions contemplated thereby or hereby
conflicts with or results in a breach of the terms, conditions and provisions of any restriction or
any agreement or instrument to which the Trustee is now a party or by which the Trustee is
bound, or constitutes a default under any of the foregoing.
(c) To the Trustee’s knowledge, there is no litigation or proceeding pending
against the Trustee affecting the right of the Trustee to execute this Lease and the Site Lease or
to execute the Indenture, and perform its obligations thereunder or hereunder, except such
litigation or proceeding as has been disclosed in writing to the City on or prior to the date the
Indenture is executed and delivered.
(d) The Trustee acknowledges and agrees that so long as the Initial Purchaser
is the sole Owner of all the Outstanding Certificates, the Initial Purchaser shall have the right to
direct the remedies to be taken by the Trustee hereunder and under the Site Lease and the
Indenture. Before taking any such action as directed by the Initial Purchaser, the Trustee shall be
entitled to the indemnification provided in the Indenture. The Trustee agrees that, so long as the
Initial Purchaser is the sole Owner of all Outstanding Certificates, the Trustee shall promptly
provide written notice of the occurrence of any Event of Indenture Default to the Initial
Purchaser.
Section 2.3 Nature of Lease. The City and the Trustee acknowledge and agree that the
Base Rentals and Additional Rentals hereunder shall constitute currently budgeted and
appropriated expenditures of the City and may be paid from any legally available funds. The
City’s obligations under this Lease shall be subject to the City’s annual right to terminate this
Lease (as further provided herein), and shall not constitute a mandatory charge or requirement in
any ensuing Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be
construed or interpreted as creating a general obligation, multiple fiscal year financial obligation,
or other indebtedness of the City within the meaning of any constitutional, Charter or statutory
debt limitation. No provision of this Lease shall be construed or interpreted as creating an
unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the
City within the meaning of Article XI, Sections 1 or 2 of the Colorado Constitution. Neither this
Lease nor the execution and delivery of the Certificates shall directly or indirectly obligate the
City to make any payments beyond those duly budgeted and appropriated for the City’s then
current Fiscal Year. The City shall be under no obligation whatsoever to exercise its option to
purchase the Trustee’s leasehold interest in the Leased Property. No provision of this Lease shall
be construed to pledge or to create a lien on any class or source of City moneys, nor shall any
provision of this Lease restrict the future issuance of any City bonds or obligations payable from
any class or source of City moneys (provided, however, certain restrictions in the Indenture shall
apply to the issuance of Additional Certificates). In the event that this Lease is not renewed by
the City, the sole security available to the Trustee, as lessor hereunder, shall be the Leased
Property, and other monies available to the Trustee under the Site Lease and the Indenture.
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Section 2.4 City Acknowledgment of Certain Matters. The City acknowledges the
Indenture and the execution and delivery by the Trustee of the Certificates pursuant to the
Indenture. The City also acknowledges the Trustee’s authority to act on behalf of the Owners of
the Certificates with respect to all rights, title and interests of the Trustee in, to and under this
Lease, the Site Lease and the Leased Property.
The City further acknowledges and agrees that the Certificates have not been and are not
expected to be rated by a nationally recognized organization which regularly rates such
certificates, assigned a CUSIP number, or registered with or made eligible for registration with
any securities depository, including but not limited to the Depository Trust Company, New York,
New York.
Section 2.5 Relationship of City and Trustee. The relationship of the City and the
Trustee under this Lease is, and shall at all times remain, solely that of lessee and lessor; and the
City neither undertakes nor assumes any responsibility or duty to the Trustee or to any third party
with respect to the Trustee’s obligations relating to the Leased Property; and the Trustee does not
undertake or assume any responsibility or duty to the City or to any third party with respect to
the City’s obligations relating to the Leased Property. Notwithstanding any other provisions of
this Lease: (a) the City and the Trustee are not, and do not intend to be construed to be, partners,
joint ventures, members, alter egos, managers, controlling persons or other business associates or
participants of any kind of either of the other, and the City and the Trustee do not intend to ever
assume such status; and (b) the City and the Trustee shall not be deemed responsible for, or a
participant in, any acts, omissions or decisions of either of the other.
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ARTICLE 3
LEASE OF THE LEASED PROPERTY
The Trustee demises and leases the Leased Property to the City and the City leases the
Leased Property from the Trustee, in accordance with the provisions of this Lease, subject only
to Permitted Encumbrances, to have and to hold for the Lease Term.
The City and the Trustee acknowledge that the City owns the Leased Property and the
City has leased the Leased Property to the Trustee pursuant to the Site Lease; and the City and
the Trustee intend that there be no merger of the City’s interests as sublessee under this Lease
and the City’s ownership interest in the Leased Property so as to cause the cancellation of the
Site Lease or this Lease, or an impairment of the leasehold and subleasehold interest intended to
be created by the Site Lease and this Lease.
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ARTICLE 4
LEASE TERM
Section 4.1 Duration of Lease Term. The Lease Term shall commence as of the date
hereof. The Initial Term shall terminate on December 31, 2017. This Lease may be renewed,
solely at the option of the City, for ten (10) Renewal Terms, provided, however, that the Lease
Term shall terminate no later than December 31, 2027, except that the Renewal Term beginning
on January 1, 2027 shall terminate upon the City’s payment of the final Base Rental payment as
set forth in Exhibit C. The City hereby finds that the maximum Lease Term hereunder does not
exceed the weighted average useful life of the Leased Property. The City further determines and
declares that the period during which the City has an option to purchase the Trustee’s leasehold
interest in the Leased Property (i.e. the entire maximum Lease Term) does not exceed the useful
life of the Leased Property.
The City Manager or other officer of the City at any time charged with the responsibility
of formulating budget proposals for the City is hereby directed to include in the annual budget
proposals submitted to the City Council, in any year in which this Lease shall be in effect, items
for all payments required for the ensuing Renewal Term under this Lease until such time, if any,
as the City may determine to not renew and terminate this Lease. Notwithstanding this directive
regarding the formulation of budget proposals, it is the intention of the City that any decision to
effect an Appropriation for the Base Rentals and Additional Rentals shall be made solely by the
City Council in its absolute discretion and not by any other official of the City, as further
provided in the following paragraph. During the Lease Term, the City shall in any event,
whether or not the Lease is to be renewed, furnish the Trustee with copies of its annual budget
promptly after the budget is adopted.
Not later than December 15 of the then current Initial Term or any Renewal Term the
City Representative shall give written notice (in substantially the form set forth in Exhibit D
attached hereto) to the Trustee that either:
(a) the City has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts
authorized and directed to be used to pay all of the Base Rentals and (2) sufficient
amounts to pay such Additional Rentals as are estimated to become due, all as further
provided in Sections 6.2, 6.3 and 6.4 of this Lease, whereupon, this Lease shall be
renewed for the ensuing Fiscal Year; or
(b) the City has determined, for any reason, not to renew this Lease for the
ensuing Fiscal Year.
Subject to the provisions of Section 6.4(a) hereof, the failure to give such notice shall not
constitute an Event of Lease Default, nor prevent the City from electing not to renew this Lease,
nor result in any liability on the part of the City. The City’s option to renew or not to renew this
Lease shall be conclusively determined by whether or not the applicable Appropriation has been
made on or before December 31 of each Fiscal Year, all as further provided in Article 6 of this
Lease.
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The terms and conditions hereof during any Renewal Term shall be the same as the terms
and conditions hereof during the Initial Term, except that the Purchase Option Price and the Base
Rentals shall be as provided in Article 12 and Exhibit C (Base Rentals Schedule) hereof.
Section 4.2 Termination of Lease Term. The Lease Term shall terminate upon the
earliest of any of the following events:
(a) the expiration of the Initial Term or any Renewal Term during which there
occurs an Event of Nonappropriation pursuant to Section 4.1 and Article 6 of this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(b) the occurrence of an Event of Nonappropriation under this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(c) the conveyance of the Trustee’s leasehold interest in the Leased Property
under this Lease to the City upon payment of the Purchase Option Price or all Base
Rentals and Additional Rentals, for which an Appropriation has been effected by the City
for such purpose, as provided in Section 12.2(a) or (b) of this Lease; or
(d) an uncured Event of Lease Default and termination of this Lease under
Article 14 of this Lease by the Trustee.
Except for an event described in subparagraph (c) above, upon termination of this Lease, the City
agrees to peacefully deliver possession of the Leased Property to the Trustee.
Termination of the Lease Term shall terminate all unaccrued obligations of the City
under this Lease, and shall terminate the City’s rights of possession under this Lease (except to
the extent of the holdover provisions of Sections 6.5 and 14.2(c)(i) hereof, and except for any
conveyance pursuant to Article 12 of this Lease). All obligations of the City accrued prior to
such termination shall be continuing until the Trustee gives written notice to the City that such
accrued obligations have been satisfied.
Upon termination of the Lease Term any moneys received by the Trustee in excess of the
amounts necessary to terminate and discharge the Indenture, shall be paid to the City.
The City shall not have the right to terminate this Lease due to a default by the Trustee
under this Lease.
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ARTICLE 5
ENJOYMENT OF THE LEASED PROPERTY
Section 5.1 Trustee’s Covenant of Quiet Enjoyment. The Trustee hereby covenants
that the City shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Leased Property without suit, trouble or hindrance from the Trustee. The Trustee shall not
interfere with the quiet use and enjoyment of the Leased Property by the City during the Lease
Term so long as no Event of Lease Default shall have occurred. The Trustee shall, at the request
of the City and at the cost of the City, cooperate fully in any legal action in which the City
asserts against third parties its right to such possession and enjoyment, or which involves the
imposition of any taxes or other governmental charges on or in connection with the Leased
Property. In addition, the City may at its own expense join in any legal action affecting its
possession and enjoyment of the Leased Property and shall be joined in any action affecting its
liabilities hereunder.
The provisions of this Article 5 shall be subject to the Trustee’s right to inspect the
Leased Property and the City’s books and records with respect thereto as provided in Section
11.7 hereof.
Section 5.2 City’s Need for the Leased Property; Determinations as to Fair Value
and Fair Purchase Price. The City has determined and hereby determines that it has a current
need for the Leased Property. It is the present intention and expectation of the City that this
Lease will be renewed annually until the Trustee’s interests in the Site Lease are released and
unencumbered title to the Leased Property is acquired by the City pursuant to this Lease; but this
declaration shall not be construed as contractually obligating or otherwise binding the City. The
City has determined and hereby determines that the Base Rentals under this Lease during the
Lease Term for the Leased Property represent the fair value of the use of the Leased Property
and that the Purchase Option Price for the Leased Property will represent the fair purchase price
of the Trustee’s interest in the Leased Property at the time of the exercise of the option. The City
has determined and hereby determines that the Base Rentals do not exceed a reasonable amount
so as to place the City under an economic compulsion to renew this Lease or to exercise its
option to purchase the Trustee’s interest in the Leased Property hereunder. In making such
determinations, the City has given consideration to the estimated current value of the Leased
Property, the uses and purposes for which the Leased Property will be employed by the City, the
benefit to the citizens and inhabitants of the City by reason of the use and occupancy of the
Leased Property pursuant to the terms and provisions of this Lease, the City’s option to purchase
the Trustee’s interest in the Leased Property and the expected eventual vesting of unencumbered
title to the Leased Property in the City. The City hereby determines and declares that the period
during which the City has an option to purchase the Trustee’s interest in the Leased Property
(i.e., the entire maximum Lease Term for the Leased Property) does not exceed the weighted
average useful life of the Leased Property.
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ARTICLE 6
PAYMENTS BY THE CITY
Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the City.
The City and the Trustee acknowledge and agree that the Base Rentals, Additional Rentals and
any other obligations hereunder shall constitute currently budgeted expenditures of the City, if an
Appropriation has been effected for such purpose. The City’s obligations to pay Base Rentals,
Additional Rentals and any other obligations under this Lease shall be from year to year only (as
further provided in Article 4 and Sections 6.2 and 6.4 hereof), shall extend only to moneys for
which an Appropriation has been effected by the City, and shall not constitute a mandatory
charge, requirement or liability in any ensuing Fiscal Year beyond the then current Fiscal Year.
No provision of this Lease shall be construed or interpreted as a delegation of governmental
powers or as creating a multiple fiscal year direct or indirect debt or other financial obligation
whatsoever of the City or a general obligation or other indebtedness of the City within the
meaning of any constitutional, Charter provision or statutory debt limitation, including without
limitation Article X, Section 20 of the Colorado constitution. No provision of this Lease shall be
construed or interpreted as creating an unlawful delegation of governmental powers nor as a
donation by or a lending of the credit of the City within the meaning of Sections 1 or 2 of Article
XI of the Constitution of the State. Neither this Lease nor the Certificates shall directly or
indirectly obligate the City to make any payments beyond those for which an Appropriation has
been effected by the City for the City’s then current Fiscal Year. The City shall be under no
obligation whatsoever to exercise its option to purchase the Trustee’s leasehold interest in the
Leased Property. No provision of this Lease shall be construed to pledge or to create a lien on
any class or source of City moneys, nor shall any provision of this Lease restrict the future
issuance of any City bonds or obligations payable from any class or source of City moneys
(provided, however, that certain restrictions in the Indenture shall apply to the issuance of
Additional Certificates).
Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals.
(a) The City shall pay Base Rentals for which an Appropriation has been effected by
the City, directly to the Trustee during the Initial Term and any Renewal Term, on the Base
Rentals Payment Dates and in the “Total Base Rentals” amounts set forth in Exhibit C (Base
Rentals Schedule) attached hereto and made a part hereof. For federal and State income tax
purposes, a portion of each payment of Base Rentals for the Certificates is designated and will be
paid as interest, and Exhibit C (Base Rentals Schedule) hereto sets forth the Interest Portion of
each payment of Base Rentals for the Certificates. The City shall receive credit against its
obligation to pay Base Rentals to the extent moneys are held by the Trustee on deposit in the
Base Rentals Fund created under the Indenture and are available to pay Base Rentals. The City
acknowledges that upon receipt by the Trustee of each payment of Base Rentals, the Trustee,
pursuant to the terms of the Indenture, is to deposit the amount of such Base Rentals in the Base
Rentals Fund.
The Base Rentals set forth in Exhibit C shall be recalculated in the event of a partial
optional redemption of the Certificates or the execution and delivery of Additional Certificates as
provided in the Indenture.
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(b) The City may, on any date, pay the then applicable Purchase Option Price for the
purpose of terminating this Lease and the Site Lease in whole and purchasing the Trustee’s
leasehold interest in the Leased Property as further provided in Article 12 of this Lease. Subject
to the Approval of Special Counsel, the City may also, at any time during the Lease Term, (1)
prepay any portion of the Base Rentals due under this Lease and (2) in connection with such
prepayment, recalculate the Base Rentals set forth in Exhibit C (Base Rentals Schedule). Any
such revised Exhibit C (Base Rentals Schedule) shall be prepared by the City Representative and
delivered to the Trustee. The City shall give the Trustee notice of its intention to exercise either
of such options not less than forty-five (45) days in advance of the date of exercise and shall
deposit with the Trustee by not later than the date of exercise an amount equal to the Purchase
Option Price due on the date of exercise or the applicable amount of Base Rentals to be prepaid.
If the City shall have given notice to the Trustee of its intention to prepay Base Rentals but shall
not have deposited the amounts with the Trustee on the date specified in such notice, the City
shall continue to pay Base Rentals which have been specifically appropriated by the City Council
for such purpose as if no such notice had been given. The Trustee may waive the right to receive
forty-five (45) days advance notice and may agree to a shorter notice period in the sole
determination of the Trustee.
(c) All Additional Rentals shall be paid by the City on a timely basis directly to the
person or entity to which such Additional Rentals are owed. Additional Rentals shall include,
without limitation, the reasonable fees and expenses of the Trustee, reasonable expenses of the
Trustee in connection with the Leased Property and for the cost of taxes, insurance premiums,
utility charges, maintenance and repair costs and all other expenses expressly required to be paid
hereunder, including any Rebate Fund payments required pursuant to this Lease and the
Indenture. All of the payments required by this paragraph are subject to Appropriation by the
City; provided, however, a failure by the City to budget and appropriate moneys for any of the
payments required by this paragraph shall constitute an Event of Nonappropriation.
If the City’s estimates of Additional Rentals for any Fiscal Year are not itemized in the
budget required to be furnished to the Trustee under Section 4.1 of this Lease, the City shall
furnish an itemization of such estimated Additional Rentals to the Trustee on or before the 15th
day preceding such Fiscal Year.
Section 6.3 Manner of Payment. The Base Rentals, for which an Appropriation has
been effected by the City, and, if paid, the Purchase Option Price, shall be paid or prepaid by the
City to the Trustee at its corporate trust office by wire transfer of federal funds, certified funds or
other method of payment acceptable to the Trustee in lawful money of the United States of
America to the Trustee at its corporate trust office.
The obligation of the City to pay the Base Rentals and Additional Rentals as required
under this Article 6 and other sections hereof in any Fiscal Year for which an Appropriation has
been effected by the City for the payment thereof shall be absolute and unconditional and
payment of the Base Rentals and Additional Rentals in such Fiscal Years shall not be abated
through accident or unforeseen circumstances, or any default by the Trustee under this Lease, or
under any other agreement between the City and the Trustee, or for any other reason including
without limitation, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Leased Property, commercial frustration of purpose, or failure of
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the Trustee, to perform and observe any agreement, whether expressed or implied, or any duty,
liability or obligation arising out of or connected with this Lease, it being the intention of the
parties that the payments required by this Lease will be paid in full when due without any delay
or diminution whatsoever, subject only to the annually renewable nature of the City’s obligation
hereunder as set forth in Section 6.1 hereof, and further subject to the City’s rights under Section
10.3 hereof. Notwithstanding any dispute between the City and the Trustee, the City shall,
during the Lease Term, make all payments of Base Rentals and Additional Rentals in such Fiscal
Years and shall not withhold any Base Rentals or Additional Rentals, for which an Appropriation
has been effected by the City, pending final resolution of such dispute (except to the extent
permitted by Sections 8.2 and 9.3 hereof with respect to certain Additional Rentals), nor shall the
City assert any right of set-off or counterclaim against its obligation to make such payments
required hereunder. No action or inaction on the part of the Trustee shall affect the City’s
obligation to pay all Base Rentals and Additional Rentals, for which a specific Appropriation has
been effected by the City for such purpose, in such Fiscal Years subject to this Article (except to
the extent provided by Sections 8.2 and 9.3 hereof with respect to certain Additional Rentals).
Section 6.4 Nonappropriation. In the event that the City gives notice that it intends to
not renew this Lease as provided by Section 4.1 hereof or the City does not effect an
Appropriation, on or before December 31 of each Fiscal Year, of moneys to pay all Base Rentals
and reasonably estimated Additional Rentals coming due for the next ensuing Renewal Term as
provided in Section 4.1 hereof and this Article, or in the event that the City is proceeding under
the provisions of Section 10.3(c) hereof (when applicable), an Event of Nonappropriation shall
be deemed to have occurred; subject, however, to each of the following provisions:
(a) In the event the Trustee does not receive the written notice provided for by
Section 4.1 hereof or evidence that an Appropriation has been effected by the City on or
before December 31 of a Fiscal Year, then the Trustee shall declare an Event of
Nonappropriation on the first Business Day of the February following such Fiscal Year or
such declaration shall be made on any earlier date on which the Trustee receives official,
specific written notice from the City that this Lease will not be renewed; provided that
the Trustee’s failure to declare an Event of Nonappropriation on such date shall not be
construed as a waiver of the Event of Nonappropriation or the consequences of an Event
of Nonappropriation under this Lease. In order to declare an Event of Nonappropriation,
the Trustee shall send written notice thereof to the City.
(b) The Trustee shall waive any Event of Nonappropriation which is cured by
the City, within 30 days of the receipt by the City of notice from the Trustee as provided
in (a) above, by a duly effected Appropriation to pay all Base Rentals and sufficient
amounts to pay reasonably estimated Additional Rentals coming due for such Renewal
Term.
(c) Pursuant to the terms of the Indenture, the Trustee may, with the prior
written consent of the Initial Purchaser, waive any Event of Nonappropriation which is
cured by the City within a reasonable time with the procedure described in (b) above.
In the event that during the Initial Term or any Renewal Term, any Additional Rentals
shall become due which were not included in a duly effected Appropriation and moneys are not
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specifically budgeted and appropriated or otherwise made available to pay such Additional
Rentals within 60 days subsequent to the date upon which such Additional Rentals are due, an
Event of Nonappropriation shall be deemed to have occurred, upon notice by the Trustee to the
City to such effect (subject to waiver by the Trustee as hereinbefore provided).
If an Event of Nonappropriation occurs, the City shall not be obligated to make payment
of the Base Rentals or Additional Rentals or any other payments provided for herein which
accrue after the last day of the Initial Term or any Renewal Term during which such Event of
Nonappropriation occurs; provided, however, that, subject to the limitations of Sections 6.1 and
14.3 hereof, the City shall continue to be liable for Base Rentals and Additional Rentals allocable
to any period during which the City shall continue to occupy, use or retain possession of the
Leased Property.
Subject to Section 6.5 hereof, the City shall in all events vacate or surrender possession
of the Leased Property by March 1 of the Renewal Term in respect of which an Event of
Nonappropriation has occurred.
After March 1 of the Renewal Term in respect of which an Event of Nonappropriation
has occurred, the Trustee may proceed to exercise all or any Lease Remedies.
The City acknowledges that, upon the occurrence of an Event of Nonappropriation (a) the
Trustee shall be entitled to all moneys then being held in all funds created under the Indenture
(except the Rebate Fund and any defeasance escrow accounts) to be used as described therein
and (b) all property, funds and rights then held or acquired by the Trustee upon the termination
of this Lease by reason of an Event of Nonappropriation are to be held by the Trustee in
accordance with the terms of the Indenture.
Notwithstanding anything herein to the contrary, so long as the Initial Purchaser is the
sole Owner of the Outstanding Certificates, upon the occurrence of an Event of
Nonappropriation or Event of Default as described herein or in the Indenture, the Trustee shall
provide written notice thereof to the Initial Purchaser and shall proceed in accordance with any
written instructions received by the Initial Purchaser. Before taking any such action as directed
by the Initial Purchaser, the Trustee shall be entitled to the indemnification provided in the
Indenture.
Section 6.5 Holdover Tenant. If the City fails to vacate the Leased Property after
termination of this Lease, whether as a result of the occurrence of an Event of Nonappropriation
or an Event of Lease Default as provided in Section 14.1(a) hereof, with the written permission
of the Trustee it will be deemed to be a holdover tenant on a month-to-month basis, and will be
bound by all of the other terms, covenants and agreements of this Lease. Any holding over by
the City without the written permission of the Trustee shall be at sufferance. The amount of rent
to be paid monthly during any period when the City is deemed to be a holdover tenant will be
equal to (a) one-sixth of the Interest Portion of the Base Rentals coming due on the next
succeeding Base Rentals Payment Date plus one-twelfth of the Principal Portion of the Base
Rentals coming due on the next succeeding Base Rentals Payment Date on which a Principal
Portion of the Base Rentals would have been payable with appropriate adjustments to ensure the
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full payment of such amounts on the due dates thereof in the event termination occurs during a
Renewal Term plus (b) Additional Rentals as the same shall become due.
Section 6.6 Prohibition of Adverse Budget or Appropriation
Modifications. To the extent permitted by law, the City shall not, during any Fiscal Year of the
Lease Term, make any budgetary transfers or other modifications to its then existing budget and
appropriation measures relating to the Leased Property or this Lease which would adversely
affect the City’s ability to meet its obligation to pay Base Rentals and duly budgeted and
appropriated Additional Rentals hereunder.
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ARTICLE 7
SITE LEASE; TITLE INSURANCE
Section 7.1 Site Lease. At the time of the execution and delivery of this Lease, the City
shall have leased to the Trustee, and the Trustee shall have leased from the City, the Leased
Property pursuant to the Site Lease. As further provided in Section 8.1 hereof, a leasehold
interest in the Leased Property shall be held by the Trustee, subject to this Lease.
Section 7.2 Title Insurance. The Trustee shall be provided with a Leasehold Owner’s
title insurance policy insuring the Trustee’s leasehold estate in the Leased Property under the Site
Lease, subject only to Permitted Encumbrances, with such policy to be in an amount not less than
the aggregate principal amount of the Certificates or such lesser amount as shall be the maximum
insurable value of the Leased Property. Such policy, or a binding commitment therefor, shall be
provided to the Trustee concurrently with the execution and delivery of the Certificates and in
connection with the issuance of any series of additional Certificates.
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ARTICLE 8
TITLE TO LEASED PROPERTY;
LIMITATIONS ON ENCUMBRANCES
Section 8.1 Title to the Leased Property. At all times during the Lease Term, title to
the Leased Property shall remain in the City, subject to the Site Lease, this Lease, the Indenture
and any other Permitted Encumbrances. Except personal property purchased by the City at its
own expense pursuant to Section 9.2 of this Lease, a leasehold estate in the Leased Property and
any and all additions and modifications thereto and replacements thereof shall be held in the
name of the Trustee until the Trustee has exercised Lease Remedies or until the Trustee’s
leasehold interest in the Leased Property is conveyed to the City as provided in Article 12 of this
Lease, or until termination of the Site Lease, notwithstanding (i) the occurrence of an Event of
Nonappropriation as provided in Section 6.4 of this Lease or one or more Events of Lease
Default as defined in Section 14.1 of this Lease; (ii) the occurrence of any event of damage,
destruction, condemnation or construction defect or title defect, as provided in Article X of this
Lease or (iii) the violation by the Trustee (or by the Trustee as assignee of the Lessor pursuant to
the Indenture) of any provision of the Site Lease or this Lease.
Section 8.2 No Encumbrance, Mortgage or Pledge of the Leased Property Except
as may be permitted by this Lease, the City shall not permit any mechanic’s or other lien to be
established or remain against the Leased Property; provided that, if the City shall first notify the
Trustee of the intention of the City to do so, the City may in good faith contest any mechanic’s or
other lien filed or established against the Leased Property, and in such event may permit the
items so contested to remain undischarged and unsatisfied during the period of such contest and
any appeal therefrom unless the Trustee shall notify the City that, in the opinion of Counsel, by
nonpayment of any such items the Trustee’s interest in the Leased Property will be materially
endangered, or the Leased Property or any part thereof will be subject to loss or forfeiture, in
which event the City shall promptly pay and cause to be satisfied and discharged all such unpaid
items (provided, however, that such payment shall not constitute a waiver of the right to continue
to contest such items). The Trustee will cooperate in any such contest. Except as may be
permitted by this Lease, the City shall not directly or indirectly create, incur, assume or suffer to
exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased
Property, except Permitted Encumbrances. The City shall promptly, at its expense, take such
action as may be necessary to duly discharge any such mortgage, pledge, lien, charge,
encumbrance or claim not excepted above.
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ARTICLE 9
MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES
Section 9.1 Maintenance of the Leased Property by the City. Subject to its right to
not appropriate and as otherwise provided in Section 10.3 hereof, the City agrees that at all times
during the Lease Term, the City will maintain, preserve and keep the Leased Property or cause
the Leased Property to be maintained, preserved and kept, in good repair, working order and
condition, and from time to time make or cause to be made all necessary and proper repairs,
including replacements, if necessary. The Trustee shall have no responsibility in any of these
matters or for the making of any additions, modifications or replacements to the Leased Property.
Section 9.2 Modification of the Leased Property; Installation of Furnishings and
Machinery of the City. The City shall have the privilege of making additions, modifications
and improvements to the Leased Property, at its own cost and expense, as appropriate and any
such additions, modifications and improvements to the Leased Property; shall be the property of
the City, subject to the Site Lease, this Lease and the Indenture and shall be included under the
terms of the Site Lease, this Lease and the Indenture; provided, however, that such additions,
modifications and improvements shall not in any way damage the Leased Property or cause the
Leased Property to be used for purposes other than what was its intended purpose upon
construction or other lawful governmental functions of the City (except to the extent of
subleasing permitted under Section 13.2 hereof) or cause the City to violate its tax covenant in
Section 11.5 hereof; and provided that the Leased Property, as improved or altered, upon
completion of such additions, modifications and improvements, shall be of a value not less than
the value of the Leased Property immediately prior to such making of additions, modifications
and improvements.
The City may also, from time to time in its sole discretion and at its own expense, install
machinery, equipment and other tangible property in or on the Leased Property. All such
machinery, equipment and other tangible property shall remain the sole property of the City in
which the Trustee shall have no interests; provided, however, that title to any such machinery,
equipment and other tangible property shall become part of the Leased Property and be included
under the terms of this Lease to the extent that (a) any such machinery, equipment or other
tangible property is permanently affixed to the Leased Property or (b) the removal of such
machinery, equipment or other tangible property would damage or impair the Leased Property.
The City shall have the right to make substitutions to the Leased Property upon
compliance with the provisions set forth in Section 11.4 hereof.
Section 9.3 Taxes, Other Governmental Charges and Utility Charges. In the event
that the Leased Property shall, for any reason, be deemed subject to taxation, assessments or
charges lawfully made by any governmental body, the City shall pay the amount of all such
taxes, assessments and governmental charges then due, as Additional Rentals. With respect to
special assessments or other governmental charges which may be lawfully paid in installments
over a period of years, the City shall be obligated to provide for Additional Rentals only for such
installments as are required to be paid during the upcoming Fiscal Year. Except for Permitted
Encumbrances, the City shall not allow any liens for taxes, assessments or governmental charges
to exist with respect to the Leased Property (including, without limitation, any taxes levied upon
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the Leased Property which, if not paid, will become a charge on the rentals and receipts from the
Leased Property, or any interest therein, including the interests of the Trustee), or the rentals and
revenues derived therefrom or hereunder. The City shall also pay as Additional Rentals, as the
same respectively become due, all utility and other charges and fees and other expenses incurred
in the operation, maintenance and upkeep of the Leased Property.
The City may, at its expense, in good faith contest any such taxes, assessments, utility
and other charges and, in the event of any such contest, may permit the taxes, assessments, utility
or other charges so contested to remain unpaid during the period of such contest and any appeal
therefrom unless the Trustee shall notify the City that, in the opinion of Counsel, by nonpayment
of any such items the value of the Leased Property will be materially endangered or the Leased
Property will be subject to loss or forfeiture, or the Trustee will be subject to liability, in which
event such taxes, assessments, utility or other charges shall be paid forthwith (provided,
however, that such payment shall not constitute a waiver of the right to continue to contest such
taxes, assessments, utility or other charges).
Section 9.4 Provisions For Liability and Property Insurance. Upon the execution
and delivery of this Lease, the City shall, at its own expense, cause casualty and property
insurance to be carried and maintained with respect to the Leased Property in an amount equal to
the estimated replacement cost of the Leased Property. Such insurance policy or policies may
have a deductible clause in an amount deemed reasonable by the City Council. The City may, in
its discretion, insure the Leased Property under blanket insurance policies which insure not only
the Leased Property, but other buildings as well, as long as such blanket insurance policies
comply with the requirements hereof. If the City shall insure against similar risks by self-
insurance, the City may, at its election provide for casualty and property damage insurance with
respect to the Leased Property, partially or wholly by means of a self-insurance fund. If the City
shall elect to self-insure, the City Representative shall annually furnish to the Trustee a
certification of the adequacy of the City’s reserves. The Trustee shall be named as an additional
insured and loss payee on any casualty and property insurance.
Upon the execution and delivery of this Lease, the City shall, at its own expense, cause
public liability insurance to be carried and maintained with respect to the activities to be
undertaken by and on behalf of the City in connection with the use of the Leased Property, in an
amount not less than the limitations provided in the Colorado Governmental Immunity Act
(Article 10, Title 24, Colorado Revised Statutes, as heretofore or hereafter amended). Such
insurance may contain deductibles and exclusions deemed reasonable by the City Council. The
public liability insurance required by this Section may be by blanket insurance policy or policies.
If the City shall insure against similar risks by self-insurance, the City, at its election may
provide for public liability insurance with respect to the Leased Property, partially or wholly by
means of a self-insurance fund. If the City shall elect to self-insure, the City Representative shall
annually furnish to the Trustee a certification of the adequacy of the City’s reserves. The Trustee
shall be named as additional insured and loss payee on any public liability insurance.
Any casualty and property damage insurance policy required by this Section shall be so
written or endorsed as to make payments under such insurance policy payable to the City and the
Trustee. Each insurance policy provided for in this Section shall contain a provision to the effect
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that the insurance company shall not cancel the policy without first giving written notice thereof
to the City at least 30 days in advance of such cancellation.
Upon the initial execution and delivery of this Lease, the City shall provide the Trustee
with evidence that the insurance required pursuant to this Section 9.4 is in effect. A certification
by the City or the City’s insurance agent that such insurance is in effect shall be sufficient
evidence of insurance. On or about October 1 in each year the City shall provide an annual
certification to the Trustee that the insurance required pursuant to this Section 9.4 is in effect.
Section 9.5 Advances. If the City fails to pay any Additional Rentals during the Lease
Term as such Additional Rentals become due, the Trustee may (but shall not be obligated to) pay
such Additional Rentals and the City agrees to reimburse the Trustee to the extent permitted by
law and subject to Appropriation as provided under Article 6 hereof.
Section 9.6 Granting of Easements. As long as no Event of Nonappropriation or
Event of Lease Default shall have happened and be continuing, the Trustee, shall upon the
request of the City, (a) grant or enter into easements, permits, licenses, party wall and other
agreements, rights-of-way (including the dedication of public roads) and other rights or
privileges in the nature of easements, permits, licenses, party wall and other agreements and
rights of way with respect to any property or rights included in this Lease (whether such rights
are in the nature of surface rights, sub-surface rights or air space rights), free from this Lease and
any security interest or other encumbrance created hereunder or thereunder; (b) release existing
easements, permits, licenses, party wall and other agreements, rights-of-way, and other rights
and privileges with respect to such property or rights, with or without consideration; and (c)
execute and deliver any instrument necessary or appropriate to grant, enter into or release any
such easement, permit, license, party wall or other agreement, right-of-way or other grant or
privilege upon receipt of: (i) a copy of the instrument of grant, agreement or release and (ii) a
written application signed by the City Representative requesting such grant, agreement or release
and stating that such grant, agreement or release will not materially impair the effective use or
materially interfere with the operation of the Leased Property, and will not materially adversely
affect the security intended to be given by or under the Indenture, the Site Lease or this Lease.
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ARTICLE 10
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
Section 10.1 Damage, Destruction and Condemnation. If, during the Lease Term:
(a) the Leased Property shall be destroyed (in whole or in part), or damaged
by fire or other casualty; or
(b) title to, or the temporary or permanent use of, the Leased Property or any
portion thereof or the estate or any interest of the City or the Trustee in the Leased
Property is taken under the exercise of the power of eminent domain by any
governmental body or by any person, firm or entity acting under governmental authority;
or
(c) a breach of warranty or a material defect in the construction, manufacture
or design of the Leased Property becomes apparent; or
(d) title to or the use of all or a portion of the Leased Property is lost by
reason of a defect in title thereto.
then the City shall be obligated to continue to pay Base Rentals and Additional Rentals (subject
to Article 6 hereof).
Section 10.2 Obligation to Repair and Replace the Leased Property. The City and
the Trustee, to the extent Net Proceeds are within their respective control, shall cause such Net
Proceeds of any insurance policies, performance bonds or condemnation awards to be deposited
in a separate trust fund with the Trustee. All Net Proceeds so deposited shall be disbursed by the
Trustee to the prompt repair, restoration, modification, improvement or replacement of the
Leased Property, upon receipt of requisitions by the Trustee signed by the City Representative,
stating with respect to each payment to be made:
(a) the requisition number;
(b) the name and address of the person, firm or entity to whom payment is
due;
(c) the amount to be paid; and
(d) that each obligation mentioned therein has been properly incurred, is a
proper charge against the separate trust fund and has not been the basis of any previous
withdrawal and specifying in reasonable detail the nature of the obligation, accompanied
by a bill or a statement of account for such obligation.
The Trustee shall have no duty to review or examine the accompanying bill, invoice or
statement of account, but may conclusively rely on the properly executed disbursement request.
The City and the Trustee shall agree to cooperate and use their best reasonable efforts subject to
the terms of the Indenture to enforce claims which may arise in connection with material defects
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in the construction, manufacture or design of the Leased Property or otherwise. If there is a
balance of any Net Proceeds remaining after such repair, restoration, modification, improvement
or replacement has been completed, this balance shall be used by the City, to:
(a) add to, modify or alter the Leased Property or add new components
thereto, or
(b) prepay the Base Rentals with a corresponding adjustment in the amount of
Base Rentals payable under Exhibit C (Base Rentals Schedule) to this Lease or
(c) accomplish a combination of (a) and (b).
Any repair, restoration, modification, improvement or replacement of the Leased
Property paid for in whole or in part out of Net Proceeds allocable to the Leased Property shall
be the property of the City, subject to the Site Lease, this Lease and the Indenture and shall be
included as part of the Leased Property under this Lease.
Section 10.3 Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay
in full the cost of any repair, restoration, modification, improvement or replacement of the
Leased Property required under Section 10.2 of this Lease, the City may elect to:
(a) complete the work or replace such Leased Property (or portion thereof)
with similar property of a value equal to or in excess of such portion of the Leased
Property and pay as Additional Rentals, to the extent amounts for Additional Rentals
which have been specifically appropriated by the City are available for payment of such
cost, any cost in excess of the amount of the Net Proceeds, and the City agrees that, if by
reason of any such insufficiency of the Net Proceeds, the City shall make any payments
pursuant to the provisions of this paragraph, the City shall not be entitled to any
reimbursement therefor from the Trustee, nor shall the City be entitled to any diminution
of the Base Rentals and Additional Rentals, for which a specific Appropriation has been
effected by the City for such purpose, payable under Article 6 of this Lease; or
(b) apply the Net Proceeds allocable to the Leased Property to the payment of
the Purchase Option Price in accordance with Article 12 of this Lease, or an appropriate
portion thereof. In the event of an insufficiency of the Net Proceeds for such purpose, the
City shall, subject to the limitations of Section 6.1 hereof, pay such amounts as may be
necessary to equal that portion of the Purchase Option Price which is attributable to the
Leased Property for which Net Proceeds have been received (as certified to the Trustee
by the City); and in the event the Net Proceeds shall exceed such portion of the Purchase
Option Price, such excess shall be used as directed by the City in the same manner as set
forth in Section 10.2 hereof; or
(c) if the City does not timely budget and appropriate sufficient funds to
proceed under either (a) or (b) above, an Event of Nonappropriation will be deemed to
have occurred and, subject to the City’s right to cure, the Trustee may pursue remedies
available to it following an Event of Nonappropriation.
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The above referenced election shall be made by the City within 90 days after the
occurrence of an event specified in Section 10.1 of this Lease. It is hereby declared to be the
City’s present intention that, if an event described in Section 10.1 hereof should occur and if the
Net Proceeds shall be insufficient to pay in full the cost of repair, restoration, modification,
improvement or replacement of the Leased Property, the City would use its best efforts to
proceed under either paragraph (a) or paragraph (b) above; but it is also acknowledged that the
City must operate within budgetary and other economic constraints applicable to it at the time,
which cannot be predicted with certainty; and accordingly the foregoing declaration shall not be
construed to contractually obligate or otherwise bind the City.
Section 10.4 Cooperation of the Trustee. The Trustee shall cooperate fully with the
City in filing any proof of loss with respect to any insurance policy or performance bond
covering the events described in Section 10.1 of this Lease and in the prosecution or defense of
any prospective or pending condemnation proceeding with respect to the Leased Property and in
the enforcement of all warranties relating to the Leased Property. So long as no Event of Lease
Default or Event of Nonappropriation has occurred and is then existing, the Trustee shall not
voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance
claim performance or payment bond claim, prospective or pending condemnation proceeding
with respect to the Leased Property without the written consent of the City.
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ARTICLE 11
DISCLAIMER OF WARRANTIES; OTHER COVENANTS
Section 11.1 Disclaimer of Warranties. THE TRUSTEE HAS NOT MADE AND
WILL NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED
PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE LEASED PROPERTY. THE CITY HEREBY ACKNOWLEDGES AND DECLARES
THAT THE CITY IS SOLELY RESPONSIBLE FOR THE CONDITION, MAINTENANCE,
REPAIR AND OPERATION OF THE LEASED PROPERTY, AND THAT THE TRUSTEE
HAS NO RESPONSIBILITY THEREFOR. For the purpose of enabling the City to discharge
such responsibility, the Trustee constitutes and appoints the City as its attorney in fact for the
purpose of asserting and enforcing, at the sole cost and expense of the City, all manufacturer’s
and contractor’s warranties and guaranties, express or implied, with respect to the Leased
Property, as well as any claims or rights the Trustee may have in respect of the Leased Property
against any manufacturer, supplier, contractor or other person. Except as otherwise provided in
this Lease, the Trustee shall not be liable for any direct or indirect, incidental, special, punitive or
consequential damage in connection with or arising out of this Lease or the existence, furnishing,
functioning or use by the City of any item, product or service provided for herein except that
nothing shall relieve the Trustee’s liability for any claims, damages, liability or court awards,
including costs, expenses and attorney fees, relating to or arising from the Trustee’s actions or
omissions that result from the negligence, bad faith or intentional misconduct of the Trustee or
its employees.
Section 11.2 Further Assurances and Corrective Instruments. The Trustee and the
City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such amendments hereof or supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate or incorrect
description of the Leased Property.
Section 11.3 Compliance with Requirements. During the Lease Term, the City and
the Trustee shall observe and comply promptly to the extent possible with all current and future
orders of all courts having jurisdiction over the Leased Property, provided that the City and the
Trustee may contest or appeal such orders so long as they are in compliance with such orders
during the contest or appeal period, and all current and future requirements of all insurance
companies writing policies covering the Leased Property.
Section 11.4 Release and Substitution of Leased Property. So long as no Event of
Default or Event of Nonappropriation shall have occurred and be continuing, the City shall be
entitled to substitute any improved or unimproved real property (collectively, the “Replacement
Property”), for any Leased Property then subject to the Site Lease, this Lease and the Indenture,
upon receipt by the Trustee of a written request of the City Representative requesting such
release and substitution, provided that:
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(a) such Replacement Property shall have an equal or greater value and utility
(but not necessarily the same function) to the City as the Leased Property proposed to be
released, as determined by a certificate from the City to that effect;
(b) the fair market value of the Replacement Property shall be not less than
the fair market value of the Leased Property proposed to be released from this Lease and
the Indenture, or, in the alternative, the fair market value of the Leased Property
remaining after the proposed release shall be at least equal to the aggregate principal
amount of the Outstanding Certificates. The fair market value of any improved or
unimproved real property shall be determined by an M.A.I. appraisal report prepared by
an independent real estate appraiser and submitted by the City to the Trustee;
(c) the Initial Purchaser has consented in writing to the substitution of the
Replacement Property; and
(d) the execution and delivery of such supplements and amendments to the
Site Lease, as applicable, this Lease and the Indenture and any other documents
necessary to subject any Replacement Property to be substituted for the portion of the
Leased Property to be released to the lien of the Indenture have taken place.
The Trustee shall cooperate with the City in implementing the City’s rights to release and
substitute property pursuant to this Section 11.4 and shall execute any and all conveyances,
releases or other documents necessary or appropriate in connection therewith.
Section 11.5 Tax Covenants. The City acknowledges that the moneys in all funds and
accounts expected to be created under the Indenture are to be invested or deposited by the
Trustee, at the written direction of the City.
The City covenants for the benefit of the Owners of the Certificates that it will not take
any action or omit to take any action with respect to the Certificates, the proceeds thereof, any
other funds of the City or any facilities financed with the proceeds of the Certificates (except for
the possible exercise of the City’s right to terminate this Lease as provided herein) if such action
or omission (i) would cause the interest on the Certificates to lose its exclusion from gross
income for federal income tax purposes under Section 103 of the Tax Code, or (ii) would cause
interest on the Certificates to lose its exclusion from alternative minimum taxable income as
defined in Section 55(b)(2) of the Tax Code, except to the extent that such interest is required to
be included in calculating the adjusted current earnings adjustment applicable to corporations for
purposes of computing the alternative minimum taxable income of corporations, or (iii) would
cause interest on the Certificates to lose its exclusion from Colorado taxable income or to lose its
exclusion from Colorado alternative minimum taxable income under present Colorado law.
Subject to the City’s right to terminate this Lease as provided herein, the foregoing covenant
shall remain in full force and effect, notwithstanding the payment in full or defeasance of the
Certificates, until the date on which all obligations of the City in fulfilling the above covenant
under the Tax Code and Colorado law have been met.
In addition, the City covenants that its direction of investments pursuant to Article 5 of
the Indenture shall be in compliance with the procedures established by the Tax Certificate to the
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extent required to comply with its covenants contained in the foregoing provisions of this
Section. The City hereby agrees that, to the extent necessary, it will, during the Lease Term, pay
to the Trustee such sums as are required for the Trustee to pay the amounts due and owing to the
United States Treasury as rebate payments. Any such payment shall be accompanied by
directions to the Trustee to pay such amounts to the United States Treasury. Any payment of
City moneys pursuant to the foregoing sentence shall be Additional Rentals for all purposes of
this Lease.
The City is to execute the Tax Certificate in connection with the execution and delivery
of this Lease, which Tax Certificate shall provide further details in respect of the City’s tax
covenants herein.
Section 11.6 Covenant to Reimburse Legal Expenses. To the extent permitted by law
and subject to Appropriation by the City Council, the City shall defend and hold harmless the
Trustee against claims arising from the alleged negligent acts or omissions of the City’s public
employees, which occurred or are alleged to have occurred during the performance of their
duties and within the scope of their employment, unless such acts or omissions are, or are alleged
to be, willful and wanton. Such claims shall be subject to the limitations of the Colorado
Governmental Immunity Act, C.R.S. 24-10-101 to 24-10-120. The City shall include as
Additional Rentals, the reimbursement of reasonable and necessary expenses incurred by the
Trustee to defend the Trustee from and against all claims, by or on behalf of any person, firm,
corporation or other legal entity arising from the conduct or management of the Leased Property
or from any work or thing done on the Leased Property during the Lease Term requested by the
City, or from any condition of the Leased Property caused by the City. This duty to reimburse
the Trustee’s legal expenses is not an indemnification and it is expressly understood that the City
is not indemnifying the Trustee and, as previously stated, is limited to Net Proceeds and moneys,
if any, in excess of such Net Proceeds, for which an Appropriation has been effected.
Section 11.7 Access to the Leased Property; Rights to Inspect Books. The City
agrees that the Trustee shall have the right at all reasonable times to examine and inspect the
Leased Property (subject to such regulations as may be imposed by the City for security
purposes) and all of the City’s books and records with respect thereto, but the Trustee has no
duty to inspect the Leased Property or such books or records. The City further agrees that the
Trustee shall have such rights of access to the Leased Property as may be reasonably necessary
to cause the proper maintenance of the Leased Property in the event of failure by the City to
perform its obligations under this Lease. The Indenture allows the City to have the right at all
reasonable times to examine and inspect all of the Trustee’s books and records with respect to
the Leased Property and all funds and accounts held under the Indenture.
The City and its representatives shall have the right to examine and inspect the books and
records of the Trustee relating to the Leased Property at all reasonable times from the date of this
Lease and until three years after the termination date of this Lease.
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ARTICLE 12
PURCHASE OPTION
Section 12.1 Purchase Option. The City shall have the option to purchase the Trustee’s
leasehold interest in the Leased Property at any time, but only if an Event of Lease Default or an
Event of Nonappropriation has not occurred and is then continuing. The City may exercise its
option on any date by complying with one of the conditions set forth in Section 12.2.
The City shall give the Trustee notice of its intention to exercise its option not less than
forty-five (45) days in advance of the date of exercise and shall deposit the required moneys with
the Trustee on or before the date selected by the City to pay the Purchase Option Price. The
Trustee may waive such notice or may agree to a shorter notice period in the sole determination
of the Trustee.
If the City shall have given notice to the Trustee of its intention to purchase the Trustee’s
leasehold interest in the Leased Property, but shall not have deposited the amounts with the
Trustee on the date specified in such notice, the City shall continue to pay Base Rentals, which
have been specifically appropriated by the City for such purpose, as if no such notice had been
given.
Section 12.2 Transfer, Conveyance and Release of Leased Property. The Trustee
shall release the Trustee’s leasehold interest in the Leased Property and in the manner provided
for in Section 12.3 of this Lease; provided, however, that prior to such transfer, conveyance and
release, either:
(a) the City shall have paid the then applicable Purchase Option Price, plus
any fees and expenses then owing to the Trustee and any other Additional Rentals
required to be paid hereunder; or
(b) the City shall have paid all Base Rentals set forth in Exhibit C (Base
Rentals Schedule) hereto, for the entire maximum Lease Term, and all then current
Additional Rentals required to be paid hereunder.
At the City’s option, amounts then on deposit in any fund held under the Indenture
(except the Rebate Fund and any defeasance escrow funds) may be credited toward the Purchase
Option Price.
Section 12.3 Manner of Conveyance. At the closing of the purchase or other
conveyance of all of the Trustee’s leasehold interest in the Leased Property pursuant to Section
12.2 of this Lease, the Trustee shall release and terminate the Site Lease, this Lease and the
Indenture and execute and deliver to the City any necessary documents releasing, assigning,
transferring and conveying the Trustee’s leasehold interests in the Leased Property, as they then
exist, subject only to the following:
(a) Permitted Encumbrances, other than the Site Lease, this Lease and the
Indenture;
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(b) all liens, encumbrances and restrictions created or suffered to exist by the
Trustee as required or permitted by the Site Lease, this Lease or the Indenture or arising
as a result of any action taken or omitted to be taken by the Trustee as required or
permitted by the Site Lease, this Lease or the Indenture;
(c) any lien or encumbrance created or suffered to exist by action of the City;
and
(d) those liens and encumbrances (if any) to which title to the Leased Property
was subject when leased to the Trustee.
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ARTICLE 13
ASSIGNMENT AND SUBLEASING
Section 13.1 Assignment by the Trustee; Replacement of the Trustee. Except as
otherwise provided in this Lease and the Indenture, this Lease may not be assigned by the
Trustee for any reason other than to a successor by operation of law or to a successor trustee
under the Indenture or with the prior written consent of the City and the Initial Purchaser which
consent shall not be unreasonably withheld. The Trustee will notify the City and the Initial
Purchaser of any assignment to a successor by operation of law.
If an Event of Lease Default or Event of Nonappropriation has occurred and is
continuing, the Trustee may act as herein provided, including exercising the remedies set forth in
Section 14.2, without the prior written direction of the City.
Section 13.2 Assignment and Subleasing by the City. This Lease may not be assigned
by the City for any reason other than to a successor by operation of law. However, the Leased
Property may be subleased, as a whole or in part, by the City without the necessity of obtaining
the consent of the Trustee or any owner of the Certificates subject to each of the following
conditions:
(a) The Leased Property may be subleased, in whole or in part, only to an
agency or department of, or a political subdivision of, the State, or to another entity or
entities with Approval of Special Counsel;
(b) This Lease, and the obligations of the City hereunder, shall, at all times
during the Lease Term remain obligations of the City, and the City shall maintain its
direct relationships with the Trustee, notwithstanding any sublease;
(c) In the opinion of Special Counsel, no sublease by the City shall cause the
Leased Property to be used for any purpose which would cause the City to violate its tax
covenant in Section 11.5 hereof;
(d) The City shall furnish or cause to be furnished to the Trustee a copy of any
sublease agreement; and
(e) Any sublease of the Leased Property shall provide that it is subject to the
terms and conditions of this Lease and that, except as hereinafter provided, it shall
automatically terminate upon a termination of this Lease; provided, however, that upon a
termination of this Lease due to an Event of Default or an Event of Nonappropriation, the
Trustee may, upon notification to the sublessee, keep any such sublease in full force and
effect as a direct lease by the Trustee to the sublessee.
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ARTICLE 14
EVENTS OF LEASE DEFAULT AND REMEDIES
Section 14.1 Events of Lease Default Defined. Any one of the following shall be an
Event of Lease Default under this Lease:
(a) failure by the City to pay any Base Rentals or Additional Rentals, which have
been specifically appropriated by the City for such purpose, during the Initial Term or any
Renewal Term, within five (5) Business Days after the date on which they are due; or
(b) subject to the provisions of Section 6.5 hereof, failure by the City to vacate or
surrender possession of the Leased Property by March 1 of any Renewal Term in respect of
which an Event of Nonappropriation has occurred; or
(c) failure by the City to observe and perform any covenant, condition or agreement
on its part to be observed or performed hereunder, other than as referred to in (a) or (b), for a
period of 30 days after written notice, specifying such failure and requesting that it be remedied
shall be received by the City from the Trustee, unless the Trustee shall agree in writing to an
extension of such time prior to its expiration; provided that if the failure stated in the notice
cannot be corrected within the applicable period, the Trustee shall not withhold its consent to an
extension of such time if corrective action can be instituted by the City within the applicable
period and diligently pursued until the default is corrected; or
(d) failure by the City to comply with the terms of the Site Lease.
The foregoing provisions of this Section 14.1 are subject to the following limitations:
(i) the City shall be obligated to pay the Base Rentals and Additional Rentals,
which have been specifically appropriated by the City for such purpose, only during the
then current Lease Term, except as otherwise expressly provided in this Lease; and
(ii) if, by reason of Force Majeure, the City or the Trustee shall be unable in
whole or in part to carry out any agreement on their respective parts herein contained
other than the City’s agreement to pay the Base Rentals and Additional Rentals due
hereunder, the City or the Trustee shall not be deemed in default during the continuance
of such inability. The City and the Trustee each agree, however, to remedy, as promptly
as legally and reasonably possible, the cause or causes preventing the City or the Trustee
from carrying out their respective agreements; provided that the settlement of strikes,
lockouts and other industrial disturbances shall be entirely within the discretion of the
City.
Section 14.2 Remedies on Default. Whenever any Event of Lease Default shall have
happened and be continuing beyond any applicable cure period, the Trustee may, or shall at the
request of the owners of a majority in aggregate principal amount of the Certificates then
Outstanding and upon indemnification as to costs and expenses as provided in the Indenture,
without any further demand or notice, take one or any combination of the following remedial
steps:
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(a) terminate the Lease Term and give notice to the City to vacate and surrender
possession of the Leased Property, which vacation and surrender the City agrees to complete
within sixty (60) days from the date of such notice; provided, in the event the City does not
vacate and surrender possession on the termination date, the provisions of Section 6.5 hereof
shall apply;
(b) lease or sublease the Leased Property or sell or assign the Trustee’s leasehold
interest in the Leased Property;
(c) recover from the City:
(i) the portion of Base Rentals and Additional Rentals, for which a specific
Appropriation has been effected by the City for such purpose, which
would otherwise have been payable hereunder, during any period in which
the City continues to occupy, use or possess the Leased Property; and
(ii) Base Rentals and Additional Rentals, for which a specific Appropriation
has been effected by the City for such purpose, which would otherwise
have been payable by the City hereunder during the remainder, after the
City vacates and surrenders possession of the Leased Property, of the
Fiscal Year in which such Event of Lease Default occurs.
(d) take whatever action at law or in equity may appear necessary or desirable to
enforce its rights in and to the Leased Property under the Site Lease, this Lease and the
Indenture.
Upon the occurrence of an Event of Nonappropriation, the Trustee shall be entitled to
recover from the City the amounts set forth in Section 14.2(c)(i) hereof if the City continues to
occupy the Leased Property after December 31 of the Fiscal Year in which such Event of
Nonappropriation occurs.
The Trustee shall also be entitled, upon any Event of Lease Default, to any moneys in any
funds or accounts created under the Indenture (except the Rebate Fund and any defeasance
escrow accounts).
Notwithstanding the foregoing provisions or any other provisions in the Site Lease, this
Lease or the Indenture, the Trustee shall not take any remedial action under the Site Lease, this
Lease or the Indenture, including without limitation this Section 14.2, without the prior written
consent and direction of the Initial Purchaser. Before taking any such action as directed by the
Initial Purchaser, the Trustee shall be entitled to the indemnification provided in the Indenture.
Section 14.3 Limitations on Remedies. The remedies in connection with an Event of
Lease Default shall be limited as set forth in this Section. A judgment requiring a payment of
money may be entered against the City by reason of an Event of Lease Default only as to the
City’s liabilities described in paragraph (c) of Section 14.2 hereof. A judgment requiring a
payment of money may be entered against the City by reason of an Event of Nonappropriation
only to the extent that the City fails to vacate and surrender possession of the Leased Property as
required by Section 6.4 of this Lease, and only as to the liabilities described in paragraph (c)(i) of
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Section 14.2 hereof. The remedy described in paragraph (c)(ii) of Section 14.2 of this Lease is
not available for an Event of Lease Default consisting of failure by the City to vacate and
surrender possession of the Leased Property by March 1 following an Event of
Nonappropriation.
Section 14.4 No Remedy Exclusive. Subject to Section 14.3 hereof, no remedy herein
conferred upon or reserved to the Trustee, is intended to be exclusive, and every such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved in this
Article 14, it shall not be necessary to give any notice, other than such notice as may be required
in this Article 14.
Section 14.5 Waivers. With the consent of the Initial Purchaser, the Trustee may waive
any Event of Lease Default under this Lease and its consequences. In the event that any
agreement contained herein should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. Payment of Base Rentals or Additional Rentals by
the City shall not constitute a waiver of any breach or default by the Trustee hereunder.
Section 14.6 Agreement to Pay Attorneys’ Fees and Expenses. In the event that
either party hereto shall default under any of the provisions hereof and the nondefaulting party
shall employ attorneys or incur other expenses for the collection of Base Rentals or Additional
Rentals, or the enforcement of performance or observance of any obligation or agreement on the
part of the defaulting party herein contained, the defaulting party agrees that it shall on demand
therefor pay to the nondefaulting party, to the extent permitted by law, the reasonable fees of
such attorneys and such other reasonable expenses so incurred by the nondefaulting party.
Notwithstanding the foregoing, any such fees and expenses owed by the City hereunder shall
constitute Additional Rentals for all purposes of this Lease and shall be subject to Appropriation.
Section 14.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. To the extent permitted by law, in the case of an Event of Nonappropriation or an Event of
Lease Default neither the Trustee nor the City nor any one claiming through or under either of
them shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force in order to prevent or hinder the
enforcement of the Indenture; and the Trustee and the City, for themselves and all who may at
any time claim through or under either of them, each hereby waives, to the full extent that it may
lawfully do so, the benefit of all such laws. Notwithstanding the foregoing, it is expressly
understood that the City cannot and does not hereby waive its right to set up, claim or seek to
take advantage of its police powers or its Colorado constitutional or statutory right of eminent
domain.
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ARTICLE 15
MISCELLANEOUS
Section 15.1 Sovereign Powers of City. Nothing in this Lease shall be construed as
diminishing, delegating, or otherwise restricting any of the sovereign powers or immunities of
the City. Nothing in this Lease shall be construed to require the City to occupy and operate the
Leased Property other than as lessee, or to require the City to exercise its right to purchase the
Leased Property as provided in Article 12 hereof.
Section 15.2 Notices. All notices, certificates or other communications to be given
hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
certified or registered mail, postage prepaid, addressed as follows:
if to the Trustee, U.S. Bank National Association
950 17
th
Street
Denver, CO 80202
Attention: Global Corporate Trust Services
if to the City, City of Fort Collins, Colorado
300 LaPorte Avenue
Fort Collins, CO 80521
Attention: City Manager
if to the
Initial Purchaser, ZB, N.A.
One South Main Street
Salt Lake City, Utah 84133
The City, the Trustee and the Initial Purchaser may, by written notice, designate any
further or different means of communication or addresses to which subsequent notices,
certificates or other communications shall be sent.
Notices to be given to the Owners of the Certificates, if other than the Initial Purchaser,
shall be sufficiently given and shall be deemed given when delivered or mailed by certified or
registered mail, postage prepaid, addressed to the addresses show in the registration books
maintained by the Trustee.
Section 15.3 Third Party Beneficiaries. It is expressly understood and agreed that the
Initial Purchaser and the Owners of the outstanding Certificates are third party beneficiaries to
this Lease and enforcement of the terms and conditions of this Lease, and all rights of action
relating to such enforcement, shall be strictly reserved to the City, as lessee and the Trustee, as
lessor, and their respective successors and assigns, and to the Initial Purchaser and the Owners of
the Certificates. Except as hereinafter provided, nothing contained in this Lease shall give or
allow any such claim or right of action by any other or third person on this Lease. It is the
express intention of the City and the Trustee that any person other than the City, the Trustee, the
Initial Purchaser or the Owners of the Certificates receiving services or benefits under this Lease
shall be deemed to be an incidental beneficiary only.
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Section 15.4 Binding Effect. This Lease shall inure to the benefit of and shall be
binding upon the Trustee and the City and their respective successors and assigns, subject,
however, to the limitations contained in Article 13 of this Lease.
Section 15.5 Amendments. This Lease may only be amended, changed, modified or
altered with the prior written consent of the City and the Trustee and in accordance with the
provisions of the Indenture. So long as the Initial Purchaser is the registered Owner of all
outstanding Certificates, this Lease may not be materially amended, changed, modified or altered
without the prior written consent of the Initial Purchaser, which consent shall not be
unreasonably withheld.
Section 15.6 Amounts Remaining in Funds. It is agreed by the parties hereto that any
amounts remaining in the Base Rentals Fund, the Costs of Execution and Delivery Fund, or any
other fund or account created under the Indenture (except the Rebate Fund and any defeasance
escrow account), upon termination of the Lease Term, and after payment in full of the
Certificates (or provision for payment thereof having been made in accordance with the
provisions of this Lease and the Indenture) and fees and expenses of the Trustee in accordance
with this Lease and the Indenture, shall belong to and be paid to the City by the Trustee, as an
overpayment of Base Rentals.
Section 15.7 Triple Net Lease. This Lease shall be deemed and construed to be a
“triple net lease” and, subject to the prior Appropriation requirements hereof, the City shall pay
absolutely net during the Lease Term, the Base Rentals, the Additional Rentals and all expenses
of, or other payments in respect of, the Leased Property as required to be paid by the City under
this Lease, for which a specific Appropriation has been effected by the City for such purpose,
free of any deductions, and without abatement, deduction or setoff (other than credits against
Base Rentals expressly provided for in this Lease).
Section 15.8 Computation of Time. In computing a period of days, the first day is
excluded and the last day is included. If the last day of any period is not a Business Day, the
period is extended to include the next day which is a Business Day. If a number of months is to
be computed by counting the months from a particular day, the period ends on the same
numerical day in the concluding month as the day of the month from which the computation is
begun, unless there are not that many days in the concluding month, in which case the period
ends on the last day of that month. Notwithstanding the foregoing, Base Rentals shall be
recalculated in the event of any prepayment of Base Rentals as provided in Section 6.2(b) hereof.
Section 15.9 Payments Due on Holidays. If the date for making any payment or the
last day for performance of any act or the exercising of any right, as provided in this Lease, shall
be a day other than a Business Day, such payment may be made or act performed or right
exercised on the next succeeding Business Day, with the same force and effect as if done on the
nominal date provided in this Lease.
Section 15.10 Severability. Except for the requirement of the City to pay Base Rentals
for which a specific Appropriation has been effected by the City for such purpose and the
requirement of the Trustee to provide quiet enjoyment of the Leased Property and to convey the
Trustee’s leasehold interest in the Leased Property to the City under the conditions set forth in
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Article 12 of this Lease (which, if held invalid or unenforceable by any court of competent
jurisdiction, may have the effect of invalidating or rendering unenforceable the other provisions
of this Lease), in the event that any other provision of this Lease shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 15.11 Execution in Counterparts. This Lease may be simultaneously executed
in several counterparts, each of which shall be an original and all of which shall constitute but
one and the same instrument.
Section 15.12 Applicable Law. This Lease shall be governed by and construed in
accordance with the law of the State of Colorado.
Section 15.13 The Trustee Is Independent of the City. Neither the Trustee nor any
agent or employee of the Trustee shall be or shall be deemed to be an agent or employee of the
City. The Trustee acknowledges that the Trustee and its employees are not entitled to
unemployment insurance benefits of the City unless the Trustee or a third party otherwise
provides such coverage and that the City does not pay for or otherwise provide such coverage.
The Trustee shall have no authorization, express or implied, to bind the City to any agreements,
liability or understanding except as expressly set forth herein.
Section 15.14 Governmental Immunity. Notwithstanding any other provisions of this
Lease to the contrary, no term or condition of this Lease shall be construed or interpreted as a
waiver, express or implied, of any of the immunities, rights, benefits, protections, limitations to
liability or other provisions of the Colorado Governmental Immunity Act, Section 24-10-101, et.
seq., C.R.S., as now or hereafter amended, or under any other law.
Section 15.15 Recitals. The Recitals set forth in this Lease are hereby incorporated by
this reference and made a part of this Lease.
Section 15.16 Captions. The captions or headings herein are for convenience only and in
no way define, limit or describe the scope or intent of any provisions or Sections of this Lease.
Section 15.17 Trustee’s Disclaimer. It is expressly understood and agreed that (a) the
Lease is executed by U.S. Bank National Association solely in its capacity as Trustee under the
Indenture, and (b) nothing herein shall be construed as creating any liability on U.S. Bank
National Association other than in its capacity as Trustee under the Indenture. All financial
obligations of the Trustee under this Lease, except those resulting from its willful misconduct or
negligence, are limited to the Trust Estate.
Section 15.18 Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
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Section 15.19 Information to Initial Purchaser. So long as the Initial Purchaser is the
sole owner of the Certificates, the City agrees that it shall provide the Initial Purchaser with the
City’s annual audited financial statements within 270 days of the end of the City’s fiscal year.
Such information may be provided in electronic format.
IN WITNESS WHEREOF, the parties have executed this Lease Agreement as of the
day and year first above written.
CITY OF FORT COLLINS, COLORADO,
as Lessee
U.S. BANK NATIONAL ASSOCIATION,
solely in its capacity of Trustee under the
Indenture, as Lessor
By: ________________________________ By: ________________________________
Wade Troxell, Mayor Authorized Officer:
Attest:
By:_____________________________
Wanda Winkelmann, City Clerk
[CITY SEAL]
46
STATE OF COLORADO )
) ss.
CITY OF FORT COLLINS )
)
COUNTY OF LARIMER )
The foregoing instrument was acknowledged before me this ____ day of July, 2017, by
Wade Troxell, as Mayor of the City of Fort Collins, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
****************
STATE OF COLORADO )
) ss.
CITY OF FORT COLLINS )
)
COUNTY OF LARIMER )
The foregoing instrument was acknowledged before me this ____ day of July, 2017, by
Wanda Winkelmann, as City Clerk of the City of Fort Collins, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
****************
47
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of July, 2017, by
Jennifer Petruno, as an authorized officer of U.S. Bank National Association, as Trustee.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
A-1
EXHIBIT A
DESCRIPTION OF LEASED PROPERTY
The Leased Property consists of the Site and the building and improvements located thereon as
described below, as amended from time to time.
SITE:
Tracts A, B and C, Fort Collins Senior Center PUD, City of Fort Collins, County of Larimer,
State of Colorado.
IMPROVEMENTS LOCATED ON SITE
The Fort Collins Senior Center, consisting of a two story, 60,487 square foot recreation building.
B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” means, as of any particular time: (a) liens for taxes and
assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to
the provisions of the Lease; (b) the Site Lease, this Lease, the Indenture and any related fixture
filing and any liens arising or granted pursuant to the Lease or the Indenture; (c) utility, access
and other easements and rights of way, licenses, permits, party wall and other agreements,
restrictions and exceptions which the City Representative certifies will not materially interfere
with or materially impair the use or value of Leased Property, including rights or privileges in
the nature of easements, licenses, permits and agreements as provided in the Lease; and (d) the
easements, covenants, restrictions, liens and encumbrances to which title to the Leased Property
was subject when leased to the Trustee pursuant to the Site Lease, as shown below, and which
the City Representative has certified do not and will not interfere in any material way with the
intended use of the Leased Property.
The easements, covenants, restrictions, liens and encumbrances to which title to the
Leased Property was subject when leased to the Trustee pursuant to the Site Lease, and which
the City Representative has certified do not and will not interfere in any material way with the
intended use of the Leased Property, are as follows:
1) RIGHT OF WAY EASEMENT AS GRANTED TO CITY OF FORT COLLINS IN
INSTRUMENT RECORDED APRIL 02, 1985, UNDER RECEPTION NO. 85015147.
2) RIGHT OF WAY EASEMENT AS GRANTED TO CITY OF FORT COLLINS IN
INSTRUMENT RECORDED APRIL 02, 1985, UNDER RECEPTION NO. 85015149.
3) TERMS, CONDITIONS AND PROVISIONS OF SITE AND LANDSCAPE COVENANTS
RECORDED AUGUST 23, 1985 AT RECEPTION NO. 85041841.
4) EASEMENTS, CONDITIONS, COVENANTS, RESTRICTIONS, RESERVATIONS AND
NOTES ON THE PLAT OF FORT COLLINS SENIOR CENTER PUD RECORDED
SEPTEMBER 15, 1993 UNDER RECEPTION NO. 67048.
5) RIGHT OF WAY EASEMENT AS GRANTED TO PUBLIC SERVICE COMPANY OF
COLORADO IN INSTRUMENT RECORDED OCTOBER 24, 1994, UNDER RECEPTION
NO. 94086461.
6) RIGHT OF WAY EASEMENT AS GRANTED TO US WEST COMMUNICATIONS INC IN
INSTRUMENT RECORDED AUGUST 07, 1995, UNDER RECEPTION NO. 95047825.
7) RIGHT OF WAY EASEMENT AS GRANTED TO IN INSTRUMENT RECORDED JULY 28,
2000, UNDER RECEPTION NO. 2000050999 AND MEMORANDUM RECORDED
OCTOBER 3, 2000 AT RECEPTION NO. 2000068406.
8) TERMS, CONDITIONS AND PROVISIONS OF AGREEMENT RECORDED APRIL 10, 2006
AT RECEPTION NO. 2006026212.
9) TERMS, CONDITIONS AND PROVISIONS OF DEED OF DRAINAGE EASEMENT
RECORDED APRIL 10, 2006 AT RECEPTION NO. 2006026213.
10) TERMS, CONDITIONS AND PROVISIONS OF CROSSING AGREEMENT RECORDED
MAY 05, 2014 AT RECEPTION NO. 20140022383.
C-1
EXHIBIT C
BASE RENTALS SCHEDULE
Date
Base Rentals
Principal
Component
Base Rentals
Interest
Component
Total Base
Rentals
Annual Base
Rentals
11/15/2017
5/15/2018
11/15/2018 -
5/15/2019 -
11/15/2019 -
5/15/2020 -
11/15/2020
5/15/2021
11/15/2021
5/15/2022
11/15/2022
5/15/2023
11/15/2023
5/15/2024
11/15/2024
5/15/2025
11/15/2025
5/15/2026
11/15/2026
5/15/2027
TOTAL
________________
Base Rental payments are due on May 15 and November 15 of each year during the
Lease Term. The Base Rentals have been calculated on the basis of a 360-day year of twelve 30-
day months. If Base Rentals are stated to be due on any date that is not a Business Day, such
Base Rentals shall be due on the next day that is a Business Day without the accrual of interest
on Base Rentals between such dates.
Statement Regarding the Leased Property
The duration of the Lease, throughout the maximum Lease Term, does not exceed the
weighted average useful life of the Leased Property.
D-1
36384480v3
EXHIBIT D
FORM OF NOTICE OF LEASE RENEWAL
To: U.S. Bank National Association, as Trustee
Attention: Corporate Trust and Escrow Services
The undersigned is the City Representative of the City of Fort Collins, Colorado (the
“City”). The City is the lessee under that certain Lease Agreement, dated as of July __, 2017
(the “Lease”), between the City and U.S. Bank National Association, solely in its capacity of
Trustee under the Indenture, as the lessor thereunder. I am familiar with the facts herein certified
and am authorized and qualified to certify the same. The undersigned hereby states and certifies:
(a) the City has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts
authorized and directed to be used to pay all the Base Rentals and (2) sufficient amounts
to pay such Additional Rentals as are estimated to become due, all as further provided in
Sections 6.2, 6.3 and 6.4 of the Lease, whereupon, the Lease shall be renewed for the
ensuing Fiscal Year;
_______________
Initial
or
(b) the City has determined not to renew the Lease for the ensuing Fiscal
Year.
_______________
Initial
CITY OF FORT COLLINS, COLORADO
By:
City Representative
Date:____________________________________________
1
Lease Financing – Firehouse Alley Parking Garage
John Voss, Controller and Josh Birks, Economic Health & Redevelopment Director
June 6, 2017
ATTACHMENT 4
Connection to Strategic Plans
2
Proposed Public/Private Partnership Consistent with Strategic Goals
Parking Plan Summary
3
Parking Plan Identified This Location as a Need
• Parking Plan completed in 2013
• Identified 1,500 additional spaces required over next 10 years
• Further analysis identified six structured parking facilities in a ring
around Old Town
• A parking structure on Chestnut was one of the six identified
locations for structured parking
• Hotel and associated parking needs created opportunity for a
public/private partnership
4
Parking Garage Overview
Tier Standard
Van
Accessible
Accessible Total
Ground 84 2 2 88
Second 117 0 2 119
Third 114 0 2 116
Total 315 2 6 323
Tier Hotel Public Total
Ground 84 4 88
Second 23 96 119
Third 0 116 119
Total 107 216 323
5
View from Chestnut looking at Alley
Previous Council Action
• Resolution 2015-101 on November 17, 2015
• agreed with public need of project
• authorized Construction and Purchase Agreement
• required a presentation prior to purchase
6
DDA Contribution to Debt Service
• Currently contributing to debt service for 1999 Civic Center Parking
Structure. Southeast corner Mason and Laporte.
• Final payment June 1, 2018
• Beginning in 2019 the DDA will contribute $300,000 a year towards
debt service
• IGA in process. City Resolution to be presented at July 5 meeting
7
Summary of Terms
• First payment January 15, 2018
• Final payment July 15, 2027
• Average Annual Payment $962,000
• Rate of 2.48%
• Callable at anytime with no prepay fee
• Borrowing
• Issue Costs $ 80,000
• Purchase Price 8,350,000
• Total * 8,430,000
8
* estimate subject to change
Collateral for Lease Financing
• Senior Center is being used instead of parking garage itself
• Reason is to attract more investors/lenders and with more favorable
rates
9
Source of Annual Debt Service
• 2018 General Fund Reserves ($902k in 2018 budget)
• 2019 and forward
• General Fund ongoing $662,000
• DDA contribution $300,000
10
Key Upcoming Dates
• Jul 5 Lease Ordinance, 2nd reading
Budget Ordinance, 2nd reading
Resolution - IGA with DDA
• Jul 18 Debt Financing Closing
• Aug 8 Certificate of Occupancy (estimated date)
• No more than 30 days later, purchase portion of new parking
structure
• Open to public to coincide with opening of Hotel (October)
11
-1-
ORDINANCE NO. 081, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE LEASING OF CERTAIN CITY PROPERTY AND THE EXECUTION
AND DELIVERY BY THE CITY OF A SITE LEASE, A LEASE AGREEMENT, AND
OTHER DOCUMENTS AND MATTERS IN CONNECTION WITH THE FINANCING OF
THE CITY’S ACQUISITION OF CERTAIN PARKING FACILITIES; SETTING FORTH
CERTAIN PARAMETERS AND RESTRICTIONS WITH RESPECT TO THE FINANCING;
AND PROVIDING FOR OTHER MATTERS RELATED THERETO
WHEREAS, the City of Fort Collins, Colorado (the “City”) is a duly organized and
existing home rule municipality of the State of Colorado, created and operating pursuant to
Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the
“Charter”);
WHEREAS, the City is authorized by Article XX, Section 6 of the Colorado
Constitution, and part 8 of Article 15 of title 31, Colorado Revised Statutes (“C.R.S.”), to enter
into rental or leasehold agreements in order to provide necessary land, buildings, equipment and
other property for governmental or proprietary purposes;
WHEREAS, the City Council of the City (the “City Council”) is authorized by Chapter
23, Article IV, Division 2 of the Fort Collins Municipal Code, to lease any and all interests in
real property owned in the name of the City if the City Council first finds that the lease is in the
best interest of the City;
WHEREAS, the City desires to acquire approximately 216 parking spaces in a parking
facility (the “Project”) that is being constructed by Bohemian Companies in connection with a
hotel development project in downtown Fort Collins;
WHEREAS, the City Council has determined and hereby determines that it is in the best
interest of the City to finance the acquisition of the Project by entering into a lease financing
with ZB, N.A., or such other purchaser selected by the City (the “Purchaser”);
WHEREAS, the proceeds of the lease financing will be used to finance the acquisition of
the Project;
WHEREAS, the City Council has determined and hereby determines that the leased
property under the Site Lease (hereinafter defined) and the Lease (hereinafter defined) will
consist of a site of approximately 8.75 acres (the “Site”) and the building and improvements
located thereon, which consists of the Fort Collins Senior Center (as more particularly described
in Exhibit A to the Site Lease and the Lease, the “Leased Property”);
WHEREAS, the City Council now hereby determines that in order to finance the
acquisition of the Project, it is in the best interest of the City and its inhabitants that (a) the City
enter into a Site and Improvement Lease (the “Site Lease”) with U.S. Bank National Association,
as trustee (the “Trustee”) under the Indenture (hereinafter defined) pursuant to which the City
will lease the Leased Property to the Trustee, and that (b) the City enter into a Lease Agreement
-2-
(the “Lease”) with the Trustee pursuant to which the Trustee will lease the Leased Property back
to the City;
WHEREAS, pursuant to the Lease, and subject to the right of the City to terminate the
Lease and other limitations as therein provided, the City will pay certain Base Rentals and
Additional Rentals (as such terms are defined in the Lease) in consideration for the right of the
City to use the Leased Property;
WHEREAS, the City’s obligation under the Lease to pay Base Rentals and Additional
Rentals shall be from year to year only; shall constitute currently budgeted expenditures of the
City; shall not constitute a mandatory charge or requirement in any ensuing budget year; shall
not constitute a general obligation or other indebtedness or multiple fiscal year financial
obligation of the City within the meaning of any constitutional, charter, statutory limitation or
other requirement concerning the creation of indebtedness or multiple fiscal year financial
obligation, nor a mandatory payment obligation of the City in any ensuing fiscal year beyond any
fiscal year during which the Lease shall be in effect;
WHEREAS, the Trustee will enter into an Indenture of Trust (the “Indenture”) pursuant
to which there will be executed and delivered certain certificates of participation (the
“Certificates”) dated as of their date of delivery that shall evidence proportionate interests in the
right to receive certain Revenues (as defined in the Lease), which Certificates shall be payable
solely from the sources therein provided and shall not directly or indirectly obligate the City to
make any payments beyond those appropriated for any fiscal year during which the Lease shall
be in effect;
WHEREAS, the Certificates will be purchased by the Purchaser;
WHEREAS, the proceeds from the sale of the Certificates will finance the acquisition of
the Project by the City and pay the costs of issuance in connection therewith;
WHEREAS, Section 11-57-204 of the Supplemental Public Securities Act, constituting
Title 11, Article 57, Part 2, C.R.S., as amended (the “Supplemental Act”), provides that a public
entity, including the City, may elect in an act of issuance to apply all or any of the provisions of
the Supplemental Act; and
WHEREAS, there has been presented to the City Council and are on file at the City
offices the following: (i) the proposed form of the Site Lease; and (ii) the proposed form of the
Lease.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS, COLORADO as follows:
Section 1. Recitals Incorporated. The foregoing recitals are incorporated herein by
reference and adopted as findings and determinations of the City Council.
Section 2. Ratification and Approval of Prior Actions. All action heretofore taken
(not inconsistent with the provisions of this Ordinance) by the City Council or the officers,
agents or employees of the City relating to the selection of the Purchaser, the execution and
-3-
delivery of the Site Lease and the Lease, the acquisition of the Project, and the sale, execution
and delivery of the Certificates is hereby ratified, approved and confirmed.
Section 3. Finding of Best Interests. The City Council hereby finds and determines,
pursuant to the Constitution, the laws of the State of Colorado and the Charter, that the
acquisition of the Project, and the financing of the costs thereof, including the costs of issuance
incurred in connection therewith, pursuant to the terms set forth in the Site Lease, the Lease and
the Sale Certificate (hereinafter defined) are necessary, convenient, and in furtherance of the
City’s public purposes and are in the best interests of the City and the City Council hereby
authorizes and approves the same.
Section 4. Supplemental Act; Parameters. The City Council hereby elects to apply
all of the provisions of the Supplemental Act to the Site Lease and the Lease and in connection
therewith delegates to each of the City Manager or the Financial Officer of the City (the
“Financial Officer”) the independent authority to make any determination delegable pursuant to
§11-57-205(1)(a-i) C.R.S., as amended, in relation to the Site Lease and the Lease, and to
execute a sale certificate (the “Sale Certificate”) setting forth such determinations, including
without limitation, the term of the Site Lease, the rental amount to be paid by the Trustee
pursuant to the Site Lease, the term of the Lease, and the rental amount to be paid by the City
pursuant to the Lease, subject to the following parameters and restrictions:
a. the term of the Site Lease shall not extend beyond December 31, 2032;
b. the aggregate rental amount to be paid by the Trustee pursuant to the Site
Lease shall not be less than $9,995,000;
c. the Lease Term shall not extend beyond December 31, 2027;
d. the maximum annual repayment cost of the Base Rentals under the Lease
shall not exceed $995,000, and the aggregate principal amount of the Base
Rentals payable by the City pursuant to the Lease shall not exceed
$8,600,000;
e. the maximum interest rate on the interest component of the Base Rentals
relating to the Certificates shall not exceed 2.75%; and
f. the purchase price of the Certificates shall not be less than 100% of the
principal amount of the Certificates.
Pursuant to §11-57-205 of the Supplemental Act, the City Council hereby delegates to
each of the City Manager or the Financial Officer the independent authority to select the
purchaser of the Certificates, to sign a contract for the purchase of the Certificates or to accept a
binding bid for the Certificates and to execute any agreement or agreements in connection
therewith.
The delegation set forth in this Section 4 shall be effective for one year following the date
hereof.
-4-
The City Council hereby agrees and acknowledges that the net proceeds of the
Certificates will be used, together with other available moneys of the City, to finance the costs of
acquiring the Project and to pay costs of issuance.
Section 5. Approval of Documents. The Site Lease and the Lease, in substantially
the forms presented to the City Council and on file with the City Clerk in connection with this
Ordinance, are in all respects approved, authorized and confirmed, and the Mayor of the City is
hereby authorized and directed for and on behalf of the City to execute and deliver the Site Lease
and the Lease, in substantially the forms and with substantially the same contents as presented to
the City Council, provided that such documents may be completed, corrected or revised as
deemed necessary by the parties thereto in order to carry out the purposes of this Ordinance.
Section 6. Authorization to Execute Collateral Documents. The City Clerk is hereby
authorized and directed to attest all signatures and acts of any official of the City in connection
with the matters authorized by this Ordinance and to place the seal of the City on any document
authorized and approved by this Ordinance. The Mayor, the City Clerk, the City Manager, the
Financial Officer and other employees and officials of the City are hereby authorized and
directed to execute and deliver for and on behalf of the City any and all additional certificates,
documents and other papers, and to perform all other acts that they may deem necessary or
appropriate in order to implement and carry out the transactions and other matters authorized by
this Ordinance. The approval hereby given to the various documents referred to above includes
an approval of such additional details therein as may be necessary and appropriate for their
completion, deletions therefrom and additions thereto as may be approved by the City Manager
or the Financial Officer prior to the execution of the documents. The execution of any
instrument by the appropriate officers of the City herein authorized shall be conclusive evidence
of the approval by the City of such instrument in accordance with the terms hereof.
Section 7. No General Obligation Debt. No provision of this Ordinance, the Site
Lease, the Lease, the Indenture, or the Certificates shall be construed as creating or constituting a
general obligation or other indebtedness or multiple fiscal year financial obligation of the City
within the meaning of any constitutional, statutory or Charter provision, nor a mandatory charge
or requirement against the City in any ensuing fiscal year beyond the then current fiscal year.
The City shall have no obligation to make any payment with respect to the Certificates except in
connection with the payment of the Base Rentals and certain other payments under the Lease,
which payments may be terminated by the City in accordance with the provisions of the Lease.
Neither the Lease nor the Certificates shall constitute a mandatory charge or requirement of the
City in any ensuing fiscal year beyond the then current fiscal year or constitute or give rise to a
general obligation or other indebtedness or multiple fiscal year financial obligation of the City
within the meaning of any constitutional, statutory or Charter debt limitation and shall not
constitute a multiple fiscal year direct or indirect debt or other financial obligation whatsoever.
No provision of the Site Lease, the Lease or the Certificates shall be construed or interpreted as
creating an unlawful delegation of governmental powers nor as a donation by or a lending of the
credit of the City within the meaning of Sections 1 or 2 of Article XI of the Colorado
Constitution. Neither the Lease nor the Certificates shall directly or indirectly obligate the City
to make any payments beyond those budgeted and appropriated for the City’s then current fiscal
year.
-5-
Section 8. Reasonableness of Rentals; Fair Market Value. The City Council hereby
determines and declares that the Base Rentals due under the Lease, in the maximum amounts
authorized pursuant to Section 4 hereof, constitute the fair rental value of the Leased Property
and do not exceed a reasonable amount so as to place the City under an economic compulsion to
renew the Lease or to exercise its option to purchase the Trustee’s interest in the Leased Property
pursuant to the Lease. The City Council hereby determines and declares that the period during
which the City has an option to purchase the Trustee’s leasehold interest in the Leased Property
(i.e., the entire maximum term of the Lease) does not exceed the useful life of the Leased
Property.
The City Council hereby further determines that the amount of rental payments to be
received by the City from the Trustee pursuant to the Site Lease, in accordance with the
provisions set forth in Section 4 hereof, is fair market consideration for the leasing of the Leased
Property to the Trustee for the term of the Site Lease as provided therein.
Section 9. No Recourse against Officers and Agents. Pursuant to §11-57-209 of the
Supplemental Act, if a member of the City Council, or any officer or agent of the City acts in
good faith, no civil recourse shall be available against such member, officer, or agent for
payment of the principal, interest or prior redemption premiums on the Certificates. Such
recourse shall not be available either directly or indirectly through the City Council or the City,
or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty,
or otherwise. By the acceptance of the Certificates and as a part of the consideration of their sale
or purchase, any person purchasing or selling such Certificate specifically waives any such
recourse.
Section 10. Repealer. All ordinances, resolutions, bylaws, orders, and other
instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such
inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaw,
order, or other instrument, or part thereof, heretofore repealed.
Section 11. Severability. If any section, subsection, paragraph, clause or other
provision of this Ordinance for any reason is held to be invalid or unenforceable, the invalidity or
unenforceability of such section, subsection, paragraph, clause or other provision shall not affect
any of the remaining provisions of this Ordinance, the intent being that the same are severable.
Section 12. Charter Controls. Pursuant to Article XX of the State Constitution and the
Charter, all State statutes that might otherwise apply in connection with the provisions of this
Ordinance are hereby superseded to the extent of any inconsistencies or conflicts between the
provisions of this Ordinance and the Sale Certificate authorized hereby and such statutes. Any
such inconsistency or conflict is intended by the City Council and shall be deemed made
pursuant to the authority of Article XX of the State Constitution and the Charter.
-6-
Introduced, considered favorably on first reading, and ordered published this 6th day of
June, A.D. 2017, and to be presented for final passage on the 5th day of July, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 5th day of July, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
-7-
STATE OF COLORADO )
)
COUNTY OF LARIMER ) ss.
)
CITY OF FORT COLLINS )
I, Wanda Winkelmann, City Clerk of the City of Fort Collins, Colorado (the
“City”), do hereby certify the following:
1. The attached copy of Ordinance No. 081, 2017 (the “Ordinance”) is a true,
correct and complete copy thereof.
2. The Ordinance was introduced, read, and approved on first reading by the
City Council of the City (the “Council”) at a regular meeting thereof held at Council Chambers,
City Hall, 300 West LaPorte Avenue, Fort Collins, Colorado, the regular meeting place thereof,
on Tuesday, the 6th day of June, 2017, by the members of the Council as follows:
Name “Yes” “No” Absent Recused
Wade Troxell, Mayor
Gerry Horak, Mayor
Pro-Tem
Bob Overbeck
Ray Martinez
Ken Summers
Kristin Stephens
Ross Cunniff
3. The Ordinance was duly published in full at least seven days before its
final passage on the City’s official internet web site. In addition, the Ordinance was duly
published by number and title only, together with a statement that the text thereof was available
for public inspection and acquisition in the office of the City Clerk of the City and on the City’s
internet web site, in the Coloradoan, a newspaper of general circulation published in the City in
its issue of June __, 2017, as evidenced by the certificate of the publisher attached hereto as
Exhibit A. Both publications contained a notice giving the date when the Ordinance would be
presented for final passage.
4. The Ordinance was read and finally passed on second reading, without
amendment, by the Council at a regular meeting thereof held at Council Chambers, City Hall,
300 West LaPorte Avenue, Fort Collins, Colorado, the regular meeting place thereof, on
Tuesday, the 5th day of July, 2017, by the members of the Council as follows:
-8-
Name “Yes” “No” Absent Recused
Wade Troxell, Mayor
Gerry Horak, Mayor
Pro-Tem
Bob Overbeck
Ray Martinez
Ken Summers
Kristin Stephens
Ross Cunniff
5. Following its final passage, the Ordinance was duly published in full on the City’s
official internet web site within seven days following its final passage. In addition, a notice of
the final passage of the Ordinance was duly published in the Coloradoan, a newspaper of general
circulation published in the City, in its issue of July __, 2017, as evidenced by the certificate of
the publisher attached hereto as Exhibit B.
6. A true copy of the Ordinance has been authenticated by the signatures of the
Mayor of the City and myself as City Clerk, sealed with the seal of the City, and numbered and
recorded in a book marked “Ordinance Record” kept for that purpose in my office.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the City of Fort
Collins, Colorado this _____ day of _________, 2017.
_____________________________
City Clerk
(SEAL) City of Fort Collins, Colorado
-9-
Exhibit A
(Attach certificate of publication of Ordinance after first reading)
-10-
Exhibit B
(Attach certificate of publication of Ordinance after final passage)
-1-
ORDINANCE NO. 082, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING THE LEASE FINANCING PROCEEDS IN THE CAPITAL PROJECTS
FUND TO BE USED FOR THE PURCHASE OF A PORTION OF THE FIREHOUSE
ALLEY PARKING STRUCTURE AND TO PAY FOR RELATED LEASE FINANCING
COSTS
WHEREAS, on November 17, 2015, City Council adopted Resolution 2015-101
approving a Construction and Purchase Agreement (the “Purchase Agreement”) for the City’s
purchase of parking spaces in the proposed Jefferson Street Parking Structure (now called the
“Firehouse Alley Parking Structure”); and
WHEREAS, the proposed financing method for that purchase is a lease-lease back
transaction with the issuance of certificates of participation and with the City’s Senior Center
being used as the leased property for this transaction (the “Lease Financing”); and
WHEREAS, the City and the Downtown Development Authority (“DDA”) will also be
entering into an intergovernmental agreement (the “Agreement”) for the DDA’s contribution
of $300,000 per year towards lease payments under the Lease Financing beginning in 2019;
and
WHEREAS, the City will acquire approximately 216 parking spaces located on the
second and third floors of the parking structure; and
WHEREAS, the closing on the Lease Financing is scheduled for July 18, 2017, and
acquisition of the parking spaces under the Purchase Agreement is anticipated to occur in
August or September 2017; and
WHEREAS, the Lease Financing will provide $8.43 million in proceeds to be repaid
over a lease term of 10 years at 2.48% interest with lease payments to begin in 2018 and going
through 2027 and with average annual payments of $962,000; and
WHEREAS, starting after June 1, 2018, General Fund monies previously used for
lease payments for the Civic Center Parking Structure and the 215 North Mason
Administrative building lease-purchase financing will be used for payment of the Lease
Financing; and
WHEREAS, Article V, Section 9, of the City Charter permits the City Council to
make supplemental appropriation by ordinance at any time during the fiscal year, provided
that the total amount of such supplemental appropriation, in combination with all previous
appropriations for that fiscal year, does not exceed the current estimate of actual and
anticipated revenues to be received during the fiscal year; and
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
-2-
Section 1. That the City Council hereby makes and adopts the determinations
and findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated from the anticipated Lease Financing
proceeds in the Capital Projects Fund the sum of EIGHT MILLION FOUR HUNDRED
THIRTY THOUSAND DOLLARS ($8,430,000) for the purchase of a portion of the
Firehouse Alley Parking Structure and payment of Lease Financing costs.
Introduced, considered favorably on first reading, and ordered published this 6th day of
June, A.D. 2017, and to be presented for final passage on the 5th day of July, A.D. 2017.
__________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Passed and adopted on final reading on this 5th day of July, A.D. 2017.
__________________________________
Mayor
ATTEST:
_____________________________
City Clerk