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HomeMy WebLinkAbout134 - 09/02/2025 - AUTHORIZING THE CITY OF FORT COLLINS TO LEASE REAL PROPERTY ADJACENT TO THE OVERLAND ELECTRIC SUBSTAORDINANCE NO. 134, 2025 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY OF FORT COLLINS TO LEASE REAL PROPERTY ADJACENT TO THE OVERLAND ELECTRIC SUBSTATION TO PLATTE RIVER POWER AUTHORITY FOR A BATTERY STORAGE PROJECT A Platte River Power Authority ("PRPA") is an electric generation and transmission utility formed under Colorado law to supply the wholesale electric power and energy requirements of its four owner communities including the City of Fort Collins ("City"), the City of Longmont, the City of Loveland and the Town of Estes Park, Colorado. B.PRPA desires to enter into a Site Lease Agreement ("Lease") regarding 27,351 square feet of real property at the Overland Substation site located at 401 South Overland Trail in Fort Collins from the City for the purpose of designing, developing, constructing, owning, operating, and maintaining a battery energy storage facility at the premises. This site is ideal for placing the battery equipment and integrating it with the existing electric utility infrastructure. C.The Lease, which will require only a nominal annual rental payment by PRPA, allows PRPA to evaluate the feasibility of the project and, pending successful analysis, proceed with the installation and operation of a 5 MW/20MWh utility-side system connected to the City's Light and Power distribution system. PRPA and the City's Light and Power utility are collaborating on this project as part of their commitment to a non­ carbon future and a reliable electric grid and energy storage plays a crucial role in achieving those goals. D.City Code Section 23-113(b) permits the City Council 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 interests of the City. Such leases may be approved by the City Council by resolution unless the proposed term of the lease exceeds twenty (20) years, in which event the lease must be approved by the City Council by ordinance." E.City Code Section 23-1 14 requires that "any sale, lease or other conveyance of property interests approved under 23-111 (a) or (b) or§ 23-113 above must be for an amount equal to or greater than the fair market value of such interest unless the City Council or City Manager, as applicable determines that such sale or lease serves a bona fide public purpose ... " F.City Code Section 23-114 establishes that: "a bona fide public purpose is established if the lease of real property for less than fair market value "(1) the use to which the property will be put promotes health, safety or general welfare and benefits a significant segment of the citizens of Fort Collins; (2) the use to which the property will be put supports one (1) or more of the City Council's goals, adopted policies, project or plans; - 1 - (3)the financial support provided by the City through the below-market disposition of the property will be leveraged with other funding or assistance; (4) the sale or lease will not result in any direct financial benefit to any private person or entity, expect to the extent such benefit is only an incidental consequence and is not substantial relative to the public purpose being served; and (5) selling or leasing the property for less than fair market rent will not interference with the current City projects, hinder workload schedules or divert resources needed for primary City functions or responsibilities." G.This lease serves a bona fide public purpose because it promotes the public health, safety, and welfare of the residents of Fort Collins by providing for the storage of battery power to improve reliability and maximize renewable energy generation. H.PRPA's use of the property at the Overland Substation site to store the battery also serves a bona fide public purpose because it supports the City Council's renewable energy goals and will benefit electric service reliability for the Fort Collins community. I.In addition, the financial support provided by the City through this below- market lease serves a bona fide public purpose because it leverages grants and private sector investment to fund storage project infrastructure. J.Further, this lease serves a bona fide public purpose because the lease will not result in any direct financial benefit to the PRPA except to the extent that the financial benefit of leasing the property for less than fair market value is incidental and is not substantial relative to the public purpose of increasing reliability and resiliency while mitigating cost impacts to the community by using battery to store energy for future use by PRPA's customers, which includes residents of the City of Fort Collins. K.In addition, this site would not be useful or practical for much else than substation and power distribution related infrastructure expansion such as this Project. The site is not developable because of its proximity to the existing substation on the south and an irrigation canal on the north side. L.The lease of the property by PRPA for less than fair market value also serves a bona fide public purpose because this lease will not interfere with current City projects, hinder workload schedules or divert resources needed for primary City functions or responsibilities and will further the City's economic health and environmental health goals. M.City Code Section 23-111(b) requires that "With respect to real property which is a part of the City's water or utility systems, the City Council must also find that the disposition will not materially impair the viability of the particular utility system as a whole and that it will be for the benefit of the citizens of the City." Here, lease of the property will not impair the viability of electric utility and it will actually benefit the citizens - 2 - of the City by helping to ensure the reliability and resiliency of services provided by PRPA. N.City Code Section 23-113(c) provides that "a lease approved by the City Council. .. " is "presumed to include the right of the tenant to sublease all or a portion of the leased property for a definite term of five (5) years or less with the written consent, and in the sole discretion, of the City Manager or the City Manager's designee, unless the terms of such lease further restrict, condition or prohibit subleasing." The lease agreement with PRPA includes a sublease. 0.City Code Section 23-111 (e) establishes that "The Mayor is authorized to execute all leases, deeds and other instruments of conveyance. The City Council may also authorize the City Manager to execute such instruments of conveyance." The lease will be signed by the Mayor and will meet the requirements of City Code Section 23-112. P.The City's Energy Board, which advises the City Council on pol icy matters pertaining to the municipal electric system, reviewed this lease proposal during its March 13, 2025, meeting and expressed its support for this project. Q.Because PRPA, which is a public entity, will own and operate the facility, the facility will be eligible for Site Plan Advisory Review (SPAR) under Article 6 of the Land Use Code. This process will allow the Planning and Zoning Commission to conduct an advisory review after PRPA submits a site development plan detailing the location, character, and extent of the improvements under the lease. In light of the foregoing recitals, which the Council hereby makes and adopts as determinations and findings, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. The City Council finds that the Site Lease Agreement to Platte River Power Authority is in the best interests of the City. Section 2. The City Council find that the Site Lease Agreement to Platte River Power Authority will not materially impair the viability of the electric utility system as a whole and that it will be for the benefit of the citizens of the City. Section 3. The City Council approves the Site Lease Agreement to Platte River Power Authority for up to thirty (30) years and authorizes the sublease as described in the sublease agreement. Section 4. The City Council approves the Site Lease Agreement for a nominal amount and finds that the lease will serve a bona fide public purpose. - 3 - Section 5. The City Council authorizes the Mayor to sign the Site Lease Agreement, on behalf of the City, substantially in a form attached as Exhibit A that is now before the City Council, and approved by the City Attorney , for the premises, to the tenant , as well as any additional documents required to be signed in the course of leasing or subleasing the premises. Introduced, considered favorably on first reading on August 19, 2025, and approved on second reading for final passage on September 2, 2025. ATTEST: J�_C.1� City Cle Effective Date: September 12, 2025 Approving Attorney: Yvette Lewis-Molock Exhibit: Exhibit A -Site Lease Agreement -4 - EXHIBIT A TO ORDINANCE NO. 134, 2025 12.Term. The initial term of this Lease Agreement begins on the Effective Date and terminates on the date that is twenty-two (22) years after the Effective Date, unless terminated earlier in accordance with the terms and conditions of this Lease Agreement (the "Initial Term"). At the option of Primary Tenant, the Term may be extended by one additional term of five (5) years (the "Extension Term"). Primary Tenant may exercise the renewal option for an Extension Term by providing Landlord with a written notice of renewal prior to the expiration of the then­ current Term. The Initial Term together with any properly exercised Extension Term are referred to collectively herein as the "Term". In no case shall the Term, in addition to the Decommissioning period of Section 16, exceed thirty (30) years. 13.Rent. Primary Tenant will pay the Landlord a base annual lease payment in the amount of $10.00 ("Rent"), provided that, if any of the owner communities of City of Fort Collins, the City of Longmont, the City of Loveland and the Town of Estes Park, Colorado charge Primary Tenant a greater amount of Rent in their respective Lease Agreements for this or similar Projects, Landlord may choose to charge Primary Tenant a Rent no greater than the highest Rent charged by any other owner community, retroactive to the beginning of this Lease Agreement. Rent shall be due and payable within 30 days of the Effective Date of this Lease Agreement and every anniversary of the Effective Date there after for the duration of this Lease Agreement; except that retroactive Rent arising under the preceding sentence shall be due and payable within 30 days of the effective date of the lease agreement for such other owner communities. 14.Premises Leased. The Premises consists of the lease area described and depicted on Exhibit B hereto. Before the Commercial Operations Date, Primary Tenant may update or replace Exhibit B with the approval of Landlord, which approval will not be unreasonably conditioned or withheld provided that the location and configuration of the Premises is consistent with applicable law. Following construction of the Project and completion of an as-built survey of the Premises (the "As-Built Survey"), Primary Tenant and Landlord agree to promptly (within not more than ten business days after receipt of a final version) amend this Lease and any of the easements granted by Landlord in connection with the Project as necessary, attaching the As-Built Survey as the final Exhibit B to this Lease Agreement, setting forth the conclusive and definitive depiction of the Premises for the remainder of the Term. The Landlord authorizes its City Manager to execute such clarifying, non-substantive amendments. 15.Ownership of the Project. The Project is the personal property of Authorized Sub lessee or Primary Tenant, as applicable, and does not and will not consist of fixtures, notwithstanding how the Project is, or may be, affixed to the Premises. Landlord may not permit the Project to become subject to any lien, security interest or encumbrance of any kind, and Landlord expressly disclaims and waives any rights it may have in the Project, at law or in equity. Authorized Sublessee must maintain the Project in a good state of repair and in compliance with this Lease, the Sublease, and any other agreements regarding the Project to which the Primary Tenant orAuthorized Sublessee are parties. The Primary Tenant or Authorized Sublessee, as applicable, may -4- EXHIBIT A TO ORDINANCE NO. 134, 2025 grant a security interest and collateral assignment in the Project for purposes of security to its lenders or investors in accordance with Attachment I attached hereto and incorporated herein by reference and Landlord shall provide any consent reasonably requested by any such lender or investor, consenting to such lender's and/or investor's security interest in the Project. 16.Decommissioning. Within six months after the expiration or earlier termination of the Term, Primary Tenant must ensure that Authorized Sub lessee, or its successors and assigns, sever, disconnect, and remove the Project and all other Project-related equipment from the Premises and restoration of the Premises to as close to original condition as reasonably practicable ("Decommissioning"). Authorized Sublessee shall have the right to access the Premises during this sixth-month period for the purposes of Decommissioning. 17.Title. Landlord represents and covenants that Landlord owns the Premises and the Property in fee simple, free and clear of all liens, encumbrances, and restrictions of every kind and nature, except for those that currently appear in the recorded chain of title and are reported as exceptions on the commitment for title insurance. Landlord further represents and warrants that Landlord (a) has the right and authority to enter into this Lease, (b) has and will maintain good and marketable title to the Property, free and clear of any encumbrances that could reasonably be expected to have a material adverse effect on development of the Property for a battery energy storage facility, ( c) will not enter into any lease, option to lease, purchase and sale agreement, option to purchase, or any other similar agreement at the Premises without the prior written consent of Primary Tenant, with such consent not to be unreasonably withheld, delayed or conditioned, during the Term, (d) is not a party to any, and to Landlord's best knowledge, there are no pending or threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any kind or nature whatsoever against Landlord (i) challenging the validity or propriety of this Lease Agreement, or transactions contemplated in this Lease Agreement or (ii) which could reasonably be expe cted to have a material adverse effect on the ownership or operation of the Property. 18.Quiet Enjoyment. Landlord covenants and agrees that Primary Tenant has the right to hold, occupy and enjoy the Premises for the Term of this Lease free from any claim of any entity or person of superior title thereto without hinderance to or interference with the Tenant's use and enjoyment thereof, provided it remains in compliance with obligations under this Lease Agreement. 19.Environmental Matters. Primary Tenant is not liable for any past or present contamination or pollution or breach of environmental laws, if any, relating to the Premises or the Property, unless attributable to Primary Tenant's activities, its employees, contractors or agents. If Primary Tenant encounters or becomes aware of any unknown hazardous material at the Premises, it must promptly cease any work in progress in an orderly, safe and efficient manner and inform Landlord of the nature and location of the hazardous material and make any reports required under applicable law. If the Landlord does not elect to eliminate or contain such Hazardous Materials in - 5 - EXHIBIT A TO ORDINANCE NO. 134, 2025 a commercially reasonable manner in compliance with law to allo w Primary Tenant, or if applicable the Authorized Sublessee, to continue or finalize any work in progress then Primary Tenant, or Authorized Sublessee as applicable, shall have the right, at its option, to terminate this Lease Agreement. If Primary Tenant or Authorized Sublessee terminates this Lease Agreement under this provision, Primary Tenant and Authorized Sublessee will be relieved of all further liability hereunder except for the Decommissioning obligations provided herein. Should any contamination be caused by the activities of Primary Tenant, Primar y Tenant agrees to assume responsibility for any liability for response costs for any contamination or pollution or breach of environmental laws related to the Premises and the Property affected by the contamination, except that Landlord shall bear is proportionate share to the extent that such contamination is jointly caused, or exacerbated, by Landlord. Should any contamination be caused by Authorized Sublessee's activities, or those of its employees, contractors or agents, Primary Tenant shall hold Authorized Sublessee responsible for and require it to protect, indemnify and defend the Landlord and Primary Tenant against any liability for response costs for any contamination or pollution or breach of environmental laws, exc ept that to the extent caused or exacerbated, by Landlord or Primary Tenant. 20.Government Approvals. Landlord acknowledges that Primary Tenant's, and if applicable the Authorized Sublessee's, ability to use the Property for the development of a Project is contingent upon obtaining all government and utility approvals. Landlord will cooperate with Primary Tenant or if applicable Authorized Sublessee in its effort to obtain such approvals, provided, however, that Landlord, as a governmental authority, does not commit to approve any application made to Landlord itself, but those applications will be resolved under their respective processes. Should Primary Tenant or Authorized Sublessee, as applicable, be unable to obtain all necessary approvals, or be unable to maintain such approvals due to changes in law, Landlord or Primary Tenant may terminate this Lease Agreement as outlined further in Section 21 below. 21.Primary Tenant's Right to Terminate. In addition to the termination provisions described in Section 25 (Revocation) and subject to Attachment 1, before the Commercial Operations Date, Primary Tenant may terminate this Lease Agreement by providing prior written notice to Landlord. On or after the Commercial Operations Date, Primary Tenant may terminate this Lease Agreement by providing at least six months' prior written notice to Landlord. In addition, after the Commercial Operations Date, Primary Tenant may terminate this Lease Agreement after giving not less than 30 days' prior written notice to Landlord, if: (a)Any governmental agency denies a request by Primary Tenant or Authorized Sub lessee, as applicable, for or revokes a permit, license, or approval that is required for Primary Tenant or Authorized Sublessee, as applicable, to construct or operate the Project and infrastructure on the Premises; (b)Primary Tenant determines that technical problems which cannot reasonably be corrected preclude Primary Tenant or Authorized Sublessee, as applicable, from using the Premises for its intended purpose; - 6 - EXHIBIT A TO ORDINANCE NO. 134, 2025 ( c)Primary Tenant does not have acceptable and legally enforceable means of ingress and egress to and from the Premises; (d)Utilities necessary for Primary Tenant's or if applicable Authorized Sublessee's use of the Premises are no longer available to the Premises; or ( e)The Premises or Project are damaged or destroyed to an extent that prohibits or materially interferes with Primary Tenant's or if applicable Authorized Sublessee's use of the Premises. If Primary Tenant terminates this Lease under this provision, Primary Tenant will be relieved of all further liability accruing hereunder on or after the date of termination except Decommissioning, as provided herein. Should Primary Tenant terminate in accordance with this Section 21, Primary Tenant must ensure that the Authorized Sublessee Decommissions the Project in accordance with Section 16 above. 22.Assignment. This Lease Agreement and the rights and obligation s of either Party may be assigned only as described in this Agreement, the Site Sublease Agreement, and Atta chment 1 to this Lease Agreement. Any other assignment without prior written permission of Landlord will be a breach of this Lease Agreement. In its Master Services Agreement with the Authorized Sublessee, Primary Tenant shall include a right of first refusal for Primary Tenant to purchase the Project from the Authorized Sublessee prior to any sale of the Project to a third-party in an arm's­ length transaction that requires assignment of the Lease. For clarity, Primary Tenant's right of first refusal will not apply to any assignment to an affiliate of Authorized Sublessee, to any financing party (including a Tax-Equity Financing Party), assignment in connection with any financing transaction (whether in the form of a sale and lease back or otherwise), or to any foreclosure as described in Attachment 1. 23.Liability for Injury and Damage. Landlord and Primary Tenant are governmental entities in the state of Colorado. To the extent permitted by applicable law, Primary Tenant is responsible for any claims, damages, liability and court awards, including costs, expenses, and attorney fees incurred, as a result of its actions or omissions in connection with the performance of this Lease Agreement. To the extent permitted by applicabl e law, Landlord is responsible for any claims, damages, liability and court awards, including costs, expenses, and attorney fees incurred, as a result of its actions or omissions in connection with the performance of this Lease Agreement. 24.Insurance. Before Construction Commencement, Primary Tenant and Authorized Sublessee must obtain and provide evidence of the insurance cover ages specified below. A.Commercial General Liability: Including bodily injury, property damage, products and completed operations, personal and advertising injury with limits of$1,000,000 per occurrence and $2,000,000 annual aggregate limit; - 7 - EXHIBIT A TO ORDINANCE NO. 134, 2025 B.Automobile Liability: All motor vehicles, including Hired and Non-Owned, used in connection with the Agreement; $1,000,000 combined single limit per accident; C.Workers' Compensation: As required per the state law including Employer's Liability E.L. $500,000 per accident and $500,000 per employee, and $500,000 caused by disease; and D.Umbrella Liability excess of General Liability, Auto Liability and Employer's Liability for $5,000,000 Each Occurrence/Aggregate. Primary Tenant and Authorized Sublessee must provide the Landlord with certificates of insurance naming the Landlord as an additional insured and evidencing the procurement of insurance contemplated in this Section including endorsements, as required. 25.Revocation. In the event of a default in the terms of this Lease Agreement by either Landlord or Primary Tenant, the other Party may terminate this Lease Agreement. Events that constitute a default under this Lease Agreement include: a Party's failure to perform or comply with any material provision of this Lease Agreement; an unauthorized assignment, a Party's insolvency or inability to pay debts as they mature, or (subject to Attachment 1) an assignment for the benefit of creditors; or if a petition under any foreign, state, or United States bankruptcy act, receivership statute, or the like, as they now exist, or as they may be amended, is filed by a Party. Neither Party will be in default under this Lease Agreement unless and until it has been given written notice of a breach of this Lease Agreement by the other Party and fails to cure such breach within thirty (30) days after receipt of such notice. When a breach cannot reasonably be cured within such thirty (30) day period, the time for curing may be extended by agreement of the Parties, not to be unreasonably withheld, for such time as may be reasonably necessary to complete the cure, provided that the defaulting Party is making good-faith efforts to cure such breach with due diligence. Notwithstanding anything to the contrary in this Lease Agreement, Landlord may terminate this Lease Agreement if onsite Project construction has not actually substantially begun within five (5) years of the Effective Date; provided, however, that Landlord may not cause this deadline to lapse by delays in approval of any required permit or authorization. 26.Damage to Project. If, at any time during the Term, the Project is substantially damaged or destroyed and rendered inoperable by fire or other occurrence of any kind, Primary Tenant must cause Authorized Sublessee to, at its sole cost and expense either (a) promptly repair or replace the Project, or (b) elect to terminate this Sublease Agreement, in which case Primary Tenant must require Authorized Sublessee to Decommission the Project, as required by this Lease and in accordance with any other agreements to which the Landlord or Primary Tenant are parties. 27.Terminate in Event of Governmental Shutdown. If a governmental authority decrees,orders or demands that operation of the Project cease or that the Project must be removed from the - 8 - EXHIBIT A TO ORDINANCE NO. 134, 2025 Premises, for reasons unrelated to any default, violation or breach by Primary Tenant or Authorized Sublessee of any applicable law, permit or consent, Primary Tenant or Authorized Sublessee may terminate this Lease Agreement without penalty to either Party upon delivery to Landlord of thirty (30) days' prior written notice, in which case Primary Tenant must ensure that Authorized Sublessee must Decommission the Project. 28.Force Majeure. In the event ofa Force Majeure Event (as defined below), Primary Tenant is relieved from any Rent payments and any other obligations under this Lease Agreement during the period that the Force Majeure Event exists and is continuing. Subject to Attachment 1, if the Force Majeure Event lasts for more than ninety (90) consecutive days or more than one hundred twenty (120) days in any three hundred and sixty five (365) day period, Primary Tenant may terminate this Lease Agreement by delivery to Landlord of a written notice of termination. "Force Majeure Event" means any act, event, cause or condition that prevents Primary Tenant from performing its obligations and is beyond Primary Tenant's reasonable control. A Force Majeure Event may include, but is not limited to the following: an act of god; war ( declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or actions of the elements; hurricane; flood; lightning; wind; drought; pandemic; the failure to act on the part of any governmental authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment, supplies or products (but not to the extent that any such availability of any of the foregoing results from the failure of the Party claiming a Force Majeure Event to have exercised reasonable diligence); and failure of equipment not used by or under the control of the party claiming a Force Majeure Event. Notwithstanding the occurrence of a Force Majeure Event or the termination of this Lease Agreement by Primary Tenant in co1111ection with a Force Majeure Event, Authorized Sublessee's obligation to Decommission the Project will survive, provided that the period for performance of such obligation may be delayed until such time as it becomes reasonably possible to do so. 29.Miscellaneous provisions. (a)Applicable Law. This Lease Agreement will be interpreted and governed by the laws of the State of Colorado, and venue will be in the state and federal courts of Larimer County, Colorado. (b)Rules of Interpretation. Titles and headings are included in this Lease Agreement for convenience only, and will not be used for the purpose of construing and interpreting this Lease Agreement. Words in the singular also include the plural and vice versa where the context requires. - 9 - EXHIBIT A TO ORDINANCE NO. 134, 2025 ( c)Severability. If any provisions of this Lease Agreement are held to be unenforceable or invalid by any court or regulatory agency of competent jurisdiction, the validity and enforceability of the remaining provisions will remain in force. (d)Entire Agreement; Amendments and Waivers. This Lease Agreement constitutes the entire agreement between the Parties relating to the lease of real property for the Project and supersedes the terms of any previous agreements or understandings, oral or written. Any waiver or amendment ofthis Lease Agreement must be in writing signed by the Parties. A Party's waiver of any breach or failure to enforce any of the terms of this Lease Agreement will not affect or waive that Party's right to enforce any other term of this Lease Agreement. (e)Further Assurances. Either Party shall execute and deliver instruments and assurances and do all things reasonably necessary and proper to carry out the terms of this Lease Agreement if the request from the other Party is reasonable. (f)Recordation. This Lease Agreement will not be recorded. However, the Parties agree that a memorandum of this Lease Agreement shall be recorded in the local land records pursuant to applicable state law or applicable state authority, substantially in the form attached hereto as Exhibit D. (g)Governmental Immunity. Nothing in this Lease Agreement waives any immunities, rights, benefits, protections, or other provisions of the Colorado Governmental Immunity Act, C.R.S. §§ 24-10-101, et seq., or of any other defenses, immunities, and limitations of liability available by law or in equity to Landlord or Primary Tenant. 30.Representations and Warranties. (a)The Landlord represents and warrants to Primary Tenant as follows: i.Right, Power and Authority. It has full right, power and authority to enter into this Lease Agreement and there is nothing, which would prevent it from performing its obligations under the terms and conditions imposed on it by this Lease Agreement. ii.Binding Obligation. This Lease Agreement has been duly authorized by all necessary action of Landlord, and constitutes a valid and binding obligation on the Landlord, enforceable in accordance with its terms. 111.Performance. To the knowledge of Landlord, no fact or circumstance exists that will have, or is reasonably likely to have, a material adverse effect upon the Landlord's ability to perform its obligations under this Lease Agreement. - 10 - EXHIBIT A TO ORDINANCE NO. 134, 2025 iv.Information. To the knowledge of Landlord, the information provided to Primary Tenant in this Lease Agreement is true and accurate in all material respects. (b)Primary Tenant hereby represents and warrants to the Landlord as follows: i.Right, Power and Authority. It has full right, power and authority to enter into this Lease Agreement and there is nothing which would prevent it from performing its obligations under the terms and conditions imposed on it by this Lease Agreement. ii.Binding Obligation. This Lease Agreement has been duly authorized by all necessary action of Primary Tenant, and constitutes a valid and binding obligation on Primary Tenant, enforceable in accordance with its tern1s. m.Performance. To the knowledge of Primary Tenant, no fact or circumstance exists that will have, or is reasonably likely to have, a material adverse effect upon Primary Tenant's ability to perform its obligations under this Lease Agreement. iv.Information. To the knowledge of Primary Tenant, the information provided to the Landlord in this Lease Agreement is true and accurate in all material respects. 31.Notices. All notices, demands, requests, consents, approvals, and other instruments required or permitted to be given pursuant to this Lease Agreement must be in writing, signed by the notifying Party, or officer, agent, or attorney of the notifying Party, and will be deemed to have been effective upon delivery if served personally, including but not limited to delivery by electronic mail, messenger, overnight courier service or overnight express mail, or upon posting if sent by registered or certified mail, postage prepaid, return receipt requested, and addressed as follows: To Landlord: City of Fort Collins 300 LaPorte Avenue Foti Collins, Colorado 80526 To Primary Tenant: Platte River Power Authority 2000 E. Horsetooth Road Fort Collins, CO 80526 hammittj@prpa.org The address to which any notice, demand, or other writing may be delivered to either Party as above provided may be changed by written notice given by such Party as above provided. -11 - EXHIBIT A TO ORDINANCE NO. 134, 2025 Lease Agreement -Signature Page IN WITNESS WHEREOF, the Parties, as evidenced by the signatures of their Duly Authorized Agents, do hereby execute this Lease Agreement the date first set forth above. THE CITY OF FORT COLLINS, COLORADO, a Colorado municipal corporation Date: _____________ By: _____________ _ Jeni Arndt, Mayor STATE OF COLORADO ) ) ss COUNTY OF LARIMER ) The foregoing instrument was acknowledged before me this __ day of ___ _, 202_, by Jeni Arndt as Mayor of the City of Fort Collins. Witness my hand and official seal. My Commission expires: __________ _ ATTEST: City Clerk Printed Name: ---------- AP PROVED AS TO FORM: Assistant City Attorney Name: -------------- Notary Public 13 EXHIBIT A TO ORDINANCE NO. 134, 2025 Lease Agreement -Signature Page Cont'd Title: Duly Authorized Agent STATE OF COLORADO COUNTY OF PRIMARY TENANT: [INSERT] By: -----------Name: --------- On this.day of _____ , 2025, --------� duly authorized agent of ___________ personally appeared, and they acknowledged this instrument, by them sealed and sub scribed, to be their free act and deed and the free act and deed of Before me, ---------------Notary Public: Commission Expires: License#: 14 ATTACHMENT 1 Grant of Lender-Related and other Step-In Rights This Grant of Lender-Related and other Step-in Rights is attached and incorporated into that certain Site Lease Agreement between Primary Tenant and Landlord dated __ , 2025. Primary Tenant and Landlord agree that Landlord will grant Primary Tenant and the Authorized Sublessee through its Site Sublease Agreement (the "Sublease") the rights set forth herein. Nothing in this Lease Agreement, including in this Attachment 1, is intended to change the relationship between Platte River Power Authority and Landlord as described in the Organic Contract and applicable Power Supply Agreement. Primary Tenant does not intend to exercise these rights on its own behalf or on behalf of any third party or Leasehold Mortgagee (as the term is defined below). a.Authorized Sublessee shall have the right at any time and from time to time, without Primary Tenant's or Landlord's prior written consent or approval (but with prior written notice to Landlord and Primary Tenant) to: (i) assign, encumber, hypothe cate, mortgage or pledge (including by mortgage, deed of trnst or personal property security instrnment), or otherwise transfer all or any portion of its right, title or interest under the Sublease to its Lender(s) (as such term is defined below), as security for the repayment of any indebtedness and/or the performance of any obligation owed by Authorized Sublessee to such Lender(s); and (ii) mortgage its leasehold interest hereunder and/or collaterally assign its interest in the Sublease and in any monies due under the Sublease in connection with obtaining financing from any Lender(s) for the Project and all appurtenances thereto (including the interconnection facilities and the transmission facilities and im provements), or otherwise encumber and grant security interests in all or any part of its interest in the Sublease, the Premises, the Project, interconnection facilities or transmission facilities (holders of these various security interests are referred to as "Leasehold Mortgagees"). b.Following an event of default under any financing documents relating to the Project and all appurtenances thereto (including the interconnection facilities and the transmission facilities and improvements), any Lender or Leasehold Mortgagee may (but shall not be obligated to) assume, or cause their designees to assume, all of the interests, rights and obligations of Authorized Sublessee thereafter arising under the Sublease. Any Leaseh old Mortgagee that has succeeded to Authorized Sublessee's interests under the Sublease in accordance with the provisions of this Section shall also have the right, without Landlord's prior written consent or approval (but with prior written notice to Landlord), to assign or sublet the whole or any portion or portions of its interest in the Sublease, the Premises, tl1e Project and all appurtenances thereto (including the interconnection facilities and the transmission facilities and improvements) for the uses permitted under the Sublease, to one (1) or more Creditworthy persons or entities ( each, an "Assignee"). As used herein, "Creditworthy" shall mean an entity which has a Credit Rating of (a)"Baa3" or higher by Moody's, and (b) "BBB-" or higher by S&P. Following any such sale, conveyance, lease, assignment or sublet, the term "Authorized Sublessee" shall be deemed to include each "Assignee" then holding Authorized Sublessee's interest (or portion thereof) in the Sublease. However, no Lender, Leasehold Mortgagee or Assignee shall by virtue of Authorized Sublessee's conveyance to it or its assumption or interests, rights and obligations of Authorized Sublessee arising under the Sublease acquire any greater interest in the Premises (including any easements created in the Sublease) or any other rights than Authorized Sublessee then has under the Sublease. Any such Lender, Leasehold Mortgagee, or Assignee shall be subject to Landlord's Municipal Code and any and all of Landlord's security and access protocols. c.As used herein, the term "Lender" means any financial institution or other entity or person (including a Leasehold Mortgagee) that from time to time provides debt or equity financing for some or all of Authorized Sublessee's Project, collectively with any security or collateral agent, indenture trustee, loan trustee or participating or syndicated lender involved in whole or in part in such fin ancing, and their respective representatives, successors and assigns. References to Authorized Sub lessee in the Sublease shall be deemed to include any entity or person that succeeds (whether by assignment or otherwise) to all of the then-Authorized Sub lessee's then­ existing right, title and interest under the Sublease in accordance with the provisions of this Section. d.If the rights and interests of Authorized Sublessee in the Sublease are assigned in accordance with this Section (which requires the assuming party to agree in writing to be bound by, and to assume, the terms and conditions hereof and any and all obligations to Landlord arising or accruing hereunder from and after the date of such assumption), Authorized Sublessee shall be released and discharged from the terms and conditions hereof (but not from the terms and conditions of any other agreements) and each such obligation hereunder from and after such date, and Landlord shall continue the Sublease with the assuming party as if such person had been named as Authorized Sublessee under the Sublease, provided, however, that the assuming party is Creditworthy. e.Landlord agrees to enter into a commercially reasonable non-disturbance consent and recognition agreement (an "NDA") by and among any Lender(s) or Leasehold Mortgagee(s), Landlord, and Authorized Sublessee which shall include, without limitation, consent by Landlord to the Authorized Sub lessee's collateral assignment of the Sublease and Authorized Sublessee's leasehold interest hereunder, cure rights and step in rights in favor of the Lender or Leasehold Mortgagees. f.Any Lender or Leasehold Mortgagee or Assignee who acquires Authorized Sublessee's leasehold interest pursuant to foreclosure or assignment in lieu of foreclosure that does not directly hold an interest in the Sublease, or that holds an interest, lien or security interest in the Sublease solely for security purposes, shall have no obligation or liability under the Sublease for obligations arising prior to the time such Lender, Leasehold Mortgagee or Assignee directly holds an interest in the Sublease, or succeeds to title to such interest, or to the Sublease, except for any past due Rent, which shall become immediately due and payable upon such Lender, Leasehold Mortgagee or Assignee's assumption of interest in the Sublease. With the exception of such past due Rent, any such Lender, Leasehold Mortgagee or Assignee shall be liable to perform obligations under the Sublease only for and during the period it directly holds such interest or title. g.Within thirty (30) days after written request therefor, Landlord shall execute such estoppel certificates ( certifying as to such trnthful matters as Authorized Sublessee, Lender( s ), Assignee(s) or Leasehold Mortgagee(s) may reasonably request, including that no default then exists under the Sublease, if such be the case, and that the Sublease remains in full force and effect), commercially reasonable consents to assignment and non-disturbance agreements as Authorized Sublessee or any Lender, Leasehold Mortgagee or Assignee may request from time to time, it being intended that any such estoppel cer tificates, consents to assignment and the like may be relied upon by any Lender(s), Leasehold Mortgagee(s) or Assignee(s) or prospective Lend er(s), Leasehold Mortgagee(s), or Assignee(s), or any prospective and/or subsequent purchaser or transferee of all or a part of Authorized Sublessee's interest in the Premises, any easements granted hereunder, the interconnection facilities and/or transmission facilities and/or the Project. h.The provisions of this Attachment 1 are for the benefit of any Lender(s), Leasehold Mortgagee(s) and Assignee(s), as well as the Parties hereto, and shall be enforceable by any such Lender(s), Leasehold Mortgagee(s) and Assignee(s) as express third-party beneficiaries hereof. Landlord hereby agrees that no Lender, Leasehold Mortgagee or Assignee, nor any entity or person for whom they may act, shall be obligated to perform any obligation or be deemed to incur any liability or obligation provided in the Sublease on the part of Authorized Sublessee or shall have any obligation or liability to Landlord with respect to the Sublease except to the extent any of them becomes a party hereto pursuant to this Attachment I or through the exercise of its rights or remedies and the written assumption of the Sublease or the easements granted he reunder. Any exercise by any Lender, Leasehold Mortgagee or Assignee of any rights and remedies hereunder shall be subject to all rights, defenses and remedies available to Landlord, in each case subject to the terms of any NDA entered into between or among any Lender(s ), Leasehold Mortgagee(s) and Assignee( s) and Landlord. i.A Lender, Leasehold Mortgagee or Assignee shall have the right: (a) to enforce its lien and acquire title to Authorized Sublessee's leasehold estate and easement rights by any lawful means; (b) to take possession of and operate the Premises or any portion thereof, in accordance with the terms of the Sublease and to perform all obligations to be performed by Authorized Sublessee under the Sublease, or to cause a receiver to be appointed to do so; and ( c) to acquire such leasehold estate and easement rights by foreclosure or by an assignment in lieu of foreclosure and thereafter to assign or transfer such leasehold estate to a third party. j.To prevent termination of the Sublease or any partial interest in the Sublease, each Lender, Leasehold Mortgagee or Assignee shall have the right, but not the obligation, at any time prior to termination of the Sublease, to perform any act necessary to cure any default and to prevent the termination of the Sublease or any partial interest in the Sublease. As a precondition to exercising any rights or remedies as a result of any alleged default by Authorized Sublessee, Landlord or Primary Tenant shall give written notice of such default to each Lender, Leasehold any requirements that have been fulfilled by Authorized Sublessee or any Lender, Leasehold Mortgagee or Assignee prior to rejection or termination of the Sublease); and (c) shall include that portion of the Project in which Authorized Sub lessee had an interest on the date of rejection or termination. A Lender, Leasehold Mortgagee or Assignee shall pay all of Landlord's reasonable legal fees associated with a new lease of the Premises. n.Intentionally omitted o.If more than one (1) Lender, Leasehold Mortgagee or Assignee makes a written request for a new lease pursuant to this provision, the new lease shall be delivered to the Lender, Leasehold Mortgagee or Assignee requesting such new lease whose mortgage or assignment of the Sublease or the Authorized Sublessee's leasehold int erest hereunder is prior in lien, and the written request of any other Lender, Leasehold Mortgagee or Assignee whose lien is subordinate shall be void and of no further force or effect. This Section ( o) is for notification purposes only. p.The provisions of this Attachment 1 shall survive the termination, rejection or disaffirmation of the Sublease and shall continue in full force and effect thereafter to the same extent as if this Attachment 1 was a separate and independent contract made by and among Landlord, Primary Tenant, Authorized Sublessee and each Lender, Leasehold Mortgagee or Assignee, and, from the effective date of such termination, rejection or disaffirmation of the Sublease to the date of execution and delivery of such new lease, such Lender, Leasehold Mortgagee or Assignee may use and enjoy said Premises in accordance with the terms of such new lease, provided that all of the conditions for a new lease as set forth above are complied with, and wi th the understanding that such new lease will grant such Lender, Leasehold Mortgagee or Assignee only those rights as set forth in the original Site Lease Agreement between Landlord and Primary Tenant. q.Landlord, Primary Tenant, and Authorized Sublessee agree that so long as there exists an unpaid Leasehold Mortgage or loan or other financing held by a Lender that is secured by Authorized Sublessee's grant of a security interest in the Premises, the Sublease, the Project or any other Improvement, then (i) neither the Lease or the Sublease, as applicable, shall be modified or amended without the written consent of Lender, Leasehold Mortgagee or Assignee, as applicable, and (ii) neither Landlord or Primary Tenant shall accept surrender of any part of the Premises or the Lease or Sublease. r.If the Authorized Sublessee is in default of the Subleas e and such default is notcured after the expiration of all notice and cure periods set forth in the Sublease and Lender, Leasehold Mortgagee, and Assignee have not exercised their cure rights set forth in this Attachment I, then Primary Tenant may terminate the Sublease by providing written notice to Authorized Sub lessee without the consent of Lender, Leasehold Mortgagee, or Assignee. Exhibit A Legal Description of Landlord's Property Overland Substation Site-Fort Collins 9.Conflict With Lease. The provisions of this Memorandum should not be used in interpreting the Lease, and in the event of any conflict between this Memorandum and the Lease, the terms of the Lease control in all respects. I 0. Use. Tenant may not construct or erect any structure or building on the Premises, if the use or useful occupancy of that structure or building will require the installation of or connection to a potable water supply or wastewater system, without first complying with the applicable rules and obtaining any required permit. 11.Miscellaneous. All capitalized terms not defined herein have the meanin g set forth in the Lease. This Memorandum is governed by the laws of Colorado. This Memorandum may be executed in counterparts which, when taken together, constitute a single instr ument. [Remainder of Page Intentionally Left Blank; Signature Page Follows} \ Exhibit A to Memorandum of Lease Property Leased Overland Substation, Fort Collins -27 -