HomeMy Public PortalAbout2009.08.27 Amended Restated Ground Lease V2 Lot #4 recordedRecording Requested By and
When Recorded Return to:
City of McCall
216 E. Park Street
McCall, Idaho 83638
Instrument # 344902
VALLEY COUNTY, CASCADE, IDAHO
8-31-2009 12:10:49 No. of Pages: 20
Recorded for : CITY OF MCCALLFee: 0.00
ARCHIE N. BANBURY
Ex-Officio Recorder Deputy
Index to: MISCELLANEOUS RECORD
AMENDED AND RESTATED GROUND LEASE V2
(LOT 4, BLOCK 3)
This Amended and Restated Ground Lease is made this 27 day of August, 2009 (the "date
hereof') between the City of McCall, Idaho an Idaho municipal corporation organized and
existing under the laws of Idaho, having its principal office at 216 E. Park St., McCall, Idaho
83638 ("Lessor"), and Neighborhood Housing Services, Inc., a non-profit corporation organized
and existing under the laws of Idaho, having its principal office at 1401 Shoreline Drive, Boise,
Idaho 83707 ("Lessee").
Upon recordation of this fully executed and notarized Lease, the following documents shall
be null and void and of no further force or effect:
■ Community Housing Covenants Running with the Land, recorded October 6, 2006 as
Instrument No. 314092; recorded June 11, 2007 as instrument No. 322186; and
recorded November 26, 2008 as instrument No. 336918
■ Ground Lease, as amended, recorded October 6, 2006 as Instrument No. 314101;
recorded December 29, 2006 as Instrument No. 316933; and recorded May 23, 2007
as Instrument No. 321617.
■ First Amendment to Ground Lease, recorded November 26, 2008 as Instrument No.
336924.
■ Amended and Restated Ground Lease recorded July 31, 2009 as Instrument No.
343907.
Whereas, rising land prices and construction costs have made housing unaffordable to many
people that work in essential public employment such as public safety officers and other public
employees who safeguard the health, safety and welfare of McCall and the surrounding
communities; and
Whereas, the lack of affordable housing has made it difficult, if not impossible, for public
agencies to hire and retain such public employees as are needed to provide essential public
services; and
Whereas, the same housing costs affect the ability of the private sector to hire and retain
employees in the retail and construction trades, which adversely affects small and local
businesses; and
Whereas, the inability to find affordable housing has caused a shortage of health care
workers which in turn has resulted in a reduction in health care services in McCall, including at
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least one assisted living facility which had to close resulting in moving long time McCall
residents who can no longer live independently to a facility in Gem County; and
Whereas, the City of McCall has established a community/workforce housing policy and has
adopted ordinances to put such policy into effect; and
Whereas, leasing land to Lessee will facilitate the construction of affordable housing which
will begin to address the shortage of affordable housing in McCall and will improve the health,
safety, and welfare of the citizens and visitors to McCall.
Now, therefore, the parties agree as follows:
SECTION ONE. DEMISE, DESCRIPTION, AND USE OF PREMISES
Lessor leases to Lessee and Lessee leases from Lessor, for the purpose of using in and on the
Premises, defined below, community/workforce housing and, except for as provided further
herein, for no other purpose, that certain real property, situated in McCall, Valley County, Idaho,
and more particularly described in the exhibit attached to and made a part of this Lease as
Exhibit 1 (the "Real Property"). As used in this Lease, the term "Premises" refers to the Real
Property and to any and all appurtenances to and improvements located on the Real Property
from time to time during the term of this Lease. Use and/or occupancy of the Premises as
housing by person(s) not qualified to rent community/workforce housing, as provided further
herein, shall be permitted so long as Lessee pays Additional Rent defined below.
A. Qualified Persons. To qualify for and be eligible to lease the Real Property without
having to pay additional annual rent equal to five percent (5%) of the value of the Real Property,
at least one member of the household residing in the Premises must, at all times, meet the
following criteria and evidence of the following must be provided to Lessor:
1. Employment and/or residency in Valley and/or Adams Counties. At least one non-
dependent member of the household must meet one of the following criteria:
a. Be a full-time employee (that is, a person who is employed on the basis of a
minimum of 1,500 hours worked per calendar year) working in Valley and/or
Adams Counties; OR
b. Be a senior person (that is, sixty-five [65] years or older); OR
c. Be a disabled person (that is, a person who meets the definition of such under
the Social Security Administration regulations); OR
d. Be the former spouse of any such employee; senior, or disabled person, or a
dependent thereof who had been living in the Premises with that qualified
employee, senior, or disabled person.
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2. The household shall occupy the unit as its primary residence which is defined as
the residence within which the occupants reside not less than nine months out of each
calendar year and evidenced by voter registration, hunting or fishing license or other
evidence of residency.
B. Qualified Local Employers, defined below, are recognized as important partners in the
creation and ownership of community/workforce housing. A qualified Local Employer may
purchase the Premises for use as rental housing for such qualified Local Employer's employee(s)
without having to pay Additional Rent.
1. To qualify as a ("Local Employer"), an application with evidence of the following
must be provided to Lessor:
a. The Local Employer must have offices and/or employees who work in Valley
and/or Adams Counties.
b. The Local Employer must provide evidence that any and all potential
occupants of the Premises are or shall be employees (including dependents of
said employee(s)) of that Local Employer who are also working in Valley or
Adams Counties. The Local Employer must provide evidence that at least one
non-dependent resident is currently employed by that Local Employer.
2. For such Local Employer's employee(s) to remain eligible to reside on the
Premises, the following provisions apply:
a. Maximum occupancy standards are not being violated (a maximum of 2
persons per bedroom) are allowed to reside in the Premises.
b. The Premises are being maintained to acceptable standards by the Local
Employer or the Local Employer's managing agent, including, without
limitation, having well -maintained yards/open space and complying with
health and safety standards concerning the habitability of the Premises.
Lessor will spot check and request inspections of the Premises on an as -
needed basis. Additionally, Local Employer shall respond to a complaint by
neighbors or residents concerning the upkeep and maintenance of the
Premises within a 72 hour period.
c. Not more than three individuals who are not related by affinity or
consanguinity may reside on the Premises.
C. To remain eligible to reside on the Premises without having to pay additional
annual rent equal to five percent (5%) of the value of the Real Property, the Lessee must meet
the criteria set forth in Section 1(A) or 1(B) above.
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SECTION TWO. TERM
The term of this Lease shall be for ninety-six (96) years, commencing on the date hereof, and
ending on September 30, 2106.
SECTION THREE. RENT
Lessee shall pay annual rent equal to five percent (5%) of the fair market value of the Real
Property (the "Annual Rent"), payable in twelve (12) equal monthly installments, which Annual
Rent shall be adjusted as provided further herein. For the purposes of this initial term, the fair
market value of the Real Property is $22,000; therefore the annual rent is $1,100.00.
Notwithstanding anything to the contrary herein, such Annual Rent shall be due and owing only
during any period of time during the term of this Lease that the Lessee does not qualify for the
credit/subsidy set out below for Lessee(s) meeting the criteria set forth in Section 1(A) or 1(B)
above.
Lessor and Lessee shall determine and adjust the Annual Rent according to the "fair market
value" of the Real Property upon the following events: the transfer of this Lease, or every five
(5) years after the date of a transfer of this Lease. The "fair market value" of the Real Property
shall mean the cash price which a purchaser would pay for the Real Property, such valuation to
be made on the assumption that the Real Property is not subject to any agreements, including,
without limitation, leases, and management and service agreements then in effect.
Provided, however, that so long as Lessee meets the definition of a qualified person as set
forth in Section One above, such Lessee shall qualify for a credit/subsidy against the Annual
Rent set out above and the annual rent for the term of the Lease shall be reduced to $1.00 per
year (the "Annual Rent after credit/subsidy"), which Lessee shall pay to Lessor, without
deduction or offset, at the place or places as may be designated from time to time by Lessor.
Upon transfer of this Lease to a new assignee, or after five years after the beginning of this
Lease or five years after a previous determination of fair market value, upon notice from either
party to the other party Lessor and Lessee shall first attempt to agree upon the fair market value
of the Real Property. In the event Lessor and Lessee are unable to agree upon the fair market
value of the Real Property within ten (10) days of the date of such notice, Lessor and Lessee
shall then attempt to agree upon the choice of a licensed Idaho real estate broker who works in
the McCall area to provide a determination of the fair market value of the Real Property, which
value shall be binding on the parties. In the event Lessor and Lessee are unable to agree upon the
choice of a licensed Idaho real estate broker within a further ten (10) days, Lessor and Lessee
shall then attempt to agree upon the selection of three (3) disinterested appraisers. If Lessor and
Lessee are unable to agree upon the selection of three (3) appraisers within a further ten (10)
days, then a petition may be made by either Lessor or Lessee to a court of competent jurisdiction
for such selection of three (3) appraisers. Lessor and Lessee shall each have the right to submit
the names of up to three (3) appraisers to the Court. Each appraiser so selected shall furnish
Lessor and Lessee with a written appraisal within thirty (30) days of such appraiser's selection,
setting forth such appraiser's determination of the fair market value of the Real Property as of the
date the appraisal procedure of this Section is instituted. The average of the two closest
valuations of such appraisers shall be treated as the fair market value of the Real Property and
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the determination shall be final and binding on Lessor and Lessee. All costs associated with
obtaining the fair market value of the Real Property shall be divided equally by Lessor and
Lessee.
Lessee further agrees, for itself, its successors and assigns, that upon assignment of this
Lease to a subsequent purchaser of the Premises, Lessee shall pay to Lessor a lease transfer fee
of $2,500.00. This fee may be reduced or waived if, in the sole discretion of the Lessor, such
transfer fee would constitute a hardship upon the Lessee. Lessor shall use the criteria developed
for reduction of utility charges as a beginning point for determination whether Lessee qualifies
for a complete or partial reduction in the transfer fee. Other factors to be considered will
include, but not be limited to: whether Lessee meets the criteria as a qualified person set out in
Section One of this Lease, the sale price of the improvements compared to the original purchase
price and cost of other improvements, and total household income.
Annual Rent, Annual Rent after credit/subsidy, and any other sums due under this Lease are
sometimes collectively and individually referred to herein as "Rent."
SECTION FOUR. WARRANTIES OF TITLE AND QUIET POSSESSION
Lessor covenants that Lessor is seized of the Real Property in fee simple and has full right to
make and enter into this Lease and that Lessee shall have quiet and peaceable possession of the
Premises during the term of this Lease.
SECTION FIVE. DELIVERY OF POSSESSION
If Lessor, for any reason whatever, cannot deliver possession of the Real Property to Lessee
at the commencement of the term of the Lease, as specified above, this Lease shall not be void or
voidable, nor shall Lessor be liable to Lessee for any loss or damage resulting from such
nondelivery; but in that event, there shall be a proportionate reduction of Annual Rent and
Additional Rent, if applicable, covering the period between the commencement of this Lease
term and the time when Lessor can deliver possession.
SECTION SIX. USES PROHIBITED
Lessee shall not use, or permit the Premises, or any part of the Premises, to be used for any
purpose or purposes other than the purpose or purposes for which the Premises are leased under
this Lease. No use shall be made or permitted to be made of the Premises, or acts done, which
will cause a cancellation of any insurance policy covering any building located on the Premises,
or any part of such building, nor shall Lessee sell, or permit to be kept, used, or sold, in or about
the Premises, any article that may be prohibited by the standard form of fire insurance policies.
Lessee shall, at its sole cost, comply with all requirements, pertaining to the Premises, of any
insurance organization or company, necessary for the maintenance of insurance, as provided in
this Lease, covering any building and appurtenances at any time located on the Premises.
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SECTION SEVEN. WASTE AND NUISANCE PROHIBITED
During the term of this Lease, Lessee shall comply with all applicable laws affecting the
Premises, the breach of which might result in any penalty on Lessor or forfeiture of Lessor's title
to the Real Property. Lessee shall not commit, or suffer to be committed, any waste on the
Premises, or any nuisance. Lessee shall maintain all landscaping including removal of noxious
weeds, mowing grass, trimming trees, irrigating plants as necessary, all to maintain the Premises
to keep the same clean, free from debris, and generally in the same condition as other similar
properties in McCall.
SECTION EIGHT. ABANDONMENT OF PREMISES
Lessee shall not vacate or abandon the Premises at any time during the term of this Lease. If
Lessee abandons, vacates, or surrenders the Premises, or is dispossessed by process of law, or
otherwise, any personal property belonging to Lessee and left on the Premises shall be deemed to
be abandoned and, at the option of Lessor, take possession of such property pursuant to
applicable legal process.
SECTION NINE. LESSOR'S RIGHT OF ENTRY
Lessee shall permit Lessor and the agents and employees of Lessor to enter into and on the
Premises at all reasonable times for the purpose of inspecting the Premises, or for the purpose of
posting notices of nonresponsibility for alterations, additions, or repairs, without any rebate of
Rent and without any liability to Lessee for any loss of occupation or quiet enjoyment of the
Premises occasioned by the entry. Lessee shall permit Lessor and its agents and employees, at
any time within the last year prior to the expiration of this Lease, to place on the Premises any
usual or ordinary "To Let" or "To Lease" signs and exhibit the Premises to prospective tenants at
reasonable hours.
SECTION TEN. ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
A. Lessee may encumber by a purchase money mortgage or deed of trust, or other proper
instrument, its leasehold interest and estate in the Premises, together with all buildings and
improvements placed by Lessee on the Real Property, as security for any indebtedness of Lessee
incurred in purchase of the leasehold improvements. The execution of any mortgage, or deed of
trust, or other instrument, or the foreclosure of any mortgage, or deed of trust, or other
instrument, or any sale, either by judicial proceedings or by virtue of any power reserved in a
mortgage or deed of trust, or conveyance by Lessee to the holder of the indebtedness, or the
exercising of any right, power, or privilege reserved in any mortgage or deed of trust, shall not be
held as a violation of any of the terms or conditions of this Lease, or as an assumption by the
holder of the indebtedness personally of the obligations of this Lease. No encumbrance,
foreclosure, conveyance, or exercise of right shall relieve Lessee from its liability under this
Lease.
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B. If Lessee shall encumber its leasehold interest and estate in the Premises and if Lessee or
the holder of the indebtedness secured by the encumbrance shall give notice to Lessor of the
existence of the encumbrance and the address of the holder, then Lessor will mail or deliver to
the holder, at such address, a duplicate copy of all notices in writing which Lessor may, from
time to time, give to or serve on Lessee under and pursuant to the terms and provisions of this
Lease. The copies shall be mailed or delivered to the holder at, or as near as possible to, the same
time the notices are given to or served on Lessee. The holder may, at its option, at any time
before the rights of Lessee shall be terminated as provided in this Lease, pay any of the Rent due
under this Lease, or pay any taxes and assessments, or do any other act or thing required of
Lessee by the terms of this Lease, or do any act or thing that may be necessary and proper to be
done in the observance of the covenants and conditions of this Lease or to prevent the
termination of this Lease. All payments so made and all things so done and performed by the
holder shall be as effective to prevent a foreclosure of the rights of Lessee as if done and
performed by Lessee.
C. Any holder of an encumbrance of Lessee's leasehold interest shall have the right to bid at
a foreclosure sale or to accept voluntary conveyance of Lessee's interest in lieu of foreclosure.
Any purchaser at such foreclosure sale, or transferee of Lessee's interest voluntarily surrendered
to the holder of an encumbrance, shall take such leasehold interest subject to the terms herein.
Upon sale at foreclosure, or upon acceptance of voluntary conveyance of Lessee's interest in lieu
of foreclosure, the purchaser at sale, or the transferee, as the case may be, shall pay to Lessor any
accrued and unpaid Rent due at the date of foreclosure sale or acceptance of a deed in lieu of
foreclosure.
D. Notwithstanding any other provision of this Lease to the contrary, in the event that a
holder of an encumbrance of Lessee's leasehold interest forecloses such interest or receives a
voluntary surrender of such interest, the Annual Rent shall be abated during the period of time
that such lender is in possession and title to the leasehold interest and the Premises are
unoccupied. Further, upon transfer of the Premises to a third party, the transfer fee set forth in
Section Three above shall be waived in total.
SECTION ELEVEN. SUBLETTING AND ASSIGNMENT
Lessee may sublet the Premises in whole or in part without Lessor's consent, but the making
of any sublease shall not release Lessee from, or otherwise affect in any manner, any of Lessee's
obligations under this Lease. Lessee shall not assign or transfer this Lease, or any interest in this
Lease, without the prior, express, and written consent of Lessor, and one consent to an
assignment shall not be deemed to be a consent to any subsequent assignment. Lessor agrees to
not unreasonably withhold consent to assignment, and further agrees that assignment of the
leasehold interest to an assignee that has qualified to use the Premises as community/workforce
housing as provided further in Section One above, shall be presumed acceptable to Lessor and
for which no written consent will be required. Except as provided immediately above, any
assignment without consent shall be void and shall, at the option of Lessor, terminate this Lease.
Except as provided in Section Ten above, neither this Lease nor the leasehold estate of Lessee
nor any interest of Lessee under this Lease in the Premises or any buildings or improvements on
the Premises shall be subject to involuntary assignment, transfer, or sale, or to assignment,
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levies or charges are made by any municipal or political subdivision. If the right is given to pay
either in one sum or in installments, Lessee may elect either mode of payment and its election
shall be binding on Lessor. If, by making any such election to pay in installments, any of the
installments shall be payable after the termination of this Lease, the unpaid installments shall be
prorated as of the date of termination, and amounts payable after that date shall be paid by
Lessor. All of the taxes and charges under this Section shall be prorated at the commencement
and expiration of the term of this Lease.
C. Contesting taxes. If Lessee shall, in good faith, desire to contest the validity or amount of
any tax, assessment, levy, or other governmental charge agreed in this Section to be paid by
Lessee, Lessee shall be permitted to do so, and to defer payment of such tax or charge, the
validity or amount of which Lessee is so contesting, until final determination of the contest, on
giving to Lessor written notice prior to the commencement of any such contest, which shall be at
least sixty (60) days prior to delinquency, and on protecting Lessor on demand by a good and
sufficient surety bond against any such tax, levy, assessment, rate, or governmental charge, and
from any costs, liability, or damage arising out of any such contest.
D. Disposition of rebates. All rebates on account of any taxes, rates, levies, charges, or
assessments required to be paid and paid by Lessee under the provisions of this Lease shall
belong to Lessee, and Lessor will, on the request of Lessee, execute any receipts, assignments, or
other documents that may be necessary to secure the recovery of any rebates, and will pay over
to Lessee any rebates that may be received by Lessor.
E. Receipts. Lessee shall obtain and deliver receipts or duplicate receipts for all taxes,
assessments, and other items required under this Lease to be paid by Lessee, promptly on
payment of any such taxes, assessments, and other items.
SECTION FOURTEEN. ALTERATIONS
Alterations, improvements, and changes permitted. Lessee shall have the right to make such
alterations, improvements, and changes to any building that may, from time to time, be on the
Premises as Lessee may deem necessary, or to replace any building with a new one of at least
equal value, provided that prior to making any structural alterations, improvements, or changes,
or to replacing any building, Lessee shall obtain Lessor's written approval of the plans and
specifications, which approval Lessor shall not unreasonably withhold, provided that the value of
the building shall not be diminished and the structural integrity of the building shall not be
adversely affected by any such alterations, improvements, or changes, or that any proposed new
building is at least equal in value to the one that it is to replace, as the case may be. In the event
of disapproval, Lessor shall give to Lessee an itemized statement of reasons for the disapproval.
If Lessor does not disapprove the plans and specifications provided for in this Section within
thirty (30) days after they have been submitted to Lessor, the plans and specifications shall be
deemed to have been approved by Lessor. Lessee will in no event make any alterations,
improvements, or other changes of any kind to any building on the Premises that will decrease
the value of the building, or that will adversely affect the structural integrity of the building.
Lessor has the right but not the obligation to post the Premises with appropriate notices of
Lessor's non -responsibility.
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transfer, or sale by operation of law in any manner whatever. Any such attempted involuntary
assignment, transfer, or sale shall be void and of no effect and shall, at the option of Lessor,
terminate this Lease. An assignment of this Lease for security purposes in connection with the
purchase of the improvements built on the Premises shall not require prior written consent
provided that such assignment for security purposes shall be expressly subject to the terms
hereof. Upon consent to an assignment, the assignee shall succeed to the interest of the Lessee,
and all references herein to Lessee shall apply to such assignee.
SECTION TWELVE. NOTICES
A. All notices, demands, or other writings in this Lease provided to be given or made or
sent, or which may be given or made or sent, by either party to the other, shall be deemed to have
been fully given or made or sent when made in writing and deposited in the United States mail,
registered and postage prepaid, and addressed as follows:
To Lessor:
To Lessee:
City of McCall
216 E. Park St.
McCall, ID 83638
Neighborhood Housing Services, Inc.
1401 Shoreline Drive
Boise, ID 83707
B. The address to which any notice, demand, or other writing may be given or made or sent
to any party as above provided may be changed by written notice given by the party as above
provided.
SECTION THIRTEEN. TAXES AND ASSESSMENTS
A. Taxes as further Rent. As further Rent under this Lease, Lessee shall pay and discharge as
they become due, promptly and before delinquency, all taxes, assessments, rates, charges, license
fees, municipal liens, levies, excises, or imposts, whether general or special, or ordinary or
extraordinary, of every name, nature, and kind whatever, including all governmental charges of
whatever name, nature, or kind, which may be levied, assessed, charged, or imposed, or which
may become a lien or charge on or against the Premises, or any part of the Premises, the
leasehold of Lessee in and under this Lease, any building or buildings, or any other
improvements now or later on the Premises, or on or against Lessee's estate created by this Lease
that may be a subject of taxation, or on or against Lessor by reason of its ownership of the fee
underlying this Lease, during the entire term of this Lease, excepting only those taxes
specifically excepted below.
B. Assessments affecting improvements. Specifically and without in any way limiting the
generality of the provisions of paragraph A of this Section, Lessee shall pay all special
assessments and levies or charges made by any municipal or political subdivision for local
improvements, and shall pay the same in cash as they shall fall due and before they shall become
delinquent and as required by the act and proceedings under which any such assessments or
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Disposition of improvements. Any building constructed on the Premises, and all alterations,
improvements, changes, or additions made in or to the Premises shall be the property of Lessee,
and Lessee shall have a leasehold interest in them, subject to the terms of this Lease.
SECTION FIFTEEN. REPAIRS AND DESTRUCTION OF IMPROVEMENTS
A. Maintenance of improvements. Lessee shall, throughout the term of this Lease, at its own
cost, and without any expense to Lessor, keep and maintain the Premises, including all buildings
and improvements of every kind that may be a part of the Premises, and all appurtenances to the
Premises, in good, sanitary, and neat order, condition and repair, and, except as specifically
provided in this Lease, restore and rehabilitate any improvements of any kind that may be
destroyed or damaged by fire, casualty, or any other cause whatever.
B. No obligation by Lessor to make improvements. Lessor shall not be obligated to make
any repairs, replacements, or renewals, of any kind, nature, or description, to the Premises.
C. Lessee's compliance with laws. Lessee shall also comply with and abide by all federal,
state, county, municipal, and other governmental statutes, ordinances, laws, and regulations
affecting the Premises, the improvements on or any activity or condition on or in the Premises.
D. Damage to and destruction of improvements. The damage, destruction, or partial
destruction of any building or other improvement that is a part of the Premises shall not release
Lessee from any obligation under this Lease. In case of damage to or destruction of any such
building or improvement, Lessee shall, at its own expense, promptly repair and restore it to a
condition as good or better than that which existed prior to the damage or destruction. Without
limiting the obligations of Lessee, it is agreed that the proceeds of any insurance covering
damage or destruction shall be made available to Lessee for repair or replacement.
SECTION SIXTEEN. UTILITIES
Lessee shall fully and promptly pay for all water, gas, heat, light, power, telephone service,
and other public utilities of every kind furnished to the Premises throughout the term of this
Lease, and all other costs and expenses of every kind whatever of or in connection with the use,
operation, and maintenance of the Premises and all activities conducted on the Premises, and
Lessor shall have no responsibility of any kind for any such utilities.
SECTION SEVENTEEN. LIENS
A. Lessee's duty to keep Premises free of liens. Lessee shall keep all and every part of the
Premises and all buildings and other improvements at any time located on the Premises free and
clear of any and all mechanics', material suppliers', and other liens for or arising out of or in
connection with work or labor done, services performed, or materials or appliances used or
furnished for or in connection with any operations of Lessee, any alteration, improvement, or
repairs or additions that Lessee may make or permit or cause to be made, or any work or
construction, by, for, or permitted by Lessee on or about the Premises, or any obligations of any
kind incurred by Lessee, and at all times promptly and fully to pay and discharge any and all
claims on which any such lien may or could be based, and to indemnify Lessor and all of the
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Premises and all buildings and improvements on the Premises from and against any and all such
liens and claims of liens and suits or other proceedings pertaining to the Premises.
B. Contesting liens. If Lessee desires to contest any lien, it shall notify Lessor of its intention
to do so within thirty (30) days after the filing of the lien. In that case, and provided that Lessee
shall, on demand, protect Lessor by a good and sufficient surety bond against any lien and any
cost, liability, or damage arising out of such contest, Lessee shall not be in default under this
Lease until thirty (30) days after the final determination of the validity of the lien, within which
time Lessee shall satisfy and discharge the lien to the extent held valid. However, the satisfaction
and discharge of any lien shall not, in any case, be delayed until execution is had on any
judgment rendered on the lien, and such delay shall be a default of Lessee under this Lease.
C. Indemnification. In the event of any such contest, Lessee shall protect and indemnify
Lessor against any and all loss, expense, and damage resulting from the contest.
SECTION EIGHTEEN. INDEMNIFICATION OF LESSOR
Lessor shall not be liable for any loss, injury, death, or damage to persons or property that at
any time may be suffered or sustained by Lessee or by any person who may at any time be using
or occupying or visiting the Premises or be in, on, or about the Premises, whether the loss, injury,
death, or damage shall be caused by or in any way result from or arise out of any act, omission,
or negligence of Lessee or of any occupant, subtenant, visitor, or user of any portion of the
Premises, or shall result from or be caused by any other matter or thing whether of the same kind
as, or of a different kind than, the matters or things above set forth. Lessee shall indemnify
Lessor against any and all claims, liability, loss, or damage whatever on account of any such
loss, injury, death, or damage. Lessee waives all claims against Lessor for damages to the
building and improvements that are now on or later placed or built on the Premises and to the
property of Lessee in, on, or about the Premises, and for injuries to persons or property in or
about the Premises, from any cause arising at any time. The two preceding sentences shall not
apply to loss, injury, death, or damage arising by reason of the negligence or misconduct of
Lessor, its agents, or employees.
Notwithstanding the foregoing, in the event that any agency of the government of the United
States of America succeeds to the interest of a Lessee by foreclosure or voluntary surrender of
the leasehold interest, or otherwise, any provision herein that is contrary to federal law or
regulation shall be null and void and is unenforceable, and failure to meet the terms of this
section shall not, under those circumstances constitute a default herein.
SECTION NINETEEN. ATTORNEY'S FEES
If any action at law or in equity shall be brought to recover any Rent under this Lease, or for
or on account of any breach of, or to enforce or interpret any of the covenants, terms, or
conditions of this Lease, or for the recovery of the possession of the Premises, the prevailing
party shall be entitled to recover from the other party, as part of the prevailing party's costs,
reasonable attorney's fees, the amount of which shall be fixed by the court and shall be made a
part of any judgment or decree rendered.
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SECTION TWENTY. REDELIVERY OF REAL PROPERTY
Lessee shall pay the Rent in the amounts, at the times, and in the manner provided in this
Lease, and shall keep and perform all the terms and conditions on its part to be kept and
performed. At the expiration or earlier termination of this Lease, Lessee shall peaceably and
quietly quit and surrender to Lessor the Real Property in good order and condition subject to the
other provisions of this Lease. In the event of the nonperformance by Lessee of any of the
covenants of Lessee undertaken in this Lease, this Lease may be terminated as provided
elsewhere in this Lease.
SECTION TWENTY-ONE. REMEDIES CUMULATIVE
All remedies conferred on Lessor in this Lease shall be deemed cumulative and no one
exclusive of the other, or of any other remedy conferred by law.
SECTION TWENTY-TWO. INSURANCE
A. Insurance coverage of Premises. Lessee shall, at all times during the term of this Lease
and at Lessee's sole expense, keep all improvements that are now or later a part of the Premises
insured against loss or damage by fire and the extended coverage hazards the full replacement
value of the improvements, with loss payable to Lessor and Lessee as their interests may appear.
Any loss adjustment shall require the written consent of both Lessor and Lessee.
B. Personal injury liability insurance. Lessee shall maintain in effect throughout the term of
this Lease personal injury liability insurance covering the Premises and its appurtenances and the
sidewalks fronting on them in the amount equal to the Idaho Tort Claim limits now in effect or
hereafter amended. Such insurance shall specifically insure Lessee against all liability assumed
by it under this Lease, as well as liability imposed by law, and shall insure both Lessor and
Lessee but shall be so endorsed as to create the same liability on the part of the insurer as though
separate policies had been written for Lessor and Lessee.
C. Lessor's right to pay premiums on behalf of Lessee. All of the policies of insurance
referred to in this Section shall be written in a form satisfactory to Lessor and by insurance
companies satisfactory to Lessor. Lessee shall pay all of the premiums for insurance and deliver
policies, or certificates of policies, to Lessor. In the event of the failure of Lessee, either to effect
insurance in the names called for in this Lease or to pay the premiums for the insurance or to
deliver the policies, or certificates of the policies, to Lessor, Lessor shall be entitled, but shall
have no obligation, to effect such insurance and pay the premiums for the insurance, which
premiums shall be repayable to Lessor with the next installment of Rent. Failure to repay the
same shall carry with it the same consequence as failure to pay any installment of Rent. Each
insurer mentioned in this Section shall agree, by endorsement on the policy or policies issued by
it, or by independent instrument furnished to Lessor, that it will give to Lessor thirty (30) days'
written notice before the policy or policies in question shall be altered or canceled. Lessor agrees
that it will not unreasonably withhold its approval as to the form or to the insurance companies
selected by Lessee.
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D. Definition of full replacement value. The term "full replacement value" of improvements,
as used in this Lease, shall mean the actual replacement cost of the improvements from time to
time less exclusions provided in the normal fire insurance policy.
E. Cost of insurance deemed further Rent. The cost of insurance required to be carried by
Lessee in this Section shall be deemed to be further Rent under this Lease.
F. Notwithstanding the foregoing, in the event that any agency of the government of the
United States of America succeeds to the interest of a Lessee by foreclosure or voluntary
surrender of the leasehold interest, or otherwise, any provision herein that is contrary to federal
law or regulation shall be null and void and is unenforceable, and failure to meet the terms of this
section shall not, under those circumstances constitute a default herein.
SECTION TWENTY-THREE. PROHIBITION OF INVOLUNTARY ASSIGNMENT;
EFFECT OF BANKRUPTCY OR INSOLVENCY
A. Prohibition of involuntary assignment. Neither this Lease nor the leasehold estate of
Lessee nor any interest of Lessee under this Lease in the Premises or in the building or
improvements on the Premises shall be subject to involuntary assignment, transfer, or sale, or to
assignment, transfer, or sale by operation of law in any manner whatever (except through
statutory merger or consolidation, or devise, or intestate succession, excepting foreclosure or
voluntary relinquishment in lieu of foreclosure as set forth at Section Ten above); any attempt at
involuntary assignment, transfer, or sale shall be void and of no effect.
B. Effect of bankruptcy. Without limiting the generality of the provisions of the preceding
paragraph A of this Section, Lessee agrees that if any proceedings under applicable federal
bankruptcy laws be commenced by or against Lessee, and, if against Lessee, the proceedings
shall not be dismissed before either an adjudication in bankruptcy or the confirmation of a
composition, arrangement, or plan or reorganization, or if Lessee is adjudged insolvent or makes
an assignment for the benefit of its creditors, or if a receiver is appointed in any proceeding or
action to which Lessee is a party, with authority to take possession or control of the Premises or
the business conducted on the Premises by Lessee, and such receiver is not discharged within a
period of thirty (30) days after his or her appointment, any such event or any involuntary
assignment prohibited by the provisions of the preceding paragraph A of this Section shall be
deemed to constitute a breach of this Lease by Lessee and shall, at the election of Lessor, but not
otherwise, without notice or entry or other action of Lessor, terminate this Lease and also all
rights of Lessee under this Lease and in and to the Premises and also all rights of any and all
persons claiming under Lessee.
SECTION TWENTY-FOUR. NOTICE OF DEFAULT
A. Except as to the provisions of Sections Eleven and Twenty -Three of this Lease, Lessee
shall not be deemed to be in default under this Lease in the payment of Rent or in the furnishing
of any insurance policy when required in this Lease unless Lessor shall first give to Lessee thirty
(30) days' written notice of the default and Lessee fails to cure the default within thirty (30) days.
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B. Except as to the provisions or events referred to in the preceding paragraph of this
Section, Lessee shall not be deemed to be in default under this Lease unless Lessor shall first
give to Lessee thirty (30) days' written notice of the default, and Lessee fails to cure the default
within the thirty (30) day period, or, if the default is of such a nature that it cannot be cured
within thirty (30) days, Lessee fails to commence to cure the default within the period of thirty
(30) days or fails to proceed to the curing of the default with all possible diligence.
SECTION TWENTY-FIVE. DEFAULT
In the event of any breach of this Lease by Lessee, Lessor, in addition to the other rights or
remedies it may have, shall have the immediate right of reentry and may remove all persons and
property from the Premises. The property may be removed and stored in a public warehouse or
elsewhere at the cost and for the account of Lessee. Should Lessor elect to reenter, as provided in
this Lease, or should it take possession pursuant to legal proceedings or pursuant to any notice
provided for by law, Lessor may either terminate this Lease or it may from time to time, without
terminating this Lease, relet the Premises or any part of the Premises for such term or terms
(which may be for a term extending beyond the term of this Lease) and at such rental or rentals
and on such other terms and conditions as Lessor in the sole discretion of Lessor may deem
advisable with the right to make alterations and repairs to the Premises. On each reletting: (a)
Lessee shall be immediately liable to pay to Lessor, in addition to any indebtedness other than
Rent due under this Lease, the reasonable expenses of reletting and of making such alterations
and repairs, incurred by Lessor; or (b) at the option of Lessor, rents received by Lessor from
reletting shall be applied, first, to the payment of any expenses of reletting and of making
alterations and repairs; and second, to the payment of Rent due and unpaid under this Lease, and
the residue, if any, shall be held by Lessor and applied in payment of future Rent as it may
become due and payable under this Lease. If Lessee has been credited with any rent to be
received by reletting under option (a), above, and the rent was not promptly paid to Lessor by the
new tenant, or if the rentals received from the reletting under option (b), above, during any
month is less than that to be paid during that month by Lessee under this lease agreement, Lessee
shall pay any deficiency to Lessor. The deficiency shall be calculated and paid monthly. No
reentry or taking possession of the Premises by Lessor shall be construed as an election on the
part of Lessor to terminate this Lease unless a written notice of such intention is given to Lessee
or unless the termination of this Lease is decreed by a court of competent jurisdiction. In spite of
any reletting without termination, Lessor may, at any subsequent time, elect to terminate this
Lease for such previous breach. Should Lessor at any time terminate this Lease for any breach, in
addition to any other remedy it may have, Lessor may recover from Lessee all damages incurred
by reason of the breach, including the cost of recovering the Real Property, and including the
worth at the time of termination of the excess, if any, of the amount of rent and charges
equivalent to rent reserved in this lease for the remainder of the stated term over the then
reasonable rental value of the Real Property for the remainder of the stated term, all of which
amounts shall be immediately due and payable from Lessee to Lessor.
Notwithstanding the foregoing, in the event that Lessee's leasehold interest is subject to an
encumbrance by the United States Department of Agriculture, Rural Development program, or
similar loan program, Lessor agrees that Lessor will not terminate this Lease unless Lessor has
provided advance written notice to said agency of Lessee's default not less than one hundred
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14
twenty (120) days prior to such termination and such default remains uncured. Said agency may
cure Lessee's default during the one hundred twenty (120) day period
In the event Lessor is in default under any of the terms of this Lease, Lessee shall provide
written notice to Lessor specifying the nature of the default and giving Lessor not less than thirty
(30) days in which to cure such default. If Lessor fails to cure the default within the time
specified in the notice, Lessee shall be entitled to all remedies available to Lessee under Idaho
law.
SECTION TWENTY-SIX. LESSOR'S RIGHT TO PERFORM
If Lessee, by failing or neglecting to do or perform any act or thing provided in this Lease by
it to be done or performed, shall be in default under this Lease and such failure shall continue for
a period of ten (10) days after written notice from Lessor specifying the nature of the act or thing
to be done or performed, then Lessor may, but shall not be required to, do or perform or cause to
be done or performed such act or thing (entering on the Premises for such purposes, if Lessor
shall so elect), and Lessor shall not be held liable or in any way responsible for any loss,
inconvenience, annoyance, or damage resulting to Lessee on account of that election. Lessee
shall repay to Lessor on demand the entire expense incurred on account of the election, including
compensation to the agents and employees of Lessor. Any act or thing done by Lessor pursuant
to the provisions of this Section shall not be construed as a waiver of any such default by Lessee,
or as a waiver of any covenant, term, or condition contained in this Lease, or of any other right or
remedy of Lessor, under this Lease or otherwise. All amounts payable by Lessee to Lessor under
any of the provisions of this Lease, if not paid when they become due as in this Lease provided,
shall bear interest from the date they become due until paid at the rate of twelve percent (12%)
per annum, compounded annually.
SECTION TWENTY-SEVEN. EFFECT OF EMINENT DOMAIN
A. Effect of total condemnation. If the entire Premises shall be appropriated or taken under
the power of eminent domain by any public or quasi -public authority, this Lease shall terminate
and expire as of the date of the taking, and Lessee shall then be released from any liability
subsequently accruing under this Lease.
B. Effect of partial condemnation. If a portion of the Premises shall be so appropriated or
taken and the remainder of the property shall not be suitable for the use then being made of the
property by Lessee, or if the remainder of the property is not one undivided parcel of property,
Lessee shall have the right to terminate this Lease as of the date of the taking on giving to Lessor
written notice of termination within five (5) days after Lessor has notified Lessee in writing that
the property has been so appropriated or taken.
C. If there is a partial taking and Lessee does not so terminate this Lease, then this Lease
shall continue in full force and effect as to the part not taken, and the Rent to be paid by Lessee
during the remainder of the term, subject to adjustment as provided in the rental adjustment
provisions of Section Three of this Lease, shall be prorated.
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15
D. Condemnation award. In the event of the termination of this Lease by reason of the total
or partial taking of the Premises by eminent domain, then in any such condemnation
proceedings, Lessor and Lessee shall be free to make claim against the condemning or taking
authority for the amount of any damage done to them, respectively, as a result of the condemning
or taking.
E. In the event of a partial taking of the Premises and this Lease is not terminated, then
Lessee shall have the right to make claim against the condemning or taking authority for only the
unamortized cost of the improvements placed on the Premises by Lessee and located on the
Premises at the time of the taking or appropriation, which improvements shall be deemed to
amortize in equal annual amounts over the period commencing with the date of completion of
the improvements and ending thirty (30) years after completion.
SECTION TWENTY-EIGHT. SURRENDER OF LEASE
The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation of this
Lease, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing
subleases or subtenancies or may, at the option of Lessor, operate as an assignment to it of any or
all such subleases or subtenancies.
SECTION TWENTY-NINE. RIGHT OF FIRST REFUSAL AND EXTENSION OF
LEASE TERM
On termination of this Lease for any cause, or upon Lessee's entering into an agreement to
sell any building or improvements, Lessor shall have a first right of refusal to purchase any
building or improvements on the Premises; provided, however, notwithstanding anything to the
contrary herein, except when the lease is terminated for Lessee's failure to timely cure any
default, upon the end of the term of this Lease, as provided in Section Two above (including the
termination of any renewals thereof), so long as Lessee is not in default under the terms of the
Lease, then this Lease shall automatically renew for a successive term of 20 (twenty) years
("Renewal Term"). Each Renewal Term shall be on the same terms and conditions as set forth in
this Lease.
SECTION THIRTY. TRANSFER OF SECURITY
If any security is given by Lessee to secure the faithful performance of all or any of the
covenants of this Lease on the part of Lessee, Lessor may transfer or deliver the security, as
such, to the purchaser of the reversion, if the reversion be sold, and then Lessor shall be
discharged from any further liability in reference to the security.
SECTION THIRTY-ONE. WAIVER
The waiver by Lessor of, or the failure of Lessor to take action with respect to, any breach of
any term, covenant, or condition contained in this Lease shall not be deemed to be a waiver of
such term, covenant, or condition, or subsequent breach of the same, or any other term, covenant,
or condition contained in this Lease. The subsequent acceptance of Rent under this Lease by
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August 27, 2009
16
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of any term,
covenant, or condition of this Lease, other than the failure of Lessee to pay the particular rental
so accepted, regardless of Lessor's knowledge of a preceding breach at the time of acceptance of
Rent.
SECTION THIRTY-TWO. EFFECT OF LESSEE'S HOLDING OVER
Any holding over after the expiration of the term of this Lease, with the consent of Lessor,
shall be construed to be a tenancy from month -to -month, at the same Rent as required to be paid
by Lessee for the period immediately prior to the expiration of the term of this Lease, and shall
otherwise be on the terms and conditions specified in this Lease, so far as applicable.
SECTION THIRTY-THREE. PARTIES BOUND
The covenants and conditions contained in this Lease shall, subject to the provisions as to
assignment, transfer, and subletting, apply to and bind the heirs, successors, executors,
administrators, and assigns of all of the parties to this Lease. All of the parties shall be jointly
and severally liable under this Lease.
SECTION THIRTY-FOUR. TIME OF THE ESSENCE
Time is of the essence of this Lease, and of every covenant, term, condition, and provision of
this Lease.
SECTION THIRTY-FIVE. SECTION CAPTIONS
The captions appearing under the section number designations of this Lease are for
convenience only and are not a part of this Lease and do not in any way limit or amplify the
terms and provisions of this Lease.
SECTION THIRTY-SIX. GOVERNING LAW
This Lease shall be governed by, construed, and enforced in accordance with the laws of
Idaho.
SECTION THIRTY-SEVEN. ENTIRE AGREEMENT
This Lease shall constitute the entire agreement between the parties. Any prior understanding
or representation of any kind preceding the date of this Lease shall not be binding on either party
except to the extent incorporated in this Lease.
SECTION THIRTY-EIGHT. MODIFICATION OF AGREEMENT
Any modification of this Lease or additional obligation assumed by either party in
connection with this Lease shall be binding only if evidenced in a writing signed by each party or
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17
an authorized representative of each party. In the event that Lessor amends or restates any
ground lease it has on any other Greystone Village No. 3 parcel on McCall Avenue, Lessor shall
give notice of the amendment or restatement to Lessee who shall then have sixty (60) days after
said notice is mailed in which to decide whether to offer to amend this Lease to incorporate the
same terms as the other amended or restated lease. If within that sixty (60) day period Lessee
notifies Lessor in writing that Lessee offers to amend this Lease accordingly, then Lessor shall
consent to such amendment or restatement and the same shall be reduced to writing, signed by
the parties, and shall be recorded. In the event that Lessee does not make such offer to amend or
restate within sixty (60) days after notice is mailed to Lessee, Lessee shall have no right to
amend or restate this Lease unless Lessor, in its sole and absolute discretion, decides to accept
such amendment or restatement.
Notwithstanding the foregoing, if the leasehold interest herein or any improvements built
thereon are encumbered, no modification shall be effective unless, and until, approved in writing
by the holder of such encumbrance.
SECTION THIRTY-NINE. ADDITIONAL DOCUMENTS
The parties agree to execute whatever papers and documents may be necessary to effectuate
the terms of this Lease.
Each party to this Lease has caused it to be executed on the date hereof.
IN WITNESS WHEREOF, the parties hereto, having been duly authorized, execute this
Amended and Restated Ground Lease on the date first written above.
NEIGHBORHOOD HOUSING SERVICES,
INC., an Idaho non-profit corporation
By:
Connie Hogland, Chief Executive Officer
CITY OF MCCALL, an Idaho unicipal
corporation
By:
Bert Kulesza, Mayor
ATTEST:
By:
Ground Lease
August 27, 2009
BessieJo Wagr, City Cler
18
STATE OF IDAHO,
)ss
County of (1\(7) )
On this )8� day of ,��:���4---- , 2009, before me, t;1 (it � c 4J -7 _ a
Notary Public in ae e. yad for said State, personally appeared Connie Hogland known or identified to
me to be tive Officer of Nei Services, Inc., an Idaho non-
profit e:; Neighborhood Housing
profit c •thaOtie ted the instrument or the person that executed the instrument on of
behalf. cciaokaphl and acknowledged to me that such corporation executed the same.
N.
WITIQt��JhiEREOF, I have hereunto set my hand and affixed my official seal, the
day at year illthlOArtili@gtg first above written.
'""'••"'04
NO'l A UBLIC FOR ip
My Commission Expires: , �) M/7 /,,t (3
STATE OF IDAHO,
)ss
County of Valley )
On this j day of ate/ , 2009, before me, E t'%tip a
Notary Public in and for said Mate, personally appeared Bert Kulesza /and BessieJo Wagner
known or identified to me to be the Mayor and the City Clerk of the City of McCall, ID,
respectively, the Idaho municipal corporation that executed the instrument or the person that
executed the instrument on of behalf of said municipal corporation, and the person who attested
the Mayor's signature to the instrument, and acknowledged to me that such municipal
corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the
day and year in this certificate first above written.
Ground Lease
August 27, 2009
NOTARY PUi3LIC FOR IDAHO
My Commission Expires: i'/ (' / Ty
19
EXHIBIT 1
LEGAL DESCRIPTION
OF
PROPERTY
Lot 4, Block 3, Greystone Village No. 3, 1543 McCall Avenue, McCall, Valley County, Idaho,
according to the official plat thereof, recorded July 31, 2006, as Instrument No. 311462, records
of Valley County, Idaho.
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