HomeMy WebLinkAbout000211 Original ContractLease No. 20- 085091
2011 1270489
Page 1 of 33 Lease
Port Angeles City Of
Clallam County Washington 09/26/2011 02 40 23 PM
1111 WA PP1 „«VIIALIAdrrilti Ilrell§ B 111
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WASHINGTON STATE DEPARTMENT OF
Natural Resources
Peter Goldmark Commissioner of Public Lands
AQUATIC LANDS LEASE
BACKGROUND
City of Port Angeles
Record #000211
Grantor: Washington State Department of Natural Resources
Grantee(s): City of Port Angeles
Legal Description: Section 33, Township 31 North, Range 6 West, W.M.
Assessor's Property Tax Parcel or Account Number: 063100 000000
Assessor's Property Tax Parcel or Account Number for Upland parcel used in conjunction with
this lease: N/A
THIS LEASE is between the STATE OF WASHINGTON, acting through the Department of
Natural Resources "State and CITY OF PORT ANGELES, a government agency "Tenant
Tenant desires to lease the aquatic lands commonly known as Ediz Hook, which are tidelands
located in Clallam County, Washington, from State, and State desires to lease the property to
Tenant pursuant to the terms and conditions of this Lease. State has authority to enter Lease
under Chapter 43.12, Chapter 43.30 and Title 79 of the Revised Code of Washington (RCW).
Nonetheless, the State's goals are to foster water dependent uses and to ensure environmental
protection of state owned aquatic lands, and non water dependent uses are only allowed in
exceptional circumstances. Because this lease would authorize an existing structure that serves a
non -water dependent use and because only a portion of the structure lies on state -owned aquatic
lands, the State hereby puts the tenant on notice that it is the desire of the state that the structure
authorized pursuant to this lease be eventually relocated off of State -owned Aquatic lands.
Therefore, any consideration for future leasing beyond the term of the lease will depend on
Aquatic Lands Lease Page 1 of 31 Lease No. 20- 085091
Tenant's satisfactory and reasonable progress toward relocating the structure off of State -owned
aquatic lands.
THEREFORE, the Parties agree as follows:
1.1
Aquatic Lands Lease
SECTION 1 PROPERTY
Property Defined.
(a) State leases to Tenant and Tenant leases from State the real property described in
Exhibit A together with all the rights of State, if any, to improvements on and
easements benefiting the Property, but subject to the exceptions and restrictions
set forth in this Lease (collectively the "Property
(b) This Lease is subject to all valid interests of third parties noted in the records of
Clallam County, or on file in the office of the Commissioner of Public Lands,
Olympia, Washington; rights of the public under the Public Trust Doctrine or
federal navigation servitude; and treaty rights of Indian Tribes.
(c) This Lease does not include a right to harvest, collect or damage natural
resources, including aquatic life or living plants; water rights; mineral rights; or a
right to excavate or withdraw sand, gravel, or other valuable materials, except to
the extent expressly permitted in Exhibit B.
(d) State reserves the right to grant easements and other land uses on the Property to
others when the easement or other land uses will not interfere unreasonably with
the Permitted Use.
1.2 Survey and Property Descriptions.
(a) Tenant prepared Exhibit A, which describes the Property. Tenant warrants that
Exhibit A is a true and accurate description of the Lease boundaries and the
improvements to be constructed or already existing in the Lease area. Tenant's
obligation to provide a true and accurate description of the Property boundaries is
a material term of this Lease.
(b) State's acceptance of Exhibit A does not constitute agreement that Tenant's
property description accurately reflects the actual amount of land used by Tenant.
State reserves the right to retroactively adjust rent if at any time during the term of
the Lease State discovers a discrepancy between Tenant's property description
and the area actually used by Tenant.
1.3 Inspection. State makes no representation regarding the condition of the Property,
improvements located on the Property, the suitability of the Property for Tenant's Permitted Use,
compliance with governmental laws and regulations, availability of utility rights, access to the
Property, or the existence of hazardous substances on the Property. Tenant inspected the
Property and accepts it "AS IS."
SECTION 2 USE
Page 2 of 31 Lease No. 20- 085091
2.1 Permitted Use. Tenant shall use the Property for: maintaining a storage building (the
"Permitted Use and for no other purpose. This is a nonwater- dependent use. Exhibit B
describes the Permitted Use in detail. The Permitted Use is subject to additional obligations in
Exhibit B.
2.2 Restrictions on Permitted Use and Operations. The following limitations apply to the
Property and adjacent state -owned aquatic land. Tenant's compliance with the following does
not limit Tenant's liability under any other provision of this Lease.
(a) Tenant shall not cause or permit:
(1) Damage to natural resources, except to the extent expressly permitted in
Exhibit B,
(2) Waste, or
(3) Deposit of material, unless approved by State in writing, and except to the
etent expressly permitted in Exhibit B. This prohibition includes deposit
of fill, rock, earth, ballast, wood waste, refuse, garbage, waste matter,
pollutants of any type, or other matter.
(b) Tenant shall not cause or permit scour or damage to aquatic land and vegetation.
This prohibition includes the following limitations:
(1) Tenant shall not use or allow use of a pressure washer to clean underwater
surfaces unless the water is deeper than seven (7) feet at the time.
(2) Tenant shall not allow moorage or anchorage of vessels in water more
shallow than seven (7) feet at the extreme low tide or water.
(3) If anchoring, Tenant shall use and shall require use of anchor lines with
midline floats.
(c) Tenant shall not construct new bulkheads or place hard bank armoring.
(d) Tenant shall not install fixed breakwaters.
(e) Unless approved by State in writing, Tenant shall not cause or permit dredging on
the Property. State will not approve dredging unless (1) required for flood
control, maintenance of existing vessel traffic lanes, or maintenance of water
intakes and (2) consistent with State's management plans, if any. Tenant shall
maintain authorized dredge basins in a manner that prevents internal deeper
pockets.
2.3 Conformance with Laws. Tenant shall, at all times, keep current and comply with all
conditions and terms of permits, licenses, certificates, regulations, ordinances, statutes, and other
government rules and regulations regarding Tenant's use or occupancy of the Property.
2.4 Liens and Encumbrances. Unless expressly authorized by State in writing, Tenant shall
keep the Property free and clear of liens or encumbrances arising from the Permitted Use or
Tenant's occupancy of the Property.
Aquatic Lands Lease
SECTION 3 TERM
Page 3 of 31 Lease No. 20- 085091
3.1 Term Defined. The term of this Lease is twelve (12) years (the "Term beginning on
the 1 day of August, 2011 (the "Commencement Date and ending on the 31 day of July,
2023 (the "Termination Date unless terminated sooner under the terms of this Lease.
3.2 Renewal of the Lease. This Lease does not provide a right of renewal. Tenant may
apply for a new lease, which State has discretion to grant. Tenant must apply for a new lease at
least one (1) year prior to Termination Date. State will notify Tenant within ninety (90) days of
its intent to approve or deny a new Lease.
3.3 End of Term.
(a) Upon the expiration or termination of this Lease, Tenant shall remove
Improvements in accordance with Section 7, Improvements, and surrender the
Property to State in the same or better condition as on the Commencement Date,
reasonable wear and tear excepted.
(b) Definition of Reasonable Wear and Tear.
(1) Reasonable wear and tear is deterioration resulting from the Permitted Use
that has occurred without neglect, negligence, carelessness, accident, or
abuse of the Property by Tenant or any other person on the premises with
the permission of Tenant.
(2) Reasonable wear and tear does not include unauthorized deposit of
material prohibited under Paragraph 2.2 regardless of whether the deposit
is incidental to or the byproduct of the Permitted Use.
(c) If Property is in worse condition, excepting for reasonable wear and tear, on the
surrender date than on the Commencement Date, the following provisions apply.
(1) State shall provide Tenant a reasonable time to take all steps necessary to
remedy the condition of the Property. State may require Tenant to enter
into a right -of -entry or other use authorization prior to the Tenant entering
the Property if the Lease has terminated.
(2) If Tenant fails to remedy the condition of the Property in a timely manner,
State may take steps reasonably necessary to remedy Tenant's failure.
Upon demand by State, Tenant shall pay all costs of State's remedy,
including but not limited to the costs of removing and disposing of
material deposited improperly on the Property, lost revenue resulting from
the condition of the Property, and administrative costs associated with the
State's remedy.
3.4 Holdover.
(a) If Tenant remains in possession of the Property after the Termination Date, the
occupancy will not be an extension or renewal of the Term. The occupancy will
be a month -to -month tenancy, on terms identical to the terms of this Lease, which
either Party may terminate on thirty (30) days' written notice.
(1) The monthly rent during the holdover will be the same rent that would be
due if the Lease were still in effect and all adjustments in rent were made
in accordance with its terms.
(2) Payment of more than the monthly rent will not be construed to create a
periodic tenancy longer than month -to- month. If Tenant pays more than
Aquatic Lands Lease Page 4 of 31 Lease No. 20- 085091
the monthly rent and State provides notice to vacate the property, State
shall refund the amount of excess payment remaining after the Tenant
ceases occupation of the Property.
(b) If State notifies Tenant to vacate the Property and Tenant fails to do so within the
time set forth in the notice, Tenant will be a trespasser and shall owe the State all
amounts due under RCW 79.02.300 or other applicable law.
3.5 Adjustment of Term Resulting from Tenant's Possession.
(a) If, for any reason whatsoever, State cannot deliver possession of the Property to
Tenant on the Commencement Date, this Lease will not be void or voidable, nor
will State be liable to Tenant for loss or damage resulting from the delay in
delivery of possession. In such event, the date of delivery of possession will be
the Commencement Date for all purposes, including the payment of rent.
(b) If Tenant takes possession before the Commencement Date, the date of possession
will be the Commencement Date for all purposes, including the payment of rent.
If the Lease Term commences earlier or later than the scheduled Commencement
Date, the Termination Date adjusts accordingly.
SECTION 4 RENT
4.1 Annual Rent.
(a) Until adjusted as set forth below, Tenant shall pay to State an annual rent of
Seven Hundred Seven and 00 /100 ($707.00).
(b) The annual rent, as it currently exists or as adjusted or modified (the "Annual
Rent is due and payable in full on or before the Commencement Date and on or
before the same date of each year thereafter. Any payment not paid by State's
close of business on the date due is past due.
4.2 Payment Place. Tenant shall make payment to Financial Management Division, 1111
Washington St SE, PO Box 47041, Olympia, WA 98504 -7041.
4.3 Adjustment Based on Use. Annual Rent is based on Tenant's Permitted Use of the
Property, as described in Section 2 above. If Tenant's Permitted Use changes, the Annual Rent
shall be adjusted as appropriate for the changed use.
4.4 Rent Adjustment Procedures.
(a) Notice of Rent Adjustment. State shall provide notice of adjustments to the
Annual Rent allowed under Paragraphs 4.5(b) to Tenant in writing no later than
ninety (90) days after the anniversary date of the Lease.
(b) Procedures on Failure to make Timely Adjustment. If the State fails to provide
the notice required in Paragraph 4.4(a), State shall not collect the adjustment
amount for the year in which State failed to provide notice. Upon providing
notice of adjustment, State may adjust and prospectively bill Annual Rent as if
missed or waived adjustments had been implemented at the proper interval. This
includes the implementation of any inflation adjustment.
Aquatic Lands Lease
Page 5 of 31 Lease No. 20- 085091
4.5 Rent Adjustments for Nonwater- Dependent Uses.
(a) Inflation Adjustment. Except in those years in which State revalues the rent under
Paragraph 4.5(b) below, State shall adjust nonwater- dependent rent annually on
the Commencement Date. Adjustment is based on the percentage rate of change
in the previous calendar year's Consumer Price Index published by the Bureau of
Labor Statistics of the United States Department of Commerce, for the Seattle
Tacoma- Bremerton CMSA, All Urban Consumers, all items 1982 -84 100. If
publication of the Consumer Price Index is discontinued, State shall use a reliable
governmental or other nonpartisan publication evaluating the information used in
determining the Consumer Price Index.
(b) Revaluation of Rent.
(1) At the end of the first four -year period of the Term, and at the end of each
subsequent four -year period, State shall revalue the nonwater- dependent
Annual Rent to reflect the then current fair market rent.
(2) If State and Tenant cannot reach agreement on the fair market rental value,
the Parties shall submit the valuation to a review board of appraisers. The
board must consist of three members, one selected by and at the cost of
Tenant; a second member selected by and at the cost of State; and a third
member selected by the other two members with the cost shared equally
by State and Tenant. The decision of the majority of the board binds the
Parties. Until the Parties agree to, or the review board establishes, the new
rent, Tenant shall pay rent in the same amount established for the
preceding year. If the board determines additional rent is required, Tenant
shall pay the additional rent within ten (10) days of the board's decision.
If the board determines a refund is required, State shall pay the refund
within ten (10) days of the board's decision.
SECTION 5 OTHER EXPENSES
5.1 Utilities. Tenant shall pay all fees charged for utilities required or needed by the
Permitted Use.
5.2 Taxes and Assessments. Tenant shall pay all taxes (including leasehold excise taxes),
assessments, and other governmental charges applicable or attributable to the Property, Tenant's
leasehold interest, the improvements, or Tenant's use and enjoyment of the Property.
5.3 Right to Contest. If in good faith, Tenant may contest any tax or assessment at its sole
cost and expense. At the request of State, Tenant shall furnish reasonable protection in the form
of a bond or other security, satisfactory to State, against loss or liability resulting from such
contest.
5.4 Proof of Payment. If required by State, Tenant shall furnish to State receipts or other
appropriate evidence establishing the payment of amounts this Lease requires Tenant to pay.
Aquatic Lands Lease Page 6 of 31 Lease No. 20- 085091
5.5 Failure to Pay. If Tenant fails to pay amounts due under this Lease, State may pay the
amount due, and recover its cost in accordance with Section 6.
SECTION 6 LATE PAYMENTS AND OTHER CHARGES
6.1 Failure to Pay Rent. Failure to pay rent is a default by the Tenant. State may seek
remedies under Section 14 as well as late charges and interest as provided in this Section 6.
6.2 Late Charge. If State does not receive full rent payment within ten (10) days of the date
due, Tenant shall pay to State a late charge equal to four percent (4 of the unpaid amount or
Fifty Dollars ($50), whichever is greater, to defray the overhead expenses of State incident to the
delay.
6.3 Interest Penalty for Past Due Rent and Other Sums Owed.
(a) Tenant shall pay interest on the past due rent at the rate of one percent (1 per
month until paid, in addition to paying the late charges determined under
Paragraph 6.2. Rent not paid by the close of business on the due date will begin
accruing interest the day after the due date.
(b) If State pays or advances any amounts for or on behalf of Tenant, Tenant shall
reimburse State for the amount paid or advanced and shall pay interest on that
amount at the rate of one percent (1 per month from the date State notifies
Tenant of the payment or advance. This includes, but is not limited to, State's
payment of taxes of any kind, assessments, insurance premiums, costs of removal
and disposal of materials or Improvements under any provision of this Lease, or
other amounts not paid when due.
6.4 Referral to Collection Agency and Collection Agency Fees. If State does not receive
full payment within thirty (30) days of the due date, State may refer the unpaid amount to a
collection agency as provided by RCW 19.16.500 or other applicable law. Upon referral, Tenant
shall pay collection agency fees in addition to the unpaid amount.
6.5 No Accord and Satisfaction. If Tenant pays, or State otherwise receives, an amount less
than the full amount then due, State may apply such payment as it elects. State may accept
payment in any amount without prejudice to State's right to recover the balance of the rent or
pursue any other right or remedy. No endorsement or statement on any check, any payment, or
any letter accompanying any check or payment constitutes accord and satisfaction.
6.6 No Counterclaim, Setoff, or Abatement of Rent. Except as expressly set forth
elsewhere in this Lease, Tenant shall pay rent and all other sums payable by Tenant without the
requirement that State provide prior notice or demand. Tenant's payment is not subject to
counterclaim, setoff, deduction, defense or abatement.
Aquatic Lands Lease Page 7 of 31 Lease No. 20- 085091
SECTION 7 IMPROVEMENTS
7.1 Improvements Defined.
(a) "Improvements," consistent with RCW 79.105 through 79.145, are additions
within, upon, or attached to the land. This includes, but is not limited to, fill,
structures, bulkheads, docks, pilings, and other fixtures.
(b) "Personal Property" means items that can be removed from the Property without
(1) injury to the Property or Improvements or (2) diminishing the value or utility
of the Property or Improvements.
(c) "State -Owned Improvements" are Improvements made or owned by State. State
Owned Improvements includes any construction, alteration, or addition to State
Owned Improvements made by Tenant.
(d) "Tenant -Owned Improvements" are Improvements authorized by State and (1)
made by Tenant or (2) acquired by Tenant from the prior tenant.
(e) "Unauthorized Improvements" are Improvements made on the Property without
State's prior consent or Improvements made by Tenant that do not conform to
plans submitted to and approved by the State.
7.2 Existing Improvements. On the Commencement Date, the following Improvements are
located on the Property: a single storage building which does not completlely sit on State Land.
The Improvements are Tenant- Owned.
7.3 Construction, Major Repair, Modification, and Demolition.
(a) This Paragraph 7.3 governs construction, alteration, replacement, major repair,
modification, demolition, and deconstruction of Improvements "Work Section
11 governs routine maintenance and minor repair.
(b) All Work must conform to requirements under Paragraph 7.4. Paragraph 11.3,
which applies to routine maintenance and minor repair, also applies to all Work
under this Paragraph 7.3.
(c) Except in an emergency, Tenant shall not conduct Work, without State's prior
written consent, as follows:
(1) State may deny consent if State determines that denial is in the best
interests of the State or if proposed Work does not comply with Paragraph
7.4 and 11.3. State may impose additional conditions reasonably intended
to protect and preserve the Property. If Work is for removal of
Improvements at End of Term, State may waive removal of some or all
Improvements.
(2) Except in an emergency, Tenant shall submit to State plans and
specifications describing the proposed Work at least sixty (60) days before
submitting permit applications to regulatory authorities unless Tenant and
State otherwise agree to coordinate permit applications. At a minimum, or
if no permits are necessary, Tenant shall submit plans and specifications at
least ninety (90) days before commencement of Work.
(3) State waives the requirement for consent if State does not notify Tenant of
its grant or denial of consent within sixty (60) days of submittal.
Aquatic Lands Lease
Page 8 of 31 Lease No. 20- 085091
(d) Tenant shall notify State of emergency Work within five (5) business days of the
start of such Work. Upon State's request, Tenant shall provide State with plans
and specifications or as- builts of emergency Work.
(e) Tenant shall not commence or authorize Work until Tenant has:
(1) Obtained a performance and payment bond in an amount equal to one
hundred twenty -five percent (125 of the estimated cost of construction.
Tenant shall maintain the performance and payment bond until Tenant
pays in full the costs of the Work, including all laborers and material
persons.
(2) Obtained all required permits.
(f) Before completing Work, Tenant shall remove all debris and restore the Property,
to an orderly and safe condition. If Work is intended for removal of
Improvements at End of Term, Tenant shall restore the Property in accordance
with Paragraph 3.3, End of Term.
(g) Upon completing work, Tenant shall promptly provide State with as -built plans
and specifications.
(h) State shall not charge rent for authorized Improvements installed by Tenant
during this Term of this Lease, but State may charge rent for such Improvements
when and if Tenant or successor obtains a subsequent use authorization for the
Property and State has waived the requirement for Improvements to be removed
as provided in Paragraph 7.5.
7.4 Standards for Work.
(a) Applicability of Standards for Work
(1) The standards for Work in Paragraph 7.4(b) apply to Work commenced in
the five year period following the Commencement Date. Work has
commenced if State has approved plans and specifications.
(2) If Tenant undertakes Work five years or more after the Commencement
Date, Tenant shall comply with State's then current standards for Work.
(3) At Tenant's option, Tenant may ascertain State's current standards for
Work as follows:
(i) Before submitting plans and specifications for State's approval as
required by Paragraph 7.3 of the Lease, Tenant shall request State
to provide Tenant with then current standards for Work on State
owned Aquatic Lands.
(ii) Within thirty (30) days of receiving Tenant's request, State shall
provide Tenant with current standards for Work, which will be
effective for the purpose of State's approval of Tenant's proposed
Work provided Tenant submits plans and specifications for State's
approval within two (2) years of Tenant's request for standards.
(iii) If State does not timely provide current standards upon Tenant's
request, the standards under Paragraph 7.4(b) apply to Tenant's
Work provided Tenant submits plans and specifications as required
by Paragraph 7.3 within two (2) years of Tenant's request for
standards.
Aquatic Lands Lease Page 9 of 31 Lease No. 20- 085091
(iv) If Tenant fails to (1) make a request for current standards or (2)
timely submit plans and specifications to State after receiving
current standards, Tenant shall make changes in plans or Work
necessary to conform to current standards for Work upon State's
demand.
(b) Standards for Work
(1) Tenant shall not install skirting on any overwater structure.
(2) Tenant shall not conduct in -water Work during the following time periods:
Work Prohibited 1 Species
March 15 June
14 Salmonids
1
Aquatic Lands Lease
If the Washington Department of Fish and Wildlife or other regulatory
agency establishes different standards, Tenant shall meet the most
protective standard. Tenant shall not conduct in -water Work during time
periods prohibited for such work under WAC 220 110 -271, Prohibited
Work Times in Saltwater, as amended, or as otherwise directed by the
Washington State Department of Fish and Wildlife (WDFW).
(3) Tenant shall site new or expanded Improvements to avoid impacts to
native sea grasses and canopy forming kelps using the methods described
in Washington DNR Technical Memorandum, Aquatic Vegetation:
Potential Impacts of Covered Activities and Buffer Recommenations.
(4) Tenant shall orient navigation channels and entrances to facilities to avoid
dredging.
7.5 Tenant -Owned Improvements at End of Lease.
(a) Disposition
(1) Tenant shall remove Tenant -Owned Improvements in accordance with
Paragraph 7.3 upon the expiration, termination, or cancellation of the
Lease unless State waives the requirement for removal.
(2) Tenant -Owned Improvements remaining on the Property on the
expiration, termination or cancellation date shall become State -Owned
Improvements without payment by State, unless State elects otherwise.
State may refuse or waive ownership. If RCW 79.125.300 or 79.130.040
apply at the time this Lease expires, Tenant could be entitled to payment
by the new tenant for Tenant -Owned Improvements.
(3) If Tenant -Owned Improvements remain on the Property after the
expiration, termination, or cancellation date without State's consent, State
may remove all Improvements and Tenant shall pay State's costs.
(b) Conditions Under Which State May Waive Removal of Tenant -Owned
Improvements.
(1) State may waive removal of some or all Tenant -Owned Improvements
whenever State determines that it is in the best interests of the State and
regardless of whether Tenant re- leases the Property.
Page 10 of 31 Lease No. 20- 085091
(2) If Tenant re- leases the Property, State may waive requirement remove
Tenant -Owned Improvements. State also may consent to Tenant's
continued ownership of Tenant -Owned Improvements.
(3) If Tenant does not re -lease the Property, State may waive requirement to
remove Tenant -Owned Improvements upon consideration of a timely
request from Tenant, as follows:
(i) Tenant must notify State at least one (1) year before the
Termination Date of its request to leave Tenant -Owned
Improvements.
(ii) State, within ninety (90) days of receiving Tenant's notification,
will notify Tenant whether State consents to some or all Tenant
Owned Improvements remaining. State has no obligation to grant
consent.
(iii) State's failure to respond to Tenant's request to leave
Improvements within ninety (90) days is a denial of the request.
(c) Tenant's Obligations if State Waives Removal.
(1) Tenant shall not remove Improvements if State waives the requirement for
removal of some or all Tenant -Owned Improvements.
(2) Tenant shall maintain such Improvements in accordance with this Lease
until the expiration, termination, or cancellation date. Tenant is liable to
State for cost of repair if Tenant causes or allows damage to
Improvements State has designated to remain.
7.6 Disposition of Unauthorized Improvements.
(a) Unauthorized Improvements belong to State, unless State elects otherwise.
(b) State may either:
(1) Consent to Tenant ownership of the Improvements, or
(2) Charge rent for use of the Improvements from the time of installation or
construction and
(i) Require Tenant to remove the Improvements in accordance with
Paragraph 7.3, in which case Tenant shall pay rent for the
Improvements until removal,
(ii) Consent to Improvements remaining and Tenant shall pay rent for
the use of the Improvements, or
(iii) Remove Improvements and Tenant shall pay for the cost of
removal and disposal, in which case Tenant shall pay rent for use
of the Improvements until removal and disposal.
7.7 Disposition of Personal Property.
(a) Tenant retains ownership of Personal Property unless Tenant and State agree
otherwise in writing.
(b) Tenant shall remove Personal Property from the Property by the Termination
Date. Tenant is liable for damage to the Property and Improvements resulting
from removal of Personal Property.
(c) State may sell or dispose of all Personal Property left on the Property after the
Termination Date.
Aquatic Lands Lease Page 11 of 31 Lease No. 20- 085091
8.2 General Conditions.
(a) Tenant's obligations under this Section 8 extend to the area in, on, under, or
above
(1) The Property and
(2) Adjacent state -owned aquatic lands if affected by a release of Hazardous
Substances that occurs as a result of the Permitted Use.
(b) Standard of Care.
(1) Tenant shall exercise the utmost care with respect to Hazardous
Substances.
(2) Tenant shall exercise utmost care for the foreseeable acts or omissions of
third parties with respect to Hazardous Substances, and the foreseeable
consequences of those acts or omissions, to the extent required to establish
a viable, third -party defense under the law.
8.1 Definitions.
(a) "Hazardous Substance" means any substance that now or in the future becomes
regulated or defined under any federal, state, or local statute, ordinance, rule,
regulation, or other law relating to human health, environmental protection,
contamination, pollution, or cleanup.
(b) "Release or threatened release of Hazardous Substance" means a release or
threatened release as defined under any law described in Paragraph 8.1(a).
(c) "Utmost care" means such a degree of care as would be exercised by a very
careful, prudent, and competent person under the same or similar circumstances;
the standard of care applicable under the Washington State Model Toxics Control
Act "MTCA Chapter 70.105 RCW, as amended.
(d) "Tenant and affiliates" when used in this Section 8 means Tenant or Tenant's
subtenants, contractors, agents, employees, guests, invitees, licensees, affiliates,
or any person on the Property with the Tenant's permission.
(e) "Liabilities" as used in this Section 8 means any claims, demands, proceedings,
lawsuits, damages, costs, expenses, fees (including attorneys' fees and
disbursements), penalties, or judgments.
8.3 Current Conditions and Duty to Investigate.
(a) State makes no representation about the condition of the Property. Hazardous
Substances may exist in, on, under, or above the Property.
(b) This Lease does not impose a duty on State to conduct investigations or supply
information to Tenant about Hazardous Substances.
Aquatic Lands Lease
(1) If State conducts a sale of Personal Property, State shall apply proceeds
first to the State's administrative costs in conducting the sale, second to
payment of amount that then may be due from the Tenant to the State.
State shall pay the remainder, if any, to the Tenant.
(2) If State disposes of Personal Property, Tenant shall pay for the cost of
removal and disposal.
SECTION 8 ENVIRONMENTAL LIABILITY/RISK ALLOCATION
Page 12 of 31 Lease No. 20- 085091
(c) Tenant is responsible for conducting all appropriate inquiry and gathering
sufficient information about the existence, scope, and location of Hazardous
Substances on or near the Property necessary for Tenant to meet Tenant's
obligations under this Lease and utilize the Property for the Permitted Use.
8.4 Use of Hazardous Substances.
(a) Tenant and affiliates shall not use, store, generate, process, transport, handle,
release, or dispose of Hazardous Substances, except in accordance with all
applicable laws.
(b) Tenant shall not undertake, or allow others to undertake by Tenant's permission,
acquiescence, or failure to act, activities that result in a release or threatened
release of Hazardous Substances.
(c) If use of Hazardous Substances related to Tenant's use or occupancy of the
Property results in violation of law:
(1) Tenant shall submit to State any plans for remedying the violations, and
(2) Tenant shall implement any remedial measures to restore the Property or
natural resources that State may require in addition to remedial measures
required by regulatory authorities.
(d) At a minimum, Tenant and affiliates shall observe the following Hazardous
Substances operational standards. If the Washington Department of Ecology, U.S.
Environmental Protection Agency or other regulatory agency establishes different
standards applicable to Tenant's activities under the Permitted Use, Tenant shall
meet the standard that provides greater protection to the environment.
(1) Tenant shall not allow work on overwater structures or vessels without
protective measures to prevent discharge of toxins to the water, including:
(i) Tenant shall not cause or allow underwater hull scraping and other
underwater removal of paints.
(ii) Tenant shall not cause or allow underwater refinishing work from
boats or temporary floats unless permitted by an industrial
National Pollution Discharge Elimination System (NPDES)
permit.
(iii) Tenant shall not cause or allow above the waterline boat repairs or
refinishing in -water except if limited to decks and superstructures
and less than 25 percent of a boat is repaired or refinished in -water
per year.
(iv) Tenant shall use and require others to use tarps and other dust, drip
and spill containment measures when repairing or refinishing boats
in water.
(2) Tenant shall not store or allow others to store fuel tanks, petroleum
products, hydraulic fluid, machinery coolants, lubricants and chemicals
not in use in locations above the water surface.
(3) Tenant shall inspect all equipment using petroleum products, hydraulic
fluids, machinery coolants, chemicals, or other toxic or deleterious
materials on a monthly basis and immediately make all repairs necessary
to stop leakage. Tenant shall submit to State an annual report
documenting inspections and repair.
Aquatic Lands Lease Page 13 of 31 Lease No. 20- 085091
(4)
(5)
Tenant shall maintain a supply of oil spill containment materials adequate
to contain a spill from the largest vessel in use on the Property.
Tenant shall not use or allow use of a pressure washer at any location
above the water surface to clean any item that uses petroleum products.
8.5 Management of Contamination, if any.
(a) Tenant and affiliates shall not undertake activities that:
(1) Damage or interfere with the operation of remedial or restoration
activities, if any;
(2) Result in human or environmental exposure to contaminated sediments, if
any;
(3) Result in the mechanical or chemical disturbance of on -site habitat
mitigation, if any.
(b) If requested, Tenant shall allow reasonable access to:
(1) Employees and authorized agents of the Environmental Protection
Agency, the Washington State Department of Ecology, health department,
or other similar environmental agencies; and
(2) Potentially liable or responsible parties who are the subject of an order or
consent decree that requires access to the Property. Tenant may negotiate
an access agreement with such parties, but Tenant may not unreasonably
withhold such agreement.
8.6 Notification and Reporting.
(a) Tenant shall immediately notify State if Tenant becomes aware of any of the
following:
(1) A release or threatened release of Hazardous Substances;
(2) Any new discovery of or new information about a problem or liability
related to, or derived from, the presence of Hazardous Substances;
(3) Any lien or action arising from Hazardous Substances;
(4) Any actual or alleged violation of any federal, state, or local statute,
ordinance, rule, regulation, or other law pertaining to Hazardous
Substances;
(5) Any notification from the US Environmental Protection Agency (EPA) or
the Washington State Department of Ecology (DOE) that remediation or
removal of Hazardous Substances is or may be required at the Property.
(b) Tenant's duty to report under Paragraph 8.6(a) extends to lands described in
Paragraph 8.2(a) and to any other property used by Tenant in conjunction with the
Property if a release of Hazardous Substances on the other property could affect
the Property.
(c) Tenant shall provide State with copies of all documents Tenant submits to any
federal, state or local authorities concerning environmental impacts or proposals
relative to the Property. Documents subject to this requirement include, but are
not limited to, applications, reports, studies, or audits for National Pollution
Discharge and Elimination System Permits; Army Corps of Engineers permits;
State Hydraulic Project Approvals (HPA); State Water Quality certification;
Aquatic Lands Lease
Page 14 of 31 Lease No. 20- 085091
Aquatic Lands Lease
Substantial Development permit; and any reporting necessary for the existence,
location, and storage of Hazardous Substances on the Property.
8.7 Indemnification.
(a) Tenant shall fully indemnify, defend, and hold State harmless from and against
Liabilities that arise out of, or relate to:
(1) The use, storage, generation, processing, transportation, handling, or
disposal of any Hazardous Substance by Tenant and affiliates occurring
whenever Tenant occupies or has occupied the Property;
(2) The release or threatened release of any Hazardous Substance resulting
from any act or omission of Tenant and affiliates occurring whenever
Tenant occupies or has occupied the Property.
(b) Tenant shall fully indemnify, defend, and hold State harmless for Liabilities that
arise out of or relate to Tenant's breach of obligations under Paragraph 8.5.
8.8 Reservation of Rights.
(a) For Liabilities not covered by the indemnification provisions of Paragraph 8.7, the
Parties expressly reserve and do not waive any rights, claims, immunities, causes
of action, or defenses relating to Hazardous Substances that either Party may have
against the other under law.
(b) The Parties expressly reserve all rights, claims, immunities, and defenses either
Party may have against third parties. Nothing in this Section 8 benefits or creates
rights for third parties.
(c) The allocations of risks, Liabilities, and responsibilities set forth in this Section 8
do not release either Party from or affect the liability of either Party for
Hazardous Substances claims or actions by regulatory agencies.
8.9 Cleanup.
(a) If Tenant's act, omission, or breach of obligation under Paragraph 8.4 results in a
release of Hazardous Substances that exceeds the threshold limits of any
applicable regulatory standard, Tenant shall, at Tenant's sole expense, promptly
take all actions necessary or advisable to clean up the Hazardous Substances in
accordance with applicable law.
(b) Tenant may undertake a cleanup of the Property pursuant to the Washington State
Department of Ecology's Voluntary Cleanup Program, provided that Tenant
cooperates with the Department of Natural Resources in development of cleanup
plans. Tenant shall not proceed with Voluntary Cleanup without the Department
of Natural Resources approval of final plans. Nothing in the operation of this
provision is an agreement by the Department of Natural Resources that the
Voluntary Cleanup complies with any laws or with the provisions of this Lease.
Tenant's completion of a Voluntary Cleanup is not a release from or waiver of
any obligation for Hazardous Substances under this Lease.
8.10 Sampling by State, Reimbursement, and Split Samples.
Page 15 of 31 Lease No. 20- 085091
(a) State may enter the Property and conduct sampling, tests, audits, surveys, or
investigations "Tests of the Property at any time to determine the existence,
scope, or effects of Hazardous Substances.
(b) If such Tests, along with any other information, demonstrate a breach of Tenant's
obligations regarding Hazardous Substances under this Lease, Tenant shall
promptly reimburse State for all costs associated with the Tests, provided State
gave Tenant thirty (30) calendar days advance notice in nonemergencies and
reasonably practical notice in emergencies.
(c) In nonemergencies, Tenant is entitled to obtain split samples of Test samples,
provided Tenant gives State written notice requesting split samples at least ten
(10) calendar days before State conducts Tests. Upon demand, Tenant shall
promptly reimburse State for additional cost, if any, of split samples.
(d) If either Party conducts Tests on the Property, the conducting Party shall provide
the other with validated final data and quality assurance /quality control /chain of
custody information about the Tests within sixty (60) calendar days of a written
request by the other party, unless Tests are part of a submittal under Paragraph
8.6(c) in which case Tenant shall submit data and information to State without
written request by State. Neither party is obligated to provide any analytical
summaries or the work product of experts.
SECTION 9 ASSIGNMENT AND SUBLETTING
9.1 State Consent Required. Tenant shall not convey, transfer, or encumber any part of
Tenant's interest in this Lease or the Property without State's prior written consent, which State
shall not unreasonably condition or withhold.
(a) In determining whether to consent, State may consider, among other items, the
proposed transferee's financial condition, business reputation and experience, the
nature of the proposed transferee's business, the then current value of the
Property, and such other factors as may reasonably bear upon the suitability of the
transferee as a tenant of the Property. Tenant shall submit information regarding
any proposed transferee to State at least thirty (30) days prior to the date of the
proposed transfer.
(b) State reserves the right to condition its consent upon:
(1) changes in the terms and conditions of this Lease, including, but not
limited to, the Annual Rent; and/or
(2) the agreement of Tenant or transferee to conduct Tests for Hazardous
Substances on the Property or on other property owned or occupied by
Tenant or the transferee.
(c) Each permitted transferee shall assume all obligations under this Lease, including
the payment of rent. No assignment, sublet, or transfer shall release, discharge, or
otherwise affect the liability of Tenant.
(d) State's consent under this Paragraph 9.1 does not constitute a waiver of any
claims against Tenant for the violation of any term of this Lease.
Aquatic Lands Lease
Page 16 of 31 Lease No. 20- 085091
9.2 Rent Payments Following Assignment. The acceptance by State of the payment of rent
following an assignment or other transfer does not constitute consent to any assignment or
transfer.
9.3 Terms of Subleases.
(a) Tenant shall submit the terms of all subleases to State for approval.
(b) Tenant shall incorporate the following requirements in all subleases:
(1) The sublease must be consistent with and subject to all the terms and
conditions of this Lease;
(2) The sublease must provide that this Lease controls if the terms of the
sublease conflict with the terms of this Lease;
(3) The term of the sublease (including any period of time covered by a
renewal option) must end before the Termination Date of the initial Term
or any renewal term;
(4) The sublease must terminate if this Lease terminates for any reason;
(5) The subtenant must receive and acknowledge receipt of a copy of this
Lease;
(6) The sublease must prohibit the prepayment to Tenant by the subtenant of
more than the annual rent;
(7) The sublease must identify the rental amount subtenant is to pay to
Tenant;
(8) The sublease must provide that there is no privity of contract between the
subtenant and State;
(9) The sublease must require removal of the subtenant's Improvements and
Personal Property upon termination of the sublease;
(10) The subtenant's permitted use must be within the scope of the Permitted
Use; and
(11) The sublease must require the subtenant to meet all obligations of Tenant
under Section 10, Indemnification, Financial Security, and Insurance.
9.4 Short -Term Subleases of Moorage Slips. Short-term subleasing of moorage slips for a
term of less than one year does not require State's written consent or approval pursuant to
Paragraphs 9.1 or 9.3. Tenant shall conform moorage sublease agreements to the sublease
requirements in Paragraph 9.3.
SECTION 10 INDEMNITY, FINANCIAL SECURITY, INSURANCE
10.1 Indemnity.
(a) Tenant shall indemnify, defend, and hold State, its employees, officers, and agents
harmless from Claims arising out of the use, occupation, or control of the
Property by Tenant, its subtenants, contractors, agents, invitees, guests,
employees, affiliates, licensees, or permittees.
(b) "Claim" as used in this Paragraph 10.1 means any financial loss, claim, suit,
action, damages, expenses, fees (including attorneys' fees), penalties, or
judgments attributable to bodily injury, sickness, disease, death, and damages to
Aquatic Lands Lease Page 17 of 31 Lease No. 20- 085091
tangible property, including, but not limited to, land, aquatic life, and other
natural resources. "Damages to tangible property" includes, but is not limited to,
physical injury to the Property and damages resulting from loss of use of the
Property.
(c) State shall not require Tenant to indemnify, defend, and hold State harmless for
claims that arise solely out of the willful or negligent act of State or State's
elected officials, employees, or agents.
(d) Tenant waives its immunity under Title 51 RCW to the extent it is required to
indemnify, defend, and hold State and its agencies, officials, agents, or employees
harmless.
(e) Section 8, Environmental Liability/Risk Allocation, exclusively shall govern
Tenant's liability to State for Hazardous Substances and its obligation to
indemnify, defend, and hold State harmless for Hazardous Substances.
10.2 Insurance Terms.
(a) Insurance Required.
(1) Alternative for Self Insured. Tenant certifies that it is self insured for all
the liability exposures, its self insurance plan satisfies all State
requirements, and its self insurance plan provides coverage equal to that
required in this Paragraph 10.2 and by Paragraph 10.3, Insurance Types
and Limits. Tenant shall provide to State evidence of its status as a self
insured entity. Upon request by State, Tenant shall provide a written
description of its financial condition and/or the self insured funding
mechanism. Tenant shall provide State with at least thirty (30) days'
written notice prior to any material changes to Tenant's self insured
funding mechanism.
(2) Unless State agrees to an exception, Tenant shall provide insurance issued
by an insurance company or companies admitted to do business in the
State of Washington and have a rating of A- or better by the most recently
published edition of Best's Reports. Tenant may submit a request to the
risk manager for the Department of Natural Resources to approve an
exception to this requirement. If an insurer is not admitted, the insurance
policies and procedures for issuing the insurance policies shall comply
with Chapter 48.15 RCW and 284 -15 WAC.
(3) All general liability, excess, umbrella, property, builder's risk, and
pollution legal liability insurance policies must name the State of
Washington, the Department of Natural Resources, its elected and
appointed officials, agents, and employees as an additional insured.
(4) All insurance provided in compliance with this Lease must be primary as
to any other insurance or self insurance programs afforded to or
maintained by State.
(b) Waiver.
(1) Tenant waives all rights against State for recovery of damages to the
extent insurance maintained pursuant to this Lease covers these damages.
Aquatic Lands Lease
Page 18 of 31 Lease No. 20- 085091
(2) Except as prohibited by law, Tenant waives all rights of subrogation
against State for recovery of damages to the extent that they are covered
by insurance maintained pursuant to this lease.
(c) Proof of Insurance.
(1) Tenant shall provide State with a certificate(s) of insurance executed by a
duly authorized representative of each insurer, showing compliance with
insurance requirements specified in this Lease and, if requested, copies of
policies to State.
(2) The certificate(s) of insurance must reference additional insureds and the
Lease number.
(3) Receipt of such certificates or policies by State does not constitute
approval by State of the terms of such policies.
(d) State must receive written notice before cancellation or non renewal of any
insurance required by this Lease, as follows:
(1) Insurers subject to RCW 48.18 (admitted and regulated by the Insurance
Commissioner): If cancellation is due to non payment of premium,
provide State ten (10) days' advance notice of cancellation; otherwise,
provide State forty -five (45) days' advance notice of cancellation or non
renewal.
(2) Insurers subject to RCW 48.15 (surplus lines): If cancellation is due to
non payment of premium, provide State ten (10) days' advance notice of
cancellation; otherwise, provide State thirty (30) days' advance notice of
cancellation or non renewal.
(e) Adjustments in Insurance Coverage.
(1) State may impose changes in the limits of liability for all types of
insurance as State deems necessary.
(2) Tenant shall secure new or modified insurance coverage within thirty (30)
days after State requires changes in the limits of liability.
(f) If Tenant fails to procure and maintain the insurance described above within
fifteen (15) days after Tenant receives a notice to comply from State, State may
either:
(1) Deem the failure an Event of Default under Section 14, or
(2) Procure and maintain comparable substitute insurance and pay the
premiums. Upon demand, Tenant shall pay to State the full amount paid
by State, together with interest at the rate provided in Paragraph 6.2 from
the date of State's notice of the expenditure until Tenant's repayment.
(g) General Terms.
(1) State does not represent that coverage and limits required under this Lease
are adequate to protect Tenant.
(2) Coverage and limits do not limit Tenant's liability for indemnification and
reimbursements granted to State under this Lease.
(3) The Parties shall use any insurance proceeds payable by reason of damage
or destruction to property first to restore the real property covered by this
Lease, then to pay the cost of the reconstruction, then to pay the State any
sums in arrears, and then to Tenant.
Aquatic Lands Lease
Page 19 of 31 Lease No. 20- 085091
10.3 Insurance Types and Limits.
(a) General Liability Insurance.
(1) Tenant shall maintain commercial general liability insurance (CGL) or
marine general liability (MGL) covering claims for bodily injury, personal
injury, or property damage arising on the Property and/or arising out of
Tenant's use, occupation, or control of the Property and, if necessary,
commercial umbrella insurance with a limit of not less than One Million
Dollars ($1,000,000) per each occurrence. If such CGL or MGL insurance
contains aggregate limits, the general aggregate limit must be at least
twice the "each occurrence" limit. CGL or MGL insurance must have
products completed operations aggregate limit of at least two times the
"each occurrence" limit.
(2) CGL insurance must be written on Insurance Services Office (ISO)
Occurrence Form CG 00 01 (or a substitute form providing equivalent
coverage). All insurance must cover liability arising out of premises,
operations, independent contractors, products completed operations,
personal injury and advertising injury, and liability assumed under an
insured contract (including the tort liability of another party assumed in a
business contract) and contain separation of insured (cross liability)
condition.
(3) MGL insurance must have no exclusions for non -owned watercraft.
(b) Workers' Compensation.
(1) State of Washington Workers' Compensation.
(i) Tenant shall comply with all State of Washington workers'
compensation statutes and regulations. Tenant shall provide
workers' compensation coverage for all employees of Tenant.
Coverage must include bodily injury (including death) by accident
or disease, which arises out of or in connection with Tenant's use,
occupation, and control of the Property.
(ii) If Tenant fails to comply with all State of Washington workers'
compensation statutes and regulations and State incurs fines or is
required by law to provide benefits to or obtain coverage for such
employees, Tenant shall indemnify State. Indemnity shall include
all fines; payment of benefits to Tenant, employees, or their heirs
or legal representatives; and the cost of effecting coverage on
behalf of such employees.
(2) Longshore and Harbor Workers' and Jones Acts. Longshore and Harbor
Workers' Act (33 U.S.C. Section 901 et seq.) and/or the Jones Act (46
U.S.C. Section 688) may require Tenant to provide insurance coverage in
some circumstances. Tenant shall ascertain if such insurance is required
and, if required, shall maintain insurance in compliance with law. Tenant
is responsible for all civil and criminal liability arising from failure to
maintain such coverage.
(c) Employers' Liability Insurance. Tenant shall procure employers' liability
insurance, and, if necessary, commercial umbrella liability insurance with limits
not less than One Million Dollars ($1,000,000) each accident for bodily injury by
Aquatic Lands Lease Page 20 of 31 Lease No. 20- 085091
accident or One Million Dollars ($1,000,000) each employee for bodily injury by
disease.
(d) Property Insurance.
(1) Tenant shall buy and maintain property insurance covering all real
property and fixtures, equipment, tenant improvements and betterments
(regardless of whether owned by Tenant or State). Such insurance must
be written on an all risks basis and, at minimum, cover the perils insured
under ISO Special Causes of Loss Form CP 10 30, and cover the full
replacement cost of the property insured. Such insurance may have
commercially reasonable deductibles. Any coinsurance requirement in the
policy must be waived. The policy must include State as an insured and a
loss payee.
(2) Tenant shall buy and maintain boiler and machinery insurance required by
contract documents or by law, covering all real property and fixtures,
equipment, tenant improvements and betterments (regardless of whether
owned by Tenant or State) from loss or damage caused by the explosion of
boilers, fired or unfired vessels, electric or steam generators, or pipes.
(3) In the event of any loss, damage, or casualty which is covered by one or
more of the types of insurance described above, the Parties to this Lease
shall proceed cooperatively to settle the loss and collect the proceeds of
such insurance, which State shall hold in trust, including interest earned by
State on such proceeds, for use according to the terms of this Lease. The
Parties shall use insurance proceeds in accordance with
Paragraph 10.2(g)(3).
(4) When sufficient funds are available, using insurance proceeds described
above, the Parties shall continue with reasonable diligence to prepare
plans and specifications for, and thereafter carry out, all work necessary
to:
(i) Repair and restore damaged building(s) and /or Improvements to
their former condition, or
(ii) Replace and restore damaged building(s) and/or Improvements
with a new building(s) and /or Improvements on the Property of a
quality and usefulness at least equivalent to or more suitable than,
damaged building(s) and/or Improvements.
10.4 Financial Security.
(a) At its own expense, Tenant shall procure and maintain during the Term of this
Lease a corporate security bond or provide other financial security that State, at its
option, may approve "Security Tenant shall provide Security in an amount
equal to Zero Dollars ($0.00), which is consistent with RCW 79.105.330, and
secures Tenant's performance of its obligations under this Lease, with the
exception of the obligations under Section 8, Environmental Liability /Risk
Allocation. Tenant's failure to maintain the Security in the required amount
during the Term constitutes a breach of this Lease.
(b) All Security must be in a form acceptable to the State.
Aquatic Lands Lease
Page 21 of 31 Lease No. 20- 085091
(1) Bonds must be issued by companies admitted to do business within the
State of Washington and have a rating of A Class VII or better, in the
most recently published edition of Best's Reports, unless State approves
an exception. Tenant may submit a request to the risk manager for the
Department of Natural Resources for an exception to this requirement.
(2) Letters of credit, if approved by State, must be irrevocable, allow State to
draw funds at will, provide for automatic renewal, and comply with
RCW 62A.5 -101, et. seq.
(3) Savings account assignments, if approved by State, must allow State to
draw funds at will.
(c) Adjustment in Amount of Security.
(1) State may require an adjustment in the Security amount:
(i) At the same time as revaluation of the Annual Rent,
(ii) As a condition of approval of assignment or sublease of this Lease,
(iii) Upon a material change in the condition or disposition of any
Improvements, or
(iv) Upon a change in the Permitted Use.
(2) Tenant shall deliver a new or modified form of Security to State within
thirty (30) days after State has required adjustment of the amount of the
Security.
(d) Upon any default by Tenant in its obligations under this Lease, State may collect
on the Security to offset the liability of Tenant to State. Collection on the
Security does not (1) relieve Tenant of liability, (2) limit any of State's other
remedies, (3) reinstate or cure the default or (4) prevent termination of the Lease
because of the default.
Aquatic Lands Lease
SECTION 11 ROUTINE MAINTENANCE AND REPAIR
11.1 State's Repairs. This Lease does not obligate State to make any alterations,
maintenance, replacements, or repairs in, on, or about the Property, or any part thereof, during
the Term.
11.2 Tenant's Repairs and Maintenance
(a) Routine maintenance and repair are acts intended to prevent a decline, lapse or,
cessation of the Permitted Use and associated Improvements. Routine
maintenance or repair is the type of work that does not require regulatory permits.
(b) At Tenant's own expense, Tenant shall keep and maintain the Property and all
Improvements in good order and repair and in a safe condition. State's consent is
not required for routine maintenance or repair.
(c) At Tenant's own expense, Tenant shall make any additions, repairs, alterations,
maintenance, replacements, or changes to the Property or to any Improvements on
the Property that any public authority may require. If a public authority requires
work beyond the scope of routine maintenance and repair, Tenant shall comply
with Section 7 of this Lease.
Page 22 of 31 Lease No. 20- 085091
11.3 Limitations. The following limitations apply whenever Tenant conducts maintenance,
repair or replacement.
(a) Tenant shall not use or install treated wood at any location above or below water,
except that Tenant may use treated wood for above water structural framing.
(b) Tenant shall not use or install tires (for example, floatation or fenders) at any
location above or below water.
(c) Tenant shall install only floatation material encapsulated in a shell resistant to
ultraviolet radiation and abrasion. The shell must be capable of preventing
breakup and loss of flotation material into the water.
(d) Tenant shall orient night lighting to minimize the amount of light shining directly
on the water.
SECTION 12 DAMAGE OR DESTRUCTION
12.1 Notice and Repair.
(a) In the event of damage to or destruction of the Property or Improvements, Tenant
shall promptly give written notice to State. State does not have actual knowledge
of the damage or destruction without Tenant's written notice.
(b) Unless otherwise agreed in writing, Tenant shall promptly reconstruct, repair, or
replace the Property and Improvements as nearly as possible to its condition
immediately prior to the damage or destruction in accordance with Paragraph 7.3,
Construction, Major Repair, Modification, and Demolition and Tenant's
additional obligations in Exhibit B, if any.
12.2 State's Waiver of Claim. State does not waive any claims for damage or destruction of
the Property unless State provides written notice to Tenant of each specific claim waived.
12.3 Insurance Proceeds. Tenant's duty to reconstruct, repair, or replace any damage or
destruction of the Property or any Improvements on the Property is not conditioned upon the
availability of any insurance proceeds to Tenant from which the cost of repairs may be paid. The
Parties shall use insurance proceeds in accordance with Paragraph 10.2(g)(3).
12.4 Rent in the Event of Damage or Destruction. Unless the Parties agree to terminate this
Lease, there is no abatement or reduction in rent during such reconstruction, repair, and
replacement.
12.5 Default at the Time of Damage or Destruction. If Tenant is in default under the terms
of this Lease at the time damage or destruction occurs, State may elect to terminate the Lease and
State then shall have the right to retain any insurance proceeds payable as a result of the damage
or destruction.
Aquatic Lands Lease
Page 23 of 31 Lease No. 20- 085091
SECTION 13 CONDEMNATION
13.1 Definitions.
(a) "Taking" means that an entity authorized by law exercises the power of eminent
domain, either by judgment, settlement in lieu of judgment, or voluntary
conveyance in lieu of formal court proceedings, over all or any portion of the
Property and Improvements. This includes any exercise of eminent domain on
any portion of the Property and Improvements that, in the judgment of the State,
prevents or renders impractical the Permitted Use.
(b) "Date of Taking" means the date upon which title to the Property or a portion of
the Property passes to and vests in the condemner or the effective date of any
order for possession if issued prior to the date title vests in the condemner.
13.2 Effect of Taking. If there is a taking, the Lease terminates proportionate to the extent of
the taking. If this Lease terminates in whole or in part, Tenant shall make all payments due and
attributable to the taken Property up to the date of taking. If Tenant has pre -paid rent and Tenant
is not in default of the Lease, State shall refund Tenant the pro rata share of the pre -paid rent
attributable to the period after the date of taking.
13.3 Allocation of Award.
(a) The Parties shall allocate the condemnation award based upon the ratio of the fair
market value of (1) Tenant's leasehold estate and Tenant -Owned Improvements
and (2) State's interest in the Property; the reversionary interest in Tenant -Owned
Improvements, if any; and State -Owned Improvements, if any.
(b) If Tenant and State are unable to agree on the allocation, the Parties shall submit
the dispute to binding arbitration in accordance with the rules of the American
Arbitration Association.
SECTION 14 DEFAULT AND REMEDIES
14.1 Default Defined. Tenant is in default of this Lease on the occurrence of any of the
following:
(a) Failure to pay rent or other expenses when due;
(b) Failure to comply with any law, regulation, policy, or order of any lawful
governmental authority;
(c) Failure to comply with any other provision of this Lease;
(d) Commencement of bankruptcy proceedings by or against Tenant or the
appointment of a trustee or receiver of Tenant's property.
14.2 Tenant's Right to Cure.
(a) A default becomes an "Event of Default" if Tenant fails to cure the default within
the applicable cure following State's written notice of default. Upon an Event of
Default, State may seek remedies under Paragraph 14.3.
(b) Unless expressly provided elsewhere in this Lease, the cure period is ten (10) days
for failure to pay rent or other monetary defaults.
Aquatic Lands Lease Page 24 of 31 Lease No. 20- 085091
(c) For nonmonetary defaults not capable of cure within sixty (60) days, State will
not unreasonably withhold approval of a reasonable alternative cure schedule.
Tenant must submit a cure schedule within thirty (30) days of a notice of default.
The default is not an Event of Default if State approves the schedule and Tenant
works diligently and in good faith to execute the cure. The default is an Event of
Default if Tenant fails to timely submit a schedule or fails to cure in accordance
with an approved schedule.
(d) State may elect to deem a default by Tenant as an Event of Default if the default
occurs within six (6) months after a default by Tenant for which State has
provided notice and opportunity to cure and regardless of whether the first and
subsequent defaults are of the same nature.
14.3 Remedies.
(a) Upon a Event of Default, State may terminate this Lease and remove Tenant by
summary proceedings or otherwise.
(b) If the Event of Default (1) arises from Tenant's failure to comply with restrictions
on Permitted Use and operations under Paragraph 2.2 or (2) results in damage to
natural resources or the Property, State may enter the Property without
terminating this Lease to (1) restore the natural resources or Property and charge
Tenant restoration costs and /or (2) charge Tenant for damages. On demand by
State, Tenant shall pay all costs and/or damages.
(c) Without terminating this Lease, State may relet the Property on any terms and
conditions as State may decide are appropriate.
(1) State shall apply rent received by reletting: (1) to the payment of any
indebtedness other than rent due from Tenant to State; (2) to the payment
of any cost of such reletting; (3) to the payment of the cost of any
alterations and repairs to the Property; and (4) to the payment of rent and
leasehold excise tax due and unpaid under this Lease. State shall hold and
apply any balance to Tenant's future rent as it becomes due.
(2) Tenant is responsible for any deficiency created by the reletting during
any month and shall pay the deficiency monthly.
(3) At any time after reletting, State may elect to terminate this Lease for the
previous Event of Default.
(d) State's reentry or repossession of the Property under Paragraph 14.3 is not an
election to terminate this Lease or cause a forfeiture of rents or other charges
Tenant is obligated to pay during the balance of the Term, unless (1) State gives
Tenant written notice of termination or (2) a legal proceeding decrees termination.
(e) The remedies specified under this Paragraph 14.3 are not exclusive of any other
remedies or means of redress to which the State is lawfully entitled for Tenant's
breach or threatened breach of any provision of this Lease.
SECTION 15 ENTRY BY STATE
State may enter the Property at any reasonable hour to inspect for compliance with the terms of
this Lease, to monitor impacts to habitat, or survey habitat and species. Tenant grants State
Aquatic Lands Lease Page 25 of 31 Lease No. 20- 085091
permission to cross Tenant's upland property to access the Property. State's failure to inspect the
Property does not constitute a waiver of any rights or remedies under this Lease.
SECTION 16 DISCLAIMER OF QUIET ENJOYMENT
16.1 No Guaranty or Warranty.
(a) State believes that this Lease is consistent with the Public Trust Doctrine and that
none of the third -party interests identified in Paragraph 1.1(b) will materially or
adversely affect Tenant's right of possession and use of the Property, but State
makes no guaranty or warranty to that effect.
(b) State disclaims and Tenant releases State from any claim for breach of any
implied covenant of quiet enjoyment. This disclaimer and release includes, but is
not limited to, interference arising from exercise of rights under the Public Trust
Doctrine; Treaty rights held by Indian Tribes; and the general power and authority
of State and the United States with respect to aquatic lands and navigable waters.
(c) Tenant is responsible for determining the extent of Tenant's right to possession
and for defending Tenant's leasehold interest.
16.2 Eviction by Third Party. If a third -party evicts Tenant, this Lease terminates as of the
date of the eviction. In the event of a partial eviction, Tenant's rent obligations abate as of the
date of the partial eviction, in direct proportion to the extent of the eviction; this Lease shall
remain in full force and effect in all other respects.
Tenant: CITY OF PORT ANGELES
321 East Fifth St
Port Angeles WA 98362
SECTION 17 NOTICE AND SUBMITTALS
Following are the locations for delivery of notice and submittals required or permitted under this
Lease. Any Party may change the place of delivery upon ten (10) days written notice to the
other.
State: DEPARTMENT OF NATURAL RESOURCES
Orca Straits
5310 Eaglemount Rd
Chimacum WA 98325
The Parties may deliver any notice in person, by facsimile machine, or by certified mail.
Depending on the method of delivery, notice is effective upon personal delivery, upon receipt of
a confirmation report if delivered by facsimile machine, or three (3) days after mailing. All
notices must identify the Lease number. On notices transmitted by facsimile machine, the
Parties shall state the number of pages contained in the notice, including the transmittal page, if
any.
Aquatic Lands Lease Page 26 of 31 Lease No. 20- 085091
18.1 Authority. Tenant and the person or persons executing this Lease on behalf of Tenant
represent that Tenant is qualified to do business in the State of Washington, that Tenant has full
right and authority to enter into this Lease, and that each and every person signing on behalf of
Tenant is authorized to do so. Upon State's request, Tenant shall provide evidence satisfactory
to State confirming these representations.
18.2 Successors and Assigns. This Lease binds and inures to the benefit of the Parties, their
successors, and assigns.
18.3 Headings. The headings used in this Lease are for convenience only and in no way
define, limit, or extend the scope of this Lease or the intent of any provision.
18.4 Entire Agreement. This Lease, including the exhibits and addenda, if any, contains the
entire agreement of the Parties. This Lease merges all prior and contemporaneous agreements,
promises, representations, and statements relating to this transaction or to the Property.
18.5 Waiver.
(a) The waiver of any breach or default of any term, covenant, or condition of this
Lease is not a waiver of such term, covenant, or condition; of any subsequent
breach or default of the same; or of any other term, covenant, or condition of this
Lease. State's acceptance of a rental payment is not a waiver of any preceding or
existing breach other than the failure to pay the particular rental payment that was
accepted.
(b) The renewal of the Lease, extension of the Lease, or the issuance of a new lease to
Tenant, does not waive State's ability to pursue any rights or remedies under the
Lease.
18.6 Cumulative Remedies. The rights and remedies under this Lease are cumulative and in
addition to all other rights and remedies afforded by law or equity or otherwise.
18.7 Time is of the Essence. TIME IS OF THE ESSENCE as to each and every provision of
this Lease.
18.8 Language. The word "Tenant" as used in this Lease applies to one or more persons and
regardless of gender, as the case may be. If there is more than one Tenant, their obligations are
joint and several. The word "persons," whenever used, shall include individuals, firms,
associations, and corporations. The word "Parties" means State and Tenant in the collective. The
word "Party" means either or both State and Tenant, depending on the context.
18.9 Invalidity. The invalidity, voidness, or illegality of any provision of this Lease does not
affect, impair, or invalidate any other provision of this Lease.
Aquatic Lands Lease
SECTION 18 MISCELLANEOUS
Page 27 of 31 Lease No. 20- 085091
18.10 Applicable Law and Venue. This Lease is to be interpreted and construed in
accordance with the laws of the State of Washington. Venue for any action arising out of or in
connection with this Lease is in the Superior Court for Thurston County, Washington.
18.11 Statutory Reference. Any reference to a statute means that statute as presently enacted
or hereafter amended or superseded.
18.12 Recordation. At Tenant's expense and no later than thirty (30) days after receiving the
fully- executed Lease, Tenant shall record this Lease in the county in which the Property is
located. Tenant shall include the parcel number of the upland property used in conjunction with
the Property, if any. Tenant shall provide State with recording information, including the date of
recordation and file number. If Tenant fails to record this Lease, State may record it and Tenant
shall pay the costs of recording upon State's demand.
18.13 Modification. No modification of this Lease is effective unless in writing and signed by
both Parties. Oral representations or statements do not bind either Party.
18.14 Survival. Any obligations of Tenant not fully performed upon termination of this Lease
do not cease, but continue as obligations of the Tenant until fully performed.
Aquatic Lands Lease
Page 28 of 31 Lease No. 20- 085091
18.15 Exhibits. All referenced exhibits are
as unincorporated.
THIS AGREEMENT requires the signature
signature below.
Dated: /G(J(// 6 ,20 as
Dated: crt,gi., 2 20
Il
Approved as to form this
12 day of March, 2010
Janis Snoey, Assistant Attorney General
Aquatic Lands Lease Page 29 of 31
incorporated in the Lease unless expressly identified
of all Parties and is effective on the date of the last
CIT PORT GEL
By.
Title:
Address:
D Diguilio
Mayor
321 E 5 St
Port Angeles WA 98362
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
By:(
Title:
Address:
BRIDGET MORAN
Deputy Supervisor
MS 47027
1111 Washington ST SE
Olympia WA 98504
Lease No. 20- 085091
STATE OF WASHINGTON
ss
County of
Dated:
lily 19, a4/f
L
(Seal or stamp)
Notary Public
State of Washington
JANESSA M. HURD
MY COMMISSION EXPIRES
MAY 27, 2014
REPRESENTATIVE ACKNOWLEDGMENT
I certify that I know or have satisfactory evidence that DAN DIGUILIO is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath stated
that he was authorized to execute the instrument and acknowledged it as the Mayor of City of
Port Angeles to be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Janessa t,
(Print Name)
Notary Public in and for the State of
Was on residing at
My appointment expires
a7B /L(
Aquatic Lands Lease Page 30 of 31 Lease No. 20- 085091
STATE OF WASHINGTON
ss
County offs
I certify that I know or have satisfactory evidence that BRIDGET MORAN is the person who
appeared before me, and said person acknowledged that she signed this instrument, on oath
stated that she was authorized to execute the instrument and acknowledged it as the Deputy
Supervisor of the Department of Natural Resources, to be the free and voluntary act of such party
for the uses and purposes mentioned in the instrument.
Dated: L a Q
(Seal or stamp)
omit I
p `jA Ex p
NOTARY
j°LBLS y
H t A ti �'v'��`
STATE ACKNOWLEDGMENT
Aquatic Lands Lease Page 31 of 31
(Signature
\arn‘ -k. Rhl Pr
(Print Name)
Notary Public in and for the State of
Washington, residing at
My appointment expires LPN) t� C
Lease No. 20- 085091
EXHIBIT A
Legal Description of Premises and Encumbrances
Current Survey recorded with: Clallam County
Auditor's File No.: 2011 1264025
Date: 3/17/11
PLAN OF OPERATIONS
EXHIBIT B
1. DESCRIPTION OF PERMITTED USE
A. Existing Facilities
A single building with a board walk sits partly on State Owned Aquatic Lands
(SOAL). The portion of the building that is on SOAL is supported by wood
treated pilings, some of which are supported by cylindrical concrete pads. The
building will be used to store rowing vessels used by local YMCA members.
B. Proposed Facilities. Tenant proposes no new facilities.
Aquatic Lands Lease
Page 1 of 1 Lease No. 20- 085091
Heidi L. Greenwood
Assistant City Attorney
[4562]
Jeanie DeFrang
Legal Administrative
Assistant
[4536]
Randi Mahlum
Legal Records
Specialist
[4576]
Holly McKeen
Legal Administrative
Assistant
[4530]
IJORT
Sincerely,
W A S H I N G T O N U.S.A.
LEGAL
DEPARTMENT TO: Janessa Hurd, City Clerk
William E. Bloor FROM: Holly McKeen, Legal Administrative Assistant
City Attorney
[4531]
DATE: September 26, 2011
Dennis Dickson
Sr. Assistant City RE: Aauatic Lands Lease Ediz Hook
Attorney
[4532]
Attached for your records please find a recorded copy of the Aquatic Lands Lease
between the City and Washington State DNR.
Thank you for your attention to this matter.
Holly McKee(.
Legal Administrative Assistant
Attachment
G \LEGAL\a MEMOS\MEMOS 2011\Hurd aquatic lease 09 26 11 wpd