HomeMy WebLinkAboutLeaseADDENDUM TO LEASE AGREEMENT
(City of Renton to BHC, Inc.)
LAG 93-004
Addendum 07-24
THIS ADDENDUM to Lease Agreement LAG 93-004, is effective as of the date of
execution by the City of Renton, as indicated on the last page of this addendum.
RECITALS:
WHEREAS, BHC, Inc. (hereinafter "Lessee" or "Tenant") has a Lease Agreement with
the City of Renton (hereinafter "Lessor" or "Landlord"), known to Landlord and Tenant
(collectively, the "Parties") as LAG 93-004, executed on October 28, 1993 and subsequently
amended by and through its amendments: Addendum 01-98, Addendum 02-98, Addendum
03-04, Addendum 04-09, Addendum 05-13, and Addendum 06-20; (hereinafter, collectively,
the "Lease"); and
WHEREAS, pursuant to Section 2.1 of the Lease, the initial term of the lease was for an
approximately twenty-six {26) year period commencing on October 28, 1993, and terminating
on December 31, 2019; and
WHEREAS, Section 2.2.1 ofthe Lease grants Tenant an option to renew or extend the
Lease for two additional five (5) year terms commencing on the expiration of the intial term;
provided that Tenant had fully and faithfully compiled with all the terms and conditions of the
Lease; and
WHEREAS, by and through Addendum 6-20 Tenant executed its first five-year
extension to the Lease for a five (5) year term commencing on the expiration of the initial
term and terminating on December 31, 2024; and
WHEREAS, on June 18, 2024, Tenant notified Landlord of Tenant's desire to renew or
extend the Lease for a further five (S) year term; and
WHEREAS, pursuant to paragraphs 1.5 and 10 of the Lease, all structures and any and
all improvements become the property of the Landlord upon the expiration of the lease on
January 1, 2030; and
WHEREAS, pursuant to Amendment 6-20 of the Lease, the land rental rate for the
approximately 48,778.51 square feet of leased area was established as $0.697 per square foot
per year on October 28, 2018 for the period through October 28, 2023; and
WHEREAS, on March 27, 2019, the Airport conducted an iridependent market appraisal
of all Airport leased areas to determine the fair market value (hereinafter "market appraisal").
Addendum to Lease Agreement LAG 93-004
City of Renton to BHC Inc.
LAG-93-004, Adden #7-24
LAG 93-004
Addendum 07-24
The market appraisal determined the fair market ground lease Irate to be $1.10 per square foot per year for all ground leases on the Airport; and
WHEREAS, Landlord intends to use the most recent ma�ket appraisal study plus theCPI-U to adjust the annual land rental rate to its fair market value; and
WHEREAS, pursuant to Addendum 4-09 to LAG 93-004, lin a letter dated September 22, 2023, Landlord notified Tenant by certified mail that the lease rate would be readjusted using a means other than the Consumer Price Index-Urban; and
WHEREAS, pursuant to negotiations between the PartiJs, a new land rental rate was established at $1.20 per square foot per year, resulting in an a7nual rental amount of $58,534.21 (48,778.51 sq. ft. x $1.20}, and continuing until October 28, 2028; and
WHEREAS, pursuant to negotiations between the Parties, Tenant shall make a lump sum payment to Landlord of the back payment of rent at the new land rental rate for the period beginning on April 1, 2024 upon execution of this Addendum; and
WHEREAS, pursuant to Section 6.11.2 of Landlord's Airport Leasing Policies, all leases will be subject to periodic adjustments of insurance requireme1rts as imposed by the Landlord; and
WHEREAS, all other terms and conditions of the Lease and the addenda thereto shall remain in full force and effect;
NOW, THEREFORE, IT IS HEREBY AGREED AND COVENANTED BY AND BETWEEN THE CITY OF
RENTON AND BHC INC. AS FOLLOWS: WITNESSETH: j 1.The Lease is hereby renewed and extended for five (S) yea s, commencing on January 1,2025, and terminating on December 31, 2029. On January 1, 2030, all structures and anyand all improvements upon the Premises become the sole property of Landlord.I 2.All previous actions taken to maintain Tenant's tenancy at the Renton Municipal Airportare hereby ratified.3.Landlord and Tenant agree to amend section 3.1. of LAG 93-004 to establish an annualland rent of $58,534.21 (48,778.51 x $1.20}, for the 48, 778[ 51 square feet identified inlease LAG 93-004 through October 28, 2028.
Addendum to Lease Agreement LAG 93-004
City of Renton to BHC Inc.
2
LAG 93-004
Addendum 07-24
4.Effective on the date of this Addendum, Section 3.1. of LAG 93-004, is hereby amended to
read as follows:
3.1. Minimum Monthly Rent: Landlord and Tenant do hereby agr ee that Tenant
shall pay to Landlord a Minimum Monthly Rent in the sum of four thousand eight
hundred seventy-seven dollars and eighty-five cents ($4,877.85), which am ount is
one-twelfth of the Total Annual Rent of $58,534.21, PLUS leasehold excise tax as
described in Section 3.6. of lease LAG 93-004, without deduction, offset, prior
notice or demand, payable promptly in advance on the first day of each and every
month during the Term. This Minimum Monthly Rate shall remain unchanged until
October 28, 2028, at the earliest. All such payment shall be made to the City of
Renton, Attention: Fiscal Services, 1055 South Grady Way, Renton, Washington
98057; or (2) By electronic payment using the payment portal available here:
http://rentonwa.gov/aronlinepayments. Automatic recurring payments can be set
up through the payment portal. For portal questions or assistance, please email
financeAR@rentonwa.gov or call (425) 430-6897. The Minimum Monthly Rent is
computed as follows:
Rental Payment Schedule
48,778.51 sq. ft.@ $1.20/sq.ft. per year= $58,534.21 annual rent
divided by 12 = $4,877.85 rental per month, PLUS leasehold excise tax
5.Following the execution of this addendum, Tenant shall pay to Landlord a lump sum of the
back payment in an amount equal to the new Minimum Monthly Rent rate for the period
beginning April 1, 2024, and ending with the first day of the month AFTER this Addendum
No. 7-24 is entered into, PLUS Leasehold Excise Tax.
6.Effective on the date of this Addendum, Section 19. of LAG 93-004 is hereby amended to
read as follows:
19.INSURANCE:
19.1. Personal Property: Landlord, at its expense, shall maintain in force during the
Term a policy of special form -causes of loss or all risk property insurance on all of
Landlord's alterations, improvements, trade fixtures, furniture and other personal
property in, on or about the Premises , in an amount equal to at least their full
replacement cost. Any proceeds of any such policy available to Landlord shall be used by
Landlord for the restoration of Landlord's alterations, improvements and tr ade fixtures
and the replacement of Landlord's furniture and other personal property. Any portion of
such proceeds not used for such restoration shall belong to Landlord. It is agreed that
Tenant shall not be held liable in any manner for, or on account of, any loss or damage to
Addendum to Lease Agreement LAG 93-004
City of Renton to BHC Inc.
3
LAG 93-004
Addendum 07-24
personal property of the landlord, landlord's invitees or other persons, which may be
sustained by fire or water or other peril, or for the loss of any articles by burglary, theft or
any other cause from or upon the Premises. It is acknowledged that Tenant does not cover
any of the personal property of Landlord, Landlord's invitees or other persons upon the
Premises through its insurance. Landlord, its invitees and other persons upon the Premises
are solely responsible to obtain suitable personal property insurance.
19.2. Liability Insurance: Landlord, at its expense, shall maintain in force during the
Term the following types of insurance (or equivalents): a policy of commercial general
liability insurance (including premises liability), with the following mini mum limits:
$1,000,000 per occurrence, $2,000,000 annual aggregate. Tenant shall be named as an
additional insured on Landlord's liability insurance solely with respect to the operations of
the named insured (i.e., Landlord) and that coverage being primary and no n-contributory
with any other policy(ies} carried by, or available to, the Tenant. The Landlord shall
provide the Tenant with written notice of any policy cancellation, within two business days
of their receipt of such notice.
19.3. Insurance Policies: Insurance required hereunder shall be written by a company
or companies acceptable to Tenant. Tenant reserves the right to establish and, from time
to-time, to increase minimum insurance coverage amounts. Insurance required herein
shall provide coverage on an occurrence basis, not a claims-made basis. Notice of
increased minimum insurance coverage amounts shall be sent to the landlord at least
forty five (45) days prior to the annual renewal date of the Landlord's insurance. Prior to
possession the Landlord shall deliver to Tenant documents, in a form acceptable to
Tenant, evidencing the existence and amounts of such insurance. Landlord shall, prior to
the expiration of such policies, furnish Tenant with evidence of renewal of such insurance,
in a form acceptable to Tenant. Landlord shall not do or permit to be done anything which
shall invalidate the insurance policies referred to above. Landlord shall forthwith, upon
Tenant's demand, reimburse Tenant for any additional premiums for insurance carried by
Tenant attributable to any act or omission or operation of Landlord causing such increase
in the cost of insurance. If Landlord shall fail to procure and maintain such insurance, then
Tenant may, but shall not be required to, procure and maintain the same, and Landlord
shall promptly reimburse Tenant for the premiums and other costs paid or incurred by
Tenant to procure and maintain such insurance. Failure on the part of the Landlord to
maintain the insurance as required shall constitute a material breach of the Lease, upon
which the Tenant may, after giving five business days notice to the Landlord to correct the
breach, terminate the Lease or, at its discretion, procure or renew such insurance and pay
any and all premiums in connection therewith, with any sums so expended to be repaid to
the Tenant on demand.
Addendum to Lease Agreement LAG 93-004
City of Renton to BHC Inc.
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LAG 93-004
Addendum 07-24
19.4. Waiver of Subrogation: Landlord and Tenant each waives any and all rights of
recovery against the other, or against the officers, employees, agents and representatives
of the other, for loss of or damage to such waiving Party or its property or the property of
others under its control, where such loss or damage is insured against under any insurance
policy in force at the time of such loss or damage. Landlord shall, upon obtaining the
policies of insurance required hereunder, give notice to the insurance carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
7.All other terms and conditions of the original Lease Agreement and Addenda thereto,
insofar as they are not inconsistent herewith, shall remain in full force and effect.
BHC Inc.
a Washington Corporation
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Addendum to Lease Agreement LAG 93-004
City of Renton to BHC Inc.
CITY OF RENTON
a Municipal Corporation
Armando Pavone
Mayor
Jason Seth
City Clerk
Date
Approved as to legal form
City Attorney
5
Attest:
9/23/2024
Approved by Alex Tuttle via memo 7/10/2024