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HomeMy WebLinkAbout065-26 - Heritage Bank - ContractLEASE (Parking) This Lease is made this 11'x' day of June, 2026, by and between Heritage Bank, a Washington bank corporation ("Landlord") and the city of Port Orchard, a Washington municipal corporation ("Tenant"). 1. Premises. The Landlord hereby leases to the Tenant that real property and the improvements thereon located at 620 Bay Street, Port Orchard, Washington, Kitsap County Tax Parcel No. 4650-009-001-0005 ("Premises"), legally described as follows: SEE EXHIBIT A, ATTACHED HERETO Tenant accepts the Premises in its "AS IS, WHERE IS" condition, with all faults, and acknowledges that Tenant has had the opportunity to inspect the Premises and has determined that the Premises are suitable for Tenant's intended use. Landlord makes no representation or warranty regarding the condition, suitability, zoning, permitting, or fitness of the Premises for Tenant's intended use. 2. Term. This Lease shall be on a month to month basis commencing June 1, 2026, and terminating upon thirty (30) days prior written notice by either Landlord or Tenant. Unless otherwise agreed in writing by Landlord, any termination notice shall be effective as of the last day of a calendar month. 3. Rent. The Tenant covenants and agrees to pay the Landlord, at 3615 Pacific Ave, Tacoma WA 98418, or to such other party or at such other place as Landlord may hereafter designate, monthly rent in the sum of One Hundred and No/l00th Dollars ($100.00), in advance, without offset or deduction, on or before the first (is') day of each month during the term of this Lease. 4. Deposit, Concurrent herewith, the Tenant shall deposit with Landlord the following (a) first and last months' rent, and (b) a security deposit of $1,500.00. Landlord's obligations with respect to the security deposit are those of a debtor and not of a trustee, and Landlord may commingle the security deposit with its other funds. Use. 5.1. Permitted Use. The Tenant shall use the Premises solely for non-exclusive daily vehicle parking and for no other purpose without the prior written consent of Landlord ("Permitted Use"). The Tenant shall comply with all governmental laws, ordinances, regulations, orders, directives, permit requirements and insurance requirements applicable to the Tenant's use of the Premises. Tenant shall be responsible for all acts, omissions, claims, damages, waste, violations, insurance failures, spills, trash, hazardous materials, personal injury claims, and property damage arising from or relating to the Permitted Use, without limitation of Tenant's indemnity obligations under Section 12.2. 5.2. No Monetization; No Sublease or Property Interest. Except for those administrative and permitting charges and fees specifically set forth on Schedule I, attached hereto, or as otherwise agreed to in writing by Landlord, Tenant shall not charge, collect, receive, or retain, directly or indirectly, any rent, fee, license fee, vendor fee, concession fee, parking charge, revenue share, reimbursement, profit participation, or other consideration from any person or entity for the use of, access to, parking upon, or occupancy of the Premises or any portion thereof. No parking, public -use, vendor, or similar arrangement shall create, or be deemed to create, any leasehold, sublease, tenancy, assignment, exclusive right, concession right, license right, or possessory interest in favor of any person or entity. 15955-94/CRP/01299474.001 11256602.1- 366922 - 0001 6. Maintenance. Tenant shall, at Tenant's sole cost and expense, keep, maintain, and surrender the Premises in good, clean, safe, and orderly condition. Without limiting the foregoing, Tenant shall be responsible for: (a) keeping all paved areas, drive aisles, parking areas, sidewalks, landscaped areas, and access areas used by Tenant clean and free of debris, trash, oil, fuel, glass, and other refuse; (b) promptly removing all trash, litter, and debris generated by Tenant's use or by Tenant's employees, agents, contractors, vendors, licensees, invitees, or members of the public entering the Premises in connection with Tenant's use; (c) preventing the discharge, dumping, storage, or disposal of any chemicals, or other contaminants on or from the Premises; (d) repairing any damage to the Premises caused by Tenant or any employees, agents, invitees or any other activity associated with Tenant's use; and (e) complying with all laws, ordinances, rules, regulations, permits, licenses, fire requirements, health department requirements, stormwater requirements, and governmental directives applicable to Tenant's use of the Premises. IfTenant fails to perform any maintenance, repair, cleanup, or removal obligation required under this Lease, Landlord may, after reasonable notice to Tenant except in the case of emergency, perform such obligation on Tenant's behalf, and Tenant shall reimburse Landlord for all costs incurred by Landlord within ten (10) days after written demand. 7. Utilities and Fees. The Tenant agrees to pay promptly when due all charges for light, heat, water, sewer, garbage, fire protection and other utilities and services to the Premises and all license fees and other governmental charges levied on the Premises. 8. Taxes. The Tenant shall pay promptly when due all real estate taxes and assessments with respect to the Premises. 9. Landlord's Reservations. The Landlord reserves the right, without liability to the Tenant, to inspect the Premises at reasonable times and without unreasonable interference to the business of Tenant. Additionally, Landlord reserves the right to use five (5) unreserved parking spaces on the Premises, including for Landlord's employees and customers. 10. Hazardous Substances. Tenant shall not cause or permit the Premises to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, or process any hazardous substance, petroleum products or other contaminants. Tenant shall not cause or permit any hazardous substances, petroleum products, or other contaminants to be released, discharged, dumped, stored, or disposed of on, under, or from the Premises. Tenant shall immediately notify Landlord of any spill, release, discharge, or threatened release and shall promptly remediate the same at Tenant's sole cost and expense in compliance with applicable law. 11. Alterations. The Tenant shall not make any alterations, additions or improvements to the Premises without Landlord's prior written consent. In the event that Landlord approves any such alterations, additions or improvements, they shall be done at Tenant's expense and the Tenant shall agree to save the Landlord harmless from any damage, loss or expense arising therefrom and to comply with all laws, ordinances, rules and regulations. Upon termination of this Lease, alterations, additions and improvements made in, to and on the Premises, shall remain upon and be surrendered as a part of the Premises; provided, upon the Landlord's request, the Tenant shall promptly remove those additions, alterations or improvements as may be specified by Landlord and repair and restore the Premises to its original condition at Tenant's sole cost and expense. 12. Insurance/Accidents and Liability. -2- 15955-94/CRP/01299474.001 11256602.1- 366922 - 0001 12.1. Insurance. Tenant shall, at'1'enant's sole cost and expense, maintain commercial general liability insurance covering Tenant's use and occupancy of the Premises, with limits of not less than Two Million and No/100 Dollars ($2,000,000.00) per occurrence and Four Million and No/100 Dollars ($4,000,000.00) general aggregate, or such other reasonable limits as Landlord may require from time to time. Such coverage shall include bodily injury, property damage, contractual liability, and premises liability coverage. Landlord shall he named as an additional insured with respect to Tenant's use and occupancy of the Premises. Tenant shall provide Landlord with certificates of insurance satisfactory to Landlord prior to Tenant's occupancy of the Premises and thereafter upon Landlord's reasonable request. Upon approval of the Landlord (which may be denied for any reason), Tenant may satisfy the insurance requirements through commercial insurance, a municipal risk pool, self-insurance, or any combination thereof, provided Tenant delivers evidence thereof satisfactory to Landlord. 12.2. Indemnity. To the fullest extent permitted by law, Tenant shall indemnify, defend, and hold harmless Landlord and Landlord's officers, directors, employees, agents, contractors, successors, and assigns from and against any and all claims, demands, losses, liabilities, damages, penalties, costs, and expenses, including reasonable attorneys' fees, arising out of or relating to: (a) Tenant's use, occupancy, control, or possession of the Premises; (b) the acts or omissions of Tenant or Tenant's employees, agents, contractors, vendors, licensees, invitees, or members of the public entering the Premises in connection with Tenant's use; (c) any parking, event, vendor, public access, public -use or similar activities conducted on or from the Premises in connection with Tenant's use, occupancy, or activities under this Lease; or (d) Tenant's breach of this Lease; except to the extent caused by the gross negligence or willful misconduct of Landlord. 13. Damage or Destruction. If the Premises shall be substantially damaged or destroyed by fire or other casualty, the Landlord shall have the option either (a) to repair or rebuild the Premises within one hundred twenty (120) days; or (b) not to repair or rebuild and to cancel this Lease on thirty (30) days' notice. During the period of untenantability, rent shall abate in the same ratio as the portion of the Premises rendered untenantablc bears to the whole of the Premises, provided that if the damage is due to the fault or neglect of the Tenant, there shall be no abatement of rent. 14. Eminent Domain. If the whole of the Premises shall be taken by any public authority under the power of eminent domain, or purchased by the condemnor in lieu thereof, then the term of this Lease shall cease as of the date possession is taken by such public authority. If only a part of the Premises shall be so taken, the Lease shall terminate only as to the portion taken and shall continue in full force and effect as to the remainder of the Premises, and the monthly rent shall be reduced proportionately. In the event of any taking, whether whole or partial, the Landlord shall be entitled to all awards, settlements, or compensation which may be given for the Premises. The Tenant shall have no claim against the Landlord for the value of any unexpired term of this Lease. 15. Liens. Tenant shall keep the Premises and Tenant's interest under this Lease free from any liens arising out of work performed for, materials furnished to, or obligations incurred by Tenant, and Tenant shall indemnify, defend, and hold Landlord harm less from and against the same. If any lien is filed against the Premises arising from Tenant's use, work, materials, equipment, vendors, contractors, or obligations, Tenant shall cause such lien to be released or bonded over within ten (10) days after written notice from Landlord. Nothing in this Lease shall be deemed to authorize Tenant to subject Landlord's interest in the Premises to any lien. 16. Default by Tenant. -3- 15955-94/CRP/01299474.001 11256602.1- 366922 - 0001 16.1. Default. Tenant shall be in default under this Lease if: (a) Tenant fails to pay rent or any other sum due tinder this Lease when due or (b) otherwise fails to perform any non -monetary covenant, agreement, or obligation under this Lease. 16.2. Landlord's Remedies. Upon the occurrence of any default by Tenant, Landlord may exercise any one or more of the following remedies, without limiting any other rights or remedies available to Landlord tinder this Lease, at law, or in equity: (a) terminate this Lease; (b) terminate Tenant's right to possession of the Premises; (c) recover possession of the Premises through unlawful detainer, ejectment, or other lawful proceedings; (d) recover all rent, additional rent, damages, costs, expenses, attorneys' fees, and other amounts due under this Lease; (e) perform Tenant's obligations on Tenant's behalf and recover the cost thereof from Tenant as additional rent; and/or (f) seek injunctive relief or specific performance to prevent or remedy any violation of this Lease. Landlord shall not be required to make any physical reentry or use self-help to recover possession of the Premises, and nothing in this Lease shall be construed to limit Landlord's rights tinder Chapter 59.12 RCW or any other applicable law. 16.3. Interest. Any rent or other amount due from Tenant to Landlord that is not paid when due shall bear interest from the due date until paid at the rate of twelve percent (12%) per annum, or the highest rate permitted by applicable law, whichever is less. 17. Landlord Default/Limitations. Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within thirty (30) days after written notice by Tenant to Landlord. The notice shall specify wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. Tenant further agrees not to invoke any of its remedies under this Lease until such thirty (30) days have elapsed. Tenant agrees that any money judgment resulting from any default or other claim arising under this Lease will be satisfied only from Landlord's right, title and interest in the Premises, that no other real, personal or mixed property of Landlord or any of its shareholders, directors, officers, managers, members, partners or other similar parties (as applicable) will be subject to levy on any such judgment, and that the shareholders, directors, officers, managers, members, partners or other similar parties (as applicable) of Landlord will not have any personal liability whatsoever under this Lease. 18. Costs and Attorney's Fees. In the event either party shall commence legal action to enforce any provision of this Lease, the court shall award to the prevailing party all reasonable attorney's fees and all costs incurred in connection therewith, including fees and costs on appeal. Venue for any action hereunder shall be in the county in which the Premises is located. 19. Holding Over. If the Tenant, with the implied or express consent of the Landlord, shall hold over after the expiration of the term of this Lease, Tenant shall remain hound by all the covenants and agreements herein, except that (a) tenancy shall be from month -to -month; and (b) the monthly rent to be paid by Tenant shall be determined by adjusting the monthly rent to the full market rent for the Premises (reasonably calculated by Landlord) multiplied by 150%. 20. Surrender of Possession. The Tenant shall, prior to the termination of this Lease or of Tenant's right to possession, remove from the Premises all personal property which Tenant is entitled to remove and those alterations, additions, improvements or signs which may be required by Landlord to be removed pursuant to this Lease, and shall repair or pay for all damage to the Premises caused by such removal. All such property remaining and every interest of the Tenant in the same shall he conclusively -4- 15955-94/CRP/01299474.001 11256602.1 - 366922 - 0001 presumed to have been conveyed by Tenant to the Landlord under this Lease as a bill of sale, without compensation, allowance or credit to Tenant. The Tenant shall, upon termination of this Lease or of Tenant's right of possession, peacefully quit and surrender the Premises without notice, neat and clean and in as good condition as when Tenant took possession. Tenant's obligations that accrued prior to termination, and Tenant's surrender, restoration, indemnity, repair, cleanup, and payment obligations, shall survive the termination of this Lease. 21. No Waiver of Covenants. Time is of the essence of this Lease. Any waiver by either party of any breach hereof by the other shall not be considered a waiver of any future, similar or other breach. 22. Notices. Any notice under this Lease must be in writing and be personally delivered, delivered by recognized overnight courier service or given by mail. Any notice given by mail must be sent, postage prepaid, by certified or registered mail, return receipt requested. All notices must be addressed to the parties at the following addresses or at such other addresses as the parties may from time to time direct in writing: Tenant: City of Port Orchard Attn: Mayor Rob Putaansuu 216 Prospect Street Port Orchard, WA 98366 Landlord: Heritage Bank Attn: Justin Hunt 3615 Pacific Ave Tacoma, WA 98418 With a copy to: Eisenhower Carlson PLLC Attn: Carl R. Peterson 909 A Street, Suite 600 Tacoma, WA 98402 Any notice will be deemed to have been given, if personally delivered, when delivered, and if delivered by courier service, one business day after deposit with the courier service, and if mailed, two business days after deposit at any post office in the United States of America. 23. Assignment and Subletting. The Tenant shall not, either voluntarily or by operation of law, assign, transfer, convey or encumber this [,ease or interest under it, or sublet the Premises or, except as provided in Section 5 hereof, allow any other person to occupy or use the Premises or any part thereof without the Landlord's prior written consent. The Landlord's consent shall not release or discharge the Tenant from future liability under this Lease and shall not waive Landlord's right to consent to any future assignment or sublease. Any assignment or subletting without the Landlord's consent shall be void, and shall, at Landlord's option, constitute a default under this Lease. In the event the Tenant violates the provisions of this Section, the Landlord shall have the right to recapture the Premises by notice given to Tenant within twenty (20) days after the discovery by Landlord of such violation. Such recapture shall terminate this Lease effective on the date the recapture notice is received by the Tenant. -5- 15955-94/CRP/01299474,001 11256602.1 - 366922 - 0001 24. Binding on Heirs, Successors and Assigns. The covenants and agreements of this Lease shall be binding upon the heirs, executors, administrators, successors and assigns of both parties hereto, except as hereinabove provided. 25. Authority. Tenant represents and warrants that this Lease has been duly authorized by all required action of Tenant, including any required action of the Port Orchard City Council or pursuant to validly delegated authority, and that the individual signing this Lease on behalf of Tenant has full authority to bind Tenant. On or before execution of this Lease, Tenant shall provide Landlord evidence of such authority reasonably satisfactory to Landlord. 26. Public Records. Landlord acknowledges that Tenant is a public agency subject to the Washington Public Records Act, Chapter 42.56 RCW. Nothing in this Lease requires Tenant to violate applicable public records laws. Tenant shall, to the extent legally permissible, provide Landlord prompt written notice of any public records request seeking Landlord's confidential, proprietary, financial, or nonpublic information so that Landlord may seek appropriate protection. 27. Counterparts. This Lease may be executed in multiple counterparts and all counterparts shall together constitute the Lease. 28. Entire Agreement. It is expressly understood and agreed by the Landlord and the Tenant that there are no promises, agreements, conditions, understandings, inducements, warranties or representations, oral or written, express or implied, between them, other than as herein set forth and that this Lease shall not be modified in any manner except by an instrument in writing executed by the parties. 29. Presumption. This Agreement or any Section hereof shall not be construed against any party due to the fact that the Agreement or any section hereof was drafted by said party or their attorney. IN WITNESS WHEREOF, the parties hereto have executed this Lease on the day and year first above written. Landlord: HERITAGE BANK By: Its:l/p a ifi-+4e +� enstrrt: CITY OF PORT ORCHARD By: Its: T -6- 15955-94/CRP/01299474.001 11256602.1- 366922 - 0001 Exhibit A Legal Description 4650-009-001-0005 PARCEL 1: LOTS I AND 2, BLOCK 9, S.M. STEVEN'S TOWN PLAT OF SIDNEY, ACCORDING TO PLAT RECORDED IN VOLUME l OF PLATS, PAGE 1 OF KITSAP COUNTY, WASHINGTON. PARCEL If: LOTS 3 AND 4, BLOCK 9, S.M., STEVEN'S TOWN PLAT OF SIDNEY, ACCORDING TO PLAT RECORDED IN VOLUME I OF PLATS, PAGE 1, RECORDS OF KITSAP COUNTY, WASHINGTON; EXCEPT THOSE PORTIONS OF SAID LOT 3 CONVEYED TO THE TOWN OF PORT ORCHARD FOR STATE ROAD NO. 14 BY DEEDS RECORDED EN VOLUME 149 OF DEEDS, PAGES 505 AND 558, UNDER AUDITOR'S FILE NOS. 147447 AND 147666, WHICH EXCEPTED PORTIONS ARE DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF SAID LOT 3 A DISTANCE OF 45.0 FEET SOUTH OF THE NORTHWEST CORNER OF SAID LOT; THENCE SOUTH ALONG SAID WEST LINE 29.87 FEET, MORE OR LESS, TO THE SOUTHWEST CORNER OF SAID LOT; THENCE EAST ALONG SAID SOUTH LINE 7.0 FEET; THENCE NORTH PARALLEL WITH SAID WEST LINE TO A POINT EAST OF THE POINT OF BEGINNING; TI-IENCE EAST PARALLEL WITH SAID SOUTH LINE 0.5 FEET; THENCE NORTH PARALLEL WITH SAID WEST LINE 7.5 FEET; THENCE EAST PARALLEL WITH SAID SOUTH LINE 3.0 FEET; THENCE NORTHERLY ALONG THE ARC OF A CURVE, 'T'HE RADIUS OF WHICH BEARS EAST PARALLEL WITH SAID SOUTH LINE 105.8 FEET TO A POINT ON THE NORTHWESTERLY LINE OF SAID LOT, 13.17 FEET SOUTHWESTERLY FROM TI-IE MOST NORTHERLY CORNER THEREOF; THENCE SOUTHWESTERLY ALONG SAID NORTHWESTERLY LINE 29.0 FEET TO THE NORTHWEST CORNER OF SAID LOT; THENCE SOUTH ALONG THE WEST LINE OF SAID LOT 45.0 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED PORTIONS. EXHIBIT A-1- 15955-94/CRP/01299474.12 11256602,1 - 366922 - 0001 Schedule I Administrative and Permitting Charges and Fees City issued Merchant Parking Pass - $35 fee, plus credit card fees SCHEDULEI 11256602.1- 366922 - 0001 Certificate of Coverage RISK MANAGEMENT SERVICE AGENCY Certificate holder: Heritage Bank 3615 Pacific Avenue Tacoma, WA 98418 RE: Parking Lot at 620 Bay Street, Port Orchad WA Policy number: Term of certificate: Annual re -issue: None 1/112026- 1/1/2027 Yes Please be advised that the City of Port Orchard is a member of the Association of Washington Cities Risk Management Service Agency (AWC RMSA) and participates in the self -insured and loss -pooling programs checked below, which are administered by the AWC RMSA for its members. _ Type of coverage Limits Deductible All risk property coverage $250 million per occurrence $0 [x] Liability coverage $15 million per occurrence $0 Employee fidelity blanket coverage $1 million per occurrence $0 © Employer Liability ("Stop Gap") $15 million per occurrence $0 Comprehensive auto liability $15 million per occurrence $0 Cyber liability $3 million per occurrence $0 n Pollution liability $2 million per occurrence $0 Under the AWC RMSA Coverage Agreement issued to the member referenced above, and within the limits and provisions of the above program, AWC RMSA has agreed to provide, to the certificate holder named above, defense, payment, and loss or indemnification funding in accordance with the terms of the Coverage Agreement, with the exception that no defense or indemnity is available for claims arising from the sole negligence of the certificate holder with respect to the referenced operations or activities. AWC RMSA is not an insurance company and therefore cannot name an additional insured or loss payee. Cancellation Should the above described coverage be cancelled before the expiration date thereof, the AWC RMSA will provide notice to its members in accordance with its Coverage Agreement. Failure to provide such notice to the certificate holder shall impose no obligation or liability of any kind upon the AWC RMSA. This certificate is issued for information only and gives no rights to the certificate holder. This certificate does not amend, extend, or alter the coverage provided by the AWC RMSA. Andrea Luper AWC RMSA Program Director cc: City of Port Orchard