R-2016-060 2016-04-11 RESOLUTION NO. R2016-60
A Resolution of the City Council of the City of Pearland, Texas,
authorizing the City Manager or his designee to enter into an Amended
Lease Agreement with The University of Houston.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City and The University of Houston previously entered into the
Lease Agreement attached hereto.
Section 2. That the parties to the Lease Agreement desire to amend the terms of
said Agreement.
Section 3. That certain Amended Lease Agreement, a copy of which is attached
hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and
approved.
Section 4. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest an Amended Lease Agreement.
PASSED, APPROVED and ADOPTED this the 11th day of April,A.D., 2016.
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TOM REID
MAYOR
ATTEST:
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APPROVED AS TO FORM:
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DARRIN M. COKER
CITY ATTORNEY
ResolutiNn No.*.20 J6-60 U 7 O 6 "Y
Exhibit"A"
AMENDMENT TO LEASE AGREEMENT AND
AMENDMENT TO LETTER OF INTENT
This Amendment No. 3 to Lease Agreement (this "Amendment No. 3") is entered into as of
April 11, , 2016 by the City of Pearland, Texas, a home-rule municipality of the State of Texas
("Landlord"),and The University of Houston System,an agency and institution of higher education of the State of
Texas("Tenant"). All capitalized terms used herein but not defined herein shall have the meaning ascribed thereto
in the Lease Agreement(defined below).
RECITALS
WHEREAS,Landlord and Tenant entered into that certain Lease Agreement,dated as of January 13,2009
(as amended from time to time,the"Lease Agreement"),whereby Landlord agreed to Lease Agreement the Leased
Premises to Tenant.
WHEREAS, the Building on the Leased Premises was constructed by Landlord pursuant to the Lease
Agreement and now the Parties desire to modify the original terms of the Lease Agreement.
AGREEMENTS
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency are hereby
acknowledged,Landlord and Tenant hereby agree as follows:
1. Definitions. All capitalized terms used herein but not defined herein shall have the meaning
ascribed thereto in the Lease Agreement.
2. Amendment to Exhibits. Exhibit"A"to the Lease Agreement are hereby amended by deleting the
original Exhibit"A"in its entirety and replacing it with the new Exhibit"A"attached hereto;and the Leased Premises
shall further be defined as Lot 1 of Exhibit"A."
3. Amendment to Schedules. Schedules 1 and 2 to the Lease Agreement are hereby amended by
deleting the original Schedules 1 and 2 in their entirety and replacing them with the new Schedules 1 and 2 attached
hereto.
4. Text Amendments. The following Sections of the Lease Agreement are hereby by amended as
follows:
ISEC.1 LEASED PREMISES In consideration of the mutual covenants as set forth herein, Landlord and Tenant
hereby agree as follows:
A. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,for the rental and on the
terms and conditions hereinafter set forth, the following described property(the"Leased Premises"): On May 1,
2016, Tenant shall take over a conference room and classroom area, being an additional 4,379 square feet of the
building previously constructed by Landlord(the"Building");and on August 11,2016,Tenant shall take over the
Building in its entirety as the Rentable Square Feet on Lot 1,Block 1 being the real property described on Exhibit A
hereto(the"Property"). The final determination of the Rentable Square Feet of the Leased Premises will be made
according to Schedule 1. Landlord and Tenant hereby agree that this Lease Agreement is made pursuant to the
authority of Section 272.001(j),Texas Local Government Code,as amended,to promote a public purpose related to
higher education and that the Rent(as defined herein)to be collected hereunder by Landlord may or may not represent
the fair market rent value of the Leased Premises.
B. Any Expansion Option notice provision or requirements relating to the amount of square Rentable
Square Feet obtained by Tenant through this Expansion Option are hereby waived by the parties.
11 - 00706 - 4 ••
SEC.6 ADDITIONAL RENT:
B3. Tenant's annual share of Operating Expenses, which include utility expenses, shall be initially
calculated at$7.75 dollars per gross square foot annually. The$7.75 rate is determined by combining(i)the initial
rate of$5.50 per gross square foot for Tenant's share of projected utility expenses and insurance costs(collectively,
the"Non-Controllable Costs"),and(ii)the initial rate of$2.25 per gross square foot for Tenant's share the remaining
Operational Expenses identified in this Subsection B(collectively,the"Controllable Costs"). Tenant shall pay its
share of Operating Expenses in monthly installments equal to 1/12th of Tenant's annual share of Operating Expenses.
Tenant's annual share of Operating Expenses shall not exceed$175,274 for the first Lease Year. Beginning the second
Lease Year,the parties agree that Tenant's annual share of the Operating Expenses shall be based upon Landlord's
estimate of Operating Expenses based on the prior year's actual Operating Expenses; provided, however, that the
Controllable Cost portion of Operating Expenses may be increased by no more than five percent(5%)over the amount
of Tenant's annual share of the actual Controllable Costs for the immediately preceding Lease Year. Beginning May
1,2016,Tenant shall pay$7.75 per gross square foot for 28,000 square feet.Beginning August 11,2016,Tenant shall
be responsible for the payment of all Operating Expenses, and Landlord shall be relieved of any responsibility for
payment of the Operating Expenses associated with the Property, Common Areas, and Building of the Leased
Premises.
B5. Landlord shall deliver to Tenant a statement for the property insurance within thirty(30)days of the
expiration of the preceding years' policy. Tenant shall pay to Landlord its proportionate share of the difference
between the prior year's insurance premium and any current increase in premiums related to the Building and Property
for which Landlord is responsible,except that beginning August 11,2016 and throughout the remaining Term of this
Lease,Tenant shall pay to Landlord the entire cost of the insurance premium. This payment shall be made by the
Tenant to the Landlord within thirty(30)days of receipt of the statement. Tenant shall be entitled to a credit for any
decrease in premiums for the previous year.Landlord shall(i)credit such excess against Tenant's next accruing Rent
hereunder,or(ii)repay such excess to Tenant within thirty(30)days.
C.The term"Capital Renewal Fund Contributions"shall mean,for each Bond Year,as follows:
Bond Year Annual Capital Renewal Fund Requirement
1 -3 $0
4-5 1%of replacement value of the Building
6+ 2%of replacement value of the Building
Cl. Capital Renewal Fund Contributions under this Subsection C shall be payable by Tenant to Landlord
in monthly installments equal to 1/12th of the Capital Renewal Fund Contributions as specified in Subsection C above.
Landlord and Tenant shall agree upon how amounts in the Capital Renewal Fund shall be spent prior to expenditure
of any amounts in such fund.Beginning August 11,2016,Tenant's requirement to contribute to the Capital Renewal
Fund shall end(as shown on Schedule 2),and all previous contributions still remaining in the Capital Renewal Fund
shall become the property of Tenant and shall be used for Tenant's future Capital Improvements to the Building.
SEC.8 MAINTENANCE AND REPAIRS:
A. LANDLORD'S REPAIR AND MAINTENANCE.
(1) Subject to the limitation contained in Section 8 D below, Landlord shall maintain the
Property,the Common Areas(defined below)and the Building(excluding the interior of
the Leased Premises and space leased to other occupants of the Building and subject to the
provisions of Section 7B below) in good condition and repair. Landlord shall make all
structural repairs to the Building,the Leased Premises and the Common Areas,including
but not limited to all repairs to the foundation, load bearing walls, roof and any other
structural members; provided, however, all costs and expenses for such repairs shall be
included in the Operating Expenses to the extent provided in Section 6 above. In addition,
Landlord shall: (i) keep the roof of the Building free of leaks and (ii) maintain the
underground and otherwise concealed electrical and plumbing,and the exterior surface of
the outside walls of the Leased Premises,the Building and the Property,excluding window
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glass in the Premises, (iii) maintain all heating, air conditioning and electrical systems
serving the Leased Premises, the Building, the Common Areas and the Property, (iv)
maintain all fire protection systems serving the Building(excluding any fire alarm system
which only serves the Leased Premises, which fire alarm system, if any, shall be the
responsibility of Tenant) and the Common Areas; provided, however, all costs and
expenses shall be included in the Operating Expenses to the extent provided in Section 6
above.
D. It is hereby agreed by Landlord and Tenant that beginning August 11,2016,Tenant shall assume
all costs and responsibilities for the maintenance and repair of the Property,Common Areas and the Building located
on the Leased Premises ("Maintenance Transition Date"). No less than thirty (30) days prior to the Maintenance
Transition Date,Landlord and Tenant shall conduct an inspection of the Leased Premises,and all necessary repairs to
the Leased Premises shall be performed by the responsible Party prior to the Maintenance Transition Date.
SEC.9 REQUIRED SERVICES;ADDITIONAL SERVICES:
A. Provided no Event of Default(as hereinafter defined)has occurred and is continuing hereunder for
which Landlord has terminated this Lease Agreement or Tenant's right of possession of the Leased Premises, and
subject to Section 9 E below,Landlord shall furnish the following services and amenities(collectively,the"Required
Services")to Tenant(and its assignees and subtenants permitted hereunder)while occupying the Leased Premises,
subject to temporary interruptions due to scheduled maintenance, in the event of emergencies or otherwise due to
causes beyond Landlord's control:
E. It is hereby agreed by Landlord and Tenant that beginning August 11, 2016,Tenant shall assume
all costs and responsibilities for the Required Services to serve the Property, Common Areas and Building of the
Leased Premises.Landlord assumes all costs and responsibilities for infrastructure,roadway and environmental costs
as more particularly set forth on Schedule 1 attached hereto.
5. The Letter Of Intent dated April 6, 2015 between Landlord and Tenant (the "LOI") is hereby
amended to change the term"Property",as it is used in the LOI,to include all of Lot 2,Block 1 (21.3654 acres),said
Lot 2 being further described on Exhibit"A"attached hereto.It is Landlord's intention to convey fee simple title to
said Lot 2 to Tenant under a separate transaction pursuant to the terms of the LOI.
6. No Other Amendments. Except as specifically provided in this Amendment No. 3, no other
amendments,revisions or changes are made or permitted hereby to the Lease Agreement or the LOI. All other terms
and conditions of the Lease Agreement and the LOI remain in full force and effect and apply fully to this Amendment
No.3.
7. Conforminit References. Upon the effectiveness of this Amendment No.3,each reference in the
Lease Agreement to"this Lease Agreement,""thereunder,""hereto,""herein,"or words of like import, shall mean
and be a reference to the Lease Agreement as amended hereby.
8. Counterparts. This Amendment No.3 may be executed in one or more counterparts,each of which
shall be considered an original instrument,but all of which shall be considered one and the same agreement,and shall
become binding when one or more counterparts have been signed by Landlord and Tenant and delivered to each of
them.
9. Applicable Law. This Amendment No. 3 and all rights and liabilities of the parties hereto with
respect to the Lease Agreement shall be governed by the laws of the State of Texas.
WITNESS THE EXECUTION hereof as of the date first above written.
•
h - 11OC7Q6
Landlord:City of Pearland,Texas
By: L,
Nam •Jo ranson
Title: eputy City Manager
Tenant: University of Houston System
By: Reni.aa%Dl-ei-
Name: Renu Khator,Ph.D.
Title:Chancellor/President
APPROVED AS TO FORM BY:
CI--cg/-920/C/
0 F THE GENERAL COUNSEL
UNIVERSITY OF HOUSTON SYSTEM
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