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VIRGIL PHILLIPS FARM PROPERTY LEASE This VIRGIL PHILLIPS FARM PROPERTY LEASE (hereinafter "Lease") is made as of the !?"day " , 2000 by and between City of Moscow, a I ' municipal corporation of the State of Idaho, (hereinafter referred to as "Lessor"), and Latah County, Idaho (hereinafter referred to as "Lessee"); RECITALS WHEREAS, Lessor is the owner of the premises described below, of which some portion is subject to a testamentary bequest that the real property be used "for the benefit and use of the children of Moscow, Idaho for recreation purposes"; and WHEREAS, Lessor desires to lease the premises to Lessee "for the benefit and use of the children of Moscow, Idaho for recreation purposes"; and WHEREAS, Lessor wishes to insure that any development proposed by Lessee is in conformance with recognized park development standards and guidelines; and WHEREAS, Lessee, being fully aware of the said restrictions upon the use of the premises pursuant to the testamentary bequest, desires to lease said premises for the use allowed thereby; and WHEREAS, Lessor and Lessee represent that there exists no prohibition or encumbrance on the premises or of their authority which would prevent such a lease to Lessee for such stated purposes; and WHEREAS, the parties desire to enter into a lease agreement defining their rights. duties and liabilities relating to the premises; LEASE Page 1 ---PAGE BREAK--- NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: I. SUBJECT AND PURPOSE Lessor leases, demises and lets, subject to the conditions and terms hereinafter set forth, land located in the County of Latah, State of Idaho commonly known as the Virgil Phillips Farm Property, and more particularly described as follows: Northwest quarter of Section 18, Township 40, North Range 5, west Boise Meridian (less highway). to Lessee for Lessee's use for the benefit and use of the children of Moscow, Idaho for recreation purposes as further defined and as granted by this Lease. Lessee shall not use or allow the premises to be used for any other or for any unlawful purposes. It is specifically agreed that the relationship between the parties is solely that of lessor and lessee. 2. TERM Lessor leases the above-described premises for the initial term of ten (I 0) years beginning on the date of execution of this Lease. 3. TERM EXTENSIONS Lessee may extend this Lease for up to two successive terms of ten (I 0) years each. For each such extension Lessor must receive Lessee's notice to renew not less than ninety (90) days prior to the expiration of the current term. During any extension of this Lease, Lessor and Lessee shall be subject to all conditions contained in this Lease unless modified pursuant to paragraph 23 of this Lease. LEASE Page 2 ---PAGE BREAK--- 4. PRELIMINARY REQUIREMENTS Prior to the commencement of any alterations, additions or improvements, Lessee shall submit for approval by Lessor a document (to be known as the "Virgil Phillips Farm Property Master Plan") which contains at least the following elements: A. A statement which encompasses the goals and objectives for the development of the premises. B. A brief discussion of the potential users and beneficiaries for whom the premises is being developed. C. An analysis of the premises which documents material and man made features, neighboring land uses, and which identifies portions of the premises which arc suitable for development. D. A plan which depicts all proposed features of development and land uses of thc premises. 5. ALTERATIONS, ADDITIONS AND IMPROVEMENTS For the purposes of this Agreement, capital alterations, additions and/or improvements shall be defined as those alterations, additions and improvements relating to, but not limited to, buildings, sheds, shops, wells, utility services, roads, houses, auditoriums, bunkhouses, parking lots, pathways, play areas, restrooms, maintenance areas and other similar recreational features and development. A. Subject to the limitation that no substantial portion of the demised premises shall be altered, demolished or removed by Lessee without the prior written consent of Lessor, Lessee may at any time during the lease term, subject to the conditions LEASE Page 3 ---PAGE BREAK--- set forth in this Lease and at its own expense, make alterations, additions or improvements in and to the demised premises. Any work covered under this section shall be performed in a workmanlike manner and shall not impair or lessen the value of the premises, create additional liability for Lessor. Where such improvements are included within the Virgil Phillips Farm Property Master Plan under paragraph 4 of this Lease or are approved by Moscow Director of Parks and Recreation, or the Director's representative, Lessor, as Owner, agrees to sign permits proposed by Lessee for improvements to the premises during the term of this Lease. B. Conditions with respect to alterations, additions or improvements are as follows: Before commencement of any work, all plans and specifications shall be filed with and approved by all governmental departments or authorities having jurisdiction and any public utility company having an interest therein, and all work shall be done in accordance with requirements of relevant regulations. Lessee shall, without cost to Lessor, and where required by law, require any and all contractors, including subcontractors, to furnish a performance bond written by a surety licensed to do business in the State ofldaho in an amount equal to the estimated cost of the work, guaranteeing the completion of work, free and clear of liens, encumbrances and security interests, according to the approved plans and specifications. C. All capital alterations, additions and improvements on, of, or in the demised premises at the commencement of the term, and all alterations, additions and improvements which are designed to be permanent which may be erected or installed LEASE Page 4 ---PAGE BREAK--- during the term, shall become part of the demised premises and the sole property of the Lessor at termination of the Lease, including any extension(s) in accordance with the terms and conditions contained in the Lease. D. Lessee agrees that it shall, at the termination of this Lease, restore the demised premises to its condition as it existed at the commencement of this Lease, unless such other condition is or has been approved by Lessor. Lessee agrees that it shall, at the termination of this Lease, peaceably and quietly surrender and deliver the demised premises to Lessor free of sub-tenancies and further surrender and deliver all buildings, additions and improvements constructed or placed thereon by Lessee in good condition and repair, reasonable wear and tear excepted. Capital improvements and alterations shall not be removed without Lessor's prior written consent and shall remain as part of the demised premises. 6. COMPENSATION FOR PERMANENT IMPROVEMENTS BY LESSEE A. If this Lease is terminated by the sole decision of Lessor and not because of Lessee's default or breach, Lessor shall pay for Lessee's costs of capital improvements to the demised premises as provided herein. Such payment by Lessor shall be figured at the time of termination by amortizing Lessee's total capital costs for the improvements over a period of twenty (20) years from the date of the improvement. Payment by Lessor shall be made within three budget cycles from the time of Lease termination. B. If this Lease is terminated because of Lessee's default or breach, or by the mutual agreement of Lessor and Lessee, Lessor shall not pay Lessee for the cost of any permanent improvements on or to the demised premises. LEASE Page 5 ---PAGE BREAK--- 7. REPAIRS AND MAINTENANCE Lessee shall, at all times during the Lease and at its own cost and expense, repair, replace and maintain in a good, safe and substantial condition, all of the leased premises including the roads, driveways and buildings including, but not limited to, the interior, exterior and roof, and any improvements, additions and alterations thereto, and shall prevent waste, damage or injury to the demised premises and persons using or occupying the same. The condition of the premises shall be determined by mutual agreement by Lessor and Lessee following a joint tour of the property and documentation of condition at the commencement of the lease term. 8. CROPS A. If Lessee determines to plant any crop, Lessee agrees and covenants that it will crop and cultivate any portion of the demised premises in a good, skillful and workmanlike manner, and will not commit or permit any stripping, removal or waste of the premises. B. Lessee further agrees and covenants to furnish and pay all expenses of conducting the cropping and cultivation of the demised premises in such manner and shall indemnify and hold harmless Lessor therefrom. C. Lessee further agrees to control the growth of noxious weeds, including all expenses pertaining to such control. D. Lessee agrees and covenants to take all actions necessary to be eligible for the production flexibility contract for the demised premises. Lessee shall notify Lessor upon notification of Lessee by the contracting agency that the production flexibility contract is in jeopardy. Such notice shall be tendered to the Lessor within seven days LEASE Page 6 ---PAGE BREAK--- of receipt of such notice by Lessee. Proceeds from any production flexibility contract shall be paid to Lessee. 9. TIMBER Notwithstanding other provisions of this Lease, Lessee shall have no right to harvest, destroy, damage or remove in any way the standing timber upon said demised premises without approval of Stewardship Plan for Virgil Phillips Farm Property or without prior written permission of Lessor. Lessee shall not permit waste or unnecessary destruction of timber and shall employ generally accepted timber management practices when following the approved Stewardship Plan for Virgil Phillips Farm Property. All proceeds pursuant to the approved Stewardship Plan for Virgil Phillips Farm Property shall be expended exclusively by Lessee to directly benefit the demised premises. 10. TAXES AND PERMITS Lessee shall pay on or before the last day on which payment may be made without penalty or interest when applicable, all taxes, assessments or other governmental charges including permit fees that shall or may during the Lease term legally be imposed on, or arise in connection with the use of, the demised premises or any part thereof, if any. Lessor shall cause all statements therefor to be delivered directly to Lessee or shall deliver the same to Lessee immediately upon receipt. Lessee shall pay all taxes legally assessed in lieu of or in addition to the foregoing under all present or future laws of all governmental authorities whatsoever. Lessee shall have the right to apply for the conversion of any special assessment for local improvements in order to cause the same to be payable in installments, and on the conversion Lessee shall be obligated to pay only those installments that may become due during the Lease. Lessee shall, within ten (1 0) LEASE Page 7 ---PAGE BREAK--- days after the time provided for the payment of any tax or other governmental charge by Lessee, produce and exhibit to Lessor satisfactory evidence of the payment. 11. UTILITIES All applications and connections for necessary utility services on the demised premises shall be made in the name of Lessee only, and Lessee shall be solely liable for utility charges as they become due including access, which shall include, without limitation, the cost of providing utilities to said premises. 12. INSURANCE A. Lessee shall maintain such liability and property damage insurance, including general, personal, bodily injury, products, fire, automobile and property liability insurance, as will protect Lessor from claims for damages because of bodily injury, including death, or damages because of injuries to or as, destruction or loss of use of property, which may arise from operations under this Lease whether such operations be by Lessee or their agents or anyone directly or indirectly employed or controlled by them. B. Lessee shall provide general, fire, bodily injury, and property damage insurance coverage for a minimum of one million dollars ($1,000,000) per accident or event. C. Insurance provided under this Lease shall be in an amount sufficient to prevent Lessor and Lessee from becoming co-insurers under the provision of applicable policies of insurance, but in any event, in an amount not less than one hundred percent 00%) of the full insurable value of the demised premises for property loss. All insurance required shall be maintained in full force and effect and shall be maintained at Lessee's expense until this Lease, or any part thereof, terminates. LEASE Page 8 ---PAGE BREAK--- D. Lessor shall be named as an additional insured on Lessee's policy(ies) for activities contemplated by this Lease. All insurance policies shall require thirty (30) days written notice to Lessor by registered mail of any cancellation or change affecting any insurance interest or coverage. E. Certificates of such insurance with additional insured endorsement shall be provided to the Lessor contemporaneously with the execution and delivery of this Lease. In addition, Lessee agrees to notifY Lessor in writing as soon as practicable in the event of a notice of an injury or a claim is received which involves either party to this Lease. F. Nothing contained herein shall limit the liability of the Lessor or Lessee for their own willful or grossly negligent acts. 13. UNLAWFUL OR DANGEROUS ACTIVITY Lessee shall neither use nor occupy the demised premises or any part thereof for any unlawful or disreputable purpose nor operate or conduct its activities in a manner constituting a nuisance of any kind. Lessee shall immediately, upon discovery of any unlawful or disreputable use, take action to halt such activity. By executing this Lease, Lessor does not admit or accept any liability or responsibility for any pre-existing& or latent conditions or problems of any kind or nature associated with the demised premises. Lessee specifically accepts the condition of the premises as is, with no warranties or representations of any kind. Lessee further specifically agrees that its use of the premises shall be at Lessee's own risk, and that Lessor accepts no responsibility therefor. LEASE Page 9 ---PAGE BREAK--- During the term of this Lease, or any extension or renewal thereof, Lessee represents that it has not and that it shall not create or permit any condition on the premises which presents an unreasonable risk of damage or injury to human health or to the environment or which would constitute a violation of any statute, regulation or order relating to the protection of health or the environment. Lessor shall have the right, but not the duty, to enter upon the premises from time to time as set forth below to inspect the premises. Lessor may enter the premises without prior notice. Lessor shall conduct any such inspections so as to minimize interference with Lessee's activities. The provisions of this paragraph shall survive the termination of this Lease. 14. INDEMNITY Lessee shall indemnify Lessor against all expenses, liabilities and claims of every kind, including reasonable attorney's fees, by or on behalf of any person or entity arising out of either a failure by Lessee to perform any of the terms or conditions of this Lease, any injury or damage happening on or about the demised premises, excepting any injury or damage resulting, in whole or in part from Lessor's intentional or negligent act or omission, failure to comply with any law of any governmental authority, or any mechanic's lien or security interest filed against the demised premises or equipment, materials or alterations of buildings or improvements thereon, excluding those created by Lessor. 15. DEFAUI" T OR BREACH Each of the following events shall constitute a default or breach of this Lease: A. If Lessee shall fail to pay Lessor any rent or additional rent when such rent LEASE Page 10 ---PAGE BREAK--- shall become due and shall not make the payment within thirty (30) days after notice thereof by Lessor to Lessee. B. If Lessee shall fail to perform or comply with any of the conditions of this Lease and if the nonperformance shall continue for a period of thirty (30) days after notice thereof by Lessor to Lessee or, if the performance cannot be reasonably had within the thirty (30) day period, Lessee shall not in good faith have commenced performance within the thirty (30) day period and shall not diligently proceed to completion of performance. C. If Lessee shall vacate or abandon the demised premises, as evidenced by Lessee's cessation of substantial activities for a period of three months. D. If this Lease or the leasehold estate of the Lessee hereunder shall be transferred to or shall pass to or devolve on any other entity, person or party. E. If Lessee fails to take possession of the demised premises on the term commencement date. F. If Lessee fails to provide insurance as provided in Section 1 2 of this Lease or there is a lapse of insurance coverage required herein of any nature or for any period of time, no matter how short whether it is due to Lessee's action or inaction or the action of another. G. If Lessee's activities are not of a benefit and use of the children of Moscow, Idaho because of Lessee's failure to act pursuant to the terms of this Lease. The Parties agree that, if Lessee's activities are of a benefit and use of children in addition to those of Moscow, Idaho, provision of additional activities alone shall not constitute a breach of this Lease. LEASE Page 11 ---PAGE BREAK--- 16. EFFECT OF DEFAULT OR BREACH In the event of any default or breach hereunder, as set forth in Section 15. the rights of Lessor shall be as follows: A. Lessor shall have the right to cancel and terminate this Lease, as well as all of the right, title and interest of Lessee hereunder. Lessor shall act in good faith when determining whether to terminate this Lease. Thereafter, this Lease and the right, title and interest of Lessee hereunder, shall terminate in the same manner and with the same force and effect, as if the date fixed in the notice of cancellation and termination were the end of the term herein originally determined. Lessee's liability for acts or omissions during the term of this Lease shall not be affected by any default under this paragraph !6.A. B. Upon default, Lessor may re-enter the premises immediately following thirty (30) days prior written notice to Lessee and remove the property and personnel of Lessee, and store the property in a public warehouse or at a place selected by Lessor, at the expense of Lessee. If such property is not collected by Lessee from Lessor within sixty (60) days following its removal by Lessor from the premises, Lessor and Lessee agree that Lessor may dispose of it according to Moscow City Code 10-8-2. 17. DESTRUCTION OF PREMISES In the event of a partial destruction of the premises during the term from any cause within Lessee's control, Lessee shall, at the option of the Lessor, forthwith repair the same at Lessee's expense. Should Lessee fail to make such repairs upon such direction of Lessor, Lessor retains the right to declare a breach pursuant to Section l 3, and shall be entitled to terminate this Lease. LEASE Page 12 ---PAGE BREAK--- 18. CONDEMNATION Rights and duties in the event of condemnation are as follows: A. If the whole of the demised premises shall be taken or condemned by any competent authority for any public or quasi-public use or purpose, this Lease shall cease and terminate as of the date on which title shall vest thereby in that authority. B. In the event of any taking or condemnation in whole or in part, the resulting award of consequential damages shall be awarded pro rata to Lessor and to Lessee for any of Lessee's capital improvements (as defined in paragraph 5 of this Agreement) on such condemned portion. Such pro rata share shall consider the cost of Lessee's capital improvements on the condemned portion and the time remaining on the most current term of this Lease. 19. EASEMENTS OR ENCUMBRANCES The parties shall be bound by all existing easements and encumbrances now of record relating to the demised premises. Lessee shall have no authority to enter into or to execute any easements or encumbrances, affecting the demised premises. Lessor shall provide to Lessee all existing easements and encumbrances prior to the effective date of this Lease. 20. QUIET ENJOYMENT Lessor warrants that Lessee shall be granted peaceable and quiet enjoyment of the demised premises free from any eviction or interference by Lessor if Lessee fully performs the terms and conditions of this Lease. LEASE Page 13 ---PAGE BREAK--- 21. WAIVERS The failure of Lessor to insist on a strict performance of any of the terms and conditions hereof shall not be deemed a waiver of the rights or remedies that Lessor may have regarding that specific instance, and shall not be deemed a waiver of any other or subsequent breach or default in any terms and conditions of this Lease. 22. NOTICE All notices to be given with respect to this Lease shall be in writing. Each notice shall be sent by registered or certified mail, postage prepaid and return receipt requested, to the party to be notified at the address set forth herein or at such other address as either party may from time to time designate in writing. Every notice and other writing or document which shall or may be given shall be deemed to have been given at the time it is deposited in the United States mail in the manner prescribed herein. Nothing contained herein shall be construed to preclude personal service of any notice in tbe manner prescribed for personal service of a summons or other legal process. Addresses: Lessor: Director, Parks & Recreation Dept. City of Moscow 206 East Third Street P.O. Box 9203 Moscow, Idaho 83843 23. TERMINATION Lessee: Latah County, Idaho, Board of County Commissioners 5th and Van Buren P 0 Box 8068 Moscow, Idaho 83843 This Lease may be terminated without cause by either party upon one hundred eighty (180) day's prior written notice to the other party at any time following the initial term or any extension thereof. Following such termination, Lessee shall peaceably and LEASE Page 14 ---PAGE BREAK--- quietly surrender and deliver the demised premises to Lessor free of sub-tenancies and further surrender and deliver all buildings, additions and improvements constructed or placed thereon by Lessee in good condition and repair, reasonable wear and tear excepted 24. AMENDMENTS TO BE IN WRITING This Lease contains the entire agreement between the parties regarding the demised premises and cannot be changed or terminated except by a written instrument subsequently executed by the parties hereto. This Lease and the terms and conditions hereof apply to and are binding on the legal representatives, successors and assigns of both parties. 25. APPLICABLE LAW AND VENUE/ATTOR.t"'EY'S FEES/COSTS This Lease shall be governed by and construed in accordance with the laws of the State of Idaho, and venue shall be in the District Court of Latah County. In any suit or action brought to enforce any of the covenants of this Lease, the prevailing party shall be entitled to an award of its reasonable attorney's fees and costs from the non-prevailing party. 26. ANNUAl, REPORT Lessee shall provide an annual report to the City Council of the City of Moscow on or before the first regular meeting of the City Council in the month of September of each year this Lease is in effect. This report shall detail the current activities of the Lessee upon the demised premises, including any improvements, modifications or additions to the demised premises to be made in the future. The report shall also detail the number of youths involved in projects, activities conducted by Lessee upon the demised premises, and the nature and scope of such projects. Lessee's report shall LEASE Page 15 ---PAGE BREAK--- include information during the reporting period which substantiates that the demised premises were used for the benefit and use of the children of Moscow, Idaho for recreation purposes. Lessee shall also provide relevant information in support of the purposes of this Lease, including financial data in support of any proposed improvements, alterations or modifications to the demised premises and information substantiating compliance with approved Stewardship Plan for Virgil Phillips Farm Property. 27. TIME IS OF THE ESSENCE Time is of the essence in all provisions of this Lease. 28. MUTUAL PREPARATION It is specifically agreed between the parties that each party has assisted in the preparation and negotiation of this Lease, and in the event of litigation concerning the provisions hereof, neither party shall assert, as a defense to compliance herewith, that the other party solely authored such Lease. 29. HEADINGS IRRELEVANT In the interpretation of this Lease, the headings are provided for convenience only, and are not deemed to be a part of the terms of this Lease. 30. NO PARTNERSHIP OF LESSOR AND LESSEE It is not the intention of the Lessor or Lessee to enter into a partnership relationship in any form or for any purpose. This Lease shall not be construed as giving rise to any such partnership or any relationship other than that of Lessor and Lessee. Lessee agrees and covenants that it shall not represent, convey or conduct itself or its activities in such a way, expressly, impliedly or implicitly, to third parties that its relationship with Lessor is other than of landlord and tenant. The required reporting by LEASE Page 16 ---PAGE BREAK--- the Lessee and oversight of the demised premises by Lessor shall not be construed in any way other than to ensure that Lessee is using the land lawfully and responsibly. 31. NO INTENT TO ALTER BEQUEST Nothing in this Lease is intended to nor shall be interpreted to alter in any way Lessor's obligations, responsibilities, fiduciary duties and/or other duties arising out of the testamentary bequest of Virgil Phillips to City of Moscow of the real property described herein, nor shall this Lease be interpreted to change, in any way, Lessor's intent to use the Virgil Phillips Farm Property for the benefit and use of the children of Moscow, Idaho for recreation purposes. IN WITNESS WHEREOF, the parties have executed this Lease at Moscow, Idaho, the day and year first above written. LESSEE: LATAH COUNTY, IDAHO By: t)::Jbft1 Loreca l;stauber, Chair LESSOR: CITY OF MOSCOW Agreements\PhillipsPropertyLease(04-2000)\pm LEASE Page 17 ---PAGE BREAK--- LAT All COUNTY BOARD OF COMMISSIONERS MOTION AND ORDER P.O. Box 8068 522 S. Adams Moscow, ID 83843 (208) 882-8580 FAX: (208) 883-2280 Samuel G. Duncan, Commissioner mell, Commissioner ATTEST: DATE: ABSTAIN