HomeMy WebLinkAbout1992-160 Ski A Lease
MT. ASHLAND SKI AREA LEASE
This Lease Agreement is made and entered into this 7 day of July, 1992
In consideration of the mutual promises set forth herein, the Lessor and Lessee agree
as follows:
1. Term. The initial term of this Lease shall begin on the .date indicated above and
shall terminate on June 30, 2017. At any time on or before June 30, 2017, Lessee
shall have the dght, if the Lease has not theretofore been terminated by either party
and it Lessee is not then in default with respect to any obligation under this
Agreement, to notify Lessor in writing that the term of the Lease shall be ext, en.ded for
an additional twenty-five (25) years, until June 30, 2042, in which case the Lea~e term
shall be so extended. Notwithstanding the two preceding sentences, Lessee's
leasehold rights under this Agreement shall terminate upon the expiration or other
termination of Lessor's dghts under the Permit.
2. Definitions: Description of Leased Property: Permit: and Lease Agreement.
2.1. Definitions: Description of Leased Property. As used in this Agreement,
the following terms shall have the indicated meanings:
2.1.1. "Permit" shall mean and refer to that certain United States
Department of Agriculture Forest Service Spedal Use Permit which is attached to this
Agreement as Exhibit "A", and any subsequent permit which may be issued as a
replacement or renewal of the permit attached hereto as Exhibit "A".
2.1,2. "Permit Property" shall mean and refer to that certain real
property located on Mt. Ashland, in Jackson County, Oregon which is described in
and is subject to the Permit, together with all improvements owned by Lessor and now
or hereafter constructed or existing thereon.
2.1.3. "Equipment" shall mean and refer to all personal property,
fixtures, furnishings, inventory and items of equipment owned by Lessor which are
now attached to or located on or about the Permit Property, including but not limited
to the items of personal property identified on Exhibit "B" attached hereto. As soon as
practicable after the execution of this Agreement, Lessor and Lessee shall cause to be
taken a physical inventory of all personal property, fixtures, furnishings, inventory and
items of equipment owned by Lessor which are now attached to or located on or
about the Permit Property, and shall amend Exhibit "B" to conform with that physical
inventory, it being the intention of the parties that this Agreement apply only to those
items of personal property verffied by the physical inventory and listed on Exhibit "B"
as so amended.
2.1.4. "Leased Property" shall mean and refer to the Permit Property
and the Equipment.
2.1.5. "Index" shall refer to the following index published by the Bureau
of Labor Statistics of the United States Department of Labor: Consumer Price Index,
All Urban Consumers (CPI-U), U.S. City Average, CPI--AII Items ("standard reference
base period" 1982-84 = 100). "Base CPI Index Figure" shall refer to the Index
number indicated for the month of January, 1992, and the "CPI Index FIgure" for any
other month shall refer to the Index number for that month. If the "Index" is no longer
being published as of a particular date, then the "CPI Index Figure" for that date shall
be the figure reported in the U.S. Department of Labor's most recent comprehensive
official index then in use and most nearly answering the description of the Index (or, if
the U.S. Department of Labor is not then publishing any such similar index, shall be
determined under another comparable, authoritative, generally recognized index to be
selected by mutual agreement of Lessor and Lessee). If the Index is calculLate.d from a
base differant from the base 1982-84 = 100, then the figures to be used in calCulating
any adjustment mandated under this Agreement first shall be converted (if possible,
under a formula supplied by the Bureau of Labor Statistics of the U.S. Department of
Labor) to account for that difference.
2.1.6. For purposes of this Agreement, the "Minimum Uquidatlon
Value" for the Leased Property with respect to any particular calendar year shall be
determined as follows:
2.1.6.1. With respect to the 1992 calendar year, the
"Minimum Uquidation Value" shall be $200,000.00.
2.1.6.2. With respect to the 1993 calendar year and each
subsequent calendar year throughout the Lease term, the "Minimum Liquidation Value"
for a particular calendar year shall be determined by multiplying $200,000.00 by a
fraction, the numerator of which is the CPI Index Figure for the month of January of
that subject calendar year, and the denominator of which is the Base CPI Index
Figure. To illustrate the preceding sentence, the "Minimum Liquidation Value" for the
1998 calendar year will be equal to the product determined by multiplying $200,000.00
by a fraction, the numerator of which is the CPI Index Figure for the month of January,
1998, and the denominator of which is the Base CPI Index Figure.
2.1.6.3. Notwithstanding the provisions of Paragraph 2.1.6.2, the
Minimum Liquidation Value of the Leased Property shall never decrease, regardless of
any decline in the Index.
2.1.7. "Ski Area Trust Fund" shall mean and refer to a segregated trust
fund which shall be held, invested and maintained by the City of Ashland, as trustee,
and shall be administered and distributed for the benefit of the Lessee and the Lessor
in accordance with the provisions of this Agreement. The initial principal of the Ski
Area Trust Fund shall be contributed to the Fund by the City of Ashland on the
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effective date of this Agreement, and shall consist of those assets which are identified
on Exhibit "C" attached to this Agreement.
2.2. Permit. The terms, covenants, provisions and conditions of the Permit are
incorporated into this Lease and Lessee assumes responsibility for payment and
performance of all obligations of the City of Ashland under the Permit. Lessee agrees
to hold harmless, defend and indemni~ Lessor from and against any loss, clai.m or
liability suffered by or asserted against Lessor as a result of Lessee's failure to fully
pay and perform the obligations of the Permit.
2.3. Lease Agreement. Lessor hereby leases the Leased Property to Lessee,
and Lessee leases the Leased Property from Lessor, subject to all of the terms and
conditions contained in this Agreement.
2.3.1. Lessee is thoroughly familiar with the Leased Property and its
condition and state of repair, and agrees to take the Leased Property in its brdsent
condition, and specifically agrees that all of the Leased Property is in an acceptable
condition for the purpose for which leased. Lessor makes no warranty of
merchantability or fitness of the Leased Property for any purpose. Neither Lessor nor
its agents have made any representations with respect to the Leased Property except
as expressly set forth in this Lease, and no rights are acquired by Lessee by
implication in fact or in law, or otherwise, except as expressly sat forth in this Lease.
Taking possession of the Leased Property shall be conclusive evidence that Lessee
accepts the Leased Property "as is" and "with any and all faults".
3. Use of Leased Property. Lessee shall have sole and exclusive possession and use
of the Leased Property during the entire term of this Lease for the purpose of
constructing, improving, maintaining and operating year-round educational and/or
recreational facilities for the bener~ of the general public (including but not limited to a
ski area and/or winter sports resort).
4. Consideration. Lessee is a not-for-profit corporation, all assets of which will
devolve to Lessor in the event of Lessee's dissolution and liquidation. In addition,
Lessee has assisted Lessor in obtaining the funds necessary to purchase the Leased
Property. Under these circumstances the parties have determined that a lease
payment of $1.00 per year is full and adequate consideration for this Lease.
5. T"~le to Assets. Throughout the entire Lease term the Permit Property and the
Equipment shall be and remain the property of the Lessor.
5.1. All buildings, structures, facilities and improvements of whatever kind and
nature erecied upon or made to the Permit Property by Lessee during the term of this
Lease, together with any and all additions or alterations thereto and any permanent
fixtures now or hereafter affixed or attached thereto, shall upon termination of this
Lease become the property of Lessor.
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5.2 Lessor shall not acquire any ownership, title or interest in any machinery,
equipment, appurtenance or fixture hereinafter placed by Lessee in or upon the Permit
Property which is not so affixed as to become an integral part of the buildings
structures, facilities or improvements located on the Permit Property; provided,
however, that if any machinery, equipment, appurtenance or fixture replaces a portion
of the Permit Property or the Equipment or serves a similar function to the Permit
Property or the Equipment, or is necessary to preserve the value specified in.
Paragraph 7.1, then such machinery, equipment, appurtenance or fixture shall become
and remain the property of the Lessor.
6. Alterations. Lessee shall have the right to make changes to and alterations of the
Leased Property, subject to the following conditions:
6.1. Except as herein provided, Lessee may at Lessee's expense make such
alterations, improvements, additions and changes to the Leased Property as it may
deem necessary or expedient in the operation of the Leased Property, prov~de*d that
Lessee, without the written consent of Lessor (which consent shall not be
unreasonably withheld) shall not tear down or materially demolish any of the
improvements upon the Permit Property or make any material change or alteration in
such improvements, which, when completed, would substantially diminish the value or
substantially alter the use of the Leased Property.
6.2. At all times when any change or alteration is in progress, there shall be
maintained, at Lessee's expense, workers' compensation insurance in accordance
with laws covedng all persons employed in connection with the change or alteration,
and general liability insurance in accordance with laws covering all persons employed
in connection with the change or alteration, and general liability insurance for the
mutual benef~ of Lessee and Lessor expressly covering the additional hazards due to
the change or alteration.
7. Repair and Maintenance. Lessee shall not cause or permit any waste, damage or
injury to the Leased Property. Lessee, at its sole expense shall keep the Leased
Property as now or hereafter constituted (with all improvements made thereto) clean
and in good condition (reasonable wear and tear excepted) and shall make all repairs,
including all structural repairs, necessary to maintain the Leased Propen'y. All repairs,
replacements, and renewals shall be at least equal in quality of materials and
workmanship to that originally existing in the Leased Property. Lessor shall in no
event be required to make any repair, alteration, or improvement to the Leased
Property. Any fixture, equipment or materials replaced by Lessee shall belong to
Lessor, and all proceeds from the disposition thereof shall belong to Lessor. Lessee
shall indemnify Lessor against all costs, expenses, liabilities, losses, damages, suits,
claims and demands because of Lessee's failure to comply with the requirements of
this Paragraph 7, and Lessee shall not call upon Lessor for any disbursement or
outlay whatsoever in connection therewith, and hereby expressly releases and
discharges Lessor of and from all liability therefor.
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7.1. Lessee shall perform its obligations for maintenance and repair, shall make
improvements to the Permit Property, and shall replace portions of the Equipment, as
required to ensure that the actual liquidation value of the Leased Property is not less
than the Minimum Uquidation Value of the Leased Property.
7.1.1. Lessee shall not be required under this Paragraph 7.1 to replace
any portions of the Equipment which are not needed in Lessee's operations,
except that this provision shall not operate as a waiver of Lessee's obligation to
maintain the actual liquidation value of the Leased Property at a level not less
than the Minimum Uquidation Value of the Leased Property. If for any reason
the actual liquidation value of the Leased Property declines below the Minimum
Liquidation Value of the Leased Property, then Lessee shall deposit into the Ski
Area Trust Fund a sum of money ("the Restoration Sum") equal to the
difference between the actual liquidation value of the Leased Property and the
Minimum Uquidation Value of the Leased Property. The Restoration Sum shall
be so deposited within ninety days after delivery to. Lessee from Les~or~of
written demand therefor. If Lessee disputes the Lessor's determination of
deficiency, then Lessor shall proceed as provided in Paragraph 7.1.3. Except
as provided in Paragraph 7.1.2 or as otherwise agreed in writing by Lessor and
Lessee, amounts deposited by Lessee into the Ski Area Trust Fund pursuant to
this Paragraph shall be used only for costs of restoration of the Permit Property
as required under the Permit, and the trustee shall not use or permit the use of
the assets of the Ski Area Trust Fund for any other purpose.
7.1.2. In recognition and support of Lessee's intention to provide
educational and recreational programs to residents of the City of Ashland and
to operate the Leased Property in a manner which will stimulate the economy of
the City, and in recognition of Lessee's inability to commence ski area
operations for the 1992 - 1993 ski season without financial support from the
City, Lessor authorizes the trustee to pay and distribute to Lessee, within 30
days after the effective date of this Agreement, the entire pdncipel of the Ski
Area Trust Fund. During 1993 and all subsequent years throughout the Lease
term, the trustee shall distribute to Lessee, promptly upon demand from
Lessee, all amounts of principal theretofore deposited by the Lessee to the Ski
Area Trust Fund pursuant to Paragraph 7.1.1, but only if and to the extent that
the sum of the value of the assets remaining in the Ski Area Trust Fund (after
making that withdrawal) plus the actual liquidation value of the Leased Property
at that time exceeds the Minimum Uquidation Value of the Leased Property at
that time. Lessee shall not under any circumstances be entitled to receive any
income earned with respect to the Ski Area Trust Fund. All income earned with
resp~ect to the Ski Area Trust Fund shall be credited to (and shall be deemed
for all purposes to have been earned by) the City of Ashland, but shall be held
and retained by the trustee in the Ski Area Trust Fund for use in connection
with the eventual restoration of the Permit Property. All income and principal
remaining in the Ski Area Trust Fund upon termination of the Lease shall be
distributed by the trustee to the City of Ashland.
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7.1.3. Whenever Lessor reasonably determines that the sum of the
actual liquidation value of the Leased Property plus the amounts then held by
the City of Ashland in the Ski Area Trust Fund is less than the Minimum
Liquidation Value of the Leased Property, Lessor may request an appraisal of
the Leased Property by an independent qualified appraiser chosen by Lessee
from a list of not fewer than three submitted by Lessor in conjunction with the
request. If Lessee does not make the choice within five days, Lessor may do
so. The appraiser shall have access to all of Lessee's records as necessary for
the appraisal and shall take such steps as the appraiser deems necessary to
make a competent appraisal. The appraiser shall report to the parties within 30
days after being chosen. The report shall be final and binding upon both
parties. The cost of the appraisal shall be borne by the Lessee if the sum of
the actual liquidation value of the Leased Property plus the amounts then held
by the City of Ashland in the Ski Area Trust Fund is less than 110% of the
Minimum Liquidation Value of the Leased Property. Otherwise the cg. st .of the
appraisal shall be borne by the Lessor. '
7.2. Lessee shall be solely responsible for any improvements, alterations or
repairs to the Leased Property required pursuant to the Americans with Disabilities Act.
8. Utilities. Lessee shall be responsible for, and shall pay all charges for janitodal
services, garbage removal, gas, electricity, light, heat, power, telephone, sewage
disposal and domestic water used, rendered or supplied upon or in connection with
the Leased Property.
9. Fire and casualty insurance. Lessee covenants and agrees to keep the Leased
Property insured against loss by fire with extended coverage endorsement, including
risk of loss resulting from collapse of the structures, lightning, vandalism and malicious
mischief. Such insurance policies shall at all times be maintained in force in an
amount equal to the full insurable replacement value of the premises and properties
insured. It is a condition o~ payment of such insurance premiums by Lessee that the
proceeds of any such insurance shall be applied to the repairing or restoration of the
property damaged whether the loss is partial or total. The City of Ashland shall be
named as an additional insured on such policies.
10. Liability insurance. Lessee shall procure, and during the term of this Lease shall
continue in force, at Lessee's cost, public liability and property damage insurance,
including ski operators liability coverage, issued by a responsible company with limits
of not less than $500,000 per occurrence (combined single limit for bodily injury and
property damage claims) or $500,000 per occurrence for bodily injury and $100,000
per occurrence for property damage. Such insurance shall cover all risks arising
directly or indirectly out of Lessee's activities on, or as a result of the condition of, the
Leased Property and shall protect Lessor and Lessee against all claims of third
persons. Certificates evidencing such insurance and bearing endorsements requiring
30 days written notice to Lessor prior to any change or cancellation shall be furnished
to Lessor. It is agreed that the Lessor shall not be liable to any third persons as a
result of the use of the Leased Property by the Lessee, its employees or agents, and
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the Lessee covenants and agrees to save the Lessor harmless from the claims of said
third persons by reason of the use of said premises by the Lessee herein.
11. Real property taxes. In the event any property subject to this Lease shall be
assessed for property taxes, such taxes shall be paid by the Lessee on or before the
15th day of November of the taxable year.
12. Default or breach. In the event the Lessee commits any default or braacffi of any
of the terms or conditions of this Agreement and fails or neglects to correct the same
within six months after notice thereof by the Lessor, then and in such event, the
Lessor shall have the dght to immediately expel the Lessee from the Leased Property
and declare this Lease terminated. In the event the Lessee fails to operate the Leased
Property as a ski area and/or winter recreation resort at any time during a period of
twelve consecutive months, except for war, catastrophe, natural causes (including but
not limited to lack of sufficient snow for raasonably profitable operations), or other
circumstances beyond the control of the Lessee, the Lessor shall have the ~ig~ to
immediately terminate this Lease.
13. Lessee Compliance with Environmental Laws.
13.1. Definition of "hazardous material". As used is this Paragraph, the term
"hazardous material" means any hazardous or toxic substance, material, or waste,
including, but not limited to, those substances, materials, and wastes listed in the
United States Department of Transportation Hazardous Materials Table (49 C.F.R. §
172.101) or by the United States Environmental Protection Agency as hazardous
substances (40 C.F.R. Part 302) and any amendments, ORS 466.567, 466.205,
466.640 and 468.790 and regulations of the Oregon State Department of
Environmental Quality, petroleum products and their derivatives, and such other
substances, materials and wastes as become regulated or subject to cleanup authority
under any environmental laws. Environmental laws means those laws cited in this
subparagraph.
13.2. Lessee's compliance with laws and permits. Lessee shall cause the
Leased Property and all operations conducted on the Leased Property (including
operations by any subtenants) to comply with all environmental laws.
13.3. Umitation on uses of hazardous materials. Lessee shall not use or allow
any agents, contractors or subtenants to use the Leased Property to generate,
manufacture, refine, transport, treat, store, handle, recycle, release or dispose of any
hazardous materials, other than as reasonably necessary for the operation of Lessee's
activities as.Contemplated under this Agreement.
13.4. Lessor's Rights. Lessor shall have the right to conduct reasonable
inspections and investigations of the Leased Property and the operations conducted
on the Leased Property at any time and from time to time, and Lessee shall cooperate
fully with Lessor during such inspections and investigations.
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13.5. Indemnification. Lessee agrees to defend (with counsel approved by
Lessor), fully indemnify, and hold entirely free and harmless Lessor from and against
all claims, judgments, damages, penalties, fines, costs, liabilities, or losses (including,
without limitation, diminution in value of the Leased Property, damages for the loss or
restriction on the use of rentable or usable space or of any amenity of the Leased
Property, damages arising from any adverse impact on marketing of space, sums paid
in settlement of claims, attorney fees, consultant fees, and expert fees) which arise
during or after the lease term and which are imposed on, or paid by or asserted
against Lessor by reason or on account of, or in connection with, or arising out of
Lessee's generation, manufacture, use, transportation, refinement, treatment, storage,
or disposal of hazardous materials, or any release of hazardous materials as a result
of Lessee's use or activities, or of Leesee's agents, contractors, or subtenants.
14. Umitation On Assignment Or Sublease By Lessee. Lessee shall not assign this
Lease or sublease any portion of the Leased Property without obtaining in each
instance the written consent in advance of Lessor, which consent shall not be ~vithheld
unreasonably, and which consent shall be deemed for all purposes to have been
given by Lessor if not expressly given or withheld within thirty (30) days after receipt
by Lessor of Lessee's wdtten request for that consent. In determining whether
consent is reasonable, Lessor may consider any and all relevant factors, including, but
not limited to, the financial stability of the proposed sublessee or assignee and the
extent to which the public interest is affected by the sublease or the assignment.
Consent by Lessor in any one instance shall not constitute a waiver or consent to any
subsequent instance.
15. Miscellaneous. Nothing contained in this Agreement shall create between the
parties hereto, or shall be relied upon by any other person as creating, any
relationship of partnership, association, joint venture, principal and agent, or otherwise.
The sole relationship of the parties hereto shall be that of landlord and tenant. There
are no oral agreements or representations between the parties hereto which affect this
Agreement, and this Agreement supersedes and cancels any and all previous
negotiations, arrangements, agreements, warranties, representations and
understandings, if any, between the parties. The paragraph headings set forth in this
Agreement are set forth for convenience purposes only, and do not in any way define,
limit or construe the contents of this Agreement. If any provision of this Agreement
shall be determined to be void by any court of competent jurisdiction, then that
determination shall not affect any other provisions of this Agreement, and all such
other provisions shall remain in full force and effect. It is the intention of the parties
that if any provision of this Agreement is capable of two constructions, only one of
which would render the provision valid, then the provision shall have the meaning
which renders it valid. If suit or action is instituted in connection with any controversy
arising out of this Agreement, the prevailing party in that suit or action or any appeal
therefrom shall be entitled to recover, in addition to any other relief, the sum which the
court may judge to be reasonable attorney fees. Any notice required or permitted
under this Agreement shall be deemed to have been given and delivered when
personally delivered or when deposited in the United States mail, as certified mail,
postage prepaid, and addressed to the last-known address of the party being
PAGE 8-MT. ASHLAND SKI AREA LEASE (p:daily\sklash\maa-ffd.lse)
provided with the notice. This Agreement shall inure to the benefit of and shall be
binding upon the successors, assigns, heirs and personal representatives of Lessor
and Lessee. This Lease Agreement is being executed in two counterparts, each of
which shall be an original, and both of which shall constitute a single instrument, when
signed by both of the parties. Waiver by either party of strict performance .of any of
the provisions of this Agreement shall not be a waiver of, and shall not prejudice the
party's right to subsequently require strict performance of, the same provision or any
other provision. The consent or approval of either party to any act by the other party
of a nature requiring consent or approval shall not be deemed to waive or render
unnecessary the consent to or approval of any subsequent similar act. This lease
shall be governed and performed in accordance with the laws of the state of Oregon.
Each of the parties hereby irrevocably submits to the jurisdiction of the courts of
Jackson County, Oregon, and agrees that any legal proceedings with respect to this
Agreement shall be filed and heard in the appropriate court in Jackson County,
Oregon.
16. Nondiscrimination. In connection with any operations of Lessee under this lease,
Lessee shall not discriminate against any employee or applicant for employment
because of race, color, religion, sex, national origin, age, or disability. Lessee shall
not discriminate by segregation or otherwise against any person on the basis or race,
color, religion, sex, national origin, age, or disability by curtailing or refusing to furnish
accommodations, facilities, services, or use prMleges offered to the public generally.
Lessee:
MT. ASHLAND ASSOCIATION
BY
Its
Lessor:
CITY OF ASHLAND
B~ ;Y~'/'~~
Nan Franklin, City Recorder
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