HomeMy WebLinkAboutContract 41235 h
CITY SECRETARY
CONTRACT NO.
LEASE AGREEMENT
This lease agreement("Lease") is made and entered into this,the to day of December,
2010, the ("Effective Date") hereof, at Fort Worth, Texas by and between 3741 SW Loop 820, LLC, a
Texas limited liability company ("Landlord"), and The City of Fort Worth, a Texas municipal
corporation, ("Tenant") acting by and through Fernando Costa, its duly authorized Assistant City
Manager. The term "Landlord" shall include the agents, representatives, employees, and contractors of
Landlord. The term "Tenant"shall include the agents, representatives, and employees of Tenant.
SECTION 1. Leased Premises. For and in consideration of the rental payments to be paid under this
Lease, Landlord leases to Tenant and Tenant leases from Landlord the improvements now situated and to
be constructed subsequent hereto located at 3741 SW Loop 820, Fort Worth, Texas 76162, such
improvements consisting of approximately 30,600 square feet, and more particularly described or
depicted in Exhibit"A", attached hereto and made apart hereof for all purposes (the "Leased Premises").
SECTION 2. Use of premises. The Leased Premises shall be used by Tenant as office space, court
space, or such other municipal use as may be desired by Tenant.
SECTION 3. Term.
(a) This Lease shall be for a period of ten (10) years commencing on the completion of the
Tenant Improvements (as defined in Section 5 below) ("Commencement Date") and terminating on the
date that is ten (10) years after the Commencement Date (the "Term"). Upon the establishment of the
actual Commencement Date, Landlord and Tenant shall execute a Commencement Date Memorandum in
the form set forth in Exhibit "B".
(b) Tenant and its employees, agents, contractors and suppliers shall have the right to enter
the Leased Premises prior to the Commencement Date to prepare the Leased Premises for Tenant's
occupancy. Tenant and each other person or entity who or which enters the Leased Premises before the
Commencement Date shall conduct itself so as to not unreasonably interfere with Landlord. Landlord
may revoke Tenant's rights under this Section upon twenty-four (24) hours written notice to Tenant if
Landlord determines that any such interference has been caused. Any prior entry shall be under all of the
terms of this Lease (other than the obligation to pay Rent)and at Tenant's sole risk. Landlord shall not be
liable in any way for personal injury, death or property damage (including damage to any personal
property which Tenant may bring into, or any work which Tenant may perform in, the Leased Premises)
which may occur in or about the Leased Premises by Tenant or such other person or entity as a result of
any prior entry.
SECTION 4. Rent.
(a) The base rent for the Term is $7.50 per square foot, for an annual base rent of$229,500
per year, payable in monthly installments of$19,125.00 ("Base Rent").
(b) Tenant shall pay, as additional rent, $0.50 per square foot per $100,000 of Tenant
Improvements, as hereinafter defined, completed by Landlord pursuant to Section 5 hereof("Additional
Rent"). The cost of the Tenant Improvements shall be verified by Landlord providing to Tenant copies of
invoices for all completed work and other documents necessary to demonstrate that such amounts were
actually paid, including without limitation, final lien waivers signed by the general contractors or
appropriate subcontractors and any other document or records reasonably necessary to verify costs
expended for the Tenant Improvements.
City of Fort Worth Lease Page 1
(c) The total rent to be paid by Tenant to Landlord shall be the combined total of the Base
Rent and the Additional Rent ("Total Rent"), and the Total Rent shall be memorialized in the
Commencement Date Memorandum.
(d) Tenant shall pay to Landlord a security deposit in the amount of$76,500.00 ("Security
Deposit") for the performance of Tenant's obligations hereunder. If, in Month 118 of the Term, Tenant
has fully complied with all provisions, covenants, and obligations required herein, the Security Deposit
shall be credited to the final installments of Total Rent.
(d) All rental payments shall be payable to Landlord at the location of notice set forth in
Section 17 of this Lease. Rent shall be paid to Landlord on the first date of each month thereafter. If the
Commencement Date is not the first day of a month, a prorated installment of monthly rent based on a 30
day month shall be paid for the fractional month during which the Commencement Date occurs or the
Lease terminates.
SECTION 5. Tenant Improvements.
(a) Landlord agrees to construct the Tenant Improvements pursuant to the terms of the Work
Letter attached hereto as Exhibit"C" and made apart hereof for all purposes.
(b) Notwithstanding anything contained herein or in the Work Letter to the contrary,
Landlord shall not be obligated to expend more than $1,500,000.00 (the "Maximum Sum") to complete
the Tenant Improvements. If Landlord is not able to Substantially Complete the Tenant Improvements or
to make the Leased Premises ready for occupancy for an amount equal to or less than the Maximum Sum,
then Landlord shall have the option to(i)terminate this Lease, in which case, neither party shall have any
further obligations hereunder, or (ii) complete the work. All sums expended in connection with the
Tenant Improvements shall be included in the calculation to determine the amount of Additional Rent to
be paid by Tenant.
(c) Within fifteen (15) business days after Tenant's receipt of written notice from Landlord
of completion of the Tenant Improvements,Tenant shall conduct a walk-through inspection of the Leased
Premises with Landlord and complete a punch list of items needing additional work. Other than the items
specified in the punch list, if any, and subject to Landlord's representations and warranties described
below, by taking possession of the Leased Premises, Tenant shall be deemed to have accepted the Leased
Premises in good, clean and completed condition and repair, subject to all applicable laws, codes and
ordinances. Any damage to the Leased Premises caused by Tenant's move-in shall be repaired or
corrected by Tenant, at its sole cost and expense. Landlord's contractor shall complete all punch-list
items within thirty (30) days after the walk-through inspection or as soon as practicable thereafter. Upon
completion of such punch-list items, Tenant shall approve or disapprove such completed items in writing
to Landlord. If Tenant fails to disapprove such items within twenty (20)business days of Tenant's receipt
of written notice from Landlord of completion, such items shall be deemed approved by Tenant. The
Leased Premises are accepted by Tenant in "as is" condition and configuration subject to any Landlord
obligation to perform work described in the attached Work Letter. BY TAKING POSSESSION OF THE
LEASED PREMISES, TENANT AGREES THAT THE LEASED PREMISES ARE IN GOOD ORDER
AND SATISFACTORY CONDITION, SUBJECT ONLY TO THE PUNCH-LIST ITEMS, AND
AGREES THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, BY LANDLORD REGARDING THE CONDITION OF THE LEASED PREMISES. FROM
AND AFTER THE DATE THAT TENANT TAKES POSSESSION OF THE LEASED PREMISES,
EXCLUDING ONLY THE PUNCH-LIST ITEMS AND THE LIMITED WARRANTY REGARDING
THE HVAC SYSTEM (AS SET FORTH IN SECTION 7), TENANT SHALL BE RESPONSIBLE FOR
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ALL MAINTENANCE AND REPAIR OBLIGATIONS RELATED TO THE LEASED PREMISES
AND FOR ENSURING THAT THE LEASED PREMISES ARE IN COMPLIANCE WITH ALL
APPLICABLE LAWS AND REGULATIONS.
(d) If Landlord makes the Leased Premises available to Tenant prior to the Commencement
Date for decorating, constructing, furnishing, and equipping the Leased Premises, this use will not create
a landlord-tenant relationship between the parties, and such use of the Leased Premises by Tenant shall
not be deemed an acceptance of the Leased Premises.
(e) Landlord will be deemed to have "Substantially Completed" Landlord's Work (as
defined in Exhibit "C") if Landlord has caused all of Landlord's Work to be substantially completed in
accordance with the Final Plans (as defined in Exhibit"C") and Landlord will have received a certificate
of occupancy with respect to the Leased Premises from the appropriate governmental authority with
jurisdiction over the Leased Premises allowing Tenant to occupy and use the Leased Premises as provided
in the Lease and Tenant can occupy and use the Leased Premises as provided in the Lease or complete
any improvements or changes to the Leased Premises to be made by Tenant hereunder without material
interference. In the event Landlord fails to complete or correct timely any items on the punch list which
is not in compliance with the Final Plans and is materially interfering with Tenant's ability to use the
Premises, Tenant may, after 30 days' prior notice to Landlord, complete or correct any such items and
Landlord will reimburse Tenant for the reasonable cost thereof plus interest at the highest legal rate
thereon within 30 days after receipt from Tenant of a detailed invoice.
SECTION 6. Alterations and Fixtures. After the Commencement Date, Tenant, at Tenant's sole cost
and expense, may make and permit any alterations, additions or improvements made to, in, on or about
the Leased Premises ("Alterations"). All Alterations made by Tenant shall be and become the property of
Tenant upon installation and shall be deemed Tenant's personal property, and Tenant may remove any
Alterations from the Leased Premises without Landlord's consent provided that such removal does not
cause damage to the Leased Premises or that any such damages are repaired by Tenant, at its sole cost and
expense, to the satisfaction of Landlord. Landlord herein agrees that no property or equipment, owned or
installed by Tenant, or any representative of Tenant, shall, under any circumstances, become a fixture,
and that Tenant shall reserve the right to remove any and all such property or equipment at any time
during the term of this Lease, or subsequent to its termination by either party provided that such removal
does not cause damage to the Leased Premises or that any such damages are repaired by Tenant,at its sole
cost and expense, to the satisfaction of Landlord. Landlord further agrees that it will, at no time, hold or
retain, any property owned or installed by Tenant, for any reason whatsoever.
SECTION 7. Taxes, Utilities, Care of the Leased Premises. Tenant agrees to be responsible for the
payment of all water, natural gas, electricity, local telephone, or other utility charges that come due and
payable during the term Tenant occupies the Leased Premises. Tenant shall also pay all ad valorem taxes,
real property taxes, assessments, levies, and other taxes as they come due. Tenant shall be responsible, at
its sole cost and expense, for the repair, operation and maintenance of the Leased Premises, including, but
not limited to, the interior and exterior of the Leased Premises, the roof, pipes, walls, plumbing and
wiring, parking lot, landscape area, doors, windows, HVAC system (subject to the immediately following
sentence), floors, mechanical systems, elevators, and all other matters related to the Leased Premises.
Landlord agrees to repair the HVAC system for a period of 365 days after the Commencement Date.
Thereafter, Tenant shall be responsible for the repair and maintenance of the HVAC system. Except as
set forth herein with respect to the HVAC system, Landlord shall have no duty to maintain, repair,
replace, or keep up any portion of the Leased Premises or the surrounding property, including, but not
limited to, the landscape, the parking lots, the drives, the foundation, the walls, the roof, the mechanical
systems, or any other matter constituting or relating to the Leased Premises.
City of Fort Worth Lease Page 3
SECTION S. Liens. Tenant shall keep the Leased Premises free from any liens arising out of any work
performed, materials furnished or obligations incurred by or on behalf of Tenant and hereby agrees to
hold Landlord harmless from and against any and all loss, claim, damage, liability, cost and expense,
including attorney's fees and costs, in connection with or arising out of any such lien or claim of lien.
Tenant shall cause any such lien imposed to be released of record by payment or posting of proper bond
acceptable to Landlord within ten (10) days after written request by Landlord. if Tenant fails to so
remove any such lien within the prescribed ten (10) day period, then Landlord may do so at Tenant's
expense, and Tenant shall, at Landlord's option, either (1) add all costs and expense relating to the
removal of the lien(s) to the Total Rent owed by Tenant hereunder, or(2) require that Tenant reimburse
Landlord within thirty (30) days for all costs and expense relating to the removal of the lien(s), plus
interest at the highest rate allowed by law from the date Landlord paid same until Tentant's
reimbursement.
SECTION 9. Quiet Enjoyment. Landlord covenants that Tenant, upon performing the terms,
conditions and covenants of this Lease, shall have quiet and peaceful possession of the Leased Premises
as against any person claiming the same by,through or under Landlord.
SECTION 10. Insurance. Tenant is a self-funded entity and as such, generally, it does not maintain a
commercial liability insurance policy to cover premises liability or property damage. Tenant will pay
directly and primarily all sums associated with risks that would be covered by a liability or casualty
insurance company with respect to the Leased Premises. As between Landlord and Tenant, Tenant will
have exclusive control of the Leased Premises and shall be responsible for any liability occasioned by
such control. Additionally, as between Landlord and Tenant, Tenant shall bear the responsibility for any
loss, damage or destruction of the Leased Premises by fire or other casualty or act of God.
Landlord may elect to obtain commercial insurance covering the Leased Premises, but any such
insurance shall be secondary to the obligations of Tenant.
Tenant agrees to execute and/or provide, within ten (10) days of Landlord's request, such other
and further documents or certifications as may be necessary or desirable to evidence Tenant's
responsibility under this Section.
SECTION 11. Liability and Hold Harmless. TO THE FULLEST EXTENT ALLOWED BY LAW,
TENANT SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD FROM ALL CLAIMS,
SUITS, ACTIONS, AND PROCEEDINGS WHATSOEVER WHICH MAY BE BROUGHT OR
INSTITUTED ON ACCOUNT OF, OR RESULTING FROM, DIRECTLY OR INDIRECTLY,
ANY AND ALL LOSSES, COSTS, OR DAMAGES TO PERSONS OR PROPERTY, ARISING
OUT OF THE USE AND OCCUPATION OF THE LEASED PREMISES OR IN CONNECTION
WITH OR GROWING OUT OF THIS LEASE FOR THE PERFORMANCE BY TENANT OF
ITS OBLIGATIONS HEREUNDER (HEREINAFTER REFERRED TO AS "CLAIMS"), AND
ALL LOSSES, COSTS, DAMAGES, AND EXPENSES, INCLUDING REASONABLE
ATTORNEYS' FEES AND OTHER COSTS OF DEFENDING AGAINST AND
INVESTIGATING THE CLAIMS.
NOTHING CONTAINED HEREIN SHALL EVER BE CONSTRUED SO AS TO REQUIRE TENANT TO CREATE A
SINKING FUND OR TO ACCESS,LEVY AND COLLECT ANY TAX TO FUND ITS OBLIGATIONS UNDER THIS
PARAGRAPH.
SECTION 12. Termination, FundinE and Non-Appropriation. This Lease shall terminate in the
event that the governing body of Tenant shall fail to appropriate sufficient funds to satisfy any obligation
of Tenant hereunder. Termination shall be effective as of the last day of the fiscal period for which
City of Fort Worth Lease Page 4
sufficient funds were appropriated or upon expenditure of all appropriated funds, whichever comes first.
Termination pursuant to this non-appropriation clause shall require the acceleration of the remaining
Total Rent due, and such sums shall become immediately due and payable, without the application of any
discount rate. Upon payment of the Total Rent to Landlord, Landlord shall convey the Leased Premises
to Tenant.
SECTION 13. Damage or Destruction.
(a) If all or any part of the Leased Premises is damaged or destroyed, Tenant shall promptly
and diligently repair the same as soon as possible.
(b) Tenant shall have the right to terminate this Lease if the Leased Premises cannot, with
reasonable diligence, commence the repair within three hundred sixty five (365) days after the date of the
damage or destruction, as determined by an independent, licensed contractor or engineer, such right to be
exercised within sixty(60)days after such determination and to be effective sixty(60)days after exercise.
Upon such termination, the remaining Total Rent due hereunder shall become immediately due and
payable,without the application of any discount rate.
SECTION 14. Early Termination. At any time during the Term, Tenant may terminate this Lease by
paying to Landlord all remaining installments of Total Rent(with a discount rate of] '/z%).
SECTION 15. Assignment. Tenant may not assign this Lease or sublet all or any portion of the Leased
Premises without the prior written approval of Landlord, which shall not be delayed or unreasonable
denied. Upon such assignment or sublease, this Lease shall be binding on the successors, and lawful
assignees of Landlord and the successors of Tenant, as permitted by the terms of this agreement and by
the laws of the State of Texas and the United States. Any person or entity using or occupying the Leased
Premises without a lawful assignment or sublease shall be subject to all the responsibilities and liabilities
of Tenant and shall be subject to all provisions regarding termination and eviction.
SECTION 16. Default.
(a) Tenant Default. A default under this Lease by Tenant shall exist if any of the following
occurs:
(i) If Tenant fails to pay within thirty (30) days after written notice from Landlord
that such sum is due any Rent required to be paid hereunder; or
(ii) If a court of competent jurisdiction makes or enters any final, unappealable
decree or order other than under the bankruptcy laws of the United States adjudging Tenant to be
insolvent.
(b) Remedies. Upon a default by Tenant,Landlord may
(i) continue this Lease in full force and effect, and this Lease shall continue in full
force and effect as long as Landlord does not terminate this Lease, and Landlord shall have the
right to collect Rent when due;
(ii) declare the unpaid Total Rent immediately due;or
(iii) exercise all other rights and remedies provided by law or otherwise provided in
this Lease,to which Landlord may resort cumulatively or in the alternative,
City of Fort Worth Lease Page 5
(c) Landlord's Default. In the event of any failure to perform any provision in this Lease by
Landlord, Tenant shall give Landlord written notice specifying the default with particularity, and
Landlord shall thereupon have thirty (30)days (plus an additional reasonable period as may be required in
the exercise by Landlord of due diligence) in which to cure any such default. If Landlord fails to so cure
any default after this notice, Tenant may terminate this Lease upon written notice to Landlord, such
termination to be effective within ten (10) days after Landlord's receipt of such notice, and no further
obligations, rent or otherwise, shall be due from Tenant to Landlord.
(d) Landlord hereby waives any statutory, equitable or common law right to a landlord's lien
against any personal property of Tenant.
SECTION 17. Notices. Notices required to be made under this agreement shall be sent to the
following persons at the following addresses, provided, however, that each party reserves the right to
change its designated person for notice, upon written notice to the other party of such change:
All notices to Landlord shall be sent to:
Tom Purvis &Randy Gideon
3741 SW Loop 820,LLC
c/o Continental Real Estate,Inc.
222 W. Exchange Street,Suite 200
Fort Worth,Texas 76164
All notices to Tenant shall be sent to:
Municipal Court Director
City of Fort Worth
I000 Throckmorton Street
Fort Worth, Texas 76102
As well as to:
City Manager
City of Fort Worth
1000 Throckmorton Street
Fort Worth,Texas 76102
As well as to:
City Attorney's Office Attn: City Attorney
City of Fort Worth
1000 Throckmorton
Fort Worth,Texas 76102
All time periods related to any notice requirements specified in the Lease shall commence upon the terms
specified in the Section requiring the notice.
SECTION 18. Right of First Offer to Purchase. During the term of this Lease, Landlord shall not sell
title to the Leased Premises to any unaffiliated third party or parties without first offering to sell the
Leased Premises by providing a ten(10)business day notice to Tenant.
City of Fort Worth Lease Page 6
SECTION 19. Entire Agreement, This Lease shall constitute the entire agreement of the Landlord and
Tenant, and shall supersede any prior agreements, either oral or written, pertaining to the Leased
Premises.
SECTION 20. Waivers. One or more waivers of any covenant,term, or condition of the Lease by either
Landlord or Tenant shall not be construed as a waiver of a subsequent breach of the same covenant,term,
or condition. The consent or approval by either Landlord or Tenant to or of any act by the other party
requiring such consent or approval shall not be deemed a waiver or render unnecessary consent to or
approval of any subsequent similar act.
SECTION 21. Choice of Law and Venue. This lease and the relationship created hereby shall be
governed by the laws of the State of Texas. Venue for any action brought to interpret or enforce the terms
of the Lease or for any breach shall be in Tarrant County,Texas.
SECTION 22. Compliance with Laws.
(a) From and after the Commencement Date,Tenant,at its own expense, shall ensure that the
Leased Premises are in compliance with all federal, state, municipal, and other laws, ordinances, rules,
and regulations applicable to the Leased Premises. No Hazardous Material (except for small quantities of
household cleaning products and office supplies used in the ordinary course of Tenant's business at the
Leased Premises and that are used, kept and disposed of in compliance with applicable laws) shall be
brought upon, used, kept or disposed of in or about the Leased Premises, without Landlord's prior written
consent, which consent may be withheld in Landlord's sole and absolute discretion. For purposes of this
Lease, a "Hazardous Material" is any substance (A) the presence of which requires, or may hereafter
require, notification, investigation or remediation under any laws; or (B) which is now or hereafter
defined, listed or regulated by any governmental authority as a "hazardous waste", "extremely hazardous
waste", "solid waste", "toxic substance", "hazardous substance", "hazardous material" or "regulated
substance", or otherwise regulated under any laws.
(b) Landlord and Tenant each represent and warrant to the other that (a) neither the
representing party nor its officers, partners, shareholders, or owners are a person or entity with whom
U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign
Asset Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially
Designated and Blocked Persons List), (b) the representing party will not violate United States anti-
terrorism laws, rules,regulations,and executive orders, and(c)the representing party will not do business
with any entity that is listed on OFAC's Specially Designated and Blocked Persons List.
SECTION 23. Invalidity of Particular Provisions. If any provision of this Lease is or becomes illegal
or unenforceable because of present or future laws or any rule or regulation of any governmental entity,
the remaining parts of this Lease will not be affected.
SECTION 24. Memorandum of Lease. Upon the request of Landlord, Landlord and Tenant shall
execute and acknowledge, in recordable form, a memorandum of this Lease to be recorded in the Real
Property Records of Tarrant County,Texas.
SECTION 25. Estoppel Certificate. Within five (5) days following the request of Landlord (which
request may be made at any time or from time to time), Tenant shall deliver to Landlord or Landlord's
designee, an estoppel certificate in the form of Exhibit "D" attached hereto and incorporated herein by
reference (the "Certificate") and, in addition, certifying to such facts or agreeing to such other matters as
Landlord or Landlord's designee shall reasonably require. Tenant agrees to address any such Certificate
City of Fort Worth Lease Page 7
to Landlord or Landlord's designee, and further agrees that any aforementioned addressee may rely upon
such Certificate. Tenant acknowledges that it is unconditionally obligated to provide the Certificate to the
aforementioned addressees as herein provided. Tenant acknowledges that Landlord is relying on Tenant's
agreement to strictly comply with the provisions of this Section and shall hold harmless Landlord and
Landlord's designees from any and all loss, cost, expense or damages incurred in connection with Tenant's
failure to strictly comply with the same. Tenant and Landlord agree that any remedies available to
Landlord at law would be inadequate for the protection of Landlord's rights hereunder, and therefore
Landlord shall be entitled to seek and receive specific performance of Tenant's obligations hereunder.
Tenant acknowledges that its obligation to deliver a Certificate is a condition precedent to its ability to
occupy the Leased Premises.
SECTION 26. Subordination to Mortgages. Tenant accepts this Lease subject and subordinate to any
mortgage(s), deed(s) of trust, or other lien(s) now or hereafter affecting the Leased Premises, and to
renewals, modifications, refinancings and extensions thereof and if, but only if, each holder of any
mortgage, deed of trust, or other lien subsequently affecting the Leased Premises has executed and
delivered to Tenant a SNDA (hereinafter defined), then to any mortgage(s), deed(s) of trust, ground
lease(s) and other lien(s) subsequently affecting the Leased Premises, and to renewals, modifications,
refinancings and extension thereof (collectively, a "Mortgage"). The party having the benefit of a
Mortgage shall be referred to as a "Mortgagee." This clause shall be self-operative, but upon request
from a Mortgagee, Tenant shall execute a commercially reasonable SNDA in favor of the Mortgagee. If
requested by a successor-in-interest to all or part of Lessor's interest in this Lease, Tenant shall, without
charge, attorn to the successor-in-interest if, but only if, such successor-in-interest has executed a SNDA
or other agreement whereby such successor in interest has agreed not to disturb or interfere with Tenant's
possession of the Leased Premises (subject to the terms and conditions of this Lease) for so long as
Tenant is not in default under this Lease beyond any applicable notice and cure period. Prior to
permitting a Mortgagee to obtain a Mortgage on the Property, Landlord will use commercially reasonable
efforts to cause such Mortgagee to execute a Subordination, Non-disturbance and Attornment Agreement
("SNDA") in form and substance reasonably satisfactory to Landlord, Tenant, and the Mortgagee. The
SNDA, among other things, shall provide that in the event a Mortgagee forecloses on the Leased Premises
or otherwise enforces its right to divest Landlord of its fee simple interest in the Leased Premises, then
such Mortgagee will not disturb Tenant's use and enjoyment of the Leased Premises for so long as Tenant
is not in default under this Lease beyond any applicable notice and cure period.
[SIGNATURES ON FOLLOWING PAGE.]
City of Fort Worth Lease Page 8
Executed to be effective this —day of ' . , 20-hV
LANDLORD:
3741 SW LOOP 820, LLC,
A Texas limited liability company
By:
Name: J S _
Title: �.
TENANT:
THE CITY OF FORT WORTH,
A Texas municipa orporation i4v,
et2aBy:
Name:
Title: Assistant City Manager
APPROVED AS TO FORM AND LEGALITY:
Assistant City Attorney
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Contract Number: 13 5
City of Fort Worth Lease Page 9
EXHIBIT"A"
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City of Fort Worth Lease Page 10
EXHIBIT"B"
COMMENCEMENT DATE MEMORANDUM
COMMENCEMENT DATE MEMORANDUM
THIS MEMORANDUM is made as of November 20,2011, by and between 3741 SW Loop 820, LLC("Landlord")
and The City of Fort Worth("Tenant").
Recitals:
WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated December 14, 2010
(the"Lease")for certain leased premises(the"Leased Premises")located at 3741 SW Loop 820, Fort Worth,Texas.
WHEREAS,Tenant is in possession of the Leased Premises and the Term of the Lease has commenced.
WHEREAS, Landlord and Tenant desire to enter into this Memorandum confirming the Commencement
Date,the expiration date of the Term,and other matters under the Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. The actual Commencement Date is July 1,2011.
2. The actual expiration date of the Tennis June 30,2021.
3. The cost of the Tenant Improvements was$1,500,000.00,so that the Additional Rent is$229,500.00 annually,
with a monthly installment of$19,125.00.
4. The Total Rent is$4,590,000.00 over the life of the Term, with an annual amount of$459,000.00,payable in a
monthly installment of$38,250.00.
5. Landlord agrees to replace any or all of the VCT tile located in Room#130 if the tile should deteriorate due to
water damage during the remodel of the building.
Capitalized terms not defined herein shall have the same meaning as set forth in the Lease.
LANDLORD: TENANT:
3741 SW LOOP 820,LLC THE CITY OF FORT WORTH
a Texas limited liability company a Texas municipal corporation
By: By
Name: Name: rriB-mrwb Cggr6
Title: Title:Assistant City Manager
EXHIBIT"C"
Work Letter
This Work Letter("Letter")is attached as an Exhibit to that certain Lease Agreement(the"Lease")between
3741 SW Loop 820, LLC, a Texas limited liability company ("Landlord"), and The City of Fort Worth, a Texas
municipal corporation("Tenant")for the Leased Premises. Unless otherwise specified,all capitalized terms used in
this Letter shall have the same meanings as in the Lease. In the event of any conflict between the Lease and this
Letter,this Letter shall control.
1. Construction Documents. The parties agree and acknowledge that after the date of the Lease, Landlord
and Tenant will review detailed architectural, mechanical, electrical and plumbing drawings and specifications for
construction of the Work (as defined below) in the Leased Premises, including, without limitation, Tenant's space
planning drawings and layouts and Tenant's plans and specifications for partitions, furniture, appliances, fixtures,
floor coverings, ceilings, special dead load requirements, electrical/communication/data/technology wiring/cabling
systems, electrical/communication/ data/technology outlets, electrical/communication/data/technology equipment
rooms, initial provider(s) of telecommunications services, doors (including hardware and keying schedule), glass
partitions, windows, critical dimensions, structural load requirements, millwork, finish schedules, security devices,
HVAC systems (including, without limitation, all supplemental HVAC systems) and all supplemental
electrical/communication/data/technology systems and components, together with all supporting information and
delivery schedules. As a result of the foregoing process, Landlord and Tenant mutually agree upon all detailed
architectural drawings and specifications, including space plans and mechanical, electrical and plumbing drawings
related to the Work (the "Approved Construction Documents"). The Approved Construction Documents are more
particularly described as follows:
The drawings and specifications prepared by Gideon Toal Architects dated and referred to as Sheets
and eeneral described in the attached"Description of Work".
The preparation of the Approved Construction Documents, including, without limitation, all space plans, all
architectural and engineering documents, all other construction documents, plans and specifications, and all
revisions to any of the foregoing shall be deemed to be costs associated with constructing the Tenant Improvements
for purposes of calculating the amount of Additional Rent due under the Lease. Tenant hereby agrees that it has
confirmed, by means of calculations or metering,that the available capacity of the Building electrical system will
support Tenant's electrical requirements.
2. Pricina and Bids. Following the execution of the Lease and completion of Approved Construction
Documents, Landlord will promptly price the construction of the Work with Landlord's general contractors in
accordance with the Approved Construction Documents and fumish written price estimates to Tenant. Within 5
Business Days after receipt of such estimates, Tenant shall review such estimates, complete negotiations with
Landlord for any changes or adjustments thereto, and deliver written approval of such estimates to Landlord. If
Tenant fails to give its written approval within such 5 Business Day period, the then current estimates will be
deemed approved by Tenant; provided, however, if during such 5 Business Day period Tenant commences and
diligently continues to negotiate such pricing estimates with Landlord,the estimates will not be deemed approved by
Tenant until the earlier of(1)the date Tenant sends its written approval of the price estimates to Landlord,or(2)the
date Tenant ceases to diligently negotiate such estimates with Landlord.
3. Permits. Once the pricing has been agreed upon pursuant to Section 2 of this Letter above, Landlord shall
use diligent and good faith efforts to obtain all required building permits (collectively the "Permits") from the
appropriate governmental authorities for the construction of the Work as depicted in the Approved Construction
Documents. In the event that the applicable governmental authorities involved decline to issue the Permits on the
basis of the Approved Construction Documents, Landlord will make such revisions to the Approved Construction
Documents as will satisfy the requirements for issuance of the Permits, but such revisions will cause the Approved
Construction Documents to remain substantially similar to the Approved Construction Documents initially agreed
upon by Tenant. Tenant shall have the right to approve any revisions that are made to the Approved Construction
Documents pursuant to this paragraph if the same would constitute a material modification to the Approved
Construction Documents initially agreed upon by Tenant.
City of Fort Worth Lease Page 12
4. Cost of Construction. Landlord shall enter into all contracts with the architects, engineers, consultants
and contractors that will plan, design and construct the Work. Landlord shall make all payments under such
contracts directly to the architects, engineers and contractors performing the Work. The cost of (a) all space
planning, design, consulting or review services and the preparation of all construction drawings, plans and
specifications, (b) extending electrical wiring and telephone and data cabling, (c) purchasing and installing all
equipment for the Leased Premises(including any submeters and other above building standard electrical equipment
and cabling approved by Landlord),(d) required metering, re-circuiting or re-wiring for metering, equipment rental,
engineering design services, consulting services, telecommunications and data cabling, studies, construction
services, cost of billing and collections, and (e) Permits, materials and labor required to design and construct the
Work, shall all be included in the cost of the Work. Notwithstanding anything contained herein or in the Lease to
the contrary,Landlord shall not be required to expend more than $1,500,000.00 to complete the Work. All costs of
planning, designing and constructing the Work that exceed $1,500,000.00 shall be the sole responsibility of Tenant
and shall be payable by Tenant. The Landlord shall not expend more than $1,500,000.00 without the prior written
consent of Tenant.
5. Construction.
(a) General Terms. Subject to the terms of this Letter, Landlord agrees to cause leasehold
improvements to be designed for,and constructed in,the Leased Premises(the "Work")in a good and workmanlike
manner in accordance with the Approved Construction Documents. Tenant acknowledges that Landlord is not an
architect, contractor or engineer, and that the Work will be designed and performed by independent architects,
engineers and contractors. Accordingly, Landlord does not guarantee or warrant that the Approved Construction
Documents will comply with Laws or be free from errors or omissions,nor that the Work will be free from defects,
and,except as expressly provided in this Letter,Landlord will have no liability therefor. In the event of such errors,
omissions or defects, and upon Tenant's written request, Landlord will use commercially reasonable efforts to
cooperate with Tenant in enforcing any applicable warranties. In addition, unless expressly agreed to in writing by
Landlord prior to commencement of the Work,Landlord's approval of the Approved Construction Documents or the
Work shall not be interpreted to waive or otherwise modify the terms and provisions of the Lease. The Approved
Construction Documents must comply with(i)the Building's electrical and cabling requirements and capacities, (ii)
the HVAC design capacities of the Building, (iii) Landlord's policies concerning communications and fire alarm
services, and (iv) Landlord's policies concerning Tenant's electrical design parameters. Upon Tenant's request,
Landlord will provide Tenant a written statement certifying that it has complied with items(i)through(iv)above.
(b) Substantial Completion. Substantial Completion of the Work and any delay therein shall be
governed by the provisions of Section 5 of the Lease. Time is of the essence in connection with the obligations of
Landlord and Tenant under this Letter. Landlord shall not be liable or responsible for any claims incurred (or
alleged)by Tenant due to any delay in achieving Substantial Completion for any reason.
(c) Tenant's Inspection Riaht. Landlord will notify Tenant upon Substantial Completion of the
Work. In the event Landlord and Tenant shall not agree upon whether the Work has been substantially completed,
then the project architect's certification that the Work is substantially complete shall be binding upon the parties.
Upon Substantial Completion of the Work (whether by mutual agreement between Landlord and Tenant or by the
certification of the project architect), Tenant (or Tenant's engineer) will then be allotted a three (3) Business Day
period in which to inspect such construction. Tenant(or Tenant's engineer)will prepare a punch list("Initial Punch
List") noting any construction defects or any work that was not completed in accordance with the Approved
Construction Documents in the course of making such inspection. Tenant's failure to provide Landlord with a
written Initial Punch List within such three(3)day period shall be deemed as Tenant's agreement that the Work has
been completed in accordance with the Approved Construction Documents and that there are no defects therein.
Any construction defect or work not completed in accordance with the Approved Construction Documents noted on
the Initial Punch List will be promptly corrected by Landlord. Landlord shall notify Tenant upon the completion of
all work necessary to correct any such construction defects or work not completed in accordance with the Approved
Construction Documents which was noted by Tenant or Tenant's engineer on the Initial Punch List. At any time
after the Work is Substantially Complete, Landlord shall deliver to Tenant a certificate of occupancy to the extent
one is available for the Work evidencing the final inspection and/or acceptance of the Work by all appropriate
governmental authorities; provided, however, if any work to be performed by Tenant (and not to be performed by
City of Fort Worth Lease Page 13
Landlord hereunder) is required to be completed before a certificate of occupancy will be issued by the appropriate
governmental authorities,Landlord shall have no obligation to deliver such a certificate of occupancy to Tenant.
6. Change Orders and Cost Overruns. All changes to, and deviations from, the Approved
Construction Documents at the direction of Tenant (each, a "Change Order"), including any (i) direction of Tenant
to omit any portion of the Work, (ii) additional architectural or engineering services, (iii) changes to materials,
whether standard materials, specially ordered materials, or specially fabricated materials, (iv) cancellation or
modification of supply or fabrication orders, and (v) removal or alteration of any portion of the Work, must be
approved in advance in writing by Landlord. Landlord's invoice for Change Orders requested by Tenant and
approved by Landlord which increase the cost of the Work to an amount above the maximum amount to be paid by
Landlord hereunder shall be paid by Tenant within 5 days after Tenant receives such invoice (which payment may
be required by Landlord prior to commencing construction).
7. Final Punch List. Within thirty 30) days after Substantial Completion, Tenant shall give to Landlord a
final punch list ("Final Punch List") specifying any of the Work performed by Landlord which is not in complete
compliance with the Approved Construction Documents or is otherwise defective. After receipt of the Final Punch
List, Landlord shall promptly commence to complete or promptly cause completion of the incomplete Work or
commence to remedy or cause the remedy of the defective Work and Landlord shall pursue the completion of such
work with reasonable diligence.
8. Property of Landlord. Except as otherwise expressly agreed to in writing by Landlord and Tenant, all
improvements constructed to the Leased Premises under this Letter shall be the property of Landlord and Tenant
shall have no right to remove any improvements constructed by Landlord pursuant to this Letter or the Approved
Construction Documents, except for trade fixtures capable of removal without irreparable structural damage to the
Leased Premises.
City of Fort Worth Lease Page 14
Description of Work
Basement
1. Room B06&B07:remodel bathrooms(ADA compliant).
2. Room BO I:new ceiling and lighting.
3. Room B09&B 10:paint and carpet-Alternate.
4. Room B08&B02: demising walls&doors.
5. Room B04:new ceiling and lights(as needed).
6. Stairs to 1St floor with demising walls and lighting.
7. Fire sprinkler system and fire alarm connection.
8. Elevator.
First Floor
1. Room 113& 114:new bathrooms(ADA compliant).
2. Room 104-108, 144-148:work related to courts and offices.
3. Room 143:modify teller counter.
4. Room 133: modify teller counter(add glass to existing counter).
5. Room 101:expand entry floor area.
6. Room 130: install(1)V.A.T.and service existing motor bank drawer.
Second Floor
1. Room 206&207: remodel(ADA compliant).
2. Room 210&217:new ceiling.
3. Room 215&216:new ceiling,wall finish,lights and elec plugs(as needed)
4. Entire Floor: replace all carpet and paint as needed.
Outside Work
1. Reseal and stripe parking lot.
2. Add(2)ADA compliant parking spaces and ramp.
General
1. Move and cover furniture during construction and replace at completion.
2. Electrical to doors with security protection(card readers). No security or locking devises are
included.
3. Paint areas only as needed.
4. Reuse existing materials wherever practical including but not limited doors,light fixtures,plumbing
fixtures,glass store front,cabinets,hardware,and countertops.
5. Ceramic flooring,when practical,shall be repaired and/or match.
6. Electrical will only be modified/added in the areas where demolition and reconstruction occur.
7. All data wiring and other related devices shall be by Tenant.
8. Tenant shall have a$25,000 allowance of telephone equipment.
9. Replace all carpeting($13/yd/allowance).
10. Replace vinyl base as needed(approximately 1,500/If).
11. Repair HVAC system(including replacing 37 ton unit). Provide lyr warranty.
City of Fort Worth Lease Page 15
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City of Fort Worth Lease Page 19
Exhibit "D"
Tenant Estoppel Certificate
The undersigned Tenant executed and entered into a lease agreement ("Lease") on
or about July 1, 2011 with 3741 SW Loop 820, LLC, as "Landlord" for 3741 S.W. Loop
820, Fort Worth, Tarrant County, Texas ("Property").
With respect to the Lease, Tenant hereby certifies as of the 1st day of July, 2011,
that:
1. No default exists under the terms of the Lease by either Landlord or
Tenant.
2. No rental payments have been made in advance of the current calendar
month except as follows: $-0-.
3. A security deposit in the amount of$76,500.00 has been made by Tenant
and is currently being held by Landlord.
4. There are no events or conditions existing which could constitute a default
of the Lease or of the owner of the Property under Lease or entitle Tenant
to off-sets or defenses against the payment of rent accruing under the
Lease.
5. The monthly payment of the Lease: $38,250.00.
6. The expiration date of the Lease is June 30, 2021.
7. Tenant warrants and represents that it has the authority to execute this
Certificate on behalf of Tenant and certifies that all the information
contained herein is accurate as of this date.
Executed this` day of December, 2011.
By 41�Al—
Name: Fema#,W6 C064o-
Title: A5,40"Ir Ci44OAaj%*ger'
Name of Entity: City of Fort Worth
Official site of the City of Fort Worth,Texas
4 CITY COUNCIL AGENDA FoR" T'TWo
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COUNCIL ACTION: Approved on 10/5/2010 -Ord. No. 19388-10-2010 & 19389-10-2010
REFERENCE 02SOUTHWEST
DATE: 10/5/2010 NO.: C-24515 LOG NAME: MUNICIPAL COURT
FACILITY
CODE: C TYPE: NOW PUBLIC NO
CONSENT HEARING:
SUBJECT: Accept a Land Donation of 2.097 Acres Located at 3741 S.W. Loop 820, for the Southwest
Branch of the Municipal Court Authorize a 10 Year Lease to Purchase Agreement with the
3741 S.W. Loop 820, L.P., for Improvements at Same Location, in the Amount of
$711,650.00 and Adopt Appropriation Ordinances (COUNCIL DISTRICT 6)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to accept the donation of 2.097 acres of land at 3741 S.W. Loop 820
upon acceptance of the leased property improvements;
2. Authorize the City Manager to enter into a 10 year lease to purchase agreement with the 3741
S.W. Loop 820, L.P., for an annual amount not to exceed $459,000.00;
3. Authorize the expenditure of up to $252,650.00 for one-time costs that include installation of IT
communication and alarm systems, moving expenses, additional equipment and furnishings;
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in
the Capital Projects Reserve Fund -General Unrestricted Gas Lease Revenue by $711,650.00;
5. Authorize the transfer of$711,650.00 from the Capital Projects Reserve Fund -General
Unrestricted Gas Lease Revenue to the General Fund; and
6. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in
the General Fund to $711,650.00.
DISCUSSION:
In March 2010, the City was approached by representatives of the former Southwest Bank property
at 3741 S.W. Loop 820 (aerial map attached). The property was available for a lease or lease
purchase and a staff team reviewed the property and improvements as a potential site for a
southwest satellite municipal court and city service facility. The 3741 S.W. Loop 820, L.P., has
offered to donate the land (2.097 acres) that the 30,600 square foot building sits on as part of the
agreement. The estimated Tarrant Appraisal District value of the property donation is$464,306.00.
The current estimated Tarrant Appraisal District value of the improvements on the property is
$1,434,613.00 for a total value of land and buildings of$2,131,107.00. The addition of
$1,500,000.00 for needed renovations will bring the total estimated value to$3,631,107.00
The current Municipal Court facility is too small to meet the current demands for services. Over the
last five years there has been 18 percent increase in the number of cases filed. The current
backlog for bench trials extends to 18 months resulting in a loss of revenue to the City and the slow
delivery of justice to the community. The addition of the two courts and support facilities at the
Southwest Municipal Court can reduce the time lag for bench trim to approximately six months_
The City has grown dramatically in the last 20 years but has not added any courtroom capacity to
http://apps.cfwnet.org/council_packet/mc review.asp?ID=14138&councildate=10/5/2010 10/29/2010
address the growth. The location of this facility is consistent with the move towards a strong central
core of facilities in the downtown with distributed services in the regions of the City close to those
using city services.
The site and improvements will provide an excellent facility to serve the needs of citizens in
Southwest Fort Worth by providing Municipal Court and other city services. The facility is located on
the service road of S.W. Loop 820 just east of Trail Lake. The site is very accessible as there is a
Loop 820 exit at Trail Lake.
Terms of the Lease to Purchase
10 year term on the 30,600 square foot building where the building becomes property of the City
at the end of the lease
Annual lease payment not to exceed $459,000.00
Donation of 2.097 acres of land upon execution of the lease and acceptance of the
improvements
110 parking spaces and a shared parking agreement with the adjacent Southwest Bank
Deposit of first and last lease payment
No future banking use of the property
Shared use of the Sign Post
Building finish out financed as part of the annual lease payment
The lease to purchase and renovation of this facility will provide two courtrooms, support office
space, meeting rooms, counter space for Municipal Courts and the Water Department, office space
for Code Compliance, drive through bill and ticket paying and an electronic kiosk for the payment of
red light tickets.
The renovations needed to make the building ready to provide City and Municipal Court Services
are included and financed in the annual lease to purchase amount. The base rent for the facility is
$7.50 per square foot and additional rent shall be the amortized amount of the build out costs. It is
anticipated that the build out costs will not exceed $1,500,000.00, for a maximum additional lease to
` purchase charge of$7.50 per square foot or $0.50 per square foot per$100,000.00 of actual build-
out cost. The maximum lease amount will be $15.00 per square foot for an annual rent of
$459,000.00. If the actual build out cost is less than the projected estimate then the additional rent
amount will be adjusted down to reflect the actual build out cost.
One-time costs that the City must incur to occupy and use the building are estimated to be
$252,650.00. Those one-time costs include:
1. IT communication and alarm systems;
2. Moving expenses
3. Business equipment
4. Additional furnishings
The Agreement will contain a termination provision that states that if the City terminates, the
landlord will accelerate the due date of all remaining rent, and upon the City's payment of the
remaining rent, the ownership of the building will become the City's.
Projected Schedule
Execute Lease to purchase agreement and associated documents
October 2010 through December 2010 - Build Out of Needed improvements
January 2011 - Move in and test period for the facility
February 2011 - Fully staffed and operational
Additional staffing for this facility is provided in the Water, Municipal Courts and Law departments
respective budgets and City Manager's recommended Fiscal Year 2011 budget.
This project is located in COUNCIL DISTRICT 6 and will serve the Southwest quadrant of the City.
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=1413 8&councildate=10/5/2010 10/29/2010
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that upon approval of the above
recommendations and approval of the attached appropriation ordinance, funds will be available in the
current capital budget of the Capital Project Reserve Fund and of the current operating budget of the
General Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
GC10 446200 006060001000 $186,108.14 C10 538070 006060001000 $186,108.14
C10 446100 013010001000 $481`657'28 C10 538070 013010001000 $525,541.86
GC10 446300 013010001000 $43,028.56
3)GG01 539120 0383000 $252.650.00
2)GG01 537010 0383000 $459,000.00
4
C10 446600 013010001000 757'44
4 98.58
GC10 446800 013010001000
4 $186,108.14
GC10 538070 006060001000
4 $525,541.86
GC10 538070 013010001000
6) GG01 539120 0383000 $252,650.00
6)GG01 537010 0383000 $459,000.00
5)6)GG01 472010 0383000 $711.650.00
Submitted for City Manager's Office by: Fernando Costa (6122)
Deidra Emerson (6760)
Originating Department Head: Randle Harwood (6101)
Additional Information Contact: Randle Harwood (6101)
ATTACHMENTS
02SOUTHWEST MUNICIPAL COURT Rec6.doc
02SOUTHWEST MUNICIPAL CT Revised Rec4.doc
Mand C Attachments for SW Municpal Courts.pnt
http://apps.cfwnet.org/council_packet/me—review.asp?ID=1413 8&councildate=10/5/2010 10/29/2010