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Home My WebLink AboutContract 47008 CITY y p� q� u�mgv yp� n 41 '&d�''Fr� n�n 1� `A n9 k 19 �D' '� nrvwummID¢sluu LEASE AGREEMENT BETWEEN CITY OF FORT WORTH AND WASTE MANAGEMENT OF TEXAS, INC FOR PROPERTY AT 5000 MARTIN LUTHER KING FREEWAY, FORT WORTH, TEXAS This lease agreement("Lease" or "Agreement") is entered into effective "o 2015 ("Effective Date"), by and between the City of Fort Worth, a Texas home rule municipal corporation acting by and through its duly authorized Assistant City Manager ("Landlord" or "City"), and Waste Management of Texas, Inc., a Texas corporation, acting by and through its duly authorized representative ("Tenant"). RECITALS WHEREAS, Landlord is the owner of certain real property and improvements thereon located at 5000 Martin Luther King Freeway, Fort Worth, Texas, more particularly described on Exhibit "A"—MLK Property ("MLK Property"); WHEREAS, Landlord and Tenant are parties to a separate agreement for collection of residential garbage, refuse and small bulky waste, recyclables, certain commercial solid waste, yard waste, construction and demolition and large brush, and large bulky waste (City Secretary Contract No. 28358-E1, M&C C-26067), with a term of April 1, 2013 to March 31, 2023 and two ten-year renewal options ("Waste Collection Contract"); WHEREAS, Tenant desires use of a portion of the MLK Property because Tenant finds the MLK Property to be in a location conducive to their operations, and plans to make certain improvements on the MLK Property ; WHEREAS, this Lease shall be for the area set forth on Exhibit "A" — MLK Property (the "Premises"), with the remainder of the MLK Property being retained by the Landlord ("City Facility"); WHEREAS, Landlord must vacate the Premises and certain improvements must be made to the Premises, as defined herein, prior to the term of this Lease commencing, as set forth herein; WHEREAS, Landlord wishes to lease to Tenant, and Tenant wishes to lease from Landlord, under the terms and conditions of this Lease the Premises; and WHEREAS, Landlord's City Council approved the execution of this Lease with Tenant on December 9, 2014 (M&C G-18381). NOW THEREFORE, in consideration of the covenants and agreements contained in this Agreement, Landlord and Tenant hereby agree as follows: Lease of MLK Property u101Ai RECORD by Landlord to Waste Management C Y SEGR E"175MY Page 1 of 28 FFT. WORTH, TX ARTICLE 1. CONDITIONS PRECEDENT 1.01 Prior to Commencement. The Term shall not commence and the Commencement Date Memorandum, as hereinafter defined, shall not be executed until all the following conditions ("Conditions Precedent") have been met: (1) Certain Landlord Items Relocated from Premises. Prior to the Commencement Date of the Term, and at the sole expense of Tenant, Landlord shall relocate all Landlord- owned storage carts for refuse, recyclables and yard waste from the City Facility to the Southside Service Center, 4100 Columbus Trail, or to such other location as designated by Landlord. Additionally, the street light and signal materials located in the northeast portion of the Premises shall be moved to the City's James Avenue Service Center, or to such other location as designated by Landlord. All Landlord's reasonable moving expenses related to the relocation set forth in this Section 1.01(1) shall be at the sole cost and expense of Tenant. In the event Tenant does not pay any moving expenses directly, Landlord shall provide to Tenant invoices of the actual moving expenses incurred by Landlord within thirty(30) days of the completion of the move and Tenant shall promptly pay the invoice in full within forty-five (45) days of the date of the invoice to the address listed on the invoice. (2) Ready to Proceed on CNG System Installation. Tenant intends to install a compressed natural gas ("CNG") system, on the MLK Property for the compression of natural gas, including but not limited to (i) natural gas compression, dispensing and storage equipment, (ii) slow fill and fast fill stations for Tenant's use on the Premises, and (iii) Landlord's CNG Stations, as hereinafter defined, on the City Facility (collectively, the "CNG System") in substantial compliance with the depiction on Exhibit "B" —MLK Improvements. Tenant must provide to Landlord for its approval, which shall not unreasonably be withheld: (i) plans for the CNG System that have been approved by applicable governmental agencies with permitting authority over the CNG System, and (ii) a signed gas supply agreement indicating that Tenant is able to proceed with the installation of the CNG System. (3) Improvements to City Facility. Tenant shall perform the following improvements to the City Facility in compliance with Exhibit "C" —Landlord's Construction Requirements and as set forth on Exhibit "B"—MLK Improvements: (a) Access to City Facility from Village Creek Road; (b) Fence and gate improvements along the MLK Property perimeter; (c) Fence and gate improvements between the Premises and City Facility; (d) Ground improvements with concrete, asphalt, or compacted gravel; (e) Relocate hazardous materials storage building from Premises to City Facility; (f) Install aboveground storage tank system; and (g) Provide interior building improvements. 1.02 Permits. Tenant must obtain all necessary permits for all the improvements performed on the City Facility, and Landlord agrees to cooperate fully with Tenant to obtain the Lease of MLK Property by Landlord to Waste Management Page 2 of 28 necessary permits; provided, however, Tenant acknowledges and agrees that the permit issuance is subject to the Code of Ordinances of the City of Fort Worth and the processes and procedures of the Planning and Development Department of the City of Fort Worth. Landlord will waive permit fees associated with these improvements pursuant to exceptions in Section 109.2.1 of the City of Fort Worth Building Code, and to M&C G-18381. 1.03 Right of Entry. Landlord shall provide a right of entry to Tenant in substantially the same form as that attached as Exhibit "E" - Right of Entry . All construction performed on the MLK Property shall be in compliance with the Exhibit "C" -- Landlord's Construction Requirements. 1.04 Deadline. The Conditions Precedent shall be diligently pursued to completion by Tenant, and shall be completed no later than March 31, 2016, subject to Force Majeure, as hereinafter defined. The parties may, by mutual written agreement, agree to extend the Conditions Precedent completion date. ARTICLE 2. PREMISES 2.01 Premises. Beginning on the Commencement Date, in consideration of the mutual terms and covenants of this Agreement, and other good and valuable consideration, Landlord demises and leases to Tenant, and Tenant leases from Landlord the Premises. 2.02 Condition of the Premises. Tenant expressly acknowledges and agrees that it has conducted a full, complete physical examination of the Premises and hereby accepts the Premises, AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATEVER NATURE, EXPRESS OR IMPLIED, IT BEING THE INTENTION OF LANDLORD AND TENANT TO EXPRESSLY NEGATE AND EXCLUDE ALL WARRANTIES EXPRESS OR IMPLIED, IN FACT OR BY LAW, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTY OF SUITABILITY, AND THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, CONTAINED IN OR CREATED BY ANY APPLICABLE LAW OF THE STATE OF TEXAS. 2.03 Preparation of Premises. Landlord's stockpile materials and associated equipment located on the Premises shall be relocated to the City Facility after (i) the Commencement Date of the Term, and (ii) the necessary improvements, which include the improvements listed in Section 1.01(3)(a), (c), and (d). All Landlord's reasonable moving expenses related to the relocation in this Section 2.03 shall be at the sole cost and expense of Tenant. In the event Tenant does not pay any moving expenses directly, Landlord shall provide to Tenant invoices of the actual moving expenses incurred by Landlord within thirty (30) days of the completion of the move and Tenant shall promptly pay the invoice in full within forty-five (45) days of the date of the invoice to the address listed on the invoice. Lease of MLK Property by Landlord to Waste Management Page 3 of 28 ARTICLE 3. LEASE TERM 3.01 Term. The term of this Agreement ("Term") shall commence on the date upon which the parties execute a commencement date memorandum, in substantial compliance with the form attached hereto as Exhibit "D" — Commencement Date Memorandum ("Commencement Date Memorandum"), which date is referred to herein as the "Commencement Date". The Commencement Date Memorandum shall not be executed until the Conditions Precedent are met. The Term shall expire thirty (30) days after March 31, 2023, which is the expiration of the Waste Collection Contract, unless terminated earlier as provided herein. Consistent with the Waste Collection Contract, the parties shall have the right to amend this Agreement to extend the term to coincide with the term of the Waste Collection Contract, at least 180 days prior to the end of the then current expiration date of this Agreement; provided that any amendment of the Lease shall be agreed to in writing by the Parties and must be approved by the Fort Worth City Council. 3.02 Holdover Tenancy. Unless terminated earlier by either party pursuant to a right hereunder, this Agreement will expire without further notice when the Term expires. Any holding over by Tenant after the Term expires will not constitute a renewal of the Agreement or give Tenant any rights under the Agreement in or to the Premises, except as a tenant at will. ARTICLE 4. CONSTRUCTION AND IMPROVEMENTS 4.01 Required Improvements. Following the Commencement Date, Tenant shall perform the following required improvements ("Required Improvements"): (1) Install Landlord's CNG Stations. Tenant shall construct and install, or cause to be constructed and installed, at Tenant's sole cost and expense, ten (10) CNG fueling stations for Landlord's use ("Landlord's CNG Stations"), as shown on Exhibit "C" — MLK Improvements, which shall be serviced by Tenant's CNG System. Landlord shall execute all necessary easements for utilities for the construction and installation of the Landlord's CNG Stations and related pipelines. Construction and installation of the Landlord's CNG Stations shall be performed in accordance with the construction requirements attached hereto as Exhibit "C" -- Landlord's Construction Requirements. Tenant shall use due diligence to make the Landlord's CNG Stations operational on or before March 31, 2016 unless otherwise agreed to by the parties. Tenant shall provide CNG to the Landlord through the Landlord's CNG Stations, and the cost to Landlord for the CNG shall be the same amount that the gas utility charges Tenant for natural gas. Tenant shall not pass through to Landlord the cost of overhead or any other cost associated with preparing, delivering, transporting, or providing the compressed natural gas to the Landlord and the Landlord's CNG Stations. Tenant shall invoice the City monthly for the City's CNG consumption and invoices will be payable within 30 days in accordance with Texas law. Lease of MLK Property by Landlord to Waste Management Page 4 of 28 (2) Underground Fuel System Decommissioning. Within 120 days of the Effective Date of this Agreement, Tenant shall completely remove the Landlord's underground fuel system from the MLK Property, which includes required professional reports and lab results required for site closure, at Tenant's sole cost and expense, and in compliance with 30 TAC 334 and any other applicable federal, state, or local laws, regulations, ordinances, or requirements. The removal and decommissioning of the underground fuel system shall be in compliance with the Exhibit "C" -- Landlord's Construction Requirements. If any contamination or environmental concerns are discovered during Tenant's decommissioning of the Landlord's underground fuel system, Tenant agrees to cease the decommissioning activities and notify the Landlord representative of the issue. The Landlord is responsible for addressing and managing the environmental concern, which includes without limitation, reporting the issue to the applicable regulatory agency, performing any clean-up, or taking samples. Tenant shall have no liability for existing contamination or environmental issues caused by the Landlord's underground fuel system. 4.02 Discretionary Improvements. Tenant may, at its sole cost and sole discretion and subject to the terms herein, perform modifications, renovations, improvements and other construction work on the Premises, as shown on Exhibit "B" — MLK Improvements. Any modifications, renovations, improvements or other construction work on the Premises shall be referred to hereafter as "Discretionary Improvements", and shall be performed either by Tenant or by an independent contractor engaged by and paid exclusively by Tenant ("Tenant Contractor"). 4.03 Construction. Tenant may not start construction on any Condition Precedent, Required Improvement, Discretionary Improvement on or to the City Facility or the Premises unless it first submits all plans, specifications and estimates for the costs of the proposed work in writing and also requests and receives in writing approval from the Landlord, or its designated representative ("Landlord's Representative"), which Landlord herein designates as the Property Management Director or his designee. Within five (5) business days of receipt, Landlord, acting in its capacity as a Landlord and not as a permitting authority, will either (i) review and approve all plans submitted by Tenant or (ii) notify Tenant in writing of any required changes or corrections and the reason(s) therefore that must be made to the plans to obtain City approval. Any required changes or corrections must be made or addressed by Tenant, and Tenant shall resubmit the plans promptly to Landlord for approval, and City shall respond within 5 business days of receipt, or such changes and corrections shall be deemed to be approved by City. Upon start of construction of any Condition Precedent, Required Improvement, or Discretionary Improvement on or to the Premises by Tenant pursuant to plans approved by Landlord pursuant to this Section 4.03, Tenant shall substantially complete the Condition Precedent, Required Improvement, or Discretionary Improvements in accordance with the plan specifications within the time specified herein or, if none, within the Term. For the purposes of this Section, "start construction" or "start of construction" shall mean the date stated in a Notice to Proceed (or other similar document) issued by Tenant to its Contractor, and "substantial completion" shall mean that point in time when the Condition Precedent, Required Improvement, or Discretionary Improvement is completed to such extent as the City of Fort Lease of MLK Property by Landlord to Waste Management Page 5 of 28 Worth could, if applicable, issue a Certificate of Occupancy, or a final punch-list is developed by Tenant and its contractor. Tenant covenants and agrees that it shall fully comply with all provisions of this Section 4.03 in the performance of any such Condition Precedent, Required Improvement, or Discretionary Improvement. Landlord shall take full title to any Discretionary Improvements on the Premises upon the termination of this Lease, unless removed by Tenant subject to Landlord approval pursuant to other provisions herein. Any of Landlord's property adjacent to the Premises that is damaged by Tenant or its contractors during the course of constructing any of the Conditions Precedent, Required Improvements, or Discretionary Improvements shall be repaired and returned to its previous condition or better, at Tenant's sole cost and expense. Such repairs shall be performed prior to Tenant's contractor demobilizing from the Leased Premises, if applicable. Tenant agrees that no improvement to the Premises will be designed or constructed in such a manner that it causes an adverse impact to the usability of Landlord's adjacent property. 4.04 Approval of Plans. Tenant's plans for construction and improvements shall conform to the then existing City codes and ordinances applicable to the construction and improvements established by Landlord, as well as Landlord's Construction Requirements in Exhibit "C". All plans, specifications and work shall conform to all applicable federal, state and local laws, ordinances, rules and regulations in force at the time that the plans are presented for review. The City of Fort Worth shall inspect all work pursuant to its usual construction inspection procedures. Approval by the Landlord of any plans and specifications shall not constitute or be deemed (i) to be a release by the Landlord of the responsibility or liability of Tenant or any of its contractors; their officers, agents, employees and subcontractors, for the accuracy or the competency of the plans and specifications, including, but not limited to, any related investigations, surveys, designs, working drawings and other specifications or documents, or(ii) an assumption of any responsibility or liability by the Landlord for any negligent act, error or omission in the conduct or preparation of any investigation, surveys, designs, working drawings and other specifications or documents by Tenant or any of its contractors; their officers, agents, employees and subcontractors. 4.05 Documents. Tenant shall supply Landlord with comprehensive sets of documentation relative to any Condition Precedent, Required Improvements, and Discretionary Improvements, including, at a minimum, as-built drawings of each project. As-built drawings shall be new drawings or redline changes to drawings previously provided to Landlord. Tenant shall supply the textual documentation in computer format as requested by Landlord. 4.06 Indemnification. TENANT FURTHER AGREES TO DEFEND AND INDEMNIFY LANDLORD FROM ANY CLAIM ASSERTED BY LIEN CLAIMANTS ON THE PREMISES WHICH LANDLORD POSSESSES PURSUANT TO THIS LEASE, ARISING OUT OF THE PERFORMANCE OF CONSTRUCTION OF CONDITIONS PRECEDENT, REQUIRED IMPROVEMENTS, OR DISCRETIONARY IMPROVEMENTS BY TENANT OR TENANT'S CONTRACTOR ON THE MLK PROPERTY, THE PREMISES, OR THE CITY FACILITY. Lease of MLK Property by Landlord to Waste Management Page 6 of 28 4.07 Bonds Required of Tenant's Contractors. Prior to the start of construction by Tenant or Tenant's contractor on the City Facility or any other material alteration or other construction work on the City Facility that costs in excess of $50,000.00 in the aggregate, the Tenant shall, at no cost or expense to Landlord, cause to be made and executed by the construction contractor either one or two separate bonds, in accordance with Section 2253.021 of the Texas Government Code, as follows: (1) If the amount of the construction contract awarded is in excess of$50,000.00: (a) prior to the date of commencement of construction, the contractor shall furnish a payment bond in a sum equal to the full amount of the construction contract awarded; and (b) said bond shall be for the protection of and use by payment bond beneficiaries who have a direct contractual relationship with the construction contractor or any of its subcontractors who is actually supplying the public work labor or material. (2) If the amount of the construction contract awarded is in excess of$100,000.00, in addition to any bond required under subsection (1) above: (a) prior to the date of commencement of construction, the contractor shall furnish a performance bond in a sum equal to the full amount of the construction contract awarded; and (b) said bond shall be conditioned on the faithful performance of necessary construction and completion of improvements in accordance with approved final plans, detailed specifications and contract documents. Tenant shall ensure that all required bonds list Landlord as dual obligee. 4.08 Filing of Payment Bond. Tenant shall endorse its written approval upon the Payment Bond provided by Tenant's contractor and then record the Payment Bond with a copy of the Contract between Tenant and its Contractor with the County Clerk of Tarrant County, Texas, within which the City Facility is located. The filing and recording shall be in accordance with Section 53.203 of the TEXAS PROPERTY CODE such that any person or entity acquiring an interest in the City Facility will be entitled to rely upon the record of the Payment Bond as constituting payment of all claims and liens for labor, subcontracts, materials or specially fabricated materials incurred by the Contractor("Lien Claimants")as if each such Lien Claimant had filed of record a complete release and relinquishment of lien, in accordance with Section 53.204 of the TEXAS PROPERTY CODE. ARTICLE 5. USE OF PREMISES Lease of MLK Property by Landlord to Waste Management Page 7 of 28 5.01 Permitted Use of Premises. Tenant may use the Premises only for the purpose of its waste collection operations, but specifically excluding public retail or wholesale sales of compressed natural gas; provided, however, the parties agree that this Lease may be amended in writing, signed by each party, to allow for the retail sale of compressed natural gas, under the terms and conditions agreed to by the parties, and by Landlord's City Council. 5.02 Illegal Use Not Permitted. Tenant may not use any part of the Premises or any building situated on them for any use or purpose that violates any applicable law, regulation, or ordinance of the United States, the State of Texas, the County of Tarrant, or the City of Fort Worth, or other lawful authority with jurisdiction over the Premises. 5.03 Ordinances; Inspection. Tenant covenants and agrees that neither it, nor its officers, agents, employees, licensees, invitees or patrons shall make or suffer any unlawful, improper or offensive use of the Premises or any part thereof. Tenant further agrees to maintain the area in order to keep the Premises in a clean safe and sanitary condition at all times and shall comply with all ordinances of the City of Fort Worth. Landlord's agents, servants or employees shall be permitted by Tenant to make inspection of the Premises to ascertain compliance with the terms and provisions of this Agreement. 5.04 Licenses and Permits. Tenant shall maintain any and all licenses and permits from any applicable governmental entity, agency, or organization to conduct Tenant's operations on the Premises. Tenant's failure to maintain proper licensing and permitting for its operations shall be considered an event of default under this Lease. ARTICLE 6. MAINTENANCE AND ALTERATIONS OF PREMISES 6.01 Maintenance and Repair. Except where otherwise expressly provided herein, Tenant covenants and agrees that it will, at its sole expense, perform all upkeep, maintenance and repair necessary to keep the Premises in good condition and in compliance with all applicable codes and regulations, including but not limited to the "major components," which are the shell of the buildings, including the roof, doors, windows and exterior doors; foundations and slabs; and systems including electrical, plumbing, mechanical, and HVAC. Maintenance to the major components shall include preventive maintenance to include filter changes as necessary. Tenant shall perform, at its sole cost, such routine operational maintenance and housekeeping as is necessary to carry on Tenant's business, including but not limited to janitorial services, utilities, pest and vector control services, landscaping, irrigation, changing light bulbs, clearing clogged sinks and toilets, maintenance of oil-water separator, repairing or replacing leaking faucets or fixtures, repairing and replacing faulty door locks, and maintenance of wear surfaces such as carpet, floor tile, and paint. 6.02 Alterations.Tenant shall not make any modifications, renovations, improvements, alterations, changes, or enhancements to the Premises ("Alterations") that require a local, state or federal permit without Landlord's express authorization, which may not be unreasonably withheld. Such authorization must be in writing from Landlord, or its Lease of MLK Property by Landlord to Waste Management Page 8 of 28 designated representative ("Landlord's Representative"), which Landlord herein designates as the Director of the Transportation and Public Works Department, the Director of the Property Management Department, and the Director of Code Compliance, or their designees. Subject to 6.01 above, Tenant shall, at its sole expense, perform all upkeep, maintenance and repair necessary to all Alterations, and Landlord shall have no maintenance or repair obligation for the Alterations. No fixtures or real property improvements on the Premises may be removed, including but not limited to buildings and any compressed natural gas filling stations, without Landlord's express written authorization. It is intended by the parties that any real property improvements made on or fixtures attached to the Premises shall become the property of Landlord upon termination or expiration of this Lease at no cost to Landlord. 6.03 Right to Remove Personal Property. Tenant may, at any time while it occupies the Premises, remove personal property, furniture, machinery, or other equipment owned solely by Tenant (but specifically excluding fixtures or real property improvements as set forth in Section 6.02 above) in, under, or on the Premises, or acquired by Tenant, whether before or during the Term and any extension, such property being here and after referred to as "Tenant Property." 6.04 Vacating the Premises. (a) Expiration of Term. At the expiration of the Term, then on or before the date of expiration of this Agreement, Tenant shall vacate the Premises, remove all Tenant Property and must repair any damage to any buildings or improvements on the Premises resulting from the removal, restoring the Premises to a condition reasonably satisfactory to the Landlord, within no more than 30 days after vacating the Premises. If Tenant shall fail or neglect to remove said Tenant Property as set forth in this Section 6.04(a) , then said Tenant Property shall become the property of the Landlord. (b) Earlier Termination. At any termination of the Lease prior to the expiration of the Term, so long as Landlord provides timely notice as set forth below that the Lease is terminating, then on or before the date of termination of this Agreement, Tenant shall vacate the Premises, remove all Tenant Property and must repair any damage to any buildings or improvements on the Premises resulting from the removal, restoring the Premises to a condition reasonably satisfactory to the Landlord. It is the intent of the parties that if the Lease termination results from an event of default by Tenant under this Lease, Tenant shall have a maximum of 180 days from receipt of the notice of termination of this Lease, or a notice of termination of the Waste Collection Contract, to vacate the Premises and no more than 30 days after vacating the Premises to restore the Premises. If Tenant shall fail or neglect to remove said Tenant Property as set forth in this Section 6.04(b), then said Tenant Property shall become the property of the Landlord. ARTICLE 7. CONSIDERATION 7.01 Rent. The rent for this Lease is the fair market value rental of the Premises in the amount of$219,525 per year_("Rent"), as determined by the appraisal performed by Integra Realty Resources DFW, LLC on March 6, 2015, which appraisal is attached hereto and made apart hereof as Exhibit "F" - Appraisal. The parties acknowledge that Tenant, at its own cost, Lease of MILK Property by Landlord to Waste Management Page 9 of 28 shall construct improvements as part of the Conditions Precedent and Required Improvements, and intends to construct significant Discretionary Improvements at a current combined estimated cost of approximately $10,500,000. Tenant shall receive credits against the Rent for the improvements performed under the Conditions Precedent and Required Improvements, and for certain Discretionary Improvements, under the terms and conditions set forth in Section 7.02. 7.02 Rent Credits. During the initial term of this Agreement, Tenant shall receive a credit toward Rent in the amount of the expected value to the Landlord for capital improvements made to the City Facility, and to improvements made on the Premises, which allow the City Facility to receive the benefits, upgrades, and improvements pursuant to and in compliance with this Lease, provided that Landlord shall not be liable to Tenant for any amount expended for improvements in excess of the Rent. Landlord and Tenant agree to determine the cost of all improvements made by Tenant to the City Facility and the Premises under this Lease, and to apply all improvement costs to the term, including as the term may be amended and extended pursuant to Section 3.01, and to the vacate period or restoration period as set forth in Sections 6.01(a) and (b) of this Agreement. Tenant shall submit proposed improvements, for which it desires to receive a credit toward Rent, to Landlord for written approval in advance of performing any improvement. Failure to receive advanced written approval will result in no rent credit being granted. All improvements that result in rent credits must remain on or with the Premises at the termination of the lease. The parties agree that Landlord has no obligation to pay or credit Tenant for any construction or improvements made on the City Facility or the Premises once Tenant is no longer the Landlord's provider under the Waste Collection Contract, and nothing herein shall be construed so as to require Landlord to keep or have Tenant as a provider under the Waste Collection Contract or any future contract for waste collection, recycling, or any other service. 7.03 Tenant Responsibility. The request for approval from Tenant shall contain a complete description of the proposed improvement, the proposed method of acquisition to assure competitive pricing, the expected cost, and the expected useful life of the improvement. If the proposed improvement is approved for rent credit in writing by the Landlord, after the improvement is complete, the Tenant shall submit the actual unburdened direct cost of the improvement along with substantiating documentation such as contractor invoices with its request for rent credit. 7.04 Landlord Responsibility. The Landlord shall use a fair and reasonable method to validate each proposed improvement and determine what percent of the improvement will be of value to the Landlord. The Landlord shall also use a fair and reasonable method to validate the expected useful life of the improvement and approve or deny the proposed acquisition method. Using reasonable methods, the Landlord will then assign a pro-rated rate for the proposed improvement that is determined by multiplying the percent of the improvement that is of value to the Landlord times the percent of useful life expected for the improvement at the end of the lease term using straight-line depreciation. The Landlord shall include this pro-rated rate with the written approval back to the Tenant. When the request for rent credit is received, the Tenant's actual cost of the improvement will be multiplied by the pro-rated rate to determine the amount of the rent credit. Lease of MLK Property by Landlord to Waste Management Page 10 of 28 ARTICLE 8. TAXES 8.01 Payment by Tenant. In addition to the rent specified in Article 7, Tenant will pay and discharge all taxes, general and special assessments, and other charges of any kind levied on or assessed against the Premises and all interests in the Premises and all improvements and other property on them during the Term and any extension, whether belonging to Landlord or to Tenant. Tenant will pay all the taxes, charges, and assessments directly to the public officer charged with their collection before they become delinquent, and,to the extent permitted by law, TENANT WILL INDEMNIFY LANDLORD AND HOLD IT HARMLESS FROM ALL SUCH TAXES, CHARGES, AND ASSESSMENTS. Tenant may, in good faith at its own expense (and in its own name) contest any such taxes, charges, and assessments and must pay the contested amount, plus any penalties and interest imposed, if and when finally determined to be due. Tenant's failure to discharge any such tax, charge or assessment when finally due within ten (10) days after the date Landlord's written notice is received by Tenant shall constitute an event of default under Section 14.01 (d) below. However, Tenant's financial obligation to Landlord to liquidate and discharge such lien shall survive following termination of this Agreement and until such a time as the lien is discharged. ARTICLE 9. UTILITIES 9.01 Payment by Tenant. Tenant shall be responsible for the provision and payment of all utilities to the Premises. Utility service includes electricity, heating, cooling, water, and wastewater, stormwater, trash and recycling pickup, telephone, internet and wireless services. The Premises shall be separately metered for electric and water services, at Tenant's sole cost and expense. ARTICLE 10. CASUALTY 10.01 Substantial Casualty. (a) As used herein, the term "substantial casualty" shall mean (1) a fire, explosion, flood, tornado or other casualty of like character, or (2) a structural defect in any part of the Premises, or(3) any other act, condition or event, in any case not due to the negligence or breach of this Agreement by Tenant and resulting in needed repairs, replacement or other expenditure to the Premises that would require more than sixty(60) days for completion. (b) If the Premises are the subject of a substantial casualty, Tenant shall give immediate notice to the Landlord and to Landlord's casualty insurance provider. Landlord shall follow all required procedures to file a claim(s) for the damage caused by the casualty event. Tenant will have the option, exercisable by written notice given to Landlord within ninety (90) days after the occurrence of such substantial casualty, to terminate this Agreement upon the date specified in said notice, said date not to exceed one (1) year from the date of the substantial casualty. In such event, the Agreement shall expire as of such date in the same manner as if the date specified in said notice were the date herein originally specified for the expiration of the Agreement term and Lease of MLK Property by Landlord to Waste Management Page 11 of 28 Tenant shall have no obligation to make any expenditure in connection with such substantial casualty or the results thereof, unless Tenant's continued occupancy requires such expenditure. (c) If Tenant does not give notice as specified in Subsection (b) or waives its right to terminate, Landlord at its sole discretion may proceed to repair, restore, and rebuild the Premises to its former condition within one hundred eighty (180) days from the date of such damage; provided, however, that Landlord will be under no obligation to expend any amount on rebuilding or repairing the Premises in excess of the amount of insurance proceeds actually received by Landlord. (d) If Landlord chooses not to rebuild or restore the Premises, the Agreement will terminate. Such choice shall be made by written notice to Tenant within ninety (90) days after the occurrence of such substantial casualty. 10.02 Minor Casualty. The term "minor casualty" shall be defined in like manner as "substantial casualty" in Section 10.01 except that the length of time for repairs, replacements or other expenditures (the "needed repairs") to the Premises is less than sixty (60) days. If the Premises are the subject of a minor casualty, Tenant shall give immediate notice to Landlord and Landlord will proceed with reasonable diligence to repair such damage. In any case, if such repairs are not completed within ninety (90) days after the casualty, Tenant may terminate this Agreement. ARTICLE 11. INDEMNIFICATION AND INSURANCE 11.01 Indemnification. TENANT COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS AND DEFEND THE LANDLORD, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY DAMAGE OR LOSS AND/OR PERSONAL INJURY, INCLUDING DEATH, OF WHATSOEVER KIND OR CHARACTER; ARISING OUT OF OR ALLEGED TO ARISE OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THE PERFORMANCE OF THIS AGREEMENT, THE LEASING, OCCUPANCY, USE, CONDITION AND/OR MAINTENANCE OF THE PREMISES AND ANY AND ALL ACTIVITIES CONDUCTED THEREON, OR IN CONNECTION WITH THE ACTS OR OMISSIONS OF TENANT, ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, SUBTENANTS, PATRONS, GUESTS, LICENSEES, INVITEES OR TRESPASSERS; AND SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL INJURY OR DAMAGE TO SAID PREMISES OR ANY OTHER PROPERTY OF LANDLORD, ARISING OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THE PERFORMANCE OF THIS AGREEMENT, THE LEASING, OCCUPANCY, USE, CONDITION AND/OR MAINTENANCE OF THE PREMISES. 11.02 Liability insurance. Tenant shall at all times during the term hereof, maintain the following insurance policies: 1. General Liability naming the Landlord as an Additional Insured, $1,000,000 per occurrence, $2,000,000 aggregate Lease of MLK Property by Landlord to Waste Management Page 12 of 28 2.Automobile Liability with same coverage as above 3.Workers' Compensation including Employers Liability and a Waiver of Subrogation 4.Environmental Pollution Liability $5,000,000 per occurrence, $10,000,000 aggregate Said policies shall include the Landlord as an additional insured, as its interests may appear (ATIMA). Tenant shall furnish to Landlord a certificate of insurance verifying such coverage with a confirmation that such policy shall not be subject to cancellation except upon thirty (30) days' prior written notice to Landlord. Landlord may, at its option, also require Tenant to submit a copy of the policy or policies in effect as well as proof of payment of premiums. Insurance must be carried with firms licensed to do business in the State of Texas, and that have financial capability acceptable to Landlord. 11.03 Insurance for Contents of Buildings. Tenant shall be responsible for maintaining any policy of insurance that will insure against loss of property owned by Tenant that is located on the Premises. Said insurance shall waive any right of subrogation in favor of Landlord. 11.04 Fire and Extended Coverage: Boiler and Machinery Coverage. Landlord shall maintain a policy of fire and extended coverage insurance to cover the structures and mechanical systems included in the Premises and those structures immediately adjacent thereto. Such insurance policies shall be for full replacement value. Said insurance shall waive any right of subrogation in favor of Tenant. 11.05 Hazardous Use. Tenant will not permit the Premises to be used for any purpose which would render the insurance thereon void or the insurance risk more hazardous and will use its best efforts to use the Premises and to store its property in such a manner as to minimize risk of loss by casualty, it being acknowledged that the use of the Premises in the proper and ordinary conduct of Tenant's business for the purposes set forth herein shall not be considered in violation of this Section. 11.06 Independent Contractor. It is expressly understood and agreed that Tenant shall perform its obligations and responsibilities hereunder as an independent contractor and not as an officer, agent, representative or employee of the Landlord; that Tenant shall have exclusive control of and the exclusive right to control the details of its obligations and responsibilities and all persons performing same; that Tenant shall be solely responsible for the acts or omissions of its officers, agents, employees or other persons under its supervision, management and control; that the doctrine of respondeat superior shall not apply as between Landlord and Tenant and that nothing herein shall be construed as creating a partnership or joint enterprise between Landlord and Tenant. ARTICLE 12 ENVIRONMENTAL MATTERS 12.01 Definitions. For purposes of this Agreement, "Hazardous Materials"means and includes those substances deemed hazardous, toxic or dangerous under any Environmental Law (defined below), including, without limitation, asbestos or any substance containing asbestos, the Lease of MLK Property by Landlord to Waste Management Page 13 of 28 group of organic compounds known as polychlorinated biphenyls, flammable explosives, radioactive materials, chemicals known to cause cancer or reproductive toxicity, pollutants, effluents, petroleum and fuels derived therefrom, contaminants, emissions or related materials, and any items included in the definition of hazardous or toxic waste, materials, chemical compounds or substances under any Environmental Law. "Environmental Laws" collectively means and includes any present or future local, state or federal law or treaty, and any amendments thereto, including any common law doctrine of liability, relating to the environment, environmental protection or environmental conditions including but not limited to (i)the Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq ("ESA"); (ii)the Solid Waste Disposal Act,42 U.S.C. §§ 6901 et seq, as amended by the Resource Conservation and Recovery Act of 1976 ("RCRA") and the Hazardous and Solid Waste Amendment of 1984; (iii) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601 et seq, as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"); (iv) the Federal Water Pollution Prevention and Control Act, 33 U.S.C. §§ 1251 et seq; (v)the Air Pollution Prevention and Control Act, 42 U.S.C. §§ 7401 et seq; (vi) the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq; (vii) the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j; (viii) Chapter 361 of the Tex. Health & Safety Code, Solid Waste Disposal Act; (ix) 30 Tex. Admin. Code Chapter 350, The Texas Risk Reduction Program (TRRP)rule; (x) Chapter 12.5 of the Code of the Landlord of Fort Worth; and (xi) all rules, regulations, orders and decrees now or hereafter promulgated under any Environmental Law. 12.02 Prohibitions. Tenant agrees that it will not allow or permit the Premises to be used for the handling, transportation, storage, treatment or other use of any Hazardous Material provided that chemicals, fuel and other products may be used or dispensed on the Premises in connection with Tenant's permitted uses as specified in this agreement. 12.03 Compliance with Environmental Laws. Tenant agrees that it will comply with all applicable Environmental Laws throughout the term of this Agreement. 12.04 Removal of Hazardous Materials. Tenant agrees to act with all reasonable promptness to identify, manage and remove or treat any Hazardous Material that exists on or under the Premises as a result of Tenant's actions or omissions. Tenant has no obligation to manage, remove, or treat any Hazardous Material that exists on or under the Premises as a result of Landlord's, its agents, subcontractors, and their employees' acts or omissions. Tenant further agrees to remove or treat any Hazardous Material existing in, on, or under the adjacent property or waters, to the extent the presence of such Hazardous Material resulted from or arose out of the operations of Tenant. In the event Tenant should fail to perform such responsibility, Landlord may do so and all reasonable costs and expenses incurred by Landlord shall be reimbursed to Landlord by Tenant. Such reimbursement shall be due and payable in full by Tenant to Landlord within fifteen (15) days after written notice from Landlord to Tenant of the reasonable costs and expenses incurred. ARTICLE 13 ENVIRONMENTAL INDEMNIFICATION 13.01 The following words and phrases shall be defined as follows: Lease of MLK Property by Landlord to Waste Management Page 14 of 28 1. "Environmental Damages" shall mean all damages, losses, claims, judgments, penalties, fines, liabilities, diminished values, encumbrances, liens, costs, expenses of investigation, and the defense of any claim, whether or not such claim is ultimately defeated, results in a judgment or order of any kind, or is resolved by any good faith settlement, and of whatever kind or nature, whether direct or indirect, tangible or intangible, compensatory, exemplary, punitive, economic or non-economic, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, to the Landlord and any third parties, to the extent any of the foregoing are incurred as a result of the Tenant's occupancy or use of the premises, or due to Tenant's negligence, or arising from a violation of any Environmental Requirements by the Tenant, its contractor, vendor, employee, or agent, including by way of example but not limited to: a) Damages for personal injury or death, pain and suffering, mental or emotional distress, damage to property of any kind, environmental contamination, harm to natural resources, or the loss of all or part of the value or use of property; b) Reasonable fees incurred for the services of consultants, engineers, attorneys, contractors, experts, laboratories, and investigators related to any studies, cleanup, remediation, removal, response, abatement, containment, closure, restoration, monitoring work, civil or criminal defense, or the recovery of any other costs; and c) Fines, penalties, and costs to any federal, state, or local government for violations of environmental laws, permits, standards, or regulations. Fines penalties and costs include those assessed, imposed, levied or resulting from agreed orders or settlements. d) Citizen suits authorized by any federal or state environmental law; and e) Any other liability, claims, or judgments on the Landlord. 2. "Environmental Requirements" shall mean all applicable present and future statutes, regulations, rules, standards, permit requirements or conditions, plans, or authorizations of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states, and political subdivisions thereof, and all applicable judicial, administrative, and regulatory decrees, judgments, and orders; and all common law causes of action; all of the above relating to the protection of human health or the environment and being inclusive of, but not limited to: a) All requirements, including, but not limited to, those pertaining to emissions, discharges, releases, or threatened releases of wastes, substances, materials, pollutants, contaminants, petroleum products or derivatives, toxins, or other any other regulated or harmful matter whether solid, liquid, or gaseous, into the air, surface water, groundwater, stormwater, land, improvements, or requirements relating to the manufacture, processing, distribution, use,treatment, storage, disposal,transport, or handling thereof, and b) Licensing, permitting, reporting, facilities, sites, or operations related to environmental regulations; and c) All legal requirements pertaining to the protection of the environment, natural resources,the health and safety of employees or the public; and d) All common law causes of action related to health, safety, natural resources, and the environment. Lease of MLK Property by Landlord to Waste Management Page 15 of 28 13.02 TENANT SHALL RELEASE, INDEMNIFY, DEFEND, REIMBURSE, AND HOLD HARMLESS THE LANDLORD, ITS OFFICERS, AGENTS, EMPLOYEES, AND ASSIGNS AGAINST ANY AND ALL ENVIRONMENTAL DAMAGES AND THE VIOLATION OF ANY AND ALL ENVIRONMENTAL REQUIREMENTS, AS DEFINED HEREIN, TO THE EXTENT CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENT ACT OR OMISSION OF TENANT, ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, INVITEES, SUBTENANTS AND ARISING AT OR FROM THE PREMISES. NOTHING HEREIN SHALL RELIEVE THE LANDLORD NOR SHALL THE INDEMNITY EXTEND TO ANY ENVIRONMENTAL DAMAGES OR THE VIOLATION OF SAID ENVIRONMENTAL REQUIREMENTS RESULTING FROM LANDLORD'S ACTS OR OMISSIONS. LANDLORD HEREBY RELEASES TENANT, ITS OFFICERS, AGENTS, EMPLOYEES, AND ASSIGNS AGAINST ANY AND ALL ENVIRONMENTAL DAMAGES AND/OR VIOLATIONS OF ENVIRONMENTAL REQUIREMENTS TO THE EXTENT CAUSED BY LANDLORD, ITS CONTRACTORS, AGENTS, OR THEIR EMPLOYEES. THE PROVISIONS OF THIS ARTICLE SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT FOR A PERIOD OF TEN YEARS. HOWEVER, THIS SURVIVAL LANGUAGE DOES NOT SUPERSEDE OR AFFECT, IN ANY WAY, THE APPLICABLE STATUTE OF LIMITATIONS ON ALL CAUSES OF ACTION FOR WHICH LANDLORD OR TENANT MAY SEEK INDEMNIFICATION OR RELIEF HEREUNDER. ARTICLE 14. DEFAULT AND REMEDIES 14.01 Event of Default. The following shall be deemed events of default (herein so called)by Tenant under this Agreement: a. Tenant fails to use the Premises only for its waste collection operation; b. Tenant fails to meet the deadlines for the Conditions Precedent or the Required Improvements; c. Tenant makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors; d. Tenant vacates any substantial portion of the Premises for a period of longer than thirty (30) days, unless Tenant can demonstrate to the reasonable satisfaction of the Landlord that all reasonable efforts are being made by Tenant to occupy said Premises; or e. Tenant fails to comply with any other term, provision or covenant of this Agreement in any material respect. 14.02 Curing a Default. Lease of MLK Property by Landlord to Waste Management Page 16 of 28 Either party shall be in default under this Agreement if such party breaches any term or condition of this Agreement in any material respect. (a) Health and Safety; Habitability. In the event that such a breach puts at risk the health and safety of any persons, or renders the improvements at the MLK Property unable to continue to be occupied, and such breach remains uncured after 24 hours following notification, either written or oral, by the non-breaching party, or if the breaching party has diligently and continuously attempted to cure following receipt of such written notice but reasonably required more than 24 hours to cure, as determined by both parties mutually and in good faith, the non-breaching party shall have the right to elect, in its sole discretion, (i) to terminate this Agreement upon written notice of such intent to the breaching party, or (ii)to pursue any other legal remedies available to the non-breaching party. The non-breaching party shall also have the right to elect to cure the breach, provided that the breaching party shall be solely responsible for all actual and reasonable costs and expenses of the non-breaching party for such cure. (b) All Other Defaults. For all defaults other than those specified in Section 14.01(b) and 14.02(a), in the event such a breach remains uncured after 30 calendar days following written notice by the non-breaching party (or such other notice period as may be specified herein), or if the breaching party has diligently and continuously attempted to cure following receipt of such written notice but reasonably required more than 30 calendar days to cure, as determined by both parties mutually and in good faith, the non-breaching party shall have the right to elect, in its sole discretion, (i) to terminate this Agreement upon written notice of such intent to the breaching party, or (ii) to pursue any other legal remedies available to the non-breaching party. 14.03 All Notices to Terminate. Any notice to terminate the Agreement issued by Landlord to the Tenant based on a default by Tenant under this Article 14 shall give Tenant a maximum of 180 days from receipt of the notice to vacate the Premises and no more than 30 days after vacating the Premises to restore the Premises. 14.04 Other Remedies. Any termination of this Agreement as provided in this article will not relieve Tenant from paying any sum or sums due and payable to Landlord under this Agreement at the time of termination, or any claim for damages then or previously accruing against Tenant under this Agreement. Any such termination will not prevent Landlord from enforcing the payment of any such sum or sums or claim for damages by any remedy provided for by law, or from recovering damages from Tenant for any default under the Agreement. All Landlord's rights, options, and remedies under this Agreement will be construed to be cumulative, and not one of them is exclusive of the other. Landlord may pursue any or all such remedies or any other remedy or relief provided by law, whether or not stated in this Agreement. 14.05 Damages. In the event Landlord elects to terminate this Agreement by reason of an event of Tenant default after any of the Required Improvements or Discretionary Improvements are started but not completed ("Incomplete Improvements"), Landlord, in its sole discretion, shall determine whether the Incomplete Improvements shall be completed or removed, as follows: Lease of MILK Property by Landlord to Waste Management Page 17 of 28 (a) If the Incomplete Improvements are less than 70% complete, Lessor shall have the sole discretion to determine that either: (i) the Incomplete Improvements must be removed, in which case, Landlord shall at Landlord's sole discretion, direct Tenant to remove all components of the Incomplete Improvements, after which removal Tenant shall restore the Premises as near as possible to its condition prior to the start of the Incomplete Improvements, or (ii) the Incomplete Improvements must be completed, in which case Tenant must complete the Incomplete Improvements. If Tenant refuses to complete the Incomplete Improvements, then and only then may Landlord undertake to complete the Incomplete Improvements and Tenant shall be liable to Landlord for the actual costs to complete the Incomplete Improvements. (b) If the Incomplete Improvements are 70% or more complete at the time of Landlord's notice that it is terminating the Lease due to Tenant's default, than Tenant shall be required to complete the Incomplete Improvements as originally intended by the parties. Tenant shall be liable to Landlord for the amount of all actual loss and damage which Landlord may suffer by reason of such Incomplete Improvements. To the extent that a termination is triggered before the Incomplete Improvements are completed, this Section 14.05 shall survive the termination of this Agreement. ARTICLE 15. NOTICES 15.01 Notices. Any notice, demand, request or other communication hereunder given or made by either party to the other shall be in writing and shall be deemed to be delivered whether actually received or not, when deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested, addressed to the parties hereto at the respective addresses set out below, or at such other address as they may hereafter specify by written notice so given. a. If to Landlord: Property Management Dept. City of Fort Worth 1000 Throckmorton Street Fort Worth, TX 76102 Copy to: City Attorney 1000 Throckmorton Street Fort Worth, TX 76102 b. If to Tenant: Waste Management of Texas, Inc. Attn: Vice President of Real Estate Lease of WK Property by Landlord to Waste Management Page 18 of 28 720 East Butterfield Road, 4th Floor Lombard, IL 60148 Copy to: CT Corporation System 350 North St. Paul Street Dallas, Texas 75201 ARTICLE 16. GENERAL PROVISIONS 16.01 Right of Entry and Inspection. After receiving notice sent by Landlord at least 24 hours in advance, Tenant must permit Landlord or its agents, representatives, or employees to enter the Premises for the purposes of inspection; determining whether Tenant is complying with this Agreement; maintaining, repairing, or altering the Premises; or any other reasonable purpose During any inspection, Landlord may perform any obligations that Landlord is authorized or required to perform under the terms of this Agreement or pursuant to its governmental duties under federal state or local laws, rules or regulations. In the event of an emergency, no advance notice from Landlord is required. Provided, however, that nothing herein to the contrary shall prohibit or prevent Landlord from having, and Tenant shall ensure that Landlord has, ingress and egress over and through the Premises and access at all times to the portions of the Administration Building necessary to access Landlord's Fuel Management System. 16.02 Interpretation. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 16.03 No Third Party Rights. The provisions and conditions of this Agreement are solely for the benefit of the Landlord and Tenant, and any lawful assign or successor of the Tenant, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 16.04 No Partnership or Joint Venture. Tenant shall operate hereunder as an independent contractor and not as an officer, agent, servant, or employee of the Landlord. Tenant shall have the exclusive control of, and the exclusive right to, control the work designated to the Tenant to be performed hereunder, and all persons performing the same, and shall be solely responsible for the acts and omissions of its officers, agents, servants, contractors, subcontractors and employees. Neither Landlord nor Tenant shall be responsible under the Doctrine of Respondeat Superior for the acts and omissions of its officers, agents, servants, contractors, subcontractors, or employees. It is understood and agreed that the Landlord is not involved as a party to any activities that may be carried on by Tenant pursuant to this Agreement. Tenant acknowledges itself solely responsible for such activities and for all persons and property involved or used in connection with Tenant's use of the Premises. Provided, however, that no provision of this Agreement shall operate or be construed as a waiver by either party of any immunity from liability which it has or could be asserted under the doctrine of governmental immunity or any other immunity which it has under law. Lease of MLK Property by Landlord to Waste Management Page 19 of 28 16.05 Declared Emergency. In the event of a declared local, state or federal emergency, the Tenant will immediately make the facility available for use as deemed necessary by the Landlord in order to respond to the declared emergency. Should the declared emergency extend beyond 72 hours, the Landlord will seek reimbursement from federal, state and/or local funding and compensate the Tenant for any lost revenue as a result of declared emergency use, to the extent funds are received from these sources. 16.06 Force Majeure. If the Tenant becomes unable, either in whole or part, to fulfill its obligations under this Agreement due to acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemies, wars, blockades, insurrections, riots, epidemics, earthquakes, fires, floods, restraints or prohibitions by any court, board, department, commission or agency of the United States or of any States, any arrests and restraints, civil disturbances, or explosions, or some other reason beyond such the Tenant's control, including delays in issuance of permits or other required development authorizations caused solely by a governmental entity (collectively, "Force Majeure Event"), the obligations so affected by such Force Majeure Event will be suspended only during the continuance of such event. Tenant will give the Landlord written notice of the existence, extent and nature of the Force Majeure Event as soon as reasonably possible after the occurrence of the event. Tenant will use commercially reasonable efforts to remedy its inability to perform as soon as possible. Failure to give notice will result in the continuance of the Tenant's obligation regardless of the extent of any existing Force Majeure Event. 16.07 Binding Covenants. Subject to the limitations contained herein, the covenants, conditions and agreements made and entered into by the parties hereto are declared to be for the benefit of and binding upon their respective successors, representatives and assigns, if any. 16.08 Invalid Provision. It is agreed that, in the event any covenant, condition or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of such covenant, condition or provision shall in no way affect any other covenant, condition or provision herein contained; provided, however, that the invalidity of any such covenant, condition or provision does not materially prejudice either Tenant or Landlord in connection with the rights and obligations contained in the valid covenants, conditions or provisions of this agreement. 16.09 Sublease, Assignment and Successors. Tenant shall not assign,transfer, sublet, or convey, or otherwise dispose of the Agreement or the rights, title, or interest in or to the same or any part thereof without the prior consent of the City Council. In the event Tenant does, without such prior consent, assign, transfer, sublet, convey, or otherwise dispose of the Agreement or of the right, title or interest therein or any part thereof, Landlord may, at its discretion, terminate the Agreement. Consent will not be unreasonably withheld in the case of a proposed assignment to an entity that controls, is controlled by or is under common control of Tenant ("Affiliate"), but may be withheld for any reason or for no reason in the case of a proposed assignment by Tenant to a non-Affiliate, provided that Tenant shall not be released from its obligations hereunder. In the event of an assignment of any duty required under this Agreement, Tenant shall assume responsibility for performance of that duty including all liabilities pursuant to this Agreement. Landlord may not assign its rights and privileges under Lease of MLK Property by Landlord to Waste Management Page 20 of 28 this Agreement without the prior written consent of Tenant, which shall not be unreasonably withheld. 16.10 Waiver of Immunity. If Tenant, as a charitable association, political subdivision, corporation, entity or individual enterprise, has or claims an immunity or exemption (statutory or otherwise) from and against liability for damage or injury to property or persons, Tenant, to the extent permitted by law, hereby expressly waives its rights to plead defensively such immunity, including governmental immunity, or exemption as against Landlord arising under this Agreement. 16.11 Applicable Laws. The laws of the State of Texas shall govern this Agreement and the relationship created hereby. Venue for any action brought to interpret or enforce, or arising out of or incident to,the terms of this Agreement shall be in Tarrant County, Texas. 16.12 Severability of Provisions. If any of the provisions contained in this Agreement shall be held, for any reason, to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability, shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 16.1.3 Governmental Powers. It is understood that by execution of this Agreement, the Landlord does not waive or surrender any of it governmental powers 16.14 Captions. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 16.15 Sole Agreement. Except as set forth in the recitals, this Agreement constitutes the sole and only agreement of the parties hereto and supersedes any prior understanding or written or oral agreements between the parties respecting the subject matter. 16.16 Exhibits. All Exhibits attached hereto are deemed incorporated herein by reference as though made an integral part hereof. Q EXECUTED this the day of 4e,'1 er, 2015. CITY OF FORT WORTH WASTE MANAGEMENT OF TEXAS, INC. Y Fernando Costa Its Authof zed Representative Assistant City Manager Lease of MLK Property O �� I Al 11` E 1i��P11�`l by Landlord to Waste Management Page 21 of 28 "R IX" L RECOMMENDED BY: Director of (, DIM fly k APPROVED AS TQ FORM AND ALITY "'Leann D. Guzman Assistant City Attorney Exhibits: Exhibit "A" —MLK Property Exhibit "B" —MLK Improvements Exhibit "C" -- Landlord's Construction Requirements Exhibit "D" —Commencement Date Memorandum Exhibit "E" —Right of Entry Exhibit T" —Appraisal OFFICIAL ECORD Lease of MLK Property FT. WORTH, TX by Landlord to Waste Management Page 22 of 28 EXHIBIT "A" MLK PROPERTY [Survey] Lease of MLK Property by Landlord to Waste Management Page 23 of 28 e _ T 4 <4� HIS a gq� IS OR WE VADTH TO N.} o / ` I CdrG'j � r A„o. a w of F, � S,a 1 d; AFC x4 pr r k - 3 M NU NX- i t s S r i a I i n 4 u e i C wi S K d I %3��„s3S i n a° mr r W 1 _ J I s > s to Q h s , �� {� P € My F ti K h 's Ely Qk f� 1. t t e mn / 3�b m i I LEGAL DESCRIPTION ~ TRACT1 BEING a tract ofland, situated in the G.T. AshobrannerGurvey. Abstract Number 7, Tarrant County, Texas, and being part of Lot 1, Block 1, Southeast Service Center as shown on the plat nsoonJed iO Volume 388-112' Page 25, Plat Records, Tarrant County, Texae, and being more particularly described by metes and bounds as follows: BEGINNING at a 5/8 inch iron rod with cup stamped "LTRA" set at the southwest corner of Lot 1' Block 1. said Southeast Service Center' said iron rod also being the northwest corner ofLot 1, Block 1, Lake Arlington Business Park as shown on the plat recorded in Cabinet A, Slide 728, said plat records, said iron rod also being in the east right of way line of Village Creek Road (80' in width), from which a 3/4 inch iron rod found bears S 10040'17"W, a distance nf420.55feet; THENCE N 10022'25" E. departing the south line of Lot 1, Block 1. said Southeast Service Centar, and the north line of said Lake Arlington Business, along the east right of way line of said Village Creek Rood, o distance of 467.50 feet to a 5/8 inch iron rod with cap stamped "LTRA" set in the north line of Lot 1' Block 1' said Southeast Service Center and the south right uf way line of U.S. Highway 287 (Martin Luther King Jr. Freeway) (a variable width right ofvvav); THENCE deporting the east right of way line of said Village Creek Rood, along the north line of Lot 1' Block 1. said Southeast Service Center and along the south right of way line of said U.G. Highway 287 the following 4 ua||a; G 79^22'43" E (previously recorded as G 78°47'34^ E>, a distance of 10.53 feet to a Texas Department of Transportation brass cap found in concrete (controlling monument) (hereafter referred to an a TxO[)T monument) found at the beginning of curve to the left; Along the arc of said CUn/e to the |oft, a distance of248.00feet (previously recorded as 248.50 feet), through a central angle of 50024'01", having 8 radius of282.00feet, and 8 long chord which bears N 75"25'17" E. 240.14 feet to e TxD(}T monument (controlling monument) found; N 50013'16" E. a distance of 189.65 feet (previously recorded as N 5O°43'04" E' 189.27') to 8 TxDOT monument (controlling monument) found at the beginning of curve to the Fight; ' Along the arc of said curve to the right, a distance ofS0.03feet, through n central angle of 27001'05", having a radius of 210.00 fe8t, and e long chord which bears N 03043'49" E. 98.11 feet to a set 5V8 inch iron rod with cap stamped "LTRA"; THENCE 8 00002'41" E departing the north line of Lot 1' Block 1' said Southeast Service Center and the south right of way line of said U.G. Highway 287, a distance ofJ13.10 feet to a eotx-out� ' THENCE 8 89057'19" W, 8 distance OfO3J7 feet to a aatx-uut; THENCE 80O°O2'41" E, 8 distance of205.02 feet tO8 set magnetic nail; THENCE N 88057'10" E' a distance of 77.23 feet to o set 5/8 inch iron rod with cap stamped "LTRA"; LEGAL DESCRIPTION THENCE S 00 002'41" E, a distance of 104.51 feet to a 5/8 inch iron rod with cap stamped "LTRA" set in the south line of Lot 1, Block 1, said Southeast Service Center, and the north line of said Lake Arlington Business Park; THENCE S 89 057'19" W (previously recorded as N 89 029'23" W), along the south line of Lot 1, Block 1, said Southeast Service Center, and the north line of said Lake Arlington Business Park, a distance of 574.66 to the POINT OF BEGINNING, and containing 260,746 square feet 5.986 acres of land more or less; LEGAL DESCRIPTION iU ,��,.� �� x�` TRACT2 BEING 8 tract ofland, situated in the G.T. AahabnannerGu/vey' Abstract Number 7, Tarrant County, Texas, and being part of Lot 1, Block 1, Southeast Service Center as shown on the plat recorded in Volume 3OO-112. Page 25, Plat Records, Tarrant County, Texaa, and being more particularly described by metes and bounds uafollows: BEGINNING at 1/2 inch iron rod (controlling monument) found at the southwest corner ofLot 2R' Block 2. Re-plat of Southeast Service Center as shown on the plat recorded in Cabinet A' Slide 3343. said Plat Records, said iron rod also being in the north line of Lot 1' Block 1' Lake Arlington Business Park as shown on the plat recorded in Cabinet A' Slide 728' said plat records; THENCE 8 89057'19" VV (previously recorded as N 89029'23" VV)' along the south line of Lot 1' Block 1, said Southeast Service Center, and the north line of said Lake Arlington Business Perk' a distance of 861.35 feet to a 5/8 inch iron rod with cap stamped "LTRA" set; THENCE N 00002'41" VV, departing the south line of Lot 1. Block 1, Said Southeast 8en/ino Centar, and the north line of said Lake Arlington Business, a distance of 104.51 feet to a 5/8 inch iron rod with cap stamped ''LTRA'' set; THENCE 8 89057'19" W, e distance of77.23 feet to a set magnetic nail; THENCE N 00002'41" VV. o distance nf205.02 feet toa set x-out; THENCE N 89057'19" E, e distance of83.77 feet to a set x-out; THENCE N 00002'41" VV' a distance of 313.16 feet to a set 5/8 inch iron nod with cap stamped "LTRA" in the north line of Lot 1' Block 1' said Southeast Service Center and the south right of vvoy line of U.G. Highway 287 (Martin Luther Ring Jr. F/eevvov) /a variable width right of vvay\' and the beginning ofa curve tu the right; THENCE along the north line of Lot 1. Block 1' said Southeast 8en/ima Center and the south right of way line of said U.G. Highway 287 the following 3 calls; Along the 8Fo of said curve to the right' a distance of 86.02 f881, through a central angle of 23028'13", having a radius of21O.0O feet' and 8 long chord which bears N 88058'27^ E' 85.42 feet to e Tx[}OT monument (controlling monument) found; 8 79021'19"E' a distance of62U.4Sfeet (previously recorded as 8 78047'37^ E' 620.40') to o 5/8 inch iron rod with cap stamped "LTF<A" set at the beginning of curve to the right; Along the arc of said curve to the right, a distance of 120.81 fent, through o central angle of 03025'57", having a radius of 2,166.83 feet, and a long chord which bears S 77037'24" E. 1297Q feet to a 5/8 inch iron rod with cap stamped "JOVV Inc." (controlling monument) found at the northwest corner of the aforementioned Lot 2R' Block 2' Re-plat of Southeast Service Center; THENCE G 05037'45" E (previously recorded eoGO4°57'37^ E'>' departing the north line of Lot 1, Block 1' said Southeast Service Center and the south right of way |iD8 of said U.S. Highway 287' along the west line of said Lot 2F|' Block 2, Re-plat of Southeast Service Center, o distance LEGAL DESCRIPTION of 543.73 to the POINT OF BEGINNING, and containing 540,939 square feet 12.418 acres of land more or less; EXHIBIT "B" MLK Improvements Lease of MLK Property by Landlord to Waste Management Page 24 of 28 �u lezll3 96#eor < m LLJ Xl'H1bOM i�10J"AMJ'W JNIH b3H-Lnl Nllbt/W 0009 N z Q! G 111=13W11 ONV IN M&603 ONO W U) LL Z(q) W Lj� W aoz2 W ZW �y 2 F WO U=OR O K W Z Z� W°OW �J�C - Q OU JOWU OW F << N zQHO rS tOW � W K O OUZN O J J p ° E UaxN� WZ -Wz.p E U. N�Q3Qp ° V OIA� p \ O x ©©l NF�Z ❑ orc voi N a IN z€ z V No � � � " �o ¢ I w � Z W. s�o x � z Z x- Wm O n x wo U W w r 3�ij0 H Q mo15-Z N x N� z_ o w V� e Z \3� n HStlM V Op�� =w o o p z z w w N � �x r�v Z% Lu °� zz Q O N O � N O ZO »ZZ W O rn N m o 0 o sz w y 99 - Q O w O _._...._ ' 1- Sao °�/�. z o w f� pp W O� Ug JZ `^^�: Z g �U h 00 } OO It O 6Mp —6 Wtl 9Z:6 SIoZ/£t/£ a w5 .�4VaM ld£I—£0—SLOZ\}tlaaWO a>,ar\7uawaeaeay\u6isao—uoo ad\XL 4YOM'id—WM—l8ZWL3—S1\BMafwd M6aa foa3\aoafwe iu—'O\:s 3WVN31LA EXHIBIT "C" CONSTRUCTION REQUIREMENTS (To be attached) Lease of MLK Property by Landlord to Waste Management Page 25 of 28 Exhibit C Landlord's Construction Requirements New or Replacement Concrete Subgrade Preparation and Stabilization: 1. Lime treatment shall be used underneath the heavy duty 8" concrete pavement, and flexbase the subgrade shall be scarified to a depth of 8" and mixed with a minimum 8% hydrated lime by dry weight. (48 lbs./SY per 8" depth) a. The mixture shall be compacted to a minimum of 95% standard proctor dry density (ATSM D698) within 2% of the soil's optimum moisture content. 2. Lime stabilization should extend a minimum of 1' beyond the edge of the pavement. 3. The use of sand as a leveling course and aggregate as a base course is prohibited. Portland Cement Concrete (PCC) Pavement: 1. Heavy Duty 8" Concrete pavement shall have a minimum 28-day compressive strength of 4,000 PSI and 5% air entrainment. 2. Joint spacing shall be between 12' and 15' on center 3. Pavement shall be reinforced with #3 Bars @ 18" on center each way. New or Replacement Asphalt 1. Asphalt to be placed in two lifts. 2. Top Layer 3" Type "D" HMAC. 3. Lower Layer 3" Type "B" or"D" HMAC. 4. Tack coat shall be applied to the concrete base material prior to laying lower layer of HMAC. 5. Underlayment shall be 8" of concrete base material. ASPHALT TO } BE PLACED I': � T#0 !JETS TRENCH REPAIR UVITS } EX CONCRETE BASE MATERIAL—, } 11 H FO;i TREWH REPAIR USER r Pa TACK COAT SECTION 03 34 16 } rrrr t wf t. ,rrfrrrr4rbr, - rrrri4rr -I II�I- + + + + + + + +• + + 4J + =4• I III• EXHIBIT "D" Commencement Date Memorandum Lease of MLK Property by Landlord to Waste Management Page 26 of 28 EXHIBIT "D" COMMENCEMENT DATE MEMORANDUM THIS MEMORANDUM is made as of by and between the City of Fort Worth, a Texas municipal corporation ("Landlord") and Waste Management of Texas, Inc., a Texas corporation("Tenant"). Recitals: WHEREAS, Landlord and Tenant are patties to that certain Lease Agreement dated (the "Lease") (City Secretary Contract Number ) for certain leased premises (the "Leased Premises")located at 5000 MLK Freeway, 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. NOW, THEREFORE, Landlord and Tenant agree as follows: 1. The actual Commencement Date is 2. Capitalized terms not defined herein shall have the same meaning as set forth in the Lease. TENANT: LANDLORD: WASTE MANAGEMENT OF TEXAS, INC. THE CITY OF FORT WORTH A Texas a Texas municipal corporation By: By: Name: Name: Title: Title: Assistant City Manager APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney ATTEST: City Secretary EXHIBIT "E" Right of Entry Lease of MLK Property by Landlord to Waste Management Page 27 of 28 EXHIBIT "E" TEMPORARY RIGHT OF ENTRY FOR CITY OF FORT WORTH PROPERTY STATE OF TEXAS § § KNOW ALL BY THESE PRESENTS COUNTY OF TARRANT § That City of Fort Worth, a Texas municipal corporation ("Grantor") does by these presents grant and convey to Waste Management of Texas, Inc., a Texas corporation, herein after referred to as "Grantee" a temporary right of entry onto property described as 5000 Martin Luther King Freeway, hereinafter referred to as the "Property", for the purpose of performing certain required improvements to the Property in compliance with and as set forth in the lease agreement ("Lease") (City Secretary Contract Number ) entered into effective , 2015, by and between Grantor and Grantee for portions of the Property. GRANTEE SHALL INDEMNIFY, RELEASE,AND HOLD HARMLESS GRANTOR FOR ANY AND ALL CLAIMS ARISING FROM GRANTEE'S USE OF THE PROPERTY. Grantee restore the Property to a condition as similar as possible to that which it was in immediately prior to accessing the Property under this Right of Entry, except as to the alterations and improvements made to the Property in compliance with the Lease. Upon execution of this right of entry, Grantor will grant Grantee and its contractors access to the Property for the purpose stated herein, until such time as the Project is completed, at which time the above described temporary right of entry becomes void. This Right of Entry shall include the right of Grantee and its employees, agents, representatives, or contractors to access the Property. For any conflict between this right of entry and the Lease,the Lease shall control. TO HAVE AND TO HOLD the above described right of entry, together with all and singular, the rights and appurtenances thereto, anywise belonging unto the said Grantee, is successors and assigns, for the purposes set forth above. [SIGNATURES APPEAR ON FOLLOWING PAGE] EXECUTED this the day of , 20 GRANTOR: CITY OF FORT WORTH, a Texas municipal corporation Fernando Costa, Assistant City Manager Approved as to Form and Legality: Assistant City Attorney GRANTEE: WASTE MANAGEMENT OF TEXAS, INC. a Texas corporation By: Name: Title: EXHIBIT "F" Appraisal (to be attached) Lease of MLK Property by Landlord to Waste Management Page 28 of 28 Integra Realty Resources DFW, LLC Appraisal of Real Property Southeast Service Center Industrial Property 5000 Martin Luther King Jr. Freeway Fort Worth,Tarrant County,Texas 76119 Prepared For: City of Fort Worth Effective Date of the Appraisal: March 6, 2015 Report Format: Appraisal Report—Standard Format IRR-DFW, LLC File Number: 116-2015-0076 pw r r rr l „a ma „ as a° N 1.g P h � w f Y,? Southeast Service Center 5000 Martin Luther King Jr. Freeway Fort Worth,Texas Integra Realty Resources 930 West First Street T 817-332-5522 DFW Suite 400 F 817-336-1621 Fort Worth,Texas 76102 March 9,2015 Bette Chapman Real Property Coordinator City of Fort Worth 1000 Throckmorton Street Fort Worth,Texas 76102 SUBJECT: Market Value Appraisal Southeast Service Center 5000 Martin Luther King Jr. Freeway Fort Worth,Tarrant County,Texas 76119 IRR- DFW, LLC File No. 116-2015-0076 Dear Ms. Chapman: Integra Realty Resources—DFW, LLC is pleased to submit the accompanying appraisal of the referenced property.The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property. The client for the assignment is City of Fort Worth, and the intended use is for property disposition purposes and lease negotiations. The subject property is known as the "Southeast Service Center" and is segmented into two tracts at the discretion of the City of Fort Worth. At the request of the client, each tract is valued independently. No consideration for bulk value is made. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP),the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute,and applicable state appraisal regulations. To report the assignment results,we use the Appraisal Report option of Standards Rule 2- 2(a)of the 2014-2015 edition of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, we adhere to the Integra Realty Resources internal standards for an Appraisal Report—Standard Format.This type of report has a moderate level of detail. It summarizes the information analyzed,the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions. It meets or exceeds the former Summary Appraisal Report requirements that were contained in the 2012-2013 edition of USPAP. The subject is an existing industrial property containing 17,993 square feet of gross building area in three buildings. The improvements were constructed in the 1970s and are owner Bette Chapman City of Fort Worth March 9, 2015 Page 2 occupied as of the effective appraisal date.The site area is 18.404 acres or 801,685 square feet. Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions,and limiting conditions expressed in the report, our opinion of value is as follows: Value Conclusions by Tract Tract Label Land Areas in SF Land Areas in Acres Building SF Value Conclusion West Tract 260,746 5.986 8,618 $1,350,000 East Tract 540,939 12.418 9,375 $1,900,000 Note:The above value conclusions do not include any accounting for bulk valuation. Concluded Lease Rates West Tract Lease Rate per Unit Lease Rate Annual 131,476 SF of Surplus Land $1,200 /Acre Per Month $43,463 per Year 8,618 SF of Building Area supported by $13.00 /SF of Building Area/Year $112,034 per Year 129,270 SF of Land $155,497 per Year East Tract Lease Rate per Unit Lease Rate Annual 456,564 SF of Surplus Land $1,000/Acre Per Month $125,775 per Year 9,375 SF of Building Area supported by $10.00/SF of Bui I di ng Area/Yea r $93,750 per Year 84,375 SF of Land $219,525 per Year Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results.An extraordinary assumption is uncertain information accepted as fact.If the assumption is found to be false as of the effective date of the appraisal,we reserve the right to modify our value conclusions. 1. The vaIuation of the West Tractis based on the assumption tha t the Ci ty wi I I fill a bermed water pond area near the southwest corner of the site,and that a drive approach will be constructed providing ingress/egress from Village Creek Road. The value conclusions are based on the following hypothetical conditions that may affect the assignment results.A hypothetical condition is a condition contrary to known fact on the effective date of the appraisal but is supposed for the purpose of analysis. 1. Noneutilized. irr, Bette Chapman City of Fort Worth March 9, 2015 Page 3 If you have any questions or comments, please contact the undersigned.Thank you for the opportunity to be of service. Respectfully submitted, Integra Realty Resources-DFW, LLC Gregory B. Cook, SR/WA Mark A. Newman Certified General Real Estate Appraiser Certified General Real Estate Appraiser Texas Certificate#TX-1329987-G Texas Certificate#TX-1321108-G Telephone: 817-332-5522, ext. 208 Telephone: 817-332-5522, ext. 215 Email:gcook @irr.com Email: mnewman @irr.com ia-r Summary of Salient Facts and Conclusions 1 Summary of Salient Facts and Conclusions 1 Income Capitalization Approach 74 General Information 3 Leased Status of Property 74 Identification of Subject 3 Market Rent Analysis 74 Current Ownership and Sales History 3 Stabilized Income and Expenses 87 Purpose of the Appraisal 3 Net Operating Income 89 Definition of Market Value 3 Capitalization Rate Selection 90 Definition of Property Rights Appraised 4 Direct Capitalization Analysis 92 Intended Use and User 4 Reconciliation and Conclusion of Value 93 Applicable Requirements 4 Exposure and Marketing Times 94 Report Format 4 Certification 95 Prior Services 5 Assumptions and Limiting Conditions 97 Scope of Work 5 Economic Analysis 7 Addenda Surrounding Area Analysis 7 A. Appraiser Qualifications Industrial Market Analysis 16 B. Comparison of Report Formats C. Property Information Property and Investment Classification 16 D. Comparable Data Dallas/Fort Worth Industrial Market 17 Comparable Land Sales Property Analysis 19 Comparable Land Leases Land Description and Analysis 19 Comparable Improved Sales Improvements Description and Analysis 24 Comparable Rentals Real Estate Taxes 36 E. Engagement Letter Highest and Best Use 37 Valuation 39 Valuation Methodology 39 Land Valuation 40 West Tract (5.986 Acres; 260,746 SF) 41 East Tract(12.418 Acres;540,939 SF) 48 Summary of Land Values 53 Ground Lease Analysis 54 Sales Comparison Approach 60 Office Building and Service/Fuel Bldg. 60 Maintenance Bldg. 67 Final Value Indication—Sales Comparison Approach 73 Southeast Service Center 01" Identification of Subject Summary li ent Facts and Conclusi Property Name Southeast Service Center Address 5000 Martin Luther King Jr.Freeway Fort Worth,Tarrant County,Texas 76119 Property Type industrial Owner of Record City of Fort Worth Tax ID 02804654 Legal Description Lot 1A,Block 1,Southeast Service Center Addition to the City of Fort Worth,Tarrant County,Texas. Land Area 18.404 acres;801,685 SF Gross Bui I di ng Area 17,993 SF Gross Leasable Area 17,993 SF Percent Leased Owner occupied Year Built 1970s Zoning Designation K-Heavy Industrial,provides for heavy industrial uses that may be noxious or offensive due to odors,smoke,dust, noise,fumes or vibration. Highest and Best Use-As if Vacant Industrial use Highest and Best Use-As Improved Continued industrial use Exposure Time;Marketing Period 2-12 months;2-12 months Effective Date of the Appraisal March 6,2015 Date of the Report March 9,2015 Property Interest Appraised Fee Simple Market Value Indications: West Tract East Tract Cost Approach Not Used Not Used Sales Comparison Approach $1,350,000 $1,900,000 Income Capitalization Approach $1,300,000 $1,825,000 Value Conclusion $1,350,000 $1,900,000 The values reported above are subject to the definitions,assumptions,and limiting conditions set forth in the accompanying report of which this summary is a part.No party other than CityofFort Worth and employees,agents,and assigns ofthe CityofFort Worth mayuse or relyon the information,opinions,and conclusions contained inthe report.It is assumed thatthe users ofthe report have read the entire report,including all ofthe definitions,assumptions,and limiting conditions contained therein. Concluded Lease Rates West Tract Lease Rate per Unit Lease Rate Annual 131,476 SF of Surplus Land $1,200 /Acre Per Month $43,463 per Year 8,618 SF of Building Area supported by $13.00 /SF of Building Area/Yea r $112,034 per Year 129,270 SF of Land $155,497 per Yea r East Tract Lease Rate per Unit Lease Rate Annual 456,564 SF of Surplus Land $1,000 /Acre Per Month $125,775 per Year 9,375 SF of Building Area supported by $10.00 /SF of BuildingArea/Year $93,750 per Year 84,375 SF of Land $219,525 per Year Southeast Service Center LIr Identification of Subject - 2 Extraordinary Assumptions and Hypothetical Conditions The value conclusions are subject to the following extraordinary assumptions that may affect the assignment results.An extraordinary assumption is uncertain information accepted as fact.If the assumption is found to be false as of the effective date of the appraisal,we reserve the right to modify our vaI ue conclusions. 1. The valuation of the West Tract is based on the assumption that the City will fill a bermed water pond area near the southwest corner of the site,and that a drive approach wi II be constructed providing ingress/egress from Village Creek Road. The vaIueconclusions are based on the following hypothetical conditions that may affect the assignment results.A hypothetical condition is a condition contrary to known fact on the effective date of the appraisa I but is supposed for the purpose of analysis. 1. None utilized. Southeast Service Center ®rr Identification of Subject 3 General Information Identification of Subject The subject is an existing industrial property containing 17,993 square feet of gross building area in three buildings.The improvements were constructed in the 1970s and are owner occupied as of the effective appraisal date.The site area is 18.404 acres or 801,685 square feet.The land size is based on a land survey provided by the client. The property is further identified as follows: Property Identification Property Name Southeast Service Center Address 5000 Martin Luther KingJr. Freeway Fort Worth,Texas 76119 Tax ID 02804654 Legal Description Lot 1A,Block 1,Southeast Service Center Addition to the City of Fort Worth, Tarrant County,Texas. Current Ownership and Sales History The owner of record is the City of Fort Worth.According to tax records,the City acquired the property on November 27, 1986 for an unknown price and from an unknown seller. That deed record could not be located by the appraisers. Since the time of acquisition,the property has received minimal maintenance but is functionally sound. HVAC units were replaced in 2011 and new ceiling tiles were installed in 2012. Site maintenance has also been done. Other repairs and regular maintenance over time are evident. To the best of our knowledge, no sale or transfer of ownership has occurred within the past three years, and as of the effective date of this appraisal,the property is not subject to an agreement of sale or option to buy, nor is it listed for sale. Purpose of the Appraisal The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property as of the effective date of the appraisal, March 6, 2015. We have also estimated market level lease rates for the improved portions of the property and surplus land areas. The date of the report isMarch 9, 2015.The appraisal is valid only as of the stated effective date or dates. Definition of Market Value Market value is defined as: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale,the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Southeast Service Center Er Definition of Property Rights Appraised 4 - • Buyer and seller are typically motivated; • Both parties are well informed or well advised,and acting in what they consider their own best interests; • A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto;and • The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g];also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10,2010,page 77472) Definition of Property Rights Appraised Fee simple estate is defined as, "Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power,and escheat." (Source: The Dictionary of Real Estate Appraisal, Fifth Edition,Appraisal Institute, Chicago, Illinois, 2010) Intended Use and User The intended use of the appraisal is for property disposition purposes and lease negotiations.The client and intended user is the City of Fort Worth, and other intended users are the employees, agents, and assigns of the City of Fort Worth.The appraisal is not intended for any other use or user. No party or parties other than the City of Fort Worth and the employees, agents, and assigns of the City of Fort Worth may use or rely on the information, opinions, and conclusions contained in this report. Applicable Requirements This appraisal is intended to conform to the requirements of the following: • Uniform Standards of Professional Appraisal Practice (USPAP); • Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute; and • Applicable state appraisal regulations. Report Format This report is prepared under the Appraisal Report option of Standards Rule 2-2(a) of the 2014-2015 edition of USPAP.As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal,we adhere to the Integra Realty Resources internal standards for an Appraisal Report—Standard Format.This type of report has a moderate level of detail. It summarizes the information analyzed,the appraisal Southeast Service Center ®rr Prior Services _5 methods employed, and the reasoning that supports the analyses, opinions, and conclusions. It meets or exceeds the former Summary Appraisal Report requirements that were contained in the 2012-2013 edition of USPAP. For additional information, please refer to Addendum B—Comparison of Report Formats. Prior Services USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have previously appraised the property that is the subject of this report for the current client within the three-year period immediately preceding acceptance of this assignment. Scope of Work To determine the appropriate scope of work for the assignment,we considered the intended use of the appraisal,the needs of the user,the complexity of the property, and other pertinent factors. Our concluded scope of work is described below. Valuation Methodology Appraisers usually consider the use of three approaches to value when developing a market value opinion for real property. These are the cost approach, sales comparison approach, and income capitalization approach. Use of the approaches in this assignment is summarized as follows: Approaches to Value Approach Applicability to Subject Use in Assignment Cost Approach Not Applicable Not Utilized Sales Comparison Approach Applicable Utilized Income Capitalization Approach Applicable Utilized The sales comparison approach is the most reliable valuation method for the subject tracts due to the following: • There is an active market for similar properties, and sufficient sales data is available for analysis. • This approach directly considers the prices of alternative properties having similar utility and a probable buyer would base a purchase price decision primarily on the prices of competing properties. irr Southeast Service Center Scope of Work 6 The income capitalization approach is an applicable valuation method because: • Sufficient market data regarding income, expenses, and rates of return, are available for analysis. The cost approach is not applicable to the assignment considering the following: • The age of the improvements would limit the reliability of an accrued depreciation estimate. • There are limited land transactions in the market area of the subject, making estimates of underlying land value subjective. • This approach is not typically used by market participants,except for new or nearly new properties. Research and Analysis The type and extent of our research and analysis is detailed in individual sections of the report. This includes the steps we took to verify comparable sales,which are disclosed in the comparable sale profile sheets in the addenda to the report. Although we make an effort to confirm the arms-length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable. Inspection Gregory B. Cook,SR/WA conducted an interior and exterior inspection of the property on January 20, 2014, accompanied by Michael Gange. Mark A. Newman conducted an interior and exterior inspection on March 6, 2015,accompanied by Pedro Martinez. Southeast Service Center Er Surrounding Area Analysis 7 - Economic Analysis Surrounding Area Analysis Boundaries The subject is located within the Near Southeast Fort Worth surrounding area. The Near Southeast Fort Worth surrounding area is comprised of the 76105 and 76119 zip codes. A map identifying the subject within the Near Southeast Fort Worth surrounding area is below. SURROUNDING AREA MAP East ForfVllorth tee.° aedovobrook n ' 4 "eons Ivanta r 4 Medical�District FIN. H easy - enuey o n Ave E Ma, Ave aFrent 007 L Barr St y J a / $s rc �' Il Sub 7ect m ar a SOW Martin lather Kim Jr. S Near SE:Fort�Worth , NealSW - caxenm„graa Fort Worth I �or Arlingtonl ` E Se .; tl ..,__ _ -.,i` Arll t } tii b E r 2072 o _ 287 ..` 2005 Far SWIFort Worth Forest Hill•Everman,Kennedale` nnerjele rta4 o�ro rF-,i�rsma`r,•uo-m ".zap=aw.��:wsx rax��vea 1� Fotest ®r Southeast Service Center Surrounding Area Analysis -8 Access and Linkages Roadways providing primary access to the area and major city streets are highlighted on the map below. ACCESS & LINKAGES MAP log � 2&0 't 1 J.akland d Edereille _ _ - Gateway Park Lake \ Park Sandy I.eadovYorook Dr _ 2 --Penk- 'E R.Rrp'.N'T 160 Pa 1,an lag a St I" d�. \ a. (( Dixie ' Normandy PL Rose Parf: Rose tfill "VJ adal St `„j Park T E-K-1 �'—�- ' vendley Memorial { -- ER,-,:edale StI Hal TA b,M=—Wrack _ Park Cemetery Shur _ ti hAVe� E E jr if jt, i f ,� r. ill{ajohn �� srk O` r / Ryan I lace�t ,! t �/� 267 — t ,;t �P'ark k .c v Lake t .+ 1M[Wr9ar St Artingturr r Worth Helg t Park y j 3- , , . i Prairie E seminar D { 7og Park 1t _ Al Bus n�Rxlg ( i 1 y� -"Sreenbr!a Park s' =� 287 ?29&afornia Pkwy E \ - Bus 1,731' °Edgecliff r 1 4 .1 Surrounding Area Access & Linkages Primary North-South Access: Loop 820 Highway 287 Primary East-West Access: Loop 820 Interstate 30 Interstate 20 Major Streets: Lancaster Avenue/Highway 180 Rosedale Street Miller Avenue Mansfield Highway Riverside Drive Southeast Service Center ��r Surrounding Area Analysis 9 Public transportation in the form of bus service is provided by the Fort Worth Transportation Authority—the T. The local market perceives public transportation as good compared to other areas in the region. However,the primary mode of transportation in this area is the automobile. Public Services The Near Southeast Fort Worth surrounding area is served by the Fort Worth Independent School District. Police and fire protection is provided by the City of Fort Worth. Demand Generators ® Texas Wesleyan University, a United Methodist institution, Y was founded in 1890 and is located along Rosedale Street in �� eastern Fort Worth. The private liberal arts univeristy has a student enrollment of nearly 3,200 and a full-time faculty of ; 168. Texas Wesleyan University offers more than 50 undergradute majors and 10 graduate programs. The university is home to the nation's largest nurse anethesia program as well as a law school. Recently the university ' } entered into an agreement with Texas A&M University to form the Texas A&M University School of Law at Texas Wesleyan University. 1 ■ Tarrant County College South Campus is one of five campuses t within the Tarrant County College (TCC) District. The South Campus opened in 1967 and was the original campus of the TCC District. It is located along the north side of Interstate Highway 20 in between Campus Drive and Wichita Street.dry' Nearly 50,000 students are enrolled in the one of TCC's j associate or technical programs.Z ® Mason Heights is an 83 acre residential and office project located along U.S. Highway 287 near Berry Street. The planned development is within Tax "`'Y Increment Reinvestment Zone 12, which was created to help I! spur development within southeast Fort Worth. Mason Heights will be the largest project to be constructed in the area in more than 20 years. The development will include 134 single-family homes, 124 townhomes, a 260-unit apartment community and an assisted living campus. Additionally, plans call for 150,000 square feet of office space.3 1 Texas Wesleyan University,http://txwes.edu/info/ 2 Tarrant County College South Campus,https://www.tccd.edu/About_TCC/College_History.html 3 Baker,Sandra,"Mason Heights developer starts residential and office project,"Fort Worth Star Telegram,11une 2012. http://www.sta r-telegram.com/2012/05/31/3999858/mason-heights-developer-starts.htmI#storyI ink=cpy Southeast Service Center irr. Surrounding Area Analysis 10 ■ Renaissance Square is a 67-acre development located at the — intersection of U.S. Highway 287 and East Berry Street, just north of Mason Heights. When completed, the project will -' encompass more than 500,000 square feet of retail space illli;[�3 .s including sporting goods, electronics, cinema, restaurants, — . banking and pharmacy uses. Major tenants currently include Walmart Supercenter, Ross Dress for Less, Shoe Carnival, tl Marshall's and Dollar Tree. Peripheral developments include two multi-tenant strip centers, 7-Eleven, Burger King, Popeye's, McDonald's, Panda Express, Jack-in-the-Box and Cook Children's.4 • Berry/Stalcup Urban Village is approximately 37.7 acres designated by the City of Fort Worth for mixed use i a redevelopment. It is one of five Urban Villages in Sotheast Fort Worth that provide greater density development with funding incentives. • Loop 820 East / Lake Arlington Industrial Growth Center is one of eight designated intense industrial use areas that is well integrated into the transportation network and contains a ww high concentration of jobs. The surrounding area contains greater than 10,000 employees per square mile. Higher intensity industrial uses are encourages within this area that would otherwise be discouraged in other parts of the City. As a result, industrial growth centers like this are attractive to large commercial and regional industrial users5 and has become home to seven truck terminals.The subject is located with this growth center. 4 Renaissance Square,http://www.rsfortworth.com/project.php 5 http://fortworthtexas.gov/uploaded Files/Planning/Comprehensive_Planning/04LandUse_06.pdf Southeast Service Center ®rr Surrounding Area Analysis 11 DEMAND GENERATORS MAP ra $ve HI St N«m Texas PO Rose Hd �O? j11 i %1E i £lace Mem«Iel ©" WK edala(St I = Wesleyan Handley park Cemetery Patk � eaete Si si Universtty o - = P � — t Hon Tandy Ak gn Ave, Berry I talcup $ yr Renaissance m p lkJO"" Urban Illage 1' Square W 13e' St' Mason �� I at r Heights Lake � i V�A�rger St A7AregWlt v n l4a k, �ma Pa ' j d Dry Industrial Tarrant County Prairie oo Growth Center m College South ( °oap�k Arington YI Campus t ffir to T A R -id N T o - Vd 1 0 HwY Greenbri0� G 1 287` ( Park ( /: �'� 2072 Ce6forNa Pkw I Edilgediff 20 51 Vlag Forest Hill I aus ft —a Blvd E L Kennedaie ILL- Southeast Service Center ®rr Surrounding Area Analysis 12 Demographic Factors A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table. Surrounding Area Demographics Near SE Fort 2014 Estimates Worth Dallas MSA Texas Population 2010 65,414 6,426,214 25,145,561 Population 2014 67,464 6,887,537 26,668,922 Population 2019 70,937 7,477,539 28,695,796 Compound%Change 2010-2014 0.8% 1.7% 1.5% Compound%Change 2014-2019 1.0% 1.7% 1.5% Households 2010 19,769 2,320,283 8,922,933 Households 2014 20,602 2,480,158 9,468,956 Households 2019 21,828 2,690,939 10,202,119 Compound%Change 2010-2014 1.0% 1.7% 1.5% Compound%Change 2014-2019 1.2% 1.6% 1.5% Median Household Income 2014 $26,155 $56,739 $50,464 Average Household Size 3.2 2.7 2.8 College Graduate% 7% 31% 26% Median Age 30 35 34 Owner Occupied% 56% 62% 64% Renter Occupied% 44% 38% 36% Median Owner Occupied Housing VaIue $60,675 $158,841 $137,359 Median Year Structure Built 1963 1986 1984 Avg.Travel Timeto Work in Min. 28 29 27 Source:Claritas Median household income in the Near SE Fort Worth area is substantially lower than that of the Dallas MSA and the State of Texas in general. Residents have a lower level of education attainment and median owner-occupied housing value is considerably lower as well. However,the work force is also young and housing is affordable. Southeast Service Center ®rr i Surrounding Area Analysis 13 Surrounding Area Land Uses Land uses for the Near SE Fort Worth Surrounding Area may be summarized as follows. SURROUNDING AREA LAND USES Character of Area Urban to Suburban Predominant Age of Improvements 20 to 50 years Predominant Quality and Condition Average Approximate Percent Developed 85% Infrastructure/Planning Average Predominant Location of Undeveloped Land South and West Prevailing Direction of Growth Infill along major corridors Development Activity and Trends During the last five years, development within the immediately surrounding area has been predominantly of industrial uses,which comprise the primary land use proximate to SE Loop 820 and Martin Luther King Jr. Freeway. However, an infill regional power center is under construction in the northwest portion of the neighborhood that illustrates that there is pent-up demand for newer retail development in the area. SURROUNDING AREA DEVELOPMENT ACTIVITY Name/Address Property Type Size/Units Completion Knight Waste Services 4901 Parker Henderson Road Service Facility 11,952 SF 2011 Fort Worth SPEC Building Materials Corp. 5225 Martin Street Warehouse/Distribution 30,000 SF 2011 Fort Worth Fort Worth Parole Office#415 4836 Carey Street Office 12,928 SF 2011 Fort Worth Southeastern Freight Lines 5300 Martin Street Truck Terminal 88,559 SF 2013 Fort Worth Sun Valley Industrial Park 4900 Sun Valley Drive Warehouses Two 5,000 SF 2013 Fort Worth Two 7,500 SF Renaissance Square SE Berry St.&Mitchell Blvd. Retail 450,000 SF Under Construction Fort Worth Southeast Service Center irr Surrounding Area Analysis 14 Subject's Immediate Surroundings In the subject's immediate vicinity, land uses are predominantly industrial in nature. ._ 3 Es M. .......... r x Subject's Immediate Surroundings North Industrial Flex Warehouses South Industrial Truck Terminal East Industrial Municipal Use West Unimproved Land and Industrial Office Warehouses Southeast Service Center 01M Surrounding Area Analysis 15 Outlook and Conclusions In comparison to other areas in the region,the area is rated as follows: SURROUNDING AREA ATTRIBUTE RATINGS Highway Access Above Average Demand Generators Average Convenience to Supporting Land Uses Average Employment Stability Average Demographic Trends Below Average Property Compatibility Average General Appearance of Properties Below Average Appeal to Market Below Average Price/Value Trend Average The area is in the stabilization stage of its life cycle and some parts of the area are being redeveloped. Given the history of the area and its growth trends, it is anticipated that property values will remain stable in interior areas and will increase along commercial corridors in the near future. Southeast Service Center LIr I X X City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 1219/2014 DATE: Tuesday, December 09, 2014 REFERENCE NO.: G-18381 LOG NAME: 20WASTE MGMT USE OF MLK PROPERTY SUBJECT: Authorize Execution of an Agreement with Waste Management of Texas, Inc.,to Lease Approximately Thirteen Acres of City of Fort Worth Property Located at 5000 Martin Luther King Freeway and Waive Permit Fees (COUNCIL DISTRICT 5) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute an Agreement with Waste Management of Texas, Inc., to lease approximately thirteen acres of City of Fort Worth property located at 5000 Martin Luther King Freeway,to be more accurately determined by a survey, with consideration in the form of real property improvements of value to the City in the amount of the fair market rental value of the property; 2. Approve the waiver of all permit fees associated with the project in the approximate amount of$10,000.00; and 3. Find that the waiver of such fees serves to carry out the public purpose of construction of facilities to be owned by the City of Fort Worth pursuant to the Agreement, and that adequate controls are in place through the Agreement to carry out such public purpose. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to authorize the City Manager to enter into an Agreement with Waste Management of Texas, Inc. (WMTX) to lease approximately thirteen acres of City of Fort Worth (City)property located at 5000 Martin Luther King Freeway for consideration in the form of real property improvements of value to the City in the amount of the fair market rental value of the property. The MLK Property is approximately twenty acres in size and is currently used by various departments for multiple purposes, including: as a laydown yard for both signal/streetlight equipment and street services stockpiles; City equipment storage; office space; fuel dispensing; a materials testing., laboratory; an environmental management laboratory; general storage; and curbside collection cart storage, repair, and maintenance. The City and WMTX are parties to a separate Agreement for collection of residential garbage, refuse and small bulky waste, recyclables, certain commercial solid waste, yard waste, construction and demolition and large brush, and large bulky waste (City Secretary Contract No. 28358-E1, (M&C C-26067) "Waste Collection Contract") with a term of April 1, 2013 to March 31,2023 and two ten-year renewal options. As part of this agreement, WMTX is required to convert their curbside collection fleet to compressed natural gas (CNG) by April 11, 2016. WMTX desires use of the City property located at 5000 Martin Luther King Freeway (MLK property) because WMTX finds the MLK property to be in a location more conducive to their operations and proposes to provide site improvement at the MLK Property to the City in exchange for WMTX's use of the MLK Property. WMTX is planning to provide valuable consideration to the City through site improvements at the MLK property that include fencing, paving, building additions, CNG fueling system, and other items that WMTX expects to be valued at approximately $10,500,000.00. Improvement values will be counted as the lease value and no cash is planned to be exchanged directly between the City and WMTX. Staff has reviewed the WMTX request and recommends that the City enter into an Agreement with WMTX to ensure that sufficient controls are in place to carry out the Agreement stated above. The basic terms of the Agreement will be as follows: 1. WMTX will improve the MLK property through modernization of the fleet maintenance building. WMTX will be responsible for obtaining all necessary permits, however, on property controlled by the City. The City will waive permit fees associated with the improvements pursuant to exceptions in Section 109.2.1 of the City of Worth Building Code, and for all necessary permit fees on the leased premises,the City would waive the permit fees to carry out the public purpose of construction of facilities to be owned by the City of Fort Worth pursuant to the Agreement, which shall ensure that adequate controls are in place to carry out such public purpose. 2. WMTX will improve the MLK property by installing a compressed natural gas (CNG) fueling system that includes on-site gas compression, piping, fueling racks, and necessary CNG supply to the MLK Property. This CNG fueling system will include 10 fuel connections for the City's use and WMTX will charge the City only for CNG used for City fleet at the same rate WMTX purchases the CNG from the gas provider. 3. WMTX will improve the western portion (approximately six acres) of the MLK Property to allow the City's operations to function without interruption. These improvements will include adding new access directly to Village Creek Road, fence and gate improvements along the property perimeter and for separation of WMTX and City operations, ground improvements with concrete or compacted gravel, and interior building improvements to allow necessary City operations. Some City operations will be relocated as part of this Agreement including curbside collection cart storage, repair and maintenance operations will move to the Southside Service Center and traffic signal/streetlight storage will be relocated to the James Avenue Service Center. 4. If WMTX is unable to secure the necessary CNG supply to the MLK Property, the lease will terminate and WMTX will at its sole cost return the MLK Property to a like condition thus allowing the City's continued use of the site in a similar manner as to what it was prior to WMTX initiating their lease on the site. Improvements made on the MLK property, including the western portion used by the City for City operations, will be used as the valuable consideration for the term of the Agreement. The consideration shall be equal to or greater than the amount of the current appraised value of the property, and any credit as consideration given to WMTX for the improvements by the City shall be on the only reimbursement or compensation WMTX shall receive from the City for improvements. The City is in the process of finalizing the survey to obtain accurate acreage for purposes of this Agreement. The term of the Agreement will expire on March 31, 2023, or upon any earlier termination of the Waste Collection Contract. Nothing in this Agreement shall ever be construed as amending, renewing or extending the Waste Collection Contract. Any future Agreement terms between the City and WMTX will be brought back to the Mayor and City Council for consideration. When WMTX and the City no longer have an active Agreement for the MLK property, any real property improvements made by WMTX transfer to City ownership. The MLK property is located in COUNCIL DISTRICT 5. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that the final executed Agreement should include a financial analysis which provides the City due consideration in exchange for the value of the lease based upon the proposed terms outlined above. FUND CENTERS: TO Fund/Account/Centers FROM Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Fernando Costa (6122) Orij4inating Department Head: Douglas W. Wiersig (7801) Additional Information Contact: Michael A. Gange (6569) ATTACHMENTS 1. 5000MLKMnC Nov2014.pdf (Public) 2. MLK Property Option 2.pdf (CFW Internal)