Downtown Development Authority

PUBLIC NOTICE BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY MEETING The Battle Creek Downtown Development Authority will hold an Electronic Regular Meeting through Zoom, which is Enterprise Video Conferencing, beginning at 3:30 P.M. on Monday, April 26, 2021. The meeting will take place electronically because of the closure of City Hall and/or social distancing requirements due to the COVID-19 Pandemic, current rates of infection in Calhoun County, gathering limitations in Emergency Orders issued under the Public Health Code by Michigan’s Director of Health and Human Services, and the determination that the personal health of members of the public or the public body would be at risk if the meeting were held in person, as permitted by the Open Meetings Act (OMA) based upon the October 15, 2020 Extension of the Declaration of Local Emergency by Calhoun County Board of Commissioners 1. At least one City staff member, classified as a critical infrastructure worker, may be physically present in City Hall to facilitate the electronic meeting, while Authority board members, other staff, and members of the public will participate remotely by Zoom. The building will remain closed to the public during the time of the meeting. Members of the public may participate in the meeting by calling in to the Zoom meeting at the following telephone number: 312-626-6799. The caller will be prompted to enter the meeting ID number: 999 4184 2529 The caller will be placed into a virtual “waiting room” until it is their time to speak during public comment. Members of the public may watch the entirety of the meeting live on Facebook Live. To watch: Watch on the City’s Facebook page: https://www.facebook.com/CerealCityMichigan Members of the public may also email a public comment, which is compliant with the rules of public comment to be read at the meeting to City Clerk Victoria Houser cityclerk@battlecreekmi.gov; or by writing the question or comment on paper, placing it in an envelope addressed to the Battle Creek Downtown Development Authority by 12:00 pm (noon) on Monday, April 26, 2021 into the blue freestanding Drop Box located in the drive-up lane to the Northeast of City’s Hall’s main entrance. The question or comment, if compliant with the City Commission meeting rules set out in Battle Creek Ordinance, 212.02(XVII), will be read aloud at the meeting during public comment. The City of Battle Creek will provide necessary reasonable auxiliary aids and services, such as closed captioning for the hearing impaired and audiotapes of printed materials being considered in the meeting upon notice to the City of Battle Creek. Individuals with disabilities requiring auxiliary aids or services should contact the City of Battle Creek by writing or calling the following: Battle Creek City Clerk Battle Creek, MI 49016 (269) 966-3378 (Voice) (269) 966-3348 (TDD) Questions concerning this matter may be directed to the City Manager’s office, at 966-3378. 1 See Resolution 218 dated 10/20/2020 for electronic meeting procedures and other information required by §§ 3 and 3a of the OMA.  DDA Board of Directors Monday, April 26, 2021 at 3:30 p.m. LOCATION Zoom Virtual Meeting AGENDA 1. Call to order Chair 2. Welcome and Introductions (as needed) Chair 3. Approval of minutes from January 25, 2021 (action required) Chair 4. Financials (actions required) Staff a. Interim financial statements through March b. Budget Amendment FY 2021 c. Budget Approval FY 2022 5. 80 W. Michigan lease (Suite B – action required) Staff 6. Project Update Staff a. Scooter ordinance b. McCamly Hotel presentation c. River restoration d. Van Buren Lot RFQ 7. Citizen (Public) comments 8. Board member comments 9. Adjourn Chair Attachments - Public notice - Agenda - Minutes from January 25, 2021 - Interim financials through March 2021 - Budget memo - Budget amendment for FY 2021 - Budget proposal for FY 2022 o Commercial leasing incentive pilot o Food Reimagined overview o Elm Street parcel environmental map (161 E. Michigan) - Simply Sensational Berries lease (Suite B) - Draft scooter ordinance - BCU McCamly presentation - River restoration map - Van Buren lot development RFQ  BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY BOARD OF DIRECTORS Monday January 25, 2021, 3:30 PM Meeting VIA ZOOM MEMBERS PRESENT: Kim Carter, Paul Conkey, Rebecca Fleury, John Godfrey, Edward Guzzo, Nelson Karre, Cody Newman, Ross Simpson, Kyra Wallace Ex-Officio: Commissioner Carla Reynolds and Commissioner Boonikka Herring Advisory: Rochelle Nunley-Hatcher ABSENT: OTHERS PRESENT: Ted Dearing, Linda Morrison, John Hart, Jessica VanderKolk, Sarah VanWormer, Richard Bolek, Call to order: Chair Conkey called meeting to order at 3:32 pm. Welcome and Introductions: Members introduced themselves. Approval of Minutes: MOTION: Mr. Godfrey moved that the Battle Creek Downtown Development Authority Board of Directors approve the meeting minutes from October 26, 2020. Ms. Wallace supported the motion. Unanimously approved. Funding Requests: a. Hollander Development –Mr. Dearing explained that Hollander Development is planning a 50 unit residential rental development at 85-87 W. Michigan Avenue downtown at the former Shranks Cafeteria site. The project will result in new construction in the form of a 6 to 7 story, midrise apartment building identified as Sophia Square. Hollander will be making application to the Michigan State Housing Development Authority for Low Income Housing Tax Credits February 1, 2020, and is requesting a $500,000 1% 50 year loan from the DDA. The City Commission has approved a Payment in Lieu of Taxes (PILT) for this project. The developer Matthew Hollander and Mr. Dearing addressed many questions from the Board including cash flow projections, housing vouchers, use of local trades in construction, the management company that will be used for Sophia Square, and vacancy assumptions. MOTION: Mr. Karre moved that the Battle Creek Downtown Development Authority Board of Directors Authorize the Board Chair to execute a letter of intent for this project.. Mr. Newman supported the motion. Unanimously approved. b. 80 W. Michigan leasehold improvements – Mr. Karre and Mr. Newman recused themselves from the vote on this issue due to their relationships with the potential lessee Torti Taco. Mr. Karre moved to the Zoom waiting room during all discussion. Mr. Dearing discussed the lease opportunity for Torti Taco and the necessary leasehold improvement investment at the current Patrami Joe’s location (owned by the DDA). The board is asked to reallocate $100,000 in the Downtown Special Projects budget line item from the Battle Rock project to improvements at 80 W. Michigan. Based on analysis of the current lease and future lease with Torti Taco, there will be a return on investment over the five-year lease term of approximately $82,370. Mr. Dearing and Mr. Hart answered questions from the board about the large investment and the space changes that will bump out into the parking structure and the roll up door. MOTION: Mr. Godfrey moved that the Battle Creek Downtown Development Authority Board of Directors commit $100,000 to this project contingent on a new lease with Torti Taco. Commissioner Harring supported the motion. Unanimously approved. c. 34 E. Michigan demolition – Mr. Dearing discussed the situation, the unknowns with the project, and the additional costs due to structural elements and safety concerns. The board has previously allocated $300,000 in the Downtown Special Projects line item of the budget, and this request is to reallocate $80,000 from the Battle 1  Rock project to fund the additional costs associated with the demolition of specific parts of 34 E. Michigan. Mr. Dearing addressed the board’s concerns about the responsibilities of the property owner, additional future costs, and the City’s efforts to recover costs that have been incurred. MOTION: Mr. Nelson moved that the Battle Creek Downtown Development Authority Board of Directors reallocate an additional $80,000 to this project. Mr. Newman supported the motion. Unanimously approved. The agenda item for Purchase Option – Upholdings Development has been suspended. Financials: a. FY2020 Audit Presentation – Revenue Services Director Linda Morrison presented the audited financial statements for the year ended June 30, 2020. Ms. Morrison noted that the independent certified public accounting firm of Rehmann Robson provided an unmodified opinion, which is the highest level of assurance available for a financial audit. The DDA audited financial statements as well as all other City audited statements are available in the Finance section of the web site. MOTION: Mr. Godfrey moved that the Battle Creek Downtown Development Authority Board of Directors accept the June 30, 2020 audited financial statements. Mr. Guzzo supported. Unanimously approved. b. FY2020 Annual Report – Revenue Services Director Linda Morrison presented the annual report for the year ended June 30, 2020. Ms. Morrison noted this report is required by and filed with the Michigan Department of Treasury. It includes details of the capture of property taxes, and the revenues and expenditure numbers reconcile to the audited financial statements. MOTION: Mr. Karre moved that the Battle Creek Downtown Development Authority Board of Directors accept the June 30, 2020 annual report. Mr. Godfrey supported. Unanimously approved c. Interim financial statements through December 31, 2020 – Revenue Services Director Linda Morrison presented the interim financial statements for the six months ended December 31, 2020. Property tax revenue is recorded early in the fiscal year and debt service occurs in the fourth quarter, making the bottom line look exceptionally good at this particular point in the fiscal year. The actual expenses have not caught up at this point in time to the amended budget for the CBD maintenance. Next quarter’s financial statements will be reflective of the amended budget. MOTION: Mr. Guzzo moved that the Battle Creek Downtown Development Authority Board of Directors accept the December 31, 2020 interim financial statement. Ms. Reynolds supported. Unanimously approved Project Update: Social District Expansion. There was much discussion about the potential expansion of the social district and the various commons that are included. There is a request to allow for downtown expansion to allow walkability among the 9 potential licensees. There was much discussion about the liability of licensees and the City. A request for change will go before the City Commission in February. Member/Citizen Comments: None Adjourn: 5:53 pm 2  City of Battle Creek Downtown Development Authority Interim Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For the Nine Months Ended March 31, 2021 7/1/20 - 3/31/21 Budget Variance Adopted Budget Amended Budget Transactions Positive/(Negative) GENERAL FUND GENERAL REVENUES: Tax Increment Revenue $ 3,205,928 $ 3,205,928 $ 1,686,064 -1,519,864 State Aid Revenue (Personal Property Tax Replacement) 1,612,721 1,690,000 3,180,702 1,567,981 Prior Year Tax Increment Revenue - - 0 0 Rents 24,826 24,826 20,063 -4,763 Interest earnings - - -308 -308 Miscellaneous - - 0 0 Total General Revenues 4,843,475 4,920,754 4,886,521 43,046 EXPENDITURES: Debt Service - Term 2017/2018 Bonds - Pipeline Refunding 2034/2025 2,653,047 2,653,047 568,523 2,084,524 2013 Capital Improvement Bonds 2033 180,000 180,000 31,895 148,105 Total Debt Service 2,833,047 2,833,047 600,418 2,232,629 General Operating Expenditures: Administration 14,950 14,950 12,630 2,320 CBD maintenance 642,629 698,629 516,972 125,657 CBD downtown plantings 50,000 50,000 37,500 12,500 Street construction - - - 0 Downtown Policing 117,269 117,269 87,952 29,317 Kellogg Arena support 370,000 370,000 370,000 0 Economic Development Fund support 120,000 120,000 90,000 30,000 Downtown Special Projects 180,000 530,000 265,435 -85,435 Total General Operating Expenditures 1,494,848 1,900,848 1,380,489 114,359 Total Expenditures 4,327,895 4,733,895 1,980,907 TOTAL GENERAL FUND REVENUES 4,843,475 4,920,754 4,886,521 43,046 TOTAL GENERAL FUND EXPENDITURES 4,327,895 4,733,895 1,980,907 2,346,988 EXCESS REVENUES OVER (UNDER) OPER. EXPENDITURES $ 515,580 $ 186,859 $ 2,905,614 2,390,034 Fund Balance, beginning of year (updated based on 6/30/20 audit) 1,091,308 1,091,308 1,091,308 Fund Balance, ending (GENERAL FUND) $ 1,606,888 $ 1,278,167 $ 3,996,922  City of Battle Creek Memo To: Downtown Development Authority Board of Directors From: Ted Dearing, Assistant City Manager Copy: Linda Morrison, Finance Director Date: April 26, 2021 Re: FY 21 Budget Amendment and FY 22 Budget To the Members of the Board, Fiscal Year 2021 Budget Amendment The board packet includes an amendment for fiscal year 2021. Notable adjustments in the amendment include: - An increase in the administration line item to provide funding for attorney fees associated with a needed plan amendment to fund the Hollander Sophia Square project. The board approved a $500,000 low interest loan for this project and we need to amend the existing DDA plan to facilitate the loan. The amendment provides an opportunity to ensure the DDA plan reflects all current funding activities. - Added support for the city’s intermodal center (ITC). A reduction in anticipated income from long-term parking has resulted in a potential deficit in the city’s Intermodal Transportation Center enterprise fund. The city is seeking DDA support until travel and fees return to normal. - By the end of the fiscal year we anticipate spending $468,568 of the $530,000 allocated for downtown special projects. A portion of the funds allocated for the 80 W. Michigan buildout for Torti Taco will be shifted to FY 22. You will note that we did see a slight decline in our tax increment and State Aid revenue from what we projected at the time of our last budget amendment. You will also note that the allocation of revenues between these two line items has changed. That will be the case going forward. The decline is mostly offset by a reduction in expenditures in Downtown Special Projects. Fund balance is projected at $1,249,149 for year end. Fiscal Year 2022 Budget For fiscal year 22, we are looking at a decline in anticipated revenue of about $314,000 versus FY 21. Rents are up due to the new Torti Taco lease. The city is asking the DDA to continue to fund the portion of the 2013 Capital Improvement Bonds associated with the Quiet Zone ($180,000). The Administrative line includes $5,000 extra for the DDA plan amendment. Downtown maintenance includes a full year of the additional maintenance position added to the downtown team during FY 21 (as approved by the board). We plan to continue with downtown plantings ($50,000), support for the downtown police 1 officer ($117,269) and funding at the previous year level for Small Business Development ($120,000). We are also asking again for a small subsidy for the city’s ITC ($5,000). We are not requesting any funding for Kellogg Arena in the upcoming fiscal year as other funding is temporarily available for venues such as the Arena as a result of the pandemic. Money normally set aside to support the Arena will be shifted to Downtown Special Projects. As a result, the budget for Special Projects in FY 22 is $603,511. We have identified certain projects for which we are asking support as detailed below. The balance of the funds will be used to support small business in the district affected by the pandemic. Milton commercial lease incentive program $50,000 Food Reimagined initiative (Tiger Room support) $50,000 Elm Street mound removal $100,000 80 W. Michigan (Torti Taco) buildout $50,000 Dumpster corral $30,000 Total $280,000 The Milton pilot lease program is a partnership with BCCF to incentivize commercial leasing in the downtown. The program will start with a pilot at the Milton but the intent is to expand the program to all buildings in the core downtown as feasible. The Food Reimagined initiative may be familiar to some of you. It is a local stakeholder effort to leverage our food assets (infrastructure and technical expertise) to accelerate companies within the food and beverage industry (inclusive of branded retail products, agricultural and food technology/processing companies). The Elm Street mound removal leverages EPA and other stakeholder funding to remove the contaminated mound at the corner of E. Michigan and Elm Street adjacent to the Shouldice property. The project will allow for a future expansion by Shouldice. The 80 W. Michigan building includes the balance of the funds authorized by the board during FY 21 that went unexpended before the end of the fiscal year. These funds are shifting from FY 21 to FY 22. While we have not set aside any funds for the Battle Rock project in FY 22, we will still need to address the dumpster setup behind New Holland and Rice’s Shoes going forward. Thirty thousand is set aside for this project. Revenues equal expenditures for the fiscal year as proposed. We are anticipating a fund balance of $1,249,149 at the end of the year. 2 BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY Fiscal Year 2020-2021 Proposed Amendment FY 20-21 FY 20-21 FY 20-21 Proposed Amended Budget Estimated Amendment GENERAL FUND GENERAL REVENUES: Tax Increment Revenue $ 3,205,928 $ 1,640,304 $ (1,565,624) State Aid Revenue (Personal Property Tax Replacement) 1,690,000 3,180,702 1,490,702 Prior Year Revenue - - - Rents 24,826 20,644 (4,182) Interest earnings - - - Miscellaneous - - - Total General Revenues 4,920,754 4,841,650 (79,104) EXPENDITURES: Debt Service - Term 2008/2013 Bonds - Pipeline Refunding 2025/2034 2,653,047 2,653,047 - 2013 Capital Improvement Bonds 2033 180,000 180,000 - Total Debt Service 2,833,047 2,833,047 - General Operating Expenditures: Administration 14,950 21,296 6,346 CBD maintenance 698,629 698,629 - CBD downtown plantings 50,000 50,000 - Downtown Policing 117,269 117,269 - Intermodal Facility support 5,000 5,000 Kellogg Arena support 370,000 370,000 - Economic Development Fund support 120,000 120,000 - Downtown Special Projects 530,000 468,568 (61,432) Total General Operating Expenditures 1,900,848 1,850,762 (50,086) Total Expenditures 4,733,895 4,683,809 (50,086) TOTAL GENERAL FUND REVENUES 4,920,754 4,841,650 (79,104) TOTAL GENERAL FUND EXPENDITURES 4,733,895 4,683,809 (50,086) EXCESS REVENUES OVER (UNDER) OPER. EXPENDITURES $ 186,859 $ 157,841 $ (29,018) Fund Balance, beginning of year 1,091,308 1,091,308 - Fund Balance, end of year (GENERAL FUND) $ 1,278,167 $ 1,249,149 $ (29,018) BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY Fiscal Year 2021-2022 Proposed Budget FY 21-22 FY 20-21 FY 20-21 Proposed Amended Budget Estimated Budget GENERAL FUND GENERAL REVENUES: Tax Increment Revenue $ 3,205,928 $ 1,640,304 $ 1,584,693 State Aid Revenue (Personal Property Tax Replacement) 1,690,000 3,180,702 2,922,620 Rents 24,826 20,644 35,767 Interest earnings - - - Miscellaneous - - - Total General Revenues 4,920,754 4,841,650 4,543,080 EXPENDITURES: Debt Service - Term 2008/2013 Bonds - Pipeline Refunding 2025/2034 2,653,047 2,653,047 2,672,297 2013 Capital Improvement Bonds 2033 180,000 180,000 180,000 Total Debt Service 2,833,047 2,833,047 2,852,297 General Operating Expenditures: Administration 14,950 21,296 20,050 CBD maintenance 698,629 698,629 774,953 CBD downtown plantings 50,000 50,000 50,000 Downtown Policing 117,269 117,269 117,269 Intermodal Facility support 5,000 5,000 Kellogg Arena support 370,000 370,000 - Economic Development Fund support 120,000 120,000 120,000 Downtown Special Projects 530,000 468,568 603,511 Total General Operating Expenditures 1,900,848 1,850,762 1,690,783 TOTAL GENERAL FUND REVENUES 4,920,754 4,841,650 4,543,080 TOTAL GENERAL FUND EXPENDITURES 4,733,895 4,683,809 4,543,080 EXCESS REVENUES OVER (UNDER) OPER. EXPENDITURES $ 186,859 $ 157,842 $ (0) Fund Balance, beginning of year 1,091,308 1,091,308 1,249,150 Fund Balance, end of year (GENERAL FUND) $ 1,278,167 $ 1,249,150 $ 1,249,149  LEASE AGREEMENT This lease agreement (herein the “Lease”) is entered into on March 1, 2021, (herein the “Effective Date”) by and between the BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY, a Michigan statutory downtown development authority created and operating pursuant to PA 197 of 1975 whose address is c/o City of Battle Creek 10 N. Division Street, Battle Creek, Michigan 49014 (herein the “Landlord”), and SIMPLY SENSATIONAL BERRIES, LLC, a Michigan limited liability company whose address is 7686 B Drive South, Michigan 49015(herein the “Tenant”), on the following terms and conditions: 1. PREMISES LEASED: Landlord leases to Tenant and Tenant rents from Landlord a leasehold in the property and improvements known as Suite No. “B”, aka the “Kich(Ə)n,” containing approximately 675 sq. ft. of retail space and an attached storage area on the first floor of the Michigan Avenue Parking Ramp located at 80 West Michigan Avenue, Battle Creek, Calhoun County, Michigan (herein the "Property"). 2. ORIGINAL TERM: The original term of this Lease is one (1) year, beginning on the Rent Commencement Date (defined below), and ending 12 months after the Rent Commencement Date, unless terminated earlier as provided herein or renewed as provided in paragraph 19. Tenant shall have the right to possession of the Property as of March 1, 2021, under the terms and conditions of this Lease. 3. BASE RENT: The base rent for the original term of this Lease is $4,500 per year, payable in monthly installments of $375, payable in advance on the first day of each month beginning with the month of the Rent Commencement Date. If any monthly installment payment of rent is not paid within 10 days after the date it first becomes due, then in addition to the monthly installment payment of rent there will become immediately due and payable from the Tenant a one-time late charge equal to 5% of the monthly installment payment. All rent shall be due on the first day of each month during the term of this Lease, in advance, without any deduction or offset, and paid to the Landlord at the address set forth above. Tenant's obligation to pay rent is independent of any covenants of Landlord in this Lease. 4. RENT COMMENCEMENT DATE: Tenant's obligation to pay rent and other charges shall commence on the "Rent Commencement Date" which is defined as March 1, 2021. 5. CONDITION AND MAINTENANCE OF PROPERTY: Tenant acknowledges Tenant has inspected the Property and accepts it as is. During the term of this Lease and any renewals, Tenant will maintain and repair and keep in good condition, at Tenant's sole expense, the interior of the Property. Tenant shall repair and replace, as applicable, any plate glass (whether on the interior or exterior of the Property), doors and windows of the Property, electrical wiring, plumbing and plumbing fixtures, heating and cooling units, and all other systems, to the extent any of the foregoing requires such repair and/or replacement due to the actions of Tenant or any of its employees or agents, ordinary wear and tear excepted. Landlord shall be obligated to make repairs for ordinary wear and tear only after Tenant has given written notice of the need for the repair. At the termination of this Lease, Tenant shall deliver the Property to Landlord "broom clean" and in good condition and repair, ordinary wear and tear excepted. 6. UTILITIES: From and after the Effective Date, except as set forth below, Landlord will promptly pay all electric, heating, fuel, water, sewage, gas, internet, refuse and trash removal, and other utility bills or charges for services provided to and directly used by the Property, including any deposits Page | 1  required for such services, during the period the Tenant remains or has the right to remain in possession of the Property. 7. PEST CONTROL SERVICES: Tenant will contract with a pest control firm to provide pest control services within the Property, if warranted. 8. TAXES: Tenant assumes no responsibility for the general real property taxes assessed against the commercial space of 80 W. Michigan Avenue, Suite B, in the Michigan Avenue Parking Ramp. 9. INSURANCE: Tenant will procure and keep in force, at Tenant's sole cost and expense, a policy or policies of insurance with an insurance company approved in writing by the Landlord, providing general and premises liability coverage naming the City of Battle Creek as additional insured in an amount not less than $1 million for injury or death to any single person, $3 million for injury or death to more than one person, and $1 million regarding damage to property. Tenant further agrees to defend and hold Landlord harmless from any and all liability or claim for damages that may be asserted against the Landlord arising out of Tenant's use of the Property or by reason of any accident or casualty occurring on or about the Property, including reimbursement to Landlord for any attorneys’ fees incurred in defending, settling, or responding to any such claim. Landlord will maintain such casualty insurance coverage on the ramp as Landlord deems appropriate. Tenant is responsible for obtaining such casualty insurance coverage for Tenant's leasehold improvements, contents, business interruption, and interior improvements to the Property as Tenant deems appropriate. 10. ADDITIONAL RENT: If Tenant fails to maintain the Property as paragraph 5 requires, pay any charge for pest control services as paragraph 7 requires, pay any real property taxes or installments of special assessments as paragraph 8 requires, or maintain insurance as paragraph 9 requires, in each case subject to the fifteen (15) day notice and cure period under paragraph 18 below, the Landlord may, but has no obligation to, advance funds to pay such costs or fulfill such obligations. The Tenant will immediately reimburse the Landlord for any such amounts the Landlord expends and any amount so expended will bear interest at the lower of 11% per annum or the highest permissible legal rate of interest. 11. OPERATING RULES AND REGULATIONS: Tenant will at all times conform with the following operational requirements in the use of the Property: 11.1) All ground floor display windows must be fully lighted from dusk to 10:00 p.m. and partially lighted during all other hours of darkness. 11.2) No space that is visible from the exterior of the Property may be used for storage or office use. 11.3) Tenant will instruct and require Tenant's employees to park only in designated employee parking areas and enforce such requirement. Tenant shall be permitted (at Tenant's expense) two (2) parking spaces in the Michigan Avenue Ramp for exclusive use by Tenant. No additional rights to parking in the Michigan Avenue Ramp are provided under this Lease. 11.4) If Tenant vacates the Property, all signs owned by the Tenant, advertising Tenant's business, services or goods will be removed from the Property by Tenant, at the Tenant’s sole cost and expense, upon termination of this Lease. Standardized signage provided by the Landlord will be removed and/or changed at the expense of the Landlord. Page | 2  11.5) No hand painted signs may be displayed on the exterior of the Property or in the interior of the Property that are visible from the exterior, other than signs advertising specials or sale items that do not remain on display for more than 7 days or professionally painted signs. Notwithstanding the preceding, all signs located anywhere within or about the Property are subject to Landlord's written approval and to immediate removal in the event Landlord does not approve the sign. 11.6) No portion of the Property will be used as a pool hall, card room, topless dancing business or permit or encourage topless dancing, massage parlor, adult movie theater, adult book store, or adult novelty store. 11.7) Tenant's use and occupancy of the Property is subject to such additional written rules and regulations as Landlord may from time to time deliver to Tenant. 11.8) Tenant will, on a regular basis, deposit all trash and refuse in Tenant's dumpster to be maintained behind Suite A or at such other location on the Michigan Avenue Parking Ramp property as Landlord designates from time to time. No trash or trash containers, other than the dumpsters, may be placed outside Tenant's Property. 12. USE OF PROPERTY: Tenant may use the Property for the following stated purpose and for no other purpose without Landlord's prior written consent: the operation of a retail food service business, which may include food production, retail and service operations that enhances the business. Tenant will use the Property in a careful, safe, and proper manner. Tenant will not conduct nor did permit to be conducted on the Property any business or any act which is contrary to or in violation of state, federal, or local law or ordinance, or which would void insurance coverage. Tenant will not permit the use or storage of hazardous or toxic substances on the Property unless Tenant properly and promptly disposes of all such substances at a location off the Property and in accordance with all applicable governmental regulations. All hazardous or toxic substances will at all times remain Tenant's property. 13. EQUIPMENT, FURNISHINGS AND TRADE FIXTURES: All equipment, furnishings, and trade fixtures placed on the Property by the Tenant that can be removed without damage to the Property are and will remain the Tenant's property. Tenant will promptly remove all of Tenant's property from the Property upon the termination of this Lease and will repair any damage to the walls, floors, and ceilings resulting from or becoming apparent after the removal of such property. Any personal property not removed by Tenant in accordance with the preceding sentence and which cannot be removed without damage to the Property, or any personal property deemed to be abandoned by Tenant, will become part of the Property and become the Landlord's property. All equipment and property provided and owned by the Landlord must be cleaned and maintained in full working order by the Tenant while Tenant occupies the space. See Attachment A for list of kitchen equipment owned and provided by Landlord. 14. WALKS: Tenant will keep the walks and driveways adjoining the Property free from litter, obstructions, ice, and snow. 15. ENTRY BY LANDLORD FOR INSPECTION: Landlord has full access to the Property at all reasonable times for the purpose of completing the Landlord's Work, inspecting the condition of the Property, or, within the last 60 days of the Lease Term if Tenant has not elected to renew the Lease as provide in paragraph 19 below, to show the Property to prospective purchasers or lessees. From and after the Rent Commencement Date, Landlord shall give Tenant 24 hour written notice Page | 3  except in the event of an emergency (for which no prior notice shall be required). Subject to the foregoing, Tenant may, at Tenant's sole discretion, request that Landlord's inspection be conducted in a manner that avoid being a disruption during peak business times. 16. ASSIGNMENT AND SUBLETTING: Tenant may not sell, assign, mortgage, pledge, or in any manner transfer this Lease or any rights under this Lease or sublet any portion of the Property without the Landlord's prior written consent. If the Tenant is a partnership or limited liability company, the sale, transfer, or assignment of any equity interest or the admittance of any new partner or member that cumulatively results in a change of a beneficial interest or control of more than 50% of the partnership or limited liability company constitutes an assignment under this paragraph. 17. DEFAULT: Each of the following events constitutes an event of default under this Lease: 17.1) If the Tenant becomes insolvent in that Tenant cannot or is not paying Tenant's obligations as they become due; 17.2) If Tenant's interest under this Lease is assigned by operation of law; 17.3) If Tenant vacates the Property or ceases business operations from the Property for more than 10 consecutive days; 17.4) If Tenant fails to deliver to Landlord proof of Tenant's insurance maintained pursuant to paragraph 9 within 10 days of Landlord's demand for proof of such insurance; 17.5) If Tenant breaches any of Tenant's obligations under this Lease, including, but not limited to, maintenance of the Property pursuant to paragraph 5 or assignment of the Tenant's interest in violation of paragraph 16; 17.6) If Tenant fails to pay any installment of rent or additional rent within 7 days of Landlord's demand for same. 18. REMEDIES FOR DEFAULT: With the exception of the events of default described in subparagraphs 17.4 or 17.6, if any event of default continues for fifteen (15) days after the Landlord's notice of default or Tenant fails in good faith to begin the correction of a breach of any other covenant or condition of this Lease to be performed by Tenant within ten (10) days after notice to Tenant of the nature of such breach, Landlord may elect to terminate this Lease upon 5 days’ notice to Tenant. As to the events of default described in subparagraphs 17.4 and 17.6, the Landlord may elect to terminate this Lease immediately upon the expiration of the time periods provided in those subparagraphs. Notwithstanding such termination Tenant will be liable to Landlord for damages for breach of the Tenant's obligations under this Lease as follows: 18.1) Landlord may elect to recover from the Tenant the Landlord's actual damages sustained as a result of the Tenant's breach, including, but not limited to, Landlord's lost rent after crediting any rent received for the Property from any other tenant during the remaining term of this Lease, Landlord's expenses incurred in re-renting the Property, and any costs the Landlord incurs in making the Property ready for re-renting. 18.2) If Landlord so elects within 35 days after Tenant vacates the Property, an amount equal to 25% of the sum of the rent that would be due under this Lease for the remainder of the Lease Page | 4  term. The parties agree upon the execution of this Lease this amount represents a reasonable estimate of Landlord's actual damages sustained as a result of any such default. 19. TENANT'S RIGHT TO RENEW LEASE; RENEWAL RENT: Tenant has the option to renew this Lease for an additional (1) year term ("Renewal Term"), provided Tenant is not then in default of any of Tenant's obligations under this Lease, by giving Landlord written notice of intent to renew not later than 60 days before the end of the initial Lease term, as applicable. Any Renewal Term shall be on the same terms and conditions contained in this Lease, provided, that Landlord reserves the right to increase the base rent by no more than $300 or $25/month during year two of the lease agreement. In the event the Tenant anticipates transitioning from the space in less than 12 months beyond lease term, the lease may transition to a month to month term after the completion of year one or year two in the event the Tenant provides written notice of intent to move not later than 60 days prior to the end of the Lease. 20. NOTICE: Any notice required or permitted to be given under this Lease is properly given if delivered personally to the party or if delivered by certified mail, postage fully prepaid, return receipt requested, addressed to the Landlord or Tenant at their respective addresses set forth above or to such other address as either party may furnish in writing during the term of this Lease. The effective date of any notice will be the date the notice is delivered personally or the day after the notice is mailed by certified mail. 21. DAMAGE BY FIRE: If the Property is damaged or destroyed by fire or other catastrophe during the term of this Lease so as to become partially or totally un-tenantable, the damage or destruction occurred through no fault of the Tenant, Tenant's agents, employees, or owners, and the Landlord does not begin to repair or rebuild the Property within 90 days of the occurrence, the Landlord or Tenant may elect to terminate this Lease, with all rent accrued as of the date of the occurrence due and owing, and neither party having any further obligation to the other. If the Landlord elects to begin to repair or rebuild the Property with 90 days of the occurrence, or the parties otherwise do not elect to terminate the Lease as permitted under this paragraph, rent shall be fully abated for the time period that the Property is totally untenable, or if only partially untenable, abated proportionately to the amount of loss of use of the Property suffered by the Tenant. The Property will be deemed “totally untenable” if Tenant cannot reasonably operate any part of its business, and does cease all business operations, at the Property. 22. ALTERATIONS: Tenant may make such alterations, additions, physical changes, or improvements to the Property as Tenant deems necessary for Tenant's purposes only with the Landlord's prior written consent. Tenant is responsible for compliance of the Property with the provisions of the Americans with Disabilities Act, except the Landlord is responsible for the compliance with the Act with respect to the public access doorway for the Property. 23. SUBORDINATION: Tenant agrees this Lease is and will remain subject and subordinate to all present and future mortgages affecting the Property and Tenant will promptly execute and deliver to the Landlord such certificate in writing as Landlord may request showing the subordination of this Lease to such mortgage or mortgager and in default of Tenant so doing, Landlord will have the authority to execute such certificate on behalf of Tenant. 24. LICENSES: Tenant hereby represents and promises that Tenant has and will maintain, or will obtain, any and all licenses or permits that are or may be come required for Tenant's business. 25. LANDLORD'S LIEN ON TENANT'S PROPERTY: The Tenant hereby grants to the Landlord Page | 5  and the Landlord has a lien on all of Tenant's property at any time during the term of this Lease used or situated on the Property to secure the payment of rent due under this Lease and the Tenant's performance of all of the Tenant's obligations under this Lease. Tenant's property includes, but is not limited to, any of the following located on the Property at any time during the Lease term: all of Tenant's equipment, furnishings, office equipment, machinery, inventory, trade fixtures, signs, accounts receivable produced from Tenant's business on the Property and all products, proceeds, and additions thereto (Collateral). If Tenant defaults in any of the Tenant's obligations under this Lease, the Landlord has the right to take possession of and sell or retain all or any portion of the Collateral and apply the proceeds in reduction of Tenant's obligations under this Lease. In addition to the above, the Landlord has all of the rights and remedies available to a secured party under the Uniform Commercial Code as adopted by the State of Michigan. Upon the Landlord's demand, the Tenant will promptly execute and deliver to the Landlord one or more financing statements acceptable to the Landlord evidencing the Landlord's secured interest. If Tenant refuses to sign such a financing statement immediately upon the Landlord's written demand, the Tenant hereby appoints the Landlord the Tenant's authorized representative for purposes of signing a financing statement on the Tenant's behalf. If Tenant fails, within 10 days after Landlord's demand, to execute and deliver to Landlord such financing statement or statements, the Tenant hereby appoints the Landlord as the Tenant's attorney in fact for the purpose of executing such financing statement or statements on Tenant's behalf. 26. NONWAIVER: Failure of Landlord to insist on the strict performance of any term or condition of this Lease will not constitute a waiver of Landlord's right to later enforce such term or condition. 27. HOLDING OVER: It is expressly agreed and understood between the parties that if Tenant holds over beyond a lease term without an express written renewal or after termination of the Lease, then the tenancy becomes a month-to-month tenancy, subject to all the conditions, provisions and obligations of this Lease insofar as the same can be applied to a month-to-month tenancy. The holding over will not constitute a renewal of this Lease and may be cancelled by either party on 30 days’ written notice. 28. QUIET ENJOYMENT: Landlord agrees that upon Tenant's prompt payment of the rents and compliance with all provisions and conditions of this Lease, Tenant may peacefully and quietly have, hold and enjoy the Property during the basic term and all additional lease terms. 29. PROHIBITION AGAINST DISCRIMINATION: Lessee shall not discriminate against any person because of his or her actual or perceived race, color, religion, national origin, sex, age, height, weight, marital status, physical or mental disability, family status, sexual orientation, or gender identity. Breach of the obligations not to discriminate shall be a material breach of this lease agreement. 30. ATTORNEYS FEES: If either party commences any legal action to enforce this Lease or to obtain any relief for breach of this Lease, then in addition to any other relief available, the prevailing party in such action will be entitled to an award of actual reasonable attorneys’ fees incurred. 31. MISCELLANEOUS PROVISIONS: 31.1) This Lease constitutes the entire agreement between the parties and may be amended only by a written document executed by all the parties. 31.2) This Lease is governed by the laws of Michigan. Page | 6 31.3) This Lease is binding on the parties, their heirs, representatives, assigns and successors. 31.4) If any term, condition or covenant of this Lease is, to any extent, invalid or unenforceable, the remaining provisions will not be affected and will continue to be valid and enforceable. 31.5) The captions, sections numbers and article numbers are for convenience only and in no way describe, limit or construe the provisions of this Lease. 31.6) The provisions of this Lease will be presumed to have been mutually drafted and negotiated by the parties. No presumption will apply against either party in interpreting this Lease in the event of any ambiguity. 31.7) Any intention to create a joint venture or partnership between the parties is expressly disclaimed. 31.8) Tenant covenants and agrees that with respect to the use and access to the Property that are the subject of this Lease, it shall not discriminate on the basis of actual or perceived race, color, religion, national origin, sex, age, height, weight, marital status, physical or mental disability, family status, sexual orientation, or gender identity. Breach of these obligations as set out in Chapter 214 of Battle Creek ordinances shall be considered a material breach of this contract. 31.9) Time shall be of the essence of this agreement. Page | 7 IN WITNESS WHEREOF, Battle Creek Downtown Development Authority, a Michigan statutory downtown development authority created and operating pursuant to PA 197 of 1975 has executed this Lease this _____ day of March 2021. BATTLE CREEK DOWNTOWN DEVELOPMENT AUTHORITY, as Landlord By: Paul Conkey Its: BCDDA Board Chair IN WITNESS WHEREOF, Simply Sensational Berries, LLC, a Michigan limited liability company, has executed this Lease this _____ day of March 2021. SIMPLY SENSATIONAL BERRIES, LLC., as Tenant By: Markeeta Haddley Its: Sole Proprietor Page | 8