Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 40555 UTICA ROAD 586-884-9322 CITY COUNCIL CHAMBERS January 19, 2016 8:00 AM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF December 15, 2015 Regular Meeting NEW BUSINESS 1. Set 2016 LDFA Meeting schedule. 2. Introduction of Larry Herriman, Interim Director, Macomb OU-INCubator. 3. To approve the Lease Agreement Renewal between Golden Products and Services, LLC and the Local Development Finance Authority (LDFA). 4. To approve the Lease Agreement Renewal between NFC Group North America Inc. and the Local Development Finance Authority (LDFA). 5. To approve the finalization of the Velocity Parking Lot Repairs, Phase I, City Project #14-256. OLD BUSINESS PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE REGULAR MEETING December 15, 2015 – 8:00 a.m. 40555 Utica Road, Sterling Heights, MI 48313 586-884-9322 City Council Chambers Phil Hunsberger called the meeting to order at 8:01 a.m. Pledge of Allegiance Members present at roll call: David Corba, Lori Doughty, Stephanie Eagen, Phillip Hunsberger, Richard Kincaid, John Lamerato, John Lettang, Victor Martin, Camille Silda, Jill Tomyn, Kerry Weishaupt Members absent: Laurel Johnson, Orest Zachary Also in attendance: Kathryn Quell, Building Services Specialist – City of Sterling Heights; Keith Jablonski, Attorney, O’Reilly Rancilio P.C.; Denice Gerstenberg, Director of City Development, City of Sterling Heights; Julie Gustafson, Director, Macomb OU-INCubator Motion to Approve the Agenda Moved by Martin, supported by Lamerato, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of November 17, 2015 Regular Meeting Moved by Martin, supported by Weishaupt, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To approve a motion for an option of a 30-day lease for non-core tenants of the Macomb OU-INCubator. Mr. Jablonski stated that there is always a 30-day termination option in the case of a breach of the lease. His concern on a 30-day provision comes from the after effects. A 30-day clause would open up vulnerability. Mr. Jablonski suggested a shorter term for start up businesses such as a month-to-month. Mr. Weishaupt inquired if it would eliminate the discrimination factor. Mr. Jablonski said yes. Mr. Kincaid asked if the board would need to approve monthly. Mr. Jablonski stated no. Mr. Kincaid stated that it would make it easier for companies to walk away. Mr. Corba inquired if month-to-month is common. Ms. Gustafson stated that the leases were 6- month terms at the previous incubator she worked at. She said the 6-month term is not overly long, and allows you to address some issues, and after 6 months, renew on a month-to-month basis. Mr. Martin stated that we have businesses in there that were not the original intent of the incubator, but brought in revenue. He suggested the core tenants have one-year leases and non- conforming have month-to-month terms. Non-conforming is a business that does not fit the model of the incubator. Mr Corba stated to have two separate leases dependent on the tenant. Mr. Jablonski agreed. Mr. Kincaid inquired as to the capacity of the incubator. Ms. Gustafson stated 94%. Mr. Jablonski suggested 60 or 90-day leases for non-conforming, allowing flexibility. Ms. Gustafson said 30-day leases are customized as to whether they are servicing the tenants. Mr. Martin stated that this is a benefit to the incubator to have a tool to exercise this option. Mr. Hunsberger added that this 30-day lease may also be utilized for long term tenants who are ready to launch their business. Mr. Corba stated to change the terminology from non-conforming to non-core. Mr. Jablonski suggested adding a recital on the lease as to the mission of the incubator and define the industry of the core that fits the model. Mr. Lettang suggested a ceiling for non- core occupancy rate. Moved by Martin, supported by Weishaupt to approve a motion for an option of a 30-day lease for non-core tenants of the Macomb OU-INCubator. Ayes: All Nays: None Motion carried. To approve the proposal as presented by Hubbell, Roth & Clark, Inc. for the Sterling Heights LDFA/SMARTZONE District Improvement Plan in the amount of $33,313.60. Ms. Gerstenberg stated that $454,000 was the SMARTZONE capture of which $200,000 was allocated to the parking lot this past year and another $200,000 will be allocated for the second half of the parking lot this year. Ms. Gerstenberg proposed to utilize some of the remaining funds for a study of traffic, road improvements, landscaping, pavers, signage – all to create a brand for the corridor. The study will work with businesses and hold public hearings. HRC will then come up with a proposed plan and cost estimates to make improvements, possibly high tech with stronger internet access to our community. Ms. Gerstenberg stated she is asking the LDFA to approve these funds in order to continue with the study. Mr. Hunsberger inquired if this overlaps the CIA (Corridor Improvement Authority). Ms. Gerstenberg stated that there is some overlap however the CIA is mostly retail. Mr. Corba inquired as to the geographic zone. Ms. Gerstenberg answered 14 Mile to M59 and Mound to Van Dyke. Mr. Kincaid asked about the transportation aspect. Ms. Gerstenberg stated that they will be looking at regional transportation. Mr. Martin stated that the money should be spent for the backbone rather than cosmetic. Ms. Doughty stated that AT&T has fiber in the area and she has previously talked with Luke Bonner. Ms. Gerstenberg said they are aesthetic improvements but contribute to the branding. Mr. Kincaid commented that the design part should be put on the developer. Ms. Gerstenberg stated this is a preliminary plan for moving forward. She said that most of Sterling Heights is developed and it would be beneficial to market this as an industrial park. Ms. Silda stated that she supports the concept and there is a lack of 100,000+ square foot spaces. Ms. Gerstenberg said this is to diversify and not have all ties to automotive. Mr. Martin asked if this is a legal use of funding. Ms. Gerstenberg stated absolutely. Mr. Martin commented that we are diverting funds and spending money on infrastructure improvements within the corridor. Mr. Weishaupt stated to look at the upkeep and maintenance of each point suggested. Ms. Gerstenberg stated that there is a diverse internal team as well as council and the public. She said most of the money comes from the $444,000 local capture of BAE and $115,000 will be captured annually from BAE. BAE took the state reimbursement and not the city’s reimbursement. Mr. Hunsberger stated that if this motion is approved, that the firm seek input from the LDFA. He requested the LDFA board members be notified of public hearings. Ms. Doughty asked that AT&T be notified as well. Ms. Gerstenberg agreed. Moved by Eagan, supported by Weishaupt to approve the proposal as presented by Hubbell, Roth & Clark, Inc. for the Sterling Heights LDFA/SMARTZONE District Improvement Plan in the amount of $33,313.60. Ayes: All Nays: None Motion carried. To approve the Lease Agreement Renewal between NFC North America, Inc. and the Local Development Finance Authority (LDFA). Ms. Gustafson stated that the tenant fits the bill of the incubator and their business is related to radio technology. Moved by Martin, supported by Lettang to approve the Lease Ageement Renewal between NFC North America, Inc. and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the Lease Agreement Renewal between KTISIS, LLC and the Local Development Finance Authority (LDFA). Ms. Gustafson stated that KTISIS also fits the model of the incubator and they are not ready to graduate. This company uses natural gas versus gasoline. Mr. Hunsberger inquired if there is a framework for the number of years until a start up company graduates. Ms. Gustafson stated that the average is 3 – 5 years. Moved by Martin, supported by Lettang to approve the Lease Ageement Renewal between KTISIS, LLC and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the proposal to research a rental rate increase for tenants of the Macomb OU- INCubator by the Local Development Finance Authority (LDFA). Ms. Gustafson stated that she would like to do a rental study utilizing the staff of the incubator and the resources of Macomb County and evaluate if a rate increase is in order. Mr. Hunsberger stated that he thought that the low rates were the appeal of the incubator for start ups. Ms. Gustafson stated that the findings of the study would be reported back to the LDFA. Moved by Martin, supported by Kincaid to approve the proposal to research a rental rate increase for tenants of the Macomb OU-INCubator by the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. Old Business The LDFA requested a report on the tenants and overall business of the Macomb OU-INCubator. The board members have asked for a presentation from Oakland University containing information for each tenant, their product or service, length of occupancy and future status. This request has been made several times in past meetings. Ms. Quell stated that Julie Gustafson has confirmed that she will make a presentation at the LDFA meeting for January 19, 2016. The LDFA board has also requested that a representative of Oakland University attend all of the LDFA meetings to answer any questions that arise. Ms. Gustafson advised the LDFA board of her resignation with her last day being Friday, December 18, 2015 as Director of the Macomb OU-INCubator. She stated that she will be working remotely through January. She also stated that Larry Herriman will serve as interim director. Ms. Gustafson said that Larry Herriman will be attending the next LDFA meeting, January 19, 2016, and at that time a discussion on what the board would like to see in reporting can be conveyed to Mr. Herriman. Ms. Gustafson requested that Ms. Quell forward Mr. Herriman’s email address to the board members. Ms. Quell agreed to do so. Board Members Report None Public Comment None Adjournment Moved by Martin, supported by Lettang to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 9:10 am Kq  2016 MEETING SCHEDULE CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Tuesday, January 19, 2016 Tuesday, February 16, 2016 Tuesday, March 15, 2016 Tuesday, April 19, 2016 Tuesday, May 17, 2016 Tuesday, June 21, 2016 Tuesday, July 19, 2016 Tuesday, August 16, 2016 Tuesday, September 20, 2016 Tuesday, October 18, 2016 Tuesday, November 15, 2016 Tuesday, December 20, 2016 The Sterling Heights Local Finance Development Authority (LDFA) meets at 8:00 am in the Council Chambers of City Hall (40555 Utica Road, Sterling Heights, MI 48313). *The meetings typically take place on the third Tuesday of the month unless otherwise noted above. All meetings are open to the public.  LDFA Business Sterling Heights, Michigan 1/19/16 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement Renewal between Golden Products and Services, LLC and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is a lease agreement renewal commencing on January 1, 2016 between Golden Products and Services, LLC and the Local Development Finance Authority (LDFA) for space #3-L consisting of approximately 54 square feet at a rate of $185.00/month. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement Renewal between Golden Products and Services, LLC and the Local Development Finance Authority (LDFA).  LDFA Business Sterling Heights, Michigan 1/19/16 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement Renewal between NFC Group North America Inc. and the Local Development Finance Authority (LDFA). Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is a lease agreement renewal commencing on January 1, 2016 between NFC Group North America Inc. and the Local Development Finance Authority (LDFA) for space #1-D consisting of approximately 237 square feet at a rate of $395.00/month. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement Renewal between NFC Group North America Inc. and the Local Development Finance Authority (LDFA).  LEASE THIS LEASE is made and entered into this _1st_ day of __January___, 2016, by and between the City of Sterling Heights Local Development Financing Authority, a local development financing authority, c/o City of Sterling Heights, whose address is 40555 Utica Road, P.O. Box 8009, Sterling Heights, Michigan 48311-8009 (hereinafter called "Landlord"), and __NFC North America Inc.___ whose address is _6633 18 Mile Road, Sterling Heights, MI 48314_________ (hereinafter called "Tenant"). IT IS MUTUALLY COVENANTED AND AGREED by and between the parties hereto as follows, to wit: 1. SUMMARY OF LEASE TERMS. The following is intended to summarize the principal terms of this Lease, and is not intended to be all inclusive. In the event that anything in this Section 1 conflicts with other specific provisions of this Lease, the latter shall be deemed to control in the absence of express statements otherwise: A. Premises: Lab # __1-D_____ in Section __1____ consisting of __237________ rentable square feet. B. Lease Term: Commencement: As set forth in Section 3 of this Lease. Term: Month to month C. Monthly Fixed Rate: Monthly Fixed Rental:_______$395.00_______________________ D. Security Deposit: $_____$395.00_______________________ 2. PREMISES. Landlord owns the building and real property commonly known as 6633 18 Mile Road, Sterling Heights, Michigan 48314. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the following described premises situated in the City of Sterling Heights, County of Macomb, and State of Michigan, as shown on the floor plan attached hereto as Exhibit A (said premises hereinafter called the "Premises"). Landlord also grants Tenant the non-exclusive use of common areas on the property which include the reception area, designed conference rooms, 2 restrooms, shipping and receiving area, hallways, driveways, roadways, parking areas, sidewalks, and exterior grounds (the “Common Areas”). Tenant does hereby accept the Premises in its current condition. 3. TERM AND COMMENCEMENT DATE. The term of this Lease shall be month-to-month commencing from and after _________________, 2016 (the “Commencement Date”). This Lease shall be terminable by either party on one month’s written notice, except as otherwise provided by law or in this Lease. In the event Landlord fails to deliver the Premises on the Commencement Date because the Premises are not then ready for occupancy, or for any other cause whatsoever, Landlord shall not be liable to Tenant for damages as a result of Landlord's delay in delivering such Premises, and the Commencement Date of the Lease shall be postponed until such time as the Premises are ready for Tenant's occupancy and the termination date of this Lease shall be extended for a period equivalent to the period of such postponement provided such postponed termination date shall occur on the last day of a calendar months if not, then such termination date shall be extended by an additional period so as to fall on the last day of such calendar month in which it would otherwise occur. It is agreed that by occupying the Premises as a tenant, the Tenant formally accepts the same and acknowledges that the Premises are in the condition called for hereunder. 4. FIXED AND ADDITIONAL RENT. The Tenant shall pay to the Landlord, without notice or demand and without abatement, deduction, or set-off, in lawful money of the United States, fixed rent at the monthly rate of __________ ($__________) Dollars, in advance on the first day of each calendar month, at the office of the Landlord or at such other place as the Landlord may designate. The Tenant shall pay to the Landlord the first month’s rent on the execution and delivery of this Lease, the receipt of which is hereby acknowledged. If the obligation to pay rent commences on any day of the month other than on the first, the fixed rent for the unexpired portion of such month shall be prorated and paid on a per them basis and the Landlord shall credit the difference, if any, toward the payment of the rent for the next succeeding calendar month. 5. TENANT'S COVENANTS. A. Tenant Use: Tenant does hereby covenant and agree with said Landlord that it will, throughout the term of this Lease, use said Premises only in a careful and proper manner for purposes specifically approved by Landlord in writing and for no other purpose and not commit any 3 waste therein, nor at any time use or occupy the Premises in violation of the Certificate of occupancy or like certificate issued and not perform acts or carry on any practices which may injure the property or the Premises, or be a nuisance or menace to other tenants in the building in which the Premises are a part. B. Compliance with Law and Regulation: Tenant does hereby covenant and agree with Landlord that it will, throughout the term of this Lease,, conform to and obey all present and future laws and ordinances, and all rules, regulations, requirements and orders of all governmental authorities or agencies respecting the Premises. Tenant shall pay as additional rent all costs, expenses, fines, penalties or damages, which may be imposed upon Landlord by reason of Tenant's failure to comply with the provisions of this section. C. Loading: Tenant does hereby covenant and agree with Landlord that it will, throughout the term of this Lease, not place a load upon any floor of the Premises exceeding the floor load per square foot area which it was designed to carry and which is allowed by law. Landlord reserves the right to prescribe the weight and position of all safes, business machines and mechanical equipment. Such installations shall be placed and maintained by Tenant, at Tenant's expense, in settings sufficient in Landlord's judgment, to absorb and prevent vibration, noise and annoyance. D. Assignment and Subletting: Tenant does hereby covenant and agree with Landlord that it shall not assign this Lease or any rights hereunder or hypothecate or mortgage the same, nor sublet the Premises or any part thereof without the prior written consent of Landlord. Such assignment, hypothecation, mortgage, or subletting not previously consented to by Landlord in writing shall constitute a default hereunder. Tenant shall pay as additional rental reasonable, legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting. No assignment or subletting shall affect the continuing primary liability of Tenant which following the assignment shall be joint and several with the assignee or sublessee. E. Alterations by Tenant: Tenant does hereby covenant and agree with Landlord that it shall make no structural alterations or additions, nor shall Tenant make any interior finish additions and/or changes in or to said Premises without the prior written consent of Landlord. All alterations, additions or improvements made by either the Landlord or Tenant upon the Premises, except movable office furniture and trade fixtures of the Tenant, shall be the property of the Landlord and shall remain upon and be surrendered with the Premises at the expiration of this Lease. 4  F. Permit Landlord to Enter: Tenant does hereby covenant and agree with Landlord that it shall permit the Landlord to enter upon the Premises at all reasonable times to show the same to prospective purchasers, mortgagees and tenants. G. Rules and Regulations: Tenant does hereby covenant and agree with Landlord that it shall abide by the building rules and regulations, attached hereto as Exhibit B, or any reasonable modifications or additions thereto made by Landlord during the term of this Lease which are equally applicable to all tenants of the Premises. H. Tenant's Duty to Repair: Tenant does hereby covenant and agree with Landlord that it shall, at its expense, keep the interior of the Premises in good condition, reasonable wear-and-tear excepted, and make all non-structural repairs to the Premises as and when needed, to preserve them in good condition, damage from fire or other casualty insured by Landlord and normal wear-and-tear excepted. Tenant shall also repair all damage or injury to the Premises caused by the moving of Tenant's fixtures, furniture or equipment, or resulting from the carelessness, omission, neglect or other cause of the Tenant, its servants, employees, agents, visitors or licensees. Such damage shall be promptly repaired or replaced by Tenant, at its sole expense and such repairs shall be of a quality or class equal to the original construction. if Tenant fails to make such repairs or replacements, Landlord may, but shall not be required to do so, and the cost thereof shall become collectible as additional rent hereunder and shall be paid by Tenant, within ten (10) days after presentation of statement therefor. Tenant shall reimburse Landlord for the cost of relamping within the Premises which cost shall include replacement of any light bulbs and/or ballasts. I. Notice to Landlord: Tenant does hereby covenant and agree with Landlord that it shall give Landlord prompt notice of any defective condition in any plumbing, heating system, or electrical lines located in, servicing or passing through the Premises and following such notice, Landlord shall remedy the condition with due diligence but at the expense of Tenant if repairs are necessitated by damage or injury attributable to Tenant, Tenant's servants, agents, employees, invitees or licensees as aforesaid. There shall be no allowance to Tenant for the diminution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord, Tenant, or other making or failing to make any repairs, alterations, additions or improvements in or to any portion of the Premises or in and to the fixtures, appurtenances or equipment thereof. The provisions of this section with respect to the making of repairs shall not apply in the case of fire or other casualty which are dealt with in Section 8 hereof. 5  J. Insurance: Tenant does hereby covenant and agree with Landlord that it shall procure and keep in effect public liability and property damage insurance, naming the Landlord as an additional insured in the sum of Three Hundred Thousand ($300,000.00) Dollars for damages resulting to one person, and Three Hundred Thousand ($300,000.00) Dollars for damages resulting from one casualty, and Three Hundred Thousand ($300,000.00) Dollars for damage to property resulting from any one occurrence and shall deliver said policies or certificates to Landlord prior to initial occupancy and continuously maintain such coverage thereafter. Landlord shall have the right, upon not less than thirty (30) days' prior written notice, to raise the limits hereinabove set forth not more than annually during the term of this Lease. K. Eminent Domain: Tenant does hereby covenant and agree with Landlord that it shall have no claim for the value of any unexpired term of this Lease or f or any other item of loss other than loss of its movable fixtures if the whole or any part of the Premises shall be acquired or condemned by eminent domain (including the threat of a taking) for any public use or purpose and then and in that event, the term of this Lease shall cease and terminate. L. Subordination to Mortgage: Tenant does hereby covenant and agree with Landlord that Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any mortgage(s) or ground lease(s) now or hereafter placed upon Landlords interest in the said Premises and on the land and building which the said Premises are a part or upon any building hereafter placed upon the land of which the Premises form a part provided the mortgagee or lessee named in said mortgage or lease agrees to recognize the Lease of Tenant and provide a nondisturbance agreement in the event of a foreclosure of said mortgage if Tenant is not in default hereunder. Tenant covenants and agrees to execute and deliver upon demand such further instrument or instruments subordinating this Lease to the lien of any such mortgage or mortgages as shall be desired by Landlord and hereby irrevocably appoints Landlord the attorney-in-fact of Tenant to execute and deliver any such instrument or instruments for and in the name of Tenant. This power is hereby declared to be coupled with an interest and irrevocable. Landlord, at its option, may declare Tenant's failure to execute and deliver instruments as aforesaid a default in the performance of this Lease and may execute any and all remedies accruing to Landlord upon default by Tenant. In the event any proceedings are brought for the foreclosure of, or in the event of, or in the event of exercise of the power of sale under, any such mortgage made by Landlord covering the Premises, Tenant hereby attorns to the successors in interest to Landlord, and covenants and agrees to execute an instrument whereby Tenant attorns to such successor in interest and recognizes such successor as the Landlord under this Lease. 6  M. Surrender of Premises: Tenant does hereby covenant and agree with Landlord that it shall, upon the expiration or other termination of the term of this Lease, quit and surrender to Landlord the Premises, clean, in good order and condition, ordinary wear excepted. Tenant shall remove all property of Tenant and make all repairs necessitated thereby at its own cost, as directed by Landlord. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of the term of this Lease. N. Interest on Rent: Tenant does hereby covenant and agree with Landlord that it will, throughout the term of this Lease, pay interest at the greater of the prime rate or the highest legal rate on any installment of Annual Fixed Rental or Additional Rental which is not paid, for the period from the date when the same was due and payable to the date the same was paid. O. Tenant Services. Tenant shall be responsible for and shall pay for telephone to the Premises. Internet and data services are provided. If Tenant generates excessive amounts of trash or waste which requires special handling or disposal such as medical or other hazardous waste Tenant shall be responsible for disposal of such trash waste at its sole expense 6. LANDLORD’S COVENANTS. A. Repair: During the Term of this Agreement, Landlord, at Landlord's sole cost and expense, shall perform all maintenance, repairs and replacements relating to the Common Areas, roof, building footings, foundations, walls, the building skeleton, bearing columns, interior bearing walls, floor slabs, structural elements, underground utility and sewer pipes, driveways, parking lots, fire protection sprinkler system, all exterior painting (at reasonable intervals), mechanical, plumbing, electrical, and HVAC systems serving the Premises. Landlord agrees that it will use reasonable efforts to cause any such work to be performed in a manner minimizing interference with Tenant's business and use of the Premises. Except as provided above, Tenant shall keep and maintain the Premises in good order and repair. B. Services. Landlord shall operate and maintain the Premises in a manner in accordance with standards customarily followed in the operation of comparable office buildings in the Sterling Heights, Michigan area. Tenant shall have access to the Premises twenty-four (24) hours per day seven (7) days per week. Landlord shall furnish services and utilities, operate the building's systems and have maintenance personnel available during customary business hours of 7 the City, which are currently Monday-Friday, 8:30 a.m. - 5:00 p.m. ("Business Hours"), excluding holidays officially recognized by the City of Sterling Heights. Landlord shall provide Tenant with the following utilities and services, the cost of which shall be included in gross Rent, in accordance with the standards and specifications customarily followed in the operation of comparable buildings in the Sterling Heights, Michigan area: (i) hot and cold water for drinking, lavatories, toilets and drinking water in the Premises at all times; (ii) window washing of all windows in the Premises, outside only, weather permitting, at intervals to be determined by Landlord; (iii) parking spaces in the parking lot located adjacent to the Premises; (iv) lighting of the parking lot and other Common Areas during evening hours; (v) landscaping of the exterior of Common Areas and building management services for the Premises; (vi) snow removal of parking lot and sidewalks in accordance with practices applicable to the City-owned facilities; (vii) utilities, including, but not limited to, gas, electric and other utilities necessary or appropriate for the operation of the Common Areas; (viii) heating, air-conditioning and ventilation ("HVAC") of the Premises and Common Areas during Business Hours whenever heat or air conditioning shall be reasonably required to maintain comfortable temperature and humidity. Tenant space janitorial and cleaning services can be coordinated with the Landlord at Tenants expense. C. Insurance: The Landlord on its part covenants and agrees with the Tenant that it will, through the term of this Lease, keep the Premises and all permanent improvements thereto, but not Tenant's personal property, insured under all risk coverage for their replacement value, on eighty (80%) percent co-insurance basis, against loss by fire with standard extended coverage, and any proceeds of such insurance shall be used by Landlord in the repairing and restoration of the Premises. 7. QUIET ENJOYMENT. The Landlord and Tenant agree that if the Tenant shall pay the rent as herein provided, and shall keep, observe and perform all of the other covenants of this Lease by it to be kept, performed and observed, the Tenant shall and may, peaceably and quietly have, hold and enjoy the Premises for the term provided for herein, subject, nevertheless to the terms and conditions of this Lease, including, but not limited to, any ground leases, underlying leases and mortgages. 8. REBUILDING IN EVENT OF FIRE. The Landlord and Tenant agree that if the Premises shall be partially damaged by fire or other cause, the damages shall be repaired by and at the expense of the Landlord, and the rent, until such repairs shall be made, shall be apportioned according to the plat of the Premises which is usable by Tenant. No penalty shall accrue for reasonable delay which may arise by reason 8 of adjustment of insurance on the part of the Landlord and/or Tenant, and for reasonable delay on account of "labor troubles" or other cause beyond Landlord's control. But if the Premises are totally damaged or are rendered wholly untenantable by fire or other cause, or if the Premises shall be damaged to the extent of fifty (50%) percent of its square foot area, then or in any such events, Landlord may, within ninety (90) days after such fire or other cause, give Tenant a notice in writing and thereupon the term of this Lease shall expire by lapse of time upon the third (3rd) day after such notice if given and Tenant shall vacate the Premises and surrender the same to Landlord without prejudice, however, to Landlords rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to the Tenant. Notwithstanding the foregoing, each party shall look first to any insurance in its favor before making any claim against the other party for recovery for loss or damage resulting from fire or other casualty, and to the extent that such insurance is in force and collectible and to the extent permitted by law, Landlord and Tenant each hereby releases and waives all right of recovery against the other or anyone claiming through or under each of them by way of subrogation or otherwise. The foregoing release and waiver shall be in force only if both releasers' insurance policies contain a clause providing that such a release or waiver shall not invalidate the insurance, and also provided that such a policy can be obtained without additional premiums. Tenant acknowledges that Landlord will not carry insurance on Tenant"s furniture and/or furnishings or any fixtures or equipment, improvements or appurtenances removable by Tenant and agrees that Landlord will not be obligated to repair any damage thereto or replace the same. 9. DEFAULT OF TENANT. The Landlord and Tenant agree that Tenant shall observe and perform all of the conditions and agreements herein contained to be observed and performed by Tenant, and if default shall be made by Tenant in the payment of said rent for more than five (5) calendar days, or any installment or part thereof, or in the performance of any of said conditions or agreements for more than ten (10) calendar days, or if Tenant shall become insolvent, or if bankruptcy, receivership, or other insolvency proceedings shall be begun by or against Tenant, or if Tenant shall abandon or vacate said Premises before the end of the term, each of the foregoing occurrences being hereinafter referred to as a "default," then in each and every such instance of default, and while the same continues, Landlord may reenter the Premises, using all necessary force, and Tenant's right to enter the Premises shall be suspended. Such reentry shall not operate as an eviction or cancellation of this Lease. In the event of a default as above mentioned, Landlord may, at its option, cancel this Lease and avail itself of the privileges of reentry above mentioned, and upon such cancellation all estate, rights, title and interest of Tenant in the Premises shall cease and thereupon Tenant shall be liable to pay to Landlord as damages, the difference between the then present value of the rent covenanted to be paid hereunder for the balance of the term, and the then present fair rental value of the said Premises for the balance of the term. In the event of bankruptcy or other insolvency proceedings are commenced by or against Tenant, Landlord shall ipso facto be entitled to a claim provable therein for its damages computed as above. In the event of a default as above mentioned, Landlord may, without cancellation of this Lease, avail itself of the privilege of reentry above mentioned, and 9 relet all or part of the Premises in its own name as agent of Tenant for such rent and upon such terms as Landlord may see fit, and if the full rental hereinbefore named shall not thus be realized. Tenant hereby agrees to pay all deficiency, including any expense incurred by any such reletting, including the cost of renovating, altering and decorating for the new tenant, and in the event that the rent received for any month from such reletting by Landlord shall be less than the amount hereinabove reserved to be paid f or that month, the difference shall be immediately payable and an action may be instituted against Tenant thereof or, and it shall be no defense to any such action that Landlord has received for any prior month or that the new tenant has agreed to pay for any subsequent month a greater amount than that hereinabove reserved to be paid as rent for that month and such reletting may be made in conjunction with other premises or for a part only of the Premises or for less than the unexpired term hereby demised, or such new term created by such reletting may extend beyond the term hereby demised without releasing Tenant from liability hereunder to pay the full amount of rent hereinabove reserved to be paid for each month of the term hereby demised. 10. NONWAIVER. The Landlord and Tenant agree that the failure of Landlord to seek redress for violation of, or to insist upon the strict performance of any covenant or condition of this Lease or any of the rules or regulations set forth or hereafter adopted, shall not prevent a subsequent act which would have originally constituted violation from having all the force and effect of an original violation. The receipt by Landlord of rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach and no provision of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. 11. NONLIABILITY OF LANDLORD. The Landlord and Tenant agree that Landlord or its agents shall not be liable for any damage to property of Tenant or of others entrusted to employees of the Premises, nor for loss of or damage to any property of Tenant by theft or otherwise, nor for any injury or damage to persons or property resulting from any cause of whatsoever nature, unless caused by or due to the proven negligence of Landlord, its agents, servants or employees, nor shall Landlord or its agents be liable for any such damage caused by other tenants or persons in or upon or about the Premises or caused by operations in construction of any private, public or quasi public work. 12. FORCE MAJEURE. The Landlord and Tenant agree that this Lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on the part of Tenant to be performed shall in no way be affected, impaired, or excused because Landlord is unable to fulfill any of its obligations under this Lease or to supply or is delayed in supplying any 10 service expressly or implied to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations, or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reason of strike or labor troubles or any cause beyond Landlord's control, including but not limited to, government preemption in connection with a National Emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any governmental agency or by reason of the conditions of supply and demand which have been or are affected by way or other emergency. 13. NOTICES. The Landlord and Tenant agree that any bill, notice or demand from Landlord to Tenant may be delivered personally at the Premises or sent by registered or certified mail. Such bill, notice or demand shall be deemed to have been given at the time of delivery or mailing. Any notice from Tenant to Landlord must be sent by registered or certified mail to the last address designated in writing by Landlord. Notwithstanding the above, invoices and statement for Additional Rent may be sent to Tenant at the Premises by first class U.S. mail. 14. SATISFACTION OF JUDGMENT AGAINST LANDLORD. The Landlord and Tenant agree that if Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord's part to be performed, and if as a consequence of such default Tenant shall recover a money judgment against Landlord, including any judgment entered pursuant to an arbitration award if such judgment is not voluntarily paid, then such judgment shall be satisfied only out of the proceeds of sale received upon execution of such judgment and levied thereon against the right, title and interest of Landlord in the Premises, or out of the rents or other income receivable therefrom by Landlord, and Landlord shall not be liable for any deficiency. 15. LANDLORD'S ASSIGNMENT. The Landlord and Tenant agree that, in the event of any transfer of Landlord's interest in the Premises to a transferee who assumes Landlord's obligations hereunder, the transferor shall be automatically relieved of any and all obligations on the part of the Landlord occurring from and after the date of such transfer and assumption by such assignee, as Landlord, and any funds then in the hands of Landlord in which Tenant has interest shall be turned over, subject to such interest, to the then transferee, notice of such sale, transfer or lease shall be delivered to Tenant as required by this agreement. 11  16. BINDING EFFECT. The Landlord and Tenant agree that the covenants, conditions and agreements contained in this Lease and in the Rules and Regulations attached hereto as Exhibit B shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, successors, administrators and executors, provided, however, that no assignment by, from, through or under the Tenant in violation of any of the provisions hereof shall vest in the assigns any right, title or interest whatsoever. 17. USE OF PRONOUNS. The Landlord and Tenant agree that wherever the word "Tenant" occurs, it is understood and agreed that it shall mean Tenant's associates, agents, clerks, servants and visitors. Wherever the word "Landlord" occurs, it is understood and agreed that it shall mean Landlord's assigns, agents, clerks, servants and visitors. 18. ENTIRE AGREEMENT. This Lease shall constitute the entire agreement of the parties hereto; all prior agreements between the parties, whether written or oral, are merged herein and shall be of no force and effect. This Lease cannot be changed, modified, or discharged orally but only by an agreement in writing, signed by the parties against whom enforcement of the change, modification or discharge is sought. 19. LAWS OF THE STATE OF MICHIGAN. This Lease shall be governed by, and construed in accordance with, the laws of the State of Michigan. If any provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease shall not be affected thereby and each provision of the Lease shall be valid and enforceable to the fullest extent permitted by the law. 20. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, administrators, executors, representatives, successors and permitted assigns. 12  21. SECURITY DEPOSIT. Landlord acknowledges receipt of the Security Deposit shown in Section 1 of this Lease, which deposit is to be retained by Landlord as security for the faithful performance of all of the covenants, conditions, rules and regulations, and agreements contained in this Lease, but in no event shall Landlord be obliged to apply the same upon rents or other charges in arrears or upon damages for Tenant's failure to perform the said covenants, conditions, rules and regulations, and agreements: Landlord may so apply the Security Deposit at Landlord's option and the Landlord's right to the other remedies upon default by the Tenant as provided for in this Lease shall not be affected. If Tenant shall fully comply with all the covenants, conditions, rules and regulations and agreements contained in this Lease, then the Security Deposit, or balance thereof, shall be returned to Tenant without interest after the termination of this Lease and after the removal of Tenant and surrender of possession of the Premises to Landlord. Landlord shall not be obliged to keep the Security Deposit as a separate fund and Landlord may commingle the Security Deposit with other funds of Landlord. This Lease has been duly executed by the Landlord and the Tenant as of the day and year first above written. LANDLORD: City of Sterling Heights Local Development Financing Authority By:_________________________________ Its:_________________________________ Dated: ______________________ TENANT: _____________________________________ By:__________________________________ Its:___________________________________ Dated: ______________________ 13  EXHIBIT A Location of Premises (Floor Plan) [TO BE ATTACHED]  EXHIBIT B (Rules and Regulations)  LDFA Business Sterling Heights, Michigan 1/19/16 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve finalization of the Velocity Parking Lot Repairs, Phase I, City Project # 14-256. Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is a summary and finalization of the Velocity parking lot repairs, Phase I. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve finalization of the Velocity Parking Lot Repairs, Phase I, City Project # 14-256.