FY2008-25 Lease Agreement - Supplemental Memorandum of Agreement and of a Lease with ProvidenceR-F*O& -aq
SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING �� 0
This agreement, effective the 2!�-day of FLIX 2008, is between the
Kodiak Island Borough ("KIB"), Kodiak Island Health Care F undation ("KIHCF") and
Providence Kodiak Island Medical Center ("PKIMC").
RECITALS
In March 2004, the parties executed a Memorandum of Understanding ("MOU")
regarding the Kodiak Community Health Center ("KCHC"). By mutual agreement, the
term of the MOU has been extended so that it is to end at the earlier of (a) December
31, 2008 or (b) the execution of a definitive agreement by the parties. A true and
accurate copy of the MOU with its addenda is attached as Exhibit A.
When the MOU was executed in March 2004, the parties anticipated that a
portion of the building occupied by PKIMC would be improved and altered to
accommodate the KCHC. Since then, the KIHCF has acquired funding so that a new
structure can be built on the real property leased by PKIMC from the KIB. This
structure (`the construction project") will be attached to the existing building.
Accordingly, the parties, by this Supplemental Memorandum of Understanding
("SMOU"), intend to confirm and update the terms of their agreement.
AGREEMENT
For and in consideration of their respective promises, the parties agree as
follows:
1. Except to the extent that specific sections of the MOU are modified by this
document, the terms of the MOU are incorporated into this SMOU.
2. As owner of the existing physical improvements on the real property
leased by PKIMC from the KIB, the KIB shall be the party to enter into architectural,
engineering and construction contracts as approved by PKIMC and KIHCF. All
contracts are subject to the KIB Code and all loans and/or grants obtained by or for
KIHCF.
3. The current funding sources and amounts are:
Construction Funding (Grant Funding)
Denali Commission
$1,802,347
Rasmuson
$750,000
Murdock
$250,000
KIB
$125,000
Kodiak Foundation
$30,000
Denali Com Design Phase
$443,563
Denali ANTHC $125,000
Total Grant Funding $3,525,910
USDA Funding
Loan $901,400
Grant $105,000
Total USDA $1,006,400
Total Grants/Loans $4,532,310
All parties acknowledge that these funding sources and the amounts appear
secure. However, some of the sources will award funds only upon receipt of invoices or
proof that an invoice has been paid by KIB. It is the KIB's expectation that it will be paid
within 60 days of submitting the receipts or invoices. Therefore, in the unlikely event
that any of the sources fails to pay within that 60 day period, the KIB reserves the right
to take all appropriate action, which may include, by example and not limitation,
reducing the scope of or canceling the construction project.
4. Upon completion of the physical improvements to the real property leased
by PKIMC from the KIB which are intended to accommodate the KCHC, the parties will
execute a Lease Agreement. The form of this agreement is attached as Exhibit B. This
lease will be the "definitive agreement" mentioned in the MOU. The date of the
completion of the physical improvements will be the date that the Kodiak building official
issues a certificate of occupancy.
5. The contact people for the KIB are Woody Koning, Director, Engineering
and Facilities Department and Rick Gifford, Kodiak Island Borough Manager.
6. The term of this SMOU (and of the MOU) will expire at the earlier of (a)
December 31, 2009 or (b) the completion of the physical improvements to the real
property leased by PKIMC from the KIB which are intended to accommodate the
KCHC.
SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING
Page 3 of 3
Providence Health System - Washington
d/b/a Providence Kodiak Island Medical Center
By:
ief Executivef' r
Date:
Kodiak Island Health Care Foundation
By:
Direc r
Date: l z
Kodiak Island Borough
By:
4!j�k
Manager
Date: v`Z/�' IAoug
ft
ATTEST:
Borough Clerk G
Date:
SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING
Page 3 of 3
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Memorandum of Understanding between the Kodiak Island Borough (KIB), Kodiak Island
Health Care Foundation (KIHCF) and Providence Kodiak Island Medical Center
(PKIMC)
The purpose of the memorandum is to summarize the duties and responsibilities of all parties
involved in leasehold improvements planned by Providence Kodiak Island Medical Center. The
purpose of the leasehold improvements is to integrate the Kodiak Community Health Center into
the existing hospital facility. Pursuant to a master facility site pian, the design could entail
converting existing hospital administration and support areas back to patient care areas and will
involve both rehabbing, converting and improving the hospital and Specialty Clinic spaces.
Definitions:
Kodiak Island Borough (KIB): The owner of the hospital facilities.
Kodiak Island Healthcare Foundation (KIHCF): The agency responsible for the operations of
the Kodiak Community Health Center and grant administrator of funds received from the Denali
Commission and other granting agencies for the conceptual planning, design and construction of
leasehold improvements at PKIMC to accommodate the KCHC within the hospital facilities.
Providence Kodiak Island Medical Center (PKIMC): The organization leasing and operating
the hospital facilities from KIB.
Kodiak Community Health Center: A Federally Qualified Health Center supported by Section
330 funding. KCH provides primary care services with a focus on the uninsured and
underinsured
Denali Commission: An Alaskan granting agency providing one half of the architectural and
engineering funds for conceptual planning and design and one half of the construction costs of
the leasehold improvements.
Alaska Native Tribal Health Consortium (ANTHC) An oversight agency contracted by the
Denali Commission. They are responsible for grant fund distribution, environmental review and
RFP process approval. They provide project reports to the Denali Commission.
WITNESSETH
Whereas, the KCHC through the KIHCF desires to lease space on hospital premises for the
purpose of establishing a clinic and providing primary care services to an estimated medically
underserved population of 4400 people. At full operations, KCHC will provide a full range of
primary care services along with diagnostic laboratory services, preventive medical and dental
services, patient care management, mental health services, substance abuse prevention, and
health education and outreach.
Whereas, PKIMC desires to sublease a portion of the hospital facilities for the operation of the
KCHC and to provide leasehold improvements to accommodate the integration of the KCHC
into the existing hospital facilities;
NOW, THEREFORE, it is mutually agreed as follows:
1. As owner of the hospital facilities, KIB agrees to:
a. Provide to PKIMC project design and construction management support to
include managing the design contract process from solicitation award to
management of the design contractor.
b. Approve the leasehold improvements planned by PKIMC pursuant to Section
25.1 of the Lease Agreement (LA) between KIB and Providence Health System.
i. Section 25.1: IMPROVEMENTS AND ALTERATIONS: Providence
shall make no alterations in, or additions or improvements to, the
permanent structure of the Premises without first obtaining the
written consent of KIB. Any additions and improvements made to
the permanent structure of the Premises shall remain upon and be
surrendered with such Premises as a part thereof at the expiration of
the term of this Agreement, by lapse of time or as otherwise
provided herein
c. Provide to the extent possible and subject to Assembly approval funding for
the project if project costs exceed funds received from Denali and other
granting agencies.
i. Approved funding to date:
1. Denali for A&E - $125,000
a. Matched by KIB - $125,000
2. Denali for one half the estimated construction costs -
$1,250,000
a. Matched by KIB unless other funding sources are
secured, contingent on Assembly approval and
available funding.
ii. Other potential funding sources (Project LOI has been accepted and
request for full proposals received by KIHCF):
1. Rasmuson Foundation - $750,000 requested
2. M.J. Murdock Charitable Trust - $500,000 requested
iii. The project scope may be reduced or modified depending on the final bid
price and funding subject to Assembly approval.
d. Grant approval for PKIMC to sublease a portion of the hospital facilities to the
KIHCF pursuant to Section 40.1 of the Lease Agreement between KIB and
Providence Health System..
1. Section 40.1: ASSIGNMENT AND SUBLEASE: Providence
may assign this Agreement and may sublease the Hospital, in
whole or in part, only with the prior consent of the KIB...
2. The KIHCF agrees to:
a. Support PKIMC's leasehold improvement project by contributing grant funds and
other revenue sources to PKIMC for the cost of the project.
b. Apply to Rasmuson, Murdock and other granting agencies for grant funding of
the project.
c. Act as the grant administrator and comply with all the record keeping and
reporting requirements as stipulated by Denali and/or ANTHC.
d. Request funds from Denali or ANTHC as needed to pay for the costs incurred by
PKIMC under both the design and construction phase of the project.
e. Participate in the master planning, conceptual planning, design and construction
phases of the project.
3. PKIMC agrees to:
a. Enter into architectural, engineering and construction contracts as approved and
agreed to by KIB and contingent upon design and construction funding by Denali,
KIB and other granting agencies through the KIHCF.
b. Participate in the A&E and contractor selection process as developed by KIB.
c. Participate in the master planning, conceptual planning, design and construction
phases of the project.
d. Request funds from KIHCF and KIB as needed to pay for the costs incurred by
PKIMC under both the design and construction phase of the project.
i. The flow of funds are as follows:
A&E
C
ontractor
Other
Contracting
Agencies
e. Give serious consideration to KCHC space and facility requirements during the
planning process.
f. Seek approval from KIB to sublease part the hospital facilities to the KIHCF.
g. Seek approval from KIB to improve and alter the hospital facilities.
h. Remain cognizant of KIHCF and KCHC fiscal and operational condition and
provide support and assistance as needed during the remaining lease term
pursuant to the contract for any additional space occupied by KCHC in addition to
the office space required under LA Section 33.1
Approvals: The transactions contemplated by this Letter of Intent are contingent upon all parties
securing all necessary corporate, governmental and other approvals.
All parties agree to comply with the following federal provisions to this project:
a. 15 CFR 24, Uniform Admin Requirements for Grants/Cooperative Agreements to
State and Local Governments
w"vw. access. gpo.t:ov/nara/cfr/waisidx 99/15cfr24 99.html
(applies to local or tribal government)
b. OMB Circular A-87, Cost Principals for State and Local Governments and Indian
Tribal Governments
wvr,Al.whitehouse.gov/OMB/circulars/aO87/aO87-all.htm]
(applies to local or tribal government)
c. OMB Circular A-133, Audits of States, Local Governments and Non -Profit
Organizations
,,vww.whitehouse.gov/OMB/circulars/al 33/a l.33.htm1
(applies to all agreements)
d. 15 CFR, Part 14, Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education, Hospitals, Other Nonprofit,
and Commercial Organizations
wAvA,. access. gpo.,gov/nara/cfr/waisidx 99/15cfrl4 99 html
(applies to non -profits)
e. OMB Circular A-122, Cost Principles for Nonprofit Organizations
w,A,,A,.whitehotise.gov/OMB/circulars/al2")/al 22.html
(applies to non -profits)
Term: This Memorandum of Understanding will expire at the earlier of (a) December 31, 2004,
or (b) the execution of the definitive agreement by the parties.
Contact People:
KIB - Bud Cassidy, Director, Engineering and Facilities Department and Pat Carlson, Kodiak
Island Borough Manager
KIHCF- Jimmy Ng, Director
PKIMC - Don Rush, CEO and Stan Thompson Facilities Manager
( �v
Kodiak Island Heal f
c Foundation
��rovid�ence Kodiak Is Medical Center
Pc':� It" a.—
Kodiak Island Borough
Date Signed:
i Pk ,
Date Signed: ► es t�
Date Signed: /a, () H
ATTEST: ��
udi Nielsen, Borough Clerk
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ADDENDUM NO.] TO MEMORANDUM OF UNDERSTANDING AGREEMENT
This Addendum relates to the Memorandum of Understanding Agreement dated March 1,
2004, executed by the undersigned parties (the "Agreement"}.
The parties hereby agree as follows:
1. The Termination date of this Agreement shall be amended, so that the
Memorandum of Understanding will expire at the earlier of (a) December 31, 2006, or (b)
the execution of a definitive Agreement by the parties.
This Addendum shall be effective as of January 1, 2005. Except as otherwise specifically
provided herein, the terms of the Agreement shall remain in full force and effect. This
Addendum shall be attached to and incorporated into the Agreement.
Providence Health System — Washington
d/b/a Providence Kodiak Island Medical Center
B
Its
Date_ 1 t 'l / L7
Kodiak Island Healthcare Foundation
By �
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Its r Date_j L v
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phanc/Addendum MOU Kodiak
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ADDENDUM NO.2 TO MEMORANDUM OF UNDERSTANDING AGREEMENT
This addendum relates to the Memorandum of Understanding Agreement dated March 1,
2004 with an addendum to extend dated January 1, 2005, executed by the undersigned
parties (the "Agreement").
The parties herby agree as follows:
The Termination date of this Agreement shall be amended, so that the Memorandum of
Understanding will expire at eh earlier of (a) December 31, 2008, or.(b) the execution of
definitive Agreement by the parties.
This Addendum shall be effective as of January 1, 2007. Except as otherwise specifically
provided herein, the terms of the Agreement shall remain in full force and effect. This
Addendum shall be attached to and incorporated into the Agreement.
Providence Health System — Washington
d/b/a Providence Kodiak Island Medical Center
Chie�Exec�v Officer
Date:
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Date:
Health Care Foundation
U
Kodiak Island Borough
By:
�fiinager
Date: 'yxq 7
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1
LEASE AGREEMENT
This Lease is by and between Kodiak Island Borough ("Landlord") and
Kodiak Island Health Care Foundation ("Tenant") which is the sole owner and operator of
the Kodiak Community Health Center (KCHC).
Landlord owns certain property located at 1915 E. Rezanof Drive, Kodiak
Alaska (the "Property"), which property has been leased to Providence Health System
Alaska ("Providence" and "the Providence Lease"). The legal description of the Property
is:
Lot Two -A (2-A) Hospital Subdivision according
to Plat 95-03, located in the Kodiak Recording
District, Third Judicial District, State of Alaska.
The Providence Lease anticipated that a portion of the Property would be
leased to KCHC. Located on the Property is a medical office building of approximately
7357 useable square feet (the "Building"). Tenant desires to lease the Building from
Landlord for medical, health care, or office purposes consistent with the terms and
conditions of this Lease.
Landlord, Providence, or its successor in interest and Tenant agree as
follows:
1. Leased Premises. Landlord leases the Building and the portion of the
Property as described on attached Exhibit A (the "Leased Premises") to Tenant on the
terms set forth in this Lease Agreement.
Providence is aware of and consents to this Lease Agreement. As noted in the
November 2005 Amended and Restated Lease Agreement between the Kodiak Island
Borough and Providence (which was renewed by another agreement signed by the
parties in 2007), Providence recognized that the Kodiak Island Borough might lease
space to another entity. For fair and adequate consideration, the receipt of which is
acknowledged, Providence agrees that the Leased Premises as described in this Lease
Agreement shall be considered deleted from the November 2005 Amended and Restated
Lease Agreement.
2. Lease Term. The term of this Lease shall be for twenty-five years,
beginning June 16, 2009 and terminating June 15, 2034 ("the Lease Term"). If the Lease
Term shall commence on a day other than the first day of a calendar month, the term of
the lease shall be measured from the first day of the month following the month in which
the term commences, and Tenant shall pay a prorated monthly rental for the initial partial
month.
3. Renewal Option. Provided that Tenant is not in default under this Lease
Agreement, Tenant shall have the option to extend this Lease Agreement for one
additional term of twenty-five years by providing Landlord with 180 days prior written
notice. The extended term shall be on the same terms and conditions of this Lease
Agreement, or as such terms and conditions are modified upon mutual written agreement
of both parties, with monthly lease payments to be established by negotiation.
4. Rent. Tenant shall pay as rent for the Leased Premises during the initial
term the nominal sum of $120 per year. The rent shall be paid in full to Landlord on or
before the first day of the Lease Term, and shall be payable to Landlord at the address
shown herein, or at such other place as Landlord may direct from time to time in writing.
5. Use of Leased Premises/Hazardous Waste. Tenant shall use the Leased
Premises as a medical clinic or for any other medical, health care related or office
purposes as it may deem necessary or appropriate. Notwithstanding anything to the
contrary, if Tenant uses the Leased Premises for any purpose in conflict with the Lease
and all its provisions, dated April 21, 1997 between Kodiak Island Borough and
Providence Health & Services — Washington, this Lease may be terminated by Landlord
upon 30 -days prior written notice.
Tenant may not use the Leased Premises for any other purpose without the advance
written consent of Landlord. Tenant shall be responsible to properly handle and
arrange for the appropriate disposition of all hazardous wastes and materials in
accordance with all applicable federal and state laws and regulations. Landlord
represents and warrants that the Leased Premises are currently free from any
hazardous waste and materials. The Leased Premises shall be operated by Tenant as
a smoke-free facility.
6. Signs/Advertising. Tenant may display any sign, notice, picture or poster,
or any advertising as it deems necessary or appropriate, provided such sign or
advertising conforms to any applicable sign or advertising ordinance. Landlord shall not
display any sign, notice, picture, poster, or advertisement on the Leased Premises without
the prior written consent of Tenant and the consent of Providence or its successor in
interest, if any.
7. Utilities. Tenant shall, at its expense, pay for all utilities furnished to the
Leased Premises and for routine cleaning services during the term of this Lease.
Landlord represents and warrants that all utilities necessary for the proper functioning of
the Building, including but not limited to electricity, water, sewer, and septic, are currently
in good condition and repair and available to Tenant at the Leased Premises. Landlord
shall not be liable to Tenant in the event of and there shall be no abatement of rent by
reason of, any interruption in any utility service to the Leased Premises.
Lease Agreement - Kodiak Island Borough and KCHC
Page 2
8. Taxes. Tenant shall pay any taxes levied on any of its personal property
and trade or other fixtures located at the Leased Premises, and any license, excise fees,
and occupation taxes covering businesses conducted on the Leased Premises. Landlord
shall pay all real property taxes and assessments payable on the Leased Premises.
9. Maintenance and Repair. Tenant shall, at its sole expense, maintain and
keep in good condition and repair, consistent with all applicable state and local codes, the
Leased Premises and Building including, without limitation, the foundation, exterior and
interior walls, roof, and other structural portions of the Building and common areas, and
shall maintain the electrical, plumbing, heating and ventilating equipment in the Building in
good condition and repair.
Tenant shall not commit waste of any kind on or about the Leased
Premises and Tenant shall pay for all damage to the Building or Leased Premises,
caused by misuse or neglect of the Leased Premises by Tenant or Tenant's employees,
agents, or invitees. At the expiration of the term hereof, Tenant shall surrender the
Leased Premises in good condition, normal wear and tear and damage by fire or other
casualty excepted.
10. Alterations and Improvements. Tenant shall not make any alterations,
additions, or improvements in or to the Leased Premises without the prior written consent
of Landlord. Any alteration, addition, or improvement consented to by Landlord shall be
made at Tenant's expense unless otherwise agreed. Tenant shall secure all
governmental permits required in connection with such work, and shall hold Landlord
harmless from all liabilities and liens resulting there from. All alterations, additions, and
improvements, which become attached to the Building (except trade fixtures, furniture,
furnishings, and equipment) shall immediately become the property of Landlord without
Landlord's obligation to pay therefor. Upon the removal of any trade fixtures, furniture or
fixtures, and/or equipment, which become attached to the Building, Tenant shall restore
the Leased Premises to the same condition that they were prior to the installation of such
items.
11. Liability for Injury and Damage. Tenant shall indemnify and hold Landlord
harmless from all loss, damage, liability and expense (including reasonable attorney's
fees) relating to any actual or alleged injury to or death of any person or loss or damage
to property caused by or resulting from any occurrences in the Building or on the
Property, except to the extent caused by Landlord's negligence, intentional or willful act.
12. Insurance. Tenant shall, at Tenant's expense, be responsible to keep the
Building, improvements, and any of Landlord's equipment located on the Leased
Premises insured against loss or damage by fire or other casualty. Such insurance shall
be maintained at not less than 90% of the fair market value of the Leased Premises.
Annually, Landlord shall furnish Tenant and Providence, or its successor in interest, if
Lease Agreement - Kodiak Island Borough and KCHC
Page 3
any, with a copy of such policies or a certificate evidencing that such insurance is in
effect.
Tenant shall, at Tenant's expense, maintain comprehensive general liability
insurance with an insurance company satisfactory to Landlord with minimum limits of
$2,000,000 (per accident) for property damage and $2,000,000 (per person) and
$2,000,000 (per accident or occurrence) for bodily injuries and death, to indemnify both
Landlord and Tenant with respect to the items which Tenant has herein agreed to
indemnify and hold Landlord harmless. Landlord reserves the right to increase the
minimum limits based on changes in industry standards. Annually, Tenant shall furnish
Landlord and Providence, or its successor in interest, if any, with a copy of such policies
or a certificate evidencing that such insurance is in effect.
13. Liens and Encumbrances. Landlord and Tenant shall keep the Leased
Premises free and clear of any liens and encumbrances including, without limitation,
mechanic's and materialmen's liens, arising or growing out of the use and occupancy of
the Leased Premises by Tenant or by any work performed by Landlord or Tenant on the
Leased Premises.
14. Eminent Domain. If the entire Leased Premises (or such portion that the
remainder of the premise is not reasonably suitable for their intended purpose) shall be
taken by any public or governmental authority under the power of Eminent Domain, the
term of this Lease shall cease as of the date that possession is taken by such authority
and the rental shall be paid up to that date. If only a part of the Leased Premises shall be
taken and the remainder remains tenantable for the purposes for which Tenant has been
using the Leased Premises then this Lease shall continue in effect, except that the rental
shall be reduced in proportion to the amount of the floor area (in terms of square feet) of
the Leased Premises taken, and Landlord at its expense, shall make all necessary
repairs and alterations to the Leased Premises required by such taking. All damages
awarded for such taking may be retained by Landlord, whether such damage is awarded
as compensation for diminution in the value of the leasehold or in the fee of Leased
Premises but Landlord shall not be entitled to any portion of the award made to Tenant.
The term "Eminent Domain" as used herein shall include the exercise of any similar
governmental power and any purchase or other acquisition in lieu thereof.
15. Fire and Other Casualty. Should the Leased Premises be damaged by fire
or other casualty, the damage shall be repaired with due diligence by Tenant unless
Providence, or its successor in interest, if any, is held responsible for the initiation of the
fire or casualty.
Tenant shall be solely responsible for repairing any damage or for filing any
insurance claims relating to damage to Tenant's personal property or improvements
made at Tenant's expense unless such damage is caused by the negligence of Landlord
Lease Agreement - Kodiak Island Borough and KCHC
Page 4
or the fire or casualty began in the facility operated by Providence, or its successor in
interest.
16. Inspection. Landlord and its agents and Providence, or its successor in
interest, if any, shall have the right to inspect the Leased Premises at all reasonable times
and upon reasonable prior notice to enter the same whenever reasonably necessary to
exercise any right or privilege of Landlord under this Lease. Reasonable notice is defined
as reasonable notice given to Tenant's executive director and includes maintenance
requests and service agreement requests for maintenance from Landlord and
Providence, or its successor in interest.
17. Waiver of Subrogation. Tenant and Landlord hereby mutually release each
other from liability and waive all right of recovery against each other for any loss from
perils insured against under their respective fire insurance policies, including any
extended coverage and endorsements thereto.
18. Default and Insolvency. If Tenant fails to keep or perform any of the
covenants or conditions of this Lease within ten (10) days after written notice of default (or
fails to commence cure of said default within ten (10) days and fails in good faith to
prosecute cure or correction of such default until completion) or if the leasehold shall be
attached or levied on under execution, or if a receiver shall be appointed for Tenant's
property or any part thereof, or if a petition of bankruptcy shall be filed by or against
Tenant, or if Tenant shall be declared insolvent according to law or if any assignment of
Tenant's property shall be made for the benefit of creditors, or otherwise, then, in any of
said events, Landlord may, at Landlord's option, at once terminate this Lease, and upon
termination of this Lease, at the option of Landlord, as aforesaid, or at the expiration or
termination of this Lease by its term, Tenant shall at once surrender possession of the
Leased Premises to Landlord and remove all Tenant's effects therefrom, and, if such
possession not be immediately surrendered, Landlord may enter into and upon the
Leased Premises and repossess them and expel Tenant or those claiming under Tenant
and remove the effects of any of them, and lock the Leased Premises without being
deemed guilty in any manner of trespass and without prejudice to any other remedies.
No right or remedy herein conferred upon or reserved to Landlord is intended to be
exclusive of any other right or remedy given hereunder for now or hereafter existing at law
or in equity or statute.
If Landlord is in default of any of its obligations under this Lease, Tenant
shall have all available remedies under law including, without limitation, the right to cancel
and terminate this Lease upon thirty (30) days prior written notice provided Landlord shall
have the opportunity to cure any such default within such 30 -day period.
19. Holdinq Over. In the event Tenant remains in possession of the Leased
Premises after the expiration of this Lease, Tenant shall be deemed to be occupying the
Lease Agreement - Kodiak Island Borough and KCHC
Page 5
Leased Premises as a Tenant from month to month subject to all of the conditions,
provisions and obligations of this Lease insofar as they may be applicable to such month
to month tenancy. Further, the Landlord shall have the option of increasing the monthly
rental to 1.15 times the rent payable for the Leased Premises for the months after such
expiration.
20. Assignment. Neither party may assign this Lease or any interest in this
Lease without the prior written consent of the other party and the written consent of
Providence, or its successor in interest. Notwithstanding the above, Tenant may sublet
portions of the Leased Premises without the consent of Landlord provided such
subtenants consent in writing to comply with applicable provisions of this Lease.
21. Parking and Common Area Matters. All issues regarding parking, access to
the other buildings on the Property and related housekeeping issues are to be resolved
by and between Providence, or its successor in interest and Tenant
22. Entire Agreement. This Lease contains the entire agreement of Landlord
and Tenant. There are no promises, terms, conditions, or obligations other than those
contained herein; and this Lease shall supersede all previous communications,
representations or agreements, either verbal or written between the parties hereto. This
Lease may be modified only by a written agreement executed by both Landlord and
Tenant.
23. Parties Affected. Except as otherwise provided by the terms of this Lease,
the rights, liabilities and remedies provided for herein shall extend to the heirs, legal
representatives, successors and assigns of the parties hereto.
24. Action or Suit. If any suit or action is instituted by either party for the
enforcement of any covenant contained in this Lease, the prevailing party shall recover all
costs and attorney's fees as the court may judge reasonable to be allowed in such suit or
action or any appeal thereon.
25. Notices. Any notice shall be sufficient if in writing and deposited in the
United States mail either registered or certified, postage prepaid, or personally delivered
to the addresses listed below:
Landlord: Manager, Kodiak Island Borough
711 Mill Bay Road
Kodiak, Alaska 99615
Tenant: Director, Kodiak Island Health Care Foundation
1911 E. Rezanof Dr.
Lease Agreement - Kodiak Island Borough and KCHC
Page 6
Kodiak, AK 99615
Notices so mailed out will be deemed to have been given forty-eight (48) hours
after the deposit of such notice in any United States Post Office mailbox. The above
addresses may be changed in the manner provided in this paragraph for giving notice.
26. Authority. If either Landlord or Tenant is a corporation or partnership, each
individual executing this Lease on behalf of said corporation or partnership represents
and warrants that he or she is duly authorized to execute and deliver this Lease on behalf
of said corporation or partnership and that this Lease is binding upon said corporation or
partnership. The individuals signing on behalf of Landlord further warrant and represent
that they are authorized to act on behalf of Landlord in all matters relating to this Lease.
27. Quiet Enjoyment. So long as Tenant is not in default, Tenant shall have the
right of quiet enjoyment of the Leased Premises without disturbance by Landlord or by
any person having title paramount to Landlord's or by any person claiming under
Landlord, subject to the other terms and provisions of this Lease.
28. Priority of Tenant's Interest. This Lease is and shall be prior to any
encumbrance hereafter recorded affecting the Leased Premises. If, however, the holder
of any encumbrance requires that this Lease be subordinate to said encumbrance,
Landlord shall obtain a written agreement from the holder of such encumbrance stating
that, so long as Tenant is not in default, no foreclosure of, or sale pursuant to the
encumbrance, and no steps taken pursuant to the encumbrance, shall affect Tenant's
rights under this Lease.
29. Memorandum of Lease. Upon request by Tenant or Landlord, a
memorandum of this Lease shall be recorded evidencing the commencement date,
expiration date and renewal option. Otherwise, this document shall not be recorded.
30. Commissions. The parties warrant and represent to each other that no
broker's commission is payable as a result of this Lease.
31. Other Tenants. Upon the Commencement Date of this Lease, Landlord
shall transfer possession of the Leased Premises to Tenant free and clear of any other
tenants or third parties in possession, except as otherwise agreed to in writing by Tenant.
32. Tenant's Responsibility For Contamination By Hazardous Substances.
(a) For purposes of this Agreement, the phrase "Hazardous Materials"
shall refer to and include: (i) any and all substances defined as "hazardous substances",
"hazardous materials" or "toxic substances" in the Comprehensive Environmental
Lease Agreement - Kodiak Island Borough and KCHC
Page 7
Response, Compensation and Liability Act of 1980, as amended (42 USC Section 9601,
et. seq.), the Hazardous Materials Transportation Act (49 USC Section 1801, et. seq.),
and the Resource Conservation and Recovery Act (42 USC Section 6901, et. seq.); (ii)
any and all substances which now or in the future are deemed to be pollutants, toxic
materials or hazardous materials under any other state or federal law.
(b) Tenant shall at all times during the Lease Term use, sell, store,
transport, dispose or and treat hazardous materials in strict accordance with all applicable
federal, state and local laws and regulations (collectively referred to for the remainder of
this Paragraph 32 as the "Laws"). If, during the Lease Term, there occurs upon the
Leased Premises any release, spill, leak, or discharge or hazardous materials which is in
violation of any of the Laws and is caused by any activity or activities of Tenant or with
respect to the Leased Premises, then Tenant shall be obligated to cause and complete
the repair, cleanup, detoxification and/or decontamination of the Leased Premises and
the preparation and implementation of any closure, remedial action or other required plan
or plans in connection therewith, all as required by the Laws.
(c) Tenant shall indemnify, defend, protect and hold harmless Landlord and
each of Landlord's partners, employees, agents, successors and assigns (collectively
referred to for the remainder of this Paragraph 32 as "Landlord")), from and against any
and all criminal and civil claims and causes of action (including but not limited to claims
resulting from, or causes of action (including but not limited to claims resulting from, or
causes of action incurred in connection with, the death of or injury to any person, or
damage to any property), liabilities (including but not limited to liabilities arising by reason
of actions taken by any governmental agency), penalties, forfeitures, prosecutions, losses
and expenses (including reasonable attorney fees) which directly or indirectly arise from
or are caused by either the presence in, on or about the Leased Premises or any
improvements located thereon of any hazardous materials, or the use, sale, storage,
transportation, disposal, release, threatened release, discharge or generation of
hazardous materials to, in, on, under, about or from the Leased premises or any
improvements located thereon. Tenant's obligations under this subparagraph 32(c) shall
include, but not be limited to, the obligation to bear the expense of any and all costs,
whether foreseeable or unforeseeable, of any necessary (as required by the Laws) repair,
cleanup, detoxification or decontamination of all or any portion of the Leased Premises (or
any improvements located thereon), and the preparation and implementation of any
closure, remedial action or other required plan or plans in connection therewith.
Notwithstanding the preceding provisions of this subparagraph 32(c), Tenant shall have
no obligation to indemnify, defend, protect and/or hold harmless Landlord with respect to
any release, spill, leak or discharge of hazardous materials on the Leased Premises
which results solely from the negligence or intentional misconduct of Landlord or from
activities on or around the Leased Premises before the Lease Term or after the Lease
Term.
Lease Agreement - Kodiak Island Borough and KCHC
Page 8
(d) Notwithstanding any other provision of this Agreement, the obligation of
Tenant pursuant to this Paragraph 32 shall remain in full force and effect after the
termination of the Lease Term and until the expiration of the latest period stated in any
applicable statute of limitations during which a claim, cause of action or prosecution
relating to the matters described herein may be brought, and until payment in full or
satisfaction of any and all losses, claims, causes of action, damages, liabilities, charges,
costs and expenses for which Tenant is liable hereunder shall have been accomplished.
(e) For purposes of this Paragraph 32, any acts or omissions of or by any
one or more employees, agents, assignees, sublessees, franchisees, licensees,
permitees, customers, patients, contractors, successors -in -interest or other persons
permitted by Tenant (whether or not the actions of such persons are negligent,
intentional, willful or unlawful) shall be strictly attributable to Tenant.
33. Dispute Resolution. The parties agree that the following dispute resolution
provisions shall be the exclusive and binding method for resolving any and all disputes
arising out of or relating to this Agreement.
The parties agree that the first step in resolving any controversy, dispute or
disagreement will be good faith negotiations between designated representatives of the
parties designed to negotiate a mutually -acceptable resolution of the dispute or
controversy.
If the parties are unable to resolve the dispute pursuant to such good faith negotiations
within 30 days after the initiation of such negotiations, the controversy, dispute or
disagreement shall be submitted to mediation pursuant to the American Health Lawyer's
Association Alternative Dispute Resolution Rules of Procedure for mediation.
If the mediation is unsuccessful in resolving the dispute within 60 days after the dispute
has been submitted to and accepted by a mediator in accordance with the above -
referenced rules, any of the parties may resort to binding arbitration for the purpose of
resolving such controversy, dispute or disagreement. The arbitration shall be in
accordance with the American Health Lawyer's Association Alternative Dispute
Resolution Service Rules of Procedure for Arbitration, and shall be before a single
arbitrator mutually selected by the parties, or if the parties are unable to mutually agree
as to such arbitration, then a single arbitrator shall be selected in accordance with the
forgoing rules. The venue for both mediation and arbitration shall be Anchorage, Alaska
Judgment on the award rendered by the arbitrator may be entered in any court having
jurisdiction.
EXECUTED by the parties on the dates indicated below.
Lease Agreement - Kodiak Island Borough and KCHC
Page 9
LANDLORD:
KODIAK ISLAND BOROUGH
By:
Its: /, / n 4- e v,
Date:
TENANT:
Kodiak I landHealth C re Fc
By:
Its:
Date: - 7-0
Consent
J
This agreement has been reviewed and its terms are acceptable to Providence Health
Systems Alaska.
Providence Health System - Washington d/b/a
Providence Health System in Alaska
By:
E. A Parrish, Its Regional Vice President and
fExecutive
Date: //4/zo s v
realprop/LeaseAgmt4
Lease Agreement - Kodiak Island Borough and KCHC
Page 10
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KODIAK ISLAND BOROUGH
AGENDA STATEMENT
FEBRUARY 21, 2008 REGULAR MEETING
ITppi'EMM--NO:13.B.7
TITLE: X K�[ico (*Ad IVa'ly
Resolution No. FY2008-29 Authorizing the Execution of a Supplemental Memorandum of
Agreement and of a Lease With Providence Health System Alaska and Kodiak Island
Health Care Foundation for the Kodiak Community Health Center.
SUMMARY:
The Kodiak Island Borough has been working with Providence and the Kodiak Island Health
Care Foundation (KIHCF) to provide facility space for the Kodiak Community Health Center
(KCHC). By means of a Memorandum of Agreement (MOU) originally executed in March 2004,
KIB confirmed its support to this project.
A Hospital Master Plan helped identify the needs of the KCHC and it determined that an
additional building added to the Hospital facility was appropriate for the KCHC facility space.
The KIHCF has raised grants and loans in the amount of $4, 532,310 including a matching grant
of $125,000 from KIB to construct a new building that would be attached to the existing hospital
facilities. The construction contract will be coming before the Assembly in the near future for
approval.
Prior to awarding the construction contract, it is appropriate to renew the MOU by means of a
Supplemental Memorandum of Understanding (SMOU) which reflects the changes in the nature
of the project since the MOU was originally executed. It is also appropriate to approve a lease
which will be the "definitive agreement by the parties" with the term of the lease to begin on the
date that a certificate of occupancy is issued for the new building.
The essential terms and conditions of the attached lease is a twenty-five (25) year lease with an
option to extend an additional twenty-five years upon mutual written agreement. The annual
lease would be $120 per year which was negotiated based on the fact that the KIHCF has
raised most of the funds to construct the building and has agreed through the lease to be
responsible for all maintenance and repairs to the building during the lease.
APPROVAL FOR AGENDA: a,,rzr;4��'
r
RECOMMENDED MOTION: Move to adopt Resolution No. FY2008-29.
Introduced by:
Manager Gifford
Requested by:
Assembly
Drafted by:
Borough Attorney
Introduced:
02/21/2008
Adopted:
KODIAK ISLAND BOROUGH
RESOLUTION NO. FY2008-29
A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
AUTHORIZING THE EXECUTION OF A SUPPLEMENTAL MEMORANDUM OF AGREEMENT
AND OF A LEASE WITH PROVIDENCE HEALTH SYSTEM ALASKA AND KODIAK ISLAND
HEALTH CARE FOUNDATION FOR THE KODIAK COMMUNITY HEALTH CENTER
WHEREAS, by means of a Memorandum of Agreement ("MOU") originally executed in March
2004 between the Kodiak Island Borough ("KIB"), Kodiak Island Health Care Foundation ("KIHCF")
and Providence Kodiak Island Medical Center ("PKIMC"), the Kodiak Island Borough confirmed its
support for providing facilities to be leased to the Kodiak Community Health Center ("KCHC"); and
WHEREAS, my mutual agreement, the term of the MOU has been extended so that it is to end at
the earlier of (a) December 31, 2008 or (b) the execution of a definitive agreement by the parties;
and
WHEREAS, when the MOU was executed in March 2004, the parties anticipated that a portion of
the building occupied by PKIMC would be improved and altered to accommodate the KCHC; and
WHEREAS, since then, the KIHCF has acquired funding so that a new structure can be built on
the real property leased by PKIMC from the KIB; and
WHEREAS, this structure will be attached to the existing faciltiy; and
WHEREAS, it is now appropriate to renew the MOU by means of a Supplemental Memorandum
of Understanding ("MOU") which reflects the changes in the nature of the project since the MOU
was originally executed; and
WHEREAS, it is also appropriate to approve a lease which will be the "definitive agreement by
the parties" with the term of this lease to begin on the date that a certificate of occupancy is issued
for the new building.
NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH that
Section 1: The Manager is authorized to execute the attached Supplemental Memorandum of
Understanding ("MOU") with Kodiak Island Health Care Foundation ("KIHCF") and
Providence Kodiak Island Medical Center ("PKIMC") regarding facilities to be leased
to the Kodiak Community Health Center ("KCHC').
Section 2: When a certificate of occupancy is issued for the new building the Manager is
authorized to execute the attached Lease Agreement between Kodiak Island
Borough ("Landlord") and Kodiak Island Health Care Foundation ("Tenant") and
Providence Health System - Washington d/b/a Providence Health System in Alaska.
Kodiak Island Borough, Alaska Resolution No. FY2008-29
Page 1 of 2
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS DAY OF , 2008
KODIAK ISLAND BOROUGH
Jerome Selby, Borough Mayor
ATTEST:
Nova Javier, CMC, Borough Clerk
Kodiak Island Borough, Alaska Resolution No. FY2008-29
Page 2 of 2