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FY2008-25 Lease Agreement - Supplemental Memorandum of Agreement and of a Lease with Providence R r='f~OOg -'11 'Xr{fF(]tltyxfA,)o . SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING 4'/lJ)08''2!J This agreement, effective the ~ay of 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. Atrue 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 Rasmuson Murdock KIB Kodiak Foundation Denali Com Design Phase $1,802,347 $750,000 $250,000 $125,000 $30,000 $443,563 Denali ANTHC Total Grant Funding jS125.000 $3,525,910 USDA Funding Loan Grant Total USDA $901 ,400 jS105,OOO $1,006,400 $4,532,310 Total Grants/Loans 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:C:;; ~ ~~ ief Executive f r -- Date: ?(rf I ~ ( Kodiak Island Health Care Foundation By: . D~~l}/f/\{ ley Date: II hi!) c9-0o g Kodiak Island Borough By: M~ cS~ Date: ~/rs~rl<Jg . ATTEST: Borough Clerk L Date: 0<./:2/[ _2fJ6 V SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING Page 3 of 3 6'Kh;Io,'{ , I II /1 C2 at) '-1-1'1 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 plan, 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 ofKIB. 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. 11. Other potential funding sources (Project LOI has been accepted and request for full proposals received by KIHCF): 1. Rasmuson Foundation - $750,000 requested 2. MJ. Murdock Charitable Trust - $500,000 requested lll. 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 KlliCF 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: / 1 ~ 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 KID 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 \V\vvv.access.gpo.gov/naralcfr/waisidx 99/1501'r24 99.htmJ (applies to local or tribal government) b. OMB Circular A-87, Cost Principals for State and Local Governments and Indian Tribal Governments \VW'N. whitehouse.gov/O MB/circulars/a087 ia087 -all.html (applies to local or tribal government) c. OMB Circular A-I33, Audits of States, Local Governments and Non-Profit Organizations www.\ovhitehouse.gov/OMB/circulars/a133ia133.html (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 Organizati ons \ov'Ww.access.gpo.,gov/naralcfr/waisidx 99/15c[[14 99.html (applies to non-profits) e. OMB Circular A-I22, Cost Principles for Nonprofit Organizations \'WlW. whitehouse.gov/O MB/circulars/a l22/a 122.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 Date Signed: ) tit~ 2-00( rovidence Kodiak Is Medical Center ~~ ~Q.-b o--r- Kodiak. Island Borough Dale Signed: ~ /~ .,.... Date Signed: .3/;)... ( 0 l..( .~ ATTEST: >I)., ,lAd. ~ r g.,wu (/ ~~i~sen, Borough ClerK C UJot.j-/~ ADDENDUM NO.1 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 ~~~ Its 1_ FjD Date '3 j, I J[)~ ( I Kodiak Island Healthcare Foundation By C\.~'[ I~ Its ~ ~'If""".f' c.l-cJ v- Date i / L Gr J v (" . B phanc/Addendum MOU Kodiak (! EWL! -iii . 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, ot(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 ~~-"--- Chief Exec v Officer Date: 3ft /rf? By: Date: Kodiak: Island Borough By:er anager Date: .y,!?/d? ~~.~ Lff7/07 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 rr 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 B 1 �1 Its. o� n a. e Date: v TENANT: Kodiak I land Health C re Foundat'on By: Its: Date: Consent 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 f Executive Date: realprop /LeaseAgmt4 Lease Agreement Kodiak Island Borough and KCHC Page 10 EXHIBIT A y W s•. M AP o=tN UJI t P V� ��6{;:qqq *GP.i�"'.j N Y• its' ..J I .Nxa.. r {.12•• (Yrt•1 O y1,r'., I,.. .1 .s:r j. 1 rr p .,w r:..• L '1 i IS .,7 P ,R K'd S x�fi t J 1 /1 't� t `c rte CL Ln uj LA LLJ ir UA r v, cl »K ly 1. V IP ij t riR(! r1• ;J F .;•r_ �f" i tli�J •�t'.��� r. Y.� ri U �s.4.S a 9 I i1� ti A '1 .:•,C w t•',_,� /•+.t'Pq hC� .,r.�.•a,....(1 .if: i'` Ol 1 .I .l..J^ P i7•..1 P`...��+; 1 1,..� \f� 4 1 'i;.t, ti 4 ,'f� i .4�! _._l ti'•:v J y ,rt �1 .I r/ ..'�iw r I,J II i :t i., �:/,:w n:4 --^r ;i� n C.:»,r: s 7 r 1 •i y'; r r 5 '1 t 7. i i Y r #,,j' l.. �1 I I t.. r.' r• I .'r_..1� i f, t1.� .r �..tl t 1 0 1' ,4•� •r I I J T F �i`', :.t e J ••S I ;+lJ r .t�� 1 t 1 X14 Lp S S KODIAK ISLAND BOROUGH AGENDA STATEMENT FEBRUARY 21. 2008 REGULAR MEETING Il'EMNQ:13;B.7 l'llLE: ~ ~ Co (t/rN!iAJD.-:ty 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: ~ J F RECOMMENDED MOlION: Move to adopt Resolution No. FY2008-29. Introduced by: Requested by: Drafted by: Introduced: Adopted: Manager Gifford Assembly Borough Attorney 02/21/2008 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