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HomeMy WebLinkAbout25-201 Resolution No. 25-201 RESOLUTION AUTHORIZING EXECUTION OF A COMMERCIAL PROPERTY LEASE AGREEMENT WITH MTK PROPERTIES, LLC FOR THE ELGIN ART SHOWCASE (18-20 Villa Court and 220 DuPage Street) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and directed to execute a Commercial Property Lease Agreement with MTK Properties, LLC, for the Elgin Art Showcase for the premises commonly known as 18-20 Villa Court and 220 DuPage Street, Elgin, Illinois, a copy of which is attached hereto and made a part hereof by reference. s/David J. Kaptain David J. Kaptain, Mayor Presented: December 3, 2025 Adopted: December 3, 2025 Omnibus Vote: Yeas: 9 Nays: 0 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk COMMERCIAL PROPERTY LEASE AGREEMENT TI-HIS LEASE (hereinafter referred to as the "Lease") is made and entered into as of the 3rd day of December , 2025, by and between MTK Properties. LLC, an Illinois limited liability company(hereinafter referred to as "Lessor"), and the City of Elgin, an Illinois municipal corporation(hereinafter referred to as the"Lessee"). WHEREAS, Lessor is the owner of the subject commercial building and properties commonly known as 18-20 Villa Court and 220 DuPage Street, Elgin, Illinois 60120 (hereinafter referred to as the"Subject Property");and WHEREAS, Lessee desires to lease from Lessor that portion of the Subject Property further described herein for the operation of an art studio, exhibit space. and performance venue known as the Elgin Art Showcase,in accordance with the terms and conditions of this Lease:and WHEREAS. Lessor desires to lease to Lessee said portion of the Subject Property upon the terms and conditions contain herein. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which are hereby mutually acknowledged, the parties hereto hereby agree as follows: 1. Basic Lease Provisions. The following are the parties and the premises that are subject to this Lease and referred to in subsequent provisions of this Lease: Lessor's Name and Address: MTK Properties, LLC, 1125 Preserve Trail, Bartlett, Illinois 60103 Lessee's Name and Address: City of Elgin, 150 Dexter Court. Elgin, Illinois 60120. Premises: Certain premises located at 18-20 Villa Court and 220 DuPage Street. Elgin, Illinois 60120, consisting of approximately 3,680 square feet on the lower level of the Subject Property consisting of a performance space. storage space, and green room space for exclusive use by Lessee (the "Exclusive Use Space"), and an additional 3.838 square feet on the lower level of the Subject Property consisting of a shared hallway, dressing rooms, and restrooms for use by Lessee as shared space (the "Shared Use Space"), as more particularly depicted and identified on Exhibit A, attached hereto and incorporated herein by this reference (hereinafter collectively referred to as the "Premises"). 2. Leased Premises — Use and Access. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises in consideration for the rent to be paid herein and subject to the terms and conditions of this Lease. It is understood and agreed by Lessee that the upper floors of the Subject Property are not part of the Premises that are the subject of this Lease, and that Lessee shall not have the right to access such other areas of the Subject Property without the prior approval of the Lessor. Lessor shall cause access to these areas to be secured at its own expense. The foregoing notwithstanding,the Lessee shall be provided with means to access the Subject Property, including the upper floors, in the event of an emergency and when a representative of Lessor cannot be reached or is not available. During any events in the performance space on the upper floors. Lessor shall provide staff to monitor its patrons, including the patrons' use of the lower-level restrooms and shared hallways of the Shared Use Space. It is understood and agreed that Lessor shall not have the right to access the Exclusive Use Spaces that are the subject of this Lease without the prior approval of the Lessee, except for maintenance or repairs as otherwise provided for herein. The foregoing notwithstanding, the Lessor shall be permitted to retain means to access the Exclusive Use Space in the event of an emergency and when a representative of Lessee cannot be reached or is not available. During any events in the Lessee's performance space, Lessee shall provide staff to monitor its patrons. including the patrons' use of the lower-level restrooms and shared hallways of the Shared Use Space. Any conflicting provisions of this Lease to the contrary notwithstanding, the Parties agree that for the term of this Lease the Lessor shall have the right to permit the current user of the upper floors of the Subject Property, Schaumburg On State/point2productions. to have exclusive use of the entire Subject Property, including the leased Premises, for a period up to.but not to exceed, a total of six (6)weeks in any calendar year("Third-Party Use"). The parties shall agree in writing to the dates on which Schaumburg On State/point2productions shall have exclusive use of the Subject Property no later than June 30 of the calendar year immediately preceding the calendar year of the proposed Third-Party Use. The dates of the Third-Party Use shall be subject to the approval of the Lessee in its reasonable discretion. The hours of operation of the Lessee shall be restricted to the hours of 9:00 a.m. to midnight, Monday through Sunday, unless prior specific arrangements are made in advance with Lessor for extended hours of operation. Access to the building on the Subject Property outside of these hours shall be available through the back door of the building via an access code for purposes of cleaning and emergency maintenance. 3. Term. The Premises are leased for an initial term of three (3) years.to commence on January 1.2026.and to continue until December 31,2028. 4. Rent. The rental rate for the first year of the Lease term (the "Rent") shall be calculated at a rate of$16.50 per square foot per month for the Exclusive Use Space, and at a rate of$8.25 per square foot per month for the Shared Use Space. The Rent for the first year of the Lease term shall be in the amounts set forth on the following rent schedule: Annual Lease Period Monthly Rent Annual Rent January 1.2026—December 31,2026 $7,698.63 $92,393.50 Lessee shall pay monthly rent in accordance with the above rent schedule to Lessor at Lessor's above-stated address, or at such other place as Lessor may designate in writing, on the first day of each month in advance. For the second and third years of the initial Lease term, the monthly and annual rental rates for such second and third years of the Lease term shall be increased by an amount equal to the percent increase of the Consumer Price Index for the previous twelve (12) months as published in the U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI-U, all items. Urban Consumers, Chicago-Naperville-Elgin, IL-IN-WI (1982-84- 100); provided, however, that the increase in rental rates for any year of the Lease term shall not in any event exceed the total amount of three percent(3%) in annual rent for said year. The Lessee is further hereby granted an option to extend this Lease for an additional three-year term. The annual rent under such an additional three-year term will increase at a rate of three percent (3%) from the immediately prior year's annual rent amount. To exercise the option to so extend this Lease,the Lessee shall provide the Lessor written notice of its intent to exercise such option prior to October 1, 2028. 5. Lessee's Use of Premises. Lessee shall use and occupy the Exclusive Use Space of the Premises as an art studio, exhibit space, and performance venue, green room space, and storage space. Lessee shall be authorized to utilize the Shared Use Space of the Premises for dressing rooms. public restrooms, and other similar uses relating to Lessee's use of the Exclusive Use Space. It is understood and agreed by Lessor that Lessee's use of the Premises as an art studio, exhibit space, and performance venue may include, but not be limited to, as accessory uses, the service of food and beverages including alcoholic beverages as authorized by the Liquor Commission of the City of Elgin. 6. Condition of Premises -- Build-Out. The Lessor shall provide the Premises to Lessee in a clean condition and with improved ventilation, new electrical wirings and outlets, and new electrical ceiling conduit as agreed to by the parties. The Lessor shall install and at all times maintain the sprinkler and fire alarm systems for the entire building on the Subject Property, including but not limited to the Premises. The Lessor shall be responsible to maintain HVAC and air conditioning at the Subject Property such that the temperature at the Premises is at all times maintained at a temperature of between 65 and 75 degrees Fahrenheit, and in the event of any malfunction or failure shall immediately cause to be performed any necessary repairs to the HVAC, air conditioning, or other climate control systems to maintain such temperatures. In addition, Lessor shall complete the following additional build-out items prior to the commencement of the initial Lease term,being January 1,2026: 3 A. Power Requirements • 10x Nema Style 5-20 Female in lighting grid. • 8x Nema Style 5-20 Female throughout event space. 2x on North Wall. 2x on East Wall. 2x on South Wall. 2x on West Wall. • 2x Nema Style 1,14-30 in event space on west wall. • 7x Nema Style 5-20 Female in Green Room. 3x on West Wall. 3x on East Wall. lx on South Wall. • 2x Nema Style L6-20 in shop. • 1 x Nema Style L6-30 in shop. B. Wall Coverings %'Plywood on stud walls. C. Floor Commercial Luxury Vinyl Tile that is scuff, stain, and scratch resistant, finish and color to be determined. D. Doors Ceiling Height Double Doors from the performance space to Green Room, and from the Green Room into the Shop/Storage Area. E. Ceiling Grid 42"on Center Steel Pipe Grid as close to the existing ceiling as possible. F. Curtain and Track Track, hardware, and 15 oz. IFR velour curtain. 7. Communication with Lessor. Lessor and Lessee shall provide each other with contact information that will allow communication between the parties at any time in the event of an emergency. In addition, Lessor shall provide Lessee with contact information for Lessor's maintenance company for emergency maintenance in the event of an emergency where the 4 Lessee is not able to contact the Lessor. Third-party persons or entities utilizing the Premises by the agreement of the Lessee shall not be provided with Lessor's contact information, and any communication with the Lessor relating to the use of the Premises shall be through the Lessee. 8. Lessee Alterations. It is understood and agreed that Lessee may make additional interior alterations or renovations to the Premises to accommodate Lessee's intended art studio. exhibit space, and performance venue, subject to all applicable code regulations and with the prior written approval of the Lessor,which approval shall not be unreasonably withheld. Prior to commencing any such work approved by Lessor, Lessee shall procure certificates of insurance from all contractors and subcontractors showing general liability and worker's compensation coverage and naming Lessor as an additional insured. 9. Lessee Equipment and Improvements. It is further understood and agreed that Lessee may install certain personal property. trade fixtures, and improvements within the Premises. including but not limited to lighting fixtures and enhancements, audio equipment, water and plumbing fixture, and any additional amenities (hereinafter referred to as the "Lessee Improvements"). All Lessee Improvements that can be removed without material injury to the Premises shall remain the property of the Lessee,and may be removed by the Lessee at any time prior to the termination of this Lease. All improvements made by Lessee to the Premises that are so attached to the Premises that they cannot be removed without material injury to the Premises shall become the property of Lessor upon the termination of this Lease. Notwithstanding the foregoing, the Lessee retains the right to remove at its own discretion and expense any theatrical lighting, overhead work lighting, audio equipment, and additional equipment or amenities installed by the Lessee. Not later than the last day of the term Lessee shall, at Lessee's expense, remove all of Lessee's personal property, Lessee Improvements, and such other improvements, equipment, and amenities made by Lessee that have not become the property of the Lessor: repair all injury done by or in connection with the installation or removal of said property and improvements; and surrender the Premises in as good condition as they were at the beginning of the term. reasonable wear and tear, damage by fire, the elements, casualty, or other cause not due to the misuse or neglect by Lessee or Lessee's agents,servants,visitors,servants or licensees, excepted. 10. Additional Water Access. Lessor shall install and/or otherwise provide access to water service in the area to be designated as the Elgin Art Showcase technical room, and the Lessee shall have the right to install a work sink area in such room in its discretion and at its own expense. 11. On-Site Parking. On-site parking shall be exclusively reserved for renters of Lessor and Lessor's staff members except for designated handicapped parking spaces, which shall remain available for the public. In addition,two on-site parking spaces shall be exclusively reserved for the use of the Lessee. 12. Care of Premises. Lessee shall commit no act of waste and shall take good care of the Premises and the fixture and appurtenances therein, and shall, in the use and occupancy of the Premises, conform to all laws, orders, and regulations of the federal, state, and municipal 5 government of any of their departments. Lessee shall not do or suffer anything to be done on the Premises which will cause an increase in the rate of fire insurance on the Subject Property without the written consent of the Lessor. 13. Cleaning of Premises. Lessee shall not permit the accumulation of waste or refuse matter on the Premises or anywhere in or near the Subject Property, and shall be responsible for the cleaning of the Exclusive Use Space and the Shared I Jse Space of the Premises when occupied by persons or entities utilizing the Premises by agreement of the Lessee. Lessee shall at its cost further provide supplies for, clean, and maintain the bathrooms for the Premises when occupied by persons or entities utilizing the Premises by agreement of the Lessee. During such times when the Lessee is not occupying the Premises, the Lessor shall be responsible for cleaning and maintaining the Shared Use Space. Lessor and Lessee shall keep the Shared Use Space clear of stored property.junk,or debris. 14. Abandonment. Lessee shall not, without first obtaining the written consent of the Lessor.abandon the Premises, or allow the Premises to become vacant or deserted. 15. Assignment. Lessee shall not, without obtaining the written consent of the Lessor, assign, mortgage, pledge,or encumber this Lease, in whole or in part. The foregoing or anything to the contrary in this Lease notwithstanding, it is expressly agreed and understood that Lessee may enter into agreements with third party organizations or individuals to use the Premises for the intended art studio, exhibit space, and performance venue purposes without obtaining the written consent of Lessor under this paragraph. This Lease and the obligations herein may not be assigned by the Lessor without the express written consent of the Lessee, which consent may be withheld at the sole discretion of the Lessee. 16. Daman to Premises. If the commercial building on the Subject Property (hereinafter referred to as the "Building") is damaged by fire or any other cause to such extent that the cost of restoration, as reasonably estimated by Lessor, will equal or exceed 60% of the replacement value of the Building on the Subject Property immediately prior to the occurrence of the damage. then Lessor may, no later than the seventh day following the damage. give Lessee a notice of election to terminate the Lease. In the event of such election this Lease shall be deemed to terminate as of the date of the damage or destruction, and Lessee shall surrender the Premises within a reasonable time thereafter. and any pre-paid rent shall be refunded proportionally. 17. Eminent Domain. If the Premises or any part of the Premises, or any part of the Building materially affecting Lessee's use of the Premises, be taken by eminent domain. this Lease shall terminate on the date when title vests pursuant to such taking. The rent shall be apportioned as of the termination date and any rent paid for any period beyond such date shall be repaid to Lessee. 18. Subordination. This Lease shall be subject and subordinate to mortgages which may now or hereafter affect such leases or the real property of which the Premises form a part, and also all renewals, modifications, consolidations, and replacements of mortgages. Lessee agrees to execute such estoppel letters or other documents required to confirm the same. 6 19. Repairs. Lessor may enter the Premises at reasonable times and upon adequate notice to Lessee (except that no notice need be given in case of an emergency) for the purpose of making of such repairs. maintenance, replacements, or additions in, to, on, and about the Premises or the Building, as Lessor and Lessee deem necessary or desirable. 20. Utilities. As part of the rent, Lessor agrees to and shall furnish at its cost all utilities for the Premises and the Building, including electricity, gas, 300 mbps internet, water, sewer, and any utilities required for the heat and air conditioning of the Premises and the Building. 21. Waste Disposal. As of the first day of the Lease term, being January 1. 2026. the Lessee shall utilize the Lessee's existing contract with its waste disposal service provider to provide a 4-yard dumpster to replace the current dumpster at the Premises. Lessor will be responsible for any costs associated with the removal of the current dumpster. The Lessee shall be responsible for the cost associated with the new 4-yard dumpster. Lessor is authorized to utilize the 4-yard dumpster, but Lessor's use shall not exceed fifteen percent (15%) of the dumpster's capacity at any given time except with the prior approval of the Lessee, and during the six-week period where Lessor has exclusive use of the Premises. 22. Care and Maintenance. Except for damage caused by misuse or neglect of the Lessee or Lessee's agents, servants, visitors, servants, or licensees, Lessor shall at its cost keep and maintain in good order, condition, and repair the Premises, the Building, and the Subject Property. Lessor shall at its cost further be responsible for care and maintenance of the exterior of the Subject Property, including but not limited to landscape maintenance, parking lot maintenance, and snow removal for the Subject Property. 23. Relationship of Parties. Nothing in this Lease is intended or shall be deemed or construed as creating the relationship of principal and agent. partnership, or joint venture between the parties hereto. 24. faxes. Lessor shall, at Lessor's own cost and expense, bear, pay and discharge prior to delinquency, all real estate taxes, special assessments, leasehold taxes or any other taxes which are or may be levied, charged, and/or assessed upon the Premises, the Building, the Subject Property, and/or the leasehold of the Premises during the term of this Lease. 25. Insurance. At all times during the term of this Lease. Lessor shall maintain in effect, on a non-self-insured basis. commercial general liability insurance, including contractual liability coverage, with combined single limits of not less than $1,000,000 per occurrence. "all risks" property insurance on a full replacement cost basis as to the building on the Subject Property, and from time to time such other coverage as Lessor may deem prudent. It is specifically understood that Lessor's insurance does not cover any personal property of Lessee and Lessee shall not make any claim for loss of or damage to such property against Lessor or Lessor's insurance carrier and shall not permit its insurance carrier to make any claim for loss or damage to such property against Lessor or Lessor's insurance carrier. 7 26. Jurisdiction and Venue. This Lease shall be subject to and governed by the laws of the State of Illinois. The parties hereto hereby agree that venue for any and all actions that may be brought by each and either of them to enforce the provisions of this Lease shall be in the Circuit Court of Kane County.Illinois. 27. Severability. The terms of this Lease shall be severable. In the event that any of the terms or provisions of this Lease are deemed to be void or otherwise unenforceable for any reason,the remainder of this Lease shall remain in full force and effect. 28. Notices. All notices, reports and documents required under this Lease shall be in writing and shall be mailed by first-class mail,postage prepaid,addressed as follows: As to the Lessee: City of Elgin Attn: City Manager 150 Dexter Court Elgin, IL 60120-5555 With a copy of any such notices to: City of Elgin Attn:Corporation Counsel 150 Dexter Court Elgin. IL 60120-5555 As to the Lessor: MTK Properties. LLC Attu: Michael S. Benoit, President 1125 Preserve"Trail Bartlett,IL 60103 29. Non-Liability of Officials or Employees. No official, director, officer, agent, or employee of the Lessee shall be charged personally or held contractually liable under any term or provision of this Lease or because of their execution, approval, or attempted execution of this Lease. No official, officer.agent, employee,or attorney of the Lessee shall be charged personally or held contractually liable under any term or provision of this Lease or because of their execution,approval,attempted execution,or enforcement of this Lease. 30. No Monetary Damages. Notwithstanding anything to the contrary in this Lease, with the sole exception of an action to recover the monies the Lessee has agreed to pay to the Lessor pursuant to Section 3 hereof, no action shall be commenced by the Lessor against the Lessee for monetary damages. Lessor hereby further waives any and all claims to interest on money claimed to be due pursuant to this Lease and waives any and all such rights to interest which it claims it may otherwise be entitled to pursuant to law, including, but not limited to, the Local Government Prompt Payment Act (50 ILCS 501/1, et seq.), as amended, or the Illinois Interest Act (815 ILCS 205/1. et seq.), as amended. The parties hereto further agree that any action by the Lessor arising out of this Lease must be filed within one (1) year of the date the alleged cause of action arose or the same will be time-barred. 8 31. Entire Agreement. This Lease and its attachments constitute the entire agreement of the parties hereto and the subject matter hereof and may not be changed. modified, discharged, or extended except by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof 32. Joint and Collective Work Product. This Lease is and shall be deemed and construed to be a joint and collective work product of the Lessee and the Lessor,and as such,this Lease shall not be construed against the other party, as the otherwise purported drafter of same. by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity. vagueness or conflict, if any, of the terms and provisions contained herein. 33. Nonappropriation. Notwithstanding anything to the contrary in this Lease, the parties understand and agree that the fiscal year of the Lessee is a twelve (12) month period ending December 31 of each year. The obligations of the Lessee under any contract for any fiscal year are subject to and contingent upon the appropriation of funds sufficient to discharge the obligations which accrue in that fiscal year and authorization to spend such funds for the purposes of the contract. If, for any fiscal year during the term of this Lease, sufficient funds for the discharge of the Lessee's obligations under this Lease are not appropriated and authorized, then the Lease shall terminate as of the last day of the preceding year, or when such appropriated and authorized funds are exhausted, whichever is later. without liability to the Lessee for damages. penalties. or other charges or any other relief whatsoever on account of such termination. 34. Captions. The headings of the several articles and paragraphs of this Lease are inserted only as a matter of convenience and for reference, and in no way define, limit, or describe the scope or intent of any provisions of this Lease, and shall not be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. SIGNATURE PAGE FOLLOWS 9 IN WITNESS WHEREOF. Lessor and Lessee have signed this Lease as of the day and year first written above. 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