01-209 Resolution No. 01-209
RESOLUTION
AUTHORIZING EXECUTION OF A LEASE AND USE AGREEMENT
WITH SHERMAN HEALTH SYSTEMS FOR THE OPERATION OF A
WELLNESS CENTER WITHIN THE ELGIN RECREATION CENTER
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Joyce A. Parker, City Manager, and Dolonna Mecum,
City Clerk, be and are hereby authorized and directed to execute a
written Lease and Use Agreement with Sherman Health Systems for the
operation of a Wellness Center within the Elgin Recreation Center
located at Kimball Street and Douglas Avenue, Elgin, Illinois, a
copy of which is attached hereto and made a part hereof by
reference .
s/ Ed Schock
Ed Schock, Mayor
Presented: July 25, 2001
Adopted: July 25, 2001
Omnibus Vote : Yeas : 7 Nays : 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
LEASE AND USE AGREEMENT
BETWEEN
CITY OF ELGIN AND
SHERMAN HOSPITAL
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TABLE OF CONTENTS
Section Page
1. The Leased Space and Common Areas: Right of Termination 1
2. Construction of Building 2
3. Abandonment by Sherman 4
4. Acceptance of the Leased Space 4
5. "Extra" Construction by Sherman 4
6. Rent and Other Charges 5
7. Membership Fees for Fitness Center 5
8. Use of"Rental Facilities" 6
9. Sherman's Use of the Fitness Center and Natatorium 7
10. Programs and Services 7
11. Use of Lobby Area by Sherman 8
12. Marketing and Advertising: Signage 9
13. The Management Committee 9
14. Parking Spaces 10
15. Performances of Services by City 10
16. Hours of Use 10
17. Hazardous Materials 11
18. Compliance with Laws 11
19. Maintenance and Repair 11
20. Alterations 12
21. Inspection 12
22. Casualty 12
23. Insurance: Waiver of Claims: Indemnity 13
24. Default, Breach or Termination by Sherman 14
25. Default by City 15
26. Cumulative: Non Waiver 15
27. Sherman's Status 15
28. Assignment or Sublease by Sherman: Successors or Assigns 15
29. Governing Law 16
30. Severability 16
31. Notices 16
32. Quiet Enjoyment 16
33. Time of the Essence 16
34. No Joint Venture 16
35. No Construction Against Drafting Party 17
36. Captions 17
37. Litigation Costs 17
38. Entire Agreement 17
LEASE AND USE AGREEMENT
This agreement is hereby made and entered into this 11th day of July, 2001, by and
between the City of Elgin, Illinois, a municipal corporation(hereinafter referred to as "City"),
and Sherman Health Systems, an Illinois not-for-profit corporation(hereafter referred to as
"Sherman").
WHEREAS, City intends to construct a community recreation center of approximately
185,190 square feet in size at the intersection of Kimball and Douglas Avenues in Elgin, Illinois
(hereafter referred to as "Recreation Center"), a general depiction of the current floor plans
therefor are attached hereto as "Exhibit A"; and,
WHEREAS, City and Sherman have each determined it to be in their best interests to
enter into this agreement by which Sherman shall operate and staff Wellness Center within the
City's Recreation Center;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and for other good and valuable consideration, the receipt and sufficiency of which is
mutually acknowledged, the parties agree to as follows:
1. The Leased Space and Common Areas - Term - Bond Issue - Right of Termination
(a) The City hereby leases certain space in the Recreation Center to Sherman consisting
of approximately 9,300 square feet and depicted on a portion of the floor plans for the Recreation
Center attached hereto as"Exhibit B"(hereinafter, referred to as the "Leased Space"). In
addition to the Leased Space, Sherman shall have the non-exclusive access to the common areas
of the Recreation Center, including the lobbies, hallways, reception areas, restrooms, first-floor
locker rooms in the Recreation Center, observation areas, entrances and exits, stairs, elevators
and parking spaces, and all other areas which are not recreational activity areas but are open to
the public during normal hours (hereinafter referred to as the "Common Areas").
(b) This agreement shall be in effect as of the date and year first written above. The term
of the City's Lease of the Leased Space to Sherman and Sherman's right to non-exclusive access
to Common Areas of the Recreation Center as provided for herein shall commence upon the first
day of the month following the month in which the Substantial Completion of the construction of
the Recreation Center and the Leased Space occurs (such first day of the month following the
month in which the Substantial Completion of the construction of the Recreation Center and the
Leased Space occurs is hereinafter referred to as the tease Commencement Date") and shall end
on the last day of the month ten (10)years following the Lease Commencement Date.
(c) Provided that Sherman is not then in material default hereunder, Sherman shall have
the right to renew this Lease for two (2) successive terms of five (5)years each. To exercise such
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renewal option, Sherman shall give written notice thereof to the City not later than 180 days prior
to the expiration of then current term of this Lease. During any such extended term of this Lease,
all of the terms and conditions of this Lease shall remain in full force and effect.
(d) Sherman shall be responsible for and shall pay for the cost of the construction of the
Leased Space and additional improvements to the therapy pool requested by Sherman. It is
agreed and understood that the City will be issuing bonds on behalf of Sherman to finance the
construction of the Leased Space and additional improvements to the therapy pool requested by
Sherman(hereinafter referred to as the "Sherman Bonds"). The cost of construction of the Leased
Space and the additional improvements to the therapy pool requested by Sherman and therefore
the amount of the Sherman Bonds are currently estimated to be in the approximate amount of
$1,944,142. The actual cost of construction of the Leased Space and the additional
improvements to the therapy pool and the total amount of the Sherman Bonds will be determined
at a later date by the City during the construction of the Recreation Center. Notwithstanding
anything to the contrary in this agreement and notwithstanding any termination or nonrenewal of
this agreement prior to 20 years following the Lease Commencement Date, with the exceptions
of the termination of this agreement based upon a material breach of this agreement by the City
or the City's termination of this agreement following a destruction of the Recreation Center
pursuant to Section 22 hereof, Sherman shall be responsible for and shall pay when due all
principal and interest, premium if any, and expenses related to the Sherman Bonds. The
Sherman Bonds will not issued unless the Plans and Specifications for the Leased Space are
agreed to between the City and Sherman as provided for in Section 2(b) hereof.
(e) Sherman shall have the right to terminate this lease upon six (6)months written notice
to the City. In the event Sherman so terminates this lease prior to twenty(20)years following
* Siii5P012Efeccifidaico5i2Scuiwnweitt Ic do pa t for any reason other than a material breach by
the City,or in the event Sherman does not renew this lease for the full twenty(20)year potential
term following the Lease Commencement Date, Sherman shall nonetheless continue to be
obligated to pay the rent and any other applicable payments provided for herein, including
without limitation monies for payments on the Sherman Bonds, minus any amounts by which the
City is able to mitigate its damages. Sherman may provide for retirement of the Sherman Bonds
upon the bonds' callable notice. Alternatively, Sherman may pay for the retirement of all
outstanding debt on the Sherman Bonds as determined by the City's finance director in his sole
discretion. * the Lease Commencement Date
2. Construction of Building
(a) The City shall use commercially reasonable efforts to substantially complete
construction of the Recreation Center and the Leased Space (the"Construction Work") by
November 1, 2002 (the"Substantial Completion Date"). The Leased Space shall be built out to
"turn-key"condition, with all necessary work completed for Sherman's full and immediate
occupancy, including the completion of all interior finish work, carpeting and painting, and the
installation of all fixtures,utilities, gas, water and electric meters(the"Finishes"). The City
shall obtain any and all building permits, certificates of occupancy and other governmental
authorizations or permits which may be required as a condition of the construction work or
occupancy or use of the Leased Space, and shall deliver a copy of same to Sherman upon
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Substantial Completion. For purposes of this lease, "Substantial Completion" of the construction
work shall be deemed to occur when the City has procured a final certificate of occupancy for the
recreation center and Leased Space and all construction work has been substantially performed in
accordance with the plans and specifications, except for minor cosmetic details or adjustments
which do not materially interfere with Sherman's use or occupancy of the Leased Space (the
Punch List Items). The Substantial Completion date shall be evidenced by a certificate to that
effect signed by the City's architect and addressed to Sherman. City shall use its best efforts to
adhere to the construction schedule attached as "Exhibit C".
(b) The plans and specifications for the Leased Space shall be/setsforth in the plans
prepared by Williams and Associates, Ltd., dated June 1, 2001, (hereinafter referred to as the
"Plans and Specifications for the Leased Space"). The City reserves the right to make changes in
the Plans and Specifications for the Leased Space, provided, however, any material changes to
the Plans and Specifications for the Leased Space shall be submitted to Sherman for Sherman's
approval which shall not be unreasonably withheld. Material changes to the Plans and
Specifications for the Leased Space shall consist of changes which materially alter the floor plan
of the Leased Space provided,however, it is agreed that the floor plan and room dimensions in
the Plans and Specifications for the Leased Space are subject to minor changes as reasonably
deemed necessary by the City to accommodate structural and mechanical elements in the
Recreation Center building and that such changes shall not be considered material.
(c) The City has engaged Williams Associates Architects, Ltd. as the architects for the
Recreation Center pursuant to an agreement dated November 17,1999, as may be amended from
time to time by the City. The City has also engaged Gilbane Building Company as construction
manager for the Recreation Center pursuant to a contract dated June 14, 2000, as may be
amended from time to time by the City(the architect and construction manager are hereinafter
collectively referred to as the"Construction Professionals"). Prior to changing any of the
Construction Professionals the City shall consult with Sherman.
(d) Sherman shall have the right to attend all meetings between the City,the architect,
and others associated with the planning and construction of the Leased Space, the therapy pool,
and the layout and functionality of the health club fitness floor, and may provide input as it
deems necessary. In addition, the City shall provide notice to Sherman of any meetings regarding
the planning and construction of the Leased Space, and provide Sherman with access to visit the
site in order to observe the process of construction. Sherman shall comply with all safety
regulations and instructions from the construction manager. If at any time, Sherman discovers a
deviation from the portions of the Plans and Specifications for the Leased Space that are subject
to its approval (including any unacceptable material or labor), it shall immediately notify the City
which shall determine whether such deviation is material in its sole discretion, and which may
correct any such material deviation in its sole discretion.
(e) Sherman shall have access to the Leased Space prior to Substantial Completion upon
reasonable prior notice to the City in order to prepare for its occupancy, provided that Sherman
shall not materially interfere with the construction work.
(f) Sherman represents and warrants to City that it has sufficient funding available to
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meet its obligations hereunder. Failure of Sherman to have such sufficient funding shall
constitute a material breach of this agreement.
3. Abandonment by Sherman
Should Sherman breach this agreement for any reason other than force majeure,the City shall
have the following rights and remedies in addition to any other rights and remedies set forth in
this lease. The City shall have the right to terminate this lease within 30 days of such breach and
receive from Sherman the following costs and expenses: (i) any direct and actual costs and
expenses incurred by the City in razing or altering the Leased Space, or(ii) any direct and costs
and expenses incurred by the City in obtaining financing (i.e., customary and reasonable finance
charges) for the completion of the Leased Space; and a pro rata portion of the capital cost
calculated from the date of this agreement through the date of Sherman's abandonment or failure
to pay; provided that under either(i) or (ii) above, the City shall also be entitled to recover its
reasonable, direct and actual architect's, broker's, consultant's and attorney's fees, and its
reasonable advertising expenses for reletting the Leased Space, if applicable.
4. Acceptance of the Leased Space
(a) Sherman's occupancy of Leased Space shall constitute acceptance of Leased Space
and a waiver of any condition of this agreement as to the physical condition of the Recreation
Center facilities and that the Leased Space is in condition called for by this lease, except for the
punch list items to be completed in accordance with the terms above and except for latent
defects.
(b) Upon the expiration or termination of this lease, the Leased Space shall be turned
over to the City in substantially the same condition as when accepted by Sherman, ordinary wear
and tear, and approved alterations excepted.
5. "Extra" Construction by Sherman
Subject to the City's approval which shall not be unreasonably withheld, conditioned or delayed,
and subject to any necessary building permit approvals from the City, if applicable, prior to the
commencement date of this agreement, Sherman may undertake"extra"work which it desires in
the Leased Space. "Extra"work shall mean any additions or changes to the Plans and
Specifications for the Leased Space. Any such"extra"work shall be at Sherman's sole cost and
expense and shall be conducted by the City's architect and construction manager. Such extra
work shall be paid for by Sherman prior to the performance of any such work.
6. Rent and Other Charges
(a) Commencing upon the Lease Commencement Date and subsequently on the first of
each month thereafter throughout the term of this Lease, Sherman shall pay to the City rent in the
monthly amount of$17,233.33 (the "Rent").
(b) In addition to Rent, Sherman shall pay when due all water, gas,phone, electrical,
janitorial,medical waste removal and hazardous waste removal charges attributable to the Leased
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Space or Sherman. All such charges shall be paid by Sherman directly to the companies
providing such services. Should Sherman fail to pay such charges when due or by such extended
due date as may be applicable,the City shall have the right, but not the obligation,to pay such
charges and any amount so paid shall be added to Sherman's Rent payable with the next
installment of Rent due the City.
(c) Sherman shall also pay when due any and all applicable real estate taxes and/or taxes
on the leasehold interest for the Leased Space. Sherman shall not be liable to City for any special
assessments or special service district charges against the Leased Space imposed by City.
(d) Commencing one (1)year after the Lease Commencement Date and annually
thereafter City may in its sole discretion increase or decrease the monthly rent provided for
herein based on City's actual expenses. As used herein the term"Actual Expenses" shall mean:
(a) expenses related to the use of the fitness center by Sherman; (b) expenses related to the use of
the Recreation Center facilities by Sherman for wellness programming; (c) expenses related to
Common Area Maintenance (CAM); (d) expenses related to Land Use/Exterior Maintenance;
and(e)all debt service expenses relating to the Sherman Bonds. A listing providing for various
estimated additional costs to the City related to the Leased Space and this agreement is attached
hereto for example purposes as "Exhibit D". Additionally, Sherman shall pay to City a lump
sum payment for reimbursement of any prior year's under payment of such actual expenses of
City. Such payment shall be made within thirty(30) days written notice from City's Finance
Director. Such reimbursement amounts shall be in the sole reasonable discretion of City's
Finance Director. City shall provide to Sherman written notice accompanied an accounting of
actual expenses used by City to calculate such rent adjustments and lump sum reimbursement
payments. In the event City's Finance Director determines that Sherman has overpaid any sum to
City pursuant to this agreement, City's Finance Director may equitably adjust such payments or
provide reimbursement to Sherman at City's Finance Director's sole reasonable discretion within
thirty(30)days of determining such overpayment.
(e) Notwithstanding anything to the contrary herein, in the event the Lease
Commencement Date does not occur on or before November 1, 2002,the additional Interest on
the Sherman Bonds charged to Sherman shall be determined for the period from November 1,
2002 to the Lease Commencement Date. The additional Interest on the Sherman Bonds shall not
exceed two (2) months.
7. Membership Fees for Fitness Center
(a) City shall provide Sherman with the opportunity to purchase full or partial
memberships to the Recreation Center at City's "corporate rates"during the term of this
agreement for full-time and part-time Sherman employees located within the Recreation Center.
(b) In addition to the foregoing, during the term of this lease,the City shall provide
Sherman's former rehabilitation and/or therapy patients with a trial monthly membership for a
maximum of one (1)month at the Corporate Rate.
(c) Sherman shall be entitled to an initial assessment for the first two (2) years for a
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Wellness Membership Programming fee for each new adult(18 and over) annual All-Facility
member. The fee shall be fixed in the amount of$36 per new adult annual All-Facility member.
This payment will be made to Sherman by the City monthly based on the amount of new adult
annual All Facility members. In consideration for Sherman receiving the fee, Sherman shall
perform a Health Risk Assessment Questionnaire, Cholesterol/Glucose Screening and offer
selected Wellness classes with a$10 coupon, if that member so elects free of charge for the first
two (2)years. This program whereby Sherman shall receive an assessment of$36 per each new
adult annual All-Facility membership will be evaluated after the first two (2) years and may be
continued thereafter by mutual agreement of both parties.
(d) All membership applications the City uses for the Fitness Center shall include a
section or separate information circular about the programs and services Sherman is providing,
with a box to check if they would not like further information from Sherman. The City shall
provide a copy of the application to Sherman for Sherman's follow-up once the applications are
completed, subject to any privacy restrictions imposed by law or any specific member request, or
unless an applicant has elected on the application form not to have any follow-up from Sherman.
8. Use of"Rental Facilities"
(a) In addition to the Leased Space and the Common Areas, Sherman shall have the right
from time to time during the term of this Lease and subject to the reasonable limitations of the
City to reserve and use certain areas of the Recreation Center consisting of the aerobics room,
meeting room, kitchen and multi-purpose room(the"Rental Facilities"). Additional areas of the
Recreation Center may be added to such Rental Facilities from time to time by the City. The City
shall have priority use and scheduling of all areas of the Recreation Center excluding the Leased
Space and with the exception of the Therapy Pool. Sherman shall have priority access to the
Therapy Pool on Mondays through Fridays from 10:00am to 2:00pm. The scheduling of the
Recreation Center facilities other than Sherman's priority access to the Therapy Pool as provided
in this paragraph shall be as follows: (1) City annual events, (2) Sherman annual events booked
by Sherman in December for the following year. Sherman shall be entitled to the exclusive use
as part of the Lease Agreement of the aerobics room,meeting room, kitchen and multi-purpose
room for up to four(4) hours a week cumulatively,provided, however,that Sherman provide
City with notice of the date and times of its reservation of such areas not less than ninety(90)
days prior to the proposed use.
(b) Sherman shall pay the City a fee for each use of each of the Rental Facilities. The fee
for each Rental Facility shall be at the Not-For-Profit Group discount as set forth on the priority
schedule, but thereafter shall be subject to increases as approved from time to time by the City at
the City's sole discretion. All fees incurred during a calendar month shall be paid with the next
month's rent. Sherman shall be entitled to charge various fees for its services at its sole
discretion, which fees shall be the sole property of Sherman, which shall bill and collect such
fees.
9. Sherman's Use of the Fitness Center and Natatorium
(a) In addition to the Leased Space, common areas and rental facilities, Sherman and its
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patients shall have the non-exclusive use of the Fitness Center. Additionally, use of the lap pool
shall be available during specific times for purposes of patient rehabilitation. A Sherman
employee shall sign each patient in at the time of use and monitor the patient throughout the
work-out. All Sherman patients shall be required to wear a visible Sherman Hospital Wellness
identification badge.
(b) Sherman and its patients shall also have the exclusive use of the warm water Therapy
pool (the "Therapy Pool") throughout the term of this lease Mondays through Fridays between
the hours of 10:00 a.m.-2:00 p.m. (4 hours daily) for programming and rehabilitative purposes.
The City shall post signs on or near the Therapy Pool providing notice of Sherman's priority and
exclusive use during such time periods as it reasonably necessary at the discretion of City's
Recreation Center Manager. If Sherman will not be utilizing the Therapy Pool during such
times, then Sherman shall notify the City of such non-use and the Therapy Pool will then be
available during such times for use by the City..
(c) Throughout the term of this lease City shall keep and maintain exercise equipment in
the main area of the Fitness Center. The City shall provide notice to Sherman of any addition,
removal or substantive change of any exercise equipment. The City shall maintain the exercise
equipment in a safe, clean and sanitary condition and, in accordance with Sherman standards for
maintenance cleanliness, or any standards promulgated the City.
10. Programs and Services
(a)Throughout the term of this Lease Sherman shall be the provider of health and
wellness and medically related programs and services within the Recreation Center consisting of
the following: Community Education Programs for Wellness and Health, Health Screening,
Outpatient Rehabilitation Services, Vitamin and Herbal Supplements, Acupuncture, Aquatic
Therapy, Arthritis Programs, Physical and Occupational Therapy and Sports Medicine
(hereinafter referred to collectively as "the Sherman Programs"). At the election of Sherman,the
Sherman Programs may include retail sales from the Leased Space to the extent permitted by
law,provided, however, the City shall have the right to prohibit the sale of any items by Sherman
at any time in the City's sole discretion. The City intends to run and provide various services and
programs at the Recreation Center including without limitation programs, services and activities
relating to recreation, fitness, sports,parks and leisure activities (hereinafter referred to
collectively as the"City Programs"). The Sherman Programs shall not include exercise programs
except for those medically related or the retail sale of sports or recreational equipment, except as
approved in writing by the City's Recreation Center Manager. Sherman shall not be prevented
from offering any existing programs Sherman otherwise currently provides for specific client
populations. The City shall not be prevented from offering any existing programs the City
otherwise provides to the public. Programs development shall be reviewed quarterly by the
City's Recreation Center Manager and Sherman's Manager of Community Program to minimize
duplication of services.
(b) In the event the City is desirous of offering medical,preventative,therapeutic or
rehabilitative services within the Recreation Center, including without limitation those services
defined above as"Sherman Programs"and Sherman is not then offering such programs at the
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Recreation Center(hereinafter collectively referred to as the"Additional Programs"), subject to
the provisions of this paragraph, the City may provide such Additional Programs at the
Recreation Center or enter into a contract with a third party to provide such Additional Programs.
Prior to providing the Additional Programs at the Recreation Center or entering into a contract
with a third party for same, the City shall provide written notice thereof to Sherman and Sherman
shall have a right of first refusal to enter into an agreement to provide the Additional Programs
upon terms and conditions mutually acceptable to the City and Sherman. Such right of first
refusal shall extend for a period of ten(10) days following written notice from the City to
Sherman. In the event the City and Sherman are unable to agree on terms of an agreement for
Sherman to provide the Additional Programs within such ten(10) day period, Sherman's right of
first refusal shall expire and terminate and the City may proceed to provide such Additional
Programs or enter into a contract with a third party for same. If there is a program or service
which Sherman is unable to provide, the City may enter into an agreement with any other
provider, and in such an agreement the City shall include a requirement that such provider will
not provide substantially similar services then currently provided by Sherman at the Recreation
Center.
(c) The parties acknowledge that over time their users' needs and desires may change and
each may wish to run other programs and services not described herein. To that end, the parties
shall endeavor to agree on which programs and services each shall run exclusively, and if they
cannot so agree the City shall decide; provided, however, that such determination shall respect
the parties' rights set forth in Section 10 (a) above, and shall consider the Sherman Programs
historically offered for guidance as to what services and programs are more of a health and
wellness nature than a recreation nature. Notwithstanding the foregoing, this lease shall in no
way limit the City's discretion and authority to establish, delete or modify program offerings
regarding recreation, fitness, sports, parks and leisure activities.
(d) At all times, Sherman shall provide adequate supervision and/or instruction for its
programs and activities. The supervision shall be by those persons with the appropriate training
and professional credentials for the activity being conducted. All activities shall comply with all
applicable laws, rules, regulations and standards of operation.
(e) Each party shall maintain independent and separate billing procedures in connection
with their programs and services.
11. Use of Lobby Area by Sherman
During the term of this lease, at the sole discretion of the City, Sherman shall have use of a
portion of the lobby directly in front of the Leased Space at the Recreation Center designed for
purposes of greeting and directing users or potential users of the Sherman Programs and the
Leased Space as part of Lease Agreement . Sherman and City employees at the Recreation
Center shall each wear appropriate identification badges in order to be properly identified by each
of their respective users.
12. Marketing and Advertising: Signage
(a) Sherman shall be identified as the primary health and wellness provider for the
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Recreation Center on all of the City's marketing and advertising materials for the Fitness Center
and other relevant portions of the Recreation Center and on all applicable interior and exterior
signage related to the Recreation Center. Other than as expressly set forth in this lease, each
party shall obtain the other's prior written consent before using the other's name or logo in any
advertising, marketing, or promotional materials. All joint advertising for the Recreation Center
or Leased Space shall be done in accordance with City and Sherman guidelines acceptable to the
Management Committee.
(b) Sherman shall provide their own kiosk to be located at their entry in the lobby for
their sole use. In addition, all directional signs in the Recreation Center indicating the lobby,
entrance or location of any other wings, shall indicate the location of the wellness center, and
Sherman shall have the ability to use of all kiosks, locker room bulletin boards, other bulletin
boards, and space for literature racks throughout the Recreation Center with approval of City's
Recreation Center Manager. After the initial equipping of the Recreation Center, Sherman shall
pay the cost of the production and installation of any additional signs in the Recreation Center it
has independent of the City(including any directional signs), which signs shall be subject to the
City's prior approval, which approval shall not be unreasonably withheld, conditioned or
delayed.
(c) No exterior signs for the Recreation Center shall be placed without written approval
of City's Recreation Center Manager which shall not be unreasonably withheld. All signs shall
be subject to the ordinances, rules and regulations of the City. Any disputes or questions
regarding interior or exterior signage that arise after the commencement date shall be resolved by
the City's Recreation Center Manager which shall not be unreasonably withheld. It is understood
and agreed that the costs for the signage have been incorporated into the construction cost and,
except as provided in the last sentence of Section 12 (b) above, Sherman shall not be responsible
for any additional charges.
13. The Management Committee
During the term of the lease, there shall be a Management Committee formed for the purpose of
resolving any conflicts that may arise between the parties in connection with use and operation of
the Recreation Center and the applicable provisions of this lease. The Management Committee
shall consist of four(4)members (each a"Committee Person"). On or about December 15 of
each year, the City and Sherman shall appoint two (2) committee persons to serve for the next
calendar year. The initial committee persons for the City shall be the Recreation Center Manager_
and the Recreation and Facilities Superintendent. The initial committee persons for Sherman
shall be the Manager, Physical Medicine and Rehabilitation, and the Manager, Community
Programs. Each committee person shall have an equal vote on matters being decided by the
Management Committee. The Management Committee shall use its best efforts to resolve all
conflicts or matters with which it is presented. The Management Committee shall have no
authority, but shall be solely advisory.
14. Parking Spaces
During the term of this lease Sherman shall have the exclusive right to use five (5) designated
parking spaces in the parking lot on the south side of the Recreation Center and ten(10)parking
spaces in the parking garage on the walkway level. Such parking spaces shall be specifically
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marked by the City indicating that such parking spaces are for the exclusive use of Sherman
Hospital employees and visitors for Mondays through Fridays, between the hours of 7:00am and
7:00pm. The precise location of such parking spaces shall be determined by the City's
Recreation Center Manager. The hours set forth herein may be changed by the City's Recreation
Center Manager.
15. Performances of Services by City
(a) In addition to the City's other obligations contained in this lease, the City agrees to
maintain all common areas in a clean condition and to furnish the following during the term of
this lease: (i) automatic passenger and freight elevator services; (ii) common restroom facilities
with hot and cold water; (iii) heating and air conditioning for comfortable occupancy of the
Leased Space and Recreation Center; (iv)janitorial and cleaning services for the Recreation
Center(other than in the Leased Space); (v) hot and cold water as required for plumbing for the
Leased Space and Recreation Center; (vi) non-hazardous waste removal; (vii) snow and ice
removal of parking lots, driveways and sidewalks; (viii) landscaping and grounds maintenance.
Sherman shall pay the cost of all utilities and services for the Leased space, including but not
limited to, electricity, telephone, gas, water and janitorial services and medical waste removal
and hazardous waste removal. To the extent practicable, City shall use its best efforts to
separately meter and bill Sherman for any such utilities. In the event that such utilities cannot
practicably be so separately metered and billed, Sherman shall pay City for such utility services
based on an amount reasonably estimated by City.
(b) If the City ceases to furnish any service in the Recreation Center or Leased Space for
more than two (2)consecutive business days, and if such cessation is within the City's reasonable
control (that is, is not caused by force majeure) and does not arise as a result of an act or
omission of Sherman, and as a result of such cessation the Leased Space or a material portion
thereof is rendered untenantable (meaning that Sherman is unable to use such space in the normal
course of its business),then in addition to any other remedies available to Sherman, rent payable
hereunder shall be equitably abated based upon the prorata percentage of Leased Space so
rendered untenantable, for the period commencing on the date such space became untenantable
and continuing until the date such space becomes tenantable again.
16. Hours of Use
The City hereby covenants and agrees that the Recreation Center shall be open for operation, at a
minimum, Monday through Friday, between the hours of 6:00 a.m. and 10:00 p.m., Saturday
between the hours of 6:00 a.m. and 10:00 p.m., and Sunday between the hours of 6:00 a.m. and
9:00 p.m., with reasonable exceptions for public holidays, closure for necessary repairs and force
majeure. Sherman shall have access to the Recreation Center for the Sherman Programs and
other activities during all such hours of use and any other hours the City chooses to open the
Recreation Center for operation. Should Sherman wish to operate its Sherman Programs in the
Recreation Center at times when the Recreation Center would not otherwise be open, the City
shall assign staff and maintenance personnel as it deems necessary and Sherman shall reimburse
the City on a monthly billing basis for its additional expenses incurred as a result of opening the
Recreation Center. Sherman, for no additional charge, shall have passkey or code access to the
Leased Space at all hours for purposes other than operating the Sherman Programs that involve
10
access by patients and the public.
17. Hazardous Materials
Each of the City and Sherman, at their sole cost and expense, shall comply with all laws, rules
and regulations relating to the storage and use of any hazardous, toxic or radioactive materials,
including asbestos, PCP's and radioactive substances, or any flammable oils or fluids, or any
explosives (collectively, "Hazardous Materials"). In addition, all medical waste, including
without limitation any needles, syringes, blood tainted or"red bag"material or other medical
waste (collectively, "Medical Waste") shall be disposed of in accordance with all applicable
laws, rules and regulations of any governmental authority. Pending collection for disposal,
Sherman shall keep all such materials used or generated by Sherman stored within the Leased
Space (or, if requested by the City, at a location within or adjacent to the Recreation Center) and
in containers in such manner that comply with all applicable laws, rules and regulations of any
governmental authority. The City and Sherman shall each be solely responsible for and shall
defend, indemnify and hold the other and its agents harmless from and against all claims, costs
and liabilities, including attorney's fees and costs, arising out of or in connection with such
party's performance of its obligations hereunder related to Hazardous Materials and Medical
Waste.
18. Compliance with Laws
During the term of this lease, the City and Sherman shall each comply with all laws,codes, rules
and regulations governing the use and operation of the Recreation Center and Leased Space,
respectively. Sherman shall conduct its activities according to good and recognized practices and
standards within its field of service.
19. Maintenance and Repair
(a) The City shall, at its own expense, maintain and keep in good repair and replace when
necessary the foundation, exterior walls,roof and other structural portion of the Leased Space
and all electrical,plumbing, heating and ventilating equipment serving the Leased Space. The
City shall perform its maintenance in a manner designed to minimize interference with
Sherman's use of the Leased Space. In addition, the City shall operate, maintain and repair all
usual air conditioning, heating, furnace, water, plumbing, sewer, electricity, and ventilation
equipment maintained for the comfortable occupation and use of the Leased Space and
Recreation Center. The warm-water Therapy Pool shall be maintained at a constant temperature
between 89 and 94 degrees. The City shall be responsible for the replacement of any such
mechanical equipment as needed provided that such is not the result of any negligent act of
Sherman, or any of its officers, agents or participants.
(b) Sherman shall, at its expense, maintain and repair when necessary the interior of the
Leased Space, including the repair and replacement of its fixtures and appliances, so that at all
times the interior of the Leased Space is in good condition and repair,provided, however, City
may repair, maintain or replace any such interior features, fixtures, or appliances at the sole
discretion of City's Recreation Center Manager. In the event City elects to perform such repair,
maintenance or replacement Sherman shall reimburse City for any actual costs incurred thereby
upon thirty(30) days written notice by City. In addition, Sherman shall provide its own cleaning
11
and janitorial services for the Leased Space, although it may use the same service the City uses
for the remainder of the Recreation Center in order to save its costs. City will remove on a
nightly basis bagged trash of Leased Space which will be placed by Sherman immediately in
front of Leased Space. Except as expressly provided in this lease to the contrary, upon the
termination or at the expiration of the term of this lease, Sherman shall remove its personal
property from the Leased Space and shall leave the Leased Space in a"broom clean" condition.
(c) All other areas of the Recreation Center shall be maintained and repaired by the City
at all times at its sole cost and expense.
20. Alterations
(a) Sherman shall make no interior alterations, installations or changes, structural or
otherwise, to the Leased Space without the prior written consent of City via the Recreation
Center Manager which shall not be unreasonably withheld.
(b) All permanent additions, fixtures and improvements to the Leased Space made either
by the City or Sherman, shall be the City's property, and shall remain as a part of the Recreation
Center upon termination or the expiration of the term of this lease unless Sherman is authorized
in writing to remove the same, with the exception of X-Ray machine and Physical Therapy
equipment, which shall remain the property of Sherman.
(c) All alterations to the Recreation Center(other than the Leased Space) shall be
performed by the City at the City 's sole cost and expense.
21. Inspection
The City shall have the right to inspect the Leased Space upon reasonable prior notice to
Sherman to monitor Sherman's compliance with the terms of this lease. The City may also
inspect the Leased Space at any time in the event of an emergency and without prior notice to
Sherman if the giving of such notice would be not be reasonably practical.
22. Casualty
If any part of the Recreation Center or Leased Space shall be destroyed or damaged in any way
by fire, flood,tornado,hurricane, earthquake, windstorm, hail or for any other reason not caused
by Sherman(the "Damaged Space"), the City shall, at its own cost and expense and in
conformance with all applicable laws and ordinances, diligently and promptly repair, rebuild and
restore the same to at least as good a condition in which it existed immediately prior to such
destruction or damage and thereafter Sherman shall diligently and promptly replace its contents.
If the damaged space has any material impact on Sherman's operations or activities at the
Recreation Center, from the date of such destruction or damage until such time as the damaged
space is repaired and restored as aforesaid, all rent and other charges payable hereunder shall be
equitably abated from the date of such destruction or damage in the proportion and to the extent
of such impact at City's sole discretion. City shall not be liable for any damage to Sherman
owned equipment and machinery including but not limited to: X-Ray machine and Physical
Therapy equipment.Notwithstanding anything to the contrary in this paragraph, in the event the
Recreation Center is twenty-five percent(25%) or more destroyed,the City at its sole option may
12
elect to terminate this lease, and in the event this lease is so terminated by the City as a result of
the destruction of the Recreation Center Sherman's obligation to pay rent and other charges
payable hereunder shall terminate.
23. Insurance: Waiver of Claims: Indemnity
(a) Sherman shall purchase and maintain the following insurance during the entire term
for the benefit of Sherman and the City (as an additional insured), with terms, coverage and with
companies reasonably satisfactory to the City: (i) General liability and professional liability for
any malpractice injury, personal injury, or bodily injury due to actions or omissions of
employees, officers or agents with a limit of$1,000,000 with no aggregrate and a$75,000
deductible and excess coverage limit of$10,000,000 with an aggregate limit of$20,000,000; (ii)
Property and physical damage insurance with a limit of$5,000,000 and a$5,000 deductible for
"all risks"of physical loss or damage equal to (100%) full replacement cost of all, furniture,
contents, trade fixtures, equipment, and all other items of Sherman property in the Leased Space;
(iii) Worker's compensation insurance and employees liability insurance with a primary limit of
$1,000,000 per occurrence covering Sherman employees in the Recreation Center. Such
coverage may be by a so-called"Blanket"policy of insurance containing a deductible amount
reasonably satisfactory to the City, which deductible shall be payable solely by Sherman.
Sherman may provide self-insurance for such coverage requirements, upon written approval by
the City.
(b) Sherman shall, not less than five (5) days prior to the commencement of the term,
furnish to the City certificates in form and substance reasonably satisfactory to the City
evidencing the coverages required by this section, which certificates shall state, among other
things,that such insurance coverage may not be changed or canceled without at least thirty(30)
days' prior written notice to the City. If Sherman self insures, it shall provide the City with an
appropriate certificate. Without limiting the generality of the waiver of claims contained in
Section 23 (a)hereof, Sherman hereby waives all claims and rights of recovery against the City
and its officers, directors, employees, agents and representatives for any loss or damage to
Sherman's property or interests (including rent loss and business interruption), which loss is
insured against, or required to be insured against, by Sherman pursuant to this Section, regardless
of fault or negligence and regardless of the amount of insurance proceeds collected or collectible
under any insurance policies in effect, and Sherman represents and warrants that all such policies
permit such waiver and contain, and shall contain, enforceable waiver of subrogations
endorsements. In addition, and without in limitation to the generality of Section 23(a), Sherman
Hospital agrees in the event of any loss or damage to Sherman's property or interests (including
rent loss and business interruption), Sherman shall resort to Sherman's insurance coverage prior
to asserting any claim or demand against the City or its assets.
(c) To the extent not prohibited by applicable law, including without limitation, any
prohibition imposed by the Landlord and Tenant Act (765 ILSC 705/0.01 et. seq.) (the"Act"),
Sherman hereby waives any and all claims, suits and liability of whatsoever nature against City to
the greatest extent permitted by law, for any claims arising out of, or in connection with,
Sherman's negligent performance of the terms if this agreement. Additionally, notwithstanding
any language to the contrary in Section 23 (b), Sherman expressly waives any and all claims
13
against City for lost profits,business interruption, or any and all other indirect damages of
whatsoever nature and based upon whatsoever cause.
(d) Sherman Hospital shall indemnify, defend and hold harmless the City and its
commissioners, officers, directors, employees, agents and contractors from and against any and
all claims, costs, damages, losses, liabilities and expenses (including reasonable attorney's fees)
for any; (i) death or personal injury to any persons, including, but not limited to, any claims or
liability arising out of or in connection with any alleged reckless or negligent testing, diagnosis,
health assessment or treatment by Sherman and(ii) loss or damage to the property of third-parties
arising, in each instance, from the act or omission of Sherman, its employees, agents, contractors,
invitee or from any activity,work or thing done or suffered by Sherman in the Leased Space or
Recreation Center or as a result of Sherman's breach or default under this lease. If any such
proceeding is filed against the City of Elgin or any such indemnified party, Sherman Hospital
agrees to defend the City of Elgin or such party in such proceeding at Sherman Hospital's sole
cost by legal counsel reasonably satisfactory to the City of Elgin, if requested by the City of
Elgin. In no event shall Sherman Hospital be obligated to indemnify the City of Elgin or any of
the City of Elgin's officers, commissioners, directors, employees, agents or contractors for any
willful or negligent acts or omissions of the City of Elgin or any of the City of Elgin's officers,
directors, employees, agents or contractors. The City of Elgin's and Sherman Hospital's
obligations under this section shall survive the expiration or earlier termination of this lease.
24. Default, Breach or Termination by Sherman
(a) The occurrence of any of the following shall constitute a default by Sherman
hereunder: (1) if Sherman fails to pay any installment of rent or any other sum which is due and
payable to the City hereunder and such failure continues for a period of ten(10) business days
after written notice thereof by the City to Sherman; or(2) if Sherman fails to keep observe or
perform any other term, covenant or conditions of this lease to be kept, observed or performed by
Sherman and such failure continues after Sherman's receipt of notice thereof from the City for
more than thirty(30)days, unless same cannot reasonably be cured within 30 days, then within
such additional time as is reasonably necessary to complete such cure, provided that Sherman has
diligently commenced such cure within the initial 30-day period and diligently pursues such cure
to completion.
(b) Upon the occurrence of any one or more defaults by Sherman, the City may exercise
any remedies available at law or in equity, including but not limited to, an election to terminate
this lease and Sherman's right to possession of the Leased Space or, without terminating this
lease, terminate Sherman's right to possession of the Leased Space. Any sums not timely paid by
Sherman to the City after expiration of the applicable notice periods shall bear interest at the rate
of the prime rate then most recently published in The Wall Street Journal (Midwest Edition) (the
"Prime Rate")plusl%per month(the"Default Rate"). In addition to the foregoing rights, if
Sherman's failure to perform, observe or keep its non-monetary obligations hereunder shall
continue for a period of thirty(30) days after the City gives written notice thereof to Sherman,the
City shall have the right to cure Sherman's default and Sherman shall pay on demand all of the
City's costs and expenses with respect thereto plus interest at the Default Rate. Notwithstanding
the foregoing, in the event of any termination of this lease or repossession of the Leased Space by
14
•
the City,the City agrees to use its commercially reasonable efforts to relet the Leased Space in
order to mitigate its damages, although the City's obligation shall be limited to reletting to
tenants whose intended use is suitable to and compatible with the Recreation Center. In the
event the City relets the Leased Space to a new tenant(other than the City), the City shall be
entitled to recover from Sherman all of its reasonable direct and actual costs and expenses
associated with such reletting, including, but not limited to, its reasonable costs of remodeling or
reconfiguring the Leased Space.
25. Default by City
The occurrence of any of the following shall constitute a default by the City hereunder: (1) if the
City fails to pay any sums due Sherman under this lease and such failure continues for a period
of thirty(30)business days after written notice thereof by Sherman to the City; or(2) if the City
fails to keep, observe or perform any other material term, obligation, covenant or condition of
this lease to be kept, observed or performed by the City and such failure continues after the
City's receipt of notice thereof from Sherman for more than thirty (30) days, unless same cannot
reasonably be cured within thirty(30) days, then within such additional time as is reasonably
necessary to complete such cure, provided that the City has diligently commenced such cure
within the initial 30-day period and diligently pursues such cure to completion. Upon the
occurrence of any material breach by City, Sherman may exercise any remedies available at law
or in equity.
26. Cumulative: Non Waiver
Notwithstanding anything in this lease to the contrary, all remedies for a default set forth in this
lease (i) shall be cumulative and(ii) may be pursued successively or concurrently as the
applicable party may elect. The waiver by either party of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term, covenant or
condition of any subsequent branch of the same, or any other term, covenant or condition herein
contained.
27. Sherman's Status
In the event that Sherman fails to maintain its current status as a recognized charitable institution
under Section 501(C)(3) of the Internal Revenue Code, or any future equivalent law, Sherman
shall pay as additional rent any real estate taxes or other amounts that would be assessed against
the Leased Premises or the Recreation Center due to such change in status.
28. Assignment or Sublease by Sherman: Successors or Assigns
(a) Except as provided below, Sherman may not assign or transfer this lease or any
interest therein, or sublet any portion of the Leased Space, without the written consent of the
City, which consent shall not be unreasonably withheld. This section shall not be construed to
prohibit corporate merger, acquisition or restructuring with similar 501(C)(3)healthcare
institutions in which event the City's consent shall not be unreasonably withheld.
(b) Subject to the foregoing restrictions, all the terms, conditions, covenants and
agreements of this lease shall extend to and be binding upon and benefit the City, Sherman and
their respective successors and assigns, and upon any person, firm or corporation coming into
•
15
ownership or possession of any interest in the Recreation Center or Leased Space by operation of
law or otherwise, and shall be construed as covenant running with the land.
29. Governing Law
This agreement shall be subject to and governed by the laws of the State of Illinois. Venue for
the resolution of any disputes or the enforcement of any rights arising out of or in connection
with this agreement shall be in the Circuit Court of Kane County, Illinois.
30. Severability
The terms of this agreement shall be severable. In the event any of the terms or provisions of this
agreement are deemed to be void or unenforceable for any reason,the remainder of this
agreement shall remain in full force and effect.
31. Notices
All notices and demands required hereunder shall be in writing and shall be delivered either(i)
personally, (ii)by certified mail, return receipt requested, (iii)by a recognized overnight service
or(iv) by facsimile transmission. Such notice shall be deemed given when received, and shall
be sent to the following persons:
If to Sherman Hospital: John Graham
CEO, Sherman Health Systems
934 Center Street
Elgin, IL 60120
If to City of Elgin: Monica Meyers
Director of Parks & Recreation
31 S. Grove Avenue
Elgin, IL 60120
or to such other person or persons at such other address or addresses that shall be designated in
writing from time to time by either the City or Sherman.
32. Quiet Enjoyment
The City covenants that Sherman, on paying the rent and performing its obligations under this
lease, shall peaceably have, hold and enjoy the Leased Space for the entire term herein granted
without any hindrance by or through the City, or its successors or assigns.
33. Time of the Essence
Time is of the essence of this lease and each and all of its provisions.
34. No Joint Venture
Nothing contained in this lease shall be construed as creating a partnership or joint venture
between the City and Sherman, it being understood that the relationship between the City and
Sherman be one of landlord and tenant only.
16
35. No Construction Against Drafting Party
Each party has been represented by legal counsel in negotiating this lease. Accordingly, the rule
of construction that ambiguities shall be resolved against the drafting party shall not apply to this
lease.
36. Captions
The headings and titles of this lease are for convenience only and shall have no effect on the
construction or interpretation of this lease.
37. Litigation Costs
In the event of any litigation between Sherman and the City to enforce any provision of this lease
or any right of either party hereto, the unsuccessful party to such litigation or arbitration shall pay
to the successful party all costs and expenses, excluding attorney's fees, incurred therein.
38. Entire Agreement
This lease represents the entire agreement between the parties and supersedes any and all prior
negotiations, representation, or agreements, either written or oral. This lease may be amended
only by written instrument signed by the parties.
(Signature page follows)
17
IN WITNESS WHEREOF, the parties have executed this lease on the date first
above written.
CITY OF EL , an Illinois municipal corporation
By: 4424g.
Name: Se'•4^/471L
Title: , r/A6 4/ /j�1,�v�tG�2
Date: //B/
SHERMAN HEALTH SYSTEMS, an Illinois not for profit corporation
By: I
•
N. John A. Graham
Title: President
Date: July 9, 2001
Attest:
94-?)/1 *-`--C
City Clerk
18
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Williams Associates Architects, Ltd. 210 North Hale Wheaton, Illinois 60187 Phone 630-221-1212 Fax 630-221-1220 Williams-Architects.com
ATTACHMENT C
•
Elgin Family Recreation Center/Revised Project Schedule/28 June 2000/Page 1
WILLIAMS
ARCHITECTS
ARCHITECTS PLANNERS
DATE: 8 March 2001
PROJECT: City of Elgin Recreation Center/Project No. 1999-036
RE.: Revised Project Schedule
TO: Dave Lawry,City of Elgin
Jeff Masters,Gilbane
RIJ
File
FROM: Tom C. Poulos,Associate/Williams Architects
Please find enclosed the revised Project Schedule,with respect to Architects scheduled dates for
completion of Documents and expediting the associated delivery to all appropriate parties. The revised
dates as noted below are in accordance with the dates and Bid Releases discussed in our 6 March 01
Meeting Minutes. As outlined in our Meeting, it was our mutual understanding that due to Gilbanes request
for additional Bid Release Packages and the Architects/Engineers subsequent additional coordination
time involved,the dates for the Project Schedule and associated Bid Release Packages/dates were
revised as follows:
PROJECT SCHEDULE
TASK DURATION DATE
1. Council Approval for Owner/Architect Contract Negotiations N/A 29 Oct 99
2. City Approves Contract and Authorizes Williams Associates Architects (0.5 Months) 10 Nov 99
Ltd.to begin Basic Architectural/Engineering Services
3. RCAT&Project Basic Services Commence (1.5 Months) 05 Jan 00
4. Schematic Design Phase (4.0 Months) 10 May 00
5. Design Development Phase(Start Date:01 Jun 00) (4.0 Months) 30 Aug 00
6. Bid No. 1A:Construction Document Phase-Parking Deck (Start: (5.0 Months) 12 Feb 01
01 Sep 00)
7. Bid No. 1B:Construction Document Phase—Site Civil,Combined (05 Months) 05 Feb 01
Parking Deck&Recreation Center(Start:01 Sep 00)
8. Bid No.2:Construction Document Phase—Structural Steel, Recreation (6.0 Months) 14 Mar 01
Center(Start:01 Sep 00)
9. Bid No.3:Construction Document Phase—Building Concrete, (7.0 Months) 09 Apr 01
Recreation Center (Start:01 Sep 00)
10. Bid No.4:Construction Document Phase—M/P/FP/E, Recreation (9.0 Months) 11 May 01
Center(Start:01 Sep 00)
11. Bid No. 6:Construction Document Phase—Balance of Project Systems, (10 Months) 01 Jun 01
Recreation Center(Start:01 Sep 00)
Elgin Family Recreation Center/Revised Project Schedule/28 June 2000/Page 2
Please note,Gilbane to furnish a schedule, based on the enclosed information, indicating the respective
Bidding and Construction Phase dates/duration for each Project. We are still waiting for this information.
G:\1999199036\Construction Schedules\Project Schedule 8.doc
ATTACHMENT D
Wellness Construction Cost Total Financing Excluding
Assumptions Estimates Estimate Project Fees Financing
Total Square Ft. 9,400 186,000 9,400
Adjusted Cost/Sq. Ft. 153 153 153
Wellness Construction Costs 1,435,642 28,407,384
Aquatherapy Costs 170,557
Sherman Separate Metering 10,000
Total 1,616,199 1,435,642
Const. Management Fees(7.6%) 122,831
A & E Fees (6.5%) 105,053
Contingency Fees (5.0%) 80,810
Total Construction Costs 1,924,893
Financing Fees (1% of Const. Costs) $19,249 $0
Total Bond Amount $1,944,142 19,249 $1,924,893
Annual % 5.5 5.5 5.5
Lease Term(Yr) 20 20 20
Annual Lease Payment 162,684 1,611 161,074
Annual Lease Payment/Sq. Ft. $17.31 $17.31 $0.17 $17.14
Aquatherapy
Incremental Construction Costs 170,557 Included in Construct. Costs Above
Annual % 5.5
Lease Term(Yr) 20
Annual Lease Payment 14,272
Annual Lease Payment/Sq. Ft. $1.52
Assumptions
Annual Maintenance 38,000
20% Costs Assumed by Sherman 33%
Annual Lease Payment 12,540
Annual Lease Payment/Sq. Ft. 1.33 1.33
PT Programming
Assumptions
Annual Maintenance 55,500
Costs Assumed by Sherman 20%
Annual Lease Payment 11,100
Annual Lease Payment/Sq. Ft. 1.18 $1.18
Wellness Programming
Assumptions
Classes/Week 2
Hours per class 2
Hours Per Week 4
Hours Per Year 208
Cost per hour 25
Total Programming Costs 5,200
Annual Lease Payment/Sq. Ft. $0.55 $0.55
CAM
Assumptions
Rec Center Sq. Ft. 185,000
Common Area Estimate % 17%
Wellness Center Sq. Ft. 9,400
Wellness Center % 5.08%
Common Area Sq. Ft. 31,450
Utilities/JAN Historical Sq. Ft. 5.25
Annual CAM Cost 165,113
Wellness CAM Allocation 8,390
Wellness CAM Sq. Ft. $0.89 $0.89
Exterior/Land $0.80
Actual Sherman Historical $1.50 -
HVAC Assumptions
Wellness Sq Ft 9,400
Historical Cost/Sq. Ft. $0.30
Annual HVAC Cost $2,820
HVAC Cost per Sq. Ft. $0.30 $0.00 Pass Through
Based on Williams Design
Parking Maintenance CAM
Ground Maintenance CAM
Parking Deck CAM
Utilities(Excluding HVAC)
Pass Through $0.00 $0.00
Marketing Costs
Assumptions ?
Total Estimated Payment $22.07
\ciOCC�
\" Agenda Item No.
t� , IL
City of Elgin 9
E
L
June 1, 2001 G � 4
Cyt —
TO: Mayor and Members of the City Council N
RECREATIONAL LEISURE
FROM: F
Joyce A. Parker, City Manager ANI7 C:lORALLOP1.ZENS MES
FOR ALL CPORS
SUBJECT: Elgin Family Recreation Center Wellness Lease
Agreement With Sherman Health Systems
PURPOSE
The purpose of this memorandum is to provide the Mayor and members
of the City Council with information to approve a lease agreement
with Sherman Health Systems (Hospital) as the sole hospital
wellness provider at the Family Recreation Center.
BACKGROUND
eft. A dedicated wellness provider is essential to the development of a
Family Recreation Center. It will broaden the services offered at
the facility to include not only recreation but also health-related
classes, wellness programming, and warm water therapy pool
rehabilitation services . The Recreation Center Needs Assessment
and Master Plan Study of November 1998 recommended that a hospital
wellness component be included as a benefit in the Recreation
Center.
The highlights of the lease agreement :
• Sherman Health Systems will be the sole hospital provider at
the Family Recreation Center.
• 20-year lease term (initial 10-year term with two 5-year
extensions) .
• 9, 300 square foot wellness center plus 100 square foot office
space in the fitness center.
• Sherman will pay City monthly lease payments based on a cost
of $22 a square foot or $206 , 800 annually. This monthly
payment will include : construction bond repayment for the
wellness center and aqua therapy pool, aqua therapy pool use,
fitness center therapy use and common area maintenance actual
costs . All costs related to the square footage lease payment
will be evaluated annually for adjustment .
•
. .
Wellness Lease Agreement with Sherman Health Systems
F June 8, 2001
Page 2
• Sherman will provide/offer: community education programs,
health screening, outpatient rehabilitative services, aqua
therapy programs, physical therapy, occupational health and
sports medicine physician services .
• The City will include $36 in each new fitness center
membership for Sherman Hospital to provide a voluntary health
assessment and wellness center-sponsored programs and program
discounts . This is estimated to total $115 , 200 for the first
year with an estimated 3, 200 memberships . This amount will
vary annually with the number of new memberships .
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Recreation Center Advisory Team, Sherman Health Systems (John
Graham) and the Parks and Recreation Advisory Board.
FINANCIAL IMPACT
This lease agreement with Sherman Health systems will not increase
any costs to the City for the construction or operation of the
Family Recreation Center.
The City will sell additional bonds in 2002 , currently estimated at
$2 million, for Sherman' s build-out costs plus architectural and
engineering fees . A portion of Sherman' s monthly lease payment
will be contributed to this bond payment . The City will receive
monthly payments of $17, 233 . 33 to total $206, 800 annually.
WEGAL IMPACT
`\ The agreement requires further editing revisions .
ALTERNATIVES
None.
RECOMMENDATION
The recommendation is to approve the lease agreement with Sherman
Health Systems (Hospital) as the sole hospital wellness provider at
the Family Recreation Center.
Res fully submitted,
r
4_
Joyc A. arker
City Manager