Number
030309
Version
SUBSTITUTE 2
Reference
Sponsor
ALD. HENNINGSEN
Title
Substitute resolution approving a lease for the Pier Wisconsin project in the 4th aldermanic district.
Analysis
This resolution authorizes, pursuant to Sec. 30.38(6), Stats., the Board of Harbor Commissioners and the proper City officers to enter into a Development and Lease Agreement ("Lease Agreement") with Pier Wisconsin Ltd. ("Tenant"). Under the terms of the Agreement, the City and the Board of Harbor Commissioners ("Board") will lease certain City property located on submerged and filled lake bed grant lands ceded to the City by the State of Wisconsin and located on the Lake Michigan shore front. The initial term of the lease is for 30 years and the initial rental will be a one-time payment computed at $6.50 per square foot times the number of square feet covered by the Improvement (but in no case less than $390,000) plus additional annual rent of 5% in excess of $5,000,000 in net Tenant income, payable at the time the City approves the final design of the Improvement and all other conditions in the agreement are satisfied. The Lease Agreement can be extended for one additional 30-year period subject to an agreement between the parties on a new rental. If the parties cannot agree, they may arbitrate any disagreement on the rental amount for the new term. Tenant will construct a Great Lakes Museum and Navigation Education Center (the "Improvement") on the Lease Site. Exhibit A of the lease sets forth certain criteria for the design of the Improvement. The Tenant must work closely with the City and Harbor Commission to develop and select a final design. A designated professor in the University of Wisconsin-Milwaukee Department of Architecture (or if he is not available, another individual agreed upon by the parties) shall facilitate the design process and resolve any design related differences within the agreed parameters. The final design will be submitted to the Harbor Commission and the Common Council for approval. The Tenant will also provide docking facilities for the Schooner Denis Sullivan and operate other docking and pier facilities on the Lease Site. It is also anticipated that Discovery World will be a subtenant of a portion of the Improvement. With the exception of catastrophic dock wall failure, all other maintenance of the Lease Site is Tenant's responsibility. After July 1, 2016, the City can reclaim certain unimproved areas of the Lease Site, subject to the Tenant's rights to pay additional rental for those areas and add them to its permanent leasehold. Tenant also has agreed to use a minimum of 18% Emerging Business Enterprises when constructing the Improvement on the Lease Site. Prior to starting construction of the Improvement, the Tenant must comply with a number of preconditions, including final Harbor Commission and City approval of the Improvement design (all of the Conditions are outlined in Exhibit C to the Lease Agreement). All such conditions must be satisfied by December 31, 2004 or the Lease will terminate and Tenant will revert to its current lease, expiring December 31, 2007, for the southern half of the municipal pier. The Denis Sullivan will then be maintained in the City in accordance with that prior lease. The City will undertake mutually agreed upon public improvements on or adjacent to the leased site at an estimated cost not to exceed the amount of initial rent paid under the Lease Agreement.
Body
Whereas, Pier Wisconsin Ltd. desires to undertake the construction of an Improvement as defined in the Pier Wisconsin Ltd. Development and Lease Agreement ("Lease Agreement"), a copy of which is attached to the file; and
Whereas, The Improvement will be located upon the Property, as defined in the Lease Agreement, which Property is under the jurisdiction of the City of Milwaukee acting through its Board of Harbor Commissioners ("Board"); and
Whereas, Pier Wisconsin is currently the lessee under a Lease Agreement with the Board for a portion of the Property and it is the intent of this Lease Agreement to supersede and replace that prior lease; and
Whereas, The Board has found that the Improvement will be of great public benefit and is consistent with the terms of its resolution adopted on June 16, 1978 reserving the area commonly known as the "North Harbor Tract," including the Property, for recreational use and development which supports recreational use; and
Whereas, The Common Council concurs in the above recited finding of the Board and further finds that the Improvement is a recreational use which promotes the enjoyment and use of the nature scenic beauty of the Milwaukee Lake Front by the general public and is a navigational use which will promote navigation on the Great Lakes; and
Whereas, This Lease Agreement provides for the construction of the Improvement on the Property through the creation of a construction easement that will encompass the Property and adjacent areas needed for construction staging; and
Whereas, This Lease Agreement further provides for the long-term operation of the Improvement through the lease of the Property to the Tenant; and
Whereas, The Board of Harbor Commissioners approved the Lease Agreement on July 16, 2003; now, therefore, be it
Resolved by the Common Council of the City of Milwaukee that the Council hereby approves the Lease Agreement attached to this file and authorizes the Board's President and the proper City officers to execute the Agreement on the City and Board's behalf.
Drafter
PBM:dms
July 9, 2003
1122-2003-540:67930