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HomeMy WebLinkAboutA004 - Resolution approving lease extension for 220 Freel Drive with Waste Management of Iowa, Inc. by thirty (30) days with an expiration on January 30, 2026ITEM #:4 DATE:12-23-25 DEPT:PW SUBJECT:EXTENSION OF LEASE FOR 220 FREEL DRIVE COUNCIL ACTION FORM BACKGROUND: The City of Ames has an executed installment purchase contract with Freel Family LP for land at 220 Freel Drive. This property is one of the lots where plans are being developed for the new Resource Recovery and Recycling Campus (R3C). The City closed on this property on July 18, 2025. The installment purchase contract obligates the City to pay the owner over several years. At the time the contract was executed, Freel Family LP was leasing the land at 220 Freel Drive to Waste Management of Iowa, Inc. for a staging area for roll-off dumpsters and other waste receptacles for servicing Waste Management's customers. This lease was known by the City at the time of closing on the property. The existing lease was inherited by the City of Ames through the installment purchase contract and is set to expire on December 31, 2025. In September 2025, staff issued a notice to Waste Management that the lease would not be renewed. Staff from Waste Management of Iowa, Inc. has approached the City in an effort to obtain an extension to the end date of the lease in order for them to continue planning for a new location for their services and assist in the logistics of moving their equipment off the property at 220 Freel Drive. In exchange for the extension, a lease payment of $750 will be made by Waste Management of Iowa. It is important to note that under the City's current installment purchase contract all lease payments, including this extension, are payable to Freel Family LP. Waste Management originally requested a lease extension of 60 days. However, City staff was concerned about the impact of this request on the City's ability to proceed in a timely manner on construction of the R3C. However, acknowledging the disruption this transfer of ownership has on Waste Management, and potential to further disrupt Waste Management's service to Ames customers, staff believes a 30-day extension can be accommodated. Additionally, Waste Management of Iowa, Inc. has been a long-term partner at the existing Resource Recovery Plant (RRP) by providing services for hauling reject material to the Boone County Landfill. This partnership has been key in the success of the RRP and this lease extension will help Waste Management of Iowa, Inc as it transitions to a new property. A 30-day extension should not have a substantial impact on the R3C project. The extension contains a provision that excuses the City from having to issue a new notice of termination of the lease. No onsite work will be occurring during this requested 30-day extension. The only onsite activities that need to occur during the winter months is clearing and removal of trees that will conflict with the location of future R3C construction activities. 1 The tree clearing activities will be contracted separately by the City and must be completed prior to April 1, 2026 in order to be in compliance with the Endangered Species Act regarding the Indiana Bat. These activities can take place in the months of February and March 2026, which is likely the same time frame that bids will be received for the R3C construction. ALTERNATIVES: 1. Approve the lease extension with Waste Management of Iowa, Inc. by thirty (30) days with an expiration on January 30, 2026. 2. Direct staff to negotiate different terms for the lease extension. 3. Do not approve a lease extension with Waste Management of Iowa. CITY MANAGER'S RECOMMENDED ACTION: The extension of the lease by thirty days will not impact the continued development of the R3C project. Waste Management of Iowa, Inc. has been a vital team member in the current RRP process and accommodating this request builds upon that relationship as City transitions away from waste-to-energy into the new R3C project. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative 1, as described above. ATTACHMENT(S): Seventh Amendment to Lease (Ames IA) 11.26.25.docx.pdf 220 Freel Drive.pdf 2 1 SEVENTH AMENDMENT TO LEASE This SEVENTH AMENDMENT TO LEASE AGREEMENT (the “Amendment”) is made as of the date of the last Party to sign this Amendment by and between THE CITY OF AMES (“Landlord”) and WASTE MANAGEMENT OF IOWA, INC., an Iowa corporation (the “Tenant”). Landlord and Tenant are each individually also referred to as a “Party” and collectively, as the “Parties.” WITNESSETH: WHEREAS, Freel Family LP (“Freel”) and Tenant entered into that certain Agreement for Lease of Real Estate dated October 14, 2009 (the “Original Lease”), as amended by that certain First Amendment to Lease dated January 1, 2017 (the “First Amendment”), as amended by that certain Second Amendment to Lease dated November 18, 2018 (the “Second Amendment”), as amended by that certain Third Amendment to Lease dated November 20, 2019 (the “Third Amendment”), as amended by that certain Fourth Amendment to Lease dated September 28, 2020 (the “Fourth Amendment”), as amended by that certain Fifth Amendment to Lease dated December 24, 2021 (the “Fifth Amendment”), as amended by that certain Sixth Amendment to Lease dated November 29, 2022 (the “Sixth Amendment” together with the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment and Original Lease, the “Lease”) for certain real estate consisting of approximately three (3) acres and as more commonly known as 220 Freel Drive, Ames, IA 50010 (the “Premises”) as further depicted and described in the Lease; and WHEREAS, Landlord purchased the Premises from Freel; and WHEREAS, the Parties wish to amend the terms of the Lease in accordance with this Amendment. NOW, THEREFORE, for and in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby covenant and agree as follows: 1. Capitalized terms not defined herein shall have the meaning ascribed to such term in the Lease. 2. Landlord and Tenant hereby agree that the Term of the Lease is extended for an additional thirty (30) days, such that the Lease shall now expire on January 30, 2026. The parties agree that no further notice of lease termination will be issued or is required. 3. All other terms and conditions of the Lease that are not modified by this Amendment shall continue in full force and effect. Each Party represents and warrants to the other that (i) the individual executing this Amendment on behalf of such Party is authorized to execute this Amendment on behalf of said Party and (ii) it has taken all actions required by law to approve the execution of this Amendment. Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 37 2 4. This Amendment includes all amendments, modifications and changes to the Lease upon which the Parties have agreed to as of the date of this Amendment. The Provisions of this Amendment are intended to amend and supplement the provisions of the Lease and shall be construed so as to avoid conflicts between their respective terms, however, that in the event of a conflict or inconsistency between the provisions of this Amendment and the Lease, the terms and provisions of this Amendment shall control. As amended by this Amendment, the Lease is hereby ratified and affirmed and remains in full force and effect. 5. This Amendment may be executed by the Parties in any number of separate counterparts, and all such counterparts so executed constitute one agreement binding on all the Parties, notwithstanding that all the Parties are not signatories to the same counterpart. This Amendment may be executed by electronic means (such as Docusign) and transmitted by electronic means (such as an executed pdf document emailed by a Party), and each counterpart executed and transmitted by facsimile or email shall have the same force and effect as an originally executed document. At the request of a Party, a Party executing and transmitting a facsimile and/or electronic executed copy of this Amendment will execute and deliver an originally executed copy of the same to the requesting Party. [signature page to follow] Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 48 3 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date of the last Party to sign this Amendment. TENANT: WASTE MANAGEMENT OF IOWA, INC., an Iowa corporation By:___________________________ James A. Wilson, Vice President Date: LANDLORD: THE CITY OF AMES By:__________________________ Name: John A. Haila, Mayor Date: _____ ATTEST: By: ___________________________ Name: Renee Hall, Ames City Clerk Date: __________________________ Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 12/15/2025 59 220 Freel Drive Entire R3C Project Site M© City of Ames, Iowa makes no warranties, expressed or implied, including without limitation, any warranties of merchantability or fitness for a particular purpose. In no event shall the City of Ames be liable for lost profits or any consequential or incidental damages caused by the use of this map. 1:4,019 220 Freel Drive 6 1 SEVENTH AMENDMENT TO LEASE This SEVENTH AMENDMENT TO LEASE AGREEMENT (the “Amendment”) is made as of the date of the last Party to sign this Amendment by and between THE CITY OF AMES (“Landlord”) and WASTE MANAGEMENT OF IOWA, INC., an Iowa corporation (the “Tenant”). Landlord and Tenant are each individually also referred to as a “Party” and collectively, as the “Parties.” WITNESSETH: WHEREAS, Freel Family LP (“Freel”) and Tenant entered into that certain Agreement for Lease of Real Estate dated October 14, 2009 (the “Original Lease”), as amended by that certain First Amendment to Lease dated January 1, 2017 (the “First Amendment”), as amended by that certain Second Amendment to Lease dated November 18, 2018 (the “Second Amendment”), as amended by that certain Third Amendment to Lease dated November 20, 2019 (the “Third Amendment”), as amended by that certain Fourth Amendment to Lease dated September 28, 2020 (the “Fourth Amendment”), as amended by that certain Fifth Amendment to Lease dated December 24, 2021 (the “Fifth Amendment”), as amended by that certain Sixth Amendment to Lease dated November 29, 2022 (the “Sixth Amendment” together with the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment and Original Lease, the “Lease”) for certain real estate consisting of approximately three (3) acres and as more commonly known as 220 Freel Drive, Ames, IA 50010 (the “Premises”) as further depicted and described in the Lease; and WHEREAS, Landlord purchased the Premises from Freel; and WHEREAS, the Parties wish to amend the terms of the Lease in accordance with this Amendment. NOW, THEREFORE, for and in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby covenant and agree as follows: 1. Capitalized terms not defined herein shall have the meaning ascribed to such term in the Lease. 2. Landlord and Tenant hereby agree that the Term of the Lease is extended for an additional thirty (30) days, such that the Lease shall now expire on January 30, 2026. The parties agree that no further notice of lease termination will be issued or is required. 3. All other terms and conditions of the Lease that are not modified by this Amendment shall continue in full force and effect. Each Party represents and warrants to the other that (i) the individual executing this Amendment on behalf of such Party is authorized to execute this Amendment on behalf of said Party and (ii) it has taken all actions required by law to approve the execution of this Amendment. Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 37 2 4. This Amendment includes all amendments, modifications and changes to the Lease upon which the Parties have agreed to as of the date of this Amendment. The Provisions of this Amendment are intended to amend and supplement the provisions of the Lease and shall be construed so as to avoid conflicts between their respective terms, however, that in the event of a conflict or inconsistency between the provisions of this Amendment and the Lease, the terms and provisions of this Amendment shall control. As amended by this Amendment, the Lease is hereby ratified and affirmed and remains in full force and effect. 5. This Amendment may be executed by the Parties in any number of separate counterparts, and all such counterparts so executed constitute one agreement binding on all the Parties, notwithstanding that all the Parties are not signatories to the same counterpart. This Amendment may be executed by electronic means (such as Docusign) and transmitted by electronic means (such as an executed pdf document emailed by a Party), and each counterpart executed and transmitted by facsimile or email shall have the same force and effect as an originally executed document. At the request of a Party, a Party executing and transmitting a facsimile and/or electronic executed copy of this Amendment will execute and deliver an originally executed copy of the same to the requesting Party. [signature page to follow] Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 48 3 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date of the last Party to sign this Amendment. TENANT: WASTE MANAGEMENT OF IOWA, INC., an Iowa corporation By:___________________________ James A. Wilson, Vice President Date: LANDLORD: THE CITY OF AMES By:__________________________ Name: John A. Haila, Mayor Date: _____ ATTEST: By: ___________________________ Name: Renee Hall, Ames City Clerk Date: __________________________ Docusign Envelope ID: B519A8BB-48B7-4615-8400-906032D3D3CF 12/15/2025 59