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HomeMy WebLinkAboutAgenda - 09-15-2015 - 6g 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 15, 2015 Action Agenda Item No. 6-g SUBJECT: Lease Modification — Department of Social Services Expansion into Former Dollar Tree Space within Hillsborough Commons DEPARTMENT: Department of Social Services PUBLIC HEARING: (Y/N) No Asset Management Services ATTACHMENT(S): INFORMATION CONTACT: 1) December 9, 2014 Agenda Abstract Nancy Coston, 919-245-2800 2) Lease Modification Sharron Hinton, 919-245-2800 3) Option to Purchase Jeff Thompson, 919-245-2658 PURPOSE: To consider modifying the Hillsborough Commons Lease servicing the Orange County Department of Social Services to: 1) extend the terms of the initial Lease Agreement to the expanded 10,116 square feet (the former Dollar Tree space); 2) re-instate the Option to Purchase all or a portion of the entire Hillsborough Commons Shopping Center property; and 3) authorize the Chair to sign the appropriate documents upon final review of the County Attorney. BACKGROUND: On December 9, 2014, the Board of Orange County Commissioners approved a one year lease for the 10,116 square foot former Dollar Tree space for necessary and important programs in support of employment, training, and teen activities (see Attachment 1, "December 9, 2014 Agenda Abstract") The one year lease agreement allowed immediate use of the space and anticipated this longer term lease modification and the re-instatement of the purchase option contemplated in the original lease that expired in 2012, allowing the County to potentially negotiate a mutually agreeable purchase of all or a portion of the Shopping Center. The proposed Lease Modification ("Attachment 2") extends all of the original Lease terms to the additional space. The combined space contemplated within the Lease Modification is approximately 66,444 square feet. The proposed Option to Purchase section modification of the original Lease is located as Attachment 3. 2 FINANCIAL IMPACT: Currently Social Services is able to receive at least 50% administrative reimbursement on rental costs and other related operating costs such as utilities. The funds needed for these costs are already budgeted in Social Services line items for Fiscal Year 2015- 2016 and will be in future operating budgets. SOCIAL JUSTICE IMPACT: The expanded Social Services campus at Hillsborough Commons will provide significantly improved facilities and program support that will advance the following: • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. RECOMMENDATION(S): The Manager recommends that the Board modify the Hillsborough Commons Lease servicing the Orange County Department of Social Services to- 1) extend the terms of the initial Lease Agreement to the expanded 10,116 square feet (the former Dollar Tree space); 2) re-instate the Option to Purchase all or a portion of the entire Hillsborough Commons Shopping Center property; and 3) Authorize the Chair to sign the appropriate documents upon final review of the County Attorney. ATTACHMENT 1 3 ORANGE COUNTY BOARD OF COMMISSIONERS COPACTION AGENDA ITEM ABSTRACT Meeting Date: 11/1 ���' 1? Action Agenda Item No. 6-h SUBJECT: Hillsborough Commons Lease Amendment for Expansion of Northern Orange Employment and Training Center DEPARTMENT: Social Services, PUBLIC HEARING: (Y/N) No Asset Management Services ATTACHMENT(S): INFORMATION CONTACT: 1) Site Illustration Nancy Coston, 919 245 2800 2) Proposed Lease Modification Sharron Hinton, 919 245 2800 Jeff Thompson, 919 245-2658 PURPOSE: To: 1. Approve a proposal to amend the Hillsborough Commons Lease to include the recently vacated space adjacent to the Department of Social Services ("DSS") in Hillsborough for the purpose of expanding employment and training efforts in northern Orange County; 2. Authorize the Manager to execute the Lease Amendment upon County Attorney approval during the Winter break; and 3. Authorize the DSS Director to budget unanticipated revenue received in this fiscal year for any costs related to the lease and occupancy of the space. BACKGROUND: Recently the space adjacent to the DSS at Hillsborough Commons was vacated by the Dollar Tree and is available for lease (Note Attachment 1, "Site Illustration"). This 10,116 square foot space is part of the building occupied by DSS and shares common walls, loading docks and sprinkler systems. Since DSS occupied the Hillsborough Commons space through a lease arrangement in 2010, many changes have occurred. The caseloads for economic services such as Medicaid and Food and Nutrition Services have increased requiring additional staff resources and the agency has aggressively sought opportunities to address the employment and training needs of people residing in Orange County. In the last three years, the agency has implemented the Workforce Investment Act (WIA) youth program, the Food and Nutrition Services Employment and Training program, and job clubs in addition to continuing the existing efforts through Work First. The new grants have resulted in additional funding of over $400,000 to assist with training and job placement activities. As staff recently shared with the Board, the agency has been successful in helping approximately 400 people enter employment (including part time and seasonal). 4 Although many individuals receive comprehensive services at the Skills Development Center in Chapel Hill, there have been fewer opportunities in the northern part of the County and transportation between Hillsborough and Chapel Hill can be challenging for participants. There currently is a small resource room at DSS that is utilized by individuals to complete resumes and job searches and there are two classrooms, primarily used by Work First participants. As DSS has become more involved with employers, there have been competing groups asking to use the offices and meeting rooms in the public access area at DSS. For example, one business has hired persons through DSS and uses space at DSS to access families needing free or reduced cost phones. Another temporary agency has used DSS space to meet potential employees and conducted interviews on site. The agency has also sponsored job fairs utilizing all the space in the public area. At times these programs are competing with other nonprofits and service agencies trying to use space at DSS to allow clients easy access to their services. By providing additional space for employment activities, DSS can offer to partner with more employers and assist more unemployed or underemployed individuals without impacting other services for clients. A small space within the DSS has been designated for youth involved in the WIA program. However, the space is in the back of the building, creating some access barriers for the youth. DSS proposes using some of the adjacent space to allow a larger, more accessible space for youth to utilize when involved in agency efforts to increase their education and employment potential. In addition, DSS would also like to work with some of the youth and possibly other employment participants on entrepreneurial and business activities to enhance their skills. Since the Dollar Tree was providing a place for staff and visitors to purchase drinks and snacks, the agency would like to develop a canteen and support this activity for the participants as a way to understand business operations and to help them develop skills in managing small businesses. This has been used in other communities as a successful training program and resume-building activity for youth and others needing employment. Having such an activity located next to DSS allows for staff support and a targeted audience for their service. DSS has become increasingly focused on employment activities for all clients or persons accessing the agency. By increasing wages for families, DSS hopes to increase their ability to meet more of their own needs, thus needing fewer public services. By acquiring this space, DSS can continue to expand this effort, seek more employment grants (such as ones to serve Veterans) and provide services to the northern part of the County. Due to the enhanced rate for Medicaid administrative costs of 75% and the realignment of staff to the Medicaid program, DSS anticipates receiving over $500,000 in unanticipated revenue for economic services overhead this year, thus freeing up funds for other uses. Although some of this may be needed for child care, there should still be sufficient County funds to cover any costs for this year, including one-time expenditures to prepare the space for use. The Board may recall that the Space Study Workgroup is working diligently on the County's space assessment and needs in preparation for a report to the Board in the spring of 2015, coordinated with the Capital Investment Planning process. This Lease amendment reflects a short duration, one year Lease term so that the Workgroup can fully analyze the short and long- 5 term Social Services needs and make recommendations to the Board without losing this space opportunity and the services it may support. FINANCIAL IMPACT: The terms of the Lease Amendment mirror the terms of the existing Hillsborough Commons lease (see Attachment 2, "Proposed Lease Modification"). The Additional lease cost would be $127,462, or $12.60 per square foot. In addition to the lease cost, the County would be responsible for utilities, maintenance, real estate taxes, and insurance. Currently DSS is able to receive at least 50% administrative reimbursement on these costs and anticipates that the net cost to the County for the lease and utilities for the space would be less than $70,000 annually. For Fiscal Year 2014-2015, this cost is anticipated to be less than $35,000, which would be funded through already budgeted County funds and anticipated Federal reimbursements. Other one-time costs to equip the space would also be funded through already budgeted County funds and anticipated Federal reimbursements. RECOMMENDATION(S): The Manager recommends that the Board: 1. Approve a proposal to amend the Hillsborough Commons Lease to include the recently vacated space adjacent to the Department of Social Services ("DSS") in Hillsborough for the purpose of expanding employment and training efforts in northern Orange County; 2. Authorize the Manager to execute the Lease Amendment upon County Attorney approval during the Winter break; and 3. Authorize the DSS Director to budget unanticipated revenue received in this fiscal year for any costs related to the lease and occupancy of the space. Attachment 1 6 86 R ,� Town of •,g_ _ Hillsborough AN � t N- 00 Available Space r d Department of Social Services + ��► *A �► gas A ,;.J� / Attachment 2 7 LEASE MODIFICATION THIS MODIFICATION OF LEASE made and entered into this day of , 20 by and between HILLSBOROUGH COMMONS, LLLP as Landlord, and ORANGE COUNTY, NORTH CAROLINA, Tenant; WITNESSETH: Whereas Landlord and Tenant entered into that certain Lease Agreement dated July 25, 2008, in connection with certain premises situated and being in Orange County and the State of North Carolina being more particularly described in said Lease Agreement; and Whereas, Tenant's current leased space, Unit 01 has 56,328 square feet ("Current Space"); and Whereas, Tenant desires to expand into the adjacent location, Unit 03 containing 10,116 square feet ("Expansion Space") for one (1)year; and Whereas, Landlord and Tenant desires to amend said Lease Agreement to increase the size of Tenant's space. Now, therefore, for and in consideration of the sum of$1.00 and other good and valuable consideration each to the other paid the receipt and sufficiency of which consideration is hereby acknowledged, the parties hereto hereby agree as follows: 1. Tenant shall expand into the Expansion Space as shown on Exhibit A, attached hereto. 2. Tenant's Lease of Unit 03 the Expansion Space, shall commence on January 1, 2015, and expire on December 31, 2015, a term of one (1)year. 3. Tenant's Minimum Rent for the Expansion Space shall be: $127,462 annually; $10,622 per month. 4. In addition, Tenant shall pay the Real Estate taxes for the Expansion Space. Should the Expansion Space not be taxed as a separate parcel, Tenant shall pay Tenant's pro rata share of the Real Estate Taxes prorated as a ratio of the buildings included in the tax bill. 5. Tenant hereby acknowledges the Demised Premises has been previously occupied by another Tenant and as a material consideration to this Lease, Tenant shall accept possession of the Demised Premises, in an "as is" condition. Landlord shall have no obligation to perform or cause the LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 1 8 performance of construction of any improvements to the Demised Premises prior to delivery thereof to Tenant. Tenant hereby acknowledges that Landlord has made no representations or warranties to Tenant with respect to the condition of the Demised Premises or the working order of any systems or improvements therein existing as of the date of delivery 6. Notwithstanding 5. hereinabove, Landlord shall deliver the Expansion Space with the Electrical and HVAC systems in good working order. 7. In all other respects said Lease Agreement shall remain in full force and effect unchanged and shall not be altered in any way by this modification. IN WITNESS WHEREOF, the parties hereto have executed this Modification of Lease the day and year first above written. Signed, sealed and delivered HILLSBOROUGH COMMONS LLLP in the presence of: BY: HILLSBOROUGH SHOPPING CENTER, INC., GENERAL PARTNER By: Marc L. Hagle, CEO ORANGE COUNTY, NORTH CAROLINA Print Name LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 2 9 EXHIBIT A a�rr;t coUrtr � GOVIANWEHr Ot e NOT mcwo o oil LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 3 ATTACHMENT 2 10 LEASE MODIFICATION THIS MODIFICATION OF LEASE made and entered into this day of , 20 by and between HILLSBOROUGH COMMONS, LLLP as Landlord, and ORANGE COUNTY, NORTH CAROLINA, Tenant; WITNESSETH: Whereas Landlord and Tenant entered into that certain Lease Agreement dated July 25, 2008, modified January 12, 2015 in connection with certain premises situated and being in Orange County and the State of North Carolina being more particularly described in said Lease Agreement; and Whereas, Tenant's has leased Unit 01 containing 56,328 square feet ("Original Space") which Lease Agreement had a commencement date of October 22, 2008 and has an expiration date of January 21, 2019, subject to four (4) renewal option of five (5) years each, with rent escalations at the beginning of each such renewal option; and Whereas, Tenant has also leased the adjacent location, Unit 03 containing 10,116 square feet ("Expansion Space") which Lease Agreement had a commencement date of January 13, 2015 and an expiration date of December 31, 2015; and Whereas, Tenant desires to modify the Expansion Space expiration date and add renewal options and rent escalations to be concurrent with the terms of the Original Space Lease Agreement; and Whereas, Tenant and Landlord have agreed upon the terms of the modification and wish to so modify the Lease. Now, therefore, for and in consideration of the sum of$1.00 and other good and valuable consideration each to the other paid the receipt and sufficiency of which consideration is hereby acknowledged, the parties hereto hereby agree as follows: 1. The Original Space and the Expansion Space shall be combined to create a single set of Lease terms ("Combined Space"). 2. The expiration date of the Combined Space shall be January 21, 2019. 2. Tenant shall have four (4) renewal options of five (5) years each for the Combined Space. 3. The Base Rent for the Combined Space for each renewal option shall be as follows: Renewal option one(1) January 22, 2019 —January 21, 2024 Monthly: $71,705 Annual: $860,460 11 Renewal option two (2) January 22, 2024 —January 21, 2029 Monthly: $77,740 Annual: $932,880 Renewal option three (3) January 22, 2029 —January 21, 2034 Monthly: $84,385 Annual: $1,012,620 Renewal option four(4) January 22, 2034—January 21, 2039 Monthly: $91,694 Annual: $1,100,328 LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 2 12 4. In all other respects said Lease Agreement shall remain in full force and effect unchanged and shall not be altered in any way by this modification. IN WITNESS WHEREOF, the parties hereto have executed this Modification of Lease the day and year first above written. Signed, sealed and delivered HILLSBOROUGH COMMONS LLLP in the presence of: BY: HILLSBOROUGH SHOPPING CENTER, INC., GENERAL PARTNER By: Marc L. Hagle, CEO ORANGE COUNTY, NORTH CAROLINA Print Name LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 3 13 EXHIBIT A OmNa UUw7 c ww(Mr U ref' f WT i4Cwxo OUIPAWL W LEASE MODIFICATION—HILLSBOROUGH COMMONS ORANGE COUNTY 4 14 ATTACHMENT 3 43. OPTION TO PURCHASE Landlord does hereby grant to County the option (the "Option") to purchase all or a portion of that certain parcel of real estate upon which the build1 ng containing the Leased Premises is located, and being all of Orange County PIN Number 9864-80-7829, and TMBL # 4.40.A.1A, less an approximately one acre parcel to be retained by Landlord, as more fully described by metes and bounds description on Exhibit A attached hereto and incorporated herein by this reference (the "Shopping Center") upon the terms and provisions set forth herein. All references to Shopping Center in the Section 43 shall mean that PortioF exercised. 1 . Option Period. The Option commences on the date of this Lease and continues until the e�Ter c9f-termination of this Lease Q_r FtBbr,lard 1 :201:2. Such period of time is hereinafter referred to as the "Option Period." If the Option is exercised on or before February 1 , 2012 it is for the purpose herein the "First Option Period," and there after "Option Period." 2. Exercise of Option. At any time during the Option Period, County may exercise the Option to purchase the Shopping Center by giving written not1ce to Landlord in accordance with the terms of this Lease stating that County is exercising the Option by giving such notice. Such notice of exercise shall be effective on the date not1 ce is deemed to be given under the terms of this Lease. 3. Failure to Exercise Option. If County fails to exercise the Option within the Option Period, this Agreement shall automatically terminate; the parties shall have no further obligations or liabilities to one another hereunder; and County shall have no right whatsoever to purchase the Shopping Center or any portion thereof or interest therein. Time is of the essence with respect to exercise of the Option and with respect to each and every term of this Lease regarding the Option and purchase and sale of the Shopping Center. 4. Purchase Price. During the First Option Period, tT-he purchase price (the "Purchase Price") for the Shopping Center shall be Fifteen Million Four Hundred Eighty-Nine Thousand and No/100 Dollars ($15,489,000.00) payable at Closing, less a credit calculated as follows: If, and only if, "Closing" (as defined below) occurs on or before the last day of the First Option Period (i.e., February 1 , 2012), County shall receive a credit of Fifteen Thousand and no/100's Dollars ($15,000.00), multiplied by the number of monthly installments of rent paid by County to Landlord under the terms of the Lease during the Option Period, beginning on the Effective Date and ending on the date of Closing. Such credit shall be prorated for the month in which Closing occurs. If the Closing occurs after the First Option Period, County shall not be entitled to any such credit. If the County exercises the Option after the expiration of the First Option Period, the Purchase Price shall be as agreed between County and Landlord. If the parties cannot reach agreement on the Purchase Price, the 15 Option shall not be considered exercised but the Counties right to again exercise the Option during the remaining term of this Lease shall remain. 5. Closing. If County exercises the Option, and the p a r t i e s agree on the Purchase Price , County and Landlord shall close on the Shopping Center within thirty (30) days after the date County exercises the Option (the "Closing"), but no later than MaFGh 1 , 2012 the end of the Term of the Lease, at the offices of County's counsel or closing agent in Orange County, North Carolina, or at such other place as the parties may agree upon in writing. At Closing, County shall pay to Landlord the Purchase Price less any adjustments as provided herein in the form of cash or wire transfer to one or more bank accounts designated by Landlord, and contemporaneously Landlord shall deliver to County (a) the Deed (as defined in Paragraph 7 of this Exhibit); (b) an affidavit for the benefit of County and its title insurer (the "Affidavit"), stating that (i) no right to a mechanic's or materialman's lien has accrued with respect to the Shopping Center as a result of any act by Landlord and (ii) there are no outstanding leases or agreements with regard to, or other parties in or entitled to possession of, the Shopping Center, except those leases (the "Shopping Center Leases") listed on a current rent roll furnished by Landlord; (c) a Certificate of Non- Foreign Status as required by Section 1445 of the Internal Revenue Code; and (d) a settlement or closing statement. At Closing, Landlord and County shall execute an assignment and assumption agreement whereby Landlord will assign the Shopping Center Leases to County, and County shall agree to assume all obligations of Landlord under the Shopping Center Leases effective as of the date of Closing. As a condition precedent to the County's obligation in this Subsection 43(5), Landlord shall furnish certificates to County no less than fifteen days prior to the Closing from each Tenant under each Shopping Center Lease stating the following information: (i) that this Lease constitutes the entire agreement between Landlord and the tenant and is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications); (ii) the dates to which the Minimum Rent, and other charges there under have been paid, and the amount of any security deposited with Landlord; (iii) that the leased premises have been completed on or before the date of such letter and that all conditions precedent to this Lease taking effect have been carried out; (iv) that tenant has accepted possession, that the Lease Term has commenced, that tenant is occupy1 ng the leased premises, that tenant knows of no default under the Lease by Landlord and that there are no defaults or offsets which tenant has against enforcement of the Lease by Landlord; (v) the Rent Commencement Date of this Lease and the expiration date of this Lease; and (vi) that tenant's office is open for business, provided such facts are true and ascertainable. 6. Possession. Exclusive possession of the Shopping Center shall be delivered to County at Closing, subject to the Shopping Center Leases. 16 7. Deed. At Closing, Landlord shall deliver to County a special warranty deed (the "Deed") conveying to County fee simple title to the Shopping Center, subject to (i) the lien for real estate taxes not yet due and payable; (i1) all easements, covenants, conditions, restrictions and other matters as appear of record; (iii) the Shopping Center Leases; and (iv) the reserved easements described in Paragraph 17 below. 8. Closina Adjustments. Ad valorem taxes on the Shopping Center, if any, for the calendar year in which the closing occurs shall be paid by Landlord.The credit for pro-rated ad valorem taxes on the Property that would be due Seller if Buyer were not a North Carolina local government shall be added to the purchase price for the fee simple interest m the Property. Landlord shall pay any Orange County ad valorem taxes on personal property of Landlord for the entire year of the closing. Seller shall pay all ad valorem taxes on the Shopping Center for calendar years prior to the calendar year in which the closing occurs and all deferred taxes and any tax penalties including late listing penalties. All rents under the Shopping Center Leases and all utilities shall be prorated at Closing. Landlord shall pay the costs of preparing the Deed. Tenant shall pay all and any excise tax on the Deed. and all costs and expenses incurred in connection with its examination of title to the Shopping Center, including all premiums charged by County's title insurance company. Each party shall pay its own legal, accounting and other expenses incurred in connection with the Option or Closing hereunder. 9. Condemnation. If, after exercise of the Option and prior to Closing, any taking pursuant to the power of eminent domain is proposed or occurs, as to all or any portion of the Shopping Center, or a sale occurs in lieu thereof, County shall be entitled to elect either to (i) terminate its agreement to purchase the Shopping Center by giving Landlord notice of such termination within fifteen (15) days after County receives written notice of such occurrence, or (ii) proceed with Closing, in which event all proceeds, awards and other payments arising from any such taking or sale shall be paid to County, with no adjustment of the Purchase Price. 10..Default. If County fails to close on that date required in Paragraph 5 above after exercise of the Option, then Landlord shall be entitled to exercise any and all remedies available to it at law or in equity for breach of a contract to purchase real estate. In the event of default by Landlord, Buyer shall be entitled, as Buyer's sole and exclusive remedy, either to: (a) terminate it agreement to purchase the Shopping Center upon written notice to Landlord, or (b) demand and compel by an action for specific performance or similar legal proceedings, if necessary, the immediate conveyance of the Shopping Center by Landlord in compliance with the terms and conditions set forth on this Exhibit. 17 11 .Costs of Litiaation. In the event of litigation between County and Landlord arising out of the Option, each party shall pay its own costs and attorneys' fees. 12. Agents and Brokers. Each party hereunder represents and warrants that it did not consult or deal with any broker or agent, real estate or otherwise, with regard to the purchase and sale of the Shopping Center, and each party hereto agrees to indemnify and hold harmless the other party from all liability, expense, loss, cost or damage, including reasonable attorneys' fees, that may arise by reason of any cla1 m, demand or suit of any agent or broker arising out of facts constituting a breach of the foregoing representations and warranties. 13. Entire Aareement: Modification. This Exhibit contains the entire agreement between the parties hereto relating to the Option and the purchase and sale of the Shopping Center, and supersedes all prior and contemporaneous negotiations, understandings and agreements, written or oral, between the part1 es hereto. 14. Assignment. County shall have no right to assign the Option without the prior express written approval of Landlord, which approval may be grantee or denied by Landlord in its sole and absolute discretion. 15.Time of the Essence. The parties agree that time is of the essence with respect to the performance of all obligations, the exercise of the Option and all other time or deadline related matters herein. 16. Memorandum of Aareement. Landlord agrees that, at the request of County, Landlord will promptly execute and deliver a memorandum of the Option in recordable form sufficient to provide record notice of the Option, and County shall be entitled to record such memorandum in the Orange County Register of Deeds, at County's sole cost and expense. If County makes such a request to Landlord, County will, at that time, deliver to Landlord's counsel, to be held in escrow by such counsel, an executed Release, in form satisfactory for recordation in the Orange County Register of Deeds, releasing such memorandum from record in the event that County fails to timely exercise the Option or the Option otherwise terminates. Landlord's counsel may release the escrowed Release document, or record it in the Orange County Register of Deeds, in the event of such termination or non-exercise. 17. Easements. At Closing, Landlord may, subject to the review and approval of the County which approval shall not be unreasonably withheld, reserve easements for ingress and egress over the Shopping Center . to provide access by pedestrian and vehicular traffic over all drive aisles, entrances, exits, and curb cuts, and for installation and operation of utilities over the Shopping Center at locations reasonably 18 acceptable to the owner of the Shopping Center, for the benefit of Landlord's one acre retained parcel, as shown on Exhibit A attached hereto. 18. Disclaimer. County acknowledges and agrees that Landlord has not made, does not make, and will not make, and specifically negates and disclaims, any representations, warranties (other than the warranty of title as set out in the Deed), promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present, or future, of, as to, concerning or with respect to (a) the value, nature, quality or condition of the Shopping Center, including, without limitation, the water, soil and geology, (b) the income to be derived from the Shopping Center, (c) the suitability of the Shopping Center for any and all activities and uses which County may conduct thereon, (d) the compliance of or by the Shopping Center or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body, (e) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Shopping Center, (f) the manner or quality of the construction or materials, if any, incorporated 'Into the Shopping Center, (g) the manner, quality, state of repair or lack of repair of the Shopping Center, or (h) any other matter with respect to the Shopping Center, and specifically, that Landlord has not made, does not make and specifically disclaims any representations regarding compliance with any environmental protection, pollution or land use laws, rules, regulations, orders or requirements, Including the existence in or on the property of hazardous materials (as defined below). County further acknowledges and agrees that having been given the opportunity to inspect the Shopping Center, County is and will be relying solely on its own investigation of the Shopping Center and not on any information provided or to be provided by Landlord and at the Closing agrees to accept the Shopping Center and waive all objections or claims against Landlord (including, but not limited to, any right or claim of contribution) arising from or related to the property or to any hazardous materials on the Shopping Center. Landlord is not liable or bound in any manner by any verbal or written statements, representations or information pertaining to the property, or the operation thereof, furnished by any real estate broker, agent, employee, servant or other person. County further acknowledges and agrees that to the maximum extent permitted by law, the sale of the Shopping Center as provided for herein is made on an "as is" condition and basis with all faults. 19.Landlord represents and warrants, as of the date of this Lease Agreement, that it has not granted any other entity an option to purchase the Shopping Center other than County, nor has Landlord entered into a purchase agreement or any other agreement or arrangement whatsoever that would prohibit Landlord from selling the Shopping Center to County. 20. If County exercise the Option, then Landlord shall obtain any and all 19 required regulatory approvals and permits (including but not limited to special use permits, modifications of existing special use permits, subdivision approval and zoning approval) from the applicable authority prior to the Closing in order to effectuate the sale contemplated by the Option and in order to legally subdivide Outparcel A from the Shopping Center, The procurement of said approvals and permits shall be at the sole cost and expense of Landlord and shall be a prerequisite to County's Closing obligation contained with Subsection 43(5) above of this Lease. 21 . Landlord hereby grants to County a right of entry upon the shopping center for the purpose of making surveys, engineering studies, tests and such other investigations and inspections as County may elect to make, or the period of time beginning on December 1 , 2011 and ending on rebF iaFy I , '201=the expiration of the Lease. Notwithstanding, should County be desirous of exercising their Purchase Option prior to FebF aFy 1 , 2012the expiration of the Lease, then in that event, County shall be entitled to complete all due diligence during the period beginning ninety (90) days prior to such exercise date and ending on the date of such exercise. All inspections, tests and examinations shall be conducted by parties qualified and, where applicable, licensed to conduct such inspections, tests and/or examinations. County shall pay the costs of all such tests, inspections, examinations, and investigations. After the performance of any tests, inspections, examinations, and investigations, county shall promptly restore any damage to the shopping center to substantially the same condition as existed prior to the conduct of said tests, inspections, examinations, and investigations. County shall indemnify, (to the extent of insurance policies owned by the County and to the extent of applicable law) defend (to the extent of insurance policies owned by the County and to the extent of applicable law) and hold Landlord harmless from any and all costs or liens arising or claimed as a result of any such activity on or with respect to the shopping center and from any claims, loss or damage (including, without limitation, reasonable attorneys fees and costs) suffered by Landlord as a result of the activities of County or of any party employed or engaged by County to perform any test, inspection, examination, or Investigation on the shopping center. In conducting its investigation, County and County's agents shall conduct all operations on the shopping center in a reasonable manner and so as not to unreasonably interfere with the operation of the shopping center by Landlord nor with the conduct of business or operations by tenants and occupants. Furthermore, all such tests and inspections shall be permitted upon reasonable prior notice to Landlord, affording landlord the opportunity to have a representative present at any test, inspection or examination conducted on the shopping center. County shall not conduct any environmental testing of the shopping center beyond a phase I environmental site assessment without the prior written approval of Landlord. County shall not perform any subsurface or destructive testing of any kind at the shopping center, without the 20 prior written consent of Landlord. If such testing is required, county shall provide reasonable notice thereof. Notwithstanding the foregoing, or anything to the contrary contained in this Lease, County and/or County's representatives shall not enter the shopping center for the purposes of performing any inspections without providing Landlord at least twenty-four (24) hour notice of such scheduled entry upon the shopping center. 22.On or before February 1 , 2012, Landlord agrees not to enter into a Lease for any portion of the Shopping Center whatsoever during the term of this Lease which will result in a lease term that extends beyond March 1 , 2012 without the prior approval of the County, which approval shall not be unreasonably withheld. 23. Landlord represents and warrants that there are no current leases applicable to the Shopping Center that extend beyond February 1 , 2012, except and other than units 03, B-04, and Kiosk spaces. 24. At closing Landlord shall provide County estoppel certificates from all tenants then occupying the Shopp1 ng Center.