COMMISSIONERS' COURT AGENDA REQUEST
PLEASE F[JRNISH ONE ORIGINAL AND NINE COPIES OF THIS R.EOUEST AND DOCUMENTS TO BE
REVIEWED BY THE COURT.
\ D.!"
MADE I~I;; Jonathan Letz OFFICE: Commissioners' Court
MEETIr1G ATE: October 28, 2002 TIME PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Consider and discuss review and approval of agreement with the Texas Arts and Crafts Foundation.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Commissioner Pct. #3
Meeting scheduled for Mondays: 5:00 P.M. previous Tuesday.
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towards you request being addressed at the eazliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
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LEASE
Terms
Date:
Landlord:
Landlord's Address:
Tenant:
2002
KERR COUNTY TEXAS
Kerr County Courthouse
Kerrville, Texaz 78028
TEXAS ARTS .ANA CRAF'T'S EbUCATTONAL
FOUNDATION, INC., a Texas non-profit corporation
Tenant's Address: P. O. Box 291527
Kerrville, Texas 78029
~~ ;" ~
Premises: Approximately six' (6) acres of land fronting on State
highway No, 27 and adjoining the Kerr County Agricultural
Facility, said property being more specifically located in the
plat attached hereto az EXIlIBIT "A"
Rent:
Tenant agrees to pay Landlord as minimum rental the sum of $1.00 per year for the term of
this Lease. These payments shall constitute the minimum annual rental and be supplemented
by additional annual payments as provided below:
a In addition to the minimum annual rental set out above, Tenant agrees to pay to
Landlord at the time and in the manner specified an additional rental in an amount
equal to twenty-five per cent (25%) of the net profits derived by Tenant from the
operation of the Premises.
b. The term `het profits" as used in this lease shall mean the gross receipts derived from
Tenant's operation of the Premises adjusted as follows:
(1) Less operating expenses and obligations, including, but not limited to, wages,
salaries, maintenance, repair, replacements, advellising,insurance and other
items az required by sound and conservative accounting practices.
(2) Less the costs of capital improvements constructed on the Premises by
Tenant.
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(3) Plus the costs of County maintenance on the Premises as hereinafter
provided.
(c) Tenant shall keep full, complete, andproperbooks, records and accounts ofTenant's
operations on the Premises and said books, records, and accounts shall at all
reasonable times be open to the inspection of Landlord, Landlord's auditor, or other
authori2ed representative or agent.
(d) Rent is due and payable annually on or before the expiration of thirty (30) days from
each anniversary date of the Lease during the term.
(e) At the same time each annual payment of rant is made by tenant to Landlord, Tenant
shall famish to Landlord a statement, certified to be correct by Tenant, that sets forth
all information that is necessary to verify the additional rental that is payable to
Landlord for the prior one year period plus any plans for future activities and
improvements.
Term (years): Forty (40) years
Commencement Date:
Termination Date:
2002
2042
Use: The Premises will be maintained for public use. In keeping
with this general purpose, the Premises will be the site for the
official Texas State Arts and Crafts Fair and a year round
event park to attract, promote, and encourage commerce
tbrough tourism and related business.
Amount of Liability Insurance
Death bodily injury: $500,000
Property: $500,000
Aeiinitions
"Landlord" means Landlord and its agents, employees, invitees, licensees, or visitors.
"Tenant" means Tenant and its agents, employees, invitees, licensees, or visitors.
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"Essential Services" means utility connections reasonably necessary for occupancy of the
Premises for the Use.
Ctanses and Covenants
A. Tenant agrees to -
1. Lease the Premises for the entire Term beginning on the Commencement Date and
ending on the Termination Date.
2. Accept the Premises in their present condition "AS IS," the Premises being currently
suitable for Tenant's intended Use.
3. Obey all laws, ordinances, orders, and rules and regulations applicable to the use,
condition, and occupancy of the Premises.
4. Pay the rent to Landlord as herein provided.
5. Obtain and pay for all utility services used by Tenant.
6. Allow Landlord to enterthe Premises to perform Landlord's obligations and to inspect
the Premises.
7. Repair, replace, and maintain the Premises.
8. Repair any damage to the Premises caused by Tenant.
9. Maintain public liability insurance for the Premises and the conduct of Tenant's
business, naming Landlord as an additional insured, in the amounts stated in the lease.
10. Deliver certificates of insurance to Landlord before the Commencement Date and
thereafter when requested.
l l . ludemuify, defend, and hold Laudlord harmless from any loss, attorney's fees, court
and other costs, or claims arising out of use of the Premises.
12. To operate the Premises in an efficient and reputable manner.
13. Vacate the Premises on termination of this lease unless renewed and extended by
agreement ofthe parties.
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B. Tenant agrees not to -
1. Use the Premises for any purpose other than that stated in the lease.
2. Create a nuisance.
3. Interfere with Landlord's operations on the adjoining County Agricultural Facility.
4. Permit any waste.
5. Alter the Premises without the prior written consent of Landlord.
6. Allow a lien to be placed on the Premises.
7. Assign this lease or sublease any portion of the Premises without Landlord's written
consent.
C. Landlord agrees to -
1. Lease to Tenant the Premises for the entire Teem beginning on the Commencement
Date and ending on the Temtination Date.
2. Allow Tenant's guests, inritees and visitors to use Flat Rock Lake Park for parking
during evarts on the Premises and allow overflow parking on the adjoining County Agricultural
Facility when such use will not interfere with any function that might be taking place at said facility.
D. Landlord agrees not to -
Interfere with Tenant's possession of the Premises as long as Tenant is not in default
E. Landlord and Tenant agree to the following:
1. Alterations. Any permanent physical additions or impmvemarts to the Premises
made by Tenant will became the property of Landlord. Landlord may require that Tenant, at
termination of this lease and at Tenant's expense, remove any moveable physical additions and
improvements.
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2, Maintenance. It is contemplated by the parties hereto that Landlord may mow the
Premises grounds as well as provide other maintenance to the Premises. In this event, Landlord will
bill Tenant for these services at a rate that is mutually acceptable to each party and Tenant will pay
this expense to Landlord annually as provided in the "Rent" provisions of this Louse.
3. Abatement. Tenant's covenant to pay Rent and Landlord's covenants are independent.
Except as otherwise provided, Tenant will not be entitled to abate Rent for any reason.
4. Release of Claims/Subrogation. Landlord and Tenant release each other from any
claim, by subrogaiian or otherwise, for any damage to the Premises by reason of fire orthe elements,
regardless of cause, including negligence of Landlord or Tenant. This release applies only to the
extort that it is permitted by law, the damage is covered by insurance proceeds, and the release does
not adversely affect any ins~uance coverage.
5. Condemnation/Substantial or Partial Taking
a If the Premises cannot be used for thepurposes contemplated by this lease
because of condemnation or purchase in lieu of condemnation, this lease will
terminate.
b. Tenant will have no claim to the condemnation award or proceeds in lieu of
condemnation.
6. Construction ofNewlmprovements.ItisanticipatedtbatTeoantwill,atTenant'ssole
cost, construct new improvements on the Premises. Tenant agrees that it will construct no new
improvements until Tenant has presentedphms for said improvements to Landlord and Landlord has
approved of such construction. Landlord will not unreasonably withhold approval.
7. Default by Landlord/Events. Defaults by Landlord are failing to comply with any
provision of this lease within thirty days after written notice.
8. AefaultbyLandlord/Tenant'sRemedies. Tenant's remedies for Landlord'sdefaultare
to terminate this lease,
9. Default by Tenant/Events. Defaults by Tenant are (a) failing to pay timely Rent, (b)
abandoning or vacating a substantial portion of the Premises, and (c) failing to couaply within thirty
(30) days after written notice with any provision of this lease other than the defaults set forth in (a)
and (b) above.
10. DefaulibyTenant/Landlord'sRemedies. Landlord'sremediesforTenant'sdefaultare
to terminate this lease by written notice.
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11. Defaalt/Waiver/Mitigation. It is not a waiver of default if the nondefaulting party
fails to declare immediately a default or delays in taking any action. Pursuit of any remedies set
forth in this lease does not preclude pursuit of other remedies iu this lease or provided by law.
Landlord and Tenant have a duty to mitigate damages.
12. Holdover. IfTenant does not vacate the Premises following termination ofthis lease,
Tenant will become a tenant at will and must vacate the premises on receipt of notice from Landlord.
No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term.
13. Alternative Dispute Resolution. Landlord and Tenant agree w mediate in good faith
before filing a suit for damages.
14. Attorney's Pees. If either party retains as attorney to enforoe this lease, the party
prevailing in litigation is entitled to recover reasonable attorney's fees and count and other costs.
15. Venue. Venue is in the county in which the Premises are located.
16. Entire Agreement. This lease, together with the attached exhibits and riders, is the
entire agreement of the parties, and there are no oral representations, warranties, agreements, or
promises pertaining to this lease or to any expressly mentioned exhibits and riders not incorporated
in writing in this lease.
17. Amendment of Lease. This lease maybe amended only by an instrument in writing
signed by Landlord and Tenant.
18. Limitation of Warranties. THERE ARE NO IMPLIED WARRANTIES OF
MF.RCIiANTA$I .ITV, OF FITNESS FORAPARTICULARPUR.POSE, OR OF ANY OTHER
KIND ARISING OUT OF THIS LEASE, AND THERE ARENO WARRANTTRG THAT EXTEND
BEYOND THOSE EXPRESSLY STATED IN THIS LEASE,
19. Notices, Any notice required or pemtitted under this lease must be is writing. Any
notice required by this lease will be deemed to be delivered (whether actually received or not) when
deposited with the United States Postal Service, postage prepaid, certified mail, return receipt
requested, and addressed to the intended recipient at the address shown in this lease. Notice may
also be given by regular mail, personal delivery, courier delivezy, facsimile transmission, or other
commerciallyreasonablemeans andwillbe effectivewhenaatuallyreceived. Any address fornotice
may be changed by written notice delivered as provided herein.
20. Abandoned Property. Landlord may retain, destroy, or dispose of any property left
on the Premises at the end of the Term.
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21. Arbitration. Landlord and Tenant agree that, following mediation, al] unresolved
issues willberesolvedbybindingarbitration. Absent anagreementtouseotherrules,theazbitration
will be controlled by the American Arbitration Association's Commercial Arbitration Rules.
KERB COUNTY TEXAS
F'x2ED HENNEKE
Kerr County Judge
TEXAS ARTS AND CRAFTS EDUCATIO~lAI;.
FOUNAATYON
By:
R B. (BOB) I~ILLEFI
Executive Director
Memorandum
To: Commissioner Jonathan Letr
From: David Motley
Date: October 25, 2002
Subject: Review of proposed lease between Kerr County and the Texas Arts and Crafts
Educational Foundation, Inc.
I went through each sentence of the above-referenced lease and could comment about each
section of same, but that would be a waste of everyone's time in that we have a tremendous
hurdle to conquer first.
The problem is that the county may not lease property without using an auction with some
very limited exceptions. That is why I suggested a license agreement for the little league
fields and more recently, with the Saturday markets. The statute in question is § 263.001,
Local Government Code:
"VERNON'S TEXAS STATUTES AND CODES ANNOTATED
LOCAL GOVERNMENT CODE
TITLE 8. ACQUISITION, SALE, OR LEASE OF PROPERTY
SUBTITLE B. COUNTY ACQUISITION, SALE, OR LEASE OF PROPERTY
CHAPTER 263. SALE OR LEASE OF PROPERTY BY COUNTIES
SUBCHAPTER A. GENERAL PROVISIONS FOR REAL PROPERTY
Copr. © West Group 2002. All rights reserved.
Current through End of 2001 Regular Session.
§ 263.001. Sale or Lease of Real Properly
(a) The commissioners court of a county, by an order entered in its minutes, may appoint a
commissioner to sell or lease real properly owned by the county. The sale or lease must be
made at a public auction held in accordance with this section unless this chapter provides
otherwise.
(b) The appointed commissioner must publish notice of the auction before the 20th day
before the date the auction is held. The notice must be published in English in a newspaper in
the county in which the real property is located and in the county that owns the real property
if not the same county. The notice must be published once a week for three consecutive
weeks before the date the auction is held.
(c) If the real property is sold, a deed that is made on behalf of the county by the appointed
commissioner in conformance with the order entered under Subsection (a) and that is properly
acknowledged, proved, and recorded is sufficient to convey the county's interest in the
property. [emphasis added]"
The Texas Attorney General has stated such (@ M-799 [1971]): °...given the absence of
statutory authority, counties have no general authority to lease its property." There is no
statute of general applicability which governs the manner by which political subdivisions may
lease out publicly owned property. In fact, there is a great deal of authority for the
proposition that a lease of property by a county without a public auction (or without complying
with some statutory exception) is void.
Another Local Government Code provision (§ 263.007; Sale or Lease of Real Property Through
Sealed-Bid Procedure) allows a county to adopt a procedure where its property may be leased
by closed bid however, a prerequisite to such a procedure is that the property (or the interest
to be conveyed) must be appraised to determine its fair market value and that appraisal figure
must be set as the minimum bid.
The (joint county/municipality) management of any park, historical museum, or historic or
prehistoric site acquired under Chapter 331 of the Texas Local Govemment Code may sell or
lease concessions or privileges for the establishment of amusements, stores, gasoline stations,
and other concerns consistent with the operation of a public park and the preservation of
noteworthy features of a historic or prehistoric site or historical museum. However, the
proceeds of the sales and leases may be used only for the improvement and operation of the
park, museum, or site, § 331.006, Local Government Code...again, not a match for the tease
herein contemplated.
The commissioners court of a county and the governing body of a municipality in that county
may jointly erect, acquire, equip, maintain, and operate a recreational or cultural facility, which
is defined as "...an auditorium, civic center, convention center, or exposition center," as per §§
301.001-301.008, Local Government Code. The lease contemplated here does not appear to
involve such a be associated with any sort of recreational or cultural facility at all.
The only way I have found for Kerr County and the Texas Arts and Crafts Educational
Foundation, Inc. to achieve the ends of the lease in question is for the Commissioners' Court
to form a County Parks Board under the authority of Chapter 320 of the Texas Local
Government Code. The Parks Board may be governed by either the Commissioners' Court or
by a Board of Park Commissioners created for the purpose of operating and controlling the
parks created by said Board. Specifically under the authority of § 320.044, Local Govemment
Code, the managing parks board may enter a contract, including a lease or other agreement,
with any person as the board considers necessary or convenient to carry out the purposes and
powers granted by Chapter 320. This solution will take a bit of time to arrange and create but
does not require a public petition or election, but instead the adoption of Chapter 320 by the
Commissioners' Court.
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