2022-06-13 STMA Arena Board Packet City of
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STMA ARENA BOARD AGENDA
MONDAY, JUNE 139 2022
ALBERTVILLE CITY HALL
6:00 PM
1) CALL TO ORDER—ROLL CALL
2) ADOPT AGENDA
3) APPROVAL OF THE MINUTES OF MAY 9, 2022 (pgs. 1-2)
4) FINANCE REPORTS
a) Approve the May list of claims as presented in the amount of$57,881.89 and May
report(pgs. 3-6)
5) ARENA MANAGER
a) Monthly report and Ice Usage Stats (pgs. 7-9)
6) OLD BUSINESS
7) NEW BUSINESS
a) Dryland Sublease—Motion to provide written consent to the sublease between STMA
YHA and Dark Horse Athletics, LLC (pgs. 10-17)
8) YOUTH HOCKEY ASSOCIATION
9) ADJOURN
ST. MICHAEL-ALBERTVILLE ICE ARENA BOARD MINUTES
May 9,2022
6:00 p.m.
Present: Chairman Larry Sorensen and members, Keith Wettschreck, Walter Hudson, Kari Dwinnell,
Ryan Gleason, Aaron Cocking and Tim Lewis. Also present: City Administrator Adam Nafstad, City
Finance Director Tina Lannes, STMA Arena Manager Grant Fitch, School/Ground Director Jason
Bichler, Megan Esterberg and Jack Rowan STMA Youth Hockey Association. The meeting was
called to order at 6:00 p.m. by Chairman Sorensen.
Set Agenda
Members Cocking/Dwinnell moved to set the agenda as presented. All voted aye.
2021 Audit Presentation—ABDO,Tyler See
Tyler See from ABDO presented the 2021 STMA Ice Arena Financial Statement Audit.
Members Dwinnell/Gleason moved to adopt the 2021 STMA Ice Arena report as presented. All voted
aye.
Approval of Minutes
Members Hudson/Gleason moved to approve the minutes of the April 11, 2022 Board Meeting as
presented. All voted aye.
Finance Reports
Lannes presented the finance reports.
Members Cocking/Lewis moved to approve the April list of claims totaling $33,449.98 and the April
Financial Report as presented. All voted aye.
Arena Manager's Report
Fitch informed the board that staff received an additional quote for the repair/replacement of the
Compressor showing that SCR is the low quote for replacement in the amount of$15,639.28. There
was discussion on the difference large difference between quotes and the warranty period.
Fitch reported that the usage for April was a little below the budgeted projection due to a high school
group returning thirty hours of ice time they we unable to use. In addition, Fitch, mentioned coming
up is a tournament and the summer camps including FIT that has booked two-hundred hours.
Members Cocking/Gleason moved to approve SCR quote in the amount of$15,639.28 to replace
refrigeration compressor. All voted aye.
New Business
Nafstad informed the board that STMA Youth Hockey Association is requesting an amended lease for
the dryland space to allow subleasing. During the discussion the issues of insurance, taxes and non-
profit status were addressed. STMA Youth Hockey has acquired an insurance provider for the off
season and taxes would not be a factor as with the non-profit status the sublease would not be for
profit. Megan Esterberg reported that the exchange of money for the sublease would not occur
because they are a non-profit there would be an exchange of services instead. There was discussion on
the value of the exchange services and what benefits could the Ice Arena itself see. There was mention
Agenda Page 1
STMA May 9,2022 Minutes
Page 2
by Youth Hockey Association members Megan Esterberg and Jack Rowan that the potential of
increase ice rental could occur if they are allowed to sublease to groups such as MAP, FIT and MEGA.
They also mentioned that there is a potential for growth and expansion with these groups for ice rental
if the dryland space was available for use. Fitch stated that FIT has two hundred hours reserved for
their program which has filled up already. Member Wettschreck asked how much STMA Youth
Hockey Association put into building out the space prior to equipment. Nafstad stated the amount was
around $350,000. The board continued discussion on the requested amendment to the lease agreement
which states that STMA Youth Hockey Association cannot sublease without the STMA Arena Boards
prior written consent. The STMA Arena Board questioned when, if approved, would they see the
signed agreement back from STMA Youth Hockey Association and how to hold off use of the space
until the signed agreement is returned to the City of Albertville. Megan Esterberg stated, if approved,
it would go to their board meeting this evening for approval and signature. Nafstad informed the board
that the City of Albertville will not approved a Certificate of Occupancy until the executed agreement
is returned to the City. Member Lewis asked if there was a way to limit the length of sublease if this
agreement is approved referencing the agreement if for ten years. Nafstad suggested adding language
to limit the sublet.
Members Hudson/Dwinnell moved to approve the requested amended lease agreement for the dryland
space with amended language to in effect limit STMA Youth Associations ability to sublet for no more
than one-year increments. All voted aye.
Nafstad presented the request of some users to use a small portion of the parking lot behind the arena
for dryland activities. Nafstad informed the board that there would be a general understanding for such
groups and activities with conditions and would require prior authorization for such uses. There was
discussion on location, uses and agreements to facilitate the requests for use of parking lot space.
The STMA Arena Board directed staff to prepare an agreement to allow the use of parking lot space
for organizations requesting the activities.
Adiourn
Members Sorenson/Cocking moved to adjourn at 7:16 p.m. All voted aye.
Attest:
Tina L. Lannes, City Finance Director
Agenda Page 2
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STMA Ice Arena Budget to Actual May 2022 (Cash Basis)
2022
2022 Actual YTD %
2022 Final May 2022 YTD of
STMA Arena Budget Actual 05/31/22 Budget
Income
Ice Rental $704,400.00 $23,919.00 $336,061.33 47.71%
Concessions $70,000.00 $4,255.25 $46,243.30 66.06%
Room Rental $0.00 $0.00 $0.00
Other Revenues(Advertising/LMC/Ins
Claims/ATM) $20,000.00 $0.00 $0.00 0.00%
Vending $1,500.00 $0.00 $1,173.30 78.22%
Open Skate/Hockey,etc. $6,000.00 $1,120.08 $5,349.08 89.15%
Interest $1,000.00 $0.00 $0.00 0.00%
Misc. Revenue $100.00 $0.00 $20.00
Total Income $803,000.00 $29,294.33 $388,847.01 48.42%
Expenses
Salaries,Wages,Taxes&Benefits $356,284.50 $15,388.74 $126,560.93 35.52%
Supplies(Office,Misc.) $1,500.00 $0.00 $13.39 0.89%
Supplies(Concession) $28,700.00 $1,592.70 $18,046.33 62.88%
Fuel,Misc. $500.00 $0.00 $220.18 44.04%
Professional Services $29,200.00 $8,028.06 $17,261.45 59.11%
Sales Tax $6,208.00 $547.34 $3,966.89 63.90%
Telephone $2,250.00 $172.73 $637.07 28.31%
Electric $134,000.00 $12,554.35 $45,827.85 34.20%
Gas $46,500.00 $6,377.07 $31,635.04 68.03%
Water $15,000.00 $57637 $3,541.82 23.61%
Refuse $2,750.00 $0.00 $1,532.03 55.71%
Insurance $23,000.00 $0.00 $0.00 0.00%
Education/Training $1,500.00 $0.00 $0.00 0.00%
Administration $14,227.04 $1,185.61 $5,927.95 41.67%
Misc. $6,900.00 $434.57 $2,363.57 34.25%
Repair Maintenance—Machinery $15,000.00 $1,798.42 $4,580.81 30.54%
Repair Maintenance—Building $40,000.00 $1,199.43 $24,951.21 62.38%
Total Operating Expenses $723,519.54 $68,367.39 $305,578.52 42.24%
Net Income/Loss $79,480.46 ($39,073.06) $83,268.49
Agenda Page 3
STMA ICE ARENA CASH BALANCES AND RECEIVABLES
May 31 , 2022
Cash Balance Operations
Est. Cash Balance Operations 1/1/22 $149,982
Add Revenues $388,847
Less Expenses $(305,579)
Est. Cash Balance Operations 05/31/22 $233,250
Accounts Receivable (invoiced)
Operations May 31, 2022 - $26,245
Cash Balance Dedicated Capital Improvement Fund
Arena Owner Dedicated Cap. Imp. Fund
Beginning Balance 1/1/22 $145,725
Invoiced St. Michael $15,000 $15,000
Invoiced ISD 885 $15,000 $15,000
Invoiced City of Albertville $15,000 $15,000
Balance 05/31/22 $190,725
Agenda Page 4
STMA Ice Arena Vendor Check Detail Register
May 2022
Check# Check Date Vendor Name Amount Invoice Comment
10899 a 05/02/22 MEDICA
E 810-00000-130 Employer Paid Ins $3,409.12 MAY 2022 Emp Health Ins
10905 a 05/02/22 ARAMARK-ARENA
E 810-00000-405 Repair/Maint -Buildings $39.61 2530001296 Arena mops,mats
10924 a 05/02/22 SCR,INC
E 810-00000-405 Repair/Maint -Buildings $1,813.00 W74880 refrig 2 maintenance for gold rink
E 810-00000-405 Repair/Maint -Buildings $605.00 W75162 install warranty valve
E 810-00000-405 Repair/Maint -Buildings $711.70 W75163 VFD tripped again
10950 a 05/03/22 SIGNAPAY
E 810-00000-300 Professional Srvs $158.06 MAY 2022 Arena cc fees
10953 a 05/16/22 ABDO
E 810-00000-301 Auditing and Acctg $7,750.00 457249 Arena Certified Audit 12/31/21
10954 a 05/16/22 ACE OF ALBERTVILLE
E 810-00000-405 Repair/Maint -Buildings $45.98 122260/1 mailbox rural
10957 a 05/16/22 ARAMARK-ARENA
E 810-00000-405 Repair/Maint -Buildings $39.61 2530001349 Arena mops,mats
10966 a 05/16/22 CTM SERVICES,INC
E 810-00000-404 Repair/Maint- $1,693.42 5362 control valve,gear shifter
10967 a 05/16/22 DAN DEHMER LANDSCAPING INC
E 810-00000-300 Professional Srvs $120.00 9864 partial plowing April
10975 a 05/16/22 GREAT LAKES COCA COLA DISTRIBUTION
E 810-00000-254 Soft Drinks/Mix For Resale $358.35 3597214909 Arena concessions
10981 a 05/16/22 MR CUTTING EDGE LLC
E 810-00000-404 Repair/Maint- $105.00 4570 scraper blade sharpen
10985 a 05/16/22 PREMIUM WATERS INC
E 810-00000-405 Repair/Maint -Buildings $30.89 APRIL 2022 Arena water delivery
10987 a 05/16/22 SCR,INC
E 810-00000-405 Repair/Maint -Buildings $147.45 W75276 compressor#1 VFD tripped due to power
10990 a 05/16/22 BLUUM OF MINNESOTA, LLC
E 810-00000-433 Dues and Subscriptions $375.00 868545 Arena REACH Annual Licensing 2022
10992 a 05/16/22 WATSON COMPANY,INC
E 810-00000-252 Food/Concessions For $1,221.40 124866 Arena Concessions
10994 a 05/16/22 WRIGHT HENNEPIN COOPERATIVE
E 810-00000-381 Electric Utilities $10.74 Arena Elevator Monitoring 5/31/22
Agenda Page 5
STMA Ice Arena Vendor Check Detail Register
May 2022
Check# Check Date Vendor Name Amount Invoice Comment
11011 a 05/17/22 CITY OF ALBERTVILLE
E 810-00000-382 Water Utilities $194.67 APRIL 2022 Arena Wtr Bill 04/19/22 87-00000310-00-5
E 810-00000-382 Water Utilities $381.70 APRIL 2022 Arena Wtr Bill 04/19/22 87-00000315-00-0
11031 a 05/19/22 MN DEPARTMENT OF REVENUE
E 810-00000-315 Sales Tax $546.34 MAY 2022 Arena Sales Tax
41649 05/02/22 MET LIFE LIFE INSURANCE
E 810-00000-130 Employer Paid Ins $405.09 MAY 2022 Emp Life,Dental,Std is,Vision
41662 05/16/22 CENTERPOINT ENERGY
E 810-00000-383 Gas Utilities $6,377.07 MAY 2022 5898 Lachman Ave 3/29/22-4/26/22
41669 05/16/22 LEAGUE OF MN CITIES INSURANCE TRUST
E 810-00000-360 Insurance(GENERAL) $18,512.00 Arena Property/Casualty#40003210 3/10/22-
3/10/23
41675 05/19/22 CHARTER COMMUNICATIONS
E 810-00000-321 Telephone $54.82 0131538043 Arena Cable 04/30/22-05/29/22
E 810-00000-321 Telephone $117.91 0131702051 Arena Voice 05/10/22-06/09/22
41677 05/19/22 CARD SERVICES
E 810-00000-252 Food/Concessions For $12.95 MAY 2022 Arena Concessions
41679 05/19/22 STEP SAVER,INC.
E 810-00000-405 Repair/Maint -Buildings $101.40 153568 Bulk Salt-East
41681 05/19/22 XCEL ENERGY
E 810-00000-381 Electric Utilities $12,543.61 779015650 5898 Lachman Ave 51-5873315-4
810 STMA ARENA $57,881.89
Agenda Page 6
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MANAGER' GENERAL UPDATE
Date: June 13th,2022
To: STMA Arena Board
From: Grant Fitch, STMA Arena Manager
ARENA MONTHLY RENTAL HOURS-MAY
User Hours Sold
STMAYHA 0 hours
AAA 119 hours
RYHA (Rogers) 0 hours
Adult Hockey 8 hours
High School Boys/Girls 0 hours
Public Skating/OH 50 hours
Private rentals 25 hours
Total Hours 202
Monthly Budget Projection 100
Olympia repair: Had issues with the battery machine going in forward or reverse. Replaced
3coils, shifter and left wheel contact.
Operations: 5-16-22 Alarm Suction Group control SG2 compressor 94 oil failure Alarm. Reset
the fault and operations back to normal. 5-26-22 found pump 93 VFD tripped on input phase 4
loss. Reset, started and checked operations normal. SCR found one condenser fan not working,
will order and replace during maintenance scheduled in June. Wednesday May 11th we had a lot
of rain/wind in a short amount of time. Had some leaking in odd areas but believe it was due to
roof drains not keeping up. We will continue to monitor going forward.
Arena Maintenance: Thanks to Albertville Public Works for putting up new mailboxes and
Parking signs for Hat Trick Hockey.
Summer Camps & FHIT Hockey: STP Starts Monday June 13th and run through July 29th
2022. Fhit runs June 13th through August 25th 2022.
STMAYHA: Dryland Area white poly and kick plate installed Wednesday 6-08-22 by Becker
Arena Products.
STMA Arena Usage Statistics: See pages 2 and 3 for Blue and Gold Rink hours from May I"
to May 31St 2022. Times broken down by customer type.
Agenda Page 7
St. Michael / Albertville Arena Blue Rink Page I of]
Usage Statistics by Customer Type-Customer Detail Printed 03-.run-22,10:18 PM
01-May-22 to 31-May-22/Sun,Mon,Tues,Wed,Thurs,Fri,Sat/12:00 AM to 12:00 AM/No Int Cost
Facilities:Arena New
Customer Type ---Hours Adjusted for Time Range--- ---------------Full Hours for Events in the Time Range
Customer Hours %Total Facility Rev. %Total Hours %Total Facility Rev. Other Chgs Tax Tot Revenue %Total
AAA Hockey 46.25 38.70% $6,806.25 42.92% 46.25 38.70% $6,806.25 $0.00 $501.94 $7,308.19 43.13%
Midwest Hockey Program 46.25 38.70% $6,806.25 42.92% 46.25 38.70% $6,806.25 $0.00 $501.94 $7,308.19 43.13%
Private Rental 48.0 40.17% $8,020.00 50.58% 48.0 40.17% $8,020.00 $0.00 $510.98 $8,530.98 50.34%
EuroAmerican Hockey 2.5 2.09% $412.50 2.60% 2.5 2.09% $412.50 $0.00 $30.42 $442.92 2.61%
Hockey Finder 8.0 6.69% $1,360.00 8.58% 8.0 6.69% $1,360.00 $0.00 $100.32 $1,460.32 8.62%
Lakes Area Training 7.5 6.28% $1,237.50 7.80% 7.5 6.28% $1,237.50 $0.00 $91.25 $1,328.75 7.84%
MN Hockey 4.0 3.35% $720.00 4.54% 4.0 3.35% $720.00 $0.00 $0.00 $720.00 4.25%
Mn Hockey Checking Clinic 2.25 1.88% $371.25 2.34% 2.25 1.88% $371.25 $0.00 $0.00 $371.25 2.19%
Showcase Hockey 23.75 19.87% $3,918.75 24.71% 23.75 19.87% $3,918.75 $0.00 $288.99 $4,207.74 24.83%
Public Sessions 25.25 21.13% $1,031.25 6.50% 25.25 21.13% $1,031.25 $0.00 $76.05 $1,107.30 6.53%
Open Hockey 17.5 14.64% $0.00 0.00% 17.5 14.64% $0.00 $0.00 $0.00 $0.00 0.00%
Open Skate 1.5 1.26% $0.00 0.00% 1.5 1.26% $0.00 $0.00 $0.00 $0.00 0.00%
Stma Arena 6.25 5.23% $1,031.25 6.50% 6.25 5.23% $1,031.25 $0.00 $76.05 $1,107.30 6.53%
Grand Total: 119.5 $15,857.50 119.5 $15,857.50 $0.00 51,088.97 $16,946.47
End ofLtrting
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Agenda Page 8
St. Michael / Albertville Arena Gold Rink Page I of]
Usage Statistics by Customer Type-Customer Detail Printed 03-.run-22,10:19 PM
01-May-22 to 31-May-22/Sun,Mon,Tues,Wed,Thurs,Fri,Sat/12:00 AM to 12:00 AM/No Int Cost
Facilities:Arena Old
Customer Type ---Hours Adjusted for Time Range--- ---------------Full Hours for Events in the Time Range
Customer Hours %Total Facility Rev. %Total Hours %Total Facility Rev. Other Chgs Tax Tot Revenue %Total
AAA Hockey 24.25 29.69% $4,001.25 39.32% 24.25 29.69% $4,001.25 $0.00 $295.07 $4,296.32 39.32%
Midwest Hockey Program 24.25 29.69% $4,001.25 39.32% 24.25 29.69% $4,001.25 $0.00 $295.07 $4,296.32 39.32%
Private Rental 33.0 40.41% $5,445.00 53.51% 33.0 40.41% $5,445.00 $0.00 $401.54 $5,846.54 53.51%
EuroAmerican Hockey 3.75 4.59% $618.75 6.08% 3.75 4.59% $618.75 $0.00 $45.63 $664.38 6.08%
JeffPelowski 1.0 1.22% $165.00 1.62% 1.0 1.22% $165.00 $0.00 $12.17 $177.17 1.62%
Lakes Area Training 4.5 5.51% $742.50 7.30% 4.5 5.51% $742.50 $0.00 $54.75 $797.25 7.30%
Showcase Hockey 23.75 29.08% $3,918.75 38.51% 23.75 29.08% $3,918.75 $0.00 $288.99 $4,207.74 38.51%
Public Sessions 24.42 29.90% $728.75 7.16% 24.42 29.90% $728.75 $0.00 $53.74 $782.49 7.16%
Open Hockey 9.5 11.63% $0.00 0.00% 9.5 11.63% $0.00 $0.00 $0.00 $0.00 0.00%
Open Skate 10.5 12.86% $0.00 0.00% 10.5 12.86% $0.00 $0.00 $0.00 $0.00 0.00%
Stma Arena 4.42 5.41% $728.75 7.16% 4.42 5.41% $728.75 $0.00 $53.74 $782.49 7.16%
Grand Total: 81.67 $10,175.00 81.67 $10,175.00 $0.00 $750.35 $10,925.35
End ofLmtmg
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Agenda Page 9
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STMA YHA Dryland Lease
Date: June 9, 2022
To: STMA Arena Board
From: Adam Nafstad
The dryland space lease between the Arena Board and STMA YHA was executed on May 24,
2022.
Attached is a sublease between STMA YHA and Dark Horse Athletics, LLC. Per the terms of
the lease, the STMA YHA can sublet the space with the Arena Boards consent.
Unless the Board has concerns with the terms of the sublease, it is recommend the Board motion
to consent to the sublease and direct staff to provide written consent.
Staff received the sublease yesterday and will review prior to Monday's meeting.
Agenda Page 10
SUBLEASE AGREEMENT
This Sublease Agreement (this "Sublease") is made and entered into as of 1St day of June
2022, between STMA Youth Hockey Association, Inc., a Minnesota non-profit corporation
("Sublessor") and Dark Horse Athletics, LLC, d/b/a FHIT Hockey, a Minnesota limited liability
company("Sublessee"). Sublessor and Sublessee are sometimes referred to herein together as the
"parties"or individually as a"party."
In consideration of the terms, covenants and conditions herein contained Sublessor and
Sublessee covenant and agree as follows:
1. Premises. Sublessor hereby leases to Sublessee, and Sublessee leases from
Sublessor, those certain premises, described as: the mezzanine area (the "Leased Premises"),
located within the "Gold"rink at the STMA Ice Arena, 5898 Lachman Avenue NE, Albertville,
MN (such arena being referred to hereafter as the `Building"). The parties acknowledge that the
Leased Premises are currently leased by Sublessor from St.Michael—Albertville Ice Arena Joint
Powers Board, a joint powers board under the laws of the State of Minnesota("Landlord"),which
owns and operates the Building and area surround the Building (collectively, the "Property")
pursuant to the terms of that certain Lease Agreement dated J6t.-tx 2 y 2022
("Prime Lease").
2. Term and Effect of Termination. The term ("Term")of this Sublease shall be for a
period of approximately three (3)months, commencing on the date hereof(the "Commencement
Date") and ending on August 26, 2022 (the"Expiration Date").
3. Rent. The rent ("Rent") amount established for the entire duration of the Term is
One and No/100 ($1.00) Dollar, the receipt of which Sublessor acknowledges as received. The
parties acknowledge and agree that the Rent amount is sufficient consideration for purposes set
forth in this Sublease,but subject to Sublessee's promise and obligation to provide on-ice training
to Sublessor,at no cost,during the youth hockey season beginning in the fall of 2022. In the event
Sublessee fails to provide such training in a manner and frequency reasonably acceptable to
Sublessor, then the Rent for the Leased Premises shall be automatically adjusted to Thirteen
Thousand Five Hundred and No/100 ($13,500.00) Dollars, which shall be due and payable
immediately upon demand by Sublessor.
4. Gross Lease. Except as otherwise specifically set forth in this Sublease, Sublessee
shall not be required to make any additional expenditures in connection with Sublessee's
occupancy of the Leased Premises(e.g.real estate taxes and operating expenses). Notwithstanding
the foregoing, Sublessee shall be required to (i) make any repairs to the Leased Premises, at
Sublessee's sole cost and expense, which are caused by or resulting from Sublessee's (and its
owners, employees, trainers, customers, invitees and agents) use of the Leased Premises, (ii)
maintain the Leased Premises in good condition throughout the Term, (iii) routinely clean and
sanitize the Leased Premises,including proper disposal of all garbage,and(iv)obtain and maintain
general liability and casualty insurance in connection with Sublessee's use and occupancy of the
Leased Premises. Sublessee acknowledges and agrees that it takes the Leased Premises "AS IS"
and"WITH ALL FAULTS".
1
Agenda Page 11
5. Utilities, Taxes and Other Operating Costs. Throughout the Term, including any
extension, Sublessor shall be solely responsible for and shall promptly pay, as they become due,
all charges for all utilities and other operating costs,which are required by Sublessor as part of the
Prime Lease. Notwithstanding the foregoing, Sublessee shall pay its own sales taxes, income
taxes, payroll taxes and all other taxes concerning its business operations.
6. Modifications or Alterations. Sublessee shall not alter the design or structural
character of the Leased Premises or Building and in no event shall Sublessee do any act or thing
which may unduly impair or depreciate the value of the Leased Premises. Sublessee shall not alter
or change any mechanical, plumbing or electrical components servicing the Leased Premises or
Building.
7. Use of Premises by Sublessee. The Leased Premises shall be used exclusively as
an off-ice dryland training facility, including but not limited to such purposes as stretching,
exercising, practicing hockey on a non-ice surface, stick-handling, weight training, cross-training
and other activities designed to educate and train youth hockey players(collectively,the"Permitted
Use"). Sublessee acknowledges that Sublessee shall be responsible for using its own equipment
and that Sublessee shall not, without the express written consent of Sublessor, use any of
Suhlessor's equipment(except as specifically provided in Section 16 below).
8. Conduct of Sublessee's Business. Sublessee agrees to: (i) occupy the Leased
Premises upon the Commencement Date and conduct its business to the extent necessary at the
Leased Premises, during the regular and customary days and hours for such type of business; (ii)
conduct its business at all times in good faith, in a high grade and a reputable manner; and (iii)
promptly comply with (A) all laws, ordinances codes and regulations affecting the Leased
Premises or the conduct of Sublessee's business therein; (B)all insurance company requirements,
including those relating to the cleanliness, safety, use and occupancy of the Leased Premises, and
(C) all related leases for the Building and Property which Sublessee has with Landlord, if
applicable. Sublessee shall store in the Leased Premises only such goods,wares and merchandise
as Sublessee intends to utilize in the operation of Sublessee's business operations. Sublessee shall
dispose of all waste in compliance with laws, ordinances and codes affecting the Property and
affecting the business of Sublessee. Sublessee may use the dumpster and recycling bins serving
the Leased Premises to the extent that such waste disposal is in compliance with all laws,
ordinances and codes.
In addition, Sublessee further agrees: (a) to occupy the Leased Premises in a safe and
careful manner,without committing or permitting waste; (b)to neither do nor permit anything to
be done or keep,or permit to be kept,anything in or about the Leased Premises which contravenes
Sublessor's insurance policies or increases the premiums therefore;(c)to neither commit nor suffer
to be committed any nuisance or other act or thing which may disturb the quiet enjoyment of
occupants of adjacent property, or other parts of the Building, including but not limited to the
reproduction of sound which is audible outside the Leased Premises or permitting odors to be
unreasonably dispelled from the Leased Premises; (d)to place no merchandise, sign or other thing
of any kind on the sidewalks or otherwise obstruct the common areas or service areas;(e)to keep
the Leased Premises orderly, neat, clean and free from rubbish and trash at all times and to keep
any refuse in proper containers in the interior of the Leased Premises until the same is removed,
and to permit no refuse to accumulate around the exterior of the Leased Premises; (f) to conduct
2
Agenda Page 12
no auction, fire or going out of business sale without the prior written consent of Sublessor; (g)to
permit Sublessor free access to the Leased Premises at all reasonable times for the purpose of
examining the same or making alterations or repairs to the Leased Premises that Sublessor may
deem necessary for the safety or preservation thereof, (h) except as provided by Sublessor, to
adequately cool the Leased Premises; (i)to permit no lien, notice of intention to file lien or other
charges which might be or become a lien or encumbrance or charge upon the Leased Premises or
any part of the Property or the income there from, and to suffer no other matter or thing whereby
the estate,right and interest of the Landlord or Sublessor in the Leased Premises or any part thereof
might be impaired; 0) to refrain from using the Leased Premises for any prohibited or unlawful
acts; (k) to comply with all reasonable rules and regulations which Landlord or Sublessor may
from time to time establish for the use and care of the Leased Premises and the Building; and (1)
to make no use whatsoever of the roof of the Building without first obtaining Sublessor's written
consent.
9. Insurance. Sublessee shall, at its sole cost and expense,keep the Leased Premises,
plus Sublessor's and Sublessee's fixtures, merchandise and personal property, insured against
special perils and containing an endorsement for replacement cost coverage, with an insurance
company acceptable to Sublessor in an amount not less than fair market value, plus inventory and
equipment, without deduction for depreciation, at Sublessee's sole cost and expense during the
Term. Sublessee shall also place and maintain at all times during the Term, at its sole cost and
expense, a commercial general liability insurance policy covering the Leased Premises and listing
as additional insureds the Landlord and Sublessor with limits of at least One Million Dollars
($1,000,000.00)for each occurrence,Two Million Dollars($2,000,000.00) general aggregate, and
Three Hundred Thousand Dollars ($300,000.00) property damage resulting from any occurrence
upon the Leased Premises and the Property.
In case Sublessee shall at any time fail,neglect or refuse to insure the Leased Premises and
improvements and to keep the Leased Premises as hereinabove provided, then Sublessor may, at
its election,procure or renew such insurance.Sublessee shall reimburse Sublessor for any amounts
paid therefore by Sublessor no later than the first day of the next calendar month after any such
payment.
All insurance requirements herein shall be placed with responsible insurance companies
approved by Sublessor and authorized to do business in the State of Minnesota and shall be in a
form approved by Sublessor. All such policy declaration pages or certificates of insurance
evidencing such coverage, shall be deposited with Sublessor and maintained during the Term.The
policies of insurance required in this Section shall contain an undertaking by the respective
insurers,that such policies shall not be cancelled or have their coverage materially altered without
at least thirty (30) days prior written notice to Sublessor. Sublessee shall furnish Sublessor with
respect to any expiring policy,reasonable evidence of the replacement or extension of such policy
and of the payment of the premium with respect thereto.
All such insurance shall be so issued as to cover the several interests of the Landlord and
Sublessor,and Sublessee and shall provide that in case of loss or damage the proceeds thereof shall
be payable to the Landlord, to be held by it as security for the performance of Sublessee's
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obligation to repair, rebuild or reconstruct the Leased Premises and/or other portions of the
Building and Property as provided herein.
10. Waiver of Subrogation. Sublessor and Sublessee hereby release each other from
and waive any claims against each other respecting any property damage to the Leased Premises,
the Building in which the Leased Premises are located and all personal property located therein to
the extent such property damage is required to be insured under the terms of this Sublease and
regardless of the cause of such property damage including negligence. All policies of insurance
pertaining to the Leased Premises and its contents shall be endorsed to provide that the insurance
company may not be subrogated with respect to insurance carried by Sublessee against Sublessor,
it being agreed that neither Sublessee nor Sublessee's insurance company or companies shall have
any right of action against Sublessor or the Landlord for any loss or damage to Sublessee's property
in or about the Leased Premises which loss or damage is in fact covered by insurance carried by
Sublessee, and that neither Sublessor nor the Landlord nor their respective insurance company or
companies shall have any right of recovery against Sublessee for any loss or damage to the
Building,the Leased Premises, or to Sublessor's personal property in or upon the Property,which
loss or damage is in fact covered by insurance carried by the waiving party.
11. Assignment and Subletting. Sublessee may not assign this Sublease in whole or in
part, or sublet all or any part of the Leased Premises, without obtaining the written consent of the
Sublessor.
12. Default by Sublessee.
12.1 Payment of Rent. In the event Sublessee fails to pay any installment of Rent
when due or within ten(10) days thereafter, Sublessor shall have the right to charge a late
fee of$500 and interest shall immediately begin to accrue at the lesser of 18%or the highest
amount permitted by law.
12.2 Other Default. In the event of any other failure to perform any other of the
terms, conditions or covenants or this Sublease to be observed or performed by Sublessee
for more than fifteen(15)days after written notice of such default shall have been given to
Sublessee (unless such default cannot reasonably be cured within said fifteen (15) day
period and Sublessee has commenced to cure such default),then Sublessor, besides other
rights and remedies it may have,shall have the immediate right of reentry and may remove
all persons and property from the Leased Premises by legal process. Should Sublessor at
any time terminate this Sublease for any breach, in addition to any other remedies it may
-have, it may recover from Sublessee all damages it may incur by reason of such breach,
including attorney fees and costs.
13. Inspection Repair and Display by Landlord or Sublessor. Sublessor, Landlord and
their respective agents, insurers, mortgagees, contractors or any prospective purchasers may, at
any reasonable time, inspect any part of the Leased Premises and make repairs, upgrades or
replacements to the Leased Premises or the systems serving any part of the Building and other
improvements thereon including but not limited to the mechanical, electrical and other systems
thereto, for the protection and preservation thereof.
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14. Notices. Whenever any notice, demand, approval, consent, request or election is
given or made pursuant to this Sublease, it shall be in writing. Notices shall be deemed to be
sufficiently communicated and duly served if actually delivered to the intended party, personally,
by email, by a professional courier service or if deposited with the United States Postal Service
properly addressed for first class mail delivery,provided the postage or delivery fees are borne by
the sender.
15. Condition of Leased Premises Upon Surrender. At the expiration of the Term,
Sublessee will quit and surrender the Leased Premises hereby demised in as good of state and
condition as when received, reasonable wear and tear excepted.
16. Trade Fixtures and Assumption of Liability. Sublessee shall not remove any such
trade fixtures at any time that are owned by Landlord or Sublessor;it being understood and agreed
that all trade fixtures within the Leased Premises are the property of Sublessor. Sublessor hereby
grants Sublessee the right to use the trade fixtures located within the Lease Premises, but on the
strict condition that Sublessee releases, indemnifies and agrees to hold Sublessor and Landlord
harmless from any and all claims, causes of action, damages, injuries, loss of property and
allegations related to or arising from Sublessor's use and occupancy of the Leased Premises.
Accordingly, Sublessee assumes full responsibility for all such risks, costs and claims, as well as,
ensuring the personal property and safety of its owners, employees, trainers, customers, invitees
and agents which use the trade fixtures and equipment located within the Leased Premises.
17. Amendments. It is acknowledged that the covenants and obligations herein are the
full and complete terms of this Sublease, and no alteration, amendments or changes to such terms
shall be binding unless first reduced to writing and executed with the same formality as this
Sublease. This provision shall not apply to changes of address for forwarding of notice or Rent
payments.
18. Headings; Severability. The headings hereof are intended as guides only and shall
not be construed as having any legal effect. If any term or provision of this Sublease or the
application thereof to any person or circumstance shall,to any extent be invalid or unenforceable,
the remainder of this Sublease or the application of such term or provision to persons or
circumstances other than those to which it is held invalid or unenforceable shall be valid and
enforced to the full extent permitted by law.
19. No Waiver. Failure of either party to insist on strict performance of the terms of
this Sublease,or the waiver of any breach of term or condition of this Sublease by such party,will
not be construed as waiving any other terms or conditions that remain or continue under this
Sublease, and the Sublease will remain in full force and effect.
20. Disputes. In the event that either parry hereto shall bring or join an action to recover
any sum due hereunder or for the enforcement of this Sublease (including any exhibit attached
hereto), or because of an alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of this Sublease or any exhibit attached hereto,the non-breaching parry shall
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be entitled to recover reasonable attorneys' fees and all other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
21. Compliance With Laws. Sublessee expressly warrants that Sublessee's use and
occupancy of the Leased Premises will comply with all applicable laws,rules,and regulations,and
22. Landlord Consent. This Sublease and the obligations of Sublessor and Sublessee
are specifically conditioned on the written consent of Landlord.
23. Signage. Except as otherwise provided herein, Sublessee will not place or cause to
be placed or maintained any sign or object upon the Leased Premises,the Building or any party of
the Property,without Sublessor's consent. If any such signs are permitted, Sublessee shall remove
any and all such signs upon the termination of this Sublease. .
24. Brokers. Each of the parties represents and warrants to the other parry that there
are no claims for brokerage commissions or finder's fees in connection with the execution of this
Sublease.
25. Jurisdiction and Venue. This Sublease shall be governed by and construed under
the laws of the State of Minnesota and any action shall be venued in Wright County District Court,
Minnesota.
26. Surrender; Holding Over. Sublessee shall deliver up and surrender to Sublessor
possession of the Leased Premises and all keys upon the Expiration Date or termination in any
way, in as good condition and repair as the same shall be on the Commencement Date(damage by
fire and other perils covered by special perils insurance and ordinary wear and tear excepted), and
professionally cleaned(unless otherwise agreed by Sublessor at such time). Any personal property
of Sublessee remaining on the Leased Premises at the Expiration Date or other termination hereof
shall be deemed abandoned,and Sublessor may take immediate steps to remove the same,all costs
of which shall be deemed to be additional rent due from Sublessee to Sublessor. Should Sublessee
remain in possession of the Leased Premises after the Expiration Date if the Term is not extended
or any termination of this Sublease without the prior authorization of Sublessor, Sublessee shall
be subject to immediate eviction and removal,and Sublessee shall upon demand pay to Sublessor
a sum equal to $5,000 per month for each month Sublessee holds over in the Leased Premises.
27. Not a Partnership or Joint Venture. Nothing contained in this Sublease shall be
deemed or construed as creating a partnership or joint venture between Sublessor and Sublessee
or between Sublessor and any other person, or cause Sublessor to be responsible in any way for
the debts or obligations of Sublessee or any other person.
28. Paragraph Headings. The paragraph headings have been inserted for convenience
only, and shall not be construed to modify, limit, or amplify the meaning of the terms and
provisions hereof.
29. Electronic Storage; Reproduction Deemed an Original. The parties may
electronically execute, store and preserve this Sublease, and discard and otherwise destroy the
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original signed document. Any reproduction of this Sublease containing a replication of both
parties'electronic or original signatures and derived from either party's electronic storage system
will be deemed to be original and authentic, and may serve in the place of an original signed
document for all intents and purposes.
IN WITNESS WHEREOF,the parties have executed this Sublease on the day and year
first above written in a manner appropriate to each.
SUBLESSOR:
7STMA YOUTH;H KEY ASSOCIATION,INC.
By: Megan Esterberg
Its: President
SUBLESSEE:
DARK HO ATHLETICS,LLC
Its:
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