By BECKY KISER
Hays Post
Although not ideal, a property lease has been negotiated with Union Pacific Railroad that would allow the Downtown Pavilion Project to move forward in Hays.
Assistant City Manager Jacob Wood updated city commissioners during their work session Thursday night.
“It’s been a long and arduous process with UP,” Wood said. “We did not get a lot of concessions on the lease. They are not willing to bend too much.”
City Attorney John Bird began lease negotiations with the railroad last year in July.
“The pavilion will increase foot traffic in the area of their railroad tracks, and they’re not real excited about that. The lease is basically a 30-day termination lease. It’s very broad and for almost any reason they can say ‘we’re done with this’ and they would require us to remove the building,” Wood explained.
However, the city is requiring an indemnification agreement with Downtown Hays Development Corporation (DHDC). “DHDC will remove the building if UP were to call the lease. The city would not be left on the hook,” Wood assured commissioners.
Two other areas of contention are a requirement for more insurance than the city normally would have, and the release and indemnity provisions of the lease do not comply with city ordinances.
The indemnification agreement, which Wood said DHDC has agreed to, obligates DHDC to pay the annual $3,000 lease fee, requires DHDC to remove the structure should Union Pacific terminate the lease and requires DHDC to complete construction of the structure should Fort Hays State University not be able to participate in the project.
Annual costs to be paid by the city total $1,294 which includes utility bills for restroom heat and electric meters, janitorial supplies and the additional insurance required by UP. Wood told commissioners the restroom has been ordered will be installed as soon as it arrives, estimated to be within six to eight weeks.
The project was first presented to the city May 5, 2016, by DHDC and a group of FHSU Construction Management students for construction of a pavilion and restroom to be located adjacent to Union Pacific Park on 10th Street in downtown Hays.
City commissioners will vote next week whether to sign the UP lease and DHDC indemnification agreement.
Last August, DHDC received a $100,000 grant from the Dane G. Hansen Foundation to be used to match private donations already secured by DHDC for the project. The funds will be used for construction materials. Labor will be provided by FHSU students and city of Hays employees.