As the City of Warren moves closer to divesting unused properties, previous plans for some of those properties have left entanglements with other entities that need sorted out.
In particular, city property on Clark St., once intended for the construction of a convention center, has a ground lease agreement with Warren Hospitality Associates set to run through 2037.
Thanks to documentation obtained by the Warren Times Observer, some of the details of that lease can be made available.
While the site is leased to Warren Hospitality, that group isn't the original signator, but a sub-lessee.
The original lease agreement for the site was signed by Warren Mayor Mark Phillips, on behalf of the city as lessor, and Lee Patterson, on behalf of the Pennsylvania Alliance for Cooperative Innovation as lessee company.
At the time, Patterson was president of Pennsylvania Alliance. Witnessing Patterson's signature was then Pennsylvania Alliance Vice-president Tim King.
The lease outlines a $1 per-year payment for maintenance of the agreement from Pennsylvania Alliance to the City. In addition, according to the lease, "...the company (Pennsylvania Alliance) agrees to perform or cause to be performed the obligations as set forth in Article V (of the lease)," and, "the land and the facilities shall be used only for the permitted use."
Article V of the lease states, "The company will design, construct, furnish and equip or cause to be designed, constructed, furnished or equipped the facilities on the land at the company's own expense"
According to the "description of facilities" attached to the lease, "The project site is located within the City of Warren, Pennsylvania, on the west side of 36 Clark Street.
"The square footage of the project will be 37,000 square feet. The convention center will be adjacent and attached to a 74 room Comfort Suites hotel."
So where does Warren Hospitality come into play?
Under the terms of the lease assignment portion of the agreement, the company can sublease the property to a developer to complete outlined work. That assigned developer is Warren Hospitality.
The lease also outlines a deadline for work.
According to the lease, "...The company covenants to use its best efforts to substantially complete, or shall cause to be substantially completed, the demolition of certain existing facilities (and) the design, construction, furnishing and equipping of all of the facilities on or before Dec. 31, 2011."
The deadline doesn't, however, automatically void the lease.
According to the lease "termination, default and remedies" section, "The Company, or after this lease is assigned to the developer... the developer shall fail to perform any other covenant or agreement, other than the payment of money, to be performed... such failure shall not be cured within 90 days after receipt of written notice from the city of such failure... takes action to sure such failure but is unable by reason of the nature of the work involved, to cure such failure within such period and continues such work thereafter diligently and without unnecessary delays, such failure shall not constitute an event of default hereunder until the expiration of a period f time after such 90 day period as may be reasonably necessary to cure such failure."
According to the lease, in such an event of default, the city's first recourse is to assign a new developer assignee as sublessee under Pennsylvania Alliance to serve as developer of the facilities.
According to Phillips, the city will be investigating its options in regards to the lease.
"In regards to the Clark St. property, if the city could free itself from the lease, we would certainly want to do that," Phillips said Wednesday.