Res 2026-18 Lease between FH and Museum

RESOLUTION NO. 2026-18

A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, APPROVING A LEASE AGREEMENT WITH
THE FOUNTAIN HILLS AND LOWER VERDE RIVER VALLEY MUSEUM AND
HISTORICAL SOCIETY

RECITALS:

WHEREAS, the Town of Fountain Hills (“Town”) and the Fountain Hills and Lower Verde River
Valley Museum and Historical Society (“Museum”) previously entered into a Lease Agreement
dated August 16, 2001 (“Original Lease”) for the Museum’s use of the Town-owned property
located at 12901 N. La Montana Drive; and

WHEREAS, the Original Lease is scheduled to expire on August 15, 2026; and

WHEREAS, the Town finds that the Museum's operation provides a public benefit through
historical preservation, educational programming, tourism and cultural activities for residents and
visitors; and

WHEREAS, the Museum serves as the Fountain Hills Historical Society and maintains historical
collections, archives, exhibits, educational programming, and cultural resources for residents and
visitors; and

WHEREAS, the Town Council has determined that temporarily extending the lease while
evaluating future operational options serves a public purpose and allows the continuation of
cultural, tourism and educational services for the community; and

WHEREAS, the parties desire to enter into this Lease Agreement establishing the rights and
obligations of each party.

ENACTMENTS:

BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS as
follows:

SECTION 1. The recital above is hereby incorporated as if fully set forth herein.

SECTION 2. The Lease Agreement between the Town of Fountain Hills (the "Town") and the
Fountain Hills and Lower Verde River Valley Museum and Historical Society (“Museum”) is
hereby approved in substantially the form attached hereto as Exhibit A and incorporated herein
by reference.

SECTION 3. The Mayor, the Town Manager, the Town Clerk and the Town Attorney are hereby
authorized and directed to cause the execution of the Lease Agreement and to take all steps

necessary to carry out the purpose and intent of this Resolution.

PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills, Arizona, this
30" day of June 2026.

(Signatures on the following page)

FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:

Mayor Town Clerk

REVIEWED BY: APPROVED AS TO FORM:

Town Manager Town Attorney

EXHIBIT A
TO
RESOLUTION NO. 2026-18
(Lease Agreement)

See following pages.

LEASE AGREEMENT

This Lease Extension Agreement (“Agreement”) is entered into between the Town of Fountain
Hills, Arizona, an Arizona municipal corporation (“Town”), and Fountain Hills and Lower
Verde River Valley Museum and Historical Society, an Arizona nonprofit organization
(“Museum”).

RECITALS

WHEREAS, the Town and the Museum previously entered into a Lease Agreement dated
August 16, 2001 (“Original Lease’) for the Museum’s use of the Town-owned property located
at 12901 N. La Montana Drive; and

WHEREAS, the Original Lease is scheduled to expire on August 15, 2026; and

WHEREAS, the Town finds that the Museum’s operation provides a public benefit through
historical preservation, educational programming, tourism and cultural activities for residents
and visitors; and

WHEREAS, the Museum serves as the Fountain Hills Historical Society and maintains historical
collections, archives, exhibits, educational programming, and cultural resources for residents and
visitors; and

WHEREAS, the Town Council has determined that temporarily extending the lease while
evaluating future operational options serves a public purpose and allows the continuation of
cultural, tourism and educational services for the community; and

WHEREAS, the parties desire to enter into this Lease Agreement establishing the rights and
obligations of each party;

NOW, THEREFORE, the parties agree as follows:
AGREEMENT

NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which
are incorporated herein by reference, the following mutual covenants and conditions, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Town and the Museum hereby agree as follows:

1. LEASE. The Town hereby leases to Museum approximately 5,000 rentable square feet
identified on Exhibit | (Floor Plan), together with (a) the patio and outdoor display area
shown on Exhibit | (the ‘Outdoor Area’), and (b) nonexclusive rights to use the lobby
area in common with the Library and nonexclusive rights to use adjacent parking and
open areas in common with other municipal uses (collectively, the ‘Leased Premises’).
Exhibit | is incorporated by reference.

. TERM. The Lease shall commence August 16, 2026, and expire June 30, 2027. There

shall be no automatic renewal. Any extension or renewal must be approved by the Town
Council through written agreement. No options to extend are granted. Any extension
requires Town Council approval and a fully executed written amendment.

RENT. Museum shall pay rent of One Thousand Dollars ($1,000) per month; provided,
however, that rent due on September 1, 2026 shall be One Thousand Five Hundred
Dollars ($1,500). Rent is due on the first calendar day of each month without demand.
Rent not received by the Town on or before the tenth (10th) calendar day of the month is
late and constitutes a monetary default after written notice and a five (5) business day
cure period following receipt of such notice.

By January 14, 2027, Town and Museum representatives shall meet to conduct a joint
review of the Museum's performance and compliance with the requirements set forth in
Section 7. The review shall include discussion of the Museum's operations, community
benefit, long-term viability, and the feasibility of a future lease extension. Following
completion of the review, the Town shall provide the Museum with written notice within
30 days of its intent to pursue, negotiate, or decline a lease extension. Nothing herein
shall obligate the Town to renew, extend, or enter into a subsequent lease agreement.

USE OF PREMISES. The Premises shall be used solely for Museum operations;
historical exhibits and collections; historical archives and research; educational
programming; tourism-related cultural programming; public meetings and events related
to museum purposes; and other uses approved in writing by the Town. All activities must
comply with Town facility policies then in effect. No third-party operation or sub-use of
the Leased Premises is permitted without Town’s prior written consent.

Museum shall not conduct or permit to be conducted any unlawful, hazardous, or
nuisance activities upon the Leased Premises. The use of the Leased Premises by the
Museum is and will continue to be subject to all applicable laws and regulations of the
State of Arizona and the Town of Fountain Hills.

STATUS OF EMPLOYEES. The Museum understands that and agrees that none of the
terms and conditions of the Lease contemplate or imply the creation of an
employer/employee relationship and that all employees, agents, contractors,
subcontractors and volunteers of the Museum are independent contractors in terms of
their relationship to the Town.

PUBLIC BENEFITS. As material consideration for this Lease, Museum shall deliver
the following during the Term:

A. Public Operating Hours:
i. September I|—May 31: Open to the public at least four (4) days per week, for a
minimum of six (6) public hours per open day with the exception of holidays.

ii. June |—August 31: Open to the public at least three (3) days per week, for a
minimum of three (3) public hours per open day with the exception of
holidays.

iii. Temporary reductions due to building emergencies, governmental orders, or
staff illness are permitted for up to fourteen (14) consecutive calendar days
with prompt written notice to Town; longer reductions require Town’s written
consent.

B. Education and School Engagement: Provide curriculum-aligned content and host
school tours upon reasonable request from schools and home schools throughout
Arizona, with at least three (3) scheduled school tour days during the Term.

C. Free Admission Days: Provide at least twelve (12) free admission days annually,
reasonably distributed across the Term.

D. Free Community Programs: Provide at least nine (9) free community programs
annually (lectures, workshops, events), reasonably distributed across the Term.

E. Tours (October—April): Offer at least one (1) public history, art, or cultural tour per
month October—April.

F. Archives/Collections: Maintain historical archives and collections in an organized
and accessible manner and preserve/curate artifacts and records using professional
standards appropriate to Museum’s scale.

G. Museum Certification: Maintain current museum certification status, if applicable,
and provide documentation to Town annually.

H. Hall of Fame Event: Host the Hall of Fame event in Fountain Hills during the Term.

I. Fort McDowell Yavapai Tours (October—April): Continue and, where feasible,
expand public tour offerings in coordination with partners.

J. Military Families Admission: Participate in the national program providing free
admission to active-duty military personnel from May—September, or a substantially
equivalent program if administratively required.

K. Collaboration with International Dark Sky Discovery Center: Engage in good-faith
collaboration to evaluate and, if feasible, pilot a dual admission pass; provide a status
update by January 31, 2027.

L. Economic Impact Analysis: Complete a third-party economic impact analysis
initiated by the Town and deliver the final report by December 31, 2026.

M. Performance Metrics: Cooperate with the performance review in Section 3 (Rent) and
provide data necessary to evaluate outcomes.

N. Material Breach: Failure to deliver the commitments above, after applicable notice
and cure under Section 19, constitutes a material breach.

. REPORTING. By the fifteenth (15th) calendar day of each month, Museum shall submit
the prior month’s report by email to the Town’s Economic Development Director,
including: (a) Profit & Loss Statement; (b) visitor counts and basic demographics; (c)
membership totals; (d) summary of programs/events (dates, attendance); and (e) status
against Section 6 deliverables. If the due date falls on a weekend or Town holiday, the
report is due the next business day.

» CONSTRUCTION AND IMPROVEMENTS. Museum shall not construct, alter, or

install any improvements, whether permanent or temporary, without Town’s prior written

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11.

12.

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approval of plans and specifications. All work must comply with applicable codes and
permits. Unless Town specifies otherwise in writing, improvements affixed to the Leased
Premises become Town property upon installation without compensation. Upon
expiration or earlier termination, Museum shall, at Town’s election, remove non-
permanent installations and restore affected areas to prior condition, reasonable wear and
tear excepted.

All exterior signage and branding visible from common areas require Town’s prior
written approval and must comply with applicable codes and facility standards.

REPAIRS AND MAINTENANCE. The Town shall be responsible for trash removal of
the Leased Premises as well as the maintenance and repair of the Leased Premises
including all mechanical fixtures such as heating, air conditioning, electrical, and
plumbing, except any exhibits. Museum shall promptly notify Town in writing of any
condition requiring Town maintenance or repair. Town is not responsible for
repair/replacement of exhibits or Museum-owned equipment.

The Museum is responsible for day-to-day cleaning within the lease space and outdoor
patio.

UTILITIES. The Town shall be responsible for and pay for all utilities related to the
Leased Premises including, but not limited to, water, gas, electricity, sewer, trash
removal, and basic cable television.

The Museum shall be responsible for installing and paying for its own telephone system,
and any computer equipment, data lines, internet services, and/or premium cable service
that the Museum should elect to install. Museum’s telecom/data installations shall not
interfere with Town systems or building operations and must comply with Town’s
IT/security standards for facilities.

WASTE. The Museum shall not use nor permit uses within the Leased Premises which
could constitute waste on the Leased Premises, a public or private nuisance or any act
which is unlawful in any manner.

INCOME AND FEES. The Museum may establish reasonable admission and program
fees. Net income from admissions and sales of museum-related items shall be used for
rent, exhibit maintenance/improvement, educational programs, and museum-related
activities. Tours for the Town of Fountain Hills and Fountain Hills Unified School
District are exempt from admission fees.

INSURANCE.

a. Museum shall maintain “occurrence” form Commercial General Liability
insurance with an unimpaired limit of not less than $1,000,000 for each
occurrence, $2,000,000 Products and Completed Operations Annual Aggregate
and a $2,000,000 General Aggregate Limit. The policy shall cover liability

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15.

16.

17;

arising from premises, operations, independent contractors, products-
completed operations, personal injury and advertising injury.

b. Museums insurance shall be primary insurance with respect to performance of
this Agreement and in the protection of the Town as an Additional Insured; the
Town’s insurance shall be non-contributory; a waiver of subrogation against the
Town shall apply.

c. “The Town of Fountain Hills, its agents, representatives, officers, directors,
officials, and employees” must be named as “Additional Insured” on endorsement
pages. Address information should read: “Town of Fountain Hills, 16705 E
Avenue of the Fountains, Fountain Hills, AZ 85268”.

INDEMNIFICATION. To the fullest extent permitted by law, the Museum shall
indemnify, defend and hold harmless the Town and each council member, officer,
employee or agent thereof (the Town and any such person being herein called an
“Indemnified Party”), for, from and against losses, claims, damages, liabilities, costs and
expenses (including, but not limited to, reasonable attorneys’ fees, court costs and the
costs of appellate proceedings) to which any such Indemnified Party may become
subject, under any theory of liability whatsoever (“Claims”), insofar as such Claims (or
actions in respect thereof) relate to, arise out of, or are caused by or based upon the
negligent acts, intentional misconduct, errors, mistakes or omissions, breach of contract,
in connection with the work or services of the Museum, its officers, employees, agents, or
any tier of subcontractor in the performance of this Agreement. The amount and type of
insurance coverage requirements set forth below will in no way be construed as limiting
the scope of the indemnity in this Section. This indemnity does not apply to the extent of
Claims caused by the sole negligence or willful misconduct of the Town.

DEFAULT. Failure by the Museum to comply with the terms of this Agreement shall
constitute default. Upon any default, Town may: (a) terminate this Agreement; (b)
recover possession of the Leased Premises; and/or (c) pursue any other lawful remedy at
law or in equity. Remedies are cumulative. Notice and cure are governed by Section 19.

DISPUTE RESOLUTION; ARBITRATION. Any dispute arising out of or relating to
this Agreement shall be resolved by binding arbitration; provided, however, either party
may seek provisional, injunctive, or extraordinary relief in court, including actions for
possession (forcible entry and detainer/unlawful detainer) or to protect public
health/safety. The prevailing party is entitled to reasonable attorneys’ fees and costs
unless the arbitrator or court determines a different allocation is required or equitable.

GOVERNING LAW; VENUE. This Agreement, and any dispute, claim, or controversy
arising out of or relating to it, shall be governed by the laws of the State of Arizona,
without regard to its conflict-of-laws rules. Subject to the Section 16 (Dispute
Resolution), any court proceedings permitted under this Agreement (including for
provisional or injunctive relief, to compel or stay arbitration, or to confirm, modify, or
vacate an arbitral award) shall be brought exclusively in Maricopa County, Arizona, and
the parties consent to such courts’ jurisdiction and venue. For any court proceedings

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19.

20.

21.

22.

23.

permitted, the parties knowingly and voluntarily waive the right to a trial by jury to the
fullest extent permitted by law.

DISSOLUTION OF MUSEUM. If Museum ceases to exist as an Arizona nonprofit
corporation, this Lease shall automatically terminate unless, prior to such dissolution, the
Town Council approves a written assignment of this Lease to a successor nonprofit entity
acceptable to the Town. Subject to any third-party rights, title to all museum exhibits and
displays shall vest in the Town of Fountain Hills. Disposition of collections and archives
shall occur in accordance with applicable law and any donor restrictions.

TERMINATION. If either party fails to perform any obligation pursuant to this
Agreement and such party fails to cure its nonperformance within 30 days after notice of
nonperformance is given by the non-defaulting party, such party will be in default. In the
event of such default, the non-defaulting party may terminate this Agreement
immediately for cause and will have all remedies that are available to it at law or in
equity including, without limitation, the remedy of specific performance. If the nature of
the defaulting party’s nonperformance is such that it cannot reasonably be cured within
30 days, then the defaulting party will have such additional periods of time as may be
reasonably necessary under the circumstances, provided the defaulting party immediately
(A) provides written notice to the non-defaulting party and (B) commences to cure its
nonperformance and thereafter diligently continues to completion the cure of its
nonperformance. In no event shall any such cure period exceed 90 days. Monetary
defaults are subject to the shorter cure periods stated in Section 3 (Rent). Failures under
Section 6 (Public Benefits) are subject to Section 19’s cure periods unless expressly
stated otherwise.

ASSIGNMENT. Museum shall not assign, sublease, license, or otherwise transfer any
interest in this Lease or the Leased Premises, including by change of control, without
Town’s prior written consent.

NON-DISCRIMINATION AND ACCESSIBILITY. In accordance with State and
Federal law, Museum shall not discriminate on the basis of race, color, national origin,
sex, gender identity, sexual orientation, religion, disability, age, or veteran status, and
shall comply with applicable accessibility requirements.

PUBLIC RECORDS; AUDIT; RECORDS RETENTION. Museum shall retain
financial and program records supporting reports for five (5) years after
expiration/termination and make them available to Town upon reasonable advance notice
for inspection and audit.

INTELLECTUAL PROPERTY AND PUBLICITY. Each party retains ownership of
its names, logos, and intellectual property. Use of the Town’s name or logo in marketing
requires prior written approval.

24. COLLECTIONS OWNERSHIP; LOANS; RISK OF LOSS. Except as provided in
Section 18 upon dissolution, Museum retains title to its personal property, exhibits, and
collections, including items on loan to Museum, and bears all risk of loss or damage
thereto. Town is not a bailee or insurer of Museum property.

25. SAFETY AND SECURITY; EMERGENCY ACCESS. Museum shall comply with
Town’s safety and emergency procedures and shall provide emergency contact
information. Town may access the Leased Premises at reasonable times, and at any time
in an emergency, upon notice where practicable.

26. NO GUARANTEE OF FUTURE LEASE. Nothing in this Agreement shall be
construed as:
e A commitment to renew or extend the Lease beyond the Term
e A promise of future occupancy
e A guarantee of a new lease agreement

Any future lease or agreement must be approved by the Town Council and executed in
writing.

27. NOTICES. Any notice or other communication required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been duly given if (A)
delivered to the party at the address set forth below, (B) deposited in the U.S. Mail,
registered or certified, return receipt requested, to the address set forth below or (C) given
to a recognized and reputable overnight delivery service, to the address set forth below:

If to the Town: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Rachael Goodwin, Town Manager

With copy to: Town of Fountain Hills
16705 East Avenue of the Fountains
Fountain Hills, Arizona 85268
Attn: Jennifer Wright, Town Attorney

If to Museum: River of Time Museum
12901 N La Montana Dr #4742
Fountain Hills, Arizona 85268
Attn: Executive Director

28. ENTIRE AGREEMENT; AMENDMENTS; SEVERABILITY; WAIVER;
COUNTERPARTS. This Agreement is the entire agreement between the parties
regarding the Leased Premises and supersedes prior understandings concerning the Term

herein. Amendments must be in a writing signed by both parties. If any provision is held
invalid, the remainder remains effective. Waivers must be in writing and are not
continuing. This Agreement may be executed in counterparts and by electronic signature.

“Town” or "Lessor"
TOWN OF FOUNTAIN HILLS,
an Arizona municipal corporation

FOR THE TOWN OF FOUNTAIN HILLS:

Town Manager

Date:

FOR THE "Museum" or "Lessee": By:
Date: AL Pa

Name: J We~ Fi

Title: Exive Xo. Luter

ATTESTED TO:

Town Clerk

Date:

APPROVED AS TO FORM:

Town Attorney

Date:

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