Montgomery County MD Council Staff Report on Peary HS Sale Nov 19 2010

8/8/2019 Montgomery County MD Council Staff Report on Peary HS Sale Nov 19 2010

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AGENDA ITEM #20 November 23, 20lO Public Hearing

This packet should be retained for use at the Committee and Council meetings next week.

MEMORANDUMNovember 19,2010

TO: County CouncilFROM: Jeffrey L. zyonl ,legiSlative Attorney

~ i c h a e l Faden, Senior Legislative AttorneySUBJECT: Public Hearing - Resolution to approve the sale of Peary High School

On October 18, 20lO the County Executive submitted a draft resolution that seeks Council approval ofthe sale of Peary High School to the Berman Hebrew Academy, to which the school is now leased. TheEducation and Management and Fiscal Policy Committees are scheduled to have a joint meeting on thisissue on November 29, 2010. The Council is tentatively scheduled to take action on November 30,2010.The previous Executive recommended a sale of the property in 2005. The proposed terms for the saleare different in 4 ways:

1) The price rejects one appraisal. The 2005 proposal called for a payment of $1,500,000;the 20lO proposal requires a payment of$1,914,860.2) The repurchase price is tied to the price paid plus the lesser of the fair market value ofimprovements made by the tenant or the depreciated actual costs of improvements.3) The Academy's and its successor's use of the site is limited to school uses.4) The site may be condemned for public school use at the repurchase price (see # 2 above)with County possession 5 years after the condemnation action is final and nonappealable. (This amendment to the deed was submitted to the Council on November 10,2010.)

Terms and ConditionsThe Executive submitted 4 documents to express all of the terms and conditions of sale: 1) the 1996lease; 2) Amendment No.1 to the 1996 lease (as revised); 3) covenants; and 4) a deed. The terms andconditions are as follows:


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1) Sale priceThe price is $1,914,860 if settlement occurs before December 17,2010. 12) Public useThe public will have access to the auditorium and the gymnasium when the facilities are not needed bythe Academy. The athletic fields would be open for public use all weekends, Friday after 3:30 PM andMonday through Thursday after 6:00 PM. The Academy may also schedule events through normalchannels in those periods and can prohibit auditorium and gymnasium use by the public during Jewishholidays. The Academy would be able to charge fees to cover its operating costs, including personnelcosts for security and compliance with parking regulations. Users must carry insurance to indemnify theAcademy. The Academy and its successors would be prohibited from altering the fields without priorCounty approval.3) County right to repurchaseThe Academy and its successors would have the ability to use the site for a private school withaccessory daycare, day camp, worship space, and private religious center. The County would have theright to repurchase under two conditions controlled by the Academy:

i) the use ceases for more than 180 days (for reasons not due to renovations); orii) the site is sold to a non-school user.The County would have 90 days to tender the price paid by the Academy, adjusted by the consumerprice index, plus the lesser of the Academy's construction costs or the replacement costs of theAcademy's improvements minus depreciation.If condemned by the Council for use as a public school and the County wins the condemnation action,the repurchase price is the same as if the Academy had abandoned the use (the price paid by theAcademy, adjusted by the consumer price index, plus the lesser of the Academy's construction costs orthe replacement costs of the Academy's improvements minus depreciation). The County can getpossession 5 years after the last appealable event in the condemnation action. If the Academy choosesto tender the property to the County before the County prevails, the County must pay the Academy therepurchase price and the Academy pays the county the rental price in the lease ($60,000 per year,adjusted by the consumer price index from 1996) for the 5 year period.

BackgroundIn 1984, Peary High School was closed due to a decline in enrollments. The site was turned over to theCounty as a surplused school in 1987. The unoccupied building deteriorated over time. Sometimebetween 1987 and the adoption of the Aspen Hill Master Plan, the Board of Education recommendedusing the school as a holding school while other schools were being renovated. After funds for thisproposal were not authorized, the Board of Education transferred the property to the County by deed in1994. The Aspen Hill Master Plan (approved April 1994), which included the Peary High School site,recommended maintaining public ownership of the school site under all circumstances.1 The sale under the lease was based on the appraised price of land in 1996 adjusted by the consumer price index.

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On November 29, 1994, after a public hearing, the Council approved Resolution 12-1874 to allow alease of the property to a private school and a sale under the following conditions:Any sale of the property is subject to prior consent of the Council which will considerappropriate elements of the Aspen Hill Sector Plan at that time.2

The 1994 resolution gave the Executive the authority to seek a long term tenant or a sale with CouncilapprovaL In 1995, the Executive solicited private sector proposals for the site. After considering otheroptions, the Executive signed a lease with the Berman Hebrew Academy in 1996. The lease included anoption to purchase under the following circumstances:The Lessee shall have the right to purchase the Premises at any time during the lease term or anyextension thereof, subject to the approval of the Montgomery County Council and theMontgomery County Executive, and subject to any restrictions, conditions or requirementswhich the County Executive and County Council may elect to attach to such a purchase. TheLessee's right to purchase is further subject to the approval of the Board of Public Works, whichmay also elect to place restrictions, conditions or requirements on the purchase. The Lessee'sright to purchase and the County's acceptance thereof shall be exercised in accordance with allapplicable State and local statutes and regulations governing the disposition of publicproperty ... .3

The definition provisions of the lease state the following:Wherever the phrase "approval of the County" is used it shall, unless otherwise provided, meanthat such approval shall not be unreasonably withheld.4

In 2001, the Council approved Regulation 4-99 governing the disposition of closed schools. Any leasewhich predated the regulation, including the lease for the former Peary High School property, was notsubject to the regulation.In 2005, the then-County Executive recommended that the Council approve a resolution to sell theschool and site to the Academy. The Management and Fiscal Policy Committee held a worksession onthe proposed resolution on October 17, 2005. Both the Planning Board and the Board of Educationadvised against selling the school. The Committee Chair commissioned an independent economicanalysis of the terms of the proposed sale, which concluded that the 2005 sale terms were not in theCounty's best interest. 5 The Council took no action after the Committee's worksession.The Board of Education recommended disapproving the sale currently proposed; the Planning Boardrecommended approving it.

2 See 69; Under Maryland Code 4-115(c), the Council was authorized by the General Assembly to sell or lease any school site that was no longer needed for school purposes. 3 1996 lease, page 8 on 31. 4 Ibid., page 5 on 28; the Council never approved the 1996 lease. 'j See 73-87.

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This packet containsMemorandum from the County ExecutiveAmendment No.1 to LeaseDeclaration of CovenantsDeed of Reservation of Right ofRepurchase (revised Nov. 10)Lease 3/29/96Resolution for Council IntroductionResolution authorizing the lease/sale 11129/94Board ofEducation Recommendation 1012512010Aspen Hill Master Plan ExtractZHA, Inc. Technical Memorandum 1116/2006

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number1 - 23 - 10

11 - 1920 - 2324 - 6566 - 6768 - 70717273 - 87

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OLOFFICE OF THE COUNTY EXECUTIVE nC\..s"" E:.HROCKVILLE, MARYLAND 20850Isiah Leggett

County Executive 059122MEMORANDUM

October 18, 2010 X)

TO: Nancy F l o r e e n ~ Council President :9Duchy Trachtenberg, counCi lmembe/ j L _ ~ t 7 1 ~ - - \...'1 --:

FROM: Isiah Leggett, County E x e c u t i v ~ IRE: Melvin J. Berman in Hebrew Academy Exercise ofContractual Purchase Option

I am writing in response to a request from Councilmember Trachtenberg for anupdate on where Executive Staff is on processing a request from the Melvin J. Berman HebrewAcademy (the "Berman Academy" formerly known as the Hebrew Academy ofGreaterWashington) to exercise its contractual purchase option for the former Peary High School site.I am pleased to respond that negotiations on the request have been concluded and I am nowtransmitting to the County Council for its approval documentation reflecting the BermanAcademy's exercise of its purchase option for the Peary High School site.

Under the lease the Berman Academy has the right to purchase the property at anytime during the term. The purchase is subject to the approval of the County Executive, theCounty Council and the Maryland Board ofPublic Works and to any restrictions, conditions, orrequirements that may be imposed upon the purchase. However, the lease requires that theCounty approvals relating to, among other things, conveyance of the property, not beunreasonably .-'ithheld.The methodology of determining the purchase price is set out in the lease.Consistent with that methodology, a purchase price for theJand has been established at$1,914,860. Per the lease, the purchase price for the property acknowledges the poor condition

of the building at lease execution and places value only in the land. The current good conditionof the building is attributable to the significant investment ofmore than $8 million by theBerman Academy.

The conveyance is subject to three conditions. Specifically, the property is to beused as a school pursuant to a restriction that will be recorded with the deed; the County has arepurchase right if the property is abandoned or used for anything other than a school; and the


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Nancy Floreen, Council PresidentDuchy Trachtenberg, CouncilmemberOctober 18, 2010Page 2 of2

gymnasium, auditorium, and outdoor athletic fields that are part of the premises must continue tobe available for use by the public when not being used by the school. .

The County's repurchase price is for the same base land value as it is being soldfor plus payment for the building at a price that is the lesser of i) the then current appraised valueof the secular improvements made by the Berman Academy, or ii) the depreciated actual costs ofthe improvements.

The terms of this exercise differ in several significant ways from terms that hadbeen discussed several years ago. First, the price is different and largely reflects the County'srejection of one of the appraisals that had been used previously. Second, the repurchase right istied to the price that is being paid today and the lesser of the fair market value oftheimprovements or the depreciated actual costs of the improvements. Third, the use of the site islimited to school uses.

With this exercise, the public will, through the Community Use ofPublicFacilities, continue to have use of the fields, the gym and the auditorium during non-school usetimes and the County will receive nearly $2 million dollars in purchase money proceeds. Withthe three conditions that are imposed on the conveyance, I support the Berman Academy'sexercise of its option and I am asking the County Council to also approve the conveyance inaccordance with the above described terms.I f you have any questions, please feel free to contact me or Diane Schwartz Jones

in my office. I ask that you schedule consideration of this matter at your earliest possibleconvenience.

Attachments:Amendment No.1 to LeaseDeclaration of CovenantsDeed and Reservation of Right to RepurchaseLease dated March 29, 1996Proposed Resolution


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AMENDMENT NO.1This Amendment No.1 (this "Amendment") is entered into the day and date below written

by and between MONTGOMERY COUNTY, MARYLAND, a political subdivision of the State ofMaryland, hereinafter called "County" or "Lessor", and MELVIN J. BERl\.1AN HEBREWACADEMY, formerly known as HEBREW ACADEMY OF GREATER WASHINGTON,INC., a non-profit educational organization incorporated in the District of Columbia, with itsprincipal offices located at 13300 Arctic Avenue, Rockville, Maryland, hereinafter called "Lessee."Collectively hereinafter referred to as the "Parties."

WITNESSETHWHEREAS, the County and Lessee entered into a lease dated March 29th, 1996 (the"Lease") for the lease of certain property located in Montgomery County, Maryland, known as theformer Peary Senior High School, which consists of 19.52 acres of land, more or less, thenimproved with a building comprising approximately 220,000 square feet, together with any and allthen existing site improvements, appurtenant rights and benefits of the parcel, located at 13300Arctic Avenue, Rockville, Montgomery County, Maryland, known as Parcel P209, on Tax map HR21, as recorded in Liber 13060 at Folio 122 among the land records ofMontgomery County,Maryland, as shown on Exhibit A attached to the Lease, which land and improvements were

therein and are herein collectively referred to as the "Property" except that as herein used the termProperty also includes all improvements constructed on the land since the date of the Lease orhereafter constructed on the land by the Lessee (the "Property");WHEREAS, the Lease in Article III granted to the Lessee the right to purchase theProperty at any time during the 25 year term or during any of the three five year extensions, subjectto the approval of the Montgomery County Executive ("County Executive") and the MontgomeryCounty Council ("County Council"), and subject to any restrictions, conditions or requirementswhich the County Executive and the County Council might elect to attach to the purchaseWHEREAS, the Lessee's right to purchase the Property under the Lease was furthersubject to the approval of the State of Maryland Board ofPublic Works ("Board ofPublic Works")which also had the right to elect to place restrictions, conditions or requirements on the purchaseWHEREAS, the Lease further provided that the Lessee's right to purchase and theCounty's acceptance thereof was to be exercised in accordance with all applicable State and localstatu,tes and regulations governing the disposition of public property;WHEREAS, Article III further provided that the "baseline" price of the Property was to beestablished by a certain method involving appraisals of the Property all as more specifically setforth in Article III of the Lease and further provided that the baseline price was to be adjustedannually pursuant to a CPI index also all as more specifically set forth in Article III of the Lease;WHEREAS, the Lease further provided in Article XXXVI that certain community uses ofthe Property as set forth in Article XXXVI were to be preserved and reserved for use by the public

pursuant to a recorded declaration of covenants preserving and reserving to the public thecommunity uses as set forth in Article XXXVI of the Lease in the event Lessee purchased theProperty;


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WHEREAS, the County Council Resolution (Resolution No.: 12-1874) adopted November29, 1994, authorizing the disposition of Peary High School and authorizing an eventual sale of theProperty stated that the Property's preferred reuse was to lease the Property to a private school witha lease that should not preclude the future reestablishment of a public education facility on theProperty; andWHEREAS, Lessee has notified the County that it is now exercising its option to purchasethe Property and the County is agreeable to selling the Property upon the terms and conditionshereinafter set forth.NOW THEREFORE, in consideration of the above recitals (which are incorporatedherein) and for other good and valuable consideration the receipt and sufficiency ofwhich arehereby acknowledged by the Parties and subject to the terms, conditions and covenants hereinafterprovided for the County does hereby agree to sell and the Lessee does hereby agree to purchase theProperty in accordance with the following terms and conditions.1. The Parties agree that the unadjusted "baseline" price under theLease is One Million Four Hundred Twenty-nine Thousand Dollars ($1,429,000.00), and thatthrough, December 17,2010, the adjusted purchase price for the Property shall be One MillionNine Hundred Fourteen Thousand Eight Hundred Sixty Dollars ($1,914,860.00) payable by wiretransfer from the to the County on the Settlement Date (the "Purchase Price"). If theSettlement Date is after December 17,2010, the Purchase Price shall be equal to the product ofOne Million Fout Hundred Twenty-nine Thousand Dollars ($1,429,000.00) multiplied by afraction, the numerator ofwhich shall be the most recently preceding published December CPI AllUrban index and the denominator of which shall be the published December 1997 CPI All Urban1982-1984 index, (the "Adjusted Price"). .2. Settlement on the Property shall occur within thirty (30) days ofthe date that all Approvals (as defmed in Section 3, below) for the sale of the Property have beenobtained and have become final and non-appealable without the rejection by the Lessee of anyconditions to such Approvals as set forth in Section 3 below (the "Settlement Date"). On theSettlement Date, the County shall execute and deliver to Lessee a special warranty deed inrecordable form conveying fee simple title to the Property, free and clear of any liens andencumbrances as of the date of the Lease (March 29, 1996).3. The sale of the Property is subject to (i) the approval of the CountyCouncil and any restrictions, conditions, or requirements imposed on the sale by the CountyCouncil which approval shall be evidenced by the adoption of a resolution by the County Councilauthorizing the sale of the Property; and (ii) the approval of (i f any may be required) the Board ofPublic Works and any restrictions, conditions, or requirements imposed on the sale by the Board ofPublic Works which approval shall be evidenced by appropriate action of the Board ofPublicWorks authorizing the sale (i f any may be required); and (iii) compliance with all applicable Stateand local statutes and regulations governing the disposition of the Property (the "Approvals").Lessee cannot reject any conditions that are expressly required by the Lease. Lessee may reject anyother conditions of the Approvals within thirty (30) days of issuance of the respective Approval inwhich case the Lease shall remain in effect and Lessee shall have the right to continue its tenancypursuant to the as amended hereby. Lessee's rejection of a condition must be exercised in
http:///reader/full/1,429,000.00http:///reader/full/1,914,860.00http:///reader/full/1,429,000.00http:///reader/full/1,429,000.00http:///reader/full/1,914,860.00http:///reader/full/1,429,000.00


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vvTiting to be valid and if not so exercised within the thirty (30) day period, Lessee shall be deemedto be exercising the purchase subject to the conditions, if any, of the Approval(s).

4. Covenants. A declaration of covenants shall be recorded on or before the SettlementDate preserving and reserving to the County for the benefit of the public, use of the Property inaccord with the community uses set forth in Article XXXVI of the Lease, all as more specificallyset forth in the Declaration ofCovenants attached hereto as Exhibit A.

5. Additional Covenants. The declaration of covenants referenced in Section 4 aboveshall also include covenants containing restrictions and requirements with respect to insurance,maintenance and use of the Property; and containing a further covenant prohibiting theabandonment or lack of use of the Property as a school (an "Abandonment") for any consecutiveone hundred and eighty (180) weekday period of time unless such lack of use is attributable torenovations or restoration of the Property that would preclude use of the Property during suchperiod oftime and which renovations or restoration are at all times being duly and diligentlypursued, all a? more specifically set forth in the Declaration of Covenants attached hereto asExhibitA.

6. Repurchase Right. The County shall have the right to repurchase the Property in theevent of an Abandonment or if at any time Lessee agrees to sell the Property to any purchaser forany use other than for use as a validly licensed private school or educational institution (a"Proposed Sale"). In the event of any Proposed Sale to a purchaser as provided in this Section, thesales agreement shall be made contingent upon the right of the County to repurchase the Propertyand Lessee shall provide the County with not less than ninety (90) days notice ofthe Lessee'sexecution of the sales agreement and the County shall have the right by written notice to the Lesseeat any time during such ninety (90) day period to give notice to the Lessee of its intent torepurchase the Property (the "Repurchase Right"). Any exercise of the Repurchase Right by theCounty shall be subject to the appropriation of funds by the County Council for such purposewhich appropriation must be obtained by the County within one hundred and eighty (180) days ofthe date the County gives written notice to the Lessee of the County's intent to exercise itsRepurchase Right; provided however, that if the one hundred and eighty (180) day period includesany time period between July 1 t and September 30th the time in which to obtain the appropriationshall be extended day for day by the number of days equal to the number of days of the onehundred and eighty (180) days falling during any period between July 1st and September 30th ("TheAppropriation Period"). If the County fails to obtain the appropriation within the AppropriationPeriod, the County's right to purchase the Property shall lapse and shall be of no further force andeffect; provided, however, that if for any reason the Proposed Sale is cancelled, the County'sRepurchase Right shall not be deemed to have been exercised and the County shall not be obligatedto repurchase the property nor shall the County's Repurchase Right fail or lapse but instead theCounty shall have a continuing Repurchase Right with respect to any subsequently occurringProposedSale or Abandonment.

7. Repurchase Price. The repurchase price by the County pursuant to Section 6 shallbe at an amount equal to the sum of (a) the Purchase Price (as set forth in Section 1, above)increased annually starting on the first anniversary date of this Amendment and on eachanniversary thereafter until the Repurchase Settlement Date (as defmed in Section 8, below) by afraction the numerator ofwhich shall be the most currently published value of the index nowknown as the "U.S. Department oflabor, Bureau of Labor Statistics, Consumer Price Index for all


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Urban Consumers, All Items, (1984 100)", and the denominator ofwhich shall be the value forsaid index published for the month and year of the Settlement Date (as defined in Section 2,above), plus (b) the lesser of (i) the sum of the construction cost of improvements made to theProperty since the date of the Lease which amount is Eight Million Two Hundred Forty-FiveThousand Two Hundred Ninety-Nine Dollars ($8,245,299) (which amount Lessee represents andwarrants accurately reflects the actual cost thereof and which representation and warranty Lesseeacknowledges the County is relying upon in agreeing to such amount) plus the cost of anyQualified Elective Capital (non religious) Improvements (as that term is defined in the Lease) madeafter the date of this Amendment the cost ofwhich shall be submitted by Lessee to the County andsubject to the County's verification thereof (such sum shall be referred to hereafter as the."Aggregate Lessee Improvements"), or (ii) the Appraised Improvements Value (as defined inSection 9, below). (The "Repurchase Price").8. Repurchase Settlement Date. Ifthe County exercises its Repurchase Right,settlement shall occur not sooner than ninety (90) days and not later than one hundred and eighty(180) days from the date that the County Council appropriates the funds necessary to pay theRepurchase Price.9. Appraised Improvements Value. The Appraised Improvement Value shall be thereplacement cost of all Aggregate Lessee Improvements existing on the Property at the time theCounty gives notice of its intent to exercise its Repurchase Right less appropriate depreciationnormally used by an appraiser taking into account the conditions of the Aggregate LesseeImprovements at the time of the appraisal which appraisal valuation date shall be as of the date theCounty gives notice to Lessee of its intent to exercise its Repurchase Right.10. Determination of Appraised Improvements Value. The Appraised ImprovementsValue shall be determined using one of the following methods as agreed to by the Parties: (i) asingle appraiser agreed to by the Parties whose appraisal shall be final and non-appealable; or (ii)each party shall select an appraiser and, if the appraisals are within ten percent (10%) of each other,the average of the two (2) appraisals shall constitute the agreed final and non-appealable AppraisedImprovements Value; or (iii) if the Parties choose method (ii) and the two (2) appraisals differ bymore than ten percent 10%), then the two appraisers shall select a third appraiser, provided that, ifthe two appraisers are unable to agree upon a third appraiser, then either party may request that theWashington D.C. Metro Area Chapter of the Appraisal Institute select a third appraiser (the "ThirdParty Appraiser") and such Third Party Appraiser shall, based on a review of the two appraisalsand based on the Third Party Appraiser's own independent appraisal of the AppraisedImprovements Value determine the Appraised Improvements Value which shall constitute theagreed and non-appealable Appraised Improvements Value. The term appraiser as used in thissection shall mean a licensed real estate appraiser having experience in the valuation of improvedreal estate in the Washington, D.C. metropolitan area, and who is a member of the AppraisalInstitute (Each certified as an "MAl appraiser").11. Release of Covenants. In the event the Lessee sells the Property to any purchaser,pursuant to any Proposed Sale, and the County fails to exercise its Repurchase Right, as provided

in Section 6 above, then in such event the County agrees (at no cost to the County) that it willexecute such instrument(s) as may reasonably be requested of it by the Lessee or purchaserreleasing the declaration of covenants excepting the covenant regarding community use set forth in


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the Declaration of Covenants attached hereto as Exhibit A which covenant shall remain in fullforce and effect and continue to run with the Property.

12. Authority to Bind. The undersigned, by their signatures, individually represent andwarrant that this Amendment and its execution has been duly authorized by all necessary actionswhatsoever on the part of each party to this Amendment, and that they are duly authorized andempowered to execute this Amendment and that this Amendment is binding on the respective partyon whose behalf they are signing this Amendment.

13.' Authorship and Interpretation. Each party acknowledges that this Amendment isentirely the product of the collective joint drafting efforts of the Parties and their respective legalcounsel, and should there be any cbim of ambiguity, it shall not be construed more strictly against(or more favorably for) either party solely as a result ofthat party's particular contribution to thiseffort.

14. Successors and Assigns. The terms of this Amendment shall be binding upon andfully enforceable against the successors, successors-in-title, and assigns of the Parties to thisAmendment.

15. Severability. If any provision of this Amendment proves to be illegal, invalid orunenforceable, the remainder of this Amendment shall not be affected by such finding, and in lieuof each provision of this Amendment that is illegal, invalid or unenforceable, a provision will beadded as a part of this Amendment as similar in terms to such illegal, invalid or unenforceableprovision as may be possible and be legal, valid and enforceable.

16. Entire Agreement. This Amendment sets forth the entirety of the undertakings andobligations of the Parties hereto with respect to the matters addressed herein and supersedes allprior understandings and agreements, and the Parties acknowledge that they have not relied uponany representations by the other party as to the matters set forth herein apart from those set forth inthis Amendment.

17. Modifications. Any modifications of this Amendment must be in writing and signedby both of the Parties to this Amendment.18. Governing Law. This Amendment shall be governed by and interpreted inaccordance Vvith the laws of the State ofMaryland.19. Venue. The Parties agree that the venue for any suit or dispute arising out of orrelating in any way to this Amendment shall be the Circuit Court for Montgomery CountyMaryland and the Parties hereby waive any right to bring any suit in any other court or to raise anyclaim that venue in the Circuit Court for Montgomery County Maryland is for any reason

inconvenient or improper.20. Counterparts. This Amendment may be signed in counterparts, each constituting an

original. Photocopies or facsimile transmissions of signatures shall be deemed original signaturesand shall be fully binding upon the Parties to the same extent as original signatures.21. No Assignment ofRights and no Delegation ofDuties. The Parties acknowledge


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that the rights and obligations of each under this Amendment are personal and may not be assignedor delegated by either party without the prior written consent of the other party, which consent maybe granted, withheld or conditioned as the party in its sole discretion shall determine, providedhowever, that either party may act through a properly authorized agent having authority to act onbehalf of the party. Either party shall provide to the other party upon request written evidence ofthe authority of any such agent to act on behalf of the party.

22. Recording. Lessee and County shall each have the right to record this Amendment,or to execute a Memorandum of this Amendment and have it properly acknowledged for thepurpose of recording. Such Memorandum shall have included therein such of the provisions hereofas may be requested by either of the Parties. The cost of recording such a Memorandum or theAmendment (including all stamps, conveyance, recordation and other taxes incident thereto) shallbe borne by the party so requesting.

23.. Full Force and Effect. Except as expressly provided in this Amendment the Leaseshall remain otherwise in full force and effect until the Settlement Date upon which date the Leaseshall expire and be of no further force or effect.24. Waiver of Jurv TriaL THE PARTIES HEREBY WAIVE THE RlGHT TO TRlAL

BY JURY ON ANY DISPUTE OR MATTER ARISING FROM THE LEASE OR THISAMENDMENT.25. Effective Date. The Effective Date ofthis Amendment is the date upon which all

the signature pages hereto are fully executed and delivered to each of the Parties (either as originalsor as facsimile copies, or both).

SIGNATURE PAGE FOLLOWS


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IN \\1TNESSWHEREOF, the Parties have affixed their signatures to this Amendment onthe day and date below written.

WITNESS OR ATTEST: MONTGOMERY COUNTY, MARYLANDBy:_________ (SEAL)Diane Schwartz Jones

Assistant ChiefAdministrative OfficerDate:

MELVIN J. BERMAN HEBREW ACADEMYBy: _____________________ ,

Daphna RaskasPresidentDate:

RECOMMENDED: DEPARTMENT OF GENERAL SERVICES

David E. Dise, Director Department of General Services

APPROVED AS TO FORM AND LEGALITYOFFICE OF THE COUNTY ATTORNEYBy: _________________________

John J. FisherAssociate County AttorneyDate:

STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:

7(j)


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ON THIS day of , 20 10, before me, the undersigned officer,personally appeared Isaiah Leggett, County Executive for Montgomery County, Maryland, knownto me to be the person whose name is subscribed to the foregoing, who did fully acknowledge thathe executed the same as his voluntary act and deed for the purposes therein contained.

WITNESS my hand and official seal the same day and year first above written.

Notary Public

My Commission Expires:________STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:

ON THIS day of ,2010, before me, the undersigned officer,personally appeared Daphna Raskas, President of the Melvin 1. Berman Hebrew Academy knownto me to be the person whose name is subscribed to the foregoing, who did fully acknowledge that

executed the saine as his voluntary act and deed for the purposes therein contained.WITNESS my hand and official seal the same day and year first above written.

Notary Public

My Commission Expires:________


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DECLARATIONOF COVENANTS

This DECLARATION OF C O V E N A L ~ T S (this "Declaration") is made the day of and datebelow'WTitten, by MONTGOMERY COUNTY, MARYLAND, a body corporate and politic, it's.successors and assigns (hereinafter referred to as "County"), and MELVIN 1. BERMAN HEBREWACADEMY, a non-profit educational organization incorporated in the District of Columbia, withits principal offices located at 13300 Arctic Avenue, Rockville, Maryland, it's successors andassigns (hereinafter referred to as the "Academy").

WHEREAS, the County is the owner of certain property located in Montgomery County,Maryland, known as the former Peary Senior High School consisting of all that piece or parcel ofland described in the deed between the Board of Education of Montgomery County, Maryland andMontgomery County, Maryland dated October 17, 1994, and recorded among the Land Records ofMontgomery County, Maryland in Liber 13060, folio 122, et seq., more particularly described as

All that parcel ofland conveyed to the Board of Education of Montgomery County,Maryland by Edith E. Matthews, by deed dated April 28, 1958, and recorded amongthe Land Records of Montgomery County, Maryland, at Liber 2457, Folio 339consisting of a total of 19.52 acres, more or less, being known as the former PearySenior High School.together with all improvements, rights, privileges and appurtenances to the same belonging (the"Property") ; and

WHEREAS, the County intends to convey the Property to the Academy; and,

WHEREAS, as part of the consideration for the transfer of the Property to the Academy, theAcademy agrees to subject the Property to certain covenants for the benefit ofMontgomery County,Maryland, in its capacity as a government; and,

'VVITNESSETH: .

The Academy, with full authority to execute deeds, mortgages, other covenants, and otherrights, titles, and interest in real property owned by the Academy, does hereby covenant to thebenefit of Montgomery County, Maryland, as follows:


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COVENANTS:

1. COMlvillNITY USE:A. The Academy shall make certain facilities on and within the Property available for

continuing use by the community on an "as available" basis. These facilities are the(currently existing or any single replacement, but not future additional) Gymnasiumand Auditorium within the building, as well as the outdoor athleticfields that are partof the Property. These facilities will be made available for use by the public on theterms set forth in this Declaration and as will be further set out in a memorandum ofunderstanding to be negotiated and mutually agreed between the Academy and theMontgomery County Office of Community Use of Public Facilities ("CUPF"). Theparties contemplate that such memorandum will conform in general concept vvith theguidelines and regulations for community use of public schools, published by theMontgomery County Community Use of Schools Program, as established by theMontgomery County Code 1994, as amended, Chapter 44, Article I, School FacilitiesUtilization Act and may be updated annually or otherwise as the parties mutuallymay agree. The parties also understand that such arrangement shall include (but notbe limited to) the following provisions:

(i) The Gymnasium and the Auditorium will be made available only on ascheduled basis,and at times when such community use will not interfere with theAcademy's use.

(ii) The Academy shall be identified in any facility use license or similaragreement as an indemnitee, and the CUPF either shall require all users not coveredunder the County's self-insurance fund ("SIF") to maintain insurance to cover suchuse that identifies the Academy and the County as additional named insureds, orshall stipulate that as to those covered under SIF that the County's self-insurance(including its coverage, notice, and other limitations and requirements including,without limitation, the Maryland Tort Claims Act) will cover those uses by theCounty or County agencies. Provided further that nothing contained herein shall be

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construed as a waiver of the County's sovereign immunity nor create any rights inany third parties.

(iii) Users of the facility will be responsible for the Academy's costs not alreadybeing incurred by the Academy for building operation and personnel incurred inconnection with such use and for compliance with parking regulations. Although theCUPF use program may contemplate the potential rental of additional equipmentassociated with use of the Gymnasium and the Auditorium and establish a rentalschedule for such equipment, the parties understand that such rentals are not requiredunder this Declaration and are to be at the Academy's sole discretion and at suchrates as may be established by the Academy, provided, however, that equipmentnormally maintained and used with respect to, and located on the premises of, theoutdoor recreational areas by the Academy shall be provided and maintained by theAcademy for CUPF users at no cost.

(iv) In addition, the County recognizes the safety and security concerns associated\'lith public access to the interior of the building, and accordingly, the Academy mayrequire such security measures (or reimbursement for reasonable securityexpenditures required specifically and solely due to the permitted use) as itreasonably deems necessary for such purpose.

(v) The parties understand the religious character of the Academy and thus agreethat no community use pursuant to this Declaration shall be permitted for theGymnasium or Auditorium during the Jewish Sabbath and Jewish holidays.

B. The Academy shall have the exclusive use of the outdoor recreational areas andathletic fields until 6:00 p.m. Monday through Thursday and until 3:30 p.m. onFriday. After those hours during the week and all day Saturday and Sunday, theseoutdoor areas will remain available, on a continuing basis, for use by the communitysubject to paragraph I.A hereof. In the event the Academy requires the use of theseareas during the times normally reserved for community use, the Academy willschedule such use with the CUPF.

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C. The Academy may not materially alter the dimensions or character of the athleticfields, as generally depicted on Exhibit A attached hereto and incorporated as iffully set forth in this Declaration of Covenants, without notifying and obtaining thewritten approval of the County. Notice of any change must be communicated inwriting and accompanied by accurate drawings and plans of the proposed change.The County may grant, deny, or condition any requested change in the County'sdiscretion; however, consent shall not be unreasonably withheld. Provided furtherhowever that the Academy may relocate the athletic fields to other locations on theproperty without the consent of the County provided that the relocated athletic fieldsretain substantially the same dimensions and characteristics of the athletic fields asgenerally depicted on Exhibit A; and can be used at least for the same purposes andin the same manner as existed at the time of the execution of these Covenants.

2. MAINTENANCE OF PROPERTY: The Academy shall, at its sole cost and expense, keepthe Property in good repair at all times and shall maintain the property in a condition at leastequal to similar private schools operated throughout the County. The Academy, except inthe case of required repairs (the duration of which the Academy shall seek to minimize tothe extent commercially practicable) shall maintain those facilities available for communityuse in such a condition as shall make them at all times available for, and not interfere with,the use of them by the public as provided for in the preceding Section 1.

3. INSURANCE: The Academy must obtain at its own cost and expense and keep in full forceand effect at all times the following insurance coverages with an insurance company(ies)licensed to do business in the State of Maryland. The Academy must provide evidence ofcoverage by submitting a certificate of insUrance and/or certified copies of the insurancepolicies to the County as reasonably requested by the County. The Academy's insuranceshall be primary.

A. General Liability: Minimum One Million Dollars ($1,000,000.00) combined singlelimit for bodily injury and property damage coverage per occurrence, including thefollowing coverages: Contractual Liability; Premises and Operations; IndependentContractors; and Personal Injury Coverage.

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B. Property Insurance: The Academy shall also provide all risk property damageinsurance for 100% of the value of the secular (non-religious) buildings and contentson the Property against all risks of direct physical loss or damage, includingexpenses of removal of debris of such property damage by an insured peril. TheProperty policy shall contain a 100% replacement cost endorsement, and shall coverdemolition and clearing costs. The Academy shall make a claim for all covereddamage to the Property or make such repairs with its 0'WIl funds \vithin the timeprescribed in the Property insurance policy for the making of claims. All insuranceproceeds received by the Academy as a result of any covered casualty must be usedby the Academy solely for the purposes of repair and/or replacement of the propertydamaged by the covered casualty, unless otherwise agreed to in writing by theCounty. In the event that the Academy does not intend to use the Property policyproceeds to replace the claimed loss, then no claim on the Property policy shall besettled without the written approval of the County.

C Additional Insured: Montgomery County Government must be named as anadditional named insured on all liability policies.

D. Policy Cancellation: Forty-five (45) days written notice to the County ofcancellation or material change of any of the policies is required.

Certificate Holder: Montgomery County Government, Department of GeneralServices, 101 Monroe Street, 9th Floor, Rockville, Maryland 20850.

4. USE OF PROPERTY: The Property may be used only for private educational use, and asincidental uses related and accessory to use for private educational purposes, use for daycareand worship services, private educational day camp and private religious education center.The Academy must not change the use of the Property, or sell, or transfer (with or withoutconsideration) the Property to any person or entity for any use other than such operation of aprivate educational facility and such related and accessory uses unless and until theAcademy has first offered to sell the Property to the County for the Repurchase Price as thatterm is defined in Amendment No.1 (the "Amendment") to that certain lease ofthe Property

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by and between the County and the Academy dated March 29, 1996 (the "Lease"); and inaccord with the terms and conditions of the Amendment regarding exercise of the County'sRepurchase Right (as defined in the Amendment). The Academy agrees that it will besolely responsible for any and all governmental use or occupancy permits or any otherpermits or approvals necessary to establish and:continue this use of the Property.

5. ABANDONMENT: If the Academy shall fail to use the Property as a school (an"Abandonment") for any consecutive one hundred and eighty (180) weekday period of time,unless such lack of use is attributable to renovations or restoration of the Property that wouldpreclude use of the Property during such period of time and which renovations or restorationare at all times being duly and diligently pursued, the same shall be deemed an abandonmentof the Property and shall entitle the County to proceed with any and all of its enforcementrights as provided in Section 9 of this Declaration and shall entitle the County, at theCounty's election (but the County shall not be required to do so), to reacquire the Propertyby exercising its Repurchase Right for the Repurchase Price (as those terms are defined inthe Amendment).

ENFORCEMEl'i'T:

6. The covenants herein contained shall run with the Property and shall bind the Academy, itsheirs, executors, administrators, successors, and assigns.

7. The Academy or its successors and/or assigns shall be permitted to modify, amend or restatethis Declaration, provided the Academy has first obtained the prior written consent of theCounty to such modification, amendment or restatement, which consent may be granted,denied, or conditioned, in the County's sole discretion.

8. The rights and interests granted by this Declaration shall be of no force and effect unless anduntil the Academy fust acquires fee simple ownership of the Property. This Declaration shallterminate and be of no further force and effect if the Academy does not acquire the Propertyfrom the County.

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9. A violation of any of the provisions herein contained shall give to the County the right tobring proceedings in court against the party or parties violating or attempting to violate anyof said covenants, conditions, restrictions, and reservations, to enjoin them from so doing, tocause any such violation to be remedied, and/or to recover damages resulting from suchviolation. Further, every act, omission to act, or condition which violates the provisions ofthis Declaration shall constitute a nuisance and every remedy available in law or in equityfor the abatement of public or private nuisances shall be available for the abatement thereof,excepting any self-help remedies. Such remedies shall be cumulative and not exclusive ofany' and all other rights and remedies that the County may have at law or in equity for anyviolation of this Declaration, excepting only any self-help remedies.

10. The Academy, shall record, or shall cause this DeclaratIon to be recorded, among the landrecords of Montgomery County simultaneously with the recordation of any deed conveyingthe Property to the Academy. All costs of recordation shall be paid by the Academy; andthe Academy shall provide the County with a copy of the recorded Declaration as soon asthe same is available from the Clerk of the Court.

SIGNATURE PAGE FOLLOWS

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IN T E S T I M O ~ r y WHEREOF the parties have hereunto set their hands and seals the dayand date below written.WITNESS OR ATTEST: M O N T G O M E R Y C O U N T Y , M A R Y L ~ N D

By: --------------------- , Isaiah LeggettCounty ExecutiveDate:- - - - - - - - - - - - - - - - - - - - MELVIN J. BERMAN HEBREW ACADEMYBy: _____________________

Daphna RaskasPresident


David E. Dise, DirectorDepartment of General ServicesDate:_______________________APPROVED AS TO FORM AND LEGALITYOFFICE OF THE COUNTY ATTORNEYBy: _________________________

John J. FisherAssociate County AttorneyDate:

Page 8 of10


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STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:ON THIS day 2010, before me, the undersigned officer, personallyappeared Isaiah Leggett, County Executive for Montgomery County, Maryland, kno\vn to me to be

the person whose name is subscribed to the foregoing, who did fully acknowledge that he executedthe same as his voluntary act and deed for the purposes therein contained.


Notary Public

My Commission Expires: ________STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:

ON THIS day 2010, before me, the undersigned officer, personallyappeared Daphna Raskas, President of the Melvin J. Berman Hebrew Academy, known to me to bethe person whose name is subscribed to the foregoing, who did fully acknowledge that he executedthe same as his voluntary act and deed for the purposes therein contained.WITl'ffiSS my hand and official seal the same day and year first above written.

Notary Public

My Commission Expires:________

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PARCEL ID NO. 13-502-954274DEED AND RESERVATION OF RIGHT TO REPURCHASE

THIS DEED AND RESERVATION OF RIGHT TO REPURCHASE (the "Deed"), ismade this _ day of 2010, by and between MONTGOMERY COUNTY,MARYLAND, a body corporate and politic and a political subdivision of the State of Maryland(the "GRANTOR") and the MELVIN J. BERMAN HEBREW ACADEMY, a District ofColumbia nonstock corporation organized under the laws of the District of Columbia andqualified to do business in the State of Maryland and having a detennination tetter from theInternal Revenue Service as to its status as a qualified organization under 501 (c) (3) of theInternal Revenue Code of 1986, as amended and the successors, heirs and assigns of theMELVIN J. BERMAN HEBREW ACADEMY ( the "GRANTEE"), (the GRANTOR andGRANTEE together the "Parties").IN CONSIDERATION of the payment of One Million Nine Hundred Fourteen ThousandEight Hundred Sixty Dollars ($1,914,860.00) by GRANTEE TO GRANTOR, and ofGRANTEE's past expenditures to rehabilitate the Property, and in reliance upon GRANTEE'sacceptance of tile covenants and conditions contained in the declaration of covenants attachedhereto as Exhibit A (the "Declaration of Covenants"), and GRANTOR's right to repurchaserecited below, the GRANTOR does hereby grant to GRANTEE as sole owner in fee simpleabsolute, subject to the limitations set forth in the Declaration of Covenants and GRANTOR'srights to reacquire the Property as covenanted below, certain property located in MontgomeryCounty, Maryland, known as the former Peary Senior High School, consisting of all that piece orparcel of land described in the deed between the Board of Education ofMontgomery County,Maryland and Montgomery County, Maryland dated October 17, 1994, and recorded among theLand Records of Montgomery County, Maryland in Liber 13060, folio 122, et seq., moreparticularly described as

All that parcel of land conveyed to the Board of Education of MontgomeryCounty, Maryland by Edith E. Matthews, by deed dated April 28, 1958, andrecorded among the Land Records of Montgomery County, Maryland, at Liber2457, Folio 339 consisting of a total of 19.52 acres, more or less, being known asthe former Peary Senior High School.together with aU improvements, rights, privileges and appurtenances to the same belonging,subject to the conditions and covenants stated below (the "Property")

TO HAVE AND TO HOLD the Property, and all improvements thereon, to the use andbenefit of the GRANTEE as sole o w n e r ~ SUBJECT, HOWEVER, to all easements, covenants and restrictions of record, including,without limitation, the Declaration of Covenants and to the foHowing right of G R A . J . ~ O R toreacquire the Property:


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RIGHT TO REPURCHASE GRANTOR-hereby grants the Property to GRANTEE and GRANTEE accepts theProperty subject to the limitation that tbe Property may be used only for private educational use,and as incidental uses related and accessory to use for private educational purposes, use fordaycare and worship services, private educational day camp and private religious educationcenter. GRANTEE must not change the use of the Property, or sell, or transfer (with or withoutconsideration) the Property to any person or entity for any use other than such operation of aprivate educational facility and such related and accessory uses unless and until GRANTEE hasfirst offered to sell the Property (including any secular (non-religious) improvements hereafterconstructed thereon) to GRANTOR for the Repurchase Price as that teml is defined inAmendment No. 1 (the "Amendment") to that certain lease of the Property by and betweenGRANTOR and GRANTEE dated March 29, 1996 (the "Lease"); and in accord with the termsand conditions of the Lease Amendment regarding exercise of the County's Repurchase Right(as defined in the Amendment).

REAQUISITION BY MODIFIED CONDEMNATIONIn addition to the Grantor's Repurchase Right provided for above, nothing herein isintended to be in limitation of the Grantor's right of eminent domain. If a condemnation actionis brought based on need by the Montgomery County Public School System (MCPS) for aschool, Grantor shall have the right to reacquire the Property by condemnation, providedhowever. that in any such condemnation action the Grantor and Grantee agree that (i) the fairmarket value of the Property otherwise required to be paid by the Grantor to the Grantee in anysuch condemnation action is waived. by Grantee and the G-rantor and Grantee instead agree thatthe fair market value of the Prope11y payable by the County in any such condemnation action foran MCPS school shall be an amount equal to the R e p u r c h ~ e Price as provided in Section 7 ofthe Lease, (ii) in the event the Grantor prevails in the condemnation action, notwithstanding any

provision to the contrary regarding the timing of transfer of title and possession of the Propertyprovided by law. the Grantor waives any such rights and the Grantor and Grantee agree that thetime in which the Grantor shall be entitled to the transfer of title to the Grantor and repossessionof the Property by the Grantor after the condemnation action becomes fmal and non-appealable,shall be not less than five (5) years from tlle date that such condemnation becomes final and nonappealable, (iii) Grantee, except with respect to the fair market value compensation for theProperty which shall be instead controlled by subsection (i) of this provision, shall be entitled toany and an other compensation to which Grantee might otherwise be entitled in anycondemnation action, including without limitation any relocation expenses; and (iv)notwithstanding the provisions of subsection (ii) if the Grantee tenders title to the Property to theGrantor at any time before or after the conqemnation action becomes final and. non-appealable,then upon the occurrence of such event, Grantor shall pay to Grantee the Repurchase Price at thattime and Grantee during the five (5) year period provide for in subsection Oi) shall be entitled tocontinue to occupy the Property under the same tenns and conditions as provided in the Lease .and upon the conclusion of such five (5) year period Grantee shall thereupon vacate the Propertyleaving it in the condition as provided in tlle Lease and the Grantee shall have no further right topossession or occupancy of the Property.

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IN WINESS WHEREOF, the Parties have executed this Deed under seal on the date firstwritten above, it being the specific intention of the Parties to create a specialty.

WITNESS ORAITEST: MONTGOMERY COUNTY, MARYLANDBy:_ _ _ _ _ _ _ _ _ (SEAL)Isaiah Leggett

County ExecutiveDate: - - - - - - - - ~ - - - - - - - - - - -

MELVIN J. B E R M A , . ~ HEBREW ACADEMYBy:

--------------------- , -Daphna RaskasPresidentDate:


David Dise, Director Department of General Services Date:---'.__________________APPROVED AS TO FORM AND LEGALITYOFFICE OF THE COUNTY ATTORNEYBy: _______________________

John J. FisherAssociate County Attorney

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STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:ON THIS day 2010, before me, the undersigned officer,personally appeared Isaiah Leggett, County Executive for Montgomery County, Maryland,

known to me to be the person whose name is subscribed to the foregoing, who did fullyacknowledge that he executed the same as his voluntary act and deed for the purposes thereincontained.

WITNESS my hand and official seal the same day and year first above \vritten.

Notary Public

My Commission Expires:________STATE OF MARYLAND, COUNTY OF MONTGOMERY, to wit:

ON TillS day 2010, before me, the undersigned officer,personally appeared Daphna Raskas, President of the Melvin J. Berman Hebrew Academy,known to me to be the person whose name is subscribed to the foregoing, who did fullyacknowledge that he executed the same as his voluntary act and deed for the purposes thereincontained.


Notary Public

My Commission Expires:________CERTIFICATION: This Deed has been prepared by the undersigned, an attorney du1y admittedto practice before the Court of Appeals ofMaryland.

John J. FisherAssociate County Attorney

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LEASEAGREEMENT BETWEEN

. MONTGOMERY COUNTY, MARYLAl.'ID A.ND

TIffi HEBREW ACADEMY OF GREATER WAS1:IWGTON DATED: 3 1 ' J - " I l q ~

DEFINTIIONS . . . . : . . . . . . . . . . . .' . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . :. -5ARTICLE I - LEASED PREWSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7:ARTICLE II - RENOVATIONPERlOD, LEASE TERM, AND EXPIRATION . . . . . . . . . , -7ARTICLE III - RIGHT TO PURCHASE . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . -8ARTICLEIV-RENT . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . -11ARTICLE V -LESSEE'SINSlJR.AJ."'TCE . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . -13

"ARTICLE VI - LESSEE'S nIDE1vfNIFICATION . . . . '. . . . '.' . . . . . .". . . . . . . . . . . . . . ". . . -14.ARTICLE VIl- LIENS, CLAWS OR NCU1vl:B RANCE S . . . . . . '. . . . . . . . . . . . . . . . . . . -15

ARTICLE VIIl- REPAIR, RENOVATION AND IMPROVEi\1ENTS . . . . . , . . . . . . . . . . -16-" ARTIGLE IX - CONSTRAINTS . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . -20ARTICLE X - CONSTRUCTION, ALTERATIONS, CONDITION OF PREWSES . . . . . . -21.ARTICLE Xr- GENERAL lVLAJNTEN.ANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-ARTICLE:xII - :MAINTENANCE OF PROPERIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22ARTICLE XIII - SIGNS OR MONUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23ARTICLE XIV - PARKING AREAS AND LOADING ZONES . . . . . . . . . . . . . . . ; . . . . . -23ARTICLE XV - TENfPORARY STRUCTURES . . . . . . . . . . . . . . . .. . . . . . .. . . .. .. . . . . -24ARTICLE XVI - TERM At'ID ENFORCE1v.!ENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24. . . . .ARTICLE XVII - EXPIRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - . . . . . . . . . . -26


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. " ~ " " - - ' - ~ - - - . , ~ - ~ ~ , = ' ' ' ' ' - ' ' , .- -'--'-"- - ' ," . _..... -,_.. ",, ..... "

10.:" ARTICLEXVDI - TENANT HOLDmG OVER ............... : ................. -27ARTICLE XIX - MORTGAGE OF LESSEE!S LEASEHOLD INTEREST ll'r THE DEMISED

PREWSES ......... . . . . . : ........................" ............... '. . -27ARTICLE XX-ASSIGNMENT AND SUBLEASll'rG ............................. -27ARTICLE XXI - SUCCESSORS A}-i'D ASSiGNS ........... '. . . . . . . . . . . . . . . . . . . . . . -29, ,ARTICLE XXII - QUIET ENJOYMENT, TITLE TO LAND AND Th1PRO'lEMENTS " . . -29ARTICLE XXIII - SURRENDER, WAIVER.AND AtvfENDMENT .................. -30ARTICLE XXIV - NON-DISCR.:fMmATION IN E1v1PLOYMENT AND SERVICES . . . . -31ARTICLE:XXV - DISPlJ1'ES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32ARTICLE XXVI - CONTRACT SOLICITATION ................................ -32ARTICLE XXVII - PUBLIC E1vfPLOTh1ENT . . . _............. - . . . . . . . . . . . . . . . . . -33ARTICLE XXVIII - GOVERNlNG LAW ........................., . . . . . . . . . . . . . . -33ARTICLE XXIX - RnCORDING . . . . . . . : . . '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34

ARTICLE XXX - ENTIRE AGREEMENl .............................. . ' . . . . . . . -35~ ~ 'RTICLE XXXI - EX1IIBITS ....... ........ ...... . . . . . . . .. " ............................ " .. .. -35

ARTICLE xx:x:rr -NOTICES -35ARTICLE JCXXJII - NON..:MERGER ..................... _.................... -36ARTICLE XXXIV - CAPTIONS, PRONOUNS .................................. -37ARTICLE XXXV - USE OF THE PROPERTY .................. . . . . . . . . . . . . . . . . _ -37-. ARTICLE:x:x:x:VI - CON:!1YIIJNITYUSE ....................................... -38

, 'I . "


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, r';..... ": ~ . 41

LEASE

TIllS L E A ~ E ,made this _.__ day of______ ---->', 19---, by and betweenMONTGOMERY COUNTY, MARxLAND a political subdivision of the State ofMaryland,hereinafter:called "County" or "Lessor''. and TIlE HEBREW ACADE1vfY OF GREATERWASHll'fGTON, mc" a non-profit educational organization incorporated in the District of

. .Coluoibia, with its principal offices located at 2010 Linden Lane, Silver Spring, Maryland20910, hereinafter called "Lessee."

WITNESETH

"WF:IEREAS, the County is the ovro.er of certain real property located in MontgomeryCounty, Maryland, lmovro. as the former Peary Senior High School, which consists of 19.52 acresof land, more or less, improved with a building comprising approximately:220,000 square feet,together with any and all site improvements, appurtenant rights and benefits of the parcel, located

. .at 13300 Arctic Avenue, Rockville, Montgomery County, Maryland, knO'i'1n as Parcel P209, on"Tax Map HR21, as recorded in Liber 13060 at Folio 122 among the land records ofMontgomery

County, Maryland., as shovro. on Exh,ibit A attached hereto and made a part hereof, which landand improvements are hereinafter collectively referred' to as the IIPremises"; and

W H E ~ A S , pursuant to Article ~ 5 A of theAnnotated C o d ~ ofMaryland., the County hasauthority to dispose of any real or leasehold property belonging to the County, provided theproperty is no longer needed for public u s e ~ and


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'WBEREAS, the County, under authority ofSection 4-114 o f t h e . M a r y l ~ d EducationCode Ann., has authority to dispose of school property that has been declared surplus to publicneeds; ap.d

WHEREAS, as a surplus school, the Premises were approved for disposition by theMontgomery County Council, by Resolution No. 12-1874, adopted on November 29,1994,pursuant to the requirements of Section 4-114 of the Ma..-yland Education Code .A.Iin., theCouncil having approved a lease with a..'1option to pm-chase i f supported by the Aspen HillMaster Plan; and .

\VHEREAS, pursuant.to Montgomery County Council Resolution 12-1874, theMontgomery County Government solicited proposals for the reuse and/or disp9sitionof thePremises in 1995; and

WHEREAS, Lessee submitted to the ~ o u n t y a proposal for the reuse of the Premises, as aprivate educational institution, which proposal the County has accepted; and

WHEREAS, Lessee desires to lease the Premises with an option to purchase, inaccordance with the terms and conditions of this Agreement, and the County has agreed to leasethe Premises and grant an option to purchase to Less"ee in accordance "With these provisions; and

, . "

WHEREAS, this lease is subject to completion of the public notice procesS of the termsand conditions ofthls iease, in accordance with provisions ofArticle 25A, Section 5(B) of theAnnotated Code ofMaryland;

NOW, 'tHEREFORE, in consideration of the financial conditions hereinafter reserved,other good and valuable consideration, and the covenants hereinafter contained, the County doeshereby lease and demise the Premises unto the Lessee, and the Lessee does hereby rent the'Premises from the County, in a c ~ o r d a n c e with the following terms and conditions:
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f '

DEFINITIONS.The following definitions are e ~ b l i s h e d with regard to this Lease:.L ~ term "Building" shall refer to the Peary Senior High School building

currently located on the Premises, to be repaired and renovated by Lessee, and such other andfurther construction a,s may be allowed on the Premises consistent with applicable: laws andregulations, subject to the COlIDty'S approvaL

2. The te:rrn "County" shall refer to .Montgomery Cotmty, Maryland, as the owner,and grantor ofuse rights. Statements which indicate the " C O ~ t y l ' approval have reference onlyto rights, consent and agreement as related to the ownership, development and conveyance of ibisproperty, and not to other required Cotmty r e ~ a t b r y approvals. The COtmty as land owner shallcooperate with the Lessee in filing any. a p p l i ~ a t i o n for zoning or land use per:mts and

. .pemiissions to proceed with its work on the Premises in a timely marmer at the earliest possibledate.

3. Wherever the phrase "approval oithe Countyll is used i t shall, mliess othenviseprovided, mean that such approval shall not be UnIe:asonably withheld .

4. Unless otherwise provided, the term "days" shallrefer to business days whereverreference is made herein to less than s ~ v e n (7) days. Otherwise the term "days" shall refercalendar days.

5. The term "Improvements" shall ~ e f e r t? any structtrre, fixture or otherimprovements including fixed or attached equipment now located or hereinafter erected upon thePremises, including, but in no way limited to the Peary building and appurtenant facilities,


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,. together with other buildings or accessory structtires, parking lots, landscaping, etc. now forrrringpart of the Premises

.6. The term "Lessee ll shall refer to The H ~ b r e w Academy of Greater Washington,Inc., a non-profit educational organization, its successors and permitted assigns.

7. The term "Occupant" shall indude any person or persons who, by reason ofemployment or other S""t.2.ui.s, occupy space on or 'Nitbin the Premises and Improvep1ents.

8. The term "Lease Year" shall refer to the one year period following thecommencement of the full term of this Lease, and to each .successive one year period thereafter.

9. The term "Renovation Period" shall refer to the t w o ~ y e a r period followingcommencement of this Lease, during which Lessee shall underia..lce the repair and renovation ofthe PrerOises as set forth herein. During the renovation period, the Lessee shall be fullyresponsible for the Premises, and shall observe all of the terms and conditions of this lease. Thetwo year renovation period, however, shall not be counted as part of the full twenty-five yearterm of this Lease.

10. The term '


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'.r ~ m o v a l ofbazardous or toxie substances, window replacement, and other similar workmandated by.C01mty, State or Federal code or regulation.

12. . The term "Qualified Elective Capital Improvements" shall refer to elective capital. .. mprovements or additions to the building that have been reviewed and approved inwriting by .

the County anellor the Montgomery County Public School System, as having potential value tothe County i f it receives the building in the :future for a schooL

ARTICLE TLEASED PREMISES

The County hereby leases the Premises Unto the Lessee in consideration ofthe terms andconditions oftbis Lease, as more fully set forth below.

ARTICLE IIRENOVATION PERlOD, LEASE TERM. AND EXPlRAnON

1. Lessee shall accept possession of the leased Premises and full responsibilitytherefor on the 15th day ofApril, 1996. Said acceptance of the Premises by Lessee shall. . ' . .commence a two-year renovation period, during which Lessee shall undertake repairs.an\frenovations to the Premises as set forth herein. During this renovation period, Lessee shall abideby and be held to all of the terms and conditions of this Lease. Upon the expiration of the two-year renovation period, the lease shall continue for a period of twenty-five (25) years,commencing on the day following expiration of the tvlo-year Renovation Period. The Lessee.

. .shall have the option to extend the:full term of this Lease for three (3) additional and consecutivefive (5) year periods, under the same terms and conditions herein contained,.subject to the

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c.ounty's right to terminate, as, s ~ t forth ~ A r t i c l e II, Sect ion (2) herein.. The Lessee shall. 'provide twelve (12) months' advance written notice to the County of its election to exercise each

option to extend.2. In the event the leased Premises are needed by the County fo r public education

purposes, the Cou:rrtymay terminate this L e a s ~ , by providing to Lessee five (5) years' advancewritten notice o.fits election to ter.minate, at any time after the conclusion of the ttventy-five yearlease term. This Lease shall automatically terminate upon the expiration of the Lease teIm andany extension thereof, "'iVithout notice or demand from the County.

ARTICLEllRlGHT TO PURCHASE

The Lessee shall have the right to pur,chase the Premises at any time during the lease ter;mor any extension thereof, subject to the approval of the Montgomery County Council and the

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Montgomery County Executive, and subject to any restrictions, conditions or requirements which .the County Executive and the' County Council may elect t6 attach to such a purchase. TileLessee's right to purchase is f . i . : r r " ~ e r subject to the approval of the State ofMaryland Board ofPublic Works, which may also elec t to place restrictions, conditions or requirements on thepurchase. The Lessee's right to purchase and the County's acceptance thereof shall be exercisedin accordance with all applicable State and local statutes and regulations governing thedisposition ofpublic property. The County and Lessee reco gnize that the purchase price for thePremises should fully reflect the Premises' condition on the commencement date of this Lease,.and should accordingly be establi shed.priorto the Lessee's planned repair and renovation of thePremises. In accordance Vlith Montgomery County Coul::icil Resolution No. 12-1874, the parties


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acknowledge that the condition of the building on the Premises is very poor, and that thealtemative reuse of this property, in the event that it is no t leased for private educationalp u r p o s ~ s , is demolition of the building and reuse of the land only. In recognition of thebuilding's condition, the parties expect, subject to confirmation by independent appraisers, that_the value of the property will lie exclusively in the land. The parties expect that the building willneither contribute to or detract from the value of the property. The price to be pai4 by Lessee forthe leased Premises shall therefore be established by appraisals, to be performed within onehundred twenty (120) days following the commencement date of the Renovation Period, butprior to the begirming of the Lessee's repair and renovation work. The County and Lessee alsoreco&cize that such a "baseline" price will no t be:fully reflective of the value of the Premises astime passes. The pa..'1ies therefore agree that the initial "baseline" price to be paid for thePremises shall be adjusted on an annual b -as. set forth h e r e ~ . The initial "baseline" price forthe Premises shall be established in the followjng manner:

The 90unty and the Lessee s ~ a l l each select a licensed real estate appraiser havingexperience in the valuation of improved real estate in the Washington, D.C. metropolitanarea, and who is a member of the American Institute ofReal Estate Appraisers (each. certified as an 'MAl appraiser"). The two NLAI appraisers so selected shall choose a

_hird 1Y1AI appraiser within fifteen (15) days of thcir selecti on, and notify the County andLessee of their choice. Each party shall bear the cost of its :M.A1 appiaiser, and shall share-equally the cost of the third :M.AI appraiser. I f the. two MAl appraisers selected by the

. ~ -parties cannot agree on the choice of a third MAl appraiser and notify the parties as totheir choice within said fifteen (15) day period, then the paities shall request that thePresident of the Montgomery County Board ofReal tors deSignate a third 11,:\1 appraiser


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witbin fifteen (15) days of the parties' request to do so. The


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ARTICLE IVRENT

.1. Lessee shall pay no rent during the two-year Renovation Period. Lessee shall paythe sum ofTEN Dollars ($10.00) as annual rent to the C01mry during the first four (4) years ofthe lease terrIL The' entire annual rent for the first four years of the lease term shall be Ciue andpayable upon execution of this Lease. Beginning with the first month of the fifth lease year,Lessee shall pay annual rent in the amount of SIXTY THOUSJ...:ND Dollars ($60,000.00),

payable in equal monthly mstaJJments ofFIVE TIIOUSM'TI Dollars ($5,000.00). An paymentsshall be due and payable on or before the :first day of each month, without set-off, d(:!duction ordemand therefor from the County, payable to the order ofMontgomery County, Maryland, anddeliv:ered to the offices of the Montgomery County Division ofRevenue, 1.01 Monroe Street, 5thFloor, Rockville, Maryland. Any rental payment not received by the County more than 10 daysfrom the datei t becomes due and payable shall be assessed interest at the rate of15% per annumuntil paid. Should any payment remain unpaid for more than 30 days after it is due, the County

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shall have the right to terminate this Lease, recover possession of the Premises, and pursue anyother legal remedies available to the County under the laws o(the State ofMaryland. It js 'agreed behveen the parties that the annual rent payable by Lessee shall be adjusted for the sixthlease year, and every lease year thereafter, as determined by application of the rollowing formula:

To the annual rent payable by Lessee du..,-jng the previous lease year shall beadded that sum representing one hundred percent (100%) of the resulting amount,a..f'ter (1) multiplying said arinual rent payable during the previous lease year by afraction, the numerator ofwhich shall be the index now known as the "U.S.
http:///reader/full/60,000.00http:///reader/full/5,000.00http:///reader/full/60,000.00http:///reader/full/5,000.00


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Department of Lab.or, Bureau ofLabor Statistics, Revised CPI-U. AIl Items, U.S.City Average, 1984=100" for the last month of the previous lease year, anddenominatorof which shall be said index for the month prior to the :first month ofthe previous lease year, and (2) subtracting from such product the annual rentpayable during :the previous lease year. In no event will the newly adjusted rentexceed the rent payable during the previous lease year by more thap five percent(5%).

In the event the said index discontinued, ceases to incorporate a significant number of theitems no w incorporated therein, or i f a substantial change is made in such index, the partieshereto shall .attempt to agree on an alternative formula in accordance with such. statistics as may. . .be recommended by a department or agency ?fthe United States Government for such purpose,or absent such a recommendation, in such manner as may reasonably be determined byagreement of Lessee and the Coimty.

2. (a) As additional rent hereunder, upon the effective date of this Lease, Lessee shall."

pay and discharge as they become due, promptly and before delinquency, ail taxes, assessments,rates, charges, license fees, mumcipalliens, levies, excises, or imposts, whether general orspecial, or ordinary or extraordinary, of every name, nature and kind whatsoever, including allgovernmental charges of whatsoever name, nature, or kind, which maybe levied, assessed,charged or imposed, or which may become a lien or charge on or aga.iillt the leasehold ofLesseeherein, any building or buildings, or any improvements now or hereafter thereon, or on or against


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__________,' __ ... ' . . : ______ - ~ _ M / M J " ' ! ~ ' ~ " " . ~ - " - " ' - " ' ' ' ' - ' . ' . " ~ . _ " ' _ 4 ' , " .....- .. . .-,

L ~ s s e e ' s eS"lZte hereby created which may be a subject of taxation,. or on or against the County byreason of its ownership of the fee underlyi.ngthis J;.ease, during the entire term hereof.

(b) Specifically, and without in any way limiting the g e n ~ r a I i t y of the foregoing, 'Lessee shall pa y all special assessments and levies or charges made by any State, municipal orpoliticaJ. subdivision for local improvements, and ,shallpay the same ill cash as they shall fall dueand before they shall become delinquent and as requiredby the act and proceedillgs under whichany assessments or levies or charges are made by any State, municipal or political subdivision. I f

the right is given to pay either in one sum or in installments'and i f the installment(s) shall bep a y ~ b l e after the termination of this Lease or any extended term thereof, such unpaidinstallment(s} shall be prorated as of the date of termination. and amounts payable after such dateshall be paid by the County. .A.ll of the taxes and charges under this Section shall be prorated atthe commencement of the term of this Lease and exprration ~ f t h e term and any extension orrenewal hereof.

(c) , All rebates on account of any such taxes, rates, levies, charges, or assessmentsrequired to be paid and paid by ~ e s s e e under the provisions hereof shall belong to Lessee.

ARTICLE V LESSEE'S INSURANCE

1. On or before the commencement ofthls Lease, the Lessee must obtain atits own cost and expense and keep in force and effect during the1ease term the followinginsurance coverages with an insurance company(ies) licensed to do businessin the State ofMaryland. Lessee must provide evidence of coverage by submitting a certificate of insuranceandJor certified copies of the insurance policies. Lessee's insurance shallbe primary.
http:///reader/full/underlyi.nghttp:///reader/full/underlyi.ng


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(a) General Liab ility: :Minimum One :Million Dollars ($1,000,000.00)combined single limit for bodily inj1l:lJ and property damage coverage per occurrence includingthe folloYVing coverages: Contractual Liability; Premises and Operations; IndependentContractors; Fire Legal Liability; Personal Injury Coverage "

(b) Property Insurance: Lessee shall also provide an risks propertydamage insurance for 100% value of the leased buildings and contents against all,risks of directphysical loss or damage inc1udin:g eXpense of removal of debris of such property damage by aninsured peril. Property policy shall provide 100% replacement cost endorsement, demolition andclearing clause. No claim on this policy shall be settled without written approval of theCounty.

(c) Workmen's compensa tion insurance as required by Maryland law.(d) Additional Insl:lI'ed: Montgomery County Government must be,

named as an additional insured on al l liability policies.(e) Policy Cancellation: Forty-five (45) days written notice to the

County of cancellation or material chru:ige of any of the policies is r e q u i r e d ~ (f) Certicate Holder: Montgomery County Government, Department

of Facilities & Services, 110 North Washington Street, Rockville, Maryland 20850.

ARTICLEVlLESSEE'S INDE.MNIFICATION

Lessee, a material part of the consideration for the County's execution oftbis Lease,covenants '?vith County that the County shall no t be liable except as ot.1.erwise provided in thisLease for "any loss, damage, claim. of damage, liabi lity or expense, of any kind or for any damage


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or injury to persons or property duting the term of this Lease from any cause whatsoever,whether negligent, intentional, or otherwise by reason of the use, occupation, or enjoyment of the

- .Premises or Improvements ther.eon by Lessee, its employees, agents, visitors, tenants, licensees .. -or concessionaires. Lessee shall indemnify and defend the County in any action or suit broughtagainst the County, and hold harmless the County from all loss, damage, claim of damage,liability or expense whatsoever on account of any such damage or injury; provided, however, that the foregoing indemnity for loss,. damage, claim of damage, liabili ty or expense of i n j ~ to

persons or property, shall not apply i f due to any willful or negligent act or omission of theCounty, its employees or agents. In no event shall the limits of any insurance policy providedfor herein be deemed to limi t Lessee'sliability to. the County as herein set forth.

ARTICLEVTILIENS, CLAIMS OR ENCUMBRANCES

L Lessee shall at all-times keep the Premises free and clear ofmechanics',materialmen's and other liens, and of all cha;rges, claims and encumbrances caused or created byLessee or anyone claiming through or under Lessee, other than such deeds of trust or mortgagesas may be necessary from 1ime to time to effectuate the financing of the Lessee's renovation andrepair work on the Premises, provided, however, that such deeds of trust or mortgages aresubordinate to this Lease.

2. If any mechanic's or other lien shall at any time be filed against tl:ie Premises forwork perf9rmedby or for Lessee, Lessee shall either cause the same to be discharged of recordwithin thirty (30) days after the date of filing of the same, or, i f Lessee shall desire to contest any _such lien, Lessee shall furnish to the County security in the amount ofthe claim, plus costs and


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. interest, or shall procure a bond m said amount from a reputable bondlng company. The:finaljudgment of any court of competent jurisdiction determining the validit"j and!or amount of anysuch lien shall be conclusive.

3. I fLessee shall fail to discharge any lien not permitted by this Lease or to provideCounty with security therefor as h e r e m a b ~ : r v e provided, then County may at its option, payordischarge any such lien, and Lessee shall pay County all amounts spent by County, includingcosts, expenses and reasonable attorneys' fees, mcurred by County together with mterest at the

rate provided1n Section 11-107(a) of the Courts and Judici3.l Proceedings Article, Armotated .Code ofMarjland, as amended, or m the event that this Section is repealed and not re-enacted,then interest shall be the prime rate set by Citibank ofNew York, plus one percent (1%), whichpayment shall constitute additional rent due hereUnder and shall be paid upon deID.4I1d by theCounty.

ARTICLEYTllREPAIR. RENOVATION AND OOROVEMENTS

. 1. The Lessee shall, within the two year Renovation Period, with exercise of duediligence, and at Lessee's sole cost and expense, repair, renovate and rehabilitate the buildingsand outdoor areas comprising the Premises, in order to improve and preserve the Premises, and

bring the Premises into a useable condition

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Montgomery County MD Council Staff Report on Peary HS Sale Nov 19 2010

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