Memorandum

City of Lawrence

City Attorney's Office

TO:	David L. Corliss, City Manager Toni R. Wheeler, City Attorney
FROM:	Randall F. Larkin, Senior Assistant City Attorney
DATE:	July 30, 2014
RE:	Black Hills Lease Agreement

To accommodate KDOT's work on the South Lawrence Trafficway, Black Hills Energy has agreed to move a number of its gas lines, including its gas line located in the vicinity of 31st Street and Louisiana Street. To accommodate the South Lawrence Trafficway and to continue to serve its customers in the area surrounding Haskell Indian Nations University, Black Hills Energy has asked the City to relocate its gas line under City property located on the northwest corner of 31st Street and Louisiana Street (planned for a pump station) and on the northeast corner of 31st Street and Louisiana Street (Broken Arrow Park). The parties have agreed in principle upon terms of a 15-year lease agreement, whereby Black Hills Energy will relocate its gas line under City property precisely in the areas and to the depths agreed upon (as will be shown in Exhibits to the Agreement (the parties are still in the process of putting those Exhibits together)) and will agree, in the future, to move said gas line at its own cost and expense in the event the City redevelops the properties for public use. While the City will not charge rent for the lease -- beyond what it receives from Black Hills Energy pursuant to its franchise agreement -- Black Hills Energy has agreed, in the future, to cede certain real property to the City for its use.

Action Requested:

Staff requests the City Commission to authorize the City Manager to execute a Lease Agreement with Black Hills/Kansas Gas Utility Company, LLC d/b/a Black Hills Energy, a Delaware corporation, permitting Black Hills Energy to lease certain portions of City Property in the vicinity of the intersection of 31st Street and Louisiana Street in order to relocate under City Property a gas line and appurtenant facilities in accordance with the terms of that Agreement.