Opinion ID: 1709084
Heading Depth: 1
Heading Rank: 2

Heading: Project Lease

Text: The City, as lessor, leases to the Department, as lessee, the project and the land on which it will be constructed. The term of the project lease is forty years from completion of the project, and the Department agrees to pay to the City, commencing on the completion of the project, rent in amounts sufficient to enable the City to pay the principal of and interest on the revenue bonds of the City hereinafter referred to and the fee of the trustee under the mortgage and deed of trust hereinafter referred to. The project lease contains agreements on the part of the Department to keep the project insured and to maintain the project in good repair and in efficient and modern condition. All obligations on the part of the Department under the project lease for the expenditure of any money are limited obligations and (except to such extent as they may be payable from insurance proceeds or condemnation awards) are payable solely (a) out of the first gross operating revenues derived by the Department from the project, and (b) to such extent, if any, as the said first gross operating revenues should not be sufficient to make said rental payments, out of the first gross operating revenues derived by the Department from the operation of its other presently existing port facilities located at the Port of Mobile remaining after (aa) payment of the expenses of operating and maintaining the said other port facilities, and (bb) payment of the principal of and interest on certain bonds of the State and the Department having prior claims on said revenues. The project lease grants to the Department the option of terminating both the ground lease and the project lease when the mortgage and deed of trust hereinafter referred to shall have been satisfied, and further provides that upon either the expiration of the term covered by the ground lease or upon prior termination thereof the project and the land on which it is constructed will revert to the State.