Lease and development agreement



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Section 5.7 Commencement of Construction.


The Lessee shall give the Port Authority at least sixty (60) days’ notice prior to the commencement of construction.

Section 5.8 Quality of Work.


(a) Quality of Work. All Construction Work, including workmanship and materials, shall be of first class quality.

(b) Construction Standards. All Construction Work shall be performed (x) in accordance with and subject to the terms and provisions of this Agreement covering the Construction Work, (y) substantially in accordance with the approved Construction Application and (z) subject to any requirements, stipulations and provisions that the Port Authority may impose in its approval of the performance of such Construction Work. For the purposes of this paragraph (b), Construction Work shall be deemed to have been performed “substantially in accordance with the approved Construction Application” if (x) such Construction Work has been performed in compliance with all Requirements, (y) all life safety and fire protection systems, if any, included in such Construction Work have been completed and installed in accordance with the approved Construction Application for such work and (z) such Construction Work has otherwise been performed in accordance with the approved Construction Application for such work, subject to minor deviations therefrom that do not affect the quality of the Construction Work, the structural integrity of the Building, the functioning of any Building systems or the compliance of the Building with the Requirements. The Lessee shall redo, replace or construct, at its own cost and expense, any Construction Work not done substantially in accordance with the approved Construction Application or the provisions of this Agreement.

(c) MOA Requirements. Without limitation as to the foregoing provisions of this Section 5.8, it is understood that all Construction Work shall be subject to the requirements of the MOA.

Section 5.9 Construction Supervision and Inspection.


(a) Lessee’s On-Site Engineer. During the performance of the Construction Work for the Project, including any Partial Approval Work, the Lessee shall provide a State of New York licensed engineer or registered architect employed by the Lessee’s Architect/Engineer to perform on-site construction supervision of the Construction Work and witness all special inspections required under the New York Uniform Construction Code sufficient to enable the Lessee’s Architect/Engineer to issue the Lessee Certificate, as required below in the Section entitled “Completion”.

(b) Port Authority Field Engineer.

(1) The Port Authority will assign a field engineer(s) to the Project during the construction period.

(2) The appointment of any such engineer shall not give the Port Authority any rights, powers or obligations not otherwise herein provided for and, without limiting the generality of the foregoing, shall not affect any of the other provisions of this Article or any rights of the Port Authority hereunder. It is expressly understood and agreed that the Port Authority’s field engineer assigned pursuant to this paragraph has no authority to approve (x) any change or modification to the approved Construction Application with respect to any portion of the Construction Work, (y) the construction by the Lessee of any portion of the Construction Work that is not in accordance with the Construction Application approved by the Port Authority or (z) any variation by the Lessee from compliance with the terms of this Agreement, nor does such field engineer have authority to certify that the Construction Work has been performed in accordance with the approved Construction Application covering such Construction. It is hereby further understood and agreed that should such field engineer give any directions or approvals with respect to the Lessee’s performance of any portion of the Construction Work that are contrary to the provisions of this Agreement or the approved Construction Application, such directions or approvals shall not affect the obligations of the Lessee as set forth herein, nor release or relieve the Lessee from compliance therewith.

(c) Port Authority’s Right of Inspection.

(1) The Port Authority shall have the right, through its duly designated representatives, to inspect the Construction Work and the plans and specifications thereof, at any and all times during the progress thereof and from time to time, in its discretion, to take samples and perform testing in any part of the Construction Work.

(2) Prior to backfilling any excavations in which the construction of utilities has been completed, the Lessee shall notify the Resident Engineer that such excavations are ready to be backfilled. Such excavations shall not be backfilled until the Port Authority shall have documented and surveyed the line and grade of such utilities.

(d) Non-Compliance.

(1) In the event that the Port Authority determines that the Lessee has failed at any time during the performance of any portion of the Construction Work under this Agreement to comply with the requirements of the approved Construction Application or the provisions of this Agreement relating to the Construction Work, the Lessee shall, at the Port Authority’s direction, submit to the Port Authority for its written approval the Lessee’s proposal for making modifications, corrections, or changes or to the Construction Work that has been or is to be performed so that the same will comply with the provisions of this Agreement.

(2) In the event that the Port Authority deems such non-compliance to be material and substantial, the Port Authority shall have the right to cause the Lessee to cease such part of the Construction Work as is being performed in violation of this Agreement. Upon direction from the Port Authority (which need not be in writing in the event of an emergency, including without limitation any non-compliance involving life safety issues) specifying the reasons therefor, the Lessee shall promptly cease construction of the portion of the Construction Work specified.

(3) If the Port Authority has required the Lessee to cease performance of the Construction Work in accordance with the foregoing subparagraph (2), the Lessee shall not resume construction of any portion of the Construction Work that has been so halted until it has received the Port Authority’s written approval of the modifications, corrections or changes in or to the Construction Work that the Lessee proposes to make.

(e) No Duty to Police. Notwithstanding the foregoing, it is hereby understood and agreed that the Port Authority has no duty or obligation of any kind whatsoever to inspect or police the performance of the Construction Work, and the rights granted to the Port Authority hereunder shall not create or be deemed to create any such duty or obligation. Accordingly, for example, the fact that the Port Authority has not required the Lessee to submit a proposal pursuant to subparagraph 5.9(d)(1), or has not exercised its right to require the Lessee to cease its construction of all or any part of the Construction Work pursuant to subparagraph 5.9(d)(2), shall not constitute an agreement or acknowledgment on the part of the Port Authority that the Lessee has in fact performed such work in accordance with the terms of this Agreement and the approved Construction Application, nor shall any such fact constitute a waiver by the Port Authority of the requirement of compliance by the Lessee in all material respects with the provisions of this Agreement and the approved Construction Application.


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