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HomeMy WebLinkAbout08 - LICA Lot Lease AmendmentQ SEW PORT CITY OF NEWPORT BEACH Foa "" City CouncH Staff Report Agenda Item No. 8 July 24, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Public Works Department Stephen G. Badum, Public Works Director 949 - 644 -3311, sbadum @newportbeachca.gov PREPARED BY: Shannon Levin, Harbor Resources Supervisor APPROVED: � VU"�i TITLE: Amendment No. 1 to Lido Isle Bayfront Lettered Lot Lease with Lido Isle Community Association ABSTRACT: Amend the current lease agreement, Lido Isle Bayfront Lettered Lot Lease, with the Lido Isle Community Association to include "Parcel C ". RECOMMENDATIONS: 1. Waive City Council Policy F -Ts requirement for an appraisal or similar analysis for Parcel C, because the City of Newport will receive in -kind services under the lease. 2. Authorize Mayor Gardner to execute Amendment No. One to the Lido Isle Bayfront Lettered Lot Lease on behalf of the City of Newport Beach. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: There are 13 parcels on Lido Isle that are owned by the City of Newport Beach ( "City ") and leased to the Lido Isle Community Association ( "LICA. ") The Lido Isle Bayfront Lettered Lot Lease (Attachment A) parcels include street end parks, beaches, dry boat storage areas, and the Antibes Marina Lease separately covers a marina. City Council Policy F -7 (Attachment B) authorizes the City to manage income property by lease, management contract, or other action. In 1975 a single lease for these parcels was first entered into between the City and LICA. On April 12, 1999, the City Council approved two lease proposals with LICA that divided the premises described in the 1975 Lease into two separate leases. Amendment No. 1 to Lido Isle Bayfront Lettered Lot Lease with Lido Isle Community Association July 24, 2012 Page 2 April 15, 2000, the City Council revisited the LICA Bayfront Lettered Lot Lease to refine two alterations to the 1999 Lease. One of those significant changes was to omit Tidelands parcels B and C from the Lido Isle Bayfront Lettered Lot Lease, remaining under City jurisdiction. The Lido Isle Bayfront Lettered Lot Lease has authorized LICA to make private improvements while maintaining public access to the bay beaches and Tidelands. LICA has an existing dock located bayward of the street end, San Remo, adjacent to LICA Clubhouse at 701 Via Lido Soud as well as Tidelands structures Leased Lots, such as Lots F and H (Attachment C). In 2011 LICA applied for an Approval in Concept for a Harbor Permit for the LICA dock at the Via San Remo street end adjacent to the Clubhouse. Harbor Resources issued an Approval in Concept in November 2011 for the replacement of flotation, replacement of existing piles and installation of two new piles, and new ADA gangway. A condition of agency approvals for improvements to waterside structures, such as docks, requires upland land right such as ownership or leasehold. In 2011 LICA submitted an application to the Coastal Commission for these improvements. Coastal Commission staff flagged the application because LICA did not have contractual rights to use the upland parcel, Parcel C. LICA requests that the City amend the Lido Isle Bayfront Lettered Lots Lease to include "Parcel C" (Attachment D) thereby giving LICA the ability to complete its application for Coastal Development to make improvements to the existing dock system. Execution of Amendment No. 1 to the Lido Isle Bayfront Lettered Lots Lease (Attachment E), will add "Parcel C" to the existing list of bay beaches in the Lido Isle Bayfront Lettered Lot Lease under the control of LICA. In 1977 the City and LICA signed an MOU with conditions requiring LICA to continue to allow public access from the roads to the beach along the walks and access to the tidelands. Public access conditions carry over into the proposed Amendment No. 1. Additional insurance provisions have been added to Section 9. No other changes are proposed to the Lido Isle Bayfront Lettered Lot Lease's terms, rental rates, base rent inflator, or other substantive components of the leases as agreed to by the City Council on April 15, 2000. Staff recommends the City Council waive City Council Policy F -7(A) requiring a current analysis or appraisal because the City receives in -kind payment under the lease (i.e., LICA maintains the beaches and ensures public access is kept open. City Council Policy F -7(E) states that "whenever less than the open market or appraised value is received or when an open bid process is not conducted, the City shall make 2 Amendment No. 1 to Lido Isle Bayfront Lettered Lot Lease with Lido Isle Community Association July 24, 2012 Page 3 specific findings setting forth the reasons thereof. Such findings may include, but need not be limited to, the following: 2. Redevelopment of the property would require excessive time, resources and costs which would outweigh other financial benefits. 5. The property provides an essential or unique service to the community that might not otherwise be provided were full market value of the property be required." Parcel C is located adjacent to property currently under lease to LICA (next to its club house) and is not suitable for development by a party other than LICA. The lease terms would require LICA to maintain Parcel C and to keep the public beaches and tidelands open to public use, an essential service that benefits the City and its residents. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by- -:, Stephen G. Badum r,kPublic Works Director Attachments: A. Bayfront Lettered Lots Lease, 2000 B. Council Policy F7 C. LICA Leased Lots with Tidelands Improvements D. Parcel C E. Proposed Bayfront Lettered Lots Lease Amendment 1, 2012 0 Attachment A LEASE Lido Isle B.ayfront Lettered Lots Tf315'LEASE, made and entered into this» day of i� 1 , 2000 (Execution Date), by and between the CITY OF NEWORT.BEACTL a charter city and municipal corporation ( °Lessor "); and the LIDO ISLE COMMUNITY ASSOCIATION, a C,jifornia non -pmfit corporation ( "Lessee'): RECI'T'ALS A. The City of Newport Beach has, since September 1928, held tifle to certain lots and parcels of real property located on Lido Isle (collectively referred to as the Premises) that are described on Exhibit "A" and depicted on Exhibit ".B ". The individual lots and parcels are sometimes identified in this Lease by reference to the description in Exhibit "A:"' B. Lessee and Lessor first entered Into a long-term lease of the premises dated March 4,1929 (9.929 Lease). The 1929 Lease was later renegotiated into a series of new leases in December 1938, June 1951, and April 1975 (1975 Lease). The 1975 Lease expires April 14,.2000- C: - Lessor and the Lessee intend to enter into two Ieascs that comprise all of ct to the property subje the 19%5 lease except'ParceLB (which is the fifty foot strip between the baywazd boundary of Private property and the bulkhead line bayward of Lot I) and parcel C (wMchis a strip between the bayw.'ard boundary of private:property' and the bulldiead Line between Lot 19 and Lot 26). This Lease covers the uplands and by the Antibes Marina. Lease The'.` Antiie Marina Lease' the tidelands are covered covers Parcel E and this Lease covers the 'Tayfront Lettered Lots" described In Tract tn- space, walkways and dry boatstorage areas- 907 that are used as parks, oP D. The Parties intend to .require Lessee to continue to use the same high standards of care and maintenance of the Premises that Lessee used on the Effective Date of this Lease to serve Lido Isle residents and visitors. &I E. The Parties intend that Lessees performance of the terms and conditions of this Lease is part of the consideration for the Antibes Marina Lease. F. The Parties intend that Lessee will continue to facilitate public access to the tidelands contiguous to Lido Isle through maintenance and improvement of sidewalks and walkways at the locations specified in Exhibit C (Walkways). i j G. The Parties intend, through this lease, to confirm Lessor's right to use any i properties held in trust by the Lessor (including tidelands) for the purposes of establishing, maintaining, and operating mitigation bank locations for Eelgrass • i (zoostera marina) or projects that are intended to entrance the water quality or ecosystem of Newport Bay without inftinging on or limiting Lido Isle residents` ability to operate and maintain legal and permitted residential piers. i NOW, TII3REFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS hereinafter set forth, it is agreed as follows: 1, DESCRIPTION OF LEASED PREMISES Lessor hereby leases, and Lessee does hereby accept a lease of the Premises subject to the terms, covenants and conditions in this Lease. - 2. TERM The term'of this Lease shall be for a period of twenty -five (25) years, costrnencing on April 15, 20110 (Effective Date) and expiring on April 14111, 2025 unless sooner terminated as provided in this' Lease: 3 LESSE> DU'T'IES A .' Lessee shall maintain the Premises at substanti ally the same high standard of care and maintenance _that Lessee used as of the tzecotion Dale of this Lease; u J B. Lessee shall maintain all Walkways in good order, condition and repair and refi-ain from any action or conduct that restricts public access to the tidelands. 4. RENT The consideration for this Lease is Lessees performance of its duties and obligations pursuant to the terms, covenants and conditioris of this Lease. 5. USE A. Lessee shall use the two orie hundred (100) foot by ninety (90) foot portions of Lot A for community recreational facilities and 'dry boat siorage YuElposes for the benefit of members of Lessee. B. Lessee shall maintain an d operate all Walkways m a rii"anner that allows for open public access to the tidelands around Lido Isle: Lessee shall position any signs that limit park access to Li do Isle residents and'guests in a mariner that does not discourage visitor and public use of any Walkway. Lessor may require Lessee, at Lessee's expense, to relocate any of these signs on any parcel'or lot referenced in Ekhibit C if the City Manager of Lessor (or his designee)'deterinines that rel6cation is necessary or appropriate to ensure full public use and access. Access to tidelands . bayward of the Walkways shall be subject to the same restrictions and-limitations applicable to other.tidelands granted to the City. C. Lessee shall allow Lessor to use'any property 6wmed or held in. trust ' by the Lessor (including tidelands) for the purposes of'establishing, maintaining, and operating mitigadon bank locations for Eelgrass (zoosfexdmarma) or any'other.pxoject., . designed. and intended to enhance the water quality or °ecosystem of Newport Bay. In developing and maintaizung any such project, Lessor shall riot�infringe upon or limit Lido Isle residents' ability to operate and maintain legal and pexmitted "residential piers .. subject only to the ordinances and policies adopted by Lessor in its governmental capacity, and as grantee of the State of California. I G. STRUCTURAL IMPROVEMENTS A. All structural improvements with a cost in excess of five thousand dollars (Capital Improvements) that are constructed during the term of this lease become the property of Lessor upon expiration of the Lease. B. Lessee shall be required to obtain, prior to commencing the construction of any Capital Improvement, all, permits, licenses or approvals that may be required by Lessor in its governmental capacity. C. Lessee shall, at all times, indemnify, defend and hold Lessor ham ess from any and all claims, liens, damages or fees in any way related to any construction, repair, alteration or installation of any structure, improvement, equipment or facilities on the Premises. Lessees obligation extends to the costs of defending such claims, including reasonable attorney's fees. Lessee shall not suffer or permit to be enforced against all or any portion of the Premises, any lien or any claim for damage in any way related to any construction, repair, restoration, replacement or improvement on the Premises. In the event any Hen or stop notices imposed or recorded on the Premises as a result.of the construction, repair or alteration of the facility by or on behalf of Lessee, Lessee shall pay or cause to be paid all such liens, claims or demands before any action is brought to enforce the same against the Premises. - Lessee may, in good faith, contest the validity of such lien, claim or demand. In the event of any contest or litigation, Lessee shall, at its sole expense, defend itself and Lessor and shall pay and satisfy any adverse judgment that may bexendered prior to enforcement against Lessor or the Premises. Lessor may require Lessee to furnish a. surety bond satisfactory to Lessor in an amount equal:to any contested Lien, claim or demand. '.e D. Lessee shaH:give Lessor advance written notice of any construction on or improvement on the premises. Lessee shall coordinate the. schedulirig of any work 'I ` with Lessor. to minimize any inconvenience to thepublic. 7. BUSINESS A.CrAMIES Subject to the provisions of this Lease that authorize Lessee to lease or sublease portions of the Premises for the purpose of dry boat storage, Lessee shall not a ' grant any concession, license, permit or privilege for the conduct of any business or other operation for profit on the Premises 'without the prior written approval of the City Manager, 8. LI`f7CLMES AND TAXES Lessee shall promptly pay all utility services furnished to the Premises and shall pay before delinquent any general and special taxes or assessments or other -governmental charges, if any, which may be levied an the Premises as well as any related possessory interest in or to the Premises. Satisfactory evidence of such payments shall be delivered fo Lessor within seventy -two (72) hours of a written xegilest for such information. Lessee acknowledges that this Lease may create a possessory ir$rrest Subject to property taxation and that Lessee may subject to the payment of property -taxes levied on such interest Lessee shall Pay, before delinquency all taxes, assessments, license fees and other charges (Taxes) that ale, during the teran, levied or assessed against Lessee`s leasehold interest in the Premises or any personal pmpertP installed on the Premise'- .g aN�T In addition to Lessee's obligations pursuant to Section 10, Lessee shall provide and, maintain, at its own expense, policies of liability insuiamce as follows_ A. All required policies shall be signed by a person anthozized by that insurer to bind coverage on its behalf acid must be filed with Lessor, prior to execution of this Lease. Current certification of coverage shall be provided throughout. the term of tivs Lease. ]Except for workers compensation, all insurance V policies shall include Lessor and'its elected officials, officers, agents, representatives and employees as additional insureds. I B. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and pinancial Size Category Class VII (or larger) in accordance with the latest edition of Bests Key Rating Guide: unless otherwise approved by the City's Risk Manager, C. Lessee shall provide Worker's compensation insurance covering all employees of.Lessee, pei the laws of the State of California. D. Lessee shall provide Commercial general liability insurance covering third. party liability risks, including without limitation, contractual liability, in ,a minimum amount of $1 million combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial general liability nsurance'or other form-with a general aggregate is used, either the general aggregate shall apply separately to this Lease, or the general " aggregate iiinitshall be twice the occurrence limit. Lessor reserves the right . to reasonably increase the *nin +mum coverage specified in this subsection once every five years should the City Manager of Lessor determine that then current coverages do not fully protect Lessor. E. Lessee shall provide Fire and extended coverage for not less than ninety percent.(9ol} of the cost of replacement of all insurable improvements on the Premises: F_ Exceptfor w'orker's compensation, the policy or policies shall be endorsed to state that coverage shall not be canceled by either party, except after thirty' (3o) days' prior notice has been given in writing to Lessor. Lessee shall give Lessor prompt an&fimely notice of claim made or suit instituted arising out o£Lessee's operation hereunder. Lessee shall also procure and maintain, at its own cost and expense; any additional kinds of insurance, which in its own judgment may be necessary'forits.prgper protection and prosecution of the work `i G. Lessee agrees that, in the event of loss due to any of the perils for which it has agreed to provide comprehensive general liability insurance, lessee shall look solely to its insurance for recovery. Lessee hereby grants to Lessor, on behalf of any insurer providing comprehensive general and automotive Iiability insurance to either Lessee or Lessor with respect to the services of Lessee herein, a waiver of any right of subrogation which any such insurer of said Lessee may acquire against Lessor by virhze of. the payment of any loss under such insurance. 10. HOLD HARM-LESS A. Lessee shall indemnify, defend, save and hold harmless Lessor, its City Council, boards and commissions, officers and employees from and against any and all loss, damages, 3iability, claims, allegations of liability, suits, costs and expenses for damages of any nature whatsoever, including but not limited to, bodily injury, death,. personal injury, property damages, or any other claims arisingfrom any and all negligent acts or omissions of Lessee, its employees, agents or subcontractors in the use and maintenance of the premises pursuant to this Lease_ B. Lessor shalt indemnify, defend, save and hold barmless Lessee, its officers and employees, from and against any and all Ioss, damages, liability, claims, allegations of liability, suits, costs and expenses for damages of any nature whatsoever, including, but not limited to, bodily injury, deathh, personal injury, property damages, or any other claims arising from any and all negligent acts or omissions of Lessor, its einpIoy _es, agents or subcontractors in the use and maizitenance of the I?remisP� - pursuant to this Lease. MAINTENANCE OF 1I"ROVEWNTS A. Lessee to Maintain All Improvements Lessee covenants and agrees that during the term of this Lease it will, at its own cost and expense, maintain the premises in good order and repair and' in clean, • i orderly, safe and sanitary condition. Lessee shall be responsible for the repair of any damage. B. Lessor May Elect to Repair and Maintain at Expense of Lessee If, in the judgment of the Lessor, the standards of maintenance and repair required by this Lease are not being maintained, Lessor may elect to correct any deficiency after written notice thereof to the Lessee and Lessee's failure to cure the default . Lessee shall pay to the Lessor on demand any and all sums expended by Lessor in correcting any such defidency.together with interest at the legal rate. If, in the judgment of the Lessor, the disrepair or lack of maintenance constitutes an emergency, the notice shall be a 24 -hour notice to remedy, in all other cases it shali'be a 5 -day notice. C. Lessor's night oflnspection Lessor reserves the right by its authorized agents, employees or representatives to enter the Premises upon forty -eight (48) hours advance notice, to inspect the same or any part thereof at any time to attend to or protect the Lessor s interest under this Lease. D. Compliance with Laws ordinances and Regulations Lessee shall comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of orange, the City of Newport Beach, or any other governmental body or agency' having lawful jurisdiction over the Prenises or the business, enterprises, or activities conducted thereon. 12. ASSIGNMENT Lessee shalt not assign, transfer, sublease, mortgage, hypothecate or give any grant of control of this Lease or the premises, or any part hereof, either voluntarily or invotuntarily, unless first apprgvedby the City Council_ Notwithstanding this Section, Lessee may sublease the dry boat storage areas to tenants wishing to store boats. ,o I 13. RESTORATION If during the term hereof any building or improvement erected by Lessee on the Premises, or any part thereof, shall be damaged or destroyed by fire or other casually, Lessee shall, at its cost and expense, repair or restore the same according to the original plans thereof, or, at Lessee's option, Lessee may elect to replace such building or: improvement, provided that if Lessee so elects, Lessee shall obtain the approval of Lessor of the proposed architectural plans. Any such work of repair, restoration or replacement shall be commenced within one hundred and eighty (180) days after the damage or loss occurs and shall be completed Cvith due diligence, but not longer than one (1) year after such work is commenced unless delay is caused by events beyond the control of Lessee. If Lessee elects not to repair or rebuild the improvements, it may terminate this Lease by giving Lessor written notice of termination and by assigning all insurance proceeds relating to the premises to Lessor, if Lessee elects to terminate the Lease it shall be obligated to completely clear and restore the building site to its original, condition 14, DEFAULT AND TEltWNATION OF LEASE A. Default Time and each of the terms, covenants and conditions hereof are expressly made the essence of this Lease. If the Lessee shall fail to comply with any of the terms; covenants, Or. con( litions of.this Lease, including 1_ .Fail_ure of Lessee to keep current on all utility payments for the Premises; 2. Failure of Lessee to keep the'Preinises in state of repair and, .Operation dictated by §3 of this lease ( "Consideration') and to keep it in a neat, clean, of derlysafe and sanitary. condition: 3. Failure to provide certificates of insurance evidencing i; Asu ' .e ,, .• :. coverage as required in paragraph 12 of thvs.Lease;' ' Lessor mays, subject to the provisicros o£ Subsectionll(11), terminate this Lease if,Lessee. . fails to remedy any default related to the payment of moneywithin:tliuty:(30) days 1 - after service of a written notice from Lessor to do so, or fails to commence the cure of any other default within thirty (30) days and diligently prosecute the same to completion. Lessee may also terminate this Lease if Lessee abandons or vacates the Premises. B. Surrender of Possession upon Termination Lessee shall, upon the expiration or termination of this Lease, peaceably surrender the Premises with all buildings and improvements, in the same condition as when received or constructed, excepting reasonable use and wear thereof, and damage by fire, act of God, or by the elements, The provisions of this Subsection shall be effective upon expiration or termination of this Lease regardless of whether Lessee holds over under the provisions of Subsection E. C. Remedies Cumulative The.rights, powers, elections and remedies of Lessor are cumulative and no one of them.shall be considered exclusive.of the other or :exclusive of any rights or remedies allowed by law. Lessor's exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a. waiver of Lessor's right to exercise any other. D. No Waiver No failure of Lessor to exercise any right or power arising from any omission, neglect or default of the Lessee shall impair, any such right: or power .or shall be constfued'as a waiver. E. Holding Over . If the Lessee remains in possession, after the expiration of this Lease for -any . cause, Lessee's possession shall be deemed a tenancy from month =to. -month upon the same terms, conditions, and provisions of this Lease. 15. EMINENT DOMAIN 'lii the event the whole or part of the Premmses is condemned by a public entity M: the lawful exercise of the power or eminent domain, this Lease shall cease as to the part condemned upon the date possession of that part is- taken by'the public entity. If'onlY a part is c�ndernned and the taking' of. does.not substantially impair the capacity of the'. in i remainder to be used for the purposes required in this Lease, Lessee shall continue to be bound by the terms, covenants and conditions of this Lease. If only a part is condemned and the taking of that part substantially irnpairs the capacity of the remainder to be used for the purposes required in this Lease; Lessee shall have the election of: (a) terminating this Lease and being absolved of obligations that have not accrued at the date possession is taken by the public entity; or (b) continuing to occupy tine remainder of the Premises and to be bound by ttus Lease. Lessee shall give notice in writing of his election hereunder, within thirty (30) days of the date possession of the, part is taken by the public entity. Lessor shall be entitled to receive and shall receive all compensationfor the condemnation of all or any portion of the property by exercise of eminent domain. Lessee shall be entitled to receive and shall receive all compensation for the condemnation of all or any portion of the improvements constructed by Lessee on the Premises by the exercise of-eminent domain- 16. NOTICES Any notice or notices required by this Lease or by law, to be given or served upon the Lessee, may be given or served by mail, registered or certified, with postage prepaid, and if intended for the City of Newport Beach, addressed to the City Nfanager,P.O. Box 1768, Newport Beach, California 92659, or at such other address as may be furnished to the Lessee in writing, and if intended for the Lessee, addressed to its Association President; 701 Via Lido Soud, Newport Beach, California 92663, or at such other address as may be furnished to the Lessor in writing. In the alternative, notice maybe served. personally upon any corporate officer of Lessee and that any notice or notices provided by:this Lease or by law to be served upon Lessor may be served personally upon the Mayor of the City of Newport Beach or the City Clerk of Newport Beach- Notice mailedp ursuantto this Section shall be deemed given forty- eight (48) hours from and after the deposit in the United States mail. 114- IN WITNESS W f IEREOF, the parties hereto Have executed this Lease as of the day and year .first above written. LBSSOIi: CITY OF NEtiVPORT BEACH Bv: oyes Mayor „ APPROVED AS TO FORM AND. . CONTENT B/obeA �/ — H. Burnham City Attornev to I �a EXHIBIT A ! Description of Leased Premises i Bayfront Lettered Lots The following lots and parcels comprise the Lease Premises: Lots A, B, C, D, E, F, G, H, I and j of Txact 907 as per the map recorded in Book 28, Pages 25 to 36 of Miscellaneous Maps. iii the. Office of the County Recorder of the County of Orange, State of California, d i I 44� A PARCELE LOT l A42 a c_ Loll(] - 6) & PARCEL B. 'Ai +✓) v��a t. 4 ' .� Ste. - A`v! —LOTH LOT A (1 - 5) ' �`4� ¢ ,t•� P, - - I.1 tire,\ . 6\ \� LOT G � �,• - I LOTF LOT C & PARCEL C_ LOT E LOT D \ "� \ �� LIDO ISLE Attachment B INCOME PROPERTY F -7 The City owns and manages an extensive and valuable assortment of property including streets, parks, beaches, public buildings and service facilities. The City also owns and operates a yacht basin, a mobile home park, a luxury residential development and various other income properties. Most of the income property is tidelands, filled tidelands or waterfront. Unencumbered fee value of income property is estimated at upwards of one hundred million dollars, and income typically conhibutes ten percent of all City revenues. As owner of property, the City is the steward of a public trust, and state law requires the City to maximize its returns or be subject to a charge of making a gift of public funds. Nevertheless, the City Council recognizes the importance of this property not only as a revenue generator, but also as a means to provide otherwise unfeasible uses and facilities to benefit the commuuiity. In managing its property, the City will continually evaluate the potential of all City owned property to produce revenue. This may include leasing unused land, renting vacant space, and establishing concessions in recreation areas or other similar teclmdques. The City Council will evaluate the appropriateness of establishing new income properties using sound business principals and after receiving input from neighbors and users. The policy of the City Council is that income property be managed in accordance with the following: A. Whenever a lease, management contract, concession, sale or similar action regarding income property is considered by the City, an analysis shall be conducted to determine the maximums or open market value of the property.. This analysis shall be conducted using appraisals or other teclu2iques to determine the highest and best use of the property and the highest value of the property. B. All negotiations regarding the lease, management contract, concession, sale or similar action .regarding income property shall include review of an appraisal or analysis of the use being considered for the property conducted by a reputable. and 'independent professional appraiser, real estate consultant or business consultant. 1 i fa F -7 C. The City shall seek, whenever practical and financially advantageous, to operate or manage all property and facilities directly with City staff or contractors. P. hi all negotiations regarding the lease, management contract, concession, sale or similar action regarding a non - residential income property, the City shall seek revenue equivalent to the open market value of the highest and best use; and, whenever possible the City shall conduct an open bid or proposal process to insure the highest financial return. E. Whenever less than the open market or appraised value is received or when an open bid process is not conducted, the City shall make specific findings setting forth the reasons thereof. Such findings may include but need not be limited to the following. 1. The City is prevented by tideland grants, Coastal Commission guidelines or other restrictions from selling the property or converting it to another use. 2. Redevelopment of the property would require excessive time, resources and costs which would outweigh other financial benefits. 3. Converting the property to another use or changing the manager, concessionaire or lessee of the property would result in excessive vacancy, relocation or severance costs, which would outweigh other financial benefits. 4. Converting residential property to another use or opening residential leases to competitive bid would create recompensable liabilities and other inequities for long -term residents. 5. The property provides an essential or unique service to the community that might not otherwise be provided were full market value of the property be required. 6. The property serves to promote other goals of the City such as affordable housing, preservation of open space or marine related services. F -7 F. Generally, lengflis of leases, management contracts, concessions or similar agreements will be limited to the minimum necessary to meet market standards and will contain appropriate reappraisal and inflation protection provisions. Also, all agreements shall contain provisions to assure complete audits periodically through their terms. G. All negotiations regarding the lease, management contract, concession, sale or similar action regarding income property shall be conducted by the City Manager or his designee under the direction of any appropriate City cormnittees prior to consideration by the City Council. H. To provide an accurate accounting of actual net revenues generated by the City's income property, all costs and charges directly attributable to the management of a specific income property shall be debited against the gross revenues collected on that property in the fiscal year the costs are incurred. Costs and charges include property repairs and maintenance, property appraisals, and consultant fees, as authorized by the City Council, City Manager or by thus Income Property Policy. I. The City Manager is authorized to sign an amendment to the lease, management contract, concession or similar agreement in order to correct any errors or discrepancies in the agreement, or to clarify provisions in the agreement. The City Manager is also authorized to sign an amendment if circumstances arise that were not reasonably foreseeable by the parties, which need to be addressed in an amendment. Notwithstanding the foregoing, the City Council shall authorize any amendment which increases or decreases the annual revenues in the agreement by $10,000 or more. Adopted - July 27,1992 Amended - January 24,1994 Amended - February 27,1995 Amended - February 24,1997 Amended - May 26,1998 Amended - August 11, 2009 Formerly F -24 e3 Lease Lots with Dock Structures Lot F- Via Waziers at Via Lido Nord Lot H- Via Orvieto at Via Lido Nord ;: r � �� � ��1���� u� �, f, �,. FIRST AMENDMENT TO LIDO ISLE BAYFRONT LETTERED LOTS LEASE THIS FIRST AMENDMENT TO LIDO ISLE BAYFRONT LETTERED LOTS LEASE ( "Amendment No. One'), is entered into as of this day of July, 2012, by and between the CITY OF NEWPORT BEACH, a California Municipal Corporation and Charter City ( "Lessor "), and LIDO ISLE COMMUNITY ASSOCIATION a California non- profit corporation whose address is 701 Via Lido Soud, Newport Beach, California 92663 ( "Lessee "), and is made with reference to the following: RECITALS: A. The City of Newport Beach has, since September 1928, held title to certain lots and parcels of real property located on Lido Isle (collectively referred to as the "Premises "). B. Lessee and Lessor first entered into a long -term lease of the Premises dated March 4, 1929 (1929 Lease). The 1929 Lease was later renegotiated into a series of new leases in December 1938, June 1951, April 1975 (1975 Lease) and April 14, 2000 ( "Antibes Marina Lease" and "Lido Isle Bayfront Lettered Lots Lease "). C. The Antibes Marina Lease effective April 14, 2000 encompasses the tidelands Parcel E. The Lido Isle Bayfront Lettered Lots Lease also effective April 14, 2000 encompasses the uplands described as the Bayfront Lettered Lots, lots A, B, C, D, E, F, G, H, I, and J in Tract 907 which are used as parks, open- space, walkways and dry boat storage areas. D. Lessor and Lessee mutually desire to amend the Lido Isle Bayfront Lettered Lots Lease to include Parcel C as part of the Leased Premises described in Exhibit A to the Agreement and to and update the City's insurance requirements pursuant to the terms and conditions included below. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. DESCRIPTION OF LEASED PREMISES Exhibit A of the Lido Isle Bayfront Lettered Lots Lease is supplemented to include Parcel C, which is more particularly described in Exhibit A and depicted in Exhibit B; both attached hereto and incorporated herein ( "Leased Premises "). 2. INSURANCE Section 9 of the Bayfront Lettered Lots Lease is amended in its entirety and replaced by the following: 9. INSURANCE In addition to Lessee's obligations pursuant to Section 10 of the Bayfront Lettered Lots Lease, Lessee shall provide and maintain, at its own expense, policies of liability insurance as follows: Lessee shall procure and maintain for the duration of the tease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee's operation and use of the leased premises. The cost of such insurance shall be borne by the Lessee. A. Minimum Scope and Limit of Insurance Coverage shall be at least as broad as: 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including property damage, bodily injury and personal injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Workers' Compensation: Insurance as required by the State of California, with Statutory Limits, and Employer's Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (for lessees with employees). 3. Property insurance: against all risks of loss to any tenant improvements or betterments, at full replacement cost with no coinsurance penalty provision. If the Lessee maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained B. Other Insurance Provisions: The policies are to contain, or be endorsed to contain, the following provisions: 1. For General Liability, the City, its officers, officials, employees, and volunteers are to be covered as insureds with respect to liability arising out of ownership, maintenance, or use of that part of the premises leased to the lessee. 2. The Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees and volunteers. Any insurance or self- insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. LIDO ISLE COMMUNITY ASSOCIATION Page 2 3. Each insurance policy required above shall contain, or be endorsed to contain, a waiver of all rights of subrogation against the City. 4. Each insurance policy shall be endorsed to state that coverage shall not be canceled except after thirty (30) days' prior written notice (ten (10) days for non- payment) has been given to the City. 5. The Property insurance shall name the City as Loss Payee as its interests may appear. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A: VII, unless otherwise acceptable to the City. C. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A: VII, unless otherwise acceptable to the City. D. Deductibles and Self- Insured Retentions The City. At the option of the City, either: the Lessee shall obtain coverage to reduce or eliminate such deductibles or self- insured retentions as respects the City, its officers, officials, employees, and volunteers; or the Lessee shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. E. Verification of Coverage Lessee shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language providing the insurance coverage required above. All certificates and endorsements are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Lessee's obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements, required by these specifications, at any time. F. Waiver of Subrogation Lessee hereby grants to City a waiver of any right to subrogation which any insurer of said Lessee may acquire against the City by virtue of the payment of any loss under such insurance. This provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. G. Special Risks or Circumstances City reserves the right to modify these requirements at any time, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. LIDO ISLE COMMUNITY ASSOCIATION Page 3 3. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Bayfront Lettered Lots Lease shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] LIDO ISLE COMMUNITY ASSOCIATION Page 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. One on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: �7 Aaron t Harp City Attorney I ATTEST: Date: Leilani I. Brown City Clerk Attachments: CITY OF NEWPORT BEACH, A California municipal corporation Date: Nancy Gardner Mayor CONSULTANT: LIDO ISLE COMMUNITY ASSOCIATION, a nonprofit corporation By: Fred Barnes President Date: By: Donna Martel Treasurer [END OF SIGNATURES] Exhibit A — Legal Description: Parcel C Exhibit B — Depiction: Parcel C A 12- 00153 /f.,l appsl catl cycomlwpdocsl d0171 p006100012571. docx LIDO ISLE COMMUNITY ASSOCIATION Page 5 EXH..lz5lT A LEiJAL'DEkkIPflbN PAR,CEL,'%,l.,e, - i s-EcTioN i OF THE BAYFRONT LETTtRED, LOTS, LEASE' A ,par'cel ofiand ;n-tid &typfNeWpqrtI3each, C6,ynty of 'Ora nge,State of'California, 8djabent to' I ot , it and lqts,,20 2kjrac007, per mapfiNqd in Rook.'28' pages 25. = 33' of Miscellaneous, Maps,, in the offjcd qf ille C-b4qty,Rpqordef ofsalO'Couhty; more particularly described as $6g�ir)nlng at the 'firieof said Lots: Wf..22;,thence.N .22;22 fe'ei, fo fire angle .point in t er�o t�jirl,�'�ifie& `said , ,,the,'sbutheely,Iihe,of said lo-2267'22 C. a di tai nCebf andlot, s 3fdr5A the Proiongaiibii, of the est erl - [in 't' aid LA L-4; srnrhehtBijllCho: Line .between fati- -6. of feefi to the'point of Inni elyj I Q,P .7 A ;cdnqifed f,fiphi record I , T1 46111 Exhibit "B" Parcel "C" Section i.p.( Rayfrant Lettered Lots Lease —No 4-V it ,VIA: Parcel 0. uQ�3 44 la 2 J ki V, Z ie 1,25-3,11-C." s2 r3 'e, Feet hf