HomeMy WebLinkAbout12 - Joint Powers Agreement with County , and an Amended and Restated Ground Lease with NAC for North Star Beach Located at 1 Whitecliffs DriveQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
October 10, 2023
Agenda Item No. 12
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Sean Levin, Recreation and Senior Services Director - 949-644-
3151, slevin@newportbeachca.gov
PREPARED BY: Lauren Wooding Whitlinger, Real Property Administrator,
Iwooding@newportbeachca.gov
PHONE: 949-644-3236
TITLE: Joint Powers Agreement with County of Orange, and an Amended
and Restated Ground Lease with Newport Aquatic Center, Inc. for
North Star Beach Located at 1 Whitecliffs Drive
ABSTRACT:
The City of Newport Beach (City) and County of Orange (County) are joint owners of the
property known as North Star Beach in the Upper Newport Bay. Under a joint power
agreement between the City and County executed in 1982, the City ground -leased a
portion of the property to a non-profit entity, Newport Aquatic Center, Inc. (NAC), to
develop and operate a facility to promote human -powered watercraft sports. The existing
ground lease expires in October 2023, and a new agreement is needed to continue
operation of the recreational uses at the facility. For the City Council's consideration is a
new Joint Power Agreement (JPA) (Attachment A) with the County, and an Amended and
Restated Ground Lease (Lease) (Attachment B) with NAC, for a new 50-year term,
updated terms and conditions, and a waiver of City Council Policy F-7.
RECOMMENDATIONS:
a) Determine this action exempt from 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;
b) Authorize the Mayor and City Clerk to execute the North Star Beach — Joint Power
Agreement by and between the County of Orange and the City of Newport Beach, to
treat the property at 1 Whitecliffs Drive as a single parcel and designate the City to
administer and oversee its use, in a form substantially similar to the agreement
attached to the staff report;
c) Authorize the City Manager and City Clerk to execute the Amended and Restated
Ground Lease between the City of Newport Beach and Newport Aquatic Center, Inc.,
for continued use of the property known as North Star Beach located at 1 Whitecliffs
Drive, in a form substantially similar to the amendment attached to the staff report;
and
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Joint Powers Agreement with County of Orange, and an Amended and
Restated Ground Lease with Newport Aquatic Center, Inc. for
North Star Beach Located at 1 Whitecliffs Drive
October 10, 2023
Page 2
d) Approve a waiver of City Council Policy F-7 — Income and Other Property based on
the findings contained in this staff report and the Lease, that conducting an open bid
process or changing the tenant would result in excessive vacancy, and the use of the
property provides an essential or unique service to the community and is of a public
benefit, and might not otherwise be provided where an open bid or full fair market
value of the property be required, and based on the unique services provided by
tenant, its board members are appointed through a process that ensures board
members maintain the requisite experience and contributions to the tenant's
operations.
DISCUSSION:
Since 1978, the City and County have been joint fee owners of the parcels in Upper
Newport Bay known as North Star Beach located at 1 Whitecliffs Drive, Newport Beach
(Property) (Attachment C). The Property is made up of two parcels, totaling approximately
16 acres, and is subject to deed restrictions limiting the use of the land to a public park
compatible with an ecological reserve and/or wildlife refuge, and public beach and related
public facilities. A large portion of the Property is tidelands originally granted to the
County, in trust, to manage on behalf of the State of California.
History
A joint power agreement was executed between the City and County in 1987 (Attachment
D), which designated the City as the lead agency responsible for soliciting bids from
non-profit corporations to ground lease and develop an aquatic facility at the Property.
In 1987, the City and NAC entered into a Ground Lease (Attachment E) for NAC's use of
an approximately 4-acre portion of the Property to construct and operate an aquatic
center with an 18,228-square-foot structure providing boat storage, locker and training
rooms, offices, and meeting rooms, as well as a bulkhead, docks, landscaping, parking,
restroom and related facilities (Premises). The improvements were subject to compliance
with Use Permit No. 3104 issued in 1984 by the City's Planning Commission and Coastal
Development Permit No. 5-84-786 issued in 1985 by the California Coastal Commission.
In 1997, upon NAC's completion of an expansion of the facility, an Addendum to the
Ground Lease (Attachment E) between the City and NAC went into effect, which extended
the lease term for 25 years. The Ground Lease is set to expire October 27, 2023.
NAC approached the City in 2016 requesting a new lease for the Premises in
consideration of its recent renovation to the restroom and locker rooms, and in
anticipation of further renovations to the facility and the fleet of vessels. After negotiating
a new lease and JPA, the documents were submitted to the County Board of Supervisors
and the JPA was approved by the County on November 20, 2018. Additional negotiations
between the City and NAC delayed bringing the new agreements forward until this time.
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Joint Powers Agreement with County of Orange, and an Amended and
Restated Ground Lease with Newport Aquatic Center, Inc. for
North Star Beach Located at 1 Whitecliffs Drive
October 10, 2023
Page 3
City Council Policy F-7, Income and Other Property
Due to NAC's long-term use of the Premises and the unique services provided for the
community, staff did not conduct an open bid process to solicit proposals from other
operators, as typically required by City Council Policy F-7, Income and Other Property
(Attachment F) (Policy).
Staff believes the following findings can be made, as required by the Policy, when certain
sections of the Policy cannot be followed, and a waiver is requested:
1. Converting the property to another use or changing the operator of the property would
result in excessive vacancy, which would outweigh other financial benefits;
2. NAC provides an essential or unique service to the community that might not
otherwise be provided where full market value of the property be required;
3. With the use of the Property limited to public recreation facilities by the tidelands grant
and deed restrictions, the facility provides a public benefit to the community and is of
statewide benefit and might not otherwise be provided were an open bid or full fair
market value of the property be required; and
4. NAC's by-laws and charter documents do not provide for the election of directors that
allows members to vote, however, based on the unique services provided by tenant,
its board members are appointed through a process that ensures board members
maintain the requisite experience and contributions to NAC (Attachment G). Further,
NAC will ensure its by-laws and charter documents have a governance and
operational structure that is consistent with best practices for non-profit corporations.
Joint Powers Agreement
The proposed terms of the JPA are summarized below:
1. County consents to City's lease of the Property under a 50-year ground lease,
provided the tenant is a non-profit corporation offering public access for water sports,
the use conforms to the various permits and approvals granted by the use and
development permits, and complies with any environmental requirements.
2. City shall be responsible for reviewing any construction at the Property.
3. All use of the Property as an aquatic center shall be at no cost to the City and County.
4. The aquatic center facilities shall promote access to the water and be available for
use by all residents of the county, including access to restrooms and public parking.
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Joint Powers Agreement with County of Orange, and an Amended and
Restated Ground Lease with Newport Aquatic Center, Inc. for
North Star Beach Located at 1 Whitecliffs Drive
October 10, 2023
Page 4
Amended and Restated Ground Lease
The proposed terms of the Lease are summarized below:
1. The initial term is 30 years, with two, 10-year extension options, for a total possible
term of 50 years, unless terminated earlier as provided by the Lease.
2. Consideration for the Lease is waived in exchange for NAC's continued operation of
the facility as an aquatic center promoting human -powered watercraft sports,
educational, and recreational programs and activities, at no cost to the City.
3. NAC shall continue to operate the facility in accordance with a City -approved Facilities
Management Plan (FMP), which shall outline the programs, services and activities
offered at the facility, fees or membership dues, hours of operation, and other pertinent
details. Conditions related to parking, hours of operation, storage of vessels and
vehicles, public use, and other operational characteristics are also specified in the
Lease.
4. The facility and Premises shall continue to be subject to all of the entitlements and
permits issued by the City, County, state and federal agencies with oversight of the
Property.
5. Each calendar year, NAC shall expend the equivalent of at least 3% of its gross
revenues on repairs, maintenance and refurbishments to the facility. A report of its
anticipated expenditures and actual expenditures are to be included in annual reports
to the City. Additionally, NAC and the City will perform a site walk each year to inspect
the condition of the facility.
6. Annually, NAC will be required to submit annual financial and programmatic reports
to the City, as well as forecasts of upcoming operations and a list of current board
members.
7. Internal controls over its accounting procedures and financials and annual audits,
consistent with generally accepted accounting principles (GAAP), will be required of
NAC.
8. NAC will accept the Premises in its current as -is condition.
9. NAC shall continue to provide certificates of insurance to the satisfaction of the City's
property manager, naming the City and County as additional insured.
The JPA and Lease have been reviewed by the City Attorney's Office and have been
approved as to form. The JPA has been approved and executed by the County Board of
Supervisors. NAC has reviewed and approved the terms of the Lease.
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Joint Powers Agreement with County of Orange, and an Amended and
Restated Ground Lease with Newport Aquatic Center, Inc. for
North Star Beach Located at 1 Whitecliffs Drive
October 10, 2023
Page 5
FISCAL IMPACT:
There is no financial impact related to the JPA. Consideration under the Lease ensures
the facility will continue to be available to the public for recreational uses related to
human -powered watercraft sport during the term, at no cost to the City.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find approval of the Agreement 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).
ATTACHMENTS:
Attachment A
— Joint Power Agreement (linked due to file size)
Attachment B
— Amended and Restated Ground Lease Agreement
Attachment C
— Maps
Attachment D
— 1987 Joint Power Agreement
Attachment E
— 1987 Ground Lease and 1997 Addendum
Attachment F —
City Council Policy F-7, Income and Other Property
Attachment G
— Letter from Newport Aquatic Center, Inc.
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Attachment A
Joint Power Agreement
File Link
[linked due to file size]
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Attachment B
Amended and Restated Ground Lease Agreement
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AMENDED AND RESTATED GROUND LEASE
by and between
CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
"Lessor"
and
NEWPORT AQUATIC CENTER, INC.,
a non-profit public benefit corporation
"Lessee"
Dated as of , 2023
12-8
AMENDED AND RESTATED
GROUND LEASE
BETWEEN THE CITY OF NEWPORT BEACH
AND
NEWPORT AQUATIC CENTER, INC.
THiS AMENDED AND RESTATED GROUND LEASE ("Lease") is made as of
, 2023 ("Effective Date"), by and between the CITY OF NEWPORT BEACH,
a California municipal corporation and charter city ("Lessor" or "City") and NEWPORT
AQUATIC CENTER, INC., a non-profit public benefit corporation, organized and existing
under and by virtue of the laws of the State of California ("Lessee"). Lessor and Lessee
are at times individually referred to as "Party" and collectively as "Parties" herein.
RECITALS
This Lease is made with reference to the following facts, the materiality and
existence of which is stipulated and agreed by the Parties:
A. Lessor and the County of Orange ("County") are joint owners of
approximately twelve (12) acres of tidelands, subject to a public trust, and an
approximately four (4) acre parcel located at 1 Whitecliffs Drive (A.P.N. 11 i-381-06), both
of which are located in the City of Newport Beach and are together commonly known as
North Star Beach.
B. In November 1982, the qualified electors of the City of Newport Beach
approved a Measure, which granted the City Council the authority to lease a portion of
North Star Beach for the construction of facilities to promote sports involving human -
powered watercraft.
C. The portion of North Star Beach selected for the construction of facilities to
promote sports involving human -powered watercraft is approximately 3.9 acres of land,
as legally described and more particularly depicted in Exhibit "A" which is attached hereto
and incorporated by reference herein ("Property").
D. On September 6, 1984, the Planning Commission of the City of Newport
Beach approved Lessee's application for a use permit ("Use Permit No. 3104"), as
amended August 18, 1988, authorizing the construction of an 18,228 square foot structure
to provide facilities for human -powered watercraft and their owners, including boat
storage, a multi -purpose area, meeting room, a weight training room, small offices for the
conduct and operation of the facility, locker rooms, and such other facilities as may be
incidental to sports involving human -powered watercraft. In addition, Lessee proposed
to construct a bulkhead along a portion of the beach frontage, build low-lying docks to
serve only human -powered craft, landscape the Property, and provide appropriate public
parking, restroom facilities, and access to the beach.
Newport Aquatic Center, Inc. Page 1
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E. On February 14, 1985, the California Coastal Commission approved
Lessee's application for a Coastal Development Permit authorizing the construction of the
aquatic center ("Coastal Development Permit No. 5-84-786"), as amended on November
16, 1988 ("Coastal Development Permit No. 5-84-786A").
F. The Property is subject to restrictions, including, but not limited to,
limitations specified in Chapter 415 of the California State Statutes of 1975 and Chapter
74 of the California State Statutes of 1978, as amended ("Tidelands Grant"), the
Corporation Grant Deed recorded on April 22, 1975 in Book 11382, Page 1923, Official
Records of the County of Orange (whereby the Irvine Company granted a portion of the
Property to Lessor and County jointly), the Grant Deed recorded on March 13, 1978 in
Book 12594, Page 990, Official Records of the County of Orange (whereby the County
granted to Lessor an undivided one-half interest in a portion of the Property).
G. The Tidelands Grant requires the Tidelands to be used to promote the
public's interest in water -dependent or water -oriented activities, as described more fully
therein. The Tidelands Grant provides that the Tidelands shall not, at any time, be
granted, conveyed, given, or alienated to any individual, firm or corporation for any
purpose whatever except pursuant to Lessor's grant of either a franchise or lease. The
Tidelands Grant authorizes Lessor to enter into leases of the Tidelands for a period not
exceeding fifty (50) years so long as such leases are consistent with Lessor's obligations
to hold the Tidelands in trust for the uses and purposes contained in the Tidelands Grant.
H. Lessor determined the proposed aquatic center and the uses to which it is
put are consistent with the limitations and restrictions imposed on the Property.
1. It was determined that the residents of the City, County, and State derive
substantial benefit from the construction of the aquatic center in that-
1 . Newport Harbor has ideal water conditions for the training and
development of world -class rowers, canoers, and kayakers, but no facility
existed to accommodate these athletes and there was no organized public
program for these specific water sports outside collegiate programs.
2. Construction of the aquatic center would provide a facility for world -
class athletes, as well as encourage and provide for public participation in
human -powered aquatic sports at all levels of ability;
3. A portion of the aquatic center would be available for use by
members of the general public on a daily basis and would be available for
use by the City.
J. On March 24, 1987, the City and County entered into a North Star Beach —
Joint Power Agreement ("Joint Power Agreement") as a means of supervising the
development, construction and operation of the facility and giving the City the power to
execute a ground lease on the County's behalf.
Newport Aquatic Center, Inc. Page 2
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K. Lessor and Lessee entered into a Ground Lease on March 24, 1987.
L. An Addendum to Ground Lease was fully executed on October 27, 1997,
whereby the term of the Existing Lease was extended for twenty-five (25) years after a
list of conditions were satisfied, extending the lease term through October 27, 2023
("Existing Lease").
M. Lessee constructed an access road and an approximately eighteen
thousand (18,000) square foot facility on the Property known as Newport Aquatic Center
("Facility") which includes boat storage, an exercise room, weight room, locker room,
meeting room, boat workshop, and dock.
N. Lessee is currently occupying and in possession of the Property and has
made and would like to continue to make additional capital investment in the Property to
maintain and upgrade the Facility and therefore desires to enter into this Lease to secure
its interest and investment in the Property.
O, Lessor and Lessee waive all notice and other applicable provisions and
hereby terminate the Existing Lease and concurrently therewith enter into this Lease.
P. On November 20, 2018, the City and County entered into a new North Star
Beach — Joint Power Agreement to continue the relationship between City and County as
under the previous Joint Power Agreement, and to extend the term of City's power to
execute a ground lease on the County's behalf for a maximum of fifty (50) years, under
the 2017 North Star Beach - Joint Power Agreement ("2018 JPA").
Q. The Parties desire to enter this Lease for a term described herein and to
grant Lessee an option to extend the term of this Lease only if the lease term is less than
fifty (50) years.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt of which is hereby acknowledged,
the Parties hereto agree as follows:
LEASED PROPERTY
Lessor hereby leases to Lessee, for the term specified in Section 2, the
Property. The rights granted to Lessee by this Lease are subject to Lessee's compliance
with the terms, covenants and conditions in this Lease. Lessee covenants, as a material
part of the consideration for this Lease, to keep and perform each and every term,
covenant and condition of this Lease.
2. TERM
2.1 Initial Term. The "Initial Term" of this Lease shall commence on the
Effective Date and shall expire upon the thirtieth (30th) anniversary
Newport Aquatic Center, Inc. Page 3
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thereof, unless terminated sooner as provided herein or extended as
provided in Section 2.2.
2.2 Option to Extend. Provided Lessee is not then in default, upon
Lessee's written request, and upon approval of Lessor, Lessee may
extend the term of this Lease for two (2) additional successive terms
of ten (10) years ("Option Term" or "Option Terms") commencing on
expiration of the Initial Term or the first Option Term, on the same
terms and conditions as contained in this Lease as it may be
amended. Lessee may exercise each option by giving Lessor written
notice of its intention to extend at feast six (6) months prior to
expiration of the Initial Term or the expiration of the first Option Term,
as the case may be.
2.3 Terms of Lease. The "Term" is defined as the Initial Term and, if
exercised, the Option Term or Option Term(s).
2.4 Holdover. This Lease shall terminate and become null and void
without further notice upon the expiration of the Term of this Lease
or any Option Term. Any holding over by Lessee after the expiration
of the Term shall not constitute a renewal or extension and shall not
give Lessee any rights in or to the Property, as defined herein, or any
part thereof except as expressly provided in this Lease. Any holding
over after the expiration of the Term with the consent of the Lessor
shall be construed to be a tenancy from month -to -month on the same
terms and conditions set forth in this Lease insofar as such terms
and conditions may be applicable to a month -to -month tenancy
("Holdover Term"). The month -to -month tenancy may be terminated
without cause by Lessee or Lessor upon thirty (30) calendar days'
prior written notice to the other.
3. BUSINESS PURPOSES AND USE OF PROPERTY
3.1 Business Purposes. During the Term of this Lease, Lessee shall use
and occupy the Property solely and exclusively for the operation of an
aquatic center and associated ancillary uses. The Property shall be
used for recreational and instructional activities related to human -
powered watercraft, such crafts include, but are not limited to vessels
used for rowing, kayaking and canoeing, and involving incidental
motorboats used by coaches/trainee's during instructional programs.
Permitted related activities include safety instruction,
classroomloutdoor instruction and physical training which directly
enhance the individual's ability to operate human -powered watercraft.
Sunbathing, swimming, fishing, picnicking and other passive
recreational uses shall be permitted at the beach and bayside area, so
Newport Aquatic Center, Inc. Page 4
12-12
long as those activities do not interfere with instructional programs or
related activities (comprehensively, "Business Purposes").
3.2 This Lease is subject to all of the conditions, covenants, restrictions and
limitations of Use Permit No. 3104, as amended and Coastal
Development Permit No. 5-84-786, as amended. Any amendments to
the Use Permit or Coastal Development Permit shall automatically be
incorporated into this Lease without further action by the Parties.
Additionally, Lessee agrees to comply with the following conditions
and/or any other regulatory requirements or restrictions that may be
placed on the" Property by local, state, or federal agencies with such
jurisdiction:
3.2.1 Parking. Eighty-three (83) parking spaces currently exist at
the Facility and shall be maintained by Lessee. These parking
spaces shall be secured by a chain or gate at the entrance in
accordance with the operating hours of the Facility. All
employees shall park their vehicles on -site. If parking is
utilized for storage of boat trailers required for Lessee's
Business Purposes, such use shall be in addition to the
minimum 83 parking spaces provided for motor vehicles. The
storage of vehicles, boats, boat trailers for or by third parties
is strictly prohibited, with the exception of visiting trailers and
boats, which shall be allowed on the Property for the duration
of the event.
3.2.2 Hours of Operation. The hours of operation shall be limited to
6:00 a.m. to 10.00 p.m. daily. No outdoor programs shall be
offered after the hour of 7:00 p.m. Only advanced training
activities are permitted between 6:00 a.m. and 7:00 a.m.
Advanced training activities include only non -beginner,
proven advanced ability, serious, dedicated, and committed
Newport Aquatic Center ("NAC") members. Only NAC
participants and/or NAC programs that have obtained
permission from and have been certified by the NAC Director
may train from NAC between the hours of 6:00 a.m. and 7:00
a.m. The NAC Director is responsible for maintaining and
monitoring the amount of early morning users, which shall be
limited in size. No public class offerings shall be allowed prior
to 7:00 a.m. All early morning NAC users shall be informed of,
and have a clear understanding of the NAC "No Noise Policy,"
contained in Lessee's Facility Management Plan (°FMP").
3.2.3 Boat Fabrication. No new boat fabrication shall occur on -site
nor shall major boat maintenance occur including, but not
Newport Aquatic Center, Inc. Page 5
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limited to sanding and/or grinding fiberglass. Minor boat
maintenance and cleaning is permissible.
3.2.4 Trailers and Trailering. Trailering of boats to or from the site
shall occur only between the hours of 9.00 a.m, and 4:00 p.m.
3.2.5 Overnight Accommodations. No overnight sleeping
accommodations shall be provided on -site.
3.2.6 Reserved.
3.2.7 Weight Training Facilities. The weight training facilities shall
be used by NAC participants, and shall not be available to the
general public.
3.2.8 Boat and Vehicle Storage. Outdoor boat and/or vehicle
storage shall be limited to seasonal storage of outrigger
canoes or other equipment used for Lessee's Business
Purposes only. Storage of any boats, vehicles or other
equipment not related to Lessee's Business Purposes is
strictly prohibited. Visiting trailers and boats shall be allowed
on the Property for the duration of the event.
3.2.9 Parking Lot. The gates shall be locked no later than 10:30
p.m. daily. The parking lot lighting shall be turned off no later
than 10:30 p.m. daily.
3.2.10 Public Address System. No outdoor public address system or
any amplified outdoor sound shall be permitted without a
permit issued by the City.
3.2.11 Restrooms. Restrooms shall be made available free of charge
to members and the general public during the aquatic center's
hours of operation.
3.2.12 Point of Contact. Residents shall be provided with a point of
contact with the Facility's management, to handle complaints
regarding the Facility, such as noisy vehicles in the parking
lots or on local streets.
3.2.13 Mechanical Equipment and Trash Areas. All mechanical
equipment and trash areas shall be screened from public
view.
Newport Aquatic Center, Inc. Page 6
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3.2.14 Maximum Usage and Public Use. Use of the Facility shall be
limited to a maximum of two hundred fifty (250) persons per
day. Twenty percent (20%) of the maximum allowable daily
use of the Facility shall be reserved for general public walk-in
use of the boat launching facilities. The boat launching
facilities, public restrooms and public parking shall be
available to the general public during the hours of operation
of the Facility. Indoor boat storage shall also be made
available for members of the general public without requiring
them to enroll into any Facility program.
3.2.15 Reserved.
3.3 Personnel. Lessee shall be responsible for hiring the necessary
personnel to conduct the daily operation of Facility. Lessee shall
comply with all applicable federal, state, and local laws related to
minimum wage, social security, nondiscrimination, ADA,
unemployment compensation, and workers' compensation. If required
by the Lessor, Lessee's employees shall wear a uniform and/or an
identification badge and be subject to a background check.
3.4 Compliance with Applicable Laws_ . Lessee shall comply with all
applicable federal, state and local laws including the City of Newport
Beach Municipal Code, which may be amended from time to time.
3.5 This Lease is further subject to all of the conditions, covenants,
restrictions and limitations of the following:
3.5.1 The Corporation Grant Deed recorded on April 22, 1975 in
Book 11382, Page 1923, Official Records of the County of
Orange, whereby the Irvine Company granted a portion of the
Property to Lessor and County jointly.
3.5.2 The Grant Deed recorded on March 13, 1978 in Book 12594,
Page 990, Official Records of the County of Orange, whereby
the County granted to Lessor an undivided one-half interest in
a portion of the Property.
3.5.3 The provisions of any and all Statutes of the California
Legislature granting any portion of the Property to the City or
County.
3.5.4 The 2018 JPA dated November 20, 2018.
Lessee shall permit, and provide for, public access for activities
permitted under the Tideland Grant, including fishing, to the extent
Newport Aquatic Center, Inc. Page 7
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those activities do not interfere with the activities and programs
conducted by Lessee.
4. CONSIDERATION
4.1 The consideration for this Lease shall be the continued maintenance
and operation of the Facility and the Property by the Lessee for the
Term of the Lease at no cost to Lessor, the commitment of Lessee to
continue to utilize the Facility as an aquatic center for the advancement
of marine -oriented athletic, educational, and recreational programs and
activities, and the right of Lessor and County to utilize the Facility.
4.2 In accordance with City Council Policy F-7, whenever an open bid
process is not conducted or fair market value rent is not received for
the use of City property, the City shall make specific findings setting
forth the reasons thereof. The City is prevented by the Tideland Grant,
Coastal Commission guidelines or other restrictions, from selling the
Property or converting it to another use. The City finds that Lessee
provides an essential or unique service to the community that might not
otherwise be provided were full market value of the property required.
Additionally, as the Property is located upon public tidelands and the
rent charged is less than fair market value, the City Council finds this
use provides a public benefit to the people of California by providing
access to a low-cost aquatic center and is therefore a matter of
statewide benefit. These findings by the City are of a statewide concern
in that the beneficial uses of the property might not otherwise be
provided were full market value of the Property required.
4.3 City Council Policy F-7 provides that if the lessee is not a statewide or
national nonprofit organization, the By -Laws and charter documents of
such lessee must (1) establish a procedure wherein the election of
directors of such lessee is accomplished by an open, democratic and
transparent process that allows members to vote, (ii) has a governance
and operational structure that is consistent with best practices for non-
profit public benefit corporations as determined by the City Council, and
(iii) cannot be amended without the prior written consent of the City as
lessor. The City Council hereby waives (1), and correspondingly (iii) to
the extent it applies to (i). Lessee's By -Laws and charter documents
do not provide for the election of directors that allows members to vote.
However, based upon the unique services Lessee provides, its board
members are appointed through a process that ensures board
members maintain the requisite experience and contributions to
Lessee.
Newport Aquatic Center, Inc. Page 8
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5. CONSTRUCTION/ALTERATION BY LESSEE
5.1 Lessor's Consent. No structures, improvements, or facilities shall be
constructed or altered by Lessee without the prior submittal of plans
and specifications for the proposed scope of work approved in writing
by Lessor. In the event that any future construction or alteration of
facilities, structures, or improvements requires any discretionary
approval of the City, any conditions imposed by the City relating to
the manner, method, design and construction of the structures,
improvements or facilities shall also be conditions of this Lease.
5.2 Permits and Approvals. Lessee shall be required to obtain, prior to
any construction, all permits, licenses or approvals that may be
required from any local, state or federal entities.
5.3 Strict Compliance. All improvements constructed by Lessee on the
Property shall be constructed at no cost to Lessor, in strict
compliance with the plans and specifications approved by the City,
and coordinated with Lessor for the scheduling of any work.
5.4 Notice of Non -Res onsibilit . Lessor shall have the right, at any time,
to post and maintain on the Property, and record, as required by law,
any notice or notices of non -responsibility provided for the
Mechanics' Lien laws of the State of California.
5.5 Licensed Contractors. Lessee shall ensure that all construction
and/or alterations is/are performed by licensed and fully bonded
contractors. Lessee's contractors and any subcontractors shall
obtain insurance in an amount and form to be approved by Lessor's
Risk Manager, including workers compensation insurance as
required by law, general liability, automobile liability and builder's risk
insurance covering improvements to be constructed, all pursuant to
standard industry custom and practice. Lessor and County shall be
named as an additional insured on the contractor's and any
subcontractor's policies. Lessor reserves the right to require Lessee
to obtain performance and/or labor and materials bonds for
Improvements. Lessor shall have the right, in its sole discretion, to
require Lessee to furnish a surety bond satisfactory to Lessor to fully
protect the Premises and Lessor from the effect or enforcement of
any lien, claim or demand.
5.6 Construction Hours. Lessee shall ensure that all construction or
alterations is/are performed between 7:00 a.m. and 6:00 p.m. on
non -holiday weekdays.
Newport Aquatic Center, Inc. Page 9
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5.7 Mechanics Liens or Stop Notices. Lessee shall, at all times,
indemnify and hold Lessor harmless from any and all claims for labor
or materials in connection with the construction, repair, alteration, or
installation of the structures, improvements, equipment or facilities
on the Property, and from the costs of defending against such claims,
including reasonable attorney's fees. In the event any lien or stop
notice is imposed or recorded on the Property as a result of the
construction, repair, alteration of the Facility and/or the Property,
installation of any equipment, Lessee shall, within thirty (30) calendar
days from the filing of the lien or stop notice:
5.7.1 Record a valid release of lien or stop notice;
5.7.2 Deposit sufficient cash with Lessor to cover the amount of the
claim or lien or stop notice in question and authorize payment
to the extent of said deposit to any person or entity that
obtains any judgment with respect to said claim or lien or stop
notice; or
5.7.3. Procure and record a surety bond in accordance with the
provisions of California Civil Code Section 8424, which frees
the Property from the claim of lien or stop notice and from any
action brought to foreclose the lien or stop notice.
Lessee's failure to comply with the provisions of this Section 5 shall
constitute a material breach, and this Lease shall be subject to immediate termination,
pursuant to the provisions of Section 23 of this Lease.
6. OWNERSHIP OF IMPROVEMENTS
The Facility and all buildings, and improvements, exclusive of trade fixtures,
constructed or placed on the Property by Lessee must, upon completion of construction
or installation, be free and clear of all liens, claims or liability for labor or material, and
shall become the property of Lessor and County at the expiration of this Lease, or earlier
termination thereof, at no cost to Lessor and County. Lessor retains the right to require
Lessee, at Lessee's cost, to remove the Facility and all related buildings, personal
property, and improvements, at the expiration or termination of this Lease subject to the
provisions of this Lease.
7. UTILITIES
Lessee shall be responsible for and pay, prior to the delinquency date, all charges for
utilities furnished to or used on the Property including, without limitation, gas, electricity,
sewer, water, refuse collection, telephone service, and cable TV. Satisfactory evidence
of such payments shall be delivered to Lessor within five (5) business days of a written
request for such information.
Newport Aquatic Center, Inc. Page 10
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8. MAINTENANCE OBLIGATIONS
8.1 Maintenance by Lessee: Lessee assumes full responsibility for
operation, maintenance, and repair of the Property and Facility
throughout the Term at its sole cost, and without expense to Lessor
or County. Lessee agrees to maintain the Property and all
improvements constructed thereon in good order and repair, and to
keep the Property in a neat, clean, orderly, safe, and sanitary
condition. This includes, but is not limited to, the prevention of
accumulation of any refuse or waste materials that might constitute
a fire hazard or a public or private nuisance. After written notice to
Lessee, which notice shall specify the unsatisfactory condition and
ten (10) calendar days to cure said condition, the failure of Lessee to
cure shall constitute a material breach of the terms of this Lease.
8.2 Maintenance by Lessor: Nothing in this Lease requires Lessor or
County to perform any maintenance or repair to the Property or
Facility or to make any improvements whatsoever on or for the
benefit of the Property or Facility. However, with no less than twenty-
four (24) hours written notice from Lessor to Lessee, Lessor shall
have the right, but not the obligation, to make any emergency repairs
related to safety or hazard concerns to or on the Property or Facility.
Lessee shall reasonably cooperate with Lessor in any activity
undertaken by Lessor on the Property or Facility. Lessor may collect
its cost for emergency repairs from the Lessee.
9. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS
In the event of damage to or destruction of Lessee's buildings, facilities, or
improvements located on the Property or in the event the buildings, facilities, or
improvements located on the Property are declared unsafe or unfit for use or occupancy
by a public entity with the authority to make and enforce such declaration, Lessee shall
restore the Property to substantially the same condition as immediately prior to such
destruction at Lessee's own expense to permit full use and occupancy of the Property for
the purposes required by this Lease. Lessee may elect to terminate this Lease by giving
notice of such election to Lessor within sixty (60) days after the date of the occurrence of
any casualty if the cost of the restoration exceeds the amount of any available insurance
proceeds, if the damage has been caused by an uninsured casualty or event, or if Lessee
reasonably estimates that repairs will take more than twelve (12) months. Repair,
replacement, or reconstruction of improvements within the Property shall be
accomplished in a manner and according to plans approved by Lessor no later than three
hundred sixty-five (365) days following the event or damage to or destruction. Failure of
Lessee to complete the repair, replacement, or reconstruction of the structure or
improvements necessary to permit full use and occupancy of the Property for the
purposes required by this Lease within the time periods prescribed herein shall constitute
a material breach of the terms of this Lease.
Newport Aquatic Center, Inc. Page 11
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10. INSURANCE
Without limiting Lessee's indemnification of Lessor and County, Lessee shall
obtain, provide, and maintain at its own expense during the Term of this Lease, a policy
or policies of insurance of the type, amounts and form acceptable to Lessor. The policy
or policies shall provide, at a minimum, those items described in Exhibit "B," which is
attached hereto and incorporated herein by reference. Failure of Lessee to maintain the
required insurance and provide written evidence of such coverage to Lessor shall
constitute a material breach of the terms of this Lease.
11. HAZARDOUS SUBSTANCES
11.1 Hazardous Substance means: (i) any substance, product, waste or
other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. ("CERLCA"); the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource
Conversation and Recovery Act, 42 U.S.C. Section 6901 et seq.
"RCRA"); the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the
California Hazardous Waste Control Act, Health and Safety Code
Section 25100 et seq.; the California Hazardous Substance Account
Act, Health and Safety Code Sections 25330 et seq.; the California
Safe Drinking Water and Toxic Enforcement Act, Health and Safety
Code Sections 25249.5 et seq.; California Health and Safety Code
Sections 25280 et seq. (Underground Storage of Hazardous
Substances); the California Hazardous Waste Management Act,
Health and Safety Code Sections 25170.1 et seq.; California Health
and Safety Code Sections 25501 et seq. (Hazardous Materials
Response Plans and Inventory); or the Porter -Cologne Water Quality
Control Act, Water Code Sections 13000 et seq., all as they, from
time -to -time may be amended or re -codified, (the above -cited
statutes are here collectively referred to as the "Hazardous
Substances Laws") or any other Federal, State or local statute, law,
ordinance, resolution, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect; (ii) any substance,
product, waste or other material of any nature whatsoever which may
give rise to liability under any of the above statutes or under any
statutory or common law theory, including but not limited to
negligence, trespass, intentional tort, nuisance, waste or strict
liability or under any reported decisions of a state or federal court;
(iii) petroleum or crude oil; and/or (iv) asbestos.
Newport Aquatic Center, Inc. Page 12 12-20
11.2 From the Effective Date and throughout the Term, Lessee shall not
use, occupy, or permit any portion of the Property or Facility to be
used or occupied in violation of any Hazardous Substance Laws.
11.3 Notwithstanding any contrary provision of this Lease, and in addition
to the indemnification duties of Lessee set forth elsewhere in this
Lease, Lessee agrees to indemnify, defend, protect, and hold
harmless Lessor and County with legal counsel of their choosing,
their elected officials, officers, employees, agents, attorneys,
volunteers and representatives from and against any and all losses,
fines, penalties, claims, demands, obligations, actions, causes of
action, suits, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs), damages,
judgments, or liabilities, including, but not limited to, any repair,
cleanup, detoxification, or preparation and implementation of any
remedial, response, closure or other plan of any kind or nature which
the Lessor or County, their officials, officers, employees, agents,
attorneys, volunteers or assigns may sustain or incur, or which may
be imposed upon them, in connection with any breach of Lessee's
obligations or representations in this Lease, the use of the Property
or Facility under this Lease arising from or related to the Lessee
Parties (defined below) storage or deposit of Hazardous Substances
in violation of Applicable Laws. This section is intended to operate
as an agreement pursuant to Section 107(e) of CERCLA, 42 USC
Section 9607(e), and California Health and Safety Code
Section 25364, to insure, protect, hold harmless, and indemnify
Lessor for any claim pursuant to the Hazardous Substance Laws or
the common law.
11.4 Lessee does not, and shalt not, authorize any third party to use,
generate, manufacture, maintain, permit, store, or dispose of any
Hazardous Substances in violation of Applicable Laws on, under,
about or within the Property.
11.5 Upon expiration or earlier termination of this Lease, Lessee shall
deliver possession of the Property in compliance with Hazardous
Substance Laws.
11.6 If during the Term of this Lease, Lessee becomes aware of (i) any
actual or threatened release of any Hazardous Substances on, in,
under, from, or about the Property in violation of Hazardous
Substance Laws; or (ii) any inquiry, investigation, proceeding, or
claim by any government agency or other person regarding the
presence of any Hazardous Substances in violation of Hazardous
Substance Laws on, in, under, from or about the Property, Lessee
shall give Lessor written notice of the release or inquiry within five (5)
calendar days after Lessee becomes aware or first has reason to
Newport Aquatic Center, Inc. Page 13
12-21
believe there has been a release or inquiry and shall simultaneously
furnish to Lessor copies of any claims, notices of violation, reports,
warning or other writings received by Lessee that concern the
release or inquiry.
11.7 If the presence of any Hazardous Substances brought onto the
Property by Lessee or Lessee's employees, agents, sublessees,
licensees, concessionaires, contractors, or invitees ("Lessee
Parties"), or generated by same during the Term of this Lease,
results in contamination of the Property or adjacent properties or the
Newport Harbor in violation of Hazardous Substance Laws, Lessee
shall promptly take all necessary actions, at Lessee's sole expense,
to remove or remediate such Hazardous Substances in full
compliance with Applicable Laws. Lessee shall provide notice to
Lessor prior to performing any removal or remedial action. Lessee
shall not propose nor agree to any covenant of use restriction as part
of any removal or remediation required as a result of this provision
without Lessor's written consent. Lessee shall pay any costs Lessor
incurs in performing Lessee's obligation to clean-up contamination
resulting from Lessee's operations or use of the Property.
11.7.1 Should any clean-up of Hazardous Substances not be
completed, for which Lessee is responsible, prior to the
expiration or sooner termination of the Lease, including
any extensions thereof, then Lessee shall transfer the
amounts required to complete clean-up into an escrow
account, together with Lessor -approved instructions for
the disbursement of such amount in payment of the costs
of any remaining clean-up as it is completed, and (ii) if the
nature of the contamination or clean-up required of Lessee
is of such a nature as to make the Property untenable or
unleasable, then Lessee shall be liable to Lessor as a
holdover lessee until the clean-up has been sufficiently
completed to make the Property suitable for lease to third
parties. The estimated cost of the clean-up shall require
approval of the Lessor.
11.7.2 If Lessor determines, in its reasonable discretion, that
Lessee does not have insurance or other financial
resources sufficient to enable Lessee to fulfill its
obligations under this provision, whether or not accrued,
liquidated, conditional, or contingent, then Lessee shall, at
the request of Lessor, procure and thereafter maintain in
full force and effect such environmental impairment liability
and/or pollution liability insurance policies and
endorsements, or shall otherwise provide such collateral
or security reasonably acceptable to Lessor as is
Newport Aquatic Center, Inc. Page 14
12-22
appropriate to assure that Lessee will be able to perform
its duties and obligations hereunder.
11.8 Lessee's obligations in this Section 11 shall survive the expiration or
earlier termination of this Lease.
12. ASSIGNING, SUBLETTING AND ENCUMBERING PROHIBITED
Lessee shall not mortgage, pledge, hypothecate, encumber, transfer,
sublease, or assign its interest in this Lease, the Property, or any structure located on the
Property.
13. EMINENT DOMAIN
In the event the whole or part of the Property, the Facility or improvements
is condemned by a public entity in the lawful exercise of the power of 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 condemned and the taking of that part does not substantially
impair the capacity of the 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 impairs
the capacity of the remainder to be used for the purposes required in this Lease, Lessee
shall have the election of:
13.1 Terminating this Lease and being absolved of obligations hereunder
which have not accrued at the date possession is taken by the public
entity, or
13.2 Continuing to occupy the remainder of the Property and remaining
bound by the terms, covenants, and conditions of this Lease.
Lessee shall give notice in writing of his election hereunder within thirty (30)
calendar days of the date possession of the part is taken by the public entity. The Lessor
shall be entitled to receive and shall receive all compensation for 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 leased Property by the exercise of
eminent domain.
14. FACILITY MANAGEMENT PLAN
The purpose of Lessor for entering into this Lease is to promote the
development of sports involving human -powered watercraft, as well as facilities,
Newport Aquatic Center, Inc. Page 15
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programs, and services related thereto, all to satisfy the needs of the general public. In
furtherance of that purpose and to ensure that the operation of the Facility is in
accordance with the intent of the Lessor, Lessee shall operate the Facility in accordance
with the Facilities Management Plan ("FMP") as described herein. Any changes to the
FMP shall be submitted to the City's Recreation and Senior Services Department for prior
review and written approval. Lessor has the right to modify the FMP in the event that
operation of the Facility is inconsistent with this Lease, Use Permit No. 3104, as amended,
Coastal Development Permit No. 5-84-785, as amended, and other applicable law, rule
or regulation.
The FMP shall, at a minimum, include the following:
14.1 The programs, services and activities to be offered to members of
the general public by the Facility;
14.2 The nature of any membership program pursuant to which any dues
or fees are charged by Lessee;
14.3 The hours of operation of the Facility;
14.4 The portions of the Facility that are available for use by Lessor for
the conduct of public recreation programs, together with the days and
times that such space will be available; and
14.5 Such other provisions as City's Recreation and Senior Services
Department considers necessary to ensure that the Facility is
operated and maintained in accordance with the purpose of this
Lease.
Lessee is prohibited from using, or permitting others to use, the Facility in
any manner that is not authorized by, or inconsistent with, the FMP. The failure of Lessee
to comply with the provisions of this paragraph after written notice by Lessor shall be
considered a material breach of this Lease.
15. CAPITAL REPAIRS AND REPLACEMENTS
Lessee shall, on a calendar year basis commencing on January 1
immediately following the Effective Date, expend a sum equal to at least three percent
(3%) of Gross Revenues per annum on repairs, maintenance, refurbishments, and
improvements to the Facility (including capital improvements, such as replacement of the
roof, mechanical, electrical or similar building systems, or major portions thereof). Nothing
herein contained shall be construed as a limitation on Lessee's obligations under other
provisions of this Lease to repair, maintain and replace the Facility or Property, and each
portion thereof. Lessee shall include in each annual forecast to be submitted to Landlord
pursuant to Section 19.4 a reconciliation of funds expended for the foregoing purposes,
and evidence of all amounts expended for such work during the preceding calendar year.
Newport Aquatic Center, Inc. Page 16
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The annual reports shall also provide a budget for all capital expenditures projected to be
made during the current calendar year, projections of the estimated remaining useful life
of all major components of the Facility, and a projected schedule for funding and
accomplishing the projected capital expenditures to repair, maintain, and replace the
Facility in accordance with the terms of this Agreement. Notwithstanding anything to the
contrary contained herein, Lessee shall not be obligated to make other than ordinary
repairs and replacements of the Facility during the final five (5) years of the Term.
16. UNLAWFUL USE
Lessee agrees that no improvement shall be erected, constructed or operated on the
Property, nor any business conducted on the Property, in violation of the terms of this
Lease or of any regulation, order, law, statute, bylaw, charter provision, or ordinance of
any governmental agency having jurisdiction. Lessee shall not construct, maintain, or
allow any sign upon the Property, or improvements thereon, except as approved in writing
by Lessor, and further, such sign must be in compliance with the provisions of the Newport
Beach Municipal Code. Lessee agrees that in its performance under this Agreement,
Lessee shall make all of its services, programs and facilities available to the public as
required by Coastal Development Permit No. CD5-84-786 and not discriminate in the
operation of its programs or facilities, and shall comply with Section 11135 of the
Government Code.
17. INDEMNIFICATION
Lessee agrees to indemnify, defend and hold harmless Lessor and County,
their elected and appointed officers, agents, officials, volunteers, and employees
(collectively, the "Indemnified Parties") from and against any and all claims (including,
without limitation, claims for bodily injury, death or damage to property), demands,
obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties,
liabilities, costs and expenses (including, without limitation, attorney's fees,
disbursements and court costs) of every kind and nature whatsoever (individually, a
"Claim;" collectively, "Claims"), which may arise from or in any manner relate (directly or
indirectly) to Lessee's, Lessee's employees, contractor, subcontractor, agents, guests,
invitees, sublessee's possession, occupation or use of the Property, specifically including,
without limitation, any claim, liability, loss, or damage arising by reason of:
17.1 The death or injury of any person or damage to personal property
related to the condition of the Property or Facility or an act or
omission of Lessee or an agent, contractor, subcontractor, supplier,
employee, servant, or sublessee of Lessee;
17.2 Any work performed on the Property or Facility including the
construction and/or maintenance of improvements, or materials
furnished to the Property or Facility; and/or
17.3 Lessee's failure to perform any provision of this Lease or to comply
with any requirement of law or any requirement imposed on the
Newport Aquatic Center, Inc. Page 17
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Property or Facility by any duly authorized governmental agency or
political subdivision.
17.4 Lessor shall not be liable to Lessee for any damage to Lessee or
Lessee's property, goodwill, increased Lessee operating costs, or
loss of business or income by Lessee from any cause other than the
gross negligent, intentional or willful acts of Lessor or its elected and
appointed officers, agents, officials, volunteers, employees. Except
as otherwise expressly provided in this Agreement, Lessee releases
and also waives all claims against Lessor for damages arising for
any reason other than the gross negligent, intentional or willful acts
of City or its elected and appointed officers, agents, officials,
volunteers, employees. City shall not be liable to Lessee for any
damage to the Premises, Lessee's property, Lessee's goodwill, or
Lessee's business income, caused in whole or in part by acts of
nature including, without limitation, waves, wind and tidal flows.
This indemnity shall apply to all claims and liability regardless of whether any insurance
policies are applicable.
18. TAXES, ASSESSMENTS, AND OBLIGATIONS
18.1 Lessor hereby gives notice to Lessee, pursuant to Revenue and
Taxation Code Section 107.6, that this Lease may create a
possessory interest that is subject to the payment of taxes levied on
such interest. it is understood and agreed that all taxes and
assessments, including but not limited to said possessory interest
tax, which become due and payable upon the Property or Facility or
improvements thereon or upon fixtures, equipment or other property
installed or constructed thereon shall be the full responsibility of
Lessee, and Lessee shall cause said taxes and assessments to be
paid before delinquency and before any fine, interest or penalty is
due or imposed by operation of law. Lessee shall, upon request,
promptly furnish to Lessor satisfactory evidence of payment.
18.2 Payment of Obligations. Lessee shall promptly pay, when due, any
and all bills, debts, liabilities and obligations incurred by Lessee in
connection with Lessee's occupation and use of the Property
including the construction and/or maintenance of improvements.
19. ANNUAL INSPECTION, REPORT, AND FORECAST OF OPERATIONS
19.1 Site Walk. With prior notice, upon each anniversary of the Effective
Date and at any other reasonable times, Lessor or its authorized
representative shall have the right to walk and inspect the Property
to determine if Lessee is in compliance with the terms and conditions
Newport Aquatic Center, inc. Page 18
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of this Lease and Use Permit No. 3104 or any amendments thereto.
Lessee's Executive Director and a member of the Board of Directors
shall have the option to accompany the Lessor for such inspections
of the Property.
19.2 Annual Report. Lessee shall provide a written report to Lessor on or
before February 28 of every calendar year during the Term, including
any Option Terms, a list of any and all maintenance, repairs, or other
work completed, including the costs incurred thereof, for the prior
calendar year. This report shall also contain a list of both short- and
long-term capital improvement project plans and a capital repair and
replacement schedule for the Property.
19.3 Annual Programmatic Report. Lessee shall provide a written
report to Lessor on or before February 28 of every calendar year
during the Term, including any Option Terms, a list of any and all
programs and services provided, including the number of people
served, revenues and expenses, and any successes or
accomplishments of Lessee's programs, for the prior calendar year.
19.4 Annual Forecast of Operations. On or before February 28 of each
year during the Term or any extension thereof, Lessee shall provide
Lessor, for Lessor's approval, a forecast for the ensuing calendar
year of the amount of (i) gross revenues expected to be received by
Lessee, and (ii) a forecast for the ensuing twelve (12) month period
of budgeted capital improvements, replacements, repairs and
maintenance that Lessee anticipates expending during such
calendar year period to maintain the Facility in a manner consistent
with the original quality of the Facility and as required by this Lease.
19.5 Annual Report of Board Members. Lessee shall provide a written
report to Lessor on or before February 28 of every calendar year
during the Term, including any Option Terms, a list containing the
names of all of Lessee's Board Members for the ensuing calendar
year.
20. INTERNAL CONTROLS AUDIT & VERIFICATION
20.1 Lessee shall:
20.1.1 Maintain a system of internal accounting procedures and
financial controls subject to review by Lessor, upon
reasonable notice, to ensure accuracy of financial reporting,
the effectiveness and efficiency of operations, and
compliance with applicable laws;
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20.1.2 Maintain records on a generally accepted accounting
principles ("GAAP") basis;
20.1.3 Maintain accounting entries and reports to meet Lessee's
reporting requirements under applicable laws;
20.1.4 Hire and consult with an independent, third -party certified
public accountant to audit and certify the accuracy of Lessee's
financial statements; and
20.1.5 Prepare quarterly financial statements within sixty (60)
calendar days of each calendar quarter -end, audited annual
financial statements within seven (7) months of each calendar
year end, and general ledger journal entries and other
information on a regular basis necessary for the Lessee's
compliance with applicable laws and in accordance with
GAAP to cooperate with Lessee's independent auditing firm
in connection with the auditing or review of such financial
statements, with the cost of any such audit or review to be
borne by the Lessee.
20.2 On or before July 31 of each year, Lessee shall provide to Lessor a
verification that: i) the prior calendar year annual audit and report is
complete; and ii) the audit report resulted in no findings, or that
findings were made, but have since been resolved satisfactorily.
20.3 Lessor shall, once per year and at its cost, be entitled to conduct an
audit of all records and books of account required to be maintained
pursuant to this Agreement and applicable laws.
21. SUCCESSORS -IN -INTEREST
Unless otherwise provided in this Lease, the terms, covenants and
conditions contained herein shall apply to and bind the heirs, successors, executors,
administrators, and assigns of all the parties hereto, all of whom shall be jointly and
severally liable hereunder.
22. RESERVED
23. PARTIAL INVALIDITY
If any term, covenant, condition or provision of this Lease is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of the
Newport Aquatic Center, Inc. Page 20
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provisions hereof shall remain in full force and effect and shall, in no way, be affected,
impaired or invalidated thereby.
24. WAIVER OF RIGHTS
The failure of Lessee or Lessor to insist upon strict performance of any of
the terms, covenants, or conditions of this Lease shall not be deemed a waiver of any
right or remedy that Lessee or Lessor may have, and shall not be deemed a waiver of the
right to require strict performance of all of the terms, covenants and conditions of the
Lease thereafter, nor a waiver of any remedy for the subsequent breach or default of any
term, covenant or condition of the Lease.
25. DEFAULT IN TERMS OF LEASE BY LESSEE
25.1 Default by Lessee. The occurrence of any one or more of the
following events shall constitute a default and material breach of this
Lease by Lessee:
25.1.1 The vacating or abandonment of the Property by Lessee for
more than fifteen (15) consecutive days that was not
otherwise expressly permitted under this Lease or pre -
approved in writing by Lessor;
25.1.2 The revocation of any license, permit, or approval issued by
federal, state, or local agency with oversight authority over
Lessee;
25.1.3 The failure by Lessee to make any payment of any rent or
payment required by this Lease, as and when due, when such
failure shall continue for a period of ten (10) days after written
notice of default from City to Lessee;
25.1.4 The failure of Lessee to observe or perform any of the material
covenants, conditions or provisions of this Lease to be
observed or performed by Lessee where such failure shall
continue for a period of ten (10) days after written notice
thereof from Lessor to Lessee; provided, however, that if the
nature of Lessee's default is such that more than ten (10) days
are reasonably required for its cure, then Lessee shall not be
deemed to be in default if Lessee commences such cure
within said ten (10) day period and thereafter diligently
prosecutes such cure to completion;
25.1.5 The making by Lessee of any general arrangement or
assignment for the benefit of creditors;
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25.1.6 Lessee voluntarily files or has filed against it any petition
under any bankruptcy or insolvency act or law, or be
adjudicated a bankrupt, and the same is not dismissed within
ten (10) days;
25.1.7 The appointment of a trustee or receiver to take possession
of substantially all of Lessee's assets located at the Property
or of Lessee's interest in this Lease, where such appointment
is not discharged within ten (10) days; and
25.1.8 The attachment, execution or the judicial seizure of
substantially all of Lessee's assets located at the Property or
of Lessee's interest in this Lease, where such seizure is not
discharged within sixty (60) days.
25.2 Remedies for Uncured Defaults.
25.2.1 Cumulative Nature of Remedies. if any default by Lessee
shall continue without cure as required by this Lease, Lessor
shall have the remedies described in this Section in addition
to all other rights and remedies provided by law or equity, to
which Lessor may resort cumulatively or in the alternative.
25.2.2 Reentry without Termination. If any of the events identified in
Sections 25.1.6 through 25.1.8 occur, Lessor may reenter the
Property, and, without terminating this Lease, re -let all or a
portion of the Property. Lessor may execute any Leases
made under this provision in Lessor's name and shall be
entitled to all rents from the use, operation, or occupancy of
the Property. Lessee shall nevertheless pay to Lessor on the
dates specified in this Lease the equivalent of all sums
required of Lessee under this Lease, plus Lessor's expenses
in conjunction with re -letting, less the proceeds of any re -
letting or attornment. No act by or on behalf of City under this
provision shall constitute a Termination of this Lease unless
City gives Lessee specific written notice of Termination.
25.2.3 Termination. Lessor may terminate this Lease by giving
Lessee notice of Termination. In the event Lessor terminates
this Lease, Lessor may recover possession of the Property
(which Lessee shall surrender and vacate upon demand) and
remove all persons and property. Lessor shall be entitled to
recover the following as damages:
Newport Aquatic Center, Inc. Page 22
12-30
25.2.3.1 The value of any rent or other charges that are
unpaid at the time of Termination;
25.2.3.2 The value of any rent and other charges that
would have accrued after Termination less the amount
of rent and charges Lessor received or could have
received through the exercise of reasonable diligence
as of the date of the award;
25.2.3.3 Any other amount necessary to reasonably
compensate Lessor for the detriment proximately
caused by Lessee's failure to perform its obligations
under this Lease; and
25.2.3.4 At Lessor's election, such other amounts in
addition to or in lieu of the foregoing as may be
permitted from time -to -time by applicable California
law. Lessor shall be entitled to interest at the rate of
ten percent (10%) per annum on all rent and other
charges from the date due or the date they would have
accrued. Lessor shall also be entitled to an award of
the costs and expenses incurred by Lessor in
maintaining or preserving the Property after default,
preparing the Property for re -letting, or repairing any
damage caused by the act or omission of Lessee.
25.2.4 Use of Lessee's Personal Property. Lessor may use Lessee's
personal property and trade fixtures located on the Property
or any of such property and fixtures without compensation or
liability to Lessee for use or damage. In the alternative Lessor
may store the property and fixtures at the cost of Lessee.
Lessor shall not operate the Property in any manner tending
to indicate that the Property are affiliated with, part of or
operated in conjunction with Lessee's business.
25.3 Lessor's Right to Cure Lessee's Default. Upon continuance of any
default beyond applicable notice and cure periods, Lessor may, but
is not obligated to, cure the default at Lessee's cost. If Lessor pays
any money or performs any act required of, but not paid or performed
by, Lessee after notice, the payment and/or the reasonable cost of
performance shall be due to Lessor not later than five (5) days after
service of a written demand accompanied by supporting
documentation. No such payment or act shall constitute a waiver of
default or of any remedy for default or render Lessor liable for any
loss or damage resulting from performance.
Newport Aquatic Center, Inc. Page 23
12-31
26. RESERVATIONS TO LESSOR
The Property is accepted "as is, where is" by Lessee, subject to any and all
existing easements and encumbrances. Lessor reserves the right to install, lay,
construct, maintain, repair and operate such sanitary sewers, drains, storm water sewers,
pipelines, manholes and connections; water, oil and gas pipelines; telephone and
telegraph power lines and the appliances and appurtenances necessary or convenient in
connection therewith in, over, upon, through, across and along the Property or any part
thereof, and to enter the Property for any and all such purposes. Lessor also reserves
the right to grant franchises, easements, rights -of -way and permits in, over, upon,
through, across and along any and all portions of the Property. No right reserved by
Lessor in this clause shall be so exercised as to interfere unreasonably with Lessee's
operations hereunder or to impair the security of any secured creditor of Lessee.
27. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION
Upon the expiration or lawful termination of this Lease, including but not
limited to, termination because of default by Lessee, Lessee shall execute, acknowledge
and deliver to Lessor, within thirty (30) calendar days after receipt of written demand
therefor, a good and sufficient deed, whereby all right, title and interest of Lessee in the
Property and Facility is quitclaimed to Lessor. Should Lessee fail or refuse to deliver the
required deed to Lessor, Lessor may prepare and record a notice, reciting the failure of
Lessee to execute, acknowledge and deliver such deed and said notice shall be
conclusive evidence of the lawful termination of this Lease and of all right of Lessee or
those claiming under Lessee in and to the Property.
28. LESSOR'S RIGHT TO REENTER
Lessee agrees to yield and peaceably deliver possession of the Property to
Lessor on the date of expiration or lawful termination of this Lease, whatsoever the reason
for such lawful termination.
Upon giving written notice of the expiration or lawful termination to Lessee,
Lessor shall have the right to reenter and take possession of the Property on the date
such lawful termination becomes effective without further notice of any kind and without
institution of summary or regular legal proceedings. Lawful termination of the Lease and
reentry of the Property by Lessor shall, in no way, alter or diminish any obligation of
Lessee under the Lease terms, and shall not constitute an acceptance or surrender.
29. TERMINATION OF EXISTING LEASE
Concurrently with Effective Date of this Lease, the Existing Lease is hereby
terminated.
Newport Aquatic Center, Inc. Page 24
12-32
30. NOTICES
All notices required by this lease shall be deemed to have been given when
deposited in the United States mail, first class, postage prepaid, and addressed as
follows:
If to Lessor: City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92658
Attention: City Manager
With copy to: City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92658
Attention: Real Property Administrator
If to Lessee: Newport Aquatic Center, Inc.
1 Whitecliffs Drive
Newport Beach, CA 92660
31. CITY BUSINESS LICENSE
Lessee shall obtain and maintain during the Term of this Lease, a City
business license as required by the Newport Beach Municipal Code.
32. NO ATTORNEY'S FEES
The prevailing Party in any action brought to enforce the terms and
conditions of this Lease, or arising out of the performance of this Lease, shall not be
entitled to recover its attorneys' fees.
33. MEMORANDUM OF LEASE AGREEMENT
A Memorandum of Amended and Restated Ground Lease Agreement
("Memorandum"), in a form and content similar to that contained in Exhibit "D", which is
attached hereto and incorporated by reference, shall be recorded by the parties promptly
upon execution of this Lease. Upon execution by both Parties, the Memorandum shall
be recorded against the Property in the office of the Orange County Clerk -Recorder, as
required by Government Code Section 37393.
Newport Aquatic Center, Inc. Page 25
12-33
34. NO DAMAGES
Lessee acknowledges that Lessor would not enter into this Lease if it were
to be liable for damages (including, but not limited to, actual damages, economic
damages, consequential damages, lost profits, loss of rents or other revenues, loss of
business opportunity, loss of goodwill or loss of use) under, or relating to, this Lease or
any of the matters referred to in this Lease, including, without limitation, any and all plans,
permits, licenses or regulatory approvals, and CEQA documents. Accordingly, Lessee
covenants and agrees on behalf of itself and its successors and assigns, not to sue
Lessor (either in its capacity as Lessor in this Lease or in its capacity as the City of
Newport Beach) for damages (including, but not limited to, actual damages, economic
damages, consequential damages, lost profits, loss of rents or other revenues, loss of
business opportunity, loss of goodwill or loss of use) or monetary relief for any breach of
this Lease by Lessor or for any dispute, controversy, or issue between Lessor and
Lessee arising out of or connected with this Lease or any of the matters referred to in
this Lease, including, without limitation, any and all plans, permits, licenses or regulatory
approvals, CEQA documents, or any future amendments or enactments thereto, the
parties agreeing that declaratory relief, injunctive relief, mandate and specific
performance shall be Lessee's sole and exclusive judicial remedies.
35. ENTIRE LEASE: AMENDMENTS
35.1 The terms and conditions of this Lease, all exhibits attached, and all
documents expressly incorporated by reference, represent the entire
agreement of the Parties with respect to the subject matter of this
Lease.
35.2 This Lease may be executed in counterparts, including electronic
counterparts, each of which, after all the Parties have signed this
Lease, shall be deemed to be an original, and such counterparts
shall constitute one Lease binding on the Parties.
35.3 This Lease shall supersede any and all prior agreements, oral or
written, regarding the subject matter between Lessee and Lessor.
35.4 No other agreement, promise or statement, written or oral, relating
to the subject matter of this Lease, shall be valid or binding, except
by way of a written amendment to this Lease.
35.5 The terms and conditions of this Lease shall not be altered or
modified except by a written amendment to this Lease signed by
Lessee, the City Manager, and approved as to form by the City
Attorney,
Newport Aquatic Center, Inc. Page 26
12-34
35.6 If any conflicts arise between the terms and conditions of this Lease,
and the terms and conditions of the attached exhibits or the
documents expressly incorporated by reference, the terms and
conditions of this Lease shall control.
35.7 Severability. If any term or portion of this Lease is held to be invalid,
illegal, or otherwise unenforceable by a court of competent
jurisdiction, the remaining provisions of this Lease shall continue in
full force and effect.
35.8 Any obligation of the Parties relating to monies owed, as well as
those provisions relating to limitations on liability and actions, shall
survive termination or expiration of this Lease.
35.9 Each Party has relied on its own inspection of the Property and
examination of this Lease, the counsel of its own advisors, and the
warranties, representations, and covenants in this Lease. The failure
or refusal of either Party to inspect the Property, to read this Lease
or other documents, or to obtain legal or other advice relevant to this
transaction constitutes a waiver of any objection, contention, or claim
that might have been based on such reading, inspection, or advice.
[SIGNATURES ON NEXT PAGE]
Newport Aquatic Center, Inc. Page 27
12-35
IN WITNESS WHEREOF, the parties hereto have executed this Lease, the day
and year first above written.
ATTEST:
am
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Im
Aaron ,. Harp
City r tt rney
LESSOR:
CITY OF NEWPORT BEACH,
a California municipal corporation and charter
city
Grace K. Leung
City Manager
J'iy.z3 wc,
LESSEE:
NEWPORT AQUATIC CENTER, INC., a non-
profit public benefit corporation
M
Name: William Whitford
Its: Chief Executive Officer
By:
Name: Kyle Anderson
Its: Chief Financial Officer
Attachments: Exhibit A — Property Description and Depiction
Exhibit B — Insurance Requirements
Exhibit C — 2018 JPA dated November 20, 2018
Exhibit D — Memorandum of Amended and Restated Ground Lease
Newport Aquatic Center, Inc. Page 28
12-36
IN WITNESS WHEREOF, the parties hereto have executed this Lease, the day
and year first above written.
ATTEST:
By: -
Leilani I. Brown
City Clerk
APPROVED AS TO FORM.
CITY ATTORNEY'S OFFICE
M
Aaron. Harp L)
City #tt rney
LESSOR:
CITY OF NEWPORT BEACH,
a California municipal corporation and charter
city
By: _
Grace K. Leung
City Manager
LESSEE:
NEWPORT AQUATIC CENTE , tNC., a non-
profit public benefit corporati n
By: �
Name: William Whi ford
Its: Chief Executive Officer
By:
Name: a Anderson
Its: Chief Financial Officer
Attachments: Exhibit A — Property Description and Depiction
Exhibit B — Insurance Requirements
Exhibit C — 2018 JPA dated November 20, 2018
Exhibit D — Memorandum of Amended and Restated Ground Lease
Newport Aquatic Center, Inc. Page 28
12-3 7
EXHIBIT "A"
Property Description and Depiction
Parcel 1:
A parcel of land in Upper Newport Bay adjacent to Block 53, Irvine's Subdivision in the
City of Newport Beach, County of Orange, state of California, as shown on a map
recorded in book 1, page 88 of Miscellaneous Maps in the office of the County Recorder
of said Orange County being bounded as follows:
Bounded northerly and northwesterly by the southerly and southeasterly boundary lines
of the land described in parcel 3 in a deed to the County of Orange, et al. recorded April
22, 1975 in book 11382, page 1923 of Official Records in the office of said county
Recorder.
Bounded southwesterly by the northeasterly line of North Star Lane as shown on a map
of Tract No. 4224, recorded in book 157, pages 1 through 14 of said Miscellaneous Maps.
Bounded easterly and southeasterly by the westerly line of that certain parcel of land
described in a deed to the State of California, recorded May 30, 1976 in book 11688,
page 1455 of said Official Records.
Parcel 2:
Beginning at Station 109 of the Ordinary High Tide Line as described in the final decree
entered in Case No. 20436 Superior Court of said Orange County, said Station begin in
the boundary of Tract No. 4224, as per map filed in Book 157, pages 1 through 14,
Miscellaneous Maps, records of said County; thence along: said boundary the following
described courses:
1. North 45" 21' 40" West 114.37 feet;
2. Northerly 23.56 feet along a 15.00 foot radius curve that is concave Easterly
through an angle of 90' 00' 00";
3. North 450 21' 40" West 60.00 feet;
4. North 44" 38' 20" East 487.52 feet;
5. North 560 00" 00" West 49.94 feet;
6. North 51 ° 23' 24" East 71.00 feet;
7. North 43" 05' 44" East 72.38 feet;
8. North 340 55' 00" East 78.24 feet;
9. North 540 28' 12" East 144.11 feet;
10. North 680 23' 00" East 214.41 feet;
Newport Aquatic Center, Inc. Page A-1
12-38
11. North 87" 39' 32" East 364.50 feet;
12. South 74" 08' 02" East 124.04 feet to the Southwesterly corner of Lot 80 of said
Tract; thence leaving said boundary.
13. South 16' 16' 54" West 100.14 feet, more or less, to said Ordinary High Tide Line;
thence along said Line the following described courses:
14. North 800 02' 37" West 152.20 feet;
15. South 87" 32' 32" West 164.98 feet;
16. South 820 17' 13" West 209.11 feet;
17. South 59' 23' 39" West 213.64 feet;
18. South 32' 52' 42" West 725.03 feet to the point of beginning.
Newport Aquatic Center, Inc. Page A-2
12-39
12-40
EXHIBIT "B"
Insurance Requirements
Without limiting Lessee's indemnification of Lessor, Lessee will obtain, provide and
maintain at its own expense during the Term of this Lease, a policy or policies of insurance
of the type, amounts and form acceptable to Lessor. The policy or policies shall provide,
at a minimum, those items described below.
Provision of Insurance. Without limiting Lessee's indemnification of Lessor, and
prior to commencement of work on Property by Lessee or Lessee's agents,
representatives, consultants, contractors and/or subcontractors, Lessee shall
obtain, provide and maintain at its own expense during the Term of this Lease
policies of insurance of the type and amounts described below and in a form
satisfactory to Lessor. Lessee agrees to provide insurance in accordance with
requirements set forth here. If Lessee uses existing coverage to comply and that
coverage does not meet these requirements, Lessee agrees to amend,
supplement or endorse the existing coverage.
2. Acceptable Insurers. 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 financial size category class vii (or larger) in accordance with the
latest edition of best's key rating guide, unless otherwise approved by Lessor's
Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Lessee and Lessee's agents,
representatives, consultants, contractors and/or subcontractors, shall
maintain Workers' Compensation Insurance, statutory limits, and
Employer's Liability Insurance with limits of at least one million dollars
($1,000,000) each accident for bodily injury by accident and each employee
for bodily injury by disease in accordance with the laws of the State of
California, Section 3700 of the Labor Code.
Lessee and Lessee's agents, representatives, consultants, contractors
and/or subcontractors, shall submit to Lessor, along with the certificate of
insurance, a Waiver of Subrogation endorsement in favor of Lessor, its
officers, agents, employees and volunteers.
B. General Liability insurance. Lessee and Lessee's agents, representatives,
consultants, contractors and/or subcontractors, shall maintain commercial
general liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by insurance Services Office form
CG 00 01, in an amount not less than two million dollars and 00/100
Newport Aquatic Center, Inc. Page B-1
12-41
($2,000,000) per occurrence, five million dollars and 001100 ($5,000,000)
general aggregate. The policy shall cover liability arising from premises,
operations, personal and advertising injury, and liability assumed under an
insured contract (including the tort liability of another assumed in a business
contract) with no endorsement or modification limiting the scope of
coverage for liability assumed under a contract.
C. Fire and Extended Coverage. Lessee shall maintain fire and extended
coverage insurance, together with insurance against vandalism, theft and
malicious mischief, on the improvements and fixtures, alterations, trade
fixtures, signs, equipment, personal property and inventory on or upon the
Property from loss or damage in an amount not less than one million dollars
and 001100 ($1,000,000) per occurrence.
D. Automobile Liability Insurance. Lessee and Lessee's consultants,
contractors and/or subcontractors shall maintain automobile insurance at
least as broad as Insurance Services Office form CA 00 01 covering bodily
injury and property damage for all activities of Lessee or all activities of
Lessee's consultants, contractors and/or subcontractors arising out of or in
connection with work to be performed on the Property, including coverage
for any owned, hired, non -owned or rented vehicles, in an amount not less
than two million dollars and 001100 ($2,000,000) combined single limit each
accident.
E. Builder's Risk Insurance. During construction, Lessee shall require that
Lessee's construction contractors and subcontractors maintain Builders
Risk insurance or an installation floater as directed by Lessor, covering
damages to the work for "all risk" or special causes of loss form with limits
equal to one hundred percent (100%) of the completed value of the work,
with coverage to continue until final acceptance of the work by Lessee and
Lessor. Lessor and County shall be included as an insured on such policy,
and Lessee shall provide Lessor with a copy of the policy.
F. Pollution Liability Insurance. Lessee shall require that Lessee's
construction contractors and subcontractors maintain a policy providing
contractor's pollution liability ("CPL") coverage with a total limit of liability of
no less than two million dollars and 001100 ($2,000,000) per loss and in the
aggregate per policy period dedicated to this project. The CPL shall be
obtained on an occurrence basis for a policy term inclusive of the entire
period of construction. If all or any portion of CPL coverage is available only
on a claims -made basis, then a 10-year extended reporting period shall also
be purchased. The CPL policy shall include coverage for cleanup costs,
third -party bodily injury and property damage, including loss of use of
damaged property or of property that has not been physically injured or
destroyed, resulting from pollution conditions caused by contracting
operations. Coverage as required in this paragraph shall apply to sudden
and non -sudden pollution conditions resulting from the escape or release of
smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids, or gases,
Newport Aquatic Center, Inc. Page B-2
12-42
waste materials, or other irritants, contaminants, or pollutants. The CPL
shall also provide coverage for transportation and off -site disposal of
materials. The policy shall not contain any provision or exclusion (including
any so-called "insured versus insured" exclusion or "cross -liability"
exclusion) the effect of which would be to prevent, bar, or otherwise
preclude any insured or additional insured under the policy from making a
claim which would otherwise be covered by such policy on the grounds that
the claim is brought by an insured or additional insured against an insured
or additional insured under the policy.
4. Endorsements: Policies shall contain or be endorsed to contain the following
provisions:
A. Additional Insured Status. Lessor, its elected or appointed officers, officials,
employees, agents, volunteers, and County are to be covered as additional
insureds under all general liability and pollution liability policies with respect
to liability arising out of Lessee's activities related to this Lease and with
respect to use or occupancy of the Property. Lessor and County shall be
named as an additional insured on any of Lessee's contractor's and
subcontractor's policies.
B. Primary and Non -Contributory. Policies shall be considered primary
insurance as respects to Lessor, its elected or appointed officers, officials,
employees, agents and volunteers as respects to all claims, losses, or
liability arising directly or indirectly from Lessee's operations. Any insurance
maintained by Lessor, including any self -insured retention Lessor may
have, shall be considered excess insurance only and not contributory with
the insurance provided hereunder.
C. Liability Insurance. Liability insurance shall act for each insured and
additional insured as though a separate policy had been written for each,
except with respect to the limits of liability of the insuring company.
D. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Lease shall be endorsed to waive subrogation against
Lessor, its elected or appointed officers, agents, officials, employees and
volunteers or shall specifically allow Lessee or others providing insurance
evidence in compliance with these requirements to waive their right of
recovery prior to a loss. Lessee hereby waives its own right of recovery
against Lessor and County, and shall require similar written express waivers
from each of its consultants, contractors or subcontractors.
E. Reporting Provisions. Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to Lessor, its elected or
appointed officers, officials, employees, agents or volunteers.
F. Notice of Cancellation. The insurance required by this Lease shall not be
suspended, voided, canceled, or reduced in coverage or in limits except
Newport Aquatic Center, Inc. Page B-3
12-43
after thirty (30) calendar days (ten (10) calendar days written notice of non-
payment of premium) written notice has been received by Lessor. It is
Lessee's obligation to ensure that provisions for such notice have been
established.
G. Loss Payee. Lessor shall be included a loss payee under the commercial
property insurance.
5. Additional Requirements.
A. In the event Lessor determines that (i) the Lessee's activities on the
Property creates an increased or decreased risk of loss to the Lessor, (ii)
greater insurance coverage is required due to the passage of time, or (iii)
changes in the industry require different coverage be obtained, Lessee
agrees that the minimum limits of any insurance policy required to be
obtained by Lessee or Lessee's consultants, contractors or subcontractors,
may be changed accordingly upon receipt of written notice from Lessor.
With respect to changes in insurance requirements that are available from
Lessee's then -existing insurance carrier, Lessee shall deposit certificates
evidencing acceptable insurance policies with Lessor incorporating such
changes within thirty (30) calendar days of receipt of such notice. With
respect to changes in insurance requirements that are not available from
Lessee's then- existing insurance carrier, Lessee shall deposit certificates
evidencing acceptable insurance policies with Lessor, incorporating such
changes, within ninety (90) calendar days of receipt of such notice.
B. Any deductibles applicable to the commercial property or insurance
purchased in compliance with the requirements of this section shall be
approved by Lessor.
C. Lessee and Lessee's consultants, contractors and/or subcontractors shall
be subject to the insurance requirements contained herein unless otherwise
specified in the provisions above or written approval is granted by Lessor.
Lessee shall verify that all consultants, contractors and/or subcontractors
maintain insurance meeting all the requirements stated herein, and Lessee
shall ensure that Lessor and County is an additional insured on insurance
required from contractors, consultants and/or subcontractors.
D. For General Liability coverage, contractors, consultants and/or
subcontractors shall provide coverage with a format at least as broad as
provided by Insurance Services Office form CG 203 80413.
E, if Lessee maintains higher limits than the minimums shown above, the
Lessor requires and shall be entitled to coverage for the higher limits
maintained by the Lessee. Any available insurance proceeds in excess of
the specified minimum limits of insurance and coverage shall be available
to Lessor.
Newport Aquatic Center, Inc. Page B-4
12-44
F. Lessee shall give Lessor prompt and timely notice of any claim made or suit
instituted arising out of or resulting from Lessee or Lessee's agents,
representatives, consultants, contractors or subcontractors performance
under this Lease.
G. Lessee shall provide certificates of insurance, with original endorsements
as required above, to Lessor as evidence of the insurance coverage
required herein. Insurance certificates must be approved by Lessor prior to
commencement of work or issuance of any permit. Current certification of
insurance shall be kept on file with Lessor at all times during the Term of
this Lease.
H. All required insurance shall be in force on the Effective Date, and shall be
maintained continuously in force throughout the Term of this Lease. In
addition, the cost of all required insurance shall be borne by Lessee or by
Lessee's consultants, contractors or subcontractors.
If Lessee or Lessee's consultants, contractors or subcontractors fail or
refuse to maintain insurance as required in this Lease, or fail to provide
proof of insurance, Lessor has the right to declare this Lease in default
without further notice to Lessee, and City shall be entitled to exercise all
available remedies.
J. Lessee agrees not to use the Property in any manner, even if use is for
purposes stated herein, that will result in the cancellation of any insurance
Lessor may have on the Property or on adjacent property, or that will cause
cancellation of any other insurance coverage for the Property or adjoining
property. Lessee further agrees not to keep on the Property or permit to be
kept, used, or sold thereon, anything prohibited by any fire or other
insurance policy covering the Property. Lessee shall, at its sole expense,
comply with all reasonable requirements for maintaining fire and other
insurance coverage on the Property.
Newport Aquatic Center, Inc. Page B-5
12-45
EXHIBIT "C"
2018 JPA dated November 20, 2018
Newport Aquatic Center, Inc. Page C-1
12-46
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
Office of the City Clerk
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
EXHIBIT "D"
[Exempt from Recordation Fee - Govt. Code Sec. 27383]
MEMORANDUM OF AMENDED AND RESTATED GROUND LEASE
This Memorandum of Amended and Restated Ground Lease ("Memorandum") is dated
, 2023, and is made between City of Newport Beach, a California municipal
corporation and charter city ("Lessor" or "City") and Newport Aquatic Center, Inc.
("Lessee"), concerning the Property legally described and depicted in Exhibit 1 ", attached
hereto and by this reference made a part hereof.
For good and adequate consideration, Lessor leases the Property to Lessee, and Lessee
hires them from Lessor, for the term and on the provisions contained in the Lease dated
2023, including without limitation provisions prohibiting assignment,
subleasing, and encumbering said leasehold without the express written consent of
Lessor in each instance, all as more specifically set forth in said Lease, which said Lease
is incorporated in this Memorandum by this reference.
The term is thirty (30) years, beginning , 2023, and ending ,
20 , and two (2) additional successive "Option Terms" of ten (10) years, on the same
terms and conditions contained in the Lease.
This Memorandum is not a complete summary of the Lease. Provisions in this
Memorandum shall not be used in interpreting the Lease's provisions. In the event of
conflict between this Memorandum and other parts of the Lease, the other parts shall
control. Execution hereof constitutes execution of the Lease itself.
[SIGNATURES ON NEXT PAGE]
Newport Aquatic Center, Inc. Page D-1
12-4 7
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Aaron C. Harp
City Attorney
LESSOR:
CITY OF NEWPORT BEACH,
a California municipal corporation and charter
city
Grace K. Leung
City Manager
LESSEE:
NEWPORT AQUATIC CENTER, INC., a non-
profit public benefit corporation
Bv:
Name: William Whitford
Its: Chief Executive Officer
By:
Name
Its:
Kyle Anderson
Chief Financial Officer
Attachments: Exhibit 1 — Property Legal Description and Depiction
Newport Aquatic Center, Inc. Page D-2
12-48
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
State of California
County of } SS.
On 20 before me,
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
(seal)
State of California
County of } ss.
On , 20 before me,
Notary Public, personally appeared
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
l certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
Newport Aquatic Center, Inc. Page D-3
12-49
EXHIBIT "'I"
Property Legal Description and Depiction
Parcel 1:
A parcel of land in Upper Newport Bay adjacent to Block 53, Irvine's Subdivision in the
City of Newport Beach, County of Orange, state of California, as shown on a map
recorded in book 1, page 88 of Miscellaneous Maps in the office of the County Recorder
of said Orange County being bounded as follows:
Bounded northerly and northwesterly by the southerly and southeasterly boundary lines
of the land described in parcel 3 in a deed to the County of Orange, et al. recorded April
22, 1975 in book 11382, page 1923 of Official Records in the office of said county
Recorder.
Bounded southwesterly by the northeasterly line of North Star Lane as shown on a map
of Tract No. 4224, recorded in book 157, pages 1 through 14 of said Miscellaneous Maps.
Bounded easterly and southeasterly by the westerly line of that certain parcel of land
described in a deed to the State of California, recorded May 30, 1976 in book 11688,
page 1455 of said Official Records.
Parcel 2:
Beginning at Station 109 of the Ordinary High Tide Line as described in the final decree
entered in Case No. 20436 Superior Court of said Orange County, said Station begin in
the boundary of Tract No. 4224, as per map filed in Book 157, pages 1 through 14,
Miscellaneous Maps, records of said County; thence along: said boundary the following
described courses:
19. North 45" 21' 40" West 114.37 feet;
20. Northerly 23.56 feet along a 15.00 foot radius curve that is concave Easterly
through an angle of 90' 00' 00";
21. North 45' 21' 40" West 60.00 feet;
22. North 44" 38' 20" East 487.52 feet;
23. North 560 00" 00" West 49.94 feet;
24. North 51 ° 23' 24" East 71.00 feet;
25. North 43" 05' 44" East 72.38 feet;
26. North 34' 55' 00" East 78.24 feet;
27. North 54" 28' 12" East 144.11 feet;
Newport Aquatic Center, Inc.
Page D-4
12-50
28. North 68' 23' 00" East 214.41 feet;
29. North 87' 39' 32" East 364.50 feet;
30. South 74' 08' 02" East 124.04 feet to the Southwesterly corner of Lot 80 of said
Tract; thence leaving said boundary.
31. South 16' 16' 54" West 100.14 feet, more or less, to said Ordinary High Tide Line;
thence along said Line the following described courses:
32. North 80' 02' 37" West 152.20 feet;
33. South 87' 32' 32" West 164.98 feet;
34. South 82' 17' 13" West 209.11 feet;
35. South 59' 23' 39" West 213.64 feet;
36. South 32' 52' 42" West 725.03 feet to the point of beginning.
Newport Aquatic Center, Inc. Page D-5
12-51
12-52
Attachment C
Maps
12-53
12-55
12-56
Attachment D
1987 Joint Power Agreement
12-57
NORTH STAR BEACH - JOINT POWER AGREEMENT
PRELIMINARY DRAFT
THIS JOINT AGREEMENT, made and entered into this ;vz day
of-3-06,-U�- , 1987, between the COUNTY OF ORANGE, a political
subdivision of the State of California, hereinafter referred to
as "COUNTY," and the CITY OF NEWPORT BEACH, a municipal
corporation, hereinafter referred to as "CITY;"
R E C I T A L S:
A. COUNTY and CITY are each owners of an undivided
one-half interest in 12+/- acres of tidelands located in the City
of Newport Beach ("Property"). The Property more specifically
described and depicted in Exhibits "A" and "B" to this Agreement.
B. COUNTY holds the Property in trust under express
condition of Legislative Tidelands Grant, Chapter 526, Statutes
of 19199 as amended, and COUNTY has granted to CITY one-half
interest in said land by deed recorded March 13, 1978 for
development of mutually beneficial public recreation facility.
C. All development and use of the Property shall be
subject to and in conformance with restrictions on use of the
property, which restrictions are set forth in said Tidelands
Grant, Chapter 526, Statutes of 1919, as amended, and the Grant
Deed by which COUNTY granted to CITY an undivided one-half
interest in the property.
D. CITY and COUNTY have approved, in concept, a
proposal submitted by Newport Beach Aquatic Center, a non-profit
corporation, which calls for the construction, at no cost to CITY
or COUNTY, of an Aquatic Center on North Star Beach.
E. The construction of an Aquatic Center on North Star
Beach would constitute a significant benefit to both CITY and
COUNTY in that the facility would be available for use by members
of the general public to serve the needs of the large number of
persons who own human -powered watercraft and provide additional
facilities to serve the general public for activities such as
public fishing access.
BE
CitV of Newpurt Beach EXHIBIT C 12-58
F. The City Council of Newport Beach submitted the
Aquatic Center proposal to the voters of the City of Newport
Beach, pursuant to the provisions of Section 1402 of the City
Charter of the City of Newport Beach, and voters approved said
proposal on November 4, 1982.
G. The legislative bodies of the CITY and COUNTY
believe that a Joint Powers Agreement would be the most efficient
means of supervising the development, construction, and operation
of the facility.
H. On September 21, 19829 COUNTY's Board of
Supervisors authorized preparation by EMA of Joint Powers
Agreement with CITY to implement proposed development of Aquatic
Center.
I. CITY and COUNTY deem it to be to the mutual
advantage of the parties hereto and in the public interest to
treat the above -described tracts of land as a single parcel and
designate the City to administer the development and operation of
proposed Aquatic Center on North Star Beach.
PARTIES, THEREFORE, IN CONSIDERATION OF MUTUAL INTERESTS
TO PROVIDE PUBLIC AQUATIC RECREATION FACILITIES, CITY AND COUNTY
AGREE AS FOLLOWS:
1. The property commonly known as North Star Beach,
which is legally described in Exhibit "A," and depicted in
Exhibit "B" shall, for purposes of this Agreement, be considered
as a single parcel.
2. CITY shall have the power to bind County to a 25
year ground lease, consistent with the terms of the Tidelands
Grant, of a portion of the Property provided:
A. The property is leased to a non-profit
corporation for development and use solely as a facility to
promote sports involving human -powered watercraft;
B. The lease has been submitted to the Director
of the Environmental Management Agency of the County of Orange
for review and approval, and the lease is in substantially the
same form as the document attached to this Agreement as Exhibit
"C IT3
C. The use of the leased premises shall be
limited to those specified in City of Newport Beach Use Permit
-2-
City of Newport Beach zJ
No. 3104 and Coastal Development Permit No. 5-84-786 (see
Exhibits "C" and "D" respectively.)
D. CITY shall be the "lead agency" with respect
to any environmental documentation required by any project (as
that term is defined in the CEQA Guidelines) undertaken by the
Aquatic Center or the City on or around the leased property.
3. CITY shall review and approve schematic and final
construction plans and specifications for construction of
proposed Aquatic Center, perform all inspections, and issue final
certificates of occupancy. Copies of approved plans and
specifications shall be provided to the Director of the
Environmental Management Agency of the County of Orange.
4. All development, construction, operation, and
maintenance of Aquatic Center shall be at no cost to CITY or
COUNTY, provided that CITY staff shall be responsible for
administering the operation of the facility to insure it is being
used in conformance with this agreement, Use Permit No. 3104 and
the long term lease.
5. Use of Aquatic Center and all its facilities shall
be granted to all residents of COUNTY on an equal basis as
residents of CITY. No person shall, on the grounds of race,
color, creed, national origin, sex, or any other
constitutionally -impermissible criteria, be excluded from
participation in, be denied benefits of, or be subjected to
discrimination under, any program or activity conducted by
Aquatic Center or within facilities constructed on said parcel of
land.
6. CITY shall ensure that the public shall have access
to the Aquatic Center facilities, including rest rooms and public
parking, and that development and operation of the Aquatic Center
promote public access to the beach.
7. The long term ground lease shall require Lessee to
provide adequate assurance that the Aquatic Center shall be
constructed in a timely manner.
8. CITY shall, to the extent permitted by law,
indemnify, defend and hold harmless the COUNTY, and its officers,
agents and employees, from and against any claim, demand, loss,
or liability arising out of the negligence or wrongful act or
omission of CITY, or its officers, agents or employees, in
approving the long-term ground lease, approving final
construction plans, specifications, and building inspections.
-3-
City of Newport Beach
12-60
The long term ground lease shall contain a provision requiring
Lessee to name the COUNTY as an additional insured with respect
to any and all operations or activities conducted by Lessee from
or at the leased premises.
9. All land and improvements shall remain the joint
property of CITY and COUNTY, and shall be maintained and operated
for public park and recreation purposes consistent with the terms
of the grant deed by which COUNTY conveyed a one-half interest in
the property to CITY.
10. In the event CITY does not approve a long term
ground lease for the construction of the Aquatic Center within
six (6) months from the date of approval of this Agreement, this
Agreement shall become null and void and cease to govern any
actions of either the CITY or COUNTY regarding the property.
11. Notices
All notices pursuant to this agreement shall be
addressed as set forth below or as either party may hereafter
designate by written notice and shall be sent through the U.S.
Mail.
COUNTY: CITY:
County of Orange City Manager
Director City of Newport Beach
Environmental Management 3300 Newport Boulevard
Agency Newport Beach, CA 92663
P.O. Box 4048
Santa Ana, CA 92702-4048
IN WITNESS WHEREOF, the parties hereto have caused this
Joint Powers Agreement to be executed by their respective
governing bodies on the dates set forth opposite their
signatures.
Dated: -D 7
City of Newport Beach
12-61
APPROVED/AS TO FORM:
By:
C'ty Attorney', Newport each"
RECOMMENDED FOR APPROVAL:
ATTEST:
B y :
C� Clerk, Newpo r t A,,iyach
M.
c;na an, tsoara o
Su ervisors,
County of Orange
ATTEST:
Director Dinda D. Robdvts
Environmental Management Agency Clerk, Board of Supervisors
APPROVED AS TO FORM:
ADRIAN KUYPER, COUNTY COUNSEL
By:
V 3 �G
V./Deputy
-5-
City of Newport Beach
12-62
Attachment E
1987 Ground Lease and 1997 Addendum
12-63
C > 1� 7
THE CITY OF NEWPORT BEACH
AND
NEWPORT AQUAT I C CENTER, INC.
GROUND LEASE
THIS GROUND LEASE, entered into thisc day of G` e.
198 by and between THE CITY OF NEWPORT BEACH, ("Lessor" and
NEW& T AQUATIC CENTER, INC., a Non-profit Public Benefit
Corporation, organized and existing under and by virtue of the
laws of the State of California (referred to as "Lessee") is made
with reference to the following facts, the materiality and
existence of which is stipulated and agreed by the parties:
A. Lessor is the owner, subject to a public trust, of
approximately 12 acres of tidelands located in the City of
Newport Beach and commonly known as North Star Beach.
B. In November, 1982, the qualified electors of the
City of Newport Beach approved a Measure which granted the City
Council the authority to lease property on North Star Beach for
the construction of facilities to promote sports involving human -
powered watercraft.
C. The property which is the subject of this lease
has been identified as that portion of North Star Beach best
suited for the construction of facilities to promote sports
involving human -powered watercraft.
D. On September 6, 1984, the Planning Commission of
the City of Newport Beach approved Lessee's application for a use
permit (No. 3104, attached as Exhibit "C") authorizing the
construction of an 18,228 square foot structure that would
provide facilities for human -powered watercraft, and their
owners, including boat storage, and multi -purpose' area and
meeting room, a weight training room, small offices for the
conduct and operation of facility, locker rooms, and such other
facilities as may be incidental to sports involving human -powered
watercraft. In addition, permittee proposed to construct a
bulkhead along a portion of the beach frontage, build low lying
docks to serve only human -powered craft, landscape the property,
and provide appropriate public parking, restroom facilities, and
access to the beach.
E. On February 14, 1985, the California Coastal
Commission approved Lessee's application for a Coastal
Development Permit authorizing the construction of the Aquatic
-1-
12-64
Center. (See Coastal Development Permit No. 5-84-786-Exhibit
"D.u)
F. The property is subject to restrictions,
including, but not limited to, limitations specified in Chapter
415, Statutes of 1975 the Grant Deed from the County of Orange to
the City of Newport Beach and (conveying an undivided one-half
interest in the property) and the limitations commonly imposed on
public tidelands. Lessor has determined that the proposed
Aquatic Center, and the uses to which it will be put, are
consistent with the limitations and restrictions imposed on the
property;
G. The residents of Newport Beach and the County of
Orange will derive substantial benefit from the construction of
the Aquatic Center in that;
1. Newport Harbor has ideal water conditions for
the training and development of world -class rowers, canoers, and
kayakers, but no facility currently exists to accommodate these
athletes and there is currently no organized public program for
these specific water sports outside collegiate programs.
2. Construction of the Aquatic Center will
provide a facility for world -class athletes, as well as encourage
and provide for public participation in human -powered aquatic
sports at all levels of ability;
3. A portion of the Aquatic Center will be
available for use by members of the general public on a daily
basis and also will be available for use by the City of Newport
Beach.
H. The County of Orange, pursuant to a joint powers
agreement, has given the City of Newport Beach the power to
execute this lease on its behalf.
NOW, THEREFORE, the parties hereto agree as follows:
1. LEASED PREMISES
Lessor hereby leases to Lessee, subject to the
terms of this Agreement, the 3.9+/- acre parcel legally described
on Exhibit "A," and depicted on the map attached as Exhibit "B"
(the "property").
dIC
12-65
2. TERM
The term of this Lease shall be twenty-five (25)
years, unless sooner terminated as provided herein, The term of
the lease shall commence on the first day of the first full
calendar month after each of the following conditions has been
satisfied:
A. The Lease has been executed by Lessor and
Lessee;
B. Lessee has applied for a building permit for
the construction of at least 35% of the floor area permitted by
Use Permit No. 3104 and for construction of any and all
improvements or facilities relating to the construction of phase
I (as defined in Paragraph 5.A. and required as conditions to Use
Permit No. 3104 and conditions 2--6 of Coastal Development Permit
5 - 8 4 - 7 8 6 ;
C. Lessee has complied with all conditions to
the approval of Use Permit No. 3104 and Coastal Development
Permit No. 5--84--786) including, but not 1 imi ted to, permits from
other public agencies, and the soils, hydrology and related
studies;
D. Lessee has submitted an Agreement, signed by
a general contractor licensed as such by the State of California,
committing the contractor to complete at least Phase I of the
project on or before March 1, 1988.
E. Lessor has received a bond guaranteeing
performance of the contract required by the provisions of
subparagraph D.' The bond guaranteeing performance of the
contract in a timely and workmanlike manner in the event
contractor fails or refuses to perform in accordance with the
contract.
Lessee must satisfy each of the conditions
precedent to the commencement of the term of the lease within
twelve months of the date of execution.
3. USE RESTRICTIONS/CONDITIONS
This Lease is subject to all of the conditions,
covenants, restrictions and limitations of the following:
A. City of Newport Beach Use Permit No, 3104;
-3-
12-66
B. Coastal Commission Development Permit No. 5-
8 4 - 7 8 6 ;
C. The Grant Deed from the County of Orange
conveying to the City of Newport Beach an undivided one-half
interest in the property and recorded March 13, 1978 in Book
12594, Page 990, Official Records of the County of Orange.
D. The provisions of any and all Statutes of the
California Legislature granting any portion of the property to
the City of Newport Beach or County of Orange.
E. The Joint Powers Agreement between the City
of Newport Beach and County of Orange (attached as Exhibit "E.")
E. Lessee shall permit, and provide for, public
access for activities permitted under the Tideland Grants,
including fishing, to the extent those activities do not
interfere with the activities and programs conducted by Lessee.
4. CONSIDERATION
The consideration for this Agreement shall be the
construction of an aquatic center by Lessee, at no cost to
Lessor, the continued maintenance and operation of this facility
for the term of the Lease at no cost to Lessor, the commitment of
Lessee to utilize the facility as an aquatic center far the
advancement of marine -oriented athletic and recreational programs
and activities, and the right of Lessor to utilize the facility.
5. CONSTRUCTION BY LESSEE
A. Project:
Lessee shall have the right, at Lessee's sole
cost and expense, to construct a facility consisting of no more
than 18,228 square feet, inclusive of boat storage areas, weight
training rooms, men 's and women's locker rooms, multi -purpose
assembly room, facility and public restrooms, and other uses, all
as shown on the plans and specifications submitted by Lessee to
the City of Newport Beach and California Coastal Commission in
conjunction with the approval of Use Permit No, 3104 and Coastal
Development Permit No. 5-84-786. Lessee shall construct, at
Lessee's sole cost and expense, at least 83 parking spaces, an
access road, and other improvements as are shown on the plans for
Phase I attached to this lease as Exhibit "F." Lessee may also
construct, at Lessee's sole cost and expense, a staging area,
dock and bulkhead, to the extent permitted by Use Permit No.
-4-
12-67
3104, subject to whatever restrictions may be imposed by any
agency having jurisdiction over such construction.
B. Phasing/Phase I:
The project may be constructed in no more
than three phases. Phase I shall consist of 8,107 square feet of
building area, 64 parking spaces, staging area, ramp, dock and
accesss road a I I as described in, shown on, the plans and
specifications attached as Exhibit "F."
Construction of subsequent phases shall not
commence until Lessor has, with respect to each phase, complied
with the provisions of subparagraphs 2.C. through 2.E.
C. Construction Schedule:
Construction of phase I shall commence within
ninety (90) days from the effective date of the lease and shall
be diligently pursued to completion in accordance with the
schedule submitted by lessee or lessee's contractor, and approved
by the Building Director of the City of Newport Beach. The time
for completion of any phase of construction may be extended in
the event of strikes, acts of God, or other events beyond the
control of lessee, but shall not be extended due to financial
problems. Failure to timely commence construction, or failure to
diligently pursue completion of any phase shall be considered a
material breach.
D. Permits and Approvals:
Lessee shall be required to obtain, prior to
commencing any phase of construction, all permits, Iicenses or
approvals that may be required in connection with that particular
phase, including, but not limited to, approvals and Permits from
the following agencies:
(1) The City of Newport Beach;
(2) The County of Orange;
(3) The California Department of Fish &
Game;
(4) The California Coastal Commission;
(5) The California aegional Water Quality
Control Boards;
-5-
12-68
(6) The Army Corps of Engineers;
(7) The United States Department of Fish &
Wildlife;
(8) The United States Bureau of Sports
Fisheries.
E. Completion Bond/Letter of Credit:
In the event the contract performance bond
provided pursuant to the provisions of paragraph 2.E. of this
lease becomes invalid, or unenforceable, for any .reason, Lessee
shall provide Lessor with a substitute letter of credit or
completion bond within five (5) days from the date on which
Lessee becomes aware of the invalidity or unenforceability or the
bond or letter of credit or, written notice from Lessor,
whichever first occurs. Any substitute bond or letter of credit
must comply with the standards specified in paragraph 2.E. of
this lease.
F. Prior Written Approval:
No structure or improvement of any kind shall
be erected or maintained on the property unless and until plans,
specifications, and proposed location of the structure or
improvement have been approved, in writing, by Lessor.
G. Notice of Non --Responsibility:
Lessor shall have the right, at any time, to
post and maintain on the premises, and record, as required by
law, any notice or notices of non -responsibility provided for the
Mechanics' Lien laws of the State of California.
H. Licensed Contractors:
All work required in the construction of any
phase of the Aquatic Center, including site preparation, work,
landscaping, utility installation and similar work shall be
performed only by competent contractors duly licensed as such
under the laws of the State of California and pursuant to written
contract between the contractor and Lessee. Unless otherwise
specified by the Building Director and Public Works Director of
the City of Newport Beach, each contract with a general
contractor shall provide that the final payment under the
contract shall be in an amount equalling at least 10% of the full
-6-
12-69
amount payable and shall not be paid to contractor until the
following, whichever last occurs:
(1) The expiration of 35 days from the
notice of recording by Lessee of a notice of completion of the
building, with Lessee agreeing to record the notice promptly
within the time specified by law; or
(2) The settlement and discharge of all
liens of record claimed by persons who supplied other labor or
materials for the construction of the project.
6. CONSTRUCTION/ALTERATION BY LESSEE
(1) Lessor's Consent:
No structures, improvements, or facilities
other than as provided in phase I, shall be constructed or
altered by Lessee without the prior written consent of the
Building Director of the City of Newport Beach. Any conditions
relating to the manner, method, design and construction of the
structures, improvements or facilities imposed by Lessor shall be
considered conditions of this Agreement as though originally
stated herein. In the event that any construction or alteration
of facilities, structures or improvements requires any
discretionary approval of any Board or Commission of the City of
Newport Beach, any conditions imposed by such Board or Commission
relating to the manner, method, design and construction of the
structures, improvements or facilities shall also be conditions
of this Lease.
(2) Strict Compliance:
All improvements constructed by Lessee on the
property shall be constructed in strict compliance with the plans
and specifications approved by the Building Director of the City
of Newport Beach.
(3) Mechanics Liens or Sty Notices:
Lessee
shall,
at all
times, indemnify and
hold Lessor
harmless from
any
and all
claims for labor or
materials
in connection
with
the
construction, repair,
alteration,
or installation
of
the structures,
improvements,
equipment or
facilities on
the property,
and from the costs of
defending against such claims,
including
reasonable attorney's
fees. In
the event any
lien
or stop
notice is imposed or
recorded on
the property as
a result of the
construction, repair,
-7-
12-70
alteration of the facility, installation of any equipment, Lessee
shall, within thirty (30) days from the filing of the Iien or
stop notice;
i, Record a valid release of Iien or stop
notice;
ii. Deposit sufficient cash with Lessor to
cover the amount of the claim or lien or
stop notice in question and authorize
payment to the extent of said deposit to
any person or entity that obtains any
judgment with respect to said claim or
lien or stop notice; or
1ii. Procure and record a Bond in accordance
with the provisions of Section 3143 CCP,
which frees the property from the claim
of lien or stop notice and from any
action brought to foreclose the lien or
stop notice.
Lessee's failure to comply with the
provisions of this paragraph, shall be considered to be a
material breach, and this Lease shall be subject to immediate
termination, pursuant to the provisions of Section 23 of this
Lease.
7. OWNERSHIP OF IMPROVEMENTS:
All buildings, improvements and facilities, exclu-
sive of trade fixtures, constructed or placed on the property by
Lessee must, upon completion of construction or installation, be
free and clear of all liens, claims or liability for labor or
material, and shall become property of Lessor and the County of
Orange at the expiration of this Lease, or earlier termination
thereof. Lessor retains the right to require Lessee, at Lessee's
cost, to remove all improvements, placed on the property by
Lessee, at the expiration or termination of this Lease subject to
the provisions of paragraph 13 of this Lease.
8. UTILITIES
Lessee shall be responsible for and pay, prior to
the delinquency date, all charges for utilities supplied to the
property and structures or improvements thereon.
9. MAINTENANCE OBLIGATIONS OF LESSEE
Lessee agrees to maintain the property and all
_8-
12-71
improvements constructed thereon in good order and repair, and to
keep said premises in a neat, clean, orderly, safe, and sanitary
condition. This includes, but is not limited to, the prevention
of accumulation of any refuse or waste materials which might
constitute a fire hazard or a public or private nuisance.
Failure of Lessee to properly maintain and repair the property
and improvements shall constitute a material breach of the terms
of this Lease.
10. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS
In the event of damage to or destruction of
Lessee's buildings, facilities, or improvements located on the
property or in the event buildings, facilities, or improvements
located on the property are declared unsafe or unfit for use or
occupancy by a public entity with the authority to make and
enforce such declaration, Lessee shall, within 120 days, commence
and deligently pursue to completion the repair, replacement, or
reconstruction of the structure or improvements necessary to per-
mit full use and occupancy of the property for the purposes
required by this Lease. Repair, replacement, or reconstruction
of improvements within the property shall be accomplished in a
manner and according to plans approved by Lessor.
11. INSURANCE
Lessee shall maintain insurance, acceptable to
Lessor, in full farce and effect throughout the term of this
Lease. The policy or policies of insurance maintained by Lessee
shall provide the following limits and coverages:
A. Liability Insurance:
Coverage
1,000,000 Bodily injury -property damage
combined single limit, which insurance shall be in force on the
first day of the term of this Lease.
B. Fire & Extended Coverage_
Not less than 90% of the cost of replacement
of all insurable improvements within the property. Water damage
and debris cleanup provisions shall be included.
C. Insurance shall be in force the first day of
the term of this Lease.
D. Each insurance policy required by this Lease
shall contain the following three clauses:
1. "This insurance shall not be cancelled,
--9-
12-72
limited in scope of coverage or nonrenewed until
after 30 days' written notice has been given to
the City Manager of the City of Newport Beach, c/o
City Attorney's Office, 3300 Newport Blvd.,
Newport Beach, California 92663"
2. "It is agreed that any insurance
maintained by the County of Orange or the City of
Newport Beach will apply in excess of, and not
contribute with, insurance provided by this
policy."
3. "The County of Orange and the City of
Newport Beach are added as additional insureds
with respect to all operations or activities of
the named insured at or from the property,"
provided, however, this language shall not be
required as a part of any insurance policy carried
by a contractor far fire and extended coverage
during construction of any phase.
E. Lessor shall retain the right, at any time,
to review the coverage, form, and amount of the insurance
required hereby. If, in the opinion of Lessor, the insurance
provisions in this Lease do not provide reasonably adequate
protection for Lessor, based upon loss experience and/or the kind
and extent of the risks which then exist, Lessor may require
Lessee to obtain additional insurance in such amount as
necessary.
F. Lessor shall notify Lessee, in writing, of
changes in the insurance requirements, and if Lessee does not
deposit copies of acceptable insurance policies with Lessor,
incorporating such changes within thirty days of receipt of such
notice, Lessee shall be in default.
G. Any and all fire, extended coverage or other
insurance proceeds that become payable at any time during the
term of this lease because of damage to, or destruction of, any
building or improvement on the property, shall be paid to Lessee
and applied by Lessee towards cost of repairing and restoring the
damage or destroyed buildings or improvements as provided in
paragraph 10 of this lease.
H. The procuring of such required policy or
policies of insurance shall not be construed to Iimit Lessee's
liability hereunder nor to fulfill the indemnification provisions
and requirements of this Lease.
-- 10 -
12-73
12. ASSIGNING, SUBLETTING AND ENCUMBERING PROHIBITED
Lessee shall not mortgage, pledge, hypothecate,
encumber, transfer, sublease or assign its interest in this
lease, the property, or any structure located on the property.
The reasons for the prohibitions specified in this paragraph
include, but are not necessarily limited to, the following:
A. The property consists of tidelands subject to
a public trust for specified purposes, and may not be transferred
or conveyed by LESSOR. The assignment or transfer of the Aquatic
Center's interest in this lease could violate the restriction or
transfer.
B. Lessor's power to enter into this Lease has
been granted by vote of the people and the Joint Powers
Agreement, (attached as Exhibit "E"), and Lessor's power to lease
the property is limited to non-profit corporations involved in
promoting sports involving human -powered watercraft. Any
assignment of the Lease or encumbrance of the property could be
inconsistent with the authority conveyed by the electorate;
C. Lessor, given the purposes for which Lessee
was formed, and limitations on its power as specified in its
articles of incorporation, has greater assurance that Lessee will
comply with the terms and conditions of this Lease and related
approvals, than any other entity or organization.
13. EMINENT DOMAIN
In the event the whole or part of the property or
improvements is condemned by a public entity in the lawful exer-
cise of the power of 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 condemned and the taking of that
part does not substantially impair the capacity of the 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 impairs the capacity of the remainder to be
used for the purposes required in this Lease, Lessee shall have
'the election of:
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12-74
E. Such other provisions as the Parks, Beaches do
Recreation Director considers necessary to ensure that the
facility is operated and maintained in accordance with the
purpose of this Agreement.
F. The right of City to modify the FMP in the
event of operation o€ the Aquatic Center is inconsistent with
this lease, Use Permit No. 3104, Coastal Development Permit No.
5-84-786 and other applicable law, rule or regulation.
Lessee shaII sumbit the proposed F1YIP to Lessor
within 120 days after the effective date of this lease. Lessee
is prohibited from using, or permitting others to use, the
facility in any manner which is not authorized by, or
inconsistent with, the approved FMP. The failure of Lessee to
comply with the provisions of this paragraph after written notice
by Lessor shall be considered a material breach of this lease.
15. UNLAWFUL USE:
Lessee agrees that no improvement shall be
erected, constructed or operated on the property, nor any
business conducted on the property in violation of the terms of
this Lease, or of any regulation, order, law, statute, bylaw,
charter provision or ordinance of any Governmental agency having
jurisdiction. Lessee shall not construct, maintain, or allow any
sign upon the property, or improvements thereon, except as
approved by Lessor, and further, such sign must be in compliance
with the provisions of Chapter 20.02 of the Newport Beach
Municipal Code. Lessee shall not discriminate against any person
or class of persons by reason of sex, color, race, creed,
national origin or age. Lessee shall make all of its services,
programs and facilities available to the public on fair and
reasonable terms.
16. INDEMNIFICATION
Lessee hereby hereby waives and claims and
recourse against Lessor, including the right of contribution, for
any loss or damage of or to persons or property in any way
related to this agreement and Lessee's activities hereunder,
except claims or liability arising from concurrent, active, or
sole negligence of Lessor, or its officers, agents, employees or
representatives. Neither party shall request a jury
apportionment.
Lessee agrees to indemnify and hold harmless and
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12-75
(1) Terminating this Lease and being absolved of
obligations hereunder which have not accrued
at the date possession is taken by the public
entity; or
(2) Continuing to occupy the remainder of the
property and remaining bounds by the terms,
covenants and conditions of this Lease.
Lessee shall give notice in writing of his
election hereunder, within 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 compensation for the condemnation of all or any por-
tion of the property by exercise of eminent domain.
Lessee shall beentitled to receive and shall
receive a I I compensation for. the condemnation of all or any
portion of the improvements constructed by Lessee on the leased
premises by the exercise of eminent domain.
14. FACILITY MANAGEMENT PLAN
The purpose of Lessor for entering into this Lease
is to promote the development of sports involving human -powered
watercraft, as well as facilities, programs and services related
thereto, a I I to satisfy the needs of the general public. In
furtherance of that purpose and to ensure that the operation of
the facility is in accordance with the intent of the Lessor,
Lessee shall submit a Facility Management Plan (FMP) to the
Director of Parks, Beaches do Recreation for the City of Newport
Beach for approval. The facilities shall be operated and
administered in accordance with the approved FN1P. The FNIP shall,
at a minimum, include the following:
A. The programs, services and activities to be
offered to members of the general public by the facility;
B. The nature of any membership program pursuant
to which any dues or fees are charged by Lessee;
C. The hours of operation of the facility;
D. The portions of the facility that are avail-
able for use by Lessor for the conduct of public recreation
programs, together with the days and times that such space will
be available;
-12-
12-76
defend Lessor, its officers, agents, employees and
representatives, from and against any and all claims, demands,
losses, damages, costs, legal and investigation expenses, or
liability of any kind or nature which Lessor or its officers,
agents and employees may sustain or incur or which may be imposed
upon them or any of them for injury to or death of persons, or
damage to property as a result of, arising out of, or in any
manner related to this Lease, or with the occupancy and use of
the property or improvements thereon by Lessee, or any of
Lessee's activities at or from the property, or its officers,
agents, employees, subtenants, licensees, patrons or visitors,
except liability arising out of the concurrent, active, or sole
negligence or wilful misconduct of Lessor or its officers,
agents, or employees.
17. TAXES AND ASSESSMENTS
This Lease may create a possessory interest which
is subject to the payment of taxes levied on such interest. It
is understood and agreed that all taxes and assessments, includ-
ing but not limited to said possessory interest tax, which become
due and payable upon the property or improvements thereon or upon
fixtures, equipment or other property installed or constructed
thereon shall be the full responsibility of Lessee, and Lessee
shall cause said taxes and assessments to be paid promptly.
18. INSPECTION
Lessor or its authorized representative shall have
the right at all reasonable times to inspect the property to
determine if Lessee is in compliance withthe terms and conditions
of this Lease and Use Permit No. 3104.
19. SUCCESSORS -IN -INTEREST
Unless otherwise provided in this Lease, the
terms, covenants and conditions contained herein shall apply to
and bind the heirs, successors, executors, administrators and
assigns of all the parties hereto, all of whom shall be jointly
and severally liable hereunder.
20. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE
If either party hereto shall be delayed or
prevented from the performance of any act required hereunder by
reason of acts of God, restrictive Governmental laws or regula-
tions, or other cause without fault and beyond the control of the
party obligated (financial inability excepted), performance of
-14-
12-77
such act shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for
a period equivalent to the period of such delay.
21. PARTIAL INVALIDITY
If any term, covenant, condition or provision of
this Lease is held by a court of competent jurisdiction to be '
invalid, void or unenforceable, the remainder of the provisions
hereof shall remain in full force and effect and shall, in no
way, be affected, impaired or invalidated thereby.
22. WAIVER OF RIGHTS
The failure of Lessee or Lessor to insist upon
strict performance of any of the terms, covenants or conditions
of this Lease shall not be deemed a waiver of any right or remedy
that Lessee or Lessee may have, and shall not be deemed a waiver
of the right to require strict performance of all of the terms,
covenants and conditions of the Lease thereafter, nor a waiver of
any remedy for the subsequent breach or default of any term,
covenant or condition of the Lease.
23. DEFAULT IN TERMS OF LEASE BY LESSEE
Should Lessee default in the performance of any
material covenant., condition or agreement contained in this
Lease, and such default is not corrected within a reasonable time
(as determined by Lessor) after Lessee receives written Notice of
Default from Lessor, Lessor may:
(A) Terminate this Lease. A11 rights of Lessee
and those who claim under Lessee, stemming from this Lease shall
end at the time of such termination; or
(B) At Lessor's sole option, cure any such
default by performance of any act, reasonably necessary to cure
such default.
24. COSTS OF SUSTAINING AN ACTION FOR BREACH OR
DEFAULT
In the event either Lessor or Lessee commences
legal action against the other, claiming a breach or default of
this Lease, the prevailing party in such litigation shall be
entitled to recover from the other costs of sustaining such
'action, including reasonable attorney's fees as may be determined
by the Court.
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12-78
25. RESERVATIONS TO LESSOR
The property is accepted as is and where at by
Lessee, subject to any and aI1 existing easements and
encumbrances. Lessor reserves the right to install, lay, con-
struct, maintain, repair and operate such sanitary sewers,
drains, storm water sewers, pipelines, manholes and connections;
water, o i I and gas pipelines; telephone and telegraph power
lines and the appliances and appurtenances necessary or
convenient in connection therewith in, over, upon, through,
across and along the property or any part thereof, and to enter
the property for any and all such purposes. Lessor also reserves
the right to grant franchises, easements, rights -of -way and per-
mits i n, over, upon, through, across and along any and al I por-
tions of the property. No right reserved by Lessor in this
clause shall be so exercised as to interfere unreasonably with
Lessee's operations hereunder or to impair the security of any
secured creditor of Lessee.
26. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION
Upon termination of this Lease, including but not
limited to, termination because of default by Lessee, Lessee
shall execute, acknowledge and deliver to Lessor, within 30 days
after receipt of written demand therefor, a good and sufficient
Deed, whereby all right, title and interest of Lessor in the
property is quitclaimed to Lessor. Should Lessee fail or refuse
to deliver the required Deed to Lessor, Lessor may prepare and
record a Notice, reciting the failure of Lessee to execute,
acknowledge and deliver such Deed and said Notice shall be
conclusive evidence of the termination of this Lease and of all
right of Lessee or those claiming under Lessee in and to the
property.
27. LESSOR'S RIGHT TO REENTER
Lessee agrees to yield and peaceably deliver
possession of the property to Lessor on the date of termination
of this Lease, whatsoever the reason for such termination.
Upon giving written notice of termination to
Lessee, Lessor shall have the right to reenter and take posses-
sion of the property on the date such termination becomes effec-
tive without further notice of any kind and without institution
of summary or regular legal proceedings. Termination of the
Lease and reentry of the property by Lessor shall, in no way,
alter or diminish any obligation of Lessee under the Lease terms,
and shall not constitute an acceptance or surrender.
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12-79
28. NOTICES
All notices required by this lease shall be deemed
to have been given when deposited in the United States mail,
first class, postage prepaid, and addressed as follows:
LESSOR
City Manager
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663
LESSEE
Newport Beach Aquatic Center
200 Newport Center Drive
Suite 301
Newport Beach, CA 92660
IN WITNESS WHEREOF, the parties hereto have executed
this Ground Lease, the day and year first above written.
m
ATTEST
Wanda Raggio
Ci ty Cleric
LESSEE
NEIVPORT AQUAT I C CENTER, INC.
LESS
12-80
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ROLL CALL
September 6, 1984
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City ®f Newport Bead
of the City, and further that the proposed project
in terms of use, height, building floor area and
setbacks is -consistent with the legislative intent
of Title 20 of the Municipal. Code.
3. Adequate off-street parking and related vehicular
circulation are being provided in conjunction with
the proposed development.
4. The development will provide for both public
physical and visual access to the bay.
5.. That the ' height 'of the st;rueti re- is consistent
with the 'proposed use and will not.. adversely
affect any public view.
6. That the project is generally consistent with the
ballot measure approved by the electors' in June,
1962 allowing the lease of North Star Beach for an
Aquatic Center.
7. 'hat the design of the subdivision or the proposed
improvements will not conflict with any easements
acquined by the public at large for access through
or use of property within the proposed subdivi-
sion.
G. That the size and use of the Aquatic Center as
approved by this Use Perait represents "_:.s full
extent of the authority granted to the City
pursuant to the approval of proposition 0 in 1�2.
C01MITIONS
1. That development shall be in substantial confor-
mance with the approved plot plan, floor plan, and
elevations except as noted below.
2. That all improvements be constructed as required
by Ordinance and the Public Works Department.
3. That a standard use permit agreement and accompa-
nying surety be provided if it is desired to
obtain a building permit prior to completion of
the public improvements. -- t
4. That the on -site parking, vehicular circulation
and pedestrian circulation systems be subject to
further review by the 'traffic Engineer.
10 EXHIBIT C
5. That the design of the private drives conform with
the City Ia Private street Policy (L-4), except as
approved by the Public works Department. The
location, width, configuration, and concept of the
private drive system shall be subject to further
review and approval by the City Traffic Engineer.
6. That the intersection of the public street and
proposed drive be designed to provide sight
distance for a speed of 25 miles per hour.
Slopes, landscaping, walls and other obstructions
shall be considered in the sight distance require-
ments. Landscaping within,.the sight distance line
shall not exceed twenty-four (24) inches in
height. The sight ."'stance requirements may be
approximately modified at non -critical locations,
subject to approval of the Traffic Engineer.
i. Handicap parking shall be provided to meet code
and shall be marked in a manner acceptable to the
raffic Engineer.
S. That a hydrology and hydraulic study be prepared
and approved by the.Pubiif works Department, along
with a master'plan of waee�, sewer and storm drain
facilities for the on -site improvements prior to
issuance of any grading or building permits. Any
modifications or extensions to the existing storm
drain, water and sewer systems shown to be
required shall be ;:he responsibility of the
developer.
9. That a legal description of the subject property i V
be prepared and approved by the Planning Depart-
ment, Building Department and Public works Depart -
went prior to issuance of any grading or buil
with the provision of Chapter 20.06 of the Newpo
Beach Municipal Code and shall be approved by
City Traffic Engineer if located adjacent to the
vehicular ingress and egress.
11. A landscape and irrigation plan for the proj
shall be prepared by a licensed landscape marchi-
tect. The landscape plan shall integrate
phase the installation of landscaping with
proposed construction schedule. Prior
11
ding
permit.
10. That all proposed signs shall be in conformance
rt
the
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and
the
to
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12.-82
` COMM SSO-fRS
ROLL CALL
September 6, 3984
z.c 4 City of Newport- Beach
me
occupancy, a licensed landscape architect shall
certify to the Planning Department that the
landscaping has been installed in accordance with
the approved plan.
12. The landscape plan shall be subject to the revieri
of the Public Works Department, the Parks, Beaches
and Recreation Department, and the approval of the
Planning Department. '
13. The landscape plan shall include a maintenance
program which controls the use -of fertilizers and
pesticides. Y
14. The landscape plan shall place heavy .emphasis on
the use of drought -resistant native vegetation,
and be irrigated with a system designed to avoid
surface runoff and overuatering.
15. That a minimum of 63 parking spaces be provided
or the proposed development. These parking spaces
shall be secured by. a chain or gate at the
entrance on North.Star Lane in accordance with the
operating hours of the Al Center.
16. That all employees shall park their vehicles
on -site.
17. If a parking area for the storage of sat trailers
is provided, this parking shell be in addition to
the 63 parking spaces required by the project. '-
18. That the maximum height of the building not exceed
20 feet.
19. That the specific use and function of the facility
be subject to further review and approval of the
City as part of the ground lease and required
Facilities Management Plan.
20. The hours of' operation will be limited to 6:00
a.m. to 10:00 p.m. daily, and that no outdoor
programs will be offered after the hour of 7:00
P.M. Only advanced training activities are
permitted between 6:00 a.m. and 7:00 a.m.
21. That no new boat fabrication will occur onasite.
M
12
12-83
22. Trailering of boats to or the site sha141
occur only betweeh the hours o :00 a.m. and 4:0
p.m.
23. No overnight accommodations w3�1—fro de ✓
on -site, other than the coordinator apartmen�.
24. The on -site coordinator staff shall be subject to
the approval of the Parks, Beaches and Recreation
Department., A member of the on -site coordinator
staff shall be an the premises at all tir.,es. The
coordinator shall have the authority to restrict
use of the- facility do individuals with motor
vehicles which are in conformance ' With' the Motor
Vehicle Code. '
25. The weight training facilities will be used by I
aquatic program participants: and will not be,._1i
available for independent weight training pro-
grams.
26. �utdoor boat storage shall be limited to seasonal.
storage of outrigger canoes.
27. Parkinglotlighting shaI be designed in such a
manner as to conceal the light source and to
minimize light spillage and glare to the adjacent
residential uses. The plans shall lie prepared by
a licensed Electrical Engineer; with a letter from;
the Engineer stating that, in his opinion this
requirement has been met.
28. That the parking lot shall be secured by gates as
shown on the approved site plan. The gates shall
be locked.no later than 10:30 p.m.
29. The parking lot lighting shall be turned off no
latex than 10:30 p.m. on any day, and tinting
devices shall be installed and maintained to
ensure that the lights are turned of at 10:30 p.m.
30. No outdoor public address, system shall be
permitted.
31. Restrooms shall be Made available to membars of
the general public during the center's hours of
operation.
13
12-84
September 6, 1984 ,
cor��nn:ss��s MiNUrEs
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City of p
N ortBeach
32.' This use permit shall expire unless exercised
within 36 months from the date of approval.
33. Construction of the project may be phased eo long
as no part of the facility is constructed prior to
the boat storage facility..
34. That the Planning Commission' may add/or modify
conditions of approval to this use permit, or
recommend to the City Council the revocation. of
this use permit, upon a determination that the
operation which is the subject of this use permit
causes 'injury, or is detrimentalto the health,
safety,, peace# morals', comfort, or general welfare
of the community..
35. Construction of the bulkhead is subject to ap-
proval of a Harbor Permit, and is also subject to
the approval of the County of Orange, Harbor,-`
Beaches and Parks Department.
36. That an engineering study be prepared to determine.
the appropriate design for the bay frontage.'
Bulkheads, rock revetments, or other facilities
recommeAded i b� the 'study; hhall be constructed to
adequately protect the onilte improvements.
Newport Aquatic Center shall agree to construct,
maintain, and repair the bayside facilities. The .
City or other public agencies shall have no
responsibility to provide repai_- to facilities
flooded or damaged by erosion from the bay and.
adjacent drainage course, .or to otherwise protect
the improvements constructed on the site.
37. The project shall comply with the Uniform Building
Code and all local Amendments, and the City's
seismic design standards.
38. The project shall comply with the. state regu-
lations.for the handicapped.
39. Construction shall meet the requirements of Title
19 and 24 of the C.A.C. .
40. Access to the service road circling the dcuatic
complex shall be controlled by the means of a gate
or other features to prevent use by the general
public.
14 ,
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12-85
JCOM\/%NSS}ONUS September 6, 1984
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° ° e City of Newport. Beach
OLL CALL
41. Prior to the issuance of Building Permits, 'a
National -Pollutant Discharge Elimination (NPDES)
Permit shall be obtained from the Santa Ana
Regional Water Quality Control Board 'if any
discharges to the Bay are. anticipated. either
during construction or subsequent operation of the
facility. ,
42. Prior to issuance of Building Permits, an Armmy,
Corps of. Engineers Permit shall be obtained to
allow construction of the proposed bulkhead and
docking facilities.
43. Residents should be provided with' a point of
contact•wi*` the Newport Aquatic Center manage-
ment, to handle complaints of noisy vehicles in
the. parking log or on local streets.
44. All mechanical equipment and trash areas shall be
screened from public streets, -alleys, or adjoining
pFoperties.
45. Exterior lighting shall be approved by the Plan-
ning Department.
46. Development of the site 'may be subject *to a
grading permit to be approved by the Building and
Planning Department.
47. A grading. -14n will include a complete plan for
temporary and permanent, drainage facilities, to
minimize any potential impacts from silt, debris,
and other water pollutants.
48. The grading permit will include a description of
haul routes, access points to the site, and
watering and sweeping programs designed to mini-
mize impacts of grading and haul operations.
49. An erosion, siltation, and dust control plan shall
be submitted and be subject to approval by the
Building Department and a copy will -be forwarded
to the Calliornia Regional wAter Quality Control
Board, Santa Ana Region.
P
50. Grading shall be conducted in accordancer with
plans prepared by a civil engineer and based on
recommendations of a soils engineer and an engi-
neering geologist subsequent .to completion of a
• l
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12-86
A I CAI I
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comprehensive soils and geologic investigation of
the site: Permanent reproduction copies of the
"Approved as Built" grading plans on standard -size
sheets shall be furnished to the Building Depart -
went.
51. The Fire Department shall review design plans to
ensure adequate access and urgency racists.
52. The provisions of adequate fire flow shall be
reviewed by the Aire Department.
53. Structures shall be equipped with fire suppression
systems as required by Coda.
54. Final design of the project shall provide for the
incorporation + of water• -saving devices for
lavatories and other water -using facilities.
$5. All onsiti drainage shall be approved by the City j
Fuublic Works Department.
E
56. A weekly cleanup program around the project site
shall be conducted: on al1reguiar basis. During
construction. 'basins or.. other devices shall be
installed to prevent waste from entering Newport
Bay.-
57. Prior to the issuance of„building permits, a•
comprehensive soils and found ---on study will be
prepared and approved by the Planning and Building
Departments of the City of Newport Beach. �"-
58. Should any archaeological resources be uncovered
during .excavation/construction, a qualified
archaeologist or paleontologist shall evaluate the
site prior to completion of construction activ-
ities, and all work on the site shall be done in
accordance with the City Council Policies and K-5
and K-6.
59. Any mechanical equipment and emergency power
generators shall be screened from view, and noise
associated with said structures shall be sound
attenuated so as not to exceed 55 d9A at the
property lines. The latter shall be based upon
the recom-iendations of the qualified acoustical
engineer and approved by the Building Department.
16
12-87
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am
September 6, 1984
60. All construction activities will be limited to the
hours of 7:00 a.m. to 7:00 p.m. Monday through
Friday, and 9.00 a.m. to 5:00 p.m. Saturday and
Sunday.
61. ' Use of the site shall be limited to a maximum of
:250 persons per day.
62. The Dover Shores Community Association shall be
allowed to elect a representative to the Aquatic
Center Board of Directors.
63. The applicant shall record.a'restrictive covenant
limiting use of the facility to that allowed by
the terms of the lease'as executed,by City
Council..
?tanning--Commission--recessed---at---a
vened at 9:30 p.m.
Use `Permit No. 3108 (Continued Public Hearing)
Request to` permit the establishment of a retail art
gallery/stu ` on property located in the .-1 District.
LOCATION: Lots 6 and 7, Block 328, Lancaster's
Addition, located �#
at %2912 Layfayette Avenue, on the
easterly side of Layfayette Avenue,
between'29th Street and 30th Street, in
Cannery Village.
Z.O1m:
APPLICANT: Paul Blain Henrie,\ Newport Beach
®'4MR: Loma * inda Universit\.L<=a Linda
Mr. William Laycock, Current Planning Ainistrator,
advised that the Planning Staff has recormended that
the following two conditions be added if the KIsaning
Cormission desires to apprave . this Use Permit.
Condition No. 5: "That the second floor areas shall
only be used by the artist or the gallery manager fo a
studio, office, or storage purposes% and Condition N
Item No.2
Use Permit
No. 3108
Approved
Condition-
ally
2-7 1 11 H ! I 1 17 12-88
1931
nti 5 242.152
Nc 5 73.5A
AREA 3.987 ACRES
N
cn V,
Z N 810 19' 46" W
^(b 181. 5 8"
ti
ry
ti^^
UPPER NEWPORT BAY
S 400 42' 44"
W
2.10'
S 30° 28' 39"
W
" 140.46"
135;00'
W'LY
LINE O.R.
11688/1455
H A7! 07' 18" W
/ `-333.97'
,
SA ' 38' 20" W 38.33'
59. _.
N 46-- 1`'.-"40" W 859. ..
Nd cT 57AX 6ANE
N 44° 3$' 20" E 43' BASIS OF BEARINGS
PLAN PREPARED TO ILLUSTRATE LEGAL DESCRIPTION
OF LEASE AREA FOR'NEWPORT AQUATIC CENTER AT
NORTH STAR BEACH CITY OF NEWPORT BEACH COUNTY
11-OF'ORANGE, CALIFORNIA.—
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PLAN PREPARED TO ILLUSTRATE LEGAL DESCRIPTION
OF LEASE AREA FOR'NEWPORT AQUATIC CENTER AT
NORTH STAR BEACH CITY OF NEWPORT BEACH COUNTY
1 <DE!'ORANGE, CALIFORNIA.'
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EXHIBIT
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S I I E PI AN
THE CITY OF NEWPORT BEACH AND NEWPORT AQUATIC CENTER, INC.
ADDENDUM TO GROUND LEAS
WHEREAS, on March 24, 1987 a Ground Lease was entered into by and
between the CITY OF NEWPORT BEACH, ("Lessor") and NEWPORT AQUATIC
CENTER, INC., a non profit public benefit corporation, ("Lessee") for a term of twenty-five
(25) years; and
WHEREAS, Lessor and Lessee desire to extend the original Ground Lease, and
WHEREAS, Lessor and Lessee agree that all other terms and conditions are to
remain unchanged:
IT IS HEREBY agreed by and between the City of Newport Beach, Lessor, and
Newport Aquatic Center, Inc., a non profit public benefit corporation, Lessee, that the term
of the Ground Lease shall be twenty-five (25) years from the first day of the first full
calendar month after each of the following conditions have been satisfied:
A. The Lease has been executed by Lessor and Lessee;
B. Lessee has submitted construction drawings for the construction of the
remainder of the floor area permitted by Use Permit number 3104 and
Coastal Development Permit 5-84-786;
C. Lessee has applied for a building permit for the construction of the
remaining floor area permitted by Use Permit number 3104 and Coastal
Development Permit 5-84-786;
D. Lessee has complied with all conditions to the approval of Use Permit
number 3104 and Coastal Development Permit number 5-84-786, including,
but not limited to, permits from other public agencies, and the soils
hydrology and related studies;
E. Lessee has submitted an agreement, signed by a general contractor
licensed as such by the State of California, committing the contractor to
complete the remaining floor area of the project;
F. Lessor has received a bond guaranteeing performance of the contract
required by the provisions of subparagraph E. The bond shall guarantee
performance of the contract in a timely and workmanlike manner in the
event contractor fails or refuses to perform in accordance with the contract;
12-96
G. Lessee must satisfy each of the conditions precedent to the
commencement of the term of the lease within twelve (12) months of the
date of the execution of this Addendum.
IN WITNESS WHEREOF, the Parties hereto have executed this Addendum to the
Ground Lease.
Dated: .21 (�'f C� -
Dated: q /30 /c/ I
APPROVED AS TO FORM:
By: > A
Daniel K. Ohl,
Deputy City Attorney for the
City of Newport Beach
ATTEST:
LaVonne Harkless,
City Clerk for the
City of Newport Beach
LESSEE: NEWPORT AQUATIC CENTER, INC.
: BY Gt r�s
LESSOR: CITY OF NEWPORT BEACH
By:
Debay,
ayor for the
City of Newport Beach
F;lcattdebbielaglaquaticlriac25yr.doc
09-15.97
12-97
Attachment F
City Council Policy F-7, Income and Other Property
12-98
F-7
INCOME AND OTHER PROPERTY
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 or
ground leases and/or operates a yacht basin, resort hotel and apartment property, a
luxury residential development and various other income -producing properties. Much
of the income property is tidelands, filled tidelands or waterfront. Unencumbered fee
value of income property is substantial.
As owner/manager of property, the City is the steward of a public trust, and state law
requires the City to maximize its returns on state -managed property 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 financially less feasible uses and facilities that benefit the community.
In managing its property, the City will continually evaluate the potential of all City
owned property to produce revenue. This may include leasing or licensing unused land,
renting vacant space, and establishing concessions in recreation areas or other similar
techniques. The City Council will evaluate the appropriateness of establishing new
income generating opportunities on City controlled areas using sound business
principles and after receiving input from neighbors, users and the public.
The policy of the City Council is that income and other property be held and managed in
accordance with the following:
A. Whenever a lease, license, management contract, concession or similar action
regarding income property is considered by the City, an analysis shall be
conducted to determine the maximum or open market value of the property. This
analysis shall be conducted using appraisals or other techniques to determine the
highest and best use of the property and the highest income generating use of the
property.
B. All negotiations regarding the lease, license, management contract, concession, 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.
C. The City shall seek, whenever practical and financially advantageous, both in the
short and long term, to operate or manage all property and facilities directly with
City staff or contractors, provided staff have the expertise needed to competently
do so, or to oversee the work of contractors.
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12-99
F-7
D. In most negotiations regarding the lease, license, management contract,
concession, or similar action regarding an income or other property, the City shall
seek revenue equivalent to the open market value of the highest and best use; and,
whenever practicable the City shall conduct an open bid or proposal process to
ensure the highest financial return.
E. However, in some circumstances the City may determine that use of a property by
the public for recreational, charitable or other nonprofit purpose is preferred and
has considerable public support, in which case the City may determine that non-
financial benefits justify not maximizing revenue from such property. In such
circumstances, the City has a vested interest in ensuring that the lessee of such
property operates the activities conducted on or from the property in the manner
that has been represented to the City throughout the duration of any lease or
contract with the City.
F. 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 converting the property to another use.
2. Redevelopment of the property would require excessive time, resources,
expertise and costs, which would outweigh other financial benefits.
3. Converting the property to another use or changing the operator, manager,
concessionaire, licensee, or lessee of the property would result in excessive
vacancy, relocation or severance costs, real estate commissions, tenant
improvement allowances, expenses or rent concessions 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 or
a clearly preferred use that enjoys substantial support in the community
that might not otherwise be provided were full market value of the
property be required.
2
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F-7
6. The property serves to promote other goals of the City such as affordable
housing, preservation of open space, uses available to the public or marine
related services.
7. If the lessee is not (a) a statewide or national nonprofit organization, or (b)
a public entity or subdivision thereof, then the City finds that the By -Laws
and charter documents of such lessee (i) establishes a procedure wherein
the election of directors of such lessee is accomplished by an open,
democratic and transparent process that allows members to vote, (ii) has a
governance and operational structure that is consistent with best practices
for non-profit public benefit corporations as determined by the City
Council, and (iii) cannot be amended to affect subparts (i) or (ii) without the
prior written consent of the City as lessor.
G. Generally, lengths of licenses, leases, management contracts, concessions, or
similar agreements will be limited to the minimum necessary to meet market
standards or encourage high quality improvements and will contain appropriate
reappraisal and inflation protection provisions. Also, all agreements shall contain
provisions to assure complete audits periodically through their terms.
H. All negotiations regarding the license, lease, management contract, concession or
similar action regarding income property shall be conducted by the City Manager
or his/her designee under the direction of any appropriate City committees.
I. To provide an accurate accounting of actual net revenues generated by the City's
income property, all costs directly attributable or allocable to the management of
a specific income property shall be charged against the gross revenues collected
on that property in the fiscal year the costs are incurred. Costs so chargeable
include, but are not limited to, property repairs and maintenance, property
appraisals, and consultant fees, as authorized by the City Council, City Manager,
or by this Income Property Policy.
J. The City Manager or his/her designee is authorized to sign a license, lease,
management contract, concession, or similar agreement or any amendment
thereto, on behalf of the City. Notwithstanding the foregoing, the City Manager
or his/her designee, or a City Council member, may refer any license, lease,
management contract, concession or similar agreement or any amendment
thereto, to the City Council for its consideration and/or action.
K. The City's portfolio of quality income producing properties adds an element of
diversification to a portfolio otherwise invested primarily in financial assets.
Certain of those income properties are restricted from sale by their terms of grant,
state agency regulations or rules, other federal and state guidelines, private
3
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F-7
covenant or agreement or otherwise. For those properties not so restricted from
sale, an analysis shall be prepared to determine the following prior to such
income producing property being offered for sale:
1. The maximum open market value of the City's interest in the property in
its as is condition.
2. If the property is in an important location, a determination of the possible
future consequences of the City no longer controlling that property.
3. If the current rent is contractually low and significant rent increases are
likely within a finite period.
4. The likelihood of significant increases in the ability of the property to
generate income after the expiration of any current lease of the property.
5. The likelihood of a lease extension being requested by the tenant and the
ability to substantially increase rents or require significant improvements
to enhance the utility and the value of the property as consideration for
granting such an extension.
6. The value of the revenue stream from (i) lease income over the life of an
existing lease and/or (ii) likely lease revenue if an existing lease were to be
renewed or the property re -let to a different tenant; and/or (iii) lease
income from the property if it were to be converted to its highest and best
use, compared with the financial benefits of the use of the proceeds of a sale
and if, considering the totality of the circumstances, such use of the
proceeds of a sale is preferable to retaining the property in question.
Adopted - July 27,1992
Amended - January 24,1994
Amended - February 27,1995
Amended - February 24,1997
Amended - May 26,1998
Amended - August 11, 2009
Amended - May 14, 2013
Amended - February 12, 2019
Formerly F-24
0
12-102
Attachment G
Letter from Newport Aquatic Center, Inc.
12-103
AC
NEWPORT AQUATIC CENTER
CALIFORNIA, USA
August 14, 2023
City Council of Newport Beach,
For more than 30 years, the Newport Aquatic Center, as a 501(c)(3) non-profit public benefit corporation,
has served the people of Newport Beach, Orange County and beyond. The Newport Aquatic Center is known
world-wide for both its traditional and innovative programs. We are very proud to have partnered with the City
of Newport Beach to provide unique and valuable opportunities and services to the public. The Newport Aquatic
Center staff and Board of Directors are community -focused, and committed to providing affordable public access,
quality youth and adult programming, a safe space along with nationally and internationally recognized
competitive rowing, outrigger canoe and dragon boat teams.
Our competitive Junior Rowing and Outrigger teams not only build athletic skills, but they also teach
teamwork, commitment to their goals and time management, while gaining the self-confidence needed by the
next generation of leaders to reach their true potential. Our Junior Rowers have competed successfully in local,
national and international competitions for several decades.
Our adult athletes have also competed successfully in the Olympics over several decades. Many of our
adult athletes have just returned from representing Team USA in the International Dragon Boat Federation World
Championships in Thailand. Many others are currently representing the USA at the World Va'a (outrigger)
Distance Championships in Samoa. Many others regularly compete in local races involving all manner of human
powered watercraft. And many more regularly enjoy these water sports on a recreational basis.
The Newport Aquatic Center's mission is to ensure our participants, programs and competitive teams
(adaptive, youth & adult) have access to human powered watercraft and mentors and coaches who help guide and
support them through life's obstacles and to support and hone their skills to help them reach their own personal
goals — whether the goal is for a sight impaired person to just be comfortable in the boat or one of our elite athletes
competing at the highest level. Many of the Newport Aquatic Center staff are former participants in our programs
and competitive teams and they have the deep understanding of how difficult it can be to find an environment
that is supportive and allows for both personal and physical growth and building self-confidence through the
mastery of various forms of human powered watercraft.
The Newport Aquatic Center serves as a complement to other youth programming, from elementary-,
middle- and high schools in the Newport -Mesa Unified School District and districts throughout the area. By
fostering relationships with both public and private schools including local colleges and universities, and similarly
focused organizations, we are able to best serve Newport Beach's and the county's youth and their families by
providing access to human powered watercraft and the surrounding environs associated with the Upper Newport
Bay.
The impact we bring as an aquatic center, through our partnership with and support from the City of
Newport Beach, is as much your success as it is ours. Through this facility partnership and the extension of our
lease agreement, the Newport Aquatic Center will continue to invest in the facility, the fleet and programming to
benefit Newport Beach and the broader community for decades to come.
949 646 7725 949 646 8398
ONE WHITECLIFFS DRIVE NEWPORT BEACH, CA 92660 12-104
AC
NEWPORT AQUATIC CENTER
CALIFORNIA, USA
In 2016, the Newport Aquatic Center completed a capital campaign and invested over $250,000 into the
renovation of the restrooms and locker facilities, with the plan of kicking off a new fundraising campaign in
conjunction with the lease extension to continue to upgrade and modernize our facilities and our fleet to better
serve our participants and continue to provide our unique public access to the Upper Newport Bay and continue
to provide nationally, and internationally recognized competitive teams.
During the COVID 19 pandemic our staff and coaches, under the guidance of our Executive Director,
stepped up to keep our doors open to not only our participants and competitive teams, but also to the general
public by providing safe outdoor recreational activities and continued access to Newport Harbor via human
powered watercraft. As always, the health and safety of the staff, participants and the public were our priority,
and we were able to maintain our staffing levels and participation rates in spite of the difficult times.
Our unique location on the Upper Newport Bay allows us to offer kayak and stand-up paddle board
programs, providing affordable public access to the Upper Newport Bay. We collaborate regularly with the
Recreation and Senior Services Team of the City of Newport Beach and are truly grateful for our relationship.
As part of our long-term lease renewal process with the City, we have addressed City Council Policy F-7
with City staff. We have reviewed this section with your staff and demonstrated that the Newport Aquatic Center
meets the intent of the parameters of Policy F-7 for a successful partnership and the extension of our lease. We
have provided staff with a summary of our governance and operational structure (attached) showing that the City
can have confidence in our processes for appointing our Board of Directors and operating in the public interest.
We believe our bylaws and processes are consistent with "best practices" for organizations of our type, and ensure
we can continue to provide world -class services to the residents of Newport Beach and beyond, and we can
maintain our reputation as one of the nation's most respected aquatic centers.
Given the original intent when the Newport Aquatic Center was first approved by the voters of Newport
Beach — to serve the community and provide affordable public access to the Upper Newport Bay -- and through
our current and previous lease agreements approved by prior City Councils, we at the Newport Aquatic Center
look forward to continuing to strengthen and serve our community throughout the term of the Lease Renewal that
is presently before you.
We respectfully request the City Council of Newport Beach approve our Lease Renewal which provides
for waiver of Sub -Paragraphs (i) and (iii) of Paragraph F-7 of the City Council Policy F-7, finding that a waiver
is in the best interest of the City and community we serve. We are proud of the incredible impact we have had
on the families of Newport Beach and surrounding communities over several decades through our collaboration
with the City, and we look forward to continuing our work together.
With gratitude,
The Board of Directors of the Newport Aquatic Center
949 646 7725 949 646 8398
ONE WHITECLIFFS DRIVE NEWPORT BEACH, CA 92660 12-105
AC
NEWPORT AQUATIC CENTER
CALIFORNIA, USA
August 14, 2023
Summary of NAC Board Selection and Governance Procedure
The bylaws of the Newport Aquatic Center provide for a self-perpetuating board of directors, as opposed to
a member elected board of directors. We believe that this board selection process is consistent with best practices
for organizations of our type.
The NAC does not have, and never has had, voting members. Membership at the NAC is very inexpensive
compared to organizations, such as Golf and Country Clubs, or Yacht Clubs resident in Newport Beach. An
individual annual membership at the NAC is presently $575, or $48/month. Membership at Golf and Yacht Clubs
typically costs five to six figures, in addition to monthly dues.
Membership at the NAC carries with it no ownership interest in the NAC's assets, and no obligation to
contribute to the maintenance or improvement of the NAC facilities. Often memberships in other organizations,
like Country Clubs and Yacht Clubs, provide for an equity stake in the organization and an obligation to contribute
to the maintenance and improvement of the Club's assets.
Membership at the NAC allows members to use our facilities and equipment, just as members at a
commercial fitness center are allowed to use the facilities and equipment of the fitness center. Members of a
commercial fitness center do not typically vote for the board of directors of the fitness center, nor do they have any
direct say in the management of the fitness center. Similarly, organizations that provide youth sports training and
leagues, like the American Youth Soccer Organization (AYSO), and organizations that provide other youth services,
like the Boys and Girls Club, do not typically provide for the parents of youth participants to elect the people who
run those organizations.
The bylaws of the Newport Aquatic Center provide for it to be governed by a Board of Directors that has
between 8 and 20 directors. The Board establishes the number of directors by resolution from time to time.
Presently, the Board of Directors of the Newport Aquatic Center has eight members and one vacancy due to the
recent unfortunate and untimely death of Jon Van Cleave, one of the founders of the Newport Aquatic Center.
Directors serve three-year terms. Roughly, one-third of the directors' terms expire each year. Directors can serve
multiple terms.
Directors are nominated based on (1) their commitment to the mission of the NAC, (2) their particular
talents and diversity of experience, and (3) their participation in, and familiarity with, the various programs
offered by the NAC. Present Directors have experience in the fields of accounting, law, real estate sales,
development and management, computer science, and veterinary science. Present directors have participated in
rowing, paddling and other programs offered by the NAC. Upon nomination, prospective directors are interviewed
and vetted by each of the present Directors, as well as the Executive Director of the NAC. For the past several
years, each proposed new Director has been approved by the unanimous vote of the existing Directors.
The intent and purpose of the Director selection method set forth in the NAC bylaws is to provide the NAC
with a best practices governance structure designed to provide all persons using the services of the NAC the
assurance that each of the programs existing from time to time that are operated by the NAC are represented on
the Board, and at the same time providing continuity and certainty as to dedication to the Mission Statement and
existence of diversity of views at the governance level.
949 646 7725 949 646 8398
ONE WHITECLIFFS DRIVE NEWPORT BEACH, CA 92660 12-106