HomeMy WebLinkAboutCRYSTAL COVE HISTORIC DISTRICT CONCESSION CONTRACTCRYSTAL COVE HISTORIC
DISTRICT CONCESSION
CONTRACT
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`` CALIFORNIA. STATE PARKS
1• •;�,,. STATE OF CALIFORNIA • THE RESOURCES AGENCY • DEPARTMENT OF PARKS AND RECREATION
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CRYSTAL COVE HISTORIC DISTRICT
CONCESSION CONTRACT
STATE OF CALIFORNIA
THE RESOURCES AGENCY
DEPARTMENT OF PARKS AND RECREATION
PLANNING ACQUISITION & ENVIRONMENTAL DESIGN DIVISION
• Park Planning & Local Assistance. Land Acquisition. Surveying. Graphic Services.
Engineering. Architecture. Landscape Architecture
STATE OF CALIFORNIA
DEPARTMENT OF PARKS AND RECREATION
• CONCESSION CONTRACT
CRYSTAL COVE HISTORIC DISTRICT
Paragraph Page
Recitals....................................................................................................... 1
Definitions.................................................................................................. 3
1. Description of Premises........................................................................ 8
2. Term.................................................................................................... 8
3. Concession Fees................................................................................... 9
4. Use of Premises.................................................................................. 15
5. Development of Premises.................................................................... 20
6. Operation of Premises........................................................................ 36
7. Housekeeping and Maintenance of Premises ....................................... 47
8. Interpretive Center............................................................................. 52
9. Resource Protection............................................................................ 53
10. Rates, Charges, and Quality of Service ................................................ 55
11. Letter of Credit and Bonds.................................................................. 57
12. Hold Harmless Agreement.................................................................. 58
13. Insurance........................................................................................... 61
14. Agent for Service of Process................................................................ 66
15. Right of Entry as Agent....................................................................... 66
67
16. Taxes..................................................................................................
17. Title....................................................................................................68
18. Condition of Premises......................................................................... 70
19. Inspection of Premises........................................................................ 71
20. Termination........................................................................................72
21. Breach of Contract............................................................................. 74
22. Arbitration of Disputes....................................................................... 75
23. State Buy -Out Provision..................................................................... 80
24. Contract Notice.................................................................................. 85
25. Interpretation of Contract................................................................... 86
26. Waiver of Contract Terms................................................................... 86
27. Modification of Contract..................................................................... 87
28. Assignments.......................................................................................88
29. Terms Binding on Successors............................................................. 99
30. Duration of Public Facilities................................................................ 99
31. Time of Essence.................................................................................. 99
32. Eminent Domain................................................................................ 99
33. Conflict of Interest............................................................................ 100
34. Nondiscrimination............................................................................101
35. Paragraph Titles............................................................................... 102
• 36. Contract in Counterparts................................................................. 103
37. Estoppel Certificates......................................................................... 103
Paragraph Page
38. State's District Superintendent......................................................... 103
39. Agreement in Writing........................................................................ 104
40. Approval of Contract......................................................................... 104
41. Approvals......................................................................................... 104
Signatures
Exhibit A - Property Description and Site Plan
Exhibit B - Conceptual Plans
Exhibit C - Plan Approval Procedures
Exhibit D - Gross Receipts Statem Exhibit D - Gross Receipts Stateme
Exhibit E - Crystal Cove Environmental Program
Exhibit F - Interpretation, Education, and Research Monitoring Programs
I STATE OF CALIFORNIA
2 'DEPARTMENT OF PARKS AND RECREATION
3 CONCESSION CONTRACT
4 For
5 CRYSTAL COVE HISTORIC DISTRICT
6 Located in
7 CRYSTAL COVE STATE PARK
8 ORANGE COUNTY
9
to THIS CONTRACT, hereinafter referred to as this "Contract", made
i1 and entered into this 15th day of September 1997, by and between the STATE
12 OF CALIFORNIA, acting through its Department of Parks and Recreation,
13 hereinafter referred to as the "State", and Crystal Cove Preservation Partners,
14 LP, a California limited partnership, hereinafter referred to as "Concessionaire";
"• 15
16 RECITALS
17
18 WHEREAS, Crystal Cove State Park was established for the
19 purpose of making available to the people for their enjoyment the natural,
20 cultural, and recreational values of this significant open space area of the
21 Orange County coast; and
22
23 WHEREAS, the function of the Department of Parks and
24 Recreation (hereinafter referred to as the "Department") at Crystal Cove State
25 Park is to manage, protect, and, where necessary, to restore its natural and
26 cultural resources and values for their perpetuation in accordance with the
• 27 park purpose; to interpret these values effectively; and to provide facilities and
1
services, consistent with the purpose of the park, that are necessary for the full
• 2 enjoyment of the park; and
3
4 WHEREAS, Public Resources Code Sections 5080.02, et seq.
5 authorizes the Department to advertise for, select, and enter into contracts
6 with the "best responsible person" for the construction, maintenance and
7 operation of concession contracts in accordance with such law, and
s
9 WHEREAS, the Department issued and advertised a Request for
10 Proposals for the redevelopment, operation, and maintenance of the Crystal
n Cove Historic District ("RFP") in accordance with the Crystal Cove Legislative
12 Report dated and submitted to the Legislature in April 1994, and
13
t
14 WHEREAS, on December 26, 1995, Crystal Cove Preservation
F
• 15 Partners ("CCPP") submitted its Proposal for the redevelopment, operation, and
16 maintenance of the Crystal Cove Historic District as a "vintage beach Resort"
17 (the "Proposal") in response to the RFP and was selected from among three
1s respondents to the RFP, and
19
20 WHEREAS, Public Resources Code Section 5080.27 authorizes the
21 Department to enter into a concession contract for the development, operation,
22 and maintenance of the Crystal Cove Historic District as a public use facility
23 for a period of up to 60 years, upon those terms and conditions that the
24 Department determines to be in the best interest of the State, and
25
26 WHEREAS, in accordance with statute, the Legislative Report, the
• 27 RFP, and CCPP's Proposal, the Department and CCPP wish to set forth the
2
1 terms and conditions by which the Crystal Cove Historic District will be
• 2 planned, designed, developed, constructed and reconstructed as necessary,
3 and maintained and operated as a "first-class vintage California beach Resort"
4 providing services and a quality similar to that of the Ahwanee, Post Ranch
5 Inn, and the Ventanna Inn as operated as of the Effective Date of this Contract,
6 and
7
8 WHEREAS, it is appropriate that this Contract be entered into to
9 achieve the above stated purposes and to promote the safety and convenience
10 of the general public in the use and enjoyment of, and the enhancement of
11 recreational and educational experiences at, Crystal Cove Historic District
12 within Crystal Cove State Park.
13
a 14 NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND
"• 15 BETWEEN THE PARTIES AS FOLLOWS:
16
17 DEFINITIONS
18
19 Except as otherwise set forth in this Contract, the following
20 defmitions shall govern the administration and interpretation of this Contract:
21
22 1. "Alterations" means Alterations, modifications, or additional
23 improvements to the Premises following the Commencement Date as
24 provided for in Section 5 K.
25
26 2. "Award" means the compensation due Concessionaire in the event of
• 27 condemnation of the Premises as discussed in Section 31.
3
1 3. "Commencement Date" is the date on which the Project opens for
2 business as more fully described in Section 2 and Section 5 H.
3
4 4. "Concession Fees" are the annual fees payable to the State as described
5 in Section 3 as consideration for the rights given Concessionaire under
6 this Contract.
7
s 5. "Concessionaire" means Crystal Cove Preservation Partners, LP, a
9 California limited partnership (also referred to, and used interchangeably
10 with "CCPP").
11
12 6. "Contract Year" means each one-year period of time which commences
13 on January 1 and ends on December 31 throughout the Operating Term
14 of this Contract. In the first Contract Year, the Contract Year shall be a
•15 short year commencing on the Commencement Date and ending on
16 December 31 of such year. In the last Contract Year, the Contract Year
17 shall be a short year commencing on January 1 of such year and ending
1s on the termination date, which shall be the date immediately preceding
19 the 55th anniversary of the Commencement Date or any earlier
20 termination date as otherwise provided for in this Contract.
21
22 7. "Department" or "DPR" means the Department of Parks and Recreation.
23 State and Department may be used interchangeably.
24
25 8. "Development Period" is the period not to exceed five years commencing
26 on the Effective Date and ending on the Commencement Date as more
• 27 fully discussed in Section 2.
0
1 9. "District Superintendent" is the Department's authorized manager in
• 2 charge of the Crystal Cove Historic District and the Department's
3 administrator of this Contract as more fully deemed in Section 37.
4
5 10. The "Effective Date" of this Contract shall be the third day following the
6 date that written notice to Concessionaire is placed in the United States
7 Mail, first-class postage prepaid, notifying Concessionaire that the
s Contract has been fully approved by the Office of the Attorney General
9 and Department of General Services in accordance with PRC
10 Section 5080.17 and that the Irvine Company waives the right of first
11 refusal to enter into a contract substantially similar to this Contract.
12
13 11. "General Plan" is the approved General Plan for Crystal Cove State Park,
14 dated March 1982.
fi•1s
16 12. "General Plan Amendment" is the amendment to the General Plan, which
17 amendment is deemed necessary to authorize development of the
1s Premises in accordance with this Contract.
19
20 13. "Gross Receipts" means all monies or other things of value as more fully
21 described in Section 3 E received by Concessionaire from operation of the
22 Premises.
23
24 14. "Interpretive Center Plan" is the plan for the design and operation of the
25 interpretive center as set forth in Section 8.
26 ---
• 27 ---
5
1 15. "Maintenance Reserve" means regular deposits of money in a separate
2 account for the purpose of funding the replacement of major system,
3 structural, or infrastructure items as set forth in Section 7 D.
fl
s 16. "Minimum Flat Rate" means the minimum annual concession fee as
6 described in Section 3.
7
s 17. "Monthly Gross Receipts Report" means the monthly report of receipts as
9 described in Section 3 a.
10
11 18. "Operating Plan" is Concessionaire's plan for operation of the Crystal
12 Cove Historic District during the Operating Term and more fully
13 described in Section 6 b.
µ �• is
15 19. "Operating Term" is the fifty-five (55) year period following the
16 Commencement Date as more fully described in Section 2.
17
18 20. "Possession Following Termination" means Concessionaire's remaining in
19 possession and operation of the Premises under the terms of this
20 Contract following the end of the Operating Term as more fully described
21 in Section 20 A.
22
23 21. "Premises" are as defined in Section 1.
24
25 22. "Premises Improvements" are all improvements, additions, Alterations, or
26 other facilities placed, created, or developed by Concessionaire in
• 27 accordance with this Contract and more fully described in Section 23 Cl.
L
1 23. Present value of Concessionaire's Possessory Interest is the portion of
2 compensation due Concessionaire upon State's early termination of the
3 Contract as more fully described in Section 23, C, 2.
4
5 24. "Project" means the Premises and all works of improvement,
6 redevelopment, and construction as required by this Contract.
7
8 25. "Project Documents" are this Contract and all exhibits, documents
9 referenced in this Contract or in any exhibits, all amendments, and all
10 other documents prepared, executed, submitted, approved, or otherwise
11 related to this Contract.
12
13 26. "Proposal" means the Proposal submitted by Concessionaire for
14 redevelopment, operation, and maintenance of the Crystal Cove Historic
V J• 15 District in response to the RFP.
16
17 27. "Resort" means the Premises and the Project.
18
19 28. "RFP" means the Request for Proposals for the redevelopment, operation,
20 and maintenance of the Crystal Cove Historic District.
21
22 29. "State" shall mean the State of California or the Department of Parks and
23 Recreation.
24
2s 30. "Unamortized Balance" is the portion of compensation due
26 Concessionaire for the value of the Premises Improvements upon State's
• 27 ---
7
I early termination of the Contract as more fully described in
2 Section 23 C 1.
3
4 1. DESCRIPTION OF PREMISES: The State, pursuant to the
5 authority of and in accordance with Section 5080.02, et seq. of the Public
6 Resources Code of the State of California, and for and in consideration of the
7 agreements hereinafter stated, covenants with Concessionaire for the purposes
8 stated herein, giving Concessionaire the right, privilege, and duty to develop,
s redevelop, construct, equip, operate, and maintain a concession in and upon
10 all that real property known as the Crystal Cove Historic District owned by the
11 State and more fully described in Exhibit "A" (Property Description and Site
12 Plan) attached hereto and hereby made part of this Contract, hereinafter
13 referred to as the 'Premises". The Premises includes two parcels of land with
14 all improvements thereon. Parcel One includes 12.3 acres of land with forty-
• 15 six (46) existing wood framed cottages and various appurtenant structures.
16 Parcel One is listed on the National Register of Historic Places. Parcel Two
17 includes 16.2 acres of land containing a public restroom building, entrance
18 station, paved parking for 425 passenger vehicles, fencing, landscaping, and a
i9 paved pathway leading to a highway undercrossing providing pedestrian access
20 to Parcel One. All that property along Highway 1 adjacent to the Premises
21 commonly known as the Date Shake Shack is specifically excluded from this
22 Contract. Other limitations and exclusions are defined in Exhibit W.
23
24 2. TERM: The term of this Contract shall consist of the Development
25 Period commencing on the Effective Date and the Operating Term which shall
26 be for a period of fifty-five (55) years commencing on the date that the Resort,
• 27 ---
13
_•
1 as defined in Section 5 H, opens for business (the "Commencement Date"), but
2 in no event later than five (5) years following the Effective Date.
3
4 3. CONCESSION FEES: After the Commencement Date,
s Concessionaire shall pay, without demand, in monthly installments, an annual
6 concession fee of the sum of One Hundred Thousand Dollars ($100,000) (the
7 "Minimum Flat Rate") or five percent (5%) of all annual Gross Receipts,
s whichever sum is greater as follows:
9
10 A. Payments
11
12 On the 15th day of the month following the Commencement Date,
13 and on or before the 15th day of each month thereafter during the
14 Term of this Contract, Concessionaire shall furnish to the State
is Park District Superintendent a verified statement, in the form
16 attached as Exhibit "D" or as otherwise acceptable by the
17 Department, of the Gross Receipts of the concession for the
18 preceding month ("Monthly Gross Receipts Report"). The Monthly
19 Gross Receipts Report shall specify the cumulative total of Gross
20 Receipts for the concession through the end of the preceding
21 month for the then current Contract Year. With the submittal of
22
the Monthly Gross Receipts Report, Concessionaire shall pay to the
23
State the percentage fee for the month as prescribed above. If, at
24
the end of any Contract Year, the total percentage of payments
25
made (or due) with respect to that Contract Year are less than the
26
Minimum Fiat Rate, the difference shall be remitted to the State
27
along with the last statement of Gross Receipts for such Contract
6
I
Year. Minimum Flat Rate payments due for the first and last
• 2
Contract Year shall be prorated on a daily basis to reflect the short
3
Contract Years. Payments to the State shall be made to the order
4
of the Department of Parks and Recreation and made at the office
5
of the Park Superintendent, Orange Coast District Office, 3030
6
Avenida del Presidente, San Clemente, California 92672, or at such
7
other location as may from time to time be designated by the State.
8
9 B. Late Payments
10
11 Commencing with the second event that a payment is not made on
12 or before the due date herein provided, Concessionaire shall pay to
13 the State a late administrative charge of ten percent (10%) on said
14 unpaid fee or portion thereof. The parties agree that such charge
15 fairly represents the additional administrative expense to the State
16 arising out of such late payment. Should there be unusual or
17 extenuating circumstances for not paying said fee on or before the
18 due date herein provided, upon written request, the District
19 Superintendent may recommend and the State in its discretion
20 may waive the late charge on the unpaid amount.
21
22 C. Development Period Fees
23
24 During the Development Period, Concessionaire shall pay, within
25 15 days of receiving written demand from State, Development
26 Period fees in the amount of Fifty Thousand Dollars ($50,000) per
• 27 Contract Year. These shall be paid in quarterly installments in
10
I arrears. Development Period fees for the first and last year of the
• 2 devdlopment period shall be prorated as necessary to reflect short
3 years. Any rents collected by the Department from residents of the
a Premises during the Development Period shall be credited toward
5 this annual Development Period fee, with any rents collected by the
6 Department in excess of Fifty Thousand Dollars ($50,000) for any
7 Contract Year to be applied to the next Contract Year's
8 Development Period fee. In no event shall this rent credit be
9 applied to Concession Fees beginning and during the Operating
10 Period.
it
12 D. Books and Records
13
14
Concessionaire shall keep separate and true and accurate books
15
and records, maintained in accordance with generally accepted
16
accounting principles, that show all of Concessionaire's business
17
transactions on the Premises, and the State shall have the right,
18
not more than two (2) times per year, through its representative,
19
with reasonable advance notice to Concessionaire, in accordance
20
with Public Resources Code Section 5080.18 (c), perform such
21
audits as it deems necessary and to examine such books and
22
records including all tax return records; and Concessionaire
23
hereby agrees that all such records and books shall be available to
24
the State. Notwithstanding the above, however, should
25
Concessionaire be found to have failed to maintain the Concession
26
operating and financial records accurately and in accordance with
• 27
this Contract and accepted standards in the accounting and hotel
11
I industry, Department shall have the right, at any time during
2 normal business hours, with reasonable notice, to examine
s Concessionaire's books and records.
a
5
Additionally, Concessionaire will submit to the State no later than
6
May 1st each year during the term of this Contract, a financial
7
statement pertaining to concession operations. Such statement
s
shall be prepared by a Certified Public Accountant licensed by the
9
State of California in accordance with generally accepted
10
accounting principals. The financial statement shall be submitted
11
to the State for its review in a format reasonably acceptable to the
12
State, and shall contain an appropriate certification from
13
Concessionaire that all Gross Receipts during the yearly
to
accounting period covered by said statement shall have been duly
15
and properly reported to the State. Concessionaire shall bear the
16
full cost for the preparation of the annual financial statement. In
17
addition, the State shall have the right, not more than two
18
(2) times a year., with reasonable advance notice through its
19
representative, to examine all working papers supporting
20
Concessionaire's annual financial statement submitted to the
21
State. Except for reports of Gross Receipts, such financial
22
statements shall not be deemed to be the property of the State and
23
shall be maintained as confidential information to the full extent of
24
the law during such review and returned to Concessionaire upon
25
completion of such review.
26 ---
• 27 ---
12
1 Upon expiration or in the event this Contract is terminated, a
2 statement of Gross Receipts for the period of operation not
3 previously reported, prepared in the manner stated above, together
4 with all unpaid and owing Concession Fees shall be submitted by
s Concessionaire to the State within forty-five (45) days after this
6 Contract is terminated.
7
s The State further reserves the right to examine all such books and
9 records, not more than two (2) times per year, with reasonable
10 advance notice during the three (3)-year period following the
11 termination of this Contract.
12
13 Concessionaire agrees that as part of Concessionaire's record
14 keeping activity, Concessionaire shall at Concessionaire's own cost
15 and expense install and maintain such hotel computer equipment
16 and/or other systems complying with generally accepted
17 accounting principals and industry standards and controls
18 approved by the State, which approval shall not be unreasonably
19 withheld. Such computer equipment shall contain, at a minimum,
20 but not be limited to, a financial reporting system with appropriate
21 backup capability and which insures the security, accuracy, and
22 completeness of the information maintained.
23
24 In accordance with Public Resources Code Section 5080.18 (b),
25 copies of all sales and use tax returns and reports submitted by
26 Concessionaire to the California State Board of Equalization, the
• 27 Employment Development Department, the Franchise Tax Board,
13
1
or any other governmental agency, shall be submitted to the
• 2
Department concurrently with any other reports required by this
3
Section to be submitted.
4
s
E. Gross Receipts
6
7
The term "Gross Receipts" whenever used in this Contract, is
8
intended to and shall mean all monies, property, or any other thing
9
of value received by Concessionaire through the operation of the
10
Resort to be constructed by Concessionaire pursuant to the
11
Development Plan (the "Resort") or from any other business carried
12
on or upon the Premises, or any portion thereof, or from any other
13
use of the Premises or any portion thereof, without any deduction
14
or deductions; it being understood, however, that the term "Gross
"� 1s
Receipts" shall not include tips received, interest income, or any
16
sales taxes imposed by any governmental entity and collected by
17
Concessionaire, or any interpretive center receipts collected for
is
goods, services, or programs which might normally be offered at a
19
State -operated interpretive center on a non-profit basis. Such
20
exempt goods, services, or programs shall be described by the
21
State and Concessionaire in the Operating Plan. True and
22
accurate records of all such receipts shall be kept for said exempt
23
goods, services, or programs. All funds received from exempt
24
goods, services, or programs shall be available only for
25
expenditures to defer the cost of providing such exempt goods,
26
services, or programs.
• 27
14
I F. Abatement
2
3 In the event Concessionaire is prevented from carrying on the
4 operations contemplated herein by reason of an Act of God, or
5 other reasons beyond Concessionaire's control, and when
6 requested in writing by Concessionaire, and when so determined
7 by the State, then the fees prescribed herein shall be abated in
s proportion to any reduction in Gross Receipts, based on the
9 average Gross Receipts for the six months preceding the time
10 operations ceased for such period of non -operation except to the
11 extent of any applicable rental interruption or other insurance
12 proceeds.
13
14 4. USE OF PREMISES:
15
16 A. Intent
17
1s In accordance with the approved General Plan for Crystal
19 Cove State Park (the "General Plan"), as amended (the
20 "General Plan Amendment"), the Premises shall be used by
21 Concessionaire to construct the Resort which Resort will
22 provide first-class accommodations to the general public.
23 The Resort shall be designed as a "vintage California beach
24 Resort", as will be specifically described in the Development
25 Plan.
26 ---
. 27 ---
15
I
Of prime importance to the State under this Contract is
• 2
Concessionaire's obligation to fully cooperate with the State
3
in a joint mission to operate the Premises in a manner that
4
would provide a high -quality visitor experience while
5
preserving historic resource values and integrating natural
6
and cultural education into the services and facilities
7
provided. The parties hereto desire the manner of operation
s
to promote the unique character and spirit of Crystal Cove
9
as an early 20th century California beach colony or enclave.
10
In conformance with this intent, Exhibit "E" (Crystal Cove
11
Environmental Program), and Exhibit'IF* (Interpretation
12
Education and Research/Monitoring Programs) are attached
13
hereto and hereby made a part of this Contract as they may
14
be modified by Concessionaire and DPR from time to time.
• 15
16
Use of the Resort facilities described under (1) below shall be
17
reserved for overnight guests of the Resort, with public
18
access to such facilities to be restricted as Concessionaire
19
deems reasonably appropriate to its operations, such
20
restrictions to be further discussed in the Operating Plan.
21
Resort guests shall receive priority M' the hotel facilities that
22
are open to the general public, such as, but not limited to,
23
the restaurant.
24
25 Concessionaire shall not use or permit the Premises to be
26 used in whole or in part during the term of this Contract for
• 27 ---
16
I
any purpose other than as set forth herein, without the prior
•
2
consent of the State.
3
4
B. Concession Services and Facilities
5
6
Subject to all required approvals not yet had or obtained,
7
Concessionaire, at its own cost and expense, shall construct,
s
reconstruct,restore, operate, and maintain the Resort for the
9
following specific uses:
10
11
(1) General Resort hotel purposes including:
12
a. Overnight rental of individual cottages;
13
14
b. Vehicular access, parking, and shuttle services;
15
16
C. A full -service restaurant;
17
is
d. Swimming and beach -oriented activities;
19
20
e. Reception and administrative functions;
21
22
f. A fitness center;
23
24
g. Maintenance and housekeeping functions; and
25
26
h. Functions such as weddings, receptions, etc.
• 27
17
1
(2) General recreational purposes including:
• 2
3
a. A cultural/natural interpretive center;
a
5
b. A vehicular turnaround area, and parking for
6
disabled persons at the beach;
7
8
C. A dive facility to assist the public in enjoying
9
marine resources adjacent to the Premises;
10
11
d. A pedestrian access way from the Los Trancos
12
parking lot to, and use of the beach; and
13
14
e. Two public restrooms--one near the beach and
15
one in the Los Trancos parking lot.
16
17
L Vehicular access, entrance station, and parking
18
for a minimum of 225 vehicles at the Los
19
Trancos parking lot.
20
21
g. Maintenance of an existing bicycle trail through
22
the premises.
23
24
(3) Optional purposes at the discretion of the
25
Concessionaire:
26 ---
• 27
I a. Snack bar (to the extent consistent with Date
• 2 Shake contract dated May 31, 1990 as amended
3 in September 1995, as to the snack bar).
4
s C. Compliance with Laws, Regulations, and State Policies:
6 Concessionaire agrees at all times during the term of this
7 Contract:
s
9 (1) To operate the Premises in an orderly, quiet and lawful
10 manner, and to operate the Resort at first-class
11 standards; and
12
13 (2) To operate, maintain, construct, reconstruct, and/or
14 restore the Premises and the Resort in a clean,
1s wholesome and sanitary condition, and in compliance
16 with all applicable laws, general rules, or regulations
17 of any governmental authority now or at any time
18 during the term of this Contract in force relating to
19
sanitation or public health, safety, taxes, licenses,
20
employment and financial and/or business practices;
21
and (3) to obey faithfully and comply with all
22
applicable laws, rules, and regulations adopted by
23
Federal, State, or other governmental bodies or
24
departments or offices thereof. This Contract is
25
expressly subject to the regulations and policies of the
26
California State Park and Recreation Commission and
• 27 the Director of the Department that have been
19
I provided to Concessionaire for its review. In the event
• 2 of conflict between Concessionaire's operating policies
3 and such regulations of the Department, the latter
4 shall prevail.
5
6 The signing of this Contract by Concessionaire shall,
7 in itself, constitute and acknowledge that
8 Concessionaire wholeheartedly supports the policies
9 and programs of the Department regarding the
10 development, protection, preservation, interpretation,
11 operation, and maintenance of the Crystal Cove
12 Historic District within Crystal Cove State Park, as
13 such policies and programs have to date been
14 described in the public record.
15
16 S. DEVELOPMENT OF PREMISES:
17
is A. Intent
19
20
It is the intent of this Contract that rehabilitation of the
21
Premises into a first-class vintage California beach Resort be
22
accomplished in such a manner that the current listing of
23
the District on the National Register of Historic Places will be
24
maintained. To accomplish this, Concessionaire agrees to
25
develop the Premises in accordance with the Secretary of the
26
Interior's Standards for Rehabilitation and Government
• 27 Code, Section 5024.
20
I
Further, it is the intent that all improvements contemplated
• 2
herein, subject to changes made as a result of required
3
reviews, be in conformance with the General Plan for Crystal
4
Cove State Park, as amended, and as contemplated in the
5
Request for Proposals (RFP) for Crystal Cove Historic
6
District, and in conformance with the "Crystal Cove
7
Environmental Program", Exhibit "E" attached hereto and
s
hereby made a part of this Contract.
9
10 B. Description of Improvements
11
12
Based upon the conceptual plans developed in response to
13
the RFP, Exhibit-B attached hereto and hereby made a part
14
of this contract, and to the extent subsequent changes to
15
said plans are made as a normal course of the development
16
process, providing such changes are either in conformance
17
with the provisions of this Contract or approved by DPR, and
18
depending on the number of total units approved,
19
Concessionaire agrees at its own cost and expense to
20
construct, reconstruct, restore, or cause to be constructed,
21
reconstructed, or restored, the improvements shown on the
22
conceptual plans and as contemplated below:
23
24 (1) Rehabilitate approximately thirty-nine (39) existing
25 cottages including, where appropriate, kitchen
26 facilities.
• 27 ---
21
1
(2)
Remove approximately seven (7) existing cottages.
•
2
3
(3)
Construct approximately fourteen (14) new cottage
4
type structures.
5
6
(4)
Remove approximately ten (10) garages and
7
miscellaneous storage structures.
s
9
(5)
Install all new utilities.
10
11
(6)
Construct all new roads and parking for up to 150
12
cars.
13
14
(7)
Construct a new reception/administration building.
15
16
(8)
A new restaurant (plus counter and lounge seating)
17
will be constructed. Additionally, the restaurant will
18
have conference, and private party capability.
19
20
(9)
Construct a fitness center as an addition to an existing
21
cottage.
22
23
(10)
Up to three (3) swimming pools will be installed.
24
25
(11)
A public -use environmental, educational interpretive
26
center may be constructed in the Los Trancos parking
.
27
lot area.
22
1 (12) Construct an additional public -use environmental
40 2 educational interpretive center within the Crystal Cove
3 Historic District.
4
5 (13) Other construction will include site lighting, drainage
6 and erosion control, landscaping, a beach front
7 boardwalk, a public pedestrian walkway system,
8 restroom, and other necessary work.
9
10 (14) Additional improvements as necessary to protect
11 existing structures. Installation of seawalls and
12 geotechnicai stabilization as needed.
13
14 C. Development Process and Required Products
_• 15
16 After the Effective Date of this Contract, Concessionaire shall
17 (may, in its sole discretion, after execution of the Contract
is but prior to the Effective Date) proceed with planning,
19 design, construction, reconstruction, and restoration of all
20 concession improvements in the following manner:
21
22 (1) Site evaluations, as necessary, shall be prepared by
23 Concessionaire sufficient to proceed with schematic
24 plans.
25
26 (2) Early consultation with the Coastal Commission, the
• 27 State Historic Preservation Officer, and other
23
I
applicable regulatory agencies shall be jointly
• 2
accomplished by Concessionaire's and Department's
3
designated project managers.
4
5
(3)
Schematic designs shall be prepared by
6
Concessionaire and submitted to the Department.
7
8
(4)
A General Plan Amendment shall be initiated by the
9
Department.
10
11
A draft development plan, a draft interpretive plan,
12
and a draft Operating Plan shall be prepared by
13
Concessionaire for inclusion in the General Plan
14
Amendment.
• 15
16
(6)
CEQA compliance information and analysis shall be
17
prepared by the Department for the General Plan
18
Amendment.
19
20
(7)
State Park and Recreation Commission hearing and
21
final approval of the General Plan Amendment shall be
22
scheduled by the Department.
23
24
(8)
Concessionaire shall, in accordance with the approved
25
General Plan Amendment proceed with Project design
26
development.
is
27
24
1 (9), All necessary entitlements to construct the Project
• 2 shall be obtained by Concessionaire, including a
3 project EIR.
4
5 (10) A final development plan, a final interpretive plan, and
6 a final Operating Plan shall be prepared by
7 Concessionaire and approved by the Department.
a
9 (11) Construction documents shall be prepared by
10 Concessionaire.
11
12 (12) Proof of construction financing to be submitted to the
13 Department by Concessionaire.
14
"• 15 (13) Concessionaire to notify Department of need to occupy
16 Premises and Department to vacate existing tenants.
17
is (14) Concessionaire to enter into construction contract.
19
20 (15) Construction to proceed to completion by
21 Concessionaire.
22
23 (16) Notice of Completion to be filed by Concessionaire and
24 to be accepted by the Department.
25
26 (17) Concessionaire to begin operation of the Resort.
• 27 ---
25
1 D. General Plan Amendment
• 2
3 The Resort shall be planned, designed, and constructed in
4 conformance with a General Plan Amendment for Crystal
5 Cove State Park, which amendment shall be prepared by the
6 Department's staff, reviewed and approved by
7 Concessionaire, and submitted to the State Park and
8 Recreation Commission for its approval approximately nine
9 (9) months after the execution of this Contract.
10
11
E. Entitlements
12
13
At its sole cost and expense, including all fees and mitigation
14
costs, Concessionaire shall prepare a Project EIR and obtain
15
all licenses, permits, and other approvals necessary for the
16
construction of all improvements. The State shall cooperate
17
with Concessionaire with respect to securing Project EIR and
18
all such licenses, permits, and approvals, including
19
executing any applications or other documentation required
20
by any governmental authority to be initiated by Parks with
21
power to approve the Project. In the event that all
22
appropriate approvals cannot be secured within thirty-six
23
(36) months from the Effective Date of this Contract,
24
Concessionaire if having exercised all due diligence in
25
applying for and seeking all approvals shall have the option
26
to terminate this Contract. In the event of termination
• 27
pursuant to this paragraph, the Department shall release
O
1 any bond, letter of credit, or guaranty issued to the State,
• 2 and shall have the right to accept new Proposals to develop
3 Premises.
a
5 F. Use of Consultants
6
7
Concessionaire shall utilize the services of an architect or
s
consultant to provide full service including schematics,
9
design development, working drawings, contract documents
10
as required, specifications, construction inspection, all in
it
accordance with AIA standards, and with specialized
12
experience in the restoration of historic structures and
13
application of the Secretary of the Interior's Guidelines and
14
Standards for Rehabilitation. Concessionaire shall retain a
15
general contractor who shall either be experienced or trained
16
with respect to historic properties and will provide, or cause
17
to be provided, sufficient oversight of contractors and/or
18
workers employed on the Project to insure proper compliance
19
with historic preservation standards and implementation of
20
construction plans as approved in accordance with such
21
standards. Concessionaire agrees to select architects,
22
engineers, or contractors who are fully licensed to practice in
23
the State of California and are acceptable to representatives
24
of the Planning, Acquisition and Environmental Design
25
Division of the Department. However, in no event shall the
26
Department be deemed to have control of or be responsible
• 27
for Concessionaire's final hiring decisions or the day-to-day
27
1
management of the Project or administration of contracts
• 2
with Concessionaire's architects, engineers, or contractors.
3
Copies of the Contract between Concessionaire's architect
4
and contractor, and inspection reports shall be furnished to
5
and reviewed as to scope by the State. Upon completion of
6
construction, the construction shall be certified by an
7
architect or engineer to be in substantial compliance in
s
accordance with the original plans and specifications and all
9
applicable building or other laws, codes, or regulations
10
applicable to the Project.
11
12
G. Submittals
13
14 All drawings, specifications, and estimates shall be
15 submitted to the Planning, Acquisition and Environmental
16 Design Division of the Department in accordance with the
17
Plan Approval Procedure marked Exhibit "C" attached hereto
18
and hereby made a part of this Contract. All approvals by
19
the Department as provided for in this section shall be solely
20
for the purpose of determining the scope and quality of the
21
work proposed and that it is in conformance with the
22
minimum standards and policies and objectives of the
23
Department as set forth in this Contract. Such approvals
24
shall specifically include Government Code, Section 5024
25
and the Secretary of the Interior's Guidelines and Standards
26
for Rehabilitation. Compliance with the Americans With
• 27 Disabilities Act, the State Fire Marshal, seismic safety, and
K
I
public health reviews shall be the responsibility of
• 2
Concessionaire. The Department shall not unreasonably
3
withhold or delay its approval, and in all events shall
4
withhold its approval only if the proposed plans and
5
specifications do not comply with the terms and conditions
6
of this Contract. The Department shall respond to any such
7
proposed plans and specifications submitted in writing
s
within thirty (30) days after receipt thereof, either approving
s
them or stating specific objections thereto. The
to
Department's failure to respond within such thirty (30)-day
11
period shall be deemed to constitute approval of the
12
submittal. Once approvals have been given, any material
13
changes shall be submitted in writing to the Department.
14
The Department shall respond to Concessionaire within ten
15
(10) days after receipt thereof, either approving the same or
16
stating any specific objections thereto. The Department's
17
failure to respond in writing within such ten (10)-day period
is
shall be deemed to constitute approval of the applicable
19
change. The State shall not unreasonably withhold such
20
approvals.
21
22 In no event shall approval or right to approval be deemed to
23 instill in the Department a right to control or oversee the
24 administration and management of the work.
25 Concessionaire or its contractors, employees,
26 representatives, or agents shall in no way be relieved of their
0
27 respective responsibilities and duties to perform and
1 complete the work (1) in accordance with generally accepted
• 2 industry standards, (2) faithfully adhering to the approved
s plans, specifications, and drawings, and (3) in accordance
a with all applicable codes, laws, regulations, or other
5 requirements, including but not limited to, the standards
6 contained in this Contract pertaining to the work.
7
s H. Completion of Improvements
9
10 After receipt of the approvals required in "G" above and upon
11 receipt of all necessary licenses, permits, and approvals and
12 construction financing on terms satisfactory to
13 Concessionaire, Concessionaire shall commence
14
construction of the Project and prosecute the same to
15
completion with all due diligence within the time frame set
16
forth in the development plan subject to material
17
modifications which must be approved by the State and
is
provided that such time frame shall be extended as
19
reasonably necessary in the event of delays caused by fire,
20
earthquake, wars, strikes, or other calamity beyond
21
Concessionaire's control, including but not limited to, delays
22
in acquiring required permits and approvals from the
23
appropriate agencies, where such delays are not attributable
24
to Concessionaire's lack of diligence, error, omission, or
25
negligence. Concessionaire shall hold monthly or more
26
frequent status meetings throughout the period of
•
27
construction. Said status meetings shall include
30
I
representatives of the general contractor, subcontractors
• 2
deemed appropriate by Concessionaire, a representative of
3
Concessionaire, and a representative of the Department.
4
Upon completion of the Project, or an approved stage thereof,
5
Concessionaire shall (1) file a Notice of Completion of
6
Construction with the Department; (2) provide to the
7
Department a complete set of "as -built" plans for all
8
improvements in a format reasonably acceptable to the
9
Department; (3) submit evidence that all improvements are
10
clear of any mechanic's liens; and (4) submit a verified
11
accounting of the cost of all improvements. When
12
Concessionaire has received written acceptance from the
13
Department of their Notice of Completion, subject to other
14 provisions of this Contract, Concessionaire shall have the
15 right to commence operation of the Resort.
16
17 I. Equipment and Furnishings
18
19 Of prime importance under this Contract is that the Resort
20 be a complete fully equipped and furnished, "turn -key"
21 concession operation and that it remain in a first-class
22 condition throughout the term of this Contract. To this end,
23 prior to opening for business, Concessionaire shall submit a
24 complete inventory of all equipment and furnishings to the
25 Department. An updated inventory shall be submitted to the
26 Department from time to time, but not less frequently than
• 27 once a year.
31
_ I
Concessionaire, at Concessionaire's own cost and expense,
. 2
shall maintain all equipment and furnishings in good
3
condition and periodically replace worn items with items of
4
equal or greater value, quality, and utility. As part of the
5
Operating Plan, Concessionaire shall prepare for
6
Department's review and approval a Replacement Plan
7
indicating the replacement schedule for all structural
s
operating systems and equipment and furnishings. At no
9
time and in no event shall the Department be obligated to
10
make repairs or supply any new equipment, furnishings, or
11
supplies or to replace existing equipment, furnishings, or
12
supplies.
13
14 J. Personal Property
15
16 Concessionaire may wish to provide certain equipment and
17 furnishing for use in the operation of the Resort which are
18 non -essential to maintaining the Resort in a "turn -key"
19 condition. An inventory of this personal property shall be
20 submitted to the State and updated from time to time, but
21 not less frequently than once every ten (10) years.
22
23 K. Future Alterations and Additions
24
25 Following the completion of the Project and the opening of
26 the Resort, Concessionaire shall have the right to make
• 27 Alterations and additional improvements in, on, or to the
32
I Premises (collectively, "Alterations") during the term of this
• 2 Contract. Any Alterations not in conformance with the
3 General Plan or an approved amendment thereof, or which
4 materially affect the Premises, including roads, parking, and
5 landscaped areas, will require the Department's prior written
6 approval, which approval shall not be unreasonably
7 withheld. An alteration shall be deemed to "materially affect"
8 the Premises if it changes the size and/or quality of the
9 feature, or changes the type of material or planting used for
10 such feature.
it
12 Prior to the construction of any such proposed Alterations
13 needing the Department's consent, Concessionaire will
14 provide to the Department detailed plans and specifications
i
15 in accordance with Paragraph "F" and "G" above and proceed
16 with completion of such proposed Alterations in accordance
17 with Paragraph "H" above.
18
19 L. Termination of Tenant Leases
20
21 Within one hundred and twenty (120) days from receipt of
22 written notification, containing verification that all
23 construction plans and specifications, contracts, financing,
24 and necessary permits have been obtained for
25 commencement of construction, from Concessionaire that it
26 requires exclusive possession of the Premises, the State
27 agrees, at its sole cost and expense, to terminate the tenant
33
I
leases on the Premises. Concessionaire may not request
• 2
staged or partial termination of leases but shall request
3
termination of all leases. The State agrees to take all steps
4
necessary, including initiating eviction proceedings, to
s
deliver the Premises.vacant and unoccupied, and free and
6
clear of any and all claims to occupancy or leasehold rights
7
of any present or former tenant of the Premises or any part
s
thereof. Further, the State covenants that, should
9
Concessionaire incur any costs and expenses as a result of
10
the failure of the Department to meet its obligations to
11
terminate all tenant leases and deliver the Premises
12
unoccupied, the State shall fully reimburse Concessionaire
13
for such costs and expenses as are directly and actually
14
incurred by Concessionaire including, but not limited to:
". 15
(1) the removal of tenants or their personal possessions from
16
the Premises, (2) actions, legal or otherwise, by tenants to
17
enjoin their removal, (3) interest expense from extending the
18
term of a construction loan, (4) for construction delays as
19
evidenced by change orders on contracts in place, and
20
(5) hard and soft development costs actually incurred
21
including, without limitation, accrual of any priority
22
investment return payable to investors on invested capital,
23
interest payable on accrued fees, additional legal fees,
24
architectural fees, design fees, construction standby fees, or
25
any other fees incurred as a consequence of such delay.
26
State shall also abate Development Period Fees proportionate
27
to any delays in removal of tenants by State. In no event
•
34
I shall Concessionaire be entitled to reimbursement of
• 2 speculative or consequential damages including, without
3 limitation, lost revenues or profits. Concessionaire shall
4 assume no liability or responsibility for the Premises prior to
5 the removal of all tenants by State and written acceptance of
6 the Premises. Until such time that tenants vacate the
7 Premises, tenants shall remain tenants of the State. Upon
8 removal of all tenants, Concessionaire shall assume
9 complete responsibility for the Premises in accordance with
10 this Contract, and the State shall have only such further
11 liability for the control, operation, or maintenance of, or
12 other responsibilities for the Premises as are specifically
13 provided herein.
14
a
15 M. Access During Tenant Occupancy
16
17
Prior to the termination of all tenant leases, the Department
18
agrees to allow Concessionaire and its agents reasonable
19
access to the Premises for the purpose of conducting testing
20
and/or inspections. Concessionaire's representative shall
21
provide seventy-two (72) hours prior notification to the unit
22
ranger of the need for such access, stating the purpose, time,
23
and duration of the requested access. The indemnification
24
provisions of this Contract shall apply to this prior right of
25
entry to the extent of liability arising directly from
26
Concessionaire's or its agents' negligence.
. 27 ---
35
1 6. OPERATION OF PREMISES:
2 .
s A. Intent
4
5 It is the exclusive responsibility of the Concessionaire, at no
6 cost to the State, to operate the Premises as a "Vintage
7 California Beach Resort" for the entire operating term of this
s Contract. It is the responsibility of the Department, within
9 reason, to ensure that Concessionaire exercises its
to responsibility under this Contract consistent with the
11 Department's mission to preserve and protect the
12 outstanding cultural and natural resources of the Premises,
13 and to provide a high -quality recreational experience for the
14 visiting public.
15
16 B. Operating Plan
17
is After the execution of this Contract but prior to the
19 expiration of the Development Period, Concessionaire shall
20 develop the Operating Plan for the concession operation of
21 the Crystal Cove Historic District (the "Operating Plan"). The
22 Operating Plan shall cover policies for such items as: days
23 and hours of operation, guest services, property
24 management (including safety programs, security and
25 emergency procedures), interpretive center programs, hotel
26 management (including fees and room rates, marketing and
. 27 advertising, and reservations), employment (including
36
I
employee benefits), complaint review process, and other
•
2
appropriate areas of operational concern.
3
4
The State shall have the right to review the Operating Plan
5
(1) to ensure that it is consistent with the goals and
6
purposes of the California State Park System, Crystal Cove
7
State Park as described in the General Plan, as amended, for
s
Crystal Cove State Park, in any other documents or
9
pronouncements of the Department of which Concessionaire
10
has actual notice, either through dissemination by the
11
Department or otherwise, and (2) to coordinate any
12
responsibilities on the part of the State contemplated within
13
the Operating Plan with the State's own staffing and
1
14
15
operational plans. The State shall otherwise have no rights
of approval or control over Concessionaire's Operating Plans
16
and policies or day-to-day management of the Resort. The
17
Operating Plan shall be updated and revised as necessary
18
and submitted on each anniversary date of the Contract Year
19
for the Department's approval, which shall not be
20
unreasonably withheld.
21
22 C. Operating Schedule
23
24 Concessionaire shall provide services 24 hours a day,
25 365 days a year to fully accommodate the public from the
26 Commencement Date throughout the Operating Term of this
0 27 Contract. Notwithstanding the foregoing, Concessionaire
37
I
may close the Resort each year for a period or periods
• 2
totaling not more than fourteen (14) days for purposes of
3
conducting routine maintenance and repairs and for such
4
longer periods as may reasonably be necessary, and
5
approved in the Operating Plan, during the Operating Term
6
to make major renovations as and when needed or as and
7
when necessitated by natural disasters. In the event of an
s
emergency, extraordinary adverse weather, or other
9
operating conditions threatening the health and safety of
10
guests, the public, Concessionaire's employees, or other
11
persons, the Concessionaire's on site manager or other
12
designated representative may permit the concession to close
13
at any time during the Operating Term of this Contract after
14
first notifying Department's District Superintendent or other
`� 15
person designated by the District Superintendent.
16
17
D. Utilities and Services
1s
19
Concessionaire shall be responsible for the installation and
20
provision of all utilities and infrastructure necessary to and
21
used in connection with the concession facilities identified
22
on Exhibit "A" attached hereto. When installing facilities, no
23
trees shall be trimmed or cut or any habitat disturbed
24
without permission of the District Superintendent.
25
Concessionaire shall be responsible for the payment of all
26
utility charges and any necessary connection fees, including
• 27 furnishing all necessary refuse and garbage containers and
913
1
removal and disposal of all rubbish, refuse, and garbage
• 2
resulting from the operation of the Resort. All such rubbish,
3
refuse, and garbage removed shall be disposed of outside the
4
park unit and in accordance with applicable laws and local
5
ordinances. All trash containers and/or trash bins shall be
6
adequately screened to the satisfaction of the District
7
Superintendent. For the purpose of this paragraph, sewage
s
disposal shall be construed as a utility.
9
10
(1) Solid Waste Management Recycle Program
11
12
Concessionaire shall develop a formal program to
13
reduce, reuse, and recycle solid waste materials at the
14
Historic District. To this end, Concessionaire shall
15
actively work to reduce the amount of trash and waste
16
generated, to acquire products with consideration
17
given to the ability to reuse or recycle the product and
18
its packaging, and to recycle all recyclable products. A
19
container deposit program or some other approach
20
that minimizes such trash and assures recycling shall
21
be implemented.
22
23
(2) Energy and Water Conservation Practices
24
25 Concessionaire shall develop and implement sound
26 practices of energy and water conservation pursuant
• 27 to daily operations and in the design, construction,
39
I and/or maintenance of new and rehabilitated facilities
• 2 within the Crystal Cove Historic District.
3
a E. Hazardous Substances
f;
6 No goods, merchandise, or material shall be kept, stored, or
7 sold in or on the Premises which are in any way explosive or
s hazardous and no dangerous trade, business, or occupation
9 shall be carried on therein or thereon, and nothing shall be
to done on the Premises, other than as is provided for in this
11 Contract. Gasoline and oils and all other materials
12 considered under law or otherwise to be hazardous to health
13 and safety shall be stored, handled, and dispensed as
14 required by present or future regulations and laws.
`� 15
16 Concessionaire agrees to comply with all laws, either
17 Federal, State, or local, existing during the term of this
18
Contract pertaining to the use, storage, transportation, and
19
disposal of any hazardous substance as that term is defined
20
in such applicable law. In the event the State or any of its
21
affiliates, successors, principals, employees, or agents
22
should incur any liability, cost of expense, including
23
attorney's fees and costs, as a result of Concessionaire's
24
illegal use, storage, transportation, or disposal of any
25
hazardous substance, including any petroleum derivative,
26
Concessionaire shall protect, indemnify, defend, and hold
• 27 harmless any of these individuals against such liability.
HO
1
Where Concessionaire is found to be in breach of this
• 2
provision due to the issuance of a government order
3
directing Concessionaire to cease and desist any illegal
4
action in connection with a hazardous substance, or to
5
remediate a contaminated condition directly caused by
6
Concessionaire or any person acting under Concessionaire's
7
direct control and authority, Concessionaire shall be
8
responsible for all costs and expenses of complying with
9
such order including any and all expenses imposed on or
10
incurred by the State in connection with or response to such
11
government order. Notwithstanding the foregoing in the
12
event a government order is issued naming Concessionaire
13
or Concessionaire incurs any liability, during or after the
14
term of the Contract, in connection with contamination
15
which preexisted or postdated Concessionaire's obligations
16
and occupancy under this Contract or which were not
17
directly caused by Concessionaire, the State shall be solely
18
responsible as between Concessionaire and the State for all
19
expenses and efforts in connection therewith and State shall
20
reimburse Concessionaire for all reasonable expenses
21
actually incurred by Concessionaire therewith. As to any
22
loss of operations due to contamination which was not
23
directly caused by Concessionaire, and for which no
24
insurance proceeds accrue, Concession Fees shall be abated
25
proportionately to the period of such loss of operations.
26 ---
• 27 ---
41
I
All pest control activities, chemical and non -chemical, shall
is 2
be approved by the Department prior to action by
3
Concessionaire. Concessionaire, or the pest control
4
business acting on behalf of Concessionaire, must submit a
5
Pest Management Recommendation and Control Report,
6
Form DPR 191 (or equivalent), to the District Superintendent
7
for approval. The State has fourteen (14) days to approve or
s
deny the request. Such approval shall be solely for
9
compliance with the Department's policies and in no way
10
shall relieve Concessionaire or its contractors, employees,
11
agents, or representatives from compliance with all laws and
12
regulations concerning such activities and from carrying out
13
the work in a workmanlike manner.
5 14
15 Concessionaire, or the pest control business acting on behalf
16 of Concessionaire must submit a report of completed work
17 for each pest management action to the District
is Superintendent no later than seven (7) days after
19 performance of the work. The report may be submitted on a
20 Form DPR 191 (or equivalent information).
21
22 F. Employee Training and Housing
23
24 All concession employees are to receive an orientation on the
25 State Park System, the park unit in which the concession is
26 located, and local points of interest which will be sufficient to
• 27 permit such employees to reply adequately to inquiries from
42
1 the visiting public. Training shall also include information
2 which wili sensitize all employees to the environmental and
3 historic values of the unit. This training will include job or
4 task -specific training necessary to ensure job performance in
5 a manner consistent with the protection and preservation of
6 historic or environmentally sensitive elements of the Crystal
7 Cove State Park unit. The content of the employee
8 orientation program shall be contained in the Operating Plan
9 required hereunder.
10
11 Employee housing within Crystal Cove Historic District may
12 be authorized under justifiable circumstances. Such use
13 shall be addressed in the Operating Plan pursuant to
14 subsection B of this Section 6.
is
16 G. Alcoholic Beverages
17
i8 Subject to pending approval by the State Park and
19 Recreation Commission and all laws of the State of California
20 relating to and regulating such activity, Concessionaire is
21 authorized to sell beer, wine and distilled spirits for in hotel
22 room consumption and on -Premises consumption, but only
23 where food service is provided.
24
25 The sale or provision of alcoholic beverages for off -Premises
26 consumption is expressly prohibited.
27 ---
u
W
1
The sale of alcoholic beverages shall be subject to the
•
2
regulations established by the Department of Alcoholic
3
Beverage Control. Concessionaire covenants to make any
a
license obtained by Concessionaire or its manager for the
5
sale of alcoholic beverages available and assignable to any
6
subsequent Concessionaire or its manager or operator for
7
the Premises provided that such transfer is consistent with
s
the requirements of the Department of Alcohol and Beverage
9
Control.
10
11
Advertising of the sale of alcoholic beverages by any means
12
shall not be permitted either on the exterior or the interior of
13
the concession facilities other than within the restaurant
14
Premises, in areas where meals are commonly provided or in
15
the hotel rooms.
16
17 H. Signs, Advertising, and Approval of Name
18
19 No signs, names, placards, or advertising matter shall be
20 circulated or published, or inscribed, painted, or affixed
21 upon the Premises without prior written consent of State,
22 which consent shall not be unreasonably withheld.
23
24 Concessionaire's promotion and advertising shall clearly
25 describe the public/private relationship between
26 Concessionaire and California State Parks, and identify
. 27 ---
M
1
Crystal Cove as a historic district with clearly noted public
is
2
use facilities.
3
4
I. Photography
5
6
Subject to the Motion Picture, Television, and Commercial
7
Industries Act of 1984, commencing with Section 14998 of
8
the California Government Code (the "Act°), as applicable
9
Concessionaire shall have the right to grant permits to
10
persons or corporations engaged in the production of still
11
and motion pictures and related activities for the use of the
12
Premises for such purposes, provided such permission shall
13
not unduly interfere with operation of the Resort in
14
Concessionaire's judgment. Prior to granting any permit
a15
under this paragraph, Concessionaire shall notify the
16
District Superintendent in order to accommodate any
17
operational concerns of the District or Park. Concessionaire
1a
shall, as a condition of any permit for filming on the
19
Premises, require the permittee to reimburse the Department
20
for the Department's costs of staffing and administering the
21
permit, including, but not limited to, such items as law
22
enforcement, crowd and traffic control, any rescue or first
23
aid rendered, maintenance and clean-up, or any other costs
24
and expenses arising out of the filming activity that is the
25
subject of the permit. Except for such costs, all revenues,
26
income, and consideration received by or payable to
•
27
Concessionaire in connection with such productions shall be
45
I part of its "Gross Receipts". Concessionaire shall be
• 2 responsible for compliance with the Act.
3
4 J. Compliance with Laws, Regulations, and State Policies
5
6
Concessionaire agrees at all times during the term of this
7
Contract: (1) to operate the Premises in an orderly, quiet,
8
and lawful manner, and to operate the Resort at first-class
9
standards; (2) to operate, maintain, construct, reconstruct,
10
and/or restore the Premises in a wholesome and sanitary
11
condition, and in compliance with all applicable laws,
12
general rules or regulations of any governmental authority
13
now or at any time during the term of this Contract in force
14
relating to sanitation or public health, safety, taxes, licenses,
15
employment and financial and/or business practices; and
16
(3) to obey faithfully and comply with all applicable laws,
17
rules and regulations adopted by Federal, State, or other
18
governmental bodies or departments or offices thereof. This
19
Contract is expressly subject to the regulation's and policies
20
of the California State Park and Recreation Commission and
21
the Director of the Department that have been provided to
22
Concessionaire for its review. In the event of conflict
23
between Concessionaire's operating policies and such
24
regulations of the Department, the latter shall prevail.
25
26 The signing of this Contract by Concessionaire shall, in itself
• 27 constitute and acknowledge that Concessionaire
HI
1 wholeheartedly supports the policies and programs of the
• 2 Department regarding the development, protection,
3 preservation, interpretation, and operation, and
4 maintenance of the Crystal Cove Historic District within
5 Crystal Cove State Park, as such policies and programs have
6 to date been described in the public record.
7
8 7. HOUSEKEEPING AND MAINTENANCE OF PREMISES:
9
10 A. Intent/ General
11
12
In regard to maintenance and housekeeping, Concessionaire
13
expressly agrees at all times during the term of this
14
Contract, at Concessionaire's own cost and.expense, to
15
maintain and operate the Premises in a clean, safe,
16
wholesome, and sanitary condition free of trash, garbage, or
17
obstructions of any kind and in compliance with any and all
1s
present and future laws, general rules, or regulations of any
19
governmental authority now, or at any time during the term
20
of this Contract, in force relating to sanitation or public
21
health, safety, or welfare; and Concessionaire shall at all
22
times faithfully obey and comply with all laws, rules, and
23
regulations applicable thereto, adopted by Federal, State, or
24
other governmental bodies or departments or officers thereof.
25
This Contract is expressly subject to regulations and policies
26
of the State Park and Recreation Commission and the
• 27
Director of the Department as the same have been published
47
I in the public record or otherwise made known to
• 2 Concessionaire by Department. Concessionaire shall remedy
3 without delay any defective, dangerous, or unsanitary
4 conditions, and shall use reasonable efforts to ensure that
5 members of the public enjoying the use of the Premises do
6 not engage in activities that conflict with its historic values.
7
s B. Housekeeping
9
10
Housekeeping activities are defined as all those activities
11
concerned with keeping facilities clean, neat, and orderly,
12
and includes, but is not limited to, raking, sweeping,
13
vacuuming, mopping, stripping, waxing, dusting, wiping,
14
washing, hosing, and other general cleaning of interior and
15
exterior floors, walls, ceilings, doors, windows, facility
16
fixtures, and all adjacent grounds, walk, and roads.
17
18
Concessionaire shall perform its housekeeping obligations at
19
the standard appropriate to the operation of a first-class
20
Resort. In the event that the State finds that
21
Concessionaire's housekeeping fails to conform to these
22
standards or standards set forth in the State's Facility
23
Maintenance Program for the Premises, the State shall
24
specify its objections in writing to Concessionaire, and
25
Concessionaire shall make reasonable efforts to correct the
26
housekeeping deficiencies.
• 27 ---
U]
I C. Maintenance
• 2
3 The term maintenance, for the purposes of this Contract, is
4 defined as all repair and preservation work, including
5 structural and equipment repairs, replacement, or periodic
6 upgrades, necessary to maintain the Resort facilities in a
7 good state of repair, as well as to preserve them for their
8 intended purpose for an optimum useful life and maintain
9 the concession in a "turn -key" operating condition.
10
11 Concessionaire acknowledges that a portion of the Premises
12 as set forth in Exhibit "A" is listed in the National Register of
13 Historic Places (NRHP), and that such status mandates
14 special consideration in the care and maintenance of the
15 resources so designated. Concessionaire further
16 acknowledges that the natural landscape, including
17 vegetation are an integral part of the historic fabric of the
18 District. No material alteration or modification to the
19 vegetation, earth -moving activities, or alteration or
20 introduction of hardscape elements shall be made except in
21 conformance with all applicable laws, regulations, policies,
22 and procedures and following the written approval of the
23 Department as provided for in Paragraph 5 L of this
24 Contract.
25
26 Concessionaire agrees to maintain any and all concession
• 27 facilities- of the Premises in good order and repair at
m
I
Concessionaire's own cost and expense during the entire
• 2
term of this Contract, at the standard appropriate for the
3
operation of a first-class Resort. In the event that the State
4
fords that Concessionaire's maintenance, either structural or
5
landscape, fails to conform to these standards or the
6
standards set forth in the State's Facility Maintenance
7
Program for the Premises, the State shall specify its
8
objections in writing to Concessionaire, and Concessionaire
9
shall make reasonable efforts to improve its maintenance. If
10
the State is not satisfied with Concessionaire's response to
11
the State's objections, then the State shall have the right to
12
declare the Contract in default, provide thirty (30) days
13
written notice to cure, and if not cured in that time, or a
14
reasonable time thereafter, terminate the Contract, or at its
15
sole discretion, perform such maintenance or repairs for
16
Concessionaire, provided however, that the State shall first
17
give Concessionaire ten (10) days written notice of its
18
intention to perform such maintenance or repairs for
19
Concessionaire for the purpose of enabling Concessionaire to
20
proceed with such maintenance or repairs at
21
Concessionaire's own expense. The State shall not be
22
obligated to make any repairs to or maintain any
23
improvements on the Premises. Concessionaire hereby
24
expressly waives the right to make repairs at the expense of
25
the State and the benefit of the provisions of Sections 1941
26
and 1942 of the Civil Code of the State of California relating
• 27
thereto if any there be.
50
I
D. Replacement Reserve
•
2
3
Concessionaire shall maintain a capital maintenance
4
replacement reserve ("Maintenance Reserve") in amounts
5
necessary for the periodic replacement, upgrade, or other
6
maintenance of major system, structural, or infrastructure
7
items as follows: roofs, heating, and air-conditioning
s
systems, and utilities and roads which are expected to live
9
their useful life and require replacement during the
10
Operating Term. A plan for the Maintenance Reserve shall
11
be prepared and included in the Operating Plan reviewed
12
and approved annually. The amount set forth in the
13
Operating Plan shall be amortized over the useful expected
14
life of the facilities involved and annual installments
15
deposited in a separate, interest -bearing account, in trust, in
16
a banking or other financial institution acceptable to both
17
parties. Payments from the trust shall be made only upon
18
order of Concessionaire, with approval by the District
19
Superintendent or his or her designee or successor
20
representative. Nothing herein shall prevent using the
21
Maintenance Reserve for other, unanticipated maintenance
22
or repair items so long as Concessionaire is able to
23
demonstrate that such funds would be replaced within a
24
reasonable time in order to preserve the intent of the
25
Maintenance Reserve. Excess funds in the Maintenance
26
Reserve shall be returned to the Concessionaire, except that
•
27
on termination of the Contract, the Maintenance Reserve
51
�1
u
1 shall become the property of the Department as to all items
2 remaining in the Operating Plan to be completed.
3
4 8.
5
6
II
INTERPRETIVE CENTER:
A. Intent
8 A prime consideration to State under this Contract is that
9 the natural and cultural history of Crystal Cove State Park
10 be presented and interpreted for the education and
11 enjoyment of the visiting public. To this end, Concessionaire
12 shall, at its own cost and expense (except for voluntary
13 contributions of funds or services approved by the
14 Department), provide and maintain an interpretive center on
15 the Premises.
16
17 B. Interpretive Center Plan
18
19
The design and scope of all interpretive center facilityand
20
programs shall be based upon Concessionaire's interpretive
21
program development plan to be developed by
22
Concessionaire after execution of this Contract (the
23
"Interpretive Center Plan"), subject to the State's approval,
24
which shall not be unreasonably withheld. Said plan shall
25
be substantially in conformance with Exhibit "P attached
26
hereto and hereby made a part of this Contract as modified
27
from time to time by Concessionaire and DPR.
52
1 C. Staffmg
• 2
3 Concessionaire further agrees to retain a qualified resource
4 ecologist, historian, or other similar appropriate professional,
5 and/or marine biologist to assist in the development and
6 administration of the interpretive center's educational
7 programs. Other staffing requirements shall also be
a included in the Interpretive Center Plan.
9
to D. District Approval
11
12 Concessionaire's plans for the development of any
13 interpretive programs and facilities on the Premises in
14 addition to the interpretive center shall also be submitted to
15 the District Superintendent for review and approval, which
16 shall not be unreasonably withheld. The Operating Plan
17 shall cover operating policies relating to the interpretive
1s center.
19
20 9. RESOURCE PROTECTION: The Crystal Cove Historic District
21 contains significant natural, cultural, and historic resources. As a result,
22 Concessionaire must be familiar with and comply with all applicable Federal
23 and State statutes and regulations in its management of natural, cultural, and
24 historic resources within Crystal Cove State Park and the Department's
25 Resource Management Directives. These statutes include, but are not
26 necessarily limited to, Public Resources Code Sections 5021.1, 5024, 5024.5,
. 27 5028; Public Resources Code Section 21000, et seq.; California Environmental
53
1 Quality Act; the California Coastal Act of 1976 (Section 30000 of the Public
• 2 Resources Code)', and the Secretary of the Interior's Guidelines for Historic
3 Preservation. Except for day-to-day maintenance and repairs, which do not
4 affect or change the scope, quality, or historic fabric of the Premises and
5 facilities, Concessionaire shall coordinate all environmental and preservation
6 compliance through the District Superintendent and shall not commence any
7 Project, program, construction, or surface -disturbing activity which will affect
s natural, cultural, or historic resources without first obtaining written consent
9 from the District Superintendent.
10
11
Of prime importance under this Contract is the requirement to
12
balance the dual objectives of providing a quality recreational experience for
13
the park visitor and protecting the historically significant cultural environment
14
that makes Crystal Cove unique. To this end, Concessionaire, in cooperation
15
with the State, shall develop, operate, and maintain the Premises and all
16
facilities and services thereon in a manner fully consistent with the policies
17
and guidelines as are set forth in the General Plan for Crystal Cove State Park,
18
as the same may be amended by the General Plan Amendment.
19
20 To help accomplish the above stated goals and to help further the
21 State's mission to protect the environment in general, Concessionaire is
22 expected to promote waste management -practices and environmental
23 awareness which will lead to preservation of the resources of the State. To this
24 end, Concessionaire shall design and implement a recycling program with the
25 aim of reducing any environmental impacts that result from Historic District
26 activities. This program shall be outlined in the Operating Plan.
• 27 ---
54
I Concessionaire agrees, whenever reasonable, to eliminate the use
• 2 of non -returnable containers, plastics, etc., in items or utensils sold, used, or
3 dispensed by Concessionaire. The State reserves the right to prohibit the sale
4 or use of non -recyclable containers or plastics. No styrofoam cups or other
5 non -biodegradable cups are to be used or sold by Concessionaire.
6
7 10. RATES CHARGES, AND OUALITY OF SERVICE: It is the intent
a of the State under this Contract to provide the general public with the
9 opportunity to enjoy a unique first-class resort experience at rates comparable
10 to those privately -owned "first-class" resort accommodations which provide
11 comparable quality, services and programs as are provided at such resorts as
12 the Ahwanee, Post Ranch Inn or Ventanna Inn as of the date hereof. The high
13 level of quality, services, and programs offered to guests is of prime concern to
14 the State and is considered a part of the consideration for this Contract.
15 Therefore, Concessionaire agrees to maintain first-class standards of operating
16 and managing the Resort, in a manner comparable to other first-class
17 environmentally sensitive resort hotels providing similar quality facilities,
18 services, and programs as the Ahwanee, Post Ranch Inn, and the Ventanna Inn
19 during the entire term of this Contract.
20
21 The State acknowledges its confidence in Concessionaire's
22 judgment and experience regarding service and other operating standards in
23 the hospitality industry. The State further acknowledges that, due to the high
24 quality and the unique nature of the Resort's facilities and services, as well as
25 the prime Southern California beachfront location, room rates and all other
26 prices and charges will be set by Concessionaire at market rates for such first-
• 27 class resort accommodations, subject to Department's review and approval as
55
i
provided for in this Contract. Not more than ninety (90) percent of the rooms
• 2
shall have room rates established by the Concessionaire at market rates
s
commensurate with such services and facilities and to provide a rate of return
a
on capital invested in the hotel industry for similar facilities to develop and
5
operate the concession. However, in order to make the facilities more
6
affordable to some, the Concessionaire will provide at least ten percent (10%) of
7
its rooms at an affordable rate to be proposed by Concessionaire and reviewed
s
and approved by State, provided that such room rate shall not be more than
9
fifty percent (50%) of Concessionaire's Average Daily Rate. Such lower rate
io
may be adjusted annually to reflect cost increases of providing the services.
ii
Concessionaire shall include in the Operating Plan required by Section 613, its
12
plan whereby rooms at such lower rates shall be made known and provided to
is
prospective customers. Such lower rates shall remain in effect until new rates
is
are proposed by Concessionaire and approved by State.
15
16 The State shall have the right to confer with Concessionaire once a
17 year, or as needed as a result of complaints to the Department or if rates
18 change during the Contract Year, regarding its schedule of prices and rates for
i9 accommodations, goods sold, or services rendered or performed upon the
20 Premises, including schedules of prices in the restaurant or other food -serving
21 facilities of the Resort, if the State feels that any price or prices are
22 unreasonable or inappropriate for the services rendered, the item sold or
23 rented, or the portion served. Concessionaire shall take the State's concerns
24 under consideration, and shall make such adjustments as are reasonable and
25 in keeping with industry standards for like facilities as required by this
26 Contract, including rates of return on invested capital as described herein
• 27 above.
56
1 The State further reserves the right to object to the sale or rental of
• 2 any item, accommodation, or service which it deems improper or of inferior
s quality, and Concessionaire shall take the State's objections under
4 consideration and make reasonable adjustments as requested.
5
6 Concessionaire acknowledges the importance to the quality of
7 service at the Resort of the selection, training, and supervision of its employees.
s Concessionaire's hiring and employment policies and practices shall not,
9 however, provided the same are lawful, be subject to the State's control.
10 Concessionaire agrees that a manager with decision -making authority
11 sufficient to handle emergencies and to coordinate the Resort's response
12 thereto with State and local agencies shall be on the Premises twenty-four
13 (24) hours each day the Resort is in operation.
14
• 15 11. LETTER OF CREDIT AND BONDS: Concessionaire, at
16 Concessionaire's own cost and expense, shall furnish the State as follows:
17
is A. Contract - Letter of Credit or Guaranty
19
20 With the exception of any construction contemplated under
21 this Contract, to ensure faithful performance by
22 Concessionaire of all the covenants, terms, and conditions of
23 this Contract inclusive of, but not limited to, the payment of
24 all fees and other charges, if any, Concessionaire shall
25 furnish the State a letter of credit or a guaranty, in a form
26 acceptable to the State, in the sum of One Hundred
• 27 Thousand Dollars ($100,000).
57
I
B. Construction - Letter of Credit
• 2
3
Prior to the commencement of any construction
a
contemplated hereunder, Concessionaire shall furnish to the
5
State a letter of credit, completion bond, or other guarantee
6
acceptable to State in the amount sufficient for performance
7
of the construction contemplated, guaranteeing completion
8
of the work in the event of default, breach, or other non-
9
performance of Concessionaire or any of its contractors and
10
guaranteeing the payment for all materials, provisions,
11
provender, supplies, and equipment used in, upon, for, or
12
about the performance of said construction work or labor
13
done thereon of any kind whatsoever. Concessionaire shall
14
use its best efforts to prevent the filing of any mechanic's lien
15
on the work or the Premises and, in the event a mechanic's
16
or other lien is filed on the Premises, shall take all steps
17
necessary at its own expense to remove, or bond over any
18
such liens and, hereby agrees to protect, hold harmless,
19
indemnify, and defend State from and against any and all
20
form of claims, costs, or liability on such mechanic's liens or
21
in connection with the work.
22
23 12. HOLD HARMLESS AGREEMENT: Concessionaire hereby waives
24 all claims and recourse against the State, including the right to contribution for
25 loss or damage to persons or property arising from, growing out of, or in any
26 way connected with or incident to this agreement, except claims arising from
• 27 breach of this agreement by the State or the negligent acts of the State (and to
M.
1 the extent of, the concurrent or sole negligence of the State, its officers, agents,
• 2 or employees), o" other wrongful acts for which the State is solely responsible.
3
4 Concessionaire shall protect, indemnify, hold harmless, and defend
5 State, its officers, agents, and employees against any and all claims, demands,
6 damages, costs, expenses, or liability arising out of the development,
7 construction, operation, or maintenance of the property described herein,
a except for liability arising out of, and to the extent of, the State's breach of this
9 agreement, the concurrent or sole negligence of the State, its officers, agents, or
10 employees, or other wrongful acts for which the State is solely responsible.
11
12 In the event State is named as a defendant in any claim or legal action
13 arising out of the development, construction, operation, or maintenance of the
14 property described herein, upon tender of the claim or action by State to
15 Concessionaire, Concessionaire shall assume State's defense and represent
16 State in such legal action at Concessionaire's expense, subject to the provisions
17 herein.
18
19 In lieu of tender to Concessionaire of the claim or action against
20 State, State may elect to represent itself in such legal action, in which event,
21 State shall bear its own litigation costs, expenses, and attorney's fees.
22 Notwithstanding the foregoing, in the event State is required to represent itself
23 because of a conflict of interest by counsel representing Concessionaire,
24 Concessionaire, on demand by State, shall reimburse State for State's litigation
25 costs, expenses, and attorney's fees. Costs shall include, without limitation, all
26 attorney's fees and costs, court costs, if any, costs of mediators or arbitrators,
• 27 ---
59
1 experts and consultants, and any other costs reasonably incurred in response
• 2 to any claim.
3
4 In the event State is found to be concurrently negligent with
s Concessionaire by a court of competent jurisdiction for loss or damage to
6 persons or property arising from, growing out of, or in any way connected with
7 or incident to this agreement, State and Concessionaire shall cooperate and
s use their best efforts in seeking and obtaining an apportionment of liability
9 from the court, and neither party shall request a jury apportionment. This
10 provision is intended as a complete and voluntary waiver of any right to jury
11 apportionment.
12
13 In the event State is found to have breached this agreement or to
14 be concurrently or solely negligent or to have been solely responsible for any
15 other wrongful act, for which liability to another is determined by a court of
16 competent jurisdiction for loss or damage to persons or property arising from,
17 growing out of, or in any way connected with or incident to this agreement,
is State shall bear its own litigation costs, expenses, and attorney's fees.
19
20 If Concessionaire has paid for any costs which are the
21 responsibility of State under this section, State shall reimburse Concessionaire
22 and at State's request, in its sole discretion, any reimbursement required shall
23 take the form of a credit against the Concession Fees or other monies due State
24 under this agreement.
25 ---
26 ---
• 27 ---
i(
1 13. INSURANCE•
• 2 .
3 A. Liability Insurance
4
5 Concessionaire shall provide before entering the Premises,
6 but effective upon Concessionaire's taking possession of the
7 Premises, and shall maintain in force during the term of this
8
Contract public liability insurance in an amount not less
9
than Two Million Dollars ($2,000,000) combined single limit
10
per occurrence for bodily injury and property damages
11
combined. Concessionaire shall obtain and provide the
12
following additional coverage at the same minimum limits as
13
required for public liability insurance as set forth above
14
unless other limits are specified below:
15
16
Products Liability
17
Liquor Legal Liability
18
Automotive Liability - to cover all owned, non-
19
owned, and hired vehicles.
20
Workers Compensation - State requirements.
21
22 The policy or policies of liability insurance shall contain the
23 following endorsement:
24
25 (1) State of California, its officers, employees, and
26 servants are included as additional named insureds
• 27 but only insofar as operations under this Contract are
61
I concerned and specifically without the obligation to
• 2 make premium payments;
3
4 (2) The insurer will not cancel or reduce the insured's
5 coverage without thirty (30) days prior written notice to
6 State.
7
a
No cancellation provision in any insurance policy shall be
9
construed in derogation of the continuous duty of
10
Concessionaire to furnish insurance during the term of this
11
Contract. Said policy or policies shall be underwritten to the
12
reasonable satisfaction of the State. A signed and complete
13
certificate of insurance, with all endorsements, originally
14
executed by the insurer, shall be submitted to the State at or
` 15
prior to such time as the Resort opens for business. A
16
certified copy of the original policy and, at least thirty (30)
17
days prior to the expiration of any such policy, a certificate of
is
insurance, together with all endorsements, originally
19
executed by the insurer, shall be submitted to the State.
20
21
B. Fire and Property Insurance
22
23
Concessionaire shall, in the event of damage or destruction
24
to the Resort, repair or replace those buildings, structures,
25
equipment, furnishings, betterments and improvements,
26
supplies, materials and merchandise which existed prior to
• 27
Concessionaire entering the Premises, as the same may be
62
1
altered or reconstructed by Concessionaire pursuant to this
• 2
Contract, or which may be added or provided by
3
Concessionaire or the State subsequent to Concessionaire's
4
occupancy, and as reasonably determined by the State to be
5
necessary to the satisfactory discharge of Concessionaire's
6
obligations under this Contract. Concessionaire shall use its
7
best efforts to rebuild or replace facilities destroyed to the
8
level which preceded the destruction, but nothing herein
9
shall require exact restoration so long as such restoration or
10
reconstruction is consistent with the historic nature of the
11
property and any approvals by State in this regard shall not
12
be unreasonably withheld. Concessionaire shall, for this
13
purpose, obtain and maintain in full force commencing with
14
Concessionaire's taking possession of the Premises and
15
thereafter during the entire term of this Contract, fire and
16
extended insurance with extended coverage endorsements
17
thereon, for full replacement cost or value of all buildings,
18
improvements and their contents, whether provided by the
19
State or constructed or brought upon the Premises by
20
Concessionaire. Said coverage(s) shall be in such amounts
21
as are necessary for the full replacement of all facilities,
22
equipment, furnishings, and other supplies necessary for
23
operation of the concession during the term of this Contract.
24
Replacement values will be at least every three (3) years or
25
more frequently, if there is substantial increase in value.
26
Additionally, Concessionaire shall purchase the following
• 27
property- coverage in amounts reasonably necessary for
63
I protection of the parties economic interests and replacement
• 2 necessary for continued operation of the concession
s acceptable to the State:
a
5 Boiler and Machinery
6 Sprinkler Leakage
7 Personal Property
8 Business Income/Loss of Rents
9 Builders' Risk
10 Extension -of -Coverage -Endorsement
11
12
Said policy(ies) shall contain a replacement cost
13
endorsement naming the Concessionaire as the insured,
14
provided however, that if there is a Secured Lender (as such
15
term is defined in Section 27 A below), the proceeds of any
16
such policy or policies may be made payable to such Secured
17
Lender. If the proceeds are payable to Concessionaire only,
18
the policy shall contain the following loss payee
19
endorsements:
20
21
(1) Payments made under this policy shall be made to
22
Concessionaire and State as co -payees and shall be
23
used to repair, rebuild, restore, or replace the Premises
24
and to replace equipment, furnishings, and other
25
property hereunder at Concessionaire's direction, and
26
if not so used, such payments shall be made first to
• 27
any Secured Lender in accordance with the security
M1
I instruments securing such Secured Lender's interest
• 2 in the Premises and/or this Contract, with the balance
3 thereof, if any, to the State. The proceeds of any such
q insurance payable to the State shall be used for
5 rebuilding or repair as necessary to restore the
6 Premises and at the discretion of State.
7
8 (2) The insurer will not cancel or reduce the insured's
9 coverage without thirty (30) days prior written notice to
10 State.
11
12
(3) A fully executed copy of the policy or policies of
13
insurance with all endorsements shall be submitted to
14
the State prior to the commencement of operation of
15
the Resort. At least thirty (30) days prior to the
16
expiration of any such policy, a certificate of
17
insurance, together with an originally executed copy of
18
all endorsements required by this paragraph, showing
19
that such insurance coverage has been renewed, shall
20
be filed with the State.
21
22 In the event of damage or destruction to the Resort which impairs
23 operations to the extent that Gross Receipts are reduced and there are no
24 insurance proceeds in compensation for such loss, the fees payable by
25 Concessionaire shall be abated from and after the date of damage or
26 destruction until completion of the repair and restoration, in proportion to the
• 27 amount by which Gross Receipts are reduced by reason of such damage as
65
1
measured against the average Gross Receipts for the immediately preceding six
• 2
(6)-month period.
3
4
14. AGENT FOR SERVICE OF PROCESS: It is expressly agreed and
5
understood that, upon execution of this Contract, Concessionaire shall file with
6
State a designation of a natural person residing in the State of California,
7
giving said person's name, residence, and business address, as
s
Concessionaire's agent for the purpose of service of process in any court action
9
between Concessionaire and the State arising out of or based upon this
10
Contract, and the delivery to such agent of a copy of any process in any such
11
action shall constitute valid service upon such Concessionaire; and it is further
12
expressly agreed, covenanted, and stipulated that if for any reason service of
13
such process upon such agent is not possible, then in such event
14
Concessionaire may be personally served with such process and that such
is
service shall constitute valid service upon such Concessionaire; and it is
16
further expressly agreed that Concessionaire will accept the process so served,
17
submits to the jurisdiction of the court so acquired, and waives any and all
is
objection and protest thereto.
19
20 15. RIGHT OF ENTRY AS AGENT: If this Contract is terminated by
21 the State, or if Concessionaire abandons or vacates the Premises for a period
22 exceeding one (1) week, the State may enter upon the Premises. The Premises
23 shall not be deemed abandoned or vacated during periods the Resort is closed
24 due to repairs, remodel, Acts of God, or other reasons beyond Concessionaire's
25 control. To such end, Concessionaire hereby irrevocably appoints the State as
26 Concessionaire's agent to remove any and all persons or personal property on
0
27 said Premises and place any such property in storage for the account of and at
1 the expense of Concessionaire. In the case of Concessionaire abandoning the
• 2 Premises, in lieu of declaring a forfeiture, the State may enter into such other
3 contracts for operation of the concession upon such terms as it may deem
a proper, and if a sufficient sum shall not be realized thereby, after paying
5 leasing expenses, to satisfy the fees and other sums herein agreed to be paid by
6 Concessionaire, such fees and expenses shall be paid by Concessionaire.
7 Concessionaire agrees to save the State harmless from any loss or damage or
s claim arising out of the action of the State in pursuance of this paragraph.
9
10 16. TAXES: This Contract creates a possessory interest in public
ii property that may be taxable. In the event that such possessory interest is
12 taxed, Concessionaire agrees to be subject to the payment of and to pay all
13 possessory interest taxes levied on such interest. Concessionaire agrees to pay
h 14 the above and all other lawful taxes, assessments, or charges which at any
15 time may be levied by the State, County, City, or any tax or assessment levying
16 body upon any interest in this Contract, or any other right which
17 Concessionaire may have in or to the Premises covered hereby, or the
18 improvements thereon by reason of Concessionaire's use or occupancy thereof,
19 or otherwise, as well as all taxes, assessments, and charges on goods,
20 merchandise, fixtures, appliances, equipment, and property owned by
21 Concessionaire in or about the Premises.
22
23 Concessionaire shall comply with all laws, regulations, and
24 ordinances regarding the collection of taxes due a local government agency.
25
26 Nothing in this paragraph shall be construed to require
• 27 Concessionaire to pay taxes or levies which it would not otherwise be obligated
67
1 to pay or to prohibit Concessionaire from protesting the imposition of any such
• 2 taxes or levies m" accordance with provisions at law or otherwise.
3
a 17. TITLE: Concessionaire hereby acknowledges the title of the State
s in and to the Premises, and covenants and agrees not to assail, contest, or
6 resist said title. Title to all property, whether in fee as to all real property, or
7 otherwise as to all other property, personal or otherwise including, without
s limitation, the name Crystal Cove, Crystal Cove Historic District, Crystal Cove
9 State Park, or any variation of them, remains in the State, subject to the
10 possessory interest granted herein or a license hereby granted to use any
11 names, logos, writings, or other intellectual property as approved by the State
12 which is the property of the State during the term of this agreement. The
13 interest in all property, real or personal, acquired or constructed by
14 Concessionaire by reason of this Contract, except as otherwise expressly set
15 forth in this Contract, is a possessory interest only and is subject to the terms
16 of this Contract.
17
18 All existing real property improvements to be restored and/or
19 reconstructed by Concessionaire in accordance with this Contract, all new
20 improvements to be constructed by Concessionaire hereunder, and any
21 Alterations which may be made, shall be and remain the property of the State
22 and shall remain upon and be surrendered with the Premises at the expiration
23 of the term or sooner termination of this Contract. No sums whatsoever shall
24 be paid by State to Concessionaire or any other person upon expiration of the
25 term of this Contract, except as otherwise required by this Contract, including
26 Section 23.
• 27 ---
.:
I The possessory interest herein given to Concessionaire is non-
2 exclusive and shall not be construed so as to exclude the general public from
3 the Premises; however, any use by the general public will be limited by the
a terms and conditions of this Contract and as will be further described in
5 Concessionaire's Operating Plan in accordance with the terms of this Contract.
6 This Contract is not intended to confer third party beneficiary status to any
7 member of the public or other party who is or may be benefited by the terms of
8 this Contract. Notwithstanding the non-exclusive nature of the possessory
9 interest held by Concessionaire in the concession's facilities under this
10 agreement, Department agrees to not authorize any uses at the Premises which
11 would reasonably be deemed to constitute a competitive service, activity,
12 program, or merchandising activity. Any uses, events, or activities (excepting
13 emergency services or responses), which the State takes under consideration to
14 authorize for the Premises, shall be submitted for Concessionaire's approval,
i
1s which approval shall not be unreasonably withheld so long as such use, event,
16 or activity does not interfere or compete with the operation of the Premises by
17 Concessionaire. In the event that State or Concessionaire is requested to
18 provide access or space for activities that are protected as free speech by, or
19 any other provision of, the State or United States Constitution, State and
20 Concessionaire shall work cooperatively to provide such access in accordance
21 with reasonable time, place, and manner constraints as provided for at law.
22
23 This possessory interest is subject to all valid and existing
24 contracts, leases, licenses, encumbrances, and claims of title which may affect
25 the Premises, as shown on a current preliminary title report with respect to the
26 Premises issued by a title company acceptable to Concessionaire at
• 27 Concessionaire's expense, and which Concessionaire has accepted in writing.
••
i Concessionaire shall have thirty (30) days following the Effective Date of this
• 2 Contract to notify Department in writing of any unacceptable conditions of title.
s Department shall have thirty (30) days after such notice to clear such
a unacceptable conditions, or notify Concessionaire that the unacceptable
s conditions cannot or will not be cleared. If the unacceptable conditions are not
6 cleared, Concessionaire shall have the option, at its election, to terminate this
7 Contract or accept the Contract and the unacceptable conditions as is.
8
9 18. CONDITION OF PREMISES: The taking of possession of the
io Premises by Concessionaire shall, in itself, constitute acknowledgment that the
ii Premises are in a condition acceptable to Concessionaire. Concessionaire
12 acknowledges that it has performed, or has caused to be performed, all studies,
19 inspections, investigations, or other inquiries that Concessionaire reasonably
14 believes necessary concerning the condition of the Premises, including
15 structural and geological conditions, and its suitability for the purposes
16 intended by this Contract. Further, Concessionaire acknowledges that it is
17 entering into this Contract based on its own investigations and that
18 Department and its employees or representatives have not made any
i9 representations concerning the condition of the property on which
20 Concessionaire is relying, including any reports, studies, or other documents
21 which may have been provided to Concessionaire either as part of the RFP
22 process or subsequent to the RFP process and execution by Concessionaire of
23 this Contract. Concessionaire agrees to accept the Premises in their presently
24 existing condition, `AS IS°, WITH ALL FAULTS, and, except as provided in this
25 Contract, the State shall not be obligated to make any alterations, additions, or
26 betterments thereto.
• 27 ---
70
1 19. INSPECTION OF PREMISES: The State hereby reserves the right
• 2 to enter upon the Premises occupied by Concessionaire, with reasonable notice
3 and at any reasonable time, to inspect, investigate, and survey the Premises as
a deemed necessary for administration and enforcement of the terms of this
s Contract, or to determine the need for any preservation or maintenance work
6 necessary for operation of the park unit, of which the Premises are a part.
7
g State shall further have the right to do any and all work of any
9 nature necessary for preservation, maintenance, and operation of this State
10 Park unit in any areas within the confines of said unit, including the Premises.
n State will use its best efforts to plan, schedule, and carry out such work in a
12 manner that will not unreasonably disrupt concession operations.
13 Concessionaire will be given reasonable notice when such work may become
14 necessary and shall adjust concession operations in such a manner that the
is State may proceed expeditiously. If the State, in performing such necessary
16 work, causes a significant disruption of Concessionaire's operations, the State
17 agrees to abate or adjust Concessionaire's Concession Fees or other affected
1g obligations in accordance with the terms of this Contract.
19
20 In addition to, but not in lieu of, any remedy at law or under this
21 Contract, State shall also have the ,right to enter and make repairs as
22 necessary to preserve and maintain the concession facilities if, after notice and
23 opportunity to cure as provided for in Paragraph 7 of this Contract,
24 Concessionaire has failed to properly maintain the Premises improvements as
25 provided for in this Contract, and subject to the State's and Concessionaire's
26 compliance with the arbitration provisions hereof.
• 27 ---
71
1 20. TERMINATION:
• 2
3 A. Remaining in Possession
4
5
Should Concessionaire remain in possession of the Premises
6
after the expiration of the Operating Term of this Contract
7
("Possession Following Termination"), with the express or
s
implied consent of the State, such Possession Following
9
Termination shall be at the pleasure and sole discretion of
10
the Department at the herein stated prescribed Concession
11
Fees and financial considerations, and subject otherwise to
12
all the terms and conditions of this Contract, excepting and
13
excluding the right of a further fifty-five (55) year term.
., 14
0 15 B. Removal of Property
17 At the expiration or termination of the Term of this Contract,
18 including any consented to Possession Following
19 Termination of the Contract, Concessionaire shall within
20 thirty (30) days thereafter remove from the Premises, or
21 otherwise dispose of in a manner satisfactory to the State, all
22 personal property belonging to Concessionaire located on the
23 Premises. Should Concessionaire fail to remove or dispose of
24 said personal property herein provided, the State may, at its
25 election, consider such property abandoned and may dispose
26 of same at Concessionaire's expense.
• 27 ---
72
1
C. Turning Over Concession Property
•
2
3
Also, at the expiration or termination of the term of this
4
Contract, Concessionaire shall quit and surrender the
5
Premises, including real property improvements and
6
furnishings and equipment Concessionaire is required to
7
provide and maintain, in a state of repair equivalent to the
8
requirements of a first-class facility as provided for in this
9
Contract and sufficient for the continuing operation of the
10
concession, damage by matters for which Concessionaire is
11
not obligated by this Contract to repair and replace
12
periodically excepted, provided that such exculpatory
13
provision shall not extend to any risk which Concessionaire
14
is required to insure against as herein provided.
15
16
D. Quitclaim Deed
17
18
Upon termination of the rights hereby granted by the State,
19
Concessionaire shall execute and deliver to the State within
20
thirty (30) days after receipt of written demand therefor, a
21
good and sufficient quitclaim deed to the rights arising
22
hereunder, together with any other documents found
23
necessary to remove any claim of interest of Concessionaire,
24
or any lender or other party with whom Concessionaire is
25
doing, or has done, business with in connection with the
26
operation of the concession. Should Concessionaire fail or
•
27
refuse to deliver to the State a quitclaim deed or other
73
I documents as aforesaid, then unless the State's right to
• 2 terminate is being disputed by Concessionaire under
3 Section 22, a written notice by the State reciting the failure
4 of Concessionaire to execute and deliver said quitclaim deed
5 as herein provided, shall after ten (10) days from the date or
6 recordation of said notice be conclusive evidence against
7 Concessionaire and all persons claiming under
s Concessionaire of the termination of said Contract.
9
10 21. BREACH OF CONTRACT: Each of the following shall constitute a
11 material breach of this Contract:
12
13 A. Concessionaire's failure to pay rent or fulfill any other
14 monetary obligation to the State as and when due, and such
`. 15 failure shall not have been cured within thirty (30) days
16 following receipt of written notice thereof from the State to
17 Concessionaire;
18
19
B. The failure of either party to perform any of its non -monetary
20
obligations under this Contract, and such failure shall have
21
continued for sixty (60) days following receipt of written
22
notice from the non -defaulting party specifying the nature of
23
such non -monetary default; provided, however, that if the
24
nature of the non -monetary default is the result of a force
25
majeure event or is otherwise such that the default cannot
26
be fully cured within sixty (60) days, then the party in
• 27 default shall have such additional time as is reasonably
74
1 necessary to cure the default, so long as such party is
• 2 proceeding diligently to complete the cure; and
3
a C. Concessionaire's being adjudged bankrupt either voluntarily
5 or involuntarily, or a receiver is appointed for
6 Concessionaire's property with authority to take possession
7 of the Premises and operate concession in accordance with
s the terms of this Contract, and the adjudication or
9 appointment is not vacated, dismissed, or set aside within
10 one hundred twenty (120) days from its entry.
11
12 22. ARBITRATION OF DISPUTES: The arbitration provisions of this
13 section shall apply to (i) any alleged breach of this Contract by either the
14 Concessionaire or the State in which the alleged defaulting party (the "Alleged
15 Defaulting Party") does not agree with the party that has given written notice of
16 the default (the "Notice Party") that it has committed a breach of this Contract,
17 or (ii) any dispute between the Concessionaire and the State related to this
18 Contract (the dissatisfied party shall also be referred to herein as the Notice
19 Party and the other party shall be referred to herein as the Alleged Defaulting
20 Party). Neither party may exercise any rights or remedies under this Contract
21 (including without limitation any right of termination which the State may
22 have) because of an alleged breach of this Contract or a dispute related to this
23 Contract without first complying with the arbitration provisions of this Section
24 and obtaining an order from the arbitrator authorizing the exercise of such
25 right or remedy.
26 ---
• 27 ---
75
1 A. Meet and Confer
• 2
3 If an alleged breach of this Contract occurs and such breach
4 is contested by the Alleged Defaulting Parry or a dispute
5 (collectively, the "Dispute") arises between the
6 Concessionaire and' the State, both parties shall schedule a
7 meeting and use its best efforts to resolve the Dispute.
s
9 B. Arbitration
10
11
If the parties cannot resolve the Dispute pursuant to
12
Section A, within thirty (30) days of the date written notice of
13
the Dispute is given, either party may commence arbitration
14
with respect to the Dispute. Within thirty (30) days of the
15
date arbitration is commenced, the Alleged Defaulting Party
16
and the Notice Party shall select a single arbitrator by
17
mutual agreement of the parties. If the parties are unable to
18
reach agreement on the arbitrator within the thirty (30) day
19
period, an arbitrator shall be appointed by The American
20
Arbitration Association (the "AAA") in accordance with AAA
21
procedures from a list of qualified people maintained by the
22
AAA. The arbitration shall be conducted in San Francisco,
23
California and all expedited procedures prescribed by the
24
AAA commercial arbitration rules shall apply. Neither the
25
Alleged Defaulting Party nor the Notice Party shall consult
26
with such arbitrator as to his or her opinion as to the
27
Dispute prior to the appointment. The determination of the
76
1
arbitrator shall be limited solely to the Dispute. Such
•
2
arbitrator may hold hearings and require such briefs as the
3
arbitrator, in his or her sole discretion, determines is
4
necessary. In addition, the Alleged Defaulting Party or the
5
Notice Party may submit to the arbitrator with a copy to the
6
other party within five (5) business days after the
7
appointment of the arbitrator any data and additional
8
information that such party deems relevant to the
9
determination by the arbitrator and the other party may
10
submit a reply in writing within five (5) business days after
11
receipt of such data and additional information. The
12
arbitrator shall conduct such evidentiary hearings as the
13
arbitrator deems necessary or appropriate.
`
14
thirty (30) days of his or
15
(1) The arbitrator shall, within
16
her appointment, reach a decision regarding the
17
Dispute. The arbitrator's decision shall be limited to
18
(i) determining whether a breach of or default under
19
this Contract has occurred by the Alleged Defaulting
20
Party and (ii) if the arbitrator determines that the
21
Alleged Defaulting Party is in breach of or default
22
under this Contract, the arbitrator shall provide the
23
Alleged Defaulting Party specific instructions ("First
24
Arbitration Instructions") on curing such default and
25
shall specify an applicable cure period (the "Cure
26
Period") to cure such breach or default.
27 ---
77
1
(2) If there remains a dispute. after the Cure Period as to
•
2
whether or note the Alleged Defaulting Party has cured
3
the breach or default as instructed by the arbitrator,
4
the parties shall meet and confer as provided in
5
Section A above to resolve any dispute over whether
6
the Alleged Defaulting Party has complied with the
7
First Arbitration Instructions. If the parties cannot
8
within fourteen (14) days resolve such dispute, then
9
either party may request that the same arbitrator
to
render a decision on the disputed issues pertaining to
11
satisfaction of the First Arbitration Instructions (the
12
"Second Arbitration"). The arbitrator may hold
13
additional hearing and require such briefs as the
14
arbitrator, in his or her sole discretion, determines is
15
necessary. In addition, the Alleged Defaulting Party or
16
the Notice Party may submit to the arbitrator with a
17
copy to the other party any data and additional
18
information that such party deems relevant to the
19
determination by the arbitrator and the other party
20
may submit a reply in writing three (3) business days
21
after receipt of such data and additional information.
22
The arbitrator shall conduct such additional
23
evidentiary hearings as the arbitrator deems necessary
24
or appropriate. The arbitrator shall, within ten
25
(10) business days, reach a decision as to whether the
26
Alleged Defaulting Party has satisfied the First
•
27
Arbitration Instructions and cured the breach or
m
I
default. If the arbitrator determines that the Alleged
•
2
Defaulting Party has not satisfied the First Arbitration
3
Instructions and cured the breach or default (inability
4
to cure because of force majeure events excluded), the
5
arbitrator may order equitable relief or may award
6
compensatory damages to the Notice Party as he or
7
she deems appropriate. If the Alleged Defaulting Party
8
is the Concessionaire, any order by the arbitrator to
9
allow the State to terminate this Contract shall only be
10
exercised as a remedy in the most egregious of
11
circumstances since Concessionaire's investment in
12
the Project is contemplated to be, as of the date hereof,
13
in excess of Twenty Million Dollars ($20,000,000.00)
14
and a material consideration for Concessionaire
1
15
entering into this Contract is its right to operate the
16
Project for the full fifty-five (55)-year term and an early
17
termination of this Contract without compensation to
18
Concessionaire would impose a severe hardship on
19
Concessionaire by depriving Concessionaire of both its
20
investment and an economic return on its investment.
21
22 (3) The decision(s) of the arbitrator shall be binding upon
23 the Alleged Defaulting Party and the Notice Party.
24
25 (4) If the Alleged Defaulting Party and the Notice Party fail
26 to agree upon matters relating to the arbitration, then
• 27 the rules of the AAA shall govern such arbitration.
79
1 (5) The cost of arbitration shall be paid by the
• 2 substantially unsuccessful party (which may be the
3 same party or a different party with regard to the
4 initial arbitration and the Second Arbitration).
5
6 (6) The arbitration processing and all evidence given or
7 discovered pursuant thereto shall be maintained in
s confidence by all parties.
9
10 (7) Judgment upon the award rendered by the arbitrator
11 may be entered by either party into any court having
12 jurisdiction, or application may be made to such court
13 for a judicial recognition of the award or an order of
14 enforcement thereof, as the case may be.
15
16 23. STATE BUY-OUT PROVISIONS:
17
is A. Intent
19
20 It is the intent of the parties that this Contract provide for a
21 reasonable return on Concessionaire's investment as
22 required by the RFP and implied in Concessionaire's
23 Proposal in response thereto. Such rate of return is
24 intended to be a rate of return on capital as measured
25 against similar risks for investments for development or start
26 up ventures in the hotel industry for first-class resort hotels
• 27 similar in quality and provision of services and guest
C
I
programs to the Ahwanee, Post Ranch Inn, or Ventanna Inn.
• 2
In addition, the Contract provides for Concessionaire to
3
develop, construct, operate, and maintain the concession in
4
a manner which would provide the State with improved,
5
first-class operating facilities at no cost on termination,
6
assuming the Contract runs full term. Furthermore, the
7
possessory interest of Concessionaire in this Contract has a
8
value over the life of the Contract and was a material
9
inducement to Concessionaire in submitting its Proposal in
10
response to the RFP while, at the same time, the RFP
11
provided for early termination and buy-out by State.
12
Therefore, this Buy -Out provision is intended to provide for
13
early termination at the election of the State with appropriate
14
compensation to Concessionaire for its interest in the
15
Contract.
16
17 B. Early Termination
18
19
Notwithstanding any other provision in this Contract and in
20
addition to any other remedy available to the State, the State
21
reserves the right, from and after the date that is the tenth
22
(10th) anniversary of the date on which Concessionaire
23
commences its hotel operations on the Premises to terminate
24
this Contract upon giving Concessionaire twelve (12) months
25
written notice. Should State not complete such buyout
26
within twenty-four (24) months from the date of such notice,
• 27 the State's right of buyout pursuant to such notice shall
F-31
I terminate and the right to buyout shall not arise again until
• 2 at least ten (10) years have elapsed from the date of
3 termination of the noticed buyout offer.
4
5 Any buy-out by the State called for in this paragraph shall
6 only be operative when funds required by State for such buy-
7 out are lawfully available to State, either through
a appropriation by the Legislature and through the normal
9 budgeting processes of the State or otherwise.
10
11
C. Compensation for Early Termination
12
13
Notwithstanding any other provision of this Contract or law
14
with regard to compensation for taking by eminent domain
15
or otherwise, in the event of early termination as provided for
16
in this Section, State shall pay to Concessionaire at the time
17
of the effective date of such termination, and upon
18
Concessionaire's vacation of the Premises in accordance
19
with, and fulfillment of all other pertinent obligations under
20
the Terms of this Contract, the following sums:
21
22
(1) The unamortized balance of the cost of all of the
23
improvements and facilities restored, placed, created,
24
or developed by Concessionaire on the Premises
25
("Premises Improvements"), including but not limited
26
to the structures, equipment, and fixtures comprising
• 27
the Resort, all hard and soft costs incurred in
IF
I
connection with the development of the Resort
•
2
including, without limitation, architectural fees, design
3
fees, engineering costs, costs of construction of
4
improvements, costs of acquisition of fixtures,
5
furniture and equipment, capitalized construction
6
period interest, any and all personal property and
7
general intangibles used in connection with the
8
operation thereof, and all other hard and soft costs of
9
a capital nature associated with the development of
to
Resort (the "Unamortized Balance"). The Unamortized
11
Balance means the cost of the Premises Improvements
12
as provided pursuant to Section 5H amortized over the
13
term of the Contract at an interest rate of the prime
14
rate as published in the Wail Street Journal on the
"
15
Effective Date plus two (2) percent remaining to be
16
amortized at the effective date of the termination; and
17
18
(2) The present value at the effective date of the
19
termination of Concessionaire's possessory interest in
20
the concession for the remaining term of the Contract
21
as determined pursuant to the formula contained in
22
this subparagraph 2 ("The Present Value of
23
Concessionaire's Possessory Interest"). The Present
24
Value of Concessionaire's Possessory Interest will be
25
calculated as follows: The Concessionaire's average
26
"Annual Net Operating Income" for the five (5) Contract
•
27
Years preceding the effective termination date, shall be
1
multiplied by the number of Contract Years remaining
•
2
in the Contract and shall be discounted to the present
3
value as of the effective date of the termination using
4
an interest rate of ten percent (10%). As used in this
5
section, Concessionaire's Annual Net Operating
6
Income" shall mean Concessionaire's Gross Receipts
7
for each year minus Concessionaire's "Total Adjusted
8
Operating Expenses" for such year. Total Adjusted
9
Operating Expenses shall mean the total of all of
10
Concessionaire's business expenses incurred in
11
operating the Project in a year, including without
12
limitation, Concession Fees, taxes, insurance, hotel
13
operating expenses and related incidentals, but
14
excluding the following (which shall not be included in
`
15
Total Adjusted Operating Expenses): Concessionaire's
16
debt service obligations (principle and interest), return
17
of invested equity and any preferred return thereon,
18
any hotel management fees and partnership
19
administration fees (excepting unaffiliated, third party
20
management or administration fees), fees to
21
Concessionaire's general partner (or such general
22
partner's manager) or any other fees paid to affiliates
23
of Concessionaire. The effective date of the
24
termination shall be the date that the State completes
25
its acquisition of the Concessionaire's possessory
26
interest pursuant to this Section 22.
•
27 ---
m
I D. In accordance with Public Resources Code
• 2 Section 5080.18 (h), and subject to the arbitration provisions
3 of Section 22, where the Contract has been terminated due
4 to a breach of this Contract on the part of the
5 Concessionaire, the State shall not be obligated to purchase
6 any improvements or to provide any buy-out. In the event
7 the Contract is terminated at Concessionaire's request, the
8 State shall not be obligated to provide any buy-out.
9
10 E. In the event there is a Secured Lender, then any payments
11 required to be made pursuant to this Section shall be used
12 in accordance with any loan documentation agreed in writing
13 by Concessionaire and provided to Department to satisfy
14 such Secured Lender to the extend of its interest in this
15 Contract and/or Premises.
16
17 24. CONTRACT NOTICE: Except for rent, as provided for herein, any
18 notices herein provided to be given, or which may be given by either party to
19 the other, shall be deemed to have been fully given when made in writing three
20 (3) business days after being deposited in the United States mail, postage
21 prepaid, certified with return receipt requested and addressed as follows:
22 To the Concessionaire at: Mr. Michael Freed
23 Resort Design Group
24 633 Battery Street, Suite 620
25 San Francisco, California 94111
26 ---
• 27 ---
1 To the State at: Department of Parks and Recreation
• 2 Orange Coast District Office
3 3030 Avenida del Presidente
4 San Clemente, California 92672
5
6 With a copy to: Department of Parks and Recreation
7 Park Services Division
8 Concessions/Reservations Office
9 Post Office Box 942896
to Sacramento, California 94296-0001
11
12 The address to which notices shall or may be mailed as aforesaid
13 by either party, shall or may be changed by written notice given by such party
14 to the other as hereinbefore provided, but nothing herein contained shall
15 preclude the giving of any such notice by personal service.
16
17 25. INTERPRETATION OF CONTRACT: This Contract is made under
18 and is subject to the laws of the State of California in all respects as to
19 interpretation, construction, operation, effect, and performance.
P
21 26. WAIVER OF CONTRACT TERMS: No waiver by either party at
22 any time of any of the terms, conditions, or covenants of this Contract shall be
23 deemed as a waiver at any time thereafter of the same or of any other term,
24 condition, or covenant herein contained, nor of the strict and prompt
25 performance thereof. No delay, failure, or omission of the State to re-enter the
26 Premises or to exercise any right, power, or privilege or option arising from any
• 27 breach, nor any subsequent acceptance of rent then or thereafter accrued shall
m
1 impair any such right, power, privilege, or option or be construed as a waiver of
• 2 such breach or a relinquishment of any right or acquiescence therein. No
s notice to Concessionaire shall be required to restore or revive time is of the
4 essence after the waiver by the State of any breach. No option, right, power,
s remedy, or privilege of the State shall be construed as being exhausted by the
6 exercise thereof in one or more instances. The rights, powers, options, and
7 remedies given to the State by this Contract shall be deemed cumulative.
a
9 27. MODIFICATION OF CONTRACT: Notwithstanding any of the
10 provisions of this Contract, the parties may hereafter, by mutual consent, agree
n to modifications thereof, additions thereto, or termination thereof, in writing,
12 which are not forbidden by law. In no event shall either party be deemed to
is have an obligation to consider, discuss, negotiate, or otherwise agree to
14 modifications. The State and Concessionaire shall cooperate in including in
15 this Contract by suitable amendment from time to time any provision which
16 may reasonably be requested by a Secured Lender, and which is consistent
17 with laws and authority governing the Department, for the purpose of allowing
18 such Secured Lender reasonable means to protect any lien of its mortgage on
19 the occurrence of a default under the terms of this Contract. The State and
20 Concessionaire each agree to execute and deliver (and to acknowledge, if
21 necessary, for recording purposes) any agreement necessary to effect such
22 amendment; provided, however, that any such amendment, shall not in any
23 material respect adversely affect any rights of the State under this Contract.
24 The State shall have the right to grant reasonable extensions of time to
25 Concessionaire for any purpose or for the performance of any obligation of
26 Concessionaire hereunder.
• 27 ---
M.
1
28. ASSIGNMENTS: Except as expressly provided herein, no transfer,
•
2
assignment, or corporate merger by Concessionaire that affects this Contract or
3
any part thereof or interest therein, directly or indirectly, voluntarily or
a
involuntarily, shall be made unless such transfer, assignment, or corporate
5
merger is first consented to in writing by the State, whose consent shall not be
6
unreasonably withheld.
7
8
A. Assignment for Security
9
10
For purposes of this Contract, the term "Assignment for
11
Security" shall mean a transaction or transactions in which
12
Concessionaire voluntarily assigns all or any portion of its
13
interest in this Contract for the purpose of security in
14
connection with a transaction in which Concessionaire
15
obtains funds, the repayment of which is secured in whole or
16
in part. In no event shall an Assignment for Security create
17
an encumbrance on the interest of the State in the Premises
18
or this Contract and the State's interest in the Premises, all
19
improvements, including any fixtures, furnishings, or other
20
additions and betterments thereto, and in this Contract shall
21
at all times be subordinate to such assignment except as
22
otherwise set forth in this Contract. State shall be entitled
23
to record a memorandum of this Contract setting forth its
24
interest hereunder. In connection with any financing or
25
refinancing, lender shall be granted an assignment of this
26
Contract for security only upon such lender's acceptance to
•
27
be bound by all the terms of this Contract. For purposes of
EM
1
this Contract, the term 'Secured Lender" shall mean the
• 2
secured party under the encumbrance (hereinafter referred
s
to as a'MortgageA) created by an Assignment for Security,
4
regardless of the form of the transaction. Provided that
s
Concessionaire remains obligated to perform all the terms
6
and provisions on its part to be performed under the terms
7
hereof, Concessionaire shall have the right to enter into an
s
Assignment of Security, without the consent of the State,
9
with any bank, insurance company, savings and loan
10
association, pension fund or similar institutional lender, or
11
with any other person or entity. Concessionaire shall notify
12
the State of an Assignment for Security effected by
13
Concessionaire hereunder.
14
15 This Contract shall not be subject to termination by the
16
State solely by reason of or upon the judicial or non judicial
17
foreclosure or acquisition by a Secured Lender of
18
Concessionaire's interest in this Contract, by resort to any
19
remedy for default under or pursuant to an Assignment for
20
Security, or conveyance in lieu of foreclosure thereof. So
21
long as a Mortgage is in effect, the State shall not accept a
22
surrender, cancellation, or other voluntary termination of
23
this Contract by Concessionaire without the prior written
24
consent of the Secured Lender, or if such surrender or
25
termination is on account of Concessionaire's default
26
hereunder, the State shall have first given each Secured
• 27 ---
I
Lender the opportunity to exercise its rights and remedies as
• 2
provided below.
3
4
Upon written notice from any Secured Lender that it is
5
taking possession pursuant to its Mortgage, and/or upon its
6
assumption of possession of the Premises for any purpose,
7
such Secured Lender shall have all of the rights of
s
Concessionaire and the duty to perform all of
9
Concessionaire's obligations hereunder accruing thereafter,
10
but only for so long as it holds possession. Except for the
11
foregoing provision, no Secured Lender shall be liable to
12
perform, or be liable in damages for failure to perform, any of
13
the obligations of Concessionaire, unless and until such
14
Secured Lender actually enters and takes possession of the
15
Premises in connection with or as a result of foreclosure or
16
other default proceedings under a Mortgage or surrender or
17
assignment in lieu thereof. A Secured Lender's liability shall
18
be dependent upon its right to possession, and, therefore, if
19
any foreclosure or other possessory proceedings are
20
terminated prior to assumption of possession, such Secured
21
Lender shall have no liability hereunder.
22
23 No act or failure to act on the part of Concessionaire which
24 would entitle the State under the terms of this Contract, or
25 by law, to be relieved of the State's obligations hereunder or
26 to terminate this Contract, shall result in a release or
• 27 ---
e
I termination of such obligations or a termination of this
• 2 Contract unless:
3
4 (1) The State shall have first given written notice of
5 Concessionaire's act or failure to act to each Secured
6 Lender of record, if any, specifying the act or failure to
7 act on the part of Concessionaire which could or would
8 give rise to the exercise of the State's rights; and
9
10
(2) Each such Secured Lender, after receipt of such
11
notice, (a) shall have failed or refused to correct or
12
cure Concessionaire's failure to pay a sum of money
13
due under this Contract within the time permitted
14
Concessionaire hereunder, plus an additional thirty
15
(30) days thereafter or (b) shall have failed or refused
16
to correct or cure any other default by Concessionaire
17
hereunder within the time permitted Concessionaire
18
hereunder, plus a reasonable time thereafter. As used
19
herein, the time permitted" hereunder shall
20
commence on the date notice is received by the
21
Secured Lender, and "reasonable time" shall mean the
22
time necessary to correct or cure the condition using
23
reasonable diligence. Notwithstanding anything to the
24
contrary herein contained, this paragraph shall not be
25
deemed to impose any obligation or liability on any
26
Secured Lender to correct or cure any default of
•
27 ---
I
Concessionaire or other condition herein specified
•
2
unless and until such Secured Lender completes its
3
foreclosure or obtains possession of the Premises.
a
s
If a Secured Lender has succeeded to Concessionaire's
6
interest in the Premises by foreclosure, deed in lieu of
7
foreclosure, or otherwise, and so long as a Secured Lender
s
has cured or commenced to cure the default of
9
Concessionaire hereunder and has performed the obligations
10
to be performed by it hereunder during the period of its
tl
possession, such Secured Lender shall have the absolute
12
right to assign this Contract to an assignee ("Secured
13
Lender's Assignee") which shall assume the obligations of
14
Concessionaire hereunder and go into possession and
15
occupancy of the Premises for the uses and purposes herein
16
specified, whereupon such Secured Lender shall be relieved
17
of all further liability for performance of the obligations
is
arising from and after the date of such assignment.
19
Notwithstanding anything herein to the contrary, Secured
20
Lender shall have the right to assign this Contract and all of
21
the Concessionaire's rights hereunder, to Secured Lender's
22
Assignee without the prior consent of the State provided that
23
Secured Lender's Assignee executes documentation
24
reasonably necessary to assume all of Concessionaire's
25
obligations hereunder and Secured Lender's Assignee either
26
directly or indirectly through a hotel management company
•
27
retained by it, has experience in operating a first-class
M
I Resort similar to the Resort and substantially meets any
. 2 other minimum requirements as set forth in the RFP. No act
3 or failure to act on the part of Concessionaire which would
4 entitle a Secured Lender under the terms of its Mortgage,
5 this Contract, or by law, to assume or assign or otherwise
6 transfer Concessionaire's rights, shall be effective unless:
s (1) The Secured Lender shall have first given written
9 notice to the State of Concessionaire's act or failure to
10 act; and
11
12 (2) The State, after receipt of such notice, has failed to pay
13
in full any amounts secured by the Mortgage, within
14
thirty (30) days after receipt of such notice; provided,
4 15
however, that nothing contained in this Paragraph 2
16
shall be deemed to impose any obligation or liability on
17
the State to pay such amounts; and provided, further,
18
that the State's rights to so pay shall be deemed
19
waived by the State if such payment would impair or
20
interfere in any manner with the Secured Lender's
21
security. Upon such payment, the State shall be
22
entitled to any rights of the Secured Lender in the
23
Premises.
24
25 The covenants and agreements contained in this Contract
26 with respect to the rights and powers of, and benefits inuring
• 27 to, a Secured Lender constitute a continuing offer to any
M
I
such Secured Lender, which shall be deemed to have been
•
2
accepted by any Secured Lender who, by entering into an
3
Assignment for Security and accepting a Mortgage or
4
requiring an Assignment for Security pursuant to a
s
Mortgage, or by entry or foreclosure under a Mortgage,
6
assumes the obligations herein set forth with respect to and
7
to the extent required of such Secured Lender. Such
a
Secured Lender is hereby deemed to be a party to this
9
Contract as an obligee hereunder to the same extent as
10
though its name were written hereon as such; and such
11
Secured Lender shall be entitled to enforce such provisions
12
in its own name.
13
14
If this Contract shall terminate for any reason, or be rejected
15
or disaffirmed pursuant to any bankruptcy law or other law
16
affecting creditor's rights, any Secured Lender or any
17
assignee of'a Secured Lender shall have the right,
18
exercisable by notice to the State within sixty (60) days after
19
the Effective Date of such termination, to enter into a new
20
concession contract for the Premises with the State. The
21
term of such new concession contract shall begin on the date
22
of the termination of this Contract and shall continue for the
23
remainder of the then unexpired term hereof. Such new
24
concession contract shall otherwise contain the same terms
25
and conditions as those set forth herein, except for
26
requirements which have already been performed and are no
•
27
longer applicable. The parties intend that such new
I
concession contract shall have the same priority relative to
•
2
other rights or interest in or to the Premises, or any portion
3
thereof, as this Contract under the terms and conditions
4
herein contained, and the State shall discharge or cause to
5
be subordinated to such new concession contract any lien or
6
encumbrance which it has incurred and for which
7
Concessionaire is not responsible hereunder, and which is
8
subordinate to this Contract. In partial consideration for
9
such new concession contract, the Secured Lender or its
10
assignee shall pay to the State all fees and other sums due
11
and payable by Concessionaire as of the date this Contract
12
terminates and the new concession contract begins and,
13
upon such payment, the party making such payment shall
14
be subrogated to all rights of the State to recover from
'
15
Concessionaire the amount so paid. From the date on which
16
any Secured Lender serves upon the State a notice of
17
exercise of its right to a new concession contract, such
18
Secured Lender may use and enjoy the Premises in
19
accordance with the terms of this Contract without
20
hindrance by the State.
21
22
The State shall from time to time, upon, and within fourteen
23
(14) days after written request from Concessionaire, execute
24
and deliver any agreement or document which may
25
reasonably be deemed necessary to implement the provisions
26
of this Section; provided that the State shall not be required
•
27
to execute any documents which result in an amendment of
95
I this Contract that materially and adversely affects the State's
• 2 rights and/or obligations hereunder. The provisions of this
3 Section shall survive the termination of this Contract and
4 shall continue in full force and effect thereafter to the same
5 extent as if this Section were a separate and independent
6 contract among the State, Concessionaire, and any Secured
7 Lender.
s
9 B. Assignment for Other Than Security
10
11 Notwithstanding anything elsewhere in this Contract to the
12 contrary, without the State's prior consent, Concessionaire
13 shall have the right to assign this Contract and all rights and
14 privileges hereunder to (1) any entity in which
"! 15 Concessionaire, or an entity in which Concessionaire or any
16 of its general partners is a general partner, or (2) any entity
17 in which Concessionaire or any of its general partners holds
1s greater than a fifty percent (50%) interest. Promptly after
19 any such assignment, Concessionaire or the assignee shall
20 give written notice of the same to the State.
21
22 Except as provided in the preceding paragraphs,
23 Concessionaire shall neither assign nor otherwise convey
24 any interest of any sort granted by this Contract to any
25 person or persons, entity or entities whatsoever without
26 obtaining the prior written consent and approval of the
0
27 conveying document by the State, which consent and
I
approval of the conveying document by the State shall not be
• 2
unreasonably withheld or delayed; provided, however, that if
3
in connection with any such proposed assignment or sale of
4
Concessionaire's rights under this Contract, Concessionaire
5
(or an affiliate of Concessionaire or its general partners) is to
6
remain the operator and manager of the Resort, it shall be
7
deemed unreasonable for the State to withhold its consent.
s
Before the State considers any assignment (other than one in
9
which Concessionaire will continue to operate and manage
10
the Resort), Concessionaire shall provide to the State the
11
proposed assignee's name, address, financial statements for
12
the past two (2) years, and a statement regarding the
13
proposed assignee's experience in operating hotels. Within
14
thirty (30) days after receiving the documentation described
15
above, the State shall either consent in writing to the
16
proposed assignment or specify in writing the grounds for
17
refusal of consent. The State's failure to deliver such written
18
notice within the required period shall be deemed to
19
constitute the State's consent to the proposed assignment.
20
Except as agreed in writing by State, in no event shall
21
assignment relieve Concessionaire of its obligations under
22
the Contract, except to the extent that, and during such time
23
as, such obligations are dutifully carried out by the assignee.
24
25 Concessionaire's interest hereunder shall not be assignable
26 in bankruptcy, nor shall said interest be assignable by
• 27 operation of law. Any document by which an interest is
M
I
granted, subject to the consent of the State, shall indicate
. 2
that the person acquiring that interest has been advised of
3
terms of this Contract and takes said interest subject to the
4
terms and conditions in this Contract and recognizes that
5
upon termination of the interest of Concessionaire granted
6
by this Contract, said interest shall also be terminated.
7
However, in the event of termination of this Contract, the
s
State, at its sole option, may elect to treat any assignee or
9
holder of an interest conveyed by Concessionaire as the
10
State's tenant, subject to the terms and conditions of this
11
Contract and that entered into between Concessionaire and
12
Concessionaire's assignee or holder of an interest conveyed
13
by Concessionaire.
14
15 C. Subconcessions
ILI
17 With the prior written consent of the State, which consent
1s shall not be unreasonably withheld, portions of this
19 concession may be operated by others. The following
20 conditions must be met:
21
22 (1) The subconcessionaire must be fully qualified.
23
24 (2) The subconcessionaire's rights, interest, and
25 obligations shall be subordinate and in all ways
26 subject and conform to the terms of this Contract.
.;
1 (3) Gross annual receipts shall include all receipts of such
• 2 subconcessionaire, except as described in Section 3 E.
3
4 29. TERMS BINDING ON SUCCESSORS: All the terms, covenants,
s and conditions of this Contract shall inure to the benefit of and be binding
6 upon any subconcessionaire and the successors and assigns of the parties
7 hereto. Concessionaire shall have the right to enforce the provisions of this
a Contract specifying obligations to be performed by the Department. The
9 provisions of this paragraph shall not be deemed as a waiver of any of the
to conditions against assignment hereinbefore set forth.
11
12 30. DURATION OF PUBLIC FACILITIES: By entering into this
13 Contract, the State makes no stipulation as to the type, size, location, or
14 duration of public facilities to be maintained on the Premises, or the
15 continuation of the State ownership thereof, nor does the State make any
16 guarantee regarding the tentative Projections in any prospectus furnished to
17 Concessionaire at any time.
18
19 31. TIME OF ESSENCE: Time shall be of the essence in the
20 performance of this Contract.
21 1 ,
22 32. EMINENT DOMAIN: If, during the term of this Contract, the whole
23 of the Premises is condemned by a public entity in the lawful exercise of the
24 power of eminent domain, or in the event that only a part of the Premises is
25 condemned but Concessionaire in its sole discretion determines that such
26 partial taking substantially affects its operations, this Contract shall terminate
• 27 and Concessionaire shall be entitled to such portion of any compensation or
..
1 award payable in connection with such condemnation (Award") as is
• 2 attributable to Concessionaire's interest in this Contract and/or the Premises
3 and improvements thereon; provided, however, that, up to the extent of any
a Award, any Secured Lender shall first be paid an amount not exceeding the
s unpaid principal balance of any loan to Concessionaire secured by a Mortgage.
6
7 In the event that only a part of the Premises is condemned, .and
s Concessionaire in its sole discretion determines that such partial taking does
v not substantially affect its operations, this Contract shall forthwith terminate
io only as to the part taken and the Concession Fees and other obligations shall
11 be abated on the date of such taking in the proportion that the Gross Receipts
12 attributable to the area of the Premises so taken bears to the total Gross
13 Receipts from operations, and Concessionaire shall be entitled to such portion
14 of any Award as is attributable to the value of its interest in the park taken and
�.1
" 15 improvements thereon.
16
17 33. CONFLICT OF INTEREST: Concessionaire warrants and
is covenants that no official, employee of the State, or any person associated with
19 an employee of the State by blood, adoption, marriage, and/or cohabitation,
20 nor any business entity in which an official, employee of the State, or
21 associated person with employee of the State is interested: (1) has been
22 employed or retained to solicit or aid in the procuring of this Contract; and
23 (2) will be employed in the performance of this Contract without the immediate
24 divulgence of such fact to the State. In the event that State determines that
25 the employment of any such official, employee, associated person, or business
26 entity is not compatible with such official's or employee's duties as an official or
• 27 employee of the State of California, Concessionaire, upon request of the State,
100
1 shall terminate such employment immediately. For breaches or violation of
• 2 this paragraph, the State shall have the right both to annul this Contract
s without liability and, in its discretion, recover the full amount of any such
4 compensation paid to such official, employee, or business entity.
s
6 34. NONDISCRIMINATION: Concessionaire and Concessionaire's
7 employees shall not discriminate because of race, religion, color, ancestry, sex,
s age, national origin, physical handicap, or sexual preference against any
9 person by refusing to furnish such person any accommodation, facility, service,
10 or privilege offered to or enjoyed by the general public. Nor shall
11 Concessionaire or Concessionaire's employees publicize the accommodation,
12 facilities, services, or privileges in any manner that would directly or
14 inferentially reflect upon or question the acceptability of the patronage of any
14 person because of race, religion, color, ancestry, sex, age, national origin,
15 physical handicap, or sexual preference.
16
17 In the performance of this Contract, Concessionaire will not
18 discriminate against any employee or applicant for employment because of
19 race, color, religion, ancestry, sex, age, national origin, physical handicap, or
20 sexual preference. Concessionaire will take affirmative action to ensure that
21 applicants are employed, and that employees are treated during employment
22 without regard to their race, color, religion, ancestry, sex, age, national origin,
23 physical handicap, or sexual preference. Such action shall include, but not be
24 limited to, the following: employment, upgrading, demotion, or transfer;
25 recruitment or recruitment advertising; layoff or termination; rates of pay or
26 other forms of compensation; and selection of training, including
. 27 apprenticeship. Concessionaire shall post in conspicuous places, available to
101
1 employees and applicants for employment, notices setting forth the provisions
• 2 of Government Code Sections 12970 and 12974.. Such notices may be
3 obtained from the Department of Fair Employment and Housing.
4
5 Concessionaire will permit access to Concessionaire's records of
6 employment, employment advertisement, application forms, and other
7 pertinent data and records by the State Fair Employment and Housing
a Commission, or any other agency of the State of California designated by the
9 awarding authority, for the purpose of investigation to ascertain compliance
10 with the State Fair Employment and Housing Section of this Contract.
11
12 The State may determine a willful violation of the State Fair
13 Employment and Housing Act to have occurred upon receipt of a final
14 judgment having that effect from a court in an action to which Concessionaire
". 15 was a party, or upon receipt of a written notice from the State Fair Employment
16 and Housing Commission that it has investigated and determined that
17 Concessionaire has violated the State Fair Employment and Housing Act and
18 has issued an order, under Government Code Section 12970, which has
19 become final, or obtained an injunction under Government Code
20 Section 12974. In the event of violation of this paragraph, Concessionaire shall
21 pay such fines or take such remedial action as it is legally required, but such
22 violation shall not be considered a material breach of this Contract.
23
24 35. PARAGRAPH TITLES: The paragraph titles in this Contract are
25 inserted only as a matter of convenience and for reference, and in no way
26 define, limit, or describe the scope or intent of this Contract or in any way
• 27 affect this Contract.
102
1 36. CONTRACT IN COUNTERPARTS: This Contract is executed in
• 2 counterparts, each of which shall be deemed an original.
3
4 37. ESTOPPEL CERTIFICATES: Each party, within ten (10) days
5 after notice from the other party, shall execute and deliver to the other party a
6 certificate stating that this Contract is unmodified and in frill force and effect,
7 or in full force and effect as modified, and state the modifications. The
a certificate also shall specify the minimum Concession Fees, the date to which
v the fees have been paid in advance, any prepaid fees, and any uncured defaults
10 on the part of the other party (or stating that there are no uncured defaults).
11 Failure to deliver the certificate within the ten (10)-day period referred to above
12 shall be conclusive, for the benefit of the party requesting the certificate, that
13 this Contract is in full force and effect, that it has not been modified except as
14 may be represented by the party requesting the certificate, and that there are
15 no uncured defaults under this Contract by the party requesting the certificate.
16 If a party fails to deliver the certificate within such ten (10)-day period, the
17 party failing to deliver the certificate irrevocably constitutes and appoints the
is other party as its special attorney -in -fact to execute and deliver the certificate
19 to any third party.
20
21 38. STATE'S DISTRICT SUPERINTENDENT: For purposes of this
22 Contract, the "District Superintendent" is the State representative in direct
23 charge of Crystal Cove State Park and other units of the State Park System as
24 may be assigned. The District Superintendent is charged with the day-to-day
25 administration of this Contract and is Concessionaire's initial contact with the
• 26 ---
27 ---
103
1 State for information, contract performance, and other problems as might
• 2 arise.
3
4 39. AGREEMENT IN WRITING: This Contract contains and embraces
s the entire agreement between the parties hereto and neither it nor any part of it
6 may be changed, altered, modified, limited, or extended orally, or by any
7 agreement between the parties unless such agreement be expressed in writing,
s signed, and acknowledged by the State and Concessionaire, or their successors
9 in interest.
10
11 40. APPROVAL OF CONTRACT: It is understood and agreed that this
12 Contract, and any amendments, modifications, or the termination thereof shall
13 not be effective until approved by the Department of General Services and the
14 Attorney General. By approving this Contract, as evidenced by the signatures
n of the Department of General Services and the Attorney General hereto, the
16 State affirms and warrants that it has all requisite power and authority to enter
17 into this Contract and all other agreements and instruments contemplated
is hereby (collectively, the "Project Documents") and to consummate the
i9 transactions contemplated hereunder, and that it is unaware of any basis upon
20 which any third party could successfully challenge the validity of any of the
21 Project Documents or any action taken by the State in connection with or
22 pursuant to the transactions contemplated hereunder.
23
24 41. APPROVALS: In any instance in which an approval is required
25 pursuant to this Contract, the approval shall not be unreasonably withheld or
26 delayed.
• 27 ---
104
6
IN WITNESS WHEREOF, the parties hereto have caused these presents
• to be executed the day and year first above written.
APPROVED: CONCESSIONAIRE:
DEPARTMENT OF CRYSTAL COVE PRESERVATION PARTNERS,
GENERAL SERVICES LP, A CALIFORNIA LIMITED PARTNERSHIP
By: Crystal Cove Preservation Partners,
LLC, a California Limited Liability
Company, its General Partner
By: Resort De Group, C, a Limited
Liability Co any, s Manages
By:
(Mic el S. Freed) .•
Title:
Date:
(Ms�uag�u Member)
F17
�— 7J
STATE OF CALIFORNIA
3 DEPARTMENT OF PARKS AND RECREATION
DONALD W. MURPHY, DIRECTOR
By:
Title:
Date:
Approved as to legal sufficiency in
accordance with the requirements of
Sections 5080.02-5080.21 of the Public
Resources Code.
DANIEL E. LUNGREN, Attorney General
Of the State of California
By:
Deputy Attorney General
Dated:
OOOT=3.doc/ smj/9 /8/97
105
IN WITNESS WHEREOF, the parties hereto have caused these presents
to be executed the day and year first above written.
APPROVED:
DEPARTMENT OF CRYSTAL COVE PRESERVATION PARTNERS,
GENERAL SERVICES LP, A CALIFORNIA LIMITED PARTNERSHIP
Bt: Crystal Comae Preservation Partners,
PLC, a California Limited Liability
Company, its General Partner_
By: Resort Design Group, LLC, a Limited
Liability Company. its Manager
By:
......�Micizxel8. Freed). . .
Title:
(Managing Member)
Date:
STATE OF CALIFORNIA
l• .
Sys _
Title:
Date:
Approved as to legal sufficiency in
accordance with the requirements of
Sections 5080.02-5080.21 of the Public
Resources Code.
DANIEL E. LUNGREN, Attorney General
of the State off California
Deputy Attorney General
Dated: I Z-/6/97
cC0r,=3.d0c/smj/9/E/97
HS AND RECREATION
DIRECTOR
I /ORM poLtcy I RIOrrT
Deperu:,aa cf General Services
• Lou
BY
/udf. chbf coumd
105
CRYSTAL COVE HISTORIC DISTRICT
• EXHIBIT - A
Property Description and Site Plan
PARCEL-1
Approximately 13 acres as shown on the site plan, roughly bounded on
the North by an entrance road beginning at a signalized intersection to a
point along an existing fence, then by a line extending Westerly to the
mean high tide line; and bounded on the West by the mean high tide
line; and bounded on the South by a line running Easterly from the
mean high tide line to the Westerly edge of "Pacific Coast Highway"
( State Highway-1 ); then roughly bounded on the East by the Westerly
right-of-way line of the "Pacific Coast Highway", excluding all property
known as the 'Date Shake Shack"; including all improvements thereon.
Said improvements include, but are not limited to, forty six (46) wood -
frame cottages plus garages, appurtenant structures, fences, decks,
stairs, walkways, entrance road, parking, vehicle bridge, a portion of Los
Trancos Creek, a portion of an existing bicycle trail, utility and drainage
improvements, and landscaping.
Limitations on Parcel-1 include a ten foot pedestrian easement which
must be maintained through the Los Trancos under crossing tunnel to
the beach. Additionally, Parcel-1 is listed on the National Register of
Historic Places as a historic district. Such status must be retained. The
portion of the existing bicycle trail which crosses the premises must also
be retained. Normal drainage easements exist at Los Trancos creek and
one other location near the southerly end of the parcel. Normal power
and natural gas easements are also located on this parcel. These
limitations are in addition to any limitations or restrictions which may be
imposed by any review agency during the planning and development
process.
( 1 of 3 ) EXHIBIT A
PARCEL - 2
• Approximately 16 acres as shown on the site plan, roughly bounded on
the North by a fence running along the edge of an existing golf course
from the inland edge of "Pacific Coast Highway" ( State Highway-1 )
easterly to a point near a golf course restroom building; then bounded on
the East by a fence line running Southerly along the same golf course to
a point on the South slope of Los Trancos creek; then bounded on the
South by a line running Southwesterly along the property line adjacent
to a housing development to a point along the Easterly right-of-way line
of "Pacifid Coast Highway'; then, bounded on the West by the Easterly
right-of-way line of "Pacific Coast Highway", including all improvements
thereon.
Said improvements include, but are not limited to a paved parking area
for 425 cars, a paved pedestrian path approximately 10 feet wide from
the parking area through a tunnel under crossing to Parcel-1, a paved
pedestrian path from the adjacent subdivision, developed landscaping
with an irrigation system, an entrance station, a public restroom
building, outdoor showers, fences, sidewalks, gates, an entrance road,
and drainage and utility improvements.
Limitations on Parcel-2 include, retaining the entrance station, providing
a minimum of 210 parking spaces for the general public, retaining the
existing restroom structure, maintaining public pedestrian access from
the parking lot through the tunnel. Retaining the existing access path to
the adjacent subdivision. Retaining existing natural habitat areas to the
South of the parking area. Known archeological resources in the vicinity
of the existing restroom must be preserved. Maintenance and emergency
access easements must be maintained to the adjacent property at two
locations. Normal easements for utilities also exist. These limitations are
in addition to any limitations or restrictions which may be imposed by
any review agency during the planning and development process.
0 (2 of 3 ) EXHIBIT A
PARKING
1-1 L
46 EXISTING COTTAGES
PARCEL-2
HIGHWAY UNDERCROSSING
Y -I.-, P�,C,Flc
MEAN HIGH ,DE
OCEAN
-DATE DATE SHAKE SHACK
-lEM HIGH ME
CRYSTAL COVE HISTORIC DISTRICT
EXHIBIT "A" (3 of 3)
PROPERTY DESCRIPTION AND SITE
PLAN
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�� CONCEPTUAL PLANS
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Jr CONCEPTUAL PTUAL PLANS
EXHIBIT B
2 of 2 )
• PLAN APPROVAL PROCEDURES
DEFINITIONS AND PROCEDURES FOR APPROVAL OF SCHEMATICS,
PRELIMINARY PLANS, AND WORKING DRAWINGS
A. General
1. All plans and exhibits shall be submitted with a transmittal
letter signed and dated by the submitter and indicating the
number of sheets and items being submitted and the purpose
for which they are being submitted.
2. All plans and exhibits shall be submitted on 24"x 36" standard
sheets with a title block indicating the following:
a. Name of project
b. Location of project
C. Name and address of consultant or submitter
d. Date of submittal
e. Number of sheets
f. A space 4"x6" directly above the title block for
approvals
g. The work "Schematics" or "Preliminaries" or "Working
Drawin;s" directly above the title block on each sheet
EXHIBIT C
(1 of 5)
• B. Schematic Design Phase
1. Definition: Schematics shall consist of:
a. A program statement indicating the major spaces and
their proposed uses and individual or special features or
support needed. A discussion of the style, features,
materials, or other items that will describe the structure
or. facility.
b. A site plan, with diagrammatic indications showing
relationships of Project Components. These components
shall include (but are not limited to) location, parking,
roads, topography, handicap access utilities, and other
major features.
C. Floor plans of all of the principal areas labeling the
major spaces and functions at 1/4" scale.
d. Two elevations showing major materials and features at
1/4" scale.
e. Statement of Probable Project Construction Cost.
C. Preliminary
Definition: Preliminaries shall consist of:
a. Outline specifications of all 16 of the C.S.I. sections (if
necessary) indicating materials, equipment, and special
features or items.
b. A floor plans drawn at 1/4" scale with dimensions and
notes that clearly show the scope of the work and
individual materials.
EXHIBIT C
(2 of 5)
• C. 'A section through the building showing the structural
system and the individual use of materials and finishes.
Note: More than one section is required if the building
or facility is complex enough to warrant additional
information.
d. Two elevations at 1/4" scale of the exterior of the
building or buildings indicating materials, heights, and
other related information.
e. A site plan showing location, orientation, utilities,
parking, roads, and other related information. Note: If
only interior work is to be accomplished, then a project
location map can be submitted for a site plan
requirement.
f. A further Statement of Probable construction Cost.
D. Working Drawings
. 1. Definition: Working drawings shall consist of:
a. Specifications for the work to be accomplished.
Specifications shall follow an organized format (such as
C.S.I.) and shall be a complete description of materials,
methods of installation, standards of craftsmanship, and
finishes required in the completed project.
b. Plans, site plans, elevations, sections, details, schedules,
and other common and necessary items for the
construction of the -proposed project. Plans and
elevations shall be drawn at a minimum scale of
1/4"=1'-0". Sections shall be drawn at a minimum scale
of 1/2"=1'-0". Details shall be drawn at a minimum
scale of 1-1/2"=1'-0". Mechanical, electrical, plumbing,
EXHIBIT C
(3 of 5)
• finish, door, and other schedules shall be complete and
include all information necessary for construction.
Final set of working drawings to include the following
sheets: (a) architectural: floor plan, elevations,
sections, water plumbing, sewer plumbing and
electrical; (b) structural: foundation plan and framing
layout; (c) civil, mechanical and electrical engineering:
grading, drainage and site utilities; (d) landscape
architectural:. planting and irrigation plans.
C. Working drawings shall reflect the content and scope of
the approved preliminary drawings. Changes in the
preliminary drawings that affect the materials, scope,
scale, size, or intent of the project or portions of the
project shall require resubmittal of preliminary plans
for approval.
d. Drawings shall be stamped and signed by a licensed
architect, civil engineer, landscape architect, and other
consultants as needed. It is the responsibility of the
submitter to obtain such permits as: Handicap
Accessibility, fire Marshal, State Police, and others as
necessary prior to final submittal.
E. Submittal Procedure (all phases)
1. Submit three (3) copies of the plans, specifications, and other
materials required in the prospectus to:
State of California
Department of Parks and Recreation
Planning, Acquisition and Environmental Design
Architecture Section
Attention: (Project Manager)
EXHIBIT C
Rof5)
• 2. The State will retain two (2) and return one (1) set marked in
the following manner:
a. "Approved" - The plans are approved as submitted.
b. "Revise and Resubmit" - The plans will be approved
when the changes noted are made and resubmitted to the
Project Manager. The approval date does not start until
they have been resubmitted and approved.
C. Submittals that are incomplete will be returned to the
submitter marked "Incomplete" without approval.
d. The review period for the State shall begin upon the
receipt of "Complete" project documents.
3. Written approval of each phase is required before proceeding
to the next phase.
is
State of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
• CONCESSIONAIRE'S MONTHLY REPORT OF OPERATION
Month of 19
Name and Address of Concessionaire Number and Name of State Park
Signature Date
Title
CUMULATIVE
GROSS
GROSS
PERCENTAGE
RECEIPTS
TO DATE
RATE
TYPE OF RECEIPT
(Less Sales Tax)
(Less Sales Tax)
DUE STATE
AMOUNT
Room Revenue
$
$
%
$
Food and Beverage
(Non Alcoholic)
$
$
%
$
Alcoholic Beverage
$
$
%
$
Parking Fees
$
$
%
$
Equipment Rentals
$
$
%
$
Gift Shop
Fitness Center
$
$
TOTALS $
Complete Following if Applicable:
1. The exact date operations were ceased:
$
Subtotal $
Adjustment
Total Due - Pay in Full With This Report $
2. The date you expect to resume operations:
•SUBMIT REPORT WITH REMITTANCE TO DISTRICT SUPERINTENDENT
"District Superintendent - Distribute Copies To: Accounting Office
Concessions/Reservations Office EXHIBIT D
ILI
CRYSTAL COVE
Environmental Program
DESIGN PHILOSOPHY
Crystal Cove Preservation Partners L.P. goal is to protect the historic
ambiance of Crystal Cove and maintain the health and vitality of the adjacent
terrestrial and marine environments. This is not a constraint but rather a guiding
principle which offers numerous possibilities for us as we restore structures, create
efficient energy, water and waste management strategies, educate our staff,
guests and public, develop interpretation programs and implement. research and
monitoring projects.
Infused into these programs is an intent to connect people to the natural
environment while they enjoy the amenities of the renovated cottages, restaurant
and other visitor attractions. We see the project serving as a model for responsible
development.
STRUCTURE RESTORATION
Environmentally responsible development implies a minimization of human
impact on nature. This is not limited to the footprint of a development but involves
the choice of building and furnishing materials, construction strategies, the re -use
of existing material where practical, waste minimization and the incorporation of
efficient systems in the completed structure.
At this time it is difficult to be precise as to what exactly should be done but
we offer a few options to indicate the direction which should be taken. We
understand that some limitations will be imposed due to the need to maintain the
California Vernacular architectural style and to maintain the cottages on the
National Register of Historic Places.
CONSTRUCTION STRATEGIES
Re -use of existing building materials will be an be an important objective.
• New materials will be produced in an environmentally sound manner or be made of
raw materials which have minimal impact on the environment such as organic
cotton.
(1 of 3) EXHIBIT'E
• The revitalization process should be designed in such a way as to minimize the
impact on the natural landscape by piling debris in areas which will be restored
anyway, creating swales and water impoundments to prevent winter runoff of
sediments into the ocean and stream.
EFFICIENT SYSTEMS
The retrofit process should incorporate energy efficient systems such as windows
which can be opened to facilitate natural air conditioning, wiring lights, fans, and
enable these systems to be automatically turned off when occupants are absent.
Refrigerators and other appliances should be of the lowest possible energy rating.
Energy efficient lights will be used.
Laundry facilities should use equipment which minimizes energy and water use.
When possible architecture and landscaping should work together to enable
passive solar heating in winter and cooling in summer.
Occupant recycling should be considered with space for recycling containers.
Low water use fixtures and toilets should be used.
Gas heating and cooking systems should be implemented.
ENVIRONMENTAL OPERATION
We will strive to minimize the production of waste in as many ways as are
possible.
We will favor the purchase of goods which minimize packaging materials.
Plastic, paper, glass and metal will be recycled.
We will use cloth napkins in the restaurant and in the cottages.
We will also insure that we do not release toxic products to the environment nor
take from the environment things which should be left untouched.
• No toxic pesticides (long-lived chlorinated hydrocarbons) will be used on site.
(2 of 3) EXHIBIT E
• All cleaning products will be non -toxic and biodegradable (soaps, cleaning sprays,
detergents, kitchen products, etc.).
40
No aerosols will be used which contain CFC or HCFC.
Nothing will be sold in the gift shop or visitor center which came from
endangered species.
All visitors and guests will be exposed to environmental guidelines which explain
why nothing should be collected from the land, shoreline or marine environment.
This respect for the natural resources of Crystal Cove will be extended to
respecting the resident population of dolphins (explained in further detail in our
Education and Monitoring document).
STAFF EDUCATION
It is essential that our environmental programs are operated properly. The
staff needs to understand our environmental ethic and know how to'operate and
maintain Crystal Cove according to this ethic.
1;:19,02j"745 (3 of 3) EXHIBIT E
Interpretation, Education and
Research/Monitoring Programs
INTERPRETATION AND EDUCATION
The California State Department of Parks and Recreation has a long and
successful history of interpreting natural and historic sites for the public. At
Crystal Cove we intend to continue this legacy and enhance the State's traditional
programs with additional, innovative experiences. Since there is already a Crystal
Cove interpretive group in existence, we will work closely with it to integrate our
ideas with the existing program and plans.
We will create at least one, and possibly two, interpretive centers. Our
objective would be to enhance visitors and guest appreciation for the geological
and human history (both ancient and modern) of the site as well as the terrestrial
and marine ecology of the region. Of course, a focus would be the recent human
history of Crystal Cove. This would be communicated to the visitors in the visitor
center(s) and to the guests in the cottages themselves. We will conduct regular
tours of the property which will showcase the historic renovation of the cottages.
Interpretation of the natural resources of Crystal Cove will involve dioramas
and three dimensional models of the most interesting subjects. For.the marine
ecosystem we would present the most important components such as kelp beds,
rocky intertidal and sandy bottom ecosystems with artwork and transparencies
featuring key organisms and videos of underwater life. A map and self -guided
underwater nature trail would be established. An ihtertidal walkway would enable
people to explore without destroying this sensitive zone. In addition to the
Department of Parks and Recreation staff, we will employ a marine biologist to
help with interpretation, research/monitoring and the environmental operation of
Crystal Cove.
An environmental code of conduct pamphlet will be posted publicly and in
the cottages. Collecting of shells and other sea life will be forbidden and all divers
will be shown guidelines on ecological diving by the marine biologist before
entering the water.
Educational brochures, videos, books and CD-ROMs will be available both for
people to enjoy and to purchase.
Our commitment to interpretation and education will extend beyond the
boundaries of Crystal Cove. In this endeavor we will follow the long tradition of
• the California Department of Parks and Recreation with outreach programs to the
community. We envision programs being established for school children, college
students and the public at large. School children would visit the Interpretative
rrrno:._ +s
(1 of 2) 'EXHIBIT F
• Center for demonstrations, lectures and discussions. We will work with the
Department of Parks and Recreation staff to develop programs and supplementary
materials which compliment existing curricula. A public lecture series will be
developed offering programs focusing on local as well as international subjects.
RESEARCH AND MONITORING
In order to effectively manage a landscape or ecosystem, it must be
understood. In the case of the marine environment, relatively little is known about
its biota, ecological dynamics and long-term cycles. We have an opportunity to
help improve our understanding of the marvelous coastal ecosystems just in front
of Crystal Cove. We envision programs focusing on dolphins, fish populations and
bottom community dynamics.
The Coastal Dolphin Survey Project has been monitoring the local population
of dolphins for a number of years. Dennis Kelly, of Orange Coast College who
heads the Project, has observed a phenomenon previously undescribed which is
presumed to be a birthing behavior. Unfortunately, there is no photographic or
video documentation of this phenomenon. We intend to establish observation
posts and enlist the public and guests in helping to monitor the population and
watch for this unique behavior. Focus on the dolphins and their behavior will alert
the public to the need to avoid disturbing the dolphins since we will prevent all
diving and swimming in the area where behavior is taking place.
As fish populations are threatened from pollution, habitat destruction and
overfishing, monitoring is needed to identify the threats and establish management
programs. Fish, many of which are high on the food chain, are indicators of
general ecosystem health and vitality. Thus, routine fish, population surveys are
important and are being organized on national and international scales. We intend
to establish Crystal Cove as a new site where the Great American Fish Count can
be held. With easy public access to the beach the local dive community can easily
participate in this national program.
Outside the restaurant, we will conduct stargazing sessions, utilizing a
computerized telescope similar to the one being used at the Post Ranch Inn.
I;.NM., 6j"A (2 of 2) EXHIBIT F