HomeMy WebLinkAbout23 - ExplorOceanCITY OF
F NEWPORT REACH
City Council Staff Report
November 25, 2014
Agenda Item No. 23
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, City Manager— (949) 644 -3002, dkiff @newportbeachca.gov
PREPARED BY: Dave Kiff
PHONE: (949) 644 -3002
TITLE: ExplorOcean Option to Lease City Parking Lot at Palm Street
ABSTRACT:
If approved, this agenda item would enable ExplorOcean to hold an option to lease City -owned property
known as the Palm Street Parking Lot on the Balboa Peninsula, with the expected intent of ExplorOcean
to pursue CEQA, funding, and other approvals for a parking structure at the location in conjunction with the
development of their adjacent facility.
RECOMMENDATION:
Authorize the Mayor and City Clerk to execute an Option to Ground Lease Agreement with ExplorOcean
for a future Ground Lease of the Palm Street parking lot at 209 Washington Street and 600 -608 East
Balboa Boulevard on the Balboa Peninsula.
FUNDING REQUIREMENTS:
The Option to Lease would generate $2,500.00 in a one -time payment to the City. If the option was
executed, the estimated current day revenue from the parking lot is about $198,000, less about $7,500 in
expenses, obligating a payment from ExplorOcean to the City of at least $190,500.00 per year.
DISCUSSION:
The City of Newport Beach ( "City ") owns and operates the Palm Street parking lot ( "Lot ") at 209
Washington Street and 600 -608 East Balboa Boulevard on the Balboa Peninsula. The Lot is depicted in
Attachment A. The City purchased land under what is about half of the Lot (209 Washington Street) for
$3.5 million in 2010 to provide parking that supports the revitalization of the Balboa Village area. The City
purchased the other half (600 -608 East Balboa Boulevard) about 20 years ago for $800,000 plus a
provision for a 20 -year, $1 a year lease to Wells Fargo to operate an ATM at the Lot. Today, the Lot
consists of 68 pay- station metered spaces, with 13 on- street parking spots (also metered) adjacent to the
Lot.
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The Lot generates about $198,000 in parking revenue annually. As the $1 a year ATM lease transitions to
a roughly $1,500 a month lease, the new ATM lease will generate an additional $18,000 annually. The Lot
costs the City about $7,500 a year to maintain.
The not - for - profit nautical and marine educational program called ExplorOcean ( "EO ") operates a one -
story 26,219- square foot building nearby, and has plans for a significant new facility in the future. The new
facility's construction and operation is subject to funding, permitting (including by the California Coastal
Commission), and community and environmental review and approval. According to EO, the new facility is
to be an "ocean literacy educational center" (for more information, see www.explorocean.org). A key
aspect of EO's success is access to significant amounts of parking. Today, EO has an on -site
subterranean parking area with about 55 parking spaces.
To accommodate growth for the new facility, EO has asked the City to consider offering an option to lease
the Lot to EO to help ensure that the new facility has the parking it needs. EO is interested in constructing
a parking structure on the Lot, and the attached Option to Lease and Ground Lease are written to
accommodate the parking structure, following appropriate community and environmental review. The City
itself is not bound by either the Option to Lease or the Ground Lease to approve EO's new facility or the
proposed parking structure.
Proposed Terms of the Option to Lease the Lot
Following discussions with City Council members,
proposed for an Option to Lease (for the full Option
Lot should the City Council see appropriate to do so:
City staff, and EO officials, the following terms are
to Ground Lease Agreement, see Attachment B) the
• Grant of Option /Term of Option: The City would grant EO the right to enter into the attached Ground
Lease with the City for the Lot from the execution date through December 31, 2021.
• Options on the Option: EO would have three one -year options to extend the term of the Option to Lease
(taking it through December 31, 2024), with a $2,500 fee per option extension.
• Compensation: The option price is $2,500, paid whether or not the Option is exercised. This amount is
creditable against rent should the Option be exercised.
• CEQA: EO is responsible for all CEQA work and approvals. An Environmental Impact Report (EIR) is
required. The City has the absolute discretion to approve or deny or modify any EO project, including the
expansion and any parking structure.
• Establishment of Fair Market Rental Value: At the time of the Ground Lease, the Fair Rental Value shall
be the amount that the City would otherwise derive from the Lot if available on the open market for use as
a surface parking lot (generally — see Section 4).
• The City will continue to operate the surface lot and receive all revenues associated therewith until
such time as the option is exercised.
Conditions to be Met before Option can be Exercised
• Final EIR is approved
• All governmental approvals and permits are in hand, including City and Coastal Commission
• EO demonstrates its financial capacity to proceed with its projects
Proposed Terms of the Ground Lease of the Lot
If the Option is exercised, the following is a summary of the Ground Lease associated with the Option to
Lease (see Exhibit 1 of Attachment B for the full Ground Lease):
• Term of the Ground Lease: 50 years
• Premises: The Palm Street Parking Lot.
• Improvements to be Constructed: A parking structure and ancillary structures, if permits, funding, and
approvals are obtained.
• Utility Removal: The City must relocate any utilities running through or under the Lot (at brief review, we
believe that there is an 8" sewer line and a 6" water line running through the lot where the alleyway used to
be). EO would reimburse the City for any re- location costs within 60 days.
• Establishment of Rent: See term under Option to Lease (Section 5.1)
• ATM Revenue: EO would receive any ATM revenue generated on the Lot. 23 -2
• Rent adjustment: Every five years, by CPI or 2.5 %, whichever is less.
• Fair Market Rental Adjustment: At Year 25, an appraisal -based adjustment would occur. The appraisal
would be based on the Lot in its current condition, not with the parking structure.
• Temporary Rent Adjustment: During construction of any parking structure, rent would be temporarily
reduced to $25,000 a year (generally — see Section 5.3)
• Ownership of Improvements. EO would hold title to anything EO constructed on the Lot, including a
parking structure (Section 3.3). At the termination of the Ground Lease the parking structure would pass
at no cost to the City.
• Public Parking: Following completion of the parking structure:
• EO may maintain at least 55 parking spaces in the parking structure for the exclusive use of EO;
• The remainder of the parking structure's spaces must be public spaces, including for members of the
public visiting EO; and
o Up to 12 times a year, all of the parking structure may be limited to private parking for EO's special
events.
• Right of First Refusal. In the event that the City wishes to sell the Lot, EO has the right of first refusal to
purchase the Lot at fair market value (subject to City's compliance with surplus property law).
• Construction of Improvements. EO must diligently pursue plans, regulatory approvals, and other permits
within 5 years of the Ground Lease effective date. EO must complete construction within 3 years of
starting construction.
• Repairs and Maintenance. EO must keep the property in good order, with more detail in Article 9.
Should the City Council approve the Option to Lease, the Option to Lease references and includes the
Ground Lease. The City Council therefore would be approving both documents at this time.
ENVIRONMENTAL REVIEW:
The Option to Lease is explicit that the City Council has not approved and is not bound to approve the final
EO project, or the proposed parking structure. The duty to go through the California Environmental Quality
Act (CEQA) to approve any project is EO's duty and will be performed at EO's cost. The Option to Lease
suggests that a full EIR will be required to consider and address the environmental impacts of the new EO
facility and the parking structure.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at
which the City Council considers the item). Additionally, we informed the Balboa Peninsula Point
Association and Central Newport Beach Association ( "Pier to Pier ") of this agenda item's consideration by
the City Council.
ATTACHMENTS:
Description
Attachment A - Diagram of Palm Street Parking Lot
Attachment B - Ootion to Ground Lease Agreement
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ATTACHMENT B
101 2 1 111 67i I
THIS OPTION TO GROUND LEASE AGREEMENT ( "Option Agreement ") is
made this day of October, 2014 by and between the City of Newport Beach, a
charter city and California municipal corporation ( "City ") and ExplorOcean, a California
non - profit corporation ( "EO ").
RECITALS
A. City is the owner of a public parking lot located generally between Palm
Street and Washington Street from Bay Avenue to Balboa Boulevard on the Balboa
Peninsula in the City of Newport Beach that is commonly referred to as the Palm Street
Parking Lot ( "Property ").
B. The Property is currently improved with a sixty -eight (68) space surface
public parking lot and an ATM kiosk, and is surrounded by thirteen (13) on- street
parking spaces.
C. EO is the owner of the real property located adjacent to the Property at
600 East Bay Avenue, Newport. Beach, California ( "EO's Property ").
D. EO has submitted to the City development applications to construct and
operate an expanded experiential ocean literacy center open to the general public on
EO's Property ( "EO Project "). Referenced development applications include a request
for General Plan Amendment, Coastal Land Use Plan. Amendment, Zone Change,
Planned Community Development Plan, Site Development Review, and Coastal
Development Permit ( "Entitlement Applications "), with a EO Project description.
E. EO and City have engaged in pre - entitlement lease discussions regarding
the development and use of the Property for construction of a multi -level parking
structure to be used by EO in connection with the Project. Such parking facility is
described in detail in the submitted project description and will be evaluated in the Initial
Study /Notice of Preparation and Environmental Impact Report ( "EIR ").
F. The parties desire to provide EO the right to lease the Property upon the
terms and conditions set forth in the Ground Lease (defined below) in the event that
certain conditions are satisfied, including, without limitation, compliance with the
California Environmental Quality Act ( "CEQA ") following a full Environmental Impact
Report ( "EIR ") certified by the City Council and all referenced project approvals by the
City and other governmental agencies, including the California Coastal Commission.
AGREEMENT
In consideration of the promises herein and for other good consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as follows.
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1. Grant of Option.
City hereby grants to EO the exclusive right and option (the "Option "),
exercisable at any time following the satisfaction of the conditions set forth in Section 3
below and on or prior to December 31, 2021 (said period being the "Option Term "), to
ground lease the Property more particularly described on Exhibit A to the form of
Ground Lease (the "Ground Lease ") which is attached hereto as Exhibit 1. Capitalized
terms used herein without definition shall have the respective meanings set forth
therefor in the Ground Lease. EO shall have three (3) options to extend the Option
Term for one (1) year each by notifying City in writing prior to the end of the then
expiring Option Term and submitting an extension payment of $2,500 per option
extension. Any extension payments shall be non - refundable and non - applicable
towards any rent under the Ground Lease.
2. Option Price and Payment.
The price (the "Option Price ") to be paid by EO to City for the Option is Two
Thousand Five Hundred Dollars ($2,500). The Option Price shall be due within thirty
(30) calendar days of the mutual execution of this Option Agreement ( "Effective Date').
The Option Price shall be paid in full whether or not the Option is exercised and EO's
obligation to pay the Option Price shall survive any termination of this Agreement. The
Option Price is non - refundable but shall be credited against the initial installment of rent
under the Ground Lease in the event the Option is exercised.
3. City's Absolute Right to Approve or Deny EO Proiect; Conditions to
Exercise: Exercise Notice.
To comply with "CEQA" and provide the public the opportunity to be informed of
the environmental impacts of the EO Project, including the proposed multi -level parking
structure on the Property, City shall retain absolute discretion to (i) determine to
approve or deny the EO Project application for legislative approvals and discretionary
permits pending before the City; (ii) make any such modification to the proposed
entitlements and the EO Project as the City may, in its sole discretion, determine to be
necessary to comply with CEQA, including mitigating significant adverse environmental
impacts of the EO Project (iii) select other feasible project or site alternatives or adopt
feasible mitigation measures to avoid or substantially lessen significant environmental
impacts; (iv) balance the benefits of the EO Project against any significant adverse
environmental impacts not mitigated to a level of insignificance, prior to taking final
action; and /or (v) determine not to proceed with the EO Project. This Option
Agreement, including any and all of its Exhibits, is not intended to become a
contractually binding ground lease unless and until: (A) the parties have identified,
negotiated, executed and delivered mutually acceptable mitigation measures, conditions
of approval (including statutory and /or customary indemnification provisions in favor of
City) or agreements based upon information produced from the CEQA environmental
review process or other public review and hearing processes; (B) EO has obtained all
applicable governmental approvals; and (C) EO has satisfied the following conditions:
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(a) An EIR identifying all environmental impacts of the EO Project,
related City- imposed mitigation measures and any necessary Statement of
Overriding Considerations must be certified by the City Council;
(b) All referenced land use entitlement application approvals and
discretionary permits obtained from all agencies (including running of any appeal
and statute of limitation periods) for the EO Project ( "Project Approval ");
(c) EO has provided reasonable proof of financial ability to proceed
with construction and completion of the EO Project, including the multi -level
parking structure on the Property;
(d) The Option Term, or any extension, shall not have expired.
Provided the foregoing conditions are satisfied, EO may exercise the Option by
providing written notice to City ( "Exercise Notice ").
4. Establishing Fair Rental Value.
The rental rate to be inserted into the Ground Lease will be the fair rental value of
the Property as of the date of Exercise Notice as determined in accordance with this
Section 4 ( "FRV"): FRV shall be equal to the rent which the City could derive from the
Property if it were then made available on the open market for leasing purposes for its
use as a surface parking lot with sixty -eight (68) spaces. The parties agree that the
above methodology for establishing the initial rent rate is based on the requirement
under the Ground Lease that EO may maintain up to fifty -five (55) parking spaces for its
exclusive use while keeping the remainder of the parking spaces available for general
public parking. The FRV shall be determined as follows:
(i) Within thirty (30) calendar days of receipt of the Exercise Notice, City
shall calculate and inform EO of City's determination of the FRV. If EO rejects the
FRV as calculated by City, EO shall inform City of its rejection within ten (10)
calendar days after EO's receipt of City's calculation, and City and EO shall
commence negotiations to agree upon the FRV. If EO accepts or fails to timely
reject City's calculation of the FRV, City's calculation of the FRV will be binding on
the parties. If City and EO are unable to reach agreement within thirty (30)
calendar days after City's receipt of EO's notice of rejection, then the FRV shall be
determined in accordance with (ii) below.
(ii) If City and EO are unable to reach agreement on the FRV within said thirty
(30) calendar day period, then within seven (7) calendar days, City and EO shall
each engage an independent MAI appraiser with at least five (5) years of
experience in appraising commercial leasehold properties in Orange County
( "Qualified Appraiser "). Each Qualified Appraiser shall determine the FRV within
sixty (60) calendar days of being engaged; such determination shall be in writing.
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If the higher of such estimates is not more than one hundred ten percent (110 %)
of the lower, then the FRV shall be the average of the two. Otherwise, the FRV
dispute shall be resolved in accordance with (iii) below. If one (1) of the parties
does not timely engage a Qualified Appraiser or thereafter does not timely
produce the required appraisal, then the appraisal submitted shall be binding on
the parties.
(iii) Within seven (7) calendar days after the exchange of appraisals under (ii)
above, the two Qualified Appraisers engaged under (ii) above shall select a third
Qualified Appraiser to be engaged by the parties. Unless required by law or court
order, neither party nor their respective Qualified Appraiser shall share the
previously provided appraisals or the FRV determined thereunder. The third
Qualified Appraiser shall promptly provide his /her written appraisal of what the FRV
should be to City and EO. In such event, the FRV to be used for the Ground Lease
shall be the FRV determined by the Qualified Appraiser engaged by a party under
(ii) above which is closest in absolute dollars to the third Qualified Appraiser's
appraisal; provided however that if the third Qualified Appraiser's determination is
within five percent (5 %) of the half -way point between the initial appraisals, then
the FRV shall be the average of the two initial appraisals.
By way of example, if the parties are not able to agree on the FRV and City's appraisal
of FRV is $150,000 while EO's appraisal of FRV is $100,000, then the third Qualified
Appraiser shall be engaged. In such event, the FRV would be determined as follows:
EO's FRV determination $100,000
City's FRV determination $150,000
Half -way point $125,000
5% of half -way point $ 6,250
If third Qualified Appraiser's FRV is:
Then FRV is:
- Less than $118,750
$100,000
- $118,750 to $131,250
$125,000
- More than $131,250
$150,000
If the third Qualified Appraiser believes that expert advice would materially assist
him /her, the third Qualified Appraiser may retain one or more qualified persons to
provide expert advice. The fees of the third Qualified Appraiser and any expert advice
shall be shared equally by the parties. Each party shall pay the fees of its respective
Qualified Appraiser.
Within thirty (30) calendar days of determining the FRV in accordance with this
Section 4, the parties shall execute and deliver to each other the Ground Lease in the
form attached hereto as Exhibit 1 (with the applicable FRV inserted therein).
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5. Title Matters: Operation of Property.
(a) Condition of Title. City represents that the Property is free and
clear of any monetary liens or other encumbrances that would or could adversely affect
EO's intended use of the Property and covenants to keep the title of the Property in the
same condition during the term of this Option Agreement. Nothing contained herein
shall restrict City from maintaining the existing (or entering into a new) ATM kiosk lease
provided that the same shall be cancellable within six (6) months of EO's exercise of the
Option.
(b) Operation of Property. During the term of this Option Agreement
City covenants to maintain the Property in good condition and repair (excepting casualty
and wear and tear) and to continue to use the Property as a parking lot substantially in
accordance with how the same is presently operated.
(c) Right of First Refusal. Subject to the City's obligation to first
comply with the Surplus Lands Act (Cal. Gov. Code §§ 54220, et seq.), during the term
of this Option Agreement, EO shall have the right of first refusal to purchase the
Property prior to the sale to any third party. Within two (2) business days of entering
into an agreement to sell the Property to a third party, City shall give EO written notice
of the same along with a copy of the agreement. For a period of sixty (60) calendar
days from receipt of said notice, EO shall have the option to purchase the Property on
the same terms and conditions, including the purchase price, set forth in the third party
agreement (provided that if non -cash consideration is involved, then EO shall have the
right to pay a cash equivalent of the same, and provided further that in no event will the
closing be less than ninety (90) calendar days from City's receipt of EO's election to
purchase). Failure of EO to timely exercise its option hereunder shall be deemed to be
EO's election to not purchase the Property (provided, however, that any rights to
acquire the Property under the Ground Lease shall not be affected by EO's election not
to acquire the Property under this Option Agreement).
6. Delivery of Information. As soon as practicable after the Effective Date
hereof, except as otherwise set forth, City shall have delivered or shall have caused to
be delivered to EO the following documents in City's or its agent's possession relating to
the Property:
(a) Copies of the most recent real property tax bills for the Property;
(b) Maintenance records and any identified capital improvement
programs listing identified replacement of any infrastructure on, under or across the
subject Property;
(c) Copies of any and all environmental reports, tests or studies for the
Property in City's or its agent's possession; and
(d) Copies of any documents, surveys or studies regarding the physical
characteristics of the Property.
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(e) A report by the City's public works department respecting the
current offsite utility infrastructure that would require relocation if the Project is
constructed; such report to show the age of the installation and useful life /replacement
date thereof.
7. Inspections by EO.
From and after the date hereof, EO and its agents, employees and
contractors shall be accorded access by City to the Property during normal business
hours for the purpose of making such investigations as EO deems prudent with respect
to the physical condition of the Property, including, but not limited to, engineering and
environmental tests. City shall cooperate fully to assist EO in completing such
inspection provided, however, that City shall not be obligated to incur any cost as a
result of such cooperation. EO agrees to hold City harmless from and against any loss,
cost, damage, claim or expense suffered by City and caused by EO's said
investigations, excluding the discovery of preexisting conditions and /or damages, claims
or liabilities arising from the negligence or willful misconduct of City and its contractors,
agents and employees. Prior to any inspections of the Property, EO shall coordinate
the specific time and place(s) of the inspection(s) with the City and the EO shall provide
City with a Certificate of Insurance from EO's insurance carrier in an amount of not less
than $1,000,000 naming City as an additional insured for any damages caused to City
as a result of EO's entry onto the Property exclusive of damages arising from the
discovery of preexisting conditions and damages arising or resulting from the
negligence or willful misconduct of City, its contractors, agents or employees. EO shall
restore the Property to its condition immediately prior to such investigations. EO's
obligation of indemnity hereunder shall survive the termination of this Agreement.
8. Representations and Warranties.
City and EO hereby represent to one another that each has full legal
power and authority to enter into and perform this Option Agreement in accordance with
its terms, and this Option Agreement constitutes the valid and binding obligation of such
party, enforceable in accordance with its terms, except as such enforcement may be
affected by bankruptcy, insolvency and other laws affecting the rights of creditors
generally. The execution, delivery and performance of this Option Agreement and all
documents in connection therewith are not in contravention of or in conflict with any
deed of trust, agreement or undertaking to which such party is a party or by which it
may be bound or affected.
9. Assignment of Option. EO may not assign the Option at any time without
the prior written consent of City, which consent may be withheld in City's sole and
unfettered discretion, provided that EO may assign the Option to an affiliate, provided
further that no such assignment shall relieve EO of its obligations hereunder. City may
not assign this Option Agreement at any time without the prior written consent of EO.
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10. Miscellaneous Provisions.
(a) This Option Agreement shall be binding on, and shall inure to the
benefit of, the parties to it, and their respective heirs, legal representatives, successors,
and assigns.
(b) All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, or neuter and to the singular or plural as the identity of the
person or persons, firm or firms, or corporation or corporations referred to may require.
(c) This Option Agreement is the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties
hereto with respect thereto. No claim of waiver, modification, consent or acquiescence
with respect to any of the provisions of this Option Agreement shall be made against
either party, except on the basis of a written instrument executed by or on behalf of
such party. No waiver of any provision of this Option Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver.
(d) This Option Agreement is to be governed by and construed in
accordance with the laws of the State of California.
(e) The heading of the several sections of this Option Agreement are
inserted solely for convenience of reference and are not a part of and are not intended
to govern, limit or aid in the construction or interpretation of any term or provision
hereof.
(f) All notices, requests, demands, and other communications required.
or permitted to be given under this Agreement shall be given in writing (at the addresses
set forth below) by any of the following means: (i) personal service; (ii) facsimile
transmission (if confirmed by sending a copy by any other method specified herein); (iii)
delivery by any reputable overnight courier service; or (iv) registered or certified mail,
postage prepaid, return receipt requested. Any notice, demand or request sent pursuant
to either (i), or (ii) hereof shall be deemed received upon such personal service or upon
dispatch by electronic means and if sent pursuant to (iii) hereof shall be deemed
received one (1) Business Day following delivery to such courier service and if sent
pursuant to (iv) hereof shall be deemed received upon actual receipt thereof.
To City:
City of Newport Beach
100 Civic Center Drive
P.O. Box 1768
Newport Beach, California 92658
Attn: City Manager
Telephone No. 949.644 -3001
401xi3
ExplorOcean
600 East Bay Avenue
Irvine, California 92660
Attn: President
Telephone No. 949.675.8915
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Such addresses may be changed by notice to the other parties given in the same
manner as provided above. For used herein, the term "Business Day" shall mean a day
on which City is open for business to the general public.
(g) If any provision of this Option Agreement or the application thereof
to any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Option Agreement and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
(h) Each party hereto agrees to do all acts and things and to make,
execute and deliver such written instruments as shall be reasonably necessary to carry
out the terms and provisions of this Option Agreement. This covenant of further
assurances shall survive Closing.
(i) Nothing in this Option Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Option Agreement
on any persons other than the parties hereto and their respective heirs, legal
representatives, successors, and assigns, nor is anything in this Option Agreement
intended to relieve or discharge the obligation or liability of any third persons to any
party to this Option Agreement, nor shall any provision give any third persons any right
of subrogation or action over against any party to this Option Agreement.
(j) This Option Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. All parties need not execute the same original,
provided that each of them executes an original.
(k) Each of the parties shall pay all costs and expenses incurred or to
be incurred by him or her in negotiating and preparing this Option Agreement and the
other agreements to be executed in carrying out the transactions contemplated hereby
and thereby. In the event of a dispute under this Option Agreement, the prevailing party
shall not be entitled to recover its costs and expense incurred in such dispute, including,
without limitation, attorneys' fees and court costs.
(I) The parties agree that each party and its counsel have had the
opportunity to review and revise this Option Agreement and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party shall not apply
in the interpretation of this Option Agreement or any subsequent amendment hereto or
thereto or exhibits herein or therein.
(m) The parties shall not record this Option Agreement in the Official
Records of Orange County, however, the parties shall record the attached short form
memorandum of this Option Agreement, attached hereto as Exhibit 2, within thirty (30)
calendar days of request from one (1) of the parties.
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(n) To the fullest extent permitted by law, and except to the extent
resulting from the negligent acts by the City, its City Council, its boards and
commissions, officials, officers, employees and'agents, EO shall indemnify, defend and
hold harmless City, its City Council, its boards and commissions, officials, officers,
employees, and agents from and against any and all claims, demands, obligations,
damages, actions, causes of action, CEQA challenges, suits, losses, judgments, fines,
penalties, liabilities, costs and expenses (including without limitation, attorney's fees,
disbursements and court costs) of every kind and nature whatsoever which may arise
from or in any manner relate (directly or indirectly) to City's approval of this Option
Agreement, the Ground Lease, EO's use of the Property, or the EO Project. This
indemnification shall include, but not be limited to, damages awarded against the City, if
any, costs of suit, attorneys' fees, and other expenses incurred in connection with such
claim, action, causes of action, suit or proceeding whether incurred by EO, City, and /or
the parties initiating or bringing such proceeding. EO shall indemnify the City for all of
City's costs, attorneys' fees, and damages which City incurs in enforcing the
indemnification provisions set forth in this condition. EO shall pay to the City upon
demand any amount owed to the City pursuant to the indemnification requirements
prescribed in this condition.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Option Agreement effective as of the day and date first above written.
"EO"
EXPLOROCEAN
a Californi profit corp
T m Pollack
C
President
"CITY"
CITY OF NEWPORT BEACH
a California municipal corporation
Z
Approved as to form:
THE CIT TjTORNEY'S OFFICE
I�
Aaron C. Harp
City Attorney
Attest:
Leilani I. Brown
City Clerk
Rush N. Hill, II
Mayor
Attachments: Exhibit 1 -Form of Ground Lease
Exhibit 2 -Short Form Memorandum of Option Agreement
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EXHIBIT 1
Form of Ground Lease
[Attached]
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RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
City Clerk's Office
City of Newport Beach
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92658 -8915
Space above this line for Recorder's use only.
Exempt Recording Request per Government Code Section 27383
GROUND LEASE
BY AND BETWEEN
THE CITY OF NEWPORT BEACH
AND
EXPLOROCEAN
rxacy
GROUND LEASE BY AND BETWEEN
THE CITY OF NEWPORT BEACH AND EXPLOROCEAN
This Ground Lease ( "Lease "), entered into as of 20_ ( "Effective
Date ") by and between the City of Newport Beach, a charter city and municipal
corporation ( "Lessor" or "City ") and ExplorOcean, a nonprofit California Corporation
( "Lessee" or "EO "). The Lessor and Lessee may be individually referred to as "Party"
and collectively as the "Parties ".
RECITALS
A. Lessor is the owner of real property bounded by East Bay Avenue, Palm
Street, Balboa Boulevard and Washington Street in the Balboa Village
area of the City of Newport Beach, commonly known as Palm Street
Parking Lot and more particularly described and depicted in the attached
Exhibit A ( "Property ").
B. Lessee is a nonprofit corporation organized pursuant to and in compliance
with the provisions of California law, and is presently in good standing.
C. Lessee is owner of certain real property adjacent to the Property and more
particularly described and depicted in the attached Exhibit B ( "EO
Property ").
D. Lessee desires to redevelop, and has received all necessary permits and
approvals for the redevelopment of, the EO Property with an ocean
literacy educational center ( "Project "). As part of the Project, Lessee
intends to construct a multi -level parking structure on the Property
( "Parking Structure ").
E. The City and Lessee desire to enter into this Lease to set forth terms
under which Lessee will lease the Property for the purposes of
constructing the Parking Structure and related improvements and
operating the same in connection with the ocean literacy educational
center.
F. The City Council of the City of Newport Beach ( "City Council ") has
determined that this Lease, Lessee's construction of the Project and
Lessee's long term use of the Property in connection with Lessee's ocean
literacy education center is consistent with the City Charter, the Newport
Beach General Plan, the City's Municipal Code and all other applicable
Federal, State and local laws.
PANNIVJ
G. In contemplation of this Lease, City and Lessee have entered into that
certain Option to Ground Lease Agreement dated October _, 2014
( "Option Agreement ") respecting Lessee's lease of the Property. By
entering into this Lease, Lessee and City agree that the conditions to
exercising the Option (as defined in the Option Agreement) have been
satisfied or waived and that Lessee has duly exercised the Option. From
and after the Effective Date, this Lease shall control the parties' rights and
obligations with respect to the Property and the Option Agreement shall
have no further force or effect (excepting any obligations that are intended
to survive the expiration or termination of the Option Agreement).
H. Pursuant to City Council Policy F -7, an open bid process was not utilized
for this Lease because the Lessee's use of the Property serves to promote
goals of the City related to providing and improving off - street parking
opportunities in Balboa Village.
NOW, THEREFORE, in consideration of the terms, mutual covenants and
conditions in this Lease, Lessor and Lessee hereby agree as follows:
ARTICLE 1 SUBJECT OF LEASE
1.1 Purpose of the Lease
The purpose of this Lease is to provide for the lease and use of the Property by
Lessee as a parking lot and Parking Structure in connection with the Lessee's
operation of an ocean literacy educational center on the EO Property.
1.2 The Property
The Property includes the land described and depicted in Exhibit A. During the
term of this Lease, Lessee shall install and construct improvements on the
Property as described in Exhibit C ( "Improvements ") pursuant to the terms of
this Lease.
1.3 Lessor
Lessor is the City of Newport Beach, a Charter City and municipal corporation.
The principal office of Lessor is located at City Hall, 100 Civic Center Drive,
Newport Beach, California 92660. For the purposes of this Lease, the term
"Lessor" shall include all officers, employees, volunteers, agents or
representatives of Lessor.
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1.4 Lessee
Lessee is ExplorOcean, a California non - profit corporation. The principal office
of Lessee is 600 East Bay Avenue, Newport Beach, California 92661. For the
purposes of this Lease, the term "Lessee" shall include all officers, employees,
volunteers, agents or representatives of Lessor.
ARTICLE 2 LEASE OF PROPERTY
2.1 Lease of Property
Lessor leases the Property to Lessee, and Lessee leases the Property from
Lessor for the Term (as defined in Article 4 below) and pursuant to the terms,
provisions, covenants and conditions of this Lease. Lessor reserves all rights to
substances below the surface of the Property and the right to produce or take
any of those substances so long as the activities do not impair or interfere with
the purpose of this Lease.
2.2 Condition of Title
The Property is leased subject to the permitted exceptions listed in Exhibit D and
incorporated herein by. reference, and other matters affecting title which do not
inhibit, prevent or impair the purpose of this Lease.
ARTICLE 3 POSSESSION OF PROPERTY; RIGHT OF FIRST REFUSAL
3.1 Quiet Eniovment
Lessee shall be entitled to peaceably and quietly use and enjoy the Property for
the Term, without hindrance or interruption by Lessor except for the exercise of
Lessor's rights pursuant to this Lease. Lessor shall not be liable in damages or
otherwise, because of the interruption or termination of any service provided by
Lessor (such as, water or sewer service), or a termination, interruption or
disturbance of any service attributable to any act or omission of Lessee.
3.2 Condition of Property
3.2.1 General Condition. Prior to date upon which Lessee takes possession of
the Property (the "Date of Possession "), Lessee will investigate and
research all physical conditions of the Property that could affect Lessee's
use, enjoyment and improvement of the Property including soil conditions,
the condition of structures, and the condition of utilities. Lessee shall
indemnify, defend, and hold harmless Lessor from and against all claims,
liabilities, or damages and including expert witness fees and reasonable
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attorney fees and costs, arising out of any such testing, inspection, or
investigatory activity on the Property by Lessee. The Date of Possession
shall be the earlier of (1) the date of the award of a construction contract
for improvements on the Property; or (2) the date of receipt by Lessee of a
surveyor certification from Lessor as the rough grade of the Property.
3.2.2 Relocation of Utilities. Prior to the Date of Possession, City shall remove
and relocate any existing utilities running through or under the Property.
Lessee agrees to reimburse City for any and all costs associated with
such relocation. Lessee shall reimburse City's costs within sixty (60)
calendar days of City's written demand to Lessee for reimbursement of
costs.
3.3 'Ownership of Improvements
During the Term of this Lease, Lessee shall hold title to the improvements
constructed and installed on the Property by Lessee, including the Parking
Structure (collectively, "Improvements ") and to all personal property necessary or
convenient to Lessee's operation or maintenance of the Property, such as
fixtures, machinery, lighting, staging, merchandise, trade fixtures (collectively,
"Equipment ") that have been constructed or placed on the Property. Title to the
Equipment shall remain with the Lessee at the expiration or termination of the
Lease as provided in Section 3.4, title to the Improvements shall pass, at no cost,
to the City.
3.4 Surrender of Property
3.4.1 On expiration of the Term or termination of this Lease, Lessee shall
peaceably and quietly leave and surrender the Property to Lessor
and leave all Improvements in good order, condition and repair,
reasonable wear and tear and obsolescence excepted and free and
clear of all liens and encumbrances other than those, if any,
permitted hereby or otherwise created or consented to in writing by
City and any leasehold mortgage permitted in writing by City.
Lessee shall deliver to Lessor all contracts, agreements, books,
records, and other documents related to the operation,
maintenance or use of the Property and Improvements.
3.4.2 Upon the expiration of the Term or termination of this Lease and
within ten (10) calendar days of a written request by Lessor, or
reasonably necessary and as agreed to by Lessor, Lessee shall
immediately remove the Equipment from the Property and deliver to
Lessor the following:
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(i) Documents reasonably necessary for Lessor's ownership of the
Property to be clearly reflected of record.
(ii) Title insurance, surety bond, or other assurances reasonably
acceptable to Lessor insuring Lessor against all claims and liens
against the Property other than those incurred by Lessor or
accepted by Lessor in writing.
(iii) All plans, surveys, permits and other documents relating to the
Property as may be in the possession of Lessee at the time.
ARTICLE 4 TERM
The Term of this Lease ( "Term ") shall commence on the Date of Possession and shall
expire on the fiftieth (50 "') anniversary subject to early termination provided herein.
ARTICLE 5 RENT /CONSIDERATION
5.1 Money Payable by Lessee
Lessee shall pay ground rent to Lessor during the term of this Lease. The initial
annual ground rent shall be flnsert FRV determined under Option Agreement as
of the date of Lessee's exercise of the Option? Dollars ($ ). Thereafter, ground
rent shall be increased every five (5) years by the cumulative percentage increase in the
Consumer Price Index (All Urban Consumers — Los Angeles, Anaheim, Riverside — All
items) from the Effective Date or the last ground rent change date, as applicable;
provided, however, that in no event shall such increase be less than One Percent (1 %)
per year or greater than Two and One Half Percent (2.5 %) per year.
5.1.1 Fair Market Adjustment of Ground Rent. Upon the twenty -fifth (25th)
anniversary of the Effective Date ( "Market Adjustment Date "), the ground
rent shall be increased or decreased, as the case may be, based upon the
determination of the fair market rental value ( "FRV") of the Property. FRV
shall be equal to the rent which the City could derive from the Property if it
were then made available on the open market for leasing purposes for its
use as a surface parking lot with sixty -eight (68) spaces (i.e., the
condition of the Property as of the commencement of this Lease). The
parties agree that the above methodology for establishing the initial rent
rate is based on the requirement under Section 6.1.2 below that Lessee
will maintain parking spaces available for general public parking. The FRV
shall be determined as follows:
(i) At least one hundred eighty (180) calendar days prior to the adjustment
date, Lessor shall calculate FRV and inform Lessee of Lessor's
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determination of the FRV. If Lessee rejects the FRV as calculated by
Lessor, Lessee shall inform Lessor of its rejection, in writing, within ten
(10) calendar days after Lessee's receipt of Lessor's calculation, and
Lessor and Lessee shall commence negotiations to agree upon the FRV.
If Lessee accepts or fails to timely reject Lessor's calculation of the FRV,
Lessor's calculation of the FRV will be binding on the parties. If Lessor
and Lessee are unable to reach agreement within thirty (30) calendar days
after Lessor's receipt of Lessee's notice of rejection, then the FRV shall be
determined in accordance with (ii) below.
(ii) If Lessor and Lessee are unable to reach agreement on the FRV within
said thirty (30) calendar day period, then within seven (7) calendar days,
Lessor and Lessee shall each engage an independent MAI appraiser with
at least five (5) years of experience in appraising commercial leasehold
properties in Orange County ( "Qualified Appraiser "). Each Qualified
Appraiser shall determine the FRV within sixty (60) calendar days of being
engaged; such determination shall be in writing. If the higher of such
estimates is not more than one hundred ten percent (110 %) of the lower,
then the FRV shall be the average of the two (2). Otherwise, the FRV
dispute shall be resolved in accordance with (iii) below. If one (1) of the
Parties does not timely engage a Qualified Appraiser or thereafter does
not timely produce the required appraisal, then the appraisal submitted
shall be binding on the Parties.
(iii) Within seven (7) calendar days after the exchange of appraisals under
(ii) above, the two (2) Qualified Appraisers engaged under (ii) above shall
select a third (3rd) Qualified Appraiser to be engaged by the Parties.
Unless required by law or court order, neither Party nor their respective
Qualified Appraiser shall share the previously provided appraisals or the
FRV determined thereunder, unless required by law or court order. The
third (3rd) Qualified Appraiser shall promptly provide his /her written
appraisal of what the FRV should be to Lessor and Lessee. In such
event, the FRV to be used for the Ground Lease shall be the FRV
determined by the Qualified Appraiser engaged by a Party under (ii) above
which is closest in absolute dollars to the third (3rd) Qualified Appraiser's
appraisal; provided however that if the third (3rd) Qualified Appraiser's
determination is within five percent (5 %) of the half -way point between the
initial appraisals, then the FRV shall be the average of the two (2) initial
appraisals.
By way of example, if the Parties are not able to agree on the FRV and
Lessor's appraisal of FRV is $150,000 while Lessee's appraisal of FRV is
$100,000, then the third (3rd) Qualified Appraiser shall be engaged. In
such event, the FRV would be determined as follows:
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Lessee's FRV determination $100,000
Lessor's FRV determination $150,000
Half -way point $125,000
5% of half -way point $ 6,250
If third Qualified Appraiser's FRV is:
Then FRV is:
- Less than $118,750
$100,000
- $118,750 to $131,250
$125,000
- More than $131,250
$150,000
If the third (P) Qualified Appraiser believes that expert advice would
materially assist him /her, the third (3rd) Qualified Appraiser may retain one
(1) or more qualified persons to provide expert advice. The fees of the
third (3`d) Qualified Appraiser and any expert advice shall be shared
equally by the Parties. Each Party shall pay the fees of its respective
Qualified Appraiser.
5.2 Payment
At Lessee's request, the ground rent payments shall be seasonally adjusted such
that ground rent payments from November through April shall be fifty percent (50 %)
lower and from May through October shall be fifty percent (50 %) higher than the current
year's base ground rent divided by twelve (12).
5.2.1 Place for Payment of Ground Rent. All payments of ground rent shall be
made in lawful money of the United States of America and shall be paid to
Lessor in person or by United States' mail, or overnight mail service, at the
Cashier's Office located at 100 Civic Center Drive, Newport Beach, CA
92660, or to such other address as Lessor may from time -to -time
designate in writing to Lessee. If requested by Lessor, Lessee shall make
payments electronically (at ww.newportbeachca.gov) or by wire transfer
(at Lessee's cost). Lessee' assumes all risk of loss and responsibility for
late charges and delinquency rates if payments are not timely received by
Lessor regardless of the method of transmittal.
5.2.2 Late Charges and Delinquency Rates. A five percent (5 %) late charge
shall be added to all payments due but not received by Lessor with ten
(10) calendar days following the due date, unless another due date is
specified in this Agreement. In addition, all unpaid amounts shall accrue
at a delinquency rate of one percent (1 %) per month or any portion of a
month until paid in full. Lessor and Lessee hereby agree that such late
charges and delinquency rates represent a fair and reasonable estimate of
the costs Lessor will incur by Lessee's late payment, including, without
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limitation, lost opportunities and the cost of servicing the delinquent
account. Lessee agrees that such late charges and delinquency rates are
Additional Rent (defined below) and are not interest. Acceptance of such
late charges and delinquency rates (and /or any portion of the overdue
payment) by Lessor does not constitute a waiver of Lessee's default with
respect to such overdue payment, or prevent Lessor from exercising any
of the other rights and remedies granted in this Agreement.
5.2.3 Additional Rent. Lessee shall pay as Additional Rent for the Property,
within ten (10) calendar days of Lessor's demand therefore (unless a
different time for payment is expressly provided in this Agreement), all
other amounts required by this Agreement, in addition to ground rent.
Additional Rent does not reduce or offset Lessee's obligations to pay
ground rent.
5.3 Temporary Reduction in Ground Rent
Ground rent shall be reduced to twenty -five thousand dollars ($25,000) annually
upon the issuance of a grading permit for the Parking Structure until the sooner to occur
of: (i) completion of construction of the Parking Structure, or (ii) two (2) years from
issuance of a grading permit for the Parking Structure. Notwithstanding the preceding,
the parties intend that the Project be a private development project and not a public
works project, as such terms are used in and interpreted under California Labor Code
Section 1720. Accordingly, any amount of ground rent that would otherwise be abated
under this Section 5.3 that is in excess of a de minimus amount of the cost of the
Project (as interpreted under California Labor Code Section 1720(c)(3)) will not be
reduced hereunder.
5.4 Determination of Ground Rent
The parties acknowledge and confirm that the determination of ground rent was
made based on the results of two (2) or more appraisals of the fair rental value from
independent MAI appraisers pursuant to the terms of the Option Agreement.
ARTICLE 6 USE OF PROPERTY
6.1 Uses
6.1.1 Permitted Uses. The Property shall be used primarily for the operation
and maintenance of a Parking Structure for the Project, together with
reasonable ancillary and occasional uses consistent with the approved
activities on the EO Property (including signage for the Project and ATM)
(hereafter referred to as "Permitted Uses "). Subject to compliance with
applicable laws, Lessee shall have the right to adopt and administer
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reasonable rules and restrictions applicable to the Parking Structure,
including, without limitation, establishing operating hours, rates,
validations and other parking accommodations.
6.1.2 Public Parking. Following completion of the Parking Structure, Lessee
may maintain fifty -five (55) parking spaces within the Parking Structure for
its exclusive use, representing the total amount of parking spaces
currently available in Lessee's existing subterranean parking facility. The
remainder of the parking spaces in the Parking Structure shall be available
for use by the general public. Notwithstanding the preceding, Lessee shall
have the right to temporarily restrict public parking in all or a portion of the
Parking Structure for up to twelve (12) special events a year (subject to
Lessee obtaining all required City permits and approvals, in which case
the fees applicable thereto shall not reflect any compensation to Lessor on
account of the temporary loss of public parking within the Parking
Structure).
6.1.3 Prohibited Uses. Lessee shall not sell or permit any use that is
inconsistent with or prohibited by any City ordinance, regulation or policy
including, but not limited to, the City's Municipal Code, General Plan and
Coastal Land Use Plan. Lessee shall not sell or permit to be kept, used,
displayed or sold in or about the Property (a) pornographic or sexually
explicit books, magazines, literature, films or other printed material, sexual
paraphernalia, or other material that is considered lewd, obscene or
licentious, (b) any article which may be prohibited by standard forms of fire
insurance policies, or (c) any alcoholic beverages unless in accordance
with the necessary permits and approvals. Lessee shall not use or permit
the use of the Property in any manner that (a) creates a nuisance or (b)
violates any law. Lessee shall not offer entertainment or broadcast music
or entertainment through exterior speakers or other form of transmission
without the written approval of City. In this event, Lessee shall obtain all
required City permits and approvals.
6.1.4 Si ns. Lessee shall not place or permit to be placed any sign that is not in
compliance with the regulations included in the Newport Beach Municipal
Code pertaining to signs upon the exterior or in the windows of the
Property.
Change of Use
Lessee shall not use, or conduct any activities on, the Property except the
Permitted Uses without the prior written consent of Lessor, which consent may
be withheld in Lessor's sole and absolute discretion.
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6.3 Compliance with Laws
Lessee shall not use the Property in a manner liable to create a public or private
nuisance or liable to cause structural injury to the Property or the Improvements.
Lessee shall not conduct any operation that would invalidate any insurance
coverage required of Lessee. Lessee shall comply with all applicable local, state
and federal laws in the construction of Improvements, maintenance, or operation
of the Property. Lessee shall obtain any required permit(s) from the City and any
required approvals or permits from state or federal agencies.
6.4 Zoning and Planning
Lessee shall be entitled to repair, alter, and modify the structures and
improvements on the Property in accordance with the provisions of the Zoning
Code provided Lessee complies with the provisions of this Lease. Approvals
granted by Lessor pursuant to Article 8 of this Lease shall not substitute for land
use and development approvals and permits required by the Newport Beach
Municipal Code.
6.5 Nondiscrimination
Lessee shall not discriminate against any person or group of persons, on account
of race, color, creed, religion, sex, marital status, national origin, or ancestry, in
the renovation, operation, enjoyment or occupancy of the Property.
ARTICLE 7 RIGHT OF FIRST REFUSAL
Subject to the City's obligation to first comply with the Surplus Lands Act (Cal. Gov.
Code §§ 54220, et seq.), Lessee shall have the right of first refusal to purchase the
Property prior to the sale to any third party. Within two (2) business days of entering
into an agreement to sell the Property to a third party, Lessor shall give Lessee written
notice of the same along with a copy of the agreement. For a period of sixty (60)
calendar days from receipt of said notice; Lessee shall the option to purchase the
Property on the same terms and conditions, including the purchase price, set forth in the
third party agreement (provided that if non -cash consideration is involved, then Lessee
shall have the right to pay a cash equivalent of the same, and provided further that in no
event will the closing be less than ninety (90) calendar days from Lessor's receipt of
Lessee's election to purchase). Failure of Lessee to timely exercise its option
hereunder shall be deemed to be Lessee's election to not purchase the Property.
ARTICLE 8 REQUIRED IMPROVEMENTS
8.1 Lessee's Obligations
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This Lease contemplates that Lessee shall cause construction of the
Improvements on the Property so that it may be used by Lessee in connection
with its operations on the EO Property ( "Required Improvements "). Lessee's
construction of the Improvements shall be as generally described in Exhibit C
and as identified in the Conceptual Design Plans dated , included
in Exhibit E (the "Conceptual Design Plans "). The Conceptual Design Plans
shall be consistent with the overall design of the Project and all regulatory
approvals granted by City and any other regulatory agency and all plans
approved by the City for both the Property and the EO Property. Any
amendment or modification to the Conceptual Design Plans requires the prior
written approval of the Lessor, which approval shall not be unreasonably withheld
8.2 Design Development Plans
Lessee shall prepare, and submit for the Project Manager's (defined in Section
8.6.2) approval Design Development Plans that shall be based on and generally
consistent with the Conceptual Design Plans.
8.3 Final Construction Plans Drawings and Related Documents
Subsequent to the Project Manager's approval of the Design Development Plans,
Lessee shall submit final construction plans, drawings and related documents
( "Final Construction Plans ") to the Project Manager for review and approval.
Final Construction Plans shall be based on, and generally consistent with, and
will detail the information provided in the Design Development Plans. The Final
Construction Plans shall include all interior and exterior design details.
8.4 Building Permits
Lessee will apply for all necessary building permits from Lessor. Lessee shall
also obtain all permits or approvals required of any other governmental entity
having jurisdiction over the Property or any modification to the Property. In the
event that another governmental agency with jurisdiction over the Property
requires modification of the Design Development Plans or Final Construction
Plans, the modifications shall be submitted to the Project Manager for review and
approval. City shall not unreasonably withhold or delay the issuance of building
permits.
8.5 Schedule for Required Improvements
8.5.1 Regulatory Approvals. Lessee shall submit plans, diligently pursue
their approval, and use reasonable efforts to obtain all regulatory
approvals necessary for the construction of Improvements within
five (5) years of the Effective Date.
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8.5.2 Construction of Improvements. Lessee shall complete construction
of the Improvements no later than three (3) years from Lessee's
commencement of construction. To the extent that any City
property including, but not limited to, the Property, public streets
and sidewalks, is damaged by Lessee during Lessee's construction
of the Improvements, Lessee agrees to repair all direct and related
damage at its sole cost and expense to like new condition.
8.6 General Requirements
8.6.1 The Improvements shall be constructed in compliance with all
applicable laws and the provisions of this Lease that regulate, or
relate to, the construction, alteration or maintenance of
improvements on the Property. Lessee acknowledges that the
reviews and approvals required by this article are proprietary
activities related to Lessor's ownership of the Property and are
separate and distinct from any review or approval conducted by the
City in its municipal capacity. Lessee also acknowledges that any
approval given pursuant to this article does not bind Lessor when
acting in its municipal charter city capacity. Consistent with this
Lease, however, the Lessor and City agree to support the Lessee's
efforts to obtain all necessary regulatory approvals and permits
required for the full implementation of the Lease. In the event that
Lessee is unable to obtain all necessary approvals and permits, or
is subject to conditions that limit Lessee's ability to implement the
Lease, the Parties agree to meet and discuss in good faith the
impacts of such event(s) and negotiate an amendment of this
Lease. If the Parties are unable to negotiate an amendment to the
Lease within ninety (90) calendar days of meeting and conferring
on the events, Lessee or Lessor may terminate this Lease.
8.6.2 Lessor designates the City Manager or his /her designee as the
"Project Manager" to review, and approve or disapprove the Design
Development Plans and the Final Construction Plans, or any
changes thereto. Any disapprovals shall state in writing the
reasons therefore and changes requested by the Project Manager.
Such reasons and such changes shall be consistent with Exhibit C
and Exhibit E and any items previously approved or deemed
approved by Lessor, in its proprietary role, or by City in its
municipal capacity.
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8.7 Extensions
Lessee may request, and the Lessor may, but is not required to, grant, an
extension with respect to any of the deadlines specified in this Lease. Lessor
may not unreasonably withhold its consent for an extension provided that Lessee
is proceeding in good faith and a reasonable manner as determined by Lessor in
its sole and absolute discretion. All requests for extensions shall be submitted to
the Project Manager for review and a determination whether to grant or deny the
request. The Project Manager's determination shall be final. Extensions
authorized by this Section are in addition to any extension resulting from force
majeu re.
ARTICLE 9 REPAIRS AND MAINTENANCE
Lessee shall, at Lessee's expense, perform all routine and recurring maintenance
necessary to keep the Property in good order and condition and shall exercise due
diligence to protect the Property from damage and in accordance with the standards in
this Lease. Lessee shall, at a minimum perform the following: (i) the maintenance of the
exterior surfaces of the Parking Structure (including painting or other protective
treatment of the exterior wall of the buildings); (ii) the maintenance of electrical systems
solely serving the Property and the repair and replacement of components; and (iii) the
maintenance of all building service equipment (including elevators, and fire, life safety,
and emergency equipment) and the repair and replacement of components. During the
term of the Lease, in the event that Lessor is unsatisfied with any maintenance or
repairs performed by Lessee, the Parties shall meet and confer as soon as reasonably
practicable to address Lessor's concerns promptly. Lessee shall not be responsible for
the cost of and repair or maintenance required because of the acts or omissions of
Lessor.
ARTICLE 10 STATUS AND MANAGEMENT OF LESSEE
10.1 Nonprofit Status
During the Term, Lessee shall maintain its status as a California public benefit
nonprofit corporation in full compliance with the California Nonprofit Corporation
Law (California Corporation Code Section 5000 et seq.). Lessee shall also
maintain its qualification as a tax - exempt organization under 501(c)(3) of the
Internal Revenue Code (or any successor statute).
10.2 By -Laws
During the Term, Lessee shall maintain by -laws governing the management and
operation of the nonprofit corporation, and provide Lessor with a current copy of
the by -laws.
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ARTICLE 11 ALTERATIONS
11.1 Written Consent
Except as otherwise provided in Section 11.2, Lessee shall obtain the written
consent of Lessor prior to making any structural or material nonstructural
alterations to the Property. All structural and material nonstructural alterations to
the Property shall conform to the approved plans for the Property. "Alterations"
shall mean any modification, addition, or improvement to the Property or to the
Improvements that will be undertaken by Lessee subsequent to construction of
Improvements required by this Lease, whether by addition or deletion. Lessee
shall be solely responsible for all costs and expenses incurred in making any
alteration. All alterations shall be surrendered with the Property, at no cost to
Lessor, when this Lease expires or terminates.
11.2 Minor Alterations
Improvements including, maintenance, repairs and replacement shall be
considered Minor Alterations so long as any Improvement replaced is of like kind
and quality. Lessee may during the term of this Lease complete certain
alterations and improvements to the Property (deemed "Minor Alternations ")
without Lessor's prior approval, provided such Minor Alterations individually meet
all of the following criteria:
(1) Would not require Lessee to apply for a building permit for completion of
such Minor Alteration;
(2) Would not result in any violation of any provision of this Lease;
(3) Would not result in a substantial change in the character of the
Improvements or the use for which they were intended;
(4) Would not involve or result in any change in the exterior of the
Improvements that materially changes the design of the Improvements
based on the approved Construction Plans;
(5) Would not be of lesser quality or result in the diminution of the value of the
Property;
(6) Would not weaken the structural integrity of the Improvements or any
portion thereof.
Improvements and changes in the Property which meet the criteria contained herein
and which involve the installation of fixtures, partitions, counters, shelving, and
equipment as deemed necessary and appropriate by Lessee will not be considered
"Alterations" or "Minor Alterations" and do not require Lessor's prior approval.
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11.3 Demolition
Lessee shall not, without prior written approval of City and any other required
government entity, demolish, alter, or remove all of any structural part of the
Property or any Improvements located upon the Property.
11.4 Notice of Non - responsibility
Structural and nonstructural alterations which require Lessor approval shall not
be commenced until ten (10) calendar days after Lessor has received written
notice from Lessee stating the date work is to commence so that Lessor can post
and record an appropriate Notice of Non - Responsibility. Structural alterations
requiring a building permit shall be made as stipulated by the City's adopted
Building Code.
ARTICLE 12 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES
12.1 Public and Private Utility Services
Lessee will pay all charges for all public or private utility services and all sprinkler
systems and interior protective services provided to or for the Property. Lessee
will comply with the terms and conditions of contracts relating to such services.
Lessor shall not be liable for any failure or defect in the supply of any utility.
122 Refuse
Lessee shall pay all charges applied to the Property for refuse collection services
whether billed by the City or its refuse collection service provider.
12.3 Taxes, Assessments, Fees and Charges
Lessee covenants to pay when due and prior to delinquency all applicable taxes,
assessments, fees, charges, and levies of every type and character, including all
interest and penalties, that are imposed, assessed or levied on the Property, any
occupancy or use of the Property, or any income derived from the Property.
Nothing herein shall be deemed to prohibit the Lessee from contesting the
validity or amount of any tax, assessment, fee, charge, encumbrance or lien, or
to limit the remedies available to the Lessee in respect thereto.
12.4 Proof of Payment
Lessee agrees to furnish to Lessor, upon request, proof of the timely payment of
any tax, assessment, levy, fee or charge or other. Lessee may pay any
assessment or tax in installments if legally permissible to do so. In the event
15
23 -31
Lessee elects to pay assessments or taxes in installments, Lessee shall be liable
only for those installments which become due and payable during the Term of
this Lease.
12.5 Payment by Lessor
In the event that Lessee fails to pay any assessment, tax, fee or charge levied on
the Property, if any, Lessor may, at its option, pay any assessment, tax, fee or
charge together with any penalties and /or interest before the due date if Lessor
has a reasonable belief that Lessee is unwilling or unable to make the payment.
In such event, Lessee shall fully reimburse Lessor within ten (10) calendar days
of written notice of payment by Lessor.
12.6 Property Taxes not Valid
The obligation of Lessee to pay taxes shall not be construed as evidence that
Lessor or Lessee believe that any tax is legal. This Lease is intended only to
obligate Lessee to pay taxes if legally imposed.
12.7 Notice of Possessory Interest; Payment of Taxes and Assessments on Value of
Entire Lease Premises
In accordance with California Revenue and Taxation Code Section 107.6(a) and
Health and Safety Code Section 33673, Lessor states that by entering into this
Lease, a possessory interest subject to property taxes may be created, and if so,
that Lessee shall pay taxes upon the assessed value of the Property and not
merely the assessed value of its leasehold interest. Lessee or other party in
whom the possessory interest is vested may be subject to the payment of
property taxes levied on such interest.
ARTICLE 13 LIENS
13.1 Indemnification
Lessee shall indemnify, defend and hold Lessor and the Property free, clear and
harmless from any claims, liens, demands, charges, encumbrances or litigation
arising directly or indirectly out of (1) Lessee's use, occupancy or operation of the
Property or (2) any work performed on, or any material furnished to the Property
at the request or direction of Lessee. Lessee shall pay, prior to delinquency, for
all work performed on, and material furnished to, the Property which may result in
a lien on the Property and shall use its best efforts to keep the Property free and
clear of all mechanic's liens and similar liens.
16
PIMPA
13.2 Satisfaction of Liens
Lessee shall fully pay and discharge a judgment or lien affecting the Property
upon entry of final judgment in any action contesting any claim of lien (if final
judgment establishes the validity of all or a portion of the lien). Lessee shall also
pay any lien within fifteen (15) calendar days after notice of the filing of any lien
that Lessee does not contest. Lessee shall reimburse Lessor upon demand for
any and all loss, damage and expense, including reasonable attorneys' fees,
incurred by Lessor with respect to any judgment or lien resulting from the acts or
omissions of Lessee related to the Property. Lessor shall have the right to satisfy
any judgment or lien if Lessee fails or refuses to do so and Lessee shall fully
reimburse Lessor in such event.
13.3 Notice to Lessor
Lessee shall give Lessor written notice of any claim or lien filed against the
Property and any action or proceeding instituted affecting the title to the Property.
13.4 Notice of Non-Responsibility
Lessor shall have the right to post and maintain on the Property any Notice of
Non - Responsibility authorized by law.
ARTICLE 14 INDEMNIFICATION
14.1 Indemnity
Lessee shall defend, indemnify and hold harmless Lessor, its officers, directors,
employees, volunteers, agents and representatives from and against any and all
legal or administrative proceedings, claims, reasonable attorneys' fees and costs,
expenses,. penalties, actual damages, including indemnity claims, in any way
related to Lessee's (i) improvement, use, maintenance, or operation of the
Property (ii) use, release, generation, storage or disposal of Hazardous Materials
(as defined in Section 14.6) on the Property by Lessee or any agent of Lessee,
(iii) non - compliance with any federal, state or local environmental law, ordinance,
rule or regulation, and (iv) any accident or injury to, or death of, persons or
damage to property occurring on or about the Property. If the storage, use and
disposal of Hazardous Materials on the Property is caused by the Lessee or any
agent of Lessee and results in contamination or deterioration of water or soil
resulting in a level of contamination greater than maximum allowable levels
established by any governmental agency having jurisdiction over such
contamination, Lessee shall promptly take any and all action required by such
agency to investigate and clean -up such contamination.
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14.2
fEWI
IBM,
14.5
Lessor shall defend, indemnify, and hold harmless Lessee, its officers, directors,
employees, agents and representatives from and against any and all legal or
administrative proceedings, claims, reasonable attorney fees and costs,
expenses, penalties, actual damages, including indemnity claims, in any way
related to (i) intentional acts or negligence of Lessor, its officers, officials,
consultants, agents, employees, contractors, or invitees arising with regard to
use or entry onto the Property by Lessor,(ii) the use, release, generation, storage
or disposal of Hazardous Materials (and defined in Section 14.6) on the Property
by Lessor or any agent of Lessor; (iii) Lessor's non - compliance with any federal,
state or local environmental law, ordinance, rule or regulation, (v) any accident or
injury to, or death of, persons or damage to property occurring on or about the
Property as result of Lessor's use of the Property, (vi) the removal, clean -up,
encapsulation, detoxification or any other action taken by Lessor or any agent of
Lessor, directly or indirectly arising out of the presence of Hazardous Materials
in, on or around the Property (excepting any matter which Lessee is responsible
for under the preceding paragraph). If the previous, current and future storage,
use and disposal of Hazardous Materials on the Property is caused by the Lessor
or any agent of Lessor and results in contamination or deterioration of water or
soil resulting in a level of contamination greater than maximum allowable levels
established by any governmental agency having jurisdiction over such
contamination, Lessor shall promptly take any and all action required by such
agency to investigate and clean -up such contamination.
CERCLA Liability
Lessee and Lessor mutually agree that this Lease is intended to operate as an
indemnification of Lessor by Lessee under 42 U.S.C. Section 9607(e) (1) of the
Comprehensive Environmental Response, Compensation and Liability Act
( "CERCLA "), as amended, and the California Hazardous Substances Act
( "CHSA "), as amended.
Expense of Proceedings
The defense of any suit, action, legal or
threatened, brought or instituted against
the indemnification provisions included i n
respective Party's sole expense.
Intentionally Omitted
Intentionally Omitted
14.6 Definition of Hazardous Materials
administrative proceeding that may be
Lessor or Lessee that is the subject to
this Lease shall be conducted at the
iU
FIANCE
The term "Hazardous Materials" means, without limitation, gasoline, petroleum
products, (excepting gasoline and petroleum products used in the ordinary
course of operation by vehicles visiting the Property) explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, polychlorinated biphenyls or related or similar materials, asbestos or
any other substance or material that may be defined as a hazardous, toxic or
dangerous substance, material, waste, pollutant or contaminant under any
federal, state or local environmental law, ordinance, rule or regulation as now or
at any time hereafter in effect, including, without limitation, (a) CERCLA, (b) the
Federal Water Pollution Control Act, (c) the Clean Air Act (d) the Resource
Conservation and Recovery Act, (e) the Toxic Substances Control Act, (f) the
Hazardous Materials Transportation Act, (g) the Carpenter - Presley- Tanner
Hazardous Substance Account Act, (h) Hazardous Waste Control Law, and the
(i) the Porter - Cologne Water Quality Control Act (California Water Code Sections
13000 et seq.).
ARTICLE 15 INSURANCE
15.1 Insurance to be maintained
Lessee shall take out and maintain, no later than thirty (30) calendar days after the
Effective Date and for the Term of this Lease, at Lessee's sole cost and expense, the
insurance required by Lessor as set forth in Exhibit F attached hereto and incorporated
herein by this reference.
ARTICLE 16 DAMAGE BY FIRE OR CASUALTY
16.1 Lessee to give Notice
In case of any material damage to or destruction of the Property, Lessee will
promptly give written notice to Lessor generally describing the nature and extent
of the damage or destruction.
16.2 Restoration
Except as provided in Section 17.3, in the event of damage to or destruction of
the Property, Lessee shall repair and restore the Property to its original condition
(subject to changes necessary to comply with the existing laws and any changes
in design approved by Lessor), at Lessee's sole cost and expense. To the extent
the insurance proceeds received from an insurance carrier ( "Insurer ") are
insufficient to cover the cost of such repair and restoration, Lessee shall make up
the deficiency out of Lessee's own funds. The repair and restoration shall be
commenced within a reasonable period of time following the casualty and shall
be completed with due diligence. Lessee shall have the option to terminate this
19
i1ANCI7
Lease and surrender possession of the Property to Lessor in the event the cost
of such repair and restoration exceeds the sum of (i) the amount of insurance
proceeds available to Lessee plus (ii) the amount of the deductible by an amount
which Lessee reasonably determines renders reconstruction of the Property
economically infeasible. In the event of such a termination, Lessee shall pay to
Lessor the amount of the deductible and assign to Lessor any and all rights
Lessee may have to the insurance proceeds from claims related to the Property
or the Improvements but specifically excluding insurance proceeds from claims
related to Equipment.
16.3 Casualty Late in Term
Lessee or Lessor shall have the right to terminate this Lease on ninety (90)
calendar days written notice if (i) the Property is damaged or destroyed
subsequent to the twenty fifth (25th) year of the Term, (ii) the costs of restoration
and repair are estimated to exceed fifty percent (50 %) of the then full
replacement cost of the Property (excluding land costs /value), and (iii) Lessee
elects not to repair or restore the Property. In such event, Lessor shall have the
right to receive and retain all insurance proceeds paid or payable to Lessee on
account of any damage or destruction to the Property.
16.4 Application of Insurance Proceeds
In the event that Lessee is required to restore the Property pursuant to Section
16.2, proceeds from policies of insurance required by Article 15 and which are
received on account of any damage to or destruction of the Property (less the
costs, fees and expenses incurred in the collection), shall be applied as follows:
16.4.1 Lessee shall furnish to Lessor satisfactory evidence to Lessor of
the total cost of Restoration pursuant to Section 16.2. Lessee shall
then furnish to Lessor satisfactory evidence that it has available the
total amount of money which, when added to the insurance
proceeds received, shall be sufficient to pay the cost of such
restoration.
16.4.2 Assuming satisfaction of the conditions of subsection 16.4.1 net
insurance proceeds shall be paid to Lessee, unless Lessee is in
Default, to fund restoration. Payments from the proceeds of
insurance for restoration shall be made only upon written request of
Lessee to Insurer and verification by an Independent Adjustor
assigned to the claim by the Insurer that the repairs are taking
place and that work continues to progress. A copy of any such
written request submitted to Insurer by Lessee shall also be
provided to Lessor. Final payment of insurance proceeds by
411
rxaery
Insurer will not be made until all repairs are completed and there
are no mechanic's or similar liens for labor or material supplied in
connection with the restoration to date.
16.4.3 Upon completion of restoration and assuming Lessee is not in
default, excess insurance proceeds shall first be paid to Lessor to
the extent of its actual expenses incurred by Lessor in the
restoration, then to Lessee as working capital
ARTICLE 17 EMINENT DOMAIN
17.1 Lease Governs
The rights and obligations of the parties with respect to any Award (as defined in
Section 17.4) shall be as provided in this Article if there is any taking during the
Term of this Lease.
17.2 Termination of Lease
This Lease shall terminate effective on the date of surrender of possession of the
Property to the condemning authority in the event of a total taking of the Property
or the EO Property. Lessee shall continue to observe and perform all of the
terms, covenants and conditions of this Lease until the date of termination.
17.3 Partial Taking — Restoration
If there is a partial taking (which shall mean a taking that does not, in Lessee's
reasonable opinion, keep the Property or the EO Property to be used for
Lessee's intended use; all other takings shall be deemed to be total takings),
Lessee may, at its sole cost and expense, whether or not the condemnation
award is sufficient for the purpose, promptly commence and diligently proceed to
effect restoration of the Property as nearly as possible to the condition and
character immediately prior to such taking.
17.4 Distribution of Award
All awards and damages received on account of any taking of the Property,
whether partial or total, including interest received ( "Award "), shall be paid
promptly by the person(s) receiving the same to an escrow agent mutually
acceptable to Lessor and Lessee to be distributed upon appropriate instruction
from the Parties.
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FIIHOA
17.5 Allocation of Award —Partial Taking
Any Award in a partial taking shall be distributed by escrow in the following order
of priority:
17.5.1 First, to Lessor and Lessee to reimburse all costs and expense
incurred in the collection of the Award, including fees and expenses
incurred in the condemnation proceeding;
17.5.2 Second, to Lessor, as reimbursement for the costs and expenses of
restoration of the Property and as those costs and expenses are
incurred by Lessee;
17.5.3 Third, if Lessor and Lessee are unable to agree upon the allocation
of the balance of the Award, if any, it shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court.
17,6 Allocation of Award — Temporary Taking
In the event of a taking for temporary use or occupancy, this Lease shall continue
in full force and effect and Lessee shall be entitled to claim, recover and retain
any Award made on account of such temporary taking. However, if the period of
temporary taking extends beyond the Term, the Award shall be apportioned
between Lessor and Lessee as of the date of expiration.
17.7 Allocation of Award — Total Taking
Any Award in a total taking shall be distributed by escrow in the following priority:
17.7.1 First, to Lessor and Lessee to reimburse for all costs and expenses
incurred by each in the collection of the Award;
17.7.2 Second, if Lessor and Lessee are unable to agree upon the
allocation, the balance of the Award shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court. The determination of the value of Lessee's and Lessor's
respective interests in the Property shall be made as if the Lease
were to continue in full force and effect until the expiration of the
term hereof.
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17.8 Conduct of Proceedings
Lessee and Lessor shall jointly participate in and prosecute /defend any action or
proceeding involving a taking of the Property by condemnation or under the
power of eminent domain and shall jointly make any compromise or settlement.
17.9 Notices
Any party receiving notice of or becoming aware of any condemnation
proceedings shall promptly give written notice to the other Party.
ARTICLE 18 ASSIGNMENT AND SUBLETTING
Lessee may not assign this Lease or any portion of the Property, without Lessor's prior
written consent which consent may be withheld in Lessor's sole and absolute discretion.
However, Lessee may grant such subleases, licenses, permits and concessions as are
reasonable, appropriate and customary to promote a Permitted Use and are in
accordance with this Lease. For the purposes of this Lease, assignment shall not be
deemed to have occurred as result of (i) any transfer of this Lease to an entity controlled
by or under common control with the originally named Lessee or any successor of the
same (provided, in such event the originally named Lessee shall not be released from
its obligations hereunder), or (ii) any transfer of this Lease on account of a foreclosure
of any leasehold mortgage or deed in lieu thereof (provided in such event the acquiring
party agrees to attorn to Lessor).
ARTICLE 19 LEASEHOLD MORTGAGES
Lessee shall have no right to encumber the Property without Lessor's prior written
consent, which consent shall not be unreasonably withheld by Lessor. Lessee shall
have the right to mortgage or encumber its interests in this Lease, and in such event
Lessor agrees to execute a commercially reasonable non - disturbance and attornment
agreement. Lessor agrees to consider reasonable amendments to this Lease
requested by Lessee's lender to address its financing and security concerns.
ARTICLE 20 PERFORMANCE OF LESSEE'S COVENANTS
20.1 Right of Performance
If Lessee fails to pay any tax, fee or other charge in accordance with Article 12
within the time period required or shall fail to pay for or maintain any of the
insurance policies provided for in Article 15 within the time required, or to make
any other payment or perform any other act within the time required by this
Lease, then Lessor may, after thirty (30) calendar days' written notice to Lessee
(or without notice in case of an emergency) and without waiving or releasing
23
PAI NCk]
Lessee:
20.1.1 Pay the tax, assessment, fee or charge payable by Lessee
pursuant to this Lease; or
20.1.2 Pay for and maintain any insurance policies required by this Lease;
or
20.1.3 Make any other payment or perform any other act that Lessee is
required to pay or perform pursuant to this Lease.
20.2 Reimbursement and Damages
Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in
the exercise of its rights pursuant to Section 20.1.
ARTICLE 21 REPRESENTATIONS
21.1 Lessor's Representations
Lessor represents to Lessee that:
21.1.1 Lessor owns the Property in fee simple subject only to the
permitted exceptions provided in Exhibit D and other matters
affecting title that do not inhibit, prevent or impair the operation,
maintenance or use of the Property for vehicle parking.
21.1.2 Lessor has the power and authority to enter into this Lease and
perform all the obligations of Lessor hereunder.
21.2 Lessee's Representations
Lessee represents to Lessor that:
21.2.1 Lessee has the right, power and authority to enter into this Lease
and to perform all the obligations of Lessee.
21.2.2 Lessee is a California public benefit nonprofit corporation in full
compliance with the provision of the California Nonprofit
Corporation Law (California Corporation Code Section 5000 et
seq.), and is a tax exempt organization under 501(c)(3) of the
Internal Revenue Code,
24
FII1081
ARTICLE 22 DEFAULTS, REMEDIES AND TERMINATION
22.1 Legal Actions
22.1.1 Institution of Legal Actions
In addition to any other rights or remedies, either Party may
institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Lease. Any legal action shall be
filed in the County of Orange, State of California.
22.1.2 Applicable Law
The laws of the State of California shall govern the interpretation
and enforcement of this Lease, with venue in Orange County.
22.2 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in
this Lease, the rights and remedies of the parties are cumulative.
22.3 Occurrence of Default
The following acts or omissions shall be considered material breaches of this
Lease if Lessee fails to cure the default within sixty (60) calendar days after
written notice of default from Lessor or, if cure is not feasible within sixty (60)
calendar days, Lessee has failed to commence cure within sixty (60) calendar
days or fails to diligently complete the cure:
22.3.1 The failure of Lessee to comply with the provisions of Articles 8 and
11 related to the design and construction of Improvements and
alterations to the Property.
22.3.2 The failure of Lessee to use the Property as identified in Section
6.1.
22,3.3 The failure of Lessee to maintain the Property as specified in Article
9.
22.3.4 The failure of Lessee to restore or repair the Property in the event
of damage or destruction as provided for in Article 16.
25
f'I ME
22.3.5 The failure of Lessee to pay any fee, tax, charge, or assessment
prior to delinquency or the failure to reimburse Lessor in the event
Lessor pays the fee, tax, charge or assessment.
22.3.6 The failure of Lessee to pay rent as set forth in Article 5.
22.4 Remedies
If Lessee has materially breached this Lease after expiration of all applicable
cure periods then a Default shall be deemed to have occurred, Lessor may give
written notice to Lessee of Lessor's intent to terminate the Lease. The Notice of
Intent to Terminate must include no less than ten (10) calendar days' notice to
Lessee of the date and time of a meeting with the Project Manager at which time
the Project Manager will decide if there has been a material breach in the Lease.
The Lease shall terminate on the date of Project Manager's determination that
the Lessee has materially breached the Lease, unless the Lessee appeals the
decision of the Project Manager to the City Council. Any appeal shall be
submitted in writing to the City Clerk and be scheduled for a regular or special
meeting of the City Council. The decision of the City Council on appeal shall be
final, provided the same shall not be deemed a waiver of Lessee's right to
institute legal action based on such decision. In addition to the right of
termination, Lessor shall have the following additional rights and remedies:
22.4.1 Lessor shall have the immediate right to reenter the Property, take
possession of the Property. In the event of termination under this
section Lessor shall owe no compensation to Lessee.
22.4.2 Lessor may, at its option, enforce all of its rights and remedies
under this Lease, including the right to recover the consideration
and all other sums payable as they become due. Lessor shall also
be entitled to recover from Lessee all costs of maintenance and
preservation of the Property , and all costs, including attorneys' and
receiver's fees, incurred in connection with the appointment of and
performance by a receiver to protect the Property.
22.4.3 Lessor shall be entitled to recover all money payable to Lessee
related to the operation and use of the Property.
22.5 Option to Terminate
Lessee shall have the option to terminate the Lease upon giving the Lessor
written notice at least three hundred sixty -five (365) calendar days prior to a
rxaya
lease termination date which termination shall take effect on that lease
termination date.
22.6 Waiver of Consequential Damages
Lessee acknowledges that Lessor would not enter into this Lease if it were to be
liable for consequential damages or loss of goodwill under, or relating to, this
Lease or any of the matters referred to in this Lease, including, without limitation,
any and all plans, permits, licenses or regulatory approvals, and CEQA
documents. Accordingly, Lessee covenants and agrees on behalf of itself and its
successors and assigns, not to sue Lessor (either in its capacity as lessor in this
Lease or in its capacity as the City of Newport Beach) for consequential
damages, or loss of goodwill for: (i) any breach of this Lease by Lessor; (ii) any
dispute, controversy, or issue between Lessor and Lessee arising out of or
connected with this Lease; or (iii) any of the matters referred to in this Lease,
including, without limitation, any and all plans, permits, licenses or regulatory
approvals, CEQA documents, or any future amendments or enactments thereto.
Nothing herein shall waive Lessee's right to seek actual and direct damages
caused by Lessor's breach, including actual and direct damages incurred by
Lessee with respect to Lessee's operations on the Property and the EQ Property.
For avoidance of doubt, the temporary closure of the public streets surrounding
or leading to the Property for accidents, public events, or maintenance of such
streets or utilities therein or on account of emergencies shall not be deemed a
breach of this Lease by Lessor.
ARTICLE 23 PERMITTED CONTESTS
Lessee, at no cost or expense to Lessor, may contest (after prior written notice to
Lessor), by appropriate legal proceedings conducted with due diligence, the amount or
validity or application, of any Imposition or lien, and provided that the proceedings
suspend collection from Lessor and any action against the Property. If Lessee fails to
contest the matter, or fails to protect Lessor and Lessor's interest in the Property,
Lessor may contest or settle the matter in its sole discretion and obtain reimbursement
from Lessee.
ARTICLE 24 ENTRY BY LESSOR
Lessor may enter the Property at reasonable times for the purpose of inspecting,
servicing or posting notices, protecting the Property, or for any other lawful purposes,
including showing the Property to prospective purchasers or lessees.
27
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ARTICLE 25 FORCE MAJEURE
Any prevention, delay, non- performance or stoppage due to any of the following causes
shall be excused: any regulation, order, act, restriction or requirement or limitation
imposed by any Federal, State or municipal government; acts of God; acts or omissions
of Lessor; fire, earthquake, explosion or floods; strikes, walkouts or inability to obtain
materials; war, riots, sabotage or civil insurrection; unusually severe weather; or any
other causes beyond the reasonable control of Lessee.
ARTICLE 26 MISCELLANEOUS
26.1 Notices
All notices and other communications shall be in writing, shall be sent by first
class registered or certified United States mail, postage prepaid, and shall be
deemed to have been given two (2) calendar days after the day of mailing,
addressed:
To Lessor;
City Manager
City of Newport Beach
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA, 92658 -8915
With a copy to both:
City Attorney's Office
Real Estate Division
City of Newport Beach
City of Newport Beach
100 Civic Center Drive
100 Civic Center Drive
P.O. Box 1768
P.O. Box 1768
Newport Beach, CA, 92658 -8915
Newport Boulevard, CA 92658 -8915
or at such other addresses as Lessor shall have furnished to Lessee; and
To Lessee;
President
ExplorOcean
600 East Bay Avenue
Balboa, CA 92661
m
Waif
26.2 No Claims Aoainst Lessor
Nothing in this Lease constitutes any consent or request by Lessor for the
performance of any labor or services or the furnishing of any materials to the
Property
26.3 Integration
This Lease, and the exhibits, is the entire Agreement between the Parties, and
there are no agreements or representations between the Parties except those
specified in this Lease. This Lease supersedes any prior negotiations,
representations, discussions or agreements between the Parties with respect to
the Property. Except as otherwise provided, no subsequent change or addition
to this Lease shall be binding unless in writing and signed by the parties, and
approved as to form by Lessor's City Attorney.
26.4 No Waiver by Lessor
To the extent permitted by law, no failure by Lessor to insist upon the strict
performance of any term of this Lease, or to exercise any right, power or remedy
upon a Default under this Lease, shall constitute a waiver.
26.5 Severability
If any term of this Lease or any application thereof shall be declared invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Lease
shall not be affected. Unless otherwise expressly provided, any approval or
consent of Lessor required shall not be unreasonably withheld or delayed. This
Lease shall be binding upon and inure to the benefit of and be enforceable by the
respective successors of the parties.
26.6 Holding Over
A tenancy for month -to -month shall result if Lessee remains in possession of the
Property with consent of Lessor after the expiration of the Term. The month-to-
month tenancy shall be on the same terms and conditions as contained in this
Lease.
26.7 No Partnership
This Lease does not cause Lessor to be a partner of Lessee, a joint venture with
Lessee, or a member of a joint enterprise of Lessee relative to the operations on
the Property.
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26.8 Time of the Essence
Time is of the essence relative to all of the terms, provisions, covenants and
conditions of this Lease.
26.9 Authority
Each individual executing this Lease on behalf of the Lessee represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
behalf of the foundation, in accordance with a duly adopted resolution of the
Board of Directors, and that this Lease is binding upon the foundation in
accordance with its terms. Lessee represents and warrants to Lessor that the
entering into this Lease does not violate any provisions of any other agreement
to which Lessee is bound.
26.10 City Authorization
The City Manager of the City of Newport Beach is hereby authorized, on behalf
of the City, to sign all documents necessary and appropriate to carry out and
implement the Lease and to administer the City's obligations, responsibilities and
duties to be performed under the Lease.
26.12 Counterparts
This Agreement may be executed in two (2) or more counterparts, each of which
shall be identical and may be introduced in evidence or used for any other
purpose without any other counterpart, but all of which shall together constitute
one (1) and the same agreement.
26.13 Attachments and Exhibits
This lease includes the following Exhibits, which are attached hereto and made a
part hereof:
Exhibit A - Description and depiction of the Property
Exhibit B - Description and depiction of EO Property
Exhibit C - Description of Improvements
Exhibit D - Permitted Exceptions
Exhibit E - Conceptual Design Plans
Exhibit F — Insurance Requirements
30
PAMR
26.14 Disputes
Each of the Parties shall pay all costs and expenses incurred or to be incurred by it in
negotiating and preparing this Lease and the other agreements to be executed in
carrying out the transactions contemplated hereby and thereby. In the event of a
dispute under this Lease, the prevailing party shall not be entitled to recover its costs
and expenses incurred in such dispute, including, without limitation, attorneys' fees and
court costs.
[SIGNATURES ON NEXT PAGE]
31
FIIWYA
FOR LESSOR
CITY OF NEWPORT BEACH
Rush N. Hill, II
Mayor
FOR LESSEE
EXPLOROCEAN
Dated
Tom Pollack
President
APPROVED AS TO FORM
THE CITY ATTORNEY'S OFFICE
Dated
Aaron C. Harp
City Attorney
ATTEST:
Leilani I. Brown
City Clerk
Dated
[END OF SIGNATURES]
32
PAI N1.9
STATE OF CALIFORNIA
SS.
COUNTY OF ORANGE
On , 20 , before me,
Notary Public, personally appeared
, who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) isfare subscribed to the within instrument and
acknowledged to me that he /she /they executed the same in his /her /their authorized
capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA
ss.
COUNTY OF ORANGE
On —'20 , before me,
Notary Public, personally appeared
, who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is /are subscribed to the within instrument and
acknowledged to me that he /she /they executed the same in hls✓her /their authorized
capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
PAI M ]
EXHIBIT A
DESCRIPTION AND DEPICTION OF THE PROPERTY
Description of Premises
[Note: A metes and bounds legal description of the lease premises shall be drafted and
attached to
replace this 'Exhibit A' prior to lease execution.]
Premises shall include portions of the following areas, as shown on the map exhibits:
APN 048 - 116 -06
Parcel 1, as shown on Parcel Map PM 117/24 (also referred to as Resub
566), recorded 06/14/1978, excepting the following areas:
A. A 5' wide alley easement, dedicated to the public.
B. A 2' wide easement for sidewalk and pedestrian purposes, dedicated
to the public.
C. Two corner cutoffs for Palm Street, dedicated to the public for street
purposes.
APN 048 - 116 -05
2. Lot 7, Block 7, Balboa Tract, as recorded as MM 4/11, recorded 5/23/1905
APN 048 - 116 -04
Alley
3. Lots 8, 9, 10, and 11, Block 7, Balboa Tract, excepting the following area:
A. A Grant of Easement for street and highway purposes over Lot 11,
recorded in Official Records as 20020109515, dated 02/08/2002.
4. The Alley between Lots 1 -6 and Lots 7 -11, Block 7, Balboa Tract, as
recorded in MM 4/11, recorded 05/23/1905,
bound on the north by the prolongation of the northerly line of Lot 7, to the
northeast corner of Lot 1 of said Tract,
and on the south by the prolongation of the southerly line of Lot 11, to the
southeast corner of Lot 6 of said Tract.
PAI M81
Exhibit A
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Lease Premises -
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Beach
Disclaimer Every reasonable Mort has been made to assure the
xwrary or the data proNded. hoeewr. The Cey of
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Newport Seam aM as enployees and agents
Owl aim any and all responsibllty from or relating to
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23 -51
Newport
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Exhibit A
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any n,v Its oNaii din Its osv
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23 -52
Exhibit A
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8
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Page A -4
23 -53
EXHIBIT B
DESCRIPTION AND DEPICTION OF EO PROPERTY
All that certain real property situated in the County of Orange, State of California,
described as follows:
Parcel 1 in the City of Newport Beach, County of Orange, State of California, as shown
on a Map filed in Book 208, Pages, 4, 5, and 6 inclusive of Parcel Maps, in the office of
the County Recorder of said County.
PAI S f
sxEEr a or a DUPLICATE Resus. Na >E*
ONEC PASMeLNO0v.1 J,'J _Pn Mr-r.�EL WZ P M. �y�>. -MMS
N9 ACRE6 vey
eA'rr -� "aver /N THE GTY CF N0,41 IrT BEAC%1 GRANGE COL!NTY
NARCH � it ^r CAL //'ORA/ /A
scace r•. zo'
MNMnruaWwvdw a.rori. JMromnl J " J m. 9Mry /'pr A "nW Nx
ttltt'/Pq �xWJw��arb�«w ra �veHHiOJ roM>r
a nrxx"naun uerTrm newer% .r"`..4irrraemrem r., nxmru>b iior w';wineJ
!.'AG ✓M' £. F/oOLSEY L.S 4fA7
BASIS OF BfARINBS MONUMENT NOTES
w ��� "i nrr°r X'••'d°°�r�e" mr «urrouw o ��>'riAi`e r`�"a non�rar.rwrro.
r"1O. r " <i,r'oF eu�anuu Wr "ruin °"rr %w ie"u` r .rnn elc..r. E,a
o unFi.ar rer >�ar n�..
RFFERENCf)
�YwiseMmJV ranee "rare! -.•Y
rrlr�+"F�ec.w:
` NEWPORT BAY
yd a�nu ni�> `>J rwrrui resrnrnrmv'.Aar rortvmeuer
vscw>: nnn wa<,e mvrY rwruJea
q
b'' "iJ�n"rM1r. Hb
L3 /d YS 1 r ^ri_
PARCEL 1
h SLOCX t:
I ¢
'� p' •.;ra., ! ;9 rho. I ? /.:f ,' e'
iz ` bm &1YAt r „rivirvw fr: pax senlom ' BAYAW,
• rom• .ln. —• r4 amerno:unrm
4 BAY o AVfNUi
\R. BALBOA IOANA>RO •J
J � �G % '` / "•r /� ro�'� {, li�j ([fNlftPt AVENUE) ��
PAI B 7
EXHIBIT C
DESCRIPTION OF IMPROVEMENTS
[TO BE ADDED AT TIME OF LEASE EXECUTION]
PIIB7y
EXHIBIT D
PERMITTED EXCEPTIONS
[TO BE ADDED AT TIME OF LEASE EXECUTION]
PAI B A
EXHIBIT E
CONCEPTUAL DESIGN PLANS
[TO BE ADDED AT TIME OF LEASE EXECUTION]
PAI M.9
EXHIBIT F
INSURANCE REQUIREMENTS
Lessee shall procure and maintain for the duration of the Lease insurance against
claims for injuries to persons or damages to property which may arise from or in
connection with Lessee's operation and use of the Property. The cost of such insurance
shall be borne by Lessee.
MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01
covering CGL on an "occurrence" basis, including property damage, bodily injury
and personal injury with limits no less than $2,000,000 per occurrence. If a
general aggregate limit applies, either the general aggregate limit shall apply
separately to this project/location or the general aggregate limit shall be twice the
required occurrence limit.
2. Workers' Compensation insurance as required by the State of California, with
Statutory Limits, and Employer's Liability Insurance with limits of no less than
$1,000,000 per accident for bodily injury or disease (if Lessee has employees).
3. Property insurance against all risks of loss to any tenant improvements or
betterments, at full replacement cost with no coinsurance penalty provision.
If Lessee maintains higher limits than the minimums shown above, the City requires and
shall be entitled to coverage for the higher limits maintained.
Other Insurance Provisions:
The policies are to contain, or be endorsed to contain, the following provisions:
For General Liability, the City, its officers, officials, employees, and volunteers
are to be covered as additional insureds with respect to liability arising out of
ownership, maintenance, or use of that part of the premises leased to the
Lessee.
2. The Lessee's insurance coverage shall be primary insurance as respects the
City, its officers, officials, employees and volunteers. Any insurance or self -
insurance maintained by the City, its officers, officials, employees, or volunteers
shall be excess of the Lessee's insurance and shall not contribute with it.
3. Each insurance policy required above shall contain, or be endorsed to contain, a
waiver of all rights of subrogation against the City
4. Each insurance policy shall endeavor to provide thirty (30) calendar days' notice
of cancellation (10 calendar days for non - payment) to the City.
5. The Property insurance shall name the City as Loss Payee as its interests may
appear.
PIAB]
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than
A: VII, unless otherwise acceptable to the City.
Deductibles and Self- Insured Retentions
Any deductibles or self- insured retentions must be declared to and approved by the
City. At the option of the City, either: the Lessee shall obtain coverage to reduce or
eliminate such deductibles or self- insured retentions as respects the City, its officers,
officials, employees, and volunteers; or the Lessee shall provide a financial guarantee
satisfactory to the City guaranteeing payment of losses and related investigations, claim
administration, and defense expenses. Notwithstanding the preceding, Lessee may
carry deductibles or self- insured retentions of $100,000 without City's approval.
Verification of Coverage
Lessee shall furnish the City with original certificates and amendatory endorsements or
copies of the applicable policy language providing the insurance coverage required
above. All certificates and endorsements are to be received and approved by the City
before work commences. However, failure to obtain the required documents prior to the
work beginning shall not waive the Lessee's obligation to provide them. The City
reserves the right to require complete, certified copies of all required insurance policies,
including endorsements, required by these specifications, at any time.
Waiver of Subrogation
Lessee hereby grants to City a waiver of any right to subrogation which any insurer of
said Lessee may acquire against the City by virtue of the payment of any loss under
such insurance. This provision applies regardless of whether or not the City has
received a waiver of subrogation endorsement from the insurer.
Special Risks or Circumstances
City reserves the right to modify these requirements at any time, including limits, based
on the nature of the risk, prior experience, insurer, coverage, changes in the cost of
living, or other special circumstances.
r'Ie3Yo7
EXHIBIT 2
Short Form Memorandum of Option Agreement
12
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
Office of the City Clerk
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
[Exempt from Recordation Fee — Cal. Govt. Code §§ 6103 & 27383]
MEMORANDUM OF OPTION AGREEMENT
This Memorandum of _Option Agreement ( "Memorandum ") is dated
2014, and is made between the City of Newport Beach, a California municipal
corporation and charter city ( "City ") and ExplorOcean, a California non - profit corporation
( "EO "), concerning the public parking lot located generally between Palm Street and
Washington Street from Bay Avenue to Balboa Boulevard on the Balboa Peninsula
certain property in the City of Newport Beach that is commonly referred to as the Palm
Street Parking Lot ( "Property "). The Property is more particularly described on Exhibit A
attached hereto.
For good and adequate consideration, City grants EO an option to lease the Property,
upon the satisfaction of certain conditions contained in the Option Agreement dated
_, 2014, including without limitation provisions prohibiting assignment,
without "the express written consent of City, all as more specifically set forth in said
Option Agreement, which said Option Agreement is incorporated in this Memorandum
by this reference.
The Option Agreement's term is approximately seven (7) years, ending on December
31, 2021, unless extended by the parties.
This Memorandum is not a complete summary of the Option Agreement. Provisions in
this Memorandum shall not be used in interpreting the Option Agreement's provisions.
In the event of conflict between this Memorandum and other parts of the Option
Agreement, the other parts shall control. Execution hereof constitutes execution of the
Option Agreement itself.
[Signatures on the next page]
PAI M A0
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Option Agreement as of the dates written below.
CITY
City of Newport Beach
a California Municipal Corporation
Date:
Rush N. Hill, II
Mayor
ATTEST:
Date:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
THE CITY ATTORNEY'S OFFICE
Date: 1 r'l
q)
Aaron C. Harp
City Attorney
ED
ExplorOcean
a California non - profit corporation
23 -63
CALI'OR LA. ALL - PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
State of California
County of Orange
On Ocj — 2 n'iiT before me Rrnr Tahmcresi, Notary Public
(Borst mater =a and title of the amts)
personally appeared I 4mai. s Da U&4
who proved to me on the basis of satisfactory evidence to be the person(a) whose name(e subscribed to
the within instrument and acknowledged to me that ey execurted the same in � authorized
capacity( -its , and that by ei: signature(s) on the instrument the person{), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and correct. .
WITNESS my hand and official
Signature
ROYA TANMORESI
Commiealon • 2080684 =
Notary Public - California
Orange County
(Notary Se M Comm. E Tres Se 16, 2018+
ADDTITONAL OPTIONAL DiFORMATTON
DESCRIPTION OF TEE ATTACHED DOC NIENT
(Title or desciption of attached detmmem)
(Title s description of attached document continued)
N=ber of Pages _ Docn neat Date
(Additional information)
CAPACITY CLAWW BY THE SIGNER
•
Individual (s)
•
Corporate Oft
Critic)
•
Partner(s)
•
Attorney -in -Fad
❑
Tnmteq(s)
❑
Other
2008 Version CAPA v1210.07 800.873 -98fii wwwYataryClasses.tom
1NSTRi7CTIONS FOR COMPLETING THIS FORM
Any actnowledgme»t camplered in Cabfornia sent canon verbiage emely as
appears above m the notary section or a Jeporme acbmwledgment farm most be
pmperry eemaleted and attached m dum dustmen The only ¢candan ti f a
doermem ra in he recorded otumde of California In mch instances, any aiterwtnre
acivmw/eagment verbiage as may be printed an such a dacunent m long as the
verbiage aces not remtire ate notary X do samedung that is dlegnijbr a notary in
Califamar i.s. c-mifytng the authorized capacity of the signer). Please chect the
dacmtent carefullyfar proper notarial wording and attach this farm'f required
• Stma and County information must be the State and County where the document
signer(s) personally appeared before the notary public for acmowldgment
• Late of notmiaztion must be the date that the signer(s) personally appeared which
must also be the same dam the aa'mowledgmem is completed.
• Tne notary public must prim his or her name as it appears within his or her
commission followed by a comma and than yew title (notary, public).
• Punt the names) of document signer(s) who personally appear at the time of
norarieGoo.
• Indicate the comet singular or plural forms by emssing off incorrect forms (.c.
WsheA'aey,— is )are ) at circling the aomct forms. Failure to correctly indicate this
iuformantm may lead to rejection of document recording.
• The notary seal impression must be elm and photographically mproduable.
Impression must nm cover text or lines. if seal impression smpdges, re-seal if a
sufficient area permits, otherwise complete a different acknowledgment fond.
• Signature of the notary public must match the signamme on file with the once of
the county cletl-.
Additional infrnmation is not required but could help to ensure this
a6mawledgmem is not misused or attached to a di6sent datnurent
Indicate title or type of attached document, number of pages and date.
v Indicant the capacity claimed by the signer. If the claimed capacity is a
eorporate affim indicate the title (I.e. CFA, CFQ, Secretary).
• Securely attach this decament m the signed docament
23 -64
EXHIBIT A
DESCRIPTION AND DEPICTION OF THE PROPERTY
Description of Premises
[Note: A metes and bounds legal description of the lease premises shall be drafted and
attached to
replace this'Exhibit A' prior to lease execution.]
Premises shall include portions of the following areas, as shown on the map exhibits:
APN 048 - 116 -06
Parcel 1, as shown on Parcel Map PM 117/24 (also referred to as Resub
566), recorded 06/14/1978, excepting the following areas:
A. A 5' wide alley easement, dedicated to the public.
B. A 2' wide easement for sidewalk and pedestrian purposes, dedicated
to the public.
C. Two corner cutoffs for Palm Street, dedicated to the public for street
purposes.
APN 048 - 116 -05
2. Lot 7, Block 7, Balboa Tract, as recorded as MM 4/11, recorded 5/23/1905
APN 048 - 116 -04
Alley
3. Lots 8, 9, 10, and 11, Block 7, Balboa Tract, excepting the following area:
A. A Grant of Easement for street and highway purposes over Lot 11,
recorded in Official Records as 20020109515, dated 02/08/2002.
4. The Alley between Lots 1 -6 and Lots 7 -11, Block 7, Balboa Tract, as
recorded in MM 4/11, recorded 05/23/1905,
bound on the north by the prolongation of the northerly line of Lot 7, to the
northeast corner of Lot 1 of said Tract,
and on the south by the prolongation of the southerly line of Lot 11, to the
southeast corner of Lot 6 of said Tract.
f�Ie31-1
Exhibit A
T
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- nrm�1M APP.
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-
�A.._n lO1J .. liiAYli a
Lease Premises &' - � -`
Newport
B
Beach Beach
Clsclelmer Every reasonable Mort has been made to assure the
acwmry or the data proAdecl however. The CAyW
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23 -66
Exhibit A
Page A -2
23 -67
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Exhibit A
RESUB
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8
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Page A -4
23 -68