HomeMy WebLinkAbout07 - Lease Agreement NMUSD, Authorizing the Lease of Playground Area on Tidelands and Filled Lands for Joint Use with Newport Elementary School Located at 1327 West Balboa BoulevardCITY OF
NEWPORT BEACH
City Council Staff Report
February 10, 2015
Agenda Item No. 7
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kimberly Brandt, Community Development Director — (949) 644 -3226,
kbrandt@newportbeachca.gov
PREPARED BY: Lauren Whitlinger, Real Property Ad min istrator /Seimone Jurjis, PE, CBO, Chief
Building Official
PHONE: (949) 644 -3236
TITLE: Lease Agreement between the City of Newport Beach and Newport -Mesa Unified
School District, Authorizing the Lease of Playground Area on Tidelands and Filled
Lands for Joint Use with Newport Elementary School Located at 1327 West Balboa
Boulevard
ABSTRACT:
Newport-Mesa Unified School District requests to enter into a new 50 -year lease for the existing Newport
Elementary School playground area located upon tidelands and filled lands that are situated on the beach
side of Ocean Front between the southerly extensions of 13th Street and 14th Street on the Balboa
Peninsula. This lease will allow the playground to continue to be available to the school for outdoor
activities.
RECOMMENDATION:
a) Staff recommends the City Council find this action is not subject to the California Environmental
Quality Act (CEQA) pursuant to 15060(c)(2) (the activity will not result in a direct or reasonably forseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in
Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or indirectly;
b) Approve and authorize the Mayor and City Clerk to execute a 50 -year lease agreement (Staff Report
Attachment CC 1) with Newport-Mesa Unified School District; and
c) Approve a waiver of City Council Policy F -7 based on the findings contained in the staff report and
lease agreement.
7 -1
FUNDING REQUIREMENTS:
The current adopted budget reflects no lease revenue from Newport-Mesa Unified School District for the
use of the playground at Newport Elementary School. No revenue is contemplated under the terms of the
proposed lease agreement.
DISCUSSION:
Background
Newport-Mesa Unified School District (District) has operated Newport Elementary School (School) on the
Balboa Peninsula since the 1920's. In 1960 the City of Newport Beach (City) entered into a 50 -year lease
agreement (Attachment CC 2) with the District for use of a portion of the public tidelands for the
playground. The lease expired in 2010, and the District requests to enter into a new lease to allow for
continued joint use of the approximately 3.5 acres of playground area. The playground, tidelands in trust to
the City by virtue of a grant from the State (per Chapter 74 of Statutes of 1978, as amended), is located
adjacent to the School on the beach side between the southerly extensions of 13th and 14th Streets (see
map, Attachment CC 3).
Newport Elementary is a public elementary school, with students in kindergarten through 6th grade, and
operates weekdays during the school year from 8:00 a.m. to 2:35 p.m. The school uses the playground
area during regular school hours for recess and other outdoor activities. Additionally, the City's Recreation
and Senior Services Department utilizes the playground for programmed activities after regular school
hours and on weekends and holidays. When not in use by the School or City, the playground is open to
the public for general recreational use.
The District proposes to continue operating the playground in its current layout and configuration, which
includes a grass playfield, blacktop and sand playground areas. A school parents group has proposed to
upgrade the existing improvements by building new retaining walls and leveling the grass playfield area,
and adding stairs for convenient access.
The improvement project is subject to California Coastal Commission approval, and the City is processing
the Coastal Development Permit which is expected to be approved in the spring of 2015. The parents
group will obtain the necessary building permits, and is coordinating with the City and District for approval
prior to installation of the proposed improvements.
District Approval
On November 18, 2014, the District Board of Education approved the proposed lease renewal and
authorized the Deputy Superintendent to execute the agreement. The lease was executed (Attachment
CC 1) on November 19, 2014, and returned to the City for processing with the City Council.
City Council Policy F -7, Income Property
The City manages income property assets under specific guidelines in accordance with City Council Policy
F -7, Income Property (Attachment CC 4). The guidelines are: (a) determine the maximum, open market,
highest and best use and value of property; (b) negotiate terms utilizing the analysis of a professional
appraiser or consultant; (c) seek to operate facilities with City or contract staff; and (d) solicit proposals via
open bid to obtain revenue consistent with open market value and the highest financial return. Since the
lease amount is zero dollars, findings must be made when less than the open market value is received.
Staff believes that the following findings can be made:
1. The District's use of the property provides an essential and unique service to the community in that it
provides for a public elementary school playground, which might not otherwise be provided because of
space limitations at Newport Elementary School.
7 -2
2. Charging less than open market value of the property allows for continued use and operation by
Newport Elementary School and accessibility to the public, which may not otherwise be provided if an
appraisal was obtained and full market value of the property was required.
3. The property serves to promote the goals of the City, such as preservation of open space, education,
and other related recreation services and activities.
About Tidelands
A recital in the lease (Recital 1) as well as one of the Lease's sections (Section 3.1) state the City's findings
that this property provides unique public access which is of statewide concern, and that this access may
not otherwise be provided were full market value of the property required. Additionally, charging less than
fair market value here allows for continued operation of Newport Elementary School and accessibility to
the public - this benefits the citizens of the State of California.
Proposed Agreement
The proposed terms of the Lease Agreement are summarized below:
1. The term of the agreement will be for 50 years with no extension options.
2. Rent shall be set at $0 per year.
3. District may operate the property as an elementary school playground, including a grass playfield,
blacktop playground, and sand playground.
4. City and District shall share use of the property for programs and services available to the public. Use
of the property shall be as follows:
School Year (Monday through Friday) —
(a) 6:00 a.m. to 3:00 p.m. — Use by District,
(b) 3:00 p.m. to 6:00 p.m. —joint use by City and District, with City having priority,
(c) 6:00 p.m. to 10:00 p.m. — use by City.
Weekends, School Holidays, and Summer Vacation Periods —
(a) 6:00 a.m. to 10:00 p.m. — use by City, unless otherwise authorized by City in writing.
5. District is responsible for operation and maintenance and repair of the lease premises, at its sole cost
and without expense to the City.
6. District shall obtain prior written consent from City for any projects, modifications, or improvements on
the property, and shall not, with the exception of playground equipment, construct any buildings or fences
on the property without prior written approval of the City Council.
7. Insurance and indemnity provisions are mutual between City and District, and are otherwise consistent
with current standards; all other lease terms are consistent with the City's standard terms.
This agreement has been reviewed by the City Attorney's office and has been approved as to form.
Contract Summary
Vendor Name
Newport -Mesa Unified
School District
Term
50 years
Date Entered Into
Feb -1960
Cost /Year
$0
Approval Body (City Mgr, Dept Head, or City
Council)
City Council
7 -3
Proposed
Vendor Name
Newport-Mesa Unified
School District
Term
50 Years
Escalation Clause
N/A
Cost /Year
$0
Cost /Contract Term (est)
$0
ENVIRONMENTAL REVIEW:
The recommended action is not subject to
result in a direct or reasonably foreseeable
(the activity is not a project as defined in
Regulations, Title 14, Chapter 3, because
environment, directly or indirectly.
NOTICING:
CEQA pursuant to Sections 15060(c)(2) (the activity will not
indirect physical change in the environment) and 15060(c)(3)
Section 15378) of the CEQA Guidelines, California Code of
it has no potential for resulting in physical change to the
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at
which the City Council considers the item).
ATTACHMENTS:
Description
Attachment CC 1 - Proposed Lease Aareement
Attachment CC 2 - Expired 1960 Lease Agreement
Attachment CC 3 - Maps
Attachment CC 4 - City Council Policy F -7 - Income Property
7 -4
ATTACHMENT CC 1
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Newport Beach
100 Civic Center Dr.
P.O. Box 1768
Newport Beach, California 92658 -8915
Attn: City Clerk
(Exempt From Recording Fees Pursuant
to Government Code § 27383)
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
LEASE AGREEMENT WITH
NEWPORT -MESA UNIFIED SCHOOL DISTRICT FOR
NEWPORT ELEMENTARY SCHOOL PLAYGROUND
7 -5
LEASE AGREEMENT WITH
NEWPORT -MESA UNIFIED SCHOOL DISTRICT FOR
NEWPORT ELEMENTARY SCHOOL PLAYGROUND
THIS LEASE AGREEMENT ( "Lease ") is made and entered into this day of
, 2014, ( "Effective Date ") between the CITY OF NEWPORT BEACH, a
California municipal corporation and charter City ( "City "), and the NEWPORT -MESA
UNIFIED SCHOOL DISTRICT, a political subdivision of the State of California
( "District "), whose address is 2985 Bear St., Costa Mesa, CA 92626 and is made with
reference to the following:
RECITALS
A. City is the trustee of the tidelands and filled lands in the corporate limits of the
City lying southerly of Ocean Front between the southerly extension of 13th Street
and the southerly extension of 14th Street, hereinafter more particularly
described, by virtue of a grant from the State of California set out in Chapter 74
of Statutes of 1978, as amended ( "Property ") the Property is more particularly
described in Exhibit "A" and depicted in Exhibit "B ", both of which are attached
hereto and incorporated by reference; and
B. City has a perpetual easement for street, park, and public pleasure purposes
over Block 13A, Section B, of Newport Beach, which lies between the southerly
extensions of 13th and 14th Streets and between Ocean Front and said tidelands
and filled lands as shown on a map recorded in Book 4, page 27, Miscellaneous
Maps, Records of Orange county, California; and
C. District owns Block 13 of Newport Beach, as per map recorded in Book 4, page
27, of said maps, which lies between 13th Street and 14th Street and between
Balboa Boulevard and Ocean Front; and
D. District operates a public elementary school (Newport Elementary School) on
said Block 13 and uses, and has need for the use of, said Block 13A and the
adjoining tidelands and filled lands oceanward of said Block 13 in connection with
said school for playground purposes; and
E. The City and District first entered into a lease agreement for the Property on
February 1, 1960 pursuant to authority conferred by the electors and Chapter
813 of the Statues of 1929; and
F. The leasing of the tidelands and filled lands hereinafter described to the District
for the purpose and under the terms and conditions set out herein would not
interfere with or be inconsistent with, the requirements of commerce or
navigation at Newport Harbor and is not inconsistent with the title upon which
said land is held; and
G. The trespass rights hereby granted over the City's easement on said Block 13A
under the terms and conditions set out herein are not inconsistent with the grant
7 -6
of easement to City over said Block 13A, Section B; and
H. The City is prevented by tideland grants, Coastal Commission guidelines and
other reservations from selling the Property; and
Pursuant to the Newport Beach Municipal Code, the Beacon Bay Bill (statutes of
1978, as amended) and City Council Policy F -7, the City finds that the Property
provides an essential and unique service to the community in that it provides for
a public elementary school playground that is of a statewide concern and that
might not otherwise be provided were full market value of the property required
or an open bid process conducted.
NOW THEREFORE, the Parties agree that:
1. TERM
1.1 City hereby leases the Property to District for playfield purposes only, as
described in this Lease, and subject to the terms and conditions herein contained, for a
term of fifty (50) years beginning on the Effective Date. The portion of the school which
is leased to the District consists of the grass playfield, blacktop playground, and sand
playground.
1.2 City and District may amend the terms of this Lease at any time during the
term hereof to better serve the public interest or better accomplish the purposes of the
lease; provided, however, that the term hereof may not be extended by the City and
District beyond fifty (50) years herein provided.
1.3 Termination. Upon one (1) year prior written notice, City and District shall
each have the right to terminate this Lease without cause.
2. AGREEMENT TO LEASE
2.1 Net Lease. This Lease is a net lease, pursuant to which City has no
obligation with respect to the payment of taxes, insurance, the cost of maintenance,
utilities, repairs or other costs or obligations associated with the Property, except as
expressly stated herein.
2.2 Termination of Prior Lease(s). District affirmatively represents that: (a) to
the best of District's knowledge, no other person /entity has any interest, whether by
lease or otherwise, in the Property; and (b) the person(s) executing this Lease have the
authority to bind the District and be bound by the terms herein. Upon the execution of
this Lease, any lease(s) between the City and the District or any other party covering
the Property shall automatically terminate and be of no further effect. District shall
execute and record any document(s) that may be required by City to evidence the
termination of any prior lease(s) covering the Property. City shall owe no compensation
to District or any other party for the termination of a lease under this section. District
shall indemnify and hold the City harmless from any and all liability, loss, expense,
LEASE AGREEMENT Page 2
7 -7
damage, or claims which may arise directly or indirectly from or in connection with any
allegation that the representations made is this section are false.
2.3 Reservation of Mineral Rights. City expressly reserves all oil, oil rights,
gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in
and under the Property and the right to grant and transfer the same, together with all
necessary and convenient rights to explore for, develop, produce and extract and take
the same, subject to the express limitation that any and all operations shall be carried
on at levels below the depth of five hundred feet (500') from the surface of the land by
means of wells, derricks and other equipment from surface locations on adjoining or
neighboring land, and subject further to all restrictions and regulations concerning the
drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon
substances specified in the City's Charter and Municipal Code and Tidelands Grant.
3. RENT
3.1 The consideration charged under this Lease shall be non - monetary and
instead based upon the District fulfilling all of the obligations provided herein. Charging
less than fair market value rent for the Property allows for continued operation of
Newport Elementary School and accessibility to the public. Thus, the charging of less
than fair market value rent for the Property is a matter of state -wide concern that
benefits the citizens of the State of California. Pursuant to City Council Policy F- 7(E)(6),
the City Council finds that the charging of less than fair market value rent for the
Property promotes the goals of the City to further marine related services and activities.
4. LICENSE AND RIGHT OF TRESPASS
4.1 City hereby grants a license and right of trespass to District for playground
purposes only, subject to the terms and conditions herein contained, for a term of fifty
(50) years beginning on the Effective Date, over that certain parcel of land in the City
between the southerly extension of 13th Street and the southerly extension of 14t
Street, more particularly described as:
4.1.1 Block 13A, Section B, Newport Beach, as per map recorded in
Book 4, page 27, of Miscellaneous Maps, Records of Orange County, California.
5. USE AND CONDITION OF PROPERTY
5.1 Use. District shall use the Property to provide a playground area for use
by children participating in activities of the public school on said Block 13 and for use by
the public for park and pleasure purposes when the same is not being used by the
school.
5.1.1 Shared Use. City and District shall use the Property for programs
and services available to the public on fair and reasonable terms in accordance with the
following schedule:
5.1.2 School Year (Monday through Friday)
LEASE AGREEMENT Page 3
em
(a) 6:00 a.m. to 3:00 p.m. — use by District,
(b) 3:00 p.m. to 6:00 p.m. — joint use by City and District, with
City having priority.
(c) 6:00 to 10:00 p.m. — use by City.
5.1.3 Weekends, School Holidays, and Summer Vacation Periods
(a) 6:00 a.m. to 10:00 p.m. — use by City, unless otherwise
authorized by City in writing.
5.2 Buildings. District shall not construct any buildings or fences on the
Property without the prior written approval of the City Council, but may place and
maintain playground equipment on the Property, which shall be the property of District
and not of the City.
5.3 Compliance with Laws. District shall comply with, any law, statute,
ordinance, plan, resolution or policy applicable to the Property when constructing,
making, or causing to be made, any additions, alterations or repairs to any structure or
improvement on the Property which may be required, including, but not limited to, the
California Environmental Quality Act ( "CEQA ") and the California Coastal Act. Any third
party constructing structures or improvements, and /or performing additions, alterations
or repairs to any structure or improvement on the Property shall at its own cost comply
with all applicable laws and obtain all required approvals (e.g., Coastal Development
Permit, etc.). District and /or third party shall indemnify, defend and hold City harmless
from and against any loss, liability, action, claim or damage, arising out of, or in any way
related, to District's and /or third party's failure to comply with, and perform pursuant to
provisions of this Lease. All repairs, additions, and alterations to the structures or
improvements on the Property shall conform to all applicable laws, ordinances,
regulations, plans, policies and resolutions and all work shall be performed with
reasonable diligence, completed within a reasonable time, and performed at the sole
cost and expense of District or the third party performing the work. Notwithstanding
District's obligations under this Section 5.3 and Section 6 below, City may, in its sole
and absolute discretion, assist with or take the lead in processing entitlements or
permits for any project undertaken by the District, or a third party
5.4 As Is Condition of Property. District expressly accepts the Property "as is"
and acknowledges that City has made no representations or warranties as to the
suitability of the Property for any construction or improvement. District shall conduct all
tests necessary to determine the suitability of the Property for any proposed
construction or improvement, including, without limitation, the amount and extent of any
fill, and related factors. District expressly acknowledges that City shall not be liable for
any damage or loss resulting from any subsurface or soil condition in, on, or under the
Property or adjacent property. District expressly acknowledges that, while the
legislature of the State of California has purportedly authorized the uses and purposes
established in the Lease, the Property may constitute filled tidelands, and District has
LEASE AGREEMENT Page 4
7 -9
made no representation or warranty relative to the validity of Chapter 74 of the Statutes
of 1978, as amended, or the power of the legislature of the State of California to remove
public trust restrictions on tidelands through legislation. Notwithstanding the foregoing,
in the event of any challenge to the right and power of City to lease the Property for the
purposes provided in this Lease, City agrees, at its sole cost and expense, to use all
reasonable efforts to resist and defend against such challenge and to seek a ruling or
judgment affirming and upholding the right and power of City to lease the Property for
the purposes provided in this Lease.
5.5 Tidelands Grant. The Property may be located on land that is the subject
of a Tidelands Grant from the State of California to the City. District shall not take any
action that would cause the City to be in violation of any provisions of that Tidelands
Grant. If the Property is located upon tidelands and the State of California terminates,
or modifies the Tidelands Grant to prohibit the uses contemplated under this Lease, this
Lease shall terminate as a result and the Parties shall be released from all liabilities and
obligations under this Lease and City shall owe no compensation to District.
6. IMPROVEMENTS
District shall obtain the prior written consent of City prior to constructing, or
allowing a third -party to construct, any project(s), modification(s) or improvements on
the Property, which consent shall not be unreasonably withheld by City. If constructed
by a third -party, the contract shall specifically reference this Lease and shall require the
third -party to indemnify the City and provide a performance and material bond, in favor
of the City and District, to ensure the modifications are properly constructed. Upon
completion, the modifications shall be maintained by the District in accordance with
Section 7.
7. MAINTENANCE BY DISTRICT
7.1 District assumes full responsibility for operation and maintenance and
repair of the Property and all improvements throughout the Term at its sole cost and
without expense to the City.
7.1.1 Without limiting District's obligations to maintain the Property,
District shall keep and maintain all Improvements in good order, condition and repair
consistent with similar school properties in Newport Beach.
7.1.2 District expressly waives (a) the right to require City to make
repairs; (b) any right to make repairs at the expense of City.
8. TRANSFER OR SALE OF PROPERTY
8.1 Sale or Discontinued Operation. Should the District sell Block 13 on which
the elementary school is located, or any part thereof, or should the District discontinue
the operation of the public school on said Block 13 for a period of one (1) year, then this
Lease, and the license, and the right of trespass hereby granted shall automatically
LEASE AGREEMENT Page 5
7 -10
terminate and City may re -enter the Property and take possession thereof and remove
all persons and property therefrom.
8.2 Assignment. The District shall not assign this Lease or license or any right
acquired hereunder without the prior written consent of City. Any assignment without
the prior written consent of the City is null and void.
9. RIGHT TO ENTER
9.1 Right to Enter. Notwithstanding, this Lease and the license and right of
trespass granted to District, City reserves the right to enter the land or any part thereof
to construct and maintain groins, bulkheads, or breakwaters to protect said Property
and other land within City from damage or erosion; provided, however, that nothing
contained herein shall require the City to construct or maintain groins, bulkheads, or
breakwaters on the Property or elsewhere.
9.2 Easements. Subject to applicable provisions of law, it is understood that
all rights granted hereunder are subject to easements, rights -of -way, and similar
burdens, if any, now existing or heretofore granted by City or its predecessors, in, to,
over, or under the Property for any purpose.
10. RESTORATION AND ENVIRONMENTAL MATTERS
10.1 Restoration of the Property. Should any improvements on the Property be
damaged or destroyed by fire or other casualty or any cause whatsoever, District will
cause the commencement of reconstruction to the damaged or destroyed
improvements within ninety (90) calendar days, or such other time period as may be
mutually agreed upon by the Parties, after such damage and destruction and will
thereafter cause such reconstruction to be diligently prosecuted to completion.
10.2 Environmental Matters.
10.2.1 Definitions. The following terms will be defined as follows:
(a) Environmental Law. "Environmental Law" shall include all
federal, state, and local environmental, health, and safety laws, statutes, ordinances,
regulations, rules, judgments, orders, and notice requirements, which were in effect as
of the date of closing, which regulate or relate to (a) the protection or clean -up of the
environment; (b) the use, treatment, storage, transportation, handling or disposal of
hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the
quality of the air and the discharge of airborne wastes, gases, particles, or other
emissions; (d) the preservation or protection of waterways, groundwater, or drinking
water; (e) the health and safety of persons or property; or (6) impose liability with
respect to any of the foregoing, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS
§§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) [42
USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water
Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances
LEASE AGREEMENT Page 6
7 -11
Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation
Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7
USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS
§§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq]; the Safe Drinking Water
Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et
seq.]; the Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the
Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.];
the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California
Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the
California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the
California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe
Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter -
Cologne Water Quality Act [Water C §§ 13000 et seq.] together with any amendments
of or regulations promulgated under the statutes cited above.
(b) Hazardous Materials. "Hazardous Materials" shall include
any substance which falls within the definition of hazardous substance, hazardous
waste, hazardous material, toxic substance, solid waste, or pollutant or contaminant,
under any Environmental Law.
10.3 District's Obligations. District will not use, occupy, or permit any portion of
the Property to be used or occupied in violation of any Environmental Law or to store
any Hazardous Material.
10.4 Environmental Indemnity. District shall indemnify, defend, and hold City
and its City Council, officers, appointees, volunteers, employees, agents, successors
and assigns free and harmless from and against all Damages (as defined below) that
may at any time be imposed upon, incurred by, or asserted or awarded against City or
any of them in connection with or arising from any breach of District's obligations
hereunder or out of any violation by District of any Environmental Law; or resulting in
the imposition of any lien or claim for the recovery of any costs for environmental
cleanup or other response costs relating to the release or threatened release of
Hazardous Materials due to the construction of any improvements on the Property or
the use or misuse of the Property by the District. The term "Damages" shall mean all
liabilities, demands, claims, actions or causes of action, regulatory, legislative or judicial
proceedings, assessments, levies, losses, fines, penalties, damages, costs and
expenses, in each case as awarded by a court or arbitrator, including, without limitation:
(i) reasonable attorneys', accountants', investigators', and experts' fees and expenses
sustained or incurred in connection with the defense or investigation of any such
liability, and (ii) costs and expenses incurred to bring the Property into compliance with
Environmental Laws. The term "Damages" also includes, expressly, those Damages
that arise as a result of strict liability, whether arising under Environmental Laws and
regulations or otherwise. District's obligations hereunder will survive the expiration or
sooner termination of this Lease.
LEASE AGREEMENT Page 7
7 -12
11. INDEMNITY
11.1 District shall defend, indemnify and hold harmless City, its officers,
directors, employees, 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 District's (i)
improvement, use, maintenance, or operation of the Property (ii) this Lease (iii) the use,
release, generation, storage or disposal of Hazardous Materials (as defined in Section
10.2.1(b)) on the Property by District or any agent of District, (iv) compliance or 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 (vi) the removal, clean -up, encapsulation,
detoxification or any other action taken by Lessee or any agent of District, directly or
indirectly arising out of the presence of Hazardous Materials in, on or around the
Property. If the storage, use and disposal of Hazardous Materials on the Property is
caused by the District or any agent of District 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.
11.2 City shall defend, indemnify, and hold harmless District, 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 City, its officers, officials, consultants, agents,
employees, contractors, or invitees arising with regard to use or entry onto the Property
by City,(ii) the use, release, generation, storage or disposal of Hazardous Materials (and
defined in Section 10.2.1(b)) on the Property by City or any agent of City; (iii) City's
compliance or 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 City's use of the
Property, (vi) the removal, clean -up, encapsulation, detoxification or any other action
taken by City or any agent of City, directly or indirectly arising out of the presence of
Hazardous Materials in, on or around the Property. If the previous, current and future
storage, use and disposal of Hazardous Materials on the Property is caused by the City
or any agent of City 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, City shall
promptly take any and all action required by such agency to investigate and clean -up
such contamination.
12. NOTICE
12.1 All notices pursuant to this Lease shall be deemed given when personally
delivered or deposited in the United States mail, first class postage prepaid, and
addressed as follows:
LEASE AGREEMENT Page 8
7 -13
District: Newport -Mesa Unified School District
Business Office
Attention: Superintendent of Schools
2985 Bear Street, Building A
Costa Mesa, CA 92626
City: City of Newport Beach
Attention: Real Property Administrator
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92658 -8915
13. INSURANCE
13.1 Provision of Insurance. Without limiting either parties' indemnification
obligations, and prior to commencement of Work, the parties shall obtain, provide and
maintain at their own expense during the term of this Lease, policies of insurance of the
type and amounts described below. The parties agree to provide insurance in
accordance with requirements set forth herein. If either party uses existing coverage to
comply and that coverage does not meet these requirements, that party agrees to
amend, supplement or endorse the existing coverage.
13.2 Acceptable Insurers. All excess insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders' Rating
of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the
latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk
Manager.
13.3 Coverage Requirements.
13.3.1 General Liability Insurance. The parties shall maintain commercial
general liability insurance, and if necessary umbrella liability insurance, with coverage at
least as broad as provided by Insurance Services Office form CG 00 01, in an amount
not less than one million dollars ($1,000,000) per occurrence, two million dollars
($2,000,000) general aggregate. The policy shall cover liability arising from premises,
operations, products - completed operations, personal and advertising injury, and liability
assumed under an insured contract (including the tort liability of another assumed in a
business contract) with no endorsement or modification limiting the scope of coverage
for liability assumed under a contract.
13.3.2 Other Insurance Requirements. The policies are to contain, or be
endorsed to contain, the following provisions:
(a) Additional Insured Status. All liability policies including
general liability, excess liability, pollution liability, and automobile liability, but not
including professional liability, shall provide or be endorsed to provide that City and
LEASE AGREEMENT Page 9
7 -14
District and their officers, officials, employees, and agents shall be included as insureds
under such policies.
(b) Primary and Non Contributory. All liability coverage shall
apply on a primary basis and shall not require contribution from any insurance or self -
insurance maintained by City or District.
(c) Notice of Cancellation. All policies shall provide City and
District with thirty (30) calendar days notice of cancellation (except for nonpayment for
which ten (10) calendar days notice is required) or nonrenewal of coverage for each
required coverage.
13.3.3 Professional Liability (Errors & Omissions) Insurance. The parties
shall maintain professional liability insurance that covers any work to be performed in
connection with this Lease, in the minimum amount of one million dollars ($1,000,000)
per claim and two million dollars ($2,000,000) in the aggregate. Any policy inception
date, continuity date, or retroactive date must be before the Effective Date of this Lease
and the parties agree to maintain continuous coverage through a period no less than
three (3) years after completion of any work performed under this Lease.
13.3.4 Workers' Compensation Insurance. The parties shall maintain
Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance
with limits of at least one million dollars ($1,000,000) each accident for bodily injury by
accident and each employee for bodily injury by disease in accordance with the laws of
the State of California, Section 3700 of the Labor Code. The parties shall submit to
each other, along with the certificate of insurance, a Waiver of Subrogation
endorsement in favor of the other party, its officers, agents, employees and volunteers.
13.4 Additional Agreements Between the Parties. The parties hereby agree to
the following:
13.4.1 Evidence of Insurance. The parties shall provide certificates of
insurance to each other as evidence of the insurance coverage required herein as
specified herein for coverage. Insurance certificates and endorsement must be
approved by City's Risk Manager prior to commencement of performance. Current
certification of insurance shall be kept on file with each party at all times during the term
of this Lease. Each party reserves the right to require complete, certified copies of all
required insurance policies from the other party, at any time.
13.4.2 City's Right to Revise Requirements. The City reserves the right at
any time during the term of the Lease to change the amounts and types of insurance
required by both parties by giving the District sixty (60) calendar days advance written
notice of such change.
13.4.3 Enforcement of Lease Provisions. District acknowledges and
agrees that any actual or alleged failure on the part of the City to inform District of non -
LEASE AGREEMENT Page 10
7 -15
compliance with any requirement imposes no additional obligations on the City nor does
it waive any rights hereunder.
13.4.4 Requirements not Limiting. Requirements of specific coverage
features or limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided by any
insurance. Specific reference to a given coverage feature is for purposes of clarification
only as it pertains to a given issue and is not intended by any party or insured to be all
inclusive, or to the exclusion of other coverage, or a waiver of any type.
13.4.5 Self- insured Retentions. Any self- insured retentions must be
declared to and approved by City. City reserves the right to require that self- insured
retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be
considered to comply with these requirements unless approved by City.
13.4.6 City Remedies for Non Compliance. If District or any subcontractor
fails to provide and maintain insurance as required herein, then City shall have the right
but not the obligation to: (a) purchase such insurance; (b) terminate this Lease; or (c)
suspend District's right to proceed until proper evidence of insurance is provided. Any
amounts paid by City shall, at City's sole option, be deducted from amounts payable to
District or reimbursed by District upon demand.
13.4.7 Timely Notice of Claims. The parties shall give each other prompt
and timely notice of claims made or suits instituted that arise out of or result from either
parties' performance under this Lease, and that involve or may involve coverage under
any of the required liability policies.
13.4.8 District's Insurance. District shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own judgment
may be necessary for its proper protection and prosecution of the Work.
14. DEFAULT
14.1 Events of Default. The occurrence of any one (1) or more of the following
events shall constitute a material default and breach of this Lease by District:
14.1.1 The maintenance of the Property in violation of any applicable
provisions of the City's Charter, Municipal Code and Zoning Code, State Law, Federal
Law, and /or the City's Tidelands Grant;
14.1.2 The failure by District to perform any of the provisions of this Lease
and any Exhibits attached hereto to be performed by District, if the failure to perform
continues for a period of thirty (30) calendar days after written notice thereof has been
given to District. If the nature of District's default is such that more than thirty (30)
calendar days are reasonably required for its cure, then District shall not be in default if
LEASE AGREEMENT Page 11
7 -16
District commences the cure within said thirty (30) calendar day period and thereafter
diligently prosecutes the cure to completion; or
14.1.3 The making by District of any general assignment, or general
arrangement for the benefit of creditors; the filing by or against District of a petition to
have District adjudged a bankrupt or a petition for reorganization or arrangement of any
law relating to bankruptcy unless the same is dismissed within sixty (60) calendar days;
the appointment of a trustee or receiver to take possession of substantially all of
District's assets located at the Property or of District's interest in the Lease, where
possession is not restored to District within thirty (30) calendar days; or the attachment,
execution or other judicial seizure of substantially all of District's assets located at the
Property or of District's interest in the Lease, where such seizure is not discharged
within thirty (30) calendar days. Notices given under this paragraph shall specify the
alleged default and the applicable Lease provisions, and shall demand that District
perform the provisions of this Lease or pay the rent that is in arrears, as the case may
be, within the applicable period of time. No such notice shall be deemed a forfeiture or
a termination of this Lease unless City so elects in the notice.
14.2 City's Remedies. In the event of any default by District as defined in this
Lease, City may, in addition to any rights or remedies permitted by law, do the following:
14.2.1 Terminate District's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and District shall immediately
surrender possession of the Property to City. In such event, City shall be entitled to
recover from District all amounts to which City is entitled pursuant to Section 1951.2 of
the California Civil Code, or any other provision of law, including, without limitation, the
following:
(a) Any other amount necessary to compensate City for all
detriment proximately caused by District's failure to perform obligations pursuant to this
Lease or which in the ordinary course of things would be likely to result from the breach,
including, without limitation, the cost of recovering possession, expenses of reletting
(including necessary repair, renovation and alteration, and any other reasonable costs.)
The "worth at the time of award" of all rental amounts other than that referred to in
clause (i) above shall be computed by allowing interest at the rate of five percent (5 %)
per annum from the date amounts accrue to City. The worth at the time of award of the
amount referred to in clause (i) shall be computed by discounting such amount at one
(1) percentage point above the discount rate of the Federal Reserve Bank of San
Francisco at the time of award.
14.2.2 Without terminating or affecting the forfeiture of this Lease or, in the
absence of express written notice of City's election to do so, relieving District of any
obligation pursuant to this Lease, City may, but need not, relet all or a portion of the
Property at any time, or from time -to -time, and on such terms and conditions as City, at
its sole discretion, deems appropriate. Whether or not the Property is relet, District shall
pay all amounts and perform all obligations required by this Lease up to the date that
City terminates District's right to possession of the Property. District shall make such
LEASE AGREEMENT Page 12
7 -17
payments at the time specified in the Lease and City need not wait until termination of
the Lease to recover sums due by legal action. If City relets all or a portion of the
Property, the reletting shall not relieve District of any obligation pursuant to this Lease;
provided, however, City shall apply the Rent or other proceeds actually collected by
virtue of the reletting against amounts due from District. City may execute any
agreement reletting all or a portion of the Property and District shall have no right to
collect any proceeds due City by virtue of any reletting. City shall not, by any reentry or
reletting or other act, be deemed to:
Property;
(a) Have accepted any surrender by District of this Lease or the
(b) Have terminated this Lease; or
(c) Have relieved District of any obligation pursuant to this
Lease unless City has given District express written notice of City's election to do so.
14.2.3 City may terminate this Lease without cause by express prior
written notice of at least three hundred sixty -five (365) calendar days to District of its
election to do so. The termination shall not relieve District of any obligation which has
accrued prior to the date of termination. In the event of termination, City shall be entitled
to recover the amounts specified in this Lease.
14.2.4 Notwithstanding any other provision of this Lease as permitted by
California Public Resources Code Section 6312, or any successor statute, the Parties
agree that upon expiration or earlier termination of this Lease the City shall have no
liability or obligation to pay compensation for any improvements made to the Property.
Improvements existing on the Property at the time of expiration or termination shall be
handled pursuant to Section 15.2.
14.3 Default By City. City shall not be in default under this Lease unless City
fails to perform obligations required of City within a reasonable time, but in no event
later than thirty (30) calendar days after written notice by District to City specifying
wherein City has failed to perform such obligation. If the nature of City's obligation is
such that more than thirty (30) calendar days are required for performance, then City
shall not be in default if City commences performance within such thirty (30) calendar
day period and thereafter diligently prosecutes the same to completion. Alternatively,
City may in its sole and absolute discretion decide not to cure a default and instead
elect to terminate this Lease, upon thirty (30) calendar day prior written notice. In the
event of termination under this section City shall owe no compensation to District.
14.4 No Damages. The Parties acknowledge that City would not have entered
into this Lease if it were to be liable in damages under, or with respect to, this Lease or
any of the matters referred to in this Lease. Accordingly, District covenants on behalf of
itself and its successors and assigns, not to sue City (either in its capacity as City in this
Lease or in its capacity as the City of Newport Beach) for damages or monetary relief
LEASE AGREEMENT Page 13
7 -18
for any breach of this Lease by City or arising out of or connected with any dispute,
controversy, or issue between City and District regarding this Lease or any of the
matters referred to in this Lease or any future amendments or enactments thereto, or
any land use permits or approvals sought in connection with the Property, the Parties
agreeing that declaratory and injunctive relief, mandate, and specific performance shall
be District's sole and exclusive judicial remedies.
14.5 Stay of Obligations. Neither Party shall be under any obligation to perform
or comply with its obligations pursuant to this Lease after the date of any default by the
other Party.
14.6 Determination of Rental Value. In any action or unlawful detainer
commenced by City, the reasonable rental value of the Property shall be deemed to be
the amount of Rent and /or additional monies due (such as reimbursement for costs of
Infrastructure improvements or the payment of taxes or assessments) for the period of
the unlawful detainer, unless District shall prove to the contrary by competent evidence.
14.7 Waiver of Rights. The failure or delay of either Party to exercise any right
or remedy shall not be construed as a waiver of such right or remedy or any default by
the other Party. City's acceptance of any Rent shall not be considered a waiver of any
preexisting breach of default by District other than the failure to pay the particular Rent
accepted regardless of City's knowledge of the preexisting breach of default at the time
Rent is accepted.
14.8 Waiver of Right of Redemption. District waives any right of redemption or
relief from forfeiture pursuant to California Code of Civil Procedure Sections 1174 and
1179 and /or pursuant to any existing or future statutory or decisional law in the event
District is evicted or City takes possession of the Property by reason of District's default.
15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION
15.1 Surrender of Property. Upon the expiration or termination of this Lease,
District agrees to peaceably deliver possession of, and agrees to vacate without
contest, legal or otherwise, the Property. City, at its sole discretion, may record a
document evidencing the expiration or termination of the leasehold interest. District
waives any right to receive relocation assistance or similar form of payment from City.
15.2 Removal of Improvements. Upon the expiration or termination of this
Lease, City shall have the right to accept free of charge ownership of the Improvements
or require District to remove the Improvements. If City elects to accept ownership of the
Improvements, District shall provide all necessary documents to City to effectuate
transfer of ownership. Removal of any building or improvement shall be at the sole cost
and expense of District and removal must be complete no later than one hundred eighty
(180) calendar days after expiration of the term of this Lease. District shall fill all
excavations and remove all foundations, debris and other parts of the buildings or
improvements remaining after removal and surrender possession of the Property to City
in a clean and orderly condition.
LEASE AGREEMENT Page 14
7 -19
16. STANDARD CONDITIONS
16.1 Successors in Interest. This Lease shall be binding upon the successors
of both Parties.
16.2 Compliance with all Laws. District shall at its own cost and expense
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted.
16.3 Waiver. A waiver by either Party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
16.4 Integrated Contract. This Lease represents the full and complete
understanding of every kind or nature whatsoever between the Parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein. No verbal agreement or implied covenant shall be held to vary the provisions
herein.
16.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Lease and any other attachments attached hereto, the
terms of this Lease shall govern.
16.6 Interpretation. The terms of this Lease shall be construed in accordance
with the meaning of the language used and shall not be construed for or against either
Party by reason of the authorship of the Lease or any other rule of construction which
might otherwise apply.
16.7 Amendments. This Lease may be modified or amended only by a written
document executed by both District and City and approved as to form by the City
Attorney,
16.8 Severability. If any term or portion of this Lease is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Lease shall continue in full force and effect.
16.9 Controlling Law and Venue. The laws of the State of California shall
govern this Lease and all matters relating to it and any action brought relating to this
Lease shall be adjudicated in a court of competent jurisdiction in the County of Orange,
State of California. .
16.10 No Attorney's Fees. In the event of any dispute or legal action arising
under this Lease, the prevailing Party shall not be entitled to attorney's fees.
LEASE AGREEMENT Page 15
7 -20
16.11 Counterparts. This Lease may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
16.12 Time of Essence. Time is expressly declared to be of the essence in this
Lease.
16.13 Recordation of Lease. Pursuant to California Government Code Section
37393 the Parties shall execute, acknowledge and City may record a copy of this Lease
at any time following the date hereof
[SIGNATURES ON NEXT PAGE]
LEASE AGREEMENT
Page 16
7 -21
IN WITNESS WHEREOF, we have executed this Lease as of the day and year
written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: t M /I `r
By: ZA r ({ °F
Aaron C--Harp GtAn HJ1I /tk
City Attorney
I'o %aM30
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
A California municipal corporation
Edward D. Selich
Mayor
DISTRICT: NEWPORT -MESA UNIFIED
SCHOOL DISTRICT, a political
subdivision of the State of California
Date: r 111q 1'r4
By:
Name: Paul H. Reed
Title: Deputy Superintendent & CBD
Date: ////I I i�
By:
Name: Patricia L. Dreher
Title: Notary Public
[END OF SIGNATURES]
Attachments: Exhibit A: Legal Description
Exhibit B: Depiction of Property
obf Ing
PATRICIA L. DREHER
Commission M 1919258
a i Notary Public • Calilornia
z x�. Orange County
Mv Comm. Expires Jan 26, 2015 r
LEASE AGREEMENT Page 17
7 -22
CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189
r� s e c x, r ass. c c a r mr. c c� s r� r s o r, r� rs r o c s c� rw r, arm .� e c r a s, G r a s s e 6sa s. c cs s e c a� r� : c `. . f ec e sr. t eK x• sr. r suu m e e� ss rs
A notary public or other officer completing this certificate verifies only the Identity of the individual who signed the
document to which thle certificate Is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of Orange )
On 11 -19 -14
Date
before me, Patricia L. Dreher, Notary Public
personally appeared Paul H. Reed,
Here Insert Name and Title of the Officer
Superintendent and CBO, Newport-Mesa USD
Name(s) of Signer(s)
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/sheRhey executed the same in
his/her /their authorized capacity(les), 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.
PATRICIA L.DREHER
Commission M 1919258 ��/J1
Z , �r - Notary Public - California £ Signature / ai%(,C��,
Z �' Orange County Signature of Notary Public
M Comm. Ex ues Jan 26, 2015
Place Notary Seal Above
OPTIONAL
Though this section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Doeument�ease Agreement- City of Newport Bea6hocument Date: November 19, 2014
Number of Pages: 17 Signer(s) Other Than Named Above: Rush N. Hill, 11, Aaron C. Harp
Capacity(les) Claimed by Signers)
Signer's Name: Rush N. Hill, 11
LJ Corporate Officer — Tltle(s):
❑ Partner — ❑ Limited ❑ General
• Individual ❑ Attorney in Fact
• Trustee ❑ Guardian or Conservator
13 Other. Mayor
Signer Is Representing: City of Newport Beach
Signer's Name: Aaron C. Harp
• Corporate Officer — Title(s):
• Partner — ❑ Limited O General
• Individual N Attorney in Fact
O Trustee ❑ Guardian or Conservator
D Other:
Signer Is Representing: City Attorney's Office
02014 National Notary Association • www.NationalNotary.org • 1- 800-US NOTARY (1 -800- 876 -6827) Item #5907
7 -23
EXHIBIT A
LEGAL DESCRIPTION
PLAYGROUND AREA AT NEWPORT ELEMENTARY SCHOOL
Those portions of West Ocean Front, formerly known as "Ocean Avenue ", 65 feet
in width, Lot 13A, and Lot 12A of Section B, Newport Beach, as per map recorded in
Book 4, Page 27 of Miscellaneous Maps, Records of Orange County, California, lying
south of the West Ocean Front public sidewalk, described as follows:
Beginning at the southwesterly corner of Lot 13, Block 12 of said Section B;
thence along the prolongation of the westerly line of said Lot 13, S 160 43' 26 "W 357.00
feet; thence N740 29' 31"W 429.28 feet to the southwesterly prolongation of the
centerline of 14th Street as shown on said map; thence along said centerline
prolongation N11° 41' 17 "E 109.16 feet; thence N780 18' 43 "W 32.00 feet; thence N110
41' 17 "E 92.00 feet; thence S78° 18' 43 "E 32.00 feet to said centerline prolongation;
thence along said centerline prolongation N11 ° 41' 17 "E 147.00 feet to point on a curve,
concave southerly and having a radius of 5454.65 feet, said curve containing the
northerly right -of -way of Ocean Avenue as shown on said map; thence easterly 460.29
feet along said curve and along the southerly line of Block 13 of said map through a
central angle of 4° 50' 06" to the point of beginning.
Containing 3.697 acres (gross)
Playground Area: 3.482 acres (net)
Basis of Bearings: the westerly line of said Lot 13, Block 12, of Section B, being
N160 43' 26 "E.
7 -24
i
DEPICTION OF PROPERTY
7 -25
I
iSAi
A
-Raqv
EXHIBIT B, MAP
PLAYGROUND AREA AT
NEWPORT ELEMENTARY SCHOOL
- lft:
s, I
Mv� 15,1013
7-26
WWC:mec
1/19/60
ATTACHMENT CC 2
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into this day
of 1960, between the CITY OF NEWPORT BEACH, a
municipal c poration, hereinafter referred to as "City ", and the
NEWPORT BEACH SCHOOL DISTRICT OF ORANGE COUNTY, hereinafter referred
to as "School District ";
WITNESSETHC
.WHEREAS., the City is the owner of the tidelands and filled
lands in the tcorporate Aimits of the City lying southerly of Ocean
Front between the southerly extension,of 13th Street and the south -
erly..extension.of 14th Street, - hereinafter more particu -larly de
scribed, by virtue of a grant from the.State of California set out
in Chapter 813 of Statutes, of 1929, page 1704•, and -
WHEREAS, City has a perpetual easement for street, park
and public pleasure purposes over Block 13 A, Section B, of Newport
Beech, which lies between the southerly extensions of 13th and 14th
Streets and between Ocean Front and said tidelands and filled lands
as shown on a map recorded in Book 4, page 27, Miscellaneous Maps,
Records of Orange County, California; and
WHEREAS, School District owns Block 13 of Newport Beach,
as per map recorded in Book 4, page 27, of said maps, which lies
between 13th Street and 14th Street and between Balboa Boulevard
and Ocean Front; and
WHEREAS, School District operates a public elementary
school on said Block 13 and uses and has need for the use of said
Block 13 A and the adjoining tidelands and filled lands oceanward
of said Block 13 A in connection with said school for playground
purposes; and
WHEREAS, the leasing of the tidelands and filled lands
hereinafter described to School District for the purpose and under
the terms and conditions set out herein would not interfere with
or be inconsistent with the requirements of commerce or navigation
7 -27
at Newport Harbor and is not inconsistent with the title upon which
said land is held; and
WHEREAS, the trespass rights hereby granted over the
City °s easement on said Block 13 A under the terms and conditions
set out herein are not inconsistent with the grant of easement to
City over said Block 13 A;
NOW, THEREFORE, the parties agree:
1. City hereby leases to School District for playground
purposes only and subject to the terms and conditions her con®.
twined, for a term of fifty (50) years beginning on the date hereof,
those certain tidelands and filled lands in the corporate limits of
the City more particularly described as follows;
Beginning at the southerly corner of Lot 1 of
Block 13, Section B, of Newport Beach, as per map
recorded in Book 4, page 27, Miscellaneous Maps,
Records of Orange County, California; thence
southerly along the southerly prolongation of the
easterly line of said Lot 1 a distance of 400 ft.;
thence westerly along a line parallel to and 400
£t. southerly of the south line of said Block 13
to a point in the southerly prolongation of the
westerly line of Lot 13 in said Block 13; thence
northerly along said southerly prolongation of the
westerly line of said Lot 13 to the southerly line
of said Block 13; thence easterly along the south-
erly line of said Block 13 to the point of beginning;
excepting therefrom Ocean Front street right -of -way,
and further excepting Block 13 A, Section B', of.
Newport Beach, as per map recorded in Book 4, page
27, Miscellaneous Maps, of said Records of Orange
County.
2. City hereby grants a license and right of trespass
to School District for playground purposes only, subject to the
terms and conditions herein contained, for a term of fifty (50)
years beginning on the date hereof,.over that certain parcel of
land in the City between the southerly extension of 13th Street
and the southerly extension of 14th Street, more particularly
described as:
Block 13 A, Section B, Newport Beach, as per map
recorded in Book 4, page 27, of Miscellaneous Maps,
Records of Orange County, California.
2.
7 -28
3. School District shall use said tidelands and filled
lands and said Block 13 A to provide a playground area for use by
children participating in activities of the public school on said
Block 13 and for use by the public for park and pleasure purposes
when the same is not being used by said children.
4. School District shall not construct any buildings or
fences on the tidelands and filled lands or on said Block 13 A with-
out the prior approval of the City Council but may place and maintain
playground equipment on said land which shall be the property of
School District and not of City.
5. Should School District sell. said Block 13 on which
the elementary school is located, or any part thereof, or should
School District discontinue the operation of the public school on
said Block 13 for a period of two (2) years, then the lease and the
license and right of trespass hereby granted shall automatically
terminate and City may re -enter the premises and take possession
thereof and remove all persons and property therefrom.
6. Notwithstanding the lease and the license and right
of trespass granted to School District, City. reserves the right to
enter the land or any part thereof to construct and maintain groins,
bulkheads or breakwaters to protect said premises and other land
within City from damage or erosion; provided,'however, that nothing
contained herein shall require the City to construct or to maintain
groins, bulkheads or breakwaters on said land or elsewhere.
7. School District shall not assign the leasehold or
license or right acquired hereunder without the prior written con-
sent of City. .
8. If during the term hereof the tidelands and filled
3 lands owned by City or the perpetual easement over said Block 13 A
are taken by eminent domain, other than the leasehold interest of
School District being taken by City, then the leasehold interest
and license and right of School District hereby granted shall ter-
minate as to the property taken and School District shall remove
3.
7 -29
all equipment and improvements therefrom and all compensation awarded
for such property shall belong to City.
9. A measure shall be placed upon the ballot in the
regular municipal election of City on April 12, 1960, to submit this
lease to the electors of City-for approval and the same is subject to
such approval by a majority vote of said electors voting thereon.
Notwithstanding the initial approval of the electors of
City being required, the City Council and School Board of School
District may amend the terms of this agreement at any time during
the term hereof to better serve the public interest or better accom-
plish the purposes of the lease; provided, however, that the term
hereof may not be extended by the City Council and School Board
beyond the fifty (50) years herein provided.
10. Subject to applicable provisions of law, it is under-
stood that all rights granted hereunder are subject to easements,
rights-of-way and similar burdens, if any, now existing or hereto-
fore granted by City or its predecessors in, to, over or under the
premises for any purpose.
11. In the event this agreement or any provision hereof
is held to be invalid or ineffective by any court, that decision
shall not affect the remainder of the provisions hereof and neither
party hereto shall be liable to the other for any loss or damage
of any nature whatsoever suffered or claimed to be suffered by
reason of such invalidity or ineffectiveness.
12. This agreement shall be binding upon the successors
of both parties.
IN WITNESS WHEREOF, we have executed this lease agreement
as. of the day and year first above written.
CITY NEWPORT BEACH, a muni- NEWPORT BEACH SCHOOL DISTR {CT
ci a corpor /q�io OF ORA E COUNTY
By / O > BY
Mayor
test. Attest,
City er c
4.
7 -30
ATTACHMENT CC 3
7 -31
TAB% )"_
w/r
m
I�r'4
M1 5._ I jjp[[ �
4 rm-+iJ j roe r,, 1
t
f
Playground /Lease
Premises
• ti xr
Ali
1 � M
+�R112i_
`.I
J �F
AY
1�i
Newport
Beach
GIS
�p�`x'POgr
° m 0 200 400
G
Feet
C�<IFOP•�'
i r1
0
.'M osI
Disclaimer: Every reasonable effort has been made to assure the
accuracy of the data provided, however, The City of
Newport Beach and its employees and agents
disclaim any and all responsibility from or relating to
any results obtained in its use.
Imagery: 2009 -2013 photos provided by Eagle
Imaging www.eagleaerial.com
7 -32
TAM
y
0
1
^f
d,o
r
0
y
f I.
m
M �
N
Newport
Beach Disclaimer: Every reasonable effort has been made to assure the
accuracy of the data provided, however, The City of
GAS Newport Beach and its employees and agents
disclaim any and all responsibility from or relating to
�ia'POgr any results obtained in its use.
° m 0 100 200
_ Imagery: 2009 -2013 photos provided by Eagle
Feet Imaging www.eagleaerial.com
1/22/2015
7 -33
ATTACHMENT CC 4
F -7
INCOME PROPERTY
The City owns and manages an extensive and valuable assortment of property
including streets, parks, beaches, public buildings and service facilities. The City also
owns and operates a yacht basin, a mobile home park, a luxury residential development
and various other income properties. Most of the income property is tidelands, filled
tidelands or waterfront. Unencumbered fee value of income property is estimated at
upwards of one hundred million dollars, and income typically contributes ten percent
of all City revenues.
As owner /manager of property, the City is the steward of a public trust, and state law
requires the City to maximize its returns on state - managed property or be subject to a
charge of making a gift of public funds. Nevertheless, the City Council recognizes the
importance of this property not only as a revenue generator, but also as a means to
provide otherwise unfeasible uses and facilities to benefit the community.
In managing its property, the City will continually evaluate the potential of all City
owned property to produce revenue. This may include leasing unused land, renting
vacant space, and establishing concessions in recreation areas or other similar
techniques. The City Council will evaluate the appropriateness of establishing new
income properties using sound business principles and after receiving input from
neighbors and users.
The policy of the City Council is that income property be managed in accordance with
the following:
A. Whenever a lease, management contract, concession, sale or similar action
regarding income property is considered by the City, an analysis shall be
conducted to determine the maximum or open market value of the property.
This analysis shall be conducted using appraisals or other techniques to
determine the highest and best use of the property and the highest value of the
property.
B. All negotiations regarding the lease, management contract, concession, sale or
similar action regarding income property shall include review of an appraisal or
analysis of the use being considered for the property conducted by a reputable
and independent professional appraiser, real estate consultant or business
consultant.
C. The City shall seek, whenever practical and financially advantageous, to operate
or manage all property and facilities directly with City staff or contractors.
D. In all negotiations regarding the lease, management contract, concession, sale or
similar action regarding a non - residential income property, the City shall seek
1
7 -34
ION
revenue equivalent to the open market value of the highest and best use; and,
whenever possible the City shall conduct an open bid or proposal process to
insure the highest financial return.
E. Whenever less than the open market or appraised value is received or when an
open bid process is not conducted, the City shall make specific findings setting
forth the reasons thereof.
Such findings may include but need not be limited to the following:
1. The City is prevented by tideland grants, Coastal Commission guidelines or
other restrictions from selling the property or converting it to another use.
2. Redevelopment of the property would require excessive time, resources and
costs which would outweigh other financial benefits.
3. Converting the property to another use or changing the manager,
concessionaire or lessee of the property would result in excessive vacancy,
relocation or severance costs, which would outweigh other financial benefits.
4. Converting residential property to another use or opening residential leases
to competitive bid would create recompensable liabilities and other inequities
for long -term residents.
5. The property provides an essential or unique service to the community that
might not otherwise be provided were full market value of the property be
required.
6. The property serves to promote other goals of the City such as affordable
housing, preservation of open space or marine related services.
F. Generally, lengths of leases, management contracts, concessions or similar
agreements will be limited to the minimum necessary to meet market standards
and will contain appropriate reappraisal and inflation protection provisions.
Also, all agreements shall contain provisions to assure complete audits
periodically through their terms.
G. All negotiations regarding the lease, management contract, concession, sale or
similar action regarding income property shall be conducted by the City
Manager or his /her designee under the direction of any appropriate City
committees.
H. To provide an accurate accounting of actual net revenues generated by the City's
income property, all costs and charges directly attributable to the management of
2
7 -35
100
a specific income property shall be debited against the gross revenues collected
on that property in the fiscal year the costs are incurred. Costs and charges
include property repairs and maintenance, property appraisals, and consultant
fees, as authorized by the City Council, City Manager or by this Income Property
Policy.
I. The City Manager or his /her designee is authorized to sign a lease, management
contract, concession or similar agreement or any amendment thereto, on behalf
of the City. Notwithstanding the foregoing, the City Manager or his /her
designee, or a City Council member, may refer any lease, management contract,
concession or similar agreement or any amendment thereto, to the City Council
for its consideration and /or action.
Adopted - July 27,1992
Amended - January 24,1994
Amended - February 27,1995
Amended - February 24,1997
Amended - May 26,1998
Amended - August 11, 2009
Amended - May 14, 2013
Formerly F -24
3
7 -36