HomeMy WebLinkAboutS19 - Bait Barge Lease in the Harbor Entrance ChannelCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. S19
April 13, 2010
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Chris Miller, Harbor Resources Manager
(949) 644 -3043, cmiller(a newportbeachca.gov
SUBJECT: Bait Barge Lease in the Harbor Entrance Channel
ISSUE:
Should San Pedro Bait be selected as the next bait barge operator in the harbor
entrance channel?
RECOMMENDATIONS:
1. Select San Pedro Bait Company as the next bait barge operator based on the
proposal submitted in response to the City's Request for Proposals dated
December 4, 2009.
2. Authorize the Council to accept the RFP process as a fair market value
determination in lieu of conducting an appraisal as required for leases in NBMC
17.60.060(D).
3. Authorize the Mayor to execute the Lease Agreement attached to this report.
BACKGROUND:
In 1987, the City Council issued a five -year permit to the Newport Beach Barge
Company (later known as Newport Bait Company LLC) to operate a bait barge in the
entrance channel. This operation had successfully served Newport's sportfishing and
recreational fisherman for over twenty years, and the harbor community has appreciated
the consistent availability of live bait at a convenient location. During this period,
Newport Bait Company's permit had been renewed several times over the years, usually
in five year increments. The rent in the most recent lease was $665.56 per month.
In 2009, the Newport Bait Company sold the business to San Pedro Bait Company, who
took over the operations in Newport Harbor via a short term lease with the City until a
formal RFP could be issued. During this interim time, San Pedro Bait improved the bait
barge operations and provided a reliable source of "cured" bait for the local fishing
community. (The bait barge is currently deployed under a month to month extension of
the interim lease in order to satisfy the bait demands of the local fishermen.)
Bait Barge Lease
April 13, 2010
Council Policy F -7 requires the City "to conduct an open bid or proposal process to
ensure the highest financial return ", and it does not permit unlimited renewals of existing
permits.
NBMC 17.60.060 describes leases and the processes involved. Specifically, subsection
D- Revenue states: "Rent under this Section shall be based upon fair market value, as
determined by the City Council. Such determination shall be based upon the findings of
a City selected appraiser." Primarily, this section applies to the many commercial
marinas in the harbor, and gives staff direction when converting these commercial pier
permits to leases as the Code intends. While the bait barge falls under these
requirements, staff believes the intent of fair market value was satisfied through the RFP
process.
On December 4, 2009, the City issued a Request for Proposals to operate a bait barge
in the channel entrance. Harbor Resources distributed the RFP to local Southern
California bait operators as well as posting it on the City's website; and San Pedro Bait
was the only respondent.
In light of maintaining immediate availability of bait for the fishing community, and with
the projected time and cost involved in completing an appraisal, staff is recommending
that the RFP process be sufficient as a fair market value indicator for the bait barge in
Newport Harbor.
PROPOSED TERMS OF THE AGREEMENT:
TERM: 5 years, expiring March 31, 2015
RENT: $700 per month during the operating period (April 1 through November
30,24/7)
BUSINESS PURPOSES: The Bait Barge and Premises shall be used by Lessee solely
for receiving, maintaining and /or curing of live bait for sale to
commercial, charter and private boats. Lessee shall ensure
that it will maintain sufficient live bait to adequately supply
the needs of sport fishermen, commercial and recreational
fishermen at Newport Harbor.
Lessee expressly agrees not to use the Bait Barge and
Premises for any other purpose or engage in or permit any
other business activity within or from the Bait Barge and
Premises including but not limited to, the sale or rental of
any goods, the sale of any food, beverages, or other
concessions not approved for sale by City or the provision of
any services. Approved concessions are limited to
promotional t- shirts, sweatshirts and sun - visors.
SIGNAGE: Lessee may place unlit signs upon the bait barge subject to conformity
with NBMC 17.35.090.
LIGHTING
Bait Barge Lease
April 13, 2010
Bait barge will have no lighting other than that required for navigational
purposes per Coast Guard regulations and safety purposes.
GENERATOR: If a generator is to be used, it shall be subject to approval of the Harbor
Resources Manager.
SPACE: Enclosed spaces on the bait barge shall be used only by employees of
the bait barge and only as a pilot house, office, storage room and /or
restroom.
COVERS: Bait wells and covers shall comply with NBMC Title 17.
ANCHORAGE: The method of anchoring the Bait Barge shall be subject to the approval
of the Harbor Resources Manager.
SHORT TERM BERTHING: Defined as the minimum amount of time to perform the
following activities:
a) Bait boats — for the purpose of unloading live bait on
the bait barge
b) Sportfishing, commercial or recreational vessels — for
the purpose of buying bait
c) Service vessels — for the purpose of maintaining
sewage holding tanks or other maintenance activities.
No long term berthing is allowed.
BAIT BOAT: This Agreement is not applicable to any bait boat that may be owned by
Lessee. All bait boats operating in the City of Newport Beach must apply
for and obtain a Marine Activities Permit pursuant to the terms of NBMC
Title 17.
BAIT BARGE: Only the bait barge described and depicted on Exhibit "A" may be used at
the premises.
BIRDS AND SEA LIONS: Bait receivers must be equipped with hard covers to deter
birds and sea lions. Lessee shall establish a maintenance
program to control the congregation of birds and sea lions.
ENVIRONMENTAL REVIEW:
This item is exempt from environmental review under Section 15301 of the CEQA
Guidelines, which pertains to the leasing of existing facilities involving negligible or no
expansion beyond that existing at the time of lead agency's determination.
Bait Barge Lease
April 13, 2010
PUBLIC NOTICE:
This agenda item has been noticed according to the Ralph M. Brown Act (72 hours in
advance of the public meetings at which the City Council considers the item).
Submitted by:
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C ris Miller
Harbor Resources Manager
Attachments: Lease Agreement with San Pedro Bait Company
WHEN RECORDED, RETURN TO:
City of Newport Beach
3300 Newport Beach Blvd.
P.O. Box 1768
Newport Beach, California 92658 -8915
Attn: City Clerk
(Exempt From Recording Fees Pursuant to California Government Code 6103)
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
AGREEMENT FOR LEASE OF SUBMERGED PUBLIC TRUST LANDS
This Agreement for Lease of Public Trust Lands ( "Agreement ") is entered into
this _ day of April 2010, by and between the City of Newport Beach, a California
municipal corporation ( "Lessor" or "City "), and San Pedro Bait Company, a California
corporation, whose address is 1231 West 26th Place, San Pedro, California 90731
( "Lessee "). Lessor and Lessee are at times referred to individually as "Party" and
collectively as "Parties" herein.
RECITALS
A. Lessor is a municipal corporation duly organized and validly existing under the
laws of the State of California with the power to carry on its business as it is now
being conducted under the statutes of the State of California and the City's
Charter;
B. The State of California became the owner of tidelands on admission to the union
in 1850. Lessor manages those tidelands pursuant to various legislative grants
from the State.
C. Newport Bait Company has been operating the bait barge in the City's harbor
since 1986 by permit ( "Bait Barge "). Lessee purchased Newport Bait Company
and its assets, including the Bait Barge;
D. Newport Beach Municipal Code ( "Code ") Section 17.60.060(A) states that if
public trust lands are used for commercial purposes by an entity other than the
City, then that entity shall enter into a lease with the City. The Bait Barge is
located upon public trust lands and therefore requires a lease.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
benefits, obligations and agreements set forth herein, the Parties agree as follows:
1. Premises
1.1 Leased Premises
Lessor hereby leases to Lessee those submerged tidelands located at the
channel entrance in Newport Harbor, closest to the eastern jetty,
approximately 330 35' 36.67 "N and 1170 52' 42.18V ( "Premises "). The
location of the Premises is generally depicted in the attached Exhibit "A"
which is hereby incorporated by reference.
1.2 Relocation
During the term of this Agreement, Lessor, in its sole discretion, may
direct Lessee to relocate the Bait Barge, temporarily or permanently, to a
location of Lessor's designation, at Lessee's sole cost and expense. The
area upon which the Bait Barge is relocated shall be designated the new
Premises.
Any such relocation shall not entitle Lessee to any compensation or
reimbursement from Lessor. In no instance will the Bait Barge be
permitted in a location which is in conflict with the main navigational
channels.
1.3 Terms, Covenants and Conditions
The rights granted herein are subject to the terms, covenants and
conditions hereinafter set forth, and Lessee covenants, as a material part
of the consideration for this Agreement, to keep and perform each and
every term, covenant and condition of this Agreement.
2. Term
The term of this Agreement shall commence on the date first written above and
shall terminate on March 31, 2015 ( "Term "), unless terminated earlier as
provided in this Agreement.
2.1 If Lessee holds over after expiration of the Term, without the express
written consent of Lessor, Lessee shall become a tenant at sufferance, or
in the sole and absolute discretion of Lessor, a month -to -month tenant,
subject to each and all of the terms of this Agreement as may reasonably
and logically be construed as applicable to a tenancy at sufferance or a
month -to -month tenancy, and any holding over shall not constitute a
renewal hereof or an extension for any further term. During such holding
over, Base Rent (as defined in Section 3.1) shall be payable at a monthly
rate equal to one hundred and fifty percent (150 %) the Base Rent
applicable during the last monthly rental period of the Term. Nothing
Lease of Submerged Public Trust Lands Page 2
contained in this Section 2.1 shall be construed as consent by Lessor to
any holding over by Lessee, and Lessor expressly reserves the right to
require Lessee to surrender possession of the Premises to Lessor as
provided in this Agreement upon the expiration or other termination of this
Agreement.
3. Rent
3.1 Base Rent. Lessee shall pay to Lessor Seven Hundred Dollars and
no /100 ($700.00) per month ( "Base Rent "), during the Operating Period
(as defined in Section 5.4), due and payable in advance on the first (1S)
day of each month upon the execution of this Agreement. The Base Rent
shall increase annually on May 1St of each year of the Term according to
the Consumer Price Index ( "CPI "), but in no event shall the Base Rent
decrease. Base Rent for any partial calendar month during which the
Operating Period commences or terminates shall be prorated based on
the actual number of days in such month.
3.2 Acceptance. Lessor's acceptance of any money paid by Lessee as rent
payment for the Premises shall not be construed as an admission of the
sufficiency of the amount owed to Lessor. Acceptance of such rent by
Lessor shall in no event constitute a waiver of any default by Lessee with
respect to any overdue amount, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder.
3.3 Late Charge. Lessee hereby acknowledges that the late payment of Base
Rent or other sums due hereunder will cause Lessor to incur costs not
contemplated by this Agreement, the exact amount of which is extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges. Accordingly, any payment of any sum to be paid
by Lessee not paid within five (5) calendar days of its due date shall be
subject to a ten percent (10 %) per month late charge. Lessor and Lessee
agree that this late charge represents a reasonable estimate of such costs
and expenses and is fair compensation to Lessor for its loss suffered by
such late payment by Lessee. Late Charges shall constitute additional
rent.
3.4 In Addition to Other Fees. Rental payments required to be paid pursuant
to this Agreement shall be in addition to any other fee or fees required to
be paid by Lessee, including, but not limited to, business license fees and
permit fees.
3.5 Payment Location. All payments and other sums payable pursuant to this
Agreement shall be directed to:
Lease of Submerged Public Trust Lands Page 3
City of Newport Beach
Attn: Cashiering Division
3300 Newport Blvd.
PO Box 1768
Newport Beach, CA 92658
or at such other place as Lessor may hereafter designate in writing.
4. Utilities, Taxes and Assessments
Lessee shall be solely responsible for obtaining all utilities for the Bait Barge and
Premises, and shall promptly pay, and discharge prior to delinquency, any and all
charges for water, gas, heat, electricity, telephone, rubbish, telephone, janitorial,
garbage disposal, sewer and other services furnished to the Bait Barge and
Premises.
Lessee shall pay, prior to delinquency, any and all possessory interest taxes,
property taxes, all taxes assessed against and levied upon fixtures, furnishings,
equipment, or improvements, and all other personal property of Lessee located
on the Bait Barge and Premises, real property taxes, and fees, service charges
and assessments which may at any time be imposed or levied by any public
entity and attributable to Lessee's use of the Bait Barge and Premises. Lessor
hereby gives notice to Lessee, pursuant to Revenue and Tax Code Section
107.6, that this Agreement may create a possessory interest which is the subject
of property taxes levied on such interest, the payment of which taxes shall be the
sole obligation of Lessee.
Any payments under this Section shall not reduce the rental payments due
Lessor under this Agreement, and Lessor shall have no liability for such
payments.
Lessee shall hold Lessor harmless from any and all loss, damage, or liability that
may result from the failure of Lessee to comply with the provisions of this
Section.
5. Use of the Premises
5.1 Business Purposes
The Bait Barge and Premises shall be used by Lessee solely for receiving,
maintaining and /or curing of live bait and approved concessions for sale to
commercial, charter and private boats. Lessee shall ensure that it will
maintain sufficient live bait to adequately supply the needs of sport
fishermen, commercial and recreational fishermen at Newport Harbor.
Lessee expressly agrees not to use the Bait Barge and Premises for any
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:tea
5.3
5.4
5.5
5.6
other purpose or engage in or permit any other business activity within or
from the Bait Barge and Premises including but not limited to, the sale or
rental of any goods, the sale of any food, beverages, or other concessions
not approved for sale by City or the provision of any services.
Concessions approved for sale include and are limited to long sleeve and
short sleeve t- shirts, sweatshirts, and sun - visors. The list of approved
concessions may be expanded pursuant to the Harbor Resource
Manager's written approval. Lessee shall pay California State sales tax
on all concession items.
Standard of Operations
Lessee shall operate and manage the Bait Barge in a manner comparable
to other high quality businesses providing similar services. Prices for all
sales shall be prominently displayed on the Bait Barge during all hours of
operation.
Signage /Advertising Display
Lessee may, at its own expense, place unlit signs upon the Bait Barge.
The size, type, number, and design of the signs shall conform with Code
Section 17.35.090 and shall be subject to the prior written approval of the
Harbor Resources Manager. Other than the aforementioned approved
signage, Lessee shall not paint, install decorations, or install any signs,
lettering or advertising of any type, or any other type of visual displays, on
or about the Bait Barge and Premises without the prior written consent of
Lessor.
Period and Hours of Operation
The Bait Barge shall operate from April 1 through November 30 (the
"Operating Period "), 24 hours /day per calendar year. Changes to the
Operating Period or hours of operation shall be subject to Harbor
Resources Manager's written approval.
Li htin
The Bait Barge and Premises' exterior lighting shall comply with the U.S.
Coast Guard's lighting regulations for navigation and safety purposes. All
interior lighting shall be approved in writing by the Harbor Resources
Manager.
Generator
If a generator or compressor is operated aboard the Bait Barge, it shall be
Lease of Submerged Public Trust Lands Page 5
subject to the approval of the Harbor Resources Manager. The Harbor
Resources Manager may also limit the hours that the generator or
compressor may be used in order to reduce impacts to surrounding
residences.
5.7 Space on Bait Barge
Enclosed spaces on the Bait Barge shall be used only by employees of
the Bait Barge and only as a pilot house, office, storage room and /or
restroom. All structures and supplies aboard the Bait Barge shall be
properly secured.
5.8 Covers
Bait wells and covers shall comply with Code Title 17 and are subject to
the written approval of the Harbor Resources Manager.
5.9 Anchorage
The method of anchoring the Bait Barge shall be subject to the written
approval of the Harbor Resources Manager. The Bait Barge shall be
moved to a safe location as directed by the Harbor Resources Manager in
the event the Harbor Resources Manager determines, in his sole
discretion, that the Bait Barge is likely to sustain damage caused by storm
conditions.
5.10 Short -term Berthing
Short-term berthing shall be defined as the minimum amount of time to
perform the following functions:
a) Bait boats - for the purpose of unloading live bait onto the bait
barge;
b) Sport fishing, commercial or recreational vessels - for the purpose
of buying bait; and
c) Service vessels - for the purpose of maintaining the sewage holding
tank(s) and to perform any other maintenance activities on the bait
barge.
No long -term berthing is permitted except for a tender or dinghy for the
sole purpose of transporting Bait Barge employees.
Lease of Submerged Public Trust Lands Page 6
5.11 Bait Boat
This Agreement is not applicable to any bait boat that may be owned by
Lessee. All bait boats operating in the City must apply for and obtain a
Marine Activities Permit pursuant to the terms of Code Title 17.
5.12 Bait Barge Vessel
Only the Bait Barge described and depicted on Exhibit "B" may be used at
the Premises. Lessee may not substitute or use another bait barge at the
Premises without Harbor Resource Manager's express written approval.
Lessee may not increase the dimensions of the Bait Barge described and
depicted on Exhibit "A" without written authorization of the Harbor
Resources Manager.
5.13 Birds and Sea Lions
Bait receivers (holding tanks for bait) must be equipped with hard covers
to deter birds and sea lions. Netting may not be used.
Lessee shall establish a maintenance program for the purpose of
controlling the congregation of birds on the Bait Barge and the Premises.
This program shall include, but not be limited to, the installation of owl
statues, horizontal rotating whip antennas as appropriate, and other
measures reasonably employed in discouraging congregating bird activity.
Lessee shall establish a maintenance program for the purpose of
controlling the congregation of sea lions on the Bait Barge and Premises.
This program shall be demonstrably effective in discouraging the
congregation of sea lions on deck, but does not in any way violate any law
or regulation or injure the sea lions.
Lessee shall not be required to undertake any activity which will place it in
violation of any Federal, State or local regulations, and will not be required
to undertake any action or otherwise act so as to inhibit, harm, or in any
way injure or obstruct endangered species or otherwise protected wildlife.
6. Environmental Requirements
Lessee shall properly, and in compliance with all applicable laws, dispose of
refuse matter, matter that constitutes an unlawful fire hazard, and any and all
material detrimental to the public health. Lessee shall provide regular custodial
services to ensure that no trash and /or debris accumulate on the Bait Barge
and /or at the Premises or in surrounding waters.
The Bait Barge shall have holding tanks with pump -out connections for sewage,
Lease of Submerged Public Trust Lands Page 7
waste water and grey water, and any other necessary equipment to prevent the
discharge of such waters into the ocean and /or surrounding waters. Lessee shall
also provide regular and documented pump -out services for the routine pump -
outs and disposal. Lessee shall provide such documentation immediately upon
Lessor's request.
Lessee shall regularly clean receivers to ensure that dead fish do not accumulate
inside the receivers. Floating dead fish or other animal carcasses must be
promptly removed from the water so as to minimize bacteria loading of harbor
waters.
Holding tanks for sewage and trash, litter receptacles and their removal from the
Bait Barge, shall be subject to the Harbor Resources Manager's approval.
Lessee shall practice conservation of water, energy, and other natural resources
and shall prevent pollution and harm to the environment. Lessee shall prevent
harm or injury to animals, birds, and other sea life. Lessee shall not violate any
law or regulation whose purpose is to conserve resources, protect the
environment and animals, birds, and other sea life.
7. Permits and Licenses
Lessee, at its sole expense, shall obtain and maintain during the Term of this
Agreement, all appropriate permits, licenses and certificates that may be required
by any governmental agency in connection with the occupancy and use of the
Premises and the operation of the Bait Barge. Any approvals required by State
and Federal agencies shall be secured prior to the execution of this Agreement.
8. Acceptance of Condition of Premises
Lessee acknowledges that the Premises are suitable for Lessee's intended uses
and accepts the Premises in "as is" condition, with no warranty, express or
implied from the Lessor as to any latent, patent, foreseeable and unforeseeable
condition of the Premises.
9. Maintenance and Repair
Lessee shall be responsible for maintenance and repair of the Bait Barge.
Lessee shall conduct regular inspections to ensure that the Bait Barge is in a
safe and sanitary condition and in compliance with all applicable Federal, State
and local laws and regulations. Lessee shall perform all necessary modifications
and repair work at Lessee's sole cost and expense as the need arises.
Lessee shall designate in writing to the Harbor Resources Manager an on -site
representative who shall be responsible for the day -to -day operation and level of
maintenance, cleanliness, and general order.
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11
12.
13.
If Lessee fails to maintain or make repairs or replacements as required herein,
Harbor Resources Manager shall notify Lessee in writing of said failure. Should
Lessee fail to correct the situation within three (3) calendar days after date of
written notice, Harbor Resources Manager may choose the remedies available
herein, or by law.
Lessor Paying Claim
Should Lessee fail to pay and discharge, when due and payable, any tax or
assessment, or any premium or other charge in connection with any insurance
policy which Lessee is obligated to provide, or any lien or claim for labor or
material employed or used in the repair, alteration, construction, or maintenance
of improvements on the Bait Barge or Premises, then Lessor may, after ten (10)
calendar days written notice to Lessee and at its option, pay any such tax,
assessment, lien, claim, premium or charge, or settle or discharge any action, or
satisfy and judgment thereon. All costs and expenses incurred or paid by Lessor
pursuant to this Section, together with interest at the rate of ten percent (10 %)
per annum from the date of payment, shall be deemed to be considered as
additional rent and shall be paid by Lessee within ten (10) calendar days after
written notice that such payments are due.
Standard of Care
Lessee agrees to perform all services required hereunder in a manner
commensurate with community professional standards.
Right to Enter the Premises
Lessor expressly reserves the right and shall be entitled to enter the Bait Barge,
to inspect the Premises at any time without prior notice for compliance with the
terms of this Agreement, and for compliance with all applicable Federal, State
and local (including those of the Lessor) government laws, statutes, ordinances,
rules and regulations.
Assig nm ent/S u bletting /Hypothecation
13.1 Except as expressly provided herein, Lessee shall not either voluntarily or
by operation of law, assign, transfer, mortgage, pledge, hypothecate or
encumber this Agreement and shall not sublet the Premises or Bait Barge,
in whole or in part, or allow any person other than Lessee's employees,
members, agents, servants and invitees to occupy or use all or any portion
of the Premises without the prior written consent of Lessor which consent
shall not be unreasonably withheld.
13.2 The following shall be deemed to be an assignment or transfer within the
meaning of this Agreement:
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(a) If Lessee is a corporation, any dissolution, merger, consolidation or
other reorganization of Lessee or sale or other transfer of a
percentage of capital stock of Lessee which results in a change of
controlling persons, or the sale or other transfer of substantially all
the assets of Lessee; or
(b) If Lessee is a partnership, a transfer of any interest of a general
partner, a withdrawal of any general partner from the partnership,
or the dissolution of the partnership.
14. Bankruptcv
Lessee agrees that in the event all, or substantially all, of Lessee's assets are
placed in the hands of a receiver or trustee and remain so for a period of thirty
(30) calendar days, or should Lessee make an assignment for the benefit of
creditors or be adjudicated bankrupt, or should Lessee institute any proceedings
under the Bankruptcy Act or similar law wherein Lessee seeks to be adjudicated
bankrupt or to be discharged of its debts, or seeks to effect a plan of liquidation
or reorganization, or should any involuntary proceedings be filed against Lessee
and not dismissed or stayed within sixty (60) calendar days, then this Agreement
or any interest in and to the Premises shall not become an asset in any such
proceeding and, to the extent permitted by law and subject to the provisions of
Section 16, Lessor may declare this Agreement terminated and take possession
of the Premises.
15. Defaults
The occurrence of any one or more of the following events shall constitute a
material breach and default of this Agreement by Lessee:
15.1 Continued vacation or abandonment of the Bait Barge or Premises by
Lessee for thirty (30) consecutive days after Lessor's written notice to
Lessee;
15.2 Failure of Lessee to make any payment required by this Agreement when
such failure continues for a period of ten (10) calendar days after written
notice that payment is due;
15.3 Use of the Bait Barge or Premises by Lessee for any purpose other than
that authorized by Section 5;
15.4 Inability of Lessee to maintain sufficient amounts of live bait pursuant to
Section 5.1;
15.5 Use of the Bait Barge or Premises by Lessee which results in the
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.............
cancellation of any insurance covering the Bait Barge or Premises;
i
15.6 If Lessee is unable or does not renew or obtain any required permits,
licenses and /or certificates;
15.7 Lessee's assignment, transfer, mortgage, pledge, hypothecation,
encumbrance of the Agreement or sublease of the Premises without
Lessor's consent pursuant to Section 13.
16. Remedies
16.1 Cumulative Nature of Remedies. If any default by Lessee shall continue
without cure, Lessor shall have the remedies described in this Section in
addition to all other rights and remedies provided by law or equity, to
which Lessor may resort cumulatively or in the alternative.
(a) Reentry without Termination. Lessor may reenter the Premises,
and, without terminating this Agreement, re -let all or a portion of the
Premises. Lessor may execute any agreement made under this
provision in Lessor's name and shall be entitled to all rents from the
use, operation, or occupancy of the Premises. Lessee shall
nevertheless pay to Lessor on the dates specified in this
Agreement the equivalent of all sums required of Lessee under this
Agreement, plus Lessor's expenses in conjunction with re- letting,
less the proceeds of any re- letting or atonement. No act by or on
behalf of Lessor under this provision shall constitute a termination
of this Agreement unless Lessor gives Lessee specific written
notice of termination.
(b) Maintain Agreement. Lessor may maintain this Agreement in full
force and effect and recover any rental, royalty, or other
consideration as it becomes due, without terminating Lessee's right
of possession, regardless of whether Lessee shall have abandoned
the Bait Barge or Premises.
(c) Termination. Lessor may terminate this Agreement with or without
cause by providing Lessee with three (3) calendar days written
notice and specifying a termination date. In the event Lessor
terminates this Agreement, Lessor may recover possession of the
Premises (which Lessee shall surrender and vacate upon demand)
and remove all persons and property. Lessor shall be entitled to
recover the following as damages:
(i) The value of any unpaid rent or other charges unpaid at the
time of termination;
Lease of Submerged Public Trust Lands Page 11
(ii) The value of rent and other charges that would have accrued
after termination less the amount of rent and charges Lessor
received or could have received through the exercise of
reasonable diligence as of the date of the award;
(iii) Any other amount necessary to reasonably compensate
Lessor for the detriment proximately caused by Lessee's
failure to perform its obligations under this Agreement; and
(iv) At Lessor's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time -to -time
by applicable. California law. Lessor shall be entitled to
interest at the rate of ten percent (10 %) per annum on all
rent and other charges from the date due or the date they
would have accrued. Lessor shall also be entitled to an
award of the costs and expenses incurred by Lessor in
maintaining or preserving the Premises after default,
preparing the Premises for re- letting, or repairing any
damage caused by the act or omission of Lessee.
(d) Use of Lessee's Personal Property. Lessor may use Lessee's
personal property and trade fixtures located on the Premises or any
of such property and fixtures without compensation or liability to
Lessee for use or damage. In the alternative Lessor may store the
property and fixtures at the cost of Lessee.
16.2 Waiver of Rights. Lessee waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 or 1179,
or under any other present or future law, in the event Lessee is evicted or
Lessor takes possession of the Premises by reason of any default by
Lessee.
17. Surrender of Premises
On or within ten (10) calendar days after the expiration or earlier termination of
this Agreement, Lessee shall remove the Bait Barge from the Premises and
restore the Premises as nearly as possible to the conditions existing prior to the
anchorage of the Bait Barge. Such removal shall be to the satisfaction of the
Lessor. If Lessee abandons the Bait Barge, the Lessor shall have the right to
treat the Bait Barge as an abandoned vessel under the law and take all action in
conformance with the law.
18. Condemnation
18.1 As used in this Agreement, the term "Condemnation" means a permanent
taking of the Premises through (i) the exercise of any government power,
Lease of Submerged Public Trust Lands Page 12
by any public or quasi - public authority or by any other party having the
right of eminent domain ( "Condemnor') or (ii) a voluntary sale or transfer
by Lessor to any Condemnor, either under threat of exercise of eminent
domain by a Condemnor or while legal proceedings for condemnation are
pending.
18.2 Lessor shall notify Lessee in writing of any Condemnation within thirty (30)
business days after the later of (i) the filing of a complaint by Condemnor
or (ii) the final agreement and determination by Lessor and Condemnor of
the extent of the taking ( "Condemnation Notice ").
18.3 If the Premises are totally taken by Condemnation, this Agreement shall
terminate as of the date on which Condemnor takes possession of the
Premises that are subject to the Condemnation ( "Termination Date ") and
Lessor shall be relieved of any obligations it has under this Agreement. If
this Agreement is terminated under this Section, the termination shall be
effective on the Termination Date, and Lessor shall prorate rent to that
date. Lessee shall be obligated to pay rent for the period up to, but not
including, the Termination Date, as prorated by Lessor. Lessor shall
return to Lessee prepaid rent allocable to any period on or after the
Termination Date.
18.4 If a temporary taking of part of the Premises occurs through (i) the
exercise of any government power by Condemnor or (ii) a voluntary sale
or transfer by Lessor to any Condemnor, either under threat of exercise of
eminent domain by a Condemnor or while legal proceedings for
condemnation are pending, Base Rent shall abate during the time of such
taking in proportion to the portion of the Premises taken.
18.5 In the event of Condemnation of whole or part of the Premises, Lessor
shall receive the entire award which may be made in such taking or
condemnation, and Lessee hereby assigns to Lessor any and all rights of
Lessee now or hereafter arising in or to the same whether or not
attributable to the value of the unexpired portion of this Agreement;
provided, however, that nothing contained herein shall be deemed to give
Lessor any interest in or to require Lessee to assign to Lessor any award
made to Lessee for Lessee's moving expenses, or the taking of the
unamortized or the undepreciated value of Lessee's personal property, or
that portion of the unamortized or undepreciated portion of Lessee's
improvements, which were not purchased with any funds from a tenant
improvement allowance supplied by Lessor. Lessee hereby waives any
and all rights it might otherwise have pursuant to Section 1265.130 of
California Code of Civil Procedure.
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19
20.
Indemnification
To the fullest extent permitted by law, Lessee shall indemnify, defend and hold
harmless Lessor, its City Council, boards and commissions, officers, agents,
attorneys, volunteers, and employees (collectively, the "Indemnified Parties ")
from and against any and all claims (including, without limitation, claims for bodily
injury, death or damage to property), demands, obligations, damages, actions,
causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and
expenses (including, without limitation, attorney's fees, disbursements and court
costs) of every kind and nature whatsoever (individually, a "Claim'; collectively,
"Claims "), which may arise from or in any manner relate (directly or indirectly) to
any breach of the terms and conditions of this Agreement, any work performed or
services provided under this Agreement including, without limitation, defects in
workmanship or materials or Lessee's presence or activities conducted on the
Bait Barge or Premises (including the negligent and /or willful acts, errors and /or
omissions of Lessee, its principals, officers, agents, employees, vendors,
suppliers, consultants, subcontractors, anyone employed directly or indirectly by
any of them or for whose acts they may be liable or any or all of them).
Notwithstanding the foregoing, nothing herein shall be construed to require
Lessee to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any
action on or to enforce the terms of this Agreement. This indemnity shall apply to
all claims and liability regardless of whether any insurance policies are
applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by the Lessee.
Insurance
Without limiting Lessee's indemnification of Lessor, Lessee shall obtain, provide
and maintain at its own expense during the Term of this Agreement, a policy or
policies of liability insurance of the type and amounts described below and in a
form satisfactory to Lessor.
20.1 Certificates of Insurance. Lessee shall provide certificates of insurance
with original endorsements to Lessor as evidence of the insurance
coverage required herein. Insurance certificates must be approved by
Lessor's Risk Manager prior to commencement of performance or
issuance of any permit. Current certification of insurance shall be kept on
file with Lessor at all times during the Term of this Agreement.
20.2 Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
20.3 Acceptable Insurers. All insurance policies shall be issued by an
Lease of Submerged Public Trust Lands Page 14
insurance company currently authorized by the Insurance Commissioner
to transact business of insurance in the State of California, with an
assigned policyholders' Rating of A- (or higher) and Financial Size
Category Class VII (or larger) in accordance with the latest edition of
Best's Key Rating Guide, unless otherwise approved by Lessor's Risk
Manager.
20.4 Occurrence -Made Form. All insurance shall be written on an occurrence -
made form. A claims -made form of insurance is prohibited under this
Agreement.
20.5 Coverage Requirements.
(a) Workers' Compensation Coverage. Lessee shall maintain Workers
Compensation Insurance and Employer's Liability Insurance for its
employees in accordance with the laws of the State of California.
Any notice of cancellation or non - renewal of all Workers'
Compensation policies must be received by Lessor at least thirty
(30) calendar days (ten (10) calendar days written notice of non-
payment of premium) prior to such change. The insurer shall agree
to waive all rights of subrogation against Lessor, its officers, agents,
employees and volunteers for losses arising from work performed
by Lessee for Lessor.
(b) General Liability Coverage. Lessee shall maintain commercial
general liability insurance in an amount not less than Two Million
and no /100 Dollars ($2,000,000.00) per occurrence for bodily injury,
personal injury, and property damage, including without limitation,
contractual liability. If commercial general liability insurance or
other form with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the work to be performed
under this Agreement, or the general aggregate limit shall be at
least twice the required occurrence limit.
(c) Fire and Extended Coverage. Lessee shall maintain fire and
extended coverage insurance, together with insurance against
vandalism, theft and malicious mischief, for the full replacement
cost of the Bait Barge. Such policies of insurance shall contain the
"Replacement Cost Endorsement."
(d) Marine Protection and Indemnity Insurance. Lessee shall maintain
Marine Protection and Indemnity insurance in an amount not less
than One Million and no /100 Dollars ($1,000,000.00) per
occurrence.
Lease of Submerged Public Trust Lands Page 15
20.6 Endorsements. Each general liability insurance policy shall be endorsed
with the following specific language:
(a) Lessor, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insureds with
respect to liability arising out of work performed by or on behalf of
Lessee.
(b) This policy shall be considered primary insurance as respects to
Lessor, its elected or appointed officers, officials, employees,
agents and volunteers as respects to all claims, losses, or liability
arising directly or indirectly from Lessee's operations. Any
insurance maintained by Lessor, including any self- insured
retention Lessor may have, shall be considered excess insurance
only and not contributory with the insurance provided hereunder.
(c) This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with
respect to the limits of liability of the insuring company.
(d) The insurer waives all rights of subrogation against Lessor, its
elected or appointed officers, officials, employees, agents and
volunteers.
(e) Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to Lessor, its elected or appointed
officers, officials, employees, agents or volunteers.
(f) The insurance provided by this policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either
Party except after thirty (30) calendar days (ten (10) calendar days
written notice of non - payment of premium) written notice has been
received by Lessor.
20.7 Timely Notice of Claims. Lessee shall give Lessor prompt and timely
notice of any claim made or suit instituted arising out of or resulting from
Lessee's performance under this Agreement.
20.8 Additional Insurance. Lessee may also procure and maintain, at its own
cost and expense, any additional kinds of insurance which Lessee deems
necessary for its proper protection and prosecution of its work.
20.9 Change in Coverage. In the event Lessor's Risk Manager determines that
(i) the Lessee's activities on the Bait Barge or Premises creates an
increased or decreased risk of loss to the Lessor, (ii) greater insurance
coverage is required due to the passage of time, or (iii) changes in the
Lease of Submerged Public Trust Lands Page 16
industry require different coverages be obtained, Lessee agrees that the
minimum limits of any insurance policy required to be obtained by Lessee
may be changed accordingly upon receipt of written notice from the Risk
Manager; provided that Lessee shall have the right to appeal a
determination of increased coverage by the Risk Manager to the City
Manager within ten (10) calendar days of receipt of notice from the Risk
Manager.
21. Hazardous Substances
21.1 Lessee shall not, at any time, use, store, manufacture or maintain any
Hazardous Substances on the Bait Barge or Premises.
21.2 For purposes of this Agreement, the term "Hazardous Substance" means:
(i) any substance, product, waste or other material of any nature
whatsoever which is or becomes listed, regulated, or addressed pursuant
to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. ( "CERLCA "); the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the
Resource Conversation and Recovery Act, 42 U.S.C. Section 6901 et seq.
( "RCRA "); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the California
Hazardous Waste Control Act, Health and Safety Code Section 25100 et
seq.; the California Hazardous Substance Account Act, Health and Safety
Code Sections 25330 et seq.; the California Safe Drinking Water and
Toxic Enforcement Act, Health and Safety Code Sections 25249.5 et seq.;
California Health and Safety Code Sections 25280 et seq. (Underground
Storage of Hazardous Substances); the California Hazardous Waste
Management Act, Health and Safety Code Sections 25170.1 et seq.;
California Health and Safety Code Sections 25501 et seq. (Hazardous
Materials Response Plans and Inventory); or the Porter - Cologne Water
Quality Control Act, Water Code Sections 13000 et seq., all as they, from
time -to -time may be amended, (the above -cited statutes are here
collectively referred to as "the Hazardous Substances Laws ") or any other
Federal, State or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in effect; (ii)
any substance, product, waste or other material of any nature whatsoever
which may give rise to liability under any of the above statutes or under
any statutory or common law theory, including but not limited to
negligence, trespass, intentional tort, nuisance, waste or strict liability or
under any reported decisions of a state or federal court; (iii) petroleum or
crude oil; and (iv) asbestos.
21.3 Notwithstanding any contrary provision of this Agreement, and in addition
Lease of Submerged Public Trust Lands Page 17
to the indemnification duties of Lessee set forth in this Agreement, Lessee
agrees to indemnify, defend with counsel reasonably acceptable to
Lessor, protect, and hold harmless Lessor, its officials, officers,
employees, agents, and assigns from and against any and all losses,
fines, penalties, claims, damages, judgments, or liabilities, including, but
not limited to, any repair, cleanup, detoxification, or preparation and
implementation of any remedial, response, closure or other plan of any
kind or nature which the Lessor, its officials, officers, employees, agents,
or assigns may sustain or incur or which may be imposed upon them in
connection with the use of the Bait Barge or Premises provided under this
Agreement, arising from or attributable to the storage or deposit of
Hazardous Substances or alleged or actual violation of any Hazardous
Substance Laws. This Section is intended to operate as an agreement
pursuant to Section 107(e) of CERCLA, 42 USC Section 9607(e), and
California Health and Safety Code Section 25364, to insure, protect, hold
harmless, and indemnify Lessor for any claim pursuant to the Hazardous
Substance Laws or the common law.
21.4 Lessor and Lessee agree that they will not, and will not authorize any third
party to use, generate, store, or dispose of any Hazardous Substances on,
under, about or within the Bait Barge or Premises in violation of any law or
regulation. Lessor and Lessee each agree to defend, indemnify and hold
harmless the other and the other's partners, affiliates, agents and
employees against any and all losses, liabilities, claims and /or costs
(including reasonable attorneys' fees and costs) arising from any breach
of any representation, warranty or agreement contained in this Section.
This Section shall survive the termination of this Agreement. Upon
expiration or earlier termination of this Agreement, Lessee shall surrender
and vacate the Premises and deliver possession thereof to Lessor on or
before the termination date free of any Hazardous Substances released
into the environment at, on or under the Bait Barge or Premises that are
attributable to Lessee.
22. Quiet Possession
22.1 So long as no default by Lessee has occurred under this Agreement,
Lessee shall peaceably and quietly use and enjoy the Premises for the
Term, without hindrance or interruption by Lessor or any other person or
persons claiming by, through or under Lessor.
22.2 Lessor shall in no event be liable in damages or otherwise, nor shall
Lessee be released from any obligations hereunder, 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 neglect (other than gross negligence
or willful misconduct) of Lessor or its servants, agents, employees,
Lease of Submerged Public Trust Lands Page 18
licensees, business invitees, or any person claiming by, through or under
Lessee.
23. Easements and Reservations
23.1 Lessor reserves all rights, title and interest in any and all subsurface
natural gas, oil, minerals, and water on or within the Premises.
23.2 Lessor reserves the right to grant and use easements or to establish and
use rights -of -way over, under, along, and across the Premises for utilities,
thoroughfares, or access as it deems advisable, in its sole discretion, for
the public good.
23.3 Lessor has the right to enter the Premises for the purpose of making
repairs to or developing municipal resources and services.
24. Compliance with Laws
Lessee, at its sole cost, shall observe, perform, and comply with all laws,
statutes, ordinances, rules, and regulations promulgated by any governmental
agency, including, but not limited to, Code Title 17, and all applicable zoning
ordinances, building codes, Hazardous Substance Laws and environmental laws.
Lessee shall not occupy or use the Premises, or permit any portion of the
Premises to be occupied or used for any use or purpose that is unlawful in part or
in whole, or deemed by Lessor to be disreputable in any manner or extra
hazardous in any way or for any use not expressly permitted herein.
25. Not Agent of Lessor
Neither anything in this Agreement nor any acts of Lessee shall authorize Lessee
or any of its employees, agents or contractors to act as agent, contractor, joint
venturer or employee of Lessor for any purpose.
26. No Third Party Beneficiaries
Lessor and Lessee do not intend, by any provision of this Agreement, to create in
any third party, any benefit or right owed by one Party, under the terms and
conditions of this Agreement, to the other Party.
27. Limitation of Leasehold
This Agreement and the rights and privileges granted Lessee in and to the
Premises are subject to all covenants, conditions, restrictions, and exceptions of
record, including those which are set out in the Tidelands Grant by the State of
California to Lessor. Lessee agrees not to use the Premises in any manner
which will be inconsistent to any uses set out in the Tidelands Grant.
Lease of Submerged Public Trust Lands Page 19
001:1
29
Nothing contained in this Agreement or in any related document shall be
construed to imply the conveyance to Lessee of rights in the Premises which
exceed those owned by Lessor.
Notices
All notices and other communications required or permitted to be given under this
Agreement, including any notice of change of address, shall be in writing and
given by personal delivery, or deposited with the United States Postal Service,
postage prepaid, addressed to the Parties intended to be notified. Notice shall
be deemed given as of the date of personal delivery, or if mailed, upon the date
of deposit with the United States Postal Service. Notice shall be given as follows:
To Lessor: City of Newport Beach
Attn: Harbor Resources Manager
829 Harbor Island Dr.
Newport Beach, CA 92660
With a copy to: City of Newport Beach
Attn: City Manager
PO Box 1768
Newport Beach, CA 92658
To Lessee: Mr. Todd Phillips
San Pedro Bait Co
1231 West 26th Place
San Pedro, CA 90731
Entire AareemenVAmendments
29.1 The terms and conditions of this Agreement, all exhibits attached hereto,
and all documents expressly incorporated by reference, represent the
entire Agreement of the Parties with respect to the subject matter of this
Agreement.
29.2 This written Agreement shall supersede any and all prior agreements, oral
or written, regarding the subject matter between Lessee and Lessor.
29.3 No other agreement, promise or statement, written or oral, relating to the
subject matter of this Agreement, shall be valid or binding, except by way
of a written amendment to this Agreement.
29.4 The terms and conditions of this Agreement shall not be altered or
modified except by a written amendment to this Agreement signed by
Lessee and Lessor and approved as to form by the City Attorney.
Lease of Submerged Public Trust Lands Page 20
29.5 If any conflicts arise between the terms and conditions of this Agreement,
and the terms and conditions of the attached exhibits or the documents
expressly incorporated by reference, the terms and conditions of this
Agreement shall control.
29.6 Any obligation of the Parties relating to monies owed, as well as those
provisions relating to limitations on liability and actions, shall survive
termination or expiration of this Agreement.
30. Waivers
The waiver by either Party of any breach or violation of any term, covenant or
condition of this Agreement, or of any ordinance, law or regulation, shall not be
deemed to be a waiver of any other term, covenant, condition, ordinance, law or
regulation, or of any subsequent breach or violation of the same or other term,
covenant, condition, ordinance, law or regulation. The subsequent acceptance
by either Party of any fee, performance, or other consideration which may
become due or owing under this Agreement, shall not be deemed to be a waiver
of any preceding breach or violation by the other Party of any term, condition,
covenant of this Agreement or any applicable law, ordinance or regulation.
31. Costs and Attorneys' Fees
The prevailing Party in any action brought to enforce the terms and conditions of
this Agreement, or arising out of the performance of this Agreement, shall not be
entitled to recover its attorneys' fees.
32. City Business License
Lessee shall obtain and maintain during the duration of this Agreement, a City
business license as required by the Code.
33. Applicable Law
This Agreement shall be construed in accordance with the laws of the State of
California. Any action brought relating to this Agreement shall be adjudicated in
a court of competent jurisdiction in the County of Orange.
34. Interpretation
The terms of this Agreement 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 Agreement or any other rule of construction which
might otherwise apply.
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35. Incorporation of Recitals
The Recitals contained herein are true and correct and are incorporated into the
operative part of this Agreement.
36. Recordation
This Agreement shall be recorded with the County Recorder of Orange County
pursuant to California Government Code Section 37393.
37. Time is of the Essence
Time is of the essence for each and every term in this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first written above.
CITY OF NEWPORT BEACH ( "Lessor "),
a California municipal corporation
In
Keith D. Curry, Mayor
ATTEST:
Leilani Brown,
City Clerk
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Leonie Mulvihill,
Acting City Attorney -KST ylsjlu
San Pedro Bait Company ( "Lessee "),
a California corporation
M
Mark Pisano, President
Todd Phillips, Financial Officer
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EXHIBIT A
Premises
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EXHIBIT B
BAIT BARGE
Bait Barge is constructed of three - sixteenth inch (3/16 ") thick A36 steel formed and
welded into thirty -six inch (36 ") x thirty -six inch (36 ") pontoons as the perimeter. The
overall outside dimensions of the Bait Barge is twenty -eight feet (28') wide x one
hundred and fourteen feet (114') long.
The interior of the Bait Barge consists of eight (8) ten feet (10') x six inch (6 ") openings
for rigid "boxes" and two (2) twenty -two foot (22') x twenty -two foot (22') openings with a
depth of eight feet (8') for net wells. The "boxes" are ten feet (10') x ten feet (10)
across the top by ten feet (10) deep and are made of three (3) x three (3) s quarter ('/)
type 316L stainless steel angle which is enclosed with a PVC coated, half inch ('/2')
square opening, wire mesh. The Bait Barge was designed with specific intent to create
a superior method of eliminating floating bait by disposing of it through the bottom of the
Bait Barge, thus protecting and eliminating attraction by wildlife to the discarded bait.
The "house" is raised three (3) feet off the deck, supported by three (3) x three (3) x
two- hundred and fifty (250) type three - hundred and sixteen (316) stainless steel tube
and is approximately eight feet (8') wide x nineteen feet (19') long and constructed to
local building codes.
The one hundred ten (110) volt power to the Bait Barge is supplied by a super quiet
Honda gas generator model EU6500. The twenty -four (24) volt system is supplied by a
closed cell battery system, which is charged by three (3) solar panels on top of the
house. The super quiet generator will only need to be run approximately three (3) hours
per day, due to solar panels and an inverter, which converts a twenty -four (24) volt
power supply to a one hundred ten (110) volt power supply.
The Bait Barge is painted gray