HomeMy WebLinkAbout23 - Balboa Theatre Lease,
CITY OF NEWPORT BEACH
............ ..............._ ..._ .......... .
C3
'�-,UNCIL MEETING
A,�GENDA ITEM N0.
OFFICE OF THE CITY ATTORNEY
November 20, 1998
TO: Mayor & Members of the City Council
FROM: Robert H. Burnham, City Attorney
RE: Balboa Theatre Lease
C. - :!) ,)-Lf �?
November 23,
23
I have attached a proposed lease of the Balboa Theater to the Balboa Performing Arts
Theatre Foundation (Foundation). The key provisions of the proposed lease can be
summarized as follows:
j 1. TERM 25 years (Page 10);
2. OPTION TO PURCHASE /RIGHT OF FIRST REFUSAL The
Foundation has an option to purchase contingent on completion of major
improvements and successful operation of a theater for five years. Purchase price
is our cost ($480,000) increased to reflect changes in CPI (page 10). The
Foundation also has a right of first refusal.
3. CONSIDERATION Foundation is required to make major
improvements (including seismic retrofit) and operate a first -class community
theatre with a minimum number of performances.
4. CONTRIBUTION FUND /BUDGET /PLAN Foundation must
establish a contribution fund and prepare a budget and operations & marketing
plan.
5. USE OF PROPERTY Foundation must operate a first class
community theatre with concessions, food service and retail incidental to
performances. Foundation may allow community and fundraising events.
6. REQUIRED IMPROVEMENTS Foundation is required to
do seismic retrofit and renovate structure for use as a first class community theatre
19,
at no cost to City. Improvements are to be competed within two (2) years.
Improvements are to be consistent with architecture
7. FOUNDATION STATUS Foundation must keep non - profit
status and create executive and advisory committees.
8. INSURANCE Foundation required to maintain $5,000,000 in
general liability coverage and "all risk" insurance (full replacement cost) if available
at commercially reasonable rates.
The Committee to Promote Revitalization of Our Peninsula (Jan Debay, John Noyes and
John Hedges) has reviewed the proposed lease and recommends Council approval.
F: \cat \S hared \Bum ham \Balboatheater\ccmemo 112098
ROBERT H. BURNHAM
City Attorney
�~) z
LEASE
BY AND BETWEEN
THE CITY OF NEWPORT BEACH
AND
THE BALBOA PERFORMING ARTS THEATRE
FOUNDATION
1
n
This Lease ( "Lease "), entered into as of 199(Effective Date) by
and between the City of Newport Beach, a Charter City and municipal corporation
( "Lessor ") and the Balboa Performing Arts Theatre Foundation ( "Lessee "), is made with
-- reference to the following:
RECITALS
A. Lessor is the owner of the property, structures and improvements,
commonly known as the Balboa Theater located at 707 E. Balboa Blvd in
the City of Newport Beach ( "Property ").
B. City purchased the Property with Community Development Block Grant
(CDBG) funds ( "Federal Funds ") from the United States Department of
Housing and Urban Development. The Federal Funds were granted
pursuant to Title 1 of the Housing and Community Development Act of
1974 (42 U.S.C. 5301 et. seq.) as amended (Act) and the Regulations of
24 C.F.R. Section 570 e. seq. (Regulations).
C. The Federal Funds were granted to Lessor, in part, to benefit low income
residents and households in the vicinity of the Property and to revitalize
the economy in the primary commercial area that serves these residents.
D. Lessee is a non - profit corporation organized pursuant to and in
' compliance with the provisions of California law and is presently in good
- standing. Lessee was organized by, and its members include, individuals
who reside in an around the Property and the area to be benefited by the
use of the Federal Funds.
E. The City Council of the City of Newport Beach (City Council) has
determined that this Lease and the use of the Property as a Theater is
consistent with the City Charter, the Newport Beach General Plan and
Zoning Ordinance and all other applicable Federal, State and local laws.
F. The City Council has also determined that this Lease will benefit and
serve the interests of, the low income residents and business owners in
the area for which the Federal Funds were granted.
NOW, THEREFORE, in consideration of the terms, covenants and conditions
contained in this Lease, Lessor and Lessee hereby agree as follows:
ARTICLE 1 SUBJECT OF LEASE
. , 1.1 Purpose of the Lease
-1-
i
The purpose of this Lease is to renovate and rehabilitate the Property consistent
with its original design and architecture for use by Lessee as a (Theater) to serve
the needs and interests of the residents and business owners in the area to be
benefited through the use of the Federal Funds.
1.2 The Property
The term "Property" includes the. land described in Exhibit A as well as the
structure(s) and any improvements and personal property. The term "Theater"
generally refers to the use of the structure(s), improvements and fixtures located
on the land as a non profit cultural and performing arts center.
1.3 Lessor
Lessor is the City of Newport Beach, a Charter City and municipal corporation.
The principal office of Lessor is located at City Hall Complex, 3300 Newport
Boulevard, Newport Beach, California 92658 -8915. For the purposes of this
Lease, the term "Lessor' shall include all officers, employees, agents or
representatives of Lessor.
1.4 Lessee
Lessee is the Balboa Performing Arts Theatre Foundation. Lessee is a
California nonprofit public benefit corporation organized for the purpose of
renovating, operating and maintaining the Theater and engaging in activities that
will, among other things, serve the interests of, and benefit, area commonly
known as Central Balboa or Balboa Village. For the purposes of this Lease, the
term "Lessee" shall include all officers, employees, agents or representatives of
Lessee.
ARTICLE 2 LEASE OF PROPERTY
2.1 Lease of Property
Lessor leases the Property to Lessee, and Lessee leases the Property from
Lessor for the Term and pursuant to the provisions, covenants and conditions of
this Lease. Lessor reserves all rights to substances below the surface of the
Property and the right to produce or take any of those substances so long as the
activities do not impair or interfere with the operation or aesthetics of the
Theatre.
2.2 Condition of Title
The Property is leased subject to the Permitted Exceptions (Exhibit C) and other
matters affecting title which do not inhibit, prevent or impair the operation,
maintenance or use of the Theater.
-2-
j
ARTICLE 3 POSSESSION OF PROPERTY
3.1 Quiet Enioyment
Lessee shall be entitled to peaceably and quietly use and enjoy the Property for
the Term, without hindrance or interruption by Lessor except for the exercise of
Lessor's rights pursuant to this Lease. Lessor shall not be liable in damages or
otherwise, because of the interruption or termination of any service provided by
Lessor (such as, water or sewer service), or a termination, interruption or
disturbance of any service attributable to any act or omission of Lessee or
officers, agents or employees.
3.2 Condition of Property
Lessee has investigated and researched all physical conditions of the Property
that could affect Lessee's use, enjoyment and improvement of the Property
including soil conditions, the condition of structures, and the condition of utilities.
By execution of this Lease, Lessee shall be deemed to have accepted the
Property in an "AS IS" condition. Lessor has provided Lessee with a report that
confirms the presence of lead based paint on the Property and Lessee
acknowledges that substantial improvements, including seismic retrofit, will be
necessary before the Property can be operated as a first -class community
Theatre as required by this Lease.
3.3 Ownership of Improvements
During the Term of this Lease, Lessor shall hold title to the improvements and
personal property necessary or convenient to the operation or maintenance of
the Theater, such as fixtures, machinery, rigging, lighting, staging, merchandise,
trade fixtures (collectively, the "Equipment ") that have been constructed or
placed on the Property
3.5 Surrender of Property
3.5.1 On expiration of the Term or termination of this Lease, Lessee shall
peaceably and quietly leave and surrender the Property and Equipment to
Lessor, in good order, condition and repair, reasonable wear and tear and
obsolescence excepted. Lessee shall deliver to Lessor all contracts,
agreements, books, records, and other documents related to the
operation, maintenance or use of the Property.
3.5.2 Upon the expiration of the Term or termination of this Lease and within ten
(10) days of a written request by Lessor, Lessee shall immediately deliver
to Lessor the following:
(i) Documents reasonably necessary for Lessor's ownership of the
Property to be reflected of record
-3-
(ii) Title insurance, surety bond, or other security reasonably
acceptable to Lessor insuring Lessor against all claims and liens
against the Property other than those incurred by Lessor or
accepted by Lessor in writing.
(iii) All plans, surveys, permits and other documents relating to the
Property as may be in the possession of Lessee at the time.
3.5.3 All documents and instruments to be delivered pursuant to this
Subsection shall be in a form satisfactory to Lessor.
ARTICLE 4 TERM /OPTION TO PURCHASE
4.1 Duration and Commencement
The Term of this Lease shall commence on the Effective Date and shall expire
on the twenty -fifth (25'h) anniversary subject to early termination or Lessee's
exercise of the option to purchase as provided in Section 4.3.
4.2 Option to Extend
Any extension of this Lease, and the terms and conditions to the extension, shall
be at Lessor's option, in its sole and absolute discretion.
4.3 Option to Purchase
Lessee shall have the option to purchase the Property subject to satisfaction of
the following:
4.3.1 Lessee shall have completed the Required Improvements;
4.3.2 Lessee shall have operated the Theater in full compliance with the
provisions of Article 8 for a period of five (5) years;
4.3.3 Lessee has given Lessor thirty (30) days written notice of its
intention (notice of intent) to exercise the option to purchase;
4.3.4 Lessee is not in default when the notice of intent is served or at
close of escrow;
4.3.5 Lessee, concurrently with the service of the notice of intent, opens
an escrow for the purchase of the Property and deposits ten
percent (10 %) of the purchase price into escrow.
4.4 Option - Purchase Price
The purchase price of the Property shall be .the sum of (1) the price paid by .
ME
Lessor ($480,000) and (2) an amount equal to $480,000 multiplied by the
cumulative percentage increase in the Consumer Price Index (All Urban
Consumers — Los Angeles, Anaheim Riverside — All Items) from the Effective
date to the date of the notice of intent. For example, if Lessee exercises the
option nine (9) years after the Effective Date and the increase in the CPI during
that period is thirty percent (30 %), the purchase price would be $624,000.
($480,000 plus $144,000)
4.5 Right of First Refusal
Lessee shall have the right of first refusal to purchase the Property prior to the
sale to any third party. Lessor shall give Lessee sixty (60) days written notice of its
intent to sell the Property and Lessee's right to purchase during that period. Lessee
shall exercise the option by serving Lessor with written notice of intent to purchase
within the option period and complying with Subsection 4.3.5. The purchase price for
the Property shall be as specified in section 4.4.
ARTICLE 5 RENT /CONSIDERATION
5.1 No Money Payable by Lessee
Lessee shall not pay money as rent to Lessor.
5.2 Other Consideration
In consideration for this Lease, Lessee covenants that, during the Term, it will:
5.2.1 Operate and maintain a Theatre on the Property in full compliance
with the terms and conditions of this lease and at no cost to Lessor.
5.2.2 Maintain its non - profit status
5.2.3 Construct the Required Improvements in accordance with the
provisions of Article 9 and maintain the Property in accordance with
this Lease at no cost to Lessor.
5.2.4 Defend, indemnify and hold Lessor harmless with respect to the
renovation, use, maintenance and operation of the Property.
5.2.5 Use any excess revenue or funds for purposes related to the
operation of the Theater or the revitalization of Central
Balboa /Balboa Village. The term "excess revenue or funds" means
any revenue or funds (other than the principal and interest of the
Contributions Fund) in excess of the amount projected in Lessee's
then current Budget and which, in Lessees reasonable
determination, are not needed for Lessee's reserve account(s).
ARTICLE 6 CONTRIBUTIONS FUND
-5-
Lessee shall establish and maintain, at a financial institution in an account insured by
FDIC, FSLIC or similar insurance, a separate fund (the "Contributions Fund ") for the
purpose of accepting contributions from any source. Lessee shall use the Contributions
Fund to pay for the improvements required by this Lease and /or to support the
operation and maintenance of the Theater. Lessee shall establish and maintain an on-
going fund raising program as part of its Operations and Marketing Operations Plan
(Article 7) and use its best efforts to ensure the success of the program.
ARTICLE 7 ANNUAL BUDGET /OPERATION AND MARKETING PLAN.
7.1 Budget/Timing
7.1.1 Initial Budget.
Lessee shall prepare, and submit to the Lessor, an annual budget
for the renovation, maintenance and operation of the Theater (the
"Budget "). The first Budget shall be adopted, and submitted to
Lessor, within sixty (60) days after the Effective Date. Subsequent
annual Budgets shall be submitted to Lessor fifteen days after
adoption by Lessee.
7.1.2 Proposed Revision.
Lessee shall provide Lessor with material modifications or revisions
to the Budget within fifteen days after adoption by Lessee.
7.1.3 Year End Financial Statement.
Within ninety (90) days after the last day of Lessee's fiscal year,
Lessee shall submit to Lessor a cash flow statement itemizing all of
its revenues and expenditures for that fiscal year.
7.2 Contents of Budget.
The Budget shall specify in reasonable detail (as appropriate given the status of
renovation), (i) the proposed rates and charges for the use of the Theater, (ii) the
balance in all funds and accounts maintained by Lessee (iii) all projected
revenues and sources of funds for the fiscal year, (iv) the expenditures proposed
to be made by Lessee in fulfilling its obligations pursuant to this Lease, (v)
marketing program and costs, (vi) all other proposed expenditures of Lessee,
(vii) the principal balance of the Contributions Fund, (viii) income from the
Contributions Fund, and (ix) cash reserves, if any.
7.3 Operations and Marketinq Plan.
N
a
Lessee shall prepare and adopt an Operations and Marketing Plan (Operations
Plan) during the Term. The initial Operations Plan shall be adopted one hundred
and eighty (180) days prior to anticipated completion of the Required
Improvements. The Operations Plan shall be revised from time to time to reflect
new performances /events, new fund - raising strategies and new or revised
marketing programs. The Operations Plan shall comply with, and provide
information relevant to, the provisions of Article 8 and specify in reasonable
detail (as appropriate given the status of renovation), (i) performances, meetings,
concerts and other events at the Theater that have been, or are proposed to be,
scheduled (ii) performers and events which Lessee is actively seeking to
schedule at the Theater, (iii) a marketing Plan for the Theater including programs
for attracting attendees and efforts to integrate the operation of the Theater into
efforts to revitalize the local economy, and (iv) fund raising efforts including a
report on fund raising efforts for the prior year. The Operations Plan shall be
submitted to Lessor within fifteen days after adoption or any material
modification.
7.4 Records.
Lessee shall keep and maintain complete, accurate and customary records and
books of account on all sales, whether for cash or on credit, all business
transactions made with respect to the Property during each fiscal year, and the
principal and income of the Contributions Fund. These records shall be retained
intact for a period of not less than three (3) years after the end of each fiscal year
to which said records and books of account pertain. Lessor and representatives
of the United States Government shall be entitled, upon reasonable notice and
during business hours, to inspect and make copies of any and all of the records
and books of account.
7.5 Audit.
Lessor shall, once per fiscal year, be entitled to conduct an audit of all records
and books of account that Lessee is required to maintain.
ARTICLE 8 USE OF PROPERTY
8.1 Permitted Use.
The Property shall be used primarily for the operation of a first class cultural and
performing arts center (Theater) open to the general public. Lessee shall
operate the Theater in accordance with the standards specified in this Lease and
the relevant Operations Plan. Lessee may, in conjunction with performances,
events and fund - raising activities, conduct incidental operations such as limited
food service or catering, on premises sale of alcoholic beverages (provided
Lessee obtains all required governmental permits and approvals), concessions,
and retail sales directly related to performances or fund raising events.
-7-
('Permitted Uses "). Lessee may conduct benefits, fund - raising events, previews,
receptions and similar activities where admission is restricted subject only to
compliance with this Lease. Lessee may allow nonprofit civic, charitable,
educational and community organizations to periodically use the Theater for fund
raising, education or community events in accordance with this Lease and the
Operations Plan. Lessee may conduct fund - raising and similar events on the
Property after completion of the improvements contemplated by Section 9.2
(Seismic Retrofit) and before completion of Required Improvements subject to
issuance of a Special Events Permit by Lessor.
8.2 Performances /Frequency.
Lessee shall operate the Theater in a prudent and businesslike manner
reasonably calculated to assist in the efforts of Lessor and others to revitalize the
local economy and in full compliance with the Operations Plan.
8.2.1 Lessee shall schedule and present performances or cultural events
on at least one hundred (100) days of the twelve (12) month period
commencing sixty (60) days after completion of Required
Improvements.
8.2.2 Lessee shall, for each subsequent twelve month period, schedule
and present performances or cultural events on at least one
hundred and fifty days.
8.2.3 Operation of the Theatre is the fundamental consideration for this
Lease and Lessee shall ensure and promote the maximum
reasonable use of the Theater by performers, artists, and
entertainers likely to attract patrons. The Theater shall be operated
consistent with the standards, practices and procedures utilized by
first class community theaters in other jurisdictions.
8.3 Program Standards.
Lessee shall operate the Theater in a manner reasonably calculated to achieve
the following objectives:
8.3.1 Provide frequent and high quality performances and cultural events
to attract patrons to the Theater and Central Balboa /Balboa Village;
8.3.2 To serve as a catalyst to the revitalization of the economy of the
area to be benefited by use of the Federal Funds.
8.3.3 To make the Theater accessible to, and enjoyable by, as wide a
potential audience as possible including the low income residents
of the area to be benefited by the use of Federal Funds;
8.3.4 To utilize the skill, ability and energy of members of the community
in combination with a capable, experienced professional staff to
H
fund the renovation, operation and maintain a first class community
Theater.
8.4 Cooperation.
Lessor and Lessee shall, at least ninety (90) days prior to completion of the
Required Improvements, commence discussion of a parking validation program
that would allow patrons of the Theatre to use public parking at reduced rates.
Lessor and Lessee shall also discuss ways to integrate operation of the Theater
into programs for the economic revitalization of Central Balboa /Balboa Village.
8.5 Change of Use.
Lessee shall not use, or conduct any activities on, the Property except the
Permitted Uses without the prior written consent of Lessor, which consent may
be withheld at Lessor's sole discretion.
8.6 Compliance with Laws.
Lessee shall not use the Property in a manner liable to create a public or private
nuisance or liable to cause structural injury to the Theater. Lessee shall not
conduct any operation that would invalidate any insurance coverage required of
Lessee. Lessee shall not violate any local, state or federal law in the renovation,
maintenance, or operation of the Property or Theater. Lessee shall obtain a use
permit from the City and approval from the Department of Alcohol Beverage
i Control prior to any sale of alcoholic beverages from the Property.
8.7 Zoning and Planning.
Lessor acknowledges that the use of the Property as a theatre is a legal non -
conforming use as that term is defined in Title 20 of the Newport Beach
Municipal Code (Zoning Code). Lessee shall be entitled to repair, alter, and
modify the structures and improvements on the Property in accordance with the
provisions of the Zoning Code provided Lessee complies with the provisions of
this Lease. Lessee shall also use the Property in conformance with the
provisions of the Central Balboa Specific Plan.
8.8 Nondiscrimination.
8.8.1 Lessee shall not discriminate against any person or group of
persons, on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry, in the renovation, operation,
enjoyment or occupancy of the Property
8.8.2 Lessee shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin,
age or handicap. Lessee shall take positive steps to ensure that
1 applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex,
a
i
national origin, age or handicap. Lessee shall post in conspicuous
places, available to employees and applicants for employment,
notices specifying the non - discrimination provisions of this Lease.
Lessee shall, in all solicitations or advertisements for employees
placed by or on behalf of Lessee, state that all qualified applicants
will receive consideration for employment without regard to race,
color, religion, sex, national origin, age or handicap. Lessee shall
not discriminate on the basis of age in violation of any provision of
the Age Discrimination Act of 1975. Lessee shall not discriminate
against, or with respect to, any otherwise qualified handicapped
individual as provided in Section 504 of the Rehabilitation Act of
1973.
8.8.3 Lessee agrees not discriminate on the basis of sex, marital status,
race, color, religion, creed, ancestry or national origin of any person
with respect to any agreement, license, contract related to the
renovation, operation, use or occupancy of the Property. All such
contracts, licenses, agreement shall contain non - discrimination
provisions substantially similar to this Lease.
ARTICLE 9 REQUIRED IMPROVEMENTS
9.1 Lessee's Obligations.
The Property requires substantial renovation and rehabilitation to be used as, or
considered, a first class community Theater (First Phase Improvements).
Lessee shall design, obtain building permits for, and then construct the
improvements specified in this Article (Required Improvements) at Lessee's sole
cost and expense
9.2 Seismic Retrofit/Remediation.
The primary structure on the Property is an unreinforced masonry building
constructed prior to 1935 and is subject to the provisions of Chapter 15.07 of the
Newport Beach Municipal Code (Earthquake Hazard in Existing Buildings). In
addition, a preliminary investigation of the Property has revealed some lead -
based paint. Lessee shall submit to Lessor, plans and specifications for
improvements to the Property necessary to comply with the provisions of
Chapter 15.07 (Seismic Retrofit) and a plan to remediate the lead based paint
( Remediation). Lessee shall retain a licensed contractor to construct the Seismic
Retrofit required improvements complete the Remediation. Lessee shall
complete the Seismic Retrofit and the Remediation no later than the date on
which the Required Improvements are required to be completed. Lessee shall
be solely responsible for all costs and expenses associated with the Seismic
Retrofit and the Remediation.
9.3 Conceptual Desiqn Plans.
-10-
Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual
> Plan for the design, construction, furnishing and equipping of the Property for
use as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall
be prepared by a licensed architect. The Conceptual Design Plan shall generally
describe those elements typically included in preliminary Conceptual Design
Plans for the renovation and rehabilitation of a theatre constructed in the 1920's.
The Conceptual Design Plans shall include, without limitation, (1) seating layout
and design; (2) stage and dressing room layout and design (3) lobby and
concession area design; (4) structural modifications necessary to comply with
uniform codes; (5) interior design elements and treatment; (6) exterior design
and treatment; (7) sound and projection systems; (8) lighting systems and
design; (9) public area layout, design and treatment; and (10) stage, orchestra
pit and roll -down backdrop design and treatment. Lessor's right to approve the
Conceptual Design Plan shall be limited to ensuring that the improvements
contemplated by the Conceptual Design Plan are consistent with a first class
community theatre and reasonably consistent with the Guidelines for the
Rehabilitation of Historic Structures published by the Secretary of Interior. The
Conceptual Design Plan shall be deemed approved if Lessor serve written notice
of disapproval within thirty (30) days following submittal. Lessor's approval shall
not be unreasonably withheld and any disapproval by Lessor shall specify with
particularity the components of the Conceptual Design Plan disapproved, the
reasons for disapproval and alternatives that Lessor would approve. The Parties
shall agree on a Conceptual Design Plan within sixty (60) days of submittal.
9.4 Design Development.
Subsequent to approval of the Conceptual Design Plan, Lessee shall submit
Design Development Plans to Lessor for approval. The Design Development
Plans shall be based on, consistent with and amplify on the information provided
in the Conceptual Design Plan. The Design Development Plans shall include,
(1) specific interior and exterior lighting Plans and design; (2) specific information
regarding the color, material, treatment and design of all interior and exterior
elements; and (3) schedules showing the principal stages, phases and timing of
construction. Lessor's right of approval, which shall not be unreasonably
withheld, shall be limited to a determination that the Design Development Plans
are based on and consistent with the approved Conceptual Design Plans. The
Design Development Plans shall be deemed approved if Lessor fails to give
written notice of disapproval within thirty (30) days after submittal. Lessor shall
specify with particularity those components of the Design Development Plans
disapproved, the reasons for disapproval and the alternative(s) Lessor would
approve. The Parties shall agree on design Development Plans within sixty (60)
days after submittal.
9.5 , Final Plans and Specifications.
Subsequent to approval of Design Development Plans, Lessee shall submit Final
i Plans and Specifications. The Final Plans and Specifications shall be based on,
and consistent with, the Design Development Plans. The Final Plans and
-11-
Specifications shall be in sufficient detail to provide the information necessary to
obtain building permits from Lessor. Lessor's right of approval, which shall not
unreasonably be withheld, shall be limited to a determination that the Final Plans
and Specifications are based on and consistent with the approved Design
Development Plans. The Final Plans shall be deemed approved unless Lessor
serves written notice of disapproval within thirty (30) days of submittal. Lessor
shall specify, in detail, each element of the Final Plans and Specifications
disapproved, the reason for disapproval, and alternative(s) that Lessor would
approve. The Parties shall reach agreement on the Final Plans and
Specifications within 60 days of submittal.
9.6 Buildinq Permits.
Lessee shall apply for all necessary building permits from Lessor within one year
after the Effective Date. Lessee shall diligently process corrections and changes
to submittals that are necessary to comply with state and local law and to ensure
consistency with approved Final Plans and Specifications. Lessee shall also
obtain all permits or approvals required of any other governmental entity having
jurisdiction over the Property or any modification to the Property. In the event
that another governmental agency with jurisdiction over the Property requires
modification of the Final Plans and Specifications, the modifications shall be
submitted to Lessor for review and approval. Lessor shall not be unreasonably
withhold or delay the approval plans and specifications submitted by Lessee.
Lessor shall pay all building permit fees, planning fees and other fees and
charges normally imposed on similar projects.
9.7 Construction of Required Improvements.
Lessee shall begin construction of Required Improvements within sixty (60) days
after approval of all required building permits by Lessor and approval of any
permit(s) required by other governmental agencies with jurisdiction over the
Property. Lessee shall diligently pursue construction of the Required
Improvements to completion. Lessee shall complete construction of Required
Improvements within one year and sixty (60) days after issuance of all necessary
permits and approvals.
9.8 General Requirements.
9.8.1 The First Phase Improvements shall be constructed in compliance
with the other provisions of this Lease that regulate, or relate to, the
construction, alteration or maintenance of improvements on the
Property. Lessee acknowledges that the reviews and approvals
required by this Section, with the exception of the issuance of
building permits, are proprietary activities related to Lessor's
ownership of the Property and separate and distinct from any
review or approval conducted by City in its municipal capacity.
'> Lessee also acknowledges that any approval given pursuant to this
Section, except the issuance of building permits, does not bind the
-12
City when acting in its governmental capacity.
9.8.2 Lessor has designated the Committee to Promote Revitalization of
the Peninsula (PROP), or its successor, to review, and approve or
disapprove, the Conceptual Design Plan, the Design Development
Plans and the Final Plans and Specifications. Lessee shall provide
PROP with bimonthly reports on the status of the renovation of the
Property and operation of the Theater.
9.9 Extensions.
Lessee may request, and the City Manager of the City of Newport Beach may
grant, an extension of up to sixty (60) days with respect to any of the deadlines
specified in this Article. The City Council of the City of Newport Beach may,
upon a showing of good cause, grant extensions in excess of sixty (60) days.
The extensions authorized by this Section are in addition to any extension
resulting from force majeure.
ARTICLE 10 REPAIRS AND MAINTENANCE
Lessee recognizes that the Theater is a designated local historical landmark and is to
be maintained as such. Lessee shall, at Lessee's expense, perform all routine and
recurring maintenance necessary to keep the Theater in first class condition and in
accordance with the standards in this Lease. Lessee shall, at a minimum perform the
following: (i) the maintenance of the exterior surfaces of the Theater (including patching
and resurfacing the roof membrane and painting or other protective treatment of the
exterior wall of the Theater); (ii) maintenance of the public rest rooms (including repairs
or replacements of tile or rest room fixtures); (iii) the maintenance of electrical systems
serving the Property and Theater and the repair and replacement of components; (iv)
maintenance of all pipes and plumbing systems serving the Theater and Property, and
the repair and replacement of components; and (v) the maintenance of all building
service equipment (including HVAC equipment, conveyancing systems, and fire, life
safety, and emergency equipment) and the repair and replacement of components. As
soon as reasonably practicable following the completion of Required Improvements,
Lessee shall prepare and submit to Lessor a schedule for the periodic inspection and
maintenance by Lessee of the Theater. Lessee shall revise the schedule for
maintenance from time to time during the Term as necessary to maintain the Theater to
the standards required by this Lease. Lessee shall have the benefit of all warranties
available to Lessor with respect to the Theater or any component thereof. Lessee shall
not be responsible for the cost of and repair or maintenance required because of the
acts or omissions of Lessor. Lessee may terminate this Lease If the cost of repairing or
replacing any of the structural, roof, main electrical, plumbing, building service or fire /life
safety components of the Theater would make continued operation of the Theater
economically infeasible.
-13-
ARTICLE 11 STATUS AND MANAGEMENT OF LESSEE
`_... 11.1 Nonprofit Status
During the Term, Lessee shall maintain its status as a California public benefit
nonprofit corporation in full compliance with the California Nonprofit Corporation
Law (California Corporation Code Section 5000 et seq.). Lessee shall also
maintain its qualification as a tax - exempt organization under 501(c)(3) of the
Internal Revenue Code (or any successor statute).
11.2 Executive Board and Advisory Board
During the Term, Lessee shall appoint an Executive Committee consisting of no
more than five (5) members. The Executive Committee shall be authorized by
Lessee to interact with Lessor and promptly respond to problems or concerns
expressed by Lessor or members of the general public relative to the operation
of the Theatre. Lessee shall also appoint an Advisory Board or Advisory
Committee that is responsible for fund - raising. Lessee may appoint or establish
other Boards or Committees to perform specific functions relative to the
renovation, maintenance or operation of the Property and Theater.
11.3 Employment of Staff
r During the term, Lessee shall use its best efforts to employ a professional
executive director to manage the day to day renovation and /or operation of the
Theater and perform such other duties as Lessee may assign. The executive
director shall be appointed at least ninety (90) days prior to anticipated
completion of Required Improvements.
ARTICLE 12 ALTERATIONS
12.1 Written Consent.
Except as otherwise provided in this Article 12, Lessee obtain the written consent
of Lessor prior to making any structural or nonstructural alterations to the
Property. All structural and nonstructural alterations shall conform to the
Theater's designation as a local landmark and shall be consistent with the
original design and architecture of the Theatre. Lessee shall be solely
responsible for all costs and expenses incurred in making any alteration. All
alterations shall be surrendered with the Property when this Lease expires or
terminates.
12.2 Notice of Non - responsibility.
Structural and non structural alterations shall not be commenced until ten (10)
days after Lessor has received written notice from Lessee stating the date work
-14-
is to commence so that Lessor can post and record an appropriate notice of non -
responsibility. Structural alterations shall be made by a licensed contractor.
ARTICLE 13 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES
13.1 Public and Private Utility Services.
Lessee will pay all charges for all public or private utility services and all sprinkler
systems and interior protective services provided to or for the Property. Lessee
will comply with the terms and conditions of contracts relating to such services.
Lessor shall not be liable for any failure or defect in the supply of any utility.
13.2 Taxes, Assessments and Charges.
Lessee covenants to pay when due all applicable taxes, assessments, fees,
charges, and levies of every type and character, including all interest and
penalties, that are imposed, assessed or levied on the Property, any occupancy
or use of the Property, or any income derived from the Property.
13.3 Proof of Payment.
Lessee agrees to furnish to Lessor, upon request, proof of the timely payment of
any tax, assessment, levy, fee or charge or other. Lessee may pay any
assessment or tax in installments if legally permissible to do so. In the event
Lessee elects to pay assessments or taxes in installments, Lessee shall be liable
only for those installments which become due and payable during the term of this
lease.
13.4 Payment by Lessor
Lessor shall have the right to pay any assessment, tax, fee or charge before the
due date if Lessor has an objectively reasonable belief that Lessee is unwilling or
unable to make the payment. In such event, Lessee shall fully reimburse Lessor
within ten (10) days of written notice of payment by Lessor.
13.5 Property Taxes not Valid
The obligation of Lessee to pay taxes shall not be construed as evidence that
Lessor or Lessee believe that any tax is legal. This Lease is intended only to
obligate Lessee to pay taxes if legally imposed.
13.6 Notice of Possessory Interest Payment of Taxes and Assessments on Value of
Entire Lease Premises
In accordance with California Revenue and Taxation Code Section 107.6(a) and
Health and Safety Code Section 33673, Lessor states that by entering into this
J Lease, a possessory interest subject to property taxes may be created, and if so,
that Lessee shall pay taxes upon the assessed value of the entire property and
-15-
not merely the assessed value of its leasehold interest. Lessee or other party in
whom the possessory interest is vested may be subject to the payment of
property taxes levied on such interest.
ARTICLE 14 LIENS
14.1 Indemnification.
Lessee shall indemnify, defend and hold Lessor and the Property free, clear and
harmless from any claims, liens, demands, charges, encumbrances or litigation
arising directly or indirectly out of (1) Lessee's use, occupancy or operation of
the Property or (2) any work performed on, material furnished to the Property.
Lessee shall pay, prior to delinquency, for all work performed on, and material
furnished to, the Property which may result in a lien on the Property and shall
use its best efforts to keep the Property and Theater free and clear of all
mechanic's liens and similar liens.
14.2 Satisfaction of Liens.
Lessee shall fully pay and discharge a judgment or lien affective the Property
upon entry of final judgment in any action contesting any claim of lien (if final
judgment establishes the validity of all or a portion of the lien). Lessee shall also
pay any lien within fifteen (15) days after notice of the filing of any lien that
Lessee does not contest. Lessee shall reimburse Lessor upon demand for any
and all loss, damage and expense, including reasonable attorneys' fees, incurred
by Lessor with respect to any judgment or lien resulting from the acts or
omissions of Lessee related to the Property. Lessor shall have the right to
satisfy any judgment or lien if Lessee fails or refuses to do so and Lessee shall
fully reimburse Lessor in such event.
14.3 Notice to Lessor.
Lessee shall give Lessor written notice of any claim or lien filed against the
Property and any action or proceeding instituted affecting the title to the
Property.
14.4 Notice of Non - Responsibility.
Lessor shall have the right to post and maintain on the Property any notice of
non - responsibility authorized by law.
ARTICLE 15 INDEMNIFICATION
15.1 Indemnity.
M".
Lessee shall defend, indemnify and hold harmless Lessor from and against any
and all legal or administrative proceedings, claims, reasonable attorneys' fees
and costs, expenses, penalties, actual damages, punitive damages and losses,
including indemnity claims, in any way related to (1) the 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
15.7] on the Property or Theater, (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 other party, directly or indirectly arising
out of the presence of Hazardous Materials in, on or around the Property
15.2 CERCLA Liability.
Lessee agrees that this Lease is intended to operate as an indemnification under
Section 9607(e)(1) of the Comprehensive Environmental Response,
Compensation and Liability Act ( CERCLA), as amended, and the California
Hazardous Substances Act (CHSA), as amended.
15.3 Expense of Proceedings.
The defense of any suit, action, legal or administrative proceeding that may be
threatened, brought or instituted against Lessor that is the subject to the
indemnity provided in this Lease shall be conducted at Lessee's sole expense by
legal counsel selected and approved by Lessor.
15.4 Release.
Lessee waives, releases and forever discharges Lessor from any and all suits,
causes of action, legal or administrative proceedings, claims, demands,
liabilities, losses, costs, interest, attorneys' fees, expenses, penalties, actual
damages, punitive damages and losses, known or unknown, which Lessee ever
had, now has, or may have in the future that are in any way related to (i) the
condition, status, quality, nature, contamination or environmental state of the
Property including Lessee's claims under the CERCLA, the Carpenter-Presley-
Tanner Hazardous Substance Account Act and any other federal, state or local
law, ordinance or regulation, or common law theory of recovery, pertaining to the
presence, release, clean -up or containment of Hazardous Materials on the
Property
15.5 Waiver of California Civil Code 1542
Section 1542 of the California Civil Code states:
-17-
A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which, if
known by him, must have materially affected his
settlement with the debtor.
Lessee knowingly and voluntarily waives its rights pursuant to Section 1542.
Lessee fully understands the consequences of this waiver and has been advised
of the consequences by legal counsel. The Parties intend this Lease will be
effective as a bar to Lessee's Claims.
15.7 Definition of Hazardous Materials.
The term "Hazardous Materials" means, without limitation, gasoline, petroleum
products, explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, polychlorinated biphenyls or related or
similar materials, asbestos or any other substance or material that may be
defined as a hazardous, toxic or dangerous substance, material, waste, pollutant
or contaminant under any federal, state or local environmental law, ordinance,
rule or regulation as now or at any time hereafter in effect, including, without
limitation, (a)CERCLA, (b) the Federal Water Pollution Control Act, (c)the Clean
Air Act (d) the Resource Conservation and Recovery Act, , (e) the Toxic
Substances Control Act, (f) the Hazardous Materials Transportation Act, (g) the
Carpenter - Presley- Tanner Hazardous Substance Account Act, (h) Hazardous
Waste Control Law, and the (i) the Porter - Cologne Water Quality Control Act
C._ (California Water Code Section 13000 et seq.
ARTICLE 16 INSURANCE
16.1 Insurance to be Maintained.
Lessee shall take out and maintain, from the Effective Date and for the Term of
this Lease, at Lessee's sole cost and expense, the following insurance
16.1.1 Comprehensive General Liability in an amount not less than one
million dollars ($5,000,000) combined single limit per occurrence.
Lessor and its officials, employees and representatives shall be
covered as additional insureds with respect to liability arising out of
activities by or on behalf of Lessee or in connection with the use or
occupancy of the Property. Coverage shall be in a form acceptable
to Lessor and shall be primary and non - contributing with any
insurance or self- insurance maintained by City or Lessor.
16.1.2 Workers' Compensation as required by the Labor Code of the State
of California.
16.1.3 "All Risk" Property Insurance (Operations) including coverage
against the perils of earthquake, fire, explosion of machinery or
-18-
\1
equipment, and vandalism covering the full replacement cost of all
improvements and fixtures on the Property. Lessor shall be added
as insured under the standard loss payable endorsement. Lessee
waives all rights of subrogation against Lessor for any damage to
the improvements or fixtures covered by collectable commercial
insurance. Lessee's obligations to provide insurance under this
paragraph shall apply to all improvements and fixtures on the
Property without regard to the date of construction or installation.
Lessee's obligation to provide this coverage is contingent on the
availability of coverage at commercially reasonable rates.
16.1.4 Property Insurance - Construction. During construction of any
improvements on the Property, Lessee shall maintain builder's risk
insurance against "all risk" of physical loss, including the perils of
fire, collapse and transit, with commercially reasonable deductibles,
covering the total cost of work performed, equipment, supplies and
materials furnished on a replacement cost basis. Lessee's
obligation to provide this coverage is contingent on the availability
of coverage at commercially reasonable rates.
16.2. Acceptable Terms of Coverage.
Acceptable insurance coverage shall be placed with carriers admitted to write
insurance in California, or carriers with a rating of or equivalent to AVIII by A. M.
Best & Company. Any deviation from this standard shall require the specific
written approval by Lessor. Any deductibles or self- insured retentions must be
declared to and approved by Lessor. At the option of Lessor, Lessee may be
required to reduce or eliminate such deductibles or self- insured retentions or to
procure a bond guaranteeing payment of losses and related expenses and
costs. Coverage under each policy shall not be suspended, avoided or canceled
by either party except after 30 days prior written notice to Lessor. Lessee shall
furnish City and Lessor with certificates of insurance and with original
endorsements effecting coverage required by this Lease: The certificates and
endorsements for each insurance policy shall be signed by a person authorized
by the insurer to bind coverage on its behalf.
16.3 Index.
The limits of insurance coverage required by this Article shall be adjusted on
each seven (7) year anniversary of the Effective Date. The adjustment shall
reflect the percentage increase for the preceding seven years in the Consumer
Price Index for All Urban Consumers, Los Angeles- Anaheim - Riverside, All Items
(1982 -84 Base), published by the Bureau of Labor Statistics, Department of
Labor. Consumer Price Index.
16.4 Waiver of Subrogation.
ri
Each policy of insurance procured pursuant to this Article [17] shall contain, if
feasible, either (i) a waiver by the insurer of the right of subrogation against
-19-
either party for negligence of such party, or (ii) a statement that the insurance
shall not be invalidated should any insured waive, in writing prior to a loss, any or
all right of recovery against any party for loss accruing to the property described
,J in the insurance policy. Lessor and Lessee waive any and all rights of recovery
against the other for any loss or damage to that Party arising from any cause
insured against under the insurance policies required by this Article.
ARTICLE 17 DAMAGE BY FIRE OR CASUALTY
17.1 Lessee to give Notice.
In case of any material damage to or destruction of the Property, Lessee will
promptly give written notice to Lessor generally describing the nature and extent
of the damage or destruction.
17.2 Restoration
Except as provided in Section 18.3, in the event of damage to or destruction of
the Property, Lessee shall repair and restore the Property to its original condition
(subject to changes necessary to comply with then existing laws and any
changes in design approved by Lessor), at Lessee's sole cost and expense. To
the extent the insurance proceeds are insufficient to cover the cost of such repair
and restoration, Lessee shall make up the deficiency out of Lessee's own funds.
The repair and restoration shall be commenced within a reasonable period of
time following the casualty and shall be completed with due diligence. Lessee
shall have the option to terminate this Lease and surrender possession of the
Property to Lessor if the event the cost of such repair and restoration exceeds
the sum of (i) the amount of insurance proceeds available to Lessee plus (ii) the
amount of the deductible by an amount which Lessee reasonably determines
renders reconstruction of the Property economically infeasible. In the event of
such a termination, Lessee shall pay to Lessor the amount of the deductible and
assign to Lessor any and all rights Lessee may have to the insurance proceeds.
17.3 Casualty Late in Term
Lessee or Lessor shall have the right to terminate this Lease on ninety (90) days
written notice If (1) the Property is damaged or destroyed subsequent to the
fifteenth (15th) year of the Term, (ii) the costs of restoration and repair are
estimated to exceed fifty percent (50 %) of the then full replacement cost of the
Property (excluding land costs /value), and (iii) Lessee elects not to repair or
restore the Property. In such event, Lessor shall have the right to receive and
retain all insurance proceeds paid or payable to Lessee on account of any
damage or destruction to the Property.
17.4 Application of Insurance Proceeds.
In the event that Lessee is required to restore the Property pursuant to Section
17.2, proceeds from policies of insurance required by Article 16 and which are
-20-
received on account of any damage to or destruction of the Property (less the
costs, fees and expenses incurred in the collection), shall be applied as follows:
17.4.1 Lessee shall furnish to Lessor evidence satisfactory to Lessor of
the total cost of Restoration pursuant to Section [17.2]. Lessee
shall then furnish to Lessor satisfactory evidence that it has
available the total amount of money which, when added to the
insurance proceeds received, shall be sufficient to pay the cost of
such Restoration.
17.4.2 Assuming satisfaction of the conditions of subsection [17.4.1] net
insurance proceeds shall be paid to Lessee, unless Lessee is in
Default, to fund restoration. Payments from the proceeds of
insurance for restoration shall be made only upon written request of
Lessee accompanied by a certificate of an architect to the effect
that the amount requested has been paid or is then due, is properly
a cost of restoration, and there are no mechanic's or similar liens
for labor or material supplied in connection with the restoration to
date.
17.4.3 Upon completion of restoration and assuming Lessee is not in
default, excess insurance proceeds shall first be paid to Lessor to
the extent of its actual expenses incurred in the restoration, then to
Lessee as working capital
ARTICLE 18 EMINENT DOMAIN
18.1 Lease Governs.
The rights and obligations of the parties with respect to any Award shall be as
provided in this Article if there is any Taking during the Term of this Lease.
18.2 Termination of Lease.
This Lease shall terminate effective on the date of surrender of possession of the
Premises to the condemning authority in the event of a Total Taking. Lessee
shall continue to observe and perform all of the terms, covenants and conditions
of this Lease until the date of termination.
18.3 Partial Taking — Restoration.
If there is a Partial Taking, Lessee may, at its sole cost and expense, whether or
not the condemnation award is sufficient for the purpose, promptly commence
and diligently proceed to effect restoration of the Property as nearly as possible
to the condition and character immediately prior to such Taking.
�f
18.4 Distribution of Award.
-21-
All awards and damages received on account of any Taking, whether partial or
r total, including interest received ( "Award "), shall be paid promptly by the
�...;� person(s) receiving the same to an escrow agent mutually acceptable to Lessor
and Lessee to be distributed upon appropriate instruction from the parties.
18.5 Allocation of Award - Partial Taking.
Any Award in a Partial Taking shall be distributed by escrow in the following
order of priority:
18.5.1 First, to Lessor and Lessee to reimburse all costs and expense
incurred in the collection of the Award, including fees and expenses
incurred in the condemnation proceeding;
18.5.2 Second, to Lessee, as reimbursement for the costs and expenses
of restoration of the Property and as costs and expenses are
incurred by Lessee;
18.5.3 Third, if Lessor and Lessee are unable to agree upon the allocation
of the balance of the Award, if any, it shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court.
18.6 Allocation of Award - Temporary Taking.
In the event of a Taking for temporary use or occupancy, this Lease shall
continue in full force and effect and Lessee shall be entitled to claim, recover and
retain any Award made on account of such temporary Taking. However, if the
period of temporary Taking extends beyond the Term, the Award shall be
apportioned between Lessor and Lessee as of the date of expiration.
18.7 Allocation of Award -Total Taking.
Any Award in a Total Taking shall be distributed by escrow in the following
priority:
18.7.1 First, to Lessor and Lessee to reimburse for all costs and expenses
incurred by each in the collection of the Award;
18.7.2 Second, if Lessor and Lessee are unable to agree upon the
allocation, the balance of the Award shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court. The determination of the value of Lessee's and Lessor's
respective interests in the Property shall be made as if the Lease
were to continue in full force and effect until the Expiration Date.
18.8 Conduct of Proceedings. - -- - -
_22_
�i
Lessee and Lessor shall jointly participate in and prosecute /defend any action or
proceeding involving a Taking of the Property by condemnation or under the
�...: power of eminent domain and shall jointly make any compromise or settlement.
18.9 Notices.
Any party receiving notice of or becoming aware of any condemnation
proceedings shall promptly give written notice to the other party.
ARTICLE 19 ASSIGNMENT AND SUBLETTING
Lessee may not assign or sublet this Lease or any portion of the Property, without
Lessor's prior written consent which consent may be withheld in Lessor's sole
discretion. However, Lessee may grant such licenses, permits and concessions as are
reasonable, appropriate and customary to promote a Permitted Use and are in
accordance with the Operations Plan. Lessor may, at any time during the Term and in
its sole discretion, assign this Lease or its interest in the Property to a non - profit entity.
ARTICLE 21 LEASEHOLD MORTGAGES
�.i Lessee shall have no right to encumber its interest in this Lease, the Property or the
Theater without Lessor's prior written consent, which consent may be withheld in
Lessor's sole discretion.
ARTICLE 22 PERFORMANCE OF LESSEE'S COVENANTS
21.1 Right of Performance.
If Lessee fails to pay any tax, fee or other charge in accordance with Article [13]
within the time period required or shall fail to pay for or maintain any of the
insurance policies provided for in Article [17] within the time required, or to make
any other payment or perform any other act within the time required by this
Lease, then Lessor may, after 30 days' ,written notice to Lessee (or without
notice in case of an emergency) and without waiving or releasing Lessee:
21.1 Pay the tax, fee or charge payable by Lessee pursuant to the this
Lease; or
21.1.2 Pay for and maintain any insurance policies required by this Lease;
or
21.1.3 Make the payment or perform the act which Lessee's is required to
pay or perform pursuant to this Lease.
-23-
21.2 Reimbursement and Damages.
Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in
the exercise of its rights pursuant to Section 21.1.
ARTICLE 22 REPRESENTATIONS
22.1 Lessor's Representations.
Lessor represents to Lessee that:
22.1.1 Lessor owns the Property in fee simple subject only to the
Permitted Exceptions and other matters affecting title which do not
inhibit, prevent or impair the operation, maintenance or use of the
Theater.
22.1.2 Lessor has the power and authority to enter into this Lease and
perform all the obligations of Lessor hereunder.
22.2 Lessee's Representations.
Lessee represents to Lessor that:
22.2.1 Lessee has examined the Property and finds it will be fit for use as
a cultural and performing arts center in accordance with this Lease
and the Operations Plan upon completion of Required
Improvements.
22.2.2 Lessor has not made any representations or warranties regarding
the condition of the Property or the Theater, or its suitability for the
construction of Required Improvements or the operation and
maintenance of a Theater consistent with this Lease and the
Operations Plan.
22.2.3 Lessee has the right, power and authority to enter into this Lease
and to perform all the obligations of Lessee.
22.2.4 Lessee is a California public benefit nonprofit corporation in full
compliance with the provision of the California Nonprofit
Corporation Law (California Corporation Code Section 5000 et
seq.), and is a tax exempt organization under 501(c)(3) of the
Internal Revenue Code.
ARTICLE 23 DEFAULTS, REMEDIES AND TERMINATION
23.1 Legal Actions.
IM's
23.1.1 Institution of Legal Actions.
In addition to any other rights or remedies, either Party may
institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Lease. Any legal action shall be
filed in the County of Orange.
23.1.2 Applicable Law.
The laws of the State of California shall govern the interpretation
and enforcement of this Lease.
23.2 Rights and Remedies are Cumulative.
Except with respect to rights and remedies expressly declared to be exclusive in
this Lease, the rights and remedies of the parties are cumulative.
23.3 Occurrence of Default,
The following acts or omissions shall be considered material breaches of this
Lease if Lessee fails to cure the default within thirty (30) days after written notice
of default from Lessor or, if cure is not feasible within thirty (30) days, Lessee
has failed to commence cure within thirty (30) days or fails to diligently proceed
to complete the cure:
23.3.1 The failure of Lessee to comply with the provisions of Article 9
related to the design and construction of Required Improvements.
23.3.2 The failure of Lessee to operate the Theatre in compliance with the
provisions of Article 8 related to frequency and quality of
performances and events.
23.3.3 The failure of Lessee to maintain the Property as specified in
Article 10.
23.3.4 The failure of Lessee to restore or repair the Property in the event
of damage or destruction
23.3.5 The failure of Lessee to pay any fee, tax, charge, or assessment
when due or the failure to reimburse Lessor in the event Lessor
pays the fee, tax, charge or assessment.
23.4 Remedies.
If Lessee has materially breached this Lease then a Default shall be deemed to
have occurred, and Lessor, may give written termination notice to Lessee, and
on the date specified in the notice this Lease shall terminate. In addition to the
IN92
right of termination, Lessor shall have the following additional rights and
remedies:
�._.� 23.4.1 Lessor shall have the immediate right to reenter the Property
and /or the Theater, take possession of the Theater, any and all
Equipment, books and records, contracts and any other property.
23.4.2 Lessor may, at its option, enforce all of its rights and remedies
under this Lease, including the right to recover the consideration
and all other sums payable as they become due. Lessor shall also
be entitled to recover from Lessee all costs of maintenance and
preservation of the Property and /or the Theater, and all costs,
including attorneys' and receiver's fees, incurred in connection with
the appointment of and performance by a receiver to protect the
Property.
23.4.3 Lessor shall be entitled to recover all money payable to Lessee
related to the operation and use of the Theatre, all bank accounts,
accounts receivable, working capital and cash reserves (if any after
payment of Lessee's debts), and the balance in the Contributions
Fund.
ARTICLE 24 PERMITTED CONTESTS
Lessee, at no cost or expense to Lessor, may contest (after prior written notice to
Lessor), by appropriate legal proceedings conducted with due diligence, the amount or
validity or application, of any Imposition or lien, provided that the proceedings suspend
collection from Lessor and any action against the Property. If Lessee fails to contest
the matter, or fails to protect Lessor and Lessor's interest in the Property, Lessor may
contest or settle the matter in its sole discretion and obtain reimbursement from Lessee.
ARTICLE 25 ENTRY BY LESSOR
Lessor may enter the Property at reasonable times for the purpose of inspecting,
servicing or posting notices, protecting the Property or the Theater, or for any other
lawful purposes, including showing the Property to prospective purchasers or lessees.
ARTICLE 26 FORCE MAJEURE
Any prevention, delay, nonperformance or stoppage due to any of the following causes
shall be excused: any regulation, order, act, restriction or requirement or limitation
imposed by any federal, state or municipal government; acts of God; acts or omissions
of Lessor; fire, explosion or floods; strikes, walkouts or inability to obtain materials; war,
riots, sabotage or civil insurrection; or any other causes beyond the reasonable control
of Lessee.
-26-
1
ARTICLE 27 MISCELLANEOUS
1 27.1 Notices.
All notices and other communications shall be in writing, shall be sent by first
class registered or certified United States mail, postage prepaid, and shall be
deemed to have been given two (2) days after the day of mailing, addressed:
To Lessor;
City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA, 92658 -8915
With a copy to:
City Attorney's Office
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA, 92658 -8915
or at such other addresses as Lessor shall have furnished to Lessee; and
To Lessee;
Balboa Performing Arts Theatre Foundation
P.O. Box 752
Balboa, CA 92661
With a copy to:
Steve Bromberg
Bromberg & Yeager -
620 Newport Center Drive
11th Floor
Newport Beach, CA 92660
or at such other addresses as Lessee shall have furnished Lessor in writing.
27.2 No Claims Against Lessor.
Nothing in this Lease constitutes any consent or request by Lessor for the
performance of any labor or services or the furnishing of any materials to the
1 Property
-27-
27.3 Integration.
This Lease, and the exhibits, are the entire agreement between the parties, and
there are no agreements or representations between the parties except those
specified in this Lease. This Lease supersedes any prior negotiations,
representations, discussions or agreements between the Parties with respect to
the Property or the Theater. Except as otherwise.. provided, no. subsequent.
change or addition to this Lease shall be binding unless in writing and signed by
the parties.
27.4 No Waiver By Lessor.
To the extent permitted by law, no failure by Lessor to insist upon the strict
performance of any term of this Lease, or to exercise any right, power or remedy
upon a default under this Lease, shall constitute a waiver.
27.5 Severability.
If any term of this Lease or any application thereof shall be declared invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Lease
shall not be affected. Unless otherwise expressly provided, any approval or
consent of Lessor required shall not be unreasonably withheld or delayed. This
Lease shall be binding upon and inure to the benefit of and be enforceable by
the respective successors of the parties.
27.6 Holding Over.
A tenancy for month to month shall result if Lessee remains in possession of the
Property or the Theater with the consent of Lessor after the expiration of the
Term. The month to month tenancy shall be on the same terms and conditions
as contained in this Lease.
27.7 No Partnership.
This Lease does not cause Lessor to be a partner of Lessee, a joint venturer
with Lessee, or a member of a joint enterprise of Lessee relative to the operation
of the Theatre or otherwise.
28.8 Federal Funds Provisions.
No Federal appropriated funds shall be paid, by or on behalf of Lessee to any
person for influencing or attempting to influence an officer or employee of any
Federal agency, a Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with the awarding of any
Federal contract, the making of any Federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal contract,
,grant, loan, or cooperative agreement. If any funds other than Federal
appropriated funds have been paid or will be paid to any person for influencing
Im
i
I
t..
or attempting to influence an officer or employee of any agency, a Member of
Congress, and officer or employee of Congress or an employee of a Member of
Congress in connection with this Federal contract, grant, loan or cooperative
agreement, Lessee shall complete and submit Standard Form -LLL, "Disclosure
Form to Report Lobbying," in accordance with its instructions.
Lessee shall require that the language of this certification be included in the
award documents for all contracts, subcontracts, and agreements
28.9 Time of the Essence.
Time is of the essence relative to all of the terms, provisions, covenants and
conditions of this Lease.
Dated
For Lessor
Thomas Cole Edwards
Mayor of City of Newport Beach
Dated Lessee
For Lessee
President of Balboa Performing Arts Theatre Foundation
F: \cat\ shared \da \Projects \B al b oaThe ater\Leas a \112098. doc
-29-