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HomeMy WebLinkAbout09 - Agreement between the City of Newport Beach and Schock BoatsItem No. 9 December 14, 1998 COMMUNITY SERVICES DEPARTMENT Arts & Cultural - Library - Recreation - Seniors To: Mayor and Members of City Council From: LaDonna Kienitz, Community Services Director /City Librarian Re: Agreement between the City of Newport Beach and Schock Boats RECOMMENDATIONS 1. Approve the Agreement between the City and Schock Boats for use of the dock bayward of the 29" Street end. 2. Approve the amended City Policy 1 -2 — Instructional Recreation Activities. BACKGROUND The License – The City and Schock Boats have worked together since 1968 to provide the boats for the public instructional sailing classes, an important and historical component of the City's recreational program. An agreement between the City and Schock Boats, beginning in 1968, provided Schock with use of the floats and access ramps bayward of the 29th Street end and authorized the original construction of the floats at Schock's expense. The use of this City property by Schock Boats increased available dock area and connected the Schock sales and repair operations, which are bisected by the street end. In exchange, Schock Boats maintained and repaired the instructional sailing fleet used in the City sailing programs. The last agreement with Schock Boats expired April 30, 1997. Schock Boats have been without a formal agreement with the City since April 1997. In good faith Schock Boats fulfilled their annual obligation by preparing the boats for the 1997 summer season, which in effect extended the contract through April 1998. Schock has requested a straight license agreement for the use of the dock to replace the previous agreement requiring the refurbishment of the sailboats as payment. The business of the company has changed and the firm can no longer maintain the type of boats in the City's fleet. The attached agreement begins July 1, 1998, and extends through June 30, 2006. It sets an annual fee of $6,000 for the use of the dock. It also established a pro -rated fee of $1,000 due from Schock Boats for the use of the dock for May and June of 1998. Schock Boats and the City acknowledge that the dock length is two 25 -foot lengths, a total of 50 feet. Current market prices for use of that size dock are from $11.90 - $12.50 /ft per month, or approximately $7,200 per year. Schock Boats has been given some concession for the fact that there are no services available at the site and that they will build and maintain the floats and ramps themselves. The license agreement was drafted by the City Attorney's office, reviewed by the City Risk Manager, and the Fire and Marine Department, then approved by the Parks, Beaches and Recreation Commission on October 6, 1998. LICENSE AGREEMENT This AGREEMENT, entered into this day of , 1998, by and between the CITY OF NEWPORT BEACH, a municipal corporation (hereinafter referred to as "City"), and SCHOCK BOATS, a California Corporation (hereinafter referred to as "Schock ") whose address is 2900 Lafayette Avenue, Newport Beach, California, 92663, and is made with reference to the following: RECITALS A. City 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 Charter of City. B. City is owner of approximately 57' of dock with floats and access ramps located at the end of 29'" Street. City dock, floats and access ramps are shown on Exhibit "A" (hereinafter referred to collectively as "29'" St. Dock "). C. Schock conducts a boat sales and repair business at 2900 Lafayette Avenue. D. City and Schock entered into an Agreement dated May 29, 1987 for use of the 29th St. Dock, which Agreement expired on April 30, 1997. Between May 1, 1997 and April 30, 1998, Schock continued to use the 29th St. Dock under the terms of the 1987 Agreement. E. City and Schock desire to enter into an Agreement to allow Schock the use of the 29th St. Dock effective May 1, 1998. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERMS The term of this License Agreement shall be effective as of the 1" day of May 1998 and shall terminate on the 30" day of June 2006, unless terminated earlier as set forth herein. 2. LICENSE GRANT City grants to Schock a license to the use of the 29" St. Dock for Schock's boat sales and repair business upon terms and conditions of this Agreement. 3. SERVICES TO BE PERFORMED BY SCHOCK Schock shall: a. Maintain the 29' St. Dock in a safe and working condition. b. Pay to City fees in the amount of six thousand dollars ($6,000) per year to be used by City to repair and replace boats and materials for the City sailing program. Payment shall be made biannually with first payment of $3,000. due within ten (10) days of City Council approval of this Agreement, the second payment of $3,000.00 due on January 1, 1999, and $3,000.00 each July 1st and January 1st thereafter. Commencing on July 1, 2001, Schock agrees to pay increased fees adjusted to the fair market value established for rental rate per lineal foot of comparable facilities. In addition, Schock agrees to pay an additional $1,000. for May and June of 1998, at the same time first payment is due. C. Maintain vehicle access on surrounding public streets by complying with City of Newport Beach Municipal Code (NBMC) parking regulations. d. Prohibit all vessels from being moored overnight at the 29'" Street Dock without prior permission from City. Schock further agrees and understands that the 29'" Street Dock is and continues to be public property and that the public shall not be denied access to and use of the 29' Street Dock. 4. STANDARD OF CARE Schock agrees to perform or pay for all services, materials hereunder in a manner commensurate with the City's design criteria and standard drawings for harbor construction and agrees that all services will be performed by qualified and experienced personnel or companies who are not employed by City nor have any contractual relationship with City. 5. INDEPENDENT PARTIES City and Schock intend that the relationship between them created by this Agreement is that of Licensor- Licensee. The parties intend and agree that at all times during the performance of services pursuant to this agreement, Schock shall have sole legal responsibility to remit all federal and state income and social security taxes, to provide for workers compensation and unemployment insurance, and to provide liability insurance in amounts as required by City. 6. INDEMNIFICATION AND INSURANCE Schock shall indemnify and hold harmless City, its City Council, boards and commissions, officers and employees from and against any and all loss, damage, liability, claims, suits, costs and expenses whatsoever, including reasonable attorneys' fees, regardless of the merit of any such claim or suit arising from or in any manner connected to Schock's use, maintenance and repair of 29th St. Dock pursuant to this Agreement. City shall indemnify and hold harmless Schock, its officers and employees from and against any and all loss, damage, liability, claims, suits, costs and expenses whatsoever, including reasonable attorneys' fees, regardless of the merit of any such claim or suit arising from or in any manner connected to City's negligent performance of services or work conducted or performed pursuant to this Agreement. Schock shall furnish to City with certificates showing current insurance coverage of a minimum of one million dollars ($1,000,000) in general commercial liability and Workers' Compensation (as required by State Law). The commercial liability policy shall be issued by an insurance company licensed to sell insurance in the State of California and shall carry a special endorsement naming City as additional insured. All insurance shall be maintained for the term of the Agreement. 7. PROHIBITION AGAINST TRANSFERS Schock shall not assign, sublease, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law or otherwise. Any attempt to do so without said consent shall be null and void, and any assignee, sublessee, hypothecate or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Schock understands and agrees that this Prohibition Against Transfers includes, but is not limited to, the Prohibition against leasing, renting, transferring or assigning any space located at the 29' Street Dock to any other person or entity for any reason whatsoever. The sale, assignment, transfer or other disposition of any of the issued or outstanding capital stock of Schock, or of the interest of any general partner or joint venture or syndicate member or cotenant if Schock is a partnership or joint venture or syndicate or cotenancy, which shall result in changing the control of Schock, shall J be construed as an assignment of this Agreement. Control means fifty percent (50 %) or more of the voting power of the corporation. 8. PERMITS AND LICENSES Schock, at its sole expense, shall obtain and maintain during the term of this Agreement, all appropriate permits, licenses and certificates that may be required in connection with the performance of services hereunder. 9. RECORDS Schock shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relates to the performance of services under this Agreement. Schock shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. 10. NOTICES All notices, demands, request or approvals to be given under this Agreement, shall be given in writing and conclusively shall be deemed served when delivered personally or on the second day after the deposit thereof in the Unites States mail postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, or approvals from Schock to City shall be addressed to City at: Newport Beach City Hall 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA, 92658 -8915 Attention : Community Services Department All notices, demands, requests, or approvals from City to Schock shall be addressed to Schock at: Schock Boats 2900 Lafayette Avenue Newport Beach, CA, 92663 11. TERMINATION a. In the event Schock hereto fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, Schock shall be deemed in default in the performance of this Agreement. If such default is not cured in writing within a period of two (2) days after receipt by Schock from City of written notice of default, specifying the nature of such default and the steps necessary to cure such default, City may terminate the Agreement forthwith by giving to Schock written notice thereof. b. Notwithstanding section 11(a), above, either party shall have the option, at its sole discretion and without cause, of terminating this Agreement by giving thirty (30) days' written notice to the other party as provided herein. Upon termination of this Agreement, Schock shall pay to the City that pro- rated portion of fees specified in this Agreement that is unpaid prior to the effective date of termination. 12. COMPLIANCES Schock shall comply with all laws, State or Federal and all ordinances, rules and regulations enacted or issued by City. 13. WAIVER A waiver by City of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein whether of the same or a different character. 14. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Agreement will be effective only by written execution signed by both City and Schock. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first above written. CITY OF NEWPORT BEACH, a Municipal corporation By: Dennis D. O'Neil Mayor APPROVED AS TO FORM: Robin L. Clauson Assistant City Attorney SCHOCK BOATS a California Corporation By: ATTEST: 32 LaVonne Harkless City Clerk F: \cat \da \ks\Sh ared V.g\Sch ock\ 11 /2/98. doc 5' 1 -2 INSTRUCTIONAL RECREATION ACTIVITIES The instructional recreational programs for children and adults provided by the Community Services Department will be conducted on the basis of being at least self- supporting. An amount equal to at least 25% of the costs incurred will be set aside for administrative overhead. Registration fees will be based on an amount sufficient to acquire independent contractors, class materials and the administrative overhead and a facility use fee. Occasionally, it may be necessary to conduct a specific class in which revenues are not sufficient to be self- supporting. However, each total recreation program, such as tennis, sailing, surfing, etc., will be at least self- supporting. A sum of money equivalent to 20% of the gross annual revenues derived from the instructional classes in surfing shall be set aside and used for the purpose of purchasing new or replacement surfboards. A total of 20% of the registration fees from tennis instructional classes shall be set aside annually for refurbishment or development of tennis courts or development of new recreational programs or facilities. The Community Services Director or designee is authorized to enter into agreements for securing independent contractors for approved instructional recreation activities. for refurbishment and renlacement of the recreation sail boat fleet and development of waterfront activities programs. Adopted - October 1963 Amended - August 30, 1966 Amended - November 25, 1968 Amended - June 2, 1998 - Parks, Beaches and Recreation Commission /n Agreement between the City of Newport Beach and Schock Boats Page 2 Terms of the License 1. A term of 10 years, with a review in five years to renegotiate cost, based on market conditions at that time. 2. Schock to replace the docks at no cost to the City. 3. Annual cost per year of license, $6,000 to be paid in semi - annual payments. 4. Schock will maintain public access to the docks as per the original agreement. 5. $1,000,000 general liability insurance required, naming the City as additionally insured, providing a written endorsement attached to the certificate of insurance. 6. License begins July 1, 1998, with semi - annual payments due July 1 and January 1. 7. Schock will pay a pro -rated fee of $1,000 for May and June 1998. Amendment to Policy 1 -2 — An amendment to City Policy 1 -2 was approved by the Parks, Beaches and Recreation Commission on June 2, 1998, to provide the ability to continue maintenance of the City's sailing fleet and continue the historic link between Schock Boats and fleet maintenance. The revised City Policy 1 -2 provides that the revenue from the Schock Boats license will fund the annual repair and replacement of the City sailing fleet. Attachments: 1. License Agreement 2. Revised City Policy 1 -2 1_