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03 LEASE BLDG 29 MCAS 06-16-97
NO. 3 6-16-97 lnter-Com DATE: JUNE 16, 1997 TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM' REDEVELOPMENT AGENCY STAFF SUBJECT: CONSIDERATION OF A LEASE WITH THE UNITED STATES OF AMERICA FOR THE PREMISES KNOWN AS BUILDING NO. 29 (HANGAR NO. 2) MCAS-TUSTIN, AI~D A SUBLEASE BETWEEN THE CITY AND WALT DISNEY PICTURES RECOMMENDATION' It is recommended that the City Council: · Approve the Environmental Determination for the project by adopting Resolution No. 97-45; and · Approve a Lease Agreement between the City of Tustin and the United States of America for the premises known as Building No. 29 (Hangar No. 2) MCAS-Tustin and authorize the City Manager or Assistant City Manager to execute said lease with concurrence by the City Attorney; and o Approve the Sublease Agreement between the City of Tustin and Walt Disney Pictures for Building 29 and authorize the City Manager or Assistant City Manager to execute the Sublease with concurrence of City Attorney and subject to any final negotiations with Walt Disney Pictures; and . Authorize the City Manager or Assistant City Manager to negotiate and execute any future subleases for Building 29 consistent with the Master Lease subject to approval by the City Attorney of all lease documents; and · Authorize transfer of all rent revenues received that are authorized City of Tustin reimbursable expenses to the Redevelopment Agency to be used for marketing and administrative and property management expenses related to the MCAS-Tustin Project. City Council Report Lease for Building No. 29 June 16, 1997 Page 2 FISCAL IMPACTS There will be no net cost to the City of Tustin. Lease provisions provide cost recovery for the City's administrative expenses. BACKGROUND/DISCUSSION Marine CorPs Air Station, Tustin (MCAS-Tustin) is an installation to be closed under the Defense Base Closure and Realignment Act of 1990. Pending the final disposition of the property, Section 2667(f) of title 10, United States Code authorizes the Secretary of the Navy to lease real property located at a closing military base, provided that the Secretary determines that such a lease would facilitate state or local economic adjustment efforts. Building No. 29 on the installation was constructed in 1943 to serve as a blimp hangar and includes approximately 298,000 gross square feet of floor space. It has been included in the National Register of Historic Places. The City proposes to lease and to sublease Building No. 29 for the purposes which will fa6ilitate local economic adjustment and promote the mutual goal of generating lease revenues that will be allocated for the purpose of protecting and maintaining base facilities from degradation and deterioration. Prime Lease with Government The draft Lease Agreement with the U.S. Government (the Prime Lease) is included as Attachment 1. The major provisions of the Prime LeaSe are outlined below: Term of Lease - The term of the Lease is for two (2) years, with three one-year extensions possible. In any event, termination is required upon conveyance of the property by deed. Rent - $.22 per square foot per month for actual square footage occupied by 'a Sublease. ~The Lease is a triple net lease with values established based on an appraisal completed by the Navy and negotiations between the Navy and Agency staff. Leased Premises - Building No. 29 at MCAS-Tustin and. the adjacent premises as illustrated in Exhibit A of Attachment 1. City Council Report Lease for Building No. 29 June 16, 1997 Page 3 Estimated Utility and Service Charges - Charges' will be monthly based on actual utility usage and. actual service costs with all charges to be adjusted quarterly. No payments will be necessary unless a Sublease is in place paying these costs. · · Rental Offsets - The City is entitled to an automatic Rental Offset to cover its indirect overhead expenses (e.g., duplication, postage, departmental, administration, supplies, office equipment, audit services) related to the Lease in an amount of'6.75% of the gross rent achieved. The City shall also be entitled to a Rental Offset to 'cover direct, expenses (e.g., administration, marketing and management) in an additional amount not to exceed 15% of gross revenues. Additional Rental OffsetS - Lessee may have additional offsets to the rent for the value of the protection, maintenance, improvement and repair services subject to Marine Corps approval; installation of utility meters, and payment of utility and service charges when the building or portions of building are not leased. Insurance - Lessee will bear risk of loss or damage'to the Premises and is required to impose on all Subleases significant insurance obligations as defined in the Sublease summary which follOws. Other Lessee Responsibilities - maintain faCilities in a safe and clean condition. Permitted Uses - Filming and film production, storage and office space. Exhibits to the Prime Lease are not yet completed. However, st~ff are requesting that the City Council give staff the authority to complete negotiations subject to approval of all documents by the City Attorney prior to its execution. Sublease The completed Sublease Agreement for.Building 29 with Walt Disney Pictures is included as Attachment II. Major provisions of the Sublease parallel and subordinate themselves to the Prime Lease With the. Navy. Major provisions are as follows: City Council Report Lease for Building No. 29 June 16, 1997 Page 4 Term of Sublease. The term of the Lease is for eight (8) months with month-to-month extensions at the option of the Landlord. Rent - Will be defined consistent with Prime Lease to reflect the term of the lease and net square footage of the hangar to be used by Walt Disney Pictures. Additional Rent - Tenant to reimburse Landlord for all operating costs as Additional Rent. Insurance - Tenant is required to provide comprehensive public liability and property damage insurance for subleased premises~ with a combined single limit of $10 million; Workers Compensation insurance and fire and "all risks" insurance covering 90% of the replacement value, of the site and structure and related personal property] Final negotiations with Walt Disney Pictures have not been completed. Exhibits to the Sublease are also not yet completed. As is the case with the Prime Lease,'staff are requesting that the City Council give staff the' authority to complete negotiations consistent with the Prime Leas~ and subject to approval of all documents by the City Attorney prior to its execution, Subsequent Subleases The Redevelopment Agency staff are also requesting .authorization from the City Council for staff to negotiate and execute any future Subleases for Building 29 that are cOnsistent with the Prime Lease with the Navy. This will facilitate our expediting the processing of all lease applications. Of course, all lease documents will be subject to.the City Attorney's approval. ENVIRONMENTAL ANALYSIS A NegatiVe Declaration/Initial Study was prepared for the project, a copy of which is attached to this report. Based upon review of the Lease and Sublease agreements, it has been determined that the environmental' impacts relating to this project will be reduced'to an acceptable level with the inclusion and implementation of the City Council Report Lease for Building No. 29 June 16, 1997 Page 5 identified mitigation measures. These mitigation measures have been included as conditions of approval in City Council Resolution No. 97-45. Staff recommends ~he City Council certify the Negative Declaration as adequate pursuant to the provisions of the California Environmental Quality Act.~ Christi~ A. S~/ngleton Assistant City Manager CAS: KB: kd\bldg2 9. kb Attachments: . . Lease between the United States Government and the City of Tustin Sublease between Walt Disney Pictures and the, City.of Tustin Resolution No. 97-45 Negative Declaration/Initial Study ATTACHMENT I Lease between the United' States Government and the City of Tustin LEASE N6871196RP BETWEEN THE UNITED STATES OF AMERICA AND THE CITY OF TUSTIN _ 6/11/97 - HANGER2.wpd 2. 3. 4. 5. 6. 7. o 9. 10. 1'1. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. Section INDEX Leased Premises. Term. Rent. Joint Inspection Report. Easements and Rights of'Way. Permitted Uses. Restriction on Subleases, Transfers and Assignments. Maintenance. Environmental Disclosure. Environmental Protection. Indemnity. -- Risk of Loss-Insurance. Representations. Default Termination. 15.1 Termination by G°vernment. 15.2 Termination by Lessee. Surrender. Restoration. Installations of Machinery and Removable Fixtures. Disputes. Covenant Against Contingent Fees. Officials Not to Benefit. Failure of Parties to Insist on Compliance. Utilities and Services. Liens. Access. -Taxes. Page 7 8 8 8 13 14 16 17 17 17 18 19 19 20 20 22 23 23 23 23 24 24 6/11/97 - HANGER2.wpd Section INDEX Page 27. 28. 29. 30. 31. 32. 33. Agreement. Labor Provision. 28.1 Equal Opportunity. 28.2 Convict Labor. 28.3 Contract work Hours Standards Act. Payments. Interest Administration and Notice. Applicable Rules'and Regulations Miscellaneous Provisions. 33.1 Rules of Construction. 33.2-Entire Agreement, Waiver and Amendments. 33.3 33.4 33.5 33.6 33.7 33.8 Incorporation of Recitals. Captions. Consent. Covenant of Cooperation. -Force Majeure Severability' 24 25 25 26 26 27 28 28 29 29 29 3 3 3 3 3 3 3 6/11/97 - HANGER2.wpd LEASE BETWEEN THE UNITED STATES OF AMERICA AND THE CITY OF TUSTIN FOR BUILDING 29, MARINE CORPS AIR STATION, TUSTIN, CALIFORNIA This lease is made between the United States of America, by and-through the' Commande~, Southwest. Division, Naval ~ Facilities Engineering Command, hereinafter referred to as the "Government"-and the City of Tustin, a municipal corporation, hereinafter referred to 'as the "Lessee," respecting the following matters. RECITALS A. Section 2667(f) of title 10, United States Code authorizes the Secretary of the Navy ~O lease real property located at a military installation to be closed under the Defense Base Closure and Realignment Act of 1990 pending the final disposition of the property, prOvided that the Secretary determines that such a lease would facilitate State or local economic adjustment efforts. B. Marine Corps Air Station, Tustin (MCAS Tustin) is an installation to be closed under said Closure and Realignment Act. Building 29. on the installation was constructed to serve as a blimp hanger and includes approximately 238,520 net square feet of flOor space. It has been included in the National Register of. Historic Places. Lessee wishes to lease and to sublease Building 29 for purposes which will facilitate local economic adjustment. C. The Department of Defense rule (32 CFR ~ 91.7) regarding the revitalization of base closure communities and community assistance recognizes that the leasing of real property prior to the final disposition of closing 6/11/97 - HANGER2.wpd installations may facilitate local economic adjustment efforts and encourage economic redevelopment.' The rule authorizes the grant of interim leases which are not incompatible with possible final reuse and disposal decisions and which make no commitment for future use Or ultimate disposal.' D. During a perlod of over 50 years of .use, hazardous substances have been stored, released and disposed of on the installation. An Environmental Baseline Survey (EBS) regarding the 'installation was performed in accordance with the Community Environmental Response Facilitation Act in December, 1993, and a Finding of Suitability to Lease (FOSL) for Building 29 has been prepared in accordance with Department of Defense policy guidelines on the subject. The FOSL concludes that activities allowed under this lease, if conducted in accordance with the restrictions contained herein, may be conducted with acceptable risk to human health and the environment. The FOSL has been concurred in by the cognizant state and federal regulatory agencies. Copies of the EBS and FOSL, together with the documents referred to in the FOSL, have been provided to the Lessee. E. The Secretary of the Navy' has determined that the proposed use of Building 29, subject to the terms and conditions of this lease, meets the criteria of 10 U.S.C. 2692(b) (8) and (9) . .F. The City COuncil of the City of Tustin is the recognized local redevelopment authority for MCAS Tustin. Under the Constitution of the State of California and 'in accordance with the State of California Government Code, Lessee has the authority to hold and lease real property. The City Council has authorized the City Manageu to take the steps necessary to lease Building 29 for the purposes set forth herein. G. The City of Tustin has prepared a redevelopment plan in accordance with the provisions of the Base Closure Community Redevelopment and Homeless Assistance Act of 1994. H. Pending the final disposition of the Property at MCAS Tustin, the Lessee desires to cooperate with. the Government to achieve the parties' mutual goal of protecting Building 29 from degradation and deterioration through appropriate maintenance. 6/11/97 - HANGER2.wpd AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and other considerations set forth herein, it is mutually agreed as follows: 1. Leased Premises. Government, under the terms and' conditions of this lease,, hereby agrees to lease to Lessee and Lessee agrees to lease from Government, the premises and property heretofore referred to as Building 29 at MCAS Tustin, consisting of certain real property and improvements, more particularly described in Exhibit A attached hereto and incorporated herein (the "Premises%,). 2. Term. This lease shall commence on July 1, 1997, and terminate on June 30, 1999, or-a-succeeding anniversary date if the term has been extended as set forth below. Lessee 'may extend the term of this lease for three additional one year periods, by delivery.to Government of written notice of its intention to extend the term of this lease no later than ninety (90) days prior to the expiration of the initial term or any extension. Notwithstanding the initial term or any extension thereof, this lease shall terminate upon . conveyance and delivery of a deed for any part of the Premises. 3. Rent. 3.1 The rent payable under this lease shall be at the rate of .22 cents per net square foot, per month, for each month the Premises are used or subleased by Lessee. Said rent shall be calculated by application of the rate to the'net square footage used or subleased. The rent for any period during the term which is less than one (1) full calendar month Shall be'prorated on the basis of a 30 day month. For purposes of this section, net square footage shall include all interior space within Building 29 excluding utility vaults, lofts, and a 20 ft. wide fire lane.on the north and south sides on the interior of the hangar bay. 3.2 The rent due may be offset by certain costs incurred by the Lessee, hereafter referred to as ~Rental Offsets" subject to limitations set out below. 6/11/97 - HANGER2.wpd 3.'2.1 In consideration of Lessee's indirect overhead expenses, the Lessee shall be entitled to a Rental Offset for indirect overhead incurred in connection with the lease of 6.75% of rent due. 3.2.2 In consideration of Lessee's direct. expenses for administering the lease and any sublease and for marketing and management of the Premises, the Lessee shall be entitled to a Rental Offset of up to 15% of rent'due. Said Rental Offset is intended to cover all of Lessee's expenses. No additional credit or offset shall be allowed without approval of the Government. 3.2.3 Lessee shall be entitled to a Rental Offset for any utility or service costs required by paragraph 23 of this Agreement incurred when the Premises are not used or subleased. In the event that there are not adequate rent revenues to provide~an offset for these expenses, said offset can be credited against future rent payments. 3.2.4 In addition to the Rental Offsets allowed by paragraphs 3.2.1, 3.2.2, and 3.2.3, Lessee may have an offset against rent for the value of the protection, maintenance, improvement and repair services, including installation-of utility meters and utility connections, it provides at MCAS Tustin, when approved by the Government.· 3.2.5 The Government shall not be required to reimburse the Lessee for Rental Offsets which exceed any funds available in the Special Fund. However, Lessee shall be entitled to carry forward any unapplied Rental Offsets and to apply said Rental Offsets against the rent due in future months under this lease, as it may be amended or extended. 3.3 The balance of.any rent due under.this lease shall be deposited in a special fund established and maintained by the Finance Department of Lessee. The moneys in said special fund shall be for the sole benefit of Government and shall be used to provide specific maintenance, improvement and repair services at MCAS Tustin in accordance with written instructions of the Government..Any balance due the Government on any anniversary date, or upon termination shall be paid to Government within 30 days of said anniversary date or termination. 6/11/97 - HANGER2.wpd 3.4 Lessee shall keep adequate records and books of account showing rent collections and the actual cost to it of all items of labor, material, equipment, supplies, serviCes and other items of cost of any nature constituting cost incurred by it directly in the ~erformance of any item of work or services mentioned in subparagraphs 3.2.2, 3.2..3, and 3.2.4. Lessee shall provide Government with access to such records and books of accohnt and proper facilities for inspection thereof at all reasonable times. All information obtained from said records and books of account shall be deemed confidential. 4. Joint Inspection Report. A joint inspection of the Premises has been conducted by representatives of Lessee and Government, and a complete inventory'of Government property located thereon has been p~epared. The inventory describes the condition~of' the Premises, and any deficiencies which exist. The inventory is attached as Exhibit B. All facilities and property delivered to Lessee shall be delivered "as is, where is," and, as such, Government makes no warranty as to such facilities and property, either as to their usability generally, or as to their fitness for any particular purpose. 5. Easements and Rights of Way. This lease shall be subject to easements and rights of way for location of any type of'facility over, across, in and upOn the Premises which are either of record or have been made known to Lessee by delivery of a'dopy of the easement document. This lease shall also be subject to the right of Government' to grant such additional easements and rights of way over, across, in or upon the Premises as it shall determine to be in the public interest. The grant of any such additional easement or right of way shall be conditioned upon the assumption, by the grantee thereof, of liability to the Lessee and sublessee for such damages as the Lessee'or sublessee shall suffer for property destroyed or property rendered unusable on account of the grantee's exercise of its rights thereunder. Such easements and rights of way shall in61ude, but not be limited to, those for water, gas, electricity, steam, telephone, sewer, pipelines, conduits and for any type of facility, including, but not limited to, those for communications, heating, cooling and power, and shall include the right to enter upon, above, below or through, the surface to construct, maintain, replace, repai~, enlarge or otherwise utilize the Premises for such purpose, provided the surface shall be restored to the condition previously . existing and provided that interference with the Lessee's 6/11/97 2 HANGER2.wpd use of the Premises is minimized to the extent practicable. Government has installed structures, facilities, pipelines and conduits on the Premises. For'purposes of this paragraph, these facilities and installations shall be treated as if they were within easements and rights of way. . Permitted Uses. 6.1 Subject to the restrictions set'out below, the purposes for which the Premises and any improvements thereon may be used, in the absence of prior written approval-of Government for any other use, is for filming and film production, storage, and office space. 6.1.1 There shall be no filming outside of Building 29 except in accordance with the provisions of 6.1.3. · . 6.1.2 In connectiOn with any application to sublease for the purpose of filming or film production, Lessee shall require the prospective sublessee to submit a copy of the proposed shooting script to Lessee. Lessee shall review the script to determine whether it contains any portrayal of the United States military, including but not limited to the depiction of military personnel or facilities. If there is no such portrayal, Lessee, may execute the sublease no sooner than ten days after it submits a written verification to that effect, together with a copy of the script, to both the Director, U.S. Marine Corps Public Affairs Office, 11000 Wilshire Boulevard, Los Angeles, California 90024, and to the Public Affairs Officer, BRAC, P.O. Box 4048, MCAS E1 Toro, 92709. Nothing in this paragraph shall modify the requirements of'paragraph 7. 6.1.3 If Lessee determines from a. review of the script that it does contain a portraya! of the United States military, Lessee shall refer the prospective sublessee to the Director U.S Marine Corps Public Affairs Office.' No sublease shall be granted for filming or film production related to that script without the approval.of the'Director. Approval may be subject to specific conditions. The Scope of the Director's review and approval shall be.limited to the manner'in which the military is portrayed. 6/11/97 - HANGER2.wpd 6.2 Building 29 is listed in the National Register of Historic Places. In view of the historic significance of this building,.Lessee shall not make any additions, alterations, repairs, or demolition without the prior written approval of the Government. In order for the Government to grant such approval, it may be required to consult with the California State Historic Preservation Officer and, in some cases, with the Advisory Council on Historic Preservation in accordance with 36 CFR Part 800. To facilitate the approval process, Lessee shall prepare all documentation the Government may~request to enable it to comply with section 106 of the'National Historic Preservation Act. Lessee may request from the Government a rental offset for costs associated with the preparation of the required documentation pursuant to paragraph 3.2.4. Restriction on Subleases, Transfers and Assignments. 7.1 It is the intent of the Lessee to sublet the Premises. Lessee shall'neither transfer nor assign this lease or any interest therein or any property on the Premises, nor sublet the Premises or any part thereof or any property thereon, nor grant any interest, privilege or license whatsoever in connection with this lease without the prior written consent of Government. Such consent shall not be unreasonably withheld or delayed. Government will make every ~easonable effort to make a decision within ten (10) working days of the date that it receives Lessee's request to sublet, together with the prospective sublessee's completed application. 7.2 Every sublease shall contain a copy of this lease as an attachment' and shall, by the specific terms of the sublease, be subject to all of the terms and conditions of this lease, and shall terminate immediately upon expiration or any earlier termination of this lease, without any liability on the part of Government to Lessee or any sublessee. No sublease shall relieve Lessee of any of its obligations hereunder. 7.3 For any sublease, Lessee shall furnish Government a copy of any sublease executed by Lessee. Should a conflict arise between the proVisfons of this lease and a provision of a sublease, the provisions of this lease shall take precedence. 6/11/97 - HANGER2.wpd 7.4 Whenever a provision of this lease imposes a requirement.or limitation on Lessee in its use of the Premises, the provision shall be understood to impose the identical requirement or limitation on the sublessee. 8. Maintenance. Lessee[ at no expense to Government, shall keep the Premises in a safe, clean, and serviCeable condition. This requirement shall not require Lessee to make any improvements or betterments to the Premises, but shall include cleaning and stocking of toilets, broom sweeping of the Premises, proper storage of paints, chemicals and hazardous materials and the immediate correction of a hazardous condition caused by Lessee or a sublessee. 9. Environmental Disclosure. .Government has prepared an Environmental Baseline Survey (EBS),-ahd'a Base Realignment and Closure Cleanup Plan (BCP) fOr MCAS Tustin. Both of these documents touch upon the environmental condition of the Premises. These documents were prepared in consultation with the Environmental Protection Agency (EPA), California EPA Department of Toxic Substance Control (DTSC) and Regional Water Quality Control Board (RWQCB). Government has provided Lessee with copies of the EBS and BCP. Government has also provided Lessee with a copy of the FOSL prepared for this lease, together with copies of the documents referred to therein. Lessee acknowledges receipt of the EBS, BCP and FOSL and warrants that it has adequate information to make an independent, informed decision to lease. The FOSL is attached hereto as Exhibit C, and made a part hereof. 10. Environmental Protection. 10.1 Lessee and any Sublessee shall comply with applicable environmental, occupational safety and health'laws and regulations,'and all other federal, state and local laws, regulations and standards that are or may become applicable to Lessee's or a Sublessee's activities on the leased premises. 10.2 Lessee and any. Sublessee shall be solely responsible for obtaining at its cost and expense any environmental permits required for its operations under the lease, independent of any existing permits. In the event that Lessee or any Sublessee is required to prepare a manifest for hazardous wastes in connection with this lease, Lessee or Sublessee shall obtain its 6/11/97 - PIANGER2.wpd own EPA identification number which shall identify it as the generator and shall be used in the preparation of hazardous waste manifests for the removal and transportation of wastes from the premises. Lessee'or 'Sublessee will provide characterization, transportation, and disposal services for all wastes generated in connection with any use or occupation of the Premises. Under no circumstances will a permit obtained by the Lessee name the Government as a permittee or co-permittee. 10.3 Lessee shall indemnify and hold harmless the United States.of America from any costs, expenses, liabilities, fines or penalties resulting from discharges, emissions, spills, storage, disposal, or any other action by Lessee, its Sublessees, or its contractors, giving rise to Government liability, civil or criminal, or responsibility under federal, state, or local environmental laws.~ This provision-shall.survive the expiration or termination of this lease, and Lessee's obligations hereunder shall apply whenever Government incurs costs or liabilities for Lessee's actions. The continued migration of existing environmental contamination shall not be construed as a discharge, spill, release, emission, storage, or disposal by Lessee or Sublessee. 10.4 Government's rights under this'lease specifically include the right for Government officials to inspect upon reasonable notice the leased premises for compliance with environmental, safety, and occupational health laws and regulations, whether or not Government is responsible for enforcing them. Such inspections are without prejudice to the right of duly 'constituted enforcement officials to make such inspections. Government normally will give Lessee or sublessee forty-eight (48) hours~prior notice of its intention to enter the leased premises unless it determines the entry is required for safety, environmental, operations, or security purposes. Government officials shall comply with health and safety plans in effect. Lessee shall have no claim on account of any entries against the United States or any officer, agent, employee or contractor thereof. 10.5 Government, EPA, DTSC, RWQCB, and such other · authorities which may have jurisdiction over the matter, and their officers, agents, employees, contractors and subcontractors shall have the right, upon reasonable notice to Lessee and any sBblessee, to 6/11/97 - HANGER2.wpd enter upon the leased premises for the purposes enumerated below: 10.5.1 To conduct investigations and surveys, including, where, necessary, drilling, soil and water sampIing, test pitting, borings related to the MCAS Tustin Installation Restoration Program (IRP) or the RCRA Corrective Action Program; 10.5.2 To inspect field activities Of Lessee or its contractors and subcontractors in implementing these programs; 10.5.3 To conduct any test or survey related to the implementation of these programs or environmental conditions at the leased premises or to'verify any data submitted to the EPA or to DTSC relating to such conditions; 10.5.4 To construct, operate, maintain or undertake any other response or remedial action as required or necessary under the MCAS Tustin IRP or the RCRA'Corrective Action Program, including, but not limited to monitoring wells, pumping wells and treatment facilities. 10.6 Lessee agrees to comPly with the provisions of any health or safety plan in effect under the IRP or the RCRA Corrective Action Program during the course of any of the above described response or remedial actions. Any inspection, survey, investigation or other response or remedial action will, to the extent practicable, be coordinated with representatives designated by Lessee or any Sublessee. Lessee and Sublessees shall have no claim on account of such entries against the United States or any officer, agent, employee, contractor or subcontractor thereof. 10.7 Lessee further agrees that in the event of any assignment or Sublease of the leased premises, Lessee shall provide to the EPA and DTSC by certified mail at the addresses shown below a copy of the agreement or sublease (as'the case may be) within fourteen (14) days after the effective date of such transaction. Lessee may delete the financial terms and any other proprietary information from the copy of any agreement of assignment or Sublease furnished pursuant to this subparagraph. 6/11/97 - HANGER2.wpd 10 EPA Nicole Monteaux U.S. Environmental Protection Agency 75 Hawthorne St. (H-9-2) San Francisco, CA 94i05 DTSC ROn Okuda California Environmental' Protection Agency Department of Toxic Substances control 245 W. Broadway, Suite 350 Long Beach CA. 90802-4444 10.8 Lessee and its-Sublessee's shall comply with the hazardous waste permit requirements under the Resource Conservation and Recovery Act or the State of California equivalent, including but not limited to the California Health and Safety Code and associated California Code of Regulations (CCR) provisions relating to the generation, treatment, storage and. disposal of hazardous waste. Except as specifically authorized by Government in writing, Lessee and each Sublessee must provide at its own expense such hazardous waste management facilities, complying with all laws and regulations, including but not limited t© the requirements of 22 CCR §§ 66262.10-66262.70. Government hazardous waste management facilities will not be available to Lessee or Sublessees. Any violation of the requirements of this conditions shall be deemed a material breach of this lease. 10.9 Government accumulation points for hazardous and other wastes will not be used by Lessee or its Sublessee. Neither will Lessee or its Sublessee permit its hazardous wastes to be commingled with hazardous waste of the Marine Corps. 10.10 Lessee or each of its Sublessee's shall submit a Government approved plan for responding to hazardous waste, fuel, and other chemical spills prior to commencement of occupancy of the leased premises. Such plan shall be consistent with the provisions of 22 CCR §§ 66265.52 and 66265.56, shall be independent of any plan maintained by MCAS-Tustin and shall not rely on use of installation personnel or equipment. Should Government provide any personnel~or equipment, whether for initial fire response and/or spill containment, or otherwise on request of Lessee, or because Lessee is not, in the'opinion of GoVernment, conducting timely cleanup actions, Lessee agrees to reimburse Government for its cost. 6/1'1/97 - HANGER2.wpd 11 10.11 Lessee and its Sublessee's shall be responsible for the release or threat of release of any hazardous substance, pollutant or contaminant caused by Lessee's or Sublessee's activities at the Premises. Any reporting, containment, removal, or other remedial action relating to such release or such threat of release, as required by law, shall be Lessee's 10.12 Lessee shall not construct or permit its Sublessee or assigns to construct or'make any substantial alterations, additions, or improvements to or installations upon or otherwise modify or alter the leased premises in any way which may adversely affect the cleanup, human health or environment without the prior consent of Government. Such consent may include a requirement to.provide Government with a performance and payment bond satisfactory to it in all respects and other requirements deemed necessary to protect the interests of Government. For. construction or alterations, additions, modifications, improvements or. installations (collectively "work") in the proximity of Installation Restoration Program Sites or RCRA Corrective Action'Areas such consent may include a requirement for written approval by BRAC Environmental' Coordinator. 10.13 Lessee shall not conduct or permit its Sublessee's to conduct any subsurface excavation, digging, drilling, or other disturbance of the surface without the prior written approval of Government. All uses of groundwater are prohibited. 10.14 Lessee and its Sublessees shall notify its employees of the condition and restrictions in the use of the Premises. In addition, Lessee shall provide its employees with a health and safety briefing relating to the Installation Restoration Program Sites and identified ~Areas of Concern." 10.15' Based on the age of Building 29, Lessee understands and agrees that lead based paint and asbestos containing material (ACM) are assumed to be present in and about the Premises. 10.16 Based on the age of Building 29, Lessee understands and agrees that asbestos and Asbestos Containing Materials (ACM') are present in and about such facilities. Lessee shall properly maintain the condition of the existing asbestos and ACM. If the asbestos or ACM become a threat to human health or the environment at any time, and Lessee or its Sublessee's 6/11/97 - HANGER2.wpd 12 have not caused the threat, Government Shall abate or remediate the asbestos or ACM in accordance with all applicable laws and regulations. 11. Indemnity. 11.1 Lessee shall relieve, indemnify, protect, defend and save harmless the United States of America, and all of its officers, agents and employees from any and all claims and demands, actions, proceedings, losses, liens, costs and judgments of any kind and nature whatsoever, including expenses incurred ~n defending against legal actions, for death or injury to persons or damage to property and for civil fines and penalties that may arise from or be caused directly or indirectly by: 11.1.1 Any~dangerous, hazardOus, unsafe or defective condition, in or on the Leased Premises, of any nature whatsoever, which may exist by reason of any act, omission, neglect, or any use or occupation of the premises by Lessee, its officers, agents, employees, sublessees, licensees or invitees from commencement of the term of the Lease; 11.1.2 Any operation conducted upon or any use or occupation of the Leased Premises by Lessee, its officers, agents, employees, sublessees, licensees or invitees under or pursuant to the provisions of this lease or otherwise; 11.1.3 Any act, omission, or negligence of Lessee, its officers, agents, employees, sublessees, licensees or invitees. 11.1.4 Any failure of Lessee, its officers, agents, employees or sublessees to comply with the terms or conditions of this lease or any applicable federal, state, regional or municipal law, ordinance, rule or regulation related to the use or occupancy of the Leased Premises. 11.2 Government will notify the Lessee within 30 days of any claim filed against it that is covered by this indemnity. 11.3 Lessee also agrees to indemnify Government and pay for all damages or loss suffered by Government including, but not limited to, damage or loss of 6/11/97 - HANGER2.wpd 13 Government property and injury to Government employees arising out of the conditions, operations, uses, occupations, acts, omissions or negligence referred to in subparagraphs 11.1.1 through 11.1.4. 11.4 Nothing in this paragraph 11 is intended as a waiver of Lessee's indemnity and contribution rights under Federal law, including Public law 102-484, the National Defense Authorization Act for Fiscal Year 1993, Section 330, as amended. 11.5 The provisions of this paragraph 11 shall not require indemnification to the extent that losses or costs are attributable to any act, omission or negligence of the Government, it officers, agents or employees, or its contractorS. The covenants contained in this paragraph 11 shall survive the termination of the lease. 12. Risk of Loss-Insurance. 12.1 Lessee shall bear all risk of loss or damage to the Premises (including related personal property) arising from the occupation or use of the Premises by Lessee or any sublessee, except to the extent that such ,' loss or damage is attributable to any act, omission or negligence of Government its officers, agents or employees or its contractors. 12.2 Based on Lessee'.s written representations regarding its financial capacity to be self-insured and its request for a waiver, Government hereby waives its normal lease requirement for insurance insofar as Lessee is concerned, but not with respect to any sublessee. Although this requirement has been waived, the parties recognize that Lessee presently carries excess public liability coverage for claims of~$250,000 or more. For so long as this and successor coverages may be in effect during the term of this lease, Lessee shall furnish a certificate of insurance with respect to this coverage containing an endorsement reading substantially as follows: 12.2.1 .The insurer waives any right Of subrogation against the United States of America which might arise by reason of any payment made under this policy. 6/11/97 - HANGER2.wpd 14 12.2.2 This insurance, certificate is issued in conjunction with the use of property described in the lease between the United States of America and the City of Tustin. 12.2.3 The United States of America is added as an additional insured as to operations of the policyholder at or from the property leased from the United States. 12.2.4 Government shall be given thirty (30) days written notice prior to making any material change in or cancellation of the policy. 12.3 Lessee shall require any Sublessee to procure and maintain, at its own expense, the following: 12.3.1 Broad form comprehensive' public liability and property damage insurance (including comprehensive general liability, workers. compensation to the extent required by California law and automobile liability) for casualties occurring in or about the Premises, written by an insurance' company authorized to do business in the State of California with sublessee's normal limits of liability, but not less than ten million dollars ($10,000,000) combined single limit for injury or death or property damage arising out of each accident or occurrence. Said limits shall be without deduction, provided that Government, with written agreement by Lessee may permit, a deductible amount in those cases where, in its judgment, such a deduction is justified. The Sublessee shall be required to furnish Government and Lessee with a certificate of insurance with respect to this coverage containing an ~ndorsement in substantially the same form as required by subparagraph 12.2. 12.3.2 Broad form fire insurance coverage by an insurance company authorized to do business in the State of California against loss or damage by fire and lightning and ~against loss or damage by other risks embraced by coverage of the type now known as the broad form or extended coverage~ including but'not limited to riot and civil commotion, vandalism and malicious mischief; explosion of boilers, generators, transformers and heating apparatus and air conditioning systems, and against such risks or hazards as may customarily be insured against in industrial developments, 6/11/97 - KANGER2.wpd 15 covering ninety percent (90%) of the replacement value of the works, structures, improvements and related personal property on the Premises, with such provision in the policies issued to cover the same, or in riders attached thereto, as will' provide for all losses over $50,000 to be payable to Government, to be placed in an escrow account and held in trust for reconstruction. Such policy shall provide that sublessee's insurance carrier waive any right of subrogation against Government or Lessee if it is ~ontended that Government or Lessee caused or contributed to any loss. In the event of any loss under such policy, the Sublessee shall undertake replacement or reconditioning of the works, structures, improvements and related personal property within ninety.(90) days following any such loss. In the event that the Sublessee shall undertake such replacement or reconditionihg within such period, such proceeds shall be released by Government to Sublessee as payment is required for said purpose. Upon completion of such replacement or .reconditioning to the satisfaction of Government, any balance thereof remaining shall be paid to Sublessee' forthwith. In the event Sublessee fails to undertake such replacement or reconditioning· within said period of ninety (90) days, such proceeds shall be retained by Government. 13. Representations. 13.1 Lessee has examined, knows and accepts the condition and state of repair of the leased premises and the installation of which it forms a part, and acknowledges that Government has made no representations concerning such condition and state of repair, nor any agreement or promise to alter, improve, adapt, repair or keep in repair the same, or any item thereof, which has not been fully set forth in this lease which contains all the agreements made and' entered into between Lessee and Government.. 13.2 Quiet Enjoyment. Government covenants and agrees that Lessee, upon paying the rent and all other charges hereunder provided for and observing and keeping all covenants, agreements, and conditions of this lease on its part to be observed and kept, shall quietly have and enjoy the Leased Premises during the term of this lease without hindrance or molestation by anyone claiming by or through Government, subject, however, to 6/11/97 - HANGER2.wpd 16 the exceptions, reservations and conditions of this lease. 14. Default. 14.1 Default. If either party fails to observe or perform any term, covenant or condition of this lease at any time during the term of this lease and the other party concludes that there has not been good faith compliance with the provisions of this lease, either party may issue a written "Notice of Default" by certified mail, return receipt requested, specifying the grounds thereof and all facts demonstrating such non-compliance. The alleged defaulting party shall have thirty (30) days after receipt of such notice to respond in writing by either specifying how its non- compliance has been cured or the grounds upon which it believes that it is COmplying with'this lease. The time to respond to the Notice of Default may be' extended by mutual'agreement of the Parties. If the response to the Notice of Default has not been received within the prescribed thirty (30) days, or within such the period of time as mutually agreed, the Notice of Default shall be conclusively presumed to be valid and the party gi~ing the Notice of Default may terminate the lease pursuant t6 either Paragraph 15.1 or 15.2 herein. If the alleged Defaulting Party responds within the 30 day time period provided above, the Parties shall meet in good faith at reasonable times and from time to time for a period of at least thirty (30) days to arrive at a mutually acceptable resolution of the matter(s) asserted in the Notice of Default and disputed in the response. If after thirty (30) days, or any other extension of time as mutually agreed to by.the Parties, the parties have failed to arrive at a mutually acceptable resolution of such matter(s), either Party may terminate the lease pursuant to either Paragraph 15.1 and 15.2 herein. 15. Termination~ 15.1 Termination by Goverrnnent. 15.1.1 National Emergency. Government shall have the right to terminate this lease in whole or in part, without liability, upon 30 calendar days notice in the event of national emergency as~ 6/11/97 - HANGER2.wpd 17 declared by the President or the Congress of the United States unless special circumstances justify a shorter period. Lessee will be provided a reasonable period of time to vacate the leased premises. 15.1.2 After Event of Default. Where a Notice of Default to Lessee has not been cured following the procedure in Paragraph 14, Government shall be entitled to recover and Lessee shall pay to Government: 15.1.2.1 The costs incUrred'in resuming possession of the leased property. 15.1.~2.2 The costs incurred in performing any obligation on the part of Lessee to be performed hereunder. _ 15.1.2.3 An amount equal to the aggregate of all rents and charges assumed hereunder and not theretofore paid or satisfied, due. and payable through the termination date less any Rental Off-sets. 15.2 Termination by Lessee. Lessee shall have the right to terminate this lease as follows: 15.2.1 A Notice~of Default to Government has not been cured following the procedure in Paragraph 14; 15.2.2 The Government fails to provide utility or services to the Premises, as required by Paragraph 23 for a period of five (5) consecutive days. 15.2.3 In the event that entry by the Government on leased. Premises is necessary for the purposes of remedial or corrective action, and such activity substantially interferes with the use or sublease of the Premises for a period of more than five (5) consecutive calendar days. 15.2.4 Upon thirty days written notice t° Government in the event'of damage to or destruction of all of the improvements on the' leased property or such a substantial portion thereof as to render the leased property incapable of use for the purposes for which it is leased hereunder, provided: 6/tl/97 - HANGER2.wpd 15.2.4..1 Government either has not authorized or directed the repair, rebuilding or replacement of the improvements or has made no provision for payment for such repair, rebuilding or replacement bY application of insurance proceeds or otherwise and; 15.2.4.2 Such damage or destruction was not occasioned by the fault or negligence of Lessee or any of its officers, agents, employees, sublessees, licensees or invitees, orby any failure or refusal on the part of Lessee to fully perform its obligations under this lease. 16'. surrender.- Upon the expiration of~this lease.or its prior termination, Lessee shall quietly'and peacefully remove itself and its. property from the leased premises and surrender the possession thereof to Government; provided, in the event Government shall terminate this lease upon less than thirty (30) days notice, Lessee shall be allowed a reasonable period of time, as determined by Government, but in no event to exceed thirty (30) days from receipt of notice of termination, in which to remove all of its property from and terminate its operations on the leased premises. During such period prior to surrender, all obligations assumed by Lessee under this lease shall remain in full force and effect. 17. Restoration. Before the expiration or prior termination of this lease, Lessee shall have .the option to either restore the Premises, together with related personal property, and each item thereof to the condition in which it was first received and used by Lessee, or to such improved condition.as may have resulted from any improvement made therein by Government or by Lessee, subject however to ordinary wear and tear and loss or damage for which Lessee is not liable'hereunder; provided, in the event that Government shall terminate this lease upon less than thirty (30) days notice Lessee shall have thirty (30) days from receipt of notice of termination to accomplish such restoration. The provisions of paragraph'6.2 shall apply to restoration of Building 29. 6/11/97 - ~L%NGER2.wpd 19 18. Installation of Machinery and Removable Fixtures. 18.1 During the term of this lease, or any extension thereof, Lessee shall have the right, at its own expense, to install its own machinery and to attach such removable fixtures in or upon the Premises as may be necessary for its use of the Premises pursuant to this lease, and to remove the same at any time prior to or after the expiration or termination of this lease or any extension thereof; provided that in the event of termination by the Government, Lessee may remove such items within thirty (30) days after the date of termination. All property not so removed shall be deemed abandoned by Lessee and may be used or disposed of by the Government in any manner whatsoever without any' liability to account to'Lessee therefor. 18.2 It is expressly agreed and understood that Lessee will make no alterations, additions, or betterments to or structural changes to the Premises without the prior written consent of Government. The provisions of paragraph 6.2 shall apply to any. installation, attachment or removal with respect to Building 29 proposed to be made under this paragraph 18. 19. Disputes. This lease is subject to the Contract Disputes Act of 1978 (41 U.S.C. §§ 601-613) ("the Act"). Except as provided'in the Act, all disputes arising under or relating to this lease shall be resolved under this paragraph. 19.1 "Claim" as used in this paragraph means a written demand or written assertion by Lessee or Government seeking, as a matter of right, the payment of money'in a sum certain, the adjustment or interpretation of lease terms, or other relief arising under or relating to this lease.~ A claim arising under this lease, unlike a claim relating to this lease, is a claim that can be resolved under a provision of this lease that provides for the relief sought by claimant. However, a written demand.or written assertion by'Lessee seeking the payment of money exceeding $100,000~ is not a claim under the Act until certified as required by subparagraph 19.2.4 below. .A voucher,.invoice, or other routine request for rental payment that is not in dispute when submitted is not a claim under the Act. The request may be converted to a claim under the Act by complying with the submission and certification requirements of this paragraph, if it is disputed 6/11/97 - HANGER2.wpd 20 either as to liability or amount or is not aCted upon in a reasonable time. 19.2 A claim by Lessee shall be made in writing and submitted within six (6) years after accrual of the claim to SouthWest Division, Naval Facilities Engineering Command (Command) for a written decision. A claim by Government against Lessee shall be subject to a written decision by the Command. 19.2.1 Lessee shall provide the certification specified in 19.23 when submitting any claim: 19.2.1.1 Exceeding $100,000; or 19.2.1.2 Regardless of the amount claimed, when using: 19.2.1.2.1 ~Arbitration conducted · pursuant to. 5 U.S.C. §§ 575-580; or 19.2.1.2.2 Any other alternative means of dispute resolution (ADR) technique that the agency elects to use in accordance with the Administrative Dispute Resolution Act (ADRA). 19.2.2 The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. 19.2.3 The certification shall state as follows: "I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the adjustment under the lease 'for which Lessee believes Government is liable; and that I am authorized to certify the claim on behalf of Lessee." 19.2.4 The certification may be ~executed by any person duly authorized to bind the Lessee with respect to the claim. 19.3 For claims of Lessee of $100,000 or less, the Command must, if requested in writing by Lessee, render a decision within 60 days of the request. For Lessee- certified claims over $100,000, the Command must, within 60 days, decide the claim or notify Lessee of the date by which the decision will be made. 6/11/97 - HANGER2.wpd 21 19.4 The Command's decision shall be final unless Lessee appeals or files a suit as provided by the Act. 19.5 At the time a claim by LesSee is submitted to the Command or a claim by Government is presented to· Lessee, the parties, by mutual consent, may agree to use ADR. When using arbitration conducted pursuant to 5 U'S.C. §§ 575-580, or when using any other ADR technique that the agency elects to use in accordance with the ADRA, any claim, regardless of amount, shall be accompanied by the certification described in subparagraph 18.2.4', and executed in accordance with subparagraph 18.2.5. 19.6 Government shall pay interest on the amount found due and unpaid from (a) the date the Command r&ceives the claim (properly certified if required); or (b) the date payment otherwise would be due, if that date is later, until the~date of payment. With-regard to claims having defective certifications, as defined in FAR 33.201, interest shall be paid from the date that the Command initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the TreasUry, as provided in the Act, which is applicable to the period during which the Command receives the claim and then at the rate applicable for each 6-mOnth period as fixed by the Treasury Secretary during the pendency of the claim. 19.7 Lessee shall prOceed diligently with the performance of this lease pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the lease, 'and comply with any decision of the Command. 20. Covenant Against Contingent Fees. The Lessee warrants~ that no person or agency has been employed or retained to solicit or secure this lease upon an agreement or understanding for a commission, percentage, brokerag'e, or contingent'fee, excepting bona fide employees or bona fide established'commercial agencies maintained by the Lessee for the purpose of securing business. For breach or violation of this warranty, the Government shall have the right to annul this lease without liability or in its discretion to require the Lessee to pay,. in addition to the consideration, the full amount of such commission, percentage, brokerage, or contingent fee. 6/11/97 - HANGER2.wpd 22 21. Officials Not To Benefit. No member of or delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this lease or to any benefit to arise therefrom, but this provision shall not be construed to ' extend to this lease if made with a corporation for its general benefit. 22. Failure of Parties to Insist on· Compliance. The failure of either of the Parties to insist, in any one or more instances, upon performance of any of the terms, covenants or conditions of this lease shall not be construed as a waiver or relinquishment of either Party's right to the future performance of any such terms, covenants or conditions and their respective obligations in respect to such future performance shall continue in full force and effect. 23. Utilities and services. Utilities and services shall be provided to the Premises as may be required in connection with the lease under the same conditions and circumstances and level of service as they are provided to other portions of MCAS Tustin in the vicinity of the Premises. Lessee shall pay Government the charges therefor in addition to the rent required under this lease, except to the extent the charges are an eligible Rental Offset in accordance with paragraph 3 of this Lease. Such charges and the method of payment thereof shall be in accordance with the general practice of Government regarding the supply of utilities and service to non-federal tenants of MCAS-Tustin. Payment of utility charges for electricity, natural gas, water, wastewater treatment/sewer, and Government provided services shall initially be in the amounts or at the rates shown in Exhibit D. Utility and service charges will be billed and paid on a quarterly basis except when the Premises are not used or subleased, Lessee shall not pay any charges. Lessee recognizes that the Premises are not presently metered and that initial utility charges will be based on Government's engineering estimate until Lessee installs metering equipment when required by the Government. It is expressly' understood and agreed that Government in no way warrants the condition or adequacy of any utilities or services.furnished 'to Lessee. 24. Liens. Lessee shall promptly .discharge or cause to be discharged any valid lien, right in rem, claim, or demand of any kind, except one in favor of the United States, which at any time may arise or exist with respect to the property or Lessee's improvements or materials or equipment furnished, . . 6/11/97 - HANGER2.wpd 23 or any part thereof, and if the same shall not be promptly discharged by Lessee, Government may discharge, or cause to be discharged, the same at the expense of Lessee. 25. Access. 25.1 The Government shall have access to'the Premises at all reasonable times'for, any purpose not inconsistent with the quiet use and enjoyment thereof by Lessee. The.Government normally will give the Lessee or Sublessee no later than forty-eight (48) hours Prior notice of its intention to enter the Premises unless it determines the entry is required for safety, environmental, operations Or security purposes. 25.2 Lessee and Sublessees shall have the right of ingress and egress to the Premises across adjacent or nearby roads of Governmen~'"'which-lead to"a' reasonably convenient public road. Such access shall require a pass issued by the MCAS Tustin Provost Marshal. In connection with any sublease, Lessee or Sublessee, as applicable, shall develop a fire safety and security plan satisfactory to and in coordination with the MCAS Tustln Fire Department and the MCAS Tustin Provost Marshal. As a'condition of access, Lessee and any Sublessee shall adhere to all Government rules and regulations concerning security, ingress, egress,. safety and sanitation as may be prescribed by Government. 26. Taxes. Lessee or Sublessee, as applicable, shall pay to the proper authority, when and as the same become due and payable, all taxes, assessments and similar charges which, at any time during the term of this lease may be imposed upon Lessee with respect to the leased premises. Title 10 United States Code § 2667(e) contains the consent of Congress to the taxation of Lessee's interest in the leased premises, whether or not the leased premises are in an area of exclusive federal jurisdiction. 27. Agreement. This lease shall not be modified unless in writing and signed by both parties. No oral statements or representation made by, or for, on behalf of either party shall be a part 'of this lease. Lessee understands and acknowledges that this lease does not constitute a commitment by the Government regarding the ultimate'disposal of the Premises to the Lessee or any sublessee. 6/11/97 - HANGER2.wpd 24- 28. Labor Provision. 28.1 Equal Opportunity. During the term of this lease Lessee agrees as follows: 28.1.1 Lessee will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. Lessee shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to, the following: Employment, upgrading, demotion or transfer., recruitment or recruitment advertising, layoff or termination, rate of pay or other forms of compensation, and selection for .training, including apprenticeship. Lessee agrees to post in conspicuous places,-available to employees and applicants for employment, notices to be provided by Government setting forth the provisions of this nondiscrimination clause. 28.1.2 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 or national origin. 28.1.3 Lessee will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by Government, advising the labor union or workers' .representative of Lessee's commitments under this Equal Opportunity clause and shall post copies of the notice in conspicuous places available to · employees and applicants for employment. 28' 1.4 Lessee shall comply with all provisions of Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of October 13, 1967, and of the rules, regulations and relevant orders of the Secretary of Labor. 28.1.5 Lessee shall furnish all information and reports required by Executive Order 11246 of September 24,. 1965, as amended by Executive .Order 11375 of October. 13, 1967, and by the rules, regulations and orders of the Secretary of Labor 6/11/97 - HANGER2.wpd 25 pursuant thereto, and will permit access to its books, records and accounts by Government and the Secretary of Labor for purposes of investigating to ascertain compl'iance with such rules, regulations and orders. 28.1.6 In the event of Lessee's noncompliance with the Equal Opportunity clause of this lease or with any of said rules, regulations or orders, this lease'may be canceled, terminated or suspended in Whole or in part and Lessee may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of October 13, 1967, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, as amended by Executive Order 11375 of October 13, 1967, or by rule, regulation or order of the Secretary of Labor, or as otherwise provided~by law. 28.1.7 Lessee will include the provisions of subparagraphs 28.1.1 through 28.1.7 in every sublease or purchase order unless exempted by rules, regulations or orders of the Secretary of Labor issued pursuant to section 204 of Executive 'Order 11246 of September .24, 1965, as amended by Executive Order 11375 of October 13, 1967, so that such provisions will be binding upon each sublesSee or vendor. Lessee will take such action with respect to any sublessee or vendor as Government may direct as a means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event Lessee becomes involved in, or is threatened with, litigation with the sublessee or vendor as a result of such direction by Government, Lessee may request the United States to enter into such litigation to protect the interests of the United Statesl 28.2 Convict Labor. In connection with the performance of work required by this lease, Lessee agrees not to employ any person undergoing a sentence of imprisonment at hard labor. 28.3 Contract Work Hours and safety Standards Act (40 U.S.C. §§ 327-330.). This lease, 'to the extent that it is a contract of a character specified in the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327- 6/11/97 - HANGER2.wpd 26 330) and is not covered by the Walsh-Healy Public Contracts Act (41 U.S.C. §§ 35-45), is subject to the following provisions and exceptions of said Contract Work Hours and Safety Standards Act and to all other provisions and exceptions of said law: 28.3.1 Lessee shall not require or permit any laborer or mechanic in any workweek in which he is employed on any work'subj~ct to the Contract Work Hours and Safety Standards Act (WHSSA) under this lease to work in excess of 40 hours in such workweek on work subject to the provisions of the Contract Work Hours and Safety Standards Act unless such laborer or mechanic receives compensation at a rate not less than one and one- half times his basic rate of pay for all such hours worked in excess of 40 hours in such workweek. The "basic rate of pay," as used in this clause, shall'be-the amount paid per hour, exclusive of Lessee's contribution or cost for fringe benefits and any cash payment- made in lieu of providing fringe benefits, or the basic hourly rate contained in the wage determination, whichever is greater. 28.3.2 In the event of any violation of the provision of subparagraph 28.2.1, Lessee shall be liable to any affected employee for any amounts due, and to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic'employed in violation of the provisions of subparagraph 28.2.1 in the sum of $10 for each calendar day on which'such employee was required or permitted-to be employed on such work in excess.of the'standard workweek of 40 hours withOut payment of the overtime wages required by subparagraph'28.2.1. 29. Payments. Ail payments to the Government required. under this lease shall be made by check or postal money order made payable to The Treasurer of the United State's and delivered to Commanding Officer, Southwest Division, Naval Facilities Engineering Command, Attention Code 5640, 1420 Kettner Boulevard, Suite 507, San Diego, CA 92101-2404, or such other addressees as Government requires. Government may require that payments for utilities and rent be made by separate checks or postal money order. 6/11/97 - HANGER2.wpd 27 30. Interest. Notwithstanding any other provision of this lease, unless paid within thirty (30) days, all amounts ~hat become payable by Lessee to Government under this lease shall bear interest from the date due. The rate of interest to be charged shall be equal to the average investment rate for Treasury'tax and loan accounts for the 12-month period ending on September 30 of each year, rounded and adjusted in accordance with 31 U.S.C. § 3717. Amounts shall be due upon the earliest of: 30.1 The date fixed pursuant to this lease; 30.2 The date of the first written demand for payment, consistent with this lease, including demand consequent upon default or termination; or 30.3 The date of transmittal by Government to Lessee of a'proposed supplemental agreement to confirm completed negotiations fixing the amount. The interest charge made under this clause may be reduced under the procedures prescribed in section 32.614 of the Federal Acquisition Regulations in effect on the date of this lease. 31. Administration and Notice.. 31.1 The Real Estate ContraCting Officer, or his or her representative, under the direction of the Commanding Officer, Southwest Division, Naval Facilities Engineering Command, shall have complete charge of the administration of'this lease, and shall exercise full supervision and general direction thereof insofar as the interests of the Government are involved. ~' 31.2 No notice, order, direction, determination, requirement, consent or approval under this lease shall be of any effect unless in writing. All correspondence, notices and claims concerning this lease shall be directed to the addresses set out below or to such addresses as may from time to time be agreed upon by the parties: 6/11/97 - HANGER2.wpd 28 If to the Government: Real Estate Contracting Officer Base Realignment and. Closure Program Office Southwest Division, Naval Facilities Engineering Command 1420 Kettner Blvd., Suite 507 San Diego, CA 92101-2404 with a copy to: Assistant Chief of Staff, Base Realignment and Closure MCAS E1 Toro (AS) Santa Ana, CA 92709-5000 and with a second copy to: Commanding Officer MCAS Tustin P.O. Box 105001 Santa Aha, CA 92710-5001 If to the Lessee: Assistant City Manager City of Tustin 300 Centennial W~y Tustin, CA 92781-1089 32. Applicable Rules and Regulations. The Lessee is required to comply with all federal, state and local laws regulations and standards that are applicable when the lease is executed or may become applicable to the Lessee's activities on the-Premises later. These include laws and regulations on the environment, construction facilities, health, safety, food service, water supply, sanitation, use of pesticides, and licenses or permits to do business.. The Lessee is responsible for obtaining and paying for permits required for its operations under the lease. 33. Miscellaneous Provisions. 33.1. Rules of construction. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "should" and "may" are permissive. 6/11/97 - ~L~NGER2.wpd 29 33.2 Entire Agreement, Waivers and Amendments. This lease constitutes the entire understanding and agreement of the parties with respect to the matters set forth in this lease. This lease supersedes all negotiation or previous agreements between the parties respecting this lease. All waivers of the provisions of this lease must be in writing and'signed by the appropriate authorities of the Lessee and the Government. 3'3.3 Incorporation of Recitals. The Recitals set forth in this lease are part of this lease. 33.4 Captions. The captions of this lease are for convenience and reference only and shall not define, explain, modify, construe, limit', amplify or aid in the interpretation, construction or meaning_of any of the. pr6visions of this lease.' .... 33.5 Consent. Where the consent or approval of a party is required or necessary under this lease, the consent or approval shall not be unreasonably withheld. 33.6 Covenant of cooperation. The parties shall cooperate with, deal With each other in good faith, and assist each other in the'performance of the provisions of this lease., In the event of any legal action instituted by a third party or other governmental entity or official challenging the'validity of any provision of this lease, the parties hereby agree to cooperate in defending said action, to the extent authorized by law. 33.7 Force Majeure. If either party shall be delayed or prevented from the performance of any a~t required by this lease by reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, restrictive governmental laws or regulations or other cause, without fault and beyond the reasonable control of the party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay; and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay; provided, however, nothing in this Section shall excuse Lessee from the prompt payment of any charge required of Lessee. 6/11/97 . ~L%NGER2.wpd 30 33.8 Severability. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this lease shall be valid and be enforced to the fullest extent permitted by law. 6/11/97 - ~L~NGER2.wpd 31 IN WITNESS WHEREOF, the parties hereto have, on the respective dates set'forth below, duly executed this lease. THE UNITED STATES OF AMERICA CITY OF TUSTIN ("LESSEE") Real Estate Contracting Officer City Manager/or · Assistant City Manager Date: Date: Concur: Commanding Officer, MCAS Tustin Approved as to form Approved as to form Counsel Lois E. Jeffrey City Attorney ATTEST: Pamela Stoker Agency Clerk CAS: kd\mcas\agreemts\hanger2, wpd 6/11/97 - ~LANGER2.wpd 32 EXHIBIT A Real Property Description 6/11/97 - HANGER2.wpd' 33 EXHIBIT B Joint Inspection Report 6/11/97 - HANGER2.wpd 34 EXHIBIT C FOSL 6/lX/97 - I-IANGER2.wpd 35 EXHIBIT D UTILITIES SERVICES 6/11/97 --HANGER2.wpd 36 ATTACHMENT II Sublease between Walt Disney Pictures and the City of Tustin SUBLEASE AGREEMENT FOR BUILDING 29 MCAS-TUSTIN This Sublease is made and entered into on this day of__., 1997, bY and between the City of Tustin ("City"), a general law city and municipal corporation of the State of California acting as the Local Redevelopment Authority (LRA) under the Defense Base - Closure and Realignment Act of 1990 ("Landlord"), and Walt Disney Pictures, a division of Walt Disney Pictures' and Television ("Tenant"). RECITALS 1. · Landlord has entered into a.Lease with the United States of America for the premises covered by this Sublease (hereinafter "the Prime Lease"). .......... 2. ' ' Lahdl0id'and T6naht'a-g-~e6-that~this Subl6as-e'Agreefnent'is'subject-to the Prime E6ase,~ '- and that this Sublease Agreement, while intended to establish the terms and conditions of a Sublease between Landlord and Tenant, is also intended to insure that Tenant's use of the premises conforms to the Prime Lease.' AGREEMENT In consideration of the mutual 'covenants and conditions herein and intending to be legally bound~ the parties hereby agree as follows: 120 Demised Premises. 1.1 Landlord, under the terms and cOnditions of this Sublease' hereby agrees to sublease to Tenant and Tenant agrees to sublease from Landlord, the premises and property heretofore referred to as Building 29 at Marine Corps Air Station, Tustin, California consisting of certain real property and improvements more particularly described in Exhibit A attached hereto and incorporated herein (the "Subleased Premises"). 2.0 Term and Commencement. 2.1 1998. This Sublease shall commence on July 1, 1997 and terminate on February 28, 6/11197 - BLDG29.LSE 2.2 Tenant may apply for month-to-month extension of the term of this Sublease provided that the Sublease has not terminated. In any event, no later than sixty (60) days prior to the expiration date of the original term of this Sublease, Landlord must receive a written request thereof, signed by Tenant. Landlord has the full discretion to extend the term or not. 2.3 Possession of the Subleased Premises, including ail structures, buildings and/or improvements thereon, shall be surrendered by Tenant to Landlord immediately upon termination of this Sublease. 214 This Sublease may be terminated prior to the expiration of its term by mutual written agreement of the parties, if the Prime Lease is terminated, or as provided in Sections 20. I.1 or 21.1 or 22. 3.0 Base Rent. 3.1 Tenant shall pay to the Landlord Base Rent of $ , payable in advance of the first day of each month throughout the term of this Sublease without prior notice or dem__and~made payable.t9 the City_of Tustin and delivered to the City ~0f Tustin Finance Director at 300 Centennial Way, Tustin, CalifOrnia, 92780,-or at Such other place as '~ the Landlord may designate in writing from time to time. If the term commences, on a day other than the first day of the calendar month or ends on a day other than the last day of the calendar month, base rent for such partial month shall be prorated at the rate of one-thirtieth of the'monthly base rent for each day of the period. 4.0 Additional Rent. 4.1 .Taxes. 4.1.1 Tenant shall pay. all taxes (as defined herein) levied or imposed against the Subleased Premises during the term. Taxes shall mean all taxes, assessments and governmental charges, whether federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Rent, the Subleased Premises, Building 29,' any Tenant installed equipment on the Subleased Premises or their operation,, whether or'not directly paid by Landlord. Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the building or the Subleased Premises. There shall be added to·taxes the expenses of any contests (administrative or otherwiSe) of taxes incurred during the taxing year. Tenant shall pay to the appropriate governmental authority any use and occupancy tax. In the event, that Landlord is required by law to collect Such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority. : 6/11/97 - BLDG29.LSE 4.1.2 Tenant shall pay the taxes upon .Landlord's election, either (i) annually within thirty (30) days after the date the Landlord provides Tenant with a statement setting forth in reasonable detail such taxes, or (ii) monthly in advance based on estimates provided by Landlord based upon the previous year's tax bill. 4.1.3 Tenant's taxes paid by Landlord with respect to the Subleased Premises shall be prorated on a per diem basis for any partial tax year included in the term. Tenant's obligation to pay Tenant's taxes during the last lease year of the term shall survive the termination of this. Sublease. 4.2 Operating Expenses. 4.2.1 Tenant shall reimburse Landlord for Landlord's "Operating Expenses" for Subleased Premises. Operating Expenses shall mean all those costs and expenses of whatever kind or nature incurred or paid on behalf of Landlord in connection with the operation, maintenance, and management of the property leased by the Landlord from the United States of America pursuant to the Prime Lease; including, but not limited to, the following: (1) causeway operations, maintenance and repair; maintenance and repair of roads, streets, sidewalks, curbs and gutters; operation, maintenance and repair of street lighting, street signals and signage; operation maintenance and repair of storm sewer; pest control (including mosquito abatement), and general administration of these services; (2) Landlord's personnel costs for management operations, including 'salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs related thereto; (3) costs of service and maintenance contracts including, but not limited to security services; (4) any other costs and expenses incurred by Landlord in operating the Subleased Premises; and (5). the cost of any additional services, not provided to the Subleased Premises on the commencement date but thereafter provided by Landlord in the prudent management of the Subleased Premises. In addition to the costs and expenses allocated as described above, the Tenant will also be required to reimburse the City for any special costs incurred by. Landlord which are specifically attributable to an action (or inaction) of the Tenant. The City will advise the Tenant of those costs on a monthly basis. All Payments shall be made by the Tenant within 30 days of any invoice. · 4.2.2 Operating year shall mean each twelve (12) month period beginning with the commencement date of the Sublease. 4.2.3 (a) Tenant agrees to pay, in advance as Additional Rent, Tenant's share of estimated Operating Expenses due for the first Operating Year or portion thereof and each and every operating year thereafter that the Lease term 'includes, as estimated by Landlord from time to time, in nine (9) monthly installments, each in an amount equal to 1/9th'of Tenant's share, commencing 6/11/97 - BLDG29.LSE 3 on the commencement date of the Sublease and continuing thereafter on the first day of each month, unless payment for the operating year is paid in full. (b) Tenant hereby covenants and agrees to pay the Additional Rent pursuant to this Section 4 as and when the same shall become due and payable, without further' demand therefor, and without any set-off or deduction whatsoever. Failure to provide Tenant with an estimate or revised estimate of Tenant's share of Operating Expenses shall not Constitute a waiver by Landlord of its right to iequire an increase in Additional Rent nor shall such failure deprive Tenant of a decrease in Additional Rent, as the case may be. (c) If, as finally determined by Landlord, based on actual operating costs incurred, Tenant's share is greater than or'less than the aggregate of all installments So paid on account to Landlord for such Operating Year, Tenant shall pay promptly to Landlord the amount of such underpayment, or Landlord shall credit Tenant for the amount of such overpayment, as the case may be. It is the intention hereunder to estimate the amount of taxes and operating Expenses for each Operating Year and then to adjust such estimate in the following operating year based on actual taxes' and Operating Expenses 'incurred and/or paid by Landlord. Any payment, refund, or credit made pursuant to this section shall be made without prejudice to any right of Tenant to dispute, or of Landlord to correct, any item(s) as billed pursuant to the provisions hereof. · , (d) Within thirty (30) days after receipt of a statement of the actual. Operating Expenses, Tenant or its authorized representative shall have the right to inspect the books of Landlord during the business hours of Landlord at such location as Landlord may specify, for the purpose of verifying information in such statement. Unless Tenant notifies Landlord of specific errors in writing within thirty (30) days after delivery of such statement, the statement shall be deemed to be correct. 4.2.4 Should this Sublease commence or terminate at any time other than 'the first day of the Operating Year, Additional Rent payable by Tenant with respect to the Operating Year in which this Sublease commences or terminates, as the case may be, Additional Rent shall be first calculated on the basis of the entire . Operating Year and then prorated on the basis of the number of days this Sublease was in effect during such operating year. If, upon expiration or termination of'this lease for any cause, the. amount of Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord shall be made within ten (10) days after such determination. 4.4 Late Charge. If any payment of Base Rent or of Additional Rent, or any part thereof to be made by Tenant to Landlord pursuant to the terms of this Lease shall become overdue for a period in excess of five (5) days, a late charge equal to ten (10) percent of such overdue 6/11/97 - BLDG29.LSE amount shall be paid by Tenant for the purpose of defraying the expense incident to handling such delinquent payment, together with interest from the date such payment or part thereof was due, at the default rate. 4.5 No Waiver. Nothing herein or in the imposition or acceptance of· a late charge or interest by Landlord shall be construed as a waiver of any rights of Landlord arising out of any default of Tenant; the right to collect any late charge or interest is separate and apart from any rights or remedies of Landlord relating to any default by Tenant. · 4.6 Survival. The obligations of Tenant with respect to the payment of Base Rent and Additional Rent shall survive the termination of this Sublease, if such termination is due to Tenant breach or default hereunder. 4.7 Net Lease . The Tenant hereby acknowledges and agrees that this Sublease is intended to be a complete net Sublease to the Landlord, except as expressly herein set out, that the Landlord is not-responsible for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Subleased Premises, or the use and occupancy thereof, or the contents thereof or the buSiness carried on therein, and that the Tenant shall pay all charges, impositions, costs and expenses of every nature and kind relating to the Subleased Premises, and the property, except as expressly otherwise agreed herein. 5.0 Prime Lease and Sublease. 5.1 This Lease is subject to and subordinate to the Prime lease. Tenant acknowledges that Landlord's rights to the Subleased Premises arise solely under the Prime Lease, attached as Exhibit A. Notwithstanding any provision of this Sublease, LandlOrd and Tenant hereby agree as follows: (a) Tenant agrees to be bound by and perform all of the terms and conditions to be performed by Landlord under the Prime Lease to the extent applicable to the Subleased Premises and/or Tenant's tenancy under this Lease; (b) Tenant will comply with all covenants and conditions of the Prime Lease respecting Landlord's use and occupancy of the Premises; (c) Tenant will not do or permit anything to be done in or on the Premises which will cause the occurrence of a default by Landlord under the Prime Lease; (d) Tenant shall indemnify, defend and hold Landlord harmless from and against any cost, claim, liability, loss or damage occurring by reason of Tenant's breach or default of this Sublease, including, without limitation, .the cost of cure, loss of the Prime Lease, and any attorneys' fees and disbursements incurred in connection with the foregoing; (e) if the Prime Lease expires or is terminated for any reason, including without imitation, any default 'by the Prime Lessor or Landlord thereunder, or Landlord's election to exercise any fight to terminate, then this Lease shall thereupon terminate, without any liability to Landlord (unless such expiration or termination is caused by a material default of Landlord under the Prime Lease), as if such date 6/11/97 - BLDG29.LSE were the scheduled expiration date of the term. Landlord shall take all reasonable actions to keep the Prime Lease in full force and effect during the term of this Lease. Notwithstanding the preceding sentence, Landlord shall not be required to initiate any legal action. 5.2 Landlord shall have no liability to Tenant for Prime Lessor's defaults under the Prime Lease. Tenant agrees that Landlord shall not be obligated for performing any of the Prime Lessor's obligations under the Prime Lease. Tenant further agrees that neither this Sublease nor any obligation hereunder, including the payment of Base Rent or Additional Rent, shall be affected by Prime Lessor's default under the Prime Lease, except to the extent that the Prime Lease is terminated. Landlord reserves exclusively all rights 'to enforce the Prime Lease, but agrees to make reasonable efforts to enforce Prime Lessor's obligations under the Prime Lease, to the extent that Tenant is a material beneficiary thereof. Landlord shall not be required to initiate any legal action against Prime Lessor, but agrees to reasonably cooperate with Tenant to enforce the Prime Landlord's' obligations under the Prime Lease. 5.3 In the event of any conflict in the rights of Tenant under this Lease and the rights, of Landlord under the Prime Lease, the terms, conditions and covenants of the Prime Lease shall control. 6.0 Use of the Subleased Premises. 6.1 Subject to any restrictions in the Finding Of Suitability to Lease (attached as Exhibit C to the Prime Lease), and the Prime Lease, Tenant shall use and occupy the Subleased Premises for production and manufacture of a motion picture, including construction of sets, storage equipment or office spaces, for uses normally incident to such purpose, and for no other purpose unless expressly agreed to by the Landlord in writing. 6.2 There shall be no filming outside of Building No. 29 on the Subleased Premises without prior written authorization from the Landlord and the Commander, MCAS-Tustin. 7.0 Utilities. Landlord shall make 'available existing water, sanitary and storm sewer, electricitY and gas utilities to the Subleased Tenant's Premises pursuant to the conditions of the Prime Lease which shall be installed to CitY of Tustin. Prior to occupancy of the Subleased Premises, Tenant shall pay to Landlord a one time payment of $19,900 which is the estimated cost for the installation of meters for electricitY and gas utilities, consistent with commercial' standards. Tenant shall pay for the consumption of all utilities used at or on the Subleased Premises; including, but not limited to, electricitY, gas, water, sewer and trash services, except to the extent any of the same are supplied by Landlord and included in Operating Expenses. Tenant acknowledges that any one or more such services may be suspended by reason of accident or of repairs, alterations, or improvements necessary to be made, or by strikes or lockouts, or by reason of operation of law, or causes beyond the reasonable control of Landlord. Tenant shall have no right to any set-off or reduction in B~e Rent or Additional Rent nor shall Landlord have any liabilitY for any such interruption or suspension of such services. However, should Landlord do or cause anything to be done which causes the utilities to be interrupted such that 6/11/97 - BLDG29.LSE Tenant's use of the Subleased Premises is materially interfered with for a period of fifteen (15) consecutive days, then Tenant shall have the right to claim an offset or reduction in the Base Rent and Additional Rent until said utilities are restored or the right to terminate this lease provided Tenant gives written notice to Landlord within ten (10) days of its intent to terminate or its request to claim an offset or reduction in Rent or Additional Rent. 8.0 Certain Rights Reserved to Landlord. Landlord reserves the following rights: 8.1 To install and maintain a sign or signs on the exterior or interior of the building, which Tenant may cover during filming. 8.2 To hold all keys and passkeys to the Subleased Premises, subject to subparagraph 8.4 herein below. 8.3 On reasonable prior notice to Tenant, to show the Subleased Premises to prospective_ tenants...during the term of the Sublease, and to any prospective purchaser, ~0rtgagee~' -or--assignee of any'm°r~gage or 'ground lease ~)~ ~h~ Uuilding-°r-the Prisp~i~ and to others having a legitimate interest in the Premises at any time during the term. 8.4 At any time in the event of an emergency, and otherwise at reasonable times, upon reasonable notice no less than forty-eight (48) hours, to take any and all measures, including making any inspections, repairs, alterations, additions, and improvements to the Subleased Premises, as may be necessary or desirable for the safety, protection, or preservation of .the Subleased Premises, or Landlord's interests, or as may be necessary or desirable in the operation or improvement of the Subleased Premises, or in order to comply with all laws, orders, and requirements of governmental or other authorities and the Prime Lease. Landlord shall not be in default hereunder nor have any liability to Tenant nor shall Tenant have any right to terminate this Sublease or claim an offset against or reduction in Base Rent or Additional Rent payable hereunder due to any damage, annoyance or inconvenience resulting from any such inspections, repairs, alterations, additions or improvements. Tenant.shall fully cooperate with Landlord or Landlord's agents or contractors in carrying out any such inspections, repairs, alterations, additions or improvements. 9.0 Covenants of Tenant. 9.1 Tenant shall maintain and keep the Subleased Premises in good working ordei and repair, reasonable wear and tear and damage by casualty not caused by the negligence of Tenant or its agents, contractors or employees excepted. 9.2 Tenant shall not make or permit to be made any use of the Subleased Premises or any part thereof (i) which would violate any of the covenants, agreements, terms, provisions, and conditions of this Sublease or the Prime Lease; or (ii) which would directly or indirectly violate any federal, state or local law, ordinance, rule or governmental regulation; or (iii) which will suffer or permit the Subleased Premises or any part thereof to be used in any manner or 6/11/97 - BLDG29.LSE 7 permit anything to be brought into or kept therein which, in the reasonable judgment of Landlord, shall in any way impair or tend to impair the character, reputation or appearance of the Subleased Premises or which will impair or interfere with or tend to impair or interfere with any of the services performed by Landlord. 9.3 Tenant shall not display, inscribe, print, maintain or affix on any place in or about the Subleased Premises any sign, notice~ legend, direction, figUre or advertisement, except as may be approved by Landlord in writing. 9.4 Tenant shall not attach any additional locks or similar devices to any door or window, change any locks or make additional keys for any doors to the Subleased Premises, without Landlord's prior written consent. All keys must be returned to Landlord at the expiration or termination of this Sublease.' 9.5 Excepting as set forth below, unless Landlord gives advance written consent, Tenant shall not install or operate any steam or internal combustion engine, boiler, in or about the Subleased Premises, or use the Subleased Premises for housing accommodations or lodging . or sleeping .purposes,: or 'use. any illumination, other, than electric~ light,_ or use or. permit to_be brought into the building any inflammable fluids such as gasoline, kerOsene, naphtha and' benzine, or any explosives, radioactive materials or other articles deemed extra hazardous to life, limb, or property. Tenant shall not use the SUbleased Premises for any illegal or immoral purpose. Notwithstanding anything to the contrary stated hereinabove, Tenant may utilize the Subleased Premises for the following and be exempted from the above restrictions: (a) For catering purposes, Tenant will have refrigerating, heating and cooking devices in its catering track and the serving areas on the Subleased Premises. Tenant will be using fuels, most likely propane, in connection therewith. . . (b) For construction purposes, Tenant will be using internal combustion engine vehicles, such as forklifts, etC. and certain flammable liquids such as solvents and fuels. (c) For special effects, Tenant will be using steam boilers and flammable liquids for various special effects in the film. All of these will have proper state and federal permits and the MCAS-Tustin Fire Chief and Orange County Fire Authority, as applicable will be notified in writing at least twenty-foUr (24) hoUrs in advance of their use, (d) For film shooting, Tenant will have large portable air conditioning and heating units for the "stages." (e) For transportation, Tenant will have a number of vehicles, particularly trailers which may have propane powered heating, etc. including a fuel truck to fuel stationary vehicles. 6/11/97 - BLDG29.LSE 9.6 The sidewalks, .halls, passages, exits and entrances shall not be obstructed by Tenant or used for any purpose other than for ingress to and egress from the Subleased Premises. 9.7 Tenant shall not use, keep, or permit to be used or kept any foul or noxious gas or substance in the Subleased Premises, or permit or suffer the Subleased Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business therein, nor shall any animals or birds be brought in or kept in or about the Subleased Premises or the building excepting, any animals used in filming. 9.8 Tenant shall comply with the rules and regulations referenced in paragraph 13 (Rules and Regulations). 9.9 Tenant shall comply with all laws, enactments, rules, ordinances and regulations of'all governmental authorities relating or applicable to Tenant's occupancy of the Premises and all covenants of the Prime Lease governing use of the Subleased Premises. Tenant shall .... obtain all permits and licenses required by the City. of Tustin and shall pay all required fees. _. In addition to all other liabilities for breach of any covenant of this Section, Tenant shall pay to Landlord an amount eq.ual to any increase in insurance premiums payable by Landlord caused by Such breach. 10.0 Alterations. Tenant'shall not make any. alterations, improvements, or .additions to the Subleased Premises including, but not limited to, wall coverings, floor coverings and special lighting installations, without Landlord's prior written consent in each and every instance. In the event Tenant desires to mhke any alterations, improvements or additions, Tenant shall first submit to Landlord the plans and specifications relating thereto and obtain Landlord's written approval prior to commencing any such work. At the termination of this Sublease, at Landlord's option, either (i) all alterations, improvements or additions, whether temporary or permanent in character, made by Landlord or Tenant in or upon the Subleased Premises shall become Landlord's property and shall remain upon the Subleased Premises at the termination of this Sublease without compensation to Tenant (excepting only Tenant's movable office furniture, trade fixtures, and office and professional equipment), or (ii) upon notice to Tenant, Tenant shall remove such alterations, improvements or additions, at Tenant's cost, and Tenant shall promptly repair and damage to the Subleased Premises resulting therefrom. 11.0 Assignment and Subletting. 11.1 Tenant shall not, without Landlord's prior written consent, (i) assign, convey, mortgage, pledge, encumber or otherwise transfer (whether voluntarily or otherwise) this Sublease or any interest under it; (ii) allow any transfer of or any lien upon Tenant's interest by operation of law; (iii) sublet the Subleased Premises or any part thereof; or (iv) permit the 6/11/97 .- BLDG29.LSE use or occupancy of the Subleased Premises or any part thereof by anyone other than Tenant and its employees. 11.2 Tenant's reque.st for consent to any sublet or assignment shall be in writing and shall contain the name, address, and description of the business of the proposed assignee or subtenant, its most recent financial statement and other evidence of financial responsibility, its intended use of the Subleased Premises, and the terms and conditions of the propose assignment or subletting. Within thirty (30) days from receipt of such request, Landlord shall either: (1) grant or refuse consent; or (2) elect to require Tenant (a) to execute an assignment of Sublease or sublease of Tenant's interest hereunder to Landlord or its designee upon the same terms and conditions as are contained herein, together with an assignment of Tenant's interest as sublessor in any such proposed sublease, or (b) if the request is for consent to a propOsed assignment of this Sublease, to terminate this Sublease and the term hereof effective as the last day of the third month following the month in which the request was received. 11.3 For purposes of this Section, any transfer or change in control of Tenant by operation of law or otherwise shall be deemed an assignment hereunder, including, without limitation, any merger, .consolidation, dissolution or any change in more than 30% of the - - interests :of Tenant,' whether in a single transaction or a series of rel/ited 'tranSacti0ns~ .... 11.4 If, with the consent of Landlord, this Sublease is assigned or if the Subleased premises or any part thereof is sublet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect Base Rent and Additional Rent from the assignee, subtenant, or occupant, and apply the' net amount collected to the Rent herein reserved. If Landlord consents to such subletting or assignment, it shall nevertheless be a condition to the effectiveness thereof that a fully'executed copy of the sublease or assignment be furnished to Landlord and that any assignee assumes in writing all obligations of Tenant hereunder. No consent to any assignment, subletting or occupancy shall be deemed a waiver of any of Tenant's covenants contained in this Sublease or the acceptance of the assignee, subtenant or occupant as Tenant, nor a release of Tenant from further performance of any covenants and obligations under this Sublease. 11.5 Any consent given by Landlord to an assignment or subletting of this Sublease shall not constitute a waiver of the necessity of such consent to any subsequent assignment or subletting. 11.6 Should Landlord consent to an assignment or sublease of the Subleased Premises, all Base Rent and Additional Rent received by Tenant frOm its subtenants in excess of the total Rent payable by Tenant to Landlord under this Sublease shall be paid to Landlord, and all sums to be paid by an assignee to Tenant in consideration of the assignment of this Lease shall be paid to Landlord. 11.7 If Tenant requests Landlord to consent to a proposed assignment or subletting, Tenant shall pay to Landlord, whether or not consent is ultimately given, Landlord's attorneys' fees incurred in connection with reviewing each such request. 6/11/97 - BLDG29.LSE 10 12.0 Condition of Premises. Tenant agrees to accept the Subleased Premises "as is" and in its present condition. Tenant's taking possession of the SUbleased Premises shall be conclusive evidence that the Subleased Premises were in good order and satisfactory condition when Tenant took possession, except as to latent defeCts. No promise of Landlord to alter, remodel, repair or improve the Subleased Premises and no representation respecting the condition of the Subleased Premises have been' made by Landlord to Tenant, other than as may be contained herein o5 in a specific work letter agreement .signed by Landlord and Tenant. At the termination of this Sublease, Tenant shall return and surrender the Subleased Premises in as good condition as when Tenant took possession, ordinary wear and tear and loss by fire or other casualty not' caused by the negligence of Tenant or its agents, contractors or employees excepted. If Tenant fails to comply with the previous sentence, Landlord may restore the Subleased Premises to the condition the Subleased Premises were in when Tenant took possession, and Tenant shall pay the 'cost thereof on demand. 13.0 Rules and Rezulations. LandlOrd shall have th'e' right to make such-reasonable rules 'and regulations' as in the judgment of Landlord may from time to time be necessary for the safety, appearance, care and cleanliness of the Subleased Premises and for the preservation of good order therein. Such rules to be provided shall be in writing. 14.0 Repairs. Tenant shall, at Tenant's own expense, maintain the Subleased Premises in a safe, clean and serviceable condition. Tenant Shall give to Landlord prompt written 'notice of any damage to, or defective condition in, any part or appurtenance of the Subleased Premises' plumbing, electric~tl, heating, air-conditioning or other systems serving} located in, or passing through the Subleased Premises. If any damage results from any act or neglect of Tenant or its agents, contractors or employees, Landlord may, at Landlord's option, repair such damage and Tenant shall promptly thereupon pay to Landlord the total cost of such repair. 15.0 Eminent Domain. 15.1 In the' event that title to the whole of the Subleased Premises or the building shall be lawfully condemned or taken in amy manner for any public or quasi-public use or conveyed in lieu of condemnation, this Sublease shall automatically terminate as of the date possession is :required to be delivered to the condemnor. In the event that only. a portion of the Subleased Premises is taken and the Premises are thereby rendered, in Landlord's reasonable opinion, unsuitable for the conduct of Tenant's business, either party may terminate this Sublease as of the date when possession of the portion of the Subleased Premises so taken is delivered to the condemning authority. 6/11/97 - BLDG29.LSE 11 15.2 In the event of any eminent domain, Tenant, by signing this Sublease is waiving any and all rights of any type, kind or amount for relocation benefits, including but not limited to any such or similar rights prescribed' by any state, federal or local law and/or regulation and waiving any and all rights to just compensation under the U.S. and California constitutions. 16.0 Tenant-Landlord Relationship. 16.1 This Sublease is m)t intended and Shall not be construed to create the relationship of agent, servant, employee, or representative of the Landlord by Tenant. 16.2 Tenant under~tands and agrees that all persons furnishing services to Tenant pursuant to this Sublease are, for purposes of workers compensation and liability, solely employees of Tenant and not of Landlord. 16.3 Tenant shall bear the sole responsibility and liability for furnishing workers . compensation benefits to any person for injuries from or connected with services performed on behalf of Tenant pursuant to this Sublease.-.. 16.4 Tenant understands and specifically agrees to ~nform i~s emplOYees that it's:-a-':- Tenant. Tenant understands and specifically agrees to inform its employees that Tenant is not an agent,, servant, employee or representative of Landlord. 17.0 Indemni_ty. 17.1 Tenant shall defend, indemnify, and save harmless the Landlord and United States of America, and all of its officers, agents and employees from any and all claims and demands, actions, proceedings, losses, liens, costs and judgements of any kind and nature whatsoever, including expenses incurred in defending against legal actions,' for death or. injury to persons or damage to property and for civil fines and penalties that may arise from or be caused directly or indirectly by: 17.1.1 Any dangerous, hazardous, unsafe or defective condition, in or on the Subleased Premises, of any nature whatsoever, which may exist by reason of any act, omission, neglect, or any use Or occupation of the Subleased Premises by Tenant, its officers, agents, employees, sublessees, licensees or inVitees from commencement of the term of the Sublease; 17.1.2 Any operation conducted upon or any use or occupation of the Subleased Premises by Tenant, its officers, agents, employees, sublessees, licensees or invitees under or pursuant to the provisions of this Lease or otherwise; · 17.1.3 Any act, omission, or negligence of Tenant its officers, agents, employees;. 17.1.4 The loss of or damage io any property of Tenant by theft or otherwise; 6/11/97 - BLDG29.LSE 12 17.1.5 Any injury or damage tO persons or property resulting from fire, steam, electricity, gas, water, rain or from.'the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,, plumbing or HVAC systems or lighting fixtures, or from any other cause whatsoever (whether similar or dissimilar to those above specified), whether said damage or injury results from conditions arising in the Subleased Premises or at or on other portions of the property, or from other sources or places. Landlord shall not be liable for any damages arising from any act or neglect of any other tenant or person not the agent or any person doing business with Tenant. 17.1.6 Any failure of Tenant, its officers, agents, employees or sublessees to comply with the terms or conditions of this Sublease, the Prime LeaSe, or any applicable federal, state, regional or municipal law, ordinance, rule or regulation related to the use or occupancy of the Subleased Premises. 17.2 Landlord will notify the Tenant within 30 days of any claim filed against it that is covered by this indemnity. 17.3 Tenant also agrees to indemnify the United States of America and Landlord and pay for all damages or loss suffered by Landlord or the United States Government including, but not limited to, damage or loss of United States of America's or landlord's property 'and injury to United States of America's 0r Landlord's employees arising out of the conditions, operations, uses, occupations, acts, omissions or negligence referred to in subparagraphs 17. !. 1 through 17.1.6. ~ 17.4 Nothing in this paragraph 17 is intended as a waiver of Tenant's indemnity 'and contribution rights under federal' law and the responsibility of Government to indemnify and hold harmless the Landlord and any Tenant from toxic torts and other environmental claims in accordance with public law 102-484, the National Defense Authorization Act for Fiscal Year 1993, Section 330, as 'amended. 17.5 The provisions of this paragraph 17 shall not require indemnification to the extent that losses or costs are solely attributable to any act, omission or negligence of the United States of America, its officers, agents or employees, or contractors ..or of the Landlord, its officers, agents, employees or contractors. The provisions contained in this paragraph shall survive the termination of the Sublease. 18.0 Insurance. , 18.1 Tenant shall provide and maintain at its 'own expense during the term of this Sublease the following insurance covering its operations under this Sublease. Such insurance shall be provided with insurers licensed to do business in the State of California, with a rating of at least A; VII, according to the latest Best's Key Rating Guide. Evidence of such insurance shall be delivered to Landlord on or before the Tenant occupies the Premises, and shall be provided on Landlord's own form, attached hereto as Exhibit C (the "Form"). The Insurers 6/11/97 - BLDG29.LSE 13 shall specifically identify this Sublease and shall contain express conditions that Landlord is to be given at least thirty (30) days advance written notice, of any material modification in or termination of insurance. Such insurance} shall be primary to and not contributing with any other insurance maintained by Landlord, and shall name the Landlord, the City of Tustin, and the United States of America, and their respective officers 'and employees as additional insureds. All insurance shall be maintained on an occurrence basis. 18.1.1 General Liability Insurance Broad form comprehensive public liability and property damage (including comprehensive general liability) insurance covering Subleased Premises, operations, products and' completed operations, contractual, broad form property damage, and personal injury or death, with a combined single limit of not less than ten million dollars ($10,000,000) per occurrence. 18.1.2 Workers Compensation Insurance Workers compensation insurance in an amount and form meeting all applicable ...... reqUirements of 'the' California Labor Code, covering all persons providing services by or on behalf of Tenant and all risks to such persons. 18.1.3 Fire and "All Risks" Insurance Broad form fire insurance coverage against loss or damage by fire, .lightning, or flood damage and against loss or damage by other risks embraced by coverage of the type now known as the broad form or extended coverage, including but not limited to riot and civil commotion, vandalism and malicious mischief, explosion of boilers, generators, transformers' and heating apparatus and air conditioning systems, and against such risks or hazards as may 'customarily be insured against in industrial developments, covering ninety percent (90%) of the replacement value of the works, structures, improvements and related personal property on the Premises, with such provision in the policies issued to cover the same, or in riders attached thereto, as will provide for all. losses over $50,000 to be payable to the United States Government, to be placed in an escrow account and held in trust for reconstruction. In the eVent of any loss under such' policy, the Tenant shall undertake replacement or reconditioning of the works, structures, improvements and related personal property within ninety (90) days following any such loss. In the event that the Sublessee shall undertake such replacement or reconditioning within such period, 'such proceeds shall be released by the United States Government to Tenant as payment is required for said purpose. Upon completion of such replacement 'or reconditioning' to the' satisfaction of United States Government, any balance thereOf remaining shall be paid to Tenant forthwith. In the event Tenant fails to undertake such replacement or reconditioning within said period of ninety (90) days, such proceeds shall be retained by the United States Government. 6/11/97 - BLDG29.LSE 14 18.2 Deductibles. All insurance limits identified in Section 18 shall be without deduction, provided that the United States Government and Landlord may permit a deductible amount in those costs where, in its judgement, such a deduction is justified. 18.3 Other Insurance Provisions. 18.3.1 The general liability policy is to contain, or be endorsed to contain, the following provisions: (a) The Landlord and the United States of America and their respective officers, officials, employees and contractors are to be covered as insureds as respects: liability arising out of Subleased Premises. The coverage shall contain no special limitations on the scope of protection afforded to the Landlord, its officers, officials, employees or. contractors or to the United States of America. (b) The Tenant's insurance cOverage shall be primary insurance as respects the United States of America and to the Landlord, and their respective officers, officials, employees and contractors.~ Any. insurance or self-inSurance maintained by the · Landlord or the United States of America shall be excess of the Tenant's insurance and shall not contribute with it. (c) Any failure to comply' with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Landlord, its officers, officials, employees or.volunteers. (d) Coverage shall state that the Tenant's insurance shall apply separately to each additional insured against whom claim is made or suit is brought, except with respect to the limits of the inSurer's liability. (e) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, remm receipt requested, has been given to the Landlord and the United States of America. 18.3.2 The workers' compensation and all liability policies are t° contain, or be endorsed to contain, the following provisions: (a) "The insurer waives any right of subrogation against the Landlord and the United States of America which may arise by reason of any payments.made under a policy." (b) Coverage shall not be suspended, voided, canceled, reduced or in limits except after thirty (30) days prior written notice has been given to the Landlord and the United States of America. 6/11/97 - BLDG29.LSE 15 " 18.4 Subcontractors. Tenant shall include all of its subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 18.5 Failure by Tenant to procure or maintain required insurance shall constitute an Event of Default, upon which Landlord may immediately terminate this Sublease. Tenant's operations shall be subject to suspension by Landlord during any period Tenant fails to maintain required insurance in full force and effect. 18.6 Verification of Coverage. In addition to completing City's form, Tenant shall furnish the Landlord with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the Landlord before occupancy commences. 19.0 Default. -:,:: ..... - .................. It sh~_ll constitute an event of default ("Event of Default") under this Sublease iff 19.1 Tenant fails to pay when due, Base Rent, Additional Rent, or other amounts due hereunder; or 19.2 Tenant assigns or sublets, or purports to assign or sublet the Subleased Premises or any part thereof other than in the manner and upon the conditions set forth herein; or 19.3 Tenant fails to perform or observe any of its other obligations~ covenants, or agreements hereunder within ten (10) days after written notice of any such failure has been given by or on behalf of Landlord, or, if more than ten (10) days is required to cure such failure, if Tenant fails to commence such cure as promptly as practical and thereafter diligentlY to pursue such cure and thereafter complete such cure within thirty (30) days after such notice; or 19.4 Tefiant liquidates its.business, becomes insolvent, makes an assignment for the benefit of creditors, files or has filed against it a petition of bankruptcy bill in equity or other proceedings for the appointment of a receiver or other, custodian for its property, or if proceedings for reorganization or composition with creditors under any law are instituted by or against Tenant or if any levy or sale or execution o/' any kind is made upon or of any property of Tenant in the Subleased Premises; or Tenant shall be deemed insolvent if it has ceased to pay its debts in the ordinary course. of business or cannot pay its debts as theY become due, whether it has committed an act of bankruptcy or not, and whether insolvent,-within the meaning of federal bankruptcy law Or not. 6/11/97 - BLDG29.LSE 16 19.5 The dete/mination by Landlord, the State Fair Employment and Housing Commission, the Federal Equal Employment Opportunity Commission or other state or federal civil rights agency, of discrimination having been committed by Tenant in violation of state and/or federal laws in connection with this Sublease. 19.6 Tenant abandons or vacates the Subleased Premises or Tenant removes Or attempts to remove or manifests an intention to remove Tenant's goods or property from or out of the Subleased Premises otherwise than in the ordinary and usual course of business; or 19.7 Tenant fails to vacate the Subleased Premises on the expiratiOn date unless this Lease is otherwise renewed or extended. 20.0 Landlord's Remedies. 20.1 If an Event of Default hereunder shall have occurred, Landlord may, at its option, exercise any one or more of the following remedies: 20.1.1 Termination of Lease. Landlord may terminate this Sublease, .by written~ notice t0 Tenant~. 'with-out any"righf-by T~nani to-reinstate its--rights by'payment of R~nt--due or other performance of the terms and conditions hereof. Upon such termination, Tenant shall immediately surrender possession of the Subleased Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the aggregate of all base Rent and Additional Rent which then remains due to Landlord but unpaid by Tenant. 20.1.2 Relettinv.. With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess the Subleased Premises, or any part' thereof, and lease them to any other person upon such terms as LandlOrd shall deem reasonable, for a term within or beyond the Term; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Base Rent, Additional Rent and other sums-which would be payable under this Sublease by Tenant in the absence of such eXPiration, termination or repossession, less (ii)' the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord's expenses, reasonable attorneys' fees and expense, employees' expenses, alteration costs, expenses of preparation for such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant's breach of this Sublease. If the Subleased Premises are, at the time of default; sublet or leased by Tenant to others, Landlord may, as Tenant's agent, collect Rents due from any subtenant or other Tenant and apply such Rents to the Rent and other amounts due hereunder without in any way affecting Tenant's obligation to Landlord hereunder. Such agency, being given for security, is hereby declared to be irrevocable. 20.1.3 Acceleration of Rent. Landlord may declare Base Rent and all Additional' Rent (the amount thereof to be based on historical amounts and Landlord's estimates for future amounts) for the entire balance of the then current term immediately due and payable, together with all other charges, payments, costs, and expenses payable by Tenant as though such amounts were payable in advance on the date the Event of Default occurred. 6/11/97 - BLDG29.LSE 17 20.1.4 Rent Minus Fair Market Value. Landlord may declare immediately due and payable from Tenant, in addition to any damages or other mnounts becoming due from Tenant under any other provision of this Sublease, an amount equaling the difference between the Rent reserved in this Sublease from the date of the default to the expiration date and the then fair market value of the Subleased Premises for the same period. 20.1.5 Removal of Contents by Landlord. With respect to any portion of the · Subleased Premises which is vacant or which is physically unoccupied by Tenant, Landlord may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant's property, which lien is to be in addition to Landlord's lien now or hereafter provided by law. 20.1.6 Rieht of Distress and Lien. In addition to all other rights and remedies of LandlOrd, ~if an Event.of Default _shall occur, Landlord shall, to the.extent permitted by law, have a right of distress for Rent and lien on all 'of Tenant;s' fixtUres, merChandise 'and equipment in the Subleased Premises, as security for Rent and all other charges payable hereunder. ' 20.2 Proceedings. Tenant hereby releases Landlord and any and all attorneys who may appear for Tenant from all errors in said proceedings and all liability thereof. 20.3 Survival of Tenant's Obligations. No expiration or termination of this Sublease (except as expressly provided herein) and no repossession of the Subleased Premises or any part thereof shall relieve Tenant of its liabilities and obligations hereunder, all of which shall survive such expiration, termination or repossession, and Landlord may, at its option, sue for and collect all Rent and other charges due hereunder at any time as when such charges accrue. 20.4 Not Exclusive Right. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be.cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity or by statute. 20.5 .Expenses. In the event .that Landlord commences suit for the repossession of the Subleased Premises, for the recovery of Rent or any other amount due under the provisions of. this Sublease, or because of the breach of any other covenant herein conta, ined on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys' fees. 6/11/97 - BLDG29.LSE 18 21.0 Fire or Other Casualty. 21.1 In the event of damage to or destruction of the Premises caused by fire or other casualty, or any such damage or destruction to the building or the facilities necessary to provide services and normal access to the Premises, Tenant, after receipt of written notice thereof from Landlord, shall undertake to make~ repairs and restorations with reasonable diligence pursuant to provision of Paragraph 18.1.3 of this Sublease or the Subleased Premises or the building is so damaged that, in Landlord's judgment after consultation with the Prime Lessee, it is uneconomical to restore or repair the Subleased Premises or the building, or available insUrance proceeds for the building are insufficient to repair or rebuild the damage, Landlord shall, within forty-five (45) days after any such damage or destruction, have the right to terminate this Sublease by written notice to Tenant, as of the date specified in such notice which termination date shall be no later than thirty (30)' days after the date of such notice. Base Rent and Additional Rent shall be adjusted proportionately as of the date of the termination and Tenant shall promptly vacate the Subleased Premises. 21.2 Provided this Sublease is not terminated and is otherwise in full force and effect, Landlord shall proceed diligently to restore the Subleased Premises to substantially its condition prior to the occurrence of the damage, subject to any delays due to reasons beyond Landlord's control. Landlord shall not be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the' Subleased Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures Payment in full of all costs as may be incurred by Landlord in connection therewith. 21.3 DUring the period when Tenant shall be deprived of possession of all or a portion of the Subleased. Premises by reason of such damage or the Subleased Premises are, in Landlord's judgment, rendered untenantable, Tenant's obligation to pay Rent shall be abated in proportion to the area of the Subleased Premises not usable. 22.0 Termination Notwithstanding any other provisions of this Sublease, Landlord shall have the immediate option to terminate this Lease in the event that the United States of America so notices the Landlord of an national emergency and its need for said Premises as provided in the' Prime Lease. 23.0 Environmental Representations and Covenants. 23.'1 Tenant and those acting by, through or under Tenant, shall not improperly store, handle, treat, use release, dispose of, discharge or produce any hazardous substances or hazardous waste as those terms are defined in either the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.§9601-9675, or State of California Health & Safety Code, Chapter 6.5 (Hazardous Waste control), Section 25100 and following, or any 6/11/97 - BLDG29.LSE 19 pollutant, contaminant or toxic substance as may be regulated or governed by any federal, state or local laws or ordinances intended to protect health, safety or the environment. Tenant shall be responsible to remediate and clean-up any and all such hazardous substances, pollutants, contaminants or toxins in violation of this subparagraph. Tenant agrees to defend with counsel acceptable to Landlord, indemnify and to h01d Landlord harmless of, from and against any and all claims, expense, loss or liability suffered by Landlord by reason of Tenant's breach of any of the provisions of this Section or any claims by Tenant's employees, agents, contractors, visitors or assigns, caused by, related to, or arising from such breach. The indemnity in this subparagraph shall survive the expiration or earlier termination of this Sublease. 23.2 The parties recognize that no adequate remedy at law may exist for Tenant's breach of paragraph 23.1 Accordingly, Landlord may obtain specific performance of any proviSion of paragraph 23.1 23.3 'Landlord advises tenant that Subleased Premises and adjacent property has been used in the past for industrial purposes and that hazardous substances have been released on and beneath said property. The environmental conditions and the restrictions on the activities of users of the Subleased Premises are set forth in Exhibit B attached hereto and made a part he~:~of bs; r~fer~nce,''- r~hint ~agre-es tb ~ibid~ by-th~'restriCti0ns-~t 'f0'rth in'Exhibit B as well as other restrictions necessary to. protect human health and the environment and so as not to interfere with the remedial activities on Subleased Premises and adjacent property. 23.4 Landlord advises Tenant that the Subleased Premises consists of building improvements which contain asbestos (State of California Health & Safety Code §§25915- 25919.7) and Tenant agrees to provide notice to its employees, agents and contractors that the building contains asbestos - containing construction materials pursuant to California Health & Safety Code Section 25915, et seq. 24.0 Compliance with ADA. Tenant represents, warrants and covenants that: 24.1 Tenant shall conduct its business in accordance with the requirements of the Americans with Disabilities Act of 1990 (the "Act") and with hll other applicable statues, rules,. regulations and ordinances relating to handicap accessibility; and 24.2 Provided that Landlord consents to any alterations to be performed by Tenant in or about the Subleased Premises under Section 12 (Alterations) of this Sublease, Tenant shall perform any and all such alterations (as that term is defined under the' Act) in compliance with the applicable provisions of the Act and with all other applicable statues, rules, regulations and ordinances relating to handii:apped accessibility. 6/11/97 - BLDG29.LSE 20 25.0 Labor Laws. 25.1 Equal Opportunity.. 'During the term of this Sublease, Tenant agrees as follows: 25.1.1 Tenant will not discriminate against any employee of Tenant or applicant for employment because of race, color, religion, sex, or national origin. The employees of Tenant shall be treated during employment, without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising, layoff or termination, rate of pay or other forms of compensation, selection for train!ng, including apprenticeship. Tenant agrees to post in conspicuous places, notices to be provided by the United States of America or-State of California ("Government") setting forth the provisions of this nondiscrimination clause. 25.1.2 Tenant will, in all solicitations or advertisements for employees placed by or on behalf of Tenant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin. 25.i.3-Tenant will Send't° each labor Union or representa~iCe' oi~rkerS~with which it has a collective bargaining agreement or other contract or understanding a notice to be provided by the Government, advising the labor union or worker's representative of Tenant's commitments under this Equal Opportunity Clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 26.0 Commencement of Possession. If Landlord shall be' unable to give possession of the Subleased Premises on the commencement date because the Subleased Premises shall not be ready for occupancy, Landlord shall not be subject to any liability for the failure to give possession on said. date. Under such circumstances, ur/less the delay is the fault of Tenant, the Rent shall not commence until the Premises are available for occupancy by Tenant, and no such failure to give possession on the commencement date shall in any way affect the validity of this Lease or the obligations of Tenant hereunder, nor shall same be construed in any way to extend the term. 27.0 Mechanics' Liens. Tenant shall not 'suffer or permit any mechanic's lien to be filed against the interest of Landlord or Tenant in the Subleased' Premises. If because of any act or omission-of Tenant, its employees, agents, contractors or subcontractors, any mechanic's lien, charge or order for the payment of money shall be filed against Landlord, or against all or any portion of the Subleased Premises, Tenant shall, at its own cost and expense, cause the same to be discharged of record within thirty (30) days after the filing thereof, and 'Tenant shall indemnify and save harmless Landlord against and form all costs, liabilities, suits, penalties, claims an'd demands, including reasonable attorney's fees, resulting therefrom. 6/11/97 - BLDG29.LSE 21 28.0 Security Deposit. Upon execution of the Sublease, Tenant agrees to pay to Landlord and to maintain hereafter a security deposit of seventy-five thousand dollars ($75,000). Upon the occurrence of any Event of Default by Tenant, Landlord may from time to time and without prejudice to any other remedy, use the security deposit to the extent necessary to make good any arrears of Base Rent or Additional Rent, or any other damages, injury, expense or liability caused to Landlord by Tenant. The remaining balance of such security shall be returned by Landlord to Tenant within a reasonable time after termination of this Sublease; provided, however,. Landlord shall not be obligated to return the remaining balance of such security deposit until all payments due from Tenant to Landlord shall have been made in full. The security deposit shall not be considered an advance payment of Rent or a measure of Landlord's damages in case of default by Tenant. In the event of the sale or transfer of Landlord's interest in the Subleased Premises, Landlord shall have the right to transfer the security deposit to the purchaser or transferee and upon such transfer Tenant. shall look only to the new landlord for the return of the security deposit and Landlord shall thereupon be released from all liability to Tenant for the return of or accounting for such security deposit. 29.0 . . 'S urrehder' ~d-Rest0rati0n2 29.1 Upon the expiration of the Sublease or its prior termination, Tenant shall quietly and peacefully remove itself and its property from the Subleased Premises and surrender the possession thereof to the Landlord. During such period prior to surrender, all obligations assumed by Tenant under this Sublease shall remain in full force and effect. 29.2 Restoration. Before the expiration 'or prior termination of th'e Lease, Tenant shall restore the Subleased Premises together with related personal property, and each item thereof, to the condition in which it was first received and used by the Tenant, or to such improved 'condition as may have resulted from any improvement made therein by the Tenant, subject hoWever to ordinary wear and tear and loss or damage for which the Tenant is not liable hereunder. '30.0 Right of Entry_. 30.1 Should Landlord determine Tenant to be deficient in its performance of its obligations under this Sublease, in addition to ali other available remedies, Landlord may, but shall not. be obliged to, enter upon Subleased Premises and correct Tenant's deficiencies using Landlord's forces, equipment and materials on Subleased Premises suitable for such purposes, or by employing an independent contractor. Landlord's cost so incurred, including direct and indirect overhead costs as determined by Agency, shall be reimbursed to Landlord by Tenant and/or its sureties within thirty (30) days of demand thereof. 30.2 Any officers and/or authorized employees of Landlord may enter upon Subleased Premises at any and all reasonable times for the purpose of determining whether or not Tenant is in compliance with the terms and conditions of this Sublease, or for any other purpose incidental to the rights of Landlord within the Subleased Premises.. 6/11/97 - BLDG29.LSE 30.3 Entry by the officers, employees, agents or independent contractors of Agency upon Subleased Premises for the purpose described in this paragraph 32 shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach of this Sublease. Lease. 31.0 Notices. Any notice required to be given under the terms of this Sublease or any law applicable. thereto must be either personally delivered or placed in a sealed enveloPe, postage prepaid, address to the person on whom it is to be served with return receipt requested, and deposited in the United States mail. Personal service shall be deemed complete upon delivery and service by mail shall be deemed 'complete upon receipt as reflected by the return receipt. The address to be used for any notice served by mail upon the parties shall be as follows: To Tenant: Walt Disney Pictures . Sherri Feldman Project Attorney Walt Disney Motion Picture Group 500 South Buena Vista Street Burbank, CA 91521 - (818) 560-7946 To Landlord: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager The parties may designate alternate contaCtS or addresses by giving notice as provided in this Paragraph 31.0. 32.0 Waiver of Trial by Jury_. It is mutually agreed by and between Landlord and Tenant that the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Sublease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Subleased Premises and any emergency statutory or any other statutory remedy. 6/11/97 - BLDG29.LSE 23 '33.0 Miscellaneous Taxes. Tenant shall pay, prior to delinquency, all taxes assessed against or levied upon its occupancy of the Subleased Premises, or upon the fixtures, furnishing, equipment and all other personal property of Tenant located in the Subleased Premises. In the event any or all of Tenant's fixtures, furnishings, equipment and other personal property, or Tenant's occupancy of the Subleased Premises, shall be assessed' and taxed with the property of Landlord, Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's fixtures, furnishings, equipment, personal property or occupancy. 34.0 Brokerage. Tenant represents and warrants that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other person brought about this transaction, and Tenant agrees to defend with counsel acceptable to Landlord, indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission pr other fo ~.rm of_ compensation _by yirme of having dealt with Tenant :-with regard to this leasing transaction. The provisions of this section shall survive "- ~he ...... termination of this Lease. 35.0 Use of Local Tustin Businesses. 35.1 Tenant agrees to use its best good faith business efforts to utili'ze local businesses, when available in providing catering of food and beverages to the Subleased Premises and when purchasing miscellaneous supplies. Landlord shall provide a list of such resources to Tenant. 35.2 Landlord acknowledges that the Tenant has the ultimate right to choose its vendors and that the Tenant's first priority will be to ensure that its needs are met to its own satisfaction. 36.0 Severability and Applicable Law. 36.1 Whenever possible, each provision of this Sublease shall be interpreted in such a manner as to be effective and valid under' applicable law, but if any provision of this Lease shall be invalid under the applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of that provision, or the remaining provisions of this Sublease. 36.2 This Sublease has been made and entered into in the State of California knd the laws of this State shall govern its validity and interpretation in the performance hereunder by the parties. 6/11/97 - BLDG29.LSE 24 37.0 Force Majeure: Except as otherwise specifically provided herein, and in the event either party shall be delayed or prevented from performance of any act required under this Sublease by reason of fire, earthquake, war, labor dispute, or other cause without fault and beyond control of the party so obligated, performance of such acts shall be excused for the period of time of the delay as determined, in writing, by Landlord. 38.0 · Special Stipulations. 38.1 No receipt of money by Landlord from Tenant after the termination of this Sublease or after the service of any notice or after the commencement of any suit.or after final judgment for possession of the Subleased Premises shall reinstate, continue or extend the term or affect any such notice, demand or suit or imply consent for any action for which Landlord's consent is required. 38.2 No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act or matter which is not .expressly required to be undertaken by Landlord shall be conStrued to be a waiver of Landlord's rights or to represent any agreement by Landlord to undertake or perform such. act or matter thereafter. 38.3 All of the covenants of Tenant hereunder shall be deemed and construed to be "conditions" as well as "covenants" as though the words specifically expreSsing or importing covenants and conditions were used in such separate instance. 38.4 Tenant agrees that, upon receiving a written request from Landlord, Tenant will within ten (10) days. deliver a copy of .this Sublease, or, if Landlord so requests, a Memorandum of this Lease, in recordable form to Landlord. Tenant shall not record this Sublease or a Memorandum thereof, without the prior written consent of Landlord. 38.5 Neither party has made any representations or covenants, eXcept as contained herein, or in some further writing signed by the party making such representation or promise. All prior communications or understandings~ 0ral or written, between Landlord and Tenant are superseded by this Lease and this Sublease contains the entire agreement between the parties hereto with respect to the subject matter of this Subleased Lease, and shall not be amended, modified or supplemented unless by agreement in writing, signed by both parties. 3'8.6 Tenant shall look solely to the Subleased Premises and Rents derived therefrom for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Eandlord shall be subjected 'to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies or with respect to this Sublease, the relationship of landlord and tenant thereunder or Tenant's use and occupancy of the Subleased Premises. 6/11/97 - BLDG29.LSE 25 38.7 This Sublease may be executed in one or more counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall constitute one and the same instrument. This Sublease shall become binding when ' any one or more counterparts hereof, individually or taken together, shall bear the signatures of Landlord and Tenant. 38.8 Each provision hereof shall extend to and shall, as the case may require, bind and insure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and assigns in the'event this Sublease has been assigned with the express, written consent of Landlord. 38.9 Time is of the essence of every provision of this Sublease. 38.10 The title and headings and table of contents of this Sublease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the pa/ties as otherwise set forth herein. The term "Landlord" and the term "Tenant" as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective' p..arties, except as to any required approvals, consents or amendments, modifiCations or --~upPlements'here-under; when sUCh terms shall 6nly mean-the 'Parties 0riginall~?-named h-erein-~ 39.0 Tenant Rights to All Photography. In connection with the motion picture, Tenant may refer to the Subleased Premises thereof by any fictitious name and may attribute any fictitious events as occurring on the Subleased Premises. Landlord irrevocable grants to Tenant and Tenant's successors and assigns the right, in perpetuity, throughout the universe, to duplicate and re-create all or a portion of the Subleased Premises, to alter such duplicates and re-creations, and to use such duplicates and re-creation in any media and/or manner now know or hereafter devised in connection with the motion picture, including without limitation sequels thereto, merchandising, theme parks and studio tours, and in connection with publicity, promotion and/or advertising for nay or all of the foregoing. All .rights of every kind in and to all still pictures, motion picture, videotapes, photographs and sound recordings made hereunder shall be and remain veSted in Tenant and its successors, assigns and licenses, and neither Landlord nor any tenant, or other party now or hereafter having an interest in said Subleased Premises, shall have any right of action against photographs and/or sound recordings, whether or not such use is, or may be claimed to be, defamatory, untrue or censorable in nature. 6/11/97 - BLDG29.LSE 26 43.0 Conclusion. IN WITNESS WHEREOF, Landlord has, by action of the City of Tustin City Council, authorized this Sublease to be executed for and on behalf of the City of Tustin by the Assistant City Manager or City Manager, and Tenant has caused the same to be executed by its duly authorized officer on'the date first above written. "LANDLORD" City of Tustin Dated: WILLIAM A. HUSTON, City Manager/or CHRISTINE A. SHINGLETON, Assistant City Manager Attest: PAMELA STOKER City Clerk Approved as to Form: LOIS E. JEFFREY City Attorney "TENANT" Date: CAS:kd~ncas~agrecmts\bldg29.1s~ By: Nallle Title Company 6/11/97 - BLDG29.LSE 27 EXHIBIT "A" The Subleased Premises 6/11/97 - BLDG29.LSE EXHIBIT "B" Prime.Lease Between the City of Tustin 'and United States of.America 6/11/97 - BLDG29.LSE EXHIBIT City's Form of Certificate of Insurance 6/11/97 - BLDG29.LSE 10 11 12 13 14 15 16 17 I18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 97-45' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CERTIFYING THE FINAL NEGATIVE DECLARATION AS ADEQUATE FOR THE LEASE AND SUBLEASE OF BUILDING 29, MCAS TUSTIN, INCLUDING REQUIRED FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The City Council of the City of Tusti'n does hereby resolve as follows: I. The City Council finds and determines as follows: ae The request to approve a Lease and Sublease for Building 29, Marine Corps Air Station (MCAS), Tustin is considered a "project" pursuant to the terms of the California Environmental Quality Act. B. A Negative Declaration has been prepared for this project and has been distributed for public review. II. A Final Negative' Declaration has been completed in compliance with CEQA and state guidelines. The City Council, having final approval authority over the Lease and Sublease of Building 29, MCAS Tustin, has received and considered the information contained in the Negative Declaration, prior to approving the proposed project, and found that it' adequately discussed the environmental effects of the proposed project. On the basis of the initial study and comments received during the public review' process, the city Council has found that the proposed project could have a significant effect on the environment. However, there will not be a significant effect in this case because mitigation measures identified in the Negative Declaration and Initial StUdy (Exhibit A) have been incorPorated into the project which mitigate any potential significant environmental effects to a point where clearly no significant effect would occur and are adopted as findings and conditions of City Council Resolution No. 97-45. PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on the 2nd day of June, 1997. JEFFERY M. THOMAS Mayor Pamela Stoker City Clerk COMMUNITY DEVELOPMENT DEPARTMENT 300 Centennial Way, Tustin, CA 92780 (714)573-3105 INITIAL STUDY Ae BACKGROUND LEASE AND SUBLEASE OF FACILITIES AND PROPERTY FOR BUILDING 29 (BLIMP',. Project Title: HANGAR), MARINE CORPS AiR STATION, TUSTIN Lead Agency: City of Tustin 3.00 Centennial Way Tustir~ California 92780 . . Lead Agency Contact Person: DANA OGDON Phone: (714) 573-3116 Project Location:.. BUILDING 29 (BLIMP HANGAR), MCAS TUSTIN, CALIFORNIA Projec~_Sponso.r's Name and Address: CITY OF TUSTIN 300 CENTENNIAL WAY ' TUSTIN, CA 92780 GeneralPlanDesignation: PUBLIC/INSTITUTIONAL, MILITARY - Zoning Designation: PUBLIC AND INSTITUTIONAL Pr~ectDescription: THE PROJECT WOULD AUTHORIZE THE EXECUTION OF A LEASE OF BUILDING 29 BETWEEN THE UNITED STATES MARINE CORPS AND CITY OF TUSTIN AND A SUBLEASE OF THE PROPERTY BY THE CITY OF TUSTIN FoR.puRPOSES WHICH ARE DESCRIBED WITHIN THE APPROVED REUSE PLAN FOR MCAS TUSTIN. Surrounding Uses: North MILITARY East MILITARY South MILITARY \Vest MILITARY Other public agencies whose approval is required: Orange CountY Fire Authority C] CityoflrVine Orange County Health Care Agency I~1 City of Santa Ana South Coast Air Quality Management 1~1 Orange County EMA District ' Other STATE OFFICE OF HISTORIC PRESERVATION 15NVIf{OINMEN'I'AI~ IcACTORS I'O'I'I';NTIAI,I.V AIrlrECTEI) The environmental factors checked below would be potentially afFected by this project, invoMng at least one impact that is a "Potenti'ally significant Impact" as indicated by the checklist in Section D below. 1~] Land'USe and Planning ID Population and Housing 12 Geological Problems IZl Water ID Ak Quality IZ] Transportation & Circulation ID Biological Resources ID Energy and'lVfi, neral Resources [Z] Hazards .IZ] Noise . ID Public Services 12 Utilities and-Service Systems [Z] Aesthetics 12 ' Cultural Resources 12 Recreation [Z] Mandatory Findings of Signffi~ce C. DETERMINATION: ~- On the basis of this initial'evaluafioni- '-:-. 'i~ ........ ...... f .... ~ .....:: ........... i J. '_ .... i :-. .... '__ · 1~ I find th~r_ the proi>osed project COULD NOT have a significant effect on the' environment, and a NEGATM DECLAR-'sff'ION will be prepared. .. . · . 1~ I find ttzar although the proposed project could have a significant effect on the environment, there will not be a sign/.ficant effec-~ in this case because the mitigatiOn measures described onan attai::hed sheets have been added to the project. A NEGAIIVE DECLARATION will be prepared. ' . [~ I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL 12vfPACT REPORT is required. ' - . . · [~1 I find that the proposed project MAY have a significant effect(s) on the environment, but at lea.stone effect 1) has been adequately analyv, ed in an earlier document pursuant to applicable legal standards, and 2) has been addressed bY mitigation measures based on the earlier analysis as descfi~ on attached shee/.s, if the effect is a "Potentiall~, Significant Impact" or "Potentially Significant Unless Mitigated." An ENVIRO~AL IMPACT REPORT is required, but it must analg~v,e only the effects that remain to be addressed. ' ID I find that although the proposed project could have a significant effect on the environment, there WILL NOT be a significant effect in this case because all potentially significant effects 1) have been analyzed adequately ir~an earlier ELR pursuant to applicable standards, and 2) have been avoided or mitigated pursuant to that e~flier ElK including rex4sions or mitigation measures that are imposed upon the proposed project. . · 12 I find that although the proposed project could have a significant effect on the environment, there WILL NOT be a significant effect in this case because all potentially significant effects 1) have been analyzed adequately in an earlier NEGATIVE DECLARATION pursuant to applicable standards, and 2) have been avoided or mitigated pursuant to. that earlier NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project. )~ ~ .. MAY 1, 1997 Signature kJ - Date DANA 0GDON SEN~'0R PLANNER Printed Name Title I). 1'~ N V l I{ O N M E N'I'A I. [~] Earlier analyses used: IM I'AC'I'S- Available for review at: City of Tustin Community Development Department 1. LAND USE & PLANNING - Would the proposal: a) Conflict with general plan designation o//zoning7 b) Conflict with applicable environmental plans or policies adopted by agencies with jurisdiction ~rver the project? c) Be incompatible with existing land uses in the vicinity? d) Affect agricultural resources or operations? e) Disrupt Or divide the physical arrangement of an established community (incl.udi.'ng a Iow-income or minority community)? · 2. POPUI.,ATION & HOUSING- Fr'ould the proposal: ............. a) _ Cumulatively exceed official regional or local population projectionk? b) Induce substantial groxith in an area either directly or · indirectly (e.g., through projects in an undeveloped area or ex'tension of major infrastructure)? c) Displace exLqting housing, especially affordable housing? 3. GEOLOGIC PROBLEMS - IFouldt. he proposal result in or expose people to potential impacts involving:. a) Fault rupture? b) 'Seismic ground shaking? ' c) Seismic ground failure, including liquefaction? d) Seiche, tsunami, or volcanic hazard? e) Landslides or mudflows? 0 Erosion, changes in topography or unstable ~il conditions frOm excavation, grading, or fill? g) Subsidence of land? h) Expansive soils7 i) Unique geologic or physical features? - 4. WATER - tIbuld the proposal result in: a) Changes in absorption rates, drainage pa[terns, orthe rate and amount of surface runofI7. b) Exposure. of people or property, to water related hazards such as flooding? . c) Discharge into surface waters or other alteration of surface water quality (e.g., temperature, dissoh,cd oxygen or turbidity)? - d) Changes in the amount ofsurfacc water in any water body'? e) Changes in currents, or the course or direction of water lliOVelileni$? Potentially Significant Impact Potentially Xigni ficant. Mitigation Incorporated Less than Significant Impact N° Impact E] E] 0 0 E] E] 0 E] E] 0 0 0 0 0 0 0 0 1) Change in the quantity ofground waters, either through direct additions or withdrawals, or through interception of an aquifer by cuts or excavations or through substantial loss of groundwater recharge capability? g) Altered dir~ction or rate of flow of groundwater7 h) Impacts to groundwater quality? : i) Substantial reduction in the mount of~roundwater otherwLse available for public water sflpplies? . 5. AIR QUALITY - g~ould the proposal: · a) Violate any air quality standard Or contribute to an existing or projected htr quality violation? b) Expose. sensitive receptors to pollutants? c) Alter air movement, moisture, or temperature, or cause any change in climate7 d) Create objectionable odors? TRANSPORTATION & C[RCIJLATION- IVouldth~ proposal result in: a) Increased veh/cle trips or traffic congestion? b) HaT~rds to sa.fety from design features (e.g., sharp curves or .dangerous intersections) or inbompafible uses (e.g., farm equipment)? . · c) Inadequate emergency i~ceess or access to nearby uses? d) Insufficient parking capacity onsite or offsite? e) Hazards or barriers for pedestrians or bics,clists? f) Conflicts x~4th adopted policies supporting alternative translyartation (e.g. bus turnouts, bicycle racks)7 g) Rail, waterborne or air traffic impacts? B IO LO GICAL RESOuRcEs - Would the proposal result in impacts to: ' a) Endangered, ttu'eatened or rare species or their'habitats (including but not limited to plants, risk, insects, animals, and birds7 b) Locally designated species (e:g., heritage trees)7 c) Locally designated natural communities (e.g., oak forest, coastal habitat, etc.).'? d) Wetland habitat (e.g., marsh, riparian, and vernal pool)7 e) Wildlife dispersal or migration corridors? ENERGY & MINERAL RESOURCES - IVouldthe pt:oposal: a) Conflict with adopted energy consen'ation plans? b) Use nonrenewhble resources in a wasteful and inefficient manner? c) Result in thc loss of availability ora known mineral resource tidal wot,Id be of fulure value to thc region? l'ol<:ntiali, i, .¥iRni ficont Impact L¢&v t/tart ,.qignij~cant Impact No Impact E] E] 0 ~ E] 0 0 ~ 0 E] 0 E] 0 0 E] O~ 0 E] 0 ~ E] El E] O~ E] El E] O~ E] E] E] E] E] 0 o o 0 0 E] 0 O~ 0 0 0 O~ 0 0 0 E] 0 0 l'o[¢nlially ltnpac! 9. IIAZARDS - Would the proposal involve: a) A risk of accidental explosion or release of hazardous substances (including, but not limited to, oil, pesticides, chemicals, or radiation)? b) Possible interference with emergency r ,e~ponse plan or emerg.ency evacuation plan? · .: c) The creation of any health hazard or potential health hazard? - ., d) Exposure of people to existing sources of potential health hazards? e) Increased fire hazardin areas with'flammable brush, grass, or trees? I0. NOISE - Would the proposal result in: .0 a) Increases in existing noise levels? Exposur? ?f p~ople t° severe noise levels?_ I1. PUBLIC SERVICES - Would the proposal have an effect upon. or result in a need for new or altered government services in any of the following areas: 12. a) Fire protection? b) police protection? c) School. s? ' ":: d) Maintenance of public facilities, including roads? e) Other government services7 U:r[LITIES & SERVICE SYSTEMS - Would the proposal result in a need for new ~ystems or supplies, or substantial alterations to the following utilities: a) Power or natural gas? b) Commtmicafions ~'stems? c) Local or regional water treatment or distr/bution facilities? d) Sewer or septic tanks? e) Storm water drainage? O Solid waste disposal? g) Local or regional, water supplies? A EST[-{ ETICS - tfbuld the' proposal: 0 0 a) .Affect a scenic vista or scenic highway? b) Have a demonstrable negative aesthetic effect? c) Create light or glare? 0 l'o&,ttlitdlv Unlesx A4itigalion Incorporated Lexx t]tat~ &'gnificant No Impac! E] '. E] E] E] E] E] .El E] C~ E] E] 0 0 15. I4. CULTURAL RESOURCES - Would the proposal-. a) Disturb paleontological xesourccs? b) Disturb archaeological re~urces? c) Have the potential to cause a physical change which would affect unique ethnic cultural'values? d) Restrict existing religious or sacred use/within the potential impact area? · RECREATION - Would the proposal: l~olentially .S'ignificant Impact )'olcnlially Unless Mitigation Incorporated Le.v.v than Significant Impact No/.tpact E] 0 [3 m 0 E] [3 ~1 a) Increase the demand for neighborhood or regional parks or other recreational facilities? b) Affect existing recxeafional opportunities.* 16. MANDATORY FINDINGS OF SIGNIFICANCE O [23 o o m 0 0 .~ a) b) c) Does the project have the potential to degrade the quality of the envixonment, substantially reduce'the habitat of a fish or wild/ife species, cause a fish or xdldlife population to drop be. low self-sustaining levels, threaten to eliminate a plant or animal commtmi~, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? Does the project hax'e the potential to achieve short-term, to the disadvantage of long-term, environmental goals? Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively co~iderable" means that the incremental effects of a project are considerable when viewed in connection with. the effects of past projects, the effects of other current projects, and the effects of probable future projects). [3 [3 Does the project have environmental effects which u411 cause substantial adverse effects on human beings, either directly or indirectly? . E] [3 [3 E] 0 E] 0 E] O0 EVALUATION OF ENVIRONMENTAL IMPACTS Please refer to Attachment A for an evaluation of the environmental impacts identified in Section D above. ' ' INITSTUD. PM5 370.2A ~ ATTACHMENT A EVALUATION OF ENVIRONMENTAL IMPACTS 1. LEASE OF FACILITIES AND PROPERTY FOR BUILDING 29 (BLIMP HANGAR), MARINE CORPS AIR STATION, TUSTIN BETWEEN THE CITY OF TUSTIN AND THE' UNITED STATES OF AMERICA (GOVERNMENT). 2. SUBLEASE OF THE PROPERTY AND FACILITIES BY THE CITY OF TUSTIN TO VARIOUS PARTIES. SUMMARY Early leasing of property .at a Base Realignment and Closure Act (BRAC) installation to a Local Redevelopment Authority (LRA) is permitted by federal law, will spur rapid economic recovery and job creation, and can reduce the Mili.tary Department's caretaker costs before the ultimate disposal of the installation property. The United States Marine Corps has now vacated Building 29 (Blimp Hangar) at MCAS Tustin and they are permitted to lease these facilities to the LRA. An interim lease (Prime Lease) has been. prepared for execution between the City of Tustin and the federal government (G0vemment)-which would-permit use of the property and .facilities.-for filming, filming production, ...... storage and office space; and the City of Tustin intends to sublease the premises leased from the Government to various parties for purposes which are described in the Prime Lease and authorized by the Reuse Plan for MCAS Tustin. :- The Marine Corps has prepared federal environmental documents required under the National Environmental Policy ACt (NEPA) to support a lease of the facilities and property...However, it has been determined that the execution of a lease is also defined as. a project under the California Environmental Quality Act (CEQA) Section 15378(a)(3). Pursuant to CEQA, an Initial Study has been prepared which shows that there is no substantial evidence that the project may have a significant effect on the environment. Therefore a Negative Declaration has subsequently been prepared, and will be considered and adopted prior to City of Tustin City Council action on this item. The Following information is prepared to summarize the justification for finding that there' was no substantial evidence that the project may have a significant effect on the environment. BACKGROUND MCAS Tustin is approximately 1600 acres in size, is located in south Tustin and is bordered by the cities of Santa Ana to the west and Irvine to the south and east. The project site encompasses a 298,200 square foot Lighter-than-Air Blimp Hangar and accessory buildings and facilities located within a south- central portion of the MCAS, Tustin. The blimp hangar site has historically been used by the military since the construction of the building in 1942. Since 1952, the blimp hangar site has been utilized as a aircraft hangar supporting Marine helicopter squadrons assigned to MCAS Tustin. The building was vacated by the Marines approximately one year ago when squadrons assigned to the hangar migrated away from the installation in compliance with the BP, AC determination to close MCAS Tustin by JulY 1999. Early leasing of property at a Base Realignment and Closure Act (BRAC) installation to a Local Redevelopment Authority (LRA) is permitted by federal law, will spur rapid economic recovery and job creation, and can reduce the Military Department's caretaker costs before the ultimate disposal of · Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 2 the installation property. The "proposed project" evaluated below is the lease of facilities and property for Building 29 between the federal government and the City of Tustin and the sublease of the facilities and property by the City of Tustin to various parties. Neither the military nor the City of Tustin has made or intends to make a commitment to any future use or conveyance of title to the property to' any party upon the property's disposal. 1. LAND USE & PLANNING Items a through e - "No Impact".: The subject property will continue to be owned and maintained by the Marine Corps. In compliance with existing BRAC law, the community may work cooperatively to' lease surplus buildings and facilities for interim (temporary) uses to generate revenue to offset operations and maintenance costs associated with the upkeep of those buildings. The City's intent is to sublease the buildings and facilities associated with Building 29 for on a short term basis until closure or until the property can be disposed of by the military. Pursuant to BKAC law, uSes permitted for interim lease must be approved by the Local Redevelopment Authority (LRA) designated by the Department of Defense (DOD). As prescribed by federal law and Department of Defense policy, future use of the property will be consistent with the approved Reuse Plan for MCAS Tustin. Because the property is held in ownership by the federal government, and the lease and sublease of the property for interim uses must be approved by the military, all land uses occurring at the site as a result of this lease or sublease would continue to be related to the overall military use of the property. Consequently, the use of the property would still be considered consistent with the existing General Plan and Zoning designated for the property (Public/InstitutiOnal, Military). In addition, the proposed project would not be in conflict with applicable environmental plans or policies adopted by agencies with jurisdiction over the project; neither would it be incompatible with existing land uses in the vicinity; nor would it affect agricultural resources or operations; nor would the project disrupt or divide the physical arrangement of an established community. Sources: MCAS Tustin Master Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Reuse Plan/Specific Plan, October 1996 Field observations Department of Defense. Base Reuse Implementation ~ Manual MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None required. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property.for Building 29, MCAS Tustin Page 3 2. POPULATION & HOUSING Items a through c - "No Impact".: The proposed project is on a site developed as a military installation. The proposed lease and sublease would not result in any direct increase in population in that no additional dwelling units would be created. This small scale project would be designed to meet the needs of military to generate revenue to offset operations and maintenance costs associated with a closing military installation.. Because of the short-term nature of the project, it is anticipated that the project would not induce substantial growth in the area either directly or indirectly; nor would it cumulatively exceed official regional or local population projections; nor would it displace existing housing, especially affordable housing. Sources: MCAS Tustin Master Plan MCAS Tustin Reuse PlarffSpecific Plan; October 1996 Field observations Department of Defense Base Reuse Implementation Manual City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None Required. 3. GEOLOGICAL PROBLEMS- Items a through i - "No Impact": The subject site is developed with a blimp hangar which will remain on the existing site. The site is relatively flat and has previously been graded by the military. It is not anticipated that any grading activities would occur as a result of this project. Permanent, new structures would not be permitted without additional environmental consideration and mitigation as required. The proposed would not result in nor expose people to potential impacts involving fault rupture, seismic ground shaking, seismic ground failure, including liquefaction; seiche, tsunami, or volcanic hazard; landslides or mudflows; erosion, changes in topography or unstable soil conditions from excavation, grading, or fill; subsidence of land; expansive soils, or unique geologic or physical features. Sources: Field Observations City of Tustin General Plan/General Plan EIR MCAS Tustin Master Plan. MCAS Tustin Reuse plan/Specific Plan, October 1996 MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None Required. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 4 -, 4. WATER . Items a through i - "No Impact": The subject site was previously graded and developed as a military air station and is not located near any standing or moving bodies of water. As a result, the amount Of surface water and direction of water movement will not change. In addition, the surface areas of the project will continue to drain into the base's existing storm drain system and will not sUbstantially contribute to the drainage flow. The proposed project, would not result in changes in absorption rates, drainage patterns, or the rate and amount of surface runoff; exposure of people or property to water' related hazards such as flooding; discharge into surface waters or other alteration of surface water quality; changes in the amount of surface, water in any water body; or changes in currents;-or the course or-direction of water movements; change in the quantity of ground waters, either through direct additions or withdrawals, or through interception of an aquifer by cuts or excavations or through substantial loss of groundwater .recharge capability; alter direction or rate of flow of groundwater; impacts to groundwater quality; or result in a substantial reduction in the amount of groundwater otherwise available for public water supplies. Sourcel Field .Observations City of Tustin General Plan/General Plan EIR MCAS Tustin Master Plan MCAS Tustin Reuse Plan/Specific Plan, October 1996 MCAS Tustin Environmental Setting Report . Mitigation/Monitorihg Required: None Required. AIR QUALITY Items a, c and d - "No Impacts": The proposed project is a lease and sublease for interim (temporary) use of a blimp hangar at closing MCAS Tustin. The project would not result in a violation of any air quality standard or contribute to an existing or projected air qUality violation. Neither would it alter air movement, moisture, or temperature, or cause any change in climate. Item b - "Less than Significant Impact": . The proposed project permits the sublease of the property for use in support of the making of motion pictures. Consequently, it is possible that the production of movies and television films could result in the use of pyrotechnics which would result in the creation of smoke or vapors which Could be considered as "objectionable odors." All such activities, if they occur, would be monitored and regulated through permits required by the Marine Corps, Orange County Fire Authority and South Coast Air Quality Management District (SCAQMD). Conditions of approval will be required for any project Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 5 requiring construction activities described above so as to minimize construction activity dust generated as part Of this project. Sources: Field Observations City of Tustin General Plan/General Plan EIR MCAS Tustin Master Plan MCAS Tustin Reuse Plan/Specific Plan, October 1996 MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: '--1}' ...... Obtain pfi;~'-SC-AQMD' approval for any activity which could resuIt' in'-' objectionable odors. . Obtain O.C. Fire Authority approval prior to igniting any materials at the leased site. 6. TRANSPORTATION & CIRCULATION Items a through g - "No Impact'!: The proPosed project would occur at a fully oPerational Air Station. However, Marine Corps activities at the base have dramatically been reduced as helicopter squadrons and troops have begun migrating off-base. At the time of the original announcement of closure in 1991, the base supported approximately 4,000 s'ervicemen and over 300 civilian employees. Since that time, approximately 9 squadrons of the original 12 have relocated off-base. The Blimp Hangar is now vacant. Interim use of the buildings and facilities Would not cause an increase in vehicle trips or traffic congestion above that experienced when the base had a full complement of Marines. There will continue to be adequate emergency access and parking on-site. There will be no rail, waterborne or air traffic impacts caused by the proposed project. In addition, the proposed project would not result in hazards to safety from design features or incompatible uses; insufficient parking capacity onsite or offsite; hazards or pedestrians or bicyclists; conflicts with adopted policies supporting alternative transportation. Sources: Field Observations City of Tustin General Plan/General Plan EIR MCAS Tustin Master Plan MCAS Tustin Reuse Plan/Specific Plan, October 1996 MCAS Tustin Environmental Setting Report · Mitigation/Monitoring Required: None-Required. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 6 7. BIOLOGICAL RESOURCES Items a through e - "No Impact": The lease site is located within an urban area and is developed with a Marine Corps (helicopter) Air Station. The lease site is fully developed with a blimp hangar and is not a habitat for any endangered, rare or threatened species of plant or animal life. There would be no negative impact on any wildlife dispersal or migration corridors; wetland habitat; nor locally designated natural communities or locall3~ designated species (e.g., heritage trees). The proposed project would not likely introduce landscaping nor modify previously unaltered or ungraded areas of the site. SOurce: ...... Field. QbserVatjons Proposed Site Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report Miti.~ation/Monitorin.~ Required: None Required. 8. ENERGY & MINERAL RESOURCES Items a through c - "No Impact": The 'proposed project will not conflict with any adopted energy conservation Plans; use nonrenewable resources in a wasteful and inefficient manner; nor Will it'result in the loss of availability of known mineral resource that would be of future value to the region. Sources: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None Required. Items a through e - "No Impact":. The proposed interim use of the blimp hangar would not create conditions that negatively affect human health. All toxic contamination caused by the use of the building as a helicopter hangar will be cleaned from the structure prior to occupancy. While there will continue to be a plume of contaminants contained within the 'groundwater below the blimp hangar site, none of those contaminants can directly effect occupants of the site unless excavation of soil were to occur which would expose persons to the contaminated groundwater. Since the lease and sublease does not allow such activities to occur, the proposed project would not involve a release of significant hazardous substances or a risk of accidental Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 7 10. 11. explosion; interfere with any emergency response plan or emergency evacuation plan, create any health hazard or potential health liazard, expose people to existing sources of potential health hazards, or increase the fire hazard in areas with flammable brush, grass or trees. SoUrces: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report NOISE Mitigation/Monitoring Required: None Required. Items a through b - "No Impact": The proposed project replaces Marine helicopter operations with interim uses such as motion picture production and would not generate increases in existing noise levels experienced at the base when in full operation by the Marine Corps. In addition, because the noise generated by Marine helicopters continues to occur outside of and away from the blimp hangar, it is expected that distance and the blimp's building materials will continue to prevent exposing people to severe noise levels. No activity associated with the project will expose people to severe noise levels Sources: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR · MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None Required. PUBLIC SERVICES Items a through d - "No 'Impact": It is not expected that the Proposed project would create significant demands for additional fire' or police protection, nor increased service requirements on schools, or maintenance of public facilities as long as services are continued to be provided' by the military. Costs for such services will be paid for by the tenant of the sublease. Because the sublease replaces a previous Marine occupancy of the blimp hangar site, the demand for public services generated by the tenant would be less than that required by' the military during their previous tenancy at the site. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 8 Item e - "Less than Significant Impact": The execution of a lease between the government, the City and a sub-lessee could require staff support by City staff. All direct and indirect costs associated with the provision of this support would be offset directly by rent collected as stipulated within the rent provisions of the lease. Sources: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report ~ - -: ............................... Mitigati6n/Monitoring Required:'- None Required: 12. UTILITIES & SERVICE SYSTEMS Items a through g - "No Impact": The project site is located within an existing blimp hangar and has been previously served with all necessary utilities including power, natural gas, telecommunications, sanitary sewer, storm drain, solid waste, and water which may be required for the project. The proposed project would not require the need for additional utilities to serve the site. However, the sublease and lease agreements require the tenant to install utility metering devices prior to occupancy so that actual costs associated with the interim use of the blimp hangar can be accurately identified and offset. In addition, the proposed project would not result in a need for new systems or supplies, or substantial alterations to utilities such as power or natural gas; communications systems; local or regional water treatment or distribution facilities; sewer or septic tanks; storm water drainage; solid waste disposal; and local or regional water supplies. SoUrces: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR · MCAS Tustin Environmental Setting Report 'Mitigation/Monitoring Required: None Required. 1'3. AESTHETICS Items a through b - "No Impact": The proposed project is not located on a scenic highway nor will it affect a scenic vista. Other than parking and some general staging activities (preparation), it is anticipated that nearly all activities associated with the proposed project will occur inside of the blimp hangar.. The blimp hangar will continue to be highly visible from any of their existing public vantage points. Consequently, the proposed project would not have a demonstrable negative aesthetic effect. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 9 Item c -. "Less than Significant Impact": Historically, the Marine Corps has utilized the blimp hangar at night and .therefore has used the building's existing lighting system to illuminate these activities. The execution of a lease could result in some additional lighting of outside parking and staging areas or within the hangar itself. Because of the significant distance between the blimp hangar and other uses (both military and civilian), the possible creation of additional light and glare would be a less than significant impact. Sources: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR ........................... '-~ MCAS Tustin Environmental -Setting Report Mitigation/Monitoring Required: None Required. 14. CULTURAL RESOURCES Items a, b and d - "No Impact": The proposed project utilizes an existing blimp hangar. Consequently, the grounds surrounding the site have previously been. diSturbed since the time of its original construction in 1942. Also, it is anticipated that all lease activities will be to utilize the building and grounds in an "as-is" condition and construction of permanent structures will not be permitted. The State Office of Historic Preservation has determined that no paleontological or archaeological resources exist at MCAS Tustin. Consequently, the proposal will not disturb paleontological or archaeological resources. In addition, because no religious or sacred uses currently exist within the potential impact area, no restriction on these activities would be incurred through the implementation of the proposed project. Item c'- "LeSs than Significant Impact": The blimp hangar structure itself.is currently listed on the National Register of Historic Places. As such, activities which occur within the structure must currently be reviewed and approved by the State Office of Historic Preservation (OHP) through a Section 106 (National Preservation Act) consultation process only. Because the proposed project clearly poses no significant impact to the resource, formal processing of the Section 106 process is not required. The subject pr6perty is not located within the City's Cultural Resources Overlay District. The OHP has been consulted by the Marine cOrps and is expected to concur that with the Marine Corps NEPA determination that no significant environmental impact would occur as a result of the proposed project. Source: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Environmental Setting Report National Preservation Act (Section 106) MitigatiOn/Monitoring Required: None Required. Attachment A - Evaluation of Environmental Impacts Lease and Sublease of Facilities and Property for Building 29, MCAS Tustin Page 10 15. RECREATION 16. Items a and b - "No Impact": Since this project is an interim use of an existing blimp hangar, the requirement for nearby neighborhood or regional parks or other recreational facilities' would not increase above that demand caused by the base when it was fully complimented. In addition, the proposed project will not affect existing recreational opportunities in the community. Sources: Field Observations Proposed Site Plan City of Tustin General Plan/General Plan EIR ..... MCAS Tustin Environmental Setting Report. · Mitigotion/Monitoring Required: None Required. MANDATORY FINDINGS OF SIGNIFICANCE Items a through d - "No Impact": The project does not have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or. wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory. In addition, the proposed, project does not have the potential to achieve short-term, to the disadvantage of long-term, environmental goals. Also, the proposed project does not have impacts that are individually limi.ted, but cumulatively considerable. Neither does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly. Source: · MCAS Tustin Master Plan City of Tustin General Plan/General Plan EIR MCAS Tustin Reuse Plan/Specific Plan, October 1996 Field observations Department of Defense Base Reuse Implementation Manual MCAS Tustin Environmental Setting Report Mitigation/Monitoring Required: None Required. DO:kmcasleas.env