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HomeMy WebLinkAboutNB 3 LEASE OF PROPERTY 6-2-86A III A NEW BUSINESS _. N0._3 . TO: FROM: SU BJ ECT: NILLIJU~ HUSTON, CITY FIANAGER PUBLIC WORKS D~PARTlqENT/ENGINEERING DIVISION LEASE OF CITY PROPERTY AT 1810 N. OLD TUSTIN AVENUE, SANTA ANA RECOMMENDATION: Request the Tustin City Council, at their regular meeting of June 2, 1986, to authorize the City Clerk to advertise the notice of intention to lease City property and authorize staff to mail requests for proposal to lease property to individuals/businesses having expressed interest in leasing property at 1810 N. Old Tustin Avenue, Santa Ana. BACKGROUND: The City of Tustin owns the property at 1810 N. Old Tustin Avenue, Santa Ana. This site houses a water well owned by the City. When the City bought the Tustin Water Works System, a portion of this property was being utilized by an adjacent business for additional parking (approximately 10 spaces). An agreement for use existed between Tustin Water Works and the business but no revenue was generated from the lease of the property nor was Tustin Water Works umbrelled from liability. Some time ago, the owner of the business adjacent to this property, Dan Koby, approached the City with the proposal to have permanent use of this property in exchange for upkeep of said property. Since the proposal could be construed as a gift of City property, an appraisal of the property was made by an independent consulting firm, Donahue and Company, Inc., to establish a lease rate. The consultant determined $9,630 per year as a market value lease rate. To protect the interest of the City, City Attorney Rourke drafted the attached Lease Agreement. Because the Lease Agreement is restrictive to the lessor, staff felt that something less than the appraised rate would be equitable. Also, in the interest of ethical business practices, staff felt requesting proposals for the lease of this property was in the best interest of the City. If Council approves leasing this property, staff will proceed with obtaining proposals for said lease. If Council should not approve the lease of this property, staff requests Council to direct this property fenced to prohibit access and/or utilization of this property by anyone other than authorized City personnel for City business. Monda Buckley - -- Administrative Assistant Director of Public Works/City Engineer MB/BL/jm Attachment This Lease Agreement (hereinafter, "Lease") by and between the City of Tustin (hereinafter, "City") and , a [description of entity] (hereinafter, "Lessee"). 1. City hereby leases to Lessee the premises (hereinafter, the "Site") more specifically defined herein, consisting of a .strip of land, approximately 40' wide and 100' deep, located between Tustin Avenue and Old Tustin Avenue in the City of Santa Ana. The legal description for the Site and a map thereof are attached hereto as Exhibit "A" and Exhibit "B", respectively, and are incorporated herein by this reference. The Site, at present,. is paved, except for the area designated as on Exhibit "B" in which the City operates and maintains a well site (hereinafter, including the well and its surrounding area and fence, the "Well"). The Site (and this Lease) specifically excludes the Well. 2. Any improvements existing on the Site shall remain City's property, but Lessee may use, demolish, remove, or other- wise dispose of them when the new parking facilities as contem- plated herein are constructed. 3. The term of this Lease is five years, beginning , and ending at midnight on ..... , 19 , unless further extended or sooner terminated as provided for herein. Lessee may extend the original term of this Lease for up to four additional periods of five years each, subject to all the provisions of this Lease, by notifying the City of Lessee's intent to so exercise the option at least 60 days before the end of the then current term. Failure to exercise the option for .any period shall nul- lify the option fOr all subsequent periods and shall constitute notice to City of termination of the Lease at the expiration of the period. City may terminate this Lease at the completion of the initial five-year term or any extension thereof by so noti- fying Lessee at least 90 days before the end of the term. Either party hereto may terminate this Lease prior to the completion of the initial five-year term or any extension thereof upon 90 days' notice. 4. set: Lessee shall pay without abatement, deduction or off- a. $ to City as annual rent, payable in advance in five (5) equal annual installments of $ each on' the first day of each year, beginning , 198_. b. $1,000.00 at or before the commencement of the term, as security for the full performance and observance of each and all provisions of this Lease. If Lessee defaults in any particular, City may-use, apply or retain the whole or any part of the security: (1) to the extent of any sum due to City; (2) to make any required payment on Lessee's behalf; or (3) to com- pensate City for any expense or damage caused by Lessee's de- fault. On City's demand, Lessee shall promptly pay to City a sum equivalent to the amount by which the security was depleted. No interest shall accrue on the deposit. At the termination of the Lease, City shall return the deposit to the Lessee if Lessee is not then in default. 5. Lessee shall use and permit the'Site only for the maintenance and operation of parking facilities. 6. City shall, at all times, have full and unencumbered rights of ingress and egress over the Site to the Well for opera- tions, maintenance, repair, replacement and inspection of the Well, including the fence thereon. City shall, in addition, have full and unencumbered access, upon two days' notice to any por- tion of the Site for activities related to the Well, includig, but not limited to, operation, maintenance and repair of the well. To the extent such activities prevent the full use of any parking spaces-on the Site, .Lessee's rent shall be abated, uti- lizing the following formula: [~ of parking spaces affected x # of days affected] = ~ [total # of spaces x # of days in year] total amount of rent for that year amount of rent to be paid for that year = total to be paid absent interference - that percentage of the total represented by x 7. City shall have the right, upon 30 days' notice, to relocate the Well and its appurtenances elsewhere on the Site, provided, however, that in such event City shall .either pro¥ide substitute property of the same size as the area of relocation or the rent due shall be abated in accordance with the formula set forth in Section 6 above. 8. Should City decide at any time that it is no longer desirous of maintaining the Well Site, it shall give notice of termination pursuant to Section 3 hereof, and shall further state its intent to abandon the Well. Lessee shall have the option of purchasing the entire Site and Well at its then fair market value, as agreed to by the parties, providing that I~essee~'state~ its intent to purchase the property within 30 days of the notifi- cation. City shall have the right to solicit other prospective purchasers for the Site and Well during said 30-day period and thereafter, in the event Lessee does not exercise its option to purchase the property. 9. Within 60 days after execution of this Lease, Lessee shall provide for or construct the following improvements on the Site: the area (excluding the Well) shall be repaved and striped for parking [and other improvements]. All work shall conform to all applicable requirements. Construction shall be completed within 30 days after commehcement of construction. The Site shall thereafter be maintained in clean, satisfactory condition and good repair, all at Lessee's sole cost and expense. 10. Lessee shall pay or cause to be paid the total cost and expense of all improvements. Lessee shall not suffer or permit to be enforced against the Site or any part of it any mechanic's, materialman's, contractor's or subcontractor's lien arising from any work of improvement, however it may arise. Lessee shall defend and indemnify City against all liability and loss of any type arising out of work performed on the premises by or on behalf of Lessee. City has the right, but not the obligation, to pay or otherwise discharge, stay or prevent the execution of any judgment or lien. Lessee shall reimburse City for all such sums paid by City, including reasonable attorneys' fees and costs, plus interest at the maximum legal-rate from the date of payment to the date of reimbursement. 11. Upon execution of this Lease, Lessee shall file with the City Clerk of the City of Tustin, and shall thereafter during the entire term of this Lease, maintain in full force and effect, at its sole cost and expense, the following policies of insur- ance: general comprehensive liability insurance in an amount not less than One Million Dollars ($1,000,000.00) for injuries, including accidental death, to two~ (2) or more persons and in an amount not less than Five Hundred Thousand Dollars (.$500,000.00) for injuries, including accidental death to any person, and prope~rty damage liability insurance in an amount not less than Five Hundred Thousand Dollars-($500,000.00) resulting from any one occurrence, and City shall be named as an additional named insured in said insurance policy, with coverages to be included in the public liability and property damage policies of broad form contractual and broad form property damage, with the further provision that written notice of cancellation or material altera- tion of said policies shall be delivered to City sixty (60) days in advance of the effective date of any such cancellation or material alteration. If said insurance policies are provided by a polic~ which also covers Lessee or any other entity or person, it shall contain the standard cross-liability endorsement. 12. Should either party bring suit to interpret or enforce the provisions of this Lease, the prevailing party shall be enti-tled to such reasonable attorneys' fees as the court may award. 13. In the event of default by Lessee, City shall be enti- tled_to ail rent due for any period before termination, plus interest at the maximum legal rate from the due date(s). City shall be entitled to damages in the following sums: (1) all amounts that would have fallen due as rent between the time of termination of this Lease and the time of the claim judgment, or other award, le~s the proceeds of any relettings; and (2) the value at the time of the claim, judgment, or other award, of the amount by which the unpaid rent for the balance of the term exceeds the then fair rental value of the Site at the lower Of the fair rental value as then encumbered by the Lease and improvements and the fair rental value unencumbered by the Lease and improvements. 14. No waiver of any default shall constitute a waiver of any other breach or default. The subsequent acceptance of rent pursuant to this Lease shall not constitute a waiver of any preceding default. 15. Notices to either party pursuant hereto shall be deemed properly made if placed in the United States mail, postage pre- paid, addressed as follows: TO CITY: City of Tustin 300 Centennial Way Tustin, CA 926 80 Attention: TO LESSEE: 16. This Lease contains the entire agreement of the parties hereto with respect to the matters covered hereby, and no other previous agreement, statement or promise made by any party hereto which is not contained herein shall be binding o~r valid. 17. This Lease may be amended only upon mutual written agreement of the parties hereto. 18. Lessee shall not assign this Lease, or any interest therein, and shall not sublet the Site or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the agents, servants and patrons of Lessee excepted) to occupy or use the Site, or any portion thereof, without the prior written consent of City. A consent to one assignment, sublet- ting, occupation or use by another person shall not be deemed to be a consent to any ~subsequent assignment, subletting, occupation or use by another person. Any such assignment or subletting without City's consent shall be void and shall, at City's option, terminate this Lease. The Lease shall not, nor shall any inter- est therein, be assignable, as to the interest of Lessee, by operation of law, without the written consent of City. 19. The invalidity or illegality of any provision shall not affect the remainder of the Lease. EXECUTED and effective this "C ITY" day of CITY OF TUSTIN , 198_. Byl ATTEST: City Clerk LSL :lw :D: 1/3/86(44) LSL :lw:R.- 1/16/86 "LESSEE" By.