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HomeMy WebLinkAbout09 - Animal Shelter Services Lease AgreementABSTRACT: Staff is requesting entering into a Lease Agreement between the City of Newport Beach and Home Free Animal Sanctuary for animal care facility use for animals collected by the City's Animal Control Division of the Police Department. RECOMMENDATION: a) Determine that the action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because it will not result in a physical change to the environment, directly or indirectly; and b) Authorize the Mayor to sign a Lease Agreement with Home Free Animal Sanctuary, 20302 Riverside Drive, Newport Beach, CA 92660 for $66,000 per year for a period of three years with an option to extend the term by an additional two years. FUNDING REQUIREMENTS: The additional cost for the remainder of the fiscal year is estimated at $24,500 which includes the increased costs of the lease and additional part-time hours. The Police Department has requested one additional full time Animal Control Officer and 2,000 part- time Community Service Officer hours to appropriately staff the Shelter on an on-going basis, but this is not part of this agenda item. This is estimated at approximately $170,000 and will be considered as part of the budget process. BACKGROUND: Newport Beach has outsourced via contract animal sheltering services since Animal Control was created in 1948. Dover Shores Pet Care Center, a private veterinary hospital in Costa Mesa, housed Newport Beach animals from 1991- 2011. In December 2010, the owner of Dover Shores Pet Care Center submitted his written notice of intent to terminate the agreement. M CITY OF Nat"'WPORT BEACH °9tFoa�"City Council Staff Report February 14, 2017 Agenda Item No. 9 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Carol Jacobs Assistant City Manager 949-644-3313,cjacobs@newportbeachca.gov PREPARED BY: Carol Jacobs, Assistant City Manager Lt. Tom Fischbacher, Police Lieutenant TITLE: Lease Agreement for Animal Sheltering Services ABSTRACT: Staff is requesting entering into a Lease Agreement between the City of Newport Beach and Home Free Animal Sanctuary for animal care facility use for animals collected by the City's Animal Control Division of the Police Department. RECOMMENDATION: a) Determine that the action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because it will not result in a physical change to the environment, directly or indirectly; and b) Authorize the Mayor to sign a Lease Agreement with Home Free Animal Sanctuary, 20302 Riverside Drive, Newport Beach, CA 92660 for $66,000 per year for a period of three years with an option to extend the term by an additional two years. FUNDING REQUIREMENTS: The additional cost for the remainder of the fiscal year is estimated at $24,500 which includes the increased costs of the lease and additional part-time hours. The Police Department has requested one additional full time Animal Control Officer and 2,000 part- time Community Service Officer hours to appropriately staff the Shelter on an on-going basis, but this is not part of this agenda item. This is estimated at approximately $170,000 and will be considered as part of the budget process. BACKGROUND: Newport Beach has outsourced via contract animal sheltering services since Animal Control was created in 1948. Dover Shores Pet Care Center, a private veterinary hospital in Costa Mesa, housed Newport Beach animals from 1991- 2011. In December 2010, the owner of Dover Shores Pet Care Center submitted his written notice of intent to terminate the agreement. M Lease Agreement for Animal Sheltering Services February 14, 2017 Page 2 The City entered into an extensive Request for Proposal (RFP) process to replace the agreement with Dover Shores Pet Care Center. The RFP focused on an increased level of care for the animals, the proximity to Newport Beach, cost of service, and stability of the organization providing the service. In February 2011, the City issued an RFP inviting proposals for animal sheltering services. After posting on the City's website and sending the RFP to 31 animal shelters and veterinary practices in Orange County, four responses were received. The respondents included Back Bay Veterinary, Dover Shores Pet Care Center (who decided to submit another proposal), Orange County Animal Care, and Orange County Humane Society. In accordance with the City's RFP evaluation procedures, a review board convened to evaluate and rank the proposals. Based on the evaluation process, the City Council entered into a five-year contract with the Orange County Humane Society (OCHS) in Huntington Beach in April 2011. The Police Department issued a notice of default on September 30, 2015 and the City left the facility in November 2015. In November of 2015, the City entered into an agreement with Home Free Animal Sanctuary to provide shelter services. DISCUSSION: The initial contract with Home Free Animal Sanctuary was for a one-year period as this model was new to both the City and Home Free Animal Sanctuary. Over the last year, Animal Control staff has worked closely with Home Free to provide sheltering and animal care services; however, Home Free has informed the City that they can no longer provide personnel to staff the Animal Shelter operations. Based on our experience, the City would like to take a more active role in managing the shelter and staffing operations with Police Department employees. In order to provide the level of care and insure staffing that meets the City's standards, this new agreement will allow the City to have an expanded area of the residential home for additional animals as well as an isolation area; office space and a welcome area for visitors. The Animal Control Division will be responsible for managing the day-to-day operations of the facility for animals in our care. To run the facility, the Police Department has developed a model that includes a combination of Animal Control Supervisor oversight with one additional Animal Control Officer and part- time Community Service Officers as Shelter Attendants for approximately 4,000 hours a year. The Police Department has also developed a vetted volunteer cadre that assists with shelter operations. Newport Beach Animal Shelter volunteers have donated over 5,000 hours since November 2015. Staff will be at the shelter ten hours per day, seven days a week and the shelter will be open to the public five hours per day, seven days a week. The Police Department plans on using a current part-time Community Service Officer and current on duty Animal Control Officers to staff the shelter from March 2017 through June 2017. 9-2 Lease Agreement for Animal Sheltering Services February 14, 2017 Page 3 Going forward the Police Department is working in the current budget process for FY 2018 to staff the shelter via part-time Community Service Officers and a new full-time Animal Control Officer (who would have other citywide duties as well). The addition of an Animal Control Officer to the staff allows for well trained and educated employees who specialize in animal care as well as allowing for a role in traditional Animal Control Officer responsibilities in the field. During the last several months, staff has reached out to several members of the community who are starting a non-profit organization to assist with the care of our animals with a long- term goal of providing funding to possibly purchase the site should the Council wish to move in this direction. A comparison of costs, dating back to the Huntington Beach shelter's costs, is here: Shelter Alternative Staff Hours Cost per year Huntington Beach Shelter -- Contract Costs (care and shelter) $ 94,543 Animal Control Supervisor Hours (16 hrs/week) 832 $ 53,073 Animal Control Officer Hours (4 hrs/week) 208 $ 9,676 Total PD Staffing Hours/Costs 1040 $ 62,749 -- Medical or other costs (included in contract) $ 3,105 Total $ 160,397 Riverside Drive Shelter (current) -- Contract costs $ 60,000 (Home Free provides approx 3640 per year) 3640 $ Animal Control Supervisor Hours (20 hrs/week) 1040 $ 66,342 Animal Control Officer Hours (7 hrs/week) 364 $ 16,933 Total Staff Hours 5044 $ 83,275 -- Medical or other costs * $ 47,000 Total $ 190,275 Riverside Drive Shelter (optimal) -- Lease costs $ 66,000 Animal Control Supervisor Hours (12 hrs/week) 624 $ 39,805 Animal Control Officer Hours (36.5 hrs/week) 2080 $ 96,762 P/T CSO Hours(38.5 hrs/week) 2000 $ 70,360 Our PD Staffing Costs $ 206,927 Medical or other costs $ 45,000 Total $ 317,927 Difference between 14B and Optimal $ 157,529 * Projected FY17 costs based on YTD expenditures Hourly Rates: Animal Control Supervisor $63.79/hour (Current Adj Base X 1.5) Animal Control Officer $46.52/hour (FY18 budgetary loaded rate) P/T CSO $35.18/hour (FY18 budgetary loaded rate) 9-3 Lease Agreement for Animal Sheltering Services February 14, 2017 Page 4 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Lease Agreement with Home Free Animal Sanctuary ATTACHMENT A LEASE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH, 20302 RIVERSIDE DRIVE, LLC, AND HOME FREE ANIMAL RESCUE & SANCTUARY This Lease Agreement ("Agreement") Is made and entered into as of the 191 day of March, 2017 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation and charter city ("City" or "Lessee"), 20302 Riverside Drive, LLC, a California limited liability company ("Lessor"), and Home Free Animal Rescue & Sanctuary, a California corporation ("Home Free"), City, Lessor, and Home Free are sometimes Individually referred to as "Party' and collectively as "Parties" herein. RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as It Is now being conducted under the statutes of the State of California and the Charter of City. B. Lessor Is the owner of the property, structures, and improvements located at 20302 Riverside Drive, Newport Beach, California, Assessor's Parcel Number 439. 251-05 ("Property"). The Property includes an existing 1,432 square foot, two-story single-family residence with, on-site parking for four (4) vehicles, kennel building with eleven (111) Indoor and outdoor dog runs, eight (8) outdoor dog runs, and an approximately six hundred (600) square foot structure housing office space, twenty- seven (27) cat cages, storage and wash room ("Premises'), The Propery is legally described and depleted on Exhibit 'A" attached hereto and Incorporated herein by this reference. The Premises Is depicted on Exhibit "B" attached hereto and Incorporated herein by reference. C. In accordance with Chapter 7.16 of the Newport Beach Municipal Code, all dogs, fowl or other animals picked up running at large on the streets, alleys, parks, beaches or other public places in the City may be impounded. D. When the City impounds animals, the animals are transferred to an animal care shelter for retention. The City does not currently own or operate any facilities suitable for receiving, sheltering, or caring for dogs, cats, fowl, or other animals that may be Impounded. E. The Property Is currently operated by Home Free, run by Kathy and Roy Leonard, as a rescue facility for animals that have not been successfully placed by area shelters and rescue facilities. In consideration of Home Free's mission to rescue animals, background, experience, skill and ability, certification and knowledge, the City contracted Home Free to provide animal care services via that Memorandum of Understanding Among The City of Newport Beach and Home Free Animal Sanctuary for Animal Care Services, Contract No, C-6373, dated November 24, 2015 ("Memorandum of Understanding"), The Parties now desire to enter into this Agreement to formalize an 9-5 agreement for shared use of the Property, for the City to operate an animal shelter at the Premises, F. The City proposes to lease a portion of the Premises including two (2) downstairs bedrooms in the existing 1,432 square foot, two-story single-family residence, three (3) on-site parking spaces, kennel building with eleven (11) indoor and outdoor dog runs, eight (8) outdoor dog runs, and the approximately six hundred (600) square foot structure housing office space, twenty-seven (27) cat cages, storage, and wash room to provide facilities for receiving, sheltering, and caring for dogs, cats, fowl, and other animals that may be picked -up running at -large on City streets. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Parties hereby agree as follows: 1. DEFINITION$ 1.1 General, Definitions, As used in this Agreement. the following words and phrases shall have the following meanings: I (a) Alteration — any improvements, additions, alterations, changes, or modifications of the Property made by Lessor, or City, its employees, agents, contractors, and subcontractors. (b) City dminlstrator — this Agreement shall be administered by the City's Police Department. The Traffic Services Lieutenant or his 6r her designee, shall be the City Administrator and shall have the authority to act for City under this Agreement. The City Administrator or his/her authorized representative shall represent City In all matters pertaining to this Agreement for the purpose of providing an animal shelter for the City. (c) Commencement Date — March 1, 2017. (d) Ex kgtlon — the lapse of the time specified as the Term of this Agreement, Including any extension of the Term resulting from the exercise of an option to extend. (e) Lawes any judicial decision, statute, constitution, ordinance,* resolution, regulation, rule, administrative order, or other requirement of any municipal, County, state, federal, or other government agency or authority having Jurisdiction over the Parties hereto or the Property, (f) Maintenalice or Maintain — repairs, replacement, maintenance, striping, repainting, and cleaning. (g) Person -- one (1) or more natural persons, or legal entities, Including, without limitation, partnerships, corporations, trusts, estates, associations, or a combination of natural persons and legal entities. 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 2 (h) P_Loylsign — any term, covenant, condition, or clause In this Agreement that refines, establishes, or limits the performance required or permitted by either Party. (1) Rent — includes rent, taxes, and other similar charges payable by City under the provisions of this Agreement. Successor— assignee, transferee, personal representative, heir, or other Person succeeding lawfully, and pursuant to the provisions of this Agreement, to the rights or obligations of either Party. M ipm — the Initial Term, as the same may be extended by the Option Term (as defined In Section 3,2) pursuant to the provisions of this Agreement, (1) Termination — the termination of this Agreement, for any reason, prior to Expiration. 1.2 Other Definitions, — The following additional terms are defined in the following sections of this Agreement: (a) Rent - §4 (b) - Hazardous Materials §16 (c) Indemnified Parties §10.1 (d) Option Term(s) §3.2 (e) Property Recitals, §B (f) Initial Term §3.1 2. PROPERTY Lessor and Home Free agree to grant to City a right- to maintain, use and operate the Premises, which includes two (2) downstairs bedrooms in the existing 1,432 square foot, two-story single4amily residence, three (3) on-site parking spaces, kennel building with eleven (11) indoor and outdoor dog runs, eight (8) outdoor dog runs, and the approximately six hundred (600) square foot structure housing office space, twenty- seven (27) cat cages, storage and wash room on the Property. Therefore, subject to the terms and conditions set forth herein, Lessor hereby leases to City and City agrees to lease the Premises In an "as is" condition, with the exoeptlon of certain improvements that Lessor shall make to the Premises at Lessors sole cost and expense ("Lessor Improvements"). The Lessor lrriproven,.ents shall Include: (a) Construction of a partition wall to separate the two (2) downstairs bedrooms Pram the reminder of the residence. The two (2) bedrooms are to be used as offices by City, Any further additlons or improvements at the MOAWWAMR�__! 20562 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 3' 9-7 Premises, made by City, shall be at sole cost and expense of City. City agrees that no representations with respect to the condition or Improvements of the Properly or the Premises have been made by Lessor except as specifically set forth in this Agreement, 3, TERM 3,1 Term of Agrgernal2l. The initial term of this Agreement shall be five (6) years from the Commencement Date ("Initial Term"), unless terminated sooner as provided In this Agreement, or extended as provided In Section 3.2. 3.2 Option to_aLtend. Provided City is not then in default under this - _ Agreement beyond applicable notice and cure periods, City may extend the term of this Agreement for two (2) additional successive terms of one (1) year ("Option Term") commending on Expiration of the Initial Term or an Option Term, on the same terms and conditions as contained In this Agreement, The Term and Option Term(s) shall extend automatically each year unless the City provides Lessor written notice of its intention to terminate the Term or Option Term at least thirty (30) calendar days prior to Expiration of the Initial Term or an Option Term, 33 Purchase Option. Provided City Is not in default under this Agreement beyond applicable notice and cure periods, Lessor shall, In good faith and upon the same material terms as would be offered to other private parties, grant City a continuing First Right of Refusal ("FROR") to purchase the Property at fair market value, should Lessor elect to transfer the Property. For purposes of this Agreement, "transfer" and similar terms mean and include, without limitation, a sale or other transfer of all or any part of the Property, or interest therein, either alone, or as part of a larger sale, provided, however, that "transfer" shall not include the granting of an easement or sim][ar right on a portion of the Property that would not materially interfere, disrupt, or frustrate City's contemplated use pursuant to this Agreement. SA Hold Over. Should City, with Lessor's consent, hold over and continue in possession of the Property after Expiration of the Term or any Option Term, City's continued occupancy of the Property shall be considered a month-to-i-nonth tenancy subject to one hundred twenty (120) calendar days written notice by either Party to terminate, and subject to all the terms and conditions of this Agreement, except the provisions of Sections 3.1 and 3.2. 4. RENT 4.1 B_qnt, City shall commence payment of rent upon the Commencement Date, The "Rent,` which includes the use of the Premises, shall be established at Sixty Six Thousand Dollars and 001100 ($66,000.00) per year. Rent shall be paid, in advance, In equal monthly installments on the first day of each month (e.g,, Five Thousand Five Hundred Dollars and 00/100 ($5,500.00) per month). Rent for any 20302 Rverside Drive, LLC Lease Agreement for Animal Shelter Page 4 WR partial month shall be prorated in accordance with the actual number of -days in that month and shall be due On the first day of that month that falls within the Term. Rent duo hereunder will be subject to the rent adjustment provisions of Section 4.2 below, City shall send Rent to the mailing address provided In Section 4,3, 4,2 Rent Adlustmentg. Rent may be adjusted on the 2"d anniversary of the Commencement Date and then on the Vt of each Lease Year thereafter (the term "Lease Year" as used herein refers to successive twelve (12) month periods, commencing with the Commencement Date of this Agreement) to reflect Increases in the cost of living as indicated by the Consumer Price Index described below. Rent may be adjusted If the Consumer Price Index for the Los Angeles -- Orange County - Riverside Area, All Urban Consumers, All Items ("Index"), as published by the United States Department of Labor, Bureau of Labor Statistics ("Bureau"), Increases over the Base Period Index. The initial "Base Period Index" shall be the Index for the calendar month which Is four (4) months prior to the month of the Commencement Date, The Initial Base Period index shall be compared with the Index for the same calendar month for each subsequent Lease Year ("Comparison Index"), The Comparison Index used for a given year's adjustment calculation will become the Base Period Index for purposes of the next annual Rent adjustment calculation. If the Comparison Index is higher than the Base Period Index, then Rent for the next Lease Year shall be Increased by the amount of such percentage change. Should the Bureau discontinue the publicaflon of the above Index, or publish same less frequently, or alter same in. some other manner, then the Parties shall adopt a substitute Index or substitute procedure which reasonably reflects and monitors consumer prices. Lessor shall notify City in writing of any annual adjustment pursuant to this Section 4,2 at least thirty (30) business days prior to the effective date of such adjustment. i 0 43 Payment,Locatijon. All payments of Rent shah be made In lawful money f the United States of America and shall be paid to Lessor by United States' mail, or overnight mail seNlce, at the Lessor's office located at 20302 Riverside Drive, Newport Beach, California 92660, or to such other address as Lessor may frau time to time designate in writing to City, 5, BUSINESS PURPOSES AND USE OF PROPERTY 6.1 Business Purposes, The Property is to be used by City for the operation of an animal shelter and for no other use, The City shall be responsible for obtaining all required permits and licenses for the City's operation of the animal shelter and complying with all applicable conditions imposed by such permits and licenses, City shall have use of the Property throughout the Term, subject to Home gee's shared use rights set forth In Section 5.3 5.2 D . City shall operate and manage the Premises In a manner comparable to other animal shelters providing similar uses and set -vices. Except with respect to any entry onto and/or use of the Property by City, its employees, 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 5 M contractors, agents, customers, invitees, elected officials, and volunteers, Lessors Manager, Virginia Soto Martinez, Is responsible for the security of the Property and must close and secure all points of access each night. City use of the Property shall comply with all use permits, conditions, laws, and terms of this Agreement. 53 Shared Use of Prope . Lessor and Home Free shall continue to use portions of the Property, including exclusive use of all areas of the -first and second floor of the single-family residence not leased to City, described herein as: one (1) parking space, the shared use of two (2) indoor/outdoor kennels, and the office building, Lessor and Lessee shall agree on the person or persons who will lease the portion of, the house (Lessor's Manager) listed in this paragraph, This person shall have the right to care for all animals on the facility, if necessary, both those animals belonging to the City and those animals belonging to Home Free Animal Rescue, after regular business hours and If no other City staff are available. Shared use of the Property is further described below, and may be amended in writing from time to time by Mutual agreement of Lessor, Home Free, and City, each acting reasonably and in good faith, 6.3.1 Lessor currently has eight (8) dogs on the Premises. After adoption of three (3) dogs, the Lessor shall be permitted to keep up to five (6) dogs on the Premises. These five (5) dogs shall be placed in kennels as needed and their sheltering shall be in the best Interests of both Parties, with at least some of Lessor's dogs allowed In the front area of the Property to provide the public with an opportunity to adopt Home Free animals as well as those held by the City, including two (2) of the four (4) indoor/outdoor kennels currently designated as kennels nine (9) through twelve (12). These five (5) dogs shall be cared for by staff designated by Home Free and accepted by Lessee as per Section 5.3..4 below, including feeding, watering, cleaning of kennels, uniess otherwise arranged with City on a case by case basis, 6.3.2 Lessor shall be pen-nitted to keep enough of the existing office space, to provide space for a desk, chair, and wall space, 5.3.3 Lessor shall be allocated a sufficient amount of storage space for supplies including but not limited to food, bowls, leashes, cleaning Supplies, towels, bedding, etc., either in a mutually agreeable spot, or In a secured storage area separate from Lessee, 5.3.1 If there are any personnel Issues with either Lessor's employees or volunteers, or with City's employees or volunteers that either Party believes are in conflict with the operation of either the City's animal shelter or with Home Free, those issues shall be brought to the attention of the other Party. At that time, the Parties shall work in good faith to resolve the Issue satisfactorily. If a resolution cannot be reached to the satisfaction of either Party, the City shall have the final determination as to disposition given the higher public responsibility of care and performance standards 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 6 9-10 to maintain a professional working environment. Given that the City's aninial shelter houses animals subject to potential evidentlary (civil/crImInal) chain of custody, are property of others, and that the facility is a City of Newport Beach Police Department annex, the facility must maintain standards of access and security as well as maintain City personnel policies. To th's end, City requires the need to approve of any employee or volunteer of Home Free prior to access to work at the facility. This approval process may require the completion of a volunteer backgrOUnd check. 5,3,,9 The City volunteers shall walk all Home Free dogs unless the City determines that the animal could be a hazard to the volunteer or employee. The City shall discuss with Home Free and Home Free will make arrangements to walk the animal, pursuant to Home F'ree's policies and procedures, 5.3.6 Lessor agrees, at Lessor's expense, to place drywalf or other barrier to block off the two (2) downstairs bedrooms to be used by City from the rest of the Premises. Any other additions, Improvements, etc. to these two (2) downstairs bedrooms made at the request of City shall be at the sole expense of City. 5.3.7 Lessor shalt not permit any use of the Property pursuant to this Agroement: (1) other than strictly during the times set forth herein and as may be amended from time to time, and/or (11) in any manner that results in unreasonable wear and tear and/or requires janitorial or other maintenance work in excess of the type and amount of such work that would be reasonable and customary for City's contemplated use unless otherwise agreed upon by City and Lessor. 5.3,8 The Parties shall cooperate with one another, act reasonably, in good faith, and communicate regularly and proactively. The Parties shall not assign Its shared use rights under this Agreement to a third party, without the written consent of the other Parties. 5.4 ResponsibIlity. of Lessor`8 Manager, City and Lessor shall agree on the tenant(s) who will live on the Property (Lessor's Manager), Lessor's Manager shall: 5.4.1 Provide an on-site presence during closed hours and report any animal medical emergencies or security issues to City Police Department dispatch or City's Animal Control Supervisor. 6.4.2 Maintain the front of the Property in a clean condition with a professional appearance which reflects the quality standards of the City of Newport Beach. 20302 Riverside Drive, LLC Lease Agreem1ent For Animal Shelter Page 7 1 9-11 5.4.3 Ensure that gates, doors, and other access points are locked for the security of the animals In the care of the City 5.5 Protibited Uses. Lessor shall not use the Property for any purpose other than an animal shelter and single-family residence. The Property Is for the exclusive use of fhe Lessor, Horne Free, and City's employees, contractors, agents, volunteers, guests and Invitees. Use of the Property for a temporary construction yard or any construction staging is strictly prchlb1ted, except in connection with the construction of any Lessor or tenant improvements In accordance with Section 8. Lessor shall not hold the Property open for use by the general public. Lessor shall not use or permit the use of the Property in any manner that: (a) creates a nuisance; or (b) Violates any Law, 6,6 Signa Lo. City may Install permanent or temporary signage upon the Property in such locations as City desires, and City.shall ensure that any identifying and directional signage for shared use of the Property for Home Free programs is maintained. City must obtain necessary approvals and permits for signage, which must comply with applicable City regulations and conditions. All signage placed by City on, in or about the Property shall remain the property of City and shall be removed by City upon termination or expiration of this Agreement at City's expense, and any damage caused by removal shall be repaired at City's expense. , 5.7 Parking. The Property contains four (4.) off-street parking spaces, of which three (3) non -designated spaces shall be [eased by City pursuant to this Agreement. The parldrig spaces shall be available for use by City at all times, regardless of the hours of operation of the City shelter. One (1) parking space shall be retained for use by Lessor and Home Free. Non-compliance with these conditions shall constitute a default under this Agreement, and subject to the provisions Of Section 14, City shall have the rights to terminate this Agreement, 5.8 Personnel, City shall be responsible for hiring the necessary City personnel to conduct the daily operation of City animal shelter. City shall comply with all applicable federal, state, and local Laws relaled to wages, Social Security, nondiscrimination, Americans with Disabilities Act, unemployment compensation, and workers' compensation, 5.9 fndeDendent Contractp. . it Is understood that Lessor and Home Free -are Independent contractors and are not an agents or employees of the City, The manner and means of operating the City shelter at the Premises are under the control of City, except to the extent they are limited by statute, rule or regulation and/or the expressed terms of this Agreement. No civil service status or other right of employment shall accrue to Lessor or Home Free's employees, agents, or volunteers. Nothing In this Agreement shall be deemed to 001718titUte approval for Lessor or Home Free or any of Lessor or Home F'ree's employees, agents, or r volunteers to be the agents or employees of City. City acknowledges that is has no interest in the business of Lessor or Home Free, and Lessor and Home Freo, acknowledge they have no interest in the business of the City. 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 8 9-12 & TAXES, UCENSES AND OTHER OBLIGATIONS 61 Payment of :[e)(Os. Lessor shall pay directly to the appropriate taxing authorities all taxes applicable to this Agreement, fixtures and Lessor's personal property on the Property, that are levied or assessed against Lessor during the Term. Taxes shall be paid before delinquency and before any fine, interest, or penalty is due or imposed by operation of law. Lessor shall, upon request, promptly furnish to the City reasonably satisfactory evidence of payment. Lessor shall pay, before delinquency all taxes, assessments, license fees and other charges ("Taxes") that are levied or assessed against Lessor's interest in the Property or any personal property installed on the Property. 6.2 Eayme� LgL2blIng tons. Lessor and City shall promptly pay, when due, qj— any and all bills, debts, liabilities and obligations incurred by the respective Party In connection with their pro rata share of the occupation and/or use of the Property. 6.3 Chalone to Taxes. Lessor shall have the right in good faith, at Its sole cost and expense, to contest the amount or legality of any Taxes on or attributable to this Agreement, the Property, Lessor's personal property, or City's occupation and/or use of the Property, including the right to apply for reduction. If Lessor seeks a reduction or contests such Taxes, Lessors failure to pay the Taxes shall not constitute a default under this Agreement as long as Lessor complies with the provisions of this Section. City shall not be required to join in any proceeding or contest brought by Lessor unless the provisions of, any Law require that the proceeding or contest be brought by or In the name of City. In that case, City shall join in the proceeding or contest or permit It to be brought In City's name as long as City Is not required to bear any cost. If requested by Lessor, City shall execute any instrument or document necessary or advisable in connection with the proceeding or contest. Lessor, on. final determination of the proceeding_ or contest, shall Immediately pay or discharge any decision or judgment rendered, together with all related costs, charges, Interest and penalties, Lessor shall indemnify, defend and hold harmless the City, Its council members, boards, commissions, committees, officers, employees, Authorized City agents and volunteers ("Indemnified Parties," as defined in Section 10,1) frons and against any liability, claim, demand, penalty, cost or expense arising out of or in connection with any contest by Lessor pursuant to this Section. 7. UTILITIES. Lessor shall be responsible for all utility connection fees and ongoing monthly costs. Consideration for the City's pro rata share of utility costs is included in the rent discussed in Section 4 above. 8. ALTERATION$ TO THE PROPERTY, 8.1 Lessor Innorovements, On the Commencement Date Lessor shall deliver possession of the Prerrilses to City 'free and clear of any prior tenants or occupants (including, without limitation, their equipment and personal property), generally free of 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 9 9-13 any rubbish and debris, free of any construction materials and equipment, and otherwise in its "as -is" condition, subject to any representations, warranties and covenants of the Lessor specifically set forth In this Agreemeht. Subject to compliance with all Laws, no later than March 1, 2017, Lessor shall construct Improvements consistent with those Indicated in Seotlon 2(a), as may be revised or modified to obtain entitlements and/or building permits from the applicable local and state agencies, Lessor shall obtain all necessary entitlements and permits to construct the Improvements, Lessor shall pay for all costs associated VVII-Ith construction to reconfigure the site to use as an animal sheiter including but not limited to addition/removal, of demising walls. Improvements shall be performed between 7:00 a.m. and 6:00 p.rn, on non -holiday weekdays. Any contractors hired by Lessor shall be fully licensed and bonded. Lessor's contractors and any Subcontractors shall obtain Insurance In an amount and form to be approved by City's Risk Manager, including workers compensation insurance as required by law, general liability, automobile liability and builder's risk insurance covering improvements to be constructed accordance with the applicable requirements set forth In Exhibit "C," all pursuant to standard Industry custom and practice. City shall be named as an additional insured on the contractor's and any subcontractor's policies. 8,2 Cos_ , of CgMi&ug, on Lessor shall bear all costs and expenses associated with the design, use, construction, and maintenance of the Property and Lessor Improvements (except for any costs and expenses incurred as a result of any. negligence or willful misconduct by City or any of its officers, agents, contractors, or employees), which costs and expenses include without limitation: (1) relocation of existing facilities driveways, points of access, etre.), utility relocation, hock -up, and connection fees and all distribution facilities, conduits, pipelines and cables iegally required in connection with the Property and Lessor Improvements; (!I) all design, engineering, fin.ancing and construction costs; and (ill) a[[ necessary studles and appraisals, use permits or variances, and all grading, building and like permits required to construct and operate the Property and Lessor Improvements, including any fees assessed on the Property by any governmental, or quasi governmental agency or authority in connection with any regional transportation or other public improvements and school distelot taxes, development fees and assessments. 8.3 Per lts. Unless restricted by law or otherwise provided In this Agreement, Lessor shall obtain, and be responsible for the costs for all building permits and other required permits necessary for the Property. If applicable, Lessor shall be responsible, at Its sole cost and expense, for complianpe with the California Environmental Quality Act (PCEQA") In connection with Lessors operation and use of the Property, 8A Q_wafty_qJf Work Performed, All construction, maintenance and other work shall be performed in a good and workmanlike manner, shall comply with the plans and specifications submitted to City, and shall comply with all applicable governmental permit requirements and Laws In force at -the time permits are Issued, 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 10 9-14 8.5 Pa men of Costs. Lessor shall pay all costs related to the construction of the Lessor Improvments and any alterations and/or Improvements by Lessor or Its agents, except for any costs Incurred as a result of any negligence or willful misconduct by City or any of its officers, agents, contractors, or employees, &0 Disposition of Alterations at Expiration a_&Lreement!e_rm_1natJQn. Any alterations made to the Property shall remain on, and be surrendered with, the Property or, expiration or termination of this Agreement (excluding City's moveable personal property). Prior to expiration or within thirty (30) calendar days after termination of this Agreement, City may remove any moveable machinery, equipment, and other personal property Installed by City, provided that City repairs any damage to the Property caused by removal and restore the Property to good condition. 9. MAINTENANCE OF THE PROPERTY 9.1 Maintenance and Rep@Lr by Lessor City. City shall be responsible for maintenance of the Premises, including routine janitorial and housekeeping costs, City agrees that It shall keep the Property in good condition, free of trash and debris, with reasonable wear and tear and damage by casualty and condemnation excepted. Lessor may perform maintenance or repairs In the event City falls to commence any maintenance or repairs required to keep the Premises In the conditlon described in this Agreement within the time provided by Lessor in the written notice requesting such maintenance or repair (which shall not be less than thirty (30) calendar day's after the date of such notice), Notwithstanding the -foregoing, Lessor shall be responsible, and shall promptly reimburse City, for any costs Incurred by City to comply with this Section 9.1, which costs would not have been incurred but for Lessor's shared use of the Property pursuant to Section 5.3. 10. INDEMNITY AND EXCULPATION; INSURANCE 10.1 Hold-Harmiess Clause. Lessor and Home Free agree to indemnify, defend and hold harmless the City, its City Council, Boards, Commissions, Committees, officers, agents, volunteers, and employees (collectively, tl-ie "Indemnified Parties") from and against any and all claims (including, without. limItation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a "Claim;" col[ectively, "Claims"), which may arise from or in any manner relate (directly or Indirectly) to essor, Home Free, Lessor's or Home F'ree's employees, contractor, subcontractor, agents, guests, Invitees, occupation or use of the Property, specifically including, without limitation, any claim, liability, loss or damage arising by reason of: (a) The death or injury of any Person or damage to personal property caused or allegedly caused by the condition of the Property or an act or ornissl6n of Lessor or Home Free or an agent, contractor, subcontractor, supplier, employee, or servant Lessor or Home Free; 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 11 9-15 (b) Any work performed on the Property or materials furnished to the Property at the request of Lessor or Home Free or any agent or ornployee of Lessor or Home Free, with the exception of maintenance performed by Cfty; and/or (c) Lessor or Home Free's failure to perform any provision of this Agreement or to comply with any requirement of Law or any requirement imposed on the Property by any duly authorized governmental agency or political subdivision. Lessor and Home Free's obligations pursuant to this Subsection shall not extend to any Claim proximately caused by the negligence, willful misconduct, or unlawful or fraudulent conduct on the pail of the Indemnified Parties, This Indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. 10.2 Hold -Harmless Clause. City agrees to Indemnify, defend and hold harmless the Lessor, its officers, agents, volunteers, and employees 'collectively, the "Indemnified Pat -Has") from and against any and all claims (Including, without limitation, claims for bodily Injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, Without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a 'Claim;" collectively, "Clalms"), which may arise from or In any manner relate (directly or indirectly) to City, City's employees, contractor, subcontractor, agents, guests, Invitees, occupation or use of the Property, specifically Including, without limitation, any claim, liability, 'loss or damage arising by reason of'. (a) The death or injury of any Person or damage to personal property caused or allegedly caused by the condition of the Property or an act or omission of City or an agent, contractor, subcontractor, supplier, employee, or servant city; M Any work performed on the Property or materials furnished to the Property at the request of City or any agent or employee of City, with the exception of maintenance performed,by City; and/or (c) City's failure to perform any provision of this Agreement or to comply with any requirement of Law or any requirement imposed on the Property by any duly authorized governmental agency or political subdivision. City's obligations pursuant to this Subsection shall not extend to any Claim proximately caused by the negligence, willful misconduct, or unlawful or fraudulent conduct on the part of the Indemnified Parties, This Indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable, 10.3 Exqulpoto uUf City,, Except as otherwise expressly provided in this Agreement, City shall not be liable to Lessor or Home Free for any damage to Lessor or Home Free or Lessor or Home Free's property from any cause other than the negligence, Intentional or willful acts of the Indemnified Parties. Except as otherwise expressly provided in this Agreement, Lessor and Home Free waives all claims against 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 12 9-16 the Indemnified Parties arising for any reason other than the negligence, intentional or willful acts of the Indemnified Parties, City shall not be liable to Lessor or Home Free for any damage to the Property, Lessor or Home Free's property, Lessor or Homo Free's goodwill, or Lessor or Horre Free's business income, caused in whole or In part by acts of nature. 10.3 Insurance, Lessor, Flame Free, and City shall maintain insurance in the types and amoTnt;-`spe-clfled in Exhibit "Q," attached hereto and Incorporated herein by this reference. 11. DAMAGE OR DESTRUCTION OF PROPERTY; CONDEMNATION 11,1 DestructiorLoftheP . If the Property Is totally or partially destroyed, rendering the 'Property or any portion thereof totally or partially Inaccessible or unusable, Lessor shall restore the Property to substantially the same condition as immediately prior to such destruction (Including all trade fixtures, personal property, Improvements and alterations as are installed by Lessor or Home Free, which shall be replaced by Lessor or Home Free at its expense), provided that, If such destruction occurs prior to the. Shared Use Termination Date, City shall be responsible for its pro rata share of any restoration costs of materials, equipment, etc., required exclusively for City's use of the Property, based on the extent of its then current shared use rights pursuant to Section 6,3 above, Alternatively, City may elect to terminate this Agreement by giving notice of such election to Lessor within sixty (60) calendar days after the date of the occurrence of any casualty if the cost of the restoration exceeds the amount of any available Insurance proceeds, if the damage has been caused by an uninsured casualty or event, or if City reasonably estimates that repairs of the Property will take more than six (6) months, and Lessor and City shall have no further liability or obligations under this Agreement. 11.2 Destruction of Property. In the event that all or a portion of the Property is damaged, and the Property or a material portion becomes Inaccessible or commercially unusable, and the damage or destruction cannot reasonably be repaired within twelve (12) months after the date of the casualty, Lessor shall have the right to either: (a) Terminate tills Agreement by giving to City written notice (Which notice shall be given, if at all, within thirty (30) calendar days following the date of the casualty), In which case, this Agreement shall be terminated thirty (30) calendar days following the date of the casualty, or (b) Give City written notice of Lessor's intention to repair such damage as soon as reasonably possible at Lessor's expense, in which event this Agreement shall continue in full force and effect', however, Reht shall be abated in accordance with the procedures sat forth in Section 12. City may terminate this Agreement by giving Lessor written notice at any time prior to the commencement of repairs if Lessor agrees to repair the Property pursuant to this Section and falls to commence repairs within one hundred twenty (120) calendar days after giving City written notice of its intention to 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter P a g' `M73 9-17 repair. In such event, this Agreement shelf terminate as of the date of notice from City to Lessor, and Lessor shall have no liability under this Agreement. 113 Condemnation, If the use or possession of the entire Property or any material portion thereof shall be taken In condemnation proceedings, then City may elect to terminate this Agreement by giving written notice of such uch election to Lessor within sixty (60) calendar days after the date of such taking. If only a non-materlal portion of the Property shall be taken in condemnation proceedings, then this Agreement shall continue In full force and effect; however, Rent shall be proportionally abated in accordance with the procedures set forth In Section 12. 12. ABATEMENT OF RENT General Rule. In the event of damage or destruction of the Property (or any portion thereof), or condemnation of the Property (or any portion thereof), and this Agreement is not terminated, City may continue to utilize the Property for the operation i of the animal shelter to the extent It may be practicable and commercially reasonable, 'as determined in City's reasonable judgment. Rent shall abate only In proportion to the area of the Property that is rendered unusable (as determined In City's reasonable judgment), The abatement of Rent shall commence on the date that use of the Property Is impacted and continue until the completion of those repairs necessary to restore full use of the Property, if any, and City's re-opening of the Property, Lessor's obligation to pay Taxes pursuant to this Agreement shalt not be abated or reduced. Rent shall not abate if the damage or destruction to the Property is the result of the negligence or willful conduct of City or its employees, officers or agents, 13. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING, AND ENCUMBERING Prohibition of Assignment, City and Lessor ackri owlodge that City is entering into this Agreement In reliance upon the experience and abilities of Lessor and Home Free and consequently, Lessor shall not sublease or encumber Its interest in this Agreement or in the Property, or assign substantially all or any part of the. Property, or allow any other person or entity to occupy or use all or any part of the Property other than for the uses permitted under this Agreement and with the City's prior written consent. Any assignment, sublease or transfer made without the City's written consent Is null and void, which consent shall not be unreasonably 'withhold, 14. DEFAULT; REMEDIES 14.1 Default t-y—City. The occurrence of any one (1) or more of the following events shall constitute a default and material breach of this Agreement by City: (a) The vacating or abandonment of the Property by City for a period of more than one hundred eighty (180) successive calendar days during which time City shall be required to pay Rent and fulfill all other obligations under this Agreement, without the prior permission of the Lt",sor, excluding closures during periods of casualty, condemnation or permitted closures set -forth In this Agreement or during 20302 Riverside Drive, LLC I-ease Agreement for Ahimal Shelter Page 14 9-18 periods when the Property Is temporarily closed for routine breaks (e.g,, Christmas break, spring break, summer break, etc,); (b) The failure by City to make any payment of Rent or any other payment required by this Agreement, as and when due, when such failure shall coritinue for a period of ten (10) calendar days after written notice of default from Lessor to City; (c) Except as specified In Subsection 14.11(b), the failure of City to observe or perform any of the material covenants, conditions or provisions of this Agreement to be observed or performed by City where such failure shall continue for a period of thirty (30) calendar days after written notice thereof from Lessor to City; provided, however, that if the nature of City's default is such that more than thirty (30) calendar days are reasonably required for Its cure, then City shall not be deemed to be in default if City commences such cure within said thirty (30) calendar day period and thereafter diligently prosecutes such cure to completion; (d) The making by City of any general arrangement or assignment for the benefit of creditors; (e) City becomes a "debtor" as defined In 11 U.S.C. Section 101 or any successor statute thereto (unless, In the case of a petition filed against City, the same is dismissed within sixty (60) calendar days); (0 The appointment of a trustee or receiver to take possession of substantially all of City's assets located at the Property or of City's interest in this Agreement, where such appointment is not discharged within sixty (60) calendar days; and (g) The attachment, execution or the judicial SeIZUro of substantially all of City's assets located at the Property or of City's interest in this Agreement, where such seizure Is not discharged within sixty (60) calendar days. 14,2 Remedies for Defautt by City. (a) Cumulatlyp.., Nature of Remedies. If any default by City shall continue without cure beyond the time permitted Linder this Agreen-ient, Lessor shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity, to which Lessor may resort Cumulatively or in the alternative. (1) Lessor may terminate this Agreement by giving City written notice of termination with a specified termination date. In the event Lessor terminates this Agreement, Lessor may recover possession of the Property (which City shall surrender and vacate upon demand in the condition required under this Agreement) and remove all persons and property. Lessor shall be entitled to recover the following as damages: (A) The value of any unpaid Rent or other charges that are unpaid at the time of termination (which value shall be computed by allowing interest at the rate 'Of o-w-=-qa-=-"-&MM9�"—ZM MN 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 15 9-19 ten percent (10%) per annum). All Rent and other charges shall begin to accrue late charges from the date due or the date they would have accrued; (B) The value of the Rent and other chanes that would have accrued after termination less the amount of Rent and charges the Lessor received or could have received through the exercise of reasonable diligence as of the date of the termination (which value shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of termination plus one percent (1 %)); (C) Any other amount necessary to reasonably compensate Lessor for the detriment proximately caused by City's failure to perform its obligations under this Agreement; and (D) At Lessor's election, such other amounts In addition to or In lieu of the foregoing as may be permitted from time -to -time by applicable California law. Lessor shall be entitled to an award of the reasonable costs and expenses incurred by Lessor in maintaining or preserving the Property after default (after the expiration of all notice and cure periods), preparing the Property for re -letting, or repairing any damage caused by an act or omission of City. (b) Lessor's Right to Cure City's Default. Upon continuance of any material default beyond applicable notice and cure periods, Lessor may, but Is not obligated to, cure the default at City's cost. If Lessor pays any money or performs any act required of, but not paid or performed by, G€ty after such applicable notice and cure periods, the payment and/or the reasonable cost of performance shall be due as additional Rent not later than ten (10) calendar days after service of a written demand accompanied by supporting documentation upon City. No such payment or act shall constitute a waiver of default or of any remedy for default or render Lessor liable for any loss or darnage resulting from performance, provided that City shall no longer be in default to the extent the default is actually cured by Lessor, once reimbursement is made to Lessor. 15. WASTE OR NUISANCE City shall not commit or permit the commission of any waste on the Property. City shall not maintain, commit, or pennIt any nuisance as defined in Section 3479 of the California Civil Code on the Property. City shall not use or permit the use of the Property for any unlawful purpose. 16. NO CONFLICTS OF USE, HAZARDOUS MATERIALS. From the Effective Date and throughout the Term, the Parties shall not use, occupy or permit any portion of the Property to be used or occupied In violation of any Law. Lessor represents and warrants that, to the best of Lessor's knowledge; (I) City's or Home Free's use of the Property does not conflict with applicable Laws, and Lessor knows of no reason why City or Home Free would be unable `to obtain all required permits, licenses and approvals from the appropriate governmental authorities; and (€1) 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 16 9-20 the Property is not in violation of any applicable Law, rules or regulations and City's or Home Free's contemplated uses will not cause any such violation. Provided City did not bring, cause or allow such Hazardous Materials on the Property, City shall have the right (but not the obligation) to terminate this Agreement, upon thirty (30) calendar days advance written notice to Lessor In the event that Hazardous Materials are detected at the Property and the presence or the remediation (without any obligation of City to perform remediation) materially affects City's ability to operate the animal shelter at the Property. "Haza,*us Materials" shall mean any oil, flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic, contaminated or polluting materials, substances or wastes, Including, without limitation, any "hazardous substances,,' "hazardous wastes," "hazardous materials" or "toxic substances" under applicable federal, state and local laws, ordinances and regulations. 17, LESSORS DEFAULTSICITY'S REMEDIES. Lessor shall be in default If it falls to perform, or commence performance If the obligation requires more than -ten (10) calendar days to complete, any material obligation within ten (10) calendar days after receipt of written notice by City to Lessor specifying the nature of such default. Lessor shall also be In default if it commences performance within ten (10) calendar days but fails to diligently complete performance. In the event of Lessor's default, CITY May: (a) Upon thirty (30) calendar days written notice to Lessor, cure any such default, and Lessor shall reimburse City the amount of all reasonable costs and expenses Incurred by City In curing the default; or (b) Terminate this Agreement If Lessor's default materially interferes with City's use of the Property for its Intended purpose and Lessor falls to cure such default within thirty (30) calendar days after a second written demand by City, 18. EVENT OF BANKRUPTCY 18.1 if this Agreement Is assigned to any Person or entity pursuant to the provisions of the Bankruptcy Code, 11 U,S,C. Sections 101 of seq., or any similar or successor statute ("Bankruptcy Code"), to the extent permitted by the Bankruptcy Code and applicable Laws, any and all monies or other consideration, payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Lessor, shall be and remain the exclusive property of Lessor and shall not constitute property of City or of the estate of City within the meaning of the Bankruptcy Code. Any and all monies or other consideration constituting City's property under this Section not paid or delivered to City shall be held in trust for the benefit of City and be promptly paid or delivered to City, 18.2 To the extent pen-nitted by the Bankruptcy Cc -do and applicable Laws, any Person or entity to which this Agreement Is assigned pursuant to the provisions Of the Bankruptcy Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Agreement on and after ffle date of such assignment, 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 17 9-21 Including the obligation to operate the Property, pursuant to Section 6.1. 19, NOTICES Any notice, demand, request, consent, approval or communication that either Party desires or is required to give shall be in writing and shall be deemed given three (3) calendar days after deposit Into the United States registered mail, postage prepaid, by registered or certified mail, return rece, 1pt requested, or one (1) business .day after deposit with a reputable overnight courier for overnight delivery. Unless notice of a different address has been given in accordance with this Section, all notices shall be addressed as follows: If to Lessor, to 20302 Riverside Drive, LLC Attn: Kathy and Roy Leonard 20302 Riverside Drive Newport Beach, CA 92660 Phone: 949-370-2776 If to city, to: City of Newport Beach Police Department Attn: Traffic Services Lieutenant 870 Santa Barbara Drive P,O, Box 1768 Newport Beach, CA 92658 Phone: 949-644-374.0 Fax: 949644-3794 With a copy to: Cry of Newport Beach Attn: Assistant City Manager 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 And with a copy to: City of Newport Beach Attn* Real Property Administrator 100 Civic Center Drive P,O. Box 1768 Newport Beach, CA 92658 20. SURRENDER OF PROPERTY At the expiration or earlier termination of this Agreement, City shall surrender to Lessor the possession of the Property. City shall leave the Property in good and broom -clean condition, reasonable wear and tear and damage by casualty and condemnation excepted. All property that City is not required to surrender, but that City does abandon for more than thirty (30) calendar days after the expiration or termination of this Agreement, shall, at Lessor's election, become Lessor's property at expiration or termination. Lessor -shall owe no compensation to City for any personal property, 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 18 9-22 equipment or fixtures left at the Property by City more than thirty (30) calendar days after the expiration or termination of this Agreement. 21. COMPLIANCE WITH ALL LAWS City she][ at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, Including federal, state, county or municipal, whether now In force or hereinafter enacted. In addition, all work prepared by City shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the City Manager or his/her designee. 22. WAIVERS The waiver by either Party of any breach or violation of any term, covenant or condition of this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or violation of the same or other tear►, covenant, condition, ordinance, law or regulation, The subsequent acceptance by either Party of any fee, performance, or other consideration which may become due or owing under this Agreement, shall not be dearned to be a waiver of any preceding breach or violation by the other Party of any term, condition, covenant of this Agreement or any applicable few, ordinance or regulation. 23. SEVERABILITY If any term or portion of this Agreement is held to be invalid, Illegal, or otherwise unenforceable by a court orf competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect, 24. CONFLICT In case of conflict, the more specific provision of this Agreement shall control. 25, APPLICABLE LAW This Agreement shall be construed in accordance with the laws of the State of California, Any action brought relating to this Agreement shall be adjudicated In a court of competent jurisdiction in the County of Orange. 26. ENTIRE AGREEMENT; AMENDMENTS 26,1 The terms and conditions of this Agreement, all exhibits attached, and all documents expressly incorporated by reference, represent the entire agreement of the Parties with respect to the subject matter of this Agreement. 262 This Agreement shall supersede any and all prior agreements, oral or written, regarding the subject matter between City and Lessor. 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 19 9-23 26.$ No other agreement, promise or statement, written or oral, relating to the subject matter of this Agreement, shall be valid or binding, except by way of a written amendment to this Agreement. 26.4 The terms and conditions of this Agreement shall not be altered or modified except by a written amendment to this Agreement signed by Lessor and the City Manager or hlslher designee, and approved as to form by the City Attorney, 26.5 If any conflicts arise between the terms and conditions of this Agreement, and the terms and conditions of the attached exhibits or thedocuments expressly incorporated by reference, the terms and conditions of this Agreement shall control, 26.6 Any obligation of the Parties relating to monies owed, as well as those provisions relating to limitations on liability and actions, shall survive termination or expiration of this Agreement. 26.7 The Recitals provided In this Agreement are true and correct and are Incorporated Into the substantive part of this Agreement. 26.8 Each party has relied on Its own inspection of the Property and examination of this Agreement, the counsel of its own advisors, and the warranties, representations, and covenants In this Agreement, The failure or refusal of either Party to inspect the Property, to read this Agreement or other documents, or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on such reading, inspection, or advice. 26.9 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Agreement, 27. TIME IS OF THE ESSENCE Time Is of the essence for this Agreement. 28. SUCCESSORS; BINDING EFFECT Subject to the provisions of this Agreement on assignment and subletting, each and all of the covenants and conditions of this Agreement shall be binding on and shall Inure to the benefit of the heirs, successors, executors, administrators, assigns, and personal representatives of the respective Parties. 29, INTERPRETATION The terms of this Agreement shall be construed In accordance with the meaning of the language used and shall not be construed for or against either Party by reason of 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page 20 9-24 the authorship of this Agreement or any other rule of construction which might otherwise apply. 30. TABLE OF CONTENTS, HEADINGS The table of contents of this Agreement and the captions of the various sections of this Agreement are for convenience and ease of reference only and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 31. GENDER; NUMBER The neuter gender Includes the feminine and masculine, the masculine includes the feminine and neuter, and the feminine Includes the neuter, and each includes corporation, partnership, or other legal entity whenever the context requires. The singular number includes the plural whenever the context so requires. 32. EXHIBITS All exhibits to which reference is made in this Agreement are incorporated by reference. Any reference to "this Agreement" Includes matters Incorporated by reference. 33, CITY BUSINESS LICENSE Lessor and glome Free shall obtain and maintain during the duration of this Agreement, a City business license as required by the Newport Beach Municipal Code. 34. ATTORNEYS' FEES The prevailing Party in any action brought to enforce the terms and conditions of this Agreement, or arising out of the performance of this Agreement, shall not be entitled to recover its attorneys` fees. 35. NONDISCRIMINATION City, Lessor, and Home Free, for itself and its successors, agrees that in the performance under this Agreement, Parties shall not discriminate against any person because of the marital status or ancestry of that person or any characteristic listed or defined In Section 11935 of the Government Code. 20302 Riverside ©rive, LLC Lease Agreement for Animal Shelter Page 21 9-25 36. RESERVED. 37. NO THIRD PARTY BENEFICIARIES City (both as a lessee and as the City of Newport Beach) and Lessor and Home Free do not Intend, by any provision of this Agreement, to create in any third party, any benefit or right owed by one Party, under the terms and conditions of this Agreement, to the other Party. 38, CALIFORNIA LABOR LAWS It shall be the obligation of City, Lessor, and Home Free to comply with all Laws, Including, but not limited to, State of California labor laws, rules and regulations and the Parties agree that the City shall not be liable for any violation by Lessor or Home Free (or Lessor or Home Free's agent, sublesse or any party affiliated with Lessor or Home Free) thereof. 39. NO DAMAGES Lessor and Home Free acknowledges that City would not enter into this Agreement If it were to be liable for damages (including, but not limited to, actual damages, economic damages, consequential damages, lost profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use) under, or relating to, this Agreement or any of the matters referred to in this Agreement, Including, without limitation, any and all plans, permits, licenses or regulatory approvals, and CEQA documents related to the Property. Accordingly, Lessor and Home Free covenants and agrees an behalf of itself and its successors and assigns, not to sue City (either in Its capacity as lessee In this Agreement or In Its capacity as the City of Newport Beach) for damages (including, but not limited to, actual damages, economic damages, consequential damages, lost profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use) or monetary relief for any breach of this Agreement by City or for any dispute, controversy, or issue between City and Lessor or Horne Free arising out of or connected with this Agreement or any of the matters referred to in this Agreement, including, without limitation, any and all plans, permits, licenses or regulatory approvals, CEQA documents, or any future amendnients or enactments thereto, the Parties agreeing that declaratory relief, injunctive relief, mandate and specific performance shall be Lessor and Home Free's sole and exclusive judicial remedies. Notwithstanding the foregoing, nothing in this Section 39 shall limit Lessor's remedies as expressly set forth in this Agreernemt. 40. QUIET ENJOYMENT So lcng as City pays Rent and compiles with Its obligations under this Agreement, City shall peaceably and quietly enjoy the Property throughout the Term without hindrance by Lessor, Home Free, or any person lawfully claiming through or under Lessor, subject, to the provisions of this Agreement. 20302 Riverside Drive, LI -C Lease Agreement for Animal Shelter Page 22 9-26 41. GOVERNMENT CLAIMS ACT City, Home Fres, and Lessor agree that in addition to any claims filing or notice requirements in this Agreement, Lessor and Home Free shall file any claim that Lessor or Home Freemay have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.), or any successor statute. [SIGNATURES ON NEXT PAGE] 20302 riverside Drive, LLC Lease Agreement for Animal Shelter Page 23 9-27 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates written below. APPROVED AS TO FORM' CITY ATTORNEY'S OFFICE Date: l� h By:—. A&i- Aaron C. Harp City Attorney ATTEST; Date: By: Lellan! I. L3own City Clerk CITY: CITY OF NEWPORT BEACH, a California municipal corporation Date: By:, Diane B. Dixon Mayor LESSOR: 20302 RIVERSIDE DRIVE, LLC, a Californiq Ilmite liability company By: Kathryn L. Leon rd Member Date: 5 Q I) By:, RoyLe +-rd Member HOME FREE: HOME FREE ANIMAL SANCTUARY, a California coVporation Date: / -- � -, cZL)I_7 Marlene 1— Brown Vice President / Chief Financial Officer Date: BY: Virginia oto Martinez Seoretary [END 0117 SIGNATURES] Attachments: Exhibit A: Property Description and Depiction Exhibit 13: Promises Depiction and Equipment Description Exhibit C: insurance Requirements 20302 riverside Drive, LLC Lease Agreement for Animal Shelter Page 24 9-28 EXHIBIT A. Property Description and Depiction THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF NEWPORT BEACH, COUNTY OF GRANGE; STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: LOT 12 OF TRACT 2581, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA AS PER MAP RECORDED IN BOOK 77, MAGE 15 OF MISCELLANEOUS' MAPS IN THE OFFICE OF THE ORANGE COUNTY RECORDER OF SAID COUNTY. EXCEPT ONE -HALT= OF ALL MINERAL, OIL, GAS, AND OTHER HYDROCARBON SUBSTANCE, SAVED OR SOLD FROM THE HEREIN DESCRIBED LAND, UPON THE CONDITION, HOWEVER THAT THE GRANTOR OR SUCCESSORS IN INTEREST OF OWNERSHIP SHALL HAVE NO RIGHT OF ENTRY UPON THE SURFACE OF THE LAND AND SHALT. NOT DRILL FOR. SUCH SUBSTANCES WITHIN THE UPPER 500 FEET O1= SAID LAND, AS RESERVED IN THE DEED FROM JAMES M. WATKIN , SR., AND WIFE TO ODIS M. CLANK, RECORDED JANUARY 14, 1955 IN BOOK 2924, PAGE 190 OF OFFICIAL RECORDS. APN: 489-251-05 20302 Riverside Drive, LI -C Lase Agreement for Animal Shelter Page A-1 9-29 EXHIBIT B Promises Depiction and Equipment Desc-riptio'n City's Equipmenton the Premises consists of. 1. One (1) washer; 2. One (1) dryer; 3, One (1) storage shed; 4, One (1) shop vacuum; 5. All cat cages In the back room; 6. Three (3) wire crates; 7, One (1) desk; 8, One (1) chair; 9, One (1) min[ refrigerator for medicine; 10. One (1) laptop; and 11. One (1) printer. 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page B-1 9-32 Exhibit C Insurance requirements Without limiting Lessor's indemnification of City, Lessor will obtain, provide and maintain at its own expense during the Term of this Agreement, a policy or policies of insurance of the type, amounts and form acceptable to City. The policy or policies shall provide, at a minimum, those items described below. 1. Provision of Insurance. Without limiting Lessor's indemnification of City, and prior to commencement of work on Property by Lessor or Lessor's agents, representatives, consultants, contractors and/or subcontractors, Lessor shall obtain, provide and maintain at Its own expense during the term of this Agreement policies of Insurance of the type and amounts described below and in a form satisfactory to City. Lessor agrees to provide insurance in accordance with requirements set forth here. if Lessor uses existing coverage to comply and that coverage does not meet these requirements, Lessor agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the insurance commissioner to transact business of insurance in the State of California, with an assigned policyholders' rating of A- (or higher) and financial size category class VII (or larger) in accordance with the latest edition of best's key rating guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Lessor and Lessor's agents, representatives, consultants, contractors and/or subcontractors, shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Lessor and Lessor's agents, representatives, consultants, contractors and/or subcontractors, shall submit to City, along with the certif=icate of insurance, a Waiver of Subrogation endorsement In favor of City, its officers, agents, employees and volunteers. B. General Liability Insurance. Lessor and Lessor's agents, representatives, consultants, contractors and/or subcontractors, shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter page C-1 9-34 occurrence, two million dollars ($2,000,000) general aggregate. The policy shall cover liability arising from Property, operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed In a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Automobile Liability Insurance. Lessor and Lessor's agents, representatives, consultants, contractors and/or subcontractors, shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for allactivities of Lessor arising out of or in connection with work to be performed at -the Property, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit each accident. D, Property insurance. (i) Construction. During construction of any improvements on the Property, Lessor shall maintain Builder's Risk Insurance against "all risk" of physical loss, including the perils of fire, collapse and transit, with commercially reasonable deductibles, covering the total cost of work performed, equipment, supplies and materials furnished on a replacement cost basis. Lessor's obligation to provide this coverage is contingent on the availability of coverage at commercially reasonable rates. (H) Lessor shall maintain property insurance in an amount not less than one million dollars ($1,000,000). The policy shall cover Lessor's personal property and improvements at the Property. 4. Endorsements: Policies shall contain or be endorsed to contain the following provisions: A. Additional Insured Status, City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as an additional insured under all general liability and pollution liability policies with respect to liability arising out of Lessor's activities related to this Agreement and with respect to use or occupancy of the Property. B. Primary, and Non Contributory. Policies shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, fosses, or liability arising directly or indirectly from Lessor's operations. Any insurance maintained by City, including 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page C-2 9-35 any self-insured retention City may have, shall be considered excess insurance only and not contributory With the insurance provided hereunder. C. Liability Insurance, Liability Insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the lit -nits of liability of the Insuring company, D, Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, Its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Lessor or others providing Insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Lessor hereby waives its own right of recovery against City, and shall require similar written express waivers from each of As consultants, contractors or subcontractors. E. Reporting Provisions. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. F. Notice of Cancellation. The insurance required by this Agreement shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) calendar days (ten (10) calendar days written notice of non-payment of premium) written notice has been received by City. It is Lessor's obligation to ensure that provisions for such notice have been established, G. Loss Payee. City shall be included a loss payee under the commercial property insurance. 5. Additional Requirements. A. In the event City determines that (j) the Lessor's activities on the Property creates an increased or decreased risk of loss to the City, (11) greater insurance coverage is required due to the passage of time, or (Ili) changes in the industry require different coverage be obtained, Lessor agrees that the minimum limits of any insurance policy required to be obtained by Lessor or Lessor's consultants, contractors or subcontractors, may be changed accordingly upon receipt of written notice from City. With respect to changes in insurance requirements that are available from Lessor's then - existing insurance carder, Lessor shall deposit certificates evidencing acceptable insurance policies with City incorporating 20302 Riverside Drive, LLC Lease Agreement forAnimal Shelter Page C-3 9-36 such changes within thirty (30) calendar days of receipt of such notice. With respect to changes in insurance requirements that are not available from Lessor's then- existing insurance carrier, Lessor shall deposit certificates evidencing acceptable insurance policies with City, incorporating such changes, within ninety (90) calendar days of receipt of such notice. B. Any deductibles applicable to the commercial property or insurance purchased in compliance with the requirements of this section shall be approved by City. C. Lessor and Lessors consultants, contractors and/or subcontractors shall be subject to the Insurance requirements contained herein unless otherwise specified In the provisions above or written approval is granted by the City. Lessor shall verify that all consultants, contractors and/or sub6ontractors maintain insurance meeting all the requirements stated herein, and Lessor shall ensure that City Is an additional insured on Insurance required from contractors, consultants and/or subcontractors, D. For General Liability coverage, contractors, consultants and/or subcontractors shall provide coverage with a format at least as broad as provided by Insurance Services Office form CG 203 80413, E. If Lessor maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the Lessor. Any,avallable insurance proceeds In excess of the specified minimum limits of insurance and coverage shall be available to the City. F. Lessor shall give City prompt and timely notice of any claim made or suit instituted arising out of or resulting from Lessor or Lessor's agents, representatives, consultants, contractors or subcontractors performance under this Agreement, G. Lessor shall provide certificates of insurance, with original endorsements as required above, to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City prior to commencement of work or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. H. All required Insurance shall be In force on the Effective Date, and shall be maintained continuously in force throughout the term of this Agreement. In addition, the cost of all required insurance shall be 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter Page C-4 9-37 borne by Lessor or by Lessor's consultants, contractors or subcontractors. 1, If Lessor or Lessor's consultants, contractors or subcontractors fall or refuse to maintain insurance as required in this Agreement, or fall to provide proof of insurance, City has the right to declare this Agreement In default without further notice to Lessor, and City shall be entitled to exercise all available remedies, J. Lessor agrees not to use the Property in any manner, even if use is for purposes stated herein, that will result in the cancellation of any insurance City may have on the Property or on adjacent Property, or that will cause cancellation of any other insurance coverage for the Property or adjoining Property. Lessor further agrees not to keep on the Property or permit to be kept, used, or sold thereon, anything prohibited by any fire or other insurance policy covering the Property. Lessor shall, at its sole expense, comply with all reasonable requirements for maintaining fire and other Insurance coverage on the Property. , -- I -- 20302 Riverside Drive, LLC Lease Agreement for Animal Shelter ----P—aTe 6�-F 9-38