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HomeMy WebLinkAboutS20 - Newport Aquatic Center Addendum for Fround Lease ExtensionTO FROM RE BY T! 0111" CC)UNCIL CITY OF NEWPORT BEACH APR 2 81997 1"--r� nR, ,D Council Meeting 04-28-97 Agenda No. S20 CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY April 21, 1997 C Qb31 Mayor and Members of the City Council Daniel K. Ohl, Deputy City Attorney Newport Aquatic Center Addendum for Ground Lease Extension The Newport Beach Aquatic Center has requested that we extend their ground lease. The purpose of the requested extension is to allow them to completely build out the facility as previously approved and also to make sure their donors see the long term benefit of their gifts, estimated at $600,000 to $700,000. The extension is contingent upon, among other things, submittal of construction drawings for the expansion, obtaining the necessary permits and otherwise meeting all remaining conditions of their previously approved use permit. The Parks, Beaches and Recreation Commission approved such an extension at their meeting on May 7, 1996. Recommendation: It is recommended that the Addendum to the ground lease, granting the extension, be approved. ICU Daniel K. Ohl Deputy City Attorney F:\cat\debbie\ccmemo\naclease.doc THE CITY OF NEWPORT BEACH AND NEWPORT AQUATIC CENTER, INC. ADDENDUM TO GROUND LEASE WHEREAS, on March 24, 1987 a Ground Lease was entered into by and between the CITY OF NEWPORT BEACH, ("Lessor") and NEWPORT AQUATIC CENTER, INC., a non profit public benefit corporation, ("Lessee") for a term of thirty (30) years; and WHEREAS, Lessor and Lessee desire to extend the original Ground Lease, and WHEREAS, Lessor and Lessee agree that all other terms and conditions are to remain unchanged: IT IS HEREBY agreed by and between the City of Newport Beach, Lessor, and Newport Aquatic Center, Inc., a non profit public benefit corporation, Lessee, that the term of the Ground Lease shall be thirty (30) years from the first day of the first full calendar month after each of the following conditions have been satisfied: A. The Lease has been executed by Lessor and Lessee; B. Lessee has submitted construction drawings for the construction of the remainder of the floor area permitted by Use Permit number 3104 and Coastal Development Permit 5-84-786; C. Lessee has applied for a building permit for the construction of the remaining floor area permitted by Use Permit number 3104 and Coastal Development Permit 5-84-786; D. Lessee has complied with all conditions to the approval of Use Permit number 3104 and Coastal Development Permit number 5-84-786, including, but not limited to, permits from other public agencies, and the soils hydrology and related studies; E. Lessee has submitted an agreement, signed by a general contractor licensed as such by the State of California, committing the contractor to complete the remaining floor area of the project; F. Lessor has received a bond guaranteeing performance of the contract required by the provisions of subparagraph E. The bond shall guarantee performance of the contract in a timely and workmanlike manner in the event contractor fails or refuses to perform in accordance with the contract; 1 of 2 G. Lessee must satisfy each of the conditions precedent to the commencement of the term of the lease within twelve (12) months of the date of the execution of this Addendum. IN WITNESS WHEREOF, the Parties hereto have executed this Addendum to the Ground Lease. Dated: Dated: APPROVED AS TO FORM: Daniel K. Ohl, Deputy City Attorney for the City of Newport Beach ATTEST: LaVonne Harkless, City Clerk for the City of Newport Beach LESSEE: NEWPORT AQUATIC CENTER, INC. LESSOR: CITY OF NEWPORT BEACH 2of2 Jan DeBay, Mayor for the City of Newport Beach F;\cat\debbie\ag\n adease.doc 03-20-97 Council Meeting: 04-28-97 Agenda No. CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY April 24, 1997 TO: Mayor and Members of the City Council FROM: Daniel K. Ohl - Deputy City Attorney RE: Newport Aquatic Center Addendum to Ground Lease Extension Supplemental Report By way of background, the City of Newport Beach, in conjunction with Newport Aquatic Center, applied for and received a permit from the California Coastal Commission for the development of North Star Beach in the Dover Shores residential area. The permit allowed for construction of a 18,228 square foot aquatic training and recreational facility which occupies approximately one-fourth of the 12 acre beach. A deed restriction limits development to this degree and thus the property does not produce income. The facility is situated such that the portion of the beach left undeveloped is adjacent to the public road. The center is quasi -public in nature in that the primary users are various boat clubs, youth day camps, sports camps, civic organizations and elite athletes through memberships. The Coastal Commission Permit notes that recreational boating use of coastal waters shall be encouraged. The boat launching facilities, public restrooms and public parking must be made available to the general public during the hours of operation of the facility. In connection with the California Coastal Commission Permit, the City has issued a Conditional Use Permit with 63 conditions in conjunction with a 25 -year Ground Lease executed in March of 1987. The Lease is attached as an exhibit. The City added the various conditions largely as a result of the concerns expressed by the Dover Shores Residential Community since the only overland access to the facility is through their community. The most notable condition includes a reservation of 20% of the maximal allowable daily use of 250 persons for general public walk-in use of the boat launching facility. The center is to provide a minimum of 63 parking spaces, and allow limited outdoor boat storage to seasonal storage of outrigger canoes. Further, the center is required to have a weekly clean-up program on the site. The hours of operation are M limited to 6:00 a.m. to 10:00 p.m. daily, with no outdoor programs offered after 7:00 p.m. Only advanced training activities are permitted between 6:00 and 7:00 a.m. The Conditional Use Permit restrictions were also embodied into a facility management plan approved by the City Council on January 25, 1988. The document reflects the Conditional Use Permit restrictions, Coastal Commission requirements, and input of both the Aquatic Center Board and Dover Shores Community Association. Since the center officially opened in January of 1988, it has become a beacon for water enthusiasts. Several world class athletes routinely train there, a large number of recreational activities and programs are offered to the public, and consistent with its charge from the California Coastal Commission, increase use of coastal waters has not only been encouraged, but achieved. Current management at the Aquatic Center has done an excellent job of communicating with local homeowners concerning activities at the center and have been able to iron out any issues which have arisen. The proposed and previously approved build out, which is mainly to increase storage, will cause the plans and specifications to be re-examined by the Building Department to make sure all applicable issues are addressed. The maximum daily use restrictions will not change, while parking will be increased. The Harbors, Beaches, and Parks Committee considered and approved the addendum to the Ground Lease at its meeting of April 24, 1997. Recommendation: It is recommended that the addendum to the Ground Lease, granting the requested extension, be approved. DANIEL K. OHL Deputy City Attorney F:\cat\debbie\ccmemo\nac-perm.doc THE CITY OF NEWPORT BEACH AND NEWPORT AQUATIC CENTER, INC. GROUND LEASE d % THIS GROUND LEASE, entered into thiseZ2 day of 198 , by and between THE CITY OF NEWPORT BEACH, ("Lessor" and NEWP? RT AQUATIC CENTER, INC., a Non-profit Public Benefit Corporation, organized and existing under and by virtue of the laws of the State of California A referred to as "Lessee") is made with reference to the following facts, the materiality and existence of which is stipulated and agreed by the parties: A. Lessor is the owner, subject to a public trust, of approximately 12 acres of tidelands located in the City of Newport Beach and commonly known as N...th Star Beach. B. In November, 1982, the qualified electors of .the City of Newport Beach approved a Measure which granted the City Council the authority to lease property on North Star Beach for the construction of facilities to promote sports involving human - powered watercraft. C. The property which is the subject of this lease has been identified as that portion of North Star Beach best suited for the construction of facilities to promote sports involving human -powered watercraft. D. On September 6," 1984, the Planning Commission of the City of Newport Beach approved Lessee's application for a use permit (No. 3104, attached 'as EX11Luit "C") authorizing the construction of an 18,228 square foot structure that would provide facilities for human -powered watercraft, and their owners, including boat storage, and multi-purpose' area and meeting room, a weight training room, small offices for the conduct and operation of facility, 1•ocker rooms, and such other facilities as may be incidental to sports involving human -powered watercraft. In addition, permittee proposed to construct a bulkhead along a portion of the beach frontage, build low lying docks to serve only human -powered craft, landscape the property, and provide appropriate public parking, restroom facilities, and access to the beach. E. On February 14, 19859 the California Coastal Commission approved Lessee's application for a Coastal Development Permit authorizing the construction of the Aquatic -1- I Center. (See Coastal Development Permit No. 5 -84 -786 -Exhibit "D.") F. The property is subject to restrictions, including, but not limited to, limitations specified in Chapter 415, Statutes of 1975 the Grant Deed from the County of Orange to the City of Newport Beach and (conveying an undivided one-half interest in the property) and the limitations commonly imposed on public tidelands. Lessor has determined that the proposed Aquatic Center, and the uses to which it will be put, are consistent with the limitations and restrictions imposed on the property; G. The residents of Newport Beach and the County of Orange will derive substantial benefit from the construction of the Aquatic Center in that: 1. Newport..Harbor has ideal water c:.::ditions for the training and development of world-class rowers, canoers, and kayakers, but no facility currently exists to accommodate these athletes and there is currently no organized public program for these specific water sports outside collegiate programs. 2. Construction of the Aquatic Center will provide a facility for world-class athletes, as well as encourage and provide for public participation in human -powered aquatic sports at all levels of ability; 3. A portion of the Aquatic Center will be available for use by members of the general public on a daily basis and also will be available for use by the City of Newport Beach. H. The County of Orange, pursuant to a joint powers agreement, has given the City of Newport Beach the power to execute this lease on its behalf. NOW, THEREFORE, the parties hereto agree as follows: 1. LEASED PREMISES Lessor hereby leases to Lessee, subject to the terms of this Agreement, the 3.9+/- acre parcel legally described on Lxhibit "A," and depicted on the ::ap attached as Exhibit "B" (the "property"). spa 2. TERM The term of this Lease shall be twenty-five (25) years, unless sooner terminated as provided herein. The term of the lease shall commence on the first day of the first full calendar month after each of the following conditions has been satisfied: A. The Lease has been executed by Lessor and Lessee; B. Lessee. has applied for a building permit for the construction of at least 35% of the floor area permitted by Use Permit No. 3104 and for construction of any and all improvements or facilities relating to the construction of phase I (as defined in Paragraph S.A. and required as conditions to Use Permit No. 3104 and conditions 2-6 of Coastal Development Permit 5-84-786; C. Lessee has complied with all conditions to the approval of Use Permit No. 3104 and Coastal Development Permit No. 5-84-786, including, but not limited to, permits from other public agencies; and the soils, hydrology and related studies; D. Lessee has submitted an Agreement, signed by a general contractor licensed as such by the State of California, committing the contractor to complete at least Phase I of the project on or before March 1, 1988. E. Lessor has received a bond guaranteeing performance of the contract required by the provisions of subparagraph D. The bond guaranteeing performance of the contract in a timely and workmanlike manner in the event contractor fails or refuses to perform in accordance with the contract. Lessee must satisfy each of the conditions precedent to the commencement of the term of the lease within twelve months of tiie date of execution. 3. USE RESTRICTIONS/CONDITIONS This Lease is subject to all of the conditions, covenants, restri�Iions and limitations of the following: A. City of Newport Beach Use Permit No. 3104; -3- B. Coastal Commission Development Permit No. 5- 84-786; C. The Grant Deed from the County of Orange conveying to the City of Newport Beach an undivided one-half interest in the property and recorded March 13, 1978 in Book 12594, Page 990, Official Records of the County of Orange. D. The provisions of any and all Statutes of the California Legislature granting any portion of the property to the City of Newport Beach or County of Orange. E. The Joint Powers Agreement between the City of Newport Beach and County of Orange (attached as Exhibit "E.") F. Lessee shall permit, and provide for, public access for activities permitted under the Tideland Grants, including fishing, to the extent those activities do not interfere with the activities and programs conducted by Lessee. 4. CONSIDERATION The consideration for this Agreement shall be the construction of an aquatic center by Lessee, at no cost to Lessor, the continued maintenance and operation of this facility for the term of the Lease at no cost to Lessor, the commitment of Lessee to utilize the facility as an aquatic center for the advancement of marine -oriented athletic and recreational programs and activities, and the right of Lessor to utilize the facility. 5. CONSTRUCTION BY LESSEE A. Project: Lessee shall have the right, at Lessee's sole cost and expense, to construct a facility consisting of no more than 18,228 square feet, inclusive of boat storage areas, weight training rooms, men's and women's locker rooms, multi-purpose assembly room, facility and public restrooms, and other uses, all as shown on the plans and specifications submitted by Lessee to the City of Newport Beach and California Coastal Commission in conjunction with the approval of Use Permit No. 3104 and Coastal Development Permit No. 5-84-786. Lessee shall construct, at Lessee's sole cost and expense, at least 83 parking spaces, an access road, and other improvements as are shown on the plans for Phase I attached to this lease as Exhibit "F." Lessee may also construct, at Lessee's sole cost and expense, a staging area, dock and bulkhead, to the extent permitted by Use Permit No. -4- , 3104, subject to whatever restrictions may be imposed by any agency having jurisdiction over such construction. B. Phasing/Phase I: The project may be constructed in no more than three phases. Phase I shall consist of 8,107 square feet of building area, 64 parking spaces, staging area, ramp, dock and accesss road all as described in, shown on, the plans and specifications attached as Exhibit "F." Construction of subsequent phases shall not corrmence until Lessor has, with respect to each phase, complied with the provisions of subparagraphs 2.C. through 2.E. C. Construction Schedule: Construction of phase I shall commence within ninety (90) days from the effective date of the lease and shall be diligently pursued to completion in accordance with the schedule submitted by lessee or lessee's contractor, and approved by the Building Director of the City of Newport Beach. The time for completion of any phase of construction may be extended in the event of strikes, acts of God, or other events beyond the control of lessee, but shall not be extended due to financial problems. Failure to timely commence construction, or failure to diligently pursue completion of any phase shall be considered a material breach. D. Permits and Approvals: Lessee shall be required to obtain, prior to commencing any phase o: tons-truction, all permits, licenses or approvals that may be required in connection with that particular phase, including, but not limited to, approvals and Permits from the following agencies: (1) The City of.Newport Beach; (2) The County of Orange; (3) The California Department of Fish be Game; (4) The California Coastal Commission; (5) The California Regional Water Quality Control Boards; -5- 1 i (6) The Army Corps of Engineers; (7) The United States Department of Fish be Wildlife; (8) The United States Bureau of Sports Fisheries. E. Completion Bond/Letter of Credit: In the event the contract performance bond provided pursuant to the provisions of paragraph 2.E. of this lease becomes invalid, or unenforceable, for any reason, Lessee shall provide Lessor with a substitute letter of credit or completion bond within five (5) days from the date on which Lessee becomes aware of the invalidity or unenforceability or the bond or letter of credit or, -written notice from Lessor, whichever first occurs: Any substitute bond or letter of credit must comply with the standards specified in paragraph 2.E. of this lease. F. Prior Written Approval: No structure or improvement of any kind shall be erected or maintained on the property unless and until plans, specifications, and proposed location of the structure or improvement have been approved, in writing, by Lessor. G. Notice of Non -Responsibility: Lessor shall have the right, at any time, to post and maintain on the premises, ar-' record, as required by law, any notice or notices of non -responsibility provided for the Mechanics' Lien laws of the State of California. H. Licensed Contractors: All work required in the construction of any phase of the Aquatic Center, including site preparation, work, landscaping, utility installation and similar work shall be performed only by competent contractors duly licensed as such under the laws of the State of California and pursuant to written contract between the contractor and Lessee. Unless otherwise specified by the Buildinv Director and public Works Director of the City of Newport Beach, each contract with a general contractor shall provide that the final payment under the contract shall be in an amount equalling at least 10% of the full -6- amount payable and shall not be paid to contractor until the following, whichever last occurs: (1) The expiration of 35 days from the notice of recording by Lessee of a notice of completion of the building, with Lessee agreeing to record the notice promptly within the time specified by law; or (2) The settlement and discharge of all liens of record claimed by persons who supplied other labor or materials for the construction of the project. 6. CONSTRUCTION/ALTERATION BY LESSEE (1) Lessor's Consent: No structures, improvements, or facilities other than as providef in phase I, shall be constructed or altered by Lessee without the prior written consent of the Building Director of the City of Newport Beach. Any conditions relating to the manner, method, design and construction of the structures, improvements or facilities imposed by Lessor shall be considered conditions of this Agreement as though originally stated herein. In the event that any construction or alteration of facilities, structures or improvements requires any discretionary approval of any Board or Commission of the City of Newport Beach, any conditions imposed by such Board or Commission relating to the manner, method, design and construction of the structures, improvements or facilities shall also be conditions of this Lease. (2) Strict Compliance: All improvements constructed by Lessee on the property shall be constructed`in strict compliance with the plans and specifications approved by the Building Director of the City of Newport Beach. (3) Mechanics Liens or Stop Notices: -7- Lessee shall, at all times, indemnify and hold Lessor harmless from any and all claims for labor or materials in connection with the construction, repair, alteration, or installation of the structures, improvements, equipment or facilitie- on the property, and from the c-^ts of defending against such claims, including reasonable attorney's fees. In the event any lien or stop notice is imposed or recorded on the property as a result of the construction, repair, -7- alteration of shall, within stop notice: K K the facility, installation of any equipment, Lessee thirty (30) days from the filing of the lien or i. Record a valid release of lien or stop notice; ii. Deposit sufficient cash with Lessor to cover the amount of the claim or lien or stop notice in question and authorize payment to the extent of said deposit to any person or entity that obtains any judgment with respect to said claim or lien or stop notice; or iii. Procure and record a Bond in accordance with the provisions of Section 3143 CCP, which frees the property from the claim of lien or stop notice and from any action brought t -j foreclose the lien or stop notice. Lessee's failure to comply with the provisions of this paragraph, shall be considered to be a material breach, and this Lease shall be subject to immediate termination, pursuant to the provisions of Section 23 of this Lease. 7. OWNERSHIP OF IMPROVEMENTS: All buildings, improvements and facilities, exclu- sive of trade fixtures, constructed or placed on the property by Lessee must, upon completion of construction or installation, be free and clear of all liens, claims or liability for labor or material, and shall become property of ;,essor and the County of Orange at the expiration of .this Lease, or earlier termination thereof. Lessor retains the right to require Lessee, at Lessee's cost, to remove all improvements, placed on the property by Lessee, at the expiration or termination of this Lease subject to the provisions of paragraph 13 of this Lease. 8. LTI'II;ITIES Lessee shall be responsible for and pay, prior to the delinquency date, all charges for utilities supplied to the property and structures or improvements thereon. 9. MAINTENANCE OBLIGATIONS OF LESSEE Lessee agrees to maintain the property and all -8- improvements constructed thereon in good order and repair, and to keep said premises in a neat, clean, orderly, safe, and sanitary condition. This includes, but is not limited to, the prevention of accumulation of any refuse or waste materials which might constitute a fire hazard or a public or private nuisance. Failure of Lessee to p.-operly maintain and repair the property and improvements shall constitute a material breach of the terms of this Lease. 10. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS In the event of damage to or destruction of Lessee's buildings, facilities, or improvements located on the property or in the event buildings, facilities, or improvements located on the property are declared unsafe or unfit for use or occupancy by a public entity .with the authority to make and enforce such declaration, Lessee shall, within 120 days, commence and deligently pursue t^ completion the repair, replacement, or reconstruction of the structure or improvements necessary to per- mit full use and occupancy of the property for the purposes required by this Lease. Repair, replacement, or reconstruction of improvements within the property shall be accomplished in a manner and according to plans approved by Lessor. 11. INSURANCE Lessee shall maintain insurance, acceptable to Lessor, in full force and effect throughout the term of this Lease. The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages: A. Liability Insurance: Coverage 1,2:.3,000 Bodily injury -property damage combined single limit, which insurance shall be in force on the first day of the term of this Lease. B. Fire be Extended Extended Coverage Not less than 90% of the cost of replacement of all insurable improvements within the property. Water damage and debris cleanup provisions shall be included. C. Insurance shall be in force the first day of the term of this Lease. D. Each insurance policy required by thi= Lease shall contain the following three clauses: 1. "This insurance shall not be cancelled, -9- limited in scope of coverage or nonrenewed until after 30 days' written notice has been given to the City Manager of the City of Newport Beach, c/o City Attorney's Office, 3300 Newport Blvd., Newport Beach, California 92663" 2. "It is agreed that any insurance maintained by the County of Orange or the City of Newport Beach will apply in excess of, and not contribute with, insurance provided by this policy." 3. "The County of Orange and the City of Newport Beach are added as additional insureds with respect to all operations or activities of the named insured at or from the property," provided, however; this` language shall not be required as a part of art, insurance policy carried by a contractor for fire and extended coverage during construction of any phase. E. Lessor shall retain the right, at any time, to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of Lessor, the insurance provisions in this Lease do not provide reasonably adequate protection for Lessor, based upon loss experience and/or the kind and extent of the risks which then exist, Lessor may require Lessee to obtain additional insurance in such amount as necessary. F. Lessor shall notify Lessee, in writing, of changes in the insurance requirements, and if Lessee does not deposit copies of acceptable insuran policies with Lessor, incorporating such changes within thirty days of receipt of such notice, Lessee shall be in default. G. Any and all fire, extended coverage or other insurance proceeds that become payable at any time during the term of this lease because of damage to, or destruction of, any building or improvement on the property, shall be paid to Lessee and applied by Lessee towards cost of repairing and restoring the damage or destroyed buildings or improvements as provided in paragraph 10 of this lease. H. The procuring of -uch required policy or policies of insurance shall not be construed to limit Lessee's liability hereunder nor to fulfill the indemnification provisions and requirements of this Lease. -10- 12. ASSIGNING, SUBLETTING AND ENCUMBERING PROHIBITED Lessee shall not mortgage, pledge, hypothecate, encumber, transfer, sublease or assign its interest in this lease, the property, or- any structure located on the property. The reasons for the prohibitions specified in this paragraph include, but are not necessarily limited to, the following: A. The property consists of tidelands subject to a public trust for specified purposes, and may not be transferred or conveyed by LESSOR. The assignment or transfer of the Aquatic Center's interest in this lease could violate the restriction or transfer. B. Lessor's power to enter into this Lease has been granted by vote of the people and the Joint Powers Agreement, (attached as Exhibit•"E")., and Lessor's power to lease the property is l anted to non-profit corporations involved in promoting sports involving human -powered watercraft. Any assignment of the Lease or encumbrance of the property could be inconsistent with the authority conveyed by the electorate; C. Lessor, given the purposes for which Lessee was formed, and limitations on its power as specified in its articles of incorporation, has greater assurance that Lessee will comply with the terms and conditions of this Lease and related approvals, than any other entity or organization. 13. EMINENT DOMAIN In the event the whole or part of the property or improvements is condemned by,a public entity in the lawful exer- cise of the power o2 eminent domain, this Lease shall cease -as to the part condemned upon the date possession of that part is taken by the public entity. If only a part is condemned and the taking of that part does not substantially impair the capacity of the remainder to be used for the purposes required in this Lease, Lessee shall continue to be bound by the terms, covenants and conditions of this Lease. If only a part is condemned and the taking of that part substantially impairs the capacity of the remainder to be used for the purposes required in this Lease, Lessee shall have %the election of: - 11 - i (I ) Terminating this Lease and being absolved of obligations hereunder which have not accrued at the date possession is taken by the public entity; or (2) Conti.nuing to occupy the remainder of the property and remaining bounds by the terms, covenants and conditions of this Lease. Lessee shall give notice in writing of his election hereunder, within 30 days of the date possession of the part is taken by the public entity. Lessor shall be entitled to receive and shall receive all compensation for the condemnation of all or any por- tion of the property by exercise of eminent domain. Lessee shall be. entitled 'to receive and shall receive all compensation foi-. the condemnation of all or any portion of the improvements constructed by Lessee on the leased premises by the exercise of eminent domain. 14. FACILITY MANAGEMENT PLAN The purpose of Lessor for entering into this Lease is to promote the development of sports involving human -powered watercraft, as well as facilities, programs and services related thereto, all to satisfy the needs of the general public. In furtherance of that purpose and to ensure that the operation of the facility is in accordance with the intent of the Lessor, Lessee shall submit a Facility Management Plan (FMP) to the Director of Parks, Beaches & Recreation for the City of Newport Beach for approval. The ;facilities shall be operated and administered in accordance with the approved FMP. The FMP shall, at a minimum, include the following: A. The programs, services and activities to be offered to members of the general public by the facility; B. ,The nature of any membership program pursuant to which any dues or fees are charged by Lessee; C. The hours of operation of the facil'ity; D. The portions of the facility that are avail- able for use by Lessor for the conduct of public recreation ,programs, together with the days and times that such space will be available; -12- E. Such other provisions as the Parks, Beaches do Recreation Director considers necessary to ensure that the facility is operated and maintained in accordance with the purpose of this Agreement. F. The right of City to modify the FMP in the event of operation of the Aquatic Center is inconsistent with this lease, Use Permit No. 3104, Coastal Development Permit No. 5-84-786 and other applicable law, rule or regulation. Lessee shall sumbit the proposed FMP to Lessor within 120 days after the effective date of this lease. Lessee is prohibited from using, or permitting others to use, the facility in any manner which is not authorized by, or inconsistent with, the approved FMP. The failure of Lessee to comply with the provisions of this paragraph after written notice by Lessor shall be considered a material breach of this lease. 15. UNLAWFUL USE: Lessee agrees that no improvement shall be erected, constructed or operated on the property, nor any business conducted on the property in violation of the terms of this Lease, or of any regulation, order, law, statute, bylaw, charter provision or ordinance of any Governmental agency having jurisdiction. Lessee shall not construct, maintain, or allow any sign upon the property, or improvements thereon, except as approved by Lessor, and further, such sign must be in compliance with the provisions of Chapter 20.02 of the Newport Beach Municipal Code. Lessee shall not discriminate against any person or class of persons by reason of sex, color, race, creed, national origin or age. Lessee shall make all of its services, programs ana facilities available to the public on fair and reasonable terms. ' 16. I NDE -T -AN I F I CAT I ON Lessee hereby hereby waives and claims and recourse against Lessor, including the right of contribution, for any loss or damage of or to persons or property in any way related to this agreement and Lessee's activities hereunder, except claims or liability arising from concurrent, active, or sole negligence of Lessor, or it's officers, agents, employees or representatives. Neither party shall request a iury apportionment. Lessee agrees to indemnify and hold harmless and -13- defend Lessor, its officers, agents, employees and representatives, from and against any and all claims, demands, losses, damages, costs, legal and investigation expenses, or liability of any kind or nature which Lessor or its officers, agents and employees may sustain or incur or which may be imposed upon them or any of them for injury to or death of persons, or damage to property as a result of, arising out of, or in any manner related to this Lease, or with the occupancy and use of the property or improvements thereon by Lessee, or any of Lessee's activities at or from the property, or its officers, agents, employees, subtenants, licensees, patrons or visitors, except liability arising out of the concurrent, active, or sole negligence or wilful misconduct of Lessor or its officers, agents, or employees. 17. TAXES AND ASSESSMENTS This Lease may create apossessory interest which is subject to the payn,cat of taxes levied on such interest. It is understood and agreed that all taxes and assessments, includ- ing but not limited to said possessory interest tax, which become due and payable upon the property or improvements thereon or upon fixtures, equipment or other property installed or constructed thereon shall be the full responsibility of Lessee, and Lessee shall cause said taxes and assessments to be paid promptly. 18. INSPECTION Lessor or its authorized representative shall have the right at all reasonable times to inspect the property to determine if Lessee is in compliance withthe terms and conditions of this Lease and Use Permit No. 3104. 19. SUCCESSORS -IN -INTEREST Unless otherwise provided in this Lease, the terms, covenants and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto', all of whom shall be jointly and severally liable hereunder. 20. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE If either party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive Governmental laws or regula- '.tions, or other cause without fault and beyond the control of the party obligated (financial inability excepted), performance of -14- r -i . 4 such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. 21. PARTIAL INVALIDITY If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall, in no way, be affected, impaired or invalidated thereby. 22. WAIVER OF RIGHTS The failure of Lessee or Lessor to insist upon strict performance of any of the terms, covenants or conditions of this Lease shall not be deemed a waiver of any right or remedy that Lessee or Lessee may have, and shall not be deemed a waiver of the right to require strict performance of all of tae- terms., covenants and conditions of the Lease thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant or condition of the Lease. 23. DEFAULT IN TERMS OF LEASE BY LESSEE Should Lessee default in the performance of any material covenant., condition or agreement contained in this Lease, and such default is not corrected within a reasonable time (as determined by Lessor) after Lessee receives written Notice of Default from Lessor, Lessor may: (A) Terminate this Lease. All rights of Lessee and those who claim under Lessee, stemming from this Lease shall end at the time of such termination; or (B) At Lessor's sole option, cure any such default by performance of any act, reasonably necessary to.. cure such default. 24. COSTS OF SUSTAINING AN ACTION FOR BREACH OR DEFAULT In the event either Lessor or Lessee commences legal action against the other, claiming a breach or default of this Lease, the prevailing party in such litigation shall be entitlea to recover from the other costs of sustaining such 'action, including reasonable attorney's fees as may be determined by the Court. -15- n, 25. RESERVATIONS TO LESSOR The property is accepted as is and where at by Lessee, subject to any and all existing easements and encumbrances. Lessor reserves the right to install, lay, con- struct, maintain, repair and operate such sanitary sewers, drains, storm water sewers, pipelines, manholes and connections; water, oil and gas pipelines; telephone and telegraph power lines and the appliances and appurtenances necessary or convenient in connection therewith in, over, upon, through, across and along the property or any part thereof, and to enter the property for any and all such purposes. Lessor also reserves the right to grant franchises, easements, rights-of-way and per- mits in, over, upon, through, across and along any and all por- tions of the property. No right reserved by Lessor in this clause shall be so exercised as to interfere unreasonably with Lessee's operations hereunder or to impair the security of any secured creditor of ucssee. 26. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION Upon termination of this Lease, including but not limited to, termination because of default by Lessee, Lessee shall execute, acknowledge and deliver to Lessor, within 30 days after receipt of written demand therefor, a good and sufficient Deed, whereby all right, title and interest of Lessor in the property is quitclaimed to Lessor. Should Lessee fail or refuse to deliver the required Deed to Lessor, Lessor may prepare and record a Notice, reciting the failure of Lessee to execute, acknowledge and deliver such Deed and said Notice shall be conclusive evidence of the termination of this Lease and of all right of Lessee or those claiming under Lessee in and to the property. 27. LESSOR'S RIGHT TO REENTER Lessee agrees to yield and peaceably deliver possession of the property t.o Lessor on the date of termination of this Lease, whatsoever the reason for such termination. Upon giving written notice of termination to Lessee, Lessor shall have the right to reenter and take posses- sion of the property on the date such termination becomes effec- tive without further notice of any kind and without institution of swmiary or regular legal proceedings. Termination of the .Lease and reentry of the property by Lessor shall, in no way, alter or diminish any obligation of Lessee under the Lease terms, and shall not constitute an acceptance or surrender. -16- 28. NOTICES All notices required by this lease shall be deemed to have been given when deposited in the United States mail, first class, postage prepaid, and addressed as follows: LESSOR City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 LESSEE Newport Beach Aquatic Center 200 Newport Center Drive Suite 301 Newport Beach, CA 92660 - IN WITNESS WHEREOF, the parties hereto have executed this Ground Lease, the day and year first above written. LESSEE APF UZ NEWPORT AQUATIC CENTER, INC. LESSO �J ATTEST Wanda Raggio City Clerk -17- -: