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HomeMy WebLinkAbout08 - Lease Extensions on Marinapark Site - Girl Scout House & Marinapark ResidencesC -1104 4-146& (3$) • • ITEM _8_ TO: Members of the Newport Beach City Council FROM: Dave Kiff, Assistant City Manager SUBJECT: Extensions to Leases at 1700 and 1770 West Balboa ( Marinapark Site): Girl Scout House and Marinapark Residences ACTION: BACKGROUND: FEB 2.6 2002 Discuss and hear public comment upon Lease Amendment proposals for the Girl Scout House and for the Marinapark residences. Please see the original staff report for this item for more detailed background about the Girl Scout House and the Marinapark residences. Because we were unable to provide the attached proposed 2nd Amendment and Extension of Lease to the residents of Marinapark well in advance of the February 26, 2002 meeting, we propose that your Council act upon the Recommended Action above and only discuss and hear public comment upon the 2nd Amendment and Extension of lease for Marinapark and the proposed 3rd Amendment to the City -Girl Scout Council lease at the 2 -26 meeting. Then, if appropriate, the Council may wish to consider the adoption of both lease amendments at the Council's March 12, 2002 meeting. On Friday, February 22, 2002, we e- mailed the Marinapark document to our contacts at Marinapark. ATTACHMENT: Attachment C — 2^d Amendment and Extension of Lease (for Marinapark) Please rote that the proposed 3*d Amendment (for the Girl Scout House) is already provided in the original Staff Report as Attachment A to that document. Ll • Page 2 The current lease includes the following requirements and stipulations - the Girl Scout Council must: • Pay the City $1 per year in rent. • Maintain the following insurance policies: — Injury to Persons — $1,000,000 per person or per accident; — Automobile — $1,000,000 for any one accident; — Council will reimburse City for City's costs to provide "adequate fire insurance' on buildings and improvements. • Allow the City and the community to use the House with prior City approval. • Obtain written approval of the City Manager prior to constructing any new improvements to the House. This Agenda Item asks the City Council to authorize the Mayor to execute a Lease Amendment with the Girl Scout Council of Orange County that amends the 1987 Lease to allow for a one -year extension to the Lease, with two one -year options exercisable at the City's discretion. Marinapark. The Marinapark mobile home park ( "Marinapark ") sits today on a 4.34 acre parcel at 1770 West Balboa Boulevard on the Balboa Peninsula between 18th and 15'" Streets. Marinapark has 58 mobilehome spaces and 924' of beach frontage facing Newport Bay. The City of Newport Beach acquired Marinapark from Pacific Electric Land Company in 1919. The initial use of the property after purchase was for a city campground (where campers paid 75¢ /day for waterfront camp areas and 50¢ /day for interior spaces) and later (in approximately 1955) to a "deluxe trailer court" for 120 trailers. A later renovation of Marinapark to accommodate larger trailers put the park at today's capacity of 58 mobilehomes. Today 56 of the coach spaces are occupied with a coach. The City and the residents at Marinapark ( "Lessees ") entered into a series of short- and medium -term leases relating to the Lessees occupancy at Marinapark. An abbreviated schedule follows: • 1973 Lease. The 1973 Lease extended an existing lease to September 30,1977 at which time all Lessees would "unconditionally and without contest vacate the premises without contest, legal and otherwise. Lessees further agree to waive any relocation assistance or any other assistance from Lessor resulting from vacating the premises." The 1973 Lease also dictated a new rental schedule through 1977. • 1976 Lease. A new 1976 Lease extended the Marinapark Lessees' tenancy through September 30,1985. The 1976 Lease offered an extension of five years "should the City Council find and determine ... that Marinapark is not required for any public trust purpose or other public purpose..." Rents at the time were set by the Lease and deemed to be "the fair market rental value' for the spaces. • 1985 Lease. The City Council did, indeed, state its intent that Marinapark should be converted "to a public recreation area' upon expiration of a new 1985 Lease. The 1985 Lease - with an expiration date of March 15, 2000 - Page 3 said that "the most significant rights obtained by Lessee,,and given up by City..." were: Lessees long -term right to occupy the Premises... Lessee's payment of "moderate rent ... and the advantage of limited rental increases in the future, while City gives up the right to charge higher rents initially and the right to impose future rental increases in excess of the cost -of -living index..." The 1985 Lease also outlines the rights and benefits "given up" by the Lessee, including- - City's right to convert Marinapark into a public recreational use upon Lease expiration. — The full waiver of any right of the Lessee to receive relocation benefits "or any other form of relocation assistance." • 2000 Amendment and Extension of Lease. On February 8, 2000, the City Council authorized the City to offer an amendment and extension ( "Lease Extension') to the 1985 Lease. The Lease Extension acknowledged several things - some new, others a restatement of information in the 1985 Lease. The Lease Extension acknowledged (among other things): — Uncertainty over the tidelands status of the land upon which Marinapark sits - arguably, if the land is State -owned and City- managed "tidelands," then the residential uses at Marinapark may not be appropriate, because tidelands are intended to be visitor - serving. The City's (at that time) review of up to eight responses to a Request for Proposals (RFP) for future uses and development of Marinapark, some of which envisioned the continuation of the mobilehome use. — The "substantial and important benefit" of the economic and personal rights of the Lessees under the 1985 Lease, including the Lessees' payment of below- market rent AND the ongoing waiver of Lessees' claims to any relocation benefits. Following the Council's adoption of the 2000 Lease Extension, all but one of Marinapark's Lessees signed and are residing in Marinapark on a tenancy based upon that document. Also in 2000, the City awarded more than $75,000 in rent rebates to about 18 Marinapark residents who remained in the Park and who showed to us that they had paid a $2,500.00 "transfer fee" upon the sale of their coach between 1985 and 1997. The residents asserted — and the City concurred — that these fees should not have been levied. Current Rent and Residency. In 2000, as a part of a Relocation Impact Analysis which is still in draft form, the City believed that, of the 58 coaches occupied at the time: • 16 of the coaches were full -time residences for lessees; • 6 of the coaches were full-time residences for persons other than the lessees; 36 coaches were part-time residences for lessees. Since 2000, we have followed a polity of the Council set two years ago that directs me to exercise the City's right of first refusal whenever a coach sells at Marinapark. If the price is reasonable, I am authorized to purchase a coach, Page 4 remove it, and place sod where the coach stood. While this reduces rent revenue, it also allows the City to displace fewer residents should Marinapark be closed at a future date. I have purchased and removed two coaches under this polity. Rents at Marinapark are the following: Space 11D (didn't sign 2000 Extension) $1,362.60 /month Bay- adjacent lots (As and Bs) $1,225.08 /month One lot distance from Bay (Cs and Ds) $ 924.83/month Two lot distances from Bay (Es) $ 864.80 /month Marinapark space rentals earn the City about $600,000 annually. Bendetti Property Management of Irvine manages Marinapark for the City at a fee of about $2,980 per month. Bendetti has been on a month- to-month contract since March 2000. Residents have been generally quite happy with Bendetti's on -site manager, Joe Albano, and its off -site manager, Bill Mecham. I have been very pleased with Bendetti's service over the past 4 years. Lease Recommendation. Because of the uncertainty in timing with any re-use or redevelopment of the Marinapark site, we recommend the following: • Extending tenancy at Marinapark for one year (to March 15, 2003) under substantially similar lease terms as the 1985 Lease as extended by the 2000 Lease Extension, with two additional one -year options (ending March 15, 2004 and March 15, 2005, respectively) that are exercisable at the City's sole discretion; • Authorize the City to receive and fund the removal of any coaches remaining at Marinapark at the end of the Lease term on behalf of the coach owners, should the coach owners desire us to do so. • Ninety days after a March 15, 2002 Notice of Rent Increase, raise all rents to full market rent based on rental market survey to be completed by Bendetti. Market rents are estimated to be: Bay- adjacent lots (As and Bs) $ 2,3W.00/ month One lot distance from Bay (Cs and Ds) $ 1,950.00 /month Two lot distances from Bay (Es) $ 1,800.00 /month Rents at this level would generate about $1,200,000 for the City annually, an increase of about $600,000. The Marinapark map is Attachment B to this document. The proposed Lease Extension is Attachment C. ATTACHMENTS: Attachment A - 3rd Amendment to Girl Scout House Lease Attachment B - Map of Marinapark Attachment C - Proposed New Lease Agreement with Marinapark Residents Page 5 ATTACHMENT A 3rd AMENDMENT to the 1987 Lease Renewal Agreement between the City of Newport Beach and the Girl Scout Council of Orange County This Third Amendment, made and entered into this 2611, day of February 2002, by and between the City of Newport Beach, a chartered municipal corporation ( "CITY ") and the Girl Scout Council of Orange County ( "SCOUTS ") is as follows: WHEREAS, Scouts have used the City's property at 1700 West Balboa as a meeting facility since December 1947; and WHEREAS, City owns or holds in trust the property associated with the permises and has leased the premises to Scouts under a Lease Renewal Agreement executed November 6,1987 ( "1987 Agreement ") and due to expire on March 12, 2002; and WHEREAS, the City and Scouts desire to extend the 1987 Agreement under identical terms as the 1987 Agreement and its 2nd Amendment for the period of one (1) year from the March 15, 2001 Agreement expiration date, with two additional one -year options exercisable at the City's discretion, and WHEREAS, this third one (1) year extension shall cause the 1987 Agreement to expire on March 15, 2003 or, if the Options are exercised, on March 15, 2004 or March 15, 2005. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, City and Scouts hereby agree to execute the Third Amendment to the 1987 Agreement (Exhibit A) as follows: I. TERM AND OPTIONS ... That the term of this lease renewal shall be for a period commencing on December 1, 1987 and ending on March 15,2= 2003. The City shall, at its discretion be authorized to extend the March 15 2003 expiration date for up to two consecutive one -year terms. Should the City desire to exercise an option, the City shall express its intent to exercise each option by providing g 0 days written notice in advance of the expiration date to the Girl Scout Council of Orange County. 0 • Page 6 IN WITNESS THEREOF, the parties hereto have executed this 3rd Amendment as of the day and year first above written. ATTEST: LAVONNE HARKLESS, City Clerk CITY OF NEWPORT BEACH TOD W. RIDGEWAY, Mayor GIRL SCOUT COUNCIL OF ORANGE COUNTY Mona Ware, Executive Director 71, • • i r ar w M w w w rr r s w w rw w w w w w w X��dWO I--- 1 U� AU 1111111111 IIN F , �� /ql y 1� 1 iiiiil�il�i �_ � �1Nit;'l�dild �L�d dlfd �1{I�! l�� billy b`I{Id 111141 dlll !1!Id -rN IN2: ovad _.� 4,N8Y6'I 1n11nnn �� .. .. •YNIIMma ALI'lllh _ M �n 3 n U ATTACHMENT C • Page 8 (Lease Extension/ New Lease Pending) ATTACHMENT C SECOND AMENDMENT AND EXTENSION OF LEASE This Amendment and Extension of Lease (Amended Lease), entered into this of day of , 2003 by and between the CITY OF NEWPORT BEACH, a municipal corporation and charter city (City) and (Lessee), is made with reference to the following facts, the materiality and existence of which is stipulated and agreed by the parties: A. City is the owner, and is in possession and control, of a parcel of real property, consisting of tidelands and /or uplands, located northerly of Balboa Boulevard and between approximately 15"' Street and 18th Street in Newport Beach, commonly known as Marinapark, generally described in Exhibit "A" (Property); B. The Property was under lease prior to the effective date of the Charter of the City of Newport Beach and, pursuant to the provisions of Section 1402 of the City Charter, the City Council is empowered to authorize execution of this Lease by the Mayor; C. Prior to the effective date of this Amended Lease, and pursuant to a lease dated March 24, 1976, (hereinafter "1976 Lease "), the City leased 58 mobilehome spaces on the Property pursuant to a standard lease which would have expired on September 30, 1985, subject to the right of the Lessee to extend the term for a five (5) year period under certain conditions; D. Prior to the expiration of the 1976 Lease, the City leased the same 58 mobilehome spaces on the Property pursuant to a lease that would have expired on March 15, 2000 (1985 Lease) but for an Amended Lease which expires March 15, 2002; E. The City Council actively solicited proposals for non - residential uses at Marinapark and, as of February 2002, has deemed a non - residential use of Marinapark the most appropriate land use for the property. As such, the City Council intends to close the mobilehome park no later than March 15, 2005. F. The Parties acknowledge that, subsequent to the effective date of the 1985 Lease, California State Lands Commission staff has discovered evidence that a portion of the Property consists of tidelands. The City and Lessee have, in the past, claimed that all or substantially all, of the Property leased for mobilehome residency purposes is uplands owned by the City. G. State Lands Commission staff has indicated that permanent residential use of tidelands is inconsistent with State statutory, decisional and constitutional law. H. The City Council finds and declares that the terms and conditions of this Amended Lease comply, and are consistent, with the Charter of the City of Newport Beach including, without limitation, the provisions of Sections 200 and 1402 of the Charter; The City Council also finds and declares that the provisions of this Amended Lease are consistent with the plans, policies, rules and ordinances of the City of Newport Beach. The City Council also finds that this Amended Lease is consistent with the General Plan and the Land Use Plan of the Local Coastal Program; J. The terms and conditions of this Amended Lease are in compliance, and consistent, with the provisions of the Mobilehome Residency Law (Section 798, et seq. of the Civil Code) and the State Zoning and Planning Act (Sections 65863.7 and 65863.8 of the Government Code). K. The purpose and intent of the Parties is to amend, and extend the term of, the 1985 Lease, and Amended Lease so that the Lessees may continue to reside on the property for the year commencing March 15, 2002 while the process of preparing the property for a different use continues. The City may allow short extensions of this Second Amended Lease but not past March 15, 2005. NOW, THEREFORE, the Parties do hereby mutually agree as follows: 1. DESCRIPTION OF PREMISES. The City leases, and Lessee accepts the lease of, the portion of the Property described as space as shown on Exhibit "X (Premises). 2. TERM. The tenancy created by this Amended Lease shall extend the expiration date of the 1985 Lease from March 15, 2000 to March 15, 2003, unless earlier terminated in accordance with the terms of this Amended Lease and the Mobilehome Residency Law, codified at Civil Code section 798 et.seq. There shall be no holdover on this Second Amended Lease. However, the City, at its sole option, may offer Lessee an extension of this Second Amended Lease. Such offer will be made, if at all, no later than by January 15th of the year the lease term expires on such terms and conditions as the City then establishes. If no such offer is made then there shall be no holdover. 3. USE OF PREMISES. A. The Premises shall be used only for residential purposes, and no business or commercial activity shall be conducted on the Premises. Permitted occupants are: i. Lessee; ii. An additional person if Lessee is living alone; iii. Family members entitled to occupy the premises pursuant to the iv. Mobilehome Residency Law; and v. Short term guests. The term "short term guest" shall mean any person who does not stay with Lessee for more than a total of twenty (20) consecutive days or a total of thirty (30) days in any calendar year. Other persons may occupy the premises with the prior written consent of the City. B. Lessee agrees that the primary residence requirement is fundamental to this lease, stipulates that the residency requirement will not constitute an undue burden or hardship on Lessee in light of the time allowed for compliance in the 1985 Lease, and, subject to the provisions of Section 8, Lessee agrees that the Premises shall be Lessee's primary residence unless this requirement is waived by the City Council due to hardship. Lessee shall provide satisfactory proof of residency to the City. C. Lessee agrees to comply with the rules and regulations of Marinapark (Exhibit "B ") and further agrees these rules and regulations may be amended as provided in the Mobilehome Residency Law or other relevant statute. 4. CONSIDERATION. A. Introduction. The City and Lessee agree that the terms and conditions of the 1985 Lease, the Amended Lease and this Second Amended Lease preserve and protect substantial and important rights and advantages, economic and personal, that each Party would not otherwise be entitled to receive. These economic and personal rights and benefits are the consideration for the 1985 Lease, the Amended Lease and this Second Amended Lease. The more important rights and benefits gained and given up by each Party are specified in this L C. paragraph and the Parties agree that, like the 1985 Lease, this Amended Lease should be interpreted such that each party receives the benefits and advantages identified in this section. Consideration to Lessee. (1) As consideration for Lessee's approval of this Amended Lease, City commits to maintain the Property as a mobilehome park until March 15, 2003. (2) The City also commits that if it decides that it desires to continue to let this space as a mobilehome space during the period from March 15, 2003 through March 15, 2005 that it will not terminate or fail to renew this Lease for the purpose of letting the space as a mobilehome space to another person. (3) Additional consideration for Lessee's approval of this Amended Lease is the right to occupy the Premises subject to the payment of rent in the sum of the rent shall be higher than the rent pai d Lease it is less than the determined to be beach front properties. through June 30, 2002 at which time Although this sum is substantially under the 1985 Lease and the Amended market rent for this space which had been based upon a survey of similar (4) As additional consideration, this Amended Lease supplements the benefits of the 1985 Lease as to the transferability of Lessee's interest. Consideration to City. As consideration to the City, Lessee agrees and acknowledges that City may convert Marinapark to a different use upon expiration of this Amended Lease, or shortly thereafter. Lessee agrees that if City chooses to close the mobilehome park on the Property it may do so without obligation to pay relocation benefits, or provide other forms of relocation assistance. Lessee acknowledges that the terms of the 1985 Lease, the Amended Lease and this Second Amended Lease constitute full and adequate mitigation of any adverse impact on Lessee of any conversion of the Property to a non - mobilehome use, and the extended term of the 1985 Lease and this Amended Lease gives Lessee sufficient time to secure replacement space in another mobilehome park or other alternative housing. Accordingly, LESSEE HEREBY WAIVES, GIVES UP THE RIGHT TO RECEIVE, AND RELEASES CITY FROM ANY OBLIGATION TO PAY, RELOCATION BENEFITS, OR ANY OTHER FORM OF RELOCATION ASSISTANCE OR OTHER PAYMENT OR CONSIDERATION THAT ARISE OUT OF, OR ARE IN ANY WAY RELATED TO: (1) THIS LEASE OR ANY FUTURE TENANCY; (2) THE ULTIMATE TERMINATION OF LESSEE'S TENANCY PURSUANT TO THE 1985 LEASE, THE AMENDED LEASE OR THIS SECOND AMENDED LEASE OR THE TERMINATION OR EXPIRATION OF ANY SUBSEQUENT TENANCY HOWEVER CREATED; (3) THE CONVERSION OF THE PREMISES TO ANY USE OTHER THAN A MOBILEHOME USE. (4) THE DISPLACEMENT OF LESSEE' FROM HIS AND /OR HER PRIMARY RESIDENCE; (5) ANY FEDERAL, STATE OR LOCAL LAW, PLAN & POLICY OR RULE WHICH RELATES TO SUCH DISPLACEMENT, OR REQUIRES THE MITIGATION OF THE IMPACTS CAUSED BY DISPLACEMENT. THIS RELEASE BY LESSEE, NOTWITHSTANDING SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES THAT: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR," RELEASES ALL CLAIMS OR LOSSES, WHETHER KNOWN, UNKNOWN, FORESEEN OR UNFORESEEN, WHICH LESSEE MAY HAVE AGAINST CITY. LESSEE UNDERSTANDS AND ACKNOWLEDGES THE SIGNIFICANCE AND CONSEQUENCE OF THIS RELEASE AND OF THIS SPECIFIC WAIVER OF SECTION 1542 AND ASSUMES FULL RESPONSIBILITY FOR ANY DAMAGES, LOSS OR CLAIM THAT LESSEE MAY INCUR AS A RESULT OF THE CONVERSION, TERMINATION, AND /OR DISPLACEMENT REFERRED TO ABOVE. LESSEE IS FREELY AND VOLUNTARILY EXECUTING THIS AMENDED LEASE AND LESSEE, IN EXECUTING THIS D. RELEASE, HAS NOT RELIED UPON ANY INDUCEMENTS, PROMISES OR REPRESENTATIONS MADE BY CITY OR ITS OFFICERS OR EMPLOYEES, OTHER THAN THE COMMITMENTS AND COVENANTS CONTAINED WITHIN THIS LEASE. Provisions related to Consideration (1) This Amended Lease constitutes notice that City reserves the right to physically convert the Premises to a non - mobilehome use on or about March 16, 2003. (2) Upon expiration of the term of this Amended Lease, Lessee shall, within sixty (60) days, remove any mobilehome or recreational vehicle, structure, improvement, personal property or equipment located upon the Premises. Upon the expiration of this sixty (60) day period, the City shall have the right to remove and dispose of any and all property improvement structures, personal property including the mobilehome, or any accessory equipment that remain on the Premises. The cost of removing such shall be born by the Lessee unless the Lessee has given written notice to the City not less than 30 days prior to the expiration of the Second Amended Lease or applicable renewal thereof which ever is later of Lessee's desire to abandon the mobilehome and transfers all title and interest in the mobilehome clear of all liens and encumbrances to City and the documents necessary to effectuate such transfer are delivered on or before the date of termination. If the City receives such written notice from the Lessee, City shall bear the cost of removing and disposing of all property improvement structures, personal property including the mobilehome, or any accessory equipment that remain on the Premises. 5. RENT. Lessee shall pay as rent, without deduction or offset, on the 1 st day of April 2002 the sum of , and on the first day of each month through June 2002. As of July 1st the rent shall be and shall be paid on the first of each month thereafter without deduction or offset. Rent for any fractional part of any month between the commencement date and the first date of the first full calendar month within the Term shall be prorated, and paid by Lessee to City along with the first full month of rent due hereunder. Lessee stipulates and agrees that this Amended Lease constitutes the ninety (90) day written notice of rental increases by the Mobilehome Residency Law and Lessee acknowledges that no additional written notice need be given by City; provided, however, City may provide Lessee with ninety (90) days written notice of the precise amount of any rental increase authorized by this paragraph and City and Lessee agree that such notice shall not constitute a waiver of City's right to rely upon the adequacy of the notice provisions in this paragraph. Lessee acknowledges that this Amended Lease may create a possessory interest subject to property taxation and that Lessee may be subject to the payment of property taxes levied on such interest. Lessee shall pay, in addition to rent and before delinquency, all taxes, assessments, license fees and other charges (Taxes) that are, during the Term, levied or assessed against Lessee's interest in the premises pursuant this Amended Lease or any personal property installed on the premises. The City agrees once the rental rate which commences July 1, 2002 becomes effective the rent will not be raised during the period from July 1, 2002 to March 15, 2003. If the City offers a renewal of this Second Amended Lease the City reserves the right to increase rent at such time. 6. RELEVANT STATUTES AND RULES. The Mobilehome Residency Law requires this Amended Lease to contain, among other things, the rules and regulations of Marinapark and the language of the Mobilehome Residency Law. The rules and regulations of Marinapark are attached as Exhibit "B," the provisions of the Mobilehome Residency Law are attached as Exhibit "C," and both documents are incorporated into this Amended Lease by reference. The Marinapark rules and regulations and the Mobilehome Residency Law may be amended or modified from time to time, and these amendments and modifications shall be deemed to be incorporated into the documents attached as Exhibits "B" and "C" when effective. 7. LATE CHARGE. If the entire rent owed by Lessee is not received by City by the 6th day following its due date, then, without any requirement for notice to Lessee, Lessee shall pay to City a late charge of thirty five dollars ($35.00). The parties agree that such a late charge represents a fair and reasonable estimate of the costs City will incur by reason of any late payment of rent. An acceptance of a late charge by City shall not constitute a waiver of Lessee's default with respect to rent, or prevent City from exercising any of the rights or remedies granted by this Amended Lease. 8. SALE OR ASSIGNMENT. Lessee may sell the mobilehome located on the premises pursuant to the rights, and subject to the obligations, of Lessee under the Mobilehome Residency Law and any other applicable statutes. If the mobilehome that is the subject of the sale or transfer, is to remain in the park, or if Lessee proposes to assign Lessee's interest in this Lease to any person or persons who is (are) to reside on the premises, Lessee and /or the proposed transferee must do the following: A. Lessee must give notice of the sale or assignment to City prior to close of escrow. B. The sale or assignment shall not be effective unless the City has given prior written approval, the transferee has executed the assignment of lease form provided by City, and the transferee has expressly agreed to be bound by the waivers and releases provided in this Amended Lease. C. Lessee agrees that occupancy of the Premises shall be limited as provided in Section 3 and Lessee agrees not to sublease or otherwise transfer any partial interest in this Amended Lease. D. City shall approve any such transfer, if the transferee has the financial ability to pay the rent and charges and otherwise comply with the terms and conditions of this Lease, provided, however, City may withhold approval if it determines that, based upon the transferee's prior tenancies, the transferee will not comply with the Rules and Regulations of Marinapark (Exhibit "B "). E. City shall not approve any transfer or assignment of any interest in this Amended Lease that would permit the installation of any mobilehome or structure that exceeds twelve feet in height. F. Should Lessee, during the term of this Amended Lease, elect to sell or assign its interest in this Amended Lease, City shall have the right of first refusal to acquire the interest on such terms and conditions as may be acceptable to Lessee, and on failure of the parties to agree on terms within ten (10) days after written notice thereof from Lessee, Lessee shall be free to sell or assign Lessee's Interest in this Amended Lease, subject to the terms and conditions of this Amended Lease. G. Notwithstanding any other provision in this Amended Lease, Lessee shall have the right to assign its interest in this Amended Lease to a spouse, son and /or daughter without any requirement that City be given the right of first refusal to acquire the interest, provided, however, the premises shall be used as the primary residence of the assignee and the assignee shall be bound by all provisions of this Amended Lease, including, without limitation, the waiver of relocation assistance. 9. UTILITIES. A. The City shall not provide electricity or telephone service. Lessee shall make arrangements directly with the utilities furnishing the services and promptly pay all charges. B. The City shall provide Lessee with water and gas service. The charge to Lessee for such service shall be based on the charges paid by Lessee as of February 1, 2002. Charges for gas and water service shall be increased or decreased on the first day of October. C. The charges for gas and water service shall be paid when rent is due, and is in addition to the obligation to pay rent. In the event Lessee fails to pay charges for water or gas service within ten days after the amount is due, Lessee shall pay to City a late charge of thirty-five dollars ($35.00). D. In the event City provides both master meter and submeter service of utilities to Lessee, the cost of the charges for each billing period shall be separately stated and shall contain opening and closing readings of the meter. In such event, City shall post rates charged by the appropriate utility in a conspicuous place. E. City shall not be liable for any loss, damage or injury and Lessee shall not be entitled to any abatement or reduction of rent, by reason of City's failure to furnish any utility or service if the failure is caused by accident, breakage, repairs, maintenance, or any other cause beyond the reasonable control of City. 10. MAINTENANCE OF LANDSCAPING AND IMPROVEMENTS. It is the responsibility of the City to provide and maintain the physical improvements in the common facilities in good working order and condition and with respect to sudden or unforeseeable breakdowns, management shall have reasonable period to repair the sudden and unforeseeable breakdown or deterioration and bring the improvements into good working order and condition after management knows or should have known of the breakdown. Such period shall be not more than 30 days unless there exist exigent circumstances justifying a delay and will be done as soon as possible concerning items of affecting health and safety. Lessee shall, at their cost and expense, maintain, in good order and condition, any mobilehome, cabana, or other improvement located on the premises. Lessees also agree that all landscaping on the premises shall be limited to three feet (3') in height to preserve views and open space. The City may charge a reasonable fee for services relating to the maintenance of the premises upon which the mobilehome is located in the event Lessee fails to maintain the property in accordance with the provisions of this Amended Lease and the rules and regulations of Marinapark (Exhibit "B ") after giving written notification to Lessee and Lessee's failure to comply within fourteen (14) days from the date of notice. The notice shall contain all information required by the Mobilehome Residency Law. 11. PHYSICAL IMPROVEMENTS AND SERVICES. The physical improvements to be provided Lessee during the term of this Amended Lease include the nonexclusive right to use all of the common areas and common facilities located within Marinapark, such as streets, nonrestricted parking areas, laundry facilities, restrooms and showers located in the common areas and common facilities and designated for use by residents. The services to be provided by City during the term of this Amended Lease include the services to be provided by the Marinapark manager and other employees and officers of City, the utilities to be provided by City specified in Section 9, and the maintenance of all common areas and common facilities in good condition. It is the responsibility of the management to provide and maintain physical improvements in the common facilities in good working order and condition. In the case of a sudden or unforeseeable breakdown or deterioration of these improvements (failure), the management shall have a reasonable period of time to repair the failure after City knows or should have known of the failure. For purposes of this Section a reasonable period to repair the failure shall be as soon as possible in situations affecting a health or safety condition, and shall not exceed thirty (30) days in any other case except where exigent circumstances justify a delay. It is understood by all parties hereto that this mobilehome park may close as early as March 15, 2003 and therefore in order to continue to offer below market rent and in exchange for the City's concession in offering this Second Amended Lease it is agreed that the City need not invest any funds in repairing or replacing any facility so that it last longer than the term of this 12. lease and the City may decrease cease offering such amenity. No facility which affects health and safety will be ceased during the term of this Second Amended Lease. The City retains the right to amend or modify the Marinapark Rules and Regulations, the terms of this Lease, and the nature of the physical improvements or services to be provided, after complying with the provisions of the Mobilehome Residency Law and other applicable law. The right to amend the terms of this Amended Lease, the Marinapark rules and regulations, and the physical improvements and services to be provided by City, include, without limitation, the right to reduce the size of, or eliminate, any physical improvement, common area, common facility, or equipment, provided, however, no changes shall be made to the provisions of this Amended Lease, specifying the term of the Amended Lease or the rent to be charged unless those changes or amendments are permitted by other provisions of this Amended Lease. 13. RIGHT OF ENTRY. Lessee, subject to the right of revocation as set forth in the Mobilehome Residency Law, hereby grants written consent to City to enter the premises and Lessee's mobilehome for the purpose of improving, maintaining, repairing or replacing gas, water and sewage systems owned and maintained by City. Any damage, loss or injury to Lessee's home, property of Lessee, or the premises which results from efforts of City to maintain, repair, improve or replace the gas, water or sewage systems, shall be the sole responsibility of Lessee, and City shall not be responsible for reimbursing any cost or expense incurred by Lessee as a result of such efforts, nor shall City be responsible for repairing, replacing or otherwise restoring the mobilehome, the premises or any improvements thereon, to the state or condition immediately prior to the maintenance, replacement or repair efforts. The City also reserves the right to enter the premises for other purposes as specified In the Mobilehome Residency Law. 14. NOTICE REQUIRED BY CIVIL CODE 42079.10(a) . The California Department of Justice, sheriffs departments, police departments serving jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access a data base of the locations of persons required to register pursuant to paragraph (1) of subdivision (a) of section 290.4 of the Penal Code. The database is updated on a quarterly basis and a source of information about the presence of these individuals in any neighborhood. The Department of Justice maintains a Sex Offender Identification Line through which inquiries about individuals may be made. This is a "900" telephone service. Callers must have specific information about individuals they are checking. Information regarding neighborhoods is not available through the "900" telephone service. 15. HOLD HARMLESS. Lessee covenants to indemnify, defend and hold City, its officers, agents and employees harmless from any and all claims or demands of any name or nature whatsoever arising out of, or incident to, the use and occupancy of the Premises, and to indemnify City for any cost, liability, or expense caused by or arising out of any injury or death of persons or damage to property which may occur upon or about the premises or caused by or arising out of any activities or omission of Lessee, or Lessee's agents, employees, licensees and /or invitees, including, without limitation, injury or death of Lessee, or Lessee's agents, employees, licensees and invitees and damage to their property or Lessee's property, except for any damage or injury of any kind arising out of the sole negligence, fraud or willful misconduct of City, its officers, agents, or employees. Lessees, as a material part of the consideration under this Amended Lease, hereby waive all claims against City for any damage or loss from any cause arising at any time, including, but not limited to fire, theft, Acts of God, vandalism or any physical damage while the mobilehome remains on the Property, unless caused by the negligence, fraud or willful misconduct of City's agents, officers or employees. Lessee agrees to indemnify and hold City, its officers, agents and employees harmless from and on account of any damage or injury to any person or equipment in or on the mobilehome arising from any cause or from the negligence of a Lessee, his or her family or guests. Since a substantial portion of the present value of Lessee's mobilehome or coach Is attributable to the value of the premises and the proximity of the premises to Newport Bay, and not the value of the structural improvement, Lessee, in addition to the other commitments specified in paragraph 4, agrees to indemnify and hold City, its officers agents, and employees harmless from any and all loss or injury of any nature whatsoever arising out of or attributable to such a change of use and the requirement that Lessee remove his/her mobilehome and other property from the Property. 16. TERMINATION. A. Lessee may terminate this Amended Lease without any further liability to City, upon sixty (60) days' written notice to City and upon condition that all persons occupying the premises terminate their tenancy within that period and remove the mobilehome and all other improvements, from the premises. B. The City may terminate this Amended Lease for the reasons specified, and according to the procedures set forth, in the Mobilehome Residency Law. C. In addition to the rights specified in subparagraph B, the City reserves the right to terminate this Amended Lease in the event: (1) a court of competent jurisdiction determines that residential use of the property is inconsistent, or in conflict, with the provisions of the public trust imposed upon those portions of the Property that constitute State tidelands, or that the residential use is inconsistent with any provision of the State constitution or State law; (2) there is a major failure in one or more of the public utilities furnished Lessee by City, and, in the opinion of City, the cost of repairing the system is excessive when viewed in light of the highest and best use of the Property. D. The waivers and releases relative to relocation benefits or assistance shall operate to preclude recovery of same by Lessee in the event this Lease is terminated pursuant to the provisions of this paragraph. 17. ATTORNEYS' FEES. Should either City or Lessees be required to employ counsel to enforce the terms, conditions and covenants of the 1985 Lease or this Amended Lease, the prevailing party shall recover all reasonable attorneys' fees (and court fees if applicable) incurred therein whether or not court proceedings were commenced. 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the City contained in this Amended Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of City's right to exercise any other. 19. NO WAIVER. No delay or omission of the City to exercise any right or power arising from any omission, neglect or default of the Lessees shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the Lessees or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Amended Lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this Amended Lease. 20. COMPLIANCE WITH LAWS. Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California and the City of Newport Beach or any other governmental body or agency having lawful jurisdiction over the premises and/or the Property; and Lessee further agrees to comply with all the Rules and Regulations of Marinapark. 21. A. Lessee acknowledges having received and read a copy of the 1985 Lease, the Amended Lease and this Second Amended Lease, the provisions of the Mobilehome Residency Law (Exhibit "C ") as presently constituted, and the Marinapark Rules and Regulations (Exhibit "B "). B. The Property is currently zoned unclassified and there are no conditional use permits or other permits required to operate the Property as a mobilehome park. The City of Newport Beach owns the Property except to the extent the property is determined to be tidelands and subject to the public trust applicable to tidelands. 22. ENTIRE AGREEMENT. This Amended Lease and the documents referred to in this Amended Lease represent the entire agreement between City and Lessee. 23. NOTICES. All notices and other communications shall be in writing, shall be sent by first class registered mail or certified United States mail, postage prepaid, and shall be deemed completed at the expiration of seventy -two (72) hours after the day of mailing addressed: A. To Lessor: City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA, 92658 With a copy to: City Clerk's Office City of Newport Beach 3300 Newport Blvd. Newport Beach, CA, 92658 or at such other addresses as Lessor shall have furnished to Lessee; and B. To Lessee: By delivering a copy to the Lessee personally; C. If Lessee be absent from the mobilehome, by leaving a copy with some person of suitable age and discretion who may be occupying the mobilehome; or D, If no one can be found, then by affixing a copy of the notice in a conspicuous place on the premises or mobilehome and also sending a copy through the mail addressed to the Lessee. E. All other provisions of the Lease shall remain in force and effect with their original form. 24 TIME OF ESSENCE. Time is of the essence in this Agreement and each and every provision thereof. 25. EFFECTIVE DATE The Parties agree that the effective date of this Amended Lease is March 15, 2002 whether executed before or after that date. IN WITNESS WHEREOF, the parties have caused, this Lease to be executed the day and year first above written. LESSEE By: IME ACKNOWLEDGE AND AM /ARE AWARE OF THE PROVISIONS OF THIS AMENDED LEASE INCLUDING THE RELEASE AND WAIVER PROVISIONS OF SECTION 4 CITY OF NEWPORT BEACH a municipal corporation. By: Homer Bludau, City Manager APPROVED AS TO FORM: By: Robin L. Clauson Assistant City Attorney EXHIBIT A I N 0.1 ali hi, OWES ITEM 8 TO: Members of the Newport Beach City Council FROM: Dave Kiff, Assistant City Manager SUBJECT: Extensions to Leases at 1700 and 1770 West Balboa ( Marinapark Site): Girl Scout House and Marinapark Residences RECOMMENDED 1 -- Authorize the Mayor to execute Amendment to Lease for Girl Scout House; ACTIONS: and 2 -- Authorize the Mayor to execute new Lease Agreement between the City and each resident of Marinapark. BACKGROUND: This Agenda Item recommends a lease extension for the Girl Scout House and a new lease agreement (or extension) for the residents of Marinapark. The current uses of the property include Las Arenas Park, Marinapark, the Girl Scout House, and the American Legion's meeting hall and bar /restaurant. As a re -use proposal for the property goes through an Environmental Impact Report (EIR), we need to extend the current leases. Girl Scout House. The Girl Scout Council of Orange County has used a City building at 1700 West Balboa (known as the "Girl Scout House') since December 1,1947. The current lease - entered into on November 6, 1987 — expires on March 15, 2002. According to the City's files on the property known as the "Girl Scout House," the City and the Girl Scout Council of Orange County first entered into a lease agreement for the House in December of 1947. Here is a brief summary of the lease history of the site: • 1947 Lease -10 years, expired in November 1957 • 1957 Renewal -10 years, expired in November 1967. • 1967 Renewal -10 years, expired in November 1977. • 1977 Renewal -10 years, expired in November 1987. • 1987 Renewal -13 years, set to expire in March 2000. • 1999 Amendment - Extended the 1987 Lease to March 15, 2001. • 2000 Amendment -- Extended the 1987 Lease to March 15, 2002. During the course of this relationship, the City has either not charged a rent or charged the nominal rent of $1 per year to the Council for the Council's use of the House. The Lease renewals listed above generally included only changes in the term and changes in the level of liability insurance required of the Council. Newport Beach City Council Page 2 The current lease includes the following requirements and stipulations - the Girl Scout Council must: • Pay the City $1 per year in rent. • Maintain the following insurance policies: Injury to Persons — $1,000,000 per person or per accident; Automobile -- $1,000,000 for any one accident; Council will reimburse City for City's costs to provide "adequate fire insurance' on buildings and improvements. • Allow the City and the community to use the House with prior City approval. • Obtain written approval of the City Manager prior to constructing any new improvements to the House. This Agenda Item asks the City Council to authorize the Mayor to execute a Lease Amendment with the Girl Scout Council of Orange County that amends the 1987 Lease to allow for a one -year extension to the Lease, with two one -year options exercisable at the City's discretion. Marinapark. The Marinapark mobile home park ( "Marinapark ") sits today on a 4.34 acre parcel at 1770 West Balboa Boulevard on the Balboa Peninsula between 18th and 15th Streets. Marinapark has 58 mobilehome spaces and 924' of beach frontage facing Newport Bay. The City of Newport Beach acquired Marinapark from Pacific Electric Land Company in 1919. The initial use of the property after purchase was for a city campground (where campers paid 754/ day for waterfront camp areas and 50¢ /day for interior spaces) and later (in approximately 1955) to a "deluxe trailer court" for 120 trailers. A later renovation of Marinapark to accommodate larger trailers put the park at today's capacity of 58 mobilehomes. Today 56 of the coach spaces are occupied with a coach. The City and the residents at Marinapark ( "Lessees ") entered into a series of short- and medium -term leases relating to the Lessees' occupancy at Marinapark. An abbreviated schedule follows: • 1973 Lease. The 1973 Lease extended an existing lease to September 30, 1977 at which time all Lessees would "unconditionally and without contest vacate the premises without contest, legal and otherwise. Lessees further agree to waive any relocation assistance or any other assistance from Lessor resulting from vacating the premises." The 1973 Lease also dictated a new rental schedule through 1977. • 1976 Lease. A new 1976 Lease extended the Marinapark Lessees' tenancy through September 30, 1985. The 1976 Lease offered an extension of five years "should the City Council find and determine ... that Marinapark is not required for any public trust purpose or other public purpose..." Rents at the time were set by the Lease and deemed to be "the fair market rental value" for the spaces. • 1985 Lease. The City Council did, indeed, state its intent that Marinapark should be converted "to a public recreation area" upon expiration of a new 1985 Lease. The 1985 Lease - with an expiration date of March 15, 2000 - Page 3 said that "the most significant rights obtained by Lessee, and given up by City..." were: Lessees long -term right to occupy the Premises... Lessee's payment of "moderate rent ... and the advantage of limited rental increases in the future, while City gives up the right to charge higher rents initially and the right to impose future rental increases in excess of the cost -of- living index..." The 1985 Lease also outlines the rights and benefits "given up' by the Lessee, including: City's right to convert Marinapark into a public recreational use upon Lease expiration. The full waiver of any right of the Lessee to receive relocation benefits "or any other form of relocation assistance" • 2000 Amendment and Extension of Lease. On February 8, 2000, the City Council authorized the City to offer an amendment and extension ( "Lease Extension ") to the 1985 Lease. The Lease Extension acknowledged several things - some new, others a restatement of information in the 1985 Lease. The Lease Extension acknowledged (among other things): Uncertainty over the tidelands status of the land upon which Marinapark sits - arguably, if the land is State -owned and City- managed "tidelands," then the residential uses at Marinapark may not be appropriate, because tidelands are intended to be visitor - serving. The City's (at that time) review of up to eight responses to a Request for Proposals (RFP) for future uses and development of Marinapark, some of which envisioned the continuation of the mobilehome use. The "substantial and important benefit" of the economic and personal rights of the Lessees under the 1985 Lease, including the Lessees' payment of below - market rent AND the ongoing waiver of Lessees' claims to any relocation benefits. Following the Council's adoption of the 2000 Lease Extension, all but one of Marinapark's Lessees signed and are residing in Marinapark on a tenancy based upon that document. Also in 2000, the City awarded more than $75,000 in rent rebates to about 18 Marinapark residents who remained in the Park and who showed to us that they had paid a $2,500.00 "transfer fee" upon the sale of their coach between 1985 and 1997. The residents asserted -- and the City concurred -- that these fees should not have been levied. Current Rent and Residency. In 2000, as a part of a Relocation Impact Analysis which is still in draft form, the City believed that, of the 58 coaches occupied at the time: . 16 of the coaches were full -time residences for lessees; 6 of the coaches were full -time residences for persons other than the lessees; • 36 coaches were part -time residences for lessees. Since 2000, we have followed a policy of the Council set two years ago that directs me to exercise the City's right of first refusal whenever a coach sells at Marinapark. If the price is reasonable, I am authorized to purchase a coach, Page 4 remove it, and place sod where the coach stood. While this reduces rent revenue, it also allows the City to displace fewer residents should Marinapark be closed at a future date. I have purchased and removed two coaches under this policy. Rents at Marinapark are the following: Space 11D (didn't sign 2000 Extension) $1,362.60 /month Bay- adjacent lots (As and Bs) $1,225.08 /month One lot distance from Bay (Cs and Ds) $ 924.83 /month Two lot distances from Bay (Es) $ 864.80 /month Marinapark space rentals earn the City about $600,000 annually. Bendetti Property Management of Irvine manages Marinapark for the City at a fee of about $2,980 per month. Bendetti has been on a month-to -month contract since March 2000. Residents have been generally quite happy with Bendetti's on -site manager, Joe Albano, and its off -site manager, Bill Mecham. I have been very pleased with Bendetti's service over the past 4 years. Lease Recommendation. Because of the uncertainty in timing with any re -use or redevelopment of the Marinapark site, we recommend the following: • Extending tenancy at Marinapark for one year (to March 15, 2003) under substantially similar lease terms as the 1985 Lease as extended by the 2000 Lease Extension, with two additional one -year options (ending March 15, 2004 and March 15, 2005, respectively) that are exercisable at the City's sole discretion; • Authorize the City to receive and fund the removal of any coaches remaining at Marinapark at the end of the Lease term on behalf of the coach owners, should the coach owners desire us to do so. • Ninety days after a March 15, 2002 Notice of Rent Increase, raise all rents to full market rent based on rental market survey to be completed by Bendetti. Market rents are estimated to be: Bay- adjacent lots (As and Bs) $ 2,300.00 /month One lot distance from Bay (Cs and Ds) $ 1,950.00 /month Two lot distances from Bay (Es) $ 1,800.00 /month Rents at this level would generate about $1,200,000 for the City annually, an increase of about $600,000. The Marinapark map is Attachment B to this document. The proposed Lease Extension is Attachment C. ATTACHMENTS: Attachment A - 3rd Amendment to Girl Scout House Lease Attachment B - Map of Marinapark Attachment C - Proposed New Lease Agreement with Marinapark Residents Page 5 ATTACHMENT A 3rd AMENDMENT to the 1987 Lease Renewal Agreement between the City of Newport Beach and the Girl Scout Council of Orange County This Third Amendment, made and entered into this 26th day of February 2002, by and between the City of Newport Beach, a chartered municipal corporation ( "CITY ") and the Girl Scout Council of Orange County ( "SCOUTS ") is as follows: WHEREAS, Scouts have used the City's property at 1700 West Balboa as a meeting facility since December 1947; and WHEREAS, City owns or holds in trust the property associated with the permises and has leased the premises to Scouts under a Lease Renewal Agreement executed November 6,1987 ( "1987 Agreement ") and due to expire on March 12, 2002; and WHEREAS, the City and Scouts desire to extend the 1987 Agreement under identical terms as the 1987 Agreement and its 2nd Amendment for the period of one (1) year from the March 15, 2001 Agreement expiration date, with two additional one -year options exercisable at the City's discretion, and WHEREAS, this third one (1) year extension shall cause the 1987 Agreement to expire on March 15, 2003 or, if the Options are exercised, on March 15, 2004 or March 15, 2005. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, City and Scouts hereby agree to execute the Third Amendment to the 1987 Agreement (Exhibit A) as follows: I. TERM AND OPTIONS ... That the term of this lease renewal shall be for a period commencing on December 1, 1987 and ending on March 15, 2-QQ 2003. The City shall, at its discretion, be authorized to extend the March 15 2003 expiration date for up to two consecutive one -year terms. Should the City desire to exercise an option, the City shall express its intent to exercise each option by providing 30 days written notice in advance of the expiration date to the Girl Scout Council of Orange County. IN WITNESS THEREOF, the parties hereto have executed this 3rd Amendment as of the day and year first above written. ATTEST: LAVONNE HARKLESS, City Clerk CITY OF NEWPORT BEACH TOD W. RIDGEWAY, Mayor GIRL SCOUT COUNCIL OF ORANGE COUNTY Mona Ware, Executive Director Page 6 Page 7 ATTACHMENT B IALUlHY,a `.9„ tIHIH %3 uu Ia M 1 y � O I'. ! W 0 1 J I j11 °� • ° s i i J oM Qpp g ! r i • i II I, Jqil r i _ Page 8 ATTACHMENT C (Lease Extension/ New Lease Pending)