HomeMy WebLinkAbout05 - Concession at Corona del MarCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. '
February 12, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office Revenue Division, Administrative Services
Dave Kiff, Assistant City Manager Evelyn Tseng, Income Contract Administrator
949- 644 -3002 949 - 644 -3153
DKiff(a)citv.newport- beach.ca.us ETsengCo city.newport- beach.ca.us
SUBJECT: Award of Concession at Corona del Mar State Beach
ISSUE:
Who should be selected as the next food, beverage, and beach goods concessionaire at
Corona del Mar State Beach?
RECOMMENDATIONS:
1) Select Fuji Grill, Inc. as the next concessionaire at CDM State Beach based on the proposal
submitted by John Lee in response to City's Request for Proposals for the CDM
concessionaire dated August 31, 2007.
2) Authorize the Mayor and City Clerk to execute a Concession Agreement based on the terms
attached to this report.
DISCUSSION:
From November 1991 through September 2005, Kilmer Enterprises managed the Corona del
Mar State Beach concession. During that time, Kilmer Enterprises paid 45% of its monthly
gross receipts for rent. In the last calendar year of its operation, 2004, Kilmer Enterprises paid
$100,420.00 to the City.
In September 2005, the concession agreement with Kilmer Enterprises was terminated in order
to commence construction of the Corona del Mar Beachgoer Amenities Improvement Project
(the "Project "). The Project included 1043 square feet for a concession facility. The Project
opened in summer 2006 without a concessionaire.
Council Policy F -7 requires the City to "seek revenue equivalent to the open market value of the
highest and best use; and, whenever possible the City shall conduct an open bid or proposal
process to insure the highest financial return" in negotiations regarding the lease of non-
residential income property.
Process. On October 27, 2005, the City issued a Request for Proposals for the concession
operations at Corona del Mar State Beach. After careful review, City staff recommended, and
Award of CDM Concession
February 12, 2008
Page 2
City Council selected, Kilmer Enterprises to be the concessionaire. Unfortunately, an
agreement could not be reached. On April 16, 2007, the City issued another Request for
Proposals. At that time, City staff recommended Rudy's Pub and Grill to be the concessionaire,
but City Council rejected staff's recommendation based on Rudy's request for a liquor license.
On August 31, 2007, City issued its third Request for Proposals.
The City received six proposals:
1. Beach Concepts, Inc. - $72,000 base rent for first 3 years, 5% increase for 40' and 5`" years.
2. Fujiyama Grill - $80,000 or 15% of gross, whichever is greater.
3. Gallo's - $3.00 /sq. ft ($37,548/year) or 15% of Gross Receipts, whichever is greater.
4. Gina's Pizza — declined City's RFP offer, but did not counter -offer.
5. Nickersons - $80,000 or 15% of gross, whichever is greater.
6. Purple Urchin - $14250,000 - 12% of gross receipts; $250,000+ - 15% of gross receipts
Recommendation. City staff selected Fuji Grill, Inc., an established business in Newport
Beach with franchises throughout Orange County, because it provided the most favorable
response based on rent, menu, references and experience.
Council Subcommitee Review. On January 3, 2008, Council Members Steve Rosansky and
Nancy Gardner met with staff to discuss Fuji Grill's proposal. Mr. Rosansky requested that John
Lee, the principle owner of Fuji Grill, Inc. provide a personal guarantee. Ms. Gardner wanted to
ensure that the outdoor dining furniture would not impede pedestrian flow, particularly during the
summer months, and wanted to make sure the concession would only provide take -out — that
there would be no table service. Mr. Lee agreed, later, to these terms.
There was also some discussion about a parking program at CdM State Beach that would help
the Tenant's customers defray the cost of parking at CdM. The subcommittee and John Lee
agreed upon the program described below.
Proposed Terms of Agreement. If the Council approves this item, it would also authorize the
Mayor to enter into a contract based substantially on the provisions of the Lease Agreement
attached to the August 31 RFP and the following negotiated terms:
TERM: 5 years, with two 5 -year extensions;
RENT: The greater of $80,000 /year, as adjusted annually by CPI, or 15% of gross sales,
whichever is greater;
RENT COMMENCEMENT: Rent Commencement Date will be the earlier of Memorial Day or
3 months after the execution of the agreement;
TENANT IMPROVEMENTS: Fuji Grill shall install all required fixtures and improvements, as
may be required by the Couni
regulations. Fuji Grill shall receive
the first 12 months rent (base ar
Commencement Date, or the cost
City shall own the improvements
Agreement;
i Health Code and /or City
a rent credit for the lesser of
J percentage) from the Rent
of the Tenant Improvements.
upon the termination of the
Award of CDM Concession
February 12, 2008
Page 3
EXCLUSIVE CONCESSION: City shall not enter into another agreement for concessions or
beach rentals with another entity at CdM State Beach for the
term of this Agreement;
OUTDOOR DINING: Fuji Grill shall be permitted to provide a maximum of 12 small tables and
24 chairs outside. Fuji Grill may rearrange dining tables and chairs
depending on weather and customer demand, so long as the number of
chairs do not exceed 24, and the location of the tables and chairs are on
the concrete pad and do not impede pedestrian flow;
PARKING: City shall provide one (1) designated parking space for customer food pickup and
vendor loading and unloading.
PROPOSED PARKING PROGRAM: City intends to implement a new parking
program at the CdM parking lot in which a daily rate shall be imposed from
Memorial Day through September, and an hourly rate, with a Pay Machine, from
October through the Friday before Memorial Day. If a Pay Machine (or similar)
program is not in place by September 2, 2008, then City and Tenant shall
participate in the following parking refund program:
FALLBACK PARKING PROGRAM: Tenant shall reimburse customer's bill for up
to the value of that parking ticket. Each parking stub shall be validated only once
and only on the day the customer parked at CdM. If a customer purchases less
than the parking stub amount, Tenant shall only be reimbursed up to the amount
of the concession purchase.
By the 10th of each month, Tenant shall present the amount of parking
reimbursements for the previous month to City, with receipts and proof of
validation. City shall credit that reimbursement amount to the following month's
rent. The monthly rent credit for the parking validation program shall not exceed
the difference in the number of cars parked at the CdM parking lot between the
previous month and that same month for the year 2007, as confirmed by City's
parking employees or contractor. For example, if on September 2008, 100 ears
parked at the CdM parking lot, and on September 2007, 75 cars parked at the
CdM parking lot, Tenant's rent credit shall be the amount reimbursed to its
customers, as evidenced by receipts and proof of validation, but shall not exceed
the actual cost of parking 25 cars.
The rent credit shall begin October 2008, if City has not implemented an hourly
rate program by that time, however, City shall apply the parking rent credit to
Tenant's first actual rent payment, i.e. — after the expiration of the TI rent credit.
All parking rent credits prior to that first rent payment shall be cumulatively
applied to that first months rent payment. It is the parties' intent that such
reimbursements shall only be applied as a rent credit.
The parking refund /rent credit program shall be effective from the day after Labor
Day through the Friday before Memorial Day, and shall terminate in its entirety
upon City's implementation of the hourly parking rate for CdM.
Award of CDM Concession
February 12, 2008
Page 4
EMPLOYEE PARKING: City shall provide 8 Annual Blue Pole Parking Permits for Tenant's
employee parking. City shall not set aside designated parking
spaces for Tenant's employees;
INSURANCE: Tenant must provide insurance as required by the Request for Proposal, and
as approved by the City's Risk Manager;
HOURS OF OPERATION: (a) Daily from Memorial Day through Labor Day:
7:00 a.m. through 8:30 p.m., all sales and rentals to cease
at 7:30 p.m.
(b) From the day after Labor Day to the day before Memorial
Day:
Weekend days (Saturday and Sunday) -
7:00 a.m. through dusk
Week days (Monday through Friday) —
Hours at Tenant's discretion, but no earlier than 7:00 a.m.
and no later than dusk; and
ENVIRONMENTAL PROTECTION: Tenant must use food packaging consistent with good
environmental practices, including prohibiting Styrofoam
from the premises, minimizing the use of PVC plastics,
and providing both trash receptacles and places for
customers to dispose of recyclable products.
Prepared by:
SIGNATURE
Submitted by:
SIGNATURE
X? Ar 7
Evel Tseng, come Contract Administrator Dave Kiff, Assistant City Manager
Attachments: Request for Proposals, dated August 31, 2007
Award of CDM Concession
February 12, 2008
Page 5
Attachment is available for review
in Dave Kiff's office.
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CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
so 1LC AGE BA
1d.
Agenda Item No. 14
January 22, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
949- 6443002
D Kiff(o)city. newport- beach.ca. us
Revenue Division, Administrative Services.
Evelyn Tseng, Income Contract Administrator
949- 644 -3153
ETseng0city. newport- beach.ca.us
SUBJECT: Award of Concession at Corona del Mar State Beach
ISSJE:.
Who should be selected as the next food, beverage, and beach goods concessionaire at
Corona del Mar State Beach?
RECOMMENDATIONS:
1) Select Fuji Grill, Inc. as the next concessionaire at CDM State Beach based on the
proposal submitted by John Lee in response to City's Request for Proposals for the
CDM concessionaire dated August 31, 2007.
2) Authorize the Mayor and City Clerk to execute a Concession Agreement based on the
terms attached to this report.
DISCUSSION:
Background:
From November 1991 through September 2005, Kilmer Enterprises managed the Corona del
Mar State Beach concession. During that time,. Kilmer Enterprises paid 45% of its monthly
gross receipts for rent. In the last calendar year of its operation, 2004, Kilmer Enterprises paid
$100,420.00 to the City.
In September 2005, the concession agreement with Kilmer Enterprises was terminated in order
to commence construction of the Corona del Mar Beachgoer Amenities Improvement Project
(the "Project"). The Project included 1043 square feet for a concession facility. The Project
opened in summer 2006 without a concessionaire.
Award of CDM Concession
January 22, 2008
Page 2
Council Policy F -7 requires the City to "seek revenue equivalent to the open market value of the
highest and best use; and, whenever possible the City shall conduct an open bid or proposal
process to insure the highest financial return" in negotiations regarding the lease of non-
residential income property.
Process. On October 27, 2005, the City issued a Request for Proposals for the concession
operations at Corona del Mar State Beach. After careful review, City staff recommended, and
City Council selected, Kilmer Enterprises to be the concessionaire. Unfortunately, an
agreement could not be reached. On April 16, 2007, the City issued another Request for
Proposals. At that time, City staff recommended Rudy's Pub and Grill to be the concessionaire,
but City Council rejected staffs recommendation based on Rudy's request for a liquor license.
On August 31, 2007, City issued its third Request for Proposals.
Recommendation. The City received several proposals to its most recent RFP. Fuji Grill, Inc. ,
which is an established business in Newport Beach and has franchises throughout Orange
County, provided the most favorable response based on rent, menu, references and
experience.
CdM Subcommitee Recommendations.
On, January 3, 2008, Steve Rosansky and Nancy Gardner met with staff to discuss.Fuji Grill's
proposal. Mr. Rosansky requested that John Lee, the principle owner of Fuji Grill, Inc. provide a
personal guarantee. Ms: Gardner wanted to ensure that the outdoor dining furniture would not
impede pedestrian flow, particularly during the summer months, and wanted to make sure the
concession would only provide take -out —that there would be notable service. Mr. Lee agreed,
later, to these terms.
There was also some discussion about a parking program at CdM State Beach that would help
the Tenant's customers defray the cost of parking at CdM. The subcommittee and John Lee
agreed upon the program below.
Proposed Terms of Agreement. If the Council approves this item, it would also authorize the
Mayor to enter into a contract based substantially on the provisions of the Lease Agreement
attached to the August 31 RFP and the following negotiated terms:
TERM: 5 years, with two 5 -year extensions;
RENT: The greater of. $80,000 /year, as adjusted annually by CPI, or 15% of gross sales,
whichever is greater;
RENT COMMENCEMENT: Rent Commencement Date will be the earlier of Memorial Day or
3 months after the execution of the agreement;
TENANT IMPROVEMENTS: Fuji Grill shall install all required fixtures and improvements, as
may be required by the County Health Code and /or City
regulations. Fuji Grill shall receive a rent credit for the lesser of
the first 12 months rent (base and percentage) from the Rent
Commencement Date, or the cost of the Tenant Improvements.
Award of CDM Concession
January 22, 2008
Page 3
City shall own the improvements upon the termination of the
Agreement;
EXCLUSIVE CONCESSION: City shall not enter into another agreement for concessions or
beach rentals with another entity at CdM State Beach for the
term of this agreement;
OUTDOOR DINING: Fuji Grill shall be permitted to provide a maximum of 12 small tables and
24 chairs outside. Tenant may rearrange dining tables and chairs
depending on weather and customer demand, so long as the number of
chairs do not exceed 24, and the location of the tables and chairs are on
the concrete pad and do. not impede pedestrian flow;
PARKING: From October through May, excepting Memorial Day weekend, City shall refund
the parking fee to any driver who parks at the CdM parking lot for two hours or
less and provides evidence that he/she has made a minimum $5.00 purchase at
the concession. This parking refund program shall terminate if and when City
implements hourly or metered parking at the CdM parking lot. City shall provide
signage indicating where driver should pull over in order to show proof of
purchase and receive the refund. City and Tenant shall renegotiate this provision
at the 1$' anniversary of the agreement;
EMPLOYEE PARKING: City .shall provide 8 Annual Blue Pole Parking Permits for Tenant's
employee parking. City shall not set aside designated parking
i spaces for Tenant's employees;
�J INSURANCE: Tenant must provide insurance as required by the Request for Proposal, and
as approved by the City's Risk Manager;
HOURS OF OPERATION: (a) Daily from Memorial Day through Labor Day:
7:00 a.m. through 8:30 p.m., all sales and rentals to cease
at 7:30 p.m.
(b) From the day after Labor Day to the day before Memorial
Day:
Weekend days (Saturday and Sunday) -
7:00 a.m. through dusk
Week days (Monday through Friday) —
Hours at Tenant's discretion, but no earlier than 7:00 a.m.
and no later than dusk; and
ENVIRONMENTAL PROTECTION: Tenant must use food packaging consistent with good
environmental practices, including prohibiting Styrofoam
from the premises, minimizing the use of PVC plastics,
and providing both trash receptacles and places for
customers to dispose of recyclable products.
i
7
Prepared by:
SIGNATURE
Submitted by:
SIGNATURE
Award of CDM Concession
January 22, 2008
Page 4
Evely Tseng, I Contract Administrator DaOelkiff, Assistant ity Manager
Attachments: Request for Proposals, dated August 39, 2007
El
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CITY OF NEWPORT BEACH
REQUEST FOR PROPOSALS
Concession Operations and Tenant Improvements
at Corona del Mar State Beach
Deadline for Proposals
August 31, 2007, at 4:00 PM
Informational Meeting
City Council Conference Room
City Wall
3300 Newport Blvd.
Newport Beach, CA 92658
Monday, August 20, 2007
11:00 a.m.
5
REQUEST FOR PROPOSALS ( "RFP ")
Concession Operations and Tenant Improvements
at Corona del Mar State Beach
The City of Newport Beach ( "City ") is soliciting proposals to identify
individuals and /or businesses qualified to operate and manage a renovated
concession located at Corona del Mar State Beach ( "CDM State Beach ") (See
Exhibit "A "). CDM State Beach is part of the California State Parks system,
but is managed and operated by the City. The City had previously issued
two RFPs for this location, but was unable to come to an agreement with the
Proposers. This RFP is designed for those interested in entering into a
contractual relationship with the City ( "Concession Lease Agreement ") in
substantially the form attached as Exhibit "B" to lease the City- managed
concession facility.
I. RFP TERMS AND CONDITIONS
A. This RFP does not commit the City to award a contract. No other
party, including any applicant, is intended to be granted any
rights hereunder. Proposals which, in the sole discretion of the
City, do not meet the minimum requirements, including without
limitation the minimum proposal submission requirements, will
not be.reviewed. This RFP and the process it describes are �J
proprietary to the City and are for the sole and exclusive benefit
of the City. Any response, including written documents and
verbal communication by any applicant to this RFP, will become
the property of the City, and if required by law may be subject to
public disclosure by the City or any authorized agent of the City.
The City is not liable for any costs associated with the
development, preparation, transmittal or presentation of any
proposal or materials submitted in response to this RFP.
B. It shall be the applicant's responsibility to review and verify the
completeness of its proposal. The City may request additional or
clarifying information or more detailed information from any
applicant at any time, including information inadvertently
omitted by an applicant. The City may request to inspect
properties or contact clients referenced in the applicant's
proposal. The City also reserves the right to conduct
investigations with respect to the qualifications of an applicant.
C. Verbal communication made by any City employee or agent of
the City with respect to this RFP is not binding and shall not in
any way be considered as a commitment by the City. Only
written responses to questions submitted in writing to the City or
written addenda to this RFP issued by the City may be relied
upon.
D. City employees and officials are prohibited from responding to
this RFP or being a party, direct or indirect, to any contract
resulting from the RFP, and no proposal shall be accepted from,
or contract awarded to, any City employee or official who
submits a proposal or solicits any contract in which he or she
may have any direct or indirect interest. No applicant may
submit more than one proposal pursuant to this RFP. Entities
that are legally related to each other or to a common entity may
not submit separate proposals. Any proposal may be rejected
because it, in the City's sole judgment, violates these conditions
or the spirit of these conditions.
E. The City reserves and may exercise the following rights and
options with respect to evaluation of proposals and selection for
negotiation.:
i. To reject any and all proposals and re -issue the RFP at any
time prior to execution of a final contract if, in the City's
sole discretion, it is in the City's best interest to do so;
H. To supplement, amend, substitute or otherwise modify this
RFP at any time prior to selection of one or more
applicants for negotiation and to cancel this RFP with or
without issuing another RFP;
M. To accept or reject any or all of the items in any proposal
and award the contract in whole or in part if it is deemed
in the City's best interest to do so;
iv. To reject the proposal of an applicant that, in the City's
sole judgment, has been delinquent or unfaithful in the
performance of any contract with the City or other
government entity, is financially or technically incapable or
is otherwise not a responsible applicant;
V. To reject as informal or non - responsive any proposal
which, in the City's sole judgment, is incomplete, is not in
conformity with applicable law, is conditioned in any way,
deviates from this RFP or contains erasures, ambiguities,
alterations, or items of work not called for by this RFP;.
7
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vi. To waive any informality, defect, non - responsiveness
and /or deviation from this RFP that is not, in the City's sole
judgment, material to the proposal;
vii. To permit or reject, at the City's sole discretion,
amendments (including information inadvertently omitted),
modifications, alterations and /or corrections of proposals
by some or all of the applicants following proposal
submission;
viii. To request that some or all of the applicants modify
proposals based upon the evaluation of the City.
F. The City may enter into negotiations for a contract, on terms and
conditions satisfactory to the City with one or more selected
applicants. However, the City reserves the right to terminate
any negotiations at any time or conduct simultaneous,
competitive negotiations with multiple applicants. The City
reserves the right to negotiate acceptable terms in an otherwise
unacceptable proposal. Such negotiations may result in changes
in terms material to this RFP; in such an event, the City shall not
be obligated to inform other applicants.of the changes, or permit
them to revise their proposals accordingly, unless the City, in its
sole discretion, determines that doing so and permitting such is
in the City's best interest. Should negotiations not prove
satisfactory with the selected applicant(s), the City reserves the
right to discontinue negotiations. Additional firms may be asked
to enter into negotiations, and /or the City may solicit new
proposals.
Because previous negotiations delayed the opening of the beach
concession facility, time is of the essence. It is critical that the
concession facility open as soon as possible, therefore the City
reserves the right to immediately and permanently terminate
negotiations with any applicant who is delaying or slowing down
the negotiation process.
II. BACKGROUND
The public amenities at CDM State Beach have been recently upgraded and
improved with replacement infrastructure and visitor- serving amenities such
as public restrooms, showers, a lifeguard facility, and landscaping. The
facility includes a self- contained concession area intended to provide
food /drink service and beach rentals to beach visitors. CDM State Beach
includes open shoreline, day use parking, and nearby City parks. CDM State
Beach also hosts major special events, including an annual sandcastle
building competition and an antique car show. CDM State Beach is one of
the community's most family - friendly beaches because it has ocean -level
parking and (typically) gentle surf conditions.
The City is pleased to present this opportunity for interested individuals
and /or businesses to submit proposals and qualifications for the operation of
the beach concession facility.
III. PROJECT DESCRIPTION
The concession facility is intended for food and drinks as well as beach
rentals, such as umbrellas and body boards. The concession area is
approximately one thousand forty -three (1,043) square feet in size and
centrally located within the Lifeguard Observation building.
IV. PROPOSED AGREEMENT
Concession operations are a key component to the overall character of CDM
State Beach. Applicants shall review the proposed agreement attached
hereto as Exhibit "B" and:
1) Agree, in writing, to the agreement as -is; OR
2) Provide, in writing, counter - proposals to any provision in the proposed
agreement at the time the applicant submits a response to this RFP.
Requested changes to the proposed agreement after the RFP period
closes are highly unlikely to be approved by the City.
V. QUALIFICATIONS
To ensure a high - quality level of operation for the facility, applicants must
demonstrate minimum experience and qualifications. Applicants must
complete the City's Vendor Application Form (see Exhibit "C ") and.provide
evidence of the following:
• Experience in successfully operating and managing a similar type of
business for a minimum of three (3) years.
• Fiscal solvency and capacity to complete necessary tenant
improvements.
• Demonstrated track record of being an equal opportunity employer.
Q
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• Must not be currently indebted to the federal government, State of.
California, or the City of Newport Beach for non - payment of taxes,
fines, judgments, liens, or fees.
Note: At City's discretion, City may require the principals of an LLC,
corporation, or other entity, to execute a personal guarantee for the
prompt, full and complete performance of any and all covenants and
provisions of the lease agreement.
The applicant or its employees may be subject to the provisions of the .
California Political Reform Act of 1974 (the "Act'% which'(1) requires such
persons to disclose any financial interest that may foreseeably be materially
affected by the work to be performed pursuant to this RFP, and (2) prohibits
such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
If subject to the Act, the applicant shall conform to all requirements of the
Act. Failure to do so constitutes a material breach and is grounds for
immediate rejection of the applicant's proposal, or, if the Concession Lease
Agreement is already entered into with the applicant, immediate termination
of that Agreement by City. The applicant shall be required to indemnify, O
defend and hold harmless City for any and all claims for damages resulting
from the applicant's violation of this provision.
Additional copies of this RFP, as well as copies of documents referenced in
this RFP, may be obtained online at www.city.newport- beach.ca.us. Copies
may also be obtained at the Revenue Division, City of Newport Beach, 3300
Newport Blvd., Newport Beach, CA 92658 -8915.
VI. PROPOSAL INSTRUCTIONS
Submission Date and Requirements
Proposals must be submitted to:
Evelyn Tseng
Revenue Division
City of Newport Beach
3300 Newport Blvd.
P.O. Box 1768
Newport Beach, CA 92658 -8915
The following conditions apply to this submission:
4' +
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• Proposals must be submitted by 4:00 PM, on August 31, 2007.
• Proposals must be signed, in ink, by an individual duly authorized to
bind the applicant.
• Please provide one (1) original and five (5) copies of completed
proposals. Do not bind the proposals - a simple buck clip is
appropriate.
• Proposals or proposal components will not be accepted via facsimile
(fax) transmission.
• Proposals shall remain binding for one hundred twenty (120) days
from the date of proposal submission.
• The City reserves the right, at its sole discretion, to reject and return,
without evaluation, any acceptance or counter - proposal received after
the proposal submission time and date, whether it is delivered by mail
or otherwise.
VII. REQUIRED ELEMENTS OF PROPOSALS
Applicants may submit any information they deem necessary and
appropriate for the City to fully and completely evaluate their qualifications.
The proposal must, at a minimum, include the following general information:
I. Vendor Application (Use form listed as Exhibit "C ")
2. Checklist for a Complete Submission (Use form listed as Exhibit "D ")
3. Description of the applicant's business structure, key staff and their
qualifications.
4. Description of the applicant's relative experience in operating a
concession or other similar business enterprise, including relative size
of business operated, type of retail sales, etc.
5. An audited financial statement (or a financial statement prepared by a
certified public accountant) from the last full year of operation of a
similar business enterprise. If you wish for this financial information to
be kept out of the public record, please submit ONE COPY in a
separate envelope, with the words'FINANCIAL INFORMATION' along
with your name on the envelope. This information will be held apart
from the proposal and will be returned upon completion of the
selection process.
6. A proposed annual budget for the operation of the beach concession
for the first five years. Include a brief narrative that generally
describes the anticipated expenses, revenues, and net income for each
yea r.
7. At least three persons or businesses that have first hand knowledge of
the applicant's ability to successfully operate and maintain a business
enterprise as described in Section 4, above. If possible, at least one
reference should be a public entity other than the City of Newport
Beach.
VIII. ADDITIONAL REQUIREMENTS
Insurance
The concessionaire must meet all the insurance requirements required by
the agreement attached as Exhibit "B These requirements are not open
to counfer- proposals.
All applicants are.encouraged to contact their insurance carriers during the
review of qualifications stage to ensure that the insurance requirements can
be met if the applicant is selected for negotiation of a contract.
IX. REVIEW OF PROPOSAL RESPONSES
Review process
All proposals received by the deadline will be evaluated by a committee
( "Review Committee ") established by the City Manager or his designated
representative. Upon the review and discussion of the quality and
responsiveness of the proposals received, the Review Committee will make
recommendations to the Newport Beach City Council.
The City discourages any proposer's advocacy before Members of the City
Council until such time as the Review Committee has brought forth its
recommendation to the City Council.
Notification of Awards
The successful applicant will be required to execute the Concession Lease
Agreement with the City, which is subject to formal approval by the Newport
Beach City Council.
EXHIBITS
A. Concession Floor Plan
B. Proposed Agreement
C. Vendor Application Form
D. RFP Submission Checklist
EXHIBIT "A"
CONCESSION FLOOR PLAN
(ATTACHED)
C
!ti
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I5t K "A"
------------ ----
15
EXHIBIT "B"
PROPOSED CONCESSION LEASE AGREEMENT
(ATTACHED)
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C
LEASE AGREEMENT
Corona del Mar Concession
This Lease is made and entered into as of the _ day of — ( "Effective
Date "), by and between the City of Newport Beach, a municipal corporation ( "City ") and
( "Tenant').
RECITALS
A. Corona del Mar State Beach is part of the California State Parks system,
but is operated by the City pursuant to the Operating Agreement by and between the
City and the State of California, dated August 1, 1999 (the "Operating Agreement ").
OPursuant to the Operating Agreement, City agreed "to develop, operate, control and
maintain the premises as public recreational beach and park with related concession..."
B. In September 2005, the concession then located at Corona del Mar State
Beach was closed to commence construction of the Corona del Mar Beachgoer
Amenities Improvement Project (the "Project"). The Project includes one thousand
forty-three (1,043) square foot concession facility which is depicted on Exhibit "A" and
incorporated herein by this reference ('Premises ").
C. The City previously issued two (2) Requests for Proposal for Concession
Operations and Tenant Improvements at Corona del Mar State Beach, but was unable
to reach agreement with any of the applicants. On 2007, a third
(3`d) RFP was issued and City selected Tenant. .
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D. Tenant and City desire to enter into a Lease of the Premises for the
purpose of allowing Tenant to operate a concession area intended to provide food /drink
service and beach rentals to beach visitors ( "Concession ").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
City and Tenant hereby agree as follows:
1. DEFINITIONS
1.1 General Definitions. As used in this Lease, the following words and
phrases shall have the following meanings:
(a) Alteration — any improvements, additions, alterations, changes, or
modifications of the Premises made by Tenant including, but not limited to fixtures and o
signage.
thereof.
(b) , Authorized City Representative — is the City Manager or designee
(c) City - the City of Newport Beach, and any Successor to City's
interest to the Project.
(d) Expiration - the lapse of the time specified as the Term of this
Lease, including any extension of the Term resulting from the exercise of an option to
extend.
(e) Good Condition - neat and broom - clean, and is equivalent to similar
phrases referring to physical adequacy in appearance and for use.
(f) Law - any judicial decision, statute, constitution, ordinance,
resolution, regulation, rule, administrative order, or other requirement of any municipal,
county, state, federal, or other government agency or authority having jurisdiction over
the Parties hereto or the Premises.
(g) Maintenance or Maintain - repairs, replacement, maintenance,
repainting, and cleaning.
(h) Person - one or more natural persons, or legal entities, including,
without limitation, partnerships, corporations, trusts, estates, associations, or a
combination of natural persons and legal entities.
(i) Provision - any term, covenant, condition, or clause in this Lease
that defines, establishes, or limits the performance required or permitted by either party.
0) Rent - Base Rent, Percentage Rent, taxes, and other similar
charges payable by Tenant under the provisions of this Lease.
(k) Rent Commencement Date - the Rent Commencement Date shall
be 2007, or three (3) months after the date of execution of this
Agreement, whichever occurs first.
(1) Successor - assignee, transferee, personal representative, .heir, or
other Person succeeding lawfully, and pursuant to the provisions of this Lease, to the
rights or obligations of either Party.
(m) Tenant — and any Successor.
(n) Termination - the termination of this Lease, for any reason, prior to
Expiration.
1.2 Other Definitions. - The following additional terms are defined in the
following sections of this Lease:
(a)
Base Rent
§4.1
(b)
Claim or Claims
§10.1
(c)
Concession
Recitals, §D
(d)
Gross Sales
§4.5
(e)
Hazardous Materials
§17
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(f)
Indemnified Parties
§6.3
(g)
Option Term(s)
§3.2
(h)
Percentage Rent
§4.2 (a)
(i)
Project
Recitals, §B
(j)
Premises
Recitals, §B
(k)
Term
§3.1
2. LEASE OF PREMISES
City leases the. Premises to Tenant and Tenant leases the Premises from City for
the Term and on the conditions in this Lease. City finds it to be in the public interest
and consistent with park uses to grant an exclusive right to operate a Concession at the
Corona del Mar State Beach. Therefore, City hereby grants to Tenant the exclusive
right, privilege and concession to conduct a business at the Premises engaged in selling
such items as those described in Section 5.1, Business Purposes. Tenant agrees to 0
accept the Premises in an "as is" condition as tendered by City. Tenant agrees that no
representations with respect to the condition or improvements of the Premises have
been made by City except as specifically set forth in this Lease.
3. TERM
3.1 Term of Lease. The Term of this Lease shall be five (5) years from the
Rent Commencement Date unless terminated sooner as provided in Section 14, or
extended as provided in Section 3.2.
3.2 Option to Extend. Provided Tenant is not then in default, Tenant may
extend the term of this Lease for two additional successive terms of five (5) years (the
"Option Term" or "Option Terms ") the first commencing on Expiration of the initial Term
and the second commencing on Expiration of the first Option Term, on the same terms
and conditions as contained in this Lease. Tenant must exercise the option by giving
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City written notice of its intention to do so at least three (3) months prior to Expiration of
the initial Term or the first Option Term.
3.3 Hold Over. Should Tenant, with City's consent, hold over and continue in
possession of the Premises after Expiration of the Term or any Option Term, Tenant's
continued occupancy of the Premises shall be considered a month -to -month tenancy
subject to all the terms and conditions of this Lease, except the provisions of Sections
3.1 and 3.2.
4. RENT
4.1 Base Rent. The Base Rent shall be established at Eighty Thousand and
00/100 Dollars ($80,000.00) per year.. Base Rent shall be paid, in advance, in equal
monthly installments of Six Thousand Six Hundred Sixty -Six and 67/100 Dollars
($6,666.67) on the first day of each month. Base Rent for any partial month shall. be
C� prorated in accordance with the actual number of days in that month and shall be due
on the first day of that month that falls within the Term.
Annually, upon the anniversary date of the Rent Commencement Date,
the Base Rent shall be adjusted in proportion to changes in the Consumer Price Index.
Such adjustment shall be made by multiplying the original Base Rent by a fraction, the
numerator of which is the value of the Consumer Price Index for the calendar month
three (3) months preceding the calendar month for which such adjustment is to be made
and the denominator of which is the value of the Consumer Price Index for the same
calendar month immediately prior to the Rent Commencement Date. For example, if
the adjustment is to occur effective June 1, 2009, the index to be used for the numerator
is the index for the month of March 2009 and the index to be used for the denominator
is the index for the month of March preceding the Rent Commencement Date. In no
event shall the adjusted rent be reduced below the Base Rent immediately preceding
any adjustment. The "Consumer Price Index" to be used in such calculation is the
Consumer Price Index, All Urban Consumers (All Items), for the Los Angeles Anaheim
Riverside Metropolitan Area, published by the United States Department of Labor,
Bureau of Labor Statistics (1982 84 = 100). If both an official index and one or more
unofficial indices are published, the official index shall be used. If said Consumer Price
Index is no longer published at the adjustment date, it shall be constructed by
conversion tables included in such new index.
4.2 Percentage Rent.
(a) Payment. For each month that Percentage Rent exceeds Base
Rent, Tenant shall pay to City the Percentage Rent less the Base Rent paid to the City
for that month. "Percentage Rent" shall be determined each calendar month and shall
be calculated by multiplying fifteen percent (15%) by the total Gross Sales (as defined in
Section 4.5) made in, upon, or from the Premises and /or otherwise attributable to the
Premises for the calendar month..
(b) Accounting and Payment. Within twenty -five (25) days after the
end of each calendar month for the term hereof, as may be extended as provided
herein, commencing with the twenty -fifth (25th) day of the month following the Rent
Commencement Date, and ending with the twenty -fifth (25th) day of the month next
succeeding the last month of the term, as may be extended as provided herein, Tenant
shall furnish to City a statement in writing, certified by Tenant and a Certified Public
Accountant to be correct, showing the total Gross Sales made in, upon, or from and /or
otherwise attributable to the Premises during the preceding calendar month. (or
fractional month at the beginning of the term if the Rent Commencement Date is other
than the first day of a month), and shall accompany each such statement with a
payment to City equal to fifteen percent (15 %) of the total monthly Gross Sales made in,
upon, or from or otherwise attributable to the Premises for the calendar month, less the
Base Rent already paid to the City for that month.
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4.3 Revenue from Premises Use in Film. Television, and /or Advertising.
Tenant may allow the Premises to be used for film, television production, advertising
production, or other media vehicle upon written approval from the City. One -half (1/2) of
all monetary revenue received by Tenant as compensation or other payment for the use
of the Premises in a film, television production, advertising production, or other media
vehicle shall be paid to City. The payment of revenue pursuant to this Section shall
occur not less than thirty. (30) days after Tenant receives this compensation or other
payment.
4.4 Payment Location. Rent shall be payable at the office of the City's
Cashiering Division at 3300 Newport Boulevard, Newport Beach, California, or at such
other place or places as City may from time to time designate by written notice delivered
to Tenant.
4.5 Gross Sales.
0 (a) The term "Gross Sales" means:
(1) all money,. cash receipts, assets, property or other things of
value, including but not limited to gross charges, sales, rentals, fees and commissions
.made or earned by Tenant and /or all the assignees, sublicensees, licensees, permittees
or concessionaires thereof, whether collected or accrued from any business, use or
occupation, or any combination thereof, originating, transacted or performed in whole or
in part, on the Premises, including but not limited to rentals, the rendering or supplying
of services and the sale of goods, wares or merchandise, whether wholesale or retail,
whether for cash or credit, or otherwise, and including the value of all consideration
other than money received. for any of the foregoing, without, except as expressly
provided in Section 4.5(b), deduction from gross receipts for any overhead or cost or
expense of operations, such as, but without limitation to salaries, wages, costs of
goods, interest, debt amortization, credit, collection costs, discount from credit card
operations, insurance and taxes. Each installment or credit sale shall be treated as a
23
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sale for the full price in the month during which such sale is made, irrespective of
whether or when Tenant receives payment therefore. Gross Sales shall include any
amount allowed upon any "trade in," the full retail price of any merchandise delivered or
redeemed for trading stamps or coupons and all deposits not refunded to purchasers;
(2) Orders taken in or from the Premises, even if the orders are
filled elsewhere, and sales by any subtenant in or from the Premises;
(3) Gross receipts of all coin - operated devices that are placed
on the Premises by Tenant or pursuant to any rent concession, percentage or other
arrangement (but excluding revenue from telephones that are collected by a public
and /or private utility); and
(4) Rentals of any. beach equipment, beach furniture, goods,
wares or merchandise.
(b) Exclusions from Gross Sales. Gross. Sales shall not include, or if
included there shall be deducted (but only to the extent they have been included), the l
following:
(1) Sales and use taxes, so- called luxury taxes, consumers'
excise taxes, gross receipts taxes, and other similar taxes now or in the future imposed
on the sale of merchandise or services, but only if such taxes are added to the selling
price and collected from customers;
(2) The amount of returns to shippers or manufacturers;
(3) The amount of any cash or credit refund made upon any
sale where the merchandise sold or some portion is returned by the purchaser. Each
sale upon installment or credit shall be treated as a sale for the full price in the month
during which such sale shall be made, irrespective of the time when Tenant shall
receive payment (whether in full or partial) from its customers;
(4) Sales of trade fixtures or personal property to be replaced by
Tenant that are not considered stock in trade;
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(5) Sums and credits received in the settlement of claims for
loss of or damage to merchandise;
(6) Meals provided for officers or employees without charge;
(7) Meals, goods or products provided for promotional or
publicity purposes without charge;
business;
(8) Cash refunds made to customers in the ordinary course of
(9) Value added taxes ( "VAT') or other taxes added to the
selling.price of products and other similar taxes now or hereafter imposed upon the sale
of merchandise or services, whether such taxes are added to, or included in the selling
price;
(10) Discounted sales to employees of Tenant, not to exceed two
percent (2 %) of the monthly Gross Sales;
(11) Uncollectible credit accounts and other bad debts, not to
exceed two percent (2 %) of the monthly Gross Sales; and
(12) Amounts paid to charge card or credit card issuers.
(c) Annual Statements of Gross Sales. Within thirty (30) days after the
end of each calendar year during the Term hereof, as may be extended as provided
herein, Tenant shall furnish to City a statement in writing, certified by Tenant and a
Certified Public Accountant to be correct, showing the total Gross Sales made in, upon,
or from and /or otherwise attributable to the Premises during the preceding calendar
year (or fractional year at the beginning of the term if the Rent Commencement Date is
other than the first day of the year).
(d) Sales and Charges. All sales and charges shall be recorded by
means of cash registers that display the amount of the transaction certifying the amount
recorded. The register shall be equipped with devices that log in daily sales totals, and
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record on tapes the transaction numbers and sales details. At the end of each day the
tape will record the total sales for that day.
(e) Production of Statement. Records and Audit. Tenant shall keep at
the Premises (and shall require any permitted subtenant to keep at the Premises) full,
complete and proper books, records and accounts of its daily Gross Sales, both for
cash and on credit, at any time operated in the Premises. Tenant agrees to make
available for inspection by City at the Premises, a complete and accurate set of books
and records of all sales of goods, wares, and merchandise and revenue derived from
the conduct of business or activity in, at or from the Premises from which Gross Sales
can be determined. Tenant shall also make available, upon City request, all supporting
records. Tenant shall also furnish City copies of its quarterly California sales and use
tax returns at the time each is filed with the State of California. Tenant shall retain and
presence for at least three (3) years all records, books, bankbooks or duplicate deposit
books and other evidence of Gross Sales. City shall have the right, upon reasonable
notice, during the Term and within one hundred eighty (180) days after Expiration or
Termination of this Lease to inspect and audit Tenants books and records and to make
transcripts to verify the Rent due to the City. The audit may be conducted at any
reasonable time during normal business hours. Tenant shall cooperate with City in
making the inspection and conducting the audit. The audit shall be limited to the
determination of Gross Sales and shall be conducted during usual business hours in a .
manner that minimizes any interference with the conduct of Tenant's regular business
operations.. If the audit concludes that there is a deficiency in the payment of any Rent,
the deficiency shall become due and payable within twenty (20) days and if there is an
overpayment, City shall refund the amount of the overpayment within twenty (20) days.
City shall bear its costs of the audit unless the audit shows that Tenant understated
Gross Sales by more than two percent (2 %), in which case Tenant shall pay all City's
reasonable costs of the audit. City shall keep any information gained from such
statements, inspections or audits confidential to the maximum extent permitted by law.
City shall not disclose financial information received in confidence and pursuant to this
Lease except to carry out the purposes of this Lease unless disclosure is required
(rather than permitted) by law. However, City may disclose the results of any audit in
connection with any financing arrangements, the sale or transfer of City's interest in the
Premises, pursuant to order of a court or administrative tribunal, or to collect any
outstanding Rent.
(f) Tenant's Gross Sales Audit. In the event of any audit by City in
accordance with this Lease, Tenant may contest the results of City's audit by performing
a confirming audit, at Tenant's expense, within sixty (60) days of receipt of City's audit
results and supporting evidence, using an independent Certified Public Accountant
reasonably acceptable to City. If Tenant's audit discloses that City's audit was incorrect
by more than twenty -five percent (25 %), then City shall pay the cost of Tenant's
contesting audit.
(g) Acceptance. The acceptance by City of any money paid to City by
Tenant as Percentage Rent for the Premises, as shown by any statement furnished by
Tenant, shall not be construed as an admission of the accuracy of said statement, or of
the sufficiency of the amount of the Percentage Rent payment.
4.6 Late Payment. Tenant hereby acknowledges that the late payment of
Base Rent, Percentage Rent, or other sums due hereunder will cause City to incur costs
not contemplated by this Lease, the exact amount of which is extremely difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
charges. Accordingly, any payment of any sum to be paid by Tenant not paid within five
(5) days of its due date_ shall be subject to a ten percent (10 %) late charge. City and
Tenant agree that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to City for its loss suffered by such late payment by
Tenant.
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4.7 Interest on Unpaid Sums. Unpaid sums due to either City or Tenant under
this Lease shall bear interest at the rate of ten percent (10 %) per annum on the unpaid
balance, including but not limited to late payment penalties, from the date due until paid.
5. BUSINESS PURPOSES AND USE OF PREMISES
5.1 Business Purposes. The Premises are to be used by Tenant for the
operation of a concession selling food, non - alcoholic beverages, and miscellaneous
beach- related merchandise, as well as for the rental of beach - related products such as
umbrellas, beach chairs, and boogie boards. Tenant's proposed menu, proposed rental
items and proposed sales merchandise shall be attached as Exhibit "B ". Pricing for
these products will be comparable to prices at nearby beach concession facilities.
Alcoholic beverage sales or giveaways are prohibited.
5.2 Operation of Premises. Tenant shall operate and manage the
Premises in a manner comparable to other high quality businesses providing similar
food and services. Deliveries shall be made and completed between 7a.m. and 6 p.m.
on non - holiday weekdays.
5.3 Prohibited Uses. Tenant shall not sell or permit to be kept, used, displayed
or sold in or about the Premises (a) pornographic or sexually explicit books, magazines,
literature, films or other printed material, sexual paraphernalia, or other material which
would be considered lewd, obscene or licentious, (b) any article which may be
prohibited by standard forms of fire insurance policies, or (c) any alcoholic beverages.
Vending machines, gaming machines or video or arcade games shall not be used or
installed on the Premises unless expressly permitted by this Lease. Tenant shall not
use or permit the use of the Premises in any manner that (a) creates a nuisance or (b)
violates any Law. Tenant shall not offer entertainment or broadcast music or
entertainment through exterior speakers or other form of transmission.
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5.4 Food Packaging and Debris. Tenant shall use food packaging consistent
with good environmental practices, including prohibiting polystyrene (also known as
Styrofoam) from the Premises, minimizing the use of PVC plastics (especially plastic
bags for carrying food), and providing both trash receptacles and places for customers
to dispose of recyclable products.
5.5 Outdoor Dining. Tenant shall be permitted to place two (2) picnic tables
from Memorial Day through Labor Day, and four (4) picnic tables during the winter
season, onto a portion of the paved area outside of the Premises, subject to prior
written approval of the City Manager and in accordance with City zoning codes and
State requirements. Tenant may not expand onto the beach area, or place any
temporary furniture or objects onto the beach area.
5.6 . Operation. Weather permitting, Tenant shall keep the Premises in
operation and open to the public for business each calendar day of the year in
accordance with the schedule in this Section. Tenant may close. the Concession on
Thanksgiving Day, Christmas Day, during periods of remodeling, reconstruction,
inventory and emergencies (including substantially inclement weather) or to comply with
Laws. Notwithstanding the foregoing, if Tenant can show, on the second (2nd)
anniversary of the Rent Commencement Date, consistently low gross sales on certain
days of the year, then Tenant may close the Concession on those days upon written
approval of City Manager. Unless otherwise approved in writing by the City Manager,
which approval shall not be unreasonably withheld, the Concession shall follow this
schedule of operations:
(a) Daily from Memorial Day through Labor Day:
7:00 a.m. through 8:30 p.m., all sales and rentals to cease at 7:30
p. M.
(b) From the day after Labor Day to the day before Memorial Day:
Weekend days (Saturday and Sunday) -
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7:00, a.m. through dusk.
Weekdays (Monday through Friday) —
Hours at Tenant's discretion, but in no event, no earlier than 7:00
a.m. or later than dusk.
5.7 Food Preparation. Tenant shall install, at Tenant's own expense, fire
protective systems in grill, deep fry, and cooking areas which are required by City,
County, and state fire ordinances, and such system when installed shall qualify for full
fire protective credits allowed by the fire insurance rating and regulatory body in whose
jurisdiction the Premises is located. Tenant shall also install adequate ventilation
systems to operate the cooking area.
5.8 Advertising Display. Tenant may, at its own expense, place unlit signs in
or upon the Premises subject to the prior written consent of the City Manager as to the
size, type, number, design and method of installation. All signage placed by Tenant on,
in or about the Premises shall remain the property of Tenant and shall be removed by O
Tenant upon Termination or Expiration of this Lease at Tenant's expense; and any
damage caused by removal shall be repaired at Tenant's expense.
5.9 Personnel. Tenant shall be responsible for hiring the necessary
personnel to conduct the daily operation of Concession. Tenant shall comply with all
federal, state, and local Laws related to minimum wage, social security,
nondiscrimination, ADA, unemployment compensation, and workers' compensation. If
required by the City, employees shall wear a uniform and /or identification badge.
5.10 Independent Contractor. It is understood that Tenant is an independent
contractor and not an agent or employee of City. Nothing in this Lease shall be deemed
to constitute approval for Tenant or any of Tenant's employees or agents, to be the
agents or employees of City. City shall have no interest in the business of Tenant.
5.11 No Distress Sales. No auction, fire, bankruptcy, "going out of business" or
other distress sales of any nature may be conducted on.the Premises without the prior
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written consent of the City Manager, which approval will not be unreasonably withheld.
but may be conditioned.
5.12 Parking for Employees. City shall provide four (4) designated parking
spaces and eight (8) parking passes to Tenant for its employees. Tenant shall cause its
employees to comply with the procedures and regulations established by City from time-
to -time to control parking.
6. TAXES, LICENSES AND OTHER OBLIGATIONS
6.1 Payment of Taxes. Tenant shall pay directly to the appropriate taxing
authorities all taxes applicable to this Lease, fixtures and Tenant's personal property on
the Premises, that are levied or assessed against Tenant during the Term. Taxes shall
be paid at least ten (10) days before delinquency and before any fine, interest or penalty
is due or imposed by operation of law. Tenant shall, upon request, promptly furnish to
\� the City satisfactory evidence of payment. Tenant acknowledges that this Lease may
create a possessory interest subject to property taxation and that Tenant may be
subject to the payment of property taxes levied on such interest. Tenant shall pay,
before delinquency all taxes, assessments, license fees and other charges ( "Taxes ")
that are levied or assessed against Tenant's leasehold interest in the Premises or any
personal property installed on the Premises.
6.2 Payment of Obligations. Tenant shall promptly pay, when due, any and all
bills, debts, liabilities and obligations incurred by Tenant in connection with Tenant's
occupation and use of the Premises.
6.3 Challenge to Taxes. Tenant shall have the right in good faith, at its sole
cost and expense, to contest the amount or legality of any Taxes on or attributable to
this Lease, the Premises, Tenant's personal property, or Tenant's occupation and use of
the Premises, including the right to apply for reduction. If Tenant seeks a reduction or
contests such taxes, Tenant's failure to pay the taxes shall not constitute a default as
3 i
long as Tenant complies with the provisions of this Section. City shall not be required to
join in any proceeding or contest brought by Tenant unless the provisions of any Law
require that the proceeding or contest be brought by or in the name of City or any owner
of the Premises. In that case, City shall join in the proceeding or contest or permit it to
be brought in City's name as long as City is not required to bear any cost. If requested
by Tenant, City shall execute any instrument or document necessary or advisable in
connection with the proceeding or contest. Tenant, on final determination of the
proceeding or contest, shall immediately pay or discharge any decision or judgment
rendered, together with all related costs, charges, interest and penalties. Tenant shall
indemnify, defend and hold harmless the City, its council members, boards,
commissions, officers, employees, Authorized City Representatives, agents , and
volunteers (9ndemnified Parties ") from and against any liability, claim, demand, penalty,
cost or expense arising out of or in connection with any contest by Tenant pursuant to
this Section.
7. UTILITIES.
Tenant shall make all arrangements for utilities installation and pay for all utilities
furnished to or used on the Premises, including, without limitation, gas, electricity, water,
telephone service, and cable N. Tenant may use City's trash enclosures or public
trash cans, provided however, that City may, at City's discretion, require Tenant to
arrange for its own refuse collection. Any repair to utility lines within the Premises is the
sole responsibility of Tenant. Tenant shall service and maintain the Concession's 1500 -
gallon grease interceptor: Refuse collection and grease interceptor maintenance shall
occur between 7 a.m. and 6 p.m. on non - holiday weekdays.
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8. ALTERATIONS TO THE PREMISES.
8.1 Tenant Improvements. Tenant acknowledges that City has delivered the
Premises without any improvements, and it shall be Tenant's responsibility to install
service runs, including gas, water and electricity, in addition to completing interior
finishes, installing equipment and providing other improvements (including a restroom)
as necessary for the Concession to operate. All Tenant improvement plans and
construction shall be subject to the prior written approval of the City Manager. Tenant
improvements shall be performed between 7 a.m. and 6 p.m. on non - holiday weekdays.
Any contractors hired by Tenant shall be fully licensed and bonded. Tenant's
contractors and any subcontractors shall obtain insurance in an amount and fon-n to be
approved by City's Risk Manager, including workers compensation insurance as
required by law, general liability, automobile liability and builder's risk insurance
covering improvements to be constructed, all pursuant to standard industry custom and
Qpractice. City shall be named as an additional insured on the contractors and any
subcontractors policies.
8.2 Permits. Tenant shall obtain building permits, health department permits
and other required permits prior to commencement of Tenant improvements, and shall
pay all costs therefor.
8.3 Quality of Work Performed. All alterations, maintenance and other work
shall be performed in a good and workmanlike manner, shall comply with the plans and
specifications submitted to City, and shall comply with all applicable governmental
permit requirements and Laws in force at the time permits are issued.
8.4 Payment of Costs. Tenant shall pay all costs related to the construction of
the improvements and any Alterations by Tenant or its agents.
8.5 Liens. Tenant shall keep the Premises free from any liens arising out of
any work performed, material furnished, or obligation incurred by Tenant or alleged to
-- have been incurred by Tenant.
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8.6 Disposition of Alterations at Expiration or Lease Termination. Any
Alterations made to the Premises shall remain on, and be surrendered with, the
Premises on Expiration or Termination of this Lease (excluding Tenant's fixtures,
equipment, furniture, and moveable decorations). . However, City may elect not less
than thirty (30) days prior to Expiration or Termination of this Lease, to require Tenant to
remove any Alterations that Tenant has made to the Premises. If City requires removal
of Alterations, Tenant shall, at its cost, remove the Alterations and restore the Premises
to a broom -clean condition before the last day of the Term, or within thirty (30) days
after notice is given, whichever is later. Prior to Expiration or within fifteen (15) days
after Termination of this Lease, Tenant may remove any moveable partitions,
machinery, equipment, furniture, and trade fixtures previously installed by Tenant,
provided that Tenant repairs any damage to the Premises caused by removal.
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9. MAINTENANCE OF PREMISES
9.1 Maintenance and Repair by Tenant and City. Tenant agrees that it will
keep the Premises in Good Condition. Graffiti shall be called in to the City's Graffiti
Hotline for removal. City may perform Maintenance or repairs in the event Tenant fails
to commence required Maintenance or repairs within three (3) business days after
receipt of notice to do so. The cost of any Maintenance or repairs by the City pursuant
to this Section shall be payable as additional Rent. All furnishings, equipment, facilities,
improvements, alterations, attachments and appurtenances not provided by City, but
required for concession operations, including all kitchen equipment and interior
furnishings, shall be maintained in Good Condition and repair by Tenant at its cost. City
may perform required cleaning and charge the costs to Tenant if the Tenant fails to
perform within five (5) days after notice to do so and continue to Maintain the area as
required by this Lease.
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9.2 Entry by City. Upon twenty -four (24) hour notice to Tenant, City and its
Authorized City Representatives may enter upon and inspect the Premises at any
reasonable time for any lawful purpose. In case of emergency, City or its Authorized
City Representative may enter the Premises by whatever force necessary if Tenant is
not present to open and permit an entry. Any entry to the Premises by City shall not be
construed as a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
10. INDEMNITY AND EXCULPATION; INSURANCE
10.1 Hold - Harmless Clause. Tenant agrees to indemnify, defend and hold
harmless the Indemnified Parties from and against any and all claims (including, without
limitation, claims for bodily injury, death or damage to property), demands, obligations,
Odamages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities,
costs and expenses (including, without limitation, attorney's fees, disbursements and
court costs) of every kind and. nature whatsoever (individually, a "Claim "; collectively,
"Claims "), which may arise from or in any manner relate (directly or indirectly) to
Tenant's occupation and use of the Premises, specifically including, without limitation,
any claim, liability, loss, or Damage arising by reason of:
(a) The death or injury of any Person or damage to personal property
caused or allegedly caused by the condition of the Premises or an act or omission of
Tenant or an agent, contractor, subcontractor, supplier, employee, servant, sublessee
or concessionaire of Tenant;
(b) Any work performed on the Premises or materials furnished to the
Premises at the request of Tenant or any agent or employee of Tenant, with the
exception of Maintenance performed by City; and /or
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(c) Tenant's failure to perform any provision of this Lease or to comply
with any requirement of Law or any requirement imposed on the Premises by any duly
authorized governmental agency or political subdivision.
Tenant's obligations pursuant to this Subsection shall not extend to any Claim
proximately caused by the sole negligence, willful misconduct, or unlawful or fraudulent
conduct on the part of the Indemnified Parties.
10.2 Exculpation of City. Except as otherwise expressly provided in this Lease,
City shall not be liable to Tenant for any damage to Tenant or Tenant's property from
any cause other than the sole negligence, intentional or willful acts of the Indemnified
Parties. Except as otherwise expressly provided in this Lease, Tenant waives all claims
against the Indemnified Parties arising for any reason other than the sole negligence,
intentional or willful acts of the Indemnified Parties. City shall not be liable to Tenant for
any damage to the Premises, Tenant's property, Tenant's goodwill, or Tenant's
business income, caused in whole or in part by acts of nature including, without
limitation, waves, wind and ocean currents.
10.3 Insurance. In addition to insurance required of Tenant to be obtained,
provided, and maintained during the construction of the improvements, and without
limiting Tenant's indemnification of City, Tenant shall obtain, provide and maintain at its
own expense during the term of this Lease, a policy or policies of liability insurance of
the type and amounts described below and in a form satisfactory.to City.
(a) Certificates of Insurance. Tenant shall provide certificates of insurance
with original endorsements to City as evidence of the insurance coverage required
herein. Insurance certificates must be approved by City's Risk Manager prior to
execution of this Lease by the City. Current certification of insurance shall be kept on
file with City at all times during the term of this Lease.
(b) Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
(c) Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders' Rating
of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the
latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk
Manager.
(d) Coverage Requirements.
i. Workers' Compensation Coverage. Tenant shall maintain
Workers' Compensation Insurance at statutory limits and Employer's Liability Insurance
at One Million and 00/100 Dollars ($1,000,000.00) for his or her employees in
accordance with the laws of the State of California. Any notice of cancellation or non -
renewal of all Workers' Compensation policies must be received by City at least thirty
(30) calendar days (ten (10) calendar days written notice of non - payment of premium)
prior to such change. The insurer shall agree to waive all rights of subrogation against
City, its officers, agents, employees and volunteers for all losses that relate in any way
to this Lease.
ii. General Liability Coverage. Tenant shall maintain
commercial general liability insurance in an amount not less than Two Million and
00/100 Dollars ($2,000,000.00) per occurrence for bodily injury, personal injury, and
property damage, including without limitation, contractual liability. If commercial general
liability insurance or other form with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the work to be performed under this Lease, or
the general aggregate limit shall be at least twice the required occurrence limit.
Automobile Liability .Coverage. Tenant shall maintain
automobile insurance covering bodily injury and property damage for all activities of the
Tenant arising out of or in connection with .the services to be performed under this
Lease, including coverage for any owned, hired, non -owned or rented vehicles, in an
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amount not less than Two Million Dollars and 00/100 Dollars ($2;000,000.00) combined
single limit for each occurrence.
iv. Fire and Extended Coverage. Tenant shall maintain fire and
extended coverage insurance, together with insurance against vandalism, theft and
malicious mischief, on the improvements and fixtures, alterations, trade fixtures, signs,
equipment, personal property and inventory on or upon the Premises from loss or
damage to the extent of their full replacement value.
V. Tenant shall maintain loss of rent insurance insuring that the
Rent will be paid to City for a period up to six (6) months if the Premises are destroyed
or rendered unusable or inaccessible for commercial purposes by a risk insured under a
special form property coverage policy including vandalism and malicious mischief
endorsements.
(e) Endorsements. Each insurance policy shall be endorsed with the
following specific language:
L The City, its elected or appointed officers, officials,
employees, agents and volunteers, and the State of Califomia, its elected or appointed
officers, officials, employees, agents and volunteers, are to be covered as additional
insureds, with respect to liability arising out of work performed by or on behalf of the
Tenant.
ii. This policy shall be considered primary insurance as
respects to City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or indirectly from
the Tenant's operations or services provided to City. Any insurance maintained by City,
including any self- insured retention City may have, shall be considered excess
insurance only and not contributory with the insurance provided hereunder.
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iii. This insurance shall act for each insured and additional
insured as though a separate policy had been written for each, except with respect to
the limits of liability of the insuring company.
iv. The insurer waives all rights of subrogation against City, its
elected or appointed officers, officials, employees, agents and volunteers.
V. Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to City, its elected or appointed officers, officials,
employees, agents or volunteers.
vi. The insurance provided by this policy shall not be
suspended, voided, canceled, or reduced in coverage or in limits, by either party except
after thirty (30) calendar days (ten (10) calendar days written notice of non - payment of
premium) written notice has been received by City.
(f) Timely Notice of Claims. Tenant shall give City prompt and timely
notice of claim made or suit instituted arising out of or resulting from Tenants
performance under this Lease.
(g) Additional Insurance. Tenant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own judgment
may be necessary for its proper protection and prosecution of the work.
(h) Subcontractors. In the event Tenant subcontracts, the contract
between Tenant and such subcontractor shall require the subcontractor to maintain the
same policies of insurance that Tenant is required to maintain pursuant to this Section.
11. DAMAGE OR DESTRUCTION OF PROJECT /PREMISES
11.1 Destruction of Premises. If the Premises are totally or partially destroyed,
rendering the Premises or any portion thereof totally or partially inaccessible or
unusable, Tenant shall restore the Premises to substantially the same condition as
immediately prior to such destruction (including all trade fixtures, personal property,
.,
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improvements and Alterations as are installed by Tenant, which shall be replaced by
Tenant at its expense). Tenant may elect to terminate this Lease by giving notice of
such election to City within sixty (60) days after the date of the occurrence of any
casualty if the cost of the restoration exceeds the amount of any available insurance
proceeds, if the damage has been caused by an uninsured casualty or event, or if
Tenant reasonably estimates that repairs of the Premises will take more than six (6)
months. Upon such termination, insurance proceeds applicable to reconstruction of the
Project (excluding Tenant's personal property therein) shall be paid to City and Tenant
shall have no further liability or obligations under this Lease.
11.2 Replacement of Tenant's Property. In the event of damage or destruction
of improvements located on the Premises not giving rise to Tenant's option to terminate
this Lease, Tenant shall, at its own expense, replace and repair all Tenant's trade
fixtures, equipment, machinery, furnishings, furniture and inventory as soon as
reasonably possible to permit the prompt continuation of Tenant's business at the
Premises.
11.3 Destruction of Project. In the event that all or a portion of the Project is
damaged, and the Premises or a material portion becomes inaccessible or
commercially unusable, and the damage or destruction cannot reasonably be repaired
within twelve (12) months after the date of the casualty, City shall have the right to
either:
(a) Terminate this Lease by giving to Tenant written notice (which notice
shall be given, if at all, within thirty (30) days following the date of the casualty), in which
case this Lease shall be terminated thirty (30) days following the date of the casualty; or
(b) Give Tenant written notice of City's intention to repair such damage as
soon as reasonably possible at City's expense, in which event this Lease shall continue
in full force and effect; however, Rent shall be abated in accordance with the
procedures set forth in Section 12. Tenant may terminate this Lease by giving City
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written notice at any time prior to the commencement of repairs if City agrees to repair
the Project pursuant to this Section and fails to commence repairs within one hundred
twenty (120) days after giving Tenant written notice of its intention to repair. In such
event, this Lease shall terminate as of the date of notice from Tenant to City, and City
shall have no liability under this Lease.
12. ABATEMENT OF RENT
12.1 General Rule. In the event of damage or destruction of the Premises or
Damage to the Project that impacts the Premises and this Lease is not terminated,
Tenant shall continue to utilize the Premises for the operation of its business to the
extent it may be practicable and commercially reasonable. Rent shall abate only in
proportion, to the area of the Premises that is rendered unusable. The abatement of
Rent shall commence on the date that use of the Premises is impacted and continue
Cuntil the completion of those repairs necessary to restore full use of the Premises and
Tenant's re- opening of the Premises. Tenant's obligation to pay Taxes pursuant to this
Lease shall not be abated or reduced. Rent shall not abate if the damage or destruction
to the Premises is the result of the negligence or willful conduct of Tenant or its
employees, officers or agents. Tenant's right to abatement of Rent is contingent on
payment of insurance proceeds, if any, equal to the amount of Rent pursuant to
coverage required by Section 10.3.
12.2 Abatement/Maintenance. Tenant shall not be entitled to any abatement
of Rent for Maintenance that occurs during the Maintenance period.
13. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
13.1 Prohibition of Assignment. City and Tenant acknowledge that City is
entering into this Lease in reliance upon the experience and abilities of Tenant and its
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principals. Consequently, Tenant shall not voluntarily assign or encumber its interest in
this Lease or in the Premises, or sublease substantially all or any part of the Premises,
or allow any other person or entity (except Tenant's authorized representatives) to
occupy or use all or any part of the Premises without the prior written consent of City,
which shall not be unreasonably withheld. City's consent to any assignment, subletting
or other transfer is subject to Tenant providing City with evidence reasonably
satisfactory to City that the proposed transferee has financial strength and restaurant or
food service experience comparable to Tenant and the use of the Premises by the
proposed transferee is consistent with the terms of this Lease. Except as otherwise
expressly provided herein, any dissolution, merger, consolidation, reorganization of
Tenant, or the. sale or other transfer resulting in a transfer of a controlling percentage of
the capital stock of Tenant, shall be deemed a voluntary assignment; provided,
however, that the sale or transfer of a controlling percentage of the capital stock of
Tenant pursuant to a public offerings) of equity or debt instruments issued by Tenant, O
or other transfers of publicly traded capital stock or debt instruments shall not constitute
a voluntary assignment and shall not require City's consent or approval. The phrase
"controlling percentage" means the ownership of, or the right to vote, stock possession
of at least fifty percent (50 %) of the total combined voting power of all classes of
Tenants capital stock issued, outstanding, and entitled to vote for the election of
directors, except for ownership of publicly traded shares, warrants or similar equity
interests.in Tenant traded on a national exchange or over - the - counter markets.
13.2 Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein, City's consent shall not be required for an assignment or
subletting to an Affiliate, Subsidiary, or Successor of Tenant. For purposes hereof, an
"Affiliate ", a "Subsidiary", and a "Successor' of Tenant are defined as follows:
(a) an "Affiliate" is any corporation or other entity which directly or .
indirectly controls or is controlled or is under common control with Tenant (for purposes
4,
® of this Section, "control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such corporation or
other entity, whether through the ownership of voting securities or by contract or
otherwise);
(b). a "Subsidiary" shall mean any corporation or other entity not less than
twenty -five percent (25 %) of whose outstanding stock shall, at the time, be owned
directly or indirectly by Tenant and which is at least as creditworthy as Tenant; and
(c) a "Successor" shall mean a corporation or other entity in which or with
which Tenant is merged or consolidated, in accordance with applicable statutory
provisions for merger or consolidation of corporations or a corporation or other entity
acquiring a substantial portion of the property and assets of Tenant.
13.3 Continuing Effect. City's consent to any assignment, encumbrance, or
sublease shall not relieve Tenant, from its obligations or liabilities under this Lease nor
act as a waiver "of the requirement that such consent be obtained to any subsequent
assignment, encumbrance or sublease.
14. DEFAULT
14.1 Default by Tenant. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant;
(b) The failure by Tenant to make any payment of Rent or any other
payment required by this Lease, as and when due, when such failure shall continue for
a period of ten (10) days after written notice of default from City to Tenant;
(c) Except as specified in Subsection 14.1(b), the failure of Tenant to
observe or perform any of the material covenants, conditions or provisions of this Lease
to be observed or performed by Tenant where such failure shall continue for a period of
thirty (30) days after written notice thereof from City to Tenant; provided, however, that if
the nature of Tenant's default is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion;
(d) The making by Tenant of any general arrangement or assignment
for the benefit of creditors;
(e) .Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or
any successor statute thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty. (60) days);
(f) The appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where such appointment is not discharged within sixty (60) days; and
(g) The attachment, execution or the judicial seizure of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where
such seizure is not discharged within sixty (60) days.
14.2 Remedies.
(a) Cumulative Nature of- Remedies. If any default by Tenant shall
continue without cure as required by this Lease, City shall have the remedies described
in this Section in addition to all other rights and remedies provided by law or equity, to
which City may resort cumulatively or in the alternative.
(1) Reentry without Termination. City may reenter the Premises,
and, without terminating this Lease, re -let all or a portion of the Premises. City may
execute any leases made under this provision in City's name and shall be entitled to all
rents from the use, operation, or occupancy of the Premises. Tenant shall nevertheless
pay to City on the dates specified in this Lease the equivalent of all sums required of
Tenant under this Lease, plus City's expenses in conjunction with re- letting, less the
proceeds of any re- letting or atonement. No act by or on behalf of City under this
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provision shall constitute a Termination of this Lease .unless City gives Tenant specific
written notice of Termination.
(2) City may terminate this Lease by giving Tenant notice. of
Termination. In the event City terminates this Lease, City may recover possession of
the Premises (which Tenant shall surrender and vacate upon demand) and remove all
Persons and property. City shall be entitled to recover the following as damages;
(A) The value of any unpaid Rent or other charges that
are unpaid at the time of Termination;
(B) The value of the Rent and other charges that would
have accrued after Termination less the amount of Rent and charges the City received
or could have received through the exercise of reasonable diligence as of the date of
the-award;
(C) Any other amount necessary to reasonably
compensate City for the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease; and
(D) At City's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time -to -time by applicable California
law. City shall be entitled to interest at the rate of ten percent (10 %) per annum on all
Rent and other charges from the. date due or the date they would have accrued. City
shall also be entitled to an award of the costs and expenses incurred by City in
maintaining or preserving the Premises after default, preparing the Premises for re-
letting, or repairing any damage caused by the act or omission of Tenant.
(3) Use of Tenant's Personal Property. City may use Tenant's
personal property and trade fixtures located on the Premises or any of such property
and fixtures without compensation or liability to Tenant for use or damage. In the
alternative City may store the property and fixtures at the cost of Tenant. City shall not
operate the Concession in any manner tending to indicate that the Concession is
affiliated with, part of or operated in conjunction with Tenant's business.
(b) City's Right to Cure Tenant's Default. Upon continuance of any
material default beyond applicable notice and cure periods, City may, but is not
obligated to, cure the default at Tenant's cost. If City pays any money or performs any
act required of, but not paid or performed by, Tenant after notice, the payment and/or
the reasonable cost of performance shall be due as additional Rent not later than five
(5) days after service of a written demand accompanied by supporting documentation.
No such payment or act shall constitute a waiver of default or of any remedy for default
or render City liable for any loss or damage resulting from performance.
(c) Waiver of Rights. Tenant waives any right of redemption or relief
from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under
any other present or future law, in the event Tenant is evicted or City takes possession
of the Premises by reason of. any default by Tenant.
15. SUBJECT TO STATE OPERATING AGREEMENT
The Premises are located on property that is the subject of an Operating
Agreement from the State of California to the City. Tenant shall not take any action that
would cause the City to be in violation of any provisions of that Operating Agreement. If
the State of California terminates the Operating Agreement, this Lease shall terminate
as a result and the Parties shall be released "from all liabilities and obligations under this
Lease.
16. WASTE OR NUISANCE
Tenant shall not commit or permit the commission of any waste on the Premises.
Tenant shall not maintain, commit, or permit any nuisance as defined in Section 3479 of
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® the California Civil Code on the Premises. Tenant shall not use or permit the use of the
Premises for any unlawful purpose.
17. NO CONFLICTS OF USE, HAZARDOUS MATERIALS.
City represents and warrants that, to the best of City's knowledge, (i) Tenant's
use of the Premises does not conflict with applicable Laws, and City knows of no reason
why Tenant would be unable to obtain all required permits, licenses and approvals from
the appropriate governmental authorities; (ii) the Project is not in violation of any
environmental laws, rules or regulations and Tenant's contemplated uses will not cause
any such violation; and (iii) the Project is free of any and all Hazardous Materials.as of
the date of this Lease. In the event that the presence of any Hazardous Materials not
caused by Tenant is detected at the Project at any time during the Term of this Lease
and any Option Term all remedial work shall be performed by City at City's expense.
Tenant's obligation to open shall be delayed until the remedial work is completed if the
remedial work is performed prior to Tenant opening for business. Tenant's, obligation to
pay Rent shall be abated in direct proportion to the extent Tenant is unable to conduct
its business upon the Premises as a result of any remedial work that is performed
subsequent to Tenant opening for business. Tenant shall have the right (but not the
obligation) to terminate this Lease, upon thirty (30) days advance written notice to City
in the event that Hazardous Materials are detected at the Project and the presence or
the remediation materially affects Tenant's ability to conduct its business in the
Premises. "Hazardous Materials" shall mean any oil, flammable explosives, asbestos,
urea formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without limitation,
any "hazardous substances ", "hazardous wastes ", "hazardous materials" or "toxic
substances" under applicable federal, state and local laws, ordinances and regulations.
18. CITY'S DEFAULTSITENANTS REMEDIES.
City shall be in default if it fails to perform, or commence performance if the
obligation requires more than ten (10) days to complete, any material obligation within
ten (10) days after receipt of written notice by Tenant to City specifying the nature of
such default. City shall also be in default if it commences performance within ten (10)
days but fails to diligently complete performance. In the event of City's default, Tenant
may:
(a) Upon five (5) days notice to City, cure any such default,. and City shall
reimburse Tenant the amount of all costs and expenses incurred by Tenant in curing the
default, together with interest and expenses at the maximum rate then allowed by law;
or
(b) Terminate this Lease if City's default materially interferes with Tenant's use of
11
the Premises for its intended purpose and City fails to cure such default within ten (10)
days after a second demand by Tenant in which case Tenant shall have no further or
continuing obligations.
19. NOTICES.
Any notice, demand, request, consent, approval or communication that either
party desires or is required to give shall be in writing and shall be deemed given three
(3) days after deposit into the United States registered mail, postage prepaid, by
registered or certified mail, return receipt requested. Unless notice of a different
address has been given in accordance with this Section, all notices shall be addressed
as follows:
If to City, to: CITY OF NEWPORT BEACH
Attention: City Manager
3300 Newport Boulevard
Newport Beach, CA 92658
(949) 644 -3000
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If to Tenant, to:
20. SURRENDER OF PREMISES
At the Expiration or earlier Termination of this Lease, Tenant shall surrender to
City the possession of the Premises. Tenant shall leave the surrendered Premises,
required personal property and fixtures, in good and broom -clean condition, reasonable
wear and tear excepted. All property that Tenant is not required to surrender, but that
Tenant does abandon shall, at City's election, become City's property at Expiration or
Termination.
21. COMPLIANCE WITH ALL LAWS
Tenant shall at its own cost and expense comply with all statutes, ordinances,
regulations and requirements of all governmental entities, including federal, state,
county or municipal, whether now in force or hereinafter enacted. In addition, all work
prepared by Tenant shall conform to applicable City, county, state and federal laws,
rules, regulations and permit requirements and be subject to approval of the City
Manager and the City.
22. WAIVERS
The waiver by either party of any breach or violation of any term, covenant or
condition of this Lease, or of any ordinance, law or regulation, shall not be deemed to
be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of
any subsequent breach or violation of the same or other term, covenant, condition,
ordinance, law or regulation. The subsequent acceptance by either party of any fee,
performance, or other consideration which may become due or owing under this Lease,
shall not be deemed to be a waiver of any preceding breach or violation by the other
3
party of any term, condition, covenant of this Lease or any applicable law, ordinance or
regulation.
23. SEVERABILITY
If any term or portion of this Lease is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of this
Lease shall continue in full force and effect.
24. APPLICABLE LAW
This Lease shall be construed in accordance with the laws of the State of
California in effect at the time of the execution of this Lease. Any action brought relating
to this Lease shall be adjudicated in a court of competent jurisdiction in the County of
Orange.
25. ENTIRE AGREEMENT: AMENDMENTS
25.1 The terms and conditions of this Lease, all exhibits attached, andt all
documents expressly incorporated by reference, represent the entire agreement of the
parties with respect to the subject matter of this Lease.
25:2 This Lease shall supersede any and all prior agreements, oral or written,
regarding the subject matter between Tenant and City.
25.3 No other agreement, promise or statement, written or oral, relating to the
subject matter of this .Lease, shall be valid or binding, except by way of a written
amendment to this Lease.
25.4 The terms and conditions of this Lease shall not be altered or modified
except by a written amendment to this Lease signed by Tenant and City.
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25.5 If any conflicts arise between the terms and conditions of this Lease, and
the terms and conditions of the attached exhibits or the documents expressly
incorporated by reference, the terms and conditions of this Lease shall control.
25.6 Any obligation of the parties relating to monies owed, as well as those
provisions relating to limitations. on liability and actions, shall survive termination or
expiration of this Lease.
25.7 Each party has relied on its own inspection of the Premises and
examination of this Lease, the counsel of its own advisors, and the warranties,
representations, and covenants in this Lease. The failure or refusal of either party to
inspect the Premises, to read this Lease or other documents, or to obtain legal or other
advice relevant to this transaction constitutes a waiver of any objection, contention, or
claim that might have been based on such reading, inspection, or advice.
26. TIME IS OF THE ESSENCE
Time is of the essence for this Lease.
27. SUCCESSORS
Subject to the provisions of this Lease on assignment and subletting, each and
all of the covenants and conditions of this Lease shall be binding on and shall inure to
the benefit of the heirs, successors, executors, administrators, assigns, and personal
representatives of the respective parties.
28. INTERPRETATION
The terms of this Lease shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of this Lease or any other rule of construction which might otherwise apply.
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29. BROKERS
Each party warrants to and for the benefit of the other than it has had no dealings
with any real estate broker or other agent (attorneys excepted) in connection with the
negotiation or making of this Lease.
30. TABLE OF CONTENTS; HEADINGS
The table of contents of this Lease and the captions of the various sections of
this Lease are for convenience and -ease of reference only and do not define, limit,
augment, or describe the scope, content, or intent of this Lease.
31. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes
the feminine and neuter, and the feminine includes the neuter, and each includes ^�
corporation, partnership, or other legal entity whenever the context requires. The 1
singular number includes the plural whenever the context so requires.
32. EXHIBITS
All exhibits to which reference is made in this Lease are incorporated by
reference. Any reference to "this Lease" includes matters incorporated by reference.
33. CITY BUSINESS LICENSE
Tenant shall obtain and maintain during the duration of this Lease, a City
business license as required by the Newport Beach Municipal Code.
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34. COSTS AND ATTORNEYS FEES
The prevailing party in any action brought to enforce the terms and conditions of
this Lease, or arising out of the performance of this Lease, shall not be entitled to
recover its attorneys' fees.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first written above.
CITY OF NEWPORT BEACH ( "City "),
a Municipal Corporation
By:
ATTEST:
LaVonne Harkless
City Clerk
APPROVED AS TO FORM:
Aaron Harp
Assistant City Attorney
Steve Rosansky, Mayor of Newport Beach
By:
('Tenant')
President
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EXHIBIT "C"
CITY OF NEWPORT BEACH
VENDOR APPLICATION FORM
TYPE OF APPLICANT: ❑ NEW ❑ CURRENT OPERATOR
Legal Contractual Name of Business:
Owner's Name:
Business Mailing Address:
City, State and Zip Code:
E -Mail Address
Phone: Fax:
General F3uslness
Contact Person for Business Operations:
Title: E -Mail Address for Business Operations
Business Telephone: Business Fax:
Fiscal
Contact Person for Fiscal Operations:
Title: E -Mail Address for Fiscal Operations _
Business Telephone: Business Fax:
Is your business: (check one)
❑ NON PROFIT CORPORATION ❑ FOR PROFIT CORPORATION
Is your business: (check one)
❑ CORPORATION ❑ LIMITED LIABILITY PARTNERSHIP
❑ INDIVIDUAL ❑ SOLE PROPRIETORSHIP
❑ PARTNERSHIP ❑ UNINCORPORATED ASSOCIATION
Names & Titles of Co- Owners, Partners, or Board Members
(Also list Names & Titles of persons with written authorization /resolution to
sign contracts).
Names Title Phone
Names and Titles of Business Officers
Names Title
Phone.
Does business have any liens or claims?
(If so, please indicate by whom and specify lien or claim, including any tax
delinquencies)
Name of Company
Claim Lien Amount
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Please provide the following:
Federal Tax Identification Number:
City of Newport Beach Business License Number:
(If none, selected vendor must obtain a Newport Beach Business License
prior to execution of contract.)
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EXHIBIT "D"
CORONA DEL MAR STATE BEACH CONCESSION
RFP SUBMISSION CHECKLIST
Name of Applicant
❑ Vendor Application
❑ RFP Checklist
❑ Business Structure, Key Staff and their Qualifications
❑ Description of Experience
❑ Financial Information
❑ Budget Information
❑ References O
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