HomeMy WebLinkAbout01 - Commercial Marinas Located Upon City Managed Tidelands�EW `Rr CITY OF
NEWPORT BEACH
City Council Staff Report Agenda Item No. 1
October 23, 2012
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3001, dkiff @newportbeachca.gov
PREPARED BY: Dave Kiff — City Manager
APPROVED: " 0.
TITLE: Commercial Marinas Located Upon City Managed Tidelands
ABSTRACT:
The City of Newport Beach ( "City ") acts as the trustee of the State of California ( "State ")
in the administration of public tidelands property within Newport Harbor. In this
capacity, the City is effectively a landlord and is empowered by the 1978 Beacon Bay
Bill, as amended ( "Beacon Bay Bill "), to rent tidelands property to third parties for a
period of 50 years or less.
After the City Council's September 12, 2012 meeting and following a series of meetings
with some affected stakeholders, the Council Ad Hoc Committee on Harbor Charges
( "Committee ") has modified its recommendations significantly and now recommends:
• Allowing marina operators to choose between a 1 -year permit and a long -term lease;
• That the Council adopt a formal lease and permit template.
• That rent be set at up to 20% of Gross Slip Revenues ( "GSR "), but set forth in a
Marina Index that translates the "up to 20% of GSR" to an amount per square foot.
• That rental increases be phased in over six periods, starting in 2013 and ending at
the fully indexed rate in 2018.
• That the index be made up of nine marinas, including the Balboa Yacht Basin and
the Bahia Corinthian Yacht Club.
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Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 2
RECOMMENDATIONS:
1. Determine an appropriate rental amount for the leases /permits.
2. Adopt Resolution No. 2012 -91 approving a model lease template and model permit
for commercial marinas located upon City managed tidelands.
3. Adopt Resolution No. 2012 -92 establishing a 9- marina index and setting rent for
commercial marinas located upon City managed tidelands at % of gross slip
revenue converted to a square footage based upon the marina index.
4. Direct staff to bring back amendments
( "NBMC ") to allow the City the option t o
marinas in lieu of a lease.
FUNDING REQUIREMENTS:
to the Newport Beach Municipal Code
issue an annual permit to commercial
The current budget allows for the resources needed to implement the model lease and
permit template for commercial marinas. The City's income properties administration
position as well as the City Attorney and City Manager's office will handle lease and
permit implementation.
DISCUSSION:
A majority of the waterways in Newport Harbor are tidelands, owned by the State on
behalf of the people. The California Legislature through the Beacon Bay Bill granted the
City trusteeship of most of the tidelands within Newport Harbor (the County of Orange
also acts as trustee over some tidelands). The Beacon Bay Bill authorizes the City to
rent the tidelands to third parties, for a term not to exceed 50 years. Both the Beacon
Bay Bill and the NBMC require the City to receive fair market rent as consideration for
allowing a third party to use tidelands.
Commercial Marina Model Lease Template
Historically, the City has issued annual permits to tidelands users, including commercial
marina operators. The Committee was tasked by the City Council to develop a lease
template that may be used in place of the permit to provide greater consistency with the
lease requirements in NBMC Section 17.60.060. The proposed lease also provides
greater stability to commercial marina operators through a longer term property interest
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Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 3
(currently, the commercial marinas operate under an annual permit that may be revoked
or not renewed at any time).
The model lease template for commercial marinas under consideration by the City
Council was developed to be reflective of commercial tideland marina practices and
provisions that are relatively common throughout the State. The model lease was also
drafted to ensure consistency with the NBMC and the Beacon Bay Bill and contains the
following key terms:
Term: The leases are proposed to be for a term of not less than 5
years and not more than 50 years. The majority of leases
are anticipated to fall within the 10 to 25 year range.
Renewal Option: The lease contemplates and allows for renewal options,
provided the entire term of the lease does not exceed 50
years.
Rent: The City Council established a fair market rent methodology
for commercial marinas at its September 12, 2012, special
meeting (and is refining the methodology at this meeting).
Pursuant to that methodology, rent will be determined
through the use of a Marina Index composed of nine
commercial marinas located within Newport Harbor as a
square footage rate reflective of up to 20% of GSR.
Rent Phase In: The fair market rent for commercial marinas will be phased
in over a period of six years and not reach the full fair market
phase in rate until 2018.
Rent Adjustment: The fair market rent will be recalculated every year by staff
to ensure it is reflective of any increases or decreases within
the Marina Index. There is also an appraisal -based
adjustment after 15 years to ensure the rate is reflective of
fair market value.
Available Uses: The uses will be generally, consistent with existing uses,
including marine - oriented activities, such as marinas, piers,
docks and related uses.
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Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 4
It is proposed the lease would be offered first to current commercial marina operators.
Opening the tidelands occupied by a commercial marina up to an open bid process as
contemplated in City Council Policy F -7 is not advisable because redevelopment/reuse
of the tidelands by a third party would require excessive time, resources and costs
which would outweigh other financial benefits. Adoption of the attached resolution
approving use of the model lease template for commercial marinas satisfies the
requirements of NBMC Section 17.60.060(A), which requires the City Council to adopt a
resolution to convert a permit to a lease. If approved by the City Council, the City
Manager or his /her designee would take the lead in transitioning current commercial
marina operators to the lease. The City Manager would also have the discretion to refer
any lease to the City Council for consideration.
COMMERCIAL MARINA MODEL PERMIT
Through its extensive outreach and public meetings, the Committee has revised its
recommendation to allow commercial marina operators the option of continuing with an
annual pier permit or converting to a lease. To facilitate this option, staff seeks direction
to return to the City Council with an ordinance amending the NBMC to allow a permit in
addition to a lease for commercial marinas. The permit contains the following key
terms:
Term: The permits would be valid for a period of 12 calendar
months beginning on March It and ending on the last day of
February of the following year.
Renewal Option: The permits would not renew automatically, but the same
permittee may apply for a new permit annually.
Rent: To ensure consistent treatment under the Beacon Bay Bill,
the rent charged for permits would mirror the rent charged
for leases.
Available Uses: The uses will be generally, consistent with existing uses,
including marine - oriented activities, such as marinas, piers,
docks and related uses.
Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 5
As with the leases, it is proposed the permits would be offered first to current
commercial marina operators. Opening the tidelands occupied by a commercial marina
up to an open bid process as contemplated in City Council Policy F -7 is not advisable
because redevelopment /reuse of the tidelands by a third party would require excessive
time, resources and costs which would outweigh other financial benefits. If the permit is
approved by the City Council, the City Manager or his /her designee would take the lead
in issuing permits to commercial marina operators. The City Manager would also have
the discretion to refer any permit to the City Council for consideration.
SETTING FAIR MARKET RENT
The Beacon Bay Bill, California Constitution Article 16, Section 6, NBMC Section
17.60.060(D), NBMC Section 17.60.020(E), and City Council Policy F -7(D) require the
City to receive fair market rent when renting tidelands to third parties. The fair market
rent may be set by the City Council at any amount provided the amount is based in part
upon an appraisal prepared by a "City- selected" appraiser and is reflective of fair market
value. In determining fair market value, the City Council may consider other factors in
addition to the appraisal (e.g., current market conditions, comparable rents charged by
other government entities, etc.). The rental rate currently charged by the City for
commercial marinas under the annual permit system is well below the fair market rate
due to a lack of regular rate increases. For example, the City currently charges
commercial permit holders $0.36 for every square foot of tidelands rented per year.
In response to this inequity, on September 12, 2012, the City Council adopted a new
methodology to calculate fair market rent for commercial marinas. However, in advance
of this October 23, 2012 meeting, the Ad Hoc Committee recommends as follows:
Starting in 2013, rent would be determined through the use of a Marina Index,
composed of commercial marinas located within Newport Harbor, as a square footage
rate reflective of up to 20% of GSR. The "up to 20% of GSR" should be phased in
starting in 2013 and ending at a fully- indexed rate by 2018.
An example of the new rate methodology is provided in Table #1. Table #1 reflects
many assumptions — at its base, it assumes a Target Index Rate of $2.10 /SF and that
varies and increases to $2.21 /SF in 2018.
Table #1
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Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 6
Assumed Target Marina Index Rate
$
2.10
$
2.13
$
1.18
$
2.22
$
2.20
$
2.21
$ 2.27
Previous Year's Tidelands Rental Rate
$
0.36
5
0.65
$
0.95
$
1.15
$
1.58
$
1.89
Difference)A)
$
1.74
$
1.48
$
I.23
$
0.97
$
0.62
$
0.32
N!a -At
Periods Leftto Fully- Indexed Rate )B)
6
5
4
3
2
1
Full Index
pate
Increase for [hat Year )A /B)
$
0.29
$
0.30
$
0.31
$
0.32
$
0.31
$
0.31
Note' italicized text denotes assumptions. Assumed scenario for Target Marina index
rate 2013 -2019 suggestslow increase, a decrease, etc.
The development of a square footage rental rate reflective of up to 20% of GSR was
developed by the Committee after consideration of conclusions reached in appraisals
the City has obtained from James Netzer, dated August 10, 2012 (updating a 2006
appraisal), and Gary Rasmuson, dated August 8, 2012, as well as a review of other
marinas in Newport Harbor (see table in 9/12/12 Staff Report). The Netzer and
Rasmuson analyses indicated that the current rental range based upon gross revenue
percentage is between 17% - 25% depending on certain variables. While the City
selected Mr. Netzer, Mr. Rasmuson was recommended to the City by harbor permittees.
Using an "up to 20% of GSR" revenue benchmark is also lower than the rent applied to
two current county leases of tidelands in Newport Harbor and is less than some other
marinas in the harbor.
1 %awl% /_xl:�ld /_��l►�U7� 1
At the September 12, 2012, meeting the City Council directed staff to return with
refinements to the methodology and a proposed group of commercial marinas to be
included within the Marina Index. The marinas in the Marina Index proposed by the
Committee on Harbor Charges and presented to the City Council on September 12,
2012 were the marinas shown below but not underlined. The Committee suggests that
the City Council also include the underlined marinas in a 9- marina index:
1. Ardell
2. Bahia Corinthian Yacht Club
3. Balboa Yacht Basin
4. Bayshores Marina
5. Bayside Marina
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Commercial Marinas Located Upon City Managed Tidelands
October 23, 2012
Page 7
6. Lido Yacht Anchorage
7. Harbor Towers Marina
8. Newport Dunes Marina
9. Newport Marina
Each year, the City would determine the gross revenue from slip rentals for each of
these marinas. At the same time, the City would use existing or estimated tidelands
square footages based on existing leases or permits to identify the correct amount of
tidelands under use.
The basic calculation to generate a "Percent of Gross Equivalent in Square Feet" is this:
Aggregate of 9 Marinas' Gross Revenue from Slip Revenues x Amount up to 0.20%
Aggregate of 9 Marinas' Square Footage of Tidelands under Lease
Other changes (recommended by the Committee) to the lease, rent, and index are
shown in Attachment A.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will
not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or
indirectly.
NOTICIN[.-
In addition to the stakeholder input noted above, this agenda item has been noticed
according to the Brown Act (at least 72 hours in advance of the meeting at which the
City Council considers the item).
Submitted by:
h�� D. !:
Dave Kiff 9
City Manager
7
Attachment "A"
What's Changed?
First and foremost, the Committee is now recommending that commercial marina
operators be given the option of executing a lease versus staying with an annual permit.
But focusing on the lease, the following key provisions have evolved based upon
discussions with current commercial marina operators.
Rent:
• Was - 20% of gross slip revenue ( "GSR ").
• Now — up to 20% of gross slip revenue (exact amount TBD by the City Council on
10 -23).
• Was - a direct calculation /payment of % of gross slip revenues per marina.
• Now - a square foot equivalent to "up to 20% of GSR" based on a Marina Index.
This removes the need for the City to obtain marina revenue or other financial
information from each marina.
• Was - No phase -in of increased rents, then three -year phase -in.
• Now - 6 -year phase -in
Re- Appraisal:
• Was — re -set rents every five years.
• Now — do a harbor -wide appraisal (to determine market value % of gross) again in
2028 (15 years, then every 15 years thereafter) applicable to all permittees and
lessees under the new lease and permit template.
Marina Index:
• Was — Did not include Balboa Yacht Basin.
• Now— Includes BYB now, as well as Balboa Corinthian Yacht Club.
Set -aside for Maintenance & Capital Improvements:
• Was — 4% of gross slip revenue.
• Now — no set -aside required.
Participation Rent:
• Was — City would receive participation $$ if leasehold sold.
• Now — no participation rent.
Term:
• Was — 5 years to 30 years (including options to 50 years).
• Now— 5 to 25 years (including one option to 50 years) or no lease at all
0
Option Fee:
• Was — fee paid to City to exercise option.
• Now— no fee required.
Lease v. Permit:
• Was - everyone must go to a lease.
• Now— commercial marina operators may choose either a lease or a one year permit
at their option.
Lease Terms - Use of Premises:
• Was — detailed list of what Premises can be used for.
• Now - no list — just "marina and associated ancillary uses."
Lease Terms — Prohibited Activity:
• Was — included detailed list of prohibited activity.
• Now— deleted list.
Lease Terms — Security Deposit:
• Was — required.
• Now — deleted.
Lease Terms — Alterations or Construction:
• Was — detailed process for City approval of alterations /construction.
• Now — section deleted (was redundant with other laws).
Lease Terms — Maintenance Standard:
• Was — maintain to "first class order, condition, and repair."
• Now — maintain to "good order, condition, and repair."
Lease Terms — Maintenance Standard Prior to Renewal Term:
• Was — detailed list of inspection requirements.
• Now — the detailed list has been removed in favor of a marine surveyor report
certifying the remaining useful life of improvements.
Lease Terms — What to do with Improvements following Expiration of Lease:
• Was— quitclaim to City.
• Now — Lessee can remove or quitclaim, at its option.
Lease Terms — Right to Enter Premises:
• Was — City had right to enter and inspect premises with 24 -hour notice.
• Now— City must provide 72 -hours advance notice.
Lease Terms — Hazardous Substances:
• Was — broad enough to place liability on to a lessee when hazardous material
migrated on to the Premises through no fault of lessee or its agents.
0
Now — Lessee is not responsible/ liable for any Hazardous Substances that are
brought on to the Premises, through migration or other means, by third - parties not
associated with Lessee.
Lease Terms — Insurance:
• Was — very comprehensive and included protections that may be overly burdensome
on commercial marina operators.
• Now— has been streamlined to provide the least amount of burden on a commercial
marina operator.
10
ATTACHMENT B
RESOLUTION NO. 2012-
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NEWPORT BEACH
APPROVING A MODEL LEASE TEMPLATE AND MODEL PERMIT FOR
COMMERICIAL MARINAS LOCATED UPON TIDELANDS
WHEREAS, pursuant to the 1978 Beacon Bay Bill, as amended, ( "Beacon Bay
Bill ") the City of Newport Beach ( "City') acts on behalf of the State of California as the
trustee of tidelands located within the City's limits, including Newport Harbor;
WHEREAS, Section 1(b) of the Beacon Bay Bill and Section 17.60.060 of the
Newport Beach Municipal Code ( "NBMC ") allow the City to authorize third parties to use
tidelands for commercial purposes for a term not to exceed fifty (50) years;
WHEREAS, the City desires to allow marinas, as that term is defined in Newport
Beach Municipal Code ( "NBMC') Section 17.01.030(J)(3), to operate upon the tidelands
under either a permit or a lease;
WHEREAS, the Beacon Bay Bill, California Constitution Article 16, Section 6,
NBMC Section 17.60.060(D), NBMC Section 17.60.020(E), and City Council Policy F-
7(D) require the City to receive fair market rent when allowing third parties to use
tidelands;
WHEREAS, NBMC Section 17.060.060(D) vests the City Council with the
exclusive discretion to determine fair market rent based upon the findings of a City -
selected appraiser;
WHEREAS, on July 27, 2010 the City Council formed the Council Ad Hoc
Committee on Harbor Charges ( "Committee ") and tasked the Committee with
performing a comprehensive review of tidelands uses to consider the conversion of
existing permits to leases and to assist the City Council in developing a template
tideland lease /permit form and determining fair market value rent;
WHEREAS, the Committee and members of the Committee held public outreach
meetings commercial marina operators to solicit their input and participation in the
tidelands review process and these meetings afforded the public the opportunity to
comment on this matter as well as provided the public information relating to this matter;
WHEREAS, the City Council held several study sessions where public input and
testimony was taken, including meetings on March 13, 2012 and September 12, 2012;
WHEREAS, the City Council has considered all documents and comments in the
record in connection with this resolution; and
11
WHEREAS, after considering all public input, the Committee recommends
adoption of a model commercial marina lease and model permit to allow commercial
marina operators flexibility to determine the option that best suits their needs.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The Recitals provided above are true and correct and are
incorporated into the substantive portion of this resolution.
Section 2: The City Council finds that the model lease template for commercial
marinas attached to this resolution, and incorporated by this reference, satisfies the
requirement of NBMC Section 17.60.060(A) covering the conversion of existing permits
to leases. The City Council further finds that the commercial marinas subject to the
attached model lease template for commercial marinas are not subject to the open bid
process found in City Council Policy F -7 because redevelopment/reuse of the tidelands
by a third party would require excessive time, resources and costs which would
outweigh other financial benefits.
Section 3: The City Council further finds that the model commercial marina
permit attached to this resolution, and incorporated by this reference, may be used by
commercial marina operators as an alternative to the model lease template for
commercial marinas. The City Council further finds that the commercial marinas subject
to the attached model commercial marina permit are not subject to the open bid process
found in City Council Policy F -7 because redevelopment/reuse of the tidelands by a
third party would require excessive time, resources and costs which would outweigh
other financial benefits.
Section 4: The City Council determines, even though it has discretion to make
determinations regarding the form of template lease /permit and rental provisions
therein, that the evidence in the record constitutes substantial evidence to support the
actions taken and the findings made in this resolution, that the facts stated in this
resolution are supported by substantial evidence in the record, including, without limit,
testimony received at public hearings, the Staff presentations and Staff reports made in
connection with this matter, all materials in project files, and the Netzer and Rasmuson
appraisal reports. The City Council expressly declares that it considered all evidence
presented and reached these findings after due consideration of all evidence presented
to it and determines that evidence presented that was contrary to the findings made in
this resolution was not sufficient or substantial enough to outweigh the evidence
supporting this resolution.
Section 5: Pursuant to NBMC Section 17.60.060(A) and its power under the
Beacon Bay Bill, the City Council approves the attached model lease template for
commercial marinas and the attached model permit for commercial marinas.
Notwithstanding City Council Policy F -7, the City Council authorizes the City Manager or
-2- 12
his /her designee to enter into the attached lease /permit, in a form that is substantially
similar to the attached model lease template and model commercial marina permit, with
commercial marinas located upon City administered tidelands. At his /her discretion, the
City Manager may refer any commercial marina lease /permit to the City Council for
consideration.
Section 6: The City Council find this action is not subject to the California
Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will
not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or
indirectly.
Section 7: This resolution shall take effect immediately upon its adoption by
the City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this day of 2012.
Nancy Gardner,
Mayor
r,IJWr� -JS
Leilani I. Brown,
City Clerk
Attachments: (1) Model Lease Template for Commercial Marinas
(2) Model Permit for Commercial Marinas
-3- 13
ATTACHMENT
LEASE AGREEMENT [(WITH OPTIONS FOR RENEWAL)]
BY AND BETWEEN
City of Newport Beach, a California municipal corporation
( "Lessor ")
.LI,
E
("Lessee")
14
TABLE OF CONTENTS
15
Page
1.
Definitions ......................................................................................... ..............................1
2.
Leased Premises ............................................................................... ..............................1
3.
Term .................................................................................................. ..............................2
4.
Rent .................................................................................................. ..............................2
5.
Utilities, Taxes and Assessments ...................................................... ..............................3
6.
Use of the Premises .......................................................................... ..............................3
7.
Reserved .......................................................................... ..............................6
8.
Acceptance of Condition of Premises - "As -Is" / Waiver / Release ..... ..............................4
9.
Reserved ........................................................................................... ..............................5
10.
Reconstruction or Removal ............................................................... ..............................5
11.
Maintenance and Repair ................................................................... ..............................6
12.
Liens ................................................................................................. ..............................7
13.
Reserved ........................................................................................... ..............................8
14.
Quitclaim Deed .................................................................................. ..............................8
15.
Right to Enter the Premises for Inspection ......................................... ..............................8
16.
Transfers / Hypothecation for Financing ............................................ ..............................8
17.
Bankruptcy ....................................................................................... .............................12
18.
Defaults ............................................................................................ .............................12
19.
Remedies ......................................................................................... .............................13
20.
Surrender of Premises ...................................................................... .............................15
21.
Condemnation .................................................................................. .............................15
22.
Indemnification ................................................................................. .............................17
23.
Insurance ........................................................................ .............................19
24.
Hazardous Substances .................................................................... .............................18
25.
Quiet Possession ............................................................................. .............................19
26.
Compliance with Applicable Laws ..................................................... .............................20
27.
Not Agent of Lessor .......................................................................... .............................20
28.
No Third Party Beneficiaries ............................................................. .............................20
29.
Limitation of Leasehold / Easements ................................................ .............................20
30.
Notices ............................................................................................. .............................20
31.
Entire Agreement/ Amendments ........................................................ .............................21
32.
Waivers ............................................................................................ .............................22
33.
Lessor's Authorized Representative ................................................. .............................22
34.
City Business License ...................................................................... .............................22
35.
Governing Law & Non - Binding Arbitration ........................................ .............................22
36.
Interpretation .................................................................................... .............................23
37.
Time is of the Essence ..................................................................... .............................23
38.
California Labor Laws ....................................................................... .............................23
39.
Joint and Several Liability ................................................... .............................25
40.
Memorandum of Lease Agreement .................................................. .............................23
41.
No Pre - commitment / Retention of Discretion / Assumption of Risk and
Waiver.............................................................................. .............................25
42.
No Damages .................................................................................... .............................24
43.
Appraisals ................ ............................... .........................Error! Bookmark not defined.
44.
Reserved ......................................................................... .............................27
45.
Late Charges and Delinquency Rates .............................................. .............................25
46.
Reserved .......................................................................................... .............................26
47.
Government Claims Act .................................................................... .............................26
15
This Lease Agreement [(With Options for Renewal)] ( "Agreement ") is entered into this
1st day of March, 2013 by and between the City of Newport Beach, a California municipal
corporation and charter city ( "Lessor' or "City "), and a
( "Lessee ").
RECITALS
A. Pursuant to the Tidelands Grant, the State of California granted to Lessor, as trustee,
certain Tidelands. The Tidelands must be used to promote the public's interest in water -
dependent or water - oriented activities, as described more fully in the Tidelands Grant;
B. The Tidelands Grant provides that the Tidelands shall not, at any time, be granted,
conveyed, given, or alienated to any individual, firm or corporation for any purpose
whatever except pursuant to Lessor's grant of either a franchise or lease;
C. The Tidelands Grant authorizes Lessor to enter into leases of the Tidelands for a period
not exceeding fifty (50) years so long as such leases are consistent with Lessor's
obligations to hold the Tidelands in trust for the uses and purposes contained in the
Tidelands Grant;
D. On 20 the City Council approved this Agreement by adopting Resolution
No. _- , as required by Municipal Code section 17.60.060(A); therefore,
subject to the terms and conditions of this Agreement, Lessor desires to lease a portion
of the Tidelands defined as the Premises to Lessee and Lessee desires to lease the
Premises;
E. The City previously issued City Pier Permit Number ( "Permit ") for the
Premises; City Pier Permit Number , which shall expire February 28,
2013 after which time the City has stated such Permit will not be renewed and Lessee or
any other party has no continuing rights in such Permit after such date; and
F. The parties desire to enter this Agreement for a term described herein and to grant
Lessee an option to extend the term of this Agreement.
In consideration of the mutual promises and obligations contained in this Agreement, the
receipt and sufficiency of which is hereby acknowledged, and the Recitals above, which are
incorporated by this reference, Lessee and Lessor hereby enter into this Agreement on the
following terms and conditions:
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
Definitions
Capitalized terms that are not otherwise defined in the body of this Agreement (which
are identified in parentheses (" ")) have the meanings attributed in Exhibit "A ".
2. Leased Premises
Lessor hereby leases to Lessee, for the Term specified in Section 3, the Premises. The
rights granted to Lessee by this Agreement are subject to Lessee's compliance with the
16
terms, covenants and conditions in this Agreement. Lessee covenants, as a material
part of the consideration for this Agreement, to keep and perform each and every term,
covenant and condition of this Agreement.
3. Term
(a) Initial Term: The Term of this Agreement shall be (_) years commencing
on the 1st day of March, 2013, which shall be the "Commencement Date," and
terminating on the day of , 20, unless sooner terminated as
provided in this Agreement.
(b) Option for Renewal Term(s): If Lessee is not in default of its obligations in this
Agreement, then Lessee shall have the option to extend the Term of this
Agreement for (_) additional successive "Renewal Term(s)" of (_)
years each, on the same terms and conditions contained in this Agreement. As
provided by the Tidelands Grant, in no event shall the Term and any Renewal
Terms exceed a total of fifty (50) years.
(i) Each Renewal Term for which an option is exercised shall commence at
the expiration of the immediately preceding Term. Lessee must exercise
its option to a Renewal Term by giving a written "Option Notice" of its
election to Lessor no earlier than two hundred and seventy (270) calendar
days and no later than ninety (90) calendar days prior to the expiration of
the immediately preceding Term.
(ii) Should Lessee fail to timely give an Option Notice, then the option for the
Renewal Term and all subsequent Renewal Terms shall be null and void
and of no further force and effect. Rent for the Renewal Term shall be
determined and adjusted as described in Section 4 below.
4. Rent
(a) Rent: Rent shall be calculated pursuant to Resolution No. 2012 -_, or any
successor /amended resolution. Resolution No. 2012 - and any
successor /amended resolution are automatically incorporated by reference into
this Agreement, without any further action by the parties, when adopted by the
Newport Beach City Council.
(b) Periodic Payment of Rent: One - twelfth (1/12) of annual Rent for a particular
Lease Term Year shall be payable on the first (1st) day of each month during the
Term.
(c) Place for Payment of Rent: All payments of Rent shall be made in lawful money
of the United States of America and shall be paid to Lessor in person or by
United States' mail, or overnight mail service, at the Cashier's Office located at
3300 Newport Boulevard, Newport Beach, CA 92658, or to such other address
as Lessor may from time to time designate in writing to Lessee. If requested by
Lessor, Lessee shall make payments electronically (at
www.newportbeachca.gov) or by wire transfer (at Lessee's cost). Lessee'
assumes all risk of loss and responsibility for late charges and delinquency rates
-2- 17
5.
if payments are not timely received by Lessor regardless of the method of
transmittal.
(d) Additional Rent: Lessee shall pay as "Additional Rent" for the Premises, within
ten (10) calendar days of Lessor's demand therefore (unless a different time for
payment is expressly provided in this Agreement), all other amounts required by
this Agreement, in addition to Rent. Additional Rent does not reduce or offset
Lessee's obligations to pay Rent.
(e) No Abatement or Reduction in Rent: Lessee has no right to any abatement, set-
off or reduction in Rent or Additional Rent. No endorsement or statement on any
check or any letter accompanying any check or payment will be deemed an
accord and satisfaction, and Lessor may accept such check or payment without
prejudice to Lessor's right to recover the balance or pursue any other available
remedy.
(f) Net Lease: Rent, as defined in this Agreement, is based upon Lessee's material
representation and covenant that it will pay all expenses, costs, taxes;
assessments, fees or charges, and incur all liabilities, of every kind in any way
relating to, or in connection with, the Premises and the Improvements during the
Term. Accordingly, Lessee will promptly pay all expenses, costs, taxes,
assessments, fees or charges, and incur all liabilities, of every kind and
description relating to, or in connection with, the Premises and the Improvements
during the Term.
Utilities. Taxes and Assessments
(a) Lessee is solely responsible for obtaining all utilities and paying all taxes, fees
and assessments for the Premises or Improvements located thereon. Lessee
shall promptly pay, and discharge prior to delinquency, any and all charges for
services or utilities and all taxes, fees and assessments furnished to or due on
the Premises or Improvements located thereon, or occupants thereof.
(b) Lessor hereby gives notice to Lessee, pursuant to Revenue and Tax Code
Section 107.6 that this Agreement may create a possessory interest that is the
subject of property taxes levied on such interest, the payment of which taxes
shall be the sole obligation of Lessee. Lessee shall advise in writing any
sublessee, licensee, concessionaire or third party using the Premises of the
requirements of Section 107.6.
(c) Any payments under this Section shall not reduce or offset Rent payments.
Lessor has no liability for such payments.
6. Use of the Premises
(a) During the term of this Agreement, Lessee will use and occupy the Premises
solely and exclusively for the operation of a marina or boat berthing facility and
associated ancillary uses.
-3-
EM
7. Reserved.
8. Acceptance of Condition of Premises - "As -Is" / Waiver / Release
(a) Lessee's Acknowledgment: Lessee acknowledges that Lessee, Lessor or
unrelated third parties may have constructed improvements (some or all of which
may be Improvements as specified on Exhibit "B ") on and adjacent to the
Premises (including, without limit, bulkheads in the surrounding area adjacent to
and /or abutting the Premises). Lessee agrees and acknowledges that it is
relying solely on its own inspections and investigations regarding the Premises,
the condition of the Premises, the surrounding area and all other matters related
thereto. Lessee represents and warrants that it has obtained the advice of such
independent professional consultants as it deems necessary in connection with
its investigation and study of the Premises and surrounding area, including,
without limitation, water quality, Improvement quality, soils, hydrology,
seismology, archaeology, Applicable Laws (including, without limitation, the laws
relating to the construction, maintenance, use and operation of the Premises and
Improvements), and all environmental, zoning and other land use entitlement
requirements and procedures, height restrictions, floor area coverage limitations
and similar matters.
(b) Only Lessor's Express Written Agreements Binding: Lessee acknowledges and
agrees that no person acting on behalf of Lessor is authorized to make, and that
except as expressly set forth in this Agreement, neither Lessor nor anyone acting
for or on behalf of Lessor has made, any representation, warranty, statement,
guaranty or promise to Lessee, or to anyone acting for or on behalf of Lessee,
concerning the condition of the Premises, any other aspect of the Premises or
the surrounding area. Lessee further acknowledges and agrees that no
representation, warranty, agreement, statement, guaranty or promise, if any,
made by any person acting on behalf of Lessor which is not expressly set forth in
this Agreement will be valid or binding on Lessor.
(c) Verification of Acceptance: Lessee further acknowledges and agrees that
Lessee's execution of this Agreement constitutes Lessee's representation,
warranty and covenant that the condition of the Premises and the surrounding
area has been independently verified by Lessee to its full satisfaction, and that,
except to the extent of the express covenants of Lessor set forth in this
Agreement, Lessee will be leasing the Premises based solely upon and in
reliance on its own inspections, evaluations, analyses and conclusions, or those
of Lessee's representatives. As material inducement to Lessor's entering this
Agreement, Lessee represents, warrants and covenants that LESSEE ACCEPTS
AND IS LEASING THE PREMISES, AND IS AWARE OF THE SURROUNDING
AREA, IN ITS "AS -IS, WITH ALL FAULTS" CONDITION AND STATE OF
REPAIR INCLUSIVE OF ALL FAULTS AND DEFECTS, WHETHER KNOWN OR
UNKNOWN, AS MAY EXIST AS OF THE LESSEE'S EXECUTION OF THIS
AGREEMENT, AND WITH NO WARRANTY EXPRESS OR IMPLIED FROM
LESSOR AS TO ANY LATENT, PATENT, FORESEEABLE AND
UNFORESEEABLE CONDITIONS. Without limiting the scope or generality of
the foregoing, Lessee expressly assumes the risk that the Premises do not or will
not comply with any Applicable Laws now or hereafter in effect.
-4- 19
(d) Waivers, Disclaimers and Release:
(i) Waiver and Disclaimer: Lessee hereby fully and forever waives, and
Lessor hereby fully and forever disclaims, all warranties of whatever type
or kind with respect to the Premises and Improvements, whether
expressed, implied or otherwise including, without limitation, those of
fitness for a particular purpose, tenant ability, habitability or use.
(ii) Lessor's Materials: Lessee further acknowledges that any information
and reports including, without limitation, any engineering reports,
architectural reports, feasibility reports, marketing reports, soils reports,
environmental reports, analyses or data, or other similar reports,
analyses, data or information of whatever type or kind which Lessee has
received or may hereafter receive from Lessor or its agents or consultants
have been furnished without warranty of any kind and on the express
condition that Lessee will make its own independent verification of the
accuracy, reliability and completeness of such information and that
Lessee will not rely thereon. Accordingly, subject to terms of Section 8(e)
below, Lessee agrees that under no circumstances will it make any claim
against, bring any action, cause of action or proceeding against, or assert
any liability upon, Lessor or any of the persons or entities who prepared
or furnished any of the above information or materials as a result of the
inaccuracy, unreliability or incompleteness of, or any defect or mistake in,
any such information or materials. Lessee hereby fully and forever
releases, acquits and discharges Lessor and each person furnishing such
information or materials of and from, any such claims, actions, causes of
action, proceedings or liability, whether known or unknown.
(iii) Waiver of Civil Code Section 1542: With respect to all releases made by
Lessee or Lessor under or pursuant to this Section 8, Lessee or Lessor
hereby waives the application and benefits of California Civil Code
Section 1542 and hereby verifies that it has read and understands the
following provision of California Civil Code Section 1542:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with
the debtor."
Lessee: Lessor:
9. Reserved
10. Reconstruction or Removal
Lessee will promptly cause the Improvements or any part thereof, which are
(a) damaged or destroyed or (b) declared unsafe or unfit for occupancy or use by a
public entity with the appropriate authority, to either be (i) removed or (ii) restored or
reconstructed to their original design and layout, or to a good and safe condition as
reasonably approved by Lessor, whether or not required to be insured against, at
Lessee's sole cost and expense. Restoration or reconstruction shall commence within
5 20
ninety (90) calendar days from the date of issuance of all permits (City and Coastal),
which permits Lessee will diligently pursue in a commercially reasonable timeframe, to
repair, and Lessee shall diligently pursue reconstruction to completion. Lessee shall not
be entitled to any abatement in Rent or other form of compensation from Lessor for loss
of use of the Premises or Improvements in the event of damage or destruction of the
Premises or Improvements. Damage to or destruction of the Premises or the
Improvements shall not permit Lessee to terminate this Agreement. Alternatively, in the
event of damage or destruction, Lessee may remove all Improvements from the
Premises and terminate this Lease. The force majeure provisions in this Agreement
shall apply to reconstruction.
11. Maintenance and Repair
(a) Maintenance by Lessee: Lessee assumes full responsibility for operation and
maintenance and repair of the Premises throughout the Term at its sole cost, and
without expense to Lessor.
(i) Without limiting Lessee's obligations to maintain the Premises, Lessee
shall keep and maintain all Improvements in good order, condition and
repair consistent with similar marinas in Newport Harbor.
(ii) Maintenance dredging bayward of the property line, between the
bulkhead line and the pierhead line, shall be the responsibility of Lessee.
Lessee shall perform all maintenance in compliance with all Applicable
Laws.
(iii) Reserved.
(iv) Reserved.
(v) Lessee expressly waives (a) the right to require Lessor to make repairs;
(b) any right to make repairs at the expense of Lessor; (c) the right to
reduce or offset Rent as a consequence of the condition of the Premises
or the Improvements; and (d) the benefits of California Civil Code
Sections 1932, 1941 and 1942, as amended from time to time; and
(e) any law, judicial pronouncement, or common law principle similar
thereto, which is now or hereafter in effect or is otherwise inconsistent
with the provisions of this Agreement.
(b) Reserved.
(c) Reserved.
(d) Maintenance Prior to Renewal Term: In addition to any other conditions to
Lessee's exercise of the option to extend the Term (or Renewal Term) of this
Agreement, no less than one hundred twenty (120) calendar days prior to the
end of a Term that may be renewed, Lessee shall submit a maintenance report
stating the condition of the Improvements on the Premises. Improvements shall
be inspected, and the maintenance report shall be written, by a qualified marine
engineer that is retained and paid for by Lessee but approved by Lessor.
-6- 21
The maintenance report shall make repair and maintenance recommendations to ensure
that the maintenance standards in this Agreement are met and will be maintained and
the useful life of the Improvements will extend throughout the Renewal Term(s). At the
time of providing the maintenance report to Lessor, Lessee shall sign a certification
under penalty of perjury that Lessee shall, at its sole cost, make all repairs and perform
all maintenance identified in the maintenance report to the reasonable satisfaction of,
and on a schedule satisfactory to, Lessor. Any costs incurred by Lessee to make repair
and maintenance recommendations is a qualification for the Term of this Agreement and
is not Rent. The cost of repair and maintenance recommendations shall not be
considered by the parties or appraiser in determining any Rent or Rent adjustment
during the term of this Agreement.
(e) Maintenance by Lessor
(i) Nothing in this Agreement requires Lessor to perform any maintenance or
repair to the Premises or to any adjacent property or bulkheads; or to
make any improvements whatsoever on or for the benefit of the
Premises. However, with no less than twenty -four (24) hours written
notice -from Lessor to Lessee, Lessor shall have the right, but not the
obligation, to make any emergency repairs related to safety or hazard
concerns to or on the Premises. Lessee shall reasonably cooperate with
Lessor in any activity undertaken by Lessor on the Premises. Lessor may
collect its cost for emergency repairs from the Lessee as Additional Rent.
12. Liens
(a) Liens Prohibited: Lessee shall not permit to be imposed, recorded or enforced
against the Premises, any portion thereof or any structure or Improvement
thereon, any mechanics, materialmen's, contractors or other liens arising from, or
any claims for damages growing out of, any work or repair, construction or
alteration of improvements on the Premises.
(b) Release /Removal of Liens: In the event any lien or stop notice is imposed or
recorded on the Premises, or an Improvement permanently affixed to the
Premises, during the Term, Lessee shall pay or cause to be paid all such liens,
claims or demands before any action is brought to enforce the same against the
Premises or the Improvement. Notwithstanding the foregoing, if Lessee
legitimately contests the validity of such lien, claim or demand, then Lessee shall,
at its expense, defend against such lien, claim or demand provided that it provide
Lessor the indemnity in Section 22 and provided Lessee shall pay and satisfy
any adverse judgment that may be rendered before any enforcement against
Lessor, the Premises, or the Improvement.
(c) Reserved.
(d) Exceptions: Section 12 shall not apply to a foreclosure of a Leasehold Mortgage
encumbering the Leasehold Estate if the Leasehold Mortgage has previously
received Lessor consent in accordance with Section 16(c) of this Agreement.
-7- 22
13. Reserved.
14. Quitclaim Deed
Upon expiration or the earlier termination of this Agreement for any reason, including but
not limited to termination because of default by Lessee, Lessee shall, at Lessee's sole
expense, remove all fixtures, equipment, and Improvements installed by Lessee from the
Premises. Unless another time line is agreed upon by Lessor, all fixtures, equipment
and Improvements shall be removed by Lessee within ninety (90) calendar days
following the expiration or termination of this Agreement. Lessee shall continue to pay
Rent to Lessor during the time Lessee removes the Improvements from the Premises,
as provided in Section 20(b). Alternatively, Lessee, with Lessor's written consent, may
quitclaim all fixtures, equipment, and Improvements on the Premises to Lessor. Lessor
acknowledges the bulkhead is owned by Lessee and Lessor has no rights to use any
portion of such bulkhead. Notwithstanding any other provision of this Agreement as
permitted by California Public Resources Code Section 6312, or any successor statute,
the parties agree that upon expiration or earlier termination of this Agreement Lessor
shall have no liability or obligation to pay compensation for any improvements made to
the Premises.
15. Right to Enter the Premises for Inspection
Lessor expressly reserves the right and shall be entitled to enter the Premises, and all
Improvements, including a right of reasonable access to the Premises across Lessee
owned or occupied lands adjacent to the Premises, to inspect the Premises for
compliance with the terms of this Agreement. Unless otherwise provided in this
Agreement, Lessee shall provide Lessor access to the Premises for such purposes,
upon not less than seventy -two (72) hours written notice.
16. Transfers / Hypothecation for Financing
(a) Transfers: Except as expressly provided herein, Lessee and its successors shall
not either voluntarily, or by operation of law, engage in a Transfer without first
providing written request to Lessor and obtaining Lessor's prior written consent
which shall not be unreasonably withheld or delayed. Notwithstanding anything
to the contrary set forth herein, Lessee may, without consent from the City,
assign all or a portion of its interest in the Premises and /or this Agreement to any
entity or person affiliated with Lessee or a partner member, shareholder or
trustee of Lessee ( "Permitted Transferees "). Lessee agrees that Lessor's
discretion to provide, withhold or condition consent to any Transfer (except for
the Permitted Transfers to a Permitted Transferee in which the City has no
consent) includes, without limitation, Lessor's discretion in administering the
Tidelands, which are a valuable public resource held by Lessor in trust for the
people of the State of California; therefore, Lessor's decision to grant, withhold or
condition consent shall be reasonable. A Transfer made in violation of this
Section 16, including without limitation the obligation to receive Lessor's prior
consent, is a default subject to the cure right in Section 18(b).
(i) Lessee shall comply with the following requirements for any Transfer.
Lessee agrees that failure to satisfy these requirements are reasonable
-8- 23
bases for Lessor to deny consent (but is not exhaustive bases to deny
consent):
(1) Lessee shall give Lessor at least thirty (30) calendar days written
notice of its proposed Transfer and provide appropriate
documentation demonstrating to Lessor's satisfaction the financial
and operational responsibility and appropriateness of the
proposed transferee. Lessee shall provide Lessor within five (5)
calendar days such other or additional information and /or
documentation as may be reasonably requested by Lessor.
(2) Lessee shall provide the terms and provisions of the proposed
Transfer.
(3) Except as otherwise provided in this Agreement for a permitted
Leasehold Mortgagee, the proposed transferee shall, in
recordable form, expressly assume this Agreement.
(4) In the event the proposed transferee is acquiring only a portion of
the adjoining Other Real Property, the rights and obligations of
Lessee and the proposed assignee shall be proportionately
adjusted in the manner deemed appropriate by Lessor in light of
its obligations under the Tidelands Grants; and
(5) Lessee shall pay all Lessor's costs .associated with Lessor's
consideration of the Transfer, regardless of whether such transfer
is consummated, or in connection with any other actions taken by
Lessor pursuant to this Section 16 in the manner provided in
Section O.
(b) Transfer if Appurtenant to Other Real Propert y
(i) The Premises is appurtenant to the adjoining littoral or riparian land
and /or uplands with required uplands support (e.g., parking, restrooms,
etc.). The uplands property along with the location of the code required
uplands support is more particularly described on Exhibit "C" as the
"Other Real Property" and Lessee is the [fee title owner] [lessee of the
Other Real Property pursuant to that certain dated
by and between Lessee as and
as " "] of the Other
Real Property.
(ii) If Lessee Transfers its interest or rights to use such Other Real Property
adjoining the Premises separately from the Premises or Lessee's interest
in this Agreement, Lessee shall provide the following to the Lessor:
(1) Lessee must provide Lessor with thirty (30) calendar days prior
written notice of the proposed Transfer; and
(2) Lessee, subject to Lessor's reasonable approval, must provide
written documentation to Lessor describing in sufficient detail the
-9- 24
required uplands support (e.g., parking, restrooms, etc.) and its
respective location that will serve /benefit the Premises.
(c) Subletting Permitted to Boat Slip Renters
(i) Notwithstanding other provisions of this Section 16, Lessee shall have the
right to sublease the slips to Boat Slip Renters and to extend or renew
any subleases with Boat Slip Renters.
(d) Hypothecation for Financing: For the purpose of financing or refinancing the
acquisition of the Premises, the Improvements, the fixtures and equipment
located on the Premises, the alteration, construction or reconstruction of
Improvements, Lessee may engage in a Transfer to a Leasehold Mortgagee only
if, in addition to such other applicable provisions in this Agreement, the
provisions in this Section 16(d) are satisfied. In no event shall Leasehold
Mortgages either individually or collectively exceed a loan -to -value ratio of
seventy -five percent (75 %) of the Premises.
(i) Notice to Lessor. Lessee shall provide Lessor with a fully executed
complete copy of each Leasehold Mortgage, and all related loan
documents (including copies of all appraisals), any and all amendments
thereto, and the name and address of each Leasehold Mortgagee. In the
event of any assignment of a Leasehold Mortgage or in the event of a
change of address of a Leasehold Mortgagee, Lessee shall provide the
new name and address of the assignee or Leasehold Mortgagee to
Lessor. Notices of default and notices of foreclosure shall be given to
Lessor contemporaneously with service on Lessee.
(ii) Notices to Leasehold Mortgagees. A Leasehold Mortgagee shall not be
entitled to notice or a copy of any notice from Lessor unless Lessee
provides Lessor with Leasehold Mortgagee's name and address and
requests that such Leasehold Mortgagee receive notices.
(iii) Leasehold Mortgagee Opportunity to Remedy Default. Any Leasehold
Mortgagee who is entitled to notice as provided in Section 16(d)(ii) shall
have the right, but not the obligation, to remedy the default or acts or
omissions of Lessee within the period and in the manner specified in this
provision. Upon Lessee's default and subsequent expiration of the
applicable cure period in Section 18, a Leasehold Mortgagee shall be
permitted to remedy such default(s) at any time within fifteen (15)
calendar days (for nonmonetary defaults) and five (5) calendar days (for
monetary defaults) following the expiration of the Lessee's cure period;
provided, however, Lessor shall not be required to furnish any further
notice(s) of default(s) to said Leasehold Mortgagee.
(iv) Leasehold Mortgagee Procedure on Lessee's Default.
(1) Upon Leasehold Mortgagee's remedy of Lessee's default to the
reasonable satisfaction of Lessor, this Agreement shall continue
provided that a Leasehold Mortgagee:
-to- 25
a. Pays all Rent, and other monetary obligations of Lessee
under this Agreement as the same becomes due, and
perform all of Lessee's other obligations under this
Agreement; and
b. If not enjoined or stayed, takes steps to acquire or sell
Lessee's interest in this Agreement and in the Premises to
an assignee, future transferee or purchaser by foreclosure
of the Leasehold Mortgage or other appropriate means,
and prosecutes the same to completion with reasonable
diligence.
(2) Nothing in this Section 16(d) shall extend this Agreement beyond
the Term; nor to require a Leasehold Mortgagee to continue such
foreclosure proceedings after a breach or default has been
remedied. If Lessee's breach or default is remedied and the
Leasehold Mortgagee discontinues such foreclosure proceedings,
this Agreement, at Lessor's option and in its sole and absolute
discretion, may continue as if no breach or default under this
Agreement occurred.
(3) Before a Leasehold Mortgagee, or any other assignee, future
transferee or purchaser by foreclosure of the Leasehold Mortgage,
acquires the Leasehold Estate, it shall, as an express condition
precedent, agree in writing to assume each and every obligation
under the Agreement. Regardless, with the exception of said
Leasehold Mortgagee, no Transfer to an assignee, future
transferee or purchaser by foreclosure of a Leasehold Mortgage
shall be effective without Lessor's prior written consent, which
shall not be unreasonably withheld.
(4) The assignee, purchaser or future transferee at any sale of this
Agreement or of the Leasehold Estate in any proceedings for the
foreclosure of or trustee's sale under any Leasehold Mortgage, or
pursuant to any deed in lieu of foreclosure, shall be deemed an
assignee or transferee of this Agreement, and shall be deemed to
have agreed to perform all of the terms, covenants and conditions
on the part of Lessee to be performed in this Agreement but only
from and after the date of such purchase and assignment, and
only for so long as such purchaser; future transferee or assignee
is the owner of the Leasehold Estate.
(5) If Lessor denies consent to (a) the successful bidder or purchaser
upon foreclosure or (b) a proposed future transferee, assignee or
sublessee of the Leasehold Mortgagee, the sole and exclusive
remedy shall be for such party or the Leasehold Mortgagee to
seek relief in the nature of specific performance.
(6) A Leasehold Mortgagee shall include a statement in any Notice of
Foreclosure Sale that provides the requirements for Lessor's
consent.
-11- 26
(v) Casualty Loss. A standard lender's loss payable endorsement naming
each Leasehold Mortgagee may be added to any and all insurance
policies required to be carried by Lessee hereunder. Nevertheless, the
provisions in any Leasehold Mortgage for the application of insurance
proceeds shall be subject to the provisions of this Agreement and, in the
event of any conflict between the provisions of this Agreement and the
provisions of any Leasehold Mortgage with respect thereto, the provisions
of this Agreement shall control.
(vi) Limitation on Lessee's Riqht to Encumber. Any Leasehold Mortgage now
or hereafter placed on Lessee's interest in the Premises shall be subject
and subordinate to any limitations in the Tidelands Grants, Lessor's
interest in the Tidelands, this Agreement, and any mortgage now in
existence on the Leasehold Estate. Lessee shall not use, encumber or
Transfer this Agreement or the Premises as security or collateral for any
action unless directly related to the Tidelands and the permitted uses
allowed by this Agreement.
(vii) No Rights to Encumber Interest of Lessor. The provisions of Section 16
do not give any entity the right to mortgage, hypothecate, cause a
Transfer of, or otherwise encumber or cause any liens to be placed
against the Lessor's interest in the Premises as trustee of the Tidelands,
nor shall anything in this Agreement be construed as resulting in a
subordination in whole or in part of Lessor's interests.
(viii) Estoppel Certificate. Lessor shall, within ten (10) business days after
written request from Lessee or any Leasehold Mortgagee, certify by
written instrument to any Leasehold Mortgagee or proposed Leasehold
Mortgagee: (a) as to whether this Agreement has been modified,
supplemented, amended, extended or renewed; (b) as to the existence of
any breach or default of this Agreement; and (c) as to the commencement
and expiration dates of the term of this Agreement.
17. Bankruptcy
Lessee agrees that if all, or substantially all, of Lessee's assets are placed in the hands
of a receiver or trustee and remain so for a period of thirty (30) calendar days; or if
Lessee makes an assignment for the benefit of creditors or be adjudicated bankrupt; or if
Lessee institutes any proceedings under the Bankruptcy Act or similar law wherein
Lessee seeks to be adjudicated bankrupt or to be discharged of its debts or seeks to
effect a plan of liquidation or reorganization; or if any involuntary proceedings be filed
against Lessee and not dismissed or stayed within one hundred twenty (120) calendar
days, then this Agreement or any interest in and to the Premises shall not become an
asset in any such proceeding and, to the extent permitted by law (and in addition to the
provisions of Section 18) Lessor may declare this Agreement terminated and take
possession of the Premises.
18. Defaults
The occurrence of any of the following constitutes a default of this Agreement by
Lessee:
-12- 27
Iii Loll
(a) Continued failure to operate, vacation or abandonment of the Premises except
for casualty, damage, repair construction or Harbor dredging for three
hundred (300) consecutive calendar days after the date of Lessor's written notice
to Lessee.
(b) Failure to make any payment required by this Agreement when such failure
continues for a period of fifteen (15) calendar days after the date of Lessor's
written notice that payment is due (unless another time period within which to
make payment is specifically provided); provided that any such notice provided in
this Section 18(b) or in Section 18(c) shall be in lieu of, and not in addition to, any
notice required under Section 1161 of the California Code of Civil Procedure, as
may be amended.
(c) Failure of Lessee to observe or perform any of the covenants, conditions, or
provisions in this Agreement, except for a monetary default specified in
Section 18(b) above, where such failure continues for a period of thirty (30)
calendar days after the date of Lessor's written notice of the default (unless
another time period within which to perform is specifically provided in this
Agreement); provided, however, that if the nature of Lessee's default is such that
more than thirty (30) calendar days are reasonably required to complete its cure,
then Lessee shall not be in default if Lessee commences to cure the default
within thirty (30) calendar days after written notice and thereafter diligently and
continuously pursues the cure to completion.
(d) Any of the events in Section 17 occur; provided that this provision is not
applicable or binding on a Leasehold Mortgagee which is of record and has been
consented to by Lessor, or to said Leasehold Mortgagee's successors in interest
consented to by Lessor, as long as (i) there remains any monies to be paid by
Lessee to such Leasehold Mortgagee under the terms of such Leasehold
Mortgage, (ii) that such Leasehold Mortgagee or its successors in interest,
continuously and timely pays to Lessor all Rent due or coming due under the
provisions of this Agreement and the Premises are continuously and actively
used and (iii) that said Leasehold Mortgagee agrees in writing to assume and
perform each and every obligation under the Agreement.
Remedies
(a) Cumulative Nature of Remedies. If any default by Lessee continues without
being cured in the time period specified in Section 18, then Lessor shall have the
remedies described in this Section 19, which are in addition to all other rights and
remedies provided by law, equity or elsewhere in this Agreement. Lessor shall
have the right to elect its remedies and may resort to any such remedies
cumulatively, or in the alternative.
(i) Maintain Agreement. Lessor may maintain this Agreement in full force
and effect and recover Rent, Additional Rent, payment or other charges
or consideration as they become due, without terminating Lessee's right
of possession, regardless of whether Lessee has abandoned the
Premises.
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K4
(ii) Termination. Lessor may terminate this Agreement by giving Lessee
thirty (30) calendar days written notice. If Lessor terminates this
Agreement, Lessor may recover possession (which Lessee shall
surrender and vacate upon demand) and remove all persons, and
property and Improvements. Lessor shall be entitled to recover the
following as damages:
(1) The Worth at the Time of Award of the unpaid Rent, Additional
Rent or other charges which had been earned at the time of
termination;
(2) The Worth at the Time of Award of the amount by which the
unpaid Rent, Additional Rent or other charges which would have
been earned after termination until the time of award exceeds the
amount of such loss that Lessee proves could have been
reasonably avoided;
(3) The Worth at the Time of Award of the amount by which the
unpaid Rent, Additional Rent or other charges for the balance of
the Term of this Agreement after the time of award exceeds the
amount of such loss that Lessee proves could have been
reasonably avoided;
(4) Any other amount necessary to reasonably compensate Lessor
for the detriment proximately caused by Lessee's failure to
perform its obligations under this Agreement;
(5) At Lessor's election, such other amounts in addition to or in lieu of
the foregoing as may be permitted from time -to -time by applicable
California law; and
(6) Lessor shall also be entitled to an award of the costs and
expenses (including, without limitation, actual attorneys' fees and
costs) incurred by Lessor 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 Lessee.
The "Worth at the Time of Award" of the amounts referred to in "(1)" and
"(2)" above shall be computed by charging interest at ten percent (10 %)
per annum from the dates such amounts accrued to Lessor. The "Worth
at the Time of Award" of the amount referred to in "(3)" above shall be
computed by discounting such amount at ten percent (10 %) per annum.
(b) Waiver of Rights. Lessee 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, if Lessee is evicted or Lessor takes possession of the
Premises by reason of any default by Lessee.
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20. Surrender of Premises
(a) Upon expiration or earlier termination, of this Agreement Lessee shall peaceably
surrender the Premises to Lessor.
(b) If Lessee elects to remove any fixtures, improvements (including all
Improvements to which Lessee has title), or if Lessor declines Lessee's offer to
accept ownership of the same, then Lessee shall restore the Premises to its
natural state as deemed acceptable by Lessor. All plans for Lessee's
subsequent removal shall be to the reasonable satisfaction of Lessor and shall
be completed no later than ninety (90) calendar days after the expiration or
sooner termination of this Agreement or other time line agreed upon by the
Lessor. During any period of time employed by Lessee to remove fixtures,
improvements (including all Improvements to which Lessee has title) Lessee
shall continue to pay Rent to Lessor in accordance with this Agreement, which
said Rent shall be prorated daily.
(c) Any holding over by Lessee after either expiration or earlier termination shall not
constitute a renewal or extension, or give Lessee any rights in or to the
Premises. If Lessee, with Lessor's consent, remains in possession of the
Premises after Agreement expiration or earlier termination (including for the
purpose of Lessee's removal of Improvements), such possession shall be
deemed a month -to -month tenancy terminable upon thirty (30) calendar days'
notice furnished at any time by either party to the other. In addition, all provisions
of this Agreement, except those pertaining to Term, shall apply to the month -to-
month tenancy, and Lessee shall continue to pay all Rent required by this
Agreement. Provided, however, Rent shall be paid monthly on the first (1 st) day
of the month.
21. Condemnation
(a) Lessor shall notify Lessee of any Condemnation by providing written notice
thereof no later than thirty (30) calendar days after the later of (i) the filing of a
complaint in eminent domain by Condemnor or (ii) any voluntary final agreement
by Lessor and Condemnor of the extent of the scope and extent of property
interests in the Premises to be included within the Condemnation.
(b) If the Premises are totally taken by Condemnation, this Agreement shall
terminate as of the date on which Condemnor actually takes physical possession
of the Premises, which date is referred to in this Section 21 as the "Termination
Date." If less than all but more than fifty percent (50 %) of total area of the
Premises are taken through Condemnation, Lessee shall have the option to
terminate this Agreement by providing written notice to Lessor. Lessee's notice
must be given within thirty (30) calendar days after Lessee's receipt of Lessor's
notice provided pursuant to subparagraph (a) above, and if Lessee's notice of
termination is not timely given, then Lessee shall conclusively be deemed to
have elected not to terminate this Agreement. If this Agreement is terminated
under this Section, the termination shall be effective on the Termination Date,
and Lessor shall prorate Rent to that date. Lessee must pay Rent for the period
up to, but not including, the Termination Date, as prorated by Lessor. Lessor
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shall return to Lessee any prepaid Rent allocable to any period on or after the
Termination Date.
(c) If any part of the Premises is taken by Condemnation and this Agreement is not
terminated, Rent shall be proportionately reduced based on the value of the
actual portion of the Premises taken as a percentage of the value of the entire
Premises, in its "before" condition and without regard to any injury to the
remainder, or benefit to the remainder, resulting from the taking or the
construction of the project for which the taking occurs. Lessor shall make such
determination of the amount of reduction in Rent in its reasonable discretion,
based upon either the appraisal for the Condemnation provided by the
Condemnor, or pursuant to an appraisal prepared in the manner provided in
Section 43, as Lessor shall determine. Lessor and Lessee agree to execute an
amendment or other appropriate instrument modifying this Agreement within
thirty (30) calendar days after a partial taking, confirming the reduction in
Premises and reduction in Rent.
(d) If a temporary taking of part of the Premises occurs through (i) the exercise of
any government power by Condemnor or (ii) a voluntary sale or transfer by
Lessor to any Condemnor, either under threat of exercise of eminent domain by
a Condemnor or while legal proceedings for condemnation are pending, Rent
shall abate during the time of such taking but only with respect to that physical
portion of the Premises actually temporarily taken, and all Rent or other
compensation paid by the Condemnor shall be the sole and exclusive property of
Lessor.
(e) In the event of a total or partial Condemnation, though the award shall belong
and be paid to Lessor, Lessee shall be entitled to claim and receive, and Lessor
hereby assigns to Lessee, from such award:
(i) A sum attributable to the fair market value of any and all Improvements
made to the condemned portion(s) of the Premises by Lessee in
accordance with this Agreement, which Improvements Lessee has the
right to remove, but elects not to remove; or, if Lessee elects to remove
any such Improvements, a sum attributable to their reasonable removal
and relocation costs not to exceed the fair market value of such
Improvements; and
(ii) A sum attributable to any excess of the present value at the date of taking
of the fair market rental value of the condemned portion(s) of the
Premises, exclusive of any of Lessee's Improvements for which it is
compensated under subsection (i), above, for the remainder of the term
over the present value at the date of taking of the actual Rent payable by
Lessee hereunder for the condemned portion(s) for the remainder of the
term; and
(iii) A sum attributable to any diminution of the present value at the date of
taking of the fair market rental value (i.e., that portion or those portions
not condemned) for the remainder of the term; and
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(iv) Any sum awarded or paid to Lessee by any Condemnor for damage to
Lessee's business or for "loss of goodwill."
22. Indemnification
In addition to any other indemnity provided for in this Agreement, and notwithstanding
any other provisions of this Agreement to the contrary, Lessee indemnifies, defends
(with counsel selected by Lessor) and holds harmless Lessor, its elected officials,
officers, employees, agents, attorneys, volunteers and representatives from and against
all claims, demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorney's fees, disbursements and court costs) of every kind that may arise from or in
any manner relate to (directly or indirectly): (i) Lessee's rights, obligations, acts or
omissions under this Agreement, (ii) Lessee's occupancy and use, or Lessee's guests,
invitees, sublessees, or licensees occupancy and use, of the Premises, or
Improvements (individually, each a "Claim" and, collectively, "Claims "). The
indemnification in this Section 22 specifically includes, without limitation, all Claims
arising by reason of:
(a) The death or injury of any person or damage to real or personal property caused
or allegedly caused by the condition of the Premises, Improvements, or an act or
omission of Lessee or an agent, contractor, subcontractor, supplier, employee,
servant, sublessee or concessionaire of Lessee;
(b) Any work performed on the Premises, Improvements, or materials furnished to
the Premises, Improvements, by or at the request of Lessee or any agent,
contractor, subcontractor, supplier, employee, servant, sublessee or
concessionaire of Lessee, with the exception of maintenance performed by City;
and /or
(c) Lessee's failure to perform any provision of this Agreement or to comply with any
requirement of Applicable Law or any requirement imposed on the Premises or
Improvements by any duly authorized governmental agency or political
subdivision. Lessee's obligations in this Section (or any other provision providing
indemnity in this Agreement) shall not extend to the degree any Claim is
proximately caused by the sole negligence or willful misconduct of Lessor,
subject to any immunities which may apply to Lessor with respect to such
Claims. This indemnification provision and any other indemnification provided
elsewhere in this Agreement shall survive the termination of this Agreement and
shall survive for the entire time that any third party can make a Claim.
23. Insurance
Without limiting Lessee's indemnification of Lessor, Lessee will obtain, provide and
maintain at its own expense during the Term of this Agreement, a policy or policies of
insurance of the type, amounts and form acceptable to Lessor. The policy or policies
shall provide, at a minimum, those items described in Exhibit "D ".
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24. Hazardous Substances
(a) From the Commencement Date and throughout the Term, Lessee will not use,
occupy, or permit any portion of the Premises to be used or occupied in violation
of any Hazardous Substance Laws. Notwithstanding any other provision in this
Section 24, Lessee is not responsible /liable for any Hazardous Substances that
are brought on to the Premises, through migration or other means, by third -
parties not associated with Lessee.
(b) Notwithstanding any contrary provision of this Agreement, and in addition to the
indemnification duties of Lessee set forth elsewhere in this Agreement, Lessee
indemnifies, defends with counsel reasonably acceptable to Lessor, protects, and
holds harmless Lessor, its elected officials, officers, employees, agents,
attorneys, volunteers and representatives from and against any and all losses,
fines, penalties, claims, demands, obligations, actions, causes of action, suits,
costs and expenses (including, without limitation, attorneys' fees, disbursements
and court costs), damages, judgments, or liabilities, including, but not limited to,
any repair, cleanup, detoxification, or preparation and implementation of any
remedial, response, closure or other plan of any kind or nature which the Lessor,
its officials, officers, employees, agents, attorneys, volunteers or assigns may
sustain or incur, or which may be imposed upon them, in connection with any
breach of Lessee's obligations or representations in this Agreement or the use of
the Premises under this Agreement, arising from or attributable to the Lessee
Parties (defined below) storage or deposit of Hazardous Substances in violation
of Applicable Laws. This Section is intended to operate as an agreement
pursuant to Section 107(e) of CERCLA, 42 USC Section 9607(e), and California
Health and Safety Code Section 25364, to insure, protect, hold harmless, and
indemnify Lessor for any claim pursuant to the Hazardous Substance Laws or
the common law.
(c) Lessee does not, and will not, authorize any third party to use, generate,
manufacture, maintain, permit, store, or dispose of any Hazardous Substances in
violation of Applicable Laws on, under, about or within the Premises.
(d) Upon expiration or earlier termination of this Agreement, Lessee shall deliver
possession of the Premises in compliance with Hazardous Substance Laws
subject to the last sentence of Section 23(a) above.
(e) If during the Term of this Agreement, Lessee becomes aware of (i) any actual or
threatened release of any Hazardous Substances on, in, under, from, or about
the Premises in violation of Hazardous Substance Laws; or (ii) any inquiry,
investigation, proceeding, or claim by any government agency or other person
regarding the presence of any Hazardous Substances in violation of Hazardous
Substance Laws on, in, under, from or about the Premises, Lessee shall give
Lessor written notice of the release or inquiry within five (5) calendar days after
Lessee becomes aware or first has reason to believe there has been a release or
inquiry and shall simultaneously furnish to Lessor copies of any claims, notices of
violation, reports, warning or other writings received by Lessee that concern the
release or inquiry.
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(f) If the presence of any Hazardous Substances brought onto the Premises by
Lessee or Lessee's employees, agents, sublessees, licensees, concessionaires,
contractors, or invitees ( "Lessee Parties "), or generated by same during the Term
of this Agreement, results in contamination of the Premises or adjacent
properties or the Newport Harbor in violation of Hazardous Substance Laws,
Lessee shall promptly take all necessary actions, at Lessee's sole expense, to
remove or remediate such Hazardous Substances in full compliance with
Applicable Laws. Lessee shall provide notice to Lessor prior to performing any
removal or remedial action. Lessee shall not propose nor agree to any covenant
of use restriction as part of any removal or remediation required as a result of this
provision without Lessor's written consent. Lessee shall pay, in the manner
provided in Section O any costs Lessor incurs in performing Lessee's obligation
to clean -up contamination resulting from Lessee's operations or use of the
Premises. Any amounts not paid when due shall be subject to late charges and
delinquency rates as provided in Section 45.
(i) Should any clean -up of Hazardous Substances for which Lessee is
responsible not be completed prior to the expiration or sooner termination
of the Agreement, including any extensions thereof, then Lessee shall
transfer the amounts required to complete clean -up into an escrow
account, together with Lessor - approved instructions for the disbursement
of such amount in payment of the costs of any remaining clean -up as it is
completed, and (ii) if the nature of the contamination or clean -up required
of Lessee is of such a nature as to make the Premises untenable or
unleaseable, then Lessee shall be liable to Lessor as a holdover lessee
until the clean -up has been sufficiently completed to make the Premises
suitable for lease to third parties. The estimated cost of the clean -up shall
require approval of the Lessor.
(ii) If Lessor determines, in its reasonable discretion, that Lessee does not
have insurance or other financial resources sufficient to enable Lessee to
fulfill its obligations under this provision, whether or not accrued,
liquidated, conditional, or contingent, then Lessee shall, at the request of
Lessor, procure and thereafter maintain in full force and effect such
environmental impairment liability and /or pollution liability insurance
policies and endorsements, or shall otherwise provide such collateral or
security reasonably acceptable to Lessor as is appropriate to assure that
Lessee will be able to perform its duties and obligations hereunder.
(g) Lessee's obligations in this Section 24 shall survive the expiration or earlier
termination of this Agreement.
25. Quiet Possession
(a) So long as no default by Lessee has occurred and is continuing uncured under
this Agreement, and subject to the Tidelands Grant or any amendment to that
grant, Lessee shall peaceably and quietly use and enjoy the Premises for the
Term, without hindrance or interruption by Lessor.
(b) Lessor shall in no event be liable in damages or otherwise, nor shall Lessee be
released from any obligations hereunder, because of the interruption or
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termination of any service provided by Lessor (such as water or sewer service),
or a termination, interruption or disturbance of any service attributable to any act
or neglect (other than gross negligence or willful misconduct) of Lessor or its
servants, agents, employees, licensees, business invitees, or any person
claiming by, through or under Lessee.
26. Compliance with Applicable Laws
Lessee agrees that, in all activities on or in connection with the Premises, and in all uses
thereof, it will comply with and conform, at its sole cost, to all Applicable Laws. Lessee
is solely responsible for compliance with Applicable Laws. . If City enacts a new tax or
imposes a new fee, which exceeds the cost of providing the service, against the
Premises, the Lessee has the right to terminate this Agreement upon thirty (30) calendar
days notice to Lessor.
27. Not Agent of Lessor
Neither anything in this Agreement nor any acts of Lessee shall authorize Lessee or any
of its employees, agents or contractors to act as agent, contractor, joint venturer or
employee of Lessor for any purpose. The parties' relationship under this Agreement is
exclusively that of a lessor and lessee.
28. No Third Party Beneficiaries
Lessor (both as a lessor and as the City of Newport Beach) and Lessee do not intend,
by any provision of this Agreement, to create in any third party, any benefit or right owed
by one party, under the terms and conditions of this Agreement, to the other party.
29. Limitation of Leasehold / Easements
This Agreement and the rights and privileges granted Lessee in and to the Premises and
Improvements are subject to all covenants, conditions, restrictions, and exceptions of
record, including those which are set out in the Tidelands Grant by the State of California
to Lessor. Nothing contained in this Agreement or in any related document shall be
construed to imply the conveyance to Lessee of rights in the Premises or Improvements
that exceed those owned by Lessor. This Agreement and the rights and privileges
granted Lessee in and to the Premises shall be further subject to future easements and
rights -of -way for access, gas, electricity, water, sewer, drainage, telephone, telegraph,
television transmission, and such other utilities as Lessor may determine from time to
time to be in the best interests of the development of the lands within Lessor's
jurisdiction, provided, however, that no easements, rights -of -way, or the installation of
such facilities by Lessor, shall materially interfere with Lessee's business. Easements
and rights -of -ways allowed by this section shall be limited in purpose to providing the
utilities contemplated in this section. Nothing in this section gives a utility a right to
attach any item to the Improvements. Lessee is not entitled to any monetary payment or
other remuneration for any such future easements and rights -of -way.
30. Notices
All notices and other communications required or permitted to be given under this
Agreement, including any notice of change of address, shall be in writing and given by
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personal delivery, or deposited with the United States Postal Service, certified and
postage prepaid, or by national overnight mail service addressed to the parties intended
to be notified. Notice shall be deemed given as of the date of personal delivery, or if
mailed, two (2) calendar days following the date of deposit with the United States Postal
Service. Notice shall be given as follows:
To Lessor: City of Newport Beach
Attn: City Manager
PO Box 1768
3300 Newport Boulevard
Newport Beach, CA 92658
949 - 644 -3153
With Copy To: City Attorney (at same address)
To Lessee:
31. Entire Agreement /Amendments
(a) The terms and conditions of this Agreement, all exhibits attached hereto are
incorporated by reference into this Agreement, and all documents expressly
incorporated by reference, represent the entire Agreement of the parties with
respect to the subject matter of this Agreement.
(b) This Agreement may be executed in counterparts, including electronic
counterparts, each of which, after all the parties have signed this Agreement,
shall be deemed to be an original, and such counterparts shall constitute one
Agreement binding on the parties.
(c) This written Agreement shall supersede any and all prior agreements, oral or
written, regarding the subject matter. Notwithstanding the foregoing sentence,
with respect to City Pier Permit No. , nothing herein is a release
of any violation of Lessee's duties or obligations, if any, with respect to City Pier
Permit No. , whether known or unknown at this time or upon
the effective date of this Agreement. Lessor acknowledges it is not aware of any
known defaults by Lessee.
(d) Except as permitted by Section 33 below, no other agreement, promise or
statement, written or oral, relating to the subject matter of this Agreement, shall
be valid or binding, except by way of a written amendment to this Agreement.
(e) The terms and conditions of this Agreement shall not be altered or modified
except by a written amendment to this Agreement signed by Lessee and Lessor.
(f) If any conflicts arise between the terms and conditions of this Agreement, and
the terms and conditions of the attached exhibits or the documents expressly
incorporated by reference, the terms and conditions of this Agreement shall
control.
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(g) Any obligation of the parties relating to monies owed, as well as those provisions
relating to limitations on liability and actions, shall survive termination or
expiration of this Agreement.
32. Waivers
The waiver by either party of any breach, default or violation of any term, covenant or
condition of this Agreement, or of any Applicable Law, shall not be deemed a waiver of
any other term, covenant, condition, or Applicable Law, or of any subsequent breach or
violation of the same or other term, covenant, condition, or Applicable Law. The
subsequent acceptance by either party of any fee, performance, or other consideration
which may become due or owing under this Agreement, shall not be deemed to be a
waiver of any preceding breach or violation by the other party of any term, condition,
covenant of this Agreement or any Applicable Law.
33. Lessor's Authorized Representative
Unless otherwise specified in this Agreement or unless Applicable Law requires action of
the City Council or some other person or body of Lessor (in its capacity as the City of
Newport Beach), Lessor shall maintain the authority to implement this Agreement on its
behalf through the City Manager of the City of Newport Beach (or his or her designee).
The City Manager (or his or her designee) shall have authority (but not the obligation) to
issue interpretations, waive provisions (including, without limitation, imposition of late
charges and delinquency rates, Lessee's payment of costs and times of performance),
and /or enter into amendments of this Agreement on behalf of the Lessor.
34. City Business License
Lessee shall obtain and maintain during the duration of this Agreement a City business
license as required by the Newport Beach Municipal Code.
35. Governing Law & Non - Binding Arbitration
(a) Prior to instituting any legal action in a court, in the event the Lessor and Lessee
shall be unable to agree as to any matter provided for in this Agreement such
dispute shall be submitted to three (3) disinterested arbitrators (unless the parties
can agree on one (1) arbitrator). Such arbitration shall be conducted upon
request of either the Lessor or the Lessee, before three (3) arbitrators (unless the
Lessor or the Lessee agree to one (1) arbitrator) designated by the American
Arbitration Association and in accordance with the rules of such Association.
The decision(s) of the arbitrator(s) designated and acting under this Agreement
shall be nonbinding and the arbitrator(s) have no power to depart from or change
any of the provisions thereof. The expense of arbitration proceedings conducted
hereunder shall be borne equally by the parties.
(b) This Agreement shall be construed in accordance with the laws of the State of
California. Any action brought relating to this Agreement shall be adjudicated in
a court of competent jurisdiction in the County of Orange. Lessee is advised that
Public Resources Code Section 6308 may require that the State of California be
joined to any action against the City involving title to or boundaries of the
Tidelands.
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(c) The prevailing party in any non - binding arbitration or legal action authorized
under this section shall not be entitled to attorneys' fees.
36. Interpretation
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of the Agreement or any other rule of construction which might otherwise
apply.
37. Time is of the Essence
Time is of the essence to the performance of each and every act required to be
performed by this Agreement.
38. California Labor Laws
It shall be the obligation of Lessee or any subcontractor under Lessee to comply with all
State of California labor laws, rules and regulations and the parties agree that the Lessor
shall not be liable for any violation thereof.
39. Joint and Several Liability
The term "party" in this section shall mean either Lessor or Lessee, and if more than one
(1) person or entity comprises either Lessor or Lessee, then the obligations imposed
upon such "party" shall be both joint and several.
40. Memorandum of Lease Aareement
A Memorandum of Lease Agreement, in a form and content similar to that contained in
Exhibit "E" shall be recorded by the parties promptly upon execution of this Agreement.
Upon execution by both parties, the Memorandum of Lease Agreement shall be
recorded against the Premises in the office of the Orange County Clerk- Recorder, as
required by Government Code Section 37393.
41. No Pre - commitment / Retention of Discretion / Assumption of Risk and Waiver
(a) By its execution of this Agreement, Lessor is not committing itself or agreeing to
undertake any activity requiring the subsequent exercise of discretion by the City
of Newport Beach, or any department thereof, including but not limited to the
approval of any CEQA documents, the approval of any development proposal or
land use regulation governing the Premises, or any other act or approval.
(b) Lessee understands and agrees that Lessor in its capacity as the City of Newport
Beach reserves the right to exercise its discretion as to all matters which it is, by
law, entitled or required to exercise its discretion, including, but not limited to, the
consideration of CEQA documents the consideration of a final development, the
consideration of any and all plans, permits, licenses or regulatory approvals, or
any other acts or activities requiring the subsequent independent exercise of
discretion by the City of Newport Beach or any agency or department thereof.
Lessee understands and agrees that the City of Newport Beach may, in its sole
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and absolute discretion, certify or not certify a CEQA document and approve,
approve with modifications, or not approve or may consider other alternatives,
including those presented in the CEQA documents.
(c) Lessee acknowledges and agrees that the City of Newport Beach or other
governmental agencies (including without limitation the Coastal Commission)
may, at their sole and absolute discretion, approve any and all plans, permits,
licenses or regulatory approvals, only upon the imposition and performance of
additional conditions or mitigation measures.
(d) Nothing in this Agreement shall obligate the Lessor in its capacity as the City of
Newport Beach to exercise its discretion in any particular manner, and
notwithstanding any provision of this Agreement to the contrary any exercise of
discretion required by law or permitted by this Agreement shall not be deemed to
constitute a breach of Lessor's duties under this Agreement.
(e) Lessee accepts and assumes the risk that the City of Newport Beach or other
governmental agencies (including without limitation the Coastal Commission) will
not approve or certify the CEQA documents or any and all plans, permits,
licenses or regulatory approvals sought, that the City of Newport Beach may
consider or approve other alternatives to the CEQA documents, any and all
plans, permits, licenses or regulatory approvals, or CEQA documents might be
approved or certified subject to modifications or the performance of certain
additional conditions or mitigation measures imposed by the City of Newport
Beach or other governmental agencies (including without limitation the Coastal
Commission) in their sole and absolute discretion, or that third parties may file
litigation against or otherwise delay any and all plans, permits, licenses or
regulatory approvals sought, or CEQA documents. Lessee agrees it has no
claim, cause of action, or right to damages, compensation or reimbursement from
Lessor or the City of Newport Beach if (i) CEQA documents or any and all plans,
permits, licenses or regulatory approvals sought are not approved by the City of
Newport Beach or other governmental agencies (including without limitation the
Coastal Commission) for any reason, (ii) other alternatives to the CEQA
documents or any and all plans, permits, licenses or regulatory approvals sought
are approved, and (iii) CEQA documents are approved or certified subject to
modification or the performance of certain additional conditions or mitigation
measures, or (iv) third parties file litigation against or otherwise delay the CEQA
documents.
42. No Damages
Lessee acknowledges that Lessor would not enter into this Agreement if it were to be
liable for damages (including, but not limited to, actual damages, economic damages,
consequential damages, lost profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use) under, or relating to, this Agreement or any of
the matters referred to in this Agreement, including, without limitation, any and all plans,
permits, licenses or regulatory approvals, CEQA documents, and Transfers.
Accordingly, Lessee covenants and agrees on behalf of itself and its successors and
assigns, not to sue Lessor (either in its capacity as lessor in this Agreement or in its
capacity as the City of Newport Beach) for damages (including, but not limited to, actual
damages, economic damages, consequential damages, lost profits, loss of rents or other
-24- 39
revenues, loss of business opportunity, loss of goodwill or loss of use) or monetary relief
for any breach of this Agreement by Lessor or for any dispute, controversy, or issue
between Lessor and Lessee arising out of or connected with this Agreement or any of
the matters referred to in this Agreement, including, without limitation, any and all plans,
permits, licenses or regulatory approvals, CEQA documents, Transfers or any future
amendments or enactments thereto, the parties agreeing that declaratory relief,
injunctive relief, mandate and specific performance shall be Lessee's sole and exclusive
judicial remedies.
43. Appraisals
Except as otherwise provided in the applicable resolution for the Fair Market Adjustment
of Rent, this Section governs the process for all appraisals required or permitted in this
Agreement. Any time an appraisal is required or permitted by this Agreement, Lessor
and Lessee shall each select an independent appraiser with qualifications of MAI to
appraise Tidelands properties. Each party shall pay the costs of their selected
appraiser. If the two (2) appraisals return with a fair market value that is within five
percent (5 %) of each other the two (2) appraisal fair market values shall be averaged to
produce the fair market value of the affected Premises. For clarity, if one (1) appraiser
concludes thirteen percent (13 %) and one (1) appraiser concludes fifteen percent (15 %)
the difference in their conclusions is thirteen and 333/1,OOOths percent (13.333 %) and
therefore a third appraisal would be needed. If the two (2) appraisers should fail to
agree on the fair market value, and the difference between the two appraisals exceeds
five percent (5 %), then the two (2) appraisers thus appointed shall mutually appoint a
third MAI designated appraiser, and in case of their failure to agree on a third appraiser
within thirty (30) calendar days after their individual determination of the fair market
value, either party may apply to the Presiding Judge of the Superior Court for Orange
County, requesting said Judge to appoint the third MAI designated appraiser. The costs
of the third appraiser, if any, shall be split equally between the Lessor and the Lessee.
The third appraiser so appointed shall meet and confer with the two (2) other appraisers
and then conduct its own analysis to determine the fair market value of the affected
Premises within sixty (60) calendar days of their appointment and the average of the fair
market value per square foot as set forth in the appraisals of the two (2) closest
appraisers shall be used as the fair market value. All MAI appraisers appointed or
selected pursuant to this subsection shall have at least ten (10) years experience
appraising Tidelands in the Southern California area and shall be free of conflicts (i.e.,
no appraisers shall rent a boat slip or office space from Lessor or lessees, etc.).
44. Reserved
45. Late Charges and Delinquency Rates
A ten percent (10 %) late charge shall be added to all payments due but not received by
Lessor with ten (10) calendar days following the due date, unless another due date is
specified in this Agreement. In addition, all unpaid amounts shall accrue at a
delinquency rate of one and a half percent (1'/z %) per month or any portion of a month
until paid in full. Lessor and Lessee hereby agree that such late charges and
delinquency rates represent a fair and reasonable estimate of the costs Lessor will incur
by Lessee's late payment, including, without limitation, lost opportunities and the cost of
servicing the delinquent account. Lessee agrees that such late charges and
delinquency rates are Additional Rent and are not interest. Acceptance of such late
-25- 40
charges and delinquency rates (and /or any portion of the overdue payment) by Lessor
does not constitute a waiver of Lessee's default with respect to such overdue payment,
or prevent Lessor from exercising any of the other rights and remedies granted in this
Agreement.
46. Reserved
47. Government Claims Act
Lessee and Lessor agree that in addition to any claims filing or notice requirements in
this Agreement, Lessee shall file any claim that Lessee may have against Lessor in strict
conformance with the Government Claims Act (Government Code sections 900 et seq.).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate on the date and year first written herein.
LESSOR LESSEE
City of Newport Beach
A Municipal Corporation a
Mayor
By:
Name:
ATTEST:
Leilani Brown
City Clerk
APPROVED AS TO FORM:
Aaron C. Harp
City Attorney
-26- 41
EXHIBIT "A"
Accounting Period means each period as follows: Commencement Date (or any anniversary
thereof) to to to to
and to [day immediately prior to the
anniversary of the Commencement Date]. [Note: Complete once Commencement Date is
known. There are 4 three -month Accounting Periods in each Lease Term Year.]
Additional Rent is defined in Section 4.
Adjustment Date means the fifth anniversary of the Commencement Date ( _,
20), and every subsequent fifth anniversary thereafter ( 20_,
20_) [including, any fifth anniversary during a Renewal Term].
Agreement is defined in the Preamble.
Applicable Law(s) mean and include, but are not limited to, those prescribed by Title 17 of the
Newport Beach Municipal Code; any ordinances of the City of Newport Beach, including the
Building Code thereof; the City Charter of Newport Beach; any regulations, policies and general
rules of the City of Newport Beach; the Tidelands Grant; Hazardous Substances Laws; CEQA;
and any other Federal, State or local statute, law, ordinance, resolution, code, rule, regulation,
order or decree as any of the same now exist or may hereafter be adopted or amended.
Boat Slip Renters is defined in Section 1(a)(i).
COP means a Coastal Development Permit.
CEQA means the California Environmental Quality Act, codified at California Public Resources
Code Sections 21000 et seq. as may be amended from time -to -time.
Claim(s) is defined in Section 22.
Commencement Date is defined in Section 3(a).
Condemnation means a permanent taking of the Premises through (i) the exercise of any
government power, by any public or quasi - public authority or by any other party having the right
of eminent domain (Condemnor) or (ii) a voluntary sale or transfer by Lessor to any Condemnor,
either under threat of exercise of eminent domain by a Condemnor or while legal proceedings
for condemnation are pending.
Fiscal Year means the period of July 1 through June 30 of each year of the term.
Gross Revenue for Slip Rentals means all receipts of every kind and nature, whether for cash,
credit or barter, received /due for the rental or use of a slip, dock, or pier on the Premises.
Without limiting the breadth of the prior sentence, Gross Revenue for Slip Rentals shall include,
without limitation, receipts of every kind and nature derived from any promotion, package deal,
service, or other item that is associated in any way with the rental or use of a slip, dock, or pier
on the Premises, excluding pass- through of direct third -party charges (e.g., electricity, cable TV,
etc.) without markup by Lessee. For purposes of determining Gross Revenue for Slip Rentals
EXHIBIT "A"
-1- 42
any fixed, annual, monthly and /or recurring charge that a person or entity is required to pay shall
be counted as part of the Gross Revenue for Slip Rentals. Gross Revenue for Slip Rentals shall
not be offset or reduced for any reason, including, but not limited to, the payment of taxes, fees,
repairs, maintenance, construction, or inability or failure to collect any cash, credit, or barter due
for the use of a slip, dock, or pier on the Premises.
Hazardous Substance means: (i) any substance, product, waste or other material of any
nature whatsoever which is or becomes listed, regulated, or addressed pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. (CERLCA); the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq.; the Resource Conversation and Recovery Act, 42 U.S.C. Section 6901 et seq.
"RCRA "); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Water
Act, 33 U.S.C. Section 1251 et seq.; the California Hazardous Waste Control Act, Health and
Safety Code Section 25100 et seq.; the California Hazardous Substance Account Act, Health
and Safety Code Sections 25330 et seq.; the California Safe Drinking Water and Toxic
Enforcement Act, Health and Safety Code Sections 25249.5 et seq.; California Health and
Safety Code Sections 25280 et seq. (Underground Storage of Hazardous Substances); the
California Hazardous Waste Management Act, Health and Safety Code Sections 25170.1
et seq.; California Health and Safety Code Sections 25501 et seq. (Hazardous Materials
Response Plans and Inventory); or the Porter - Cologne Water Quality Control Act, Water Code
Sections 13000 et seq., all as they, from time -to -time may be amended or re- codified, (the
above -cited statutes are here collectively referred to as lithe Hazardous Substances Laws ") or
any other Federal, State or local statute, law, ordinance, resolution, code, rule, regulation, order
or decree regulating, relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in
effect; (ii) any substance, product, waste or other material of any nature whatsoever which may
give rise to liability under any of the above statutes or under any statutory or common law
theory, including but not limited to negligence, trespass, intentional tort, nuisance, waste or strict
liability or under any reported decisions of a state or federal court; (iii) petroleum or crude oil;
and (iv) asbestos.
Improvements are owned by Lessee and mean those items described on Exhibit "B" as they
may be modified, altered, restored, or rebuilt pursuant to this Agreement.
Leasehold Estate means Lessee's interest in the Premises created by this Agreement.
Leasehold Mortgage means a Transfer or security instrument by which the Leasehold Estate is
used to secure a debt or other obligation arising from or related to Lessee's use or operation of
the Premises.
Leasehold Mortgagee means a holder or holders of the Leasehold Mortgage.
Lease Term Year means each twelve (12) month period beginning on the Commencement
Date (or anniversary thereof) and ending on the day prior to the next anniversary of the
Commencement Date.
Lessee is defined in the Preamble.
Lessor is defined in the Preamble.
Marina Index is comprised of the marinas listed in the resolution incorporated by Section 4.
EXHIBIT "A"
-2- 43
Market Adjustment Date means March 1, 2023 and every tenth (10th) anniversary year
thereafter.
Option Notice is defined in Section 3(b)(i).
Other Real Property is defined in Section 16(b).
Premises means those Tidelands which is an independent site with no land access consisting
of approximately [ square feet water area located generally at
in the City of Newport Beach, California, more particularly described in Exhibit H and depicted
on the map set forth in Exhibit I, excluding any private water and Improvements.
Renewal Term(s) is defined in Section 3(b).
Rent is defined in Section 4.
Target Indexed Rate is defined in the resolution incorporated by Section 4.
Term is defined in Section 3(a).
Tidelands means certain tidelands and submerged land (whether filled or unfilled), located in
the City of Newport Beach, County of Orange, State of California granted to the City of Newport
Beach, as trustee, by the State of California pursuant to the Tidelands Grant.
Tidelands Grant means uncodified legislation related to the State of California's grant of certain
rights in the Tidelands to the City of Newport Beach, including, without limitation, the Beacon
Bay Bill (Chapter 74 of the Statutes of 1978, as amended [citations omitted]).
Transfer(s) means any attempt to sell, convey, assign, transfer, mortgage, pledge, grant,
hypothecate or encumber this Agreement or any interest in this Agreement, or the Premises or
any portion of the Premises, and any attempt to sublet (which shall also include management
and /or operating agreements covering the Premises), license or grant any concession to the
Premises, in whole or in part, or allow any person other than Lessee's employees, members,
agents, servants and invitees to occupy or use all or any portion of the Premises.
Work is defined in Section 38.
EXHIBIT "A"
-3- 44
EXHIBIT "B"
IMPROVEMENTS
EXHIBIT "B"
-1- 45
EXHIBIT "C"
OTHER REAL PROPERTY
EXHIBIT "C
-1- 46
EXHIBIT "Y
INSURANCE
Without limiting Lessee's indemnification of Lessor, Lessee will obtain, provide and maintain at
its own expense during the Term of this Agreement, a policy or policies of insurance of the type,
amounts and form acceptable to Lessor. The policy or policies shall provide, at a minimum,
those items described below.
(a) Coverage Requirements
(i) Workers' compensation insurance providing statutory benefits and
Employer's Liability Insurance in an amount not less than One Million
Dollars ($1,000,000) each accident, each employee and policy limit.
Coverage shall include USL &H and Maritime Coverages as appropriate.
In addition, Lessee shall require each subtenant or subcontractor to
similarly maintain workers compensation insurance and employer's
liability insurance, including USL &H and Maritime Coverages as
appropriate, in accordance with the laws of the State of California for all of
the subtenant's or subcontractor's employees. The insurer shall agree to
waive all rights of subrogation against Lessor, its officers, agents,
employees and volunteers for losses arising from work performed by
Lessee for Lessor, by endorsement to the policy.
(ii) Commercial general liability insurance in an amount not less than Two
Million Dollars ($2,000,000) per occurrence and Four Million Dollars
($4,000,000) General Aggregate for bodily injury, personal injury, and
property damage. Coverage shall be at least as broad as that provided by
Insurance Services Office form CG 00 01 and may be arranged through
any combination of primary and excess insurance as required to achieve
the limits specified provided that any excess liability policy does not
restrict coverage provided in the primary policy. Other policy forms may
be acceptable if more appropriate to the exposures, such as Marina
Operator's Liability insurance. None of the policies required herein shall
be in compliance with these requirements if they include any limiting
endorsement that has not been first submitted to City and approved in
writing.
(iii) Contractor's pollution liability insurance for contractors or subcontractors
performing construction work written on a form acceptable to City
providing coverage for liability arising out of sudden, accidental and
gradual pollution. The policy limit shall be no less than One Million
Dollars ($1,000,000) per claim and in the aggregate for contractors and
between Two Million Dollars ($2,000,000) and Five Million Dollars
($5,000,000) for Lessee, as determined by Lessor depending on services
offered by Lessee on the Premises (e.g., fuel dock, boat repair, etc.).
When this insurance is required, all activities comprising the work shall be
specifically scheduled on the policy as "covered operations." The policy
shall provide coverage for the hauling of waste from the Premises to the
EXHIBIT "Y
-1- 47
(b)
final disposal location, including non -owned disposal sites.
Products /completed operations coverage shall extend a minimum of three
(3) years after completion of the work.
(iv) Pollution legal liability applicable to bodily injury; property damage,
including loss of use of damaged property or of property that has not
been physically injured or destroyed; cleanup costs; and defense,
including costs and expenses incurred in the investigation, defense, or
settlement of claims; all in connection with any loss arising from the
insured facility. Coverage shall be maintained in an amount of at least
One Million Dollars ($1,000,000) per loss, with an annual aggregate of at
least One Million Dollars ($1,000,000).
Endorsements: Policies shall contain or be endorsed to contain the following
provisions:
(i) Lessor, its elected or appointed officers, officials, employees, agents and
volunteers are to be covered as an additional insured under all general
and pollution liability policies with respect to liability arising out of lessee's
activities related to this Agreement and with respect to use or occupancy
of the Premises.
(ii) The insurer waives all rights related to workers' compensation
subrogation against Lessor, its elected or appointed officers, officials,
employees, agents and volunteers.
(iii) The insurance required by this agreement shall not be suspended,
voided, canceled, or reduced in coverage or in limits.
(c) Additional Requirements
(i) All insurance shall be written on an occurrence -made form,
Pollution Liability policy which
requiring the Lessee to provide
for a minimum of three (3)
agreement; and
is on a claims -made form of
proof of coverage (extendin g
years following termination
except the
insurance
reporting)
of lease
(ii) In the event Lessor determines that (i) the Lessee's activities in the
Premises creates an increased or decreased risk of loss to the Lessor,
(ii) greater insurance coverage is required due to the passage of time, or
(iii) changes in the industry require different coverages be obtained,
Lessee agrees that the minimum limits of any insurance policy required to
be obtained by Lessee may be changed accordingly upon receipt of
written notice from Lessor; provided that Lessee shall have the right to
appeal a determination of increased coverage to the City Council within
fourteen (14) calendar days of receipt of notice from the Risk Manager in
the manner provided in Municipal Code Section 17.65.010 et seq. (or any
amended or successor Code section or ordinance) If Lessee fails to
timely appeal a decision, it shall be deemed final. With respect to
changes in insurance requirements that are available from Lessee's then -
existing insurance carrier, Lessee shall deposit certificates evidencing
EXHIBIT "Y
-2-
IN
acceptable insurance policies with Lessor incorporating such changes
within thirty (30) calendar days of receipt of such notice. With respect to
changes in insurance requirements that are not available from Lessee's
then- existing insurance carrier, Lessee shall deposit certificates
evidencing acceptable insurance policies with Lessor, incorporating such
changes, within ninety (90) calendar days of receipt of such notice.
All insurance policies shall be issued by an insurance company currently
authorized by the California 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 Lessor.
(iv) All licensees, sub - lessees (not including slip renters) and concessionaires
shall be subject to the insurance requirements contained herein unless
written approval is granted by the Lessor.
(v) Lessee shall provide certificates of insurance, with original endorsements
as required above, to Lessor as evidence of the insurance coverage
required herein. Insurance certificates must be approved by Lessor prior
to commencement of performance or issuance of any permit. Current
certification of insurance shall be kept on file with Lessor at all times
during the Term of this Agreement.
(vi) All required insurance shall be in force on the Commencement Date, and
shall be maintained continuously in force throughout the term of this
Agreement. In addition, the cost of all required insurance shall be borne
by Lessee.
(vii) If Lessee fails or refuses to maintain insurance as
Agreement, or fails to provide proof of insurance, Lesso r
declare this Agreement in default without further notice
Lessor shall be entitled to exercise all available remedies.
required in this
has the right to
to Lessee, and
EXHIBIT "Y
-3- 49
EXHIBIT "E"
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
Office of the City Clerk
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92658
[Exempt from Recordation Fee -Govt. Code Sec. 6103]
MEMORANDUM OF LEASE AGREEMENT
HWITH OPTIONS FOR RENEWAL)1
This Memorandum of Lease Agreement [(With Options for Renewal)] ( "Memorandum ") is dated
20 , and is made between City of Newport Beach, a California municipal
corporation and charter city ( "Lessor" or "City ") and
( "Lessee "), concerning the Premises described in Exhibits A" and "B," attached hereto and by
this reference made a part hereof.
For good and adequate consideration, Lessor leases the Premises to Lessee, and Lessee hires
them from Lessor, for the term and on the provisions contained in the Agreement dated
, 20_, including without limitation provisions prohibiting assignment, subleasing,
and encumbering said leasehold without the express written consent of Lessor in each instance,
all as more specifically set forth in said Agreement, which said Agreement is incorporated in this
Memorandum by this reference.
The term is (_) years, beginning 20_, and ending
20. [If needed, insert recitation of Options and Renewal Terms(s).]
This Memorandum is not a complete summary of the Agreement. Provisions in this
Memorandum shall not be used in interpreting the Agreement's provisions. In the event of
conflict between this Memorandum and other parts of the Agreement, the other parts shall
control. Execution hereof constitutes execution of the Agreement itself.
[Signatures on the next page]
EXHIBIT "E"
-1- 50
LESSOR
LESSEE
City of Newport Beach _
A Municipal Corporation a
Mayor
Name:
ATTEST:
Leilani Brown
City Clerk
APPROVED AS TO FORM:
Aaron C. Harp
City Attorney
[NOTE: Attach Exhibits A and B from Agreement as Exhibits to this Memorandum behind
attached Notary form]
EXHIBIT "E"
-2- 51
CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
ss:
COUNTY OF ORANGE
On this day of , 2G11, before me, the undersigned
notary public, personally appeared
NAME($) OF SIGNER($)
proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) islare subscribed to the within
instrument, and acknowledged to me that hedshelthoy executed
the same in hislherMeir authorized capacity(ies), and that by
histherttheir signature(s) on the instrument the person(s), or the
entity(ies) upon behalf of which the persnn(s) acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the
State of California that the foregoing paragraph I, true and
correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
OPTIONAL SECTION
- -OPTIONAL SECTION- -
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary
to fill in the data below, doing so may
prove Invaluable to persons relying on the
document.
❑ INDIVIDUAL
17 CORPORATE OFFICER(S)
TITLE(S)
❑ PARTNER(S)
• LIMITED
• GENERAL
❑ ATTORNEY -IN -FACT
❑ TRUSTEE(S)
❑ GUARDIANICONSERVATOR
171 OTHER:
SIGNER IS REPRESENTING:
NAME OF PER$ON(S) OR ENTITY(IES)
THIS CERTIFICATE MUST BE ATTACHED TO THE TITLE OR TYPE OF DOCUMENT:
DOCUMENT DESCRIBED AT RIGHT:
Though the data requested here is not required by
law, if could prevent fraudulent reattachment of this
form.
-1-
NUMBER OF PAGES:
DATE OF DOCUMENT:
OTHER SIGNER(S) THAN NAMED ABOVE:
52
EXHIBIT "F"
DESCRIPTION OF PREMISES
EXHIBIT "F"
-1- 53
EXHIBIT "G"
DEPICTION OF PREMISES
EXHIBIT "G°
-1- 54
ATTACHMENT
Commercial Marina Permit
(1) Commercial Marina Permittee: This Permit is issued on to
( "Permittee ") to operate a commercial marina located upon City of
Newport Beach ( "City ") tidelands, as more particularly described in Attachment 1 and
depicted in Attachment 2 ( "Premises "). Both Attachment 1 and Attachment 2 are
incorporated by reference into this Permit. By acceptance of this Permit, the Permittee
agrees to be bound by the terms contained in this Permit.
(2) Term: This Permit shall be valid for a period of twelve (12) calendar months
beginning on March 1, 20 and expiring on February _, 20_, unless terminated
earlier as provided herein.
(3) Rent: Rent shall be calculated pursuant to Resolution No. 2012-_, or any
successor /amended resolution. Resolution No. 2012 - and any successor /amended
resolution are automatically incorporated by reference into this Permit, without any
further action by the parties, when adopted by the Newport Beach City Council.
(A) Periodic Payment of Rent: One - twelfth (1/12) of annual rent for a
particular year shall be payable on the first (1st) day of each month during
the term.
(B) Place for Payment of Rent: All payments of rent shall be made in lawful
money of the United States of America and shall be paid to City in person
or by United States' mail, or overnight mail service, at the Cashier's Office
located at 3300 Newport Boulevard, Newport Beach, CA 92658, or to such
other address as City may from time to time designate in writing to the
Permittee. If requested by City, the Permittee shall make payments
electronically (at www.newportbeachca.gov) or by wire transfer (at the
Permittee's cost). The Permittee assumes all risk of loss and
responsibility for late charges and delinquency rates if payments are not
timely received by the City regardless of the method of transmittal.
(C) Late Charges: A ten percent (10 %) late charge, or the maximum rate
allowable under State law, shall be added to all payments due but not
received by City with fifteen (15) calendar days following the due date. In
addition, all unpaid amounts shall accrue at a delinquency rate of one and
a half percent (1'/2 %) per month or any portion of a month until paid in full.
(4) Utilities and Taxes: The Permittee is solely responsible for obtaining all utilities
and paying all taxes, fees and assessments for the Premises or improvements located
thereon.
(5) Possessory Interest Tax Notice: The City hereby gives notice to the Permittee,
pursuant to Revenue and Tax Code Section 107.6 that this Permit may create a
possessory interest that is the subject of property taxes levied on such interest, the
payment of which taxes shall be the sole obligation of the Permittee. The Permittee
55
shall advise in writing any sublessee, licensee, concessionaire or third party using the
Premises of the requirements of Section 107.6.
(6) Compliance With Applicable Laws: The Permittee is required at its sole
expense to comply with all applicable City, County, State and Federal laws and
regulations.
(7) Maintenance: The Permittee assumes full responsibility for operation and
maintenance and repair of the Premises and associated improvements throughout the
term of this Permit at its sole cost, and without expense to the City.
(8) Transfer /Assignment: This Permit may not be transferred or assigned by the
Permittee without the City's prior written consent. Transfer /assignment without the
City's prior written consent is null and void.
(9) Termination: This Permit may be terminated for cause (e.g., failure to abide by
the terms of this Permit, etc.) by the City with no less than seven (7) calendar days prior
written notice to the Permittee. In the event of termination under this section, the City
shall owe no compensation to the Permittee and the Permittee shall remove all
improvements from the Premises within ninety (90) calendar days. The Permittee shall
continue to pay rent to the City during the period in which the improvements are
removed. Alternatively, the Permittee, with the City's prior written consent, may
quitclaim all fixtures, equipment, and improvements on the Premises to the City.
Notwithstanding any other provision of this Permit as permitted by California Public
Resources Code Section 6312, or any successor statute, the parties agree that upon
expiration or earlier termination of this Permit the City shall have no liability or obligation
to pay compensation for any improvements made to the Premises.
(10) Inspection: Upon seventy -two (72) hours notice, the City may enter the
Premises, and all improvements thereon, including a right of reasonable access to the
Premises across the Permittee's owned or occupied lands adjacent to the Premises, to
inspect the Premises for compliance with the terms of this Permit.
(11) Indemnification: To the fullest extent permitted by law, Permittee shall
indemnify, defend (with counsel selected by the City) and hold harmless the City, its
elected officials, officers, employees, agents, attorneys, volunteers and representatives
from and against any and all claims, demands, obligations, damages, actions, causes of
action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses of every
kind and nature whatsoever (individually, a "Claim" or collectively, "Claims "), which may
arise from or in any manner relate (directly or indirectly) to this Permit including, but not
limited to, Permittee's occupancy and use, or Permittee's guests, invitees, sublessees,
or licensees occupancy and use, of the Premises, or improvements including, but not
limited to, any use involving petroleum based products, hazardous materials, hazardous
waste and /or other hazardous substances as defined by City, County, State or Federal
laws and regulations. The Permittee's obligations in this section shall not extend to the
degree any Claim is proximately caused by the sole negligence or willful misconduct of
the City, subject to any immunities which may apply to the City with respect to such
2
56
Claims. This indemnification provision and any other indemnification provided
elsewhere in this Permit shall survive the termination of this Permit and shall survive for
the entire time that any third party can make a Claim.
(12) Insurance: The Permittee shall maintain insurance for the Premises during the
term of this Permit, issued by a company authorized to transact business in California
with a rating of A- (or higher) and Financial Size Category Class VII (or larger), in at
least the following amounts: (i) workers' compensation insurance providing statutory
benefits and employer's liability insurance in an amount not less the $1 million; (ii)
commercial general liability insurance in an amount not less than $2 million per
occurrence and $4 million general aggregate for bodily injury, personal injury, and
property damage; (iii) contractor's pollution liability insurance, in an amount of no less
than $3 million, for contractors or subcontractors performing construction work providing
coverage for liability arising out of a sudden, accidental and gradual pollution; and (iv)
Pollution legal liability, of no less than $1 million, applicable to bodily injury; property
damage, including loss of use of damaged property or of property that has not been
physically injured or destroyed; cleanup costs; and defense, including costs and
expenses incurred in the investigation, defense, or settlement of claims; all in
connection with any loss arising from the Premises. The City (i.e., its elected or
appointed officers, officials, employees, agents and volunteers) shall be named as an
additional insured on all insurance policies required by this section.
(13) No Damages: The Permittee acknowledges the City would not have issued
this Permit if it were to be liable for damages under, or relating to, this Permit. The
parties agree that declaratory relief, injunctive relief, mandate and specific performance
shall be the Permittee's sole and exclusive judicial remedies.
(14) Uplands Support: The location of the parking spaces serving the Premises as
required by NBMC Section 20.40.040, or any successor statute, shall be depicted on
Attachment 2.
3
57
Attachment 1
Description of Premises
4
58
Attachment 2
Depiction of Premises & Uplands Support
5
59
ATTACHMENT C
RESOLUTION NO. 2012-
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NEWPORT BEACH
SETTING RENT FOR COMMERICIAL MARINAS
LOCATED UPON TIDELANDS
WHEREAS, pursuant to the 1978 Beacon Bay Bill, as amended, ( "Beacon Bay
Bill ") the City of Newport Beach ( "City') acts on behalf of the State of California as the
trustee of tidelands located within the City's limits, including Newport Harbor;
WHEREAS, Section 1(b) of the Beacon Bay Bill authorizes the City to allow third -
parties to use the tidelands for commercial purposes for a term not to exceed fifty (50)
years;
WHEREAS, the City allows marinas, as that term is defined in Newport Beach
Municipal Code ( "NBMC ") Section 17.01.030(J)(3), to operate upon the tidelands under
either a permit or a lease;
WHEREAS, The Beacon Bay Bill, California Constitution Article 16, Section 6,
NBMC Section 17.60.060(D), NBMC Section 17.60.020(E), and City Council Policy F-
7(D) require the City to receive fair market rent from third parties using the tidelands;
WHEREAS, NBMC Section 17.060.060(D) vests the City Council with the
exclusive discretion to determine fair market rent based upon the findings of a City -
selected appraiser;
WHEREAS, an appraisal report by Rasmuson Appraisal Services, dated August
8, 2012, entiled "A Summary Appraisal of Newport Harbor Commercial Tidelands Fair
Market Rent Study, Newport Beach CA" and an appraisal report by Netzer & Assoc.,
dated August 10, 2012, entitled "Appraisal Report, Commercial Tidelands, Newport
Harbor, Newport Beach, California" were prepared and delivered to the City and have
been reviewed and considered by the City Council, which reports are part of the record
for this matter;
WHEREAS, the Rasmuson and Netzer reports concluded that the current fair
market gross revenue percentage rent for Tidelands in Newport Harbor is between 17%
- 25% for marina slip uses, depending on certain variables;
WHEREAS, other existing agreements for use of tidelands in the Newport Harbor
have percentage rent rates for marina slip uses ranging between 9% and 40 %,
including two County tideland leases with marina rental rates of 20 %;
WHEREAS, the Committee and members of the Committee held public outreach
meetings with Commercial Marina Operators to solicit their input and participation in the
20
tidelands review process and these meetings afforded the public the opportunity to
comment on this matter as well as provided the public information relating to this matter;
WHEREAS, the City Council held several study sessions where public input and
testimony was taken, including meetings on March 13, 2012 and September 12, 2012;
WHEREAS, the City Council has considered all documents and comments in the
record in connection with this resolution;
WHEREAS, on November 23, 2010 the City Council adopted Resolution No.
2010 -132 implementing a new phased in rent program for the City's on -shore and off-
shore moorings and directed that planned rent increases scheduled to occur in 2013
shall only incur upon the City's completion of the tidelands review process;
WHEREAS, the City Council on September 12, 2012, following input from the
public and upon consideration of all matters in the record relating to this matter,
exercised its exclusive discretion pursuant to NBMC Section 17.60.060(D) to
recommend a fair market value rent based upon the findings of a City - selected
appraiser that the fair market rent for commercial marina tidelands users was to be (in
summary) 20% of slip revenue, based upon an index of commercial marinas, converted
into a square footage dollar amount; and
WHEREAS, all previous resolutions and actions regarding the fair market rent for
commercial marinas that are in conflict with the rent established by the City Council in
this resolution are hereby repealed.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The Recitals provided above are true and correct and are
incorporated into the substantive portion of this resolution.
Section 2: The City Council finds pursuant to NBMC Section 17.60.060(D) that
the rent provision contained in the attached Commercial Marina Rent calculation, which
is incorporated by reference, provides for the charging of fair market rent and that the
rental rate (and adjustments) in the attachment constitutes fair market rent, which
findings are made by the City Council in its exclusive discretion but are based on the
information in the appraisals of its City - selected appraisers and, in addition, on other
testimony and documents in the record for this matter. The City Council further finds
and determines the rent for commercial marinas located upon City administered
tidelands, operating under an annual permit or a lease, shall be set in accordance with
the attached Commercial Marina Rent calculation.
Section 3: The City Council affirms that the price adjustments set to occur in
2013 for the City's on -shore and off -shore moorings pursuant to Resolution No. 2010-
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132 shall be held in abeyance until the City Council completes its open and public
review and analysis of commercial piers not already on leases, and residential piers,
including rentals of residential piers. Once the City Council's open and public review
and analysis are completed, the price adjustments may take effect without further action
by the City Council.
Section 4: The City Council find this action is not subject to the California
Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will
not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or
indirectly.
Section 5: This resolution shall take effect immediately upon its adoption by
the City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this day of 2012.
r,IJWr� -JI
Leilani I. Brown,
City Clerk
Attachment: Commercial Marina Rent
Nancy Gardner,
Mayor
-3- 62
Commercial Marina Rent
A. Beginning on the date a lease or permit is first effective (i.e., the date a lease is
executed by all parties or a permit is issued by the City), a Commercial Marina Operator shall
pay to the City, on a monthly basis, Rent (as defined below).
Rent: Rent shall be calculated on an annual basis as follows:
First, the City shall determine the "Target Indexed Rate" as follows: the
"Aggregate % Equivalent Rent" shall be determined, which is
comprised of Gross Revenue for Slip Rentals for the preceding calendar
year of all marinas included within the Marina Index multiplied by point
(0._) (i.e., if aggregate Gross Revenue for Slip Rentals is
$14,100,000, multiply $14,100,000 by 0. to yield an Aggregate %
Equivalent Rent of $2,624,000). If a Commercial Marina Operator of a
marina included in the Marina Index fails to provide Gross Revenue for
Slip Rentals for any calendar year the City shall use the Commercial
Marina Operator's immediate prior Gross Revenue for Slip Rentals as
adjusted by the Consumer Price Index ( "CPI "). The Aggregate %
Equivalent Rent shall then be divided by the aggregate Premises' square
footage for all marinas included in the Marina Index to determine the
Target Indexed Rate for the succeeding twelve (12) months of Rent
beginning on March 1 (i.e., if the Aggregate % Equivalent Rent is
$2,624,000 and the aggregate square footage for all marinas in the
Marina Index is 1,248,000 square feet, the Target Index Rate would be
$2.10 a square foot [$2,624,000 divided by 1,248,000 square feet]). The
Premises for the individual Marina Index marinas will be based on known
amounts determined by reference to existing City or County permits or
leases. The Target Index Rate shall be calculated annually by the City in
accordance with this paragraph as soon as practicable after December 31
of each calendar year.
For a term year beginning March 1, 2018, and thereafter, monthly Rent
shall equal the then applicable Target Index Rate, rounded to the nearest
cent, times the Premises square footage as set forth in this resolution
(i.e., if the Target Index Rate is $2.10 and the Premises is 10,000 square
feet the annual Rent would be $21,000). Through March 1, 2018, Rent
will be set in accordance with a six - period phase -in procedure as follows:
From the effective date, Rent shall be calculated annually each March 1
by reference to the following methodology: Target Index Rate minus the
prior calendar year square footage rate divided by the number of years
remaining within the six (6) year phase -in period plus the prior calendar
year square footage rate. An example of the Rent calculation is provided
below in Table #1.
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♦ffw..O Ta(.tiMnM Otl.f ia:e
Ardell
770
S
7.71
S
7.A
S
7-71
Harbor Towers Marina
7.70
Newport Dunes Marina
7.71
S 7137
fte .o Yeti t L1ebn�f ."O eae
5
1.30
$
0.05
$
09i
OHfe Z iA
$
1 71
$
l aB
$
123
$
0 9?
wnoml.ftwswry.i�w.ea eetHe;
e
J
l
3
1
1
Mn
vhf
1.eow fm tfw Yea 1AM
$
029
$
030
$
0.31
5
O)7
$
0.11
$
037
wte: v..c :eC rz.�eenaes fssuro:au xsu-ea san.,�ab-.7r -w.,na M..
-x 30:110:9 fy{ef' f low .r.tefe s 8ec�aeu. fz.
In Table #1, the example assumes that the Targeted Index Rate in 2013
is two dollars and ten cents ($2.10) per square foot. In the actual
calculation and subsequent years, the Targeted Index Rate will be
adjusted annually, as set forth above, and may increase or decrease.
This increase or decrease shall be reflected in the subsequent
calculations using the same methodology as shown above.
2. Marina Index Composition: The Marina Index shall be comprised of
the following marinas:
1)
Ardell
2)
Bayshores Marina
3)
Bayside Marina
4)
Lido Yacht Anchorage
5)
Harbor Towers Marina
6)
Newport Dunes Marina
7)
Newport Marina
8)
Bahia Corinthian Yacht Club
9)
Balboa Yacht Basin
The square footage weighting in the Marina Index will be based on the
Tidelands square footage used by the Commercial Marina. To be
included within the Marina Index, a Commercial Marina Operator must
agree to the terms provided in this resolution. The marinas included in
the Marina Index may be revised by the City Council at a regular or
special meeting in the event that an index marina ceases operation, fails
to comply with the terms provided in this resolution, or in the reasonable
discretion of the City Council ceases to be meaningful for use in the
Marina Index. In that event, the City Council shall strive to select a new
marina whose operating characteristics, revenue, and Tidelands square
footage is similar to the marina to be replaced.
B. Fair Market Adjustment of Rent and Other Fees and Charges: At the
Market Adjustment Date, the Rent shall be adjusted to reflect the then - current fair
market value, as such value shall be determined by appraisal. Specifically, the City
shall retain one (1) independent MAI appraiser to conduct a harbor -wide appraisal of
commercial uses. Within thirty (30) calendar days of the City's selection of an appraiser
-5- 64
the Commercial Marina Operators included in the Marina Index may retain one (1)
independent MAI appraiser to conduct a harbor -wide appraisal of commercial uses.
Each party shall pay the costs of their selected appraiser. The City shall not participate
in the selection of the Commercial Marina Operators' appraiser. If the Commercial
Marina Operators are unable or unwilling to select and retain an appraiser within thirty
(30) calendar days of the City's selection of an appraiser, the City may in its sole and
absolute discretion select and retain an independent MAI appraiser on behalf of the
Commercial Marina Operators to conduct a harbor -wide appraisal of commercial uses.
If the two (2) appraisals return with a fair market value that is within five percent
(5 %) of each other the two (2) appraisal fair market values shall be averaged to produce
the then - current fair market value. For clarity, if one (1) appraiser concludes thirteen
percent (13 %) and one (1) appraiser concludes fifteen percent (15 %) the difference in
their conclusions is thirteen and 333/1,OOOths percent (13.333 %) and therefore a third
appraisal would be needed. If the two (2) appraisers should fail to agree on the fair
market value, and the difference between the two (2) appraisals exceeds five percent
(5 %), then the two (2) appraisers thus appointed shall mutually appoint a third MAI
designated appraiser, and in case of their failure to agree on a third appraiser within
thirty (30) calendar days after their individual determination of the fair market value,
either party may apply to the Presiding Judge of the Superior Court for Orange County,
requesting said Judge to appoint the third MAI designated appraiser. The costs of the
third appraiser, if any, shall be split equally between the Lessor and the Lessees
included in the Marina Index. The third appraiser so appointed shall meet and confer
with the two (2) other appraisers and then conduct its own analysis to determine the
then - current fair market value within sixty (60) calendar days of their appointment and
the average of the fair market value per square foot as set forth in the appraisals of the
two (2) closest appraisers shall be used as the then - current fair market value. All MAI
appraisers appointed or selected pursuant to this subsection shall have at least ten (10)
years experience appraising Tidelands in the Southern California area and shall be free
of conflicts (i.e., no appraisers shall rent a boat slip or office space from Lessor or
Lessees, etc.).
C. To be included within the Marina Index, a Commercial Marina Operator
must agree to be bound by the following terms:
(1) Slip Rental Documentation: By February 1, 2013, a Commercial Marina
Operator shall provide City with Gross Revenue for Slip Rentals and the
slip rental rate schedule for the most recent calendar year and the two (2)
preceding calendar years. For every subsequent calendar year, a
Commercial Marina Operator shall provide the City its Gross Revenue for
Slip Rentals and the slip rental rate schedule for the prior calendar year by
February 1st of every year. The Gross Revenue for Slip Rentals shall be
certified by the Commercial Marina Operator and its external auditor to be
true and accurate to the City for purposes of calculation of the Marina
Index. At the Commercial Marina Operator's option, the Gross Revenue
for Slip Rentals may be provided directly to the City or to the City's
-6- 65
designated certified public accountant ( "CPA ") for such purposes. The
City's designated CPA shall exercise independent professional judgment
and shall not be used by the City for any other purposes. The City shall
use its best efforts to maintain such Gross Revenue for Slip Rentals
information confidential.
(3) Audit: If Gross Revenue for Slip Rental is submitted to City, City may, or if
Gross Revenue for Slip Rentals is submitted to City's designated CPA, the
CPA may, in its sole and absolute discretion, at any and all reasonable
times, examine and audit Books and Records, financial statements, and
documentation, without restriction, for the purpose of determining the
accuracy of the Gross Revenue for Slip Rentals for the Premises reported
to the City or the City's designated CPA for the prior year, and the
accuracy of the Rent paid to City. If the Commercial Marina Operator's
business operations conducted within or from the Premises are part of a
larger business operation of the Commercial Marina Operator, and any
part of the Books and Records, financial statements and documentation is
prepared only for the larger operation, and not solely for the business
operations of the Premises, then the City shall also have the right to
examine and audit that part of the Books and Records, financial
statements, and documentation of the larger business operation. In the
event the Commercial Marina Operator does not make available the
original Books and Records, financial statements, and documentation at
the Premises or within the limits of Orange County, Commercial Marina
Operator shall pay all necessary travel expenses incurred by City
(including, without limit, the cost of City's agent's time) in conducting an
audit at the location where Books and Records are maintained. If the
audit reveals a discrepancy in the Gross Revenue for Slip Rentals
reported to City of ten percent (10 %) or less, City shall pay the cost of the
audit. If the audit reveals a discrepancy in the Gross Revenue for Slip
Rentals reported to City of greater than ten percent (10 %) the Commercial
Marina Operator shall pay the cost of the audit.
D. For the purposes of this resolution the following terms have the following
meanings:
(1) Books and Records means full, complete, accurate and proper books,
records and accounts of all business, use or occupation, or any
combination thereof, transacted, arranged or performed, in whole or in
part, on, from or for goods, services or events from or related to the
Premises, whether by the Lessee or by a sublessee, licensee,
concessionaire or other party, consistently applied, which shall include
equipment to record all sales at the time of transactions and shall also
include, without limit, income, sales and property tax returns and on a
cash basis method of accounting information.
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(2) City means the City of Newport Beach.
(3) Commercial Marina means a "marina" as defined in Newport Beach
Municipal Code Section 17.01.030(J)(3).
(4) Commercial Marina Operator(s) means a person or entity that rents
Tidelands from the City under either a permit or a lease for the operation
of a commercial marina.
(5) Gross Revenue for Slip Rentals means all receipts of every kind and
nature, whether for cash, credit or barter, received /due for the rental or
use of a slip, dock, or pier on the Premises. Without limiting the breadth of
the prior sentence, Gross Revenue for Slip Rentals shall include, without
limitation, receipts of every kind and nature derived from any promotion,
package deal, service, or other item that is associated in any way with the
rental or use of a slip, dock, or pier on the Premises, excluding pass -
through of direct third -party charges (e.g., electricity, cable TV, etc.)
without markup by the Commercial Marina Operator. For purposes of
determining Gross Revenue for Slip Rentals any fixed, annual, monthly
and /or recurring charge that a person or entity is required to pay shall be
counted as part of the Gross Revenue for Slip Rentals. Gross Revenue
for Slip Rentals shall not be offset or reduced for any reason, including,
but not limited to, the payment of taxes, fees, repairs, maintenance,
construction, or inability or failure to collect any cash, credit, or barter due
for the use of a slip, dock, or pier on the Premises.
(6) Market Adjustment Date means March 1, 2023 and every tenth (10th)
anniversary year thereafter.
(7) Premises means those Tidelands which are subject to the applicable
permit/lease and are more particularly described and depicted in the
applicable permit/lease, excluding any private water and Improvements.
(8) Tidelands means certain tidelands and submerged land (whether filled or
unfilled), located in the City of Newport Beach, County of Orange, State of
California granted to the City of Newport Beach, as trustee, by the State of
California pursuant to the Tidelands Grant.
(9) Tidelands Grant means uncodified legislation related to the State of
California's grant of certain rights in the Tidelands to the City of Newport
Beach, including, without limitation, the Beacon Bay Bill (Chapter 74 of the
Statutes of 1978, as amended [citations omitted]).
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