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Agenda Item No. 12
March 13, 2012
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3002, dkiff @newportbeachca.gov
PREPARED BY: Tara Finnigan, Public Information Manager
APPROVED: LA,\
TITLE: Corona del Mar State Beach Concession Agreement
ABSTRACT:
The City of Newport Beach issued a request for proposals for concession operations at
Corona del Mar State Beach (CdM State Beach) in December 2011. After a thorough
review and selection process, staff is recommending approval of an agreement with
Rooster Cafe at CdM.
RECOMMENDATION:
1. Select Rooster Cafe at CdM as the concessionaire for Corona del Mar State Beach.
2. Authorize the Mayor and City Clerk to execute the Concession Agreement.
FUNDING REQUIREMENTS:
This proposal will generate greater than $24,000 per year after Year 1.
DISCUSSION:
Background
CdM State Beach is part of the California State Parks system, but is operated by the
City of Newport Beach (City) under the terms of the Operating Agreement by and
between the City and the State of California, dated August 1, 1999. The public
amenities at CdM State Beach include public restrooms, showers, a lifeguard facility,
and landscaping. The facility also includes a self- contained concession area intended to
provide food service and beach rentals. The concession operation is a key component
to the overall character of CdM State Beach.
Corona del Mar State Beach Concession Agreement
March 13, 2012
Page 2
The concession area is approximately one thousand forty -three (1,043) square feet in
size and is located within the Lifeguard Observation building. There is no indoor seating
but the City permits the concessionaire to use tables on a portion of the paved area
outside of the building.
The concession was operated by Kilmer Enterprises from November 1991 through
September 2005. The City terminated the concession agreement in the fall of 2005 to
commence construction on a number of beachgoer amenities and improvements. The
project, including the new concession area, opened in the summer of 2006.
Since that time, the City has issued several Requests for Proposals (RFP) for the
concession operations. The first two efforts were unsuccessful as agreements with the
selected operator could not be reached. The third RFP effort concluded in early 2008
and resulted in an agreement with Fuji Grill. Fuji Grill operated the concession until late
2010 when the City and the operator mutually agreed to terminate the concession
agreement.
The concession has been without a permanent operator since that time. Last year, the
City entered into temporary agreements with several food trucks in order to serve
summertime beach visitors until a permanent operator could be selected.
Request for Proposals
The City issued an RFP for concession operations at Corona del Mar State Beach on
December 9, 2011. Proposals were due on January 5, 2012 and the City's Purchasing
Division received responses from five restaurant operators / concessionaires: Babes
Cafe, Beach Snack Bar, The Porthole, Rooster Cafe, and Zack's.
Beach Snack Bar's submission was removed from consideration for two reasons. It did
not meet the minimum requirements and it proposed utilizing the concession building to
house vending machines rather than employing staff to prepare and sell fresh food.
Purchasing staff believes this proposed business operation would not meet the food and
beverage concession expectations of beach visitors and the surrounding community.
Selection Process
Staff from Revenue and Purchasing, along with an economic development consultant,
interviewed the remaining four operators. They further narrowed the field of candidates
to Rooster Cafe and Zack's, both popular food establishments with experienced
operators.
The Assistant City Manager then oversaw the remainder of the selection process which
included unannounced visits to the operator's current locations and discussions with the
Corona del Mar State Beach Concession Agreement
March 13, 2012
Page 3
Mayor and the City Manager, both of whom have previously worked on concession -
related issues.
The selection process centered on determining if the businesses would appeal to
seasonal beach visitors, draw residents from the surrounding community, and if they
would operate in a manner acceptable to the City and neighbors. Revenue - generating
potential was also important. However, due to the City's recent challenges in retaining
and maintaining a concessionaire at that location, staff weighed selecting an operator
who would sustain the concession in the long run and who is equally appealing to
visitors and residents, as more important than accepting a slightly higher financial offer.
Recommendation
Rooster Cafe was ultimately selected due to the proven, successful track record of the
business operator and the consensus among staff that the concept and product
offerings would appeal to both visitors and residents. Longtime Newport Beach resident
Wing Lam and his brother, Ed Lee, are partners in the original (and currently only)
Rooster Cafe located in Costa Mesa. They also co- founded and co -own Wahoo's Fish
Taco which has more than 60 stores and annual sales of more than $60 million.
Wahoo's was one of several vendors that, under agreements with the City, operated
food trucks at CdM State Beach in the summer of 2011. In addition, Lam and Lee
operated the concession at the Saw Dust Festival in Laguna Beach for 10 years and
currently operate a concession in Huntington Beach.
The Rooster Cafe concept is casual and based upon a simple menu of fresh food with
what the operators describe as a "hip and sustainable twist." Nearly all of the
restaurant's produce is purchased from local farmers markets. The Rooster Cafe menu
would be expanded for the CdM Concession location to include burgers, hot dogs,
wraps, fries and children's items. The concessionaire would also rent beach chairs,
umbrellas and mats.
Proposed Agreement
The City's Revenue Division negotiated the terms of the proposed agreement
(Attachment A). The key provisions are proposed as follows:
Term - Five years, with two, five -year extension options
Rent (Years 1 through 5) - The greater of Base Rent or Percentage Rent as detailed
below.
Percentage Rent Base Rent
Year 1 10% Waived for first year*
Year 2 10% $24,000.00
Corona del Mar State Beach Concession Agreement
March 13, 2012
Page 4
Year 3
12%
$24,720.00"
Year 4
14%
$25,461.60
Year 5
15%
$26,225.45
*To offset estimated tenant improvement expenses,
payment of Base Rent shall commence upon the first
anniversary of the Effective Date of the agreement.
** Upon each successive anniversary of the Effective Date,
the Base Rent shall be increased three percent (3 %).
Rent (Years 6 through 10) —The greater of Base Rent or Percentage Rent as detailed
below.
Percentage Rent
Year 6
15%
Year 7
15%
Year 8
15 %
Year 9
16%
Year 10
16%
Base Rent (3% annual
increases)
$27,012.21
$26,225.45
$27,822.58
$28,657.26
$29,516.98
Percentage rent shall be 16% for each year of the Option
Term thereafter.
Hours of Operation — From Memorial Day through Labor Day - Open Daily
Hours: From at least 9 a.m. to 6 p.m.
Labor Day to the day before Memorial Day — open at the
Concessionaire's discretion.
Parking - City will provide five parking permits for the tenant's
employee parking.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ( "CEQK) 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
Corona del Mar State Beach Concession Agreement
March 13, 2012
Page 5
has no potential for resulting in physical change to the environment, directly or
indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
Submitted by:
Attachments: A. Corona del Mar Concession Agreement
Corona del Mar State Beach
Concession Agreement
This Concession Agreement ( "Agreement') is made and entered into as of the _ day
of March, 2012 ('Effective Date "), by and between the City of Newport Beach, a
municipal corporation ( "City ") and Rooster Cafe at CdM, LLC ( "Concessionaire ").
RECITALS
A. Corona del Mar State Beach is part of the California State Parks system,
but is operated by the City pursuant to the Operating Agreement by and between the
City and the State of California, dated August 1, 1999 (the "Operating Agreement').
Pursuant to the Operating Agreement, City agreed "to develop, operate, control and
maintain the premises as public recreational beach and park with related concession..."
B. In September 2005, the concession located at Corona del Mar State
Beach was closed to commence construction of the Corona del Mar Beachgoer
Amenities Improvement Project (the "Project'). The Project included the improvement
of a one thousand forty -three (1,043) square foot concession facility which is depicted
on Exhibit "A" and incorporated herein by this reference (the "Premises ").
C. The City issued a Request for Proposals for Concession Operations at
Corona del Mar State Beach on December 9, 2011, and after a careful evaluation
process, the City selected Concessionaire.
D. Concessionaire and City desire to enter into this Agreement relating to the
purpose of allowing Concessionaire to operate a concession area intended to provide
food /drink service and beach rentals to beach visitors ( "Concession ").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
City and Concessionaire hereby agree as follows:
1. DEFINITIONS
1.1 General Definitions. As used in this Agreement, the following words and
phrases shall have the following meanings:
(a) Alteration — any improvements, additions, alterations, changes, or
modifications of the Premises made by Concessionaire including, but not limited to
fixtures and signage.
(b) Authorized City Representative — the City Manager or his designee.
(c) Expiration - the lapse of the time specified as the Term of this
Agreement, including any extension of the Term resulting from the exercise of an option
to extend.
(d) Good Condition - neat and broom - clean, and is equivalent to similar
phrases referring to physical adequacy in appearance and for use.
(e) Law - any judicial decision, statute, constitution, ordinance,
resolution, regulation, rule, administrative order, or other requirement of any municipal,
county, state, federal, or other government agency or authority having jurisdiction over
the parties hereto or the Premises.
(f) Maintenance or Maintain - repairs, replacement, maintenance,
repainting, and cleaning.
(g) Person - one or more natural persons, or legal entities, including,
without limitation, partnerships, corporations, trusts, estates, associations, or a
combination of natural persons and legal entities.
(h) Provision - any term, covenant, condition, or clause in this
Agreement that defines, establishes, or limits the performance required or permitted by
either party.
(i) Rent — includes Base Rent, Percentage Rent, taxes, and other
similar charges payable by Concessionaire under the provisions of this Agreement.
0) Successor - assignee, transferee, personal representative, heir, or
other Person succeeding lawfully, and pursuant to the provisions of this Agreement, to
the rights or obligations of either Party.
(k) Termination - the termination of this Agreement, for any reason,
prior to Expiration.
1.2 Other Definitions. - The following additional terms are defined in the
following sections of this Agreement:
(a) Base Rent §4.2
(b)
Claim or Claims
§10.1
(c)
Concession
Recitals, §D
(d)
Gross Sales
§4.6
(e)
Hazardous Materials
§17
(f)
Indemnified Parties
§6.3
(g)
Option Term(s)
§3.2
(h)
Percentage Rent
§4.3(a)
(i)
Project
Recitals, §B
Q)
Premises
Recitals, §B
(k)
Term
§3.1
2. PREMISES
City finds it to be in the public interest and consistent with park uses to grant an
exclusive right to operate a Concession at the Corona del Mar State Beach. Therefore,
pursuant to the terms and conditions set forth herein, City hereby grants to
Concessionaire the exclusive right, privilege and concession to conduct a business at
the Premises engaged in selling such items as those described in Section 5.1, Business
Purposes. Concessionaire agrees to accept the Premises in an "as is" condition as
tendered by City. Concessionaire agrees that no representations with respect to the
condition or improvements of the Premises have been made by City except as
specifically set forth in this Agreement.
3. TERM
3.1 Term of Agreement. The Term of this Agreement shall be five (5) years
from the Effective Date unless terminated sooner as provided in Section 14, or
extended as provided in Section 3.2.
3.2 Option to Extend. Provided Concessionaire is not then in default, and
upon approval of the City, Concessionaire may extend the term of this Agreement for
two additional successive terms of five (5) years (the "Option Term" or "Option Terms ")
the first commencing on Expiration of the initial Term and the second commencing on
Expiration of the first Option Term, on the same terms and conditions as contained in
this Agreement. Concessionaire must exercise the option by giving City written notice
of its intention to do so at least three (3) months prior to Expiration of the initial Term or
the first Option Term.
3.3 Hold Over. Should Concessionaire, with City's consent, hold over and
continue in possession of the Premises after Expiration of the Term or any Option Term,
Concessionaire's continued occupancy of the Premises shall be considered a month -to-
month tenancy subject to all the terms and conditions of this Agreement, except the
provisions of Sections 3.1 and 3.2.
4. RENT
4.1 Concessionaire shall pay the greater of Base Rent or Percentage Rent.
4.2 Base Rent. In order to offset estimated tenant improvement expenses,
Concessionaire shall commence payment of Base Rent upon the first anniversary of the
Effective Date.
The Base Rent shall be established at Twenty -Four Thousand and 00/100
Dollars ($24,000.00) per year. Base Rent shall be paid, in advance, in equal monthly
installments on the first day of each month. Base Rent for any partial month shall be
prorated in accordance with the actual number of days in that month and shall be due
on the first day of that month that falls within the Term.
Annually, upon each successive anniversary date of the Effective Date,
the Base Rent shall be increased three percent (3 %).
4.3 Percentage Rent.
(a) Payment. "Percentage Rent' shall be determined each calendar
month and shall be calculated by multiplying the percentage, as indicated by the table
below, by the total Gross Sales (as defined in Section 4.6) made in, upon, or from the
Premises and /or otherwise attributable to the Premises for the calendar month. For
each month that Percentage Rent exceeds Base Rent, Concessionaire shall pay to City
the Percentage Rent less the Base Rent paid to the City for that month.
Percentage Rent
Year
10%
Year
10%
Year
12%
Year
14%
Year 5
15%
If Concessionaire exercises its option to extend pursuant to Section 3.2:
Percentage Rent
Year6
15%
Year?
15%
Year
15%
Year
16%
Year 10
16%
Percentage Rent shall be sixteen percent (16 %) for each year of the Option Term
thereafter.
(b) Accounting and Payment. Within twenty -five (25) days after the
end of each calendar month for the term hereof, as may be extended as provided
herein, commencing with the twenty -fifth (25th) day of the month following the Effective
Date, and ending with the twenty -fifth (25th) day of the month next succeeding the last
month of the term, as may be extended as provided herein, Concessionaire shall furnish
to City a statement in writing, certified by Concessionaire and a Certified Public
Accountant to be correct, showing the total Gross Sales made in, upon, or from and /or
otherwise attributable to the Premises during the preceding calendar month (or
fractional month at the beginning of the term if the Effective Date is other than the first
day of a month), and shall accompany each such statement with the Percentage Rent
payment to City, less the Base Rent already paid to the City for that month.
4.4 Revenue from Premises Use in Film, Television, and /or Advertising.
Concessionaire may allow the Premises to be used for film, television production,
advertising production, or other media vehicle only upon written approval from the City
and in compliance with the Newport Beach Municipal Code. One -half (1/2) of all
monetary revenue received by Concessionaire as compensation or other payment for
the use of the Premises in a film, television production, advertising production, or other
media vehicle shall be paid to City. The payment of revenue pursuant to this Section
shall occur not less than thirty (30) days after Concessionaire receives this
compensation or other payment.
4.5 Payment Location. Rent shall be payable at the office of the City's
Revenue Division at 3300 Newport Boulevard, Newport Beach, California, or at such
other place or places as City may from time to time designate by written notice delivered
to Concessionaire; or by electronic delivery if mutually agreed upon by City and
Concessionaire.
4.6 Gross Sales.
(a) The term "Gross Sales" means:
(1) all money, cash receipts, assets, property or other things of
value, including but not limited to gross charges, sales, rentals, fees and commissions
made or earned by Concessionaire and /or any assignees, licensees, permittees or
concessionaires thereof, whether collected or accrued from any business, use or
occupation, or any combination thereof, originating, transacted or performed in whole or
in part, on the Premises, including but not limited to rentals, the rendering or supplying
of services and the sale of goods, wares or merchandise, whether wholesale or retail,
whether for cash or credit, or otherwise, and including the value of all consideration
other than money received for any of the foregoing, without, except as expressly
provided in Section 4.6(b), deduction from gross receipts for any overhead or cost or
expense of operations, such as, but without limitation to salaries, wages, costs of
goods, interest, debt amortization, credit, collection costs, discount from credit card
operations, insurance and taxes. Each installment or credit sale shall be treated as a
sale for the full price in the month during which such sale is made, irrespective of
whether or when Concessionaire receives payment therefore. Gross Sales shall
include any amount allowed upon any "trade in," the full retail price of any merchandise
delivered or redeemed for trading stamps or coupons and all deposits not refunded to
purchasers;
(2) Orders taken in or from the Premises, even if the orders are
filled elsewhere, and sales by any subconcessionaire in or from the Premises;
(3) Gross receipts of all coin - operated devices that are placed
on the Premises by Concessionaire or pursuant to any rent concession, percentage or
other arrangement (but excluding revenue from telephones that are collected by a
public and /or private utility); and
(4) Rentals of any beach equipment, beach furniture, goods,
wares or merchandise.
(b) Exclusions from Gross Sales. Gross Sales shall not include, or if
included there shall be deducted (but only to the extent they have been included), the
following:
(1) Sales and use taxes, so- called luxury taxes, consumers'
excise taxes, gross receipts taxes, and other similar taxes now or in the future imposed
on the sale of merchandise or services, but only if such taxes are added to the selling
price and collected from customers;
(2) The amount of returns to shippers or manufacturers;
(3) The amount of any cash or credit refund made upon any
sale where the merchandise sold or some portion is returned by the purchaser. Each
sale upon installment or credit shall be treated as a sale for the full price in the month
during which such sale shall be made, irrespective of the time when Concessionaire
shall receive payment (whether in full or partial) from its customers;
(4) Sales of trade fixtures or personal property to be replaced by
Concessionaire that are not considered stock in trade;
(5) Sums and credits received in the settlement of claims for
loss of or damage to merchandise;
(6) Meals provided for officers or employees without charge;
(7) Meals, goods or products provided for promotional or
publicity purposes without charge;
business;
(8) Cash refunds made to customers in the ordinary course of
(9) Value added taxes ( "VAT') or other taxes added to the
selling price of products and other similar taxes now or hereafter imposed upon the sale
of merchandise or services, whether such taxes are added to, or included in the selling
price;
(10) Discounted sales to employees of Concessionaire, not to
exceed two percent (2 %) of the monthly Gross Sales;
(11) Uncollectible credit accounts and other bad debts, not to
exceed two percent (2 %) of the monthly Gross Sales; and
(12) Amounts paid to charge card or credit card issuers.
(c) Annual Statements of Gross Sales. Within thirty (30) days after the
end of each calendar year during the Term hereof, as may be extended as provided
herein, Concessionaire shall furnish to City a statement in writing, certified by
Concessionaire and a Certified Public Accountant to be correct, showing the total Gross
Sales made in, upon, or from and /or otherwise attributable to the Premises during the
preceding calendar year (or fractional year at the beginning of the term if the Effective
Date is other than the first day of the year).
(d) Sales and Charges. All sales and charges shall be recorded by
means of cash registers that display the amount of the transaction certifying the amount
recorded. The register shall be equipped with devices that log in daily sales totals, and
record on tapes the transaction numbers and sales details. At the end of each day the
tape will record the total sales for that day.
(e) Production of Statement, Records and Audit. Concessionaire shall
keep at the Premises (and shall require any permitted sub concessionaire to keep at the
Premises) full, complete and proper books, records and accounts of its daily Gross
Sales, both for cash and on credit, at any time operated in the Premises.
Concessionaire agrees to make available for inspection by City at the Premises, a
complete and accurate set of books and records of all sales of goods, wares, and
merchandise and revenue derived from the conduct of business or activity in, at or from
the Premises from which Gross Sales can be determined. Concessionaire shall also
make available, upon City request, all supporting records. Concessionaire shall also
furnish City copies of its quarterly California sales and use tax returns at the time each
is filed with the State of California. Concessionaire shall retain and preserve for at least
three (3) years all records, books, bankbooks or duplicate deposit books and other
evidence of Gross Sales. City shall have the right, upon reasonable notice, during the
Term and within one hundred eighty (180) days after Expiration or Termination of this
Agreement to inspect and audit Concessionaire's books and records and to make
transcripts to verify the Rent due to the City. The audit may be conducted at any
reasonable time during normal business hours. Concessionaire shall cooperate with
City in making the inspection and conducting the audit. The audit shall be limited to the
determination of Gross Sales and shall be conducted during usual business hours in a
manner that minimizes any interference with the conduct of Concessionaire's regular
business operations. If the audit concludes that there is a deficiency in the payment of
any Rent, the deficiency shall become due and payable within twenty (20) days and if
there is an overpayment, City shall refund the amount of the overpayment within twenty
(20) days. City shall bear its costs of the audit unless the audit shows that
Concessionaire understated Gross Sales by more than two percent (2 %), in which case
Concessionaire shall pay all City's reasonable costs of the audit. City shall not disclose
financial information received in confidence and pursuant to this Agreement except to
carry out the purposes of this Agreement unless disclosure is required (rather than
permitted) by law. However, City may disclose the results of any audit in connection
with any financing arrangements, the sale or transfer of City's interest in the Premises,
pursuant to order of a court or administrative tribunal, or to collect any outstanding Rent.
(f) Concessionaire's Gross Sales Audit. In the event of any audit by
City in accordance with this Agreement, Concessionaire may contest the results of
City's audit by performing a confirming audit, at Concessionaire's expense, within sixty
(60) days of receipt of City's audit results and supporting evidence, using an
independent Certified Public Accountant reasonably acceptable to City. (g)
Acceptance. The acceptance by City of any money paid to City by
Concessionaire as Percentage Rent for the Premises, as shown by any statement
furnished by Concessionaire, shall not be construed as an admission of the accuracy of
said statement, or of the sufficiency of the amount of the Percentage Rent payment.
4.7 Late Payment. Concessionaire hereby acknowledges that the late
payment of Rent or other sums due hereunder will cause City to incur costs not
contemplated by this Agreement, the exact amount of which is extremely difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
charges. Accordingly, any payment of any sum to be paid by Concessionaire not paid
within five (5) days of its due date shall be subject to a ten percent (10 %) late charge.
City and Concessionaire agree that this late charge represents a reasonable estimate of
such costs and expenses and is fair compensation to City for its loss suffered by such
late payment by Concessionaire.
4.8 Interest on Unpaid Sums. Unpaid sums due to either City or
Concessionaire under this Agreement shall bear interest at the rate of ten percent
(10 %) per annum on the unpaid balance, including but not limited to late payment
penalties, from the date due until paid.
5. BUSINESS PURPOSES AND USE OF PREMISES
5.1 Business Purposes. The Premises are to be used by Concessionaire for
the operation of a concession selling food, non - alcoholic beverages, and miscellaneous
beach - related merchandise, as well as for the rental of beach - related products,
including but not limited to, umbrellas, and beach chairs. Concessionaire's proposed
menu, proposed rental items and proposed sales merchandise is hereby attached as
Exhibit "B ". Pricing for these products will be comparable to prices at nearby beach
concession facilities. Alcoholic beverage sales or giveaways are prohibited.
5.2 Operation of Premises. Concessionaire shall operate and manage the
Premises in a manner comparable to other high quality businesses providing similar
food and services. Deliveries shall be made and completed only between 7 a.m. and 6
p.m. on non - holiday weekdays.
5.3 Prohibited Uses. Concessionaire shall not sell or permit to be kept, used,
displayed or sold in or about the Premises (a) pornographic or sexually explicit books,
magazines, literature, films or other printed material, sexual paraphernalia, or other
material which would be considered lewd, obscene or licentious, (b) any article which
may be prohibited by standard forms of fire insurance policies, or (c) any alcoholic
beverages. Vending machines, gaming machines or video or arcade games shall not
be used or installed on the Premises unless expressly permitted by this Agreement.
Concessionaire shall not use or permit the use of the Premises in any manner that (a)
creates a nuisance or (b) violates any Law. Concessionaire shall not offer entertainment
or broadcast music or entertainment through exterior speakers or other form of
transmission without the written approval of City. In this event, Concessionaire shall
obtain all required City permits and approvals.
5.4 Food Packaging and Debris. Concessionaire shall use food packaging
consistent with good environmental practices, including prohibiting polystyrene (also
known as Styrofoam) from the Premises, minimizing the use of PVC plastics (especially
plastic bags for carrying food), and providing both trash receptacles and places for
customers to dispose of recyclable products.
5.5 Outdoor Dining. Concessionaire shall be permitted to use up to eighteen
(18) tables on a portion of the paved area outside of the Premises, in accordance with
City zoning codes and State requirements. The layout of the tables is subject to
approval by the City. Concessionaire may not expand onto the beach area, or place
any temporary furniture or objects onto the beach area.
5.6 Operation. Weather permitting, Concessionaire shall keep the Premises
in operation and open to the public for business in accordance with the following
schedule:
From Memorial Day through Labor Day - Open Daily
Hours: From at least 9:00 a.m. to 6:00 p.m., but in no event, no earlier than 6:00 a.m.,
and no later than 10:00 p.m.
From the day after Labor Day to the day before Memorial Day — open at the
Concessionaire's discretion, but in no event, no earlier than 6:00 a.m. and no later than
10:00 P.M.
Concessionaire may close the Concession during periods of remodeling, reconstruction,
inventory and emergencies (including substantially inclement weather) or to comply with
Laws.
5.7 Food Preparation. Concessionaire shall install, at Concessionaire's own
expense, fire protective systems in grill, deep fry, and cooking areas which are required
by City, County, and state fire ordinances. Concessionaire shall also install adequate
ventilation systems to operate the cooking area.
5.8 Advertising Display. Concessionaire may, at its own expense, place unlit
signs in or upon the Premises subject to the prior written consent of the City Manager
as to the size, type, number, design and method of installation and in compliance with
the City's sign code regulations. All signage placed by Concessionaire on, in or about
the Premises shall remain the property of Concessionaire and shall be removed by
Concessionaire upon Termination or Expiration of this Agreement at Concessionaire's
expense; and any damage caused by removal shall be repaired at Concessionaire's
expense.
5.9 Personnel. Concessionaire shall be responsible for hiring the necessary
personnel to conduct the daily operation of Concession. Concessionaire shall comply
with all federal, state, and local Laws related to minimum wage, social security,
nondiscrimination, ADA, unemployment compensation, and workers' compensation. If
required by the City, employees shall wear a uniform and /or identification badge.
5.10 Independent Contractor. It is understood that Concessionaire is an
independent contractor and not an agent or employee of City. Nothing in this
Agreement shall be deemed to constitute approval for Concessionaire or any of
Concessionaire's employees or agents, to be the agents or employees of City. City
shall have no interest in the business of Concessionaire.
5.11 No Distress Sales. No auction, fire, bankruptcy, "going out of business" or
other distress sales of any nature may be conducted on the Premises without the prior
written consent of the City Manager, which approval will not be unreasonably withheld
but may be conditioned.
5.12 Parking for Employees. City shall designate up to five (5) parking spaces
for Concessionaire and its employees daily from Memorial Day through Labor Day. City
shall provide Concessionaire with five (5) Annual Parking Permits each year for its
employees.
5.13 Parking Off - Season. City shall work with Concessionaire to accommodate
parking for Concessionaire's customers during the winter months.
6. TAXES, LICENSES AND OTHER OBLIGATIONS
6.1 Payment of Taxes. Concessionaire shall pay directly to the appropriate
taxing authorities all taxes applicable to this Agreement, fixtures and Concessionaire's
personal property on the Premises, that are levied or assessed against Concessionaire
during the Term. Taxes shall be paid at least ten (10) days before delinquency and
before any fine, interest or penalty is due or imposed by operation of law.
Concessionaire shall, upon request, promptly furnish to the City satisfactory evidence of
payment. Concessionaire acknowledges that this Agreement may create a possessory
interest subject to property taxation and that Concessionaire may be subject to the
payment of property taxes levied on such interest. Concessionaire shall pay, before
delinquency all taxes, assessments, license fees and other charges ( "Taxes ") that are
levied or assessed against Concessionaire's interest in the Premises or any personal
property installed on the Premises.
6.2 Payment of Obligations. Concessionaire shall promptly pay, when due,
any and all bills, debts, liabilities and obligations incurred by Concessionaire in
connection with Concessionaire's occupation and use of the Premises.
6.3 Challenge to Taxes. Concessionaire shall have the right in good faith, at
its sole cost and expense, to contest the amount or legality of any Taxes on or
attributable to this Agreement, the Premises, Concessionaire's personal property, or
Concessionaire's occupation and use of the Premises, including the right to apply for
reduction. If Concessionaire seeks a reduction or contests such taxes,
Concessionaire's failure to pay the taxes shall not constitute a default as long as
Concessionaire complies with the provisions of this Section. City shall not be required
to join in any proceeding or contest brought by Concessionaire unless the provisions of
any Law require that the proceeding or contest be brought by or in the name of City or
any owner of the Premises. In that case, City shall join in the proceeding or contest or
permit it to be brought in City's name as long as City is not required to bear any cost. If
requested by Concessionaire, City shall execute any instrument or document necessary
or advisable in connection with the proceeding or contest. Concessionaire, on final
determination of the proceeding or contest, shall immediately pay or discharge any
decision or judgment rendered, together with all related costs, charges, interest and
penalties. Concessionaire shall indemnify, defend and hold harmless the City, its
council members, boards, commissions, officers, employees, Authorized City
Representatives, agents and volunteers ( "Indemnified Parties ") from and against any
liability, claim, demand, penalty, cost or expense arising out of or in connection with any
contest by Concessionaire pursuant to this Section.
7. UTILITIES.
Concessionaire shall make all arrangements for utilities installation and pay for
all utilities furnished to or used on the Premises, including, without limitation, gas,
electricity, water, telephone service, and cable TV. Concessionaire may use City's
trash enclosures or public trash cans, provided however, that City may, at City's
discretion, require Concessionaire to arrange for its own refuse collection. Any repair to
utility lines within the Premises is the sole responsibility of Concessionaire.
Concessionaire shall service and maintain the Concession's 1500 - gallon grease
interceptor. Refuse collection and grease interceptor maintenance shall occur between
7 a.m. and 6 p.m. on non - holiday weekdays.
8. ALTERATIONS TO THE PREMISES.
8.1 Concessionaire Improvements. Concessionaire acknowledges that City
has delivered the Premises without any improvements, and it shall be Concessionaire's
responsibility to install any improvements as necessary for the Concession to operate.
All Concessionaire improvement plans and construction shall be subject to the prior
written approval of the City Manager. Concessionaire improvements shall be performed
between 7 a.m. and 6 p.m. on non - holiday weekdays. Any contractors hired by
Concessionaire shall be fully licensed and bonded. Concessionaire's contractors and
any subcontractors shall obtain insurance in an amount and form to be approved by
City's Risk Manager, including workers compensation insurance as required by law,
general liability, automobile liability and builder's risk insurance covering improvements
to be constructed, all pursuant to standard industry custom and practice. City shall be
named as an additional insured on the contractors and any subcontractors policies.
8.2 Permits. Concessionaire shall obtain, and be responsible for the costs for,
all building permits, health department permits and other required permits prior to
commencement of Concessionaire improvements and operations.
8.3 Quality of Work Performed. All alterations, maintenance and other work
shall be performed in a good and workmanlike manner, shall comply with the plans and
specifications submitted to City, and shall comply with all applicable governmental
permit requirements and Laws in force at the time permits are issued.
8.4 Payment of Costs. Concessionaire shall pay all costs related to the
construction of the improvements and any Alterations by Concessionaire or its agents.
8.5 Liens. Concessionaire shall keep the Premises free from any liens arising
out of any work performed, material furnished, or obligation incurred by Concessionaire
or alleged to have been incurred by Concessionaire.
8.6 Disposition of Alterations at Expiration or Agreement Termination. Any
Alterations made to the Premises shall remain on, and be surrendered with, the
Premises on Expiration or Termination of this Agreement (excluding Concessionaire's
fixtures, equipment, furniture, and moveable decorations). However, City may elect not
less than thirty (30) days prior to Expiration or Termination of this Agreement, to require
Concessionaire to remove any Alterations that Concessionaire has made to the
Premises. If City requires removal of Alterations, Concessionaire shall, at its cost,
remove the Alterations and restore the Premises to a broom -clean condition before the
last day of the Term, or within thirty (30) days after notice is given, whichever is later.
Prior to Expiration or within fifteen (15) days after Termination of this Agreement,
Concessionaire may remove any moveable partitions, machinery, equipment, furniture,
and trade fixtures previously installed by Concessionaire, provided that Concessionaire
repairs any damage to the Premises caused by removal.
9. MAINTENANCE OF PREMISES
9.1 Maintenance and Repair by Concessionaire and City. Concessionaire
agrees that it will keep the Premises in Good Condition. Graffiti shall be called in to the
City's Graffiti Hotline for removal. City may perform Maintenance or repairs in the event
Concessionaire fails to commence required Maintenance or repairs within three (3)
business days after receipt of notice to do so. The cost of any Maintenance or repairs
by the City pursuant to this Section shall be payable as additional Rent. All furnishings,
equipment, facilities, improvements, alterations, attachments and appurtenances not
provided by City, but required for concession operations, including all kitchen equipment
and interior furnishings, shall be maintained in Good Condition and repair by
Concessionaire at its cost. City may perform required cleaning and charge the costs to
Concessionaire if the Concessionaire fails to perform within five (5) days after notice to
do so and continue to Maintain the area as required by this Agreement.
9.2 Entry by City. Upon twenty -four (24) hour notice to Concessionaire, City and
its Authorized City Representatives may enter upon and inspect the Premises at any
reasonable time for any lawful purpose. In case of emergency, City or its Authorized
City Representative may enter the Premises by whatever force necessary if
Concessionaire is not present to open and permit an entry. Any entry to the Premises
by City shall not be construed as a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Concessionaire from the Premises or any portion thereof.
10. INDEMNITY AND EXCULPATION; INSURANCE
10.1 Hold- Harmless Clause. Concessionaire agrees to indemnify, defend and
hold harmless the City, its City Council, Boards, Commissions, officers, agents,
volunteers, employees, and the State of California (collectively, the "Indemnified
Parties ") from and against any and all claims (including, without limitation, claims for
bodily injury, death or damage to property), demands, obligations, damages, actions,
causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and
expenses (including, without limitation, attorney's fees, disbursements and court costs)
of every kind and nature whatsoever (individually, a "Claim "; collectively, "Claims "),
which may arise from or in any manner relate (directly or indirectly) to Concessionaire's
possession, occupation or use of the Premises, specifically including, without limitation,
any claim, liability, loss, or Damage arising by reason of:
(a) The death or injury of any Person or damage to personal property
caused or allegedly caused by the condition of the Premises or an act or omission of
Concessionaire or an agent, contractor, subcontractor, supplier, employee, servant,
sublessee or concessionaire of Concessionaire;
(b) Any work performed on the Premises or materials furnished to the
Premises at the request of Concessionaire or any agent or employee of
Concessionaire, with the exception of Maintenance performed by City; and /or
(c) Concessionaire's failure to perform any provision of this Agreement
or to comply with any requirement of Law or any requirement imposed on the Premises
by any duly authorized governmental agency or political subdivision.
Concessionaire's obligations pursuant to this Subsection shall not extend to any
Claim proximately caused by the sole negligence, willful misconduct, or unlawful or
fraudulent conduct on the part of the Indemnified Parties. This indemnity shall apply to
all claims and liability regardless of whether any insurance policies are applicable.
10.2 Exculpation of City. Except as otherwise expressly provided in this
Agreement, City shall not be liable to Concessionaire for any damage to Concessionaire
or Concessionaire's property from any cause other than the sole negligence, intentional
or willful acts of the Indemnified Parties. Except as otherwise expressly provided in this
Agreement, Concessionaire waives all claims against the Indemnified Parties arising for
any reason other than the sole negligence, intentional or willful acts of the Indemnified
Parties. City shall not be liable to Concessionaire for any damage to the Premises,
Concessionaire's property, Concessionaire's goodwill, or Concessionaire's business
income, caused in whole or in part by acts of nature including, without limitation, waves,
wind and ocean currents.
10.3 Insurance. In addition to insurance required of Concessionaire to be
obtained, provided, and maintained during the construction of the improvements, and
without limiting Concessionaire's indemnification of City, Concessionaire shall obtain,
provide and maintain at its own expense during the term of this Agreement, a policy or
policies of liability insurance of the type and amounts described below and in a form
satisfactory to City.
(a) Certificates of Insurance. Concessionaire shall provide certificates of
insurance with original endorsements to City as evidence of the insurance coverage
required herein. Insurance certificates must be approved by City's Risk Manager prior
to execution of this Agreement by the City. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement.
(b) Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
(c) Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders' Rating
of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the
latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk
Manager.
(d) Coverage Requirements.
i. Workers' Compensation Coverage. Concessionaire shall
maintain Workers' Compensation Insurance at statutory limits and Employer's Liability
Insurance at One Million and 00/100 Dollars ($1,000,000.00) for his or her employees in
accordance with the laws of the State of California. Any notice of cancellation or non -
renewal of all Workers' Compensation policies must be received by City at least thirty
(30) calendar days (ten (10) calendar days written notice of non - payment of premium)
prior to such change. The insurer shall agree to waive all rights of subrogation against
City, its officers, agents, employees and volunteers for all losses that relate in any way
to this Agreement.
ii. General Liability Coverage. Concessionaire shall maintain
commercial general liability insurance in an amount not less than Two Million and
00/100 Dollars ($2,000,000.00) per occurrence for bodily injury, personal injury, and
property damage, including without limitation, contractual liability. If commercial general
liability insurance or other form with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the work to be performed under this
Agreement, or the general aggregate limit shall be at least twice the required
occurrence limit.
iii. Automobile Liability Coverage. Concessionaire shall
maintain automobile insurance covering bodily injury and property damage for all
activities of the Concessionaire arising out of or in connection with the services to be
performed under this Agreement, including coverage for any owned, hired, non -owned
or rented vehicles, in an amount not less than Two Million Dollars and 00/100 Dollars
($2,000,000.00) combined single limit for each occurrence.
iv. Fire and Extended Coverage. Concessionaire shall maintain
fire and extended coverage insurance, together with insurance against vandalism, theft
and malicious mischief, on the improvements and fixtures, alterations, trade fixtures,
signs, equipment, personal property and inventory on or upon the Premises from loss or
damage to the extent of their full replacement value.
V. Concessionaire shall maintain loss of rent insurance insuring
that the Rent will be paid to City for a period up to six (6) months if the Premises are
destroyed or rendered unusable or inaccessible for commercial purposes by a risk
insured under a special form property coverage policy including vandalism and
malicious mischief endorsements.
(e) Endorsements. Each insurance policy shall be endorsed with the
following specific language:
i. The City, its elected or appointed officers, officials,
employees, agents and volunteers, and the State of California, its elected or appointed
officers, officials, employees, agents and volunteers, are to be covered as additional
insureds, with respect to liability arising out of work performed by or on behalf of the
Concessionaire.
ii. This policy shall be considered primary insurance as
respects to City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or indirectly from
the Concessionaire's operations or services provided to City. Any insurance maintained
by City, including any self- insured retention City may have, shall be considered excess
insurance only and not contributory with the insurance provided hereunder.
iii. This insurance shall act for each insured and additional
insured as though a separate policy had been written for each, except with respect to
the limits of liability of the insuring company.
iv. The insurer waives all rights of subrogation against City, its
elected or appointed officers, officials, employees, agents and volunteers.
V. Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to City, its elected or appointed officers, officials,
employees, agents or volunteers.
vi. The insurance provided by this policy shall not be
suspended, voided, canceled, or reduced in coverage or in limits, by either party except
after thirty (30) calendar days (ten (10) calendar days written notice of non - payment of
premium) written notice has been received by City.
(f) Timely Notice of Claims. Concessionaire shall give City prompt
and timely notice of claim made or suit instituted arising out of or resulting from
Concessionaire's performance under this Agreement.
(g) Additional Insurance. Concessionaire shall also procure and
maintain, at its own cost and expense, any additional kinds of insurance, which in its
own judgment may be necessary for its proper protection and prosecution of the work.
11. DAMAGE OR DESTRUCTION OF PROJECT /PREMISES
11.1 Destruction of Premises. If the Premises are totally or partially destroyed,
rendering the Premises or any portion thereof totally or partially inaccessible or
unusable, Concessionaire shall restore the Premises to substantially the same condition
as immediately prior to such destruction (including all trade fixtures, personal property,
improvements and Alterations as are installed by Concessionaire, which shall be
replaced by Concessionaire at its expense). Concessionaire may elect to terminate this
Agreement by giving notice of such election to City within sixty (60) days after the date
of the occurrence of any casualty if the cost of the restoration exceeds the amount of
any available insurance proceeds, if the damage has been caused by an uninsured
casualty or event, or if Concessionaire reasonably estimates that repairs of the
Premises will take more than six (6) months. Upon such termination, insurance
proceeds applicable to reconstruction of the Project (excluding Concessionaire's
personal property therein) shall be paid to City and Concessionaire shall have no further
liability or obligations under this Agreement.
11.2 Replacement of Concessionaire's Property. In the event of damage or
destruction of improvements located on the Premises not giving rise to
Concessionaire's option to terminate this Agreement, Concessionaire shall, at its own
expense, replace and repair all Concessionaire's trade fixtures, equipment, machinery,
furnishings, furniture and inventory as soon as reasonably possible to permit the prompt
continuation of Concessionaire's business at the Premises.
11.3 Destruction of Project. In the event that all or a portion of the Project is
damaged, and the Premises or a material portion becomes inaccessible or
commercially unusable, and the damage or destruction cannot reasonably be repaired
within twelve (12) months after the date of the casualty, City shall have the right to
either:
(a) Terminate this Agreement by giving to Concessionaire written notice
(which notice shall be given, if at all, within thirty (30) days following the date of the
casualty), in which case this Agreement shall be terminated thirty (30) days following
the date of the casualty; or
(b) Give Concessionaire written notice of City's intention to repair such
damage as soon as reasonably possible at City's expense, in which event this
Agreement shall continue in full force and effect; however, Rent shall be abated in
accordance with the procedures set forth in Section 12. Concessionaire may terminate
this Agreement by giving City written notice at any time prior to the commencement of
repairs if City agrees to repair the Project pursuant to this Section and fails to
commence repairs within one hundred twenty (120) days after giving Concessionaire
written notice of its intention to repair. In such event, this Agreement shall terminate as
of the date of notice from Concessionaire to City, and City shall have no liability under
this Agreement.
12. ABATEMENT OF RENT
12.1 General Rule. In the event of damage or destruction of the Premises or
Damage to the Project that impacts the Premises and this Agreement is not terminated,
Concessionaire shall continue to utilize the Premises for the operation of its business to
the extent it may be practicable and commercially reasonable. Rent shall abate only in
proportion to the area of the Premises that is rendered unusable. The abatement of
Rent shall commence on the date that use of the Premises is impacted and continue
until the completion of those repairs necessary to restore full use of the Premises and
Concessionaire's re- opening of the Premises. Concessionaire's obligation to pay Taxes
pursuant to this Agreement shall not be abated or reduced. Rent shall not abate if the
damage or destruction to the Premises is the result of the negligence or willful conduct
of Concessionaire or its employees, officers or agents. Concessionaire's right to
abatement of Rent is contingent on payment of insurance proceeds, if any, equal to the
amount of Rent pursuant to coverage required by Section 10.3.
12.2 Abatement/Maintenance. Concessionaire shall not be entitled to any
abatement of Rent for Maintenance that occurs during the Maintenance period.
13. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
13.1 Prohibition of Assignment. City and Concessionaire acknowledge that
City is entering into this Agreement in reliance upon the experience and abilities of
Concessionaire. Consequently, Concessionaire shall not voluntarily assign or encumber
its interest in this Agreement or in the Premises, or assign substantially all or any part of
the Premises, or allow any other person or entity (except Concessionaire's authorized
representatives) to occupy or use all or any part of the Premises without the prior written
consent of City, which shall not be unreasonably withheld. City's consent to any
assignment or other transfer is subject to Concessionaire providing City with evidence
reasonably satisfactory to City that the proposed transferee has financial strength and
restaurant or food service experience comparable to Concessionaire and the use of the
Premises by the proposed transferee is consistent with the terms of this Agreement.
Except as otherwise expressly provided herein, any dissolution, merger, consolidation,
reorganization of Concessionaire, or the sale or other transfer resulting in a transfer of a
controlling percentage of the capital stock of Concessionaire, shall be deemed a
voluntary assignment; provided, however, that the sale or transfer of a controlling
percentage of the capital stock of Concessionaire pursuant to a public offering(s) of
equity or debt instruments issued by Concessionaire, or other transfers of publicly
traded capital stock or debt instruments shall not constitute a voluntary assignment and
shall not require City's consent or approval. The phrase "controlling percentage" means
the ownership of, or the right to vote, stock possession of at least fifty percent (50 %) of
the total combined voting power of all classes of Concessionaire's capital stock issued,
outstanding, and entitled to vote for the election of directors, except for ownership of
publicly traded shares, warrants or similar equity interests in Concessionaire traded on
a national exchange or over - the - counter markets.
13.2 Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein, City's consent shall not be required for an assignment or
subletting to an Affiliate, Subsidiary, or Successor of Concessionaire. For purposes
hereof, an "Affiliate ", a "Subsidiary", and a "Successor" of Concessionaire are defined
as follows:
(a) an "Affiliate" is any corporation or other entity which directly or
indirectly controls or is controlled or is under common control with Concessionaire (for
purposes of this Section, "control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of such
corporation or other entity, whether through the ownership of voting securities or by
contract or otherwise);
(b) a "Subsidiary" shall mean any corporation or other entity not less than
twenty -five percent (25 %) of whose outstanding stock shall, at the time, be owned
directly or indirectly by Concessionaire and which is at least as creditworthy as
Concessionaire: and
(c) a "Successor" shall mean a corporation or other entity in which or with
which Concessionaire is merged or consolidated, in accordance with applicable
statutory provisions for merger or consolidation of corporations or a corporation or other
entity acquiring a substantial portion of the property and assets of Concessionaire.
13.3 Continuing Effect. City's consent to any assignment or encumbrance shall
not relieve Concessionaire from its obligations or liabilities under this Agreement nor act
as a waiver of the requirement that such consent be obtained to any subsequent
assignment or encumbrance.
14. DEFAULT
14.1 Default by Concessionaire. The occurrence of any one or more of the
following events shall constitute a default and material breach of this Agreement by
Concessionaire:
(a) The vacating or abandonment of the Premises by Concessionaire;
(b) The failure by Concessionaire to make any payment of Rent or any
other payment required by this Agreement, as and when due, when such failure shall
continue for a period of ten (10) days after written notice of default from City to
Concessionaire;
(c) Except as specified in Subsection 14.1(b), the failure of
Concessionaire to observe or perform any of the material covenants, conditions or
provisions of this Agreement to be observed or performed by Concessionaire where
such failure shall continue for a period of thirty (30) days after written notice thereof from
City to Concessionaire; provided, however, that if the nature of Concessionaire's default
is such that more than thirty (30) days are reasonably required for its cure, then
Concessionaire shall not be deemed to be in default if Concessionaire commences
such cure within said thirty (30) day period and thereafter diligently prosecutes such
cure to completion;
(d) The making by Concessionaire of any general arrangement or
assignment for the benefit of creditors;
(e) Concessionaire becomes a "debtor" as defined in 11 U.S.C.
Section 101 or any successor statute thereto (unless, in the case of a petition filed
against Concessionaire, the same is dismissed within sixty (60) days);
(f) The appointment of a trustee or receiver to take possession of
substantially all of Concessionaire's assets located at the Premises or of
Concessionaire's interest in this Agreement, where such appointment is not discharged
within sixty (60) days; and
(g) The attachment, execution or the judicial seizure of substantially all
of Concessionaire's assets located at the Premises or of Concessionaire's interest in
this Agreement, where such seizure is not discharged within sixty (60) days.
14.2 Remedies.
(a) Cumulative Nature of Remedies. If any default by Concessionaire
shall continue without cure as required by this Agreement, City shall have the remedies
described in this Section in addition to all other rights and remedies provided by law or
equity, to which City may resort cumulatively or in the alternative.
(1) Reentry without Termination. City may reenter the Premises,
and, without terminating this Agreement, re -let all or a portion of the Premises. City
may execute any agreements made under this provision in City's name and shall be
entitled to all rents from the use, operation, or occupancy of the Premises.
Concessionaire shall nevertheless pay to City on the dates specified in this Agreement
the equivalent of all sums required of Concessionaire under this Agreement, plus City's
expenses in conjunction with re- letting, less the proceeds of any re- letting or atonement.
No act by or on behalf of City under this provision shall constitute a Termination of this
Agreement unless City gives Concessionaire specific written notice of Termination.
(2) City may terminate this Agreement by giving Concessionaire
notice of Termination. In the event City terminates this Agreement, City may recover
possession of the Premises (which Concessionaire shall surrender and vacate upon
demand) and remove all Persons and property. City shall be entitled to recover the
following as damages;
(A) The value of any unpaid Rent or other charges that
are unpaid at the time of Termination;
(B) The value of the Rent and other charges that would
have accrued after Termination less the amount of Rent and charges the City received
or could have received through the exercise of reasonable diligence as of the date of
the award;
(C) Any other amount necessary to reasonably
compensate City for the detriment proximately caused by Concessionaire's failure to
perform its obligations under this Agreement; and
(D) At City's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time -to -time by applicable California
law. City shall be entitled to interest at the rate of ten percent (10 %) per annum on all
Rent and other charges from the date due or the date they would have accrued. City
shall also be entitled to an award of the costs and expenses incurred by City in
maintaining or preserving the Premises after default, preparing the Premises for re-
letting, or repairing any damage caused by the act or omission of Concessionaire.
(3) Use of Concessionaire's Personal Property. City may use
Concessionaire's personal property and trade fixtures located on the Premises or any of
such property and fixtures without compensation or liability to Concessionaire for use or
damage. In the alternative City may store the property and fixtures at the cost of
Concessionaire. City shall not operate the Concession in any manner tending to
indicate that the Concession is affiliated with, part of or operated in conjunction with
Concessionaire's business.
(b) City's Right to Cure Concessionaire's Default. Upon continuance of
any material default beyond applicable notice and cure periods, City may, but is not
obligated to, cure the default at Concessionaire's cost. If City pays any money or
performs any act required of, but not paid or performed by, Concessionaire after notice,
the payment and /or the reasonable cost of performance shall be due as additional Rent
not later than five (5) days after service of a written demand accompanied by supporting
documentation. No such payment or act shall constitute a waiver of default or of any
remedy for default or render City liable for any loss or damage resulting from
performance.
15. SUBJECT TO STATE OPERATING AGREEMENT
The Premises are located on property that is the subject of an Operating
Agreement between the State of California to the City. Concessionaire shall not take
any action that would cause the City to be in violation of any provisions of that
Operating Agreement. If the State of California terminates the Operating Agreement,
this Agreement shall terminate as a result and the parties shall be released from all
liabilities and obligations under this Agreement.
16. WASTE OR NUISANCE
Concessionaire shall not commit or permit the commission of any waste on the
Premises. Concessionaire shall not maintain, commit, or permit any nuisance as
defined in Section 3479 of the California Civil Code on the Premises. Concessionaire
shall not use or permit the use of the Premises for any unlawful purpose.
17. NO CONFLICTS OF USE, HAZARDOUS MATERIALS.
City represents and warrants that, to the best of City's knowledge, (i)
Concessionaire's use of the Premises does not conflict with applicable Laws, and City
knows of no reason why Concessionaire would be unable to obtain all required permits,
licenses and approvals from the appropriate governmental authorities; (ii) the Project is
not in violation of any environmental laws, rules or regulations and Concessionaire's
contemplated uses will not cause any such violation; and (iii) the Project is free of any
and all Hazardous Materials as of the date of this Agreement. In the event that the
presence of any Hazardous Materials not caused by Concessionaire is detected at the
Project at any time during the Term of this Agreement and any Option Term all remedial
work shall be performed by City at City's expense. Concessionaire's obligation to open
shall be delayed until the remedial work is completed if the remedial work is performed
prior to Concessionaire opening for business. Concessionaire's obligation to pay Rent
shall be abated in direct proportion to the extent Concessionaire is unable to conduct its
business upon the Premises as a result of any remedial work that is performed
subsequent to Concessionaire opening for business. Concessionaire shall have the
right (but not the obligation) to terminate this Agreement, upon thirty (30) days advance
written notice to City in the event that Hazardous Materials are detected at the Project
and the presence or the remediation materially affects Concessionaire's ability to
conduct its business in the Premises. "Hazardous Materials" shall mean any oil,
flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, or
other hazardous, toxic, contaminated or polluting materials, substances or wastes,
including, without limitation, any "hazardous substances ", "hazardous wastes ",
"hazardous materials" or "toxic substances" under applicable federal, state and local
laws, ordinances and regulations.
18. CITY'S DEFAULTS /CONCESSIONAIRE'S REMEDIES.
City shall be in default if it fails to perform, or commence performance if the
obligation requires more than ten (10) days to complete, any material obligation within
ten (10) days after receipt of written notice by Concessionaire to City specifying the
nature of such default. City shall also be in default if it commences performance within
ten (10) days but fails to diligently complete performance. In the event of City's default,
Concessionaire may:
(a) Upon five (5) days notice to City, cure any such default, and City shall
reimburse Concessionaire the amount of all costs and expenses incurred by
Concessionaire in curing the default, together with interest and expenses at the
maximum rate then allowed by law; or
(b) Terminate this Agreement if City's default materially interferes with
Concessionaire's use of the Premises for its intended purpose and City fails to cure
such default within ten (10) days after a second demand by Concessionaire in which
case Concessionaire shall have no further or continuing obligations.
19. EVENT OF BANKRUPTCY
(a) If this Agreement is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. or any similar or
successor statute ( "Bankruptcy Code "), any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be paid
or delivered to City, shall be and remain the exclusive property of City and shall not
constitute property of Concessionaire or of the estate of Concessionaire within the
meaning of the Bankruptcy Code. Any and all monies or other consideration
constituting City's property under this Section not paid or delivered to City shall be held
in trust for the benefit of City and be promptly paid or delivered to City.
(b) Any person or entity to which this Agreement is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to have
assumed all of the obligations arising under this Agreement on and after the date of
such assignment, including the obligation to operate the business which Concessionaire
is required to operate under this Agreement.
20. NOTICES.
Any notice, demand, request, consent, approval or communication that either
party desires or is required to give shall be in writing and shall be deemed given three
(3) days after deposit into the United States registered mail, postage prepaid, by
registered or certified mail, return receipt requested. Unless notice of a different
address has been given in accordance with this Section, all notices shall be addressed
as follows:
If to City, to: CITY OF NEWPORT BEACH
Attn: City Manager's Office
3300 Newport Boulevard
Newport Beach, CA 92658
(949) 644 -3141
If to Concessionaire, to: Michael C. Cho, Esq.
Bernard & Associates
3991 MacArthur Blvd.
Suite 340
Newport Beach, CA 92660
21. SURRENDER OF PREMISES
At the Expiration or earlier Termination of this Agreement, Concessionaire shall
surrender to City the possession of the Premises. Concessionaire shall leave the
surrendered Premises, required personal property and fixtures, in good and broom -
clean condition, reasonable wear and tear excepted. All property that Concessionaire is
not required to surrender, but that Concessionaire does abandon shall, at City's
election, become City's property at Expiration or Termination.
22. COMPLIANCE WITH ALL LAWS
Concessionaire shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including federal,
state, county or municipal, whether now in force or hereinafter enacted. In addition, all
work prepared by Concessionaire shall conform to applicable City, county, state and
federal laws, rules, regulations and permit requirements and be subject to approval of
the City Manager and the City.
23. WAIVERS
The waiver by either party of any breach or violation of any term, covenant or
condition of this Agreement, or of any ordinance, law or regulation, shall not be deemed
to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of
any subsequent breach or violation of the same or other term, covenant, condition,
ordinance, law or regulation. The subsequent acceptance by either party of any fee,
performance, or other consideration which may become due or owing under this
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,
ordinance or regulation.
24. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of this
Agreement shall continue in full force and effect.
25. APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the State of
California in effect at the time of the execution of this Agreement. Any action brought
relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the
County of Orange.
26. ENTIRE AGREEMENT: AMENDMENTS
25.1 The terms and conditions of this Agreement, all exhibits attached, and all
documents expressly incorporated by reference, represent the entire agreement of the
parties with respect to the subject matter of this Agreement.
25.2 This Agreement shall supersede any and all prior agreements, oral or
written, regarding the subject matter between Concessionaire and City.
25.3 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.
25.4 The terms and conditions of this Agreement shall not be altered or
modified except by a written amendment to this Agreement signed by Concessionaire
and City.
25.5 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.
25.6 Any obligation of the parties relating to monies owed, as well as those
provisions relating to limitations on liability and actions, shall survive termination or
expiration of this Agreement.
25.7 Each party has relied on its own inspection of the Premises and
examination of this Agreement, the counsel of its own advisors, and the warranties,
representations, and covenants in this Agreement. The failure or refusal of either party
to inspect the Premises, to read this Agreement or other documents, or to obtain legal
or other advice relevant to this transaction constitutes a waiver of any objection,
contention, or claim that might have been based on such reading, inspection, or advice.
27. TIME IS OF THE ESSENCE
Time is of the essence for this Agreement.
28. SUCCESSORS
Subject to the provisions of this Agreement on assignment and subletting, each
and all of the covenants and conditions of this Agreement shall be binding on and shall
inure to the benefit of the heirs, successors, executors, administrators, assigns, and
personal representatives of the respective parties.
29. INTERPRETATION
The terms of this Agreement shall be construed in accordance with the meaning
of the language used and shall not be construed for or against either party by reason of
the authorship of this Agreement or any other rule of construction which might otherwise
apply.
30. TABLE OF CONTENTS: HEADINGS
The table of contents of this Agreement and the captions of the various sections
of this Agreement are for convenience and ease of reference only and do not define,
limit, augment, or describe the scope, content, or intent of this Agreement.
31. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes
the feminine and neuter, and the feminine includes the neuter, and each includes
corporation, partnership, or other legal entity whenever the context requires. The
singular number includes the plural whenever the context so requires.
32. EXHIBITS
All exhibits to which reference is made in this Agreement are incorporated by
reference. Any reference to "this Agreement" includes matters incorporated by
reference.
33. CITY BUSINESS LICENSE
Concessionaire shall obtain and maintain during the duration of this Agreement,
a City business license as required by the Newport Beach Municipal Code.
34. COSTS AND ATTORNEYS FEES
The prevailing party in any action brought to enforce the terms and conditions of
this Agreement, or arising out of the performance of this Agreement, shall not be
entitled to recover its attorneys' fees.
35. NONDISCRIMINATION
Concessionaire, for itself and its successors, agrees that in the performance
under this Agreement, Concessionaire shall not discriminate against any person
because of the marital status or ancestry of that person or any characteristic listed or
defined in Section 11135 of the Government Code.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
CITY OF NEWPORT BEACH ( "City"),
a Municipal Corporation
By:
Nancy Gardner, Mayor of Newport Beach
ATTEST:
Leilani Brown
City Clerk
( "Concessionaire ")
By:
Its:
By..
Its:
APPROVED AS TO FORM:
Aaron Harp
City Attorney
EXHIBIT "A„
A ZaCCU�Aloz CF�
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No.
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FLOOR PLAN
Beach Umbrellas
Beach Chairs
EXHIBIT "B"
BEACH RENTALS
BREAKFAST
TWO EGG BREAKFAST ...................$5.99 THE SCRAMBLE ........................$5.99
Served with your choice of three, stripes of bacon or 5 pcs of
Portuguese sausage, red potatoes or brown rice and toast. Portuguese Portuguese sausage and eggs scrambled with
brown rice.
EARLY RISER .......................... $3.99 Hearty Bacon, sausage, ham, cheddar cheese,
Toasted sourdough bread, fried egg, bacon, mayo and melted onions and eggs scrambled with red
American cheese. potatoes.
BREAKFAST BURRITO ................... $4.99 Veggie Bell peppers, mushrooms, onions, diced
tomatoes and eggs scrambled with red
Scrambled eggs, hash browns, shredded cheddar cheese, bacon or potatoes.
sausage, wrapped in a large flour tortilla.
HUEVOS RANCHEROS .....................$5.99 SIDES
Two eggs, black beans, cheddar cheese, hot sauce, red potatoes,
avocado and corn tortilla. rBrown pcs beacon or 5 pcs Portuguese sausage.. $2.50
BREAKFAST TACOS .................. $5.25 rice or red potatoes.............. $1.99
Scrambled eggs, bacon, cheddar cheese, hot sauce, avocado
and corn tortillas. �� ) oast ............................. $1.25
TEXAS TOAST ..................... ;
Three slices of Texas toast grilled golden brown,.tnish
powdered sugar, butter, and maple syrup.
TEXAS TOAST COMBO ......... U.� ..� .. J ./$6.49
One slice of Texas toast, one egg and two stripes of\acot�� our pcs
of Portuguese sausage.
ADDITIONS
Egg whites ......................... $1.00
Avocado . ..........................$1.00
COFFEE DRINKS
COFFEE .... ..........................$2.00
.SINGLE DOUBLE
ESPRESSO ......................$1.75 $2.25
CAPPUCCINO .................... $2.50 $3.00
HOT TEA ... ..........................$1.75
SINGLE DOUBLE
LATTE ......................... $2.75 . $3.25
MEXICAN MOCHA ................ $3.25 . $3.75
MEXICAN HOT COCOA ................... $2.75
Breakfast Served all day. 96.3% of our produce comes from local farmers market. All plates made to order; patience, grasshopper, patience.
BUILD IT ............................... $5.99
MEAT Turkey, Ham, Roast Beef, pastrami.
CHEESE Provolone, Cheddar, Swiss, American.
BREAD Sourdough, Squaw, French Roll, Wheat,
Ciabatta, Rye.
HOT PASTRAMI ..........................$6.49
Pastrami, Swiss cheese, pickles and mustard on Rye.
TUNA SANDWICH ......................... $5.99
Albacore tuna, lettuce, tomato and red onion on Squaw.
BLTA ........ ..........................$6.49
Bacon, lettuce tomato and avocado on toasted Sourdough.
MEATBALL SANDWICH .................. 6:49
Two ground beef meatballs, melted pepper jack, onions, maiin ra a\;auce /1
on a toasted French Roll. �� 1
THE RANDOLPH ...............
Turkey, bacon, lettuce tomato and avocado onICiabatta
SALADS
COBB SALAD ................... \... !... $8.49
Romaine and iceberg lettuee,diced grilled chicken, cr�bled blue cheese,
bacon, egg, avocado and tomato
CHICKEN CAESAR SALAD .................. $6.95
Romaine and iceberg lettuce, grilled chicken, croutons and shredded
parmesan cheese
FRENCH DIP ........................... $6.49
Roast Beef, sauteed mushrooms and onions, melted swiss
and Au Jus
> WICH ......................$6.49
peppers, onions and eggplant with a goat
toasted Squaw
SE ... ...................$3.99
grilled Sourdough
T .. ..........................$6.49
a and cheddar cheese on Sourdough
GRIIY;ED CHICKEN WRAP ................. $6.99
Chicken breast, red onions, bell peppers, lettuce, tomato, avocado, and
cheddar cheese.
SIDES ...... ..........................$2.50
ASIAN SLAW SALAD
RED POTATO SALAD
TORTELLINI PASTA SALAD
WITH SANDWICH ....................... $1.50
COLD DRINKS
SODA POP/ ICED TEA ................... $1.75
O. J. / MILK .................... $1.75 / $2.50
BOTTLE WATER ........................ $1.50
BOTTLE JUICE ......................... $1.50
SUMMER SALAD .........................$7.95 BEER ................................ $3.50
Mixed greens, tomatoes, shredded carrots, and avocado served with
brown rice and homemade tahini dressing Add grilled chicken. $2.00 MIMOSA .............................. $6.50
cup sow],
SOUP OF THE DAY ..................$3.49. $4.25
96.3% of our produce comes from local farmers market. All plates made to order; patience, grasshopper, patience.
Beach Umbrellas
Beach Chairs
Agenda Item No. 12
EXHIBIT "B" March 13, 2012
BEACH RENTALS
BREAKFAST
TWO EGG BREAKFAST ................... $5.99
Served with your choice of three stripes of bacon or 5 pcs of
Portuguese sausage, red potatoes or brown rice and toast.
EARLY RISER .......................... $3.99
Toasted sourdough bread, fried egg, bacon, mayo and melted
American cheese.
THE SCRAMBLE ........................$5.99
Portuguese
BREAKFAST BURRITO ................... $4.99 F� i
Scrambled eggs, hash browns, shredded cheddar cheese, bacon or 'r \
sausage, wrapped in a large flour tortilla.
COFFEE .... ..........................$2.00
SINGLE DOUBLE
ESPRESSO ......................$1.75 $2.25
CAPPUCCINO .................... $2.50 $3.00
HOT TEA ... ..........................$1.75
Portuguese sausage and eggs scrambled with
brown rice.
Bacon, sausage, ham, cheddar cheese,
onions and eggs scrambled with red
potatoes.
Bell peppers, mushrooms, onions, diced
tomatoes and eggs scrambled with red
potatoes.
beacon or 5 pcs Portuguese sausage.. $2.50
rown rice or red potatoes .............. $1.99
oast ... ..........................$1.25
TIONS
gg whites ......................... $1.00
vocado . ..........................$1.00
SINGLE DOUBLE:
LATTE ......................... $2.75. $3.25
MEXICAN MOCHA ................ $3.25. $3.75
MEXICAN HOT COCOA ................... $2.75
Breakfast Served all day. 96.3% of our produce comes from local farmers market. All plates made to order; patience, grasshopper, patience.
LUNCH
BUILD IT ..... ..........................$5.99
MEAT Turkev, Ham, Roast Beef, pastrami.
CHEESE Provolone, Cheddar, Swiss, Amencan.
BREAD Sourdough, Squaw, French Roll, Wheat,
Ciabatta, Rye,
HOT PASTRAMI ..........................$6.49
Pastrami, Swiss cheese, pickles and mustard on Rye.
TUNA SANDWICH ......................... $5.99
Albacore tuna, lettuce, tomato and red onion on Squaw.
BLTA ........ ..........................$6.49
Bacon, lettuce tomato and avocado on toasted Sourdough
MEATBALL SANDWICH .. ............$6 49
Two ground beef meatballs, melted pepper jack, onions, marrpara �^+'a uce
on a toasted French Roll. % .'� 1 /
THE RANDOLPH .............. �� ,- $6:99.
Turkev, bacon, lettuce tomato and avocado on C'iabatt -I �`3
SALADS(
\`/)
COBB SALAD ................ ..,d f . $8.49
Romaine and iceberg lettuce,diced grilled chicken, crumbled blue cheese,
bacon, egg, avocado and tomato
CHICKEN CAESAR SALAD .................. $6.95
Romaine and iceberg lettuce, grilled chicken, croutons and shredded
parmesan cheese
FRENCH DIP . ..........................$6.49
Roast Beef, sauteed mushrooms and onions, melted swiss
and Au Jus
)WICH ......................$6.49
peppers, onions and eggplant with a goat
toasted Squaw
SE ... ...................$3.99
grilled Sourdough
iELT .. ..........................$6.49
tuna and cheddar cheese on Sourdough
6RII)L'ED CHICKEN WRAP ................. $6.99
..eken breast, red onions, bell peppers, lettuce, tomato, avocado, and
cheddar cheese.
SIDES ...... ..........................$2.50
ASIAN SLAW SALAD
RED POTATO SALAD
TORTELLINI PASTA SALAD
WITH SANDWICH ............ . .... . ..... $1.50
COLD DRINKS
SODA POP/ ICED TEA ................... $1.75
O. J. / MILK .................... $1.75 / $2.50
BOTTLE WATER ........................$1.50
BOTTLE JUICE .........................$1.50
SUMMER SALAD .........................$7.95 BEER ...... ..........................$3.50
Mixed greens, tomatoes, shredded carrots, and avocado served with
brown rice and homemade tahini dressing Add grilled chicken. $2.00 MIMOSA .............................. $6.50
('UF ae I.
SOUP OF THE DAY ..................$3.49. $4.25
96.3% of our produce comes from local farmers market. All plates made to order; patience, grasshopper, patience.