HomeMy WebLinkAbout93-48 - Lease of Beacon BayRESOLUTION NO. 93 -48
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH APPROVING A LEASE FOR THE REAL PROPERTY COMMONLY
REFERRED TO AS BEACON BAY.
WHEREAS, the City of Newport Beach by virtue of a 1978 legislative grant
found in Chapter 74 of the Statues of 1978 (the 'Beacon Bay Bill "), hold the right, title
• and interest to certain tidelands and uplands commonly known as Beacon Bay; and
WHEREAS, the Beacon Bay Bill frees the westerly portion of the filled
tidelands from the public trust and specifically authorizes the lease of the property for
residential purposes subject to certain expressed statutory conditions; and
WHEREAS, Beacon Bay including the "westerly portion" thereof, has been
divided into individual lots, with each lot leased by the City for residential purposes
until June 30, 2006; and
WHEREAS, on November 3, 1987 a majority of electors of the City approved a
measure which authorized the City Council to enter into new leases of residential lots
in Beacon Bay for a period not to exceed fifty years; and
WHEREAS, on November 3, 1992 a majority of electors of the City approved
Measure M which authorized the City Council to lease tidelands and waterfront
property consistent with the provisions of state law; and
WHEREAS, the City Council pursuant to the authority conferred by the
electors entered into negotiations with current lessees, and the parties have agreed on
the terms and conditions of a new lease with a fifty (50) year term, provision for
adjustments in lease payments to reflect changes in the value of Beacon Bay
leaseholds, and a recalculation of lease payments in the event of a transfer of the
lease by the current lessee or any subsequent lessee (as defined therein); and
WHEREAS, the Beacon Bay Community Association has approved the form
and content of the proposed lease,
NOW THEREFORE BE IT RESOLVED by the City Council of the City of
Newport Beach that the lease attached hereto and made a part hereof is hereby
approved subject to minor technical revisions as may be necessary and subject to
approval by the State Lands Commission.
BE IT FURTHER RESOLVED that the Mayor and City Clerk are authorized
to execute leases in the form of that attached hereto with each of the individual
leaseholders in Beacon Bay.
ADOPTED this 28th date of June 1993.
ATTEST:
• C..
CITYCLERK
C0
•
Charter
LEASE
THIS LEASE, made and entered into on this _ day of
19_, by and between the CITY OF NEWPORT BEACH, a
City and municipal corporation, ( "Lessor ") and
( "Lessee ") regards the real property commonly referred to as Beacon
Bay Lot This Lease is made in the context of the following:
RECITALS
A. The City of Newport Beach, by virtue of a 1978
legislative grant found in Chapter 74 of the Statutes of 1978 (the
"Beacon Bay Bill ") , holds the right, title and interest to certain
tidelands and uplands commonly known as Beacon Bay and generally
described in Exhibit "A."
B. The Beacon Bay Bill frees the "Westerly
portion" of the filled tidelands from the public trust and
specifically authorizes the lease of the property for residential
purposes subject to certain express statutory conditions.
C. The "Westerly Portion" of Beacon Bay has been
divided into individual lots, with each lot leased by the City for
3,,iY )) aooG
residential purposes until 9a a 3�, 290�r
D. On November 3, 1987, a majority of electors of
the City approved a measure which authorized the City Council to
enter into new leases of residential lots in Beacon Bay for a
period not to exceed fifty (50) years.
E. On November 3, 1992, a majority of electors of
the City approved Measure M which authorized the City Council to
lease tidelands and waterfront property consistent with the
provisions of state law.
1
0
L
F. The City Council, pursuant to the authority
conferred by the electors, entered into negotiations with current
lessees and the parties have agreed on the terms and conditions of
a new lease with a fifty (50) year term, provision for adjustments
in lease payments to reflect changes in the value of Beacon Bay
leaseholds, and a recalculation of lease payments in the event of •
a transfer of the Lease by the Current Lessee or any Subsequent
Lessee.
G. Lessee acknowledges that the terms and
conditions of this Lease may result in Lessee paying substantially
more or less than another Lessee for similar property depending
upon the date this Lease is executed, the date of any subsequent
transfer, and the consideration paid for transfers of similarly
situated property.
H. Lessee acknowledges that accurate and complete
reporting to the City of all consideration paid for the transfer of
this Lease is vitally important in that failure to fully report all
consideration could dramatically reduce the amount of rent received
by the City from other Beacon Bay Lessees.
I. Lessor and Lessee acknowledge that the City has
agreed to a fifty (50) year term and limited lease payment
increases in consideration of provisions which require payment of
rent approximating fair market rental value, without regard to any
advantage maintained by Current Lessees, upon transfer by Current
Lessees and payment of deferred rent in the event the Lease is not
signed on or before the "Effective Date".
J. The State Lands Commission has reviewed the
form of this Lease and determined that it is in conformance with is
the provisions of relevant statutes, rules and regulations,
including, without limitation, the Beacon Bay Bill.
E
0
K. Lessor has determined that this Lease is
consistent with provisions of the Beacon Bay Bill, the Charter,
General Plan and Zoning Ordinance of the City of Newport Beach, and
to all other applicable state and local laws.
• L. Lessor has determined it is in the best
interests of the citizens of Newport Beach to maintain the
residential character of that portion of Beacon Bay currently
leased for residential purposes and to enter into new leases with
Current Lessees under the terms and conditions specified in this
document.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING
RECITALS AND THE COVENANTS IN THIS LEASE, THE PARTIES AGREE AS
FOLLOWS:
1. LEASED LAND.
Lessor hereby leases to Lessee the real property
commonly known as Beacon Bay Lot , the ( "Leased Land ") which
is more particularly described in Exhibit "B," and generally
depicted on Exhibit "A," subject to the limitations on use
specified in Paragraph 6. As used in this Lease, the term
"Premises" shall refer to the Leased Land and any improvements
constructed thereon.
Lessor expressly reserves all oil, oil rights, gas,
minerals, mineral rights, natural gas rights and other hydrocarbon
substances in and under the Leased Land and the right to grant and
transfer the same, together with all necessary and convenient
rights to explore for, develop, produce and extract and take the
same, subject to the express limitation that any and all operations
for the exploration, development, production, extraction and taking
. of any such substance shall be carried on at levels below the depth
of five hundred feet (5001) from the surface of the land by means
of wells, derricks and other equipment from surface locations on
adjoining or neighboring land and subject further to all
3
0 0
restrictions and regulations concerning the drilling for, and
production of, oil, gas, minerals, petroleum and other hydrocarbon
substances specified in the Newport Beach City Charter or the
Newport Beach Municipal Code.
2. TERM. •
The term of this Lease shall commence on the date of
execution, but in no event prior to
expire
termination as specified in Paragraph
and shall
, subject to earlier
3. RENTAL.
A. Definitions. For the purposes of this Lease,
the following terms shall be defined as specified in this
paragraph. In certain cases, the definition of the term contains
operative language that affects the rights of the parties:
(1) The term "Effective Date" shall mean the
day of
_
_ ,
19�
(2)
The term
"Execution Date" shall mean the
date when this Lease is executed by Lessee.
(3) The term "Current Lessee" shall mean the
7-0N E aq I9q.3
person or persons who, as of was the Lessee
under the Pre - existing Lease.
(4) The term "Pre- existing Lease" shall mean
the Lease for the leased premises which was effective on January 1,
Johle 3Ci� oi00�
1988, and would, absent this Lease, expire
(5) The term "Initial Rent" shall mean the
fair market rental value of the leased premises as determined by
the appraisal of George Hamilton Jones, with due consideration to
the leasehold advantage created by the Pre - existing Lease, all as
shown on Exhibit "C."
(6) The term "Actual Sales Value" shall mean is
the total of all consideration paid for the non - exempt transfer of
this Lease or the Pre - existing Lease from the Current Lessee, or
Subsequent Lessee, to another person.
4
0 0
(7) The term "Average Actual Sales Value Rent"
shall mean two and one -half percent (2 -1/2%) of the mean of the
Actual Sales Value of the non - exempt transfer of this Lease or the
Pre - existing Lease of similarly situated (waterfront or interior)
Beacon Bay parcels as specified in this subparagraph. Average
Actual Sales Value Rent shall be the mean of the Actual Sales Value
of the three similarly situated parcels most recently transferred.
If only one or two parcels have transferred during the preceding
seven years, that one transfer, or those two transfers, shall be
used to calculate the mean. In the event no similarly situated
parcel has transferred within the previous seven years, the mean
shall be the Actual Sales Value of the most recent transfer.
Exempt transfers as defined in paragraph (B)3 shall not be used to
calculate Average Actual Sales Value rent.
(8) The term "Deferred Rent" shall mean the
total rent that a Current Lessee would have paid had this Lease
been executed on the Effective Date, through and including the date
on which this Lease was first executed, less the rent actually paid
pursuant to the Pre - existing Lease, together with interest at the
rate of eight percent (8%) per annum calculated on the balance due
at the end of each Lease Year or portion thereof.
(9) The term "transferred" shall mean any
sale, assignment, sublease or other transaction pursuant to which
the right to possession of the premises and the right to sign a new
lease identical to this Lease is transferred to another person.
(10) The term "person" shall mean any natural
person or natural person(s) and does not include any corporation,
association, or business entity in any form except a financial
institution acting in the capacity of a lender.
B. Rental Payments.
0 Lessee shall pay annual rent in the sum of
($ ), payable at the rate of
($ ) per month. Lessee shall
also pay, if applicable, deferred rent in the sum of
5
0 0
($ ) upon execution of this
Lease. Rent shall /shall not (circle one) be adjusted every seven
(7) years after the date of transfer in accordance with the
provisions of subparagraph B.(4). Annual rent, deferred rent, and
periodic adjustments are based upon the following:
(1) Execution Before Effective Date. •
In the event this Lease is fully executed
on or before the Effective Date, Rent shall be paid as follows:
(a) Current Lessee: Current Lessee shall
pay annual rent equal to Initial Rent as specified in Exhibit "C."
Thereafter, so long as the Current Lessee remains in possession and
there has been no transfer of this Lease, rent shall remain as
specified in this subparagraph notwithstanding the provisions of
subparagraph B.4.
(b) In the event of any transfer of this
Lease to a Subsequent Lessee, the Subsequent Lessee shall pay
annual rent equal to two and one -half percent (2 -1/2 %) of Actual
Sales Value determined as of the date of the transfer in accordance
with the provisions of subparagraph A(7). Thereafter, rent shall
be adjusted every seven years after the date of the transfer in
accordance with the provisions of subparagraph B.4.
2. Execution After the Effective Date:
In the event this Lease is first executed
after the Effective Date, rent shall be determined and paid as
follows:
(a) Current Lessee /Within Five Years
After Effective Date: In the event this Lease is executed by the
Current Lessee within five (5) years after the Effective Date, the
Current Lessee shall pay annual rent equal to Initial Rent plus a
sum calculated by multiplying the difference between Initial Rent
and Average Actual Sales Value Rent by a fraction equal to the is
number of months between the Effective Date and Execution Date,
divided by sixty. The Current Lessee shall also pay all deferred
rent concurrent with the execution of this Lease. Thereafter, so
6
0 0
long as Current Lessee remains in possession and there has been no
transfer of this Lease, rent shall remain as specified in this
subparagraph, notwithstanding the provisions of subparagraph B(4).
(b) Current Lessee /More Than Five Years
After Effective Date: In the event this Lease is executed by the
• Current Lessee more than five (5) years after the Effective Date,
the Current Lessee shall pay annual rent equal to Average Actual
Sales Value Rent calculated as of the date of execution in
accordance with the provisions of subsection A(7). The Current
Lessee shall also pay all deferred rent concurrent with the
execution of this Lease. Thereafter, rent shall be adjusted every
seven (7) years after the date of execution in accordance with the
provisions of subparagraph B.4.
(c) Subsequent Lessee: In the event the
Current Lessee signs this Lease after the Effective Date and
transfers this Lease to any Subsequent Lessee, or the Current
Lessee transfers the Pre- existing Lease to a Subsequent Lessee who
wishes to sign this Lease after the Effective Date, the Subsequent
Lessee shall pay annual rent equal to two and one -half percent (2-
1/2&) of Actual Sales Value determined as of the date of execution
and in accordance with subparagraph A(7). The Subsequent Lessee
shall also pay all deferred rent concurrent with the execution of
this Lease. The annual rent shall be adjusted every seven (7)
years following the Execution Date in accordance with the
provisions of subparagraph B.4.
3. Exempt Transfers.
The provisions of this subsection 3.B
regarding transfers shall not operate to increase rent if:
(a) Lessee is assigning an interest in
this Lease to a trustee under a deed of trust for the benefit of a
. lender;
(b) the transfer is caused by the death
of a spouse and the full interest of the deceased spouse is
transferred to a surviving spouse;
rA
0 0
(c) the transfer or assignment is by a
bona fide lender acquiring title by foreclosure or deed in lieu of
foreclosure of a trust deed; or
(d) the transfer is a sublease of the
premises for one year or less, provided, however, a sublease of the
premises for one year or less shall not be considered an exempt •
transfer if there is a second or successive sublease of the
premises regardless of duration;
(e) the transfer is caused by the
dissolution of the marriage of Lessee and the full interest of one
of the spouses is transferred to the other spouse;
(f) the transfer is to an inter vivos
trust, living trust or other similar estate planning arrangement of
Lessee; provided, however, that the provisions of subsection 3.0
shall apply upon the death of such Lessee if the beneficiary of
such trust or other arrangement is other than the surviving spouse;
or
(g) the transfer is to a guardian or
custodian of Lessee appointed due to the physical or mental
incapacity of Lessee provided, however, that the provisions of
subsection 3.0 shall apply upon the death of such Lessee.
4. Rent Adjustments.
Except as provided in subparagraphs
B(1) (a) and B(2)(a), on the seventh (7th) anniversary of the
Execution Date of this Lease, or the date of any transfer of this
Lease by any Current or Subsequent Lessee, rent shall be adjusted
to reflect the then current Average Actual Sales Value Rent.
However, in no event shall rent be adjusted above a sum equal to
the rent paid by Lessee as of the Execution Date increased at the
rate of five percent (5 %) per annum (compounded annually), and in
no event shall rent be adjusted below a sum equal to the rent paid
on the Execution Date reduced by five percent (5 %) per annum.
Lessor shall endeavor to notify Lessee of rental adjustments at
least forty -five (45) days prior to the end of each seventh (7th)
U
0
lease year; provided, however, failure of Lessor to give forty -five
(45) days' notice does not relieve Lessee from the obligation to
pay increased rent or the right to pay less rent in the event of a
decrease in the Average Actual Sales Value Rent; and, provided
further, that Lessee shall have no obligation to pay rent increases
which apply to any period greater than ninety (90) days prior to
•
the receipt by Lessee of Lessor's notice of an increase in rent.
5. Installment Payments /Grace Period:
Lessee shall pay rent in equal monthly
installments, with payment due on or before the first day of the
month preceding the month for which rent is paid. Rent shall be
prorated during any month when a transaction which increases rent
becomes effective other than the first day of that month. No late
payment charge applies to payments received by Lessor on or before
5:00 P.M. on the fifteenth (15th) day of the month for which the
payment is made ( "Grace Period "). If a rent payment, or any
portion thereof, is received by Lessor after expiration of the
Grace Period, Lessee shall pay Lessor a late payment charge equal
to four percent (4$) of each late payment, or portion thereof.
Rent payments shall be payable to the City of Newport Beach and
sent, or delivered, to the Finance Director at the address
specified for service of notices. Rent shall be payable by Lessee
to Lessor in such coin or currency to the United States as at the
time of payment is legal tender for public and private debts.
Lessor and Lessee agree that late charges specified in this
Paragraph represent a fair and reasonable estimate of the cost
Lessor will incur by reason of any late payment by Lessee. Any
late or missed payment of rent constitutes a default pursuant to
Lessor to do so for that or any other late or missed payment.
paragraph 13 of this
Lease. Any failure by Lessor
to declare a
default and initiate
termination of the Lease due
to a late or
•
missed payment shall
not be considered a waiver of
the right of
Lessor to do so for that or any other late or missed payment.
0 0
4. TRANSFER.
Lessee may transfer this Lease subject to the prior
written consent of Lessor. Lessor shall not unreasonably withhold
or delay its consent to transfer. Lessor shall consent to any
transfer when Lessee and the proposed Lessee have complied with the
following: •
(a) Lessee shall furnish Lessor with executed
copies of each and every document used to effect the transfer.
(b) Lessee shall pay to Lessor a transfer fee of
one hundred dollars ($100.00);
(c) Lessee shall execute a "Termination of
Leasehold Interest" for recordation;
(d) The new Lessee shall execute a new lease and
execute a "Memorandum of Lease" for recordation.
(e) The parties to any non - exempt transfer of this
Lease shall provide Lessor with all information relevant to a
determination of the total consideration paid for the transfer.
Lessee and the prospective Lessee shall provide this information
within ten (10) days after they reach agreement regarding total
consideration to be paid for the transfer of this Lease. Lessor
shall have the right, at its sole discretion, to commission an
appraisal of the fair market value of this Lease and improvements
thereon as of the date of transfer and the value as determined by
the appraiser shall be deemed the Actual Sales Value for purposes
of calculating Average Actual Sales Value Rent and rental payments.
* *ttt*
(OLD PARAG. TO BE MOVED SOMEWHERE ?) (e) Lessee and the
prospective Lessee shall furnish Lessor with a statement of the
total consideration paid for the transfer as well as all documents
which are relevant to the total consideration paid for the
transfer.
10
•
Lessor's consent is not required for the "exempt
transfers" referenced in subparagraph 3.B(3), provided, however,
Lessee shall furnish Lessor with copies of all documents used to
effect any exempt transfer.
• 5. ENCUMBRANCES.
A. Right to Encumber.
Lessee may encumber this Lease by deed of
trust, mortgage, or similar instrument, in favor of any
institutional lender regulated by state or federal law ( "Lender ")
for any purpose without the consent of Lessor. Neither Lessee nor
Lessor shall have the power to encumber Lessor's interest in the
premises. Any encumbrance shall be subject to all covenants,
conditions and restrictions in this Lease and to all rights and
interests of Lessor except as otherwise expressly provided in this
Lease. Lessee shall give Lessor prior written notice of any
encumbrance as well as a copy of all documents evidencing the
encumbrance.
B. Notice to Lender.
Lessor shall have no obligation to give any
Lender any written notice pursuant to this Lease unless the Lender
has given Lessor written notice of its name, address, and nature of
encumbrance ( "Complying Lender ") . Lessor shall give all Complying
Lenders a copy of any written notice of default, notice of
termination or other notice which may affect Lessee's rights under
this Lease. Notice shall be deemed given by Lessor to Lender when
deposited in the United States mail, first class postage pre -paid,
and sent to Lender at the address furnished in writing by Lender.
C. Modification.
Lessor and Lessee agree that they will not
modify this Lease by mutual agreement without the prior written
• consent of Lender.
D. Rights of Lender.
Any Lender with an encumbrance on this Lease
shall have the right, during the term of the Lease, to:
11
• •
(1) perform any act required of Lessee
pursuant to this Lease;
(2) transfer this Lease to the purchaser at
any foreclosure sale, the assignee in the event of an assignment in
lieu of foreclosure, or to acquire the interest of Lessee pursuant
to foreclosure or assignment and thereafter transfer this Lease to •
the Lender's successor.
Lender shall have no right to transfer this
Lease unless and until Lender has cured all defaults requiring the
payment or expenditure of money by Lessee.
E. Right of Lender to Cure Default.
Lessor shall give written notice of any default
or breach of this Lease by Lessee to Lender and afford Lender the
opportunity, after notice, to:
(1) cure the breach or default within ten (10)
days after expiration of the time period granted to Lessee for
curing the default if the default can be cured by payment of money;
(2) cure the breach or default within ten (10)
days after expiration of the time period granted to Lessee for
curing the default when the breach or default can be cured within
that period of time; or
(3) cure the breach or default in a reasonable
time when something other than money is required to cure the breach
or default and cannot be performed within ten (10) days after
expiration of the time period granted to Lessee for curing the
default, provided, the acts necessary to cure the breach are
commenced within ten (10) days and thereafter diligently pursued to
completion by Lender.
F. Foreclosure in Lieu of Cure.
Lender may forestall termination of this Lease .
or a default or breach by Lessee by commencing foreclosure
proceedings subject to strict compliance with the following:
(1) proceedings are commenced within thirty
12
• •
(30) days after service on Lender of the notice describing the
breach or default;
(2) the proceedings are diligently pursued to
completion in the manner authorized by law; and
(3) Lender perform all of the terms, covenants
and conditions of this Lease requiring the payment or expenditure
of money by Lessee until the proceedings are complete or are
discharged by redemption, satisfaction, payment or conveyance of
this Lease to Lender.
G. New Lease.
Notwithstanding any other provision of this
Lease, should this Lease terminate because of any default or breach
by Lessee, Lessor shall enter into a new lease with Lender as
Lessee provided:
(1) the written request for the new lease is
served on Lessor by Lender within ten (10) days after service on
Lender of any notice described in subparagraph
(2) the new lease contains the same terms and
conditions as this Lease except for those which have already been
fulfilled or are no longer applicable.
(3) on execution of the new lease by Lessor,
Lender shall pay any and all sums that would be due upon execution
of the new lease, but for its termination and shall fully remedy,
or agree in writing to remedy, any other default or breach
committed by Lessee that can be remedied.
(4) Lender shall, upon execution of the new
lease, pay all reasonable costs and expenses (including attorney's
fees) incurred in terminating this Lease, recovering possession of
the premises from Lessee, in preparing the new lease.
• H. Miscellaneous.
The following provisions shall apply to Lessor,
Lessee and any Lender:
(1) Any Lender shall be liable to perform the
13
0 •
obligations of the Lessee under this Lease only so long as the
Lender holds title to this Lease;
(2) Lessee shall, within ten (10) days after
the recordation of any trust deed or other security instrument,
record, at Lessee's sole expense, Lessor's written request for a
copy of any notice of default and /or notice of sale under any deed •
of trust as provided by state law.
6. USE AND MAINTENANCE.
A. The Leased Land shall be solely for residential
purposes. Lessee may demolish, construct, remodel, reconstruct and
maintain structures on the Leased Land for residential purposes so
long as the structures and construction are authorized by
appropriate City permit and fully comply with all City ordinances,
resolutions, regulations, policies, and plans. Lessee shall also
obtain permission to construct and /or maintain structures from the
California Coastal Commission and any other state agency if
required by law.
B. Lessor shall not be required to make any
changes, alterations, additions, improvements, or repairs in on or
about all or part of the Premises. Lessee shall, at all times
during the term of this Lease and without any cost or expense to
Lessor, keep and maintain, the Premises, including, without
limitation, all structures, facilities, walks, curbs, parkways and
other improvements, in good order and repair and in a clean, safe,
sanitary and orderly condition. Lessee shall repair or reconstruct
any improvements on the Leased Land following any damage or
destruction thereof, unless the improvements are being destroyed in
conjunction with remodeling or reconstruction and Lessor has
consented, in writing, to the damage or destruction. Lessee shall
cause to be constructed, maintained and repaired all utilities, •
pipes, walls, sewers, drains, and other improvements on the
Premises to the extent required by law or as necessary to maintain
the improvement in good order and repair and safe and sanitary
14
LI
condition. Lessee shall make, or cause to be made, any additions,
alterations or repairs to any structure or improvement on the
Premises which may be required by, and Lessee shall otherwise
observe and comply with, any law, statute, ordinance, plan,
resolution or policy applicable to the Premises. Lessee shall
indemnify, defend and hold Lessor harmless from and against any
•
loss, liability, action, claim or damage, arising out of, or in any
way related, to Lessee's failure to comply with, and perform
pursuant to, provisions of this section.
C. All repairs, additions, and alterations to the
structures or improvements on the Premises shall conform to all
applicable laws, ordinances, regulations, plans, policies and
resolutions and all work shall be performed with reasonable
diligence, completed within a reasonable time, and performed at the
sole cost and expense of Lessee.
D. Lessee expressly accepts the Premises "as is"
and acknowledges that Lessor has made no representations or
warranties as to the suitability of the property or any
construction or improvement. Lessee shall conduct all tests
necessary to determine the suitability of the property for any
proposed construction or improvement including, without limitation,
the amount and extent of any fill, and related factors. Lessee
expressly acknowledges that Lessor shall not be liable for any
damage or loss resulting from any subsurface or soil condition in,
on, or under the Premises or adjacent property. Lessee also
expressly acknowledges that, while the Legislature has purportedly
removed the public trust restrictions on use of the property
pursuant to the provisions of the Beacon Bay Bill, the premises may
constitute filled tidelands, and Lessor has made no representation
• or warranty relative to the validity of the Beacon Bay Bill, the
power of the Legislature to remove public trust restrictions
through legislation, or otherwise guaranteed Lessee's right to the
property as against any legal challenge as to the status or
15
•
El
suitability of the premises for residential use.
7. TAXES AND UTILITIES.
It is understood by Lessor and Lessee that this
Lease shall give rise to a possessory interest tax obligation and
the potential for a significantly higher possessory interest tax
payment. Lessee shall pay, before delinquent, all utility charges
and any general and special taxes, assessments or other
governmental charges, if any, which may be levied on the Leased
Land, and /or any improvements, including, without limitation, any
possessory interest tax. Any lien for unpaid utilities, taxes,
assessments or charges shall not attach to the leasehold interest
but only to improvements located on the leased premises.
8. USE AND MAINTENANCE OF COMMON AREA.
Lessee shall have the right to use the streets,
beaches, walkways, tennis courts, docks, piers, and common
landscaped areas in Beacon Bay (as depicted on Exhibit "A") and
which are leased to the Beacon Bay Community Association by Lessor
in consideration of the maintenance thereof by such Association and
rent to be paid by individual Lessees.
9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE.
Lessor has no obligation to install, improve,
repair, or maintain streets, curbs, gutters, water lines, sewer
lines, drainage facilities, street lighting or other facilities
used by the residents of Beacon Bay (Infrastructure). Not-
withstanding section 8 above, Lessor reserves the right, after a
five (5) year period following the Effective Date and upon approval
by the Lessees representing a majority of the lots in Beacon Bay,
to improve and maintain streets, curbs, gutters, water lines, sewer
lines, drainage facilities, street lighting and other
Infrastructure facilities in Beacon Bay at its initial cost and to
assess Lessee for a pro rata share of such costs, and to collect
such costs from Lessee in the form of rent over the remaining term
LE
•
•
0 0
of this Lease.
10. COMMUNITY ASSOCIATION.
A. As a material part of the consideration of this
Lease, and as an express condition to the continuance of any of the
• rights of Lessee pursuant to this Agreement, Lessee agrees to
become, and during the term of this Lease to remain, a member in
good standing of the Beacon Bay Community Association. Lessee also
agrees to abide by the Articles of Incorporation, bylaws, all rules
and regulations of the Association and to pay to the Association,
before delinquency, all valid dues, fees, assessments and other
charges properly levied or assessed by the Association. Lessee's
failure to comply with the provisions of this subsection shall
constitute a material breach of this Lease.
B. In addition to the rights reserved to Lessor
pursuant to the provisions of Section 9, if the Community
Association fails or ceases to maintain community facilities,
Lessor may, at its option and without obligation, assume the
obligations of the Community Association to maintain, repair,
install or improve community facilities. In such event, Lessee
shall pay a pro rata share of Lessor's reasonable expenses in
maintaining and operating the community facilities, including a
reasonable management fee or the fee charged by a management agent.
Lessee's pro rata share shall be determined by dividing Lessor's
costs by the number of residential lots within Beacon Bay
(currently seventy-two lots) . Lessee's pro rata share of the
annual costs incurred by Lessor shall be paid within thirty (30)
days after written notice of the amount due, and any failure to pay
shall constitute a material breach of this Lease. The costs of
maintaining and operating community facilities shall be determined
• annually and solely from the financial records of Lessor.
11. COVENANTS, CONDITIONS AND RESTRICTIONS.
Lessee agrees to abide and be bound by all
17
0 •
covenants, conditions, restrictions and reservations as contained
in Exhibit " ," attached hereto and made a part hereof by this
reference. Said covenants, conditions and restrictions shall run
with the Leased Land and shall be binding on Lessee and Lessee's
successors in interest.
12. INDEMNIFICATION •
Lessee shall indemnify, defend and hold harmless
Lessor, its City Council, Boards and Commissions, officers, agents,
servants and employees from and against any and all actions, causes
of action, obligations, costs, damages, losses, claims, liabilities
and demands of any nature whatsoever, including reasonable
attorneys' fees, regardless of the merit or outcome of any such
claim or suit, arising out of, or in any way related, to the
condition of the leased premises, common areas or improvements, or
the use or possession of the leased premises, common areas or
improvements by Lessee, or Lessee's employees, agents,
representatives, guests or invitees, as well as any activity, work
or things which maybe permitted or suffered by Lessee in or on the
leased premises and improvements. Lessee shall indemnify, defend
and hold harmless Lessor, its City Council, Boards and Commissions,
officers, agents, servants and employees from and against any and
all actions, causes of action, obligations, costs, damages, losses,
claims, liabilities, and demands of any nature whatsoever,
including reasonable attorneys' fees, accruing or resulting to any
and all persons, firms, or corporations furnishing or supplying
work, services, materials, equipment or supplies arising from or in
any manner connected to the use or possession of the premises by
Lessee or from any activity, work or things which may be permitted
or suffered by Lessee in or about the Premises. Without limiting
the generality of the foregoing, Lessee hereby assumes all risk of
damage to property or injury to persons in or about the Premises •
from any cause except for damage or injury resulting from the sole
negligence or willful, fraudulent or criminal conduct by Lessor
and /or its officers, employees, agents and representatives, and
18
0 0
Lessee hereby waives all claims in respect thereof against Lessor.
13.
A. Fire Insurance.
Lessee shall, during the term of this Lease,
• insure all structures and improvements on the leased premises
against loss or damage by fire or other risk typically included in
an extended coverage endorsement and common use for residential
structures, including vandalism and malicious mischief. The
insurance shall provide coverage to at least ninety percent (90 %)
of the full insurable replacement value of all improvements on the
leased land, with the loss payable to Lessee unless this Lease is
terminated pursuant to Section in which case the proceeds of
insurance shall be paid to Lessor. The policy of insurance shall
provide that Lessor receive at least ten (10) days prior written
notice of any cancellation or reduction in coverage.
B. Liability Insurance.
Lessee shall, at Lessee's sole cost and
expense, procure and maintain during the term of this Lease, a
broad form comprehensive coverage policy of public liability
insurance which insures Lessee and Lessor against any loss or
liability caused by, or in any way related to, the condition, for
Lessee's use and occupation, of the premises in amounts not less
than:
(1) $1 million dollars for injury to, or death
of, one person, and not less than $2 million dollars for injury to,
or death of, two or more persons as a result of any one occurrence;
(2) $100,000.00 for damage to or destruction of
property.
14. DEFAULTS.
. A. Events of Default.
The occurrence of any one or more of the
following events shall constitute a material default and breach of
this Lease by Lessee:
0
(1) the vacating or abandonment of the
Premises by Lessee;
(2) the failure by Lessee to make any payment
of rent when due if the failure continues for three (3) days after
written notice has been given to Lessee. In the event that Lessor
serves Lessee with a Notice to Pay Rent or Quit pursuant to •
applicable unlawful detainer statutes, such Notice to Pay Rent or
Quit shall also constitute the notice required by this paragraph;
(3) the failure by Lessee to perform any of
the provisions of this Lease and any Exhibits attached hereto to be
performed by Lessee, other than described in paragraph (2) above,
if the failure to perform continues for a period of thirty (30)
days after written notice thereof has been given to Lessee. If the
nature of Lessee's default is such that more than thirty (30) days
are reasonably required for its cure, then Lessee shall not be in
default if Lessee commences the cure within said thirty (30) day
period and thereafter diligently prosecutes the cure to completion;
A34
(4) the failure of Lessee to provide Lessor
with all relevant information regarding the total consideration
paid in conjunction with any transfer of this Lease, or the
execution of this Lease by a current Lessee or subsequent Lessee
after the Effective Date of this Lease;
(5) the making by Lessee of any general
assignment, or general arrangement for the benefit of creditors;
the filing by or against Lessee of a petition to have Lessee
adjudged a bankrupt or a petition for reorganization or arrangement
of any law relating to bankruptcy unless the same is dismissed
within sixty (60) days; the appointment of a trustee or receiver to
take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in the Lease, where possession •
is not restored to Lessee within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially
all of Lessee's assets located at the Premises or of Lessee's
interest in the Lease, where such seizure is not discharged within
20
thirty (30) days.
Notices given under this paragraph shall
specify the alleged default and the applicable lease provisions,
and shall demand that Lessee perform the provisions of this Lease
• or pay the rent that is in arrears as the case may be, within the
applicable period of time. No such notice shall be deemed a
forfeiture or a termination of this Lease unless Lessor so elects
in the Notice.
B. Landlord's Remedies
In the event of any default by Lessee as
defined in this Section, Lessor may, in addition to any rights or
remedies permitted by law, do the following:
1. Terminate Lessee's right to possession of
the Leased Premises by any lawful means, in which case this Lease
shall terminate and Lessee shall immediately surrender possession
of the Premises to Lessor. In such event, Lessor shall be entitled
to recover from Lessee all amounts to which Lessor is entitled
pursuant to Section 1951.2 of the California Civil Code, or any
other provision of law, including, without limitation, the
following:
(i) The worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance
of the term after the time of award exceeds the amount of the loss
than Lessee proves could be reasonably avoided; and
(ii) any other amount necessary to
compensate Lessor for all detriment proximately caused by Lessee's
failure to perform obligations pursuant to this Lease or which in
the ordinary course of things would be likely to result from the
• breach, including, without limitation, the cost of recovering
possession, expenses of reletting (including necessary repair,
renovation and alteration) reasonable attorneys' fees, and any
other reasonable costs.
21
0
The "worth at the time of award" of all rental
amounts other than that referred to in clause (i) above shall be
computed by allowing interest at the rate of ten percent (10 %) per
annum from the date amounts accrue to Lessor. The worth at the
time of award of the amount referred to in clause (i) shall be
computed by discounting such amount at one percentage point above
the discount rate of the Federal Reserve Bank of San Francisco at
the time of award.
2. Without terminating or affecting the
forfeiture of this Lease or, in the absence of express written
notice of Lessor's election to do so, relieving Lessee of any
obligation pursuant to this Lease, Lessor may, but need not, relet
all or a portion of the Premises at any time, or from time to time,
and on such terms and conditions as Lessor, at its sole discretion,
deems appropriate. Whether or not the Premises are relet, Lessee
shall pay all amounts required by this Lease up to the date that
Lessor terminates Lessee's right to possession of the Premises.
Lessee shall make such payments at the time specified in the Lease
and Lessor need not wait until termination of the Lease to recover
sums due by legal action. If Lessor relets all or a portion of the
Premises, the reletting shall not relieve Lessee of any obligation
pursuant to this Lease, provided, however, Lessor shall apply the
rent or other proceeds actually collected by virtue of the
reletting against amounts due from Lessee. Lessor may execute any
agreement reletting all or a portion of the leased premises and
Lessee shall have no right to collect any proceeds due Lessor by
virtue of any reletting. Lessor shall not, by any reentry or
reletting or other act, be deemed to:
(i) Have accepted any surrender by Lessee
of this Lease or the leased premises;
(ii) have terminated this Lease; or
(iii) have relieved Lessee of any
obligation pursuant to this Lease unless Lessor has given Lessee
express written notice of Lessor's election to do so.
22
CJ
J
9 0
3. Lessor may terminate this Lease by express
written notice to Lessee of its election to do so. The termination
shall not relieve Lessee of any obligation which has accrued prior
to the date of termination. In the event of termination, Lessor
shall be entitled to recover the amount specified in Paragraph 1.
• C. Default By Lessor.
Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable
time, but in no event later than thirty (30) days after written
notice by Lessee to Lessor specifying wherein Lessor has failed to
perform such obligation. If the nature of Lessor's obligation is
such that more than thirty (30) days are required for performance,
then Lessor shall not be in default if Lessor commences performance
within such thirty (30) day period and thereafter diligently
prosecutes the same to completion.
D. Lessor shall be under no obligation to perform
or comply with its obligations pursuant to this Lease after the
date of any default by Lessee.
E. In any action or unlawful detainer commenced by
Lessor, the reasonable rental value of the leased premises shall be
deemed to be the amount of rent and additional rent (such as
reimbursement for costs of Infrastructure improvements or the
payment of taxes or assessments) for the period of the unlawful
detainer, unless Lessor /Lessee shall prove to the contrary by
competent evidence.
F. The failure or delay of Lessor to exercise any
right or remedy shall not be construed as a waiver of such right or
• remedy or any default by Lessee. Lessor's acceptance of any rent
shall not be considered a waiver of any preexisting breach of
default by Lessee other than the failure to pay the particular rent
accepted regardless of Lessor's knowledge of the preexisting breach
23
0 0
of default at the time rent is accepted.
G. Lessee waives any right of redemption or relief
from forfeiture pursuant to Code of Civil Procedure Sections 1174
and 1179 and /or pursuant to any existing or future statutory or
decisional law in the event Lessee is evicted or Lessor takes •
possession by reason of Lessee's default.
15. SURRENDER OF POSSESSION UPON EXPIRATION OR
TERMINATION.
A. Upon the expiration or termination of this
Lease, Lessee agrees to peaceably deliver possession of, and agrees
to vacate without contest, legal or otherwise, the Leased Land.
Lessor, at its sole discretion, may record a document evidencing
the expiration or termination of the leasehold interest. Lessee
waives any right to receive relocation assistance or similar form
of payment.
B. Upon the expiration of the term of this Lease,
and on condition that Lessee is not then in default of any of the
provisions of this Lease, Lessee shall have the right to remove,
from the Premises, all buildings and improvements, exclusive of
plantings, paving and underground installations, built or installed
on the Premises by Lessee. Removal of any building or improvement
shall be at the sole cost and expense of Lessee and removal must be
complete no later than ninety (90) days after expiration of the
term of this Lease. Lessee shall fill all excavations and remove
all foundations, debris and other parts of the buildings or
improvements remaining after removal and surrender possession of
the Premises to Lessor in a clean and orderly condition. In the
event any of the buildings and improvements are not removed within
in this Section, they shall become the
•
the time provided property
of Lessor without the payment of any consideration.
24
9
16. EMINENT DOMAIN.
A. Definitions of Terms.
1. The term "total taking" as used in this
paragraph shall mean the taking of the entire Premises under the
power of eminent domain or the taking of so much of said Land as to
• prevent or substantially impair the use thereof by Lessee for the
residential purposes.
2. The term "partial taking" shall mean the
taking of a portion only of the Premises which does not constitute
a total taking as defined above.
3. The term "taking" shall include a
voluntary conveyance by Lessor to an agency, authority or public
utility under threat of a taking under the power of eminent domain
in lieu of formal proceedings.
4. The term "date of taking" shall be the
date upon which title to the Premises or portion thereof passes to
and vests in the condemnor.
B. Effect of Taking.
If, during the term hereof, there shall be a
total taking or partial taking under the power of eminent domain,
then the leasehold estate of the Lessee in and to the Leased
Premises or the portion thereof taken shall cease and terminate, as
of the date of taking of said Land. If this Lease is so terminated
in whole or in part, all rentals and other charges payable by
Lessee to Lessor hereunder and attributable to the Premises or
portion thereof taken shall be paid by Lessee up to the date of
taking by the condemnor, and the parties shall thereupon be
released from all further liability in relation thereto.
C. Allocation of Award - Total Taking
. All compensation and damages awarded for the
total taking of the Premises and Lessee's leasehold interest
therein shall be allocated as follows:
25
0 0
(1) The Lessor shall be entitled to an amount
equal to the sum of the following:
(a) The fair market value of the Premises
as improved (exclusive of the dwelling and appurtenances to such
dwelling) as of the date of taking, discounted by multiplying such
fair market value by the factor for the present worth of one dollar
($1.00) at nine percent (9$) per annum compound interest for the •
number of years remaining from the date of taking to the date of
the expiration of the term of this Lease; and
(b) The present worth of rents due during
the period from the date of taking to the date of the expiration of
the term of this Lease, computed by multiplying the annual rent
then payable by the factor for the present worth of one dollar
($1.00) per annum at nine percent (9$) per annum compound interest
(Inwood Coefficient) for the number of years in such period.
(2) The Lessee shall be entitled to the amount
remaining of the total award after deducting therefrom the sums to
be paid to Lessor as hereinafter provided.
D. Allocation of Award - Partial Taking.
All compensation and damages awarded for the
taking of a portion of the Leased Premises shall be allocated and
divided as follows:
(1) The Lessor shall be entitled to an amount
equal to the sum of the following:
(a) The proportionate reduction of the
fair market value of the Premises as improved (exclusive of the
dwelling and appurtenances to such dwelling) as of the date of
taking, discounted by multiplying such proportionate reduction in
fair market value by the factor for the present worth of one dollar
($1.00) at nine percent (9 %) per annum compound interest for the •
number of years remaining from the date of taking to the date of
expiration of the term of this Lease; and
(b) The present worth of the amount by
26
0 0
which the rent is reduced computed by multiplying the amount by
which the annual rent is reduced by the factor for the present
worth of $1.00 per annum at 9% per annum compound interest
(Inwood Coefficient) for the number of years remaining from the
date of taking to the date of expiration of the term of this Lease.
• (2) The Lessee shall be entitled to the amount
remaining of the total award after deducting therefrom the sums to
be paid to Lessor as hereinabove provided.
E. Reduction of Rent on Partial Taking.
In the event of a partial taking, the rent
payable by Lessee hereunder shall be adjusted from the date of
taking to the date of the expiration of the term of this Lease.
Such rental adjustment will be made by reducing the basic rental
payable by Lessee in the ratio that the Fair Market Rental Value of
the Premises at the date of taking bears to the Fair Market Rental
Value of the Premises immediately thereafter.
17. ATTORNEYS' FEES.
Should either Lessor or Lessee be required to employ
counsel to enforce the terms, conditions and covenants of this
Lease Agreement, the prevailing party shall recover all reasonable
attorneys' fees (and court costs if applicable) incurred therein,
whether or not court proceedings were commenced.
18. REMEDIES CUMULATIVE.
The rights, powers, elections and remedies of the
Lessor or Lessee contained in this Lease shall be construed as
cumulative and no one of them shall be considered exclusive of the
other or exclusive of any rights or remedies allowed by law, and
. the exercise of one or more rights, powers, elections or remedies
shall not impair or be deemed a waiver of Lessor's or Lessee's
rights to exercise any other.
27
19. NO WAIVER.
No delay or omission of the Lessor to exercise any
right or power arising from any omission, neglect or default of the
Lessee or Lessor shall impair any such right or power or shall be
construed as a waiver of any such omission, neglect or default on
the part of the Lessor or Lessee or any acquiescence therein. •
No waiver of any breach of any of the terms,
covenants, agreements, restrictions or conditions of this Lease
shall be construed as a waiver of any succeeding breach of the same
or of any of the terms, covenants, agreements, restrictions or
conditions of this Lease.
20. COMPLIANCE WITH LAWS.
Lessee covenants and agrees to comply with all
rules, regulations, statutes, ordinances and laws of the State of
California, County of Orange, City of Newport Beach, or any other
governmental body or agency having lawful jurisdiction over the
Leased Land.
21. NOTICES.
It is mutually agreed that any notice or notices
provided for by this Lease or by law, to be given or served by
Lessee, may be given or served by mail, registered or certified,
with postage prepaid, on the City of Newport Beach, addressed to
the Mayor, City Manager, or City Clerk, 3300 Newport Boulevard,
P.O. Box 1768, Newport Beach, California 92659 -1768, or at such
other address as may be hereafter furnished to Lessee in writing.
If notice is intended to be served by Lessor on Lessee, it may be
served either:
or
A. By delivering a copy to the Lessee personally;
u
B. By depositing the Notice in the United States
Mail, registered or certified, with postage prepaid, the residence
or business address furnished by Lessee; or
28
9
0
C. If he be absent from the Leased Land by leaving
a copy with some person of suitable age and discretion who may be
occupying the Leased Land; or
D. If no one can be found, then by affixing a copy
of the notice in a conspicuous place on the property or also
• sending a copy through the mail addressed to the Lessee.
Such service upon Lessor or Lessee shall be deemed
complete at the expiration of seventy -two (72) hours from and after
the deposit in the United States mail of such notice, demand or
communication.
22. HOLDING OVER.
This Lease shall terminate and become null and void
without further notice upon the expiration of the term of this
Lease. Any holding over by Lessee after expiration of the term
shall not constitute a renewal of this Lease or give Lessee any
rights in or to the Leased Premises except as expressly provided in
this Section. The parties agree this Lease cannot be renewed,
extended, or in any manner modified except in a writing signed by
all parties. However, if Lessee, or anyone claiming under Lessee,
shall remain in possession of the Leased Premises after expiration
of the term of this Lease without any agreement in writing between
the parties and Lessor accepts rent from Lessee, then Lessee shall
be deemed a tenant from month -to -month subject to the provisions of
this Lease insofar as they may be applicable to a month -to -month
tendency. The month -to -month tendency may be terminated by Lessor
or Lessor upon thirty (30) days' prior written notice to the other.
23. &'DIET ENJOYMENT.
Lessor covenants and agrees that Lessee, upon paying
the rent set forth herein and observing and keeping all covenants
. and agreements to be observed or kept by Lessor hereunder, shall
quietly have and enjoy the Leased Land during the term of this
Lease without hindrance or molestation by anyone claiming by or
through Lessor.
29
0
•
24. SEVERABILITY.
If any term or provision of this Lease shall, to any
extent be invalid or unenforceable, the remainder of this Lease
shall not be affected thereby, and each term and provision of this
Lease shall remain valid and enforceable to the fullest extent
permitted by law. •
25. MISCELLANEOUS.
A. Representations. Lessee agrees that no
representations as to the Premises have been made by Lessor or by
any person or agent acting for Lessor. Lessor and Lessee agrees
and acknowledges that this document contains the entire agreement
of the parties, that there are no verbal agreements,
representations, warranties or other understandings affecting this
agreement, and Lessor and Lessee, as a material part of the
consideration of this Lease, waives all claims against the other
for recision, damages, or otherwise by reason of any alleged
covenant, agreement or understanding not contained in this Lease.
B. Inurement. Each and all of the covenants,
conditions and agreements herein contained shall, in accordance
with the context, inure to the benefit of Lessor and Lessee and
apply to and bind Lessor and Lessee, as the case may be, their
respective heirs, legatees, devisees, executors, administrators,
successors, assigns, licensees, permittees, or any person who may
come into possession or occupancy of said Leased Land or any part
thereof in any manner whatsoever. Nothing in this paragraph shall
in any way alter the provisions herein contained against assignment
or subletting.
C. Joint Several Liability. If Lessee consists .
of more than one person, the covenants, obligations and liabilities
of Lessee pursuant to this Lease shall be the joint and several
covenants, obligations and liabilities of such persons.
e
D. Captions. The section and paragraph captions
used in this Lease are for the convenience of the parties and shall
not be considered in the construction or interpretation of any
provision.
• E. Gender. In this Lease, the masculine gender
includes the feminine and neuter and the singular number includes
the plural whenever the context so requires.
•
IN WITNESS WHEREOF, the parties have caused this Lease to
be executed on the date first above written.
ATTEST:
CITY CLERK
APPROVED AS TO FORM:
TY ATTORNEY
kr \beacbay.1se \4 -21 -93
CITY OF NEWPORT BEACH, LESSOR
By:
Title: MAYOR
LESSEE
LESSEE
31
\ 7:S:
r
��4� Z 0 .J cJ�. �• � a
Z dN a
ISI
N.
N
! f
v i ' c c ( < �,, _ �. • -'mot++ :°,:yt .
� -/f[��r � r � 9 as 9 °•d.�2a
O '' Yom' • .o
Q � e CS
to
2 e l f,J I J 9 S
„ r'g
m D t r jl
It
1 ' e
RSA p
If$09
hit" of ecr!'4;,�v 's < °�
hit" o �4 ,,
�
N
~ ° 9
' <
� sa
8°
AR ,�[ `� Exhibit
fps• _ •� .