HomeMy WebLinkAboutC-3248(A) - East Balboa Blvd, 707 - Amended and Restated Lease 2004 (Balboa Theater)i
ATTACHMENT A
(Correct Version)
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
AM
IP March 11, 2014
Study Session Item No. SS2
and Agenda Item No. 17
City Clerk's Office {� t`CGaf&A P`r
City of Newport Beachj �� ( ► 9 CIWOd1
3300 Newport Boulevard ` ,Ir
P.O. Box 1768
Newport Beach, CA 92658-8915
Space above this line for Recorder's use only.
Exempt Recording Request per Government Code 6103
Contract No. 3248
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AMENDED AND RESTATED LEASE BY AND BETWEEN
THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS
THEATER FOUNDATION
This Amended and Restated Lease ("Lease"), entered into as of September ,
2004 (Effective Date) by and between the City of Newport Beach, a Charter City and
municipal corporation ("Lessor") and the Balboa Performing Arts Theater Foundation
("Lessee"), is made with reference to the following:
RECITALS
A. Lessor is the owner of the property, structures and improvements,
commonly known as the Balboa Theater located at 707 E. Balboa Blvd in
the City of Newport Beach ("Property").
B. Lessee purchased the Property with Community Development Block
Grant (CDBG) funds ("Federal Funds") from the United States Department
of Housing and Urban Development. The Federal Funds were granted
pursuant to Title 1 of the Housing and Community Development Act of
1974 (42 U.S.C. 5301 et. seq.) as amended (Act) and the Regulations of
24 C.F.R. Section 570 e. seq. (Regulations).
C. The Federal Funds were granted to Lessor, in part, to benefit low income
residents and households in the vicinity of the Property and to revitalize
the economy in the primary commercial area that serves these residents.
D. Lessee is a non-profit corporation organized pursuant to and in
compliance with the provisions of California law and is presently in good
standing. Lessee was organized by, and its members include, individuals
who reside in an around the Property and the area to be benefited by the
use of the Federal Funds.
E. The City Council of the City of Newport Beach (City Council) has
determined that this Lease and the use of the Property as a Theater is
consistent with the City Charter, the Newport Beach General Plan and
Zoning Ordinance and all other applicable Federal, State and local laws.
F. The City Council has also determined that this Lease will benefit, and
serve the interests of, the low income residents and business owners in
the area for which the Federal Funds were granted.
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G. An original Lease was entered into as of November 23, 1998, and was
amended on September 27, 1999, December 13, 1999, and December
12, 2000 (collectively "Original Lease").
H. Lessee has pursued its responsibilities for Required Improvements
outlined in the Original Lease, and has kept Lessor apprised of its
progress. Lessor, acknowledges that Lessee's development of plans for
the Required Improvements demonstrates the need to amend the Original
Lease to enable Lessee to make the Property viable for present-day use
as a first class community multi -use Theater.
This Amended and Restated Lease replaces the Original Lease, and
represents the parties' full agreement with regard to the Property.
NOW, THEREFORE, in consideration of the terms, covenants and
conditions in this Lease, Lessor and Lessee hereby agree as follows:
ARTICLE 1 SUBJECT OF LEASE
1.1 Purpose of the Lease
The purpose of this Lease is to require Lessee to renovate and rehabilitate the
Property and, subsequent to renovation, require Lessee to operate a first class
community multi -use Theater. The renovation and operation of the Theater is
intended to serve the needs and interests of the residents and business owners
in the area to be benefited through the use of the Federal Funds,
1.2 The Property
The term "Property" includes the land described in Exhibit A and depicted in
Exhibit B as well as the structure(s), any improvements and personal property.
1.3 Lessor
Lessor is the City of Newport Beach, a Charter City and municipal corporation.
The principal office of Lessor is located at City Hall, 3300 Newport Boulevard,
Newport Beach, California 92658-8915. For the purposes of this Lease, the term
"Lessor" shall include all officers, employees, agents or representatives of
Lessor.
1.4 Lessee
Lessee is the Balboa Performing Arts Theater Foundation. Lessee is a
California non-profit public benefit corporation organized for the purpose of
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renovating, operating and maintaining the Theater and engaging in activities that
will, among other things, serve the interests of, and benefit, the area commonly
known as Central Balboa or Balboa Village.
ARTICLE 2 LEASE OF PROPERTY
2.1 Lease of Property
Lessor leases the Property to Lessee, and Lessee leases the Property from
Lessor for the Term and pursuant to the terns, provisions, covenants and
conditions of this Lease. Lessor reserves allrights to substances below the
surface of the Property and the right to produce or take any of those substances
so long as the activities do not impair or interfere with the Purpose of this Lease.
2.2 Condition of Title
The Property is leased subject to the Permitted Exceptions (Exhibit C) and other
matters affecting title which do not inhibit, prevent or impair the Purpose of this
Lease.
ARTICLE 3 POSSESSION OF PROPERTY
3.1 Quiet Eniovment
Lessee shall be entitled to peaceably and quietly use and enjoy the Property for
the Term, without hindrance or interruption by'Lessor except for the exercise of
Lessor's rights pursuant to this Lease. Lessor shall not be liable in damages or
otherwise, because of the interruption or termination of any service provided by
Lessor (such as, water or sewer service), or a termination, interruption or
disturbance of any service attributable to any act or omission of Lessee.
3.2 Condition of Property
Lessee has investigated and researched all physical conditions of the Property
that could affect Lessee's use, enjoyment and improvement of the Property
including soil conditions, the condition of structures, and the condition of utilities.
By execution of this Lease, Lessee shall be deemed to have accepted the
Property in an "AS IS" condition. Lessor has provided Lessee with a report that
confirms the presence of lead-based paint on the Property and Lessee
acknowledges that substantial improvements, including seismic retrofit and
remediation of the lead-based paint, will be necessary before the Property can
be operated as a first-class community Theater as required by this Lease.
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3.3 Ownership of Improvements
During the Term of this Lease, Lessee shall hold title to the improvements and
personal property necessary or convenient to the operation or maintenance of
the Theater, such as fixtures, machinery, rigging, lighting, staging, merchandise,
trade fixtures (collectively, Equipment) that have been constructed or placed on
the Property
3.4 Surrender of Pro ertjt
3.4.1 On expiration of the Term or termination of this Lease, Lessee shall
peaceably and quietly leave and surrender the Property and
Equipment to Lessor, in good order, condition and repair,
reasonable wear and tear and obsolescence excepted. Lessee
shall deliver to Lessor all contracts, agreements, books, records,
and other documents related to the operation, maintenance or use
of the Property.
3.4.2 Upon the expiration of the Term or termination of this Lease and
within ten (10) days of a written request by Lessor, Lessee shall
immediately deliver to Lessor the following;
(i) Documents reasonably necessary for Lessor's ownership of the
Property and Equipment to be clearly reflected of record.
(ii) Title insurance, surety bond, or other security reasonably
acceptable to Lessor insuring Lessor against all claims and liens
against the Property other than those incurred by Lessor or
accepted by Lessor in writing.
(iii) All plans, surveys, permits and other documents relating to the
Property as may be in the possession of Lessee at the time.
3.4.3 All documents and instruments to be delivered pursuant to this
Subsection shall be in a form satisfactory to Lessor.
ARTICLE 4 TERMIOPTION TO PURCHASE
4.1 Duration and Commencement
The Term of this Lease shall commence on the Effective Date and shall expire
on the twenty-fifth (25t) anniversary subject to early termination or Lessee's
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exercise of the option to purchase as provided in Section 4.3.
4.2 .Option to Extend
Any extension of this Lease, and the terms and conditions of the extension, shall
be at Lessor's option, in its sole and absolute discretion.
4.3 Option to Purchase.
Lessee shall have the option to purchase the Property subject to satisfaction of
the following:
4.3.1 Lessee shall have completed the Required Improvements; and
4.3.2 Lessee shall have operated the Theater in full compliance with the
provisions of Article 7 for a period of five (5) years; and
4.3.3 Lessee has given Lessor thirty (30) days written notice of its
Intention (notice of intent) to exercise the option to purchase; and
4.3.4 Lessee is not in default when the notice of intent is served or at
dose of escrow; and
4.3.5 Lessee, within fifteen (15) days after service of the notice of intent,
opens an escrow for the purchase of the Property and deposits ten
percent (10%) of the purchase price into escrow.
4.4 Option - Purchase Price
The purchase price of the Property shall be the sum of (1) the price paid by
Lessor ($480,000) and (2) an amount equal to $480,000 multiplied by the
cumulative percentage increase in the Consumer Price Index (All Urban
Consumers — Los Angeles, Anaheim Riverside — All Items) from the Effective
Date of the Original Lease (November 23, 1998) to the date of the Notice of
Intent. For example, if Lessee exercises the option nine (9) years after the
Effective Date of the Original Lease and the increase in the CPI during that
period is thirty percent (30%), the purchase price would be $624,000. ($480,000
plus $144,000)
4.5 Right of First Refusal
Lessee shall have the right of first refusal to purchase the Property prior to the
sale to any third party. Lessor shall give Lessee sixty (60) days written notice of
its intent to sell the Property and Lessee's right to purchase during that period.
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Lessee shall exercise the option by serving Lessor with written Notice of Intent to
purchase within sixty (60) days after receipt of the notice of intent to sell and
complying with Subsection 4.3.5. The purchase price for the Property shall be
as specified in Section 4.4.
ARTICLE 5 RENTICONSIDERATION
5.1 No Money Payable by Lessee
Lessee shall not pay money as rent to Lessor.
5.2 Other Consideration
In consideration for this Lease, Lessee covenants that, during the Term, it will:
5.2.1 Operate and maintain a first class community multi -use Theater on
the Property in full compliance with the terms and conditions of this
Lease and at no cost to Lessor.
5.2.2 Maintain its non-profit status.
5.2.3 Construct the Required Improvements in accordance with the
provisions of Article 8 and maintain the Property in accordance with
this Lease at no cost to Lessor.
5.2.4 Defend, indemnify and hold Lessor harmless with respect to the
renovation, use, maintenance and operation of the Property.
5.2,5 Use any excess revenue or funds for purposes related to the
operation of the Theater or the revitalization of Central
Balboa/Balboa Village. The term "excess revenue or funds" means
any revenue or funds (other than the principal and interest of the
Capital Campaign Fund) in excess of the amount projected in
Lessee's then current Budget and which, in Lessee's reasonable
determination, are not needed for Lessee's reserve account(s).
ARTICLE 6 LONG RANGE PLAN, BUDGET AND RECORDS
6.1 Long Range Plan
Lessee shall prepare, and submit to Lessor, a Long Range Plan which projects
fundraising, renovation, marketing and operational expectations and financial
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needs, from initial planning up to and including active operations of the Theater
(Long Range Plan). The initial Long Range Plan shall be adopted within sixty
(60) days after the Effective Date. The Long Range Plan shall be reviewed and
updated/revised from time to time, at least once per year, to reflect changes to
renovation plans, fundraising strategies and goals, performances/events, and
marketing programs. The Long Range Plan shall comply with, and provide
information relevant to, the provisions of Articles 7 and 8, and specify in
reasonable detail (as appropriate given the status of the project) the following: (i)
fundraising needs and efforts, including a report on fundraising efforts for the
prior year; (Y) schedule for completion of Required Improvements; (iii) proposed
number of performances and/or events; and (iv) marketing plan for the Theater
including programs for attracting attendees and efforts to integrate the operation
of the Theater into efforts to revitalize the local economy. The Long Range Plan
shall be submitted to Lessor within thirty (30) days of adoption or any material
modification.
6.2 Annual Budaet
Lessee shall prepare and submit to Lessor an annual budget (Budget), which
shall be based on the Long Range Plan and indicate more specifically the
expectations and financial needs and sources for the current fiscal year. The
Budget shall specify in reasonable detail (as appropriate given the status of
renovation) (i) the balance in all funds and accounts maintained by Lessee; (Iii
all projected revenues and sources of funds for the fiscal year, (iii) the
expenditures proposed to be made by Lessee in fulfilling its obligations pursuant
to this Lease; and (iv) all other proposed expenditures of Lessee. Lessee has
prepared Budgets as required by the Original Lease. Subsequent Budgets, and
material modifications or revisions to the Budget, shall be submitted within fifteen
(15) days after adoption by Lessee.
6.3 Year End Financial Statement
Within ninety (90) days after the last day of Lessee's fiscal year, Lessee shall
submit to Lessor a cash flow statement itemizing all of its revenues and
expenditures for that fiscal year.
6.4 Records
Lessee shall keep and maintain complete, accurate and customary records and
books of account on all sales, whether for cash or on credit, all business
transactions made with respect to the Property during each fiscal year, and the
principal, and income of the Capital Campaign Fund. These records shall be
retained intact for a period of not less than three (3) years after the end of each
fiscal year to which the records and books of account pertain. Lessor and
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representatives of the United States Government shall be entitled, upon
reasonable notice and during business hours, to inspect and make copies of any
and all of the records and books of account.
6.5 Audit
Lessor and/or the United States Government shall, once per fiscal year, be
entitled to conduct an audit of all records and books of account that Lessee is
required to maintain. Lessee shall submit to Lessor a copy of any audit prepared
at the request of Lessee or any other party.
ARTICLE 7 USE OF PROPERTY
7.1 Permitted Use
The Property shall be used primarily for the operation of a first class community
multi -use Theater open to the general public. Lessee shall operate the Theater
in accordance with the standards specified in this Lease and the relevant
Operations Plan. Lessee may, in conjunction with performances, events and
fund-raising activities, conduct incidental operations such as limited food service
or catering, on premises sale of alcoholic beverages (provided Lessee obtains all
required governmental permits and approvals), concessions, and retail sales
directly related to performances or fund raising events (Permitted Uses). Lessee
may conduct benefits, fund-raising events, previews, receptions, and similar
activities where admission is restricted subject only to compliance with this
Lease. Lessee may allow community and other organizations to periodically use
the Theater for fund raising, education, community events and business
meetings in accordance with this Lease and the Operations Plan. Lessee may
conduct fund-raising and similar events on the Property after completion of the
improvements contemplated by Section 8.2 (Seismic Retrofit) and before
completion of Required improvements subject to issuance of a Special Events
Permit by Lessor.
7.2 Performances/Frequency
Lessee shall operate the Theater in a prudent and businesslike manner
reasonably calculated to assist in the efforts of Lessor and others to revitalize the
local economy and in full compliance with the Operations Plan. Operation of
the Theater is the fundamental consideration for this Lease and Lessee shall
ensure and promote the maximum reasonable use of the Theater by performers,
artists, and entertainers likely to attract patrons. The Theater shall be operated
consistent with the standards, practices and procedures utilized by first class
multi -use community theaters in other jurisdictions.
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7.3
7.4
7.5
Program Standards
Lessee shall operate the Theater in a manner reasonably calculated to achieve
the following objectives:
7.3.1 Provide frequent and high quality performances and cultural events
to attract patrons to the Theater and Central Balboa/Balboa Village.
7.3.2 To serve as a catalyst to the revitalization of the economy of the
area to be benefited by use of the Federal Funds.
7.3.3 To make the Theater accessible to, and enjoyable by, as wide a
potential audience as possible including the low income residents
of the area to be benefited by the use of Federal Funds,
7.3.4 To utilize the skill, ability and energy of members of the community
in combination with a capable and experienced professional staff to
fund and complete the renovation as well as operate and maintain
a first class community multi -use Theater.
Cooperation
Lessor and Lessee shall, at least ninety (90) days prior to completion of the
Required Improvements, commence discussion of a parking validation program
that would allow patrons of the Theater to use public parking at reduced rates.
Lessor and Lessee shall also discuss ways to integrate operation of the Theater
into programs for the economic revitalization of Central Balboa/Balboa Village.
Chance of Use
Lessee shall not use, or conduct any activities on, the Property except the
Permitted Uses without the prior written consent of Lessor, which consent may
be withheld at Lessor's sole discretion.
7.6 Compliance with Laws
Lessee shall not use the Property in a manner liable to create a public or private
nuisance or liable to cause structural injury to the Theater. Lessee shalt not
conduct any operation that would invalidate any insurance coverage required of
Lessee. Lessee shall not violate any local, state or federal law in the renovation,
maintenance, or operation of the Property or Theater. Lessee shall obtain any
required permit(s) from the City and approval from the Department of Alcohol
Beverage Control prior to any sale of alcoholic beverages on or from the
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7.7
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Property.
Zoning and Planning
Lessor acknowledges that the use of the Property as a Theater is a legal non-
conforming use as that term is defined in Title 20 of the Newport Beach
Municipal Code (Zoning Code). Lessee shall be entitled to repair, after, and
modify the structures and improvements on the Property in accordance with the
provisions of the Zoning Code provided Lessee complies with the provisions of
this Lease. Lessee shall also use the Property in conformance with the
provisions of the Central Balboa Specific Plan. Approvals granted by Lessor
pursuant to Article 8 of this Lease shall not substitute for land use and
development approvals and permits required by Titles 15 and 20 of the Newport
Beach Municipal Code.
7.8 Nondiscrimination
7.8.1 Lessee shall not discriminate against any person or group of
persons, on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry, in the renovation, operation,
enjoyment or occupancy of the Property.
7.8.2 Lessee shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin,
age or handicap. Lessee shall take positive steps to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex,
national origin, age or handicap. Lessee shall post in conspicuous
places, available to employees and applicants for employment,
notices specifying the non-discrimination provisions of this Lease.
Lessee shall, in all solicitations or advertisements for employees
placed by or on behalf of Lessee, state that all qualified applicants
will receive consideration for employment without regard to race,
color, religion, sex, national origin, age or handicap. Lessee shall
not discriminate on the basis of age in violation of any provision of
the Age Discrimination Act of 1975. Lessee shall not discriminate
against, or with respect to, any otherwise qualified handicapped
individual as provided in Section 504 of the Rehabilitation Act of
1973.
7.8.3 Lessee agrees not to discriminate on the basis of sex, marital
status, race, color, religion, creed, ancestry or national origin of any
person with respect to any agreement, license, or contract related
to the renovation, operation, use or occupancy of the Property. All
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such contracts, licenses, agreements shall contain non-
discrimination provisions substantially similar to this Lease.
ARTICLE 8 REQUIRED IMPROVEMENTS
8.1 Lessee's Obligations
The Property requires substantial renovation and rehabilitation to'be used as, or
considered, a first class community mufti -use Theater. Lessee shall design,
obtain building permits for, and then construct the improvements specified in this
Article (Required Improvements) at Lessee's sole cost and expense
8.2 Seismic Retrofit/Remediation.
The primary structure on the Property is an unreinforced masonry building
constructed prior to 1935 and is subject to the provisions of Chapter 15.07 of the
Newport Beach Municipal Code (Earthquake Hazard in Existing Buildings). In
addition, a preliminary investigation of the Property has revealed some lead-
based paint. Lessee shall submit to Lessor, plans and specifications for
improvements to the Property necessary to comply with the provisions of
Chapter 15.07 (Seismic Retrofit) and a plan to remediate the lead based paint
(Remediation). Lessee shall retain a iicensed contractor to construct the Seismic
Retrofit and complete the Remediation. Lessee shall complete the Seismic
Retrofit and the Remediation no later than the date on which the Required
Improvements are required to be completed. Lessee shall be solely responsible
for all costs and expenses associated with the Seismic Retrofit and the
Remediation.
8.3 Conceptual Design Plans
Lessee shall prepare, and submit to Lessor for approval, proposed Conceptual
Design Plans for the design and construction of the Property for use as a first
class community mufti -use Theater (Conceptual Design Plans), The Conceptual
Design Plans shall be prepared by a licensed architect. The Conceptual Design
Plans shall generally describe those elements typically included in preliminary
Conceptual Design Plans for the renovation and rehabilitation of a theater
constructed in the 1920's. The Conceptual Design Plans shall include, without
limitation, (1) seating layout; (2) stage and dressing room layout (3) lobby and
concession arealayout; (4) public area layout; and (5). exterior elevations.
Lessor's right to approve the Conceptual Design Plans shall be limited to
ensuring that the improvements contemplated by the Conceptual Design Plans
are consistent with a first class community multi -use Theater viable for present-
day use, and that the improvements respect the design of the original front
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facade of the Theater to the maximum extent feasible.. The Conceptual Design
Plans shall be deemed approved if Lessor fails to serve written notice of
disapproval within thirty (30) days following submittal. Lessor's approval shall
not be unreasonably withheld and any disapproval by Lessor shall specify with
particularity the components of the Conceptual Design Plans disapproved, the
reasons for disapproval and alternatives that Lessor would approve. The Parties
shall agree on a Conceptual Design Plan within sixty (60) days of submittal.
8.4 Design Development Plans
Subsequent to approval of the Conceptual Design Plan, Lessee shall submit
Design Development Plans to Lessor for approval. The Design Development
Plans shall be based on, consistent with and amplify on the information provided
in the Conceptual Design Plans. The Design Development Plans shall include
(1) exterior fighting plans and design; (2) color, material, treatment and design of
all exterior elements; (3) sound and projection systems; (4) design and
treatment of interior spaces, and (5) schedules showing the principal stages,
phases and timing of construction. Lessor's right of approval, which shall not be
unreasonably withheld, shall be limited to a determination that the Design
Development Plans are based on and consistent with the approved Conceptual
Design Plans. The Design Development Plans shall be deemed approved if
Lessor fails to give written notice of disapproval within thirty (30) days after
submittal. Lessor shall specify with particularity those components of the Design
Development Plans disapproved, the reasons for disapproval and the
aftemative(s) Lessor would approve. The Parties shall agree on Design
Development Plans within sixty (60) days after submittal.
8.5 Buildina Permits
Lessee shall apply for all necessary building permits from Lessor. Lessee shall
diligently process any corrections and changes to the submittals that are
necessary to comply with State and local law and to ensure consistency with
approved Design Development Plans. Lessee shall also obtain all permits or
approvals required of any other governmental entity having jurisdiction over the
Property or any modification to the Property. In the event that another
governmental agency with jurisdiction over the Property requires modification of
the Design Development Plans, the modifications shall be submitted to Lessor
for review and approval. Lessor shall not unreasonably withhold or delay the
issuance of building permits. Lessor shall pay all building permit fees, planning
fees and other fees and charges normally imposed on similar projects.
8.6 Final Design Plans
Subsequent to approval of Design Development Plans, Lessee shall submit Final
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Design Plans to Lessor for approval. Final Design Plans shall be based on,
consistent with and amplify on the information provided in the Development
Design Plans. The Final Design Plans shall include all interior design
treatments, colors and -materials. Lessor's right of approval, which shall not be
unreasonably withheld, shall be limited to a determination that the Final Design
Plans are based on and consistent with the approved Design Development
Plans. The Final Design Plans shall be deemed approved if Lessor fails to give
written notice of disapproval within thirty (30) days after submittal. Lessor shall
specify with particularity those components of the Final Design Plans
disapproved, the reasons for disapproval and the alternatives) Lessor would
approve. The Parties shall agree on Final Design Plans within sixty (60) days
after submittal.
8.7 Schedule for Required Improvements
Lessee shall submit plans, diligently pursue their approval, and begin
construction of Required Improvements according to the following schedule.
Conce tual Desi n Plans
Thi 30) ays after Effective Date
Complete application for Use
Thirty (30) days after Effective Date
Permit and Development Plan
Review
Complete application for Coastal
Sixty (60) days after approval of Use
Development Permit CDP
Permit and Development Plan Review
Design Development Plans
One hundred eighty (180) days after
Approval of CDP
Complete Building Permit
One hundred' eighty (18D) days after
application
approval of CDP
Begin construction
Upon . reaching 70% of budget for
Required Improvements, but no later than
one (1) year after issuance of building
ermits
Final Design Plans
Upon approval of framing by Lessor's
Building Department
Complete construction
One (1) year and sic (6) months after
issuance of building permits
8.8 General Requirements
8.8.1 The Required Improvements shall be constructed in compliance
with the provisions of this Lease that regulate, or relate to, the
construction, alteration or maintenance of improvements on the
Property. Lessee acknowledges that the reviews and approvals
required by this Section, with the exception of the issuance of
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building permits, are proprietary activities related to Lassoes
ownership of the Property and separate and distinct from any
review or approval conducted by Lessor in its municipal capacity.
Lessee also acknowledges that any approval given pursuant to this
Section, except the issuance of building permits, does not bind
Lessor when acting in its governmental capacity.
8.8.2 Lessor has designated the Committee to Promote Revitalization of
the Peninsula (PROP), or its successor, to review, and approve or
disapprove, the Conceptual Design Plans, the Design Development
Plans and the Final Design Plans. Lessee may request City
Council review of any decision by PROP disapproving submittals by
serving a request for review within fifteen days atter receipt of the
notice of disapproval.
8.9 Extensions
Lessee may request, and the City Manager of the City of Newport Beach may
grant, an extension of up to sixty (60) days with respect to any of the deadlines
specified in this Article. The City Council of the City of Newport Beach may,
upon a showing of good cause, grant extensions in excess of sixty (60) days.
The extensions authorized by this Section are in addition to any extension
resulting from force majeure.
ARTICLE 9 REPAIRS AND MAINTENANCE
Lessee recognizes that the Theater is a designated local historical landmark and is to
be maintained as such. Lessee shall, at Lessee's expense, perform all routine and
recurring maintenance necessary to keep the Theater in first class condition and in
accordance with the standards in this Lease. Lessee shall, at a minimum perform the
following: (1) the maintenance of the exterior surfaces of the Theater (including patching
and resurfacing the roof membrane and painting or other protective treatment of the
exterior wall of the Theater); (ti) maintenance of the public rest rooms (including repairs
or replacements of the or rest room fixtures); (Tiro the maintenance of electrical systems
serving the Property and Theater and the repair and replacement of components; (iv)
maintenance of all pipes and plumbing systems serving the Theater and Property, and
the repair and replacement of components; and (y) the maintenance of all building
service equipment (including HVAC equipment, conveyancing systems, and fire, life
safety, and emergency equipment) and the repair and replacement of components. As
soon as reasonably practicable following the completion of Required Improvements,
Lessee shall prepare and submit to Lessor a schedule for the periodic inspection and
maintenance by Lessee of the Theater. Lessee shall revise the schedule for
maintenance from time to time during the Term as necessary to maintain the Theater to
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the standards required by this Lease. Lessee shall have the benefit of all warranties
available to Lessor with respect to the Theater or any component thereof. Lessee shall
not be responsible for the cost of and repair or maintenance required because of the
acts or omissions of Lessor. Lessee may terminate this Lease If the cost of repairing or
replacing any of the structural, roof, main electrical, plumbing, building service or fire/life
safety components of the Theater would make continued operation of the Theater
economically infeasible.
ARTICLE 10 STATUS AND MANAGEMENT OF LESSEE
10.1 Nonprofit Status
During the Term, Lessee shall maintain its status as a California public benefit
nonprofit corporation in full compliance with the California Nonprofit Corporation
Law (California Corporation Code Section 5000 et seq.). Lessee shall also
maintain its qualification as a tax-exempt organization under 501(c)(3) of the
Internal Revenue Code (or any successor statute).
10.2 By Laws
During the Term, Lessee shall maintain By -Laws governing the management
and operation of the Foundation, and provide Lessor with a current copy of the
By -Laws.
10.3 Employment of Staff
During the Term, Lessee shall employ a professional Executive Director to
manage the day to day renovation and/or operation of the Theater, to interact
with Lessor and promptly respond to problems or concerns expressed by Lessor
or members of the general public relative to the renovation and/or operation of
the Theater, and to perform such other duties as Lessee may assign. Lessee
shall use its best efforts to fill a vacancy caused by separation of an Executive
Director within one hundred eighty (180) days.
ARTICLE 11 ALTERATIONS
11.1 Written Consent
Except as otherwise provided in this Article, Lessee shall obtain the written
consent of Lessor prior to making any structural or nonstructural alterations to
the Property. All structural and nonstructural alterations to the Property shall
conform to the Theaters designation as a local landmark and shall respect the
16
design of the original front fegade of the Theater to the maximum extent feasible.
Theater. Lessee shall be solely responsible for all costs and expenses incurred
in making any alteration. All alterations shall be surrendered with the Property
when this Lease expires or terminates.
11.2 Notice of Non -responsibility
Structural and nonstructural alterations shall not be commenced until ten {10}
days after Lessor has received written notice from Lessee stating the date work
is to commence so that Lessor can post and record an appropriate Notice of
Non -Responsibility. Structural alterations shall be made by a licensed
contractor.
ARTICLE 12 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES
12.1 Public and Private Utility Services
Lessee will pay all charges for all public or private utility services and all sprinkler
systems and interior protective services provided to or for the Property. Lessee
will comply with the terms and conditions of contracts relating to such services.
Lessor shall not be liable for any failure or defect in the supply of any utility.
12.2 Taxes. Assessments. Fees and Chames
Lessee covenants to pay when due all applicable taxes, assessments, fees,
charges, and levies of every type and character, including all interest and
penalties, that are imposed, assessed or levied on the Property, any occupancy
or use of the Property, or any income derived from the Property.
12.3 Proof of Payment
Lessee agrees to furnish to Lessor, upon request, proof of the timely payment of
any tax, assessment, levy, fee or charge or other. Lessee may pay any
assessment or tax in installments if legally permissible to do so. In the event
Lessee elects to pay assessments or taxes in installments, Lessee shall be liable
only for those installments which become due and payable during the Term of
this Lease.
12.4 Payment by Lessor
Lessor shall have the right to pay any assessment, tax, fee or charge before the
due date if Lessor has an objectively reasonable belief that Lessee is unwilling or
unable to make the payment. in such event, Lessee shall fully reimburse Lessor
17
within ten (10) days of written notice of payment by Lessor.
12.5 Property Taxes not Valid
The obligation of Lessee to pay taxes shall not be construed as evidence that
Lessor or Lessee believe that any tax is legal. This Lease is intended only to
obligate Lessee to pay taxes if legally. imposed.
12.6 Notice of Possessory Interest: Payment of Taxes and Assessments on Value of
Entire Lease Premises
In accordance with California Revenue and Taxation Code Section 107.6(a) and
Health and Safety Code Section 33673, Lessor states that by entering into this
Lease, a possessory interest subject to property taxes may be created, and if so,
that Lessee shall pay taxes upon the assessed value of the entire property and
not merely the assessed value of its leasehold interest. Lessee or other party in
whom the possessory interest is vested may be subject to the payment of
property taxes levied on such interest.
ARTICLE 13 LIENS
13.1 Indemnification
Lessee shall indemnify, defend and hold Lessor and the Property free, clear and
harmless from any claims, liens, demands, charges, encumbrances or litigation
arising directly or indirectly out of (1) Lessee's use, occupancy or operation of
the Property or (2) any work performed on, material furnished to the Property.
Lessee shall pay, prior to delinquency, for all work performed on, and material
furnished to, the Property which may result in a lien on the Property and shall
use its best efforts to keep the Property and Theater free and Gear of all
mechanic's liens and similar liens.
13.2 Satisfaction of Liens
Lessee shall fully pay and discharge a judgment or lien affecting the Property
upon entry of final judgment in any action contesting any claim of lien'(if final
judgment establishes the validity of all or a portion of the lien). Lessee shall also
pay any lien within fifteen (15) days after notice of the filing of any lien that
Lessee does not contest. Lessee shall reimburse Lessor upon demand for any
and all loss, damage and expense, including reasonable attorneys' fees, incurred
by Lessor with respect to any judgment or lien resulting from the acts or
omissions of Lessee related to the Property. Lessor shall have the right to
satisfy any judgment or lien if Lessee fails or refuses to do so and Lessee shall
18
fully reimburse Lessor in such event.
13.3 Notice to Lessor
Lessee shall give Lessor written notice of any claim or lien filed against the
Property and any action or proceeding instituted affecting the title to the
Property.
13.4 Notice of Non -Responsibility
Lessor shall have the right to post and maintain on the Property any Notice of
Non -Responsibility authorized by law.
ARTICLE 14 INDEMNIFICATION
14.1 Indemni
Lessee shall defend, indemnify and hold harmless Lessor from'and against any
and all legal or administrative proceedings, claims, reasonable attorneys' fees
and costs, expenses, penalties, actual damages, punitive damages and losses,
including indemnity claims, in any way related to (1) the improvement, use,
maintenance, or operation of the Property (ii) this lease (iii) the use, release,
generation, storage or disposal of Hazardous Materials (as defined in Section
14.6 on the Property or Theater, (iv) compliance or non-compliance with any
federal, state or local environmental law, ordinance, rale or regulation, (v) any
accident or injury to, or death of, persons or damage to property occurring on or
about the Property (vl) the removal, clean-up, encapsulation, detoxification or
any other action taken by Lessee or any other party, directly or indirectly arising
out of the presence of Hazardous Materials in, on or around the Property.
14.2 CERCL.A Liability
Lessee agrees that this Lease is intended to operate as an indemnificatiori under
Section 9607(e)(1) of the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), as amended, and the California
Hazardous Substances Act (CHSA), as amended.
14.3 Expense of Proceedings
The defense of any suit, action, legal or administrative proceeding that may be
threatened, brought or instituted against Lessor that is the subject to the
indemnity provided in this Lease shall be conducted at Lessee's sole expense by
legal counsel selected and approved by Lessor.
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0
14.4 Release
11
Lessee waives, releases and forever discharges Lessor from any and all suits,
causes of action, legal or administrative proceedings, claims, demands,
liabilities, losses, costs, interest, attorneys' fees, expenses, penalties, actual
damages, punitive damages and losses, known or unknown, which Lessee ever
had, now has, or may have in the future that are in any way related to (1) the
condition, status, quality, nature, contamination or environmental state of the
Property including Lessee's claims under the CERCLA, the Carpenter -Presley -
Tanner Hazardous Substance Account Act and any other federal, state or local
law, ordinance or regulation, or common law theory of recovery, pertaining to the
presence, release, clean-up or containment of Hazardous Materials on the
Property.
14.5 Waiver of California Civil Code Section 1542
Section 1542 of the California Civil Code states:
A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which, if
known by him, must have materially affected his
settlement with the debtor.
Lessee knowingly and voluntarily waives its rights pursuant to California Civil
Code Section 1542. Lessee fully understands the consequences of this waiver
and has been advised of the consequences by legal counsel. The Parties intend
this Lease will be effective as a bar to Lessee's Claims.
14.6 Definition of Hazardous Materials
The term "Hazardous Materials" means, without limitation, gasoline, petroleum
products, explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, polychlorinated biphenyis or related or
similar materials, asbestos or any other substance or material that may be
defined as a hazardous, toxic or dangerous substance, material, waste, pollutant
or contaminant under any federal, state or local environmental law, ordinance,
rule or regulation as now or at any time hereafter in effect, including, without
limitation, (a) CERCLA, (b) the Federal Water Pollution Control Act, (c) the Clean
Air Act (d) the Resource Conservation and Recovery Act, (e) the Toxic
Substances Control Act, (f) the Hazardous Materials Transportation Act, (g) the
Carpenter -Presley -Tanner Hazardous Substance Account Act, (h) Hazardous
Waste Control Law, and the (i) the Porter -Cologne Water Quality Control Act
20
01 0
(California Water Code Section 13000 et seq).
ARTICLE 15 INSURANCE
15.1 Insurance to be Maintained
Lessee shall take out and .maintain, no later than thirty (30) days after the
Effective Date and for the Term of this Lease, at Lessee's sole cost and
expense, the following insurance.
15.1.1 Comprehensive General Liability in an amount not less than two
million dollars ($2,000,000) combined single limit per occurrence.
Lessor and its officials, employees and representatives shall be
covered as additional insureds with respect to liability arising out of
activities by or on behalf of Lessee or in connection with the use or
occupancy of the Property_ Coverage shall be in a form acceptable
to Lessor and shall be primary and non-contributing with any
insurance or self-insurance maintained by Lessor or Lessee. Any
third party permitted to use the Property pursuant to Paragraph 7.1
of this Lease shall provide the same insurance, unless this
requirement is waived or modified, in writing, by Lessor's City
manager.
15.1.2 Workers' Compensation Insurance as required by the Labor Code
of the State of California.
15.1.3 "All Risk" Property Insurance (Operations) including coverage
against the perils of earthquake, fire, explosion of machinery or
equipment, and vandalism covering the full replacement cost of all
improvements and fixtures on the Property. Lessor shall be added
as insured under the standard loss payable endorsement. Lessee
waives all rights of subrogation against Lessor for any damage to
the improvements or fixtures covered by collectable commercial
insurance. Lessee's obligations to provide insuranceunder this
paragraph shall apply to all improvements and fixtures on the
Property without regard to the date of construction or installation.
Lessee's obligation to provide this coverage is contingent on the
availability of coverage at commercially reasonable rates.
15.1.4 Property Insurance -Construction. During construction of any
improvements on the Property, Lessee shall maintain Builder's Risk
Insurance against "all risk" of physical loss, including the perils of
fire, collapse and transit, with commercially reasonable deductibles,
21
covering the total cost of work performed, equipment, supplies and
materials furnished on a replacement cost basis. Lessee's
obligation to provide this coverage is contingent on the availability
of coverage at commercially reasonable rates.
15.2. Acceptable Terms of Coverage
Acceptable insurance coverage shall be placed with carriers admitted to mite
insurance in California, or carriers with a rating of or equivalent to AVIII by A. M.
Best & Company. Any deviation from this standard shall require the specific
written approval by Lessor. Any deductibles or self-insured retentions must be
declared to and approved by Lessor. At the option of Lessor, Lessee may be
required to reduce or eliminate such deductibles or self-insured retentions or to
procure a bond guaranteeing payment of losses and related expenses and
costs. Coverage under each policy shall not be suspended, avoided or canceled
by either party except after thirty (30) days prior written notice to Lessor. Lessee
shall furnish City and Lessor with certificates of insurance and with original
endorsements effecting coverage required by this Lease. The certificates and
endorsements for each insurance policy shall be signed by a person authorized
by the insurer to bind coverage on its behalf.
15.3 Index
The limits of insurance coverage required by this Article shall be adjusted on
each seven (7) year anniversary of the Effective -Date. The adjustment shall
reflect the percentage increase for the preceding seven (7) years in the
Consumer Price Index for All Urban Consumers, Los Angeles -Anaheim -
Riverside. All Items (1982-84 Base), published by the Bureau of Labor Statistics,
Department of Labor. Consumer Price Index.
15.4 Waiver of Subrogation
Each policy of insurance procured pursuant to this Article shall contain, If
feasible, either (i) a waiver by the insurer of the right of subrogation against
either party for negligence of such party, or (ii) a statement that the insurance
shall not be invalidated should any insured waive, in writing prior to a loss, any or
all right of recovery against any party for loss accruing to the property described
in the insurance policy. Lessor and Lessee waive any and all rights of recovery
against the other for any loss or damage to that Party arising from any cause
insured against under the insurance policies required by this Article.
22
ARTICLE 16 DAMAGE BY FIRE OR CASUALTY
16.1 Lessee to sive Notice
In case of any material damage to or destruction of the Property, Lessee will
promptly give written notice to Lessor generally describing the nature and extent
of the damage or destruction.
16.2 Restoration
Except as provided in Section 17.3, in the event of damage to or destruction of
the Property, Lessee shall repair and restore the Property to its original condition
(subject to changes necessary to comply with then existing laws and any
changes in design approved by Lessor), at Lessee's sole cost and expense. To
the extent the insurance proceeds are insufficient to cover the cost of such repair
and restoration, Lessee shall make up the deficiency out of Lessee's own funds.
The repair and restoration shall be commenced within a reasonable period of
time following the casualty and shall be completed with due diligence. Lessee
shall have the option to terminate this Lease and surrender possession of the
Property to Lessor if the event the cost of such repair and restoration exceeds
the sum of (i) the amount of insurance proceeds available to Lessee plus (ii) the
amount of the deductible by an amount which Lessee reasonably determines
renders reconstruction of the Property economically infeasible. In the event of
such a termination, Lessee shall pay to Lessor the amount of the deductible and
assign to Lessor any and all rights Lessee may have to the insurance proceeds.
16.3 Casualty Late in Term
Lessee or Lessor shall have the right to terminate this Lease on ninety (90) days
written notice if (i) the Property is damaged or destroyed subsequent to the
fifteenth (15th) year of the Term, (ii) the costs of restoration and repair are
estimated to exceed fifty percent (50%) of the then full replacement cost of the
Property (excluding land costs/value), and (iii) Lessee elects not to repair or
restore the Property. In such event, Lessor shall have the right to receive and
retain all insurance proceeds paid or payable to Lessee on account of any
damage or destruction to the Property.
16.4 Molication of Insurance Proceeds
In the event that Lessee is required to restore the Property pursuant to Section
16.2, proceeds from policies of insurance required by Article 15 and which are
received on account of any damage to or destruction of the Property (less the
costs, fees and expenses Incurred in the collection), shall be applied as follows:
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16,4.1 Lessee shall furnish to Lessor satisfactory evidence to Lessor of
the total cost of Restoration pursuant to Section 16.2. Lessee shall
then -furnish to Lessor satisfactory evidence that it has available the
total amount of money which, when added to the insurance
proceeds received, shall be sufficient to pay the cost of such
Restoration.
16.4.2 Assuming satisfaction of the conditions of subsection 16.4.1 net
insurance proceeds shall be paid to Lessee, unless Lessee is In
Default, to fund restoration. Payments from. the proceeds of
insurance for restoration shall be made only upon written request of
Lessee accompanied by a certificate of an architect to the effect
that the amount requested has been paid or is then due, is properly
a cost of restoration, and there are no mechanic's or similar liens
for labor or material supplied in connection with the restoration to
date.
16.4.3 Upon completion of restoration and assuming Lessee is not in
default, excess insurance proceeds shall first be paid to Lessor to
the extent of its actual expenses incurred in the restoration, then to
Lessee as working capital
ARTICLE 17 EMINENT DOMAIN
17.1 Lease Governs
The rights and obligations of the Parties with respect to any Award shall be as
provided in this Article if there is any Taking during the Term of this Lease.
17.2 Termination of Lease
This Lease shall terminate effective on the date of surrender of possession of
the Property to the condemning authority in the event of a Total Taking. Lessee
shall continue to observe and perform all of the terms, covenants and conditions
of this Lease until the date of termination.
17.3 Partial Taking— Restoration
If there is a Partial Taking, Lessee may, at its sole cost and expense, whether or
not the condemnation award is sufficient for the purpose, promptly commence
and diligently proceed to effect restoration of the Property as nearly as possible
to the condition and character immediately prior to such Taking.
24
17.4 Distribution of Award
All awards and damages received on account of any Taking, whether partial or
total, including interest received (Award), shall be paid promptly by the person(s)
receiving the same to an escrow agent mutually acceptable to Lessor and
Lessee to be distributed upon appropriate instruction from the Parties.
17.5 Allocation of Award — Partial Taking
Any Award in a Partial Taking shall be distributed by escrow in the following
order of priority:'
17:5.1 First, to Lessor and Lessee to reimburse all costs and expense
incurred in the collection of the Award, including fees and expenses
incurred in the condemnation proceeding;
17.5.2 Second, to Lessor, as reimbursement for the costs and expenses
of restoration of the Property and as those costs and expenses are
incurred by Lessee;
17.5.3 Third, if Lessor and Lessee are unable to agree upon the allocation
of the balance of the Award, if any, it shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court.
17.6 Allocation of Award — Temporary Taking
In the event of a Taking for temporary use or occupancy, this Lease shall
continue in full force and effect and Lessee shall be entitled to claim, recover and
retain any Award made on account of such temporary Taking. However, if the
period of temporary Taking extends beyond the Term, the Award shall be
apportioned between Lessor and Lessee as of the date of expiration.
17.7 Allocation of Award —Total Taking
Any Award in a Total Taking shall be distributed by escrow in the following
priority:
17.7.1 First, to Lessor and Lessee to reimburse for all costs and expenses
incurred by each in the collection of the Award;
17.7.2 Second, if Lessor and Lessee are unable to agree upon the
allocation, the balance of the Award shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
25
the court. The determination of the value of Lessee's and Lessor's
respective interests in the Property shall be made as if the Lease
were to continue in full force and effect until the Expiration Date.
17.8 Conduct of Proceedings
Lessee and Lessor shall jointly participate in and prosecuteidefend any action or
proceeding involving a Taking of the. Property by condemnation or under the
power of eminent domain and shall jointly make any compromise or settlement.
17.9 Notices
Any Party receiving notice of or becoming aware of any condemnation
proceedings shall promptly give written notice to the other party.
ARTICLE 18 ASSIGNMENT AND SUBLETTING
Lessee may not assign or sublet this Lease or any portion of the Property, without
Lessor's prior written consent which consent may be withheld in Lessor's sole
discretion. However, Lessee may grant such licenses, permits and concessions as are
reasonable, appropriate and customary to promote a Permitted Use and are in
accordance with the Operations Plan. Lessor may, at any time during the Term and in
its sole discretion, assign this Lease or its interest in the Property to a non-profit entity.
ARTICLE 19 LEASEHOLD MORTGAGES
Lessee shall have no right to encumber its interest in this Lease, the Property or the
Theater without Lessor's prior written consent, which consent may be withheld in
Lessor's sole discretion.
ARTICLE 20 PERFORMANCE OF LESSEE'S COVENANTS
20.1 Right of Performance
If Lessee falls to pay any tax, fee or other charge in accordance with Article 12
within the time period required or shall fall to pay for or maintain any of the
insurance policies provided for in Article 15 within the time required, or to make
any other payment or perform any other act within the time required by this
Lease, then Lessor may, after 30 days' written notice to Lessee (or without
notice in case of an emergency) and without waiving or releasing Lessee:
RIP
20.1.1 Pay the tax, assessment, fee or charge payable by Lessee
pursuant to this Lease; or
20.1.2 Pay for and maintain any insurance policies required by this Lease;
or
20.4.3 Make any other payment or perform any other act that Lessee is
required to pay or perform pursuant to this Lease.
20.2 Reimbursement and Damaaes
Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in
the exercise of its rights pursuant to Section 20.1.
ARTICLE 21 REPRESENTATIONS
21.1 Lessor's Representations
Lessor represents to Lessee that:
21.1.1 Lessor owns the Property in fee simple subject only to the
Permitted Exceptions and other matters affecting title that do not
inhibit, prevent or impair the operation, maintenance of use of the
Theater.
21.1.2 Lessor has the power and authority to enter into this Lease and
perform all the obligations of Lessor hereunder.
21.2 Lessee's Representations
Lessee represents to Lessor that:
21.2.1 Lessee has examined the Property and finds it will be fit for use as
a cultural and performing arts center in accordance with this Lease
and the Operations Plan upon completion of Required
Improvements.
21.2.2 Lessor has not made any representations or warranties regarding
the condition of the Property, or its suitability for the construction of
Required Improvements or the operation and maintenance of a
Theater consistent with this Lease and the Operations Plan.
21.2.3 Lessee has the right, power and authority to enter into this Lease
27
and to perform all the obligations of Lessee.
21.2.4 Lessee is a California public benefit nonprofit corporation in full
compliance with the provision of the California Nonprofit
Corporation Law (California Corporation Code Section 5000 at
seq.), and is a tax exempt organization under 501(c)(3) of the
Internal Revenue Code.
ARTICLE 22 DEFAULTS, REMEDIES AND TERMINATION
22.1 Legal Actions
22.1.1 Institution of Legal Actions
In addition to any other rights or remedies, either Party may
institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Lease. Any legal action shall be
filed in the County of Orange, State of California.
The laws of the State of California shall govern the interpretation
and enforcement of this Lease.
22.2 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in
this Lease, the rights and remedies of the Parties are cumulative.
22.3 Occurrence of Default
The following acts or omissions shall be considered material breaches of this
Lease if Lessee fails to cure the default within thirty (30) days after written notice
of default from Lessor or, If cure is not feasible within thirty (30) days, Lessee
has failed to commence cure within thirty (30) days or fails to diligently complete
the cure:
22.3.1 The failure of Lessee to comply with the provisions of Article
related to the design and construction of Required Improvements.
22.3.2 The failure of Lessee to operate the Theater in compliance with the
28
provisions of Article 7 related to frequency and quality of
performances and events.
22.3.3 The failure of Lessee to maintain the Property as specified in
Article 9.
22.3.4 The failure of Lessee to restore or repair the Property in the event
of damage or destruction
22.3.5 The failure of Lessee to pay any fee, tax, charge, or assessment
when due or the failure to reimburse Lessor in the event Lessor
pays the fee, tax, charge or assessment.
22.4 Remedies
If Lessee has materially breached this Lease then a default shall be deemed to
have occurred, Lessor may give written termination notice to Lessee, and on the
date specified in the notice this Lease shall terminate. In addition to the right of
termination, Lessor shall have the following additional rights and remedies:
22.4.1 Lessor shall have the immediate right to reenter the Property
and/or the Theater, take possession of the Property and/or
Theater, any and all Equipment, books and records, contracts and
any other property.
22.4.2 Lessor may, at its option, enforce all of its rights and remedies
under this Lease, including the right to recover the consideration
and all other sums payable as they become due. Lessor shall also
be entitled to recover from Lessee all costs of maintenance and
preservation of the Property and/or the Theater, and all costs,
including attorneys' and receiver's fees, incurred in connection with
the appointment of and performance by a receiver to protect the
Property.
22.4.3 Lessor shall be entitled to recover all money payable to Lessee
related to the operation and use of the Theater, all bank accounts,
accounts receivable, working capital and cash reserves (if any after
payment of Lessee's debts), and the balance in the Contributions
Fund.
ARTICLE 23 PERMITTED CONTESTS
Lessee, at no cost or expense to Lessor, may contest (after prior written notice to
29
Lessor), by appropriate legal proceedings conducted with due diligence, the amount or
validity or application, of any Imposition or lien, provided that the proceedings suspend
collection from Lessor and any action against the Property. If Lessee fails to contest
the matter, or fails to protect Lessor and Lessor's interest in the Property, Lessor may
contest or settle the matter in its sole discretion and obtain reimbursement from Lessee.
ARTICLE 24 ENTRY BY LESSOR
Lessor may enter the Property at reasonable times for the purpose of inspecting,
servicing or posting notices, protecting the Property and/or the Theater, or for any other
lawful purposes, including showing the Property to prospective purchasers or lessees.
ARTICLE 25 FORCE MAJEURE
Any prevention, delay, non-performance or stoppage due to any of the following causes
shall be excused: any regulation, order, act, restriction or requirement or limitation
imposed by any Federal, State or municipal government; acts of God; acts or omissions
of Lessor; fire, explosion or floods; strikes, walkouts or inability to obtain materials; war,
riots, sabotage or civil insurrection; or any other causes beyond the reasonable control
of Lessee.
ARTICLE 26 MISCELLANEOUS
26.1 Notices.
All notices and other communications shall be in writing, shall be sent by first
class registered or certified United States mail, postage prepaid, and shall be
deemed to have been given two (2) days after the day of mailing, addressed:
To Lessor;
City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA, 92658-8915
30
With a copy to:
City Attorney's Office
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA, 92658-8915
or at such other addresses as Lessor shall have furnished to Lessee; and
To Lessee;
Executive Director
Balboa Performing Arts Theater Foundation
P.O. Box 752
Balboa, CA 92661
26.2 No Claims Against Lessor
Nothing in this Lease constitutes any consent or request by Lessor for the
performance of any labor or services or the furnishing of any materials to the
Property
26.3 Integration
This Lease, and the exhibits, are the entire Agreement between the Parties, and
there are no agreements or representations between the Parties except those
specified in this Lease. This Lease supersedes any prior negotiations,
representations, discussions or agreements between the Parties with respect to
the Property and/or the Theater. Except as otherwise provided, no subsequent
change or addition to this Lease shall be binding unless in writing and signed by
the Parties.
26A No Waiver By Lessor
To the extent permitted by law, no failure by Lessor to insist upon the strict
performance of any term of this Lease, or to exercise any right, power or remedy
upon a Default under this Lease, shall constitute a waiver.
26.5 Severability
If any term of this Lease or any application thereof shall be declared invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Lease
shall not be affected. Unless otherwise expressly provided, any approval or
consent of Lessor required shall not be unreasonably withheld or delayed. This
31
Lease shall be binding upon and inure to the benefit of and be enforceable by
the respective successors of the parties.
26.6 Holding Over
A tenancy for month to month shall result if Lessee remains in possession of the
Property or the Theater with the consent of Lessor after the expiration of the
Term. The month to month tenancy shall be on the same terms and conditions
as contained in this Lease.
26.7 No Partnership
This Lease does not cause Lessor to be a partner of Lessee, a joint venturer
with Lessee, or a member of a joint enterprise of Lessee relative to the operation
of the Theater or otherwise.
26.8 Federal Funds Provisions
No Federal appropriated funds shall be paid, by or on behalf of Lessee to any
person for the purpose of influencing or attempting to influence an officer or
employee of any Federal agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with the
awarding of any Federal contract, the making of any Federal grant, the making of
any Federal loan, the entering into of any cooperative agreement, and the
extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement. If any funds other than Federal
appropriated funds have been paid or will be paid to any person for influencing
or attempting to influence an officer or employee of any agency, a Member of
Congress, and officer or employee of Congress or an employee of a Member of
Congress in connection with this Federal contract, grant, loan or cooperative
agreement, Lessee shall complete and submit Standard Form -LLL, "Disclosure
Form to Report Lobbying," in accordance with its instructions.
Lessee shall require that the language of this certification be included in the
award documents for all contracts, subcontracts, and agreements.
26.9 Time of the Essence
Time is of the essence relative to all of the terms, provisions, covenants and
conditions of this Lease.
(The next page is the signature page.)
32
0
FOR LESSOR
CITY OF NEWPORT BEACH
Tod W. Ridgeway
Mayor for City of N ort Bea
FOR LESSEE
BALBOA PERFORMING ARTS
THEATER FOUNDATION
Theater
11
Dated !'lt —Oq
of Directors of Balboa Performing Arts
APPROVED AS TO FORM
CITY OF NEWPORT BEACH:
Robin Clauson
Acting City Attorney for City of Newport Beach
ATTEST:
CITY OF NEWPORT BEACH
LaVonne Harkless
City Clerk for City of Newport Beach
Dated !"/&-o7
Dated 9 -,A o -o f
33
E
LEGAL DESCRIPTION
11
All that real property situated in the City of Newport Beach Counry of Orange, State of California and
more particularly described as follows:
Sots 4 and 5, Block 10, Balboa Tract, in the City of Newport Beach, as shown
on a map recorded in Book 4, Page(s) 11, of Miscellaneous Maps, in the office,
of the County Recorder of said County.
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2807234
Exhibit C
A. General and special taxes and assessments collected with taxes for the fiscal year
1998-1999.
Total:
First installment:
Second Installment:
$4,018.90
2,009.45 Open
2,009.45 Open
Homeowners' Exemption: $0
Code: 07-001
Parcel 048-135-02
B. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section
75, et seq. of the Revenue and Taxation Code of the State of Californla
1. Covenants, conditions and restrictions (deleting any restrictions indicating any
preference, limitation or discrimination based on race, color, religion, sex, handicap,
familial status or national origin) as set forth in the document
Recorded: in book 153 page 225 of Deeds
2.. Covenants, conditions and restrictions (deleting any restrictions indicating any
preference, limitation or discrimination based on race, color, religion, sex, handicap,
familial status or national origin) as set forth in the document
Recorded: in book 3377 page 501, Official Records
Said covenants, conditions and restrictions provide that a violation thereof sball not defeat
or render invalid the lien of any mortgage or deed of trust made in good faith and for
value.
3. Water rights, claims or title to water, whether or not shown by the public records.
4. Matters which may be disclosed by an inspection or by a survey of said land that is
satisfactory to this Company, or by inquiry of the parties in possession thereof.
An inspection of said land has been ordered; upon its completion we will advise you of our
findings.
CtsA Pm!4minaq Rcpoet Fo= (Rw. 111195) page i of 2
2807239
S. Rights of the parties in possession of said land, under unrecorded leases. Please
submit copies of said leases for our examination. .
6. Before issuing its policy of title insurance, this Company will require evidence,
satisfactory to the Company, that the vestee corporation named herein:
(a) was duly incorporated on the date of acquisition of title hereinafter set forth and
(b) is now of good standing in the state where it was formed:
Date of Acquisition: October 17, 1995
7. This Company will require a corporate resolution of the board of directors form the
corporation(s) vested .herein, authorizing this transaction and the execution of the documents
necessary to complete it in accordance with instructions given to the Company.
Note No. 1: The only conveyances affecting said land recorded within six (6) months of
the date of this report are as follows: None.
Note No. 2: The premium for a policy of title insurance, if issued, will be based on 80%.
cc: Land America Attn: Linda Hamiltoa
Page 2 of 2
CLTA Ptvl'unimq Rcport Form (Rev. 1!1/95)