HomeMy WebLinkAboutC-6353 - Harbor Island Drive, 15 - Lease Agreement 1994LEASE
TABLE OF CONTENTS
Clause Number and Name
Page
1.
DEFINITIONS ......................................
1
2.
PREMISES ........................................
1
3.
LIMITATION OF THE LEASEHOLD .......................
1
4.
USE .............................................
2
S.
TERM ...........................................
3
6.
RENT ............................................
3
7.
REVISION OF RENT .................................
3
8.
REAPPRAISAL OF RENT ..............................
4
9.
RENT PAYMENT PROCEDURE ..........................
6
10.
CHARGE FOR LATE PAYMENT .........................
7
11.
CONSTRUCTION AND/OR ALTERATION BY TENANT ..........
7
12.
MAINTENANCE OBLIGATIONS OF TENANT ............. . ...
8
13.
INSURANCE .......................................
8
14.
ASSIGNING, SUBLETTING AND ENCUMBERING .............
10
15.
STATE LANDS COMMISSION LEASING POLICY ..............
11
16.
NOTICES .........................................
11
17.
MEMORANDUM OF LEASE ............................
18.
ATTACHMENTS TO LEASE ............................
12
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LEASE
THIS LEASE is made by and between THE CITY OF NEWPORT BEACH, a Municipal
Corporation, hereinafter referred to as "LESSOR" and William F. Power and Marlene
Power, husband and wife, as community property, hereinafter referred to as "TENANT',
without regard to number and gender,
1. DEFINITIONS
The following words in this Lease have the significance attached to them in this clause
unless otherwise apparent from context:
"City Manager" means the City Manager of the City of Newport Beach or his or her
designee.
"Planning Department" means the Planning or other department of the City of Newport
Beach responsible for the processing or approval of development.
"Real Estate Director" means the City Manager of the City of Newport Beach or his
designated representative.
2. PREMISES
LESSOR leases to TENANT that certain property hereinafter referred to as "Premises",
shown on "Exhibit A", attached hereto and by reference made a part hereof, and described
as those filled tidelands lying between the extension of the sidelines of Lot #15 of Tract
802 from the adjudicated mean high tide line to the United States bulkhead line, excepting
therefrom those lands lying below the existing mean high tide line. Use of submerged
"water covered" tidelands areas is not provided for herein.
3. LIMITATION OF THE LEASEHOLD
This Lease and the rights and privileges granted TENANT in and to the Premises are
subject to all covenants, conditions, restrictions, and exceptions of record or apparent,
including those which are set out in the Tidelands Grant by the State of California to the
City of Newport Beach. Nothing contained in this Lease or in any document related hereto
shall be construed to imply the conveyance to TENANT of rights in the Premises which
exceed those owned by LESSOR, or any representation or warranty, either expressed or
implied, relating to the nature or condition of the Premises or LESSOR's interest therein.
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TENANT acknowledges that TENANT has conducted a complete and adequate
investigation of the Premises and that TENANT has accepted the Premises in its "as is"
condition.
4. USE
A. TENANT shall have the exclusive, private enjoyment of the Premises for
residential yard, landscaping and non -permanent recreational purposes as an
adjunct to the residence of those single family residences that adjoin the
Premises and can exclude public access during the term of the Lease,
consistent with the Statutes of the State of California and City Charter of the
City of Newport Beach.
As used in this Lease, landscaping and non -permanent recreational
improvements include the following:
I} Patios and decks;
2) Walks and steps, including dock access walks;
3) Planters and garden walls not exceeding 36 inches in height above
natural grade;
4) Benches;
S} Statues;
6} Landscaping;
7) Sprinkler systems;
$} Yard lighting;
9) Bulkheads and seawalls; and
10) Any and all improvements existing as of March 22, 1993.
TENANT agrees not to use the Premises for any other purpose nor to engage
in or permit any other activity within or from the Premises.
B. TENANT shall obtain prior written consent of LESSOR before the placement
of any improvements not listed above. Consent of LESSOR shall be obtained
through its Planning Department.
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5. TERM
The term of this Lease shall be forty-nine (49) years, commencing on March 22, 1993.
TENANT understands and agrees that this Lease is subject to automatic termination as
provided in Clause 13 (INSURANCE).
6. RENT
Commencing March 22, 1993 and continuing until adjusted pursuant to Clause 7 or 8 of this
Lease, TENANT agrees to pay as rent for the Premises the sum of $1,616.21 per year,
payable on or before March 22, 1993 and on or before each anniversary of the effective
date of this Lease thereafter, so long as tenancy continues. In the event the obligation to
pay rent terminates on some date other than the anniversary of the effective date of this
Lease, the rent shall be prorated to reflect the actual period of tenancy.
7. REVISION OF RENT
Every three years the rent specified in Clause 6 (RENT) shall be subject to automatic
adjustments in proportion to change in the Consumer Price Index for Los Angeles --
Anaheim --Riverside, CA (All Urban Consumers --All items 1982-84 =100) promulgated by
the Bureau of Labor Statistics of the U.S. Department of Labor (INDEX).
The first automatic adjustment shall be effective on March 22, 1994 and subsequent
adjustments shall be effective on the March 22 anniversary date every third year thereafter
(1997, 2000, etc.). Adjusted rent shall be calculated by means of the following formula:
A - $ x B
C
A = Adjusted Rent
B = INDEX for the fourth month prior to the month in which each rental rate
adjustment is to become effective.
For calculating 1994 and 1997 adjustments,
C = Monthly Index for March 1988 =
For calculating subsequent adjustments, C shall equal the Monthly Index for the most
recent effective date of reappraised rent as set forth in Clause 8 (REAPPRAISAL
OF RENT) (March 1998, March 2008, March 2018, March 2028 and March 2038).
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For calculating 1994 and 1997 adjustments, * shall equal base rent established for
March 1988, which is
Dollars ($ ).
For calculating subsequent adjustments, * shall equal the rent established for the
most recent effective date of reappraised rent as set forth in Clause 8
(REAPPRAISAL OF RENT) (March 22, 1998, March 22, 2008, March 22, 2018,
March 22, 2028 and March 22, 2038.
Notwithstanding the foregoing, in no event shall the annual rent be reduced by reason of
such adjustment.
In the event that the INDEX is not issued or published for the period for which such
annual rent is to be adjusted and computed hereunder, or that the Bureau of Labor
Statistics of the United States Department of Labor should cease to publish said index
figures, then any similar index published by any other branch or department of the United
States Government shall be used and if none is so published, then another index generally
recognized and authoritative shall be substituted by LESSOR.
8. REAPPRAISAL OF RENT
LESSOR and TENANT agree that rent payable pursuant to Clause 6 (RENT) and as
adjusted by Clause 7 (REVISION OF RENT) of this Lease, shall be subject to periodic
adjustment by reappraisal in five (5) years and every ten (10) years thereafter to be
effective on the following dates:
March 22, 1998,
March 22, 2008,
March 22, 2018,
March 22, 2028
March 22, 2038
It is the intent of LESSOR and TENANT that rent payable pursuant to Clause b (RENT)
of this Lease, shall be calculated by the following formula:
Rent = reappraised value of the Premises x .375 (thirty-seven and one-half percent)
x .09 (nine percent)
Note: (.375 is based upon 62.5% discount for land utilization i.e., 1.0 - .625 = .375;
.09 is based upon rate of return.)
LESSOR and TENANT shall begin the appraisal process to determine rent adjustment six
months prior to the effective date of said rent adjustment and shall use the following
procedure:
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A. LESSOR and TENANT shall, no less than 180 days prior to the next
scheduled rent adjustment, each employ a qualified real estate appraiser.
LESSOR shall use its reasonable efforts to provide TENANT written notice
of its obligation to employ an appraiser thirty (30) days prior to the date by
which the appraiser must be employed. LESSOR's failure to provide such
notice shall not relieve TENANT of obligation to employ an appraiser as set
forth in this Lease. The term "qualified real estate appraiser", as used herein
shall mean and refer to a real estate appraiser designated as a "senior"
member or equivalent by a nationally recognized appraisal organization,
hereinafter referred to as "appraiser", and who has at least five years
experience appraising this type of property.
1) In the event TENANT fails to employ an appraiser prior to this 180 -
day period and provide written notice to LESSOR of said employment,
then the appraiser employed by the LESSOR shall be the sole
appraiser responsible for determining the value of the Premises and
his opinion shall be binding upon LESSOR and TENANT.
2) LESSOR and TENANT shall be individually responsible for the fee
of the appraiser which it employs.
B. After selection of the appraiser(s), the Real Estate Director shall immediately
fix a time and place for a pre -appraisal meeting with the Real Estate Director,
TENANT, and the appraiser(s).
1) At or before the pre -appraisal meeting, the Real Estate Director shall
provide the appraiser(s) with a "Scope of Work".
2) The appraiser(s) shall, within 120 days after the pre -appraisal meeting,
prepare and deliver to LESSOR and TENANT two copies of a fully
documented written report, prepared in accordance with the Scope of
Work, containing the appraiser's independent opinion of the value of
the Premises.
C. The rent adjustment shall be determined as follows:
1) If only one appraisal is submitted within the 120 -day period, then the
rent adjustment shall be based on the estimated value of the Premises
as set forth in that appraisal. The rent shall then be determined using
the formula set forth above in this Clause 8 (REAPPRAISAL RENT).
2) If two appraisals are submitted within the 120 -day period, then the rent
adjustment shall be on the mathematical average of the estimated value
of the Premises of the two appraisals, provided the lower of the two
appraisal values is equal to or greater than ninety percent (90%'0) of the
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higher of the two appraisal values.
using the formula set forth above
OF RENT).
The rent shall then be determined
in this Clause 8 (REAPPRAISAL
D. In the event two appraisals are submitted but the value of the lower is less
than ninety percent (90%) of the higher of the two values, the Real Estate
Director shall independently select a third appraiser.
1) The third appraiser shall then have sixty (50) days after its appointment
to prepare and deliver to LESSOR and TENANT two (2) copies of a
fully documented written report prepared in accordance with the Scope
of Work containing that appraiser's independent opinion of the value
of the Premises. LESSOR and TENANT shall each pay one half of
the fee of the third appraiser.
2) In the event the third appraisal is required, the reappraised value for
determining the rent adjustment shall be based on the mathematical
average of the two appraisals with the closest estimated values and the
Rent shall then be determined by using the formula set forth above in
this Clause 8 (REAPPRAISAL OF RENT)..
E. LESSOR and TENANT agree to be bound to the herein described rent
adjustment without further dispute.
In no event shall adjusted rent be less than rent payable immediately prior
to the subject rent reappraisal date.
Should the adjusted annual rent be determined subsequent to the effective
date thereof, said adjusted annual rent shall be retroactive to that date.
TENANT shall pay all retroactive rent, without penalty, within 34 days after
receipt of notice from LESSOR of the amount of retroactive rent due.
F. Appraisals or discount factors used for the purposes of rent calculation or
adjustment, as provided in this Lease, shall be used only to set consideration
for this Lease subject to terms and conditions hereof.
G. Alternately, LESSOR and TENANT may mutually elect to utilize the
reappraisal of rent as determined by a like procedure conducted by the
County of Orange and its tidelands tenants on Harbor Island.
9. RENT PAYMENT PROCEDURE
LESSOR shall use its reasonable efforts to provide TENANT with a written statement of
the rent due on or before thirty (30) days prior to the date each rent payment is due.
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LESSOR's failure to provide such written notice shall in no way relieve TENANT of its
obligation to pay all rent required by this Lease as and when due.
Rent payments shall be delivered or sent by U.S. Mail to Finance Director, City of Newport
Beach, 3304 Newport Blvd., Newport Beach, CA 92663. The designated place of payment
may be changed at any time by LESSOR upon ten (10) days written notice to TENANT.
Rent payments shall be made payable to the City of Newport Beach. TENANT assumes
all risk of loss if payments are made by mail.
All rental shall be paid in lawful money to the United States of America, without offset or
deduction or prior notice or demand. No payment by TENANT or receipt by LESSOR of
a lesser amount than the rent due shall be deemed to be other than on account of the rent
due, nor shall any endorsement or statement on any check or any letter accompanying any
check or payment as rent be deemed an accord and satisfaction, and LESSOR shall accept
such payment without prejudice to LESSOR's right to recover the balance of said rent or
pursue any other remedy in this Lease.
10. CHARGE FOR LATE PAYMENT
TENANT hereby acknowledges that the late payment of rent or any other sums due
hereunder will cause LESSOR to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such costs include but are not
limited to costs such as administrative processing of delinquent notices, increased accounting
costs, etc.
Accordingly, if any payment of rent as specified in Clause 6 (RENT) or of any other sum
due LESSOR is not received by LESSOR by the due date, a late charge of one and one-
half percent (1.5%) of the payment due and unpaid plus $100 shall be added to the
payment, and the total sum shall become immediately due and payable to LESSOR. An
additional charge of one and one-half percent (1.5%) of said payment, excluding late
charges, shall be added for each additional month that said payment remains unpaid.
TENANT and LESSOR hereby agree that such late charges represent a fair and reasonable
estimate of the costs that LESSOR will incur by reason of TENANT's late payment.
Acceptance of such late charges (and/or any portion of the overdue payment) by LESSOR
shall in no event constitute a waiver of TENANT's default with respect to such overdue
payment, or prevent LESSOR from exercising any of the other rights and remedies granted
hereunder.
11. CONSTRUCTION AND/OR ALTERATION BY TENANT
No structures, improvements, or facilities other than those listed in Clause 4 (USE) of this
Lease shall be constructed, erected, altered, or made within the Premises without prior
written consent of LESSOR. Any conditions relating to the manner, method, design and
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construction of said structures, improvements, or facilities fixed by the LESSOR shall be
conditions hereof as though originally stated herein.
All improvements constructed by TENANT within the Premises shall be constructed in
strict compliance with detailed plans and specifications approved by LESSOR.
12. MAINTENANCE OBLIGATIONS OF TENANT
TENANT shall keep and maintain the Premises and all improvements of any kind which
may be erected, installed or made thereon in good condition and in substantial repair. It
shall be TENANT's responsibility to take all steps necessary or appropriate to maintain
such a standard of condition and repair.
TENANT expressly agrees to maintain the Premises in a safe and clean condition, to the
reasonable satisfaction of LESSOR and in compliance with all applicable laws.
If TENANT fails to maintain or make repairs or replacements as required, LESSOR shall
notify TENANT in writing of said failure. Should TENANT fail to correct the situation
within three days after receipt of written notice, LESSOR may make the necessary
correction or cause it to be made and the cost thereof, including but not limited to the cost
of labor, materials, and equipment and administration, shall be paid by TENANT within
ten (10) days of receipt of a statement of said cost from LESSOR. LESSOR may at its
option, choose other remedies available herein, or by law.
13. INSURANCE
TENANT fully understands that it is extremely important that TENANT shall maintain
insurance acceptable to LESSOR in full force and effect throughout the term of this Lease.
The policy or policies of insurance maintained by TENANT shall provide the following
limits and coverages:
Coverage Minimum Limit
General Comprehensive Liability $500,000
Insurance shall be in force the first day of the term of this Lease.
Each liability insurance policy required by this Lease shall contain the following three
clauses:
A. "This insurance shall not be cancelled, limited in scope of coverage or non -
renewed until after 30 days written notice has been given to the City of
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Newport Beach, City Manager, 3300 Newport Blvd., Newport Beach,
California, 92663,"
B. "City of Newport Beach and the State of California are added as additional
named insureds as respects activities of the named insured at or from
Premises leased from the City of Newport Beach".
C. "It is agreed that any insurance maintained by the City of Newport Beach and
the State of California will apply in excess of, and contribute with, insurance
provided by this policy".
TENANT agrees to maintain insurance necessary to satisfy City Manager, that all provisions
of this Lease have been complied with, and to keep such insurance in effect and to deposit
certificates of insurance upon demand with the City Manager during the entire term of this
Lease.
THIS LEASE SHALL AUTOMATICALLY TERMINATE AT THE SAME TIME
TENANT'S INSURANCE COVERAGE IS TERMINATED. IF, WITHIN TEN (10)
DAYS AFTER TERMINATION UNDER THIS CLAUSE, TENANT OBTAINS AND
PROVIDES EVIDENCE OF THE REQUIRED INSURANCE COVERAGE
ACCEPTABLE TO CITY MANAGER, THIS LEASE MAY BE REINSTATED AT THE
SOLE DISCRETION OF CITY MANAGER. IF REINSTATED, TENANT SHALL PAY
FIVE HUNDRED DOLLARS ($500) TO COVER THE PROCESSING COSTS
INCURRED BY CITY MANAGER.
City Manager shall retain the right at any time to review the coverage, form, and amount
of the insurance required hereby. If, in the opinion of City Manager, insurance provisions
in this Lease do not provide adequate protection for LESSOR, City Manager may require
TENANT to obtain insurance sufficient in coverage, form, and amount to provide adequate
protection. City Manager's requirements shall be reasonable but shall be designed to assure
protection from and against the kind and extent of the risks, with respect to the Premises
and allowable uses thereof, which exist at the time a change in insurance is required.
City Manager shall notify TENANT in writing of changes in the insurance requirements;
and if TENANT does not deliver copies of acceptable insurance policies with City Manager
incorporating such changes within thirty days of receipt of such notice, this Lease shall be
in default without further notice to TENANT, and LESSOR shall have the sole right to
terminate this Lease in addition to other remedies available.
The procuring of such required policy or policies of insurance shall not be construed to
limit TENANT's liability hereunder nor to fulfill the indemnification provisions and
requirements of this Lease.
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14, ASSIGNING, SUBLETTING AND ENCUMBERING
A. Assignment
TENANT shall not transfer interest in this Lease without the prior written
approval of the City Manager except as provided in paragraph C below of this
Clause. As a condition of the City Manager's approval, TENANT shall notify
the City Manager of the identity of the proposed TENANT and provide a
copy of documentation of the transfer of interest.
Approval shall not be withheld or delayed provided said transfer of interest
occurs concurrently with the transfer of ownership of the adjacent and
contiguous residential property and the proposed transfer of interest is to the
Grantee of such residential property.
In the event TENANT has provided City Manager proper notice, as set forth
in Clause 16 (NOTICES), of transfer of its interest in this Lease, and City
Manager has not responded to TENANT within sixty (60) days of receipt of
such notice, City Manager's approval of said transfer shall be deemed granted
provided copies of documentation of said transfer have been received by the
City Manager as set forth in this Clause.
Upon written approval of transfer of its interest, TENANT is released of any
obligations of this Lease, provided no default of the terms of this Lease exists
including payment of all rent due to LESSOR as set forth in Clause 6
(RENT) and Clause 10 (CHARGE FOR LATE PAYMENT).
Failure to obtain City Manager's approval or deemed approval of transfer of
interest shall render such transfer void.
Occupancy of the Premises by a prospective transferee or assignee without
approval of the transfer or assignment by the City Manager shall constitute
a breach of this Lease.
Any document used for the purpose of transfer or assignment of the Premises
or any part thereof, shall not be inconsistent with the provisions of this Lease
and in the event of any such inconsistency, the provisions of this Lease shall
control.
B. Subletting
Prior approval of the City Manager shall be required for TENANT to enter
into subleases with those residents whose properties adjoin the Premises. All
subleases shall be between TENANT and sublessee; the entry into sub -
subleases is prohibited and shall constitute a breach of this Lease.
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C. Encumbrance -
TENANT shall not pledge, hypothecate, mortgage or encumber its interest
in this Lease except to convey a security interest to a lender whose loan is
also secured by the residential property which is adjacent and contiguous with
the premises. The prior written consent of the LESSOR shall not be required
for transfer of LESSEE's interest in the Lease to or from any such lender
subject to the following covenants and conditions:
1) Said loan and all rights acquired thereunder shall be subject to each
and all of the covenants, conditions and restrictions set forth in this
Lease and to all rights and interest of LESSOR hereinunder.
2) In the event of any conflict between the provisions of this Lease and
the provisions of any loan document, the provisions of this Lease shall
control.
3) In the event any such lender subsequently acquires TENANT's interest
in this Lease as a result of a foreclosure of its security interest, or an
assignment in lieu thereof, such lender shall remain liable for the
payment of rent and performance of all other terms, covenants and
conditions hereunder only until lender assigns its interest in this Lease.
15. STATE LANDS COMMISSION LEASING POLICY
LESSOR and TENANT acknowledge that the consideration for this Lease and any other
terms and conditions provided in this Lease do not necessarily reflect the leasing policy of
the State Lands Commission. The method for determining rent provided in this Lease shall
not be used for the purpose of establishing rent in any future agreements involving filled
or unfilled tide or submerged land.
16. NOTICES
All notices pursuant to this Lease shall be addressed as set forth below or as either party
may hereafter designate by written notice and shall be sent through the United States mail
in the State of California, duly registered or certified, return receipt requested, with postage
prepaid. If any notice is sent by registered or certified mail, as aforesaid, the same shall
be deemed to have been served or delivered twenty-four (24) hours after mailing thereof
as above provided. Notwithstanding the above, LESSOR may also provide notices to
TENANT by personal delivery or by regular mail and any such notice so given shall be
deemed to have been given upon receipt.
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LESSOR
City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
TENANT
William F. Power and
Marlene Power
16 Harbor Island
Newport Beach, CA 92660
LESSOR shall provide access to and/or a copy of the Lease to TENANT and successors
upon request to the following office:
City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
17. MEMORANDUM OF LEASE
In order to impart constructive notice of TENANT's obligations under the terms of this
Lease, TENANT shall cause any prospective transferee or assignee to sign the
"Memorandum of Lease", in a form as shown on "Exhibit B", attached hereto and made a
part hereof, and have the signature notarized. The signed and notarized Memorandum of
Lease shall be submitted to the City Manager as part of the documentation of the transfer
of interest as set forth in Clause 14 (ASSIGNING, SUBLETTING AND
ENCUMBERING).
18. AYFACHMENTS TO LEASE
This Lease includes the following, which are attached hereto and made a part hereof:
GENERAL CONDITIONS -- (21 Clauses)
EXHIBIT A (Location Map)
EXHIBIT B (Memorandum of Lease)
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IN WITNESS WHEREOF, the parties have executed this Lease the day and year first
indicated.
LESSOR
CITY OF NEWPOR BEACH
Mayor
Date: 13 - 0 - q "�
A,PPRO ED AS TO FORM:
CITY ORNEY
By:
ATTEST
CITY CLERK
TENANT
William F.
lene Power
Date:
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