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HomeMy WebLinkAbout07 - Lease Agreement NMUSD, Authorizing the Lease of Playground Area on Tidelands and Filled Lands for Joint Use with Newport Elementary School Located at 1327 West Balboa BoulevardCITY OF NEWPORT BEACH City Council Staff Report February 10, 2015 Agenda Item No. 7 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Kimberly Brandt, Community Development Director — (949) 644 -3226, kbrandt@newportbeachca.gov PREPARED BY: Lauren Whitlinger, Real Property Ad min istrator /Seimone Jurjis, PE, CBO, Chief Building Official PHONE: (949) 644 -3236 TITLE: Lease Agreement between the City of Newport Beach and Newport -Mesa Unified School District, Authorizing the Lease of Playground Area on Tidelands and Filled Lands for Joint Use with Newport Elementary School Located at 1327 West Balboa Boulevard ABSTRACT: Newport-Mesa Unified School District requests to enter into a new 50 -year lease for the existing Newport Elementary School playground area located upon tidelands and filled lands that are situated on the beach side of Ocean Front between the southerly extensions of 13th Street and 14th Street on the Balboa Peninsula. This lease will allow the playground to continue to be available to the school for outdoor activities. RECOMMENDATION: a) Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to 15060(c)(2) (the activity will not result in a direct or reasonably forseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; b) Approve and authorize the Mayor and City Clerk to execute a 50 -year lease agreement (Staff Report Attachment CC 1) with Newport-Mesa Unified School District; and c) Approve a waiver of City Council Policy F -7 based on the findings contained in the staff report and lease agreement. 7 -1 FUNDING REQUIREMENTS: The current adopted budget reflects no lease revenue from Newport-Mesa Unified School District for the use of the playground at Newport Elementary School. No revenue is contemplated under the terms of the proposed lease agreement. DISCUSSION: Background Newport-Mesa Unified School District (District) has operated Newport Elementary School (School) on the Balboa Peninsula since the 1920's. In 1960 the City of Newport Beach (City) entered into a 50 -year lease agreement (Attachment CC 2) with the District for use of a portion of the public tidelands for the playground. The lease expired in 2010, and the District requests to enter into a new lease to allow for continued joint use of the approximately 3.5 acres of playground area. The playground, tidelands in trust to the City by virtue of a grant from the State (per Chapter 74 of Statutes of 1978, as amended), is located adjacent to the School on the beach side between the southerly extensions of 13th and 14th Streets (see map, Attachment CC 3). Newport Elementary is a public elementary school, with students in kindergarten through 6th grade, and operates weekdays during the school year from 8:00 a.m. to 2:35 p.m. The school uses the playground area during regular school hours for recess and other outdoor activities. Additionally, the City's Recreation and Senior Services Department utilizes the playground for programmed activities after regular school hours and on weekends and holidays. When not in use by the School or City, the playground is open to the public for general recreational use. The District proposes to continue operating the playground in its current layout and configuration, which includes a grass playfield, blacktop and sand playground areas. A school parents group has proposed to upgrade the existing improvements by building new retaining walls and leveling the grass playfield area, and adding stairs for convenient access. The improvement project is subject to California Coastal Commission approval, and the City is processing the Coastal Development Permit which is expected to be approved in the spring of 2015. The parents group will obtain the necessary building permits, and is coordinating with the City and District for approval prior to installation of the proposed improvements. District Approval On November 18, 2014, the District Board of Education approved the proposed lease renewal and authorized the Deputy Superintendent to execute the agreement. The lease was executed (Attachment CC 1) on November 19, 2014, and returned to the City for processing with the City Council. City Council Policy F -7, Income Property The City manages income property assets under specific guidelines in accordance with City Council Policy F -7, Income Property (Attachment CC 4). The guidelines are: (a) determine the maximum, open market, highest and best use and value of property; (b) negotiate terms utilizing the analysis of a professional appraiser or consultant; (c) seek to operate facilities with City or contract staff; and (d) solicit proposals via open bid to obtain revenue consistent with open market value and the highest financial return. Since the lease amount is zero dollars, findings must be made when less than the open market value is received. Staff believes that the following findings can be made: 1. The District's use of the property provides an essential and unique service to the community in that it provides for a public elementary school playground, which might not otherwise be provided because of space limitations at Newport Elementary School. 7 -2 2. Charging less than open market value of the property allows for continued use and operation by Newport Elementary School and accessibility to the public, which may not otherwise be provided if an appraisal was obtained and full market value of the property was required. 3. The property serves to promote the goals of the City, such as preservation of open space, education, and other related recreation services and activities. About Tidelands A recital in the lease (Recital 1) as well as one of the Lease's sections (Section 3.1) state the City's findings that this property provides unique public access which is of statewide concern, and that this access may not otherwise be provided were full market value of the property required. Additionally, charging less than fair market value here allows for continued operation of Newport Elementary School and accessibility to the public - this benefits the citizens of the State of California. Proposed Agreement The proposed terms of the Lease Agreement are summarized below: 1. The term of the agreement will be for 50 years with no extension options. 2. Rent shall be set at $0 per year. 3. District may operate the property as an elementary school playground, including a grass playfield, blacktop playground, and sand playground. 4. City and District shall share use of the property for programs and services available to the public. Use of the property shall be as follows: School Year (Monday through Friday) — (a) 6:00 a.m. to 3:00 p.m. — Use by District, (b) 3:00 p.m. to 6:00 p.m. —joint use by City and District, with City having priority, (c) 6:00 p.m. to 10:00 p.m. — use by City. Weekends, School Holidays, and Summer Vacation Periods — (a) 6:00 a.m. to 10:00 p.m. — use by City, unless otherwise authorized by City in writing. 5. District is responsible for operation and maintenance and repair of the lease premises, at its sole cost and without expense to the City. 6. District shall obtain prior written consent from City for any projects, modifications, or improvements on the property, and shall not, with the exception of playground equipment, construct any buildings or fences on the property without prior written approval of the City Council. 7. Insurance and indemnity provisions are mutual between City and District, and are otherwise consistent with current standards; all other lease terms are consistent with the City's standard terms. This agreement has been reviewed by the City Attorney's office and has been approved as to form. Contract Summary Vendor Name Newport -Mesa Unified School District Term 50 years Date Entered Into Feb -1960 Cost /Year $0 Approval Body (City Mgr, Dept Head, or City Council) City Council 7 -3 Proposed Vendor Name Newport-Mesa Unified School District Term 50 Years Escalation Clause N/A Cost /Year $0 Cost /Contract Term (est) $0 ENVIRONMENTAL REVIEW: The recommended action is not subject to result in a direct or reasonably foreseeable (the activity is not a project as defined in Regulations, Title 14, Chapter 3, because environment, directly or indirectly. NOTICING: CEQA pursuant to Sections 15060(c)(2) (the activity will not indirect physical change in the environment) and 15060(c)(3) Section 15378) of the CEQA Guidelines, California Code of it has no potential for resulting in physical change to the The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment CC 1 - Proposed Lease Aareement Attachment CC 2 - Expired 1960 Lease Agreement Attachment CC 3 - Maps Attachment CC 4 - City Council Policy F -7 - Income Property 7 -4 ATTACHMENT CC 1 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Dr. P.O. Box 1768 Newport Beach, California 92658 -8915 Attn: City Clerk (Exempt From Recording Fees Pursuant to Government Code § 27383) (SPACE ABOVE THIS LINE FOR RECORDER'S USE) LEASE AGREEMENT WITH NEWPORT -MESA UNIFIED SCHOOL DISTRICT FOR NEWPORT ELEMENTARY SCHOOL PLAYGROUND 7 -5 LEASE AGREEMENT WITH NEWPORT -MESA UNIFIED SCHOOL DISTRICT FOR NEWPORT ELEMENTARY SCHOOL PLAYGROUND THIS LEASE AGREEMENT ( "Lease ") is made and entered into this day of , 2014, ( "Effective Date ") between the CITY OF NEWPORT BEACH, a California municipal corporation and charter City ( "City "), and the NEWPORT -MESA UNIFIED SCHOOL DISTRICT, a political subdivision of the State of California ( "District "), whose address is 2985 Bear St., Costa Mesa, CA 92626 and is made with reference to the following: RECITALS A. City is the trustee of the tidelands and filled lands in the corporate limits of the City lying southerly of Ocean Front between the southerly extension of 13th Street and the southerly extension of 14th Street, hereinafter more particularly described, by virtue of a grant from the State of California set out in Chapter 74 of Statutes of 1978, as amended ( "Property ") the Property is more particularly described in Exhibit "A" and depicted in Exhibit "B ", both of which are attached hereto and incorporated by reference; and B. City has a perpetual easement for street, park, and public pleasure purposes over Block 13A, Section B, of Newport Beach, which lies between the southerly extensions of 13th and 14th Streets and between Ocean Front and said tidelands and filled lands as shown on a map recorded in Book 4, page 27, Miscellaneous Maps, Records of Orange county, California; and C. District owns Block 13 of Newport Beach, as per map recorded in Book 4, page 27, of said maps, which lies between 13th Street and 14th Street and between Balboa Boulevard and Ocean Front; and D. District operates a public elementary school (Newport Elementary School) on said Block 13 and uses, and has need for the use of, said Block 13A and the adjoining tidelands and filled lands oceanward of said Block 13 in connection with said school for playground purposes; and E. The City and District first entered into a lease agreement for the Property on February 1, 1960 pursuant to authority conferred by the electors and Chapter 813 of the Statues of 1929; and F. The leasing of the tidelands and filled lands hereinafter described to the District for the purpose and under the terms and conditions set out herein would not interfere with or be inconsistent with, the requirements of commerce or navigation at Newport Harbor and is not inconsistent with the title upon which said land is held; and G. The trespass rights hereby granted over the City's easement on said Block 13A under the terms and conditions set out herein are not inconsistent with the grant 7 -6 of easement to City over said Block 13A, Section B; and H. The City is prevented by tideland grants, Coastal Commission guidelines and other reservations from selling the Property; and Pursuant to the Newport Beach Municipal Code, the Beacon Bay Bill (statutes of 1978, as amended) and City Council Policy F -7, the City finds that the Property provides an essential and unique service to the community in that it provides for a public elementary school playground that is of a statewide concern and that might not otherwise be provided were full market value of the property required or an open bid process conducted. NOW THEREFORE, the Parties agree that: 1. TERM 1.1 City hereby leases the Property to District for playfield purposes only, as described in this Lease, and subject to the terms and conditions herein contained, for a term of fifty (50) years beginning on the Effective Date. The portion of the school which is leased to the District consists of the grass playfield, blacktop playground, and sand playground. 1.2 City and District may amend the terms of this Lease at any time during the term hereof to better serve the public interest or better accomplish the purposes of the lease; provided, however, that the term hereof may not be extended by the City and District beyond fifty (50) years herein provided. 1.3 Termination. Upon one (1) year prior written notice, City and District shall each have the right to terminate this Lease without cause. 2. AGREEMENT TO LEASE 2.1 Net Lease. This Lease is a net lease, pursuant to which City has no obligation with respect to the payment of taxes, insurance, the cost of maintenance, utilities, repairs or other costs or obligations associated with the Property, except as expressly stated herein. 2.2 Termination of Prior Lease(s). District affirmatively represents that: (a) to the best of District's knowledge, no other person /entity has any interest, whether by lease or otherwise, in the Property; and (b) the person(s) executing this Lease have the authority to bind the District and be bound by the terms herein. Upon the execution of this Lease, any lease(s) between the City and the District or any other party covering the Property shall automatically terminate and be of no further effect. District shall execute and record any document(s) that may be required by City to evidence the termination of any prior lease(s) covering the Property. City shall owe no compensation to District or any other party for the termination of a lease under this section. District shall indemnify and hold the City harmless from any and all liability, loss, expense, LEASE AGREEMENT Page 2 7 -7 damage, or claims which may arise directly or indirectly from or in connection with any allegation that the representations made is this section are false. 2.3 Reservation of Mineral Rights. City expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Property and the right to grant and transfer the same, together with all necessary and convenient rights to explore for, develop, produce and extract and take the same, subject to the express limitation that any and all operations shall be carried on at levels below the depth of five hundred feet (500') from the surface of the land by means of wells, derricks and other equipment from surface locations on adjoining or neighboring land, and subject further to all restrictions and regulations concerning the drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon substances specified in the City's Charter and Municipal Code and Tidelands Grant. 3. RENT 3.1 The consideration charged under this Lease shall be non - monetary and instead based upon the District fulfilling all of the obligations provided herein. Charging less than fair market value rent for the Property allows for continued operation of Newport Elementary School and accessibility to the public. Thus, the charging of less than fair market value rent for the Property is a matter of state -wide concern that benefits the citizens of the State of California. Pursuant to City Council Policy F- 7(E)(6), the City Council finds that the charging of less than fair market value rent for the Property promotes the goals of the City to further marine related services and activities. 4. LICENSE AND RIGHT OF TRESPASS 4.1 City hereby grants a license and right of trespass to District for playground purposes only, subject to the terms and conditions herein contained, for a term of fifty (50) years beginning on the Effective Date, over that certain parcel of land in the City between the southerly extension of 13th Street and the southerly extension of 14t Street, more particularly described as: 4.1.1 Block 13A, Section B, Newport Beach, as per map recorded in Book 4, page 27, of Miscellaneous Maps, Records of Orange County, California. 5. USE AND CONDITION OF PROPERTY 5.1 Use. District shall use the Property to provide a playground area for use by children participating in activities of the public school on said Block 13 and for use by the public for park and pleasure purposes when the same is not being used by the school. 5.1.1 Shared Use. City and District shall use the Property for programs and services available to the public on fair and reasonable terms in accordance with the following schedule: 5.1.2 School Year (Monday through Friday) LEASE AGREEMENT Page 3 em (a) 6:00 a.m. to 3:00 p.m. — use by District, (b) 3:00 p.m. to 6:00 p.m. — joint use by City and District, with City having priority. (c) 6:00 to 10:00 p.m. — use by City. 5.1.3 Weekends, School Holidays, and Summer Vacation Periods (a) 6:00 a.m. to 10:00 p.m. — use by City, unless otherwise authorized by City in writing. 5.2 Buildings. District shall not construct any buildings or fences on the Property without the prior written approval of the City Council, but may place and maintain playground equipment on the Property, which shall be the property of District and not of the City. 5.3 Compliance with Laws. District shall comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Property when constructing, making, or causing to be made, any additions, alterations or repairs to any structure or improvement on the Property which may be required, including, but not limited to, the California Environmental Quality Act ( "CEQA ") and the California Coastal Act. Any third party constructing structures or improvements, and /or performing additions, alterations or repairs to any structure or improvement on the Property shall at its own cost comply with all applicable laws and obtain all required approvals (e.g., Coastal Development Permit, etc.). District and /or third party shall indemnify, defend and hold City harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to District's and /or third party's failure to comply with, and perform pursuant to provisions of this Lease. All repairs, additions, and alterations to the structures or improvements on the Property shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of District or the third party performing the work. Notwithstanding District's obligations under this Section 5.3 and Section 6 below, City may, in its sole and absolute discretion, assist with or take the lead in processing entitlements or permits for any project undertaken by the District, or a third party 5.4 As Is Condition of Property. District expressly accepts the Property "as is" and acknowledges that City has made no representations or warranties as to the suitability of the Property for any construction or improvement. District shall conduct all tests necessary to determine the suitability of the Property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. District expressly acknowledges that City shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Property or adjacent property. District expressly acknowledges that, while the legislature of the State of California has purportedly authorized the uses and purposes established in the Lease, the Property may constitute filled tidelands, and District has LEASE AGREEMENT Page 4 7 -9 made no representation or warranty relative to the validity of Chapter 74 of the Statutes of 1978, as amended, or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of City to lease the Property for the purposes provided in this Lease, City agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of City to lease the Property for the purposes provided in this Lease. 5.5 Tidelands Grant. The Property may be located on land that is the subject of a Tidelands Grant from the State of California to the City. District shall not take any action that would cause the City to be in violation of any provisions of that Tidelands Grant. If the Property is located upon tidelands and the State of California terminates, or modifies the Tidelands Grant to prohibit the uses contemplated under this Lease, this Lease shall terminate as a result and the Parties shall be released from all liabilities and obligations under this Lease and City shall owe no compensation to District. 6. IMPROVEMENTS District shall obtain the prior written consent of City prior to constructing, or allowing a third -party to construct, any project(s), modification(s) or improvements on the Property, which consent shall not be unreasonably withheld by City. If constructed by a third -party, the contract shall specifically reference this Lease and shall require the third -party to indemnify the City and provide a performance and material bond, in favor of the City and District, to ensure the modifications are properly constructed. Upon completion, the modifications shall be maintained by the District in accordance with Section 7. 7. MAINTENANCE BY DISTRICT 7.1 District assumes full responsibility for operation and maintenance and repair of the Property and all improvements throughout the Term at its sole cost and without expense to the City. 7.1.1 Without limiting District's obligations to maintain the Property, District shall keep and maintain all Improvements in good order, condition and repair consistent with similar school properties in Newport Beach. 7.1.2 District expressly waives (a) the right to require City to make repairs; (b) any right to make repairs at the expense of City. 8. TRANSFER OR SALE OF PROPERTY 8.1 Sale or Discontinued Operation. Should the District sell Block 13 on which the elementary school is located, or any part thereof, or should the District discontinue the operation of the public school on said Block 13 for a period of one (1) year, then this Lease, and the license, and the right of trespass hereby granted shall automatically LEASE AGREEMENT Page 5 7 -10 terminate and City may re -enter the Property and take possession thereof and remove all persons and property therefrom. 8.2 Assignment. The District shall not assign this Lease or license or any right acquired hereunder without the prior written consent of City. Any assignment without the prior written consent of the City is null and void. 9. RIGHT TO ENTER 9.1 Right to Enter. Notwithstanding, this Lease and the license and right of trespass granted to District, City reserves the right to enter the land or any part thereof to construct and maintain groins, bulkheads, or breakwaters to protect said Property and other land within City from damage or erosion; provided, however, that nothing contained herein shall require the City to construct or maintain groins, bulkheads, or breakwaters on the Property or elsewhere. 9.2 Easements. Subject to applicable provisions of law, it is understood that all rights granted hereunder are subject to easements, rights -of -way, and similar burdens, if any, now existing or heretofore granted by City or its predecessors, in, to, over, or under the Property for any purpose. 10. RESTORATION AND ENVIRONMENTAL MATTERS 10.1 Restoration of the Property. Should any improvements on the Property be damaged or destroyed by fire or other casualty or any cause whatsoever, District will cause the commencement of reconstruction to the damaged or destroyed improvements within ninety (90) calendar days, or such other time period as may be mutually agreed upon by the Parties, after such damage and destruction and will thereafter cause such reconstruction to be diligently prosecuted to completion. 10.2 Environmental Matters. 10.2.1 Definitions. The following terms will be defined as follows: (a) Environmental Law. "Environmental Law" shall include all federal, state, and local environmental, health, and safety laws, statutes, ordinances, regulations, rules, judgments, orders, and notice requirements, which were in effect as of the date of closing, which regulate or relate to (a) the protection or clean -up of the environment; (b) the use, treatment, storage, transportation, handling or disposal of hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the quality of the air and the discharge of airborne wastes, gases, particles, or other emissions; (d) the preservation or protection of waterways, groundwater, or drinking water; (e) the health and safety of persons or property; or (6) impose liability with respect to any of the foregoing, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances LEASE AGREEMENT Page 6 7 -11 Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter - Cologne Water Quality Act [Water C §§ 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above. (b) Hazardous Materials. "Hazardous Materials" shall include any substance which falls within the definition of hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, or pollutant or contaminant, under any Environmental Law. 10.3 District's Obligations. District will not use, occupy, or permit any portion of the Property to be used or occupied in violation of any Environmental Law or to store any Hazardous Material. 10.4 Environmental Indemnity. District shall indemnify, defend, and hold City and its City Council, officers, appointees, volunteers, employees, agents, successors and assigns free and harmless from and against all Damages (as defined below) that may at any time be imposed upon, incurred by, or asserted or awarded against City or any of them in connection with or arising from any breach of District's obligations hereunder or out of any violation by District of any Environmental Law; or resulting in the imposition of any lien or claim for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Materials due to the construction of any improvements on the Property or the use or misuse of the Property by the District. The term "Damages" shall mean all liabilities, demands, claims, actions or causes of action, regulatory, legislative or judicial proceedings, assessments, levies, losses, fines, penalties, damages, costs and expenses, in each case as awarded by a court or arbitrator, including, without limitation: (i) reasonable attorneys', accountants', investigators', and experts' fees and expenses sustained or incurred in connection with the defense or investigation of any such liability, and (ii) costs and expenses incurred to bring the Property into compliance with Environmental Laws. The term "Damages" also includes, expressly, those Damages that arise as a result of strict liability, whether arising under Environmental Laws and regulations or otherwise. District's obligations hereunder will survive the expiration or sooner termination of this Lease. LEASE AGREEMENT Page 7 7 -12 11. INDEMNITY 11.1 District shall defend, indemnify and hold harmless City, its officers, directors, employees, agents and representatives from and against any and all legal or administrative proceedings, claims, reasonable attorneys' fees and costs, expenses, penalties, actual damages, including indemnity claims, in any way related to District's (i) 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 10.2.1(b)) on the Property by District or any agent of District, (iv) compliance or non- compliance with any federal, state or local environmental law, ordinance, rule or regulation, (v) any accident or injury to, or death of, persons or damage to property occurring on or about the Property (vi) the removal, clean -up, encapsulation, detoxification or any other action taken by Lessee or any agent of District, directly or indirectly arising out of the presence of Hazardous Materials in, on or around the Property. If the storage, use and disposal of Hazardous Materials on the Property is caused by the District or any agent of District and results in contamination or deterioration of water or soil resulting in a level of contamination greater than maximum allowable levels established by any governmental agency having jurisdiction over such contamination, Lessee shall promptly take any and all action required by such agency to investigate and clean -up such contamination. 11.2 City shall defend, indemnify, and hold harmless District, its officers, directors, employees, agents and representatives from and against any and all legal or administrative proceedings, claims, reasonable attorney fees and costs, expenses, penalties, actual damages, including indemnity claims, in any way related to (i) intentional acts or negligence of City, its officers, officials, consultants, agents, employees, contractors, or invitees arising with regard to use or entry onto the Property by City,(ii) the use, release, generation, storage or disposal of Hazardous Materials (and defined in Section 10.2.1(b)) on the Property by City or any agent of City; (iii) City's compliance or non - compliance with any federal, state or local environmental law, ordinance, rule or regulation, (v) any accident or injury to, or death of, persons or damage to property occurring on or about the Property as result of City's use of the Property, (vi) the removal, clean -up, encapsulation, detoxification or any other action taken by City or any agent of City, directly or indirectly arising out of the presence of Hazardous Materials in, on or around the Property. If the previous, current and future storage, use and disposal of Hazardous Materials on the Property is caused by the City or any agent of City and results in contamination or deterioration of water or soil resulting in a level of contamination greater than maximum allowable levels established by any governmental agency having jurisdiction over such contamination, City shall promptly take any and all action required by such agency to investigate and clean -up such contamination. 12. NOTICE 12.1 All notices pursuant to this Lease shall be deemed given when personally delivered or deposited in the United States mail, first class postage prepaid, and addressed as follows: LEASE AGREEMENT Page 8 7 -13 District: Newport -Mesa Unified School District Business Office Attention: Superintendent of Schools 2985 Bear Street, Building A Costa Mesa, CA 92626 City: City of Newport Beach Attention: Real Property Administrator 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 -8915 13. INSURANCE 13.1 Provision of Insurance. Without limiting either parties' indemnification obligations, and prior to commencement of Work, the parties shall obtain, provide and maintain at their own expense during the term of this Lease, policies of insurance of the type and amounts described below. The parties agree to provide insurance in accordance with requirements set forth herein. If either party uses existing coverage to comply and that coverage does not meet these requirements, that party agrees to amend, supplement or endorse the existing coverage. 13.2 Acceptable Insurers. All excess insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 13.3 Coverage Requirements. 13.3.1 General Liability Insurance. The parties shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) general aggregate. The policy shall cover liability arising from premises, operations, products - completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. 13.3.2 Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: (a) Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability, shall provide or be endorsed to provide that City and LEASE AGREEMENT Page 9 7 -14 District and their officers, officials, employees, and agents shall be included as insureds under such policies. (b) Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self - insurance maintained by City or District. (c) Notice of Cancellation. All policies shall provide City and District with thirty (30) calendar days notice of cancellation (except for nonpayment for which ten (10) calendar days notice is required) or nonrenewal of coverage for each required coverage. 13.3.3 Professional Liability (Errors & Omissions) Insurance. The parties shall maintain professional liability insurance that covers any work to be performed in connection with this Lease, in the minimum amount of one million dollars ($1,000,000) per claim and two million dollars ($2,000,000) in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Lease and the parties agree to maintain continuous coverage through a period no less than three (3) years after completion of any work performed under this Lease. 13.3.4 Workers' Compensation Insurance. The parties shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. The parties shall submit to each other, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the other party, its officers, agents, employees and volunteers. 13.4 Additional Agreements Between the Parties. The parties hereby agree to the following: 13.4.1 Evidence of Insurance. The parties shall provide certificates of insurance to each other as evidence of the insurance coverage required herein as specified herein for coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with each party at all times during the term of this Lease. Each party reserves the right to require complete, certified copies of all required insurance policies from the other party, at any time. 13.4.2 City's Right to Revise Requirements. The City reserves the right at any time during the term of the Lease to change the amounts and types of insurance required by both parties by giving the District sixty (60) calendar days advance written notice of such change. 13.4.3 Enforcement of Lease Provisions. District acknowledges and agrees that any actual or alleged failure on the part of the City to inform District of non - LEASE AGREEMENT Page 10 7 -15 compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. 13.4.4 Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 13.4.5 Self- insured Retentions. Any self- insured retentions must be declared to and approved by City. City reserves the right to require that self- insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these requirements unless approved by City. 13.4.6 City Remedies for Non Compliance. If District or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation to: (a) purchase such insurance; (b) terminate this Lease; or (c) suspend District's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to District or reimbursed by District upon demand. 13.4.7 Timely Notice of Claims. The parties shall give each other prompt and timely notice of claims made or suits instituted that arise out of or result from either parties' performance under this Lease, and that involve or may involve coverage under any of the required liability policies. 13.4.8 District's Insurance. District shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. 14. DEFAULT 14.1 Events of Default. The occurrence of any one (1) or more of the following events shall constitute a material default and breach of this Lease by District: 14.1.1 The maintenance of the Property in violation of any applicable provisions of the City's Charter, Municipal Code and Zoning Code, State Law, Federal Law, and /or the City's Tidelands Grant; 14.1.2 The failure by District to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by District, if the failure to perform continues for a period of thirty (30) calendar days after written notice thereof has been given to District. If the nature of District's default is such that more than thirty (30) calendar days are reasonably required for its cure, then District shall not be in default if LEASE AGREEMENT Page 11 7 -16 District commences the cure within said thirty (30) calendar day period and thereafter diligently prosecutes the cure to completion; or 14.1.3 The making by District of any general assignment, or general arrangement for the benefit of creditors; the filing by or against District of a petition to have District adjudged a bankrupt or a petition for reorganization or arrangement of any law relating to bankruptcy unless the same is dismissed within sixty (60) calendar days; the appointment of a trustee or receiver to take possession of substantially all of District's assets located at the Property or of District's interest in the Lease, where possession is not restored to District within thirty (30) calendar days; or the attachment, execution or other judicial seizure of substantially all of District's assets located at the Property or of District's interest in the Lease, where such seizure is not discharged within thirty (30) calendar days. Notices given under this paragraph shall specify the alleged default and the applicable Lease provisions, and shall demand that District perform the provisions of this Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time. No such notice shall be deemed a forfeiture or a termination of this Lease unless City so elects in the notice. 14.2 City's Remedies. In the event of any default by District as defined in this Lease, City may, in addition to any rights or remedies permitted by law, do the following: 14.2.1 Terminate District's right to possession of the Property by any lawful means, in which case this Lease shall terminate and District shall immediately surrender possession of the Property to City. In such event, City shall be entitled to recover from District all amounts to which City is entitled pursuant to Section 1951.2 of the California Civil Code, or any other provision of law, including, without limitation, the following: (a) Any other amount necessary to compensate City for all detriment proximately caused by District's failure to perform obligations pursuant to this Lease or which in the ordinary course of things would be likely to result from the breach, including, without limitation, the cost of recovering possession, expenses of reletting (including necessary repair, renovation and alteration, and any other reasonable costs.) The "worth at the time of award" of all rental amounts other than that referred to in clause (i) above shall be computed by allowing interest at the rate of five percent (5 %) per annum from the date amounts accrue to City. The worth at the time of award of the amount referred to in clause (i) shall be computed by discounting such amount at one (1) percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. 14.2.2 Without terminating or affecting the forfeiture of this Lease or, in the absence of express written notice of City's election to do so, relieving District of any obligation pursuant to this Lease, City may, but need not, relet all or a portion of the Property at any time, or from time -to -time, and on such terms and conditions as City, at its sole discretion, deems appropriate. Whether or not the Property is relet, District shall pay all amounts and perform all obligations required by this Lease up to the date that City terminates District's right to possession of the Property. District shall make such LEASE AGREEMENT Page 12 7 -17 payments at the time specified in the Lease and City need not wait until termination of the Lease to recover sums due by legal action. If City relets all or a portion of the Property, the reletting shall not relieve District of any obligation pursuant to this Lease; provided, however, City shall apply the Rent or other proceeds actually collected by virtue of the reletting against amounts due from District. City may execute any agreement reletting all or a portion of the Property and District shall have no right to collect any proceeds due City by virtue of any reletting. City shall not, by any reentry or reletting or other act, be deemed to: Property; (a) Have accepted any surrender by District of this Lease or the (b) Have terminated this Lease; or (c) Have relieved District of any obligation pursuant to this Lease unless City has given District express written notice of City's election to do so. 14.2.3 City may terminate this Lease without cause by express prior written notice of at least three hundred sixty -five (365) calendar days to District of its election to do so. The termination shall not relieve District of any obligation which has accrued prior to the date of termination. In the event of termination, City shall be entitled to recover the amounts specified in this Lease. 14.2.4 Notwithstanding any other provision of this Lease as permitted by California Public Resources Code Section 6312, or any successor statute, the Parties agree that upon expiration or earlier termination of this Lease the City shall have no liability or obligation to pay compensation for any improvements made to the Property. Improvements existing on the Property at the time of expiration or termination shall be handled pursuant to Section 15.2. 14.3 Default By City. City shall not be in default under this Lease unless City fails to perform obligations required of City within a reasonable time, but in no event later than thirty (30) calendar days after written notice by District to City specifying wherein City has failed to perform such obligation. If the nature of City's obligation is such that more than thirty (30) calendar days are required for performance, then City shall not be in default if City commences performance within such thirty (30) calendar day period and thereafter diligently prosecutes the same to completion. Alternatively, City may in its sole and absolute discretion decide not to cure a default and instead elect to terminate this Lease, upon thirty (30) calendar day prior written notice. In the event of termination under this section City shall owe no compensation to District. 14.4 No Damages. The Parties acknowledge that City would not have entered into this Lease if it were to be liable in damages under, or with respect to, this Lease or any of the matters referred to in this Lease. Accordingly, District covenants on behalf of itself and its successors and assigns, not to sue City (either in its capacity as City in this Lease or in its capacity as the City of Newport Beach) for damages or monetary relief LEASE AGREEMENT Page 13 7 -18 for any breach of this Lease by City or arising out of or connected with any dispute, controversy, or issue between City and District regarding this Lease or any of the matters referred to in this Lease or any future amendments or enactments thereto, or any land use permits or approvals sought in connection with the Property, the Parties agreeing that declaratory and injunctive relief, mandate, and specific performance shall be District's sole and exclusive judicial remedies. 14.5 Stay of Obligations. Neither Party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other Party. 14.6 Determination of Rental Value. In any action or unlawful detainer commenced by City, the reasonable rental value of the Property shall be deemed to be the amount of Rent and /or additional monies due (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless District shall prove to the contrary by competent evidence. 14.7 Waiver of Rights. The failure or delay of either Party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other Party. City's acceptance of any Rent shall not be considered a waiver of any preexisting breach of default by District other than the failure to pay the particular Rent accepted regardless of City's knowledge of the preexisting breach of default at the time Rent is accepted. 14.8 Waiver of Right of Redemption. District waives any right of redemption or relief from forfeiture pursuant to California Code of Civil Procedure Sections 1174 and 1179 and /or pursuant to any existing or future statutory or decisional law in the event District is evicted or City takes possession of the Property by reason of District's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION 15.1 Surrender of Property. Upon the expiration or termination of this Lease, District agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Property. City, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. District waives any right to receive relocation assistance or similar form of payment from City. 15.2 Removal of Improvements. Upon the expiration or termination of this Lease, City shall have the right to accept free of charge ownership of the Improvements or require District to remove the Improvements. If City elects to accept ownership of the Improvements, District shall provide all necessary documents to City to effectuate transfer of ownership. Removal of any building or improvement shall be at the sole cost and expense of District and removal must be complete no later than one hundred eighty (180) calendar days after expiration of the term of this Lease. District shall fill all excavations and remove all foundations, debris and other parts of the buildings or improvements remaining after removal and surrender possession of the Property to City in a clean and orderly condition. LEASE AGREEMENT Page 14 7 -19 16. STANDARD CONDITIONS 16.1 Successors in Interest. This Lease shall be binding upon the successors of both Parties. 16.2 Compliance with all Laws. District shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. 16.3 Waiver. A waiver by either Party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 16.4 Integrated Contract. This Lease represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 16.5 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Lease and any other attachments attached hereto, the terms of this Lease shall govern. 16.6 Interpretation. The terms of this Lease shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of the Lease or any other rule of construction which might otherwise apply. 16.7 Amendments. This Lease may be modified or amended only by a written document executed by both District and City and approved as to form by the City Attorney, 16.8 Severability. If any term or portion of this Lease is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Lease shall continue in full force and effect. 16.9 Controlling Law and Venue. The laws of the State of California shall govern this Lease and all matters relating to it and any action brought relating to this Lease shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. . 16.10 No Attorney's Fees. In the event of any dispute or legal action arising under this Lease, the prevailing Party shall not be entitled to attorney's fees. LEASE AGREEMENT Page 15 7 -20 16.11 Counterparts. This Lease may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. 16.12 Time of Essence. Time is expressly declared to be of the essence in this Lease. 16.13 Recordation of Lease. Pursuant to California Government Code Section 37393 the Parties shall execute, acknowledge and City may record a copy of this Lease at any time following the date hereof [SIGNATURES ON NEXT PAGE] LEASE AGREEMENT Page 16 7 -21 IN WITNESS WHEREOF, we have executed this Lease as of the day and year written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: t M /I `r By: ZA r ({ °F Aaron C--Harp GtAn HJ1I /tk City Attorney I'o %aM30 Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Edward D. Selich Mayor DISTRICT: NEWPORT -MESA UNIFIED SCHOOL DISTRICT, a political subdivision of the State of California Date: r 111q 1'r4 By: Name: Paul H. Reed Title: Deputy Superintendent & CBD Date: ////I I i� By: Name: Patricia L. Dreher Title: Notary Public [END OF SIGNATURES] Attachments: Exhibit A: Legal Description Exhibit B: Depiction of Property obf Ing PATRICIA L. DREHER Commission M 1919258 a i Notary Public • Calilornia z x�. Orange County Mv Comm. Expires Jan 26, 2015 r LEASE AGREEMENT Page 17 7 -22 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 r� s e c x, r ass. c c a r mr. c c� s r� r s o r, r� rs r o c s c� rw r, arm .� e c r a s, G r a s s e 6sa s. c cs s e c a� r� : c `. . f ec e sr. t eK x• sr. r suu m e e� ss rs A notary public or other officer completing this certificate verifies only the Identity of the individual who signed the document to which thle certificate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Orange ) On 11 -19 -14 Date before me, Patricia L. Dreher, Notary Public personally appeared Paul H. Reed, Here Insert Name and Title of the Officer Superintendent and CBO, Newport-Mesa USD Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) Is /are subscribed to the within Instrument and acknowledged to me that he/sheRhey executed the same in his/her /their authorized capacity(les), and that by his/her /their signature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true and correct. WITNESS my hand and official seal. PATRICIA L.DREHER Commission M 1919258 ��/J1 Z , �r - Notary Public - California £ Signature / ai%(,C��, Z �' Orange County Signature of Notary Public M Comm. Ex ues Jan 26, 2015 Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Doeument�ease Agreement- City of Newport Bea6hocument Date: November 19, 2014 Number of Pages: 17 Signer(s) Other Than Named Above: Rush N. Hill, 11, Aaron C. Harp Capacity(les) Claimed by Signers) Signer's Name: Rush N. Hill, 11 LJ Corporate Officer — Tltle(s): ❑ Partner — ❑ Limited ❑ General • Individual ❑ Attorney in Fact • Trustee ❑ Guardian or Conservator 13 Other. Mayor Signer Is Representing: City of Newport Beach Signer's Name: Aaron C. Harp • Corporate Officer — Title(s): • Partner — ❑ Limited O General • Individual N Attorney in Fact O Trustee ❑ Guardian or Conservator D Other: Signer Is Representing: City Attorney's Office 02014 National Notary Association • www.NationalNotary.org • 1- 800-US NOTARY (1 -800- 876 -6827) Item #5907 7 -23 EXHIBIT A LEGAL DESCRIPTION PLAYGROUND AREA AT NEWPORT ELEMENTARY SCHOOL Those portions of West Ocean Front, formerly known as "Ocean Avenue ", 65 feet in width, Lot 13A, and Lot 12A of Section B, Newport Beach, as per map recorded in Book 4, Page 27 of Miscellaneous Maps, Records of Orange County, California, lying south of the West Ocean Front public sidewalk, described as follows: Beginning at the southwesterly corner of Lot 13, Block 12 of said Section B; thence along the prolongation of the westerly line of said Lot 13, S 160 43' 26 "W 357.00 feet; thence N740 29' 31"W 429.28 feet to the southwesterly prolongation of the centerline of 14th Street as shown on said map; thence along said centerline prolongation N11° 41' 17 "E 109.16 feet; thence N780 18' 43 "W 32.00 feet; thence N110 41' 17 "E 92.00 feet; thence S78° 18' 43 "E 32.00 feet to said centerline prolongation; thence along said centerline prolongation N11 ° 41' 17 "E 147.00 feet to point on a curve, concave southerly and having a radius of 5454.65 feet, said curve containing the northerly right -of -way of Ocean Avenue as shown on said map; thence easterly 460.29 feet along said curve and along the southerly line of Block 13 of said map through a central angle of 4° 50' 06" to the point of beginning. Containing 3.697 acres (gross) Playground Area: 3.482 acres (net) Basis of Bearings: the westerly line of said Lot 13, Block 12, of Section B, being N160 43' 26 "E. 7 -24 i DEPICTION OF PROPERTY 7 -25 I iSAi A -Raqv EXHIBIT B, MAP PLAYGROUND AREA AT NEWPORT ELEMENTARY SCHOOL - lft: s, I Mv� 15,1013 7-26 WWC:mec 1/19/60 ATTACHMENT CC 2 LEASE AGREEMENT THIS LEASE AGREEMENT, made and entered into this day of 1960, between the CITY OF NEWPORT BEACH, a municipal c poration, hereinafter referred to as "City ", and the NEWPORT BEACH SCHOOL DISTRICT OF ORANGE COUNTY, hereinafter referred to as "School District "; WITNESSETHC .WHEREAS., the City is the owner of the tidelands and filled lands in the tcorporate Aimits of the City lying southerly of Ocean Front between the southerly extension,of 13th Street and the south - erly..extension.of 14th Street, - hereinafter more particu -larly de scribed, by virtue of a grant from the.State of California set out in Chapter 813 of Statutes, of 1929, page 1704•, and - WHEREAS, City has a perpetual easement for street, park and public pleasure purposes over Block 13 A, Section B, of Newport Beech, which lies between the southerly extensions of 13th and 14th Streets and between Ocean Front and said tidelands and filled lands as shown on a map recorded in Book 4, page 27, Miscellaneous Maps, Records of Orange County, California; and WHEREAS, School District owns Block 13 of Newport Beach, as per map recorded in Book 4, page 27, of said maps, which lies between 13th Street and 14th Street and between Balboa Boulevard and Ocean Front; and WHEREAS, School District operates a public elementary school on said Block 13 and uses and has need for the use of said Block 13 A and the adjoining tidelands and filled lands oceanward of said Block 13 A in connection with said school for playground purposes; and WHEREAS, the leasing of the tidelands and filled lands hereinafter described to School District for the purpose and under the terms and conditions set out herein would not interfere with or be inconsistent with the requirements of commerce or navigation 7 -27 at Newport Harbor and is not inconsistent with the title upon which said land is held; and WHEREAS, the trespass rights hereby granted over the City °s easement on said Block 13 A under the terms and conditions set out herein are not inconsistent with the grant of easement to City over said Block 13 A; NOW, THEREFORE, the parties agree: 1. City hereby leases to School District for playground purposes only and subject to the terms and conditions her con®. twined, for a term of fifty (50) years beginning on the date hereof, those certain tidelands and filled lands in the corporate limits of the City more particularly described as follows; Beginning at the southerly corner of Lot 1 of Block 13, Section B, of Newport Beach, as per map recorded in Book 4, page 27, Miscellaneous Maps, Records of Orange County, California; thence southerly along the southerly prolongation of the easterly line of said Lot 1 a distance of 400 ft.; thence westerly along a line parallel to and 400 £t. southerly of the south line of said Block 13 to a point in the southerly prolongation of the westerly line of Lot 13 in said Block 13; thence northerly along said southerly prolongation of the westerly line of said Lot 13 to the southerly line of said Block 13; thence easterly along the south- erly line of said Block 13 to the point of beginning; excepting therefrom Ocean Front street right -of -way, and further excepting Block 13 A, Section B', of. Newport Beach, as per map recorded in Book 4, page 27, Miscellaneous Maps, of said Records of Orange County. 2. City hereby grants a license and right of trespass to School District for playground purposes only, subject to the terms and conditions herein contained, for a term of fifty (50) years beginning on the date hereof,.over that certain parcel of land in the City between the southerly extension of 13th Street and the southerly extension of 14th Street, more particularly described as: Block 13 A, Section B, Newport Beach, as per map recorded in Book 4, page 27, of Miscellaneous Maps, Records of Orange County, California. 2. 7 -28 3. School District shall use said tidelands and filled lands and said Block 13 A to provide a playground area for use by children participating in activities of the public school on said Block 13 and for use by the public for park and pleasure purposes when the same is not being used by said children. 4. School District shall not construct any buildings or fences on the tidelands and filled lands or on said Block 13 A with- out the prior approval of the City Council but may place and maintain playground equipment on said land which shall be the property of School District and not of City. 5. Should School District sell. said Block 13 on which the elementary school is located, or any part thereof, or should School District discontinue the operation of the public school on said Block 13 for a period of two (2) years, then the lease and the license and right of trespass hereby granted shall automatically terminate and City may re -enter the premises and take possession thereof and remove all persons and property therefrom. 6. Notwithstanding the lease and the license and right of trespass granted to School District, City. reserves the right to enter the land or any part thereof to construct and maintain groins, bulkheads or breakwaters to protect said premises and other land within City from damage or erosion; provided,'however, that nothing contained herein shall require the City to construct or to maintain groins, bulkheads or breakwaters on said land or elsewhere. 7. School District shall not assign the leasehold or license or right acquired hereunder without the prior written con- sent of City. . 8. If during the term hereof the tidelands and filled 3 lands owned by City or the perpetual easement over said Block 13 A are taken by eminent domain, other than the leasehold interest of School District being taken by City, then the leasehold interest and license and right of School District hereby granted shall ter- minate as to the property taken and School District shall remove 3. 7 -29 all equipment and improvements therefrom and all compensation awarded for such property shall belong to City. 9. A measure shall be placed upon the ballot in the regular municipal election of City on April 12, 1960, to submit this lease to the electors of City-for approval and the same is subject to such approval by a majority vote of said electors voting thereon. Notwithstanding the initial approval of the electors of City being required, the City Council and School Board of School District may amend the terms of this agreement at any time during the term hereof to better serve the public interest or better accom- plish the purposes of the lease; provided, however, that the term hereof may not be extended by the City Council and School Board beyond the fifty (50) years herein provided. 10. Subject to applicable provisions of law, it is under- stood that all rights granted hereunder are subject to easements, rights-of-way and similar burdens, if any, now existing or hereto- fore granted by City or its predecessors in, to, over or under the premises for any purpose. 11. In the event this agreement or any provision hereof is held to be invalid or ineffective by any court, that decision shall not affect the remainder of the provisions hereof and neither party hereto shall be liable to the other for any loss or damage of any nature whatsoever suffered or claimed to be suffered by reason of such invalidity or ineffectiveness. 12. This agreement shall be binding upon the successors of both parties. IN WITNESS WHEREOF, we have executed this lease agreement as. of the day and year first above written. CITY NEWPORT BEACH, a muni- NEWPORT BEACH SCHOOL DISTR {CT ci a corpor /q�io OF ORA E COUNTY By / O > BY Mayor test. Attest, City er c 4. 7 -30 ATTACHMENT CC 3 7 -31 TAB% )"_ w/r m I�r'4 M1 5._ I jjp[[ � 4 rm-+iJ j roe r,, 1 t f Playground /Lease Premises • ti xr Ali 1 � M +�R112i_ `.I J �F AY 1�i Newport Beach GIS �p�`x'POgr ° m 0 200 400 G Feet C�<IFOP•�' i r1 0 .'M osI Disclaimer: Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. Imagery: 2009 -2013 photos provided by Eagle Imaging www.eagleaerial.com 7 -32 TAM y 0 1 ^f d,o r 0 y f I. m M � N Newport Beach Disclaimer: Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of GAS Newport Beach and its employees and agents disclaim any and all responsibility from or relating to �ia'POgr any results obtained in its use. ° m 0 100 200 _ Imagery: 2009 -2013 photos provided by Eagle Feet Imaging www.eagleaerial.com 1/22/2015 7 -33 ATTACHMENT CC 4 F -7 INCOME PROPERTY The City owns and manages an extensive and valuable assortment of property including streets, parks, beaches, public buildings and service facilities. The City also owns and operates a yacht basin, a mobile home park, a luxury residential development and various other income properties. Most of the income property is tidelands, filled tidelands or waterfront. Unencumbered fee value of income property is estimated at upwards of one hundred million dollars, and income typically contributes ten percent of all City revenues. As owner /manager of property, the City is the steward of a public trust, and state law requires the City to maximize its returns on state - managed property or be subject to a charge of making a gift of public funds. Nevertheless, the City Council recognizes the importance of this property not only as a revenue generator, but also as a means to provide otherwise unfeasible uses and facilities to benefit the community. In managing its property, the City will continually evaluate the potential of all City owned property to produce revenue. This may include leasing unused land, renting vacant space, and establishing concessions in recreation areas or other similar techniques. The City Council will evaluate the appropriateness of establishing new income properties using sound business principles and after receiving input from neighbors and users. The policy of the City Council is that income property be managed in accordance with the following: A. Whenever a lease, management contract, concession, sale or similar action regarding income property is considered by the City, an analysis shall be conducted to determine the maximum or open market value of the property. This analysis shall be conducted using appraisals or other techniques to determine the highest and best use of the property and the highest value of the property. B. All negotiations regarding the lease, management contract, concession, sale or similar action regarding income property shall include review of an appraisal or analysis of the use being considered for the property conducted by a reputable and independent professional appraiser, real estate consultant or business consultant. C. The City shall seek, whenever practical and financially advantageous, to operate or manage all property and facilities directly with City staff or contractors. D. In all negotiations regarding the lease, management contract, concession, sale or similar action regarding a non - residential income property, the City shall seek 1 7 -34 ION revenue equivalent to the open market value of the highest and best use; and, whenever possible the City shall conduct an open bid or proposal process to insure the highest financial return. E. Whenever less than the open market or appraised value is received or when an open bid process is not conducted, the City shall make specific findings setting forth the reasons thereof. Such findings may include but need not be limited to the following: 1. The City is prevented by tideland grants, Coastal Commission guidelines or other restrictions from selling the property or converting it to another use. 2. Redevelopment of the property would require excessive time, resources and costs which would outweigh other financial benefits. 3. Converting the property to another use or changing the manager, concessionaire or lessee of the property would result in excessive vacancy, relocation or severance costs, which would outweigh other financial benefits. 4. Converting residential property to another use or opening residential leases to competitive bid would create recompensable liabilities and other inequities for long -term residents. 5. The property provides an essential or unique service to the community that might not otherwise be provided were full market value of the property be required. 6. The property serves to promote other goals of the City such as affordable housing, preservation of open space or marine related services. F. Generally, lengths of leases, management contracts, concessions or similar agreements will be limited to the minimum necessary to meet market standards and will contain appropriate reappraisal and inflation protection provisions. Also, all agreements shall contain provisions to assure complete audits periodically through their terms. G. All negotiations regarding the lease, management contract, concession, sale or similar action regarding income property shall be conducted by the City Manager or his /her designee under the direction of any appropriate City committees. H. To provide an accurate accounting of actual net revenues generated by the City's income property, all costs and charges directly attributable to the management of 2 7 -35 100 a specific income property shall be debited against the gross revenues collected on that property in the fiscal year the costs are incurred. Costs and charges include property repairs and maintenance, property appraisals, and consultant fees, as authorized by the City Council, City Manager or by this Income Property Policy. I. The City Manager or his /her designee is authorized to sign a lease, management contract, concession or similar agreement or any amendment thereto, on behalf of the City. Notwithstanding the foregoing, the City Manager or his /her designee, or a City Council member, may refer any lease, management contract, concession or similar agreement or any amendment thereto, to the City Council for its consideration and /or action. Adopted - July 27,1992 Amended - January 24,1994 Amended - February 27,1995 Amended - February 24,1997 Amended - May 26,1998 Amended - August 11, 2009 Amended - May 14, 2013 Formerly F -24 3 7 -36