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HomeMy WebLinkAbout11/21/1995, C-1 - LEASE AGREEMENTS WITH SAN LUIS OBISPO CHILDREN'S MUSEUM AND SAN LUIS OBISPO LITTLE THEATRE �I��II��N�I�III,I�IIIAI�IIII VJ r MEcrEMl GDA c� or san Luis OBISPO �T14 Z 1s 1110198 COUNCIL AGENDA REPORTM: FROM: Michael D. McCluskey, Public Works Director Prepared by: David Elliott, Administrative Analyst�;�� SUBJECT: Lease Agreements with San Luis Obispo Children's Museum and San Luis Obispo Little Theatre CAO RECONEM ENDATIONS: 1) Approve the "Agreement for Lease of Property at 1010 Nipomo Street" with San Luis Obispo Children's Museum 2) Approve the "Agreement for Lease of Property at 888 Morro Street" with San Luis Obispo Little Theatre 3) Authorize the Mayor to execute the agreements DISCUSSION: The City currently has a rent-free lease agreement with San Luis Obispo Children's Museum ("Children's Museum") to operate a children's museum on City property at 1010 Nipomo Street. This agreement is set to expire on December 31, 1995. The City also currently has a rent-free lease agreement for San Luis Obispo Little Theatre ("Little Theatre") to operate a performing arts theater on City property at 888 Morro Street (the Old Library). This agreement is set to expire on December 31, 1998. In April 1995 Children's Museum and Little Theatre asked the City to extend their operating leases at 1010 Nipomo and 888 Morro through the year 2000. Both organizations have wanted to develop permanent facilities but need time to firm up their future plans. The proposed agreements extend the operating leases for both Children's Museum and Little Theatre until December 31, 2000. The City also has a long-term, rent-free lease agreement with Little Theatre for future construction of a new performing arts theatre at 1010 Nipomo, the property now occupied by Children's Museum. (The two agreements proposed in this report will not affect the long-term agreement for 1010 Nipomo.) Because it will not meet the first fundraising milestone included in the long-term agreement, Little Theatre will technically default on its agreement obligations effective January 1, 1996. Staff has discussed this situation with Little Theatre representatives, who will submit during the coming weeks a detailed proposal to modify Little Theatre's fundraising strategies for development of the new theatre. FISCAL EWPACT: The proposed agreements will neither cost nor benefit the City financially. There is a token rent of one dollar per year, and the tenants must pay all utilities, taxes, and incidental expenses. ATTACEMIENNTS: Agreement for Lease of Property. at 1010 Nipomo Street Agreement for Lease of Property at 888 Morro Street AGREEMENT FOR LEASE OF PROPERTY AT 1010 NIPOMO STREET This agreement is made by and between the City of San Luis Obispo ("the City") and San Luis Obispo Children's Museum, a non-profit California corporation, ("Children's Museum"). RECITALS 1. The City owns the premises located at 1010 Nipomo Street in the city of San Luis Obispo, California ("the Premises"). 2. Children's Museum has occupied the Premises since 1990. 3. Children's Museum activities put otherwise unoccupied City facilities to productive use. 4. Children's Museum activities enhance the Mission Plaza area and benefit the community at large. LEASE PROVISIONS 5. Term of Agreement. The term of this agreement shall commence upon execution by both parties and expire on December 31, 2000. The term of this agreement shall be subject to the termination provisions of paragraph 17. 6. Extent and Condition of the Premises. Children's Museum may use the Premises to operate a museum for the term of this agreement. Children's Museum shall accept the Premises "as is". This agreement shall not obligate the City to guarantee the condition of the Premises, the suitability of the Premises for Children's Museum's intended use, the duration that the Premises may be safely occupied, or the availabil- ity of alternate facilities. Should any occurrence (such as fire, earthquake, flood, or the need to repair, improve, or use the Premises) necessitate closing the Premises or a portion of the Premises to the public, Children's Museum shall have no recourse to the City for any loss incurred. Children's Museum shall allow the City to place and maintain a container on the Premises to store equipment and supplies for Mission Plaza maintenance. 7. Rent. For use of the Premises, Children's Museum shall pay the City a rent fixed at $1.00 per year for the lease term. 8. Cost of Operations. Children's Museum shall bear the entire cost of its operations on the Premises, including utility bills and any taxes and fees related to its occu- pancy of the Premises, such as possessory interest taxes. 9. Maintenance by Children's Museum. Children's Museum shall provide interior and exterior building maintenance for the Premises including any repairs necessary. 10. Maintenance by the City. The City shall provide grounds maintenance for the Premises including any natural vegetation along the adjacent creek bank but not including any landscaping associated with a Children's Museum exhibit. 11. Minimum Hours of Operation. Children's Museum shall keep its museum exhibits open to the public at least twenty hours each week. 12. Relationship of Parties. Under this agreement, the City shall be solely and exclusive- ly a lessor, and Children's Museum shall be solely and exclusively a lessee. Children's Museum shall not be considered a partner, agent, officer or employee of the City. Children's Museum's officers, members, affiliates, volunteers, employees and independent contractors shall not be considered agents, officers or employees of the City. 13. Assignment. Children's Museum shall not assign this agreement to another party without the City's prior written consent. 14. Subrogation Waiver. The City and Children's Museum release and relieve each other and waive their entire rights of recovery against each other for damage from perils covered by their property insurance, whether due to the negligence of the City, Children's Museum, or their agents, officers, employees, or guests. 15. Indemnification. Children's Museum shall indemnify the City and its agents, officers, and employees from any claims and demands made because of: A. any damage, injury or death suffered by any person or corporation and caused by any negligent act or omission of Children's Museum and its agents, officers, employees, or guests B. any damage, injury or death suffered by any agent, officer, employee, or guest of Children's Museum, except for claims and demands resulting from the negligence or wilful misconduct of the City and its agents, officers and employees C. Children's Museum's negligent violation of any law, any regulation or any term or condition of a permit Children's Museum shall also indemnify the City and its agents, officers, and employees from any expense of investigating and defending against such claims and demands when Children's Museum has been proven negligent. 16. Insurance. Children's Museum shall comply with the insurance requirements for les- sees described in Exhibit A. . 17. Termination for Default. If the City determines that Children's Museum is not faithfully abiding by any term or condition of this agreement, the City may send written notification giving Children's Museum a 30 calendar day notice to cure the deficiency. If Children's Museum has not cured the deficiency within the 30 days specified in the notice, that failure shall constitute a breach of the agreement, and the City may give written notice to terminate the agreement effective 120 calendar days from receipt of the notice. 18. Cooperation upon Termination or Expiration. In the event of termination or expira- tion, Children's Museum shall fully cooperate by relocating its operations before the termination or expiration date and by not seeking relocation assistance from the City. By midnight on the termination or expiration date Children's Museum shall remove from the Premises all property in its possession or custody and shall leave the Premises in a condition as good as when received, excepting normal wear and tear. Any property remaining on the Premises after the termination or expiration date shall be deemed abandoned. 19. Notices. All official notices required under this agreement shall be given in writing and submitted by certified mail, postage prepaid and addressed as follows: To the City: Public Works Director City of San Luis Obispo 955 Morro Street San Luis Obispo, CA 93401 To Children's Museum: Director San Luis Obispo Children's Museum 1010 Nipomo Street San Luis Obispo, CA 93401 20. Enforcement Costs and Attorney's Fees. The prevailing party in any action between the parties to this agreement brought to enforce the terms of this agreement may recover from the other party its reasonable costs and attorney's fees in connection with such an action. 21. Annual Meetings. Representatives from the City and Children's Museum shall meet at least annually with representatives from San Luis Obispo Little Theatre ("Little Theatre"), which would like to eventually develop a community theatre on the Premises. The purpose of these meetings will be to review strategies for developing the Premises, including Little Theatre's potential for realizing its current plans. These reviews will also consider how development strategies might affect Children's Museum and Little Theatre. 22. Entirety and Integrity of Agreement. This document represents the entire and integrated agreement between the City and Children's Museum. This document supercedes and negates all prior negotiations, representations, agreements and amendments, either written or oral, regarding the Premises and the operation of a children's museum on the Premises. This document may be amended only by written instrument executed by both the City and Children's Museum. All provisions of this agreement are expressly made conditions. This agreement shall be governed by the laws of the State of California. This agreement is executed by the following authorized representatives: For San Luis Obispo Children's Museum: For the City of San Luis Obispo: President Mayor date date Attested: City Clerk W buildi nglddldmus.doc APPROVED AS TO FORM: J y n hY A m EXHIBIT A ip INSURANCE REQUIREMENTS: Lessees (No Auto Risks) The Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee's operation and use of the leased premises. The Lessee shall bear the cost of such insurance, M'mimwn Scone of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 3. Property ins'rA^ce against all risks of loss to any tenant improvements or betterments. Minimum Limits of Insurance. The Lessee shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply fly to this projectllocation or the general aggregate limit shall be twice the required occurrence limiL 2. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 3. Property Insurance: Pull replacement cost with no coinsurance penalty provision. Deductibles and Self Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either. the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of premises owned, occupied, or used by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. The Lessees insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Lessee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. The Lessee shall furnish the City with a certificate of insurance showing required coverage. Original endorsements effecting general liability and automobile liability coverage are also required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before the lease commences. AGREEMENT FOR LEASE OF PROPERTY AT 888 MORRO STREET This agreement is made by and between the City of San Luis Obispo ("the City") and San Luis Obispo Little Theatre, a non-profit California corporation, ("Little Theatre"). RECITALS 1. The City owns the premises commonly described as the Old Library, located at 888 Morro Street in the city of San Luis Obispo, California ("the Old Library"). 2. Under a 1993 lease agreement Little Theatre has renovated part of the Old Library into theater space and has put that space to productive use. 3. The City wishes to extend Little Theatre's rent-free occupancy of the Old Library so that Little Theatre can accumulate the money needed to build a new community theater in the downtown. LEASE PROVISIONS 7. Term of Agreement. The term of this agreement shall start upon execution by both parties and expire on December 31, 2000. The term of this agreement shall be subject to the termination provisions of paragraphs 20, 21, and 22. 8. Rent. For use of the portion of the Old Library shown in Exhibits A and 8 ("the Premises"), Little Theatre shall pay the City a rent fixed at $1 .00 per year for the . lease term. 9. Extent and Condition of the Premises. Little Theatre shall accept the Premises "as is". This agreement shall not obligate the City to guarantee the condition of the Premises, the suitability of the Premises for Little Theatre's intended use, the duration that the Premises may be safely occupied, or the availability of alternate facilities. Should any occurrence (such as fire, earthquake, flood, or the need to repair, improve, or use the Premises) necessitate closing the Premises or a portion of the Premises to the public, Little Theatre shall have no recourse to the City for any loss incurred. 10. Cost of Operations. Little Theatre shall bear the entire cost of its operations on the Premises, including: A. paying a portion of water, electricity and natural gas bills prorated according to square footage occupied B. paying the cost of any maintenance for which Little Theatre is responsible. C. paying any taxes and fees related to its occupancy of the Premises, including all possessory interest taxes which may be imposed. 11. Maintenance of the Premises. Little Theatre shall provide for: A. interior building maintenance of the Premises B. maintenance of the landscaped areas shown on Exhibit A C. any interior repairs necessary to the Premises 12. Restricted Hours of Operation. Little Theatre shall not conduct classes, rehearsals or productions during regular business hours, which are defined as 8:00 a.m. to 5:00 P.m. Monday through Friday, except holidays observed by the City. 13. Minimum Theater Production Level. Little Theatre shall annually produce at least 30 weeks of rehearsals and theater performances. 14. Relationship of Parties. Under this agreement, the City shall be solely and exclusive- ly a lessor, and Little Theatre shall be solely and exclusively a lessee. Little Theatre shall not be considered a partner, agent, officer or employee of the City. Little Theatre's officers, members, affiliates, volunteers, employees and independent contractors shall not be considered agents, officers or employees of the City. 15. Sub-leasing. With prior written City consent, Little Theatre may sub-lease the Premises for up to 30 consecutive days to sub-lessors which will promote the performing arts and the general purposes of this agreement. 16. Assignment. Little Theatre shall not assign this agreement to another party without the City's prior written consent. 17. Subrogation Waiver. The City and Little Theatre release and relieve each other and waive their entire rights of recovery against each other for damage from perils covered by their property insurance, whether due to the negligence of the City, Little Theatre, their agents, their officers, their employees, or their guests. 18. Indemnification. Little Theatre shall indemnify the City and its agents, officers, and employees from any claims and demands made because of: A. any damage, injury or death suffered by any person or corporation and caused by any negligent act or omission of Little Theatre and its agents, officers, employees, or guests B. any damage, injury or death suffered by any agent, officer, employee, or guest of Little Theatre, except for claims and demands resulting from the negligence or wilful misconduct of the City and its agents, officers and employees C. Little Theatre's negligent violation of any law, any regulation or any term or condition of a permit Little Theatre shall also indemnify the City and its agents, officers, and employees from any expense of investigating and defending against such claims and demands when Little Theatre has been proven negligent. 19. Insurance. Little Theatre shall comply with the insurance requirements for lessees described in Exhibit C. 20. Termination for Default. If the City determines that Little Theatre is not faithfully abiding by any term or condition of this agreement, the City may send written notification giving Little Theatre a 30 calendar day notice to cure the deficiency. If Little Theatre has not cured the deficiency within the 30 days specified in the notice, that failure shall constitute a breach of the agreement, and the City may give written notice to terminate the agreement effective 120 calendar days from receipt of the notice. 22. Cooperation upon Termination or Expiration. In the event of termination or expira- tion, Little Theatre shall fully co6perate by relocating its operations before the termination or expiration date and by not seeking relocation assistance from the City. By midnight on the termination or expiration date Little Theatre shall remove from the Premises all property in its possession or custody and shall leave the Premises in a condition as good as when received, excepting normal wear and tear. Any property remaining on the Premises after the termination or expiration date shall be deemed abandoned. 23. Notices. All official notices required under this agreement shall be given in writing and submitted by certified mail, postage prepaid and addressed as follows: To the City: Public Works Director City of San Luis Obispo 955 Morro Street San Luis Obispo, CA 93401 To Little Theatre: President San Luis Obispo Little Theatre P.O. Box 122 San Luis Obispo, CA 93406 24. Enforcement Costs and Attorney's Fees. The prevailing party in any action between the parties to this agreement brought to enforce the terms of this agreement may recover from the other party its reasonable costs and attorney's fees in connection with such an action. 25. Annual Meetings. Representatives from the City and Little Theatre shall meet at least annually with representatives from San Luis Obispo Children's Museum ("Children's Museum"). The purpose of these meetings will be to review strategies for developing a community theatre at 1010 Nipomo Street, including Little Theatre's potential for realizing its current plans. These reviews will also consider how development strategies might affect Little Theatre and Children's Museum. 26. Entirety and Integrity of Agreement. This document represents the entire and integrated agreement between the City and Little Theatre. This document supercedes and negates all prior negotiations, representations, agreements and amendments, either written or oral, regarding the Premises and the operation of a community performing arts theater on the Premises. This document may be amend- ed only by written instrument executed by both the City and Little Theatre. All provisions of this agreement are expressly made conditions. This agreement shall be governed by the laws of the State of California. This agreement is executed by the following authorized representatives: For San Luis Obispo Little Theatre: For the City of San Luis Obispo: President Mayor date date Attested: City Clerk h:lbuildingWoltt.doc APPROVED AS TO FORM: City AtMm� I 9 a 1 a a I : I I� IY I 'll . �TK rirVV••-- ��4; I e i O 7Y 14 IT ol 1 �.• .�}• 0 -1e 1 .f 2C •orf ry. 1 ' 1 1 1 1 1 ' I I � 1 1 i I LOWER FLOOR.- OLD LIBRARY BUILDING AREA TO BE OCCUPIED BY SLOLT LANDSCAPED AREA TO BE MAINTAINED BY SLOLT EXHIBIT A •.,.:.jam. T�;: - ''p 1 T 4'} •i�� ':r'tt��. Tr'� mp 11; ff .I: UPPER FLOOR - OLD LIBRARY BUILDING AREA TO BE OCCUPIED BY SLOLT EXHIBIT B EXHIBIT C INSURANCE REQUIREMENTS: Lessees (No Auto Risks) The Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee's operation and use of the leased premises. The Lessee shall bear the cost of such insurance. Minimtmt Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 3. Property insurance against all risks of loss to any tenant improvements or betterments. Mmirnum Limits of Insurance. The Lessee shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 3. Property Insurance: Full replacement cost with no coinsurance penalty provision. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of premises owned, occupied, or used by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. The Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Lessee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. The Lessee shall furnish the City with a certificate of insurance showing required coverage. Original endorsements effecting general liability and automobile liability coverage are also required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before the lease commences.