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HomeMy WebLinkAbout10/06/1998, C6 - LEASE AGREEMENT WITH KEN GLICK FOR CITY OWNED PROPERTY IN STENNER CANYON Council j aGEnda REpoRt C I T Y OF SAN LUIS O B I S P O FROM: Ken Hampian,Assistant City Administrative Officer�� Prepared By: Neil Havlik,Natural Resources Manager`,0, SUBJECT: LEASE AGREEMENT WITH KEN GLICK FOR CITY OWNED PROPERTY IN STENNER CANYON CAO RECOMMENDATION Approval of lease with Mr. Ken Glick for rental of the city owned property in Stenner Creek Canyon, for the period September 1, 1998 to August 31, 1999. DISCUSSION A 13 acre property in Stenner Creek Canyon has been owned by City of San Luis Obispo (as part of the old water treatment plant) for a number of years. For the past five years, it has been leased' to Mr. Ken Glick, who owns an adjacent, 900 acre ranch. A mobile home, once owned by the City and sold in 1993 to Mr. Glick, is on the premises. At the time of sale of the mobile home, the property was leased to Mr. Glick for a period of five years. At the end of that period, Mr. Glick was to remove the mobile home from the property, and restore the site to a natural condition. About the time that the lease was to terminate (March, 1998), Mr. Glick approached City staff about the possibility of his purchase of the 13 acre property or some other appropriate land trade. Staff has responded to this request by exploring with Mr. Glick various concepts for this trade. The exploration recently focused on the potential for a trade of the City owned property in exchange for placement of a conservation easement on some portion of the adjacent Stenner Creek Ranch owned by Mr. Glick. We have now reached a point where we believe the matter is worthy of a more detailed exploration that both parties hope will lead to a suitable transaction. The steps involved will take time and will necessitate a joint appraisal of both properties to determine what constitutes an equitable exchange. For that reason, staff is recommending that a new lease with Mr. Glick be substituted for the existing one (now holding over), with a term extending to August 31, 1999. This will allow sufficient time for the appraisal and negotiations that would follow in order to thoroughly explore this potential. Both parties have committed to a good faith effort in this regard, although it is understood that we may be unsuccessful in the end. CONCURRENCES The Utilities Department, which administers the property, has been a party to the discussions Council Agenda Report—Lease Agreement with Ken Glick... Page 2 administer the lease, and continue to participate in discussions with Mr. Glick as to an equitable transaction. FISCAL EWFACT Rental for the property will be $375 per month. This is the rate that Mr. Glick has actually been paying since the past lease expired at the end of March 1998. Thus, over the period of the new lease it will generate $4,500 amount of income, and a total of$6,375 for the lease period plus the holding over period. Mr. Glick and the City will evenly share the cost of an appraisal or preliminary market survey covering both properties. This is estimated to cost between $1,500 and$4,000, and funds for the City portion will come from the Natural Resources Program. ALTERNATIVE The Council could reject the lease. This is not recommended as the lease novation represents a good faith effort on the part of both parties to honestly explore what might be an innovative means of furthering City Greenbelt goals while meeting Mr. Glick's plans as well. C 4W LEASE OF PROPERTY: Stenner Canyon APN 073-281-004 This lease, made and entered into this day of 1998, by and between the CITY OF SAN LUIS OBISPO (hereinafter, "City"), a Municipal Corporation, and KENNETH L. GLICK (hereinafter "Lessee"). WITNESSETH: WHEREAS, the parties hereto desire to enter into an agreement whereby the City will lease approximately 13.62 acres of the City's real property known as APN 073-281-004, Stenner Canyon, San Luis Obispo County, California. NOW, THEREFORE, in consideration of the promises and agreements, covenants and conditions stated herein, the parties agree as follows: 1 . PREMISES LEASED City leases to lessee the real property described in Exhibit A to this lease, together with a double-wide garage thereon, subject to any rights and or easements as described in Schedule B of Exhibit A. 2. TERM The term of this lease shall commence on September 1 , 1998, and terminate on August 31 , 1999. 3. RENTAL Lessee shall pay to the City the sum of Three Hundred Seventy-five dollars ($375) per month, which shall include the real property and fixtures described above, payable monthly in advance on the first day of each month. 4. SECURITY DEPOSIT Lessee shall deposit with City upon execution hereof a security deposit in the amount of one month's rent as security for Lessee's faithful performance of obligations hereunder_ If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, City may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in C- 4m3 Lease of APN 073-281-004 Page 2 default for the payment of any other sum to which City may become obligated by reason of Lessee's default, or to compensate City for any loss or damage which City may suffer thereby. If City so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with City in an amount sufficient to restore said deposit to the full amount then required of Lessee. If the monthly base rent shall, from time to time, increase during the term of this lease, Lessee shall, at the time of such increase, deposit with City additional money as a security deposit so that the total amount of the security deposit held by City shall at all times bear the same proportion to the then current base rent as the initial security deposit bears to the initial base rent. City shall not be required to keep said security deposit separate from its general accounts. If Lessee performs all of Lessee's obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by City, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at City's option, to the last assignee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the premises. 5. DEFAULT Lessee agrees to pay said rents to City at the time and in the manner herein provided, without any deduction whatever and keep the leased premises free from any and all claims and demands against City of any kind or character. Should Lessee fail to pay any part of the rent herein specified, at the times or in the manner herein provided, or fail faithfully to comply with or perform any other of the terms, conditions, covenants and agreements of this lease on the part of Lessee to be performed or complied with, then and in that event, City may terminate this lease or may pursue any remedy whatsoever provided for by law, and in any of said events, City shall be entitled to take possession of said leased property and may enter into and upon said leased premises, without notice to said Lessee, and exclude said Lessee therefrom and from in any manner having access thereto, and remove all persons and property therefrom, and by process of law, or otherwise, take and resume possession of said leased premises, and in the removal of such property, City shall in no way be responsible or liable either to Lessee or to any other person whomsoever for such property or the safe keeping thereof or for any damage. City is hereby further authorized to store such removed property in any warehouse or other place at the expense and for the account of Lessee. 6. RIGHT-OF-WAY Nothing in this lease will prohibit City's continued access to its water lines and facilities adjacent to this property. Fencing or other obstruction of the r. -9- #/ Lease of APN 073-281-004 Page 3 privately-maintained road is prohibited. 7. USE Lessee shall be entitled to use the property as the site for Lessee's mobilehome, grazing and other lawful uses, but this use is limited to activities that will have no detrimental impact on the area environment or the creek habitat or water quality. Lessee agrees to keep said premises in a clean, wholesome condition, free from rubbish, garbage and like accumulations of waste. 8. UTILITIES Lessee shall make all arrangements for any payment due for all utilities and services furnished to or used by it on the leased premises, including, without limitation, gas, electricity, water, telephone service, trash collection, and sanitation. This includes any and all costs for connection charges. The City assumes no responsibility and makes no warranties regarding any utilities, and Lessee hereby holds the City harmless in this regard. 9. ALTERATIONS AND REPAIRS Lessee agrees that the garage is now in tenantable and good order and condition and Lessee shall keep and maintain premises in good and sanitary order and condition, and that no alteration, repair or change shall made in or about leased premises without the written consent of the City, said Lessee hereby waiving all rights under the provisions of section 1942 of the Civil Code of the state of California to make repairs at the City's expense. Lessee shall not mar or deface in any manner any part of said leased premises. Lessee shall, at the termination of this lease, surrender leased premises to the City in as good order and condition as reasonable and proper use will permit. 10. PROPERTY TAX If this lease should result in the assessment of taxes for this real property, including, but not limited to, possessory interest taxes, Lessee agrees that any tax liability will result in an increase in the amount of rent due the City, equal to the amount of any such tax liability. 11 . ASSIGNMENT Lessee shall not assign this lease in whole or in part nor sublet the premises in whole or in part without the written consent of City. Said consent shall C - L -5 Lease of APN 073-281-004 Page 4 not be unreasonably withheld. If the City consents to a sublease, Lessee shall remain responsible for the performance of all the terms, covenants and conditions of this Lease including financial obligations to the City. If Lessee assigns or subleases said Lease or any portion thereof without the prior written consent of the City, then said sublease or assignment shall, at the option of the City, immediately cease and terminate. No interest of Lessee in this lease shall be assignable by operation of law. Each of the following acts shall be considered an involuntary assignment: a. If Lessee is or becomes bankrupt or insolvent, makes an assignment for benefit of creditors; b. If a writ of attachment or execution is levied on this lease; C. If, in any proceeding or action to which Lessee is a party, a receiver is appointed with authority to take possession of the premises. Any involuntary assignment shall constitute a default by Lessee and City shall have the right to elect to terminate this lease. 12. INSPECTION The City shall have the right at all reasonable times to enter upon the premises for the purpose of inspecting the same, determining that all the terms, covenants and conditions of this lease are being kept and performed by Lessee. 13. HAZARDOUS WASTE Lessee agrees it will not, in violation of any applicable law, place, hold, or dispose of any hazardous material (defined hereinafter) on, under or at the premises, the building or the complex and that it will not, in violation of any applicable law, use the premises or any other portion of the building or the complex as a treatment, storage, or disposal (whether permanent or temporary) site for any hazardous material. Lessee further agrees that it will not cause or allow any asbestos to be incorporated into any improvements or alternations which it makes or causes to be made to the premises. Lessee hereby indemnifies the Lessor against any all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever (including without limitation, court costs and attorneys' fees) which at any time or from time to time may be paid, incurred or suffered by, or asserted against the City for, with respect to, or as a direct or indirect result of (a) breach by Lessee of the foregoing covenants, or, (b) to the extent caused or allowed by Lessee or any agent, employee, invitee, or licensee of leakage, spillage, discharge, emission C •IF=ev Lease of APN 073-281-004 Page 5 or release from, onto, or into the premises, the complex, the atmosphere, or any watercourse, body of water, or groundwater, or any hazardous material (including, without limitation, or any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under the Comprehensive Environment Response, Compensation and Liability Act, any so-called "Superfund" or "Superlien" law, or any other federal, state, local or other statute, law, ordinance, code, rule, regulation, order or decree regulating to or imposing liability or standards of conduct concerning any hazardous material); and the provisions of and undertakings and indemnification set out in this paragraph shall survive the termination of this Lease, and shall continue to be the personal liability, obligation and indemnification of the Lessee, binding upon the Lessee, forever. 14. INDEMNIFICATION Lessee shall defend, indemnify and save harmless the City and its agents, officers and employees against any and all 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 Lessee, its agents, employees, tenants, or assigns under this agreement; (b) any damage caused by any negligent act or omission of Lessee, its agents, employees, tenants or assigns under this agreement to any property of the City and its agents, officers and employees; (c) any damage, injury or death suffered by any agent, tenant, or assign of Lessee under this agreement, except for claims and demands resulting from the negligence or willful misconduct of the City and its agents, officers and employees; (d) Lessee's negligent violation of any law, any regulation or any term or condition of any permit. Lessee shall also defend, indemnify and save harmless the City and its agents, officers and employees against any and all expense of investigating and defending against such claims and demands, including, but not limited to, attorney's fees and costs. Lease of APN 073-281-004 Page 6 15. INSURANCE Lessee shall provide insurance as described in Exhibit B to this lease. 16. MODIFICATION OF THIS AGREEMENT Each of the terms, covenants, conditions of this lease are mutual and dependent, and any breach of any of the said terms, covenants or conditions shall constitute grounds for the termination, cancellation, or forfeiture of this lease. 17. 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 cost and attorneys fees in connection with such an action. 18. WAIVER OF RELOCATION ASSISTANCE In accordance with Civil Code Section 3513, Lessee hereby waives any rights to relocation assistance to which Lessee might otherwise be entitled, pursuant to Government Code Section 7260, et sea. Lessee shall indemnify and hold City harmless for any and all claims and demands which may be made against City in the event Lessee fails to include a waiver of relocation assistance clause in any lease, sublease, assignment or other agreement with respect to occupancy of the property by any tenant, subtenant or assign. 19. REMOVAL OF MOBILE HOME At the end of the lease term, Lessee shall, at his sole cost and expense, remove the existing mobile home from the leased premises and restore the mobile home site to an undeveloped condition acceptable to the City. Should Lessee fail to remove the mobile home within 60 days of the expiration of the lease term or sooner termination, at City's option: (1) said mobile home shall become the property of City; or (2) City may remove and dispose of said mobile home. Lessee shall indemnify and hold City harmless for all costs incurred, or claims, actions, liens or judgments arising as a result of the removal or disposal or City ownership of said mobile home on Lessee's failure to remove. c-6. 8 Lease of APN 073-281-004 Page 7 20. SUBJECT TO ALL LAWS AND BINDING This lease shall be subject to and subordinate to all laws, rules and regulations of the State of California and City of San Luis Obispo, including any and all conditions imposed by the City Council. This lease shall extend to and be binding upon the parties hereto, their representatives,assigns and successors, whomsoever. 21 . NOTICE Any notice required or permitted to be given or served under the terms hereof shall be considered delivered when sent registered, return receipt requested, through the United States mail to: Crtv Lessee Utilities Director Kenneth L. Glick City of San Luis Obispo 1315 Santa Rosa Street 955 Morro Street San Luis Obispo, CA 93401 San Luis Obispo, CA 93401 805-781-7215 805-544-3282 22. ENTIRE AGREEMENT This lease contains the entire agreement of the parties on the matters covered and it may not be modified except by written agreement. IN WITNESS WHEREOF, the parties have executed this lease on the date first above written. CITY OF SAN LUIS OBISPO, KENNETH L. GLICK a municipal corporation Mayor Allen Settle C 449 Lease of APN 073-,-8i-004 - Paws i ATTEST: APPROVED AS TO FORM: - --- —- - . City Clerk Lee Price ty ._ toy ey C. oto