HomeMy WebLinkAboutCentral Coast Ag Network - Calle Joaquin Agricultural Reserve - 01/07/2013Attachment 2
AGRICULTURAL GROUND LEASE BETWEEN
THE CITY OF SAN LUIS OBISPO AND
CENTRAL COAST AG NETWORK
2o 13
This Agricultural Ground Lease ( "Lease ") is entered into this I day of Juv ua� 20II, by
and between the City of San Luis Obispo (the "City ") and Central Coast Ag Network, a California
public benefit non - profit corporation ( "CCAN ").
RECITALS
A. The City owns certain agricultural land within City limits, commonly identified as the
Calle Joaquin Agricultural Reserve, 0 Calle Joaquin, San Luis Obispo.
B. The City desires to: place portions of the land in active agricultural use in furtherance of
the Land Use Element of its General Plan; retain the land as open agricultural space and maintain the
agricultural nature of the land; provide educational opportunities; support the health and wellness
benefits of local agriculture; and have the land act as a gateway to the City in recognition of the City's
agricultural heritage.
C. The City developed an Agricultural Master Plan for the land dated January 2011
( "Premises Master Plan "). The Premises Master Plan expected that certain portions of the land would
be leased to a nonprofit entity primarily for sustainable production agriculture for local consumption,
who would also oversee and manage on -site agricultural production and agricultural education
programs and activities.
D. CCAN is a nonprofit corporation whose purpose is to champion a sustainable local and
regional food system to ensure a nourishing, diverse and abundant supply of food that is resilient, safe
and secure, and CCAN seeks to manage the on -site agricultural production and agricultural education
and activities under sustainable agriculture practices.
E. Management of the land by CCAN in accordance with CCAN's purpose aligns with the
City's expectations and desires to highlight the City's agricultural heritage.
AGREEMENT
1. PREMISES. City hereby leases to CCAN, and CCAN leases from City, for the term and rent,
upon the terms and conditions below, and subject to the reserved rights and easements of record or set
forth below, approximately 18 acres of agricultural land, consisting of portions of Assessor Parcel
Numbers 053 -152 -009 and 053- 152 -006 as shown shaded on Exhibit "A" attached and incorporated by
this reference (the "Premises "). The Premises do not include the areas reserved for future bike lanes
and wetlands as shown on Exhibit "B" attached hereto and incorporated by this reference. City
reserves the right to remove acreage from the lease upon 90 calendar days written notice to facilitate
development of the future bike lanes or to facilitate preservation of the wetlands; provided, any
growing crops may be harvested prior to termination. CCAN shall access the Premises only from Calle
Joaquin Road.
Attachment 2
2. PURPOSE. The purpose of this agreement is to put the majority of the Premises into active
sustainable agricultural use, while permitting development of a portion of the Premises, not to exceed
the percentage allowable per zoning regulations, for facilities for the aggregation, light processing and
distribution of agricultural products grown locally or on the Premises as part of a local food system as
well as facilities to provide educational and agricultural support. Land management techniques on the
Premises shall be in support of sustainable agriculture techniques. Crop support and protection
techniques shall be used in accordance with legal regulations. Livestock and poultry for the sole
purpose of supporting sustainable agriculture techniques or education may be raised on the property.
CCAN may use the Premises for food production and education as described in this Section 2,
construction and use of the related Improvements, as well as events to raise funds for CCAN
( "Permitted Uses "). CCAN shall not use the Premises or any portion thereof for any other purposes,
unless the use is approved in advance in writing by the City and the rent increased to an amount
satisfactory to City. To fulfill the purpose of this Lease, CCAN agrees that it shall:
a. At all times during the term of this Lease, keep on file the contact information
for the designated representative of CCAN who is responsible for managing CCAN's operations
at the Premises as well as implementation of this Lease.
b. By January 31 of each year, CCAN shall submit an annual report to the City
Manager or his or her designee, which describes the actions that CCAN undertook during the
previous calendar year and actions that CCAN plans to take in the upcoming calendar year to
further the implementation of the goals as set forth in the Premises Master Plan.
c. By December 31, 2013: begin farming production on the Premises.
d. By December 31, 2015:
i. Submit a plan for public programming and the demonstration gardens
consistent with the Premises Master Plan for approval by the City Manager or his or her
designee which shall not be unreasonably withheld so long as said plan furthers and implements
the goals of the Premises Master Plan, and secure the funding necessary to implement the
planned public programing and demonstration gardens.
ii. Establish and maintain food crops on a portion of arable land and
maintain all arable land in good soil health.
e. By December 31, 2017:
i. Implement the public programming, which shall be maintained for the
remainder of the term of the Lease.
ii. Establish demonstration gardens, which shall be managed in a manner
consistent with sustainable agriculture practices for the remainder of the term of the Lease.
iii. Produce food crops on arable land.
Attachment 2
iv. Submit long term agricultural plan consistent with the Premises Master
Plan and develop milestones for the second ten years of the Lease for approval by the City
Manager or his or her designee, which shall not be unreasonably withheld so long as said plan
and milestones further and implement the goals of the Premises Master Plan.
V. Submit farmer programming consistent with the Premises Master Plan
for approval by the City Manager or his or her designee, which shall not be unreasonably
withheld so long as said plan furthers and implements the goals of the Premises Master Plan,
and secure the funding to implement farmer programming.
f. By December 31, 2022:
i. Long term agricultural plan is implemented, which shall be maintained
for the remainder of the term of the Lease.
ii. Educational programming is implemented, which shall be maintained for
the remainder of the term of the Lease.
CCAN's failure to fulfill the obligations as set forth in this paragraph by the stated deadline
shall be a material breach of this Lease, and the City shall have the right to terminate this Lease
pursuant to the terms set forth in paragraph 18.
3. TERM. The term of this Lease shall be for twenty (20) year period commencing on and
ending on , unless sooner terminated pursuant to the terms of this Lease.
4. RENT. In recognition of the benefits CCAN provides to the community, CCAN shall pay to
City as annual rent for the Premises $1 per year, payable on July 1 of each year.
5. CONSTRUCTION OF IMPROVEMENTS BY CCAN. CCAN may construct improvements on
the Premises that further the purposes of this Lease. CCAN shall obtain any and all governmental
approvals legally required to improve or alter the Premises. The improvements together with any other
alterations, additions or other improvements made to the Premises during the term of this lease, or any
extension of the lease, are referred to as the "Improvements ". The parties acknowledge that the
Improvements may be modified by the City of San Luis Obispo acting in its governmental capacity, but
are subject to final approval by City acting in its proprietary capacity as City in accordance with Section
5(e). In the event that CCAN undertakes construction of the Improvements, the following terms and
conditions shall apply:
a. CCAN Cost. CCAN shall bear and pay the cost of all construction, reconstruction,
demolition, alteration or improvements, including but not limited to permit, design and other fees.
CCAN shall determine whether prevailing wage applies to any contracts related to the construction,
reconstruction, demolition, or alteration of the Improvements.
b. Indemnity Against Claims. CCAN shall keep the Premises and Improvements free and
clear of all mechanics' liens and other liens. CCAN shall defend, indemnify and save harmless City and
3
Attachment 2
the Premises from and against any and all liability, loss, damage, claims, costs, attorneys' fees and other
expenses of any type arising out of work performed, or materials or equipment used, on the Premises or
in easements and rights -of -way for or by CCAN, including but not limited to, claims for liens of
contractors, subcontractors, material men, laborers, architects, engineers or other design professionals.
City shall have the right, but not the duty, to pay or otherwise discharge, stay, or prevent the execution of
any judgment or lien, or both. CCAN shall reimburse City for all sums paid by City under this paragraph,
together with all of City's reasonable attorneys' fees and costs, plus interest on all sums expended at the
rate of ten percent (10 %) per annum from the date paid by City to the date paid by CCAN.
Notwithstanding CCAN's obligations as set forth in this Lease, City and CCAN acknowledge that all or
part of the Premises are currently leased for farming by City. CCAN is willing to enter into this Lease
and allow the current lessee to remain on the Premises until the current crop is harvested, removed and
the ground tilled following harvest. City hereby agrees that CCAN shall have no liability whatsoever,
and shall have no duty to defend or indemnify City, for any act or failure to act of such lessee.
c. Conceptual Development Plans. Prior to applying for a building permit, CCAN shall
deliver to City a set of conceptual development plans of all off -site and on -site improvements, including
exterior architectural appearance of the buildings, including design, color and materials, prepared by an
architect or engineer, as applicable. The conceptual development plan and all parts thereof are subject to
City's approval. City shall notify CCAN in writing of its approval or disapproval of the conceptual
development plan.
d. Preliminary Plans and Specifications. Prior to beginning construction, CCAN shall
deliver to City a set of preliminary development plans, including construction plans and specifications of
all off -site and on -site improvements, including exterior architectural appearance of buildings, including
design, color and materials, prepared by an architect or engineer, as applicable, licensed to practice as
such in California. In addition to all items required by City acting in its regulatory capacity, the plans and
specifications shall include, but are not limited to: preliminary grading and drainage plans; soil tests;
utilities, sewer and service connections; designs and locations of buildings, curbs, gutters, sidewalks,
parking areas, exterior lighting, outdoor signs, storage areas, landscaping, and ingress and egress to and
from public streets, in sufficient detail to enable potential contractors and subcontractors to make
reasonably accurate bid estimates and to enable City to make an informed judgment about the design and
quality of construction. All on -site improvements shall be constructed within the exterior property lines
of the Premises. The plans and specifications and any modifications thereto, including exterior
architectural appearance of buildings, including design, color and materials, are subject to City's
approval.
e. Final Plans. CCAN shall prepare final working plans and specifications conforming to
preliminary plans approved by City, submit them to the appropriate governmental agencies for approval,
and deliver to City one complete set as approved by the governmental agencies, together with written
evidence of how it will obtain the funds necessary to complete the construction of the Improvements in
accordance with the approved plans and specifications. Changes from the preliminary plans shall be
considered to be within the scope of the preliminary plans if they are made to comply with requirements
of a governmental agency or official in connection with the application for permit or approval and do not
noticeably affect the exterior appearance or layout of the Premises. Any substantial or material changes
or any changes affecting the size, design, layout or exterior appearance of the Improvements require the
prior written approval of City.
4
Attachment 2
f. Bonds. Upon City's request, CCAN shall furnish City with a performance bond and labor
and materials bond, irrevocable letter of credit or other security acceptable to City, each in an amount not
less than one hundred percent (100 %) of the estimated cost of the Improvements, in a form and with a
company acceptable to City, prior to constructing Improvements or repairs on the Premises. The bonds or
other security shall remain in effect until forty-five (45) days after recording of a notice of completion, or
until the entire cost of the work shall have been paid in full, whichever last occurs. If bonds are used,
each bond shall be issued by a corporate surety licensed to do business in California and shall remain in
effect until the cost of the Improvements shall be paid in full. The bond shall state the following:
i. That it is conditioned to secure the completion of the proposed construction, in
accordance with the plans and specifications approved by City, free from all liens and claims of
contractors, subcontractors, mechanics, laborers, and materialmen;
ii. That the construction work shall be completed by CLAN, its general contractor, or on
either's default, the surety;
iii. That upon default in such completion and payment, such part of the amount of the
bond as shall be required to complete the work shall be paid to City as liquidated and agreed damages for
the nonperformance of CCAN's agreements, it being agreed that the exact amount of City's damages is
difficult and impractical to ascertain;
iv. That the surety will defend and indemnify City against all loss, cost, damage, expense,
and liability arising out of or connected with the work of improvement; and
v. At City's option, that uncompleted construction be removed and the Premises restored
to a condition satisfactory to City.
g. Notice of Non - Responsibility. At least ten (10) days prior to initiation of any
improvement, or delivery of any materials to the Premises, CCAN shall notify City of same. City shall
have the right to post, and /or publish, and record a Notice of Nonresponsibility.
h. Permits. CCAN shall procure and comply with all then applicable codes, ordinances,
regulations and requirements for permits and approvals, including but not restricted to a grading permit,
building permits, zoning, environmental and planning requirements, subdivision and parcel maps, and
approvals from various governmental agencies and bodies having jurisdiction.
i. Builder's Risk Insurance. CCAN shall deliver to City a certificate(s) of insurance
evidencing coverage for "builder's risk" and "course of construction" insurance on the Improvements then
in place or under way, including coverage against collapse, vandalism and malicious mischief.
j. Soil Conditions. City makes no covenants or warranties respecting the condition of the
soil or subsoil or any other condition of the leased land. CCAN may enter onto the land before the
commencement date of the lease term to make surveys and soil and structural engineering tests that
CCAN considers necessary. All such surveys and tests made by or on behalf of CCAN shall be at
CCAN's sole expense, without liability or expense to City. Copies shall be furnished to City upon
request. In the event existing soil conditions on the Premises are not suitable for CCAN's development,
5
Attachment 2
or necessitate environmental cleanup for pre- existing conditions, City shall use its best efforts to provide
CCAN with an alternate site for CCAN's development.
k. Diligence. CCAN shall with reasonable diligence prosecute to completion all
construction of Improvements, additions or alterations. All work shall be performed in a good and
workmanlike manner, shall substantially comply with plans and specifications submitted to City as
required by this Lease, and shall comply with all applicable governmental permits, laws, ordinances and
regulations.
1. Parcel or Subdivision Mao. If a parcel map or subdivision map of the Premises is required
by the City of San Luis Obispo in connection with this Lease or the Improvements or use of the Premises,
CCAN shall either terminate this Lease without any further liability to City, or prepare and process the
same for the City's approval, at CCAN's expense, including all fees, security bonds, deposits,
engineering, surveying and improvement costs. If a map is required to be approved and filed, the time
required for commencing construction of the Improvements and reaching milestones shall be extended by
the time required to process and record the map.
6. WATER.
a. Water Additional. The annual rent does not include the cost of any water. City well
water is available at no cost to CCAN, provided it is used consistent with the terms and conditions of
this Lease. CCAN may purchase potable water, recycled water and/or access to the sewer system at
rates available to the general public.
b. Installation of New Well. If an existing well needs to be repaired or improved or a new
well is needed prior to CCAN's entry onto the Premises, City shall use its best efforts to have the well
installed by the owner of the Target project, who is required to do so as a mitigation measure for the
Target project, as soon as possible after the execution of this Lease. If the Target project owner fails to
install the new well as required, the City shall pay for the new well installation so long as the costs do
not exceed $45,000. If the bids for the well installation exceed $45,000, either City or CCAN may
terminate this lease unless CCAN pays the costs in excess of $45,000 to City prior to award of the
construction contract. CCAN shall be liable for any damage caused by CCAN, its employees, officers,
directors, contractors, subtenants or others acting for or on its behalf, to the well system. Both the
City and CCAN agree to use best efforts to cooperate with respect to installation of a new well.
c. Non - Exclusive Use of Well Water. CCAN shall have a non - exclusive right to use
reasonable quantities of City well water for use on the Premises, except as otherwise specifically
provided in this Lease. City shall not be liable for any interruptions or failures in well water delivery,
nor for the quality of water. CCAN shall be responsible for securing a backup water supply at CCAN's
sole cost and expense, if desired. CCAN shall not sell any water obtained from any source on the
Premises nor use or permit the use of water from the Premises on any other lands, including but not
limited to, adjoining properties.
d. Non - Exclusive Use of Water Facilities. CCAN shall have the non - exclusive use of any
water wells, pumps, water storage ponds, water storage tanks and irrigation lines which may be located
on the Premises at the time of execution of this Lease.
Attachment 2
e. Payment for Pumping charges. CCAN shall pay for all utility or other charges
associated with operating the pumps on any well as long as CCAN or its subtenants are the sole user of
the City well. City reserves the right to use well water for its own purposes, and to allow others to use
the well water, so long as there remains sufficient water to meet the agricultural and other on -site needs
of CCAN. In the event City or any other person with City's consent uses City well water, the costs
shall be prorated among the users based on usage.
f. Maintenance of Pumps. CCAN shall also maintain the City well pumps in a first class
condition, ordinary wear and tear excepted. CCAN shall contract with a firm approved by City to
maintain the City well. If CCAN fails to do so, City may contract with a firm to provide maintenance
of the well pumps and engines, and such maintenance costs shall be additional rent, due and payable
immediately to City on demand. All rights and remedies available to City for non - payment of rent shall
apply to the maintenance costs for the well pumps and engines. In the event City or any other person
with City's consent uses City well water, the maintenance costs for the well pumps and engines shall be
prorated among the users based on usage.
g. Prevention of Escape of Irrigation Water. Except for normal drainage of irrigation tail
waters through existing drainage channels, CCAN shall irrigate the Premises in accordance with all
laws and regulations. CCAN shall pay all damages occasioned by its failure to comply with applicable
laws and regulations.
If the use of any impervious or semi - impervious surface coverings (such as plastic) increases
storm water runoff to the extent that any portion of the Premises or any other property(ies) is or are
eroded, CCAN shall repair the eroded areas, and prevent any subsequent erosion or else cease the use
that is creating the erosion. Should CCAN fail to do so within fifteen (15) days of notice from City,
City shall have the right to terminate this Lease upon thirty (30) days' written notice to CCAN. In the
event of any such termination, CCAN shall still be obligated to repair any eroded areas. Nothing herein
shall be deemed to make CCAN responsible for an act of God wherein storm waters are of such volume
or velocity that the damage would have been caused regardless of the impervious or semi - impervious
surface coverings
7. PROHIBITED USES. CCAN shall not use or permit use of the Premises, or any portions
thereof, for any of the following purposes:
a. No retail sale of crops or livestock, unless approved by the City.
b. Use any portion of the Premises contrary to or in violation of the directives, rules or
regulations of the City, or any governmental entity or agency having jurisdiction, as such directives,
rules or regulations now exist or may exist in the future; provided, however, that if any directive, rule
or regulation adopted in the future unreasonably impairs CCAN's ability to grow crops on the
Premises, then CCAN shall have the right to terminate this Lease on sixty (60) days' written notice to
City delivered no later than thirty (30) days after the effective date of the directive, rule or regulation.
Attachment 2
c. Store on the Premises any property or articles, or conduct any activities or operations
which are not directly related or incident to the Permitted Uses. Any storage not incident to the
Permitted Uses requires prior written consent of City's City Manager.
d. Erect any structure except fences and gates on the Premises without complying with
City's permitting and review processes and obtaining City approval.
e. Conduct any use or activity which would affect safe air navigation, or would be
hazardous to safe operation of aircraft, including but not limited to: use or location on the Premises of
any material which would cause sunlight to be reflected toward an aircraft on initial climb or final
descent; any use or activity which would direct steady or flashing lights at aircraft, on initial climb or
final descent; any use or activity which would generate smoke or attract large concentrations of birds.
£ Store any hazardous or toxic materials on the Premises, except as approved by City in
writing and in accordance with the terms and conditions of all required permits.
g. Permit any residential use or overnight camping or occupancy.
h. CCAN shall not commit, or suffer or permit waste, noise, odors, dust or any other
nuisance on the Premises or any activity constituting an unreasonable interference with members of the
public or persons living or working in the vicinity of the Premises.
i. Conduct any use other than the Permitted Uses.
8. UTILITIES. City shall have no responsibility to provide any further utility extensions of
any kind to the Premises beyond those that exist currently, and any such extension, including but not
limited to, lateral extensions to existing utilities and/or connections to existing utilities infrastructure by
CLAN, shall be at CCAN's sole cost and expense after obtaining City permits.
9. TAXES, LICENSES. CCAN shall pay before delinquency any and all taxes,
assessments, fees or charges, including possessory interest taxes, and real property taxes which may be
imposed, levied or assessed upon any leasehold or possessory interests of CCAN, and personal
property, improvements or fixtures owned, controlled or installed by CCAN and used or located on the
Premises or used in CCAN's business. CCAN shall also secure and maintain in force during the term of
this Lease all licenses and permits, which are required by law for the conduct of CCAN's business or
operations.
10. ASSUMPTION OF RISKS. CCAN has inspected the Premises and accepts the
condition of the Premises and fully assumes all risks incidental to the use of the Premises. City shall
not be liable to CCAN's agents, employees, visitors, guests or invitees from any cause or condition
whatsoever. City makes no warranty of the suitability of the Premises for the purpose contemplated by
CCAN or that the leased Premises are zoned for the uses permitted.
11. INDEMNITY. CCAN shall defend (with counsel acceptable to City), protect, indemnify
and hold harmless City, its elected and appointed officials, officers, employees, agents and
representatives, and the Premises (collectively "City ") at all times from and against any and all
liabilities, proceedings, liens, actions, penalties, losses, expenses, claims or demands of any nature,
8
Attachment 2
including costs and expenses for legal services which City may incur, sustain or be subjected to
(collectively "Liabilities ") arising out of or in any way connected with: the acts or omissions of, CCAN
and/or any subtenant, or either of their officers, agents, employees, guests, customers, visitors or
invitees (collectively "CLAN "); or CCAN's operations on, or use or occupancy of, the Premises. The
foregoing indemnification excludes only Liabilities caused by the sole active negligence of City or its
willful misconduct.
CCAN shall also indemnify and hold City harmless from and against any Liabilities including
third party claims, environmental requirements and environmental damages, costs of investigation and
cleanup, penalties, fines, and losses (including, without limitation, diminution in value of the Premises
or the improvements thereon or property or improvements in the vicinity of the Premises) of whatever
kind or nature, which result from or are in any way connected with the release, receipt, handling, use,
storage, accumulation, transportation, generation, discharge, or disposal (collectively "Release ") of any
toxic or hazardous materials which occurs in, on or about the Premises as the result of CCAN's
activities. CCAN shall notify City immediately of any Release of any toxic or hazardous material on
the Premises. CCAN shall not be responsible for any hazardous or toxic material on the Premises
which predates CCAN's occupancy of the Premises.
12. INSURANCE. CCAN shall, at CCAN's sole cost and expense, secure and maintain in
full force and effect at all times during the term of this Lease, and any extension, insurance meeting
City's standard insurance requirements, plus farm equipment liability and automobile liability
insurance for all mobile equipment and vehicles used on or about the Premises,
City shall be named as an additional insured in each policy required herein without offset to any
insurance policies of the City. CCAN shall provide City with copies of all insurance certificates issued
by the insurer, including in each instance an endorsement or certificate providing that such insurance
shall not be cancelled or coverage reduced except after thirty (30) days' written notice to City. The
types of coverage and liability limits of all insurance may be changed or increased at the option of City,
in the exercise of its reasonable discretion in evaluating its liability exposure, upon giving CCAN at
least thirty (3 0) days' prior written notice of the increased limits. CCAN shall also provide City with an
endorsement for the contractual liability insurance.
13. ALTERATIONS /OWNERSHIP OF IMPROVEMENTS/REMOVAL. Except as
expressly permitted herein, CCAN shall make no Improvements on the Premises without City's prior
written consent. All Improvements made by CCAN, during the Lease, shall be CCAN's property during
the term. Upon expiration or termination of the Lease, all Improvements shall, unless City elects
otherwise in writing at least 90 days prior to termination or expiration of this Lease, become the
property of City, and shall remain upon and shall be surrendered with the Premises without disturbance,
molestation, or injury. If City elects by written notice to CCAN that all or a designated portion of the
Improvements made by CCAN shall be removed, then CCAN shall at CCAN's expense remove (prior
to expiration of the Lease) such Improvements, or such portion thereof designated by City, and restore
the Premises to at least its former condition, reasonable wear and tear excepted, and repair any damage
resulting from such removal. These provisions shall survive the expiration or termination of the Lease.
14. LIGHTING. SECURITY/FENCING. City has no obligation to provide security guards,
lighting or fencing.
Attachment 2
15. MAINTENANCE.
a. CCAN's Duty to Maintain. CCAN shall, at CCAN's sole cost and expense, keep and
maintain the Premises, and all Improvements on the Premises in good, safe, sanitary and clean order,
condition and repair at all times in accordance with all applicable laws, rules, ordinances, orders and
regulations of any governmental agency or body having jurisdiction. CCAN waives all rights to make
repairs at the expense of City. CCAN shall keep the Premises, at CCAN's expense, clean and free from
litter, garbage, refuse and debris at all times. CCAN shall take reasonable measures to protect the
Premises from infestation of birds, insects, rodents and other pests. CCAN shall maintain all landscaping
at all times. CCAN shall comply with all reasonable orders and instructions of City's General Manager or
designee in the use of the Premises in accordance with the Permitted Uses, which the City Manager
deems to be in the best interest of the City, the public or for their safety and welfare.
If CCAN fails to maintain or make repairs as required herein, City shall have the right, but
not the obligation, of making necessary corrections after a reasonable written notice from City of its
intent to do so. All costs incurred by City in making said corrections, including but not limited to the cost
of labor, materials, equipment and administration, shall be additional rent, and CCAN shall pay the same
within fifteen (15) days of receipt of a statement of City's costs. City may, at its option, choose other
remedies available herein as allowed by law.
Nothing in this section defining the duty of maintenance shall be construed as limiting any
right given elsewhere in this Lease to alter, modify, demolish, remove, or replace any Improvement, or as
limiting provisions relating to condemnation or to damage or destruction during the final years of the
Lease term. No deprivation, impairment or limitation of use resulting from any event or work
contemplated by this section shall entitle CCAN to any offset, abatement, or reduction in rent nor to any
termination or extension of the Lease term.
b. Damage to and Destruction of Improvements. Except as provided below, CCAN shall
promptly and diligently repair, restore, and replace as required to maintain in accordance with the
immediately preceding paragraph, or to remedy all damage to or destruction of all or any part of the
Improvements on the Premises. The completed work of maintenance, compliance, repair, restoration or
replacement shall be equal in value, quality, and use to the condition of the Improvements before the
event giving rise to the work, valued as if the Improvements had been maintained in accordance with the
Lease. City shall not be required to furnish any services or facilities or to make any repairs or alterations
of any kind in or on the Premises. City's election to perform any obligation of CCAN under this
provision after CCAN's failure or refusal to do so shall not constitute a waiver or any right or remedy for
CCAN's default. CCAN shall promptly reimburse, defend and indemnify City against all liability, loss,
cost and expense arising from it.
c. Duty on Termination. In the event the Lease is terminated pursuant to the provisions of
subparagraph (b), above, CCAN shall comply with all of the following conditions prior to termination
and all rent for the period following compliance by CCAN with all of the following conditions shall be
abated:
(1) CCAN delivers possession of the Premises to City and quitclaims all right, title
and interest in the Premises by a recordable quitclaim deed executed by CCAN and delivered to City.
10
Attachment 2
(2) CCAN removes (or deposits the cost of removing as estimated by City) all fixtures
and Improvements as specified by City to be removed and returns the Premises to City in a clean, graded
condition.
(3) CCAN effectively relinquishes and transfers to City all insurance proceeds
resulting from the casualty to the extent of the value of the Improvements immediately prior to their
damage or destruction, appraised at its replacement value.
16. ACCEPTANCE /SURRENDER. On the expiration or sooner termination of this Lease,
CCAN shall promptly surrender the Premises to City in the same condition as when received,
reasonable wear and tear excepted, damage by acts of God or by the elements excepted, subject to the
provisions of the ALTERATIONS /IMPROVEMENTS/REMOVAL paragraph.
17. CONDEMNATION. In the event of any taking or damage of all or any part of the
Premises or any interest therein by reason of any exercise of the power of eminent domain, whether by
a condemnation proceeding or otherwise, or any transfer of all or any part of the Premises or any
interest therein made in avoidance of an exercise of the power of eminent domain (all of the foregoing
being hereinafter referred to as "appropriation ") during the term of this Lease, this Lease shall
terminate as of the date of such appropriation, the rental shall be prorated to the date of termination,
City shall be entitled to the entire award made with respect to such appropriation of the land and City
improvements, including but not limited to the City wells, and CCAN hereby assigns to City all of
CCAN's interest, if any, in such award as to the land and City improvements. Nothing herein shall be
deemed to constitute a waiver or transfer of any award due CCAN associated with the loss of any of its
crops or improvements installed by CCAN.
18. TERMINATION BY CITY. City, in addition to any right of termination as a matter of
law or any other right herein given to City, may at its option cancel and terminate this Lease and
agreement upon any default, by written notice given to CCAN and a ten (10) day opportunity to cure,
upon or after the occurrence of any of the following events:
a. Filing by or against CCAN of a voluntary or involuntary petition in bankruptcy or for
reorganization, or taking of CCAN's assets pursuant to a proceedings under the Federal Reorganization
Act, or the adjudication of CCAN as a bankrupt, or the appointment of a receiver of CCAN's assets, or
divestiture of CCAN's assets or estate herein by operation of law or otherwise, or assignment by
CCAN of its assets for the benefit of creditors.
b. The breach by CCAN or failure of CCAN to keep, observe or perform any of the
covenants, terms, conditions or provisions herein contained on the part of CCAN to be observed, kept
or performed.
c. Dissolution or liquidation of CCAN of all or substantially all of its assets.
d. The transfer, in whole or in part, of CCAN's interest in this Lease or in the premises, or
any rights hereunder, by operation of law, whether by judgment, attachment, execution, process or
proceeding of any court or any other means.
11
Attachment
19. EARLY TERMINATION OF LEASE.
a. CITY'S RIGHT TO EARLY TERMINATION. Notwithstanding any other provision
contained in this Lease, at any time prior to the construction of the Improvements, City shall have the
right to terminate this Lease, as to all or any portion of the Premises, without liability to CCAN or
anyone claiming through CCAN, if City gives CCAN at least one (1) year's written notice. This
termination right may be exercised only in the event City's Council, in the exercise of its sole
discretion, either: (i) authorizes the sale of the Premises or any portion thereof and directs City staff to
market the same for sale, or (ii) authorizes the lease of the Premises or any portion thereof for any use
or purpose other than sustainably grown crops and directs City staff to market the same for lease, or
(iii) grants an easement over the Premises that is incompatible with the permitted uses, or (iv)
determines that termination of all or a portion of the Lease is required by any governmental agency or
entity as a mitigation measure of condition of development on any City property, or (v) determines it is
in the City's best interests to terminate. The term of this Lease shall then expire and come to an end on
such date, as fully and completely as if that date were the day definitely fixed for expiration of the
term.
After construction of the Improvements, City shall have the right to terminate only upon City's
payment to CCAN, of CCAN's out of pocket costs of the Improvements, less depreciation (flat line
depreciation over 20 year extended term), and less any outstanding indebtedness remaining from the
construction of the Improvements, which indebtedness City shall pay off to the appropriate lender(s).
City shall have no obligation to pay for any value of the Improvements above their depreciated cost of
construction.
b. CCAN's RIGHT OF EARLY TERMINATION.
CCAN may terminate this Lease if it is unable to sub -lease the Premises to a sustainable
farming operation within twelve (12) months from the date of execution of this Lease, or if it should be
unable to sub -lease the Premises during any subsequent twelve (12) month period following an initial
sub -lease of the Premises.
20. NOTICES. All notices required herein shall be in writing and may be given by personal
delivery or by registered or certified mail, postage prepaid, and addressed to City at , and to
CCAN at . Either party may at any time change its address for such notice by giving written
notice of such change to the other parry. Delivery of any notice shall be deemed complete upon being
deposited as aforesaid at any United States Post Office or branch or substation.
21. ASSIGNMENT AND SUBLETTING. Except as specifically provided in this paragraph,
CCAN shall not assign, mortgage, encumber, transfer, sublet or grant control of this Lease or any
interest, right or privilege therein. Any such assignment, mortgage, encumbrance, transfer, sublet or
grant of control shall be void and, at the option of City, shall terminate this Lease. CCAN may sublet
any portion of the Premises for sustainable agricultural cultivation with the prior written consent of the
City, which consent shall not be unreasonably withheld. CCAN shall provide City with copies of all
subleases, which shall specifically incorporate the terms of this lease and be subject to it. Each sublease
is required to be approved by City's Manager in writing. Revenue derived from any sublease of the
Premises shall be used by CCAN to further the purposes of this Lease. City shall have the right to
audit the records of CCAN to monitor compliance with this paragraph.
12
Attachment 2
22. RIGHT OF ENTRY. City, the County of San Luis Obispo, any government entity
having jurisdiction and any utility company shall have the right to enter the Premises at any reasonable
time for inspections, to make repairs, or to show the Premises to prospective buyers or at any time in
case of emergency.
23. ATTORNEYS' FEES. In the event either party commences any legal action or
proceeding against the other party arising out of or related to this Lease, the party prevailing in such
action shall be entitled to recover court costs and a reasonable attorney's fee to be fixed by the court
(including the reasonable value of services rendered in such action by City's City Attorney).
24. COMPLIANCE WITH LAWS. CCAN shall comply with all applicable and valid laws,
rules, regulations and orders of federal, state and local governments and governmental agencies,
including, but not limited to, any and all regulations concerning air quality and/or water quality, the
environment or endangered species; fire and/or occupational safety; or accessibility; hazardous or toxic
materials, which may apply to the conduct of CCAN's business or CCAN's improvements.
25. GENERAL.
a. Each term and each provision of this Lease performable by CCAN shall be construed to
be both a covenant and a condition. Time is of the essence of each term, covenant, condition and
provision of this Lease.
b. One or more waivers by City of any covenant or condition shall not be construed as a
waiver of a subsequent breach of the same or any other covenant or condition. City's consent to or
approval of any act by CCAN requiring City's consent or approval of any act by CCAN requiring
City's consent or approval shall not be deemed to waive or render unnecessary City's consent to or
approval of any subsequent similar act by CCAN. No act or thing done by City or City's employees or
agents shall be deemed an acceptance of a surrender of the premises, and no agreement to accept such
surrender shall be valid unless in writing signed by City.
c. This lease and CCAN's rights hereunder are subject and subordinate to all conditions,
reservations, restrictions, easements, rights, rights —of —way, and encumbrances affecting the Premises
now of record or hereafter granted, caused or suffered by City. City specifically reserves the right to
grant easements across the Premises.
d. Captions appearing herein are for convenience of reference only and shall not govern
the construction of this Lease.
e. If any provision of this Lease shall be held by a court of competent jurisdiction to be
invalid, the remainder of this Lease shall continue in full force and effect and shall in no way be
affected or invalidated thereby. This Lease contains all of the agreements and conditions made between
the parties and may not be modified orally or in any other manner than by an agreement in writing
signed by the parties to this Lease. No provision of this Lease shall be deemed to have been waived by
City unless such waiver is in writing signed by City's City Manager.
13
Attachment 2
26. INTERPRETATION AND VENUE. This Lease is to be interpreted in accordance with
the laws of the State of California. Any legal action relating to this Lease shall be brought in the court
of appropriate jurisdiction in the county of San Luis Obispo, State of California.
27. CITY'S REMEDIES. City shall have the following remedies if CCAN breaches the
Lease, which remedies are not exclusive; they are cumulative in addition to any remedies specified herein
or to any remedies now or later allowed by law:
a. City can continue this Lease in full force and effect, and the Lease will continue in effect
as long as City does not terminate CCAN's right to possession, and City shall have the right to collect rent
when due. During the period CCAN is in default, City can enter the Premises and relet them, or any part
of them, to third parties for CCAN's account. CCAN shall be liable immediately to City for all costs City
incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses of
repairing the Premises in accordance with this Lease, and like costs. Reletting can be for a period shorter
or longer than the remaining term of this Lease. CCAN shall pay to City the rent due under this Lease on
the dates the rent is due, less the rent City receives from any reletting. No act by City allowed by this
paragraph shall terminate this Lease unless City notifies CCAN that City elects to terminate this Lease.
After CCAN's default and for as long as City does not terminate CCAN's right to possession of the
Premises, if CCAN obtains City's consent CCAN shall have the right to assign or sublet its interest in this
Lease, but CCAN shall not be released from liability. City's consent to a proposed assignment or
subletting shall not be unreasonably withheld.
b. City can terminate CCAN's right to possession of the Premises at any time. No act by
City other than giving notice to CCAN shall terminate this Lease. Acts of maintenance, efforts to relet
the Premises, or the appointment of a receiver on City's initiative to protect City's interest under this
Lease shall not constitute a termination of CCAN's right to possession.
c. In addition to any other remedy City may have under this Lease or by operation of law,
City shall have the right, in the event of CCAN's nonpayment of rent, or in the event of any other default
by CCAN in the performance or observance of any of the terms or condition of this Lease, or if CCAN
shall abandon or vacate the Premises, to terminate this Lease upon written notice to CCAN and reenter
the Premises and eject all persons and remove all Premises from the Premises or any part of the Premises.
Any property removed from the Premises upon re -entry by City under this paragraph may be stored in a
public warehouse or elsewhere at the cost of and for the account of CCAN, and City shall have no
liability therefor.
d. If CCAN is in default of this Lease City shall have the right to have a receiver appointed
to collect rent and conduct CCAN's business. Neither the filing of a petition for the appointment of a
receiver nor the appointment itself shall constitute an election by City to terminate this Lease.
e. City, at any time after CCAN commits a default, can cure the default at CCAN's cost. If
City at any time, by reason of CCAN's default, pays any sum or does any act that requires the payment of
any sum, the sum paid by City shall be due immediately from CCAN to City at the time the sum is paid,
and if paid at a later date shall bear interest at the rate set forth in subparagraph g, below, from the date
the sum is paid by City until City is reimbursed by CCAN. The sum, together with interest on it, shall be
additional rent.
IM
[Remainder of page intentionally blank]
15
Attachment 2
Attachment
28. DISCLAIMER OF PARTNERSHIP. The relationship between the parties is one of
landlord and tenant only. This Lease does not constitute a partnership or joint venture or agency
agreement between the parties.
City Attorney
CITY OF SAN LUIS OBISPO
CENTRAL, COAST AG NETWORK, a California public benefit non -profit corporation
Pre ent
&e4 I
S c etary
16
Exi bit A Attachment 2
Parcels
*Map Not to Scale
Exi bit B Attachment 2
Areas Reserved
*Map Not to Scale