HomeMy WebLinkAbout6825-68490 41
RESOLUTION NO. 6849 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO CONFIRMING LIENS UPON REAL PROPERTY PARCELS
FOR WEED ABATEMENT COSTS
BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:
1) This Council hereby finds and confirms the existence as of August 7, 1990, of
duly imposed liens in the amounts and upon the real property parcels set forth in Exhibit "A"
delinquency list attached hereto. Said liens were imposed for weed abatement costs incurred by
the City upon said parcels in Calendar Year 1990 in accordance with provisions of the City's
Municipal Code, Section 8.08.0 10 to 8.08.110 inclusive.
2) The Director of Finance is directed to send a copy of this Resolution to the
Auditor - Controller of the County of San Luis Obispo for collections of said liens along with
regular City property taxes for 1990/91
On motion of _Councilman Roalman seconded by
a,,,;,c, 11aomaa Rappa and on the following roll call vote:
AYES: Councilmembers Roalman, Rappa, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing Resolution was passed and adopted this 7th Day of August .
1990.
ATTEST
CITY CLE K PAMELA V GES
�go —
ale -3- - eM YOR RON DUNIN
R 6849
RESOLUTION NO. 6849 (1990 Series) - Page two
APPROVED:
ity Adm istrative Officer
r.
1990 WEED ABATEMENT BILLING EXHIBIT A
The following is a breakdown of Fire Department abatement costs for 1990. This report is being
submitted to the San Luis Obispo City Council for approval on August 7, 1990.
Name Parcel No.. FD Cost Admin Fee Penalty Total
R. C. Leal 002 -508 -012
364 Pacific $ 92.50 $ 69.38 $75.00 $ 236.88
444 Higuera St., A Ltd Ptp
A. G. Gomez
Wayne Gann
Marian Pratt
SLO Partners, A Gen Ptshp
I. Lara
Margaret J. Templeton
G. M. Bartlett
Ilmar Jackson
Ilmar Jackson as follows:
002 - 511 -018
444 Higuera $ 98.75
003 - 613 -007
493 Pismo $ 92.50
004 - 826 -041
2221 King Ct. $ 655.00
053 - 061 -024
3750 Bullock Lane $ 269.50
053 - 061 -038
053- 061 -040
861 and 953 Orcutt $ 223.50
053- 063 -001
3418 Sacramento $ 52.50
053- 063 -019
3427 Roberto Court $ 235.00
053- 171 -029
1616 Calle Joaquin $ 189.00
053 -641 -003
663 Church Street $1,387.50
11/88 Unpaid bill for weed abatement 11/7/88
11/89 Unpaid bill for weed abatement 9/7/89
$ 74.06 $75.00 $ 247.81
$ 69.38 $75.00 $ 236.88
$ 491.25 $75.00 $1,221.25
$ 202.13 $75.00 $ 546.63
$ 167.63 $75.00 $ 466.13
$ 39.38 $75.00 $ 166.88
$ 176.25 $75.00 $ 486.25
$ 141.75 $75.00 $ 405.75
$ 1,387.-50
$ 907.88
$ 1,128.88
Southern Pacific Transportation Co. - (Amount to be included before Council Meeting)
A:WA90
a
a
Cl;
RESOLUTION NO. 6848 (1990 Series)
AUTHORIZING FILING APPLICATION FOR A STATE
REVOLVING FUND LOAN TO CONSTRUCT FACILITIES FOR
THE CONTROL AND PREVENTION OF WATER POLLUTION
WHEREAS; the City is required to comply with wastewater
discharge limitations,established by the State and Federal
governments; and
WHEREAS, the City plans to construct facilities necessary to
reach compliance with the aforementioned limitations; and
WHEREAS, the City is seeking funding assistance for the
construction of the required facilities through State Revolving
Fund low interest loans; and
WHEREAS, the State requires designation and authorization of
representatives of the City to file the loan application and
related materials.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the
City of San Luis Obispo that the City Administrative Officer or
his /her designee is hereby authorized and directed to sign and
file, for and on behalf of the City of San Luis Obispo, an
application for a State Revolving Fund Loan under the Water
Quality Act of 1987 (PL 100 -4) and any agreements or other
documents necessary to secure and receive a State Revolving fund
Loan under said Act and the Clean Water Bond Laws of 1984 and
1988.
BE IT RESOLVED that the City of San Luis Obispo hereby
agrees and further does authorize the aforementioned
representative or his /her designee to certify that the
municipality has and will comply with all applicable state and
federal statutory and regulatory requirements related to any
federal and state loan funds received.
BE IT FURTHER RESOLVED that the City Administrative Officer
or his /her designee of the City of San Luis Obispo is hereby
authorized to execute the resultant loan agreement and any
amendments thereto for the purpose of securing the loan funds. A
copy of the agreement will be filed in the office of the
Authorized Record Keeper of the Governing Board.
Resolution No. 6848 (1990 Series)
Upon motion of Councilwoman Rappa , seconded by Councilman
Roalman , and on the following role call vote:
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing.resolution was adopted this 7th day of A„g„at ,
1990.
R RON DUNIN
ATTEST:
Pam Vo es, City Clerk
APPROVED:
J
Cl/
,
.r
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AFFIDAVIT OF PUBLICATION
No. -9234
STATE OF CALIFORNIA, )
)} ss.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above - entitled MATTER
I am now, and at all times embraced
in the publication herein mentioned was, the principal clerk
of the printers and publishers of the SAN LUIS OBISPO
COUNTY TELEGRAM - TRIBUNE, a newspaper of general cir-
culation, printed and published daily, Sundays excepted, at
the City of San Luis Obispo in the above named county and
state; that NOTICE
of which the annexed clipping is a true printed copy, was
published in the above -named newspaper and not in any
supplement thereof — on the following dates, to-wit:
--8/2
that said newspaper was duly and regularly ascertained and
established a newspaper of general circulation by Decree
entered in the Superior Court of San Luis Obispo County,
State of California, on June 9, 1952, under the provisions of
Chapter 1, Division 7, Title 1 of the Government Code of the
State of California.
I certify (or declare) under penalty p) perjury that the fore-
going is true and correct. n j 11 4
Date Septemb"er_1_, 19_90
e SOLUTION
OF INTENTION
n 'RESOLUTION NO. 6847 - .
' en I
A RESOLUTION OFTHE
• . SAN LUIS.OBISPO,
f - CITY COUNCIL I
' PRELIMINARILY
'DETERMINING THAT
PUBLIC INTEREST,
° CONVENIENCE, AND
NECESSITYREOUIRE
� THE CONSTRUCTION OF
° CURB, GUTTER, AND )i
n SIDEWALK ALONG THE I
• WESTERLY SIDE OF
SANTA BARBARA STREET,
„ BETWEEN CHURCH AND
• MORRO STREETS
• WHEREAS the City desires
hat its citizens have available
convenient and suitably local.
`'ed sidewalks, and
4 WHEREAS this block of
I :Santa Barbara Street is the
'only block along the westerly
ecide of Osos and Santa Barba -1I
j Aa Streets not having curb, f
j gutt er and sidewalk, and 1
r WHEREAS the Ciry Council
Bias determined that such an I
9nstallation meets General
Trogram .Criteria and Site
.Selection Priority Criteria for,
`such an installation.
p NOW THEREFORE :BE ITi
-RESOLVED
that the City;
'Council hereby:
- 1. Preliminarily determines
-That public interest, corve-
4tience, and necessity require .
the .construction of curb, gut-
-ter, and sidewalk across the
'entire frontage of this block.
n 2. City staff is directed to
rpublish notices and post the
'property for a protest hearing
10 be held at 7:00 p.m. on
-Tuesday, "September 18,
9990.
a On motion of Councilwom-
mn Rama, seconded by Coun-
�lman and on_tha
OLZOOP
I
m
K
d
CD
ro
C
`G
n
K
x
m
x
a
l�
Q.
rt
o.0n
.0
C
cr
n
rt
O
5
m
a
m
0
n
O
C
Z
m O
a �
m
a Z
o r
] C
a N
O
W
N
V�
rte.
L
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AFFIDAVIT OF PUBLICATION
No. _9234
STATE OF CALIFORNIA,
SS.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
SOLUTION
. OFINTENTION
interested in the above - entitled MATTER
RESOLUTION NO.6847
er
•`' A RESOLUTION OF THE
I am now, and at all times embraced
b . SAN LUIS OBISPO
CITY COUNCIL
PRELIMINARILY
'DETERMINING THAT
in the publication herein mentioned was, the principal clerk
m PUBLIC INTEREST, j
CONVENIENCE, AND I
NECESSrrY REQUIRE
1p
of the printers and publishers of the SAN LUIS OBISPO
THE CONSTRUCTION OF
Im CURB, GUTTER, AND 1
„ SIDEWALK ALONG THE 1
COUNTY TELEGRAM- TRIBUNE, a newspaper of general cir-
• WESTERLY SIDE OF
I• SANTA BARBARA STREET,
BETWEEN CHURCH AND
culation, printed and published daily, Sundays excepted, at
j'• MORRO STREETS
' WHEREAS the City desires
I hat its
the City of San Luis Obispo in the above named county and
citizens have available
! �convenient.and suitably locat- I�
' d sidewalks, and
WHEREAS
,a this block of
Santa Barbara Street is the
State; that NOTICE
'only block along westerly
de of to Barbs.
( "a Streets not having
curb,
j gutter and sidewalk, and
. WHEREAS the Clty Council
-has determined that such an I
9nstallation meets Generale
grogram Criteria and Site
I Selection Priority Criteria for,
of which the annexed clipping is a true printed copy, was
e uch an installation.
.Now THEREFORE. BE IT
I
published in the above -named newspaper and not in an
F PaP Y
RESOLVED that the City
I . ouncil hereby:
supplement thereof — on the following dates, to-wit:
. I. Preliminarily determines i
rthat public interest, cone.
nience, and necessity require l
;the construction of curb, gut-I
and
4er, and sidewalk across the
'entire ty ni this tys ff
— 825 -9./1
is directed to
rpublish notices and post the
'property for a protest hearing
10 be held at 7:00 p.m. on
/
�9ge0sday, September 18,
that said newspaper was duly and regularly ascertained and
, On motion of Councilwom-
established a newspaper of general circulation by Decree
ran Rappa, seconded by Coun-
dman Roalman and on the
entered in the Superior Court of San Luis Obispo County,
allowing roll call vote:
a AYES: Councilmembers
State of California, on June 9, 1952, under the provisions of
iaYOa•p n'nman, Pinard, and
Chapter 1, Division 7, Title 1 of the Government Code of the
f NOES: None
ABSENT: Councilman _
leiss
State of California.
-the foregoing Resolution was
passed and adopted this 7th
I certify (or declare) under penalty perjury that the fore -
4ay of August, 19go.
is /MAYOR RON DUNIN
going is true and COIIBCt.
A 1s TTEST
/PAMELA VOGES
iDEITY CLERK
\— ,_. _ . _. ..
'Aug.25_Sept.1,1990 M234
Date September-1_, 1990
tz
.4
m
ro
K
C]
m
x
m
it
Ico
c� C�
2.
a
a
Q
<,
�.
mo
c
cr
Q
rt
O
3
5
a
CD
0
0
O
Q z
o
� c
A N
O
W
N
rol
u
L�
RESOLUTION NO.. 6847 (1990 Series)
A RESOLUTION OF THE SAN LUIS OBISPO CITY COUNCIL
PRELIMINARILY DETERMINING THAT PUBLIC INTEREST,
CONVENIENCE, AND NECESSITY REQUIRE THE
CONSTRUCTION OF CURB, GUTTER, AND SIDEWALK ALONG
THE WESTERLY SIDE OF SANTA BARBARA STREET,
BETWEEN CHURCH AND MORRO STREETS
WHEREAS the City desires that its citizens have available
convenient and suitably located sidewalks, and
WHEREAS this block of Santa Barbara Street is the only block
along the westerly side of Osos and Santa Barbara Streets not
having curb, gutter and sidewalk, and
WHEREAS the City Council has determined that such an
installation meets General Program Criteria and Site Selection
Priority Criteria for such an installation.
NOW THEREFORE BE IT RESOLVED that the City Council hereby:
1. Preliminarily determines that public interest,
convenience, and necessity require the construction of curb,
gutter, and sidewalk across the entire frontage of this
block.
2. City staff is directed to publish notices and post the
property for a protest hearing to be held at 7:00 p.m. on
Tuesday, September 18, 1990.
R 6847
0 c
Resolution No. 6847 (1990 Series)
On motion of Councilwoman Rappa , seconded by
Councilman Roalman and on the following roll call vote:
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing Resolution was passed and adopted this 7th
day of August , 1990.
N DUNIN
ATTES
L4 AA
CITY dLERK PAMELA fyGES
Approved:
45i),�A,It5l
Public Works Director
cgsres /dfr #22
I
N
RESOLUTION NO. 6846 (1990 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING THE FINAL MAP FOR TRACT NO. 1846 LOCATED AT
2930 MCMILLAN AVENUE (TROY WEST, SUBDIVIDER)
WHEREAS, the City Council made certain findings concerning
Tract No. 1846 as contained in Resolution No. 6749 (1990 Series),
and
WHEREAS, all conditions required per said resolution have been
met, and
WHEREAS, the final map is in substantial compliance with the
approved tentative map.
NOW THEREFORE BE IT RESOLVED that the final map for Tract No.
1846 is hereby approved.
On motion of Councilwoman Rappa , seconded by Councilman Roalman
and on the following roll call vote:
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing resolution was passed and adopted this 7th day
of August , 1990.
'00'U000
IN
ATTEST: r f
V
CIT CLERK pAjb VOGES
R 6846
C
Resolution No. 6846 (1990 Series)
Page two
APPROVED:
City ineer
N: \mdocs \JRT1846F.wp
�i
a J
� J J
• O
RESOLUTION NO. 6844 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO AUTHORIZING ISSUANCE OF A GRADING PERMIT TO
ALLOW STOCKPILING ON A SITE LOCATED WITHIN THE SOUTHERN
PACIFIC RAILROAD RIGHT -OF -WAY ADJACENT TO THE SITE OF
THE FAIRVIEW STATION CONDOMINIUMS AT 2225 BUSHNELL
STREET
WHEREAS, the City Council received a request for a
stockpiling grading permit for property located within the
Southern Pacific Railroad right -of -way adjacent to the site of
the Fairview Station Condominiums at 2225 Bushnell Street; and
WHEREAS, the council has considered the reports of
staff, public testimony, and materials submitted by the
applicant; and
WHEREAS, the potential environmental impacts of the
project have been evaluated in accordance with the California
Environmental Quality Act and the city's Environmental Impact
Procedures and Guidelines.
NOW, THEREFORE, the council resolves to authorize
issuance of a grading permit as follows:
SECTION 1. Findings. This council finds:
1. The proposed grading operation will not adversely affect the
health, safety and welfare of persons residing or working on
the site or in the vicinity.
2. The proposed grading operation is consistent with the city's
grading ordinance.
3. The proposed grading operation is exempt from environmental
review.
SECTION 2. Conditions:
1. The early grading authorizing stockpiling located on a site
within the Southern Pacific Railroad right -of -way adjacent
to the site of the Fairview Station Condominiums at 2225
Bushnell Street shall be valid for a period of one year from
R 6844
o
Resolution No. 6844 (1990 Series)
Grading Permit
Page 2
the date of permit issuance from the Building Division. One
time extension of the permit, not to exceed a period of six
months, may be requested in writing prior to expiration of
the permit to the approval of the Community Development
Director. The applicant's written request needs to document
any extenuating circumstances that would warrant an
extension.
2. The applicants shall submit an application and appropriate
plans for a grading period as outlined in Section 15.44.16
of the Municipal Code (Grad:ing Ordinance). Stockpiling of
contaminated soils shall be completed as outlined in the
Earth Systems remedial work plan dated June 29, 1990.
3. The applicants shall deposit a cash surety guaranteeing
proper maintenance of stockpiles and restoration of the
property to its present condition as required by the
Community Development Department.
4. Consistent with Section 15.44.270, all graded surfaces shall
be wetted, protected or contained in such a manner as to
Prevent dust or spill upon any adjoining property or street.
The following measures shall constitute the Fairview
Station dust management plan and shall remain in effect
during all phases of that project's construction and during
the time that contaminated soils are stockpiled and treated
within the Southern Pacific Railroad right -of -way:
a. Regular wetting of roads and graded areas (at least
twice daily with complete coverage of all active
areas);
b. Increasing frequency of watering whenever winds exceed
15 mph;
C. Cessation ofgrading actvities during periods of high
winds over 25 mph;
d. Direct application of water on material being excavated
and /or transported onsite or offsite;
e. Watering material stockpiles; and
f. Periodic washdowns, or mechanical streetsweeping, of
Florence Avenue and Bushnell and Bishop Streets in the
vicinity of the construction site.
Resolution No. 6844 (1990 Series)
Grading Permit
Page 3
5. The applicants shall install wood slates in cyclone fencing
around stockpiles to the satisfaction of the Community
Development Department.
On motion of Councilwoman Rappa ,
seconded by Councilwoman Pinard , and on the
following roll call vote:
AYES: Councilmembers Rappa, Pinard,.and -Mayor Dunin
NOES: Councilman Roalman
ABSENT: Councilman Reiss
the foregoing resolution was passed and adopted this _.17th day
of. July , 1990.
'Mayor Ron Dunin
ATTEST: f
City qerk Pam o es
APPROVED:
ity Administrative Officer
Community Devel p ent Director
C,
It-
I i \
RESOLUTION NO. 6845 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING AMENDMENTS TO THE AGREEMENT BETWEEN THE CITY AND THE OWNERS
OF PROPERTY AT 647 HIGUERA STREET CONCERNING THE USE OF FOUR
APARTMENTS FOR BELOW MARKET RATE HOUSING.
WHEREAS, on November 22, 1988 the City entered into an
agreement with owners of property at 647 Higuera Street which
provided that the city would loan owner $60,000 in return for an
agreement to construct and rent four apartments to Section 8
eligible tenants as referred to owner by the Housing Authority; and
WHEREAS, new owners of the property at 647 Higuera Street wish
to rent the apartments to employees of. their near by commercial
establishment and seek relief from the provisions of the city /owner
housing agreement which require occupancy by Section 8 eligible
tenants; and
WHEREAS, the owners have proposed amendments to the city /owner
housing agreement which would meet the owners objectives and
continue to maintain housing for lower income people in the
downtown; and
WHEREAS, the owners suggested revisions have been reviewed
recommended for approval by the Housing Authority Board of
Commissioners.
NOW THEREFORE BE IT RESOLVED AS FELLOWS:
SECTION 1. The City Council hereby authorizes amending the
agreement dated November 22, 1988 between City and Crown
Properties. The amended agreement shall incorporate at least
the following provisions:
(1) Within 30 days of transfer of title of property from
Crown Properties to Mr. and Mrs. Terry Davies, the property
owner shall repay the $60,000 loan to the city. A 3% interest
payment shall also be made.
(2) The property owners shall be required to refer all
prospective tenants to the Housing Authority to be qualified
from an income standpoint. Tenants shall meet income criteria
of "Lower income" households (80% of the county median) as
defined by the U.S. Department of Housing and Urban
Development (HUD).
(3) The four apartments shall be rented at below market rates
-- at 80% of the "Fair Market Rates" published by HUD for
various sizes of apartments.
(4) The four apartments shall not be rented to the owner or
his immediate family.
I�
Resolution No. 6845 (1990 Series)
Page 2
(5) The housing would be restricted to occupancy by lower
income households for a period no less than 15 years --
beginning with the execution of the amended agreement.
(6) The Housing Authority shall conduct an annual program
audit (for a fee paid by the property owner) to ensure that
tenants have complied. with income screening and to verify
income status. The proposed amended agreement shall contain
enforcement provisions to ensure that all occupancy standards
are met.
(7) The property owner shall offer tenants one -year leases
for the apartments, after which the apartment may be rented
on a month -to -month basis.
SECTION 2. The City Administrative Officer is authorized to
negotiate final terms of the amended agreement consistent with
this resolution and execute the agreement. Agreement shall
be notarized and recorded.
On motion of Councilperson Councilmember Roalman, seconded by
Mayor Dunin, and on the following roll call vote:
AYES: Councilmembers Roalman, Dunin, Pinard
NOES: Councilmember Rappa
ABSENT: Councilmember Reiss
the foregoing Resolution was passed and adopted this 17th day of
July, 1990.
ayor Ron Dunin
ATT
CIT CLERK
Pam la Voges
APPROVED:
CITY AD INISTRATIVE OFFICER
unn
. /sf/
CO Y DEVELOPMENT
DIRECT
Arnold Jonas
RESOLUTION NO. 6843
(1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING AN AMENDMENT TO THE GENERAL PLAN MAP, FROM MEDIUM=
HIGH - DENSITY RESIDENTIAL TO RETAIL COMMERCIAL, FOR A PORTION
OF A LOT AT 1015 NIPOMO STREET
(GP /R 1455)
BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. That this council, after
consideration of public testimony, the .general plan amendment
request GP 1455, the Planning Commission's recommendation, the
Cultural Heritage
Committee's
recommendation,
staff
recommendations and
reports thereon,
makes the following
findings:
1. The proposed amendments will not adversely affect the
health, safety or welfare of persons living or working at
the site or in the vicinity.
2. The proposed amendments are appropriate at the proposed
location and will be compatible with surrounding land uses.
3. The proposed amendments conform to the general plan text
and meet zoning ordinance requirements.
4. The Community Development Director has determined that the
proposed general plan and zoning map amendments will not
have a significant effect on the environment and has
granted a negative declaration.
SECTION 2.
approved.
The general plan amendment GP 1455 is hereby
R 6843
Resolution no. 6843
GP 1455
1015 Nipomo Street
Page 2
(1990 Series)
On motion of Councilwoman Rappa
seconded by Councilman Roalman
call vote:
U
, and on the following roll
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing resolution was passed and adopted this 17th
of July , 1990.
V� 0
Mayor Ron Dunin
ATTEST:
Q, -, V
City C erk Pam vo t s
APPROVED:
ty A inistrative Officer
Community Devel�p*ent Director
day
J�
CF � • •
e
i�
RESOLUTION NO. 6842 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DENYING AN APPEAL FROM THE ACTION OF THE PLANNING COMMISSION
AND COMMUNITY DEVELOPMENT DIRECTOR'S INTERPRETATION THAT
FLOATING DOCKS ARE NOT ALLOWED FOR LAGUNA LAKE FRONT LOTS IN
TRACT 465
WHEREAS, the Community Development Director determined
that floating docks were not allowed within the drainage and
maintenance easement over the lake front lots of Laguna Lake; and
WHEREAS, the Planning Commission conducted a public
hearing on June 13, 1990, and determined that the director's
interpretation was correct and denied the application; and
WHEREAS, Jim Dummit (Applicant) has appealed that
interpretation and decision to the City Council; and
WHEREAS, the.council has considered the testimony and
statements of the applicant and other interested parties, and the
record of the Planning Commission hearing and action, and the
evaluation and recommendation of staff; and
WHEREAS, the council determines that the action of the
Planning Commission and the Community Development Director was
appropriate;
NOW, .THEREFORE, the council resolves to deny the appeal
and affirm the action of the Planning Commission and Community
Development Director, thereby denying the appeal subject to the
following findings:
SECTION 1. Findings:
1. The proposed dock would jeopardize the very sensitive
vegetation and wildlife in the area and may be a maintenance
and flood hazard.
R 6842
U
Resolution No. 6842
Page 2
(1990 Series)
2. That the proposed dock would be inconsistent with the
mitigation measures required by the Environmental Impact
Report for Tract 465.
On motion of Councilwoman Rappa ,
seconded by Councilman Roalman , and on the
following roll call vote:
AYES: Councilmembers Rjpa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
the foregoing resolution was passed and adopted this 17th day
of July , 1990.
n Dunin
ATTEST:
City C erk Pam vct s
APPROVED:
G�� � .: '
�N
RESOLUTION NO. 6841
(1990 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO
ACCEPTING CERTAIN PUBLIC IMPROVEMENTS FOR TRACT NO. 1360 (UNIT 1)
AT 4400 POINSETTIA STREET (EASTFORR, LTD., SUBDIVIDER)
WHEREAS, the City Council made certain findings concerning Tract
No. 1360 as contained in Resolution No. 6484 (1988 Series), and
WHEREAS, the City Council approved the final map per Resolution
No. 6590 (1989 Series) subject to an agreement and bonding to guarantee
installation of the required subdivision improvements, and
WHEREAS, all public improvements have been constructed to City
standards and specifications, except for certain improvements within E.
A. French Park,
NOW THEREFORE BE IT RESOLVED, that the public improvements for
Tract No. 1360 (Unit 1) are hereby accepted for maintenance, except for
the required improvements within E. A. French Park. The existing
Faithful Performance ($670,000) and Labor & Materials ($335,000) bonds
are hereby reduced as follows in accordance with the subdivision
agreement:
1. Faithful Performance - Park Improvement $28,000.00
2. Warranty - One year guarantee /accepted Improvements $64,200.00
3. Labor & Materials - Park Improvements $14,000.00
On motion of Councilwoman Rappa seconded by
Councilman Roalman and on the following roll call vote:
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None
ABSENT: Councilman Reiss
R 6841
Resolution No. 6841 (1990 Series)
Page Two.
the foregoing resolution was passed and adopted this 17th day of
July , 1990.
ATTEST: ;L ),
CITY L PAM V GE
APPROVED:
City A inistrative Officer
WAIJ/� ✓..' i
/ `, ��
Community Deve o p ent Director
N: \mdocs \T1360 -1.wp
ey � 0 o
N6Q �vU
RESOLUTION NO. 6840
a
(1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO APPROVING THE TRAFFIC WORK ORDERS
BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
The Traffic Work Orders for the period of April 1, 1990 through
June 30, 1990 are hereby approved.
On motion of Councilwoman Rappa , seconded by Councilman Roalman
and on the following roll call voter
AYES: Councilmembers Rappa, Roalman, Pinard, and Mayor Dunin
NOES: None,:-- _.. .
ABSENT: Councilman Reiss
the foregoing Resolution was passed and adopted this 17th day of
July , 1990.
YOR RCN DUNIN
ATTEST•
CITY C PAM VOGES
APPROVED:
bll /wrkord
by
R 6840
:��� o •
����H�►�fl��IIIII��p��IIIDI
city of San LUIS OBISp0
COUNCIL AGENDA REPORT
FROM:
David F. Romero, Public
Wayne A. Peterson, City
Prepared by: Barbara L,
SUBJECT:
Traffic Work Orders for
1990.
MEETI c oa
July i 1990
ITEM NUMBER:
Works Dire for
Engineer
finch, Engineering Assistant/Traffic4-
the Period of April 1, 1990 through June 30,
RECOMMENDATION:
Pass Resolution Approving Traffic Work Orders for the Period of
April 1, 1990 through June 30, 1990.
BACKGROUND:
The City Engineer has, over the past three month, issued work orders
making changes to improve safety and operation of the street system and
parking facilities. One -third of these were parking related changes
requested both by the public and staff. Another one -third were
requests for red curb. One - fourth were changes in signing, including
the installation of stop signs at Broad and Palm Streets as directed by
City Council. The remaining were changes in striping and signals.
It has been Council's policy in the past to accept this report on a
quarterly basis. This report satisfies this past policy.
FISCAL IMPACT:
Minor implementation costs associated with street maintenance.
RECOMMENDATION:
Pass resolution approving Traffic Work Orders for the period of April
1, 1990 through June 30, 1990.
Completed Traffic Work Orders
Available in the Council Office for Review
bll /wrkord
by
RESOLUTION NO. (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO APPROVING THE ATTACHED TRAFFIC WORK ORDERS
BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
The Traffic Work Orders for the period of April 1, 1990 through
June 30, 1990 are hereby approved.
On motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of
1990.
ATTEST:
CITY CLERK
APPROVED:
ity Administrative Officer
A
CitjV Engineer
MAYOR
bll /wrkord
bV
e -,2 -4z
� r-
RESOLUTION N0. 6839 (19'90 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO DENYING
AMENDMENTS TO THE HIGUERA COMMERCE SPECIFIC PLAN REGARDING MINIMUM
LOT AREA, CIRCULATION, AND FRONTAGE REQUIREMENTS, DENYING TENTATIVE
TRACT 1766, AND APPROVING AN AMENDMENT TO }THE HIGUERA COMMERCE PARR
SPECIFIC PLAN TO ALLOW ADDITIONAL LAND USES IN THE SPECIAL
INDUSTRIAL DISTRICT, AT 3897 SOUTH HIGUERA STREET AND 130 TANK FARM
ROAD.
BE IT RESOLVED by the Council of the City of San. Luis Obispo
as follows:
SECTION 1. ENVIRONMENTAL DETERMINATION. The Community
Development Director's decision on April 11, 1990 granting a
mitigated negative declaration is affirmed, with the inclusion of
required mitigation measure number 1 as listed in Exhibit "A ",
attached.
ji
SECTION 2. SPECIFIC PLAN AMENDMENT .1448. This council, after
consideration of public testimony, Specific Plan Amendment SP 1488
and supporting information, the Planning Commission's
recommendations, and staff recommendations and reports thereon,
takes the following actions:
A. The amendment request to reduce the minimum lot area from
four (4) acres to two (2) acres, reduce minimum frontage
requirements, and modify the circulation plan and
policies in the Higuera Commerce Park Specific Plan are
denied, based on the following finding:
1. The proposed amendments are inconsistent with the
intent of the Higuera Commerce. Park Specific Plan
to accommodate large- lot,•,research and development
and light manufacturing uses.
x
B. The amendment request to expand the range of allowed uses
in the Special Industrial District of the Higuera
Commerce Park is approved, with the additional uses as
recommended by staff in addition to those currently
allowed by the Higuera Commerce Park Specific Plan, as
listed below, and subject to the following findings:
R 6839
Findings
1. The proposed uses are consistent with the Higuera
Commerce Park Specific Plan and the General Plan;
and
2. The proposed uses are appropriate at the proposed
location and will be compatible with surrounding
land uses.
Allowed Uses:
- advertising, public relations
- broadcast studios
- computer services
- credit reporting and collection
- delivery, mailing, and postal services
- detective and security services
- laboratories (medical, analytical)
- offices (architects, engineers, industrial design)
Add to conditionally allowed uses:
Large office buildings including multiple tenants but
with no single tenant space less than 2500 square feet,
but excluding banks or other financial institutions,
medical offices and clinics, !government agency offices
and attorney's offices.
SECTION 3. TENTATIVE TRACT 1766. This Council, after
consideration of public testimony, Tentative Tract Map 1766 and
supporting information, the Planning Commission's recommendation,
and the staff's recommendation and report thereon, hereby denies
Tentative Tract 1766 based on the following finding:
1. The design of the subdivision is not consistent with goals,
policies, and development standards in the Higuera Commerce
Park Specific Plan.
r
On motion of Mayor Dunin " seconded.by
Councilman Reiss'..,. , and on the following
roll call vote:
AYES: Mayor Dunin, Councilmembers Reiss; and Rappa-
NOES: -- Councilman Roalman
ABSENT: Councilwoman Pinard
the foregoing resolution was passed and adopted this 10th
day of
July 1 1990.
t
Mayor
A
Pam Voges, City Cler®
APPROVED:
jh /D /higcom2.wp
z
W
111
J
(RlunoO) _t� Y° 301Aa3S 1`tl10213WWO'J
�• _ n. ,/ • .a te •/ • COAO j ~ C
COO
uj
I t m
_ -4 —� 1 rtur �y • 4- �LQ J-
-
-•.1. >\'!�.°� ~i �' i __ .-a .( ��'" %� /`."_ `V le� �QC III. 1� r.
t
l�li m
,L,
�'• � ��� .,•_, �� `° ='=�'_ �- -�- -sue -. - II,
f
_ �
CC
W It Z4
, „.}' 'l
(n i
I
OF•IFaN
N G N
m�¢d
U
t
iti-
oc�1 oa
<az
Z o
�
>H
W af•m
..
�O
NtigL~.�0
N
LU w
�Um
JJ]
W 0W•+
1-]J
�< m
W
(�
(0
Q j1NU
tid
L%M
N
O m
WM
�
ZwOhO
qq
U) N
1•, 10�J2
v1—i J
I
wu
w
4,q
HJra IO
am 1-U
Qa` m
p
ul
mQ m w
It o ti NO
QWm m
W
ao�
.mm
en
(7WOU'0j
¢�n n
•Z+2 JN NU
zm-•
L1,Jmo
3
a,
maomJO
Um °-
O
mmi
(RlunoO) _t� Y° 301Aa3S 1`tl10213WWO'J
�• _ n. ,/ • .a te •/ • COAO j ~ C
COO
uj
I t m
_ -4 —� 1 rtur �y • 4- �LQ J-
-
-•.1. >\'!�.°� ~i �' i __ .-a .( ��'" %� /`."_ `V le� �QC III. 1� r.
t
l�li m
,L,
�'• � ��� .,•_, �� `° ='=�'_ �- -�- -sue -. - II,
�s
_ �
CC
, „.}' 'l
(n i
I
LU
Ul
iti-
�
ol
Z3
vk�
V/4W A�r
ti
RESOLUTION NO. 6838 (SERIES 1990)
A RESOLUTION OF COUNCIL OF THE
CITY OF SAN LUIS OBISPO AMENDING WATER SERVICE RATES
WHEREAS, a comprehensive review of water system operating and
capital needs has been performed and reviewed by the City Council;
and
WHEREAS, based on this review the Council has determined that
there is a need for additional revenues to fully recover the water
system's operating and capital costs; and
WHEREAS, it is the City's policy that water rates and charges
fully recover the operating and capital costs of the water system.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of
San Luis Obispo as follows:
SECTION 1. Chapter 4.20.060 of the Municipal Code (Rates for
service per bi- monthly billing cycle) is hereby amended as set
forth in Exhibit A attached hereto.
SECTION 2. The rates set forth in Exhibit A shall be
effective August 1, 1990.
SECTION 3. All other provisions of Chapter 4.20 remain in
full force and effect.
R 6838
RESOLUTION ,NO: 6838 (Series 1990)
Page 2.
On motion of Councilwoman Rappa seconded by
Councilman Roalman and on the following roll call.vote:
AYES:
Councilmembers Rappa, Roalman, and Reiss
NOES' Mayor Dunn
ABSENT: Councilwoman Pinard
the forecroincr Resolution was adopted the 10th day of -.-4-ujY . 1-990.
llr_�o
,r—Mayor Ron Dunin
C ric -ye!
y rk am V
APPROVED:
'-City i is rative FOf icer
City Attorney
Director of Finance
EXH/B/T A
Rates for Water Service Per Bimonthly Billing Cycle
Rates for water service per bimonthly billing cycle consist of readiness to
serve and conmodity charges as follows:
A. Readiness to Serve Charges
Bimonthly Minimum Charge
Meter Size Inside City Outside City
5/8 x 3/4 inch
3/4 inch
1 inch
1 1/4 inch
1 1/2 inch
2 inch
3 inch
4 inch
6 inch
8 inch
10 inch
Greater than 10 inches
B. Commodity Charge
$11.80
$23.60
17.70
35.40
29.50
59.00
47.20
94.40
71.00
142.00
118.00
236.00
212.00
424.00
375.90
751.80
568.30
1,136.60
896.20
1,792.40
1,136.60
2,273.20
To be determined by the Director of
Finance
In addition to the bimonthly readiness to serve charge, commodity charges per
hundred cubic feet of water (ccf) used per dwelling unit for accounts
classified as residential by the Director of Finance, and per account for all
all other users, are as follows:
Water
0 to 10 ccf
e City Outside City
$1.20 $2.40
In excess of 10 ccf thereafter $2.40 $4.80
WATER RATE INCREASE FACT SHEET
a Why is a rate increase necessary?
f�.t�1�3C�1fT�� +f1 L- -
Bringing dependable, quality water to our customers costs more now than in the past.
For example, developing groundwater resources to bring water to our community
now will cost $3.6 million, and pumping this water and delivering it will cost $500,000
annually. Our existing rates simply don't generate this level of funding.
o But aren't revenues down because of conservation?
Yes, by about $700,000 annually. However, if this was our only financial need, we
could address it through existing resources, and a rate increase would not be
necessary. But the cost of constructing and operating new facilities to bring
additional water to the community is far greater than existing resources, and
additional money is needed to fund these projects.
a Why can't we use other revenues?
The City has a long - standing policy - and a wise one - of running the water operation
on a business -like basis, with revenues fully recovering costs. Under this policy, all
water revenues are used only for water purposes.
The City does not use its "General Fund" revenues such as sales and property tax
revenues for water because these revenues are needed for essential municipal
services that have no other source of funding. For example, 1990 -91 General Fund
operating expenditures are projected to be approximately $18.6 million, and will be
used in the following ways:
Police & Fire
46%
Parks & recreation
18
Planning & engineering
14
Street maintenance
8
Administrative services
(City Administrator, City Attorney,
City Clerk, Finance, Personnel,
Building Maintenance, Insurance)
14
100%
o Doesn't this mean we're paying more for less?
It's easy to understand why our customers would believe this. But unfortunately, it
simply costs more to produce and deliver the water we're providing today.
Until very recently, the City relied solely on local reservoirs as its source of water.
The Salinas Reservoir, the City's primary source of water, was donated to the
community at no cost by the Federal Government in the 1940's. The Whale Rock
WATER RATE INCREASE FACT SHEET (continued)
Reservoir was constructed in the late 1950's, at 1950 construction costs and 1950
interest rates. Unfortunately, new water supplies in the 1990's will have to be paid
and operated at 1990 prices, and this will require new revenues to finance them.
■ How much more will this cost me?
Obviously, the cost will depend on how much water you use. But our "average"
residential customer will pay about $4.00 more per month - or about 13 cents more
per day. Your total monthly cost for water will be about $19.00 - or 63 cents per day
for 200 gallons of water delivered directly to your tap, a cost of 1/3 cent per gallon.
M How does this compare with other utilities?
The following are average ranges for monthly costs for other utility services:
Phone
$20 -$75
Cable television
$20 -$40
Gas
$25 -$70
Electric
$25 -$70
Water
$15 -$25
M What are we doing to get more water?
The City has already brought on - right now, today - 2,000 acre feet per year of new
groundwater sources. And plans are underway to increase this to a minimum of
3,000 acre feet by the end of 1990. This represents an increase of 399'o from our
prior safe annual yield from reservoir supplies of 7800 acre feet. Further study is
required to determine how long we can pump groundwater at this rate, but we are
confident that adequate groundwater reserves are available through the drought.
Longer term, the City is evaluating a number of water supply options, including
expanding the capacity of the Salinas Reservoir, increasing the run -off into the Whale
Rock Reservoir, desalinization (use of sea water), use of water from the Naciemento
Reservoir, and state water.
■ Will water rates come down after the drought is over?
Building and operating the facilities necessary to bring dependable, quality water to
our community will require new, ongoing financial commitments. Realistically, these
necessary investments will only be more expensive in the future. Although, this new
rate increase will give us a good basis for the future, we can anticipate at least
modest increases over time to continue this commitment.
WATER /INCFACTS.WPF
� ��, �.
Q� - 1 P
P�
��
RESOLUTION NO. 6837
(1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DEFERRING LANDSCAPE PLANTING DURING MANDATORY WATER CONSERVATION
RESCINDING RESOLUTION NO. 6610 (1989 SERIES)
WHEREAS, the City of San Luis Obispo has experienced four
consecutive years of lower than normal rainfall which has
resulted in lower than normal reservoir levels; and
WHEREAS, the City Council has adopted Water Allocation
Regulations and a Mandatory Water Conservation Program; and
WHEREAS, the City Council acknowledges that water is a
limited resource and desires to improve the effectiveness of
water use and avoid nonessential uses of water; and
WHEREAS, the City Council recognizes the deferral of all new
landscape planting as a means to reduce over-all water use in the
City.
NOW, THEREFORE, BE IT RESOLVED, the City Council of the City
of San Luis Obispo resolves as follows:
1. During mandatory water conservation, there will and shall be
a deferral of all new landscape planting which requires
potable city water for irrigation in city parks or on the
grounds of city buildings.
2. New planting, while mandatory water conservation is in
effect, shall not be a basis for increasing the target water
use levels for a customer.
3. Planting required as a condition of a building permit,
architectural review, use permit, subdivision, or planned
development approval to be irrigated with potable city
water, will and shall be deferred during mandatory water
conservation. The City Engineer or the Community
Development Director will approve such deferrals. There
should be an appropriate guarantee, as outlined in the
Policy on Construction Security Deposits Document, that the
planting will be completed within 90 days of the end of
mandatory conservation or other appropriate time as
determined by the City Engineer or the Community Development
Director.
Councilwoman Councilman
Upon motion of xappa seconded by Reiss = and
on the following roll call vote:
AYES: Councilmembers_Rappa, Reiss, Pinard, Roalman, and Mayor Dunin
NOES: None
ABSENT: None
R 6837
r.
r
Resolution No. 6837 (1990 Series)
The foregoing resolution was passed and adopted this 3rd day of
July , 1990.
r-ItKYOR RON DANIN
ATTEST• I /
C�o� V
PAM VO ES, CITY CMERK
APPROVED:
CITY AD NISTRATIVE OFFICER
vy
0
e.
RESOLUTION NO. 6836 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
ADOPTING APPROPRIATIONS FOR THE 1990 -91 FISCAL YEAR
WHEREAS, the City Council adopted the 1989 -91 Financial Plan
on July 24, 1989 which established comprehensive financial and
policy guidelines for the 1989 -90 and 1990 -91 Fiscal Years; and
WHEREAS, the 1989 -91 Financial Plan included appropriation
estimates for Fiscal Year 1990 -91; and
WHEREAS, the City Council has reviewed proposed changes to the
1989 -91 Financial Plan to be effective for Fiscal Year 1990 -91
after scheduled public budget study sessions and hearings held
between March 5, 1990 and July 3, 1990; and
WHEREAS, the City Administrative Officer has submitted the
1989 -91 Financial Plan Supplement and Preliminary 1990 -91 Budget
to the Council for their review and consideration.
NOW, THEREFORE, be it resolved by the Council of the City of
San Luis Obispo that the Operating, Debt Service, and Capital
Budget for the Fiscal Year beginning July 1, 1990 and ending June
30, 1990 is hereby adopted as follows:
RWIA
Operating
Debt Service
Capital
Public Safety
$8,784,300
-0-
$ 855,600
Public Utility
51876,200
$ 679,700
5,425,000
Transportation
2,542,600
11402,000
21745,000
Leisure, Cultural, and
Social Services
3,3381200
69,000
559,000
Community Development
21794,500
-0-
30,000
General Government
4,334,900
-0-
358.000
TOTAL
27,670,700
$21150,700
$9,972,600
RWIA
C,
Resolution No. 6836
Page 2
(1990 Series)
0
Councilwoman Councilwoman
On motion of Pinard seconded by Rappa ,
and on the following roll call vote:
AYES: Councilmembers Pinard, Rappa, Reiss, and Roalman
NOES: Mayor Dunin
ABSENT: None
the foregoing Resolution was passed and adopted this 3rd day of
July , 1990.
Mayor Ron Dunin
ATTEST:
Qv-w, V
City C erk Pam ALYes
APPROVED:
Cit Administ ative Officer
LJi.0J11A It A.Iq nr�24jjjg22 .') (&4
Cit Attorney 1 1 /
Director of Finance
1�2F
RESOLUTION NO. 6835
(1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DENYING AN APPEAL OF THE PLANNING COMMISSION'S ACTION
TO DENY A REQUEST TO ALLOW A
STREET YARD REDUCTION FROM 20 FEET TO 14.5 FEET
FOR A CARPORT AT 132 DEL NORTE WAY
.BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. That this council, after
consideration of public testimony, the applicants' request A 40-
90, the appellants' statements, the Planning Commission's action,
staff recommendations and reports thereon, makes the following
findings:
1. The exception will set a precedent for the neighborhood
since other structures in the vicinity conform with
.required street yard setback standards.
2. The exception is not necessary for the applicant's full
enjoyment and use of his /her property.
3. The exception is not appropriate at the proposed location
and will not be compatible with surrounding development.
SECTION 2. The request for approval of an administrative
use permit to allow a reduced street yard setback from 20 feet to
14.5 feet is hereby denied.
On motion of Councilman Roalman
seconded by Councilwoman Pinard and. on the following roll
call vote:
AYES: Councilmembers Roalman, Pinard, 11teisa,% ;and Mayor Dunin
NOES: Councilwoman Rappa
ABSENT: None
City Council Resolution No. 6835
Page 2
0
the foregoing resolution was passed and adopted this 3rd day
of July , 1990.
Mayor Ron Dunin'
ATTEST:
Q-� U, AAN
City C erk Pam V es
APPROVED:
City ministrative Officer
. ( •`A
Community Devel ment Director
� � (1 n
C. l
w • •
,J
RESOLUTION NO ( 6834 ) 1990 SERIES
A RESOLUTION OF THE COUNCIL OF THE CITY OF
SAN LUIS OBISPO APPROVING A
REVISED PARKING MANAGEMENT PLAN
AND RESCINDING RESOLUTIONS NO. 4949 AND 6346 IN CONFLICT
WHEREAS, the City Council adopted a parking management.plan for
the City of San Luis Obispo in 1987; and
WHEREAS, the city wishes to continue to maintain the vitality of
downtown as a retail center by providing easy access for
customers and protecting surrounding neighborhoods; and
WHEREAS, many elements of the 1987 plan have been completed; and
WHEREAS, a revised plan to continue to manage parking in and
around downtown, to protect residential zones, and generate
revenues to support the parking program has been approved by
committee;
NOW THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF S_AN
LUIS OBISPO AS FOLLOWS:
SECTION 1. The updated Parking Mangement Plan hereto marked
Exhibit A and incorporated herein.by reference, is hereby
approved. This plan continues to include policies, goals, action
plans, and implementation schedules that will guide management of
Parking in and around downtown.
SECTION 2. The, polices will be incorporated into the General
Plan and Land Use Element and Circulation Elements whensrevised.
Any policy of the Management Plan which is in conflict with the
new General Plan will be revised to be consistent with the goals
of the adopted General Plan.
SECTION 3. Copies of this resolution and the revised parking
management plan will be made available to the Departments of
Public Works, Community Development, and Finance.
R 6834
Resolution No. 6834 (1990 Series)
Page Two
On motion of seconded
Councilwoman Rappa by Councilman Reiss
,
and on the following roll call vote:
AYES: Councilmembers Rappa, Reiss and Mayor Dunin
NOES: Councilmembers Pinard and Roalman
ABSENT: None
the foregoing resolution was passed and adopted this 3rd
day of July , 1990
or Ron Dunin
ATTEST:
U.A00LI
City C erk P0 Voges
Director of lic Works
FindhqC Director
7 - •
J�
MI
INTRODUCTION
The Parking Management Plan is intended to maintain downtown as a viable
economic /community center by providing easy access to stores and offices. The plan
also is aimed at protecting the character of the downtown and surrounding office and
residential areas. It consists of several components which not only regulate where
people park and for how long, but also provide a financial base to improve and maintain
parking operations downtown and to make debt payments for the financing of additional
parking structures.
Background
Between 1977 and 1987, several parking studies were prepared to assess the parking
situation in downtown San Luis Obispo. Among them are the Downtown Traffic
Circulation and Parking Studies (Wilbur Smith 1977), the Downtown Parking Program
and EIR (Earthmetrics 1981), and the Downtown Parking Study (IBI Group 1986).
Each of these studies concluded that there is a parking. deficiency downtown which is
increasing and presently totals about 724 parking spaces.
Several reasons were cited for the cause of the problem. For one, downtown property
has been more intensely developed during the last ten years, both by the private and
public sectors. Meanwhile, little new parking has been provided. Much of the available
curbside parking is taken early in the day by employees and few spaces are left for
customers._ Existing long -term parking is in nearby office and residential .zones which
are being adversely impacted by the overflow parking from downtown; residents are
unable to find spaces for themselves and their guests and offices have limited parking
for clients.
The studies recommended additional parking spaces be provided and suggested
structures as the most efficient use of available land. To pay for the structures, possible
funding mechanisms were identified. A parking management plan to accompany the
construction also was recommended to help make sure the structures would be used by
long -term parkers, thus freeing the more convenient spaces for shoppers.
Acting upon these recommendations, the City issued bonds to finance construction of
two parking structures. One structure was constructed at the comer of Palm and Morro
Streets and began operation in March, 1988. Construction is underway on a second
structure. and is scheduled for completion September, 1990. This Parking Management
Plan will be used to guide where people will park, to the overall benefit of downtown,
and will also generate revenues needed to support a. comprehensive and effective
parking program.
Parking Goals, Policies, and Action Plan
The two primary goals of the Parking Management Plan are:
1. To maintain downtown as a viable economic /community center -, and
2. To protect the character of downtown and surrounding office and residential
zones.
F� "A"
Zia
Parking Management Plan
Page 2
As the actions listed below are taken, the plan will ensure that long -term parkers use
the new structures and that curbside spaces are available for customers and shorter -
term parkers. This will be done by offering lower rates in the parking structures,
increasing the cost of metered parking and fines for overtime parking, and altering the
time limits in various areas of downtown. It is expected that people's habits will begin
to change to the benefit of the overall parking situation in and around downtown: It
also provides the means for generating revenues necessary to maintain parking- related
operations and for acquisition of property for future parking.
The following policies and actions are aimed at implementing the goals of the Parking
Management Plan.
Employee Parking Programs
POLICIES:
* Programs should continue to be established by employers to encourage employees
of downtown businesses and government offices to use the parking structures as well
as to use transportation other than the automobile.
* . At present and future parking structures, free parking shall be provided for
carpools of three or more:
* City will continue to offer free bus passes to those City employees who relinquish
their City parking permits.
ACTIONS:
* The program for encouraging alternative means for transportation, including an
incentive program for City and County employees, will continue. Increase in transit
ridership will be the primary focus of -the program. This will be accomplished by
offering increased subsidies and improving the transit system, as well as improved
marketing techniques. It will also continue to promote the subsidy program to
reduce the number of trips by single - occupant automobiles. Other employers
(County, Downtown Merchants) will be encouraged to initiate subsidy programs for
their employees. When funds are available, new and replacement buses will be
purchased to increase existing routes and reduce current headways. Additional sales
outlets for transit passes will be established. Expanded usage of local media
(newspaper, radio, TV) will be implemented as funds become available.
* Other modes of alternative transportation, such as carpools and bicycles, will also
be encouraged.
* Long -term parking on the streets will be discouraged by extending two -hour
parking meters into peripheral commercial areas of downtown, providing ongoing
monitoring of usage of short-term (30 min.) spaces in the core area, by offering lower
rates in the structures than on the streets,, and by increasing fines for overtime
violations.
TIMELINE:
* Ongoing.
Parking Management Plan
Page 3
Enforcement of Parking Violations
POLICY-
* The intent and letter of parking laws will be strictly enforced, to discourage abuse
of overtime parking, encourage payment to meters, and direct long -term parkers to
long -term parking spaces.
AC_ TION
' Parking Enforcement Officers shall strictly enforce the existing provisions of
Municipal Code, particularly for overtime violations and misuse of loading zones.
TIMELINE:
' Ongoing.
Existing Parking Utilization
POLICIES:
• Maximize use of all parking structures and surface lots.
• Curbside parking spaces shall be made available to short -term parkers and long-
term parking should be encouraged .in parking structures.
• Meters shall not be installed or time limits posted unless at least 75% of the
frontage property is non - residential for each block unless requested by the residents
or businesses on the block =- at which time, staff would initiate a feasibility study.
s Placement of 30- minute meters shall be reviewed semi - annually by the Parking
Management Committee. None shall be placed in the middle of the block in the
central business district unless requested by frontage businesses.
Commercial delivery in the core area shall be managed with a goal of restricting
hours of commercial delivery, restricting oversized vehicles, and making other use of
commercial spaces when there is not a pressing need for commercial delivery.
ACTIONS:
" Layout and use of existing parking lots and structures will be reviewed periodically
and changes made as needed to maximize use and improve circulation.
s Availability of curbside spaces will be encouraged by offering lower rates in the
parking structures and increasing fines for violations of overtime parking..
• Increase publicity for under - utilized lots and long -term meters.
• Establish a special parking permit for use at 10 -hour parking meters.
• Research restricted hours for commercial deliveries as well as oversized delivery
vehicles in the core area. Continue to monitor usage of existing commercial loading
zones and convert to short-term parking whenever possible.
TIMELINE:
" Increases in parking meter rates will be effective every five years until the year
2003. However, the cash flow for the Parking Program should be reviewed every two
years to see if rates should be increased prior to the scheduled 5 -year intervals (1993,
1998, 2003) set forth in the Municipal Code.
,J
Parking Management Plan
Page 4
* Citation increases shall be reviewed every two years and adjusted as necessary
from date of the last increase, February, 1988 (next review will be started March,
1990, and be effective October, 1990).
* Time limits of meters on the streets, as shown on the attached Downtown Parking
Map, will be implemented if they meet the established 75% non - residential policy.
Existing long -term meters on Pacific and Pismo and side streets in the vicinity of the
Marsh Street Parking Structure shall be maintained until garage opens. Time limits
will be reassessed to determine the optimum mix of long and short-term meters.
Expansion of meters will be ongoing.
* Parking rates in the structures will become effective upon the opening of the
structures.
* All actions for commercial zones are expected to be carried out by January, 1991,
with an ongoing monitoring of commercial deliveries and loading zone usage.
Financing.
POLICY:
* The Parking Program will be self - supporting and funding sources will be
developed for maintaining and expanding parking operations and to repay bonds
which were issued for financing of the structures.
ACTIONS:
* Increases in parking meter rates and citation rates along with establishment of
new parking structure fees. Continue in -lieu fee program and establish supplemental
fee program from downtown businesses which will provide the funding necessary to
support an effective parking program.
• All of the parking fine monies will be deposited in the Parking Fund.
• Increases in meter rates will occur automatically every five years and should be
reviewed every two years for cash -flow balance. A variable rate system should also
be considered.
• Parking structure rates and citation rates also should be adjusted periodically.
• Investigate the feasibility of eliminating parking meters and establishing a parking
assessment district to finance the Parking Program.
TIMELINE:
* All actions are expected to be carried out. by January, 1991.
Juror Parking
POLICIES:
• Free juror parking shall be provided in the Palm Street Parking Structure.
• No free juror parking will be allowed in metered spaces on the street unless they
have an over -sized vehicle and /or the parking structure is full.
* Free parking by jurors will not be allowed after their jury duty expires. Violators
will be cited.
O v
Parking Management Plan
Page 5
ACTION:
* Staff will work with Jury Commissioner to inform prospective jurors of city parking
policies and to enforce juror parking. Staff will monitor overflow issue and inform
Jury Commissioner if the problem becomes routine.
T MEUNE:
* Ongoing.
Parking Structures
POLICIES:
* Additional parking should be provided downtown for shoppers, tourists, employees
and visitors to government and private offices.
* Parking structures will be provided to best utilize available land while providing
additional parking.
* New sites for providing future additional parking .should be considered by the City
Council as the need arises and /or as land becomes available.
* Whenever possible, land .should be purchased to preserve the option of developing
such properties at a later date and used for surface parking in the meantime.
ACTIONS:
* A second structure is planned on the comer of Chorro and Marsh Streets and is
expected to be open by summer, 1990.
* City staff will investigate the possibilities for providing additional parking in
impacted areas by meeting with property owners, acquiring information about
property values, and reviewing land use impacts and issues with the Planning
Commission.
* During 1990, staff shall conduct studies and present to the council a report
regarding siting of a new parking facility.
* City staff will investigate the possibility of operating all present and future parking
structures by a private management company.
TIMELINE:
• Structure expected to open as noted..
• Purchase of land will occur upon Council direction.
Public Awareness
POLICY:
* The general public should be made aware of the Parking Management Plan and
its benefits to the downtown.
ACTIONS:
* Features of the Management Plan will be publicized through local media before
events occur.
Parking Management Plan
Page 6
Promotions, such as grand openings for the structures, also can announce the
anticipated changes. Newsletters from the BIA, City, and County should also be
utilized.
* Special emphasis will be given to the positive features of the plan and the reasons
why changes are expected to occur.
* Expand usage of the media to inform users of where and what type of parking is
available.
TIMELINE:,
* Ongoing.
Public Participation in Implementation and Review of Plan
POLICY:
* City staff will maintain a cooperative relationship with private and public sector
employers and employees as well as City advisory body committees.
AC_ TION:
* Staff will continue to work with the City s Parking Management Committee as
.long as it exists and thereafter with the Business Improvement Association, Chamber
of Commerce and County staff to review and make recommendations for possible
changes to the Parking Management Plan.
TIMELINE:
*' Ongoing.
Residential Parking Districts
POLICY.
* Special Parking Districts should be established as necessary, when initiated by
residents, in residential areas which are congested with vehicles parked by persons
not residing in the area, to control parking to preserve the quality of life of area
residents.
ACTION:
* After implementation of changes to meters on the streets, parking patterns and
habits should be examined to deterinine if parking districts are needed in
surrounding residential areas. Their establishment can be initiated by local residents
by simple majority request (pet household) per block.
TIMELINE:
* Ongoing as need arises from residents.
Parking Management Plan
Page 7
Scope of Management Plan
POLICY:
The Parking Management Plan is intended to be a management plan for the
entire city.
ACTION:
s The Management Plan shall be.revised and expanded to incorporate new goals for
areas beyond the immediate downtown.
TIMELINE:
As appropriate.
Support of Parking Program by Merchants and Businesses
POLICY:
* The City will seek financial support of a parking program from merchants and
business owners.
ACTIONS:
. A parking in -lieu fee program will be continued to ensure financial support from
some members of the community.
A supplemental revenue program involving all members of the business
community will be developed by the Business Improvement Association and City staff
and presented to the City Council for review and incorporation into the Management
Plan.
TIMELINE:
• The Parking In -Lieu Fee Program should be reviewed by July 1, 1990, to reflect
current construction costs.
s A supplemental fee program will be submitted for City Council consideration
upon completion of the business license tax restructure or no later than July 1, 1991,
Tourist /Shoppers Promotions
POLICY:
' Tourists and shoppers should be encouraged to visit retail shopping areas.
ACTIONS:
' Most convenient curbside space will be made available by adding more metered
spaces, by developing incentive programs for employees to park in the structures and
surface lots and use alternative means of transportation, land by installing signs
downtown which direct visitors to available parking.
s Evaluate the success of the SLO Trolley in relation to increased usage of long-
term peripheral parking.
Parking Management Plan
Page 8
TIMELINE:
• More metered spaces will be added in 1990.
• Alternative transportation and incentive programs will be ongoing:.
• A signing program will be developed and put in place prior to completion of the
Marsh Street Parldng Structure in ,summer, 19906
s The downtown shuttles will be evaluated by the end of 1990.
Relationship to General Plan
The goals and policies of the parldng Management Plan are compatible with those
established by the. current Land Use and Circulation. Elements. Some of these policies
are so stated in the City's "Goals for Downtown." Those documents are in the process
of being updated and the "Goals" incorporated into the Elements of the General Plan.
As they are revised; the Parldng Management Plan, its goals; policies; and /or references
to them will be included in the General Plan Elenents for review by the Planning
Commission and adoption by the City Council. These reviews are anticipated by late
1990.
DRAFr2.WP
loy
ev
i�D
RESOLUTION NO. 6833 (1989 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING A GRADING EXCEPTION TO ALLOW CONSTRUCTION OF A HOUSE AT
220 TWIN RIDGE DRIVE.
BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. That this council, after consideration of public
testimony, the applicant's plans and supporting information, the
Community Development Director's action,staff recommendations and
reports thereon, hereby approves a grading exception to allow 63
percent of the lot at 220 Twin Ridge Drive to be disturbed by
grading when a maximum of 20 percent would normally be allowed by
the Grading Ordinance (Chapter 15.44, SLO Municipal Code), subject
to the following findings and conditions:
A. Findings:
1. Granting of the exception does not constitute a grant of
special privilege inconsistent with the limitation upon
other properties in the same vicinity, since the amount
of grading is consistent with that required for the
development of other lots in the vicinity;
2. Due to the site's topography and the prevailing
neighborhood character, there are special circumstances
applicable to this property, and that a strict literal
application of the grading limitations would deprive the
property of privileges enjoyed by other properties in the
vicinity;
3. The exception is in conformity with purposes of the
Grading Ordinance in that the exception will:
A. Encourage the planning, design and development of
building sites in such a fashion as to provide the
maximum in safety and human enjoyment while adapting
development to, and taking advantage of the best use
of the natural terrain; and
B. Encourage imaginative and innovative building
techniques to create development suited to natural
surroundings.
R 6833
c� o
B. Conditions:
A. The applicant shall revise plans so that.retaining
wall heights in the area between the house and Twin
Ridge Drive do not exceed six feet, to the approval
of the Community Development. Director.
B. Landscape planting shall be provided to screen and
visually enhance retaining walls, and to provide
erosion control, to the approval of the Community
Development Director, consistent with the City's
Landscape Standards for Water Conservation.
On motion of Councilwoman Rappa , seconded by
Councilman Reiss , and on the following roll call
vote:
AYES: Councilmembers Rappa, Reiss, Pinard, and Mayor Dunin
NOES: Councilman Roalman
ABSENT: None
the foregoing resolution was passed and adopted this 3rd
day of July , 1989.
Ron Dunin
ATTEST
City Cldkrk Pam Vogefl-
Cl)
APPROVED:
jh /d /gradex.wp
��v
�t'
��� ��
��
RESOLUTION NO. 6832
:3
(19,90 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORI ZING INSTALLATION OF TEMPORARY SIGNAGE FOR THE EMBASSY
SUITES HOTEL AT 333 MADONNA ROAD.
WHEREAS, the City has installed a water filtration facility
on privately -owned property adjacent to California State Highway
101 and the Embassy Suites Hotel, located at 333 Madonna road; and
WHEREAS, the facility is temporarily needed to meet an urgent
and immediate need to supplement City water sources during the
current drought conditions; and
WHEREAS, as a result of installing the tanks, the visibility
of an illuminated advertising sign owned and maintained by Embassy
Suites Hotel has been obstructed for motorists traveling northbound
on State Highway 101; and
WHEREAS, the sign owners have objected to the visual blockage
of their sign and have requested that the City take action to
correct the situation by removing the blockage or providing
alternative signage; and
WHEREAS, it is the City's intent to provide alternative
signage for Embassy Suites Hotel while the filtration facility
remains in its present location;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of
San Luis Obispo as follows:
SECTION 1. INSTALLATION OF TEMPORARY SIGNAGE. That this
council, after consideration of public testimony and staff
recommendations and reports thereon, hereby directs the Public
Works Director to proceed with installation of signage
as described under "Alternative i" of the 'Council report dated July
31 1990 and prepared by Community Development Department staff.
The sign shall be removed when the filtration tanks are removed,
or on May 2, 1992, whichever comes first.
R 6832
1. __
Resolution No. 6832 (1990 Series)
Page 2
SECTION 2. AUTHORIZATION TO AWARD CONTRACT. The City's
Administrative Officer is hereby authorized to award the contract
to install the sign if the lowest responsible bid is within staff's
preliminary cost estimate for the project.
SECTION 3. FUNDING. The Finance Director is hereby directed
to allocate up to $5,000 from the Groundwater Well Development
Account to fund project design and construction.
On motion of Councilwoman Rappa , seconded by
Councilwoman Pinard , and on the following roll call
vote:
AYES: Councilmembers Rappa, Pinard, Reiss, and Mayor Dunin
NOES: Councilman Roalman
ABSENT: None
the foregoing resolution was passed and adopted this 3rd
day of
July , 1990.
Dr Ron Dunin
ATTEST:
City Clerk Vam Voges J�,- -
G
Resolution No. 6832
Page 3
APPROVED:
(1990 Series)
jh /D /embassyl.wp
^�'�� ►�ililliilli��j��ill city of San Luis osIspo
HaZa COUNCIL AGENDA REPORT
MEETING DATE:
7 -3 -90
ITEM NUMBER:
FROM: Ar?tallatt-jion s, Community Development Director; By: Jeff
Hossociate Planner
SUBJECT: In of temporary additional signage for Embassy
Suites Hotel.
CAO RECOMMENDATION: Adopt resolution which: 1) directs staff to
proceed with Sign Alternative 1, and 2) authorizes the CAO to award
the contract if the lowest responsible bid is $5,000 or less, and
3) authorizes the Finance Director to fund the project from the
Groundwater Well Development account.
BACKGROUND
Last year City crews installed a water filtration facility adjacent
to the Embassy Suites Hotel and State Highway 101. The facility
consists of two steel tanks and a pumphouse, and is located next
to a private well which is operated by the City under an agreement
with the Dalidio family. Its location was selected to minimize the
cost of piping, and to facilitate maintenance and operation of the
well and filtration unit.
The well is currently shut down for repairs; however'it normally
produces about 550 gallons of water per minute for City use. To
meet State drinking water standards, the water requires filtration
to remove two contaminants: Tetracloroethylene (PCE and
Tricloroethylene (TCE). The two 10 -foot diameter by 22 -foot tall
activated carbon tanks remove these organic chemicals and produce
potable water to supplement other City sources during the drought.
After the tanks were installed, representatives of the Embassy
Suites Hotel complained to City staff that the tanks blocked
visibility of the hotel's internally illuminated, 10 foot by 30
foot wall- mounted sign facing northbound highway traffic. Staff
has met with Embassy Suite representatives, and based on our
discussions, prepared the alternatives to resolve the hotel's
concerns which discussed below.
SIGNIFICANT IMPACTS
The Community Development Director has determined that installation
of the temporary additional sign is categorically exempt under the
City's Environmental Guidelines, (CEQA Section 15301). Fiscal
impact of the project depends on the alternative selected by the
City Council, but no significant fiscal impact is likely under any
of the alternatives.
CONSEQUENCES OF NOT TAKING THE RECOMMENDED ACTION
The City is under no specific requirement to install additional
signing for Embassy Suites, nor is there a deadline for such
action. The City may, however, have some responsibility for
,�D
"' II11 111l1 city Of San Luis OBISPO
� COUNCIL AGENDA REPORT
Staff Report
Page 2
providing alternative signage to the hotel for the reduced .
visibility of the the existing sign due to the filtration tanks.
DISCUSSION
Community Development Department staff have done a visual survey
to determine the tanks' effect on sign visibility. Photographs
were taken from several vantage points along the northbound lane
of Highway 101 between Los Osos Valley Road and Prado Road. Based
on the photographs and field observations, staff verified that the
tanks interfere with the sign's visibility starting at about one -
third mile south of the hotel, and continue to interfere until
motorists are nearly opposite the hotel.
Staff met with Sue Vick and Bob Griffin of Embassy Suites Hotel on
April 3rd to discuss options for ameliorating the effects of the
City's carbon filtration tanks on the hotel's sign. Summarized
below are the alternatives which were developed at the meeting.
Since the three options have different cost, aesthetic and policy
implications, they are presented in terms of "pros" and "cons ".
Sian Alternatives
City staff and Embassy Suites representatives favor Alternative 1
because it:
-is of moderate cost;
-ties the sign to the tanks, physically (when the tanks are
removed, so goes the sign); the City's current well agreement
with the property owners expires on May 2, 1992;
- doesn't result in the precedent of a new billboard on City
land east of the freeway (where there are now none); and,
-it will do the job without being "more" or "less" advertising
exposure than before.
With this alternative, the CAO has suggested that the City provide
the sign surface, mounted and ready for painting. Embassy Suites
would be responsible for painting the sign. Lighting would need
to be provided since the existing sign is illuminated.
Alternative 1: Tank - Mounted Sign
A new 10' x 24' painted plywood sign would be mounted to the south
face of the carbon filtration.tanks with the text "Embassy Suites"
(or "Embassy Suites Hotel ") as shown in the attached logo detail,
Exhibit "A". and illuminated with ground- mounted spotlights.
/It l'-
Ca ��
" "'��'���L►�Ilfl�p II�Ih MY Of San tins OBI SPO
BORMs COUNCIL AGENDA REPORT
Staff Report
Page 3
PROs - Can use the tanks as the mounting frame for the sign
(the tanks have four mounting brackets on south
face; the structural properties of the tanks and
brackets would have to be verified for weight and
wind loads).
Ties the new sign to the tanks, so that when the
tanks are moved /removed, the sign would also be
removed.
City already has access to this location; would not
involve negotiating new agreements /leases for
another off -site location.
Cost would be moderate since the sign could be made
of plywood panels and painted with the corporate
lettering style of Embassy Suites.
CONS - The sign would be a "cross reader" .(read by the
driver from across the traffic lanes) which is not
as desireable as a "right reader" (a' sign on the
right hand road side). However, the existing hotel
sign represents the same condition.
May draw more attention to the tanks, especially at
night (they are now virtually unseen at night).
Could lead to requests to also put signing on the
Auto Park way tanks.
Could complicate servicing of the tanks -when a
carbon change is required; could conflict with the
agreement with Dalidio's about use of the site.
Alternative 2: Lease Existing Billboard Sign
The City would lease an existing billboard south of the carbon
filtration tanks along the freeway and change the copy to "Embassy
Suites - Next Exit."
PROS - Would not require attaching new construction to the
existing tanks.
Would use an existing billboard and not add another
sign either to the tanks (as in option one) or in
another location (as in option three).
Cost of re- painting the sign would be minimal.
°�'�'�'����� ►�!'llUli� city of San IUIS OBISPO
COUNCIL AGENDA REPORT
Staff Report
Page 4
Would not draw attention to the tanks, especially
at night.
CONS - May delay the implementation of a solution because
the current lease runs until December 1990; to lease
the sign for Embassy Suites earlier may involve
buying out the remaining lease (if possible).
On -going costs would be very high at about $1,200
per'month lease rate.
Although a special circumstance, the City's
participation in billboard advertising may be seen
as an undesirable activity and contrary to City
Policy which attempts to discourage freeway -
oriented signs.
Alternative 3: New Billboard sign
The City would install a new 10' x 241 billboard on City property
adjacent to the bus maintenance facility off the east side of the
freeway on Corporation Yard land.
PROS - Would not involve property negotiation nor
modification to the existing tanks.
Could be smaller in size than a "cross reader" sign
on the tanks or a billboard on the west side of the
freeway.
Could be located to minimize visual impact and use
the bus maintenance building and existing
landscaping as a backdrop.
Would be under City,s control with respect to
termination.
Would not draw attention to the tanks, especially
at night.
CONS - Would put a billboard up where there are now none
along the stretch from Los Osos Valley Road to Prado
Road.
Would require new construction and provision of
electrical service to this location.
May give Embassy Suites greater visibility than they
had before the tanks were installed.
§�; city o� san tins osispo
COUNCIL AGENDA REPORT
Staff Report
Page 5
Fiscal Impact
Until the City receives construction bids, precise costs for each
alternative are unknown. Based on staff's experience and on an
informal contractor estimate, the cost to install the alternatives
is (estimates do not include contingencies):
Alternative Estimated Cost
1 $3,500
3,500 plus
1,200 /month lease
7,500
There are no funds currently budgeted for this project. Since the
need for the project results from installation of the filtration
tanks, staff feels that funding should come from the, Groundwater
Well Development account (Dept. no. 8743), Page E -7 of the 1989-
91 Financial Plan. The project is relatively minor whein compared
with other utility projects, and there are adequate funds available
in this account to cover project.costs.:
The Nest Step
Once Council gives direction on its preferred sign alternative,
staff will request bids from contractors to make and install the
sign. If the lowest responsible bid for selected alternative is
within the staff - estimated cost, the CAO will award the contract
and the sign will be installed after securing the necessary
approvals from the property owner and the County Planning
Department. If all bids exceed estimates, or if the selected
alternative cannot proceed as described above, staff will return
to Council to request further direction.
Attachments:
-Draft Resolution
- Vicinity Map
- Photos
- Exhibit "A": Embassy Suites sign logo
- Letter from Embassy Suites
wX b x
J
V
C
Rr,iOLUTION NO 6831 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DECLAr9NG A POLICE MOTORCYCLE (UNIT NO 2484)
AS SURPLUS PROPERTY
BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:
SECTION 1. That the City Council hereby declares that the Police Motorcycle identified as Unit
No 2484 is surplus property.
SECTION 2. Disposal of the motorcycle shall be made by sale to the San Mateo Police
Department for the sum of $850.00.
On motion of coRappa� man , seconded by Councilwoman Pinard and on the following roll
call vote:
AYES: Councilmembers Rappa, Pinard, Reiss, Roalman, and Mayor Dunin
NOES: None
ABSENT: None
the foregoing Resolution was passed and adopted on the 3rd day of July 1990.
C � -
Mayor Ron Dunin
ATTEST:
CA Clerk Pam & ges
APPROVED:
i ty dmmistrative OMcer
A�2'
tto Director of Finance
R 6831
r
t
r
RESOLUTION NO. 6830 (1990 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO APPROVING A PREDEVELOPMENT
AGREEMENT FOR THE COURT STREET PROJECT
WHEREAS_, in order to promote the public health, safety, and
general welfare and to provide public amenities and public open
space and to enhance retail, office, and recreational opportunities
in the downtown, the City has actively sought development of its
Court Street property. Specific goals of this development effort
include enhancing downtown's economy by expanding the variety and
volumn of retail sales and related uses; reinforcing downtown's
history as the hub of cultural, social entertainment, and
commercial activity in the County; developing an attractive,
economically feasible project with minimal public costs and optimum
private investment opportunities; encouraging efficient use and
development of existing and planned parking facilities; promoting
opportunities for local participation and investment in the
project; and ensuring that the development reflects the community's
unique character, spirit, and pride; and
WHEREAS, by Resolution No. 5575 (1984 Series) , the City
approved a recruitment process and work program leading to the
development of the property which included the issuance of a
Request for Qualifications; and
WHEREAS, following a lengthy selection process in response to
the Request for Qualifications, the City by Resolution No. 6030
(1986 Series) authorized staff to negotiate with Glenbourough
Corporation, Frank A. Morrow and Associates, and the Sykes Group,
and authorized the Mayor to sign an Exclusive Negotiating Agreement
R 6830
ie_o ,)_on_rr%
Resolution No. 6830(1990 Series) O Page 2
with this Development Team for the development of the property.
I•nterwest Investment Group executed the Exclusive Negotiating
Agreement in place of the Sykes Group, and is the successor in
interest to the original the initial Development Team; and
WHEREAS, by Ordinance No. 1135 (1989 Series), the City
certified the final environmental impact report, amended the City
zoning map, and approved the planned development preliminary plan
for the Court Street project; and
WHEREAS, City representatives and Interwest Investment Group
entered into negotiations regarding the terms and conditions of the
proposed Predevelopment Agreement and Ground Lease in August of
1989;
NOW; THEREFORE, BE IT RESOLVED by the Council of the City of
San Luis Obispo as follows:
SECTION 1. That the Predevelopment Agreement and Agreement
to Lease attached hereto marked Exhibit A, and included herein by
reference, is hereby approved;
SECTION 2. That the intent and purpose of this
Predevelopment Agreement and Agreement to Lease is to set forth the
obligations of the City of San Luis Obispo and Interwest Investment
Group and conditions precedent to execution of the Ground Lease
and to the construction phase of the project.improvements;
SECTION 3. The Mayor is authorized to execute the attached
Predevelopment Agreement and Agreement to Lease.
Resolution No. 68C 1 (19.90 Series) Page 3
Councilwoman _2fayor
On motion of Raupa ,seconded by = pjmyn_ ,
and on the following roll call vote:
AYES: Councilwoman Rappa, Mayor Dunin, Councilmembers Pinard, and Reiss
NOES: Councilman Roalman
ABSENT: None
The foregoing Resolution was passed and adopted this 19th. day
of June , 1990.
c
ATTEST: YOR RON DUNIN
City erk Pam es
APPROVED:
/N_ ✓
ty AcIministrative Officer
Director of Finance
���� ��.
��� � � �
. � �'` _._
�..::..
r_,, .
AGREEMENT N0. 92 -90 -CC
COURT STREET CENTER PROJECT
PREDEVELOPMENT AGREEMENT AND AGREEMENT TO LEASE
between
CITY OF SAN LUIS OBISPO
and
INTERWEST INVESTMENT GROUP
a California Corporation
A 92 -90 -CC
• O
RECITALS . . . . . . . . . . . 1
ARTICLE
1.
GENERAL PROVISIONS . . . . . . . . . . . . .
6
1.01
Purpose of this Agreement . . . . . . . . .
6
1.02
Conveyance of Leasehold Title /Conditions
Precedent . . . . . . . . . . . . . . . . .
7
ARTICLE
2.
IDENTITY OF PARTIES . . . . . . . . . . . .
8
2.01
Project Developer . . . . . . . . . . . . .
8
2.02
City . . . . . . . . . . . . . . . . . . . .
13
2.03
Notices . . . . . . . . . . . . . . . . .
13
2.04
Full Disclosure . . . . . . . . . . . . . .
14
ARTICLE
3.
CONSTRUCTION OF COURT STREET CENTER
PROJECT.
. . . . . . . . . . . . . . . . . . . . . .
14
3.01
Project Developer's Obligations to
Construct Court Street Center Project . . .
14
3.02
Material Changes . . . . . . . . . . . . . .
15
3.03
Substitution of Materials . . . . . . . . .
17
3.04
Submission and Approval of Plans . . . . . .
17
3.05
Project Management Fees . . . . . . . . . .
18
3.06
CEQA Compliance . . . . . . . . . . . .
19
3.07
Distinctions Between Approvals Required of
City in its Regulatory Capacity and as
Landlord Under the Ground Lease . . . . . .
21
3.08
Ambiguities in Planned Development
Preliminary Plan . . . . . . . . . . . . . .
22
3.09
Hazardous Materials . . . . . . . . . . . .
23
3.10
Soils Conditions . . . . . . . . . . . . . .
23
ARTICLE
4.
TIME FOR PERFORMANCE . . . . . . . . . . . .
24
4.01
Schedule of Performance . . . . . . . . . .
24
4.02
Unavoidable Delays .. . . . . . . . . .
24
4.03
Consequences of Actions by Third Parties . .
26
4.04
Effect of Pending Litigation . . . . . . . .
27
ARTICLE 5. REQUIREMENTS OF PARTIES, CONDITIONS
PRECEDENT. . . . . . . . . . . . . . . . . . . 28
5.01 Requirements of Project Developer . . . . . 28
5.02 Requirements of City . . . . . . . . . . . . 31
5.03 Extensions of Time . . . . . . . . . . . . . 32
ARTICLE 6. SATISFACTION OF CONDITIONS, CLOSE OF
ESCROW . . . . . . . . . . . . . . . . . . . . . . . . 33
6.01 Satisfaction of Conditions . . . . . . . . . 33
6.02 Execution and Delivery of Documents . . . . 34
6.03 Close of Escrow . . . . . . . . . . . . . . 34
6.04 Costs of Escrow, Title Insurance . . . 37
6.05 Agreement Terminates if Escrow Not Closed
by January 16, 1995 .. . . . . . . . . . 37
G
SECTION 7. DEFAULTS.AND REMEDIES . . . . . . . . . . . 37
7.01 Default by-Project Developer . . . . . . . . 37
7.02 Remedies of City . . . . . . . . . . . . 38
7.03 Default by City . . . . . . . . . . . . 38
7.04 Remedies of Project Developer . . . . . . . 39
ARTICLE S. EVENTS OF TERMINATION, RIGHTS AND
OBLIGATIONS OF PARTIES . . . . . . . . . . . . . . . 39
8.01 Events of Termination . . . . . . . . . 39
8.02 Effect of Termination . . . . . . . . . . . 41
ARTICLE 9. MISCELLANEOUS PROVISIONS . . . . . . . . . . 43
9.01 Brokers . . . . . . . . . . . . . . . . . . 43
9.02 Costs . . . . . . . . . . . . . . . . . . 43
9.03 Applicable Law . . . . . . . . . . . . . . . 44
9.04 Time of the Essence . . . . . . . . . . . . 44
9.05 Attorneys Fees 44
9.06 Waiver . . . 44
9.07 Assignment or Transfer . . . 45
9.08 Compliance with Law . . . . . . . . . . . . 45
9.09 Disclaimer of Partnership . . . . . . . . 45
9.10 Headings . . . . . . . . . . . . . . 45
9.11 Modification of Agreement . . . . . . . . . 46
9.12 Review by Counsel . . . . . . . . . . . . 46
9.13 Counterparts . . . . . . . . . . . . . . . . 46
9.14 Entire Agreement . . . . . . . . . . . . . . 47
Attachments:
1. Legal Description of 999 Monterey
Z. Legal description of Court Street
3. Proposed Ground Lease
4. Proposed Agreement Granting Option to Extend Lease
5. Identities and ownership interests of Project
Developer
6. Schedule of Performance
7. Approved Title Exceptions
AGREEMENT NO. 92 -90 -CC
PREDEVELOPMENT AGREEMENT
iF�7
AGREEMENT TO LEASE
This Predevelopment Agreement and Agreement to Lease
(hereinafter "Agreement ") is made and entered into this 19th
day of June 1990, by and between the CITY OF SAN LUIS
OBISPO (the "City ") and INTERWEST INVESTMENT GROUP, a
California. Corporation (the "Project Developer "), together with
Attachment Nos. 1 through 7, inclusive, attached hereto and.
incorporated herein by this reference. The City and the Project
Developer- are collectively referred to hereinafter as the
"Parties."
RECITALS
This Agreement is based upon the following recitals, facts
and understandings of the Parties:
A. The City owns the real property located at 999
Monterey Street, City of San Luis Obispo, County of San Luis
Obispo, State of California, as more particularly described in
Attachment "1 ", attached hereto and incorporated herein by this
reference, together with a certain easement or fee interest for
public right -of -way purposes in Court Street, between Monterey
and Higuera Streets, in the City of San Luis Obispo, County of
San Luis Obispo, State of California, which is proposed to be
-1-
A- 92 -90-CC
! 0
vacated by the City, as more particularly described in
Attachment 112" which is attached hereto and incorporated herein
by this reference; herein jointly called the "Property." The
Property includes that portion of Court Street -which is
actually vacated or abandoned by City (or the subject of
issuance of a valid encroachment permit) and which is approved
for development under the Planned Development Final Development
Plan.
B. In order to promote the public health, safety and
general welfare, and to provide public amenities and public
open space, and to enhance retail, office and recreational
opportunities in the downtown area, the City sought development
of the Property.
C. By Resolution No. 5575 (1984.Series) the City
approved a recruitment process and work program leading to
development of the Property, which included the issuance of a
Request for Qualifications. Following a lengthy selection
process in response to the Request for Qualifications, the
City, by Resolution No. 6030 (1986 Series) authorized staff to
negotiate with Glenborough Corporation, a California
corporation, Frank A. Morrow dba Frank A. Morrow & Associates,
and Sykes Group, a California corporation (hereinafter
collectively "the Developer ") and authorized the mayor to sign
an exclusive negotiation agreement with the Developer for
-2-
(J C
development of the Property. Interwest Investment Group, a
California corporation, executed the exclusive negotiation
agreement in place of Sykes Group. The Developer's proposal to
the City at the time of its selection was to privately develop
the Property and a portion of Court Street to be vacated by
City with a hotel project, without resort to public funding
sources. The-Project Developer is the successor in interest to
the Developer.
Subsequent to the selection of the Developer, the
private development of the Property, as initially proposed, has
been modified. On July 5, 1988, the City conceptually approved
a use program and building design for the Property as a first -
class, five story (plus two levels of underground parking),
mixed use commercial project, including professional offices,
restaurants, retail, recreational facilities, public art
gallery, public open space (including an interior atrium and
balconies), and child care facilities (hereinafter "the
Project "). The parties currently envision the Project as a
five (5) story building plus two levels of underground parking,
as described above.
D. By Ordinance No. 1135 (1989 Series) the City
certified the final Environmental Impact Report, amended the
City's zoning map, and approved the planned development
preliminary plan for the Property.
-3-
•
E. Subject to the terms and conditions of this Agreement
and the Ground Lease and the Agreement Granting Option to
Extend Lease which are proposed to be executed by the Parties
and which are attached hereto as Attachments "3" and "4 ",
respectively, and incorporated herein by this reference
(hereafter the "Ground Lease" and the "option Agreement"
respectively), the City has agreed to lease to the Project
Developer, and the Project Developer has agreed to lease from
the City the Property. Project Developer has also agreed to
develop the Property, at Project Developer's sole cost, for
office, retail, restaurant, recreational facility, and
specified public uses, the Property, in accordance with: (1)
the terms and conditions of Ordinance No. 1135, as said terms
and conditions may be modified, refined or altered by the
Planned Development Final Development Plan to be submitted by
Project Developer and approved by the City, and by the plans
and specifications for the Project to be approved by City as
Landlord under Section 6.1 of the Ground Lease and Section 3.04
of this Agreement; (2) the terms and conditions of the Ground
Lease; (3) all regulations, ordinances or other permits or
approvals previously given or to be given or required by the
City of San Luis Obispo or any other governmental agency
relating to development of the Property; and (4) the terms and
conditions of this Agreement.
-4-
The Project Developer,has also agreed to design and
prepare plans and construction documents for the City, at
Project Developer's cost, for certain public improvements,
serving and benefiting the Project in accordance with the terms
and conditions of Ordinance No. 1135, including but not limited
to replacement of water mains, fire hydrants, street frontage
improvements, as well as public safety
improvements, and to construct the same at Project Developer's
sole cost. The on -site and off -site public and private
improvements required by Ordinance 1135, as the same may be
modified as described above, are collectively referred to
hereinafter as the "Project Improvements ".
F. In March, 1989, Project Developer submitted a draft
lease to City. In August, 1989, Project Developer and City
entered into negotiations regarding the terms and conditions of
the proposed Ground Lease. From August until December, 1989,
the City believed the Project Developer was comprised of
Interwest Investment Group, Watkins Engineers & Constructors,
Inc., and Peerless Investment. In December, 1989, Interwest
Investment Group advised City that Watkins Engineers &
Constructors, Inc. was no longer a general partner, and
proposed two new general partners. In January, 1990, Interwest
Investment Group proposed to execute this Agreement and the
Ground Lease alone.
-5-
G. Due to the length of the proposed Ground Lease, and
the impact development of the Property will have on the City of
San Luis Obispo, particularly the downtown area, the City will
not execute the proposed Ground Lease until such time as
Project Developer is composed of persons and /or entities that
have the experience and financial ability to carry through
development of the Property to City's satisfaction. However,
since Interwest Investment Group has invested time and incurred
expenses in attempting to proceed with development of the
Property, the City will allow Project Developer a limited time
to join and associate with other persons or entities in joint
ventures, partnerships or otherwise, to ensure that Project
Developer has the requisite experience and financial ability.
AGREEMENT
In consideration of the foregoing, and of the mutual and
respective covenants and promises set forth herein, and subject
to all the terms and conditions hereof, the Parties agree as
follows:
ARTICLE 1. GENERAL PROVISIONS.
1.01 Purpose of this Agreement.
The intent and purpose of this Agreement is to set
forth the obligations of the Parties and conditions precedent
-6-
to execution of the Ground Lease and to the construction phase
of the Project Improvements. Accordingly, this Agreement is
intended to provide for the completion of all actions necessary
to commence construction and development of the Project
Improvements between the date of execution of this Agreement,
and the Effective Date of the Ground Lease, as defined in
Section 2..0 of the Ground Lease.
1.02 Conveyance of Leasehold Title /Conditions Precedent.
Upon completion of all the actions required under
Article 2, Article 5 and Section 6.03(c) of this Agreement, the
City shall convey leasehold title to the Property (and if
possible, a portion of Court Street to be vacated by City) to
the Project Developer, through escrow, as set forth in Article
6 herein, subject to all the terms and conditions of this
Agreement, and of the Ground Lease; provided that each of the
required actions of the City and Project Developer set forth in
Article. 2, Article 5 and Section 6.03(c) is a condition
precedent to the Ground Lease, and that should any condition
precedent fail to occur, for any reason, either party may
terminate this Agreement and the Ground Lease without liability
to the other.
-7-
(:D
ARTICLE 2. IDENTITY OF PARTIES.
2.01 Project Developer.
a. The Project Developer is Interwest Investment
Group, a California corporation.
b. During the term of this Agreement, no additional
persons or entities may become general or limited partners of
the Project Developer or enter into a joint venture with the
Project Developer with respect to the Project, or otherwise
acquire an interest in the Project, without the prior written
approval of the City, which approval shall not be unreasonably
withheld. During the term of this Agreement no general or
limited partners of the Project Developer shall be removed or
eliminated or a new one(s) added, nor shall the managing
partner be removed or eliminated or a new one(s) added, nor
shall changes in the interest of the shareholders of a general
partner or changes in the ownership of a general partner,
including the purchase or acquisition of a general partner's
interest by any other general partner pursuant to the
partnership or joint venture agrement, occur without the prior
written approval of City. Project Developer shall not assign
its interest or any portion of its interest in this Agreement
without the prior written consent of City. City may withhold
its approval of any proposed partner, joint venturer or
-8-
C
assignee (other than a limited partner) who does not meet or
exceed the criteria set forth in Section 2..01(d)..
C. Within seventy -five (75) days of the date of
execution of this Agreement, Project Developer shall submit to
City the identities and proposed ownership interests of all
persons or entities with whom Project Developer proposes to
develop the Property. Within the same time period, Project
Developer shall also submit to City a copy of each executed
joint venture, partnership or other agreement concerning the
relationship of the parties thereto or otherwise relating to
development of the Property, together with such financial and
background information as City requests. The financial and
background information to be provided within the specified time
period includes, but is not limited to: individual and
corporate biographies (with details of partnership and
corporate structure where applicable), specific project
summaries, current audited financial statements of all general
partners (with notes on any contingencies and outstanding
obligations), statements of net worth indicating the form in
which assets are held (i.e., cash versus land) and appropriate
bank and other references. The persons or entities proposed by
Project Developer shall, at a minimum meet the criteria set
forth in Section 2.01(d) below.
-9-
In the event Project Developer fails to submit the
required information within the specified time period, or if
the proposed new development team fails to meet the criteria
set forth in Section 2.01(d), the City may disapprove the
proposed development team, and the City may, at its option
terminate this Agreement. The City shall consider the proposed
development team within sixty (60) days after Project Developer
submits the information described above, and shall take final
action within a reasonable period of time. Upon such
termination, City shall not be liable to Project Developer or
anyone claiming through or on behalf of Project Developer.
other rights and obligations of City and Project Developer in
the event of termination under this paragraph shall be governed
by the provisions of Section 8.02(d), below.
d. Any proposed development team will be subject,
at a minimum, to the same criteria used for selection of the
original development team in the "Court Street Center Request
for Qualifications, December, 1985." In addition, the general
partners of the proposed development team (individuals and /or
companies), in the aggregate, shall meet the following minimum
financial and experience criteria by demonstrating to City's
satisfaction that they:
1. Have at least 10 years of professional
experience developing commercial projects, including a history
of having completed (i.e., initiated, obtained approvals for,
-10-
received financing for, built and leased) or substantially
completed, at least three multi- tenant projects of
approximately 100,000 square feet each.
2. Have a track record of successfully
recruiting, negotiating with, leasing space to, and managing
leases with office and retail tenants of the type likely to be
tenants of the Court Street Center.
3. Have a demonstrated history of producing
economically viable projects (.e., they are "profitable" as
judged by accepted industry standards).
4. Have produced projects which exhibit a
sensitivity to good architectural and landscape design.
5. Have a net worth of at least Ten Million
Dollars ($10,000,000.00) and a liquid net worth of at least Two
Million Dollars ($2,000,000.00).
6. Can demonstrate a good business reputation
which can be independently verified through creditors (i.e.,
banks, other sources of loans, architects, contractors, etc.)
and project tenants.
7. Have no history of loan defaults or
bankruptcies (personal or corporate).
S. Have disclosed any pending litigation that
could affect their financial position, and can support an
opinion that any such pending litigation is not expected to
adversely affect the financing of the Court Street Center.
9. Have disclosed participation in any
-11-
projects that were not economically viable or not "profitable"
as judged by industry standards.
If a general partner is a corporation and this general
partner seeks to satisfy the financial requirements set forth.
in 2.01(d), above, then said corporation shall have sufficient
assets to satisfy City it has the ability to successfully
construct the Project Improvements and operate the Project;
otherwise, the principals of any such general partner shall
provide personal guarantees or other security in a form
acceptable to City's City Attorney.
In addition, Project Developer shall demonstrate to City's
reasonable satisfaction that the proposed development team: (i)
shares City's vision of the project; (ii) has the ability to
work with City's City Council and staff to develop the Property
successfully; (iii) has an appreciation for the complexities
and sensitivities of a public /private development project; (iv)
has the ability to adapt its /their previous experience and
style to the San Luis Obispo context; and (v) has an ability to
work cooperatively and productively with the other members of
the development team, particularly Interwest Investment Group.
Should City determine that the proposed development team
does not satisfy the above criteria, City shall advise Project.
Developer in writing why it reached such a conclusion. Project
Developer shall have fifteen (15) days from the date City so
advises Project Developer to rebut, in writing, any findings
supporting the City's determination. City shall consider the
rebuttal information within sixty (60) days of its receipt and
-12-
shall thereafter either adopt, modify or reverse its original
determination within a reasonable period of time.
2.02 City.
The City is the City of San Luis Obispo, a chartered
municipal corporation of the State of California, organized and
existing under the constitution of the State of California, its
charter, its duly adopted ordinances and resolutions, and the
applicable laws of the State of California.
2.03 Notices.
Any notice to be given or other document to be
delivered by either party to the other hereunder shall be in
writing and delivered to either party by personal delivery or
by depositing the same in the United States Mail, duly
certified, with postage thereon, fully prepaid, and addressed
to the party for whom intended, as follows:
City:
City Council
c/o City Administrative Officer
City of San Luis Obispo
990 Palm Street
P. 0. Box 8100
San Luis Obispo, CA 93403 -8100
Project Developer:
Interwest Investment
Group
ATTN: Marshall Ochylski
75 Higuera St.
San Luis Obispo, CA 93401
Either party hereto may from time to time by written
notice to the other party designate a different address which
shall be substituted for the one above specified. Notices
shall be effective when received. Any notice or other document
sent by certified mail, as required herein, shall be deemed
received seventy -two (72) hours after the mailing thereof.
-13-
• 0
Notices or other documents sent by personal delivery shall be
deemed received.on the date of such delivery.
2.04 Full Disclosure.
The Project Developer shall make full written
disclosure to the City of the identity of its principals,
officers, stockholders, partners, joint venturers, associates,
and persons or entities having an ownership interest in the
Project Developer and the nature, extent and value of the
ownership interest of each, as of the date of execution of this
Agreement. For purposes of determining Project Developer's
compliance with Section 2.01(b), above, the identities and
ownership interests required by this section are set forth in
Attachment "5 ", which is attached hereto, and incorporated
herein by this reference.
ARTICLE 3. CONSTRUCTION OF COURT STREET CENTER PROJECT.
3.01 Proiect Developer's Obligations to Construct Court
Street Center Proiect.
Within the time set forth in the Schedule of
Performance for the Project (Attachment "6" hereto), subject
only to Unavoidable Delays (as defined in Section 4.02 hereof),
the Project Developer shall, at its sole cost and expense,
cause the Project Improvements to be designed and constructed
in accordance with the terms and conditions of this Agreement
-14-
(71
and the Ground Lease and Ordinance 1135, as the same may be
modified as set forth in Paragraph E of the Recitals herein,
and in accordance with all approvals, permits and other actions
required by the City of San Luis Obispo or any other
governmental agency having jurisdiction over the Property or
its development.
3.02 Material Changes.
Subject to the provisions of Section 3.03 below and
such provisions of the Ground Lease as may exempt Tenant from
having to obtain landlord's approval, the Project Developer
agrees that before and during the period of construction of the
Project Improvements, the Project Developer shall not make or
permit to be made any substantial changes in the final approved
plans for the Project Improvements without first obtaining the
prior written approval of City, as regulator or Landlord, as
applicable. For purposes of this Section 3.02, substantial
changes include, but are not necessarily limited to, the
following:
a. Change in size or design affecting the bulk,
building coverage or floor area ratio, number of floors, or
number of parking spaces provided on site;
b. Changes affecting the size, design or use of
exterior finishing materials noticeably affecting.architectural
-15-
� o
appearance or functional use and operation of the Project;
C. Changes in size or placement of service
facilities, or in the number of elevators, stairs and ramps,
and changes in general pedestrian or vehicular circulation in,
around or through the Project;
d. Any changes requiring approval of any City or
state board, body, commission or officer, or any change
required by any City or state board, body, commission or
officer; but not including interior alteration otherwise
specifically excluded under the Ground Lease;
e. Material changes in number, size, placement,
graphics, design or materials of all exterior signs, if any,
shown on the plans, different from those shown and specified in
the approved plan;
f. Material changes in landscape planting and site
improvements;
g. Changes in the size or material changes in the
quality of exterior pavement, pedestrian malls, plazas,
interior atriums, retaining walls, pools and fountains, public
art, exterior lighting, public open space areas (including
balconies), child care facilities, public art gallery and other
-16-
u
development of the Property other than that shown and specified
in the plans approved by City as regulator and as Landlord.
3.03 Substitution of Materials.
Changes shall not be made in any City or Landlord
approved plans and specifications as to elements requiring City
or Landlord approval as provided above without the City's or
Landlord's express written approval and, as determined
necessary by the City, the approval of the City's Architectural
Review Commission or Planning Commission; provided, however,
that if certain materials approved by the City or Landlord are
not available for construction, the Project Developer may
substitute materials which are the architectural equivalent as
to aesthetic appearance, quality, color, design and texture,
after notifying City and /or Landlord of said substitution.
3.04 Submission and Approval of Plans.
a. Within the time set forth in the Schedule of
Performance (Attachment 11611) which is attached hereto and
incorporated herein by this reference, the Project Developer
shall submit for approval to the City, as Landlord, and as
required, to City, including the City's Planning Commission,
Architectural Review Commission, and other City departments or
agencies, preliminary and final construction plans and
documents for the Project Improvements.
-17-
® O
b. Within the time set forth in the Schedule of
Performance (Attachment ^6 ^) the City shall approve such plans
and documents, or shall give the Project Developer written
notice of any objections to such plans and documents. Project
Developer shall have the right to appeal any objections of or
conditions imposed by the City Planning Commission or City
Architectural Review Commission to the City Council for final
determination; and the City Council shall consider any
necessary final approvals of other required actions. If any
such objections or conditions to any plans or documents remain
following a final determination by the City Council on appeal,
the Project Developer shall resubmit any plans or documents for
the Project Improvements objected to within thirty (30) days
after receipt of written notice of such objections as finally
determined on appeal, or within such longer period as shall be
reasonable in light of the scope of the changes required, but
in no event more than ninety (90) days.
3.05 Project Management Fees.
In addition to all other fees normally required by
the City for construction of a project in the City of San Luis
Obispo, including, but not limited to, plan check fees,
construction permit, utility connection fees, and parking -in-
lieu fees, Project Developer agrees to pay all fees required
under Ordinance No. 1135, as well as a fee in the sum of Sixty
Thousand Dollars ($60,000.00) to reimburse City for.its
-18
extraordinary project management costs incurred during the
period between the time this Agreement is executed through and
including the date of issuance of the Certificate of Occupancy.
The Project Developer agrees to pay all fees prior to close of
escrow, as described in Section 6.03 hereof, excluding only the
parking -in -lieu fees lump sum payment, as provided in Section
1.10 of the Ground Lease.
3.06 CEOA Compliance.
The City has certified, pursuant to the California
Environmental Quality Act (Public Resources Code §21000, et
seq.) ( "CEQA "), the Guidelines for Implementation of.the
California Environmental Quality Act (14 Cal. Admin. Code
§150001 et seq.) and the City Environmental Review Guidelines,
an Environmental Impact Report ( "EIR ") for the Project, which
satisfies CEQA for the purposes of this Agreement.
The Project Developer and the City understand and
agree that no subsequent or supplemental EIR or other
documentation shall be required by the City for subsequent
discretionary approvals implementing the Project unless:
a. Required by applicable federal or state law; or
b. Substantial changes in the Project are proposed
by the Project Developer which will require major revision of
-19-
the EIR or other documentation prepared and certified for the
approval of the Project; or
C. Substantial changes occur with respect to the
circumstances under which the Project will be undertaken which
would require a major revision of the EIR or other
documentation; or
d. New information, which was not known and could
not have been known at the time that the Project was approved
and the EIR and documentation were completed, becomes
available. "New information" as used herein does not mean
discovery that probable or potential impacts considered in the
approval of the Project are becoming or have become realities,
but instead that those impacts were not considered in the
environmental analysis associated with the approval of the
Project. Otherwise, "new information" and any subsequent .
environmental review will be limited to significant impacts
upon the environment that are particular to the Project and
that were not addressed as significant impacts in the EIR or
documentation considered in connection with the approval of the
Project.
Subject to the foregoing, if additional environmental
reviews or studies are required in connection with the carrying
out of the Project, the City shall undertake and complete such
-20-
reviews and studies in a timely manner and the Project
Developer shall reasonably supply data and information
available to it and required by the City to undertake and
complete such environmental reviews or studies in compliance
with CEQA and the City environmental review guidelines. If any
such additional environmental reviews or studies are required,
either because of changes in the scope of the Project requested
by the Project Developer, or for any other reason, the Project
Developer shall pay all costs incurred by the City for such
reviews and studies. Any such additional environmental studies
shall be undertaken and completed to the greatest extent
possible so as not to interrupt or delay the timing and
progress of the design and development of the Project.
3.07 Distinctions Between Approvals Required of City in
its Regulatory Capacity and as Landlord Under the Ground Lease
The Parties understand and agree that those approvals
required of City under this Agreement, acting in its
governmental or regulatory capacity, are separate and distinct
from those approvals required by the City acting as Landlord
under the Ground Lease. Any reference to "the City" herein is
to the City of San Luis Obispo acting in its governmental or
regulatory capacity; any reference to Landlord herein is to the
City of San Luis Obispo acting as Landlord under the Ground
Lease.
-21-
Notwithstanding anything to the contrary in this
Agreement or the Ground Lease, nothing herein shall be
interpreted as the City, by reason of its dual capacity in the
Ground Lease and this Agreement, in any way waiving or
weakening any regulatory or police power in any of its
governmental capacities. It is intended that the Project
Developer shall be obligated to fulfill such requirements as
may be imposed by any governmental agency or authority of the
City having or exercising any jurisdiction over the Property or
over any construction to be undertaken by Project Developer in,
on or about said Property.
Refusal or failure by City to issue any permit, license or
approval sought by Project Developer for construction of
improvements on, or development of, the Property shall not
constitute a breach of this Agreement or the Ground Lease.
"Approval" as used in the immediately preceding sentence does
not include any approval specifically required of "City acting
as Landlord" in this Agreement or "Landlord" in the Ground
Lease.
3.08 Ambiguities in Planned Development Preliminary Plan
The parties acknowledge that certain issues relating
to development of the Property are addressed in the planned
development preliminary plan adopted by Ordinance 1135 (1989
series) but are ambiguous, and the ambiguities are not resolved
-22-
in the Ground Lease or this Agreement_. These issues include,
but are not limited to, use of the fifth floor, the interior
atrium, public art, child care, and public art gallery. The
parties agree that these ambiguities are to be resolved to the
satisfaction of the City Council in the final development plan
for the planned development, and are subject to City Council
approval.
3.09 Hazardous Materials.
Subject to the provisions of Section 4.02, if any
Hazardous Materials, as defined in Section 1.6 of the Ground
Lease, are found in, on, or upon the Property, either before or
after the Effective Date of the Ground Lease, the provisions of
Section 1.6 of the Ground Lease shall control the rights and
obligations of the parties.
3.10 Soils Conditions.
The City shall not be responsible for removing any
subsurface obstructions on the Property except as set forth in
Section 1.6 of the Ground Lease. It shall be the Project
Developer's sole responsibility, at the Project Developer's
sole expense, to investigate and determine the soil condition
of the Property and the suitability of the Property for the
development to be constructed by the Project Developer. If the
soil condition of the Property is not in all respects entirely
suitable for the use or uses to which the Property will be put,
-23-
as described in Article 5 of the Ground Lease, then it is the
sole responsibility and obligation of the Project Developer to
notify the City of any defects prior to the Effective Date of
the Ground Lease. The City shall have the right, but not the
obligation, to correct any soil defects which the Project
Developer may discover, but the Project Developer's only
remedy, should the City elect not to correct such soil
condition, shall be to terminate the Ground Lease and this
Agreement. In the event the Property is determined to be of
possible archeological or historical significance, the Parties'
rights and obligations shall be governed in accordance with
Section 1.7 of the Ground Lease and 4.02 of this Agreement.
ARTICLE 4. TIME FOR PERFORMANCE.
4.01 Schedule of Performance.
The Project Developer shall proceed with the
performance of its obligations under.this Agreement in
accordance with the time requirements set forth in the Schedule
of Performance (Attachment 116" hereto), subject only to
Unavoidable Delays (as defined in Section 4.02 hereof) or as
otherwise permitted in this Agreement.
4.02 Unavoidable Delays.
For the purpose of any of the provisions of this
Agreement, (except Project Developer's obligation.to timely
-24-
the construction by reason of force majeure as set forth in
Section 15. 4, strikes not under the direct control of Tenant (or
Tenant's general contractor), delays caused by Landlord or its
agents, failure to obtain materials for reasons not under the
control of Tenant or Tenant's general contractor, or the cleanup
of Hazardous Materials in accordance with Section 1.6; Landlord
may extend the time for completion for such other good cause as
Landlord shall, in its sole discretion, determine.
6.1.4.2. Failure to Substantially Comply With Plans and
Specifications
With respect to the Initial Construction, should
Tenant, for any reason, fail to substantially comply with any
of the plans and specifications or fail to receive Landlord's
approval for any material changes to the Initial Construction,
or substitution of materials as set forth in this Lease, then
Landlord shall have the right, upon written notice, to require
Tenant to alter, repair or replace any improvements or
refurbishment to the satisfaction of Landlord, or Landlord may
reenter the Property to conduct such replacements, alterations,
or repairs by Landlord's employees, independent contractors, or
agents, as shall bring the Lease into compliance with Landlord's
approved plans and specifications and charge Tenant for any and
all expenses incurred in doing the same; provided, Tenant shall
have thirty (30) days after receipt of written notice to cure
any such material default, or, if Tenant cannot cure said
default within thirty (30) days to commence rectifying said
default and to proceed diligently thereafter.
6.1.4.2.1.
In the event Landlord and Tenant disagree on whether Tenant
has made material changes to the Initial Construction or
substituted materials, or failed to substantially comply with
the plans and specifications, then the parties shall immediately
submit the matter to arbitration and shall thereafter arbitrate
the matter before a neutral arbitrator 'or arbitrators in
accordance with the Construction Industry Rules of the American
Arbitration Association. The decision of such arbitrator(s)
shall be binding. Both parties shall have the right to
discovery, and the arbitrator shall have the power to make
discovery rulings that are binding on the parties. In addition
to the foregoing, Landlord shall notify any Mortgagee (as
defined in Section 14.03 hereof) of Tenant's failure to cure any
32
0 O
6.1.3.2.. Bonds Satisfactory to Landlord
Each such bond shall be issued in favor of Landlord by a
corporate surety company licensed to transact business in the
State of California, which is approved by and satisfactory to
Landlord's City Attorney. Each such bond shall insure that
the construction commenced by Tenant shall be completed in
accordance with the Project Improvements approved by the
Landlord, and that all labor, material and other costs as
mentioned above in connection with the construction are paid,
or, at the Landlord's option, that uncompleted construction
shall be removed and the Property restored to a condition
satisfactory to the Landlord.
6.1.3.3. Performance Bond
The performance bond shall remain in full force and effect
until a date forty -five (45) days after the issuance of the
Certificate of Occupancy or forty -five (45) days after the
recording of the Notice of Completion, whichever date is later.
6.1.3.4. Labor and Materials Bond
The labor and materials payment bond shall remain in full
force and effect until the expiration of the period of time for
filing a claim of lien as provided in the California Civil Code
or if a claim of lien is filed, the expiration of the period for
filing an action to foreclose such lien or until the Property
is released from any such claim of lien or action to foreclose
such lien, or the lien is discharged.
6.1.4. Completion
Tenant shall take all steps necessary to enable it to
commence, and will commence, the Initial Construction, and will
diligently prosecute and complete such Initial Construction
within the times set forth herein subject to force majeure as
set forth in Section 15.4 hereof.
6.1.4.1. Completion of Improvements.
Tenant shall begin construction and installation of the
approved Project Improvements within thirty (30) days after the
Effective Date. The Initial Construction shall be completed and
ready for use within twenty -four (24) months after the Effective
Date ( "Completion Date "), provided, that Landlord shall extend
the time for completion if Tenant is prevented from completing
31
forth in Section 4.02 of the Predevelopment Agreement, Tenant
shall construct or cause to be constructed the Project
Improvements and related improvements required by the
Predevelopment Agreement and this Lease to be constructed on the
Property in full conformity with the construction plans,
drawings and related documents approved by Landlord, pursuant
to the requirements of the Predevelopment Agreement and this
Lease. The Project Improvements, and.related improvements are
referred to herein as the "Initial Construction."
6.1.2. Approval of Plans
Within one hundred eighty (.180) days after City approval
of the Planned Development Precise Plan, Tenant shall submit
preliminary plans and specifications prepared by an architect
or engineer licensed to practice as such in the State of
California to Landlord's City Administrative Officer or his /her
designee ("CAO "), Landlord may participate in development of the
plans and specifications for the Project Improvements, and to
the extent Landlord deems it desireable, in said development
process. The plans and specifications, and any modifications
thereto, are subject to Landlord approval, but such approval
shall not be unreasonably withheld or delayed. Any final plans
and specifications shall be substantially similar to the
preliminary plans and specifications approved by Landlord, and
shall be substantially similar to plans to be approved by the
Planned Development Precise Plan. With respect to
specifications, Tenant reserves the right to reject any such
modification in the event a modification or addition to the
specifications would significantly increase the cost of the
Project or delay it.
6.1.3. Requirement to Bond.
6.1.3.1. Construction and Bonding
Prior to the commencement of any improvements, repairs or
construct -ion on the Property, Tenant shall obtain: (i) a
faithful performance bond for coverage of not less than loot of
estimated construction costs; and (ii) a labor and materials
payment bond for coverage of not less than 100% of estimated
construction costs. If parking -in -lieu fees are required
pursuant to Section 1.10 hereunder, Tenant shall provide
Landlord with reasonable security for Tenant's payment of fees.
Parking -in -lieu fees are due in .full on the date set forth in
Section 1.10.
30
•
A. Maintain landscaping as necessary to keep it in a
first - class, thriving condition, and replace landscaping if
necessary;
B. Maintain and keep in good condition and repair all
benches, shelters, planters, mall coverings, banners, furniture,
trash containers, sculptures and other exterior elements;
C. Maintain all fountains and associated structures,
drinking fountains, pumps and associated plumbing;
D. Provide adequate security lighting in all areas during
periods of unrestricted public access, and maintain all security
and decorative light fixtures and associated wiring systems;
E. Maintain all improvements on the Property, including
the exterior thereof, as well as the pedestrian mall and
delivery access areas, if any, to be constructed on Court
Street, and the sidewalks, curbs and gutters in the public
right -of -way areas immediately adjacent to the Property.
5.7. Governmental Requirements
Tenant shall at all times comply with, and shall pay all
costs and expenses which may be incurred or required to be paid
in order to comply with, any and all laws, statutes, ordinances,
rules and regulations ( "laws ") which apply to the operation
and /or use of the Property, including those requiring
alterations or additions to be made to, or safety appliances and
devices to be maintained or installed in, on or about the
Property under any laws now or hereafter adopted, enacted or
made and applicable to the Property, and payment of any fees,
charges or assessments arising out of or in any way related to
the Property as a source of adverse environmental impacts or
effects.
ARTICLE 6
6.0. CONSTRUCTION AND LIENS
6.1. Initial Construction of Improvements
6.1.1. Tenant to Construct
Within the times and in the manner set forth in this Lease
and the Predevelopment Agreement, subject to force majeure as
set forth in Section 15.04 hereof and unavoidable delays as set
29
sale without the approval. of the Landlord, which approval shall
not be unreasonably withheld; or
E. Create, cause, maintain or permit any nuisance in, on
or about the Property; or
F. Commit or suffer to be committed any waste in, on or
about the Property; or
G. Use or allow the Property to be used.for any unlawful
purpose; or
H. Do or permit anything which in any way unlawfully
disturbs the occupants of neighboring property; or
I. Cause or permit any insurance coverage on the Property
or the improvements thereon to lapse or to become void or
voidable or do anything to make it impossible to obtain any
required insurance at commercially feasible rates; or
J. Cause or permit any structural damage to the Property
or the improvements thereon or to any adjacent public or private
property; or
K. Cause or permit the use, storage, accumulation or
deposit of Hazardous .Materials in violation of any law,
ordinance or regulation applicable to the Property and the
improvements thereon; or
L. Violate any law, ordinance
to the Property and the improvements
5.6. General Standards of Maintenance
5.6.1. Tenant Responsible
or regulation applicable
thereon.
Tenant shall be fully responsible for the operation and
maintenance of all of Tenants improvements on the Property, and
any open or public space and common areas on the Property, and
shall operate and .maintain, or cause to be operated and
maintained, such improvements and open or public space and
common areas in first class, safe, clean and sanitary condition
and repair.
5.6.2. Enumerated Standards
Without limiting the generality of the foregoing, Tenant
shall:
28
0 0
written notice by Tenant of such proposed change in operator,
shall be deemed approved by Landlord.
5.4. No Discrimination
There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed,
religion, sex, marital status, sexual orientation, ancestry or
national origin in the construction, operation, sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the
Property or the improvements thereon, or any part thereof, and
Tenant, or any person claiming under or through it, shall not
establish or permit any such practice of discrimination or
segregation with reference to the construction of the Project
Improvements, or the selection, location, number, use or
occupancy of employees, contractors, subcontractors, laborers
or materialmen, tenants, lessees, subtenants, sublessees or
vendees of the Property or the improvements thereon, or any part
thereof.
Tenant shall not restrict the rental or lease of the
Property or the improvements thereon, or any portion thereof,
on the basis of race, color, creed, religion, sex, marital
status, sexual orientation, ancestry or national origin of any
person.
5.5. Use Prohibition
Tenant agrees that in connection with the use and operation
of the Property it will not:
A. Use or permit the use of any objectionable advertising
medium such as, without limitation, loudspeakers, phonographs,
public address systems, sound amplifiers, radio or broadcast on
the Property in such. manner that any sounds reproduced,
transmitted or produced shall be directed beyond the interior
of the improvements thereon, and will keep all mechanical
apparatus free of vibration and noise which may be transmitted
beyond the interior of the improvements on the Property;
B. Cause or permit obnoxious odors to emanate or be
dispelled from the improvements on the Property;
C. Permit undue accumulations of garbage, trash, rubbish
or any other refuse, or otherwise permit the Property to be
maintained in a state of uncleanliness or unattractiveness;
D. Conduct or permit any bankruptcy sale, unless directed
by order of court, or any fire sale or "going out of business"
27
service payments, Landlord's prior written approval is required
before Tenant can bond in lieu of-paying taxes when due.
ARTICLE 5
5.0. USE, CHARACTER, OPERATION AND MAINTENANCE OF IMPROVEMENTS
5.1. General
Tenant shall use the Property and the improvements thereon
only for a first class, high quality mixed use commercial
development as set forth. in the Planned Development Precise Plan
and the Retail Marketing Plan to be approved by the City.
Tenant shall, consistent with good management practices for
comparable commercial projects in San Luis Obispo County,
sublease all of the commercial office, retail, restaurant and
other space for the purposes specified in said Precise Plan and
said Retail Marketing Plan. Tenant shall, consistent with the
exercise of reasonable business judgment, use its best efforts
to keep such space continuously leased. In the event of
conflict between the Planned Development Precise Plan and the
Retail Marketing Plan, the Precise Plan shall control.
5.2. Modification of Retail Marketing Plan
Once Landlord has approved the Retail Marketing Plan,
Tenant shall not modify or change it without the prior written
consent of Landlord, which consent shall not be unreasonably
withheld.
5.3. Operator /Landlord Rights
If Tenant does not operate the Project, then Tenant shall
cause the Project to be operated by a qualified first - class,
mixed use commercial operator (herein "Operator "), provided the
Landlord's Chief Administrative Officer (or his /her designee)
shall have the right to disapprove any operator other than
Tenant, but such disapproval shall not be unreasonably made.
The reasons for any such disapproval shall be set forth with
specificity. For purposes of this paragraph, "operate" shall
mean directly supervising the selection of subtenants and
leasing agents and supervising the maintenance and operation of
the improvements. Tenant shall notify Landlord at least sixty
(60) days prior to any change in operator. Any proposed
operator, the selection of which Landlord does not disapprove
in writing within thirty (30) days after having been given
26
I I 0 0
become payable to the taxing agencies, and in no event later
than the delinquency date of such taxes established by law.
4.6. Tax Contest
4.6.1. Tenant Right to Contest
Tenant, at its sole cost, shall have the right at any time
to seek a reduction in the assessed valuation of the Property
or any improvements thereon or to contest any Real Property
Taxes that are to be paid by Tenant. If Tenant seeks a reduction
or contests the Real Property Taxes, the failure on Tenant's
part to pay the Real Property Taxes shall not constitute a
default as long as Tenant complies with the provisions of this
Section 4.6.
4.6.2. When Landlord Shall Join Contest
Landlord shall not be required to join in any proceeding
or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest be brought by or in the
name of Landlord or any owner of the Property. In that case,
Landlord shall join in the proceeding or contest or permit it
to be brought in Landlord's name as long as Landlord is not
required to bear any cost or expense, including attorney's fees,
and Tenant agrees to indemnify and save Landlord harmless from
any cost or expense. Tenant, on final determination of the
proceeding or contest, shall immediately pay or discharge any
decision or judgment rendered, together with all costs, charges,
interest and penalties incidental to the decision or judgment.
4.6.3. Contest Without Payment /Requirement of Bond
If. Tenant is not in default under this Lease, and is
current on all Rent and debt service payments, and Tenant does
not wish to pay the Real Property Taxes when due and Tenant
seeks a reduction or contests them as provided in this Section
4.6, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond issued by an insurance
company qualified to do business in California, which insurance
company shall be subject to the reasonable approval of Landlord
in an amount equal to one hundred and twenty -five percent (125 %)
of the total amount of Real Property Taxes in dispute. The bond
shall hold Landlord and the Property harmless from any damage
arising out of the proceeding or contest and shall insure the
payment of any judgment that may be rendered. If Tenant is in
default under this Lease, or is not current on all Rent and debt
25
C C
4.3. New Assessments
Tenant shall pay any general or special assessment levied
against the Property or Tenant's improvements on the Property
before delinquency. If any general or special assessment is
levied against the Property, Landlord may elect, if it legally
has such option with respect to such assessment, either to pay
the assessment in full or to allow the assessment to go to bond.
If Landlord pays the assessment in full and legally had the
option to allow the assessment to go to bond, Tenant shall pay
to Landlord, each time a payment of Real Property Taxes is made,
a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to
go to bond. If Landlord pays the assessment in full and did not
legally have the option to allow the assessment to go to bond,
Tenant shall pay to Landlord the full amount paid by Landlord.
4.4. Tenant's Tax Liability Prorated
Tenant's liability to pay Real Property Taxes and new
assessments shall be prorated on the basis of a 365 -day year to
account for any fractional portion of a fiscal tax year included
in the Lease Term at its inception and expiration or earlier
termination in accordance with this Lease.
4.5. Additional Taxes
By entering into this Lease, a possessory interest subject
to property taxation may be created and may rest in Tenant.
Tenant or Tenant's interest in the Property and the improvements
thereon may be subject to payment of property taxes levied on
such possessory interest. Tenant shall pay all such taxes. In
the event the Property or any improvements thereon, or any
possessory interest therein, should at any time be subject to
Ad valorem taxes or privilege taxes levied, assessed or imposed
on such property, Tenant shall pay taxes upon the assessed value
of the entire Property and any improvements thereon and not
merely upon the assessed value of its leasehold interest.
To the extent that ad valorem, privilege or any other taxes
or assessments levied on the Property or any improvements
thereon are of a lesser amount than would be levied if the
Property were in private ownership, Tenant shall be responsible
to pay as Additional Rent fifty percent (50$) of the difference
between the taxes and assessments actually levied and the taxes
and assessments which would have been levied if the Property
were privately owned. Tenant shall pay such difference to
Landlord within thirty (30) days after the taxes for such year
24
0 0
against Tenant's personal property installed or located in or
on the Property which become payable for any period during the
term of this Lease. on demand by Landlord, Tenant shall furnish
Landlord with satisfactory evidence of such payments.
4.2. Real Property Taxes
Tenant shall pay before delinquency all real property taxes
and general and special taxes ( "Real Property Taxes ") levied and
assessed against the Property and all Real Property Taxes levied
against Tenant's improvements on the Property. If the tax bill
is sent to Landlord, Landlord shall notify Tenant of the Real
Property Taxes, and immediately upon receipt of the tax bill,
shall furnish Tenant with a copy of the tax bill. Tenant shall
pay the Real Property Taxes not later than the Taxing
Authority's delinquency date. If at any time during the term of
this Lease any authority having the power to tax, including,
without limitation, any federal, state, county, city government
or any political subdivision thereof (collectively, "Taxing
Authority "), shall alter the methods and /or standards of real
property taxation and assessment against the legal or equitable
interests of Landlord in the Property or the improvements
located or constructed thereon, in whole or in part, so as to
impose a monetary obligation on Landlord in lieu of or in
addition to the Real Property Taxes and assessments in existence
as of the date of this Lease, such taxes based thereon,
including, without limitation, (a) a tax, assessment, excise,
surcharge, fee, levy, penalty, bond or similar imposition
(collectively, "Impositions "), on Landlord's right to rental or
other income from the Property or against Landlord's leasing of
the Property, (b) any Impositions in substitution or in lieu,
partially or totally, of any Impositions assessed upon real
property prior to any such alteration, (c) any Impositions
allocable to or measured by the area of. the Property or the rent
payable hereunder, including, without limitation, any
Impositions levied by any Taxing Authority with respect to the
receipt of such rent or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or
occupancy by Tenant or any subtenant of the Property or any
portion thereof, (d) any Impositions upon this lease transaction
or any document to which Tenant is a party which creates or
transfers any interest or estate in or to the Property
(including any transfer tax which may be due upon recordation
of this Lease or the Memorandum of this Lease described in
Section 15.11 hereof), or (e) any special, unforeseen or
extraordinary Impositions which, although not specifically
described above, can fairly be characterized as a real property
tax or a substitute for real property tax, shall be considered
as "Real Property Taxes" for the purposes of this Lease.
23
o
3.11. Additional Rent
It is the purpose and intent 6f Landlord and Tenant that
the Rent shall be absolutely net to Landlord and that, except
as otherwise provided in this Lease, all costs, fees, taxes,
liens, interest, insurance, charges, expenses, assessments,
reimbursements and obligations of every kind and nature
whatsoever relating to the Property or the Project. Improvements
that may arise or become due during the term of, or arising out
of the provisions of, this Lease ( °Additional Rent "), shall be
the obligation of Tenant. Tenant hereby agrees to indemnify and
to save Landlord harmless from and against Additional Rent. In
addition; should Tenant fail to pay any Additional Rent when
due, Landlord shall have all of the rights, powers and remedies
provided for in this Lease in the event of non - payment of Rent
or other event of default. Landlord shall at all times have the
right (at its sole election and without any obligation to do so)
to advance on behalf of Tenant any amount payable under the
terms hereof by Tenant, or to otherwise satisfy any of Tenant's
obligations hereunder deemed necessary to protect the interests
of Landlord under this Lease, provided that (except in case of
emergency calling for immediate Payment) Landlord shall first
have given Tenant no less than five (5) business days advance
written notice of Landlord's intent to advance such amounts on
behalf of Tenant. No advance by Landlord shall operate as _a
waiver of any of Landlord's rights under this Lease and Tenant
shall remain fully responsible for the performance of its
obligations under this Lease. Tenant.'s. obligation to reimburse
amounts advanced by Landlord pursuant to this Section. 3.il shall
constitute Additional Rent under this Lease and shall be
immediately due and payable'by Tenant to Landlord. Additional
Rent shall include interest at the Lease Interest Rate on such
amounts as are payable to Landlord and are not paid within four
(4) business days after the due date of the Additional Rent, or
the date Landlord made the payment, whichever is later. Such
interest shall accrue from the date Landlord made the payment.
Additional Rent shall also include those sums payable to
Landlord under Article 14, "Refinancing or Transfer."
ARTICLE 4
4.0. TAXES AND ASSESSMENTS
4.1. Personal Property Taxes
Tenant shall pay before delinquency all taxes, assessments,
license fees_ and other charges that are levied and assessed
22
0 0
that he /she has no past, present or contemplated future interest
in the Property or any part thereof, that the compensation to
be received by him /her from any source for making the appraisal
is solely in accordance with this Lease, that he /she has
followed the instructions as set forth in this Section 3.8 for
valuing the Property, that neither his /her employment to make
the appraisal nor his /her compensation therefor is contingent
upon reporting a predetermined value or a value within a
predetermined range of values, that he /she has had at least
seven (7) years full -time professional experience as a
commercial real estate appraiser in the County of San Luis
Obispo, that he /she is a member of the American Institute of
Real Estate Appraisers or successor thereto or the Society of
Real Estate Appraisers or successor thereto (or, if neither such
Institute nor Society nor a successor is in existence, a
disinterested real estate appraiser having appropriate
qualifications to appraise commercial real estate), and that
his /her appraisal was prepared in conformity with the standards
of professional practice of the Institute or Society or
successor thereto.
3.9.8. Requirement to Pay Rent Until Appraisal Completed
Until the Fair Market Value of the Property has been
determined and the Minimum Rent has been re- established, if
applicable, accordingly, Tenant shall pay to Landlord the Annual
Adjusted Rent or any applicable Percentage Rent otherwise due
for the preceding twelve months. When the Fair Market Value
has been determined and Minimum Rent has been re- established in
accordance with Section 3.5.1. and 3.5.2. hereof, Tenant shall
pay to Landlord the difference, if any, between the Annual
Adjusted Rent or any applicable Percentage Rent paid during such
period and the amount which would have been paid had the Minimum
Rent been adjusted on or prior to July 1 of 2003, 2023, and
2043.
3.10. No Setoff
Tenant covenants to pay the Rent and the Additional Rent
(as defined below in Section 3.11) reserved by this Article 3
together with other sums which may become due hereunder or be
payable by Tenant under this Lease, at the times and in the
manner provided in this Lease without notice or demand, without
abatement, deduction, or setoff. The Rent, the Additional Rent
(as defined hereinafter) and other amounts required to be paid
by Tenant hereunder, are sometimes collectively referred to as,
and shall constitute "Rent ".
21
3.9.5. Disagreement on-Valuations /Difference Less than 10%
If the two appraisers do not concur as to the Fair Market
Value of the Property and the difference between the higher and
lower .appraisals is, in each case, an amount less than ten
percent (lot) of the higher appraisal, then the difference shall
be split by taking the average thereof and said amount shall be
the Fair Market Value for the purposes of sections 3.5.1. and
3.5.2.
3.9.6. Disagreement on Valuations /Difference 10% or Greater
3.9.6.1. Negotiation
If the two appraisers do not concur as to the Fair
Market Value of the Property and the difference between the two
appraisals is an amount equal to or greater than ten percent
(10 %) of the higher appraisal, then the parties shall endeavor
to agree upon the Fair Market Value. If Landlord and Tenant
are unable to agree upon the Fair Market Value on or before a
date which shall be forty -five (45) days following the rendering
of the last appraisal (the "Negotiation Period "), then the Fair
Market Value shall be established in accordance with the
procedure described below.
3.9.6.2. Third ADDraisal _
If at the expiration of the Negotiation Period
specified above the two parties do not concur as to the Fair
Market Value, then the two appraisers shall jointly agree on the
appointment of a third real estate appraiser meeting the
qualifications stated above. The third appraiser shall
determine the Fair Market Value of the Property as of January
1 of the respective year in the manner specified herein, and
shall render the appraisal (with copies thereof showing the
basis therefor) within sixty (60) days after said appraiser has
been appointed. The costs related to the selection and services
of the third appraiser shall be borne equally by the'Tenant and
Landlord. This third appraisal shall control. The Fair Market
Value for purposes of Sections 3.5.1. and 3.5.2. shall be as
determined by this appraisal.
3.9.7. Certification by Appraisers
Each appraiser shall certify that he /she has personally
inspected the Property and all properties used as comparisons,
20
• 40
appraiser to reappraise the Property for the purpose of
determining the Fair Market Value of the Property as of January
1 of that year. The appraisers shall be members of the American
Institute of Real Estate Appraisers or any successor thereto or
the Society of Real Estate Appraisers or any successor thereto
(or in the event the American Institute or Society of Real
Estate Appraisers or any successor shall not then be in
existence, independent and impartial real estate appraisers
having appropriate qualifications to appraise commercial real
estate). The appraisers shall have at least seven (7) years
full -time commercial real estate appraisal experience in the
County of San Luis Obispo. The appraisers selected by Landlord
and Tenant shall be impartial to any of the Parties hereto, or
their successors.
3.9.2. Cost of Appraisal
Landlord shall pay for the cost of the services performed
by the appraiser appointed by Landlord; Tenant shall pay for the
cost of the services performed by the appraiser appointed by
Tenant. The appraisers shall determine the Fair- Market Value
of the Property as of January 1 of the respective years and
shall render the appraisals (with copies thereof showing the
basis therefor) within sixty (60) days after said appraisers
have been appointed.
3.9.3. Valuation Standards
The appraisers shall value land and improvements, valued
at their highest and best use, less the actual value of the
improvements thereon, except as to Landlord's reversionary
interest therein. It is the parties' intent that the property
be valued as if the improvements in place were in a first class,
well maintained condition. If the improvements are in such a
condition, then by deleting the value of the improvements, the
appraisers will be valuing land only. However, if the
improvements are not in a first class, well maintained
condition, the deletion of the actual value of the improvements
will result in a fair market value which equals land value plus
the difference between the optimum and actual value of the
improvements.
3.9.4. Concurrence on Value
If the two appraisers concur on the Fair Market Value for
the Property, said amount shall be Fair Market Value of the
Property for purposes of Sections 3.5.1. and 3.5.2.
19
C O
3.8.3. Statement of-Gross Revenues
Tenant shall furnish to Landlord a statement of Tenant's
Modified Gross Revenues within ninety (90) days after the and
of each calendar year. Each statement shall be signed and
certified to be correct by an officer of Tenant. Tenant shall
keep full and accurate books of account, records, cash receipts,
and other pertinent data showing its Gross Revenues and Modified
Gross Revenues. Such books of account, records, cash receipts
and other pertinent data shall be kept for a period of thirty
(30) months after the end of each calendar year.
Landlord shall be entitled during the term and within
thirty (30) months after expiration or termination of this Lease
to inspect and examine all Tenant's books of account, records,
cash receipts, and other pertinent data, so that Landlord can
ascertain Tenant's Modified Gross Revenues. Tenant shall
cooperate fully with Landlord in making the inspection.
Landlord shall keep any information gained from such statements
or inspection confidential and shall not disclose it other than
to carry out the purposes of this Lease to the extent Landlord
legally may do so.
Landlord shall have the right to audit Tenant's records
upon reasonable notice to Tenant. If the audit discloses that
Tenant understated Modified Gross Revenues by more than five
percent (5 %), then Tenant shall pay any additional rent to
Landlord plus the cost of the audit; otherwise, Landlord shall
bear the cost of any audit. Any payments required of Tenant
under this section shall be made within thirty (30) days after
receipt by Tenant of a copy of the audit report. Tenant shall
pay interest from the date payment was otherwise due to the date
Tenant makes payment on any additional amounts due at the Lease
Interest Rate as defined in Section 3.4. Landlord reserves the
right to require Tenant to perform or cause to be performed an
independent audit of any subtenant whose rent is based on any
percentage formula. If the audit of the subtenant(s) for any
calendar year discloses that Tenant understated Modified Gross
Revenues by more than five percent (5 %), then Tenant shall pay
any additional rent to Landlord plus the cost of the audit;
otherwise, Landlord shall bear the cost of any audit of
subtenant(s).
3.9. Determination of Fair market Value by Appraisal
3.9.1. Appointment and Qualification of Appraisers
One hundred eighty (180) days prior to July l of 2003, 2023
and 2043, Landlord and Tenant shall each appoint a real estate
18
improvements a subtenant would otherwise pay rent, "Gross
Revenues" shall mean gross revenues defined in Paragraph A
above, plus, for any space occupied by Tenant, Tenant shall be
deemed to pay the highest rent paid by a comparable user. In
the event the Parties cannot agree on what constitutes the
highest comparable rent paid by a comparable user, then
comparable rents shall be determined by binding arbitration
pursuant to Section 6.1.4.2.1., below. Comparable rents shall
be determined at five (5) year intervals. For purposes of this
section, if the Project Improvements are divided into
condominiums or similar ownership units, then the owner of any
such unit shall be considered a Tenant.
NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING
TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP
ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN
A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT
TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO
SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION TO NEUTRAL ARBITRATION.
Landlord's Initials Tenant's Initials
3.8.2. Definition of Modified Gross Revenues
"Modified Gross Revenues" shall mean Gross Revenues less:
1. Ad Valorem property taxes and insurance attributable
to the Property and the improvements thereon to the extent said
taxes and insurance are actual operating costs of Tenant and
not passed through to any subtenant; and
2. Any portion of an interest payment paid to service
Tenant's Leasehold Mortgage which exceeds twelve percent (12 %)
per year.
17
Minimum Rent established for the applicable extension period.
Said Annual Adjusted Rent,.,if applicable, shall be paid on or
before July 1. The Annual. Adjuste' Rent shall be computed
according to the following formula:
AAR = MR x MGR (new)
MGR (2003)
Where:
AAR = Annual Adjusted Rent to be computed and paid
for the preceding calendar year by July 1
( "Annual Adjustment Date ")
MR = Minimum Rent established under Section
3.5.1. in 2003
MGR(new)= Tenant's Modified Gross Revenues for the
calendar year immediately preceding the
Annual Adjustment Date
MGR(2003)= Tenant's Modified Gross Revenues for
calendar year 2003
3.7. Percentage Rent
Effective January 1, 1997 and continuing each year
thereafter, Tenant shall pay to Landlord as Project Rent the
greater of (a) six percent (6$) of the Modified Gross Revenues
from the Property (as defined in Section 3. 8, below) for the
previous calendar year or (b) the Scheduled Rent, Minimum Rent,
or Annual Adjusted Rent otherwise due for the previous calendar
year (hereafter, "Percentage Rent ").
3.8. Revenues
3.8.1. Definition of Gross Revenues /Arbitration of Disputes
A. Where Tenant Sublets Premises to Third Parties:
"Gross Revenues" shall mean the gross income derived
by Tenant from the operation of the Property and the
improvements thereon, as determined under the cash receipts and
disbursements method of accounting. "Gross Revenues" shall not
include any monies directly derived from on -site parking.
B. Where Premises are Owner Occupied:
For purposes of this section; where Tenant physically
occupies all or a portion of the Project Improvements for which
16
0 0
3.5.2. Minimum Rent Commencing January 1. 2023 and January
1. 2043
on January 1, 2023 and again on January 1, 2043, the
Minimum Rent shall be re- established and shall be for each year
in the succeeding twenty (20) year period or sooner expiration
of the Lease the greater of:
A. Nine percent (9 %) of the Fair Market Value of the
Property determined as of January 1, 2023 and January 1, 2043,
respectively (as defined below in Section 3.9);
B. The previously determined Minimum Rent;
C. The five (5) year average of Annual Adjusted Rent
(as defined in Section 3.6) computed by:
1. Comparing the Annual Adjusted Rents for each
of the last five calendar years immediately preceding the
January 1 date;
2. Disregarding the Annual Adjusted Rent for
the calendar year with the lowest total Annual Adjusted Rent;
3. Disregarding the Annual Adjusted Rent for
the calendar year with the highest total Annual Adjusted Rent;
4. Averaging the Annual Adjusted Rent for the
three remaining calendar years;
5. Multiplying the average determined in 4.
above by ninety percent (90 %).
For the purposes of this subparagraph C., Annual Adjusted
Rent shall mean rent as annually adjusted pursuant to the
paragraph entitled "Annual Adjusted Rent ", below.
3.6 Annual Adjusted Rent
Effective January 1, 2004, and annually on each January 1
thereafter (the "Annual Adjustment Date ") during the term of
this Lease, or any extensions thereof, Tenant shall pay the
greater of Minimum Rent, Percentage Rent (defined below), or
Annual Adjusted Rent. Annual Adjusted Rent shall be the Minimum
Rent established under Section 3.5.1. in 2003 as adjusted by the
cumulative percentage change in the Modified Gross Revenues (as
defined in Section 3.7) ; provided, however, said Annual Adjusted
Rent shall not be reduced below the Minimum Rent established for
the respective twenty year period (as determined on January 1,
2003, 2023, or 2043), pursuant to Section 3.5, above, or the
15
C C
3.4. Scheduled Rent
Commencing with the Scheduled Rent Commencement Date,
Tenant shall pay as Project Rent, Scheduled Rent, semi - annually
in advance, as set forth in the schedule below which corresponds
to the year within which the Scheduled Rent Commencement Date
falls, and for each scheduled year thereafter. Scheduled Rent
not paid when due shall bear interest at the prime rate plus one
percent (1t) (100 basis points) published from time to time by
the City of San Luis Obispo's primary operating bank, provided,
said interest rate shall not exceed the maximum amount allowed
under Article XV, Section 1 of the California Constitution, or
such other constitutional section or statute as may hereafter
establish a maximum interest rate (hereinafter "the Lease
Interest Rate "). Beginning in the year corresponding to the
year in which the Scheduled Rent Commencement Date falls, the
annual Scheduled Rent shall be as follows:
Year Annual Project Rent
1992
$90,000.00
1993
$90,000.00
1994
$90,000.00
1995
$108,500.00
1996
$125,000.00
1997
$143,000.00
1998
$161,500.00
1999
$181,500.00
2000
$202,500.00
2001
$215,000.00
2002
$227,500.00
3.5. Minimum Rent
3.5.1 Minimum Rent Commencing January 1. 2003
On January 1, 2003, Tenant shall cease paying Scheduled
Rent and shall for each year in the succeeding twenty year
period pay a minimum annual rent ( "Minimum Rent ") which shall
equal the greater of:
A. Two Hundred Forty Thousand Dollars ($240,000.00);
or
B. Nine percent (9 %) of the Fair Market Value of the
Property determined as of January 1, 2003 (as defined below in
Section 3.9).
14
0 o
with a branch office in California or remitted in a form that
is immediately collectable by Landlord.
3.1.3. Scheduled Rent Commencement. Date
The "Scheduled Rent Commencement Date" shall be the January
1 or the July 1 immediately following: (a) the issuance of a
Certificate of Occupancy for the Project Improvements by the
City; or (b) the expiration of two (2) years from the Effective
Date, except as extended by excusable delays hereunder;
whichever first occurs.
3.2. Construction Rent
For the period commencing on the Effective Date and ending
on the Scheduled Rent Commencement Date, the Tenant shall pay
to Landlord Construction Rent in the amount of Sixty -Five
Thousand Dollars ($65,000.00) per calendar year, semi - annually
in advance. Construction Rent may be prorated for the first
partial semi - annual payment, on a daily basis, if applicable,
based on Construction Rent of Sixty -Five Thousand Dollars
($65,000.00) per year and a 365 day year.
3.3. Project Rent
Project Rent is the rent for each calendar year of the
Lease which commences on the Scheduled Rent Commencement. Date
and is due for each remaining calendar year of the Lease. Any
portion of a calendar year at the expiration of the Lease shall
be prorated, on a daily basis, if applicable. Any Annual
Adjusted Rent or Percentage Rent unpaid at the expiration of the
Lease shall be paid within ninety (90) days of the expiration
of the term of this Lease. Project Rent is the greater of the
Scheduled Rent, Minimum Rent, Annual Adjusted Rent or Percentage
Rent, as defined below. Since the Annual Adjusted Rent and /or
the Percentage Rent are based on Modified Gross Revenues
(defined below), whether Annual Adjusted Rent or Percentage Rent
is greater than the Scheduled Rent or Minimum Rent paid for the
calendar year cannot be determined until after the close of the
calendar year in which the Modified Gross Revenues are received.
Therefore, if the Annual Adjusted Rent or Percentage Rent is
greater than the Scheduled Rent or Minimum Rent paid for the
calendar year, then Tenant shall pay Landlord the difference
between the Scheduled Rent or Minimum Rent paid, and the Annual
Adjusted Rent or Percentage Rent due, in a lump sum, on or
before July 1 following the close of the calendar year for which
the Annual Adjusted Rent or Percentage Rent was due.
13
C1 C
ARTICLE 2..
RNMEFAMO
The term shall commence at 12:01 a.m. on ,
199 =, the date the Tenant takes possession of the Property
(herein the "Effective Date ") and shall terminate at midnight
on the date fifty- fve,(55) years therefrom; however, Tenant
shall not take possession of the Property until such time as
Tenant satisfies all of the contingencies and conditions
precedent, set forth in the Predevelopment Agreement, and Tenant
pays the first annual or prorated Construction Rent (as set
forth below) . Tenant shall take possession no later than thirty
(30) days after close of the escrow set forth in the
Predevelopment Agreement. The parties shall insert the
Effective Date prior to the close of escrow set forth in the
Predevelopment Agreement.
ARTICLE 3
3.1. Payment of Rent
3.1.1. Agreement to Pay Rent
Tenant covenants and agrees -to pay .Landlord Construction
Rent or Project Rent, as defined below (collectively referred
to as "Rent ") as hereinafter set forth. Tenant shall pay Rent
to Landlord at the address for Landlord specified in Section
15.5 hereof, to the attention of City's Finance Director, or
such other person or department as Landlord may, from time to
time designate.
3.1.2. Method of Payment
Tenant shall pay Landlord Rent semi - annually in advance on
or before January 1 or July 1 of each year, except as otherwise
specifically provided, and all other sums payable under this
Lease, in such cash, coin or currency of the United States of
America as at the time of payment shall be legal tender for the
payment of public and private debts or by Tenant's corporate .
check or cashier's check or money order; provided, however, that
Landlord may terminate Tenant's right to pay by corporate check
hereunder in the event any such corporate check is dishonored.
Any payment of Rent that is not in cash shall be drawn on a bank.
12
"City of San Luis Obispo" is a chartered, municipal corporation
of the State of California.
"Completion Date" as defined in Section 6.1.5.1. hereof.
"Completion of Excavation" as defined in Section 1.6.9. hereof.
" Predevelopment Agreement" defined in Section 1.1.4. hereof.
"Construction Rent" as defined in Section 3.2. hereof.
"Court Street Property" as defined in Section 1.1.1. hereof.
"Developer" as defined in Section 1.1.2. hereof.
"Effective Date" as defined in Section 2.0. hereof.
"Fair Market Value" as defined in Section 3.9. hereof.
"Gross Revenues" as defined in Section 3.8.1. hereof.
"Hazardous Material(s)" as defined in Section 1.6.1. hereof.
"Impositions" as defined in Section 4.2. hereof.
"Initial Construction" as defined in Section 6.1.1. hereof.
"Landlord" defined in Section 1.3. hereof, and the initial
paragraph of this Lease.
"Leasehold Mortgage" as defined in Section 13.4.a hereof.
".Leasehold.Mortgagee" as defined in Section 13.4.b hereof.
"Minimum Rent" as defined in Section 3.5.1 hereof.
"Modified Gross Revenues" as defined in Section 3.8.2. hereof.
"Mortgagee" as defined in Section 13.4.b hereof.
"Negotiation Period" as defined in Section 3.9.6.1. hereof.
"Net Refinancing Proceeds" as defined in Section 14.1.c
hereof.
"Net Transfer Proceeds" as defined in Section 14.2.c hereof..
"Notice of Completion" as defined in Section 6.2.10. hereof.
"Operator" as defined in Section 5.3. hereof.
"Original Condition" as defined in Section 7.3.1. hereof.
"Parties" as defined in the initial paragraph of this Lease.
"PD1418" as defined in Section 1.1.3. hereof.
"Percentage Rent" as defined in Section 3.7. hereof.
"Project" defined in Section 1.1.4. hereof.
"Project Improvements" defined in Section 1.1.4. hereof.
"Project Rent" as defined in Section 3.3. hereof.
"Property" defined in Section 1.2. hereof.
"Real Property Taxes" as defined in Section 4.2. hereof.
"Refinancing" as defined in Section 14.1.b hereof.
"Retail Marketing Plan" as defined in Section 5.1. hereof and
Section 5.01(a)(7) of the Predevelopment Agreement.
"Rent" as defined in Section 3.1.1. hereof.
"Scheduled Rent" as defined in Section 3.4. hereof
"Scheduled Rent Commencement Date" as defined in Section 3.1.3.
hereof.
"Senior Leasehold Mortgage" as defined in Section 13.4.c.
hereof.
"Senior Leasehold Mortgagee" as defined in Section 13.4.d.
hereof.
"Transfer" as defined in Section 14.2.b. hereof.
"Taxing Authority" as defined in Section 4.2. hereof.
"Tenant" as defined in the initial paragraph of this Lease.
11
lieu fees shall be determined in accordance with the per space
fee set forth in Resolution -No. 6332 (1987 series) or such other
resolution or ordinance as may be in effect at the time the fees
are to be paid. Notwithstanding the foregoing, if Tenant
changes the uses after the Precise Plan is approved by the City
or the construction permit issues, which changes result in an
increase in the number of parking spaces required, Tenant shall
pay any additional parking -in -lieu fees or otherwise provide for
such additional parking prior to the issuance of a Certificate
of Occupancy.
1.11. Tenants Right of Entry for Testing Prior to Effective
Date
Upon execution of this Lease, but prior to the Effective
Date of this Lease (as defined in Section 2.0 below), Tenant and
its officers, agents and employees may enter in and upon the
Property for the purpose of making such inspections, surveys,
engineering studies, soils and geologic tests, including test
borings and soundings, and other studies as Tenant shall
determine to be reasonably necessary or desirable, provided
Tenant first obtains the written approval of the Public Works
Director, and provides such insurance or bonds as may be
reasonably required by the City. Tenant shall keep the Property
free and clear of all liens resulting from or attributable to
Tenant's activities on the Property prior to the Effective Date
of the Lease, and Tenant shall indemnify and hold Landlord, its
officers, boards and commissions, agents, employees and
attorneys, harmless from any damage, liability, cost or expense,
including attorney's fees, resulting from or attributable to
Tenant's activities on the Property..
If Tenant fails to take possession of the Property or this
Lease never takes effect, Tenant shall restore the Property to
substantially the same condition as existed prior to Tenant's
entry pursuant to this section.
1.12. Guide to Definitions
The following Terms as used in this Lease have the meanings
or references set forth below:
"Additional Rent" as defined in Section 3.11. hereof.
"Affiliate of Tenant" as defined in Section 14.1.d. hereof.
"Annual Adjusted Rent" as defined in Section 3.6. hereof.
"Base Rent" as defined in Section 3.1. hereof.
"CERCLA" as defined in Section 1.6. hereof.
"City" as defined in Section 1.3. hereof.
10
•
1.8. Possession of Property
Landlord shall deliver possession of
time as all the conditions of Section 6.03
Agreement and the conditions precedent
Predevelopment Agreement are satisfied.
O
the Property at such
of the Predevelopment
set forth in the
1.9. Project Improvements to be Constructed by Tenant
Tenant is leasing the Property as vacant and unimproved
land, with the obligation of constructing the Project on the
Property, and of constructing such Project Improvements that
can not by their nature be constructed on the Property, at such
location(s) as the City shall determine, all as in accordance
with the Planned Development Precise Plan.
Tenant understands and agrees that the obligation to
construct the Project and the Project Improvements described
herein is a material part of the consideration for this Lease.
Tenant shall cause to be constructed first class
improvements, including, at a minimum, the Project Improvements
and tenant improvements, and Tenant shall spend no less than Ten
Million Dollars ($10,000,000.00) on construction of said
improvements, exclusive of architectural, engineering, other
professional fees, financing fees, project management fees, and
other fees, charges and expenses not directly related to payment
for labor and materials on the Project, at Tenant's sole cost
and expense.
Tenant agrees to construct each of the Project Improvements
in the time, manner, and pursuant to the specifications and
schedules set forth therein in accordance with Ordinance 1135,
the Planned Development Precise Plan as approved by City, and
the plans and specifications which shall have been approved by
Landlord pursuant to Section 6.1, below. All such Project
Improvements and tenant improvements shall be at Tenant's sole
cost and expense. Tenant shall obtain any governmental approval
legally required to improve or alter the Property.
1.10. Parking: In -Lieu Fees
Tenant shall provide for parking for the Project pursuant .
to the Planned Development Precise Plan to be approved by the
City Council. Tenant agrees that if it is required to pay
parking -in -lieu fees as a result of the Council's approval of
the Precise Plan, Tenant shall pay any such fees, in cash, in
a lump sum within forty -five (45) days of the Effective Date,
as determined in Section 2.0. The amount of said parking in-
Z
0 0
substances or materials remained on the Property as of the date
of the Remediation Closure Report; or (2) migrated to the
Property as a result of activities at a location other than the
Property by anyone other than Tenant or Tenant's agents,
employees, subtenants, licensees, concessionaires, contractors,
successors or assigns, or (3) are native materials which
materials were identified in the soils, geotechnical or other
certified report and which report is completed prior to the
completion of construction and delivered to Landlord prior to
issuance of Certificate of Occupancy. With regard to those
substances or materials that were tested and identified in the
Remediation Closure Report, and which remain on the Property as
of the date of the Remediation Closure Report, then Landlord
shall indemnify Tenant against and hold Tenant harmless from any
and all claims, etc., described in the immediately preceding
sentence, arising from the continued presence of said materials
or substances on the Property, but only in the amount and to the
extent that such substances or materials remained on' the
Property as of the date of the Remediation Closure Report.
Neither party shall be liable to the other party for any
substance or material which migrates to the Property as a result
of activities by third.parties off -site.
Nothing in this Section 1.6 shall be construed to limit
Tenant's liability to Landlord for the receipt, handling, use,
storage, accumulation, transportation, generation, release,
discharge or disposal ( "receipt, etc. ") of any toxic or
Hazardous Material which occurs in, on or about the Property as
a result of any of Tenant's or Tenant's _agents'. employees',
successors' or assigns', or subtenants' activities on the
Property. Tenant shall notify Landlord within five (5) days of
any receipt, etc., of any toxic or Hazardous Material on the
property by Tenant or Tenant's agents, employees, successors or
assigns or subtenants, licensees, concessionaires or
contractors, and each of Tenant's subleases shall contain a
similar provision.
1.7. Archaeological Materials
In the event the Property is determined to be of possible
archeological or historical significance as addressed or defined
in the Environmental Impact Report, Tenant shall be responsible
for payment of any and all expense associated with inspections,
studies and /or excavations related thereto. Any delay resulting
from archeological inspections, studies and /or excavations shall
constitute an excusable delay under this Lease. As between
Landlord and Tenant, or anyone acting on behalf of or for
either,. Landlord shall be the owner of any and all
archaeological artifacts found on the Property.
8
• O
Materials to an off site location, obtain and pay for a site for
off site remediation, and finally dispose of the soil after
remediation. If on site remediation is not permitted under
applicable law, then Landlord shall bear all costs of off site
remediation, subject to the provisions of Section 1.6.4.
1.6.7. Tenant Removal Responsibilities
Tenant shall remove, at its sole cost, any material,
substance or object that is not a Hazardous Material which is
required to be removed in the course of construction. Tenant
shall be responsible for any environmental or other damages
resulting from its damage to any tank or other container
containing Hazardous Materials.
1.6.8. Procedure on Discovery of Hazardous Material
While conducting the excavation of the property, should
Tenant discover a potentially Hazardous Material problem, Tenant
shall immediately notify Landlord, begin an environmental
survey, and if necessary, remedial investigation and remediation
of any Hazardous Material.
1.6.9. Liability
As of the date upon which Tenant completes excavation on
the Property, as determined by the City Engineer ("Completion
of Excavation ") , or the date of the Remediation Closure Report,
whichever first occurs, Tenant shall assume all risk that
adverse physical and environmental conditions may not have been
revealed by Tenant's own investigations, except as otherwise
specifically provided in this Agreement. As of the Completion
of Excavation or the date of the Remediation Closure Report,
whichever first occurs, Tenant shall indemnify Landlord (defined
as Landlord, its City Council, board and commissions, officers,
agents, servants, employees, and attorneys) against and hold
Landlord harmless from any and all claims (including third party
claims), demands, environmental damages (as defined in Exhibit
"C ") , liabilities, damages, costs and expenses (including
reasonable attorney's fees and costs of investigation and
cleanup) , penalties, fines, losses (including without limitation
diminution in the value of the Property or the improvements
thereon) of whatever kind or nature resulting from or in any way
connected with any Hazardous Materials thereafter found to be
located in, on, under or about the Property, excluding only
those substances or materials that (1) were tested and
identified in the Remediation Closure Report and then only in
the approximate amount and to the approximate extent that such
7
$100,000.00. Tenant shall bear all costs of Remedial
Investigation, defined in Section 1.6.5., up to and including
one Hundred Thousand Dollars ($100,000.00). If the cost of
Remedial Investigation exceeds $100,000.00, then Landlord and
Tenant shall each pay one -half of the cost of Remedial
Investigation in excess of $100,000.00. The parties agree that
the costs of remediation and remedial investigation shall
include only actual costs incurred by Tenant, and shall not
include any charge for Tenant's overhead or other markup.
Nothing in this section shall be construed to obligate Landlord
to remove any non- hazardous substance, material or object from
the Property. Tenant shall remove, at its sole expense, any
tank or other container containing inert or concrete material
or any material other than a Hazardous Material.
1.6.5.
The " remediation of any Hazardous Material" means the
performance of any cleanup,.remediation, or containment of any
Hazardous Material., including the removal of any tank containing
a Hazardous Material, payment of all power and utility costs,
and any and all taxes or fees applicable to such activities and
preparation of the remedial plan and Remediation Closure Report.
The Remediation Closure Report shall identify all Hazardous
Materials tested, identified and /or remediated. " Remediation
of any Hazardous Material" does not include any Remedial
Investigation. "Remedial Investigation" means the remedial
investigation of the environmental condition of the Property,
including but not limited to any environmental survey of the
Property, investigations to determine the nature and extent of
any contaminated plume of Hazardous Material, including but not
limited to the drilling of test wells on the Property, the
preparation of any feasibility studies, reports, or plans,
including preliminary alternatives for remedial actions and
preliminary technical and cost analysis of the alternatives.
Payment of costs incurred in connection with such "remediation
of any Hazardous Materials" or "Remedial Investigation" shall
be in accordance with the provisions of Section 1.6.4.
1.6.6.' Right to Re-mediate on Site
Landlord retains the right to remediate Hazardous Materials
on site if the cost to remediate on site is less than the cost
to remediate off site. If Landlord has the ability under
Applicable law to remediate on site, Tenant may still choose to
remediate off site; provided, Landlord shall not pay any
additional costs caused by said off site remediation, and Tenant
shall, at Tenant's sole expense, transport any Hazardous
6
The parties will cooperate with each other and their
respective consultants and make- reasonable efforts to supply
each other and their respective consultants with such historical
and /or operational or other information as each possesses
pertaining to Hazardous Materials on the Property; provided
neither party shall be liable for any unintentional or negligent
failure to supply such cooperation or information. If
remediation of any Hazardous Materials (defined in Section
1.6.5.) is required, Tenant shall consult with Landlord in the
selection and hiring of any consultants) required to effectuate
the remediation of any Hazardous Material to assure that any
Hazardous Material is properly cleaned up or removed, in the
most cost effective manner. Landlord shall have the right to
veto any proposed consultant within five (5) business days of
receipt of notice of the identity of any proposed consultant or
scope or nature of the proposed remediation. Tenant shall
provide Landlord with copies of all drafts, correspondence,
studies, reports, remedial plans, alternatives, or other
documentation relating to the Remedial Investigation or
remediation of any Hazardous Material immediately upon receipt
of the same. Landlord shall have the opportunity to participate
in any and all conferences or meetings with consultants and
others involved in the remedial investigation or remediation.
1.6.3. Tenant - Investigation
Tenant shall conduct its own investigation of the physical
and environmental conditions of the Property, including
subsurface conditions, prior to and during excavation on the
Property. Tenant and its consultants are hereby authorized to
enter upon the Property to conduct investigations and to perform
testing, and take samples as deemed reasonably necessary by its
consultants to complete an environmental survey, in accordance
with the provisions of Section 1.11.
1.6.4. Costs of Remediation and Remedial Investigation
In the event that any Hazardous Material is found to be
located in, on, under or about the Property prior to or during
excavation by Tenant, the removal of or remediation of which is
required by law applicable at the time said Hazardous Material
is discovered, Tenant agrees to effectuate the remediation of
any Hazardous Material (defined in Section 1.6.5.); and Landlord
shall reimburse Tenant for all .costs of remediation up to and
including One Hundred Thousand Dollars ($100,000.00) within
thirty (30) days receipt of invoices. If the costs of said
remediation exceed $100,000.00, then Tenant and Landlord shall
each pay one -half of the costs of remediation in excess of
5
�1
and federal laws, ordinances and regulations governing and
regulating the use of the Property, including specifically the
City of San Luis Obispo Municipal Code, the resolutions,
ordinances or other actions of the City pertaining to the court
Street Property or the Project or Project Improvements, and any
covenants or restrictions of record, and accepts this Lease
subject thereto and to all matters disclosed thereby, and by any
exhibits attached hereto. Tenant acknowledges that neither
Landlord nor Landlord's agents have made any representation or
warranty as to the present or future suitability of the Property
for the conduct of Tenant's business. Tenant further
acknowledges that an underground drainage culvert is in the
immediate vicinity of the Property, the exact location of which
is unknown to the Parties. Tenant agrees to protect the culvert
during construction, and at all times during the Lease or any
extension thereof, from damage caused by Tenant or any agent of
Tenant. Tenant agrees to repair, support, maintain, or
reconstruct the culvert., or any part of it, that Tenant or any
agent of Tenant damages during construction of the Project or
at any time during the Lease or any extension thereof.
Landlord shall deliver possession of the Property to Tenant
clear only of the existing parking meters. Except as provided
in this section and in Section 1.6, Landlord leases the Property
to Tenant in an "as is" condition. Tenant shall, at Tenant's
sole cost and expense, take such action as may be necessary to
make the Property suitable for development by Tenant.
1.6. Hazardous Materials
1.6.1. Disclosure
A review of title to the Property and of certain maps and
photographs of the Property indicates that the Higuera Street
frontage of the Property, may have been the site of an
automobile service station(s) prior to Landlord's acquisition
of the Property. Landlord has not conducted any other
investigation as to any previous uses of the Property and makes
no. representations or warranties with regard to any uses
predating Landlord's acquisition of the Property. Landlord has
no actual knowledge concerning the presence or absence of
underground fuel storage tanks on the Property, or any release
of any hazardous materials (as defined hereinafter in Exhibit
"C") or any petroleum constituents (hereinafter collectively
referred to as "Hazardous Materials ") into the soil or ground
water.or other water that may have occurred as a result of any
such underground fuel storage tanks, or for any other reason,
anywhere on the Property.
1.6.2. Mutual Cooperation
4
that portion of Court Street which is actually vacated or
abandoned by the City (or the subject of issuance of a valid
encroachment permit) and which is approved for development under
the Planned Development.Precise Plan.
1.3. Distinctions Between Approvals Required of Landlord and
Those of City
The Parties understand and agree that those approvals
required of Landlord acting as Landlord under this Lease are
separate and distinct from those approvals required by the City
acting in its governmental or regulatory capacity. Any
reference to Landlord herein is to the City of San Luis Obispo
acting as "Landlord" herein, and any reference to "the City"
herein is to the City of San Luis Obispo acting in its
governmental or regulatory capacity.
Notwithstanding anything to the contrary set forth in this
Lease, nothing shall be interpreted or construed as Landlord,
by reason of its being a municipal corporation, in any way
waiving or weakening any regulatory or police power in any of
its governmental capacities. It is intended hereby that Tenant
shall be obligated to fulfill such requirements as may be
imposed by any governmental agency or authority of the City
having or exercising jurisdiction over the Property or over any
construction to be undertaken by Tenant in, on or about said
Property.
1.4. Lease
For and in consideration of the payment of Rent, as herein
defined, and certain other forms of compensation also defined
herein, and the performance of all the covenants and conditions
of this Lease, Landlord hereby leases and demises to Tenant, and
Tenant hereby leases and hires from Landlord, the Property, for
the term and upon the covenants and conditions set forth herein;
provided Landlord's agreement to lease to Tenant is contingent
upon Tenant not being in default under the Predevelopment
Agreement, and that all of the contingencies and conditions
precedent, if any, set forth in the Predevelopment Agreement
have occurred.
1.5. Condition of Property
Subject to the provisions of Section 1.6, below, Tenant
hereby accepts the Property in its condition existing as of the
Effective Date of this Lease, as defined in Section 2.0 herein,
and subject to all applicable zoning, municipal, county, state
3
C�
.�D
1.1.3. Protect Approvals Prior to Execution of Lease
On July 5, 1988, the City conceptually approved the Court
Street Property use program and building design as proposed by
Tenant. In 1989, the City adopted Ordinance No. 1135 (1989
Series) which certified the final Environmental Impact Report,
amended the city's zoning map, and approved the planned
development preliminary plan ( "PD1418 ") for Court Street
Property-
1.1.4. Predevelopment.Aareement
To implement development of the Court Street Property,
Landlord (as the City) and Tenant (as the Project Developer)
entered into a Predevelopment Agreement and Agreement.to Lease,
dated as of , 1990 (the " Predevelopment
Agreement "). Pursuant to the Predevelopment Agreement, the City
(Landlord hereunder) agreed to lease the Property (as defined
in Section 1.2) upon the occurrence or satisfaction of certain
conditions precedent, to the Project Developer (Tenant
hereunder) for the development of a first class, mixed use
commercial project known as the Court Street Property Project
(hereinafter called "the Project "). In the Predevelopment
Agreement the Project Developer (Tenant hereunder) has agreed
to construct the Project together with certain public
improvements serving and benefiting the Project, in accordance
with the terms and conditions of Ordinance No. 1135, as said
terms and conditions may be modified, refined or altered by the
final development plan for the planned development (to be
submitted by Tenant and approved by City) (hereinafter "Planned
Development Precise Plan" or "Precise Plan ") and by the plans
and specifications for the Project, which shall have been
approved by Landlord pursuant to Section 6.1, below
(collectively hereinafter called the "Project Improvements ").
The parties, as of the date of execution of the Lease, envision
the Project as a five story building plus two levels of
underground parking.
1.2. Property
Landlord owns the real property commonly known as 999
Monterey Street, in the City of San Luis Obispo, County of San
Luis Obispo, State of California, as more particularly described
in Exhibit "A ", attached hereto and incorporated herein by this
reference; together with a certain easement or fee interest for
public right of way purposes, in Court Street, between Monterey
and Higuera Streets, in the City of San Luis Obispo, County of
San Luis Obispo, State of California, which is proposed to be
vacated by City, as more fully described in Exhibit "B" hereto,
herein jointly called the "Property." The "Property" includes
01
o -•
GROUND LEASE
THIS GROUND LEASE (the "Lease") dated for reference
purposes as of this . . day of 1990, is
made and entered into by and between the CITY OF SAN LUIS
OBISPO, a chartered municipal corporation of the State of
California, (hereinafter called "Landlord "), and
(hereinafter called "Tenant ").
Landlord and Tenant (collectively hereinafter the "Parties ")
hereby agree as follows:
ARTICLE 1
1.0. PROPERTY AND BACKGROUND.
1.1. Overview.
p..
1.1.1 Purpose of Development
In order to promote the public health, safety and general
welfare, and to provide public amenities and public open space,
and to enhance retail, office and recreational opportunities in
the downtown, the City of San Luis Obispo (hereinafter sometimes
referred to as "City ") sought development of a mixed use
commercial project on a parcel of city -owned property at 999
Monterey Street in the City of San Luis Obispo, bounded by Court
Street, Monterey Street, Higuera Street, and Osos Street
(hereinafter called "the Court Street Property ").
1.1.2. Selection of Developer
By Resolution No. 5575 (1984 Series) the City approved a
recruitment process and work program leading to development of
the Court Street Property, which included the issuance of a
Request for Qualifications. By Resolution No. 6030 (1986
Series), the City authorized staff to negotiate with Glenborough
Corporation, a California corporation, Frank A. Morrow dba Frank
A. Morrow and Associates, and Sykes Group, a California
corporation (hereinafter collectively "the Developer ") and
authorized the Mayor to sign an exclusive negotiation agreement
with Developer for development of the Court Street Property
which was executed on September 6, 1986 (substituting only
Interwest Investment Group, a California corporation, for Sykes
Group). Tenant is the successor in interest to Developer.
1
LIST OF EXHIBITS
Exhibit A - Legal Description of 999 Monterey Street
Exhibit B - Legal Description of Court Street
Exhibit C - Hazardous Materials
Exhibit D - Audited Development Costs
vi
C
15.7.
Surrender
72
72
15.8.
15.9.
Binding ..
Landlord's Right to Enter Premises . . .
. . . . . . . . .
72
15.10.
Disclaimer of Partnership . . .
73
15.11.
Recordation, Memorandum . . . .
73
15.12.
Quitclaim . . . . . . . . . . . . . . . .
. . . . . .
73
73
15.13.
headings
.
74
15.14.
Covenants and Conditions
15.15.
Integration . . . . . . . . . . . . . . .
. . . . . . . . .
74
74
15.16.
Estoppel Certificate
. . . .
15.17.
Severability; Invalidity of Particular Provision . . .
74
15.18.
Interpretation and Venue . . . . . .
. . . . . . . . .
75
15.19.
Review by Counsel . . . . . . . . . . . .
. . . .
75
75
15.20.
Time of Essence . . . . . . . . . . . .
. , . . .
75
15.21.
Brokers . . . . . . . . . . . . . . . . .
. . . . . . . . .
76
15.22.
Restrictions on Delivery Hours and Access
. . . . . . . . .
15.23.
Easements and Reservations . . . . . . .
.
76
15.24.
Non - Merger of Fee and Leasehold Estates
76
15.25.
Counterparts . . . . . . . . . . . . . .
. . . . . . . . .
76
LIST OF EXHIBITS
Exhibit A - Legal Description of 999 Monterey Street
Exhibit B - Legal Description of Court Street
Exhibit C - Hazardous Materials
Exhibit D - Audited Development Costs
vi
v
0 0
ARTICLE 11 . . . . . . . . . . . . . .
54
11.0.
ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . .
54
11.1.
11.2.
.
General . . . . . . . . . . . . . . . . . . . . . .
Notification of Proposed Assignment
54
11.3.
. . . . . . . . .
Permitted Assignments and Transfers . . . . . . . . . • .
55
55
11.4.
Subletting
11.5.
Subleases Subordinate to Lease . . . . . . . . • .
56
57
11.6.
Changes in Interest in Tenant . . . . . . . . . . . . . . .
57
ARTICLE12 . . . . . . . . . . .
58
12.0.
TENANT DEFAULTS AND LANDLORD'S REMEDIES . . . . . . .
58
12.1.
Defaults by Tenant . . . . . . . . . . . . . . . • .
58
12.2.
Remedies on Default . . . . . . . . . . . . . . . . .
60
12.2.1. Termination . . . . . . . . . . . . . .
. . . . . .
60
12.2.2 Re -entry Without Termination . . . . . .
60
12.2.3. Termination after Reletting . . . . . . . . . . . .
61
12.2.4. Termination of Predevelopment Agreement . . . . . .
61
12.2.5. Landlord's Right to Cure Tenant's Default . . .
61
12.2.6. Tenant's Personal Property . . . . . . . . . . • •
61
12.2.7. Assignment of Subrents . . . . . . . . . .
62
12.2.8. Landlord Right to Assume Tenant Interest . . . . .
62
12.2.9. Termination and Remedy in Damages . . . . . . . . .
63
ARTICLE 13 . . . . . . . . . . . . . .
63
13.0.
FINANCING PROVISIONS . . . . . . . . . . . . . . . . . . .
63
13.1.
Leasehold Mortgage Authorized; Fee Not Subordinated . .
63
13.2.
Subordination of Rent . . . . . . . . . . . .
64
13..3.
.
Notice to Landlord . . . . . . . . . . . . . . . .
65
13.4.
.
Definitions
13.5.
. . . . . . . . . . . . . . . . . . . . .
Contents of Notice, Leasehold Mortgage . . . . . . . . . .
65
66
13.6.
Request for Notice of Default for Landlord's Protection . .
66
13.7.
Default Notice . . . . . . . . . . . . .
66
13.8.
Mortgagee Request for Lease Changes . . . . . . . . . . . .
67
ARTICLE 14 . . . . . . . . . . . . . .
67
14.0.
REFINANCING OR TRANSFER . . . . . . . . . . . . .
67
14.1.
Refinancing . . . . .
14.2.
. . . . . . . . . . .
Transfer
67
. . . . . . . . . . . . . . . . . . . . . . . . .
68
ARTICLE 15 . . . . . . . . . . . .
69
15.0.
MISCELLANEOUS . . . . . . . . . . . . . . . . .
69
15.1.
Holding Over . . . . . . . . . . . . . . . . . . . .
69
15.2.
Attorneys' Fees . . . . . . . . . . . . . . . . . . .
70
15.3.
Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . .
70
15.4.
Force Majeure
15.5.
. . . . . . . . . . . . . . . . .
Notices
70
15.6.
. . . . . . . . . . . . . . .
Waiver .
71
. . . . . . . . . . . . . . . . . . . . . . . .
71
v
iv
7.4
Removal Upon Expiration or Sooner Termination . . . . . . .
44
7.4.1. Option for Restoration or Removal . . . . . . . . .
44
7.4.2. Removal /Ownership of Personal Property at
Termination . . . . . . . . . . . . . .
44
7.4.3. Removal of Personal Property During Term . . . . .
44
7.4.3.1. Tenant Right to Remove . . . . . . . . . .
44
7.4.3.2. Personal Property not Removed by Tenant
45
ARTICLE 8 . . . . . . . . . . . . . .
45
8.0. UTILITIES
. . . . . . . . . . . . . . . . . .
45
ARTICLE 9 . . . . . . . . . . . . . .
45
9.0. INSURANCE AND INDEMNITY . . . . . . . . . . . . . . . . . . . .
45
9.1.
Indemnity . . . . . . . . . . . . . . . . . . . . . . . . .
45
9.2.
Insurance . . . . . . . . . . . . . . . . . . . . . . . .
46
46
9.3.
Liability Insurance . . . . . . . . . . . . . . . . . . . .
47
9.4.
Fire and All Risk . . . . . . . . . . . . .
9.4.1. Tenant Duty to Insure
47
9.4.1.1. Proceeds of Fire and Extended Coverage
Insurance . . . . . . . . . . . . . .
47
9.4.1.1.1. Excess Proceeds to Go to
Tenant . . . . .
48
9.4.1.1.2. Payment dependent on Major
Versus Minor Damage . . . . . .
48
9.4.1.1.3. Major and Minor Distinguished .
49
9.5.
Builder's Risk and Course of Construct -ion . . . . . . . . .
49
9.6.
Worker's Compensation . . . . . . . . . . . . . . . . .
49
50
9.7.
Errors and Omissions /Professional Liability Insurance . . .
9.8.
Boiler and Unusual Hazards and Other Insurance . . . . . .
50
9.9.
Flood Insurance . . . . . . . . . . . . . . . . . . . . . .
50
9.10.
Earthquake Insurance . . . . . . . . . . . . . .
50
9.11.
Subrogation Waiver . . . . . . . . . . . . . . . . . . . .
50
9.12.
Proof of Coverage . . . . . . . . . . . . . . . . . . . . .
51
51
9.13.
Periodic Review of Insurance . . . . . . . . . . . . . . .
9.14.
No Termination on Destruction or Damage . . . . . . . . . .
52
9.14.1. Tenant Obligation to Rebuild . . . . . . . . . . .
52
9.14.2. Uninsured Damage . . . . . . . . . . . .
52
9.14.3. Waiver of Right to Terminate Upon Destruction . . .
53
9.14.4. Procedures for Repair and Restoration . . . . . . .
53
9.15.
Definition of Landlord . . . . . . . . . . . . . . . . . .
53
9.16.
Definition of Tenant . . . . . . . . . . . . . . . . . . .
53
ARTICLE 10 . . . . . . . . . . . . . .
53
10.0.
CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . .
53
10.1.
Just and Equitable Division . . . . . . . . . . . . . . .
53
10.2.
Allocation of Award . . . . . . . . . . . . . . . . . . . .
54
iv
iii
C •
6.1.2.
Approval of Plans . . . . . . . . . . . . .
30
6.1.3.
Requirement to Bond . . . . . . . . . . . . . . . .
30
6.1.3.1. Construction and Bonding . . . . . . . . .
30
6.1.3.2. Bonds Satisfactory to Landlord . . . . . .
31
6.1.3.3. Performance Bond . . . . . . . . . .
31
6.1.3.4. Labor and Materials Bond . . . . . .
31
6.1.4.
Completion . . . . . . . . . . . . . . . . . . .
31
6.1.4.1. Completion of Improvements . . . . . . . .
31
6.1.4.2. Failure to Substantially Comply With
Plans and Specifications . . . . . . . . .
32
6.1.4.2.1. Arbitration of
Disputes /Material Changes or
Substituted Materials . . . . .
32
6.1.4.2.2. Material Changes . . . . . . .
33
6.1.4.2.3. Substitution of Materials .
34
6.1.4.3. Termination for Failure to Complete
Construction . . . . . , . , . . . . . . .
34
6.2.
Construction Standards . . . . . . . . . .
35
6.2.1.
General Construction Standards . . . . . . . . .
35
6.24.
Permits . . . .
35
6.2.2.1. Tenant Required to Obtain.Permits
35
6.2.2.2. Landlord Not Regulator . . . . . . .
36
6.2.2.3. Tenant to Pay Customary Fees
36
6.2.3.
Compliance with Approvals and Standards . . . . . .
36
6.2.4.
Utility Work
37
6.2.5.
Use of Plans
38
6.2.6.
Compliance with Laws; Issuance of Permits . . . . .
38
6.2.7.
Construction Safeguards . . . . . . . . . . .
38
6.2.8.
Landlord's Cooperation . . . . . . . .
38
6.2.9.
Rights of Access During Construction . . . . . . .
39
6.2.10.
Notice of Completion . . . . . . .
39
6.3.
Additional
Construction on Property . . . . . . . . . . . .
39
6.3.1.
Construction Standards . . . . . . . . . . .
39
6.3.2.
Landlord's Approval . . . . . . . . . .
40
6.4.
Protection
of Landlord . . . . . . . . . . . . . . .
40
6.4.1.
No Implied Consent of Landlord . . . . . . . . .
40
6.4.2.
Property to be Free of Liens . . . . . . . . . .
41
6.4.3.
Procedure if Lien Recorded . . . . . . . . .
41
6.5.
Notice
. . • . . .
42
6.6.
Removal
and Demolition During Term . . . . . . . . . .
42
ARTICLE 7 . . . . . . . . . . . . . .
42
7.0. OWNERSHIP
OF IMPROVEMENTS AND PERSONAL PROPERTY . . . . . . . . .
42
7.1.
Ownership of Improvements During Term . . . . . . . . . . .
42
7.2.
Tenant's Rights End at Termination . . . . . . . . . . . .
42
7.3.
Failure
to Complete Initial Construction . . . . . . . . .
43
7.3.1.
Option to Require Removal . . . . . . . . . .
43
7.3.2.
Time for Removal . . . . . . . . . . . . . .
43
7.3.3.
Restoration to Original Condition . .
43
7.3.4.
Tenant Bears Cost of Restoration Removal
43
iii
3.6
Annual Adjusted Rent . . . . . . . . . . . . . . . . .
. . .
15
3.7.
Percentage Rent . . . I . . . . . . . . . . . . . . .
. . .
16
3.8.
Revenues . . . . . . . . . . . . . . . . . . .
. . .
16
3.8.1. Definition of Gross Revenues . . . . . . . .
. . .
16
3.8.2. Definition of Modified Gross Revenues . . . .
. . .
17
3.8.3. 'Statement of Gross Revenues . . . . . . . . .
. . .
18
3.9.
Determination of Fair market Value by Appraisal . . .
. . .
18
3.9.1. Appointment and Qualification of Appraisers .
. . .
18
3.9.2. Cost of Appraisal . . . . . . . . . . . . . .
. . .
19
3.9.3. Valuation Standards . . . . . . . . . . . . .
. . .
19
3.9.4. Concurrence on Value . . . . . . . .
. . .
19
3.9.5. Disagreement on Valuations /Difference Less than
10$ . . . . . . . . . . . . . . . . . .
3.9.6. Disagreement on Valuations /Difference 10$ or
20
Greater . . . . . . . . ..
20
3.9.6.1. Negotiation .'
20
3.9.6.2. Third Appraisal . . . . . . . . . .
. . .
20
3.9.7. Certification by Appraisers . . . . . .
. . .
20
3.9.8. Requirement to Pay Rent Until Appraisal Completed .
21
3.10.
No Setoff . . . . . . . . . . . . . . . . . . . . . .
. . .
21
3.11.
Additional Rent . . . . . . . . . . . . . . . . . . .
. . .
22
ARTICLE 4 . . . . . . . . . . .
. . .
22
4.0. TAXES
AND ASSESSMENTS . . . . . . . . . . . . . . . . . . .
. . .
22
4.1.
Personal Property Taxes . . . . ... . . . . . . . . .
. . .
22
4.2.
Real Property Taxes . . . . . . . . . . . . . . . . .
. . .
23
4.3.
New Assessments . . . . . . . . . . . . . . . . . .
. . .
24
4.4.
Tenant's Tax Liability Prorated . . . . . . . . . . .
. . .
24
4.5.
Additional Taxes . . . . . . . . . . . . . . . . . .
. . .
24
4.6.
Tax Contest . . . . . . . . . . . . . . . . . . . .
. . .
25
4.6.1. Tenant Right to Contest . . . . . . . . . . .
. . .
25
4.6.2. When Landlord Shall Join Contest . . . .
. . .
25
4.6.3. Contest Without Payment /Requirement of Bond .
. . .
25
ARTICLE 5 . . . . . . . . . . .
. . .
26
5.0. USE,
CHARACTER, OPERATION AND MAINTENANCE OF IMPROVEMENTS .
. . .
26
5.1.
.
General . . . . . . . . . . . .
. . .
26
5.2.
Modification of Retail Marketing Plan . . . . . . . .
. . .
26
5.3.
Operator /Landlord Rights . . . . . . . . . . . . . .
. . .
26
5.4.
No Discrimination . . . . . . . . . . . . . . . . . .
. . .
27
5.5.
Use Prohibition . . . . . . . . . . . . . . . . . . .
. . .
27
5.6.
General Standards of Maintenance . . . . . . . . . .
. . .
28
5.6.1. Tenant Responsible . . . . . . . . . . . . .
. . .
28
5.6.2. Enumerated Standards . . . . . . . . . . . .
. . .
28
5.7.
Governmental Requirements . . . . . . . . . . . . . .
. . .
29
ARTICLE 6 . . . . . . . . . . .
. . .
29
6.0. CONSTRUCTION AND LIENS . . . . . . . . . . . . . . . . . . .
. . .
29
6.1.
Initial Construction of Improvements . . . . . . . .
. . .
29
6.1.1. Tenant to Construct . . . . . . . . . . . . .
. . .
29
ii
o •
ARTICLE 1 . . . . . . . . . . . . 1
1.0. PROPERTY AND BACKGROUND . . . . . . . . . . . .
. . . . . . . . .
1
1.1.
Overview . . . . . . . . . . . . . . . .
. . . . . . . . .
1
1.1.1 Purpose of Development . . . . .
. . . . . . . . .
1
1.1.2. Selection of Developer . . . . .
. . . . . .
1
1.1.3. Project Approvals Prior to Execution of Lease . . .
2
1.1.4. Predevelopment Agreement . . . .
. . . . . . . . .
2
1.2.
Property . . . . . . . . . . . . .
. . . .
2
1.3.
Distinctions Between Approvals Required of Landlord and
Those of City . . . . . . . . . . . . . .
. . . . . . . . .
3
1.4.
Lease . . . . . . . . . . . . . . . . . .
. . . . . .. . .
3
1.5.
Condition of Property . . . . . . . . . .
. . . . . . . .
3
1.6.
Hazardous Materials . . . . . . . . . . .
. . . . . . . . .
4
-
1.6.1. Disclosure . . . . . . . . .
. . . . . . . . .
4
1.6.2. Mutual Cooperation . . . . . . .
. . . . . . . . .
5
1.6.3. Tenant Investigation . . . .
. . . . .
5
1.6.4. Costs of Remediation and Remedial
Investigation .
5
1.6.5. Remediation of Hazardous Material
. . . . . . . . .
6
1.6.6. Right to Remediate on Site . .
. . . . . . . . .
6
1.6.7. Tenant Removal Responsibilities .
. . . . . .
7
1.6.8. Procedure on Discovery of Hazardous Material . . .
7
1.6.9. Liability . . . . . . . . .
. . . . . . . . .
7
1.7.
Archaeological Materials . . . . . . . .
. . . . . . . . .
8
1.8.
Possession of Property . . . . . . . . .
. . . . . . . . .
9
1.9.
Project Improvements to be Constructed by
Tenant . . . . .
9
1.10.
Parking; In -Lieu Fees .
. .
9
1.11.
Tenant's Right of Entry for Testing Prior
to Effective
Date . . . . . . . . . . . . . .
. . . . . . . . .
10
1.12.
Guide to Definitions . . . . . . . . . .
. . . . . . . . .
10
ARTICLE 2 . . . . .
. . . . . . . . .
12
2.0 TERM .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . .
12
ARTICLE 3 . . . . .
. . . . . . . . .
12
3.0 RENT .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . .
12
3.1.
Payment of Rent . . . . . . . . . . . . .
. . . . . . . . .
12
3.1.1. Agreement to Pay Rent . . . . . .
. . . . . . . . .
12
3.1.2. Method of Payment . . . . . . . .
. . . . . . . . .
12
3.1.3. Scheduled Rent Commencement Date
. . . . . . . . .
13
3.2.
Construction Rent . . . . . . . . . . . .
. . . . . . . . .
13
3.3.
Project Rent . . . . . . . . . . . . . .
. . . . . . . . .
13
3.4.
Scheduled Rent . . . . . . . . . . . . .
. . . . . . . . .
14
3.5.
Minimum Rent . . . . . . . . . . . . . .
. . . . . . . . .
14
3.5.1 Minimum Rent Commencing January 1,
2003 . . . . . .
14
3.5.2. Minimum Rent Commencing January 1,
2023 and
January 1, 2043 . . . . . . . . .
. . . . . . . . .
15
i
k
C-
COURT STREET CENTER PROJECT
GROUND LEASE
between
CITY OF SAN LUIS OBISPO
and
o 0
COURT STREET CENTER PROJECT
GROUND LEASE
between
CITY OF SAN LUIS OBISPO
and
(Predevelopment Agreement - Attachment 3)
LEGAL DESCRIPTION
A parcel of land within the City of San Luis Obispo, State of
California commonly known as Court Street, a street 40 feet in
width, running between Monterey Street and Higuera Street more
particularly described as follows;
Parcel 1.
Court Street, a street 30 feet in width, shown. on the maps of the
City of San Luis Obispo and referenced in Deed recorded in Volume
J of Deeds on Page 232 recorded in the office of the County
Recorder of the County of San Luis Obispo, State of California.
Parcel.2.
A parcel of land 10 feet in width described in deed to the City
of San Luis Obispo recorded in Volume 7 of deeds at page 5,
recorded in the office of the County Recorder of the County of
San Luis Obispo, State of California.
wap.p /courtleg.wp
(Predevelopment Agreement - Attachment 2)
9.14 Entire Aareement.
This Agreement, together with its attachments
incorporated herein by reference, constitutes the entire
agreement between the Parties and there are no negotiations,
conditions, representations or agreements regarding the matters
covered by this Agreement which are not expressed herein.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on this 19th day of June , 1990 at San Luis
Obispo, California.
(Signatures to be acknowledged for recording)
Attest:
CITY LERK
Pam la Voges
(corporate seal)
lease.agm /vb
"CITY"
CITY OF SAN LUIS OBISPO
"PROJECT DEVELOPER"
Inter-west Investment Group
a California corporation
A � Qwlmf
By: W TOM Sykes, P sident
A -,
•
By: Marshall Och ski,
Secretary
-47-
part of this Agreement. The headings used herein are inserted
only as a matter of convenience and for reference, and in no
way define, limit or describe the scope or intent of any
section hereof.
9.11 Modification of Agreement.
No change in or modification, termination or
discharge of this Agreement in any form whatsoever shall be
valid or enforceable unless it is in writing and signed by the
party to be charged therewith or its duly authorized
representative; provided, however, that any change in or
modification, termination, or discharge of this Agreement
expressly provided in this Agreement shall be effective as so
provided.
9.12 Review by counsel.
Each party is represented by legal counsel. Each
party and its legal counsel have reviewed this Agreement. Any
rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not apply in the
interpretation of this Agreement or any amendments or
attachments hereto.
9.13 counterparts.
This Agreement may be.executed.in.counterparts, each
of which shall be deemed to be an original.
-46-
0 0
restrictions, and conditions hereof.
9.07 Assicn ment or Transfer-.
Subject to the restrictions set forth herein and in
the Ground Lease regarding assignment or transfer; each of the
terms, covenants and conditions of this Agreement shall extend
to and be binding on and shall inure to the benefit of City and
the Project Developer, and their respective successors and
assigns.
9.08 Compliance with Law.
The Project Developer shall observe and abide by and
perform all of its obligations hereunder in accordance with all
applicable laws, ordinances and regulations.
9.09 Disclaimer of Partnership.
The Parties expressly understand and agree that City
is not in any way, and does not for any purpose become, a
partner of or joint venturer with Project Developer in the
conduct of Project Developer's business, the development of the
Property, or otherwise.
9.10 Headings.
The titles to the sections of this Agreement and the
Table of Contents are not a part of this Agreement, and shall
have no effect upon the construction or interpretation of any
-45-
IL -I
J
pursuant to this Agreement, subject to the provisions of
section 9.05 hereof.
9.03 Applicable Law.
This Agreement shall be construed in accordance with
the laws of the state of California.
9.04 Time of the Essence.
Time is of the essence in the performance of the
respective obligations of the Parties under this Agreement.
9.05 Attorneys Fees.
In the event that any action is brought by either-
party as against the other party for the enforcement or
declaration of any right or remedy in or under this Agreement,
or for the breach of any covenant or condition of this
Agreement, the prevailing party shall be entitled to recover,
and the other party agrees to pay, all fees and costs to be
fixed by the court or arbitrator therein, including, but not
limited to, reasonable attorneys fees.
9.06 Waiver.
No waiver or any breach of any of the terms,
covenants, agreements,.restrictions or conditions of this
Agreement shall be construed to be a waiver of any succeeding
breach of the same or other terms, covenants, agreements,
-44-
• 0
ARTICLE 9. MISCELLANEOUS PROVISIONS.
9.01 Brokers.
The City represents and warrants to Project
Developer, and Project Developer represents and warrants to
City, that no broker or finder has been engaged by them,
respectively, in connection with any of the transactions
contemplated by this Agreement or the Ground Lease, or to their
knowledge is in any way connected with any such transactions.
In the event of any such additional claims for broker's or
finder's fees, for consummation of this Agreement or the Ground
Lease, then City shall indemnify, save harmless and defend the
Project Developer from and against such claims if they shall be
based upon any statement or representation or agreement by
City, and Project Developer shall indemnify, save harmless and
defend Landlord if such claim shall be based upon any
statement, representation, or agreement made by Project
Developer.
9.02 Costs.
Except as otherwise specifically set forth in the
Ground Lease and this Agreement, the Project Developer shall be
solely responsible for the payment of all predevelopment and
development costs relating to the Property or the Project
Improvements. The City shall not be obligated to reimburse the
Project Developer for any costs the Project Developer incurs
-43-
Developer is-then entitled, as provided in Section 6.2.5. of
the Ground Lease.
d. If this Agreement is terminated in good faith by
City by an Event of Termination under Section 8.01(e) hereof,
City shall have the absolute right to negotiate with any other
developer of its choosing and to enter into such
agreements /leases as it deems desirable for development of the
Property or to take any action in connection with the Property.
In the event of termination under Section 8.01(e), Project
Developer shall indemnify, defend and hold harmless City,its
City Council, boards and commission, officers, employees,
agents, representatives, and attorneys from and against any and
all claims, demands, actions, causes of action, loss, liability
or expenses of any nature whatsoever, including reasonable
attorneys fees, regardless of the merit or outcome of any such
claim or suit, arising out of or in any way related to any
action by Project Developer- or from labor or services or
materials provided or sums invested in development or proposed
development of the Property.
This- indemnification applies only to City's termination of
this Agreement for City's disapproval of the proposed
development team, as set forth in Section 2.01(c).
-42-
1
e. Termination by City under the provisions of
Section 2.01(c) hereof.
8.02 Effect of Termination.
a. If this Agreement is terminated by an Event of
Termination under subsection d. of 8.01 hereof, the rights and
obligations of the Parties following such termination shall be
governed by the Ground Lease and, as applicable, the provisions
of Section 3.01, 3.021 3.03 and 4.03 of this Agreement.
b. If this Agreement is terminated by City by an
event of termination attributable to the default of Project
Developer under subsection a. or b. of Section 8.01 hereof, or
if this Agreement is terminated by either party by an event of
termination under subsection c. of Section 8.01 hereof except
Section 4.03, the City shall have the absolute right to
negotiate with any other developer of its choosing, and to
enter into such agreements and /or leases as it deems desirable
for development of the Property or to take any other action in
connection with the Property;
C. If this Agreement is terminated as a result of
the default by the Project Developer, the City may retain and
use all plans submitted to the City by the Project Developer,
as well as all plans and specifications to which the Project
-41-
any of the following events (hereinafter "Event of
Termination "):
a. Termination by a party by reason of a default by
the other party under the provisions of Article 7 hereof;
b. Failure to satisfy, by the close of escrow,
subject to extensions as permitted under this Agreement, the
conditions precedent set forth in Sections 5.01 and 5.02 and
Article 6 hereof, unless such failure is waived by mutual
consent of the Parties;
C. Termination by a party under the provisions of
sections 4.03 or 6.05 hereof;
d. Satisfaction of the requirements of the Project
Developer and the requirements of the city as set forth in
Sections 5.01 and 5.02 hereof, the close of escrow and
conveyance of leasehold title as provided for in Section 6.03
hereof, subject to the provisions of Section 8.02 herein;
provided, the provisions of Sections 3.01, 3.02, 3.03 and 4.03
shall survive such termination to the extent and for such
period of time as necessary to give them full force and effect
under this Agreement and the Ground Lease;
-40-
• 0
to perform any obligation required of it under Section 5.02 or
Article 6 of this Agreement, and shall not have cured such
action within sixty (60) days following written notice to do so
with respect to any obligations or performance requirements of
the City, the City shall be in default under this Agreement.
7.04 Remedies of Proiect.Developer.
In the event of a default of the City under Section
7.03 hereof, the Project Developer may terminate this Agreement
by giving written notice of such termination to the City.
Project Developer's right to terminate is not an exclusive
remedy and shall be in addition to any remedies now or later
allowed Project Developer by law; provided, the parties agree
that refusal or failure by the City to issue any permit,
license, or approval sought by Project Developer for
construction of the Improvements on the Property shall not
constitute a breach of the Ground Lease. "Approval" as used in
the immediately preceding sentence shall not include any
approval specifically required of "Landlord" in the Ground
Lease, or the "City, acting as Landlord" in this Agreement.
ARTICLE S. EVENTS OF TERMINATION, RIGHTS AND OBLIGATIONS OF
PARTIES.
8.01 Events of .Termination.
This Agreement shall terminate upon the occurrence of
-39-
the items required under Article 5 hereof by the close of
escrow or as sooner provided in the Schedule of.Performance
(Attachment 116"), or shall act unreasonably with respect to any
approval required of it under this Agreement, or shall fail to
perform any obligation required of it under Section 5.01 or
Article 6 of this Agreement, and shall not have cured such
action within thirty (30) days following written notice to do
so from the City with respect to evidence of Project
Developer's financing and equity commitments, and within sixty
(60) days following written notice to do so with respect to
other obligations or performance requirements of the Project
Developer, the Project Developer shall be in default under this
Agreement.
7.02 Remedies of City.
In the event of a default of the Project Developer
under Section 7.1 hereof, the City may terminate this Agreement
by giving written notice of such termination to the Project
Developer. City's right to terminate is not an exclusive
remedy and shall be in addition to any remedies now or later
allowed City by law.
7.03 Default by City.
If the City fails to use its best efforts under
Section 5.02 hereof or shall act unreasonably with respect to
any approval required of it under this Agreement or shall fail
-38-
• r�
6.04 Costs of Escrow. Title Insurance.
r
The Project Developer shall also pay in escrow to the
Title Company all fees, charges and costs, including, but not
limited to, documentary transfer taxes, escrow fees, title
insurance premiums, and recording fees arising out of or in any
way related to the escrow or the transaction handled by the
Title Company, promptly after the Title Company has notified
the Project Developer of the amount of such fees, charges and
costs, but not later than ten (10) days prior to the scheduled
date of close of escrow.
6.05 Agreement Terminates if Escrow Not Closed by January
16, 1995.
In the event the escrow does not close for any reason
by January 16, 1995, or such later date as mutually agreed in
writing by the parties, the escrow and this Agreement shall
terminate, the Title Company shall return the original
Agreement, Ground Lease, and Agreement for option to Extend
Lease, if deposited in escrow, to City. Project Developer will
bear all costs of escrow as set forth in Section 6.04.
SECTION 7. DEFAULTS AND REMEDIES.
7.01 Default by Project Developer.
If the Project Developer fails to submit and obtain
-37-
2, Project Developer's execution of
construction contracts;
3. Approval by City as Landlord of Project
Developer's plans and specifications;
4. All approvals and actions required by or of
the City for this Project have occurred;
5. Evidence to the City attorney's reasonable
satisfaction that all required insurance and bonds are in
effect;
6. Project Developer's payment of all fees
required by City, this Agreement, or the Ground Lease for
construction of the Project Improvements excepting only those
with a payment due date specified in writing to be after the
Effective Date of the Ground Lease;
7. Payment by Project Developer of the first
annual or prorated Construction Rent (as defined in Section 3.2
of the Ground Lease) into escrow; and
d. When the Project Developer has certified in
writing to the City and Title Company, which certification
shall not be unreasonably withheld, that all requirements and
preconditions to close of escrow have either been satisfied or
waived.
-36-
9
required by the Project Developer, and the Project Developer's
construction lender. City shall not subordinate its fee
interest in the Property but shall subordinate rents as
provided in the Ground Lease to Tenant's Leasehold Mortgagee.
b. When the construction lender's leasehold
mortgage or deed of trust securing the Project Developer's
construction loan for the Property can be delivered and
recorded as a first lien and encumbrance on Project Developer's
leasehold interest in the Property subject only to the approved
title exceptions (Attachment 11711) and the Title Company will
issue to the Project Developer's construction lender
concurrently with delivery and recordation of said leasehold
mortgage or deed of trust a policy of title insurance in such
amount and with special endorsements as may be required by
Project Developer's construction lender; and
c. when the City has certified in writing( to the
Project Developer and Title Company, which certification shall
not be unreasonably withheld, that all requirements and
preconditions to close of escrow have either been satisfied or
waived. In addition to those conditions precedent set forth in
Article 5, the following are conditions to be met prior to or
concurrent with the close of escrow:
the City;
1. Issuance of full construction permits by
-35-
C 0
(the "Title Company ") with an office in the City of San.Luis
Obispo, and proceed to close escrow as herein provided.
6.02 Execution and Delivery of Documents.
The Parties shall complete, execute, and deposit into
escrow this Agreement, the Ground Lease, the Agreement for
Option to Extend the Lease, together with such other documents
and supplemental escrow instructions as may be required to
close the escrow for conveyance of the leasehold title from the
City to the Project Developer under the Ground Lease, as herein
provided.
6.03 Close of Escrow.
The Title Company shall - record and thereafter deliver
executed copies of the Ground Lease and the Agreement for ,
Option to Extend Lease to the City and the Project Developer,
and such documents shall be effective and dated as of the close
of escrow, when the following conditions are satisfied:
a. When leasehold title to the Property can be
conveyed to the Project Developer and placed of record subject
only to the approved title exceptions set forth in Attachment
117" attached hereto and the Title Company will .issue to the
Project Developer concurrently with conveyance of said
leasehold interest a policy or policies of title insurance in
such amount and with such special endorsements as may be
-34-
•
the satisfaction of any condition:
•
a. May be extended by mutual consent of the Project
Developer and the City;
b. May be extended on the failure of the City or
any official, department, board or commission thereof, to act
within the time set forth in this Agreement or the Schedule of
Performance (Attachment "611) for the period of time during
which such failure to act shall continue;
C. Shall be extended for the period of any delay
during which any performance or action by the Project Developer
or the City pursuant to or in furtherance of this Agreement is
prevented by the pendency or final result of litigation or by
administrative action of any governmental entity or official,
subject to the provisions of Section 4.03 and 6.05 herein.
ARTICLE 6. SATISFACTION OF CONDITIONS.. CLOSE OF ESCROW.
6.01 Satisfaction of Conditions.
Upon satisfaction of all the conditions precedent set
forth in Article 2 and Article 5, the Parties shall open an
escrow with Ticor Title Company in San Luis Obispo, California,
or such other title company as the Parties may mutually select
-33-
3. Take action to prepare and certify any
additional studies, reports, or other documents or actions
required by CEQA.
b. Within the time set forth in the Schedule of
Performance (Attachment "6 "), subject to extensions as provided
in this Agreement, and as a condition precedent to the
execution and delivery of the Ground Lease, the City shall:
1. In addition to those approvals given prior
to the date of execution of this Agreement, as acknowledged in
the Recitals hereof, consider and approve or disapprove
consistent with the approvals previously given, and in
accordance with the Schedule of Performance (Attachment "6")
those documents required to be submitted by Project Developer
in this Agreement;
2. Cause the completion of schematic
preliminary and final construction plans for any public
improvements that the City wishes to coordinate the
construction of with the construction of the Project
Improvements; C
3. Execute any documents or approvals required
by law or ordinance or by this Agreement.
5.03 Extensions of Time.
Times set forth herein or in the Schedule of
Performance (Attachment "6 ") for the performance of any act-or
-32-
N
actions described in the Schedule of Performance or otherwise
required by the City of San Luis Obispo, acting in its
regulatory capacity, including but not limited to the
conditions of approval of the preliminary planned development
plan contained in Ordinance 1135, within the times specified in
the Schedule of Performance or, if not specified, within such
time as the City may reasonably require.
5.02 Rectuirements of City.
a. Within the time set forth in the Schedule of
Performance (Attachment 1161), subject to extensions as provided
in this Agreement, and as a condition precedent to the Ground
Lease, the City shall use its best efforts to do the following:
1. To the extent required for the development
of the Property, upon application by the Project Developer,
conduct public hearings to determine if Court Street can be
abandoned or vacated by the City or be the subject of a valid
encroachment permit;
2. To the extent required for development of
the Property, seek approval of the lot line adjustments and
reparcelization of the real property which will comprise the
Property, together with a Certificate of Compliance, if
required, by the Subdivision Map Act or the City's subdivision
regulations, as well as any other required actions for the
Property;
-31-
W
L
(conforming to the Final Development Plan) which shall include
uses other than retail if said uses are allowed in the Final
Development Plan;
b. The minimum and maximum square footage
(ranges) for each category of permitted use;
C. A detailed description of public
amenities and spaces;
d. The minimum square footage for each
public amenity and space;
e. An Interior Design Element that shall
ensure that all interior alterations conform to a unified
architectural theme and standards;
f. A description and listing of types of
subtenants desired, the approximate floor space to be leased to
each, and the strategies for attracting the various subtenants.
8. The identity of Project Developer's
architects and engineers;
9. The identity of the proposed construction
manager which may be the Project Developer's general
contractor.
B. In addition to those actions set forth in
section A. above,�Project Developer shall within the times set
forth in the Schedule of Performance (Attachment 'O6 ^), subject
to extensions as provided in this Agreement, perform all other
-30-
0 0
required by the construction financing), together with a
statement in a form reasonably satisfactory to the City
sufficient to demonstrate that the Project Developer's equity
financing, if any, and the lender's commitment equal the total
construction costs of the Project Improvements;
5. An agreement from a mixed use commercial
development management company acceptable to the City, if
different from Project Developer, to manage and operate the
Property and the improvements thereon upon completion of
construction;
6. A list of potential contractors for the
approval of City, which approval shall not be unreasonably
withheld, for construction of the Project Improvements. The
general contractor for the Project shall be on the approved
list or shall obtain the prior written approval of the City
prior to Close of Escrow if not on the list;
7. A retail marketing plan, building
management plan, public safety /security plan, facilities
maintenance plan, construction impact management plan, water
conservation plan and a transportation systems management plan
to the approval of appropriate City staff, as set forth in the
Schedule of Performance (Attachment 6). The retail marketing
plan shall contain sufficient detail to ensure compliance
throughout the term of the Ground Lease, and shall include but
not be limited to:
a. A description of permitted uses
-29-
C�
the final Environmental Impact Report, amended the city's
zoning map, and approved the Planned Development Preliminary
Plan for the development of the Property.
ARTICLE 5. REQUIREMENTS OF PARTIES, CONDITIONS PRECEDENT.
5.01 Requirements of Protect Developer.
A. Within the times set forth in the Schedule of
Performance (Attachment 11611) subject to extensions as provided
in this Agreement, in addition to those Project Developer
requirements satisfied prior to the date of execution of this
Agreement and approved by the City as set forth in the Recitals
hereto, as a condition precedent to the Ground Lease,
the Project Developer shall submit to the City for approval the
following:
1. A final development plan for the planned
development (hereafter "Final Development Plan ");
2. Preliminary plans and specifications,
including schematic and final architectural plans and cost
estimates for construction of the Project Improvements;
3. Final construction documents for the
Project Improvements sufficient to enable. the City to issue
full construction permits, and cost estimates for the Project
Improvements;
4. A bona fide commitment from a lender for
construction financing (and take -out financing, if any, or if
-28-
•
9
termination under this paragraph, City shall not negotiate with
Any other developer for development of the Property until the
later of (1) two years have elapsed from the date of
termination under this paragraph has elapsed, without Project
Developer submitting a complete application for development of
the Property, or (2) if Project Developer timely submitted a
complete application, the date on which the application and
L
proposed project have been denied by City.
4.04 Effect of Pending Litigation.
The Parties acknowledge that there is now pending in
the Court of.Appeals, Division Six, State of California, civil
action number B044211, entitled Melanie C. Billia. Allen K.
Settle. individually and on behalf of all petitioning electors.
Petitioners and Appellants. vs. Pam Voges. City Clerk of the
City-of San Luis Obispo. Respondent (hereinafter "the Pending
Litigation "). The Pending Litigation alleges, among other
things, that the City Clerk, on the advice of the Acting City
Attorney that the text of the referendum circulated by the
Petitioners did not meet the standards of law required for a
referendum, refused to examine the signatures on the referendum
petition. Petitioners contend that the City Clerk had no right
to reject the referendum petition and that the petition should
be submitted to the City Council and /or the voters in the City
of San Luis Obispo. The ordinance described in the referendum
petition is Ordinance No. 1135 (1989 Series), which certified
-27-
weather or delays of subcontractors due to such causes or the
discovery of Hazardous Materials (as defined in Section 1.6 of
the Ground Lease) or a determination that the Property is of
possible archeological or historical significance, as set forth
in Section 1.7 of the Ground Lease. It is the purpose and
intent of this provision that in the event of any occurrence of
such Unavoidable Delay, the time or times for the satisfaction
of conditions of this Agreement, including those with respect
to construction of the Project Improvements, shall be extended
for the period of the Unavoidable Delay, subject to the
provisions of Section 4.03 and Section 6.05.
4.03 Consequences of Actions by Third Parties
In the event the City, as Landlord, is unable to
deliver all or a portion of the Property or that portion of
Court Street needed by Project developer for development of the
Project Improvements by January 16, 1995, due to the Pending
Litigation (defined in Section 4.04) or other litigation,
actions by third parties, or inability to make the findings
required by state law for vacation or abandonment of Court
Street or the issuance of a valid encroachment permit, then
either party may terminate this Agreement and the Ground Lease
without liability to the other. In the event of termination
under this paragraph, Project Developer shall have the right to
submit a new project for development of the Property to City
within two years of the date of termination. In the event of
-26-
0 o
obtain partners with the financial ability and experience
required by City under Sections 2.01(c) and (d) herein),
neither the City nor the Project Developer, nor any successor
in interest, shall be considered in breach of or default in its
obligations, nor shall there be deemed a failure to satisfy any
conditions, with respect to the close of escrow or with respect
to the beginning and completion of construction of the Project
Improvements, or progress with respect thereto, in the event of
"Unavoidable Delay" in the performance of such obligations, or
satisfaction of such conditions. "Unavoidable delay" is delay
due to unforeseeable or other causes beyond the party's control
and without its fault or negligence, including, but not
restricted to, the Pending Litigation (defined in Section 4.04)
or any other litigation; strike, lockout, or labor dispute that
is not under the control of Project Developer or.its general
contractor affecting the Project or any portion thereof;
inability to obtain labor or materials or reasonable
substitutes therefor, acts of God or of the public enemy, acts
of the other party, acts of third parties, City's inability to
abandon Court Street or deliver possession of that portion of
Court Street needed for development by Project Developer,
natural disasters, fires, earthquakes, explosions, hurricanes,
floods, epidemics, quarantine restrictions, freight embargoes,
war, invasion, insurrection, rebellion, riots, unusually severe
-25-
material default under this subparagraph and Mortgagee shall .
have thirty (30) days to cure any such default.
NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING
TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP
ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN
A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT
TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO
SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
'ARBITRATION OF DISPUTES' PROVISION TO NEUTRAL ARBITRATION.
Landlord's Initials Tenant's Initials-
6.1.4.2.2. Material Changes
Subject to the provisions of this Lease that may exempt.
Tenant from having to obtain Landlord's approval, the Tenant
agrees that before and during the period of construction of the
Project Improvements or any other improvements requiring
Landlord approval, the Tenant shall not make or permit to be
made any substantial changes in the final approved plans for the
Project Improvements or other improvements without first
obtaining the prior written approval of Landlord. For purposes
of this Section, substantial changes include, but are not
necessarily limited to, the following:
a. Change in size or design affecting the. bulk, building
coverage or floor area ratio, number of floors, or number of
parking spaces provided on site;
b. Changes affecting the size, design or use of exterior
finishing materials noticeably affecting architectural
appearance or functional use and operation of the Project;
33
10 O
C. Changes in size or placement of service facilities,
or in the number of elevators, stairs and ramps, and changes in
general pedestrian or vehicular circulation in, around or
through the Project;
d. Any changes requiring approval of any City or state
board, body, commission or officer, or any change required by
any City or state board, body, commission or officer, but not
including interior alteration otherwise excluded in Section
6.3.2.a.;
e. Material changes in number, size, placement, graphics,
design or materials of all exterior signs, if any, shown on the
plans, different from those shown and specified in the approved
plan;
f. Material changes in landscape planting and site
improvements;
g. Changes in the size or material changes in the quality
of exterior pavement, pedestrian malls, plazas, interior
atriums, retaining walls, pools and fountains, public art,
exterior lighting, public open space areas (including
balconies), child care facilities, public art gallery and other
development of the property other than that shown and specified
in the plans approved by Landlord.
6.1.4.2.3. Substitution of Materials
Changes shall not be made in any Landlord approved plans
and specifications as to elements requiring Landlord approval
as provided above without the Landlord's express written
approval and, as determined necessary by the Landlord, the
approval of such of its boards or commissions that may have
jurisdiction over the Project; provided, however, that if
certain materials approved by the Landlord are not available for
construction, the Tenant may substitute materials which are the
architectural equivalent as to aesthetic appearance, quality,
color, design and texture after giving Landlord notice of
Tenant's intent to do so. Tenant may not substitute materials
of an inferior quality without Landlord's prior written
approval.
6.1.4.3 Termination for Failure to Complete Construction
If the Initial Construction is not completed by Tenant
within twenty -four (24) months after the Effective Date, then
Landlord may, at its option, terminate this Lease upon thirty
(30) days written notice to Tenant; provided, however, such date
34
for Landlord's termination shall be extended for each day that
Landlord has extended the time for completion of construction
as set forth in Section 6.1.4.1. above. This section shall not
in any way affect Tenant's obligation to pay the Rent and
Additional Rent specified in Article 3 herein, until such time
as this Lease is terminated and Landlord has recovered
possession of the Property.
6.2. Construction Standards
6.2.1. General Construction Standards
All. construction, alteration or repair work permitted
herein (including the Initial Construction and subsequent
construction) shall be accomplished expeditiously and diligently
and in a first - class, professional manner. Tenant shall take all
reasonably necessary measures to minimize any damage, disruption
or inconvenience caused by such work and make adequate provision
for the safety and convenience of all persons affected thereby.
Tenant shall repair, at its own cost and expense, any and all
damage caused by such work, and shall restore the area upon
which such work is per- formed to a condition which is equal to
or better than the condition which existed prior to the
beginning of such work. In addition, Tenant shall cause its
Contractor(s) to pay all costs and expenses associated therewith
and to indemnify and hold Landlord and the City of San Luis
Obispo harmless from all damages, losses or claims attributable
to the performance of such work. Dust, noise and other_- effects
of such work shall be controlled using accepted methods required
by applicable laws and regulations customarily utilized in the
City of San Luis Obispo in order to control such deleterious_
effects associated with construction projects.
6.2.2. Permits
6.2.2.1. Tenant Required to Obtain-Permits
This Lease shall not be construed to: (1) exempt Tenant
from the requirement of obtaining any permit or license, paying
any fee, or obtaining any development review or approval
required by the San Luis Obispo Municipal Code or by any other
applicable provisions of law; or (2) entitle Tenant to any
permit, license, review or approval required by the City of San
Luis Obispo Municipal Code or by any other applicable provision
of law.
35
• o
6.2.2.2. Landlord Not Regulator
Subject to Section 1.3 above, the City of San Luis Obispo
acts herein in a dual capacity: that of Landlord /property owner;
that of City /regulatory agency. To the extent the City acts in
a regulatory capacity, then it does not act under this Lease;
to the extent the City acts in its capacity as Landlord /property
owner, it does act under this Lease. Notwithstanding Landlord's
obligation to cooperate and assist Tenant in obtaining City
approvals pursuant to Section 6.2.8. herein, refusal or failure
by City_ to issue any permit, license or approval sought by
Tenant for construction of the improvements on, or development
of, the Property shall not constitute a breach of this Lease.
"Approval" as used in the immediately preceding sentence does
not include any approvals specifically required of Landlord in
this Lease.
6.2.2.3. Tenant to Pay Customary Fees
Tenant agrees that it shall pay all usual and customary
payments, charges and fees that exist at the time the fee is
due. Tenant agrees that there is no expectation or promise of
any reduction in fees due to the nature of this project.
6.2.3. Compliance with Approvals and Standards
The Initial Construction and any other alterations,
additions or improvements installed or constructed by Tenant,
its contractor or agents at any time during the Term of this
Lease, shall be done only in compliance with all the following
provisions:
1. All such work shall be in substantial compliance
with the approved Retail marketing Plan;
2. For work other than the Initial Construction
which work is anticipated to cost more than one hundred thousand
dollars ($100,000.00) or two percent (2 %) of the replacement
cost of the Project Improvements, whichever is greater, Landlord
may require Tenant or Tenant's contractor to procure a
performance bond and a labor and materials payment bond
guaranteeing lien free completion of the work of improvement;
3. Tenant shall obtain a valid building permit and
all required governmental approvals for any work of construction
done at or about the Property and shall supply copies of such
permits or approvals to Landlord upon request;
36
4. Tenant shall provide lender and Landlord with
certificates of insurance evidencing policies of insurance with
coverages and amounts as indicated in Article 9 herein.
5. Tenant shall pay to Landlord the cost of any
expense incurred by Landlord by reason of faulty work done by
Tenant or its contractors, or by reason of delays caused by such
work, or by reason of inadequate clean -up.
6. Before the commencement of any construction by
Tenant in, on or around the Property, Tenant, or its
contractors, shall give advance written notice thereof to
Landlord or its agent, sufficient for Landlord's preparation,
posting and recordation of an appropriate Notice of Non -
Responsibility, as provided under applicable law.
7. All work required in the construction of the
Initial Construction, or subsequent improvements, alterations,
structure or construction, including any site preparation work,
landscaping work, utility installation or other construction on
the Property or in connection with the Project. Improvements,
shall be performed only by or under the direction_ or supervision
of competent contractors duly licensed as such under the laws
of the State of California and shall be performed pursuant to
written contracts with such contractors.
8. Notwithstanding anything to the contrary set
forth herein, any construction by Tenant shall be subject to
Tenant having secured all consents, approvals, and having
fulfilled all requirements of the City of San Luis Obispo's Fire
Department and Community Development Department, and if
necessary, the Planning Commission, Architectural Review
Commission, and City Council, and shall be in strict compliance
with the design criteria in effect or hereafter adopted by the
City.
9. Upon completion of all work, or within sixty (60)
days of the issuance of the Certificate of Occupancy, whichever
first occurs, Tenant shall provide City's Community Development
Director with two (2) completed sets of as -built drawings and
a breakdown which shows all costs incurred for such work.
Tenant agrees that upon City's request, Tenant will inspect the
Project Improvements with City's, Community Development Director
or designee to verify the as -built drawings.
6.2.4. Utility Work
Any work performed by or on behalf of Tenant or any
occupant or sublessee to connect to, repair, relocate, maintain
37
or install any storm drain, sanitary sewer, water line, gas
line, telephone conduit or any other public utility service
shall be performed so as to minimize interference with the
provision of such services, and to minimize inconvenience to the
general public.
6.2.5. Use of Plans
If Tenant causes termination of this Lease subject to the
prior rights of any Leasehold Mortgagee (as defined in Article
13) and /or bonding company, Landlord may retain all plans,
specifications, and approvals relating to the Project to which
Tenant is entitled. In addition, from and after the date of
this Lease, Tenant shall provide in its contracts with any
architect, contractor or design professional that, if this Lease
is terminated for any reason, Landlord, at its option, shall be
subrogated to Tenant's rights, but not obligations in said
contract and may act in full as if it were Tenant without
payment of any sum to Tenant or any other person. Tenant shall
make its best efforts to place such language in existing
agreements. Landlord shall reasonably cooperate in providing
language satisfactory to all Parties.
6.2.6. Compliance with Laws; Issuance of Permits
All improvements on the Property shall be constructed in
compliance with any construction documents approved by Landlord
pursuant to the Predevelopment Agreement or this Lease, as
applicable, and also in compliance with all applicable local,
state and federal laws and regulations. Tenant shall have the
sole responsibility for obtaining all necessary permits and
shall make application for such permits directly to the person
or governmental agency having jurisdiction.
6.2.7. Construction Safeguards
Tenant shall erect and properly maintain at all times, as
required by the conditions and the progress of work performed
by Tenant, all necessary safeguards for the protection of
workers, adjacent property and the general public.
6.2.8. Landlord's Cooperation
Landlord shall cooperate with and assist Tenant in every
reasonable way in Tenant's efforts to obtain all governmental
consents, approvals, permits or variances which may be required
for the performance of any construction permitted under the
38
terms of this Lease, including Landlord's joinder in any
application for any such consent, approval, permit or variance
where joinder therein by the owner of the Property is required
by law, at no cost or expense to Landlord.
6.2.9. Rights of Access During Construction
A representative of Landlord shall have the right of
reasonable access to the Property and the improvements thereon
without charges or fees, and at normal construction hours during
the period of construction, for the purposes of ascertaining
compliance with the terms of this Lease, including, but not
limited to, the inspection of the construction work being
performed. Landlord's access shall be reasonably calculated to
minimize interference with Tenant's construction and /or
operations. The parties contemplate Landlord designating a
single representative to perform any such inspection. Landlord
or its representative shall reasonably communicate only with
Tenant or its representative regarding the matters covered by
this Section 6.2.9.
6.2.10. Notice of Completion
Upon completion of Project Improvements by Tenant, and
acceptance by City of the Public Improvements related to the
Project, and upon completion of any other construction at any
time during the term of this Lease or any extension hereof,
Tenant shall file or cause to be filed in the Official Records
of the County of San Luis Obispo a Notice of Completion (the
"Notice of Completion ") with respect to the improvements.
6.3. Additional Construction on Property
6.3.1. Construction Standards
Subsequent to completion of the Initial Construction, any
additional improvements erected on any portion of the Property
as permitted under this Lease, any remodeling or reconstruction
work undertaken on or within any improvement on any portion of
the Property, and any alteration of or addition to public open
spaces or common area, shall at all times be of first -class
construction and architectural design. Any such development or
construction of additional improvements, remodeling or
reconstruction of any improvement on any portion of the
Property, or alteration of or addition to public open spaces or
common area, shall conform to the design concepts contained in
the Retail Marketing Plan, so that the exterior and interior
39
v
public and open space areas of all such buildings, including,
without limitation, exterior elevations, building materials and
color thereof, and all such other improvements, will be
architecturally and aesthetically compatible and harmonious to
create a uniform general plan for the Property. All
construction-shall be diligently prosecuted and accomplished
without cost or expense to Landlord, and in a good and
workmanlike manner.
6.3.2. Landlord's Approval
Following completion of the Initial Construction and
issuance of the Certificate of Occupancy, any construction,
reconstruction or remodeling undertaken by Tenant on the
Property shall be governed by the following:
A. Tenant shall have the right, following issuance of
said Certificate of Occupancy, without Landlord's consent (but
subject to all other provisions of this Lease), to undertake any
interior, nonstructural remodeling of the improvements now or
hereafter located on the Property not affecting exterior
appearance and not altering the preexisting location of the
Initial Construction on the Property; provided Tenant shall
obtain Landlord's prior written consent for any construction,
reconstruction, or remodelling which affects the size, layout,
or configuration of any public or open space, including but not
limited to the space for public art, public art gallery, the
interior atrium and public viewing decks.
B. If Tenant, at any time following issuance of said
Certificate of Occupancy, desires to undertake any construction,
reconstruction, demolition or remodeling on the Property which
is not exempt from Landlord's approval as provided in subsection
A., immediately above, then Tenant shall obtain the prior
written approval of Landlord's Chief Administrative officer,
which approval shall not be unreasonably withheld or delayed.
6.4. Protection of Landlord
6.4.1. No Implied Consent of Landlord
Nothing in this Lease shall be construed as constituting
the consent of Landlord, expressed or implied, to the
performance of any labor or the furnishing of any materials or
any specific improvements, alterations of or repairs to the
Property or any part thereof by any contractor, subcontractor,
laborer or materialman, nor as giving Tenant or any other person
any right, power or authority to act as agent of or to contract
40
• O
for, or permit the rendering of, any services, or the furnishing
of any materials, in such manner as would give rise to the
filing of mechanics' liens or other claims against the fee of
the Property or the improvements thereon. Landlord shall have
the right at all reasonable times to post, and keep posted, on
the Property any notices which Landlord may deem necessary for
the protection of Landlord and of the Property and the
improvements thereon from mechanics' liens, or other claims.
Tenant shall give Landlord ten (10) days prior written notice
of the commencement of any work to be done on the Property to
enable Landlord to post such notices. In addition, Tenant shall
make, or cause to be made, prompt payment of all monies due and
legally owing to all persons doing any work or furnishing any
materials or supplies to Tenant or any of its contractors or
subcontractors in connection with the Property and the
improvements thereon.
6.4.2. Property to be Free of Liens.
Tenant shall keep the Property and such improvements free
and clear of all mechanics' liens and other liens on account of
work done for Tenant or persons claiming under it. Tenant agrees
to and shall indemnify and save Landlord and the City harmless
against liability, loss, damages, costs, attorneys' fees, and
all other expenses on account of claims of lien of laborers or
materialmen or others for work performed or materials or
supplies furnished to Tenant or persons claiming under it.
6.4.3. Procedure if Lien Recorded
In the event any lien is recorded, Tenant shall, upon
demand by Landlord, furnish the security described in California
Civil Code Section 3143, or successor statute, which results in
the removal of such lien from the Property. If Tenant does not
cause to be recorded the bond described in California Civil. Code
§3143 or otherwise protect the Property under any alternative
or successor statute, and a final judgment has been rendered
against Tenant by a court of competent jurisdiction for the
foreclosure of a mechanic's, materialman's, contractor's or
subcontractor's lien claim, and if Tenant fails to stay the
execution of the judgment by lawful means or to pay the
judgment, Landlord shall have the right, but not the duty, to
pay or otherwise discharge, stay, or prevent the execution of
Any such judgment or lien or both. Tenant shall reimburse
Landlord for all sums paid by Tenant under this paragraph,
together with all Landlord's reasonable attorneys' fees and
costs, plus interest on those sums, fees, and costs at the
maximum legal rate from the date of payment until the date of
reimbursement.
41
6.5. Notice
Should any claims of lien be filed against the Property or
the improvements thereon, or any action affecting the title to
such property be commenced, the party receiving notice of such
lien or action shall forthwith give the other party written
notice thereof.
6.6. Removal and Demolition During Term
During the term of this Lease or any extension thereof,
Tenant shall not remove or demolish in whole or in part any
improvement on the Property which requires the prior written
consent of Landlord, without such consent, Landlord may, at its
sole discretion, condition such consent upon the obligation of
Tenant to replace the same by improvement(s) of greater value.
ARTICLE 7
7.0. OWNERSHIP OF IMPROVEMENTS AND PERSONAL PROPERTY
7.1. Ownership of Improvements During Term
All improvements, including fixtures, furnishings,
equipment and trade fixtures, constructed on the Property by
Tenant as permitted or required by this Lease shall, during the
term of this Lease or any extension thereof, be and remain the
property of Tenant. Tenant shall own and have the right to take
the depreciation deductions under the tax laws for any buildings
or improvements heretofore or hereafter erected on the Property.
7.2. Tenant's Rights End at Termination
Notwithstanding the foregoing, Tenant's rights to the
improvements shall. end upon the expiration or sooner termination
of this Lease. At such expiration or termination, the Parties
agree, with respect to fixtures, furnishing, equipment and trade
fixtures owned by Tenant, and not owned by a subtenant, to
characterize such fixtures, furnishings, equipment and trade
fixtures as "real property." Upon the expiration or sooner
termination of this Lease or any extension thereof, all real
property (as defined in this paragraph). and improvements shall
become the property of Landlord; subject, however, to the rights
of any third party lender who may hold a security interest in
42
said "real property" which rights shall not extend beyond the
normal expiration of the term herein or applicable extensions
thereof.
7.3. Failure to Complete Initial Construction
7.3.1. Option to Require Removal
In the event Tenant fails to complete Initial Construction,
Landlord may, at Landlord's election, require Tenant to remove
from the Property, at Tenant's sole cost and expense, any and
all improvements on the Property and restore the Property to its
condition as of the Effective Date or as of the date Tenant
first entered in or upon the Property prior to the Effective
Date, pursuant to Section 1.9 hereof, whichever occurs first
( "Original Condition ") by written notice given within sixty (60)
days after the date of termination or sooner expiration of this
Lease or any extension thereof.
7.3.2. Time for Removal
Said removal and restoration shall be accomplished within
one hundred eighty (180) days after notice from Landlord.
7.3.3. Restoration to Original Condition
Said removal and Restoration to Original Condition, shall
include, but not be limited to, payment of permit fees,
demolition and clean =up costs, replacement of soil excavated
during construction of the Project Improvements with clean fill
to the level of the Original Condition, compaction of the soil
to Landlord's City Engineer's approval, and if requested by
Landlord, grading and paving with - asphalt suitable for a parking
lot.
7.3.4. Tenant Bears Cost of Restoration Removal
Tenant
shall be liable
to Landlord for
any costs and
expenses incurred by Landlord
in effecting the
removal of the
improvements
which Tenant has
failed to remove after demand
pursuant to
this Section 7.3.
or in otherwise
restoring the
Property to
its Original Condition.
43
N
7.4 Removal Upon Expiration or Sooner Termination
7.4.1. Option for Restoration or Removal
Upon the expiration or earlier termination of this Lease,
Tenant, at its sole cost and expense, at the option of Landlord,
shall (1) restore the improvements to the Property (not
including interior alterations) to the condition existing as of
the time the City first issued a Certificate of Occupancy for
said improvements, reasonable wear and tear excepted; or, (2)
restore the Property to its Original Condition as set forth in
Section 7.3.
7.4.2. Removal /Ownership of Personal Property at Termination
Upon the expiration or sooner termination of this Lease or
any extension thereof, Landlord may require Tenant, at Tenant's
sole cost and expense, to remove all personal property from the
Property. For purposes of this Section, personal property means
property not characterized as real property under Section 7.2,
above, unless. Landlord elects, at its sole option, in its notice
to remove personal property below, to include specified items
otherwise characterized as real property in Section 7.2 above,
in which event, those specified items shall also be deemed
personal property under Section 7.4. A request for removal of
personal property to take effect at the normal expiration of the
term of this Lease, or any extension thereof, shall be effected
by written notice, given at least thirty (30) days prior to the
expiration date, of the date after the expiration date that
Landlord desires removal. A demand for removal of personal
property to take effect on any other termination of this Lease
shall.be effectuated by written notice given concurrently with
notice of such termination as provided herein or within ten (10)
days after such termination is effective. Tenant shall be liable
to Landlord for costs incurred by Landlord in effecting the
removal of personal property which Tenant has failed to remove
after demand pursuant to this Section 7.4.2.
7.4..3. Removal of Personal Property During Term
7.4.3.1. Tenant Right to Remove
Tenant may remove any personal property from time to time,
during the term of this Lease, that may be removed without
damage to the structural integrity of the Property and the
44
s o
improvements thereon. Tenant shall repair all damage caused by
any such removal.
7.4.3.2. Personal Property not Removed by Tenant
Any personal property remaining on the Property after the
Landlord has notified Tenant to remove said personal property
shall, at or before expiration or sooner termination of this
Lease or any extension thereof shall be deemed to be abandoned
by Tenant and shall, without compensation to Tenant, become
Landlord's property, free and clear of all claims to or against
them by Tenant. Tenant shall indemnify and hold Landlord
harmless from any claims, demands, actions or judgment arising
from any abandonment of personal property or otherwise remaining
on the Property after expiration or sooner termination of the
Lease or any extensions thereof. Tenant shall require its
subtenants to abide by the terms of this paragraph and shall
place such language in its subleases as may be reasonably
necessary to accomplish such purpose.
ARTICLE 8
B.O. UTILITIES
Tenant shall pay when due and shall indemnify and hold
Landlord harmless from any liability for all charges for water,
gas, sewage, electricity, telephone and other utility service
supplied to the Property. Such charges shall include the cost
of installing and metering said services.
ARTICLE 9
9.0. INSURANCE AND INDEMNITY
9.1. Indemnity
As of the Effective Date, Tenant shall indemnify, defend
and save harmless Landlord, its City Council, boards and
commissions, officers, agents, servants, employees and attorneys
( "Landlord and its affiliates ") from and against any and all
demands, claims, actions, causes of action, damages, losses or
liabilities or expenses of any nature whatsoever, including
reasonable attorney's fees, regardless of the merit or outcome
of any such claim or suit, for death or personal injuries,
45
damages or losses to any persons) or property suffered or
sustained by anyone in, on or about the Property or any part
thereof by or from any cause whatsoever or arising out of or in
any way connected with the use or occupancy of the Property by
anyone or the construction of any improvements thereon, or the
operation of Tenant's or Tenant's subtenants', licensees' or
concessionaires' businesses thereon (excluding only those
demands, claims, actions, causes of action, damages, losses or
liabilities attributable to the sole active negligence of
Landlord and its affiliates); or in Anyway related to Tenant's
performance or attempted performance of any of the provisions
of this Lease; or arising out of any legal challenge to this
Lease, or any extension thereof, or any provision of either
arising out of or otherwise relating to Government Code Sections
37395 and 37380 and related Government Code Sections, Civil Code
Sections 718 and 719, and Labor Code Sections 1720 and 1771, and
related Labor Code provisions, or in any way connected with
Landlord's reliance upon any legal opinion of Tenant's counsel.
9.2. Insurance
Tenant shall comply with the insurance requirements of this
Article 9.
9.3. Liability Insurance
Tenant shall, at its sole expense, at all times from and
after the Effective Date and during the term of this Lease, or
any extension thereof, maintain in full force a policy or
,policies of broad form comprehensive general liability
insurance, including public liability, contractual liability and
property damage, written by one or more insurance companies
licensed to do business in the State of California, which will
insure Tenant, Landlord and the City against liability for
injury to persons and property and death of any person or
persons occurring in, on or about the Property, or arising out
of Tenant's construction, maintenance, use and occupancy
thereof. The policy(ies) shall not exclude the contractual
indemnity provided in Section 9.1 herein. Such insurance shall
contain initial combined single limits of not less than Ten
Million Dollars ($10,000,000.00), or Ten Million Dollars
($101000,000.00) liability, and Five Million Dollars
($5,000,000.00) property damage or such lower amounts as may be
acceptable to Landlord. The policy limits may be changed as
provided below.
46
i 0
9.4. Fire and All Risk
9.4.1. Tenant Duty to Insure
Tenant shall, at its expense, at all times from and after
the Effective Date and during the term of this Lease or any
extensions thereof, keep or cause to be kept insured all
improvements located on or pertinent to the Property against
loss of damage, by a policy of "all- risk" insurance, including
fire and extended coverage, with vandalism and malicious
mischief endorsements, excluding earthquake and flood damage,
except as set forth in Sections 9.9 and 9.10 below. The amount
of the insurance shall not be less than one hundred percent
(100 %) of the then actual replacement cost of the improvements
located on or pertinent to the Property or such lesser coverage
as Landlord deems adequate (herein "full insurable value).
Landlord shall not carry any insurance the effect of which would
be to reduce the protection to Tenant or amount of proceeds
available under any insurance that this Lease obligates Tenant
to carry. The Landlord, the City and Tenant and any Leasehold
Mortgagee shall be Additional Loss Payees. Each year during
the term of this Lease, Tenant shall provide Landlord with an
amended insurance endorsement which reflects the current full
insurable value of all structures and improvements on the
Property.
9.4.1.1. Proceeds of Fire and Extended Coverage Insurance
Landlord shall, at Tenant's cost and expense, cooperate
fully with Tenant to obtain the largest possible recovery, and
all policies of fire and extended coverage insurance required
by Section 9.4.1. shall provide that the proceeds shall be paid
to a mutually agreed escrow holder in trust ( "trustee ") as
follows:
A. The proceeds shall be deemed to be held by trustee in
trust for the uses and purposes .prescribed by this Lease.
Payments of proceeds for repair, restoration, or reconstruction
of improvements shall be made monthly on architect's
certificates until the work is completed and accepted.
Disbursements shall not exceed eighty percent (80 %) of. the work
in place until after completion, the expiration of time for lien
claims, and, if applicable, elimination of all liens claimed.
The trustee's powers and duties are:
1. subject to any other conditions contained in this
Lease, trustee shall first use the proceeds from any policy
insuring a casualty to the improvements for the repair,
47
restoration, alteration, or reconstruction of the improvements
(hereafter called "the work ") as provided by this Lease.
2. Trustee shall pay out the proceeds from time to
time to persons furnishing labor or materials or both, including
architect's fees and contractors'' compensation, for work.
Payment shall be made on vouchers approved by a licensed
architect or engineer approved .by the Leasehold Mortgagee
employed by Tenant to superintend the work. If the trustee
determines, in the trustee's reasonable discretion that such
vouchers are being improperly approved by the architect or
engineer, or if no architect or engineer is appointed as above,
the trustee may appoint an architect or engineer to act as
above, and shall pay the appointee out of the proceeds.
3. After completion of the work and after payment
and discharge of all costs of the work, and within fifteen (15)
days after written demand on trustee and notice to leasehold
mortgagee, accompanied by reasonable proof of completion and
payment, trustee shall deliver any proceeds remaining in
trustee's hands to the Leasehold Mortgagee to be applied in
reduction of the indebtedness secured by the leasehold mortgage.
4. Within twenty (20) days after- trustee's notice
to Tenant of any amount by which the insurance proceeds are
insufficient to pay the actual costs of the work, Tenant shall
deposit the amount of the deficiency with trustee.
5. Tenant shall pay all actual costs and charges of
trustee.
9.4.1.1.1. Excess Proceeds to Go to Tenant
Any ins urance proceeds remaining after complying with the
provisions of this Lease relating to maintenance, repair, and
reconstruction of improvements shall be the Tenant's sole
property.
9.4.1.1.2. Payment dependent on Manor Versus Minor Damaae
If the proceeds do not exceed the amount defined in this
Lease as the measure of "minor" repairs, alterations, or
additions, all the proceeds shall be adjusted by and paid to
Tenant and shall be applied by Tenant for the repair,
restoration, or reconstruction of any improvements damaged or
destroyed by the casualty giving rise to the insurance claim.
If the proceeds exceed that measure, all the proceeds shall be
adjusted by Landlord and Tenant and shall be deposited with a
reputable escrow holder mutually agreeable to Parties to be
48
® U
disbursed in the same manner as if the proceeds were a
construction loan from an institutional lender to Tenant made
under the provisions of this Lease. Tenant shall pay all escrow
fees and charges.
9.4.1.1.3. Maior and Minor Distincvuished
"Minor" means a construction cost not exceeding seven and
one -half percent (7.5 %) of the value of improvements.
°Construction Costs" includes the cost of labor, materials, and
reasonable profit to general contractor and subcontractors for
any demolition and any removal of existing improvements or parts
of improvements as well as for preparation, construction, and
completion of all new improvements or parts of improvements.
"Value of Improvements" means the latest available appraisal of
"full insurable value" of the improvements as defined in
provisions of this Lease relating to fire and extended coverage
insurance. "Major" repairs, alterations, or additions are those
not defined as minor above.
9.5. Builder's- Risk -and Course of Construction
During the course of any initial or subsequent construction
or demolition, Tenant shall also maintain "builder's risk" and
"course of construction" coverage on the improvements then in
place or underway, including coverage against collapse,
vandalism and malicious mischief. Said policy coverage shall
be equal to or at least 100% of the total insurable value of the
construction and /or demolition. Landlord and City and Tenant
shall be named insureds.
9.6. Worker's Compensation
Tenant shall also obtain, or cause to be obtained, Worker's
Compensation and Employers' Liability Insurance for any and all
persons involved in the construction of the Project
Improvements, or any subsequent improvements, or otherwise
employed on, in or about the Property, or are in any way
connected with Tenant's construction, ownership, maintenance,
use or operation of the Property or the improvements thereon,
in an amount and with coverage to meet all requirements of the
Labor Code of the State of California at all times during the
term of this Lease.
49
L,
9.7. Errors and Omissions /Professional Liability Insurance
Tenant shall require its prime architect and structural
engineer to carry commercially available errors and
omissions /professional liability insurance coverage at the time
such architect /engineer renders services in connection with the
design of improvements constructed on the Property.
9.8. Boiler and Unusual Hazards and Other Insurance
Tenant shall, at its expense, at all times from and after
the Effective Date and during the term of this Lease or any
extension hereof, maintain boiler and machinery insurance if at
any time such equipment is located on the Property. If Tenant
commits, permits or causes the conduct of any activity or the
bringing or operation of any equipment on or about the Property
creating unusual hazards, Tenant shall, promptly on notice of
demand from Landlord, procure and maintain in force, during such
activity or operation, insurance sufficient to cover the risks
represented thereby. Landlord's demand for unusual hazard
insurance shall not constitute a waiver of Landlord's right, to
demand the removal, cessation or abatement of such activity or
operation. Landlord and City and Tenant shall be named
insureds.
9.9. Flood Insurance
Tenant shall carry such flood insurance on the Project
Improvements as may be required from time to time by applicable
law.
9.10. Earthquake Insurance
Tenant shall carry earthquake insurance on the Project
Improvements provided (1) such insurance is commercially
available and (2) annual premiums for such insurance do not
exceed five thousandths of Gross Revenues (.005 x Gross
Revenues) for the prior calendar year.
9.11. Subrogation Waiver
Tenant agrees that in the event of loss due to any of the
perils for which it has agreed to provide insurance, that Tenant
shall look solely to its insurance for recovery. Tenant hereby
grants to Landlord, on behalf of any insurer providing insurance
to either Tenant or Landlord with respect to the services and
activities of Tenant herein, a waiver of any right of
50
subrogation which any such insurer of said Tenant may acquire
against Landlord by virtue of the payment of any loss under such
insurance. Any policies of insurance required under this Lease
shall contain said waiver of subrogation.
9.12. Proof of Coverage
All policies required hereunder shall be with companies
having at least a Best's A+ 10 rating (and if Best's no longer
exists, an equivalent rating). Executed copies of all policies
of insurance or certificates thereof shall be delivered to
Landlord. All insurance policies required by this Article 9
shall name Landlord and the City as additional insureds as their
interests may appear. As often as any such policies shall expire
or terminate, renewal or additional policies shall be procured
and maintained in like manner and to like extent. All policies
of insurance must contain a provision that the company writing
such policy will give both Parties thirty (30) days advance
written notice of any cancellation or lapse of the effective
date or any reduction in the amounts of insurance. If Tenant
fails to purchase, renew or maintain any insurance policies
required herein, Landlord shall have the right but not the
obligation to purchase any such insurance and the amount
advanced by Landlord to so purchase such insurance shall be
deemed Additional Rent as defined in Section 3.10 hereof.
9.13. Periodic Review of Insurance
The insurance requirements of Article 9 may be reviewed by
Landlord and Tenant every year, for the purpose of mutually
increasing or decreasing (in consultation with their respective
insurance advisors) the minimum limits of such insurance and /or
the type or form of coverage required, from time to time to
limits, form or coverage which shall be reasonable and customary
for similar facilities of like size and operation in accordance
with generally accepted insurance industry standards. If the
Parties are unable to mutually agree upon such new limits, forms
or coverages within thirty (30) days of a written demand by one
party upon the other, the determination of an independent
insurance advisor selected by the Parties' insurance advisors
shall be binding upon the Parties.
51
9.14. No Termination on Destruction or Damage
9.14.1. Tenant Obligation to Rebuild
No loss or damage by fire or any other cause - resulting in
either partial or total destruction of any improvements now or
hereafter located on the Property, or any fixtures, equipment
or machinery used or intended-to be used in connection with the
Property or the improvements thereon, whether insured or
uninsured, shall operate to terminate this Lease or to relieve
or discharge Tenant from the payment of any rent, or other
amounts payable hereunder, as and when. they become due and
payable, or from the performance and observance of any of the
agreements, covenants and conditions herein contained to be
performed and observed by Tenant. Tenant shall repair and /or
reconstruct any improvements so damaged or destroyed to the
extent, condition and value of such improvements immediately
prior to such damage or destruction, assuming full compliance
with this Lease (or if Tenant was in default of its maintenance
and repair obligations at the time of --such damage or
destruction, to the condition and value which would have existed
if Tenant had not been in default). Loan documents shall
provide that all insurance proceeds will be applied to the
repair and /or reconstruction of such improvements, and not to
repay part of the outstanding Leasehold Mortgage (as defined in
Article 14 herein). Tenant's failure to make such full repair
and restoration under any conditions in which it was elected or
required so to do shall constitute a default hereunder.
Should Tenant fail to make such :full repair or restoration,
then Tenant hereby assigns to Landlord all of Tenant's rights
to the proceeds of insurance required to be maintained by
Tenant.
9.14.2. Uninsured Damage
Should damage or destruction occur to the improvements on
the Property from a loss not required to be insured under this
Lease, and for which Tenant has no insurance, which damage or
destruction is to the extent of fifty percent (50 %) or more of
the replacement cost of the Project Improvements, valued as of
the time of damage or destruction, and which occurs in the last
ten years of the term of this Lease or during any extension
thereof, Tenant may terminate this Lease, provided, Tenant pays
all Rent and Additional Rent required to be paid up to and
including the date of damage or destruction, and Tenant complies
with the provisions of Article 7 of this Lease. In the event
of termination under this section, Landlord shall not prorate
any prepaid Rent.
52
9.14.3. Waiver of Ricdht to Terminate Upon Destruction
The provisions of this Article 9 shall govern the rights
of the Parties in the event of any full or partial destruction
of the Property. Tenant hereby waives the provisions of Civil
Code Section 1932 (2) and Civil Code Section 1933 (4) and any
similar or successor statute or law with respect to any
destruction of the Property or the improvements thereon.
9.14.4. Procedures for Repair and Restoration
In the event of any damage or destruction, Tenant shall
give Landlord within five (5) days written notice of such damage
or destruction and the date on which such damage or destruction
occurred. Tenant shall promptly make proof of loss and shall
proceed promptly to collect, or cause to be collected, all valid
claims which Tenant may have against insurers or others based
upon any such damage or destruction. Except as otherwise
provided in Section 9.4., amounts received on account of any
losses pursuant to insurance policies shall be used and expended
for the purpose of fully repairing or reconstructing the
portions of the improvements on the Property which have been
destroyed or damaged.
9.15. Definition of Landlord
For purposes of this Article, the word "Landlord" shall
include its City Council, boards and commissions, officers,
agents, servants, employees and attorneys.
9.16. Definition of Tenant
For purposes of this Article, the word "Tenant" shall
include its agents, officers, employees, contractors, and
subtenants.
ARTICLE 10
10.0.
10.1. Just and Equitable Division
In the event of condemnation, the rights of the parties
with respect to the term, the rent, and the award shall be as
53
the Parties then agree to be just and equitable under all the
circumstances, regardless of any technical rule of law, having
in mind the rights of any leasehold or fee mortgagee, the
economics of operation any remaining portion of the Property and
improvements, the cost of restoration, and-the balance.of the
term remaining, among other relevant considerations. If
Landlord and Tenant do not agree within thirty (30) days after
the amount of the award is finally determined, the unresolved
issues shall be determined by non - binding arbitration in
accordance with the rules of the American Arbitration
Association. In the event either of the Parties is dissatisfied
with the result of the non- binding arbitration, then either
party may petition the court in accordance with the provisions
of Section 10.3.
10.2. Allocation of Award
At the conclusion of non - binding arbitration , or upon a
mutual written waiver of arbitration, either party may petition
a court of competent jurisdiction to determine the rights of the
parties with respect to the apportionment of the award between
Landlord and Tenant. The court shall determine the rights of
the parties with respect to the term, the rent, and the award
according to the law in effect at the time of the date of
taking.
ARTICLE 11
114. ASSIGNMENT AND.SUBLETTING
11.1. General
Except as provided in Section 11.3, Tenant shall not assign
or otherwise transfer this Lease, any right or interest in this
Lease, or any portion thereof, or any right or interest in the
Property or the improvements thereon or any right or interest
in Tenant, without Landlord's prior written consent, which
consent shall not be unreasonably withheld. Any assignment or
transfer by Tenant without the prior written consent of
Landlord, whether it be voluntary or involuntary, by operation
of law or otherwise, is void and shall, at the option of
Landlord, terminate this Lease. A consent by Landlord to one
assignment shall not be deemed to be a consent to any subsequent
assignment of this Lease by Tenant.
54
9
U
11.2. Notification of Proposed Assignment
Even if Landlord's consent
assignment or transfer, in order to
with the provisions of Article 14
Tenant shall provide to Landlord, at
prior to any assignment or transfer
consent, or within ten (10) days
transfer which does not require
following information:
is not required for an
assure Tenant's compliance
(Refinancing or Transfer),
least forty -five (45) days
which requires Landlord's
after any assignment or
Landlord's consent, the
a. The name, address and telephone number of the assignee
or transferee;
b. The nature of the assignee or transferee's business,
and whether it is to be carried on on the Property;
C. A copy of the proposed assignment or other
documentation indicating the terms and conditions of the
assignment or transfer-; and
d. All financial or other documentation reasonably
required by Landlord relating to the assignment or transfer,
including, but not limited to, documentation relating to the
financial ability of the proposed assignee, as well as the
experience and expertise of the proposed assignee relating to
projects of this nature.
Tenant shall pay Landlord's reasonable expenses, including
attorney's fees, incurred in reviewing any proposed assignment
or transfer, regardless of whether Landlord's prior written
consent is required for said assignment or transfer.
11.3. Permitted Assignments and Transfers
Notwithstanding the provisions of Section 11.1, Tenant
shall have the right to assign or otherwise transfer its
interest in this Lease as follows:
a. Any assignment or transfer from Tenant to an
institutional lender for a senior Leasehold Mortgage (as defined
in Section 13.4). An institutional lender is defined as a
commercial bank, savings and loan association, credit union,
insurance company, savings bank, or other lenders of substance
which perform functions similar to any of the foregoing, which
have assets in excess of one Hundred Million Dollars
($100,000,000.00) at the time the Leasehold Mortgage is made,
for the purpose of 'incurring an encumbrance on Tenant's
ieasehold interest in the Property, provided the term of the
encumbrance does not extend beyond the term of the Lease;
b. Any sublease pursuant to Section 11.4, below;
55
c. Any withdrawal or change, voluntary or involuntary,
by operation of law of any limited partners of Tenant, provided,
that all limited partners together own 25% or less of Tenant,
and provided further that each such limited partner_ and anyone
who owns an interest in any such limited partner is of good
character and reputation so that the reputation and community
standing of Landlord and the City of San Luis Obispo shall not
be injured by virtue of the ownership interest of any such
limited partner or any one who owns an interest in any such
limited partner. If the interests of all limited partners in
the aggregate exceed twenty -five percent (25 %) of Tenant, then
any and all withdrawals, changes, voluntary or involuntary, or
by operation of law by any limited partner, require the prior
written consent of Landlord;
d. A transfer or assignment of any interest of any
general partner to any other general partner, that does not
result in changing the interest of any one general partner by
more than 10$ cumulatively during the term of the Lease or any
extension thereof;
e. Any assignment or transfer by Tenant which results in
a change in the method of holding title to the Leasehold without
changing the proportional interests of the co- owners of the
Lease, such as the dissolution or formation of a partnership or
the partition of a tenancy in common, or incorporation;
f. Any transfer solely or directly resulting from the
death of incapacity of an individual; provided that if the
managing partner(s) die or is /are incapacitated, the Landlord
reserves its right to approve the succeeding managing partner;
g. Pursuant to agreement dated February 15, 1989, between
Court Street Center Associates, a California Limited Partnership
and Peerless Investments, a California General Partnership
( "Peerless "), Tenant may be required to transfer a ten percent
(10 %) interest in Tenant to Peerless and has the right to
repurchase said interest. Such transfer and /or repurchase shall
not constitute a transfer or repurchase under Article 14 of this
Lease and shall be a permitted assignment /transfer under this
Section 11.3.
11.4. - Subletting
Tenant shall have the right to sublet all or any part or
parts of the Property or the Improvements, or both, and to
assign, encumber, extend, or renew any sublease, provided the
following provisions are complied with:
56
v
a. Each sublease shall contain a provision, satisfactory
to Landlord and to each Leasehold Mortgagee having.an interest
at the time the sublease is executed, requiring sublessee to
attorn to the Landlord or, in the event of any proceeding to
foreclose any Leasehold Mortgage, to the Leasehold Mortgagee,
or any person designated in the notice from Leasehold Mortgagee,
if Tenant defaults under this Lease and if the sublessee is
notified of Tenant's default and instructed to make sublessee's
rental payments to Landlord or Leasehold Mortgagee, or
designated person, as set forth in this paragraph;
b. Tenant shall promptly, after execution of the
sublease, notify Landlord of the name and mailing address of the
sublessee, and shall provide Landlord with a copy of each
sublease;
C. Tenant shall not accept, directly or indirectly, a
sum greater than six (6) months prepaid rent, including security
deposits, from any sublessee;
d. Tenant shall provide Landlord with a form sublease
which Tenant shall make its best effort to use.
11.5. Subleases Subordinate to Lease
Each sublease, license or concession agreement that Tenant
enters into shall provide that the same is subject to the terms
and provisions of this Lease, and shall not extend beyond the
term of the Lease.
11.6. Changes in Interest in Tenant
Any assignment or transfer which results in a new Tenant,
the addition or deletion of any new general partner; change of
the managing or operating partner; any increase in interests
held by limited partners which the aggregate interests of all
limited partners exceed twenty -five percent (25 %) of the total
ownership interest of tenant; or any change in the ownership
interests of any one general partner by more than ten percent
(10 %) cumulatively, during the term of this Lease or any
extension thereof, requires Landlord's prior written approval.
This section shall not apply to the transfers set forth in
Section 11.3(g) above.
57
ARTICLE 12
e
12.0. TENANT DEFAULTS AND LANDLORD'S REMEDIES
12.1. Defaults by Tenant. -
Any of the following occurrences shall constitute a default
under this Lease if:
a. Tenant shall at any time be in default in the
payment of Rent or any other monetary sum called for by this
Lease for more than ten (10) days following written notice from
Landlord to Tenant; or
b. Tenant fails to operate or cause the operation
of the Project, after the issuance of the Certificate of
Occupancy, for more than thirty (30) consecutive days for any
reason other than repair, restoration or reconstruction under
Article 9 hereof or a cause of force majeure as defined in
Section 15.04 hereof and such failure is not cured within thirty
(30) days after written notice thereof from Landlord to Tenant;
or
C. Tenant fails to comply with the provisions of
the Predevelopment Agreement and the Predevelopment Agreement
I s terminated as to the Project as a result thereof; or
d. Tenant assigns (whether or not such assignment
is deemed to be effective) this Lease (or any rights herein),
or sells, transfers, conveys, assigns or leases the whole or
any part of the Property or any improvement constructed thereon
in violation of Article 11 of this Lease or
e. There shall be any change in control of Tenant
or of a part thereof, or any other act or transaction involving
or resulting in a change in the identity of the parties in
control of Tenant or the degree of such control in violation of
Article 11 of this Lease; or
f. Tenant fails to commence repairs, reconstruction
or restoration of any of the improvements on the Property within
forty -five (45) days after written notice from Landlord's City
Administrative officer or his /her designee to do so, and to
prosecute the same to completion within such reasonable time
specified in the written notice or to demonstrate to Landlord's
reasonable satisfaction, Tenant's inability to do so within the
specified times; or
g. Tenant shall at any time be in default in the
keeping and performing of any of its other covenants or
58
• C
agreements herein contained, and should such other default
continue for thirty (30) days after written notice thereof from
Landlord to Tenant specifying the particulars of such default,
or if such other default is of a nature that curing such default
will take more than thirty (30) days and Tenant has failed to
commence such cure within such thirty (30) days and to
thereafter diligently pursue completion of such cure; or
h. Tenant is or becomes bankrupt or insolvent, files
a voluntary petition in bankruptcy, makes an assignment for the
benefit of creditors; or if Tenant is a partnership or consists
of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or
insolvent, files a voluntary petition in bankruptcy, or makes
an assignment for the benefit of creditors; or
i. A writ of attachment or execution is levied on
Tenant's interest in this Lease, the Property or the
improvements thereon, or on Tenant's assets located on the
Property, and the same is not discharged within thirty (30)
days; or
j. In any proceeding in which Tenant is a party, a
receiver is appointed with authority to take possession of the
Property and the improvements thereon; or
k. Proceedings in bankruptcy or under the Bankruptcy
Act of the United States are initiated against Tenant, or any
partner, person or entity that owns any interest in Tenant, and
such proceedings are not dismissed within ninety (90) days after
the institution of such involuntary proceedings in bankruptcy;
or
1. Tenant fails to comply with any of the conditions
of approval of the Planned Development; or
M. Tenant defaults under any Leasehold Mortgage (as
defined in Article 13) or any contract for construction of the
Project Improvements; or
n. Tenant fails to commence construction within
thirty (30) days after having taken possession of the Property
or fails to develop the Project Improvements pursuant to the
construction deadlines set forth in Article 6; or
o. Tenant abandons or substantially suspends
construction prior to substantial completion of the Project
Improvements; or
p. Tenant enters into subleases which substantially
deviate from the City approved Retail Marketing Plan.
59
12.2. Remedies on Default
Upon the occurrence of any such default, except for
subsection c. of Section 12.1, above, in addition to any and all
other rights or remedies of Landlord hereunder, or by law or in
equity now or later allowed, Landlord shall have the option to
exercise the following rights and remedies, cumulatively or in
the alternative, set forth in Sections 12.2.1. through and
including Section 12.2.9. hereof:
12.2.1. Termination
Landlord may, at its sole option, terminate this Lease by
giving Tenant written.notice of termination. On the giving of
the notice, all Tenant's rights in the Property and in all
improvements thereon shall terminate. Promptly after notice of
termination, Tenant shall surrender and vacate the Property and
all improvements, in clean condition; and, Landlord may reenter
and take possession of the Property and all improvements thereon .
and eject all parties in possession or eject some and not
others, or eject none. Termination under this subsection (a)
shall not relieve Tenant from the payment of any sum then due
to Landlord or from any claim for damages previously accrued or
then accruing against Tenant. Upon termination, Tenant shall
provide to Landlord all documents in Tenant's possession or
under its control necessary for the consummation of any lease
or sale of the improvements located on the Property.
12.2.2 Re -entry Without Termination
Without terminating this Lease, Landlord may reenter the
Property at any time and from time to time relet the .Property
and the improvements thereon or any part or parts of them for
the account and in the name of Tenant or otherwise. Landlord may
at Landlord's election eject all persons or eject some and not
others, or eject none; provided, however, if Landlord does not
terminate this Lease, Landlord shall not have the right to eject
any subtenant or Operator who is not then in default. Any
reletting may be for the remainder of the term of this Lease or
for a longer or shorter period. Landlord may execute any leases
made under this provision either in Landlords name or in
Tenant's name, and shall be entitled to all rents from the use,
operation, or occupancy of the Property or the improvements
thereon, or both. Tenant hereby appoints Landlord its
attorney -in -fact for purpose of such leasing. Tenant shall
nevertheless pay to Landlord on the due dates specified in this
Lease the equivalent of all sums required of Tenant under this
60
1
Lease, plus Landlord's expenses, including but not limited to,
remodeling expenses, commissions and advertising costs, less the
avails of any reletting or attornment. No act by or on behalf
of Landlord under this provision shall constitute a termination
of this Lease unless and until Landlord gives Tenant written
notice of termination. No act by Landlord under this paragraph
shall lessen the rights of any Leasehold Mortgagee hereunder.
12.2.3. Termination after Relettina
Even though Landlord may have relet the Property, Landlord
may thereafter elect to terminate this Lease and all of Tenant's
rights in or to the Property.
12.2.4.. Termination of Predevelopment Agreement
Upon the occurrence of the default specified in Section
12.1.c., above, this Lease shall be terminated concurrent with
the date of the termination of the Predevelopment Agreement with
respect to the Property. All other rights of Landlord with
respect to termination of this Lease shall be as set forth
herein.
12.2.5. Landlord's Right to Cure Tenant's Default
Landlord, at any time after Tenant commits a default, may
cure the default at Tenant's cost. If Landlord at any time, by
reason of Tenant's default, pays any sum, the sum paid by
Landlord shall be due immediately from Tenant to Landlord at the
time the sum is paid, and if not paid immediately, shall bear
interest at the Lease Interest Rate from the date the sum is
paid by Landlord until the date Landlord is reimbursed by
Tenant. The sum, together with any interest it bears, shall be
deemed Additional Rent.
12.2.6. Tenant's Personal Property
Landlord may, at Landlord's election use Tenant's personal
property and trade fixtures or any of such property or fixtures
without compensation and without liability for use or damage or
store them for. the account and at the cost of Tenant. The
election of one remedy for any one item shall not foreclose an
election of any other remedy for another_ item or for the same
item at a later time.
61
12.2.7. Assignment of Subrents
Tenant assigns to Landlord all subrents and other sums
falling due from subtenants, licensees and concessionaires
(herein called "subtenants ") during any period in which Landlord
has the right under this Lease, whether exercised or not, to re-
enter the Property for Tenant default, and Tenant shall not have
any right to such sums during the period. This assignment is
subject and subordinate to any and all assignments of the same
subrent and other sums made, before the default in question, to
a Mortgagee under any Mortgage permitted by provisions of this
Lease. Landlord may, at Landlord's election, re -enter the
Property and Improvements with or without process of law,
without terminating this Lease, and either or both collect these
sums or bring action for the recovery of the sums directly from
such obligors. Landlord shall receive and collect all subrents
and avails from reletting,,applying them: First, to the payment
of reasonable expenses (including attorneys fees or brokers
commissions, or both, paid or incurred by or on behalf of
Landlord in recovering possession, placing the Property and
Improvements in good condition, and repairing or altering the
Property or Improvements for reletting) Second, to the
reasonable expense of securing new tenants or subtenants; Third,
to the fulfillment of Tenant's covenants to the end of the term,
and; Fourth, to Landlord's uses and purposes. Tenant shall,
nevertheless, pay to Landlord on the due date specified in this
Lease, the equivalent of all sums required of Tenant under this
Lease, plus Landlord's expenses, less the avails of the sums
assigned and actually collected under this provision. Landlord
may proceed to collect either the assigned sums or Tenant's
balances, or both, or any installment or installments of them,
either- before or after expiration of the term, that the period
of limitation shall not begin to run on Tenant's payments until
the due date of the final installment to which Landlord is
entitled, nor shall it begin to run on the payment of the
assigned sums until the due date of the final installment due
from the respective obligors.
12.2.8. Landlord Right to Assume-Tenant Interest
In the event of any default on the part of Tenant in
performing the terms and provisions of this Lease which entitle
Landlord to possession of the Property, Landlord shall have the
immediate right of possession of all real and personal property
and the right to assume any ownership or leasehold interest of
Tenant in any financed or leased real and personal property,
subject to the rights of third -party lenders and equipment
lessors.
62
12.2.9. Termination and Remedy in Damages
If Tenant breaches this Lease and abandons the property
before the end of the term, or if its right to possession is
terminated by Landlord because of Tenant's breach of this Lease,
this Lease terminates. On such termination, Landlord may
recover from Tenant:
(a) The worth at the time of award of the unpaid rent
which had been earned at the time of termination;
(b) The worth at the time of award of the amount by which
the unpaid rent which wold have been earned after termination
until the time of the award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided.
(c) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss for such period
that Tenant proves could be reasonably avoided; and
(d) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease, or which in the
ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred
to in subparagraphs (a) and (b) above is computed by allowing
interest at the Lease Interest Rate. The worth at the time of
award of the amount referred to in subparagraph (c) above is
computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus
one percent.
ARTICLE 13
13.0. FINANCING PROVISIONS
13.1. Leasehold Mortgage Authorized; Fee Not Subordinated
Landlord's fee interest in the Property shall not be
encumbered by or subordinated to any financing by Tenant.
Tenant may encumber Tenant's leasehold estate under one or more
Leasehold Mortgage(s) (as defined in Section 13.4 hereof) and
assign this Lease as security for such Leasehold Mortgage(s).
The Leasehold Mortgage(s) shall affect only Tenants leasehold
63
estate and shall be subject to all of the terms and provisions
of this Lease. Tenant shall provide Landlord with prior notice
of any such Leasehold Mortgage,, and shall accompany the notice
with a true copy of any Leasehold Mortgage, and the note and
the name and address of the Mortgagee (as defined in Section
13.4 hereof).
13.2. Subordination of Rent
If the Tenant defaults under the terms of the senior
Leasehold Mortgage, and the Senior Leasehold Mortgagee acquires
Tenant's leasehold estate, whether by exercising its power of
sale, by judicial foreclosure, or by on assignment in lieu of
foreclosure, Landlord agrees to defer the rents falling due for
a period not to exceed twenty -four (24) months following the
Leasehold Mortgagee's acquisition, conditioned on the following:
1. Payment of all taxes, assessments, and insurance
premiums required by this Lease to be paid by Lessee are
current, or are brought current by Leasehold Mortgagee, and are
kept current by Leasehold Mortgagee;
2. Payments of all utility charges are current or are
brought current and are kept current;
3. The Leasehold Mortgagee performs all Tenant's
obligations for maintaining the Property and improvements in
good order and repair;
4. All income and rents from the operation of the
Property or improvements are held by Leasehold Mortgage in trust
for Landlord;
5. Leasehold Mortgagee shall cure any rent defaults of
Tenant out of the income and rent remaining after paying items
1 through 3, above, and after Leasehold Mortgagee's reasonable
expenses incurred in operating the Property and improvements,
but said expenses shall not include any debt service payments
to Leasehold Mortgagee.
6. Any rent accrued but not paid to Landlord during the
first twenty -four (24) months following the date of Leasehold
Mortgagee's acquisition shall be due and payable at a date
twenty -four (24) months after the date of acquisition by
Leasehold Mortgagee. No interest shall be due on any rent
deferred under this section if it is paid in full by the end of
the twenty - fourth (24th) month. Any rent not paid in full shall
bear interest at the Lease Interest Rate until date paid.
Landlord shall have the right to immediately terminate this
Lease, if all rent is not paid in full by the end of the twenty-
64
0
fourth (24th) month following the date of acquisition by
Leasehold Mortgagee, notwithstanding any other provision of this
Article to the contrary.
7. Rent payable to Landlord under this Lease but not
deferred under this Section, shall recommence at the beginning
of the twenty -fifth (25th) month after acquisition by Leasehold
Mortgagee.
S. If rent has been deferred under this Section, rent
cannot be deferred again until the expiration of five (5) full
years from the date all deferred rent is made current.
For purposes of this section, a. month shall equal thirty
(30) calendar days.
13.3. Notice to Landlord
In the event of any default under a Leasehold Mortgage or
other encumbrance on the Property, the Leasehold Mortgagee (as
defined in Section 13.4 hereof) shall provide notice of default
to Landlord. In the event of any assignment of a Leasehold
Mortgage or in the event of a change of address of a Leasehold
Mortgagee or of an assignee of such Leasehold Mortgage, notice
of the new name and address shall be provided to Landlord.
Tenant shall thereafter also provide Landlord from time to time
with a copy of each amendment or other modification or
supplement to such instruments. All recorded documents shall be
certified as true and "correct copies of official records by the
San Luis Obispo County Recorder and all nonrecorded documents
shall be accompanied by a certification under penalty of perjury
by Tenant or the Mortgagee that such documents are true and
correct copies of the originals.
13.4. Definitions.
As used in this Article 13:
a. The term "Leasehold Mortgage" shall include a
mortgage, a deed of trust or other security instrument by which
Tenant's leasehold estate is mortgaged, conveyed, assigned or
otherwise transferred to secure a debt or other obligation.
b. The term "Leasehold Mortgagee" or "Mortgagee"
shall refer to a holder of a Leasehold Mortgage with respect to
which the notice provided for by Section 13.3 hereof has been
given and received and as to which the provisions of this
Article 13 are applicable.
65
C. The term "Senior Leasehold Mortgage" shall mean
a Leasehold Mortgage that is first in time, right or priority
over all other security interests in the leasehold estate at the
time in question.
d. The term "Senior Leasehold Mortgagee" shall refer
to a holder of a Senior Leasehold Mortgage.
13.5. Contents of Notice. Leasehold Mortgage
a. The Leasehold Mortgage shall provide that any proceeds
from fire or extended coverage insurance shall be used for
repair or rebuilding of the leasehold ,improvements and not to
repay part of the outstanding mortgage.
b. The Leasehold Mortgage shall contain provisions that
all notices of default under any note and deed of trust must be
sent to Landlord and Tenant and that Landlord shall have the
right to cure any default if Tenant fails to do so. Landlord
shall have forty -five (45) days in which to cure any default
under the documents after the time for Tenant to cure it has
expired. Neither landlord's right to cure any default nor any
exercise of such a right shall constitute an assumption of
liability under the note or mortgage. If any default under the
note and mortgage is noncurable, it shall not be grounds for
foreclosure of the mortgage if Tenant, or Landlord in possession
of the Property, promptly performs all other provisions of the
note and mortgage.
13.6. Request for Notice. of .Default for Landlord's
Protection
On the recording of the Leasehold Mortgage, Tenant shall,
at Tenant's expense, cause to be recorded in the office of the
San Luis Obispo County Recorder a written request executed and
acknowledged by Landlord for a copy of notices of default and
all notices of sale under the Leasehold Mortgage as provided by
California law. Any recorded or other Leasehold Mortgage shall
provide that a copy of any notice of default and copy of any
notice of sale under any such Leasehold Mortgage shall be
delivered to Landlord in the manner and at the address specified
in Section 15.05 simultaneously with any such notice to Tenant.
13.7. Default Notice
Landlord, upon providing Tenant any notice of default under
this Lease, shall at the same time provide a copy of such notice
to the Leasehold Mortgagee. Notice by Landlord to Tenant shall
66
be deemed to have been duly given even in the absence of notice
to the Mortgagee; provided, however, that the time periods with
respect to such Mortgagee shall not commence until notice is
given to such Mortgagee. From and after such notice has been
given to the Leasehold Mortgagee, such Leasehold Mortgagee shall
have the same period, after the giving of such notice upon it
for remedying any default (or acts or omissions which are the
subject matter of such notice) or causing the same to be
remedied, subject to the provisions of Section 13.2 as is given
Tenant. Landlord shall accept such performance by or at the
instigation of such Leasehold Mortgagee as if the same had been
done by Tenant. Tenant authorizes the Leasehold Mortgagee to
take any such action at such Leasehold Mortgagee's option and
does hereby authorize entry upon the Property by the Leasehold
Mortgagee for such purpose.
Any notice to be given by Landlord to a Leasehold Mortgagee
pursuant to any provision of this Article 13 shall be deemed
properly addressed if sent to the Leasehold Mortgagee who served
the notice referred to in Section 13.3 hereof at the address
stated in such notice unless notice of a change of ownership
has been given to Landlord pursuant to said Section 13.3.
13.8. Mortgagee Request for Lease Changes
Except for subordination of Landlord's fee ownership in the
Property or the Rent or Additional Rent due under this Lease,
Landlord agrees to modify this Lease in such a manner which may
be reasonably requested by a proposed institutional mortgagee
hereunder; provided the modifications do not substantially
change the rights and obligations of the Parties hereunder.
ARTICLE 14
14.0. REFINANCING OR TRANSFER
14.1. Refinancing
a. Landlord shall receive in cash from Tenant, or any
Affiliate of Tenant who is obtaining the Refinancing, the
lender, or through escrow at the time of the loan closing for
any Refinancing a sum equal to Six Percent (6 %) of Net
Refinancing Proceeds. This sum shall constitute Additional Rent
under this Lease.
67
G
b. "Refinancing" shall mean any financing, other than the
construction loan for the Initial Construction and the original
"take out" financing which replaces the construction loan which
is secured in whole or part by any interest in the Property or
any portion thereof, or the improvements constructed thereon,
or the Lease, which is held by Tenant of any Affiliate of
Tenant.
C. "Net Refinancing Proceeds' shall mean and include the
maximum principal amount of any Refinancing, less:
(i) the principal balance (excluding accrued or
delinquent interest, which exclusion shall also apply to any
amounts of such interest as may have been added to the
principal) of any existing encumbrances;
(ii) loan fees charged by the lender, in an amount
not to exceed those customarily charged by institutional lenders
for similar loan amounts and specifically designated as loan
fees and not as recovery of processing, appraisal, filing fees,
etc.; and
(iii) processing, legal, appraisal, filing, recording
and other fees associated with obtaining a loan which
cumulatively shall not exceed amounts customarily charged by
institutional lenders for a similar amount of principal.
d. "Affiliate of Tenant" shall mean any natural or legal
person or entity that has directly or indirectly (i) an
ownership interest in Tenant, or (ii) an ownership interest in
any person or entity that has an ownership interest in Tenant;
as either shareholder partner, joint venturer or otherwise.
e. Tenant shall provide Landlord with copies of all
documentation of any Refinancing, including without limitation
any note, deed of trust, assignment, contract of sale, or other
written evidence of such transaction.
14.2. Transfer
a. Landlord shall receive in cash, from Tenant, any
Affiliate of Tenant who assigns or transfers under this section,
the purchaser, or through escrow, at the time of any Assignment
or Transfer by Tenant or any Affiliate of Tenant, a sum equal
to Nine Percent (9 %) of Net Transfer Proceeds. This sum shall
constitute Additional Rent under this Lease.
b. "Transfer" shall mean the sale, exchange, assignment
or other transfer or disposition of Tenant's interest or any
port-ion thereof in the Property or the improvements constructed
68
0 0
thereon, the Lease, or the Leasehold estate, but does not
include (i) the sale, assignment or other disposition, directly
or indirectly, of less than a controlling interest of any stock
of any corporation that is Tenant or that is a general partner
of any partnership that is Tenant, or (ii) the issuance of any
additional stock in any corporation that is Tenant or that is
a general partner of any partnership that is Tenant, or (iii)
any Refinancing subject to Section 14.1 above, or (iv) any
sublease, occupancy, license or concession agreement which
merely demises space on the Property and conveys no other
interest, or (v) any sale, assignment or other disposition prior
to issuance of Certificate of Occupancy; or (vi) any transfer
resulting from divorce or death or a transfer to a revocable
trust where the transferor is the grantor and has the power to
revoke.
C. The term "Net Transfer Proceeds" shall mean all
payments (including any interest component thereof) together
with the value of all tangible and. intangible property received
and collected in connection with any Transfer, less the amount
paid to acquire the interest that is being transferred
( "Purchase Price "). For the initial transfer after the issuance
of the Certificate of Occupancy only, the Purchase Price, for
purposes of computing the Net Transfer Proceeds, shall be deemed
to be the Audited Development Costs.
d. "Audited Development Costs" shall mean the sum of the
direct and indirect construction costs and eligible start-up
costs for the Project Improvements,, as defined in Exhibit "D"
which is attached hereto and incorporated herein by this
reference, which direct and indirect construction costs and
eligible startup costs shall be submitted to Landlord by Tenant
within one hundred eighty (180) days after the issuance of the
Certificate of Occupancy for the Initial Construction and
thereafter audited and certified by an independent Certified
Public Accountant, acceptable to the City, within sixty (60)
days thereafter. Tenant shall pay all costs and expenses in
connection with the independent audit.
ARTICLE 15
15.0. MISCELLANEOUS
15.1. Holding Over
If Tenant shall hold over the leased Property after the
expiration of the term hereof with the consent of Landlord,
either express or implied, such holding over shall be construed
69
to be only a tenancy from month to month, subject to all the
covenants, conditions and obligations contained in this Lease,
including the obligation to pay Rent monthly in advance, in an
amount equal to one- twelfth (1/12) of the annual Project Rent
paid in the last year of the Lease or any extension thereof.
Nothing in this section shall be construed to give Tenant any
right to hold over after the expiration of the Lease or any
extension thereof.
15.2. Attorneys' Fees
In the event that any action or arbitration is brought by
either party as against the other party for the enforcement or
declaration of any right or remedies in or under this Lease or
for the breach of any covenant or condition of this Lease, the
prevailing party shall be entitled. to recover, and the other
party agrees to pay all fees and costs to be fixed by the court
or arbitrator therein including, but not limited to, attorneys'
fees.
15.3. Quiet Enjoyment.
Landlord hereby covenants that Tenant, so long as Tenant
is not in default under this Lease and is paying the Rent and
performing the covenants and conditions of this Lease, shall
quietly have, hold and enjoy the leased Property throughout the
term hereof without interruption or disturbance from Landlord
or any other persons claiming by, through or under Landlord.
15.4. Force Maieure
Except as to the payment of Rent, neither of the Parties
hereto shall be chargeable with, liable for, or- responsible to,
the other for anything or in any amount for any delay caused by
strike, lock out, or labor dispute affecting the Property or the
improvements or any portion thereof, not under the control of
Tenant or Tenant's general contractor; inability to obtain labor
or materials or reasonable substitutes therefore; natural
disasters, fire, earthquake, explosion, flood, hurricane, the
elements, acts of God, or the public enemy, action or
interference of governmental authorities or agents, war,
invasion, insurrection, rebellion, or riots, actions of third
parties, the Pending Litigation defined in Section 4.04 of the
Predevelopment Agreement, other litigation, failure or inability
to abandon Court Street, or any other cause whether similar or
70
dissimilar to the foregoing which is beyond the control of such
Party and without its fault or negligence, and any delay due to
said causes or any of them shall not be deemed a breach of or
default in the performances of this Lease, provided nothing in
this Section 15.4 shall affect the .right of Landlord to
indemnification under Article 9 prior to a termination of this
Lease.
15.5. Notices
Any notice to be given or other document to be delivered
by either party to the other hereunder shall be in writing and
delivered to either party by personal delivery or by depositing
same in the United States mail, duly certified, with postage
thereon fully prepaid and addressed to the party for whom
intended, as follows:
To Landlord:
City Council
c/o City Administrative
Officer
City of San Luis Obispo
990 Palm St.
P. 0. Box 8100
To Tenant:
Interwest Investment Group
ATTN: Marshall Ochylski
7.5 Higuera
San Luis Obispo, CA 93401
San Luis Obispo, CA 93403 -8100
With a copy to the City Attorney
at the same address.
Either party hereto may from time to time by written notice
to the other party designate a different address which shall be
substituted for the one above specified. Notices shall be
effective when received. Any notice or other document sent by
certified mail, as required herein, shall be deemed received
seventy -two (72) hours after the mailing thereof. Notices or
other documents sent by personal delivery shall be deemed
received on the date of such delivery.
15.6. Waive r
No waiver or any breach of any of the terms, covenants,
agreements, restrictions or conditions of this Lease shall be
construed to be a waiver of any succeeding breach of the same
or other terms, covenants, agreements, restrictions and
conditions hereof.
71
15.7. Surrender
Upon the expiration or sooner termination of this Lease,
Tenant shall surrender to Landlord the Property, together with
the improvements then situated thereon, subject to the
provisions of Article 7, in good condition and repair, except
for reasonable wear and tear. If Tenant fails to surrender the
Property to Landlord as set forth herein, Tenant shall indemnify
and hold Landlord harmless from all damages resulting from
Tenant's failure to surrender the Property.
15.8. Binding
Subject to the restrictions set forth herein regarding
ig
assnment of the leasehold estate, each of the terms, covenants
and conditions of this Lease shall extend to and be binding on
and shall inure to the benefit of not only Landlord and Tenant,
but to each of their respective heirs, administrators,
executors, successors and assigns. Any reference in this Lease
to either Landlord or Tenant shall be deemed to include,
wherever applicable, the heirs, administrators, executors,
successors and assigns of such parties, the same as if in every
case expressed.
15.9. Landlord's Right to Enter Premises
Landlord and its authorized representatives shall have the
right to enter the Property at all reasonable times, for any of
the following purposes: to determine whether the Property is in
good condition and whether- Tenant is complying with its
obligations under this Lease; to do any necessary maintenance
and to make any restoration to the Property that Landlord has
the right or obligation to perform; to serve, post or keep
posted any notices required or allowed under the provisions of
this Lease; to post "for sale" signs at any time during the term
of this Lease, so long as such signs make it clear at first
impression it is Landlord's interest alone that is for sale; to
post "for rent" or "for- lease" signs during the last one (1)
year of the term of this Lease or any extension thereof or
during any period while Tenant is in default; to show the
Property to prospective brokers, agents, buyers, tenants or
persons interested in a sale or exchange, at any time during the
term of this Lease; and to do any act or thing necessary for the
safety or preservation of the Property if any excavation or
other construction is undertaken or is about to be undertaken
on any adjacent property or nearby street. Notwithstanding the
foregoing, Landlord shall have the right to enter the Property
at any time, without notice, in the event of an emergency.
Nothing in this Section 15.9 shall affect the City of San Luis
72
E
N
Obispo's ability to carry out its inspection or other
obligations under the San Luis Obispo Municipal Code.
Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance, or other
damage arising out of Landlord's entry on the Property as
provided in this Section 15.9 other than those caused by
Landlord's sole negligence or willful misconduct. Tenant shall
not be entitled to an abatement or reduction of rent if Landlord
exercises any rights reserved in this Section 15.9.
15.10. Disclaimer of Partnership
The relationship of the Parties hereto is that of Landlord
and Tenant. The Parties expressly understand and agree that
Landlord is not in any way, and does not for any purpose become,
a partner of or joint venturer with Tenant in the conduct of
Tenant's business or otherwise.
15.11. Recordation. Memorandum
In accordance with the provisions of Government Code
§37393, this Lease shall be recorded in the official records of
San Luis Obispo County, California. Upon the request of either
party Landlord and Tenant shall execute a Memorandum of this
Lease or any amendment or modification thereof for recordation
in the official records of San Luis Obispo County, California.
15.12. Ouitclaim
At the expiration or earlier termination of this Lease,
Tenant shall. execute, acknowledge and deliver to Landlord within
thirty (30) days after written demand from Landlord to Tenant,
any quitclaim deed or other document required by any reputable
title company to remove the cloud of this Lease from the real
property subject to this Lease..
15.13. Headings
The titles to the sections of this Lease and the Table of
Contents are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part of this
Lease.
73
n
15.14. Covenants and Conditions
Each term and each provision, including, without
limitation, the obligation for the payment of Rent, to be
performed by Tenant or Landlord, as the case may be, shall be
construed to be both a covenant and a condition of this Lease.
15.15. Integration
This Lease, together with the exhibits and documents
incorporated herein by reference, constitutes the entire
agreement between the parties and there are no negotiations,
conditions, representations or agreements regarding the matters
covered by this Lease which are not expressed herein.
15.16. Estoonel Certificate
At any time, and from time to time, within ten (10) days
after notice of request by either party, the other party shall
execute, acknowledge, and deliver to the requesting party, or
to such other recipient as the notice shall direct, a statement
certifying that this Lease is unmodified and in full force and
effect, or, if there have been modifications, that it is in full
force and effect as modified in the manner specified in the
statement. The statement shall also state the date to which the
rent and any other charges have been paid in advance. The
statement shall be such that it can be relied on by any auditor,
creditor, commercial banker, an investment banker of either
party and by any prospective purchaser or encumbrancer of the
Property or Improvements, or both, or of all or any part or
parts of Tenant's or Landlord's interest under this Lease.
Failure by Tenant or Landlord, as the case may be, to
execute, acknowledge and deliver, on request, the certified
statement described above within the specified time shall
constitute acknowledgment by said non- responding party to all
persons entitled to rely on the statement that this Lease is
unmodified and in full force and effect, and that said non -
responding party has no offsets or defenses against the party
who requested the certificate..
15.17. - Severability• Invalidity of Particular Provision
If any term or provision of this Lease (other than the
obligation of Tenant to pay rent or Additional Rent) or the
application thereof to any persons or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term or provision to persons
74
• 0
or circumstances other than those to which it is held invalid
or unenforceable, shall not be affected thereby, and each other
term and provision of this Lease shall be valid and enforced to
the fullest extent permitted by law.
15.18. 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.
15.19. Review by Counsel
Each Party is represented by legal counsel. Each party and
its legal counsel have reviewed this Lease. Any rule of
construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation
of this Lease or any amendments or Exhibits hereto.
15.20. Time of Essence
Time is expressly declared to be of the essence of this
Lease.
15.21. Brokers
Landlord represents and warrants to Tenant, and Tenant
represents and warrants to landlord, that no broker or finder
has been engaged by them, respectively, in connection with any
of the transactions contemplated by this Lease, or to their
knowledge is in any way connected with any of such transactions.
In the event of any such additional claims for brokers' or
finders' fees for consummation of this Lease, then landlord
shall indemnify, save harmless and defend Tenant from and
against such claims if they shall be based upon any statement
or representation or agreement by landlord, and Tenant shall
indemnify, save harmless and defend Landlord if such claims
shall be based upon any statement, representation, or agreement
made by Tenant.
75
15.22. Restrictions on Delivery Hours and Access
Landlord reserves the right to regulate the hours and
location of deliveries and restrict the activities of Tenant
with regard to all deliveries, loading, unloading and servicing
of the Property and the Improvements thereon, as well as the
Court Street Pedestrian Mall, and Tenant agrees to abide by such
regulations of Landlord.
Landlord also reserves the right to restrict and control
access to the Court Street Pedestrian Mall in order to preserve
the public health, safety and welfare.
15.23. Easements and Reservations
Landlord hereby reserves all rights, title and interest in
any and all subsurface natural gas, oil, mineral and water on
or within the property. Landlord also reserves to itself the
right, from time to time, to grant and use such easements,
rights and dedications over, under, along and across the
Property that Landlord deems necessary or desireable, so long
as such easements, rights_, and dedications do not unreasonably
interfere with the use of the Property by Tenant. At Landlord's
request, Tenant shall execute any of the above- mentioned
documents, and failure to do so shall constitute a material
breach of this Lease.
15.24. Non - Merger of Fee and Leasehold Estates
If both Landlord's and Tenant's estates in the Property,
or the Improvements, or both, become vested in the same owner,
this Lease shall nevertheless not be destroyed by application
of the doctrine of merger except at the express election of the
owner and the consent of the Mortgagee or Mortgagees under all
Leasehold Mortgages existing under provisions of this Lease
relating to the purchase or construction of improvements.
15.25. Counterparts
This Lease may be executed in counterparts, each of which
shall be deemed to be an original.
76
7)
IN WITNESS WHEREOF, the Parties hereto have executed this
instrument on this day of , 1990,
at San Luis Obispo, California.
(signatures to be acknowledged for recording)
Attest:
City Clerk Pamela Voges
leasel.doc /vb
1I: 'l a0)F.0) 7��
City of San Luis Obispo
By: Mayor Ron Dunin
TENANT:
Title:
77
4+
LEGAL DESCRIPTION
That portion of Block 17 of the City of San Luis Obispo,
according to the official map filed May 1, 1878 in Book A, Page
168 of Maps in the Office of the County Recorder of the County of
San Luis Obispo, described as follows:
All that portion of Block 17 lying Southeasterly of
Monterey Street, as shown on above mentioned recorded
map; Northwesterly of Higuera Street as described by Deed
recorded in Book 7 of deeds at page 5, Southwesterly of
Osos Street as described by Deed recorded in book J of
deeds at page 186 and Northeasterly of Court Street as
described by Deed recorded in Book J of deeds at page,
232. All of the above mentioned deeds are on record in
the office of the above mentioned County Recorder.
p /courtst. wp
by
(Lease)��.'
O O
LEGAL DESCRIPTION
A parcel of land within the City of San Luis Obispo, State of
California commonly known as Court Street, a street 40 feet in
width, running between Monterey Street and Higuera Street more
particularly described as follows;
Parcel 1.
Court Street, a street 30 feet in width, shown on the maps of the
City of San Luis Obispo and referenced in Deed recorded in Volume
J of Deeds on Page 232 recorded in the office of the County
Recorder of the County of San Luis Obispo, State of California.
Parcel 2.
A parcel of land 10 feet in width described in deed to the City
of San Luis Obispo recorded in Volume 7 of deeds at page 5,
recorded in the office of the County Recorder of the County of
San Luis Obispo, State of California.
wap.p /courtleg.wp
Tin
(Lease)
HAZARDOUS MATERIAL
Definitions
A. HAZARDOUS MATERIAL
_1
U
Hazardous Material means any substance:
(i) the presence of which requires investigation or
remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; or
(ii) which is or becomes defined as a "hazardous waste,t+
"hazardous substance," pollutant or contaminant under any
federal, state or local statute, regulation, rule or ordinance or
amendments thereto including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. section 8601 et seq.) and /or the Resource
Conservation and Recovery Act (42 U.S.C. section 6901 et seq.);
or
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is or becomes regulated by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of California
or any political subdivision thereof; or
(iv) the presence of which on the Property causes or
threatens to cause a nuisance upon the Property or to adjacent
properties or poses or threatens to pose a hazard to the health
or safety of persons on or about the Property; or
(v) the presence of which on adjacent properties could
constitute a trespass by; or
(vi) without limitation which contains gasoline, diesel
fuel or other petroleum hydrocarbons; or
(vii) without limitation which contains polychlorinated
bipheynols (PCBs), asbestos or urea formaldehyde foam
insulation; or
(viii) without limitation radon gas.
(Lease) 1 Oc
B. ENVIRONMENTAL REQUIREMENTS
Environmental Requirements means all applicable present
and future statutes, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities
of the United States, states and political subdivisions thereof
and all applicable judicial, administrative, and regulatory
decrees, judgments, and orders relating to the protection of
human health or the environment, including, without limitation:
1. All requirements, including but not limited to those
pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions,
discharges, releases, or threatened releases of
"Hazardous Materials," chemical substances, pollutants,
contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous
in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal,
transport, or handling of chemical substances,
pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid,
liquid, or gaseous in nature; and
2. All requirements pertaining to the protection of the
health and safety of employees or the public.
C. ENVIRONMENTAL DAMAGES
Environmental Damages means .all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability) , encumbrances, liens, costs, and expenses of
investigation and defense of any claim, whether or not such claim
is ultimately defeated, and of any good faith settlement of
judgment, of whatever kind or nature, contingent or otherwise,
matured or unmatured, foreseeable or unforeseeable, including
without limitation reasonable attorneys' fees and disbursements
and consultants' fees, any of which are incurred at any time as a
result of the existence of "Hazardous Materials" upon, about,
beneath the Property or migrating or threatening to migrate to or
from the Property, or the existence of a violation of
"Environmental Requirements" pertaining to the Property,
regardless of whether the existence of such "Hazardous Material"
or the violation of "Environmental Requirements" arose prior to
the present ownership or operation of the Property, and including
without limitation:
2 C 4 ASR ,+ AS
(Lease) : rM..�_''.^� 1
I� V
(i) Damages for personal injury, or injury to property
or natural resources occurring upon or off of the
Property, (foreseeable or unforeseeable), including,
without limitation, lost profits, consequential
damages, the cost of demolition and rebuilding of any
improvements on real property, interest and penalties;
(ii) Fees incurred for the services of attorneys,
consultants, contractors, experts, laboratories and all
other costs incurred in connection with the
investigation or remediation of such "Hazardous
Materials" or violation of "Environmental Requirements"
including, but not limited to, the preparation of any
feasibility studies or reports or the performance of
any cleanup, -remediation, removal, response, abatement,
containment, closure, restoration or monitoring work
required by any federal, state or local governmental
agency or political subdivision, or reasonably
necessary to make full economic use of the Property or
any other property or otherwise expended in connection
with such conditions, and including without limitation
any attorneys' fees, costs and expenses incurred in
enforcing this agreement or collecting any sums due
hereunder; and
Liability to any third person or governmental
agency to indemnify such person or agency for costs
expended in connection with the items referenced in
subparagraph (ii) herein
(iv) Diminution in the value
damages for the loss of business
use of or adverse impact on the
or usable space or of any amenity
D. INVESTIGATION
Investigation means:
of the Property, and
and restriction on the
marketing of rentable
of the Property.
All investigation, including a study designed to
gather the data necessary to determine the nature and
extent of the contamination, establish preliminary
alternatives for remedial actions and provide a
preliminary cost estimate of the alternatives.
E. REMEDIATION
Remedial action means:
(i) The clean up or removal of released Hazardous
Materials from the environment and the taking of all
actions necessary to minimize or mitigate damage to the
public health, welfare or the environment. Such
actions shall prevent, stop or substantially reduce a
s o1� �-
(Lease)!�_.
rr
release or threat of a release of Hazardous Materials.
(ii) All remedial design defined as a phase of remedial
action that follows the investigation/ and includes
development of engineering drawings and specifications
for a site clean up.
(iii) All recommended remedial action or actual
construction or implementation phase of the site clean
up that follows remedial design and any long -term
action that prevents, stops or substantially reduces a
release or threat of a release of Hazardous Materials.
(iv) A remediation closure report identifying all
remediation action taking place as well as results of
all sampling and testing for.all Hazardous Materials.
jkg ;leasil
(Lease) 4 of g XHIB1 milli
.
EXHIBIT D
DIRECT AND INDIRECT CONSTRUCTION COSTS AND
ELIGIBLE START -UP COSTS
[All capitalized terms used herein shall have the meaning set
forth in the Lease between the City of San Luis Obispo and
to which this exhibit is attached.]
A. The following costs are eligible as Audited Development
Costs: all payments for items listed below made by Tenant
in connection with this Lease for the construction and
development of the Project Improvements on the Property, but
only to the extent that each payment is (i) supported by
original third party source documents, which shall be
Verified as to their authenticity by an independent `
Certified Public Accountant; (ii) directly attributable to
the construction of the Project Improvements, as verified by
an independent Certified Public Accountant; (iii) paid on or
before the date of issuance of the Certificate of Occupancy:
1. Demolition, excavation, site improvements and off -site
improvements costs and /or contracts incurred with respect to
buildings and improvements;
2. Payments, including progress or partial payments, to or
for the account of a contractor or contractors engaged by or on
behalf of Tenant to construct or develop the improvements or any
part thereof;
3. Cost of labor and services;
4. Cost of materials, supplies, machinery, equipment and
apparatus acquired or used (including rental charges for the
machinery, equipment or apparatus hired), less the fair market
.resale value of any machinery, equipment or apparatus acquired
for construction of the Project Improvements;
5. Taxes, rentals, licenses, permits, levies, royalties,
duties, excises and assessments; casualty and surety bonds and
other insurance premiums;
6. Landscaping and other site improvements;
7. Any on or off site, road and /or other improvements
serving the Property;
S. Cost of acquiring or providing required parking where
not included elsewhere in this definition;
9. Architectural, engineering and consulting fees and
expenses;
� 3
(Lease) E _ MI 1
o -
10. Promotional, marketing and advertising fees and
expenses;
11. Tenant allowances and improvements;
124 Space planning costs;
13. Accounting fees and expenses;
14. Legal fees and expenses;
15. Cost to obtain permits, zoning permits and variances;
16. Appraisal fees;
17. Title and survey construction updates;
18. Recording fees;
19. Marketing costs and feasibility reports;
20. Project security until the end of construction;
21. Fees for civil and soils engineers and technical
consultants;
22. Construction inspection and testing fees;
23. Field surveys;
24. Construction plan management scheduling;
25. Permits, bonds and fees for all utilities and agencies
that have jurisdiction;
26. Utility fees and off -site costs;
27. Blueprinting.
B. The following shall be excluded from Audited Development
Costs:
1. Any charge, expense, or allowance for the overhead
(including office rental expense) and general and administrative
expenses of Tenant and its partners;
2. Any salary, other compensation and benefits to any of
the officers or employees of persons which are directly or
indirectly partners in Tenant with respect to any portion of the
time spent by such officers or employees on the construction of
the improvements, or in connection with Tenant;
3 (Lease) EXHIBff
2. PF
I�
3. Any salary, other compensation and benefits to any
employees of Tenant who are located off of the Property and are
not utilized by Tenant in the supervision of or performance of
construction of improvements on the Property;
4. Any fee or allowance to Tenant and its partners for
profit in connection with the improvements. Tenant, at its
option, may cause Tenant or its partners or affiliates to perform
services or provide materials in connection with the construction
and development of the Project Improvements, and (except for
items set forth in Subparagraph 1 and 3 of this Paragraph B,
above) Tenant shall be entitled to include as Audited Development
Costs reimbursement for actual costs incurred for services or
materials, plus a reasonable profit thereon, provided that the
total cost for such services or materials shall not exceed fair
market rates. Tenant shall have the burden of proving that any
charges otherwise excluded under Subparagraph 2, above, were
directly incured for actual construction of the Project
Improvements and that such services do not exceed fair market
rates. Tenant shall identify to Landlord any cost or charge
paid to Tenant, its partners or affiliates, or any officers or
employees of the same, which Tenant includes in Audited
Development Costs;
5. Any payments on the principal or interest portion of
any monies borrowed.
3 of 3 (Lease) 1-F �•.:.:
r2ECORDING RBQUESTF" BY:
WHEN RECORDED MAIL TO:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
AGREEMENT GRANTING OPTION TO EXTEND LEASE
This Agreement Granting Option to Extend Lease ( "the
Extension Agreement ") is made and entered into this _ day of
, 1990, by and between the City of San Luis Obispo,
a chartered municipal corporation of the State of California
(hereinafter called "Landlord") and
(hereinafter called "Tenant "). Landlord and
Tenant (collectively hereinafter the "Parties ") hereby agree as
follows:
ARTICLE 1. PROPERTY.
1.01. Landlord owns the real property commonly known as
999 Monterey Street, in the City of San Luis Obispo, County of
San Luis Obispo, State of California, as more particularly
described in Exhibit "1" attached hereto and incorporated herein
by this reference, together with a certain easement or fee
interest for public right -of -way purposes in Court Street,
between Monterey and Higuera Streets, in the City of San Luis
Obispo, County of San Luis Obispo, State of California, as more
particularly described in Exhibit 112" hereto. The real property
described in Exhibit "1" and that portion of Court Street, if
-1-
(Predevelopment Agreement - Attachment 4)
H
I
any, which may be vacated or abandoned by the City (or the
subject of a valid encroachment permit) and approved for
development, are jointly referred to hereinafter as the
"Property."
1.02. On or about
, 1990, the parties
entered into a Predevelopment Agreement and Agreement to Lease
(hereinafter "the Agreement ") and a Ground Lease (hereinafter the
"Lease ") whereby the Landlord agreed to lease to Tenant, and
Tenant agreed to lease from Landlord, the Property for fifty -five
(55) years (the "Initial Term "), and Tenant further agreed to
develop the Property in accordance with the terms and conditions
of the Agreement and the Lease.
1.03. Tenant desires to extend the Lease beyond the
Initial Term of fifty -five (55) years.
ARTICLE 2. OPTION TO EXTEND.
2.01. Landlord hereby grants to Tenant an option to
extend the Initial Term of the Lease for one to two successive
periods of ten (10) years each, but otherwise on the same terms,
covenants and conditions contained in the Lease, except that the
Project Rent shall be increased as set forth in Article 4, below;
provided that Tenant is not in default under the Lease at the
time of exercise of either option, or at the expiration of the
-2-
F
Initial Term or First Extended Term (as defined in Section 3.01
herein) of the Lease, as applicable, and that the Lease is
otherwise in full force and effect between the Parties.
ARTICLE 3. NOTICE OF EXERCISE OF THE OPTION.
3.01. If Tenant desires to extend the Lease, Tenant
shall give Landlord written notice of the exercise of its option
( "the First Option Notice ") to extend the Initial Term for the
first ten (10) year extended term ( "First Extended Term ") at any
time after the Effective Date of the Lease (as defined in Section
2.01 of the Lease), but at least twelve (12) months prior to the
expiration of the Initial Term, in the manner and at the address
that notices are to be given pursuant to Section 15.5 of the
Lease.
3.02. If Tenant has properly exercised the option for
the First Extended Term, and the Lease is in full force and
effect, Tenant shall have the right at any time during the First
Extended Term, but at least twelve months prior to the expiration
of the First Extended Term, to further extend the term of the
Lease for the second ten (10) year extended term ( "Second
Extended Term ") by giving written notice of the exercise of the
option (the "Second Option Notice ") to Landlord in the manner and
at the address that notices are to be given pursuant to Section
15.5 of the Lease.
-3-
r'1
3.03. If Tenant is in default under the provisions of
Article 12 of the Lease, which default has not been cured on the
date of delivery of the First or Second Option Notice pursuant to
Article 3, such Option Notice(s) shall not be effective, or if.
Tenant has committed an event of default pursuant to Article 12
hereof,which has not been cured on the date any extended term is
to commence, such extended term shall not commence and this Lease
shall expire at the end of the Initial Term or the First Extended
Term, as applicable.
ARTICLE 4. PROJECT RENT.
4.01. Protect Rent for First.Extended Term. At the
expiration of the Initial Term of the Lease, the Project Rent (as
defined in Section 3.3 of the Lease) for each year of the First
Extended Term shall be paid in the same manner as provided in
Section 3.1.2. of the Lease, and shall be the greater of Minimum
Rent, Annual Adjusted Rent, or Percentage Rent as defined in
subsections a., b., and c., below:
a. Minimum Rent
Tenant shall pay a minimum annual rent ( "Minimum
Rent ") which shall be the greater of:
(i) Nine percent (9 %) of the Fair Market Value of
the Property, valued no earlier than one hundred eighty (180)
-4-
( i
days prior to the expiration of the Initial Term and no later
than the first day of the First Extended Term, as defined in and
determined in accordance with the provisions of Section 3.9. of
the Lease; or
(ii) The Minimum Rent as previously determined in
the Initial Term in 2043; or
(iii) The five (5) year average of Annual
Adjusted Rent, as defined in Section 3.6. of the Lease and
computed in accordance with the method set forth in Section
3.5.2.c. of the Lease.
b. Annual Adjusted Rent
Tenant shall pay the greater of Minimum Rent,
Percentage Rent (defined below), or Annual Adjusted Rent (as
defined and determined in accordance with Section 3.6. of the
Lease) .
C. Percentage Rent
Tenant shall pay the greater of Minimum Rent, Annual
Adjusted Rent, or Percentage Rent (as defined and determined in
accordance with Section 3.7. of the Lease).
d. Proration
Any portion of a calendar year remaining at the
beginning or end of the First Extended Term shall be prorated, on
a daily basis, if applicable, in accordance with the payment
-5-
terms of subparagraphs a., b., and c., above. Any Annual
Adjusted Rent or Percentage Rent shall be paid within 180 days
after the end of the first partial year of the First Extended
Term.
4.02. Proiect Rent for Second Extended -Term. At the
expiration of the First Extended Term of the Lease, the Project
Rent as defined in Section 3.3 of the Lease for each year of the
Second Extended Term shall paid in the same manner as provided in
Section 3.1.2. of the Lease, and shall be the greater of Minimum
Rent, Annual Adjusted Rent, or Percentage Rent as defined in
subsections a., b., and c., below:
a. Minimum Rent
Tenant shall pay a minimum annual rent ( "Minimum
Rent ") which shall be the greater of:
(i) Nine percent (9%) of the Fair Market Value of
the Property, valued no earlier than one hundred eighty (180)
days prior to the expiration of the First Extended Term and no
later than the first day of the Second Extended Term, as defined
in and determined in accordance with the provisions of Section
3.9. of the Lease; or
(ii) The Minimum Rent as previously determined in
the First Extended Term; or
The five (5) year average of Annual
Adjusted Rent, as defined in Section 3.6. and computed in
-6-
accordance with the method set forth in Section 3.5.2.c. of the
Lease.
b. Annual Adiusted Rent
Tenant shall pay the greater of Minimum Rent,
Percentage Rent (defined below), or Annual Adjusted Rent (as
defined.and determined in accordance with Section 3.6. of the
Lease) .
C. Percentage. Rent.
Tenant shall pay the greater of Minimum Rent, Annual
Adjusted Rent, or Percentage Rent as defined and determined in
accordance with Section 3.7. of the Lease.
d. Proration
Any portion of a calendar year remaining at the end of
the Second Extended Term shall be prorated, on a daily basis, if
applicable, in accordance with the payment terms of subparagraphs
a., b., and c., above. Any Annual Adjusted Rent or Percentage
Rent shall be paid within 90 days after the expiration of the
Second Extended Term.
4.03. Payment Procedure. If for any reason the Project
Rent is not determined prior to the expiration of the Initial.
Term, or the First Extended Term, as applicable, then, until the
Project Rent is determined, Tenant shall pay in advance as
-7-
•
9
Project Rent to Landlord, an amount equal to the Project Rent
otherwise due to Landlord for the preceding twelve months, and
when the Project Rent is subsequently determined, Tenant shall
pay to Landlord the difference, if any, between the Project Rent
paid and the amount which would have been paid had the Project
Rent been determined prior to the expiration of the Initial Term,
or the First Extended Term, as applicable, together with interest
on such difference at the Lease Interest Rate as defined in
Section 3.4. of the Lease, such interest to accrue from the date
the Project Rent was due to the date of payment of such
difference.
4.04. Holding Over: Project Rent Doubles. In the event
Tenant does not extend the Initial Term or the First Extended
Term of this Lease as herein provided and holds over beyond the
expiration of the applicable term, such holding over shall be
deemed a month -to -month tenancy only and the Project Rent shall
double. Tenant shall pay Landlord an amount equal to one -sixth
(1 /6th) of the Project Rent due to Landlord for the twelve months
preceding the expiration of the applicable term, on the first day
of each and every month thereafter until the tenancy is
terminated.
ARTICLE 5. TERMINATION OF EXTENSION AGREEMENT.
This Extension Agreement shall terminate as of the earlier
of (a) the date twelve (12) months prior to the expiration of the
-8-
Initial Term of the Lease if the First Option Notice has not been
timely given, or (b) as of the date twelve (12) months prior to
the expiration of the First Extended Term, if the First Option
Notice has been given, but the Second Option Notice has not been
given, or (c) upon sooner termination of the Lease.
ARTICLE 6. QUITCLAIM.
If the Lease is terminated, or the Initial Term or the First
Extended Term expires without .Tenant timely delivering the
appropriate option notice, Tenant shall, within ten (10) days
written request by Landlord, execute, acknowledge and deliver a
quitclaim deed to Landlord. Should Tenant fail to do so, Tenant
shall defend, indemnify and hold. Landlord harmless from any cost
and /or expense, including attorney's fees, Landlord incurs as a
result of Tenant's failure to execute the quitclaim deed.
ARTICLE 7. ATTORNEY'S FEES.
If it becomes necessary for either party to take any action
to enforce this Extension Agreement, or any of its terms, the
prevailing party shall be entitled to payment of its reasonable
attorney's fees and costs by the other party.
ARTICLE 8. ENTIRE AGREEMENT.
This Extension Agreement contains the entire agreement of
the Parties with respect to the matters set forth herein. This
Extension Agreement may not be altered or otherwise modified
except by writing executed by the Parties.
ARTICLE 9. ASSIGNMENT OR TRANSFER
The restrictions set forth in the Agreement and the Lease
relating to assignment or transfer apply to this Extension
Agreement. Subject to those restrictions, each of the terms,
covenants and conditions of this Extension Agreement shall extend
to and be binding on and shall inure to the benefit of Landlord
and Tenant, and their respective successors and assigns.
ARTICLE 10. HEADINGS
The titles to the Articles of sections hereof are not a part
of this Extension Agreement and shall have no effect upon the
construction or interpretation of any part hereof.
ATTEST:
Pamela Voges, City Clerk
LANDLORD
City of San Luis Obispo
By Mayor' Ron Dunin
—10—
e
OPTION.AGM /VB
c o
TENANT
By:
By.
-11-
LEGAL DESCRIPTION
That portion of Block 17 of the City of San Luis Obispo,
according to the official map filed May 1, 1878 in Book A. Page
168 of Maps in the Office of the County Recorder of the County of
San Luis Obispo, described as follows:
All that portion of Block 17 lying Southeasterly of
Monterey Street, as shown on above mentioned recorded
map; Northwesterly of Higuera Street as described by Deed
recorded in Book 7 of deeds at page 5, Southwesterly. of
Osos Street as described by Deed recorded in book J of
deeds at page 186 and Northeasterly of Court Street as
described by Deed recorded in Book J of deeds at page
232. All of the above mentioned deeds are on record in
the office of the above mentioned County Recorder.
p /courtst.wp
by
(Option Agreement - Exhibit 1)
l�
LEGAL DESCRIPTION
n
A parcel of land within the City of San Luis Obispo, State of
California commonly known as Court Street, a street 40 feet in
width, running between Monterey Street and Higuera Street more
particularly described as follows;
Parcel 1.
Court Street, a street 30 feet in width, shown on the maps of the
City of San Luis Obispo and referenced in Deed recorded in Volume
J of Deeds on Page 232 recorded in the office of the County
Recorder of the County of San Luis Obispo, State of California.
Parcel 2.
A parcel of land 10 feet in width described in deed to the City
of San Luis Obispo recorded in Volume 7 of deeds at page 5,
recorded in the office of the County Recorder of the County of
San Luis Obispo, State of California.
wap.p /courtleg.wp
(Option Agreement - Exhibit 2)
ATTACHMENT 5
IDENTITIES AND OWNERSHIP INTERESTS
OF PROJECT DEVELOPER
Interwest Investment Group, a California corporation, whose
shareholders interests are:
Tom Sykes 50%
Marshall Ochylski 50%
(Predevelopment Agreement - Attachment 5)
r;
NOTES:
ATTACEMENT 6
SCREDULE OF PERFORMANCE
n
1. Capitalized terms have the meaning set forth in the
Predevelopment Agreement and Agreement To Lease ( "this Agreement "),
including attachments, of which this Attachment 6 is a part.
2. All times set forth herein are subject to the applicable
provisions of Section 5.03 of the Predevelopment Agreement.
3. The times set forth in this Schedule of Performance are
"outside" dates for purposes of defaults, remedies and satisfaction
of conditions, and the City and the Project Developer shall act
diligently to perform and satisfy conditions under this Agreement
at such earlier times as can be reasonably accomplished.
4. If any of the dates stated herein are in conflict with
dates, schedules, or timeframes set forth in this Agreement or the
Ground Lease, the dates in this Agreement or the Ground Lease shall
prevail.
ACTION DEADLINE
1. Project Developer to submit
to City information
required by Section 2.01(c)
of this Agreement relating
to the proposed development
team, and identity of
Project Developer's
architects and engineers.
2. City to approve or
disapprove the proposed
development team,
architects, and engineers.
3. Project Developer to submit
complete Final Planned
Development- ( "PD")
application and plans.
Not later than seventy -five (75)
days after the date of execution
of this Agreement.
As set forth in Sections 2.01(c)
and (d) of this Agreement.
Not later than ninety (90) days
after City approves proposed
development team.
4. City to certify as complete Not later than ninety (90) days
for processing the Final after Project Developer submits
PD application and plans, a complete Final PD application
and schematic ARC plans. and plans, subject to extension
by City if modifications or
revisions are required. The
parties agree to this extension
of time under Government Code
§65943(d).
( Predevelopment Agreement - Attachment 5)
Schedule of Perforce
Page 2
5. City to prepare and submit
application and plans for
processing lot line
adjustment and
reparcelization of the
Property to include that
portion of Court Street to
be abandoned, and request
approval of Certificate of
Compliance.
6. City to take final action
on the Final PD Plan, Final
ARC Plan, partial
abandonment of Court
Street, lot line adjustment
and Certificate of
Compliance.
Not later than sixty (60) days
after application for Final PD
Plan is certified complete.
Not later than one hundred .
eighty days (180) after City
certificatio► of application
and plans for Final PD and
Schematic ARC approval as
complete, subject to extension
by City if modifications or
revisions required.
7. City to provide preliminary Not later than sixty (60) days
checklist of "special or from date of City approval of
unusual Uniform Building Final PD Plan.
Code and Uniform Fire Code
construction requirements.
8. Project Developer to submit
preliminary construction
plans and specifications,
and preliminary
construction cost estimates
for Project to City
Administrative Officer
(ICAO") for Landlord
approval under Section
6.1.2. of the Ground Lease.
9. CAO to approve, approve
with changes, or disapprove
preliminary construction
plans and specifications;
CAO to review cost
estimates.
10. Project Developer to submit
construction permit
application, final
construction plans and
specifications, and final
cost estimates to City.
Not later than one hundred
eighty (180) days from the date
of City approval of Final PD
Plan.
Not later than thirty (30) days
from the date of City receipt
and certification thereof,
subject to extension by City if
modification is required, or if
reviewed by City Council.
Not later than sixty (60) days
from the date of CAO approval
of preliminary construction
plans and specifications.
Schedule of Perfoi- -mince
Page 3
11. Project Developer to submit
to City identity of Project
Developer's contractor,
together with proposed form
of construction contract
for the Project
Improvements.
Not later than sixty (60) days
from the date of CAO approval
of preliminary plans and
specifications.
12. City to approve or Not later than (60) days from
disapprove identity of the date of receipt thereof,
Project Developer's subject to extension by City if
contractor and form of modification is required or if
construction contracts. reviewed by the City Council.
13. Project Developer to submit
evidence of commitments for
Project Improvement
construction and long -term
financing, and evidence of
equity available to secure
said financing.
14. City to approve or
disapprove Project
Developer's evidence of
financing and satisfaction
of Project Developer's
equity requirement.
15. City to design, receive
bids and award contract
for construction of public
improvements that it wishes
to coordinate with
construction of Project
Improvements.
Not later than ninety (90) days
from the date of CAO approval
of preliminary construction
plans and specifications, but
in no case later than sixty (60)
days prior to close of escrow.
Not later than thirty (30) days
from date of receipt of evidence
of financing commitments and
satisfaction of Project
Developer's equity requirement.
Prior to close of escrow, or
such later date as determined
by the City Engineer.
16. Project Developer to submit Not later than sixty (60) days
to City identity of prior to close of escrow.
construction manager and
proposed operator, and
preliminary tenant
commitments.
Schedule of PerfOAce
Page 4
17. Project Developer to submit
to City: retail marketing
p l a n; p u b l i c
safety /security plan;
transportation systems
management plan;
maintenance plan for Court
Street, public balconies,
atrium and other public
interior spaces, and
parking garage;
parki.ng /construction
management plan; and
cultural resource
protection plan and water
conservation plan.
18. City to approve, approve
with changes, or disapprove
items in Paragraphs 16 and
17.
19. Project Developer to
inspect, evaluate, and if
deemed necessary by City
Engineer, agree to repair
the creek culvert crossing
the property.
20. City Engineer to aid in
inspection and evaluation
of creek culvert.
21. Project Developer to
initiate a subsurface
archaeological evaluation
of the Property.
22. Project Developer to submit
plans for prior City
approval for boxing and
relocating on -site trees,
as required by Final PD
Plan, and shall box trees.
23. Project Developer to
coordinate with responsible
agencies on child care
facilities and obtain
required permits and
licenses.
Not later than sixty (60) days
prior to close of escrow.
Not later than t_hir
from the date of
respective item,
extension by
modifications or
required.
ty (30) days
receipt of
subject to
City if
revisions
Not later than thirty ( 3 0) days
prior to close of escrow.
Concurrently with Paragraph 19.
Not later than ninety (90) days
prior to close of escrow.
Not later than ninety (90) days
prior to close of escrow.
Not later than thirty (30) days
prior to close of escrow.
Schedule of Perfox,ance
Page 5
24. City to prepare an
environmental monitoring
program for Project and
coordinate with Project
Developer on its
implementation.
Not later than thirty ( 3 0 ) days
prior to close of escrow.
25. Project Developer to design Not later than sixty (60) days
sidewalk bulbouts on prior to close of escrow.
Monterey and Higuera
Streets, in coordination
with City.
26. Project Developer to Not later than sixty (60) days
provide plans for a transit prior to close of escrow.
shelter on or near the
property, in coordination
with City.
27. Project Developer to pay
all fees, including traffic
impact fee, administrative
fees, construction permit
fees, and other fees
determined necessary by
City (excluding parking -
in -lieu fee).
28. Project Developer to
provide evidence of
insurance and bonds to
approval of City Attorney.
29. Parties to open escrow with
Title Company.
30. Project developer to obtain
all required construction
permits.
31. Parties to deposit into
escrow executed Ground
Lease and option to extend
Ground lease, together with
all other documents
required to close escrow.
32. Project Developer and City
to complete all actions
necessary to close escrow.
Prior to or concurrent with
close of escrow.
Not later than sixty (60) days
prior to close of escrow.
Not later than thirty (30) days
prior to close of escrow.
Prior to or concurrent with
close of escrow.
Prior to close of escrow.
Prior to close of escrow.
n
Schedule of Perfor:..ace
Page 6
33. Close of escrow, conveyance
of leasehold interest to
Project Developer.
34. Construction of Project
Improvements.
sched2.wp
revised 6/5/90
Within fifteen (15) days of the
satisfaction of all conditions
for close of escrow, but in any
event not later than seven
hundred thirty (730) days after
the date of execution of this
Agreement (or as said date is
extended pursuant to this
Agreement).
Within times set forth in the
Ground Lease.
Form No. 1068 -1 REV. 7/88 lam'
EAhibit A to Preliminary Report
S� �1F:R /
� C
W�
Preliminary
Report
In response to the herein referenced application for a policy of title insurance, this Company hereby reports
that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance
describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be
sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception herein or not
excluded from coverage. pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms.
The printed Exceptions and Exclusionsfrom the coverageof said Policy or Policies are set forth herein. Copies
of the Policy forms should be read. They are available from the office which issued this report.
This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the
issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed
prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested.
First American Title Insurance Company
SAN LUIS OBISPO COUNTY
899 Pacific Street
San Luis Obispo, California 93401
(805) 543 -8900 — 800 - 992 -8900
'P redevelopment Agreement - Attachment 7)
EXHIBIT A '1
LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (By Policy Type)
I. CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - (7.88)
SCHEDULE B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason at
1. Taxes or assessments which are not shown as existing liens by the records Of any taxing authority that levies taxes Or assessments On real property or by the public records.
Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by me
public records.
Any facts, rights, interests or claims which are not shown by the public records but which Could be ascertained by an inspection of the land or whicn may be asserted by persons
in possession thereof. -
Easements, liens or encumbrances, or claims thereof, which are not shown by the public record.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other (acts which a correct survey would disclose, and which are not shown by the public recortls.
5. (a) Unpolenlea mining claims: (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof: (c) water rights, claims or title to water, whether or not me
matters excepted under (a), (b), or (c) are shown by public records.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage-of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason at:
1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws. ordinances, or regulations) restricting, regulating, prohibiting or relating
to (i) the occupancy, use or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land: (iii) a separation in ownership
or a change in the dimensions or area of the land or any parcel of which the land is or was a part: or (iv) envoronmental protection. or the effect of any violation of these laws,
ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect. lien or encumbrance resulting from a violation
or alleged violation affecting the land has been recorded in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a: notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from
a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. -
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which
has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims, or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant.:
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured
claimant prior to the sate insured became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss Or damage which would not have been sustained if the insured claimant had paid value far the insured mortgage or for the estate or interest insured by this policy.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured. at Date of Policy, or the inability or failure of any subsequent owner of
the indebtedness, to comply with the applicable "doing business" laws of the state in which the land is situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which.anses out of the transaction evidenced by the insured mortgage and is based upon
usury or any consumer credit protection or truth in lending law.
2. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B - 1970 (AMENDED 10.17.70)
SCHEDULE OF EXCLUSIONS FROM COVERAGE
Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoyment
of the land, or regulating the character, dimensions or location of any improvement now or hereafter erected on the land, or prohibiting a separation in ownership or reduction
in the dimensions of area of the land. or the effect of any violation of any such law, Ordinance or governmental regula!ion.
Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at Date of Policy.
Defects. liens. encumbrances, adverse claims, or other matters (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company and not
shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest by this policy and not disclosed
in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder, (C) resulting in no loss or damage to the insured claimant:
(d) attaching or created subsequent to Date of Policy: or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the
estate or interest insured by this policy.
3. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B - 1970 (AMENDED 10- 17.70)
WITH REGIONAL EXCEPTIONS
Vhen the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in Paragraph 2 above
ire used and the following exceptions to coverage appear in the policy.
SCHEDULE B
'his policy does not insure against loss or damage by reason of the matters shown in parts one and two following:
'art One:
Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.
Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons
in possession thereof.
Easements, claims of easement or encumbrances which are not shown by the public records.
Discrepancies, conflicts in boundary lines. shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by public records,
Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to water.
Any lien, or right to a lien, for services, !ubor or meterial heretofore or hereafter furnished, imposed by law and not shown by the public rec -ds.
4. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1970
WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE (AMENDED 10.17 -70)
SCHEDULE OF EXCLUSIONS OF COVERAGE
Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoy-
ment of the land. or regulating the character, dimensions or location of any improvement now or hereafter erected on the land or prohibiting a separation in ownership or a
reduction in the dimensions or area of the land, or the effect of any violation of any such law Ordinance or governmental regulation,
Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at Dale of Policy.
Defects, liens, encumbrances, adverse claims. or other matters (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company and not
shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy or
acquired the insured mortgage and not disclosed in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder;
(c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent insurance is afforded herein as to any
statutory lien for labor or material or to the extent insurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy).
Unenforceability of the lien of the insured mortgage because of the failure of the insured at Date of Policy or of any subsequent Owner of the indebtedness to comply with
applicable ''doing business" laws of the state in which the land is situated.
5. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY- 1970 (AMENDED 10- 17.70)
WITH REGIONAL EXCEPTIONS
When the American Land Titia Association Lenders Policy is used as a Standard Coverage Policy and not as and Extended Coverage Policy. the exclusions set forth in paragraph
4 above are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage by reason of the matters shown in part one following:
Part One:
Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.
2. Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons
in possession thereof.
3. Easements, claims of easement or encumbrances which are not shown by the public records.
». Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by public records.
5. Unpatented mining claims: reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claim or title to water.
6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records.
6. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1987
WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE (10- 21.87)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or tlamage, costs. attorneys' fees or expenses which arise by reason of:
I. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating
to 6) the occupancy, use, or enjoyment of the land: (ii) the character, dimensions or location of any improvement now or hereafter erected on the land: (iii) a separation in owner.
snip or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these
laws. ordinances or governmental regulations. except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation
or alleged violation affecting the land has been recorded in the public records at Date of Policy.
tot Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from
;I elation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
Rights of eminent domain unless notice of the exercise thereof has been recorded in the publicrecords at Date of Policy, but not excluding from coverage any taking which
has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
3. Detects. liens, encumbrances, adverse claims or other matters:
(a) created. suffered. assumed or agreed to by the insured claimant;
(p) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured
claimant prior to the date the insured claimant became an insured under this policy;
(c) resulting . in no loss or damage to the insured claimant:
(C) attaching or created subsequent to Date of Policy (except to Ine extent trial this policy insures the priority of the lien of the insured mortgage over any statutory lien for services.
labor or material or the extent insurance is affordeC herein as to assessments for street improvements under construction or completed at Cate of policy): or
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage.
Unenforceaoiluy of me lien of the insured mortgage because of me inability or failure of the insured at Date of Policy, or the inabilty or failure of any subsequent owner of
me indebtedness. In comply with applicable "doing business' laws of the state in which the land is situated.
5. Invalidity or unenforceability of the Gen of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon
usury or any consumer credit protection a truth in lending law.
.. '•.nv statutory lien for services. labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from
an improvement or -or'•. related to the lane which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the
t nCeoteCness secured by me insured mortgage which at Date of Policy the insured has advanced or is obligated to advance.
7. AMERICAN TITLE ASSOCIATION LOAN POLICY - 1987 (10- 21 -87)
WITH REGIONAL EXCEPTIONS
'Hoe^ :fie American Lanc Title Association :)oficy is used as a Standard Coverage Policy and not as an Extended Coverage Policy ;he exclusions set torn in paracrapn 6 above
_ uses and t .e :OIIOVnnc exceptions t0 coverage appear in me poliCy.
SCHEDULES
This policy does not insure against loss or damage (and t — - )Ompany will not pay costs, attorneys' tees or expenses) h arise by reason of:
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.
2. Any facts, rights, interests. or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making an inquiry of persons
in possession thereor.
3. Easements. claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose. and which are shown by public records
5. Unpatented mining claims: reservations or exceptions in patents or in Acts authorizing the issuance thereof,, water rights, claims or title to water.
6. Any lien, or right to a lien. for services. labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records.
S. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 1987 (10- 21 -87)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of
1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws. ordinances, or regulations) restricting, regulating, prohibiting or relating
to (i) the occupancy. use, or enjoyment of the land: (ii) the character• dimensions or location of any improvement now or hereafter erected on the land: (iii) a separation in owner"
snip or a change in the dimensions or area of the land or any parcel of which the land is or was a part: or (iv) environmental protection, or the effect or any violation of these
laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of defect• lien or encumbrance resulting from a violation
or alleged violation affecting the land has been recorded in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect• lien or encumbrance resulting from
a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, nut not excluding from coverage any taking winch
has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
3. Defect, liens. encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant:
(b) not know to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured
claimant prior to the date the insured claimant became an insured under this policy
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy: or
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy"
9. AMERICAN LAND TITLE ASSOCIATION OWNER POLICY - 1987 (10.21 -87)
WITH REGIONAL EXCEPTIONS
When the American Land Title Association policy is used as a Standard Coverage Policy and not as as Entended Coverage Policy the exclusions set forth in paragraph 8 above
are used and the following exceptions to coverage appear in the policy.
SCHEDULE B
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of
Part One:
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.
2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons
in possession thereof.
3. Easements. claims of easement or encumbrances which are not shown by the public records.
4. Discrepancies. conflicts in boundary lines, shortage In area, encroachments. or any Other facts which a correct survey would disclose. and which are not shown by the public records.
5" Unpatented mining claims: reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights. claims or title to water.
6. Any lien, or right t0 a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records.
10. AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY - 1987
EXCLUSIONS
In addition to the Exceptions in Schedule B. you are not insured against loss, costs, attorneys' fees and expenses resulting from:
1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning o- dinances and also laws and regulations
concerning:
• land use • land division
• improvements on the land • environmental protection
This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date.
This exclusion does not limit the zoning coverage describes in Items 12 and 13 of Covered Title Risks.
2. The right to take the land by condemning it, unless:
• a notice of exercising the right appears in the public records on the Policy Date
• the taking happened prior to the Policy Date and is binding on you if you bought the land without kno•.vina of the taking
3. Title Risks:
• that are created, allowed, or agreed to by you
• that are known to you, but not to us• on the Policy Date - unless they appeared in the public records
• that result in no loss to you
• that first affect yct..:,:fe after the Policy Date - this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks
Failure to pay value for your title.
5. Lack of a right:
• to any land outside the area specifically described and referred to in Item 3 of Schedule A, or
• in streets, alleys, or waterways that touch your land
This. nvniudnn nncc not emir the access coverage in Item 5 of Covered Title Risks.
t AM k:
4 �
ORDER NO: SL40- 869286 CC
October 13, 1989
Diehl and Rodewald.
1011 Pacific Street
San Luis Obispo, California 93401
Attention: Ann Russell
Dated as of September 27, 1989 at 7:30 a.m.
Craig amer - Title Officer
This report is not complete unless it includes a printed cover
setting forth, among other things, a list of the printed
exceptions and exclusions for the policy form(s) as designated
below.
The form of policy title insurance. contemplated by this report
is:
Title to said estate or interest at the date hereof is vested in:
THE CITY OF SAN LUIS OBISPO
The estate or interest in the land hereinafter described or
referred to covered by this Report is:
A FEE
PAGE 1
S Z A AtfE�R,i,
ORDER NO: SLO- 869286 CC
The land referred to in this Report is situated in the State of
California, County of San Luis Obispo, and is described as
follows:
PARCEL 1:
That portion of Block 17 in the City of San Luis Obispo, in the
County of San Luis Obispo, State of California, according to the
Mao thereof recorded May 1, 1878 in Book A. Page 168 of Maps, in
the office of the County Recorder of said County, described as
follows:
Beginning at the intersection of the Southeasterly line of
Monterey Street with the Northeasterly line of Court Street as
widened by Deed to the City of San Luis Obispo dated June 4,
1877, recorded October 11, 1877 in Book J. Page 232 of Official
Records; thence Northeasterly along the Southeasterly line of
Monterey Street, 72.55 feet, more or less, to the most Westerly
corner of the land conveyed to D.W. James, by Deed dated August
17, 1891, recorded August 29, 1871 in Book C. Page 413 of
Official Records; thence Southeasterly along the Southwesterly
line of said land to the Northwesterly line of Higuera Street as
conveyed to the City of San Luis Obispo by Deed dated October 9,
1889 recorded January 11, 1890 in Book 7, Page 5 of Deeds; thence
Southwesterly along said Northwesterly line of Higuera Street, 72
feet more or less, to the Northeasterly line of Court Street
aforementioned; thence Northwesterly along said. Northeasterly
line of Court Street as widened tO the point of beginning.
PARCEL 2;
That portion of Block 17 of the City of San Luis Obispo, in the
City of San Luis Obispo, according to the Official Mao filed may
1, 1878 in Book A, Page 168 of Maps, in the office of the County
Recorder of said Count, described as follows:
Beginning at the Southwesterly corner .of Monterey and Osos
Streets; thence Southwesterly along the Southeasterly line of
Monterey Street, 60 feet and 7 inches, more or less, to the line
of the land of H.H. Carpenter; thence Southeasterly along the
line of the land, 129 feet 5 inches, more or less, to the line of
said land of Clara J. Brooks; thence. Northeasterly along said
line, 60 feet 7 inches, more or less, to the Westerly line, 129
feet 5 inches, more or less, to the point of beginning.
PAGE 2
S� A M E R i
1
Are ±:
ORDER NO: SLO- 869286 CC
PARCEL 3:
That portion of Block 17 in the City of San Luis Obispo, in the
County of San Luis Obispo, State of California, according to the
Map thereof recorded May 1, 1878 in Book A, Page 168 of Maps,in
the office of the County Recorder of said County, described as
follows:
Beginning at the intersection of the Southeasterly line of
Monterey Street with the Southwesterly line of Osos Street as
conveyed to the City of San Luis Obispo by Deed dated July 23,
1877 and recorded September 14, 1877 in Book J. Page 186 of
Deeds; thence along the Southwesterly line of said Osos Street,
South 36 °10' East, 129 feet 5 inches to the most Easterly corner
of the -land conveyed to Olive B. Martin by Deed dated July 30,
recorded July 30, 1928 in Book 54, Page 103 of Official
P.-.. ords, the true point of beginning; thence along the
_.heasterly line of the said land conveyed to Olive B. Martin,
Sc h 54 006' West 60 feet 7 inches to the Northeasterly line of
tr land conveyed to Ysabal Pico, by Deed dated August 7, 1871,
recorded August 29, 1871 in Book C, Page 409 of Deeds; thence
Southeasterly along the Northeasterly line of the land conveyed
by last mentioned Deed, to the Northwesterly line of Higuera
Street as conveyed to the City of San Luis Obispo by Deed dated
October 9, 1889 recorded January 11, 1890 in Book 7 Page 5 of
Deeds; thence Northeasterly along the Northwesterly line of said
Higuera Street to the Southwesterly line of Osos Street
aforementioned; thence Northwesterly along the Southwesterly line
of Osos Street to the true point of beginning.
A-- the date hereof exceptions to coverage in addition to the
p ,ted exceptions and exclusions in said policy form would be as
Lows:
1. Taxes for the fiscal year 1989 -90, a lien not yet due or
payable.
2. "The lien of supplemental taxes assessed pursuant to
Chapter 3.5 commencing with Section 75 of the California Revenue
Code and Taxation Code."
3. The effect of a Map recorded July 1, 1960 in Book 10, Page
72 of Record of Surveys, in the Office of the County Recorder of
San Luis Obispo County, California, purporting to show the herein
described and other land, affects Parcels 1 and 3.
PAGE 3
ST rA1k;R�
ORDER NO: SLO- 869286 CC
4. The effect of a Map recorded March 15, 1978 in Book 32, Page
26 of Record of Surveys, in the Office of the County Recorder of
San Luis Obispo County, California, purporting to show the herein
described and other land, affects Parcel 2.
INFORMATION NOTE:
Taxes for the fiscal year 1988 -89 covering said land;
1st Installment $NO AMOUNT SHOWN, paid
2nd Installment $NO AMOUNT SHOWN, paid
Parcel No. 02- 433 -01
TRA Code 003 -008
Taxes for the fiscal year 1988 -89 covering said land;
1st Installment $NO AMOUNT SHOWN, paid
2nd Installment $NO AMOUNT SHOWN, paid
Parcel No. 02- 422 -02
TRA Code 003 -008
Taxes for the fiscal year 1988 -89 covering said land;
1st Installment $NO AMOUNT SHOWN, paid
2nd Installment $NO AMOUNT SHOWN, paid
Parcel No. 02- 433 -03
TRA Code 003 -008
This report is preparatory to the issuance
Title Insurance. We have no knowledge of
preclude the issuance of said ALTA Policy
100 attached. We are unable to determine
are improvements located on said property
is not known.
Applicable Title Rate is as follows:
Full Rate.
of an ALTA Policy of
any fact which would
with Indorsement No.
whether or not there
and address, if any,
According to the public records, there have been no deeds
conveying the property described in this Report recorded within a
period of two years prior to the date of this Report, except as
follows:
NONE
CC/1h
Plat Map Attached
PAGE 4
g7
o'
OSOS
SANTA
ROSA
cp
I
cx
M:;4
ST
Wn
Am CD
(7) OL
ar
co
g7
o'
OSOS
ST
O
our,
SANTA
ROSA
ST
co
3c
c
ST
O
our,
ST
CD
TORO Sr N I
4
ST
41,
WAW
ST
CD
TORO Sr N I
4
RESOLUTION NO.
N
6829 (1990 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DENYING AN APPEAL OF THE ARCHITECTURAL REVIEW COMMISSION'S ACTION
APPROVING THE ADDITION OF SEVEN APARTMENTS TO THREE LOTS
ON SANDERCOCR, BETWEEN BEEBEE AND CYPRESS STREETS
BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. That this council, after
consideration of public testimony, the application ARC 90 -12, and
the Architectural Review Commission's action, staff recommendations
and reports thereon, makes the following findings:
1. The proposed project will not adversely affect the health,
safety and welfare of persons living or working at the site
or in the vicinity.
2. The proposed project is appropriate at the proposed
location and will be compatible with surrounding land uses.
3. The proposed use conforms to the general plan and meets
zoning ordinance requirements.
4. The proposed use is exempt from environmental review.
5. The four buildings at the rear of the lots at 236, 238, and
240 Sandercodk are of no significant esthetic, cultural,
or historical value, and may be demolished.
SECTION 2. Conditions. That the approval is subject to
the following conditions:
1. Dividing walls between dens and living areas in existing
units shall be removed.
2. Entries to driveways shall be of a textured or stamped
concrete.
3. The fence on the east property line of 240 Sandercock shall
be three feet high, and the retaining wall in front of 238
Sandercock shall be screened wtih landscaping.
R 6829
C 0
Resolution No. 6829 (1990 Series)
ARC 90 -12: 236, 238, 240 Sandercock
Page 2
4. Large trees shall be planted at the rear, east and west
property lines at 236 and 240 Sandercock to prevent
overlook into neighboring yards.
5. The sidewalk at the front of 240 Sandercock, between the
front of the house and the parking area, shall be
simplified to produce a straighter access.
6. The existing "studio apartment" at 238 Sandercock shall be
modified to meet the definition of a studio, or one of the
one - bedroom apartments shall be changed to a studio
apartment.
7. The windows on the west elevation of the new unit at 236
Sandercock shall be modified to avoid overlook.
On motion of Councilwoman Rappa , seconded
by Mayor Dunin and on the following roll call
vote:
AYES: Councilwoman Rappa, Mayor Dunin, and Councilman Reiss
NOES: Councilmembers Pinard and Roalman
ABSENT: None
the foregoing resolution was passed and adopted this 191-h day
of
, 198x.
Mayor Ron Dunin
City VClerk Pam
Resolution No. 6829 (1990 Series)
ARC 90 -12: 236, 238, 240 Sandercock
Page 3
APPROVED:
City A inistrative Officer
Community
Director
}
N-
Cl/
N
RESOLUTION NO. 6828 (1990 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO AUTHORIZING FUNDING TO TWENTY -SIX AGENCIES
IN THE AMOUNT OF $81,0001 FOR FISCAL YEAR 1990 -1991,
THROUGH THE HUMAN RELATIONS COMMISSION
GRANTS -IN -AID PROGRAM
WHEREAS, the City of San Luis Obispo supports non- profit
agencies which provide human services to the residents of the City
of San Luis Obispo; and
WHEREAS, in the past, the City has authorized and distributed
Grants -In -Aid funding to community organizations which provide
human services; and
WHEREAS, funding for the Grants -In -Aid program will be
included in the 1989 -1991 Financial Plan for the City of San Luis
Obispo;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of
San Luis Obispo as follows:
SECTION 1. That certain agencies attached hereto and marked
Exhibit "A" shall be provided funding as is designated in the
same attachment.
SECTION 2. The staff is directed to prepare a contract for
each agency identified in Exhibit "A" and the CAO is
authorized to execute such contracts.
Upon motion of Mayor Dunin , seconded by
Councilman Reiss and on the following roll call vote:
AYES: Mayor Dunin, Councilmembers Reiss, Rappa, and Roalman
NOES: Councilmember Pinard
ABSENT: None
R 6828
RESOLUTION NO. 6828 (1990 SERIES)
Page Two
the foregoing resolution was passed and adopted this 19th day of
June 1990.
Ron Dunin
ATTEST:
Pamela Voglps, City
APPROVED:
HUMAN RELATIONS COMMISSION
FISCAL YEAR 1990.91
GRANTS -IN-AID RECOMMENDATIONS
Aaencv
Casa Solana
SLO Literacy Council
SLO Child Development Center
Women's Shelter Program, Inc.
Alano Club
American Red Cross
4 -H Youth Development
Hotline
Poly Pals Program
EOC Senior Health Screening Program
EOC Family Planning of SLO
Caring Callers
RSVP
Alpha
Easter Seal Society
Mental Health Association
United Methodist Children's Center
Rape Crisis Center of SLO
Chris Jespersen Society
Ad Care Assn.
American Legion Templeton Post 220
Salvation Army
Family Services Center
Long Term Care Ombudsman Services
Hospice
Children's Home Society of CA
Grassroots (ineligible for 1990 -91)
Cal Poly Executive Club
(meant to apply for PCC Gift Funding)
TOTAL
AL \gia2
Exhibit A
Council
approved:
HRC
HRC
89/90
90/91
90/91
Second.
Awe
Reauest
Recom.
Recom.
4,500
10,000
3,555
4,000
2,000
7,000
1,778
2,500
9,000
13,606
7,112
8,000
8,500
11,500
7,112
8,000
0
3,276
0
3,000
7,500
2,667
3,500
0
5,310
1,422
1,600
5,000
6,500
2,667
3,000
480
1,900
577
650
3,000
4,305
2,667
3,000
3,500
7,500
3,110
3,500
750
750
1,333
1,500
1,000
2,000
1,000
3,000
889
1,500
1,000
1,500
889
1,000
4,500
6,000
3,555
4,000
0
8,513
0
5,000
10,432
4,445
5,500
0
9,789
1,778
2,000
0
7,176
1,778
2,000
0
2,000
0
18,000
25,000
12,000
13,500
4,000
6,000
3,555
4,000
1,500
5,000
1,333
1,750
6,000
14,000
4,445
5,000
1,000
3,000
1,333
1,500
3,500
4,000
86,230
186,557
70,000
81,000
Exhibit A
�� � o
��
��
��
RESOLUTION NO. 6827 (1990 SERIES)
REAUTHORIZATION AND AMENDMENT OF THE
FEDERAL COASTAL ZONE MANAGEMENT ACT
WHEREAS, the United States Government established the
management, improvement, and protection of coastal resources
throughout the Nation as priority national goals under the Coastal
Zone Management Act of 1972; and
WHEREAS, amongst other beneficial purposes, the Act encourages
and assists coastal States to exercise their full authority over
the lands and waters in the identified coastal zones by developing
land and water use management programs for each State; and
WHEREAS, the United States Supreme Court ruled by a 5 -4
decision in 1984 (Secretary of Interior v. California) that federal
oil and gas leasing activities in the Outer Continental Shelf were
not matters subject to a consistency review with a State's coastal.
management plan; and
WHEREAS, said ruling not only ended the States' ability to
review federal oil and gas lease sales, it appears contrary to the
original intent of the Coastal Zone Management Act and raises
concerns that the precedent set by this ruling may exempt other
federal activities in the coastal zones from State consistency
review; and
WHEREAS, H.R. 4030 has been introduced in the United States
Congress for purposes of reauthorizing the Coastal Zone Management
Act instituting amendments to subject Outer Continental Shelf lease
sales to the consistency requirements of the Act; and
WHEREAS, Congressmen Leon Panetta and Andy Ireland have
introduced H.R. 543 as a further amendment to the Coastal Zone
R 6827
Resolution No. 6827 (1990 Series)
Page Two
Management Act to specifically and clearly state that all federal
oil and gas lease sales, whether within or outside of the actual
coastal zone, and other federal activities that directly affect the
coastal zone and its sensitive resources must be subject to the
consistency requirement review with a State's coastal management
program; and
WHEREAS, the citizens and City of San Luis Obispo, California,
have a long- standing and documented record expressing concerns with
protecting the sensitive resources of the coastal zone, most
recently related to the affects of federal oil and gas leasing
sales and activities off the coast of Central California; and
WHEREAS, H.R. 4030 and H.R. 543 restore originally- intended
authority of coastal States to consider all federal activities that
affect coastal resources relative to their federally- approved
coastal management programs.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the
City of San Luis Obispo, California, does hereby find the above
recitals are true and correct statements and findings, and does
hereby declare its endorsements and support for H.R. 4030 and H.R.
543 constituting necessary and prudent reauthorization and
amendment to the Coastal Zone Management Act.
Upon motion of Councilman Roalman , seconded by
Councilwoman Pinard and on the following roll call vote:
Resolution No. 6827 (1990 Series)
Page Three
AYES: Councilmembers Roalman, Pinard, Rappa, Reiss, and Mayor Dunin
NOES: None
ABSENT: None
the foregoing resolution was adopted this 19th day of June
1990..
op
yor Ron Dunin
ATTEST:
Pam V61jes, CitO Clerk
APPROVED:
City A inistrative Officer
t tto ney
AL \zoneres
RESOLUTION NO. 6826 (1990 SERIES)
A RESOLUTION OF THE SAN LUIS OBISPO CITY COUNCIL
ADJUSTING RATES FOR SOLID WASTE COLLECTION AND DISPOSAL
EFFECTIVE JULY 1, 1990 AND SUPERCEDING RESOLUTION NO. 6792
BE IT RESOLVED by the San Luis Obispo City Council as
follows:
1. Effective July 1, 1990 the rates for solid waste
collection and disposal shall be those listed on the attached
rate schedule dated July 1, 1990 and incorporated here by
reference. These rates shall be applied to all service bills
issued after July 1, 1990.
2. Upon passage, this resolution shall supersede
Resolution No. 6792 (1990 Series).
3. The city clerk shall furnish copies of this resolution,
as executed, to finance department, public works department and
San Luis Garbage Company.
Councilwoman Councilman
On motion of " Ranna seconded by Reiss ,
and on the following roll call votes
AYES: Councilmembers Rappa, Reiss, Pinard, and Mayor Dunin
NOES: Councilman Roalman
ABSENT: None
the foregoing resolution was passed and adopted this 18th day of
June , 1990.
-WPM"
Attest:
Cit� Clerk Pam Voga-3'
City ministratiye--, Officer
Director dr- Finance
R 6826
CITY OF SAN' LUIS OBISPO
RATE SCHEDULE FOR SOLID WASTE COLLECTION AND DISPOSAL
711/90
SINGLE FAMILY and MULTI -UNIT RESIDENTIAL
GARBAGE CANS or WASTE WHEELER CONTAINERS (PER MONTH)
$8.10 1 cubic yard, 1 collection per week
$4.20 per can or container for collection away from the street curb
Maximum volume and weight per garbage can: 35 gallons and 80 pounds
There shall be charged a monthly rental fee for a waste wheeler container.
These rates shall be superceded by volume -based rates effective 9/1/90.
MULTI -UNIT RESIDENTIAL DUMPSTER CONTAINERS (PER MONTH)
size of
container
(cubic yards)
COLLECTIONS PER WEEK
1
2
3
4
5
6
7
1
$43.00
$64.00
$77.00
$107.00
$134.00
$150.00
$193.00
1.5
$50.00
$73.00
$92.00
$121.00
$145.00
$158.00
$223.00
2
$58.00
$82.00
$107.00
$134.00
$156.00
$167.00
$253.00
3
$71.00
$101.00
$139.00
$178.00
$232.00
$251.00
$337.00
4
$86.00
$129.00
$182.00
$248.00
$309.00
$335.00
$418.00
6
$117.00
$179.00
$251.00
$371.00
$428.00
$472.00
$558.00
8
$150.00
$221.00
$335.00
$495.00
$618.00
$669.00
$755.00
The rates stated above for dumpster containers shall include the monthly container rental fee.
COMMERCIAL GARBAGE CANS (PER MONTH)
number
of
COLLECTIONS PER WEEK
cans
1
2
3
4
5
6
7
1
$9.00
$15.00
$22.00
$25.00
$27.00
$30.00
$34.00
2
$11.00
$22.00
$30.00
$33.00
$36.00
$39.00
$45.00
3
$14.00
$27.00
$37.00
$40.00
$42.00
$45.00
$53.00
4
$17.00
$31.00
$43.00
$47.00
$51.00
$55.00
$65.00
5
$20.00
$36.00
$49.00
$54.00
$60.00
$65.00
$77.00
6
$23.00
$40.00
$55.00
$62.00
$69.00
$76.00
$89.00
7
$26.00
$45.00
$61.00
$70.00
$79.00
$86.00
$101.00
8
$29.00
$49.00
$67.00
$77.00
$87.00
$97.00
$113.00
9
$32.00
$53.00
$73.00
$84.00
$95.00
$106.00
$125.00
10
$35.00
1 $58.00
$80.00
$93.00
$105.00
$117.00
$137.00
Maximum volume and weight per garbage can: 35 gallons and 80 pounds
Additional charge per can per collection: $3.00
Rate Schedule for Solid Waste Collection and Disposal - 711190
Page 2
0
COMMERCIAL WASTE WHEELER CONTAINERS (PER MONTH)
number
of
COLLECTIONS PER WEEK
containers
1
2
3
4
5
6
7
1
$15.00
$22.00
$27.00
$37.00
$46.00
$52.00
$67.00
2
$30.00
$44.00
$53.00
$74.00
$93.00
$104.00
$134.00
3
$35.00
$50.00
$64.00
$83.00
$101.00
$110.00
$154.00
4
$40.00
$57.00
$74.00
$93.00
$108.00
$116.00
$175.00
5
$45.00
$63.00
$85.00
$108.00
$135.00
$145.00
$204.00
6
$49.00
$70.00
$97.00
$124.00
$161.00
$174.00
$233.00
7
$54.00
$79.00
$111.00
$148.00
$188.00
$203.00
$261.00
8
$60.00
$89.00
$126.00
$172.00
$215.00
$232.00
$289.00
9
$65.00
$97.00
$138.00
$193.00
$235.00
$255.00
$348.00
10
$70.00
$106.00
$150.00
$215.00
$256.00
$279.00
$406.00
11
$76.00
$115.00
$162.00
$236.00
$276.00
$303.00
$464.00
12
$81.00
$124.00
$174.00
$257.00
$297.00.
$327.00
$523.00
In addition to the collection rates stated above for waste wheeler containers, there shall be charged a
monthly rental fee for each container.
COMMERCIAL DUMPSTER CONTAINERS (PER MONTH)
size of
container
COLLECTIONS PER WEEK
(cubic yards)
1
2
3
4
5
6
7
1
$32.00
$48.00
$58.00
$80.00
$101.00
$113.00
$145.00
1.5
$38.00
$55.00
$69.00
$90.00
$109.00
$119.00
$167.00
2
$43.00
$61.00
$80.00
$100.00
$117.00
$125.00
$190.00
3
$53.00
$76.00
$105.00
$134.00
$174.00
$188.00
$252.00
4
$65.00
$97.00
$137.00
$186.00
$232.00
$251.00
$314.00
6
$88.00
$134.00
$188.00
$278.00
$321.00
$354.00
$418.00
8
$113.00
$166.00
1 $251.00
$371.00
$464.00
$502.00
$566.00
The rates stated above for dumpster containers shall include the monthly container rental fee.
UNSCHEDULED EXTRA COLLECTIONS
$11.00
1 cubic yard (minimum charge)
$14.00
2 cubic yards
$21.00
3 cubic yards
$28.00
4 cubic yards
Rate Schedule for Solid Waste Collection and Disposal - 7/1/90
Page 3
SINGLE FAMILY and MULTI —UNIT RESIDENTIAL
VOLUME —BASED RATES
(Effective 9/1/90)
ECONOMY RATE
$1.00 per special 33— gallon bag distributed by San Luis Garbage Company
(payable when bags are issued)
STANDARD RATE
$11.00 per month for one wastewheeler container collected once each week
PREMIUM RATE
$15.00 per month for up to one cubic yard (six standard garbage cans) collected
once each week
Maximum volume and weight per garbage can; 35 gallons and 80 pounds
SERVICE AWAY FROM THE STREET CURB
$4.00 additional per month per can or container
Al
�o
_S
RESOL ION NO.
6825 (Series 1990)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO EXTENDING THE 1989 -90 BUDGET FOR
OPERATING EXPENDITURES UNTIL THE 1990 --91 BUDGET IS
APPROVED AND ADOPTED BY THE CITY COUNCIL
WHEREAS, the 1989 -91 Financial Plan.was adopted by the City
Council by Resolution No. 6654 on July 24, 1989; and
WHEREAS, the 1989 -91 Financial Plan included the proposed
budget for 1990 -91; and
WHEREAS, adoption of the 1990 -91 Budget is not expected prior
to July 1, 1990 due to the need for additional review and
discussion.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of San Luis Obispo that it hereby extends the 1989 -90 Budget for
the current level of operations and maintenance to 1990 -91 until
the 1990 -91 Budget is adopted.
On motion of Councilman Roalman
, seconded by
and on the following roll call vote:
Councilman Reiss
AYES: Councilmembers Roalman, Reiss, Pinard,:;.Rappa and Mayor Dunin
NOES: None
I
ABSENT: None
the foregoing Resolution was adopted the 12th day of June 1990.
ATTEST ayor Ron Dunin
�1� - ( )P-1 A /�
13-a-m Toges, C ty C er
APPROVE
Ci y minis ra ive icer
i o
(Z��aS
�l - --
j, r P�'
,�,
� %,�