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HomeMy WebLinkAbout01/05/1993, C-6 - AGREEMENT FOR SAN LUIS OBISPO LITTLE THEATRE TO LEASE A PORTION OF THE OLD LIBRARY BUILDINGcity of sat. AS OBI SPO M i oa 3 i COUNCIL AGENDA REPORT NUMBER. FROM: Ken Hampian, Assistant City Administrative Officer Wayne Peterson, Acting Public Works Director PREPARED BY: David Elliott, Administrative Analyst' / SUBJECT: Agreement for San Luis Obispo Little eatre to lease a portion of the Old Library building CAO RECOMMENDATIONS: By motion, 1) approve the agreement with San Luis Obispo Little Theatre for lease of city-owned property at 888 Morro Street (the Old Library building); and 2) authorize the Mayor to execute the agreement. DISCUSSION: At its meeting on November 17, 1992, the Council reviewed a proposal from San Luis Obispo Little Theatre ( SLOLT) to lease a portion of the Old Library building and authorized staff to negotiate a lease agreement with SLOLT for future Council approval. At the November 17 meeting, the Council discussed several possible lease agreement provisions and reached the following conclusions: 0 The City should not charge SLOLT more than a token rent of $1.00 per year. o The agreement should not impose financial conditions on SLOLT to ensure construc- tion of tenant improvements or to provide for relocation expenses should SLOLT have to vacate the Old Library. 0 If possible without an additional cash outlay, the City should help with construction of a water lateral to serve a code - required fire sprinkler system. The agreement with SLOLT incorporates this direction. FISCAL IMPACT: The agreement will neither cost nor benefit the City financially. SLOLT must bear the entire cash cost of required tenant improvements. To install the water lateral, the City will provide labor and equipment from the streets and water distribution crews, and SLOLT will pay for materials. Also, SLOLT must pay all pro -rated utilities, taxes and other incidental expenses. ATTACHMENT: Agreement for Lease of Property Located at 888 Morro Street AGREEMENT FOR LEASE OF PROPERTY AT 888 MORRO STREET This agreement is made this _ day of . 1993 by and between the City of San Luis Obispo ( "the City ") and San Luis Obispo Little Theatre, a non- profit California corporation, ( "SLOLT "). INTENTIONS The parties to this agreement recognize and acknowledge the following circum- stances: 1. The City owns the premises commonly described as the Old Library, located at 888 Morro Street in the city of San Luis Obispo, California ( "the Old Library "). 2. While the City uses part of the Old Library for office, meeting and storage space, the remaining areas of the Old Library are unoccupied and available for other compatible uses. 3. SLOLT has submitted to the City a proposal to use a portion of the Old Library for its rehearsals, theater performances and business operations. 4. A highly visible and more convenient location downtown would promote fundraising for SLOLT's new theater to be built on property leased from the City at 1010 Nipomo Street. 5. Relocating SLOLT to the Old Library would extend desirable evening activity into the Civic Center and bring more economic activity downtown. 6. Live non - profit community theater activities in the downtown would benefit the community at large. 7. SLOLT's theater operations would put the unoccupied areas of the Old Library to productive use and complement the City operations which would continue there. LEASE STIPULATIONS 8. Term of Agreement. The term of this agreement shall commence upon execution by both parties and expire on December 31, 1998. The term of this agreement shall be subject to the termination provisions of paragraph 22. e_6-o2 Agreement for Lease of Property at 888 Morro Street Page 2 9. Extent and Condition of Premises. SLOLT shall occupy only that portion of the Old Library shown in Exhibits A and B ( "the Premises "). SLOLT shall accept the Premises "as is ". This agreement shall not obligate the City to guarantee the condition of the Premises, the suitability of the Premises for SLOLT's intended use, the duration that the Premises may be safely occu- pied, or the availability of alternate facilities. Should any occurrence (such as fire, earthquake, flood, or the need to repair, improve, or use the Pre- mises) necessitate closing the Premises or a portion of the Premises to the public, SLOLT shall have no recourse to the City for any loss incurred. 10. Rent. For use of the Premises, SLOLT shall pay the City a rent fixed at $1.00 per year for the lease term. If this agreement is extended beyond the original term, the City may begin assessing a rent closer to market value, subject to negotiation. 11. Timely Construction of Improvements. In a timely and professional manner, SLOLT shall complete all improvements required to develop the Premises as a community performing arts theater. If for reasons other than "acts of God" SLOLT fails to complete construction and receive an occupancy release by June 30, 1993, the City may terminate this agreement. Under these circumstances, at the City's option, either all improvements shall become the City's property, or SLOLT shall deliver the Premises free and clear of all improvements at SLOLT's sole expense. 12. Cost of Improvements. SLOLT shall bear the entire cost of required im- provements, including the cost of relocating any City operations within the Old Library. The City's sole responsibility for improvements shall be to provide labor and equipment for construction of a water lateral to serve a new fire sprinkler system within the Old Library. SLOLT shall pay the cost of materials for this water lateral. 13. Cost of Operations. SLOLT shall bear the entire cost of its operations on the Premises, including, but not limited to: A. paying a portion of water, electricity and natural gas bills prorated according to square footage occupied; and B. paying any taxes and fees related to its occupancy of the Premises, including all possessory interest taxes which may be imposed upon SLOLT. e -10-3 Agreement for Lease of Property at 888 Morro Street Page 3 14. Maintenance of the Premises. SLOLT shall provide for: A. janitorial maintenance of the Premises; B. maintenance of the landscaped areas shown on Exhibit A; and C. any repairs it deems necessary to the Premises. 15. Restricted Hours of Operation. SLOLT shall not conduct classes, rehearsals or productions during regular business hours, which are defined as 8:00 a.m. to 5:00 p.m. Monday through Friday, except holidays observed by the City. 16. Minimum Theater Production Level. SLOLT shall annually produce at least 30 weeks of rehearsals and theater performances. If SLOLT fails to maintain this level of production, the City may terminate this agreement with 120 days notice. 17. Relationship of Parties. Under this agreement, the City shall be solely and exclusively a lessor, and SLOLT shall be solely and exclusively a lessee. SLOLT shall not be considered a partner, agent, officer or employee of the City. SLOLT's officers, members, affiliates, volunteers, employees and independent contractors shall not be considered agents, officers or employ- ees of the City. 18. Sub - leasing. With prior written City consent, SLOLT may sub -lease the Premises for up to 30 consecutive days to sub - lessors which will promote the performing arts and the general purposes of this agreement. 19. Assignment. SLOLT shall not assign this agreement to another party without the City's prior written consent. 20. Indemnification. SLOLT shall defend, indemnify and save harmless the City and its agents, officers and employees against any and all claims and demands made because of: A. any damage, injury or death suffered by any person or corporation and caused by any negligent act or omission of SLOLT and its agents, officers and employees under this agreement; B. any damage caused by any negligent act or omission of SLOLT under this agreement to any property of the City and its agents, officers and employees which is in the custody of SLOLT or in proximity to SLOLT's operations; ,44-Al Agreement for Lease of Property at 888 Morro Street Page 4 C. any damage, injury or death suffered by any agent, officer or em- ployee of SLOLT under this agreement, except for claims and de- mands resulting from the negligence or wilful misconduct of the City and its agents, officers and employees; D. infringement or alleged infringement of any copyrights or other similar rights caused by SLOLT under this agreement; and E. SLOLT's negligent violation of any law, any regulation or any term or condition of any permit. SLOLT shall also defend, indemnify and save harmless the City and its agents, officers and employees against any and all expense of investigating and defending against such claims and demands, including, but not limited to, attorney's fees and costs. 21. Insurance. SLOLT shall comply with the insurance requirements for lessees described in Exhibit C. 22. Termination of Agreement. After December 31, 1995, either party to this agreement may give written notice to terminate this agreement without cause effective one year from receipt of the notice. In the event of termina- tion or expiration, SLOLT shall fully cooperate by relocating its operations before the termination or expiration date and by not seeking relocation assistance from the City. By midnight on the termination or expiration date SLOLT shall remove from the Premises all property in its possession or custody and shall leave the Premises in a condition as good as when re- ceived, excepting normal wear and tear. Any property remaining on the Pre- mises after the termination or expiration date shall be deemed abandoned. 23. Notices. All official notices required under this agreement shall be given in writing and submitted by certified mail, postage prepaid and addressed as follows: To the City: Public Works Director City of San Luis Obispo 955 Morro Street San Luis Obispo, CA 93401 To SLOLT: President San Luis Obispo Little Theatre P.O. Box 122 San Luis Obispo, CA 93406 6 -S7 Agreement for Lease of Property at 888 Morro Street Page 5 24. Enforcement Costs and Attorney's Fees. The prevailing party in any action between the parties to this agreement brought to enforce the terms of this agreement may recover from the other party its reasonable costs and attorney's fees in connection with such an action. 25. Entirety and Integrity of Agreement. This document represents the entire and integrated agreement between the City and SLOLT. This document supercedes and negates all prior negotiations, representations, agreements and amendments, either written or oral, regarding the Premises and opera- tion of a community performing arts theater on the Premises. This docu- ment may be amended only by written instrument executed by both the City and SLOLT. All provisions of this agreement are expressly made conditions. This agreement shall be governed by the laws of the State of California. This agreement is executed by the following authorized representatives: For San Luis Obispo Little Theatre: President\ date For the City of San Luis Obispo: Mayor date Attested: City Clerk Approved: d -10 "ro I \ I 9 IJJFF D I I G mo No now1 i LOWER FLOOR - OLD LIBRARY BUILDING AREA TO BE OCCUPIED BY SLOLT LANDSCAPED AREA TO BE MAINTAINED BY SLOLT EXHIBIT A UPPER FLOOR - OLD LIBRARY BUILDING AREA TO BE OCCUPIED BY SLOLT EXHIBIT B H INSURANCE R _UIRE1NffiNTS FOR LESSEES (i AUTO RISKS) Lessee shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee's operation and use of the leased premises. The cost of such insurance shall be borne by the Lessee. Minimum Scope of Irsurance Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence forts CG 0001). 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance (for lessees with employees). 3. Property insurance against all risks of loss to any tenant improvements or betterments. Minimum Limits of Insurance Lessee shall maintain limits no less than: 1. General Liability: 51,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, etcher the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 3. Property Insurance: Full replacement cost with no coinsurance penalty provision. Deductibles and Self- insured Retentions Any deductibles or self - insured retentions must be declared to and approved by the City. At the option of the City, either. the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions The geaeral liability policy is to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of premises owned, occupied or used by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the Crary, its officers, official, employers, agents or volunteers. 2. The Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, em .ployees, agents and volunteers. Any iasunncc or self - insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute With it. 3. Amy failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Lessee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each ins»a.^.ce policy required by this clause shall be endorsed . to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage Lessee shall furnish the City with a certificate 'of insurance showing maintenagce of the required insurance coverage. An original endorsement effecting general liability coverage required by this clause is also to be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before the lease commences. .- EXHIBIT C d-6-9