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HomeMy WebLinkAboutHUNTINGTON BEACH PLAYHOUSE - 2007-08-06Council/Agency Meeting Held if 16 D 7— Deferred/Continued to Ap r ve ❑ C ditionally Approved ❑ Denied Cit ler s Sig a re Council Meeting Date 8/6/2007 Department ID Number ED 07-19 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO HONORABLE MAYORAND CITY COUNCIL ME � N� SUBMITTED BY PIAE� CULBRETH- RAFT DPA CITY AD;1ISRTOR PREPARED BY RON HAYDEN DIRECTOR OF LIBRARY SERV STANLEY SMALEWITZ DIRECTOR OF ECONOMIC DEVELOPMEN SUBJECT APPROVE NONEXCLUSIVE LEASE AGREEMENT WITH THE HUNTINGTON BEACH PLAYHOUSE Statement of Issue Funding Source Recommended Action Alternative Action(s) Analysis Environmental Status Attachments) Statement of Issue The City Council is asked to approve the renewal of a lease agreement with the Huntington Beach Playhouse for the nonexclusive use of the City s Library Theater Funding Source Not applicable Recommended Action Motion to 1 Approve and authorize the Mayor and City Clerk to execute the lease agreement entitled Lease Agreement Between the City of Huntington Beach and the Huntington Beach Playhouse for the Nonexclusive Use of the Public Library Theater (See Attachment #1) pending approval of the City s insurance requirements 2 Make the lease commencement date retroactive to January 1 2007 the date when the last lease term expired Alternative Action(s) 1 Approve other lease terms and conditions between the City and Huntington Beach Playhouse 2 Do not lease the Library Theater to the Huntington Beach Playhouse REQUEST FOR CITY COUNCIL ACTION MEETING DATE 8/6/2007 DEPARTMENT ID NUMBER ED 07-19 Analysis The Huntington Beach Playhouse (Playhouse) has had a nonexclusive lease agreement for the City s Library Theater since the theater opened in 1994 Their most recent agreement was for a five-year term from January 1 2002 through December 31 2006 The Playhouse has been operating on a month -to -month basis since the expiration of the lease, using the terms and conditions of the expired lease On January 29 2007 the City Council directed staff to prepare a new lease agreement with the Playhouse accepting the payment structure proposed by the Playhouse in its letter of January 15 2007 (see Attachments #2 and #3) The City Attorneys office has prepared the attached three-year nonexclusive lease agreement (Attachment #1) This renewal if approved by the Council would extend the term of the lease retroactively from January 1 2007 through December 31 2009 In addition pursuant to the City Council direction, staff will work jointly with the Playhouse Board of Directors to develop plans to expand its subscriber base and marketing strategy The rental fee in the attached agreement is set at $3 004 72 per month ($36 056 64 per year) There is an additional facility charge of $1 00 per occupied seat for each performance with a minimum guarantee of 200 occupied seats per performance With 120 performances scheduled in 2007 the total rental fee and facility charge will equal at least $60 056 64 These fee levels are established for the entire term of the lease With the lease being retroactive to January 1 2007, there is a necessity for a rent credit to the Playhouse for any overpaid rent since the expiration of the last lease on December 31 2006 The rent credit is based upon the per ticket surcharge Since January 1 2007 the Playhouse has been paying $3 00 per ticket with no guarantee based upon the actual ticket sales the rent credit will be calculated The Playhouse offered to surrender the use of the Maddy Room within the Library Library staff will be now be able to rent the Maddy Room to generate additional revenues The Playhouse may also rent the Maddy Room for auditions and rehearsal if available The rental rate for the Playhouse would be based upon the multiple -use non-profit rate Based upon the proposed lease the offset payment would be approximately $41 500 (Attachment #4) This offset is currently factored into the Library budget Revenues from the Playhouse will be deposited into the Library Service Fund (20500205 43165) to offset Library Theater operating costs including bond payments staff and equipment replacement Strategic Plan Goal E-1 Increase community involvement dialogue and outreach by educating residents about opportunities for involvement such as how to donate to projects volunteer access information and offer opinions through the website and other means Environmental Status Not applicable to the lease agreement 2 7/24/2007 11 44 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE 8/6/2007 DEPARTMENT ID NUMBER ED 07-19 Attachment(s) 0 0 NO ® 0 0 1 Lease Agreement Between the City of Huntington Beach and the Huntington Beach Playhouse for the Nonexclusive Use of the Public Library Theater 2 Huntington Beach Playhouse letter to Mayor Coerper and Members of the City Council dated January 16 2007 3 H-Item from February 5 2007 City Council Meeting Directing Staff to prepare Playhouse Lease 4 Library Theater Use Comparison (memo dated February 5 2007 7/24/2007 11 13 AM (11) August 6, 2007, Council/Agency Agenda Page ll 9111 E 15 (City Council/Redevelopment Agency) Approve Revisions and Authorize Execution and Recordation of Subordination Agreements Between the City of Huntington Beach, Huntington Beach Redevelopment Agency and Jamboree Housing Corporation for the Acquisition and Rehabilitation of a Five Unit Apartment Property Located at 17362 Koledo Lane — City Action 1) Approve revised language in and authorize execution and recordation of City Subordination Agreement by the Mayor and City Clerk and Agency Action 1) Approve revised language in and authorize execution and recordation of Agency Subordination Agreement by the Agency Chairperson Executive Director and Secretary Submitted by the Director of Economic Development/Deputy Executive Director Funding Source No additional funding will be required to carry out the requested action Approved 7-0 E-16 (City Council) Approve and Authorize the Mayor and City Clerk to Execute a Three Year Lease Agreement Between the City of Huntington Beach and the Huntington Beach Playhouse for the Nonexclusive Use of the Public Library Theater — 1) Approve and authorize the Mayor and City Clerk to execute the lease agreement entitled Lease Agreement Between the City of Huntington Beach and the Huntington Beach Playhouse for Nonexclusive Use of the Public Library Theater pending approval of the City s insurance requirements and 2) Make the lease commencement date retroactive to January 1 2007 the date when the last lease term expired Submitted by the Director of Economic Development and the Director of Library Services Funding Source Not applicable Approved 4-3, as amended to remove $1 facility charge and to not include use of the Maddy Rog — (Cook, Hansen, Hardy — No) E 17 (City Council) Adopt Resolution No 2007 49 to Levy a Retirement Property Tax for Fiscal Year 2007/2008 to Pay for Pre 1978 Public Safety Employee Retirement Benefits — Adopt Resolution No 2007-49, A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 200712008 to pay for Pre-1978 Public Safety Employee Retirement Benefits of $ 0080 per $100 of assessed valuation Submitted by the Director of Finance Funding Source Not applicable For Fiscal Year 2007/08 it is proposed to levy a tax rate of $ 0080 per $100 of assessed valuation on secured values This proposed tax rate would bring in an estimated $1 973 346 in tax revenue to be used for funding a portion of the cost of pre 1978 public safety employee retirement benefits Approved 4-3 (Carch►o, Cook, Hansen — No) F Administrative Items F-1 (City Council) Approve a City Council Position on Legislation Pending Before the Federal, State, or Regional Governments as Recommended by the City Council Intergovernmental Relations Committee (IRC) Communication from Councilmember Jill Hardy Chair on behalf of Intergovernmental Relations Committee Members Councilmember Don Hansen and Councilmember Keith Bohr transmitting the following ATTACHMENT #1 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND THE HUNTINGTON BEACH PLAYHOUSE FOR NONEXCLUSIVE USE OF THE PUBLIC LIBRARY THEATER THIS LEASE AGREEMENT is made and entered into this 6 7"' day of //(., (a U S 7" , 2007 by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter "Lessor") and the HUNTINGTON BEACH PLAYHOUSE, INC, a California nonprofit corporation (hereinafter "Lessee"), (collectively "Parties") WHEREAS, Lessor owns certain real property (hereinafter "Premises") in the City of Huntington Beach and Lessee desires to lease, on a nonexclusive basis, the aforesaid Premises for community information, education, and cultural enrichment in the manner set forth below NOW, THEREFORE, in consideration of the obligation of Lessee to pay rent as herein provided and in consideration of the other terms and conditions hereof, Lessor hereby grants to Lessee and Lessee takes from Lessor, to have and to hold, a nonexclusive lease (hereinafter "Lease") of the Premises, upon the following terms and conditions SECTION 1 Description of Premises The Premises consist of that certain real property commonly known and described as a portion of the improvement structure and fixtures located at 7111 Talbert Avenue, Huntington Beach, California The premises include (a) the physical structure consisting of (i) the theater (including the stage, auditorium, backstage area, designated storage areas, technical booth, greenroom, and all areas commonly associated with the intended use of the theater), (11) the box office, (in) the lobby, (iv) the theater office, and (v) the kitchen (collectively the "Theater"), and (b) all fixtures, supplies, and personal property, as identified and itemized in the plans and specifications of the Central Library expansion documents (collectively, the "Personal Property") which now or hereafter is owned or held by Lessor and located in or about the Theater or attached thereto or used in conjunction with the operation thereof The Premises does not include and this Lease does not encompass use of the Maddy Room SECTION 2 Nonexclusive Use It is acknowledged by the Parties that Lessor intends to enter into other tenancy arrangements, including, but not limited to, daily or periodic use permits or rental agreements with various business, professional, artistic dance and other community groups and organizations In no event, however, shall Lessor lease or otherwise rent the Premises, or portion thereof, to any other community theater group for the purpose of producing and performing its theater season without first receiving Lessee's prior written consent SECTION 3 Permitted Use The Premises are let on a nonexclusive basis for the purpose of producing and performing theatrical productions Lessee's use shall be 1 270 hours per calendar year, according to an annual Theater Season schedule (the "Annual Schedule ) submitted from Lessee to Lessor Lessee shall submit the Annual Schedule to Lessor on or before May I" of each year during the term of the Lease, and any extension thereof and Lessor shall return written confirmation of the 1 06 128/9527 Annual Schedule on or before June 1st of each year during the term of the Lease, and any extension thereof In addition, Lessee shall use the Premises for meetings, auditions and rehearsals in accordance with a schedule to be provided to Lessor along with the Annual Schedule At the time the Annual Schedule is submitted to Lessor, the Lessee shall designate seven (7) weeks in that calendar year in which the Premises are to be used exclusively by Lessor If said designated weeks are not acceptable to Lessor, they shall be determined by mutual agreement between the Parties, with no less than four (4) weeks to be designated by the Lessee and the remaining three (3) weeks to be selected by Lessor Upon ten (10) days written notice to Lessor, Lessee may expand or extend its use to include additional performances or other activities on dates on which the Premises are open and available Such additional use will be conditioned upon payment by Lessee to Lessor of a reasonable use fee in an amount to be agreed upon by the Parties SECTION 4 Term This Lease shall be for a term of three (3) years commencing at 12 01 a in on January 1, 2007 (the "Commencement Date") and ending at 11 59 p in on December 31, 2009, unless sooner terminated as herein provided SECTION 5 Gross Rent Lessee agrees to pay to Lessor as gross rent for the use and occupancy of the Premises the sum of $36,056 64 per year payable in twelve equal monthly installments of $3,004 72 each on the first day of each month beginning on the Commencement Date ("Gross Rent") In the event Lessee fails to pay any monthly installment on or before the tenth day of the month in which that installment is due, Lessee shall pay to Lessor a penalty in the amount of $150 The rental rate constitutes a gross rent and includes an amount intended to compensate Lessor for utilities and other expenses relating to the operation of the Premises, including administrative and custodial expenses Payment of these expenses shall be the obligation of the Lessor SECTION 6 Indemnification Lessee hereby agrees to protect, defend, indemnify and hold harmless Lessor its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with Lessee's (or Lessee's subcontractors, if any) negligent (or alleged negligent) use of the Premises or performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by Lessee, its officers agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of Lessor Lessor shall be reimbursed by Lessee for all costs and attorney's fees incurred by Lessor in enforcing this obligation Lessee will conduct all defense at its sole cost and expense and Lessor shall approve selection of Lessee's counsel, which approval shall not be unreasonably withheld This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable The policy limits do not act as limitation upon the amount of indemnification to be provided by the Lessee 2 06 128/9527 SECTION 7 Records and Audit Lessee agrees to make available for inspection by Lessor at the Premises a complete and accurate set of Lessee's books and records of all ticket sales Lessee further agrees that it will keep, retain, and preserve for the term of the Lease all records, books, or other evidence of ticket sales Lessor shall have the right, upon reasonable notice, during the Term and any extension thereof and within two (2) years after expiration or termination of this Lease to inspect and audit Lessee's books and records Such inspection and audit shall be conducted by appointment scheduled in advance by agreement with a designee of the Lessee Lessee shall cooperate with Lessor in scheduling and making the inspection SECTION 8 Mold Over Should Lessee hold over and continue in possession of the Premises after expiration of the Term of this Lease, or any extension thereof, Lessee's continued occupancy of said Premises shall be considered a month -to -month tenancy subject to all the terms and conditions of this Lease SECTION 9 Maintenance Lessor shall be responsible for all structural repairs to the Premises and shall keep the foundation, exterior and interior walls and the roof in good condition during the term of the Lease Lessor shall repaint the Premises as required so as to keep the Premises in "first-class" condition Lessor shall maintain and repair the Theater and Personal Property, provided, however, that Lessee shall repair any damage caused by the activities of Lessee, its officers, agents permittees, and invitees It is specifically acknowledged by the Parties that Lessee shall not be responsible for any damage caused to the Premises or Personal Property by any person, group or entity, other than Lessee, to whom Lessor has leased, rented, or otherwise permitted to use, said Premises or Personal Property SECTION 10 Securi During the hours of Lessee's use of the Premises, security shall be provided by Lessee The Parties agree that, in no event, shall food or drink be allowed inside the theater auditorium SECTION 11 Damage or Destruction Lessee shall notify Lessor in writing immediately upon the occurrence of any damage to the Premises If the Premises are only partially damaged, this Lease shall remain in effect and Lessor shall restore Premises to the condition existing on delivery of possession to Lessee as soon as possible In the event that the partial damage to the Premises interferes with Lessee's ability to produce revenue through its use of the Premises, Lessee's rent shall be abated during the restoration period In the event of substantial or total destruction of the Premises, Lessor and Lessee each shall have the option to terminate this Lease within thirty (30) days of such destruction, in which event this Lease shall cease and terminate as of the date of such notice and both Parties shall be released without further obligation For the purposes of this Section 11, substantial destruction shall be deemed to be one- third (1/3) or more of the full replacement cost of the Premises as of the date of destruction 3 06 128/9527 SECTION 12 Termination By Lessor Lessor may, upon three (3) days notice in writing to Lessee for rent and thirty (30) days notice in writing to Lessee for covenants, and utilizing due process of law, terminate this Lease without liability to Lessor in the event of failure by Lessee to comply with any of the terms or conditions or agreements hereof When public necessity as determined by the City Administrator so requires, Lessor may temporarily take immediate possession of the Premises Notwithstanding the foregoing paragraph, in the event of termination under this Section 12, Lessee shall be allowed fifteen (15) days after written notice within which to cure the failure or default which gave rise to such termination, provided, however if the nature of Lessee's default for covenants is such that more than fifteen (15) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within said fifteen (15) day period and thereafter diligently prosecutes such cure to completion SECTION 13 Termination by Lessee Lessee may, upon three (3) days notice in writing to Lessor for breach or default by Lessor, terminate this Lease without liability to Lessee in the event of failure by Lessor to comply with any of the terms or conditions or agreements hereof Notwithstanding the foregoing paragraph, in the event of termination under this Section 13, Lessor shall be allowed fifteen (15) days after written notice within which to cure the failure or default which gave rise to such termination provided, however, if the nature of Lessor s default for covenants is such that more than fifteen (15) days are reasonably required for its cure, then Lessor shall not be deemed to be in default if Lessor commences such cure within said fifteen (15) day period and thereafter diligently prosecutes such cure to completion Lessee may terminate this Lease without cause by giving one hundred eighty (180) days prior written notice to Lessor SECTION 14 Inspection By Lessor Lessee shall permit Lessor or Lessor's agents, representatives or employees to enter said Premises at all reasonable times for the purpose of inspecting said Premises to determine whether Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect Lessor's interest in said Premises under this Lease or to perform Lessor s duties under this Lease SECTION 15 Surrender of Premises On expiration or sooner termination of this Lease and any extensions thereof, Lessee shall promptly surrender and deliver the Premises to Lessor SECTION 16 Ouiet Possession If Lessee pays the rent and complies with all other terms of this Lease, Lessee may occupy and enjoy quiet possession of the Premises for the full Lease term, and any extensions thereof, subject to the provisions of this Lease 4 06 128/9527 SECTION 17 Si na e Lessee shall have the right to exterior, lighted, signage on the Premises featuring Lessee's corporate and/or trade name logo for the term of the Lease, and any extensions thereof Any such signage shall be erected at the expense of Lessee and shall be subject to approval of the City Administrator and the Design Review Board SECTION 18 Lessee's Personal Property Lessor and Lessee hereby acknowledge and agree that Lessee may, from time to time, install Lessee's personal property, including, without limitation, sets furnishings, scrims, lighting equipment and sound equipment Such personal property shall remain the personal property of Lessee during the term of the Lease, and any extensions thereof and shall be removed by Lessee at the expiration, or any sooner termination, of the Lease SECTION 19 Assienment and Subleasing Provided that Lessee is not in default under the Lease, and after the Commencement Date, Lessee shall be permitted to assign and/or sublease all or any portion of the Lease or the Premises with the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed SECTION 20 Warranty and Representation Lessor warrants and represents to Lessee that the building is constructed in a first-class manner and in full compliance with all governmental regulations, ordinances and laws existing at the time of construction SECTION 21 Insurance A Workers' Compensation and Employers Liability Insurance Lessee acknowledges awareness of Section 3700 et seq of the California Labor Code, which requires every employer to be insured against liability for workers compensation Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease Lessee shall obtain and furnish to Lessor workers' compensation and employers' liability insurance in amounts not less than the State statutory limits Lessee shall require all sublessees and contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees Lessee shall furnish to Lessor a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation B General Public Liability Insurance In addition to the workers' compensation and employers liability insurance and Lessee's covenant to defend, hold harmless and indemnify Lessor, Lessee shall obtain and furnish to Lessor, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1 000,000 00) per occurrence If coverage is provided under a 5 06 128/9527 form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000 00) for the Premises This policy shall name Lessor, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary Under no circumstances shall said above -mentioned insurance contain a self -insured retention, or a "deductible' or any other similar form of limitation on the required coverage C Property Insurance Lessee shall provide before commencement of this Lease and shall obtain and furnish to Lessor, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to Lessor authorized to conduct insurance business in California, in an amount insuring for the full insurable value of the Premises and all Improvements Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision The policy shall also contain an endorsement naming Lessor as an Additional Insured The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed, and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory but only to the extent the insurance proceeds specifically cover those items) shall be paid to Lessor The policy shall also contain a special endorsement that if the Premises are so destroyed and either party elects to terminate the Lease the entire amount of any insurance proceeds shall be paid to Lessor The proceeds of any such insurance payable to Lessor may be used, in the sole discretion of Lessor, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as Lessor sees fit This policy shall also contain the following endorsements (1) The insurer shall not cancel or reduce the insured's coverage without (30) days prior written notice to Lessor, (2) Lessor shall not be responsible for premiums or assessments on the policy A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with Lessor prior to the execution of this Lease At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with Lessor D Increase in Amount of General Public Liability and Property Insurance Not more frequently than once every two (2) years, if, in the sole opinion of Lessor, the amount and/or scope of general public liability insurance and/or property insurance coverage above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by Lessor 6 06 128/9527 E Certificates of Insurance, Additional Insured Endorsements Prior to commencement of this Lease, Lessee shall furnish to Lessor certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease, these certificates shall (1) provide the name and policy number of each carrier and policy, (2) shall state that the policy is currently in force, and (3) shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of Lessor, however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance set forth above Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease Lessor or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance Lessee shall pay, in a prompt and timely manner, the premiums on all insurance heremabove required F Insurance Hazards Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Premises or required by this Lease Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates SECTION 22 Lessee as Nonprofit Oreanization Lessee has represented that it is a nonprofit organization As such, Lessee shall, prior to the effective date of this Lease and annually thereafter, provide Lessor with evidence of its nonprofit state and federal tax status, including an annual audited statement or certified copy of its state and federal tax returns Lessee shall additionally submit prior to the effective date of this Lease a Business Plan If Lessee fails to meet its goals and objectives for any one quarterly period as set forth in the Business Plan, Lessee shall meet with Lessor to establish a Recovery Plan delineating the steps to be taken by Lessee toward fulfilling said goals and objectives If, after six (6) months from the date of establishment of the Recovery Plan, Lessee has failed to meet its goals and objectives, Lessor may modify or terminate this Lease SECTION 23 Use of Coca-Cola Products Lessee shall comply with Lessor's exclusivity agreement with the Coca Cola Bottling Company of Southern California ("Coca-Cola") Lessee agrees that only Coca Cola fountain 7 06 128/9527 and bottling products shall be bought and sold in, on, or from the Premises for the term of Lessor's agreement with Coca-Cola This includes all carbonated and non -carbonated, non- alcoholic beverages defined as soft drinks, juices, juice drinks, teas, isotomcs, water and frozen beverages Frozen beverages shall not include ice creams and frozen yogurts Lessee's failure to adhere to the Coca-Cola exclusivity clause shall constitute a material breach of this Lease SECTION 24 Non -recyclable items prohibited All foods and beverages shall be sold in recyclable paper or plastic containers No pull - top cans or styrofoam containers are to be vended or dispensed from the Premises by Lessee Lessor may from time to time review the items sold and containers or utensils used or dispensed by Lessee for purposes of monitoring compliance with this section SECTION 25 Partial Invalidity If any of the provisions of this Lease should be held to be invalid or unenforceable, the validity and enforceability of the remaining provisions of this Lease shall not be affected thereby SECTION 26 Good Faith Whenever this Lease grants Lessor or Lessee the right to exercise discretion, establish rules and regulations or make allocations or other determinations, Lessor and Lessee shall act reasonably and in good faith and subject to the next sentence, take no action which might result in the frustration of the reasonable expectations of the Lessee and Lessor concerning the benefits to be enjoyed under this Lease In no event shall the preceding sentence prohibit or impair either party's rights under the Lease in the event of a breach by the other party SECTION 27 Entire The foregoing, including any exhibits attached hereto and incorporated herein, sets forth the entire agreement between the parties SECTION 28 Superseding of Prior Lease This Lease shall supersede and replace any existing lease agreements for the Premises currently or previously entered into by the Parties and all supplemental agreements, if any entered into by the Parties regarding the leasing of the Premises SECTION 29 Nondiscrimination Lessee and its officers, agents, and employees shall not discriminate because of race, religion, color, ancestry, sex, age, national origin or physical handicap against any person in the performance of this Lease or the use of the Premises SECTION 30 Governing Law This Lease shall be governed and construed in accordance with the laws of the State of California SECTION 31 Notices All notices, demands and other communications required or permitted under the provisions of this Lease shall be in writing, unless otherwise specifically specified to the contrary, sent by personal delivery, by messenger, by telegram or by registered or certified first 8 06 128/9527 class mail, postage prepaid return receipt requested, to the party or parties herein specified to receive such notices demands or other communications at the following addresses, or at such addresses as the Parties shall from time to time designate in writing LESSOR CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attention Director of Economic Development LESSEE HUNTINGTON BEACH PLAYHOUSE 18411 Gothard Street Huntington Beach, CA 92648 Attention President IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by and through their authorized officers the day, month, and year first above written HUNTINGTON BEACH PLAYHOUSE A California Nonprofit Corporation By 4j,-,,j 1 (Print Name) Lj Its pr es t Zr � By (Print Name) C.,h h" "d ItsJV°Grc, REVIEWED AND APPROVED City Administrator 7 CITY OF HUNTINGTON BEACH a Municipal Corporation of the State of California iCit Clerk iu� APPROVED AS TO FORM City Attorney `� 4 INITIATED AND APPROVED (i 1 macI V1 ��7 it, Director of Economic tve4ment 06 128/9527 I1:r LZ Zi ze�z-9z-err ACORD) CERTIFICATE OF LIABILITY INSURANCE17/25/07 DATEIMMIDD/YYI PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION THE BRENNAN COMPANY ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFICATE DOES NOT AMEND EXTEND OR 9114 ADAMS AVE 4182 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW HLINTINGTON BEACH CALIF 92646 INSURERS AFFORDING COVERAGE 714 965 4701 714 965-4702(FAX) /uouRED HUNTINGTON BEACH PLAYHOUSE 19411 GOTHARD STREEI # F HUNTINGTON BEACH, CALIF 92W INSURERA PIIILADELPI-iA INSURANCE COMPANY INSURER B INSURERC INSURER D INGURCR C COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REOUIREMFNT TFRM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITI I RCSPCCT TO WHICH TH13 CL!RTIPICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS EXCLUSIONS AND CONDITIONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS TYPE OF INSURANCE POLICY NUMBER ❑AT ti+em pAre MrvpoN �uelTft GENERAL LIABILITY EACH OCCURRENCE i 1 000 000 COMMERCIAL GENERAL LIABILITY FIRE DAMAGE(Any_ona firo 9 100 000 iCX cwlMt? MADE L' OCCUR MED EI(P (Any one person) i 5 000 GEN L AGGREGATE LIMIT APPLIES PER w POLICY PRO I JECT l!I LUC AUTOMOBILE LIA4LLITY ANY AUTO _ ALL OWNED AUTOS SCHEDULED AUTOS _ HIRED AUTOS NON OWNED AUTOS IaA~21: LIABILI IT I ANY AUTO EXUM LIABILITY _ 7 OCCUR [L CLAIMS MADE DEDUCTIELE RETENTION S WORKERS COMPENSATION AND EMPLOYERS LIABILITY OTHER PERS PROP PI-IPK248229 DESCRIPTION OF OPERATIONSJI-0CATIONSNEH ICLES(EXCLUS IONS ADDED BY PERSONAL & ADV INJURY i 1 000 000 /13/07 7/13/08 GENERAL AGGREGATE i 2 000 000 PRODUCTS COMP/OP ace s 2 000 000 COMBINED SINGLE LIMIT i (Eo &=dent) A S (Peop roon)ILY IN URY S BODILY INJURY 5 y A Tilley' (par awdonU l PROPERTY DAMAGE S (Per bcoldonU AUTO ONLY EA ACCIDENT 6 OTHER THAN EA ACC S AUTO ONLY A.Ge 5 EACH OCCURRENCE S AGGREGATE 9 E E L EACH ACCIDENT i e L 013CA3r CA CMPLOYE i E L DISEASC POLICY LIMIT I 5 7/13/07 7/13/08 $50 000 00 GOTHARD 1$50 000 00 TALBERT PROVISIONS CITY OF IILINTfNGTON BEACH ITS OFFICERS ELECTED OR APPOIN 1 Lli Uh t ICIALS EMPLOYEES AGENTS AND UN'1LERS ARE ALL NAMED AS AN ADDITIONAL INSURED CERTIFICATE HOLDER XX ADDITIONAL INSURED INSURER LETTER A THE CITY OF HUNTINGTON DEACH ITS OFIICERS ELECTED OR APPOINTED OFFICIALS EMPLOYEES AGENTS AND VOLUNTEERS 2000 MAIN 5 I Kbh 1 HUNTINGTON BEACH, CALIF 92648 CANCELLATION SHOULDANY OF THE ABOVE DESCRIBED POLICIES et CANCELLED BEFORE THE EXPIRATION L)AIL I HLREOF THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CER nHCATE HOLDER NAMED TO THE LEFT BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER ITS AGENTS OR TIVE 2® d 2e ii zeez-zi-= Pouc,r - P H-P14�2-H &-V-9 vomme=AL GmotAL Wmartr° THm ENDORSEMENT CHANGM THE POLICY. PLEASE READ rY CAREFULLY ADDITIONAL INSURED -OWNERS, LESSEF-S OR CONTRACTORS (,Form 13) Tins endmemeot tnodfies knum= provided under the faGowmT- SCHEDUtf anma at fersan ttrorgan"'don THE WY OF HUNnNGTON 13EACH 2000 Main Strad Huntingtim Beach CA 92648 Of no a tp lappeUM above. WamVidon rquued to complete Vils endorsementvA be shown in the Oedarettons as apprtreble to Oft endorsement) MO IS AN 19SUR® (Sacllon 11) Is amended to kidu* as aninaunsd 17e priors orolganiip0on stumn In the Sckwdutf-- but a ly mtth respectt+o Vabdty arising outof'yoluWOW f+orIhst ttts ndby arfaryou }IUhTI!V CTOP) 66AC, j- PLA tlW�F I g 1 l 6 -1�-- O S�S�fi RG ALL aPEFtA MS OF� �V, kFOA THVE CEi;IVICATH 110U)M City of Huntington Beach Its elected or appointed officials agents ors employees and wluntsers CG 20 10 11 96 CapynphL In;Wgrwa 04�rnoco ofte )or, 10&4 EO d SEP 24 2007 00 12 OV 2T LOOS-VE-ddS 40972 p 003 /000 BROM--K (.C)HY ATE P O BOX 420807 SAN FRANCISCO CA 9/1 142--0807 COMPENSATION INSURANCE PU N D CERTIRCATF OF WORKERS COMPENSATION INSURANCE ISSUE DATE 09-24-2007 CROUP POLICY NUMBER- 1594402-2007 C.tK I IF•IUATZ IA 6 CERTIFICATE EXPIRES 07-22-2008 07-22-2007/07-22-2008 CITY OF HUNTINGTON BEACH 5G 2000 MAIN ST HUNTINGTON BEACH CA 92648-2702 This is to certify that we have Issuad a valid Workers Compensation Insurance policy in a form approved by the California Insurance Commlasloncr to the employer named below for the policy period Indicated Thm policy Is not subleet to cancellation by the Fund except upon 00 days ndvanea writtbn notice to the employer We will also give you 30 days advance notice should this policy be canoellod prior to its norma expiration This certificate of Insurance is not an insurance policy and does mt amsncl extend or alter the coverage afforded by the policy listed herein Notwlthytandln any requirement teror condition of ary contract or other document with respect To which this certificate of Pterm or may be Issuad or to which It may pertain, the Insurance afforded by the policy described herein Is Subject to all the t6rms exciuslon9 and condltlons of such policy �Tr;-10RIZED REPRESENTATI PRESIDENT EMPLOYER S LIABILITY LIMIT INCLUDING OFFENSE COSTS $1 000 000 PER 0=RRENCE ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 07-22-2001 IS ATTACHED TO AND FORMS A PART OF THIS POLICY EMPLOYER HUNTINGTON BEACH PLAYHOUSE 18411 COMARD ST STE F HUNTINCnION DCACH CA 32648 (Flev 2 05t APPRO S TO FORM JENNI ER A"RATH City Attorzat;y 5G JKPX CNI PKINIED 09-24-2007 56 Su INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST H 1 Requested by Kellee Fritzal/Economic Development R EC E i V E D 2 Date July 3, 2007 JUL 0 5 2007 3 Name of contractor/permittee HB Playhouse City of Huntington Bew�n 4 Description of work to be performed Lease renewal City Attorneys Office 5 Value and length of contract 3 years 6 Waiver/modification request (See Attachment A -waiver of indemnification & insurance limits 7 Reason for request and why it should be granted Not necessary based on type of service 8 Identify the risks to the City in approving this waiver/modification None Ue-pa6p,lent Head Signature Oate APPROVALS Approvals must be obtained in the order listed on this form Two approvals are required for a request to be granted Approval from the City Administrators Office is only required if Risk Management and the y Attorneys Office disagree 1 Risanagement ,J A pproved ❑ Denied Signature Date 2 City Attorney's Office I!OApproved ❑ Denied ° 1' Signature Date 3 City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved the completed waiver/modification request is to be submitted to the City Attorneys Office along with the contract for approval Once the contract has been approved this form is to be filed with the Risk Management Division of Administrative Services Waiver 7/3/2007 2 41 00 PM Section 6 Indemnification o Near the end of the first sentence or damage which was caused by the sole negligence or willful misconduct of the Lessor The problem is with the word sole In other words if the Library/City is not 100% responsible for the damage than they are off the hook What if they are 50% at fault than they pay 50% if 70% at fault than they pay their 70% The word sole should be removed from this sentence o Third sentence says Lessee will conduct all defense at its sole cost and expense and Lessor shall approve selection of Lessee s counsel That is not acceptable No other entity should have the right to approve the counsel that HBPH selects Not for one minute would I want someone else approving of my counsel selection The sentence should be changed to end at sole cost and expense 2 Section 21 Insurance The last sentence states our insurance policies do not limit our exposure to damage If HBPH s insurance policies limits do not cover the damage that may occur whom will the Library/City go after — the individual Board Members assets? ATTACHMENT A Waiver request from Dawn Conant —HP Playhouse Board of Directors President ATTACHMENT #2 HUNTINGTON BEACH PLAYHOUSE January 16 2007 Gil Coerper Mayor RECEIVE5C"CLE20FFV10E Members of City Council AS PUBLMEETING City of Huntington Beach OF 2000 Main Street JOMN L. FLYNN CITY CLERK Huntington Beach, CA 92648 j1n Central Library Theater from the thly rent r the term of our a on yAresu be of occupied r $3 0the amount 2006 T inc er the RE Huntington Beach Playhouse Lease Dear Mayor Coerper and Members of Court As you know unt1v , °f�"Playhouse (HB City of Hunti ton Beach for the past thirteen ye last five year ase the City im seats This b n 1 00 cas inci that HBPH p tadollecte se fro200 past five yea aordoil For many, mar profit commur current terms operating on a The HBPH Board Library given cu responsible f these level i 1 baseWt as 2 $1 00 pd perfornra least Silk have comm have. 9eaded we cannot of but the Ci on using the its 2 eb to a o erg e City d $3 004 72 a upied at with a Based 121 this year an cot i Library and City officials to exte i r into a' s not up ur re ter s� I a leas that cannot continuel lion shows that it would n se tfiat includes refnt,-9ttc W of 200 o'hcu luled in 20011M,50 aa uaon attendance I at 3 if you request we will surrender Lof the Maddy Room of ftudLU9j&#odrehearsals We currently use this room 592 ho year this will free this space so that it could be rented by the Library to other users t nerate additional revenue >t-for- the now at the This ensures the City at least $60 056 i enue from HBPH in 2007 We will make our first payment under these terms following the a of our current production which runs in the Library Theatre through January 28, 2007 We need a response from you by that time or HBPH will terminate its use of the Library facilities and end our lease with the City Respectfully pa't-�J dtw'� Huntington Beach Playhouse Board of Directors Dawn Conant President 7111 Talbert Avenue / Huntington Beach / CA 92648 0451 / (714) 375-0696 / Fax (714) 375-0698 To Honorable Mayor and City Council Members From Cathy Green City Council Member Date January 29 2007 Subject H-ITEM FOR FEBRUARY 5, 2007, CITY COUNCIL MEETING — EXPIRATION OF HUNTINGTON BEACH PLAYHOUSE LEASE AT HUNTINGTON CENTRAL LIBRARY THEATER STATEMENT OF ISSUE The Huntington Beach Playhouse (HBPH) lease expired on December 31 2006 and, at present they are on a month -to -month lease continuing to pay rent and per -seat charges under the same terms as before A letter was presented to the Mayor and Council by the HBPH during Public Comments at its last meeting of January 16 2007 requesting a substantial decrease for rent in a new term lease The change in terms proposed by the HBPH from its previously charged rent to their proposal would require a subsidy from the city and would impact the city s General Fund and debt repayments to the Library Service Fund RECOMMENDED ACTION Direct staff to look at the fiscal impact to the city and Library Service Fund over the length of a new term lease of three years So that the Playhouse may continue its operation accept the payment structure proposed by HBPH in its letter of January 15 2007 and direct staff to return to the City Council with the necessary budget amendment Direct staff to work with the Board of HBPH to jointly develop a plan to expand its subscriber base and marketing strategy Direct staff to bring back the results of its analysis to the City Council within 45 days from the date of this action SS CG/cvh Enc January 16 2007 letter addressed to Mayor Gil Coerper oZ - J- - moo �-- f�pP�fa ✓�> � - d l l _off, f-I� �T ATTACHMENT CITY OF HUNTINGTON BEACH INTER -DEPARTMENTAL COMMUNICATION FINANCE OFFICE TO PENNY CULBRETH GRAFT CITY ADMINISTRATOR FROM MICHAEL SOLORZA SENIOR ADMINISTRATIVE ANALYST FINANCE DATE FEBRUARY 5 2007 CC STANLEY SMALEWITZ DIRECTOR ECONOMIC DEVELOPMENT RON HAYDEN LIBRARY SERVICES DIRECTOR SUBJECT LIBRARY THEATER USE COMPARISON Attached is an analysis of various proposals now in discussion concerning use of the Library Theater and Maddy room The side by side comparisons are intended to crystallize discussion concerning potential revenue generated versus payments made under different Theater and Maddy room usage scenarios In addition the analysis summarizes the annual cost (i e subsidy) to the General Fund and Library Service Fund of allowing Huntington Beach Playhouse (HBPH) use of the Theater and Maddy room facilities at rates below those approved by Council The Library Service Fund (Fund 205) records lease and rental payments from HBPH Seabreeze Church the Genealogy Society and other users of Library facilities The room rental payments are based on fees regularly reviewed and approved by City Council In addition salaries benefits utilities maintenance debt service and other operational expenses are charged to the Library Service Fund It is assumed that per the most recent cost allocation study completed in November 2005 room rental rates and related fees for using Library facilities are set to appropriately recover staff and operational costs Therefore any fees charged which are less than Council approved rates require an offset payment by the Library Service and General Funds to account for the subsidized (i a lower) rates An analysis has thus been done illustrating revenue generated and offset payments to the Library Service and General Funds under three different lease/usage scenarios It should be noted that Scenarios #2 and #3 generate less revenue than what is necessary to fully cover operational costs attributed to the Library Service Fund (as described above) A fuller explanation of each scenario is provided below Scenario #1 referred to as Market Usage assumes the theater and Maddy rooms would be available for rent to pny non-profit organization that so chooses This scenario makes the underlying assumptions that HBPH would not be using the theater at all in 2007 (1270 hours) nor the Maddy Room (592 hours) Hence these rooms could be rented at Council approved rates for those hours Scenario #1 can be viewed as a baseline revenue generating model showing a conservative amount of revenue which could be generated by renting to what the market will bear Based on the assumptions noted above this scenario could generate $126 525 in revenue in 2007 (For ease of analysis this revenue total uses the Council approved non profit resident rates as well as applying a 30% multiple use discount which the Library gives to clients using facilities on a weekly basis ) The following two scenarios in that they generate less income than this theoretical market amount show the offset payment the City provides HBPH • Scenario #2 summarizes payments HBPH made under the calendar year 2006 lease It is important to note that the lease in effect for 2006 included usage of the Maddy room (approximately 592 hours) in the monthly base rental payment ($3 004 72) That is the lease agreement while not specifically naming the Maddy room is understood to allow HBPH use of it during show runs Therefore based on ticket sales information provided by HBPH plus monthly lease payments actually received HBPH paid $92 478 in 2006 for usage of the Theater and affiliated Library facilities (as described in the lease) Based on the Market Usage scenario above the offset payment in Scenario #2 is $34,047 (That is the difference between $126 525 and the payments made by HBPH in 2006 of $92 478 ) Scenario #3 is a summary of potential payments to be made as outlined in the proposal put forth by HBPH in their January 16 2007 letter Under that proposal HBPH would pay a monthly base rental amount of $3 004 72 plus a ticket surcharge fee of $1 00/ticket This scenario also includes potential revenue generated by the Maddy room since HBPH would give up usage of it (as per their proposal) Therefore it is reasoned the Maddy room could be rented out for 592 hours at a rate equaling at least the non profit resident rate This scenario could result in HBPH paying $55 164 for usage of the Theater in 2007 (A figure of 19 107 was used to compute the ticket surcharge revenue This amount is the average number of actual tickets sold from 2002 to 2006 ) In addition this scenario includes two potential amounts of revenue generated from rental of the Maddy room one amount at the non-profit resident non discounted rate ($29 600) and one amount at the non profit resident multiple -use discounted (30%) rate ($20 720) Therefore the offset payment in Scenario #2 is either $50,641 fusing the non -discounted Maddy room rate) or $41,761 (using discounted Maddy room rate) This is the difference between potential revenue generated in Scenario #1 and total potential revenue generated under Scenario #3 Summary The FY 2006/07 Library Services budget includes the current cost of the subsidy presented in Scenario #2 In addition should Council approve the HBPH proposal as outlined in their 01/16/2007 letter this offset payment would increase The current subsidy is $34 047 the most recent HBPH proposal would increase this subsidy to either $50 641 or $41 761 depending on whether the muitiple-use discounted rate is used for estimating potential Maddy Room rental revenue Therefore the increase in subsidy would be either 16,594 or 7 714 2 It should be noted that throughout this analysis for purposes of comparison the non profit resident rate was used when calculating potential revenue generated by rental of Library facilities Should non resident or for profit entities choose to rent the Maddy Room or Library Theater for example the revenue generated amounts would change There are other assumptions made throughout the analysis • Total Theater Usage will remain stable at 1270 hours through 2007 • Theater Usage Hourly Breakdown weekday before 5 00 pm and weekend and weekday after 5 00 pm hours will remain stable through 2007 • Room Rental Rates will remain at the 11/2005 Council approved levels through 2007 • Rental Charges Maddy room and Library Theater revenue calculated using non-profit resident rates as per Council approved fee schedule Please review and provide any additional feedback to me on this analysis I want to ensure I have covered all the bases and performed a truly comparative analysis Thank you City of Huntington Beach Library Services, Theater and Maddy Room Usage Analysis Rental & Ticket Surcharge Payments, Potential Revenue Generated and Offset Payments Data Used to Scenario Calculations Hours of Usage 1270 Total Number of Hours of Theater Usage in 2007 by HBPH 592 Total Number of Hours of Maddy Room Usage In 2007 by HBPH *Usage by Day of Week and Time 304 M F before 5 00 pm 968 M F after 5 00 pm Saturday & Sunday 1270 Total # of Hours of Theater Usageln 2007 by HBPH Rental Rates * $ 50 MADDY ROOM Hourly rate Non Profit Resident $ 100 THEATER Hourly rate Non Profit Resident M-F before 5 00 pm $ 125 THEATER Hourly rate Non Profit Resident M F after 5 00 pm and Saturday & Sunday Number of Tickets Sold *" 18 223 # sold to calendar year 2005 18 807 # sold in calendar year 2006 19 107 Average # sold over five calendar years (2002 2006) Non profd resident rates used Library Faciblies fee schedule has different rates for resident and for profit groups According to HBPH sales reports Library Theater Maddy Room Usage Analysis Comparison M Solorza Finance Department 2/5/2007 City of Huntington Beach Library Services, Theater and Daddy Room Usage Analysis Rental & Ticket Surcharge Payments, Potential Revenue Generated and Offset Payments Scenario #1 Market usage of Theater and Maddy Room (non-profit, resident rates) Theater Revenue Generated Standard Rate w134/ Resident, Non multiple use Total Non Total Using Hours proift Rate discount Discounted 30% Discount 304 $ 10000 $ 7000 $ 30 400 $ 21 280 966 $ 12500 $ 8750 $ 120 750 $ 84 525 $ 151 150 $ 105 805 Maddy Room Revenue Generated Standard Rate w/30 / Resident, Non multiple use Total Non Total Using Hours proikRate discount Discounted 30/ Discount 592 $ 5000 $ 3500 $ 29 600 $ 20 720 $ 180 750 $ 126 525 Non Profit Multiple Use Revenue Scenario #2 Rental and Ticket Surchargeby 11• 3 004 72 CPI Adjusted Monthly Rental Fee of Theater (for CY 2007) 300 Per Ticket Surcharge Annual (Calendar Year) Payments by HBPH in 2006 $ 36 057 Theater Revenue $ 56 421 Ticket Surcharge Revenue $ 92 478 Total Subsidy ** $ 34 047 As per the lease agreement in affect for CY 2006 usage of the Maddy room is included in the $3 004 72 monthly base rented payment Revenue generated Scenario #1 minus revenue generated Scenario #2 t,sv"#s'''"k ' r. 4s,.. • •] LAI • r o • a OjA ffilliffill-AVA1111M'j•I&EVR514MUNVIU•MKWiW441lJrM $3 004 72 Monthly Base Rent as Defined in 2006 Lease $1 00 Per Ticket Surcharge Potential Annual (Calendar Year) Payments by HBPH In 2007 $ 36 057 Theater Revenue $ 19 107 Ticket Surcharge Revenue $ 55164 Total $ 20 720 Maddy Room (592 hours x $35/hour) using 30% multiple use discount $ 75 884 Potential Revenue from HBPH Lease Payments & DISCOUNTED Maddy Room Rental $ 29 600 Maddy Room (592 hours x $50/hour)* WITHOUT discount $ 84 764 Potential Revenue from HBPH Lease Payments & NON Discounted Maddy Room Rental Subsidy ** $ 50 641 <_= Assuming discounted Maddy Room Subsidy ** $ 41 761 — Assuming NON discounted Maddy Room Library Theater Maddy Room Maddy room would not be used by HBPH antler new proposal this is based on assumption it would be rented to general public Usage Analysis Comparison Revenue generated Scenario 41 minus revenue generated Scenario #3 M Solorza Finance Department 2/512007 126 525 Potential revenue generated Scenario #1 (using non profit resident multiple use discounted rates) 84 764 Payments made by HBPH + Maddy Room Revenue (proposed) CY 2007 (Scenario 43) 41 761 Amount of potential subsidy CY 2007 (without discounted Maddy Room rates) Difference in Subsidies $ 50 641 Amount of potential subsidy CY 2007 (using discounted Maddy Room rates) $ 34 047 Amount of subsidy CY 2006 $ 96 594 Amount of additional City contribution needed from General Fund reserves $ 41 761 Amount of potential subsidy CY 2007 (without discounted Maddy Room rates) $ 34 047 Amount of subsidy CY 2006 $ 7 714 Amount of additional City contribution needed from General Fund reserves Library Theater Maddy Room Usage Analysis Comparison M solorza Finance Department 21&2007 INITIATING DEPARTMENT Economic Development SUBJECT Approval of Lease with Huntington Beach Playhouse for the Public Library Theater COUNCIL MEETING DATE August 06 2007 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map Location Map and/or other Exhibits Attached ❑ Not Ap licable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed Ln full by the City Attorne) Not Applicable Subleases Third Party Agreements etc Attached (Approved as to form by City Attorney) Not Applicable ❑ Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted over $5 000) Attached ❑ Not Ap licable Bonds (If applicable) Attached ❑ Not Ap licable Staff Report (If applicable) Attached ❑ Not Applicable Commission Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff ( ) ( ) Deputy City Administrator (Initial) ( ) City Administrator (Initial) ) ) City Clerk ( ) I EXPLANATION FO.R RETURN OF ITEM , I RCA Author FRITZAL (1519) HUNTINGTON BEACH PLAYHOUSE January 16 2007 Gil Coerper Mayor Members of City Council City Huntington Beach RECEIVED FROM OUNC MEETING AS PUBLIC REC I� �„ I of OF C(TY CLE OFFICE 2000 Main Street JOAN L FLYNN CITY CLERK Huntington Beach CA 92648 RE Huntington Beach Playhouse Lease Dear Mayor Coerper and Members of City Council As you know Huntington Beach Playhouse (HBPH) has leased the Central Library Theater from the City of Huntington Beach for the past thirteen years In addition to monthly rent over the term of our last five year Lase the City imposed and collected a surcharge based on the number of occupied seats This began asE:;Ei $1 00 charge and -was increased last year to $3 00 As a result the amount that HBPH paid #*1* ose from $39 582 in 2001 to $98 423 in 2006 This 147% increase over the past five years4s c4earl"xtraordirtary and without market parallel For many manor months we have communicated to both Library and City officials that as a not -for - profit community service organization we cannot afford to extend or enter into a new lease at the current terms We have pleaded for relief but the City has not acted upon our request We are now operating on a month -to -month extension using the same terms as our last lease The HBPH Board of Directors has reaffirmed its position that we cannot continue operating at the Library given current terms Analysis of our financial position shows that it would not be fiscally responsible for the Board of HBPH to agree to a new lease that includes rent and surcharges at these levels Therefore, we are offering the City the following 1 base rent as currently defined $3 004 72 paid monthly totaling $36 056 64 per year 2 $1 00 per occupied seat with a minimum guarantee of 200 occupied seats per performance Based on the 120 performances scheduled in 2007 this will equal at least $24 000 this year and could be more depending upon attendance and 3 if you request we will surrender use of the Maddy Room for auditions and rehearsals We currently use this room 592 hours per year this will free this space so that it could be rented by the Library to other users to generate additional revenue This ensures the City at least $60 056 in revenue from HBPH in 2007 We will make our first payment under these terms following the close of our current production which runs in the Library Theatre through January 28 2007 We need a response from you by that time or HBPH will terminate its use of the Library facilities and end our lease with the City Respectfully Huntington Beach Playhouse Board of Directors Dawn Conant President 7111 Talbert Avenue / Huntington Beach / CA 92648 0451 / (714) 375 0696 / Fax (714) 375 0698 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND THE HUNTINGTON BEACH PLAYHOUSE FOR NONEXCLUSIVE USE OF THE PUBLIC LIBRARY THEATER THIS LEASE AGREEMENT is made and entered into this / day of , 2007 by and between THE CITY OF HUNTINGTON REACH, a municipal corporation of the State of California (hereinafter "Lessor") and the/ HUNTINGTON BEACH PLAYHOUSE, INC, a California nonprofit corpor tion (hereinafter `Lessee ') (collectively 'Parties") WHEREAS, Lessor owns certain real property (hereinafter "Premises") in the City of Huntington Beach and Lessee desires to lease, on a nonexclusive basis, the aforesaid Premises for community information, education, and cultural enri cM ent in the manner set forth below NOW, THEREFORE, in consideration of the obligatior'of Lessee to pay rent as herein provided and in consideration of the other terms and conditions hereof, Lessor hereby grants to Lessee and Lessee takes from Lessor, to hive and to hold, a nonexclusive lease (hereinafter' Lease') of the Premises, upon the following terms and conditions SECTION 1 Description of Premises The Premises consist of that certain real as a portion of the improvement, structure and f Huntington Beach, California The premises ini of (i) the theater (including the stage, audrtoriun technical booth, greenroom, and all areas comm •op'erty commonly known and described t i`res located at 7111 Talbert Avenue zde (a) the physical structure consisting backstage area, designated storage areas, ilv associated with the intended use of the theater) (n) the box office, (nz) the lob , (iv) the theater office and (v) the kitchen (collectively, the "Theater"), and (b) all fixtures, supplies, and personal property, as identified and itemized in the plans and specifications of the Central Library expansion documents (collectively, the "Personal/Property"), which now or hereafter is owned or held by Lessor and located in or about the heater or attached thereto or used in conjunction with the operation thereof SECTION 2 Nonexclusive Use It is acknowledged by the Parties that Lessor intends to enter into other tenancy arrangements including, bunot limited to, daily or periodic use permits or rental agreements with various business, professional, artistic, dance and other community groups and organizations /In no event, however, shall Lessor lease or otherwise rent the Premises or portion thereof, to any other community theater group for the purpose of producing and performing its theater season without first receiving Lessee's prior written consent SECTION /31'ermitted Use The Premises are let on a nonexclusive basis for the purpose of producing and performing th eafrical productions Lessee's use shall be 1,270 hours per calendar year, i / 06 128/9527 according to an annual Theater Season schedule (the "Annual Schedule") submitted from Lessee to Lessor Lessee shall submit the Annual Schedule to Lessor on or before/May 1st of each year during the term of the Lease, and any extension thereof and Lessor shall return written confirmation of the Annual Schedule on or before June 1st of each year during the term of the Lease, and any extension thereof In addition, Lessee shall use the Premises for meetings, auditions and rehearsals in accordance with a schedule to be provided to Lessor along with the Annual Schedule At the time the Annual Schedule is submitted to Lessor, the Lessee shall designate seven (7) weeks in that calendar year in which the Premises are to be used exclusively by Lessor If said designated weeks are not acceptable to Lessor, they shall be determined by mutual agreement between the Parties, with no less than four (4)weeks to be designated by the Lessee and the remaining three (3) weeks to be selected by/Lessor Upon ten (10) days written notice to Lessor, Lessee may expand or extend its use to include additional performances or other activities on dates on which the Premises are open and available Such additional use will be conditioned upon payment by Lessee to Lessor of a reasonable use fee in an amount to be agreed upon by the Parties SECTION 4 Term This Lease shall be for a term of three (3)Zyears commencing at 12 01 a in on January 1, 2007 (the "Commencement Date ) and ending at 11 59 p in on December 31, 2009, unless sooner terminated as herein provided SECTION 5 Gross Rent Lessee agrees to pay to Lessor as gross rent for the use and occupancy of the Premises the sum of $36 056 64 per year, payable in twelve equal monthly installments of $3 004 72 each, on the first day of each month beginning on the Commencement Date ("Gross Rent") In the event Lessee fails to pay any monthly installment on or before the tenth day of the month in which that installment is due, Lessee shall pay to Lessor a penalty in the amount of $150 7he rental rate constitutes a gross rent and includes an amount intended to compensate Lessor for utilities and other expenses relating to the operation of the Premises, including administrative and custodial expenses Payment of these expenses shall be the�obligation of the Lessor In addition to the Gross Rent, Lessee shall pay Lessor a Library Facility Debt Service Capital Equipment Charge ( Facility Charge") in the amount of One Dollar ($1 00) per paid occupied seat of each performance, with a minimum guarantee of Two Hundred (200) paid occupied seats per performance, for the entire term of this Lease Lessee may distribute a maximum of Two Thousand Five Hundred (2,500) Complimentary tickets per season,/Which shall not be subject to the Facility Charge Lessee shall submit payment of the Facility Charge to the Lessor within fifteen (15) days of the close of each production A report showing the number of paid occupied seats and complimentary occupied seats for the specific production shall accompany the payment 1 SECTION 6 Indemnification Lessee hereby agrees to protect, defend, indemnify and hold harmless Lessor, its officers,, elected or appointed officials, employees, agents and volunteers from and against 2 06 128/9527 any and all claims, damages, losses, expenses, judgments, demands and defense' osts (including, without limitation, costs and fees of litigation of every nature or ha ility of any kind or nature) arising out of or in connection with Lessee's (or Lessee's subcontractors, if any) negligent (or alleged negligent) use of the Premises or performance o�fhis Agreement or its failure to comply with any of its obligations contained in this Agreement by Lessee, its officers, agents or employees except such loss or damage which wa�caused by the sole negligence or willful misconduct of Lessor Lessor shall be reimbursed by Lessee for all costs and attorney's fees incurred by Lessor in enforcing this obligation Lessee will conduct all defense at its sole cost and expense and Lessor shall approve selection of Lessee's counsel, which approval shall not be unreasonably wiheld This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable The policy limits do not act as limitation upon the amount of indemnification to be provided by the Lessee 0 SECTION 7 Records and Audit Lessee shall keep a computerized record of each ticket sold and the date of the sale Lessee agrees to make available for inspection by Lessor at the Premises a complete and accurate set of Lessee's books and records of all/ticket sales Lessee further agrees that it will keep, retain, and preserve for the term of the Lease all records, books or other evidence of ticket sales Lessor shall have the right upon reasonable notice, during the Term and any extension thereof and withinytwo (2) years after expiration or termination of this Lease to inspect and audit Lessee's books and records and to make transcripts therefrom to verify the payment due Lessee Such inspection and audit shall be conducted by appointment scheduled in advanc(�by agreement with a designee of the Lessee Lessee shall cooperate with Lessor in scheduling and making the inspection If the audit shows that there is a deficiency in the payment of the Facility Charge, the deficiency shall come immediately due and payable The acceptance by Lessor of any monies paid to Lessor by Lessee, as shown by any statement furnished by Lessee/ not be construed as an admission of the accuracy of said statement, or of the sufficiency of the amount of gross Rent or Facility Charge but Lessor shall be entitled to review the adequacy of such payment as hereinabove set forth SECTION 8 Fold Over Should Lessee (hold over and continue in possession of the Premises after expiration of the Term of this Lease, or any extension thereof, Lessee's continued occupancy of said Premises shall be considered a month -to -month tenancy subject to all the terms and conditions of this Lease SECTION 9 Maintenance Lessor shall be responsible for all structural repairs to the Premises and shall keep the foundation exterior and interior walls and the roof in good condition during the term of the Lease Lessor shall repaint the Premises as required so as to keep the Premises in "first-class'/condition Lessor shall maintain and repair the Theater and Personal Property, provided, however, that Lessee shall repair any damage caused by the activities of Lessee, its officers agents, permittees, and invitees It is specifically acknowledged by the Parties that Lessee shall not be responsible for any damage caused to the Premises or Personal 1 3 06 128/9527 Property by any person, group or entity, other than Lessee, to whom Lessor has leased, rented, or otherwise permitted to use, said Premises or Personal Property SECTION 10 Security During the hours of Lessee's use of the Premises, security shall beyrovided by Lessee The Parties agree that, in no event, shall food or drink be allowed inside the theater auditorium SECTION 11 Damage or Destruction Lessee shall notify Lessor in writing immediately upon the occurrence of any damage to the Premises If the Premises are only partially damaged, this Lease shall remain in effect and Lessor shall restore Premises to the condition existing on delivery of possession to Lessee as soon as possible In the event that the partial damage to the Premises interferes with Lessee's ability to produce revenue through its use of the Premises, Lessee's rent shall be abated during the restoration period In the event of substantial or total destruction of the Premises, Lessor and Lessee each shall have the option to terminate this Lease/within thirty (30) days of such destruction, in which event this Lease shall cease and terminate as of the date of such notice and both Parties shall be released without further obligation For the purposes of this Section 11,/ubstantial destruction shall be deemed to be one-third (1/3) or more of the full replacement cost of the Premises as of the date of destruction SECTION 12 Terminationn By Lessor Lessor may upon three (3f days notice in writing to Lessee for rent and thirty (30) days notice in writing to Lessee/for covenants and utilizing due process of law, terminate this Lease without liability to�,�Lessor in the event of failure by Lessee to comply with any of the terms or conditions r agreements hereof When public necessity as determined by the City Administrator so requires, Lessor may temporarily take immediate possession of the Premises Notwithstanding the foregoing paragraph, in the event of termination under this Section 12, Lessee shall be allowed fifteen (15) days after written notice within which to cure the failure or default which gave rise to such termination, provided, however, if the nature of Lessee's default for covenants is such that more than fifteen (15) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within said fifteen (15) day period and thereafter diligently prosecutes such cure to completion SECTION 13 Termination by Lessee Lessee may, upon three (3) days notice in writing to Lessor for breach or default by Lessor, termmate this Lease without liability to Lessee in the event of failure by Lessor to comply�with any of the terms or conditions or agreements hereof /Notwithstandmg the foregoing paragraph, in the event of termination under this Section 13, Lessor shall be allowed fifteen (15) days after written notice within which to cure/the failure or default which gave rise to such termination, provided, however, if the nature of Lessor's default for covenants is such that more than fifteen (15) days are r 4 06 128/9527 Lessee's corporate and/or 1 thereof Any such signage approval of the City AdmV reasonably required for its cure, then Lessor shall not be deemed to be in defaulfif Lessor commences such cure within said fifteen (15) day period and thereafter diligently prosecutes such cure to completion Lessee may termmate this Lease without cause by giving one hundred eighty (180) days prior written notice to Lessor SECTION 14 Inspection By Lessor 1 Lessee shall permit Lessor or Lessor's agents representatives or employees to enter said Premises at all reasonable times for the purpose of inspecting said Premises to determine whether Lessee is complying with the terms of this/Lease and for the purpose of doing other lawful acts that may be necessary to protect Lessor's interest in said Premises under this Lease or to perform Lessor's duties under this/Lease SECTION 15 Surrender of Premises On expiration or sooner termination of this/Lease and any extensions thereof, Lessee shall promptly surrender and deliver the Premises to Lessor SECTION 16 Quiet Possession If Lessee pays the rent and complies with all other terms of this Lease, Lessee may occupy and enjoy quiet possession of the Premises for the full Lease term, and any extensions thereof, subject to the provisions of this Lease SECTION 17 Sianne Lessee shall have the riQfit to exterior, lighted, signage on the Premises featuring name logo for the term of the Lease, and any extensions . be erected at the expense of Lessee and shall be subject to for and the Design Review Board SECTION 18/L.essee's Personal Property Lessor and Lessee hereby acknowledge and agree that Lessee may, from time to time install Lessee's personal property, including, without limitation, sets furnishings, scrims, lighting equipment and sound equipment Such personal property shall remain the personal propertylof Lessee during the term of the Lease, and any extensions thereof and shall be removed by Lessee at the expiration or any sooner termination, of the Lease SECTION 19 Assignment and Subleasing Provided that Lessee is not in default under the Lease, and after the Commencement Date, Lessee shall be permitted to assign and/or sublease all or any portion of the Lease or the Premises with the prior written consent of Lessor, which consent shall not be unreasonably withheld conditioned or delayed SECTION 20 Warranty and Representation f Lessor warrants and represents to Lessee that the building is constructed in a first- class manner and in full compliance with all governmental regulations, ordinances and law's existing at the time of construction 06 128/9527 SECTION 21 Insurance A Workers' Compensation and Employers Liability Insurance Lessee acknowledges awareness of Section 3700 et seq of the California Labor Code, which requires every employer to be insured against liability for7orkers' compensation Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease Lessee shall obtain and furnish to Lessor workers' compensation and employers' liability insurance in amounts not less than�the State statutory limits Lessee shall require all sublessees and contractors to/provide such workers' compensation and employers' liability insurance for all o�,the sublessees' and contractors' employees Lessee shall furnish to Lessor a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees andeontractors to waive subrogation B General Public Liability Insurance In addition to the workers' compensation and employers' liability insurance and Lessee s covenant to defend, hold harmless and indemnify Lessor, Lessee shall obtain and furnish to Lessor a policy of general public/liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shalhprovide coverage in not less than the following amount combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000 00) per occurrence If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($r1,000,000 00) for the Premises This policy shall name Lessor, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the'Lease shall be deemed excess coverage and that Lessee's insurance shall be primary Under no cirumstances shall said above -mentioned insurance contain a self - insured retention, or a deductible" or any other similar form of limitation on the required coverage C f Property Insurance Lease% shall provide before commencement of this Lease and shall obtain and furnish to Lfessor, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to Lessor authorized to conduct/insurance business in California, in an amount insuring for the full insurable value of the Premises and all Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision The policy shall also contain an endorsement naming Lessor as an Additional 6 06 128/9527 Insured The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or' destroyed, and if not so used, such proceeds (excluding any insurance proceed for Trade Fixtures, personal property whether or not owned or leased by Lessee, and trade inventory, but only to the extent the insurance proceeds specifically cover those items shall be paid to Lessor The policy shall also contain a special endorsement that if th�/&emises are so destroyed and either party elects to terminate the Lease, the entire amount of any insurance proceeds shall be paid to Lessor The proceeds of any such insurance' payable to Lessor may be used, in the sole discretion of Lessor, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as Lessor sees fit This policy shall also contain the following (1) The insurer shall not cancel or reduce the insured s coverage without (30) days prior written notice to Lessor, a (2) Lessor shall not be responsible for premiums or assessments on the policy A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with Lessor prior to the execution of this Lease At least thirty (30) days prior to the expiration or termmati n of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with Lessor D Increase in Amount of General Public L Not more frequently than once every two (2) years, if, in the sole opinion of Lessor, the amount and/or scope of general public liability insurance and/or property insurance coverage above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by Lessor E Certificates of/Insurance, Additional Insured Endorsements Prior to commencement of this Lease, Lessee shall furnish to Lessor certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease, these certificates shall (1) f provide the name and policy number of each carrier and policy, (2y shall state that the policy is currently in force, and shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of Lessor, however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance set forth above 7 06 128/9527 Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period / The carrying requirement for the foregoing insurance coverages shall not derogate q g from Lessee s defense, hold harmless and indemnification obligations as set forth7m this Lease Lessor or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance Lessee shall pay, in a prompt timely manner, the premiums on all insurance hereinabove required F Insurance Hazards" Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property or other insurance policy for the Premises or required by this Lease Lessee shall, atits sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates 4 4 SECTION 22 Lessee as Nonprofit Organization Lessee has represented that it is a nonprofit organization As such, Lessee shall 4 prior to the effective date of this Lease and annually thereafter, provide Lessor with evidence of its nonprofit state and federal tax status including an annual audited statement or certified copy of its state and federal tax returns Lessee shall additionally submit prior to the effective date of this Lease a Business,Plan If Lessee fails to meet its goals and objectives for any one quarterly period as set forth in the Business Plan Lessee shall meet with Lessor to establish a Recovery Plan,delmeatmg the steps to be taken by Lessee toward fulfilling said goals and objectives If, after six (6) months from the date of establishment of the Recovery Plan Lessee has failed to meet its goals and objectives Lessor may modify or terminate this Lease ` SECTION 23 Use of Coca-Cola Products Lessee shall comply with Lessor's exclusivity agreement with the Coca-Cola Bottling Company of Southern'Califorma ("Coca-Cola") Lessee agrees that only Coca- Cola fountain and bottling products shall be bought and sold in, on, or from the Premises for the term of Lessor's agreement with Coca-Cola This includes all carbonated and non- carbonated, non-alcoholic/beverages defined as soft drinks, juices, juice drinks teas, isotomcs, water and frozen beverages Frozen beverages shall not include ice creams and frozen yogurts Lessees failure to adhere to the Coca-Cola exclusivity clause shall constitute a material breach of this Lease SECTION 14 Non -recyclable items prohibited All foods and beverages shall be sold in recyclable paper or plastic containers No pull top cans or styrofoam containers are to be vended or dispensed from the Premises by Lessee Lessor may from time to time review the items sold and containers or utensils used or dispensed by Lessee for purposes of monitoring compliance with this section 8 06 128/9527 SECTION 25 Partial Invalidity If any of the provisions of this Lease should be held to be invalid or unenfor the validity and enforceability of the remaining provisions of this Lease shall no be affected thereby SECTION 26 Good Faith Whenever this Lease grants Lessor or Lessee the right to exercise discretion, establish rules and regulations or make allocations or other determinations, Lessor and Lessee shall act reasonably and in good faith, and subject to the next sentence, take no action which might result in the frustration of the reasonable expectations of the Lessee and Lessor concerning the benefits to be enjoyed under this Lease In no event shall the preceding sentence prohibit or impair either party's rights under the Lease in the event of a breach by the other party SECTION 27 Entire The foregoing, including any exhibits attached hereto and incorporated herein, sets forth the entire agreement between the parties SECTION 28 Superseding of ;e This Lease shall supersede and replace any existing lease agreements for the Premises currently or previously entered into by the Parties and all supplemental agreements if any, entered into by the Parties regarding the leasing of the Premises SECTION 29 Nond Lessee and its officers race religion, color, ancestry, sex person in the performance of thisl SECTION 30 Go This Lease shall be State of California d , and employees shall not discriminate because of e, national origin or physical handicap against any se or the use of the Premises Law 3 and construed in accordance with the laws of the SECTION 31 +Notices All notices, demands and other communications required or permitted under the provisions of this Lease shall be in writing, unless otherwise specifically specified to the contrary, sent by personal delivery by messenger, by telegram or by registered or certified first class mail, postage prepaid, return receipt requested, to the party or parties herein specified to receive such notices, demands or other communications at the following addresses, or a't such addresses as the Parties shall from time to time designate in writing LESSOR CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attention Director of Economic Development 9 06 128/9527 LESSEE HUNTINGTON BEACH PLAYHOUSE 18411 Gothard Street Huntington Beach, CA 92648 Attention President IN WITNESS WHEREOF, the parties hereto have caused this executed by and through their authorized officers the day, month, and written HUNTINGTON BEACH PLAYHOUSE A California Nonprofit Corporation 1 By 7-I F- D`7 (Print Name) 00 ,,) n -�--) f)QQ } Its f r� , A P V1 i` By Vk4,, -7-lq'071 (Print Name) Its e,G e to be first above CITY OF HUNTINGTON BEACH a Municipal Corporation of the State of,Califorma Mayor City Clerk APPROVED AS TO FORM 1 �j Crty Attorney 9�' I INITIATED AND APPROVED Director of Econon evelopment 10 06 128/9527 City of Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L FLYNN CITY CLERK October 31 2007 Huntington Beach Playhouse Attn President 18411 Gothard Street Huntington Beach CA 92648 To Whom It May Concern Enclosed for your records is a fully executed copy of the Lease Agreement between the City of Huntington Beach and the Huntington Beach Playhouse for nonexclusive use of the Public Library Theater Sincerely JF pe Enclosure Agreement G followup agrmtltr Sister Cities AnJo Japan • Waltakere New Zealand (Telephone 714 536 5227)