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HomeMy WebLinkAboutHurley International LLC - 2016-05-16Dept. ID FD15 013 Page 1 of 2 Meeting Date: 5/16/2016 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 5/16/2016 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: David A. Segura, Fire Chief SUBJECT: Approve and authorize execution of a five year License Agreement between the City and Hurley International LLC for sponsorship of two Lifeguard Towers; and, approve the $90,000 reimbursement to the Fire Department Statement of Issue: Hurley International, LLC, has expressed interest in continuing their partnership with the City and sponsoring the purchase and installation of two lifeguard towers in exchange for the right to advertise on the back of two towers. Financial Impact: The recommended action is cost -neutral since expenditures for the lifeguard tower purchase are offset with funding provided by Hurley International, LLC as part of the License Agreement. Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute the "License Agreement Between the City of Huntington Beach and Hurley International, LLC for Sponsorship of Two Lifeguard Towers;" and, B) Approve an appropriation of $90,000 to the Non -Departmental Equipment Replacement business unit (10040101.83700) for the purchase of two lifeguard towers. Reimbursement of $45,000 will be received in June 2016 and $45,000 in June 2017 after invoicing Hurley International, LLC for the purchase of the towers. Alternative Action(s): Do not authorize the agreement. Analysis: The City currently has 24 lifeguard towers. Due to,their specialized fiberglass and stainless steel construction, the cost to replace these towers is approximately $45,000 each. The Fire Department has a long-term rotational program to replace the towers, but financing this large purchase has been a challenge. From August 2010 to August 2015, the City maintained an agreement with Hurley International, LLC exchanging the cost of purchasing the two towers adjacent to the pier for the right to place its company logo or other marketing ads on the upper back panel of the towers. The agreement worked well and both parties derived mutual benefit from it. HB -107- Item 7. - I Dept. ID FD15 013 Page 2 of 2 Meeting Date: 5/16/2016 Hurley International, LLC wishes to continue their partnership with the City and is willing to sponsor the purchase and installation of two lifeguard towers in exchange for advertising rights. An agreement, identical to the prior agreement, is attached for your consideration. It includes the following provisions: City of Huntington Beach 1. City shall make the back panel of two lifeguard towers available to Hurley to install and maintain its logo or other product advertising. 2. City has the right to review the marketing material in advance, but shall not unreasonably withhold approval. Hurley International, LLC 1. Hurley International, LLC shall have the right to change its advertising on the back of the towers at any time as long as it doesn't adversely affect public safety. 2. Hurley International, LLC acknowledges and agrees that the City shall review and approve all advertising before it is placed on back panel of either lifeguard tower. 3. Hurley International, LLC acknowledges and agrees that the City is not endorsing the products or advertising of Hurley by the approving of this license. 4. Hurley International, LLC agrees that it shall not suffer or permit any dangerous condition to be created, exist, or continue on the license areas as a result of its installation or maintenance activities associated with the advertising on the back panel of the towers, and that all of its acts, and those of its contractors and subcontractors, shall be carried out in a careful and reasonable manner. The tower construction is similar to the existing towers. According to past experience, the advertising on the back of the towers will not conflict with ocean lifeguarding activities. An appropriation of $90,000 is requested for the purchase of the towers. This funding would be appropriated in the Non -Departmental Equipment Replacement business unit (10040101.83700) and, according to the terms of the agreement, Hurley International, LLC will reimburse $45,000 after the City invoices in June . 2016. The second and final reimbursement from Hurley International, LLC of $45,000 will be invoiced in June 2017. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and maintain public safety. Attachment(s): 1. License Agreement Between the City of Huntington Beach and Hurley International, LLC for Sponsorship of Two Lifeguard Towers. Item 7. - 2 xB -1 0s- LICENSE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND HURLEY INTERNATIONAL LLC FOR SPONSORSHIP OF TWO LIFEGUARD TOWERS This LICENSE AGREEMENT (this "Agreement"), is made by and between the City of Huntington Beach, a municipal corporation (the "City"), on the one hand, and Hurley International LLC, an Oregon limited liability company (hereinafter referred to as "Hurley"), on the other hand. RECITALS A. City is the owner of the City Beach, Pier and Lifeguard Towers located on the Beach, within the City of Huntington Beach (hereinafter the "Public Property"). B. Hurley desires to sponsor two Lifeguard Towers on the Huntington Beach Pier, with one on each side of the Pier, in exchange for compensation for using the back panel, only, of the two Lifeguard Towers for advertising their products and logo. C. Hurley desires to obtain a license from the City for the purposes of installing and maintaining the advertising on two Lifeguard Towers. D. City desires to allow sponsorship of two Lifeguard Towers by accepting compensation for using the back panel, only, to help raise funds for the cost of programs and construction and maintenance of two Lifeguard Towers. NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other valuable consideration, the receipt of which is hereby acknowledged, the City and Hurley do hereby agree as follows: License Area. The area subject to this License (the "License Area") is the back panel of two Lifeguard Towers, one on each side of the Pier, at a location designated by the City. Hurley will have the entire upper section of the Lifeguard Tower for their advertisement and the City will retain the lower section for its safety rules and regulations. 2. Grant of License. The City hereby grants to Hurley a license to use the back panel of two Lifeguard Towers, one on each side of the Pier, to advertise its products and logo. a. City shall make the back panel of two Lifeguard Towers available to Hurley to install and maintain advertising of its products and logo. Hurley shall have the right to change its advertising on the back of the towers at any time. 1.6-5211/135156 1 of 6 b. Hurley acknowledges and agrees that the City shall review and approve all advertising before it is placed on the back panel of either Lifeguard Tower, and such review and approval shall not be unreasonably withheld. C. Hurley acknowledges and agrees that the City is not endorsing the products or advertising of Hurley by the grant of this License. 3. Term of Agreement. This Agreement shall have a term of five years ("Term") commencing on June 1, 2016 (the "Effective Date") and ending on May 31, 2021, and may be extended for one additional five-year term after the expiration of the Term, provided both parties agree. Hurley shall have the right of first refusal to continue advertising on one or both Lifeguard Towers. 4. Payment. a. The total payment due under this Agreement is $90,000.00, payable as follows: (a) an initial payment of $45,000.00, to be invoiced by the City as of June 1, 2016, and (b) a second payment of $45,000.00, to be invoiced by the City as of June 1, 2017. Hurley will pay the City the amount properly invoiced within forty-five (45) days after the date of each such invoice. Such payments are contingent upon City Council approval of this Agreement prior to the Effective Date. b. If the payment required by this Section 4 is not received by the City Treasurer within forty-five (45) days after the date of each invoice described above, or the next business day if the forty-fifth day falls on a weekend or holiday, Hurley shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 '/z %) penalty per month shall be added for each month such payment hereunder is due but unpaid. 5. Safety Requirements. In exchange for the License granted above, Hurley agrees that it shall not suffer or permit any dangerous condition to be created, exist, or continue on the License Area as a result of its installation or maintenance activities associated with the advertising on the back panel of the Lifeguard Towers, and that all of its acts and those of its contractors and subcontractors shall be carried out in a careful and reasonable manner. 6. Condition of License Area. Hurley acknowledges that it shall enter the License Area at its own risk, and that neither the City nor any of its officers, employees, agents, or contractors has made any warranty or representation to Hurley with regard to the safe condition of the License Area. 16-5211/135156 2 of 6 7. Indemnification, Defense, Hold Harmless. Hurley hereby agrees to protect, defend, indemnify and hold and save harmless the City, its officers, and employees against any and all liability, claims, judgments, costs and demands, however caused, including those resulting from death or injury to Hurley's employees and damage to Hurley's property, arising directly or indirectly out of the grant of License herein contained, including those arising from the passive concurrent negligence of the city, but save and except those which arise out of the active concurrent negligence, sole negligence, or the sole willful misconduct of the City. Hurley will conduct all defense at its sole cost and expense. Worker's Compensation and Employers' Liability Insurance. Pursuant to the California Labor Code Section 1861, Hurley acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for. workers' compensation; Hurley covenants that it will comply with all such laws and provisions prior to the encroachment into Public Property pursuant to this license. Hurley shall maintain Workers' Compensation Insurance as required by the State of California, with Statutory Limits and Employer's Liability Insurance with a limit of no less than One Million Dollars ($1,000,000) per accident for bodily injury or disease. 9. General Liability Insurance. Hurley shall carry at all times incident hereto, on all activities to be performed in Public Property as contemplated herein, general liability insurance, including coverage for bodily injury, and property damage. All insurance shall be underwritten by insurance companies in forms satisfactory to the City. Said insurance shall name the City, its officers, agents and employees and all public agencies as determined by the City as Additional Insureds. Hurley shall subscribe for and maintain said insurance policies in full force and effect during the life of this Agreement, in an amount of not less than One Million Dollars ($1,000,000) combined single limit coverage. If coverage is provided - under a form which includes a designated general aggregate limit, such limit shall be not less.than One Million Dollars ($1,000,000). In the event of aggregate coverage, Hurley shall immediately notify the City of any known depletion of limits. Hurley shall require evidence that its insurer has waived subrogation rights against the City and are primary/non-contributory. 10. Certificates of Insurance; Additional Endorsements. Prior to the encroachment into Public Property pursuant to this license, Hurley shall furnish to the City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Agreement; said certificates shall provide the name and policy number of each carrier and policy. Carrier 16-5211/135156 3 of 6 shall comply with terms of policy regarding notice of cancellation. Hurley shall maintain the foregoing insurance coverages in force until this Agreement is terminated. This Agreement requires the City, its officers, elected or appointed officials, employees, agents and volunteers to be covered as Additional Insureds via blanket provisions provided by Hurley's insurance carrier. 11. Insurance Proceeds. Any insurance proceeds received by City because of the total or partial destruction of said License Area or any buildings on said License Area shall be the sole property of the City. 12. Insurance Hazards. Hurley shall not commit or permit the commission of any acts on said License Area nor use or permit the use of said License Area in any manner that will increase the existing rates for or cause the cancellation of any property, liability or other insurance policy insuring the Huntington Beach Pier and Lifeguard Station, said License Area or the improvements on said License Area. Hurley shall, at its sole cost and expense, comply with any and all requirements of insurance carriers necessary for the continued maintenance at reasonable rates of property, liability and other insurance policies on the Huntington Beach Pier and Lifeguard Station, said License Area and the improvements on said License Area. 13. Liens. Hurley shall not permit or suffer any mechanic's or materialmen's or other liens of any kind or nature to be recorded and/or enforced against the License Area for work done or materials furnished on its behalf. 14. Termination. Either party may terminate this Agreement upon sixty (60) days written notice to the other. If the City terminates this Agreement prior to the end of the Term, the City will refund to Hurley, no later than the effective termination date set forth in its written notice of termination, a pro -rated portion of the payments made by Hurley to the City over the Term under Section 4(a) above (for example, if the City terminates this Agreement effective as of May 31, 2019, the City will refund $36,000 (40% of the prior payments) to Hurley no later than May 31, 2019). 16-5211/135156 4 of 6 15. Miscellaneous. A. Assignment. Neither Hurley nor the City shall assign its rights or responsibilities under this Agreement, in whole or in part, to any third parry except with the written consent of the other party hereto, and any attempted assignment without such prior written consent shall be invalid and void. Notwithstanding the foregoing sentence, Hurley may assign its rights and delegate its duties under this Agreement to its parent corporation NIKE, Inc., or to any other subsidiary of NIKE, Inc., without the City's consent. B. Compliance with Laws. Hurley shall comply with all required State, County and City laws and regulations relating to the use of the License Area and shall be solely responsible for all costs incurred in connection with such compliance. C. Applicable Law. This Agreement shall be construed, governed and enforced in accordance with the laws of the State of California. D. Attorney's Fees. In the event suit is brought by either party to enforce the terms and provisions of this Agreement or to secure the performance hereof, each party shall bear its.own attorney's fees. The prevailing parry shall not be entitled to recover its attorney's fees. E. Release. Hurley hereby releases and forever discharges City, its officers, employees and officials, of and from any and all claims, demands, actions or causes of action whatsoever which Hurley may hereafter have, against the City specifically arising out of the matter of the entry of Hurley onto the Public Property. This is a complete and final release and shall be binding upon Hollister and the heirs, executors, administrators, successors and assigns of Hurley's Property. Hurley hereby expressly waives any rights under or benefit of any law of any jurisdiction whatsoever providing the contrary. Neither the acceptance of this release nor any payment made hereunder shall constitute any admission of any liability of City. F. Waste. Hurley shall not alter, damage or commit any kind of waste upon the Public Property or any improvement, equipment or personal property thereon and shall not interfere in any manner with the operations or activities of City. Hurley shall make no change in the use of the Public Property nor shall the design of the Public Property be changed other than as authorized herein without prior written consent of City. Hurley shall not cause any workmen's or materialmen's liens to be placed upon the Public Property and agrees to indemnify and hold City harmless against any such liens including but not limited to the payment of attorney's fees. G. Entire Agreement. This Agreement contains a full a complete expression of the parties and it shall supersede all other agreements, written or oral, hereto made by the parties with respect to the subject matter hereof. This Agreement. may be modified only in writing, signed by the parties hereto. 16-5211/135156 5 of 6 H. Service Interruption. City may, upon written notice to Hurley, suspend or revoke this Agreement without liability to Hurley when public necessity so requires, or suspend operation immediately hereunder, without any advance notice and without any liability to Hurley, in the event of public emergency or necessity, as may be determined by the City Administrator. Such suspension will terminate when the public necessity or emergency no longer exists. IN WITNESS WHEREOF, authorized representatives of the City and Hurley have duly executed this Agreement as of M /4; I _/�2016. HURLEY INTERNATIONAL LLC, an Oregon limited liability company BY: 4tl;ln (Pomf)ig print name ITS: (circle one) Chairman/President/Vice President E mm By:14AJ'1.( CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor kA City CIJA 416 Ib rf (h t. CrcD5Ct1\p Ci Attorney OW uk\kg3\<<c print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. IA I'ED AND P OVE Secretary — Treasurer ��, �/„ 7 ,� �/n ,, ire Chief REV , D AND APPROVED: �� Ci a'n ei 16-5211/135156 6 of 6