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Michael Mehalick - 2008-04-07
2, L:_7b� 7���� Council/Agency Meeting Held: Dr Deferred/Continued to: f, Approved ❑ Conditionally Approved ❑ Denied City erk's ign u e Council Meeting Date: 4/7/2008 Department ID Number: ED 08-06 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMB SUBMITTED BY: PAUL EMERY, INTERIM CITY ADMINISTRATOR PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC EVELOPMENI�4 RON HAYDEN, DIRECTOR OF LIBRARY SERVICE SUBJECT: APPROVAL OF LEASE OF DOWNTOWN LIBRARY SPACE Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The City Council is asked to approve a one-year lease agreement with Michael Mehalick for the use of the premises at 525 Main Street (Library Annex) in the City of Huntington Beach. Funding Source: Not applicable. Recommended Action: Motion to: Approve and authorize the Mayor and City Clerk to execute the Lease Agreement between the City of Huntington Beach and Michael Mehalick for the Premises at 525 Main Street (Library Annex) in the City of Huntington Beach. Alternative Action(s): Do not approve the Lease Agreement between the City of Huntington Beach and Michael Mehalick. Analysis: In December 1998, the City Council approved the lease agreement between the City and Michael Mehalick for the use of the 780 square foot space located on the first floor of the Main Street Library (also referred to as the Library Annex). REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 4/7/2008 DEPARTMENT ID NUMBER: ED 08-06 The City Council previously approved the rental of the Library Annex for a commercial, non - retail use in April 1997. Since the Main Street Library has minimal parking facilities, public access to the rental space must be kept to a minimum in order to meet parking requirements and to minimize conflict with library pedestrian traffic. The Premises are leased by Mr. Mehalick for the purpose of operation of a design/architect business. Mr. Mehalick's business has minimal, if any, impact on the parking facilities and pedestrian traffic. He has also proven to be an excellent tenant over the last several years. The City Attorney's Office has prepared a new lease agreement between the City and Michael Mehalick to continue the lease of the Library Annex at 525 Main Street for a term of one year commencing on April 1, 2008 through March 31, 2009 with a month -to -month extension thereafter. The current lease rate is $930.01 per month and increases occur annually based on the Consumer Price Index (CPI) as stated in the lease agreement. All negotiations have been concluded and Mr. Mehalick has reviewed and approved the proposed lease agreement. Staff recommends the execution of the proposed lease agreement. Strategic Plan Goal: F-1 Provide additional revenue to the General Fund. Environmental Status: Not applicable. Attachment(s): P-gg9,,Number• 1. Lease Agreement between the City of Huntington Beach and Michael Mehalick for the Premises at 525 Main Street (Library Annex) in the City of Huntington Beach. 2. Certificate of Insurance. -2- 3/24/2008 9:32 AM ATTACHMENT #1 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MICHAEL MEHALICK FOR THE PREMISES AT 525 MAIN STREET (LIBRARY ANNEX) IN THE CITY OF HUNTINGTON BEACH THE CITY OF HUNTINGTON BEACH, hereinafter referred to as "CITY," hereby leases to MICHAEL MEHALICK, hereinafter referred to as "LESSEE," those certain premises, herein called "Premises," in the County of Orange, State of California, described more particularly in Exhibit 'A," attached hereto and incorporated herein by this reference, upon the following terms and conditions: ARTICLE 1. TERM OF LEASE Section 1.01. Original Term. This Lease shall be for a term of one (1) year, commencing at ,A: on IZand ending at //.',1-9P1r7 , on , unless sooner terminated as herein provided. Should LESSEE fully and faithfully perform all the terms and conditions of this Lease for the full term specified in this section, LESSEE may thereafter extend the Lease on a month -to -month basis. CITY may, however, upon sixty (60) days' notice in writing to LESSEE, suspend or revoke this lease agreement without liability to the CITY when public necessity so requires, or to suspend operation immediately hereunder temporarily in the event of public emergency, as may be reasonably determined by the City Administrator. Such suspension will terminate when the public necessity no longer exists. Section 1.02. Hold Over. Should LESSEE hold over and continue in possession of said 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. ARTICLE 2. RENT Section 2.01 Rental. LESSEE agrees to pay to CITY as rent for the -use and occupancy of said Premises the sum of Nine Hundred Thirty Dollars and one cent ($930.01) per month through September 30, 2008. Thereafter, rent will increase on the anniversary date each October 1st based upon an annual 07-1283/15400 1 percentage adjustment to the Consumer Price Index for all Urban Consumers for Los Angeles, Orange and Riverside Counties established by the U.S. Bureau of Labor Statistics ("CPI") not less than three percent (3%) annually and not to exceed five percent (5%) annually. The rent specified in this section shall be paid by LESSEE to CITY at 2000 Main Street, Huntington Beach, California 92648, or at such other place or places as CITY may from time to time designate by written notice delivered to LESSEE. A late charge equal to the prime commercial interest rate established by the Bank of America shall be added on the 10'h day after any payment hereunder is due, but unpaid. ARTICLE 3. USE OF PREMISES Section 3.01. Permitted Use. The Premises are let for the purpose of operation of a design/architect business and other such uses as may from time to time be approved in writing by CITY. CITY reserves the right to prohibit the sale or rental of any item or article which is objectionable on the basis of public welfare or beyond the scope of the merchandise necessary for proper service to the public. Tenant shall have the right to alter the interior walls of said building, at tenant's sole expense, should such alterations be necessary, subject to the provisions of Section 5.02 herein. Section 3.02. Subleasing or Assigning as Breach. LESSEE shall not encumber, assign, or otherwise transfer this Lease, any right or interest in this Lease, or any right or interest in said Premises or any of the improvements that may now or hereafter be constructed or installed on said Premises without the express written consent of the CITY, in writing, first had and obtained. Neither shall LESSEE sublet said Premises or any part thereof or allow any other person, other than LESSEE's agents, servants, nor employees, to occupy said Premises or any part thereof without the prior written consent of the CITY. A consent by the CITY to one assignment, one subletting, or one occupation of said Premises by another person shall not be deemed to be a consent to any subsequent assignment, subletting, or occupation of said Premises by another person. Any encumbrance, assignment, transfer, or subletting without the prior written consent of the CITY whether it be voluntary or involuntary, by operation of law or otherwise, is void and shall, at the option of the CITY, terminate this Lease. The consent of the CITY to any encumbrance, assignment, including occupation or transfer hereof of LESSEE's interest in this Lease 07-1283/15400 2 or the subletting by LESSEE of said Premises or parts of said Premises shall not be unreasonably withheld; however, the CITY shall have the right of first refusal in connection with any assignment, sale, sublease or transfer hereof and agrees to exercise or refuse such right in writing within thirty (30) days of notice by LESSEE. Such right shall not apply, however, to assignments, transfers, or sublettings to immediate family members of LESSEE, a family trust, or to any corporate entity of which LESSEE, or any of LESSEE's immediate family, are sole stockholders. ARTICLE 4. TAXES AND UTILITIES Section 4.01. Payment of Utility Charges. CITY shall pay, and hold LESSEE and the property of LESSEE free and harmless from, all charges for the furnishing of gas, water, electricity and for the removal of garbage and rubbish from said Premises during the term of this Lease, or any extensions thereof. Telephone services and other public utilities to said Premises during the term of this Lease, or any extension thereof, are the sole responsibility of LESSEE. Section 4.02 Property Taxes. LESSEE shall pay before they become delinquent all taxes, assessments, or other charges levied or imposed by any governmental entity on the furniture, trade fixtures, appliances, and other personal property placed by LESSEE in, on, or about said Premises including, without limiting the generality of the other terms used in this section, any shelves, counters, vaults, vault doors, wall safes, partitions, fixtures, machinery, plant equipment, office equipment, television or radio antennas, or communication equipment brought on said Premises by LESSEE. All real property taxes or possessory interest taxes and assessments levied or assessed against. said Premises by any governmental entity, shall be paid, before they become delinquent by LESSEE. ARTICLE 5. MAINTENANCE, ALTERATIONS AND REPAIRS Section 5.01. Maintenance by Lessor. CITY shall maintain in good condition and repair the exterior roof, exterior walls, structural supports, and the foundation of said Premises including heating/air conditioning and plumbing. Except as otherwise expressly provided in Section 5.02 of this Lease, LESSEE shall, at his own cost and expense, keep and maintain all portions of said Premises as well as all improvements on said Premises and all facilities appurtenant to said Premises in good order and repair and in as safe and clean a condition as they were when received by LESSEE from CITY, reasonable wear and tear excepted. 07-1283/15400 3 Section 5.02. Alterations and Liens. LESSEE shall not make or permit any other person to make any alterations to said Premises or to any improvement thereon or facility appurtenant hereto without the written consent of CITY first hand and obtained. LESSEE shall keep the Premises free and clear from any and all liens, claims, and demands for work performed, materials furnished, or operations conducted on said Premises at the instance or request of LESSEE. Furthermore, any and all alterations, additions, improvements, and fixtures, except furniture and trade fixtures, made or placed in or on said Premises by LESSEE or any other person shall, on expiration or sooner termination of this Lease, become the property of CITY and remain on said Premises; provided, however, that CITY shall have the option on expiration or sooner termination of this Lease of requiring LESSEE, at LESSEE's sole cost and expense, to remove any or all such alterations, additions, improvements or fixtures from said Premises. Section 5.03. Inspection by Lessor. LESSEE shall permit CITY or CITY's agents, representatives, or employees to enter said Premises at all reasonable times, with notice, 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 CITY's interest in said Premises under this Lease or to perform CITY's duties under this Lease. Section 5.04. Surrender of Premises. On expiration or sooner termination of this Lease, or any extensions or renewals of this Lease, LESSEE shall promptly surrender and deliver said Premises to CITY in as good condition as they are now at the date of this Lease, reasonable wear and tear and repairs herein required to be made by CITY excepted. ARTICLE 6. INDEMNITY AND EXCULPATION INSURANCE Section 6.01. Hold -Harmless Clause. LESSEE hereby agrees to protect, defend, indemnify and hold harmless CITY, and the property of CITY, 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) 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 CITY. CITY shall be 07-1283/15400 4 reimbursed by LESSEE for all costs and attorney's fees incurred by CITY in enforcing this obligation. LESSEE will conduct all defense at its sole cost and expense and the CITY shall approve selection of LESSEE's counsel. 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. Section 6.02. 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 CITY 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 CITY 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 CITY, Lessee shall obtain and furnish to CITY, 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 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 CITY, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall 07-1283/15400 5 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 CITY, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to CITY 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 CITY 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 CITY. 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 CITY. The proceeds of any such insurance payable to CITY may be used, in the sole discretion of CITY, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as CITY 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 CITY; (2) CITY shall not be responsible for premiums or assessments on the policy. 07-1283/15400 6 A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with CITY 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 CITY. 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 CITY, 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 CITY. E. Certificates of Insurance; Additional Insured Endorsements Prior to commencement of this Lease, Lessee shall furnish to CITY 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 CITY; 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. CITY 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 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 07-1283/15400 % 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 6.03. Determination of Replacement Value. The "full replacement value" of the buildings and other improvements to be insured shall be determined by the company issuing the insurance policy at the time the policy is initially obtained. Not more frequently than once each year, either Party shall have the right to notify the other Party that it elects to have the replacement value redetermined by an insurance company. The redetermination shall be made promptly and in accordance with the rules and practices of the Board of Fire Underwriters, or a like board recognized and generally accepted by the insurance company, and each Party shall be promptly notified of the results by the company. The insurance policy shall be adjusted according to the redetermination. Section 6.04. Loss of Rent Insurance. Lessee, at its cost, shall maintain loss of rent insurance, ensuring that the minimum rent will be paid to CITY for a period up to six (6) months if the Premises are destroyed or rendered inaccessible by a risk insured against by a policy of standard fire and extended coverage insurance with vandalism and malicious mischief endorsements. Section 6.05. Waiver of Subrogation. The Parties release each other, and their respective authorized representatives, from any claims for damage to any person or to the Premises and to the fixtures, personal property, and alterations of either in or on the Premises that are caused by or result from risks insured against under any insurance policies carried by the Parties and in force at the time of any such damage. Each Party shall cause each insurance policy obtained by it to provide that the insurance company waives all rights of recovery by way of subrogation against either Party in connection with any damage covered by any policy. Neither Party shall be liable to the other for any damage caused by fire or any of the risks insured against under any insurance policy required by this Lease. If any insurance policy cannot be obtained with a waiver of subrogation, or is obtainable only by the payment of an additional premium charge above that charged by insurance companies issuing policies without waiver of subrogation, the Party undertaking to obtain the insurance shall notify the other Party of this fact. The 07-1283/15400 g other Party shall have a period of 20 days after receiving the notice either to place the insurance with a company that is reasonable satisfactory to the other Party and that will carry the insurance with a waiver of subrogation, or to agree to pay the additional premium if such a policy is obtainable at additional cost. If the insurance cannot be obtained or the Party in whose favor a waiver or subrogation is desired refused to pay the additional premium charged, the other Party is relieved of the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved. ARTICLE 7. SIGNS AND TRADE FIXTURES Section 7.01. Installation and Removal of Trade Fixtures. LESSEE shall have the right, at any time and from time to time during the term of this Lease and any renewal or extension of such term, at LESSEE's sole cost and expense, to install and affix in, to, or on said Premises, such items, herein called `trade fixture, for use in LESSEE's trade or business as LESSEE may, in his sole discretion, deem advisable subject to CITY ordinances and permits and Section 7.03 below. Any and all such trade fixtures that can be removed without structural damage to said Premises or any building or improvements on said Premises shall, subject to Section 7.02 of this LEASE, remain the property of the LESSEE and may be removed by LESSEE at any time prior to the expiration or sooner termination of this Lease. Section 7.02. Unremoved Trade Fixtures. Any trade fixtures described in this Article that are not removed from said Premises by LESSEE within thirty (30) days after the expiration or sooner termination, regardless of cause, of the Lease shall be deemed abandoned by LESSEE and shall automatically become the property of CITY as owner of the real property to which they are affixed and not simply because of the lien described in Section 7.02 of this Lease Section 7.03. Signs. LESSEE shall not place and maintain, nor permit any other person to place or maintain, in any exterior door, wall, or window of said Premises any sign, awning, canopy, marquee, or other advertising without the express written consent and approval of CITY. Furthermore, LESSEE shall not place any decoration, lettering, or advertising matter -on the glass of any interior or exterior shop window of said Premises without approval and consent of CITY. Should CITY consent to any such sign, awning, canopy, marquee, decoration, or advertising matter, LESSEE shall maintain it at all times during this Lease in good appearance and repair. On expiration or sooner termination of this Lease, any of the items mentioned in this section not removed from said Premises by LESSEE on such 07-1283/15400 9 expiration or termination of this Lease may, without damage or liability, be destroyed by CITY. This Lease is expressly contingent upon approval of all signs by both CITY and LESSEE and the City of Huntington Beach. ARTICLE 8. DESTRUCTION, ETC. Section 8.01. Partial Destruction. Should Premises or the building on said Premises be partially destroyed by any cause not the fault of LESSEE or any person in or about said Premises with the consent, express or implied, of LESSEE, this Lease shall continue in full force and effect and CITY, at CITY's own cost and expense, shall promptly commence and diligently continue to complete the work of repairing and restoring said Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty (180) working days. Section 8.02. Total Destruction. Should Premises or the building on said Premises be so far destroyed by any cause not the fault of LESSEE or any person in or about said Premises with the consent, express or implied, of LESSEE that they cannot be repaired or restored to their former condition within one hundred eighty (180) working days, CITY may, at CITY's option: A. Continue this Lease in full force and effect by repairing and restoring, at CITY's own cost and expense, said Premises to their former condition; or B. Terminate this Lease by giving LESSEE written notice of such termination. Section 8.03. Insurance Proceeds. Any insurance proceeds received by CITY because of the total or partial destruction of said Premises or the building on said Premises shall be the sole property of CITY, free from any claims of LESSEE, except any and all insurance proceeds, including business interruption insurance which would ordinarily flow to the benefit of LESSEE. Section 8.04. Abatement of Rent. Should CITY elect under Section 8.02 of this Lease or be required under Section 8.01 of this Lease to repair and restore said Premises to their former condition following partial or full destruction of said Premises or the building on said Premises: A. CITY shall have full right to enter said Premises and take possession of so much of said Premises, including the whole of said Premises, as may be reasonably necessary to enable CITY promptly and efficiently to carry out the work of repair and restoration; and 07-1283/15400 10 B. The percentage rent described in Section 2.01 of this Lease shall not be abated for the time LESSEE is prevented from using the whole of said Premises. Section 8.05. Total Condemnation. Should, during the term of this Lease or any renewal or extension thereof, title and possession of all of said Premises be taken under the power of eminent domain by any public or quasi -public agency or entity, this Lease shall terminate as of 12:01a.m., of the date actual physical possession of said Premises is taken by the agency or entity exercising the power of eminent domain and both CITY and LESSEE shall thereafter be released from all obligations, except those specified in Section 8.08 of this Lease, under this Lease. Section 8.06. Termination Option for Partial Condemnation. Should, during the term of this Lease or any renewal or extension thereof, title and possession of only a portion of said Premises be taken under the power of eminent domain by any public or quasi -public agency or entity, LESSEE may, at LESSEE's option, terminate this Lease if more than five percent (5%) of the ground area (or floor space) or more than ten percent (10%) in value of said Premises is taken under the power of eminent domain. LESSEE shall exercise his option by giving written notice to CITY within thirty (30) days after actual physical possession of the portion subject to the eminent domain is taken by the agency or entity exercising the power. This Lease shall terminate as of 12:01a.m. of the date the notice is deemed given to CITY. Section 8.07. Partial Condemnation Without Termination. Should LESSEE fail to exercise the option described in Section 8.06 of this Lease or should the portion of said Premises taken under the power of eminent domain be insufficient to give rise to the option described in Section 8.06 of this Lease, then, in the event: A. This Lease shall terminate as to the portion of said Premises taken by eminent domain as of 12:01a.m. of the day, herein called the "date of taking," actual physical possession of that portion of said Premises is taken by the agency or entity exercising the power of eminent domain. B. CITY, at CITY's own cost and expense, will remodel/reconstruct the building remaining on the portion of said Premises not taken by eminent domain into a single efficient architectural unit as soon after the date of taking, or before, as can be reasonably done; 07-1283/15400 11 provided, however, that the percentage rent specified in this Lease shall be abated or reduced during such remodeling and reconstruction. Section 8.08. Condemnation Award. Should, during the term of this Lease or any renewal or extension thereof, title and possession of all or any portion of said Premises be taken under the power of eminent domain by any public or quasi -public agency or entity, the portion of the compensation or damages for the taking awarded to each of the Parties to this Lease, CITY and LESSEE, shall belong to and be the sole property of the Party CITY or LESSEE, to whom it is awarded. LESSEE shall be entitled to that portion of the compensation or damages awarded for the eminent domain taking that represents (1) the reasonable value of LESSEE's rights under this Lease for the unexpired term of this Lease; (2) the cost or loss sustained by LESSEE because of the removal of LESSEE's merchandise, trade fixtures, equipment, and furnishings from the portion of said Premises taken by eminent domain; and (3) whatever other compensation and/or damages which may be usual and customary to LESSEES under the circumstances. Section 8.09. Arbitration of Condemnation Award. Should separate awards not be made to CITY and LESSEE for the taking by eminent domain of all or any portion of said Premises, and should CITY and LESSEE be unable to agree on the manner the total award is to be divided between them pursuant to Section 8.08 of this Lease, the proper division of the award between CITY and LESSEE shall be settled by arbitration in accordance with the rules promulgated by the American Arbitration Association. Each Party shall appoint an arbitrator and the two arbitrators so appointed shall, within a month after both have been appointed, select a third arbitrator. The decision of any two of the three arbitrators in writing shall be binding on both CITY and LESSEE. Should no two arbitrators be able to agree within one month after appointment of the third arbitrator, the report of the arbitrator most favorable to CITY and the report of the arbitrator most favorable to LESSEE shall both be disregarded and the report of the remaining arbitrator shall be binding on both CITY and LESSEE. Should either CITY or LESSEE fail to appoint an arbitrator within fifteen (15) days after receiving written notice from the other to so do, the arbitrator selected by the other Party shall act for both and his decision in writing shall be binding on both LESSOR and LESSEE. 07-1283/15400 12 Section 8.10. Relocation and Assistance. In the event this Lease is terminated for any reason by CITY, LESSEE shall not be entitled to any relocation rights or benefits and expressly waives such benefits and rights under CITY, State or Federal Relocation Assistance Plans. ARTICLE 9. DEFAULT, ASSIGNMENT, AND TERMINATION OF MASTER LEASE Section 9.01. Abandonment by LESSEE. Should LESSEE breach this Lease and abandon said Premises prior to the natural expiration of the term of this Lease, CITY may: A. Continue this Lease in effect by not terminating LESSEE's right to possession of said Premises, in which event CITY shall be entitled to enforce all his rights and remedies under this Lease, including the right to recover the rent specified in this Lease as it becomes due under this Lease; or B. Terminate this Lease and recover from LESSEE any and all damages provided by law Section 9.02. Default by LESSEE. Should LESSEE default in the performance of any of the covenants, conditions, or agreements contained in this Lease, LESSEE shall have breached the Lease and CITY may, in addition to the remedy specified in the subparagraph (b) of Section 9.02 of this Lease, re-enter and regain possession of said Premises in the manner provided by the laws of unlawful detainer of the State of California then in effect Section 9.03. Insolvency of LESSEE. The insolvency of LESSEE as evidenced by a receiver being appointed to take possession of all or substantially all of the property of LESSEE, or the making of. a general assignment for the benefit of creditors by LESSEE, or filing a petition in bankruptcy shall terminate this Lease and entitle CITY to re-enter and regain possession of said Premises. Section 9.04. Cumulative Remedies. The remedies given to CITY in this Article shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease. Section 9.05. Waiver of Breach. The waiver by CITY of any breach by LESSEE of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent breach by LESSEE either of the same or another provision of this Lease. 07-1283/15400 13 ARTICLE 10. MISCELLANEOUS Section 10.01 Force Maieure — Unavoidable Delays. Should the performance of any act required by this Lease to be performed by either CITY or LESSEE be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, laws or regulations, or any other cause outside of the control of either Party except financial inability not the fault of the Party required to perform the act, the time for performance of the act will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused, provided, however, that nothing contained in this section shall excuse the prompt payment of rent by LESSEE as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the Party, CITY or LESSEE, required to perform the act. Section 10.02. Care of Premises — Maintenance Deposit. A. LESSEE shall not obstruct, cause or permit any obstruction surrounding the Premises or any part thereof in any manner whatsoever. B. LESSEE shall comply with all written notice served by CITY with regard to the care and maintenance of the interior of the Premises. Any written notice hereunder shall specify the work to be done, the estimated cost thereof, and the period of time deemed to be reasonable necessary for completion of such work. Should LESSEE fail to comply with CITY's written notice within fifteen (15) days, or within a time deemed reasonably necessary of the time specified therein, LESSEE shall pay over to CITY the estimated cost of such work as set forth in the notice. Upon receipt of such sum, CITY shall than proceed to cause the required work to be performed. C. Notice. Any written notice, given under the terms of this Lease, shall be either delivered personally or mailed, certified mail, postage prepaid, addressed to the Party concerned, as follows: CITY LESSEE Department of Economic Development Michael Mehalick Design City of Huntington Beach 525A Main Street 2000 Main Street Huntington Beach, CA 92648 Huntington Beach, CA 92648 Phone (714)374-2050 07-1283/15400 14 D. Waste or Nuisance. LESSEE shall not commit or permit the commission by others of any waste on said Premises; LESSEE shall not maintain, commit or permit the maintenance or commission of any nuisance as defined in Section 3479 of the California Civil Code on Said Premises; and LESSEE shall not use or permit the use of said Premises for any unlawful purpose. E. Compliance With Law. LESSEE shall, at LESSEE's own cost and expense, comply with all statutes, ordinances, regulations, and requirements of all governmental entities, federal, state, county and municipal, relating to LESSEE's use and occupancy of said Premises whether such statutes, ordinances, regulations, and requirements be now in force or hereinafter enacted. The judgment of any court of competent jurisdiction, or the admission by LESSEE in a proceeding brought against LESSEE by any government entity, that LESSEE has violated any such statute, ordinance, regulation, or requirement shall be conclusive as between CITY and LESSEE and shall be ground for termination of this Lease by CITY. F. Binding on Heirs and Successors. This Lease shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the Parties hereto. G. Partial invalidity. Should any provision of this Lease be held by a court of competent jurisdiction to be either invalid, void, or unenforceable, the remaining provisions of this Lease shall remain in full force and effect unimpaired by the holding, so long as the reasonable expectations of the Parties hereto are not materially impaired. H. Sole and Only Agreement. This instrument constitutes the sole and only agreement between CITY and LESSEE respecting said Premises, the leasing of said Premises to LESSEE, or the Lease term herein specified, and correctly sets forth the obligations of CITY and LESSEE to each other as of its date. Any agreements or representations respecting said Premises or their leasing by CITY to LESSEE not expressly set forth in this instrument are null and void. 07-1283/15400 15 I. Non -Discrimination. The CITY, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: 1. Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Site shall contain or be subject to substantially the following nondiscrimination or non -segregation clauses: a. In deeds: "The grantee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, no shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation or any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin or ancestry, in the leasing, renting, 07-1283/15400 16 subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit such practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased. C. In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with references to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." WARNING: READ THE FOLLOWING PARAGRAPH BEFORE EXECUTING THIS LEASE AGREEMENT ARTICLE 11. LESSEE'S NON -ELIGIBILITY FOR RELOCATION ASSISTANCE The leased Premises is within a redevelopment project area. Government Code Section 7260 et seq. provides for relocation benefits for displaced persons. However, the LESSEE, if displaced, would not be entitled to relocation benefits by virtue of the fact that the Premises have heretofore been acquired and are being held by CITY expressly for CITY purposes. IN CONSIDERATION OF THIS INTERIM LEASE, LESSEE HEREBY ACKNOWLEDGES THAT NO BENEFITS ARE AVAILABLE AND EXPRESSLY WAIVES ANY CLAIM TO RELOCATION BENEFITS PURSUANT TO CIVIL CODE SECTION 3513. 07-1283/15400 17 In the event of Subleasing, this paragraph must be inserted in the contract, initialed and dated by the sublessee. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. LESSEE MICH EL M ALIC alu Signature 1� REVIEW ND AP VED: City Admir0trator CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California INITIATED AND AP R D: Director of Economic velopment APPROVED AS TO FORM: ` 5�z N / oB City Attorney 07-1283/15400 Ai,V, HUI, ;1 40 p zcc X LLJ ATTACHMENT #2 02/26/2008 16:39 7143742150 02/26/200e 16'40 714-778-3111 MEHALICKDESIGH STATE rAP11 INSURANCE PAGE 02/02 PAGE 01 / 01 CERTIFICA-M OF INSURANCE =axx F M t E4 :ATATF FARM FIRE ANO CASUALl Y COMPANY, Sloomington, illinpis 1Z STATR FARM GENERAL INSURANCE COMPANY, Bloomington, Illinois El STATE FARM FIRE AND CASUALTY COMPANY, Scarborough, Ontario �wse+gnro� 0 STATE FARM FLORIDA iN18URAFUCE COMPANY, Winter Hived, Fludde ❑ STATE FARM LLOYDS, Dallas, Texas insures the following poricyholder for the cmiziges Inem ated below, � PP Portcyholder MEF3ALICZ, MxCi=L DEF OF K Address ofpolicydolder 320 5,12n ST. MJNTINiC;9'M SZACH. CA 9266A LocAtiori ofoperatiohs 525 SIN STD STE A, HUN't;IrtC'-TON .13F-1 i GA 92648 {0e'.TOrflorkofoPeraffmis BUS1n$S^OE'E'ICE The policiM rrs.M- Wow have been WgM*d to the policyholder for pofty peftft thamn. The inswance dewlibed in these policies is subiW to all the tefrrts exCIUSions, and conditions of those policies. The limits of liability Shim may hatre been wr fixed by any paid ciakas. POLICY PERIOO I.i€uIITS OF LIABILITY POLICY PLUMBER TYPE, OF, INSURANCE Effeej* , ; E1#ragm L» (at beon"Ing �' policy p'enc°di 9%�adA �158-0-G CompreherisNe 1?-03-07 1,h-03-05 BODILY INJURY ANT) sz-wz-�x�s-o-G BrrMen Liability IZ--03-07----12-03-00 PROPERTY DAMAGE This lRStdrriG� IrlcitxlG"a: --- L1 Pt6rfUClfi - �%giti�7�E'tCd �pPtiJtiOR ❑ Gorifhadul91 Liability n Undergiound }hazard Coverage Each 0= rrPm $ I, 000, 000 PerSorrei Irqury Li Advert" injury GenemfAggregate $ 2, 000, Qp0 C] �� I'iMaTti cmreraw © Collapse 14,-gard Coverage Products,- Cornploted $ J., 000, 000 O BCISINTESS PROVSR7Y INSU OCt @ $29, 000.00 ,350i-AggMate PC3u" MI[IOD BODILY INJURY AND PROPERTY DAMAGE EXCESS LIABILITY " Dom ; Eq**nDow (Co mbirred Single Limit) Umbrsha E=h Otxurrancr $ cf t3dte+r Atl�rle � Part 1,STATUTORY Part Z BODILY INJURY Woftrs' Cumpemt*en and Employers Uawfly Each ,Aaadmai 3 Disease- F..ach Employee$ OiTmase - Policy Lii d $ POLICY PERIOD LIM rt OF LIABILrrY POLICY NUMBER TYPE OF IKSURAANCE EfktfiVq Rabe—" WOVM W!! (tit Irrttirtg_o4 poti<cY idd1 t THE CERTIFICATE OF iNSURANCE IS NOT A COPdMCT OF WSLIRANCa,440 FIEMII� M AFFiRWATnMLY NOR NEGAI'f'VCL-Y AMENDS, EMNI]B OR ALT9AS THE COVERAGE APPROVED IRY ANY POLICY DESCRIi WD HEREIN. FROPER4Y INSUPKgCE: FULL Raps-ACEMENT COST Nx�1 NO CGINSURANCE if any of ft doacrfbed p01 % am- canceled boom PZN PALLY PROVISION its o* aftn 6mr, ftyle Farm will try to mau a'written notce. to the oetiiticate holder 30 clays beibre car";Aatian. if horouem, we fail to mail such now-, NaML- and Addmn of Geri fceate Hoidat rw oblfgalion or riabinty m-h be imposed on State Farrar or il3 *tenf , or represent� THE CITY 0Z 910VTINGTON BV ACH, ITS ET.FCTFD OR APPOINTtt) Orr= —US, AGENTS, OP'FI R,Sr EMLO EES. ANi� VOLUNTEERS 2000 NA"rN 4 9 I-MITINGTON BE1ACK, CA 92i84A AtED A TOE 1 MCGRATH, Ci mey Signature of Auttterimd ftrasw rtilm Ac'm _ oziar�za4e t t�tc AgQRf'R Gale Stamp AIFO t Leroy Sissom f 5 M Northwest Orange Cty F419 ADDITIONAL INSURED ENDORSEMENT ]Managers or Lessors of Premises Y/Policy No.: 92-WK-6158-0 Named Insured: MEHALICK, MICHAEL Name of Person or Organization: THE CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS & EMPLOYEES A MUNICIPAL CORPORATION 2000 MAIN ST FL 5 HUNTINGTON BH CA 92648-2702 Designation of Premises: 525 MAIN ST STE A HUNTINGTON BH CA 92648-5133 WHO IS AN INSURED, under SECTION 11 DESIGNATION OF INSURED, is amended to include as an insured the person or organization shown above, but only with respect to their liability arising out of the ownership, maintenance or use of the premises ]eased to you and designated above. FE-6494 (5/91) aawrr rs IMSUQANCO This insurance does not apply to: 1. any occurrence which takes place afteryou cease to be a tenant in that premises; or 2. structural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown above. FE-6494 (5/91) Printed in U.S.A. 02/06/2008 11:49 ' 67.!2'312�f8 '15'19 7143742150 7149741742 MEHALICKDESIGN HUMAN REWURCES PAGE 02/02 PAGE 00/05 CITY OF HUNTINGTON BEACH 2000 Main Street, Huntington Beach, CA 92648 Declaration of Non -Employer Status In order to comply with the City Council Resolution No. 6277, you are required to provide proof of Workers' Compensation Insurance. If you have no employees, this farm must be signed and returned to. City of Huntington Beach Risk Management Division 2000 fain Sheet Huntington Beach, CA 92643 l certify that in.the performance of the activity or work for which this permit is issued, l shall not employ any person in any manner so as to become subject to California Workers' Compensation Insurance requirements. I authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued under this declaration if I hire any employee(s) or become subject to the prevision of the laws requiring Workers' Compensation Insurance, Applicant/Company Name: ,address Applicant Date Signed: Telephone Number: ( 711 1�) INITIATING DEPARTMENT: Economic Development Department SUBJECT: Approve Lease Agreement of Downtown Library Space COUNCIL MEETING DATE: April 7, 2008 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 Applicable Contract/Agreement (w/exhibits if applicable) Attached (Signed in full by the City Attorney) 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 Applicable Bonds (If applicable) El Notached t Applicable 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 EXPLAHATIOH FOR HISSWG ATTACH6v EHTS' °'.. REVIEWED RETURN.ED;. FORWAR' DED Administrative Staff ( ) ( ) Deputy City Administrator (Initial) ( ) ( ) City Administrator (Initial) ( ) ( ) City Clerk ( ) EXPLANATION .FOR RETURN OF ITEM. RCA Author: T. Krause Ext. 1529 City ®f Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK April 8, 2008 Michael Mehalick Design 525-A Main Street Huntington Beach, CA 92648 Dear Mr. Mehalick: Enclosed is a duly executed copy of the Lease Agreement between the City of Huntington Beach and Michael Mehalick for the premises at 525 Main Street (Library Annex) in the City of Huntington Beach. Sincerely, Enclosure: Agreement G: followup:agrmtitr Sister Cities: Anjo, Japan ® Waitakere, New Zealand (Telephone: 714-536-5227 )