HomeMy WebLinkAboutStanley M. Bloom - 1991-07-15 s
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Robert Sangster Connie Brockway
Deputy City Attorney City Clerk
Stanley M. Bloom 12/17/91
Demand for Production Documents
Following are clarifications to Berger&Norton's letter regarding the Production of Documents
by the Office of the City Clerk.
1. The City Clerk's Office referred to "four boxes of documents" as an estimate as to the
amount of records to be removed from the vault for copying purposes. I believe there was
a genuine misunderstanding when this was conveyed by telephone to Berger&Norton as
an rstimate onl. as the records were in the process of compilation. They believed they
were pulled and boxed already.
2. The records of the City Clerk's Office were compiled. The Planning Commission`s records
are not maintained by the City Clerk's Office.
3. Berger&Norton representatives were informed that the computer print out showed the
Volume and Page of every reference in the minutes to the records they requested including
public comments. The Minutes Index(the computer print out)was a reference given to
Berger&Norton to facilitate locations of minutes by Volume and Page from 111/86 to
815191. (Prior to 1986, the minutes were indexed on cards which were provided to Berger
&Norton. The Action Agendas from 8/5/91 to present was also given to the paralegals as
the computer index was only current to 815/91.) Certain words within subjects or
categories were used to narrow down the search for items
Sangster/Pierside
Page 2
specifically related to the subjects requested within the Production of Documents letter from
Berger&Norton. Due to the fact that the minutes are abbreviated for space constraints, a copy
of the parameters used for the computer search and a clear detailed explanation of what each
column, subject and category represented (including a specifically stated printout) and an
explanation of abbreviations was given to the paralegals. The terms used for the search, such as
"design serv, bloom, griffin, and tomorrow," were chosen specifically based on abbreviations and
possible references to the Pierside files and minutes. The"Fatal Error 01" reference on the print
out was explained to the Berger&Norton staff as meaning that no records exist in the requested
subject.
4. The files referred to by Berger&Norton entitled "Redevelopment Agency/Main-Pier"
contains the subject material Berger&Norton desires and should be copied.
The City Clerk's Office did not require Berger&Norton to ask for each and every item; only that
they be copied in sequence and in an orderly manner. It would have been inappropriate for this
office to remove voluminous sections from 20 or more original minute books and stack same for
copying purposes. Sections were removed from original minute books, and copied, in an orderly
manner to insure the integrity of the records.
I believe this clarifies the misunderstandings and we look forward to finalizing the document
copying. The resolutions and minutes have been copied by Berger&Norton's copy services,
however, there are several files that still have not been copied. Our staff verbally informed Berger
&Norton regarding the additional files that need to be copied.
COMPUTER PRINTOUT RE: PIERSIDE
BLOOM 19 126 120.80 120.90 410.20 600.30
CHODOS 19 126 120.80 120.90 410.20 630.30
COASTAL COMMISSION 19 126 120.80 120.90 410.20 630.30
GERIORTEGA 19 126 120.80 120.90 410.20 600.30
GRIFFIN 19 126 12C.80 120.90 410.20 600.30
HB TOMORROW 19 126 12C.80 120.90 410.20 600.30
KEYSER MARSTEN 19 126 12C.80 120.90 410.20 600.30
MAXWELUS 19 126 12C.80 120.90 410.20 600.30
L.LPIERSIDE 19 126 120.80 120.90 410.20 600.30
d8afi,es
PIERSIDE FILES as requested by Attorney Sangster In memo dated 1/t
410.20 REDEVELOPMENT AGENCY-Main Pier
Public Comments(Agenda Items)
Beginning &Ending dates of file: 3/12/90-311919D
Approx Inches of pages in file: 2 pages
AA 410.20 REDEVELOPMENT AGENCY Main-Pier
Main-Pier Phase It project
Beginning & Ending dates of file: 9/17/90-5/28/91
Approx inches of pages in file: 1/2"
AA 410.20 EIR-&lain Pier Redv. Project
Area-July 1982 -
Beginning & Ending dates of file: 7/82-unable to determine date on one set of
documents-after 2120190
Approx inches of pages in file: 1/2"
AA 410.20 MAIN-PIER REDEVELOPMENT PROJECT
AREAS-General
Beginning & Ending dates of file: 10190-9/91
Approx inches of pages in file: 1/8"
410.20 THIRD BLOCK WEST
Beginning&Ending dates of fite: 10102189
Approx inches of pages in file: 1/4"
650.50 Abandonment of Subsurface Rights-
Pierside Condemnation
eminent domain
Beginning & Ending dates of file: 1/12190
Approx Inches of pages In tile: 6 pages
420.80 Local Coastal Program Amendments
1990
Beginning &Ending dates of file: 1/90- 11/90
Approx Inches of pages In file: 1 112"
I
PIERSIDE FILES as requested by Attorney Sangster in memo dated 1/15192
page 2
MP 600.30 REDEVELOPMENT AGENCY MAIN-PIER
HUNTINGTON PACIFICA/CALIFORNIA
RESORTS (PIERSIDE)File 1 of 8
Beginning & Ending dates cf file: 8184-9/91
Approx Inches of pages In fle: 2 1/4"
MP 600.30 REDEVELOPMENT AGENCY MAIN-PIER
HUNTINGTON PACIFICAICALIFORNIA
RESORTS(PIERSIDE) File 2 of 8
Beginning& Ending dates of file: 8/84-9/91
Approx inches of pages in tile: 1 1/2"
MP 600.30 REDEVELOPMENT AGENCY MAIN-PIER
HUNTINGTON PACIFICAICALIFORNIA
RESORTS (PIERSIDE)File 3 of 8
Beginning&Ending dates of file: 4/88-9/91
Approx inches of pages in file: 1"
MP 600.30 REDEVELOPMENT AGENCY MAIN-PIER
CALIFORNIA RESORTSIHASEKO ASSOC.
AMENDMENT TO DDA/APPROVED 10089
File 4 of 8
Beginning& Ending dates of file: 7189-10191
Approx inches of pages In fie: 1 3/4"
MP 600.30 REDEVELOPMENT AGENCY Main-Pier
CALIFCRNIA RESORTS INTERNATIONAL,
INC-Negotiating Agrmt-Block 101
File 5 of 8
Beginning &Ending dates of file: 8/89-9191
Approx Inches of pages In file: 1/2"
MP 600.30 REDEVELOPMENT AGENCY-Main-Pier
First Amended Pierside Lease-Bloom
(Stanley M.)-Trasf city prop to
Agency-(Pierside Restaurant site)
Main/PGHIs/Pier
File 6 of 8
Beginning &Ending dates of file: 10/90-9/91
Approx inches of pages In file: 1 3/4"
�J
IERSIDE FILES as requested by Attorney Sangster in memo dated 1/15192
page 3
MP 600.30 REDEVELOPMENT AGENCY-Main-Pier
First Amended Pierside Lease-Bloom
(Stanley M.)-Trasf city prop to
Agency-(Pierside Restaurant site)
Main/PC:H/s/Pier
File 7 of 8
Beginning &Ending dates of rife: 3/91 -7/91
Approx Inches of pages In file: 2"
MP 600.30 REDEVELOPMENT AGENCY Main Pier
Appeal to California Coastal
Commission by Cook&Winchell
Pierside Q Main/PCHIsfPier
File 8 of 8
Beginning &Ending dates of file. 4/91 -7/91
Approx inches of pages In file: 314"
PI 410.20 CONCEPTUAL DEVELOPMENT PLAN
PIERSIDE RESTAURANTS
Beginning & Ending dates of file: 1185-2190
Approx inches of pages In file: 112-
CH 420.40 Pub Hear-Appeal PC Approval CUP
90-171CDP 90-181FEIR 90-2/GPC 90-8
Pierside-Alt Action#1 Apprvd-
Res 6260-Adptd-Redev Agency/Chodos
ocean side PCH btwn Main/1st St
Beginning & Ending dates of file: 11/90-7/91
Approx Inches of pages In file: 314"
Box 123 CUP 8643
COP 86-27
Pierside by HB Tomorrow
denied Appeal
Approved w/conditions&findings 10113/86
Beginning 8.Ending dates of file: 10/13186
Approx Inches of pages In file: 3/4"
PIERSIDS FILES as requested by Attorney Sangster in memo dated 1/15192
page 4
Resolution Index
Beginning & Ending dates of file: 10/85-7/91
Approx inches of pages in file: 118"
AGREEMENT INDEX-Counter
ALL ACTIVE FILES ON SHELF
Beginning & Ending dates of file:
Approx Inches of pages In file: 1 112"
Action Agendas 7/1192-present
Beginning&Ending dates of file:
Approx Inches of pages in file: 1"
126 REDEVELOPMENT AGENCY
Main-Pier Redev. Project Area
Surveys, EIR's Amendment No. 1
Beginning& Ending dates of file: 5/82- 1/89
Approx inches of pages In fi'e: 1 1/2"
126 Replacement Housing Plan
Main-Pier Redevelopment Project
Beginning &Ending dates of file:
Approx Inches of pages In file: 1/8"
126 MAIN PIER REDEV PROJECT
COUNCILIPLNG MEET 1-25-88
Beginning & Ending dates of file: 1/25/88
Approx Inches of pages In file: 1"
126 MAIN-PIER REDEVELOPMENT PROJECT
RES#129-3/86-EMINENT DOMAIN
Beginning&Ending dates of file: Deed 1932, 8/30/84-3/21/88
Approx Inches of pages in file: 3/4"
PIERSIDE FILES as requested by Attorney Sangster in memo dated 1/15192
page 5
126 REDEVELOPMENT AGENCY
DOWNTOWN VILLAGE CONCEPT PLAN
Beginning & Ending dates cf file: 4/25/88
Approx inches of pages In Me: 8 pages
126 REDEVELOPMENT AGENCY
Main-P'Ler Redevelopment Project Plan
Amendment#1
Beginning&Ending dates of file: 5/12183-5/15189
Approx inches of pages In file: 1"
126 REDEVELOPMENT AGENCY
Main-Pier Redevelopment Project Plan
Including Slides&Photographs of Blighted Area
Beginning & Ending dates of file: 5182-5183
Approx inches of pages in file: 1"
126 REDEVELOPMENT AGENCY
DRAFT EIR's FOR TALBERT-BEACH, OAKVIEW,YORKTOWN-LAKE&
MAIN-PIER REDEVELOPMENT PROJECT AREAS
oust document, no formal file)
Beginning & Ending dates o`file: 5120/82
Approx inches of pages In Ve: 118"
126 MAIN-PIER-Redevelopment
Project-Area&Sub Area
(Various Communications)
Beginning&Ending dates of file: 10/86-7/87
Approx Inches of pages In file: 1/2"
126 Main-Pier-Redevelopment Area
1/25/88 Meeting (Specific Plan-3D1 etc)
Beginning&Ending dates of file: 10/86-7187
Approx inches of pages in file: 1/2"
r
PIERSIDE_FILES as requested by Attorney Sangster in memo dated 1115192
page 6
126 REDEVELOPMENT-MAIN-PIER
GENERAL
Beginning&Ending dates of file: 9188-4190
Approx inches of pages In file: 1"
126 REDEVELOPMENT AGENCY
BIENNIAL PUBLIC HEARING ON 5
REDEVELOPMENT PROJECT ARl~AS-10/26/87
Beginning&Ending dates cf Tile: 10/26187
Approx inches of pages in Cie: 1 114"
d3at-:L-sv-tetk4Isbrasycbmem6.doc
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In CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
NUNTV40 N�IKN
To Michael T. Uberuaga From BarbaJ A. Kaiser
City Administrator Deputy City Administrator
Subject Pierside Restaurants & Date August 15, 1991
Subsequent Actions
As you requested, the following is a summary of the Pierside Restaurants project to date
and the intended actions of staff to address revitalization of this area south of the
Huntington Beach Pier.
November 6, 1990 The Planning Commission approved the Pierside Restaurants
entitlements including Environmental Impact Report 90-2,
Conditional Use Permit 90-17 and Coastal Development Permit
90-18.
March 18, 1991 The City Council denied the appeal of the abovementioned
entitlements and upheld the PIanning Commission's approval.
July 15, 1991 The City Council rejected the lease of property between the City
of Huntington Beach and the Redevelopment Agency; rejecting the
First Amended Pierside Lease between the Redevelopment Agency
and Stanley M. Bloom for the Pierside Restaurants Project; and
directed staff to prepare documents as necessary to terminate the
existing Pierside Lease and any related agreements with all
parties related to development of the site including Stanley M.
Bloom as successor—in—interest.
July 17, 1991 The California Coastal Commission determined that Appeal No.
A-5—HNB-91-312 raised no substantial issue as to conformity
with the certified Local Coastal Program for the City of
Huntington Beach. Therefore, the appeal of Pierside Restaurant
entitlements was denied, and the City Council's previous approval
stands.
In effect, this means that the Pierside Restaurants project has approved entitlements, but
no lease from the Agency to implement the project under those entitlements. The City
Council included action in their denial of the lease to direct staff to prepare documents to
terminate the existing Pierside Lease and all related agreements. Special Agency Counsel
and the City Attorney's office are preparing the termination notice to be issued to the
developer, after discussion of the Pierside Restaurants project in a closed session meeting
of the City Council scheduled for September 3, 1991. Any actions to be taken by the
developer are unknown at this time, however, a letter regarding the project was received
from Jeff Oderman (see attached).
r
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To address the revitalization of this area, staff has formed a committee including
Economic Development, Community Development, Public Works, and Community Services
to formulate an action plan. Currently underway are design efforts by Purkiss Rose for
south beach improvements, design of pier plaza by James Adams, and of course,
construction of the Huntington Beach Pier. It is staff's intent to develop a plan for City
Council consideration to integrate all of these efforts. Public participation will also be a
priority. Further information will follow regarding the action plan and time schedule.
BAK:ls
Attachment
xc: City Council Members
Department Heads
9400r
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RUTAN & TUCKER
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July 29, 1991 DAwDJ sA...ALw.RI
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1
Michael T. Uberuaga
City Administrator
CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON EACH
2000 Main Street ADMINISTRATIVE Oti10E
Huntington Beach, CA 92648
Re: Pierside Restaurant Project
Dear Mr. Uberuaga:
At Jonathan Chodos's request and on behalf of Stanley M.
Bloom, I am writing to request that we be notified how the
City of Huntington Beach ("City") and the Huntington Beach
Redevelopment Agency ("Agency") intend to proceed with the
Pierside project.
Mr. Bloom and Mr. Chodos were extremely disappointed
wherf the Agency voted (4-3) on July 15; 1991, to disapprove
the amended Pierside Lease that had been negotiated with the
Agency's support over a period of years. Two days later, on '
July 17, 1991, Mr. Bloom and Mr. Chodos were gratified when
the California Coastal Commission upheld the City Council's
March 18, 1991, approval of the development permits for the
project. As you know, the Coastal Commission determined at
that time that the project presented no "substantial issue"
of non-compliance with the California Coastal Act and
therefore that a full public hearing was not even necessary
to further review the project.
The Agency's refusal to approve the Pierside lease
amendment has placed Mr. Bloom in an impossible "Catch-22"
situation. He is fully prepared to comply with the develop-
ment approvals approved by the City and Coastal Commission,
'RUTAN & TUCKER �1
ATTORNEYS AT LAW
Michael T. Uberuaga
City Administrator
July 29, 1991
Page 2
but the Agency has refused to approve the necessary lease
amendment that would permit the project to proceed. What
would you have us do?
On behalf of Mr: Bloom and Mr. Chodos, I urge the Agency
to reconsider its July 15, 1991, action disapproving the
Pierside lease amendment.
I am told that the Agency included in its vote on
July 15th an instruction to staff to commence proceedings to
terminate the existing lease covering the Pierside project.
In my opinion, the Agency has no authority to terminate the
lease given the fact that the lessee is not in default, the
lessee is fully prepared to proceed, and the Agency itself is
guilty of a number of material defaults.
I will not attempt in this letter to set forth a
detailed chronology of the events of the past six years.
A brief summary may be helpful, however, to an understanding
of my clients' legal position and their frustration with the
seemingly never-ending series of trap-doors and land mines
that the City/Agency have placed in his path.
The City, Agency, and Mr. Bloom's company entered into a
Disposition and Development Agreement for development of the
Pierside project almost six years ago, on August 19, 1985.
The 1985 DDA was superseded by a lease executed by the Agency
on or about November 20, 1986. That lease remains in• effect
and -has never been terminated.
Performance under the 1986 lease has been delayed for a •.
number of reasons.
One significant reason for delay has been the City/
Agency delay in acquiring title to the leased premises in the
approved title condition. At the time the 1985 DDA and the
1986 lease were approved, the Agency represented that the
City was the owner of the premises. (Lease 4 1(b) .) In
fact, this was untrue. The Agency had filed an eminent
domain action (Orange county Superior Court Case No. 49-87-
13) approximately three months prior to execution of the 1986
lease to acquire fee title to a significant portion of the
premises from the Huntington Beach Company. The .Agency
agreed in the 1986 lease to acquire the City's fee interest
RUTAN & TUCKER
ATTORNEYS AT LAW
•..wTh[ww-C,uh.d...w[sf•ow►CO.MwnO..{
Michael T. Uberuaga
City Administrator
July 29, 1991
Page 3
in the premises prior to the commencement date of the lease.
(Id. , i 1(b) Exhibit C 3) The Agency failed to do so.
Notwithstanding that the eminent domain action was filed in
the name of the Agency, when title was finally acquired in
1990, title was inexplicably placed in the name of the City.
Notwithstanding that the Agency had several ronths (indeed,
years) prior to the Measure C election in November of 1990 to
perform its obligation under the lease to acquire the City's
fee interest in the premises, it sat idly by until after the
election only to now argue that it is prevented from doing
so. Notwithstanding that Measure C is clearly invalid or
inapplicable to the Pierside project (see ray December 7,
1990, letter to Bob Sangster on this subject) , the
City/Agency still officially take the position that Measure C
prevents the Agency from performing its contractual duties.
Notwithstanding that the City approved the 1985 DDA and the
1986 lease without any mention of Government Code Section
37351 and the fact that the Pierside project is not
"waterfront" under any reasonable definition of the term, the
City/Agency have belatedly (within the past few months) taken
the position for the first time that Pierside is indeed
"waterfront" and accordingly that the City lacks authority to
convey fee title to the property to the Agency (as required
under the 1986 lease to allow the Agency to ground lease the
premises to the lessee) without a four-fifths vote of the
Council (which we are now told cannot be obtained) . As a
result, we were told that we would have to take title as a
sublessee, rather than as a ground lessee, thereby
complicating the financing for the project. Finally, it was
not until approximately May of 1990, almost four years after
the 1986 lease was approved, that the City/Agency concluded
the eminent domain action filed to obtain title -to the
property.
Another significant reason for delay has been the
shifting position of the City/Agency with regard to the
development plan. In October of 1986, shortly prior to
approval of the 1986 lease, the City Council approved a
Conditional Use Permit and Coastal Development Permit for an
approximately 87,500 square foot specialty commercial center,
related support facilities, and a 696-space parking structure
on the leased premises. This is the project that the lessee
has the right to build under the 2986 lease. (Id. , S 6 and
Exhibit "D.") The California Coastal Commiss of n approved
RUTAN & TUCKER
ATTORNEYS AT L-AW
Michael T. Uberuaga
City Administrator
July 29, 1991
Page 4
this version of the project in April of 1987. Afterward,
however, and notwithstanding the lessee's right to proceed
with the approved project, "the City . decided to inprove
the property with a less intensive development . . . ."
(Declaration of former City Administrator Paul Cook dated
January 11, 1990, filed in Case No. 49-87-13. ) Based on the
City/Agency representations that they would fully cooperate
with the project developer in implementing a down scaled
project, Mr. Bloom and Mr. Chodos proceeded in good faith to
meet the City's/Agency's new requirements. At the City's
insistence, Mr. Bloom bought out his former partner,' Bryant
Morris, at a cost of several hundred thousand dollars.
Working closely with the Agency and City planners, the
project developer expended substantial additional time and
money to entirely redesign a much smaller project. Several
times during this period, the project developer was assured
by the City/Agency staff that no new or supplemental EIR
would be required. Then, just prior to the scheduling of
formal public hearings before the Planning Commission and
City Council to approve the revised plan, the City/Agency
planners reversed their position in early 1990 and informed
the project developer that a supplemental EIR would indeed be
required. This caused a several month delay in processing
the development application. Then, during the critical
months of August and September 1990, even after the supple-
mental EIR had been completed, the City staff was unprepared
to present the project to the Planning Commission, which
resulted in further delays and continuances. By the time the
staff finally was prepared to proceed, it was too late: the
election campaigns for Measure C and the City Council were in
full swing and the project approvals were stalled until after .
the election.
By late Summer of 1990, the terms of an amended lease
had been fully negotiated between the Agency staff (after
many closed session meetings with the Agency Board) and Mr.
Chodos. Nonetheless, after the November 1990 election (at
which Measure C was adopted) , the Agency insisted that Mr.
Chodos agree to a number of additional changes to both the
project design and the- financial terms of the lease. While
at this point extremely frustrated by the Agency's lack of
performance and good faith, in the interest of avoiding
controversy and salvaging a basis for proceeding with the
development, Mr. Bloom and Mr. Chodos ultimately agreed to
RUTAN & TUCKER
ATTORNEYS AT L.AW
Michael T. Uberuaga
City Administrator
July 29, 1991
Page 5
rake substantial additional concessions. Then, in late May
of 1991, without any prior warning and even after the amended
lease had been entirely renegotiated at the City/Agency's
insistence, the City/Agency staff advised us that the City
and Agency would not approve the amended lease unless Mr.
Bloom and Mr. Chodos agreed to waive any claims that Measure
C was invalid, agreed to abide by the results of a Measure C
election on the project, agreed to waive all of their legal
rights under the existing lease in the event the project were
turned down at the polls, and agreed to fund 50% of the cost
of the Measure C election proposed for the Pierside project,
all notwithstanding our very strongly held belief that
Measure C is invalid.
After all of the City/Agency's delays, reversals of
position, failures to perform, and lack of good faith over
the past several years, Mr. Bloom and Mr. Chodos were
incensed that the City/Agency would demand that they give up
all of their legal rights in exchange for the right to "roll
the dice" in what I have advised them is an illegal election
requirement. Nevertheless, in yet another compromise
gesture, just prior to the City/Agency action on July 15th,
Mr. Chodos wrote a letter offering to meet the City/Agency
half way on their demands relating to the Measure C election
and expressing a willingness to work out the timing and cost
of an election on a mutually acceptable basis. In the end,
the Agency rejected the amended lease anyway.
I trust that this matter will be discussed with both the
City Council/Agency and their attorneys. Mr. Bloom and Mr.
Chodos believe very strongly that their legal rights have
been violated, but they . desire to proceed ahead on a
constructive basis .- if that is possible. Once again, I
respectfully request that the City/Agency reconsider and
approve the amended Pierside lease. I further request that
you inform us what action the City/Agency intends to take
with regard to the project and what action you would like Mr.
Bloom and Mr. Chodos to take with regard to the project and
to irplement the lease, the approved final development
permits for the project, the Redevelopment Plan, and the
Downtown Specific Plan.
RUTAN & TUCKER
* ATTORNEYS AT LAAI
A.N TNCDSw WCwGwG PROMf100"L CO.ro/MAO.f
Michael T. Uberuaga
City Administrator
July 29, 1991
Page 6
I look forward to your reply.
Very truly yours,
R AN & TUCKER
f rey Oderman
JMO:j d
cc: Stanley M. Bloom
Jonathan P. Chodos, Esq.
Gail Hutton, Esq. , City Attorney
Thomas P. Clark, Jr. , Esq.
9/112/013376-0001/008
i
r
C1T'VF OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92548
OFFICE OF THE CITY CLERK
July 18, 1991
Jonathan P. Chodos
1559 South Sepulveda Boulevard
Los Angeles, CA 50025
Dear Mr. Chodos:
Enclosed is a Statement of Action of the City Council of the City of
Huntington Beach at its July 1S, 1991 meeting. Please call this office if
you have any questions at 536-5227.
Sincerely yours,
Connie Brockway, CMC
City Clerk
CB:me
1125K
lWephons'714-5-1"2Z7)
f'
CITY OF HUNTINGTON BEACH
2000 MAIN STREET .. CALIFORNIA 92648
OFFICE OF THE CITY CLERK
July 18, 1991
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. Fiftieth Street
Vernon, CA 90059
Dear Mr. Bloom:
Enclosed is a Statement of Action of the City Council of the City of
Huntington Beach at its July 15, 1991 meeting. Please call this office if you
have any questions at 536-5227.
Sincerely yours,
dz';n�
Connie Brockway, CMC
City Clerk
CB:me
112SK
(Tsfephonr 714-8365227) -
r
STATEMENT OF_THE_ACL4N OF—THE -CITY MNCIL
Council Chamber, Civic Center
Huntington Beach, California
Monday, July 15, 1991
A videotape recording of this meeting is
on file in the City Clerk's Office.
Mayor Mays called the regular meetings of the City Council and the
Redevelopment Agency of the City of Huntington Beach to order at 7 p.m.
ROLL CALL
PRESENT: MacAllister, Winchell , Green, Mays, Bannister, Silva, Erskine
ABSENT: None
(Cily Cguncil/Redevfljopment Agency) JOINT EURLIC_ HEARING_=JIRST _AMENDED
PIERSIDE LEASE AGREEMENT (PPIERSIDE RESTAURANTS) — REJECEED — EXISTING LEASE
TERMINATED — STANLEY BLOOM — MAIN—PIER REDEVELOPMENT PROJECT AREA— PACIFIC
COAST_HKY BTWHf IRST Z,_MAIN_STS (600.30)
The Mayor announced that this was the day and hour set for a public hearing to'
consider the leases of certain real property between the City and the
Redevelopment Agency and a sublease to Stanley Bloom in the form of a proposed
First Amended Pierside Lease Agreement for the project known as Pierside
Restaurants between the Agency and Stanley Bloom. The property is located
within the Main—Pier Redevelopment Project Area on the west side of Pacific
Coast Highway, between First and Main Streets. The proposed Agreement and
financial report required by California Health & Safety Code Section 33433 are
available for public inspection at the Office of the City Clerk.
The City Clerk presented Resolution No. 6225 for Council adoption — "A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE
PIER SIDE LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND THE REDEVELOPMENT
AGENCY."
The Clerk presented Resolution No. 207 for Agency adoption — "A RESOLUTION
OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE PIER
SIDE LEASE BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
AND THE CITY OF HUNTINGTON BEACH."
The City Clerk presented Resolution No. 6224 for Council adoption — "A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE
NONDISTURBANCE AND RECOGNITION AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH
AND STANLEY M. BLOOM."
The Clerk presented Resolution No. 206 for Council adoption — "A RESOLUTION
OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE
FIRST AMENDED PIER SIDE LEASE BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH AND STANLEY M. BLOOM."
' Page 2 - Statement o� fiction - 7/15/91 �•►�
Legal notice as provided to the City Clerk's Office by staff had been mailed,
published, and posted. No communications or written protests were received on
the matter.
The City Administrator reported on the alternative recommendations.
A straw motion was made by MacAllister, seconded by Silva., to open the public
hearing and continue the hearing until July 29, 1991 to allow consideration of
the Pierside Restaurants Project by the California Coastal Commission
scheduled for July 17, 1991 .
The City Clerk stated that the July 29, 1991 date would not allow adequate
time and that the election should be called by July 22, 1991 .
Councilmember MacAllister stated he would change the date in his motion to
July 22, 1991 .
Councilmember Kelly requested that the Principal of the development company
comment on any consequence of delaying the item to July 22, 1991 .
Jonathan Chodos, on behalf of himself and Stanley Bloom, stated that he would
prefer the matter of the lease between the city and developer be settled but
that if Council preferred to continue the whole item the developer would go
along with it.
In answer to Mayor Green's inquiry, Deputy City Attorney Sangster stated all
that is required for a special meeting cf Council is a quorum.
The straw motion made by MacAllister, seconded by Silva, to open the public
hearing and continue the hearing until July 29, 1991 to allow consideration of
the Pierside Restaurants Project by the California Coastal Commission
scheduled for July 17, 1991 FAILED by the following straw vote:
AYES: MacAllister, Silva, Robitaille,
NOES: Winchell , Green, Kelly. Moulton-Patterson
ABSENT: None
Barbara Kaiser. Deputy City Administrator/Economic Development, presented a
slide report on an overview of the project description, the lease between the
City and the Agency and the sublease between the Agency and Stanley Bloom, and
the staff recommendation.
Discussion was held between Council and staff on the economics of the project.
The Mayor declared the public hearing open.
Sally Alexander spoke in opposition to the Main-Pier Redevelopment Project.
She cautioned against the redefinition of the wetlands.
Chauncey Alexander spoke in opposition to the Main-Pier Redevelopment
Project. He stated the citizens had already demonstrated they were against
the project by their vote. He stated he believed the project would set a
precedent of building on the beach side of Pacific Coast Highway.
Page 3 - Statement o4ction - 7/15/91 �
JamesRigheimer, Huntington Beach/Fountain Valley Board of Realtors President,
spoke in support of the Main-Pier Redevelopment Project. He stated he
believed the project would be an asset to the pier and a positive addition.
Eileen Murphy spoke in opposition to the Main-Pier Redevelopment Project. She
stated she did not believe the people of Huntington Beach want to lease public
property and that the beach should be for the people.
Jonathan Shodos, stated the lease had been approved unanimously by Council in
1986 and that the present issue was an amendment to the lease. He stated the
project was greatly reduced. He stated the project had been approved since
November and that all appeals had been declined. He stated he wanted to draw
attention to his letter in the packet and urge Council to insert the terms in
his letter in favor of the terms reflected on Page 9 and Page 5 of Exhibit C.
He stated that if Council did not agree to his terms he would like time to
reflect on Council 's decision either to July 22 or 29.
Pebbie CoQk stated the item was not an amended lease; it was a new lease and a
new project. She stated she wanted to attempt to unscramble the economic
analysis of the Pierside Restaurant Development. She stated it was premature
to approve a new lease prior to the Coastal Commission action.
Qgnna Klein spoke in opposition to the Main-Pier Redevelopment Project and
requested that no building be permitted on the beach side of Pacific Coast
Highway.
Dianne Easterling stated she believed the lease was an economic nightmare.
She requested the Council to reject the whole project.
Lprgtta Wolfe spoke in opposition to the Main-Pier Redevelopment Project and
stated she did not believe the City of Huntington Beach should enter into a
developer's lease unless there was a financial advantage to the city.
Kav_Seranhine requested Council to reject the Pierside lease and approve
Alternate Recommendation No. 1 . She stated a class restaurant could be built
on the inland side of Pacific Coast Highway.
Richard-Barlow stated he believed the lease was valid and he explained the
latest change to the lease. He spoke in support of the Main-Pier
Redevelopment Project.
Jonathan WoQlf-WillJA stated he believed the Pierside restaurant was
inappropriate use of the beach side of the property. He stated the funds
should be used to pay the fire fighters.
NatalieK h spoke in support of the Main-Pier Redevelopment Project and
stated the city needed to be visionary. She stated there was no building on
the sand or beach and that the only building was on the parking lot.
There being no one present to speak further on the matter and there being no
further protests filed, either oral or written, the hearing was closed by the
Mayor.
Page 4 - Statement o4—Action - 7/15/91
Following discussion, a motion was made by Winchell , seconded by
Moulton-Patterson, to reject the lease of property between the City of
Huntington Beach and the Redevelopment Agency; reject the First Amended
Pierside Lease between the Redevelopment Agency and Stanley M. Bloom for the
Pierside Restaurants Project; and direct staff to prepare documents as
necessary to terminate the existing Pierside Lease and any related agreements
with all parties related to development of the site including Stanley M. Bloom
as successor-in-interest. The motion carried by the following roll call vote:
AYES: MacAllister, Winchell , Silva, Green, Kelly, Robitaille.
Moulton-Patterson
HOES: None
ABSENT: None
kikkkiii#rkkikkkkiikikiikkkkikkkikkkkkkiikkkiikkkikkkkkkkkkikkikkikikikikkiiiikik
Mayor Mays adjourned the adjourned regular meeting of the City Council and the
adjourned regular meeting of the Redevelopment Agency of the City of
Huntington Beach to 5:30 p.m. , July 29, 1991 , to Room B-8, Civic Center.
ATTEST: Connie Brockway
City Clerk and ex-officio Clerk
of the City Council of the City
of Huntington Beach, California
Cgnni g Rrockway _
City Clerk
STATE OF CALIFORNIA ) Peter Green
County of Orange ) Mayor
City of Huntington Beach)
I, CONNIE BROCKWAY, the duly elected and qualified City Clerk of the
City of Huntington Beach, California, do hereby certify that the above and
foregoing is a true and correct Statement of Action of the City Council of
said City at their regular meeting held on the 15th day of July 1991 .
WITNESS my hand and seal of the said City of Huntington Beach this
the 17th day of July 1991 .
Connie Brockway_;�,"
City Clerk and ex-off160-Clerk
of the City Counciif_the City
of Huntington Beach.,-California
Deputy
-Al,/r�7/f /O/1 f�' Qetf.4
rr ar rSv�e'
July 159 1991 Clgrik 1 ,�n ��
The Honorable Peter Green, Mayor
and Members of the City Council
City of Huntington Beach -1
2000 Main St. i l t 1^
Huntington Beach, CA 92648 in 40 044��
Subject: Amendment to Pierside Lease
Dear Mayor Green:
As you know, the Chamber has boon in support of the Pierside
Project from its inception. Over the years , we have followed
its progress with great interest . Recently, when the current
reduced scale project came before the Planning Commission and
City Council , we appeared and reaffirmed our support for the
Project.
Ke continue to stand by that support and encourage you to proceed
kith the necessary steps to ensure its completion . We remain
convinced that this project will play a pivotal role in the
successful implementation of the Downtown redevelopment plan .
Sincerely,
o ce Ridd 1
President
JR:mmd
cc: Mika Uberuaga, City Administrator
Barbara Kaiser, Deputy City Administrator/Economic Development
22 13 Main Street,Suite 32
Hinlinpton Beach CA 92648
714/536-8888
(FAX)714/960.7654
fit City of Huntington Beach
t P.O. SOX 1M CALIFORNIA$2648
s
Foam 7beD=k Of Sirb"A.JCA&er
Deputy CtyAdm4-istmtor
Dumor ofEbwomk Demlopmenr
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REQUP-ST FOR CITY COUPS11: L/ _
REDEVELOPMENT AGENCY A6'` ION
RE 9I-12
Gate July 15, 1991
Honorable Mayor/Chairman & City Council/Redevelopment Agency Members
Submiried to: r
Michael T. Uberuaga, City Administrator/Chief Executive Officer l
Submitted by: ��
Barbara A. Kaiser, Deputy City Administrator/Economic Development,&"
Prepared by: LEASING OF CITY PROPERTY (PIERSIDE RESTAURANTS LEASE SITE) TO
THE REDEVELOPMENT AGENCY AND FIRST AMENDED PIERSIDE LEASE
Subject: AGENCY do STANLEY M. BLOOM FOR PIERSIDE RESTAURANTS
PROJECT—MAIN—PIER PROJECT AREA C-
Consistent with Council Policy? K Yes [ ] New Policy or Exception
U n
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: -
STAIMENT OF ISSUE:
At the direction of the Redevelopment Agency, staff has been negotiating an amended;
Pierside Lease for the proposed Pierside Restaurants project. The proposed lease
outlines the terms of a ground lease by the Redevelopment Agency to the developer,
allowing for the development of restaurants, plazas, public accessways, and parking
facilities. Leasing of the site from the City to the Agency is required to complete the
transaction and if approved, is contingent upon an affirmative vote of the people.
In addition, on or about August 19, 1985, a Disposition and Development Agreement was
entered into for the development of the site located at Pacific Coast Highway and ]Main
Street which agreement was modified on or about February 18, 1986. On or about
November 20, 1986, the Pierside Lease was executed. On February 20, 1990, the
Agency approved a conceptual plan for development of the "Pierside Restaurants"
(Attachment 1).
A First Amended Pierside Lease for the development of 48,522 square feet of restaurant
and beach related retail uses with 611 parking spaces is proposed. The Planning
Commission approved Environmental Impact Report 90-2, Conditional Use Permit
90-17, and Coastal Development Permit 90-18 at its meeting of November 6, 1990. On
March 18, 1991 the City Council denied the appeal of the above mentioned entitlements
and thereby upheld the Planning Commission's approval of said entitlements.
The First Amended Pierside Lease includes a section requiring the developer to pay for
50% of the election costs required due to the lease of City owned property to the
Agency (Measure C requirement). Staff also proposes that a section be added to the
Lease that requires that if the election is determined to be invalid, or if the majority of
the electorate who participate in the vote fail to approve the Lease, the Council/
Agency approval is null and void and the Lease is automatically terminated. In addition,
If the Lease is terminated, the developer waives any right to assert any claim or cause
of action against the City/Agency.
These sections are =t acceptable to the developer and therefore the proposed Lease is
not executed by the developer. Staff is recommending that the developer be given until
July 22, 1991 (5:00 Phi) to execute the Lease or the Agency will not execute the Lease.
Furthermore, staff will recommend that the election not be conducted and that staff be
directed to take actions to terminate all related agreements.
i�
P10 4/84
REC9MMENDATI
1) Conduct a public hearing.
2) Approve City Resolution No. f= and Agency Resolution No. 2I (Attachment 2)
authorizing the execution of a lease of property between the City of Huntington
Beach and The Redevelopment Agency of the City of Huntington Beach, contingent
upon execution of the First Amended Pierside Lease and an affirmative vote of the
people.
3) Approve City CourciI Resolution No. §Z24 and Redevelopment Agency Resolution
No. 2DL (Attachment 3) authorizing the execution of the First Amended Pierside
Lease between the Redevelopment Agency and Stanley M. Bloom for the Pierside
Restaurants Project, contingent upon (a) modification to include provisions for
binding determination of election results and waiver of claims (see page 9),
(b) signature by the developer of the lease by July 22, 1991, and (c) an affirmative
vote of the people.
(Note: 1f the Lease is not executed by the developer by July 22, 1991, staff will
recommend that the Council take action on July 29, 1991 to rescind conducting the
election on November 5, 1991).
4) Approve the appropriation of a maximum of$ 3.75 million, sufficient to implement
the project as defined in the First Amended Pierside Lease,
5) And, authorize the Mayor/Chairman, City Administrator/Executive Director, City
Attorney and City Clerk to finalize and execute all documents to conclude the
transaction as required.
Alternative Recommen atilt
1) Reject the lease of property between the City of Huntington Beach and the
Redevelopment Agency; reject the First Amended Pierside Lease between the
Redevelopment Agency and Stanley M. Bloom for the Pierside Restaurants Project;
and direct staff to prepare documents as necessary to terminate the existing
Pierside Lease and any related agreements with all parties related to development
of the site including Stanley M. Bloom as successor-in-interest.
2) Approve City Resolution No. 6225 and Agency Resolution No. 207 authorizing the
execution of a lease of property between the City of Huntington Beach and the
Redevelopment Agency, contingent upon an affirmative vote of the people; approve
the First Amended Pierside Lease in concept only and defer action on the Lease
until after the election is held on November 5, 1991. (Note: This recommendation
requires the City to bear the full costs of administering and conducting the
election).
3) Defer action on the Lease of property between the City of Huntington Beach and
the Redevelopment Agency; defer action on the First Amended Pierside Lease; and
allow the developer to initiate a challenge within 90 days to the validity of Measure
C as it applies to the Pierside Restaurants Project at his own expense.
4) Open public hearing and continue hearing until July 29, 1991 (or prior to) to allow
consideration of the Pierside Restaurants Project by the California Coastal
Commission scheduled for July 17, 1991.
-2-
.J
ANALYST
lease3cmeo City nAgency for City o-wned-Property (Attachment 4)-
Development of tte 3.5 acre site located on the ocean side of Pacific Coast
Highway, bounded by the existing Beach Service Road, Municipal Pier and First
Street (Site Map, Attachment 5), requires the leasing of the site from the City to
the Agency. Lease negotiations have been concluded with the developer, Stanley
M. Bloom. A copy of the Lease was filed with the City Clerk in anticipation of the
public hearing.
Under the proposed lease between the City and the Agency, the Agency is required
to lease the subject parcel from the City of Huntington Beach at a lease rate based
on the current fair market value at the highest and best use allowed by the zoning
codes and General Plan of the City, as well as the Downtown Specific Plan District
10. The value of this property is $5.29 million. The Agency will lease the property,
bearing interest at 10% per annum and will make payments to the city.
The City Attorney has stated that Measure C, as passed last November, "probably"
applies to the Pierside property in question (Legal Opinion, Attachment 6).
Therefore, in order to lease the Pierside property to the Redevelopment Agency
(who in turn will lease the property to Stanley M. Bloom), Measure C requires a
majority of votes approving the leasing of said site by both the City Council and the
electorate.
If the lease between the City and Agency is approved by the City Council and
subject to execution of the First Amended Pierside Lease by the developer, staff
will then recommend the City Council approve an ordinance calling for a special
election to be held on November 5, 1991 for a public vote on the leasing of this
project site.
First Amended Pierside,Lgase between the Agency and Stanley M. Bloom (Attachment 7) -
Project Description
The proposed Pierside Lease between the Agency and Stanley M. Bloom provides for the
development of a multi-level restaurant project located within the footprint of the
asphalt parking lot, comststing of 3.5 acres of land immediately south of the Huntington
Beach Pier, on the ocear.side of Pacific Coast Highway. Currently, the site is improved
with a 17,800 square foot commercial structure with miscellaneous retail on the first
level, "Maxwell's" restaurant on the second level, a freestanding structure containing
"Dwight's" concession stand, and a public parking Iot with 239 spaces.
The proposed development for the site is a 48,522 square foot restaurant complex
contained within three separate buildings. The restaurants will be built with 611
structured parking spaces including up to 250 subterranean public parking spaces. Public
access to the beach will be provided by two central staircases, two smaller stairways
and three handicapped accessible elevators for a total of seven accessways leading to
the beach. The proposed project will also provide two major public plazas on the upper
level and a series of plazas and promenades on the lower level (78,258 square feet or
48% of net site area). As proposed, relocation of Maxwell's Restaurant to the south on
the site will allow for the development of Pier Plaza, a project proposed by the City to
complete the new pier development.
-3-
Propmd i o-herside_Lease
As directed by the Agency, staff prepared a section of the Pierside Lease to address the
Issues of binding determination of election results and waiver of claims (see page 9). In
summary, this section includes the following:
Binding Determination gf Election Results —
a) If the election is determined to be invalid (e.g. developer challenges Measure
C), then the Council/Agency approval is null and void and the lease is
automatically terminated.
b) If the lease is terminated, the developer waives any right to assert any claim
or cause of action against the City/Agency.
This section, in addition to sharing the costs of the election, is not acceptable to the
developer and the Pierside Lease has not been executed by the developer for these
reasons. Staff recommends that this section be added to the Pierside Lease for
signature by the developer by August 2, 1991 and prior to the execution of the Pierside
Lease by the Agency.
Age+ Oblige (Summary, Attachment 8)
The Agency responsibilities can be summarized as follows:
1) The Agency is obligated to lease the subject site from the City of Huntington Beach
contingent upon an affirmative vote of the people, for a term of 55 years. The
Agency must Iease the subject parcel from the City at a lease rate based on the
current fair market value at the highest and best use allowed by zoning codes. The
value of this lease is $S.29 million. The Agency will make payments to the City
until such time as the $5.29 million plats interest accrued at 10% is received.
Payments to the City on this loan will replace current general fund receipts from
Maxwell's rent payment (approximately $330,000 annually) and receipts from the
public parking spaces (approximately $110,000 annually). Agency payments to the
City total $83.4 million, with a present value of $5.29 million over the 55 year term
of the lease.
2) The Agency is obligated to prepare the site in a reasonable time period free and
clear of all recorded encumbrances for development. In order to prepare the site
for the proposed development, the Agency has agreed to allocate a maximum of
$1.0 million upfront for various costs including relocation of existing tenants,
potential legal expenses (maximum $50,000), potential toxic clean—up costs
(maximum $50,000) and providing adequate utilities available to the site.
3) The Agency is obligated to reimburse the developer the total construction cost of
up to 250 public parking spaces being built to replace the existing 239 public beach
parking spaces plus an additional 11 new spaces. In addition, the Agency would
finance the difference in construction costs between the structured parking and
surface parking for the remaining 361 parking spaces.
The Agency parking costs consist of two components:
—4—
a. An upfront payment of$4.0 million to cover the total construction cost for the
250 replacement public parking spaces less $1.25 million credit against the cost
of constructing the public parking spaces. This payment will be further
reduced by $14,500 for each space not built if a parking management plan is
approved reducing the total number of parking spaces required.
b. A rent credit to the developer equivalent to 120 quarterly payments of
$108,875, (with 11%u interest on the outstanding balance) to amortize the
difference in construction costs between structured parking and surface
parking for the 361 spaces serving the private development. The rationale for
this payment is that in a typical ground lease where the lessor is receiving
2.00% to 3.75% of gross sales as rent, the lessor has provided enough land to
allow for the building improvements and surface parking. In the proposed
Lease Agreement, the Agency has not provided enough land to develop a
sufficient amount of surface parking and, thus, must make up the difference in
parking costs to justify the lease terms. These parking payments total nearly
$13.07 million, with a present value of $3.96 million over the SS year term of
the Lease. The Agency may also prepay this cost at the Agency's option in
order to reduce the total cost.
Developer-Obligations (Summary, Attachment 9)
The developer's responsibilities are as follows:
1) The developer will ground lease the site from the Agency for a term of 55 years
with the Agency's I 've right to extend the Lease Agreement for an additional
25 years.
The Pierside Lease Agreement is structured so that the amount of ground rent paid
is directly related to the project's performance. The ground rent schedule is as
follows:
Percent of Total Sales
Gross Restaurant Sales Applied go Ground Lease
Less than$30 million 2.00%
Less than$40 million 2.50%
Less than $50 million 3.00%
Less than $65 million 3.50%
$65 million and above 3.75%
During the first five years, the maximum applicable percentage rent is 2.00%.
Thereafter, in no event can the percentage of gross sales applied to the ground
lease payment decrease from year to year. In addition, over the term of the
lease, provisions are made to reevaluate the base rent to a higher percentage.
Currently, the City is receiving net parking revenues after expenses of
$110,000 from the site annually. As compensation for foregoing this annual
revenue, the developer will provide the Agency with a $1.25 million credit
against the cost of constructing the public parking spaces.
—5—
Over the lease term of 55 years, the Agency's economic consultant, Keyser
Marston Associates (KMA), has estimated that the lease will generate nearly
$267.8 million in total revenues (present value of $11.00 million). Since the
property will revert to the Agency at the termination of the lease, this
includes the reversionary value projected at nearly $123.5 million (present
value of $653,000).
2) The developer is obligated to finance all offsite improvement costs except as
indicated above under Agency obligations.
3) The developer is obligated to construct a 49,522 square foot restaurant
complex contained within three restaurant structures consisting of
accommodations for the relocation of the existing MaxweIl's Restaurant
(15,000 sq. ft.); the development of two new restaurant buildings (25,000 total
sq. ft.); development of casual restaurant space including Dwight's (9,522 sq.
ft.); and development of up to 250 public beach parking spaces and 361 private
restaurant spaces (611 total).
4) The developer is obligated to provide increased public beach access from the
project through the development of public plaza and promenade space, new
stairways and three elevators.
5) At the City/Agency's excluslye optio , the developer is obligated to provide
grading, foundations, paving surfaces, retainer walls and stairways sufficient to
meet code requirements for the "Pier Plaza Area" up to a value to the
City/Agency of $300,000. In exchange, the developer is entitled to a right of
first refusal on the ownership and operation of any for profit commercial
enterprises ultimately allowed in the Pier Plaza area.
6) Developer will be responsible for sharing in the costs of the public election to
be held November 5,1991 up to 500% of the total arnount, estimated to be
$50,000 (currently not acceptable to developer).
Project fi^ nancina
The Agency costs and revenues for the Pierside Restaurants project can be summarized
as follows on page 10. Costs to the Agency total $101.1 million(present value of$14.3
million) with revenues of $267.8 million (present value of $11.0 million). Immediate
Agency costs total $3.75 million for construction of the public parking spaces and other
site preparation costs.
Benefits io City
The Pierside Lease was negotiated on the premise that the City's general fund must
continue to receive its current revenue (increasing with inflation) from the public beach
parking spaces and Maxwell's ground lease. This amounts to approximately $440,000
annually. The Agency is obligated to repay the value of the leasehold interest of $5.29
million using tax increment resources and ground lease payments. If the project does
well, an accelerated payment plan to the City will be implemented. Typically,
repayment of the Agency loan would not occur until later in the redevelopment process.
A KMA analysis was also completed comparing the City's current revenue stream to the
projected revenue stream for the proposed Pierside Restaurant project (see page 11). It
concluded that the City would receive over $2.1 million more in present value terms
than is expected from the existing conditions scenario (total of $148.9 million new
revenues vs. $97.5 million in current revenues).
—6—
BaCkgrolm
The history of the original Pierside development plan, commonly known as Pierside
Village dates as far back as 1984 and consisted of construction of an 87,500 square foot
specialty/retail center, with a gross leaseable area of a minimum of 75,000 square feet
(excluding Maxwell's). In addition, a multiple-tiered parking structure with not less
than 600 spaces was to be developed.
The following is a chronological outline of the actions taken with regard to the
entitlements and lease for the original Pierside Village Project.
September_ 16, 1986 - The Planning Commission approved Pierside Village
entitlements Conditional Use Permit 86-43 and Conditional Development Permit
86-27 with conditions.
- The City Councl VRedevelop men t Agency approved the First
Amended Disposition and Development Agreement and Pierside Lease between
Huntington Pacifica I/Pierside Development and the Huntington Beach
Redevelopment Agency.
Qr,tober 13. 1986 -The City Council approved the Pierside Village entitlements on
appeal.
April - 4 1987 - The California Coastal Commission reviewed the Pierside
Village entitlements on appeal and approved the project with modified conditions.
Through 1987, planning efforts continued and a change of direction began to emerge
with respect to downtown redevelopment efforts. The 3/D1 Plan previously
approved in concept began to evolve into what has become the "village concept."
This changing direction was finalized in March of 1989, with conceptual approval by
the Agency of the Pierside Pavilion entertainment complex in lieu of the previously
proposed hotel, and Agency approval of the "village concept" in April of 1989.
With this shift in direction, the Agency, staff and the developer began to re-think
the need for a special ty/re tall center as previously envisioned. Throughout this
period of time, the economics of this project were continually evaluated.
Ultimately, a point was reached where the viability not only from a land use but an
economic standpoint concluded that the Pierside Village concept should be modified
to achieve a more desirable land use with regard to public amenities (eg. increased
beach accessability, open plaza and promenades). Thus, the Agency decided to
proceed with a "chaster of restaurants" rather than to attempt a specialty/retail
center that would be in direct competition with the revitalized Main Street retail
core.
Following this new direction the Council/Agency took the following actions:
January 17. 1989 - The City Council/Redevelopment Agency directed staff to
prepare an amended Pierside Village plan utilizing the "cluster of restaurants"
concept eliminating all other specialty uses.
September 18. 1989 - The City Council adopted a "Pier Plaza" concept that called
for the development of a 2.1 acre "Pier Plaza" to be located between the base of
the Pier and Pacific Coast Highway. This concept required Maxwell's to be
relocated in order to provide the proposed 2.1 acre "Pier Plaza" footprint.
—7—
ftbruary 20, 1990 - The Redevelopment Agency approved the conceptual plan for
the development of the "Pierside Restaurants" which includes:
o The development of two new restaurant buildings - (25,000 S.F.);
o Accommodations for the relocation of the existing Maxwell's Restaurant Into a
new restaurant - (15,000 sq. ft.);
o The development of a parking structure, including surface and subsurface
parking for both beachgoers and restaurant patrons;
o The development of beach-related concessions, including approximately 8,000
sq. ft. of casual dining space;
o Authorize staff and the developer of Pierside to negotiate for the relocation
and integration of Maxwell's into the Pierside plan; and
o Authorize staff to negotiate an amended Pierside Lease
with Stanley M. Bloom.
The developer submitted his plans for entitlements in April of 1990. Subsequently,
It was determined that Environmental Impact Report (EIR 90-2) would need to be
conducted as a supplemental EIR to EIR 82-2.
November 6. 1290 - The Planning Commission approved the Pierside Restaurants
entitlements including Environmental Impact Report 90-2, Conditional Use Permit
90-17, and Coastal Development Permit 90-18.
March 19. 1991 - The City Council denied the appeal of the above mentioned
entitlements and upheld the Planning Commission's approval. Council/Agency deferred
actions relating to the First Amended Pierside Lease for further clarification of the
impacts of Measure C on the project and the transfer of city owned property to the
Agency.
&ril 15. 1991 - The City Council/Agency deferred actions relating to the First
Amended Pierside Lease for additional clarification of the impacts of Measure C on the
project.
,UNDING SOURCE;
The Agency will provide $3.75 million for project costs as obligated tinder the Pierside
Lease from repayment of loans due to the Agency under other agreements.
A-UACNMENTS:
1) Staff Report of February 20, 1990, Approval of Conceptual Plan
2) City Council & Agency Resolution Nos. MS & 201
3) ' City Council & Agency Resolution Nos. 6224 & 22
4) Lease between City and Agency for City-Owned Property
5) Site Map (PIaza Level & Beach Access Level)
6) City Attorney Legal Opinion
7) First Amended Pierside Restaurants Lease
8) Summary of Agency Obligations
9) Summary of Developer Obligations
10) Summary Report 33433
MTU/BAK/KBB:jar
8614r
-g_
NEW LANGUAGE
FOR PIERSIDE LEASE
(To be inserted in Exhibit "C"
as paragraph 6 and re-number
current paragraphs 6 and 9)
6. Binding Determination_of,Election Results: Waiver-of Claims
LESSOR and LESSEE agree and acknowledge that this Lease and the approval of this
Lease by the LESSOR is subject to the contingency of an affirmative vote of the
citizens at the Election as defined in Paragraph S above. In the event that for any
reason the Election is determined to be invalid or otherwise inapplicable to this
Lease, then the LESSOR`s approval, which is contingent upon such vote, is null and
void and the Lease shall automatically terminate. Further, in the event that the
Election is conducted and it results in a majority of the electorate, who participate
in the vote, failing to support and approve the Lease, such failure to obtain approval
from the electorate would also result in the automatic termination of this Lease as
the LESSOR's approval would become null and void. Notwithstanding anything to the
contrary in this Lease, LESSEE hereby agrees that, in the event of termination of
the Lease pursuant to this Section, he hereby waives, relinquishes and is barred from
asserting any potential claim or cause of action arising out of the negotiation or
termination of this Lease as against the City of Huntington Beach, the
Redevelopment Agency of the City of Huntington Beach, or any of their respective
members, agents or employees.
-9-
TA8L E 1
ESTIMATED NEI AGENCY COSTS
PIEASIDE RESTAURANT COMPLEX LEASE ACRHmFNT
kUNTINGTON BEACH, CAI IFORNIA
fOrAl. PRESENT
DOILAR.S VALUE
AGENCY COSTS
SITE PREPARATION S1,000,000 $1,000,000
PARKING COSrS
UPFRONT COSTS (RIA-LACEMINI SPACES) S4,000,000 %4,000,000
ArORIIZFD COSTS %13,065,000 ST,759,000
IAND PAYWRI 10 CITY S83,038,000 S',,194,000
TOTAL AGENCY COSTS $101.103,000 S14,253,000
AGENCY REVENUES
GROUND LEASE PAYMENIS 5139,227,000 S8,003,000
REVERSIONARY VALIIF Of LANs $123,479,000 1653,000
UPFRONT PARKING PArrERr S1,250,000 51,250,000
IAK INCREMENT S3,882,000 S1,088,000
TOIAL AGENCY REVENUE 5267,838,000 $10,994,000
a wwciccawwwsp ewwws�pps�cC
NET AGENCY REVENUES /.(COSTS) S1TSb,735,000 (53,259,000)
-10-
COMPARISON OF ESTIMATED CITY REVENUE STREAMS
PIERSIDE RESTAURANT COMPLEX
HUNTINGTON BEACH, CALIFORNIA ➢ROJECIED ESTIMATED
TOpvJ� TOTAcCIIS-RM
CITY CITY
REVENUES (1) REVENUES (2) DIFFERE14CE
YEAR
1 500,000 (497,606) 997.606
2 500,000 510.073 (10,074)
3 500,000 529.049 (29,049)
4 239,967 553,358 (313.391)
5 303,757 578,638 (274.881)
6 333,272 604,928 (271.656)
7 363,967 632,269 (268,302)
8 395,888 660,703 (264,815)
9 429,085 690,273 (261,187)
10 463,609 721,024 (257,415)
11 654,832 753,004 (98,172)
12 698,393 786,262 (87.879)
13 743,675 820,850 (77.174)
14 790,778 856,819 (66,041)
15 839,763 894,226 (54,463)
16 890,706 933,128 (42.422)
17 943,6E6 973,585 (29,898)
13 1,203,173 (3,497,342) 4,700.515
17 1,268,649 1,059,413 209.235
20 1,336,742 1,104,917 231,825
21 1,407,558 1,152,240 255.318
22 1,481,204 1,201,454 279.750
23 1.557,795 1,252,635 305.160
214 1,896.066 1,305,662 590.204
25 1.989,248 1,361,216 628,032
2S 2,086,156 1,418,783 667,374
27 2,186,939 1,478,651 708.298
23 2,291.752 1,540,912 750,840
29 2,436,249 1,605,662 830.588
3) 2.713,937 1,672,999 1,040,938
31 2,539,100 1,743,029 1,096.071
3? 3,404,754 1,815,858 1,588,895
31 3,541,107 1,891,599 1,649,509
3i 3,691,453 1,970,367 1,721.087
3S 3,957,206 2,C52,284 1,804,923
35 4,039,924 2,137,475 1,902.449
37 4,241,319 2,226.073 2,015.246
33 4,463,277 2,318,212 2,145,065
39 4,707,872 2.414,034 2,293,638
43 4,977,388 2.513.688 2.453,700
41 5,274,337 2,617,325 2,657,012
42 5,601,483 2,725,106 2,876,377
43 5,961,866 2,837,196 3,124,671
44 6,358,835 2,953,767 3,405,068
45 6,796,069 3,074,998 3,721,071
45 7,277,621 3,201,077 4,076,544
47 7,807,948 3,332,196 4,475,752
42 4,484,379 3,468,557 1,015,622
49 3,551.689 3,610,370 (58,681)
57 3,608,030 3,757,854 (149,623)
51 3,666,601 3,911,234 (244,633)
52 3,727,491 4,070,746 (343,256)
53 3.790,791 4,236,636 (445,845)
54 3,856,598 4,409,160 (552,561)
55 3,925,012 4,588,581 (663,569)
PRESENT VALUE OF CITY REVENUES 8,579,000 6,453,000 2,126,000
TOTAL NOMINAL DOLLARS 148,899,000 97,535,000 51,364,000
(1) BASED ON NEW DOA.
(2) BASED ON CURRENT REVENUES d MAr.ELL'S L DWIGHT'S LEASE.
-11-
Page 5 - Council/ ency Agenda - 7/15/91 � (5)
2. Approve Gengral PjAn endment N by adopting
Rg!golUtion No, f3Q5 - "A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF HUNTINGTON BEACH, ADOPTING LAND
USE ELEMENT AMENDMENT NO. 90-9 TO THE GENERAL PLAN."
02 A14PP49veal 5-7 CGv�ncJ�c/J� rlto4144,•)O.chi n • no)
3 . Approve Zone Chance No. 90-19 with findings as set
forth in Attachment I of the RCA dated July 15, 1991.
After reading by title approve introduction of
Qr-dinance Nam 3120 - "AN ORDINANCE OF THE CITY OF
HUNTINGTON BEACH AMENDING SECTION 9061 OF THE HUNTINGTON
BEACH ORDINANCE CODE TO PROVIDE FOR CHANGE OF ZONING ON
REAL PROPERTY GENERALLY LOCATED ON 1.96 NET ACRES AT THE
SOUTHEAST CORNER OF THE INTERSECTION OF BUSHARD STREET
AND GARFIELD AVENUE FROM LOW DENSITY RESIDENTIAL,
FLOODPLAIN, TO A COMBINATION OF COMMUNITY BUSINESS,
FLOODPLAIN AND MEDIUM DENSITY RESIDENTIAL, FLOODPLAIN.
(ZONE CHANGE NO. 90-19) . "
Alor'o v ed 2c»c Ma15m. 40.
�d
.5 f /k.�.r - .,, -1�0
D-2. 1Ci-ty_Counci 1) PUBLIC HEARING - A_NNUAL�tEVIEW_OF.U88
WATERFEQNT DEVELQEMNT ACREEMNT - ROBERI MAYER CORP. - N/S
600.30 PACIFIC COAST HWY BTWN MUrrINGTON ST/BEACIL_BLVD
Public rearing to consider the following:
APELICAP(I: Robert Mayer Corp./City of Huntington Beach
LOC TIMI: Northside of Pacific Coast Highway between
Huntington Street and Beach Boulevard.
REOUEST: Annual review of developer's compliance with the
Waterfront Development Agreement pursuant to Section 2 of the
agreement.
ENVIRONMENTAL STATUS: Categorically exempt pursuant to
Section 15301, Class 1 of the CEQA.
A TAL TA Not applicable
RECOMMENDED_ACTION: Approve the Annual Review of the
Waterfront Development Agreement and deem the developer,
Robert L. Mayer, in substantial compliance with the terms
and conditions of the Agreement.
40*40 re vc / 7�0
�f
Page 6 - Council/Agency Agenda - 7/15/91 (6)
D-3. n v
FIRST AMENDED_,,.0 RUJU LEASE-ACRES NJ _(RIEIRSIDE RE —A NT51
600.30 -- STANLEy BLOOM --_ MAIN-RJERR �1EVELOPMENT_UOJECT AREA -
AAQJFIC _COAST. HWY BTWN FIRS;!f K&IN STS
Public hearing to consider the leases of certain real property
between the City and the Redevelopment Agency and a sublease
to Stanley Bloom in the form of a proposed First Amended
Pierside Lease Agreement for the project known as Pierside
Restaurants between the Agency and Staniey 'Bloom. The
property is located within the Main-Pier Redevelopment Project
Area on •the west side of Pacific Coast Highway, between First
and Main Streets. The proposed Agreement and financial report
required by .California Health & Safety Code Section 33433 are
available for public inspection at the Office of the City
Clerk.
ECOt�fMENDED_ACTIQN:
Reject the lease of property between the City of Huntington Beach and the
Redevelopment Agency; reject the First Amended Pierside Lease between the
Redevelopment Agency and Stanley M. Bloom for the Pierside Restaurants
Project; and direct staff to prepare documents as necessary to terminate the
existing Pierside Lease and any related agreements with all parties related to
development of the site including Stanley M. Bloom as successor-in-interest.
• �T�T�C�'i7�Jl�I✓� ��O/�lM�.n�� /4�?17� r'�` I�Gi/c�
✓� /QaL6i 74X;//c, —/70)
Ji #� CITY OF HUNTINGTON BEACH
e INTER-DEPARTMENT COMMUNICATION
"UHTM1GILm iIACM
To Honorable Peter Green, Mayor From Gail Hutton
and Members of the City Council City Attorney
SUtlect Pierside Property - Date April 3, 1991
Vote Required for a Lease
ItZTRODUCT I ON:
On November 13, 1990, we advAsed that a four-fifths vote might
be required for a conveyance of pierside property from the city
to the Redevelopment Agency, since the property is arguably
"water front." Sove ment Code S 37351 reads as follows:
"The legislative body may purchase, lease, exchange, or
receive Such personal property and real estate situated
inside or outside the city limits as is necessary or proper
for municipal purposes. It may control, dispose of, and
convey such property for the benefit of the city. The
legislative body shall not sell or convey any portion'of a
water front, except to. the State for use as a public beach
or park; unless by a four-fifths vote of its members the
legislative body finds and determines that the water front
to be sold or conveyed is not suitable for use as a public
beach or park. "
Council has been asked to consider a transfer of the -city•s
interest in the Pierside property to the Redevelopment Agency,
. an agreement between -the city and the Agency, and a lease
between the Agency and the developer, subject to a vote of the
people. For the reasons herein stated we counsel structuring
the transaction to provide -for a lease by the city rather than a
deed, and amend the• lease to. limit the overall term to 66 years.
ISSUE: PAS. a_ le Igpertv trivaer _the
reauireMe ,tea „four-fifths vote finding that the pamper y is
? ( v § 37351.)
BOTTOM LINE: v
purposes of q 37�.51. However, a deed of the city"s title to the
Redevelopment Agency would be considered a conveyance. In that
event, the elements of S 37351 must be considered. We view the
property as water front, but are of the opinion that the
requirement to find property not suitable for use as a beach or
park is only applicable where the proposed use is not consistent
with beach or park purposes. The Council may find that the
proposed use is a legitimate park use, since the proposed use
includes public promenades, access to the tidelands, view access
of the water and beach, and parking.
Honorable Peter Green, Mayor
and Members of the City Council
April. 3, 1991
Page 2
Throughout the state and nation there are restaurants in park
settings and other commercial structures (like the refurbished
roller coaster in San Diego) , so restaurants are not an anathema
to park use.
Any deed or conveyance should be restricted to park use. If a
use is a proper park use, there is no need for a four-fifths
vote to determine the property is nQ-t suitable for a park. As
noted, however, a lease by the city would be preferable to a
deed of the city's interest to the Redevelopment Agency.
It should also be noted that there are ample mechanisms
available to protect the public interest, including the
California Coastal Act, CEQA, and the charter requirement of a
vote of the people on such leases.
BACKGROUND:
The statute in question is a revision of a, statute that dates
back to 1883, and was amended in 1957 to add the latter
limitation regarding a four-fifths vote. The statute in general
focuses on a grant of authority to legislative bodies to
purchase, convey; lease or exchange real property for municipal
• purposes, and the 1957 amendment adds a limitation on the power
to sell or convey water front property. Although there are a
number of cases cited in the annotations to the code, none of
these cases defines "water front" and none deals with the
required finding of whether water front is "suitable" for use as
a public beach or park.
we have researched a number of sources in an effort to define
the terms and apply this section to the Pierside situation. The
term "water front" is not an engineering term that has any
common meaning, as does "beach," "shore," "mean high tide line, "
and the like. We conferred with the U.S. Army Corp of
Engineers, Waterways Experiment Station, in Vicksburg,
Mississippi, and found that their shoreline manual does not
contain any definition of "water front." Nor do the regulations
promulgated by the California Coastal Commission define "water
front."
A review of the opinions of the Attorney General of California
does not shed any light on this issue, except that in a 1946
opinion involving the City of Newport Beach, the Attorney
General opined that land in Corona del Mar which was the site of
a proposed state park (presumably the Corona del Mar State
Beach) lying above the ordinary high water mark of the Pacific
Ocean was water front, and that submerged lands below the mean
high tide line did not constitute water front. The words "water
r
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 3
front" are defined in the American Heritage Dictionary as land
abutting on a body of water, such as a lake or harbor. Water
front does not include the water beyond the mean high tide line
or the underlying land, and ordinarily means land fronting on a
body of water. See Citv of LongBepch v. Llgenby (1917) 175
Cal. 575, 166 P. 333, 335.
We have also spoken with other coastal cities, including San
Diego, San Francisco, Long Beach, Newport .Beach and Los Angeles
and are informed that none of these cities has rendered any
opinion on the applicability of the section, and that none
follows the procedures set forth in the section.
For the reasons stated, it is our opinion that S 37350 is not
applicable to the subject project.
In analyzing the applicability of § 37351, we need to make three
inquiries. - First, is the property water front? Second, would a
-lease of the Pierside property for a term of years constitute a
sale or conveyance? Third, if so, may the City Council find it
is not "suitable" for use as a public beach or park?
Preliminarily, we note that this !government Code § 37351 is in
the general provisions portion of the Government Code dealing
with city property: Primarily, the provisions of this section
of the Severnment Code focus on general law of -cities, and one
must read each section to determine whether it applies to a
charter city.
A charter city has exclusive powers over municipal affairs.
(Cal. Constitution, Article 11, § 5.) In matters of local
concern, city charters "supersede all laws inconsistent
therewith." (Id.) • It is a judicial question whether a matter
is a municipal affair, and legislative declarations are not
determinative (Bishop v. San Jose (1969) 1 Cal.3d 56, 81
Cal.Rptr. 465. ) while it may be argued that leases of local
parks and beaches are matters of state-wide concern, local land
use planning is a uniquely local concern, except as the city may
have adopted state planning law (Coyprnment Code § 65803) or are
required to act by statutes of state-wide application, such as
the requirement for a general plan. (Government Comae § 65300. )
We do not conclude that § 37351 is superseded by the charter as
to the subject property, but we do note in passing that there is
at least an argument along these lines. This argurent is
buttressed by the subsequent enactment of a matrix of planning
laws which are applicable to charter cities which serve to
protect environmental and coastal resources, such as the
California Coastal Act, the California Environmental Quality
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 4
Act, and various general planning statutes that protect coastal
areas. Further, our charter also has provisions which were
recently enacted by the voters as Measure C which require a vote
of the people prior to any sale or lease of any park or beach
property, so the charter provides ample protections for the
interests of the public and an opportunity for the citizens of
the cownunity to express their views on the disposition of such
property. Accordingly, we expressly decline to determine whether
or not the four-fifths vote and the findings required by § 37351
with regard to water front property are binding on a charter city
such as the City of Huntington Beach. Instead, we base our
decision that the statute is inapplicable upon a reading of the
section and comparison with other sections within the Government
Code provisions relating to city property.
It is also our bpinion that § 37351 is intended to deal with the
sale of property for purposes Qthgr than a public beach or park.
If the section were literally interpreted to apply to any lease.
of water front property for a use which would be an appropriate
use' of beach or park lands, the statute would preclude even a
lease of a hotdog stand or to provide parking for beach patrons.
We will conclude that a lease of any water front property for a
purpose which would otherwise be allowable in a public beach or
park is nat subject to the section.
ANALYSIS:
1. Question: is the property water front?
Answer: Yes.
As we noted above, water front is defined in the court cases
by what it is not rather than what it is. Water front is not the
land or water seaward of the mean high tide line; it is the land
upland of the mean high tide land. No cases define how far
inland the water front property goes, although most of the cases
deal with piers and wharfs, which are directly touched by water.
In the case at bar, the property is clearly uplands and is ,
separated from the mean high tine land by a broad expanse of
beach and a beach access road. The property is mostly the area
beyond and above the bluffs, and has been paved and used for a
variety of purposes for at least the last 50 years. The property
has been used for a building housing some restaurants, , for
.parking of cars, for a snack bar, and for a lifeguard
headquarters. The property is certainly beach front property;
but it does not front on the water. (See our opinion of January
30, 1991, defining beach in the context of the beach parking. lot.)
r
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 5
We recognize that reasonable minds can differ on the question of
whether property fronting on a beach is water front property;
indeed it is difficult for property to be closer to the water
than that which fronts on beach. QU_balanc!Q, -wQ ar!D inclined to
conclude that the subject property ig water front, recognizing
Jtbat _thi
Legislature has Nome duty to provide language which -is clear and_
explicit when it is drafting a stgtutC restrict* property
right
2. Question: would the proposed transaction operate to "sell'
or convey"--the property?
Answer: No.
When reading the section -as a whole, the conclusion is
inescapable that the restriction does not apply to leases. This
. .conclusion is buttressed by sections in the subsequent chapters
of .the 'Gonernment Code which expressly deal with leases.
Accordingly, § 37351 would -operate to prevent a sale of the
subject property for a use unrelated to park or beach uses,
unless the property were unsuitable for such uses.
The first sentence of § 37351 expressly discusses the powers of
a legislative body' to purchase, lease, exchange, control,
dispose of, and convey property. The restriction on water front
is confined to actions of- a legislative body to "sell or convey"
water front property. AS _a-Matter of legislative
interpretation. the omission of U2 trord "_igase"_ from the
r.estri,r.tio_ns- sugge,5--leafs ,ative intent to co__nfine.�the
_
restriction to cgnveyances or sales other than _leas. -
A conveyance, in the strict legal sense, is a transfer of title
to.•real property. (alas '_s__LawDictionarg, 4th Ed.) It
normally denotes any transfer of title, whether legal or
equitable. (14.) Title is generally the union of all elements
which constitute ownership, and is more than a mere possessory
right in land. Ud. ) In some contests a lease has been held to
present the "aspect" of a conveyance (Samuels v. Ottinaer (1915)
169 C. 209, 211, 146 P. 638. ) to illustrate its dual character
as both an interest in real property and a contract. But in the
traditional sense a leasehold is not title, and the clear intent
of § 37351 is to distinguish between a lease (an agreement which
gives rise to the relationship of landlord and tenant) and a
conveyance of legal or equitable title.
In the matter at bar, we understand that the proposal is for the
city to convey the property to the Redevelopment Agency, and 'for
.7
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 6
the Redevelopment Agency to enter into a lease. While the
Redevelopment Agency is a body related to the city and shares
the same board of directors, it is nonetheless a separate legal
entity and a state agency deriving its powers directly from
state laws rather than from the state Constitution, as does the
city. Accordingly, if the section is applicable to a transfer
for the proposed uses, it is our opinion that the section would
preclude conveyance of title to the Redevelopment Agency.
However, the section would not preclude lease of the property
for proper purposes to the Redevelopment Agency or to an
operator to provide services which would be. otherwise proper for
beach or park property.
As noted infra, it is our opinion that the proposed uses are
consistent with the legally authorized uses for public beach or
park, or as in this case lands held for the benefit of the
public. Accordingly, if there were appropriate use restrictions
on the conveyance, they should not trigger the remaining
procedures of S 37351. This issue is obviated, however, by the
city entering into a- lease rather than a conveyance to the
Redevelopment Agency of its interest in the site.
Article 2 of Chapter 5 of the Government Code, dealing with
public property, covers leases and has express provisions for
the power of the city to lease property owned or held or
controlled by it for terms not to exceed 55 years, or up to 99
years under certain conditions, and the section expressly gives
charter cities significantly greater powers than• general law
cities in this regard. Section 37385 expressly gives the city
the power to lease tide and submerged lands as well as uplands
abutting upon them as .the legislative body deems necessary for
the proper development and use of its water front and harbor -
facilities, for not to exceed 66 years. Cities also have the
power -to lease tidelands and uplands for parks, recreational,
residential, or educational purposes. Thus, cities have broad
powers to lease tidelands and uplands abutting tidelands. it is
obvious that throughout the state there are leases of
restaurants, warehouses, and other facilities along waterways
and beaches, and we assume that it is this authority that
supports such instruments.
It is our suggestion that the city not purport to convey in fee
its interest in the subject property, but that it may enter into
leases without triggering the four-•fifths vote and findings
required by S 37351.
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 7
3 . Question: v w
the land is not suitable for use as a nark or,
I)each.
Answer: 11o, unless a proposed use is inconsistent with
public purposes.
We need not reach this issue, since we have held that a lease is
not a sale or conveyance for purposes of § 37351. Assuming, .
arguendo, that it would trigger the section, it should be noted
that the finding of "suitability" required by the code leaves
considerable latitude in the legislative body to determine
whether property is appropriate or necessary for use as a park
or beach. "Suitable" means appropriate from the viewpoint of
propriety, convenience, or fitness. (WebsteILIN -Unabridged
DiCtionary.) A legislative body has great latitude in making
such determinations. Therefore, the City Council upon a review
of the plan could determine by a four-fifths vote that for a
variety of reasons the property is not suitable for use as a
public beach or park, based on the availability of other
parkland, the fact that the use is consistent with park
purposes, or a •determination that the proposed uses are needed
to serve adjoining beaches or parklands.
Additionally, the Council may well determine that the proposed
uses on the property are consistent with beach or •park use. If
. so, then the language of § 37351 would appear to be inapplicable
to the project, -since as noted the obvious intent of the section
is to preclude conveyances of land for some purpose other -than
use as a beach or park. Throughout the state, and indeed
throughout the country, parks contain various amenities that are
commercial in nature, such as restaurants, roller coasters,
museums, and other uses. The Council may well find that the
project as proposed and approved will conform to park purposes
in providing facilities for beach-goers, public access to the
tidelands for pedestrian traffic, and parking of vehicles for
persons who wish to use these amenities and enjoy the visual
access to the ocean or walk to the water. So if the uses are
consistent with park purposes, the four-fifths vote requirement
of § 37351 would not be triggered in any case.
CONCLUSION:
Section 37351 does not apply to_a lease of the Pierside._
Property. so lono_as_ themelease is for uses of the ,Bite which are
Qgnsistent with .
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 8
It should also be noted that property which is uplands abutting
upon tidelands is limited to a lease term of 66 years. we think
this land arguably does abut tidelands and that any lease should
be so limited. Also, the transaction should be structured so
that the city leases its interest to either the Redevelopment
Agency or an operator, and does not purport to convey its
interest.
Gail Hutton
City Attorney
GH:RCS:sg
cc: Michael. T. Uberuaga, City Administrator
Mike Adams, Director of Community Development
Ron Hagan, Director of Community Services
Barbara Kaiser, Director of Economic Development
Tom Clark, Esq.
Jonathan Chodos
Ve
a
. 4 CITY OF HUNTINGTaN - BEACH
INTER-DEPARTMENT COMMUNICATION
►IUNIM.1 N/EACM
To Honorable Peter Green, Mayor From Gail Hutton
and Members of the City Council City Attorney
Subject pierside Property - Date April 3, 1991
Vote Required for a Lease
INTRODUCTION:
On November 13, 1990, we advised that a four-fifths vote might
be required for a conveyance of pierside property from the city
to the Redevelopment Agency, since the property is arguably
"water front.." Goy-ernmen � ode S 37351 reads as follows:
"The legislative body may purchase, lease, exchange, or
receive such personal property and real estate situated
inside or outside the city limits as is necessary or proper
for municipal purposes. It may control,. dispose of, and
convey such property for the benefit of the city. The
legislative body shall not sell or convey any portion of a
water front, except to. the State for use as a public beach
or park; unless by a four-fifths vote of its members the
legislative body finds and determines that the water front
to be sold or conveyed is not suitable for use as a public
beach or park."
Council has been asked to consider a transfer of the city's
interest in the Pierside property to the Redevelopment Agency,
an agreement between -the city and the Agency, and a lease
between the Agency and the developer, subject to a vote of the
people. For the reasons herein stated we counsel structuring
the transaction to provide -for a •lease 'by the city rather than a
deed, and amend the. lease to. limit the overall term to 66 years.
ISSUE: Does a lease of pierside property trigger the
1eguirement of^a four-fifths vote finding that the property is
not suitable for a park or beach? (Government Code § 37351. )
BOTTOM LINE: No. Ale-ase is not A _saie_or Convoyance_for_
pUrpos,es ,o§ 37351. However, a deed of the city's title to the
Redevelopment Agency would be considered a conveyance. In that
event, the elements of § 37351 must be considered. We view the
property as water front, but are of the opinion that the
requirement to find property not suitable for use as a beach or
park is only applicable where the proposed use is not consistent
with beach or park purposes. The Council may find that the
proposed use is a legitimate park use, since the proposed use
includes public promenades, access to the tidelands, view access
of the water and beach, and parking.
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 2
Throughout the state and nation there are restaurants in park
settings and other commercial structures (like the refurbished
roller coaster in San Diego) , so restaurants are not an anathema
to park use.
Any deed or conveyance should be restricted to park use. If a
use is a proper park use, there is no need for a four-fifths
vote to determine the property is not suitable for a park. As
noted, however, a lease by the city would be preferable to a
deed of the city's interest to the Redevelopment Agency.
It should also be noted that there are ample mechanisms
available to protect the public interest, including the
California Coastal Act, CEQA, and the charter requirement of a
vote of the people on such leases.
BACKGROUND:
The statute in question is a revision of a statute that dates
back to 1883, and was amended in 1957 to add the latter
limitation regarding a four-fifths vote. The statute in general
focuses on a grant of authority to legislative bodies to
purchase, convey; lease or exchange real property for municipal
. purposes, and the 1957 amendment adds a limitation on the power
to sell or convey water front property. Although there are a
number of cases cited in the annotations to the code, none of
these cases defines "water front" and none deals with the
required finding of whether water front is "suitable" for use as
a public beach or park.
We have researched a number of sources in an effort to define
the terms and apply this section to the Pierside situation. The
term "water front" is not an engineering term that has any
common meaning, as does "beach," "shore, " "mean high tide line,"
and the like. We conferred with the U.S. Army Corp of
Engineers, Waterways Experiment Station, in Vicksburg,
Mississippi, and found that their shoreline manual does not
contain any definition of "water front." Nor do the regulations
promulgated by the California Coastal Commission define "water
front."
A review of the opinions of the Attorney General of California
does not shed any light on this issue, except that in a 1945
opinion involving the City of Newport Beach, the Attorney
General opined that land in Corona del Mar which was the site of
a proposed state park (presumably the Corona del Mar State
Beach) lying above the ordinary high water mark of the Pacific
Ocean was water front, and that submerged lands below the mean
high tide line did not constitute water front. The words "water
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 3
front" are defined in the Am r .O as land
abutting on a body of water, such as a lake or harbor. Water
front does not include the water beyond the mean high tide line
or the underlying land, and ordinarily means land fronting on a
body of water. Zee_ ity_of_ Long_Beach v. Lisenby (1917) 175
Cal. 575, 166 P. 333, 335.
We have also spoken with other coastal cities, including San
Diego, San Francisco, Long Beach, Newport .Beach and Los Angeles
and are informed that none of these cities has rendered any
opinion on the applicability of the section, and that none
follows the procedures set forth in the section.
For the reasons stated, it is our opinion that § 37350 is not
applicable to the subject project.
In- analyzing the applicability of § 37351, we need to make three
inquiries. - First, is the property water front? Second, would a
-lease of the Pierside property for a term of years constitute a
sale or conveyance? Third, if so, may the City Council find it
is not "suitable" for use as a public beach or park?
Preliminarily, 'we note that this Qovernmgnt Code § 37351 is in
the general provisions portion of the Government code dealing
with city property: Primarily, the provisions of this section
of the Qovernment,,,Code focus on general law of cities, and one
must read each section to determine whether it applies to a
charter city.
A charter city has exclusive powers over municipal affairs.
(Cal. Qongtitution, Article 11, § 5.) In matters of local
concern, city charters "supersede all laws inconsistent
therewith." (I$.) It is a judicial question whether a matter
is a municipal affair, and legislative declarations are not
determinative (BjvhQQ v. Ean -Joge (1969) 1 Cal.3d 56, 81
Cal.Rptr. 465.) While it may be argued that leases of local
parks and beaches are matters of state-wide concern, local land
use planning is a uniquely local concern, except as the city may
have adopted state planning law ( , v § 65803) or are
required to act by statutes of state-wide application, such as
the requirement for a general plan. (GovernMgnt CQOC § 65300. )
We do not conclude that § 37351 is superseded by the charter as
to the subject property, but we do note in passing that' there is
at least an argument along these lines. This argument is
buttressed by the subsequent enactment of a matrix of planning
laws which are applicable to charter cities which serve to
protect environmental and coastal resources, such as the
California Coastal Act, the California Environmental Quality
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 4
Act, and various general planning statutes that protect coastal
areas. Further, our charter also has provisions which were
recently enacted by the voters as Measure C which require a vote
of the people prior to any sale or lease of any park or beach
property, so the charter provides ample protections for the
interests of the public and an opportunity for the citizens of
the community to express their views on the disposition of such
property. Accordingly, we expressly decline to determine whether
or not the four-fifths vote and the findings required by § 37351
with regard to water front property are binding on a charter city
such as the City of Huntington Beach. Instead, we base our
decision that the statute is inapplicable upon a reading of the
section and comparison with other sections within the Government
Code provisions relating to city property.
It is also our opinion that § 37351 is intended to deal with the
sale of property for purposes other than a public beach or park.
If the section were literally interpreted to apply to any lease.
of water front property for a use which would be an appropriate
use of beach or park lands, the statute would preclude even a
lease of a hotdog stand or to provide parking for beach patrons.
We will conclude that a lease of any water front property for a
purpose which would otherwise be allowable in a public beach or
park is Dgt subject to the section.
ANALYSIS:
1. Question: X_the_pronerty waterfrgnt7
Answer: Yes.
As we noted above, water front is defined in the court cases
by what it is not rather than what it is. Water front is not the
land or water seaward of the mean high tide line; it is the land
upland of the mean high tide land. Ko cases define how far
inland the water front property goes, although most of the cases
deal with piers and wharfs, which are directly touched by water.
In the case at bar, the property is clearly uplands and is ,
separated from the mean high tide land by a broad expanse of
beach and a beach access road. The property is mostly the area
beyond and above the bluffs, and has been paved and used for a
variety of purposes for at least the last 50 years. The property
has been used for a building housing some restaurants, . for
.parking of cars, for a snack bar, and for a lifeguard
headquarters. The property is certainly beach front property;
but it does not front on the water. (See our opinion of January
30, 1991, defining beach in the context of the beach parking lot.)
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 5
we recognize that reasonable minds can differ on the question of
whether property fronting on a beach is water front property;
indeed it is difficult for property to be closer to the water
than that which fronts on beach. On balance. -we .are inclined to
conclude that tha subi=-property is water front, recog izina_
that this _prop!asjt;iQn_ is not free from doubt. And the_
Legialoturn has agme duty to provide language which ig Clear ,p&_
explicit when It—is -drafting sl .statute restrict'ng•_vroperty—
xi.ghts•
2. Question: jlould the nroposeI transaction operatC to "sell
or convey"the prp-perty?
Answer: Zlo.
When reading the .section as a whole, the conclusion is
inescapable that the restriction does not apply to -leases. This .
conclusion is buttressed by sections in the subsequent chapters
of the "Government Code which expressly deal with leases.
Accordingly, S 37351 would -operate to prevent a sale of the
subject property for a use unrelated to park or beach uses,
unless the property were unsuitable for such uses.
The first sentence of S 37351 expressly discusses the powers of
a legislative body' to purchase, lease, exchange, control,
dispose of, and convey property. The restriction on water front
is confined to actions of a legislative body to "soil or convey"
water front property. AZ a matter of legislative
Interpretation. the omission of the Hord ftleasV" f rroM the_
restrictions. suggest a legislative intent to confine the
restriction to conveyances or sales other. than leases.
A conveyance, in the strict legal -sense, is a transfer of title
to.•real property. - (slack's Law Dictionary, 4th Ed. ) .It -
normally denotes any transfer of title, whether legal or
equitable. (d.) Title is generally the union of all elements
which constitute ownership, and is more than a mere possessory
right in land. (Id.) In some contexts a lease has been held to
present the "aspect" of a conveyance (Samuels v. Ottinaer (1915)
169 C. 209, 211, 146 P. 638. ) to illustrate its dual character
as both an interest in real property and a contract. But in the
traditional sense a leasehold is not title, and the clear intent
of S 37351 is to distinguish between a lease (an agreement which
gives rise to the relationship of landlord and tenant) and a
conveyance of legal or equitable title.
In the matter at bar, we understand that the proposal is for the
city to convey the property to the Redevelopment Agency, and 'for
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 6
the Redevelopment Agency to enter into a lease. While the
Redevelopment Agency is a body related to the city and shares
the same board of directors, it is nonetheless a separate legal
entity and a state agency deriving its powers directly from
state laws rather than from the state Constitution, as does the
city. Accordingly, if the section is applicable to a transfer
for the proposed uses, it is our opinion that the section would
preclude conveyance of title to the Redevelopment Agency.
However, the section would not preclude lease of the property
for proper purposes to the Redevelopment Agency or to an
operator to provide services which would be. otherwise proper for
beach or park property.
As noted bra, it is our opinion that the proposed uses are
consistent with the legally authorized uses for public beach or
park, or as in this case lands held for the benefit of the
public. Accordingly, if there were appropriate use restrictions
on the conveyance, they should not trigger the remaining
procedures of § 37351. This issue is obviated, however, by the
city entering into a lease rather than a conveyance to the
Redevelopment Agency of its interest in the site.
Article 2 of Chapter 5 of the Government Code, dealing with
public property, covers leases and has express provisions for
the power of the city to lease property owned or held or
controlled by it for terms not to exceed 55 years, or up to 99
years under certain conditions, and the section expressly gives
charter cities significantly greater powers than general law
cities in this regard. Section 37385 expressly gives the city
-the power to lease tide and submerged lands as well as uplands
abutting upon then as .the legislative body deems necessary for
the proper development and use of its water front and harbor
facilities, for not to exceed 66 years. Cities also have the
power -to lease tidelands and uplands for parks, recreational,
residential, or educational purposes. Thus, cities have broad
powers to lease tidelands and uplands abutting tidelands. It is
obvious that throughout the state there are leases of
restaurants, warehouses, and other facilities along waterways
and beaches, and we assume that it is this authority that
supports such instruments.
It is our suggestion that the city not purport to convey in fee
its interest in the subject property, but that it may enter into
leases without triggering the four-fifths vote and findings
required by § 37351.
I r
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 7
3. Question: Would a four--fifths vote be required on whether
thQ land - is not titable for use as, a park_or
reach.
Answer: No, unless a proposed use is inconsistent with
public purposes.
We need not reach this issue, since we have held that a lease is
not a sale or conveyance for purposes of § 37351. Assuming,
arguendo, that it would trigger the section, it should be noted
that the finding of "suitability" required by the code leaves
considerable latitude in the legislative body to determine
whether property is appropriate or necessary for use as a park
or beach. "Suitable" means appropriate from the viewpoint of
propriety, convenience, or fitness. (We ster•s_UnabridgeC
Dictionary.) A legislative body has great latitude in making
such determinations. Therefore, the City Council upon a review
of the plan could determine by a four-fifths vote that for a
variety of reasons the property is not suitable for use as a
public beach or park, based on the availability of other
parkland, the fact that the use is consistent with park
purposes, or a •determination that the proposed uses are needed
to serve adjoining beaches or parklands.
Additionally, the Council may well determine that the proposed
uses on the property are consistent with beach or 'park use. If
. so, then the language of § 37351 would appear to be inapplicable
to the project, -since as noted the obvious intent of the section
is to preclude conveyances of land for some purpose other than
use as a beach or park. Throughout the state, and indeed
throughout the country, parks contain various amenities that are
commercial in nature, such as restaurants, roller coasters,
museums, and other uses. The Council may well find that the
project as proposed and approved will conform to park purposes
in providing facilities for beach-goers, public access to the
tidelands for pedestrian traffic, and parking of vehicles for
persons who wish to use these amenities and enjoy the visual
access to the ocean or walk to the water. So if the uses are
consistent with park purposes, the four-fifths vote requirement
of § 37351 would not be triggered in any case.
CONCLUSION:
Section 37351 does not apply to a lease of the Pierside-
property, so long as the lease is for uses ox thg site which are
cQnsistent with in the yr02erty.
.� M
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 8
It should also be noted that property which is uplands abutting
upon tidelands is limited to a lease term of 66 years. We think
this land arguably does abut tidelands and that any lease should
be so limited. Also, the transaction should be structured so
that the city leases its interest to either the Redevelopment
Agency or an operator, and does not purport to convey its
interest.
X,f-�
Gail Hutton
City Attorney
GH:RCS:sg
cc: Michael T. Uberuaga, City Administrator
Mike Adams, Director of Community Development
Ron Hagan, Director of Community Services
Barbara Kaiser, Director of Economic Development
Tom Clark, Esq.
Jonathan Chodos
moo~ .
FROM
}9811-h"and �~ L
A—y Ti16nsm1ttal Memo 7672 '`o ota��e, 3 `,A�aey4De�+ 91 T,me
� - 17l
CONN I E BROCKWAY Tb
From DEBB I E COOK
Com""'r CITY OF HUNTINGTON BEACH Compeer
LOteRnn LaeUon Dept.Chip
Tax# Ts%ct s s Fgx I U1100u I
CcmmerdR 0101t C3pemC+y 13RO1u-n �Cs�}ap4:�trc
CiepoG o'l.
WILL YOU PLEASE SEE THAT THE CITY COUNCIL RECEIVES A COPY OF THIS LETTER
AS WELL AS MICHAEL UBERUAGA. THANKS
.o c
l]tbbic Cook
Save Our Parks c� n
6692 Shetland Circle T K
Huntington Beach, CA 92648 o A
Ap:il 7, 1991 x
.. r
Gail Hutton,City Anorney `
City of Huntinglan Bea:yh
2000]Main Street
Huntington Beach, CA 92648
Dear Gail-
I
In the rendering of the opinion on the water front issue,I would like to point out some
major flaws in Mr. Sangster's research.
The intent of Government Code Section 37351 was to prevent cities from giving
ownership or die vestiges of ownership to parties other than the State of California. As
such, long term leases would be a conveyance which would require a 415 vote under the
statute. 1 have noted that you "expressly decline to determine"whether Section 37351 i
applies. Instead,die opinion addresses lands which were not acquired for public park
purposes but addresses lands acquired specifically for industrial uses.
The mere surveying of other Coastal Cities does not have any basis in law. I have
never heard of a judge letting;law breakers off the hook because they were part of the
crowd and "everyone was doing it." Drivers make many illegal moves but their ig;•noraricc
of the law does not stop a police officer from citing,nor a judge from fining. '.
It is important that you tape the tithe to read Goverrunent Code Section 37385 because
Mr. Sangster has i< < it and applied it inappropriately.
37385. Development and use of water front and harbor
facilities. Maximum term of lease.
A city may lease tide and submerged lands, the wharfs,docks,piers, and
other structures or improvements on these lands, mid as much of the
lands al uldag upon them as the legislative body deems necessary for the
proper development and use of its waterfront and harbor facilities,for not to
exceed 66 years.
Mr. Sangester has changed a significant portion of the emphasized wording. The term
"uplands"is used in the conjunctive maivier,nut the disjunctive manner in the,statute. It
means the"uplands"may be based with tidelands for a period of up to 66 yeti's but the
statute does not authorize the lease of uplands without tidelands. Furthermore, two Notes
of Decisions should bc.read by your' �-=r t n n Ll (1931) Z 1;CA 1P2;299 P$35;'� '-�---
- — - zal" ; ., l : 1 T1 , H r . (1933) 130 CA 376, 20 P 2d
130. The first one states "legislature did not intend that property be leased for any
purposes other than those usually incident to development of harbor." 1'he second one
states "snaking lease to plaintiff uthletic club was not exercising governanentul function but
private or proprietary one." Why slid Mr. Sangster not cite this case law? Clearly,Pierside
Village Restaunnt•s are not the development of Nubor facilities but a private or proprietary
development.
- S
• t
i
P. 2
FROM
}-
.;
ter,
Although not mentioned in the opinion,there are other Government Code Sections which
farther limit the kasiq of"uplands."
37386. Lease of lids+ and submerged Iands and uplands:
Industrial and other uses consistent with commerce and
navigation.
A city may lease such fide and submerged lands and uplands for:
(a)Industrial usbs.
(b)Improvement and development of city harbors.
(c)ConSIxUCtion and maintenance of wharfs, docks,piers, or bulkhead
piers.
(d)Other public uses consistent witli the requht~ments of commerce or
navigation in city harbors.;
37387, Lease of tidelands and uplands: Park, recreational,
residential, and educational purposes: Conditions.
When the Icgisla6ve body deenis that industrial use of such tidelands and
uplands is inimical to the best interest of the city,it may lease them for park,
recreational,residential,or educational purposes,under condidons not
inconsistent with the trust imposed upon the tidelands by the Constitution.
Like section 37395,neither of these can be used to bolster the opinion. One deals with
commerce and navigation and the other with park,recreational,residential, and educational
uses. If an athletic club was not deemed to be recreational, the restaurants would certainly
not be deemed to be recreational, Restaurants are a corntnercial use and as such would fail
under Government Code section 37395.
37395. Lease for commercial divelopment for business
purposes; Maximum Term.
A city may lease for not to exceed 55 years property owned, held,or
controlled by it,or any of its departments,for commercial development for
business purposes,when the governia to"yetermines bUrdinznce or
resolution that the= r y is not reqQired fa other city pnoses. 11is
section is applicable to any lease emecured o or after]anuary 1. 1986.
At a minimum,the opinion of Mr. Sangster is flawed when it allows it 66 year lease under
section 37385 when clearly 55 years would be the maximum for a commercial lease under
section 37395 on city owned property.
There are only two codes that apply, Under 37351,you cannot sell or convey the '
subject property without a 4/5 vote and a finding L%at it is not suitable for park and beach
uses. If it falls under 37385,you may not lease for period over 55 years. Under either
provision,a lease to the Redevelopment Agency would not be authorized unless it received
a 415 vote and was for a period of less than 55 years.
If the project were to fall under 37385 as expressed in your opinion,it cannot be leased
for commercial purposes, but rather only portions as necessary for the eons:ruction of
docks,piers,or wharfs. The mere name change of the project to "Pierside Docks and
Wharfs Beanerie" would not suffice to bring it under this statute.
The required City purpose is for parking,beach concessions, and pier-related uses.The
City receives substantial revenues from the existing uses and to subvert this property from
FROM P. S
w
public recreational to commercial proprietary uses would be in conflict with the casement.
And this brings us back to the original Argument: Restaurants Are not Recreation.
Noy recommondatiott is that you review,reject and modify Mr. Sanster's Opinion.
Creating a precedent is a ocice in a lifetime;opportunity. It should not be attempted in this
case. Restaurants and other commercial uses suay be,located ae.-russ Pacific Coast
Highway. The land was acquired by judicial act and the City cannot change its use. The
public owns the casement and the city holds it in Wit.
Why is the City's attitude always "Let them tales us to court." The City Attorney's
ultimate responsibility is to protect the City's assets,not to succumb to the political whims
of City Council. Isn't this why we tenaciously hang on to an "elected" City Attorney? If I
can show that.Mr. Sangster s opinion has so many holes in it that it looks like it was "typed
on Swiss cheese;"imagine what a professionally trained lawyer would do.
I
Please initiate a good faith effort to investigate the public recreational easement issue
and legitimate uses of"recreation." You might check with State Parks and Recreation who
deemed that a proposed restaurant on the north side of the Pier was not in keeps ng with
recreation. Pierside Village should not be built until this Issue is resolved.
Respectfully yours,
44&�-
Debbie.Cook
cc: Mayor Peter Green
COuncilpersons Winchell,Moulton-Patterson, Robitaille, Silva,Kelly, MacAllister
Michael T. Uberuaga,City Administrator
Bob Barker,OC DaiIy Pilot
Bill Diluter,Ira Times
Ann Pepper,OC Register
Charles Campbell,Esq.
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mod Uckk within im bowAulet for Utbw wd Xptr 379, 366 P2d 651. cart dm 30 M M S L
• tie pwrroia, and rigid to legs poh pmpr1y. PA 24 276,82 3 d 1143.
kgla w.- did not *AtmVbie brat pr+opQty ba ib acdm by Wpaye of cF wv- dcy to twvt
laird for svy purpows other dhaa those m"Lly &doW vaU and w m*U od and au lease to
} fmideat to devdosumi of >tsrbor. Stove v Las dddm& wbkb city hQ ss V;v t1� trq ao
As;tid(1931) 114 CA 192.299 P E31. 1wk to kxpYe6 coatadea that, "ugh he
Uader liddW Aa of 1911. tbw perms in saipnlm them wu so wsmW hwr huvdntd in
I powesalep of tiddo& btlm&g to city at time of gftatins kie. 1w did soft "vv W that dwv
ll' j oomPromme t rhlc* city mteetid Into vrt "one thaad:' �' fim94. in
i• s whb variaus clsimantt. wbo qdtdLhtwd tb* dh4 OM then wo anal rvd ct oac va
Inurom dad riot to nodn lone d thm beds frsad fad sacocd ea %bA ec wyWW*m of cue-
tnr t ml-ere Itulk for *bids t}se7 pvt oOW& eve ftud. which tact aw nooplad by
t c"m In sccordsaac with fit.and thy not taspayer in hk ow mg mea4 be U%ug painted
oa4 lcsd aadm tyr to lase theca for wwh p044 Cady to 6Cb WhWb woeld bow aoestitnted tut A
but war lrplly obtiµted to do saw 8aard of(cart sot omstrvc tfW, head. &Ww v La A-MW !
CbmrL v WiIlluns(1937)9 C2d 3$1,70 P2d 91L (1%1)37 C2d 39, 17 Ctt1 W 379, 94 PU 651.
Vadar Tiddw4 Act, chy bad abaolde rift to asn dw 369 VS 173, i L Ed 24 276, ft S Ct
f ti urmtaaft lures in geesdm prior to esww4 nd 1143.
prvv�" for aompmodw to Uaft !bc lacpnore. M doe *bm thav wo oo dww cc natatory t
MMU tcpplied only ea 1w an to Q d- provi6m dbutinS mo=er in wtcich b" a a to
' t San. Board of Pare P.:cmm v W3 H&M 0917) 9 be 1ta.4 ag that wo ttq%&,cd of chanty cloy In s
C2d 111.70 P2d 9IA. cucvtks d1 lease to tide W& held is Una bf
f : Lacs*mbU by city,d WdRzids imted to$by Vw bm state was tW its&pro sot 4dAy In all
state cadet T'ddarW Act of 1011.*we re*dfW to wa sas rw gwxi+*pc opor dircZt W of Oak dud i,
mAc dy cmfv m to and bet with swpect to to Tam and when it war uipnl" that there wo eo
"vin pr mb4 and that sMW4 was pM=of actual Awd, o xwpd^ bad pith or ww1w 1al1v-
s11 lesser. Larne Wb&d A Warnbmw Ca *XW4 cw4 dwe *►a no his ibr oomndl;g that thq 1
cf?art Comm(1937)9 C 24 397,70 P2d 92b. ad act act Wft is vk* of sod oipuladm b
Akhou;h pi p*r wt oe tl dmds *ad dddhcacd am+t bs kmd that dry mumilo m VqW Lbdr
r t rehearse is trgswide alhir.ft dm tat mem drat banay. cwidaro jcscPwat io Isiaing U4 they �
Aseriee (1461) V C2d 39. 17 Cal Rpft 379, 366 soteacsa. Wwt v La Asada (191) 17 Cad 39,
i MA 651.owl dw 369 US 173,i L Rd Zd 276, 12 17 Cd Rptt 379. 366 P2d 631. cart dm 30 VS '
f S01143. M I L Ed 24 376, 1211 Cat 1143.
1 �
} t 3730. lvelopmeat and We Of water ftUt' W boob WMUCC
} Maximum torn of less
: A city duly Icam We and aubmtgad ImA the whArve& dx1a6 pimp
S24
E
E
OMCEIPS 373W
and other structures or improvements on that hnds, and as much of
the uppDads abutting up= them as the legi htive body downs neoes-
1laryfar the proper development and use of its waterfront and harbor
facilities, for not to exceod 66 years.
Added state 1949 eh 791 1,Armed Stan 1961 ch 1%11.
Pros Lmmr.HaW on.
a) CC 1711 Zd s mk 4th A a amaxW by U* 1903 ch 210p11 p 247. Stab 1911 cb 706
1 p 1391,Stds 191d c'h 17612 p 349.State 1911 t6$72 11 V 79 6tata�l4 31 �43 1 p 117 . 3tats 1929 ch 170 11 p 322. Sun 1935 rh 69S E 1 0 p
1800.
(6)&&u 1831 ch 11 j l p 169.
Aaandaatx
1961 Ama&"k SubedtvW-W fa
Power of kgWatfre body of a ty to sd.1 or omvey w►eta froatproperty: 13715 1.
Less--ie dty property for oommaraal devmiap=t for businea purpaw 137393.
Txk4 ads sot to pass into pdnk bai,& Mae Art Xv f 3.
CoMit"Rde uaw
Cat rur 24 MuMcipal CAcpoc dons 1459.
McKinaWs Cal DiS Mfticpa1 C"Mviam if 381 st seq.
36 Am ,fur 3d Munidpal Carpamdow, Comtfm jM 00= potidcal SubcflvW na
f 539.
NOTES OF DMMONS Er7y
Pant that wMd leoW to o am h oomp ty raa km my VW tb dddwxh to vunldpst dM
sole *hart akdva to Luba, and wo reset%I with power to bmW and aah ale wbarva foe
knee ham dd#ttapidatad wba4 omdd ant aged VWk we sod w�t1 power to X=t keem P01-
rrhdttl' of lama, dq sot bavlr j o 4po d rarer �W Etrno�s to prirste parr as Oa>`tand v
mot to bai3d or to pawk ct1r� to butwd otbar Waal(L X)Lumber Co. (1930)211 C 16,M P
whu% sad Chars betas as &Voaxwel tort wtmsf 107C ID AM 379.
Pod ow $.Cb.lw* hmaw vte note► e1"6 k brrboe. Loan br to t� �� of
TMdAt Coat S.S.(70.r tt.imbsll( )114C414.I196
"P 273. ha&cg plans or wharf an its rrst4e front omW sot
Law and eoatrad lmtsram crty'a board of port be UK m�in resat.tdL.at eltarja,or is
n IM04 _� �rar��e 10�bbe ere �fim to t%ni fiWadoe or prtdjge to ooadret
fora for iasasr as lads*& steered.to dly by pxwoJ wbubpr Umbm as Oalchad v Food M
1 write. ogwale theme to be pad bum mooed 'L) Lumbar Co. (I"M 211 C 16,292 F 1076, 10
"Ved Moen alr d Mwapal ltatboe impnar ALA 379.
west b*@&, did go caaodte atlenspt 16 saty o- Wbne statute Qsota I dry tl *nda sad sot-
rW are mf pwbk t4ade ibs piv ate yerposa k pad bm&whbia is boamdrrtea fur hu%w sad
vWadm d Cmd Art 1114.OaM od v lvttlLa no �► $a 04M to lone each pmperty.
(19")206 C 315.274!323. - hgWatm 6W sot intend that p vpwq be lamed
Wasebom was ad b! dt11 bard d 1w per Imposes otbee rhos time mMVy kWjdmt
zh4anm as bKftats or part or onemd a pha to devdm mwd of butsos. Saaae r Las Aaselas
d harbor hmpwmad FAW amrs 11d I m1*" (1931)114 CA 11%2"P 93L
a aid sN or prrt cf. sash Stead p1r4 a+sa
demo 1064 for sae ushl tas so petrste maspats• WbM rM am Mokwoa 19m aq rw 'O
0=;ad it Y 69 srsmbow to sot Is feast batter foods the oarWA putpoae& dry,ma-
w Put 10 rWA* womb=" am rrovldrd b b is loos to pir5 dr athldie d* war sot as wd&
va to s OirAl M tiara pro a d" or a lh- bij pmsmastrl &Sadao bmt pIVW Or rwio-
aroe d red pwL 04 ad v WMh ms(I"2N tsq ass to Assets Addedc CM r !load d
C 313.274 P 32L Atebw atom(1933)130 CA$74.20 P2d 130.
i.� rFs p•i+t f
r FROM
N1 Of FlspS �W8144Dari
,FaxTransmittal Memo 7672 3 4/7/91
ti
f r° From
CON N I E BROCKWAY DEBB I E COOP.
tomva�r CITY Or HUNTING70N 13EACtt
Lotuian lrc.a°,v.1 DbNI Gher�a
fax Fig Ta!a�hxu f
Ccmmanrs a`'p'"r Gerry D N!u•n �Can for pr:n:p
WILL. YOU PLEASE- SEE THAT THE CIZY COUNCIL RECEIVES A COPY OF Tt11S LETTER
AS YIELL AS M I CHAEL UBERUAGA. THANKS
.T, C
Dcbbic Cook
Save Our Parks p � �'x
6092 Shetland Circle
Ilantington Beach,CA 92&19 CD v T;m
�p n o
April 7, 1991 a
r
Gail Hutton,City Attorney LA
City of I lutuirigion Beach
2000 Main Street
Huntington Beach, CA 92648
Dear Gail: '
In the rendering of the opinion on the water front issue,I would like to point out some
major flaws in Mr. Sangster's research.
The intent of Governawnt Code Section 37351 was to prevent cities from giving
ownership or the vestiges of ownership to parties other than the State of California. As
such, long term leases would be a conveyance which would require a 4/5 vote under the
statute. 1 have noted that you "expressly decline to deterniine" whether Section 37351
applies. Instead,the opinion addresses lands which were not acquired for public park
purposes but addresses lands acquired specifically for industrial uses.
The mere surveying of other Coastal Cities does not have any basis in law, I have
never heard of a judge letting law breakers off the hook because they were part of the
crowd and "everyone was doing it." Drivers make many illegal moves but their ig-norance '
of the law does not stop a police officer fioin citing,nor a judge from fining.
It is impomant that you take the titre to read Goverrunt nt Cods-Section 37385 because
W. Sangster has mLtguote it and applied it Inappropriately.
37385. Development and use of water front and harbor `
facilities. Maximum ierm of lease.
A city may lease tide and submerged lands,the wharfs,docks,piers, and
other structures or improvements on these lands, and as rough of tbr,
111,11lands abuttlni unon tlLeln its the legislativc bony&oar,necessary for the
proper development and use of its waterfront and harbor facilities,for not to `
exceed 66 years.
Mr. Sangester has changed a significant portion of the emphasized wording. The terns
"uplands"is used in the conjunctive manner,not the disjunctive manner In the statute. It _ . . .
means the "uplands"may be leased with tidelands for a period of up to 66 years but the :
statute does not authorize the lease of uplands without tidelands. Furthemiore.two Notes_
ofDccision.ishouUberearl-by-vm, "I'P 14:e"Xi' '`'99P83a;
and i�as Atk Ro;lrd of Harbor . (1933) 130 CA 376,20P 2d
130. The ft.-st one states "legislature did not intend that property be leased for any
purposes other than those usually Incident to development of harbor." The second one
states "inaking,base to plaintiff athletic club %r as not exercising governmental function but
private orproprietary one." Why did Mr. Sarrgstcr not cite this case law? Clearly,Pierside
Village Restaurants are not the development of harbor facilities but a private or proprietary
development.
^' r FROM
fr .
F. 2
Although not mentioned in the opinion,there are other Goverment Code Sections which
farther limit the lcasiq of"UPL11uls."
37386. Lease of tide and submerged lands And uplands:
Industrial and tither uses consistent tvllh commerce and
navigation.
A city may lease such tide and submerged lands and uplands for.
(A) Industrial uses.
(b)Improvement and development of city harbors.
(c)Construction and maintenance of wharfs,docks,piers, or bulkhead
piers.
(d)Other public uses consistent with the roquirc meats of commerce or
navigation in city Harbors.
37387. Lease of tidelands and uplands: Paris, recreational,
residential, and educational purposes: Conditions.
When the Icgislative body deetus that industrial use of such tidelands and
uplands is inimical to tltc best interest of the city,it My least them for park,
recreational,residential,or educational purposes,under conditions not
inMonsistent with the trust itnpowd upon the tideland- by the Constitution.
Like section 37385,neither of these can be used to bolster the opinion. One deals with
c;ommme and navigation and the other with park,recreational,residential,and educational
uses. If an athletic club was not deemed to be recreational,the restaurants wmild certainly
not bt de'enied to be recreational. Restattrants area cununercial use and as Such would fall
under Government Code section 37395.
37395. Lease for commercial development for business
purposes; Maximum Tertn,
A city may lensc for not to exceed 55 years property owned,held,or
controlled by it,or any of its departments,for commercial development for
business purposes, when the �eteniiillrsbv ordivance or
rescrltttion chit the L' 4S' r(y N not reQQired t'or hPr citypttro ses. '11tis
section is Applicable to any lease rxec cited on or after3anuary 1. 1986.
At a rninimurn,the opinion of Mr. Sangster is flawed when it allows a 66 yemr lease under
section 37385 when clearly 55 years would be the maximum for a commercial lease under
section 37395 on city owned property.
There nre only two codes that apply. Under 37351,you cannot sell or convey the
subject property without a 415 vote and a finding that it is not suitable for park and beach
uses: If it falls under 37385,you titay not lease for period over 55 years, Under either
provision. case to the Rede�•clopment Agency would not be authorimd unless it received
a 4/5 vote and was for a periml of less than 55 years.
If the project were to fall under 37385 as expressed in your opinion,it cannot be kased
for commercial purposes,but rather only portions as necessary for the construction of
docks,piers, or wharfs. The niere name change of the project to "Pierside pocks and
V4'harfs Beanerie" would not suffice to bring it under this statute.
The required City purpose is for parking, heach cottc•cssions, and pier-re[wed uses. The
City receive-,substantial revenges from the existing uses and to subvert this property from
public recreational to commercial proprietnry uses would be in conflict with the cascmenL
And this brings us back to the original argument: Restaurants are not Recreation.
My recommendatiat is that you review,reject,and modify Mr.Sanstees opinion.
Creating a precedent is a once in a lifetime opportunity. It should not be attempted in this
case. Restaurants and otl[ct conuucidal uses may be located across Pacific Coast
Highway. The land was acquired by judicial act and the City cannot change its use. The
public owns the easement and the city holds it in ut�1i_+� trust.
NVhy is the City's ttuitude xlwttys "Let them takes us to court." The City Attorney's
ultimate responsibility is to protect the City&assets,not to succumb to the political whites
of City Council. Isn't this why we tenaciously hang on to an "elected"City Attorney? If I
can slow that Mr. Sangster s opinion has so marry holes in it that it looks like it was "typed
on Swiss cheese;"imtgine what a professionally trained lawyer would do.
Please initiate a good faith effort to investigate the public recreational easement issue
and legitimate uses of"recreation." You night check with State Parks And Recreation who
deemed that a proposed restaurant uu this north sick of the Pier was not in keeping with
recreation. Picrsidc Villa c should not be built until this issue is scsolved.
Respectfully yours,
,a".,� &44.,
Debbie Cook
cc: Mayor Peter Green
Councilpersons VVinchell,Moulton-Patterson, RobitaiIle, Silva,Kelly, MacAllister
Michael T.Uberuaga,City Adnvnistrator
Bob Barker,OC bvly Pilot
BilI B illiter,Q%Ticttcs
Ann Pepper,OC Register
Charles Campbell.Esq.
s
J
CITY PROPERTY—GENERAL § 37351
Div. 3 �-
Defendants in a stilt to quiet title could not predecessors by the Van Ness ordinance; the F
Impeach the regularity of a deed to plaintiff by purpose of the act of 1870 being not to devest
the mayor of San Francisco under the authori- titles, but merely to provide for the issue of f
ty of Act March 24, 1870,Stats.1869-70,p.353, appropriate muniments of title. Id. r
relating to the confirmation of land titles in
San Francisco,unless they showed that they or In an action against the city by Its grantee to •
their predecessors had become vested with the quiet title to land under a deed made in 1869,
c'
title of the municipality before the date of the which recited that the officers who executed It f _
deed. San Francisco d:F.Land Co.v.Hartung were authorized so to do by a vote of the ...
(1902) 71 P. 337, 133 C. 223. inhabitants. such deed was admissible in evi• ■ :
Notwithstanding the mayors deed, it was dence, though not attested'by defendant's eor-
still open to an opposing party in a suit to quiet porate seal. Gordon v. City of San Diego
title to show that title had passed to him or his (1894) 36 P. 1E, 101 C. 522, 40 Am.St.R. 73.
§ 37350.5. Power of eminent domain .
A city may acquire by eminent domain any property necessary to carry out S
any of its powers or functions.
(Added by Stats.1975, c. 1240, p. 3167, § 32, operative July 1, 1976.)
Law Revision Commisslotl Comment s
1975 Addition
Section 37350.5 supersedes the grant of condemnation authority formerly
contained in various subdivisions of Section 1233 of the Code of Civil Proce-
dure and supplements the specific grants of such authority contained in this t
and other codes. E.g., Govt. Code § 37501 (public assembly or convention , z
halls); Sts. & Hwys. Code § 4090 (streets, walks, parking places). Its purpose
is to give a city adequate authority to carry out its municipal functions. Cf.
Code Civ.Proc. § 1240.010 (authorization of eminent domain for any purpose
or function is a declaration that the purpose or function is a public use). The
powers and functions of a city may be determined by reference to a city
charter as well as to a statute.
Specific limitations may,of course,be imposed on the exercise of the power i or eminent domain under some circumstances. Sec Govt. Code § 37353(c)
(no existing golf course may be acquired by eminent domain for golf course
purposes). On the other hand, where a statute authorizes the acquisition of
property by rreans not specifically including eminent domain, such authoriza r- �+
Lion dues not preclude the use of eminent domain under this section. See Comment to Section 25350.5 (authority of county to condemn for count} �~
functions). [13 Cal-L.Rev.Comm. Reports 1287 (1975)].
Law Review Commentaries
Anticipating an instant replay, City of Oak-
land v.Oakland Raiders. (1984) 17 U.C.D.Law
'Lev. 963.
Library References `
Eminent Domain 9-9. Eminent domain law. 13 Cal.LRev.Comm.
CjS. Eminent Domain § 23. Reports 1001 (1975).
j
§ 37351. Property for municipal purposes; waterfront
The legislative body may purchase, lease, exchange, or receive such person- '=
al property and real estate situated inside or outside the city limits as is ?_
necessary or proper for municipal purposes. It may control, dispose of, and 1;
convey such property for the benefit of the city. The legislative body shall nott
705
}
c
R n
tl�
r
1•
§ 37351 CITY GOVEWMEh'T
Title 4 }
sell or convey any portion of a water front, except to the State for use as a
public beach or park,unless by a four-fifths vote of its members the legislative
body finds and determines that the water front to be sold or conveyed is not
suitable for use as a public beach or park.
i (Added by Stats.1949, c. 79. p. 155, §'1. Amended by Stats.1955, c. 1330. p. 2415, § 2;
Stats.1957, c. 1772, p. 3166, § 1.)
Historical Note
= The 1955 amendment authorized the ex- Stats.1909, c. 618. p. 937, § 1: Stats.1917,e.
change of property. 1 ti 796,p. 1663.§ 1; Stats.1927,e.283,p.502.§ 1: i
The 1957 amendment authorized the sale of Stats.1945, c. 857,p. 1568, § 1.
ys, waterfront property not suitable for use as a S�ts.1833, c. 44, p. 93, § 862.2, added Scats
t public beach or park. 1935, C.737,p. 2069, § 3,amended Stats.1947,
Derivation. 5kats.1883, c. 49, P. 253, § 764;a Stats.1889, c. 258, p. 391. § 5; Stats.1897, c. c. 320, p. $73, § 1.
s 136, p. 196. § 1; Stats.1901,c. 218.p. 656, § 1;
Stats.1905, c. 52. p. 45, § 1.
Cross References
Airports, alternative provisions for sale and lease, see § 37440 et seq.
;1' Leases, see § 37380 et seq.
Sale of buildings and sites, alternative provisions, see § 37420 et seq.
§ Tidelands, withholding from grant or sale, sce Const. Art. 10, § 3.
Law Review Commeniarles
Anticipating an instant replay: City of Oak- Municipal corporations: extraterritorial con-
land v.Oakland Raiders. (1984) 17 U.C.D.Law demnation. (1955) 3 U.C.L.A.Law R. 118.
Rev. 963.
Library References
. Municipal Corporations e;m223.
C.J.S. Municipal Corporations § 958 et seq.
%T-STLAW Electronic Research
`i See WESTIAW Electronic Research Guide following the Preface. !
s
Notes of Derislons
Acquisition of land 2 had the power to grant such portions of Its
Conveyances 3 pueblo lands as had not been set apart or
Leases, water front property 8 dedicated to common use or special purposes-
Power and control 1 Wheeler v.Hampson(1860) 16 C-291: Bart v.
Quieting title,water front property 10 Burnett (1860) 15 C.530.
i t Recovery of purchase price 6
A city having authority under § 862 of the
r ; Sales and conveyances 3 Municipal Corporation Act of 1883, as amend-
Water front property 9 ed in 1891 and 1897, to acquire, own. and
Title 3 operate street railways, telephone and ca
�i Use of property 4 telegraph lines, gas, and other works for Ilght sµ
Water front property 7-10 and heat.and to permit the laying of traclts for
In general 7
street railways 1n the public streets,has power -
jQum lases utia 10 to contract for a supply of electricity to be usp
' WeSales and conveyances 9 for any of such purposes; and.when It b�
contracted for a supply to be used by the teru'J
' of the contract in any way it should see fit.
disposed of to private citizens to use for Sol!. Power and control -
purpose whatever within the lirrtitj of the dfil. "
The ayuntamitnto.alcaldes,or other officers a subcontract to furnish a portion Of VjCh
i who at the time represented San Francisco,or supply to a company for the operation of a`R
i had succeeded to Its powers and obligations, street railroad to be constructed by the 0OP6`
j 706
vx'1-644/07
O
ni
CITY PROPERTY--GENERAL § LJ51
Div. 3 Note 2 tL
ny is not on its face ultra vires. Riverside&A. trust, with power to the trustees to sell the E
Ry. Co. v. City of Riverside (C.C.1902) 118 F. estate as they may deem advisable, is not in- ;
736. eluded. Smith v. Morse (1852) 2 C. 524.
Council of city of the fifth class was the The common council of San Francisco must
ultimate Judge,both under ordinance and star- exercise the functions imposed on them by
tire authorizing sale of personalty without bid, their charter, and have no power to delegate
to determine whether property was or was not them to others, and the power to sell granted
surplus and whether a sale made by city under to them does not include the power to make a
tither theory was or was not for common deed of trust, or place the property committed
benefit of city,and such authority could:not be to their custody in charge of others, for the
delegated to any other municipal office. Davis term of three years,with power to sell as they
V. City of Santa Ana (1952) 239 P.2d 656, 109 may deem advisable. Id.
C.A.2d 669. The so-called"legislative assembly of the dis-
Whether two-wav short wave radio was nec• trict of San Francisco" and the avuntan:iento
essary or proper appliance to be furnished city of San Francisco had no valid powers whereby
lwlice department was matter within city coun- the former could make a grant and the latter
cil's discretion, and, having been decided by confirm it. People ex rel. Board of State Har- rr '
such body, cannot be considered by court in bor Commissioners v. Central Wharf Joint E'
electors action to recover money expended for Stock Co. of San Francisco (1866) 1 C.U. 319.
labor and materials used in erection of radio.
Swanton v. Corby (1940) 100 P.2d 1077. 38 2. Acquisition of land
C.A.2d 227. A municipal corporation has no inherent
Stats.1869-70, p. 696, authorizing and em- power of.eminent domain and can exercise it,
Dowering the board in which the corporate if at all only'When expressly authorized by law.
authority of a city is vested to convey to a Harden v.Superior Court In and For Alameda
railroad company"not to exceed 5,000 acres of County(1955) 284 P.2d 9, 44 C.2d 630. o.
the land of the city, or such parcels thereof as Under provision of this section that legWa- z
thev may deem advisable,and upon such terms tive body of municipality may purchase real '
and conditions as thev may determine," did estate situated outside city limit necessary and
not create a mere ministerial duty, but vested proper for municipal purposes, word "pur-
in the board a discretion to determine what chase" did not expressly authorize city to take i
land within the limits named should be con- private property for off-street parking outside '.
veyed and upon what terms, and this discre- its boundaries by eminent domain proceed- i
tion the members of the board were required ings, court did nit have jurisdiction over such
to exercise purely in the interest of the city. proceedings, and writ of prohibition against 1
City of San Diego v. San Diego & LA.R. Co. them was issued. Id.
{1872)44 C. 106. A contract of a municipal corporation for ;
Under Stats.1851, p. 387, imposing certain the purchase of real estate, pursuant to power
:rusts upon the commissioners of the funded conferred is construed by the same laws as
debt of San Francisco, the commissioners are private contracts, and the rights and obli-
.be exclusive judges of the necessity for the gations of the parties will be adjudged en the
sale or lease of the property of the city held by same principles. Brown v. Sebastopol (1908) s
;hem in cruse, until the trust is finally closed; 96 P. 363, 153 C. 704.
and their action cannot be interfered with, nor The acquirement of lands for public parks :
their discretion be controlled,by the city or its
usignee,except upon the ground of fraud or a for children s playgrounds is within the power
of the municipal authorities of San Francisco.
gross abuse of discretion by the trustees. Ellis
v.Commissioners of Funded Debt cf San Fran- �`0 �' City and County of San Francisco
cisco(1869) 38 C. 629. (1904) 77 P. 1014, 144 C. 384.
An act authorizinga municipal corporation
An ayuntamiento, or town council, of San t p �~
Jose, had no power to mortgage the town's o enter into a contract with a party to supply
lands. Branham v.City of San Jose (1864) 24 the city with water and machinery, and con-
C 585 netting pipes for conducting the water,confers
no authority to purchase a site upon which to
The city of San Francisco had no power to erect the wateruorks. People ex rel. Green V.
authorize the commissioners of the old sinking McClintock (1872) 45 C. 11.
fund of 1850 to sell and convey lands. Hey- By following the procedure set forth in Pal. i
denfeldt v. Hitchcock (1860) 15 C. 514. C. § 4041.21(2) (repealed) a county board of .
Under a city charter giving power to resell supervisors might dispose of real property not
and dispose of real estate of the city for the needed by selling it to a city of the sixth class
benefit of the city the power to make a deed of located within the county,the city being autho-
707 i
E
§37351 CITY GOVERNMENT c
tF Note 2 Title 4
.li
1� rized to acquire such property by Municipal authority, and the warranty thereof is void. b
t, Corporations Act, §§ 850, 862.2 (repealed). 2 Findlay. City and County of San Francisco a
Ops.Atty.Gen. 472. (1859) 13 C. 534. a
Acts of city officers• in selling and conveying t:
3. Sales and conveyances
real tstatc, under a void ordinance, are made t•
The only way in which the city council could good by a recognition of the void ordinance,in h
authorize a sale was by the passage of a law an ordinance passed before performance of c
authorizing it, and the sale could not be vali- those acts,appropriating the proceeds of a sale C
dated and confirmed by the passage of a subse- authorized by the first ordinance. Holland v.
quent ordinance, making an appropriation of City of San Francisco (1857) 7 C. 361.
• the money realized from the sale, and accept- Under a city charter providing that the coon• u
ing the reports of the land commissioner and ctl shall have power to pass all necessary laws t
City treasurer in relation to such pproceeds. for the sale of city property, real estate can be
Grogan v. City of San Francisco (1861) 18 C. conveyed only in the manner prescribed. Id. 6
590; McCracken v. City of San Francisco
(I960) I6 C. 591. A sale of land in the city of San Francisco,
Where property of a city is sold under an by a portion of the board of commissioners of r.
:t funded debt. does not pass a legal title on the a
invalid ordinance, the purchasers may recover which ejectment can be maintained, and c
f, the money paid from the city, and are not though a majority may eon:rol, yet all must r.
P. prevented by the subsequent adoption of the meet and consult, or have notice of the meet•
ordinance providing for such sale. Pimental v. t'
City of San Francisco (1863) 21 C. 351. ing• that may attend they desire, and 1
general resolution passed by the whole board,, I
b Ratification by a city of an illegal public sale a year before, that they would sell all the city
of its property is in effect making a private property to pay its debts, will not give validity r
Z sale, and does not cure the illegality, where, to the sale of a particular lot subsequently
under the law,the sale could only be made in a made, in pursuance of a resolution adopted by a
public manner. Id. the board, when two of the five were absent. a
A grant by an alcalde in 1849 of pueblo lands Leonard v. Darlington (1856) 6 C. 123. t'
a
£i in San Francisco is not invalidated by the fact City of Los Angeles has power to convey land n
that the lot so granted by the alcalde was sold to trustees for burial purposes. Weissenbcrg V.
at auction by direction of the town council. Truman (1881) 7 P.C.L.J.710.
White v. Moses(1862) 21 C. 34. s:
Granting the municipal lands within the city ; Use of property b1•
of San Francisco to have been conveyed by the Fact that municipal plunge was constructed .
city to the fund commissioners,in trust for her at least in part from funds obtained by munici• I
creditors, and that the property was unalter• pality from federal government did not give all
t'
ably fixed by this disposition,yet the city Could Persons resident in the United States right to
grant the subject of the trust with the assent of use it. McClain v. City of South Pasadena
the legislature. subject only to the rights of (1957) 318 P.2d 199, 155 C.A.2d 423. S.
creditors or their trustees. and the grantee A municipal corporation may take and hold ?
_ would hold subject only to the trust, and the property for charitable uses. under a statute
city could not enjoin a sale by the grantee, or permitting"corporations" so to take and hold.
i inierfere with his use. or possession, until the In re Robinson's Estate (1833) 63 C. 620, 12 tl
enforcement of the trust was necessary. City F.C.LJ. 72. pr
i and County of San Francisco v. Biedeman w
( (1F61} 17 C. 443. Land belonging to the city of San Francisco. ai
which, pursuant to its charter of 1851. could
�. Where the commissioners of the city funded only be sold by it by the act and consent of the et
debt of San Francisco,being authorized to sell two boards of aldermen, may be reserved by
lard owned by the sinking fund, advertised the city, by resolution of the two boards. for ar
that they would take payment in the city scrip, school-purposes. Board of Education of City " cc
their action was authorized. People ex rel. and County of San Francisco v. Fowler(1861)
Dayis v. Middleton (I860) i4 C. 540. 19 C. 11. :r ee
qt
Where, in 1850, the alcalde was ordered by
the town council of San Francisco to grant a 5. Title yar
e
quantity of land in conformity with the survey In view of Civ.C. §§ 2229 (repealed), 2234 if
:�
of the town,as near as possible to the location (repealed), 2306. and the Municipal Corpora- µ pt
of certain other lots, this order did not direct tion Act. §§ 750, 764. subd. 2, transaction
the alcalde to grant land not belonging to the whereby board of trustees of a city, on pre- ;
city, and therefore his warranty deed of land tense of selling part of the eity's land for vale- M.
not belonging to the city is so far in excess of able consideration, conveyed title in fee to the ;:,;t la.
r
708
t 'G.�
Crn' PROPERTY--GENERAL § 373Y
Div. 3 Note 8 -
buyer,and,in lieu of payment of the consider- "Privileges in connection therewith" as used
ation took back as part of the same transaction in provision of the city charter of Santa Bar-
a limited conditional title, leaving the buyer bara prohibiting the conveyance or alienation ;
the fee in reversion,was void, no title passing of the title to real estate or water,water rights to the buyer by the trustees'deed to hint, and and"privileges in connection therewith"except t
his deed back conveying none to the city. City by a vote of the electors, relates under the '
of FL Bragg v. Brandon (1919) 182 P. 454, 41 doctrine of the "last antecedent," only to the +'
C.A.227, words immediately preceding, namely "water
The so-called"Ordinance No.481"was never rights." City of Santa Barbara v.Maher(1938) r
passel, and is a nullity; and all sales under it 77 P.2d 306, 25 CA 2d 325.
were invalid, and passed no title. Pimental v. Subsequent to March 26, 1851,oonfirming to
City v!San Francisco (1863)21 C. 351. the city of San Francisco certain beach and
water property,the legislature had no authori• f
6. R4eovery of purchase price ty to interfere with the disposition of such
Where a city sells property under an ordi• property by the city, or to confirm a contract
nonce:, and,'aftcr the money is in its treasury, of the city in reference thereto. Wood v. City
appropriates it to municipal purposes, the pur• of San Francisco(1854)4 C. 190,followed in 9
chaser may recover the amount from the city if C. 39.
{ no ti_le was conferred by the sale, providing 8. — Leases, water front property
the tppropriation was by valid ordinances. A lease by a city o_` water front privileges
Hero: v, City of San Francisco (1867) 33 C.
I34 drawn in cotxformity with Stats.1911, p. 1254 �- -
transferring t6 the el:y title to the lands in s
If t'ne treasurer of a municipal corporation question for harbor development purposes and f =•
receives money arising from the sale of city expressly providing for such leases,was a valid
property, which sale was void for want of exercise by the city of its powers and not
authority on the part of the city to make it this inconsistent with the purposes of the grant to o,•►
is the unauthorized act of the agent of the city, the city. City of Oakland v. Larue Wharf
and he alone is liable, and the purchaser can- Warehouse Co. (1918) 176 P. 361, 179 C. 207.
not rmover the money from the city. Id. ''• ''''�
Under Oakland city charter, the board of } •�-,�{�- .
i V%Tare city ordinance No.431, authorizing a public works may execute a lease of tidelands, f ,;
sale of city property, passed in December, title to which is vested In the city by statute. }` r. •.-•::,e ,
' 1853, was defective in not being passed by the Id. i ,�:,•.Y _.
vote of the maiority of the board of aldermen, Under Stats.1909, p. 420, § $62, subd. 2,giv
but was acted upon as valid and public land Ing cities of the sixth class power to purchase I Z•tV_,- ..;
sold-hereunder at public auction,the city took realty for municipal purposes, and convey the -
r the purchase money without consideration, same for the benefit of the city,provided"they
and must refund the same. Grogan v. City of shall not have power to conveyan portion cf
`• San Francisco (1861) 18 C. 590. e Y
t any water front," and empowering such cities
ti to improve the water front," such a city had r r"
7. Water front property—In general no power to lease to private persons a water - �'.••'=
Under the act of March 26, 1851,granting to front for private uses. People v. Banning Co.
the city certain beach and water lots, with the (1914) 138 P. 100, 166 C.630,affirmed 36 S.Q. •;*
tt prov-sion that the city shall pay to the state, 338, 240 U.S. 142, 60 LEd.569. -<
• with:n 25 days of their receipt, 25 per cent. or Under a lease by the city of Monterey of a
all honeys arising from any disposition of the small portion of its water front to a steamship
` ProP�rt Y• does not by this proviso make the company recited that such company should '4
�
estate of the city conditional,neither subject to erect a wharf thereon, and keep the same in z r;
.' any trust. so far as the property itself is con- good repair during the lease, that it could tol• E "_
r- cerxrrd, in favor of the state, and if there be lect wharfage and dockage,and that in case of _
any trust, is is only in one-fourth of the pro- its failure to keep said wharf in repair, or its
y..: ceed: which the city may receive, and nowise becoming unfit for use, and so continuing for
qual Res the absolute estate of the city for 99 90 days after notice by the city, the lease
f. Year,.nor the estate of a grantee from the city, should cease, and the order of the city autho-
""' and the proviso Is,in fact,only a covenant that rizing the lease stated that the company should '
If the city, from any disposition, realizes any not charge to exceed 50 cents per ton wharf-
procreds, she will pay the percentage, and If a age, there was nothing in the lease, or the
disp•sition be made without the receipt of order authorizing it, requiring such company " 1
moneys, no obligation arises In favor of the to permit the use of the wharf by others. Pa.
state. Wheeler v.Miller(1860) 16 C. 124; Hol- eific Coast SS.Co.v.Kimball(1896)46 P.275.
ladar v.Frisbie(1860) 15 C- 630. 114 C. 414. j -P
709 e�
I.
;i § 37351 CITY GOVERNME.W
+ ! Note 9 Title 4
9. ----Sides and conveyances, water front part of the land, at least, is essential to the
i property exercise of said authority. Id.
Stats.1861, 384. amending Stats.I854, p Corporation;.! P• g p• Under Municipal Ca oration Act of 1883,
184.§ 12.of the charter of the city of Oakland, § 862.2 as amended by Stats.1935, p. 2069 rt-
,[, the successor of the town of Oakland, by pealed,the city of Newport Beath may convey
!: words. "and the ordinances of the board of
to the State Park Commission certain lands
trustees of said town are hereby ratified and above ordinary high tide line to comply with
confirmed," under a title showing no purpose matching provisions of c. 1470 although the
to grant lands,did not thereby ratify and con- city is a city of the sixth class, notwithstanding
firm an ordinance that had been made by the Const. Art- 15. § 3, and such conveyance
trustees of said town,conveying the entire wa- should ordinarily be made by grant deed rath-
ter froth of the town, contrary to the provi- er than by quitclaim deed. 7 Ops.Atty.Gen.
sions of its chatter,as the,ordinary meaning of 334.
the word"ordinance"does not include a grant
of lands_ City of Oakland v. Oakland Water- Under Municipal Corporations Act, § 862.2
Front Co.(1897) 50 P. 277, 118 C. 160. (repealed) the City of Crescent City, a city of
5tats.1852, p. 180, §§ 1, 3, granting to the the sixth class, had no power to sell any par-
town of Oakland lands covered by the flux of lion of any waterfront granted to it by St 1857-
tides, bounding the town on three sides,"with 1868, p. 335. 1 Ops.Atty.Gen. 117.
a view to facilitate the construction of wharves and other improvements, ' ' ' provided that 10 - Quieting title,water front property
said lands shall be retained by said town as In actions by city and American Legion Posr
common property or disposed of for the pur• to quiet title to lands from the state against
s posts aforesaid," thereby give to the town au- adjoining littoral owners,defendants could not
thority that cannot be delegated; and hence a attack findings settling title as between the two
} conveyance by the town to an individual of all plaintiffs, on ground that conveyance to city
of said lands is void, though he may agree to violated statute. City of Newport Beach v.
1< construct wharves, etc., as the ownership of a Fager(1940) 102 P.2d 438, 39 C.A.2d 23.
a
§ 37352. Buildings for munlcipal purposes
The legislative body may erect and maintain buildings for municipal pur-
poses.
(Added by Stats.1949, e. 79. p. 155, § 1).
Historical Note
Derivation: Stats.1883, e. 49, p. 253. § 764; Stats.1883,c.49,p.93,§ $62.1.4,added Stats.
Stat3.1889, c. 258, p. 391. § 5; Stam.1897, c. 1935. C.737, P.2071. § 15.
{i 136, p. 196, § 1; Stats.1901,c.218,p.656,§ 1;
Stats.1905,c. 52.p. 45.5 1.
Stas.1909, c. 615, p. 937, § i; Stan-1917, c.
796,p. 1663,§ 1; Stats.1927,c.283.p.502,§ 1;
Stats.1945, C. 857, p. 1568, § 1.
Law Review Commentaries
Civic auditorium as public utility. (1933) 6 Municipal market as a public purpose of s
So.Cal.L.R. 165. municipal corporation. (1923) 11 C.L.R. 446.
Construction of town hall on land dedicated
to city as a "plaza", (1924) 12 C.L.R. 316.
a Library References
Municipal Corporations 4-221.
CJS. Municipal Corporations § 950 et seq.
L IVESTLIW Electronic Research
I i See WESTLIW Electronic Research Guide following the Preface.
i
Notes of Decisions
i `,
Auditorium or stadium 1 ]hospitals or medical facilities 2
nn=
710 :A
1Ir4.Y
1 ,
,
r Y ,
�'tUVERti'liEti-T CODE GOVERNMENT CODE J37101.2
pealed
PART 2. LEGISLATIVE BODY--
CHAPTER I. ORGAPIIZATION
Section
36820. Repealed. -
710ERS 136810. Meetlnp►; Quorum; adjournment; compelling attendance
MAL Notes of Dedilooa . Palitical P:aetices Commission law determined that troth.
1 Quote-�tt members had cowlict of interest on that issue and were Act
permitted to participate in any subsequent proceeding coo-
Two of five town council members who abstained from owning for ration of district; as of date that the vote was
rota On rrsolution of intention which Wdersed jurisdiction taken. neither had been disqualified because of coetP.itt of
non nonresidence to create assessment district could properly be Included as interest. Farweii v.Torn of I os Gatos(App.6 Diu.I99Q)
u
.nor; vacancy 1 Members making up qu"of wuneat.even thot,6h Fair 271 Cal.Rpu.825,222 C41.App.3d 111.
•gyp r.Teglia(APP• 1 1}at 1989)259 pl.Rper.263.
36820. Repealed by Stats.1990.C. 3.46 (S.B.1601). 4 1,fir.July 18, 1990.operative Jan. 1, 1991
:&LApp-3d 40L
sCLOCY epee aw.,aidencY ve to we 1{lstasleal attd Statutory Notes
dens gyp•p reasons.would be dettwd lea ti>r- The repealed section, added by SutsIM C. 346(&S.
-.,oaed defendant's siot to con n 1601),¢ 1,elf July 19.1"0.Ming for a special election
n rarvanto to test. of the City of]ancu in the A of was repealed by it, own teratt
hold the office o[:ouneilmatt or t+ct ref raised and it ry Ssa�,
at no sutMaatial 1, of is
d not be in tba public interest to gra,tt tare to sue 72
.tty.Gen. 63.may 31, 1989. C:iAPTER 2. ORI3N&NCES
36936. Vote required
Nara of Declaim rota; greliniaary tnolutioos Imptemefidng assortment din -
;apt as author_"ed by Section 3650�5�36504 Aasawmeot district:16ersatioa 2 trformationforformationproms were act resolutions for payment of ..
he13 On th(isE Ap each• money. Farrell v.Town of Loa Gatos{A pp 6 MOM)'s
•-ond Tuesday i11
hall be filled 211 t-al.Rptr.32J,'222 CaLApp.3d 711.this title,all elf:tire city offices hall
s (.,
City officers holding elective tatty office s .2.This section did not app lyd t%
to dutian of Intention to
day succeeding their election and Until their create wessment district which was passed with only two
.�,
eff.Feb.S. 1990.1 CHAPTER 3. GE\'EF.AL POWERS
1 37I01. Llcertses for revenue and regulation; sales and use taxes "
The legislative body may license, for revenue and regulation, and fix the license tax upon,
every kind of I&Wful business transacted In the city,including shows,exhibitions,and games. It may
provide fot collection of the license tax by suit or otherwise. If the legislative body levies a sales tax'
under the Authority Of this section,it may impose a Complementary tax at the same rate upon use or,
other consumption of tangible personal property. :
3. operative Jas+. 1, 1991 If the legisLtive body imposes a sales or Use tax, it shall d)so in the same•manner and use 0.0
b Seaes 1990.c Same tax baseiiis prescribed in Part 1.5(commencing wiLh Secton 7200)of Division 2 of the P.evenue
ta A1"4 a(1990,was added y St&"- by its and Taxatioa+.,C)de.
drd Tuesday "-,
.(S.S.1313),¢ 3.s.T.Feb.6.1�•god r" An le _Alive body includin the le ' lative body of a charter city, which itn ses's license
wn wens tax ursuanL to Au i,nsion al u n a ustness o rsUn withinan outside e e satire
s tazut rnon s a e e ta.t ao at a rneMura o tax air reflects t ro nano
o the tax -actm attva cam on wi in a tarn urts tction.
(Amended l iStats.I990, C. 357(A B.2779), 1.)
rtrtissi"n from ail regular City council• 1 37101 `Iril.1p�e�d by Stats.1982,a 601, 4 I.operative Jan. 1. 1989
LhoUt pe h,or she attended,his or her office u�• '
ular meeting MUM S.'.CITY PROPERTY
;arc}►. .. . . - ttent] tJtan•= t ' .
ounc`1 toeets tortthly or less f ! ii_ ARTICLE 1. ,GLNERAL
t�missi n from all re lar city council. Y
thovi'
nlI&-meetin 'r a or she attended his or her office Section
,can v. 37351.5.��of payments under financing agreements to lease or lease-purchase property.
• • • tlon$ or Chances Indicated bp.urt&rllne; deletions by asterisks • ' •
tde�ne-,deletions by asterisks- t'{
`. 29:
VIM-
t�
§ 37351.5 COVE&NWENt'T CODE
4 37351.5. Guarantee of payments under financing agreements to lease or lease-purchase prop-
erty
(a) Prior to the entering into agreement to finance die lease or lease-purchase of property through
the issuance of certificates of participation of lease revenue bonds,the legislative body of a City may
elect, by resolution, to guarantee payment under that financing agreement in accordance with the
following: , .
(1) A city that elects to participate under this section shall provide notice to the Controller of that
election, which notice shall include a schedule for the payments to be made by the city under that
financing agreement, and identify a trustee appointed by the city for the purposes of this section.
(2) In the event that,for any reason,the funds otherwise available to the city will not be sufficient
to make any payment under the financing agreement at the time that payment is required,the city
shall so notify the libnd trustee. The trustee shall im:nediate!y communicate that information to the
affected holders of certificates of participation or bondholders, and to the Controller.
(3) When the Controller receives notice from the trustee as described in paragraph(2),or the city
fails to make any payment under the financing agreement at the time that payment is required,the
Controller shall make an apportionment to the trustee in the amount of that required payment for
the purpose of making that payment The Controller shall make that payment only from moneys
credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to which that city
is entitled at that time under Chapter 5(commencing with Section 11001)of Part 5 of Division 2 of
the Revenue and Taxation Code, and shall thereupon reduce, by the amount of the payment, the
subsequent allocation or allocations to which the city would otherwise be entitled under that chapter.
(b) This section shall not be construed to obligate tt.e State of California to make any payment to a
city from the Motor Vehicle license Fee Account in the Transportation Tax Find in any amount or
pursuant to any particular allocation formula,or to make any other payment to a city.including,but
not limited to,any payment in satisfaction of any debt or liability incurred or guaranteed by a city in
accordance with this section.
(Added by Stat3.1990, c. 1177 (A.B.1375), 13, eff. Sept 24, 1990.1
137361. Historical landmarks, recreational facilities,places and objects having aesthetic value
United States Suprsma Court 2646.438 U.S. 104. 57 LEd.2d 631 [main volume)r-bear.
landmark lass, taking without compensation,see Penn in$ denied 99 S.CL 2:6. 439 L•.S. W. 59 LEd.2d 193.
Central Trwup. Co. v. City of New York. 1979, 98 S.CL
l$ 37364. Development of affordable housing for persons of low or moderate income; area,units
and affordability restrictions
I1 The Txgislature reaffirms its finding that the provision of housing for all Californians 4s a
concern of vital statewide importance. The Legislamn recognizes that real property of cities can be
utilized, in accordance with a city's best interests, to provide housing affordable to persons and
families of low or moderate income. Therefore,notwithstanding any provision of a city's charter,or
any other provision of law,whenever the legislative body of a city determines that any real property
or Interest therein owned or to be purchased by the city can be used to provide housing affordable to
persons and families of low or mo erate Income, as defined by Section 50093 of the Health and
Safety Code or as defined ty the United States Department of Housing and Urban Development or.
Its successors, and that this use is in the city's best interests, the city may sell, lease, exchange,
quitclaim, convey, or otherwise dispose of the real property or interest therein at leas than fair
market value or urcha_se an interest In the real empeto provide that affordable housing under
whatever terms an con :bons a city deems.best suited to the provision of such housing.
@b ,Fot less than 80 percent of the area of any parcel of property disposed of pursuant to this
section shall be used for development of housing.
•Not less than 40 percent of the total number of thoaP housing units developed on say parcel
pursuant to this section shall be affordable to houseF�olds whose incomes are Mal to or less
than 75 anent of the maximum income of lower inm—m--eTouseholds,an at least haLl of which she
be
a a a e to veryow income ouse o
(d1 Dwelling units produced for persons and fattulies of low or moderate income under this section
aha be restricted by reg2latory a ement to remain continually affordable to those persons and
families for the login est�Nasible time ut not less than 30 • ' ' years, pursuant to a method
prescribed by the city.ity. The re atary a ement shall contain a provision making the covenants
and conditions of the agreement binding upon successors in interest Of the housinK sponsor. The
Additions or changes Indicated by underline; deletions by asterisks • ' •
30
l G
CITY PROPERTY—GENERAL § 37351
Dlv. 3 ;--
Defendants in a suit to quiet title could not predecessors by the Van Ness ordinance; the
impeach the regularity of a deed to plaintiff by purpose of the act of 1970 being not to devest
the mayor of San Francisco under The authori. titles, but merely to provide for the lss',te of
-ty of Act March 24, 1870,Stats.1869-70.p.353, appropriate muniments of title. Id.
relating to the confirmation of land titles in
San Francisco,unless they showed that they or In an action against the city by its grantee to
their predecessors had become vested with the quiet title to land under a deed made in 1869, '_'-
title of the municipality before the date of the which recited that the officers who executed it f -
deed. San Francisco&F.Land Co.v.Hartung were authorized so to do by a vote of the 1 ,
(1902) 71 P. 337. 133 C. 223. inhabitants. such deed was admissible in evi-
Notwithstanding the mayor's deed, it was dence, though not attested'by defendant's cor•
still open to an opposing party in a suit to quiet porate seal. Gordon v. City of San Diego
title to show that title had passed to him or his (1894) 36 P. 18. 101 C. 522. 40 Am.S:.K 73. =;:
37350.5. Power of eminent domain
§ s
A city may acquire by eminent domain any property necessary to carry out ;
any of its powers or functions. i -
(Added '5y Stnts.1975. c. 1240. p. 3157, § 32, operative Juh, 1, 1976.) 1' }
Law Revision Commission Comment
1975 Addition t
i
Section 37350.5-supersedes the Errant of condemnation authority formerly 'p
container) in various subdivisions of Section 1238 of the Code of Civil Proce-
dure and supplements the specific grants of such authority contained in this f rnr
and other codes. E.g., Govt. Code § 37501 (public assembly or convention
halls); Sts. & Hays. Code § 4090(streets, walks,parking places). Its purpose
is to give a city adequate authority to carry out its municipal functions. Cf. .
Code Civ.Proc. § 1240.010 (authorization of eminent domain for any purpose I'-+
or function is a declaration that the purpose or function is a public use). The
powers and functions of a city may be determined by reference to a city
charter as well as to a statute.
Specific limitations may, of course,be imposed on the exercise of the power
of eminent domain under some circumstances. See Govt. Code § 37353(c)
(no existing golf course may be acquired by eminent domain for golf course
_.rd
purposes). On the other hand, where a statute authorizes the acquisition of
property by means not specifically including eminent domain, such authoriza- ,
tion does not preclude the use of eminent domain under this section. See
Commer,: to Section 25350.5 (authority of county to condemn for county
functions). 113 Cal.L..Rev.Comm. Reports 1287 (1975)).
Law Review Commentaries
Anticipating an instant replay: City of Oak-
land v.Oakland Raiders. (1984) 17 U.C.D.Law
Rev 963. S
Library References
Eminent Domain 4-9. Eminent domain law. 13 Cal.LRev.Comm. §
C.7.S. Eminent Comain § 23. Reports 1001 (1975).
§ 37351.:. Property for municipal purposes; waterfront i =
The legislative body may purchase, lease, exchange, or receive such person-
al property and real estate situated inside or outside the city limits as is }}
necessary or proper for municipal purposes. It may control, dispose of, and i•.
convey such property for the benefit of the city. The legislative body shall not
705
%tA�_ee/4�7
°
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- 1
i
§ 37351 CITY GOVERNMENT �
'`E• _ Title 4
' sell or convey any portion of a water front, except to the State for use as a
public beach or park, unless by a four-fifths vote of its members the legislative
body finds and determines that the water front to be sold or conveyed is not
° suitable for use as a public beach or park.
(Added by Stats.1949, c. 79, p. 155, §• 1. Amended by Stats.1955, c. 1330, p. 2415, § 2;
Stats.1957, c. 1772, p. 3166,
Historical Note
s, The 1955 amendment authorized the ex- Stats.1909, c. 618, p. 937, § 1; Stats.1917, c.
' change of property. 796,p. 1663,§ 1; Stats.1927,c.283,p.502,§ 1; i
v. The 1957 amendment authorized the sale of Stats.1945, c. 857, p. 1568, § 1.
waterfront property not suitable for use as a
public beach or park. Stats.1883, c. 49, p. 93, § 862.2, added Stats. 1
'
Derivation: Stats.1883, c. 49, p. 253, § 764; 1935, c. 737, p. 2069, § 3, amended Stats.1947,
Stats.1889, c. 258, p. 391, § 5; Stats.1897, c. c. 320, p. 873, § 1. I
136, p. 1.96, § 1; Stats.1901,c. 218, p. 656, § 1; !
Stats.1905, c. 52, p. 45, § 1.
is' Cross References !
Airports, alternative provisions for sale and lease, see § 37440 et seq.
Leases, see § 37380 et seq.
Sale of buildings and sites, aiternative provisions, see § 37420 et seq.
Tidelands, withholding from grant or sale, see Const. Art. 10, § 3.
Law Review Commentaries
Anticipating an instant replay: City of Oak- Municipal corporations: extraterritorial con-
land v.Oakland Raiders. (1984) 17 U.C.D.Law demnation. (1955) 3 U.C.L.A.Law R. 118.
Rev. 963.
a".:•E '`
_ Library References
.'• Municipal Corporations e-223.
C.J.S. Municipal Corporations § 958 et seq. ,.
WESTLAW Electronic Research
See WESTLAW Electronic Research Guide following the Preface.
sNotes of Decisions i
Acquisition of land 2 had the power to grant such portions.of its
° Conveyances 3 pueblo lands as had not been set apart or7.
Leases,.water front property 8 dedicated to common use or special purposes°
- Power and control 1 Wheeler v..Hampson (1860) 16 C.291; Hart V.
Quieting title, water front property 10 Burnett (1860) 1.5 C. 530.
® a Recoveryof
purchase price 6 A city having authority under § 862 of the 4;"
•• ° t; Sales and conveyances 3
Water front property 9 Municipal Corporation Act of 1883, as amend'
I Title 5 ed in 1891 and 1897, to acquire, own, and x '
operate street railways, telephone and
Use of property 4 telegraph lines, gas, and other works for light
Waterfront property 7-10 and heat,and to permit the laying of tracks for z"
: 4l; Leases 8' In general 7
S. >; street railways in the public streets,has power ., .
to contract for a supply of electricity to be used'
i i Quetng title 10
for any of such purposes; and,where it has sow ;.
Sales and conveyances 9 contracted for a supply to be used by the teraw''' y.
" 11 of the contract in any way it should se+e.fit,-- -----_ �'-
�,
disposed of to private citizens to use for aO ;•;v
1. Power and control purpose whatever within the.limits of the dry. >:
The ayuntamiento,alcaldes, or other officers a subcontract to furnish a portion of such
who at the time represented San Francisco, or supply to a company for the operation of pX` .I
had succeeded to its powers and obligations, street railroad to be constructed by the706
poi 0.+a�:�d.. -,= .E� �I`�r�•5•
e e:
' tITY PROPERTY—GENEK 351 Div. 3 Note 2
ny is not on its face ultra vires. Riverside&A. trust, with power to the trustees to sell the y.y
Ry. Co. v. City of Riverside (C.C.1902) 118 F. estate as they may deem advisable, is not in- yy
736. cluded. Smith v. Morse (1852) 2 C. 524.
Council of city of the fifth class was the The common council of San Francisco must
ultimate judge, both under ordinance and stat- exercise the functions imposed on them by •_
ute authorizing sale of personalty without bid, . -their charter, and have no power to delegate
to determine whether property was or was not them to others, and the powef io'•?sell granted ik
surplus and whether a sale made by city under to them does not include the power to make a `+
either theory was or was not for common deed of trust, or place the property committed
ae
benefit of city,and such authority could not be to their custody in charge of others, for the x • ` .`'
g
delegated to any other municipal office. Davis term of three years, with power to sell as they
v. City of Santa Ana (1952) 239 P.2d 656, 108 may deem advisable. Id. '
C.A.2d 669. The so-called"legislative assembly of the dis-
Whether two-way short wave radio was nec- trict of San Francisco" and the ayuntamiento17
1
essary or proper appliance to be furnished city of San Francisco had no valid powers whereby r "•a' ` 'e_
police department was matter within city coun- the former could make a grant and the latter f'� "• p
cil's discretion, and,.having been decided by. confirm it. People ex rel. Board of State Har-
such body, cannot be considered by court in bor Commissioners v. Central Wharf Joint
elector's action to recover money expended for Stock Co. of San Francisco (1866) 1 C.U. 319.
labor and materials used in erection of radio.
Swanton v. Corby (1940) 100 P.2d 1077, 38 2, Acquisition of land ='�
a`t�
C.A.2d 227. A municipal corporation'has no inherent r °
P g power of,•eminent domain and can exercise it,
Stats.1869-70, 696, authorizing and em- P ;,.s ° • .qr'�
powering the board in which the corporate if at all ohlyivhen expressly authorized by law. y.
P g
authority of a city is vested to convey to a Harden v. Superior Court In and For Alameda y:
railroad company"not to exceed 5,000 acres of County (1955) 284 P.2d 9, 44 C.2d 630. ',
the land of the city, or such parcels thereof as Under provision of this section that legisla- m
they may deem advisable,and upon such terms tive body of municipality may purchase real �t $
and conditions as they may determine," did estate situated outside city limit necessary and i.-
not create a mere ministerial.duty, but vested proper for municipal purposes, word "pur-
in the .board a discretion to determine what chase" did not expressly authorize city to take A°
land within the limits named should be con- private property for off-street parking outside
its boundaries by eminent domain proceed-
vexed and upon what terms, and this discre- '
f'=
tion the members of the board were required ings, court did not have jurisdiction over such
to exercise purely in the interest of the ciiy. proceedings, and writ of prohibition against
City of San Diego v. San Diego & L.A.R. Co. them was issued. Id. °,x >
(1872) 44 C. 106. A contract of a municipal corporation for
Under Stats.1851, p. 387, imposing certain the purchase of real estate, pursuant to power =:
trusts upon the commissioners of the funded conferred is construed by the same laws as
debt of San Francisco, the commissioners are private contracts, and the rights and obli- Ii•
the exclusive judges of the necessity for the gations of the parties will be adjudged on the •
sale or lease of the property of the city held by same principles. Brown v. Sebastopol (1908)
them in trust, until the trust is finally closed: 96 P. 363, 153 C. 704.
and their action cannot be interfered with, nor '
The acquirement of lands for public parks
their discretion be controlled, by the city or its for children's playgrounds is within the power !•,�F"
assignee, except upon the ground of fraud or a of the municipal authorities of San Francisco. R.
gross abuse of discretion by the trustees. Ellis Law v. City and County of San Francisco
v.Commissioners of Funded Debt of San Fran- (1904) 77 P. 1014, 144 C. 384. : '= "w ""
Cisco (1869) 38 C. 629. •:iv';�::•
An act authorizing a municipal corporationi::;z;,..r
Ar a sntamiento, or town council, of San
y tc enter into a contract with a party to supply
Jose, had no power to mortgage the town's
Pthe city with water and machinery, and con.
lands. Branham v. City of San Jose (1864) 24 necting pipes for conducting the water,confers r;=
C. 585. no authority to purchase a site upon which to
The city of San Francisco had no power to erect the waterworks. People ex rel. Green v.
authorize the commissioners of the old sinking McClintock (1872) 45 C. 11.
fund of 1850 to sell and convey lands. Hey-
By following the procedure set forth in Pol.
denfeldt v. Hitchcock (1860) 15 C. 514. C. § 4041.21(2) (repealed) a county board of
Under a city charter giving power to resell supervisors might dispose of real property not
and dispose of real estate of the city for the needed by selling it to a city of the sixth class
benefit of the city the power to make a deed of located within the county,the city being autho-
707
9
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IZZ
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°tvc�*+.•,},� ,¢-C+emmGs.y=e ,�... •:no- ..o eav�nn�e,st�sw'o,ga�pa�.wae.��'o -0 a..m� ot` °�&: �� .
-'.�®-- ..`«a a ?�' ..! '�(�m..®,sy .y...c�css ...,a.:T'� a�►6�•,dQ " � t: �
''�.,-e...`:c.n. , .•m°�6 .n.. S O m �°���, ®oe°A°� .:'.,e. c4S_Y.�.q ® .a' ,°`••, �2�ye
-a .s... w.-yau° .. u �•.'..� Dm «D.° :.c.: ,. ° O B>A a' -�°• .•b'cF,�Irt .e - ,'!° ��
'°$ ��:e=„ms�.;"�'-aa;'�.`-'�- ';� P�` _. °s,.�'.e-a •d. �Fw' •-� •.w;':
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§37351 CITY GOVERNMENT
Note 2 Title 4 T
rized to acquire such property by Municipal authority, and the warranty thereof is void. b
}' Corporations Act, §§ 850, 862.2 (repealed). 2 Findla v. City and County of San Francisco a
' O s Att Gen. 472. (1859 13 C. 534.
a P Y• ) a;
i Acts of city officers,in selling and conveying tl;
3. Sales and conveyances real estate, under a void ordinance, are made tr:
mot:, The only way in which the city council could good by a recognition of the void ordinance,in h'
fi
authorize a sale was by the passage of a law an ordinance passed before performance of o
authorizing it, and the sale could not be vali- those acts, appropriating the proceeds of a sale C
�a
dated and confirmed by the passage of a subse- authorized by the first ordinance. Holland v.
ct quent ordinance, making an appropriation of City of San Francisco (1857) 7 C. 361.
the money realized from the sale, and accept- Under a city charter providing that the coup- a
3: ing the reports of the !and commissioner and cil shall have power to ass all necessarylaws C'
rt city treasurer in relation to such proceeds. for the sale of city property, real estate can be
Grogan v. City of San Francisco (1861)-18 C. conveyed only in the manner prescribed. Id. 6..
Ai 590; McCracken v. City of San Francisco
(1860) 16 C. 591. A sale of by a portionl d in the t tv of San Francisco,
ofthe board commissioners
of commissnerof n'
Where property of a city is sold under an the funded debt, does not pass a legal title on
invalid ordinance, the purchasers may recover which ejectment can be maintained, and c;;
the money paid from the city, and are not though a majority may control, yet all must n
prevented by the subsequent adoption of the meet and consult, or have notice of the meet- tit
ordinance providing for such sale. Pimental v. ing, that they may attend if they desire, and a f
City of San Francisco (1863) 21 C. 351. general resolution passed by the whole board, 1•
Ratification by a city of an illegal public sale a year before, that they would sell all the city
of itsproperty is in effect making a privateproperty to a its debts, will not the validity g P pay g• Y r(•
sale, and does not cure the illegality, where, to the sale of a particular lot subsequently
under the law,the sale could only be made in a made, in pursuance of a resolution adopted by ai
P'
public manner. Id. the board, when two of the five were absent. is
A grant by an alcalde in 1849 of pueblo lands Leonard v. Darlington (1856) 6 C. 123. a
in San Francisco is not invalidated by the fact City of Los Angeles has power to convey land n,i
that the lot so granted by the alcalde was sold to trustees for burial purposes. Weissenberg v.
at auction by direction of the town council. Truman (1881) 7 P.C.L.J. 710.
White v. Moses (1862) 21 C. 34. s''•
Granting the municipal lands within the city 4. Use of property 1 f
of San Francisco to have been conveyed by the Fact that municipal plunge was constructed bit
city to the fund commissioners, in trust for her at least in part from funds obtained by munici- I
creditors, and that the property was unalter- pality from federal government did not give all
}, ably fixed by this disposition,yet the city could persons resident in the United States right to
grant the subject of the trust with the assent of use it. McClain v. City of South Pasadena S.
the legislature, subject only to the rights of (1957) 318 P.2d 199, 155 C.A.2d 423. "'
creditors or •their trustees, and the grantee A municipal corporation may take and hold 7.1
would hold subject only to the trust, and the property for charitable uses, under a statute
city could not enjoin a sale by the grantee, or permitting "corporations" so to take and hold.
interfere with his use, or possession, until the In re Robinson's Estate (1883) 63 C. 620, 12 tl�
enforcement of the trust was necessary. City P.C.L.J. 72. m pt
and County of San Francisco v. Biedeman
(1861) 17 C. 443. Land belonging to the city of San Francisco, ai
which, pursuant to its charter of 1851, could '
Where the commissioners of the city funded only be sold by it by the act and consent of the es:
debt of San Francisco,being authorized to sell two boards of aldermen, may be reserved by
land owned by the sinking fund, advertised the city, by resolution of the two boards, for alt..
that they would take payment in the city scrip, school purposes. Board of Education of City ce;
their action was authorized. People `r' "'!
and County of San Francisco v. Fowler(1861) ;:f.
ex rel.
cei
,• Davis v. Middleton (1860) L4 C. 540. 19 C. 11.
q d
` Where, in 1850, the alcalde was ordered by ye
the town council of San Francisco to grant a 5. Title an
quantity of land in conformity with the survey In view of Civ.C. §§ 2229 (repealed), 2234 if,
of the town, as near as possible to the location (repealed), 2306, and the Municipal Corpora i,,
of certain other lots, this order did not direct tion Act, §§ 750, 764, subd. 2, transaction P
dia
the alcalde to grant land not belonging to the whereby board of trustees of a city, on pre- ;''. :
city, and therefore his warranty deed of land tense of selling part of the city's land for valu st:
x not belonging to the city is so far in excess of able consideration, conveyed title in fee to the }, lay
708 =`
-`_C= PROPERTY—GENERAL § 37AT
Div. 3 Note a
buyer.and,in lieu of payment of the consider- "Privileges in connection therewith' as used
ation took back as pan of the same transaction in provision of the city charter of Santa Bar-
a limited conditional title, leaving the buyer bara prohibiting the conveyance or alienation ;
the fev in reversion,was void, no title passing of the title to real estate or water, water rights
to the buyer by the trustees' deed to hirr., and and"privileges in connection therewith"except ?
his deed back conveying Crone to the city. City by a vote of the electors, relates under the F
of Ft. Bragg v. Brandon (1919) 182 P. 454, 41 doctrine of the "last antecedent," only to the t'
C.A. 2 27. words immediately prtceding, namely "water y
The so-called"Ordinance No.481"was never rights." City of Santa Barbara v,Maher(1938)
77
passes_, and is a nullity; and all sales under it P.2d 306, 25 GA.2d 325. i
were invalid, and passed no title. Pimental v. Subsequent to March 26, 1851.oonfirming to
City of San Francisco (1863)21 C. 351. the city of San Francisco certain beach and
water property, the legislature had no authori•
6. -Recovery of purchase price ty to interfere with the disposition of such t .Y
{!'hare a city sells property under an ordi• Property by the city, or to confirm a contract
nance, and,'aher the money is in its treasury, of the city in reference thereto. Wood v. City
apprc-3riates it to municipal purposes, the pur• of San Francisco(1954)4 C. 190,followed in 9 "
chaser may recover the amount from the city if C. 39. '
no title was conferred by the sale, providing g• _ Leases, water front property
the appropriation was by valid ordinances. A lease by a city of water front privileges
Herzu v. City of San Francisco (1867) 33 C. drawn in cagformity with Stats.1911, p. 1254
134. transferringtb the ci: title to the lands in
If the treasurer of a municipal corporation y t '
P rpo question for harbor development purposes and t �,•,,�;. .
receives money arising from the sale of city expressly providing for such leases,was a valid
property, which sale was void for want of exercise by the city of its powers and not t arT47
authority on the pan of the city to make it,this inconsistent with the purposes of the grant to .�
is the unauthorized act of the agent of the city, tom' iX
t? } the city. City of Oakland v. Iarue Wharf & �
and lie alone is liable, and the purchaser can- Warehouse Co. (1918) 176 P. 361, 179 C. 207. '•" ':*`_
not recover the money from the city. Id. f � '
Under Oakland eit} charter. the board of
WI.ere city ordinance No. 481. authorizing a public works may execute a lease of tidelands.
sale of city property, passed in December, title to which is vested in the city by statute. r,-
1853, was defective in not being passed by the Id. ta' is
vote of the majority of the board of aldermen, Under Stats.1909, P. 420, § $62. subd. 2, giv-
but was acted upon as valid and public land Ing cities of the sixth class power to purchase
sold thereunder at public auction,the city took realty for municipal purposes, and convey the
the purchase money without consideration, same for the benefit of the city,provided"theyand must refund the same. Grogan v. City of shall not have power to convey any portion of San Francisco(1861) 18 C. 590. anv water front," and empowering such cities !� :
"to improve the water front," such a city had
7. Water front property--In general no power to lease to private persons a water
Under the act of March 26, 1851,granting to front for private uses. People v. Banning Co. t
the city certain beach and water lots, with the (1914) 138 P. 100. 166 C.630.affirmed 36 S.Ct.
prov:&ion that the city shall pay to the state, 338,240 U.S. 142. 60 LEd.569.
f• with:a 25 days of their receipt,25 per cent. of Under a lease by the city of Monterey of a :-
i
F all moneys arising from any disposition of the small portion of its water front to a steamship _
_ prop:rty, does not by this proviso make the company recited that such company should I �s
estan-of the city conditional neither subject to erect a wharf thereon, and keep the same In
any trust• so far as the property Itself is con• good repair during the lease, that it could col.
eerngd, in favor of the state, and if there be lest wharfage and dockage,and that in case o°
# any trust, it is only in one-fourth of the pro- its failure to keep said wharf in repair, or its
coed; which the chv may receive, and nowise becoming unfit for use, and so continuing for
' qualifies the absolute estate of the city for 99 90 days after notice by the city, the lease '
yea t,nor the estate of a grantee from the city. should cease, and the order of the city autho-
and:he proviso is,in fact,only a covenant that rizing the lease stated that the company should -
r•` If th:! city, from any disposition, realizes any not charge to exceed 50 cents per ton wharf- J'
_ procreds, she will pay the percentage, and if a age, there was nothing In the lease, or the
_ .
' . disP sition be made .&•iinout the receipt of order authorizing it, requiring such company
moneys. no obligation arises in favor of the to permit the use of the wharf by others. Pa-
Kate. Wheeler v.Roller(1860) 16 C. 124; Rol- cific Coast S.S.Co.v.Kimball(1896)46 P.275,
lada.r v. Frisbic(1860) 15 C. 630. 114 C. 414.
709
Aft' 4>
t
�i -
t
{if §37351 CITY GOVEWNMrNT
Note 9 Title 4
{{� 9. Sales and conveyances, water front part of the land, at least, is essential to the
1!j property exercise of said authority. Id.
iI[ Stats.186I. p. 384, amending S:ats.1854, p. Under Municipal Corporation Act of 1833,
134,§ 12.of the charter of the city of Oakland, § 862.2 as amended by Stats.1935, P. 2069 re.
;Es eke successor of the town of Oakland, by pealed,the city of Newport Beach may convey
words, "and the ordinances of the board of to the State Park Commission certain lands
trustees of said town are hereby ratified and above ordinary high tide line to comply with
ccnfirrned" under a title showing no purpose matching provisions of e. 1410 although the
to grant [ands,did not thereby ratify and con- city is a city of the sixth class, notwithstanding
firm an ordinance that had been made by the Cont. Art. 15, § 3, and such conveyance
trustees of said town,conveying the entire wa- should ordinarily be made by grant deed rath.
ter front of the town, contrary to the provi- er than by quitclaim deed. 7 Ops.Atty.Gen.
sions of its charter,as the ordinary meaning of 334
the.word"ordinance"does not include a grant
of lands. City of Oakland v. Oakland Water- Under Municipal Corporations Act, § 862.2
Front Co. (1897) 50 P. 277, 118 C. 160. (repealed) the City of Crescent City, a city of
Stats.1852, p. 180, §§ 1, 3, granting to the the sixth class, had no power to sell any por.
1 town of Oakland lands covered by the flux of lion of any waterfront granted to it by St.1867—
! tides, bounding the town on three sides,"with 1868, p,335. 1 Ops.Atty.Gen. 117.
a v;ew to facilitate the construction of wharves and other improvements. provided that
10. Quieting title, water front property
's ' •
said lands shall be retained by said town as In actions by city and American Legion Post
common property or disposed of for the pus• to quiet title to lands from the state against
i posas aforesaid," thereby give to the town au- adjoining [ittoral owners,defendants could not
{ r thority that cannot be delegated; and hence a attack findings settling title as between the two
[I C. conveyance by the town to an individual of all plaintiffs, on ground that conveyance to city
X of said lands is void, though he may agree to violated statute. City of Newport Beach Y.
construct wharves, etc.. as the ownership of a Fager(1940) 102 PId 438. 39 C.A.2d 23.
t
a § 37352. Buildings for municipal purposes
The legislative body may erect and maintain buildings for municipal pur-
pos-es.
(Added by Stats.1949, c. 79, p. 155, § 1).
Historical Tote
Derivation. Stats.1883, e. 49. P. 253. § 764; Stats.1883,e.49,P.93,§ 862.14,added Stats.
Stats.1889, c. 258, p. 391. § 5; Stats.1897, c. 1935,c. 737, P.2071, § 15.
136,p. I96.§ 1: Stats.1901,c.218. p. 656. § l;
Stats.1905, c. 52, p. 45, § J.
Stats.1909, c. 618, p. 937. § 1: Stats.19I7, c.
796,P. 1663.§ 1; Stats.I927,c.283.p.502.§ I;
Stats.1945, c. 857, p. 1568, § 1. ¢
s
Law Review Commentaries
Civic auditorium as public utility. (1913) 6 Municipal market as a public purpose of a i
So.Ca',L,.R. 165. municipal corporation. (1923) It C.L.R. 446.
Construction of town hall on land dedicated
to cit-1 as a "plaza'. (1924) 12 C.L.R. 316.
i�
library References -st
Municipal Corporations 4?221.
CJ.S. Municipal Corporations § 950 et seq. ,=
UT.STLAti1i Electronic Research
t = See WESTLAW Electronic Research Guide following the Preface.
Totes of Decisions �r
Auditorium or stadium 1 flospltals or medical facilities 2
710 �,
• - a��'tir
„w
GOVERN tE:�'T CODE GOVER.YIi.UT.CODE 9 371011
Repealed
PART 2.- LEGISLATIVE BODY-
1' 9 CHAPTER 1. ORGANIZATION
Section
. 86820. Repealed. - ..
EICERS 4 36810. Meetings; quorum; adfourriment; compelling attendance
MAL Noun of D«istoa . Political Prisakes Commission liar detamined tbst bath
member bad conflict of interest as that issus And were eon
Two of five town oounal members who abstained from �°eta( to pArtieip di in any rubAequeet at the
on.
caning fatsaation of district; u of date that the rote was
vote on resolution of iountion which conferred jurisdiction taken. notber bad been disqualified because of conflict of
upon nonresidence to create asseas,nmt di.ttriet could properly be included as interest wn Farwell V.To of Loa-f3atos(App.6 Dist1990)
trio'. raCaneY members making up qugrum of cou=L even though Fair 271 GI.Rptr. 925,222 Cal.App-3d 711.
tame+.7cgliA(M'P• 1 D-u0939)15L WR9tr.1ti5. .. .
¢ 36820. Repealed by Stala.1990.e. 346 (S.B.1601), 4 1,Of.July IS, 1990, operative Jan. 1, 1991
:a1.ApP•3d 402_
larrney epon roesr a ka a to f4C Hlstwkd sad Staratorf Notes
'!ana grcep.as telatasa would be denied t to ooatin The repined section.added by 5tau.19% e. W(3.B.
defendant'arigh 1601).1 1.dt July 11,1990.providing for s special election
,Q«ammo to use? of to City of L—c”er.
hold the�a of roan rsi
.a and it in the City of Sangex, was repealed by its ow tams.
t 00 sutetaeliAl{slue of 1a«a foes«a „ -
A cot be in the putLkinterest to grans leave t0 sun 7Y
\ny.GeO.63, May 31. 19b9. CHAPTER 2. ORDIN . CES
4 36938. Vote required =
'Notre of Deedalaw wax; preliminary resolutions 1m-,msmtmj wse wn=t des,
au by Section 3
Cept as
6503.5, 36504 Assamsest dlahics Ihrmdon 2 trice formaLon process were not resolutions for payment of
held on th�second'ihtesday in April in each money. Fared v.Town of Los Gatoo(AM 6 Diati990) r
• all elective city office!shall be filled ;" 271 Ca1.Rptr.225.1n t aLApp.3d 711.
this citl•., elective city office shall t Aaseesm:.e tl.atct ford.. 4:
City officers 1:]lding TSiA swtim did trot apply to resolution of Intention to
day S1tCCeedln� their election and until their- create awasament dhttict whkb was passed with only two :y
(S.H.1315). 1 2, eff.Feb,6, 199a•1 CHAPTER 3. GENERAL PORTERS :
1 37I01. License for revenue and regulation; sales and use taxes '
The legislative body may license, for revenue end te�^ilatioa, and fix the license tax uptln,
every kind of Iawful business transacted in the city,including shows,exhibitions,and games. It may
Provide for collection of the lice-toe tax by attft or otherwise. I:the legislative body levies a saes tax
under the sutheritg of tints section,it may impose a car.�plementary tax at the Same rate upon use or,
other consurriptioa of tangible personal property. '
,ti t-.:•:
4 3,operative Jatt. 1. 1991 If the leg ligve body imposes a sale&or use tax, it Shall do so in the same-manner and use the
same tax baedaa Prescribed in Part 1.5(commencing with Secton 7200)of Division 2 of the Revenue
isd Tuesc�Y in AT il of 1990.was added by 3tats.1990.a and TaxadodY0de. :
repealed by its , .
(S.B.13153.; 3.ei�Feb'G.tom'and
wa An �le Iative body includin the le lative bat of a charter city which im see a license
xn terms- tax ursuiL su ivtsion a) u n a untness o rsam wt in an canon e e atyve
s tfoEm action shati levy the tax so that the measum of tax fairly reflects thLt Proporwrt
• of the tax a[tnn actua V carried on within the tax:n urea iction. _
(Amended Wtsta.1990, C. 35" (A.B.2779), 4 1.)
tar city council. ; 37101If
P4a1� by 5tata.1982.a 601. 1,operative Jan. 1, 1989
hoot pertitisaios from all regu
slaw meeting he or she attended,htS or her office
CIL YMR S.'CITY PROPERTY
,uncil meets hout� r n �'m alllreg f send than `• ARTICLE 1. .GJERAL
h�or she attended hiss or her cities
slaw meeUn Settfoa
, law 37351.5 ��of Payments under financing agreements to lease or lease-purchase property.
��1d"ona or changes indicated by-.us2dertlne; deletions by asterisks • • •
designs;•deleUvns by astetiaka ' ' '
�r 29-
§ 37351.5 GOVER."MEN'T CODE
37351.5. Guarantee of payments under financing agreements to lease or]ewe-purchase prop-
erty
(a) Prior to the entering into agreement to finance the lease or lease-purchase of property through
the issuance of certificates of participation of lease revenue bonds,the legislative body of a city may
elect, by resolution, to guarantee payment under that fmancing agreement in accordance sith-the-
following: ,
(1) A city that elects to participate under this section shall provide notice to the Controller of that
election, which notice shall in:lude a schedule for the payments to be made by the city under that
financing agreement, and identify a trustee appointed by the city for the purposes of this section.
(2) In the event that,for any reason,the funds otherwise available to the city wn11 not be sufficient
to make any payment under the financing agreement at the time that payment is required,the city
shall so notify the Send.trustee. The trustee shall immediately communicate that information to the
affected holders of certifica-es of participation or bondholders, and to the Controller.
(3) When the Controller receives notice from the trustee as described in paragraph(2).or the city
fails to make any payment under the financing agreement at the time that payment Is required,the
Controller shall make an apportionment to the trustee in the amount of that required payment for
the purpose of making that payment The Controller shall make that payment only from moneys
credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to which that city
is entitled at that time under Chapter 5(commencing with.Section 11001)of Part 5 of Division 2 of
the Revenue and Taxation Code, and shall thereupcn reduce, by ee amount of the payment, the
subsequent allocation or allocations to which the city would otherwise be entitled under that chapter.
(b) This section shall not be construed to obligate the State of California to make any payment to a
city from the Motor Vehicle license Fee Account in the Transportation Tax Fund in any amount or
pursuant to any particular allocation formula,or to make any other payment to a city,including,but
not limited to,any payment in satisfaction of any debt or liability incurred or g•,raranteed by a city in
accordance with this section.
(Added by Stats.1990, c. 1177 W11.1375), 13, eff. Sept. 24, 1990.1
¢ 37361. historical landmarks,recreational facilities.places and objects having aesthetic value
United States Supreme Court 2S".438 V.S. 104.57 LEd.2d 631 (main vaiumel rehear•
Landmark taws. taking without cornpensation, we Penn ins denied 99 S.CL 2:6. 439 U.S. 893. SS L.F.d•2d 191.
Central Tramp. Co. v. pry of New York. 1979. 99 S.Ct.
5 37364. Development of affordable housing for persons of low or moderate income: area.units
and affordability restrictions
The Legislature reaffirms its finding that the provision of housing for all Californians is a
concern of vital statewide importance. The Legislature recognizes that real proper:;of cites can b--
utilized, in accordance with a city's best Interests, to provide housing affordable to persons and
families of low or moderate Income. Therefore,notwithstanding any provision of a city's charter,-or
any other provision of law,whenever the legislative body of a city determines that any real property
or interest therein owned or to be purchased by the city can be used to provide housing affordable to
persons and families of low or moderate income, as defined by Section SM93 of-the Health and
Safety Code or as defined by the United States Department of Housing and Urban Development or.
its successors, and that this use is in the city's best interests, the city may sell, lease, exchange,
quitclaim, convey, or otherwise dispose of the real property or interest therein at less than.fair
market value re or purchase an interest in the al propeM to provide that affordable housing under
whatever terms and con -lions the city eems.best suitA to the provision of such housing.
Q� Not less than 80 percent of the area of any parcel of property disposed of bursuant to this
section shall be used for development of housing.
Not less than 40 percent of the total number of thos.) housing units developed on any'parcel
pursuant to this section shall be affordable to houseFTalds whose incomes are equal to or less
than 75 ereent of the maximum income of lower income cure o s sn at east o write antiil
be affordable to ve low income households.
(d) Dwelling units produces for persons and families of)ow or moderate income under this section
shall be restricted by re l_a�tor r Rjrreement to remain continually affordable to those persons and
families for the longest feasible time ut not less than 30 ' ' ' years, pursuant to a method
prescribed by the city. 71,e regulatog &K=ment shall contain a provision making.the covenants
and conditions of the a -ment binding upon successors in interest of the housing sponsor. Tge
Addltlons or changes Indicated by underline: deletions by asterisks
y� 30
The Pknnfng and Zoning law
transportation agencies or other entities for the preparation of project studies reports for
projects specified in subdivision(b)of Section 65081 when the r+eportcannotbecompleted
so as to allow a project to be eligible for inclusion in the upcoming state transportation
improvement program.Wheneverproject studies reports are performed by an entity other
than theDepartmentofTransportation.the&-pounentshaUreview andapprov_ethereport.
(Added by Siats.1987.Ch.878.)
Chapter 2.7.Public Hearings
(Chapter 2.7 added by Sw.1984,CIL 1009.)
65"0. (a) en a provision of this title reluin;s notice of a public hearing to be given Notice of hearing
p t to this section,notice shall be published pursuant to S ection 6061 in at least one
wspapa of general circulation within the jurisdiction of the local agency which is
conducting the proceeding at feast 10 days prior to the bearing.or if there is no such
newspaper of general circulation,the notice shall be posted arieast 10 days prior to the
hearing in at least three public places within the jruisdiction of the local agency.
(b)The notice shall include the information specified in Section 65M. -
(c)In addition to the notice required by this section.a bcal agency may give notice of
the hearing in any other manner it deem necessary or desirable.
(Added by Stats.1984,Ch.1009.)
65091.(a)When a provision of this title requires notice of a public hearing to be given Notification procedures
pursuant to this section,notice shall be given in all of the following ways:
(1)Notice of the hearing shall be mailed or delivered at least 10 days priorto the hearing
to the owner of the subject real property or the owner's duly authorized agent,and to the
project applicant.
(2)Notice of the hearing shall be mailledor delivered atleast 10 days prior to thebearing
4 to each local agency expected to provide water,sewage,streets.wads,schools,or other
essential facilities or services to the project.whose ability to provide those facilities and
`-' services may be significantly affected.
(3)Notice of the hearing shall be maned or delivered atleast 10 days prior to the hearing
to all owners of real property as shown on the latest equalized assessment roll within 300
feat of the real property that is the subject of the hearing.In lieu of utilizing the assessment
roil,the local agency may utilize records of the county assessor or tax collector which
contain more recent infortnadon than the assessmentroll.If the numberof owners to whom
notice would be mailed or delivered pursuant to this paragraph or paragraph(1)is greater
than 1,000,a local agency.in lieu of mailed or delivered notice,may provide notice by
placing a display advettisem:nt of at least one-eighth parr.in at least one newspaper of
general circulation within the local agency in which the proceeding is conducted at feast
10 days prior to the hearing.
(4)If the notice is mailed or delivered pursuant to paragraph(3).the notice shall also
either be:
(A)Published pursuant to Section 6061 in at least one newspaper of general circulation
within the local agency which is conducting the proceeding at least 10 days prior to the
hearing.
(B)Posted at least 10 days prior to the hearing In at least three public places within the
boundaries of the local agency.including one public place Li the are directly affected by .
the proceeding.
(b)'IUe notice shall include,the information specified in Section 65094.
(c)In addition to the notice required by chit section.a local agency may give notice of
the hearing in any other manger it doems necessary or desirable.
(Added by Stau.1984,Ch.1009.Amended by Sfats.1W.Ch.1199.)
65092.When a provision of this title requires notice of a public hearing to be given ptrsuant Request for notification
��• to Section 65090 or65091.the notice shall alsobe mailed ordelivered atleast 10 days prior
to the hearing to any person who has Mod a written request foe notice with either the cleric
of the governingbodyorwith any otherpemm de4natedby the govaning body to receive
these requests.The focal agency may charge a fee which Is reasonably related to the costs
21
RECORDING REQUESTED BY AND )
WHEN RECORDED RETURN TO AND )
MAIL TAX STATEMENTS TO: )
Robert J. Koury
240 Main Street, 2nd Floor '3 )
Huntington Beach, California -92648 )
(Space Above Line For Recorder's Use)
AGENCY GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged,
The REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic, of the State of California, herein called "Grantor"
acting to carry out the Redevelopment Plan, herein called "Redevelopment Plan"
for the Main Pier Redevelopment Project, herein called "Project", under the
Community Redevelopment Law of California, hereby grants to ROBERT J. KOURY,
herein called "Grantee", the real property hereinafter referred to as
"Property", described in Exhibit A attached hereto and incorporated herein,
subject to the existing easements, restrictions and covenants of record
described therein.
1. Said Property is conveyed in accordance with and subject to the
Redevelopment Plan which was approved and adopted by Ordinance No. 2634 of the
City Council of the City of Huntington Beach, and a Owner Participation
Agreement entered into between Grantor and the Grantee, dated December 29,
1988 (the "OPA"), a copy of which is on file with the Grantor at its offices
as a public record and which is incorporated herein by reference.
2. The Property is conveyed to grantee at a purchase price, herein
.called "Purchase Price", determined in accordance with the uses permitted.
Therefore, Grantee hereby covenants and agrees for itself, its successors, its
assigns, and every successor in interest to the Property that the Grantee,
such successors and such assigns, shall develop, maintain, and use the
Property only as follows:
(a) Grantee shall develop the Property as required by the OPA, and
with parking conforming to the requirerents of the Huntington Beach City Code.
(b) Grantee shall maintain the improvements on the Property and
shall keep the Property free from any accumulation of debris or waste
materials.
3. The Grantee agrees for itself and any successor in interest not to
discriminate upon the basis of race, color, creed or national origin in the
sale, lease, or rental or in the use or occupancy of the Property hereby
conveyed or any part thereof. Grantee covenants by and for itself, its
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 race, color, creed, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the Property, nor shall .the Grantee itself or any person 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, sub-tenants, sublessees, or
vendees in the Property. The foregoing covenants shall run With the land.
4. All covenants Without regard to technical classification or
designation shall be binding for the benefit of the Grantor, and such
covenants shall run in favor of the Grantor for the entire period during which
such covenants shall be in force and effect, without regard to whether the
Grantor is or remains an owner of any land or interest therein to which such
covenants relate. The Grantor, in the event of any breach of any such
covenants, shall have the right to exercise all the rights and remedies and to
maintain any actions at law or suits in equity or other proper proceedings to
enforce the curing of such breach.
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to
be executed on their behalf by their respective officers hereunto duly
authorized, this day of 1991.
REDEVELOPMENT AGENCY OF THE CITY OF
HuN
T 3�GTOTi�
Chairman
ATTEST:
1 0"Z"D 1-S TO F0:11:.
f GLIL I;l;;ON
Gay(/ Cl� �:;:v_ 'L'Y
�ttorZey
The Grantee consents to the foregoing
covenants
ROBERT J. KOURY
05/24/91
9716r/2460/18 -2-
�HIEIT AA
Leg4l Descintion o , the PrQperty
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS:
PARCEL 1:
UNIT B, AS SHOWN ON THE CCNDOMINIUM PLAN (THE "PLAN") RECORDED APRIL 10, 1991
AS INSTRUMENT NO. 91-168227 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA.
PARCEL 2:
AN UNDIVIDED FIFTY PERCENT (50%) INTEREST IN AND TO THAT PORTION OF LOT 1 OF
TRACT NO. 14133, AS SHOWN ON A MAP RECORDED IN BOOK 674, PAGES 46, 47 AND 48
OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, DEFINED AS
"COMMON AREA" IN THE PLAN AND IN THE DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS FOR MAIN PIER PARKING FACILITY ("CC&R'S") RECORDED APRIL 10, 1991
AS INSTRUMENT NO. 91-168226 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA.
PARCEL 3: (FOR UNIT B)
THE EXCLUSIVE RIGHT TO USE THE APPURTENANT EXCLUSIVE USE C=MON AREA SET ASIDE
AND ALLOCATED FOR THE EXCLUSIVE USE OF THE OWNER OF THE CONDOMINIUM DESCRIBED
IN PARCEL 1 ABOVE, AS DESCRIBED IN THE CCLR`S AND AS SHOWN CN THE PLAN.
05/24/91
9716r/2460/018 Exhibit A
STATE OF CALIFORNIA )
} ss.
COUNTY OF ORANGE )
On this C3 0 My of 1991 before me the unde signed, a
Notary Public in and for said S te, personally appeared���-u-� _ ,
known to me Coz-pr•aved-te-me-on--the-lYazi-j--of--satisfactory-evidenced-.to be the
person who executed this instrument as the Chairman of the Redevelopment
Agency of the City of Huntington Beach and acknowledged to me that the
Redevelopment Agency of the City of Huntington Beach executed it.
WITNESS my hand and official seal.
OMCIAtSM
LINDA S. PATYIIrSOH •�yr>�
,•
OT+pVauC-CAtCMe Signature of Notary Pub lic
CWG,- cauNTY
(SEAL) W'COMM. EXP. OCT. 8 1994
STATE OF CALIFORNIL )
S5.
COUNTY OF ORANGE }
On 1991 before me, the undersigned, a Notary Public
in and for said State, personally appeared ROBERT L. KOURY, personally known
to me or proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged that he
executed the same.
WITNESS my hand and official seal.
Signature of Notary Public
(SEAL)
05/24/91
9716r/2460/18 -3-
CITY OF HUNTIFIGTON BEACH
INTER-DEPARTMENT COMMUNICATION
Hi..Nr Gfom if4CH
To Honorable Mayor From Connie Brockway
and City Councilmembers City Clerk
Subject November 5, 1991 Election Date Date July 18, 199I
Consolidation with the County
The City can consolidate an election with the Uniform District Election of the County on
November 5, 1991. Argument material can be Faxed to the county election department as
it is received. In the event the Council should want to call an election on July 29, 1991 it
is technically possible.
Please call me should you have questions - 536-5404.
CC: City Administrator
0994K
CITY OF HUNTINGTON BEACH
CITY CHARTER
Section 612. PUBLIC UTILITIES AND PARKS AND BEACHES.
(a) No public utility or park or beach or portion thereof now or
hereafter owned or operated by the City shall be sold, leased, exchanged or
otherwise transferred or disposed of unless authorized by the affirmative
votes of at least a majority of the total membership of the City Council and
by the affirmative vote of at least a majority of the electors voting on such*
proposition at a general or special election at which such proposition is
submitted.
(b) No golf course, driving range, road, building over three thousand
square feet in floor area nor structure costing more than $100,000.00 may be
built on or in any park or beach or portion thereof now or hereafter owned or
operated by the City unless authorized by the affirmative votes of at least a
majority of the total membership of the City Council and by the affirmative
vote of at least a majority of the electors voting on such proposition at a
general or special election at which such`proposition is submitted.
(c) Section 612(a) and 612(b) shall not apply;
(1 ) to libraries or piers;
(2) to any lease, franchise, concession agreement or other contract
where; '
the contract is to perform an act or provide a service in a
public park or beach AND
-- such act was being performed or service provided at the
same location prior to January 1 , 1989 AND
the proposed lease, franchise, concession agreement or
other contract would not increase the amount of parkland or
beach dedicated to or used by the party performing such act
or providing such service.
(d) If any section, subsection, pert, subpart, paragraph, clause or
phrase of this amendment, or any amendment or revision of this amendment, is
for any reason held to be invalid or unconstitutional . the remaining sections,
subsections, parts, subparts, paragraphs, clauses or phrases shall not be
affected but shall remain in full force and effect.
(Charter Amendment -12/7/90)
r
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
The above statement is an impartial analysis of Proposition
The full text of Proposition is the ballot title and summary.
as shown on the sample ballot which is included in this pamphlet.
i
Mlophone:7 MS36.52271
MIC-E-OF MINT PUELTC HEARING
OF,THE_CLTY COUNCILIRLPEVELOMENT AGENCY
MAIN-PIER REDEVELOPMENT PROJECT AREA
FIRST_AMENDED FIERS),pE LEASE AGREEMENT
(PIERSIDE RESTAURANTS)
On Monday, July 15, at 7:00 PM, or as soon thereafter as the matter maybe heard, in the
City Council Chambers, Huntington Beach City Hall located at 200d Main Street,
Huntington Beach, California, the City Council of the City of Huntington Beach and the
Redevelopment Agency ("Agency") of the City of Huntington Beach, will hold a joint
public hearing to consider the leases of certain real property (as described below), between
the City of Huntington Beach and the Redevelopment Agency and a Sublease to Stanley
Bloom, in the form of a proposed First Amended Pierside Lease Agreement for the project
known as Pierside Restaurants by and between the Redevelopment Agency and Stanley M.
Bloom. This certain real property is located within the Main-Pier Redevelopment Project
Area on the west side of Pacific Coast Highway, between First and Main Streets, (Legal
Description on file in the City Clerk's office). The proposed Agreement and financial
report required by California Health & Safety Code Section 33433 are available for public
inspection at the office of the City Cler�t 2000 Main Street, Huntington Beach,
California. Further information concerning this matter may also be obtained by
contacting Keith Bohr, Project Manager at (714) 374-1529.
By: Connie Brockway
City Clerk/Redevelopment Agency Clerk
City of Huntington Beach
.�-7
Publish: June, July 1, & 8, 1991
S541r
i
RECEIVED
CITY CLERK
SUMMARY REPORT PURSUANT TO CITY OF
CALIF.
SECTION 33433 If
CALIFORNIA COMMUNITYhREDEVELOPMENT LAB' j`�" �� `� 03 �t1 is
on a
LEASE AGREEMENT
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
and
STANLEY H. BLOOM, AN INDIVIDUAL
I. INTRODUCTION
The California Health and Safety Code, Section 33433 , provides that
if a redevelopment agency wishes to sell or lease property to which
it holds title and if that property was acquired in whole or in
part with tax increment funds, the agency must first secure ap-
proval of the proposed sale or lease agreement from its local
legislative body (City Council) after a public hearing. A copy of
the proposed sale or lease agreement and a summary report that
describes and contains specific financing elements of the proposed
transaction shall be available for public inspection prior to the
public hearing. As contained in the Code, the following informa-
tion shall be included in the summary report:
1. The cost of the agreement to the agency, including land
acquisition costs, clearance costs, relocation costs, the
costs of any improvements to be provided by the agency,
plus the expected interest on any loans or bonds to
finance the agreements;
2. The estimated value of the interest to be conveyed or
leased, determined at the highest uses permitted under
the plan; and
3 . The purchase price or sum of the lease payments which the
lessee will be required to make during the term of the
lease. If the sale price or total rental amount is less
than the fair market value of the interest to be conveyed
or leased, determined at the highest and best use consis-
tent with the redevelopment plan, then the agency shall
provide as part of the summary an explanation of the
reasons for the difference.
This report outlines the salient parts of the Pierside Lease Agree-
ment (the "Agreement") which provides for the leasing of property
owned by the Redevelopment Agency of the City of Huntington Beach
("Agency") to Stanley M. Bloom ("Developer") for the purpose of
constructing a restaurant development.
1
l 1 l i
This report is based upon information contained in a proposed Lease
Agreement and is organized into the following four sections:
I. DescCiption_ of the Proposed Agreement - This section in-
cludes a. description of the site and interests to be
leased, the proposed development and the major respon-
sibilities of the Agency and the Developer.
2. cost of the Agreement to the Agency - This section out-
lines the Cost of the Agreement to the Agency. In addi-
tion, it discusses the ground lease payments to be paid
by the Developer to the Agency, provides a projection of
tax increment revenues resulting from the new development
and sets forth the net cost of the Agreement to the
Agency. The net cost to the Agency equals Agency expen-
ditures ninus the present value of the lease payments and
the value of the tax increment generated by the new
development, plus any other resources pledged to the pay-
ment of related expenses.
3 . Estinated Value of the Interests to be Leased - This
section summarizes the Agency appraisal of the value of
the parcel to be leased to the Developer.
4 . purchase Price and Reasons Therefore - This section
describes the purchase price, which is equal to the
present value of the anticipated lease payments, to be
paid by the Developer to the Agency. It also contains a
comparison of the purchase price (lease value) and the
fair market value at the highest and best use consistent
with the Downtown Specific Plan 10 for the interests con-
veyed.
IX. DESCRIPTION OF THE PROPOSED AGREEMENT
A. ,Site and Interest to be Leased
The site consists of 3 . 5 acres of land immediately south of the
Ifuntington Beach Pier, on the ocean side of the Pacific Coast High-
way. Currently, the site is improved with a 17, 800 square foot
commercial structure with miscellaneous retail on the first level,
"Maxwell's" Restaurant on the second level, a freestanding struc-
ture containing "Dwight's" hamburger stand, and a public parking
lot.
B. The Proposed Duelopment
The proposed development for the site is a 48,522 square foot res-
taurant complex. The restaurants will be built on an elevated deck
with up to 611 structured parking spaces provided. Public access
to the beach will be provided by two central staircases leading to
the beach level.
2
i
C. Agency Responsibilities
The Agency responsibilities can be summarized as follows:
1. Lease the subject site from the City for a period of 55
years.
2 . Pay a maximum of $1. 0 million for relocation, site work,
and remediation expenses.
3 . Provide the site in a reasonable time period free and
clear of all recorded encumbrances, assessments, leases/
subleases, possesory rights, franchises, licenses and
taxes, except as set forth in the Agreement.
4 . Reimburse to the developer the total construction costs
of up to 250 parking spaces being built to replace the
existing public parking.
5. Finance the difference in construction costs between the
structured parking and surface parking for the remaining
361 parking spaces. The Agency will amortize the cost
differential in 30 annual payments.
D. Developer's Rgsponsij2ilities
The developer's responsibilities are as follows:
1. Ground lease the site from the Agency for an original
term of 55 years.
2 . Finance all off-site costs, except as specifically set
forth in the Agreement.
3 . Construct a 48, 522 square foot restaurant complex on a
raised deck at the quality level implied in the eleva-
tions and developer pro forma.
4 . Develop a naximum of 611 on-site structured parking
spaces.
5. In recognition of the revenue generated by the public
parking spaces, provide the Agency with a $1.25 million
credit against the cost of constructing the public park-
ing spaces.
6. Provide public beach access from the project.
III. COST OF THE AGREEMENT TO THE AGENCY
The total cost of the Lease Agreement to the Agency, and the net
costs of the project after consideration of project revenues are
3
presented herein. Both the total and net costs of the Lease Agree-
ment are presented in terms of absolute dollar amounts generated
over the 55-year lease and in terms of the present value (PV) of
expenditures and receipts resulting from implementation of the
Lease Agreement. The PV of expenditures and receipts has been com-
puted using an assumed discount rate of 10% . The difference be-
tween the PV of expenditures and the PV of receipts constitutes the
net present value cost of the Lease Agreement to the Agency. This
net cost can be either an actual cost (where expenditures exceed
receipts) or a net gain (where revenues created by implementation
of the Lease Agreement exceed expenditures) .
A. Total Costs to the Agency
Table 1 contains a listing of the Agency's estimated expenditures,
by major category, relating to its obligations under the Lease
Agreement. Per Table 1, total implementation expenditures by the
Agency over the 55 year original term of the lease are estimated at
approximately $101 . 1 million, which equates to $14 . 25 million in
present value terms. The basis of this estimate is presented
below.
1. Site Acquisition Costs
The Agency must lease the subject parcel from the City of
Huntington Beach at a lease rate based on the current
fair market value at the highest and best use allowed by
the zoning codes and general plan of the City, as well as
the Downtown Specific Plan District 10. The value of
this property is estimated at $5. 29 million. The Agency
will make annual payments to the City until such time as
the $5 . 29 million plus interest accrued at 10% is
received.
2 . site Preparation/Relocation Expense
In order to prepare the site for the proposed develop-
ment, the existing tenants must be relocated at the ex-
pense of the Agency, there are potential legal expenses
associated with these transactions, the Agency is respon-
sible ble .fnr _$ sf tnx fr. ril Ran-in _costs and the Acrency
must ensure adequate utilities are available to the site,
These costs have been capped in the Lease Agreement at
$1.0 million.
3 . Parking Costs
The Agency parking costs consist of two components:
a. An up-front payment of $4 .0 million to cover the to-
tal construction cost for the 250 replacement public
parking spaces.
4
w �t
b. Thirty annual payments of $435, 500 to amortize the
difference in construction costs between structured
parking and surface parking for the 361 spaces serv-
ing the private development. The rationale for this
payment is that in a typical ground lease where the
lessor is receiving 2. 00% to 3 .75% of gross sales as
rent, the lessor has provided enough land to allow
for the building improvements and surface parking.
In the proposed Lease Agreement the Agency has not
provided enough land to develop a sufficient amount
of surface parking and, thus, must make up the dif-
ference in parking costs to justify the lease terms.
These parking payments total nearly $13.07 million,
with a present value of $3 .96 million.
B. Agengy Revenues
Table 1 also shows, the nominal and present values of the Agency
revenues created as a result of implementation of the lease.
1. Ground Lease Payments
The Pierside Lease Agreement is structured so that the
amount of ground rent paid is directly related to the
project's performance. The ground rent schedule is as
follows:
Gross Restaurant Sales Percent of Total Sales
(In million o D ar ) Applied to Ground Lease
Less than $30 2. 00%
Less than $40 2.50%
Less than $50 3 .00%
Less than $65 3.50%
$65 and above 3.751
During the first five years, the maximum applicable per-
centage rent is 2 .00% . Thereafter, in no event can the
percentage of gross sales applied to the ground lease
payment decrease from year to year. Over the original
term, Keyser Marston Associates, Inc. has estimated that
the lease will generate nearly $139 :pillion in revenues,
with a present value of $8.00 million when discounted at
10% annually. In addition, the property will revert Lv
the Agency at the termination of the lease. The revers-
ionary value is projected at over $123 million. This
equates to $653, 000 In present value terms.
2 . Guaranteed Parking Payment
Currently, the City is receiving net parking revenues
5
after expenses of $110, 000 from the site annually. As
compensation for foregoing this annual revenue, the
developer will provide the Agency with a $1.25 r.illion
credit against the cost of constructing the public park-
ing spaces.
3 . •Tax Inuit iwenL RavenuE
It is currently estimated that the proposed project will
have an assessed value of $14.28 million upon completion.
When this is reduced by the current assessed value of
$1. 06 million, the incremental value is approximately
$13 .22 million. Assuming a first year tax rate of 1. 077%
and set- asides equal to 20$, this results in property
tax increment of ±$114 , 000 in the first full year of
operation. Assuming the assessed value increases at 2$
annually, and the project area ends in 2018 , the project
should produce tax increment revenue of approximately
$3 .88 million over the remaining life of the project
area. The present value of the tax increments generated
by the project is $1. 09 pillion.
A summary of anticipated revenues is shown in Table 1.
C. QQp,_parison of Expenditures and Revenues
A comparison of the present value of the expenditures and revenues
discussed above results in the following tabulation:
Total Dollars Present Value
Over a 55-year Over a 55-year
Lease Lease
Total Agency Revenues $267,838, 000 $10,994,000
Less: Agency Costs (101, 103, 000) (14 , 253,000)
Net Gain (loss) $166,735, 000 ($3,259, 000)
The analysis above indicates that as a result of implementation of
the Lease, the Agency can expect to realize a gain over the lease
period of almost $170 million in nominal dollars. On a present
value basis, project costs exceed project revenues by approximately
$3.26 million.
IV. ESTIMATED VALUE OF INTEREST TO BE LEASED
The value of the interest to be leased has been computed at its
highest and best use allowable under the zoning codes and General
Plan of the City, as well as the Downtown Specific Plan District
10. Under these constraints, Keyser Marston Associates, Inc. has
estimated that the proposed use is the highest and best use. Thus,
the present value of the ground lease and parking revenues to the
6
JLXI C,. 'Ji i:r;li hL1 1• H.6
Agency, less the present value of the amortized parking costs, is
the estimated value of the site. The amortized parking payments
are subtracted to reflect the extraordinary site costs that rust be
borne by the lessor in order to make the site developable at the
proposed intensity. The present value of the ground lease and
parking revenues has been estimated to be $9.25 pillion and the
present value of the amortized parking costs is $3 . 96 million,
therefore, the estimated value of the -site is $5.29 million.
V. LEASE PAYMENTS AND REASONS THEREFOR
Based upon an analysis of the ground lease payments to be received
by the Agency conducted by Keyser Marston Associates, the present
value of the developer's ground lease payments is $5. 29 million.
This amount is estimated to be the market value of the property
and, thus, the Agency is receiving the fair market value for the
site.
14066.000
19049B.HTB
7
TABLE 1
ESTIMATED NET AGENCY COSTS
PIERSIOE RESTAURANT COMPLEX LEAS_ AGREEMENT
FUNTINGTON BEACH, CALIFORNIA
TOTAL PRESENT
DOLLARS VALUE
AGENCY COSTS
SITE PREPARATION S1,000,000 $1,000,000
PARKING COSTS
UPFRONT COSTS (REPLACEMENT SPACES) S4,000,000 S4,000,000
AMORTIZED COSTS S13,065,000 $3,959,000
RAND PAYMENT TO CITY $83,038,000 S5,294,000
TOTAL AGENCY COSTS S101,103,000 $14,253,000
AGENCY REVENUES
GROUND LEASE PAYMENTS $139,227,000 S8,003,000
REVERSIONARY VALUE OF LAND S123,479,000 $653,000
UPFRONT PARKING PAYMENT $1,250,000 $1,250,000
TAX INCREMENT $3,882,000 $1,088,000
-OTAL AGENCY REVENUE $267,838,000 $10,994,000
a saaaaaasasas tts aaaza_aar
NET AGENCY REVENUES / (COSTS) 5166,T35,000 (53,259,000)
a
y
When Recorded Mail To:
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. 50th Street
Vernon, CA 9DO58
NONDISTURBANCE AND RECOGNITION AGREFYXNT
THIS NONDISTURBANCE AND RECOGNITION AGREEMENT
("Agreement") is made this day of , 1991,
between the CITY OF HUNTINGTON BEACH, a municipal corporation
("Lessor" ) and STANLEY M. BLOOM, an unmarried man
("Sublessee") .
RECITALS:
A. The Redevelopment Agency of the City of Huntington
Beach ( "Lessee") has entered into a Lease dated ,
1991, (the "Lease" ) with Lessor covering the "Leased
Premises" (as hereinafter defined) .
B. Sublessee has entered into a First Amended Pier Side
Lease dated , 1991 (the "Sublease" ) with Lessee
covering certain real property more particularly described in
Exhibit "A" attached hereto (the "Leased Premises" ) .
C. Lessor agrees to enter into this Agreement in order
to induce Sublessee to enter into the Sublease. Sublessee
would not enter into the Sublease unless Lessor entered into
this Agreement. Lessor acknowledges that by Sublessee
entering into the Sublease it will be benefited.
D. Sublessee and Lessor wish to confirm their
understanding with respect to the Sublease, the Lease and any _
"Leasehold Mortgage" (as defined in the Sublease) placed upon
the Leased Premises.
In consideration of the mutual covenants set forth below
and notwithstanding any provisions of the Lease or Sublease
to the contrary, Lessor and Sublessee agree as follows:
1. Nondisturbang . So long as Sublessee is not in
default (beyond any period given Sublessee to cure such
default in the Sublease) in the payment of any rent or in the
performance of any of the terms, covenants, or conditions of
5/267/013376-0001/02 5/31/91
the Sublease: (a) Lessor will not bring, join or cooperate in
any action or proceeding to terminate Sublessee's interest,
estate, or rights under - the Sublease (whether or not Lessor
has succeeded Lessee) ; (b) Sublessee's possession of the
Leased Premises and Sublessee's rights and privileges under
the Sublease shall not be diminished or interfered with by
Lessor; and (c) Lessor will continue to recognize the estate
of Sublessee created under the Sublease and Sublessee's
occupancy of the Leased Premises shall not be disturbed by
Lessor during the term of the Sublease or any extensions or
renewals which may be exercised under the provisions of the
Sublease.
2. Attornment.. If the interest of Lessee in all or any
part of the Leased •Premises shall be terminated by reason of
the exercise of any remedy by Lessor under the Lease or any
other action brought by Lessor, or by any other manner, and
Lessor succeeds to the interest and assumes all the
obligations of Lessee under the Sublease, Sublessee shall be
bound to Lessor under all of the terms, covenants, and
conditions of the Sublease for the balance of the Sublease
term and any extensions or renewals of the Sublease which may
be exercised under the provisions of the Sublease. Sublessee
hereby attorns to Lessor as its landlord, this attornment is
to be effective and self-operative without the execution of
any further instruments immediately upon Lessor succeeding to
the interest of Lessee under the Sublease. The respective
rights and obligations of Sublessee and Lessor under this
attornment shall be the same as that between Sublessee and
Lessee as set forth in the Sublease, it being the intention
of the parties to incorporate the Sublease by reference in
this Agreement, with the same force and effect as if the
Sublease were set forth at length in this Agreement.
Sublessee shall have the same remedies against Lessor for the
breach of a provision of the Sublease that Sublessee would
have had against Lessee. Sublessee, however, shall be under
no obligation to pay rent to Lessor until Sublessee receives
written notice from Lessor that Lessor has succeeded to the
interest of Lessee and assumed all the obligations of Lessee
under the Sublease. Lessor shall not hold Sublessee
responsible for any costs or acts caused by failure of Lessee
not related to any act of Sublessee which is connected with
any dispute between Lessor and Lessee with respect to whether
Lessor has succeeded to any or all of Lessee's interest and
assumed any or all of Lessee's obligations under the
Sublease.
3. Sublessee' s Right to Encumber the Sublease. Lessor
recognizes Sublessee's right to mortgage or encumber the
Sublease and/or the leasehold estate thereunder pursuant to
paragraph 16 of the General Conditions of the Sublease.
Subject to the terms of the Sublease, Lessor will recognize
-2-
any and all of the rights of any lender of a "Leasehold
Mortgagee" as defined in the Sublease ._ ( "Leasehold
Mortgagee" ) . Subject to the terms of the ' Sublease, each
Leasehold Mortgagee who has succeeded to the rights ' of
Sublessee under the Sublease and has given notice to Lessor
has the same rights as Sublessee under this Agreement and may
act on behalf of Sublessee under this Agreement and Lessor
will acknowledge and accept such actions.
4. Notice. Lessor will give notice to Sublessee and
each Leasehold Mortgagee in the event of the termination of
the Lease or of any new lease prior to its stated expiration
date for any reason whatsoever. Any notice required under
the Lease to be given by Lessor to Lessee shall not be
effective unless and until such notice is also given to
Sublessee and each Leasehold Mortgagee. Any notice or other
communication which a party shall desire or is required to
give to or serve upon the other or any Leasehold Mortgagee
shall be in writing and shall be served by registered or
certified mail, at the following addresses, or at such other
address as shall be designated from time to time by such
party by notice in writing given to the other by registered
or certified mail:
Lessor: The City of Huntington Beach
Sublessee: Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. Fiftieth Street
Verncn, CA 90058
With copies to: Jonathan Chodos
1559 South Sepulveda Blvd.
Los Angeles, CA 90025
Sublessee will furnish the addresses of each Leasehold
Mortgagee to Lessor.
5. Dfffault Under the Sublgase. Lessor shall have no
cause of action against Sublessee, its successors or assigns
if Sublessee is in default or otherwise fails to observe or
perform any of its obligations under the Sublease unless
Lessor has succeeded to the position of Lessee and has
assumed all of Lessee's obligations under the Sublease.
Default by Lessee under the Sublease shall not constitute a
default under the Lease.
6. New Lease. In the event of the termination of the
Lease prior to its stated expiration date for any reason
-3-
whatsoever, or the failure to exercise or the lapse of any
option to extend the Lease, Sublessee or any Leasehold
Mortgagee may notify Lessor, within forty (40) days after
receipt of such notice of such event, of its election to
enter into a new lease with Lessor . During such forty (40)
day period, the provisions of paragraph 1 herein shall apply.
Lessor, upon receipt of Sublessee' s or Leasehold Mortgagee's
notice, shall immediately enter into a written agreement with
Sublessee or Leasehold Mortgagee containing the same
provisions as those in the Sublease, except for any charges
that are necessary because of the substitution of Lessor in
the place of Lessee. Sublessee or any Leasehold Mortgagee
shall have no rights under this paragraph 5 if it fails to
give notice within the forty (40) day period.
7. Estoppel Certificate. Lessor and Sublessee will, at
any time and from time to time within thirty (30) days of the
request of the other party or a Leasehold Mortgagee or a
prospective Leasehold Mortgagee, execute, acknowledge, and
deliver to the other party and such Leasehold Mortgagee, if
any, a certificate certifying:
(a) That the Lease or Sublease is unmodified and
in full force and effect (or, if there have been
modifications, that the same are in full force and
effect as modified and stating such modifications) ;
(b) The dates, if any, to which the rent,
percentage rent and any additional rent and charges have
been paid;
(c) Whether there are any existing defaults by the
other party to the knowledge of the party making such
certification specifying the nature of such defaults, if
any;
(d) Whether the Commencement Date of the Lease has
occurred and, if so, the date;
(e) Whether the Leasehold Mortgagee (or
prospective Leasehold Mortgagee) is entitled to the
protection afforded a Leasehold Mortgagee under the
terms of the Sublease or Lease; and
(f) Such other matters as may be reasonably
requested. Any such certificate may be relied upon by
any party to whom the certificate is directed.
8. Lessor Consent. Lessor will not unreasonably
withhold, delay or condition any consent or approval required
or requested of it hereunder or under the Lease or Sublease,
including any requests for approval of an amendment to the
-4-
Sublease requested by a Leasehold Mortgagee pursuant to
paragraph 16 of the General' Conditions of the Sublease. In
the event Lessor withholds its approval or consent, it will
provide Sublessee with the specific reasons for withholding
such approval or consent. No item once approved by - Lessor
shall be subject to subsequent disapproval by Lessor.
Notwithstanding any provision to the contrary, all such
approvals or Consents or notice of the reasons for the
withholding of such approval or consent will be provided
within thirty (30) days after request.
9. Modification of Lease . Except by reason of an
uncured default by Lessee (and then subject to the rights of
a Leasehold Mortgagee or Sublessee as 'contained herein) ,
Lessor will not modify, merge cr amend those portions of the
Lease which affect Sublessee's rights under the Sublease
without the prior written ccnsent of Sublessee and all
Leasehold Mortgagees. Any such modification, merger, or
amendrient without the written consent of Sublessee or all
Leasehold Mortgagees shall be void and of no force or effect.
10. Easgments, P bli A rovals and Permits. Lessor
shall grant, join in granting, apply or aid in the
application for all reasonable utility easements, government
approvals, and all permits necessary for the operations on
the Leased Premises at no cost to Lessor.
11. Commgneement of Agreement . This Agreement will
commence as of the date hereof regardless of the commencement
date of the Sublease.
12. Entry on Leased_ Premises . Lessor hereby consents
to the entry of Sublessee upon the Leased Premises prior to
Sublessee taking possession of the Leased Premises pursuant
to the Sublease for purposes of making the tests and
investigations necessary and appropriate to satisfy the
conditions set forth in the Sublease and shall hold Lessor
harmless from any liability which may arise due to such
entry. Any such entry is subject to reasonable advance
notice.
13. Parties Bound. This Agreement shall be binding
upon and inure to the benefit of Sublessee, Lessor and each
Leasehold Mortgagee, their respective heirs, personal
representatives, and permitted successors and assigns. The
term "Lessor", as used in this Agreement, shall be deemed to
include Lessor, its successors and assigns, and anyone who
shall have succeeded to Lessor ' s interest by any means under
the Lease.
14. Insurance Proceeds and Condemnation Diptributions.
The payment or disposition of proceeds of fire or extended
-5-
insurance coverage, and any other property damage insurance
provided for in the Sublease, and the -payment and disposition
of any condemnation award, shall be made and applied in the
manner provided in the Sublease.
15. Reserved_Polige Powel Authority. Nothing contained
in this Agreement is intended or shall be construed to limit
or restrict Lessor 's legitimate exercise of its general,
municipal or police power authcrity.
16. Definition of Terms. Any terms not defined herein
will have the meaning ascribed to such term in -the Sublease.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
"LESSOR" :
ATTEST: CITY OF HUNTINGTON BEACH, a
municipal corporation
By:
Its:
"SUBLESSEE" :
STANLEY M. BLOOM, an unmarried man
S.anley iM Bloom
-6-
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On the -day of , 1991, before
me, the undersigned, a Notary Public, in and for said State
and County, personally appeared ,
personally kncwn to me (or proved to me on the basis of
satisfactory evidence). to be the person who executed the
within instrument as the on behalf of
the CITY OF HUNTINGTON BEACH, the municipal . corporation
therein named, and acknowledged to me that such corporation
executed the within instrument pursuant to its bylaws or a
resolution of its board of directors.
WITNESS my hand and official seal.
Notary Pu lic
(SEAL)
-7-
e
STATE OF CALIF RNIA )
s.
COUNTY
On the y of 1991, before
me, the ersigned, a Not y blic in an for said State
and County, personally app ar TANLEY M. BLOOM, personally
known to me (or proved to . on the basis of satisfactory
evidence) to be the person who executed his instrument and
acknowledged to me that he execat� a sa
WITNESS my hand and offi al seal
' Notary u 1
(SEAL)
�p GARC!
..
• � i/iY
6"X
44
Ucfotrr�R' 1ES
i
-8-
L E A S E
LESSOR: CITY OF HUNTINGTON BEACH,
a municipal corporation
LESSEE: REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a Public body, corporate and
politic
DATED:
5/267/013376-0001/01 5/31/91
INDEX
P_ aqe
Article
I. Leased Premises. . . . . . . . . . . . . . . . . . . . . . . . 1
II. Term of Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 1
III. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
IV. Indemnification and Hold Harmless. . . . . . 2
V. Use of Premises. . . . . . . . . . . . . . . . . . . . . . . . 3
VI. Improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VII. Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VIII . Attorneys ' Fees. . . . . . . . . . . . . . . . . . . . . . . . 4
Ix. Covenants of Quiet Enjoyment
and Nondisturbance. . . . . . . . . . . . . . . . . . . . . 4
X. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exhibits
A Legal Description
B Nondisturbance and Recognition Agreement
C Short Form Memorandum of Lease
-i- '
LEASE
THIS LEASE is made, and entered into as of this day
of by and between the CITY OF HUNTINGTON BEACH,
a municipal corporation (herein referred to as "Lessor") , and
the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a
Public body, corporate and politic (herein referred to as
"Lessee" ) .
The parties hereto mutually covenant and agree that
Lessor , in consideration of the rentals payable by Lessee and
the covenants and agreements to be kept, observed and
performed by Lessee hereunder, has rented and leased unto
Lessee, and Lessee does hereby take and hire from Lessor, the
Leased Premises, pursuant to the provisions of this Lease.
ARTICLE I
Leased Premises
1.1 "Leased Premises" or "Premises, " as hereinafter
collectively referred to, shall consist of that certain real
property located in the City of Huntington Beach, County of
Orange, State of California and more particularly described
in Exhibit "A" attached hereto and incorporated herein by
this reference, together with all improvements now located
thereon.
1.2 The Leased Premises are leased and granted to
Lessee for the purpose of subleasing and assigning the same
to Stanley M. Bloom (hereafter "Sublessee" ) in accordance
with the "First Amended Pier Side Lease" as defined in
Section 2.1 below.
1.3 Prior to the "Commencement Date" (as hereinafter
defined) , Lessee and its designees shall have the right, upon
prior notice to Lessor , to enter upon the Leased Premises to
make any and all inspections and tests of the Leased Premises
in connection with the development of the Leased Premises.
TO HAVE AND TO HOLD the Premises unto Lessee for the
term of this Lease as the same is hereinafter defined.
ARTICLE II
Term of Lea*e
2.1 The term of this Lease shall be fifty-five (55)
years commencing on the "Commencement Date" as defined in
-1-
that certain First Amended Pier Side Lease dated ,
1991 by and between Lessee and Stanley M. Bloom (the "First
Amended Pier Side Lease") . The above described term of this
Lease is hereinafter referred to as the "Lease Term. "
ARTICLE III
Rent
3.1 Lessee agrees to pay to Lessor at
or at such other place as may be
designated by Lessor from time to time, the amount payable as
rent by the Sublessee pursuant to the First Amended Pier Side
Lease (taking into account any deductions, reductions or
offsets thereto to which the Sublessee may from time to time
be entitled) up to a cumulative total amount during the Lease
Term not to exceed
Dollars ($ ) plus interest thereon at the rate of
ten percent (10%) per annum accruing from the Commencement
Date until said amount is paid in full. The rent payable by
Lessee hereunder shall be payable within thirty (30) days of
Lessee' s receipt of the same from the Sublessee pursuant to
the First Amended Pier Side Lease.
3. 2 As additional rent hereunder, Lessee shall pay
during the Lease Term, and prorated to the commencement and
the termination of the Lease Term, any and all taxes and
assessments levied against the Premises, or any portion
thereof, public utility and related costs and expenses, and
any other expenses or charges which during the Lease Term
shall be levied, assessed or imposed by any. governmental
authority upon or with respect to, or incurred in connection
with, the possession, occupation, operation, alteration,
maintenance, repair and use of the Premises, it being
intended that this Lease shall result in a rent to be paid to
Lessor, without additional cost to Lessor or diminution or
offset thereto, in the fixed amount specified in Section 3.1
above.
ARTICLE IV
Indemnification and Hold Harmless
4.1 Except for claims arising out of the acts or
omissions or neglect of Lessor, Lessee covenants to defend
and indemnify Lessor and save it harmless from and against
any and all claims, actions, dariages, liability and expenses,
including reasonable attorneys ' fees, in connection with the
loss of life, bodily injury and/or damage to property arising
from or out of any occurrence in, upon or at the Premises, or
-2-
the occupancy or use by Lessee of the Premises or any part
thereof, or arising from or out of Lessee's failure to comply
with any provision of this Lease or otherwise occasioned
wholly or in part by any act or omission of Lessee, its
agents, representatives, contractors, employees, servants,
customers or licensees. Except for Lessor 's willful or
negligent conduct, Lessee hereby assumes all risk of damage
to property or injury to persons in, upon or about the
Premises from any cause whatsoever.
ARTICLE V
Use of Premises
5.1 Lessee may use the Premises for any lawful purpose.
5.2 Lessee may from time to time, without the necessity
of consent from or notice to Lessor, transfer, assign,
sublet, mortgage and/or otherwise hypothecate this Lease and
Lessee's interest in and to the Premises.
ARTICLE VI
Improvements
6.1 Subject to compliance with all applicable laws,
rules and regulations, Lessee may from time to time during
the Lease Term make or cause to be made such improvements
and/or alterations to the Premises, including demolition of
the improvements now or hereafter comprising the Premises, as
Lessee shall in its sole discretion deem appropriate without
the necessity of consent from or notice to Lessor.
6. 2 Upon expiration of the Lease Term, Lessee may, in
Lessee's sole and absolute discretion, remove some or all of
the improvements then comprising the Premises and any such
improvements not so removed by Lessee shall be deemed to be
abandoned and title thereto shall be deemed to have been
transferred to Lessor.
ARTICLE VII
Default_
7.1 The following events shall constitute default(s) by
Lessee:
7.1.1 The failure by Lessee to make, as and when
due, any payment of rent or other charges payable by Lessee
-3-
hereunder or to timely discharge any other monetary
obligation hereunder, where such failure has continued for a
period of ten (10) days after written notice thereof from
Lessor to Lessee.
7.1. 2 The failure by Lessee to observe or to
perform any of the nonmonetary covenants, promises,
agreements or provisions of this Lease to be observed or
performed by Lessee other than as specified in Section 7.1.1,
where such failure has continued for a period of thirty (30)
days after written notice thereof from Lessor of such
default; provided, if such default by its nature is not
susceptible to cure within such thirty (30) days, Lessee
shall not be deemed to be in default if within such thirty
(30) day period Lessee commences to effect such cure and
thereafter diligently prosecutes the same to completion.
ARTICLE VIII
Attorneys' Fees
8.1 In the event that either Lessor or Lessee brings
any action or proceeding against the other for possession of
the Premises or for the recovery of any sum due hereunder, or
because of the breach of any covenant, condition or provision
hereof, or for any other relief against the other,
declaratory or otherwise, including appeals therefrom, and
whether being an action based upon a tort or contract, then
the prevailing party in any such proceeding shall be paid by
the unsuccessful party reasonable attorneys ' fees and costs
of such action or proceeding which shall be enforceable
whether or not such action or proceeding is prosecuted to
final judgment, and including an allowance for reasonable
attorneys ' fees and costs for appeals and rehearings.
ARTICLE IX
Covenants of Quiet Enjoyment and Nondisturbance
9.1 Lessor does hereby covenant, promise and agree to
and with Lessee that Lessee, for so long as it is not in
default hereof, shall and may at all times peaceably and
quietly have, hold, use, occupy and possess the Premises
throughout the Lease Term, without any litigation, suit,
molestation or eviction by Lessor or any persons claiming by
or through• Lessor or claiming the Premises, other than third
parties claiming under or through Lessee or Sublessee.
9 .2 on or before the CoaLmencement Date of this Lease,
Lessor shall execute and deliver to Sublessee the
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Nondisturbance and Recognition Agreement attached hereto as
Exhibit "B" and by this reference incorporated herein.
ARTICLE X
General
10.1 The covenants and agreements herein contained
shall bind and inure to the benefit of Lessor, its successors
and assigns, and Lessee, its successors and assigns, subject
to the provisions of this Lease.
10.2 Any notice, demand, request, consent, approval or
communication that Lessor or Lessee desires or is required to
give to any other party shall be in writing addressed to such
other party at the following addresses or such other address
as may have been specified by nctifying the other parties of
the change of address:
Lessor:
Lessee: Redevelopment Agency of the City of
Huntington Beach
Attn: Executive Director/City
Administrator
2000 Main Street
Huntington Peach, CA 92646
Sublessee/
Leasehold
Mortgagee: Where notice is required under Exhibit
"P" , paragraph 5, to the addresses
referenced in Exhibit "S" , paragraph 5
Notice shall be deemed served on the third (3d) business
day following the day of mailing if mailed with the United
States Postal Service, by certified mail, return receipt
requested or one (1) business day after the sage is timely
deposited with a reputable overnight courier service.
10.3 The headings or captions of Articles in this Lease
are for convenience and reference only, and they in no way
define, limit or describe the scope or intent of this Lease
or the provisions of such Articles.
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10.4 Feminine or neuter pronouns shall be substituted
for those masculine form or vice versa, and the plural shall
be substituted for the singular number or vice versa, in the
place or Places herein where the context may require such
substitution or substitutions.
10.5 This Lease shall be governed by and construed
pursuant to the laws of the State of California.
10.6 This agreement may be executed in several
counterparts, each of which shall constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed
this Lease on the date first set forth above.
LESSOR LESSEE
CITY OF HUNTINGTON BEACH, REDEVELOPMENT AGENCY OF THE CITY
a municipal corporation OF HUNTINGTON BEACH, a public
body, corporate and politic
By• By•
Its: Its:
ATTEST: ATTEST:
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�1
EXHIBIT A
Legal Description
That portion of Huntington Beach, County of Orange, State of
California as shown on a map recorded in Book 3, Page 36 of
Miscellaneous Maps in the office of the County recorder of
said county described as follows :
Beginning at the center line intersection of
Pacific Coast Highway and Lake Street, shown
as Ocean Avenue and First Street respectively,
on said mentioned map; thence along the center
line of Pacific Coast Highway south 48021' 42"
east 37.50 feet to the intersection with the
southwesterly extension of the southeast
right-of-way line of Lake Street; thence south
41038118" west 50.00 feet to the true point of
beginning; thence north 48021142" west
1,020.00 feet; thence south 41038 ' 18" west
200 .00 feet; thence south 48021142" east
1,020.00 feet; thence north 41038 ' 18" east
200 .00 feet to the true point of beginning.
EXHIBIT "A"
TO LEASE
When Recorded Mail To:
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. 50th Street
Vernon, CA 90058
NONDISTURBANCE AND RECOGNITION AGREEMENT
THIS NONDISTURBANCE AND RECOGNITION AGREEMENT
("Agreement" ) is made this day of , 19910,
between the CITY OF HUNTINGTON BEACH, a municipal corporation
("Lessor" ) and STANLEY M. BLOOM, an unmarried man
("Sublessee") .
RECITALS:
A. The Redevelopment Agency of the City of Huntington
Beach ("Lessee") has entered into a Lease dated
1991, (the "Lease" ) with Lessor covering the "Leased
Premises" (as hereinafter defined) .
B. Sublessee has entered into a First amended Pier Side
Lease dated , 1991 ( the "Sublease" ) with Lessee
covering certain real property nore particularly described in
Exhibit "A" attached hereto (the "Leased Premises" ) .
C. Lesso: agrees to enter into this Agreement in order
to induce Sublessee to enter into the Sublease. Sublessee
would not enter into the Sublease unless Lessor entered into
this Agreement. Lessor acknowledges that by Sublessee
entering into the Sublease it will be benefited.
D. Sublessee and Lessor wish to confirm their
understanding with respect to the Sublease, the Lease and any
"Leasehold Mortgage" (as defined in the Sublease) placed upon
the Leased Premises.
In consideration of the mutual covenants set forth below
and notwithstanding any provisions of the Lease or Sublease
to the contrary, Lessor and Sublessee agree as follows:
1. Nondisturbance. So long as Sublessee is not in
default (beyond any period given Sublessee to cure such
default in the Sublease) in the payment of any rent or in the
performance of any of the terms, covenants, or conditions of
EXHIBIT "B"
TO LEASE
5/267/013376-0001/02 5/31/91
the Sublease: (a) Lessor will not bring, join or cooperate in
any action or proceeding to terminate Sublessee's interest,
estate, or rights under the Sublease (whether or not Lessor
has succeeded Lessee) ; (b) Sublessee's possession of the
Leased Premises and Sublessee's rights and privileges under
the Sublease shall not be diminished or interfered with by
Lessor; and (c) Lessor will continue to recognize the estate
of Sublessee created under the Sublease and Sublessee's
occupancy of the Leased Premises shall not be disturbed by
Lessor during the term of the Sublease or any extensions or
renewals which may be exercised under the provisions of the
Sublease.
2. Attornment. If the interest of Lessee in all or any
part of the Leased Premises shall be terminated by reason of
the exercise of any remedy by Lessor under the Lease or any
other action brought by Lessor , or by any other manner, and
Lessor succeeds to the interest and assumes all the
obligations of Lessee under the Sublease, Sublessee shall be
bound to Lessor under all of the terms, covenants, and
conditions of the Sublease for the balance of the Sublease
term and any extensions or renewals of the Sublease which may
be exercised under the provisions of the Sublease. Sublessee
hereby attorns to Lessor as its landlord, this attornment is
to be effective and self-operative without the execution of
any further instruments immediately upon Lessor succeeding to
the interest of Lessee under the Sublease. The respective
rights and obligations of Sublessee and Lessor under this
attornment shall be the same as that between Sublessee and
Lessee as set forth in the Sublease, it being the intention
of the parties to incorporate the Sublease by reference in
this Agreement, with the same force and effect as if the
Sublease were set forth at length in this Agreement.
Sublessee shall have the same remedies against Lessor for the
breach of a provision of the Sublease that Sublessee would
have had against Lessee. Sublessee, however, shall be under
no obligation to pay rent to Lessor until Sublessee receives
written notice from Lessor that Lessor has succeeded to the
interest of Lessee and assumed all the obligations of Lessee
under the Sublease. Lessor shall not hold Sublessee
responsible for any costs or acts caused by failure of Lessee
not related to any act of Sublessee which is connected with
any dispute between Lessor and Lessee with respect to whether
Lessor has succeeded to any or all of Lessee's interest and
assumed any or all of Lessee's obligations under the
Sublease.
3. Sublessee's Right to--Encumber--the Subleasg. Lessor
recognizes Sublessee's right to mortgage or encumber the
Sublease and/or the leasehold estate thereunder pursuant to
paragraph 16 of the General Conditions of the Sublease.
Subject to the terms of the Sublease, Lessor will recognize
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any and all of the rights of any lender of a "Leasehold
Mortgagee" as defined in the Sublease ( "Leasehold
Mortgagee") . Subject to the terms of the Sublease, each
Leasehold Mortgagee who has succeeded to the rights of
Sublessee under the Sublease and has given notice to Lessor
has the same rights as Sublessee under this Agreement and may
act on behalf of Sublessee under this Agreement and Lessor
will acknowledge and accept such actions.
4. Notice. Lessor will give notice to Sublessee and
each Leasehold Mortgagee in the event of the termination of
the Lease or of any new lease prior to its stated expiration
date for any reason whatsoever. Any notice required under
the Lease to be given by Lessor to Lessee shall not be
effective unless and until such notice is also given to
Sublessee and each Leasehold Mortgagee. Any notice or other
communication which a party shall desire or is required to
give to or serve upon the other or any Leasehold Mortgagee
shall be in writing and shall be served by registered or
certified mail, at the following addresses, or at such other
address as shall be designated from time to time by such
party by notice in writing given to the other by registered
or certified mail:
Lessor: The City of Huntington Beach
Sublessee: Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. Fiftieth Street
Vernon, CA 90058
With copies to: Jonathan Chodos
1559 South Sepulveda Blvd.
Los Angeles, CA 90025
Sublessee will furnish the addresses of each Leasehold
Mortgagee to Lessor.
5. Default Under the Sublease. Lessor shall have no
cause of action against Sublessee, its successors or assigns
if Sublessee is in default or otherwise fails to observe or
perform any of its obligations under the Sublease unless
Lessor has succeeded to the position of Lessee and has
assumed all of Lessee' s obligations under the Sublease.
Default by Lessee under the Sublease shall not constitute a
default under the Lease.
5. New Lease. In the event of the termination of the
Lease prior to its stated expiration date for any reason
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whatsoever, or the failure to exercise or the lapse of any
option to extend the Lease, Sublessee or any Leasehold
Mortgagee may notify Lessor, within forty (40) days after
receipt of such notice of such event, of its election to
enter into a new lease with Lessor. During such forty (40)
day period, the provisions of paragraph 1 herein shall apply.
Lessor, upon receipt of Sublessee's or Leasehold Mortgagee' s
notice, shall immediately enter into a written agreement with
Sublessee or Leasehold Mortgagee containing the same
provisions as those in the Sublease, except for any changes
that are necessary because of the substitution of Lessor in
the place of Lessee. Sublessee or any Leasehold Mortgagee
shall have no rights under this paragraph 6 if it fails to
give notice within the forty ( 40) day period.
7. Esto oel Certificate. Lessor and Sublessee will, at
any time and from time to time within thirty (30) days of the
request of the other party or a Leasehold Mortgagee or a
prospective Leasehold Mortgagee, execute, acknowledge, and
deliver to the other party and such Leasehold Mortgagee, if
any, a certificate certifying:
(a) That the Lease or Sublease is unmodified and
in full force and effect (or, if there have been
modifications, that the same are in full force and
effect as modified and stating such modifications) ;
(b) The dates, if any, to which the rent,
percentage rent and any additional rent and charges have
been paid;
(c) Whether there are any existing defaults by the
other party to the knowledge of the party making such
certification specifying the nature of such defaults, if
any;
(d) Whether the Commencement Date of the Lease has
occurred and, if so, the date;
(e) Whether the Leasehold Mortgagee (or
prospective Leasehold Mortgagee) is entitled to the
protection afforded a Leasehold Mortgagee under the
terms of the Sublease or Lease; and
(f) Such other matters as may be reasonably
requested. Any such certificate may be relied upon by
any party to whom the certificate is directed.
8. Lessor Consent. Lessor will not unreasonably
withhold, delay or condition any consent or approval required
or requested of it hereunder or under the Lease or Sublease,
including any requests for approval of an amendment to the
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Sublease requested by a Leasehold Mortgagee pursuant to
paragraph 16 cf the General Conditions of the Sublease. In
the event Lessor withholds its approval or consent, it will
provide Sublessee with the specific reasons for withholding
such approval or consent. No item once approved by Lessor
shall be subject to subsequent disapproval by Lessor .
Notwithstanding any provision to the contrary, all such
approvals or consents or notice of the reasons for the
withholding of such approval or consent will be provided
within thirty (30) days after request.
9. Modification of Lease. Except by reason of an
uncured default by Lessee (and then subject to the rights of
a Leasehold Mortgagee or Sublessee as contained herein) ,
Lessor will not modify, merge or amend those portions of the
Lease which affect Sublessee ' s rights under the Sublease
without the prior written consent of Sublessee and all
Leasehold Mortgagees. Any such modification, merger, or
amendment without the written consent of Sublessee or all
Leasehold Mortgagees shall be void and of no force or effect.
10. Easements-, Public Approvals. - and Permits. Lessor
shall grant, join in granting, apply or aid in the
application for all reasonable utility easements, government
approvals, and all permits necessary for the operations on
the Leased Premises at no cost to Lessor.
11. Comnencementof Agreement. This Agreement will
commence as of the date hereof regardless of the commencement
date of the Sublease.
12. Entry on Leased, Premises. Lessor hereby consents
to the entry of Sublessee upon the Leased Premises prior to
Sublessee taking possession of the Leased Premises pursuant
to the Sublease For purposes of making the tests and
investigations necessary and appropriate to satisfy the
conditions set forth in the Sublease and shall hold Lessor
harmless from any liability which may arise due to such
entry. Any such entry is subject to reasonable advance
notice.
13. Parties Bound. This Agreement shall be binding
upon and inure to the benefit of Sublessee, Lessor and each
Leasehold Mortgagee, their respective heirs, personal
representatives, and permitted successors and assigns. The
term "Lessor" , as used in this Agreement, shall be deemed to
include Lessor , its successors and assigns, and anyone who
shall have succeeded to Lessor 's interest by any means under
the Lease.
14. Insurance _Proceeds and _Condemnation Dis__tributions.
The payment or disposition of proceeds of fire or extended
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insurance coverage, and any other property damage insurance
provided for in the Sublease, and the payment and disposition
of any condemnation award, shall be made and applied in the
manner provided in the Sublease .
15. Reserved Police Power Authority. Nothing contained
in this Agreement is intended or shall be construed to limit
or restrict Lessor 's legitimate exercise of its general,
municipal or police power authority.
16. Definition of Terms. Any terms not defined herein
will have the meaning ascribed to such term in the Sublease.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
"LESSOR" :
ATTEST: CITY OF HUNTINGTON BEACH, a
' municipal corporation
By:
Its:
"SUBLESSEE" :
STANLEY M. BLOOM, an unmarried man
Stanley M. Bloom
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On the day of 1991, before
me, the undersigned, a Notary Public, in and for said State
and County, personally appeared ,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the
within instrument as the on behalf of
the CITY OF HUNTINGTON BEACH, the municipal corporation
therein named, and acknowledged to me that such corporation
executed the within instrument pursuant to its bylaws or a
resolution of its board of directors.
WITNESS my hand and official seal.
Notary Public
(SEAL)
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�J
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On the day of 1991, before
me, the undersigned, a Notary Public in an For said State
and County, personally appeared STANLEY M. BLOOM, personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument and
acknowledged to me that he executed the same.
WITNESS my hand and official seal.
Notary Public
(SEAL)
FIRST AMENDED
PIER SIDE LEASE
By and Between
THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
and
STANLEY M. BLOOM
�..� k..O
TABLE OF CONTENTS
Pa e
1. RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. INGRESS AND EGRESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
S. REQUIRED SERVICES AND USES; LIMITATION ON USE. 3
6. DEVELOPMEPTT OF THE PREMISES AND ADJACENT AREAS 6
a. Scope of Development and Cost of
Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
b. Construction Schedule. . . . . . . . . . . . . . . . . . . . . 7
c. Certificate of Completion. . . . . . . . . . . . . . . . . 7
7. RENT; PUBLIC PARKING PAYMENTS. . . . . . . . . . . . . . . . . e
a. Percentage Rental. . . . . . . . . . . . . . . . . . . . . . . . . 8
b. Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
c. Public Parking Construction Payment. . . . . . . 14
d. Rent Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
e. Appraisal Procedure . . . . . . . . . . . . . . . . . . . . . . 15
f. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
S. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9. CONDITION OF TITLE; COVENANT OF QUIET
ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
20. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11. THIRD PARTY BENEFICIARY. . . . . . . . . . . . . . . . . . . . . . . 20
12. REPRESENTATIONS BY LESSEE. . . . . . . . . . . . . . . . . . . . . 20
13. EXHIBITS - INCORPORATION INTO LEASE. . . . . . . . . . . 21
EXHIBITS
A Legal Description of Premises
B General Conditions
C Conditions to Commencement
D Scope of Development
E Schedule of Performance
F Certificate of Commencement Date
G [Reserved]
H Site Map
I Master Lease
J Nondisturbance and Recognition Agreement
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V �
FIRST AMENDED PIER SIDE LEASE
This FIRST AMENDED PIER SIDE LEASE (the "Lease") is
entered into this day of , 1991 (the "Effective
Date") , by and between the REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH, a public body, corporate and politic
("LESSOR") , and STANLEY M. BLOOM, an unmarried man ( "LESSEE" ) ,
who agree as follows:
1. RECITALS: This Lease is made with reference to the
following facts, objectives and covenants:
a. On or about August 19, 1985, LESSOR, HUNTINGTON
PACIFICA DEVELOPMENT GROUP, and the City of
Huntington Beach, a municipal corporation (the
"City") , entered into ,a Disposition and
Development Agreement, which agreement was
modified on or about February 16, 1986 (the
"DDA" ) . The DDA provided for the disposition and
development of two parcels located in the City of
Huntington Beach, California, one of which
parcels encompassed the Premises described herein
(and other adjacent property that has been
deleted from the Premises) . LESSEE hereunder is
a shareholder in Randall Foods, Inc. , which was
the parent of Pacific Heritage Land and Holding
Company, which in turn was the parent of Pacific
Heritage Corporation, one of the general partners
in HUNTINGTON PACIFICA DEVELOPMENT GROUP, and
LESSEE thereby had a substantial interest in the
DDA.
b. On or about November 20, 1986, LESSOR and PIER w
SIDE DEVELOPMENT, the successor-in-interest to
HUNTINGTON PACIFICA DEVELOPMENT GROUP, entered
Into a lease (the "Pier Side Lease") . The Pier
Side Lease provided for the disposition and
• development of the parcel described in the DDA
that encompassed the Premises described herein.
Huntington Pacifica Development Group was a
general partner in PIER SIDE DEVELOPMENT, and
LESSEE thereby had a substantial interest in the
Pier Side Lease.
C. LESSOR and LESSEE, as the successor-in-interest
to PIER SIDE DEVELOPMENT, desire to amend and
restate the Pier Side Lease on the terms and
conditions set forth herein. LESSOR and LESSEE
agree that the DDA, including without limitation
the Guarantees set forth as Attachments 7-10
thereto, is of no further force and effect, and
�1
that the Pier Side Lease, including without
limitation the Guarantees set forth as Exhibits
F, G, and H, thereto is superseded and amended by
this Lease and shall be of no further force or
effect on the Effective Date.
d. The City is currently the owner of that parcel of
real property located in the City of Huntington
Beach, State of California, described in Exhibit
"A" hereto and incorporated herein by this
reference (the "Premises") . Subject to the
satisfaction or waiver of all of the "Conditions
to Commencement" (Exhibit "C" hereto) , LESSOR
shall acquire a leasehold interest in and to the
Premises pursuant to that certain Lease (the
"Master Lease" ) to be entered into between the
City as landlord and the Lessor as tenant on or
before the "Commencement Date" of the Lease term
(as that date is defined in paragraph 4 below) .
The Master Lease is attached hereto as Exhibit I
and incorporated herein by this reference.
LESSOR and LESSEE acknowledge that this Lease is
a sublease subject to all the terms and
conditions of the Master Lease, with the
understanding that LESSEE is not obligated to
perform any of LESSOR' s obligations thereunder.
e. On 1991, by Resolution
No. LESSOR approved and authorized its
Chairman to execute this Lease.
f. This Lease is entered into for the redevelopment
of property consistent with the public purposes
of the Main-Pier Redevelopment Plan, as _
previously adopted by the City Council of the
City, and not for the purpose of speculation in
unimproved land.
g. The development of the Premises pursuant to the
terms of this Lease shall improve public access
to the public beach and recreational access and
use of the Premises by creating amenities
designed for year-round use and enjoyment by the
public at the Premises as well as improving and
facilitating vehicular, pedestrian, cycling and
handicapped access to and through the Premises.
2. PREMISES: Contingent upon City' s approval and
execution of the Master Lease, LESSOR agrees to lease to LESSEE
and LESSEE agrees to lease from LESSOR the Premises, as
described in Exhibit "A", upon the terms and conditions
expressed herein.
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5409u/2460/39 -2-
3. INGRESS AND EGRESS: LESSEE shall have access, as
approved by the City and Caltrans, pursuant to the approved
building plans for the development proposed herein, to all
portions of the Premises at all times during the entire Lease
term, including without limitation, access from the nearest
public streets (Pacific Coast Highway and Lake Street) to the
Premises, pedestrian access from all adjacent public spaces and
ways (which include but are not limited to the municipal pier
and beach) to the Premises, and limited access from the access
road/bike trail in accordance with the Scope of Development
(Exhibit "D" ) . Access points shall be limited as provided on
the plans and permits to be approved by the City, as referenced
in Paragraph 1 of the Conditions to Commencement (Exhibit "C") ,
as the same may be revised from time to time. LESSEE shall
provide full public access to all of the promenade and plaza
portions of the Premises consistent with security and safety
regulations promulgated by any governmental authority with
jurisdiction. LESSEE shall further provide access to the
public parking facilities to be located on the Premises from
6:00 A.M. to twelve midnight each day on a year-round basis or
such shorter period of time permitted in accordance with
applicable governmental regulation.
4. TERM: Subject to Paragraph 7(a) (fi) herein, the term
of this Lease shall be fifty-five (55) years, commencing on the
date (herein the "Commencement Date" ) that all of the
conditions to the commencement of the Lease term described in
Exhibit "C" hereto ("CONDITIONS TO COMMENCEMENT") are satisfied
or their performance is waived by the appropriate party. Upon
the Commencement Date, LESSOR and LESSEE each agree, upon the
request of the other party, to execute and record in the
Official Records of Orange County an appropriate memorandum
certifying the actual Commencement Date in the form attached
hereto as Exhibit "F" .
5. REQUIRED SERVICES AND USES; LIMITATION ON USE:
a. In General. LESSOR' s primary purpose for
entering into this Lease is to provide for
• improved accessibility and use of the Premises by
the public through the development of facilities
and services needed by the public as part of the
implementation of the Redevelopment Plan for the
Main-Pier Redevelopment Project (the
"Redevelopment Plan" ) . In furtherance of that
purpose, LESSEE shall during the Lease term use
the Premises for the purpose of constructing and
operating thereon restaurant and food and
beverage facilities, beach-related concessions,
retail shops, and a parking structure designed to
accommodate such uses and public beach parking,
all in accordance with the Scope of Development
(Exhibit "D" ) and the Conditional Use Permit,
Coastal Development Permit, and final building
06/13/91
5409u/2460/39 -3-
plans and specifications to be approved for the
project referenced therein, as such matters may
be amended or changed as provided herein.
Provided that LESSEE obtains all permits and
approvals which may be required by the City and
any other governmental agency with jurisdiction,
LESSOR agrees that the permitted uses on the
Premises shall also include outdoor dining, the
serving of alcoholic beverages in conjunction
with the restaurant and food and beverage
facilities, entertainment, and the staging of
special outdoor events on the Premises including,
but not limited to, art exhibitions, musical
performances and retail merchandising
activities. LESSEE shall not use or suffer the
Premises to be used for any other purpose without
the prior written consent of LESSOR.
b. Uses on Pier Plaza; Right of First Refusal. In
consideration of LESSEE s provision of the Pier
Plaza construction work, pursuant to Paragraph
6a. below, Lessee Shall be entitled to a right of
first refusal on the ownership and operation of
any for profit commercial enterprises ultimately
allowed in the Pier Plaza area adjacent to the
Premises as denoted on the Site Map attached
hereto as Exhibit H and incorporated herein by
this reference (the "Pier Plaza Area") .
Specifically, except as expressly provided
hereinbelow, LESSOR agrees for the benefit of
LESSEE that neither it nor the City shall sell
any food or beverages and neither it nor the City
shall sell or rent any other retail items in the
Pier Plaza Area nor shall LESSOR or the City .
permit or authorize any such sale or lease of
food, beverage, or retail items without first
having offered a right of first refusal to
LESSEE. If LESSOR or the City elect to permit or
authorize any such sale or lease activities to
occur within the Pier Plaza Area, LESSOR shall so
notify LESSEE in writing. Such notice shall
specify all of the material terms and conditions
on which LESSOR or the City is willing to permit
or authorize such activities, including without
limitation an identification of the permitted
use(s) , term, hours of operation (if applicable) ,
rental or other consideration, any requirements
for construction, repair, and maintenance of
irprovements, and insurance obligations, if
applicable. If LESSEE fails to exercise such
first right of refusal within sixty (60) days
after being so notified by LESSOR, LESSOR and the
City shall be free thereafter to enter into an
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5409u/2460/39 -4-
agreement with any third party acceptable to
LESSOR or the City to undertake such activities,
provided that the terms and conditions of the
agreement with the third party are identical to
those offered to LESSEE hereunder. If after
LESSEE fails to timely exercise its right of
first refusal, LESSOR or the City fail to enter
into a binding written agreement meeting such
re3uirements with a third party for an additional
period of six (6) months, LESSEE' s right of first
refusal shall again apply, and the parties shall
proceed in the same manner and within the same
times as set forth hereinabove for the the
initial offer to LESSEE. In addition, if after
entering into a binding written agreement with a
third party, the third party (including any
permitted successor or assign of the original
contracting party) ceases operations for a
continuous period of six (6) months, LESSEE' s
right of first refusal shall again apply, and
LESSOR shall offer any new, addition, or extended
business opportunity to LESSEE in the same manner
and within the same times as set forth
hereinabove for the initial offer to LESSEE.
Notwithstanding the foregoing, LESSEE' s right of
first refusal shall not apply to the occasional
sale of food, beverages, or retail items in the
Pier Plaza Area by a non-profit corporation or
association for a City- or LESSOR-sponsored
community special event.
C. Parking Revenue. Fees charged by LESSEE for use
of a parking space may be the greater of the
amount of Five Dollars ($5.00) per day, to be
annually adjusted by the Index capped annually at
seven percent (77.) or an amount equal to one
hundred and twenty percent (120%) of the maximum
per day rate charged by the City or LESSOR in a
City or LESSOR-owned parking structure. The
"Index", as used in this Lease shall be deemed to
mean The United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index
for All Urban Consumers, All Items Los Angeles-
Anaheim-Riverside Area (1982-84=100) . If at any
time the Index shall cease to exist in the format
recited herein, LESSOR shall substitute any
official index published by the Bureau of Labor
Statistics or successor or similar governmental
agency as may then be in existence that shall, in
LESSOR' s reasonable opinion, be most nearly
06/13/91
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V W)
equivalent thereto. In the event that the City
determines to allow a City parking permit to be
used in lieu of paying a per day fee in all other
City or LESSOR owned beach parking facilities,
the LESSEE shall allow the use of such a permit
and waive a parking charge. In the event LESSEE
provides evidence to LESSOR that the permit usage
is preventing the LESSEE from obtaining an
equitable rate of return in operating the parking
facility, adjustments may be made to the Parking
Fee charged as reasonably approved by LESSOR.
6. DEVELOPMENT OF THE PREMISES AND ADJACENT AREAS:
a. Scope of Development and Cost of Construction:
LESSEE shall construct or cause to be constructed
the "Improvements" on the Premises as set forth
in Section I of the Scope of Development (Exhibit
"D") . Except as expressly provided herein,
LESSEE shall construct or cause to be constructed
the Improvements at no expense to LESSOR.
Notwithstanding the foregoing, the cost of the
Structure Public Parking Spaces, which are to be
located in the parking structure on the Premises,
pursuant to the approved parking management plan,
and which are constructed or caused to be
constructed by LESSEE, shall be paid for by
LESSOR pursuant to Paragraph 7(c) of this Lease.
The additional debt cost to LESSEE of multi-level
parking as compared to at grade parking shall be
credited against the rental payments otherwise
due from LESSEE to LESSOR pursuant to Paragraph
7(d) of this Lease. LESSOR shall also be _
responsible for the costs of performing its _
obligations in Section II of the Scope of
Development and shall share a portion of the cost
of any required environmental remediation as set
forth in Paragraph 4 of the Conditions to
Commencement (Exhibit "C") . LESSEE shall, in
• addition, if authorized by the City and any other
applicable governmental entity with jurisdiction,
construct or cause to be constructed certain
grading, foundation, paving surfaces, retainer
walls and stairways sufficient to meet code
requirements for the "Pier Plaza Area" . The
value to the Agency of the Pier Plaza
construction work shall be up to an amount equal
to Three Hundred Thousand Dollars ($300,000) .
06/13/91
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�W1
b. Construction Schedule: Subject to the other
terms and conditions set forth herein, including
without limitation Paragraph 30 of the General
Conditions (Exhibit "B") , LESSEE shall begin and
complete all construction required of it within
the times specified in the Schedule of
Performance (Exhibit "E") . The Schedule of
Performance may be modified by approval of LESSEE
and the LESSOR' s Executive Director. LESSOR
agrees that any and all construction plan
checking and field inspections related to the
construction of the Improvements may be submitted
to deputy or independent plan checkers or field
inspectors hired by LESSEE but certified by
LESSOR and/or City. LESSOR further agrees that
the approval or certification of such deputy or
independent inspectors will not be unreasonably
withheld or conditioned.
C. Certificate of Completion: Promptly after
LESSEE s completion of construction of all the
Improvements, but excluding normal and customary
tenant improvement items, LESSOR shall furnish
LESSEE with a Certificate of Completion upon
written request therefor by LESSEE. LESSOR shall
also furnish partial Certificates of Completion
for individual buildings or portions of buildings
on the Premises. LESSOR shall not unreasonably
withhold any such Certificate of Completion.
Such Certificate of Completion shall be a
conclusive determination of satisfactory
completion of the construction required by this
Lease as to which the Certificate relates and the
Certificate of Completion shall so state. After
recordation of such Certificate of Completion,
any party then owning or thereafter purchasing
the improvements, leasing the Premises, or
otherwise acquiring any interest in the Premises
or improvements covered by the Certificate of
• Completion shall not (because of such ownership,
purchase, lease or acquisition), incur any
obligation or liability under this Lease with
respect to LESSEE' s initial construction
obligations hereunder.
Each Certificate of Completion of
construction shall be in such form as to permit
it to be recorded in the Recorder' s Office of
Orange County.
06/13/91
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�1
If LESSOR refuses or fails to furnish a
Certificate of Completion after written request
from LESSEE, LESSOR shall, within thirty (30)
days of written request therefor, provide LESSEE
with a written statement of the reasons LESSOR
refused or failed to furnish a Certificate of
Completion. The statement shall also contain
LESSOR' s statement of the actions LESSEE must
take to obtain a Certificate of Completion. If
the reason for such refusal is confined to the
immediate availability of specific items of
materials for landscaping, LESSOR will issue its
Certificate of Completion upon the posting of a
bond, letter of credit, or cash deposit by LESSEE
with LESSOR in an amount representing the fair
value of the work not yet completed as determined
by the Executive Director of the LESSOR.
Such Certificate of Completion shall not
constitute evidence of compliance with or
satisfaction of any obligation of LESSEE to any
holder of any mortgage, or any insurer of a
mortgage securing money loaned to finance the
improvements, or any part thereof. Such
Certificate of Completion is not a notice of
completion as referred to in the California Civil
Code, Section 3093.
7. RENT; PUBLIC PARKING PAYMENTS: Subject to
subparagraph (e) below and all of the other terms and
conditions set forth in this Lease, including without
limitation Paragraphs 7-9 of Exhibit "B", LESSEE shall pay to
LESSOR rent and LESSOR shall pay LESSEE to construct the beach
public parking as follows:
a. Percentage Rental:
(i) Basic Percentage. Beginning with the
date which is the first anniversary of the
Commencement Date, and continuing thereafter
until the date that is the earlier of
(A) the fifth anniversary of the date on
which the first restaurant on the Premises
opens for business to the public or (B) the
fifth anniversary of the deadline in the
Schedule of Performance for LESSEE to
complete construction of the Improvements
(Exhibit E 212) , LESSEE shall pay to LESSOR
a Percentage Rent equal to two percent (2%)
of the Gross Sales Receipts generated from -
the Premises during each calendar quarter or
06/13/91
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partial calendar quarter during such
period. Thereafter for the balance of the
term of this Lease and subject to Paragraph
7(a) (ii) and (iii) herein, LESSEE shall pay
to LESSOR a Percentage Rent according to the
following schedule:
Gross wales Percentage
Receipts Threshhold Rent Rate
(in millions of
dollars per year)
less than 30 2%
less than 40 2-1/2%
less than 50 30
less than 65 3-1/2%
65 and above 3-3/4%
Quarterly rent payments shall be determined
by multiplying the Gross Sales Receipts
generated for such quarter by the Percentage
Rent Rate used in the previous calendar
year. Once a Gross Sales Receipts
Threshhold is achieved in a calendar year,
the percentage rent Rate shall not be
reduced below such Percentage Rent Rate and
as each new Gross Sales Receipts Threshhold
is achieved, the new Percentage Rent Rate
shall be established and not subsequently
lowered notwithstanding that Gross Sales _ -
Receipts in a subsequent calendar year may
fall below a previously achieved
threshhold. In the event that the annual
Gross Sales Receipts reconciliation pursuant
to Paragraph 9 of Exhibit "B" reveals that a
higher Gross Sales Receipts Threshhold had
been reached in such preceeding calendar
year, LESSEE shall pay to LESSOR within
thirty (30) days after such determination an
amount equal to the Gross Sales Receipts for
such calendar year multiplied by the
difference between the prior Percentage Rent
Rate and the new Percentage Rent Rate for
the higher Gross Sales Receipts Threshhold.
06/13/91
5409u/2460/39 -9-
(ii) Major Renovation; Extension of Term;
Adjustment of Rent. Beginning with the
thirty-first (31st) year of the term of this
Lease and during the succeeding two ten (10)
year periods thereafter, LESSEE shall have
the right, but not the obligation, at any
time, to deliver to LESSOR written notice
that LESSEE is willing to undertake a major
renovation of the Premises, which, for the
purpose of this provision shall be an
expenditure by LESSEE and its subtenants,
within a twenty-four (24) month period, as
approved by LESSOR, in an amount equal to or
greater in value than fifty percent (50%) of
the total replacement cost of the
Improvements not including the parking
facilities and not including twenty-five
percent (25%) of the Furniture, Fixtures and
Equipment installed on the Premises at the
commencement of the twenty-four (24) month
renovation period. In the event LESSEE so
notifies LESSOR, LESSOR may then elect, in
LESSOR' s sole and absolute discretion,
either to: (P.) extend the term of this
Lease for an additional twenty-five (25)
years (the "Extended Term" ) and increase the
rent during the Extended Term as provided
hereinbelow, or (B) supplement LESSEE' s
financing costs to construct the proposed
major renovation by offsetting against the
rent otherwise due under this Lease an
amount equal to the difference in cost to
the LESSEE to finance the major renovation
calculated as provided herein. LESSOR' s _
election shall be made within ninety (90)
days after receipt of LESSEE' s written
notice, unless the time for LESSOR to make
said election is extended by a writing
approved by both parties.
In the event LESSEE elects to undertake a
major renovation and LESSOR elects to extend
the term, as provided in option (A) above,
the rent shall continue as set forth in
Paragraph 7a(i) until the commencement of
the Extended Term and then the Premises
shall be appraised according to the method
set out in Paragraph 7(e) below and the Rent
shall convert at the commencement of the
06/13/91
5409u/2450/39 -10-
Extended Term to the then "fair rental
value" (as established by the appraisal
pursuant to Paragraph 7(e) below) of the
existing use (the "Extended Term Rent") .
The Extended Term Rent shall increase at the
beginning of each successive five (5) year
period through the expiration of the
Extended Term by the multiple of the Index,
as defined below, however the application of
such Index shall result in a minimum
increase of three percent and maximum
increase of seven percent (7%) on a per year
basis even if the actual Index would dictate
a greater or lesser multiplier.
In the event LESSEE elects to undertake a
major renovation of the Premises and LESSOR
elects not to expend the term, as provided
in option (B) above, and if the major
renovation com.-nences (i.e. , building permits
are obtained and construction commences) in
the 31st lease year, the rent credit shall
commence at such time, shall continue in
effect for fifteen (15) years (subject to
carry-over of unused rent credit amounts, as
provided herein below) , and shall be
calculated as the difference in each of said
15 years between the hypothetical debt
service of fully amortizing 100% of the cost
of the major renovation (whether paid by
LESSEE or its subtenants) over a 30-year
term and the hypothetical debt service of
fully amortizing such cost over a 15-year
term, using LESSEE' s (or its subtenants' ) _
average cost of funds. If the major
renovation commences in or after the 41st
lease year, the rent credit shall be
calculated in the same manner, except that
the rent credit shall continue in effect for
10 years and the amount of the credit shall
equal the difference between the
hypothetical debt service on 30-year as
compared to 10-year financing. If the major
renovation commences between the 31st and
41st lease years, the term of the rent
credit and the hypothetical amortization
' period against which the 30-year financing
is compared shall be reduced by one year for
every two years after the 31st lease year in
which the major renovation commences. In no
event shall the application of the rent
06/13/91
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�j
credit result in the rent being reduced to
less then zero (i .e. , a payment by LESSOR to
LESSEE) . In the event that for any reason
there is any unused credit during any lease
year, the unused credit shall be carried
over to the following year or years with
interest accruing at the rate of eleven
percent (11%) per annum, compounded
annually, until the entire unused credit is
applied. If there is any unused credit at
the end of the 55-year term of this Lease,
the remaining balance of the credit shall be
forgiven and discharged at that time.
(iii) Base Percentage Rental If No Major
Renovation. In the event at year thirty-one
(31) of this Lease, LESSEE does not deliver
to LESSOR written notice that LESSEE is
willing to undertake a major renovation of
the Premises, as provided in subparagraph
(a) (ii ) above, and continuing for as long
thereafter as no major renovation is
undertaken, then a base rent shall be
established (the "Base Rent") by applying
the Percentage Rent Rate set forth in
subparagraph (a) (i) above to seventy-five
percent (75%) of the average of the Gross
Sales Receipts for years 28, 29 and 30.
This Base Rent shall be in force until year
41 at which point it shall be reset until
year 51 by applying the Percentage Rent Rate
set forth in subparagraph (a) (i) above to
seventy-five percent (75%) of the average
Gross Sales Receipts for years 38, 39 and
40. The process shall repeat in year 51 and
be based on seventy-five percent (75%) of
the average Gross Sales Receipts for years
48, 49 and 50. However, in no event shall
the Base Percentage Rent fall below a prior
• set base. If after the establishment of the
Base Rent LESSEE undertakes a major
renovation of the Premises pursuant to
subparagraph (a) (ii) above, the Base Rent
shall be terminated. If in any year a site
specific occurrence or a general economic
downturn results in the application of the
above Base Rent being a grossly unfair
burden on the LESSEE, the LESSEE has the
right to appeal the application of the Base
Rent as to a specific calendar year and
LESSOR may allow an abatement of all or a
06/13/91
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portion of the Base Rent requirement for a
given year. In the event that the parties
hereto cannot reach an accord on an appeal
of Base Rent, then LESSEE may appeal the
application of Base Rent by LESSOR to the
judge provided for in Paragraph 31 of
Exhibit "B" hereto. In such appeal, the
judge shall analyze the shortfall in Gross
Sales Receipts to determine if it is the
result of site specific or general market
conditions and not reasonably attributable
to the operational performance of LESSEE or
its subtenants. If the judge finds (i) that
site specific or general market conditions
are the cause of the shortfall and,
(ii) that such an application would be a
"grossly unfair" burden on the LESSEE, then
she shall have the authority to abate the
Base Rent in an amount that is fair and
equitable to the interests of both parties
hereto.
b. Subordination: LESSOR agrees to execute
appropriate documents required to
subordinate its right to receive rent
pursuant to this Lease for an amount not to
exceed Sixteen Million Two Hundred Fifty
Thousand Dollars ($16,250,000) for the
initial construction and take out financing
approved by LESSOR in accordance with
Paragraph 16.A of Exhibit "B. " The
subordination shall apply only to the
initial financing and shall decrease
simultaneously with the declining balance of - -
unpaid principal and accrued and unpaid
interest owing from time to time on the
initial financing. Such subordination shall
also apply to any refinancing of the initial
construction and/or take out financing to
the extent that the principal balance of the
loan is not increased and the amortization
period of the loan (as to any take out or
permanent financing) is not extended. Where
the subordination results in the failure to
pay the rent as calculated in
subparagraph a. above, the rent obligation
shall accrue to the extent not credited in
subparagraph d. below at an interest rate of
eleven percent (11%) . If in the event a
balance remains accrued at the termination
of this Lease such accrued rent payments
shall be forgiven.
06/13/91
5409u/2460/39 -13-
C. Public Parking Construction Payment. LESSEE
shall construct a parking structure deemed
sufficient pursuant to a parking management
plan approved by LESSEE, Agency Executive
Director and City in accordance with
Conditional Use Permit 90-17 (the "Parking
Management Plan") . The number of designated
public parking spaces to be located within
the lowest level of the parking structure
shall be two hundred and fifty (250) (the
"Structure Public Parking Space(s)");
provided, however, that said number may be
reduced by a maximum of 57 spaces based on
the approved Parking Management Plan. At
the time set forth in the Schedule of
Performance (Exhibit "E") , LESSOR shall pay
to LESSEE as compensation for the cost of
constructing the _Structure Public Parking
Spaces, an amount equal to Four Million
Dollars ($4,000,000) (250 spaces multiplied
by Sixteen Thousand Dollars ($16,000) per
space) , less the sum of the following:
(i) One Million Two Hundred Fifty Thousand
Dollars ($1,250,000) , and (ii) Forteen
Thousand Five Hundred Dollars ($14,500)
multiplied by the difference, if any,
between the original two hundred and
eighty-one (281) designated parking spaces
for the lowest level of the parking
structure and, if applicable, the lesser
number of designated parking spaces that
LESSEE is actually required to provide on
the lowest level of the parking structure
(after approval of the Parking Management
Plan) . LESSEE shall either pay prevailing
wages according to state law for that
portion of the parking structure which shall
provide the Structure Public Parking Spaces
or shall indemnify, defend and hold harmless
LESSOR and/or City from any claim or action
arising out of LESSEE' s failure to pay
prevailing wages and/or LESSOR' s failure to
make such payment mandatory in this Lease.
The form of the bid package for the parking
structure shall be submitted to the City
Attorney' s office for review and approval.
The submission shall be deemed approved
thirty (30) days from the date of submittal
unless a written statement itemizing
objections is received by LESSEE prior to -
the expiration of such thirty (30) day
period.
06/13/91
5409u/2460/39 -14-
d. Rent Credit: Notwithstanding any other
provision of this Lease to the contrary,
LESSEE shall be entitled to a credit against
the first rental payments otherwise due in
an amount equal to the difference between
LESSEE' S amortized debt on the approved cost
of construction of the multi-level parking
structure spaces required to provide parking
for the commercial uses on the Premises
(assuming a 30-year loan at 11% mortgage
constant) and what the amortized debt for
the cost of the construction of a single
level at-grade parking facility would have
been (assuming a 30 year loan at 11%
mortgage constant) . The parties agree for
purposes of this paragraph that the
difference in cost of the amortized debt for
a single level at grade parking facility and
the structured parking as proposed in the
Scope of Development (Exhibit "D") is equal
to 220 quarterly payments of One Hundred
Eight Thousand Eight Hundred Seventy-Five
Dollars ($108,875) (the "Differential Cost" )
due simultaneous to the first 120 Rent
payment dates. The unapplied principal
balance of such credit shall bear interest
at the rate of eleven percent (11%) per
annum compounded annually, commencing upon
the due date of the first rental payment
date as provided in Paragraph 7(a) above and
continuing thereafter until the rent credit
has been fully applied. Notwithstanding the
above, LESSOR shall have the right to prepay
the amount of the Differential Cost without .
penalty and with only such interest as has
already accrued. In the event that due to
the subordination provision of
subparagraph c. above, or other conditions,
the term of this Lease is completed with
• insufficient funds generated under the rent
provisions to offset the Agency' s obligation
for Differential Cost then any remaining
balance of principal and accrued interest
shall be forgiven upon the termination of
this Lease.
e. A2praisal Procedure: In the event that this
Lease is extended pursuant to Subparagraph
(ii) of Paragraph 7(a) above, the Premises
shall be appraised at the commencement of
the Extended Term at the then current fair
06/13/91
5409u/2460/39 -15-
rental value of the Premises determined in
accordance with the then current and actual
use being made of the Premises as permitted
by this Lease and without assuming any
change of use whether or not permitted by
the terms of the Lease and without regard to
any residual value for any future or
potential use. The appraisal shall not
include the value of the existing
Improvements on the Premises and shall only
consider the existing Improvements on the
Premises for the purpose of determining the
then current and actual use being made of
the Premises. The appraisal procedure shall
be conducted as follows:
(i) Such appraisal shall be conducted and
made by three (3) appraisers, each of whom
shall be a member of the American Institute
of Real Estate Appraisers, qualified for the
purpose of appraising the Premises. The
appraisal by each appraiser shall be made in
accordance with the then standard practices
of the American Institute of Real Estate
Appraisers or any successor organization.
(ii) Either LESSOR or LESSEE shall appoint
in writing an appraiser and give written
notice thereof to the other, and within
fifteen (15) days after service by such
party on the other of such notice, the other
party shall, in a like manner, appoint an
appraiser and give written notice thereof to
the other party. In case of failure of .
either party to appoint an appraiser, the
other party shall have the right to apply to
the president of the local Chapter of the
American Institute of Real Estate Appraisers
in the County in which the premises are
situated to appoint an appraiser to
represent the defaulting party. In the
event the president of such Chapter declines
to appoint an appraiser, the executive
committee of said Chapter may appoint an
appraiser for the defaulting party. In the
event that the executive committee of said
Chapter declines to appoint an appraiser,
the party having appointed an appraiser
shall have the right to appoint a second
appraiser to act on behalf of the party
failing to appoint an appraiser. The two
appraisers thus appointed, in either manner,
06/13/91
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1
shall select and appoint in writing a third
appraiser and give written notice thereof to
LESSOR and LESSEE, of if within ten (10)
days after the appointment of the second
appraiser the two appraisers so appointed
shall fail to appoint a third appraiser,
then either party hereto may apply the
default methodology for the selection of an
appraiser outlined above.
(iii) The three (3) appraisers so appointed
(in either manner) shall promptly fix a time
for completion of the appraisal, which time
shall be no later than ninety (90) days from
the date of the appointment of the last
appraiser. The appraisers shall notify
LESSOR and LESSEE as to the said date fixed
for such completion. On that date the three
(3) appraisers shall submit their appraisals
in writing in the then usual form to LESSOR
and LESSEE. The parties agree that for the
purpose of calculating the value to be
determined by appraisal the appraised value
shall be deemed to be that amount which is
determined by taking the average of the two
(2 ) appraisal figures which are closest to
each other. each of the parties hereto
shall pay for the services of its appointee
(whether or not said appraiser is selected
by default) and one-half (1/2) of the costs
of the services for the third appointee.
f. Cooperation: LESSOR and LESSEE agree to
cooperate with one another and with any
approved or permitted lender in executing
such documents as may be reasonably
requested by such other party or lender
confirming the percentage rental then in
effect (paragraph 7(a)) and the amount of
• the rent credit then existing (paragraphs
7(a) (ii) and 7(d) ) .
S. SECURITY DEPOSIT: Within ten (10) days after the
Commencement Date, LESSEE shall deposit with LESSOR the sum of
Fifty Thousand Dollars ($50,000) (in the form of a certificate
of deposit in the name of LESSOR, or an irrevocable and
unconditional letter of credit, for two hundred seventy (270)
days which shall be sight draft, of a term, in a form, and by a
bank all acceptable to LESSOR in its reasonable discretion) as
a security deposit for the performance by LESSEE of the
provisions of this Lease required to be performed by LESSEE
prior to LESSOR' s issuance of its final Certificate of
06/13/91
5409u/2460/39 -17-
�1
Completion for the Improvements. If the security deposit is a
certificate of deposit, interest shall be credited to LESSEE
and withdrawn and paid to LESSEE quarterly. If it is a letter
of credit, the letter of credit shall authorize the LESSOR to
draw funds from the letter of credit by presenting a sight
draft and certification for payment in the event of a default
as defined in Exhibit "B" Paragraph 18 of this Lease by
LESSEE. It shall be a condition of the letter of credit that
it shall be deemed automatically extended without amendment for
two hundred seventy (270) days from its current or future
expiry date unless, not less than thirty (30) days prior to
such expiry date, the issuer shall notify the LESSOR by
registered mail that the issuer has elected not to renew the
letter of credit for any additional period of time. In that
event, LESSEE shall immediately extend or replace the letter of
credit. If LESSEE has failed to extend or replace the letter
of credit ten (10) days prior to its expiry date, the LESSOR
may draw against the letter of credit by presenting LESSOR' s
sight draft. Provided, however, that if the LESSOR draws down
on the letter of credit pursuant to this Paragraph 8, the
LESSOR shall return such funds to LESSEE within ten (10) days
of LESSEE' s providing a new letter of credit consistent with
the provisions of this Paragraph 8.
During the period that LESSOR is entitled to hold the
Security Deposit, if LESSEE is in default, and such default is
not cured and is not being cured in accordance with paragraph
18 of Exhibit "B, " LESSOR can use the security deposit, or any
portion of it, to cure the default or compensate LESSOR for all
damages sustained by LESSOR resulting from LESSEE' s default and
LESSEE shall immediately on demand pay to LESSOR a sum equal to
the portion of the security deposit expended or applied by
LESSOR as provided in this paragraph so as to maintain the
security deposit in the sum initially deposited with LESSOR.
The security deposit (or such remaining portion thereof that
has not been used by LESSOR to cure LESSEE' s default or to
compensate LESSOR for damages sustained by LESSOR resulting
from LESSEE' s default) shall be refunded promptly after the
earlier of the following: (i) the date upon which LESSEE has
• completed the Improvements (excluding tenant improvements) and
LESSOR is obligated to issue its final Certificate of
Completion, or (ii) the expiration or termination of this
Lease. LESSOR' s obligations with respect to the security
deposit are those of a debtor and not a trustee. LESSOR shall
be permitted to maintain the security deposit separate and
apart from LESSOR' s other funds or can co-mingle the security
deposit with LESSOR' s funds.
9. CONDITION OF TITLE; COVENANT OF QUIET ENJOYMENT:
Subject to LESSEE' s satisfaction or LESSOR' s waiver of all of
the Conditions to Commencement (Exhibit "C" hereto) to be
satisfied by LESSEE, and subject to the exceptions in
06/13/91
5409u/2460/39 -18-
Exhibit "C" hereto, LESSOR covenants to convey to LESSEE the
leasehold estate to the Premises in the "Approved Title
Condition" referenced therein. LESSOR further covenants that,
at the Commencement Date, LESSOR shall cause First American
Title Insurance Company, or such other title company as may be
mutually approved by LESSOR and LESSEE, (the "Title Company" ) ,
to deliver to LESSEE an ALTA Survey and ALTA Extended Coverage
(Form 8) policy or policies of title insurance issued by the
Title Company insuring that the leasehold estate is vested in
LESSEE in such condition. The Title Company shall provide
LESSOR and City with a copy of the title policy. The total
amount of title insurance coverage for the Premises shall be
the sum of Five Million One Hundred Thousand Dollars
($5,100,000) .
LESSOR shall pay that portion of the cost and expenses of
the premium for the title policy which is equal to what the
premium would have been if the titlV policy were a CLTA policy,
and LESSEE shall pay the balance of such premium. LESSEE shall
pay the cost of any new survey required in order to obtain the
title policy. LESSEE shall pay the cost for any additional
coverage or endorsements that it may request.
Subject to the exceptions in Exhibit "C" hereto, LESSOR
covenants that LESSEE, after the Commencement Date and upon
performing the covenants in the Lease required to be performed
by LESSEE, may quietly have, hold, and enjoy the Premises
during the term of this Lease without hindrance or interruption
by LESSOR or any party claiming by, through, or under LESSOR.
Not by way of limitation of the foregoing, and except as
specifically set forth in Exhibit "C", in the event any adverse
claim is made or threatened impairing LESSEE' s leasehold title,
other than a claim by any part claiming by, through, or under
LESSEE, LESSOR and City, at their sole expense, shall take all
required actions, including filing and diligent prosecution of
quiet title and/or ejectment suits if necessary, to remove such
adverse claim or cloud on LESSEE's title.
Subject to the overall limit of expenses by LESSOR in
- Exhibit "D" VII.6, LESSOR shall pay those costs necessary to
relocate all currently existing LESSEEs and subtenants on the
Premises pursuant to Exhibit "D" III .S.
LESSOR further covenants to deliver to LESSEE the fully
executed Nondisturbance and Recognition Agreement in the form
attached to this Lease as Exhibit "J", with such delivery to
occur promptly after LESSOR receives said document from City
and prior to the Commencement Date.
06/13/91
5409u/2460/39 w19-
10. NOTICES: Any notice, demand, request, consent,
approval or communication that either party desires or is
required to give to the other party or any other person shall
be in writing and either served personally or sent by prepaid
first class mail to the other party at the address set forth
below:
TO LESSOR:
Redevelopment Agency of the City of Huntington Beach
Attn: Executive Director/City Administrator
2000 Main Street
Huntington Beach, California 92648
TO LESSEE:
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. 50th Street
Vernon, CA 90058
WITH COPIES TO:
Jonathan Chodos
2559 So. Sepulveda Blvd.
Los Angeles, CA 90025
and any leasehold or subleasehold mortgagee
approved by LESSOR pursuant to Paragraph 16A
of Exhibit "B" that requests in writing
that LESSOR provide such notice.
Either party may change either its designee or its address by
notifying the other party of such change. _
11. THIRD PARTY BENEFICIARY: The City (but no other
person or entity) shall be deemed a third party beneficiary of
this Lease.
12. REPRESENTATIONS BY LESSEE: The LESSEE represents and
warrants to the LESSOR as follows:
1. The LESSEE has full authority from all prior
interested parties, as specified in recital of Paragraph 1 to
this Lease to execute and deliver this Lease and any and all
other agreements and documents required to be executed and
delivered by the LESSEE in order to carry out, give effect to,
and consummate the transactions contemplated by this Lease.
06/13/91
5409u/2460/39 -20-
2. The LESSEE does not have any material contingent
obligations or any material contractual agreements which could
materially adversely affect the ability of the LESSEE to carry
out its obligations hereunder.
3. There are no material pending or, so far as is
known to the LESSEE, threatened, legal proceedings to which the
LESSEE is or may be made a party or to which any of its
property is or ray become subject, which have not been fully
disclosed in the material submitted to the LESSOR which could
materially adversely affect the ability of the LESSEE to carry
out its obligations hereunder.
4. There is no action or proceeding pending or, to
the LESSEE' s best knowledge, threatened, looking toward the
dissolution or liquidation of the LESSEE and there is no action
or proceeding pending or, to the LESSEE' s best knowledge,
threatened by or against the LESSEE which could affect the
validity and enforceability of the terms of this Lease, or
materially and adversely affect the ability of the LESSEE to
carry out its obligations hereunder, (excepting only the
potential state lands commission claim set out in Exhibit "C"
Paragraph 3) .
Each of the foregoing items 1 to 4, inclusive, shall
be deemed to be an ongoing representation and warranty. The
LESSEE shall advise the Agency in writing if there is any
change pertaining to any matters set forth or referenced in the
foregoing items Z to 4, inclusive.
13. EXHIBITS - INCORPORATION INTO LEASE: The following
exhibits referred to in this Lease are attached hereto and by
this reference incorporated herein:
Exhibit "A" Legal Description of Premises w
Exhibit "B" General Conditions
Exhibit "C" Conditions to Commencement
Exhibit "D" Scope of Development
Exhibit "E" Schedule of Performance
Exhibit "F" Certificate of Commencement Date
Exhibit "G" (Reserved)
Exhibit "H" Site Map
Exhibit "I" Master Lease
Exhibit "J" Nondisturbance and Recognition Agreement
06/13/91
5409u/2460/39 -21-
14. SUBLEASE: LESSOR and LESSEE acknowledge that this
Lease is a sublease of the Master Lease, subject and
subordinate to the covenants, conditions and terms of the
Master Lease and in no event may the term of this Lease extend
beyond the term of the Master Lease, with the understanding
that LESSEE is not obligated to perform any of LESSOR' s
obligations under the Master Lease.
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public
body, corporate and politic
1991 By
Chairman
ATTEST:
Agency Secretary
APPROVED AS TO FORM: INITIATED AND APPROVED AS TO
CONTENT:
Agency Special Counsel Deputy City Administrator/
Economic Development
REVIEWED AND APPROVED APPROVED: _
AS TO FORM:
Agency Attorney Executive Director
STANLEY M. BLOOM, an unmarried
man ("LESSEE")
06/13/91
5409u/2460/39 -22-
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On this day of 19_, before me,
the undersigned, a Notary Public in and for said State,
personally appeared personally known to me (or
proved to me on the basis of satisfactory evidence) to be the
person who executed this instrument as the Chairman of the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and
acknowledged to me that said Agency executed it.
WITNESS my hand and official seal.
(SEAL)
STATE OF CALIFO A }
s
COUNTY O 1 ,. �� y s.
On t day of v�� 19 /before me,
the undersigned, a Notar P i in ar�d for said State,
personally appeared .� (ooca personally
known to me or proved to m n the basis of satisfactory _
evidence to be the person whose name is subscribed to the
within instrument and acknowledged that he/she executed the
same.
WITNESS my hand and o fic' al seal.
Rc!
(SEAL) �� `;:::Er�T))�itd///
i'(�
ti
EXHIBIT "A"
LEGAL DESCRIPTION
That portion of Huntington Beach, County of Orange, State of
California as shown on a map recorded in Book 3, Page 36 of
Miscellaneous Maps in the office of the County recorder of said
county described as follows:
Beginning at the centerline intersection of
Pacific Coast Highway and Lake Street, shown
as Ocean Avenue and First Street respectively,
on said mentioned map; thence along the
centerline of Pacific Coast Highway south
48021*42" east 37.50 feet to the intersection
with the southwesterly extension of the
southeast right-of-way line of Lake Street;
thence south 41038' 18" west 50.00 feet to the
true point of beginning; thence north
48°21'42" west 1,020.00 feet; thence south
41038' 38" west 200.00 feet; thence south
48021'42" east 1020.00 feet; thence north
41°38' 18" east 200.00 feet to the true point
of beginning.
06/13/91 EXHIBIT "A"
5409u/2460/39
EXHIBIT "B"
GENERAL CONDITIONS
TABLE OF CONTENTS
Paragraph # Caption
1. Charge for Late Payment
2. Utilities
3 . Construction of Improvements
by LESSEE
4. Signs
5. Destruction
6. Maintenance
7. Cross Rental Receipts
8. Rent Payment Procedure and
Accounting
9. Records, Books of Account,
Accounting Statements and Audits
10. Insurance
11. Indemnity _
12. Taxes and Assessments
13. Unlawful Use
14. Abandoned Personal Property
15. Holding Over
16. Assigning, Subletting and
Encumbering
17. Successors in Interest
18. LESSEE' s Default
19. LESSOR'S Remedies
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 1 of 35
20. LESSOR' s Default
21. Quitclaim of LESSEE' s Interests
Upon Termination
22 . Total Taking
23. Partial Taking
24. Eminent Domain Award
25. Amenchments
26. Captions
27. California Law
28. Waiver .
29. Nondiscrimination
30. Force Majeure
31. Resolution of Disputes
32. Time
33 . Non Disturbance and Recognition
34. Estoppel Certificate
35. Hazardous Waste
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 2 of 35
EXHIBIT "B"
GENERAL CONDITIONS
1. CHARGE FOR LATE PAYMENT: Rent not paid when due shall
accrue interest at the rate of twelve percent (12%) per annum
commencing five days from the date due until paid.
2 . UTILITIES: LESSOR agrees to provide, at no expense to
LESSEE, all Utilities (water, sewer, gas, electrical, and
telephone) required for the development, use and maintenance of
the Improvements, with sufficient capacities to adequately
service the Premises, with such Utilities to be located on the
Premises or stubbed no farther away than 3 feet from the curb
within the Premises along the west side of Pacific Coast
Highway. LESSEE agrees to extend all Utilities from said
locations and to be responsible for tie-ins and metering.
LESSEE shall make all arrangements for and pay for all Utility
services furnished to or used by it, including without
limitation gas, electricity, water, sanitary sewer, cable
television, telephone service, trash collection, and Utilities
used or consumed at public rest rooms to be constructed by
LESSEE on the Premises,
3. CONSTRUCTION OF IMPROVEMENTS BY LESSEE:
a. Statement of Construction Costs and "As Built"
Plans: Prior to LESSOR s issuance of its final
Certificate of Completion for the Improvements
described in the Scope of Development (Exhibit .
"D" ) , LESSEE shall furnish LESSOR a complete set
of "As-Built" plans and an itemized statement of _
the actual construction cost of such
improvements. The statement of cost shall be
signed by LESSEE or its responsible agent and
sworn to under penalty of perjury.
b. Alterations: Subject to obtaining all requisite
governmental permits and authorizations, LESSEE
shall have the right to make non-structural
alterations to the interior of any buildings
located upon the Premises, provided that the same
when complete are of a character which LESSEE
reasonably determines do not adversely affect the
value of the improvements and the rental value
thereof immediately before such alteration.
LESSEE shall not make or permit any significant
structural or exterior alterations, additions or
improvements to be Made to or upon the Premises
inconsistent with the approved plans referenced
in the Scope of Development (Exhibit "D" ) as the
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 3 of 35
same may be revised from time to time, without
first obtaining the written approval of LESSOR,
which approval shall not be unreasonably
withheld, conditioned or delayed.
Notwithstanding the foregoing, changes required
by authorized construction inspectors in order to
comply with applicable governmental requirements
shall be exempt from this approval requirement.
C. Improvements to Become Property of LESSOR:
Subject to subparagraph (d) below, all buildings,
improvements and facilities, exclusive of Trade
Equipment and personal property constructed or
placed upon the Premises by LESSEE, must, upon
completion, be free and clear of all liens,
claims, or liability for labor and materials
(excepting rights of lenders, approved pursuant
to paragraphs 16.A and C and Equipment LESSORs
referenced in paragraph 16.E herein) , and all
such improvements and facilities, exclusive of
Trade Equipment and personal property, shall
become the property of LESSOR at the expiration
of this Lease, as it may be extended as provided
herein, or upon the earlier termination hereof
and, upon the termination of the Master Lease,
shall become the property of City.
d. Mechanic' s Liens: LESSEE shall at all times
indemnify and save LESSOR and City harmless from
all claims for labor and materials in connection
with construction, repair, alteration, and
installation of all structures, improvements,
equipment, and facilities upon the Premises, and
from the cost of defending against such claims, .
including reasonable attorney' s fees.
In the event of a lien imposed upon the Premises
as a result of such construction, repair,
alteration, or installation, LESSEE shall either:
(1) Record a valid Release of Lien; or
(2) Deposit with LESSOR cash or an irrevocable
letter of credit in form and content
reasonably acceptable to LESSOR' s Executive
Director in an amount equal to 125% of the
amount of the lien and authorize payment to
the extent of said deposit to any subsequent
final judgment holder that may arise as a
matter of public record from litigation with
regard to the lienholder' s claim; or
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 4 of 35
(3) Procure and record a bond, in accordance
with Section 3143 of the California Civil
Code, which frees the Premises from the
claim of the lien and from any action
brought to foreclose the lien.
Should LESSEE fail to accomplish one of the above within
ninety (90) days after the filing of such a lien, but in no
event after final judgment is entered, such failure shall be a
material default under this Lease. If LESSEE deposits cash or
a letter of credit or records a bond, as provided herein,
LESSOR shall promptly return the same (or unused portion
thereof) after the release of lien or satisfaction of judgment
is recorded, or LESSEE delivers other evidence reasonably
satisfactory to LESSOR that the dispute has been finally
resolved.
4. SIGNS: LESSEE, at its cost, shall have the right to
place, construct., and maintain exterior signs on the Premises
and the Improvements to be constructed by LESSEE thereon in
accordance with the plans approved by LESSOR and the City as
the same may be revised from time to time. LESSEE shall not
have the right to place, construct, or maintain on the Premises
any other exterior sign, advertisement, awning, banner or
decoration, except as permitted under the Huntington Beach
Ordinance Code.
S. DESTRUCTION:
a. Destruction Due to Risk Covered by Insurance:
If, during the Lease term, the Improvements are
totally or partially destroyed from a risk
covered by the insurance described in paragraph
10(c) of these GENERAL CONDITIONS, this Lease .
shall not terminate and LESSEE shall promptly and
diligently restore or cause to be restored the
Improvements to substantially the same condition
as they were in immediately before such
destruction, whether or not the insurance
• proceeds are sufficient to cover the actual cost
of restoration; provided, however, that: (i) if
such destruction occurs during the last ten (10)
years of the term of this Lease, as may be
extended pursuant to Paragraph 7(a) (ii) of the
Lease, LESSEE may elect not to restore the
Premises and to terminate this Lease, and (ii) if
then-existing laws do not permit restoration of
the Improvements to within 95% of the size and
layout existing immediately before such
destruction, then LESSEE may either elect to
restore pursuant to the then-controlling laws and
regulations or LESSEE may elect to terminate this
Lease. If existing laws do not permit the
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 5 of 35
�J
restoration, LESSEE may elect to terminate this
Lease by giving notice to LESSOR. In the event
this Lease is terminated as to all or any portion
of the Premises, LESSOR and LESSEE shall share
any excess insurance proceeds on the basis of
their respective interests in the Improvements
after payment of any outstanding balance due any
leasehold and subleasehold mortgagees. LESSEE' s
election to terminate pursuant to this Paragraph
5(a) shall be made by giving written notice to
LESSOR no later than one hundred twenty (120)
days after the date of the casualty loss.
b. Destruction Due to Risk Not Covered by
Insurance: If, during the Lease term, the
Improvements are totally or partially destroyed
from a risk not covered by the insurance
described in paragraph 10(c) of these GENERAL
CONDITIONS, this Lease shall not terminate except
as expressly provided herein, and LESSEE shall
restore the Improvements to substantially the
same condition they were in immediately before
destruction; provided, however, if such
destruction occurs during the last 10 years of
the term of this Lease as may be extended or the
cost of restoration exceeds twenty percent (20%)
of the replacement value of the Improvements
immediately before their destruction, or if then
existing laws do not permit restoration; LESSEE
may elect not to restore the Premises and to
terminate this Lease, and (ii) if then-existing
laws do not permit restoration of the
Improvements to within 95% of the size and layout
existing immediately before such destruction,
then LESSEE may either elect to restore pursuant
to the then-controlling laws and and regulations,
or LESSEE may elect to terminate this Lease. In
the event that LESSEE elects to terminate this
Lease he shall give notice of such election to
LESSOR no later than one hundred twenty days
after the date of the casualty loss.
C. Vo Abatement of Rent: Provided that business
interruption insurance is available at
commercially reasonable rates to LESSEE in the
insurance market (as referenced in paragraph
10(d) and (e) below) , there shall be no abatement
or reduction of rent in the event -of a total or
partial destruction of the Improvements. If,
however, LESSEE suffers such a casualty loss
during a period for which business interruption
insurance is not so available, and this Lease or
portion thereof is not terminated pursuant to
subparagraphs (a) or (b) of this Paragraph 5, the
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 6 of 35
Percentage Rent shall be abated only as to that
portion of the Improvements rendered not
reasonably usable by the casualty loss in an
amount equal to the Percentage Rent generated by
that portion of the Improvements during the same
period in the previous year or, if such figures
are not available, in an amount determined by
dividing the square footage of gross leasable
area rendered unusable by the casualty loss by
the total gross leasable area on the Premises
immediately prior to the casualty loss and
multiplying the remainder by the Percentage Rent
payable during the same time period in the
previous year. The period of abatement shall run
from the date of the casualty loss to the earlier
of (i) the date on which LESSEE completes
restoration of the Premises (or portion thereof)
or (ii) the date on which LESSEE, exercising
reasonable diligence, should complete restoration
of the Premises (or portion thereof) .
6. MAINTENANCE:
a. LESSEE' s _Obligation: LESSEE, at its cost,
shall keep and maintain the Premises and all
improvements of any kind which may be
constructed, installed or made thereon (including
the public rest rooms designated in the Scope of
Development) in good condition and in substantial
repair. LESSEE expressly agrees to maintain the
Premises (including the designated public rest
rooms) in a safe, clean, wholesome and sanitary
condition and in compliance with all applicable
laws. LESSEE further agrees to provide approved _
containers for trash and garbage and keep the
Premises free and clear from accumulations of
rubbish and litter. LESSOR shall have the right
to enter upon and inspect the Premises at any
time for cleanliness and safety. Such entry and
• inspection of exterior areas may occur at any
time without notice to LESSEE; entry and
inspection of interior areas may occur during
normal business hours, with a minimum of
seventy-two (72) hours prior notice (except in
the event of emergency), and shall be conducted
in a manner so as to minimize interference with
the operation of businesses on the Premises to
the maximum extent feasible consistent with the
legitimate purpose of the inspection. LESSEE
shall designate in writing to LESSOR a
representative who shall be responsible for
day-to-day operation.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 7 of 35
b. LESSOR' s Right to Repair: If LESSEE fails to
maintain the Premises or make repairs or
replacements as required herein, LESSOR may
notify LESSEE in writing of said failure. Should
LESSEE fail to correct the situation or commence
to correct the situation within a reasonable time
thereafter, but in no event less than thirty (30)
days (except in those instances where a shorter
time is necessary to protect the public health,
safety, and welfare) , and thereafter diligently
proceed to complete such correction, LESSOR may,
but shall not be required to, enter onto the
Premises to make the necessary correction, and in
such event the reasonable cost thereof, including
but not limited to the cost of labor, materials,
equipment, and administration, shall be deemed
additional rent to be paid by LESSEE within
thirty (30) days of receipt of a statement of
said cost from LESSOR. LESSOR may, at its
option, choose other remedies available herein,
or by law.
7. GROSS SALES RECEIPTS:
(a) Except as specifically provided in subparagraph
(b) below, the term "Gross Sales Receipts" as
used herein shall mean the total of all sales
produced on the Premises (or any portion thereof)
and received by any operator and/or sublessee in
the course of their business, including without
limitation, sales of food, beverage or concession
stems and the charges for the use or rental of
portions of the Premises or equipment or
supplies, vending machines sales and the sales
price of any furnishings, fixtures and equipment
or capital assets sold which are not replaced.
(b) The following shall be excluded from the
definition of "Gross Sales Receipts": meals
furnished to employees without charge; tips
retained by employees or service charges in lieu
of tips passed on to employees; bad debts but to
the extent they are subsequently collected the
net recovery shall be added to Gross Sales
Receipts; receipts from customers that are later
rebated and/or refunded; income from parking
services operation; interest or service or other
carrying charges for sales on credit; the amount
of all sales and excise tax receipts which are
accounted for and paid by LESSEE to any
governmental agency; the sales price of any
furnishings, fixtures, and equipment or capital
assets sold by LESSEE; and investment income not
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 8 of 35
associated with the normal course of operation of
LESSEE' s business or. the Premises.
8. RENT PAYMENT PROCEDURE AND ACCOUNTING:
a. Accounting Year: The phrase "accounting year" as
used herein shall be a period of twelve (12)
consecutive full calendar months commencing on
January 1. Any payment period or period which is
less than twelve full calendar months is a
partial accounting year.
b. Payment of Rentals:
(1) Percentage Rent and Parking Payment:
Beginning with the date which is the first
anniversary of the Commencement Date, and
within thirty (30) days after the end of
each calendar quarter during the remainder
of the Lease Term, LESSEE shall pay to
LESSOR an amount determined in accordance
with Section 7 of the Lease for such
period. At the end of each accounting year
during the Lease term, promptly after LESSEE
has submitted to LESSOR LESSEE' s sales tax
receipt reports, as provided in paragraph 9
below, any necessary adjustment to the
Percentage Rent for such year shall be made
in the manner specified in subparagraph (3)
of this Paragraph 8(b) .
(2) Application of Rent Credit: During the
periodof time that LESSEE'S rent credit is
being applied, in accordance with Paragraphs - -
7(a) (ii) and 7(d) of the Lease, LESSEE shall
provide to LESSOR, at the times that rental
payments would otherwise be due hereunder, a
written statement or statements itemizing
(i) the amount of Percentage Rent otherwise
due at such time, (ii) the amount of the
Rent Credit being applied against such
rental obligation, and (iii ) either the
amount of the Rent Payment required to be
made at that time or the remaining balance
of the unapplied Rent Credit (including
accrued interest through that date) .
(3) Place of Payment and Filing: Rent payments
and rent credit statements shall be
delivered to and accounting statements shall
be filed with the Executive Director of
LESSOR, 2000 Main Street, Huntington Beach,
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 9 of 35
California 92648. The designated place of
payment and filing may be changed at any
time by LESSOR upon written notice to
LESSEE. Rent payments may be paid by check
made payable to The Redevelopment Agency of
the City of Huntington Beach.
A duplicate copy of all statements and
reports herein required shall also be filed
with the Finance Director of the City of
Huntington Beach.
9. _RECORDS, BOOKS OF ACCOUNT, ACCOUNTING STATEMENTS, ACID
AUDITS: LESSEE shall keep or cause to be kept at the Premises,
or at LESSEE' s principal place of business in Southern
California, in accordance with generally accepted accounting
principles, full and accurate books of account, records, cash
receipts and other pertinent data showing the Gross Sales
Receipts produced by businesses operating on the Premises.
Such books of account, records, cash receipts and other
pertinent data shall be kept for a period of four (4) years
after the end of each accounting year and partial accounting
year. The receipt by LESSOR of any statement, or any payment
of percentage rent for any period, shall not bind LESSOR as to
the correctness of the statement or the payment. Subject to
the limitations set forth in the next paragraph LESSOR shall be
entitled at any time within four (4) years after the end of an
accounting year or partial accounting year, upon reasonable
notice to LESSEE but in no event less than 72 hours, to inspect
and examine all LESSEE' s books of account, records, cash
receipts and other pertinent data relating to such accounting
year or partial accounting year, during normal business hours,
so LESSOR can ascertain the amount of Percentage Rent due
LESSOR. In no event shall LESSOR' s inspection exceed ninety
days. LESSEE shall cooperate fully with LESSOR in making the
inspection.
Within ninety (90) days after the end of each accounting
year or partial accounting year, LESSEE shall at its own
• expense submit to LESSOR financial statements including a
balance sheet and income statement prepared by an independent
certified public accountant, which shall specifically include
with respect to the preceding accounting year or partial
accounting year: (i) the amount of Gross Sales Receipts for
each business operating on the Premises; and (ii) the total
Percentage Rent, if any, paid by LESSEE in and for such year.
LESSOR shall also be entitled, no more than once for each
accounting year, to audit LESSEE' s and the Sublessee' s, who
operate businesses on the Premises, books of account, records,
cash receipts and other pertinent data to determine the Gross
Sales Receipts for the entire Premises. The audit shall be
limited to the determination of Gross Sales Receipts and shall
be conducted during usual business hours at the Premises or at
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 10 of 35
the office at which LESSEE (or its Subleasee) maintain(s) its
records within a ninety (90) day period. If the audit shows
that there is a deficiency in the payment of Percentage Rent,
the deficiency shall come immediately due and payable as
additional rent or as an offset to any rent credit as defined
in Section 7(a) (ii) or 7(d) of the Lease then outstanding. The
cost of the audit shall be paid by LESSOR unless the audit
shows that LESSEE understated Gross Sales Receipts by more than
five percent (5%) , in which case LESSEE shall pay all LESSOR' s
cost of the audit. If within six (6) months after receiving
the results of any audited financial statements by LESSEE' s
certified public accountant with respect to any accounting year
or partial accounting year, LESSOR does not deliver a written
notice to LESSEE disputing LESSEE' s calculation or payment of
Percentage Rent for said year, LESSOR shall be conclusively
deemed to have accepted LESSEE' s calculation or payment, and
thereafter LESSOR shall neither reinspect or reaudit LESSEE' s
records nor demand payment of additional Percentage Rent for
said year. If within thirty (30) days after receiving the
results of its own audit with respect to any accounting year or
partial accounting year, LESSOR does not deliver a written
notice to LESSEE disputing LESSEE' S calculation or payment of
Percentage Rent for said year, LESSOR shall be conclusively
deemed to have accepted LESSEE' s calculation or payment, and
thereafter LESSOR shall neither reinspect or reaudit LESSEE' S
records nor denand payment of additional Percentage Rent for
said year.
10. INSURANCE: LESSEE, at its cost, shall maintain or
cause to be maintained during the entire Lease tern the
following policies of insurance:
a. Public liability and property damage insurance
with combined single limits of at least .
$5,000,000, part of which may be provided in the
form of umbrella coverage. LESSOR and City shall
be named as an additional insured and the policy
or policies shall contain cross-liability
endorsements. Coverage shall be primary and not
contributing with any coverage maintained by
LESSOR. The policy shall contain a waiver of
subrogation in favor of LESSOR and City. Not
more frequently than each two (2) years, if, in
the reasonable opinion of LESSOR or of an
insurance broker retained by LESSOR, the amount
of public liability and property damage insurance
coverage at that time is not adequate, LESSEE
shall increase the insurance coverage as required
by either LESSOR or LESSOR' s insurance broker;
provided, that the percentage increase in
coverage shall not be required to exceed the
percentage increase in the All Urban Consumer
Price Index for the Los Angeles-Long
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 11 of 35
Beach-Anaheim Area (All Items) (1982-84=100) (the
"Index" ) since the last requested adjustment (or,
in the case of the first requested adjustment,
the percentage increase in the Index since the
commencement of the Lease term) . The insurance
to be provided by LESSEE may provide for
deductibles or self-insured retention up to
Twenty-Five Thousand Dollars ($25,000) , adjusted
in accordance with the Index from and after the
Commencement Date, or for amounts in excess of
Twenty-Five Thousand Dollars ($25,000), adjusted
in accordance with the Index as shall be
acceptable to the Executive Director. In the
event such insurance does provide for deductibles
or self-insured retention, LESSEE agrees that it
will fully protect LESSOR, its boards, officers,
and employees in the same manner as these
interests would have been protected had the
policy or policies not contained the deductible
or retention provisions.
b. LESSEE' s indemnification obligations under
paragraph 11 shall extend to damage resulting
from risks insurable by garage keepers' legal
liability insurance. The public liability
insurance required in paragraph 10.a. above
shall include garage keepers' legal liability
coverage.
C. A policy of standard fire and extended coverage
insurance to the extent of at least 90% of the
replacement value of the Improvements, Trade
Equipment, and LESSEE' s personal property, on or
about the Premises. Subject to paragraph 5 of -
these GENERAL CONDITIONS, the proceeds from any
such policy shall be used by LESSEE for the
restoration or replacement of the Improvements,
Trade Equipment, and personal property.
d. Business interruption insurance insuring that the
Percentage Rent due and payable to LESSOR (based
on the previous twelve month figures) will be
paid to LESSOR for a period of up to twelve (12)
months if the Premises, or portion thereof, are
destroyed or rendered inaccessible by a casualty
loss or other occurrence normally covered by a
business interruption insurance policy.
e. Notwithstanding any other provision of this
paragraph 10 to the contrary, LESSEE' s
obligations pursuant to parts a, b, c and d of
this paragraph 10 shall be conditioned upon the
reasonable availability of such coverages, terms,
and conditions in the insurance market.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 12 of 35
The foregoing insurance policies shall contain endorsements
requiring thirty (30) days written notice from the insurance
company to both parties before cancellation or change in
coverage, scope, or amount of any policy. Each policy or a
certificate of the policy together with evidence of payment of
premium shall be deposited with LESSOR at the commencement of
the Lease term and on renewal of each policy not less than
twenty (20) days before the expiration of the term of the
policy.
The procuring of such required policy or policies of
insurance shall not be construed to limit LESSEE' s liability
hereunder nor to fulfill the indemnification provisions and
requirements of paragraph 11. Notwithstanding said policy or
policies of insurance, LESSEE after exhausting all available
insurance proceeds shall be obligated for the full and total
amount of any damage, injury or loss caused by LESSEE' s
negligence or that of its agents, sublessees, concessionaires,
licensees, and their agents and employees in connection with
this Lease or with the use and occupancy of the Premises.
11. INDEMNITY, DEFENSE, _HOLD HARMLESS: LESSEE hereby
agrees to protect, defend, indemnify and hold and save harmless
LESSOR and/or 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
LESSEE' s employees and damage to LESSEE' s property, arising
directly or indirectly out of the obligations or operations
herein undertaken by LESSEE, including those arising from the
passive concurrent negligence of LESSOR and/or City, but save
and except those which arise out of the active concurrent
negligence, sole negligence, active concurrent willful
misconduct, or active concurrent or sole willful misconduct of
LESSOR and/or City. LESSEE will conduct all defense at its
sole cost and expense. LESSOR and/or City shall be reimbursed
by LESSEE for all costs or attorney' s fees incurred by LESSOR
and/or City in enforcing this obligation.
12. TAXES AND ASSESSMENTS: LESSEE recognizes and
' understands that this Lease may create a possessory interest
subject to property taxation and that LESSEE may be subject to
the payment of property taxes levied on such interest. LESSEE
shall pay or cause to be paid all taxes and assessments levied
upon the Premises based on the assessed value of the entire
property and not merely the assessed value of LESSEE' s
leasehold interest. LESSEE shall also pay or cause to be paid
any taxes and assessments which may be levied upon any
fixtures, equipment, or other property installed, constructed
or located on the Premises. LESSEE may, at any time, in good
faith and upon reasonable grounds, dispute or contest the
validity of the whole or any part of any such taxes or
assessments, and during the period of any such dispute shall
not be deemed in default hereof so long as LESSEE does not
subject the Premises to foreclosure or sale and promptly pays
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 13 of 35
the amount finally determined to be due. Notwithstanding the
above, both parties recognize that LESSEE should not be
assessed a possessory interest tax for that portion of the
Premises which is the public parking which is in excess of the
code requirement for the operation of the businesses on the
Premises and LESSOR and City agree to cooperate with LESSEE in
the event of a challenge to such an assessment.
13. UNLAWFUL USE: LESSEE agrees that no improvements
shall be erected., placed upon, operated, nor maintained upon
the Premises, nor any business conducted or carried on therein
or therefrom, ir_ violation of the terms of this Lease, or of
any regulation, order, law, statute, or ordinance of a
governmental agency having jurisdiction.
14. ABANDONED PERSONAL PROPERTY: If LESSEE abandons the
Premises or is dispossessed thereof by process of law or
otherwise, title to any personal property belonging to LESSEE
and left on the Premises forty-five (45) days after such
abandonment or dispossession shall be deemed to have been
transferred to LESSOR. LESSOR shall have the right to remove
and to dispose of such property without liability therefor to
LESSEE or to any person claiming under LESSEE, and shall have
no need to account therefor. LESSEE hereby designates LESSOR' s
Executive Director as its attorney-in-fact to execute and
deliver such documents as may be reasonably required to dispose
of such abandoned property and transfer title thereto.
15. HOLDING OVER: In the event LESSEE shall continue in
possession of the Premises after the expiration of the Lease
term, such possession shall not be considered a renewal of this
Lease but a tenancy from month to month and shall be governed
by the conditions and covenants contained in this Lease.
16. ASSIGNING SUBLETTING AND ENCUMBERING:
A. Assignments
The qualifications and identity of LESSEE are of
particular concern to LESSOR. It is because of those
qualifications and identity that LESSOR has entered into this
Lease with LESSEE. Accordingly, LESSEE shall not, except as
permitted in this paragraph 16, assign all or any part of this
Lease or any of LESSEE' s rights hereunder without the prior
written approval of LESSOR. LESSOR agrees that it will not
unreasonably withhold or condition such approval. In this
regard, LESSOR agrees that in the event of a request by LESSEE
to assign LESSEE' s interest in the Lease or the Premises,
LESSOR shall grant such approval after issuance of certificate
of completion provided (i) such assignment is made to a
responsible third party who will undertake LESSEE' s
responsibilities under this Lease to use the Premises, or
portion thereof, in accordance with this Lease; (ii) such third
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 14 of 35
party shall demonstrate sufficient qualifications and
experience to assure the development and operation of the
Improvements thereof, in accordance with this Lease; (iii) such
third party shall demonstrate sufficient financial resources or
commitments equal to or greater than Five Million Dollars
($5,000,000.00) adjusted by CPI adjustments at the time of the
transfer to assure operation of the project, or portion
thereof, in accordance with this Lease; notwithstanding the
foregoing, LESSOR further agrees not to unreasonably disapprove
an assignment to a financially responsible lender which
assignment consists of a mortgage, deed of trust, sale and
lease back, or other form of conveyance for financing, provided
that prior to LESSOR' s issuance of its final Certificate of
Completion, LESSOR shall have no obligation to approve such an
assignment unless LESSOR determines in its reasonable
discretion that such assignment is for the purpose of securing
loans of funds to be used solely for financing the direct and
indirect costs, including without limitation financing costs,
interest, and commissions, of planning, designing,
constructing, developing, leasing, marketing and operating the
improvements to be constructed by LESSEE and/or a Sublessee
with respect to the Premises. Prior to issuance of Certificate
of Completion, approvals of assignments of the Lease shall be
at the sole discretion of the LESSOR with the exception of
approval for transfers to secure financing which shall be
reasonably approved by LESSOR. Approvals by LESSOR under this
Paragraph for assignments for financing purposes shall be made
by LESSOR' s Executive Director.
Notwithstanding any other provision of this Lease
to the contrary, LESSOR approval of an assignment of this Lease
or any interest herein shall not be required in connection with
any of the following:
(i) Any transfer to any entity or entities in
which LESSEE retains a minimum of fifty-one
percent (51%) of the ownership or beneficial
interest and retain management control.
(ii) Transfers resulting from the death or mental
or physical incapacity of an individual.
(iii) Transfers or assignments in trust for the
benefit of a spouse, children,
grandchildren, or other family members.
(iv) A transfer of LESSEE' s interest in the
Premises at foreclosure (or a transfer of
any Sublessee' s interest in the portion of
the Premises leased to such sublessee at
foreclosure or a conveyance thereof in lieu
of a foreclosure) pursuant to a foreclosure
thereof by a lender approved by LESSOR in
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 15 of 35
accordance with this Paragraph 16.A
Exhibit "B. "
(v) A sale or transfer of some or all of LESSEE'S
interest in the Premises or a transfer of any
Sublessee's interest in the portion of the
Premises leased to such sublessee at
foreclosure to a lender approved by LESSOR in
accordance with this Paragraph 16.A of Exhibit
11B "
(vi ) The conveyance or dedication of any portion of
the Premises to the City or other appropriate
governmental agency, or the granting of
permits to facilitate the development of the
Premises.
(vii ) A transfer of stock resulting from or in
connection with a reorganization as
contemplated by the provisions of the Internal
Revenue Code cf 1954, as amended or otherwise,
in which the ownership interests of a
corporation are assigned directly or by
operation of law to a person or persons, firm
or corporation which acquires the control of
the voting capital stock of such corporation
or all or substantially all of the assets of
such corporation.
(viii) A transfer of stock in a publicly held
corporation or the transfer of the beneficial
interest in any publicly held partnership or
real estate investment trust.
(ix) Equipment financing pursuant to Paragraph 15.E .
of these General Conditions.
LESSEE shall deliver written notice to LESSOR
requesting approval of any assignment requiring LESSOR approval
- hereunder. Such notice shall be accompanied by sufficient
evidence regarding the proposed assignee' s qualifications and
experience and its financial commitments and resources to enable
LESSOR to evaluate the proposed assignee pursuant to the criteria
set forth under the first paragraph of this Paragraph 16A.
Within thirty (30) days after the receipt of
LESSEE'S written notice requesting LESSOR approval of an
assignment, LESSOR shall respond in writing by stating what
further information, if any, LESSOR reasonably requires in order
to determine whether or not to approve the requested assignment.
Upon receipt of such a timely response, LESSEE shall promptly
furnish to LESSOR such further information as may be reasonably
requested.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 16 of 35
Once LESSEE'S request for approval of an
assignment has been accepted as complete, LESSOR shall not be
entitled to demand additional infcrmation or to disapprove the
assignment on the basis that LESSEE has not furnished adequate
or complete information.
LESSOR' s Executive Director shall approve or
disapprove any requested assignment for financing purposes
within fifteen (15) days after LESSEE' S request therefor is
accepted as complete. Any disapproval shall be in writing and
shall specify the reasons for the disapproval and, if
applicable, the conditions required to be satisfied by LESSEE
in order to obtain approval.
LESSEE shall compensate LESSOR for its actual
reasonable expenses (not including personnel or overhead
expenses) incurred in investigating a proposed assignee' s
qualifications as a permitted assignee hereunder.
No assignment of LESSEE'S obligations with
respect to the Premises, whether or not LESSOR approval is
required therefor (but specifically excluding assignments for
financing purposes, and those types of assignments identified
in subparagraphs (iv) , (v) , and (vi) , (vii ) , and (ix) ) , shall
be effective unless and until the proposed assignee executes
and delivers to LESSOR an agreement in form reasonably
satisfactory to LESSOR'S attorney assuming the obligations of
LESSEE which have been assigned. Thereafter, the assignor
shad remain responsible to LESSOR for performance of the
obligations assumed by the assignee unless LESSOR releases the
assignor in writing (said release shall not be unreasonably
conditioned or withheld) or unless LESSOR has approved the
assignee on the basis of the criteria set forth under (i) , .
(ii) , and (iii) of the first paragraph of this Paragraph 16.A, _
in either of which events the assignor shall be released from,
but only from, those obligations arising subsequent to the
effective date of the assignment.
No consent or approval by LESSOR of any
- assignment requiring LESSOR' s approval shall constitute a
consent or approval of any subsequent assignment requiring
LESSOR' s approval pursuant to the provisions of this paragraph.
B. Subletting
LESSOR'S Executive Director shall have the right
to approve all subleases on the Premises with respect solely to
the proposed use and operator and to ensure the following: (i)
that, subject to temporary interruptions of business due to
circumstances beyond the tenant' s reasonable control, and
occurrences such as casualty losses and periods of
reconstruction and alteration of improvements, and the seasonal
nature of beach related concession businesses, such tenants
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 17 of 35
shall continuously use or cause to be used the Premises and
portions thereof for the uses specified in Paragraph 5 of the
Lease and continuously merchandise the Premises or portions
thereof during all usual business hours and on all such days as
comparable businesses of like nature in the area are open for
business and shall make available verifiable records of gross
sales; (ii) if the Improvements cn the Premises are partially
destroyed or condemned and such tenant' s sublease remains in
force, the tenant shall continue or cause to be continued
operation of its business at the Premises to the extent
reasonably practical from the standpoint of good business
judgment during any period of reconstruction; (iii) the tenant
shall exercise reasonable diligence to operate or cause to be
operated its business on the Premises or portion thereof in a
manner that will produce the highest volume of gross receipts
reported to LESSEE consistent with competitive pricing and
prudent business practices; (iv) with respect to each tenant
who sells alcoholic beverages for on Premises consumption, such
tenant shall maintain public liability and property damage
insurance with dram shop coverage; (v) the non-discrimination
provisions set forth in paragraph 29 below; and (vi) the tenant
shall attorn to LESSOR in the event of any termination of this
Lease, and attorn to any successor or assignee of LESSEE in
accordance with Paragraph 33 .B below. LESSEE covenants to
LESSOR to use reasonable diligence to enforce the
aforementioned provisions of subleases and other agreements.
LESSEE further covenants to use reasonable diligence to
sublease the Premises to tenants promptly and in such a manner
as to maximize Gross Sales Receipts, consistent with market
conditions, the mutual desire of LESSOR and LESSEE to encourage
a proper tenant mix, and prudent business practices.
C. Assi!gnments for Financings Lender Protection
Subject to obtaining LESSOR' s approval, and the
limitation on the maximum amount of subordination as specified
in paragraph 7(c) of this Lease, LESSEE may transfer and
assign this Lease and the leasehold interest created thereby
("Leasehold Estate") to a lender as security for the repayment
of a loan, in accordance with Paragraph 16.A above. The term
"lender" as used herein shall mean the beneficiary, mortgagor,
secured party, or other holder of a promissory note or other
written obligation which is secured by any deed of trust,
mortgage, or other written security agreement affecting the
Leasehold Estate ("Leasehold Mortgage") . After approval by
LESSOR, LESSEE may perform any and all acts and execute any and
all instruments necessary or proper to consummate any such loan
transaction and perfect the security therefore to be given the
lender on the security of the Leasehold Estate.
With respect to any lender who shall have
delivered to LESSOR a written notice which shall state the
name, address and a general description of the type of lien it
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 18 of 35
holds on the Leasehold Estate, the following provisions shall
apply:
a. LESSOR shall not agree to any mutual
termination nor accept any surrender of this
Lease, nor shall LESSOR consent to any
amendment or modification of this Lease
which could be reasonably construed to have
an impact on the lender' s Leasehold Mortgage
without the prior written consent of the
lender.
b. Notwithstanding any default by LESSEE in the
performance or observance of any agreement,
covenant or condition of this Lease on the
part of LESSEE to be performed or observed,
LESSOR shall have no right to terminate this
Lease unless a default of this Lease shall
have occurred and be continuing, LESSOR
shall have given the lender written notice
of such default, and the lender shall have
failed to remedy such default or acquire
LESSEE' s estate created hereby or commence
foreclosure or other appropriate proceedings
in the nature thereof, all as set forth in,
and within the times specified by the
provisions of this Lease and its
attachments, as the same may be amended from
time to time.
C. Lender shall have the right, but not the
obligation, at any time prior to termination
of this Lease and without payment of any
penalty, to pay all of the rents due _
hereunder, to effect any insurance, to pay
any taxes and assessments, to make any
repairs and improvements, to do any other
act or thing required of LESSEE hereunder,
and to do any act or thing which may be
necessary and proper to be done in the
performance and observance of the
agreements, covenants and conditions hereof
to prevent termination of this Lease. All
payments so made and all things so done and
performed by the Lender shall be as
effective to prevent a termination of this
Lease as the same would have been if made,
done and performed by LESSEE instead of the
Lender.
d. Should any default under this Lease occur,
the lender shall have sixty (60) days after
receipt of notice from LESSOR setting forth
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 19 of 35
the nature of such default, and, if the
default is such that possession to the
Premises may be reasonably necessary to
remedy the default, a reasonable time after
the expiration of such sixty (60) day period
within which to remedy such default,
provided that (A) the lender shall have
fully cured any default in the payment of
any monetary obligations of LESSEE under
this Lease within such sixty (60) day period
and shall continue to pay currently such
monetary obligations as and when the same
are due and (B) the lender shall have
acquired LESSEE' s estate in the Premises
created hereby or commenced foreclosure or
other appropriate proceedings in the nature
thereof within such period, or prior
thereto, and is diligently prosecuting any
such proceedings. All rights of LESSOR to
terminate this Lease as the result of the
occurrence of any such default shall be
subject to, and conditioned upon, LESSOR
having first given the lender written notice
of such default and the lender having failed
to remedy such default or acquire LESSEE' s
estate in the Premises created hereby or
commence foreclosure or other appropriate
proceedings in the nature thereof as set
forth in and within the tines specified by
this subparagraph (d) .
e. Any default under this Lease which in the
nature thereof cannot be remedied by the
lender shall be deemed to be remedied if (A) _
within sixty (60) days after receiving
written notice from LESSOR setting forth the
nature of such default,or prior thereto, the
lender shall have acquired LESSEE' s estate
in the Premises created hereby or shall have
commenced foreclosure or other appropriate
proceedings in the nature thereof to acquire
said estate, (B) the lender shall diligently
prosecute any such proceedings to
completion, (C) the lender shall have fully
cured any default in the payment of any
monetary obligations of LESSEE hereunder
which do not require possession of the
Premises within such sixty (60) day period
and shall thereafter continue to faithfully
perform all such monetary obligations which
do not require possession of the Premises,
and (D) after gaining possession of the
Premises the lender performs all other
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 20 of 35
obligations of LESSEE hereunder as and when
the same are due.
In addition to the rights set forth in
this subparagraph (e) , the lender shall have
the option to be exercised by written notice
to LESSOR given within the aforesaid sixty
(60) day period, to obtain a new lease of
the Premises upon the following terms and
conditions:
(i) Such new Lease shall be
effective as of the date of the termination
of this Lease and shall be for the remainder
of the term of this Lease at the same rental
and with the same terms, covenants and
conditions as are set forth herein.
(ii) In addition to paying all
current rent under the new Lease, the lender
shall pay all unpaid rental (after deducting
any income LESSOR may have received from the
Premises during such period) due pursuant to
Paragraph 8 of these GENERAL CONDITIONS
which accrued on or after the date which is
thirty (30) days prior to the date on which
the lender first received written
notification of the default by LESSOR and
the lender cures all defaults under this
Lease that reasonably can be cured by the
lender.
In lieu of executing a new lease in its
own name, the lender shall have the right to -
designate a nominee which shall become a
lessee under the new lease so long as such
assignee or nominee is qualified consistent
with the requirements of this Lease, its
attachments and amendments.
f. If the lender is prohibited by any process
or injunction issued by any court or by
reason of any action by any court having
jurisdiction of any bankruptcy or insolvency
proceeding involving LESSEE from commencing
or prosecuting foreclosure or other
appropriate proceedings in the nature
thereof, the times specified in
subparagraphs (d) and (e) above for
commencing or prosecuting such foreclosure
or other proceedings shall be extended for
the period of such prohibition plus an
additional period of sixty (60) days
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 21 of 35
thereafter; provided that the lender shall
have fully cured any default in the payment
of any monetary obligations of LESSEE under
this Lease prior to the end of such sixty
(60) day period and thereafter shall
continue to pay currently such monetary
obligations as and when the same fall due.
g. LESSOR shall avail or deliver to the lender
duplicate copies of any and all notices
which LESSOR may from time to time give to
or serve upon LESSEE pursuant to the
provisions of this Lease, and such copy
shall be mailed or delivered to the lender
simultaneously with the mailing or delivery
of the same to LESSEE. No notice by LESSOR
to LESSEE hereunder shall be deemed to have
been given insofar as the lender' s rights
under this Paragraph are concerned unless
and until a copy thereof shall have been
mailed or delivered to the lender as herein
set forth.
h. Foreclosure of a Leasehold Mortgage, or any
sale thereunder,whether by judicial
proceedings or by virtue of any power
contained in the Leasehold Mortgage, or any
conveyance of the estate in the Premises
created hereby from LESSEE to the lender
through, or in lieu of, foreclosure or other
appropriate proceedings in the nature
thereof, shall not require the consent of
LESSOR or constitute a breach of any
provision of or a default under this Lease, _
and upon such foreclosure, sale or
conveyance, LESSOR shall recognize the
lender,or any other foreclosure sale
purchaser, as lessee hereunder. In the
event lender becomes lessee under this
Lease, lender shall assume the obligations
of LESSEE under this Lease or such new lease
only for the period of time that lender
remains lessee thereunder, and LESSEE shall
be released from any liability therefor,
provided prior defaults by LESSEE have
either been cured or waived. The lender
shall be subject only to those restrictions
applicable to LESSEE as set forth in this
Paragraph. In the event that, consistent
with this Paragraph, the lender subsequently
assigns or transfers its interest under this
Lease after acquiring the same by
foreclosure or deed in lieu of foreclosure,
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 22 of 35
and in connection with any such assignment
or transfer the lender takes back a mortgage
or deed of trust encumbering such leasehold
interest to secure a portion of the purchase
price given to the lender for such
assignment or transfer, then such mortgage
or deed of trust shall be considered a
Leasehold Mortgage as contemplated under
this Paragraph and the lender shall be
entitled to receive the benefit of and
enforce the provisions of this Paragraph and
any other provisions of this Lease intended
for the benefit of the holder of a Leasehold
Mortgage.
In the event the Lender requires any
modifications to the provisions of this Paragraph in order to
secure its loan, LESSOR agrees not to unreasonably withhold
consent to such modifications so long as such modifications do
not reduce the amount of rent or other sums payable to LESSOR
hereunder, or do not otherwise have a materially adverse impact
on any of LESSOF.' s interests, rights and remedies hereunder.
D. Sublessees' Right to Encumber the Sublease
LESSOR recognizes each eublessee' s right to mortgage
or encumber the sublease and/or the subleasehold estate held by
such sublessee in accordance with and subject to the same terms
and conditions as are set forth in this Paragraph 16
subparagraph C above with respect to the sub-leasehold estate
only, and in this regard LESSOR will recognize any and all of
the rights of any subleasehold mortgagee as and to the extent
set forth therein for the leasehold estate.
E. Equipment Leasing
Some of the equipment, fixtures and furniture
(collectively designated herein as "Trade Equipment" ) installed
and used by LESSEE and sublessees on the Premises may or will
be directly financed by a third-party lender or otherwise be
subjected to a security interest or owned by an equipment
rental company or vendor ("Equipment LESSOR") and leased to
LESSEE or such sublessee either directly from the Equipment
LESSOR or by way of equipment sublease or assignment of
equipment lease from an equipment sublessor ("Equipment
Sublessor") , and LESSOR hereby agrees to recognize the rights
therein of any such third-party lender or Equipment LESSOR or
Sublessor (or their respective assignees) . LESSOR and City
agree that all such items of financed or leased Trade Equipment
installed on the Premises shall be and remain personal property
and not real property, notwithstanding the fact that the same
may be nailed or screwed or otherwise attached or affixed to
the Premises or any of LESSEE' s or any sublessee' s buildings or
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 23 of 35
improvements, and further agrees to recognize the rights
therein of any such Equipment LESSOR or Sublessor (or their
respective assignees) . LESSEE and any sublessee shall have the
right at any time, whether or not LESSEE is in default
hereunder or such sublessee is ir. default under its sublease,
to remove or replace any or all Trade Equipment, whether or not
financed or leased, regardless of whether attached or affixed
to the Premises, and to the extent of their respective
,interests therein such third-party lender or Equipment LESSOR
or Sublessor (or their respective assignees) shall also have
such a right. Any damage to the Premises caused by such a
removal shall be repaired by and at the expense of LESSEE or
other party causing such removal. LESSOR waives the right of
distraint and agrees that it does not have and shall not assert
any right, lien, or claim in or to the financed or leased Trade
Equipment and agrees that any third-party lender or Equipment
LESSOR or Sublessor (or their respective assignees) may remove
and dispose of the same without reference to, and free and
clear of, any demand of LESSOR, and that such disposal or sale
may be made on the Premises.
17. SUCCESSORS IN INTEREST: Unless otherwise provided in
this Lease, the terms, covenants and conditions contained
herein shall apply to and bind the heirs, successors,
executors, administrators, and assigns of all the parties
hereto.
18. LESSEE' S DEFAULT: The occurrence of any of the
following shall constitute a default by LESSEE:
a. Failure to pay rent when due, if the failure
continues for fifteen (15) days after written
notice has been delivered to LESSEE. LESSEE
shall not be excused from its obligation to pay
rent by reason of the inability for any reason to
obtain the full and prompt payment to LESSEE of
all payments due LESSEE by any sublessees or
concessionaires.
• b. Failure to perform any of the provisions of this
Lease required to be performed by LESSEE, if the
failure to perform is not cured within thirty
(30) days after written notice has been given to
LESSEE. If the default cannot reasonably be
cured within said thirty (30) days, LESSEE shall
not be deemed to be in default of this Lease if
LESSEE commences to cure the default within the
thirty (30) day period and diligently, and in
good faith, continues to cure the default.
Notices given under this paragraph shall specify the
alleged default and the applicable Lease provision, and shall
demand that LESSEE perform the provisions of the Lease or pay
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 24 of 35
the rent that is in arrears, as the case may be, within the
applicable period of time, or quit the Premises. No such
notice shall be deemed a forfeiture or a termination of this
Lease unless LESSOR so elects in the notice.
19. LESSOR' S REMEDIES: LESSOR shall have the following
remedies if LESSEE commits a default. These remedies are not
exclusive; they are cumulative in addition to any remedies now
or later allowed by law.
LESSOR can continue this Lease in full force and effect,
and the Lease will continue in effect as long as LESSOR does
not terminate LESSEE' s right to possession, and LESSOR shall
have the right to collect rent when due. During the period
LESSEE is in default, LESSOR can enter the Premises subject to
the rights of any subtenants under Paragraph 33 of this
Exhibit "B, " relet them, or any part of them, to third parties
for LESSEE' s account; provided, that in such event LESSOR shall
not be excused from any legal obligation it would otherwise
have to act reasonably to mitigate its damages and to exercise
reasonable diligence to relet the Premises of part thereof for
fair market rent. In such event, LESSEE shall be liable
immediately to LESSOR for all reasonable costs LESSOR incurs in
reletting the Premises, if applicable, including, without
limitation, broker' s commissions, reasonable expenses of
remodeling the Premises required by the reletting and supplied
by other landlords under similar circumstances, and like
costs. Reletting can be for a period shorter or longer than
the remaining term of this Lease. LESSEE shall pay to LESSOR
the rent due under this Lease on the dates the rent is due,
(provided LESSOR notifies LESSEE in writing a ninirium of thirty
(30) days in advance the amount of Gross Sales Receipts from
which the calculation of rent can be made) less the rent LESSOR
receives from any reletting. No act by LESSOR allowed by this _ -
paragraph shall terminate this Lease unless LESSOR notifies
LESSEE that LESSOR elects to terminate this Lease. After
LESSEE' s default and for as long as LESSOR does not terminate
LESSEE' s right to possession of the Premises, if LESSEE obtains
LESSOR' s consent, LESSEE shall have the right to assign or
• sublet its interests in this Lease, but LESSEE shall not be
released from liability for said default absent a waiver or
release from LESSOR.
No act by LESSOR other than giving notice of such
termination to LESSEE shall terminate this Lease. Acts of
maintenance, efforts to relet the Premises, or the appointment
of a receiver on LESSOR' s initiative to protect LESSOR' s
interests under this Lease shall not constitute a termination
of LESSEE' s right to possession. On termination, LESSOR has
the right to recover from LESSEE:
a. The worth, at the time of the award, of the
unpaid rent that had been earned at the time
of the termination of this Lease;
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 25 of 35
b. The worth, at the time of the award, of the
amount by which the unpaid rent that would
have been earned after the date of
termination of this Lease until the time of
award exceeds the amount of the loss of rent
that LESSEE proves could have been
reasonably avcided;
C. The worth, at the time of the award of the
amount by which the unpaid rent for the
balance of the term after the time of the
award exceeds the amount of the loss of rent
that LESSEE proves could have been
reasonably avcided; and
d. Any other amount and court costs, necessary
to compensate LESSOR for all detriments
proximately caused by LESSEE' s default.
"The worth, at the time of the award, " as used in
subparagraphs (a) and (b above is to be computed by allowing
interest at the rate of 10% per annum. "The worth, at the time
of the award, " as referred to in subparagraph (c) above is to
be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of the
award, plus 1%.
If LESSEE is in default of this Lease and subject to the
rights of any sub-tenants under Paragraph 33 of this
Exhibit "B", LESSOR shall have the right to have a receiver
appointed to collect and conduct LESSEE' s business. Neither
the filing of a petition for the appointment of a receiver nor
the appointment itself shall constitute an election by LESSOR
to terminate this Lease.
LESSOR, at any time after LESSEE commits a default, can
cure the default at LESSEE' s cost. If LESSOR at any time, by
reason of LESSEE' s default pays any sum or does any act that
requires the payment of any sum, the sum paid by LESSOR shall
be immediately due from LESSEE to LESSOR at the time the sum is
paid, and if paid at a later date shall bear interest at the
rate of 10% per annum from the date the sum is paid by LESSOR
until LESSOR is reimbursed by LESSEE. The sum, together with
the interest on it, shall be deemed additional rent.
20. LESSOR'S DEFAULT: LESSOR shall be in default of this
Lease if it fails or refuses to perform any provision of this
Lease that it is obligated to perform if the failure to perform
is not cured within thirty (30) days after written notice of
the default has been given by LESSEE to LESSOR. If the default
cannot be reasonably cured within thirty (30) days, LESSOR
shall not be in default of this Lease if LESSOR commences to
cure the default within the thirty (30) day period and
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 26 of 35
diligently and in good faith continues to cure the default.
LESSEE, at any time after LESSOR commits a default, can cure
the default at LESSOR' s cost. If LESSEE, at any time, by
reason of LESSOR' s default pays any sum or does any act that
requires the payment of any sum, the sum paid by LESSEE shall
be immediately due from LESSOR to LESSEE at the time the sum is
paid, and if paid at a later date shall bear interest at the
rate of 10% per annum from the date the sum is paid by LESSEE
until LESSEE is reimbursed by LESSOR. At LESSEE' s option, such
sum may also be offset against the next installment of rent or
additional rent payable by LESSEE.
21. QUITCLAIM OF LESSEE'S INTERESTS UPON TERMINATION:
Upon termination of this Lease for any reason, including but
not limited to termination because of default by LESSEE, and
subject to the rights of any sub-tenants under Paragraph 33 of
this Exhibit "B", LESSEE shall execute, acknowledge and deliver
to LESSOR within thirty (30) days after receipt of written
demand therefor a good and sufficient deed whereby all right,
title and interests of LESSEE in the Premises is quitclaimed to
LESSOR.
22 . TOTAL TAKING: If the whole of the Premises, or otter
improvements to be made by LESSEE shall be taken by right of
eminent domain o. otherwise for any public or quasi-public use,
then, when possession shall be taken thereunder by the
condemnor, or the LESSEE is deprived of its practical use of
the Premises, and other improvements, whichever date is
earlier, this Lease and all rights and obligations of LESSOR
and LESSEE hereunder, shall terminate as of the date of the
taking and any rent and all other payments required of LESSEE
shall be prorated between the parties as of the date of the
taking.
23. PARTIAL TAKING: In the event of a partial taking, as
a result of which LESSEE reasonably determines that (i) the
remaining portion of the Premises, or other improvements on the
Premises cannot be restored to an economically operable
facility of a comparable kind and quality to the facility
' existing prior to the taking with condemnation awards received
by LESSEE, or (ii) the then-existing laws do not permit
restoration of the Improvements to within 95% of the size and
layout existing immediately before such taking, then this Lease
at LESSEE' s option shall terminate as of the time when
possession of the Premises shall be taken by the condemnor or
LESSEE is deprived of its practical use thereof, whichever date
is earlier. LESSEE shall exercise such rights of termination
by giving LESSOR written notice thereof. no later than
one-hundred twenty (120) days after the partial taking becomes
effective. If a portion of the Premises or any other
improvements shall be taken by right of eminent domain or
otherwise for any public or quasi-public use and LESSEE
reasonably determines that the remaining portion of the
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 27 of 35
Premises and improvements can be restored by LESSEE to an
economically operable facility of comparable kind and quality
to the facility existing prior to the taking, then this Lease
shall not be affected and LESSEE shall retain the remaining
portion of the Premises. In such event, however, and
notwithstanding Paragraph 5(c) of these GENERAL CONDITIONS,
rent shall be abated with respect to any improvements which are
remaining on the Premises but are not used during a period of
reconstruction or restoration. Rent shall also be prorated in
the manner provided in Paragraph 5(c) above.
24. EMINENT DOMAIN AWARD: If there is a taking by right
of eminent domain, the rights and obligations of the parties
with reference to the award and the distribution thereof shall
be determined in accordance with the provisions of this
Paragraph. The award shall belong to and be paid to LESSOR,
except that LESSEE shall first receive from the award the
following:
a. A sum attributable to the value of LESSEE's
leasehold estate including improvements,
trade fixtures and personal property that
are taken which sum shall be first applied
toward any outstanding balance due LESSEE's
lender;
b. A sum attributable ' to severance damages to
be used solely for the restoration of the
other improvements upon the Premises; and
C. An award (if any) specifically made with
respect to loss of goodwill.
25. AMENDMENTS: This Lease, including the Exhibits _
thereto, set forth all of the agreements and understandings of
the parties and any modification rust be in writing executed by
both parties.
26. CAPTIONS: The captions and the table of contents
• of this Lease shall have no effect on its interpretation.
27. CALIFORNIA LAW: This Lease shall be construed and
interpreted in accordance with the laws of the State of
California.
26. WAIVER: No delay or omission by either party in the
exercise of any right or remedy en any default by the other
party shall impair such a right cr remedy or be construed as a
waiver.
The receipt and acceptance by LESSOR of delinquent rent
shall not constitute a waiver of any other defaults by LESSEE;
it shall constitute only a waiver of timely payment for the
rent payment involved.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 28 of 35
LESSOR' S consent to or approval of any act by LESSEE
requiring LESSOR' S consent or approval shall not be deemed to
waive or render unnecessary LESSOR' s consent to or approval of
any subsequent act by LESSEE.
Any waiver by either party of any default must be in
writing and shall not be a waiver of any other default
concerning the same or any other provision of this Lease.
29. NONDISCRIMINATION: LESSEE covenants for itself, its
heirs, executors, administrators, and assigns, and all persons
claiming under or through it, that this Lease is made and
accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed,
religion, sex, martial status, age, national origin or ancestry
in the subleasing of the Premises herein leased, nor shall the
LESSEE establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use or occupancy of lessees of the Premises.
LESSEE shall make its accommodations and services available to
the public on fair and reasonable terms. In the event LESSEE
enters into contracts, subleases, or assignments with respect
to any of its interest herein, LESSEE shall include in such
arrangements a nondiscrimination clause substantially
conforming to the following:
a. In leases: "The lessee herein covenants by
and for himself or herself, his or her
heirs, executors, administrators, and
assigns and all persons claiming under or
through him or her, that this lease is made
and accepted upon and subject to the
following conditions:
"That there shall be no discrimination
against or segregation of any person or
group of persons on account of race, color,
creed, religion, sex, marital status, age,
national origin or ancestry in the
subleasing, transferring, use, occupancy,
tenure or enjoyment of the premises herein
leased, nor shall the lessee himself or
herself, or any person claiming under or
through him or her, establish or permit any
such practice or practices of discrimination
or segregation with reference to the
selection, location, number, use or
occupancy of lessees of the premises. "
b. In contracts: "There shall be no
discrimination against or segregation of any
person or group of persons on account of
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 29 of 35
race, color, creed, religion, sex, marital
status, age, national origin or ancestry in
the sublease, transfer, use, occupancy,
tenure or enjoyment of the premises, nor
shall the transferee himself or herself, or
any person claiming under or through him or
her, establish or permit any such practice
or practices of discrimination or
segregation with reference to the selection,
location, number, use or occupancy of the
land. "
30. FORCE MAJEURE. In any case where either party hereto
is required to do any act, delays caused by or resulting from
acts of God, war, civil commotion, fire, flood, earthquake or
other casualty, strikes or other extraordinary labor
difficulties, shortages of labor or materials or equipment in
the ordinary course of trade, government regulations,
litigation (other than litigation arising from the failure to
perform hereunder by the party claiming an extension of time to
perform or from a wrongful act or failure to act by such party)
or other causes not reasonably within such party' s control and
not due to the fault or neglect of such party shall not be
counted in determining the time during which such act shall be
completed, whether such time be designated by a fixed date, a
fixed time or "a reasonable time", and such time shall be
deemed to be extended by the period of such delay. Financial
inability of either party shall not be considered to be a
circumstance or cause beyond the reasonable control of that
party. Litigation concerning paragraph 3 of Exhibit "C"
commencing on page 2 shall be included as an event which
triggers this force majeure provision. In no event shall the
operation of this Paragraph 30 extend the obligations of the
parties under the Schedule of Performance (Exhibit "E") beyond :
ten (10) years from the Effective Date and in the event such
ten (10) years has elapsed it shall constitute grounds for
termination by either party.
31. RESOLUTION OF DISPUTES. Any and all disputes between
- the parties hereto regarding the construction, operation or
enforcement of this Lease, and any of the rights or obligations
granted or imposed by this Lease, shall be submitted only to a
retired Judge of the Superior Court in and for the State of
California (hereinafter "Superior Court") in the following
manner:
(a) The parties must agree on the Judge' s identity
within five (5) days after the dispute arises or,
at the end of the fifth day, the parties'
respective counsel shall be authorized to agree
upon the Judge' s identity and bind their
clients. Failure to cooperate in this selection
process waives the uncooperative party' s right to
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 30 of 35
�IW,
participate in the selection process, or object
to the Judge selected.
(b) Disputed matters shall be promptly submitted to
the Judge in a manner determined by him/her
following his/her selection. Once a matter is
submitted to the Judge, s/he is empowered with
the full authority of a judge sitting on the
bench of the Superior Court in and for the State
of California (hereinafter "Superior Court") , and
may make any ruling consistent with that power.
In order to implement this provision, the
parties, by executing this Lease, agree to
execute and file with the Superior Court, such
papers as are appropriate to procure the
appointment of said Judge as a Judge Pro-Tempore
of the Superior Court.
(c) The Judge may make any order s/he feels is
appropriate regarding which party should bear or
be awarded attorneys' fees and/or costs, and
which party or parties should pay for the fees
and costs of the Judge.
(d) The rights of judicial review granted under this
Paragraph are the only rights of judicial review
that are available to the parties hereto. They
are exclusive of all other rights of relief which
might otherwise be held by them. It is their
intention that all of the disputes arising out
of, or related to, their execution of this Lease,
or the rights or responsibilities granted or
imposed by this Lease, be resolved exclusively in
the manner provided for in this Paragraph and its
subparts. Consistent with this intention, the
parties, by executing this Lease, specifically
acknowledge that the decisions and orders of the
Judge are nonappealable and nonreviewable, and,
therefore, they are waiving their rights to seek
• relief in the State or Federal Courts, except for
the purpose of securing and confirming the
authority of the Judge provided for herein, and
to enforce his/her decisions and orders by
confirmation pursuant to the California Code of
Civil Procedure Section 1280 et. peg. , or through
appropriate injunctive relief^ In the event that
a party files any action inconsistent with the
terms of this Paragraph, then the party filing
the action will be liable for all fees and costs
actually incurred by the other party in
responding to said action, regardless of its
outcome.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 31 of 35
(e) The limitations on actions set forth in this
Paragraph apply only to actions between the
parties hereto. They are not intended to and do
not limit the parties' right to bring an action
against third parties. Furthermore, no third
party shall be entitled to rely on any provision
of this Paragraph in their response or defense to
an action brought against them by a party(s) to
this Lease.
Notwithstanding the foregoing in the event that
this method of dispute resolution is prohibited by law then
both parties shall either agree to submit to binding
arbitration or to the jurisdiction of the appropriate court of
law.
32. TIME: Time is of the essence of this Lease, and of
each and every covenant, term, condition, and provision hereof.
33. NON-DISTURBANCE AND REC03NITION:
A. Non-Disturbance
So long as any subtenant of any portion of the
Premises is not in default (beyond the period given such
subtenant to cure such default in its sublease) in the payment
of rent or in the performance of any of the terms, covenants,
or conditions of such sublease, or if the subtenant is in
default but is diligently proceeding to cure such default as
provided in its sublease, and notwithstanding LESSEE' s
termination of this Lease as to all or a portion of the
Premises pursuant to Paragraphs 5 or 22 of these GENERAL
CONDITIONS which termination is not consented to by such .
subtenant: (a) LESSOR will not bring, join, or cooperate in _
any action or proceeding to terminate such subtenant' s
interest, estate, or rights under such sublease, (b) the '
subtenant' s possession and rights and privileges under the
sublease shall not be diminished or interfered with by LESSOR,
and (c) LESSOR will continue to recognize the estate of the
• subtenant created under the sublease and the subtenant' s
occupancy shall not be disturbed by LESSOR during the term of
the sublease or any extensions or renewals which subtenant may
exercise under the provisions of the sublease. Upon request,
LESSOR shall execute a non-disturbance agreement, in such form
reasonably approved by LESSOR, LESSEE, subtenant and lender(s)
recognizing the subtenant' s rights provided hereunder.
B. Attornment
If the interest of LESSEE in all or any part of the
Premises shall be terminated for any reason, and LESSOR
succeeds to the interest of and assumes all the obligations of
LESSEE under any sublease, each sublessee shall be bound to
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 32 of 35
LESSOR under all of the terms, ccvenants, and conditions of the
sublease for the balance of the sublease term and any
extensions of renewals of the sublease which the subtenant may
exercise under the provisions of the sublease. The subtenant
shall attorn to LESSOR, such attornment to be effective and
self-operative without the execution of any further instruments
immediately upon LESSOR succeeding to the interest of LESSEE
under the sublease. The respective rights and obligations of
the subtenant and LESSOR under this attornment shall be the
same as between LESSEE and the subtenant under the sublease;
provided, however, that (i) the subtenant shall be under no
obligation to pay rental to LESSOR until the subtenant receives
written notice from LESSOR that LESSOR has succeeded to the
interest of LESSEE and assumed all the obligations of LESSEE
under the sublease, and (ii) LESSOR shall not hold the
subtenant responsible for any costs or acts related to any
default or alleged default by LESSEE under this Lease.
C. New Lease
In the event of the termination of this Lease as to
all or a portion of the Premises prior to its stated expiration
date for any reason whatsoever, LESSOR shall notify all
sublessors and subleasehold mortgagees of such termination, and
any sublessee or any subleasehold mortgagee may notify LESSOR
within sixty (60) days after receipt of such termination notice
of its election to enter into a new lease with LESSOR. During
such sixty (60) day period, the provisions of subparagraph A
herein shall apply. LESSOR, upon receipt of such sublessee' s
or subleasehold mortgagee' s notice, shall immediately enter
into a written agreement with such sublessee or subleasehold
Mortgagee containing the same provisions as those in the
sublease, except for any changes that are necessary because of
the substitution of LESSOR in the place of LESSEE. Sublessee _
or any subleasehold mortgagee shall have no rights under this
subparagraph (C) if it fails to give notice within the sixty
(60) day period.
34. ESTOPPEL CERTIFICATE: LESSOR and LESSEE will, at any
. time and from time to time, within thirty (30) days of the
request of the other party or a leasehold or subleasehold
Mortgagee or prospective mortgagee, execute, acknowledge, and
deliver to the other party and such mortgagee, if any, a
certificate certifying:
a. That the Lease or sublease is unmodified and in
full force and effect (or, if there have been
modifications, that the same are in full force
and effect as modified and stating such
modifications) ;
b. The dates, if any, to which the Percentage Rent
and any additional rent and charges have been
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 33 of 35
paid and the amount of any accumulated rent
credit available to LESSEE;
C. Whether there are any existing defaults by the
other party to the knowledge of the party making
suzh certification specifying the nature of such
defaults, if any;
d. Whether the Lease Commencement Date has occurred
and, if so, the date;
e. Whether the leasehold or subleasehold mortgagee
(or prospective mortgagee) is entitled to the
protection afforded under the terms of the
sublease or this Lease; and
f. Such other matters as may be reasonably requested.
Any such certificate may be relied upon by any party to
whom the certificate is directed.
35. HAZARDOUS WASTE INDEMNITY: LESSOR is aware of two
potential sources of contamination on the Premises. One
potential source is a discontinued gasoline station and the
other is the possibility of asbestos in the existing structure
which is the subject of the Maxwell' s Lease. Except for the
aforementioned potential contaminations, LESSOR has no
knowledge of hazardous materials or contamination on the
Premises. Further, to the best of the LESSOR' s knowledge, the
LESSOR has not received any notice or communication from any
government agency having jurisdiction over the Site notifying
the LESSOR of the presence of subsurface zone hazardous
materials, waste, or contamination in, on, or under the Site,
or any portion thereof. LESSOR agrees to notify LESSEE if in
the future it becomes aware of contamination on the Premises.
LESSEE, including any and all of its successors in interest,
and assigns, acknowledges and agrees it shall be responsible
for any release, excavation, or movement of any hazardous
materials, waste, or contamination of the subsurface zone as
• may be found to have contaminated the Premises after the
Commencement Date of this Lease, except to the extent such
release, excavation, or movement of any hazardous materials,
waste or contamination is caused by LESSOR or City.
LESSEE and LESSOR shall comply with CERCLA
(Comprehensive Environmental Response, Compensation and
Liability Act of 1980) 42 U.S.C. §9601, et seq. , and California
Health and Safety Code §§ 25100, et seq. , 25300, et seq. , 25280
et seq. Any costs incurred pursuant to this compliance which
are necessary to develop the Premises as contemplated in this
Lease shall be shared as set out in Paragraph 3 of Exhibit "C" .
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 34 of 35
LESSEE, including any and all of its successors in
interest, agrees to and shall indemnify, defend, and hold the
LESSOR and the City and their officers, employees,
representatives and agents harmless from and against all
expenses (including, without limitation, reasonable attorneys'
fees and disbursements) , losses, or liabilities suffered by
LESSOR or City by reason of governmental action or third party
claims arising out of such hazardous materials, waste, or
contamination, exacerbation, movement, release, or additional
contamination of the Premises as may be found to have
contaminated Premises after the Commencement Date of this Lease
unless caused by LESSOR or City. The LESSEE assumes all
responsibility for subsurface zone conditions and soils
conditions in, on or under the Premises, and for any
rehabilitation necessary for the provision of the Improvements;
and the LESSOR makes no other representations or warranties
concerning the Premises, its suitability for the use intended
by the LESSEE, or the surface or subsurface conditions of the
Premises; and if the soil conditions of the Premises are not in
all respects entirely suitable for the use or uses to which the
Premises will be put, then it is the sole responsibility and
obligation of LESSEE to take such action as may be necessary to
place the Premises in a condition entirely suitable for the
development of the Premises. This is expressly agreed between
the Parties to be a material term of this Lease. Prior to the
Commencement Date LESSEE shall exercise due diligence and
conduct or cause to be conducted an environmental assessment or
audit acceptable to the LESSOR of the Premises to ascertain
whether it is in all respects suitable for the construction and
completion of the Improvements. LESSOR in turn agrees to grant
LESSEE, its agents or experts full access to the Premises for
the purpose of conducting all geotechnical, ecological or other
inspection of the Premises necessary to comply with this Lease
and its attachments or amendments, or to prepare for the .
construction of the Improvements.
06/13/91 EXHIBIT "B"
5409u/2460/39 Page 35 of 35
EXHIBIT "C"
CONDITIONS TO COMMENCEMENT
1. Plan Approvals.
LESSEE shall obtain approvals from all applicable
government entities for conditional use permit, coastal
development permit, supplemental environmental impact report
and final plans and specifications with respect to the
Improvements to be located on the Premises. The Conditional
Use Permit and Coastal Development Permit shall be deemed
"final" for purposes of this Paragraph upon the last of the
following three (3) dates (i) as to each condition on said
permits, on the date on which LESSEE obtains LESSOR (and, if
required, Coastal Commission) approval of such items in a
manner reasonably satisfactory to LESSEE, (ii) the date on
which all applicable statutes of limitations for challenging
such permits have expired without litigation being filed, or
(iii) the date on which all such litigation is favorably and
finally terminated, whether by judgment, dismissal, settlement
agreement or otherwise. The development of the final plans and
specifications shall be according to the requirements set out
in the Scope of Development (Exhibit "D") .
2. Evidence of Financing Ccmmitments.
LESSEE shall obtain and shall submit to LESSOR' s
Executive Director, evidence reasonably satisfactory to
LESSOR' s Executive Director that LESSEE has obtained the
financing necessary for the development of the Improvements on
the Premises in accordance with this Lease. _
Such evidence of financing shall include the following:
(a) A copy of the commitment or commitments obtained
by LESSEE for the mortgage loan or loans to assist in financing
• the construction of the Improvements, certified by LESSEE to be
a true and correct copy or copies thereof. The commitments for
financing shall be in such form and content acceptable to
LESSOR' s Executive Director as reasonably evidences a firm and
enforceable commitment, with only those conditions which are
standard or typical for the lender(s) involved for similar
projects;
(b) Sufficient information (e.g. , an annual report)
regarding the construction lenders to enable LESSOR' s Executive
Director to determine whether or not such lender(s) has (have)
sufficient financial resources to fund the loan(s) ; and
06/13/91 EXHIBIT "C"
5409u/2460/39 Page 1 of 6
(c) A copy of the contract between LESSEE and the
contractor(s) for the construction, of the Improvements,
certified by LESSEE to be a true and correct copy thereof; and
(d) A financial statement and/or other documentation
satisfactory to LESSOR' s Executive Director as evidence of
other sources of capital sufficient to demonstrate LESSEE has
adequate funds committed to cover the difference, if any,
between construction and development cost minus financing
authorized by mortgage loans.
within thirty (30) days after receipt of request for
approval of its evidence of financing, LESSOR' s Executive
Director shall respond in writing by stating what further
information, if any, he or she reasonably requires in order to
determine whether or not to approve such evidence of
financing. Upon receipt of such a timely response, LESSEE
shall promptly. furnish to the Executive Director such further
information as may be reasonably requested.
LESSEE' s request for approval of its evidence of
financing shall be deemed complete thirty (30) days after
Executive Director' s receipt thereof, if no timely response
requesting further information is delivered to LESSEE, or, if
such a timely response requesting further information is
received, on the date that LESSEE delivers such additional
information to Executive Director. Once LESSEE' s request for
approval of its evidence of financing has been accepted as or
is deemed complete, Executive Director shall not be entitled to
demand additional information or to disapprove the request on
the basis that LESSEE has not furnished adequate or complete
information.
The Executive Director LESSOR shall approve or
disapprove LESSEE' s evidence of financing within fifteen (15)
days after LESSEE' s request for such approval is accepted as
complete. Approval shall not be unreasonably withheld or
conditioned. If the Executive Director shall disapprove any
such evidence of financing, it shall do so by written notice to
- LESSEE stating the reasons for such disapproval.
3. Approved Condition of TitleL Acquisition ofProperty
Interests in the Premises To Place Title In Such
Condition.
Except as expressly set forth herein, LESSOR covenants
to convey to LESSEE the leasehold estate in the Premises free
and clear of all monetary liens and all recorded and unrecorded
nonmonetary liens, encumbrances, easements, licenses, leases,
and other defects of title inconsistent with LESSEE' s approved
development plans, including without limitation Exceptions 1-33
set forth in the litigation guarantee issued by First American
06/13/91 EXHIBIT "C"
5409u/2460/39 Page 2 of 6
Title Insurance Co. (Order No. ) dated January 15,
1986 (the "Approved Title Condition" ) .
Except as expressly set forth herein, LESSOR hereby
represents that the City currently holds the fee title to the
Premises in a condition that would enable the City to convey
leasehold title in the Approved Title Condition, excepting only
the "Maxwell' s Lease" and any currently existing subtenants
(that certain lease dated March 7, 1983 and amended
September 19, 1983 between the City as landlord and W.P.L.
Industries as tenant) . Within the time set forth in the
Schedule of Performance (Exhibit "E" ) , LESSOR, LESSEE, and the
City shall exercise best efforts to negotiate and enter into a
binding written agreement with the holder of the Maxwell' s
Lease and all subtenant to terminate or amend said leases on
terms acceptable to LESSOR, the City, LESSEE, and the holder of
the Maxwell' s Lease, and all subtenants, no later than the
Commencement Date of this Lease. Subject to LESSEE' s and
Maxwell' s performance of their obligations under such
agreement, LESSOR covenants that on or before the Commencement
Date it shall have entered into the Master Lease with City in
the Approved Title Condition.
Notwithstanding the foregoing, LESSEE acknowledges
that the State of California, through the Office of the
California Attorney General and the State Lands Commission, has
made contentions that the Premises or some portions thereof
have been or may have been impliedly dedicated to the public or
are or may be subject to a public trust and that development
and operation of the Improvements on the Premises would or may
be inconsistent with the rights of the public to public open
space and/or recreational use and/or access to the coastline.
LESSEE assumes all risks regarding any such claims, whether
made by the State of California cr any third party. Either -
LESSOR or LESSEE shall have the right to file and prosecute a
quiet title action to determine the validity of any such
adverse claims against LESSOR' s and LESSEE' s title to the
Premises. In addition, in the event of any legal challenge
instituted by the State of California or any third party making
any such adverse claim against the title of LESSOR or LESSEE to
the Premises, the parties hereby agree to cooperate in
defending said action as set forth herein.
In the event that either LESSOR or LESSEE determines
to file a quiet title action, the same shall be diligently
prosecuted and the party maintaining the same shall exercise
best efforts to obtain a final and favorable judgment as soon
as practicable after the action is filed. No such action shall
be filed without prior consultation with the other party, which
other party shall have the right to appear independently in the -
action to represent its interests.
In the event of litigation instituted by the State of
California or other third party, LESSOR shall have the right,
06/13/91 EXHIBIT "C"
5409u/2460/39 Page 3 of 6
but not the obligation, to defend such action; provided, that
without LESSEE' S prior written consent, LESSOR shall not allow
any default or judgment to be taken against it and shall not
enter into any settlement or compromise of any claim which has
the effect, directly or indirectly, of prohibiting, preventing,
delaying, or further conditioning or impairing LESSEE' s
development, use, or maintenance of any portion of the Premises
or impairing any of LESSEE' s rights hereunder. In addition,
LESSOR shall provide reasonable assistance to LESSEE in
defending any such action, such assistance to include:
(i) making available upon reasonable notice, and at no cost to
LESSEE, LESSOR officials and employees who are or may be
witnesses in such action, and (ii) provision of other
information within. the custody or control of LESSOR and the
City that is relevant to the subject matter of the action.
LESSEE shall have the obligation to defend any such
action filed by the State of California or any third party;
provided, however, that this obligation to defend shall not be
effective if and to the extent that LESSEE determines in his
reasonable discretion that such action is meritorious or that
the interests of the parties justify a compromise or settlement
of such action. In this regard, LESSEE' s obligation and right
to defend shall include the right to hire attorneys and experts
necessary to defend, subject to reasonable approval by LESSOR.
LESSOR must be notified prior to any compromise or settlement
and shall have approval rights on any agreement that has the
potential of adversely affecting LESSOR' s right, title or
interest in the Premises.
LESSOR shall be solely responsible for all of its
costs and expenses incurred in prosecuting or defending any
such action. LESSEE shall be solely responsible for all of its
costs and expenses incurred in prosecuting or defending any such action and, in addition, to any costs and expenses arising
out of or relating in any manner to the development of the
Premises or this Lease if the action results in an unfavorable
judgment or settlement that prohibits or prevents LESSEE's
development of the Improvements on the Premises pursuant to
' this Lease. LESSEE shall be entitled to full reimbursement up
to a maximum amount -of Fifty Thousand Dollars ($50,000) from
LESSOR from all legal costs and expenses incurred by LESSEE in
prosecuting or defending any such action if the action results
in a favorable judgment or settlement permitting LESSEE to
develop the Improvements as contemplated in this Lease. Such
reimbursement shall include interest accruing on the principal
amount of LESSEE' s expenditures at the rate of eleven percent
(12%) per annum from the date expenditures are made until fully
reimbursed. Rent credits shall be allocated first to accrued
interest, then to unpaid principal. LESSEE shall provide to
06/13/91 EXHIBIT "C"
5409u/2450/39 Page 4 of 6
LESSOR an itemized statement of LESSEE' s costs and expenses in
such detail as LESSOR may reasonably require in order to verify
the amount of LESSEE' s actual and reasonable expenses and the
time such expenses were incurred. LESSEE agrees to act
reasonably to conserve funds subject to this rent credit,
consistent with the parties' mutual objective of having the
action handled by qualified experts and quickly and
successfully concluded.
4. Environmental Testing and Clean Up Costs.
LESSEE shall obtain soil: test analysis to be approved
by LESSOR' s Executive Director to determine the suitability of
the Site for the proposed development. In the event the test
evidences a need to remediate contamination of the Premises in
conjunction with development, the LESSOR shall bear the cost
for the first Twenty-Five Thousand Dollars, the LESSEE shall
bear the cost of the second Twenty-Five Thousand and costs
above Fifty Thousand shall be shared equally. If the cost
estimate to remediate contamination exceeds One Hundred
Thousand Dollars ($100,000) then pursuant to Paragraph 6(f)
below, either party may terminate this Lease. Notwithstanding
the above, if LESSEE determines to bear all such costs above
One Hundred Thousand Dollars, then LESSOR shall not have the
ability to terminate this Lease.
S. Miscellaneous Governmental Approval.
In addition to the approvals to be obtained from City
and LESSOR as provided herein, LESSOR and LESSEE shall
cooperate and diligently pursue, within the times set forth in
the Schedule of Performance (Exhibit "E") , the obtainment of
all other governmental approvals required for development and
operation of the Improvements.
6. Failure of .Conditions; .Termination.
In the event that, prior to the Commencement Date:
(a) LESSEE fails to submit or is unable, after and
despite its exercise of reascnable diligence, to timely
obtain apprcval of the final building plans and
specifications for the Improvements, in accordance with
paragraph 1 of this Exhibit "C"; or
(b) LESSEE is unable, after and despite its exercise
of reasonable diligence, to timely obtain financing
commitments for the development of the Premises or the
Executive Director' s approval thereof, in accordance with
paragraph 2 of this Exhibit "C"; or
06/13/91 EXHIBIT "C"
5409u/2460/39 Page 5 of 6
(c) LESSOR, LESSEE, and the City fail to timely enter
into a binding written agreement with the holder of the
Maxwell's Lease or any other leasehold interest capable of
asserting relocation rights, in accordance with Paragraph 3
of this Exhibit "C";
(d) Replacement Parking requirements of any
governmental entity fail to be satisfied by the onsite
parking;
(e) LESSOR fails to timely tender possession of the
Premises, with the condition of title meeting the
requirements set forth in Paragraph 3 of this Exhibit "C";
or
(f) LESSEE either fails to obtain an approved
environmental study or the cost to clean up contamination
found on or under the Premises exceeds $100,000 unless
LESSEE determines to pay all costs in excess of One Hundred
Thousand Dollars pursuant to Paragraph 4 of this Exhibit
"C" • or
(g) As of the scheduled Commencement Date, LESSOR is
in default of any of its other obligations under this
Lease, and such failure or default is not cured and is not
being cured in accordance with paragraph 20 of Exhibit "B"
to the Lease;
(h) As of the scheduled Commencement Date, LESSOR has
not entered into the Master Lease with City;
(i) As of the scheduled Commencement Date, LESSOR
fails to deliver to LESSEE the fully executed
Nondisturbance and Recognition Agreement in the form _ -
attached to this Lease as Exhibit "J";
(j) As of the Scheduled Commencement Date, LESSEE is
in default of any obligation under this Lease, and such
failure or default is not cured and is not being cured in
accordance with paragraph 20 of Exhibit "B" to the Lease;
then this Lease shall, at the option of either party, under
paragraph(c) a, b, c, d or f above, be terminated by
written notice thereof to remaining party; or, LESSEE may
terminate under paragraphs a or g; LESSOR may terminate
under paragraph j above, and thereupon neither LESSOR nor
LESSEE shall have any further rights or obligations with
respect to the Premises or this Lease.
06/13/91 EXHIBIT "C"
5409u/2460/39 Page 6 of 6
EXHIBIT "D"
SCOPE OF DEVELOPMENT
I. LESSEE' S RESPONSIBILITIES:
I. The Improvements. As used in this Lease, the term
"Improvements shall mean all improvements constructed,
assembled, or placed by LESSEE on the Premises. Except as
specifically set forth in Section II below, LESSEE shall be
responsible for demolition and clearance from the Premises of
all existing improvements inconsistent with the construction
thereon of the "Improvements" in accordance with the plans and
permits to be approved by the City, LESSOR, and any other
governmental agency that has jurisdiction, as the same may be
amended from time to time. Additional clarifications of
LESSEE' s responsibilities are set forth below:
(i) Concept. The Improvements shall consist of
a multi-level restaurant project located within the footprint
of the existing improvements and the asphalt parking lot
located south of the Pier. The lifeguard station and beach
access road/bike path will remain in their present locations.
Emphasis is on small building footprints and silhouettes and
large public spaces, promenades and plazas. Pier, ocean, and
beach view opportunities, both in and through the project, will
be maximized wherever possible. Maxwell' s will have the option
of relocating to a new structure within the project.
New structures on the Plaza or PCH level are
.limited to the new Maxwell' s (building "A") and buildings "B"
and "C" on the plans. The buildings shall be consistent with
the development guidelines for District 10 of The Downtown _
Specific Plan. New structures on the lower or beach access
level will house food services, beach-related concessions, and
other approved visitor-serving commercial uses.
Structures on both levels shall be set back
• so as to create pedestrian promenades along the entire ocean
side of the project. The upper promenade shall be lower than
the plaza level to improve PCH views of the surf. The lower
promenade or boardwalk shall be above the bike path so as to
separate pedestrians from skateboarders, bicyclists, and roller
skaters.
(ii) Parking. The parking structure shall
contain approximately 361 commercial spaces and no less than
193 and no more than 250 public spaces in accordance with the
Conditional Use Permit (including subterranean stalls on
"lifts") to satisfy code requirements for the uses on the
Premises, calculated as
06/13/91 EXHIBIT "D"
5409u/2460/39 Page 1 of 5
follows: (1) the relocated Maxwell' s restaurant:
seventy-seven (77) spaces (based on the number of spaces
currently provided pursuant to the Maxwell' s Lease) ; (2) the
two (2) major new PCH-level buildings, any square footage in
the New Maxwell' s in excess of 11,400 square feet and the
approximately 4,500 square feet of new restaurants/cafes on the
lower level in excess of 1500 square feet: 1 space per 100
square feet of floor area; and (3) pedestrian-oriented cafe and
beach concessions: no spaces. LESSEE shall not be responsible
for providing any off-Premises parking to replace any existing
parking spaces on or adjacent to the Premises that will or may
be eliminated due to the development of the project, whether
required by the City, the California Coastal Commission, or
otherwise. LESSEE will, in accordance with the provisions of
Paragraph 7(c) of the Lease, cause 250 public parking spaces to
be built on the Premises.
(iii) Access. The project shall be designed so
that pedestrians will be able to enter the project site through
the signalized intersections at Main and Lake Streets.
Elevators, and ramps at all level changes, shall be provided
for full handicap access throughout the project and down to the
beach. Grand staircases from the plaza level to the beach
access level shall also be provided to act as observation and
sitting areas.
The project shall provide automobile entry
to the plaza level south of building "A" and to the lower
parking level at Lake Street. Exiting shall be provided onto
PCH south of the entry and from the lower parking level out to
Lake Street. Two-way ramps shall provide access between the
parking levels. Payment control points shall be located on the
lower level at the base of the ramp and at the Lake Street
entrance/exit. Emergency vehicle access and dedicated fire _
lanes shall be provided in accordance with City requirements
and the Fire Code.
(iv) Construction. Buildings "A," "B," and "C"
shall be fully sprinklered and constructed to conform to all
• applicable City building ordinances. They shall be erected on
top of a fully sprinklered steel reinforced concrete parking
structure. Surface finishes, design, and roofing shall be
consistent with the Downtown Design Guidelines and direction
from the City of Huntington Beach Design Review Board.
Hardscape shall be a mixture of stone, concrete, and exposed
aggregate surfaces.
(v) Landscaping. Landscaping shall emphasize a
variety of palm trees, flowering vines, shrubbery, and bedding
plants, as well as a variety of coastal grasses. Landscaping
shall be accented by night-time lighting. Landscape plans
shall be as approved by the City.
06/13/91 EXHIBIT "D"
5409u/2460/39 Page 2 of 5
(vi ) Size of Buildings. The buildings to be
included in the project shall be of approximately the following
sizes (in square feet) :
Plaza Level Square Footage
Building "A" (Maxwell' s) :
lst Level 11,200
2nd Level 3,666
15,000 15,000
Building "B"
lst Level 8,700
2nd Level _ 2,300
11,000 11,000
Building "C"
1st Level 8, 650
2nd Level 5,350
14,000 . 14,000
Total Plaza Level 40,000
Beach Access Square Footage
Dwight' s 2,500
Cafe 5,750
Beach Concession 272
Total Beach Access Level 8,522
PROJECT TOTAL 48,522
The size and the distribution of square footage among the
- particular buildings and parts of building may vary from the
above, provided, however, the prcject total square footage
shall be a minimum of 45,000 and shall not exceed 60,000 square
feet without an amendment to this Scope of Development.
(vii) Cost of Construction. The Improvements
. shall be constructed at a minimuir, hard" cost of Ninety Dollars
($90.00) per square foot of gross building floor area for the
three (3) buildings referenced in subparagraph (vi) above (not
including the parking or Beach Access level facilities),
including without limitation tenant improvements and
furnishings, fixtures, and equipment, site preparation costs,
parking, landscaping, driveways, and other similar items. The
actual cost of construction will be certified and submitted to
06/13/91 EXHIBIT "D"
5409u/2460/39 Page 3 of 5
LESSOR' s Executive Director at the time specified in the
Schedule of Performance Exhibit "E. "
2. Approval of Plans, Drawings and Related
Documents
The LESSOR shall receive copies of all plans,
drawings and related documents for the development of the
Premises, including any proposed material changes therein. The
LESSOR shall review such documents to determine consistency
with this Scope of Development (Exhibit "D") .
II. LESSOR'S RESPONSIBILITIES:
1. Reopening and Maintenance of Municipal Pier.
LESSOR agrees to assist LESSEE in any requests to the City for
maintenance and repair of City or►ned facilities including
without limitation the municipal Pier and the City Beach, the
maintenance and repair of which cr lack thereof could
negatively impact the project.
2. Utilities. Subject to the maximum expenditure cap
in Paragraph 6 below, LESSOR agrees to provide, or cause to be
provided, within the times required in the Schedule of
Performance, all Utilities (water, sewer, gas, electrical, and
telephone) required for the development, use, and maintenance
of the improvements on the Premises, with sufficient capacities
to adequately service the Premises, with such Utilities to be
located on the Premises or stubbed no further away than 3 feet
from the curb within the Premises along the west side of
Pacific Coast Highway. LESSEE shall be responsible for
extending Utilities from said location(s) to the improvements
located on the Premises in accordance with Paragraph I above.
3. Easements and Permits. LESSOR agrees to cooperate
with LESSEE in connection with the filing and processing of any
and all applications for permits and other approvals required
by the City or any other governmental agency in connection with
the development of the Premises.
4. Access for Service Vehicles. During the entire
term of this Lease, LESSOR agrees to provide, or cause to be
provided, access for service and delivery vehicles to the
businesses on the Premises along the access road/bike trial on
the beach side of the Premises; provided that such access may
be restricted from 10:30 a.m. - 4:00 p.m. on weekdays and from
9:00 a.m. - 4:00 p.m. on weekends.
5. Relocation Assistance. The obligations of LESSOR
and LESSEE with respect to the temporary shutdown of Maxwell' s
and relocation of Maxwell' s and as to other subtenants into the
project to be developed by LESSEE on the Premises shall be as
set forth in the agreement by and among LESSOR, LESSEE, the
06/13/91 EXHIBIT "D"
5409u/2460/39 Page 4 of 5
City, and the holder of the Maxwell' s Lease, and any current
Sublessee as referenced in Paragraph 3 of Exhibit "C" (the
"Conditions to Commencement" ) . Otherwise, LESSOR shall be
solely responsible for payment of relocation expenses and
provision of relocation assistance to any persons or entities
displaced as a result of LESSEE' S development of the Premises,
in accordance with applicable previsions of law.
6. Lessor Expenditure Maximum. The total amounts of
costs or expenditures to the LESSOR separate and apart from the
Public Parking Construction Payment in Paragraph 7(c) and the
Rent Credit in Paragraph 7(d) of the Lease, prior to the
issuance of the Certificate of Completion for the Improvements,
shall not exceed One Million Dollars ($1,000,000) . This cap on
expenditures includes, but is not limited to, all costs
incurred or to be incurred due to litigation, hazardous waste
remediation, relocation of existing tenants and provision of
utilities to the Premises. Any such costs incurred as a result
of the construction of the Improvements pursuant to the Lease
which in aggregate exceed One Million Dollars shall become the
obligation of the LESSEE. Costs incurred after the issuance of
the Certificates of Completion stall be allocated between the
parties as provided in the Lease.
06/13/91 EXHIBIT "D"
5409u/2460/39 Page 5 of 5
EXHIBIT "E"
SCHEDULE OF PERFORMANCE
Item of Performance Time for Performance
1. LESSEE submits to City and Completed
LESSOR application for
Conditional Use Permit and
Coastal Development Permit
(Exhibit "C, " 111)
2. LESSOR completes review and Completed
exercises reasonable
diligence to cause City to
approve Conditional Use
Permit, Coastal Development
Permit, and supplemental
environmental impact report
(Exhibit "C, " 111)
3. LESSOR, LESSEE, and the City Within one hundred and
exercise best efforts to eighty (180) days of the
enter into a binding written date City approves the
agreement with the holder of Conditional Use Permit,
the Maxwell' s Lease, Coastal Development
and any subtenants Permit, and Supplemental
(Exhibit "C, " 113) EIR and all appeals are
finally determined
4. LESSEE delivers Security Within ten (10) days
Deposit (Lease, 78) after the Commencement Date
5. LESSEE submits to City and Within one hundred fifty
LESSOR final building plans (150) days after the
and specifications for later of the following:
Improvements (Exhibit "C, " (i) the date on which all
11 S!1 and 3) of the permits and
approvals referenced in
paragraph 2 herein become
"final"; or (ii ) the date
on which the City, LESSOR,
and LESSEE enter into a
binding written agreement
with the holders of the
Maxwpll' is Lease and any
subtenants
06/13/91 EXHIBIT "E"
5409u/2460/39 Page 1 of 3
%.J �.,1
6. LESSOR completes review Within thirty (30) days
and exercises reasonable after submittal
diligence to cause City to
complete review of final
building plans and speci-
fications for Improvements
(Exhibit "C, " 11)
7. LESSEE submits evidence Within one hundred eighty
of financing (180) days after City and
(Exhibit "C, " 12) LESSOR approval of final
building plans
S. LESSOR reviews and approves Within 30 days of receipt
(or disapproves) evidence of complete financing
of financing (Exhibit "C, " package
T2)
9. LESSEE delivers evidence Within thirty (30) days
of insurance; Lease term after LESSOR approval
commences; LESSOR causes of evidence of financing
Title Company to deliver (and satisfaction or
title policy to LESSEE; waiver of all of the
LESSEE obtains building other Conditions to
permit(s) and construction Commencement in Exhibit
loan records (Lease, Ts 4 "C")
and 9; Exhibit "B, " T10;
Exhibit "C, " T3)
20. LESSOR makes funds available As of the date private
for Public Parking construction loan funds
Construction Payment but in no event prior to
thirty (30) days before
commencement of construction
11. LESSEE commences construct- Within thirty (30) days
tion of Improvements (Lease, after Commencement Date
1{6)
. 12. LESSOR provides Utilities Prior to LESSEE' s
to the Premises (Exhibit scheduled date for
"B," 112; Exhibit "D, " 1911 .2) commencement of
construction
13. LESSEE completes construction Within twenty-four (24)
of Improvements (Lease, months after commence-
%6; Exhibit "D, " T1 .1) ment of construction
14. LESSEE requests Certificate Within thirty (30) days
of Completion (Lease, V6.c) after completion of
construction
06/23/91 EXHIBIT "E"
5409u/2460/39 Page 2 of 3
25. LESSEE furnishes to Prior to issuance of Certi-
LESSOR as-built plans ficate of Completion
and itemized certified
statement of
construction costs
(Exhibit "B" %3.a;
Exhibit "D" %1 . 1(vii) )
16. LESSOR shall either approve Within 30 days of request
or disapprove Certificate of
Completion (Lease, 1I6(c) )
It is understood that the foregoing Schedule of
Performance is subject to all of the terms and conditions set
forth in the text of this Lease. The summary of the items of
performance in this Schedule of Performance is not intended to
supersede or modify the more complete description in the text;
In the event of any conflict or inconsistency between this
Schedule of Performance and the text of this Lease, the text
shall govern.
Reasonable requests by Lessee for modifications in the
above Schedule of Performance may be authorized in writing at
the sole discretion of the Agency' s Executive Director.
06/13/91 EXHIBIT "E"
5409u/2460/39 Page 3 of 3
EXHIBIT "F"
When Recorded
Mail to:
Redevelopment Agency of
the City of Huntington
Beach
Attn: Executive Director/
City Administrator
2000 Main Street
Huntington Beach, CA 92648
CERTIFICATE OF CO*IENCEMENT DATE
This certificate is executed , 199 by the
Redevelopment Agency of the City of Huntington Beach and
Stanley M. Bloom, respectively Lessor and Lessee under that
certain Lease dated , 1991 (the "Lease") . The
purpose of this certificate is to establish a recorded date
certain as the "Commencement Date" as that term is used and
defined in the Lease.
The parties hereto agree that the Commencement Date shall
be f and authorize this certificate to be
recorded in the Official Records of Orange County.
Stanley M. Bloom Executive Director .
(Lessor) Redevelopment Agency of the
City of Huntington Beach
( "Lessor")
06/13/91 EXHIBIT "F"
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EXHIBIT "G"
[RESERVED]
[To Be Inserted]
06/13/91 EXHIBIT "G"
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EXHIBIT "H"
SITE MAP
[To Be Inserted]
06/13/91
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EXHIBIT "I"
MASTER LEASE
[To Be Inserted]
06/13/91
5409u/2460/39
EXHIBIT "J"
NONDISTURBANCE AND RECOGNITION AGREEMENT
[To Be Inserted]
06/13/91
5409u/2460/39
L E A S E
LESSOR: CITY OF HUNTINGTON BEACH,
a municipal corporation
LESSEE: REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH,
a Public body, corporate and
politic
DATED:
EXHIBIT "I"
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INDEX
Pace
Article
I . Leased Premises. . . . . . . . . . . . . . . . . . . . . . . . 1
II . Term of Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 1
III . Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
IV. Indemnification and Hold Harmless. . . . . . 2
V. Use of Premises. . . . . . . . . . . . . . . . . . . . . . . . 3
VI. Improvements. , , " " . . . . . . . . . . . . . . . . . . . . 3
VII. Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VIII . Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . 4
IX. Covenants of Quiet Enjoyment
and Nondisturbance. . . . . . . . . . . . . . . . . . . . . 4
X. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exhibits
A Legal Description
B Nondisturbance and Recognition Agreement
C Short Form Memorandum of Lease
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LEASE
THIS LEASE is made, and entered into as of this day
of by and between the CITY OF HUNTINGTON BEACH,
a municipal corporation (herein referred to as "Lessor" ) , and
the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a
Public body, corporate and politic (herein referred to as
"Lessee" ) .
The parties hereto mutually covenant and agree that
Lessor, in consideration of the rentals payable by Lessee and
the covenants and agreements to be kept, observed and
performed by Lessee hereunder , has rented and leased unto
Lessee, and Lessee does hereby take and hire from Lessor, the
Leased Premises, pursuant to the provisions of this Lease.
ARTICLE I
Leased Premises
1.1 "Leased Premises" or "Premises," as hereinafter
collectively referred to, shall consist of that certain real
property located in the City of Huntington Beach, County of
Orange, State of California and more particularly described
in Exhibit "A" attached hereto and incorporated herein by
this reference, together with all improvements now located
thereon.
1.2 The Leased Premises are leased and granted to
Lessee for the purpose of subleasing and assigning the same
to Stanley M. Bloom (hereafter "Sublessee" ) in accordance
with the "First Amended Pier Side Lease" as defined in
Section 2.1 below.
1.3 Prior to the "Commencement Date" (as hereinafter
defined) , Lessee and its designees shall have the right, upon
prior notice to Lessor, to enter upon the Leased Premises to
make any and all inspections and tests of the Leased Premises
in connection with the development of the Leased Premises.
TO HAVE AND TO HOLD the Premises unto Lessee for the
term of this Lease as the same is hereinafter defined.
ARTICLE II
Term of Lease
2.1 The term of this Lease shall be fifty-five (55)
years commencing on the "Commencement Date" as defined in
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�1
that certain First Amended Pier Side Lease dated
1991 by and between Lessee and Stanley M. Bloom ( the "First
Amended Pier Side Lease" ) . The above described term of this
Lease is hereinafter referred to as the "Lease Term."
ARTICLE III
Rent
3.1 Lessee agrees to pay to Lessor at
or at such other place as may be
designated by Lessor from time to time, the amount payable as
rent by the Sublessee pursuant to the First Amended Pier Side
Lease (taking into account any deductions, reductions or
offsets thereto to which the Sublessee may from time to time
be entitled) up to a cumulative total amount during the Lease
Term not to exceed
Dollars ($ } plus interest thereon at the rate of
ten percent (10%) per annum accruing from the Commencement
Date until said amount is paid in full. The rent payable by
Lessee hereunder shall be payable within thirty (30) days of
Lessee' s receipt of the same from the Sublessee pursuant to
the First Amended Pier Side Lease.
3.2 As additional rent hereunder, Lessee shall pay
during the Lease Term, and prorated to the commencement and
the termination of the Lease Term, any and all taxes and
assessments levied against the Premises, or any portion
thereof, public utility and related costs and expenses, and
any other expenses or charges which during the Lease Term
shall be levied, assessed or imposed by any governmental
authority upon or with respect to, or incurred in connection
with, the possession, occupation, operation, alteration,
maintenance, repair and use of the Premises, it being
intended that this Lease shall result in a rent to be paid to
Lessor, without additional cost to Lessor or diminution or
offset thereto, in the fixed amount specified in Section 3.1
above.
ARTICLE IV
Indemnificat,ign And_Hold Harmless
4.1 Except for claims arising out of the acts or
omissions or neglect of Lessor, Lessee covenants to defend
and indemnify Lessor and save it harmless from and against
any and all claims, actions, damages, liability and expenses,
including reasonable attorneys' fees, in connection with the
loss of life, bodily injury and/or damage to property arising
from or out of any occurrence in, upon or at the Premises, or
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the occupancy or use by Lessee of the Premises or any part
thereof, or arising from or out of Lessee' s failure to comply
with any provision of this Lease or otherwise occasioned
wholly or in part by any act or omission of Lessee, its
agents, representatives, contractors, employees, servants,
customers or licensees. Except for Lessor's willful or
negligent conduct, Lessee hereby assumes all risk of damage
to property or injury to persons in, upon or about the
Premises from any cause whatsoever.
ARTICLE V
Use of Premises
5.1 Lessee may use the Premises for any lawful purpose.
5.2 Lessee may from time to time, without the necessity
of consent from or notice to Lessor, transfer, assign,
sublet, mortgage and/or otherwise hypothecate this Lease and
Lessee's interest in and to the Premises.
ARTICLE VI
Improvements-
6.1 subject to compliance with all applicable laws,
rules and regulations, Lessee may from time to time during
the Lease Term make or cause to be made such improvements
and/or alterations to the Premises, including demolition of
the improvements now or hereafter comprising the Premises, as
Lessee shall in its sole discretion deem appropriate without
the necessity of consent from or notice to Lessor .
6.2 Upon expiration of the Lease Term, Lessee may, in
Lessee's sole and absolute discretion, remove some or all of
the improvements then comprising the Premises and any such
improvements not so removed by Lessee shall be deemed to be
abandoned and title thereto shall be deemed to have been
transferred to Lessor.
ARTICLE VII
Default
7.1 The following events shall constitute default(s) by
Lessee:
7.1.1 The failure by Lessee to make, as and when
due, any payment of rent or other charges payable by Lessee
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hereunder or to timely discharge any other monetary
obligation hereunder, where such failure has continued for a
period of ten (10) days after written notice thereof from
Lessor to Lessee.
7.1.2 The failure by Lessee to observe or to
perform any of the nonmonetary covenants, promises,
agreements or provisions of this Lease to be observed or
performed by Lessee other than as specified in Section 7.1.1,
where such failure has continued for a period of thirty (30)
days after written notice thereof from Lessor of such
default; provided, if such default by its nature is not
susceptible to cure within such thirty (30) days, Lessee
shall not be deemed to be in default if within such thirty
(30) day period Lessee commences to effect such cure and
thereafter diligently prosecutes the same to completion.
ARTICLE VIII
Attorneys' -F-ees
8.1 In the event that either Lessor or Lessee brings
any action or proceeding against the other for possession of
the Premises or for the recovery of any sum due hereunder, or
because of the breach of any covenant, condition or provision
hereof, or for any other relief against the other,
declaratory or otherwise, including appeals therefrom, and
whether being an action based upon a tort or contract, then
the prevailing party in any such proceeding shall be paid by
the unsuccessful party reasonable attorneys' fees and costs
of such action or proceeding which shall be enforceable
whether or not such action or proceeding is prosecuted to
final judgment, and including an allowance for reasonable
attorneys' fees and costs for appeals and rehearings.
ARTICLE IX
Covenants- of Quiet Enjoyment and Nondisturbance
9.1 Lessor does hereby covenant, promise and agree to
and with Lessee that Lessee, for so long as it is not in
default hereof, shall and may at all times peaceably and
quietly have, hold, use, occupy and possess the Premises
throughout the Lease Term, without any litigation, suit,
molestation or eviction by Lessor or any persons claiming by
or through Lessor or claiming the Premises, other than third
parties claiming under or through Lessee or Sublessee.
9.2 On or before the Commencement Date of this Lease,
Lessor shall execute and deliver to Sublessee the
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`'J
Nondisturbance and Recognition Agreement attached hereto as
Exhibit "B" and by this reference incorporated herein.
ARTICLE X
General
10.1 The covenants and agreements herein contained
shall bind and inure to the benefit of Lessor, its successors
and assigns, and Lessee, its successors and assigns, subject
to the provisicns of this Lease.
10.2 Any notice, demand, request, consent, approval or
communication that Lessor or Lessee desires or is required to
give to any other party shall be in writing addressed to such
other party at the following addresses or such other address
as may have been specified by notifying the other parties of
the change of address:
Lessor:
Lessee: Redevelopment Agency of the City of
Huntington Beach
Attn: Executive Director/City
Administrator
2000 Main Street '
Huntington Beach, CA 92648
I
Sublessee/
Leasehold
Mortgagee: Where notice is required under Exhibit
"B" , paragraph 5, to the addresses
referenced in Exhibit "B" , paragraph 5
Notice shall be deemed served on the third (3d) business
day following the day of mailing if mailed with the United
States Postal Service, by certified mail, return receipt
requested or one (1) business day after the same is timely
deposited with a reputable overnight courier service.
10.3 The headings or captions of Articles in this Lease
are for convenience and reference only, and they in no way
define, limit or describe the scope or intent of this Lease
or the provisions of such Articles.
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10.4 Feminine or neuter pronouns shall be substituted
for those masculine form or vice versa, and the plural shall
be substituted for the singular number or vice versa, in the
place or Places herein where the context may require such
substitution or substitutions.
10.5 This Lease shall be governed by and construed
pursuant to the laws of the State of California.
10.6 This agreement may be executed in several
counterparts, each of which shall constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed
this Lease on the date first set forth above.
LESSOR J!ESSEE
CITY OF HUNTINGTON BEACH, REDEVELOPMENT AGENCY OF THE CITY
a municipal corporation OF HUNTINGTON BEACH, a public
body, corporate and politic
By: By:
Its• Its:
ATTEST: ATTEST:
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EXHIBIT A
Legal Description
That portion of Huntington Beach, County of Orange, State of
California as shown on a map recorded in Book 3, Page 36 of
Miscellaneous Raps in the office of the County recorder of
said county described as follows:
Beginning at the center line intersection of
Pacific Coast Highway and Lake Street, shown
as Ocean Avenue and First Street respectively,
on said mentioned map; thence along the center
line of Pacific Coast Highway south 48021142"
east 37. 50 feet to the intersection with the
southwesterly extension of the southeast
right-of-way line of Lake Street; thence south
41038118" west 50.00 feet to the true point of
beginning; thence north 48021142" west
1,020.00 feet; thence south 41038' 18" west
200.00 feet; thence south 48921 ' 42" east
1,020.00 feet; thence north 41038' 18" east
200.00 feet to the true point of beginning.
EXHIBIT "A"
TO LEASE
When Recorded flail To:
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. 50th Street
Vernon, CA 90058
NONDISTURBANCE AND RECOGNITION AGREEMENT
THIS NONDISTURBANCE AND RECOGNITION AGREEMENT
("Agreement") is made this day of , 1991,
between the CITY OF HUNTINGTON BEACH, a municipal corporation
("Lessor" ) and STANLEY M. BLOOM, an unmarried man
( "Sublessee") .
RECITALS:
A. The Redevelopment Agency of the City of Huntington
Beach ( "Lessee" ) has entered into a Lease dated ,
1991, (the "Lease") with Lessor covering the "Leased
Premises" (as hereinafter defined) .
B. Sublessee has entered into a First Amended Pier Side
Lease dated , 1991 ( the "Sublease") with Lessee
covering certain real property more particularly described in
Exhibit "A" attached hereto ( the "Leased Premises" ) .
C. Lessor agrees to enter into this Agreement in order
to induce Sublessee to enter into the Sublease. Sublessee
would not enter into the Sublease unless Lessor entered into
this Agreement. Lessor acknowledges that by Sublessee
entering into the Sublease it -will be benefited.
D. Sublessee and Lessor wish to confirm their
understanding with respect to the Sublease, the Lease and any
"Leasehold Mortgage" (as defined in the Sublease) placed upon
the Leased Premises.
In consideration of the mutual covenants set forth below
and notwithstanding any provisions of the Lease or Sublease
to the contrary, Lessor and Sublessee agree as follows:
1. Nondisturbance. So long as Sublessee is not in
default (beyond any period given Sublessee to cure such
default in the Sublease) in the payment of any rent or in the
performance of any of the terms, covenants, or conditions of
EXHIBIT "B"
TO LEASE
5/267/013376-0001/02 5/31/91
the Sublease: (a) Lessor will not bring, join or cooperate in
any action or proceeding to terminate Sublessee's interest,
estate, or rights under the Sublease (whether or not Lessor
has succeeded Lessee) ; (b) Sublessee's possession of the
Leased Premises and Sublessee's rights and privileges under
the Sublease shall not be diminished or interfered with by
Lessor; and (c) Lessor will continue to recognize the estate
of Sublessee created under the Sublease and Sublessee's
occupancy of the Leased Premises shall not be disturbed by
Lessor during the term of the Sublease or any extensions or
renewals which may be exercised under the provisions of the
Sublease.
2. Attornment. If the interest of Lessee in all or any
part of the Leased Premises shall be terminated by reason of
the exercise of any remedy by Lessor under the Lease or any
other action brought by Lessor, or by any other manner, and
Lessor succeeds to the interest and assumes all the
obligations of Lessee under the Sublease, Sublessee shall be
bound to Lessor under all of the terms, covenants, and
conditions of the Sublease for the balance of the Sublease
term and any extensions or renewals of the Sublease which may
be exercised under the provisions of the Sublease. Sublessee
hereby attorns to Lessor as its landlord, this attornment is
to be effective and self-operative without the execution of
any further instruments immediately upon Lessor succeeding to
the interest of Lessee under the Sublease. The respective
rights and obligations of Sublessee and Lessor under this
attornment shall be the same as that between Sublessee and
Lessee as set forth in the Sublease, it being the intention
of the parties to incorporate the Sublease by reference in
this Agreement, with the same force and effect as if the
Sublease were set forth at length in this Agreement.
Sublessee shall have the same remedies against Lessor for the
breach of a provision of the Sublease that Sublessee would
have had against Lessee. Sublessee, however, shall be under
no obligation to pay rent to Lessor until Sublessee receives
written notice from Lessor that Lessor has succeeded to the
interest of Lessee and assumed all the obligations of Lessee
under the Sublease. Lessor shall not hold Sublessee
responsible for any costs or acts caused by failure of Lessee
not related to any act of Sublessee which is connected with
any dispute between Lessor and Lessee with respect to whether
Lessor has succeeded to any or all of Lessee's interest and
assumed any or all of Lessee's obligations under the
Sublease.
3. Eublessee's Right to Encumber the Sublease. Lessor
recognizes Sublessee's right to mortgage or encumber the
Sublease and/or the leasehold estate thereunder pursuant to
paragraph lb of the General Conditions of the Sublease.
Subject to the terms of the Sublease, Lessor will recognize
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any and all of the rights of any lender of a "Leasehold
Mortgagee" as defined in the Sublease ("Leasehold
Mortgagee" ) . Subject to the terms of the Sublease, each
Leasehold Mortgagee who has succeeded to the rights of
Sublessee under the Sublease and has given notice to Lessor
has the same rights as Sublessee under this Agreement and may
act on behalf of Sublessee under this Agreement and Lessor
will acknowledge and accept such actions.
4. Notice. Lessor will give notice to Sublessee and
each Leasehold Mortgagee in the event of the termination of
the Lease or of any new lease prior to its stated expiration
date for any reason whatsoever. Any notice required under
the Lease to be given by Lessor to Lessee shall not be i
effective unless and until such notice is also given to
Sublessee and each Leasehold Mortgagee. Any notice or other
communication which a party shall desire or is required to
give to or serve upon the other or any Leasehold Mortgagee
shall be in writing and shall be served by registered or
certified mail, at the following addresses, or at such other
address as shall be designated from time to time by such
party by notice in writing given to the other by registered
or certified mail:
Lessor: The City of Huntington Beach
Sublessee: Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. Fiftieth Street
Vernon, CA 90058
With copies to: Jonathan Chodos
1559 South Sepulveda Blvd.
Los Angeles, CA 90025
Sublessee will furnish the addresses of each Leasehold
Mortgagee to Lessor.
5. Default Under the Sublease. Lessor shall have no
cause of action against Sublessee, its successors or assigns
if Sublessee is in default or otherwise fails to observe or
perform any of its obligations under the Sublease unless
Lessor has succeeded to the position of Lessee and has
assumed all of Lessee's obligations under the Sublease.
Default by Lessee under the Sublease shall not constitute a
default under the Lease.
6. New Lease. In the event of the termination of the
Lease prior to its stated expiration date for any reason
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whatsoever, or the failure to exercise or the lapse of any
option to extend the Lease, Sublessee or any ,Leasehold
Mortgagee may notify Lessor, within forty (40) days after
receipt of such notice of such event, of its election to
enter into a new lease with Lessor. During such forty (40)
day period, the provisions of paragraph 1 herein shall apply.
Lessor, upon receipt of Sublessee's or Leasehold Mortgagee's
notice, shall immediately enter into a written agreement with
Sublessee or Leasehold Mortgagee containing the same
provisions as those in the Sublease, except for any changes
that are necessary because of the substitution of Lessor in
the place of Lessee. Sublessee or any Leasehold Mortgagee
shall have no rights under this paragraph 6 if it fails to
give notice within the forty (40) day period.
7. Estorpel Certificate. Lessor and Sublessee will, at
any time and from time to time within thirty (30) days of the
request of the other party or a Leasehold Mortgagee or a
prospective Leasehold Mortgagee, execute, acknowledge, and
deliver to the other party and such Leasehold Mortgagee, if
any, a certificate certifying:
(a) That the Lease or Sublease is unmodified and
in full force and effect (or, if there have been j
modifications, that the same are in full force and
effect as modified and stating such modifications) ;
(b) The dates, if any, to which the rent,
percentage rent and any additional rent and charges have
been paid;
(c) Whether there are any existing defaults by the
other party to the knowledge of the party making such
certification specifying the nature of such defaults, if
any;
(d) Whether the Commencement Date of the Lease has
occurred and, if so, the date;
(e) Whether the Leasehold Mortgagee (or
prospective Leasehold Mortgagee) is entitled to the
protection afforded a Leasehold Mortgagee under the
terms of the Sublease or Lease; and
(f) Such other matters as may be reasonably
requested. Any such certificate may be relied upon by
any party to whom the certificate is directed.
8. Lessor Consent. Lessor will not unreasonably
withhold, delay or condition any consent or approval required
or requested of it hereunder or under the Lease or Sublease,
including any requests for approval of an amendment to the
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�1
Sublease requested by a Leasehold Mortgagee pursuant to
paragraph 16 of the General Conditions of the Sublease. In
the event Lessor withholds its approval or consent, it will
provide Sublessee with the specific reasons for withholding
such approval or consent. No item once approved by Lessor
shall be subject to subsequent disapproval by Lessor.
Notwithstanding any provision to the contrary, all such
approvals or consents or notice of the reasons for the
withholding of such approval or consent will be provided
within thirty (30) days after request.
9. Modification_ of Lease. Except by reason of an
uncured default by Lessee (and then subject to the rights of
a Leasehold Mortgagee or Sublessee as contained herein) ,
Lessor will not modify, merge or amend those portions of the i
Lease which affect Sublessee's rights under the Sublease
without the prior written consent of Sublessee and all
Leasehold Mortgagees. Any such modification, merger, or
amendment without the written consent of Sublessee or all
Leasehold Mortgagees shall be void and of no force or effect.
10. Easements, Public Approvals, and Permits. Lessor
shall grant, join �in granting, apply or aid in the
application for all reasonable utility easements, government
approvals, and all permits necessary for the operations on
the Leased Premises at no cost to Lessor.
11. Commencement of Agreement. This Agreement will
commence as of the date hereof regardless of the commencement
date of the Sublease.
12. Entry on Leased Premises. Lessor hereby consents
to the entry of Sublessee upon the Leased Premises prior to
Sublessee taking possession of the Leased Premises pursuant
to the Sublease for purposes of making the tests and
investigations necessary and appropriate to satisfy the
conditions set forth in the Sublease and shall hold Lessor
harmless from any liability which may arise due to such
entry. Any such entry is subject to reasonable advance
notice.
13. Pgrties Bound. This Agreement shall be binding
upon and inure to the benefit of Sublessee, Lessor and each
Leasehold Mortgagee, their respective heirs, personal
representatives, and permitted successors and assigns. The
term "Lessor" , as used in this Agreement, shall be deemed to
include Lessor, its successors and assigns, and anyone who
shall have succeeded to Lessor 's interest by any means under
the Lease.
14. Insurance Proceeds and Condemnat_ign Di_ptributions.
The payment or disposition of proceeds of fire or extended
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insurance coverage, and any other property damage insurance
provided for Ir. the Sublease, and the payment and disposition
of any condemnation award, shall be made and applied in the
manner provided in the Sublease.
15. Reserved Police Power Authority. Nothing contained
in this Agreement is intended or shall be construed to limit
or restrict Lessor 's legitimate exercise of its general ,
municipal or police power authority,
16. Definition of Terms. Any terms not defined herein
will have the meaning ascribed to such term in the Sublease.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
"LESSOR" :
ATTEST: CITY OF HUNTINGTON BEACH, a
municipal corporation
By:
Its :
"SUBLESSEE" :
STANLEY M. BLOOM, an unmarried man
Stanley M. Bloom
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STATE OF CALIFORNIA )
} ss.
COUNTY OF )
On the day of , 1991, before
me, the undersigned, a Notary Public, in an for said State
and County, personally appeared
personally known to me (or proved to me on the basis—of
satisfactory evidence) to be the person who executed the
within instrument as the on behalf of
the CITY OF HUNTINGTON BEACH, the municipal corporation
therein named, and acknowledged to me that such corporation
executed the within instrument pursuant to its bylaws or a
resolution of its board of directors.
WITNESS my hand and official seal.
Notary Public
(SEAL)
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STATE OF CALIFORNIA )
ss.
COUNTY OF )
On the day of 1991, before
me, the undersigned, a Notary Public in an For said State
and County, personally appeared STANLEY M. BLOOM, personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument and
acknowledged to me that he executed the same.
WITNESS my hand and official seal.
Notary Public
(SEAL)
I
-8-
When Recorded *fail To:
Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. 50th Street
Vernon, CA 90058
N NDISTORBANCE AND RECOGNITION AGREEMENT
THIS NONDISTURBANCE AND RECOGNITION AGREEMENT
("Agreement" ) is made this day of , 1991,
between the CITY OF HUNTINGTON BEACH, a municipal corporation
( "Lessor" ) and STANLEY M. BLOOM, an unmarried man
("Sublessee") .
RECITALS:
A. The Redevelopment Agency of the City of Huntington
Beach ( "Lessee") has entered into a Lease dated ,
1991, (the "Lease" ) with Lessor covering the "Leased
Premises" (as hereinafter defined) .
B. Sublessee has entered into a First Amended Pier Side
Lease dated , 1991 ( the "Sublease" ) with Lessee
covering certain real property more particularly described in
Exhibit "A" attached hereto (the "Leased Premises" ) .
C. Lessor agrees to enter into this Agreement in order
to induce Sublessee to enter into the Sublease. Sublessee
would not enter into the Sublease unless Lessor entered into
this Agreement. Lessor acknowledges that by Sublessee
entering into the Sublease it will be benefited.
D. Sublessee and Lessor wish to confirm their
understanding with respect to the Sublease, the Lease and any
"Leasehold Mortgage" (as defined in the Sublease) placed upon
the Leased Premises.
In consideration of the mutual covenants set forth below
and notwithstanding any provisions of the Lease or Sublease
to the contrary, Lessor and Sublessee agree as follows:
1. Nondisturbangg. So long as Sublessee is not in
default (beyond any period given Sublessee to cure such
default in the Sublease) in the payment of any rent or in the
performance of any of the terms, covenants, or conditions of
EXHIBIT "J"
5/267/013376-0001/02 5/31/91
the Sublease: (a) Lessor will not bring, join or cooperate in
any action or proceeding to terminate Sublessee' s interest,
estate, or rights under the Sublease (whether or not Lessor
has succeeded Lessee) ; (b) Sublessee's possession of the
Leased Premises and Sublessee's rights and privileges under
the Sublease shall not be diminished or interfered with by
Lessor; and (c) Lessor will continue to recognize the estate
of Sublessee created under the Sublease and Sublessee's
occupancy of the Leased Premises shall not be disturbed by
Lessor during the term of the Sublease or any extensions or
renewals which may be exercised under the provisions of the
Sublease.
2. Attor_nment. If the interest of Lessee in all or any
part of the Leased Premises shall be terminated by reason of
the exercise of any remedy by Lessor under the Lease or any
other action brought by Lessor, or by any other manner, and
Lessor succeeds to the interest and assumes all the
obligations of Lessee under the Sublease, Sublessee shall be
bound to Lessor under all of the terms, covenants, and
conditions of the Sublease for the balance of the Sublease
term and any extensions or renewals of the Sublease which may
be exercised under the provisions of the Sublease. Sublessee
hereby attorns to Lessor as its landlord, this attornment is
to be effective and self-operative without the execution of
any further instruments immediately upon Lessor succeeding to
the interest of Lessee under the Sublease. The respective
rights and obligations of Sublessee and Lessor under this
attornment shall be the same as that between Sublessee and
Lessee as set forth in the Sublease, it being the intention
of the parties to incorporate the Sublease by reference in
this Agreement, with the same force and effect as if the
Sublease were set forth at length in this Agreement.
Sublessee shall have the same remedies against Lessor for the
breach of a provision of the Sublease that Sublessee would
have had against Lessee. Sublessee, however, shall be under
no obligation to pay rent to Lessor until Sublessee receives
written notice from Lessor that Lessor has succeeded to the
Interest of Lessee and assumed all the obligations of Lessee
under the Sublease. Lessor shall not hold Sublessee
responsible for any costs or acts caused by failure of Lessee
not related to any act of Sublessee which is connected with
any dispute between Lessor and Lessee with respect to whether
Lessor has succeeded to any or all of Lessee's interest and
assumed any or all of Lessee's obligations under the
Sublease.
3. Sublessee's Rioht, to Encumber the Sublease. Lessor
recognizes Sublessee' s right to mortgage or encumber the
Sublease and/or the leasehold estate thereunder pursuant to
paragraph 16 of the General Conditions of the Sublease.
Subject to the terms of the Sublease, Lessor will recognize
-2-
any and all of the rights of any lender of a "Leasehold
Mortgagee" as defined in the Sublease ( "Leasehold
Mortgagee" ) . Subject to the terms of the Sublease, each
Leasehold Mortgagee who has succeeded to the rights of
Sublessee under the Sublease and has given notice to Lessor
has the same rights as Sublessee under this Agreement and may
act on behalf of Sublessee under this Agreement and Lessor
will acknowledge and accept such actions.
4. Notice. Lessor will give notice to Sublessee and
each Leasehold Mortgagee in the event of the termination of
the Lease or of any new lease prior to its stated expiration
date for any reason whatsoever. Any notice required under
the Lease to be given by Lessor to Lessee shall not be
effective unless and until such notice is also given to
Sublessee and each Leasehold Mortgagee. Any notice or other
communication which a party shall desire or is required to
give to or serve upon the other or any Leasehold Mortgagee
shall be in writing and shall be served by registered or
certified mail, at the following addresses, or at such other
address as shall be designated from time to time by such
party by notice in writing given to the other by registered
or certified mail:
Lessor: The City of Huntington Beach
Sublessee: Stanley M. Bloom
c/o Randall Foods, Inc.
2905 E. Fiftieth Street
Vernon, CA 90058
With copies to: Jonathan Chodos
1559 South Sepulveda Blvd.
Los Angeles, CA 90025
Sublessee will furnish the addresses of each Leasehold
Mortgagee to Lessor.
5. Default Under the Sublease. Lessor shall have no
cause of action against Sublessee, its successors or assigns
if Sublessee is in default or otherwise fails to observe or
perform any of its obligations under the Sublease unless
Lessor has succeeded to the position of Lessee and has
assumed all of Lessee's obligations under the Sublease.
Default by Lessee under the Sublease shall not constitute a
default under the Lease.
b. New Lease. In the event of the termination of the
Lease prior to its stated expiration date for any reason
-3-
whatsoever, or the failure to exercise or the lapse of any
option to extend the Lease, Sublessee or any Leasehold
Mortgagee may notify Lessor, within forty ( 40) days after
receipt of such notice of such event, of its election to
enter into a new lease with Lessor . During such forty (40)
day period, the provisions of paragraph 1 herein shall apply.
Lessor, upon receipt of Sublessee's or Leasehold Mortgagee's
notice, shall immediately enter into a written agreement with
Sublessee or Leasehold Mortgagee containing the same
provisions as those in the Sublease, except for any changes
that are necessary because of the substitution of Lessor in
the place of Lessee. Sublessee or any Leasehold Mortgagee
shall have no rights under this paragraph 6 if it fails to
give notice within the forty (40) day period.
7. Estoppel Certificate. Lessor and Sublessee will, at
any time and from time to time within thirty ( 30) days of the
request of the other party or a Leasehold Mortgagee or a
prospective Leasehold Mortgagee, execute, acknowledge, and
deliver to the other party and such Leasehold Mortgagee, if
any, a certificate certifying:
(a) That the Lease or Sublease is unmodified and
in full force and effect (or, if there have been
modifications, that the same are in full force and
effect as modified and stating such modifications) ;
(b) The dates, if any, to which the rent,
percentage rent and any additional rent and charges have
been paid;
(c) Whether there are any existing defaults by the
other party to the knowledge of the party making such
certification specifying the nature of such defaults, if
any;
(d) Whether the Commencement Date of the Lease has
occurred and, if so, the date;
(e) Whether the Leasehold Mortgagee (or
prospective Leasehold Mortgagee) is entitled to the
protection afforded a Leasehold Mortgagee under the
terms of the Sublease or Lease; and
(f) Such other matters as may be reasonably
requested. Any such certificate may be relied upon by
any party to whom the certificate is directed.
8. Lessor Consent. Lessor will not unreasonably
withhold, delay or condition any consent or approval required
or requested of it hereunder or under the Lease or Sublease,
including any requests for approval of an amendment to the
-4-
Sublease requested by a Leasehold Mortgagee pursuant to
paragraph 16 of the General Conditions of the Sublease. In
the event Lessor withholds its approval or consent, it will
provide Sublessee with the specific reasons for withholding
such approval or consent. No item once approved by Lessor
shall be subject to subsequent disapproval by Lessor.
Notwithstanding any provision to the contrary, all such
approvals or consents or notice of the reasons for the
withholding of such approval or consent will be provided
within thirty (30) days after request.
9. Modification of Leas. Except by reason of an
uncured default by Lessee (and then subject to the rights of
a Leasehold Mortgagee or Sublessee as contained herein) ,
Lessor will not modify, merge or amend those portions of the
Lease which affect Sublessee's rights under the Sublease
without the prior written consent of Sublessee and all
Leasehold Mortgagees. Any such modification, merger, or
amendment without the written consent of Sublessee or all
Leasehold Mortgagees shall be void and of no force or effect.
10. Easements, Public Approvals, and Permits. Lessor
shall grant, join in granting, apply or aid in the
application for all reasonable utility easements, government
approvals, and all permits necessary for the operations on
the Leased Premises at no cost to Lessor.
11. C!mngncement of Agreement. This Agreement will
commence as of the date hereof regardless of the commencement
date of the Sublease.
12. Entry on Leased Premises. Lessor hereby consents
to the entry of Sublessee upon the Leased Premises prior to
Sublessee taking possession of the Leased Premises pursuant
to the Sublease for purposes of making the tests and
investigations necessary and appropriate to satisfy the
conditions set forth in the Sublease and shall hold Lessor
harmless from any liability which may arise due to such
entry. Any such entry is subject to reasonable advance
notice.
13. Parties Bound. This Agreement shall be binding
upon and inure to the benefit of Sublessee, Lessor and each
Leasehold Mortgagee, their respective heirs, personal
representatives, and permitted successors and assigns. The
term "Lessor" , as used in this Agreement, shall be deemed to
include Lessor, its successors and assigns, and anyone who
shall have succeeded to Lessor 's interest by any means under
the Lease.
la. Insurance Proceeds and -Condemnation Distributions.
The payment or disposition of proceeds of fire or extended
-5-
�J `,J
insurance coverage, and any other property damage insurance
provided for in the Sublease, and the payment and disposition
of any condemnation award, shall be made and applied in the
manner provided in the Sublease.
15 . R sery d Police Power -Authority. Nothing contained
In this Agreement is intended or shall be construed to limit
or restrict Lessor 's legitimate exercise of its general,
municipal or police power authority.
lb. Definition of Terms. Any terms not defined herein
will have the meaning ascribed to such term in the Sublease.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
"LESSOR" :
ATTEST: CITY OF HUNTINGTON BEACH, a
municipal corporation
By:
Its:
"SUBLESSEE" :
STANLEY M. BLOOM, an unmarried ran
Stanley M. Bloom
STATE OF CALIFORNIA )
} ss.
COUNTY OF
On the day of 1991, before
me, the unders fined, a Notary Public, in and for said State
and County, personally appeared
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the
within instrument as the on behalf of
the CITY OF HUNTINGTON BEACH, the municipal corporation
therein named, and acknowledged to me that such corporation
executed the within instrument pursuant to its bylaws or a
resolution of its board of directors.
WITNESS my hand and official seal.
Notary Public
(SEAL)
1
-7-
STATE OF CALIFORNIA }
} ss.
COUNTY OF )
On the day of , 1991, before
me, the undersigned, a Notary Public in an for said State
and County, personally appeared STANLEY M. BLOOM? personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument and
acknowledged to me that he executed the same.
WITNESS my hand and official seal.
Notary Public
(SEAL)
t
1
i
I
-8-
ECEIV:C
CITY CLERK
C!TY Cr
JONATHAN R CHODOS HLI
F+;Tt`tG� '
1599 SOUTH SEPU6VEDA BOULEVARD
LOS ANCELES. CALIFORNIA 90025 JJL 1l! 246
1 .�
TEL: M31 A73-8666 FAX' 12131 473-2726
July 10, 1991
Hon. Mayor and Mec:tbers of the
City Council
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Re: Amendment to Pierside Lease
Hon, Mayor and Members of the City Council,
Mr. Bloom and I are gratified that after months of
discussion, essentially all points regarding the amendment to the
lease have been agreed upon by us and staff. The amendment is a
complex document balancing many different issues, costs and
concerns and reflects the immense effort that has gone into its
negotiation.
Over the last several months, in response to direction
from the Council, most of the financial terms have been reworked
to substantially benefit the City. This has been accomplished
without defeating the economic viability of the project from our
perspective.
Recently, however, some disagreement has cropped up
over some last minute provisions concerning the impact Measure
"C" may have on the Project. Because the terms of Measure "C"
are unclear in many respects, it is difficult to determine
exactly what effect it will have at this time. Consequently, we
are reluctant to agree to proposed language that precludes us
from seeking clarification of the Measure or its application to
this Project .
After discussing this matter at some length with staff
and our counsel, we believe that the following will resolve any
impasse that may currently exist. We will agree to initiate,
within 90 days of the date the Council approves the proposed
amendment to the Lease, any action to seek clarification of the
terms of Measure "C" and its application to this Project. Until
the expiration of that 90 day period, or the issuance of a final
order by the court on the substantive merits relating to Measure
11C11, whichever is later, the Council will not act to place this
matter on any ballot. In the event that the court should hold
that no election is required by the Measure, then the matter will
be settled and we will proceed under the lease.
i
•
Eon. Mayor and Members
of the City Council
July 10, 1991
Page 2 of 2
In the event that no action is initiated by us within
90 days, or the court should conclude that an election is
required, then we will proceed to an election, in a manner
consistent with the court' s ruling, on a mutually agreeable
basis.
Furthermore, in the evert that the election outcome
disai�_oves of the lease, then we agree not to seek to overturn
that result.
I hope that this proposal will allow us to proceed with
the Lease Amendment and the Project . If it is agreeable to the
Council, new language can be added to the Proposed amendment to
reflect this proposal .
Thank you for your attention.
Sincerely yours,
Jonathan P. Chodos
cc: Stun Bloom
,f
i
°`STATE OF CAUJFOl MRA
County of®rang®
I am a Citizen of the United States and a
resident of the County aforesaid; I am over thePUBLIC NOTICE
NOTICE OF i
age of eighteen years, and not a party to or J09MY PUBLIC
H EMONG OF FNF-
interested in the below entitled matter: I any a .CIirv,COUMCOL/
principal clerk,of the HUNTINGTON BEACHRE®EVELacRgEav
INDEPENDENT, a newspaper of general
I�IFI.PI�P>t
9 REDEVE.OPPAEMT i
circulation, printed and published in the City of PROJMcg AREA,
Huntington Beach, County of Orange, IFIERSRST�,SLEAS®
Sate Off �IAGREENENT
California, and that attached Notice is a true and (PIEWSI®IE
RESTA6D68B,Itl'1�r)
complete copy as was printed and published in on Monday, ,luly 15
1991 at 7:00 PM, or as
the Huntington Beach and Fountain Valley soon thereafter as the mats
ter may be heard, In the
issues of said newspaper to Wit the issue(s) of: City Council Chambers;
Huntington Beach City Hall
located at 2000 Maln
Street, Huntington Beach;
California, the City Council,
of.the'Clty of Huntington;
July 11, 1991 Beach and the Redevelop-
ment Agency("Agency")of!
the City of Hunt in ton
Beach, will hold a Joint
public hearing to consider;
the leases of,.certain roali
9property '(as described!
elow),,between the City of,
Huntington Beach and the
Redevelopment Agency
and a Sublease to Stanley
Bloom, In the form of a
proposed First Amended
Pierslde Lease Agreement]
for the project known as
Plerside Restaurants by
and between the Redevel-`.
opment Agency and Stan-I
ley M. Bloom. This certain:
real property Is located
within the Is
Rede-i
velopment Project Area on
the-:west:side-of Pacific
Coast 'Highway, between'
First and Main Streets,;
on on file In declare, under penalty of perjury, that the t e City Cle k's office).The'
foregoing is true and correct. ,proposed Agreement and'
i �nanclal report,required by,
i California Health & Safety,
I Code Section 33433 are
July 11, 1 iavallable for public inspect
Executed on r gg ao tion at the office of the City,
Clerk at 20W Main Street;
at Costa Mesa, California. Huntington Beach, Califor-,
nia. Further Information
concerning this matter may
also be obtained by con-
'tacting Keith Bohr, Project
I Manager at(714)374-1529.`
tUfe
Si
na By: Connie Beockwray,l
g CI4y C WRedevelop-1
� lerneni Agency Clerk,!
C14y. .o4 .Huntington
Beach
Published Huntington
Beach Independent Jul
�11, 1991
p
072329
PROOF OIL PUBLIC ATEOM �
314 �
"STATE OF CALIFORNIA
County of Orange -P,UPW 0070CE
Z070013 OF
J01107 PUBLOC
I am a Citizen of the United States and a HEM6 0 OF THE
resident of the County aforesaid; I am over the Cif'COURIC°a
RIE®fEi9(Ef OPM ENT
age of eighteen years, and not a party to or mo m
interested in the below entitled matter. I am a RIEtDWELOP001147
principal clerk of the HUNTINGTON BEACH PROJECT AINEIMIDED
PI ERSi®[E LE ME
INDEPENDENT, a newspaper of general AGRIE[EMEWT
circulation, printed and puhrshed in the City ofOn Qr�IIER�ir�tE
Huntington Beach, County of Orange, State of 19911 atM7:00a PM,ulor 1as
soon thereafter as the mat-
California, and that attached Notice is a true and ter may be cll heard,
In he
unt complete copy as was printed and published in Hington Beach City Hall
located at 2000 Main
the Huntington Beach and Fountain Valley street, Huntington Beach,
California, the City Council
issues of said newspaper to wit the issue(s)of: of the City of Huntington
Beach anti the Redevelop-
ment Agency("Aggency")of
the City of Huntln ton
Beach, will hold a ?olnt
public hearing to consider
the leases of certain real
July 11, 1991 propert (as described
below),between the City of
Huntington Beach and the
Redevelopment Agency
and a Sublease to Stanley
Bloom, In the form of a
proposed First Amended
Plerside Lease Agreement
for the project known as
Plerslde Restaurants by
and between the Redevel-
opment Agency and Stan-
ley M. Bloom. This oertaln
real properly Is located
within the Main-Pier Rede-
velopment Project Area on
the west side.of Pacific
Coast Highway, between
First and Mal; Streets,
(Legal Description on file In
the City Clerk's office).
The proposed Agree-
ment and financial re-
port required by Call-
I declare, under penalty of perjury, that the forma Neaith a Safev
Code Section 33433
foregoing is true and correct, are snraiisible for public
lnopectlon at the office
of the Cf4py Cleric at
on July 11, 199 1 2000 Mein Street,Nun-
Executedtington Beech, Call-
at Costa Mesa, California. fcrnia.Further Information
concerning this matter may
also be obtained by con-
tacting ager(at(7 4)3 eith Bo , Project
Man 74-1529.
By. Connie Eirochuraty,
Signature City Clertr/Redeaelop-
ment Agency Cleric,
City of Huntington
Beech
Published Huntington
Beach Independent July
11,1991
p p 072W1
PROOF OF PUBLICATION
�er��
Authorized to Publish Advertisements of all kin Auding public notices by '
Decree of the Superior court of Orange Couny,%,.difomia, Number A-6214,
September 29, 1961,and A-24831 June 11, 1%3
STATE OF CALIFORNIA
County of Orange
I am-a Citizen of the United States and a
resident of the County aforesaid; I am over
the age of eighteen years,-and not a party to
or interested in the below entitled matter. I PUBLIC NOTICE
NOTICE OF
am a principal clerk of the NEWPORT „JEARINGOFTHE
CITY CUNCIL/
BEACH—COSTA MESA PILOT, a R DEVELOPM NT
newspaper of general circulation, printed AGENCY
_REDEVELOPMENT
and published in the City of Costa Mesa, PROJECT AREA
County of Orange, State of California, and FIRSIDE LEESAS PIERSIDE E
E
AGREEMENT
that attached Notice is a true and complete (PIERSIDE
RESTAURANTS)
copy as was printed and published on the 199On Monday, July 15
1 at 7:00 PM, or as
soon thereafter as the'mat-
following dates. ter may be heard;"In the
City Council Chambers,."
Huntington Beach City Hall
located at 2000 Main
Street, Huntington Beach,
California, the City Council
June 27, 1991 of the City of Huntington
Beach and the Redevelop-
ment Agency("Agency")of
Jul- 2 9 1991 the City. of Huntington
r , Beach, will hold a joint
public hearing to consider
the leases of certain real
property (as described
below),between the City of
Huntington Beach and the
Redevelopment, Agency j
and a Sublease to Stanley
Bloom, In the form of a
proposed First Amended
Plerside Lease Agreement
for the project known as
Pierside Restaurants by
and between the Redevey
opment Agency and Stan-
_ ley M. Bloom. This,certain
real ,property"Is located
within the Main-Pier Rode-i
velopment Project Area on
the west side of Pacific;
Coast Highway, between
'First, and Main Streets;
(Legal Description on file in,
the City Clerk's office).The i
proposed Agreement and
financial report required by
alifornia Health & Safety
I declare, under penalty of perjury, that the Code section,C 33433 are
I.vaff egoing is true and correct. Ition at.t o public Inspehe Ci -j
l`�ion at.the office of the CIty 1
Clerk at 2000 Main Street,
.•Huntington Beach,-Califor-
nia. Further information
concerning this matter may
' Executed on July 9, 991 also be obtained by con
pi ,tacting Keith Bohr, Project
Manager at(714)374-1529. i
at Costa Mesa, C ifor is By: Connie Brockway,{
City Clerk/Redevelop-J
ment Agency Clerk,+
City of Huntington
Beach
Published Orange Coast i
Signature (Daily Pilot June 27, July 2,
9,1991
L Th370 t
�, PROOF OF PUBLICATION
REQUEST FC..,1 REDEVELOPMENT�.aGENCY AC ON
vnaD toh 4-0 ,cxPj�rt�,ye.. . RH 91-28
QYtnn `1'1A'�-rcr[. ji '3 May 28, 1991
Date
Submitted to: Honorable Chairman and Redevelopment Agency Members
Submitted by: Michael T. Uberuaga, Chief Executive Off' c
Prepared by: Barbara A. Kaiser, Deputy City Administrator/Eco omic Development
Subject: CONSIDERATION OF REQUEST FOR PROPOSALS FOR BLOCK I01 --
MAIN—PIER REDEVELOPMENT PROJECT AREA
Consistent with Council Policy? bQ Yes ( ] Now Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions,Attachments:
5_ TEMENT F I E:
Staff has received a request from a property owner/developer within Block 101 for the
Issuance of a Request for Proposal for the consolidation and development of a
residential project on this block, as outlined in Alternative 3.
R D I
Consider various alternatives as outlined in this report, and provide direction to staff.
AN LY
Back around
The Council/Agency members will recall that Block 101 was the subject of a proposal
forwarded by California Resorts, International In the Fall of 1990. In January 1991 this
proposal was laid aside awaiting the completion of the Amendment to the Downtown
Specific Plan now underway. On May 28, 1991 California Resorts, International (CRI)
will make a presentation urging the Agency to solicit proposals for this block or a
portion thereof. In the meantime presented below is the following information
assembled by Agency staff which summarizes two alternative approaches to the
consolidation, reconfiguration and development of this block.
the Site
Block 101 is located within the Main—Pier Redevelopment Project area and is bounded
by First Street, Pacific Coast Highway, Second Street and the new alignment of Walnut
Avenue (see map attached).
There are I owners of record of property within this site. One parcel is owned by the
Redevelopment Agency and another 3 parcels are owned by Beach Resorts, Inc.
(subsidiary of the project proponent CRI).
P1o/T/85
R AA RH 91-29
May 28, 1991
Page two
Owner—Participation
On October S, 1990 staff corresponded with all property owners regarding the CRI
proposal then under consideration. Each owner was asked if they would like to a) rebuild
on their present property, b) participate in a new project, or c) sell their property. Each
property owner was also sent a copy of the Owner Participation Rules for the Alain-Pier
Project area. The response to this survey was inconclusive. While several owners
expressed interest in more information, no owner was willing to make a commitment to
any of the three choices offered at that time. However, implementation of the project
would require assembly of AU parcels and could require the use of eminent domain.
On January 9, 1991, staff again corresponded with property owners advising them that
the CRT proposal had been laid aside awaiting the outcome of the amendment to the
Downtown Specific Plan. A schedule for the Specific Plan Amendment was enclosed.
ALTERNATIVE NO 1: FULL BLOCK CONSOLIDATIIO�I
A. Polential Rmiect Cots,
While the implementation of a full Block 101 consolidation would achieve
redevelopment objectives like the realignment of Walnut Avenue, the consolidation
of multiple ownership properties and the elimination of blighting influences such as
oil wells and oil storage tanks, it would involve public costs of various kinds. These
costs include but are not limited to land acquisition, acquisition of oil interests and
oil well abandonment, relocation, demolition and public works improvements (see
Summary of Site Delivery Costs attached).
In addition to these costs, it would also be the responsibility of either the developer
or the Redevelopment Agency to provide at least 15 percent of the residential units
Included in the project as affordable. While this could be legally performed either
on site or off site, experience shows that a minimum subsidy from either the
Redevelopment Agency or developer contributions in the amount of approximately
$30,000 per affordable unit will be required.
While it is not possible to do a definitive analysis of the Agency costs for a full
consolidation of Block 101 without a specific development proposal before us, the
attached summary of costs totals $9,432,550 excluding some important elements
which are unknown at this time such as fixtures and equipment, demolition and
replacement housing costs. This figure also does not include the additional subsidy
toward the affordable housing units which would also be required.
11. Site-A"uisition
To affect the consolidation of the entire block it will be necessary to contribute the
Redevelopment Agency owned property within the project site and purchase the
landholdings of eight property owners not now under the control of the developer.
The developer indicates that not all current property owners would likely be willing
sellers. For that reason it might be necessary for the Redevelopment Agency to
consider the use of eminent domain to fully consolidate the block.
RAA RH 91-28
blay 28. 1991
Page three
However, the extent of developer and Agency ownership does not meet the
requirements of Resolution 48. Therefore, eminent domain would not be available
as a tool to affect this consolidation without modifying Resolution No. 48.
ALTERNATIVE NO. 2: FUEL BLOCK CONSUIDATZON MT} OUT WALNJJT
FEALIONMENT
A. PQrnt91aI)=ject Cos
Costs for this consolidation/development scenario would be the same as for those
above except that the realignment of Walnut Avenue (estimated to be
approximately $3 million for acquisition and improvements) would be excluded.
This would reduce the known costs for the project from approximately $9.4 million
to $6.4 million.
B. $itQ Acquisition
Agency and developer ownership does not meet the requirements of Resolution 49.
Therefore, eminent domain would not be available as a tool to affect this
consolidation without modifying Resolution No. 48.
C. n in Isauea
Maintaining the current alignment of Walnut to reduce costs for the overall
consolidation of the block may raise planning and land use issues. For example, can
the project be phased in a manner that will permit the ultimate realignment of
Walnut at the time that the large tract of vacant land to the south of First Street
develops and it becomes necessary to connect Walnut Avenue with Pacific View
Avenue? Some of the other issues such as building height and setback and density
cannot be addressed without a specific development proposal.
AITERNATIN_NO,3: PARTIAL BLOCK CONSOLIDATJ0-1_(12EV-ELOPER'S CURRENT
L, P AL
A. Potential_bmiect Costs
Under this proposal (dated May 20, 1991 and attached) the Agency would not be
responsible for the cost of infrastructure improvements or property acquisitions.
11. Site Aca issition
The developer (California Resorts International) does not currently control the
entire site in this proposal. A portion of the site is owned by the City of
Huntington Beach and would need to be sold to the developer (developer's proposal
does not identify the price for this property but it would presumably be disposed of
at fair market value). Additionally, two lots owned by a third party would need to
be acquired to complete the project site. The developer has attempted to acquire
these lots and the current owner would not dispose of the property on a willing
seller basis since land price negotiations were not successful. Therefore, the
developer would anticipate requesting the Agency to consider eminent domain for
this acquisition to complete the proposed project site. The developer would
advance funds to the Agency for this acquisition.
RAA RH 91-28
May 28, 1991
Page four
C. Planning I�sves
The developer's proposal presents three major planning issues:
1. Denslty: The developer proposes to construct a 72 unit residential structure on
the partial block consolidation. This density is based on the 35 units per acre
provided in the Downtown Specific Plan for full block consolidations.
2. Building Heieht: The proposed structure would be six stories over podium
parking (seven stories). While eight story structures are permitted in this
district of the Downtown Specific Plan with full block consolidations, under
partial block consolidations only four story structures are permitted. No
change to this height limit for partial block consolidations is anticipated in the
amendment to the Downtown Specific Plan now underway.
3. CgMmercial/Rest n ix: Currently the Downtown Specific Plan for
District Three requires a mix of commercial and residential uses. This land use
approach will be maintained in the pending Downtown Specific Plan
amendment although the ratio of commercial to residential square footage
would be reduced to one third commercial, two thirds residential. However,
this development proposal contains no commercial use and therefore would be
inconsistent with both the existing Specific Plan and the proposed amendment.
The developer's proposal analyzes the issue of commercial/residential mix on
the basis of the five blocks fronting Coast Highway (including Main-Pier Phase
11, Pierside Pavilion, Pier Colony, and Block 101). It proports that on a five
block basis the one third to two thirds ratio of commercial to residential will
be accommodated (see the May 20, 1991 proposal; pg. 3).
C.QNCLUSIQN:
It is important to realize that a full consolidation of Block 101 would be burdened
by site delivery and public improvement costs which are substantial and which are
not currently envisioned in the Redevelopment Agency budget for the current or
next fiscal years. Because budget resources are limited, implementation of the full
block alternatives for Block 101 would require reprioritization and abandonment of
current Redevelopment Agency projects to make the necessary funds available.
Additionally, the proposed partial consolidation and development of Block 101
would likely require the use of eminent domain to facilitate a project that does not
conform to the Downtown Specific Plan. This first step in this process is the
Issuance of a Request for Proposals to develop a project, as outlined above as
Alternative 3.
]FID NQ SOURCE:
The Redevelopment Agency Administrative Funds and Developer Advances.
4`
RAA RH 91-28
May 28, 1991
Page five
ALTERNATIVES:
Authorize and direct staff to issue a Request for Proposal for Block I01 or a portion
thereof.
ATTACITMENTS;
1. Site Map
2. Ownership List
3. Summary of Site Delivery Costs
4. California Resorts, International Proposal May 20,I991
MTU/BAK/SVK:jar
9003r
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ODE LAPP
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v OLWER
:)s' a••
NELSON • • . • • . • •. •. •
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a a a s ♦ s a• . • •• • • • • • • •
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ORANGE COAST
SPECIALTIEb<-
PROJECT No . 2 .
i BLOCK 101
OWNERSHIP LAST
OWN S$ PROPERTY ADDRESS MAILING ADDESS
024-162-19 Gordon De Lapp None —Vacant (oil) 320 Joliet Street
Huntington Beach, CA
92648
024-162-23 John Parnakian 205, 207 & 209 205 First Street
Lake Street Huntington Beach, CA
92648
024-162-24 Genevieve Vanian 201 Lake Street 2405 Kenilworth Avenue
c/o Dorcas 'Token Los Angeles, CA
90039
024--I62-25 Diane Hunnicutt None —Vacant (oil) 4924 Marlborough Way
Dallape & Barbara Carmichael, CA
Hunnicutt Firey 95608
Diane Hunnicutt P. O. Box 879
Dallape Corona, CA 917I8
C24-163-01 City of H. B. 101 Walnut Avenue 2000 Main St., H.B.
024-163-02 Thomas Holwerda 117 & 121 Walnut 6736 Hillpark Drive
Los Angeles, CA 90068
024-163-03,09 Otis Wesley Peck (03) — None — Vacant (oil) 8404 Lexington Road
(09) — 114 PCH Downey, California
90241
024-163-08,10,11 Beach Resorts, Inc. (08) — 110 PCH 222 — 5th Street
(10,11) — 120 PCH Huntington Beach, CA
92648
024-163-12,13 Allen L. Nelson (12) — 112 2nd Street 8404 Lexington Road
c/o Otis Wesley Peck (13) — 114 & 116 2nd Street Downey, CA 90241
024-163-14 Harvey D. Pease 102 PCH 314 Carnation Avenue
Corona Del Mar, CA
92625
0.130R — List t� i
0429R — Variables
F .
BLOCK 101 ATTACHMENT NO. 3
MAIN-PIER REDEVELOPMENT PROJECT AREA
SUMMARY OF SITE DELIVERY COSTS
ITEM COST
LAND ACQUISITION (WALNUT REALIGNMENT) $ 1,875,000(1 )
LAND ACQUISITION 5,250,000(1)
ACQUISITION OF OIL INTERESTS 320,000(2)
OIL WELL ABANDONMENT 200,000(3)
TOXIC CLEAN-UP 150 ,000(2)
RELOCATION 404,800(4)
FIXTURES AND EQUIPMENT PAYMENTS UNKNOWN
DEMOLITION UNKNOWN
PUBLIC WORKS IMPROVEMENTS 1, 232,750(5)
REPLACEMENT HOUSING UNKNOWN
TOTAL KNOWN COSTS $ 9,432,550
SOURCES:
3) Estimate, subject to change. No appraisal conducted.
2) Estimate, subject to change
3) Public Works Dept. estimate of $30,000 per well plus
contingency for six wells.
4) Pacific Relocation, Inc. estimate
5) Public Works Dept. estimate
!1
1
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OLIO
i
PCF�
6 154-f- ._ lot mv�,�, x4d
SBLOCK BLOCK 101 STUDY
5 BLOCK CONSOLIDATION
DTISP - DISTRICT 3
I ---Gross Area
���Jff det Areas)
N.
Walnut ----... �- --- -- - --. �.-- �-
5 M I I 2
T A ' N � S
H I t D �� TJ
N t t
J 4-
Pacific Coast Highway_
BLOCK 105 BLOCK 104 BLOCK 103 BLOCK 102 BLOCK 101
ASSUME: I . Walnut Avenue Extended
2 . All Ownerships combined into a Multi-Block Development
3 . All Streets 60 ' wide, except PCH is 100 ' , 1st Street
Is 75 ' .
4 . 2nd Street is vacated.
5 . All the Blocks are 250 ' x 3501 .
NET AREA: 458 ,500 SF x 10 . 53 Acres
GROSS AREA: E69 ,725 SF = 15 . 37 Acres
CODE NUMBERS:
Maximumn Floor Area:
1 . 15 x 3 . 5 x 458 ,500 SF = 1 , 845,463 SF
Maximum Number of Dwelling Units :
15 . 37 Acres x 35/Acre - 538 Units
Used By Pier colony = 130
Available for New Projects 408 Units
Maximum Height : 8 Stories
Maximum site Coverage: 50k
�o
18-Ifay-91 , MSR CAL RESORTS, INT'L
��G 2•
SPLOCK BLOCK 101 STUDY
Section 4 . 5 .01 ( f ) of the DTSP - District 3 requires that " In the
context of a Planned Development . . . " , no less than " . . . 1/3 of the
total floor area is devoted to visitor serving uses . "
This serves as a test and constraint : A test of the ratio of
visitor serving to the residential , and a constraint on the overall
square footages though theoretically 1 , 845,000 SF are allowed.
In the Ratio Study that follows; outdoor uncovered areas , parking
garage areas and private open spaces are excluded.
RATIO STUDY
Block Commercial Residential
101 100 PCH: Parcel A: 72 Units 93 , 600
Parcel B & C: 100+ units 100,000
Commercial Component 0
102 Pier Colony 144 , 300
103 Pierside Pavilion 86 , 257
Outdoor Covered Dining Areas 8 , 880
116 to 128 Main Street 37,000
( Future Development )
104 Abdelmutti 40,000
Coultrup Development 60,000
Lane 10 ,000
Terry Property -- Parking Garage 0
105 Coultrup Development 150 ,000
Commercial Component 0
TOTALS 242 , 137 487,900
RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 : 24 66 . 8%
�1
18-May-91 , MSR CAL RESORTS, INT 'L
��c 3
• 5BLOCK BLOCK 101 STUDY
Units allocated on a Block by Block basis:
Block 101 317 . 5 ' x 430 ' / 43, 560 = 3 . 13 110 Units
102 310 .0 ' x 430 ' / 43,560 = 3 .06 107
103 3 .06 107
104 3 .06 107
105 3 .06 107
15 .37 538 Units
Assume no Dwelling Units on Blocks 103 and 104 , then the units are
apportioned to the three remaining blocks:
Block 101 3 . 13 Acres = 182 Units
102 3 .06 178
105 3 .06 178
9 . 25 Acres 538 Units
Please note that of 178 units potential , the Pier Colony has used only
13C units . This leaves an unused allccation of 48 units for Blocks
101 and 105 to use in addition to the allocation shown above . For
this study these 48 units are ignored.
----------- * -----------
Within Block 101 , with the Walnut Extension in place, there are three
major groups of ownership. In this I assume the Developer has been
givgn assistance in the assembly of Parcel A:
l
\PMe C i Based on the land division shown,
I \ � \% + the Parcels break down as follows :
1 Pf�CEZ ` l Net Gross
zG ' SF Acres
v
Parcel A 43 , 125 1 . 57 Acres
Parcel B 25,965 0 . 82
Parcel C 15 ,910 0 . 74
Ave ------- -----
P � 85,000 3 .13 Acres
rN 14-3-eA.
18-May-91 MSR CAL RESORTS, INT -L
T
' 5BLOCK BLOCK 101 STUDY
If 182 units are allocated to this block, then the allocation breaks
down among the Parcels as follows :
Parcel A 1 . 57 Acres = 91 Units
Parcel B 0. 82 48
Parcel C 0 . 74 43
3 . 13 Acres 182 Units
The next two pages show the Ownerships and percentages of Block 101 .
Footnote: Parcel A: A 91 unit building would be required to be
8 to 9 stories tall . Due to the economics of high-rise construction
and the Developer 's desire to promote acceptance of this project , the
Developer will request a 6 story building with 72 units ( 12 per floor)
Instead of the code allowed 8 story building.
l�
18-May-91 MSR CAL RESORTS, INT'L `
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i
5BLOCK BLOCK 101 STUDY
The following pages show areas and percentages as related to
the different ownerships and Walnut Avenue in its present
alignment .
e
17-May-91 , MSR CAL RESORTS, INT'L
�• I
JP
it
1 1
Nor
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00
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lip
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100
3' Vic. � ' ���_� -I•� _ +' _ � •` ` `
f
' SBLOCK BLOCK 101 STUDY
PARTIAL BLOCK DEVELOPMENT
If Walnut Avenue is kept in its present alignment and only
Parcel A is developed and development is constrained to a
stand-alone basis, the following shows the results using the
present codes per the Down Town Specific Plan Guidelines:
YN�
Net Land Area 36 , 900 SF0 . 85 AcresGross Land Area 68 , 502 SF1 .57 Acres
I /32-T
0
In the assemblage of Parcel A, I assume the 2 PCH lots owned by
the Nelson Family are acquired by the City (Redevelopment Agency)
and/or California Resorts International .
Code Numbers :
Maximum floor Area:
1 . 15 x 2 . 5 x 36 ,900 = 106 ,088 SF
Maximum Number of Dwelling Units:
36 , 900 SF / 1 ,350 per DU = 27 Units
(Note: If this Parcel is allowed as part of multi-block
development plan, but only 35 units per gross acre is
permitted, then the maximum number = 55 Units)
Maximum Height : 3 Stories
8 Stories if part of Multi
Block Development
Maximum coverage : 50%
18-May-91 MSR CAL RESORTS, INT'L
i
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(,
REO'''EST FOR CITY COL CIL/
REDEVLOPMENT AGENCY ACTIN
RH 91-2I
Date April 15, 1991
-
Submitted to: Honorable Mayor/Chairman & City Council/Redevelopment Agency Members
Submitted by: Michael T. Uberuaga, City Administrator/Chief Executive Office�l
Barbara A. Kaiser, Deputy City Administrator/Economic Developmen
Prepared by: TRANSFER OF CITY PROPERTY (PIERSIDE RESTAURANTS LEASE E�TO
THE REDEVELOPMENT AGENCY AND FIRST AMENDED PIERSIDE LEASE
Subiect: BETWEEN AGE14CY & STANLEY M. BLOOM FOR PIERSIDE RESTAURANTS
PROJECT/MAIN—PIER PROJECT AREA
Consistent with Council Policy? I 1 Yes { j Nov Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions,Attachments:
#11. /9/- =*# /
SI TEMENT O1~ ISSUE:
On March 18, 1991, the City Council/Redevelopment Agency deferred action on the
transfer of city property (Pierside Restaurants Lease Site) to the Redevelopment Agency
and First Amended Pierside Lease between the Agency and Stanley M. Bloom pending the
City Attorney's legal opinion of whether or not the subject site is considered "Waterfront"
property.
The City Attorney has issued the attached opinion dated April 3, 1991. In short, it states
"the property is arguably Waterfront," but that a kM (as opposed to sale) of Pierside
property would not constitute a sale or conveyance for purposes of Government Code
Section 37351, and therefore, would not require a four-fifths (4/5) vote, finding that the
property is not suitable fora park or beach. Mayor Green has requested that another legal
opinion be obtained from an independent law firm that specializes in coastal issues.
In addition, staff has been, at the direction of the Agency, analyzing and negotiating new
terms for the proposed First Amended Pierside Lease.
R><CONMIENDATION: x
1) Defer all actions relating; to the Agreement for the Purchase and Sale of Property fo"r
the Pierside Restaurants project.
2) Consider for appropriate action the City Attorney's legal opinion dated April 3, x m 1921, R ,
outlining the related legal issues pertinent to the proposed transfer of the Pierside-_,
property. _-
c
3) Consider Mayor Green's memo dated April 5, 1991, and discuss with Council to
consider whether or not to authorize staff to seek an additional legal opinion.
4) Direct staff to proceed, as appropriate, with attached Schedules A, B, or C.
L5 i
xs31�
Q3A13�3'3
16�
ANALYSIS-
On, or about. August 19, 1935, a Disposition and Development Agreement was entered into for
the development of the site located at Pacific Coast Highway and Main Street. On November
20, 1986, the Pierside Lease was executed. On February 20, 1990, the Agency approved a
conceptual plan for development of the "Pierside Restaurants" (see attached). A proposed
First Amended Pierside Lease for the development of 49,522 square feet of restaurant and
beach—related retail uses with 6I1 parking spaces has been negotiated by staff.
The Planning Commission approved Environmental Impact Report 90-2, Conditional Use Permit
No. 90-17, and Coastal Development Permit No. 90-18 at Its meeting of November 6, 1990.
The Planning Commission's actions were appealed and on March 18, 1991, the City Council
approved the abovementioned entitlements (staff report attached).
The City Attorney has stated that Measure C, as passed last November, "probably" applies to
the Pierside property in question. Therefore, in order to transfer the Pierside property,
Measure C requires a majority of votes approving the transfer/sale by both the City Council
and the electorate. A special election could be scheduled for Tuesday, November 5, 1991. In
order to add a Measure to the ballot for Pierside Restaurants for that election, Council would
need to approve a resolution requesting consolidation of elections with the county by July 7,
1591.
MINDING SOLIRC>�:
1) None as a result of this action.
AU I`iMENTS:
1) City Attorney's legal opinion dated April 3, 1991.
2) Mayor Green's memo dated April 5, 1991.
3) Staff report dated February 20, 1991.
4) Staff report dated March 18, 1991.
5) Pierside Tentative Action Plans.
M'rU/BAK/KBB:ls
8£37r
J1 ` CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
NUN11N610N 1EACN
To Honorable Peter Green, Mayor From Gail Hutton
and Members of the City Council City Attorney
Sub;ect Pierside Property - Date April 3 , 1991
Vote Required for a Lease
INTRODUCTION:
On November 13 , 1990, we advised that a four-fifths vote might
be required for a conveyance of pierside property from the city
to the Redevelopment Agency, since the property is arguably
"water front . " G.zv-ernment (Code § 37351 reads as follows :
"The legislative body may purchase, lease, exchange, or
receive such personal property and real estate situated
inside or outside the city limits as is necessary or proper
for municipal purposes . It may control, dispose of, and
convey such property for the benefit of the city. The
legislative body shall not sell or convey any portion of a
water front, except to the State for use as a public beach
or park, unless by a four-fifths vote -of its members the
legislative body finds and determines that the water front
to be sold or conveyed is not suitable for use as a public
beach or park. "
Council has beer. asked to consider a transfer of the city' s
interest in the Pzerside property to the Redevelopment Agency,
an agreement between the city and the Agency, and a lease
between the Agency and the developer , subject to a vote of the
people. For the reasons herein stated we counsel structuring
the transaction to provide for a lease by the city rather than a
deed, and amend the lease to limit the overall term to 66 years .
I
ISSUE: Does a lesise of pie-rside_pronerty triggQr tthe-
requirement-of a f_ouar-fifths vote findinn that—the nropprry is
not suitable EQr a ogrk or beach? (Government Code § 37351 . )
BOTTOM LINE: Ldox �A lease is not a. sale or conveyance for
purposes of g373 -1. However, a deed of the city' s title to the
Redevelopment Agency would be considered a conveyance. In that
event, the elements of § 37351 must be considered . we view the
property as water front, but are of the opinion that the
requirement to find property not suitable for use as a beach or
park is only applicable where the proposed use is not consistent
with beach or park purposes . The Council may find that the
proposed use is a legitimate park use, since the proposed use
includes public promenades, access to the tidelands , view access
of the water and beach, and parking .
Honorable Peter Green, Mayor
and Members of the City Council
April 3, 1991
Page 2
Throughout the state and nation there are restaurants in park
settings and other commercial structures (like the refurbished
roller coaster in San Diego) , so restaurants are not an anathema
to park use.
Any deed or conveyance should be restricted to park use. if a
use is a proper park use, there is no need for a Eour-fifths
vote to determine the property is ng-L suitable for a park. As
noted, however, a lease by the city would be preferable to a
deed of the city' s interest to the Redevelopment Agency.
It should also be noted that there are ample mechanisms
available to protect the public interest, including the
California Coastal Act, CEQA, and the charter requirement of a
vote of the people on such leases .
BACKGROUND:
The statute in question is a revision of a statute that dates
back to 1883 , and was amended in 1957 to add the latter
limitation regarding a four-fifths vote . The statute in general
focuses on a grant of authority to legislative bodies to
purchase, convey, lease or exchange real property for municipal
purposes , and the 1957 amendment adds a limitation on the power
to sell or convey water front property. Although there are a
number of cases cited in the annotations to the code, none of
these cases defines "water front" and none deals with the
required finding of whether water front is "suitable" for use as
a public beach or park.
We have researched a number of sources in an effort to define
the terms and apply this section to the Pierside situation. The
term "water front" is not an engineering term that. has any
common meaning, as does "beach, " "shore, " "mean high tide line, "
and the like . Via conferred with the U.S. Army Corp of
Engineers , Waterways Experiment Station, in Vicksburg,
Mississippi , and found that their shoreline manual does not
contain any definition of "water front . " Nor do the regulations
promulgated by the California Coastal Commission define "water
front . "
A review of the opinions of the Attorney General of California
does not shed any light on this issue, except that in a 1945
opinion involving the City of Newport Beach, the Attorney
General opined that land in Corona del Mar which was the site of
a proposed state park (presumably the Corona del Mar State
Beach) lying above the ordinary high water mark of the Pacific
Ocean was water front, and that submerged lands below the mean
high tide line did not constitute water front . The words "water
1
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page 3
front" are defined in the Ametrcn-ieritaae Dictionary as land
abutting on a body of water, such as a lake or harbor . Water
front does not include the water beyond the mean high tide line
or the underlying land, and ordinarily means land fronting on a
body of water . See City of L ng Reach v . LiDrLby (1917) 175
Cal . 575, 166 P. 333 , 335 .
We have also spoken with other coastal cities, including San
Diego, San Francisco, bong Beach, Newport Beach and Los Angeles
and are informed that none of these cities has rendered any
opinion on the applicability of the section, and that none
follows the procedures set forth in the section.
For the reasons stated, it is our opinion that § .37350 is not
applicable to the subject project .
In analyzing the applicability of § 37351, we need to make three
inquiries . First, is the property water front? Second, would a
lease of the Pierside property for a term of years constitute a
sale or conveyance? Third, if so, may the City Council find it
is not "suitable" for use as a public beach or park?
Preliminarily, we note that this _QQve_rnment_Cgdp § 37351 is in
the general. provisions portion of the Qovernm?,nt CQde dealing
with city property. -Primarily, the provisions of this section
of the Government CgdQ focus on general law of cities, and one
must read each section to determine whether it applies to a
charter city.
A charter city has exclusive powers over municipal affairs .
(Cal . Constitution, Article 11, § 5 . ) In matters of local
concern, city charters "supersede all laws inconsistent
therewith. " (Id. ) It is a judicial question whether a matter
is a municipal affair, and legislative declarations are not
determinative (Di
,shov v. San- Jose (1969) 1 Cal . 3d 56 , B1
Cal .xptr . 465 . ) While it may be argued that leases of local
parks and beaches are matters of state-wide concern, local land
use planning is a uniquely local concern, except as the city may
have adopted state planning law (Qgvernment Code § 65803) or are
required to act by statutes of state-wide application, such as
the requirement for a general plan. (Gov ornment Code § 65300. )
We do not conclude that § 37351 is superseded by the charter as
to the subject property, but we do note in passing that there is
at least an argument along these lines . This argument is
buttressed by the subsequent enactment of a matrix of planning
laws which are applicable to charter cities which serve to
protect environmental and coastal resources, such as the
California Coastal Act, the California Environmental Quality
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page A
Act, and various general planning statutes that protect coastal
areas . Further, our charter also has provisions which were
recently enacted by the voters as Measure C which require a vote
of the people prior to any sale or lease of any park or beach
property, so the charter provides ample protections for the
interests of the public and an opportunity for the citizens of
the community to express their views on the disposition of such
property. Accordingly, we expressly decline to determine whether
or not the four-fifths vote and the findings required by § 37351
with regard to water front property are binding on a charter city
such as the City of Huntington Beach. Instead, we base our
decision that the statute is inapplicable upon a reading of the
section and comparison with other sections within the Government
Code provisions relating to city property.
It is also our opinion that § 37351 is intended to deal with the
sale of property for purposes othor, than a public beach or park.
If the section were literally interpreted to apply to any lease.
of water front property for a use which would be an appropriate
use of beach or park lands , the statute would preclude even a
lease of a hotdog stand or to provide parking For beach patrons .
We will conclude that a lease of any water front property for a
purpose which would otherwise be allowable in a public beach o'r
park is not subject to the section.
ANALYSIS,
1. Question: 1:� thg property w Dter front?
Answer: Yes .
As we noted above, water front is defined in the court cases
by what it is not rather than what it is . Water front is not the
land or water seaward of the mean high tide line; it is the land
upland of the mean high tide land. No cases define how far
inland the water front property goes, although most of the cases
deal with piers and wharfs, which are directly touched by water.
In the case at bar , the property is clearly uplands and is ,
separated from the mean high tide land by a broad expanse of
beach and a beach access road. The property is mostly the area
beyond and above the bluffs , and has been paved and used for a
variety of purposes for at least the last 50 years . The property
has been used for a building housing some restaurants , for
.parking of cars , for a snack bar , and for a lifeguard
headquarters . The property is certainly beach front property;
but it does not front on the water . {See our opinion of January
30, 1991, defining beach in the context of the beach parking lot. }
i
1
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page 5
We recognize that reasonable minds can differ on the question of
whether property fronting on a beach is water front property;
indeed it is difficult for property to be closer to the water
than that which fronts on beach. Qn 1alanc, we are inclined to
collude that the-subiect Property is watgr front, nizin
that this proposition is not freg from d,gubt . and the
Legis ature-ham spn-e duty to prov-ide language which is clear and
explicit-when it is a f t ng a statute restricting property
rights .
2 . Question: Lqguld the PrQpQscd n i n operate to "sell
Qr nvQY" thg prgperty?
Answer: No .
When reading the section as a whole, the conclusion is
inescapable that the restriction does not apply to leases . This
conclusion is buttressed by sections in the subsequent chapters
of the Government Code which expressly deal with leases .
Accordingly, § 37351 would operate to prevent a sale of the
subject property for a use unrelated to park or beach uses,
unless the property were unsuitable for such uses .
.The first sentence of- S 37351 expressly discusses the powers of
a legislative body to purchase, lease, exchange, control,
dispose of , and convey property. The restriction on water front
is confined to actions of a legislative body to "sell or convey"
water front property. As a matter of legislative
in erpretation. the omission of the word " lease" from the
restri_cti-ons—sunggst a legz_sla-tive intent ,to _ onfin_e-th-e-
rrutriction to co vayances or sale- other than led2 Qa.
A conveyance, in the strict legal sense, is a transfer of title
to real property. (B1gck_,S ,.Law Dictionary, 4th Ed. ) It
normally denotes any transfer of title, whether legal or
equitable. (Jl . ) Title is generally the union of all elements
which constitute ownership, and is more than a mere possessory
right in land. (d. ) In some contexts a lease has been held to
present the "aspect" of a conveyance (Samuels v . Ottinger (1915)
169 C. 209 , 211, 146 P. 638 . ) to illustrate its dual character
as both an interest in real property and a contract . But in the
traditional sense a leasehold is not title, and the clear intent
of 5 37351 is to distinguish between a lease (an agreement which
dives rise to the relationship of landlord and tenant) and a
conveyance of legal or equitable title.
in the matter at bar, we understand that the proposal is for the
city to convey the property to the Redevelopment Agency, and for f
I
i
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page 6
the Redevelopment Agency to enter into a lease. While the
Redevelopment Agency is a body related to the city and shares
the same board of directors, it is nonetheless a separate legal
entity and a state agency deriving its powers directly from
state laws rather than from the state Constitution, as does the
city. Accordingly, if the section is applicable to a transfer
for the proposed uses, it is our opinion that the section would
preclude conveyance of title to the Redevelopment Agency.
However , the section would not preclude lease of the property
for proper purposes to the Redevelopment Agency or to an
operator to provide services which would be otherwise proper for
beach or park property.
As noted in r , it is our opinion that the proposed uses are
consistent with the legally authorized uses for public beach or
park, or as in this case lands held for the benefit of the
public . Accordingly, if there were appropriate use restrictions
on the conveyance, they should not trigger the remaining
procedures of § 37351 . This issue is obviated, however, by the
city entering into a lease rather than a conveyance to the
Pedevelopment Agency of its interest in the site.
Article 2 of Chapter 5 of the Government Code, dealing with
public property, covers leases and has express provisions for
the power of the city to lease property owned or held or
controlled by it for terms not to exceed 55 years, or up to 99
years under certain conditions, and the section expressly gives
charter cities significantly greater powers than general law
cities in this regard . Section 37385 expressly gives the city
the power to lease tide and submerged lands as well as uplands
abutting upon them as the legislative body deems necessary for
the proper development and use of its water front and harbor
facilities, for not to exceed 66 years , Cities also have the
power to lease tidelands and uplands for parks, recreational ,
residential, or educational purposes . Thus , cities have broad
powers to lease tidelands and uplands abutting tidelands . It is
obvious that throughout the state there are leases of
restaurants , warehouses, and other facilities along waterways
and beaches, and we assume that it is this authority that
supports such instruments .
It is our suggestion that the city not purport to convey in fee
its interest in the subject property, but that it may enter into
].eases without triggering the four-fifths vote and findings
required by 5 37351 .
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page 7
3 . Question: Woula a four-fifths vote be required pn whe _h r
tha land is nod 5uia4le for_use• a,5 a nark or
beach.
Answer : No, unless a proposed use is inconsistent with
public purposes .
We need not reach this issue, since we have held that a lease is
not a sale or conveyance for purposes of § 37351. Assuming,
arguendo, that it would trigger the section, it should be noted
that the finding of "suitability" required by the code leaves
considerable latitude in the legislative body to determine
whether property is appropriate or necessary for use as a park
or beach . "Suitable" means appropriate from the viewpoint of
propriety, convenience, or fitness . (Webster_s Ungbridged_
Dictionary. ) A legislative body has great latitude in making
such determinations . Therefore, tte City Council upon a review
of the plan could determine by a four-fifths vote that for a
variety of reasons the property is not suitable for use as a
public beach or park, based on the availability of other
parkland, the fact that the use is consistent with park
purposes , or a determination that the proposed uses are needed
to serve adjoining beaches or parklands .
Additionally, the Council may well determine that the proposed
uses on the property are consistent with beach or park use. If
so, then the language of S 37351 would appear to be inapplicable
to the project, since as noted the obvious intent of the section
is to preclude conveyances of land for some purpose other than
use as a beach or park. Throughout the state, and indeed
throughout the country, parks contain .various amenities that are
commercial in nature, such as restaurants , roller coasters,
museums , and other uses . The Council may well find that the
project as proposed and approved will conform to park purposes
in providing facilities for beach-goers , public access to the
tidelands for pedestrian traffic, and parking of vehicles for
persons who wish to use these amenities and enjoy the visual
access to the ocean or walk to the water . So if the uses are
consistent with park purposes , the four-fifths vote requirement
of § 37351 would not be triggered in any case.
CONCLUSION:
Section 37351 d!2gs_not app],y tom lease of the Pierside
r n 1 i r uses of thei w i h ar
u nsistent with thg pub ic, inteKest_ in the property.
�J
�t
Honorable Peter Green, Mayor
and Members of the City Council
April 3 , 1991
Page 8
it should also bE: noted that property which is uplands abutting
upon tidelands is limited to a lease term of 66 years . we think
this land arguably does abut tidelands and that any lease should
be so limited . Also, the transaction should be structured so
that the city leases its interest to either the Redevelopment
Agency or an operator, and does not purport to convey its
interest .
jc't�
Gail Hutton
City Attorney
GH:RCS: sg
cc: Michael T. Uberuaga, City Administrator
mike Adams, Director of Community Development
Ron Hagan, Director of Community Services
Barbara Kaiser, Director of Economic Development
Tom Clark, Esq.
Jonathan Chcdos
.j1 CITY OF HUNTINGTON BEACH
MAYORS MEMO
"UNTiNGTON LEACH
To
Mike Uberuaga, City Administrator From Peter Green, Mayor '
PIERSIDE PROPERTY VOTE April S, 1991
Subje-t REQUIRED FOR A LEASE Date
I have read, albeit without a trained legal mind, the April 3, 1991, opinion of the City
Attorney, concerning the number of votes necessary for a transfer of Pierside property.
If the Council follows this opinion and votes to transfer or lease the property, undoubtedly
there will be challenges and, of course, there will be a costly special election because of
Prcposition C.
I would Iike to request, before we start down this path, that another legal opinion by an
independent law firm that specializes in coastal redevelopment issues be provided to the
Council. My request is not unusual, and is provided for in the City Charter (Section 304 b)
where it states: "The City Council shall have the control of all legal business and
proceedings and all property of the legal department, and may employ other attorneys to
take charge of or may contract for any prosecution, litigation, or other legal matter or
business."
Both as Mayor and as Chairman of the Redevelopment Agency, I would feel more f
comfortable about this issue if another legal opinion could buttress that of the City
Attorney.
PB:pa j
xc: City Council Members
i
pE.QUEST FORs EDEVELOPMENT A,-e—! EN �'Y ACTION
{• PH 90-11
Date
Yebmary 20, 1990
Itild tsi. t-icnicitable t,llainion aixt iuxC weloprra It Agency Yp-nb.-m-
;r,;,[ritted :)y: Paul F.. Cook, Executive Director
)rC$)3red lw: Keith B. Bohr, TOdevelopnmt Specialistoy
AMMAL OF Mt n271 D1L ErVEWYMIT F.jal FM PjErt= =rllfWrM
;o tsistc:rrt with Council Policy? ( Yes ( New Policy or Exception
Staterntnt of Issuo, Recommendation, Anglysis, Funding Source, Alternative Actions, Attachments:
LOF
On January 17, 1989, the Mency directed staff to prepare an wrclxied Pierside
Village plan to eliminate the specialty/retail uses while retainirrj the
restau_•ant L--es (staff report attached) . Additionally, staff was authorized
tr, t:o negotiate with its operators, for the rehabilitation of Maxwell's Restaurant.
V[-)CCrr1END%TTal:
Approve the conceptual plan for develo-vw-nt of the "Pierside Restaurants"
a.ttich includes:
The developrent of two rv�w restau—rznt pads - (25,000 sq- ft. ) ;
Accarvrndations for the relocation cf the existing Mmmell's
Restaurant - (15,000 sq. ft.) ;
'Me developrwant of a ptarkiny structure, including surface aryl
sigi-aL-face parUM for bout bez&gors and restaurant patrons;
The developrent of beach-related cortaessions, including
approximately 6,000 sq. ft. of casual dining space; and
Authorize staff Lwl the developer of Pierside to negotiate for the
relocation and integration of Maxwell's into the Pierside plan.
MNLYSI S:
On Septetrbar 18, 1988, the City Council adopted a a "Pier Plaza" concept that
galls for the development of a 2.1 acme "Pier Plaza" to be located between the
,ease- of the Pier and Pacific Coast Highway. 1pproxinately one-half of
Maxwell's Restaurant as it exists today lies within the adopted 2.1'acre
footprint of this plan. Pz a result, the negotiations for the rehabilitation �-
REQUEST FOR CITY COUNCIL ACTION
�•►' March 18, 1991
Date
ibmit:ed to: Honorable Mayor and City Council Members
Submitted by: Michael T. Uberuaga, City AdministratoC�
Prepare) by: Michael Adams , Director of Community Development
Subject: APPEAL - CONDITIONAL USE PERMIT NO. 90-17, COASTAL
DEVELOPVX-11T PERMIT NO. 90-18, SUPPLED -NTAL ENVIRONMENTAL
IMPACT REPORT NO. 90-2, GENERAL PLAN CONFORMANCE P.O. 90-8
(PIERSIDE RESTAURANTS)
Consistent with Council Policy? Yes ( j New Policy or Exception . �-G zL o
Sta'ement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
.5U'ATEMENT OFT,sSy�LT�:
Transmitted fo"r your consideration is an appeal submitted by
Councilwoman Winchell , of the Pierside Restaurants project . The
project as approved by the Planning Commission consists of 48, 500
sq . ft . of commercial development, including up to five new
restaurants and beach related concessions, with project related
parking and beach user parking . The Redevelopment Agency is the
cc-applicant for the project .
Subsequent to the appeal , the applicant developed a project
alternative which addresses some of the concerns raised at Planning
Ccmmission . This report will address the points of the appeal
submitted by Councilwoman Winchell for the original project, and-
discuss the applicant ' s revised plan as an alternate action .
�r MI~ ,N A l:
I3-1.ann•Lng CommL' a ion Recommendation :
Motion to, "Adopt and certify as adequate Final Environmental Impact
Report No . 90-•2 by adopting City Council Resolution No . 6- A6 0 with
Mitigation Measures , Statement of Overriding Considerations , and
Findings and Facts in Support of Findings ; Approve Coastal
Development Permit No . 90--18 , Conditional Use Permit No . 90-17,
; ;eneral Plan Conformance No . 90--8 with findings and conditions of
approval as outlined in Attachment 1 to the report dated
March la , 1991 . "
,U At..
Wd YQ 110
03A1333ti!
No Wes
TENTATIVE ACTION PLAN A
IQJMPLEMENT_PIE_RSiDE RESTAURANTS
APRIL 15, 1991 City CouncillRedevelopment Agency Meeting
Closed Session— Agency gives staff direction on proposed
revisions to proposed Lease/Development Agreement
Council/Agency considers directing staff to proceed with
implementation of Tentative Action Plan
Council/Agency considers directing staff to obtain an
additional legal opinion regarding the determination of
whether a lease of the Pierside site would be considered
a conveyance of, and therefore require a, 4/5 vote for
approval
MAY 6 City Council/Redevelopment Agency Meeting
Council considers the reallocation of Certificate of
Participation funds from the proposed North of the Pier
Parking Structure to the Pierside Restaurants project
Council/Agency considers authorizing staff to prepare a
lease between the City and Agency for the Pierside site
MAY 7 — 10 Coastal Commission Hearing on Appeal of Pierside
Coastal Development Permit No. 90-18
JVLY 1 Council/Agency considers impacts, if any, of Coastal
Commission's action as it may relate to economics of
project
f
TENTATIVE ACTION PLAN A (continued)
IQ IMPLEMENT PIERSiDE RESTATIRANTS
JULY 15 Council/Agency considers approval of Lease between
City and Agency of Pierside site, approval of sublease/
Development Agreement between Agency and Stanley
Bloom
JULY 22 Special City Council Meeting
Council considers approval of Resolution, calling for a
Special Election to be held November 5, 1991
(approximate cost $80,000-$95,000)
AUGUST 2 Deadline for Council's direct arguments
AUGUST 12 Deadline for any rebuttal arguments
NOVEMBER 5 Special Election
NOVEMBER 6 Developer proceeds with the preparation of working
drawings (120-180 days)
MAY 6, 1992 Submit working drawings to Plan Check (30 days)
TENTATIVE ACTION PLAN A (continued)
IQ-IMPLEMENT PIERSTDE RESTAURANI,�
JUNE 6 Pull building permits/commence construction
Construction timeframe 12-18 months
JUNE, 1993 — Complete construction
JANUARY, 1994
8846r
TENTATIVE ACTION PLAN B
TD IMPLEMENT ERSID
APRIL 15, 1991 City Council/Redevelopment Agency Meeting
Closed Session-- Agency gives staff direction on proposed
revisions to proposed Lease/Development Agreement
Council/Agency considers directing staff to proceed with
Implementation of Tentative Action Plan
Council/Agency considers directing staff to obtain an
additional legal opinion regarding the determination of
whether a lease of the Pierside site would be considered
a conveyance, and therefore, requires a 4/5 vote for
approval
APRIL 16 Advertise Public Hearing on amendment to Pierside
entitlements
APRIL 29 City Council considers amendment to Pierside
entitlements
MAY 6 City Council/Redevelopment Agency Meeting
Council considers the reallocation of Certificate of
Participation funds from the proposed North of the Pier
Parking Structure to the Pierside Restaurants project
Council/Agency considers authorizing staff to prepare a
lease between the City and Agency for the Pierside site
TENTATIVE ACTION PLAN B (continued)
MMPLEMEN'[_PIERS,DDEE RESTAURANTS
JUNE 11--I4, 1991 Coastal Commission Hearing on Appeal of Pierside
Coastal Development Permit No. 90-18
JULY 1 Council/Agency considers impacts, if any, of Coastal
Commission's action as it may relate to economics of
project
JULY 15 Council/Agency considers approval of Lease between
City and Agency of Pierside site, approval of sublease/
Development Agreement between Agency and Stanley
Bloom
JULY 22 Special City Council Meeting
Council considers approval of Resolution, calling for a
Special Election to be held November 5, I991
(approximate cost $80,000—$95,000)
AUGUST 2 Deadline for Council's direct arguments
AUGUST 12 Deadline for any rebuttal arguments
NOVEMBER 5 Special Election
TENTATIVE ACTION PLAN B (continued)
TO IMPLEMENTpIERS,IDE RESIA[ZRANIS
NOVEMBER 6 Developer proceeds with the preparation of working
drawings (120-190 days)
MAY 6, 1992 Submit working drawings to PIan Check (30 days)
JUNE 6 Pull building permits/commence construction;
Construction timeframe 12-18 months
JUNE, 1993 — Complete construction
JANUARY, 1994
TENTATIVE ACTION PLAN C
I jMPLEMENLEIERSIDE RESTAURANTS
APRIL 15, 1991 City Council/Redevelopment Agency Meeting
Closed Session — Agency gives staff direction on proposed
revisions to proposed Lease/Development Agreement
Council/Agency considers directing staff to proceed with
Implementation of Tentative Action Plan
Council/Agency considers directing staff to obtain an
additional legal opinion regarding the determination of
whether a lease of the Pierside site would be considered
a conveyance, and therefore, requires a 4/5 vote for
approval
APRIL 16 Advertise Public Hearing on amendment to Pierside
entitlements
APRIL 29 City Council considers amendment to Pierside
entitlements
MAY 6 City Council/Redevelopment Agency Meeting
Council considers the reallocation of Certificate of
Participation funds from the proposed North of the Pier
Parking Structure to the Pierside Restaurants project
Council/Agency considers authorizing staff to prepare a
lease between the City and Agency for the Pierside site
TENTATIVE ACTION PLAN C (continued)
10 1MPLEMENT_PIERSIDE-RESTAURANTS
JUNE 11-14, 1991 Coastal Commission Hearing on Appeal of Pierside
Coastal Development Permit No. 90-19
JULY 1 Council/Agency considers impacts, if any, of Coastal
Commission's action as it may relate to economics of
project
JULY 15 Council/Agency considers approval of Lease between
City and Agency of Pierside site, approval of sublease/
Development Agreement between Agency and Stanley
Bloom
FEBRUARY 24, 1992 Special City Council Meeting
Council considers approval of a Resolution calling for a
consolidation of elections with the County to be held
June 2, 1992 (approximate cost $40,000--$50,000)
MARCH 5 Deadline for Council's direct arguments
MARCH 15 Deadline for any rebuttal arguments
JUNE 2 Special Election on Pierside Measure
TENTATIVE ACTION PLAN C (continued)
TO IMPLEMENT PIERSIDE RESTAUF ANTS
JANUARY 3, 1993 Submit working drawings to Building Division for
Plan Check (3D days)
FEBRUARY 3 Pull Building Permits/commence construction
Construction timeframe (12-la months)
FEBRUARY — Complete construction
AUGUST, 1994