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HomeMy WebLinkAboutHurley - Hurley, International - a wholly owned affiliate of Nike, Inc. - 2010-08-02Council/Agency Meeting Held:_ r�-' o Deferred/Continued to: Ap ov d % ondittonalt A rove d O�Deenniiied C y lerVsignat�e Council Meeting Date: August 2, 2010 Department ID Number: CS10-015 SUBMITTED -TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Administrator PREPARED BY: Jim B. Engle, Community Services Director SUBJECT: Approve and authorize execution of a License Agreement between the City of Huntington Beach and Hurley for sponsorship of two lifeguard towers; and, approve the $90,000 reimbursement to the City Statement of Issue: In the spring of this year, Hurley expressed -interest in a request by the City for proposals to partner with the City to sponsor the purchase and installation of two lifeguard towers in exchange for the right to advertise on the back of the towers. Financial Impact: N/A Recommended Action: Motion to: A) Approve and authorize the Mayor and City Clerk to execute the "License Agreement Between the City of Huntington Beach and Hurley for Sponsorship of Two Lifeguard Towers," after the receipt of the insurance; and, B) Approve the reimbursement of $90,000 to the Community Services Department for the purchase and installation of two lifeguard towers. Alternative Action(s): Do not authorize the agreement. This action would require an appropriation from the General Fund to fund two towers. Analysis: The City currently has 24 lifeguard towers. Due to the specialized fiberglass and stainless steel construction, the cost to replace these towers is approximately $45,000 each. Community Services Marine Safety Division has developed a multi -year, rotational program to replace the towers, but has not received funding approval for replacement over the past two years due the Ciity's financial constraints. In spring 2010, the City distributed a request soliciting proposals for funding for two lifeguard towers adjacent to the pier in exchange for the right to place its company logo or other marketing ads on the upper back panel of the tower (see Attachment 2). Hurley was the only one of seven companies to submit a proposal. -145- Item 12. - Page 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 8/2/2010 DEPARTMENT ID NUMBER: CS10-015 The deal points for the agreement are listed below. CitV 1. City shall make the back panel of two lifeguard towers available to Hurley to install and maintain its logo or other product advertising. 2. City has the right to review, in advance, the marketing material, but shall not unreasonably withhold approval. Hurley 1. Hurley shall have the right to change its advertising on the back of the towers at any time as long as it doesn't adversely affect public safety. 2. Hurley acknowledges and agrees that the City shall review and approve all advertising before it is placed on the back panel of either lifeguard tower. 3. Hurley acknowledges and agrees that the City is not endorsing the products or advertising of Hurley by the grant of this license. 4. Hurley agrees that it shall not suffer or permit any dangerous condition to be created, exist, or continue on the license areas as a result of its installation or maintenance activities associated with the advertising on the back panel of the towers, and that all of its acts, and those of its contractors and subcontractors, shall be carried out in a careful and reasonable manner. The tower construction is similar to the existing towers, with the exception of the sand or tan color and red roof and small copula on the top to simulate Ruby's iconic architecture. Community Services, including Marine Safety, staff has reviewed the design for the new tower and is in agreement that the advertising on the back of the towers will not conflict with ocean lifeguarding activities. The towers are anticipated to be delivered pending the approval of the attached license agreement. Attachment 2 shows the design of the new towers and the advertising space which is the subject of this agreement. It should be noted that the agreement calls for a 10% deposit and final payment after the agreement has been signed. Hurley has paid the entire $90,000 in advance to expedite the construction and installation of the towers at the beach, Environmental Status: N/A Strategic Plan Goal: Maintain and Enhance Public Safety Attachment(s): Item 12. - Page 2 -146- i I ; d A �i .ram I � �a 4 LICENSE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND HURLEY FOR SPONSORSHIP OF TWO LIFEGUARD TOWERS This LICENSE AGREEMENT (this "Agreement"), is made by and between the City of Huntington Beach, a municipal corporation (the "City"), on the one hand, and Hurley (a California corporation) (hereinafter referred to as "Hurley"), on the other hand. RECITALS A. City is the owner of the City Beach, Pier and Lifeguard Towers located on the Beach, within the City of Huntington Beach (hereinafter the "Public Property"). B. Hurley desires to sponsor two Lifeguard Towers on the Huntington Beach Pier, with one on each side of the Pier, in exchange for compensation for using the back panel, only, of the two Lifeguard Towers for advertising their products and logo. C. Hurley desires to obtain a license from the City for the purposes of installing and maintaining the advertising on two Lifeguard Towers. D. City desires to allow sponsorship of two Lifeguard Towers by accepting compensation for using the back panel, only, to help raise funds for the cost of programs and construction and maintenance of two Lifeguard Towers. NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other valuable consideration, the receipt of which is hereby acknowledged, the City and Hurley do hereby agree as follows: License Area. The area subject to this License (the "License Area") is the back panel of two Lifeguard Towers, one on each side of the Pier, at a location designated by the City. Hurley will have the entire upper section of the Lifeguard Tower for their advertisement anu Life ir..ity V 111 riJL i the i 3VV er. Jel+ti l�11 for iL Jal✓t�' L'LileJ a11d rcguia LlVris. 2. Grant of License. The City hereby grants to Hurley a license to use the back panel of two Lifeguard Towers, one on each side of the Pier, to advertise its products and logo. a. City shall make the back panel of two Lifeguard Towers available to Hurley to install and maintain advertising of its products and logo. Hurley shall have the right to change its advertising on the back of the towers at any time. 10-2526.001/48523 1 of 6 b. Hurley acknowledges and agrees that the City shall review and approve all advertising before it is placed on the back panel of either Lifeguard Tower, and such review and approval shall not be unreasonably withheld. C. Hurley acknowledges and agrees that the City is not endorsing the products or advertising of Hurley by the grant of this License. 3. Term of Agreement. This Agreement shall have a term of five years ("Term") commencing upon the Effective Date of this Agreement, and may be extended for one additional five-year term after the expiration of the Term, provided both parties agree. Hurley shall have the right of first refusal to continue advertising on one or both Lifeguard Towers. 4. Payment. a. Hurley shall pay a good faith deposit of ten percent ($9,000.00) of the total agreed -upon amount of $90,000.00 to confirm acceptance of terms and overall agreement. Hurley agrees to provide in full the remaining amount of $81,000.00 within one week after City Council approves this Agreement. b. If the payment required by this Section is not received by the City Treasurer within ten (10) calendar days after the end of the month for which payment is paid, or the next business day if the tenth day falls on a weekend or holiday, Hurley shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 1/2 %) penalty per month shall be added for each month such payment hereunder is due but unpaid. 5. Safety Requirements. In exchange for the License granted above, Hurley agrees that it shall not suffer or permit any dangerous condition to be created, exist, or continue on the License Area as a result of its installation or maintenance activities associated with the advertising on the back panel of the Lifeguard Towers, and that all of its acts and those of its contractors and subcontractors shall be carried out in a careful and reasonable manner. 6. Condition of License Area. Hurley acknowledges that it shall enter the License Area at its own risk, and that neither the City nor any of its officers, employees, agents, or contractors has made any warranty or representation to Hurley with regard to the safe condition of the License Area. 10-2526.001/48523 2 of 6 7. Indemnification, Defense, Hold Harmless. Hurley hereby agrees to protect, defend, indemnify and hold and save harmless the City, its officers, and employees against any and all liability, claims, judgments, costs and demands, however caused, including those resulting from death or injury to Hurley's employees and damage to Hurley's property, arising directly or indirectly out of the grant of License herein contained, including those arising from the passive concurrent negligence of the city, but save and except those which arise out of the active concurrent negligence, sole negligence, or the sole willful misconduct of the City. Hurley will conduct all defense at its sole cost and expense. Worker's Compensation and Employers' Liability Insurance. Pursuant to the California Labor Code Section 1861, Hurley acknowledges awareness. of. Section 3700 et seq. of said code, which requires every errmplover to be insured against liability for workers' compensation; Hurley covenants that it will comply with all such laws and provisions prior to the encroachment into Public Property pursuant to this license. Hurley shall maintain such Workers' Compensation Insurance in an amount of not less than One Hundred Thousand Dollars ($100,000) bodily injury by accident, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident hereto, in forms and underwritten by insurance companies satisfactory to the City. 9. General Liability Insurance. Hurley shall carry at all times incident hereto, on all activities to be performed in Public Property as contemplated herein, general liability insurance, including coverage for bodily injury, and property damage. All insurance shall be underwritten by insurance companies in forms satisfactory to the City. Said insurance shall name the City, its officers, agents and employees and all public agencies as determined by the City as Additional Insureds. Hurley shall subscribe for and maintain said insurance policies in full force and effect during the life of this Agreement, in an amount of not less than One Million Dollars ($1,000,000) combined single limit coverage. If coverage is provided under a form which includes a designated general aggregate limit, such limit shall be not less than One Million Dollars ($1,000,000). In the event of aggregate coverage, Hurley shall immediately notify the City of any known depletion of limits. Hurley shall require its insurer to waive its subrogation rights against the City and agrees to provide certificates evidencing the same. 10. Certificates of Insurance; Additional Endorsements. Prior to the encroachment into Public Property pursuant to this license, Hurley shall furnish to the City certificates of insurance subject to approval of the City Attorney 10-2526.001/48523 3 of 6 evidencing the foregoing insurance coverages as required by this Agreement; said certificates shall provide the name and policy number of each carrier and policy, and shall state that the policy is currently in force and shall promise to provide that such policies will not be canceled without thirty (30) days prior written notice to the City. Hurley shall maintain the foregoing insurance coverages in force until this Agreement is terminated. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of the City by Hurley under this Agreement. The City or its representative shall at times have the right to demand the original or a copy of all said policies of insurance. Hurley shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. A separate copy of the additional insured endorsement to each of Hurley's insurance policies, naming the City, its officers and employees as Additional Insureds shall be provided to the City Attorney for approval prior to the encroacl,-rnent into Public Property pursuant to this License. 11. Insurance Proceeds. Any insurance proceeds received by City because of the total or partial destruction of said License Area or any buildings on said License Area shall be the sole property of the City. 12. Insurance Hazards. Hurley shall not commit or permit the commission of any acts on said License Area nor use or permit the use of said License Area in any manner that will increase the existing rates for or cause the cancellation of any property, liability or other insurance policy insuring the Huntington Beach Pier and Lifeguard Station, said License Area or the improvements on said License Area. Hurley shall, at its sole cost and expense, comply with any and all requirements of insurance carriers necessary for the continued maintenance at reasonable rates of property, liability and other insurance policies on the Huntington Beach Pier and Lifeguard Station, said License Area and the improvements on said License Area. 13. Liens. Hurley shall not permit or suffer any mechanic's or materialmen's or other liens of any kind or nature to be recorded and/or enforced against the License Area for work done or materials furnished on its behalf. 14. Termination. Either party may terminate this Agreement upon sixty (60) days written notice to the other. 10-2526.001/48523 4 of 6 15. Miscellaneous. A. Assignment. Neither Hurley nor the City shall assign its rights or responsibilities under this Agreement, in whole or in part, except with the written consent of the other party hereto. Any attempted assignment without such prior written consent shall be invalid and void. B. Compliance with Laws. Hurley shall comply with all required State, County and City laws and regulations relating to the use of the License Area and shall be solely responsible for all costs incurred in connection with such compliance. C. Applicable Law. This Agreement shall be construed, governed and enforced in accordance with the laws of the State of California. D. Attorney's Fees. In the event suit is brought by either party to enforce the terms and provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees. The prevailing party shall not be entitled to recover its attorney's fees. E. Release. Hurley hereby releases and forever discharges City, its officers, employees and officials, of and from any and all claims, demands, actions or causes of action whatsoever which Hurley may hereafter have, against the City specifically arising out of the matter of the entry of Hurley onto the Public Property. This is a complete and final release and shall be binding upon Hollister and the heirs, executors, administrators, successors and assigns of Hurley's Property. Hurley hereby expressly waives any rights under or benefit of any law of any jurisdiction whatsoever providing the contrary. Neither the acceptance of this release nor any payment made hereunder shall constitute any admission of any liability of City. F. Waste. Hurley shall not alter, damage or commit any kind of waste upon the Public Property or any improvement, equipment or personal property thereon and shall not interfere in any manner with the operations or activities of City. Hurley shall make no change in the use of the Public Property nor shall the design of the Public Property be changed other than as authorized herein without prior written consent of City. Hurley shall not cause any workmen's or materialmen's liens to be placed upon the Public Property and agrees to indemnify and hold City harmless against any such liens including but not limited to the payment of attorney's fees. G. Entire Agreement. This Agreement contains a full a complete expression of the parties and it shall supersede all other agreements, written or oral, hereto made by the parties with respect to the subject matter hereof. This Agreement may be modified only in writing, signed by the parties hereto. 10-2526.001/48523 5 Of 6 H. Service Interruption. City may, upon written notice to Hurley, suspend or revoke this Agreement without liability to Hurley when public necessity so requires, or suspend operation immediately hereunder, without any advance notice and without any liability to Hurley, in the event of public emergency or necessity, as may be determined by the City Administrator. Such suspension will terminate when the public necessity or emergency no longer exists. IN WITNESS WHEREOF, authorized representatives of the City and Hurley have duly executed this Agreement Au4asr 01A, , 2010 (the "Effective Date"). HURLEY, a California corporation, By r& r . print name �---� ITS: (circle one) Chairman/Presiden ' ice President AND By:21nw� 1 print name ITS: (circle one) Secretary/ hief Financial Officer/ sst. Secretary — Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California A ROVED AS TO FORM: NY C ty Atto ey 04o (o 1 �0 INITIATED AND APPROVED: 0.,� 6. 45f �-, er� for of Community S ices REVZWED AND APPROVED: y/Administrator 10-2526.001/48523 6 of 6 s THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INS LTR ADD' INSR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YYYY) POLICY EXPIRATION DATE (MM/DD/YYYY) LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY SELF INSURED RETENTION 06/01/2010 06/01/2011 EACH OCCURRENCE 5000,000 DAMAGE T( RENTED PREMISES Ea occurrence $ N/A MED EXP (Anyone person) $ N/A CLAIMS MADE X� OCCUR PERSONAL &ADV INJURY $ Included GENERAL AGGREGATE $ N/A GENERAL AGGREGATE LIMIT APPLIES PER POLICY PRO LOC JECT Ll PRODUCTS - COMP/OP AG $ Included B B AUTOMOBILE X LIABILITY ANY AUTO RAG500016502 (MA) RAG500016402 (AOS) 06/01/2010 06/01/2010 06/01/2011 06/01/2011 COMBINED SINGLE LIMIT (Ea accident) $ 2,000,000 BODILY INJURY $ ALL OWNED AUTOS SCHEDULED AUTOS PPRO VFID AS TO F (Per person) INJURY $ HIRED AUTOS 4_1BODILY NON -OWNED AUTOS FM ZJiiC�Zr'� (Per accident) ATTORNF Ch J rF� ((;J PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN EA ACC AUTO ONLY: AGG $ $ D EXCESS I UMBRELLA LIABILITY XOCCUR CLAIMS MADE XOOG24908604 06/01/2010 06/01/2011 EACH OCCURRENCE $ 2,000,000 AGGREGATE $ 2,000,000 $ DEDUCTIBLE $ RETENTION $ C C WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE Y / N MWC11665900 (All Other States) MWXS904 (OR XS) 06/01/2010 06/01/2010 06/01/2011 06/01/2011 X WCSTATU- OTH- I FIR .L. EACH ACCIDENT $ 1,000,000 L. DISEASE - EA EMPLOYE 1,000,000 OFFICER/MEMBER EXCLUDED? DISEASE -POLICY LIMIT $ 1,000,000 (Mandatory In NH) If yes, describe under SPECIAL PROVISIONS below .L. E OTHER FAZ0318413 06/01/2010 06/01/2011 RISKS OF PHYSICAL LOSS/DAMAGE PROPERTY - ALL RISK SUBJECT TO POLICY DEDUCTIBLES & TERMS DESCRIPTION OF OPERATIONS/LOCATIONSIVEHICLESIEXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS RE: PURCHASE OF LIFEGUARD TOWERS CERTIFICATE HOLDER SEA-001616147-01 CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE CITY OF HUNTINGTON BEACH EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 2000 MAIN ST 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, HUNTINGTON BEACH, CA 92648 BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE of Marsh USA Inc. t ACORD 25 (2009/01) ©1998-2009 ACORD CORPORATION. All Rights Reserved The ACORD name and logo are registered marks of ACORD IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. Acord sulr, .� INSURANCE AND INDEMNIFICAMODIFICATION REQUEST TION WAIVER 1. Requested by: Catherine Von Holle SEP 2 3' 2010 2. Date: September 13, 2010 3. Name of contractor/permittee: Hurley Intl"`'' 4. Description of work to be performed: Purchase of and Adding Logo to Lifeguard Towers 5. Value and length of contract: $90,000 6. Waiver/modification request: Unable to provide additional ensured endorsment page 7. Reason for request and why it should be granted: Please see attached letter from Hurley/Nike's Risk Finance & Claims Dept. 8. Identify the risks to the City in approving this waiver/modification: none zit , S a=x9-13-10 ebartment Head SicinAi6re Date: ,E a s, APPROVALS -Approvals must be obtained in,'the order,listed on this form Two'appr�oyals are=required for a request to begrarited: Approval from CityAdministr tors .Officeis only 'required if Risk Management a . h C'ity:Attorneis O is disagree. 1. Risk Management r 9�Approved ❑ Denied Signature Date 2. City Attorney's Office proved ❑ Denie Signature Date 3. City Administrator's Office Approved ❑ Denied0)tb, b~�� Signature Date `If approved,,the completed waiver/modification.request is to be submitted to the City Attorneys -Office along with `tle contract for=approval Once the contract fias been -approved, this form is to be filed with the -Risk Management Division of HumarrResources - w� Waiver Form 9/13/2010 1:44:00 PM September 13, 2010 City of Huntington Beach 2000 Main Street Huntington Beach, Ca 92647 ATTN: Risk Management Department Re: Hurley, Int'I A wholly owned affiliate of Nike, Inc. Like many large companies whose operations span the globe, our Global Insurance Program is very comprehensive and complex, utilizing numerous insurers around the world. The levels of risk retention and insurance protection are consistent with our net worth and cash flow. As is the case with most Fortune 500 companies, we self -insure a portion of our risks through large deductible programs. Our insurance policies are not the standard one size fits all. At times we utilize manuscript policies that are specifically designed for our global program. Our insurance program includes all operating groups and affiliates of Nike, Inc. These operating groups and affiliates do not have the option of deviating from the program. Nike does not utilize individual endorsement statements to its policies. Please accept this document as evidence that Nike is aware of, and ready to fulfill, our contractual responsibilities and obligations with respect to loss or damage as specified in our agreement with you. If you have any questions concerning NIKE or our financial condition, please review our website: www.NIKEbiz.com. Sincerely, o arc 'x 7` " JO ANN F. PIEHL Nike Risk Finance & Claims 503-532-2033 joann.piehl@nike.com NIKE, Inc. One Bowerman Drive, Beaverton, OR 97005-6453 T:503.671-6453 F:503.671-6300 www.nike.com