HomeMy WebLinkAboutKathy May's Restaurant - 2019-07-15 � o ✓ 7�-o
City of Huntington Beach
File #: 19-766 MEETING DATE: 7/15/2019
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Dave Kiff, Interim City Manager
PREPARED BY: Kellee Fritzal, Deputy Director of Economic Development
Subiect:
Approve a Ten-Year Lease Agreement with Kathy May's Restaurant in Huntington Central Park
located at 6622 Lakeview Drive
Statement of Issue:
The City Council is asked to approve a ten-year lease with Kathy May's Restaurant, Inc. for the
operation of a restaurant/food concession in Huntington Central Park. The Lease is an extension of
the existing lease and allows for on-site service of beer and wine.
Financial Impact:
No fiscal impact.
Recommended Action:
A) Approve the "Lease Agreement between the City of Huntington Beach and Kathy May's
Restaurant, Inc.", for the restaurant building located 6622 Lakeview Drive in Huntington Beach; and,
B) Authorize the Mayor and City Clerk to execute the Lease Agreement on behalf of the City.
Alternative Action(s):
Do not approve the Lease Agreement and direct staff accordingly.
Analysis:
On August 15, 2011, the City Council approved a 10-year lease with Kathy May's Restaurant Inc., to
operate a family style restaurant located on the west side of Central Park at 6622 Lakeside Drive. Kathy
May invested approximately $100,000 in tenant improvements to rehabilitate and upgrade the facility,
including bringing it into compliance with the American's with Disabilities Act.
On January 16, 2018, a Councilmember Item was introduced by Councilmember Brenden directing staff to
investigate code amendments to allow the sale of beer and wine at restaurants with full table service located in
the OS-PR Zone, primarily Central Park. The Planning Commission conducted a public hearing to consider the
sale of beer and wine at restaurants. The Planning Commission approved Zoning Text Amendment ("ZTA")No.
18-001 and forward it to the City Council for approval. On May 7, 2018, the City Council approved Ordinance
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File #: 19-766 MEETING DATE: 7/15/2019
No. 4156 approving ZTA No. 18-001, thereby amending Section 213.06 of the Huntington Beach Zoning and
Subdivision Ordinance (Attachment No. 1) with conditions. The conditions consist of no packaged sales of
alcohol and increased preventative security measures consisting of: working alarm system for the facility,
functioning video surveillance, and motion detection lighting.
At the beginning of 2019, due to the death of Kathy May, her daughters assumed operations and approached
staff to finalize the application to sell beer and wine as part of their dining menu at the restaurant and requested
an extension of the lease for building improvements. On May 1, 2019, the Zoning Administrator approved a
Conditional Use Permit 19-006 ("CUP"), subject to issuance of a Type 41 License by the State of California
Alcohol Beverage Control Department("ABC") and Conditions of Approval (Attachment No. 2). A complete
list of the Conditions of Approval are found in Attachment No. 3, with key conditions outlined below:
• Daily Hours of Operation: Limited to 7:00 am - 10:00 pm (dining room & outdoor patio)
• Food service until at least one hour prior to scheduled closing time
• Sale of alcoholic beverages for consumption off-site is prohibited
No reduced prices or promotions of alcoholic beverages after 7:00 pm
No games/contests involving consumption of alcoholic beverages
• Employees shall complete Responsible Beverage Service training and certification by the ABC
• No live entertainment, unless an Entertainment Permit is issued by HBPD
A new draft lease agreement ("Lease") has been prepared to incorporate the Conditions of Approval made
under the CUP as approved by the Zoning Administrator and to provide an extension to July 2029. Kathy May's
Restaurant Inc. is governed by April Diaz (President) and Dawn Carrion (Secretary) and they have been
operating the restaurant.
The terms of the proposed lease are as follows:
Percentage Rent Sales from July 2019 to July 2024 based on the following thresholds:
Annual Gross Sales Percentage of Gross Sales
$0--$100,000 7.5%
$100,000--$150,000 9.5%
$150,000 and over 11.5%
Percentage Rent Sales from July 2024 to July 2029 based on the following thresholds:
Annual Gross SalesPercentage of Gross Sales
$0--$100,000 8.0%
$100,000--$150,000 10.0%
$150,000 and over 11.5%
In those months where the Percentage of Gross Sales does not exceed $1,875, a minimum base rent of
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File #: 19-766 MEETING DATE: 7/15/2019
$1,875/month will be billed. The term of the Lease will be for ten (10)years upon approval by the City
Council. The Economic Development Committee recommended approval of the Lease on December 19, 2018.
Environmental Status:
Not applicable
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Ordinance No. 4156
2. Zoning Administrator May 1, 2019 Meeting Minutes
3. CUP No.19-006 Conditions of Approval
4. Lease Agreement between the City of Huntington Beach and Kathy May's Restaurant, Inc.
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ORDINANCE NO.4156
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON REACH
AMENDING CHAPTER 213 OF THE HUNTINGTON BEACH ZONING AND
SUBDIVISION ORDINANCE TITLED OS OPEN SPACE DISTRICT
(ZONING TEXT AMENDMENT NO. 18-001)
WHEREAS, pursuant to the California State Planning and Zoning Law, the Huntington
Beach Planning Commission and Huntington Beach City Council have held separate, duly
noticed public hearings to consider Zoning Text Amendment No. 18-001, which amends Chapter
213 of the Huntington Beach Zoning and Subdivision Ordinance to establish a conditional use
pen-nit process to permit the sales, service, and consumption of beer and wine within the OS-PR
zoning district; and
After due consideration of the findings and recommendations of the Planning
Commission and all other evidence presented, the City Council finds that the aforesaid
amendment is proper and consistent with the General Plan,
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
ordain as follows:
SECTION 1. That Chapter 213 of the Huntington Beach Zoning and Subdivision
Ordinance titled Definitions is hereby amended to read as set forth in Exhibit A.
SECTION 2. All other provisions of Chapter 213 not modified herein shall remain in full
force and effect.
SECTION 3. This Ordinance shall become effective immediately 30 days after its
adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 21,.it day of 120
) A.
Mayor
ATTEST: APPROVED FORM:
City Clerk y Attorney
APPROVED:
REVIEW*, ROVED: 7fNITIATED AND APPROVED:
City Nt4afir DirecWr of C(66unity Development
Exhibit A: Legislative Draft
18-6322/175172/mv
Or�t,Ak, 14150
LEGISLATIVE DRAFTOMO/2018
OS District Land Use Controls
P=Permitted
L=Limited(see Additional Provisions)
PC=Conditional use permit approved by Planning Commission
ZA=Conditional use permit approved by Zoning Administrator
TU=Temporary Use Permit
PlU=Requires conditional use permit on site of conditional use
Not Permitted
OS-PR OS-S OS-WR Additional Provisions
Public and Semipublic (F)
Marinas PC
Park&Recreation Facilities PC PC
Public Safety Facilities PC
Utilities,Major
Utilities,Minor IZA ZA
Commercial Uses (F)
Animal Sales and Services
Equestrian Centers PC (E)
Commercial Recreation and PC
Entertainment
Communication Facilities L4
Eating&Drinking Establishments L I Ll
With Alcohol ZA I L-5
With Take-Out Service,Limited L I P
Vehicle/Equipment Sales and Services
Commercial Parking Facility L2 L2
Accessory Uses —7(A)(D)
Accessory Uses and Structures P/U P/U P/U
Temporary Uses (B)
Animal Shows TU
Circuses and Carnivals TU
Commercial Filming TU TU TU
LEGISLATIVE DRAFT 03/30/2018
Nonconforming Uses I ( ( I(C)
OS District: Additional Provisions
L-1 Allowed with a conditional use permit approval by the Zoning Administrator only as an
ancillary use that is compatible with and part of a park or recreational facility.Only in the coastal
zone overlay district, in public parks in both the Parks and Recreation and the Shoreline Subdistricts,
only the following type of eating and drinking establishment shall be permitted: take-out service
establishments where patrons order and pay for their food at a counter or window before it is
consumed and may either pick up or be served such food at a table or take it off-site for
consumption; and persons are not served in vehicles.
L-2 Public parking is permitted,but commercial parking facilities on City-owned land require a
conditional use permit approval by the Planning Commission. Recreational vehicle overnight
parking is limited to 10%of available public parking.No encroachment onto sandy beach area shall
be permitted.
L-3 Beach concession stands for sale of refreshments and sundries(not to exceed 2,500 square
feet)must be located a minimum 1,000 feet apart. Beach concession structures shall be located
within or immediately adjacent to paved parking or access areas.
L-4 Only wireless communication facilities permitted subject to Section 230.96,Wireless
Communication Facilities.
L=5'Eating„and drinking establishments with full table service,with or,without outdoor dining,
located in Central Park may provide on-site saes;sery lice and consumption of beer up and wine on
obtaining a Conditional Use-Permit approved by the Zoning Administrator. Public or private golf
courses with or without outdoor dining,may provide the on-site sales,service and consumption of
alcohol upon obtaining a Conditional Use Permit japproved by:the Zoning. - inistrator.
(A) Limited to facilities incidental to an open space use.
(B) See Section 241.22,Temporary Use Permits.
(C) See Chapter 236,Nonconforming Uses and Structures.
(D) Private cantilevered decks abutting residential uses;private boat ramps,slips,docks,
windscreen and boat hoists in conjunction with adjacent single family dwellings. See Residential
Districts and Chapter 17.24.
(E) See Section 230.48, Equestrian Centers.
(F) The permitted uses for recreation areas on the Huntington Beach mesa shall be limited to low-
intensity uses including picnic grounds,arboretums,bird sanctuaries,trails.High-intensity uses such
as tennis courts, athletic fields,stables,campgrounds or other commercial or recreation uses shall be
conditional only,and shall be located in nodes adjacent to existing developed areas or roads and
shall avoid adverse impacts on environmentally sensitive habitats.(3334-6/97,3568-9/02)
Zoning Administrator City of Huntington Beach
Wednesday, May 1, 2019 2000 Main Street
1:30 PM - Regular Meeting Huntington Beach, CA 92648
MINUTES Room B-8, Lower Level
i
4
JOANNA CORTEZ,Associate Planner _ RICKY RAMOS, Senior Planner
JUDY GRAHAM,Administrative Secretary €
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CALL TO ORDER
PUBLIC COMMENTS
Anyone wishing to speak during PUBLIC COMMENTS must fill out and submit a form to
speak. The Zoning Administrator can take no action on this date, unless the item is
agendized. Anyone wishing to speak on items not on today's agenda, may do so during
PUBLIC COMMENTS. Please note comments on closed public hearing items will not be part
of the permanent entitlement record. Speakers on items scheduled for PUBLIC HEARING
will be invited to speak during the public hearing. (3 MINUTES PER PERSON, NO
DONATING OF TIME TO OTHERS)
PUBLIC HEARING ITEMS
COASTAL DEVELOPMENT PERMIT NO. 2019-004 (WINDWARD
ARCHAEOLOGICAL GRADING AND MONITORING)
REQUEST:
To permit archaeological grading and monitoring activities on a
vacant 2.5-acre portion of an approximately 5-acre property located in
the Coastal Zone.
LOCATION:
APN 163-361-10 (Vacant Property - Southeast of Bolsa Chica Street at Los Patos
Avenue; South of City landscape lot)
Continued to the May 15, 2019, meeting.
COASTAL DEVELOPMENT PERMIT NO. 19-005 (MOBILITIE SMALL CELL
WIRELESS FACILITY)
REQUEST:
To remove an existing 23 ft. 9 in. high light pole and replace with a
new 24 ft. 1 in. high light pole to install small cell wireless equipment
at an overall height of 27 ft. 2 in. and new underground infrastructure in
the public right-of-way located in the Coastal Zone.
LOCATION:
Page 1 of 5
Zoning Administrator MINUTES May 1, 2019
West side of 13th Street approximately 100 linear feet north of Pacific Coast Highway.
Attachments: Attachment No. 1 - Suggested Findings and Conditions of
Approval.pdf
Attachment No. 2 - Plans Received and Dated March 29
2019.pdf
This agenda item was approved with conditions.
COASTAL DEVELOPMENT PERMIT NO. 19-006 (MOBILITIE SMALL CELL
WIRELESS FACILITY)
REQUEST:
To remove an existing 23 ft. 9 in. high light pole and replace with a
new 24 ft. 1 in. high light pole to install small cell wireless equipment
at an overall height of 27 ft. 2 in. and new underground infrastructure in
the public right-of-way within the Coastal Zone.
LOCATION:
West side of 12th Street approximately 100 linear feet north of Pacific Coast Highway.
Attachments: Attachment No. 1 - Suggested Findings and Conditions of
Approval.pdf
Attachment No. 2 - Photo Simulations and Plans received
and dated March 29, 2019.pdf
This agenda item was approved with conditions.
CONDITIONAL USE PERMIT NO. 19-004/COASTAL DEVELOPMENT PERMIT NO.
19-002
REQUEST:
To remove an existing 24 ft. 10 in. high wooden utility pole and replace
with a new 30 ft. high wooden utility pole to install small cell wireless
equipment at an overall height of 32 ft. 6 in. and new underground
infrastructure installations in the public right-of-way located in the Coastal
Zone.
LOCATION:
North side of Pacific Coast Highway, approximately 855linear feet north of Newland
Street.
Continued to the May 15, 2019, meeting.
TENTATIVE PARCEL MAP NO. 2018-181 (MAGNOLIA ATLANTA SUBDIVISION)
REQUEST:
To permit the subdivision of an approximately 2.872-acre parcel into three
parcels.
Page 2 of 5
Zoning Administrator MINUTES May 1, 2019
LOCATION:
20921 - 20981 Magnolia Street and 8901- 8955 Atlanta Avenue, 92646 (northwest corner of
Magnolia Street and Atlanta Avenue)
Attachments: SUGGESTED FINDINGS AND CONDITIONS OF
APPROVAL.doc
Preliminary Parcel Map.pdf
This agenda item was approved with conditions.
ENTITLEMENT PLAN AMENDMENT NO. 19-001 (OUZO AND FETA OUTDOOR
DINING)
REQUEST:
To amend Condition 2.a of CUP No. 16-041 to modify the hours of
operation and permit the sales, service, and consumption of general
alcohol (ABC Type 47 License) within a 342 sq. ft. proposed outdoor
patio.
LOCATION:
19171 Magnolia St., Suite 1 & 2, 92646 (west side of Magnolia St., south of Garfield Ave.)
Attachments: ATT#1 - EPA 19-001 (OUZO AND FETA OUTDOOR
DINING) FINDINGS
ATT#2 - Plans 2.25.19
Continued to the May 15, 2019, meeting.
CONDITIONAL USE PERMIT NO. 19-006 (KATHY MAY'S CAFE BEER AND WINE)
REQUEST:
To allow the sales, service, and consumption of beer and wine (ABC
Type 41 License) within an existing 2,176 sq. ft. restaurant and 1,248
sq. ft. outdoor patio.
LOCATION:
6622 Lakeview Dr., 92648 (at the terminus of Lakeview Dr., between Edwards St. and
Goldenwest St. - Central Park)
Attachments: ATT#1 - CUP 19-006 (KATHY MAY'S CAFE BEER &
WINE
ATT#2 - PLANS 2.19.19
This agenda item was approved with conditions.
ADJOURNMENT
Page 3 of 5
Zoning Administrator MINUTES May 1, 2019
The next regularly scheduled meeting of the Zoning Administrator is Wednesday, May
15, 2019, at 1:30 PM in Room B-8, Lower Level, Civic Center, 2000 Main Street,
Huntington Beach, California.
Under the provisions of the Huntington Beach Zoning and Subdivision Ordinance,
the action taken by the Zoning Administrator is final unless an appeal is filed to the
Planning Commission by you or by an interested party. Said appeal must be in
writing and must set forth in detail the action and grounds by which the applicant or
interested party deems himself aggrieved. Said appeal must be accompanied by a
filing fee of Three Thousand One Hundred Two Dollars ($3,102.00) if the appeal is
filed by a single family dwelling property owner appealing the decision on his own
property and Four Thousand Two Hundred Eighty-One Dollars ($4281.00) if the
appeal is filed by any other party. The appeal shall be submitted to the Secretary of
the Planning Commission within ten (10) calendar days of the date of the Zoning
Administrator's action or ten (10) working days for a coastal development permit.
INTERNET ACCESS TO THE ZONING ADMINISTRATOR AGENDA AND STAFF
REPORT MATERIAL IS AVAILABLE PRIOR TO ZONING ADMINISTRATOR MEETINGS
AT: https://huntingtonbeach.legistar.com/
Page 4 of 5
Zoning Administrator MINUTES May 1, 2019
MEETING ASSISTANCE NOTICE:
In accordance with the Americans with Disabilities Act, services are available to members
of our community who require special assistance to participate in public meetings. If you
require special assistance, 48-hour prior notification will enable the City to make reasonable
arrangements for an assisted listening device (ALD) for the hearing impaired, American
Sign Language interpreters, a reader during the meeting and/or large print agendas. Please
contact the Community Development Department at (714) 536-5271 for more information, or
request assistance from the staff or Sergeant-at-Arms at the meeting.
Page 5 of 5
ATTACHMENT NO. 1
FINDINGS AND CONDITIONS OF APPROVAL
CONDITIONAL USE PERMIT NO. 19-006
FINDINGS FOR PROJECTS EXEMPT FROM CEQA:
The Zoning Administrator finds that the project will not have any significant effect on the
environment and is exempt from the provisions of the California Environmental Quality Act
(CEQA) pursuant to section 15301 of the CEQA Guidelines, because the project involves
no expansion in the overall floor area of an existing restaurant.
FINDINGS FOR APPROVAL - CONDITIONAL USE PERMIT NO. 19-006:
1. Conditional Use Permit No. 19-006 to allow the sales, service, and consumption of
beer and wine (ABC Type 41 License) within an existing 2,176 sq. ft. restaurant and
1,248 sq. ft. outdoor patio will not be detrimental to the general welfare of persons
working or residing in the vicinity or detrimental to the value of the property and
improvements in the neighborhood because the proposed sales, service and
consumption of beer and wine, as conditioned, will not generate noise, traffic, demand
for parking or other impacts as the use is primarily a restaurant and the sales, service,
and consumption of beer and wine will be an ancillary part of the restaurant use. The
sale, service and consumption of alcohol will occur entirely within the existing
restaurant and 1,248 sq. ft. outdoor patio. The restaurant is located within a public
park (Central Park). The nearest residential use is located approximately 300 ft. to the
west and is buffered by the park, a parking lot, and a public street(Lakeview Dr.). The
entrance of the restaurant and patio is oriented west toward Central Park, away from
residential uses. The sales, service, and consumption of beer and wine is not
permitted in the patio area between the hours of 10:00 PM and 7:00 AM to ensure any
potential impacts to surrounding uses are minimized. As such, impacts to the
residential uses are not anticipated.
2. The granting of Conditional Use Permit No. 19-006 to allow the sales, service, and
consumption of beer and wine (ABC Type 41 License) within an existing 2,176 sq. ft.
restaurant and 1,248 sq. ft. outdoor patio will not adversely affect the General Plan. It
is consistent with the Land Use Element designation of OS-P (Open Space— Park) on
the subject property. In addition, it is consistent with the following objective and policies
of the General Plan:
A. Land Use Element
Goal LU-11: Commercial land uses provide goods and services to meet
regional and local needs.
Policy LU-11.A: Encourage a variety of commercial uses that cater to local and
regional demand to create an environment that meets resident needs and
increases the capture of sales tax revenues.
Policy LU-11.B: Encourage new businesses to locate on existing vacant or
underutilized commercial properties where the properties have good locations
and accessibility.
The request to allow beer and wine sales within an existing 2,176 sq. ft. restaurant and
1,248 sq. ft. outdoor patio provides expanded goods and services to meet the needs
of the community and regional area and will add to the capture of sales tax revenue.
The proposed use is located in an existing restaurant and the consumption of beer
and wine will be an ancillary part of the use. The nearest residential use is located
approximately 300 ft. to the west and is buffered by the park, a parking lot, and a public
street(Lakeview Dr.). The entrance of the restaurant and patio is oriented west toward
Central Park, away from residential uses.
3. The proposed conditional use permit to allow the sales, service, and consumption of
beer and wine (ABC Type 41 License) within an existing 2,176 sq. ft. restaurant and
1,248 sq. ft. outdoor patio will comply with the provisions of the base district and other
applicable provisions in Titles 20-25 of the Huntington Beach Zoning and Subdivision
Ordinance (HBZSO). The proposed eating and drinking establishment is permitted
subject to a Conditional Use Permit within the OS-PR (Open Space — Parks and
Recreation Subdistrict) zoning district pursuant to Section 213.06 of the HBZSO. The
sales, service, and consumption of beer and wine will be an ancillary use of an
established restaurant building that conforms to applicable site development
standards in terms of minimum parking, minimum yard setbacks, minimum
landscaping, and maximum floor area ratio.
CONDITIONS OF APPROVAL - CONDITIONAL USE PERMIT NO. 19-006:
1. The site plan, floor plans, and elevations received and dated February 19, 2019.
2. The use shall comply with the following:
a. The hours of operation shall be limited to the following:
i. Daily (dining room): 7:00 AM — 10:00 PM
ii. Daily (outdoor patio): 7:00 AM — 10:00 PM
b. Prior to sales, service or consumption of alcoholic beverages the business
shall obtain an ABC license authorizing alcohol use in the restaurant. The
business shall be limited to a Type 41 (On sale beer/wine eating place) ABC
License. (PD)
c. To ensure the location maintains a restaurant atmosphere, food service from
the regular menu shall be available from the time the business opens to the
public, until at least one hour prior to the scheduled closing time. (PD)
d. Service of alcoholic beverages for consumption off-site shall not be permitted.
(PD)
e. No packaged sales of alcohol allowed. (PD)
f. No reduced price or promotions of alcoholic beverages shall be allowed after
7:OOPM. (PD)
g. No games or contests requiring or involving the consumption of alcoholic
beverages shall be permitted. (PD)
h. All employees engaged in the sale or service of alcohol shall complete
mandatory Responsible Beverage Service (RBS) training and certification.
This shall be required for new employees within 90 days of being hired and for
existing employees every 12 months. Training shall be provided by ABC or an
ABC approved RBS trainer. Records of the training shall be maintained on-
site for review. (PD)
i. Consumption of alcoholic beverages by on-duty employees and supervisory
personnel is forbidden. (PD)
j. An employee of the establishment must monitor all areas where alcohol is
served. (PD)
k. There shall be no entertainment allowed without a valid Entertainment Permit
issued by the Huntington Beach Police Department. Entertainment which
would require additional parking, or modification of plans dated 2-19-19 would
need approval by The Planning Department and may require a Conditional Use
Permit (CUP) for this specific use. (PD)
I. No dining or consumption of alcoholic beverages shall be permitted in the
outdoor patio areas between the hours of 10:00 PM and 7:00 AM daily. (PD)
m. A sign shall be posted in a conspicuous space at the exit point in the patio
which shall state "NO ALCOHOLIC BEVERAGES BEYOND THIS POINT."
(PD)
n. The patio shall have a physical barrier of no less than 36 inches in height
surrounding the outdoor dining area and designed in a manner that will prohibit
passing of alcohol through the barrier. (PD)
o. Signage, posters, and advertising with "Do Not Drink and Drive"shall be posted
in the business. (PD)
p. There shall be no exterior advertising or sign of any kind or type, including
advertising directed to the exterior from within, promoting or indicating the
availability of alcoholic beverages. Interior displays of alcoholic beverages or
signs which are clearly visible to the exterior shall constitute a violation of this
condition. (PD)
q. All areas where the sales, service, and consumption of alcoholic beverages
will be permitted must be sufficiently illuminated to permit the identification of
patrons. (PD)
r. There must be increased motion detected lighting. (PD)
s. There shall be no window coverings or advertisements that reduce the visibility
inside of the business. This will assist officers in observing crimes in progress.
(PD)
t. The establishment must have a working alarm system. (PD)
u. The establishment must secure alcohol after hours. (PD)
v. The establishment shall employ a video surveillance security system with a
minimum of one-month video library recorded to a DVR or Cloud based
system. The cameras minimum requirements will be: color, digital and able to
record in low light. The business shall ensure all public areas, entrances, exits,
parking areas to the front and adjacent to the business are covered by video
surveillance. Electronic copies of video must be made available to the
Huntington Beach Police Department within 48 hours of request. Digital
recordings shall be made available for viewing on-scene upon request by
police personnel conducting investigations. You are required to have someone
able to operate the system on duty during all business hours. (PD)
w. All owners, employees, representatives, and agents must obey all state, local,
and municipal laws, and conditions of the Conditional Use Permit, Alcoholic
Beverage Control License and any other regulations, provisions, or restrictions
prescribed by a regulatory authority with jurisdiction over the premise at all
times. (PD)
3. CUP No. 19-006 shall become null and void unless exercised within two years of the
date of final approval or such extension of time as may be granted by the Director
pursuant to a written request submitted to the Community Development Department
a minimum 30 days prior to the expiration date.
4. The Development Services Departments and divisions (Building & Safety, Fire,
Planning and Public Works) shall be responsible for ensuring compliance with all
applicable code requirements and conditions of approval. The Director of Community
Development may approve minor amendments to plans and/or conditions of approval
as appropriate based on changed circumstances, new information or other relevant
factors. Any proposed plan/project revisions shall be called out on the plan sets
submitted for building permits. Permits shall not be issued until the Development
Services Departments have reviewed and approved the proposed changes for
conformance with the intent of the Zoning Administrator's action. If the proposed
changes are of a substantial nature, an amendment to the original entitlement
reviewed by the Zoning Administrator may be required pursuant to the provisions of
HBZSO Section 241.18.
INDEMNIFICATION AND HOLD HARMLESS CONDITION:
The owner of the property which is the subject of this project and the project applicant if
different from the property owner, and each of their heirs, successors and assigns, shall
defend, indemnify and hold harmless the City of Huntington Beach and its agents, officers,
and employees from any claim, action or proceedings, liability cost, including attorney's
fees and costs against the City or its agents, officers or employees, to attack, set aside,
void or annul any approval of the City, including but not limited to any approval granted by
the City Council, Planning Commission, or Design Review Board concerning this project.
The City shall promptly notify the applicant of any claim, action or proceeding and should
cooperate fully in the defense thereof.
LEASE AGREEMENT BETWEEN
THE CITY OF HUNTINGTON BEACH
AND KATHY MAY'S RESTAURANT, INC.
THIS AGREEMENT is made and entered into this 15th day of July
2019 , by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of
the State of California (hereinafter referred to as "CITY"), and KATHY MAY'S
RESTAURANT, INC., (hereinafter referred to as "Lessee") together City and Lessee may be
referred to as ("Parties").
WHEREAS, City owns certain real property including a 2,176 square foot free standing
restaurant building generally located in Huntington Beach Central Park West, with an address of
6622 Lakeview Drive, Huntington Beach, CA 92648 (hereinafter referred to as the "Premises")
and Lessee*desires to continue to lease the aforesaid Premises with a new condition regarding
alcohol sales in the manner set forth below.
NOW, THEREFORE, the parties covenant and agree as follows:
SECTION 1. SUPERSEDING OF PRIOR LEASE
This Lease shall supersede and replace any existing lease agreement(s) for the Premises
currently entered into by and between the Parties and all supplemental agreement(s) entered into
by and between the Parties regarding the existing use of the Premises.
SECTION 2. GRANT OF CONCESSION ON THE PREMISES
The Premises are hereby leased for the purpose of operation of a family style
restaurant/food concession with the sale of alcohol. City reserves the right to prohibit the sale of
any item or article, including certain alcoholic beverages which are objectionable or beyond the
scope of the of this Lease. City reserves the right to establish and revise a schedule of maximum
prices for any or all items sold to the public by Lessee on the Premises; provided, however, that
19-7761/207926 Page I of 51
any such schedule of maximum prices established by City shall be reasonable and in accordance
with the best interests of the public, the Lessee, and the City. The restaurant shall be in operation
a minimum of three hundred (300) days during a calendar year. Hours of operation will be from
7:00 a.m. to 9:00 p.m. These times may be adjusted seasonally with prior approval of City.
City, pursuant to the terms of this Lease, grants to Lessee for the purposes stated herein,
the right, privilege and duty to equip, operate and maintain a concession open to the public
located on the Premises (hereinafter sometimes referred to as the "Concession"). Lessee shall
not use the Premises for any other purpose or business. A map depicting the Premises is set forth
in Exhibit "A", which is attached hereto and incorporated herein by this reference. This Lease
is not intended to confer third-party beneficiary status to anyone.
SECTION 3. SALE OF ALCOHOLIC BEVERAGES:
The Lessee shall obtain a Type 41 License from the State of California Department of
Alcoholic Beverage Control (the "Liquor License") permitting Lessee throughout the Lease
Term to serve beer and wine for on-premises consumption in the Premises seven (7) days per
week (until at least 9:00 P.M.), subject to and in accordance with all applicable provisions of
federal, state, and local laws and this Lease. The Lessee shall use all reasonable efforts and
diligence to maintain the Liquor License in full force and effect and good standing. Lessee's
ability to obtain the Liquor License for the Premises shall be a condition precedent to Lessee
selling beer and wine. As property owner, the City will be the applicant or co-applicant for all
alcohol related City permits, including a conditional use permit. Any such discretionary permit
shall not run with the land and shall not provide Lessee a property right in said permit and related
operations. Lessee shall pay all costs associated with obtaining said permit(s). City will not be
the applicant for non-City permits including ABC licensing.
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Upon the receipt of all governmental approvals, including the Liquor License, and City
land use approvals, lessee may sell alcoholic beverages on the Premises subject to the following
conditions:
(a) Lessee is not in default of any of the provisions of this Lease including timely
payments of all amounts due pursuant to this Lease;
(b) Lessee complies with all conditions included in the governmental approvals including
conditions imposed on the Liquor License, City land use and/or any other conditions imposed
upon a license or permit issued by government agency;
(c) In addition to, or in conjunction with any restrictions placed on any discretionary
permit, the following operational standards shall be adhered to as a material terms
of this Lease: No sale or consumption of alcohol outside the premises; Lessee
shall not sell alcoholic beverages for retail purposes; Lessee shall provide
security for the Premises, alcohol dispensing training for employees; Lessee shall
provide no happy hour beverage promotions; Lessee shall provide exterior
lighting as may be required under a conditional use permit. Receipts must for all
sales, including alcohol sales shall be maintained by Lessee and provided to the
City upon request.
SECTION 4. RESERVATIONS ENCUMBRANCES AND RIGHTS-OF-WAY
(a) City expressly reserves all natural resources in, on, or two hundred fifty (250) feet
under the Premises, including, without limitation, oil, coal, natural gas and other
hydrocarbons, minerals, aggregates, timber and other geothermal resources, as
well as the right to grant leases or other contractual arrangements in and over the
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Premises for the extraction of such natural resources. However, such leasing or
other arrangement shall be neither inconsistent nor incompatible with the rights or
privileges of Lessee under this Lease.
(b) City expressly reserves a right to enter upon the Premises with as much advance
written, verbal or electronic notice as possible to Lessee for any reason associated
with public health, safety or welfare, or for the protection of life, limb or property.
In all other cases unless otherwise specifically set forth herein, City reserves the
right for such entry but City shall give Lessee at least twenty-four (24) hours
advance written, verbal or electronic notice. City shall have a right of reasonable
access to the Premises across Lessee owned, controlled or occupied lands adjacent
to the Premises, if any, for any purpose associated with this Lease.
(c) City expressly reserves the right to lease, convey, or encumber the Premises, in
whole or in part, for any purpose not inconsistent or incompatible with the rights
or privileges of Lessee under this Lease. In addition, Lessee agrees to subordinate
the Lease to any existing or future City financing regarding the Premises or any
portion thereof. Lessee also agrees to cooperate and provide any documentation
necessary for City to obtain any such financing.
(d) This Lease is subject to pre-existing contracts, leases, licenses, easements,
encumbrances and claims affecting the Premises and it is made without warranty
by City of title, condition or fitness of the land for the stated or intended use.
SECTION 5. TIME OF ESSENCE
Time shall be of the essence of this Lease and each and all of its terms, covenants or
conditions in which performance is a factor.
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SECTION 6. TERM
This lease shall be for a term of ten (10) years commencing at 12:01 A.M. on the 15th
day of July , 2019 , and ending at 12:01 A.M. on July 15th 2029
unless sooner terminated as herein provided.
SECTION 7. CONDITIONS OF PREMISES AS IS
The taking of possession of the Premises by Lessee shall, in itself, constitute
acknowledgment that the Premises are in good and tenantable condition. Upon taking possession
of the Premises, Lessee agrees to accept the Premises in their presently existing condition, "as
is", and agrees that City shall not be obligated to make any alterations, additions or betterments
thereto.
SECTION 8. DURATION OF PUBLIC FACILITIES
By entering into this Lease, City makes no stipulation as to the type, size, location or
duration of public facilities (excluding the Premises), including, without limitation, any City
parking lots to be maintained on property owned, controlled or occupied by City.
SECTION 9. ADDITIONS ALTERATIONS AND REMOVAL
(a) No modifications, alterations or additions to the Premises, including, without
limitation, construction of Improvements or changes to structural design,
landscape design, or interior or exterior furnishings, shall be constructed or made
by Lessee without Lessee first obtaining the prior written approval of City, which
will not be unreasonably withheld.
(b) Except as provided under this Lease, no alteration or removal of existing
Improvements on or natural features of the Premises shall be undertaken without
Lessee first obtaining the prior written approval of City.
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(c) Lessee's obligation to obtain City's prior written approval is separate and
independent of Lessee's obligation to obtain any permits from City, such as,
without limitation, a building permit.
SECTION 10. CITY'S CONTRACT ADMINISTRATOR
City's Deputy Director of Economic Development, or his or her designee, shall be City's
Contract Administrator for this Lease with the authority to act on behalf of City for the purposes
of this Lease, and all City approvals and notices required to be given herein to City shall be so
directed and addressed.
SECTION 11. RENT
Upon issuance of a Certificate of Occupancy Lessee agrees to pay to City as rent (the
"Rent") for the use and occupancy of the Premise a minimum base rent of $1,875 a month. In
those months where the percentage of"Gross Sales" as defined in Section 12 below exceeds the
monthly base rent, Lessee shall pay the percentage rent based on the following thresholds instead
of the monthly base Rent:
$0 - $100,000.00 of Gross Sales = 7.5%;
$100,000.01 - $150,000.00 of Gross Sales = 9.5%;
Over $150,000.00 of Gross Sales = 11.5%.
Commencing on July 1 2024, in those months where the percentage of"Gross Sales" as
defined in Section 12, exceeds the monthly base rent, Lessee shall pay the percentage rent based
on the following thresholds:
$0 - $100,000.00 of Gross Sales = 8.0%;
$100,000.01 - $150,000.00 of Gross Sales = 10.0%;
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Over $150,000.00 of Gross Sales = 11.5%.
Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711,
Huntington Beach, California, 92648, or at such other place or places as City may from time-to-
time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be
received by the City Treasurer within ten (10) calendar days after the end of the month for which
the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or
holiday.
SECTION 11. LATE CHARGE AND PENALTY
If the Rent is not received by the City Treasurer within ten (10) calendar days after the
end of the month for which the Rent is being paid, or the next business day if the twentieth day
falls on a weekend or holiday, Lessee 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 '/2%) penalty per month shall be
added for each month the Rent is due but unpaid. With respect to any other payments required
by Lessee, a one and a half percent (1 ''/2%) penalty per month shall be added for each month
such payment hereunder is due but unpaid.
SECTION 12. GROSS SALES DEFINED
For the purpose of this Lease, the term "Gross Sales" shall mean the total price of all
merchandise, food and beverages, including alcoholic beverages, or services sold or rendered, or
equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee,
including, without limitation, its agents or sublessees (collectively or individually, "Lessee
Party(ies)"), whether wholesale or retail, whether for cash or on credit, and if on credit whether
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or not paid, and whether in exchange for any other product, commodity, service, commercial
paper or forbearance, and shall include, without limitation, the following:
(a) All revenues, receipts, commissions or proceeds from on-line sales by Lessee,
including group rental of the Premises and/or from all public telephones,
vending, weighing and all other machines owned, operated, or leased to or by
Lessee Party(ies) in, on, or from the Premises;
(b) All revenues, receipts, commissions or proceeds from sales based on orders
solicited or taken, in, on, or from the Premises for merchandise, food and
beverages, including alcoholic beverages or services to be delivered or rendered
off, or from sources outside, the Premises, including, without limitation, all orders
taken in, on, or from the Premises although the orders may be filled elsewhere;
(c) All revenues, receipts, commissions or proceeds from the renting of equipment of
any kind in, on, or from the Premises; and
(d) All revenues, receipts, commissions or proceeds generated from offsite but
delivered through the Concession.
(e) All revenues, receipts, commissions or proceeds made by Lessee Party(ies) or
their employees or others acting on their behalf for the rendition of services of any
kind whatsoever, made in, on, or from the Premises.
(f) All other revenues, receipts, commissions or proceeds generated by, arising or
derived whatsoever from the use of the Premises or derived whatsoever from any
business conducted in, on, or from the Premises.
For purposes of computing the Gross Sales figure on which to calculate the Rent, the
amount of Gross Sales shall start over at zero dollars on January 1 of each year. If the Lease
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commences on any date other than January 1, the Gross Sales calculation begins from such
commencement date and runs through December 31 of such Lease commencement year.
SECTION 13. GROSS SALES EXCLUSIONS
Gross Sales shall not include the following items, and Lessee may deduct such items
from Gross Sales to the extent they have been included therein or have been included in a prior
computation of Gross Sales on which the Rent has been paid under this Lease to City:
(a) Any sales, excise or other taxes otherwise includable in Gross Sales and which
become part of the total price of merchandise, food and beverages, or services
sold or rendered, or equipment rented, in, on, or from the Premises where Lessee
must account for and remit the taxes to the government entity or entities which
impose them, but only if such taxes are added to the total price and collected from
customers;
(b) Any transfer of trade inventory from the Premises to the manufacturer or supplier
from whom it was obtained by Lessee;
(c) Sales of Trade Fixtures (as defined in Section 51 below);
(d) Sums and credits received in the settlement of claims for loss of or damage to
trade inventory or Trade Fixtures; and
(e) Any sales resulting in a cash or credit refund to a customer in the ordinary course
of business.
SECTION 14. BOOKS AND RECORDS
Lessee shall keep true and accurate books and records showing all of its business
transactions in separate records of account for the Concession in a manner acceptable to City,
and City and/or its designated representatives shall have the right, at all reasonable times, to
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inspect such books and records including, without limitation, State of California sales or use tax
returns or other State return records, and Lessee hereby agrees that all such records and
instruments shall promptly be delivered and made available to City and/or its designated
representatives within thirty (30) days of receiving written request therefor. Lessee shall furnish
to City and/or its designated representatives copies of its quarterly California sales and use tax
returns at the time each is filed with the State of California.
The books and records shall show the total amount of Gross Sales made each calendar
month in, on, or from the Premises and any exclusions listed in Section 13 above. All sales and
charges shall be recorded by means of cash registers which display the amount of the transaction
certifying the amount recorded. The register shall be equipped with devices which log in daily
sales totals and which shall record on tapes the transaction numbers and sales details. At the end
of each day the tape shall record the total sales for that day. Lessee agrees to maintain on the
Premises, or another location subject to the prior written approval of City, all records, books of
account and cash register tapes, showing, or in any way pertaining to the Gross Sales made in,
on, or from the Premises during such calendar month, including, without limitation, State of
California sales or use tax returns or other State tax returns, for a period of five (5) years
following the close of each calendar month.
SECTION 15. STATEMENT OF GROSS SALES/AUDIT
At the time specified in Section 10 of this Lease for the payment of the Rent, Lessee shall
deliver to City a true and accurate statement signed by Lessee or by an authorized employee of
Lessee showing the total Gross Sales and any exclusions listed in Section 13 above made during
the preceding calendar month and the amount of the Rent then being paid calculated on such
Gross Sales pursuant to this Lease. The acceptance by City of any monies paid to City by Lessee
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as the Rent, as shown by any statement furnished by Lessee, shall not be construed as an
admission of the accuracy of the statement, or of the sufficiency of the amount of the Rent
payment, and City shall be entitled to review the adequacy of such payment as set forth herein.
By the end of each January, Lessee shall deliver to City a year-end statement showing the total
amount of Gross Sales made in, on, or from the Premises in each month of the preceding year,
the total of any exclusions, the total Rent paid to City for each of those months, all with year-end
totals. City may at any time within three (3) years after receiving the year-end statement, at its
sole cost and expense, cause all records, books of account and cash register tapes for the year
purportedly covered by the statement, to be audited by City or an accountant selected by City.
Lessee shall, within thirty (30) days of receiving written notice of City's desire for such an audit,
deliver and make available all such records, books of account and cash register tapes to City or
its designated representative for City's use in the audit and/or for copying. If the audit discloses
that Gross Sales were understated and/or exclusions overstated, Lessee shall immediately pay the
additional Rent, together with a penalty thereon from the date it was due at the penalty rate set
forth in Section 11 above. Furthermore, Lessee shall promptly on demand reimburse City for the
full cost and expense of the audit should the audit disclose that the questioned year-end statement
understated Gross Sales (including an overstatement of exclusions) or the Rent by any amount
greater than Two Hundred Fifty Dollars ($250.00). City further reserves the right to examine
and audit all such records, books of account and cash register tapes at any time during the three
(3) year period following the expiration or termination of this Lease. In addition, City shall have
the right to enter upon the Premises during business hours and with two (2) hours advance
written, verbal or electronic notice to Lessee to perform any audit or inspection function with
respect to this Lease.
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Lessee, its bookkeeper and/or accountant shall respond to all questions and inquiries of
City with respect to the books, records, statements and other documentation being examined, and
shall promptly provide other further documentation as may be required by City. City is entitled
to take statements by deposition under oath of Lessee, its officers, bookkeepers and/or
accountants or any person who prepared the books, records, statements and other documentation
required to be provided by Lessee under this Lease.
SECTION 16. SECURITY DEPOSIT
Upon execution hereof, Lessee shall pay and/or maintain at all times during the entire
term of this Lease or any renewals or extensions thereof or during any holdover period, a
security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars
($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under
the Lease, including, without limitation, the repair and maintenance of the Premises as provided
herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of
deposit (the "Cl)") or savings account to City, and shall be provided to the City Treasurer. The
form of any such security deposit shall be approved by the City Attorney and the City Treasurer.
No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a
CD or savings account and shall be paid to Lessee under the terms of the CD or savings account.
Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has
the records of each active deposit account.
SECTION 17. USE OF DRINK SPONSOR
Lessee shall comply with any exclusivity agreement which the City may have with a
drink sponsor. This exclusivity shall not apply to third-party rentals that bring their own drink
products.
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SECTION 18. QUALITY OF SALES, RENTALS AND SERVICES
Lessee, at its sole cost and expense, shall equip, operate, manage and maintain the
Premises and Concession and shall keep the same equipped and maintained in a manner
acceptable to City during the entire term of this Lease or any renewals or extensions thereof or
during any holdover period. It is the intent of City that the Concession's services be provided in
a manner to meet the needs of the visiting public, and should City deem the Concession's hours
of operation and/or food, merchandise, services or rentals inadequate to meet such needs, City
may require Lessee to make such changes requested by City in writing. Lessee shall not use or
permit the Premises to be used, in whole or in part, during the entire term of this Lease or any
renewals or extensions thereof or during any holdover period for any purpose other than as
herein set forth, without the prior written consent of City.
Except as permitted in advance in writing by City, all foods and beverages, including
alcoholic beverages, shall be sold in disposable paper or plastic containers. No pull-top cans or
styrofoam containers are to be vended or dispensed from the Premises unless pre-approved in
writing by City. Lessee, wherever feasible, shall eliminate the use of non-recyclable containers
and plastics. City may from time to time review the items sold and containers or utensils used or
dispensed by Lessee. City reserves the right to prohibit the sale or use of non-recyclable
containers or plastics.
City in its sole discretion reserves the right to prohibit Lessee's sale, provision or rental
of any item or service rendered or performed, which it deems objectionable or offensive, beyond
the scope deemed necessary for proper service to the public, inappropriate for sale, provision or
rental by the Concession, or of inferior quality.
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SECTION 19. INDEMNIFICATION, DEFENSE AND HOLD HARMLESS AGREEMENT
Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers,
elected or appointed officials, employees, agents and volunteers from and against any and all
claims, damages, losses, expenses, judgments, demands and defense costs (including, without
limitation, costs and fees of litigation (including arbitration) of every nature or liability of any
kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by
Lessee, its officers, employees or agents, or (2) the death or injury of any person or the damage
to property caused by a condition of the Premises, or (3) the death or injury of any person or the
damage to property caused by any act or omission of Lessee, its officers, employees or agents, or
(4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's
agents and/or sublessees, if any) performance of this Lease or its failure to comply with any of its
obligations contained in this Lease by Lessee, its officers, agents or employees except such loss
or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall
hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of
Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except
such loss or damage which was caused by the sole negligence or willful misconduct of City.
Lessee will conduct all defense at its sole cost and expense and City shall approve selection of
Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any
insurance policies are applicable. The policy limits do not act as limitation upon the amount of
indemnification to be provided by Lessee.
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SECTION 20. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY
INSURANCE
Lessee acknowledges awareness of Section 3700 et seq. of the California Labor Code,
which requires every employer to be insured against liability for workers' compensation. Lessee
covenants that it shall comply with such provisions prior to the commencement of this Lease.
Lessee shall obtain and furnish to City workers' compensation and employers' liability insurance
in amounts not less than the State statutory limits. Lessee shall require all sublessees and
contractors to provide such workers' compensation and employers' liability insurance for all of the
sublessees' and contractors' employees. Lessee shall furnish to City a certificate of waiver of
subrogation under the terms of the workers' compensation and employers' liability insurance and
Lessee shall similarly require all sublessees and contractors to waive subrogation.
SECTION 21. GENERAL PUBLIC LIABILITY INSURANCE
In addition to the workers' compensation and employers' liability insurance and Lessee's
covenant to defend, hold harmless and indemnify City, Lessee shall obtain and furnish to City, a
policy of general public liability insurance, including motor vehicle coverage against any and all
claims arising out of or in connection with the Premises. This policy shall indemnify Lessee, its
officers, employees and agents, while acting within the scope of their duties, against any and all
claims arising out of or in connection with the Premises, and shall provide coverage in not less
than the following amount: combined single limit bodily injury and property damage, including
products/completed operations liability and blanket contractual liability, of One Million Dollars
($1,000,000.00) per occurrence. If coverage is provided under a form which includes a
designated general aggregate limit, the aggregate limit must be no less than One Million Dollars
($2,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed
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officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide
that any other insurance coverage which may be applicable to the Lease shall be deemed excess
coverage and that Lessee's insurance shall be primary and non-contributory.
Under no circumstances shall said above-mentioned insurance contain a self-insured
retention, or a"deductible" or any other similar form of limitation on the required coverage.
SECTION 22. PROPERTY INSURANCE
Lessee shall provide before commencement of this Lease and shall obtain and furnish to
City, at Lessee's sole cost and expense, property and fire insurance with extended coverage
endorsements thereon, by a company acceptable to City authorized to conduct insurance business
in California, in an amount insuring for the full insurable value of all Improvements, Trade
Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in
or on the Premises against damage or destruction by fire, theft or the elements. This policy shall
contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a
coinsurance penalty provision. The policy shall also contain an endorsement naming City as an
Additional Insured. The policy shall contain a special endorsement that such proceeds shall be
used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property
whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed; and
if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal
property whether or not owned or leased by Lessee, and trade inventory, but only to the extent
the insurance proceeds specifically cover those items) shall be paid to City. The policy shall also
contain a special endorsement that if the Premises are so destroyed triggering the parties' ability
to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate
the Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade
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Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but
only to the extent the insurance proceeds specifically cover those items) shall be paid to City.
The proceeds of any such insurance payable to City may be used, in the sole discretion of City,
for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as
City sees fit.
This policy shall also contain the following endorsements:
(a) The insurer shall not cancel or reduce the insured's coverage without (30)
days prior written notice to City;
(b) City shall not be responsible for premiums or assessments on the policy.
A complete and signed certificate of insurance with all endorsements required by this
Section shall be filed with City prior to the execution of this Lease. At least thirty (30) days
prior to the expiration or termination of any such policy, a signed and complete certificate of
insurance showing that coverage has been renewed shall be filed with City.
SECTION 23. LIQUOR LIABILITY INSURANCE
Tenant shall provide, keep and maintain in full force and effect liquor liability insurance
in the amount of not less than One Million Dollars ($1,000,000.00).
SECTION 24. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY
AND PROPERTY INSURANCE
Not more frequently than once every two (2) years, if, in the sole opinion of City, the
amount and/or scope of general public liability insurance in Section 21 above, liquor liability
insurance coverage in Section 23, and/or property insurance coverage in Section 22 above at that
time is not adequate, Lessee shall increase the insurance coverage as reasonably required by
City.
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SECTION 25. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED
ENDORSEMENTS
Prior to commencement of this Lease, Lessee shall furnish to City certificates of
insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages
as required by this Lease; these certificates shall:
(a) provide the name and policy number of each carrier and policy;
(b) shall state that the policy is currently in force; and
(c) shall promise to provide that such policies shall not be canceled or
modified without thirty (30) days' prior written notice of City; however ten (10)
days' prior written notice in the event of cancellation for nonpayment of
premium, which 10-day notice provision shall not apply to property insurance in
Section 22 above.
Lessee shall maintain the foregoing insurance coverages in force during the entire term of
the Lease or any renewals or extensions thereof or during any holdover period.
The requirement for carrying the foregoing insurance coverages shall not derogate from
Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease. City
or its representatives shall at all times have the right to demand the original or a copy of any or
all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on
all insurance hereinabove required.
SECTION 26. INSURANCE HAZARDS
Lessee shall not commit or permit the commission of any acts on the Premises nor use or
permit the use of the Premises in any manner that will increase the existing rates for, or cause the
cancellation of any liability, property, or other insurance policy for the Premises or required by
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this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any
insurance carrier providing any insurance policy for the Premises or required by this Lease
necessary for the continued maintenance of these policies at reasonable rates.
SECTION 27. MAINTENANCE OF PREMISES
City's maintenance responsibilities of the Premises shall be limited to maintaining all
sewers and drain lines, and roofs. Except as set forth in the preceding sentence, Lessee agrees to
maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the
entire term of this Lease or any renewals or extensions thereof or during any holdover period,
pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet
setting forth the City's maintenance checklist is attached as Exhibit "B", and incorporated
herein by this reference. Except as provided above, Lessee, at its sole cost and expense, shall
perform any maintenance and repairs including, without limitation, facility maintenance and
landscape maintenance on the Premises.
Lessee's obligation includes, without limitation, maintaining and operating the Premises
and adjacent areas to a distance of not more than fifty (50) feet of the lease line area in a clean,
safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in
compliance with any and all present and future laws, general rules or regulations of any
governmental authority now, or at any time during the entire term of this Lease or any renewals
or extensions thereof or during any holdover period, in force, relating to sanitation or public
health, safety or welfare, or for the protection of life, limb or property; and Lessee shall at all
times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee,
at its sole cost and expense, shall remedy without delay any defective, dangerous or unsanitary
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condition(s) caused by Lessee or anyone related thereto. Provided, however, that Lessee shall
have no obligation to repair or maintain sewer lines or respond to sewer leaks.
Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three
(3) years, unless City determines in its sole discretion that such work shall be done on a more
frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant
paint no less than once every other year. Any and all graffiti on the Premises shall be removed
by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice
thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from
City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within
forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City.
Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and
with or without notice from City, shall repair and/or replace all damage or destruction to the
Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen
(14) days after the date such damage or destruction occurred. Lessee, at its sole cost and
expense, shall repair and/or replace all other damage or destruction to the Premises, regardless of
cause, except by fault of City.
Lessee shall comply with all written notices served by City with regard to the care and
maintenance of the Premises. Any written notice hereunder shall specify the work to be done
and the period of time deemed to be reasonably necessary for completion of such work. Should
Lessee fail to commence making the necessary repairs within seven (7) days after receiving such
notice, or within twenty-four (24) hours of the glass becoming broken in the case of broken
glass, or fail to diligently proceed to complete the necessary repairs within the period of time
reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming
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broken in the case of broken glass, or within the forty-eight (48) hour time period for removing
graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction
occurred, City shall proceed to cause the required work to be performed, and Lessee shall
promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on
such costs at the penalty rate set forth in Section 11 above from the date the costs were incurred
by City to the date they are reimbursed to City by Lessee.
Lessee hereby expressly waives the right to make repairs at the expense of City and the
benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating
thereto.
SECTION 28. RENT CREDIT
City in its sole discretion may provide Lessee a rent credit if Lessee undertakes
(1) any repair or maintenance obligation of City under this Lease, (2) any work including any
Lessee improvements the City in its sole discretion deems necessary and appropriate, (3) Lessee
submits to the City a set of approved construction plans and schedule of performance regarding
the completion of tenant improvements. Prior to Lessee undertaking any such work, City must
agree in writing to the amount of the rent credit as well as and procedures for completion of the
work to be done by Lessee and the cost of such work.
City and Lessee acknowledge that the Lessee owes the City the amount of Twenty One
Thousand Two Hundred Twenty Four Dollars and Sixty Cents ($21,224.60). Lessee and City
have a agreed to a payment plan (the "Payment Plan") in which the Lessee shall make twenty-
three (23) monthly installments of $922.80. The Payment Plan shall paid in accordance with
Section 11 of this Lease and is subject to penalties. The Lessee also acknowledges that failure to
abide by the Payment Plan as set forth in this Lease will result in a material default of this Lease
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as set forth in Section 36 and the City is entitled to remedies subject to Sections 38 and 39 of said
Lease.
SECTION 29. DAMAGE, DESTRUCTION OR NUISANCE
Lessee shall not commit or permit the commission by others of any damage or
destruction of, on, or to the Premises and/or Concession. Lessee shall not maintain, commit or
permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section
3480 of the California Civil Code on the Premises; and Lessee shall not use or permit the use of
the Premises for any unlawful purpose.
SECTION 30. TAXES
This Lease may create a possessory interest in property, which is subject to taxation. In
the event that such possessory interest is created, Lessee agrees to be subject to the payment of
and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay,
at its sole cost and expense, before they become delinquent all other lawful taxes, assessments or
charges, which at any time may be levied by any governmental agency including, without
limitation, the State, County, City or any tax or assessment levying body upon any interest in this
Lease, or any possessory right which Lessee may have in or to the Premises, by reason of
Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on
Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon
request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment.
Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes
due a government agency.
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SECTION 31. PAYMENT OF OBLIGATIONS
Lessee shall promptly pay, at its sole cost and expense, before they become delinquent,
any and all bills, debts, liabilities and obligations incurred by Lessee in connection with Lessee's
occupation and use of the Premises and/or operation of the Concession. Upon request, Lessee
shall promptly furnish to City satisfactory evidence establishing such payment.
SECTION 32. UTILITIES AND SERVICES
Lessee shall be responsible for the payment of all utility charges, including, without
limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all
necessary refuse and garbage containers and the removal and disposal of all rubbish, refuse and
garbage resulting from the operation of the Premises and/or the Concession. All such rubbish,
refuse and garbage removed shall be disposed of in accordance with applicable laws and local
ordinances. Pursuant to Health Department regulations, Lessee must maintain an active refuse
account at all times for the duration of this Agreement. All trash containers and/or trash bins
shall be adequately screened and located to the satisfaction of City. For the purposes of this
Section, sewage disposal shall be construed as a utility. All such charges shall be paid by Lessee
directly to the provider of the service and shall be paid as they become due and payable. Upon
request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment.
SECTION 33. BUSINESS LICENSE
Lessee shall maintain a business license from City during the entire term of this Lease or
any renewals or extensions thereof or during any holdover period.
SECTION 34. SIGNS ADVERTISING AND APPROVAL OF NAME
Lessee follow all entitlement processes for all signage requests. However, City shall have
the right to approve in its sole discretion and at any time require Lessee to change or remove
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signs, names, placards, decorations or advertising placed on, or inscribed, painted or affixed
upon the Premises. Should City approve of any sign, name, placard, decoration or advertising,
Lessee shall maintain the same at all times during the entire term of this Lease or any renewals or
extensions thereof or during any holdover period in good appearance and repair. All signs,
names, placards, decorations or advertising must comply with all requirements of any
governmental authority with jurisdiction.
SECTION 35. NO ASSIGNING SUBLEASING OR ENCUMBERING (alcohol)
(a) Prohibition of Assigm-nent. The parties acknowledge that City is entering into
the Lease in reliance upon the experience and abilities of Lessee and its
principals. Consequently, Lessee shall not voluntarily assign, encumber or
otherwise transfer its interest in the Lease or in the Premises, or sublease all or
any part of the Premises, or allow any other person or entity (except Lessee's
authorized representatives) to occupy or use all or any part of the Premises
without the prior written consent of City, which consent may be withheld at the
City's sole discretion. Provided, however, that City's consent shall not relieve
Lessee from any and all of its obligations, liabilities, duties or responsibilities
under this Lease. Any assignment, encumbrance, occupation or use, sublease or
other transfer without such consent shall be voidable and, at City's sole discretion,
shall constitute a material breach of this Lease.
(b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation
or use, sublease or other transfer is subject in part to Lessee providing City with
evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier
or user, sublessee or other transferee has suitable financial strength, experience
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and character for operation and control of the Premises and the Concession and
that the use of the Premises by the proposed assignee, encumbrancer, occupier or
user, sublessee or other transferee is consistent with that specified herein, and is
commercially reasonable. Any proposed assignee, encumbrancer, occupier or
user, sublessee or other transferee shall agree to abide by the terms and conditions
of the Lease including, without limitation, all the obligations, liabilities, duties
and responsibilities of Lessee, and other conditions imposed upon it pursuant to
law. An approval by City to one assignment, encumbrance, occupation or use,
sublease or other transfer shall not be deemed to be an approval to any other
assignment, encumbrance, occupation or use, sublease or other transfer.
SECTION 36. TERMS BINDING ON SUCCESSORS
All the terms, covenants and conditions of this Lease shall inure to the benefit of and be
binding upon the parties and their successors, including, without limitation, their assignees,
encumbrancers, occupiers or users, sublessees or other transferees. The provisions of this
Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against
assignments, encumbrances, occupations or uses, subleases or other transfers hereinbefore set
forth, or (2) City's consent thereto. If more than one lessee is a party to this Lease, the
obligations of the lessees shall be joint and several. Even if City's consent is not required,
Lessee shall immediately provide City with written notice of any, assignment, encumbrance,
occupation or use, sublease or other transfer.
SECTION 37. DEFAULT
The occurrence of any one or more of the following events shall constitute a material
default and breach ("Default") of this Lease by Lessee:
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(a) Lessee's failure to make any payment of the Rent or other payment required to be
made by Lessee at the time required for payment under this Lease.
(b) Lessee's failure to obtain or maintain the insurances and/or the security deposit as
required under this Lease.
(c) Lessee's vacating or abandonment of the Premises during the entire term of this
Lease or any renewals or extensions thereof or during any holdover period.
Closure of the Concession for more than a combined total of one hundred eighty
(180) days in a calendar year, minus any days of closure of the Concession caused
by City, shall be deemed an abandonment of the Premises.
(d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless
Agreement), Section 35 (No Assigning, Subleasing or Encumbering), Section 48
(Hazardous Substances), Section 49 (Nondiscrimination), Section 50
(Entertainment Prohibited), Section 63 (Conflict of Interest) or Section 65
(Compliance with Laws).
(e) The insolvency of Lessee as evidenced by a receiver being appointed to take
possession of all or substantially all of Lessee's assets located at or on the
Premises or of Lessee's interest in this Lease, or the making by Lessee of a
general arrangement or assignment for the benefit of creditors, or Lessee's filing a
petition in bankruptcy, whether voluntary or involuntary, or the attachment,
execution or the judicial seizure of substantially all of Lessee's assets located at or
on the Premises or of Lessee's interest in the Lease.
(f) Lessee's failure to observe or perform any other term, covenant, obligation, duty,
responsibility or condition of this Lease to be observed or performed by Lessee
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when such failure shall continue for a period of thirty (30) days after City's giving
written notice to Lessee, or such earlier period if specifically set forth in this
Lease; however, if the nature of such failure is such that more than thirty (30)
days are reasonably required for its cure, then Lessee shall not be deemed to be in
Default if Lessee notifies City of the length of the additional time required to cure
and receives City's written approval of the additional time required, which
approval will not be unreasonably withheld, and commences such cure within
such thirty (30) day period and diligently proceeds with such cure to completion
during such additional time period approved by City.
SECTION 38. REMEDIES
(a) Cumulative Nature of Remedies. In the event of any Default by Lessee, City shall
have the remedies described in this Section in addition to all other rights and
remedies provided by law or equity, to which City may resort cumulatively or in
the alternative:
(1) Reentry without Termination. City may at City's sole discretion reenter
the Premises, and, without terminating the Lease, at any time and from
time to time relet the Premises or any part or parts of them for the account
and in the name of Lessee or otherwise. Any reletting may be for the
remainder of the term or for a longer or shorter period. City may in City's
sole discretion eject all persons or eject some and not others or eject none.
In addition, City may in its sole discretion remove some or all of the Trade
Fixtures, personal property and trade inventory from the Premises. City
may store such removed Trade Fixtures, personal property and trade
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inventory in a public warehouse or other location at the sole cost, expense
and risk of Lessee, and for the account of and in the name of Lessee. City
shall apply all rents from reletting as follows: first, to the payment of
reasonable expenses (including brokers' commissions) paid or incurred by
or on behalf of City in recovering possession, placing the Premises in
good condition, and preparing or altering the Premises for reletting;
second, to the reasonable expense of securing new subtenants; third, to the
fulfillment of Lessee's covenants to the end of the term. City may execute
any leases or subleases made under this provision either in City's name or
in Lessee's name and City shall be entitled to all rents from the use,
operation or occupancy of the Premises. Lessee shall nevertheless pay to
City on the dates specified in this Lease the equivalent of all sums
required of Lessee under this Lease, plus City's expenses, less the
proceeds of any reletting or attornment.
(2) Termination. In the event of a Default by Lessee, City may at City's sole
discretion terminate this Lease by giving Lessee written notice of
termination. In the event City terminates this Lease, City may recover
possession of the Premises (which Lessee shall immediately surrender and
vacate upon demand) and remove all persons therefrom, and Lessee shall
comply with, without limitation, Sections 57 and 58 below. City also shall
be entitled to recover as damages all of the following:
(A) The worth at the time of the award of any unpaid Rent or other
charges which have been earned at the time of termination;
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(B) The worth at the time of the award of the amount by which the
unpaid Rent (each month's Rent would be calculated as the
average Rent for that same month in the preceding years, or if
Lessee did own/operate the Concession in the preceding years,
then each month's Rent would be calculated as the average of all
months Lessee owned/operated the Concession) and other charges
which would have been earned after termination until the time of
the award exceeds the amount of the loss of such rental and other
charges that Lessee proves could have been reasonably avoided;
(C) The worth at the time of the award of the amount by which the
unpaid Rent (each month's Rent would be calculated as the
average Rent for that same month in the preceding years, or if
Lessee did not own/operate the Concession in the preceding years,
then each month's Rent would be calculated as the average of all
months Lessee owned/operated the Concession) and other charges
for the balance of the term after the time of the award exceeds the
amount of the loss of such rental and other charges that Lessee
proves could have been reasonably avoided;
(D) Any other amount necessary to compensate City for the detriment
proximately caused by Lessee's failure to perform its obligations,
liabilities, duties or responsibilities under this Lease; and
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(E) At City's sole discretion, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by
applicable California law.
As used in Sections 38(a)(2)(A) and (B) above, the "worth at the time of the
award" shall be computed by allowing interest at the rate of twelve percent (12%) per
annum. As used in Section 38(a)(2)(C) above, the "worth at the time of the award" shall
be computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award, plus one percent (1%). The amount
recoverable by City pursuant to Section 38(a)(2)(D) above shall include, without
limitation, any costs or expenses incurred by City in maintaining or preserving the
Premises after such Default.
(3) Use of Personal Property. City may at City's sole discretion use the Trade
Fixtures, personnel property and/or trade inventory located on, about or
appurtenant to the Premises without compensation and without liability for
use or damage, or store them in a public warehouse or other location at the
sole cost, expense and risk of Lessee, and for the account of and in the
name of Lessee.
(b) Election of Remedy. The election of one remedy for any one item shall not
foreclose an election of any other remedy for another item or for the same item at
a later time.
(c) City's Right to Cure Lessee's Default. Upon continuance of any Default, City
may in its sole discretion, but is not obligated to, cure such Default at Lessee's
sole cost and expense. If City at any time, by reason of such Default by Lessee,
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pays any sum or does any act, the sum paid by City plus the reasonable cost of
performing such act, together with a penalty thereon at the penalty rate set forth in
Section 11 above from the date the costs were incurred or the act performed by
City to the date they are reimbursed to City by Lessee, shall be due as additional
rent not later than five (5) days after service of a written demand therefor on
Lessee, including reasonably detailed documentation of the amount owed. No
such payment or act shall constitute a waiver of Default or of any remedy for
Default or render City liable for any loss or damage resulting from any such act.
(d) Waiver of Rights. Lessee hereby waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or
under any other present or future law, in the event Lessee is evicted or City takes
possession of the Premises by reason of any Default by Lessee hereunder.
(e) Other Rights of City. No act of City, including, without limitation, City's entry
on the Premises, efforts to relet the Premises, or maintenance of the Premises,
shall be construed as an election to terminate this Lease unless a written notice of
such intention is given to Lessee by City or unless the termination thereof is
decreed by a court of competent jurisdiction. Notwithstanding if City elects to
continue the Lease in full force and effect after a Default by Lessee and to relet
the Premises, City may at any time after such reletting elect to terminate this
Lease for any such Default.
SECTION 39. CUMULATIVE REMEDIES
The remedies given to City in this Lease shall not be exclusive but shall be cumulative
and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this
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Lease. City shall have the right to exercise any other right or remedy which City may have at
law or in equity including, without limitation, City's rights under the unlawful detainer laws.
SECTION 40. WAIVER OF DEFAULT
The waiver by City of any Default by Lessee of any of the provisions of this Lease shall
not constitute a continuing waiver or a waiver of any subsequent Default by Lessee either of the
same or another provision of this Lease.
SECTION 41. CITY'S DEFAULTS/LESSEE'S REMEDY
In the event City fails to perform any material obligation of City under the Lease within
ninety (90) days after receiving written notice from Lessee specifying the nature of such default,
or, if the nature of City's obligation is such that more than ninety (90) days are required for its
performance, if City fails to commence such performance within such ninety (90) day period and
thereafter diligently prosecute the same to completion, then City shall be in default of this
obligation. If City's default materially interferes with Lessee's use of the Premises for its
intended purpose, Lessee shall have the option to terminate the Lease by giving City at least
sixty (60) days' written notice of its intent to terminate. In such a situation, Lessee must still
comply with all of its obligations, liabilities, duties and responsibilities under the Lease,
including, without limitation, paying any Rent due up to the time of termination and surrendering
the Premises pursuant to Sections 57 and 58 below. This remedy of termination is Lessee's sole
and exclusive remedy for a default by City.
SECTION 42. CONSENT
When City's consent/approval is required under this Lease, its consent/approval for one
transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence
of the same or any other transaction or event.
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SECTION 43. HOLDOVER
Should Lessee hold over and continue in possession of the Premises after expiration or
termination of this Lease, with or without the express prior written consent of City, Lessee's
continued occupancy of the Premises shall constitute a month-to-month tenancy, subject to all
the terms and conditions of this Lease, at a monthly rent of one hundred ten percent (110%) of
the previous calendar year's annual Rent divided by twelve (12) (or the average monthly Rent
for all months Lessee owned/operated the Concession if Lessee has owned/operated the
Concession for less than one (1) year) or that month's actual Rent, whichever is greater, and shall
not constitute a renewal or extension of the Lease term.
SECTION 44. WAIVER OF CLAIMS
Lessee hereby waives any claim against City, its officers, elected or appointed officials,
employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or
indirectly attacking the validity of this Lease, or any part thereof, or caused by any judgment or
award in any suit or proceeding declaring this Lease null, void or voidable, or delaying the Lease
or any part thereof from being carried out.
SECTION 45. INSPECTION OF PREMISES
Upon at least twenty-four (24) hours advance written, verbal or electronic notice given by
City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter
the Premises at all reasonable times for the purpose of inspecting, investigating and surveying
the Premises to determine whether Lessee is complying with the terms of this Lease and for the
purpose of doing other lawful acts that may be necessary to protect City's interest in the
Premises or to perform City's duties under this Lease. City also shall have the right in its sole
discretion to do any and all work of any nature necessary for the preservation, maintenance and
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operation of property owned, controlled or occupied by City. Lessee shall be given reasonable
notice when such work becomes necessary, and Lessee shall adjust the operation of the
Concession in such a manner that City may proceed expeditiously.
SECTION 46. CITY'S RIGHT TO LEASE BUYOUT
City shall have the right at any time during the entire term of this Lease or any renewals
or extensions thereof to buyout the remaining years of the Lease and Lessee's interest in this
Lease based upon the following buyout formula:
Average of the most recent two (2) years (preceding the date of the notice
of buyout) annual Gross Sales under this Lease or a prior lease multiplied
by a twelve and one-half percent (12.5%) profit margin multiplied by the
number of years remaining on the Lease discounted by twelve and one-
half percent (12.5%) to present value.
For example:
The annual Gross Sales for the most recent two (2) years of the Concession are
$335,000.00 and $350,000.00. If City gives Lessee notice of its buyout intention in September,
the preceding two (2) years would be the preceding twenty-four (24) months ending in August.
There are three (3) years remaining in the Lease.
The average of the Gross Sales of the most recent two (2) years is $342,500.00
($335,000.00 + $350,000.00/2).
The profit margin is 12.5% of the most recent two (2) year average which is $42,812.50
($342,500.00 x 0.125).
The profit margin is then discounted at the rate of 12.5% to present value over the
remaining years of the Lease:
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Year 1: $42,812.50 / 1.125 = $38,055.56
Year 2: $42,812.50 / 1.125 / 1.125 = $33,827.16
Year 3: $42,812.50 / 1.125 / 1.125 / 1.125 = $30,068.59
All of the discounted cash flows for the remaining years of the Lease are totaled and the
result is the buyout price of the Lease. In this case, the City's buyout price is $101,951.31.
If Lessee has owned/operated the Concession for less than two (2) years, the City's
buyout price will be the greater of (1) the amount calculated under the Gross Sales formula
above or (2) all reasonable and provable start-up costs, which start-up costs will be determined
by City in its sole discretion. The annual Gross Sales figure on which to calculate the buyout
amount shall be calculated as follows:
The average monthly Gross Sales for all months up to twenty-three (23)
months converted into an annual Gross Sales figure.
For example, if City decides to buyout the Lease of a new Lessee who has
owned/operated the Concession for fifteen (15) months, with an average monthly Gross Sales
figure of Five Thousand Dollars ($5,000.00), the annual Gross Sales figure for the option to
buyout would be Sixty Thousand Dollars ($60,000.00).
For purposes of this calculation, a Lessee shall not be considered a new lessee if the
Concession was previously owned/operated by a lessee, whose assignment, encumbrance,
occupation or use, sublease or other transfer to Lessee did not require City approval in Section
34 above.
At City's sole option, City shall have the right, but not the obligation, to purchase any or
all of Lessee's Trade Fixtures (defined in Section 52 below), based on the appraised fair value
market of the Trade Fixtures.
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If City desires to purchase any or all of Lessee's Trade Fixtures, City shall select an
appraiser to provide an appraisal of such Trade Fixtures. If Lessee disagrees with City's
appraisal, Lessee, at its sole cost and expense, shall select another appraiser to provide an
appraisal. If City disagrees with Lessee's appraisal, City shall select another appraiser to
perform an appraisal. In such case, the parties agree that the price for the Trade Fixtures will be
the average of these three (3) appraisals. All appraisers must be members in good standing in the
American Society of Appraisers. Notwithstanding the foregoing, at any time, City may elect not
to purchase any or all of Lessee's Trade Fixtures.
Upon City's request, Lessee shall provide City with proof of lien free, good and
merchantable title to any such Trade Fixtures City desires to purchase. Lessee shall protect,
defend, indemnify, and hold harmless City, its officers, elected and appointed officials,
employees, agents and volunteers from and against any and all liens, claims, damages, losses,
expenses,judgments, demands and defense costs (including, without limitation, costs and fees of
litigation (including arbitration) of every nature or liability of any kind or nature) arising out of
or in connection with Lessee's fraud, omission or negligence regarding any purchase of Lessee's
Trade Fixtures by City. Lessee will conduct all defense at its sole cost and expense and City
shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act as
limitation upon the amount of indemnification to be provided by Lessee.
Lessee acknowledges and agrees that this Lease buyout option of City has been
negotiated at arms-length and does not constitute nor does Lessee construe this to be an act of
eminent domain or inverse condemnation. In the event City exercises this buyout option, Lessee
waives any and all claims of loss of business goodwill and relocation rights or benefits. Lessee
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also shall immediately surrender the Premises as set forth herein and comply with, without
limitation, Sections 57 and 58 below.
SECTION 47. PHOTOGRAPHY
Lessee acknowledges and agrees that City may grant permits to third parties engaged in
the production of still and motion pictures and related activities to take photographs
or videos of or on the Premises when such permission shall not interfere with the primary
business of Lessee, all without providing Lessee with notice or requiring consent by Lessee.
SECTION 48. HAZARDOUS SUBSTANCES
Lessee represents and warrants that its use or occupation of the Premises shall not
generate any Hazardous Substance (as defined below in this Section), and it shall not store or
dispose on the Premises nor transport to or over the Premises any Hazardous Substance during
the entire term of this Lease or any renewals or extensions thereof or during any holdover period.
The foregoing restrictions shall not be deemed to restrict or prohibit the use by Lessee of
ordinary cleaning products as customarily used in Lessee's ordinary course of business at the
Concession, provided that Lessee complies with all provisions of law as to the use, storage and
disposal of such products. Lessee further agrees to clean up and remediate any such Hazardous
Substance on the Premises, and agrees to protect, defend, indemnify and hold harmless City, its
officers, elected or appointed officials, employees, agents and volunteers from and against any
and all claims, damages, losses, expenses, judgments, demands and defense costs (including,
without limitation, costs and fees of litigation (including arbitration) of every nature or liability
of any kind or nature) arising out of or in connection with any such Hazardous Substance and
any damage, loss, or expense or liability resulting from any such Hazardous Substance including,
without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any
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release caused by the sole negligence or willful misconduct of City. Lessee will conduct all
defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This
indemnity shall apply to all claims and liability regardless of whether any insurance policies are
applicable. The policy limits do not act as limitation upon the amount of indemnification to be
provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance
or material defined or designated as a hazardous or toxic waste, hazardous or toxic material,
hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local
environmental law, regulation or rule presently in effect or promulgated in the future, as such
law, regulation or rule may be amended from time to time; and it shall be interpreted to include,
without limitation, any substance which after release into the environment will or may
reasonably be anticipated to cause sickness, death or disease.
SECTION 49. NONDISCRIMINATION
Lessee and its employees shall not discriminate because of race, religion, color, ancestry,
sex, age, national origin or physical handicap against any person by refusing to furnish such
person any accommodation, facility, rental, service or privilege offered to or enjoyed by the
general public. Nor shall Lessee or its employees publicize the accommodation, facilities,
rentals, services or privileges in any manner that would directly or inferentially reflect upon or
question the acceptability of the patronage of any person because of race, religion, color,
ancestry, sex, age, national origin or physical handicap.
In the performance of this Lease, Lessee shall not discriminate against any employee or
applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or
physical handicap. Lessee shall take affirmative action to ensure that applicants are employed
and that employees are treated during employment, without regard to their race, religion, color,
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ancestry, sex, age, national origin or physical handicap. Such action shall include, without
limitation, the following: employment, upgrading, demotion or transfer; recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and
selection for training, including, without limitation, apprenticeship. Lessee shall post in
conspicuous places, available to all employees and applicants for employment, notices setting
forth the provisions of this Section.
Lessee shall permit access to its records of employment, employment advertisements,
application forms, and other pertinent data and records by City, the State Fair Employment
Practices Commission or any other agency with jurisdiction over these matters, for the purpose
of investigation to ascertain compliance with this Section.
City may determine a violation of this Section to have occurred upon receipt of a final
judgment having that effect from a court in an action to which Lessee was a party, or upon
receipt of a written notice from the State Fair Employment Practices Commission or other
government agency with jurisdiction over these matters that it has investigated and determined
that Lessee has violated the Fair Employment Practices Act or other applicable discrimination
law and has issued an order which has become final, or obtained an injunction. In the event of
violation of this Section, City shall have the right to terminate this Lease, and any loss of revenue
sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and
expense.
SECTION 50. ENTERTAINMENT PROHIBITED
Notwithstanding anything to the contrary, live entertainment in, on, or from the Premises
is expressly forbidden, unless expressly permitted in writing by City in advance.
19-7761/207926 Page 39 of 51
SECTION 51. LIENS
Lessee shall keep the Premises free and clear from any and all liens, including, without
limitation, mechanics' or materialmens' liens, claims and demands for work performed,
materials furnished, or operations conducted on or about the Premises or by reason of any use or
occupancy by Lessee, or any person claiming under Lessee. When applicable, Lessee shall
cause a notice of nonresponsibility to be posted and recorded pursuant to California Civil Code
Section 3094.
SECTION 52. INSTALLATION AND REMOVAL OF TRADE FIXTURES
Lessee shall have the right during the entire term of this Lease or any renewals or
extensions thereof, at Lessee's sole cost and expense, to install or affix in, to, or on the Premises
any machinery, equipment and other objects (the "Trade Fixtures"), for use in Lessee's trade or
business as Lessee may deem advisable. Any and all such Trade Fixtures that can be removed
without structural damage to the Premises shall, subject to Section 58 below, remain the property
of Lessee and may be removed by Lessee at any time prior to the expiration or termination of
this Lease, provided Lessee repairs any damage caused by the removal. Upon execution of this
Lease and every anniversary, Lessee shall provide City with a list of all Trade Fixtures on the
Premises.
SECTION 53. DESTRUCTION
Should the Premises be partially destroyed, this Lease shall continue in full force and
effect, and Lessee, at Lessee's sole cost and expense, shall complete the work of repairing and
restoring the Premises to their prior condition providing such work can be accomplished under
all applicable governmental laws and regulations within one hundred eighty (180) days. Should
the Premises be so far destroyed that in City's reasonable judgment they cannot be repaired or
19-7761/207926 Page 40 of 51
restored to their former condition within one hundred eighty (180) days, City shall give Lessee
notice of such determination in writing and each party may, in that party's sole discretion:
(a) Continue this Lease in full force and effect in which case Lessee shall repair and
restore, at Lessee's sole cost and expense, the Premises to their former condition;
or
(b) Terminate this Lease by giving the other party thirty (30) days' written notice of
such termination within sixty (60) days after the date that City gives Lessee notice
that the Premises cannot be repaired or restored to their former condition within
one hundred eighty (180) days. In the event that either party elects to terminate
this Lease, the entire amount of any insurance proceeds (excluding such proceeds
for Trade Fixtures, personal property whether or not owned or leased by Lessee
and trade inventory, but only to the extent that the insurance proceeds specifically
cover those items) shall be paid to City. The proceeds of any such insurance
payable to City may be used, in the sole discretion of City, for rebuilding or repair
as necessary to restore the Premises or for any other such purpose(s) as City sees
fit. In addition, if Lessee elects to terminate the Lease, Lessee must still comply
with all of its obligations, liabilities, duties and responsibilities under the Lease,
including, without limitation, paying any Rent due up to the time of termination
and surrendering the Premises, pursuant to Sections 57 and 58 below.
In the event of the damage or destruction of Improvements, Trade Fixtures and/or
personal property located on the Premises not giving rise to a termination of this Lease, Lessee
shall, at its sole cost and expense, replace and repair the same as soon as reasonably possible to
permit the prompt continuation of Lessee's business at the Premises.
19-7761/207926 Page 41 of 51
SECTION 54. NO ABATEMENT OF RENT DURING REPAIR WORK
The Rent shall not be abated for the time Lessee is prevented from using the whole or a
portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes,
insurance or any other obligations for the time Lessee is prevented from using the whole or a
portion of the Premises. SECTION 55. EMINENT DOMAIN If, during the term of
this Lease or any renewals or extensions thereof or during any holdover period, City's real
property (whether held by City in fee simple, an easement interest or otherwise) and/or the
Premises is taken in eminent domain, the entire award (that is, all forms) of compensation, other
than as provided herein, shall belong to and be paid to City. In the event of condemnation,
Lessee shall be entitled to an award of only the following forms of compensation, if any, from
the condemning authority: compensation for loss of business goodwill; compensation for the
value of any of Lessee's Trade Fixtures; compensation for the value of any of Lessee's personal
property; compensation for the value of any of Lessee's trade inventory; and compensation for
relocation benefits as authorized by law. All other forms of compensation, such as, for example,
but not by way of limitation, any bonus value of Lessee's interest in this Lease, shall belong to
and be paid to City. In the event of condemnation, unless Lessee is allowed by the condemning
authority to continue its operations on the Premises, the Lease shall terminate on the earliest of
the following dates: the date the condemning authority obtains a prejudgment order for
possession; the date title to the Premises vests in the condemning authority; or the date when
Lessee is required by the condemning authority to cease its operations.
19-7761/207926 Page 42 of 51
SECTION 56. RELOCATION AND ASSISTANCE BUSINESS GOODWILL AND
LEASEHOLD BONUS VALUE
Upon expiration or termination of this Lease for any reason, including, without
limitation, if City exercises its Lease buyout option, but excluding eminent domain, Lessee shall
not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable
to this Lease, and Lessee expressly waives any claim to the same.
SECTION 57. QUITCLAIM DEED
Upon expiration or termination of this Lease as provided for herein, including, without
limitation, in the event City exercises its Lease buyout option, Lessee shall execute and deliver to
City within thirty (30) days thereof, a good and sufficient quitclaim deed to the rights and
interests of Lessee in the Premises and the Lease. Should Lessee fail or refuse to deliver to City
this quitclaim deed, City may record in the Orange County Recorder's Office a written notice
reciting the failure of Lessee to execute and deliver this quitclaim deed. The date of recordation
of this notice by City shall be conclusive evidence against Lessee and all persons claiming under
Lessee of the expiration or termination of this Lease and any rights or interests of Lessee in the
Premises and/or the Lease. Lessee also agrees to execute, acknowledge, and deliver to City any
other instrument requested by City as necessary to perfect City's right, title and interest to the
Premises.
SECTION 58. RESTORATION AND SURRENDER OF PREMISES/TITLE TO
IMPROVEMENTS
On expiration or termination of this Lease, including, without limitation, in the event City
exercises its Lease buyout option, Lessee shall, without compensation to Lessee, promptly
surrender and deliver the Premises to City in as good condition as such were at the
19-7761/207926 Page 43 of 51
commencement date of this Lease, reasonable wear and tear excepted. Lessee also shall, without
compensation to Lessee, surrender all Improvements to City in good condition and repair,
ordinary wear and tear excepted, free and clear of all liens and encumbrances. Lessee also shall
remove all Trade Fixtures, personal property and trade inventory. City may in its sole discretion
accept all or any portion of the Premises, as then improved with Improvements and no sum
whatsoever shall be paid to Lessee or any other person; or City may require Lessee to remove all
or any portion of such Improvements, at Lessee's own risk and cost and expense; or City may
itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and
cost and expense. If required by City to do so, in removing any such Improvements, Lessee shall
restore the Premises as nearly as possible to the conditions existing prior to their installation or
construction. All such removal and restoration shall be to the satisfaction of City and shall be
completed within thirty (30) days of the expiration or termination of this Lease; provided,
however, that Lessee shall be considered a holdover tenant (pursuant to Section 42 above) after
expiration or termination of the Lease until the time Lessee completes this removal and
restoration work, including, without limitation, the removal of any Trade Fixtures, personal
property and trade inventory left on the Premises. In addition, any Trade Fixtures, personal
property or trade inventory left on the Premises after the expiration of this 30-day period,
regardless of cause, shall be deemed abandoned by Lessee. In City's sole discretion, it may
choose to do one or more of the following: (1) take any or all of such Trade Fixtures, personal
property and trade inventory as City property; (2) store any or all of such Trade Fixtures,
personal property and trade inventory in a public warehouse or other location at the sole cost,
expense and risk of Lessee, and for the account and in the name of Lessee; or (3) dispose of any
or all of such Trade Fixtures, personal property and trade inventory without any liability to
19-7761/207926 Page 44 of 51
Lessee. In addition, Lessee's indemnification, hold harmless and defense obligations set forth in
this Lease shall apply to such Trade Fixtures, personal property and/or trade inventory, and to
City's actions with respect thereto.
SECTION 59. FORCE MAJEURE - UNAVOIDABLE DELAYS
Should the performance of any act required by this Lease to be performed by either City
or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles,
inability to secure materials, restrictive governmental laws or regulations, or any other cause
except financial inability not the fault of the party required to perform the act, the time for
performance of the act shall be extended for a period equivalent to the period of delay and
performance of the act during the period of delay shall be excused. Provided, however, that
nothing contained in this Section shall excuse the prompt payment of the Rent or other
consideration by Lessee as required by this Lease or the performance of any act rendered
difficult solely because of the financial condition of the party, City or Lessee, required to
perform the act.
SECTION 60. CITY'S OPTION TO CLOSE THE PREMISES
City may close the Premises without liability and without advance notice to Lessee
therefor at any time as City in its sole discretion deems necessary for the protection of life, limb
or property, or for public health, safety or welfare purposes, or upon reasonable notice to effect
any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. The length
of time of any closing of the Premises by City longer than two (2) weeks during a period when
the Concession would otherwise be open shall extend the term of the Lease by the same amount
of time. If this occurs, Lessee and City shall memorialize this extension in writing.
19-7761/207926 Page 45 of 51
SECTION 61. DELIVERIES OF SUPPLIES
City may establish the days and times deliveries of supplies may be made and advise
Lessee in writing thereof.
SECTION 62. PARKING
Parking lots adjacent to the Premises are intended for all park users. City will work with
Lessee to identify a specific number of spaces for restaurant purposes on given days and times.
SECTION 63. CONFLICT OF INTEREST
Lessee warrants and covenants that no official or employee of City, nor any business
entity in which an official or employee of City is interested, (1) has been employed or retained
by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in
the performance of this Lease without the immediate written divulgence of such fact to City. In
the event City determines that the employment of any such official, employee or business entity
is not compatible with such official's or employee's duties as an official or employee of City,
Lessee, upon request of City, shall terminate such employment immediately. For breaches or
violation of this Section, City shall have the right both to terminate this Lease without liability
and, in its discretion, recover the full amount of any such compensation paid to such official,
employee or business entity. No official or employee of City shall have any financial interest in
this Lease in violation of the applicable provisions of the California Government Code.
SECTION 64. NOTICE
Unless specifically providing for verbal or electronic notice, all notices, certificates, or other
communications required to be given hereunder shall be in writing and made in the following
manner, and shall be sufficiently given and deemed received when (a) personally delivered; or (b)
three (3) business days after being sent via United States certified mail —return receipt requested; or
19-7761/207926 Page 46 of 51
(c) one (1) business day after being sent by reputable overnight courier, in each case to the
addresses specified below; provided that City and Lessee, by notice given hereunder, may designate
different addresses to which subsequent notices, certificates or other communications will be sent:
CITY: LESSEE:
City of Huntington Beach Kathy May's Restaurant, Inc.
ATTN: Director of Community Attention: Dawn Carrion
Services 8566 Colusa Circle #901A
2000 Main Street, P.O. Box 190 Huntington Beach, CA 92646
Huntington Beach, CA 92648
SECTION 65. COMPLIANCE WITH LAWS
Lessee, at its sole cost and expense, shall comply with all statutes, ordinances, regulations
and requirements of all governmental entities, including, without limitation, Federal, State,
county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of
the Concession whether such statutes, ordinances, regulations and requirements be now in force
or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of
City. Lessee shall deliver to City a copy of any notice from any governmental entity received by
Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or
from any person allegedly entitled to give notice under any conditions, covenants, or restrictions
binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the
admission by Lessee in a proceeding brought against Lessee by any government entity, that
Lessee has violated any such statute, ordinance, regulation or requirement shall be conclusive as
between City and Lessee and shall be grounds for termination of this Lease by City.
SECTION 66. INTERPRETATION OF THIS LEASE
The language of all parts of this Lease shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of the parties. If any provision of
19-7761/207926 Page 47 of 51
this Lease is held by an arbitrator or court of competent jurisdiction to be unenforceable, void,
illegal or invalid, such holding shall not invalidate or affect the remaining covenants and
provisions of this Lease. No covenant or provision shall be deemed dependent upon any other
unless so expressly provided here. As used in this Lease, the masculine or neuter gender and
singular or plural number shall be deemed to include the other whenever the context so indicates
or requires. Nothing contained herein shall be construed so as to require the commission of any
act contrary to law, and wherever there is any conflict between any provision contained herein
and any present or future statute, law, ordinance or regulation contrary to which the parties have
no right to contract, then the latter shall prevail, and the provision of this Lease which is hereby
affected shall be curtailed and limited only to the extent necessary to bring it within the
requirements of the law.
SECTION 67. SURVIVAL
Terms and conditions of this Lease, which by their sense and context survive the
expiration or termination of this Lease, shall so survive.
SECTION 68. MODIFICATION
No waiver or modification of any language in this Lease shall be valid unless in writing
and duly executed by both parties.
SECTION 69. SECTION HEADINGS
The titles, captions, section, paragraph and subject headings, and descriptive phrases at
the beginning of the various sections in this Lease are merely descriptive and are included solely
for convenience of reference only and are not representative of matters included or excluded
from such provisions, and do not interpret, define, limit or describe, or construe the intent of the
parties or affect the construction or interpretation of any provision of this Lease.
19-7761/207926 Page 48 of 51
SECTION 70. BROKERS
Each party warrants to and for the benefit of the other that it has had no dealings with any
real estate broker or other agent (attorneys excepted) in connection with the negotiation or
making of this Lease.
SECTION 71. INDEPENDENT CONTRACTOR
Lessee is, and shall be, acting at all times in the performance of this Agreement as an
independent contractor herein and not as an employee of City. Lessee shall secure at its own
cost and expense, and be responsible for any and all payment of all taxes, social security, state
disability insurance compensation, unemployment compensation and other payroll deductions for
Lessee and its officers, agents and employees and all business licenses, if any, in connection with
the Lease and/or any services to be performed hereunder.
SECTION 72. ATTORNEY'S FEES
In the event suit is brought by either party to construe, interpret and/or enforce the terms
and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own
attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees
from the non-prevailing party.
SECTION 73. LEGAL SERVICES SUBCONTRACTING PROHIBITED
Lessee and City agree that City is not liable for payment of any subcontractor work
involving legal services, and that such legal services are expressly outside the scope of services
contemplated hereunder. Lessee understands that pursuant to Huntington Beach City Charter
Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable
for payment of any legal services expenses incurred by Lessee.
19-7761/207926 Page 49 of 51
SECTION 74. GOVERNING LAW
This Lease shall be governed and construed in accordance with the laws of the State of
California.
SECTION 75. DUPLICATE ORIGINAL
The original of this Lease and one or more copies hereto have been prepared and signed
in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of
its execution and delivery, be deemed an original. Each duplicate original shall be deemed an
original instrument as against any party who signed it.
SECTION 76. ENTIRETY
The parties acknowledge and agree that they are entering into this Lease freely and
voluntarily following extensive arm's length negotiations, and that each has had the opportunity to
consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree
that no representations, inducements, promises, agreements or warranties, oral or otherwise, have
been made by that party, or anyone acting on that party's behalf, which are not embodied in this
Lease, and that that party has not executed this Lease in reliance on any representation, inducement,
promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease,
and the attached exhibits, contain the entire agreement between the parties respecting the subject
matter of this Lease, the Premises, the leasing of the Premises to Lessee, or the lease term created
under this Lease and supercede all prior understandings and agreements, whether oral or in writing
between the parties respecting the subject matter hereof.
19-7761/207926 Page 50 of 51
KATHY MAY'S RESTAURANT, INC. CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of
California
By:
print name
ITS: (circle one) Chairman/President/Vice Mayor
President
AND 4�3�
City Clerk
By:
INITIATED AND APPROVED:
print name
ITS: (circle one) Secretary/Chief Financial
Officer/Asst. Secretary - Treasurer Deputy Director of nomic Development
APPROVED A
REVIEWED AND APPROVED:
7�N� �- ity Attorney
y Manager
COUNTERPART
19-7761/207926 Page 51 of 51
i
i
KATHY MAY'S RESTAURANT, INC. CITY OF HUNTINGTON BEACH, a
r municipal corporation of the State of
California
By: 1,4uj 1
print name
ITS: (circle one) Chairm Preside ice Mayor
President
AND
By: City Clerk
S r i INITIATED AND APPROVED:
P
ITS: (circle on ecret hief Financial
Officer/Asst. Secretary -Treasurer Deputy Director of Economic Development
APPROVED AS TO FORM:
REVIEWED AND APPROVED:
City Attorney '
City Manager
COUNTERPART
19-7761/207926 Page 51 of 51
/I U
A
Kathy May's Restaurant
Huntington Central Park
(6622 Lakeview Drive)
SITE MAP
s - ,
i
k
'1
Facility Location
„r
CITY OF HUNTINGTON BEACH
Quarterly Evaluation
Kathy May's Restaurant
SUMMARY SHEET
Date Inspected: By:
Kathy May Restaurant, Inc. Representative:
Phone: (714) 514-1622 FAX:
Area OK Needs Attention
GENERAL
Doors&Locks
Exterior Walls
Graffiti Removal
Interior Walls
Removal of Bird Droppings
Restrooms(Plumbing)
Roof
Rust
Si a e
Trash
Trim
Windows
Patio Area
Other
COMMENTS:
Exhibit " B"
OP ID:MH'
A �71 QK' DATE"(MMIODiYY1"(J
CERTIFICATE OP LIABILITY INSURANCE 07/0812019
THIS,CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND .CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS;
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY'"THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A.,CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED':
REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER..
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must.be endorsed. 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
PRODUCER CONACTNAMEi Mar Re
Huntington Pacific Ins- Agency PHONE Fnx .
7901 Professional Circle C No Ex :714-841-6283 A1C,No) 714=842=2538:
Huntington Beach; CA 92648 ADDRESS:MARKIMHUNTPAcIFICINSUIRANCE.dOM
Mark Heberden _FKU KATHY=1,
CUSTOMER ION:
INSURER(S):AFFORDING'COVERAGE :NAIC'#
INSURED'- Kathy May's Restaurant,Inc. INSURER:A:Allied"""Ins.Co. 42579-
dba: Kathy May's Lakeview Cafe (NSURERB:Tech noI logy Insurance 42376
6622 Lakeview Drive
Huntington Beach; CA;92648-1133 INSURERc:
,..
INSURER'0^
INSURER`E
INSURER F
.COVERAGES CERTIFICATE NUMBERS REVISION NUMBER:
THIS IS TO CERTIFY THAT 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 MAYBE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESERIBED'HEREIN 1S So,UBJECT TO ALL THE TERMS;
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY'HAVE'BEEN:REDUCED..BY'PAID CLAIMS.
INSR-- TYPE OF INSURANCE- LIMITS
GENERAL -INSR.WW P,OLICY NUMBER � MIDD MMlDD
GENERAL LIABILITY- EACH OCCURRENCE< $. 1,000,00
A X COMMERCIAL GENERAL LIABILITY X ACP1885059137 06/06/2019 06/06/2020 'PREMISES Ea occurrence $, 300,000
CLAIMS-MADE �OCCUR .MED EXP,('Any-one personi $'. 5,000 -
X Liquor Liability ACP7885 0 5 91 3 7' 06/06/2019 06/06/2020 PERSONAL&ADV INJURY $ 1,000,00
GENERAL AGGREGATE- $- 2000,00
GEN'L AGGREGATE LIMIT APPLIES PER PRODUCTS-COMPIOPAGG $. 2,000,000
X POLICY 7
PRCT LOC $
AUTOMOBILE LIABILITY COMB]NEDSI NGLE LIMIT
:(Ea.accident)
ANY,AUTO BODILY INJURY(Per,person) $`
:ALL OWNED AUTOS' BODILY INJURY(Per accident) $-
SCHEDULED AUTOS':' APPROVED AS TO FORM
PROPERTY DAMAGE
HIRED AUTOS (PERACCIDENT. $
:NON-OWNED AUTOS 8y� $
MICHAEL E-�.-,W F $
'.UMBRELLA LIA13 OCCUR• :EACHi000URRENCE', $
ExcessuaB CITY C)f- HuNTINGTON BEACH
CLAIMSMADE• :AGGREGATE: $''
DEDUCTIBLE $
RETENTION $. $+.
WORKERS COMPENSATION X W C�STATU., "OTH
AND EMPLOYERS'LIABILITY TORY'.LIMITS •ER
-.B ANY PROPRIETORIP.ARTNERIEXECUTIVE Y/N TWC3736376 ;09/06/2018 09106/2019 E.L.EACH ACCIDENT $. 1,000,00.
OFFICERIMEMSER EXCLUDED? �„NIA
-.(Mandatory In NH) .E.L.DISEASE-•EAEMPLOYEE $ 1,000,00.
If yes.describe under
DESCRIPTION OF OPERATIONS below E.L:DISEASE:..-POLICY LIMIT• $'' 1000,00
A Business'Property ACP7875059137 06/06/20+19 06/06/2020 178
ACP7885059137' 08106120.19 06/06/2020 Ded 1,000
'DESCRIPTION OF OPERATIONS I LOCATIONS;r VEHICLES (Attach ACORD 101,Additional.Remarks Sehedule;"if more space1ir required)
The City of Huntington Beach; it's officers,eIected or appointed
officials, em loyees,agents and volunteers are additional insured with
respects as heir interest may appear.Lessee's insurance is primary and non
contributoryry.
*10 day`notfce:of cancellation for non-payment of premium.
.CERTIFICATE HOLDER CANCELLATION;
CITYHUN
SHOULD ANY OF THE ABOVE, ES DCRIBED'"POLICIES,BE CANCELLED BEFORE:
unn ton Beach THE EXPIRATION DATE THEREOF NOTICE WILL BE DELIVERED IN
City.o `
f Huntington ACCORDANCE WITH THE POLICYdP.ROVISIONS.
2000 Main Street
Huntington Beach,CA 92648 AUTHORIZED REPRESENTATIVE'
01988-2009,ACORD CORPORATION'. All rights reserved-
ACORD 25(2069109), The ACORD name and logo are registered marks of ACORD`
EFFECTII/E.DATE: 1`2:01 AM Standard Time, BUSINESSOWNERS.
(at your principal pla;cc of busincso) PG Al 02 (01-01
,ACKNOWLEDGEMENT OF ADDITIONAL INSURED STATUS
MANAGERS CAR LESSORS OF LEASED PREMISES
Parson or Organization Dacignatad as an Additional Incurod:
The City of Huntington Beach, its officers, elected or
appointed officials,employees,.agents,and volunteers
2000 Main St. I
Huntington Beach,CA 92648-2762
Designated Premises (Part Leased to the Named insured):
6622 Lakeview Dr.
Huntington Beach, CA<92648-1133
rots corm nas teen sent to-you to aCKnowleage your status as an additional insured under our, meaning the
issuina Company stated below, insurance policy issued to.the Named Insured shown below;.
Under our Premier Businessowners Liability Coverage Form, Section II_WHO l&AN INSURED provides as
follows:
Any otthe-tol(owing persons or organizations are automatically insureds when you;ti.e.the Named insured
stated below]and such person or organization have agreed in a written contract or agreement that such
perso.n,or:organization be added as an additional insured on your policy providing general liability coverage
Managers or Lessors of Leased Premises
Any person or organization frorn whom you lease premisos is are additional insured,but only with respect to
their liability arising out of your use of that mart of the premises)eased to you, subject to the following
additional:exclusion
Tnis insurance,lnetuaing any auty we have to derena�-sults' apes not appiy to structural alterations, new
construction or demolition operations performed by or for sueh person or organization.
HowEVER,their status as additional insured under this policy ends;when.you cease to be a tenant of such.
premises.
The policy language set forth above;`)s subject to all of the terms°and conditions of the policy issued to the Named
Insured shown helow_ For your information; our Named Insured, the Pflticy Nurnher, Policy Tgrm and Limits of
Insurance are stated below'.
Named;Insured KATHY MAY'S RESTAURANT, INC. -.:DBA
Issuing Company! AMCO INSURANCE COMPANY'
Pbky Number` ACP BPF 7885059137'
Policy Term: 06-06-19 To 06-06-20
Limits of Insurance: Per Occurrence; $1,000,000
All Occurrences $2,000,000
;PB Al U2 (01-01) Page 1 of 1.
ACP BPF 7885059137 INSURED COPY' 47 62584
BUSINESSOWNERS
P13`60 72 0711.
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
AMENDMENT TO OTHER INSURANCE CLAUSE FOR
ADDITIONAL INSUREDS - PRIMARY AND NON-
CONTRIBUTORY WHEN REQUIRED IN A WRITTEN
AGREEMENT OR CONTRACT WITH YOU
This endorsemenf modifies insurance..provided under'the.following:
PREMIER BUSINESSOWNERS COMMON POLICY CONDITIONS
Only with respect to any additional insured;.in the COMMON POLICY CONDITIONS, form P8<00 09, under
condition H. OTHER INSURANCE, paragraph 2.a. is replaced bythefollowing:
H. OTHER INSURANCE
2. Under any liability coverage provided by this policy,
a. If for injury or loss we cover,;there is other valid and collectible insurance available to any additional
insured under another policy,our obligations are limited as follows-
(1) Issued by another insurer,:or if there is self insurance or similar risk retention that applies to a
loss covered by this policy,then this insurance:provided by us.shall be;excess,over'such other
insurance; unl.ess.you have'agreed in awritten contract�or written,agreement.signed`prior to the
<
loss that this insurance shall be primary:
(a) Then this insurance is primary. If other insurance is also primary;we will share with all that,
other insurance as des.cribed'in d. below;and
(b) The coverage afforded by this insurance is non-contributory with the additional insured's own
insurance.
Paragraphs(a)and(b)do not apply to other insuranceto which the additional insured has been
added as an additional insured to any other person or organizeition's policy.; or
(2) Issued by,us or any of our affiliate companies-,,that applies to a loss covered by this policy, then
only the highest applicable.Limit of Insurance shall apply to such loss.This condition does not
apply to any policy issued by us that is designed to,provide Excess'or Umbrella liability insurance.;,
All;terms and conditions.of this policy apply unless modified by.this;endorsement..
PB 60 72 07 11 Includes copyrighted material of Insurance Services Office, Inc,with'its permission. Page:1 Of.1,
ACP 13PF7885059137 INSURED COPY 47 04756
City of Huntington Beach
- = 2000 Main Street ♦ Huntington Beach, CA 92648
(714) 536-5227 • www.huntingtonbeachca.gov
Pg 17,{1999 p' �
Office of the City Clerk
Robin Estanislau, City Clerk
July 22, 2019
Kathy May's Restaurant, Inc.
Attn: Dawn Carrion
8566 Colusa Circle #901A
Huntington Beach, CA 92646
Dear Ms. Carrion:
Enclosed is a fully executed copy of the "Lease Agreement between the City of
Huntington Beach and Kathy May's Restaurant, Inc." approved by the Huntington
Beach City Council on July 15, 2019.
Sincerely,
�l�Q
Robin stanislau, CMC
City Clerk
RE:ds
Enclosure
Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand