HomeMy WebLinkAboutStaff Report 261-083
City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
JUNE 2, 2008 CMR: 261:08
APPROVAL OF A SUBLEASE AGREEMENT BETWEEN THE SANTA
CLARA VALLEY TRANSPORTATION AUTHORITY AND CAFFE DEL
DOGE, VENEZIA, INC. FOR A PORTION OF THE UNIVERSITY
AVENUE DEPOT, 95 UNIVERSITY AVENUE FOR A FIVE YEAR TERM
WITH TWO FIVE YEAR OPTIONS TO EXTEND
RECOMMENDATION
Staff recommends that City Council approve the attached Sublease Agreement between the Santa
Clara Valley Transportation Authority (VTA) and Caffe Del Doge (CDD), Venezia, Inc. for a
portion of the University Avenue Depot and authorize the City Manager or designee to execute,
the attached Sublease Agreement, which includes a specific provision in which the City agrees to
guarantee Caffe del Doge two five year options to extend the lease in the event that the City
decides to extend its own lease of the depot, which is due to expire in 2013.
BACKGROUND
The City signed a lease with Stanford for E1 Camino Park in 1915, which was amended in 1981
to include the Transit Center and the Depot. The lease for E1 Camino Park expires on June 30,
2033, but the City has the right to terminate the portion related to the Depot and Transit Center
on February 26, 2013.
On March 31, 1981, Council also approved a 32-year sublease with the Santa Clara Valley
Transportation Agency (VTA) for the Transit Center and the Depot, which is due to expire on
June 30, 2013 unless the City exercises its right to terminate its lease with Stanford, in which
case VTA sublease expiration date is February 26, 2013. On August 6, 2007, in response to
ongoing comments and ideas about locating a coffee or similar vendor at the Depot, as well as
opening the Depot restrooms for public use, Council approved a Request for Proposals (RFP) to
sublease a portion of the Depot for a cafd service. The City took the lead in developing the RFP
and working with VTA and Stanford to review the proposals. Although the RFP originally
anticipated a lease with the City and VTA as co-lessors, VTA as the sublessee preferred to
negotiate the sub-sublease directly with the Caffe. As a result, the attached sub-sublease is
between the VTA as sub-lessor and CDD as sub-sub lessee, with the City and Stanford
University consenting. To finalize the agreement the City must execute the Sub-Sublease
Agreement (Attachments A & B).
CMR: 261:08 Page 1 of 5
The Sub-Sublease agreement not only requires the City’s consent to VTA’s sub-sublease to
CDD, but CDD has also requested including a provision that will require the City to agree to (!)
continue allowing CDD to lease the Depot from the City following the expiration of the sublease
between the City and VTA, and (2) give CDD two five-year options to extend its sublease of the
Depot with the City, in the event that the City extends its lease of the depot beyond February 26,~01o.
DISCUSSION
SUMMARY OF THE RFP PROCESS
Following Council’s August 6, 2007 approval of the RFP, several articles appeared in the local
newspapers announcing the opportunity of the lease. Staff sent RFP information flyers to 36
individuals and groups who expressed interest in leasing the property. The RFP was also added
to the City’s website.
The intent of the RFP is to sublease approximately 300 square feet of the main Depot building
for a 5-year term to a tenant that could improve, maintain and operate the premises for food and
beverage service which: 1) attracts and serves the general public; 2) provides public access to the
public restrooms during hours of operation; 3) benefits the City and community as a whole; 4)
preserves and maintains the historic significance of the property; and 5) does not adversely
impact the other uses and tenants of the facility. The RFP requires that the improvements,
maintenance and operation of the subleased premises be at no cost to the City or the VTA. The
minimum bid for the monthly rental was $100, and the Lessee would not be required to pay rent
for the first 6 months of the lease.
Two proposals were received: 1) Caffe Del Doge, Venezia, Inc. (CDD); and 2) Passing Track
Caf6, Co. (PTC). The proposals were reviewed by an evaluation committee comprised of
representatives from Stanford, VTA, Joint Powers Board (JPB) and staff. Proposals were
evaluated based on the 10 criteria required by Policy and Procedures !-11, Lease of City
property. (Attachment C).
CDD has developed and operated the caf6 at 419 University Avenue for two years. Its parent
company, Caffe Del Doge, Srl, has developed 8 cafes around the world, including Italy, Japan,
Egypt and Hungary. CDD’s concept is to deliver a Venetian coffee-drinking experience which
includes premium quality coffee and quick, natural Venetian-style foods. Proposed
improvements, estimated to cost $103,000, include adding a fixed bar which will include coffee
equipment, washing machines, display cases, refrigeration, an ice machine and sinks. Seating
will be added to the inside and outside as permitted by the City. The Depot will not be changed;
and the outside of the bar and kitchen will be designed to fit the current look of the structure, and
the furniture will be selected accordingly. The caf6 wil! be open for an average of 12 hours per
day 7 days a week from 6 am to 6 pm. The schedule will be adjusted depending on demand.
Minimal preparation will take place on site due to space constraints, therefore most preparation
of sandwiches and salads will be done at 419 University Avenue. CDD will utilize the janitor
that services 419 University to service the depot daily, primarily after closure. CDD’s bid for the
monthly rental is $1,500.
CMR: 261:08 Page 2 of 5
PTC’s bid for rent (criteria #6) was higher than CDD however; the proposal was weak in meeting
other proposal evaluation criteria, especially those relating to finances and the proposer’s
experience. The financial information provided in the proposal was vague or incomplete (criteria
#9 and #!0). The proposal did not include the required 3-year proforma, and the source of
financing was not made clear. Evidence of the proposer’s ability to carry out the proposed
improvements and operate the facility and services as proposed (criteria #5) was also not
included.
The CDD proposal clearly established the public benefit to be provided (criteria #1) by
describing specifically the type of food, service and ambience to be provided. The proposal
describes the Palo Alto/Stanford demographics that have been considered in its plan for a caf~
that will attract and please the general public and commuters (criteria # 1 and #7). The proposed
improvements, which are described in some detail, would meet historical standards and other
requirements of the City codes (criteria #2 and #3). The proposed use and improvements as
described would have no apparent adverse negative impact on the other tenants of the Depot, the
immediate neighborhood or the environment (criteria #4). The proposal offers sample menus
and pricing of items which are reasonable considering the high quality of food, beverages and
service (criteria #8). In addition, the proposal is very strong concerning finances and experience
(criteria #5, #9 and #10). CDD’s 3-year proforma analysis and budget are detailed and realistic
and based on its experience operating similar establishments.
Sublease Agreement
The attached Sublease Agreement provides for the CDD to operate its caf~ service for the general
public in a 1,289 square-foot portion of the 5,375 square-foot depot. Major terms of the
agreement include: 1) the requirement that CDD provide janitorial service to the Depot and
access to the public bathrooms during its hours of operation; 2) no rent requirement for the first
six months of the retail operation and a monthly rent payment of $1,500 to the VTA thereafter;
and 3) improvements must be in accordance with the Secretary of the Interior’s Standards of
Rehabilitation for Historic Buildings and City permitting procedures.
Attachment D includes a summary of the terms of the attached Sublease. Its terms are consistent
with the requirements of the RFP with the exception of two changes requested by the proposer:
1) the addition of an option to extend the five-year term for two additional terms of five years
each; and 2) an increase in the area to be leased from approximately 300 square feet as offered in
the RFP to approximately 1,289 square feet. Staff supports allowing the additional square
footage, which provides for a larger cafe area and seating, an office, portions of the news stand
and ticket storage areas on the mezzanine, and an employee locker area located in the women’s
waiting room, all necessary for the successful operation of the cafe. The specifics of the seating
and the development plan for the caf~ are subject to the City’s permitting process, which includes
approval of a conditional use permit.
Agreeing to the two five-year options to extend beyond 2013 is workable but eliminates any
flexibility the City will have if it decides to continue its lease beyond 2013. The primary term of
the Sublease is approximately 5 years, through the remainder of the VTA’s sublease with the
City ending in 20t3. The RFP offered only the original 5-year term and no options to extend
beyond the period, in large part because of the uncertainty of the Depot leases after their
CMR: 261:08 Page 3 of 5
expirations in 2013. CDD later informed staff that it requires the two extension periods to ensure
business continuity. These extensions would, of course, be contingent upon either the City or
VTA continuing to lease the Depot beyond 2013, and would be subject to rent increases based on
the consumer price index. However, because the City has not yet made a determination on
whether it will continue its lease of the Depot beyond February 26, 2013, the long term
implications of agreeing to CDD’s request for two extension options are unclear.
RESOURCE IMPACT
The Sublease requires the CDD to improve, maintain and operate the property at no cost to the
VTA or the City. CDD responsibility for janitorial service and rent payments will reduce costs
for the VTA. CDD responsibility for the public restrooms will reduce City staff time spent
responding to complaints about lack of public access to the restrooms.
POLICY IMPLICATIONS
The proposed Sublease is consistent with Policy and Procedures !-11, Leased Use of City
Land/Facilities. However, in the event that the City decides to continue leasing the Depot from
Stanford in 2013, it will automatically be bound to the agreement with CDD and will not have
the flexibility to change the term or use.
ENVIRONMENTAL REVIEW
The project is exempt from the requirements of the California Environmental Quality Act under
Section 15301, Existing Facilities, subject to the proposed improvements being consistent with
the Secretary of the Interior’s Standards of Rehabilitation for Historic buildings.
ATTACHMENTS
Attachment A: Sublease Agreement
Attachment B: Consent Letter
Attachment C: Evaluation Criteria
Attachment D: Summary of Sublease Agreement
cc:Stanford
VTA
Caffe Del Doge Venezia, Inc.
CMR: 261:08 Page 4 of 5
PREPARED BY:
WILLIAM W. FELL
DEPARTMENTAL HEAD APPROVAL:
CITY MANAGER APPROVAL:
Manager, Real PropertYA~L
Direc ,.~d~~ve~ ~rvices,
,/!/TA I ~ "
E and KELLY MORARIU
IJ~puty City managers
CMR: 261:08 Page 5 of 5
ATTACHMENT A
COMMERCIAL PROPERTY LEASE AGREEMENT
BY AND BETWEEN
SANTA CLARA VALLEY TRANSPORTATION AUTHORITY
AND
Caffe Del Doge Venezia, Inc.
This lease ageement (herein "Lease") is made and entered into this __ day of ,2008,
by and between the Santa Clara Valley Transportation Authority, a special district ("VTA"), and Caffe
Del Doge Venezia, Inc., a Delaware corporation, dba Caffe Del Doge ("Lessee"). VTA, and Lessee
may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this
Lease."
RECITALS
A. Stanford University ("Stanford") is the owner of, and City of Palo Alto, California, a
California chartered municipal corporation ("City") is the tenant of, and VTA is the subtenant of that
certain real property located at 95 University Avenue, Pato Alto, California, and commonly known as
University Avenue Train Depot (the "Depot"). The lease between Stanford and City is dated June 10,
1915 and expires on June 30, 2033, however, per the Fifth Amendment dated January 18, 2000 of its
lease with Stanford, City has the right to terminate their lease as to Depot only as of February 26, 2013
and assign any subleases it then has with respect to the Depot, to Stanford. The sublease between City
and VTA is dated March 3!, 1981 and expires on June 30, 2013. The Depot is generally shown on
Exhibit "A," attached hereto and incorporated herein by reference.
B. VTA desires to cooperate with City, which desires to make available: 1) a food and beverage
service (Cafe) for the general public in an approximately 1,289 square-foot portion of the 5,375 square-
foot Depot; and 2) public access to restrooms within the Depot.
C. The Depot is listed on the National Register and the California Register of Historical
Resources, and is also listed on the City’s Historic Building Inventory as Category 1 level of
significance; and the City desires to preserve as much of its historic significance and integrity as
possible.
D. Lessee desires to construct and operate the Cafe in a manner that will retain the historic
integrity of the Depot.
E. Lessee desires to construct, operate and manage the Cafe on the terms and conditions more
particularly set forth in this Lease.
F. VTA desires to make Lessee responsible for janitorial service for the Premises, Depot main
room, and main restrooms as outlined in Exhibit B, for the duration of Lessee’s use of the Depot.
11M94\571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.
5/28/20g8~,
Page 1 of 31
G. Lessee and VTA agree that the primary purpose of this Lease is to provide a food and beverage
service, janitorial services and public access to the restrooms.
Now, therefore, in consideration of these recitals and the following covenants, terms, and conditions,
Lessee and VTA mutually agree as follows:
LEASE PROVISIONS
I.PREMISE~.
VTA hereby subleases to Lessee, and Lessee hires from VTA, the 1,289 square-foot portion of
the Depot, including the proposed Depot Caffe Area, an office, portions of the News Stand and
Ticket Storage areas on the mezzanine, and an employee locker area located in the Women’s
Waiting Room, all as more particularly shown in the cross-hatched portion of Exhibit A. The
1,289 square-foot area shal! herein be referred to as the "Premises."
Lessee is aware of and acknowledges a Caltrain project to modify and improve the adjacent
Caltrain platform area, and has knowledged that said project ~vil! result in disruption of access
to the platform area from the Premises during a period anticipated to be approximately 6 to 8
months beginning in May of 2008.
2.TERM.
2.1 Primary Term. The term of this Lease ("Primary Term") shall commence on
("Delivery Date"), shall be coterminous with the remainder of VTA’s
sub-lease with City, subject to the provisions of Section 2.2 below. If the Caltrain project to
modify the platform area completely prevents access to the Premises or prevents the
development and use of the Premises, the Delivery Date shall be delayed until access to the
Premises is restored from at least one entrance to the Depot, and development and use are
possible.
2.2 Options: Agreement with City of Palo Alto to enter into Sublease. Lessee shall have
options to extend the duration of this Lease beyond the Primary Term for two consecutive,
five-year periods ("Option Periods"), with either VTA or the City as sublessor, as set forth in
this Section 2.2. Lessee acknowledges that the sublease between VTA and the City expires
June 30, 2013, the end of the Primary Term, or February 26, 2013, if City exercises its right to
terminate its lease with Stanford under its Fifth Amendment to the Lease. In the event the term
of the sub-lease between VTA and the City terminates at or before the end of the Primary
Term, as anticipated, or in the event the sub-lease between VTA and the City is extended and
terminates at any other time, the City, by its approval of this Lease, agrees that the Lessee shall
become a direct subtenant of the City at the time VTA’s lease with City terminates, upon all
10494k571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 2 of 31
the provisions contained in this Lease. To exercise an option, Lessee shall give VTA (so long
as VTA is the sublessor to Lessee under this Lease) and the City notice of the exercise of the
option at least 90 days prior to the expiration of the Primary Term or then-current Option
Period. Lessee’s exercise of each option is expressly conditioned upon (1) Lessee being in
lawful possession of the Premises at the time of the exercise; (2) Lessee not being in default
under the provisions of this Lease; and (3) the City having exercised its option to extend its
lease with Stanford, so that the City’s lease term is of sufficient duration to cover the term of
the Option Period so exercised by Lessee. If Lessee and the City enter into a direct sublease
pursuant to this provision, City shall indemnify, defend, and hold VTA harmless from and
against any claims, causes of action, judgments, obligations, costs and expenses (including
attorney’s fees), damages, and liability arising out of: (1) the performance of any obligation
under the sublease between City and Lessee; and (2) the use, occupancy, maintenance, or
operation of the Premises subsequent to the expiration of the sublease between VTA and the
City. In the event the sublease between VTA and the City is extended beyond June 30, 20!3,
or in the event the City exercises its option to extend its lease with Stanford beyond February
26, 2013, for less than the two full 5-year Option Periods, Lessee shal! have the right to
exercise the first or second Option Period, as the case may be, for the shorter time period
remaining for such Option Period.
City of Palo Alto
By:
Manager~t City
3.RENT.
3.1 No Rent for First 6 Months of Retail Operations. Lessee shall pay no rent for the first 6
months of retail operations.
3.2 Base Rent after the First 6 months of Retail Operations. Beginning on the first day of the
seventh (7~) month of retail operations, the Base Rent to be paid by Lessee shall be equal to
one thousand five hundred dollars per month ($1,500.00). Base Rent shall be paid in lawful
money of the United States of America, without deduction or offset.
3.3 Upon the request of VTA, Lessee shall promptly provide, at Lessee’s expense, necessary
data to enable VTA to fully comply with any and all requirements of the State of California or
the United States of America for information or reports relating to this Lease and to Lessee’s
use of the Premises. Such data shall include, if required, a detailed breakdown of Lessee’s use
of the Premises and/or a detailed breakdown of Lessee’s receipts and expenses. VTA shall not
disclose Lessee’s financial information except as may be required by law.
llM94x571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.
5i281200~.
Page 3 of 31
3.4 Late Charge. Lessee acknowledges that late payment by Lessee to VTA of rent will cause
VTA to incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without limitation, processing,
accounting and late charges that may be imposed on VTA. Therefore, ifVTA does not receive
rent due from Lessee within ten (I0) days after such rent is due, Lessee shall pay to VTA an
additional sum often percent (10%) of the overdue rent as a late charge. The Parties agree this
late charge represents a fair and reasonable estimate of the costs VTA will incur by reason of
late payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee’s
default with respect to the overdue amount, nor prevent VTA from exercising any of the other
rights and remedies available to VTA.
3.5 Rent Payment Procedures.
3.5.1 Rent includes all amounts payable by Lessee to VTA under this Lease, including
but not limited to monthly Base Rent, security deposit, taxes and assessments, insurance,
utilities, and other charges payable by Lessee under this Lease (even if payable directly to
someone other than VTA). Lessee’s obligation to pay rent shall commence on the first day of
the seventh (7th) month of retail operations. If the term commences or terminates on a date
other than the first of any month, monthly rent for the first and last month of this Lease shall be
prorated based on a 30-day month.
3.5.2. Rent payments shall be delivered to VTA Accounts Payable, 3331 N. First
Street, attn: Cash Group, San Jose, CA 95134. Payments shall be effective upon receipt. The
designated place of payment may be changed at any time by VTA upon ten (10) days’ written
notice to Lessee.
3.5.3. Lessee specifically agrees that acceptance of any late or incorrect rentals
submitted by Lessee shall not constitute an acquiescence or waiver by VTA and shall not
prevent VTA from enforcing Section 3.4 or any other remedy provided in this Lease. VTA
may apply any payment received from Lessee against any obligation due and owing by Lessee
under this Lease, regardless of any statement appearing on or referred to in any remittance from
Lessee or any prior application of such payments. Acceptance by VTA of a partial payment
shall not waive any right of VTA or affect any notice of legal proceedings. Partial payment of
any amount due to VTA shall be deemed to be a partial payment only, and any endorsements or
statements on the check or any letter accompanying the check shall not be deemed an accord
and/or satisfaction, and, notwithstanding said endorsements, VTA may accept and deposit said
check without prejudice to its right to recover the balance. Lessee’s obligation to pay rent and
all other amounts due hereunder shall be absolute and unconditional, and not subject to any
abatement, set off, defense, recoupment or reduction.
3.5.4. Acceptance of rent shall not constitute approval of any unauthorized sublease or
use, nor constitute a waiver of any non-monetary breach.
10494L571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 4 of 31
3.5.5. A service charge of twenty dollars ($20.00) will be made for each check that
must be resubmitted for payment.
3.6 Base Rent Durin~ Option Periods. Beginning on the first day of the first Option Period,
the Base Rent to be paid by Lessee shall be equal to one thousand six hundred fifty dollars per
month ($1,650.00) (the "Base Option Rent"). Thereafter, the yearly Base Rent payable under
this Lease will be adjusted on July 1 of each year throughout the remainder of the first Option
Period and each year of the second Option Period (an "Adjustment Date") as follows:
3.6.1. The basis for computing the adjustment is the Consumer Price Index for All
Urban Consumers - All Items San Francisco-Oakland-San Jose, CA, U.S. Cities
Average, published bi-monthly by the Bureau of Labor Statistics of the United States
Department of Labor (Base Period 1982-1984=100) ("Index"), published for April
2013 (the "Beginning Index").
3.6.2. The new yearly Base Rent will be calculated by multiplying the Base Option
Rent by a fraction, the numerator of which is the Index published for the month of
April prior to the Adjustment Date (the "Adjustment Index") and the denominator of
which is the Beginning Index, not to exceed an increase equal to 3% of the yearly Base
Rent in effect during the year immediately preceding the applicable Adjustment Date.
In the event any such annual calculation would produce an increase in excess of 3%,
the dollar amount of Base Rent which would have been collected, but for the 3%
limitation, may be carried forward and added to any future Base Rent adjustment so
long as any such Base Rent increase does not exceed 3% of the yearly Base Rent in
effect during the immediately preceding year.
3.6.3. If the Adjustment Index is not available on the applicable Adjustment Date,
Tenant will continue to pay the Base Rent in effect immediately prior to the
Adjustment Date. After the Adjustment Index is available, Landlord will furnish
Tenant with a computation of the rent for the ensuing one-year period. Any appropriate
adjustment will be paid within 30 days of Tenant’s receipt of Landlord’s statement.
3.6.4. If the Index is changed so that the benchmark period differs from that in effect
on the Delivery Date, the Index will be converted in accordance with the conversion
factor published by the Bureau of Labor Statistics. If the Index is discontinued or
revised during the Lease term, such other governmental index or computation with
which it is replaced will be used in order to obtain substantially the same result as
would be obtained if the Index had not been discontinued or revised.
3.6.5. Notwithstanding any other provision in this ageement, under no circumstances
shall the rent adjustment provided in section 3.6 ever result in a decrease in rent
1049&571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 5 of 31
payment. Should the CPI adjustment be computed to resutt in a decrease, Lessee’s rent
payment for that year shall instead be equal to the Base Rent in effect during the
immediately preceding year.
SECURITY DEPOSIT.
Security Deposit. Lessee has deposited with VTA an amount of two thousand dollars
($2,000.00), which shall be held by VTA as a security deposit for the faithful performance by
Lessee ofa!l terms, covenants, and conditions of this Lease. VTA may use these funds as are
reasonably necessary to remedy any Lessee default(s) in the payment of rent, to repair damages
caused by Lessee, or expenses incurred to clean the Premises upon expiration or early
termination of tenancy. If any portion of the security deposit is used towards rent or damages
at VTA’s sole discretion, Lessee shal! within 10 days after written demand therefore, deposit
cash with VTA in an amount sufficient to restore the Security Deposit to the original amount,
and the failure to restore the Security Deposit shall be a material breach of this Lease. The
balance of Security Deposit, if any, shall be mailed to Lessee’s last known address within
forty-five (45) days of surrender of Premises, or as reasonably practicable if repairs are
required.
The City will require a security deposit in the amount of $2,000 should the option(s) be
exercised. The same terms and conditions would apply as to the clause above.
USE OF PREMISES.
5.1 Required Use. Throughout the term of this Lease, Lessee shall use and occupy the
Premises solely for the following purposes ("Required Uses"):
5.1.1. Caf~ service consisting of non-alcoholic beverage and food service for on-
Premises consumption and take-out, including coffee, specialty drinks and related
items.
5.1.2. Public access to Depot restrooms to be provided during operating hours ofcaf~
service. Access to be provided by unlocking restroom doors upon opening the caf~ and
locking the doors upon closing. Lessee agrees and acknowledges that VTA bus
operators will be allowed to use restrooms 24 hours per day, seven days per week.
5.1.3. Janitorial service for the Premises, Depot main room and restrooms as outlined
in Exhibit B.
5.2 Restricted Use. Lessee shall use the Premises for those required uses described in Section
5.1 and for no other use without VTA’s prior written consent, which consent may be withheld
tlM94~571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 6 of 31
in the sole and absolute discretion of VTA. Lessee shall not (i) create, cause, maintain or
permit any nuisance or waste in, on or about the Premises; (ii) permit or allow the Premises to
be used for any unlawful or immoral purpose, or (ii) create, cause, maintain or permit any
unreasonable odors, noise, vibration, power emissions or other item to emanate from the
Premises. Lessee shall not store materials or articles of any nature outside upon any portion of
the Premises. Lessee shall not use Premises in a manner that increases the risk of fire, cost of
fire insurance or improvements thereon. No unreasonable sign or placard shall be painted,
inscribed or placed in or on said Depot. No bicycles, motorcycles, automobiles or other
mechanical means of transportation shall be placed or stored anywhere on the Premises.
Lessee, at its expense, shall keep the Premises in as good condition as it was at.the beginning
of the term hereof, except damage occasioned by ordinary wear and tear, and except damage to
the roof, sidewalks and plumbing, which is not the fault of Lessee.
Lessee shall use ordinary care for the presentation of the Premises and to repair all
deterioration or damage to the Premises caused by Lessee’s negligence.
5.3 Condition. Use of Premises. VTA makes no warranty or representation of any kind
concerning the condition of the Premises, or the fitness of the Premises for the use intended by
Lessee, and hereby disclaims any personal knowledge with respect thereto, it being expressly
understood by the parties that Lessee has personally inspected the Premises, knows its
condition, finds it fit for Lessee’s intended use, accepts it as is and has ascertained that it can
be used for the limited purposes specified in Section 5.1. Lessee accepts the Premises "as-is"
on the date of execution of this Lease and is aware of all the characteristics and conditions of
the Premises. Lessee is aware that a Caltrain project to modify and improve the adjacent
Caltrain platform area will commence construction during the term of this Lease, and
acknowledges that said project will result in disruption of access to the platform area from the
Premises during a period anticipated to be approximately 6 to 8 months beginning in May of
2008.
DUTIES OF LESSEE.
6.1 Lessee shall not use the image of the Depot, the name of VTA or any other identifying sign
or symbol associated with the Depot or VTA to undertake any action or representation other
than those specifically assigned to Lessee as a duty under this Lease. Lessee may use the name
"Palo Alto Depot," "University Avenue Train Depot," and the like, to identify the location of
the Caf~.
6.2 Lessee shall protect and maintain the Premises. Lessee shall assume the responsibility for
the guarding and safekeeping of all of ,the donated and loaned property located at the Depot,
including the five benches, mural above the south end of the interior built-in countertop and
offices, all built-in existing counters, desks and the safe.
104942571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 7 of 31
7.OPERATING REQUIREMENTS.
7.1 Hours. Schedule. Operations. Lessee shall continuously and uninterruptedly, use the
Premises for the uses specified in this Lease. Lessee shall use only such space within the
Premises for office, clerical or other non-sales or services uses as is reasonably required for
Lessee’s required or approved uses of the Premises. Unless it elects to do so, Lessee will not
operate in the Premises: (i) if it is prevented from doing so because of damage or destruction,
any taking described in Section 21, or force majeure causes described in Section 14.2, (ii)
while alterations are being made to the Premises, (iii) for legal holidays and one other selected
day per year, (iv) for a reasonable period of time at the end of the term to facilitate moving out,
restoration, and other activities incidental to Lessee winding up business at the Premises, and
(v) during any hours or on any days when Lessee determines that its operations are not
profitable.
Lessee shall at all times maintain, and post for public viewing, a written schedule setting forth
the operating hours. A schedule of prices charged for all goods and/or services related to the
required and permitted uses of this Lease shall also be maintained and posted for public
viewing. Individual merchandise must be clearly priced. Lessee a~ees that when alternate
forms of packaging are available, only items packaged in the manner most compatible with the
goals of reducing litter and preserving the environment shall be sold.
Lessee shall furnish VTA a copy of the schedule of operating hours prior to commencement of
operations and at least 30 days prior to any proposed change in the schedule.
7.2 Personnel. Lessee shall at all times retain active, qualified, competent, and experienced
personnel to supervise Lessee’s operation and to represent and act for Lessee. Lessee shall
require its attendants and employees to be properly dressed, clean, courteous, efficient, and
neat in appearance at all times. Lessee shall not allow any person(s) in or about the Premises
who shal! use offensive language and/or act in a boisterous or otherwise improper manner.
Lessee shall maintain a close check over attendants and employees to insure the maintenance
of a high standard of service to the public. Lessee may install video cameras for security and
for observation of its personnel.
IfVTA determines that the quality of service rendered by Lessee, including, without limitation,
a determination that the standard of service provided by any employee of Lessee, is not
satisfactory under the provisions of this Lease, Lessee shall immediately remedy any and all
such deficiencies after receipt of notice from VTA.
8.HAZARDOUS MATERIALS.
8.1. Compliance with Laws. Lessee shall not cause or permit any Hazardous Material (as
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Santa Clara Valley Transportation Authority and
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defined below), other than incidental amounts of standard cleaning materials, office and
restaurant products, to be used, stored, generated, discharged, transported to or from, or
disposed of in or about the Premises.
8.2 Termination of Lease. VTA shall have the right to terminate the Lease in VTA’s sole and
absolute discretion in the event that (i) any anticipated use of the Premises by Lessee involves
the generation or storage, use, treatment, disposal or release of Hazardous Material in a manner
or for a purpose prohibited or regulated by any governmental agency, authority or Hazardous
Materials Laws; (ii) Lessee has been required by any lender or governmental authority to take
remedial action in connection with Hazardous Material contaminating the Premises, if the
contamination resulted from Lessee’s action or use of the Premises; or (iii) Lessee is subject to
an enforcement order issued by any governmental authority in connection with the release, use,
disposal or storage of a Hazardous Material on the Premises.
8.3 Hazardous Materials Defined. The term Hazardous Material(s) shall mean any toxic or
hazardous substance, material or waste or any pollutant or contaminant or infectious or
radioactive material, including but not limited to, those substances, materials or wastes
regulated now or in the future under any of the following statutes or regulations and any and all
of those substances included within the definitions of hazardous substances, hazardous waste,
hazardous chemical substance or mixture, imminently hazardous chemical substance or
mixture, "toxic substances," a hazardous air pollutant, a toxic pollutant or solid waste in the
(a) CERCLA or Superfund as amended by SARA, 42 U.S.C. Sec. 9601 et seq., (b) RCRA, 42
U.S.C. Sec. 6901 et seq., (c) CWA., 33 U.S.C. Sec. 1251 et seq., (d) CAA, 42 U.S.C. 78401 et
seq., (e) TSCA, 15 U.S.C. Sec. 2601 et seq., (f) The Refuse Act of 1899, 33 U.S.C. Sec. 407,
(g) OSHA, 29 U.S.C. 651 et seq. (h) Hazardous Materials Transportation Act, 49 U.S.C. Sec.
1801 et seq., (i) USDOT Table (40 CFR Part 302 and amendments) or the EPA Table (40 CFR
Part 302 and amendments), (j) California Superfund, Cal. Health & Safety Code Sec. 25300 et
seq., (k) Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq.,
(1) Porter-Cologne Act, Cal. Water Code Sec. 13000 et seq., (m) Hazardous Waste Disposal
Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., (n) Proposition 65, Cal. Health
and Safety Code Sec. 25249.5 et seq., (o) Hazardous Substances Under~ound Storage Tank
Law, Cal. Health & Safety Code Sec. 25280 et seq., (p) California Hazardous Substance Act,
Cal. Health & Safety Code Sec. 28740 et seq., (q) Air Resources Law, Cal. Health & Safety
Code Sec. 39000 et seq., (r) Hazardous Materials Release Response Plans and Inventory, Cal.
Health & Safety Code Secs. 25500-25541, (s) TCPA, Cal. Health and Safety Code Secs. 25208
et seq., and (t) regulations promulgated pursuant to said laws or any replacement thereof, or as
similar terms are defined in the federal, state and local laws, statutes, regulations, orders or
rules. Hazardous Materials shall also mean any and all other substances, materials and wastes
which are, or in the future become regulated under applicable local, state or federal law for the
protection of health or the environment, or which are classified as hazardous or toxic
substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by
any federal, state or local law, regulation or order or by common law decision, including,
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~ 28 20tt
without limitation, (i) trichloroethylene, tetracholoethylene, perchloroethylene and other
chlorinated solvents, (ii) any petroleum products or fractions thereof, (iii) asbestos,
(iv) polychlorinated biphenyls, (v) flammable explosives, (vi) urea formaldehyde, and (vii)
radioactive materials and waste.
8.4 VTA’s Right to Perform Tests. At any time prior to the expiration of the Lease Term,
VTA shall have the right to enter upon the Premises in order to conduct tests and to deliver to
Lessee the results of such tests to demonstrate that levels of any Hazardous Materials in excess
of permissible levels has occurred as a result of Lesses’s use of the Premises. Lessee shall be
solely responsible for and shall indemnify, protect, defend and hold VTA harmless from and
against all claims, costs and liabilities including actual attorneys fees and costs arising out of or
in connection with any removal, remediation, clean up, restoration and materials required
hereunder to return the Premises and any other property of whatever nature to their condition
existing prior to the appearance of the Hazardous Materials to the extent caused or permitted to
be caused by Lessee or its employees, agents, sublessees, assignees, contractors or
subcontractors of Lessee. The testing shall be at Lesses’s expense ifVTA has a reasonable
basis for suspecting and confirms the presence of Hazardous Materials in on, or about the
Premises, which has been caused by or resulted from the activities of Lessee, its agents,
employees or contractors.
8.5 Hazardous Materials Indemni _ty. Lessee shall indemnify, defend (by counsel reasonably
acceptable to VTA), protect and hold VTA harmless from and against any and all claims,
liabilities, fines, penalties, forfeitures, losses, fees, costs, damages and/or expenses, including,
attorneys fees and consultant and expert fees, arising out of or in connection with any
hazardous material used, generated, discharged, transported to or from, stored, or disposed of
in, on, under, through or about the Depot and/or the surrounding real and personal property.
For purposes of the indemnity provided herein, any acts or omissions of Lessee or its
employees, agents, invitees, sublessees, assignees, contractors or subcontractors of Lessee
(whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable
to Lessee. Notwithstanding the foregoing, Lessee will have no liability for costs relating to the
clean-up or remediation of hazardous materials or toxic substances that are on, in, or beneath
the Depot unless the presence of the hazardous materials or toxic substances was caused, in
whole or in part, by Lessee or its employees, agents, invitees, sublessees, assignees, contractors
or subcontractors of Lessee, and provided that Lessee proves that it did not in fact cause or
contribute to the presence of hazardous materials or toxic substances on, in, or beneath the
Depot. If there are hazardous materials or toxic substances in, on, under, or about the
Premises not caused by Lessee, or its representatives that, in Lessee’s reasonable opinion,
substantially impair Lessee’s ability to conduct its business operations on the Premises, Lessee
xvill have the right to terminate the Lease, effective upon Lessee’s notice to VTA.
UTILITIES AND OPERATING EXPENSES.
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9.1 Lessee shall fully and promptly pay for all expenses associated with the operation of the
Premises, including but not limited to the furnishing of sewer, telephone service, garbage
pickup and disposal, and other public utilities to the Premises (except as otherwise assessed
pursuant to Section 9.2). The Lessee wil! be responsible for all computer hardware/software
acquisition, installation, maintenance and removal in connection with Lessee’s use of the
Premises. Lessee shall have no responsibility for any such utilities furnished to the
landscaping, the restrooms, or any other portions of the Depot other than the Premises.
9.2 Pro Rata of Utility Expenses. Depot is a master metered building for gas, water, and
electricity. The Lessee shall pay to VTA, in addition to monthly Base Rent, the pro rata share
of the charges for utility based upon the proportion of which the number of square feet of gross
floor area of the Premises bears to the total number of square feet of gross floor area of the
Depot. Lessee’s pro rata share of the utility charges is approximately 24%. VTA represents
that, over the past year, utility expenses have averaged ($1,066.00 ) per month for the Depot.
Lessee shall pay to VTA at the time of each monthly rent payment ($256.00), which represents
Lessee’s pro rata share of utility expenses. Upon 30 days’ written notice, VTA may increase
the amount of Lessee’s utility expense if the actual utility expense exceeds the monthly average
utility expense stated above. Within 45 days after the end of each calendar year, VTA will
furnish Lessee with a statement showing the total, actual utility costs in reasonable detail for
the calendar year and the payments made by Lessee with respect to the calendar year. VTA
will refund to Lessee any overpayment or Lessee will reimburse VTA any deficiency, as the
case may be, within 30 days of Lessee’s receipt of VTA’s statement.
10. TAXES.
10.1 Personal Property Taxes. Lessee shall pay before delinquent any and all taxes and
assessments, license fees and public charges levied, assessed or imposed upon or against
Lessee’s fixtures, equipment, furnishings, furniture, appliances, inventory and other personal
property installed or located on or within the Premises. Lessee shall cause said fixtures,
equipment, furnishings, furniture, appliances, inventory and other personal property
(collectively "personal property") to be assessed and billed separately from the real property.
On demand, Lessee shall furnish VTA with satisfactory evidence of these payments. If any or
all of Lessee’s personal property are assessed and taxed with the real property, then Lessee
shall pay to VTA, as rent, the taxes attributable to the personal property within !0 days after
receipt of bill from VTA. VTA may pay such taxes and assessments regardless of validity of
the levy.
10.2 Pro Rata of Taxes: 95 University Avenue is part of a larger tax parcel. Lessee shall pay
to VTA, in addition to monthly Base Rent, Lessee’s pro rata share of all real property taxes
levied or assessed against the Premises and/or the Depot during the term of the Lease, based
upon the proportion of which the number of square feet of gross floor area of the Premises
bears to the total number of square feet of gross floor area of the Depot. Lessee’s pro rata
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share of the real property tax is 1.0722% of the larger tax parcel. Taxes for the 2007/08 tax
year for the larger tax parcel amount to $13,606.08. Lessee shall pay to VTA its pro rata share
of the taxes twice per year when billed by VTA.
10.3 Definition. The term "real property taxes" as used herein shall mean:
10.3.1 All taxes, assessments, levies and other charges, general and special, foreseen
and unforeseen, now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy
assessments, which are levied or assessed against or with respect to (i) value,
occupancy, use or possession of the Premises and/or the Improvements, (ii)any
improvements, fixtures, equipment and other real or personal property of Lessee that
are an inte~al part of the Premises, (iii) use of the Premises, Improvements, public
utilities or energy within the Premises;
10.3.2 All charges, levies or fees imposed by reason of environmental regulation or
other governmental control of the Premises and/or the Improvements;
10.3.3 New excise, transaction, sales, privilege or other taxes now or hereafter
imposed upon VTA as a result of this Lease; and,
10.3.4 All costs and fees (including attorneys fees) incurred by VTA in contesting any
real property taxes and in negotiating with public authorities as to any real property
taxes affecting the Premises.
10.4 Real Property Taxes. If at any time during the Term, the taxation or assessment of the
Premises and/or the Improvements prevailing as of the commencement of this Lease shall be
altered, then any such tax or charge, however designated, shall be included within the meaning
of the term "rea! property taxes." If any real property taxes are based upon property or rents
unrelated to the Premises and/or the Improvements, then only that part of such tax that is fairly
allocable to the Premises, as reasonably determined by VTA, on the basis of the assessor’s
worksheets or other available information, shall be included within the meaning of the term
"real property taxes."
1 I.MAINTENANCE.
11.1 VTA and Lessee Responsibilities. VTA shall maintain and repair the Depot as provided
in the sublease between City and VTA, including the utility systems not exclusively serving the
Premises, roof repair, electrical and plumbing system repair, exterior painting, exterior
window cleaning and window replacement, and structura! repairs. During the term of this
Lease, Lessee shall be responsible for routine maintenance of the Premises and for providing
janitorial service to the Depot main room and restrooms as outlined in Exhibit B. Lessee, at
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Lessee’s expense, shall keep the Premises and al! improvements thereto in first-class order,
repair and condition, and shall keep the Premises in a safe, clean, wholesome, and sanitary
condition to the complete, reasonable satisfaction of VTA, and in compliance with all
applicable laws and regulations throughout the term of this Lease. In addition, Lessee shall
maintain, at Lessee’s expense, at! equipment, furnishings and trade fixtures upon the Premises
required for the maintenance and operation of a first-class business of the type to be conducted
pursuant to this Lease.
Lessee expressly waives the benefit of any statute now or hereinafter in effect, including the
provisions of Sections 1941 and 1942 of the Civil Code of California, which would otherwise
afford Lessee the right to make repairs at VTA’s expense or to terminate this Lease because of
VTA’s failure to keep Premises in good order, condition and repair. Lessee further agrees that
if and when any repairs, alterations, additions or betterments shall be made by Lessee as
required by this paragraph, Lessee shall promptly pay for all labor done or materials furnished
and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever.
If Lessee fails to make any repairs or perform any maintenance work for which Lessee is
responsible within a reasonable time (as determined by VTA in it’s sole discretion) after
demand by VTA, VTA shall have the right, but not the obligation, to make the repairs at
Lessee’s expense; within ten (10) days of receipt of a bill, Lessee shall reimburse VTA for the
cost of such repairs, including a fifteen percent (15%) administrative overhead fee. The
making of such repairs or performance of maintenance by VTA shall in no event be construed
as a waiver of the duty of Lessee to make repairs or perform maintenance as provided in this
Section.
11.2 Maintenance of Common Areas. VTA shall maintain or cause to be maintained,
including repair and replacement as necessary, all of the common areas serving the Premises
including the landscaping around the Depot.
12.CONSTRUCTION OR ALTERATION BY LESSEE.
12.1 Alteration by Lessee. Lessee shall not make any alterations or improvements to the
Premises without obtaining the prior written consent of VTA. Lessee may, at any time and at
its sole expense, install and place business fixtures and equipment within the Premises,
provided such fixtures and installation are historically compatible with the Depot and have
been reviewed and approved in writing by VTA.
!2.2 Minimum Construction & Permits. Lessee shall in an efficient and workmanlike
manner, and in accordance with the Secretary of Interior’s Standards for Historic Rehabilitation
attached as Exhibit C, cause to be designed, constructed, and installed within the Premises, at
no cost to VTA, appropriate improvements to adequately accommodate the services and uses
required and permitted by this Lease. Lessee shall prepare the plans and specifications for
approval by the City’s Building Division and Planning & Community Development Divisions
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as required by the Palo Alto Municipa! Code.
12.3 Construction Standards. All design and construction performed by or on behalf of
Lessee shall conform to the approved plans, specifications, construction and architectural
standards contained in Exhibit D. Once the work is begun, Lessee shall with reasonable
diligence prosecute all construction to completion. All work shall be performed in a good and
workmanlike manner, shall substantially comply with any plans and specifications approved by
VTA and shall comply with all applicable governmental permits (including a permit from the
Santa Clara County Health Department), laws, ordinances and regulations, and shall meet all
other requirements contained in this Lease.
12.4 Cost of Improvements. Lessee shall pay all costs for construction done or caused to be
done by Lessee on the Premises as permitted or required by this Lease. Lessee shall keep the
Premises free and clear of all claims and liens resulting from construction done by or for
Lessee. Promptly after completion of construction, Lessee shall provide to VTA a statement of
the reasonable and actual costs of construction for the initial improvements, which statement
shall be certified as to accuracy and signed by Lessee under penalty of perjury.
12.5 Ownership of Improvements. All improvements constructed, erected or installed upon
the Premises must be free and clear of all liens, claims, or liability for labor or material and
shall become the property of VTA, at its election, upon expiration or earlier termination of this
Lease and, upon VTA election, shall remain upon the Premises upon termination of this Lease.
Title to all equipment, furniture, furnishings and trade fixtures placed by Lessee upon the
Premises shall remain in Lessee, and replacements, substitutions and modifications thereof
may be made by Lessee throughout the term of this Lease. Lessee may remove such fixtures
and furnishings upon expiration or early termination of this Lease if Lessee is not then in
default under this Lease, provided that Lessee shall repair to the satisfaction of VTA any
damage to the Premises and improvements caused by such removal and provided that usual and
customary lighting, plumbing and heating fixtures shall remain upon the Premises upon
expiration or early termination of this Lease.
12.6 Indemnity for Claims Arisin~o Out of Construction. Lessee shall defend and indemnify
VTA against all claims, liabilities and losses of any type arising out of work performed on the
Premises by Lessee, together with reasonable attorneys’ fees and all costs and expenses
reasonably incurred by VTA in negotiating, settling, defending or otherwise protecting against
such claims.
12.7 Assurance of Completion. Prior to commencement of any construction or alteration
expected to cost more than $10,000, Lessee shall furnish VTA satisfactory evidence that assures
VTA that sufficient monies will be available to complete the proposed work. The amount of
such assurance shall be at least the total estimated construction cost. Evidence of such assurance
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shall take one of the forms set out below and shall guarantee Lessee’s full and faithful
performance of all of the terms, covenants, and conditions of this Lease:
A.Completion Bond;
B.Performance, labor and material bonds, supplied by Lessee’s contractor or contractors;
provided the bonds are issued jointly to Lessee and VTA;
C. Irrevocable letter of credit from a financial institution; or
Any combination of the above, or as otherwise approved in writing by VTA.
E All bonds and letters of credit must be issued by a company qualified to do business in
the State of California and be acceptable to VTA. All bonds and letters of credit shall
be in a form acceptable to VTA, and shall insure faithful and full observance and
performance by Lessee of all of the terms, conditions, covenants, and agreements
relating to the construction of improvements or alterations in accordance with this
Lease.
12.8 Certificate of Inspection. Upon completion of any construction, Lessee shall submit to
VTA a Certificate of Inspection, verifying that the construction was completed in conformance
with Title 20 of the California Code of Regulations for residential construction, or in
conformance with Title 24 of the California Code of Regulations for non-residential
construction.
12.9 As Built Plans. Upon completion of any (i) new construction, (ii) structural alterations or
(iii) non-structural alterations, Lessee shall provide VTA with a complete set of reproducible "as
built plans" reflecting actua! construction within or upon the Premises.
13.HOLD HARMLESS/INDEMNIFICATION.
13.1 Indemnification. To the extent permitted by law, Lessee agrees to protect, defend, hold
harmless and indemnify VTA, its Board of Directors, commissions, officers, agents,
volunteers, and employees from and against any claim, injury, liability, loss, cost, and/or
expense or damage, however same may be caused, including all costs and reasonable attorney’s
fees in providing a defense to any claim arising there from for which VTA shall become legally
liable arising from Lessee’s negligent, reckless, or wrongful acts, errors, or omissions with
respect to or in any way connected with this Lease. Lessee shall give VTA immediate notice of
any claim or liability hereby indemnified against.
13.2 Waiver of Claims. Lessee ~vaives any claims against VTA for injury to Lessee’s business
or any loss of income there from, for damage to Lessee’s property, or for injury or death of any
person in or about the Premises or VTA property, from any cause whatsoever, except to the
extent caused by VTA’s negligence or willful misconduct.
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14.DAMAGE~ DESTRUCTION AND TERMINATION.
14.1 Non-termination and Non-abatement. Except as provided herein, no destruction or
damage to the Premises by fire, windstorm or other casualty, whether insured or uninsured,
shall entitle Lessee to terminate this Lease.
14.2 Force Majeure. Prevention, delay or stoppage due to strikes, lockouts, labor disputes,
Acts of God, inability to obtain labor, materials or reasonable substitutes, governmental
restrictions, governmental regulation, governmental controls, judicial orders, enemy, or hostile
governmental actions, civil commotion, fire or other casualty, and other causes beyond the
reasonable control of Lessee (financial inability excepted), shall excuse the performance by
Lessee for a period equal to the prevention, delay or stoppage, except the obligations imposed
with regard to rent to be paid by Lessee pursuant to this Lease. In the event any work
performed by Lessee or Lessee’s contractor’s results in a strike, lockout, and/or labor dispute,
the strike, lockout, and/or labor dispute shall not excuse the performance by Lessee of the
provisions of this Lease.
14.3 Waiver. VTA and Lessee waive the provisions of any statutes which relate to termination
of leases when leased Premises is destroyed and agree that such event shall be governed by the
terms of this Lease.
14.4.Damao, e or Destruction.
14.4.1 Definitions.
14.4.1.1 "Depot Partial Damage" shall mean if the Depot is damaged or
destroyed to the extent that the cost to repair is less than fifty percent (50%) of the then
replacement cost of the Depot.
14.4.1.2 "Depot Total Destruction" shall mean if the Depot is damaged or
destroyed to the extent that the cost to repair is fifty percent (50%) or more of the then
replacement cost of the Depot.
14.4.1.3 "Replacement cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the condition that existed
immediately prior to the damage occurring excluding all improvements made by Lessee.
14.4.2 Depot Partial Damage. Subject to the provisions of Section 14.5, if at any time
during the term of this Lease there is damage which falls into the classification of Depot Partial
Damage, then VTA shall, to the extent required under the provisions of the sublease between
the City and VTA, at VTA’s expense, repair such damage to the Premises and the Depot, but
!0494~71023v4
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not Lessee’s fixtures, equipment or tenant improvements, as soon as reasonably possible, and
this Lease shall continue in full force and effect.
14.4.3 Depot Total Destruction. Subject to the provisions of Section !4.5, if at any
time during the term of this Lease there is damage, which falls into the classification of Depot
Total Destruction, then VTA may at VTA’s option either (i) to the extent required under the
provisions of the sublease between the City and VTA, repair such damage or destruction, but
not Lessee’s fixtures, equipment or tenant improvements, as soon as reasonably possible at
VTA’s expense, and this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after the date of occurrence of such damage of VTA’s
intention to cancel and terminate this Lease, in which case, this Lease shall be cancelled and
terminated as of the date of the occurrence of such damage.
14.5 Abatement of Rent: Lessee’s Remedies.
14.5.1 In the event VTA repairs or restores the Premises pursuant to the provisions of
this Section 14, the rent payable hereunder for the period during which such damage, repair or
restoration continues shall be abated in proportion to the degree to which Lessee’s use of the
Premises is impaired. Except for abatement of rent, if any, Lessee shall have no claim against
VTA for any damage suffered by reason of any such damage, destruction, repair or restoration.
14.5.2 IfVTA shall be obligated to repair or restore the Premises under the provisions
of this Section 14 and shall not commence such repair or restoration within ninety (90) days
after such obligation shall accrue, Lessee may at Lessee’s option cancel andterminate this
Lease by giving VTA written notice of Lessee’s election to do so at any time prior to the
commencement of such repair or restoration. In such event this Lease shall terminate as of the
date of such notice.
15. SIGNS.
Lessee shall not place, construct, maintain, or allow any signs upon the exterior of the Premises
without prior written consent of VTA. Approval by the Palo Alto Architectural Review Board
and/or Historical Review Board might also be required. Lessee may install standard signs
listing menu, prices and operating hours within the interior of the Premises.
16.ASSIGNMENT AND SUBLETTING.
16.1 VTA Consent Required. Lessee shall not assign this Lease, nor any interest therein, and
shall not sublet or encumber the Premises or any part thereof, nor any right or privilege
appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Premises or
any portion thereof, without the prior written consent of VTA. This Lease shall be binding
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upon any permitted assignee or successor of Lessee. Consent by VTA to one assignment,
subletting, occupation or use by another person shall not be deemed to be consent to any
subsequent assignment, subletting, occupation or use by another person. Lessee may have the
Premises delivered to a subsidiary company of Lessee, but such arrangement shall in no way
alter Lessee’s responsibilities hereunder with respect to the Premises. Any assignment,
subletting, encumbrances, occupation or use contrary to the provisions of this Lease shall be
void and shall constitute breach of this Lease. VTA may assign any of its rights hereunder
without notice to Lessee in connection with a transfer of VTA’s rights under its sublease with
the City.
16.2 No Release of Lessee. No subletting or assignment as approved by VTA shall release
Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay the rent and to
perform all other obligations by Lessee hereunder. The acceptance of rent by VTA from any
other person shall not be deemed to be a waiver by VTA of any provision hereof. In the event
of default by any assignee of Lessee or any successor of Lessee in the performance of any of
the terms hereof.. VTA may proceed directly against Lessee without the necessity of exhausting
remedies against said assignee.
17.DEFAULTS: REMEDIES.
17.1 Default__fis. The occurrence of any one or more of the following events shall constitute a
material default or breach of this Lease by Lessee:
17.1.1 Abandonment of the Premises by Lessee as defined by California Civil Code
§ 1951.3 or as provided in Paragraph 28;
17.1.2 Failure by Lessee to make any payment of rent or any other payment required to
be made by Lessee hereunder, as provided in this Lease, where such failure shall
continue for a period often (10) business days after written notice thereof from VTA to
Lessee. In the event VTA serves Lessee with a Notice to Pay Rent or Quit pursuant to
applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also
constitute the notice required by this subparagraph;
17.1.3 Failure by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease in any material respect to be observed or performed by Lessee
where such failure shall continue for a period of thirty (30) days after written notice
thereof from VTA to Lessee; provided, however, that if the nature of Lessee’s default 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 commenced such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to completion;
10494k571023v4
17.1.4 Making by Lessee of any general arrangement or assignment for the benefit of
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 18 of 31
creditors; Lessee’s becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within sixty (60) days); the appointment of a bankruptcy trustee or receiver
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 where possession is not restored to Lessee
within thirty (30) days; or the attachment, execution or other judicial seizure of all or
substantially all of Lessee’s assets located at or on the Premises or of Lessee’s interest
in this Lease, where such seizure is not discharged within thirty (30) days.
17.2 Remedies. In the event of any material default or breach by Lessee, VTA may at any
time thereafter, following any notice required by statute, and without limiting VTA in the
exercise of any right or remedy which VTA may have by reason of such default or breach:
17.2.1 Terminate Lessee’s right to possession of the Premises by any lawful means, in
which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises and Improvements to VTA. In such event, VTA shall be
entitled to recover from Lessee all damages incurred by VTA by reason of Lessee’s
default including, but not limited to, the cost of recovering possession of the Premises
and Improvements, expenses of re-letting, including necessary renovation and
alteration of the Premises and Improvements, reasonable attorneys’ fees, the worth at
the time of the award of the unpaid rent that had been earned at the time of termination
of this Lease and the worth at the time of award of the amount by which the unpaid rent
for the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided.
17.2.2 Maintain Lessee’s right to possession, in which case this Lease shall continue in
effect whether or not Lessee shall have abandoned the Premises. In such event, VTA
shall be entitled to enforce all of VTA’s rights and remedies under this Lease, including
the right to recover rent and other payments as they become due hereunder.
17.2.3 Pursue any other remedy now or hereafter available to VTA under the laws or
judicial decisions of the State of California.
17.3 No Relief from Forfeiture After Default. Lessee waives all rights of redemption or relief
from forfeiture under California Code of Civil Procedure §§ 1174 and 1179, and any other
present or future law, in the event Lessee is evicted or VTA otherwise lawfully takes
possession of the Premises by reason of any default or breach of this Lease by Lessee.
17.4 Default by VTA. VTA will commit a default ifVTA fails to perform any provision of
this Lease required of it and the failure is not cured within 30 days after Lessee’s notice to
VTA. If, however, the failure cannot reasonably be cured within the cure period, VTA will not
be in default of this Lease ifVTA commences to cure the failure within the cure period and
11M94\571023v4
Lease Agreement between
Santa Clara Valley Transportation Authori~’ and
Caffe Del Doge Venezia, Inc.Page 19 of 31
diligently and in good faith continues to cure the failure. Notices given under this Section 17.4
will specify the alleged breach and the applicable Lease provisions. Lessee may, after
expiration of the cure period unless there is an emergency, correct or remedy any failure of
VTA not timely cured and the reasonable cost paid by Lessee will immediately become due
and payable to Lessee by VTA upon written demand accompanied by backup documentation.
18.INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly provided herein, any amount due VTA when not paid when due shall bear
interest at the lesser often percent (10%) per year or the maximum rate then allowable by law
from the date due.
19.VTA’S and JPB/CALTRAIN’S ACCESS.
19.1 Access for Inspection. VTA and VTA’s agents or contractors shall have the right to enter
the Premises at reasonable times, upon not less than twenty-four (24) hours prior notice to
Lessee, for the purpose of inspecting same, showing same to prospective purchasers, lenders or
lessees, and making such alterations, repairs, improvements or additions to the Premises as
VTA may deem necessary. VTA may at any time during the last 90 days of the term of this
Lease place on or about the Premises any ordinary for lease signs.
19.2 Security Measures. Lessee shall have the right to require a reasonable security system,
device,-operation or plan be installed and implemented to protect the Premises or the
Improvements. Should Lessee, in its sole discretion, decide to install such a security system,
Lessee agrees to bear the sole cost and expense of any security system, device, operation or
plan and the installation and implementation thereof. Lessee shall obtain VTA’s prior approval
before installing or implementing any security system, device, operation or plan.
19.3 JPB/Caltrain Access. JPB/Caltrain requires access to the Depot building 24/7 without
prior notification.
20.INSURANCE.
20.1 Lessee’s Insurance. Lessee’s responsibility for the Premises begins immediately upon
delivery and Lessee, at its sole cost and expense, and at no cost to VTA, shall purchase and
maintain in full force and effect during the entire term of this Lease insurance coverage in an
amount(s) and in a form acceptable to VTA as set forth in Exhibit E attached hereto and
incorporated herein by reference. Said policies shall be maintained with respect to Lessee’s
employees, if any, and all vehicles operated on the Premises. The policies shall include the
required endorsements, certificates of insurance and coverage verifications as described in
Exhibit E. Lessee also agees to secure renter’s liability insurance. Insurance form shall name
City as additional insured.
1049&571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 20 of 31
] ~8i20t~8 ........................................................................................................................
20.2 VTA’s Insurance. VTA shall obtain and keep in force during the term of this Lease a
policy or policies of insurance covering loss or damage to the Depot, but not Lessee’s personal
property, fixtures, equipment or tenant improvements, in an amount and providing coverage as
required under the provisions of the sublease between the City and VTA. VTA may self-insure
for the foregoing obligation to the extent permitted in the sublease between the City and VTA.
21.EMINENT DOMAIN.
21.I If all or any part of the Premises or the Depot is condemned by a public entity in the
lawful exercise of its power of eminent domain, this Lease shall cease as to the part
condemned. The date of such termination shall be the effective date of possession of the whole
or part of the Premises by the condemning public entity.
21.2 If only a part of the Premises is condemned and the condemnation of that part does not
substantially impair the capacity of the remainder to be used for the purposes required by this
Lease, Lessee shall continue to be bound by the terms, covenants and conditions of this Lease.
However, the then monthly rent shall be equitably reduced in proportion to the diminution in
value of the Premises. If the condemnation of a part of the Premises substantially impairs the
capacity of the remainder to be used for the purposes required by this Lease, Lessee may:
a. Terminate this Lease and thereby be absolved of obligations under this Lease
which have not accrued as of the date of possession by the condemning public entity; or
b. Continue to occupy the remaining Premises and thereby continue to be bound
by the terms, covenants and conditions of this Lease. If Lessee elects to continue in
possession of the remainder of the Premises, the monthly rent shall be equitably
reduced in proportion to the diminution in value of the Premises.
c. Lessee shall provide VTA with written notice advising VTA of Lessee’s choice
within thirty (30) days of possession of the part condemned by the condemning public
entity.
21.3 VTA shall be entitled to and shall receive all compensation related to the condemnation,
except that Lessee shall be entitled to: (a) that portion of the compensation which represents
the value for the remainder of the Lease term of any Lessee-constructed improvements taken
by the condemning public entity, which amount shall not exceed the actual cost of such
improvements reduced in proportion to the relationship of the remaining Lease term to the
original Lease term, using a straight line approach, (b) any amount specifically designated as a
moving allowance or as compensation for Lessee’s personal property. Lessee shall have no
claim against VTA for the value of any unexpired term of this Lease.
10494~571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 21 of 31
51281200~......................................................................................................................... I
22.
23.
24.
DISPUTE RESOLUTION.
22.1 Unless otherwise mutually agreed to, any controversies between Lessee and VTA
regarding the construction or application of this Lease, and claims arising out of this Lease or
its breach shall be submitted to mediation within thirty (30) days of the written request of one
Party after the service of that request on the other Party.
22.2 The Parties may aNee on one mediator. If they cannot agree on one mediator, the Party
demanding mediation shall request the Superior Court of Santa Clara County to appoint a
mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may
agree to extend the time allowed for mediation under this Lease.
22.3 The costs of mediation shall be borne by the Parties equally.
22.4 Mediation under this section is a condition precedent to filing an action in any court. In
the event of litigation arising out of any dispute related to this Lease, the Parties shall each pay
their respective attorney’s fees, expert witness costs and cost of suit, regardless of the outcome
of the litigation.
NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF VTA.
No official or employee of VTA shall be personally liable for any default or liability under this
agreement.
NON-DISCRIMINATION.
Lessee agrees that in the performance of this Lease, Lessee, its employees and subcontractors
shall not unlawfully discriminate against any employee or applicant for employment, refuse to
enter into any contract, or cancel or decline to renew or reinstate any contract, nor modify the
terms of a contract because of race, religion, color, national origin, ancestry, physical disability,
medical condition, marital status, age, sexual orientation or gender, and shall take affirmative
action to assure that applicants are lawfully employed, and that employees and contracting
parties are lawfully treated, without regard to their race, religion, color, national origin,
ancestry, physical disability, medical condition, marital status, age, sexual orientation or
gender.
25.ESTOPPEL CERTIFICATE.
Each Party shall, from time to time, upon at least thirty (30) days prior written notice from the
other Party, execute, acknowledge and deliver to the other Party, a statement in writing (i)
certifying this Lease is unmodified and in full force and effect, or, if modified, stating the
10494~71023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 22 of 31
nature of the modification and certifying that the Lease, as modified, is in full force and effect,
and the date to which the rental and other charges, if any, have been paid; and, (ii)
acknowledging that there are not to the representing Party’s knowledge, any defaults, or stating
if any defaults are claimed. Any statement may be relied upon by any prospective purchaser,
lender, or other interested party.
26. LIENS.
Lessee agrees at its sole cost and expense to keep the Premises free and clear of any and all
claims, levies, liens, encumbrances or attachments. Lessee may at any time encumber its
fixtures or equipment with purchase money financing, without the consent of VTA, but no
such encumbrance will constitute a lien on VTA’s estate. VTA will comply with all reasonable
and customary requests of any lender or financing party to execute such documents as may be
necessary to carry out the intent of this Section 26.
27.VACATING.
Upon expiration or early termination of the tenancy, Lessee shall completely vacate the
Premises, including the removal of any and all of its personal property. Before departure,
Lessee shall return keys and personal property listed on the inventory to VTA in good, clean
and sanitary condition, reasonable wear and tear excepted. Lessee shall allow VTA to inspect
the Premises to verify the condition of the Premises and its contents.
28.ABANDONMENT.
Lessee’s absence from the Premises for ten (10) consecutive days, without prior notice, during
which time rent or other charges are delinquent, shall be deemed abandonment of the Premises.
Such abandonment will be deemed cause for immediate termination without notice. VTA shall
thereupon be authorized to enter and take possession and to remove and dispose of the property
of Lessee or its guests in accordance with law.
29.NOTICES.
All notices to the Parties shall, unless otherwise requested in writing, be sent to VTA addressed
as follows:
Santa Clara Valley Transportation Authority
Attention: Real Estate Division
3331 N. First Street, Bldg. B-2
San Jose, CA 95134
Or by facsimile at (408) 955-0896
And to Lessee addressed as follows:
10494~571023v4
Lease Agreement bet~veen
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc,Page 23 of 31
Caffe del Doge, Inc (Claudia Cornejo)
Address: 4 ! 9 University Avenue
Palo Alto, CA 94301-1813
Or by facsimile at (206) 350-6349
Notices may be served upon Lessee in person or by first class mail or by certified mail to
Lessee whether or not said mailing is accepted by Lessee. If notice is sent via facsimile, a
signed, hard copy of the material shall also be mailed. The workday the facsimile was sent
shall control the date notice was deemed given if there is a facsimile machine generated
document on the date of transmission. A facsimile transmitted after 1:00 p.m. on a Friday shall
be deemed to have been transmitted on the following Monday.
30.MISREPRESENTATIONS.
Any statements submitted to City in the request for proposal by Lessee are considered
inducements to execute this Lease. Misrepresentation shall entitle VTA to terminate this Lease
at any time.
31.SIGNING AUTHORITY.
Each person whose signature appears below represents that he/she is duly authorized to enter
into this Lease on behalf of the Party indicated below.
32.CHANGE OFLOCKS.
Lessee, at Lessee’s expense, and VTA’s approval, may re-key the locks on the west and east
exterior doors (as indicated on Exhibit A), but not the north door used by VTA bus operators
for restroom access. Lessee shall advise VTA of such action and shall provide VTA and
JPB/Caltrain with keys to said locks. Lessee shall also deliver to VTA the old locks and keys.
The new locks shall become the property of VTA.
CAPTIONS.
The captions of the various sections, paragaphs and subparagraphs of this Lease are for
convenience only and shall not be considered or referred to in resolving questions of
interpretation.
34.INTEGRATED DOCUMENT.
This Lease, including any exhibits attached hereto, embodies the entire agreement between
! 0494\571023v4
Lease Agreement between
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 24 of 31
VTA and Lessee and its terms and conditions. No other understanding, agreements,
conversations or otherwise, with any officer, agent or employee of VTA prior to execution of
this Lease shall affect or modify any of the terms or obligations contained in any documents
comprising this Lease. Any such verbal agreement shall be considered as unofficial
information and in no way binding upon VTA. This Lease may be modified only by a written
amendment duly executed by the Parties to this Lease. All ageements with VTA are subject to
approva! of the VTA Board of Directors and shall be bound thereby.
35. WAIVER.
Waiver by either Party of one or more conditions of performance or any breach or condition
under this Lease shall not be construed as a waiver(s) of any other condition of performance or
subsequent breaches or conditions. The subsequent acceptance by a Party of the performance
of any obligation or duty by another Party shall not be deemed to be a waiver of any term or
condition of this Lease. The exercise of any remedy, right, option or privilege hereunder by
either Party shall not preclude such Party from exercising the same or any and all other
remedies, rights, options and privileges hereunder and a Party’s failure to exercise any remedy,
right, option or privilege at law or equity, or otherwise which such Party may have, shall not be
construed as a waiver.
36.CITY/VTA SUBLEASE
Lessee has been provided a copy of the March 31, 1981 sublease between City and VTA, and
VTA and Lessee agree that al! of the provisions of that document shall be incorporated by
reference into this Lease and that Lessee agees to be bound by all the terms, covenants, and
conditions of that document.
37.INTERPRETATIONS.
In construing or interpreting this Lease, the word "or" shall not be construed as exclusive and
the word "including" shall not be limiting. The Parties agree that this Lease shall be fairly
interpreted in accordance with its terms without any strict construction in favor of or against
either Party.
38.SEVERABILITY CLAUSE.
If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for
any reason, then such provision shall be modified to the minimum extent necessary to make the
provision legal, valid and enforceable, and the other provisions of this Lease shall not be
affected thereby.
39.GOVERNING LAW.
! 0494’~571023v4
Lease Agreement between
Santa Clara Valley Transportation Authori~, and
Caffe Del Doge Venezia, Inc.Page 25 of 31
5/28/200,~ ..........................................................................................................................
This Lease shall be governed and construed in accordance with the statutes and laws of the
State of California.
40. VENUE.
If suit is brought by any Party to this Lease, the Parties agree that venue shall be exclusively
vested in the state courts of the County of Santa Clara.
41.COMPLIANCE WITH LAWS.
The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of
the federal, state and local governments in the performance of their rights, duties and
obligations under this Lease.
42.BROKERS.
Each Party represents that it has not had dealings with any real estate broker, finder, or other
person, with respect to this lease in any manner. Each Party ("Indemnifying Party") shall hold
harmless the other Party from all damages resulting from any claims that may be asserted
against the other Party by any broker, finder, or other person with whom the Indemnifying
Party has or purportedly has dealt.
LESSEE:
Caffe Del Doge Ven ezia, In c., a Delaware corporation,
dba Caffe Del Doge
By:
Claudia Cornejo
Title: President and CEO
Local Address: 419 University Ave
Telephone:(650) 796- 3124
Fax:(206) 350-6349
LESSORS:
Santa Clara Valley Transportation Authority
10494L571023v4
Lease Agreement betnveen
Santa Clara Valley Transportation Authority and
Caffe Del Doge Venezia, Inc.Page 26 of 31
By:
NIichael T. Burns
Title: General Manager
Approved as to form:
Counsel
With The Consent of:
Stanford:
The Board of Trustees of the
Leland Stanford Junior University,
a body having corporate powers
under the laws of the State of California
By Stanford Management Company
By
Title:
City of Palo Alto, California,
a chartered California municipal corporation
By:
~ City Manager
10494’,571023,,’4
Lease A~_reement between
Santa Clara Valley Transportation Authority and :
Caffe Del Doze Venezia. Inc.Page 27 of 3 t :
COMMERCIAL PROPERTY LEASE AGREEMENT
BY AND BETWEEN
SANTA CLARA VALLEY TRANSPORTATION AUTHORITY
CAFFE DEL DOGE VENEZIA, INC.
EXHIBIT B
General Requirement and Specifications for Custodian Services
Facility:
Location:
Train Depot Facilities and Restroom
Servicing Frequency:Five Days per Week, (Monday through Friday)
Contractor shall provide initial and annual cleaning service for the complete interior of
the facility, then daily, monthly and semi-annually service thereafter for designated areas
as listed below. Contractor shall use "green" cleaning products to comply with Green
Seal GS-37, and recycled content paper products.
Type of Service:Restrooms - Complete daily servicing.
Empty all trash and waste containers in all restrooms. All waste
containers to be kept lined with proper liners, which must be replaced
immediately when needed. Empty and replace with new liners all
sanitary napkin receptacles. Replace and refill, as needed, all dispensers
and containers. All soap dispensers require non-anti-bacterial hand soap.
Damp wipe toilet partitions and all wall areas showing any stains, spots,
grime and/or any abuse in general. Remove any graffiti immediately
from any surface as it appears, as well as "spitballs," etc. Clean mirrors
and keep all chrome fixtures clean. Sweep floors and properly dispose of
all trash items. Damp mop floor areas with disinfectant cleaner. Clean
drains, counter tops, and both the interior and exterior surfaces of sinks,
toilet bowls and urinals with brush and disinfectant cleaner. Pour one
gallon of water down each floor drain.
Frequencv:Daily, Monday through Friday
Type of Service:
Freq uencv:
Hallway and Lobby Area Including Coffee Stand
Empty all trash receptacles and replace liners with proper size and depth.
Sweep floors and dispose of all trash items. Damp mop all floor areas
with proper disinfectant cleaners. Clean marks from glass on entry, doors.
Daily, Monday through Friday
Type of Service:
Frequency:
Entire Facility
Strip and refinish all ceramic and vinyl tiled floor areas.
Twice Annually
Type of Service:Entire Facility
Wash interior and exterior of all windows.
Frequency:
Type of Service:
Frequency:
Twice Annually
Entire Facility
Spray Buff with a high-speed buffer all tiled areas including restrooms,
lobby and hallway.
Monthly
Type of Service:Entire Facility
Dust all countertops, ~vindow ledges, etc. Remove cobwebs from walls
and ceilings.
Frequency:Monthly
COMMERCIAL PROPERTY LEASE AGREEMENT
BY AND BETWEEN
CITY OF PALO ALTO, CALIFORNIA
AND
CAFFE del DOGE
EXHIBIT C
10.
Secretary of the Interior’s Standards for Rehabilitation*
A property shall be used for its historic purpose or be placed in a new use that requires minimal change
to the defining characteristics of the building and its site and environment.
The historic character of the property shall be retained and preserved. The removal of historic material
or alteration of features and spaces that characterize a property shall be avoided.
Each property shall be recognized as a physical record of its time, place and use. Changes that create a
false sense of historic development, such as adding conjectural features or architectural elements from
other buildings, shall not be undertaken.
Most properties change over time: Those changes that have acquired historic significance in their own
right shall be retained and preserved.
Distinctive features, finishes, and construction techniques or examples of craftsmanship that
characterize a historic property shall be preserved.
Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration
requires replacement of a distinctive feature, the new feature shall match the old in design, color,
texture, and other visual qualities and, where possible, materials. Replacement of missing features shall
be substantiated by documentary, physical or pictorial evidence.
Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not
be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means
possible.
Significant archeological resources affected by a project shall be protected and preserved. If such
resources must be disturbed, mitigation measure shall be undertaken.
New additions, exterior alterations, or related new construction shall not destroy historic materials that
characterize the property. The new work shall be differentiated form the old and shall be compatible
with the massing, size, scale, and architectural features to protect the historic integrity of the property
and its environment.
New additions and adjacent or related new construction shall be undertaken in such a manner that if
removed in the future, the essential form and integrity of the historic property and its environment
would be unimpaired.
*Guidelines for these Standards are available for public review in the Palo Alto Planning Department.
0
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X
Z
Z
COMMERCIAL PROPERTY LEASE AGREEMENT
BY AND BETWEEN
SANTA CLARA VALLEY TRANSPORTATION AUTHORITY
AND
CAFFE DEL DOGE
EXHIBIT E
INSURANCE REQUIREMENTS
Insurance Requirements for Lessee:
Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its
sole cost and expense. Such policies shall be maintained for the full term of this Lease and the related warranty period (if
applicable). For purposes of the insurance policies required under this Lease, the term "Santa Clara Valley Transportation
Authority" ("VTA") shall include the duly elected or appointed members of the Board of Directors, commissioners,
officers, agents, employees and volunteers of VTA, individually or collectively. .. -
Coverages ’..
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1) Insurance Services Office Commercial Ge~neral Liability coverage (occurrence form CG 0001).
2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code I (any
auto).
3) Workers’ Compensation insurance as required by the Labor Code of the State of California and Employer’s
Liability Insurance (for lessees with employees).
4) Property insurance against all risks of loss to any Lessee improvements or betterments
The policy or policies of insurance maintained by LESSEE shall provide the following limits and coverages:
POLICY
(1) Commercial General Liability
(2) Automobile Liability
Including Owned, Hired and
Non-Owned Automobiles
MINIMUM LIMITS OF LIABILITY
$2,000,000 per each occurrence for bodily injury, personal injury and
property damage
$1,000,000 Combined Single Limit
(3) Workers’ Compensation
Employers Liability
Statutory
$1,000,000 per accident for bodily injury or disease
(4) Lessee’s Property Insurance
Lessee shall procure and maintain property insurance coverage for:
(a) all office furniture, trade fixture, office equipment, merchandise,
and all other items of Lessee’s property in, on, at, or about the
premises and the building, including property installed by, for,
or at the expense of Lessee;
(b) all other improvements, betterments, alterations, and additions to the premises.
Lessee’s property insurance must fulfill the following requirements:
(a) it must be written on the broadest available "all risk" policy form or an equivalent form acceptable
to VTA, including earthquake sprinlder leakage.
(b) for no less than ninety percent (90%) of the full
replacement cost (new without deduction for depreciation)
of the covered items and property; and
(c) the amounts of coverage must meet any coinsurance
requirements of the policy or policies.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by VTA. At the option of VTA either: the
insurer shall reduce or eliminate such deductibles or self-insured retentions as respects VTA, its officers, officials,
employees and volunteers; or the LESSEE shall procure a bond guaranteeing payment of losses and related investigations,
claim administration and defense expenses.
Insurance shall be in full force and effect commencing on the first day of the term of this Lease.
Each insurance policy required by this Lease shall:
]o Be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt ~,- ,-~--¯ ,. :. :
requested, has been given to VTA.
Include a waiver of all fights of subrogation against VTA and the members of the VTA Board of -
Directors, elective or appointive officers or employees, and each party shall indemnify the other against " . :. .’ ..,
any loss or expense including reasonable attorney fee§, resulting from the failure to obtain such waiver ....
Name the SANTA CLARA VALLEY TRANSPORTATION AUTHORITY as a loss payee on the
property policy.
Provide that VTA, its officers, officials, employees, agents and volunteers are to be covered as insureds
as respects: liability arising out of activities performed by or on behalf of the LESSEE; products and
completed operations of the LESSEE; premises owned, occupied or used by the LESSEE; or
automobiles owned, leased, hired or borrowed by the LESSEE. The coverage shall contain no special
limitations on the scope of protection afforded to VTA, its officers, officials, employees, agents or
volunteers.
Provide that for any claims related to this Lease, the LESSEE’s insurance coverage shall be primary
insurance as respects VTA, its officers, officials, employees, agents and volunteers. Any insurance or
self-insurance maintained by VTA, its officers, officials, employees, agents or volunteers shall be
excess of the LESSEE’s insurance and shall not contn’bute with it.
Provide that any failure to comply with reporting or other provisions of the policies including breaches
of warranties shall not affect coverage provided toVTA, its officers, officials, employees, agents or
volunteers.
Provide that LESSEE’s insurance shall apply separately to each insured against whom claim is made or
suit is brought, except with respect to the limits of the insurer’s liability.
LESSEE agrees to promptly pay to VTA as Additional Rent, upon demand, the amount of any increase
in the rate of insurance on the Premises or on any other part of Building that results by reason of
LESSEE’s act(s) or LESSEE’s permitting certain activities to take place.
Acceptability of Insurers
All insurance policies shall be issued by California-adrrfitted carriers having current A.M. Best’s ratings of no lower than
A-:VIL
Other Insurance Requirements
LESSEE shall deposit with VTA, on or before the effective date of this Lease, certificates of insurance necessary to satisfy
VTA that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the
certificates therefor on deposit with VTA during the entire term of this Lease. Should LESSEE not provide evidence of
such required coverage at least three (3) days prior to the expiration of any existing insurance coverage, VTA may
purchase such insurance, on behalf of and at the expense of LESSEE to provide six months of coverage.
VTA shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in
the opinion of VTA, the insurance provisions in this Lease do not provide adequate protection for VTA and for members
of the public using the Premises, VTA may require LESSEE to obtain insurance sufficient in coverage, form, and amount
to provide adequate protection as determined by VTA’s Risk Manager. VTA’s requirements shall be reasonable and shall
be designed to assure protection from and against the kind and extent of risk that exists at the time a change in insurance is
required.
VTA shall notify LESSEE in writing of changes iia the in~uranc~ requirements. If LESSEE does not deposit copies of.
acceptable i~sutance p61icies ~th: VTA inc0riJ6fatin~sudh’~hanges Within sixty (60) days 6f receipt of such.noticei 0’fi’,in :
the event LESSEE fails to maintain in effeCt ~nyrequir~d ins’urance coverage, LESSEE shall be in default under:thlsitetk<e
without further notice to LESSEE. Such failure shall constitute a material breach and shall be grounds for immediate
terminafionofthisLeaseatthe:OpfionoflVTA. : " ’. ’’ ::"’- . "" ".
¯The Wocufing ofsuCh required policy or policies of insUi-ance si~a’ll nbtbe :consirfled to li~it LESSEE’S liability hereunder....: .-.., ~-
ngr to fulfill the indemnification provision and requirements of this Lea~e: Not?,vith~tanding the poli.cy or policies6f:
insurance, EESSEE shall be obligated for the full and total amount of an) damage, injury, Or loss caused by or connected ~: - ~ ¯
with this Lease or with use or occupancy of the Premises. ...
ATTACHMENT B
March ~, 2008
Santa Clara Valley Transportation Authority
3331 North First street, Building B-2
San Jose, CA 95134-1927
Attention:
Lease dated as of June 10, 1915 (the "Lease"), by and between The Board
of Trustees of the Leland Stanford Junior University ("Landlord") and the
City of Palo Alto ("Tenant"), covering certain premises (the "Premises")
commonly known as the University Avenue Train Depot, Palo Alto, CA;
Sublease dated as of March 31, 1981 (the "Sublease") by and between
Tenant and The Santa Clara Valley Transportation Agency ("Subtenant") for
a portion of the Premises (the "Sublease Premises"); Sub-Sublease dated
as of ., 2008 (the "Sub-Sublease") by and between the
Subtenant and Caffe Del Doge Venezia, Inc., dba Caffe Del Doge (the "Sub-
Subtenant") for a portion of the Sublease Premises (the "Sub-Sublease
Premises").
Gentlemen/Ladies:
We understand that Subtenant has entered into the Sub-Sublease with Sub-
Subtenant and, in accordance with the terms of the Lease, has requested the consent
of Landlord to such subletting. By execution of this letter agreement, Tenant, Subtenant
and Sub-Subtenant acknowledge and agree to the terms hereof. Landlord’s consent
shall not be effective until receipt by Landlord of a counterpart of this letter agreement
duly executed by each of Tenant, Subtenant and Sub-Subtenant. Sub-Subtenant shall
have no right to occupy the Sub-Sublease Premises unless and until a fully executed
original of this letter agreement is delivered to Landlord, and any premature occupancy
shall, at Landlord’s election, be a default under the Lease.
1. Subject to the following provisions of this letter agreement, Landlord
hereby consents to Subtenant’s sublease of the Sub-Sublease Premises to Sub-
Subtenant pursuant to the Sub-Sublease.
2. The Sub-Sublease is and shall remain at all times subject and subordinate
in all respects to the Lease.
3. This consent shall not modify or be deemed to modify or amend the Lease
in any way, or to impose on Landlord any obligation to provide notice to, or obtain
consent from, Sub-Subtenant with respect to amendments, defaults, waivers or any
other matters pertaining to the Lease or the Premises. Any waiver by Landlord of its
rights shall be made only by a writing signed by Landlord.
A/72464713.1
4. At Landlord’s sole option, any termination of the Lease, including but not
limited to by reason of its expiration, or a voluntary surrender of the Lease by Tenant, or
any default of Tenant, shall automatically and without notice or demand, terminate the
Sub-Sublease and Sub-Subtenant agrees promptly to surrender the Sub-Sublease
Premises to Landlord upon such termination without compensation from Landlord.
5. By execution of this letter agreement, Sub-Subtenant hereby agrees that
all indemnities set forth in the Sub-Sublease in favor of Subtenant shall also apply to
and benefit Landlord.
6. Neither Tenant, Subtenant nor Sub-Subtenant shall use any name,
trademark or service mark of Landlord or Stanford University without the prior written
consent of Landlord which consent may be given or withheld in Landlord’s sole
discretion.
7. This agreement shall not be nor be deemed to be a consent or waiver or
amendment of the Lease with respect to any other or future transaction, whether similar
or dissimilar, and any other or future transaction shall require Landlord’s written
consent, which consent, except as otherwise expressly provided in the Lease, may be
given or withheld in Landlord’s sole discretion.
Please confirm your acceptance of and agreement with the terms hereof by
signing and returning to the undersigned the enclosed copy hereof.
LANDLORD:
THE BOARD OF TRUSTEES OF THE
LELAND STANFORD JUNIOR UNIVERSITY
By:
Its:
ACKNOWLEDGED AND AGREED:
SUBTENANT:
SANTA CLARA VALLEY
TRANSPORTATION AUTHORITY
SUB-SUBTENANT:
CAFFE DEL DOGE VENEZIA, INC.,
By:By:
Its:Its:
Title:Title:
Dated:Dated:
A/72464713.1
ATTACHMENT C
Proposal Evaluation Criteria
o
°
o
o
10.
The extent to which the proposal satisfies a public need or provides public benefit.
The extent to which the proposal is responsive to the guidelines and standards for
rehabilitation for historic preservation of the property as set out in the Secretary of the
Interior’s Standards for Rehabilitation of Historic Buildings attached as Exhibit B to the
Information Flyer.
The consistency of the proposed use with existing City goals and objectives (set forth in the
Comprehensive Plan, Zoning Ordinance, and Municipal Code.
The impact of the proposed use upon the other tenants of the Depot, the immediate
neighborhood, the community generally, and the environment.
The history and assessment of the proposer’s ability to carry out the proposed improvements
and operate the facility and services as proposed;
The consideration (monetary and non-monetary) to be provided to the City.
The degree of public access, i.e., the numbers of people, especially City residents and
taxpayers, that will be served by the proposed use.
The fees that will be charged to Palo Alto citizens, if any.
A three-year pro-forma financial analysis of the proposed use, setting forth the project
revenues and expenses for that period of time.
Evidence of the proposer’s ability to finance or to obtain financing for the required
improvements.
CMR:255:07 Page 1 of 1
ATTACHMENT D
SUMMARY OF SUBLEASE
for the University Avenue Depot Coffee Concession
95 University Avenue, Palo Alto
LESSOR:
Santa Clara Valley Transportation Authority (VTA)
TENANT:
Caffe Del Doge Venezia, Inc.
CONSENTORS:
Stanford University (Stanford)
City of Palo Alto (City)
PREMISES:
95 University Avenue, University Avenue Depot, approximately 1,289 square feet of interior
space, including the cafe Area, an office, portions of the news stand and ticket storage areas on the
mezzanine, and an employee !ocker area located in the women’s waiting room.
PURPOSE:
To provide for: 1) a food and beverage service (cafe) for the general public in an approximately
1,289 square-foot portion of the 5,375 square-foot Depot; 2)janitorial service for the Depot; and 3)
public access to restrooms within the Depot.
TERM:
The primary term wilt be approximately 5 years, from the delivery date of the lease through the
remainder of VTA’s sublease with City (expiration date is June 30, 2013 unless City exercises its
right to terminate its lease with Stanford, in which case expiration date is February 26, 2013).
OPTIONS TO EXTEND:
Tenant may extend the lease beyond the primary term for two consecutive, five-year periods, with
either VTA or City as sublessor. In the event the term of the sublease between VTA and City
terminates at or before the end of the primary term, as anticipated, or in the event the sublease
between VTA and City is extended and terminates at any other time, Tenant shall become a direct
subtenant of City at the time VTA’s lease with City terminates. Tenant’s options to extend are
subject to City exercising its option to extend its lease with Stanford.
USES:
A. REQUIRED USE:
1. Caf~ service consisting of non-alcoholic beverage and food service for on-
premises consumption and take-out, including coffee, specialty drinks and related
items.
2.Public access to Depot restrooms to be provided during operating hours of caf~
service. Access to be provided by unlocking restroom doors upon opening the
caf~ and locking the doors upon closing. Tenant agrees and acknowledges that
VTA bus operators will be allowed to use restrooms 24 hours per day, seven days
per week.
Janitorial service for the Premises, Depot main room and restrooms as outlined in
Exhibit B to the sublease.
B.RESTRICTED USE: Tenant shall use the premises only for required uses without VTA’s prior
written consent.
CONSIDERATION/RENT:
No rent for the first 6 months of retail operations. Beginning on the first day of the seventh (7tu) month
of retail operations, the Base Rent will be $1,500.00 per month. Beginning on the first day of the first
Option Period, the Base Rent will be $1,650.00, and will be adjusted each year based on the Consumer
Price Index (CPI).
SECURITY DEPOSIT:
$2,000, which VTA may use to remedy any Sublessee default.
REQUIRED AND PERMITTED IMPROVEMENTS:
At its own cost, Tenant must design, construct and install appropriate improvements, in accordance
with the Secretary of Interior’s Standards for Historic Rehabilitation and as approved by the City
Building and Planning Divisions, to accommodate the required uses and services.
Except for the placement of business fixtures and equipment, Tenant may not make any alterations or
improvements to the premises without prior written consent of VTA.
OPERATING REQUIREMENTS:
Tenant must: !) use the Premises for required uses only except for space for office, clerical or other
non-sales uses as is reasonably required; 2) maintain a written schedule of operating hours and prices
charged, and upon written request, provide VTA a copy of the schedules and procedures; and 3)
operate the services in a competent and efficient manner comparable to other well-managed operations
of a similar type.
MAINTENANCE:
Tenant is responsible for maintaining the premises and for providing janitorial service to the Depot
main room and restrooms. VTA is responsible for the maintenance and repair of the Depot as provided
in its sublease with City, including the main support systems and common areas not exclusively
serving the Premises.
UTILITIES:
Tenant to pay VTA for its pro-rata share of public utility expenses. Tenant is responsible for a!l
computer hardware/software acquisition, installation, maintenance and removal.
ASSIGNMENT/SUBLETTING:
Assignment or encumbrance of the Sublease is prohibited without first obtaining the written consent of
the VTA.
TAXES, ASSESSMENTS, INSURANCE:
Tenant shall be responsible for all taxes and assessments for the premises and Tenant’s personal
property, and shall maintain insurance meeting the VTA requirements for insurance protection. VTA
shall maintain insurance coverage as required under its sublease with the City.