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HomeMy WebLinkAboutStaff Report 419-08City of Palo Alto City Manager’s Summary Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:OCTOBER 20, 2008 CMR:419:08 REPORT TYPE: CONSENT SUBJECT:Approval of First Amendment to the Option to Lease Agreement with the Environmental Volunteers for the Former Sea Scout Building Located at 2560 Embarcadero Road RECOMMENDATION Staff recommends that Council approve the attached First Amendment to the July 9, 2008 Option to Lease Agreement with the Environmental Volunteers for the property located at 2560 Embarcadero Road, known as the former Sea Scout Buildingt BACKGROUND The former Sea Scout building is a 2,209 square foot, wood fi’ame structure designed by Birge and David Clark, and donated to the City by Lucie Stem on May 30, 1941. Located in the Palo Alto Baylands Nature Preserve, the building is cun’ently in poor condition; and its floors have been subjected to flooding during biannual extreme high tides. Its rehabilitation requires extensive sub-floor construction and relocation to a higher elevation at or near its current location in the Baylands Preserve. On May 6, 2002, Council adopted the Historic Resources Board’s (HRB) recommendation to designate the former Sea Scout building as a Category 1 structure to the City of Palo Alto’s Historic Inventory. On July 9, 2007, after a lengthy Request for Proposals (RFP) process, Council approved a two-year Option to Lease Agreement (Agreement) with Environmental Volunteers (EV), a non-profit organization promoting the understanding of and responsibility for the environment through hands-on science education. The Agreement provides for a two-year option term during which EV must satisfy certain conditions prior to exercising its option and entering into a 40-year lease to relocate, rehabilitate and reuse the site as its office headquarters for conducting its mission and providing other public benefits. Conditions of the Agreement include EV obtaining approval of its project plans from the City and other agencies having jurisdiction over the Baylands. On September 4, 2008, following review and approval of the CMR:419:08 Page 1 of 3 project by the HRB and the Architectural Review Board (ARB), the project received final approval from the Director of Planning and Community Enviromnent. On September 15, 2008, Cour~cil adopted a Park Improvement Ordinance for the rehabilitation and relocation of the Sea Scout Building in accordance with the approved EV project plans. DISCUSSION Since entering into the Agreement with the City, EV has diligently pursued its required approvals from the City and several other agencies having Baylands jurisdiction. All approvals appear to be complete, with the exception of the California State Lands Commission (State). EV notified the State in February 2008 of its intent to develop and operate the former Sea Scout Building, but received no response until September 2008. The State sent notification that, based on its alleged sovereign rights to the property, it wanted either the City or the EV to enter into a lease with the State as a condition of its approval. The issue of who owns the Baylands has come up periodically over the years. The State claims ownership of former submerged lands in the Baylands which existed at the time of California’s incorporation into the United States in the 1850’s. The City disagrees with this claim based on its deeds for the Baylands property and the historic use of the property. A 1972 lease between the State and the County pel~itting continued County use of the yacht harbor and the airport acknowledges the dispute between the City and State and allows the County to proceed with its development plans. In 1989, the City and State entered into a 49-year lease agreement to avoid protracted litigation to resolve the ownership question and allow the City to construct the Byxbee Park improvements. In 1991, the City and State entered into a 49-year lease for construction of improvements in a portion of the Baylands in the vicinity of the former Sea Scout building. All three agreements reserve the right of both the City and State to assert their mutually adverse claims of ownership at some time in the future. It is critical to the EV project that this jurisdictional dispute not impede prompt construction. As a nonprofit organization, EV is fundraising in order to undertake the project. Of its $3.2 million construction budget, EV has commitments for $2.2 million and requests of new donors in the works for an additional several hundred thousand dollars. Of the $2.2 million in commitments, over $300,000 of that are pledges that are time-bound and linked to the project beginning by a set date. If EV does not begin construction on time, it could potentially lose those pledges. In addition, EV’s construction schedule is constrained by the need to protect the clapper rail, an endangered species whose Baylands habitat cannot be disturbed during its breeding season which begins in February. If EV cannot begin construction very soon, the project may not be completed by February 2009 when construction must cease. To avoid delaying the EV project while the City and State negotiate to resolve the issue, staff proposes the attached First Amendment to the Option to Lease with EV. The amendment will add a clause to the option agreement and future lease addressing the jurisdiction dispute by requiring the City to defend any ownership claims asserted by the State. In the event the State is successful in its title claim, the City will indemnify EV for any lost investment. The proposed amendment will enable EV to sign the lease and proceed with its construction in a timely manner so as not to jeopardize the project. In the meantime, staff will negotiate with the CMR:419:08 Page 2 of 3 State to amend the existing lease to permit the EV project. Once this occurs, the defense and indemnity obligation to EV will terminate. RESOURCE IMPACT There will be no resource impacts of this amendment unless the City is unable to negotiate a lease with the State and the State is determined to be the owner of the property. If these two events occurred the City could be subject to an indemnity obligation equal to the depreciated value of the construction costs of the building. (approximately $1-2 million). This possibility is currently considered to be very remote. POLICY IMPLICATIONS This recommendation is consistent with existing City policy. ENVIRONMENTAL REVIEW An Initial Study/Draft Mitigated Declaration for the rehabilitation and relocation project was adopted by the Director of Planning and Community Enviromnent on September 4, 2008. PREPARED BY: MARTHA MILLER Senior Financial Analyst DEPARTMENT HEAD APPROVAL: LALO Services CITY MANAGER APPROVAL: JAMES/Y-/EENE City M~6ager ATTACHMENTS Attachment A:Amendment to Option to Lease CMR:419:08 Page 3 of 3 ATTACHMENT A FIRST AMENDMENT TO OPTION TO LEASE AGREEMENT This First Amendment is dated October __, 2008 for reference purposes only (the "First Amendment") is made to that Option to Lease Agreement dated July 11, 2007 (the "Option to Lease") by and between the City of Palo Alto, a California municipal corporation ("City"), and the Environmental Volunteers, a California non-profit corporation ("Optionee"), who agree that the Option to Lease is modified, changed and amended as follows: 1. Recitals: The parties have entered into this First Amendment with reference to the following facts and objectives: A.Optionee has been informed that the State of California, through the State Lands Commission (the "State"), asserts that it has a claim to ownership of the land which the City has agreed to lease to Optionee pursuant to the Option to Lease (the "Claim"). B. It is the position of the City that it is the owner in fee of such lands which are the subject of the State Claim. C.The State has made similar sovereignty claims with respect to other property l~cated in the Baylands and the State has entered into lease agreements covering the disputed property without prejudice to claims by the City or State regarding ownership of such property. A copy of one such agreement is attached hereto as Exhibit 1. D.The existence of the State claim threatens to impair Optionee’s ability to finance and complete the Project. In addition, should the State Claim be asserted and found to be meritorious such that" " State is determined to be the owner in fee of the Property, Optionee’s lease would be adversely affected and possibly forfeited, resulting in loss of Optionee’s investment and the benefits of its right to lease the property pursuant to the Option to Lease. ~ E.In order to induce Optionee to continue its efforts to satisfy the conditions to exercise, and to exercise, the option to lease pursuant to the Option to Lease and to protect Optionee from loss as a consequence of the State Claim, City is willing to provide the contractual protection to Optionee that is set forth in this First Amendment. 2. Indemnification: Section II entitled "Premises" of the Lease that is Exhibit I to the Option to Lease is hereby amended by the addition of the following, which shall be added to the form of Lease prior to its execution by City and Optionee, if the Option to Lease is exercised by Optionee: "CITY and TENANT acknowledge that the State of California through the State Lands Commission (the "State") has asserted that the State, by reason if its sovereignty, is the owner of some right, title, or interest in the Property resulting from its legal character as tidelahds or submerged lands (the "State Claim"). CITY denies the State Claim and asserts that CITY is the owner in fee of the entire Property, free and clear of any such State of California sovereign right, title, or interest. CITY agrees to indemnify, defend with counsel reasonably acceptable to Tenant, protect, and hold harmless TENANT from and against all claims, liabilities, actions, proceedings, damages, losses, and expenses (including, without limitation, reasonable attorneys’ and experts’ fees) resulting from the assertion of the State Claim and/or the ultimate determination by a court of competent jurisdiction that the State Claim is valid in any respect, and/or otherwise as a consequence of the State Claim. In determining amounts due pursuant to the foregoing indemnification, in the event the Lease is terminated, TENANT’S loss shall include the fair value of its full investment in the Project (including without limitation all costs incurred to obtain 081013 jb 0130381 1 CITY:OPTIONEE: CIT~ OF PALO ALTO By: Its: ATTEST: Allan B~kowitz Ex~utive Director By:By: City Clerk Its: APPROVED AS TO FORM: St. As~. City Attorney P,,ECOMMENDED FOR APPROVAL: By: By: Director, Planning and Community Environment Dire~, Community Services STATE OF CALIFORNIA STATE LANDS CO~4ISSION EXHIBIT I FOR RECORDERS U~:: ORLY RECORDED AT THE REQUEST OF State of California State Lands Commission Document entitled to free recordation pursuant to Government Code Section 27383. WHEN RECORDED MAIL TO State Lands Commission 1807 - 13th Street Sacramento, Catifornia 95814 Attention: Title Unit LEASE NO. PRC 7578.9 W 24680 This Lease consists of this summary and the following attached and incorporated parts: Section 1 Sec~’ion 2 Basic Provisions Special Provisions Amending or Supplementing Section 1 or 4 Section 3 Description of Lease Premises Section 4 GeneralProvisions SECTION 1 BASIC PROVISIONS THE STATE OF CALIFOP~NIA, hereinafter referred to as Lessor acting by and through the STATE LAIRDS COMMISSION (1807 13th Street, Sacramento, California 95814), pursuant to Division 6 of the Public Resources Code and.Title 2, Division 3 of the California Code of Regulations, and for consideration specified in this Lease, does hereby lease, demise and let to: CITY OF PALO ALTO DEPARTMENT OF PUBLIC WORKS hereinafter referred to as Lessee: WHOSE MAILING ADDRESS IS:250 Hamilton Avenue Palo Alto, California 94303 those certain lands described in Section 3 subject to the reservations, terms, covenants and conditions of this Lease. LEASE TYPE~. General Permit - Public Agency Use LAND TYPE:Filled and unfilled land LOCATION:Palo Alto, Santa Clara County LAND USE OR PURPOSE: Palo Alto Harbor Improvements TERM: Forty-nine (49) years; beginning.April i, 1992 ending March 31, ~89x~, unless sooner terminated as provided under this Lease. ~- CONSIDERATION: The public use and benefit with the State reserving the right at any time to set a monetary rental if the Commission finds such action to be in the State’s best interest, as to any portion of the .property ultimately confirmed into State ownership; AUTHORIZED IMPROVEMENTS AND ACTIVITIES: construction of a sailing station facility, demolition of existing boat launch and backfilli~g and revegetation, restoration of 11.2 acres of marshlands, and public access improvements. LIABILITY INSU~RANCE: N/A SURETY BOND OR OTHER SECURITY:N/A SECTION 2 The State alleges that the State, by reason of its sovereignty, is the owner of some right, title, or interest within the leased premises resulting from its legal character as tideland or submerged lands, in whole or in part. Lessee denies the State’s allegations and asserts Lessee’s ownership free and clear of any such State sovereign right, title, or interest. A final resolution of the title dispute will require time-consuming and costly studies of the evidence and may also require litigation. In avoidance of the time, expense, and uncertainties required to confirm the respective interests of either party, this permit is being issued to Lessee without clearing the title claims of the parties and, except for the rights granted to Lessee and the other terms and conditions of this permit, the issuance by State and the acceptance by Lessee," of the within permit, is without prejudice to any other claims, demands, causes of action, contentions, or assertions by either party at any time of their owner~_i~ of any right, title, or interest within the leased premise~,"~ o~ any portion thereof, whether the dispute is the subject or pending litigation, or otherwise. However, nothing contained herein shall prevent either So party from receiving the benefits of, or enforcing in any lawful manner, the other terms and conditions of this permit, and State shall take no action that will unreasonably interfere with the uses of the leased premises by Lessee pursuant to the terms and conditions of this permit. Paragraph 2(a) (2), Section 4, entitled "General Provisions" is hereby amended to provide that the State’s reserved right to set a monetary rental, if ever exercised, shall apply only to that portion of the property ultimately confirmed into State ownership either by agreement, or by a final judgement rendered by a court of competent jurisdiction. Paragraphs ll(c), 12, and 5 of Section 4 are hereby amended to provide that any right of State contained in said paragraphs authorizing the State to: repossess the leased premises; remove persons, property, or improvements from leased premises; require Lessee to remove all improvements from leased premises; remove natural resources or grant leases to remove natural resources from the leased premises; if ever exercised, shall apply only to that portion of the leased premises ultimately confirmed into .State ownership either by agreement, or by a final judgment rendered by a court of competent jurisdiction. The second sentence of Paragraph 13, said paragraph entitled "Quitclaim", in Section 4,_ is amended~to read: "Should Lessee, upon request by Lessor, fail or refuse to deliver the release as aforesaid, a written notice by Lessor reciting the failure or refusal of the Lessee to execute and deliver said release as herein provided, shall from the date of recordation of such notice, be conclusive evidence against Lessee and all persons claiming under Lessee of the termination of this le~se.’, (The wording "and any claims and rights of Lessee in the Lease Premises" is deleted.) The State acknowledges that the dredged materials to be taken from Harbor Point, approximately 198,000 cubic yard~ in connection with the land restoration project, were placed at Harbor Point incidental to dredging activities at the former Palo Alto Yacht Harbor, and that a maximum of 198,000 yards will be removed from Harbor Point and used as foundation cover for landfill operations at Byxbee Park, a public use facility. The State and the City of Palo Alto acknowledge that Byxbee Park is located in an area of disputed land titles, and that a non- prejudicial permit was heretofore entered into between the parties, confirming in part that such land titles therein remain unresolved, as stipulated in that certain permit identified as PRC 7348.9. The State and the City of Palo Alto agree that upon resolution of the land title uncertainties within the lands covered in said permit PRC 7348.9, that the dredged materials to be deposited at Byxbee Park shall become a part of the real property over which they are deposited, and shall be owned in fee simple by the lawful owner of the underlying lands at that location. Prior to the commencement of work, the City of Palo Alto agrees to submit, for review and approval by the Staff of the State Lands Commission, the plan by Wetlands Research Associates for the restoration of 11.2 acres as marshlands referenced in the City’s Negative Declaration (SCH #91013031) at page 16. SECTION 3 Land Description o D".0 SECTION 4 GENERAL PROVISIONS GL.’NI:RAL ihL’se provisions are applicable to all leases, permits, rights-of-way, easc~nents, or licenses or other interests in re~l property conveyed by the State Lands Commission. CONSIDERATION (a)Categories (I) Rental Lessee shall pay the annual rental as stated in this Lease to Lessor without deduction, delay or offset, on or before the beginning date of this Lease and on or before each anniversary of its beginning date during each year of th~ Lease term. (2) Non-Monetary Consideration If the consideration to Lessor for this lease is the publ[c use, benefit, health or safety, Lessor shall have the right to r~view such consideration at any time and set a monetary rental if the State Lands Coramission, at its sole discretion, determines that such action is in the best interest of the State. (b) Modification Lessor may modify the method, amount or rate of consideration e~fective on each fifth anniversary of the beginning date of this Lease. Should Lessor fail to exercise such right effective on any fifth anniversary it may do so effective on any one (1) of the next four (4) anniversaries following such fifth anniversary, without prejudice to its right to effect such modification on the next or any succeeding fifth anniversary. No such modification shall become effective unless Lessee is given at least thirty (30) days notice prior to the effective date. (c) Penalty and Interest Any installments of rental accruing under this Lease not paid when due shallbe subject to a penalty and shall bear interest "as specified in Public Resources Code .Section 6224 and the Lessor’s then existing administrative regulations governing penalty and interest. "BOUNDARIES This lease is not intended to establish the State’s ~boundaries and is made without prejudice to either party regarding any boundary claims which may be asserted _presently. or in the future. LAND USE (a) Genera[ Lessee shall use the Lease Premises only for the purpose or purposes stated in this Lease and only for the operation and maintenance of the improvements expressly authorized in this Lease. Lessee shall conmence use of the Lease Premises within ninety (90) days of the beginning date of this lease or within ninety (90) days of the date set for construction to commence as set forth in this lease, whichever is later. and within sixty (60) days after completing them. Lessee’s discontinum~ce of such use for a period of ninety (90) days sh~[l be conclusively presumed to be an abandonment. (b) Continoous Use Lessee’s use of the Lease Premises shall be continuous from con~mencement of the Lease unti[ its expiration. (c) Repairs and Maintenence Lessee sha[[, at its own expense, keep and maintain the Lease Premises and all improvements in good order and repair and in safe condition. Lessor shall have no obligation for such repair and maintenance. (d) Additions, Alterations and Removal (I) Additions - No improvements other than those ¯ expressl~ authorized in this ~ease shall .-be constructed by the Lessee on the Lease Premises without the prior written consent of Lessor. (2) Alteration or Removal - EXcept as provided under ¯ this Lease, no alteration or removal of improvements on or natural features of the Lease Premises shall b~. "undertaken without the prior written consent of Lessor. (e) CoeLservation Lessee shall practice conservation of water and other natural resources and shall prevent pollution and harm ~o th~ environment. (f) Toxics Lessee shall not manufacture or generate hazardous wastes on the Lease Premises unless specifically authorized under other terms of this Lease. Lessee shall befully responsible for. any hazardous wastes, substances or materials as defined under federal, state or local law, regulation, or ordinance that are manufactured, generated, used, placed, disposed, stored, or transported on the’ Lease Premises during the Lease term and shall comply with and be bound.by all applicable provisions of such federal, state, or local law regulation or ordinance dealing with such wastes, substances or materials. Lessee shall notify Lessor and the appropriate governmental emergency response agency(ies) immediately in the event of any release or. threatened release of any such wastes, substances or materials. (g~ Enjoys-mr Subject to the provisions of paragraph 5 (a) (2) below, nothing in this Lease shall preclude Lessee from excluding persons from the Lease Premises when their presence or activity constitutes a material interference with Lessee’s use and enjoyment of the Lease Premises as provided under this Lease. (h) Discrimination Lessee in its use of the Lease Premises shall not discriminate against any person or class of persons on the basis of race, color, creed, religion, national origin, sex, age, or handicap. 10. s~rety ~nd~ri~y device to cover any additionally authorized imp~me~_s~ alterations or purposes and any modification of consi~ (~).~surety bond or other security device shall be maintaine~"~-6~"~n--f4.~LL.~o.~rce and effect at all times during the Lease term and subs~’~e~e~[ all of the Lease Premises have been either accepte~---~ by Lessor, or restored by Lessee as provided elsewher~ in this Lease. ASSIGNMENT, ENCUMBRA~CING O~ SUBLETTING (a) Lessee shall not either voluntarily or by operation of law, assign, transfer, moctgage, pledge, hypothecate or encumber this Lease and shall not sublet the Lease Premises, in whole or in part, or allow any person other than the Lessee’s empLoyees~ ageD[s, servants and invitees to occupy or use all or any portion of the Lease Premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld." (b) The following shall be deemed to be an assigrcnent or transfer within the meaning of this Lease: (I). ~f Lessee is a corpo[ation, any dissolution, merger, consolidation or other reorganization of Lessee or sale orother transfer of a percentage of capital stock of Lessee which results in a change of controlling persons, or the sale or other transfer of substantiaILyal[ the assets of Lessee. (2) If Lessee is a partnership, a transfer of any interest of a general partner, a withdrawal of any general partner from the partnership, or the dissolution of the partnership. (c) If this [ease is for sovereign lands, it shall be appurtenant to adjoining littoral or riparian Land and Lessee shall not transfer or assign its ownership interest or use rights in .such adjoining [ands separately from the Leasehold rights granted herein without the prior written consent of Lessor. (d) If Lessee desires to assign, sublet, encumber br otherwise transfer all or any portion of the Lease Premises, Lessee shall do all of the following: (I) give prior written notice to Lessor. (2) provide the name and complete business organization and operational structure of the propoCed assignee, subLessee, secured third party or other transferee; and the nature of the use of and interest in the Lease £remises proposed by the assignee, sublessee, secured third party or other transferee. If the proposed assignee, sublessee or secured third party is a general or limited partnership, or a joint venture, provide a copy of the partnership agreement or joint venture agreement, as applicable. (3) provide the terms, and conditions of the proposed assigr~aent, sublease, or encumbrancing or other transfer; (4) provide audited financial statements for the twc most recently completed fiscal years of the proposec assignee, sublessee, secured party or other transferee; and provide pro forma financial statements showing the projected income, expense and financial condition resulting from use of the lease premises; and (5) provide such additional or supplemental information as Lessor may reasonably request concer~ing the proposed assignee, subLessee, secured party or other transferee. Lessor will evaluate proposed assignees, sub[essees, secured third parties and other transferees and grant approval or disapproval according to standards of commercial reasonableness considering the following factors within the context of the proposed use: the proposed party’s financial strength and reliability, their business experience and expertise, their personal and business reputation, their managerial and operational skills,- their proposed use and projected rental, as well as other Felevant factors. (e) Lessor shall have a reasonable period of time from the receipt of all documents and other information required under this provision to grant or deny its approve[ of the proposed party. (f) Lessee’s mortgage or hypothecation of this Lease, if approved by Lessor, shall be subject to terms and conditions found in a separately drafted standard form (Agreement and Consent to Encumbrancing of Lease) available from Lessor upon request. (g) .Upon the express written assumption of obligations and duties under this Lease by an assignee approved by Lessor, the Lessee may be released from all liability under this Lease arising after the effective date of assignment and not associated with Lessee~s use, possession or occupation of or activities on the Lease Premises; except as to any hazardous wastes, substances or materials as defined under federal state or local law, regulation or ordinance manufactured, generated, used, placed, disposed, stored or transported on the Lease Premises. (h) If the Lessee files a petition or an order for relief is entered against Lessee, under Chapters 7,9,11 or 13 of the Bankruptcy Code (11USC Sect. 101, et seq.) then the trustee or debtor-in-possession must elect to assume or reject this Lease within sixty (60) days after filing of the petition or appointment of the trustee, or the Lease shall be deeme~ to have been rejected, and Lessor shall be entitled to immediate possession of the Lease Premises. No assumption or assignment of this Lease shall be effective unless it is in writing and unless the trustee or debtor-in-possession has cured at[ defaults under this Lease (monetary and non-menetary) or has provided Lessor with adequate assurances (1) that within ten (10) days from the date of such assumption or assignment, all monetary defaults under this Lease will be cured; and (2) that within thirty (30) days from the date of such assumption, all non-monetary defaults under this Lease wit[ be cured; and (3) that all provisions of this Lease wit[ be satisfactorily performed in the future. -5- to deliver such a release,~ a written notice by Lessor reciting such failure or refusal shall0 from the date of its recordation, be conclusive evidence against Lessee of the termination of this Lease and all other c[ahnants. 14. HOLDZNG-OVER Any holding-over by Lessee after the expiration of the Lease term, with or without the express or implied consent of Lessor, shall constitute a tenancy from month to month and not an extension of the Lease term an<J shall be on the terms, covenants, and conditions of this Lease, except that the annual rental then in effect shall be increased by twenty five percent (25%). 15. AI)DITIO~L~L PROVISIOIIS (a) ~aiver (I) No term, coyenant, o7 condition "of this Lease and no default or breach of any such term, covenant or condition shall be deemed to have been ~aived, by Lessor’s acceptance of a late or n~nconforming performance or otherwise, unless such a waiver is expressly acknowledged by Lessor in writing. (2)Any such waiver shall not be deemed to be a waive~ of any other term, covenant or condition of any other default or breach of any term, covenant or conditibn ~f this Lease. (b)Time Time is of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. (c)Notice All notices required to be given under this Lease shall be given in writing, sent by U.S. Mail with postage prepaid, to Lessor at the offices of the State Lands Con~nission and the Lessee at the address specified in this Lease. Lessee shall give Lessor notice of any change in its name or address. (d)Cow,sent Where Lessor’s consent is required under this Lease its consent for one transaction br event shall not be deemed to De a consent t’o any subsequent occurrence of the same or any other transaction or event. (e)Changes This Lease may be terminated and its term, covenants and conditions amended, revised or supplemented only by mutual written.agreement of the parties. (f) (g) Successors The terms, covenants and conditions of this Lease shall extend to and be binding upon and inure to the benefit of the heirs, successors, and assigns of the respective parties. Jofnt a~d Several Obligation If more than one Lessee is a party to this Lease, the obligations of the Lessees shall be joint and several. (h)CaptiorLs The captions of this Lease are not controlling aK shall have no effect upon its construction o interpretation. (i)Severabi[ity If any term, covenant or condition of this Lease determined by a court of competent jurisdiction to invalid, it shall be c~nsidereddeleted and shall no invalidate any of the. remaining terms, covenants a~ conditions. / / / / / / / / / /- /.’ / / / -6- This Lease shall only become effective when approved by the State Lands Commission of the State of California and a duly executed copy has been delivered to Lessee. The submission of this Lease by Lessor, its agent or representative for examination by Lessee does not constitute an option or offer to lease the Premises upon the terms and conditions contained herein or a reservation of the Premises in favor of ~essee. Lessee’s submission of an "executedocopy of this Lease to Lessor shall constitute an qffer to Lessor to lease the Premises oD the terms and conditions set forth .herein. IN WITNESS WHEREOF, the parties hereto have executed this’Lease as of the date h4reafter affixed. LESSEE: cITY OF PALO ALTO ACKNOWLEDGEMENT STATE OF CALIFORNIA STATE LANDS Commission By: Title: Date: This Lease was authorized by the California State Lands Commission on ~’5~q~7~~,, ~ ~ / 9~/ (month day’year) Form 51.15 (1/90)