HomeMy WebLinkAboutStaff Report 6716
City of Palo Alto (ID # 6716)
City Council Staff Report
Report Type: Action Items Meeting Date: 3/28/2016
City of Palo Alto Page 1
Summary Title: Lease Agreement Between City of Palo Alto and Palo Alto
Lawn Bowls Club
Title: Approval of Lease Agreement with the Palo Alto Lawn Bowls Club, Inc.
for City-Owned Property Located at 474 Embarcadero Road for a Period Up to
10 Years
From: City Manager
Lead Department: Administrative Services
RECOMMENDATION
Staff recommends that Council authorize the City Manager or designee to execute the attached
four (4) year lease agreement between the Palo Alto Lawn Bowls Club, Inc. (Tenant) and the
City of Palo Alto (City) for the Palo Alto Lawn Bowl facility at 474 Embarcadero Road with two
(2) three (3) year extension terms for a total not to exceed ten (10) years.
EXECUTIVE SUMMARY
Constructed in 1933-34 by the Civil Works Administration, the Lawn Bowling Green sits on the
site of the old Peninsula Hospital (built in 1910 and razed in 1931). On opening day, March 10,
1935, ceremonial bowls were rolled by Virginia Arnott, club president; Earl C. Thomas, mayor of
Palo Alto; and John McLaren, superintendent of Golden Gate Park who aided in the planning of
Palo Alto’s green. Since 1935, the Palo Alto Lawn Bowls Club has been a cherished local
landmark. Today the immaculate and cozy green and clubhouse, located in the historic
Professorville neighborhood, is maintained via a joint relationship with the City of Palo Alto
Department of Parks and Recreation in cooperation with club volunteers. Though the Lawn
Bowls Club (the Club), in existence since 1933, is membership based it is open to the public and
has “Drop-In Sundays” in which free classes taught by volunteer coaches are offered to the
public. Lawn bowling is easy to learn, very low cost, provides gentle, healthy exercise and, it
provides a pleasant social setting for the participants.
The Club has been a part of Palo Alto for over 80 years (see Club History Attachment A), and
contributes to the community overall by enhancing Palo Alto’s reputation as a rich recreational
destination. In addition to creating and implementing a successful volunteer program the Club
also provides recreation, education and entertainment through a wide range of events.
Furthermore, the Club’s partnership with the City’s Parks and Recreation department makes its
City of Palo Alto Page 2
clubhouse available for City functions as well as to local community groups. The Club has
consistently been self-sufficient raising its funding needs through donations, membership fees,
and events.
The current location of the Palo Alto Lawn Bowl is ideal in terms of its proximity to downtown,
parking availability, and proximity to public transit. The existing lease between the City and the
Club has ended and currently the occupancy is based on hold over tenancy. The Club has
requested a lease extension to continue their operation. Staff has undertaken and completed
the process required by the City’s Policy and Procedures (1-11/ASD), (Attachment B), for leased
use of City land and facilities. The approval of the new four (4) year lease with two (2) three (3)
year option periods will allow the Club to continue its operation and maintenance of the
property.
BACKGROUND
On April 14, 1964, Council approved the first 10-year lease with the Palo Alto Lawn Bowls Club
(Club) for the lawn bowl facility located at 474 Embarcadero Road. On January 14, 1974,
Council approved a $30,000 expansion of the Bowling Green Clubhouse. The project was
financed by three participating agencies: the City, Lucie Stern Foundation, and the Club, with
each providing one-third of the project costs. On April 18, 1974, Council approved a new ten-
year lease for the lawn bowl facility. Historically, the Club has leased only the Clubhouse, not
the bowling green.
Between 1984 and 1990, due to pending development of the adjacent Gamble property which
might have affected the lawn bowl facility, the City and the Club entered into a series of one-
year leases. On February 7, 1991, Council approved a ten-year lease agreement with an option
to extend an additional five years for the lawn bowl facility. On March 1, 2000, the Club
exercised its option for an additional five years. On March 1, 2005, the City and the Club agreed
to a month-to-month holdover pending negotiation of a new lease. On November 25, 2008,
the City and the Club executed a new lease for five years with an additional option to extend for
another two (2) years. On September 9, 2012, the lease was amended for the first time to
establish control over the bowling green area by the City, confirming that the use would be
open to any residents of the City and the stated availability of the playable lawn bowling green
unless the green is closed for renovation. The amendment also established a maintenance
payment in the amount of $500 from the Club to the City. Since November of 2015, the Club
has been in a month-to-month tenancy for the use of the property.
DISCUSSION
The terms of the proposed lease are summarized in Attachment C. The provisions of the lease
are consistent with those of the current and previous leases with the exception of the term,
monetary rent and some changes to the conditions of use. The term of the proposed lease is
four (4) years with two (2) options to renew the term for an additional three years. The initial
term of the lease, four (4) years plus the duration of the two options, will add up to ten (10)
years. The proposed lease includes annual rent and maintenance for a total of $12,912.
City of Palo Alto Page 3
Under the new lease agreement (Attachment D) with the City, the Club continues to be
responsible for routine maintenance of the clubhouse, while the City is responsible for major
building and infrastructure repairs. Historically the Club has invested and donated its own
funds, in-kind contributions and provided volunteer help towards meeting its maintenance
obligation. Last year, the Club provided nearly $13,000 of in-kind and volunteer driven
improvements including the cleaning and maintenance of the clubhouse, replacement of
carpeting and furnishings, and supplemental maintenance of the outdoor benches, plantings
and edging. In addition, the Club has recently purchased a sign, funded via the aforementioned,
which will be installed later this year per City specifications. In the new lease, the club will pay
$1076 a month for rent of the property.
The Club Board of Directors has recently implemented a marketing plan to increase its
membership by providing increased outreach to Palo Alto residents and businesses. When the
Club is not using the Clubhouse for normally scheduled activities, the lease requires the Club to
make the Clubhouse available to the City or other community users. All rental fees from such
use will be retained by the City.
According to City’s Policy and Procedure 1-11/ASD pertaining to leased use of City land and
facilities, new leases of City property may be awarded through the Request for Proposal (RFP)
process or following a noticed public hearing. The notice of intent to award a lease to Palo Alto
Lawn Bowls Club, Inc. was advertised in the Palo Alto Weekly on January 9th and February 5th
2016. Since the March 07, 2016 date of the Council meeting was cancelled, another ad was run
in Palo Alto Weekly on Feb 26, 2016 to notify the public of the new Council meeting date,
March 29, 2016.
TIMELINE
The new lease will go into effect following the approval by City Council and execution by all
parties to the agreement.
RESOURCE IMPACT
The proposed lease will generate annual revenue to the City in the amount of $12,912 per year.
That rent will partially offset some of the $40,000 in annual maintenance costs borne by the
City to maintain the adjacent lawn bowl green. The Club also maintains and improves the
interior section of the clubhouse at its own cost.
POLICY IMPLICATIONS
Entering into a new Lease Agreement is consistent with policies and programs in the
Comprehensive Plan promoting City and non-profit collaboration and the effective provision of
community services.
City of Palo Alto Page 4
ENVIRONMENTAL REVIEW
Extension or re-negotiation of an existing lease and agreement is exempt from the California
Environmental Quality Act (CEQA) under 15061 of the CEQA Guidelines.
Attachments:
Attachment A: Club History (PDF)
Attachment B: P&P 1-11 ASD (PDF)
Attachment C: General Terms of the Lease 2016 (DOCX)
Attachment D: Lease Agreement Palo Alto Lawn Bowl Club Draft 2016 (DOCX)
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
POLICY AND PROCEDURES 1-11/ASD
Revised: October 2006
LEASED USE OF CITY LAND/FACILITIES
POLICY STATEMENT
The purpose of this policy is to ensure that decisions regarding use of City real property are
made in the best interests of the citizens and taxpayers of Palo Alto.
The development and operation of facilities by others (profit and/or non-profit entities) on City-
owned property is appropriate only when such development and operation will further public use
or provide a public benefit. Such facilities and operations must be consistent with existing City
policies, plans, services and/or procedures. Open competitive and/or bid processes will be used
to solicit proposals or provide opportunities to others prior to awarding an Option to Lease. This
policy shall not apply to short-term interim leases where no significant change in use is proposed
PROCEDURE
A. Criteria for Permitting Leased Use of City Property by Others
The proposed leased use must be compatible with, incidental to, and/or supportive of, the
primary public use of the City-owned property, e.g. a snack stand in a district park, or the pro
shop and coffee shop at the Golf Course.
In the event of park dedicated land, the proposed use shall be consistent with the provisions set
forth in the Charter of the City of Palo Alto, Article VIII, and the Palo Alto Municipal Code
(PAMC), Sections 22.04 and 22.08 et. seq., which require that uses of park dedicated land be
park, playground, recreation or conservation related uses.
B. Option to Lease
In all cases where there are significant approval requirements (significant tenant construction
and/or rehabilitation), financing requirements (fundraising drives, obtaining financing from
lending institutions, etc.), or other tenant pre-operation conditions, the Council shall award an
Option to Lease setting forth all pre-construction/operation conditions as conditions to the
tenant's obtaining the lease. The option term shall be for a reasonable period of time consistent
with the nature of the conditions of the option.
Prior to awarding an Option to Lease for a specific use, consideration shall be given to particular
information. (Specific application and the relative importance of each of the following
considerations will vary from site to site and by specific uses proposed.) Applications for leased
use shall provide the following information:
1. The extent to which the proposed leased use satisfies a public need (e.g., by a
significant number of Palo Alto residents and taxpayers) for the proposed services
and/or uses.
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ATTACHMENT B
POLICY AND PROCEDURES 1-11/ASD
Revised: October 2006
2. Consistency of the proposed use with existing City goals and objectives (set forth
in the Comprehensive Plan, Zoning Ordinance, Municipal Code, and general
municipal services objectives).
3. Consistency of the proposed use with existing plans for the property or facility
(e.g., an approved Master Plan).
4. The impact of the proposed use (compatible services and uses, traffic impacts,
noise impacts, energy conservation, etc.) upon:
a. the immediate neighborhood;
b. the community generally; and
c. the environment (The proposed tenant shall, during the Option period,
satisfy the City's environmental review process.)
5. The degree of public access, including City shared use of the facility or co-
sponsorship of programs and/or services, i.e. the numbers of people, especially
Palo Alto residents and taxpayers, that will be served by the proposed use and/or
service. (It is the general intent of the City to maximize public access to its
facilities and services, especially if park land is involved.)
6. The fees that will be charged to Palo Alto citizens. (It is the intent of the City to
provide public access to its facilities at prices and/or fees that are fair and
reasonable to the public. In the case of parklands, any fees and charges should be
minimum and consistent with the fees and charges of comparable City-provided
services.)
7. The monetary consideration to be provided to the City.
8. The history and assessment of the proposed group's ability to carry out the
construction, if any, and operation of the facility and services as proposed.
9. A five-year pro-forma financial analysis of the proposed use, setting forth the
project revenues and expenses for this period of time.
Page 2 of 4
ATTACHMENT B
POLICY AND PROCEDURES 1-11/ASD
Revised: October 2006
C. Public Notification
1. Prior to awarding an Option to Lease (or Lease if there are no pre-construction or
pre-operation conditions), the City shall provide a reasonable and appropriate
opportunity to other groups or entities to respond to possible use of City facilities.
Such reasonable and appropriate opportunities shall take one of the following
forms:
a. A Notice of Intent to Award an Option to Lease (or Lease if there are no
pre-construction or pre-operation conditions) generally outlining the
conditions of the Option and Lease, shall be published twice in a local
newspaper of general circulation. The Notice shall provide at least 30 days
notice to the public prior to a public hearing for Council action to award
the Option to Lease. In addition, copies of the notice shall be mailed to
property owners and tenants within 300 feet of the subject property in
accordance with Section 18.77.080(d) of the Palo Alto Municipal Code
(PAMC).
b. A Request for Proposals will be sent to groups or entities likely to have an
interest in submitting a proposal, subsequent to a public hearing and
Notice of Intent to Request Proposals being published in the appropriate
media. At a minimum, the Notice of Request for Proposals shall be
announced in a local newspaper of general circulation and copies of the
notice mailed to property owners and tenants within 300 feet of the subject
property in accordance with PAMC Section 18.77.080(d). The Notice
shall provide at least 30 days notice to the public prior to the public
hearing.
2. The City’s Real Estate Division shall be responsible for the public notification by
mail and newspaper in accordance with either C(1)(a) or (b) above.
D. Tenant Improvements
1. Construction of tenant improvements shall take place only after Council approval
(as well as Planning Commission and Architectural Review Board approval when
otherwise required by City procedures) of plans for such tenant proposed
construction is obtained. In the event of park dedicated lands, Council approval
shall be obtained by ordinance subject to referendum (PAMC Sections 22.08.005
and 22.08.006).
2. Generally, improvements to the real property shall become the property of the
City upon termination of the Lease. Tenant-provided fixtures shall remain the
property of the tenant.
Page 3 of 4
ATTACHMENT B
POLICY AND PROCEDURES 1-11/ASD
Revised: October 2006
E. Terms of the Lease
1. Tenant shall be required to provide the City with adequate compensation for the
rights granted by the City to the Tenant. Determination of appropriate
consideration shall begin with the estimated fair market rental value of the lease
premises for the use proposed. Consideration shall, however, be given to non-
monetary benefits to be provided by the tenant. These proposed non-monetary
public benefits must be clearly articulated and must provide an actual benefit to a
significant portion of the citizens and taxpayers of Palo Alto.
2. The lease term shall be the minimum period of the time required to:
a. amortize tenant's investment in any permitted and approved tenant
construction; and
b. be consistent with the nature of the proposed tenant operation.
NOTE: Questions and/or clarification of this policy should be directed to the Administrative
Services Department
Page 4 of 4
ATTACHMENT B
ATTACHMENT C
1
EXHIBIT A
Terms of the Lease
LESSOR:
City of Palo Alto
LESEE:
The Palo Alto Lawn Bowls Club, a non-profit benefit corporation.
PREMISES:
Address: 474 Embarcadero Road, Palo Alto, CA 94301
Main Park Area: 70,000 square feet (the lawn bowl within the main yard is 14,400
square feet)
Club House: 2,022 square feet
Patio Area: 500 square feet
Shed on the Side: 96 square feet
PURPOSE:
The purpose of the lease is to allow the Palo Alto Lawn Bowl Club to continue operating a non-
profit organization to offer memberships, classes, recreational activities to members and to the
public, according to the terms and conditions of the lease.
TERM:
The term of the lease is four (4) years with two (2) options by mutual agreement of the City and
the Lessee to extend for three (3) additional years for a total of ten (10) years.
USES:
A. REQUIRED: Throughout the term of the lease, the Lessee shall provide the following
services and activities:
1. Attention, supervision, and care of the clubhouse, lawn bowl and preservation
of the small garden, with the club house, lawn bowl and garden to be open to
the public;
2. Workshops, classes, training and tournaments and lectures associated with the
Palo Alto Lawn Bowl Club purposes; and
3. All required activities shall be open to the public.
ATTACHMENT C
2
B. PERMITTED: In addition to the required uses, the following uses shall also be permitted,
but only as incidental to the required uses:
1. Club house, patio and storage space to support the required services, activities
and uses above;
2. Fund raising activities only to support the required services, activities and uses,
including but not limited to sales of goods and gifts related to Palo Alto Lawn
Bowl Club and the hosting of benefits and social activities; and
3. Periodic rental of rooms and other portions of the premises by community
groups and individuals, but in no event shall such rental be for commercial
purpose and in no event shall such rental interfere with or limit the required
services, activities and uses as set forth above.
C. OPTIONAL: Subject to the prior written approval of the City Manager, the Lessee may
provide additional service and uses which are ancillary to and compatible with the
required uses above.
D. PROHIBITED: Any use not authorized in the Lease
CONSIDERATION/RENT:
A. MONETARY: A total of five thousand and seventy six ($1,076) dollars for rent per month
payable upon execution of the lease. Rent and maintenance fee to be adjusted by 2.5 %
annually starting in July 1, 2017.
B. NON-MONETARY: Development and operation of the Palo Alto Lawn Bowl Club
consistent with the purpose and causes of the Lease.
SECURITY DEPOSIT:
A $5,000 security deposit has been given to the City.
CONSTRUCTION OR ALTERATION BY TENANT:
Lessee may not make any changes to the property costing more than $5,000 without prior City
review and approval.
MAINTENANCE AND REPAIRS:
CITY shall be responsible for the maintenance and repair of the structure located on the
PREMISES and main support systems not exclusively serving the PREMISES, including roof
repair, foundation, electrical system repair, exterior painting and structural support system
repairs.
ATTACHMENT C
3
The vast majority of the landscape and maintenance of the bowling green is done by the City
via contractor. Typically the lawn bowlers perform minor supplemental weed removal on the
green, and they maintain the park benches and the shade structures (adjacent to benches).
Lessee expressly agrees to maintain the PREMISES in a safe, clean, wholesome, and sanitary condition
and substantial repair, to the complete satisfaction of CITY and in compliance with all applicable laws.
Lessee further agrees to provide approved containers for trash and garbage and to keep the PREMISES
free and clear of rubbish and litter.
ASSIGNMENT/SUBLETTING:
Any assignment or encumbrance of the lease (with the exception of subletting in accordance
with the proposal) must receive prior City approval.
TAXES, ASSESSMENTS AND UTILITIES:
Lessee shall be responsible for all costs for utilities and taxes and assessments for the property.
City to pay for water furnished to the Premises.
INSURANCE:
The Lessee shall maintain insurance meeting the City’s standard requirements for insurance
protection.
ATTACHMENT D
0
LEASE AGREEMENT TEMPLATE-USER INSTRUCTIONS
WHEN TO USE FORM: This form should only be used when the City is leasing City owned
property to someone else. If the City is leasing property from a private party DO NOT USE this
form.
HOW TO COMPLETE FORM: To use this form, you will need to fill in the information requested
in bold. Below is a summary of the major items of information and lease references that will
need to be customized before completing the agreement:
o Lessee: Palo Alto Lawn Bowls Club
o Address & APN: 474 Embarcadero Road, Palo Alto, CA 94301, APN: 120-07-032
o Square Footage and Description of Property:
Main Park Area: 70,000 square feet (the lawn bowl within the main yard is 14,400 square
feet)
Club House: 2,022 square feet
Patio Area: 500 feet
Shed on the side: 96 feet
o Lease Term with Start and End: January 1, 2016 to December 31, 2020
o Length of Option Period: By mutual agreement of the City and Lessee - two (2) options
to extend the term for an additional three (3) year period options
o Monthly Rent: $1,076 with annual increase of 2.5%
o Amount of Security Deposit: $5,000
o Required Uses of Property: Lawn Bowl Club membership activities
o Who Will Pay Utilities: Lessee
o Who Will Perform Maintenance: Refer to the lease section 9
o Who Will Maintain Common and other Areas: Refer to lease section 9
o What Construction Cost Requires City Approval: All types
o Parcel Map of Property (Exhibit A)
o General Map (Exhibit B) Insurance (Exhibit D)
o Premise (Exhibit C)
ATTACHMENT D
1
LEASE AGREEMENT
BETWEEN
CITY OF PALO ALTO
AND
Palo Alto Lawn Bowls Club
TABLE OF CONTENTS
LEASE PROVISIONS
1. PREMISES.
2. TERM.
3. RENT
4. SECURITY DEPOSIT
5. USE OF PROPERTY
6. HAZARDOUS MATERIALS
7. UTILITIES AND OPERATING EXPENSES
8. TAXES
9. MAINTENANCE
10. ALTERATIONS BY LESSEE
11. CONSTRUCTION BY LESSEE
12. HOLD HARMLESS/INDEMNIFICATION
13. DAMAGE, DESTRUCTION AND TERMINATION
14. SIGNS
15. ASSIGNMENT AND SUBLETTING
16. DEFAULTS; REMEDIES
17. INTEREST ON PAST-DUE OBLIGATIONS
18. HOLDING OVER
19. CITY’S ACCESS
20. INSURANCE
21. RESERVATION OF AVIGATIONAL EASEMENT
ATTACHMENT D
2
22. EMINENT DOMAIN
23. POST-ACQUISITION TENANCY
24. DISPUTE RESOLUTION
25. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY
26. NON-DISCRIMINATION
27. INDEPENDENT CONTRACTOR
28. CONFLICT OF INTEREST
29. MEMORANDUM OF LEASE
30. ESTOPPEL CERTIFICATE
31. LIENS
32. VACATING
33. ABANDONMENT
34. NOTICES
35. TIME
36. AMENDMENTS
37. SIGNING AUTHORITY
38. CAPTIONS
39. SURRENDER OF LEASE NOT MERGER
40. INTEGRATED DOCUMENT
41. WAIVER
42. INTERPRETATIONS
43. SEVERABILITY CLAUSE
44. GOVERNING LAW
45. VENUE
46. COMPLIANCE WITH LAWS
47. BROKERS
48 PARKING
49. AMENDMENTS
50. PRIOR LEASE SUPERSEDED
ATTACHMENT D
3
51. PREVAILING WAGE
52. BOOKS & RECORDS
53. ATTACHMENTS TO LEASE (EXHIBITS)
ATTACHMENT D
2 | P a g e
LEASE AGREEMENT
BETWEEN
CITY OF PALO ALTO
AND
PALO ALTO LAWN BOWLS CLUB
This lease agreement (herein "Lease") is made and entered into this 1st day of January, 2016,
by and between the City of Palo Alto, a California chartered municipal corporation (herein
"City") and Palo Alto Lawn Bowls Club, a non- profit, tax-exempt organization, (herein "Lessee").
City and Lessee may be referred to individually as a “Party” or collectively as the “Parties” or
the “Parties to this Lease." The City Manager serves as Contract Administrator for this Lease on
behalf of the City Council.
RECITALS
This Agreement is made with respect to the following facts:
A. The City is the fee simple owner of the real property located at 474 Embarcadero Road,
Palo Alto, CA 94301, situated County of Santa Clara, State of California, Assessor's
Parcel Number 124-07-032 and site plan shown respectively on Exhibit “A” and Exhibit
“B” of this Agreement (the “Property”)
B. Palo Alto Lawn Bowls Club, a non-profit organization has been a Lessee of the City at the
Property since April 14, 1964 and occupancy with the City is based on a hold over
position.
C. In order continue to provide quality services for the seniors in the area over a long term
horizon, Palo Alto Lawn Bowls Club and the City have agreed to enter into 4 (four) years
initial term with two (2) option to extend the term for three (3) years for a total of ten
(10) years.
D. Lessee desires to continue to occupy and use the Property which consists of a
recreation clubhouse, lawn bowl and small garden area within a large park area of
approximately 70,000 square feet, more particularly described and shown in Exhibit “C”
of this Agreement (the “Premise”), for the general purpose of providing recreation
services and activities for Silicon Valley residents.
Now, therefore, in consideration of these recitals and the following covenants, terms, and
conditions, Lessee and City mutually agree as follows:
LEASE PROVISIONS
ATTACHMENT D
3 | P a g e
1. PREMISES.
City hereby leases to Lessee, certain real property located in the City of Palo Alto, County of
Santa Clara, State of California, commonly known as Palo Alto Lawn Bowls Club and more
particularly shown in Exhibit “C” attached hereto and incorporated herein by reference. The
Property consists of an area of approximately 70,000 square feet of space. It contains lawn
bowl green area consisting of 14,400 square feet, a club house plus a patio area and a shed for
a total of approximately 2,522 square feet. Unless specifically provided, Lessee accepts the
Premise “as-is” on the date of execution of this Lease.
It is understood and agreed that supervision and control of the area outlined by a broken line
on “Exhibit C” shall remain in the City and that the use thereof shall not be limited to members
of Lessee, but shall be extend to any residents of the City in conformance with rules and
regulations which may be instituted from time to time by City’s Director of Community Services
Department. The Lease is contingent on availability of playable lawn bowling green unless the
green is closed for renovation by mutual consent between Lessee and the City.
2. TERM & OPTIONS
2.1 Original Term. The term of this Lease shall be for four (4) years, commencing on January 1,
2016 and ending on December 31, 2020. Lessee shall, at the expiration of the term of this lease,
or upon its earlier termination, surrender the Property in as good condition as it is now at the
date of this lease. The Parties expect reasonable wear and tear. City and Lessee agree to have
two (2) options by mutual agreement to extend the original term of the lease for three (3) year
additional years. The original term and the option periods if executed will add up to ten (10)
years. Lessee and the City shall have the right and option to extend the Term hereof for two (2)
additional thirty six (36) month period (the “Extension Term”) upon written notice to City by
Lessee given not less than three (3) months and not more than six (6) months prior to the Lease
expiration date.
3. RENT.
3.1 Base Rent. The rent to be paid by Lessee shall be at $1,076.00 per month in advance on
or before the first day of each month during the term of this lease. During the term of this lease
the monthly rent and the maintenance fee will be adjusted each year by an increase of 2.5%
starting on July 1, 2017.
4. SECURITY DEPOSIT. Not Applicable.
5. USE OF PROPERTY.
ATTACHMENT D
4 | P a g e
5.1 Permitted Uses. Lessee shall with regularity publicly encourage and offer membership in
the Palo Alto Lawn Bowling Club to residents of City during the term of this agreement. Lessee
shall also offer membership to non-residents and provide lessons in lawn bowling to public at
reasonable times and intervals as specified by the Director of Community Services.
5.2 Lessee shall, at its own cost and expense, conform in every respect to all laws, statutes,
ordinances and regulations now in force and that may be enacted hereafter affecting the use or
occupancy of the premises. Lessee shall use the premises as a general meeting place for its
members, for games and recreational activities. Lessee is permitted to rent the facility at rates
and in accordance with a schedule to be approved by the City to raise revenue to pay City lease
costs. Lessee has the right to rent its space on an hourly basis.
5.3 Lessee agrees to maintain in its by-laws the provision that City’s Director of Community
Services or his nominee shall be an ex-officio member of the Lessee’s Board of Directors, with
full right to participate in the deliberations of the Board without the right to vote.
5.4 Lessee agrees that when the premises are not used for its normally scheduled activities,
the premises may be made available to the City or other community users subject to rules and
regulations established by City’s Director of Community Services. The City will manage
reservations for the Clubhouse during hours not used by the club. The City will provide building
attendants to ensure that the building is safe, secure and clean at the end of each rental. The
fees collected by such rental shall be retained by the City, and will not be credited against the
monthly rent.
5.5 Intent of the Use. It is the further intent of the City and Lessee that Lessee is primarily
responsible for the identification of sources and for the securing of commitments for the funds
necessary to bring together on the premises a broad range of recreation activities and services
responsive to the interest and needs of members and users, and to simulate development of
new programs for members and users. During the terms of this lease, Lessee agrees to use the
premises to maintain and operate programs for members and users to carry out such purposes
and for no other purpose.
5.6 Prohibited Uses. Lessee shall not use Premises for any purpose not expressly permitted
hereunder. Lessee shall not create, cause, maintain or permit any nuisance or waste in, on, or
about the Premises, or permit or allow the Premises to be used for any unlawful or immoral
purpose. Lessee shall not do or permit to be done anything in any manner which unreasonably
disturbs the users of the neighboring property. Specifically, and without limiting the above,
Lessee agrees not to cause any unreasonable odor, noise, vibration, power emission, or other
item to emanate from the Premises. No materials or articles of any nature shall be stored
outside upon any portion of the Premises. Lessee will not use Property 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 Property; and no tree or shrub
thereon shall be destroyed or removed (except in connection with Lessee’s maintenance of, or
ATTACHMENT D
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modification to, the landscaping) or other waste committed of said Property. No motorcycles,
automobiles or other mechanical means of transportation shall be placed or stored anywhere
on the Property, provided that the foregoing shall in no way limit Lessee’s rights to use the
parking areas on the Property. No repair, overhaul or modification of any motor vehicle shall
take place on the Property or the street in front of said Property. Lessee, at his/her expense,
shall keep the Property in as good condition as it was at the beginning of the terms hereof,
except damage occasioned by ordinary wear and tear, and except damage to the roof, the
exterior walls, sidewalks and underground plumbing, which is not the fault of Lessee.
5.7 Condition, Use of Premises. City 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 exclusively for the limited purposes specified in Section 5.1.
6. HAZARDOUS MATERIALS.
6.1 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,” “hazardous air pollutant”, “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., (l) 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 Underground 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
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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 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.
6.2. Compliance with Laws. Lessee shall not cause or permit any Hazardous Material (as
defined below) to be brought upon, kept or used in or about the Premises or Project by Lessee,
its agents, employees, contractors or invitees.
6.3 Termination of Lease. City shall have the right to terminate the Lease in City’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,
if the contamination resulted from Lessee’s action or use of the Premises.
6.4 Assignment and Subletting. It shall not be unreasonable for City to withhold its consent to
an assignment or subletting to such proposed assignee or sublessee if: (i) any anticipated use of
the Premises by any proposed assignee or sublessee involves the generation or storage, use,
treatment, disposal, or release of Hazardous Material in a manner or for any purpose; (ii) the
proposed assignee or sublessees has been required by any prior landlord, lender, or
governmental authority to take remedial action in connection with Hazardous Material
contaminating a property, if the contamination resulted from such party’s action or use of the
property in question; or, (iii) the proposed assignee or sublessee is subject to an enforcement
order issued by any governmental authority in connection with the release, use, disposal or
storage of a Hazardous Material.
6.5 Hazardous Materials Indemnity. Lessee shall indemnify, defend (by counsel reasonably
acceptable to City), protect, and hold City harmless from and against any and all claims,
liabilities, penalties, forfeitures, losses, and/or expenses, including without limitation,
diminution in value of the Premises, damages for the loss or restriction on use of the rentable
or usable space or of any amenity of the Premises, damages arising from any adverse impact or
marketing of the Premises and sums paid in settlement of claims, response costs, cleanup costs,
site assessment costs, attorneys’ fees, consultant and expert fees, judgments, administrative
rulings or orders, fines, costs of death of or injury to any person, or damage to any property
whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere),
arising from, caused, or resulting, either prior to or during the Lease Term, in whole or in part,
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directly or indirectly, by the presence or discharge in, on, under, or about the Premises by
Lessee, Lessee’s agents, employees, licensees, or invitees or at Lessee’s direction, of Hazardous
Material, or by Lessee’s failure to comply with any Hazardous Materials Law, whether
knowingly or by strict liability. For purposes of the indemnity provided herein, any acts or
omissions of Lessee or its employees, agents, customers, sublessees, assignees, contractors, or
subcontractors of Lessee (whether or not they are negligent, intentional, willful or unlawful)
shall be strictly attributable to Lessee. Lessee’s indemnification obligations shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any required or
necessary Hazardous Materials management plan, investigation, repairs, cleanup or
detoxification or decontamination of the Premises, and the presence and implementation of
any closure, remedial action or other required plans, and shall survive the expiration of or early
termination of the Lease Term.
6.6 City’s Right to Perform Tests. At any time prior to the expiration of the Lease Term, City
shall have the right to enter upon the Premises in order to conduct tests of water and soil.
7. UTILITIES AND OPERATING EXPENSES.
7.1. Operating Cost. City shall furnish to the Property reasonable quantities of gas, electricity,
water, sewer and refuse collections services as required for Lessee’s use. The Lessee shall also
be allowed use of internet access as exists within the Premises. However, if City is required to
construct new or additional utility installations, including, without limitation, wiring, plumbing,
conduits, and mains, resulting from Lessee’s special requirements, Lessee shall on demand pay
to City the total cost of such items. Lessee agrees to pay for gas, heat, electricity, power, light,
telephone service, garbage removal, or other public utility service used during the term of this
lease; provided. City to pay for water furnished to the Premises. Lessee agrees to employ
sound and innovative conservation practices in addition to abiding by all City conservation
requirements.
8. TAXES.
8.1 Real Property Taxes Defined. The term “real property taxes” as used herein shall mean 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 integral part of the Premises; or, (iii) use of the
Premises, Improvements public utilities or energy within the Premises. The term “real property
taxes” shall also mean all charges, levies or fees imposed by reason of environmental regulation
or other governmental control of the premises and/or the Improvements, new or altered
excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter
imposed upon City as a result of this Lease, and all costs and fees (including attorneys’ fees)
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incurred by City in contesting any real property taxes and in negotiating with public authorities
as to any real property taxes affecting the Premises. 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 and/or the Improvements, as determined by
City, on the basis of the assessor’s worksheets or other available information, shall be included
within the meaning of the term “real property taxes.”
8.2 Payment of Real Property Taxes. Lessee shall pay Lessee’s share of all real property taxes
(as defined in Section 8.1 above) which become due and payable to City on or before the later
of ten (10) days prior to the delinquency thereof or fifteen (15) days after the date on which
Lessee receives a copy of the tax bill and notice of City’s determination hereunder. Lessee’s
liability to pay real property taxes shall be prorated on the basis of a three hundred sixty-five
(365) day year to account for any fraction or portion of a tax year included in the Lease Term at
the commencement or expiration of the Lease.
8.3 Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section
107.6 of the California Revenue and Taxation Code. Lessee realizes that a possessory interest
subject to property taxes may be created, agrees to pay any such tax, and hereby waives any
rights Lessee may have under said California Revenue and Taxation Code section 107.6.
8.4 Personal Property Taxes. Lessee shall pay before delinquent, or if requested by City,
reimburse City for, any and all taxes, fees, and assessments associated with the Property, the
personal property contained in the Premises and other taxes, fees, and assessments regarding
any activities which take place at the Property. Lessee recognizes and understands in accepting
this Lease that its interest therein may be subject to a possible possessory interest tax that City
or County may impose on such interest and that such tax payment shall not reduce any rent
due City hereunder and any such tax shall be the liability of and be paid by Lessee.
9. MAINTENANCE AND REPAIRS & CAPITAL IMPROVEMENT
9.1 City’s Responsibilities. CITY shall be responsible for the maintenance and repair of the
structure located on the Premises and main support systems not exclusively serving the
PREMISES, including roof repair, foundation, electrical system repair, exterior painting and
structural support system repairs.
9.2 Lessee Responsibilities. Except as provided in the preceding sentence, Lessee expressly
agrees to maintain the Premises in a safe, clean, wholesome, and sanitary condition and
substantial repair, to the complete satisfaction of CITY and in compliance with all applicable
laws. Lessee further agrees to provide approved containers for trash and garbage and to keep
the Premises free and clear of rubbish and litter. CITY shall have the right to enter upon and
inspect the Premises at any time for cleanliness and safety. Notwithstanding the above
provisions, Lessee shall be responsible for damage or repair to the Premises or any of its
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support systems resulting from Lessee’s use of the Premises and not occasioned by normal
wear and tear, including plumbing and glass breakage.
Lessee shall designate in writing to CITY an on-site representative who shall be responsible for
the day-to-day operation and level of maintenance, cleanliness, and general order.
If Lessee fails to make any repairs or perform any maintenance work for which Lessee is
responsible within a reasonable time (as determined by the City Manager in the City Manager’s
sole discretion) after demand by the CITY, CITY 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 therefor, Lessee
shall reimburse CITY for the cost of such repairs, including a fifteen percent (15%)
administrative overhead fee. The making of such repairs or performance of maintenance by
CITY 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.
9.3 Waiver of Civil Code. 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 City’s expense or to terminate
this Lease because of City’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 the City Manager in the
City Manager’s sole discretion) after demand by the City, City 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 City for the cost of such repairs, including a fifteen percent (15%
administrative overhead fee. The making of such repairs or performance of maintenance by
City 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.
10. ALTERATIONS BY LESSEE
Lessee shall not make any alterations or improvements to the Premises without obtaining the
prior written consent of the City Manager, except for alterations or improvements that cost less
than five Thousand Dollars ($5,000.00) and which do not affect the building systems or the
structural integrity or structural components of the Premises. Lessee may, at any time and at
its sole expense, install and place business fixtures and equipment within the Premises and
make alteration less than $5,000 with permission from the Director of Community Service
Department.
11. CONSTRUCTION BY LESSEE.
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11.1 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 City, at its election, upon expiration or earlier termination of this lease
and upon City's 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 termination of this Lease if Lessee is not then in default under this Lease, provided that
Lessee shall repair to the satisfaction of City 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 termination of this Lease.
11.2 Indemnity for Claims Arising Out of Construction. Lessee shall defend and indemnify City
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 City in negotiating, settling, defending or otherwise protecting against
such claims.
11.3 Assurance of Completion. Prior to commencement of any construction or alteration
expected to cost more than $5,000, Lessee shall furnish the City Manager evidence that assures
City that sufficient funds 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
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 City;
C. Irrevocable letter of credit from a financial institution;
D. Proof of cash or other liquid assets; or
E. Any combination of the above.
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 the City Manager. All bonds and letters of credit shall be in a
form acceptable to the City Manager, 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.
11.4 Certificate of Inspection. Upon completion of construction of any building, Lessee shall
submit to the City Manager 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.
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11.5 As Built Plans. Lessee shall provide the City Manager with a complete set of reproducible
“as built plans” reflecting actual construction within or upon the Premises upon completion of
any: (i) new construction; (ii) structural alterations; or, (iii) non-structural alterations costing
more than $25,000.
12. HOLD HARMLESS/INDEMNIFICATION.
12.1 Indemnification. To the extent permitted by law, Lessee agrees to protect, defend, hold
harmless and indemnify City, its City Council, 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 therefrom for which City 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 City immediate notice of any claim or liability
hereby indemnified against. This indemnity shall be in addition to the Hazardous Materials
indemnity contained in this Lease and shall survive shall survive the expiration of or early
termination of the Lease Term.
12.2 Waiver of Claims. Lessee waives any claims against City for injury to Lessee’s business or
any loss of income therefrom, for damage to Lessee’s property, or for injury or death of any
person in or about the Premises, from any cause whatsoever, except to the extent caused by
the active negligence or willful misconduct of City or City’s officers, agents, contractors,
volunteers, and employees.
13. DAMAGE, DESTRUCTION AND TERMINATION.
13.1 Nontermination and Nonabatement. 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. City and Lessee waive the provisions of any statutes
which relate to termination of a lease when leased property is destroyed and agree that such
event shall be governed by the terms of this Lease.
13.2 Force Majeure. Prevention, delay or stoppage due to strikes, lockouts, labor disputes,
Acts of God, inability to obtain labor, inability to obtain 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 contractors 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.
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13.3 Restoration of Premises by Lessee.
13.3.1 Destruction Due to Risk Covered by Insurance. If, during the term, the Premises
are totally or partially destroyed from a risk covered by the insurance described
in Section 20 (Insurance), rendering the Premises totally or partially inaccessible
or unusable, Lessee shall restore the Premises to substantially the same
condition as it was in immediately before destruction, but only to the extent of
insurance proceeds actually received. Such destruction shall not terminate this
Lease. If the laws existing at that time do not permit the restoration, either
party can terminate this Lease immediately by giving notice to the other party.
A. Minor Loss. If, during the term of this Lease, the Premises are destroyed from
a risk covered by the insurance described in Section 20 (Insurance), and the total
amount of loss does not exceed one hundred thousand dollars ($100,000),
Lessee shall make the loss adjustment with the insurance company insuring the
loss. The proceeds shall be paid directly to Lessee for the sole purpose of making
the restoration of the Premises in accordance with this Lease.
B. Major Loss-Insurance Trustee. If, during the term of this Lease, the Premises
are destroyed from a risk covered by the insurance described in Section 20
(Insurance), and the total amount of loss exceeds the amount set forth in
paragraph (1), Lessee shall make the loss adjustment with the insurance
company insuring the loss and on receipt of the proceeds shall immediately pay
them to an institutional lender or title company as may be jointly selected by the
parties ("the Insurance Trustee"), and funds shall be disbursed by the Insurance
Trustee pursuant to the procedures set forth below in Section 13.3.2.
13.3.2 Destruction Due to Risk Not Covered by Insurance. If, during the term, the
Premises are totally or partially destroyed from a risk not covered by the
insurance described in Section 20 (Insurance), rendering the Premises totally or
partially inaccessible or unusable, Lessee shall restore the Premises to
substantially the same condition as it was in immediately before destruction,
whether or not the insurance proceeds are sufficient to cover the actual cost of
restoration. Such destruction shall not terminate this Lease. If the laws existing
at that time do not permit the restoration, either party can terminate this Lease
immediately by giving notice to the other party.
If the cost of restoration exceeds ten percent (10%) of the then replacement
value of the Premises totally or partially destroyed, Lessee can elect to terminate
this Lease by giving notice to City within sixty (60) days after determining the
restoration cost and replacement value. If Lessee elects to terminate this Lease,
City, within thirty (30) days after receiving Lessee's notice to terminate, can elect
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to pay to Lessee, at the time City notifies Lessee of its election, the difference
between ten percent (10%) of the replacement value of the Premises and the
actual cost of restoration, in which case Lessee shall restore the Premises. On
City's making its election to contribute, each party shall deposit immediately the
amount of its contribution with such institutional lender or Title Company as
may be jointly selected by the parties ("the Insurance Trustee"). If the
Destruction does not exceed ten percent (10%) of the then replacement value of
the Premises but does exceed one hundred thousand dollars ($100,000), Lessee
shall immediately deposit the cost of restoration with an Insurance Trustee. This
Lease shall terminate if Lessee elects to terminate this Lease and City does not
elect to contribute toward the cost of restoration as provided in this section.
If the Premises are destroyed from a risk not covered by the insurance described
in Section 20 (Insurance), and Lessee has the obligation to restore the Premises
as provided in subsection (B), both parties shall deposit with the Insurance
Trustee their respective contributions toward the cost of restoration. All sums
deposited with the Insurance Trustee shall be held for the following purposes
and the Insurance Trustee shall have the following powers and duties:
The sums shall be paid in installments by the Insurance Trustee to the contractor
retained by Lessee as construction progresses, for payment of the cost of
Restoration. A 10% retention fund shall be established that will be paid to the
contractor on completion of restoration, payment of all costs, expiration of all
applicable lien periods, and proof that the Premises are free of all mechanics'
liens and lienable claims.
Payments shall be made on presentation of certificates or vouchers from the
architect or engineer retained by Lessee showing the amount due. If the
Insurance Trustee, in its reasonable discretion, determines that the certificates
or vouchers are being improperly approved by the architect or engineer retained
by Lessee, the Insurance Trustee shall have the right to appoint an architect or
an engineer to supervise construction and to make payments on certificates or
vouchers approved by the architect or engineer retained by the Insurance
Trustee. The reasonable expenses and charges of the architect or engineer
retained by the Insurance Trustee shall be paid by the insurance trustee out of
the trust fund. Both parties shall promptly execute all documents and perform
all acts reasonably required by the Insurance Trustee to perform its obligations
under this section.
If the sums held by the Insurance Trustee are not sufficient to pay the actual cost
of restoration Lessee shall deposit the amount of the deficiency with the
Insurance Trustee within fifteen (15) days after request by the Insurance Trustee
indicating the amount of the deficiency. Any undisbursed funds after
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compliance with the provisions of this section shall be delivered to City to the
extent of City's contribution to the fund, and the balance, if any, shall be paid to
Lessee. All actual costs and charges of the Insurance Trustee shall be paid by
Lessee.
If the Insurance Trustee resigns or for any reason is unwilling to act or continue
to act, a new trustee shall be jointly selected by the parties and shall be
substituted in the place of the designated Insurance Trustee. The new trustee
must be an institutional lender or title company.
13.3.3 Procedure for Restoring Premises. When Lessee is obligated to restore the
Premises, within ninety (90) days Lessee at its cost shall prepare final plans,
specifications, and working drawings complying with applicable Laws that will be
necessary for restoration of the Premises and shall deliver the same to City for
approval. The plans, specifications, and working drawings must be approved by
City, such approval not to be unreasonably withheld, conditioned or delayed.
City shall have thirty (30) days after receipt of the plans and specifications and
working drawings to either approve or disapprove the plans, specifications, and
working drawings and return them to Lessee. If City disapproves the plans,
specifications, and working drawings, City shall notify Lessee of its objections and
City's proposed solution to each objection. Lessee acknowledges that the plans,
specifications, and working drawings shall be subject to approval of the
appropriate governmental bodies and that they will be prepared in such a
manner as to obtain that approval.
The restoration shall be accomplished as follows:
A. Lessee shall make commercially reasonable efforts to complete the
restoration within 180 working days after final plans and specifications and
working drawings have been approved by the appropriate governmental bodies
and all required permits have been obtained (subject to a reasonable extension
for delays resulting from causes beyond Lessee's reasonable control).
B. Lessee shall retain a licensed contractor that is bondable. The contractor shall
be required to carry public liability and property damage insurance, standard fire
and extended coverage insurance, with vandalism and malicious mischief
endorsements, during the period of construction in accordance with Section 20
(Insurance). Such insurance shall contain waiver of subrogation clauses in favor
of City and Lessee in accordance with the Provisions of Exhibit B.
C. Lessee shall notify City of the date of commencement of the restoration at
least ten (10) days before commencement of the restoration to enable City to
post and record notices of nonresponsibility. The contractor retained by Lessee
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shall not commence construction until a completion bond and a labor and
materials bond have been delivered to City to insure completion of the
construction.
D. Lessee shall accomplish the restoration in a manner that will cause the least
inconvenience, annoyance, and disruption at the Premises.
E. On completion of the restoration Lessee shall immediately record a notice of
completion in the county in which the Premises are located.
F. If funds are required to be deposited with an Insurance Trustee as required by
this Section 13, the restoration shall not be commenced until sums sufficient to
cover the cost of restoration are placed with the Insurance Trustee as provided
in this section.
14. SIGNS.
Lessee shall not place, construct, maintain, or allow any signs upon the Premises without prior
written consent of City, such consent not to be unreasonably withheld, conditioned or delayed.
15. ASSIGNMENT AND SUBLETTING.
15.1 City's Consent Required. Lessee shall not assign this lease, nor any interest therein, and
shall not sublet or encumber the Property or any part thereof, nor any right or privilege
appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Property, or
any portion thereof, without the prior written consent of City. This Lease shall be binding upon
any permitted assignee or successor of Lessee. Consent by City 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. No assignment, subletting, or
encumbrance by Lessee shall release it from or in any way alter any of Lessee's obligations
under this Lease. Lessee may, without the prior written consent of City, have the Property
delivered to (i) a parent or subsidiary company of Lessee, (ii) an entity which purchases all of
the assets of Lessee, or (iii) an entity into which Lessee is merged or consolidated, but such
arrangement shall in no way alter Lessee's responsibilities hereunder with respect to the
Property, and Lessee shall promptly notify City of such transfer. Any assignment, subletting,
encumbrances, occupation, or use contrary to the provisions of this Lease shall be void and
shall constitute breach of this Lease. City may assign any of its rights hereunder without notice
to Lessee.
15.2 No Release of Lessee. No subletting or assignment as approved by City 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 City from any
other person shall not be deemed to be a waiver by City of any provision hereof. In the event
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of default by any assignee of Lessee or any successor of Lessee in the performance of any of the
terms hereof, City may proceed directly against Lessee without the necessity of exhausting
remedies against said assignee.
16. DEFAULTS; REMEDIES.
16.1 Defaults. The occurrence of any one or more of the following events shall constitute a
material default, or breach of this Lease, by Lessee:
16.1.1 Abandonment of the Premises by Lessee as defined by California Civil Code
section 1951.3;
16.1.2 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 of ten (10) business days after written notice thereof from City to
Lessee. In the event City 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;
16.1.3 Failure by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease in any material respect where such failure shall continue for a
period of thirty (30) days after written notice thereof from City 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;
16.1.4 Making by Lessee of any general arrangement or assignment for the benefit of
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.
16.2 Remedies. In the event of any material default or breach by Lessee, City may at any time
thereafter, following any notice required by statute, and without limiting City in the exercise of
any right or remedy which City may have by reason of such default or breach:
16.2.1 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
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of the Premises and Improvements to City. In such event, City shall be entitled to
recover from Lessee all damages incurred by City by reason of Lessee’s default including
but not limited to: the cost of recovering possession of the Premises and Improvements;
expenses of reletting, 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.
16.2.2 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, City
shall be entitled to enforce all of City’s rights and remedies under this Lease, including
the right to recover rent and other payments as they become due hereunder.
16.2.3 Pursue any other remedy now or hereafter available to City under the laws or
judicial decisions of the State of California. City shall have all remedies provided by law
and equity.
16.3 No Relief from Forfeiture After Default. Lessee waives all rights of redemption or
relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179,
and any other present or future law, in the event Lessee is evicted or City otherwise
lawfully takes possession of the Premises by reason of any default or breach of this
Lease by Lessee.
16.4 Disposition of Abandoned Personal Property. If the Lessee fails to remove any
personal property belonging to Lessee from the Premises after forty-five (45) days of the
expiration or termination of this Lease, such property shall at the option of City be
deemed to have been transferred to City. City shall have the right to remove and to
dispose of such property without liability to Lessee or to any person claiming under
Lessee, and the City shall have no need to account for such property.
17. INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly provided herein, any amount due City when not paid when due shall bear
interest at the lesser of ten percent (10%) per year or the maximum rate then allowable by law
from the date due.
18. HOLDING OVER.
If Lessee remains in possession of the Premises or any part thereof after the expiration of the
term or option term hereof, such occupancy shall be a tenancy from month to month with all
the obligations of this Lease applicable to Lessee and at a monthly rental obligation of ten
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percent (10%) increase over the Base Rent in effect at the time of expiration. Nothing
contained in this Lease shall give to Lessee the right to occupy the Property after the expiration
of the term, or upon an earlier termination for breach.
19. CITY’S ACCESS.
19.1 Access for Inspection. City and City’s agents 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 City may deem
necessary. City may at any time place on or about the Premises any ordinary “For Sale” signs
and City may at any time during the last one hundred twenty (120) days of the term hereof
place on or about the Premises any ordinary “For Lease” signs, all without rebate of rent or
liability to Lessee.
19.2 Security Measures. City 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 City, in its sole discretion, require Lessee 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 City’s
prior approval before installing, implementing or changing any City approved security system,
device, operation or plan.
19.3 New Locks. Lessee may install new locks on all exterior doors. Lessee shall advise City of
such action and shall provide City with keys to said locks. Lessee shall also deliver to City the
old locks with keys. Upon termination, all locks shall become the property of City.
20. INSURANCE.
Lessee's responsibility for the Property begins immediately upon delivery and Lessee, at its sole
cost and expense, and at no cost to City, shall purchase and maintain in full force and effect
during the entire term of this Lease insurance coverage in amounts and in a form acceptable to
City as set forth in Exhibit C 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 D. Lessee also agrees to secure
renter's liability insurance.
Lessee shall deposit with the City Manager, on or before the effective date of this Lease,
certificates of insurance necessary to satisfy City that the insurance provisions of this Lease
have been complied with, and to keep such insurance in effect and the certificates therefore on
deposit with City 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
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coverage, City may purchase such insurance, on behalf of and at the expense of Lessee to
provide six months of coverage.
City shall retain the right at any time to review the coverage, form, and amount of the
insurance required hereby. If, in the opinion of the City’s Risk Manager (or comparable official),
the insurance provisions in this Lease do not provide adequate protection for City and for
members of the public using the Premises, the City Manager may require Lessee to obtain
insurance sufficient in coverage, form, and amount to provide adequate protection as
determined by the Risk Manager. City'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. The City Manager shall notify Lessee in writing of changes in
the insurance requirements. If Lessee does not deposit copies of acceptable insurance policies
with City incorporating such changes within sixty (60) days of receipt of such notice, or in the
event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be in
default under this lease without further notice to Lessee. Such failure shall constitute a
material breach and shall be grounds for immediate termination of this Lease at the option of
City.
The procuring of such required policy or policies of insurance shall not be construed to limit
Lessee’s liability hereunder nor to fulfill the indemnification provision and requirements of this
Lease. Notwithstanding the policy or policies of insurance, Lessee shall be obligated for the full
and total amount of any damage, injury, or loss caused by or connected with this Lease or with
use or occupancy of the Premises, except to the extent caused by the active negligence or
willful misconduct of City or City’s officers, agents, contractors, volunteers, and employees.
21. RESERVATION OF AVIGATIONAL EASEMENT.
City hereby reserves for the use and benefits of the public, a right of avigation over the
Premises for the passage of aircraft landing at, taking off, or operating from the adjacent airport
operated by the County of Santa Clara. Lessee releases the City from all liability for noise,
vibration, and any other related nuisance.
22. EMINENT DOMAIN.
22.1 If all or any part of the Premises (or the building in which the Premises are located) 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.
22.2 If only a part 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 reduced in proportion to the diminution in value of the Premises. If
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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 reduced in
proportion to the diminution in value of the Premises.
C. Lessee shall provide City with written notice advising City of Lessee’s choice
within thirty (30) days of possession of the part condemned by the condemning public
entity.
22.3 City 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; and (b) any amount specifically designated
as a moving allowance or as compensation for Lessee’s personal property. Lessee shall have no
claim against City for the value of any unexpired term of this Lease.
23. POST-ACQUISITION TENANCY.
Except as otherwise set forth in Section 22.3 above, Lessee understands and agrees to waive all
claims for relocation assistance and benefits under federal, state or local law.
24. DISPUTE RESOLUTION.
24.1 Unless otherwise mutually agreed to, any controversies between Lessee and City
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.
24.2 The Parties may agree 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.
24.3 The costs of mediation shall be borne by the Parties equally.
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24.4 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 prevailing party shall
be entitled to recover their reasonable attorney's fees, expert witness costs and cost of suit.
25. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY.
No official or employee of City shall be personally liable for any default or liability under this
agreement.
26. NON-DISCRIMINATION
26.1 Non-discrimination in Lease Activities. Lessee agrees that in the performance of this
Lease and in connection with all of the activities Lessee conducts on the Premises, it shall not
discriminate against any employee or person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. Lessee acknowledges that is familiar with the
provisions set forth in Section 2.30.510 of the Palo Alto Municipal Code relating to
nondiscrimination in employment and Section 9.73 of the Palo Alto Municipal Code relating to
City policy against arbitrary discrimination.
26.2 Human Rights Policy. In connection with all activities that are conducted upon the
Premises, Lessee agrees to accept and enforce the statements of policy set forth in Section
9.73.010 which provides: “It is the policy of the City of Palo Alto to affirm, support and protect
the human rights of every person within its jurisdiction. These rights include, but are not
limited to, equal economic, political, and educational opportunity; equal accommodations in all
business establishments in the city; and equal service and protection by all public agencies of
the city.”
27. INDEPENDENT CONTRACTOR.
It is agreed that Lessee shall act and be an independent contractor and not an agent nor
employee of City.
28. CONFLICT OF INTEREST.
Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in
performance of this agreement. Lessee warrants and covenants that no official or employee of
City nor any business entity in which any official or employee of City is interested: (1) has been
employed or retained to solicit or aid in the procuring of this agreement; or (2) will be
employed in the performance of this agreement without the divulgence of such fact to City. In
the event that City determines that the employment of any such official, employee or business
entity is not compatible with such official's or employee's duties as an official or employee of
City, Lessee upon request of City shall immediately terminate such employment. Violation of
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this provision constitutes a serious breach of this Lease and City may terminate this Lease as a
result of such violation.
29. MEMORANDUM OF LEASE.
Following execution of this Lease, either party, at its sole expense, shall be entitled to record a
Memorandum of Lease in the official records of Santa Clara County. Upon termination or
expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold
interest.
30. ESTOPPEL CERTIFICATE.
Lessee shall, from time to time, upon at least thirty (30) days prior written notice from City,
execute, acknowledge and deliver to City a statement in writing: (i) certifying this Lease is
unmodified and in full force and effect, or, if modified, stating the 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
Lessee’s knowledge, any defaults, or stating if any defaults are claimed, any statement may be
relied upon by any prospective purchaser or encumbrance of the Property.
31. LIENS.
Lessee agrees at its sole cost and expense to keep the Property free and clear of any and all
claims, levies, liens, encumbrances or attachments.
32. VACATING.
Upon termination of the tenancy, Lessee shall completely vacate the Property, including the
removal of any and all of its property. Before departure, Lessee shall return the Premises to a
good, clean and sanitary condition, reasonable wear and tear excepted. Lessee shall allow City
to inspect the Property and complete a walk-through to verify the condition of the Property and
its contents.
33. ABANDONMENT.
Lessee's absence from the Property for three (3) consecutive days, without prior notice, during
which time rent or other charges are delinquent, shall be deemed abandonment of the
Property. Such abandonment will be deemed cause for immediate termination without notice.
City shall thereupon be authorized to enter and take possession and to remove and dispose of
the property of Lessee or its guests without any liability whatsoever to City.
34. NOTICES.
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All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed
as follows:
City of Palo Alto
Real Estate Division
Palo Alto Lawn Bowls Club
Attention:
President & CEO
250 Hamilton Avenue 450 Bryant Street
Palo Alto, 94301 Palo Alto, CA 94063
Phone: 650-329-2264
Fax: 650-323-8356
Phone: 650-289-5400
Fax: 650-328-0366
Notices may be served upon Lessee in person, by first class mail, or by certified mail whether or
not said mailing is accepted by Lessee. Notices sent via regular mail shall be deemed given 48
hours after the same is addressed as required herein and mailed with postage prepaid. 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. These
addresses shall be used for service of process.
35. TIME.
Time shall be of the essence in this Lease.
36. AMENDMENTS.
It is mutually agreed that no oral Leases have been entered into and that no alteration or
variation of the terms of this Lease shall be valid unless made in writing and signed by the
Parties to this Lease.
37. SIGNING AUTHORITY.
If this Lease is not signed by all Lessees named herein, the person actually signing warrants that
he/she has the authority to sign for the others.
38. CAPTIONS.
The captions of the various sections, paragraphs and subparagraphs of this Lease are for
convenience only and shall not be considered or referred to in resolving questions of
interpretation.
39. SURRENDER OF LEASE NOT MERGER.
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The voluntary or other surrender of this lease by Lessee, or a mutual cancellation thereof, shall
not work a merger, and shall, at the option of City, terminate all or any existing subleases or
subtenancies, or may, at the option of City, operate as an assignment of any and all such
subleases or subtenancies.
40. INTEGRATED DOCUMENT.
This Lease, including any exhibits attached hereto, embodies the entire agreement between
City and Lessee. No other understanding, agreements, conversations or otherwise, with any
officer, agent or employee of City 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 City. All
agreements with City are subject to approval of the City Council before City shall be bound
thereby.
41. WAIVER.
Waiver by City of one or more conditions of performance or any breach of a condition under
this Lease shall not be construed as a waiver of any other condition of performance or
subsequent breaches. 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 City shall not
preclude City from exercising the same or any and all other remedies, rights, options and
privileges hereunder and City's failure to exercise any remedy, right, option or privilege at law
or equity, or otherwise which City may have, shall not be construed as a waiver.
42. 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
any other Party.
43. 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.
44. GOVERNING LAW.
This Lease shall be governed and construed in accordance with the statutes and laws of the
State of California.
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45. VENUE.
In the event that suit shall be 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.
46. 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.
47. BROKERS.
Each party represents that is has not had dealings with any real estate broker, finder, or other
person, with respect to this lease in any manner. Each 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.
48. PARKING
City grants to Lessee a nonexclusive right to share the parking spaces with Gamble Garden
along Churchill Avenue and Embarcadero Road as practical to the Premises, as specified by City
Manager or designee for the accommodations and parking of automobiles by Lessee, any
subtenants on the Premise and visitors to Palo Alto Lawn Bowls Club. Lessee agrees to abide by
any and all rules and parking regulation of the City for the subject parking area and the manner
and mode of Lessee’s use thereof.
49. AMENDMENTS. The parties acknowledge no oral agreements regarding this lease have
been entered into by and that no alteration or variation of the provisions shall be valid unless
made in writing, and signed by the parties.
50. PRIOR LEASE SUPERSEDED. The prior lease between the City and Palo Alto Lawn Bowls
Club dated November 25, 2008 and amendment No1 dated September 9, 2012 thereto is
hereby terminated and superseded by this Agreement.
51. PREVAILING WAGE. All contractors and subcontractors performing work on the Project
are required by pay general prevailing wages as defined in Subchapter 3, Title 8 of the California
Code of Regulations and section 16000 et seq. and Labor Code Section 1773.1. Before entering
into a construction contract to perform work on the Project and at all times while performing
work on the Project, all contractors and subcontractors must be registered with the California
Department of Industrial Relations to perform public work under Labor Code Section
1725.5. Pursuant to Labor Code Section 1773, the general prevailing rate of per diem wages
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and the general rate for holiday and overtime work in this locality for each craft, classification,
or type of worker needed to perform the work for this Project may be obtained at the
Purchasing Office of the City of Palo Alto. All contractors and subcontractors for the Project
must comply with the provisions of Labor Code Sections 1775, 1776, 1777.5, 1810, and 1813.
For purposes of this section only, pursuant to Labor Code Section 1782, a public works contract
does not include contracts for projects of twenty-five thousand dollars ($25,000) or less when
the project is for construction work, or projects of fifteen thousand dollars ($15,000) or less
when the project is for alteration, demolition, repair, or maintenance work.
52. BOOKS & RECORDS. Lessee will permit the City to inspect and audit its books and record at
any time during this lease and three years thereafter, pertaining to matters covered by this Lease,
including but not limited to revenues collected for club membership and private rentals. Lessee further
agrees to maintain and retain such records for at least three (3) years after the expiration or earlier
termination of this Lease Agreement.
53. ATTACHMENTS TO LEASE (EXHIBITS).
The following exhibits are attached to and made a part of this Agreement:
“A” – Parcel Map of Subject Property
“B” – Subject Property
“C” - Premises
“D” – Standard Insurance Requirements
IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above
written.
CITY: LESSEE:
CITY OF PALO ALTO (LESSOR) Palo Alto Lawn Bowls Club
By: _______________________ By: __________________________
City Manager or Designee Title:
ATTEST: ____________________________
Type of Corporation:
_________________________
City Clerk
APPROVED AS TO FORM:
By: ________________________
Senior Asst. City Attorney
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Exhibit A
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Exhibit B
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EXHIBIT D
STANDARD 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 "City" shall include the duly elected or
appointed council members, commissioners, officers, agents, employees and volunteers of the
City of Palo Alto, California, individually or collectively.
Coverages (RL 28.1A) S
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1) Insurance Services Office Commercial General Liability coverage
(occurrence form CG 0001).
2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering
Automobile Liability, code 1 (any auto).
3) Workers' Compensation insurance as required by 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 MINIMUM LIMITS OF LIABILITY
(1) Commercial General Liability $1,000,000 per each occurrence for bodily
injury, personal injury and property damage
(2) Automobile Liability $ 1,000,000 Combined Single Limit
Including Owned, Hired and
Non-Owned Automobiles
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(3) Workers’ Compensation Statutory
Employers Liability $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, include 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 City of Palo Alto, including earthquake sprinkler
leakage. Up to the limit of $100,000.
(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.
(RL 28.2)
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At
the option of the City either: the insurer shall reduce or eliminate such deductibles or self-
insured retentions as respects the City, 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:
1. 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 the
City.
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2. Include a waiver of all rights of subrogation against the City and the members of
the City Council and elective or appointive officers or employees, and each party
shall indemnify the other against any loss or expense including reasonable
attorney fees, resulting from the failure to obtain such waiver.
3. Name the City of Palo Alto as a loss payee on the property policy.
4. Provide that the City, 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 the City, its officers, officials,
employees, agents or volunteers.
5. Provide that for any claims related to this Lease, the Lessee's insurance coverage
shall be primary insurance as respects the City, its officers, officials, employees,
agents and volunteers. Any insurance or self-insurance maintained by the City,
its officers, officials, employees, agents or volunteers shall be excess of the
Lessee's insurance and shall not contribute with it.
6. Provide that any failure to comply with reporting or other provisions of the
policies including breaches of warranties shall not affect coverage provided to
the City, its officers, officials, employees, agents or volunteers.
7. 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.
8. Lessee agrees to promptly pay to City 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-admitted carriers having current A.M. Best's
ratings of no lower than A-:VII.