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HomeMy WebLinkAbout2002-05-20 City Council (11)TO: FROM: City of Palo Alto City Manager’s Report ¯HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE: SUBJECT: MAY 20, 2002 CMR: 254:02 REQUEST FOR PROPOSALS TO LEASE THE ROTH BUILDING, 300 HOMER AVENUE, PALO ALTO RECOMMENDATION. Staff recommends that the City Council approve the attached Request for Proposals (RFP) package and direct staff to solicit proposals for leasing the Roth Building. BACKGROUND In April 2000, the City Council-approved the purchase of the Roth Building and its¯ 0,41 acre site for potential development as a "public facility or alternative use if a public facility is not feasible," in conjunction with the South of Forest Coordinated Area Plan (SOFA CAP). In acquiring the Roth Building, the City entered into a development agreement with the Palo Alto Medical Foundation (PAMF). The development agreement stipulates that the. City must complete demolition and removal of the non-historic wings by July 2003. The purpose of the demolition is to provide for additional park space and to provide a buffer of approximately 100 feet between the historic Roth Building ana a residential development project being undertaken by Summerhill Homes immediately south of the Roth Building. On December 11, 2001, staff presented a. City Manager’s Report (CMR:340:01) on the Roth Building’s potential reuse to the Policy and Service¯ Committee of the City Council. The Policy and Services Committee recommended that staff issue an RFP for non-profit organizations to lease the Roth Building. On March 4, 2002, Council: 1) approved the demolition of the basement/wings associated with the non-historic 1947 addition to the Roth Building; 2) approved the temporary retention of the spine of the 1947 addition; and 3) reviewed and commented on the summary of a Request for Proposals (RFP) for non-profit organizations to lease and renovate the Roth Building. Council’s comments included direction that the RFP require that any use of the Roth ¯Building include public access to the restrooms and that proposers be encouraged to provide a community room as part of the project. CMR:254:02 Page 1 of 6 DISCUSSION The attached RFP consists of an Information Flyer (summarizing the offering) and a Proposal Package (including Proposal Forms, Proposal Questionnaire, Option to Lease, and Lease). The intent of the RFP is to lease the property under a long-term lease to a non-profit group or organization(s) that can improve, maintain and operate the property for a use that: ¯provides public benefit and/or fills a public need ¯preserves and maintains the historic significance of the property ¯is compatible with adjacent park use ¯does not adversely impact the residential neighborhood Preference will be given to non-profit groups located in or serving Palo Alto. In addition, the RFP requires that improvements, maintenance and operation of the property be at no cost to the City. The RFP is summarized in Attachment A. Property Description Following City demolition of 1947 wings, the Roth Building will be approximately 17,000 square feet, consisting ofthe 2-story historic Roth Building (approximately 10,000 square feet) and the 1947 spine addition (approximately 7,000 square feet including a basement, first and second level.) Because the 1947 spine addition is not determined to be a significant historic, resource, future tenants of the property may choose to keep or demolish all or a portion of the spine. (See Attachment B) Use of the Property The RFP requires that the use of the property be of benefit to the City and community as a whole, that it be consistent with City goals and objectives as ~et forth in the .Comprehensive Plan and Zoning Ordinance, and that the impact of the proposed use not be detrimental to the neighborhood, community and environment. As directed by the City Council on March 4, 2002, proposers are also required to provide public access to the Roth Building restrooms by users of the park and strongly encouraged to provide a community meeting room as part of the project. Sensitivity to the amount of open space retained for park use adjacent to the building is also an important factor in design and use. Historic Preservation The RFP explains the architectural and historic significance of the Roth Building and that the City desires to preserve as much of its historic significance and integrity as possible. A summary of the guidelines for historic preservation included.in the Secretary of the Interior’s Standards of Rehabilitation for Historic Buildings is attached to both the Information Flyer and the Option to Lease. It will be up to the proposer to show how its proposed improvements and possible modifications to the_property are responsive to the Secretary’s Standards and Guidelines for historic preservation and rehabilitation. The CMR:254:02 Page 2 of 6 City maintains the ability to control the appropriate degree of historic preservation for the site through its evaluation and selection of proposals and required review and approval of the use and development plans during the option term. Required Improvements and Estimated Costs Not all significant improvements and costs necessitated by a new use of the property are possible to determine precisely without knowing the nature of the specific use of the property. However, the RFP identifies minimum improvements and related estimated costs required for upgrading existing systems to meet current codes and building practices. A list of required improvements and estimated costs totaling $4,360,000 are listed in Attachment/3 to the Information Flyer. These improvements and costs are for the historic Roth Building only. Renovating the additional 7,000 square feet of the spine will add approximately $2,000,000 in project costs for a total-of$6,360,000. During its discussion of the Roth Building on March 4, 2002, Council members expressed their desire to have the development and operation of the property by any long- term tenant be "cost neutral" to the City. The RFP requires that the development and operation of the property be at no cost to the City; however, it does not require the lessee to repay the cost of acquisition of the building or the full cost of demolition of the wings. The cost to acquire the building was $1,957,100. Estimated costs for demolition of the wings presented to Council on March 4, 2002 totaled $ $930,000, of which $130,000 was the cost to abate the lead paint and asbestos in the wings and historic Roth building. Staff has since considered the advantage of separating hazardous materials abatement of the property into two phases: 1) abatement of the wings and basement to be demolished; and 2) abatement of the historic Roth Building. The City would be responsible for the first phase involving the wings and basement. Once a use is determined, the future tenant would be responsible for second phase, abatement of the historic building, so that areas left unaffected by the new use need not be disturbed by the abatement. In this way, historical elements could be saved and costs may be reduced, as well. Therefore, the RFP includes in the costs of required tenant improvements an estimate of $75,000 ($65,000 plus $10,000 contingency), for the cost to abate the lead and asbestos in the historic Roth Building. Tenant responsibility for abatement in the historic building Will reduce the City’s previously estimated cost of $930,000 for hazardous materials abatement, demolition, and construction of a temporary bracing and enclosure structure by $65,000, for a new total of $865,000. Park Dedication and Leased Area The summary RFP presented to Council on March 4, 2002 provided for lease .of both the Roth Building and its .41 acre site. The RFP also anticipated including that leased area in the future park dedication for the SOFA park. However, staff now recommends limiting the lease to the building only and excluding the leased building from the park dedication. Lease of the entire .41 acre site ’(17,838 square feet) would include the landscaping surrounding the Roth !3uilding. This would result in the tenant being responsible~ for CMR:254:02 Page 3 of 6 landscape improvements and maintenance in that area. By limiting the lease to the building only, the City maintains responsibility for. the landscaping. Advantages of City retention of the land and landscaping surrounding the building are: 1) more consistency between the building landscaping and the park; 2) more City control of design issues involving interface between the Roth Building and park landscaping; 3) more control of access to the_building on the south side as it relates to the park design (plaza, building entrance, lighting, etc.); and 4) avoiding conflicts between the City and its tenant about how the landscaping should be improved and maintained, including the significant courtyard oak tree. Staff estimates the cost of landscape improvements to the Roth Building to be $50,000 to $70,000 and the annual cost of ongoing maintenance to be approximately $12,000. These costs would be included in the budget planning for the future park. The Palo Alto Municipal Code (PAMC) requires that dedicated parkland be open and accessible to the public. If the Roth Building leased area were included in the future park dedication, the strict limitations of the PAMC could prohibit potential non-profit public benefit uses, such as a group of non-profits that might want to lease the building for office space. Excluding the leased area from the future park dedication has the advantage of fewer limitations on potential non-profit uses of the property and does not significantly reduce the size of the future park, which would still be 2+ acres. For the above reasons, the attached RFP provides for lease of the building only, and anticipates that leased area will be excluded from the future park dedication. It should be noted that even though the future use of the property will not be limited by the strict requirements of the park dedication ordinance, the RFP does require that any use be compatible with the adjacent park use. Evaluation of proposals Proposers will be required to show how their proposed use, improvements and modifications meet the requirements for use and historic preservation of the property. Consistent with the City’s policy for the Leased Use of City Land/Facilities, proposers will be required to provide the following information, which will be considered in evaluating proposals:. 1) the extent to which the proposed leased use satisfies a public need or provides public benefit; 2) the extent to which the proposal is responsive to the guidelines and standards for historic preservation/rehabilitation; 3) the consistency of the proposed use with existing City goals and objectives (as set forth in the Comprehensive Plan, Zoning Ordinance, SOFA CAP, and general municipal services objectives); 4) the impact of the proposed use upon the neighborhood, community, and environment; 5) the degree of public access and fees to be charged to Palo Alto citizens; 6) the monetary and non-monetary consideration to be provided to the City; 7) the history and assessment of the proposer’s ability to finance and carry out the construction, operation and maintenance of the facility and services as proposed; 8) a five-year pro-forma financial analysis of the proposed use, setting forth the project revenues and expenses for this CMR:254:02 Page 4 of 6 period of time; and 9) ability to address sensitive design issues relating to adaptive reuse of the historic building and interface with the park. Proposers consisting of more than one non-profit organization will be required to provide evidence of financial/legal commitment as a group. This will avoid problems such as those that occurred during the first RFP process for the Williams property when, after the City granted the option to a consortium of three non-profit groups, two of the three groups backed out of the project, and the City had to withdraw the option. The RFP does not specify the form of financial commitment; however it should be sufficient that the City has some assurance of the stability of the groups’ association. One possibility is an "umbrella" corporation, which would legally define and strengthen the association between groups. In addition, evaluation of proposals by groups of non-profits will consider the degree of public benefit provided by each group and the compatibility of the groups with each other in terms of purpose and services offered, and use of the building. Proposals will be review6d and evaluated for recommendation to the City Council by a proposal evaluation committee comprised of representatives of staff from Planning, Real Estate, Public Works, Community Services, and a member of the Historic Resources Board and/or Architectural Review Board. Proposed Schedule for Solicitation Following Council approval, staff will advertise the RFP inlocal newspapers and send the information flyer to the City’s surplus property mailing list, local non-profit groups and to those persons and groups who have expressed interest in leasing the property. The RFP will also be added to the City’s website. Proposals will be accepted until May 20, 2003, when sealed proposals will be opened. Proposals and proposers will then be reviewed by the evaluation committee using the criteria summarized above, and the proposals and recommendations for a successful bidder will be forwarded to the City Council. RESOURCE IMPACT The RFP requires prospective tenants to lease, improve, maintain and operate the property at no cost to the City. Tenant responsibility for hazardous materials abatement of the historic Roth Building will reduce the previously identified demolition costs to the City by $65,000. Costs for City responsibility for the Roth Building landscaping will be included in the future budget planning for the park. POLICY IMPLICATIONS The RFP is consistent withPolicy and Procedures 1-11, Leased Use of City Land/Facilities. CMR:254:02 Page 5 of 6 ENVIRONMENTAL REVIEW The City certified a Final Environmental Impact Report for the Council adoption of the SOFA CAP Phase I and approval of the Development Agreement with PAMF. Both actions included the ret~ention, rehabilitation and community use of the historic Roth Building, with demolition of the 1947 wings, and development of a two-acre park. An environmental impact assessment (EIA), as may. be required by the California Environmental Quality Act, will be performed in connection with the proposal that staff ultimately recommends to the Council as the one that should be a awarded the option to lease the property, The EIA would address potential impacts including historic rehabilitation, parking and neighborhood compatibility..In addition, option conditions included in the RFP require optionees to comply with all requirements of the California Environmental Quality Act. ATTACHMENTS¯ Attachment A: Summary of RFP Attachment B: Site map ¯ Attachment C: Request for Proposal, including: -.Information Flyer Proposal Package PREPARED BY: JANET FREELAND ¯ Senior Financial Analyst DEPARTMENTAL HEAD APPROVAL :~~mA~~, iir~cC~Osr -~1~ ~clmilli~t~eServ" . CITY MAN/~GER APPROVAL:": EMILY HARRIS ON Assistant City Manager Dr. Donna Abbey Beth Bunnenberg Gloria Brown Carolyn. Caddes Karen Holman Sue Lowe Dick Rosenbaum Steve Staiger University South Neighborhood Group CMR:254:02 Page 6 of 6 ATTACHMENT A SUMMARY - ROTH BUILDING PROPERTY REQUEST FOR PROPSAL The Request for Proposal (RFP) consists of I.) the Information Flyer and II.) the Proposal Package. I.Information Flyer The information Flyer summarizes the offering and will be sent to interested person or organizations. The Information Flyer includes the following information: A.Minimum bid ($5,000, which reflects the estimated cost to solicit proposals,) and the date the proposals are due (May 20, 2003). B.General description of the property to be leased, including location map. C.Statement of intent of the RFP and requirements for use. D.Required improvements, maintenance and historic preservation. E.Summary of the terms of the Option to Lease and Lease. F.Instructions for obtaining the Proposal Package. II.Proposal Package The Proposal Package summarizes the proposal requirements and procedures and lists the evaluation criteria. It includes the Proposal Forms,. Proposal Questionnaire and the Option to Lease and Lease. A.Option to Lease - The term of the Option is 2 years, and it may not be exercised until the Optionee has fulfilled the following conditions: 1. Paid the purchase price of the Option (minimum $5,000). 2.Submitted schematic plans for the project within six (6) months of the commencement of the option. 3.Received approval of its development plans for the entire project from the Historic Resources Board (HRB), Architectural Review Board (ARB); Planning & Transportation Commission and City Council. Bo o Received approval from the City Engineer and Chief Building Official of construction drawings, including the construction contract form and proposed construction schedule. If property is phased, this requirement shall apply only to Phase I improvements. 5.Complied with all requirements of the California Environmental Quality Act (CEQA). Received approval from the City Manager of a long-term maintenance plan and schedule for the building during the lease term. Received approval of any land use permits or approval required to implement the project and development plans. Provided evidence to the Real Property Manager that any and all permits from any agencies having pre-construction jurisdiction over the proposed development have been authorized and are available. If property is phased, this requirement shall apply only to Phase I improvements. Satisfied theDirector of Administrative Services that the Optionee has sufficient finances or financial commitments to implement the project as approved by the City and furnish to the Director of Administrative Services evidence that sufficient financial security will be available to construct the project. 10.Submitted to the Real Property Manager a security deposit as required by the Lease. Lease - the key provisions in the lease are as follows: 1.Premises: the property and improvements known as the Roth Building located at on Homer Avenue in Palo Alto. Required uses: specific use is to be determined, but any use shall provii:le public benefit, be compatible with adjacent park use and have no adverse impact on the neighborhood. 3. Term: 30 years Rent: the minimum rent is $1.00 per year. The amount of any monetary rent will depend on the value of improvements and the public benefit (non-monetary consideration) proposed. Improvements to be made by tenant: Required improvements will be those improvements which are identified and shown in the plans approved by the City during the option period. Construction or additional alteration by tenant subsequent to the initial construction: Tenant may not make any changes to the property without prior City review and approval. 7. SecurityDeposit: $10,000 o Maintenance and Repairs: Tenant shall be responsible for all maintenance and repairs in accordance with the City-approved maintenance program approved during the option period. Assignments and subletting: Any assignment, subletting or encumbrance of the lease is subject to City approval. 10.Taxes, Assessments and Utilities: Tenant shall be responsible for all costs for utilities, taxes and assessments for the premises. 11.Insurance: The tenant shall maintain insurance meeting the City’s standard requirements for insurance protection, ATTACHMENT B ATTACHMENT C REQUEST FOR PROPOSAL, including Information Flyer Proposal Package ROTH BUILDING Information Flyer CITY OF PALO ALTO SUMMARY OF LEASE OPPORTUNITY REQUEST FOR PROPOSALS LEASE OF CITY-OWNED PROPERTY 300 HOMER AVENUE, PALO ALTO WHERE IS IT? Wr T: S TI-m WHAT USES WOULD BE PERMITTED? WHEN ARE PROPOSALS DUE? IS THERE A MINIMUM B/D? HOW DOI GET A PROPOSAL An opportunity to obtain a 2-year option to lease with a 30, year lease to develop and operate a public benefit facility in a City-owned property consisting of a 17,000 square foot former medical office building commonly known as the Roth Building (see attached maps). At 300.Homer Avenue, Palo Alto. The property is currently zoned PF (Public Facility).. Uses by non-profit organizations providing public benefit and public access. Depending on the nature of the specific use, a conditional use permit or zone change may be required. Proposals are due on or before 3:00 p.m. on Tuesday, May 20, 2003 and should be submitted to: ¯ Manager, Purchasing/C0ntract Administration City of Palo Alto, First Floor P.O. Box 10250 Palo Alto, CA 94303 The minimum acceptable bid for the purchase of the Option to Lease is $5,000. If you would like to obtain the Request for Proposals package or are interested in further information, please contact: Janet Freeland City of Palo Alto/Real Estate Division 250 Hamilton Avenue P:O. Box 10250 Palo Alto, CA 94303 . (650) 329-2662 rothwordflyerl GENERAL DESCRIPTION OF PROPERTY, !MPROVEMENTS AND SURROUNDINGS A. Background: Originally part of the former Palo Alto Medical Clinic, the Roth Building was purchased by the City of Palo Alto in April 2000 for potential development as a public facility in conjunction with the South of Forest Coordinated Area Plan. Located at 300 Homer Avenue in Palo Alto, the original portion of the Roth Building is a "U" shaped building, approximately 10,000 square feet in size. The two legs of the "U" are single story, with the connecting corridor spine of the building having both a second story and partial basement. Currently, a 1947 addition connects two non-historic wings to the historic building with a similar spine along the south wall of the original building, forming the .total building ’H’ " shape (see Attachment A-2). The connecting spine contains a stairway and an elevator. As required by a development agreement with the Palo Alto Medical Foundation (PAMF), the City plans to demolish and remove the non- historic Roth Building wings by July 2003. The City’s demolition of the 1947 wings will not include the central spine element, which will save the existing Streamline Moderne stairway, the elevator and a central corridor with a decoratively patterned floor. Retention of the central spine will provide approximately 7,000 square feet of additional area for the Roth Building (refer to Attachment A-2), eliminating the need to impact the historic building with a new elevator and stairway. ConstruCted in 1932, the original Roth Building is considered one of the most important works of Palo Alto’s premier historic architect, Birge Clark. Designed in Clark’s signature Spanish Colonial Revival style, features of the building include the low-pitched red tile roof, the Monterey-style wood balcony at the back of the courtyard, hand-adzed beams, decorative copper downspouts, circular tiled attic vents, hand- pressed stucco walls and steel sash. Particularly notable are the fresco murals flanking the entry doors that depict medical procedures of the early twentieth century. Victor Amautof, a disciple of the celebrated Mexican artist Diego Rivera, painted the murals. The siting of the Roth Building is also significant, as its courtyard was designed around one of the most majestic oaks in Palo Alto. B.Property Description, Improvements, Surroundings: The property available for lease is an approximately 17,000 square foot building. The historic Roth Building consists of a 9,923 square foot 2- story building with 9,187 square feet of usable interior space (6,646 on the first floor and 2,541 on the second floor). The 1947 central spine adds approximately 7,000 square feet of floor space, consisting of approximately 2,350 square feet of floor space each on a basement, first and secondlevel. Because the 1947 spine addition is not determined to be a significant historic resource, future tenants Of the property may choose to keep or demolish all or a portion of the spine. However, it should be noted that when the 1947 wings were added, the south wall .and stairway of the historic building were completely removed. Reconstruction of this side of the building, after the removal of the 1947 addition, would be subject to the Secretary of Interior’s Standards for Rehabilitation of Historic Buildings, and would require a new stairway and elevator to be installed in the original corridor spine. The landis currently zoned Public Facility (PF). Located in an area. currently under development, the site will eventually be adjacent to a public park on the northeast, multiple-family residential on the east and south and office use on the west. The site has no on-site parking, and use of the site will require a parking variance. The Development Agreement with PAMF provides for 60 off- site public parking spaces for the Roth Building at the proposed office building at Bryant and Homer (2501270 Homer). The off-site parking would be provided only on Saturdays and Sundays from 8 a.m. until 9 p.m., and on weekday evenings between 6 p.m. and 10 p.m. ROTH BUILDING - REQUIRED USES AND IMPROVEMENTS GENERAL STATEMENT OF INTENT OF REQUEST FOR PROPOSALS The Roth Building is historically significant and will be located adjacen~ to a dedicated public park. It is the City’.s desire to lease the property ¯ under a long term lease to a non-profit group or .organization* that can improve, maintain and operate the property for a use that is compatible with the park, benefits the City and community as a whole, preserves and maintains the historic significance of the property and does not adversely impact the residential neighborhood. Preference will be given .to non-profit groups located in or serving Palo Alto. The City seeks a long-term tenant to improve, maintain and operate the property so that no cost is incurred by the City for operating or upgrading the facility and so that public benefit .is generated for.the City. *NOTE: proposers consisting of more than one non-profit group or organization will be required to provide evidence of financial commitment as a group. 2 B.ROTH BUILDING - REQUIREMENTS FOR USE The City will require that the use of the property be of benefit to the City and community as a whole, that it is consistent with City goals and objectives as set forth in the Comprehensive Plan, the South of Forest Coordinated Area Plan (SOFA CAP) and Zoning Ordinance, and that the impact of the proposed use will not be detrimental to the neighborhood, community and environment. The City will require public access to the Roth Building restrooms by users of the adjacent park and also strongly encourages the provision of a community meeting room as part of the project. REQUIREMENTS FOR IMPROVEMENTS, MA!NTENANCE AND I-USTORIC PRESERVATION. ImproTements and modifications that will be necessitated l~y .a ¯ future use of the property are not possible to determine precisely without knowing the nature of the specific use. However, a City consultant has evaluated the existing architectural and structural conditions of the historic Roth Building and made recommendations and estimates of costs for upgrading existing systems to meet current codes and building practices. The estimated cost of doing the structural upgrades and exterior shell renovations is $1,163,000, including a new heating, ~,entilation and air conditioning system, new stairs and a new elevator. In addition to the renovations recommendedby the consultant, the Roth Building needs hazardous materials abatement, electrical, mechanical, plumbing and telecommunications systems upgraded or replaced, and the accessibility features (ADA) of the building need to be evaluated and brought up to the current code. Utility .services to the building and streetscape elements such as sidewalks would also need to be evaluated and upgraded. A list of required improvements and estimated costs are listed in Attachment B and total $4,360,000. Note that these improvements and costs are for the historic Roth Building only. Renovating the additional 7,000 square feet of the spine will add approximately $2,000,000 in project costs.. The property is architecturally and historically significant, and the City desires to preserve as much of the historic significance and integrity as possible. General guidelines for historic preservation are included in the Secretary of the Interior’s Standards of Rehabilitation for Historic Buildings (see Attachment C). It will be up to the proposer to show how its proposed improvements and possible modifications to the property are responsive to the standards and guidelines for historic preservation and rehabilitation. The site has no on-site parking; therefore, use of the site will require a parking variance, and uses with low parking demand are preferred. The Development Agreement with PAMF provides for 60 off-site public parking spaces for the Roth Building at the proposedoffice building at Bryant and Homer (250/270 Homer). The off-site parking would be provided only on Saturdays and Sundays from 8 am until 9 p.m., and on weekday evenings between 6 p.m. and 10 p.m. SUMMARY OF LEASE AND OPTION TO LEASE A.OPTION REQUIREMENTS The successful proposer will be awarded a 24-month Option to Lease the property. As reflected under the form of the Option to Lease Agreement, during the option period the optionee must obtain plan approvals and permits required for the proposed improvements and modifications to the property, obtain City approval of any required conditional use permit, variance or other discretionary approval that may be required for the proposed use; and provide evidence that sufficient financial security will be available to complete, operate and maintain the project. City review of the optionee’s plans will include review by the Historic Resources Board, Architectural Review Board, Planning and Transportation Commission and City Council of both exterior and interior modifications to the building. The option may be exercised at any time within the option period that the optionee has satis,factorily met all of the Option.requirements. B OUTLINE OF LEASE PROVISIONS Some of the major Lease provisions are highlighted below~ This information is not intended to be definite but.is intended to provide a basic summary of the major lease provisions. It is the responsibility of each prospective tenant to review the request for proposals and proposal package, and the documents contained in the package, including both the form of Option to Lease document and the form of the Lease, examine the economic environment, and make such further investigation as necessary to insure that he/she fully understands thenature 0f the undertaking and the obligations he/she will assume if the proposal is accepted. The form of the legal documents may also be subject to change and further negotiation with the City once the successful proposers is chosen, based on the use of the property. ao bo c° Term of Lease:30 years Required use: use by a non-profit agency or organization which includes public access and public benefit Rent: The minimum rent is one dollar ($1.00) per year. The amount of any monetary rent will depend on the nature and value of the improvements and the public benefit (non-monetary consideration) proposed. Improvements to be made by the tenant: Required improvements are those improvements necessary to accommodate the proposed use and to preserve the historic integrity of the building and property and those which ale identified and shown in the plans approved by the City during the option period. ~ Insurance: The tenant shall maintain the following insurance acceptable to the City in full force and effect through the terms of the Lease. The policy or policies of insurance maintained by the tenant shall provide the following limits and coverage with the City being names as additional insured under the policy or policies: POLICY MINIMUM LIMITS OF LIABILITY WORKER’S COMPENSATION Statutory COMPREHENSIVE AUTOMOBILE LIABILITY Including Owned, Hired And Non-Owned Automobiles Bodily Injury Property Damage $1,000,000 ea. person $1,000,000 ea. occurrence $1,000,000 ea. occurrence COMMERCIAL GENERAL LIABILITY Including Products and Completed Operations, Broad Form Contractual And Personal Injury Bodily Injury Property Damage $1,000,000 ea. person $1,000,000 ea. occurrence $1,000,000 aggregate $1,000,000 ea. occurrence F!RE AND EXTENDED COVERAGE Not less than 100% of replacement cost. Assignment~. Any assignment or encumbrance of the lease must receive prior City approval. 5 o Utilities: The tenant shall be responsible for all utilities supplied to the premises. Maintenance and Repair: The tenant shall be responsible for all maintenance and repairs in accordance with a City approved maintenance program to preserve the historic features of the building. °Taxes and Assessments: The tenant shall be responsible for all taxes and assessments (including by not limited to possessory interest tax). ATTACHMENT A-I LOCATION MAP 300 Homer Avenue ALTOS , LOS oNE/v~ILF_. ATTACHMENT A-2 ATTACHMENT B HISTORIC ROTH BUILDING REQUIRED IMPROVEMENTS AND ESTIMATED COSTS 1.Renovate historic building including seismic upgrade $1,163,000 2.Interior/tenant improvements $1,247,000 3.Replace/upgrade utility service $ 200,000 4.Hazardous Materials Abatement (lead/asbestos)$ 75,000 5.Contingency & Soft costs $1,675,000 $4,360,000* *NOTE: These estimated costs are for the historic Roth Building only. Renovation of the additional 7,000 square foot spine of the building will add approximately $2,000,000 in project costs. Also, these costs assume construction in 2003 and should be escalated for construdtion occurring later. These costs do not include furniture, fixtures, or equipment. Rothgeneraldescription2 o ° ° 10. ATTACHMENT C Secretary of the Interior’ s Standards for Rehabilitation* A property shall be used for its’ historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. The historic character of the property shall be retained and preserved. The removal of historic material or alteration of features and spaces that characterize a property shall be avoided. Each property shall be recognized as a physical record of its time, place and use. Changes that create a false sense of historic development, such as adding conjectural features, or . architectural elements from other buildings, shall not be undertaken. Most properties change over time: Those changes that have acquired historic significance in their own right shall be retained and preserved. Distinctive features, finishes, and construction techniques or examples of craftmanship that characterize a historic property shall be preserved. " Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical or pictorial evidence. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shah not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measure shall be undertaken. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated form the old and shal! be compatible with the massing, size, scale, and architecturalfeatures to protect the historic integrity of the property and its environment. New additions and adjacent or related new construction shah be undertaken in such a manner that if removed in the future, the essential form and integrity o~ the historic property and its environment would be unimpaired. *Guidelines for these Standards are available for public review in the Palo Alto Planning Department. RothattC3 Request for Proposals and Proposal Package REQUEST FOR PROPOSALS AND PROPOSAL PACKAGE ROTH BUILDING This Request for Proposals and Proposal Package includes a summary of the proposal requirements and procedures, and the Proposal Forms (Proposal, Questionnaire, Option to Lease Agreement and Lease.) The Information Flyer attached to this Request for Proposals (the "Information Flyer") is hereby incorporated by reference into ~this Request for Proposals and Proposal Package. PROPOSAL REQUIREMENTS AND PROCEDURES- A.HOW TO SUBMIT A PROPOSAL In order to submit your proposal you must: Provide a written description of the proposed project as indicated in the PROPOSED USE, HISTORIC PRESERVATION AND DEVELOPMENT OF PROPERTY (Attachment A). o Complete and sign the attached PROPOSAL PACKAGE and PROPOSER’S QUESTIONNAIRE (Attachment B), and attach the Option to Lease and Lease documents (Attachment C). o Complete and sign the attached PROPOSED PHYSICAL CHANGES TO PROPERTY and ENVIRONMENTAL ASSESSMENT WORKSHEET (Attachment D). A£tach a $5,000..00 PROPOSAL DEPOSIT in the form of a cashier’s check, or certified check made payable to: City of Palo Alto. °Return the completed proposal in a sealed envelope before the due date and time to: Manager, Purchasing/Contract Administration City of Palo’Alto, First Floor 250 Hamilton avenue P.O. Box 10250 Palo Alto, CA 94303 o Mark the envelope: 3:00 p.m." "Roth Building - opening 05/20/03, Proposals are due before 3:00 p.m., Tuesday, May 20, 2003. considered, proposals must be received prior to this time. To be Bo REQUIRED PROPOSAL INFORMATION AND EVALUATION OF PROPOSALS Proposal documents shall be reviewed and proposers interviewed by a committee made up of representatives of City staff from Planning, Real Estate, Public Works, Community Services and a. member of the Historic Resources Board and/or Architectural Review Board. Review of proposals shall consider many factors, including but not limited to the following, information which must be provided in each proposal: The extent to which the proposal satisfies a public need or provides public benefit. Preference will be given to non-profit groups located in orserving Palo Alto. o The extent to which the proposal is responsive to the guidelines and standards for rehabilitation for historic preservation of the property as set out in the Secretary of .the Interior,s Standards for Rehabilitation of Historic Buildings attached as Exhibit II to the Option to Lease Agreement. o The consistency of the proposed use with existing City goals and objectives (set forth in the Comprehensive Plan, Zoning Ordinance, and Municipal Code); The impact of the proposed use upon the immediate neighborhood,the community generally, and the environment. o The history and assessment of the proposer’s ability to carry out the proposed improvements and operate the facility and services as proposed; Th~ consideration (monetary and non-monetary) provided to the City. to be °The degree- of public access, i.e., the numbers of people, especially City residents and taxpayers, that will be served by the proposed use. o The fees.that will be charged to Palo Alto citizens, if any. °A five-year pro-forma financial analysis of the proposed use, setting forth the project revenues and expenses for that period of time. I0. Ii. Evidence of the proposer’s ability to finance or to obtain financing for the requited improvements. NOTE: If the proposal is being submitted by more than one group or organization, evidence of financial commitment, as a group is required. Evidence of the proposer’s ability to address sensitive design issues relating to adaptive reuse of the historic building and interface with the pa~k. All proposals, together with the evaluation committee’s recommendations for a successful proposer, will then be forwarded to the City Council for its selection of the successful proposal. The City council .reserves the right to reject any and all proposals or to accept that proposal which, in its opinion, will best serve the public interest. C o MINIMUM PURCHASE PRICE OF THE OPTION TO LEASE The minimum bid for the purchase price of the Option is $5,00O.0O. ROTHPROPKG4 PRO] ECT: PRO3 ECT NO: PROPOSAL PACKAGE (With Option to Lease) THIS IS A PROPOSAL TO ACQUIRE AN OPTION TO LEASE FOR PROPOSER Name: Add ress : (Please print) Phone No. Home ( )Work ( ) The undersigned ("PROPOSER"), hereby submits a proposal to the City of Palo Alto, ("CITY") to acquire a lease more fully described in the Option to Lease Agreement (A1-FACHMENT C) and its exhibits, in accordance with the terms, covenants, and conditions contained in this PROPOSAL and in the Option to Lease Agreement. A.PROPOSER HEREBY PROPOSES THE FOLLOWING: 1.Monetary Bid Items: a)PROPOSER agrees to pay .to CITY as the purchase price of the option, as set forth in Clause 3 (PURCHASE PRICE OF OPTION) of the attached Option to Lease Agreement: (Amount in Words)(Amount in Numbers) Additional monetary bid items (including proposed rental during lease term): J Non-Monetary Bid Items (these may be described in Attachment A, PROPOSED USE, PRESERVATION AND DEVELOPMENT OF PROPERTY): REALESTATI= , 7/MSPROP2 B.TERMS AND CONDITIONS PROPOSER has carefully read and fully understands this PROPOSAL document and the Option to Lease Agreement attached to this PROPOSAL, including its exhibits. The Option to Lease Agreement, and its exhibits, is an integral part of this PROPOSAL and must be attached to this PROPOSAL. PROPOSER warrants that it has ~the capability to successfully undertake and complete the responsibilities and obligations of OPTIONEE and TENANT contained in the Option to Lease. Agreement and its exhibits. A ~PROPOSER’s Deposit in the sum of Five Thousand Dollars ($5,000.00), in the form of a .Cashier’s or Certified Check made payable, to the City of Palo Alto, must be submitted with this PROPOSAL and is attached hereto. m The PROPOSER"s Deposit will be held by CITY as a guarantee securing the obligations PROPOSER agrees to assume in this PROPOSAL. In the event this PROPOSAL is accepted by CITY and PROPOSER fails to meet the terms hereof,. PROPOSER agrees that said sum represents a fair and reasonable estimate of CITY’s cost in preparing and soliciting this offering, and PROPOSER further agrees that said sum shall be retained by CITY as compensation for these costs. Upon execution of the Option to Lease Agreement, said sum shall, at PROPOSER’S option, be returned to PROPOSER or shall be credited toward the. Security Deposit required under the Option to Lease Agreement. PROPOSER’s Deposit will be returned .to each proposer not selected by the City upon City’s execution of an Option to Lease Agreement with the successful proposer. This PROPOSAL may .be withdrawn at any time prior to the time set for opening the proposals but may not be withdrawn after the time set for such opening, i.e., Nay 20, 2003, 3:00 p.m. Within ten (10) days after notificatio~n of the acceptance of this PROPOSAL by CITY, PROPOSER will execute copies of the Option to Lease Agreement in duplicate and deliver to CITY the executed copies of said agreement, the required Security Deposit and the balance of the purchase price of the option as set forth in the Option to Lease Agreement. PROPOSER has fully compl.eted the Proposed Use, Preservation and Development of .Property (Attachment A), the Proposer’s Questionnaire (Attachment B) and the Proposed Physical Change to Property and Environmental Assessment Worksheet (Attachment D). Attachment A, the completed Questionnaire and the Option to Lease Agreement with its exhibits, including the Lease (Attachment C)~ and the~ Proposed Physical Changes to Property and Environmental Assessment’Worksheet (Attachment D), are.attached to this PROPOSAL together with any appropriate or requested supplemental material. PROPOSER represents that all of the information contained in or supplementing said Questionnaire is true and correct to the best of. PROPOSER’s knowledge~ 10.CITY reserves the right to reject any or all PROPOSALS and to accept that PROPOSAL which will, in its opinion, best.serve the public interest. - REALESTATE. 7/MSPROP2 11. 12. 13. public interest. By submission of this proposal, PROPOSER acknowledges and agrees that the CITY has the right to make any inquiry or investigation it deems appropriate to substantiate or supplement information contained in this Questionnaire, and authorizes the release to CITY of any and all information sought in such inquiry or investigation. AI-FACHMENT A (Proposed Use, Preservation and Development of Property), ATTACHMENT .B (Proposer’s Questionnaire), ATTACHMENT C (Option to Lease Agreement) and AI-FACHMENT D (Proposed Physical Changes to Property and Environmental Assessment Worksheet) are attached to and by this reference made a part of this PROPOSAL. ? PROPOSER acknowledges and agrees that the Option to Lease Agreement and its exhibits, Including the Lease, may be subject to change and further negotiation with the City, based on the proposed use by the successful PROPOSER for the property. PROPOSER (Please sign) (Corporate seal) Date ROTHPROP5 REALESTATE. 7/MSPROP2 ATTACHMENT A PROPOSED USE, HISTORIC PRESERVATION AND DEVELOPMENT OF PROPERTY ATTACHMENT A PROPOSED USE, HISTORIC PRESERVATION AND DEVELOPMENT OF PROPERTY Provide a description of your proposed use and improvement of the property. This description can be of any length and must be included as Attachment A to ~he proposal. The description must include all of the following information: "How your proposed use will satisfy a public need and benefit the City and/or community. o .The degree of public access providedby, your proposed use, including how you propose to make the Roth building restrooms available for use by the public using the adjacent park (required) and whether you plan to provide a community meeting room as part of your project (encouraged). How your proposed modifications to the property are responsive to the Secretary’s Standards For Rehabilitation of Historic Buildings, which is attached as Exhibit II to the Option to Lease Agreement. A description of the .improvements to be performed to the property as required under Section II (C) (2) of the Information Flyer. o Your plan for managing the parking need generated by your proposed use, i.e., alternatives to on-site parking. o Describe the pertinent expertise and experience of any members involved in your project team, including any consultants (architects, engineers) to demonstrate ability to provide design solutions, including adaptive reuse through historic preservation, transitions with the park area (including the spine, if retained) and interface with the neighborhood. ATTACHMENT B PROPOSERS QUESTIONNAIRE ATTACHMENT B PROPOSERN QUESTIONNAIRE All information requested in this questionnaire MUST be furnished by the PROPOSER, and MUST be submitted with the PROPOSAL. Statements must be complete and accurate. Omission, inaccuracy, or misstatement MAY be cause for rejection of this PROPOSAL. How did you learn of this PROPOSAL offering? ()1. () () 3. Received City. direct mail flyer Word of mouth .~ Read about offering in following newspaper, magazine or newsletter: I. PROPOSER Name of PROPOSER exactly as it appears on the PROPOSAL and as it will appear on any proposed agreement with the City: Address of PROPOSER for purposes of notices or other communication relating to the PROPOSAL: Telephone Number of PROPOSER: PROPOSER intends to operate as a Sole Proprietorship ( ); Partnership (); Corporation ( ): Joint Venture ( ); or A’I-I’ACHMENT B 1 II. SOLE PROPRIETORSHIP STATEMENT ¯ If a Sole Proprietorship, furnish the following: 1.Name in full: 2.Address: 3.California Driver’s Lic. No, Is proprietor doing business under a fictitious business name? If so, furnish evidence that proprietor is authorized to do business und,er such fictitious business name (e.g.) notice published in newspaper of general circulation; no. of filing with a County Clerk). III. PARTNERSHIP STATEMENT If a Partnership, furnish the following: 1.Date of Organization? 2.General Partnership ( ) Limited Partnership ( ) 3.Statement of Partnership recorded? Yes ( ) No ( ) .Date Book Page Has the partnership done business in Santa Clara County? Yes () No () When? County " A’I’I’ACHMENT B Name, address, and partnership ~hare of each general partner. Name Address Share m Furnish the Social Security number and California Driver’s License number of’each person shown above. V. NON-PROFIT CORPORATION STATEMENT* If a non-profit corporation, furnish one copy of.the following: Articles of incorporation Bylaws A letter from the Internal Revenue Service stating that the. organization is tax exempt under Section 501(c)(3) or 101(b) of the IRS Code. A tax-exempt status under Section 170(b) or 509(a) is also acceptable. The IRS letter must contain the proper name and address of the organization, or a copy of the change notice:which has been forwarded to them. A letter from the State of California stating that th~ organization is tax exempt. State the mission of the organization: 3.Please attach an organization chart showing Board of Directors, members, if any, management and staffing levels.. 4.Please include a membership list of your Board of Directors, their City of residence, occupations, and dates of service on the Board. 5.How often does.your Board meet? 6.What was the average attendance at Boardmeetings last year? *NOTE: Proposers consisting of more than one non-profit organization shall provide evidence of financial/legal commitment as a group A’I-rACHMENT B VI. ~IOINT VENTURE STATEMENT If a Joint Venture, answer the following: 1.Date of Organization 2.Joint Venture Agreement recorded? Yes ( ) No ( ) 3.Has the Joint Venture done business in Santa Clara County? Yes () No ( ) When? 4.Name and address of each Joint Venturer: Name Address Furnish the Social Security number and California Driver’s License number of each person or principals or officers of any entity Shown under Item 4 above: 6.Attach a complete copy of the Joint Venture Agreement and any amendments. A’I’I’ACHMENT B VII. FINANCIAL DATA F!NANCIAL STATEMENT Attach complete audited financial statements, prepared in accordance with generally accepted accounting principles, reflecting your current financial condition and that of the previous five years. The report must include a balance sheet and income statement and must prepared by a licensed auditor. You must be prepared to substantiate all information shown. SURETY ~XlFORMATION Have you ever applied for and obtained a bond? If so, provide details of most recent bond. Hav.e you ever had a bond or surety denied, canceled or forfeited? Yes ( ) No ( ) If yes, attach a statement naming the bonding company, date, amount of bond, and reason for such cancellation or forfeiture. Co BANKRUPTCY INFORMATION Have you ever filed bankruptcy or been declared bankrupt? Yes ( ) No ( ) If yes, give details, state date(s), court jurisdiction(s), case docket number(s), amount of liabilities, and amount of assets. A’I-rACHMENT B Do PROPOSED METHOD OF FINANCING REPAIRS/IMPROVEMENTS/USE/OPERATION The development and operation to which this proposal relates shall be financed in the following manner: FELONY INFORMATION Have you or any principals or officers of the partnership or officers or directors of the corporation, as applicable, ever be~n convicted of a felony? Yes ( ) No ( ) If yes, please state date(s), court location(s) and details of conviction. A’I’I’ACHMENT B VIII. EXPERIENCE STATEMENT Describe in detail the duration and extent of your experience .with special emphasis upon experience directly, related to development and/or management of the type of operation proposed for this project. Also describe, in detail, the pertinent experience of. the persons who will be directly involved in operation and/or management of the operation proposed for this project. ATTACHMENT B 7 IX. REFERENCES List at least four persons or f’L~ns with whom you have conducted business t~ansactions during the past th~cc yea~s. At least two references named should have knowledge of your ability to finance the proposed project and your debt payment history. At least two references should have knowledge of your abilities to operate the proposed facility. REFERENCE NO. 1 Name: Firm: Title: Address: Telephone: Nature and magnitude of purchase, sale, loan, business association, etc.: Zip REFERENCE NO. 2 Name: Firm: Title: Address: Telephone: Nature and magnitude of purchase, sale, loan, business association, etc. Zip. A’FI’ACHMENT B IX. REFERENCES List at least four persons or fn-ms with whom you have conducted business t~ansactions during the past three yea~s. At least two references named should have knowledge of your ability to finance the proposed project and your debt payment history: At least two references should have knowledge of your abilities to operate the proposed facility. REFERENCE NO. 3 Name: Firm: Title: Address: Telephone: Nature and magnitude of purchase, sale, loan, business association, etc.: Zip REFERENCE NO. 4 Name: Firm: Title: Address: Telephone: Nature and magnitude of purchase, sale, loan, business association, etc. Zip. ATTACHMENT B X. METHOD OF OPERATION Describe your specific plan for development and/or operation of the proposed facility. A’I’rACHMENT B 10 XI. FINANCIAL INFORMATION Ao ESTIMATED CONSTRUCTION COSTS - 1.Land Related Direct Construction Costs: a.Land Preparation; including off-sites, grading, etc. b.Landscaping 2.Building Related Direct Construction Costs: a.Shell Construction b.Interior Finishes c.Fixtures & Other Improvements 3.Indirect Costs: a.Architect & Engineering b.Legal, Appraisal & Accounting: c.Construction Loan Costs*: i. points ii. interest d.Other *Assumes construction loan of $ for Sub-Total Sub-Total Sub-Total Total Estimated Construction Costs with interest estimated @ % - months construction period. Source of construction loan payments will be: Bo PRO-FORMA ANALYSIS - On the attached page provide a five-year pro-forma analysis of income and expenses for the proposed project. ATTACHMENT B XII. OTHER INFORMATION Please provide any other information which you feel will be helpful in evaluating your ability to successfully develop and/or operate the proposed facility in compliance with the City’s Request for Proposals. ROTHQUEST6 ATTACHMENT B 13 ATTACHMENT C OPTION TO LEASE (includes Exhibit I - Lease Exhibit II,- Secretary of Interior, s Standards for Rehabilitation) ATTACHMENT C Project Roth Building 300 Homer Avenue OPTION AGREEMENT This Agreement is made this .day of, 200_, by and between the City of Palo Alto, a California municiPal corporation ("CITY"), and ., a California non-pr0fit corporation ("OPTIONEE"). RECITALS Ao C~TY owns property located at 300 Homer Avenue, in the City of Palo Alto, Santa Clara County, commonly referred to as the Roth Building (the "PROPERTY"), more specifically described and shown in Exhibit B to the Lease attached hereto as Exhibit I (the "Lease"), which Lease is made a part hereof by this reference. B °CITY, in compliance with its. Policy and Procedures i-ii, issued a request for proposals for an option to lease the PROPERTY and received a proposal from OPTIONEE which was selected bY the City Council. C °OPTIONEE desires to obtain an exclusive option to lease the PROPERTY, in accordance with the terms and conditions of this Agreement and the Lease, for the purpose of (use of property) "Project"). D°CITY desires to grant an exclusive option to OPTIONEE to lease the PROPERTY, during which time OPTIONEE shall develop specific plans, obtain financing, and satisfy other conditions set forth herein prior to exercising the option and leasing and developing PROPERTY under the Project, in accordance with this Agreement and the Lease. NOW; THEREFORE, in consideration of the premises set forth above, the parties hereto mutually agree as follows: i.GRANT OF OPTION CITY hereby grants to OPTIONEE an exclusive option to lease the PROPERTY for the purposes of developing and operating the PROPERTY for the Project, subject to the terms, covenants and conditions set forth below and in the Lease. 2.TERM OF OPTION The term of the option granted hereunder shall be twenty-four (24) months and shall commence upon-execution of this Agreement by the Mayor of CITY. 3.PURCHASE PRICE OF OPTION The purchase price of the option under this Agreement shall be Dollars ($ ), due and payable .to CITY upon the execution of this Agreement by OPTIONEE. CITY shall retain ~the Dollars ($ ) purchase" price even if OPTIONEE does not ultimately exercise the option to lease in accordance with the terms of this Agreement. 4.CONDITIONS PRECEDENT The option to lease the PROPERTY under this Agreement may not be exercised’by OPTIONEE unless and until each and every following condition has been satisfied: A. -Purchase Price of Option OPTIONEE shall have paid thepurchase price of theoption as required under Clause 3 hereof. B. Schematic Plans Submittal OPTIONEE shall have submitted the schematic plans to CITY for the Project (the"Schematic Plans") within six (6)months of the commencement of this Agreement. .The Schematic Plans shall include a site layout of all buildings, landscape developments, schematic floor plans for all structures, simple elevations of all structures, identification .of the methods and measures for preservation of historic features of the site in accordance with the Secretary of Interior’s Standards for Rehabilitation for Historic Buildings attached to this Agreement as Exhibit. II and incorporated herein by this reference, a plan for fulfilling parking requirements, a detailed, description of all proposed improvements or modifications (including proposed uses and methods of operation and a general outline..specification which identifies proposed construction material and methods), and an estimate of the total construction cost for all proposed improvements under the Project. Even if the development of PROPERTY is intended to be performed in phases, the Schematic Plans shall include all planned phases of the PROPERTY’s development. RELEASES. 7/OLWMS 2 C. Development Plans Approvals 0PTIONEE shall have submitted to, and shall have received approval of, the development plans for the PROPERTY ("the Development Plans") from CITY’s Historic Resources Board, Architectural Review ~Board,Planning & Transportatin Commission and City Council.The Development Plans shall include the Schematic Plans,interior plans,, structural plans, exterior elevations, and interior elevations and shall indicate specific plans and details of the interior and exterior historic preservation and maintenance features to be included in developing thePROPERTY. As much as possible, and as directed by the City CounciI, the Development Plans shall be in accordance with the standards included in Exhibit II hereof. If the development of the PROPERTY is intended to be performed in phases, the Development Plans shall include and describe all the phases of the PROPERTY’s development. Phase I shall at least include the improvements necessary to make the PROPERTY usable for the required services and uses under the Lease. D.Construction Drawings Approval OPTIONEE shall have obtained approval of the construction drawings for the Project (the "Construction Drawings") from the City ~Engineer and the Chief Building-Official.The Construction Drawings shall include: i.Complete architectural, and engineering drawings; ii. Complete construction specifications; iii. Complete construction contractform; and iv. Proposed construction schedule. working Should the development of the PROPERTY be performed in phases, OPTIONEE need only obtain approval of the Construction Drawings.for Phase I of the Project to exercise the option to lease the PROPERTY. E.Long Term Maintenance Plan OPTIONEE shall have submitted to and received approval of a long term maintenance plan and schedule for the building on the PROPERTY from the City Manager or his designee. F. Land Use Designation OPTIONEE shall have received approval from the City Council RELEASES. 7 / OLWMS for any necessary change in land use zoning for the PROPERTY, any necessary change in CITY’s Comprehensive Plan designation and any other land use permit or approval required, if necessary, for the PROPERTY for implementation of the Project and the Development Plans as approved by CITY. G.Subdivision Map Act Compliance OPTIONEE shall have complied with the conditions of the State Subdivision Map Act (Government Code Section 66410 et seq.) and Title 21 of the Palo Alto Municipal Code, as amended, to the extent applicable to the PROPERTY and the Project. H.CEQA Compliance OPTIONEE shall have complied with th~ California Environmental Quality~ Act ("CEQA"), as amended, and all related CITY proceduresfor implementing CEQA, to allow the Project to be implemented. I.Permits OPTIONEE shall have provided to the Real Property Manager evi.dence that.any and all permits and approvals from any and all agencies having pre-construction .jurisdiction over /the Project, including but not limited to building permits, grading permits, street opening permits and health permits, have been authorized and are available.Should development of the PROPERTY be performed in phases,the requirement of this subparagraph (I) shall apply only to Phase I improvements. J.Certification to Chief Building Official. OPTIONEE shall have submitted to the Chief Building Official certification that the plans for any proposed~ building construction comply, in all respects~ with current building codes, the federal Americans with Disabilities Act of 1990, as amended, including any implementing regulations, and energy conservation requirements as set forth in the California Code of Regulations, Title 24, for non-residential construction. Should the development of the PROPERTY be performed in phases, the requirement of this subparagraph (J) shall apply only to Phase I improvements. .K. Sufficient Funds. OPTIONEE shall have satisfied the Director of Administrative Services that OPTIONEE has sufficient finances or.financial RELEASES. 7 / OLWMS commitments to implement.the Project as approved by CITY. Should the development of the PROPERTY be performed in phases, the requirement of this subparagraph (K) shall apply only to Phase I improvements. L. Sufficient Security to Complete Project OPTIONEE, in accordance with Clause XIV (TENANT’S ASSURANCE OF CONSTRUCTION COMPLETION) of the Lease~ shall have furnished to the Director of Administrative Services satisfactory evidence that assures CITY that sufficient financial security will be available to construct the Project, as set forth in the approved Development Plans and Construction Drawings. Should the development of the PROPERTY be performed in phases, the requirement of this subparagraph (L) shall apply only to Phase I improvements. M. SECURITY DEPOSIT OPTIONEE shall have submitted to the Real Property Manager a security deposit in accordance with Clause XI (SECURITY DEPOSIT) of the attached Lease. Notwithstanding the foregoing, OPTIONEE shall be entitled to apply the Five Thousand Dollars ($5,000.00) purchase price of the option under this Agreement toward the required security deposit under, the Lease. 5.EXERCISE ’OF OPTION .If at any time during the option term under this Agreement OPTIONEE has satisfied each and every condition precedent set forth in Clause 4 hereof to the satisfaction of CITY, OPTIONEE may exercise the option to lease PROPERTY by giving the Real Property Manager written notice of OPTIONEE’s election to do so, accompanied by two (2) properly executed copies of the Lease substantially in the form of Exhibit I hereof. CITY shall execute the Lease within one (i) month of receipt of OPTIONEE’s request to exercise the option in accordance with this Clause. GENERAL CONDITIONS Review by City OPTIONEE hereby acknowledges that one of the purposes of this Agreement is to afford OPTIONEE and CITY theopportunity to determine whether or not OPTIONEE is able to meet the various conditions and obtain the required approvals as set forth in this Agreement to implement the Project. Several of those RELEASES. 7/OLWMS conditions involve obtaining review and approval from officers, employees or agents of CITY. Each of those reviews shall be conducted in an independent manner and nothing contained herein shall be deemed to limit the jurisdiction or authority other- wise possessed by said officers, employees or agents in the conduct of such review. Nothing contained in this Agreement shall be deemed to imply that said approvals will be forthcoming, andthe failure to issue any such approval or ¯ permit by any officer, employee or agent of CITY shall not be deemed in any manner a breach of this Agreement, nor shall any such denial give raise to any claim, liability, obligation~ or cause of action with respect to this Agreement or the Lease. B.Other Governmental Approvals CITY agrees to consent to any lawful and complete application by OPTIONEE with respect to any permits or approvals.related to activities or improvements approved by CITY in accordance with thisAgreement which may be required by any governmental or other regulatory agencies aside from CITY. C.Assignment Prohibited This option has been awarded based on the unique background and proposal of OPTIONEE. Therefore, this option cannot be sold, assigned or otherwise transferred Without the prior written consent of CITY. Failure to obtain CITY’s required written consent shall render said sale, assignment or transfer void. D.Extension of Option Upon written request of OPTIONEE stating the reasons therefore, the City Manager or designee may, at his/her sole discretion, extend the term of the option under this Agreement as folIows: The City Manager or designee may grant an extension of the term of this option for a reasonable period of time, as determined by the City Manager or designee, in the event OPTIONEE is delayed in fulfilling, the conditions precedent to the exercise of the option by reason of any cause not the fault of, or within the control of, OPTIONEE or its agents or employees; or ii.The City Manager or designee may grant an extension of the term of the option for a_period not to exceed ninety (90) days, in the event OPTIONEE is delayed in fulfilling the conditions precedent to the exercise of this option for any other reason. However, the City Manager or designee may grant such extension only upon the following RELEASES. 7 / OLWMS 6 mo F o conditions: ao Written request for such. extension shall have been delivered by OPTIONEE to the Real Property Manager at least fifteen (15) days prior to the expiration of the option term under this Agreement; Payment in an amount equal to Two Thousand Dollars ($2,000) shall be submitted to CITY with the request for extension referred to above; in the event the extension is denied, CITY shall r.efund said amount to OPTIONEE; and C ¯OPTIONEE shall submit, together with its request for extension, evidence of its progress toward fulfilling the conditions precedent to the exercise of the option, documentation of its proposed actions and the feasibility of"satisfying said conditions within the term of the extension requested and such other information and material as may be required by the City Manager or her designee. Termination of Option Subject toClause 6(D) hereof, failure of OPTIONEE to meet the terms and conditions of this Agreement fully and satisfactorily within the time limits stated under Clause 2 hereof shall absolutely and conclusively terminate OPTIONEE’s rights hereunder. Upon termination hereof without exercise of the option by OPTIONEE, OPTIONEE shall, within five (5) business days of receipt of request from the Real Property Manager, deliver to CITY a properly executed quitclaim deed, quitclaiming to CITY any and all interest of OPTIONEE in and to the PROPERTY. Execution of the Lease by CITY and OPTIONEE substantially in the form of Exhibit I hereof shall also constitute a termination of this Agreement.. OPTIONEE’s Right. to Enter Obligation During Option Term and Related Indemnification CITY hereby grants to OPTIONEE, its officers, agents and employees, during the term of this Agreement or any extension thereof, the right to enter the PROPERTY or any portion thereof at reasonable times for the purposes of conducting, at OPTIONEE’s own cost and expense, such s0il, geologic, and engineering investigations as may be required in connection with the Project. OPTIONEE hereby agrees to protect, indemnify, defend and hold CITY, its officers, agents and employees, free and harmless from and against any loss, damages RELEASES. 7/OLWMS or liability CITY may incur in connection with, as a result of, or by reason of any such investigation. Should the option or this Agreement be terminated without execution of the Lease, OPTIONEE agrees to repair any and all damage caused to the PROPERTYby reason of any such investigation performed. G.Insurance Coverage During Option Term OPTIONEEshall, at its sole cost and.expense, obtain commercial general liability insurance coverage in the form and amounts as required and set forth in Clauses XX and XXI (INSURANCE) of the Lease prior to any investigation on the PROPERTY by OPTIONEE, its agents, employees or assigns. Notices’ Any notice, tender, or delivery to be given in accordance with this Agreement by either party to the other shall be given in accordance with Clause XXIV (NOTICES) of the Lease. I.OPTIONEE’s Representations and Warranties OPTIONEE represen-ts and warrants to CITY that it has not employed any real estate broker or finder in connection with this Agreement and hereby agrees to hold CITY harmless and free from any liability in connection with any commission or finder’s fee alleged to be incurred. J.Entire Agreement This instrument contains the entire agreement between the parties relating to the option granted under this Agreement. Any oral representations or modifications concerning this instrument shall be of no force and effect, except in a subsequent modification which is made in writing and signed by both parties. K.Recovery of Attorneys’ Fees Do In the event of any controversy, claim or. dispute between the parties hereto, arising out of or relating to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from the losing party reasonable expenses, including attorneys’ fees, and other legal costs. Binding on Successors This. Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors and RELEASES ~ 7 / OLWMS 8 assigns of the parties hereto, exceptas may be provided elsewhere in this Agreement. expressly IN WITNESS WHEREOF,: the parties hereto have executed this Preliminary Agreement on the day and year first above written. CITY: CITY oF PALO ALTO OPTIONEE: By:By: Mayor ; Its: ATTEST: By: City Clerk By: Its: APPROVED AS TO FORM: By: Asst. City Attorney RECOMMENDED FOR APPROVAL: By: Asst. City Manager RELEASES. 7 / OLWMS 9 By: Director, Planning and Community Environment By: Manager, Real Property Attachments:Exhibit I: Lease Exhibit II: Secretary of the Interior’s Standards ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) SS. COUNTY OF SANTA CLARA ) On ,1996, before me, personally appeared ( NOTARY ) S I G~R ( S ) personally known to me -or- __proved to me on the basis of satisfactory evidence to be the person(s) whose name is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon.behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. NOTARY’ S SIGNATURE EXHIBIT I Project: ROTH.BUILDING LEASE # This Lease is made this day of , 1_9__, by and between the City of Palo Alto, a California municipal corporation ¯ ("CITY"), and the , a California non-profit corporation ("TENANT"). RECITALS In April 2000, CITY purchased the real property and improvements located at 300 Homer Avenue, Palo Alto, California, commonly referred to as the ~Roth Building] and more specifically described and more specificallydescribed and shown in Exhibit "B" to this Lease, which, is attached hereto and incorporated herein by this reference (the "PREMISES"). o On , 2003, CITY entered into an Option Agreement with TENANT, on file with the City Clerk as City Contract No. (the "Option Agreement"). Under the Option Agreement, TENANT agreed to secure all necessary CITY approvals and permits in order to exercise the option granted under the Agreement to lease the PREMISES (the "Option"), construct improvements and operate the PREMISES as described in Exhibit "C" to this Lease which is attached hereto and incorporated herein by this reference (the "Project"). TENANT has satisfied all the. conditions set forth in the Option Agreement, and now desires to exercise the Option.and lease thePREMISES from CITY for the Project.- CITY desires to lease the PREMISES to TENANT for the Project, in accordance with the terms and condftions set forth below. Now,. therefore, in consideration of these covenants,, terms and conditions, the parties hereto mutually agree asfollows: I. PURPOSE The purpose of this Lease is to allow TENANT to perform the Project as described in Exhibit C, by developing and operating a RELEASES. 8/LZWMS RE"g: 4-10-96 on the PREMISES according to the terms and conditions of this Lease. II. PREMISES Subject to the terms and conditions set forth in this Lease, CITY hereby leases the PREMISES to TENANT. TENANT hereby leases the PREMISES from CITY for the purpose of implementing the Project and agrees to comply with the requirements set forth under C~ause III (REQUIRED AND OPTIONAL SERVICES AND USES) of this Lease. III. REQUIRED AND OPTIONAL SERVICES AND USES In furtheranceof the purpose stated above, and as set forth in Exhibit C, the following required and optional services and uses shall be provided, permitted or prohibited on the PREMISES including any additions or modifications to the Premises approved by CITY. Ao Required Services and Uses. Throughout the term of this Lease TENANT shall provide the following services, activities and uses on the PREMISES: Bo ° Restrooms must be available to the public using the adjacent City park (seven day~ per week from the hours of a.m. to p.m.) Perm±tted Services and Uses. In addition to the required services, activities and uses set forth above, the following uses shall also be permitted, but only as incidental to the required services, activities and uses: C °Optional Services and.Uses. Subject to the prior written approval of the City Manager, TENANT may also use the PREMISES to provide additional services and uses which are ancillary to and compatible with the required services, activities and uses stated above and not in conflict with the required uses. Approval of optional uses shall be within the sole discretion of the City Manager. RELEASES. 8/LZWMS REV: 4-10-96 2 Prohibited Uses. The above listed required, permitted and optional services, activities and uses shall be the only services, activities and uses permitted upon or from the PREMISES. IV. TERM The term of this Lease shall be Thirty (30) years, commencing on the first day of the month following the date of execution of the Lease by the Mayor of CITY. V.CONSIDERATION/RENT Ao Rent. As partial consideration for the lease of the PREMISES, TENANT agrees to pay to CITY Dollars ($__) per year in accordance with Clause VIII (RENT PAYMENT PROCEDURE) hereof. B°Non-Monetary Consideration. In addition to the rent set forth in subparagraph A above, TENANT agrees to perform the following services or provide the following public benefits on behalf of CITY: VI REVISION OF RENTALS The rental specified in Clause VI (CONSIDERATION/RENT) shall be subject to automatic annual adjustments in proportion to changes in the Consumer Price Index, All Urban Consumers, (base years 1982- 1984 = i00) for San Francisco-Oakland-San Jose CSMA published by the U.S. Department of Labor, Bureau of Labor Statistics or any replacement index published by said Bureau (INDEX). The automatic adjustment shall be effective on each anniversary of the commencement date of the term of this License and shall be calculated in accordance with the following formula: Where: X : A (B/C) Adjusted rental. Rental at the Commencement of the License. INDEX for the second calendar month prior to the month in which that rental rate adjustment is to become effective (or, if the INDEX is not published for that month, the INDEX for the third calendar month prior to the month in which the rental rate adjustment is to become effective) Monthly index for the second calendar month prior to the date of this License (or, if the INDEX was not published for that month, the INDEX for the third calendar month prior to the date of this License). RELEASES. 8/LZWMS REV: 4-10-96 3 VII. CHARGE FOR UNAUTHORIZED SERVICES AND USES TENANT shall pay CITY a sum equal to one hundred percent (100%) of the gross receipts for any service or use that is not permitted or authorized by Clause III (REQUIRED AND OPTIONAL SERVICES AND USES) hereof. The existence of such charge or the payment or receipt of money under this clause, does not constitute an authorization of a particular service or use and does not constitute a waiver of CITY’s right to .terminate such service or use. VIII.NON-PROFIT COMMUNITY ORGANIZATION BYLAWS & MEMBERSHIP Changes in restrictions, rules, articles of incorporation or bylaws Of TENANT which change or modify the essential character or membership requirements of TENANT shall, prior tobeing put into effect, be reviewed and approved by the CityManager and the City Attorney. TENANT’s rules, articles of incorporation and bylaws, and any amendments thereto, shall be on file with the Real Property Manager throughout the .term of this Lease. IX.RENT PAYMENT PROCEDURE Ao Bo C ° Payment of Rent. On or before each anniversary date of the term of this Lease, TENANT shall pay to CITY the rent as set forth in Clause V (CONSIDERATION/RENT) hereof. Commencement of Obligation. TENANT’s obligation to pay the rent shall commence upon the commencement of this Lease. Place of Payment. Rental payments shall be delivered to the Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by CITY upon ten (i0) days’ written notice to TENANT. Rental payments may be made by check made payable to the City of Palo Alto. TENANT assumes all risk of loss if payments are made by mail. X. CHARGE FOR LATE PAYMENT If any payment of rent as specified in Clause VI (CONSIDERATION/RENT) or of any other sum due CITY is not received by CITY, a late charge equal to two percent (2%) of the payment due and unpaid plus an administrative fee of $ 45.00-shall be added to the payment, and the total sum shall become immediately due and payable to CITY. Acceptance of late charges and/or any portion of the overdue RELEASES. 8/LZWMS REV: 4-10-96 payment by CITY shall in no event constitute a waiver of LICENSEE’S default with respect to such overdue paymen’t, nor prevent CITY from exercising any of the other rights and remedies granted hereunder or by any provision of law. XI.SECURITYDEPOSIT A security deposit in. the sum of Ten Thousand Dollars ($i0,000) shall have been provided to CITY by TENANT prior to the execution of this Lease by the Mayor of CITY.. CITY shall retain the security deposit throughout the term of this Lease. The security deposit shall have taken one of the forms set out below. Notwithstanding the foregoing, TENANT may apply the Thousand Dollars ($. .00) purchase price of the Option to the required security deposit under this Clause XI. A.Cash. The assignment to CITY of a savings deposit held in a financial institution in Santa Clara or San Mateo County acceptable to CITY. At a minimum, such assignment shall be evidenced by the delivery to CITY of the original passbook reflecting the savings deposit and a written assignment of the deposit to CITY in a form approved by the City Attorney and the Real Property Manager. A Time Certificate of Deposit from a financial institution in Santa Clara or San Mateo County wherein the principal sum is made payable to CITY or order. Both the financial institution and the form of the certificate must be .approved bythe City Attorney and the Real Property Manager. Do A Letter of Credit or other instrument of credit from a financial institution] subject to regulation by the state or federal government, pledging that funds necessary to secure performance of the Lease terms, covenants, and conditions, are on deposit and guaranteed for payment, and agreeing that said funds shall be trust funds securing TENANT’s performance and that all or any part shall be paid to CITY on order upon demand by CITY. Both the financial institution(s) and the form of the instrument(s) must be approved by the City Attorney and the Real Property Manager. Regardless of the form in which TENANT elects to make said security deposit, all or any portion of the principal sum shall be available unconditionally to CITY for correcting any default or breach of this Lease incurred by CITY as a result of the failure by TENANT, its successors or assigns, to faithfully perform all of the terms, covenants, and conditions of this Lease. Should TENANT elect to RELEASES. 8/LZWMS REV: 4.-10-96 5 provide a Time Certificate of Deposit, Letter of Credit, or other instrument of credit, hereinafter collectively referred to as "INSTRUMENT", to fulfill the security, deposit requirements of this Lease, the INSTRUMENT shall contain a provision whereby the institution issuing the I~STRUMENT agrees to provide CITY with written notice of its intent not to renew the INSTRUMENT at least thirty (30) days prior to expiration or termination- of the INSTRUMENT. If TENANT has not provided CITY with an acceptable alternate form of security, deposit at least ten (i0) days prior to expiration or termination of the INSTRUMENT, CITY may demand and obtain from the institution issuing the INSTRUMENT, the amount secured by the INSTRUMENT as satisfaction of the security deposit provision of this Lease. Should ’TENANT elect to assign the savings deposit to CITY, or provide an alternate INSTRUMENT, to ful.fill.the security deposit requirements of this Lease,. the assignment, or issuance of the INSTRUMENT shall have the effect of releasing the depositor or creditor therein from liability on account of the payment of any or all of the principal sum to CITY or order upon demand of CITY. The agreement entered into by TENANT with a financial institution to establish the deposit necessary to permit assignment or issuance of a certificate as provided above, may allow the payment of interest accruing on account of the deposit to TENANT, or order. TENANT shall maintain-the required security deposit throughout the Lease term. Failure to do so shall be deemed a default and may be grounds for immediate termination of this Lease. The security deposit shall be rebated, reassigned, released, or endorsed to TENANT on order, as applicable, at the end of the Lease term, provided TENANT has fully and faithfully performed each and every term, covenant, and condition of this Lease. On each five-year anniversary date of the commencement of this Lease, the amount of the security deposit set forth above shall be adjusted according to the following formula: R = SD[ (B + 0.85(A - B)/B] Where: R =Revised security deposit. SD =Initial security deposit. A =Average monthly index for the 12 calendar months ending with and including the. index published just prior to the month in which each security deposit adjustment is to become effective. B = Average monthly index for the 12 calendar months ending with and including the index RELEASES. 8/LZWMS REV: 4-10-96 6 published just prior to commencement of this Lease. In no event shall the amount of the revised security deposit be less than the initial security deposit. The difference between the initial security deposit and the revised security deposit shall be due and payable to CITY within ten (I0) days of receipt of a notice of revision of the security deposit from the Real Property Manager. XII.INITIAL CONSTRUCTION BY TENANT Ao Bo Minimum Construction and Timing. Commencing upon the execution of this Lease, TENANT shall in an efficient and workmanlike manner improve the PREMISES, at no cost to CITY, to’ adequately accommodate those servlces, activities and uses required by the Project under Clause III (REQUIRED AND OPTIONAL SERVICES AND USES) and Exhibit C hereof. The development plans prepared by TENANT and approved by CITY during the Option period under the Option Agreement, preceding execution of this Lease, shall be a master plan for development of the PREMISES, and the construction drawings prepared by TENANT and approved by the City Engineer and the Chief Building Official during the same period shall provide the plans, specifications, and time schedule for constructing such improvements. The approved development plans and construction drawings are attached hereto as Exhibit "D" and incorporated herein by this reference. Development Plans and Construction Drawings. All design and construction of .the improvements shall conform to the construction and architectural standards contained in Exhibit D and shall meet all other requirements contained in this Lease. Co Minimum Cost of Improvements. The minimum value of TENANT’s improvements to the PREMISES shall be Four Million Dollars ($4;000,000). Do mo Asbestos and Lead Paint. The CITY is aware of lead paint and asbestos laden materials in the building on the PREMISES. TENANT shall be solely responsible for any lead and asbestos abatement or containment on the PREMISES to the extent required under all applicable federal, state and local building and safety codes and regulations, and shall fully comply with any applicable asbestos notification requirements under California Health and Safety Code section 25915 et seq., as amended. Compliance with ADA. All construction or improvement of the PREMISES shall comply .with the federal Americans with RELEASES. 8/LZWMS REV: 4-10-96 mo Xlll. Bo C o Disabilities Act of 1990, as amended, including the Act’s implementing regulations, as amended. Certificate of Inspection. Upon completion of construction of any substantial improvement to the PREMISES, TENANT shall submit to the Real Property Manager a Certificate of Inspection, verifying that the construction was completed in. conformance with Title 24 of the California Code of Regulations for non-residential construction. ADDITIONAL CONSTRUCTION AND/OR ALTERATION BY TENANT CITY’s Consent. No additional structures, improvements, or facilities shall-be constructed, erected, altered~ or made within the PREMISES without the prior written consent of the City Council if required by CITY procedures or ordinances, or otherwise by the City Manager. Strict Compliance with Development Plans and Construction Drawings. Any additional improvements constructed by TENANT within the PREMISES shall be constructed in an efficient and workmanlike manner and in strict compliance with detailed plans and specifications approved by the City Council if required ~by City of Palo Alto procedures or ordinances or otherwise by the City Manager, or designee, and.applicable City of Palo Alto codes and ordinances. Certificate of Inspection. Upon completion of construction of any substantial improvement to the PREMISES, TENANT shall submit to the Real Property Manager a Certificate of Inspection, verifying that the construction was completed in conformance with Title 24 of the California Code of Regulations for non-residential construction. XIV. TENANT’S ASSURANCE OF CONSTRUCTION COMPLETION Prior to commencement of this Lease and improvement of the PREMISES, or any phase thereof, TENANT shall furnish the Real Property Manager with satisfactory evidence that assures CITY that sufficient funds will be available to complete the approved construction. The amount of such assurance shall be at least the total estimated construction cost that was submitted to and approved by CITY in accordance with the Option Agreement. Evidence of such assurance shall take one of the forms set out below and shall guarantee TENANT’s full and faithful performance of all of the .terms, covenants, and conditions of this Lease: A. Completion Bond naming CITY as beneficiary; RELEASES. 8/LZWMS REV: 4-10-96 8 Bo C o Performance and payment bonds, supplied by TENANT’s contractor or contractors, provided the bonds are £ssued with both TENANT and CITY named as beneficiaries; Irrevocable letter of credit from a financial institution naming CITY.as beneficiary; or 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. All bonds and letters of credit shall also be in a form acceptable to the Director of Administrative Services and City Attorney, and shall insure faithful and full observance and performance by TENANT of all of the terms, conditions, covenants, and agreements relating to the construction of improvements in accordance with the development plans ahd construction plans approved by CITY as set forth in this Lease. XV.DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS Inthe event of damage to or destruction of TENANT-constructed or TENANT-improved buildings,, facilities, or improvements located within the PREMISES, or in the event TENANT-constructed or TENANT- improved buildings, facilities, or improvements’located within the PREMISES are declared unsafe or unfit for use or occupancy by a public entity withthe authority to make and enforce such declaration, TENANT shall; within thirty (30) days, commence and diligently pursue to ,completion the repair,, replacement, or reconstruction of improvements necessary to permit full use and occupancy of the PREMISES for the purposes required by this Lease. Repair, replacement~ or reconstruction of improvements within the PREMISES shall be accomplished in a manner and according to plans approved by the City Engineer, the Chief Building Official and the Real Property Manager. Except as otherwise provided herein, termination of this Lease shall not reduce or nullify TENANT’s obligation under this paragraph. Notwithstanding the foregoing, should the TENANT-constructed or TENANT-improved improvements on-the PREMISES be more than seventy- five percent (75%) destroyed or damaged by an insured loss during the last five (5) years of the term of this Lease, TENANT shall have the option of rebuilding or repairing such damage or terminating this Lease. TENANT. shall notify the Real Property kManager in writing of its-decision within ten (i0) days of the occurrence of such damage or destruction. In the event that TENANT elects to terminate this Lease and not rebuild or repair such damage, TENANT shall demolish any remaining structures or portions of structures not desired by CITY and cleanup any and all debris and shall pay to CITY a pro-rata portion of the proceeds of insurance, required in accordance with Clause XX (INSURANCE) hereof. The pro-rata porti.on shall be based on the following formula: RELEASES. 8/LZWMS REV: 4-10-96 L = P (R/T) L =CITY’s portion of insurance proceeds. P =Total .insurance proceeds paid exclusive of demolition and debris removal expenses. R = Remaining term of the Lease. T = The total Lease term, including any extensions made in accordance with this Lease, TENANT’s liability for demolition and cleanup shall be limited to insured losses including any deductible amount. XVI. AS BUILT PLANS Upon completion of all the improvements on the PREMISES, TENANT shall ~rovide the Real Property Manager with a complete set of reproducible "as built plans" reflecting the actual Construction within or upon the PREMISES. TENANT shall also provide the Real Property Manager with a statement signed by TENANT underpenalty of perjury certified as to accuracy and of actual construction costs for all such improvements. XVII. 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 TENANT upon the PREMISES shall remain in TENANT,. and replacements, substitutions and modifications thereof may be made by TENANT throughout the term of this Lease. TENANT may remove such fixtures and furnishings upon termination of this Lease if TENANT is not then in default under this Lease, provided that TENANT 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. XVIII. MAINTENANCE AND REPAIR TENANT, at its sole expense, shall perform all regular and extraordinary maintenance and repairs to the PREMISES, including all painting necessary to k~ep the PREMISES and all improvements thereto in first-class order, repair and condition as contemplated under the approved development plans and construction drawings for the Project, throughout the term of this Lease. For purposes of continued historic preservation of the PREMISES, TENANT shall RELEASES. 8/LZWMS RE"/: 4-10-96 1 0 comply with the maintenance plan and schedule described in Exhibit "E" attached hereto and incorporated herein by this reference. In addition, TENANT shall maintain, at its sole expense, all equipment, furnishings and trade ~fixtures upon the PREMISES required for the maintenance and operation of the Project. TENANT waives the right to make repairs at the expense of CITY and the ¯ benefit of .the provisions of Sections 1941 and 1942 of the Civil Code of California, as amended, relating thereto; and further agrees that if and when any repairs, alterations,¯ additions or betterments shall be made by it as required by this paragraph, it 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. Should TENANTfail to make any repairs or perform any maintenance work for which it is liable, CITY shall have the option to make the repairs and TENANT, within ten (i0) days of receipt of a bill therefor from the Real Property Manager, 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 TENANT to make repairs or perform maintenance as provided in this Clause. XIX. UTILITIES TENANT shall be solely responsible for and shall pay, prior to delinquency, all charges for utilities supplied to the PREMISES during the term of this Lease. XX. INSURANCE TENANT, at its sole expense, shall maintain insurance acceptable to~ CITY in full force and effect throughout theterm of this Lease. The policy or policies of insurance maintained by TENANT shall provide the following minimum limits and coverages: POLICY. A.WORKERS’ COMPENSATION Bo MINIMUM LIMITS OF LIABILITY Statutory COMPREHENSIVE Bodily Injury $i,000,000 ea. person AUTOMOBILE $i,000,000 ea. occurrence LIABILITY,Property Damage $i,000,000 ea. occurrence including owned, hired, and non-owned automobiles. RELEASES. 8/LZWMS REV: 4-10-96 Ii COMMERCIAL GENERAL LIABILITY, including products and Bodily Injury $i,000,000 ea. person $i,000,000 ea. occurrence $i,000,000 aggregate Property Damage $i,000,000 ea. occurrence completed operations, broad form contractual, and personal injury. D.FIRE & EXTENDED COVERAGE. Not less than one hundred percent (100%) of the replacement’ cost of all insurable improvements within or upon the PREMISES. Such policies must include water damage and debris cleanup provisions. Additional fire and extended cover&ge must be obtained in accordance with this clause upon completion of construction or installation of any major insurable improvement under the Project. Such insurance shall.commence and continue to be in full force and effect throughout the term of this Lease. Such insurance shall be provided through carriers with a Best rating of A:X or higher that are admitted to do business in the State of California. Each insurance policy required by this Lease shall contain the following cla~ses: Ao "This insurance shall not be canceled, limited in scope of coverage or nonrenewed until after thirty (30) days written notice has been given to the: CITY OF PALO ALTO/Real Estate Division, PO Box 10250, Palo Alto, CA 94303." Bo C o D° "All rights of subrogation are hereby waived against the CITY OF PALO ALTO and the members of the City Council and elective or appointive officers or employees, when acting within the scope of their employment or. appointment." "The CITY OF PALO ALTO is named as a loss payee on the property insurance policy described above." "The CITY OF PALO ALTO is added as an additional insured as respects operations of the named insured at or from the premises leased from the CITY OF PALO.ALTO." m °"It is agreed that any insurance maintained by the CITY OF PALO ALTO will apply in excess of, and not contribute to, insurance provided by this policy." RELEASES. 8/LZWMS REV: 4-10-96 12 XXI. INSURANCE Bo C o Certificates/Policies of Insurance. TENANT agrees to deposit with the Real Property Manager, on or before the effective date of this Lease, certificates or policies 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 TENANT not provide evidence of such required coverage at least three (3~ days prior to the expiration of any existing insurance coverage, CITY may purchase such insurance, on behalf of and at the sole expense of TENANT, to. provide six (6) months of coverage. Review 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 Risk Manager, the insurance. provisions in this Lease do not provide adequ6te protection for CITY and for members of the public using the PREMISES, the Real Property Manager may require TENANT 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 which exists at the time a change in insurance is required. Changes in Coverage. The Real Property Manager shall notify TENANT in writing of changes in the insurance requirements. If TENANT 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 TENANT fails to maintain in effect any required insurance coverage, TENANT shall be in default under this Lease without-further notice to TENANT. Such failure shall constitute a material breach and shall be grounds for immediate termination of this Lease at the option of CITY. D°No Limit of Liability. The procuring of such. required policy or policies of insurance shall not be construed to limit TENANT’s liability hereunder nor to fulfillthe indemnification provision and requirements of this Lease. Notwithstanding the policy or policies of insurance, TENANT 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. XXII. ASSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED Since CITY has relied on the specific background and capabilities of ~TENANT in awarding this Lease, except as set forth under Clause III REL~SES. 8/LZ~S R~: 4-10-96 13 (REQUIRED AND OPTIONAL SERVICES AND USES) hereof, any mortgage, pledge, hypothecation, encumbrance, transfer, sublease, or assignment (collectively referred to as ENCUMBRANCE).of TENANT’s interest in the PREMISES, or any part or portion thereof, is prohibited. Any attempted ENCUMBRANCE shall be null and void and shall confer no .right, title, or interest in or to this Lease. If TENANT hereunder is a corporation or an unincorporated association or partnership, the ENCUMBRANCE of any stock or interest in the corporation, association, or partnership which, in the aggregate over any consecutive two-year period, exceeds twenty-five percent (25%) shall be deemed an assignment within the meaning of this clause. XXIII. DEFAULT IN TERMS OF THE LEASE BY TENANT Ao CITY’s Remedies on Default. Except as otherwise provided under this Lease, should TENANT default in the performance of any covenant, condition, or agreement contained in this Lease and such default is not corrected within sixty (60) days of receipt of a notice of default from CITY, CITY may: Terminate this Lease and all rights of TENANTand those who claim under TENANT, stemming from this Lease, shall end at the time of such termination; o At CITY’s sole option, cure any such default by performance of any act, including payment of money, and the cost thereof, plus all reasonable administrative costs, shall become immediately due and payable by TENANT to CITY; Seek an action or suit in equity -to enjoin any acts or things which may be unlawful or in violation of the rights of CITy; Seek a mandamus or other suit, action or proceeding at law or in equity to enforce its rights against TENANT, and to compel TENANT to perform and carry out its duties and obligations under the law and under TENANT’s covenants and agreements with CITY as provided herein; or Bo 5.Pursue any other remedy available by law or specifically provided in other clausesof this Lease. Cumulative Remedies. However, in the event of a default which can not reasonably be cured within sixty (60) days, TENANT shall have a reasonable period of time to cure the default. Each and all of the remedies given to CITY hereunder, or by any law now or hereafter enacted, are cumulative and the exercise of one right or remedy shall not impair the right of CITY to exercise any or all other remedies. In case any suit, action or RELEASES. 8/LZWMS REV: 4-10-96 1 4 Co proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, then, and in every such case, CITY and TENANT shall be restored, to its and their former position and rights and remedies as if no such suit, action or proceedings had been brought or taken. Insolvency of TENANT. In addition to a violation or breach of any other provision of this Lease, TENANT shall be considered to be in default under this Lease should TENANT: voluntarily file or have involuntarily filed against it any petition under any bankruptcy or .insolvency act-or law; 2.be adjudicated a bankrupt; or o attempt to make a general assignment for the benefit of creditors. XXIV. NOTICES All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder give by either party to the other, shall be in writing and. shall be sufficiently given and served upon the other party if (i) personally served, (2) sent by United States certified mail, postage, prepaid, (3) sent by express delivery service, or (4) in the case of a facsimile, if sent to the telephone number(s) set forth below during normal business hours of .the receiving party and followed within 48 hours by delivery of hard copy of the material sent by facsimile, in accordance with (i), (2) or " (3) above. Personal service shall include, Without limitation, service by .delivery service and Service by facsimile transmission. Delivery of notices properly addressed shall be deemed complete when the .notice is physically delivered to the Real Property Manager or to __(tenant’s designee)__, All notices pursuant to this lease shall be addressed as set forth be!ow or as either party may subsequently designate by written notice. TO: CITY TO:TENANT Real Property Manager City of Palo Alto P.O. Box 10250 ¯ 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (415) 329-2468 RELEASES. 8/LZWMS REV: 4-10-96 15 with a copy to: City Clerk, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (415) 329-2646 and City Attorney, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto CA 94303 FAX: (415) 329-2646 XXV. ATTACHMENTS TO LEASE This Lease includes the following exhibits, which are attached hereto and by this reference incorporated into this Lease: Exhibit A - General Conditions Exhibit B - Description of Leased Premises Exhibit C - Description of the Project Exhibit D - Development Plans and Construction Drawings Exhibit E- Long Term Maintenance Plan and Schedule for Premises The inclusion of clauses in Exhibit A (GENERAL CONDITIONS) is not in any way intended to lessen the importance of these clauses, but is merely done to enhance the-organization of various clauses and this Lease. IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written. CITY:TENANT: CITY OF PALO ALTO (LESSOR) By: By: Mayor Its: ATTEST:By: By: City Clerk Its: RELEASES. 8/LZWMS REV: 4-10-96 1 6 APPROVED AS TO FORM: By: Sr. Asst. City Attorney RECOMMENDED FOR APPROVAL: By: Asst. City Manager By: Director of Planning and Community Environment By: Director of Administrative Services RELEASES. 8/LZWMS REV: 4-10-96 17 ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss. COUNTY OF SANTA CLARA ) On , 1996, before me, personally appeared SIGNER(S) personally known to me -or-proved to me on the basis of satisfactory evidence to be the person(s) whose name is/are subscribed to the within instrumentand- acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. NOTARY’ S SIGNATURE RELEASES. 8/LZWMS REV: 4-10-96 1 8 EXHIBIT A i.DEFINITIONS GENERAL CONDITIONS CITY shall mean the City Council of the City of Palo Alto, a municipal corporation. The City Manager is hereby authorized to take any actions under this Lease on behalf of CITY except for termination of this Lease. Clauses in this Lease refer to specific officers or employees of CITY. Should these positions be eliminated or the title changes, it is understood and agreed that such references shall be considered to be to the new title for renamed positions or to the replacement .official designated with the responsibilities of any eliminated position. Any reference to a City officer or employee includes a reference to the officer’s or employee’s designated representative. 2.PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY If TENANT is a partnership, each general partner: Ao represents and warrants that the partnership is a duly qualified partnership authorized to do business in Santa Clara County; and B°shall be jointly and severally liable for performance of the terms and provisions of this Lease. If TENANT is a corporation, each individual signing this Lease on behalf of TENANT represents and warrants that; Ao B° he is duly authorized to do so in accordance with an adopted Resolution of TENANT’s Board of Directors or in accordance with the Bylaws of the corporation; and TENANT is a duly qualified corporation in the State of California. As used in this Lease, the .term "TENANT" shall include TENANT, its officers, agents, employe@s, sublessees, concessionaires, or licensees, or any person acting under contract with TENANT; however, the definition of TENANT used herein shall not be construed to authorize or permit any sublease or licenses not authorized or permitted elsewhere in this Lease. RELEASES ~ 8/LZWMS REV: 4-10-96 19 The of TENANT is hereby authorized to take any acZions under this Lease on behalf of TENANT except for termination of this Lease. 3.TIME Time is of the essence of this Lease. 4. SIGNS TENANT agrees not to construct, maintain, or allow any sign to be placed upon the PREMISES except as may be approved by CITY. Unapproged signs, banners or the like may be removed by CITY. 5. PERMITS AND LICENSES. TENANT shall be required to obtain any and all permits and/or licenses which may be required in connection with the operation of, and any approved TENANT construction upon, the PREMISES as set forth in this Lease. ~ 6.MECHANICS LIENS TENANT shall at all times indemnify and save CITY harmless from all claims for labor or materials supplied in connection ’with construction, repair, alteration, or installation of structures, improvements, equipment, or facilities within the PREMISES, and from the cost Of defending against such claims, including attorney’s fees. TENANT shall provide CITY with at least.ten~.(10) days written notice prior to commencement of any work which could give rise to a mechanics lien or stop notice. CITY reserves the rightto enter upon the PREMISES for the purposes of posting Notices of Non- Responsibility. In the event a lien is imposed upon the PREMISES as a result of such construction, repair, alteration, or installation, TENANT shall either: A.Record a valid Release of Lien; or Deposit sufficient cash .with CITY to cover the amount of the claim on the lien in question and authorize payment to the extent of said deposit to any subsequent judgment holder that RELEASES. 8/LZWMS REV: 4-10-96 2 0 may arise as a matter of public record from litigation with regard to the lienholder claim; or Procure and record a bond in accordance with Section 3143 of t~e Civil Code, as amended, which releases the PREMISES from the claim of the lien from any action brought to foreclose the lien. Should TENANT fail to accomplish one of the three optional actions within fifteen (15) days after the filing of such a lien, the Lease shall be in default and may be subject to immediate termination. 7 LEASE .ORGANIZATION AND RULES OF CONSTRUCTION. Womds of the masculine gender shall be deemed and construed to include’correlativewords of the feminine and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, includingpublic’ bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this agreement, refer to this agreement. All the terms and provisions hereof shall be construed to effectuate the purposes set forth herein, and to sustain the validity hereof. The titles and headings, of the sections of thisagreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall not in any way modify or restrict any of the terms of provisions hereof or be considered or given any effect in construing thisagreement or any provision hereof in ascertaining intent, if any question o.f intent shall arise. ¯ 8.AMENDMENTS This Lease sets forth all of the agreements ’and understandings of the parties and any modif±cations must be written and properly executed by both parties. The Option Agreement, entered into on 2003, by and between TENANT and CITY, is hereby superseded by this Lease. 9.UNLAWFUL USE TENANT agrees that no improvements shall be erected, placed upon, operated, nor ,maintained within the PREMISES, nor any activity conducted or carried on therein or therefrom, in violation of the RELEASES. 8/LZWMS REV: 4-10-96 21 terms of this Lease, or of any regulation, order of law, statute, or ordinance of a governmental agency having jurisdiction over TENANT’s use of the PREMISES. i0.NONDISCRIMINATION TENANT and its employees shall not discriminate against any person because of race, color, religion, ancestry, age, sex, national origin, disability or sexual preference. TENANT shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex, age, national origin, disability or sexual preference. TENANT covenants to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment. If TENANT is found in violation of the nondiscrimination Provision of the State of California Fair Employment Practices Act. or Similar pr0yisions of federal law or executive order in the conduct of its activities under this Lease by the State of California Fair Employment Practices Commission. or the equivalent federal agency or officer, it shall thereby-be-found in default under this Lease, and such default shall constitute a material breach of this Lease. CITY shall then have the power to cancel or suspend this Lease in whole or in part. ii.INSPECTION CITY’semployees and agents shall have the right at all reasonable times to inspect the PREMISES to determine if the provisions of this Lease are being complied with. 12.HOLD HARMLESS TENANT hereby waives all claims, liability and recourse against CITY including the right of contribution for loss or damage of or to persons or property arising from, growing out of. or in any way connected with or. related to this Lease. TENANT hereby agrees to protect, indemnify, hold harmless and defend CITY, its officers, agents, and employees against any and all claims, liability, demands, damages, cost, expenses or attorneys’ fees arising out of the operation or maintenance of, or. construction on, the PREMISES, or TENANT’s performance or nonperformance of the terms of this Lease. In the event CITY is named as co-defendant, TENANT shall notify CITY of such fact and shall represent CITY in such legal action unless CITY undertakes to represent itself as co-defendant in such legal action, in which event TENANT shall pay to CITY its ~litigation costs, expenses and attorneys’ fees. RELEASES. 8/LZWMS REV: 4-10-96 2 2 13.TAXES AND ASSESSMENTS This Lease may create a possessory interest which is subject to the payment of taxes .levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to the possessory interest tax) which become due and payable upon the PREMISES-or upon fixtures, equipment, or other property ins£alled or constructed thereon, shall be the full responsibility of TENANT and TENANT shall pay the taxes and assessments prior to delinquency. 14.SUCCESSORSIN INTEREST Unless otherwise provided in this Lease, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successbrs, executors, administrators, and assigns of all the parties hereto, all of whom shall be jointly and severally liablehereunder. 15.CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE) If either party hereto shall be .delayed or prevented from the performance of any act requiredhereunder by reason of acts’ of God, restrictive governmental laws orregulations, or other cause without fault and beyond the control of the party obligated (financial inability excepted), performanceof such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. 16. PARTIAL INVALIDITY If any term, covenant, condition, or provision of this Lease is determined to be invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. 17.WAIVER OF RIGHTS The failure of CITY or TENANT to insist upon strict performance of any of the terms, covenants, or conditions of this Lease shall not be deemed a waiver of any right or remedy that CITY or TENANT may have, and shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, and conditions of the Lease thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant, or condition of the Lease. RELEASES. 8/LZWMS REV: 4-10-96 23 18.COSTS OF SUSTAINING AN ACTION FOR BREACH OR DEFAULT In the event either CITY or TENANT commences legal action against the other claiming a breach or default of this Lease, the prevailing party in such litigation.shall be entitled to recover from the other cost of sustaining such action, including reasonable attorneys’ fees, asmay be fixed by the Court. 19.RESERVATIONS TO CITY The PREMISES are accepted "as is" and "where is" by TENANT subject to any and all existing easements, and encumbrances. CITY reserves the right to install, lay, construct, maintain, repair, and operate such. sanitary sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil, and gas pipelines; telephone and telegraph power lines; and the applications and appurtenances necessary or convenient for connection therewith, in, over, upon, through, across and along the PREMISES or any part thereof, and to enter the PREMISES for any and all such purposes. CITY also reserves the right to grant. franchises, easements, rights of way, and permits, in, over, upon, through, across, and along any and all portions of the PREMISES. No right reserved by CITY in this clause shall be so exercised as to interfere unreasonably with TENANT’s operation hereunder. CITY agrees that rights granted to third parties by reason of this clause shall contain provisions that the surface of the land shall be restored as nearly as practicable to the original condition upon the completion of any construction. 20.HOLDING OVER In the event TENANT shall continue in possession of the PREMISES after the term of the Lease, such possession shall not be considered a renewal of this Lease but a tenancy from month to month and shall be governed by the conditions and covenants contained in this Lease. 21.DISPOSITION OF ABANDONED PERSONAL PROPERTY If TENANT abandons the PREMISES or is dispossessed thereof by process of law or otherwise, title.to any personal property belonging to TENANT and left on the PREMISES forty-five (45) days after such abandonment or dispossession shall be deemed to have been transferred to CITY. CITY shall have the right to remove and to dispose of such property without liability therefor to TENANT or to any person claiming under TENANT, and shall have no need to account therefor. RELEASES. 8/LZWMS REV: 4-10-96 2 4 22. QUITCLAIM OF TENANT’S INTEREST UPONTERMINATION Upon termination of this Lease for anyreason, including but not limited to termination because of defaultby TENANT, TENANT shall, at CITY’s request execute, acknowledge and deliver to CITY within five (5) days after receipt of written demand thereof, a good and sufficient deed whereby all rights, title, and interest of TENANT in the PREMISES, is quitclaimed to CITY. Should TENANT fail or refuse to deliver the required deed to CITY, CITY may prepare and record a notice reciting the failure of TENANT to execute, acknowledge and deliver such deed and the notice shall be conclusive evidence of the termination of this Lease, and of all right of TENANT or those claiming under TENANT in and to the PREMISES. 23. CITY’s RIGHT TO RE-ENTER TENANT agrees to yield and peaceably deliver possession of the PREMISES to CITY on the date of termination of this Lease, whatsoever the reason for such termination. Upon giving written notice of termination to TENANT, CITY shall have the right to re-enter and take possession Of the PREMISES on the date such termination becomes effective without further notice of any kind and without.institution of regular legal proceedings. Termination of the Lease and re-entry of the PREMISES by CITY shall in no way alter or diminish any obligation of TENANT under the Lease terms and shall constitute an acceptance or surrender. TENANT waives any and all rights of redemption under any existing or future law or statute in the event of eviction from or dispossession of the PREMISES for any reason or in the event CITY re-enters and lawfully re-takes possession of the PREMISES. 24.CONFLICT OF INTEREST TENANT warrants and covenants that no official or employee of CITY nor any business entity in which any official or employee of CITY is interested: (i) has been employed or retained to solicit or aid in the procuring of this Lease; or (2) will be employed in the performance of this Lease without the divulgence of such fact to CITY. In the event that CITY determines that the employment of. any such official, ~mployee or business entity is not compatible with such official’s or employee’s duties as an official or employee of CITY, TENANT upon .request of CITY shall immediately terminate such employment. Violation of this provision constitutes a serious breach RELEASES. 8/LZWMS REV: 4-10-96 2 5 of this Lease and CITY may terminate this~Lease as a result of such violation. 25. EMINENT DOMAIN In the event the whole or any part of the PREMISES are 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. Ifonly 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, TENANT shall continue to be bound b~ the terms, covenants and conditions of this Lease. However, the then current minimum annual rent shall be reduced in proportion to the relationship that the compensation paid by the condemning public entity for the portion condemned bears to the value of the entire PREMISES as of the date of possession of the part condemned. If the condemnation of a part of the PREMISES substantially impairs the capacity of the remainder to be used for the purposes required by this Lease, TENANT may: Ao 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 iby the terms, covenants and conditions of this Lease. If TENANT elects to continue in possession of the remainder of the PREMISES, the then current annual minimum rental shalI be reduced in proportion to the relationship that the compensation paid by the condemning public entity for the part condemned bears to the value of the entire leased PREMISES as of the date of possession by the condemning public entity. TENANT shall provide CITY with written notice advising CITY of TENANT’s choice within thirty (30) days of possession of the part condemned by the condemning public entity. CITY shall be entitled to and shall receive all compensation related to the condemnation of all or part of the PREMISES by the exerciseof eminent domain except that TENANT shall be entitled to that portion of the compensation which represents the value of the TENANT constructed improvements .for the remainder of the Lease term. The amount to. which TENANT shall be entitled Shall not exceed the actual cost of improvements constructed by TENANT reduced in proportion to RELEASES. 8/LZWMS REV: 4-10-96 26 the relationship of the remaining Lease term to the original Lease term, using a straight-line approach. 26.CHANGES IN PRICE INDICES Clauses contained in this Lease may provide for adjustment based on the Consumer Price Index, component indices, or other indices. Should these indices be changed, altered or cease to be published, .the following conditions shall apply: If the subject index is changed so that the base year differs from that used as of the month in which the term commences, the subject index shall be converted in accordance with the conversion factor published by the publisher of that index; Bo Ifthe subject index is discontinued or revised during the Lease term, such index shall be replaced by another government index or computation which will obtain substantially the same result as would be obtained if the subject index had not been discontinued or revised. 27.POST-ACQUISITION TENANCY TENANT- hereby acknowledges that its occupancy of the PREMISES .is subsequent to acquisition of the PREMISES by CITY. TENANT further understands and agrees that as a post-acquisition tenant, TENANT is not eligible and fur.thermore waives all claims for relocation assistance and benefits under federal, state or local law. 28.HAZARDOUS SUBSTANCES Ao Definition. As used herein, the term "Hazardous Materials" means any substance or material which, has been determined by any state, federal or local governmental authority to be capable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated as hazardous or toxic by the U.S. Environmental Protection Agency, the California Water Quality Con’trol Board, the U.S. Department of Labor, the California Department of Industrial Relations, the California Department of Health Services, the California Health and Welfare Agency in connection with the Safe Water’ and Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S. Department of Agriculture, the U.S. Consumer Product Safety Commission, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration or any RELEASES. 8/LZWMS RE"V: 4-10-96 27 other governmental agency now or hereafter, authorized to regulate materials and substances in the environment. Without limiting the generality of the foregoing, the term "Hazardous Materials" shall include all of those materials and substances defined as "toxic materials" in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time. Bo TENANT’s Use of PREMISES. During the term of this Lease, TENANT shall abide and be bound by all of the following requirements: TENANT shall comply with all laws now or hereafter in effect during the term of this Lease relating to the use of Hazardous.Materials on, under or about the PREMISES, and TENANT shall not contaminate the .PREMISES, or its subsurfaces, with any Hazardous Materials. .ii.TENANT shall restrict its use of Hazardous Materials at the PREMISES to those kinds of materials that are normally used in constructing the Project. Disposal of any Hazardous Materials at the Premises are strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all.applicable laws now or hereafter in effect. All safety and monitoring features of any storage facilities shall be approved by CITY’s Fire Chief in accordance with ’all laws. iii. TENANT shall be solely andfully responsible for the reporting of all Hazardous Materials releases that occur during ~ the term _of this Lease, to the appropriate public agencies, when such releases are caused by or result from TENANT’s activities on the PREMISES. TENANT shall immediately inform CITY of any release of Hazardous Materials, whether or not the release is in quantities that would otherwise be reportable to a public agency. iv.TENANT shall be solely and fully responsible and liable for such releases at the Premises, or into CITY’s sewage or storm drainage systems. TENANT shall take all necessary precautions to prevent any of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. TENANT shall remove releases of its RELEASES. 8/LZWMS REV: 4-10-96 28 Hazardous.Materials in accordance with all laws. In addition to all other rights .and remedies of CITY hereunder, if the release of Hazardous Materials caused by TENANT is not removed by TENANT within ninety (90) days after discovery by TENANT, CITY or any other third party, CITY may pay to have the same removed and TENANT shall reimburse CITY for such costs within five (5) days of CITY’s demand for payment. Vo Notwithstanding Section 12 of this Exhibit A, TENANT shall protect, defend, indemnify and hold harmless CITY from and against all loss, damage, or liability (including all foreseeable and unforeseeable consequential damages) and expenses (including, without limitation, the cost of any cleanup and remediation of Hazardous Materials) which CITY may sustain as a result of the presence or cleanup of Hazardous Materials on the PREMISES~ vi.TENANT’s obligations to CITY under this Clause 28 shall include TENANT’s obligation and responsibility under Clause XII(D) of this Lease to abate or contain any asbestos containing material or lead paint that may be present in the building on the PREMISES. 29". vii.TENANT’s obligation under this Clause shall survive the expiration or earlier termination of this Lease. ALL COVENANTS ARE CONDITIONS All provisions of the Lease are expressly made conditions. 30.PARTIES OF INTEREST Nothing in this agreement, expressed or implied, is intended to, or shall be construed to, confer upon or to give to any person or party other than CITY and TENANT the covenants, condition or stipulations hereof. All covenants, stipulations, promises and agreements in this Lease shall be for the sole and exclusive benefit of CITY and TENANT. 31. RECORDATION OF LEASE Neither CITY nor TENANT shall record this Lease; however, a short- form memorandum of Lease may be recorded at CITY’s request. RELEASES. 81LZWMS REV: 4-10-96 2 9 EXH!BIT B (to Lease) Legal Description and Map Note:The legal description and map to be included as Exhibit B to the lease will be prepared upon City approval of optionee’s project plans when it is known whether the spine will/will not be included in the project and in the lease area. EXHIBIT C (to Lease) Description of the Project - Development and Operation of the Premises Note:The description of the project to be included as Exhibit C to the Lease will be the description submittedby the proposer responding to the Request for Proposals and approved or amended by the City during the selection process. Note: EXH1BIT D (to Lease) Development Plans and Construction Drawings The development plans and construction drawings to be included as Exhibit D to this lease will be the plans and drawings submitted by the optionee and approved by the City during the option period. (See Sections 4C and 4D of Option to Lease Agreement.) EXHIBIT E (to Lease) Long Term Maintenance Plan and Schedule for Building Note:The maintenance plan and and schedule to be included as Exhibit E to the lease will be the plan submitted by the optionee and approved or amended by the City during the option period. EXHIBIT II Secretary of the Interior’s Standards for Rehabilitation* A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. The historic character of the property shall be retained and preserved. The removal of historic material or alteration of features and spaces that characterize a property shall be avoided. Each property shall be recognized as a physical record of its time, place and use. Changes that create a false sense of historic development, such as adding conjectural features or ’architectural elements from other buildings, shall not be undertaken. 10. Most properties, change over time: Those changes that have acquired historic significance in their own right shall be retained and preserved. Distinctive features, finishes, and construction techniques or examples of craftmanshipthat characterize a historic property shall be preserved. Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration, requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical or pictorial evidence. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be unddrtaken using the gentlest means possible. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measure shall be undertaken. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated form the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment. New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment Would be unimpaired. *Guidelines for these Standards are available for public review in the Palo Alto Planning Department. R0thattC3 ATTACHMENT D PROPOSED PHYSICAL CHANGES TO .PROPERTY ENVIRONMENTAL ASSESSMENT WORKSHEET For purposes of environmental assessment of the proposed project, provide the following: A summary description of all physical changes proposed to the site and structure. (Cross-referencing to proposer’s response under Attachment A, Proposed Use, Historic Preservation and Development of Property, will be allowed.) o Complete and sign the attached Environmental Assessment Worksheet. P.O. BOX PAL0 ALTO. (;A 9430;1 ’. ENVIRONMENTAL ASSESSMENT WORKSHEET Address of Project Current Zoning Applicant: Name Address Comprehensive Plan Designation Owner: Yes~ No. Telephone.¯ Application for: Site and Design. Use Permit Parcel Map_ Zone Change ARB Review ’EIA, ].Size of.site 2,Site.is owned rented 3.Existing use of property Assessor’s Parcel Numb@r by applicant. Total numberof building occupants for the existing use Number of existing parking spa~es Percent of compactspaces Number of existing bicycle parking spaces Class Numberof existing structures Current use Will any structures be demolished for this project? -Yes. 7.. Size of existing structures .Condition No B. If’the current use is residential: Number of owner-occupied units-- Number. of renter-occupied units a:eiawork.doc Page ] ~I.PROPOSED PROOECT g.Description of project 10. 11. 13.. 14. 15. 17. Number of structures proposed Size (in square feet) Number of.floors Square footage of each floor ¯ Percent of site to be covered by pavement Total number of building occupants for the proposed project If the proposed use is residential: Total number of units Number of units/acre Expected sales price or monthly rent per dwelling unit List kinds and sizes of community buildings. Area of private open space Area of common open space Provision of low/moderate income units: I) Number.of units provided for: 2) Saleand/or rental price sale rent Total number of vehicles expected daily for proposed project " N’umber of proposed parking spaces_ Percent of co.act spaces. Number. ~f proposed bicycle parking spaces ClassAre any. toxic wastes to bedischarged~ Yes No (If yes, please complete a Sewer Discharge Questionnaire~ which furnished by the Building Department)is Has this facility in thepast or willthe operation of theprop.osed facility involve the storage Or use of hazardous materials? Yes ~o " (If yes, pleasecomplete a Hazardous Materials D~closure Checklist, which is furnished by the Fire D~partment) a:eiawork.doc .. Page 2 Expected amount of water usage (except for residential developments of= fewer than 4 units not-located in the foothilIs): Domestic gal/day Commerc i al ~al/~ay, .gal/mi n oal/mi nExpected fire flow demand Peak use Peak use .9al/min Ig.Daily sewer discharge (over 3~ fixtdres only) 20.Expected energy use: Gas_therms-Electric_. Use~ and equipment sizes k. Space heating: _KWH Peak ele.ctr.ic, demand Electric_ Other BTUH _ Heat Pump_ Sdlar__ Tons_ B. Air conditioning:. .Number of units C. Water Heating: Gas Elect~ic~ KW Other BTUH Type:Central system_ Recir~ulating Loop? Other: Total tonnage_" Heat Pum~_ _ Sol ar _ Tons _ Individual systems_ Yes Indoor I ight.ing ’ .Cooking_ , KW_ Motors. _ KW_Outdoor lighting_____ KW -Refrigeration__ To~s or ft~______ X-Ray_. Computer a:eiawork.doc Page 3 21.Air poilution emi.ssions (Check applicable B~ue£PCD regulations). Commercial/Industrial only: Source and hnount._. 22.Noise generation: Source Sound-proofing proposed _AmoUnt(dBa)_ 23. 24.’ 25. 26. Site drainage provisions /~nount of proposed grading (cubic ~ards)z- Disposition of excavated material Permits required from other agencies: Santa Clara Valley ~ater District Bay Conservation and Development Commission Bay Area Air Pollution Control DistriCt Corps of Engineers Other 27. 28. 29. ¯ Percent and direction of ground slope at site- Is this site within a special flood hazard area~ Yes_ No_ Existing site vegetation (pleaSe list, and indicate any to be removed’) 30.Existing anima’and b~rd life on.site a:eiawork.doc Page 4 31.Land usesadjacent to.site Prepared Date NOTE: More information maybe required before the application for which this assessment has been prepared can be processed. Please call the Department of Planning and Con~nunity Environment at (415~ 329-2442 if ~ouhav~ any questions. PLEASE RETURN COMPLETED WORKSHEET TO THE DEPARTMENT OF PLANNING/V~ COHHUNITY ENVIRONMENT,’CIVIC CENTER, 250 HAMILTON AVENUEi 5TH FLOOR. a:eiawork.doc Page 5