HomeMy WebLinkAbout0364.091,
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,July 18, 1991
THE HONORABLE CITY CoUNCIL
Palo Alto, California
Friends of the Children I s Theatre
Leases
Members of the Council:
Report in Br ief
Prel iminary Agreement and
This report requests that Council approve the attached Pralimin3ry
Agreement, including its attached forms of leases, between the city
of Palo Alto and the Friends of the Children's Theatre concerning
the proposed Children's Theatre improvement proj ect "(Phases. I and
II) . Complete funding for the project viII be provided by the
Friends of the Children's Theatre.
Background
On OCtober 9, 1990, Council directed staff to proceed with the
negotiation of an option to lease or other suitable agreement with
the Friends of the Children' s Theatre for their development of
Phase I ana Phase ~I of the Children's Theatre project.
The Friends initiated the project in August 1983 in an effort to
address ventilation and air circulation deficiencies at the
:rheatre~ After discussions with staff, the potential project was
expanded to include the construction of 3,350 square feet of new
space. The Friends approved a plan in February 1985 to ~ndertake
a fundraising drive to add air conditioning and to build space at
the Children's Theat~e to accommodate more children. As
envisioned, the project would relieve the ventilation and air
circulation problems in the existing Theatre and add new rehearsal
and classroom/library space and expanded space for shop, dressinq
rooms and kitchen. In July of 1985, ~ith the approval of the City
Manager, the Friends proceeded with their plans to launch a
$500,000 building fund drive. Preliminary plans were created by
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local ~rchitectural fi~s to reflect the programming needs of the
Children's Theatre~ The designs ~ere reviewed and endorsed hy the
late Birg~ Clark, the o~i9in41 architect of the Lucie stern
Community Center~ The plan was designed to meet the requirements
for theatre expansion as propos~d by staff and to conform to the
architectural style of the community center~
:In 1991 J tbe Friends contracted with the stoecker and Northway
architect.ural firm. to prepare final designs for the pr'Oject.
Presently the Friends are preparing to submit the project for
approval throuqh the normal city discretionary review and approval
process~
PrelIminary Agreement and Leases
Under the attached Preliminary Agreement, the Friends ~ill proceed
through the City approval process for Phases I and II of the
Children's Theatre illlprovement project. See Attachrnent A for
sUlIUllary of Preliminary Agreement and Leases. The preliminary
Aqreement qrants the Fri~nds tvo options to lease ~ertain areas
adj~cent to the Theatre to enable the Friends to construct Phases
I and II respectively.. The lease for Phase I also grants the
Friends access to the existing T~eatre to install an air
conditioninq system. Neither option to lease can be exercised
until the entire project has been approved by the City and all the
other conditions of the Preliminary Agreement have been fulfilled
by the Friends. The option tor Phase I can be exercised only after
the Friends have raised sufficient funds to .fully finance its
construction. Similarly, the option for Phase II can only be
exercised vhen the Friends hav~ raise~ sufficient funds to fi~ance
its construction.
Phase I includes the installation of air conditioning in the
Theatre, the remodeling of a storage area adjacent to the Theatre
and the construction of a Theatre library. Phase II includes the
construction of the outdoor p!atform (stage) and production area
adjacent to the Theatre. The Friends' option to lease tor Phase I
..... ill be in effect for 3 years from the date of the Preliminary
Agreement, with a construction term (under the Phase ! lease) of an
additional eighteen months. The option to lease for Phase II ~ill
be in effect for 5 years from the date of the Agreement; ~ith the
construction term (under the Phase II 1ease} also to be eigbteen
months.
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page Three
The Prelimihary Agreement and leases also incorporate the
p::Oinciples approy~d by Council on October 9, 1990, when council
directed staff to proceed with the negotiation of an agreement with
the Friends. See Attachment B tor a list of these principles.
Major amoll9 these principles is that the City be ensured of
receivinq the 91ft of a fully completed project that has been
privately financed and developed by the Friencts.
city staff and the Friends have worked together to develop the
Preliminary Agreement and leases. The Friends have reviewed and
approved the attached final version of the documents.
Funding
Fundinq for the Children's Theatre improvement project 'Will be
provided by the Friends of the Children's Theatre. Begun in 1985,
the Friends have carri-did out a successful fundraising capital
campaign that has generated $410,000 in cash and $15, 000 in
pledges. To date, the Friends have spent $62,500 in support of
tundraising, tor design fees and for acoustical, mechanical and
&truotural engineering reports. As of July 1, 1991, the Friends
have an account balance of $347,500 in funds restricted to tne
project. The Friends will continue to raise funds through 1991 and
1992 in order to complete both phases of the project.
Environmental Assessment
The required environmental assessment under the California
Environm~ntal Quality Act for the entire project (both phases) ~111
be performed in conjunction with the City's discretionary review of
the project.
The expansion plans were presented to the Histo~ic Resources Board
on June 19, 1991 and approved ~ith recommendations. The Planning
Commission will review the project on August 29, 1991, and the
Architectural Review Board will review it on September 19, 1991.
The project is scheduled for City Council consideration on OCtober
21, 1991.
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Page Four
ReC9DUPf'pdations
sta~t recommends that Council:
1. approve the Preliminary Agreeme.nt 'oII'ith its attached forms
of leases for Phase I and Phase II between the city of Palo Alto
and the Friends of the Children's Theatre~ and
2. ~uthorize the Mayor to sign the Preliminary Aqreement.
Respectfully submitted,
Paul Thiltgen
Culture Director of community services
Preliminary Agreement and Leases
Previously Approved Principles
Preliminary Agreement
CC: Friends of the Children's Thea'c.re
Related CMR's: 546:6
522:0
298:91
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PARTIES:
PURPOSE:
OP'l'ION:
TERM:
CONSIDERATION:
CONDITIONS
PRECEDENT
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Attachnlent A
StTfOCJ.RX OF rF.E'LIMINARY AGREEMENT
city of Palo Alto (CITY)
Friends of the Children's Theatre (FRIENDS)
To enable FRIENDS to present CITY wit.h l!I major
gift of additions and improvements to the
Children's Theatre.
CITY to grant two options to FRIENDS to lease
portions of the property adjacent to the
Children's Theatre, and for access to the
1'heatre l for the pur-pose of constructing
improve~ents to the Theatre and to allow
installation of air conditioning in the
existing structure. Construction under the
leases ' •• i11 consist of Phase I (installation
of air conditioning, remodeling of storaqe
area and construction of the theatre library)
and Phase II (construction of the outdoor
platform and production area)4
36 months for PhaSe I; 60 months for Phase 1I4
In consideration
FRIENDs aqrees to
its own expense.
for the options qranted,
construct improvements at
FRIENDS shall have satisfied t~e followin9
major conditions prior to exercising either
option:
hired a professiClnal architect to handle
the design and review of the project;
hired a project manag~r (who m4y be the
a,chitect) and received CIT¥ approval of
FRIEND's contract ~ith the project manager;
received CIT~ approval of schematic plans
(including construction costJ for the project
within 12 months;
received approval of development plans for
both phases of the project from CITY'S
Historic Resources Board, Architectural Revie~
Board, Planning commission and City Council;
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obtained CITY'6 approval of construction
drawings and schedule for both phases;
provided CITY with evidence to ensure that
sUffici<mt funds ana .financial security will
be available to complete Phase I and Phase II,
respectively;
complied with all requirements of the
california Environmental Quality Act relating
to the project; and
provided evidence of CITY'S required
insurance covE-,rage to construct the project.
SUMMAR! Of tEASES FOR PHASE I AND PHASE II
PARTIES:
PREMISES:
PURPOSE:
REQUIRE!) USE:
TERK:
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City of Palo Alto (CITY)
Friends of the Children's Theatre (FRIENDS)
Portions of the property adjacent to the
Children's Theatre buildinq, including access
to the Theatre as necessary to install an air
conditioning system and to otherwise construct
the pr-o j ect •
Phase I: To alloW' FRIENDS to construct a
theatre library and remodel a storage area on
the defined Premises, and to allow FRIENDS to
install air conditioning in the existing
theatre. Phase II: To allow FRIENDS to
construct an outdoor platform and production
area o~ the definea premises.
Phases I , II; To allow FRIENDS to manage the
premises during construction, and to provide
for the premises, as imprcvad by the
construction, to revert to the CITY as a qift
upon final completion by FRIENDS and
acceptance by CITY.
FRIENDS to use the premises as necessary to
construct the project. CITY to continue to use
and operate the Children's Theatre to the
extent such use is feasible durinq
construction.
Term shall continue unti 1 the completion of
the applicable construction project up to a
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. RENT:
MAINTENANCE
AND REPAIR:
CONSTRUCTION
BY FRIENDS:
ASSURANCE OF
CONSTRUCTION
COMPLETION
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maxizum of 18 months for each lease.
In consideration for the lease of the premises,
FRIENDS will construct the project at FRIENOSI
Go1e expense.
CiTY responsible for maintenance and repair
required for continued operation of Children's
Theatre and its support systems. FRIENDS
responsible for maintaining those portions of
the Children's Theatre affected by the
installation of the air conditioning, and for
any damage or repair to the premises or the
children's Theatre resulting from the
construction of the prcject.
construction shall conform to the plans and
tjme schedule approved unde~ the preliminary
Agreement. CITY shall correct preexisting
conditions in the Children's Theatre or on the
premises Which are discovered curing the
project's design or construction (but not
caused by ~or resulting from the proje~t) and
which must be z'emedied r-eqardless of whether
FRIENDS constructs the Project. FRIENDS shall
be responsible for upgrading any support
systems necessary as a result of the
construction. FRIENDS sh~ll be responsible
for any asbestos abatement or containment
issues that may ~rise .as a result of the
project's construction. Durinq construction
CITY and FRIENDS shall work in coordina~ion t~
ensure that the constructed project can be
eftecti vely maintained after the project is
comploe:ted and the improvements are given to
the CITY.
Prior to commencement of lease and
construction of the project ~naer Phase I or
Phase II, .r"RIENDS shall provide to CITY a
specif ic construction schedule aJ'la evidence
that FRIENDS has sufficient funds to complete
the applicable phase of the project.
Sufficient funds shall be the actual
constructi'On bid for the particular phase,
plus a 10\ contingency. Evidence of
sufficient funds shall include all of the
folloltlinq: 1) Performance bonds supplied by
FRI£NDS 1 contractor, naming CITY and FRIENDS
as beneficiary; 2) evidence of FRlENOSI
deposit of 80\ of the sufficient funds into
accounts or investments agreed tlpon by CITY
and FRIENDS with FRIENDS retaining sole
di scretion to expend the funds to construct
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INSURANCE:
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the applicable phase of the project; and. 3)
evidence of FRIENDS' deposit of remaininq 20t
of sufficient tonds into joint CITY and
FRIENDS account. Once FPI~DS' funds frem the
so\: account!'. or investments are exhausted"
FRIENDS may request disbursement from the 20'
joint account to complete the project.
Standard insurance coverage required by CITY
shall be maintained by PRIENDS, FRIENDS'
architect and FRIENDS' contractor~
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ATTACHMENT B
2.
3.
PaI.CIPLB8 PREVIOVSLY APPROVEn BY TH! COUNCIL ICMR: 5:':0)
The lease for actual co:nstruction will include appropriate
insurance and perfo~ance bonds to en5u~e that the city ~ill
receive a completed project.
ourir,q the course of any negotiated agree~ent, with respect to
this prcject, the City 'Will only perform 'Work required for
operation and m.aintenance of the structure and existing:
systems.
The Friends of the Children's theatre will engage the services
of a professional architect tc handle all aspects of design
and project review. The architect will contract with
structural and mechanical engineers as appropriate.
4. The City will provide the project 3Tchitect with any eXisting
information on the design and condition of the building.
5~ The Friends of the Children's Theatre will engage the services
of a professional project manager~ This project manager may
or 'ft.ay not be a member of the design firm.. The project
manager will be the point of contact for City staff
coordination throughout the term of the project, from desiqn
through construction.
(;. The Puhlic Works Department shall review the contract with the
p~ofessional project manager to ensure that adequate scope of
services is incluaed. The Public \ilorx.s PepartlOent approval of
this contract is essential to proceeding ~ith the project.
7.
8.
The City Building Inspection Division and Public Works
Department will review the plans~ The Public works
Depart-ment's re:vie1tl will include those a6pects cf design
pertaining to "maintainability· of the project after it is
completed and returned to the City for operation and
maintenance. During the construction phase. the Public Works
Department Facilities Management staff, in cooperation with
the project manager I will work. to ensure future
maintainability.
The Friends of the Children's Theatre will be responsible for
accomplishing all associated 'Work required to finish the
entire project. This includes a requirement to comply vith
all new codes which mi;ht be triggered because of the ~ork on
the facility, as .. ell as all conditions of the ARB. Pre
existing conditions which are discovered during design or
construction (but not caused by or resulting from the project)
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and which must be remedied regardless of whether the new ~ork
is performed will be corrected by the City and cOClrdinated
~ith the project as appropriate4
9~ Standard city requirements will be included in all equipment
purchase and construction contracts regarding warranties and
~orkman5hip guarantees4
104 Construction of structural, mechanical~ electrical and
pl~ing will be done by licensed contractors. selected
finishing work, such as painting and cosmetic detailing. may
be completed by in-kind donations and volunteer labor using
appropriate materials. The professional project manager will
ensure that all work is properly coordinated and completed in
a professional manner.
11. If# in the pursuit of detailed design, the designer determines
that air conditioning must be an integral part of the project
in order to properly utilize the facility upon completion~ the
City Manager may grant an exception to the City's policy of
not addi~ air conditioning to City buildings.
12. The Friends of the Children's Theatre will not be responsible
for Children's Theatre programming during construction. It is
anticipated tha.t the City will find alternative accommodations
for the program should the T~eatre need to be closed for any
leIl9th of time.
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~RELIXlNARY AGRE%XE~
BETWEEN CI~~ OP PALO ALTO
AlII"D FJUZlfOS 07 'rU CBl:LOR.E'li' S "!"RE.J.'l'U
:rOR. G:In 'i'0 CHILDR.ElIlIS TKZA'l'RE
This Agreement is made this day of , 1991
by and between the City of Palo Alto, a municipal corporation
(~CrTY·), and the Friends of the Children's Theatre, a California
nonprofit corporation (·FRIE~DSftJ.
A.
B.
RECITALS
CXTY owns certain real property (the -FROPERTY-) located in
the city of Palo Alto, Santa Clara county, shown in Exhibit I
attached hereto and made a part hereof by this reference. The
Palo Alto Children's Theatre {the "Children's Theatre W ). also
owned by City, is situated on the PROPERTY as shown in Exhibit
1.
FRIENDS and crr'l agree it i.=; appropriate, reasonable and
desirable that FRIENDS, an established and recognized
organization of citizens, present CITY vith a ~ajor gift of
aaaitions and improvements to the Children's Theatre as
described belo~.
c. The parties intend that the gift, hereinafter referred to as
the -Project-, will i1"'clude: (l} the installation of air
conditioning in the children' 5 Theatre ~ (2) t.he remodeling of
a storage area adjacent to the theatre; (3) the construction
of a theatre library adjacent to the theatre; and (4) the
construction of an o~tdoor platform and production area, also
adjacent to the theatre.
D. To that end, under this Agreement FRIENDS intends to proceed
through CITY'S standard development approval process for the
design, plar~ing and approval of the project~
E. FRIENDS further intends 1~ construct the Project in two (2)
phases. Phase 1 of the project (-Phase 1-) will include the
installation of the air conditioning in the Children's
Theatre. the remodeling of the storage area and the
construction of the theatre library. Phase 2 of the project
(-Phase 2-) 'Will include thE' constrolction of the outdoor
platform and production area. Under this Aqreement~ FRIENDS
will obtain an exclusive option to lease certain portions of
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the PROPERTY to construct Phase 1 and an exclusive option to
leas~ another portion of the PROPERTY to construct Phase 2.
Both phases of the Project will be constructed in accordance
with the terms and conditions set forth in this Agreement ~~d
the forms of leases (the -Leases·) attached hereto as Exhibit
II (for Phase 1) and Exhibit III (for Phase 2) ~ ~hich exhibits
are made a part herE~f by this reference.
F. C:.ITY intends, under this Agreement., to grant the exclusive
options to FRIENDS to lease such portions of the PROPERT¥ as
will be defined under the Leases, durir.q 'Which time FRIENDS
intends to develop the plans, obtain financing and all the
necessary CITY approvals for the Project, and to satisfy any
other conditions set forth in this Agreement, prior to
exercising either of the options and constructing the project~
NOW, THEREFORE, in consideration of the premises set
forth above, the parties hereto mutually agree as follows:
1 ~ GRANT OF OPTION
CIT't hereby grants FRIENDS an eXClusive option to lease
the property to be described as the PREMISES under Exhibit II, in
ord.er to construct Phase 1 on the terms and suhj ect to the
covenants and conditions set forth belo~ and in Exhibit II. CITY
further grants FRIENDS an exclusive option to lease the property to
be described as the PREMISES under Exhibit III, in order to
construct Phase 2 on the terms and subj ect to the covenants and
conditions set forth below a~d in Exhibit III~
2. TERM OF OPTION
The term of the option for Phase 1 shall be thirty-six
(36) months and shall commence upon execution of this Agreement by
FRIENDS and CITY ~ The term of the option for Phase 2 shall be
sixty (60) ~onths and shall also commence upon execution of this
Agree~ent. Either or both option terms may be extended only by a
written amendment to this Agreement that is executed ~y both CITY
and FRIENDS. CITY aqrees not to unreasonably withhold its cor.sent
to such amendments.
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3. CONSIDERATION FOR OPTIONS
FRIENDS
FRIENDS
pertorll
In consideration for the options granted. hereby, arlO. it
and CITY satisfy all of the conditions set forth below,
agrees to construct the Project at its own expense and to
the additional duties set forth in the Leases.
4. CONDITIONS PRECEDENT
FRZENDS may not exercise either option under this
Aqreement unless and until all the folloving conditions have oeen
satisfied:
A. Architect. FRIENDS shall have engaged the services of is
professional architect to handle all aspects cf design and
review of the Project.
B. Project ~nager. FRIENDS shall have engaged the ser.ices of
a pro~essional project manager (the ·Project Manager-), who
may be FRIENDS' architect for the project, and CITY's Director
of Public Works or his designee shall have revie .. ed. and
approvea FRIENDS' contract wi~~ the Project Manager. CITY's
approval of the contract is required prior to the commencement
of the Lease for Phase 1, provided that CITY will not
unreasonal:lly withhold or delay its approval of the Project
Manager I s contract so long as it sets forth the Proj ect
Manager's responsibilities as follows:
(i)
(ii)
( iii)
(iv)
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To serve as the p?int of contact for CITY staff's
coordination with FRIENDS and FRIENDS' contractor
concerning the project., from d.esign through
construction throughout the term of this Aq~eement
and any Lease entered into pursuant hereto;
To generally oversee construction of the Project,
including conducting on-site inspections from time
to-time, as appropriate;
To monitor the Project's confonance with the
Construction Dra~ings (as hereinafter defined): and
To maintain professional liability, comprehensive
general liability, worker's compensation and
automobile insurance as required by Clauses 15 and
16 of the Leases; provided that if the Project
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i\r-chitect is serving as the Project Manager, the
Project architect need not duplicate his insurance
coverage to satisfy this provision.
Schematic plans Approvals. FRIENDS shall h-3.ve submitted, and
received approval of, the schematic plans for the Project
(the ·Schematic Plans-) from the City £n9ineer, Director of
Planning and Community Environlllent, Director of Arts and
CUlture and t.he Director of the Childre.n's Theatre, ...-ithin
twelve (12) months of the execution cf this A~reement. The
Schematic Plans ~hall include a site layout of the PROPERTY
and adjacent buildings, schematic floor plans or-the .existing
Children's Theatre and its proposed additions, simple
elevations of all structures, topographical information that
will depict to the city Engineer's satisfa~tion how drainage
will be accommodated on the PROPERTY and from adjacent
properties to the extent resulting from the Project's
construction, identification of propo$ed architectural theme
or style, landscaping plans, plan tor fulfilling the parking
requirement, a detailed description of all proposed improve
ments (including proposed ~ses ~nd methods of operation and a
qeneral outline specification which identifies proposed
construction material ar.d methods), a.nd an engine.e.r· s est.imate
prepared by FRIENDS' ~rchitect of the total construction cost
ror all proposed bJprovements. The Prcj ect may be performed
in two (2j pha~es; ho~ever, the Sche~atic Plans shall include
both phases o£ the proj~ct.
Development Plans_ Approvals. FRIENDS shtlll have submitted,
and received apprcval of, the develop";!\ent. plans for both
pha$es of the Project (the -Development Plans~) from CITY's
Historic Resources Board, Architectural Review Board, Planning
Commissi~n and City council. The Development Plans shall
include the Schematic Plans, the specific plans and details
of a.ny resource conservation features to be included and any
other information about the Project required to De submitted
by CITY sta ff .
E. construction Dra'W'inos Anorm@ls~ FRIENDS 5rJall have obtained
approval of the construction drawings for both phases of the
Project (the "Construction Drawings") from CITY IS City
Engineer and Chief Building Official. Review of the Construc
tion Drawings by the City Engineer shall have included those
aspects of design pertaining to whetber the Project can be
effectively maintained after it is completed and given to CITY
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for ope~ation and maintenance.
shall include:
The construction Dra'Wings
( i)
(ii)
(iii)
(iv)
(v)
Complete architectural j la~dscape~ systems and
engineering plans:
Complete structural calculations;
Complete construction specifications;
Comple~e construction contract form; and
Proposed construct~on schedule.
The proposed construction schedule for Phase 2 need only be a
reasonable estimate in order for FRIENDS to exercise: its
option to lease tor Phase 1. HO\r(e-.rer, in order to exercise
its option to lease for Phase 2~ the actual construc:tion
schedule tor Phase 2 must first be approved by the City
Engineer and the Chief Building Official~
F. flaMing Cgmmission Determination .. CITY's Planning conunission
shall have determined, in its discretion, that the Praj ect
conforms .. ith the City of Palo Alto Co:tl'lprehensive Plan
pursuant to Section 19.04.0SD of the Palo Alto Municipal Code
("PAI1C") •
G4 CEO A CQmpliance4 FRIENDS shall have comp] ied with the
California Environmental Quality Act of 1970 C-CEQA-) as it
may be amended from tim.e to time l and all r-elated CITY
procedures fur implementing CEQA, to allow the Project to be
performed.
B, Permits. FRIENDS shall have provided to CITY I S Manager of
Real property evide~ce that all permits and approvzls from any
and all agencies having pre-construction jurisdiction over the
PI"oj ect, including but net limited to building permits,
grading permits. street opening permits and health permits,
have been authorized and are available. To exercise FRIENDS'
option to lease for Phase 1, the requirements of this
paragraph shall apply only to Phase 1 improvements. To
exercise ~ENDS' option to lease for Phase 2, the
requirements of this paragraph shall apply only to Phase 2
improvements.
I. certification to Chief Building Official. FRIENDS shall have
submitted to CITY's Chief Building Official certification that
the plans for any proposed building construction comply, in
all respects, with current building codes and energy
conservation requirements as set forth in the California Code
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of Regulations.. Title 24, for nonresid~ntial constructiCl-n.
The form and content of said certificatior.s shall conform with
the requirements o~ said Title 24. To exercise FRIENDS'
option to leasE: tor Phase 1, the requirements of this
paragraph shall apply only to Phase 1 improve:ments. To
exercise FRIENDS I option to lease for Phase 2, the
requirements of this paragraph shall apply only to :t-'hase 2
improveUients.
J. Sufficignt funds. To exercise its option to lease for
Phase 1, FRIENDS shall have satisfied CITY rs Director of
Finance that FRIENDS has sufficient funds to construct Phase
1 of the Project according to the plans approved by CITY as
set forth in this Agreement, inclYdinq the Schematic Plans and
the Construction Drawings. To exercise its option to lease
~or Phase 2, FRIENDS shall have satisfi~d CITY's Director of
Finance that FRIENDS has sufficien~ funds to construct Phase
2 of the Project according to the plans approved by CITY as
set forth in this Aqreemen't_, including the Schematic Plans and
the construction Drawings. The phrase ·sufficient funds· for
purposes of this paragraph shall mean the total amount of all
actual construction costs for all proposed improvements under
the applicable phase~ as set forth in FRIENDS' contractor's
actual bid, plus such contractor's overhead and profit, plus
an additional ten percent (10%) of such cost as a reasonable
contingency ..
K. Sufficient :inancial Security to Complete Project. To
exercise its option to lease for Phase ~, FRIENDS shall have
furniShed to CITyt s Director ot Finance satisfactory evidence
to ensure that sufficient financial security will be available
to com~lete Phas~ 1 of th~ Project, as set forth in the
approved Schematic Plans and constr~ction Drawings. In order
to furnish such satisfactory evidence~ FRIENDS must comply
with all requirements of Clause 10 (FRIENDS' ASSURANCE OF
CONSTRUCTION COMPLETION) of Exhibit II. To exercise its
option to lease for Phase 2, FRI~~~S shall have furr~isheQ to
the Director of Finance satisfactory evidence to ensure that
SUfficient financial secu~ity will be available to complete
Phase 2 of the project} as set forth in the approved Schematic
Plans and Construction Drawings. In order to furnish such
satisfactory evidence, FRIENDS must comply with all the
requirements of Clause 10 of Exhibit III.
'1011J INk 00"..0032
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L. Insurance Coverage. FRIENDS, in accordance with Clauses 15
and 16 (INSURANCE) o~ the Leases .. shall have provided, and
caused to be provided, to CITi's Ris~ Manager evidence of all
required insurance coverage in t~e amounts set forth in the
Leases, naminq CITY.. its officers, agents r employees, and
FRIENDS, as additional insureds \lnder such policies to the
extent required under the Leases, to the satisfaction of the
Risk Manager.
K. Insurance coverage for Testing. Frior to conducting any soil,
geologic or other tests or investigations on the PROPERTY,
FRIENDS shall also have provided evidence of the insurance
coverage held by FRIENDS I architect, required by and i'n the
amounts set forth in Clause 15 of the Leases, nalDing CI1'Y~ its
of.ficers, a..;ents and employees, and FRIENDS~ as additional
insureds under such policies to the ~xtent required under the
Leases I to the sati3faction of the Risk Manager.
5. EXERCISE OF OPTION
At any time during either option term under this
Aqreenlent that FRIENDS has sat.isfied each and every condition
precedent set forth in Paragraph 4 (CONDITIONS PRECEDENT) above for
Phase 1 or Phase 2, to the satisfaction of CTT."l, FRIENDS may
exercise such option by giving the Manager of Real Property ·.ritten
notice of its election to do so, acco~panied by two (2) properly
executed copies of the Lease applicable to the particular phase of
the Project. CITY $hall execute the Lease within t~o (2) weeks of
receipt of the FRIENDS I request to exercise either .:.ption in
accordance with this paragraph.
6. GENERAL CONDIT!ONS
A. Review by city. FRIENDS hereby acknOwledges that one of the
p~rpose5 of this ~greement is to afford FRIENDS and CITY the
opportunity to detel;"'lDine lllhether or no"t. FRIENDS is able to
meet ~~e various conditions and obtain the required approvals
as set forth in this Agreement to constr1.'.ct the Project.
Several of such conditions involve obtaining review and
approval cf the F~oject from officers. boards, employees or
agents of CITY. Each of those revie"wro's shall be conducted in
an inQQpendent and timely manner and nothing contained herein
shall be deemed to limit the jurisdiction or authority other
wise possessed by said officers, }:;·oards, employees or agents
in the conduct of such revie~~ ~othing contained in this
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A9reement shall be deemed to i~ply that said approv31s ~ill be
forthcoming, and the failure to issue any s'..lch approval or
permit by any officer, board, employee or agent of CITY shall
not be deemed in any manner a breach ot this Agreement, nor
shall any such timely denial give rise to any claim,
liability, obligation~ or cause of action .. 1 L"1 r-espect to this
Aqreement or t..'le Leases. However, CITY aqrees that slJch
revie'Ws shall r.ot be subject to any more rigorous scrutiny
than would apply to any other CITY project. The parties also
aqree that CITY's policy conc~rning not including air
conditioning in ClTY facilities shall not apply to this
Project.
2. Other Governmental Approvals. CITY agrees to consent to any
lawful and complet.e applica1:ion by FRIENDS W'ith respe':!t to any
permits or approvals related to activities or improvements
approved by CITY in accordance with the options which may be
required by any goverTUDental or other regulatory agencies
aside from CI'I'Ya
C. Infornation on structures or PROPERTi'. CITY shall provide
FRIENDS or its designee ~ith any information in its possession
on the PROPERTY, including on the design and condition of the
existing structures on the PROPERTY, ~ithin ten (10) working
days of receipt of a ... ri tten request for such information.
Such information shall represent the most current condition of
the structures, to the best kno~ledge of CITY. FRIENDS shall
be responsible for verifying s',Jch information as may be
necessary or appropriate a
D. Assignment or Transfer Prohibiteda These options nave been
awarded based on the unique background and proposal of
FRIENDS; therefore, these options cannot be assigned or
otherwise transferred .. ·ithout the prior ... ·ri tten consent of
CITY. Failore to obtain CITY I 5 required written consent $hall
reMer said assignment or transfer void.
Ea Extension of Options. Upon receipt of FRIENDS' written
request stating the reasons therefor, the City Manager or his
designee may, in his or ner sole discretion, extend the term
of either option under this Agreement as follows:
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( iJ The City Manager or his designee may extend the
term of ZI,n option for a reasonable period of time,
as determined by the city Manager or his deSignee.
in the event FRIENDS is delayed in fUlfilling the
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con~itions precedent to the exercise of the option
by reason of any cause not the fault of. or within
the control of, FRIENDS or its agents O~ employees:
or
The City Manager or his designee may extend the
term of an option for a period not to exceed ninety
(SI'J) days, in the event FRIENDS is delayed in
fulfilling the conditions precedent to the exercise
ot the option for any other reason~ Ho~eyer, the
City Manager or his designee may grant such
extension cnly upon the following conditions:
a. Written request for such extension shall have
been delivered by FRIENOS to CITY's Manager of
Real Property at least fiftee~ (15) days prior
to the expiration of the applicable option
term under this Ag~gement; and
b. FRlENDS shall submi~, together with its
request for extension, evidence of its
progress to~ard fulfilling tha conditions
precedent to the exercise of the option,
documentation of its proposed actions and
feasibility of satisfying said conditions
~ithin the term of the extension requested and
such other information and material as may be
required by the City Manager or his designee4
TeTminat)cn of options. Failure of FRIENDS to meet tbe terms
and conditions of this Agreement fully and satisfactorily
within the time limits stated, subject to the possibility of
extension of the time limits under Paragraph 6(E) hereof, or
under a ltTitten and executed amendment to this Agreement,
shall absolutely and conclusively terminate FRIENDS' rights
hereunder. FRIENDS may also terminate this Agreement if it
believes it is unable to complete the Project because ~t
inadequate financing. Upon termination hereof ~ithout
exercise of either option~ FRIENDS shall, -.ithin five ,5}
business days of receipt of request from CITY I S Manager of
Real Property, deliver to CITY a properly executed quit claim
deed quitclaiming any and all interest in and to the PROPERTY
to City. Execution of the Lease by CITY and FRIENDS
substantially in the form of Exhibit III shall also constitute
a termination ef this Agreement.
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fRTENQS' Bight to Enter, CITY her~by gr3~ts to FRIENDS. its
agents and employees, during the term of this Agreement or any
extension thereof, the nonexclusive right to enter the
PROPERTY or any portion t:t:ereof, including the Children's
Theatre, at reasonable times for the p~rposes ot conductinq,
at FRI:E.Nm; I own cost and expense. such soil, geologic, and
enqineering or other investigations as may be required to
ena:ble FRIENDS to satisfy the conditions precedent tc the
exercise cf either option. Such entry by FRIENDS, its agents
and employees, shall not interfere with CITY's current use of
the PROPERTY. prior to any disruption of CITY services by
FRIENDS fOT such investigations, FRIENDS snaIl notify the
involved CITY Departments or users of the aftected areas at
~east twenty-four (24} hours in advance in order to ~inimi%e
disruption of CITY's operations. FRIENDS hereby agrees to
protect, indemnify, defend and hold CIT'i, its officers,
boards, agents and employees, free and harmless from any loss
or liability incurred by r~ason of any such investigation.
FRIENDS agrees to repair at its sole expense any and all
damages caused to the PROPERTY by reason of any such
investigation. The foregoing indemnification obliga"tion shall
not extend to preexisting conditions in the Children's Theatre
or on the PROPERTY vhich are discovered during {but not caused
:by nor result from) such investigation and 'Which must be
remedied for health and safety reasons or beca';lse CITY is
otherwise required by lav to remedy such conditions.
~~~ Any notice~ tender, or delivery to be given in
~ccordance with this Agreement by either party to the other
5hall be given in accordance ~ith Clause 2D (NOTICES) of the
Leases.
I. Entire Agreement. This instrument contains the entire
agreement between the parties relating to the options granted
under this Agreement. Any oral representations or modifica
tions concerning this instrument shall be of no force and
effect, except in a subsequent modification 'Which is made in
writing an~ signed by both parties.
J.. Recovery of Attorneys' regs. In the event of any controversy,
claim, or dispute ~etween the parties hereto, arising cut 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 any
other legal costs.
x. Binding on Successors. This Agreement shall bind and inure to
the benefit of the ~espective heirs, personal representatives.
successors, and assigns of the part~es hereto except as may be
expressly provided elsewhere in this Agreement~
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IN WITNESS WHEREOF, the parties hereto have executed this
Preliminary Aqre-emant en the day and year first aboVe 'Written.
CITY OF PALO ALTO
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ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
Assistant City Manager
Dir. o~ Planning and community
Environment
Finance Director
Manager of Real Property
Director of Public wcrks
Director of Community Ser'ice~
Director of Arts & CUlture
Director of Children's Theatre
Risk Manager
Attachments:
E:<hibit I:
Exhibit II:
Depiction of the Property
Lease for Phase 1
Exhibit III: Lease for Phase 2
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EOIBIT II
LEASE BETWEEN CITY 0' PALO ALTO
AND FRIENDS OF THE CHILDREN'S THEATRE
1'OR PR::>JECT TO IMPROVE THEATRE l PHASE 1)
THIS LEASE is made this day of ~9 ___ by and between the City of Palo Alto, a California municipai
corporation (-CITY·)I and the Friends of the Children's Theatre, a
California nonprofit corporation (-FRIENDS-).
RECITALS
1. CITY' owns certain improvements commonly known as the Palo Alto
Children I s Theatre (-with SlJch impro~ .... ements hereinafter
referred to as the "Children's Theatre II1II ) ~ as ... el1 as the
underlying real property, located in Palo Alto, California,
and shown on Exhibit -6" attached hereto and incorporated
herein by this reference.
2. FRIENDS intends to benefit CITY and the public by providing
CITY with the. gift of a larger and improved Children's
Theatre. Accordingly, under this Lease FRIEl'tDS desires to
in$tall air conditioning in the Children's Theatre. remodel a
storage area adj acent to the theatre and construct an addition
to the theatre consisting of a library. at FRIENDS 1 sole
expense and as described in Exhibit ·e n attached hereto and
incorporated herein by this reference (the -Project-). Once
completed, FRIENDS intends to give the improvements
constructed under the Project to CITY.
3.
4.
The. Project is the first phase (-Phase 111) of a. ttJo-phase
project undertaken by FRIENDS. Under the second phase (-Phase
2-), FRJENDS intends to construct and give to CITy an outdoor
platform and pro~uction area adjacent to the Children'S
Theatre. The parties intend that Phase 2 ~ill be constructed
under a separate lease once FRIENDS has secured sufficient
funds to finance it.
Under this Lease, CITY desires to leaSe (.;ertain property
adjacent to the Children's Theatre (the ~PREMISES·) so that
FRIF.NDS may proceed liith the const.ruction of Phase 1 in
accordance .ith the tea.s and conditions set forth below. The
PREMISES are more particularly described and shown on Exhibit
-D" attached hereto and incorporated herein by this reference.
5. 'The parties hereby acKno .... ledge that FRIENDS is a private,
nonprofit corporation operating separately and independently
from CITY. FRIENDS intends to construct the Project
privately, under its sole control, subject only to the terms
and conditions set forth ~elo~.
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SOW, THEREFORE, in consideration of these premises, the
parties hereto mutually ~qree as follo~s:
PURPOSES
The purposes of this Lease are AJ to allo ... FRIENDS to
constr..lct the Project and give CIT~ a larger ana improved
Children's Theatre for the benefit of CITY and the public; B)
to provide for FRIENDS' sole management of the PREMISES and
construction of the Project during the term of this Lease; C)
to provide for completion to CIT~'S satisfaction of all work
required to finish the Project; and D) to provide for the
~SES, as improved by the Proje~t, to revert to CITY upon
termination of this Lease.
2. PREMISES
Subject to the terms and conditions set forth in this Lease,
CITY hereby leases the PREMISES to FFIENDS. FRIENDS hereby
leases the PREMISES from CITY for the purpose of constructing
the project as described in Exhibit ·e n • Except as specifi
cally provided in cla~ses 8(A) and 9(C) of this Lease, FRIENDS
recognizes that it ~ill undertake construction on the PREMISES
and within the Children's Theatre subject to the property's
existing condition.
J. RIGHT OF ENTRY AND ACCESS FOR CONSTRUCTION AND FOR AIR
CONDITIONING INSTALLATION
Subject to the terms and conditions set forth in this Lease,
CITY hereby grants to FRI~NDS the none~clusive right to £nter
and access to the Children's Theatre, or any portion thereof,
for the purposes of installing an ~ir conditioning system as
described in Exhibit ·C"', and otherwise as needed to construct
the Project. In exercising these rights, FRIENDS shall make
best efforts to cause the least interruption possible to the
Children's Theatre p=oqramming and to CITY's staff operations
related thereto. Prior to any disruption of CIT¥ services by
FRIENDS tor such activities, FRIENDS shall notify the involved
CITY department.s or users of the affected areas at least
forty-eight (48) hours in advance in order to minimize
disruption of CITY's operations. Regardless of the terms of
this Lease... FRIENDS' right to enter and access to thE:!:
Children's Theatre under this clause for installation of the
air conditioning shall terminate once the air conditioning
system is installed and accepted by CITY as complete in
accordance 'With Clause 9 (G) of trds Lease. FRIENDS I general
right of ~ntry and access to the Children's Theatre under this
clause for construction activities shall terminate once the
balance of the proj ect is accepted by CITY as complete in
accordance ~ith clause 9(G} of this Lease.
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REQUIRED USE
In turtherance of the purposes stated above, the foll~~in9 use
shall be provided, pe~itted or prohibited on the PREMISES and
within the Children's Theatre:
A. "Required Use. FRIEND'S shall use the PREMISES and t~le
Children's Theatr€ only as nE:cessary to construct the
Project. FRIENDS ackno~ledges that the Children's
Theatre shall be subject to CITY's continued use and
operation, to the extent such use is reasonably feasible
durinq the term of this Lease.
Bo. Rmitrieted Uses. Except as the parties may .otherwise
subsequently a9ree, the above listed use shall be the
only use pernitted upon or from the PREMISES and the
Children's Theatre by FRIENDS.
5. TERM
6.
7.
The term of this Lease shall continue until the completion of
the Project as provided under Clause 9(G) hereof, but in no
event lonqer than eighteen (IS) months. The term shall
commence the first day of the month follo·.dnq the execution of
the Lease by CITY. The term shall be su.bject to renegotiation
between the parties should the Project's completion be delayed
for any reason beyonQ the reasonable control of FRIENDS.
TERMINATION OF PRIOR AGREEMENTS
~ith the exception of the Prelimina~j Agreement between CIT¥
and FRIENDS dated 1991, concerning FRIEND's
option to lease the PP£MISES (the ~preliminary Agreement-),
this Lease supersedes all other prior leases or agreements
entered into by CITY fer use of the PREMrSEs~ The Preliminary
Agreement is attached hereto as Exhibit ~E~ and incorporated
herein by this reference.
CONSIDERATION
In consideration for the lease of the PREMISES and acceSS to
thE!: Children' s Theatre~ FRIENDS agrees to construct the
P~OjEct at FRIENDS' expense, and under FRIENDS' sole control~
according to the terr,s and condition of this Lease.
B. MAINTENANCE AND REPAIR
A. CITY's Duti~S4 During the term of this Lease, and except
as otherwise provided in Clauses 8(B}, S(C} and 9(C)
hereof, CITY shall be responsible only for maintenance
and repair that is required for continued operation and
-maintenance of the Children's Theatre and its support
systems.
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FRIEND~ties. FR;ENDS agrees during the term of this
Lease to maintain the PREMISES, and during the
installation of the air conditioning to maintain those
portions of the Chi Idren' 5 Theatre affect€d by such
installation, in a commsrcially reasonable and safe
manner to the cOl'ilplete satisfaction of CITY and in
compliance ... ith all applicable la ... ·s. FRIENDS further
aqrees to provide approve~ containers for trash and
garbage generated by the Project's constructIon and to
lawfully dispose of all such trash and garbage. CITY
shall have the right to enter upon and inspect the
PREKISES and the Children's Theatre at any time to
determine whether FRIENDS is complying with this Lease
and whether the site is being maintained in a r-eao.sonably
safe manner. Notyithstanding the above provisions, but
subject to the third sentence in Clause 9 (C) hereof,
FRIENDS shall also be responsible for damage or repair to
the PREMISES or the Children's The-atre, including any
associated support systems, resulting from FRIENDS'
construction of the ProjeGt or FRIENDS' other use of the
PREMISES and the children's Theatre and not occasioned by
normal wear and tear.
c~ Failure to Haintair.. If FR.iENDS fails to maintain or
make repairs or replacements as required t.':l·ein, CITY may
notify FRIENDS in ..... riting of said failure. Should
FRIENDS fail to correct the situation "Within a reasonable
t1.me theree.fte.r, as established by CITY I 5 City Manager or
his designee, CITY's Real Prop~rty Manager may make, or
cause to be made, the necessary corrections and the cost
thereo~, including but not limited to the. cost of labor,
materials, and equipment and a reasonable charqe for
administration and everhead. shall be paid by FRIENDS
.. ~itbin ten (101 days of receipt of a statement of said
cost from CITY'6 Real property Manager~ CIT~ may, at its
option, choose any other remed ies avai lable herein or by
law to secure such pa~ent.
9. CONSTRUCTIO~ BY FRIENDS AND ACCEPTANCE BY CITY
A. Minimum Construction a.Tld Timing. Commencing on or about
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'FR""I"E"N"'OS""-."h"".'l'lc-i n an e f f ic ient and wo rkrnan 1 ike manne r
cause the Project, as previously appi."oved by CITY under
the Preliminary Agreement, to be constructed and
installed .. ithil"l the Children's Theatre and the PREMISES,
in substantial compliance ~ ... ith the approved time. schedule
ror constructing the project.
Development Plan and Co~struction StandaTd~. All design
and construction of the Project by FRIENDS shall conform
with the -Development Plans" and "ConstructioTi Drawings·,
as defined and previously approved by CITY under tt.e
preliminary Agreement, and shall meet all other
requirements contained in this Lease. FRIENDS shall at
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all times comply ~ith CIT~'s regulations governing
construction noise controls under Chapter 9: .10 of the
Palo Al to Municipal code and any construction dust
control :!Il.i tiqaticn measu.res imposed on the Proj eet by
CITY.
Responsibiljty for Work. FRIE.NDS shall be responsible to
l:Iccomplish all associated work r-equi red to finish the
Project~ FRIENDS shall comply with all ne~ code
requirements which are triggered because of the ~ork at
the Children's Theatre and on the PREMISES, as well as
all conditions CITi' has illlposed on the Project during its
approval process. Preexisting conditions in the
Children's Theatre or on the PREMISES which are
discovered during (but not caused by nor resulting from)
the design or construction of the Project, and .. hich must
be remedied for heal th and safety reasons or because CITi'
is otherwise required by la~ to remedy such conditions,
regardless of whether FRIENDS constructs the Project,
shall be corr-ect.ed in a timely fashion by CITY and
coordinated with the Proj~ct as appropriate. Except as
provided in the preceding sentence, FRIENDS shall be
responsible for upgrading the plumbing, electrical, or
any other support system.s in the Children's Theatre which
is necessary as a result of the project's construction in
order to comply with ~ll code requirements or the
Project's conditions of approval. FRIENDS shall further
be responsible for any asbestos abatement or containment
issues that may arise as a result of the construction of
the Project to the extent required under all applicable
building and safety codes. During construction, CITY's
Public Works Department Facilities Management staff p in
coordination with FRIEND's project manaqer, shall work to
ensure that the project, the Children's Theatre and L~e
PREMISES can be effectively maintained after the Project
is completed and given to CITY upon te:nninatio .. , of this
Lease; provided, ho~ever. that in taking any such action,
CITY shall not reguire that the proj ect be constructed in
a manner materially different from the approved
Development Plans and Construction Drawings.
warranty and GuaraJ·t~"y""-__ ReguireIllent~. FRIENDS shall
include standarcl CITY requirements in all equipment
purchases and construction contracts regarding warranties
and workmanship guarantees for the Project. A list of
such requirements shall be provided to FRIENDS by CITY
upon request.
construr.tion~. structural, mechanical, electrical p
and plumbing construction shall be done by contractors
licensed in the State of California and under contract to
FRIENDS or FRIENDS' contractor. selected finishing work,
such as painting and cosmetic detail ing that do not
require 1 icensure to perform la .... fully may be c:"ompleted by
in-kind donations and volunteer labor using appropriate
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materials. FRIENOS' project manager shall oversee all
such ~ork~ concerning its proper coordination and
effectiv~ completion as required under this Lease~
CITY's Approval ~ All structures, ilr.provements, or
facilities under the Project shall be constructed I
erected, altered, or made lrIit,hin the Children's Theatre
and the PREMISES in compliance \o'ith the approved
Develcpment Plans and the construction Drawings. Any
conditions relating to the manner, m~thod, design and
construction of said structures, ittprovements or
facilities established under 'the Project approval process
shall be conditions of this clause as if they 'Were
originally stated herei~~
Completion of Pro; ect and Acceptance by City. Upon
completion of construction of any substantial improvement
of the PREMISES, FRIENDS shall submit to CITY's Real
Property Manager a Certificate of Inspection, verifying
that the construction was completed in conformance with
Title 24 of the California Cod~ of Regulatio~s for non
residential construction. The installation of the air
conditionin~ shall be deemed completed tor purposes of
this Lease at such time as all c f the follovinq have
occurred.~
i. FRIENDS' architect has delivered a written
statement to CITY stati~g that the air conditioning
has been installed in accordance with the
specifications and construction Drawings;-
ii. FRIENDS has obtained all necessary CITY inspections
of ana approvals for the air conditioning;
iii.
iv.
The air conditioning is in good
confirmed by CIT't IS P-.,J.blic
Facilities Management 5taff;
~orking order, as
W~rks Department
All debris and rubbish
installation of the air
removed by FRIENDS:
generated
conditioning
.from
has
the
been
V. FRIENDS has provided and assigned to CITY al::;'
applicable ~arranties for the air conditioning
system and its related equipment, and deliVered to
CITY any instructional or ottler dccuznents relating
to the operation of the system; and
vL CITY's city Manager ha5 confirmed in writing to
FRIENDS that all requirem~nts for the air
conditioning have been satisfied and that the air
conditioning is complete for final acceptance by
CITY. Upon FRIENDS I receipt of sLlch notice. the
air conditioning shall then become the sole
property of CITY.
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The ba!ance of th~ Project snall be deemed complete~
purposes of t.his Lease at such time ~s all of
follo~in9 have occurred:
for
the
i. FRIENDS' architect has delivered a written
statement to CITY stating that the Project has been
substantially completed in accordance with the
specifications and Construction Dra~ings;
ii. FRIENDS has obtained all necessery CITY inspections
of and. approvals for the Project, and CITY is
lawfully entitled to occupy such space und.er a
certific~te of occupancy:
iii. Representatives of CITY and FRIE~DS have complete~
a "walk-through~ inspecticn of the project, and all
major defects and incomplete items that materially
ilIlpair use of the space ha· ... e been remedied and a
Dpunch-list~ of minor defects has been prep~red for
prompt repair and completion by FRIENDS;
iv. All sites have been swept broom clean and all
rubbis~ has been removed by FRIENDS;
v. FRIENDS has made the space available to CITY f~r
occupancy; and
vi.. CITY's city Manage! !"las confirmed in writing to
FRIENDS that all requirements und"9:r this clause
have been satisfied and that the balance of the
Project is complete for final acceptance by CITY.
Upon FRIENDS r receipt vf such notice, this Lease
shall termjnate. The PREMISES, and all improve
ments constructed thereon under this Lease, shall
then become the sole pI'operty of CIT'{.
FRIENDS shall thereafter enSIJre that FRrENDS' contractor
will repair and complete, to CITY r s satisfaction, all
items. on the punch-list ,"'ithin sixty (60) days follow-ing
the termination of this Lease, as provided herein.
10. FRIENDS' ASSURANCE OF CONSTRUC'I'ION COM.PLETION
Prior to commencement of tnis Lease and construction of the
Project" FRIENDS shall furnish CITY's Directof' of Finance -with
is specific construction sched\ll~ and evidence that assures
CITY that sufficient funds will be available to complete the
Project~ The phrase ~sutficient funds~ for purposes of this
Lease ~eans the total amount of all actual construction costs
for a11 the improvements under the Project~ as set forth in
FRIENDS' contractor's bid for the Project, plus such
contractor's overhead and profit, plus an additional ten
percent (lDl) of such cost as a contingency. Evidence of such
assurance shall take all of the forms set out below:
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B.
Perfol"'lllance bond, supplied by FRIENDS I contractor ot'"
contractors, to fully guarantee said contracto~'s
construction of the Project; provided, hO\o1ever~ that said
bond is issued 'With both FRIENDS and CITY named as
beneficiaries;
Evidence of FR!E~DS r deposit of the total amount of
sUfficient fu.nds for the Pl.-oj ect, as defined herein, less
twenty percent t20\) of such amoul1t, into interest
be~rinq accounts cr investments agreed upon by FRIENDS
and CITY, 'With FRIENDS named as sole beneficiary or such
funds, and with FRIENDS retaining the sole discretion to
expend such f~nds to construct the Project, subject only
to the following sentence: Before agreeing to
substantial change orders to the project. FRIENDS shall
first obtain CITY's "Written approval of any such change
orders; and
C. Evidence of FRIENDS' deposit of tbe remaining t\t'enty
percent (20%) of said SUfficient funds into an interest
bearing joint account or joint investment agreed ~pon by
FRIENDS CI,nd CITY, ..... ith such acco!.lnt r-equ~rlnq the
siqnatures of authorized repr~5entatives of both FkIENDS
and CITY for disbursements I subj ect only to the follo'Winq
sentences: At such time as FRIENDS has current 1 y payable
invt:lices for the Project .. 'hich exceed the amount payable
therefor from the accounts or investments described in
Clause 10 (B) above, CITY .... i11 take the steps necessary to
expedite its: approval process 50 that funds can be
disbursed from the parties' joint a=count or investment
which, when added to the balance remaining in thE
accounts or investments described in Clause lO(B) above,
will be SUfficient to satisfy FRIENDS' current payables.
Thereafter, in oroer to co~plete the Project FRIENDS may
request CITY approval of disblJrsements from said joint
account cr jnvestment in order to make payments on
subsequent invoices, and CITY shall use its best efforts
to process said requests for approval in a manner 'Which
pentits FRIENDS to remain current on its obligations.
Should this Lease te~inate for an1~ reason I before the
expenditure of all the funds from said joint account or
investment, CITY shall be entitled full rights to and
ownership of such funds; provided, ho .... ever, that CITY
shall thereafter expend ~he funds only for purposes of
actual construction of the Project l or any portion
thereof yet to be completed vhen this Lease terminates.
ShOUld any portion of said joint account or investment
remain undisbursed follo ..... ing completion of the project as
provided under Clause 9(G) hereof, such remainder shall
be disbursed to FRIENDS upon request.
All bonds must be issued by a company qualifi~d to do business
in the State of california and reasonably acceptable to CITY's
Treasury Manager. All bonds and evidence of accounts,
investments or depOSits shall be in a form reasonably
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acceptable to CITY's Treasury Manager and CITyrs City
Attorney.
DAMAGE TO OR DESTRUCTION OF PREMISES
A. Damage or Destruction (Making Premises Unfit fer Use.) In
the event the PREMISES or the Children's Theatre, or any
portion thereof, are destroyed by any cause that renders
the PREMISES or the Children I s Theatre unfit for the.
purposes clesignated in Clause 4 (REQUIRED USE), and if
the P.RE.HISES or the Children's Theatre are so badly
damaged that they cannot be repaired Yithin ninety (90)
days from the date of such damage, either party may
terminate this Lease by giving to the other-party written
notice ~ithin ten (10) days of the occurrence of such
damage.
B. Insured Partial nestr-ucti,c:.n. If the PREMISES or the
Children's Theatre are partially destroyed by any cause
covered by FRIENDS' insurance policies required under
Clause 15 hereof, and the destroyed portion can be
re})ullt or repaired \oI'ithin ninety {90) days from the date
of destruction, CITY shall repair the damage or
destruction with rea50nable diligence. In such event,
this Lease shall remain in full force and effect.
c. Non-Insured Partial Destruc_tion. If the PREMISES or the
Childrer,'s Theatre are partially destroyed by any cause
not covered by FRIENDS' insurance policies~ but the
PREMISES or the Children's Theatr~. as applicable, can
still be used for the purposes designated in Clause 4,
FRIZNDS mays at is option. terminate this Lease unless
CITY commences rebuilding or repair of the destroyed
portion of the PREMISES or the children's Theatre within
ninety (90) days from the date of destruction. Such
termination by FRIENDS s~all b~ accc~plished by giving
CIT! written nvtice of termination not sooner than ninety
(90) days nor later than one hundred {I DO) days following
the occu:crence of such damage or destruction. This Lease
shall terminate on the date such notice of termination is
re~eived by CITY. If CITY accomplishes such repair or it
FRIENDS fails to exercise its option to terminate, this
Lease shall remain in full force and effect.
o~ Glass Breakage.. Glass breakage shall not be deemed a
partial destruction within the meaning of this clause.
12. AS BUILT PLANs
Upon completion of any substantial improvements unaer the
Project, FRIENDS shall provide CITY's Real property Manager
with ~ complete set of 24" x 36" - 3 mil mylar reproducible
-as built plans· reflecting the actual construction performed
by FRIENDS under this Lease ~ithin or upon the PREH!SES 0= the
Children's Theatre, as applicable.
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13. OWNERSHIP OF IMPROVEMENTS
All improveI!lents constructed, erected or install·ed upan the
PREMISES or the Chi1dren t s Theatre must be free and clear of
&11 liens, claims or liability for labor or material and shall
become the property of CITY I as provided under Clause 9 (G}
hereof, and remain upon the PREMISES upon termination of this
Lease.
14.. U'I'ILITIES
CITY shall be responsible for and shall pay, prior to
delinquency, all charges for utilities supplied to the
PREMISES and the Children's Theatre.
1.5. INSURANCE
A. Hini~um Limits and Forms of coveraa~. FRIENDS shall ~e
responsible to ensure that the following insurance
coverage acceptable to CITY is maintained in full force
and effect throughout the term of this Lease.
1. FRIENDS shall maintain the following policy or
policies of insurance ~ith th~ following limits and
coverages:
FOLICY
COMPREHENSIVE Bodily Injury
GENERAL LIABILITY,
including p~oduct5
and completed Property Damage
operations f broad
form contractual,
and personal injury.
MINIMUM LIMITS OF LIABILI'T'i
$1,000,000 ea. person
$1.000,000 ea. occurrence
$l~OOO,ooo aqq~eqate
$1,000,000 ea. occurrence
iL FRIE.NDS I architect for the Project snaIl maintain
the following policy or policies of insurance "-ith
the follo'.ing limits and coverageS:
POLICY
(1) WORKER'S COMP~NSAT1QN
(2) COKPREHENSI\'li:
AUTOMOBILE,
includinq
ollmed, hired
and non-owned
auto~o:biles •
(3) COMPREHENS lVE
GENERAL
LIABILITY •
including
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»odHy Inj ury
Property Damage
Bod.ily Injury
Property Da-rnage
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MINIMUM LIMITS OF LIABILITI
Statutory
$1,000,000 ea. person
$l~OOO,OOO ea. occurrence
$1,000,000 ea. occurrence
$1,000,000 ea. person
$1,000,000 ea. occu~rence
$1,000,000 aggregate
$1,000,000 ea. occurrence
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products and
completed operations,
broad form contractual,
and personal injury~
(4) PROFESSIO!;AL LIABILITY $1,. ODD, ODQ
I'OLICX
iii4 FFIENDS' contractor ror the Project shall mair.tain
the following policy or policies of insurance with
the followihq li!r.its and coverages:
M!NIMUM LIMITS OF LIABILIty
(l) WORKER'S COMPENSATION Statutory
(2) COMPREHENSIVE
AUTOMOBILE,
including
owned, hired
and non-owned
automobiles.
Bodily rnjury
propert y Damage
$l,ODO~OOO ea. person
$1,000,000 ea 4 occu~rence
$1.000,000 ea. occurrence
(3) COKPREHENSIVE Bodily Inj1.:ry $1,000,000 ea. person
$1,000,000 ea, occurrence
$l~OOO,OOO aggregate
$1,000,000 ea. occurrence
GENERAL
LIABILITY,
includinq Property Damage
product 5 and
completed operations~
b:t;oad .ferm contractual,
and persona 1 in j \! ry .
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Required Clauses. Insurance shall be in full force and
effect before the term of this Lease may commence~ With
the eKception of the Proj ect arehi teet's professional
liability insurance, every other insurance policy
required by this Lease shall contain the fo11o~ing
clauses:
i. ITThis insurance shall not be cancelled, 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-.
ii. -All rights of subrogatio~ 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 emplo}~ent Qr appointment.-
iiL "The CITY OF PALO ALTO is added as an acld.i tional
insured as respects operations of the named insured
at or from the Chilclren's Theatre and the premises
leased from the Clrl'~ OF PALO ALTO.IT
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iv. -It is agreed that any jnsurance maintained by the
CITY OF PALO ALTO vill apply in excess of. an~ not
contribute to, insurance prcvided by this policy.-
16. EVIDENCE OF INSL~CE COVERAGE; CHANGES
A. certificates of Insurance. FRIENDS agrees to c:lE'!posit
with CITY's Real Property Manager, before the effective
data of this Lease, certificates of insurance necessary
to satisfy CITY that the insurance provisions of tt:.is
Lease have been complied 'ifo'ith, ar.d to ensure that such
insurance is kept in effect. and the certificates
therefor on deposit ~ith CITY, during the entire term of
this Lease. Should FRIENDS not provide evidence of such
required coverage at least three (3) days prior to the
expiration of any existir.g insura~ce coverage, CITY may
purchase such insurance, on behal f of and at the sole
expense of FRIENDS, to providp. six-months coverage.
B. Review of CoyeLage. CITY shall retain the right at any
time to revie'W the coverage~ form and amount of the
insurance required hereby. If. in the opinion of the
Risk Manager, the insurance provision~ in this Lease do
not provide adequate protection for CITY and for members
of the public using the Children's Theatre or the
PREMISES, CITyrs Real Property Manager may require
FRIENDS to obtain insurance sufficient in coverage, form,
and amount to provide adequate protection as determined
by the Risk Ma.nager. CITY's reqoJirernents shall be
reasonable and shall be designed to ass'-!re protection
from and against the kind and extent of risk vhich exists
at the time a change in insurance is required.
c.
D.
Changes in Coverage. CITl' 's Real Property Manager shall
notify FRIENDS in writing of changes in the insurance
requirements; if FRIENDS does not deposit copies of
acceptable insuLance pol icie5 'Wi t!"-~ CITY incorporating
such chanqes within sixty (60) days of receipt of such
notice, or in the event FRIENDS fails to ensure that the
required insurance coverage is :maintained in effect, this
Leas£! shall be in default ..... ithout f~rther notice to
FRIENDS. Such failure shall constitute a material breach
and shall be grounds for i~~ediate termination of this
Lease at the option of CITY.
No Ljmit of Liability. The procuring of such required
policy or policies of insurance shall not be construed to
li:mi t FRIENDS' liabil i ty hereunder nor to fulfill the
indemnification provision and require!:'lents of this Lease.
Notwithstanding said policy or policies of insurance,
FRIENDS shall be obligated for the full and total amount
of any damage, injury~ or loss caused by or connected
with this Lease, 'lJ.'ith the con~t.ruction of the Project, or
with FRIENDS ' use or occupancy of the Children's Theatre
or the PREMISES~ as applicable.
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11. INDEMNITV
A~ FRIENDS' DUty to I:ru;h!mnifv CITY. E>.:cept as provided
under Subclause 17(8) belo .... , FRIENDS hereby 'Waives all
elahns, liability and recourse against CITY, including
the right of contribution for loss or damage of or to
pers~ns or property arisin~ from, growing out of or in
any way connected ~ith or related to this Le~se~ FRIENDS
hereb1 agrees to protect, indemnify, hold harmless and
defend CITY, its officers, agents, and employees, against
any and all ~laims, loss, liability, demands, damages,
cost, expenses or attorneys' fees arising out of the
operation or maintenance of the PREMISES or FRIENDS'
performance or nonperfo:r-mar-.cc of the terms of this Lease ..
including the construction of the project on the PREMISES
and ~ithin the Children's Theatre, In the even~ CITY is
named as co-defendant, FRIENDS shall notify CITY of sllch
fact and shall r(;present CITY in such legal action unless
CITY undertakes to represent itself as co-defendant in
such legal action, in which event FRIENDS shall pay to
CITY its litigation costs, expenses and attorneys' fees.
B~ CITY'$ DUty to Indemnify fRI~~ CITY hereby agrees to
protect, indemnify, hold harmless and defend FRIENDS, it
officers, agents and employees, against any and all
claims, losS, liability, demands, damages, cost .. expenses
or attorneys' fees arising out of CITyts negligent
per.fonnance or nonperforrr.ance of its obligations under
the terms of this Lease.
18~ ASSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED
Since CITy has relied on the specific background and
capabilities of FRIENDS in awarding this Lease, any mortgage,
pledge, hypothecation, encuw~rance, transfer, sublease, or
assignment (collectively referred to as ENCUMBR~VCE) of
FRIENDS' interest in the PREMISES or the Children's Theatre or
any part or portion thereof, is prohibited. Any att~mpted
ENCUMBRANCE shall be null and void and shall confer no right ..
title, or interest in or to this Lease.
19. DEFAULT IN TERMS OF THE LEASE BY FRIENDS
A. CITY's Remedies o~ D.§:fault. Except as provided under
Clau::::e 16 (C) or Clause 5 of the General Conditions
hereof, should FRIENDS default in the performance of any
covenant, condition, or agreemer.t 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:
91011' We CIO:ZW4O
i~ Terminate this Lease and all rights of FRIE~DS and
those Who claim und,er FRIENDS. stemming from this
Lease, shall end at thE time of such te~ination;
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At CITY'S sole option, ~ure any such def~ult by
performance of any act, including payment of money,
and the cost t'l1ereof, plus all reasonable
adminlstrative costs, shall become immediately due
and pa}'a:ble by FP.IENDS to CITY;
Seek an action or suit in equity to enjoin any acts
or things which may be unla,.,ful or in violation vi
the rights of CITY;
iv~ Seek a mandamus or other suit, i."lction or proceeding
at law or in equity to e~force its rights against
FRIENDS, including against FRIENDS I archi teet or
cor-tractor, arid to compel them t,o perform and car-ry
out their duties and obligations under the la~ and
under FRIENDS' covenants and agree~e~ts with CITY
as provided herein; or
v. Pursue any
specifically
Lease.
other remedy
provid.ed in
Civailable by
other cl auses
laW' or
of this
CUmulative ReIr,edies~ HOltrever, if'1 the event of a default
which can not reasonably be cured \rIithin sixty (60) days,
FRIENDS 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 nolo/' 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 proceeding to
enforce any right or exercise any remedy shell be brought
or takel'~ and then discof1tinued or abandoned. th-en, ~nd in
every such caee, CITY and FRIENDS 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 pf FRIENDS.. rn addition to a violation or
breach of any other prOVision of this Lease" FRIENDS
shall be considered to be in dafaul t under this Lease
should FRIENDS:
L voluntarily file cr have involuntarily filed
against it any petition under any bankruptcy or
insolvency act or law:
.U.. be adjudicated a bankrupt; or
iii. attempt to make a general assignment for the
benefit of creditors.
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20. NOTICES
All notices pursuant to this Lease shall be addressed as set
forth ~low or as either party may subsequently designa~e by
written notice and shall be sent through the United. States
mail, first class,. postage prepaid, certified with return
receipt requested.
TO: !:In
City Clerk
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94303
City of Palo Alto
Real Estate Division
250 Hamilton Avenue
Palo Alto, CA 94303
TO: FRIENDS
FRIENDS of the Children's Theatre
clo Suzan E. St€~art
1550 Middlefield Road
Palo Alto, CA 94301
Jonathan E. Rattner, Esq.
WARE , FREIDENRICH
400 Hamil ton }I.venue
Palo Alto, CA 94301
21. ATTACHMENT TO LEASE
This Lease includes the following exhibits, which are
expressly attached hereto and incorporated into this Lease:
Exhibit A General Conditions
EXhibit B -Depiction of Ch.ildren's Theatre
EXhibit C -Description of Project, including Constru.ction
Schedule
EXHIBIT D -Description of PREMISES
EXHIBIT E -Preliminary Agreement
The inclusion of clauses in Exhibit A (CENERAL CONDITIONS) is
not in any '.:ay intended to lessen the importance of thes!!!
clauses, but is merely done to enhance the organization of
various clauses and this Lease.
IN WITNESS WEEREOF, the parties have eXEcuted this Lease
the day and year first above written.
CITY OF PALO ALTO
Mayor
ATTEST:
City Clerk
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FRIEl: DS OF THE CHILDRENS I
THE~ ~-RE. INC.
E-y: __________ _
rts: ____________ _
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AP!'ROVf;D AS TO FORI!:
Asst. City Attorney
PROPERTY DESCRIPTION APPROVED:
Public Works/Enqineering
RECOMMENDED FOR APPROVAL:
Asst. City Manager
Director, Finance
Oiractor, Public ~orks
Director # Community services
Director, Planning an~
Community Environment
R~al Property Manager
Risk. Manager
Director, Arts and Culture
Director, Children's Theatre
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OEFINrrrONS
EXHIBIT A
GENERAL CONDITIONS
CITY shall mean the City Council of the City of Palo Alto l a
municipal corporation4
'rne 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 CIT¥. Should these positions be eliminated or the title
changes, it is understood and agreed that such references
shall be considL~red to be to the new title for renamed
positions or to the replacement official designated with the
responsibilities of any eliminated position.
2. CORPORATE AUTHoRrT~ , LIABILITY
If FRIENDS is is corporation, each individual signing this
Lease on behalf of FRIENDS represents and warrants that;
A. he is duly authorized to do so in accordance with an
adopted Resolution of FRIENDS' Board of Directors or in
accordance with the Byla~s of the corporation; and
B. FRIENDS is a duly qualified corporation authorized to do
business in Santa Clara county~
3. TIME
Time is of the essence of this Lease.
4. PERMITS AND LICENSES
FRIENDS sha.ll be rl:!guired to obtain any and a:ll permits and/or
licenses which may be required in connection with the
operation of~ and any apprcved FRIENDS' construction upon~ the
PREMISES or the Children's Theatre as set forth in this Lease.
5. MECHANICS LIENS
r.
FRIENDS shall at all time indemnify and save CITY harmless
from all claims for labor or materials supplied in connection
vith the Project, including construction, repair~ alteration,
or installation of structures, improvelllents, equipment, or
facilities .... ithin the Children' s Theatre and the PRE.M.ISES, and
from the cost of defending against such claims~ including
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at.torneys~ fee-g. FRIENDS shall provide. CI1'Y \r{ith at least ten
(10) days -written notice prior to col't.ltlenceI:'lent of any ....-ork
which could. qive rise to a meChall.ics 1 ien or stop notice.
CITY reser .. es the right to enter upon PREMISES and the
Children's 'l'heatre for the purposes of posting Notices of Non
Responsibility.
In the event a lien is imposed upon the Children's Theatre or
the FR£M.ISES as a result of such constr<.l.cticf'., repair l
alteration, or installation, FRIENDS shall either:
A.
B.
c.
Record a valid Release of Lien; or
Deposit sUfficient cash .... it.n CITY to cover the alrlount of
the claim on the lien in question and authorize payment
tCl tbe extent of said deposit to an} subsequent judgE>'ment
holder that may arise as a matter of public record fro~
litigation with regard to lienholder claim: or
Procure and record a bond in accordance 'With Section 3143
of the California Civil Code, ~hich trees the PREKISES
from the claim of the lien from any action brought to
foreclose the lien.
Not-.. ithstand.inq Clause 19 of this Lease CDEF1\ULT), should
FRIENDS .fail to accomplish one of the three (3) optional
actions within fifteen {I5) d~ys after the filinq of such a
lien, the Lease snall be in default and ~ay be subject to
immediate termination~
6. LEASE ORGANIZATION AND RULES OF CONS1'RUCTION"
+
Words of the mascul ine gender shall be deeme,j and construed to
include correlative 'Words of the feminine and neuter genders.
Unless the context othendse indicates, ""'ords importing the
singular nUlllber shall include the plural number and vice
versa, and ~ords importing persons shall include corporations
and associations, including public bodies, as ~el1 as natural
persons.
~he terms "hereby", ~hereof", nhereto n , ~herein·, "hereUnder
and any similar terms, as used in this Lease z refer to this
Lease~
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 secti.ons of this Lease t,ave
been inserted for convenience of reference only, are not to be
considered a part hereof and shall not in any ~ay modify or
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restrict any of the terma or provisions hereof or be
considered or given any effect in construing this Lease cr any
provision hereof in ~scertaininq intent, if any question ot
intent shall arise.
AMENDMENTS
This Lease sets forth all of the agreeI:lents and understandings
of the parties and any Jr.odifications must be written and
properly executed :by bott~ parties.
8. UNLAWFUL USE
FRIENDS agrees that no iroprovements sh311 be erected, placed
upon, operated, nor maintained ~ithin the Children's Theatre
or the PREJ;ISES, nor any bus iness conducted or carried on
therein or therefrom, in violation of the terms of this Lease,
~!'" of any regulation. order of la",~, statute~ or ordinance of
a governmental agency having jurisdiction over FRIENDS' use of
the Children's Theatre or the PREMISES.
9. NONDISCRIMINATION
FRIENDS and its employees shall not discriminate against any
person hecause of race, color, ancestry, age, sex, national
origin or physical handicap. FRIENDS shall not discriminate
against any employee or applicant for employment because of
race, color, religion, ancestry, sex, age, national origin or
physical handicap. FRIENDS covenants to meet all requirements
of the Palo Alto Municipal Code pertaining to
nondiscrimination in employrtent. If FRIENDS is fcund in
violation of the nondiscrimination provisions of the State of
California. Fair Employment Practices Act or similar provisions
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 tr,e equivalent federal
agency or officer, it shall thereby be found in material
breach of this Lease. CIT'i shall the~ have the power to
cancel or suspend this Leas~ in ...,rlole or in part pu.rsuant to
the terms of this Lease.
10. INSPECTION
Authorized CITY employees and agents shall have the right at
all reasonable times to inspect the Children's Theatre and the
PREKISES to determine if the prOVisions of this Lease are
being complied with.
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12.
SUCCESSORS IN INTEREST
Unless otherwise provi~ed in this Leas€, the terms, covenants,
and conditions contained herein shall apply to and bind the
heirs l successors, executors, ~dministrators, and assigns of
all the parties hereto, all of 'Jr.'hom shall be jointly and
severally liable hsreunder.
CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE)
If either party hereto shall be delayed or prevent~d from the
perfornance of any act required hereunder by reason of acts of
God, ~estrictive governmental la~s or regulations, or other
cause wi thOl.~t fault and }:leyond the control of the party
obligated (financial inability excepted), performance of such
act shall be excused for the period of the delay and t.he
period for the perfor.nance of any such act shall be extended
for a period equivalent to the period of such delay.
13. PARTIAL INVALIDITY
If any terw, covenant~ condition, or provision of this Lease
is determined to be invalid, vvid, or unenforceable, ~y a
court of competent jurisdiction, the remainder of the
prOVisions bereof shall remain in full force and effect and
$hall in no vay be affected, impaired .. or invalidated thereby.
14. WAIVER OF RIGHTS
The failure of CITY or FRIENDS to insist upon strict
per~ormance of any of the te~s, covenants, cr conditions of
this Lease sball not be deemed a .. aiver of any right or remedy
that CI'l'Y or FRIENDS may have, and shall not be deemed a
waiver of the right to require stIict performance of all the
terms, covenants, and conditions of the Lease thereafter, nor
a waiver of any remedy fer the subsequent breach or default af
any term, covenant j or conditiDn of the Lease.
lS. COSTS OF SUSTAINING AN AC7ION FOR BREACR OR DEFA~LT
In the event either CIT'f or FRI£NDS commences legal action
against the other claiming a breach or default of this Lease~
the prevailing party in such litigation shall pe entitled to
l-ecover from the other cost of sustaining such action,
includin9' reasonable attorneys I fees; as l'nay be fixed by the
Court.
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16. RESERVATIONS TO CITY
The PRDfIS£S are subject to anr and all existing easements and
encuml:l-r-ances. CITY reserves t.he rignt to i:nstall, l~y,
con$truct~ mai~tain. repair, and operate such sanitary sewers,
drains, storm water se~erg. pipelines, manh~les, and
con..'"1ections; water, oil, and gas pipel ines: telephone and
telegraph pcwer lines: and the applications and appurtenances
necessary or convenient for connection therevith, 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, througt'l.,
across~ and along any and all portions of the PREMISES. No
right reserved by CI~~ in this clause shall be so exercised as
to interfere unreasonably 'With FRIENDS' construction
hereunder, and shall be coordinat.ed, to the e~tent reasonably
possible, with the construction of the Project.
CITY agrees that rights granted to third parties by reason of
thiz clause shall contain provisions that the surface of the
land shall be restored as nearly as practicable to the
oriqinal condition upon the completion of any constructic~.
11. DISPOSITION OF ABANDONED PERSONAL PROPERTY
If FRIENDS abandons the PREMISES or is dispossessed thereof by
process of law or otherwise, title to any personal property
belonging to FRIENDS and left on the PREMISES forty-five (45J
days after such abandonment or dispossession shall he deemed
to have been transferred to CITY. CITY shall have the right
to remove and to dispose of suc~ property without liability
therefor to YBIENDS or to any person claiming under FRIENDS,
and shall have no need to account therefore4
18. QUITCLAIM OF FRIENDS'S INTEREST UPON TERMINft.TION
Upon termination of this Lease for any reason t including but
not limited to tera-=ination because of default by FRIENDS.
FRIENDS shall, at CITY'S request execute, acknoW'ledge and
deliver to CITY within five (5) days after receipt of written
demand thereof, a good and sufficient deed ~hereby all rights,
title, and inte~est of FRIl::NDS in the PREMISES and the
Children's Theatre are quitclaimed to CITY. Should FRIENDS
tailor refUse to deliver the required deed to CITY, CITY may
prepare and record a notice reciting the failure of FRIENDS to
execute~ acknowledge and deliver such deed and said notice
sha.ll be conclusive. evidence of the termination of this Lease,
and of all right of fRIENDS or those claiming under FRIENDS in
and to the PREMISES and the children's Theatre.
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19. CONFLICT OF rNTE~ST
20.
FRIENDS warrants and covenants that no official or employee of
CITY nor any business entity in \.,rhi,=h any official or employee
of CITY is interested: (1) has been employed or ret~ined to
solicit or aide in the procuring of this Lease; (2) will be
employed in the performance of this Le~se without the
divulqence of such fact to CITi'. In the event that CITY
determines that the employment of any such official, e~ployee
or business e~tity is not compatible with such official's or
employee'S duties as an official or employee of CI7Y, FRIENDS
upon re~~est of CITY shall immediately ter~inate such
employment. Violation of tt'-ds provision constitutes a serious
breach of this Lease and CITY may tenni71ate this Lease
pursuant to the terms hereof as a result of such violation~
HAZARDOIlS MATERIALS
A. Definition. As used herein, the term NHazardou,e;
Materials" means any substance or material 'Which has been
Qete~ined by any state, federal or local governmental
authority to be capable of posing risk of injury to
health., safety, and property, including petroleuIll 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 Control Board, the U. S. Department of Labor, the
California Department of !ndustrial Relations, the
california Departnent of Health Services, the California
Health and Welfare Agency in connection 'With the Safe
Wate.r ~nd Tox-ie Enforcement Act ot 1986., the u. S~
Department of Transportation, the U. S. Department of
Agr-icul ture, the U. S. Consumer Product Safety
commission, the U. S. Departtllent of Health ~nd Human
Services, the U. S. Food and Drug Administration or any
\)ther governmental agency nor.{ or hereafter authorized to
regulate materials and substances in the envir:mment.
Without limiting the generality of the foregoing, the
term ·Ha2'.ardous Materials n shall include all of thos'l
materials and substances defined as ntoxic materials· in
Sections 66680 through 656B5 of Title 22 of the
California Code o~ Regulations, Division 4, Chapter 3D,
as the same may be amended from time to time.
B~ FRIEND's Use of PRE.MI.SES and CHTLDR.f:N'S THEATRE. During
the term of this Lease~ FRIENDS shall abide and be bound
by all of the following requiremer.ts:
i. FRIENDS shall comply ~ith all laws now or hereafter
in effect relating to the use of Hazardous
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Materials on, under or about the PREMISES and U".e
Children's Theatre; and FRIENDS shall not
contaminate the PREMISES or the Children's Theatre,
or their subsurfaces, with any Hazardous Materials,
ii. FRIENDS shall restrict its use of Hazardous
Materials at the PREMISES and the Childrents
Theatre to those kinds of materials that are
normally used in constructing the Project,
Disposal of any Hazardous Materials at the PREMISES
or the Children's Theatre is strictly prohibited.
Stor-age of sv.ch per-missible Ha!ard<:lus Materials is
allowed only in accordance ~ith all applicable laws
now or hereafter in effect. All safety and
monitoring features of any storage facilities shall
be approved by CITYls Fire Chief in accordance with
all la.,s.
iii. FRIENDS shall be solely and fully responsible for
the reporting of all Hazardous Materials releases
to the appropriate public agencies; vhen such
releases are caused by or result from FRIENDS I
activities on the PREMISES or at the Childr-en' s
Theatre. FRIENDS shall imm~diately inform CITY of
any reI ease of Ha z.ardous Material s. , • .-hether or not
the release is in quantities that ~ould
otherwise be reportable to a public agency.
iv. FRIENDS sh~ll be solely and fully responsible and
liable for its releases at the PREMISES or the
Children's Theatre; or into CIT~ls se~age or storm
drainage systerns~ FRIENDS shall take all necessary
precautions to prevent any of its Hazardous
Materials from ent.ering j nto any stor-m or sewage
drain system or from being released on the PREMISES
or at the Children's Theatre. FRIENDS shall remove
releases of its HaZardous Materials in accordance
with all 1a..-s. In addition to all other rights and
remedies of CITY hereunder I if the release of
Hazardous Materials caused by FRIENDS is not
removed by FRIENDS within ninety ,9(0) days after
discovery by FRIENDS, CITY or any other-thirc!
party. CITY may pay to have the same removed and
FRIENDS shall reimburse CITY for such costs ~ithin
ten (10) days of CITY's demand for payoent.
V. FRIENDS shall protect; defend, indemnify and hold
harmless CITY from and against all loss, damage, or
liability (including all foreseeable a,nd
unforeseeable consequential damages) and expenses
(including, "lI'ithout limitation, the cost of any
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cleanup and r5Hnediation ot Hazardous MaterialsJ
which CITY may sustain as a r~sult of t,he presence
or cleanup of Haza::..~dous Materials on the PRE.1(ISES
or at the Children's Theatre that is caused by
FRIENDS or otherwise arises in connection ~ith, or
as a result of, this Lease or the Proj ect to be
ccnstructe~ under the Lease, e:xcept as provided
under the third sentence of Clause 9 {C) of this
Lease.
FRIENDS' obligation
the e~~iration or
Lease.
under this clause shall survive
earlier termination of this
21. ALL COVENANTS AR£ CONDITIONS
All provisions of the Lease are expressly made conditions.
22. PARTIES OF INTEREST
Nothing in this Lease, express or implied, is intended to, nor
shall be construed 't.o, confer upon or give to any person or
party other than CITY and FRIENDS any rights, r-amedies or
claims 'Under or by reason of this Lease or any covenants,
condi tion or-sti pulations herEof. All covenants,
stipul.ations, promises and agreements in this Lease shall be
for the sole and exclusive benefit of CITY and FRIENDS.
23" RECORDATION OF LEASE
Neither CITY nor FRIENDS shall record this LEase; however, a
short-form memorandum of Lease may be recorded at CITY's
request.
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EXHIBIT :IIl
LEASE BETWEEN CITY OF PALO ALTO
AND FRI~S OF THE CHILDREN'S THEATRE
PaR PROJECT TO IMPROVE THEATRE (PHAse 2)
THIS LEASE is made this day of ~
19 ___ by and bet~een the City of Palo Alto, a California municipal
corporation ("CITYIl) ~ and the Friends of the Children's Theatre, a
California nonprofit corporation (~FRIENCS~)~
2.
3.
RECITALS
CITY owns certain improvements co~~only ~~own as the Palo Alto
Children's Theatre (with su=h improvements hereinafter
referred to as the "Children's Theatre lT ), as well as the
underlying real property~ located in Palo Alto, California,
and. shown on Exhibit IIB" attached hereto and incorp·::>rated
herein by this reference.
FRIENDS intends to benefit cITY and the public by providing
CITY with the gift of a larger and improved Children's
Theatre. Accordingly. under this Lease FRIENDS desires to
construct an addition to the Children's Theatre consisting of
an outdoor platform and production area adjacent to tne
theatre, at FRIENDS' sole expense and as described in Exhibit
·e· attached hereto and inco~porated herein by this refe,ence
(the ·project-). Once completed, FRIEN[IS intends to give the
improvements constructed under the Proje~t to CITY.
The Project is the second phase (nphase 2-) of a two-phase
project undertaKen by FRIENDS to improve the Childrents
Theatre~ The first phase of the project (-Phase 1-),
commenced 'When FRIENDS and CITY entered into a lease on
19 Under said lease, FRIENDS has lis]
installed an ai~onditioning system in the children's
Theatre, ~~1Dodeled an adjacent storage area and constructed an
addition to the theatre consisting of a library~
Under this Lease, CITY d-asires to lease certain property
adjacent to the Children's Theatre (the -PREMISES")~ so that
FRIENDS may proceed ...... ith the construction of Phase 2 in
accordar.ce with the terms and conditions set forth belo ... ~ The
PREMISES are more particularly described and shovn on Exhibit
-0" attached hereto and incorporated herein by this reference.
5~ The parties hereby acknowledge that FRIENDS is a private,
nonpro!it corporation operating separately and independently
from CITY. FRIENDS intends to C0nstruct the project
privately. under its sole control. subject only to the terms
and conditions set forth belo~.
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NOW r THEREFORE, in cor.sidez::'ation of these premises, the
parties hereto mutually agree as follows:
PURPOSES
The purposes of this Lease are A) to a] loW' FRIENDS to
construct the Project and give CITY a larger and impr-oved
Children's Theatre tor the benefit of CITY and the public; B}
to provide for FRIENDS' sole management of the PREMISES and
construction of the Project during the term of this Ledse; C)
to provide for completion to CITY's satisfaction of all ~ork
required to fi!l.ish the proj ect; and O} tc provide for the
PREMISES., as improved by the Project, to revert to C!TY upon
termination of this Lease~
2. PREMISES
S\ll:Iject to the terms and c·:mditions set fort.h in this Lease,
CITY hereby lea~es the PREMlSES to FRrENDS~ FRIENDS hereby
leases the PREMISES from CITY for the purpcse of constructing
the Project as described in Exhibit ~cn4 Except as specifi
cally provided in Clauses 8 CAl and 9 (C) of this Lease, FRIENDS
recognizes that it will undertake const~ction on the PREMISES
subject to the property's E~isting condition.
3. RIGHT OF ENTRY A.~D ACCESS FOR CONSTRuCTION OF PROJECT
Subject to the terms and conditions set forth in this Lease~
CITY hereby grants to FRIENDS the nonexclusive right to enter
and access to the Children's Theatre, or any portion thereof,
as needed for the sol~ purpose of constructing the Project on
the PREMISES. In exercising these t'ights~ FRIENDS shall make
best efforts to cause the least interruption possible to the
Children's Theatre progra~~ing and to CITY's staff operations
related thereto4 Prior to any disruption of CITY services by
FRIENDS for such activities, FRIENDS shall notify the involved
CITY departments or users of the affected areas at least
forty-eight (48) hours in advar.ce in crder to minimize
disruption of CITY's operations. Regardless of the terms of
this Lease, FRIENDS r right to enter and access to the
Children's Theatre under this clause shall terminate once the
Project is constructed and accepted by CITY as complete in
accordance with Clause 9(G) of this Lease.
4. REQUIRED USE
In furth4;!rance
uses shall be
PREl<ISES:
of the purposes stated above, the following
provided j permitted or prohibited on the
A. Required Use. FRIENDS shall use the PREMISES only as
necessar.i to construct the Proj ect. FRIENDS acknowledges
that the Children's Theatre shall be subject to CITY's
continued use and operation, to the extent such use is
reasonably feasible during the term of this Lease.
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B.
TERM
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Restricted Uses.. E}(cept as the parti-es :clay ctl1erwise
subsequent.ly agree, the above listed use shall be the
only use permitted upon or from the PREMISES by FRIENDS.
The term of this Lease shall continue until the completion of
the Project as provided unde~ Clause 9(G) hereof~ but in no
event lonqer than eighteen (18) :nonths.. The term shall
commence the first day of the month following the execution of
the l~ase by CITY. The term shall be subject to renegotiation
between the parties should the Project's co-rnpletion be celayed
~or any reason beyond the reasonable control of FRIENDS ..
6. TERMINATION OF PRIOR AGRE~~ENTS
This Lease supersedes all other prior leases or agreements
entered into by CITY for use of the PREMISES, including the
Preliminary Agreement bet\ofeen CITY and FRIENDS dated
PREMISES
Aqreement
herein by
1991, concerning FRIEND's option to lease the
(the ·prelimina.ry .Agreementl!l). The Preliminary
is attached hereto a~ Exhibit "En and incorporated
this reference for inf~rmational purposes only.
7. CONSIDERATION
In consideration for the lease of the PREMISES and access to
the Children's Theatre, FRIENDS agrees to construct -the
Project at FRIENDS' expense. and under FRIENDS' sole control,
according to the terms and condition of this Lease~
8. MAINTENANCE AND REPA!R
A~ CITY's Duties. During the term of this Lease, and except
as otherwise provided in Clauses 8(B). 8(C} and 9(e)
hereof, CITY shall be responsible only for maintenan~e
and repair that is required for continued operation and
maintenance of the Children 's Theatre and its support
eystems~
B. FRIENDS' Duties. FRIENDS agrees during the term of this
Lease to maintain the PR£~ISES. and during any related
construction activities to maintain those portions of the
Children's Theatre affected by such activities, in a
commercially reasonable and safe man~er to the complete
satisfaction of ~ITY and in compliance with all
applicable laws. FRIENDS furtr.er agrees to provide
app~oved containers for trash and garbage generated by
the Project's construction and to lawfully dispose: of all
such trash and garbage. CITY shall have the right to
enter upon and inspect the PREMISES and the Children's
Theatre at any time to determine 'ioIhether FRIENDS is
complyin9 with this Lease and whether the site is beinq
maintained in a reasonably safe manner. Not~ithstanding
the above provisions. but subject to the third sentence
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in Clau$e 9{C) hereof, FRIEKDS shall also be resp~nsible
tor damage or r~pair to tbe PREMISES or the Childrents
Theatre, including any ~sso~iated support systems,
resulting from FRIENDS' co~struction of the Project or
FRIENDS' other use of the PREMISES and the. Children's
Theatre and not occasioned by normal wear and tear.
FaiJure to Maintain. If FRIENDS fails to maintain or
make repairs or replacements as requi red herein,. CITY may
notify FRIENDS in ·.'riting of said failure.. Should
FRIENDS fail tv coz-rect the situation 'Within a rea.sonable
time thereafter, as established by CITY I s city Manager or
his designee, CITt: 's Real property M3.nager may lllake., or
cause to be made, the necessary corrections and the cost
thereof, includin~ but not limited to the cost of labor,
~aterials., and equipment and a reasonable charqe for
administration and o .... erhead, shall be paid by F'RIENOS
~ithin ten (10) days of receipt of a statement of said
cost from CITY's Real Property Manager. CITY IDay, at its
option, choose any other remedies available herein or by
law to sec~re such payment.
9~ CONSTRUCTION B~ FRIENDS AND ACC£PT~~CE BY CITY
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A. Minimum construction and Tirr.ing. COlnlrlencing on or about.
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FRIENDS shall in an efficient and 'Workmanlike manfler
cause the Project. as previously approved by CITY under
the Preliminary Agreement, to be constructed on the
PREMISES, in substantial compliance vith the approved
time schedule for constructing the Projectr
B. pevelopment Plan and construction Standards. All design
and construction of the Project by FRIENDS shall conform
..,ith the "Development Plan:5 1r and "Construction Drawings·,
as defined and previously approved :by CITY under the
Pre 1 iminary Agreement~ and shall meet all other
requirements contained in this Lease. FRIENDS shall at
all times comply .... ith CITY'S regulations governing
construction noise controls under ":hapter 9.10 of the
Palo Alto Municipal Code and any cons~ruction dust
control mitigation measures imposed on the Pr-oj ect by
CITY.
C. Resoonsibility fo_r-~9.rk. FRIE.NDS shall be responsible to
accomplish all associated __ ork required to finish the
Projectr FRIENDS shall cot'.ply IJith all new code
requirements which are triggered because of the work at
the Children's Theatre and on the PREMISES, as well as
all conditions CITY has imposed on the Project during its
approval process. Preexisting conditions in the
Children'S Theatre or O~ the PR~~ISES ~hich are
discovered during (:but not caused by nor resulting from)
the design or constructjor. of the Project, and which must
be remedied for health and safety reasons or because CITY
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is othe.rwise required by law to remedy such conditions,
regardless of .... ·hether FRIENDS ccnstructs the Proj ect,
shall be ccrrectej in a timely fashion by CI'r'i and
coordin~ted vith th~ Project as appropriate. Except as
provided in the precedinq sentence, FRIE:NlJS shall be
responsible {or upgrading th-e plumbing. electrical, or
.any other support. systems in the Children I s Theatre which
is necessary as a result of th~ project's construction in
ord.er to comply w"i th all code requirements or the
Project's conditions of approval. FRIENDS shall further
be responsible for any asbestos abatement or cont~ir~ent
issues that may arise as a result of che construction of
the Project to the exten~ required under all applicable
building and safety codes. During construction, CITY's
PUblic Warks Department Facilities Management st~ff, in
coord.ination 'With FRIEND's project I!lanager, .shall W"ork. to
ensure that the Project, the Children's Theatre and the
PREMISES can be ~ffectively maintained after the Project
is completed and given to CITY upon termination of this
Lease; provided, how.'ever. that in taking any such action,
CITY shall not require that the project be constructed in
a manner materially di fferent from the approved
Development Plans and Construction Drawings.
D. warranty and Guaranty Requirements. FRIENDS shall
include standard CITY requirements in all equipment
purchases and construct.ion contracts regardi:ng varranties
and workmanship guarantees tor the projec~. A list of
such req~irements shall be provided to FRIENDS by CITY
upon request .
.E. Constructiop_~. Structural, !r,echanical, electrical,
and plumbing construction shall be done by contractors
licensed in the State of Cal ifornia and under contract to
FRIENDS or FRIENDS I contractor. Selected finishing work,
such as paL~ting and cosmetic detailing tr.at do not
require licensure to perion la",fully II'lay be completed by
in-kind donations and volunteer labor using appropriate
materials. FRIENDS I project l!',anager shall oversee all
such work, concerning its proper coordination and
effective co~pletion as required under this Lease.
F ~ CITY I S Approval. All s'tructur-es; improvements, .or
facilities under the Project shall b~ constructed,
erected, altered, or Jr,ade en the PREMISES in compliance
vith the approved Development Plans and the ConstrUction
Dra~in9s. Any conditions relating to the manner, method~
design and construction of said structures~ i~proveroent&
or facilities established under the Project approval
process shall be conditions of this clause as it they
~ere originally stated herein.
G. Completion of PrQject;. _____ ~..Dd Accepta:"'lce .by Citro Upon
completion of construction of any substantial improvelllent
of the flREM!SES, FRIENDS shall submit to CITY I S Real
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Property Manager a Certificate of Inspection, verifyinq
that the const~ction ~as completed in conformance ~ith
Title 24 of the California code of Regulations for non
residential construction.
The ent.ire Pl'"oje~t shall be deemed completed for purposes
~~ this Lease at such ti~e as all of the rolleving have
occurred:
i. FRIENDS' architect has deliverec:! a written
statement to CITY stating that the Project has been
substantially completed in accordance ~ith the
specifications and Construction Dra~inqs;
ii~ FRIENDS has obtained all necessary CIT¥ inspectio~s
of ancl approvals for the Project, and CITY is
lawfully entitled to occupy such space under a
certificate of occupancy;
i1i4 Representatives of CITY and FRIENDS have completed
a "walk-through" inspection of the Projeot# and all
major defects and inco:mplete items that materially
impair use of the space have been remedied and a
"punch-list-of minor defects has been prepared for
prompt repair and co~pletion by FRIENDS:
iv. All sites have been s~ept broom clean and all
rubbish has been removed by FRIENDS;
v. FRIENDS has made the space available to CITY for
occupancy: and
vi. CITyrs City Manager has confirmed in writing to
FRIENDS that all requirements under this clause
have been satiSfied and that the Project is
complete for final acceptance by CITY. Upon
FRIENDS' receipt of such notice, this Lease shall
terminate. The PREMISES; and all improvements
constructed thereon under this Lease; s1:all then
become the sole property of CITY.
FRIENDS shall thereafter ensure that FRIENDS' contractor
will repair and completer to CITY's satisfaction, all
items on the punch-list within sixty (60) days following
the termination ot this Lease, as provided herein.
lO~ FRIENDS' ASSURANCE OF CONSTRUCTION' COMPLETION
Prior to commencement of this Lease and construction of the
Project, FRIENDS shall furnish CITY's Director of Finance with
a specific construction schedule and evidence that assures
CITY that sufficient funds will be available to complete the
Project. The phrase -sufficient funds" for purposes of this
Lease means the total amount of all actual construction costs
for all the improvements under the project, as 6et forth in
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FRIENDS' contractor's bid for the Project, plus such
contractorrs overhead and profit, plus an additional ten
percent (10\) of such cost as a contingency. Evid~nce of such
assurance shall take all of the forms set out belo~:
A. Pertonnance bond, supplied by FRIENDS I contractor or
contractors, to tully guarantee said contractor's
constr1lction of the Project; provided, hovever, that said
bond is issued -with both FRIENDS and CITi' named as
ber.eficiaries;
B.
c.
910717~~
Evidence of FRIENDS' deposit of the total amount of
sUfficient funds for the Project, as defined herein, less
twenty percent (20%) of such a:rnount, into interest
bearin9 accounts or investments agreed upon by FRIENDS
and CITY, with FRIENDS named as sole beneficiary of such
funds, and ~ith FRIENDS retaining the sole discretion to
expend such funds to construct the Project, subject only
to the folloW'ing sentence: Before ~greeing to
substantial change orders to the Project l FRIENDS shall
first obtain CITyts ~ritten approval of any such ch~nqe
o:t"ders: and
Evidence of FRIENDS· deposit of the remaining twenty
percent (20t) of said sUfficient funds into an interest
bearing join't account or j oint investment agreed upon by
FRIENDS arid CITi, with such account requiring the
signatures of authori~ed representatives of both FRIENDS
and CITY for disbursernents~ subject only to the following
sentences: At such time as FRIENOS has currently payable
invoices for the Project ~hi~h exceed the amount payable
therefor from the accounts or investments described in
Clause 10CB) above, CITi will take the steps necessary to
expedi te its approval process so t.hat funds can be
disburse~ from the parties' joint account or investment
which, when added to the balance re~aining in the
accounts or investments described in Clause 10(S) above,
will be sufficient to satisfy FRIENDS' current payables.
Thereafter ~ in order to complete the Proj ect i'RIEN'DS may
reque~t CI1'Y approval of dj sbursements from said jOint
account or investment in order to make payments on
subsequent invoices, and CITY shall use its best efforts
to process said requests for approval in a manner which
permits FRIENDS to remain current on its obI igations.
Should this Lease terminate tor any reason, betore the
expenditure of a.l1 the funds from said joint accou!'tt or
investment, CITY shall be entitled full rights to and
ownership of such funds; provided, hO\olcver ~ that CITY
shall thereafter expend the funds only for purposes of
actual construction of the Project~ or any portion
thereot yet to be completed ~hen this Lease terminates.
Should any portior. of said joint account or investment
remain undisbursed follo\oling completion of the project as
provided under Clause 9{G) hereof, such remainder shall
be disbursed to FRIENDS upon r~quest.
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All bonds must be issued by 3 company q-.Jalified to do business
in the state of California and reason::bly acceptable to CITY 15
TreaGury Manager~ All bends and evidence of accounts,
investments or deposits shall be in a form reasonably
acceptable to CITY's Treasury Manager and CITY's City
Attorney~
DAMAGE TO OR DESTRUCTION OF PREMISES
A.~ paltl.!J;ge or Destruct,ion (M<;_Js.j,D9 Premises Unfit for Use.) In
the event the PREMISES or the Children's Theatre, or any
portion thereof, are de5t~oyed by any c~use that renders
the PREMISES or the Children' 5 Theatre unfit for the
purposes designated in Clause 4. {REQUIRED USE} and if the
PREMISES or the Childrenfs Theatre are so badly damaqed
that thay cannot be r~paireo. ""ithin ninety (90) days from
the date of such damage, either party :may terminate this
Lease by giving to the other party written notice within
ten (10) days of the occurrence of such damage.
B. Insured Partial pestruction. If the FREMISES or-the
Children's Theatre are partially destroyed by any cause
covered by FRIENDS I insurance policies required under
Clause '15 hereof. and the destroyed portion can be.
rebuilt or repaired ~ithin ninety (90) days from the date
of destruction, CI~Y shall repair the damage or
destruction 'With reasonable diligence. In such event,
this Lease shall remain in full force and effect.
c. Nen-Insured Ptrtial De~tructi~_Q. If the PREMISES or the
Children's Theatre are partially d€stroyed by any cause
not co .... ered by FRIENDS' insurance poliCies, but the
PREMISES or the Childre~'s Theatre, as applicable, can
still be used for the p'..1rposes designated in Clause 4.,
FRIENDS may, at is option, terminate this Lease unless
CIT"'i co-mm,e-n>::es re.building or repair of the destroyed
portion of the PREMISES or the Children's Theatre within
ninety ,90} da")'s from the date of destrl.lction. Such
termination by FRIENDS shall be accomplished by giving
CIT'S written notice of termination not sooner than ninety
(90) days ncr later than one hundred (~OO) Cl:ays following
the occurrence of such damage or destruction. This Leae.e
shall terminate on the date such notice of termination is
received by CIT'!. !f CITY accomplisha:s such repair or if
FRIENDS fails to exercise its option to terminate, this
Lease shall re~ain in full force and effect.
D~ Glass Breakage~ Glass breaKage shall not be deemed a
partial destruction ~ithin the meaning of this clause~
12. AS BUILT PLANS
Upon completion of any sllbstantial improvements under the
Project, FRIENDS shall provide CITyls Real Property Manager
with a complete set of 2'" x 36-- ) mil If.ylar reproducible
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-as built plans'" r-efle,=ting the a·::tual construction performed
by FRIENDS u~dcr this Lease ~ithin or upon the PrtEMISES.
13 • 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, as provided under Clause 9 (G) her-eoC and retlain upon
the PREMISES upon termination of this Lease.
14. U'IILITIES
CITY shall
dalinquency,
PREMISES and
be responsible for and shall pay, prior
all charges for utilities supplied to
the Children's Theatre.
to
the
15. INSTJRANCE
A. Minimum Limits and Forms of Coverage. FRIENDS shall be
responsible to ensure that the following insurance
coverage acceptable to CITY is maintained in full force
and effect through~ut th~ term of this Lease.
1. FRIENDS sh2ll11 tr,aintain the following policy or
policies of insurance .dth the following limits and
coverages:
poLICY
COHPl<EKENS IVE Bodily Inj ury
GENERAL LIABILITY,
includinq products
and ~leted Property Damage
operations, broad
form contractual,
and personal injury.
MINIMUM LIMITS OF LIABILITY
$1,000,000
$1,000,000
$l,OOO,OOG
$1,000,000
ea. person
ea. occurrence
aggreqate
ea. occurrence
i1. FRIENDS' architect for the Project
the following policy or policies of
the following limits a~d coverages:
shall maintain
insurance with
POLIcy
(1) WORKER'S COMPENSATION
(2) COMPREHENSIVE
AUTOMOBILE,
including
o'Wned, hired
and non-owned
automobiles.
(3) COIiPREHENSIVl!
GENERAL
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Bodily Injury
Property Damage
Bodily Inj ury
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MINr~ LIMITS OF' L!ABILITY
statutory
$1,000,000 ea. person
$1,000,000 ea. occurrence
$l~ODO,OOO ea. occurrence
$1,000,000 ea. person
51,000,000 ea. occurrence
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LIAB!LITY,
including Property Damage
pr-oducts and
completed operations,
broad ~orm contractual,
and personal inj I.lry.
$1,000,000 aggregate
$1,000,000 ea. occurrence
(4) PROFESSIONAL LIABIL!T¥ $1,000,000
iii. FRIENDS' contractor for the Project shall maintain
the follo~ing policy or policies of insurance yith
the following limits and coverages:
POLlex MINIMl.TM LIMITS OF LIABILITY
(1) WORKER'S COMPENSATION StatutClry
(2) COMPREHENSIVE
AUTOMOBILE,
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
(3) COMPREHENSIVE Bodily Injury
GENERAL
LIABILITY,
including Property Damage
products and
completed operations.
broad form contractual,
and personal injury.
$1,000,000 ea. person
$1,000,000 ea. occurrence
Sl,OOO,OOO aggregate
$1,000,000 ea. occurrence
B. Required Clauses. Insurance shall be in full force and
effect before the term of this L~ase may commence. With
the exception of the project architect's professional
liability insurance~ every other insurance policy
required by this Lease shall contain the follo~in9
clauses:
i. "'This insurance shall not be cancelle.d, limited in
scope of coverage or nonrenewed until after thirty
(30) days .. ritten notice has been given to the:
CITY OF PALO ALTO/Real Estate Division, PO Box
~0250, Palo Alto, CA 94303n~
iL bAll rights of SUbrogation are hereby wai .... ed
against the CITY OF PALO ALTO and the members at
the City Council and elective or appointive
officers or ernp~ ,:'yees j w'hen acting 'Within the scope
of their employ=ent or appointment.·
iiL I:iThe CITY OF PALO ALTO is added as an addi tiona!
insured as respects operations of the named insured
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at or from the Children's Theatre and the premises
leased from the CITY OF PALO ALTO.-
iv. UIt is agreed that any in~urance maintained by the
CITY OF PALO ALTO will appl:t in excess of I and not
contribute to, insurance provided by this policy.·
EVIDENCE OF INSURANCE' COVERAGE; CHANGES
A~ certificates of Insurance. FRIENDS agrees to deposit
with CIT¥'e Real Property Manager, b~fore the effective
date of ~his Lease~ certificates of insurance nEcessary
to satisfy CITY that the insurance provisions of this
Lease have been complied ~ith, and to ensure that such
insurance is kept in effect, and the certificates
therefor on deposit with CITY, during the entire term of
this Lease. Should FRIENDS not provide evidence of such
required coverage at least tr,ree (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 FRIENDS, to provide six-months coverage.
S. Revie .... of coverage. CI'I''f 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
'1ot provide adequate protection for CI'I'Y and for members
of the public using the Children l s Theatre or the
})REMISES, CITY' 5 Real Property ManagEr I!tay reg-I,lire
l"RIENDS to-obtain insurance suffici~nt in coverage, form,
ani amount to provide adequate protection as detendned
by ebe Risk Manager. CITY's requirements shall be
reasonable and shall be designed to assure protection
from and against the kind ~~d extent of risk whicn exists
at the time a change in insurance is required.
c. Changes in co .. :erage. CITY's F,eal Property Manager shall
notify FRIENDS in ""riting of changes in the insurance
re:q-~ireme.nts;-if FRIENDS does nat deposit copies of
acceptable insurance polie ies ·,.ii th CITY incorporating
such changes 'Within si)(ty (60) days of receipt of such
notice, or in the event FRIENDS fails ~o ensure that the
rsquired insura.nce coverage is maintained in effect. this
Lease shall be in default without further notice. to
FRIENDS. Such failure shall constitute a material breach
and shall be grounds for immediate termination of this
Lease at the option of CITY.
o. Ng !,imit of Liability. The procuring of such req\..'ired
policy or policies of insuranc2 shall not be construed to
limit FRIENDS' liability hereunder nor to fulfill the
indemnification provision and requirements of this Lea~e.
Not'Withstanding said pol icy or policies of insurance,
FRIENDS shall be obligated for the full and total amount
of any damage, injury, or loss caused by or connected
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with this ~ase, ~ith the const~uction of the Project, or
with FRIENDS' use or occupancy of the Cbildren's Theatre
or the PREMlSES, as applicable.
INDEMNITY
A_ FRIENDS' [)\ltv to Indemnify CIT¥~ Exo:::ept as provided
under Subclause 17(B) belo~. FRIENDS hereby ~aives all
claims, lia:bility and recourse against CITY, including
the right of contribution for loss or damage of or to
persons or property arising from, gro~inq out of or in
any ~ay connecte:1 ~itl'. or relatec! to this Lease. FF.IENDS
he~eby agrees to protect, indemnify, hold harmless and
defend CI'l'Y, its officers, agents, and employees, against
any and all claims, loss, liability, demands, damages,
cost, expenses or attorneys' feas arising out of the
oper-ation or maintenance c! the PREMISES or FR!ENDS I
performance or nonperformance of the terms of this Lease,
including the construction of the Proj ect on the PREMISES
and within the Children's Theatre as may be necessary.
In the event CITY is named as co-defenaant, FRIENDS shall
notify CITY of such fact and shall represent CIT¥ in such
legal action ~nless CITY undertakes to represent itself
as co-defendant in such legal action; in which event
FRIENDS shall pay to CITY its litigaticn costs, expenses
and attorneys' fees.
B. CITY's Duty to Indemnify FRIENCS. CITY hereby agrees to
protect. indemnify, hold harmless and defend ~ENDS, it
offiCers, agents and employees; against any and all
claims, loss, liability, demands, damages, cost, expenses
or attorneys 1 fees arising out of CITY I 5 negligent
performance or nonperformance of its obligations under
the terms of this Lease.
18. ASSIGNING, SUBLE'M'rNG; AND ENCUMEERING PROHIBITED
Since CIT¥ has relied on the specific background and
capabilities of FP.IENDS in awarding this Lease, any -mortgage,
pledge., hypothecation., encumbrance, transfer, sublease, or
assignment (collectively referred to as ENCUMBRANCE) of
FRIENDS' interest in the PREMISES or the Children'3 Theatre or
any part or portion thereof, is prohibited. Any attempted
ENCUMBRANCE shall De null and void and shall confer no right,
title, or inter~st in or to this Lease.
19. DEFAULT IN TERMS OF THE LEASE BY FRIENDS
A. CITY's RemecUes on Default. Except as provideeJ: under
Clause 16 (C) or Clau~e 5 of the Ceneorc,l Conditions
hereof, should FRIENDS defa;J,lt iT. the performance of any
covenant, condition, or agreeroent contained in this Lease
and such default is not corrected ~dthin sixty (60) days
of receipt of a notice of default from CITY, CIT¥ may:
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Terminate this Lease and all rights of FRIENDS and
those 'Who claim under FRIENDS, stemming from this
Lease, shall end at the time of such termination;
ii. At CIT"lIS sole option, cute any such de:!ault by
performance of any act. including payment of money,
and the cost thereof, plus all reasonable
administrative cests, shall become immediately due
and payable by FRIENDS to CITY;
i1i4 Seek an action or suit in equity to enjoin any acts
or things ~hich may be unlavful or in violation of
the rights of CITY;
iVa Seek a mandamus or other suit, action or p~oceedinq
at law or in equity to enforce its ~ights against
FRIENDS, including against FRIE}.fDS' archi teet or
contractor~ and ,to compel them to perform and carry
out their duties and obligations under the law and
under FRIENDS' covenants and agree~ents ~ith CITY
as provided herein; or
v. Pursue any
specifically
Lease.
other re:rnedy
provided in
available by
o'the r cl allses
law or
of this
B~ CUmulative. Remedies. However. in the event of a default
which can not reasonably be cured within sixty (60) days,
I'RIENOS 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 no. or hereafter enacte~, are
cumulative and the exercise of one right or remedy shall
not impair thp-right of CITY to exercise any or all other
remedies. In case any suit, action or proceeding to
enforce any right or exercise any remedy shall he brought
or taken and then discontinued or abandoned, then, and in
every such case. CITY and FRIENDS shall be restored to
its and their former positlon and rights and remedies as
if no such suit, action or proceedings had been brought
or taken.
c. Insplvency of FRIENDs. In addition to a violation or
breach of any other provision of this Lease, FRIENDS
shall be considered te, be in default under this Lease
should FRIENDS:
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against it any petition under any bankruptcy or
insolvency act or law;
ii. be adjudicated a bankrupt; or
iii. attempt to make a general assignment for the
benefit of creditors.
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20. NOTICES
All notices pursuant to thi$ Lease shall be addressed as set
forth below or as either party may subsequently designate by
vritt.en notice and shall he sent through the United Sta.tes
mail, first class, postage prepaid, certified W'ith return
receipt requested.
TO: .!;lD:
city Clerk
city of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94303
and
City of Palo Alto
Real Estate Division
250 Hamilton Avenue
Palo Alto, CA 94303
21. ATTACHMENT TO LEASE
FRIENDS of the Children's Theatre
c/o Suzan B. Stewart
1550 Middlefield Road
Palo Alto, CA 94301
Jonathan E. Rattner, Esq.
WARE , FREIDENRICH
40Q Hamil ton AverJl.:e
Palo Alto, CA 94301
This Lease includes the following eXhibits, ~hich are
e~ressly attached bereto and incorporated into this Lease~
Exhibit A -General Conditions
Exhibit B -Depiction of Children's ThEatre
Exhibit C -Description of Project, including Construction
Schedule
EXHIBIT 0 -Description of PREMISES
EXHlBIT E -Preliminary Agreement
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 ~ITNESS WHEREOF, the partie$ have executeo this Lease
the day and year first ab~ve ~ritten~
CITY OF PALO ALTO
Mayor
ATTEST:
City Clerk
911711'1 Wt; CI02O::143
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FRIENDS OF THE CHILDRENS'
THEATRE, INC.
By: ___ . ______ _
ltS: ______________________ _
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APPROVED AS TO FoRM:
Asst. City Attorney
PROPERTY DESCRIPTION AfPROVED:
Public Works/Engineering
RECOMMENDED FOR APPROVAL:
Asst. City Manager
Director J Finance
Director, Public Works
Director, Community services
Director, Planning anQ
Community Environmer.t
Real Property Manager
Risk Manager
Director, Arts and Culture
Director, Children's Theatre
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DEF!:NITIQNS
ElC1!IBIT A
GENE~L CONDITIONS
o
CIT¥ shall mean t.h'=! city Council of the Cit}' of Palo Alto, a
municipal corporation.
The city Manaqer is hereby authcriZEld to tS!lke 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 tor renamed
positions or to the replacement official designated with the
responsibilities of any eliminated position.
2. CORPORATE AUTHORITY' LIABILITY
If FRIENDS is a corporation. each individual sigr.ing this
Lease on behalf of FRIENDS represents and warrants that;
A. he is duly authorized to do so in accordance with an
adopted Resolution of FRIENDS' Board of Directors or in
accordance with the Byla~s of the corporation; and
B. FRIENDS is a duly qualified corporation authorized to do
business in Santa Clara county.
3. TIME
Time is of the essence of this Lease.
4. PERMITS AND LICENSES
FRI'ENDS shall be required to obtain anr and all pennits and/or
licenses Which may be required in connection ~ith the
oper-'ltion of, and any approved FRIENDS' construction upon, the
PREMISES or the Children's Theatre as 5et forth in this Lease.
5. MECHANICS LIENS
FRIENDS shall at all time i:ldernnify and save CITY harmless
from all claims for labor or materials supplied in connection
with the Project, including construction, repair, alteration,
or-installation of structures, improvements, equipment, or
facilities within the Children's The3tre and the PREMISES, and
from the cost of defending against such claims, including
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attorneys' tees. FRIENDS shall provide CIT\' "IoI'it.h at least ten
(lO} clays 'W'ritten not.ice prior to comroe!"lcernent of any work.
which could give rise to a mechanics 1 iEl". or stop notice.
C.ITY reserves the right to enter lJPOn PREMISES .e:nd the
Children's Theatre to!' the purposes of posting !lotices of Non
Responsibil i ty.
In the event a lien is imposed upon the Children's Theatre or
the PREMISES as a result cf such construction, repair,
alteration, or installation; FRIENDS shall either:
A. Record a valid Release of Lien; or
B. Deposit sufficient cash ~ith CITY to cover the amount of
the claim on the lien in question and authori~e payment
to the extent of said deposit to c.'lY subsequent judgement
holder that may arise as a matter of public record from
litigation with regard to lienholder claim; or
C. Procure and record a bond in accordance TJith s~ction 3143
of the California Civil Code~ ... :hich frees the PREMISES
from the claim of the I ien from anJ~ action brouqht to
foreclose the lien.
NotWithstanding Clause 19 of this Leas~ (DEFAULT}, should
FRIENDS fail to accomplish one of the three (JJ optional
actions within fifteen (15) days after the filing of such a
lien" the I..E!:ase shall be in default and may be subject to
immediate termination.
LEASE ORGANIZATION AND RULES OF CONSTRuCTION
Words of the masculine gender shall be deened and construed to
include correlative .... ords of the feminine and neuter genders.
Unless the context oth~rwise indicates, ~ords importing the
singular number shall include the plural number and vice
varsa, and ~ords importing persons shall include corporations
and associations, including publi.c bodies; as .ell as natural
persons.
The terms -hereby", "hereof" I I'hereto". "ht2rein lt , -hereunc!er·
and any similar terms, a5 used in this Lease, refe~ t~ this
.Lease.
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 section:5 of this Lease have
been inserted [or convenience of reference only; are not to be
considered a part hereof and shall not in any way modify or
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8.
9.
restrict any of the terms or provisions hereof or be
considered or 9ivif'n ar.y et feet i:1 construing this Lease or any
provision hereot in ascertaining intent, if any question of
intent shall 3rie~.
AMENDMENTS
This Lease sets forth all of the agreements and understandings
ot the parties and any modifications r..ust be 'Written and
properly executed by both parties.
UNLAWFUL USE
FR~E.NOS ag;re.es that no il!'lprove!':'lents shall be erected., placed
upon, operated, nor rlaiMtained .. ithin the Childrerj's Theatre
or the PREMISES, nor any b~s iTle~s cOJ'"lducted or carried on
therein or therefrom, in violation of the terms of this Lease,
or of any regulation, order of !a~, statute, or ordinance of
a qover1llIlental agency having jurisoiction over FRIENDS· use ot
the Children's Theatre or the PREMISES.
NONDISCRIMINATION
FRIENDS and its employees shall riot discriminate against any
person because of race. color. ancestry, aqe, sex, n~tional
origin or physical handicap. FRIENOS $h~ll not dis~riminate
against any employee or applicant for employment because of
race, color, reli~ion, ancestry, sex, age, national origin or
physical handicap. FRIENO.s CO'len::!.nts to meet all requirements
of the Palo Alto Municipal code pertaininq to
nondiscrim:i';naticn in emploYll'lent. If FRIENDS is found in
violation of the r.ondiscrimination provisions of the State of
California Fair "Employment Practices .1I.ct or similar provisions
of federal law or executive order in the conduct of its
activities under this Lease by the state of California Fair
Employment Practices Commiss ion or the equivalent federal
agency or off jeer, it shall thereby l:le found in material
breach of this Lease. CITY sh~ll then have the power to.
cane.:!l or suspend this Lease in ".'hole or in part pursuant to
the terms of this Lease.
10. INS PEC'T! ON
Authorized CITY employees and agents shall have the right at
all reasonable times to inspect the Children's Theatre and the
PREMISES to determ.ine if the prov is ions of this Lease are
being complied with.
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11. SOCCESSORS IN INTEREST
Unless otherwise provided in ~his Lease. the terms, covenants,
and conditions contained herein shall apply to ~nd hind. the
beirs, successors, executors, administrators, and assigns of
~ll t.he pliIrt.ies hereto. all of .... 'hom shall he jointlY and
severally liable hereur.der.
12r CIRCJMSTANCES WHICH EXCUSE PERfORMANCE (FORCE MAJEURE)
If either party hereto shall be delayed or prevented frum the
per-formance of any act required her-eunder by reason of acts of
God, restrictive governmental ]a~s or regulations, or other
cause 1iithout fault and beyond the control of the party
obligated (financial inability excepted), performance of such
act shall be excused for the per icd of the delay and the
perlod for the performance of any such act shall be extended
for a period equivalent to the per10d of such delay.
13. PARTIAL INVALIDITY
If any term, covenant, conditi~n~ or provisIon of this Le~se
is determined to be invalid, void~ or unenforceable, by a
court of comp~tent jurisdiction, the remainder of the
provisions hereof shall remain in full torce and effect and
shall in no 'Way be affected, impaired, or invalidated thereby.
14. WAIVER OF RIGHTS
The failure of CI'ri or FRIENDS to insist upon strict
performance of any of the terms, covenants, or conditions of
this Lease sball not be deemed a ~'aiver of any right or re.!!ledy
that CITY or FRIENDS may howe, and shall not be deemed a
waiver of the right to require strict pecformance of all the
terms, covenants, and conditions of the Lease thereafter. nor
a '\IIaiver of any remedy for the 5ubseq t.Je:r.:t breach or de-fault of
any term, cvvenant, or condition of the Lea$e.
1S. COSTS OF SUS'l'i\INING AN ACTION FOR BREACH OR DEFAULT
In the event either CITY or FRIENDS commences legal action
against the other claiming a breach or default of this L~ase,
the prevailing party in such litigatic,n shall be entitled to
recover from the other cost of sU$taining such action.
including reasonable attorneys' fees, as :may be fixed by the
Court~
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15.
17.
lB.
RESERVATIONS TO CITY
The PREMISES are s~bject to any and all existing easements and
enc\l.Jlll:)rances. CITY reserves the right to install, lay,
co~structt =aintain, repair, and operate such sanitary sewers,
drains, storm water ee"t,w'ers, pipelines, maMoles, and
connections; \later, oil. and gas pipelines; telephone and
telegrapt, poW"er 1 ines; and the appl icat:.ions anJ. appurtenances
necessary or convenient for connection therevith, in, over,
upon, through, across and along the PREMISES or any part
the=-eof, and to enter the PP.EMISES for ai1Y and all such
plJrposes. CITY also reserves the right to grant franchises,
easements, rights of way, and permits, in over, upon, through,
across, and along ~ny and all po~tions of the PREMISES. No
riqht reserved by CITY in this clause shall be so exercised AS
to interfere unreasonably wi t-h FRIENDS' construction
hereunder, and shall oe coordinated, to the extent reascnably
possible, vith the construction of the project.
CITY agrees that rights granted to third parties by reason of
this clause shall contain proviSions that the surface ot the
land shall be r-e~tored as nearly as practicable to the
oriqinal condition upon the completion of any construction.
DISPOSITION OF ABANDONED PERSONAL PROPER~Y
If FRIENDS abandons the PREMISES or is dispossessed thereof by
process of law or otherwise~ title to any personal property
belonging to FRIENDS and left on the PREMISES forty-five (45)
days after such abandonment or dispoEsession shall be deemed
to have been transferred to CITY. CITY shall have the right
to remove and to dispose of such property ~ithout liability
therefor to FRIENDS or to any person claiming under FRIENDS,
and shall have no need to account therefore.
QUITClAIM OF FRIENDS I S INTEREST t1PQ~ ,!'ERMINATION
Upen termInation of this Lease fc,r any reason, including but
not limited to temination be-cause of default by FRIENDS,
FRrENDS shall, at CITY I S request execute, acknowledge and
deliver to CITY within five (5) days after receipt of written
demand thereof, a good and sufficient d~ed whereby all rights,
title, and interest of FRIENDS in the PREMISES and the
Children's Theatre are quitclaimed to CITY. Should FRIENDS
fail or refuse to deliVer the required deed to CITY, CITY may
prepare and recoI'd a notice reciting the failure of FRIENDS to
execute, ackno'Wledge and deliver such deed and said notice
shall be conclusive evidence of the termination Qf this Lease,
i5nd of all riqht of FRIENDS or ttNSe: claiming under FRIENDS in
and to the PREMISES and the Ch ildren· s '!'heatre.
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19. CONFLICT OF INTEREST
FRIENDS 'Warrants and covenants that no official or empl"yee ot
CITY nor .e.ny business entity in irlhich any ~fficial or employee
of CITY is interested~ ~l) has been employed or retained to
solicit or aida in the procuring of this Lease: (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, employee
or business entity is not compatible 'With such official's or
employee's duties as an official O~ employee of CITY, FRIENDS
upon request of CITY shall irr~ediately terminate such
employment~ Violation of this provision constitutes a serious
breach of this Lease and CITY may terminate this Leas.e
pursuant to the terms hereof as a result of such violation.
20. H1.ZA..'rIDOOS MATERIALS
A. Definition. As used herein, the term -Hazardous
Materials· means any substance or material Which has been
determined by any state~ federal or local governnental
aut.hority to be capable of posing risk of injury to
heal th, 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 Cal ifornia water
Quality Control Board l the U~ s. Department ot Labor, the
California Department of Industrial Relatio~s, the
California Department of Health Se~ices~ the California
Heal th and Welfare Agency in connection 'With the Safe
Water and Toxic Enforcement .Act of 1986, the o~ s.
Department of Transportation, the U. S~ Department of
Agriculture, the U. S. Consumer Product Safety
Commission~ the U. S. Departl!lent of Health and Human
Services, the U. S. Food and Drug Admir.istration or any
other governmental agency no~ or hereafter authorized to
regulate l!laterials and substances in the envirONnent.
without limiting the generality of the foregoing, the
term "Hazardous Materials" shall includE! all of those
materials and substances defined as atoxic materials· in
Sections 66680 through ~6685 of Title 22 of the
california Code of Regulations, Division 4, Chapter 30,
as the same may be am~nded from ti~e to time~
8. FRIENP'!' Use of PREMISES and CI:LU"DREN-S THEATRE'. During
the term of this Lease, FRIENDS shall abide and be bound
by all of tt.e follow"ing requireo;lents:
i. FRIENDS shall comply irlith all laws now or hereafter
in effect relating to the use of Hazardous
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Materials on, under or about the PREMISES and the
Children's Theatre, aJ'1d FRIENDS shall not
cont~minate the PREMISES or the Children's Theatre,
or their subsurfaces, ~ith any Hazardous Materials.
il. FRIENDS shall restrict its use of Haz~rdous
Materials at the PREMISES and the Children's
Theatre to those kinds of materials that are
normally ~sed in constructing the Project.
Disposal of any Hazardous Materials at the PREMISES
or th~ Children's Theatre is strictly prohibited.
Storage of such permissible Hazardous Materials is
allo~ed only in accordance vith 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~ FRIENDS shall be solely and fu1ly responsible for
the reporting of ~ll Hazardous Materials releases
to the appropriatE public agencies; when such
releases ar-e caused by or result from FRIENDS~
activities on the PREMISES or-at the Children's
Theatre. FRIENDS shall immediately inform CITY of
any release of Ha~ardous Materi~ls, whether or not
the release is in'quantities that would
otherwise be reportable to a p~blic agency.
iv. FRIENDS shall be solely and fully responsible and
liable for its releaSES at the PREMISE'S or the
Children's Theatre. or into CITY's sewage or storm
drainage systems. FRIENDS shall take all necessary
precautions to prevent any of its Hazardous
Materials fr-om entering into any storm or sewage
drain system or fr-om being released on the PREMISES
or at the children's Theatre. FRIENDS shall remove
relE!ases of its Hazardous ~,aterials in aCCordance
wit~ all laws. In addition to all other rights and
remedies of CI-T':i hereunder. if the release of
Hazardous Materia]s caused by FRIENDS is not
removed by FRIENDS 'Within ninety (90) days after
discovery by FRIENDS, CITY or any other third
party, CITY ma.y pay to have the sa.me removed and
FRIENDS shall reimburse CITY for such costs within
ten (10) days of CITY's demand for paYJllent.
v. FRIENDS shall protect, defend, indemnify and hold
harmless CITY from and against all loss, damage, or
liability (including all foreseeable and
unfores6eable consequential damages) and expenses
(including, without limitation, the cost of any
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cleanup and remediation of Hazardous Materia!s)
~hlch CITY may sustain as a result of the presence
or cleanup of Hazard?us Hateri~ls on the PREMISES
or at thp.: Children's Theatre that is caused by
FRIENDS or otherwise arises in connection with, or
e.s .!Ii result of I this Lease or the Project to be
conEtructed under the Lease, exc-t.!pt as provided
under the third sentence of Clause gee) of this
Lease.
FRIENDS' obligation
the e~?iration or
Lease4
under this clause shall survive
earlier termination of this
21. ALL COVENANTS ARE CONDITIONS
All provisions of the Lease are expressly made conditions.
22. PARTIES OF INTEREST
Nothing in this Lease, express or implied, is intended to, nor
shall be construed to, confer upon or give to any person or
party other than CITY and FRIENDS any rights, remedies or
claims under or by reason of this Lease or any covenants.,
condition or stipulations hereof. All covenants.
stipulations, promiees and agreements iTI this Lease shall be
for the sole and exclusive benefit of CITY and FRIENDS.
23. RECORDATION OF LEASE
Neither CITY nor FRIENDS shall record this Lease; however. a
short-form memorandu:m of Lease may be record:ed at CITY's
request~
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EXHUHTS 8., C, D, and E to be provided after final
Project approval.
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