AGENDA
ITEM
9 AGENDA STAFF REPORT
DATE: March 2, 2021
TO: Mayor and City Council
PREPARED BY: Miguel Figueroa, City Manager
Best Best & Krieger LLP, City Attorney
APPROVED BY: Miguel Figueroa, City Manager .J.ff
SUBJECT: Approve Lease Agreement with the Chamber of Commerce for Greater Calexico
================================================================== Recommendation:
It is recommended that the City Council of the City of Calexico approve the attached lease agreement with the Chamber of Commerce for Greater Calexico.
Background:
In 2020, businesses in California were asked to close to achieve slowing the spread of Covid-19 that was overwhelming our local hospitals. Unfortunately, for the Calexico Chamber of Commerce, and many chambers across the country, the beginning of the pandemic was the end of Chamber operations. As time passed and with the retirement of long-time staff members, it became increasingly clear that the Calexico Chamber of Commerce was not bound to re-open its doors.
During the pandemic, Ms. Katie Luna, who was previously with the Brawley Chamber of Commerce, began a dialogue with Calexico business owners about opening a new Chamber of Commerce in Calexico. Throughout 2020 and into 2021 the dialogue grew into action and on September 9, 2021, the Chamber of Commerce for Greater Calexico (The Chamber) was founded as a California corporation. Currently, The Chamber is seeking its non-profit status which requires the submittal of a vigorous IRS tax application. The Chamber is a local business association (IRS 501 c6), assembled to promote and protect the interests of the business community in Calexico and the Imperial Valley. The Chamber follows the industry principle of being a convener of leaders, a catalyst for business growth, and a champion for the community. Through this "3C" approach, The Chamber has begun restoring the foundational relationships needed to further Calexico's economic progress.
81211.00100\34489343.1
AGENDA
ITEM
Since the fall of 2021, The Chamber has committed to building its own entity through investments from business members while restoring old debts incurred by the Calexico Chamber of Commerce.
Discussion:
Staff recommends that the City of Calexico enter into the proposed lease agreement with The Chamber. The terms of the lease agreement are summarized as follows:
• The Chamber would occupy the City's building at 1100 Imperial Avenue for the purpose of conducting their operations.
• The term of the lease would be for 10 years, but City has the option to terminate the lease with 90 days' notice.
• Rent would be $1 per year.
• The Chamber would pay for utilities, repairs, maintenance, and taxes.
Fiscal Impact:
The fiscal impact would be minimal as the City has maintained a lease with the previous Chamber of Commerce under similar terms for many years.
Attachment:
Commercial Lease Agreement
81211.00100\34489343. 1
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (the "Lease") is made and entered into by and between THE CITY OF CALEXICO ("Landlord") and CHAMBER OF COMMERCE FOR GREATER CALEXICO ("Tenant"), under the following tenns and conditions:
Description of the Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord certain real property located at the Northwest corner of the Intersection of Highway 98 and Highway 111 commonly known as 1100 Imperial Ave, Calexico, CA 92231, APN 058120043000 and more particularly described in Exhibit "A" attached hereto and t. incorporated herewith ("Premises").
Term and Occupancy.
A. Term. The term of this Lease shall be for ten (10) years; said term shall 2 · commence on March 3, 2022 (the "Commencement Date"), and end on March 3, 2032. At any time during the term of this Lease, the Landlord shall have the right to provide the Tenant with a 90-day advance notice of te1mination of the Lease.
3. B. Occupancy. Tenant is cmTently in possession of the Premises and may, upon execution of this Lease, continue to occupy the Premises on the Commencement Date subject to all terms and conditions of this Lease. Tenant understands and acknowledges that the Premises may be required by Caltrans for highway-related uses. If and when, Caltrans does dete1mine to use the Premises, then Tenant agrees to vacate the Premises forthwith and this Lease with the City shall te1minate.
Rent. The annual rent during the te1m of this Lease shall be $1 per year. Tenant shall, commencing on the Commencement Date and continuing thereafter on the first (1st) day of October at the commencement of each lease year during the term of this Lease, pay to Landlord
4. in advance, such annual rent.
Place of Payment of Rent. Rent and any other sums which may become due under this
5. Lease shall be payable by hand delive1y or mail to City Hall located at 608 Heber Ave, Calexico, CA 92231, or at such other place as Landlord may designate from time to time in writing.
6. Utilities. Tenant shall pay all utilities and other operating expenses associated with its use of the Premises under this Lease.
Taxes And Assessments.
A. Real Property Taxes. Tenant shall pay all real property taxes (including, if applicable, any possessory interest taxes and personal prope1ty taxes), general and special taxes and assessments ("Real Property Taxes") levied and assessed against the Premises. Tenant shall pay the Real Property Taxes not later than the taxing authority's delinquency date.
B. Tenant's Tax Liability Prorated. Tenant's liability to pay Real Property Taxes and new assessments shall be prorated on the basis of a 365-day year to account for any 72500.00000\3 1573344.4 1
fractional portion of a fiscal tax year included in the Lease Term at its inception and expiration or earlier termination in accordance with this Lease.
C. Revenue & Taxation Code Section 107.6. Possessory Interest Tax. Tenant recognizes and understands that this Lease may create a possess01y interest subject to property taxes and that, in the event that a possesso1y interest is created, Tenant shall be responsible for payment of any taxes levied against such possesso1y interest.
Condition of, and Improvements to, Premises.
A. Improvements. Landlord shall have no obligation or responsibility, actual or implied, to install, construct, accommodate, or make any improvements to the Premises prior to, 7· or as a condition of, Tenant's occupation of the Premises.
8. B. As-Is Condition. Tenant acknowledges that it has been in possession of the Premises under a prior Lease and has had extensive time to inspect the Premises and be familiar with its condition. Tenant agrees to take possession of the Premises in an AS-IS condition.
C. Condition Upon Surrender. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord in as good condition as when originally received, ordinaiy wear and tear and damage by fire, earthquake, or act of God excepted, and including any repairs or improvements made by Tenant.
D. CASp Disclosure. Landlord discloses that the Premises have not undergone inspection by a Certified Access Specialist (CASp) as referenced in California Civil Code Section 1938 subsection (e). Tenant acknowledges and agrees that, if Tenant wishes to have the Premises inspected by a CASp: (i) Tenant must notify Landlord on or before the date when Tenant executes this Lease pursuant to the election below; (ii) the inspection will be at Tenant's sole cost and expense; (iii) the inspection must be scheduled through Landlord; (iv) any repairs or modifications necessaiy to correct any violation of constmction-related accessibility standards that is noted in the CASp rep01t shall be Tenant's responsibility; and (v) Tenant must provide a copy of the CASp report to Landlord on completion. By initialing below, Tenant represents that:
Tenant wishes to have a CASp inspection of Premises Initials: --- -- Tenant waives its right to have a CASp inspection of Premises Initials: - - ---
9. Use. The Premises shall be used only for the operation of the Chamber of Co1mnerce for
10. Greater Calexico. Tenant shall not use any portion of the Premises for purposes other than those specified without first obtaining the written consent of Landlord.
Compliance with Laws. Tenant, at Tenant's expense, shall comply with and cause all of Tenant's agents to comply with all applicable laws, ordinances, rules and regulations of governmental authorities applicable to the Premises or the use or occupancy thereof.
Repair and Maintenance. All repairs to the Premises, including all maintenance and servicing, and all repairs to and replacement including supplies, shall be at Tenant's expense. 72500.00000\31 573344.4 2
Tenant is responsible for all maintenance and repair of said building and any of its paits. This includes but is not limited to, all air conditioning and plumbing maintenance and repair.
Alterations and Liens. Tenant shall not make or cause to be made any alterations, additions, or improvements to or of the Premises or any pait thereof without the prior written consent of Landlord. Tenant shall keep the Premises free and clear of any liens or encumbrances which may arise from such work.
11. Assignment and Subletting. Tenant shall not assign or encumber this Lease or any
12. interest therein or sublet the Premises or any portion thereof either voluntarily or by operation of law without the prior written consent of Landlord, which consent shall not be umeasonably withheld, conditioned, delayed or denied.
Entry by Landlord. Except for emergencies such as fire, water intrusion, and the like which may be at any time, Landlord and its agents shall have the right to enter the Premises at reasonable times to inspect and examine the same and to make such repairs to the Premises as 13. the Landlord shall deem advisable, and to show the Premises to prospective tenants, buyers or
14. 15.
16. lenders.
Indemnification.
A. Waiver of Claims. To the extent permitted by law, Tenant waives all claims against Landlord for damage to person or property arising for any reason. Tenant assumes all such risks for Tenant and any employees, licensees, invitees, volunteers, directors, agents, or contractors.
B. General Indemnity. Tenant agrees, as an independent unsecured obligation, separate from any of its promises or covenants in this Lease, to indemnify, defend (with counsel selected by Landlord at Tenant's expense), protect and hold harmless Landlord, its elected officials, employees, agents, officers, legal counsel, assigns, any successor or successors to Landlord's interest in the Premises and any future owners of the Premises to whom this Lease is assigned (hereinafter collectively referred to as the "Indemnitees") from and against all claims, actual damages (including but not limited to special and consequential damages), punitive damages, injmies, costs, response costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses arising out of any damage to any person or property occuning in, on, or about the Premises, except for any acts of negligence or willful misconduct by Landlord.
Insurance. Tenant's insurance requirements are attached as Exhibit "B" and incorporated herein by reference.
Default. If Tenant, after notice, fails to remedy any default (a) in the payment of any sum due under this lease for fifteen (15) days or (b) in the keeping of any other term, covenant or condition of this lease with all reasonable dispatch, not exceeding fifteen (15) days, then the Landlord or its agents may enter upon the demised Premises, take possession thereof, and remove all persons therefrom and at Landlord's option, it may either terminate this Lease and all the Tenant's rights herein, or it may rent said Premises for the account of the Tenant, or it may 72500.00000\31573344.4 3
follow any other remedy provided by Jaw. Any holding over beyond the tenn prescribed herein shall be construed as month-to-month tenancy.
~- Tenant shall not place any sign upon the Premises without Landlord's prior written consent. Under no circumstances shall Tenant place a sign on any roof of the Premises.
Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover
17. from the losing pmiy reasonable attorney's fees and costs of suit.
18. Notices. Any notice required or permitted to be given hereunder may be given by personal delivery or by United States certified mail, postage prepaid, addressed to Tenant at the Premises and to Landlord at 608 Heber Ave, Calexico, CA 92231; or at such other address as the
19. Landlord shall designate in writing.
20. Waiver. No delay or omission in the exercise of any right or remedy of Landlord on any default by Tenant shall impair such iight or be constrned as a waiver.
Successors and Assigns. Except as othe1wise provided herein, all of the te1ms and conditions hereof shall be binding upon and inure to the benefit of the pmties hereto and their 21.
22. 23.
respective successors and assigns.
Titles and Definitions. The titles of Sections herein are for identification only. They shall not be considered to be a part of this Lease and shall have no effect upon the construction or interpretation thereof.
Entire Agreement/ Amendment. This Lease contains the entire agreement of the parties and supersedes all prior negotiations, drafts, and other understandings which the Pmties may have concerning the subject matter hereof. This Lease may not be modified except by written
24. instrument duly executed by the pmties hereto or their successors in interest.
Choice of Laws; Interpretation. This Lease shall be governed by and construed pursuant to the laws of the State of California. The provisions of this Lease shall be constrned in
25. accordance with the fair meaning of the language used and shall not be strictly construed against either party.
Approval by Board of Directors. This Lease shall be approved by the Board of Directors
26. of the Chamber of Commerce for Greater Calexico, and a copy of the resolution of approval and authorizing the Executive Director of the Chamber of Commerce for Greater Calexico to execute said Lease shall be attached to this Lease and made a part hereof.
Authority. Each of the persons executing this Lease on behalf of Tenant warrants and represents that Tenant is a duly organized and validly existing entity, that Tenant has full right and authority to enter into this Lease and that the persons signing on behalf of Tenant are authorized to do so and have the power to bind Tenant to this Lease. 72500.00000\3 1573344.4 4
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day and year set f01th below.
LANDLORD:
By: ___________ _
Name: _____________ _
Its: ---- ---------~
TENANT:
Dated: ----------- By: ___________ _
Name: --------------
Its: _____________ _
72500.00000\31573344.4 5
EXHIBIT A
LEGAL DESCRIPTION
A PARCEL OF LAND LOCATED IN THE STATE OF CA, COUNTY OF IMPERIAL, WITH A SITUS ADDRESS OF 1100 IMPERIAL AVE W, CALEXICO CA 92231- CURRENTLY
OWNED BY CITY OF CALEXICO HA YING A TAX ASSESSOR NUMBER OF 058120043000 AND BEING THE SAME PROPERTY MORE FULLY DESCRIBED AS POR PAR 1 OF SHM 2-4 7 SEL Y OF IMPERIAL A VE BEING ALSO SHOWN AS ABANDONMENT BY CITY OF CALEXICO AREA ON ROW MAP L0-73618 AND DESCRIBED IN DOCUMENT NUMBER [NIA] DATED [NIA] AND RECORDED [NIA]. 72500.0000013 1573344.4 1
EXHIBITB
INSURANCE REQUIREMENTS
Without limiting Tenant's indemnification of Landlord, and prior to commencement of Lease, Tenant shall obtain, provide and maintain at its own expense during the term of this Lease, policies of insurance of the type and amounts described below and in a form satisfact01y to Landlord.
1. General Liability Insurance. Tenant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $2,000,000 per occurrence, $4,000,000 general aggregate, for bodily injury, personal injmy, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO "insured contract" language will not be accepted. Deductible shall not exceed $5,000.
2. Workers' Compensation Insurance. Tenant shall maintain Workers' Compensation Insurance (Statut01y Limits) and Employer's Liability Insurance (with limits of at least $1,000,000). Tenant shall submit to Landlord, along with the ce1tificate of insurance, a Waiver of Subrogation endorsement in favor of Landlord, its officers, agents, employees, and volunteers.
3. Property insurance. Upon commencement of construction of Tenant improvements and betterments, or taking possession for occupancy, Tenant shall provide evidence to Landlord of insurance on Tenant's personal prope1ty, furniture, fixtures and equipment, and any tenant improvements and betterments. Policy shall be provided for replacement value on an "all risk" basis. There shall be no coinsurance penalty provision in any such policy.
4. Commercial property insurance: Landlord shall maintain c01mnercial property insurance covering the leased building. Tenant shall be responsible for maintaining liability insurance and coverage for personal property, furniture, fixtures, and equipment that have no permanent connection to the structure or utilities. Landlord shall not be liable for any business income or other consequential loss sustained by Tenant. Landlord shall not be liable for any loss of Tenant's personal property even if such loss is caused by gross negligence of Landlord, Landlord's employees or agents.
5. Other provisions or requirements
a. Proof of insurance. Tenant shall provide certificates of insurance to Landlord as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation. Insurance certificates and endorsements must be approved by Landlord's Risk Manager prior to commencement of performance. Current certification of insmance shall be kept on file with Landlord at all times during the term of this contract. Landlord reserves the right to require complete, ce1tified copies of all required insurance policies, at any time.
72500.00000\3 1573344.4 1
b. Primary/noncontributing. Coverage provided by Tenant shall be primary and any insurance or self-insurance procured or maintained by Landlord shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of Landlord before the Landlord's own insurance or selfinsurance shall be called upon to protect it as a named insured. c. Landlord's Rights of Enforcement. In the event any policy of insurance required under this Lease does not comply with these specifications or is canceled and not replaced, Landlord has the right but not the duty to obtain the insurance it deems necessa1y and any premium paid by Landlord will be promptly reimbursed by Tenant plus a 10% administrative charge or Landlord will withhold amounts sufficient to pay premium from Tenant payments. In the alternative, Landlord may cancel this Lease. d. Acceptable Insurers. All insurance policies shall be issued by an insurance company cmTently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Categ01y Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless othe1wise approved by the Landlord's Risk Manager.
e. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Lease shall be endorsed to waive subrogation against Landlord, its elected or appointed officers, agents, officials, employees, and volunteers or shall specifically allow Tenant or others providing insurance evidence in compliance with these specifications to waive their right of recove1y prior to a loss. Tenant hereby waives its own right of recovery against Landlord, and shall require similar written express waivers and insurance clauses from each of its subtenants.
f. Enforcement of Contract Provisions (Non Estoppel). Tenant acknowledges and agrees that any actual or alleged failure on the paii of the Landlord to infonn Tenant of non-compliance with any requirement imposes no additional obligations on the Landlord nor does it waive any rights hereunder.
g. Requirements Not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Tenant maintains higher limits than the minimums shown above, the Landlord requires and shall be entitled to coverage for the higher limits maintained by the Tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Landlord. h. Notice of Cancellation. Tenant agrees to oblige its insurance agent or broker and insurers to provide to Landlord with a thirty (30) day notice of cancellation (except 72500.00000\3 1573344.4 2
for nonpayment for which a ten ( 10) day notice is required) or nonrenewal of coverage for each required coverage.
i. Additional Insured Status. General liability policies shall provide, or be endorsed to provide, that Landlord and its officers, officials, employees, agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.
j . Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to Landlord and approved of in writing.
k. Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that Tenant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer's limits of liability. The policy(ies) shall not contain any cross-liability exclusions.
1. Landlord's Right to Revise Specifications. The Landlord reserves the right at any time during the term of the Lease to change the amounts and types of insurance required by giving the Tenant ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Tenant, the Tenant and Landlord may renegotiate the Landlord's share of operating expenses. m. Self-Insured Retentions. Any self-insured retentions must be declared to and approved by Landlord. Landlord reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by Landlord.
n. Timely Notice of Claims. Tenant shall give Landlord prompt and timely notice of claims made or suits instituted that arise out of or result from Tenant 's performance under this Lease, and that involve or may involve coverage under any of the required liability policies.
o. Additional Insurance. Tenant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessaiy for its proper protection. Tenant's personal property, fixtures, equipment, invent01y and vehicles are not insured by Landlord against loss or damage due to fire, theft, vandalism, rain, water, criminal or negligent acts of others, or any other cause. 72500.00000\3 1573344.4 3