Attachment 1
1 LEASE AGREEMENT FOR OFFICE SPACE
This LEASE AGREEMENT FOR OFFICE SPACE (Agreement), entered into effective March 6, 2024, by and between the City of Coronado, a public body corporate and politic, (hereinafter the "CITY") and Yacht and Home, Inc., a California corporation organized and existing under the laws of the State of California (hereinafter "TENANT") provides as follows:
The CITY warrants and represents that it is the owner of a Leasehold of certain tidelands and related public lands located at 1715 Strand Way, Coronado, California, commonly known as "Glorietta Bay Marina" (the "Marina") and the office building located in the Marina ("Building"); and
The CITY wishes to rent to TENANT, and TENANT wishes to rent from CITY, approximately 640 square feet of office space in the Building for the term, at the rental and upon the terms and conditions set forth herein.
Therefore, the parties agree as follows:
1. The Premises. The CITY hereby agrees to rent to TENANT, and TENANT hereby rents from CITY, the following described premises:
That certain combined 640 square feet of floor space on the second floor of the Building, as illustrated in Attachment A, that includes approximately 230 square feet (Tenant Space B) and approximately 410 square feet (Tenant Space C).
2. Term. The term of this Agreement shall commence on the date the Agreement is executed by the CITY and TENANT and shall expire on March 5, 2025 or until terminated as provided in this Agreement, or abandoned by TENANT. The term may be extended, at the sole option of the CITY, for (2) additional two year terms.
3. Rent. Effective March 6, 2024, TENANT agrees to pay CITY or its designated agent (California Yacht Marina-Chula Vista, LLC acting as Marina Manager/Agent) a minimum monthly rent during the term of this Agreement in the amount of Three Thousand Forty Dollars and Zero Cents ($3,040.00) per month, payable on the first day of each month during the term of this Agreement, with payments to be made by personal delivery or mailing by U.S. Mail to Marina Manager/Agent's office, postmarked not later than the first day of each month during the term of this Agreement. Checks shall be made payable to "GBM."
Payment shall be deemed late if not received by the tenth (10th) day of the month. A late payment fee of $50.00, plus 1.5% per month, shall be assessed after the monthly fee is ten (10) days in arrears. Any checks not paid by the Bank upon first presentment shall not constitute payment of any of the sums due under this Agreement.
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2 4. Annual Adjustment of Minimum Monthly Rent. On the first day of each fiscal year during the term of this Agreement, beginning July 1, 2025, the minimum monthly rent shall be automatically increased by the prior calendar year's Annual Average Consumer Price Index for the San Diego Region but not to exceed 2% annually.
5. Tenant Deposits. CITY requires that TENANT pay Three Thousand Dollars ($3,000.00) as a deposit in conjunction with the execution of this Agreement.
The CITY agrees that the deposit shall, upon commencement of the term of this Agreement, constitute the deposit, which shall be held during the term of this Agreement by CITY as security for the performance by TENANT of its obligations under this Agreement.
a. That deposit shall be held by CITY, without obligation for interest, as security for the performance of TENANT's covenants and obligations under this Agreement, it being expressly understood and agreed that the deposit is not an advance rental deposit except to the extent CITY applies it as such after the notice required below, or a measure of CITY's damages in case of TENANT's default. b. The deposit shall not be considered liquidated damages, and if claims of CITY exceed the deposit, TENANT shall remain liable for the balance of the claim. c. On the occurrence of any event of default, and after the time for cure has elapsed without cure by TENANT, as stipulated in this Agreement, CITY may, from time to time, without prejudice to any other remedy provided in this Agreement or provided by law, after five (5) days prior written notice to TENANT of CITY's intent to do so, specifying the cause and the amount, use a portion of that fund, to the extent necessary, to make good any arrears of rent and any other damage, injury, expense or liability caused by the event of default specified in such notice. d. If any portion of the deposit is so used or applied, TENANT shall, within five (5) days of written demand, deposit cash with CITY in an amount sufficient to restore the security deposit to its original amount, and TENANT's failure to do so shall constitute a default of this Agreement.
e. If TENANT is not then in default under this Agreement, any remaining balance of the deposit shall be returned by CITY to TENANT on demand, within thirty (30) days after the termination of this Agreement.
6. Possession. The CITY places TENANT in peaceful possession of the Premises, and TENANT, by taking possession of the Premises, acknowledges that the Premises are in satisfactory and acceptable condition. TENANT acknowledges that it has had an opportunity to inspect the Premises.
7. Care of the Premises. TENANT agrees to take good care of the Premises. TENANT agrees to provide janitorial services for the Premises, at TENANT's sole expense.
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3 8. Use. TENANT shall use the Premises for the purpose of residential and/or commercial realty sales and services and maritime yacht sales, services and management, and shall not use or permit the Premises to be used for any other purposes. TENANT agrees that if TENANT ceases to operate the yacht sales, services and management part of their business, this shall constitute grounds for immediate termination of tenancy. TENANT agrees that no use consuming abnormally high utility or other service costs shall be permitted in the Premises. TENANT shall not offer boat rental operations or non-certified charter vessel operations.
9. Possessory Interest Tax. TENANT understands that this Agreement may create a possessory interest in the Premises, subject to taxation under section 107.6 of the Revenue and Taxation Code. TENANT covenants to pay any such tax when due and to hold CITY, and its elected and appointed officers, officials, agents (including Marina Manager/Agent) and employees harmless from any liability for such tax.
In the event that such possessory interest tax exceeds two thousand dollars ($2,000.00) per year during the term of this Agreement, TENANT may exercise its right to terminate the Agreement pursuant to Section 26.
10. Compliance with Laws. TENANT agrees to observe all laws and governmental regulations applicable to its use of the Premises, including all building code, fire code, and zoning regulations applicable to the Premises, together with all reasonable rules and regulations that may be promulgated by CITY from time to time.
11. Alterations by Tenant. CITY agrees to allow TENANT to erect one or two dividing walls between Tenant Space B and C subject to the conditions in this Agreement. The CITY shall contribute 50% of the total expense for installation of the dividing walls, but not more than $6,000. Said dividing walls must be similar in all respects to existing walls of Building.
TENANT shall be required to submit all plans and details to CITY for prior review and approval. TENANT agrees to pay prevailing wage to all workers employed in the installation of the dividing walls. This project is a “public work” in accordance with California Labor Code §§1720, et seq. It is the sole responsibility of the TENANT to ensure that all workers employed in the execution of the AGREEMENT are paid the correct prevailing wage rate. TENANT agrees that TENANT will make no other alterations to the Premises without the prior written consent of the CITY. Ownership of the dividing walls shall remain with the CITY at termination or expiration of tenancy.
12. Hazards. TENANT shall not use the Premises, nor permit them to be used, for any purpose which shall increase the existing rate of insurance upon the Building, or cause the cancellation of any insurance policy covering the Building, or sell or permit to be kept, used, or sold in or about the Premises, any article that may be prohibited by CITY's insurance policies.
a. TENANT shall not commit any waste upon the Premises, nor cause any public or private nuisance or other act that may disturb the quiet enjoyment of any other tenant, nor shall TENANT allow the Premises to be used for any improper, Attachment 1
4 immoral, unlawful, or unsafe purpose, including, but not limited to, the storage of any flammable materials.
b. Nor shall TENANT use any apparatus, machinery or device in or on said Premises that shall make any noise or cause any vibration that can be detected by other tenants, or that shall in any way be a detriment to the Building. c. TENANT further agrees TENANT will not install or construct within the Premises or Building electrical wires, water or drain pipes, machinery, or other permanently installed devices including, but not limited to, internet Wi-Fi, camera and alarm systems, private music systems, or special ventilation, without the prior written consent of CITY.
13. City’s Right to Inspect. TENANT agrees to permit CITY and its authorized representatives to enter the Premises at all reasonable times during usual business hours for the purpose of inspection, or for the making of any necessary repairs for which the CITY is responsible or feels necessary for the safety and preservation of the Premises or for the performance of any work on the premises that may be necessary to comply with any laws or regulations of any public authority.
14. Fixtures and Personal Property. Any trade fixtures, equipment, or personal property permanently installed in or permanently attached to the Premises or Building by or at the expense of TENANT shall be and remain the property of TENANT, and CITY agrees that TENANT shall have the right to remove any and all of such property prior to the expiration or termination of this Agreement, so long as no default exists under this Agreement.
TENANT agrees that it will, at its expense, repair any damage occasioned to the Premises by reason of the removal of any of its trade fixtures, equipment, or other permanently affixed personal property as described above. Any trade fixture, equipment or personal property permanently installed in or permanently attached to the Premises or Building by or at the expense of the TENANT that is not removed upon the expiration or termination of this Agreement shall be removed by the CITY. Any expense incurred by the CITY shall constitute a Lien payable by TENANT.
15. Signs. TENANT shall be allowed to place a temporary (vinyl) sign on the glass door to the Premises. TENANT may post backlit informational advertisements for vessels and properties for sale in windows and/or outward facing televisions near the window to display advertisements for properties and vessels for sale. Such signage shall require the prior review and approval of the CITY or its designated agent in each instance. No other permanent or temporary sign shall be allowed on the Building. CITY shall include the name of the TENANT on the street front sign of the Marina Parking Lot.
16. Repairs and Maintenance. CITY agrees that it shall, at its cost and expense, maintain the Building in which the Premises are located, and the Premises, and every part of them, in good, first class condition, except that TENANT shall make any repairs or replacements necessitated by damage caused by the TENANT or its employees, agents, invitees, or visitors. However, if TENANT fails to make any such repairs or replacements promptly, CITY may, at its sole option, make the repairs or replacements after at least ten (10) days Attachment 1
5 prior written notice to TENANT, and TENANT shall repay the cost of the repairs or replacements to CITY on demand.
17. Refurbishments. Except otherwise stated in Section 16, the CITY shall not be responsible for repainting the Premises or for replacement of the carpeting and window coverings unlessrepainting or replacement is made necessary by the negligence of CITY or its agents, employees, servants, contractors, or subcontractors, or by the breach of any other obligation of CITY under this Agreement.
18. Utilities. TENANT agrees to pay for utilities to the Premises, except water, sewer and trash, which will be paid for by CITY.
19. Disruption of Service. In the event of any interruption or malfunction for any reason of any utility or service to the Premises or Building, CITY shall use reasonable diligence to restore the utility or service. However, any such interruption or malfunction, if restored within a reasonable time, shall not entitle TENANT to be relieved from any of its obligations under this Agreement, or grant TENANT the right of set-off or recoupment of rent, or be considered a breach by CITY, or entitle TENANT to any damages. Should any of the equipment or machinery break down, or for any cause beyond the reasonable control of CITY cease to function properly, CITY shall use reasonable diligence to repair the machinery or equipment promptly, but TENANT shall have no claim for rebate of rent or damages on account of any interruptions in service occasioned by or resulting from any such breakdown or cessation for the length of time reasonably required for repair.
20. Keys. TENANT will receive two (2) keys to the Premises and two (2) keys to the mailbox prior to Commencement Date of this Agreement. TENANT shall not be allowed to re-key the locks or opening devices to the Premises. TENANT shall pay all costs and charges related to loss of any key or opening device.
21. Parking. During the term of this Agreement, TENANT shall have the non-exclusive use in common with CITY, other tenants of the Marina and Building, their customers, guests and/or invitees, of the non-reserved common Marina Parking Lot, subject to rules and regulations for the use thereof as prescribed from time to time by CITY. This excludes the designated parking spaces reserved for the Marina Restaurant (e.g., Bluewater Coronado Restaurant), but only during the hours of 4:00 p.m. to 2:00 a.m., daily.
22. Destruction of Premises. If at any time during the term of this Agreement, the Premises or any part of the Building shall be damaged or destroyed by hazard (i.e., fire, water leakage, etc.) in a way that does not render the Premises unfit for the conduct of TENANT's business or that does not injure TENANT's business, CITY shall promptly and through the exercise of reasonable diligence repair the damage and restore the Premises, at CITY's expense, to the condition in which the Premises existed immediately prior to the damage or destruction. In such case there shall be no abatement of rent.
23. Eminent Domain. As used in this section, the word "condemned" shall include (a) receipt of written notice of the intent to condemn from an entity having the power of eminent domain, (b) the filing of any action or proceeding for condemnation by any such entity, Attachment 1
6 and (c) the conveyance of any interest in the Premises by the CITY or the TENANT to a public or quasi public authority having the power of eminent domain with respect to the Premises as a result of the authority's express written intent to condemn.
24. Condemnation. In the event any part of the interest in the Premises, Building, or Parcel is condemned, this Agreement shall terminate at the option of either CITY or TENANT as of the date title or actual possession vests in the condemnor, whichever first occurs, and rent under this Agreement shall be payable only to that date. CITY shall return to TENANT any rent paid beyond that date.
The CITY shall give TENANT written notice after receiving notice of any contemplated condemnation and TENANT shall have thirty (30) days after receipt of the notice to terminate this Agreement, provided the contemplated condemnation will render the Premises unfit for use by TENANT in the ordinary conduct of its business or will in TENANT' s reasonable opinion injure TENANT' s business.
25. Assignment and Subletting. TENANT may not sublet or assign its interest under this Agreement without the written consent of CITY, which will not be unreasonably withheld by CITY. This Agreement is personal to the TENANT and any attempt to assign it to a third party, without CITY's prior consent, will terminate this Agreement. CITY understands that TENANT charges desk fees to realty and yacht sales and services associates which shall not constitute subletting.
26. Termination for Cause.
All terms, provisions, and specifications of this Agreement are material and binding, and failure by TENANT to perform as described therein shall be considered a breach of this Agreement. Should the Agreement be breached in any manner by TENANT, and if (within thirty (30) calendar days after TENANT has received written notification to remedy the violation) TENANT has not cured the breach or, if the breach cannot be reasonably cured within such time period, if TENANT has not commenced the cure within such time period, diligently continued to pursue such cure, and completed it within thirty (30) calendar days after such notice, the CITY may, at its option, terminate this Agreement at any time thereafter by giving notice to TENANT at least five (5) business days before the termination is to be effective.
Should the CITY at any time terminate this Agreement under CITY's express rights set forth in this Agreement for any breach, CITY may, in addition to any other remedy it may have, recover from TENANT all damages incurred by reason of the breach, including the cost of recovering the Premises and any and all rents owed by TENANT up to the term of this Agreement.
27. Default by Tenant. Should TENANT at any time be in default with respect to payment of rent for a period of ten (10) days after written notice from CITY; or should TENANT be in default in the performance of any other of its obligations under this Agreement for thirty (30) days after written notice from CITY specifying the particulars of the default; or should TENANT vacate and abandon the Premises; or if a petition in bankruptcy or other insolvency proceeding is filed by or against TENANT, without dismissal within thirty (30) Attachment 1
7 days of filing; or if TENANT makes any general assignment for the benefit of creditors or composition; or if a petition or other proceeding is instituted by or against the TENANT for the appointment of a trustee, receiver, or liquidator of TENANT or of any of TENANT's property pursuant to laws for the benefit of creditors; or if a proceeding is instituted by any governmental authority for the dissolution or liquidation of TENANT; then and in any such events, CITY, in addition to other rights or remedies it may have, shall have the immediate right of reentry in the Premises, and after five (5) days prior written notice to TENANT, may remove all persons and property from the Premises.
a. The property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of, TENANT.
b. Should CITY elect to reenter, this Agreement shall be deemed terminated; provided, however, that CITY shall be entitled as against TENANT to the measure of damages provided by law, namely the difference between the rent for the balance of the term of this Agreement following the day of reentry and the amount of rent CITY receives during that period from any subsequent tenant of the Premises. c. CITY shall in such event have no obligation to re-let the Premises.
28. Redelivery of Premises. TENANT agrees to redeliver to CITY the physical possession of the Premises at the termination of this Agreement, in good condition, excepting reasonable wear and tear, and damage by fire or from any other cause not attributable to the willful or negligent act of the TENANT, or its employees, agents, invitees, or visitors.
29. Indemnification. TENANT agrees to indemnify, defend, and hold harmless the CITY, and its elected and appointed officers, officials, employees, and agents (including Marina Manager/Agent), ("CITY Indemnitees") from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable attorneys' fees and costs of litigation ("claims"), arising from TENANT's negligent or wrongful acts, errors, or omissions, or the negligent or wrongful acts, errors, or omissions of TENANT's officers, directors, shareholders, members, contractors, customers, agents, guests, invitees or employees arising out of or in any way connected with the use of the Premises and Building by TENANT under this Agreement. In the event the CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding alleging negligent or wrongful conduct on the part of TENANT:
a. TENANT shall provide a defense to the CITY's Indemnitees, or at the CITY's option, reimburse the CITY's Indemnitees for all costs, attorneys' fees, expenses and liabilities (including judgment or portion thereof) incurred with respect to any litigation in which the TENANT is obligated to indemnify, defend and hold harmless the CITY pursuant to this Agreement.
b. TENANT' s obligation herein does not extend to liabilities, claims, demands, causes of action, losses, damages or costs that arise out of the CITY's intentional wrongful acts, CITY'S violations of law, or the CITY'S sole active negligence. c. This provision shall not be limited by any provision of insurance coverage the Attachment 1
8 TENANT may have in effect, or may be required to obtain and maintain, during the term of this Agreement. This provision shall survive expiration or termination of this Agreement.
30. Insurance. TENANT shall procure and maintain, at its own cost and expense, for the term of this Agreement, the following insurance policies:
a. General Liability Coverage. TENANT shall maintain commercial general liability insurance in an amount of not less than two million dollars ($2,000,000) for each occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, the general aggregate limit shall be at least twice the required occurrence limit.
b. Endorsements. The general liability insurance policy shall be issued by insurers admitted in California possessing a Best's rating of no less than A:VII and shall be endorsed with the specific language below.
1. "The City of Coronado, its elected and appointed officers, officials, employees, agents (including Marina Manager/Agent), and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of Yacht and Home, Inc."
2. "This policy shall be considered primary insurance as respects the City of Coronado, its elected and appointed officers, officials, employees, agents (including Marina Manager/Agent), and volunteers. Any insurance maintained by the City of Coronado, including any self-insured retention the City of Coronado may have, shall be considered excess insurance only and shall not contribute with this policy."
3. "This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company."
4. "The insurer waives all rights of subrogation against the City of Coronado, its elected and appointed officers, officials, employees, or agents (including Marina Manager/Agent)."
5. "Any failure to comply with reporting requirements of the policies shall not affect coverage provided to the City of Coronado, its elected and appointed officers, officials, employees, agents (including Marina Manager/Agent), and volunteers."
6. "The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) days written notice has been received by the City of Coronado." c. Deductibles and Self-Insured Retentions. Any deductibles or self-insured Attachment 1
9 retentions must be declared to and approved by the CITY. At the CITY'S option, TENANT shall demonstrate financial capability for payment of such deductibles or self-insured retentions.
d. Certificates of Insurance. TENANT shall furnish certificates of insurance and original policy endorsements to the CITY as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the Office of the City Manager. Current certification of insurance shall be kept on file with the CITY at all times during the term of this Agreement.
e. Failure to Maintain Insurance. Failure on the part of TENANT to procure or maintain required insurance shall constitute a material breach of contract under which the CITY may terminate this Agreement pursuant to Paragraph 23.b above.
31. Attorneys' Fees. If either party is required to place the enforcement of all or any part of this Agreement, the recovery of possession of the Premises, or if legal proceedings are commenced by either party against the other party to protect or enforce rights or obligations under this Agreement, the prevailing party, whether as Plaintiff or Defendant, shall be entitled to recover its reasonable attorneys' fees and costs.
32. Subordination. This Agreement is subject and subordinate to all mortgages and deeds of trust which may now or hereafter encumber the Premises, the Building or any appurtenances thereto, or any Agreements, renewals or modifications related thereto. This clause shall be self-operative and no further instruments of subordination shall be required in order for this clause to be effective. TENANT hereby agrees to execute, within ten (10) days of a request, any and all reasonable instruments in writing required by CITY or any lender to subordinate TENANT's rights acquired by this Agreement in accordance with this clause.
33. Landlord's Lien. CITY shall have at all times a valid lien for all rentals and other sums of money becoming due under this Agreement from TENANT, subject to any purchase money liens orsecurity interests outstanding from time to time to third parties, on all goods, wares, equipment, fixtures, furniture, and other personal property of TENANT, situated on and in the Premises, and after notice of default is given by CITY such property shall not be removed from the premises without the consent of CITY until all arrearages in rent as well as any and all other sums of money then due to CITY under this Agreement shall first have been paid and discharged.
a. TENANT hereby grants a security interest, subject to any purchase money liens or security interests executed by TENANT outstanding from time to time to third parties, in that personal property, and the lien hereby granted may be foreclosed in the manner and in the form provided by law for foreclosure of a security interest under the Uniform Commercial Code of the State of California, or in any other manner and form provided by law.
b. The statutory lien for rent is not hereby waived, but the express contractual lien herein granted is in addition and supplemental thereto.
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10 34. Nondiscrimination. The TENANT herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this Agreement is made and accepted upon and subject to conditions:
That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Premises herein leased nor shall the TENANT himself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Premises herein leased.
35. Entire Agreement. This Agreement for Office Space terminates and supersedes any and all other agreements, either oral or written, between the parties, and contains all of the covenants and agreements between the parties. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party which are not embodied herein.
Any agreement, statement, or promise not contained in this Agreement, and any modification to this Agreement, will be effective only if signed by both parties.
36. Waiver. Failure of either party to require strict performance by the other of any Agreement provisions shall not affect its rights with respect to continued or subsequent breaches.
37. Mutuality. All covenants and conditions in this Agreement are mutually dependent.
38. Severability. In the event that any part of this Agreement is found to be illegal or unenforceable under the law as it is now or hereafter in effect, either party will be excused from performance of such portion or portions of this Agreement as shall be found to be illegal or unenforceable without affecting the remaining provisions of this Agreement.
39. Governing Law. This Agreement will be deemed to be executed and delivered in San Diego County, California, and governed by the laws of the State of California, regardless of conflicts of law principles. Any action to enforce or interpret this Agreement shall be brought in the Superior Court for San Diego County. TENANT hereby expressly waives any right to remove any such action from San Diego County as is otherwise permitted by Code of Civil Procedure Section 394.
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11 40. Notice. Wherever in this Agreement it is required or permitted that notice or demand be given or served by either party on the other, such notice or demand shall be deemed given orserved when written and hand delivered, or deposited in the United States Mail, certified, return receipt requested, postage prepaid, addressed as follows:
City Manager Nathaniel Barre
City of Coronado Yacht and Home, Inc.
1825 Strand Way 1715 Strand Way, Suite B/C
Coronado, CA 92118 Coronado, CA 92118
IN WITNESS WHEREOF, the CITY and TENANT have executed this Lease Agreement for Office Space on this 6
th day of March 2024.
______________________________ ______________________________ City Manager Nathaniel Barre
City of Coronado Yacht and Home, Inc.
Date: ________________________ Date: __________________________ APPROVED AS TO FORM:
_____________________________
Johanna Canlas, City Attorney
Date: ________________________
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