LEASE AGREEMENT BETWEEN THE
CITY OF GONZALES AND PISONI FARMS
THIS LEASE ("Lease") dated as of November 1, 2023, is entered into between City of Gonzales, a Municipal Corporation, ("Landlord") and Pisoni Farms ("Tenant").
RECITALS
1. Landlord previously purchased 3.114 acres of property (The “Premises”) from DKB homes with the intent of constructing a public park.
2. At the time of the purchase of the Premises, the land was used for agricultural purposes and Landlord agreed to allow the Premises to be used for such purposes until such time as Landlord actually constructs park facilities. The Premises was used for agricultural purposes pursuant to the terms of a previous lease that expired in or around 2008.
3. The Parties now desire to enter into a lease for agricultural purposes for a maximum term of less than five (5) years.
NOW THEREFORE, for good and valuable consideration,the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:
Section 1. Premises
Landlord leases to Tenant and Tenant leases from Landlord the real property located in the County of Monterey, City of Gonzales, State of California, consisting of approximately 2.92 acres and described as APN 020-343-003 ("Premises"), as specifically described on Exhibit A, which is incorporated by reference.
Tenant expressly acknowledges and agrees that the Premises are being leased and accepted in their "as is," with all faults condition, without representation or warranty of any kind. Tenant agrees that neither Landlord or any of its agents have made any representations or warranties; express or implied, with respect to the physical, structural or environmental condition of the Premises or the future suitability of the Premises for the conduct of Tenant's intended business.
Section 2. Term
The term of this Lease is for an initial three-year period ("Term"), commencing on November 1, 2023, and ending on October 31, 2026, unless terminated earlier by Landlord's provision to Tenant of written notice that said term will end on a date not less than 60 days from the date of the mailing of said notice. Said termination is within Landlord’s sole discretion and may be exercised without establishing cause or
explanation.
The initial three- year period may be extended by a Lease Amendment for a period not to exceed twenty-three (23) months upon mutual agreement by both parties.
Section 3. Rent
a) Tenant agrees to pay to Landlord Three Thousand, Eight Hundred Fifty-Five dollars ($3,855.00) per year. Payment is due November 1st of each year. b) In the event the Tenant fails to pay rent by the close of business by the fifth (5th) day of November or the Tenant’s check is returned by the financial institution on which it is drawn for insufficient finds, the Tenant shall pay Fifty Dollars ($50) as a late fee (the “Late Payment Penalty”). The Late Payment Penalty must be included with the rent payment.
c) The annual Lease amount will increase on each anniversary of the commencement date by the higher of either 3.0% or the annual percentage increase of the Consumer Price Index (“CPI”). For purposes of this Agreement, CPI means the Consumer Price Index for Urban Consumers, San FranciscoOakland-San Jose published by the Bureau of Labor Statistics of the United States Department of Labor.
d) Landlord acknowledges that no back rent or real property taxes are owing from Tenant or any sublessees for any possession of the Premises prior to the commencement of theTerm.
Section 4. Use
The Premises are to be used for farming of irrigated vegetable crops and related purposes. No part of the Premises shall be used for any different purpose. Tenant shall not do or permit any act to be done that will increase the existing rate or cause cancellation of insurance on the Premises . Tenant shall comply with all statutes, ordinances, regulations, and other requirements of all governmental entities that pertain to the occupancy or use of the Premises, and with all rules and regulations that are adopted by Landlord for the safety, care, and cleanliness of the Premises and the preservation of good order on the Premises.
Section 5. Taxes and Assessments
This Lease may create a taxable possessory interest, the timely payment of which, together with any other taxes or assessments imposed against Tenant or the activities of the Tenant shall be paid by Tenant before they become delinquent. Landlord shall be responsible for the payment of all real property assessments imposed on the Property by any improvement district or special taxing authority, to the extent applicable.
Section 6. Insurance
Tenant shall pay for and maintain insurance throughout the life of this Lease with General Liability coverage of $1,000,000 minimum coverage per occurrence and $2,000,000 aggregate. Tenant will furnish Landlord with proof of insurance issued by an insurer approved by Landlord showing the coverage to be in force and showing Landlord, its elected and appointed officials, employees and agents as named insureds for all periods of the Term. Landlord, and Tenant each waive the rights of subrogation that may arise against the other because of any act covered by insurance.
Section 7. Default
Each of the following shall be an Event of Default under this Lease:
a) If Tenant fails within five (5) days after written notice to make any payment required by the provisions of this Lease, when due;
b) If Tenant fails within thirty (30) days after written notice to correct any breach or default of the other covenants, terms, or conditions of this Lease; and c) If Tenant vacates, abandons, or surrenders the Premises prior to the end of the Term.
Section 8. Remedies
Upon the occurrence of an Event of Default under this Lease by Tenant, Landlord is entitled at Landlord's option to the following:
a) to reenter and take exclusive possession of thePremises; b) to collect immediately the present value of the unpaid rent reserved for the entire term, or to collect each installment of rent as it becomes due; c) to continue this Lease in force or to terminate it at any time; d) to relet the Premises for any period on Tenant's account and at Tenant's expense, including real estate commissions actually paid, and to apply the proceeds received during the balance of Term to Tenant's continuing obligations under this Lease;
e) to recover from Tenant the damages described in Civil Code §§ 1951.Z(a)(l), 1951.2(a)(2), 1951.2(a)(3), and l 951.2(a)(4), the provisions of which are expressly made a part of this Lease;
f) to restore the Premises to the same condition as received by Tenant, or to alter
the Premises to make them suitable for reletting, all at Tenant's expense; and g) to enforce by suit or otherwise all obligations of Tenant under this Lease and to recover from Tenant all remedies now or later allowed by law.
Section 9. Maintenance and Repairs
Tenant acknowledges that the Premises are in good and safe condition and, agrees to maintain the Premises in good and safe condition. Tenant shall have the sole responsibility and duty, at Tenant's cost, to keep, maintain in good condition, and to repair as necessary, the Subject Property, and all improvements, alterations and fixtures as the same may currently exist and as may subsequently be located thereon. Tenant promises to surrender the Premises at termination of this Lease in the same condition as received, except for normal wear and tear and except for minor changes authorized by Landlord. Tenant agrees to make no repairs at the expense of Landlord.
Section 10. Assignment and Subletting
Tenant shall not encumber, assign, or otherwise transfer this Lease, any right or interest in this Lease, or any right or interest in the Subject Property or any improvements that may now or hereafter be constructed or installed on the Subject Property without first obtaining the express written consent of Landlord. The consent of Landlord to any assignment of Tenant 's interest in this Lease or the subletting by Tenant of the Subject Property or parts of the Subject Property shall not be unreasonably withheld.
Section 11. Indemnity
Tenant agrees to indemnify, hold harmless, and defend Landlord, its elected and appointed officials, employees, and agents from all claims and liability of every kind, including court costs and attorney's fees, arising in any way from any occurrence on the Premises, or related to the use or occupancy, specifically including, without limitation, any claim, liability, loss, or damage arising by reason of: (a) the death or injury of any person or persons, including persons who are employees, agents or sublessees of Tenant, or by reason of the damage to or destruction or contamination of any property, including property owned by Tenant or any person who is an employee, agent or sublessee of Tenant, and caused or allegedly caused by either the condition of the Premises, or some act or omission of Tenant or of some employee, agent, sublessee or administrator of Tenant; (b) any work performed on the Premises or materials furnished to the Premises at the instance or request of Tenant or any employee, agent, or sublessee of Tenant, and (c ) Tenant’s failure to perform any provision of this Lease or to comply with any requirement of law or any requirement imposed on Landlord or the Premises by any duly authorized governmental agency or political subdivision. Nothing in this Lease shall require Tenant to indemnify Landlord against liability to third persons resulting from the sole negligence or willful misconduct of Landlord.
Section 12. Landlord's Right to Perform for Tenant
If Tenant fails to perform any obligation under this Lease, Landlord shall be entitled to make reasonable expenditures to cause proper performance on Tenant's behalf and at Tenant's expense, and Tenant promises to reimburse Landlord for any expenditures within ten (10) days after written notice from Landlord requesting reimbursement, and failure of Tenant to make the reimbursement shall be deemed to be a default the same as a failure to pay an installment of rent when due. All obligations of Tenant to pay money are payable without abatement, deduction, or offset of any kind. Landlord shall have the right to enter the Premises at all reasonable times for the purpose of inspection, posting notices, or other lawful purposes.
Section 13. Notices
Any notice under this Lease shall begiven bymailing the notice, postage prepaid, by certified mail, return receipt requested or by any regional or nation overnight carrier, to Landlord and Tenant as the case may be to an address designated in writing by each party.
Section 14. Attorney Fees
In any action or proceeding by either party to enforce this Lease or any provision of this Lease, the prevailing party shall be entitled to recover reasonable attorney's fees and all other costs incurred.
Section 1566 Successors
The provisions of this Lease shall apply to and bind the heirs, successors, and assigns of the parties.
Section 16. Waiver
The failure of Landlord to enforce a provision of this Lease shall not be deemed a waiver for any purpose.
Section 17. Entire Agreement
This Lease, together with each attached exhibit, shall constitute the entire agreement of the parties, and may be modified only by a writing signed by the parties.
Section 18. Amendments
This Lease may be amended at any time and from time to time, provided that no amendment to this Lease shall be legally enforceable against Landlord or Tenant unless it is signed in writing, executed, and acknowledged by both parties.
Section 18. Governing Law
This Lease shall be governed by and construed in accordance with California law.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first written above.
LANDLORD:
City Manager
City of Gonzales
PO Box 647
147 Fourth Street
Gonzales, CA 93926
By: _______________________
Carmen Gil, City Manager
Date: ______________________
TENANT:
Pisoni Farms
Mark Pisoni
PO Box 908
28275 Alta Street
Gonzales, CA 93926
By: __________________________
Mark Pisoni
Date: _________________________