BILLBOARD LEASE
between
CITY OF GONZALES,
a California Municipal corporation
(“City”)
and
Legacy Sign Company
(“Tenant”)
Billboard Lease
This Billboard Lease (“Lease”) is effective as of October __, 2024 (the “Effective Date”), and is between the City of Gonzales, a California municipal corporation (“City”), and Legacy Sign Company (“Tenant”).
RECITALS
A. City owns that certain real property (the “Property”) legally described in Exhibit A and depicted on Exhibit B, and located in the City of Gonzales, County of Monterey, State of California, in proximity to U.S. Route 101.
B. U.S. Route 101 is a heavily traveled route for commuters, tourists, and commercial vehicles traveling through the community daily to reach various destinations throughout California.
C. The City has determined that having a Digital Billboard (as defined below) in town advertising off the 101 supports the City’s mission and vision. The tenant agrees to obtain all Permits for the construction and operation of the Billboard Project (as defined below). “Digital Billboard” means that certain two-sided LED electronic sign panel, as shown on the attached Exhibit C, which is to be attached, subject to the terms and conditions of this Lease, to the Sign Structure (as defined below). “Sign Structure” means the portion of the Billboard Project other than the Digital Billboard. and it includes all ancillary equipment and utilities installed on the leased portion of the Property, (the “Premises”) by Tenant in connection with the construction and operation of the Billboard Project. The Sign Structure is more particularly described Exhibit C. “Billboard Project” means, collectively, the Digital Billboard and Sign Structure that Tenant will construct on the Premises in accordance with the plans attached as Exhibit C and criteria set forth in this Lease.
D. The Gonzales City Council has determined that it is in the best interests of City, and for the common benefit of the citizens residing in the City, to enter into this Lease with Tenant for the construction, operation, and maintenance of the Billboard Project on the Premises.
E. City desires to lease to Tenant, and Tenant desires to lease from City, the Premises, all as further set forth in this Lease.
AGREEMENT
ARTICLE 1
REPRESENTATIONS AND WARRANTIES OF PARTIES
The representations and warranties set forth in this Article 1 are made as of ___ (The Effective Date).
1.1 Each party represents and warrants to the other that it has the power and authority to enter into this Lease, and that this Lease is the valid and a binding obligation of such party and is enforceable against it in accordance with its terms.
1.2 City and Legacy Sign Company (Tenant) represent and warrant to each other that neither has dealt with any broker in connection with this Lease. City and Tenant shall indemnify the other against, and hold each other harmless from, any claim of, or liability to, any other broker or any party with whom City or Tenant shall have dealt in connection with this Lease.
1.3 City represents that it is the owner of the Premises and that the Premises is not subject to any monetary lien or encumbrance, other than (a) such easements, covenants, conditions, restrictions, reservations and other matters of record; (b) all matters discoverable by physical inspection of the Premises or that would be discovered by an accurate survey of the Premises; and (c) the presence and location of utilities on the Premises. Notwithstanding the foregoing, City represents and warrants to Tenant that, as of the Effective Date, no lien or encumbrance affects the Premises that would impair Tenant’s ability to construct and operate the Billboard Project on the Premises, as contemplated by this Lease.
1.4 Without limiting the City’s other representations and warranties set forth in this Lease, City represents and warrants to Tenant that: (i) to City’s current knowledge there are no pending or threatened actions, suits or proceedings before any court or administrative agency against City which could, in the aggregate, adversely affect the Premises or any part thereof, or the ability of City to perform its obligations under this Lease, and City is not aware of any facts which might result in any such actions, suits or proceedings: (ii) City has no knowledge of any security interest encumbering the Premises; (iii) City is duly authorized to perform or to cause to be performed all of the obligations of the City under and in accordance with the terms and conditions of this Lease.
1.5 City agrees that Tenant’s ability (and obligations hereunder) to develop and operate the Billboard Project is dependent upon Tenant obtaining all Permits (as defined below). City agrees to cooperate with Tenant with respect to Tenant pursuing the issuance of the Permits. Upon any termination, all rights and obligations of City and Tenant will be of no further force or effect except for obligations expressly stated as surviving termination of this Lease. “Permit” shall mean all local and state governmental permits and approvals and any other required permits and approvals necessary for the development and operation of the Billboard Project: provided, no Permit shall be deemed to be received by, or issued to, Tenant if (A) there exists any unexpired appeal, contest, challenge or review periods for the issuance of such Permit, (B) an appeal,
contest, challenge (including, without limitation, a Project Approval Challenge (as defined below)or review has been filed with respect to such Permit and the same has not been resolved on terms satisfactory to Tenant in its good faith business judgment, or (C) such Permit is only available with conditions unacceptable to Tenant in its good faith business judgment.
ARTICLE 2
LEASE OF PREMISES
2.1 Leasing of the Premises. City hereby leases a sub portion of the Property, hereinafter the Premises, as defined in Exhibit A.1 to the Tenant for the agreed upon uses defined below, upon the covenants, terms, and conditions set forth in this Lease.
2.2 Plans and Design Review. Tenant shall prepare complete plans and specifications for the Billboard Project as set forth in Exhibit C, working closely with City to develop plans and specifications that are mutually acceptable to the City and Tenant. Such plans and designs shall not include chain link fencing, gates or other wired or masonry fencing to demarcate or secure the Premises. All Plans must be submitted by Tenant to City for final approval. The Billboard Project shall be designed to comply with all applicable laws.
2.3 Conditional Use Permit Review. Within thirty (30) days after Tenant’s receipt of the City Initial Concept Approval, Tenant must apply for and diligently pursue all necessary planning, building, electrical and other Permits for the Billboard Project that are required by the City. The date upon which Tenant first submits its application for the City Permits shall be referred to herein as the “City Permit Submittal Date.” If Tenant does not obtain the City Permits on or before the first-year anniversary of the City Permit Submittal Date, then Tenant shall have the right to terminate the Lease.
2.4 Caltrans Permit Review. Within thirty (30) days after Tenant’s receipt of the City Permits, Tenant must initiate the application process for, and thereafter pursue Permits for the Billboard Project (“Caltrans Permits”) that are required by the California Department of Transportation (“Caltrans”). The date upon which Tenant first submits its application for the Caltrans Permits shall be referred to herein as the “Caltrans Permit Submittal Date.” During the Term, the Tenant shall perform all obligations under the Caltrans Permits at no cost to City. If Tenant does not obtain the Caltrans Permits on or before the first-year anniversary of the Caltrans Permit Submittal Date, then Tenant and/or City shall have the right to terminate the Lease; provided, if Tenant has been pursuing the Caltrans Permits with commercially reasonable and diligent efforts, then Tenant shall have the right to extend such period to obtain the Caltrans Permits by two (2) additional six (6) month periods by providing notice to City prior to the expiration of the applicable period.
2.5 Design and Construction. Tenant shall begin the work of design and construction of the Billboard Project as soon as possible after the Effective Date, and Tenant shall pursue such work to completion without interruption so that the Digital Billboard is operational by the one hundred eightieth (180th) day after the date on which all Permits are obtained. Tenant will be excused, however, for any delays in beginning or completing such work that are caused by a Force
Majeure Event. Tenant must use reasonable diligence to avoid such delays and to resume work as promptly as possible.
2.6 Permitted Access. Notwithstanding anything herein to the contrary, from the Effective Date through the expiration, or earlier termination, of this Lease, Tenant will be permitted to access and use the Property for (a) any and all purposes in connection with the design and construction of the Billboard Project and any other work in order to make the Digital Billboard Operational, and (b) any other legally permitted use consistent with this Lease.
ARTICLE 3
LEASE TERM
3.1 Term. This Lease becomes effective upon its execution by both parties (the ”Effective Date”), provided however that the intiial term shall be for a period of twenty five (25) years and shall start on the ”Rent Commencement Date” as herein defined. The Rent Commencement Date shall start upon the date the constructed sign is able to display advertising, or within eighteen (18) months of the Effective Date of the Lease, whichever is sooner. If unforeseen circumstances delay the Commencement Date, the Tenant shall request in writing an extension of up to six (6)-months from the City Manager, which shall not be unreasonably denied. The Tenant shall be eligible for a second extension of up to but not to exceed six (6)-months , if necessary, but only if the cause of delay is significant and satisfactory to the City. If the delay is not justified, the City can deny the request for the extension and terminate the Lease. The term of the Lease will expire on the twenty-fifth (25th) anniversary of the Commencement Date. Upon Tenant’s written submission to the City Manager of a request to extend the Lease’s expiration date, sent at least six (6) months prior to said date, City and Tenant may mutually agree in writing to extend the term of the lease twice for terms of five (5) years each.
3.2 Expiration of Lease; Holding Over. This Lease will expire at the end of the 25-year Term unless the mutual five-year extension options are executed. If Tenant holds over on the Premises after the expiration of the Term, with the consent of City, such holding over will be construed to be only a tenancy from month-to-month, subject to all the covenants, conditions and obligations contained in this Lease that applied immediately prior to the expiration of the Term.
If the Tenant does hold over on the Premises after the Term, the Tenant agrees to continue paying the City the then applicable MAG or 20% of net advertising revenues (whichever is grater) plus the annual adjustment of 2% per year.
ARTICLE 4
RENT AND CIVIC PROMOTIONS AND USE
4.1 Rent. Beginning on the Effective Date Tenant shall pay the City rent in the amount of One Hundred Dollars ($100.00) for the period of time prior to the Rent Commencement Date.
Beginning on the Rent Commencement Date (when sign is operational), Tenant shall pay City $38,000 in base rent (MAG), the first year, in four quarterly installments. If the first period of
operation is not a full calendar year, then Tenant shall pay City a pro-rata share of the annual rent.
At the end of the first full calendar year of operation, and every calendar year thereafter, if 20% of the total net advertising sales revenues exceeds the $38,000 base rent (MAG) then the difference of those collected cash revenues shall be paid to the City in addition to the base rent.
Revenue share if applicable, will be calculated off of net cash collections at the end of the calendar year and be paid to the City by March 30th of the following year. The MAG shall increase by 10% every 5 years.
A. The City shall also receive a minimum of one spot on the sign at all times, plus two additional spots on space availability with up to 25 annual creative executions provided for City promotions and messaging.
B. Gonzales based businesses will receive a 25% discount on advertising space.
4.2 Remittance and Reporting.
A. Within 90 days, at the end of each calendar year, Tenant shall report and remit payment to City of the applicable billboard operating revenues set forth in Section 4 of this Agreement.
B. Tenant shall provide to the City advertising revenue reports (the “Advertising Reports”) for all advertising sales at the Subject Property. Reports shall include gross revenue collected, advertisers, advertising rates, and occupancy rates for the preceding period.
Revenue Share payments reflected in this report, if any, shall be paid to City by March 30 of the following year.
C. Tenant shall maintain adequate accounting systems and controls to ensure that all gross revenue is recorded. Tenant shall keep true and accurate books and records for a period of seven years after end of the Term as defined in Article 3 and all business transactions related to the Subject Property, and City shall have the right, through its representatives and at all reasonable times, upon at least 7 days’ prior written notice to Tenant, to inspect such books and records.
4.3 Requirements for All Digital Billboards.
A. Civic Promotions. Tenant agrees to provide free advertising time on the Digital Billboard to the City for the promotion of community events, tourism activity, and other civic interests of the City.
I. Tenant will provide City with graphic design services for up to 25 creative executions (drafts) per year. City must provide Tenant with any requested highresolution photography, logos or any other specific requested elements 30 days in advance of the requested date for the advertisement to be displayed.
II.
III. Process for City Requests to Utilize Advertising Space for Civic Promotions.
IV.
i. For emergencies or local missing persons notice; those will be submitted and expected to be produced and displayed within 24 hours of receipt by Tenant.
ii. For City submitted “camera ready artwork” created by City and which uses formats and protocols acceptable to Tenant; artwork should be submitted to Tenant at least ten (10) business days prior to the requested posting date.
iii. For Tenant created “camera ready artwork”, City may provide Tenant with advertisement copy at least thirty (30) days before the proposed display date of the Civic Promotion,
V. Limitations. City shall not charge for, or exchange goods or services for, any advertising space on the Digital Billboard provided by Tenant to City pursuant to this Agreement. In addition, it is expressly understood and agreed that Civic Promotions may not include any names, logos, marks, products, or services associated with any commercial entity, any campaign for public office in the City, or any third-party nongovernmental person or entity that is not located in, sponsored by or affiliated with the City. The forgoing limitation shall not be construed to prohibit the display of names, logos, or marks of organizations associated with City events or activities.
B. Public Safety Announcements. Tenant shall utilize the advertising space on the Digital Billboards for regional emergency announcements and alerts, including but not limited to Amber Alerts and “wanted” criminal postings from law enforcement, without charge, as reasonably requested by the City, in accordance with applicable local, regional, and/or state protocols.
C. Unacceptable Content. Tenant agrees not to utilize the Digital Billboard to advertise tobacco products, cannabis, adult entertainment businesses or conferences/conventions for any of the foregoing prohibited uses, sexually explicit messages, or any violent, hate, or other obscene messaging.
4.4 Annual Review. During the term of this Agreement, the City shall annually review the extent of good faith compliance by the Tenant with the terms of this Agreement. Tenant shall file an annual report with the City containing detailed information regarding compliance with the terms of this Agreement no later than March 30th of each calendar year.
ARTICLE 5
USE OF PREMISES
5.1 Condition of Premises. The Premises and all improvements thereon, are being leased to Tenant in its current, existing, “AS IS” condition (refer to Exhibit A). City makes no representations or warranties of any kind, express or implied, written or oral, about any of the
following: the physical condition of the Premises; the costs of conducting Tenant’s business on the Premises; the condition of the soils or ground waters of the Premises; or the condition or location of any improvements, such as utilities, on, above or below the Premises.
5.2 Permitted Use of Premises. Subject to any City usage, the Tenant has the right to display Off-site Outdoor Advertising (as defined below) on the Premises. City will not authorize any other new Off-site Outdoor Advertising permits or conversions of existing static to digital off-site billboards within the City limits 3,000 feet of this sign throughout the life of this Agreement.
(a) Constructing, operating, maintaining, repairing, improving, the Digital Billboard, the Sign Structure, and any utilities installed in connection with the Billboard Project. (b) Installing and maintaining utility wires, poles, cables, conduits, and pipes over or under the Premises from the nearest accessible public right-of-way that support the permitted operations of the Billboard Project as agreed to by City. (c) All rights of ingress and egress over the Premises that Tenant needs to access the Billboard Project under control of the City of Gonzales. In addition, City will do anything within its reasonable ability to provide access to property through neighboring property owners without cost to the City. Should access to the sign become restricted causing the sign to become inoperable, rent payments to the City shall be abated until necessary repairs to the sign to become operable can be made.
(d) The use of the Billboard Project or any portion thereof, for any lawful purpose related to outdoor advertising.
5.3 Prohibited Uses.
5.3.1 Hazardous Substances. Neither Tenant nor any of Tenant’s representatives or agents may use, handle, store, transport, treat, generate, release or dispose of any Hazardous Materials (as defined below) anywhere in, on, under or about the Premises or any improvements thereon.
Notwithstanding the foregoing, Tenant may use, handle, store, transport, treat, generate, release or dispose of any Hazardous Materials in such limited amounts as are customarily used to renovate, operate, maintain, repair, improve, or remove outdoor advertising billboards, and so long as Tenant is at all times in full compliance with all applicable laws. Tenant shall cause any and all Hazardous Materials brought onto, used, generated, handled, treated, stored, released or discharged by Tenant or its authorized representatives on or under the Billboard Project, the Premises, or any improvements thereon to be removed therefrom and transported for disposal in accordance with applicable laws, including Hazardous Materials Laws (as defined below).
Tenant shall promptly notify City in writing upon its actual knowledge of: (a) any release or discharge of any Hazardous Material by Tenant or its authorized representatives; (b) any voluntary clean-up or removal action instituted or proposed by Tenant; (c) any enforcement, clean-up, removal or other governmental or regulatory action instituted or threatened against Tenant, or (d) any claim made or threatened by any person against Tenant, the Billboard Project,
the Premises, or any improvements thereon relating to Hazardous Materials or Hazardous Materials Laws. Tenant shall also supply to City as promptly as possible, and in any event within five (5) business days after Tenant receives or sends same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Billboard Project, the Premises, any portion thereof, or any improvements thereon or Tenant’s use thereof and concerning Hazardous Materials or Hazardous Materials Laws. In the event Tenant institutes a cleanup or removal action, Tenant shall provide copies of all work plans and subsequent reports submitted to the governmental agency with jurisdiction to City in a timely manner. “Hazardous Materials” means any and all pollutants, wastes, flammables, explosives, radioactive materials, hazardous or toxic materials, hazardous or toxic wastes. hazardous or toxic substances, carcinogenic materials or contaminants and all other materials governed, monitored, or regulated by any Federal, State or local Law or regulation, including the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Substances Account Act., and/or the Resources Conservation and Recovery Act, together with asbestos, asbestos-containing materials, hydrocarbons, polychlorinated biphenyl (“PCB”) or PCB-containing materials, petroleum, gasoline, petroleum products, crude oil or any fraction, product or by product thereof.
5.3.2 Unlawful Activities. Tenant may not use or permit the Premises to be used in any way that violates this Lease or any applicable law.
5.4 Unobstructed Use. City shall not allow any obstructions to the visibility of the billboard including but not limited to maintaining all landscaping located on property owned by the City that is adjacent to the Premises that the City has rights and/or obligations to maintain, and such maintenance shall be conducted to prevent any obstruction. If Tenant notifies City in writing that any obstruction on off-Premises City owned property exists which obstructs, impedes or reduces the view of the Digital Billboard from U.S. Route 101 and which did not exist as of the Effective Date, City shall make a diligent effort to address and remediate the obstruction of concern within thirty (30) days. If the identified obstruction is not removed by City within thirty (30) days, Tenant shall be permitted to remove such obstruction on the 31st day at the cost of the City with City approval. If in the opinion of the Tenant, the obstruction negatively effects the visibility of the advertising and thus, its ability to sell advertising, rent payments will be abated until the obstruction is remedied.
5.4.1 Tenant’s exercise of its rights under this Section 5.4 are in addition to any other remedies it may have under this Lease.
ARTICLE 6
CONSTRUCTION AND OPERATION OF THE BILLBOARD PROJECT
Subject to Section 2.2 above, Tenant shall design, construct, maintain and operate the Billboard Project on the Premises in accordance with the provisions of this Lease.
6.1 Plans and Specifications. At no cost to the City, Tenant shall prepare complete plans and specifications for the construction of the Billboard Project consistent with the terms of this
Lease. Tenant shall have the right to submit a request to adjust the height of the sign in accordance with the current City regulations at that time.
6.2 Maintenance. The Tenant shall be responsible for all the on-going repair, maintenance, installation, and operation costs of the Digital Billboard, the Sign Structure, and related improvements on the Premises at no cost to the City. As part of Tenant’s construction of the Billboard Project, Tenant shall cause the removal of the vegetation on the Premises that exists as of the Effective Date and cause new vegetation and/or trees to be planted thereon, all at Tenant’s sole cost. The Tenant shall also be responsible for maintaining the landscaping and keeping the Premises in reasonable condition, free from graffiti, accumulation of trash and other materials.
6.3 Damage or Destruction to the Billboard Project
6.3.1 Unsubstantial Destruction. Tenant shall promptly repair and restore those portions of the Billboard Project that are damaged or destroyed and that do not meet the definition of Substantial Destruction set forth in this subsection. The term “Substantial Destruction” means damage or destruction (a) to the Billboard Project in an amount equal to twenty percent (20%) or more of their replacement cost, as determined by Tenant and subject to confirmation by City or (b) that results in an adverse impact on the operation of the business of Tenant on the Premises, as determined by Tenant and subject to confirmation by City. Notwithstanding the foregoing, with respect to any damage or destruction to Billboard Project, if (i) applicable laws then in effect do not permit restoration in accordance with the plans of Tenant, (ii) Tenant determines the repair and restoration cannot be completed within one hundred twenty days (120) days subsequent to the date of the damage or destruction, or (iii) there is less than five (5) years remaining in the Term, Tenant shall have the right to terminate this Lease upon notice to City.
6.3.2 Substantial Destruction. Within ninety (90) days after Substantial Destruction, Tenant shall elect to either: (a) repair and restore the Billboard Project; or (b) terminate this Lease upon notice to City.
6.3.3 Insurance Proceeds; Repair and Restoration Procedures. In the event of any damage or destruction to the Billboard Project, all insurance proceeds shall be paid to Tenant, unless there has been damage to City property and facilities beyond the Premises.
6.3.4 Rent Tolled During Repair Period. After Substantial Destruction, during the course of any repairs or restoration and until the Billboard Project is capable, legally and functionally, of displaying advertising content in the manner intended by Tenant under this Lease, payment of Rent shall be tolled until the Billboard Project is functional.
6.4 Utilities. At no cost to the City, Tenant shall provide and pay for all utility connections, utility equipment, and utility service required to construct, operate, maintain, repair, improve, or reposition the Billboard Project on the Premises throughout the Term. Tenant shall coordinate with City and the applicable utility companies for utility tie-ins and electrical power sources that Tenant may need to construct and operate the Billboard Project. Tenant shall also be responsible
for obtaining and paying for all easements, rights-of-way or other property rights necessary for utility installation.
6.5 Advertising. All advertising shall be subject to the following:
6.5.1 The Billboard Project is not intended to provide a general public forum for purposes of communication but rather to make use of property held by the City in a proprietary capacity in order to generate revenue.
6.5.2 Tenant may not display any message on the Digital Billboard that:
(a) Is inherently false, misleading, or libelous (i.e., speech that is incapable of being presented in a manner that is not misleading);
(b) Promotes the sale or use of firearms or tobacco products or vaping, whether directly or indirectly;
(c) Contains advertising for any cannabis dispensary;
(d) Promotes the sale of malt liquor. Of the overall advertising space throughout the year, no more than 5% to be utilized for Liquor and 10% for Beer. There is no restriction on the amount of advertising for Wine. (e) Promotes adult entertainment, products, conventions, events, or websites; (f) Contains “obscene matter,” as that term is defined in local, California or federal law, including but not limited to any statements or words of an obscene, indecent or immoral character, or any picture or illustration of any human figure in such detail as to offend public morals or decency or any other matter or thing of an obscene, indecent or immoral character; (g) Contains any “political advertising,” which means advertising that promotes or opposes any candidate for public office or promotes or opposes a ballot measure, referendum, bond issue, or any federal, state or local legislation, regulation, or other discretionary action; (h) Contains language that presents a clear-and-present danger of causing riot, disorder, or other imminent threat to public safety, peace, or order.
6.5.3 Tenant shall, within forty-eight (48) hours after written demand from City, at Tenant’s risk and expense, remove any advertising material or message that does not comply with the advertising criteria set forth in this section.
6.6 Removal of the Billboard Project
6.6.1 Tenant shall be responsible for the removal of the Billboard Project (and other improvements installed by, or at the direction of, Tenant) from the Premises and restore the Premises to its condition immediately prior to the date that City delivered control of the Premises to Tenant (with the exception of reasonable wear and tear, damage or destruction by environmental factors outside the control of the Tenant, and damage caused by parties other than Tenant and its employees and contractors) at the expiration of the Term of this Lease or upon termination of this Lease, unless the City waives Tenant’s removal obligation in writing. In the event this Lease is otherwise terminated or cancelled prior to the expiration of the Term, Tenant shall remove the Billboard Project and other improvements installed by Tenant from the Premises and restore the Premises to its condition immediately prior to the date that City delivered control of the Premises to Tenant (with the exception of reasonable wear and tear, damage or destruction by environmental factors outside the control of the Tenant, and damage caused by parties other than Tenant and its employees and contractors), unless the City waives Tenant’s removal obligation in writing. Tenant shall cause the removal as required under this Section 6.6 within thirty (30) days after the expiration of the Term or thirty (30) days after the date of early termination, whichever the case may be. Tenant shall be responsible for removing the entire Billboard from the Premises to 1 foot below the ground line or 3 feet below finished grade, whichever is lower.
6.6.2 If Tenant does not timely remove the Billboard Project and other improvements as required by this Section, City may, but shall not be required to, remove or cause the removal of the Billboard Project, and other improvements on the Premises as required by this Section, at Tenant’s expense. Tenant shall reimburse City within thirty (30) days of receipt of an itemized accounting of the cost for such removal and storage of any and all removed materials.
6.6.3 City and Tenant acknowledge and agree that Tenant shall be the exclusive owner and operator of the Billboard Project, and that all equipment comprising the Billboard Project shall remain the personal property of Tenant and shall not become fixtures of the Premises and City shall have no right, title or interest in the Billboard Project or any component of the Billboard Project, notwithstanding the manner in which the Billboard Project is or may be physically attached, mounted or adhered to the Premises.
6.7 Compliance with Law. During the Term and while removing the Billboard Project after the Term in accordance with Section 6.6 above, and subject to Section 7.6 below, Tenant, at no cost to City, shall comply with all valid and applicable statutes, ordinances, regulations, rules, and orders that concern Tenant’s use and occupancy of the Premises and the Billboard Project and are enacted or issued by any federal, state, or local governmental entity with jurisdiction over the Premises or the Billboard Project (including City) whether enacted or issued before, on, or after the Effective Date.
ARTICLE 7
EVENTS OF DEFAULT EARLY TERMINATION
7.1 Defaults by Tenant. Tenant will be in default under this Lease upon occurrence of any of the following:
7.1.1 Tenant is at any time in default in the payment of Rent or any other monetary sum called for by this Lease for more than thirty (30) days following Tenant’s receipt of written notice from City; or
7.1.2 Tenant is at any time in default in the keeping and performing of any of its other covenants or agreements herein contained, and should such other default continue for thirty (30) days after written notice thereof from City to Tenant specifying the particulars of such default, or if such other default is of a nature that curing such default will take more than thirty (30) days Tenant has failed to commence such cure within such thirty (30) day period and to thereafter diligently pursue completion of such cure.
7.2 City’s Remedies for Default by Tenant
7.2.1 Upon the occurrence and during the continuance of any such default beyond the 30-day period to cure, in addition to any and all other rights or remedies of City hereunder, City may terminate this Lease, at any time and in its sole discretion, effective ninety (90) days after City gives Tenant written notice of termination.
7.2.2 Anything in this Lease to the contrary notwithstanding, neither City nor Tenant shall be liable to the other under or in connection with this Lease for any consequential or punitive damages and each party waives, to the full extent permitted by applicable laws, any claim for consequential or punitive damages, and any claim for loss of business or profits.
7.3 City Remedies Cumulative. Each right and remedy of City provided for herein or now or hereafter existing at law or in equity, by statute or otherwise will be cumulative and will not preclude City from exercising any other rights or remedies provided for in this Lease or now or hereafter existing at Law or in equity, by statute or otherwise. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment of Rent will be deemed an accord and satisfaction of full payment of Rent; and City may accept such payment without prejudice to City’s right to recover the balance of such Rent or to pursue other remedies.
7.4 Default by City. City will not be in default under this Lease unless City fails to perform obligations required of City within thirty (30) days after written notice is delivered by Tenant to City specifying the obligation which City has failed to perform; provided, however, that if the nature of City’s obligation is such that more than thirty (30) days are required for performance, then City will not be in default if City commences performance within such 30-day period and thereafter diligently prosecutes the same to completion. All obligations of City hereunder will be construed as covenants, not conditions.
7.5 Tenant’s Remedies for Default by City. If the City is in default under this Lease beyond any applicable cure period, during the continuance of any such default, in addition to any and all other rights or remedies of Tenant hereunder, or by law or in equity provided, Tenant may terminate this Lease, at any time and in its sole discretion, effective thirty (30) days after Tenant gives City written notice of termination.
7.6 Tenant’s Early Termination Rights. Tenant may terminate this Lease effective ninety (90) days after Tenant gives the City written notice of termination, if any of the following circumstances occur:
7.6.1 The view of the Digital Billboard’s display area from the portion of U.S. Route 101 adjacent to the Premises is materially obstructed, and Tenant did not cause the obstruction.
7.6.2 Tenant cannot safely use the Premises to renovate, operate, maintain, repair, or improve the Billboard Project because of a non-remediable condition, and Tenant did not cause the condition.
7.6.3 There is a material diversion of traffic from, or a material reduction or change in the directional flow of traffic on, the portion of U.S. Route 101 adjacent to the Premises, and the diversion or disruption continues uninterrupted for at least six (6) consecutive months.
7.6.4 Through no fault of its own, Tenant cannot obtain or maintain the Permits required to construct, operate, maintain, repair, or improve the Billboard Project, including the Caltrans Permits and the City Permits, or there is a legal challenge (including, without limitation, a Project Approval Challenge) to such permits and approvals, including, but not limited to, any challenges under the California Environmental Quality Act, and Tenant elects, in its sole discretion, not to oppose such challenges, Tenant may withdraw its applications for approval and terminate this Lease.
7.6.5 Use of the Billboard Project for its intended purpose is prevented or limited by law, or Tenant is required by any court or other governmental entity, for reasons other than eminent domain, to remove any part of the Billboard Project from the Premises.
7.6.6 Tenant is unable to, or it is impractical to obtain or maintain (and any utilities required to operate the Billboard Project) through no fault of its own.
7.6.7 The City is in default under this Lease.
7.7 Tenant’s Right to Renegotiation. If any of the circumstances identified in Section 7.6 above occurs, then, at its discretion and in lieu of termination, Tenant may request that the City negotiate a reduction in the Rent to an amount that reasonably reflects the diminished value of the Billboard Project to Tenant, and on receiving the request the City will negotiate in good faith with Tenant. The City is not required, however, to agree on a reduction in Rent.
ARTICLE 8
TAXES
8.1 Taxes. Tenant shall pay without abatement, deduction, or offset any income taxes or possessory interest taxes levied on or assessed against the Billboard Project located on the Premises, Tenant’s equipment, fixtures, and personal property located on or in the Premises, which are directly attributable to this Lease or Tenant’s use of the Premises, whether belonging, owned, or chargeable against the City. Tenant shall make all such payments directly to the charging authority prior to delinquency and before any fine, interest, or penalty becomes due or is imposed for Tenant’s non-payment. Following prior request by City, Tenant shalt provide City with proof of payment of such tax.
8.2 Business License Required. Tenant is required to obtain a valid City of Gonzales Business License as one is required for all entities engaged in business operations within the City. It is unlawful for Tenant to display advertising on a billboard in the City of Gonzales (conduct business) without first having procured a City of Gonzales business license. City business licenses require annual renewal, and the cost of such may be adjusted by the City from time to time.
ARTICLE 9
EMINENT DOMAIN
9.1 Condemnation. The term “Condemnation” means any impairment of Tenant’s use of the Premises as a result of any act or omission of any governmental authority, including, without limitation, a change in the law, a public or private exercise of the power of eminent domain or the exercise of other government authority, such as alteration of a public street directly serving the Premises. The proceeds, including any judgment and interest, arising from any Condemnation are referred to herein as the “Award.” Whether this Lease is terminated or not terminated upon a Condemnation, the rights of City and Tenant shall be governed by this Article 9, which shall survive the termination of this Lease. The parties waive the right to seek a judicial termination of this Lease.
9.2 Allocation of Award. Any Award attributable to the Premises shall be allocated and paid to City, except Tenant shall receive the portion of the Award attributable to Tenant’s expenses for improvements at the Premises resulting from the Condemnation, the value of the leasehold estate of Tenant pursuant to this Lease and the fee estate of Tenant in and to the improvements at the Premises, and the cost to Tenant of removal and relocation of any improvements at the Premises. In addition to the foregoing, Tenant may separately pursue any claims for loss of good will to Tenant’s business, reestablishment benefits and moving expenses, business interruption, future sales revenues, and/or any other claim or right of recovery to which Tenant is entitled by applicable law.
9.3 Effect of Condemnation. Tenant may terminate this Lease on notice to City if Tenant determines the Condemnation will result in an adverse impact on the operation of the business of Tenant on the Premises. If Tenant fails to terminate this Lease upon a Condemnation, an
equitable adjustment in Rent and any other charges owed under this Lease shall be made, commencing on the date of the Condemnation, to reflect any diminution in the revenues of Tenant.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification of City. Subject to the waiver of subrogation contained in Article 11 below, Tenant shall defend City, its officers, employees and agents against and indemnify and hold City harmless from all claims, losses, liabilities and expenses, including, without limitation, reasonable attorneys’ fees and costs, asserted against or incurred by City in connection with: (a) any injury to or death of any person or the loss of or damage to any property occurring on the Property resulting from installation, operation, maintenance and removal of Billboard Project; (b) the failure of Tenant to perform any obligation of Tenant pursuant to this Lease; (c) the inaccuracy or falsity of any representation or warranty of Tenant in this Lease; and (d) the acts or omissions of Tenant and the agents, customers and invitees of Tenant; provided, however, that Tenant shall have no responsibility to City for the acts or omissions of City.
10.2 Indemnification of Tenant. Subject to the waiver of subrogation contained in Article 11 below, City shall defend Tenant against, indemnify and hold Tenant harmless from all claims, losses, liabilities and expenses, including, without limitation, reasonable attorneys’ fees and costs, asserted against or incurred by Tenant in connection with: (a) the failure of City to perform any obligation of City pursuant to this Lease; (b) the inaccuracy or falsity of any representation or warranty of City in this Lease; and (c) the acts or omissions of City and the agents, customers and invitees of City.
10.3 Hazardous Materials. City shall be solely responsible for all Hazardous Materials existing on, under or about the Premises and not caused or released by Tenant or any agent, employee, or contractor thereof (collectively, “Tenant Party”). City shall defend Tenant, its directors, officers, employees, agents, invitees, licensees, successors and assigns (collectively, the “Tenant Indemnitees”) against, indemnify and hold Tenant and the Tenant Indemnitees harmless from, all claims asserted against Tenant or any Tenant Indemnitee and any losses, liabilities or expenses incurred by Tenant or any Tenant Indemnitee, including without limitation, reasonable attorneys’ fees and costs, in connection with any Hazardous Material on, under or about the Premises and not caused or released by any Tenant Party, which obligation shall survive the cancellation or termination of this Lease. City shall be responsible for remediating in compliance with all applicable laws any contamination not caused or released by Tenant or any Tenant Party, which is located on, under or about the Premises without expense to Tenant. Tenant shall not cause or permit any Hazardous Materials to be brought upon, kept or used in or about the Premises by Tenant or any Tenant Party, except to the extent that such Hazardous Materials are necessary or useful to Tenant’s business (in which case such Hazardous Materials shall be used, kept and stored in a manner that complies with all applicable laws).
Tenant shall defend City, its officers, employees, agents, licensees, successors and assigns (collectively, the “City Indemnitees”) against, indemnify and hold City and the City Indemnitees harmless from, all claims asserted against City and the City Indemnitees and any losses, liabilities or expenses incurred by City and the City Indemnitees, including, without
limitation, reasonable attorneys’ fees and costs, as a direct result of a breach by Tenant of its obligations set forth in this Section 10.3, which obligation shall survive the cancellation or termination of this Lease; provided, however, that Tenant’s indemnity obligations pursuant to this Section shall not apply to any Hazardous Materials used, generated, transported, stored or disposed of by City or any City Indemnitee or any liability incurred or suffered as a result thereof.
ARTICLE 11
INSURANCE
11.1 Types of Policies. During the Term and, if Tenant is removing the Billboard Project pursuant to Section 6.6, during Tenant’s removal of the Billboard Project in accordance with Section 6.6, at no cost to City except as otherwise contemplated by this Lease, Tenant shall procure and maintain the forms and amounts of insurance covering Tenant’s possession and use of the Premises set forth in Section 11.1(a) and (b) below (“Tenant’s Insurance”). (a) Commercial General Liability Insurance. A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence and Four Million Dollars ($4,000,000) annual aggregate, providing coverage for blanket contractual liability including Tenant’s indemnification obligations under this Lease), premises liability, products and completed operations liability, broad form property damage, and bodily injury (including wrongful death) and advertising injury coverage. Such insurance shall be primary to and not contributing with any other insurance, self-insurance or joint self-insurance maintained by City, and shall name the City, its officers, employees and agents as an additional insured. (b) Auto Insurance. Commercial automobile liability insurance in the amount of one million dollars $1,000,000 combined single limit each accident for bodily injury and property damage covering all owned and non-owned and hired vehicles. Such insurance shall be primary to and not contributing with any other insurance, selfinsurance or joint self-insurance maintained by City, and shall name the City, its officers, employees and agents as an additional insured. (c) Workers’ Compensation and Employer’s Liability Insurance. Workers’ compensation insurance, if required by law, which complies with all applicable state statutes and regulatory requirements, and employer’s liability insurance coverage in statutory amounts. Tenant shall also require any contractor utilized to perform any services or work at the Premises pursuant to this Lease to maintain such workers’ compensation insurance and provide proof of such insurance prior to commencing any services or work at the Premises.
11.2 Insurer Qualifications. Tenant’s Insurance shall be written by companies licensed to do business in California and having a “General Policyholders Rating” of at least A-/VII (or such higher rating as may be required by a lender having a lien on the Tenant’s leasehold interest) as set forth in the most current issue of “Best’s Insurance Guide.”
11.3 Certificates of Insurance. Tenant shall deliver to City certificates of insurance for Tenant’s Insurance, in the form of the ACORD standard certificate of insurance, prior to construction with the execution of the Lease. Prior to expiration of the policy, Tenant will furnish City with certificates of renewal. Each certificate shall, if standard insurance industry practice, expressly provide that such casualty policies must not be cancelable except after 30 days’ prior written notice to the parties named as additional insureds as required in this Lease. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses and costs resulting from such failure.
11.4 Notice. Each of the policies shall require the insurer to give City at least 30 days’ advance written notice before the policy is cancelled.
11.5 Waiver of Subrogation. To the full extent permitted by law, City and Tenant each waive all rights of recovery against the other for, and agree to release the other from liability for, loss or damage to the extent such loss or damage is covered by valid and collectible insurance in effect at the time of such loss or damage or would be covered by the insurance required to be maintained under this Lease by the party seeking to recover.
ARTICLE 12
MISCELLANEOUS
12.1 Notices. Any notice or other communication to be given under this Lease shall be in writing and will be considered properly given and effective only when addressed to the persons identified below and (i) mailed postage prepaid by certified or registered mail, return receipt requested, or (ii) delivered by personal or courier delivery, or (iii) sent by facsimile (immediately followed by one of the preceding methods). Notices or communications will be deemed served upon the earlier of receipt or three (3) days after the date of mailing. A party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this Section 12.1.
To City:
City of Gonzales
Attn: City Manager
P.O. Box 647
Gonzales, CA 93926
(831) 675-5000
To Tenant:
Legacy Sign Company
Attn: Scott Smith
323 Tolak Road
Aptos, CA 95003
12.2 Assignments and Subleases. This Lease is binding upon the heirs, assigns and successors of both City and Tenant. City agrees not to assign this Lease to any competitor of Tenant without Tenant’s written permission. Tenant shall have the right to assign or sublet with a 90-day notification to the City, subject to City approval, which shall not be unreasonably withheld. Upon the assignment of this Lease in accordance with this Section 12.2, Tenant will be forever released of all obligations accruing after the date of the transfer. Any assignment, transfer, or sublease made contrary to this section will be null and void.
12.3 Successors and Assigns. Subject to the restrictions set forth herein, each of the terms, covenants and conditions of this Lease will extend to and be binding on and will inure to the benefit of not only City and Tenant but to each of their respective heirs, administrators, executors, successors and assigns. Whenever in this Lease reference is made to either City or Tenant, the reference will be deemed to include wherever applicable, the heirs, administrators, executors, successors and assigns of such parties, the same as if in every case expressed.
12.4 City’s Right to Enter and Inspect the Premises. City and its authorized representatives wil1 have the right to enter upon and inspect the Premises at reasonable times to determine Tenant’s compliance with this Lease. As the subject Premises is immediately adjacent to a city drainage utility, the City shall remain unencumbered from complete access to its public property.
12.5 Force Majeure
12.5.1 “Force Majeure Event” means a cause of delay that is not the fault of the party who is required to perform under this Lease and is beyond that party’s reasonable control, including the elements (including floods, earthquakes, windstorms, and unusually severe weather), fire, energy shortages or rationing, riots, acts of terrorism, war or war-defense conditions, acts of any public enemy, epidemics, the actions or inactions of any governmental entity (excluding City) or that entity’s agents, litigation, labor shortages (including shortages caused by strikes or walkouts), and materials shortages.
12.5.2 Except as otherwise expressly provided in this Lease, if the performance of any act required by this Lease to be performed by either City or Tenant is prevented or delayed because of a Force Majeure Event, then the time for performance will be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused. An extension of time for any such Force Majeure Event will be for the period of the enforced delay and will commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Lease may also be extended in writing by the mutual agreement of City and Tenant.
12.5.3 This Section 12.5 does not excuse (A) Tenant’s obligation to pay Rent when due and payable; or (B) either party’s obligation to perform an act when performance is rendered difficult or impossible solely because of that party’s financial condition. Tenant
expressly agrees that adverse changes in economic conditions, either of Tenant specifically or the economy generally, changes in market conditions or demand, and/or Tenant’s inability to sell advertising time on the Digital Billboard or other lack of funding, or to complete the construction of the Billboard Project will not constitute grounds of enforced delay pursuant to this Section 12.6. Tenant expressly assumes the risk of such adverse economic or market changes and/or financial inability, whether or not foreseeable as of the Effective Date.
12.6 Waiver of Breach. A party’s failure to insist on strict performance of this Lease or to exercise any right or remedy upon the other party’s breach of this Lease will not constitute a waiver of the performance, right, or remedy. A party’s waiver of the other party’s breach of any provision in this Lease will not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision. A waiver is binding only if set forth in writing and signed by the waiving party.
12.7 Relationship of the Parties; Not Third-Party Beneficiaries. This Lease does not create any relationship or association between City and Tenant other than that of landlord and tenant, and it is expressly understood and agreed that City does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant’s business or otherwise; nor does this Lease create between City and Tenant the relationship of principal and agent. The parties do not intend to create any third-party beneficiaries to the Lease.
12.8 Attorney’s Fees. In the event that any action is brought by either party as against the other party for the enforcement or declaration of any right or remedy in or under this Lease or for the breach of any covenant or condition of this lease, the prevailing party will be entitled to recover, and the other party agrees to pay, all fees and costs to be fixed by the court including, but not limited to, reasonable attorneys’ fees.
12.9 Severability. If any term, provision, condition or covenant of this Lease or its application to any party or circumstances is held, to any extent, invalid or unenforceable, the remainder of this Lease, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, will not be affected, and will be valid and enforceable to the fullest extent permitted by Law.
12.10 Memorandum of Lease. City will record with the County Recorder’s Office a memorandum of this Lease in the form attached as Exhibit D promptly after the execution of this Lease.
12.11 Further Assurances. Each party will execute all additional documents or instruments and take all necessary action that either party reasonably considers necessary to carry out the proper purposes of this Lease.
12.12 Estoppel Certificates. Either party shall, from time to time during the Term upon not less than 20 days’ prior written notice from the other party, execute, acknowledge and deliver to the other party, or such persons or entities designated by such other party, a statement in writing certifying: (a) the Effective Date and Expiration Date of this Lease as well as the Operational
Date of the Digital Billboard, (b) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the Lease is in full force and effect as modified and stating the modifications), (c) that there are no defaults under this Lease (or if so, specifying the same), (d) the dates, if any, to which Rent has been paid, and (e) any other information that may be reasonably required by any such persons or entities. Any such certificate delivered pursuant to the provisions hereof may be relied upon by the other party or any prospective purchaser or encumbrancer of its estate. The City Manager will be authorized to execute, acknowledge and deliver any such certificate on behalf of the City.
12.13 Time of Essence. Time is expressly made of the essence with respect to the performance by the parties of each and every obligation and condition of this Lease.
12.14 Interpretation. This Lease will be interpreted as though prepared jointly by both parties.
12.15 Integration and Modification. Exhibits A, B, C, D and E are expressly incorporated into and form a part of this Lease. This Lease constitutes the entire agreement between the parties and there are no conditions, representations or agreements regarding the matters covered by this Lease which are not expressed herein. It supersedes all prior or contemporaneous agreements, representations, and negotiations (written, oral, express, or implied) and may be modified only by another written agreement signed by both parties. City and Tenant agree to mutually consider reasonable requests for amendments to this Lease that may be made by either of them, provided such requests are consistent with this Lease and would not materially alter the basic business terms included in this Lease. No amendment will be effective unless in writing and signed by both parties.
12.15.1 EXHIBITS
A. Legal Description of the Premises
B. Depiction of the Premises
C. Digital Billboard and Sign Structure
D. Memorandum of Lease
E. Conditions of Approval from CUP Process. Planning Commission Resolution No.
PC 2024-03
F. Database of Definitions Referenced in Lease
12.16 Quiet Possession. So long as Tenant is not in default under this Lease and is paying the Rent and performing all of the covenants and conditions of this Lease, Tenant shall quietly have, hold and enjoy the Premises during the Term without interruption or disturbance from City or any other persons claiming by, through or under City.
12.17 Nonliability. No member, official or employee of either party will be personally liable to the other, or any successor in interest, in the event of any default or breach by a party or for any amount which may become due to a party or its successors, or on any obligations under the terms of this Lease. Each hereby waives and releases any claim it may have against the members, officials or employees of the other party with respect to any default or breach by such party or for any amount which may become due to the nondefaulting party or its successors, or on any obligations under the terms of this Lease.
12.18 Applicable Law; Venue. The laws of the State of California, without regard to conflict of law principles, will govern the interpretation and enforcement of this Lease. Any action to enforce or interpret this Lease must be filed in the Superior Court for the County of Monterey, California.
12.19 Commission. Each party represents to the other that it has not been represented by any broker in connection with this Lease, and that no real estate broker’s commission, finder’s fee or other compensation (individually and collectively, “Commission”) is due or payable. Each party agrees to indemnify and hold the other harmless from any claims or liability, including reasonable attorneys’ fees, in connection with a claim by any person for a Commission based upon any statement, representation or agreement of the other party.
12.20 Counterparts. The parties agree that this Lease may he executed in counterparts, each of which will be deemed an original, and said counterparts will together constitute one and the same agreement, binding all of the parties, notwithstanding all of the parties are not signatory to the original or the same counterparts. In order to expedite the transaction contemplated herein, facsimile, DocuSign, or .pdf signatures may be used in place of original signatures on this Lease.
City and Tenant intend to be bound by the signatures on the facsimile or .pdf document, are aware that the other party will rely on the facsimile or .pdf signatures, and hereby waive any defenses to the enforcement of the terms of this Lease based on the form of signature.
IN WITNESS WHEREOF, the parties have executed this Lease as of the Effective Date.
CITY:
CITY OF GONZALES, a California municipal corporation
By: ________________________________
Name:
Its:
ATTEST:
____________________________________
TENANT:
By: ________________________________
Name:
EXHIBIT A
LEGAL DESCRIPTION OF THE PREMISES
EXHIBIT B
DEPICTION OF THE PREMISES
EXHIBIT C
DIGITAL BILLBOARD AND SIGN STRUCTURE
* Final materials may change based on engineering and City building code requirements
EXHIBIT D
MEMORANDUM OF LEASE
IN WITNESS WHEREOF, Tenant and Landlord have executed this Memorandum as of the ____ day of _________, 20___.
TENANT: TREKKING REAL ESTATE INC. dba LEGACY
SIGN COMPANY
By:_____________________________
Name: Scott Smith
Title: President
LANDLORD: [Name of record title owner of the property]
By:_____________________________
Name: Name
Title: Title
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF _____________
COUNTY OF ___________
On _________________, before me, ______________________, Notary Public, personally appeared ______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF _____________
COUNTY OF ___________
On _________________, before me, ______________________, Notary Public, personally appeared ______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
RESOLUTION NO. PC 2024-03
A RESOLUTION OF THE PLANNING COMMISSION, OF THE CITY OF
GONZALES APPROVING A CONDITIONAL USE PERMIT TO ALLOW AN OFFSITE ADVERTISING BILLBOARD SIGN ON A CITY-OWNED 6+ACRE PARCEL ADJACENT TO HIGHWAY 101 ON ASSESSOR’S PARCEL NUMBER 020-201-022-000.
WHEREAS, a request was received from Legacy Signs on June 12, 2024, to build and operate an offsite advertising digital billboard sign off of 875 S. Alta Street, Gonzales, adjacent to Highway 101. and
WHEREAS, this request followed the City adopting new amendments to the City’s Zoning Code to allow such a sign to be constructed in the City. and WHEREAS, the Planning Commission considered the new ordinance on April 8, 2024, and the City Council had their first reading of the new ordinance on May 6, 2024; the second reading was May 20, 2024, with the ordinance becoming effective 30 days later. And WHEREAS, public notice was provided in the local Salinas Valley Tribune, appearing August 21, 2024, and direct mailed notices were sent to all property owners within 300 feet of the subject property; and
WHEREAS, subject to the granting of a conditional use permit, an offsite advertising digital billboard sign may be allowed in the Industrial District, subject to the provisions of Section
12.116.125. of the City of Gonzales Sign Code; and
WHEREAS, the offsite advertising digital billboard sign is described as a single monopole support with two digital 14’x 48’ screens on top in a “V” formation for optimal visibility towards auto traffic on Highway 101. The overall height of the sign is to be no taller than 70’ from grade; and
WHEREAS, the screens on the sign are further described to have light dimming and directional capabilities to minimize any excess light and focus the display on the intended audience on the highway. The screens typically operate 18 hours per day from 6am to midnight; and WHEREAS, the Location of the sign on City owned Assessor’s Parcel Number 020-201- 022-000; and
WHEREAS, access to the sign will be granted by the neighboring property owner, Constellation Brands (CB). Due to the sign being landlocked by CB’s operations, the site is fairly secure and unlikely to be vulnerable to vandalism and graffiti; and WHEREAS, the sign will be used for a variety of purposes such as City endorsed announcements, celebrating community achievements, law enforcement, fire and natural disaster emergency communications and advertising. Local businesses located within the City of Gonzales will receive a discount on advertising space; and
EXHIBIT E
WHEREAS, the proposed sign is subject to the new regulations of Section 12.116.125, as follows.
A. Off-Site Advertising Billboard Signs are permitted in the Industrial District only in areas visible to Highway 101 travelers, and the following standards shall apply:
1. No new permitted off-site advertising sign may be less than 3,000 feet from an existing permitted off-site advertising sign.
2. New off-site advertising signs will only be allowed on property zoned industrial.
3. No new outdoor advertising structure shall be less than 500 feet from any existing church, park or school.
4. Only highway facing signs will be allowed.
5. Digital or static display is allowed.
6. Overall height from grade must be 70’or less.
7. Display sign area may be no more than 672 square feet, per face side.
8. Digital displays shall not rotate copy more frequently than every 6 seconds.
9. Sign structure and final architectural design must be approved by the City Planning Department, and consistent with the recommendations of a design review process.
10. Development agreement, lease agreement or other agreement with the City of Gonzales.
a. The operations and City conditions for the use and utility of the advertising display shall be included as part of a development agreement, lease agreement or other agreement with the City of Gonzales, City Council. b. The agreement must include revenue provisions to the City that allow the City to undertake projects, programs or other activities funded by the City.
WHEREAS, the Planning Commission confirms that the off-site advertising billboard sign proposal conforms to the nine (9) standards above and the lease agreement (10) will track to the City Council following an affirmative action on the Conditional Use Permit from the Planning Commission; and
WHEREAS, on Wednesday, August 14, 2024, an assembled design review committee gathered to discuss three potential designs offered by Legacy Signs. The Committee unanimously recommends that the Planning Commission approve the design as shown and attached to the draft Planning Commission Resolution; and
WHEREAS, Conditional Use Permits run with the land. In this situation for this off-site advertising billboard sign proposal, the City of Gonzales is the property owner. In this instance, the lease agreement will actually be the stronger governing document. The Planning Commission’s Conditions of Approval (Resolution PC No. 2024-03) will be applied to the sign project and will be included as an Exhibit/Attachment on the lease to be negotiated with the City Council; and
WHEREAS, the application has been reviewed for compliance with the California Environmental Quality Act and has been determined to qualify for an exemption under CEQA Guidelines Section 15303: New Construction or Conversion of Small Structures, Class 3.
NOW THEREFORE, the Planning Commission of the City of Gonzales ordains as follows:
Section 1. Environmental Findings
A. The application has been reviewed for compliance with the California Environmental Quality Act and has been determined to qualify for an exemption under CEQA Guidelines Section 15303: New Construction or Conversion of Small Structures, Class 3.
Section 2. Conditional Use Permit Findings
B. The use is necessary or desirable in relation to the purposes and intent of the Gonzales general plan, zoning ordinance, and the economic, social and environmental status of the City.
The request is not inconsistent with the General Plan designation of the site for industrial commercial uses. The Gonzales zoning ordinance designates the site as Industrial. Subject to a conditional use permit, off-site advertising billboard signs are permitted in the Industrial District subject to the new regulations of Section 12.116.125. The sign presents an economic opportunity to drive new business into the City of Gonzales, as well as to capture a negotiated fixed base rent return to the City, and a percentage of revenue for portions of the revenue stream that may exceed the base rent. Additionally, the City will be able to further its social programs and public outreach on the sign to announce civic campaigns and promotions. Environmentally, the design and aesthetics of the recommended sign design complement and enhance architectural themes and investments already made in the city, such as the multimillion dollar improvements to Alta Minor and the archway and trellises there.
C. The use will be properly related to other uses, transportation facilities, and other public facilities in the area, and will not cause undue environmental impacts relating to noise, odor, pollution, etc.
Subject to a conditional use permit, off-site advertising billboard signs are permitted in the Industrial District only in areas visible to Highway 101 travelers and subject to the new regulations of Section 12.116.125. The sign will have two sign faces and be oriented to both northbound and southbound travelers. While on a City-owned parcel that includes a drainage basin, the sign placement and foundation will not impact the public utility there, nor have impacts relating to noise, odor or pollution.
D. The use will not adversely affect the health or safety of persons living or working in the vicinity or be materially detrimental to the public welfare of the city and its residents.
Such off-site advertising billboard signs have been studied for health and safety reasons and it has been found that while they do attract attention, it is not to the point to distract vehicle operators from the safe operation of their vehicles. The sign faces are oriented to passing traffic on Highway 101 and are not adjacent to residential neighborhoods or other
sensitive receptors. With the utility to display Amber Alerts and other emergency and community messages and social promotions, the sign will actually enhance and further the public welfare of the city and its residents.
CONDITIONS OF APPROVAL
Standard Conditions
1. Code Compliance. All construction and improvements and uses shall be in accordance with zoning, building, fire, and all other codes and ordinances of the City of Gonzales or agencies that have regulatory authority over the project. All such requirements shall be met prior to issuance of a certificate of occupancy or final building inspection, except for items agreed to by the owner and the Building Official.
2. Hold Harmless and Indemnification. Except to the extent the City has constructed improvements on or about the property, the City and Applicant/Owner acknowledge that the City has not made an independent investigation of the design of the proposed use, or conditions affecting either design or use. Applicant/Owner shall indemnify and hold harmless the City, its elective and appointive boards, commissions, officers, agents and employees from all damages, injuries, claims and any and all liability and costs arising from or about the site or in connection with the conduct of business thereon.
Applicant/Owner agrees to, and shall, defend City, its elective and appointive boards, commissions, officers, agents and employees, from any suits or actions at law or equity from damages caused, or alleged to have been caused, by reason of the previously mentioned use of the involved site. Except as provided above, the terms of this paragraph shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of the previously mentioned design or operations referred to herein, regardless of whether or not City has prepared, supplied or approved of plans and or specifications for use of the proposed site. To the extent that Applicant is required to indemnify and hold harmless the parties listed above, it shall have the right to control the litigation, including but not limited to contracting for counsel of its choice, and accepting or rejecting any settlement offer.
Special Conditions
3. Design. The sign approved shall be designed according to the design recommended by the design review committee, consisting of a 59-foot tall two-faced freeway oriented electronic reader monopole sign, with architectural materials and colors reflective of the City of Gonzales 4th Street Archway at Alta Street. The sign will be constructed with aluminum features and accents mounted on a steel pole with a gemstone synthetic stone base. Each face of the electronic display shall be allowed a maximum display area of 14’ x 48’ feet totaling 672 square feet, per face. The sign will also include two 7-foot tall City shields mounted below each of the two display faces (The Wine Capital golden shields).
4. Placement. The sign shall be placed on Assessor’s Parcel Number 020-201-022-000. in accordance with the Site Plan and vicinity map included in the City’s review and staff
Ernesto Mancera, Tencia Vargas
Adrian Paco, Alex Ramirez, Gloria Velasquez
None
None
EXHIBIT F
Database of definitions Referenced in the Lease
• City: The City of Gonzales
• Tenant: Legacy Sign Company
• Lease: The agreement between City and Tenant (sign company) • Effective Date: The date at which the lease agreement is executed • Digital Billboard: The two-sided LED electronic sign panel, as shown in Exhibit C • Sign Structure: The physical asset owned by the Tenant • Permit: City and Caltrans required authorizations to build and operate the sign legally • Project Approval Challenge: City and State permits and entitlements • Plans: Site plans, electrical plans, survey and any other required documents used for executing the project
• City Initial Concept Approval: To be given by the Planning Commission and City • Council
• City Permits: Respective permits needed from the City to build and operate the sign • City Permit Submittal Date: The date upon which Tenant first submits its application for the City Permits
• Caltrans Permits: Refers to the required permits for off-site advertising signs • Caltrans: The State of California’s authoritative body for off-site advertising signs • Caltrans Permit Submittal Date: The date upon which Tenant first submits its application for the Caltrans Permits
• Operational Date: The date upon which the sign is fully built, powered on and able to display advertising content
• Option Term: A five (5) year extension on the end of the thirty (30) year base term • Rent: Consideration to be exchanged for the right to lease property for the placement of the sign
• Premises: The City owned property where the sign is located •
• Sub Premises: The exact location at which the sign is located within the sub portion • Rent Commencement Date: Occurs upon at the Operational Date • Minimum Annual Guarantee (MAG): The base rent paid to the City • Annual Net Advertising Revenue: Revenue for advertising space after agency and broker commissions
• Consumer Price Index (CPI) : A price index of a weighted average market basket of consumer goods and services purchased by households
• “Space Availability” : Unsold advertising space
• “Creative Executions” : Each version and revision is considered an Creative Execution • “City Promotions and Messaging” - Advertising content used for the promotion of City run or controlled entities
• City Usage: The ability for the City to utilize the sign for its own messages and promotions
• Hazardous Substances: Any and all pollutants, wastes, flammables, explosives, radioactive materials, hazardous or toxic materials, hazardous or toxic wastes. hazardous or toxic substances, carcinogenic materials or contaminants and all other materials governed,
monitored, or regulated by any Federal, State or local Law or regulation, including the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Substances Account Act.
• Hazardous Materials: Any and all pollutants, wastes, flammables, explosives, radioactive materials, hazardous or toxic materials, hazardous or toxic wastes. hazardous or toxic substances, carcinogenic materials or contaminants and all other materials governed, monitored, or regulated by any Federal, State or local Law or regulation, including the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Substances Account Act.
• PCB: A group of man-made organic chemicals consisting of carbon, hydrogen and chlorine atoms.
• Hazardous Materials Laws: As regulated by the Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA) • Obstruction: Anything limiting the visibility to the sign from the highway • “Actual Cost incurred by tenant for the purchase and installation of the billboard project”: Development and construction expenses including time, labor, material and fees • Future Sales Revenues: Estimated future sales revenues based on reasonable sales forecasting
• Tenant Party: The Tenant
• Tenant Indemnities: The Tenant
• City Indemnities: The City
• Tenant’s Insurance: Commercial General Liability and Workers Compensation and Employer Liability Insurance