T. DECOITE RaM
Council/Agency Meeting Held: 11/19/07
Deferred/Continued to: Part opaga
*Approved, Conditionally Approved • Denied SuDep City Clerks Signature Council Meeting Date: 11/19/2007 Department ID Number: ED 07-37
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:S HONORABLE MAYOR AND CITY COUNCI MEMBERS
SUBMITTED BY: PENELOPE CULT GET CP ADMINISTRATOR
PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC DEVELOPMENI SUBJECT: APPROVE LEASE AGREEMENT BETWEEN THE CITY OF
HUNTINGTON BEACH AND THE CITY OF HUNTINGTON BEACH
EMPLOYEES CREDIT UNION
Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachments) Statement of Issue: The City Council is asked to approve a five-year lease agreement with the Huntington Beach City Employees Credit Union for the operation of a credit union to provide financial and banking services to Huntington Beach city employees and their family members.
Funding Source: Not applicable.
Recommended Action: Motion to:
Approve and authorize the Mayor and City Clerk to execute the Lease Agreement between the City of Huntington Beach and the City of Huntington Beach Employees Credit Union.
Alternative Action(s):
Do not approve the Lease Agreement between the City of Huntington Beach and the City of Huntington Beach Employees Credit Union.
Analysis:
The Huntington Beach City Employees Credit Union (HBCECU) has long been an established convenience for Huntington Beach city employees and their family members by providing low rate financial products and banking services since it was chartered in 1953.
E-t
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 11/19/2007 DEPARTMENT ID NUMBER: ED 07-37 The credit union has been leasing the 1,369 square foot room designated at Room B-272 on the lower level of City Hail since 1974. On May 8, 1974, the city had established a month-to- month agreement for a lease rate of $180 per month. The lease agreement did not provide for any adjustments to the lease rate. Therefore, the lease rate of $180 per month did not change until the lease was renegotiated and a revised lease agreement was adopted by City Council in 1989. The agreement adopted in 1989 was for a five year term with one five-year . option to renew with an initial lease rate of $512 per month with $128 annual increases to the monthly rent. This option to renew was approved and exercised which extended the lease term through October 1, 1999. Since that time, the HBCECU has been operating on a month-to-month basis at $1,792 per month without any additional rental increases. This was to insure that the HBCECU would not be paying above market rates.
The City Attorney's Office has prepared a new lease agreement between the City and the HBECU to continue the lease of Room B-272 for a term of five years commencing July 1, 2007 through June 30, 2012 with two five-year options to renew. After the second renewal option, the City reserves the right to review the lease agreement and may extend the agreement for an additional two five-year periods. The initial lease rate is $2,054 per month which is based upon current market value. In addition, the lease sets forth annual Consumer Price Index (CPI) increases.
The HBECU Board have reviewed and approved the proposed lease agreement. All negotiations have been concluded and the HBCECU has executed the lease.
Strategic Plan Goal: C-2 Provide quality public services with the highest professional standards to meet community expectations and needs, assuring that the city is sufficiently staffed and equipped overall.
Environmental Status: Not applicable.
Attachments):
City Clerk's
Page Number No. Description
1. Lease Agreement Between the City of Huntington Beach and the City of Huntington Beach Employees Credit Union.
2. Certificate of Insurance.
3. Site map.
-2. 11/1/2007 8:01 AM
Ок City of Huntington Beach
INCORP GRATED LA
2000 Main Street • Huntington Beach, CA 92648
OFFICE OF THE CITY CLERK
ORANGE COU CALIFORN JOAN L. FLYNN
CITY CLERK
November 28, 2007
Huntington Beach City Employees Credit Union
Attn: Arlene Grauer, Manager
2000 Main Street, Room B-272
Huntington Beach, CA 92648
Dear Ms. Grauer
Enclosed for your records is a copy of the Lease Agreement Between the City of Huntington Beach and The City of Huntington Beach Employees Credit Union.
Sincerely,
par of Flegas
oan L. Flyn!
City Clerk
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Enclosure
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Sister Cities: Anjo, Japan • Waitakere, New Zealand
(Telephone: 714-536-5227)
LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH
AND THE CITY OF HUNTINGTON BEACH EMPLOYEES CREDIT UNION THIS AGREEMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, hereinafter referred to as "LESSOR", and the HUNTINGTON BEACH CITY EMPLOYEES CREDIT UNION, hereinafter referred to as "LESSEE."
WHEREAS, LESSEE desires to lease, for credit union purposes only, certain real property leased by LESSOR; and
LESSOR desires to let the productive use of aforesaid certain real property to LESSEE, NOW, THEREFORE, in consideration of the mutual and respective covenants and promises hereinafter contained and made, and subject to all terms and conditions hereof, the parties hereto do hereby agree as follows:
" DESCRIPTION OF PROPERTY
LESSOR hereby leases to LESSEE that certain real property, hereinafter referred to as "Leased Property," described as located at Room B-272 of the lower level of City Hall, 2000 Main Street, Huntington Beach, California.
2. TERM
A. This lease shall be for a term of five (5) years commencing on July 1, 2007, and ending on June 30, 2012, unless sooner terminated as herein provided. Should LESSEE fully and faithfully perform all the terms and conditions of this lease for the full term specified in this section, LESSEE may extend this sublease for 1 (one) additional five (5) year term, commencing on expiration of the term specified above. As a condition precedent to exercising LESSEE'S option to extend, LESSEE shall give LESSOR at least six (6) months' written notice of LESSEE'S desire to • extend the lease prior to the expiration or the term specified above. 07-1139/13263
B. Options to Extend
LESSEE shall have future options to extend at LESSEE'S discretion:
Option 1. July 1, 2012 to June 30, 2017
Option 2. July 1, 2017 to June 30, 2022
After the end of Option 2 (June 30, 2022), LESSOR reserves the right to review the Lease Agreement and the LESSEE's tenancy and at LESSOR'S sole discretion, may extend additional renewal periods for the Lease Agreement as follows:
Option 3. July 1, 2022to June 30, 2027
Option 4. July 1, 2027 to June 30, 2032
3 RENT
LESSEE agrees to pay LESSOR as rent for the use and occupancy of the Leased Property the sum of Two Thousand Fifty Four Dollars ($2,054.00) per month, to be paid one (1) month in advance. The rent specified in this section shall be paid by LESSEE to LESSOR, Post Office Box 190, Huntington Beach, California, 92648 Attn: Real Property Manager, and shall increase annually every July 1st starting on July 1, 2009, the monthly rate by the percentage increase in the Consumer Price Index (CPI) Los Angeles/Riverside/Orange County, All Urban Consumers, not to exceed 5% (five percent) annually. The annual increase shall not be less than 3% (three percent) annually irrespective of the CPI.
PERMITTED USE
The Leased Property shall, during the term of this lease and any extensions thereof, be used for the purpose of a credit union office.
S. FITNESS OF PROPERTY
It is expressly understood by all parties to this lease that LESSEE takes the Leased Property as is, and that LESSOR makes no representation, covenant, warranty or promise that the Leased Property is fit for any particular use, including the use for which this lease was obtained. 07-1139/13263 2
TERMINATION
This lease shall be subject to cancellation and termination by LESSOR or LESSEE at any time by giving the other party notice, in writing, at least ninety (90) days prior to the date such termination shall become effective.
SERVICES AND UTILITIES
LESSOR shall pay for electrical and utility services which are not separately metered to the Leased Property. LESSEE shall arrange for and pay for its own janitorial services. LESSEE is aware that the Leased Property is supplied with a system of heating, ventilation and air conditioning, and LESSOR shall have the obligation to continue to supply the Leased Property with such system.
8. HOLD OVER
Should LESSEE hold over and continue in possession of said Leased Property after expiration of the term of this lease, or any extension thereof, LESSEE'S continued occupancy of the Leased Property shall be considered a month-to-month tenancy subject to all the terms and conditions of this lease.
LESSEE'S COVENANT OF INDEMNITY
LESSEE hereby agrees to protect, defend, indemnify and hold harmless LESSOR, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with LESSEE's (or LESSEE's subcontractors, if any) negligent (or alleged negligent) performance of this Lease Agreement or its failure to comply with any of its obligations contained in this Lease Agreement by LESSEE, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of LESSOR. LESSOR 07-1139/13263 3
shall be reimbursed by LESSEE for all costs and attorney's fees incurred by LESSOR in enforcing this obligation. LESSEE will conduct all defense at its sole cost and expense and the LESSOR shall approve selection of LESSEE's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by the LESSEE.
10. WORKERS' COMPENSATION
LESSEE acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. LESSEE covenants that it shall comply with such provisions prior to the commencement of this Lease Agreement. LESSEE shall obtain and furnish to LESSOR workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. LESSEE shall require all sublessees and contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees. LESSEE shall furnish to LESSOR a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and LESSEE shall similarly require all sublessees and contractors to waive subrogation.
11. GENERAL PUBLIC LIABILITY INSURANCE
In addition to the workers' compensation and employers' liability insurance and LESSEE's covenant to defend, hold harmless and indemnify LESSOR, LESSEE shall obtain and furnish to LESSOR, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Leased Property. This policy shall indemnify LESSEE, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Leased Property, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, 07-1139/13263 4
of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Leased Property. This policy shall name LESSOR, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease Agreement shall be deemed excess coverage and that LESSEE's insurance shall be primary.
Under no circumstances shall said above-mentioned insurance contain a self-insured retention, or a "deductible" or any other similar form of limitation on the required coverage.
12. PROPERTY INSURANCE
LESSEE shall provide before commencement of this Lease Agreement and shall obtain and furnish to LESSOR, at LESSEE's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to LESSOR authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, Trade Fixtures, personal property whether or not owned or leased by LESSEE, and all trade inventory in or on the Leased Property against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming LESSEE as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming LESSOR as an Additional Insured. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property whether or not owned or leased by LESSEE, and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by LESSEE, and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to LESSOR. The policy shall also contain a special endorsement that if the Leased Property 07-1139/13263 5
are so destroyed triggering the parties' ability to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate the Lease Agreement, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by LESSEE and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to LESSOR. The proceeds of any such insurance payable to LESSOR may be used, in the sole discretion of LESSOR, for rebuilding or repair as necessary to restore the Leased Property or for any such other purposes) as LESSOR sees fit.
This policy shall also contain the following endorsements:
(a) The insurer shall not cancel or reduce the insured's coverage without (30) days prior written notice to LESSOR;
(b) LESSOR shall not be responsible for premiums or assessments on the policy.
A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with LESSOR prior to the execution of this Lease Agreement. At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with LESSOR.
13. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease Agreement, LESSEE shall furnish to LESSOR certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease Agreement; these certificates shall:
(a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of LESSOR; however ten (10) 07-1139/13263 6
days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above.
LESSEE shall maintain the foregoing insurance coverages in force during the entire term of the Lease Agreement or any renewals or extensions thereof or during any holdover period.
The requirement for carrying the foregoing insurance coverages shall not derogate from LESSEE's defense, hold harmless and indemnification obligations as set forth in this Lease Agreement. LESSOR or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance. LESSEE shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required.
14. MAINTENANCE BY LESSEE
LESSEE shall, at its own cost and expense, keep and maintain all portions of the Leased Property, including janitorial service, as well as all improvements on the Leased Property and all facilities appurtenant to the Leased Property, in good order and repair and in as safe and clean a condition as they were when received by LESSEE from LESSOR, reasonable wear and tear also excepted.
15. ALTERATIONS AND LIENS
LESSEE shall not make, or permit any other person to make, any alterations to Leased Property or to any improvement thereon or facility appurtenant thereto without the prior written consent of LESSEE first had and obtained. LESSEE shall keep the premises free and clear from any and all liens, claims and demands for work performed, materials furnished, or operations conducted on Leased Property at the instance or request of LESSEE. Furthermore, any and all alterations, additions, improvements and fixtures, made or placed in or on Leased Property by LESSEE or any other person shall on expiration, or sooner termination of this lease, become the 07-1139/13263 7
property of LESSOR and remain on Leased Property; provided, however, that LESSOR shall have the option on expiration, or sooner termination of this lease, of requiring LESSEE, at LESSEE'S sole cost and expense, to remove any or all such alterations, additions, improvements, or fixtures from Leased Property. Any Leased Property improvements must be approved by LESSOR's Department of Building & Safety personnel.
16. SUB-LEASING OR ASSIGNING AS BREACH
LESSEE shall not encumber, assign, or otherwise transfer this lease, any right or interest in this lease, or any right or interest in Leased Property or any of the improvements that may now or hereafter be constructed or installed on LEASE PROPERTY, without the express written consent of LESSOR first had and obtained. Neither shall LESSEE sublet Leased Property, or any part thereof, or allow any other person, other than LESSEE'S agents, servants, and employees to occupy Leased Property, or any part thereof, without the prior written consent of LESSEE. A consent by LESSOR to one assignment, one subletting, or one occupation of Leased Property by another person shall not be deemed to be a consent to any subsequent assignment, subletting, or occupation of Leased Property by another person. Any encumbrance, assignment, transfer, or subletting without the prior written consent of LESSOR, whether it be voluntary or involuntary, by operation of law or otherwise, is void and shall, at the option of LESSOR, terminate this lease. The consent of LESSOR to any encumbrance, assignment, including occupation or transfer hereof of LESSEE'S interest in this lease or the subletting by LESSEE of Leased Property or parts of Leased Property shall not be unreasonably withheld. LESSOR'S consent will be based on the financial ability of the proposed sub-lessee/assignee in relation to LESSEE'S financial ability, as well as the proposed party's moral character. LESSOR agrees to give or deny such consent in writing within thirty (30) days of notice by LESSEE.
07-1139/13263 8
17. RELEASE OF INDEMNITY
No termination or cancellation hereof shall release LESSEE from any liability or obligation (whether of indemnity or otherwise) which may have attached or accrued previous to, or which may be accruing at the time of such termination or cancellation.
18. ATTORNEY'S FEES
LESSEE agrees to pay all costs and expenses, including reasonable attorney's fees, of any action commenced by LESSOR to enforce the covenants and conditions of this lease to be kept or performed by LESSEE, whether such action progresses to judgment or not.
19. LESSEE'S COVENANT TO PEACEABLY SURRENDER PROPERTY
Upon the termination of this lease by the expiration of the term thereof, or otherwise, LESSEE agrees to peaceably quit and surrender the Leased Property to LESSOR in good order and condition.
Any and all property of whatsoever kind or character remaining upon the Leased Property upon the expiration or sooner termination of the lease shall there upon be and become the personal property of LESSOR, but this shall not prevent LESSOR from requiring LESSEE to remove, at LESSEE'S expense, any and all personal property placed upon the Leased Property by LESSEE, which LESSOR may desire removed from the Leased Property.
20. CUMULATIVE REMEDIES
The remedies given to LESSOR in this agreement shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this lease.
21. WAIVER OR BREACH
The waiver by LESSOR of any breach by LESSEE of any of the provisions of this lease shall not constitute a continuing waiver or a waiver of any subsequent breach by LESSEE either of the same or another provision of this lease.
07-1139/13263 9
22. FORCE MAJEURE - UNAVOIDABLE DELAYS
Should the performance of any act required by this lease to be performed by either LESSOR or LESSEE be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act 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; provided, however, that nothing contained in this section shall excuse the prompt payment of rent by LESSEE as required by this lease or the performance of any act rendered difficult solely because of the financial condition of the party, LESSOR or LESSEE, required to perform this act.
23. EMERGENCY CLOSING OR CLOSING TO EFFECT REPAIR/REMODELING
THE PREMISES
LESSOR may close the Leased Property without liability therefore at any time it deems necessary for the protection of life, limb, or property, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by LESSOR.
24. SURRENDER OF POSSESSION
LESSEE understands and agrees that upon surrender of possession he will not be entitled to a moving cost payment or any other relocation payment under any State or Federal Relocation Assistance Program.
25. CONTINGENCY
This agreement is contingent on the condition precedent that the LESSOR obtains title and possession of the property which is the subject of this lease. 07-1139/13263 10
26. NOTICE
Any written notice, given under the terms of this agreement, shall be either delivered personally or mailed, postage prepaid, addressed to the party concerned, as follows:
LESSOR: LESSEE:
City of Huntington Beach Huntington Beach City Employees Credit Union Attn: Director of Economic Development Attn: Arleen Grauer, Manager 2000 Main Street 2000 Main Street, Room B-272
Huntington Beach, CA 92648 Huntington Beach, CA 92648
27. ENTIRE AGREEMENT
LESSOR and LESSEE agree that this lease constitutes the entire agreement between the parties.
28. PARTIAL INVALIDITY
Should any provision of this lease be held by a court of competent jurisdiction to be either invalid, void, or unenforceable, the remaining provisions of this lease shall remain in full force and effect unimpaired by the holding, so long as the reasonable expectations of the parties hereto are not impaired.
29. NON-RECYCLABLE ITEMS PROHIBITED
All foods and beverages shall be offered or sold in recyclable paper or plastic containers. No pull-top cans or styrofoam containers are to be vended or dispensed from the Leased Property by LESSEE. LESSOR may from time to time review the items sold and containers or utensils used or dispensed by LESSEE for purposes of monitoring compliance with this section.
30. BINDING ON HEIRS AND SUCCESSORS
This lease shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the parties hereto, LESSOR and LESSEE, but nothing in this section contained shall be construed as a consent by LESSOR to any assignment of this lease or any interest therein by LESSOR except as provided in this lease. 07-1139/13263 11
31. CAPTIONS
Captions of the sections of this agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction or meaning of the provisions of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by and through their authorized officers NOVEMBER 19 _ 2007
HUNTINGTON BEACH EMPLOYEES CITY OF HUNTINGTON BEACH, a
CREDIT UNION, municipal corporation of the State of
California
it loran
print name
ITS: (circle one) Chairman/President Vice President
AND Joan of Flynn
By:_ 1128108)
JOHN F. MILLER
INITIATED AND APPROVED:
print name
ITS: (circle one) Secretary/Chief Financial
Officer/Asst. Secretary - Treasurer
Director of Economic Development
REVIEWED AND APPROVED:
tanel full Cup APPROVED AS TO FORM:
City Administrato
Spwv-8-7-07
89.07 :
07-1139/13263 12