LEASE AGREEMENT BETWEEN
THE CITY OF HUNTINGTON BEACH AND
HBSC PARTNERS, LLC FOR OPERATION OF
THE HUNTINGTON BEACH SPORT COMPLEX FOOD CONCESSIONS
This Lease is made and entered into by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("CITY") and HBSC PARTNERS, LLC, ("LESSEE," and collectively, the "PARTIES,") effective as of the date the Huntington Beach City Council approves this Lease.
NOW, THEREFORE, the PARTIES covenant and agree as follows:
SECTION 1. DESCRIPTION OF PREMISES.
CITY hereby leases to LESSEE the two food concession buildings with attached public restrooms, located within the Huntington Beach Sports Complex, at 7300 Talbert Avenue (Building "A") and at 18260 Goldenwest Street (Building "B"), Huntington Beach, CA 92648. The Premises shall also include patio areas as identified on Exhibit A, attached hereto, within the leased footprint.
The approval of this Agreement by LESSEE shall, in itself, constitute acknowledgement that the Premises are in good and usable condition. Upon execution of this Agreement, LESSEE agrees to undertake its obligations under this Agreement with the Premises in their presently existing condition, "as is," and agrees that CITY shall not be obligated to make any alterations, additions or betterments thereto.
SECTION 2. LEASE TERM.
This Lease shall be for a term of five (5) years commencing at 12:01 a.m. on _ 2024 and ending at 11:59 p.m. on , 2029
unless sooner terminated or extended as herein provided.
SECTION 3. EXTENSION OF TERM.
This Lease may be extended for two (2) additional five (5) year periods, by mutual agreement of the PARTIES. If the PARTIES agree to an extension, this Lease shall be subject to the same terms, covenants, conditions, exceptions, and reservations contained herein.
SECTION 4. HOLD OVER.
Should LESSEE hold over and continue in possession of the Premises after expiration of the terms of this Lease or any extension thereof, LESSEE's continued occupancy of the Premises shall be considered a month-to-month tenancy, subject to all terms and conditions of this Lease.
SECTION 5. RENT.
(a) Minimum Base Rent. For the first year of this Lease, LESSEE shall pay CITY as minimum rent for the Premises ("Minimum Base Rent") the sum of Two Thousand Dollars ($2,000) each month, plus any increases provided for in Sub-Paragraph "(b)" below. Rent shall be paid in lawful money of the United States of America, without deduction or offset, at Huntington Beach City Hall, City Treasurer, 2000 Main Street, Huntington Beach CA, 92648, or the place CITY may designate in writing. Should monthly payments for Minimum Base Rent be required for any partial month pursuant to any provision of the Lease, such Rent shall be prorated in accordance with the actual number of days in the month in which such proration occurs.
(b) Adjustment of Minimum Base Rent. Commencing on the first anniversary of this Lease, and each anniversary thereafter ("the Rent Adjustment Date"), the Minimum 2 24-14970/346973
Base Rent shall be adjusted by an annual increase of three percent (3%). In no event shall the Minimum Base Rent be decreased from the previous year. (c) Percentage Rent. In alternative to the Minimum Base Rent, each month LESSEE shall pay CITY a sum ("Percentage Rent") equal to the amount that the product of the percentage rate set forth in this paragraph through that month of the Operational Month exceeds the Minimum Monthly Rent owed for the same month. LESSEE shall pay CITY Percentage Rent according to the following Monthly Gross Sales percentages:
Agreement Year Percentage Rate
Year 1 8%
Year 2 10%
Year 3 12%
Year 4 15%
Year 5 15%
(d) Operational Year. The "Operational Year" is defined as a one-year period ending December 31 of each year.
(e) Rent Abatement. To assist LESSEE with tenant improvements, both the Minimum Base Rent and Percentage Rent shall be abated until December 31, 2024.
Thereafter, any rent abatement shall be at the sole discretion of the CITY. (f) Monthly Rent. Each month, LESSEE shall pay CITY the Minimum Base Rent or the Percentage Rent, whichever is greater. LESSEE shall furnish to CITY statements of LESSEE's Gross Sales within Fifteen (15) days after the end of each month. An officer of LESSEE shall sign and certify as correct each monthly Statement of Gross Sales.
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(g) Late Charge. In the event that CITY does not receive the monthly rent on or before the Fifteenth (15th) day after the end of each month, a late charge of one and one-half percent (1.5%) of the monthly rent due shall be added, beginning Twenty (20) Days after the end of the month, with an additional late charge of one and one-half percent (1.5%) of the original monthly rent due on the Twentieth (20t*) day of each subsequent month. If received after the Fifteenth (15th) Day but postmarked on or before the Fifteenth (15'") Day, the monthly rent will be accepted without penalty. (h) Records and Audit.
i. Annual Statement. LESSEE shall provide CITY an annual statement of Gross Sales within fifteen (15) days after the end of each Operational Year.
ii. Sales and Charges. LESSEE shall record all sales and charges by cash registers that display the amount of the transaction certifying the amount recorded. The register shall be equipped with devices which log in daily sales totals and show the transaction numbers and sales details. At the end of each day, the sales information shall be recorded and stored for that day. ili. Production of Statement, Records and Audit. LESSEE shall make available for CITY inspection at the Premises a complete and accurate set of LESSEE's and any sub-lessee's books and records of all sales of merchandise and all revenue derived from the conduct of business at the Premises from which Gross Sales can be determined and all supporting sales records, including without limitation all federal and state tax returns. LESSEE shall also furnish CITY copies 4 24-14970/346973
of LESSEE's quarterly California sales and use returns at the time each is filed with the State of California.
LESSEE further agrees that it will keep, retain, and preserve for at least two (2) years all records, books, bankbooks or duplicate deposit books and other evidence of Gross Sales.
CITY shall have the right, upon reasonable notice, during the Lease Term and any extension thereof, and within two (2) years after Expiration or Termination of this Lease to inspect and audit LESSEE'S books and records and to make transcripts therefrom to verify the payment due CITY. The CITY may conduct the audit at any reasonable time during normal business hours in a manner that minimizes any interference with the conduct of LESSEE's regular business operations. LESSEE shall cooperate with CITY in making the inspection and audit.
CITY shall also be entitled, once during each Operational Year, and once within two (2) years after Expiration or Termination of the Lease, to an independent audit of LESSEE's books of account, records, cash receipts, and other pertinent data to determine LESSEE's Gross Sales, by a certified public accountant to be designated by CITY, at CITY's sole cost and expense. The audit shall be limited to the determination of Gross Sales and shall be conducted during usual business hours.
If either audit shows a deficiency in the payment of any Percentage Rent, the deficiency shall become immediately due and payable and if there is an overpayment, CITY shall immediately refund the amount of the overpayment to LESSEE. CITY shall bear its costs of the audit unless the audit shows that LESSEE 5 24-14970/346973
understated Gross Sales by more than five percent (5%), in which case LESSEE shall pay all CITY's reasonable costs of the audit.
iv. LESSEE's Gross Sales Audit. LESSEE may contest the results of CITY's audit by performing a confirmatory audit within thirty (30) days of receipt of CITY's audit results and supporting evidence, using an independent public accountant reasonably acceptable to CITY. If LESSEE's audit discloses that CITY's audit was incorrect by more than five percent (5%), then CITY shall pay the cost of such audit and shall pay the cost of CITY's audit.
V. Acceptance The acceptance by CITY of any monies paid to CITY by LESSEE as Percentage Rent for the Premises, as shown by any statement furnished by LESSEE, shall not be construed as an admission of the accuracy of said statement, or of the sufficiency of the amount of said Percentage Rent payment, but CITY shall be entitled to review the adequacy of such payment pursuant to the above-described audit procedure.
SECTION 6. GROSS SALES DEFINED.
The term "Gross Sales" shall mean the total selling price of all merchandise of services sold or rendered in, or property rented on, or from the Premises by LESSEE, his sublessees, licensees, or concessionaires, whether for cash or on credit, and if on credit whether or not paid, and shall include without limitation:
(a) Proceeds from all automatic vending, weighing, and other machines owned and operated by LESSEE in or on the Premises;
(b) Commissions received by LESSEE from such automatic vending, weighing, and other machines not owned by LESSEE but operated in or on the Premises; 6 24-14970/346973
(c) All other receipts of all business conducted in, at, or from the Premises, including all deposits not refunded to purchasers, proceeds, receipts or any revenue derived whatsoever from the use of Premises;
(d) Proceeds from sales based on orders solicited or taken from, in, or on the Premises for merchandise or services to be delivered or rendered off, or from sources outside, the Premises; and
(e) All other revenue or receipts generated by or arising from the use of the Premises.
SECTION 7. GROSS SALES EXCLUSIONS.
Notwithstanding the provisions of Section 6 of this Lease, the term "Gross Sales" shall not include the following items, and such items may be deducted from "Gross Sales" to the extent they have been included therein or have been included in a prior computation of "Gross Sales" on which Rent has been paid under this Lease to CITY:
(a) Any sales or use taxes imposed on the sale or rent of food, merchandise, or services that are added to the sales price collected from customers; and (b) Any transfer of merchandise from the Premises to the manufacturer or supplier from whom it was obtained by LESSEE.
SECTION 8. BOOKS AND RECORDS.
LESSEE shall at all times keep or cause to be kept on the Premises full, complete, and accurate records and books of account showing the total amount of Gross Sales as defined in this Lease made each calendar month in, on or from the Premises.
Furthermore, LESSEE shall at the time of sale and in the presence of the customer cause the full selling price of each piece of merchandise and each service rendered in, on, or 7 24-14970/346973
from the Premises to be recorded in a cash register or cash registers that have cumulative totals and are sealed in a manner approved by CITY. LESSEE agrees to maintain on the Premises for a period of three (3) years following the close of each calendar month all records and books of account and all cash register documentation showing or in any way pertaining to the Gross Sales made in, or from the Premises during such calendar month.
SECTION 9. CAPITAL INFRASTRUCTURE CREDIT.
LESSEE may request that CITY provide a temporary rent credit to offset the cost of capital improvements to the Premises, provided that CITY retains unfettered discretion to deny any credit. All projects to be considered for rent credit must have CITY approval prior to commencement of such projects.
SECTION 10. BUSINESS PURPOSES AND USE OF PREMISES.
The Premises are leased for the purpose of operation of two Sports Park food and beverage facilities offering a menu comparable to Exhibit B, including use of food carts.
Any material alteration of the menu shall be approved by CITY.
At all times, LESSEE shall comply with the following requirements:
(a) LESSEE, at its sole cost and expense shall equip, operate, manage, and maintain the Premises in good safe working condition.
(b) LESSEE shall operate the Premises for a minimum of 100 "Operational Days" during the calendar year, provided the LESSEE may close for up to ten (10) verified rain days. In no case shall the Premises be operating for less than 90 Operational Days per year. An "Operational Day" is defined as the Premises being open for business a minimum of four (4) consecutive hours.
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(C) At all times LESSEE shall comply with all City, Orange County, State and Federal laws and regulations, including but not limited to those regarding building permits, health permits and environmental regulations.
(d) Because food and beverage services offered at the Premises shall meet the changing needs of the visiting public, CITY may require LESSEE to make changes to better meet such needs.
(e) LESSEE shall be responsible for obtaining CITY approval of appropriate signage for the Premises. LESSEE shall maintain all signage in good appearance at all times during the life of this LEASE. CITY shall have the right to approve or require LESSEE to change or remove signs or any other advertising on the premises. (f) LESSEE shall routinely clean and provide custodial maintenance of the restrooms as needed during hours of operation, with restroom supplies provided by CITY.
LESSEE shall provide supplies if CITY resources are inaccessible so that sufficient supplies are available to the public at all times.
(g) CITY reserves the right to prohibit the sale of any item or article which is objectionable or beyond the scope of the food and beverage necessary for proper service to the public or public safety. LESSEE shall fix the prices for the food and merchandise sold at the Premises, provided that CITY reserves the right to establish reasonable maximum prices for any or all items LESSEE sells in accordance with the best interests of the public, LESSEE, and CITY.
(h) Except as permitted in advance in writing by CITY, LESSEE shall sell all foods and beverages in disposable paper or plastic containers, and in no case sell or dispense pull-top cans or Styrofoam containers. Lessee, wherever feasible, shall 9 24-14970/346973
eliminate the use of non-recyclable containers and plastics. CITY may from time to time review the items sold and containers or utensils LESSEE uses or dispenses and prohibit the sale or use of non-recyclable containers or plastics. (i) LESSEE shall not sell beer, wine or other alcoholic beverage from Premises without the proper regulatory permits from the CITY and all applicable outside agencies including, but not limited the California Department of Alcohol Beverage Control. (i) CITY has and may enter into in the future, agreements with businesses marketing food, beverage, apparel and products (collectively, "Vendors") requiring CITY to use and/or sell their products exclusively at CITY parks, beaches and facilities. CITY shall notify LESSEE of such exclusivity agreements, including which products LESSEE may not sell or rent. Once notified, LESSEE shall remove any products from the Premises that may not used or sold pursuant to CITY's exclusivity agreements.
SECTION 11. PAYMENT OF UTILITY CHARGES.
During the term of this Lease or any extension thereof, LESSEE shall pay, and hold CITY and the Premises free and harmless from all charges for the furnishing of gas, water, electricity, telephone, cable, internet services, and other public utilities to the Premises, and for the removal of garbage and rubbish from the Premises. Shall a separate water meter require installation to distinguish charges between the concession building and the public restrooms, LESSEE shall arrange installation with the local utility company and expenses shall be split equally between PARTIES.
SECTION 12. PERSONAL PROPERTY TAXES.
LESSEE shall pay before they become delinquent all taxes, assessments, or other charges levied or imposed by any governmental entity on the furniture, trade fixtures, 10 24-14970/346973
appliances, and other personal property placed by LESSEE in, on, or about the Premises including, without limiting the generality of the other terms used in this Section, any shelves, counters, vaults, vault doors, wall safes, partitions, fixtures, machinery, plant equipment, office equipment, television or radio antennas/satellites, or communication equipment brought on the Premises by LESSEE.
SECTION 13. REAL PROPERTY TAXES.
LESSEE shall timely pay all real property taxes or possessory interest taxes and assessments levied or assessed against the Premises.
SECTION 14. MAINTENANCE AND REPAIRS.
(a) CITY agrees, at its own cost and expense, to make all structural repairs to the Premises including but not limited to foundations, walls and roofs. CITY agrees, at its own cost and expense, to maintain major utility service to the building such as sewer, water, electricity and natural gas up to and within the building foundation. LESSEE shall notify CITY of necessary repairs, which CITY will commence promptly. In the event CITY does not commence such work within 30 days from the date of such notice and complete it within a reasonable time thereafter given the nature and extent of the repair, CITY agrees that LESSEE may accomplish such repairs, and CITY will promptly reimburse LESSEE for the repairs.
(b) CITY shall have the right to enter the Premises at all reasonable times (and at any time during an emergency) for the purpose of inspecting the Premises or to make any repairs CITY is required to be made pursuant to this Lease. Structural repairs as used in this Section means and is limited to repairs (other than replacement of worn-out parts) to the foundations, structural portions of exterior walls, concrete slabs, beams, columns 11 24-14970/346973
and walls bearing the main load of the roof and floors, but excluding floor covering and any improvements, additions, or changes, structural or otherwise, made by LESSEE. (c) LESSEE agrees that it will, at its own cost and expense, make all repairs of whatever kind and nature, foreseen and unforeseen, to keep the Premises in good condition, other than the repairs to be performed by CITY pursuant to the preceding Subparagraph (a). "Premises" as used in this Subparagraph includes heating, ventilating, air conditioning, interior walls, floor coverings and ceilings, painting and maintenance of exterior walls, the interior and exterior portions of all doors, windows, plate glass, interior and exterior lighting fixtures, all trade fixtures, exterior railings and shade structures, and any other approved improvements.
(d) LESSEE shall maintain and operate the Premises pursuant to a Food Facility Health Permit issued by the Orange County Environmental Health Agency. At all times, the Premises shall be maintained, equipped, and operated in compliance with State and County health regulations, CITY Building and Fire Codes, and the disability access provisions of the Federal Americans with Disabilities Act.
SECTION 15. ALTERATIONS AND LIENS.
LESSEE shall not make or permit any other person to make any improvement or install any fixture to the Premises without first obtaining written consent of CITY. 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 such Premises at the instance or request of LESSEE. Furthermore, to the extent CITY consents to any improvement or fixture to the Premises, on expiration or sooner termination of this Lease, and at the option of CITY, the improvement or fixture shall become the property of CITY 12 24-14970/346973
and remain on the Premises, or CITY may require LESSEE to remove any or all such improvement or fixture and require LESSEE to restore the Premises to their state at the beginning of this Lease.
SECTION 16. INSPECTION BY CITY.
LESSEE shall permit CITY or CITY's agents, representatives, or employees to enter the Premises at all reasonable times for the purpose of inspecting the Premises to determine whether LESSEE is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect CITY's interest in the Premises under this Lease or to perform CITY's duties under this Lease. CITY may make quarterly inspections of the Premises and provide written reports to LESSEE. LESSEE shall make necessary repairs, clean, or take any other reasonable action as required by quarterly inspection reports. LESSEE shall provide CITY with a full set of entry keys for Premises.
CITY shall be notified of changes to entry locks and provided with any subsequent new keys.
SECTION 17. SURRENDER OF PREMISES
On expiration or sooner termination of this Lease, or any extensions or renewals of this Lease, LESSEE shall promptly surrender and deliver the Premises to CITY in as good condition as they are now at the date of this Lease, reasonable wear and tear, and repairs required to be made by CITY excepted.
SECTION 18. INSTALLATION AND REMOVAL OF TRADE FIXTURES.
LESSEE shall have the right during the term of this Lease and any renewal or extension of its term, at LESSEE's sole cost and expense, to install and affix in, to or on the Premises such items, herein called "trade fixtures," for use in LESSEE's trade or 13 24-14970/346973
business as LESSEE may, in his sole discretion, deem advisable. Any and all such trade fixtures that can be removed without structural damage to the Premises or any building or improvements on the Premises shall, subject to Section 19 of this Lease, remain the property of the LESSEE and may be removed by LESSEE at any time prior to the expiration or sooner termination of this Lease.
Subject to and to be subordinated to any security interest which LESSEE may give to any lending institution and/or financing source for the purpose of obtaining financing for the purchase of trade fixtures and equipment or the operation of the Premises, LESSEE hereby grants to CITY a security interest in all trade fixtures and equipment owned by LESSEE and now or hereafter placed on the Premises by LESSEE as security for the faithful performance of all the terms, conditions and covenants of this Lease to be performed by LESSEE. Any rights or rights of removal of trade fixtures given LESSEE by the provisions of this Lease shall be exercisable only if, at the time of removal, LESSEE is not in default in performance of this Lease. LESSEE may, however, at any time he is not in default in performance of this Lease, trade in or replace any trade fixture free of the security interest created by this Section and this security interest will then attach to the item that replaced such trade fixture. On default in performance of any obligation of this Lease to be performed by LESSEE, CITY shall immediately have as to the trade fixtures the remedies provided to a secured party under the Uniform Commercial Code as enacted in the State of California.
SECTION 19. UNREMOVED TRADE FIXTURES.
Any trade fixtures described in Section 18 that are not removed from the Premises by LESSEE within thirty (30) days after the expiration or sooner termination, regardless 14 24-14970/346973
of cause, of this Lease shall be deemed abandoned by LESSEE and shall automatically become the property of CITY as owner of the Premises to which they are affixed and not simply because of the lien described in Section 18 of this Lease.
SECTION 20. SIGNS.
LESSEE shall not place and maintain, nor permit any other person to place or maintain, on or in any exterior door, wall, or window of the Premises any sign, awning, canopy, marquee, or other advertising without the express written consent and approval of CITY. Furthermore, LESSEE shall not place any decoration, lettering, or advertising matter on the glass of any interior or exterior shop window of the Premises without the written approval and consent of CITY. Should CITY consent to any such sign, awning, canopy, marquee, decoration, or advertising matter, LESSEE shall maintain it at all times during this Lease in good appearance and repair. On expiration or sooner termination of this Lease, any of the items mentioned in this Section not removed from the Premises by LESSEE on such expiration or termination of this Lease may, without damage or liability, be destroyed by CITY.
SECTION 21. PARTIAL DESTRUCTION.
Should the Premises be partially destroyed by any cause not the fault of LESSEE or any person in or about the Premises with the consent, express or implied, of LESSEE, this Lease shall continue in full force and effect and CITY, at CITY's own cost and expense, shall promptly commence and diligently continue and complete the work of repairing and restoring the Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty (180) working days.
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SECTION 22. TOTAL DESTRUCTION.
Should the Premises or the building on the Premises be so far destroyed by any cause not the fault of LESSEE or any person in or about the Premises with the consent, express or implied, of LESSEE that they cannot be repaired or restored to their former condition within one-hundred eighty (180) working days, CITY may, at CITY's option:
(a) Continue this Lease in full force and effect by repairing and restoring, at CITY's own cost and expense, the Premises to their former condition; or (b) Terminate this Lease by giving LESSEE written notice of such termination.
SECTION 23. INSURANCE PROCEEDS
Any insurance proceeds received by CITY because of the total or partial destruction of the Premises or the building on the Premises shall be the sole property of CITY, except LESSEE shall be compensated for loss to leasehold improvements and fixtures beyond any and all insurance proceeds including business interruption insurance which would ordinarily flow to the benefit of LESSEE.
SECTION 24. ABATEMENT OF RENT.
Should CITY elect under Section 22 of this Lease or be required under Section 21 of this Lease to repair and restore the Premises to their former condition following partial or full destruction of the Premises or the building on the Premises:
(a) CITY shall have full right to enter the Premises and take possession of so much of the Premises, including the whole of the Premises, as may be reasonably necessary to enable CITY promptly and efficiently to carry out the work of repair and restoration; and
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(b) During the time that LESSEE is prevented from using the whole of the Premises, LESSEE shall only pay the Minimum Rent, but not the Percentage Rent described in Section 5 of this Lease.
SECTION 25. CONDEMNATION COMPENSATION.
All compensation and damages awarded for a total taking of the Premises shall belong to and be the sole property of CITY, and LESSEE shall have no claim to any amount or part of any award, except that LESSEE shall be entitled to receive the portion of any award attributable to the taking of those trade fixtures that LESSEE has the right to remove under this Lease but does not remove from the Premises; or when LESSEE does remove the trade fixtures, a reasonable amount for removal and relocation expenses, provided that amount does not exceed the market value of or damages to which LESSEE may become entitled. This Lease shall have no condemnation value to LESSEE.
SECTION 26. DEFAULT AND TERMINATION.
(a) Default Defined. The occurrence of any of the following shall constitute a material default and breach of this lease by LESSEE:
i. Any failure by LESSEE to pay the rent or to make any other payment required to be made by LESSEE under this Lease when that failure continues for ten (10) days after written notice of the failure is given by CITY to LESSEE.
The abandonment or vacation of the Premises by LESSEE, or the failure by LESSEE to conduct business on the Premises for a period in excess of fourteen (14) consecutive days without prior approval of the CITY. 17 24-14970/346973
ill. A failure by LESSEE to observe and perform any other provision of this Lease, when that failure continues for thirty (30) days after CITY has given written notice of the failure to LESSEE; provided, however, that if the nature of that default is such that it cannot reasonably be cured within a thirty (30) day period, LESSEE shall not be deemed to be in default if LESSEE commences that cure within the thirty (30) day period and thereafter diligently prosecutes it to completion. iv. The making by LESSEE of any general assignment for the benefit of creditors; the filing by or against LESSEE of a petition to have LESSEE adjudged a bankrupt or of a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against LESSEE, it is dismissed within 60 days); the appointment of a trustee or receiver to take possession of substantially all of LESSEE's assets located at the Premises or of LESSEE's interest in this Lease, when possession is not restored to LESSEE within 30 days; or the attachment, execution, or other judicial seizure of substantially all of LESSEE's assets located at the Premises or of LESSEE's interest in this Lease, when that seizure is not discharged within 30 days.
The notices provided for in Subsections (a) through (c) of this Section 26 are not intended to replace, but rather are in addition to, any required statutory notices for unlawful detainer proceedings under Code of Civil Procedure Section 1161 et seq.
(b) Termination of Lease and Recovery of Damages. In the event of any default by LESSEE under this lease, in addition to any other remedies available to CITY at law or in equity, CITY shall have the right to terminate this Lease and all rights of 18 24-14970/346973
LESSEE hereunder by giving written notice of the termination. No act of CITY shall be construed as terminating this Lease except written notice given by CITY to LESSEE advising LESSEE that CITY elects to terminate the Lease. In the event CITY elects to terminate this lease, pursuant to Civil Code §1951.2, CITY may recover from LESSEE:
i. The worth at the time of award of any unpaid rent that had been earned at the time of termination of this Lease;
ii. The worth at the time of award of the amount by which the unpaid rent that would have been earned after termination of this Lease until the time of award exceeds the amount of rental loss that LESSEE proves could have been reasonably avoided;
li. The worth at the time of award of the amount by which the unpaid rent for the balance of the term of this Lease after the time of award exceeds the amount of rental loss that LESSEE proves could be reasonably avoided; and iv. Any other amount necessary to compensate CITY for all detriment proximately caused by LESSEE's failure to perform its obligations under this Lease.
The term "rent" as used in this Lease shall mean the Minimum Rent, the Percentage Rent, and all other sums required to be paid by LESSEE pursuant to the terms of this lease. As used in subsections (i), (i), and (iii) above, the "worth at the time of award" is computed by allowing interest at the rate of 10 percent per year. (c) CITY's Right to Continue Lease in Effect After Breach. i. If LESSEE breaches this Lease and abandons the Premises before the natural expiration of the term of this Lease, CITY may continue this Lease in 19 24-14970/346973
effect by not terminating LESSEE's right to possession of the Premises, in which event CITY shall be entitled to enforce all its rights and remedies under this Lease, including the right to recover the rent specified in this Lease as it becomes due under this Lease.
li. No act of CITY, including but not limited to CITY's entry on the Premises, efforts to relet the Premises, or maintenance of the Premises, shall be construed as an election to terminate this Lease unless a written notice of that intention is given to LESSEE or unless the termination of this Lease is decreed by a court of competent jurisdiction.
(d) CITY's Right to Relet. In the event LESSEE breaches this Lease, CITY may enter on and relet the Premises or any part of the Premises to a third party or third parties for any term, at any rental, and on any other terms and conditions that CITY in its sole discretion may deem advisable and shall have the right to make alterations and repairs to the Premises.
LESSEE shall be liable for all of CITY's costs in reletting, including but not limited to remodeling costs required for the reletting. In the event CITY relets the premises, LESSEE shall pay all rent due under and at the times specified in this Lease, less any amount or amounts actually received by CITY from the reletting. (e) CITY's Right to Cure LESSEE Defaults. If, after receipt of the required notice as provided for in subparagraph (a) above, LESSEE breaches or fails to perform any of the covenants or provisions of this Lease, CITY may, but shall not be required to, cure LESSEE's breach. Any sum expended by CITY, with the then maximum legal rate of 20 24-14970/346973
interest, shall be reimbursed by LESSEE to CITY with the next due rent payment under this Lease.
(f) Cumulative Remedies. The remedies granted to CITY in this Section shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or provided in this Lease.
SECTION 27. SUBLEASING OR ASSIGNING AS BREACH.
(a) LESSEE shall not encumber, assign, or otherwise transfer this Lease, any right or interest in this Lease, or any right or interest in the Premises or any of the improvements that may now or hereafter be constructed or installed on the Premises without the express written consent of CITY first had and obtained. LESSEE shall not sublet the Premises or any part thereof or allow any other person, other than LESSEE's agents, servants, and employees, to occupy the Premises or any part thereof without the prior written consent of CITY.
(b) CITY consent to one assignment, subletting, or occupation of the Premises by another person shall not be deemed to be a consent to any subsequent assignment, subletting, or occupation of the Premises by another person. Any encumbrance, assignment, transfer, or subletting without the prior written consent of CITY, whether it be voluntary or involuntary, by operation of law or otherwise, is void and shall, at the option of CITY, terminate this Lease.
(C) The consent of CITY to any encumbrance, assignment including occupation or transfer hereof of LESSEE's interest in this Lease or the subletting by LESSEE of the Premises or parts of the Premises shall not be unreasonably withheld; however, CITY shall have the right of first refusal in connection with any assignment, sale, sublease or 21 24-14970/346973
transfer hereof and agrees to exercise or refuse such right in writing within thirty (30) days of notice by LESSEE.
SECTION 28. DEFAULT BY LESSEE.
Should LESSEE default in the performance of any of the covenants, conditions, or agreements contained in this Lease, LESSEE shall have breached the Lease and CITY may, in addition to the remedy specified in the subparagraph (b) of Section 26 of this Lease, re-enter and regain possession of the Premises in the manner provided by the laws of unlawful detainer of the State of California then in effect.
SECTION 29. INSOLVENCY OF LESSEE.
The insolvency of LESSEE as evidenced by a receiver being appointed to take possession of all or substantially all of the property of LESSEE, or the making of a general assignment for the benefit of creditors by LESSEE or filing a petition in bankruptcy shall terminate this Lease and entitle CITY to re-enter and regain possession of the Premises.
SECTION 30. CUMULATIVE REMEDIES.
The remedies given to CITY in this Lease 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.
SECTION 31. WAIVER OF BREACH.
The waiver by CITY 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.
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SECTION 32. FORCE MAJEURE - UNAVOIDABLE DELAYS.
Should the performance of any act required by this Lease to be performed by either CITY or LESSEE be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, or any other cause of a like nature 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, provided 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, CITY or LESSEE, required to perform the act.
SECTION 33. CARE OF PREMISES.
LESSEE shall:
(a) Submit in writing all requests for proposed alterations or improvements to CITY for approval prior to the onset of any such alteration or improvement. CITY may require one or more estimates prior to granting approval. (b) Paint, stain or seal the Premises' stucco, trim, etc., a minimum of every three years, unless City determines in its sole discretion, that such work shall be done more frequently. All exterior metal surfaces shall be painted no less than once each year except the roof. Any changes in building aesthetics, including color changes may be subject to CITY approval.
(c) Remove any and all graffiti at LESSEE's own expense from the Premises within forty-eight (48) hours of notice thereof.
(d) Not obstruct, cause, or permit any obstruction surrounding the Premises or any part thereof in any manner whatsoever.
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(e) Comply with all written notices served by CITY with regard to the care and maintenance of the Premises.
(f) Install, at LESSEE's sole cost and expense, a grease trap and provide for said grease trap to be pumped out a minimum of once per year.
Any written notice CITY gives LESSEEE hereunder shall specify the work to be done, the estimated cost thereof, and the period of time deemed to be reasonably necessary for completion of such work. Should LESSEE fail to comply with CITY's written notice within fifteen (15) days, or within a time deemed reasonably necessary of the time specified therein, LESSEE shall pay over to CITY the estimated cost of such work as set forth in the notice. Upon receipt of such sum, CITY shall then proceed to cause the required work to be performed.
Upon execution of this Lease, LESSEE shall pay and maintain at all times hereunder, a security deposit with CITY in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee the repair and maintenance of the Premises.
Such deposit may be in the form of cash or an assignment of certificate of deposit or savings account. The form of any such assignment shall be approved by the City Attorney.
SECTION 34. EMERGENCY CLOSING OR CLOSING TO EFFECT REPAIR OR REMODELING OF THE SPORTS PARK.
CITY may close the Sports Park, including the Premises, without liability to LESSEE 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 of the Sports Park deemed necessary by CITY.
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SECTION 35. DELIVERIES OF SUPPLIES.
CITY shall establish the days and times for deliveries of supplies and advise LESSEE in writing thereof. All vendors, salesmen, and guests of LESSEE must obey all parking and traffic regulations.
SECTION 36. EMPLOYEE PARKING.
CITY shall provide without additional charge, reasonable vehicular parking for LESSEE and LESSEE's employees, to access and serve the Premises. LESSEE and its employees must obey all parking and traffic regulations.
SECTION 37. NOTICE.
Any written notice, given under the terms of this Lease, shall be either delivered personally or mailed, certified mail, postage prepaid, addressed to the party concerned, as follows:
CITY OF HUNTINGTON BEACH: LESSEE:
Attn: Director, Community & Library Services HBSC Partners, LLC P.O. Box 190 Attn: Jerry Marchbank
2000 Main Street 18100 Goldenwest Street
Huntington Beach, CA 92648 Huntington Beach, CA 92648
SECTION 38. INSURANCE HAZARDS.
LESSEE shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any fire, liability, or other insurance policy insuring the Premises or the improvements on the Premises. LESSEE shall, at his own cost and expense, comply with any and all requirements of CITY's insurance carriers necessary 25 24-14970/346973
for the continued maintenance at reasonable rates of fire and liability insurance policies on the Premises and the improvements on the Premises.
SECTION 39. WASTE OR NUISANCE.
LESSEE shall not commit or permit the commission by others of any waste on the Premises; LESSEE shall not maintain, commit, or permit the maintenance or commission of any nuisance as defined in Section 3479 of the California Civil Code on the Premises; and LESSEE shall not use or permit the use of the Premises for any unlawful purpose.
SECTION 40. COMPLIANCE WITH LAW.
LESSEE shall at LESSEE's own cost and expense comply with all statutes, ordinances, regulations, and requirements of all governmental entities, Federal, State, County and municipal, relating to LESSEE's use and occupancy of the Premises, whether such statutes, ordinances, regulations, and requirements be now in force or hereinafter enacted. The judgment of any court of competent jurisdiction, or the admission by LESSEE in a proceeding brought against LESSEE by any government entity, that LESSEE has violated any such statute, ordinance, regulation, or requirement shall be conclusive as between CITY and LESSEE and shall be ground for termination of this Lease by CITY.
SECTION 41. 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.
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SECTION 42. PARTIAL INVALIDITY.
Should a court of competent jurisdiction hold any provision of this Lease to be 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 are not materially impaired.
SECTION 43. SOLE AND ONLY AGREEMENT.
This instrument constitutes the sole and only agreement between CITY and LESSEE respecting the Premises, the leasing of the Premises to LESSEE, or the term herein specified, and correctly sets forth the obligations of CITY and LESSEE to each other as of its date. Any agreements or representations respecting the Premises or their leasing by CITY to LESSEE not expressly set forth in this Lease are null and void.
SECTION 44. TIME OF ESSENCE.
Time is expressly declared to be the essence of this Lease.
SECTION 45. INDEMNIFICATION, DEFENSE, HOLD HARMLESS.
LESSEE shall indemnify and save and hold harmless CITY, its officers and employees, from any and all liability, including any claim of liability and any and all losses or costs arising out of the performance of this Lease by LESSEE, its officers or employees or from any willful misconduct of LESSEE, its officers or employees while engaged in the performance of this Lease.
SECTION 46. WORKERS' COMPENSATION.
LESSEE shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 27 24-14970/346973
4 and 5 of the California Labor Code and all amendments thereto; and all similar State or Federal acts or laws applicable; and shall indemnify, defend and hold harmless CITY from and against all claims, demands, payments, suits, actions, proceedings and judgments of every nature and description, including attorney's fees and costs presented, brought or recovered against CITY, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by LESSEE under this Lease.
LESSEE shall obtain and furnish evidence to CITY of maintenance of statutory workers' compensation insurance and employers' liability. in an amount of not Jess than $500,000 bodily injury by accident, each accident, $500,000 bodily injury by disease, each employee, and $1,000,000 bodily injury by disease, policy limit.
SECTION 47. INSURANCE.
In addition to the Workers' Compensation insurance and LESSEE's covenant to indemnify CITY, LESSEE shall obtain and furnish to CITY the following insurance policies covering the Premises:
(a) General Liability Insurance. A policy of general public liability insurance, including motor vehicle coverage. Said policy shall indemnify LESSEE, its officers, agents and employees, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises 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 of $1,000,000 per occurrence. If coverage is provided under a form that includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000) for this Lease. Said policy shall name CITY, its officers and 28 24-14970/346973
employees as Additional Insureds and shall specifically provide that any other insurance coverage which may be applicable to the Premises shall be deemed excess coverage and that LESSEE's insurance shall be primary and non-contributory with any-other valid and collectible insurance or self-insurance available to CITY. Any available insurance proceeds in excess of the minimum coverage amount specified herein shall be available to CITY. All coverage available to LESSEE shall also be available to CITY. Under no circumstances shall said above-mentioned insurance contain a self- insured retention without the express written consent of CITY; however, an insurance policy "deductible" of $5,000.00 is permitted.
Fire Insurance. In order that the business of LESSEE and the Gross Sales of LESSEE as defined in this Lease may continue with as little interruption as possible, LESSEE shall, during the full term of this Lease and any renewals or extensions thereof, maintain as LESSEE's own cost and expense an insurance policy issued by a reputable company authorized to conduct insurance business in California insuring for their full insurable value all fixtures and equipment and, to the extent possible, all merchandise that is, at any time during the term of this Lease or any renewal or extension thereof, in or on the premises against damage or destruction by fire, theft, or the elements.
LESSEE shall also maintain in force during the entire term of this Lease, a standard broad form fire insurance policy in which CITY is named and which any and all losses are made payable to CITY. The face amount of the policy shall be for ninety (90) percent of the replacement value of the Premises and be in a form acceptable to the City Attorney. 29 24-14970/346973
SECTION 48. NONDISCRIMINATION.
LESSEE agrees not to discriminate against any person or class of persons by reason of sex, age, race, color, creed, physical handicap, or national origin in employment practices and in the activities conducted pursuant to this Lease, in accordance with Government Code§ 12940 and the Unruh Civil Rights Act, at Section 51, et seq. of the California Civil Code.
REST OF PAGE INTENTIONALLY LEFT BLANK
24-14970/346973
SECTION 49. ATTORNEY'S FEES.
In the event suit is brought by either party to enforce the terms and provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's fees.
IN WITNESS WHEREOF, the Parties hereto have caused this Lease to be executed by and through their authorized officers on , 2024.
LESSEE: CITY OF HUNTINGTON BEACH
HBSC PARTNERS, LLC A California municipal corporation
By:
Its: PARTNER Mayor
By:
Its: APPROVEDAS TO FORM:
Partner
City Attorney Pare
INITIATED AND APPROVED: ATTEST:
Schlor 5040
Diréctor of Community and City Clerk
Library Services
REVIEWED AND APPROVED:
Interim City Manager
31 24-14970/346973
Exhibit A
HUNTINGTON BEACH SPORTS COMPLEX
CONCESSION BUILDING LOCATIONS (2)
7300 TALBERT AVENUE (BUILDING A)
18260 GOLDENWEST STREET (BUILDING B)
32 24-14970/346973
LEGEND:
OH=OVERHANG NO 00 Q0"E/ 49\14'
PT=PICNIC TABLE
TE=TRASH ENCLOSURE
LIMIT OF PT PTO
PREMISES
PT PT
PT PT
18260 GOLDENWEST ST
L15
L16
112
L7
T.P.O.B. 6
Scale= 1"=20
- S0'00'00"W, 60.86'
HIT > W 1/4 COR,
SEC 35, T5S,
R11W
NO'16'33"E, 1169.29'
-CL GOLDENWEST ST, W'LY LINE SEC 35, TSS, R1TW
EXHIBIT B (1 OF 2)
18260 GOLDENWEST ST
CITY OF HUNTINGTON BEACH
DEPARTMENT OF PUBLIC WORKS
TABLE OF DIMENSIONS: CURVE TABLE:
LI=N90'00'00"E, 19.59' C2=DELTA 161484", R=135, E128.3
L2=N90'00'00"W, 19.60' R=10.03', L=28.31'
L3=N90'00'00"W, 20.30' C3=DELTA 81'32'17"
L4=S09'51'23"E, 6.41' C5=DELTA 82'29'15", R=50.97, L= 79.66° CA=DELTA 89'32'46 R=10.93', L=15.55 L5=S89'43'27"E, 133.19'
L6=N26°59'25"W (RAD C1) C-ELTA 2030 4-202: 1-2338 : L=11.36' L7=S65'11'09"E (RAD C1) , R=11.27, L=20.39'
L8=N68'23'38"W (RAD C2)
L9=S50'08'22"E (RAD C2)
L10=N53'43'55"W (RAD C3)
L11=N27°48'22"E (RAD C3)
L12=S28'21'16"W (RAD C4)
L13=S61"11'30"E (RAD C4)
L14=N61°10'40"E (RAD C5)
L15=N21'18'35"W (RAD C5)
L16= S13'05'33"E (RAD C6)
L17=S12'40'06"W (RAD C6)
L18=S85'43'06"E (RAD C7)
EXHIBIT B (2 OF 2)
18260 GOLDENWEST ST
CITY OF HUNTINGTON BEACH
DEPARTMENT OF PUBLIC WORKS
N89'31'53"W, 903.05'
-
CL TALBERT AVE
NW COR SECTION C6
35, T5S, R11W EL GOTHARD ST
187.75'
72.63'
- GOLDENWEST ST SO 28'07" W S55*37'06"W, .L2
L10
C4
L9
PT
TYP
-T.P.D.B.
AVENUE
PT
TALBERT N00'02'58"W, 52.43'
PT PT
L8
'YP
$34'47'47'E, PT PT PT
141.45
L1
PT PT
46 LEGEND:
OH=OVERHANG
PT=PICNIC TABLE PT
TE=TRASH ENCLOSURE
C2
= LIMIT OF
PREMISES
Scale= 1"= 20'
TODDLER PLAYGROUND
L3
EXHIBIT B (1 OF 2)
7300 TALBERT AVENUE
CITY OF HUNTINGTON BEACH
DEPARTMENT OF PUBLIC WORKS
TABLE OF DIMENSIONS: CURVE TABLE:
LI=N14°20'42"E, 10.29' C1=DELTA 47°50'30" ; R=10.88, L=9.08' L2=N31'29'49"W, 2.35' C2=DELTA 35'31'26" , R= 70.63 L=43.79' L3=S87 0412"W, (RAD C1) C3=DELTA 13'17'22", CA-DELTA 1211'O6" R=102.71, L=23,82 L4=N45'05'18"W, (RAD C1) R=21.05' , L=4.50'
L5=S40'46'38"E, (RAD C2) C5=DELTA 187°33'14" , R=10.04' , L=32.87 L6=S76"18'04"E (RAD C2) C6=DELTA 74°33'24", R=32.96', L=42.89' L7=S77'27'31"E (RAD C3)
L8=N8915'07"E (RAD C3)
L9= S88*56'39"E (RAD C4)
L10=N78'49'15"E (RAD C4)
L11=S25'46'52"E (RAD C5)
L12=N33'20'06"W (RAD C5)
L13=N40'29'17"E (RAD C6)
L14=N34°04'07"W (RAD C6)
EXHIBIT B (2 OF 2)
7300 TALBERT AVENUE
CITY OF HUNTINGTON BEACH
DEPARTMENT OF PUBLIC WORKS
Exhibit B
HBSC PARTNERS, LCC
1909 SAMPLE CONCESSION MENU
33 24-14970/346973
1909 NORTHSIDE
HB I CA
CRAFT BEER + CONCESSIONS
ROTATING ITEMS
SOFT SERVE ICE CREAM
Cake cone or HB $4/$7
1909 SPECIAL DOG $10 commemorative helmet
Signature Wagyu Dog, oursway
CANDY/SNACKS
SPECIAL NACHOS Assorted selection $2/$3/$4
$10 STAPLES
Classic Nachos with a Twist
PROTEIN BARS
$4
Assorted selection
1909 HOT DOG
Signature Wagyu Hot Dog, $6 FRUIT CUP
$6
undressed Seasonal fresh fruit cup
1909 CHILI DOG
Signature Wagyu Hot Dog,
covered in chili & cheese, $8 CHICKEN CAESAR SALAD
fork required Classic chicken caesar, with $8
parmessan & croutons
CLASSIC NACHOS SALADS
Tortilla Strips and good COBB SALAD
SIGNATURE ITEMS $5 $8
old-fashioned pub cheese Iceberg, chicken, bacon,
egg, and ranch
CHILI CHEESE NACHOS
Tortilla strips piled high $7
with chili and cheese
BOTTLED WATER $2
CHEESE STRIPS
HB's aconic tortilla FOUNTAIN DRINK $3
strips, topped with cheddar $B
cheese, secret sauce
SPORTS DRINK $4
PROTEIN DRINK $4
DRINKS
DONUTS A CUP
Locally sourced from HB's $3/$5 Locally sourced coffee from $3 iconic donut shops 602 coffee in hb, 12 8z
BREKKY
1909 BREKKY SANDWICH A:PINT
Our signature breakfast $7
Craft beer sourced from $10
sandwich local breweries (rotating)
34 24-14970/346973
1909 SOUTHSIDE
HB I CA
CRAFT BEER + CONCESSIONS
SOFT SERVE ICE CREAM
Cake cone or HB $4/$7
commemorative helmet
1909 SMASHBURGER
Wagyu smashburger, cheese & $10
grilled onion CANDY/SNACKS
Assorted selection $2/$3/$4
STAPLES
1909 DETROIT SLICE
PROTEIN BARS
Our signature Detroit style $5/$7 $4
pizza, cheese or pepperoni Assorted selection
FRUIT CUP
WINGS $6
Seasonal fresh fruit cup
Bone-in chicken wings,
mango/habenero, honey bbq. $9
parmessan/garlic
SIGNATURE ITEMS
CHICKEN CAESAR SALAD
TOT-CHOS Classic chicken caesar; with $8
Loaded tater lots! Like $10 parmessan & croutons
nachos only better SALADS
COBB SALAD
Iceberg, chicken, bacon, $8
TOTS & RANCH
Everyday tater tots with a $8 egg, and ranch
side of ranch
MOZARELLA STICKS
Good ol! mozzarella sticks BOTTLED WATER $2
$8
& Marinara
FOUNTAIN DRINK $3
SPORTS DRINK $4
PROTEIN DRINK $4
DRINKS
DONUTS A CUP
Locally sourced from HB's $3/$5 Locally sourced coffee from $3 iconic donut shops 602 coffee in ho. 12 0z
BREKKY
1909 BREKKY BURRITO A PINT
Eggs, tots, sausage, and $9
Craft beer sourced from $10
bacon local breweries (rotating)
35 24-14970/346973