12.C Report Sunset and Sheldons Airstream License Agreement Renewals 2023-06-20

PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #12.C
SUBJECT/TITLE:

PIER CONCESSION LICENSE AGREEMENT EXTENSIONS
RECOMMENDATION:

Direct staff to:

1. Execute an extension of the existing License Agreement with Sheldon’s Bait Shack for operation of the Pier bait shack;

2. Execute an extension of the existing License Agreement with Rib Line by the Beach LLC for operation of the Sunsets at the Pier concession stand.

BACKGROUND:

On March 20, 2018, the City Council made a significant investment in approving the design and construction of the Pier Plaza and Parking Lot Upgrade Project, which completely revitalized the Pier Plaza area. Through the Project, the previous Visitor Information Kiosk (VIK) and Bait Shack were required to be demolished, and the Council determined that these uses were to be replaced with Airstream trailers modified to fit the needs of each operator. At the same time, the City Council also authorized a third Airstream trailer to serve as an additional recreational amenity for visitors provided by a food/beer and wine concessionaire. While the VIK was to be operated by City staff and the Bait Shack was to be operated by the Sheldon Family (License Agreement provided as Attachment 1), who had a 45-year history with the City, the Council determined that the third concessionaire would be selected through a competitive bidding process.

Following a fair and competitive process, the City Council authorized the City Manager to enter into a license agreement with Rib Line by the Beach LLC, to operate Sunsets at Pismo (Sunsets) (License Agreement provided as Attachment 2).

Both the Bait Shack and Sunsets provide amenities that support recreation and visitors.

For example, the Bait Shack sells bait, rents fishing rods, sells snacks, and sells souvenirs, while Sunsets provides food and beverages to those residents and visitors choosing a passive recreational option. Net revenues produced from these uses help pay for various Pier Enterprise Fund costs, including costs associated with the Pier Plaza, Pier Restroom, and beaches.

The License Agreements for both the Bait Shack and Sunsets contain information including terms, fees, operation and use requirements, as well as provisions for extension of the Licenses. Each License Agreement is established as an initial three-year term, with two one-year extension options. The City Manager is authorized to carry out these extensions without further approval. However, due to recent discussions by the City Council regarding the Open Space Designation of the Pier, staff is bringing this matter to the City Council for consideration, with the recommendation that the Council extend the License Agreements.

12.C-1Council Agenda 6-20-2023

Open Space Designation
As was previously discussed during the City Council/Planning Commission General Plan/Land Use Plan (GP/LUP) Study Sessions, the Pier is designated as Open Space under the GP/LUP. This conflicts with current GP/LUP depictions, which show the first diamond of the Pier as Resort Commercial. This inconsistency appears to be a result of previous staff work in the early 2000s. However, through the Study Sessions, the City Council concluded that the Pier should remain designated as Open Space in the forthcoming GP/LUP.

Although the Pier is designated Open Space in the GP/LUP, the Pier currently has no zoning, while the beach and surrounding public and private lands do. Zoning is the mechanism by which the goals and policies of the GP/LUP are implemented on a parcel- by-parcel basis. Accordingly, without zoning, uses and structures on the Pier become a matter of City Council desire and direction, but should be consistent with the intent of the City’s open spaces, either for environmental protection or for recreational purposes.

Based on direction previously given by the City Council, appropriate licensing agreements were obtained with the State Lands Commission for the location of two commercial enterprises on the Pier, supporting the various recreational and leisure activities that local and out-of-town visitors to the City can enjoy. These agreements act as entitlements for the uses unless the City Council determines that these uses are no longer appropriate for the Pier.

Conclusion and Recommendation
The current use of the Airstreams on the Pier have been seen as a success and are enjoyed by residents and visitors alike. Each operator provides amenities to the various recreational activities experienced by those who enjoy Pismo Beach. Accordingly, staff recommends the City Council direct the execution of one-year extensions of the existing License Agreements with Rib Line by the Beach, LLC and Sheldon’s Bait Shack, respectively.

FISCAL IMPACT:

The fiscal impact of extending the license agreements for the two one-year options is projected net revenues to the Pier Enterprise Fund of $38,648 for the first-year extension from November 1, 2023, to October 31, 2024, and $41,395 for the second-year extension from November 1, 2023, to October 31, 2025. This includes projected gross revenues of $68,648 and $71,395 for the first- and second-year extensions, respectively, offset by an estimated $30,000 per year for Airstream polishing and maintenance. Details of each Airstream and amount by term are illustrated in the following table.

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Table 1: Projected Net Revenues for Airstreams if License Agreement Extended The projected net revenues support the Pier Enterprise Fund operations, including maintenance of the Pier Plaza. This primarily includes toilet paper and soap supplies for the Pier restroom, maintenance of the Pier restroom, trash cans in the Plaza and beach, Pier Plaza cleanings, maintenance of the Pier Plaza playground, and other related costs.

In the event that one or both of the license agreements for the subject Airstreams are not extended, these costs would be supported by the General Fund.

Historical Fiscal Impact
Looking back at the first three years of the license agreements, the net revenues for Year 1, 2, and 3 provided $64,580, $57,847, and $48,449, respectively, to support the Pier Enterprise Fund operations. These net revenues decreased based on the Airstream polishing and maintenance costs.

Table 2: Historical Net Revenues for Airstreams
ALTERNATIVES:

1. Do not approve extending the License Agreements.

2. Provide alternate direction to staff.

ATTACHMENTS:

1. License Agreement Sheldon’s Bait Shack

2. License Agreement Rib Line by Brian LLC.

Term 1 Term 2
Revenues
Sunsets on the Pier 47,696$ 49,603$
Sheldon's Clam Stand 20,952 21,792
Total Revenues 68,648$ 71,395$
Expeditures
Airstream polishing 30,000 30,000
Net (Revs - Exp)38,648$ 41,395$
Year 1 Year 2 Year 3
Revenues
Sunsets on the Pier 47,230$ 47,546$ 45,861$
Sheldon's Clam Stand 17,350 18,801 20,148 Total Revenues 64,580$ 66,347$ 66,009$
Expeditures
Airstream polishing - 8,500 17,560
Net (Revs - Exp)64,580$ 57,847$ 48,449$

12.C-3Council Agenda 6-20-2023

Submitted by: Meeting Date: June 20, 2023
Gordon Jackson, Tourism and Events Director
Interim City Manager Approval:

12.C-4Council Agenda 6-20-2023

LICENSE AGREEMENT
This license agreement, effective November 14, 2020 (hereinafter referred to as License”), is by and between the two Parties: the City of Pismo Beach, California, a municipal corporation (hereinafter referred to as “Licensor” or “City”), and Sheldon’s Bait Shack, an individual or proprietor (hereinafter referred to as “Licensee”).

RECITALS
WHEREAS, Licensor is the owner of the Pismo Beach Pier in the City of Pismo Beach and the owner of the Vending Airstream on the Pismo Beach Pier; WHEREAS, Licensee desires to License the Vending Airstream to operate a bait & tackle concession on or around the Pier.

NOW, THEREFORE, the Parties hereto agree as follows:

I. PREMISES:

Licensor hereby Licenses to Licensee a Vending Airstream located at 100 Pier Way on the Pismo Beach pier in the City of Pismo Beach, California, commonly referred to as the Vending Airstream.

II. TERM:

A. The License Term shall be for a three-year period commencing November 14, 2020 and ending on October 31, 2023, with two one-year options as described in Section V.

B. On or before the first anniversary of the License commencement date set forth above, the City shall review Licensee’s compliance with this License agreement.

The City’s review shall provide Licensee an objective evaluation of performance.

The evaluation process is designed to assist Licensee in (1) identifying areas in which Licensee’s performance does not yet constitute an event of default under Section XV, but would constitute an event of default if continued, and (2) identifying operational improvements Licensee should implement to ensure a satisfactory experience to City’s residents and visitors. City shall provide Licensee written notice of any performance irregularities and operational improvement recommendations, and Licensee shall use reasonable business efforts to promptly resolve any irregularities and to promptly implement such recommendations.

III. LICENSE FEE
A. Base License Fee: The Base License Fee as hereinafter set forth shall be paid by Licensee to the City of Pismo Beach Administrative Services Department on the first day of every month for each successive and separate calendar month.

1. Effective upon the commencement of this License, the Base License Fee shall be one thousand five hundred Dollars ($1,500.00) per month for the first year prorated to $850 for November 2020 only based on November 14, 2020 DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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commencement date). For the second year starting November 1, 2021, the monthly Base License Fee shall be increased by a percentage equal to the percentage increase in the Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, All Items, for the Los Angeles- Orange County-Riverside area (“CPI’). The CPI increase is the change in CPI in the most recent August compared to the August in the previous year.

For the third year starting November 1, 2022, the monthly Base License Fee shall be increased by a percentage equal to the percentage increase in the Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, All Items, for the Los Angeles-Orange County-Riverside area (“CPI’). The CPI increase is the change in CPI in the most recent August compared to the August in the previous year.

2. In the event the Lease Term is extended as set forth in Section IV, or the Lease continues on a month-to-month basis beyond the Term as set forth in Section IV, effective on November 1, 2023, and thereafter on each November 1 of any subsequent year, the base rental amount shall be increased by a percentage equal to the percentage increase in the Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, All Items, for the Los Angeles-Orange County-Riverside area (“CPI’). The CPI increase is the change in CPI in the most recent August compared to the August in the previous year.

The New License Fee shall be rounded to the nearest dollar per month, and in NO event shall any New License Fee be less than the Base License Fee that was in effect on the prior November 1.

B. Late Payments: Licensee agrees that if the Base License Fee and Percentage License Fee due hereunder from Licensee to Licensor remains unpaid after said payment is due, Licensee shall pay to the Licensor a late charge equal to Five percent (5%) of the amount due. Additional interest will be charged at 2% per annum of the amount of the delinquent Base License Fee and Percentage License Fee, which late charge shall be added to and become part of the delinquent Base License Fee or Percentage License Fee.

C. Security Deposit
Licensee agrees to pay the Licensor an amount equal to three months’ rent 4,500) as a Security Deposit. The Security Deposit shall be held by Licensor without liability for interest and as security for the performance by Licensee of Licensee's covenants and obligations under this License, it being expressly understood that the Security Deposit shall not be considered an advance payment of license fees or a measure of Licensor's damages in case of default by Licensee.

Unless otherwise provided by mandatory non-waivable law or regulation, Licensor may commingle the Security Deposit with Licensor's other funds. Licensor may, from time to time, without prejudice to any other remedy, use the Security Deposit DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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to the extent necessary to make good any arrearages of license fees or to satisfy any other covenant or obligation of Licensee hereunder. Following any such application of the Security Deposit, Licensee shall pay to Licensor on demand the amount so applied in order to restore the Security Deposit to its original amount.

If Licensee is not in default at the termination of this License, the balance of the Security Deposit remaining after any such application shall be returned by Licensor to Licensee. If Licensor transfers its interest in the Premises during the term of this License, Licensor may assign the Security Deposit to the transferee and thereafter shall have no further liability for the return of such Security Deposit.

IV. USE, OPERATION, AND MAINTENANCE OF THE VENDING AIRSTREAM A. Permitted Use
Licensee shall use the Vending Airstream for the purpose of selling fishing rods, pre-packaged bait and tackle, gifts, pre-packaged beverages, snacks and popcorn in accordance with Federal, California and City laws and regulations. Licensee may not change or expand upon the allowable uses as stated herein without the express written approval of the Licensor.

B. Sale of Popcorn
During such times as Licensee elects to sell popcorn, Licensee shall maintain a minimum of two signs, not less than two square feet each, prominently and publicly displayed at the licensed premises, informing Licensee’s customers that Pismo Beach Municipal Code Section 12.20.195 prohibits the feeding of birds on the pier.

Should Licensee observe persons using popcorn or other food items sold by Licensee in violation of Section 12.20.195, Licensee shall immediately inform such persons that it is unlawful to use popcorn or food items to violate Section 12.20.195 and that such violation could subject such persons to monetary penalties.

Licensee shall also immediately remove any popcorn or food items observed on the pier on or around the premises.

C. Discontinuation of Popcorn Sales
Notwithstanding anything to the contrary in subsection B of this Section IV, at any time should Licensor determine that the ocean water quality adjacent to the pier has degraded as measured by water testing from the County of San Luis Obispo environmental health department, and that Licensee’s customers or others have been observed by City employees violating Pismo Beach Municipal Code Section

12.20.195 with popcorn furnished by Licensee on more than three occasions, the City may give Licensee written notice to cease the selling of popcorn from the premises. If given such notice by the City, Licensee shall cease selling popcorn from the premises within 30 days following receipt of such notice.

D. Certificates and Permits.

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meet all current regulations governing the operation of Licensee’s business. With the first month’s License Fee that Licensee pay at the beginning of this License, Licensee shall also provide the Licensor with true photocopies of all the current certificates and permits citied above in this section. Thereafter, within 30 days of receiving any new or updated certificates or permits, Licensee shall provide true copies thereof to the Licensor.

E. Alterations to Vending Airstream
Licensee may not make any alteration to the Vending Airstream without the express written approval of the Licensor. Licensor's approval of plans and specifications or any change to the allowable uses shall be within its sole and absolute discretion.

F. Operation – Hours: Licensee shall, at all times, maintain a written schedule delineating the operating hours, which schedule shall be pre-approved by the Administrative Services Director and posted so that it is visible to the general public at all times.

Hours of operation during peak season (Memorial Day weekend through Labor Day weekend) shall be not less than seven days a week from 9:00 A.M. to 7:00 P.M. During the remaining of the year, the Licensee shall be open from Friday to Monday, 9:00 A.M. to 4:00 P.M, except during inclement weather.

For special events or when the pier is closed for maintenance or other reasons, the Licensee shall work with the Licensor on operations during those periods. In such instances, Licensee may be required to close its business or be subject to temporary relocation of the Vending Airstream, and Licensor shall provide to Licensee not less than 30 days’ advance notice of such events.

G. Maintenance – Licensee, at its sole cost and expense, shall maintain the interior of the Vending Airstream, in a condition acceptable to the Licensor in good condition and repair as may be worn by normal wear and tear, and Licensor shall not have any responsibility therefore. For required maintenance and repairs conducted by the Licensor, Licensee shall reimburse the Licensor for the labor, equipment, administration, and materials expended to perform such work.

Licensee shall keep the Vending Airstream clean and sanitary at all times.

Licensee shall regularly inspect the Vending Airstream as necessary to protect the public from safety hazards. No offensive materials, debris, bait, inventory, engines of any kind, support equipment or refuse matter nor any substance constituting any unnecessary, unreasonable or unlawful fire hazard or material detrimental to the public health shall be permitted on or within ten (10) feet of the Vending Airstream.

V. LICENSE TERM EXTENSION
A. The Parties may opt to extend this License for two one-year periods upon mutual DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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consent without amendment of this License. In the event the Parties fail to agree on an extension of this License, it shall expire as set forth in Section II.

B. Beyond the Term described in Section II, above, or any extension of the Term, this License shall continue month-to-month until either Party sends the other Party a thirty 30) day termination notice.

VI. UTILITIES
Licensee will be responsible for payment of utilities. Water and sewer, will be charged by the City of Pismo Beach to the Licensee according to the City’s fee schedule. Electricity and security system costs will be charged to the Licensee based on actual costs.

Telephone, internet, and garbage expenses are the responsibility of the licensee.

VII. LIABILITY INSURANCE
Licensee shall procure and maintain for the duration of the License insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Licensee’s operation and use of the licensed premises. The cost of such insurance shall be borne by the Licensee.

A. Minimum Scope of Insurance. Coverage shall be at least as broad as:

1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).

2. Workers’ Compensation insurance as required by the State of California and Employer’s Liability insurance for any employees of Licensee.

B. Minimum Limits of Insurance. Licensee shall maintain limits no less than:

1. General Liability: $1,000,000 per occurrence/$2,000,000 aggregate for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Licensed property or the general aggregate limit shall be twice the required occurrence limit.

2. Employer’s Liability: $1,000,000 per accident for bodily injury or disease.

C. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the Licensor. At the option of, the Licensor, either:
the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the Licensor, its officers, elected and appointed officials, employees and volunteers; or the Licensee shall procure a bond guaranteeing payment of losses and related investigations and defense expenses in an amount equal to such deductible or self-insured retention.

DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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D. Other Insurance Provisions. The general liability policy shall contain, or be endorsed to contain, the following provisions:

1. The Licensor, its officers, elected and appointed officials, employees and volunteers are to be covered as insureds as respects: liability arising out of premises owned, occupied or used by the Licensee. The coverage shall contain no special limitations on the scope of protection afforded to the Licensor, its officers, elected and appointed officials, employees or volunteers.

2. The Licensee’s insurance coverage shall be primary insurance as respects the Licensor, its officers, elected and appointed officials, employees and volunteers. Any insurance or self-insurance maintained by the Licensor, its officers, elected and appointed officials, employees or volunteers shall be in excess of the Licensee’s insurance and shall not contribute with it.

3. Any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the Licensor, its officers, officials, employees or volunteers.

4. Coverage shall state that the Licensee’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, returned receipt requested, has been given to the Licensor.

6. All insurance coverage maintained or procured pursuant to this License shall be endorsed to waive subrogation against Licensor, its elected or appointed officials, agents, officers, employees, and volunteers or shall specifically allow Licensee or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Licensee hereby waive their own right of recovery against Licensor.

7. Requirements of specific coverage features or limits contained in this section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Licensee maintains higher limits than the minimums shown above, the Licensor requires and shall be entitled to coverage for the higher limits maintained by the Licensee. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Licensor.

DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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E. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.

Best’s rating of no less than A: VII.

F. Verification of Coverage. Licensee shall furnish the Licensor with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided or approved by the Licensor.

G. Licensor’s Right of Enforcement. In the event any policy of insurance required under this License does not comply with these specifications or is canceled and not replaced, Licensor has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Licensor will be promptly reimbursed by Licensee or Licensor will deduct such payments from the Security Deposit and require Licensee to return the Security Deposit to its full amount. In the alternative, Licensor may terminate the License for material breach.

VIII. INDEMNIFICATION
Except for the sole negligence or willful misconduct of Licensor, Licensee shall defend, indemnify and keep and hold Licensor, including Licensor’s elected officials, officers, employees and agents, their successors and assigns, harmless from any and all costs, liability, damage or expense (including costs of suit and fees and expenses of legal services) claimed by anyone by reason of injury to or death of persons, or damage to or destruction of property, including property of Licensee, sustained in, on or about the Licensed Premises or arising out of Licensee’s use or occupancy thereof, as a proximate result of the acts or omissions of Licensee, its employees and agents, or its contractors, licensees or invitees, their successors and assigns or arising out of the condition of the Licensed Premises, or any mechanic’s or materialman’s liens filed in connection with any work done on the Licensed Premises by or at the request or direction of Licensee.

Licensor shall, by appropriate, written notice to Licensee, advise Licensee as soon as practicable regarding any potential liability of Licensee under this Section IX. JANITORIAL SERVICES
Licensee shall provide routine janitorial service for the whole of the licensed premises sufficient to maintain the premises in a clean and sanitary manner.

X. REPAIRS AND REPLACEMENTS
A. Licensee shall be responsible for, and shall pay for, all routine maintenance and redecorating of the interior of the licensed premises.

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be permitted to remove or relocate the Vending Airstream in the event of pier maintenance upon thirty (30) calendar day’s written notice by the Licensor to Licensee. Licensor shall be permitted to remove or relocate the Vending Airstream at any time without notice in the event of an emergency that threatens the public health, safety or welfare. Licensee shall be entitled to no compensation for any loss or interruption of business, damages to contents, abatement of License Fee or other expenses of any kind during such time as the Vending Airstream is being moved or has been moved from its existing location.

Licensee’s sole recourse shall be an extension of the Term equal to the number of days Licensee’s business is closed due to the relocation or removal of the Vending Airstream.

C. Licensee shall not make, or suffer to be made, any alteration of the said premises, or any part thereof, without the written consent of the Licensor first had and obtained.

Licensee shall keep the demised premise and the property in which the demised premises are situated free from any liens arising out of any work performed, materials furnished, or obligations incurred by Licensee. More specifically, Licensee shall not authorize or permit the imposition of any lien, security, or collateral obligation against any of said improvements. Failure by Licensee to remove or clear any such obligations within thirty 30) days after Licensee have or receive knowledge thereof shall be a material and actionable breach hereof.

XI. PARKING
Licensee shall have the non-exclusive right to utilize the existing pier parking areas to drop off and pick up inventory for the concession area. Nothing in this License shall entitle Licensee to free or discounted parking in violation of the Licensor’s paid parking requirements for the existing pier parking areas. The Licensee is not allowed to drive on the pier or on the pier promenade plaza area. The Licensee is allowed to take deliveries on the pier from carts, but not trucks or cars. The Licensee is allowed to park on the pier promenade plaza area designated by the Police Chief, hashed area, for deliveries, preferably during non-peak hours.

XII. POSSESSORY INTEREST
No fee interest in real property is hereby conveyed; however, by the execution of this License and accepting the benefits thereof, a property interest known as “possessory interest” may be created and such property interest will be subject to property taxation. Licensee, as the party to whom the possessory interest is vested, shall be responsible for the payment of all property taxes levied upon such interest. Licensee acknowledges that the notice required under California Revenue and Taxation Code Section 107.6 has been provided. Licensee shall be responsible for paying all personal property taxes with respect to Licensee’s personal property at the Licensed Premises.

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confer no rights on any third party, and shall be good cause for termination of this License by Licensor at its option. This License shall not be assignable by operation of law.

XIV. DESTRUCTION OF PREMISES- CONDEMNATION
If during the term of this License, the premises are damaged or destroyed by fire, act of God, condemnation or other cause, so as to render the premises unfit for occupancy, or so as to substantially prevent or impair Licensee’s use of the premises for intended purposes, then this License shall terminate upon the mutual agreement of the parties hereto.

XV. DEFAULT BY LICENSEE
In addition to the foregoing provisions, each of the following shall be deemed a default by Licensee and a breach of this License:

A. Failure to make any payment of money to Licensor when due hereunder for a period of five (5) days after notice in writing to Licensee.

B. Failure to do, observe, keep and perform any of the other terms, covenants, conditions, agreements and provisions of the License on the part of the Licensee to be done, observed, kept and performed for a period of thirty (30) days after notice in writing to Licensee.

C. The abandonment of the premises by Licensee for a period in excess of thirty (30) days.

D. The filing of voluntary or involuntary petition in bankruptcy, or for reorganization, or for an arrangement for creditors by or against Licensee.

E. The making by Licensee of a general assignment, or any assignment for the benefit of their creditors.

F. The taking by Licensee of the benefit of any insolvency act or law.

G. The appointment of a receiver or trustee of the business or the assets of Licensee.

Should default be made in the maintenance and performance of any of the covenants herein contained, the Licensor, its agents or attorney may re-enter and take possession of said premises and remove all persons therefrom and at its option, terminate the License.

XVI. TERMINATION OF LICENSE
At the termination of this License, unless otherwise directed by Licensor in writing, Licensee shall remove the all furniture, appurtenances and supplies and restore the Vending Airstream to the same condition as the Vending Airstream was in at the inception DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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of this License, normal wear and tear excepted.

XVII. NOTICES
Any notices, demands or communication, under or in connection with this License, shall be served upon Licensor by personal service, or mailing the same by certified mail in the United States Post Office, or postage prepaid, and directed to Licensor at: Administrative Services Department
City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
And shall be served on Licensee at: Sheldon’s Bait Shack 471 Dell Court
Pismo Beach, CA
Either the Licensor or Licensee may change such address by notifying the other party in writing as to such new address as Licensee or Licensor may desire be used and which address shall continue as the address until further written notice.

XVIII. GENERAL PROVISIONS
A. Governing Law.

This License shall be governed, construed and interpreted by, through and under the Laws of the State of California. Any action or proceeding brought regarding this License shall be brought in the Superior Court of the County of San Luis Obispo, or in the United States District Court for the Central District of California. The prevailing party in any legal action or proceeding arising hereunder shall be entitled to its reasonable attorneys’ fees and court costs.

B. Successors
The provisions of this License shall extend to and be binding upon Licensor and Licensee and their respective legal representatives, successors and assigns.

C. Waiver
The waiver of any breach of any term, condition and/or obligation under this License shall not be construed as a continuing waiver of the same breach or a waiver if any subsequent breach. No custom or practice which may develop between the parties in the implementation or administration of the terms of this License shall be construed to waive or lessen any right to insist upon strict performance of the terms of this License Agreement.

XIX. TOTALITY OF THE AGREEMENT
This License terminates and supersedes all prior understandings or agreements on the DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F

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subject matter hereof by and between Licensor and Licensee. This License may be modified only by a further writing that is duly executed by both parties. If any provision of the License is held to be invalid or unenforceable by a court of competent jurisdiction with respect to any party, the remainder of this License or the application of such provision to persons other than those as to whom it is held invalid or unenforceable shall not be affected, and each provision of this License shall be valid and enforceable to the fullest extent permitted by law. The parties acknowledge and agree that each of the parties have been represented by counsel or has had full opportunity to consult with counsel and that each of the parties has participated in the negotiation and drafting of this License.

Accordingly it is the intention and agreement of the parties that the language, terms and conditions of this License are not to be construed in any way against or in favor of any party hereto by reason of the roles and responsibilities of the parties or their counsel in connection with the preparation of this License.

IN WITNESS WHEREOF, the Parties hereto have executed this License in duplicate originals as of the date first written herein above.

LICENSOR:

CITY OF PISMO BEACH
James R. Lewis, City Manager Date
LICENSEE:

Sheldon’s Bait Shack Date Sheldon’s Bait Shack Date
Troy Sheldon Regina Sheldon
ATTEST:

Erica Inderlied, City Clerk
APPROVED AS TO FORM:

David Fleishman, City Attorney
DocuSign Envelope ID: 486EFC70-6056-4CC9-BC96-5AE438CAA46F 11/13/2020 11/13/2020
11/16/2020

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Attachment 1

1 LICENSE AGREEMENT
This license agreement, effective November 13, 2020 (hereinafter referred to as License”), is by and between the two Parties: the City of Pismo Beach, California, a municipal corporation (hereinafter referred to as “Licensor” or “City”), and Rib Line by the Beach, LLC., an individual or proprietor (hereinafter referred to as “Licensee”).

NOW, THEREFORE, the Parties hereto agree as follows:

I. PREMISES:

Licensor hereby Licenses to Licensee a Vending Airstream located at 100 Pier Way on the Pismo Beach pier in the City of Pismo Beach, California, commonly referred to as the Vending Airstream.

II. TERM:

A. The License Term shall be for a three-year period commencing November 13, 2020 and ending on October 31, 2023, with two one-year options as described in Section V.

B. On or before the first anniversary of the License commencement date set forth above, the City shall review Licensee’s compliance with this License agreement.

The City’s review shall provide Licensee an objective evaluation of performance.

1. Effective upon the commencement of this License, the Base License Fee shall be two thousand Dollars ($2,000.00) per month for the first year (prorated to $1,200 for November 2020 only based on November 13, 2020 commencement date); then DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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2 two thousand one hundred Dollars ($2,100.00) per month for the second year; and two thousand two hundred and five Dollars ($2,205) per month for the third year.

2. In the event the License Term is extended as set forth in Section V, or the License continues on a month-to-month basis beyond the Term as set forth in Section V, effective on November 1, 2025, and thereafter on each November 1 of any subsequent year, the Base License Fee shall be increased by 5% per year.

The New License Fee shall be rounded to the nearest dollar per month, and in NO event shall any New License Fee be less than the Base License Fee that was in effect on the prior November 1.

B. Percentage License Fee: In the months during which the Licensee’s gross receipts as defined in Pismo Beach Municipal Code Section 5.04.010) exceed the Base License Fee, the Licensee shall, for each month of the Term or any extension of the Term, pay on the fifteenth day of the next succeeding month, without abatement, deduction, or offset, an additional license fee amount as “Percentage License Fee”, which is calculated pursuant to the percentages of gross receipts, set forth below:

1. Two percent (2%) of the gross receipts of sales including but not limited to the sale of food, snacks, water, soda, beer and wine.

2. Two percent (2%) of the gross receipts from any and all business activities not otherwise provided for in this subsection.

The Percentage License Fee shall be due and payable to the Administrative Services Department on the fifteenth day of the next succeeding month. There shall be no averaging of calendar months, or any portion thereof.

C. Late Payments: Licensee agrees that if the Base License Fee and Percentage License Fee due hereunder from Licensee to Licensor remains unpaid after said payment is due, Licensee shall pay to the Licensor a late charge equal to Five percent (5%) of the amount due. Additional interest will be charged at 2% per annum of the amount of the delinquent Base License Fee and Percentage License Fee, which late charge shall be added to and become part of the delinquent Base License Fee or Percentage License Fee.

D. Monthly Statements & Percentage License Fee Payment Due Date Licensee shall deliver to the Licensor on or before the fifteen (15th) day of each calendar month during the Term or any extension of the Term, a statement of all gross receipts for the preceding calendar month along with any Percentage License Fee payment due for the preceding calendar month.

The statement shall be signed by the Licensee and shall be in the form reasonably prescribe by the Licensor.

Licensee acknowledges that, in signing the statement, it is certifying under penalty of perjury of the laws of the State of California that the statement is a complete and DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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3 accurate representation of all matters set forth therein.

Each such monthly statement shall include:

1. The total Licensee’s gross receipts for the period broken down into the two categories described in section III.B;

2. The total Percentage License Fee payment.

It is agreed that all computations shall be made on a monthly basis and shall be made separately for each month throughout the Term of this License, or any extension of the Term, without regard to any other month or accounting year.

There shall be no credit or refund of License Fee payments to the Licensor unless and error has been made in the reporting of the monthly amount of gross receipts.

E. Licensee Financial Records
Licensee shall keep and maintain full, complete, and appropriate books, records, and accounts related to the Vending Airstream, including all such records necessary or prudent to evidence and substantiate in full detail Licensee’s calculation of Percentage License Fee. These records, including source documents, receipts, bank deposit receipts, and any other documents (“Financial Records”) shall be available to the Licensor upon Licensor’s request for purposes of review or auditing.

F. Licensor’s Right to Audit Current Records
The Licensor shall have the right to audit and examine the Licensee’s Financial Records necessary for a proper determination of the amount of Licensee’s gross receipts, and all such records shall be held available by Licensee for such purpose.

Licensee shall preserve records on which any statement of gross receipts is based for a period of not less than five (5) years after such statement is rendered.

The receipt by Licensor of any statement, record, or any payment by Licensee or acceptance by Licensor of any Percentage License Fee for any period shall not bind Licensor as to the correctness of such statement or such payment.

Within five (5) years after the receipt of any such statement, Licensor or any designated agent or employee of Licensor at any time shall be entitled to audit the gross receipts and all books, records, and accounts of Licensee pertaining thereto.

Such audit shall be limited to the determination of the gross receipts and shall be conducted during the Licensor’s normal business hours.

If it is determined, as a result of such audit that there has been a deficiency in the payment of Percentage License Fee, then such deficiency shall become immediately due and payable as an additional License Fee with interest at fifteen percent (15%) per annum or the maximum rate permitted by law, whichever is greater, from the date when said payment should have been made.

DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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4 In addition, if Licensee's statement for any calendar month is found to have understated Gross Receipts by more than two percent (2%) and Licensor is entitled to any additional Percentage License Fee as a result of said understatement, then Licensee shall pay, in addition to the interest charges referenced hereinabove, all of Licensor's reasonable costs and expenses connected with any audit or review of Licensee’s accounts and records. if Licensee's statement for any calendar month is found to have understated Gross Receipts by more than five percent (5%), Licensee shall be deemed to be in material default of this License, entitling Licensor to terminate the License.

G. Point of Sale System
All sales and transactions made from the Vending Airstream shall be recorded by means of cash registers or other comparable devices to be approved by the Licensor, which display to the customer the amount of the transaction and can issue a receipt for every transaction. The registers shall be equipped with devices which lock in sales totals and other transaction records, and with counters which are not re-settable and which record transaction numbers and sales details. Totals registered shall be read and recorded at the beginning and end of each day.

Licensee shall conduct all sales and transactions using the cash registers or comparable devices, and Licensee shall account for each and every sale or transaction in a manner allowing Licensor to verify the date, amount and other details of the sale or transaction upon request of Licensor. Licensor reserves the right to anonymously conduct sales transactions with Licensee at any time to verify Licensee’s compliance with this subsection.

H. Security Deposit
Licensee agrees to pay the Licensor $5,100 as a Security Deposit. The Security Deposit shall be held by Licensor without liability for interest and as security for the performance by Licensee of Licensee's covenants and obligations under this License, it being expressly understood that the Security Deposit shall not be considered an advance payment of license fees or a measure of Licensor's damages in case of default by Licensee. Unless otherwise provided by mandatory non-waivable law or regulation, Licensor may commingle the Security Deposit with Licensor's other funds. Licensor may, from time to time, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages of license fees or to satisfy any other covenant or obligation of Licensee hereunder. Following any such application of the Security Deposit, Licensee shall pay to Licensor on demand the amount so applied in order to restore the Security Deposit to its original amount. If Licensee is not in default at the termination of this License, the balance of the Security Deposit remaining after any such application shall be returned by Licensor to Licensee. If Licensor transfers its interest in the Premises during the term of this License, Licensor may assign the Security Deposit to the transferee and thereafter shall have no further liability for the return of such Security Deposit.

DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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5 IV. USE, OPERATION, AND MAINTENANCE OF THE VENDING AIRSTREAM A. Permitted Use
Licensee shall use the Vending Airstream for the purpose of selling food and beverages including beer and wine, pre-packaged snacks and popcorn in accordance with Federal, California and City laws and regulations. Licensee may not change or expand upon the allowable uses as stated herein without the express written approval of the Licensor.

Licensee shall also immediately remove any popcorn or food items observed on the pier on or around the premises.

D. Certificates and Permits.

Licensee shall be in possession of, and shall display at all times, certificates or permits issued by the appropriate County, City or State health authorities certifying that the premises occupied, equipment, the products sold and the method of selling meet all current regulations governing the operation of Licensee’s business. With the first month’s License Fee that Licensee pay at the beginning of this License, Licensee shall also provide the Licensor with true photocopies of all the current certificates and permits citied above in this section. Thereafter, within 30 days of receiving any new or updated certificates or permits, Licensee shall provide true copies thereof to the Licensor.

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6 absolute discretion.

Hours of operation during peak season (Memorial Day weekend through Labor Day weekend) shall be not less than seven days a week from 7:00 A.M. to 7:00 P.M. During the remaining of the year, the Licensee shall be open a minimum of 40 hours per week.

Licensee shall keep the Vending Airstream clean and sanitary at all times.

V. LICENSE TERM EXTENSION
A. The Parties may opt to extend this License for two one-year periods upon mutual consent without amendment of this License. In the event the Parties fail to agree on an extension of this License, it shall expire as set forth in Section II.

VI. UTILITIES
Licensee will be responsible for payment of utilities. Water and sewer will be charged by DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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7 the City of Pismo Beach to the Licensee according to the City’s fee schedule. Electricity, gas, and security system costs will be charged to the Licensee based on actual costs.

Internet will be charged to the Licensee based on actual costs plus an additional amount to account for private usage. Garbage and telephone expenses are the responsibility of the licensee.

A. Minimum Scope of Insurance. Coverage shall be at least as broad as:

1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).

2. Workers’ Compensation insurance as required by the State of California and Employer’s Liability insurance for any employees of Licensee.

B. Minimum Limits of Insurance. Licensee shall maintain limits no less than:

2. Employer’s Liability: $1,000,000 per accident for bodily injury or disease.

D. Other Insurance Provisions. The general liability policy shall contain, or be endorsed to contain, the following provisions:

DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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8 2. The Licensee’s insurance coverage shall be primary insurance as respects the Licensor, its officers, elected and appointed officials, employees and volunteers. Any insurance or self-insurance maintained by the Licensor, its officers, elected and appointed officials, employees or volunteers shall be in excess of the Licensee’s insurance and shall not contribute with it.

E. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.

Best’s rating of no less than A: VII.

G. Licensor’s Right of Enforcement. In the event any policy of insurance required under DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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9 this License does not comply with these specifications or is canceled and not replaced, Licensor has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Licensor will be promptly reimbursed by Licensee or Licensor will deduct such payments from the Security Deposit and require Licensee to return the Security Deposit to its full amount. In the alternative, Licensor may terminate the License for material breach.

X. REPAIRS AND REPLACEMENTS
A. Licensee shall be responsible for, and shall pay for, all routine maintenance and redecorating of the interior of the licensed premises.

B. Licensee shall, at their sole cost and expense, keep and maintain the inside of said premises and appurtenances and every part thereof, including windows, in good and sanitary order, condition, and repair, hereby waiving all right to make repairs at the expense of the Licensor as provided in Section 1942 of the Civil Code of the State of California, and all rights provided for by Section 1941 of said Civil Code. Licensor shall be permitted to remove or relocate the Vending Airstream in the event of pier maintenance upon thirty (30) calendar day’s written notice by the Licensor to Licensee. Licensor shall be permitted to remove or relocate the Vending Airstream at any time without notice in the event of an emergency that threatens the public health, safety or welfare. Licensee shall be entitled to no compensation for any loss or interruption of business, damages to contents, abatement of License Fee or other expenses of any kind during such time as the Vending Airstream is being moved or has been moved from its existing location.

Licensee’s sole recourse shall be an extension of the Term equal to the number of days DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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10 Licensee’s business is closed due to the relocation or removal of the Vending Airstream.

C. Licensee shall not make, or suffer to be made, any alteration of the said premises, or any part thereof, without the written consent of the Licensor first had and obtained.

XI. PARKING
Licensee shall have the non-exclusive right to utilize the existing pier parking areas to drop off and pick up inventory for the concession area. Nothing in this License shall entitle Licensee to free or discounted parking in violation of the Licensor’s paid parking requirements for the existing pier parking areas. The Licensee is allowed to drive, take deliveries or park on the pier or on the pier promenade plaza area in a City-approved ( approved by the Director of Public Works and the Police Chief) electric vehicle.

XIII. ASSIGNMENT AND DEFAULT
Licensee shall not assign this License, or sublet the whole or any part of the premises, without the prior written consent of Licensor. Any attempt to do so shall be void, shall confer no rights on any third party, and shall be good cause for termination of this License by Licensor at its option. This License shall not be assignable by operation of law.

DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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11 XV. DEFAULT BY LICENSEE
In addition to the foregoing provisions, each of the following shall be deemed a default by Licensee and a breach of this License:

A. Failure to make any payment of money to Licensor when due hereunder for a period of five (5) days after notice in writing to Licensee.

C. The abandonment of the premises by Licensee for a period in excess of thirty (30) days.

D. The filing of voluntary or involuntary petition in bankruptcy, or for reorganization, or for an arrangement for creditors by or against Licensee.

E. The making by Licensee of a general assignment, or any assignment for the benefit of their creditors.

F. The taking by Licensee of the benefit of any insolvency act or law.

G. The appointment of a receiver or trustee of the business or the assets of Licensee.

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12 Licensor at: Administrative Services Department
City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
And shall be served on Licensee at: Rib Line by the Beach, LLC.

Dba Sunsets at Pismo
P.O. Box 1540
Pismo Beach, CA 93448
Either the Licensor or Licensee may change such address by notifying the other party in writing as to such new address as Licensee or Licensor may desire be used and which address shall continue as the address until further written notice.

XVIII. GENERAL PROVISIONS
A. Governing Law.

B. Successors
The provisions of this License shall extend to and be binding upon Licensor and Licensee and their respective legal representatives, successors and assigns.

XIX. TOTALITY OF THE AGREEMENT
This License terminates and supersedes all prior understandings or agreements on the subject matter hereof by and between Licensor and Licensee. This License may be modified only by a further writing that is duly executed by both parties. If any provision of the License is held to be invalid or unenforceable by a court of competent jurisdiction with respect to any party, the remainder of this License or the application of such provision to persons other than those as to whom it is held invalid or unenforceable shall not be affected, and each provision of this License shall be valid and enforceable to the fullest extent permitted by law. The parties acknowledge and agree that each of the parties DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F

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13 have been represented by counsel or has had full opportunity to consult with counsel and that each of the parties has participated in the negotiation and drafting of this License.

IN WITNESS WHEREOF, the Parties hereto have executed this License in duplicate originals as of the date first written herein above.

LICENSOR:

CITY OF PISMO BEACH
James R. Lewis, City Manager Date
LICENSEE:

Rib Line by the Beach, LLC Date Rib Line by the Beach, LLC Date Krystal Appiano Brian Appiano
ATTEST:

Erica Inderlied, City Clerk
APPROVED AS TO FORM:

David Fleishman, City Attorney
DocuSign Envelope ID: 923F8788-E9E7-4E7D-9FEB-D4ACBDA3FB8F 11/13/2020 11/20/2020
11/20/2020

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Pismo Beach City CouncilJune 20, 2023

Pismo Beach City Council
June 20, 2023