April 19, 2022, Item #4
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AGENDA REPORT CityofPoway
April 19, 2022
Honorable Mayor and Members of the City Council
Wendy Kaserman, Assistant City Manager ~\(__
Craig Ruiz, Economic Development AdministratorQ,{L---
858-668-4509, [email protected]
CITY COUNCIL
Approval of Lease Agreement with Moon Valley Nurseries Inc., an Arizona corporation, for the use of City-owned property near Highland Valley Road On December 20, 2006, the City of Poway ("City") entered into a lease agreement ("Evergreen Lease") with Evergreen Nurseries ("Evergreen") for an approximately eight-acre portion of a City-owned property ("Leased Area") to use as a growing and holding area for nursery products. The lease agreement expired on December 19, 2021. Prior to the lease expiration, the business was sold to Moon Valley Nurseries ("Moon Valley''). Moon Valley and the City are now seeking to enter into a new agreement ("Moon Valley Lease"). Moon Valley plans to continue using the land as a growing and holding area for nursery products.
Recommended Action:
It is recommended the City Council approve a five-year lease agreement with two, five-year options with Moon Valley Nurseries, Inc., an Arizona corporation, for the continued operation of a commercial nursery growing yard on 8.05 acres of a City-owned property located approximately 1 mile east of the intersection of Highland Valley Road and Sycamore Creek Road, Assessor Parcel Number 272-150-38, and authorize the City Manager to execute the agreement on behalf of the City.
Discussion:
The City owns a 163-acre property ("Property") that is located south of Highland Valley Road, along the northern city limit. Apart from the 8.05 acre Leased Area used for the nursery growing operation, the remainder of the Property is vacant and contains sensitive habitat. The Property is accessed from the Old Coach Trail at Heritage Drive in the City of Poway or the Old Coach Staging Area on Highland Valley Road in the City of San Diego.
In 2006, the City entered into a lease agreement with Evergreen for the 8.05-acre Leased Area for use as a growing and holding area for nursery products. The Evergreen Lease was for five years, with two, five year options to renew. The Evergreen Lease, which expired on December 19, 2021, contained a clause that prohibited the transfer of the Evergreen Lease without the written approval of the City. 1 of 17
April 19, 2022, Item #4
Beginning
in
the
summer
of
2021,
staff
reached
out
to
Evergreen
on
three
occasions
about
their
interest
in
renewing
the
Evergreen
Lease.
Evergreen
did
not
respond
to
the
City's
inquiries.
In
November
2021,
staff
learned
that
Evergreen
had
sold
their
business
to
Moon
Valley
Nurseries.
Moon
Valley
was
unaware
that
approval
was
required before
they
could
assume
the
Evergreen
Lease.
However,
Moon
Valley
was
aware
that
the
lease
was
about
to
expire
and
indicated
they
did
want
to
pursue
a
new
agreement
with
the
City.
The
previous
Evergreen
Lease
rent
was
significantly
below
the
market
average
and
below
the
average
lease
rate
for
other
City-owned
properties.
Moon
Valley
has
agreed
to
an
initial
rent
amount
and
annual
rent
increases
in
each
of
the
first
five
years
to
get
the rent
to
an
amount
more
consistent
with
that
charged
to
other
city
owned
properties.
The
initial
rent
is
$4,200
per
month
and
will
increase
by
$750
per
month
for
each
year
of
the
lease.
Beginning
in
year
nine,
the
rent
amount
will
be
consistent
with
the rent
charged
for
other
City
properties.
The
total
rental
income
for
the
initial
five-year
term
is
$342,000
and
if
both
five
year
extensions
are
executed,
the
total
rental
income
to
the
City
will
be
$1,701,000.
While
the rent
amount
in
the
initial
years
is
below
the
average
rent
charge
at
other
City
properties,
the
lower
amount
recognizes
that
this
is
an
agricultural
use,
and
it
is
in
the
City's
best
interest
to
have
a
business
operating
at
the
property,
so
the
City
is
not
responsible
for
property
maintenance.
Moon
Valley
is
a successful
nursery
operator.
They
have
41 nurseries
in
five
states,
including
five
locations
in
San
Diego
County.
The
proposed
Moon
Valley
Lease
is
for
five
years,
with
two,
five-year
options
to
renew.
The
agreement
allows
for
Moon
Valley
to
continue
the
operation
of
growing
and
holding
of
nursery
products
as
has
been
conducted
for
the
past
15 years.
Similar
to
the
Evergreen
operation,
there
will
not
be
any
retail
operations
conducted
on
the
Lease
Area,
therefore
no
sales
tax
will
be
generated
from
the
operation. Environmental
Review:
This
action
is
not
subject
to
review
under
the
California
Environmental
Quality
Act
(CEQA).
Fiscal
Impact:
As
noted
previously,
the
Leased
Area
has
been
used
as
a
nursery
growing
area
for
the
past
fifteen
years.
The
financial
terms
of
the
Moon
Valley
Lease
have
been
increased
from
the
Evergreen
Lease
to
be
consistent
with
similar
agricultural
leases
in
the
region.
The
agreement
will
generate
$342,000
in
revenue
for
the
initial
five-year
term
and
$1,701,000
if
both
five-year
extensions
are
executed.
Public
Notification:
None. Attachments: A.
Site
Map
B.
Leasable
Area
C.
Lease
Agreement
with
Moon
Valley
Nurseries
Reviewed/Approved
By:
Reviewed
By:
Alan
Fenstermacher
2 of
17 April 19, 2022, Item #4
3 of
17 Exhibit
A
Vicinity
Map
APN
272-150-38 ATTACHMENT
A
April 19, 2022, Item #4
4 of
17 Exhibit
B
Leased
Area
AP
N
272-150-38
ATTACHMENT
B
April 19, 2022, Item #4
Exhibit
C
Lease
Agreement
with
Moon
Valley
Nurseries
5 of
17 ATTACHMENT
C
April 19, 2022, Item #4
LEASE
AGREEMENT
This
LEASE
AGREEMENT
("Lease")
is
entered
into
as
of
December
20,
2021
(the
"Effective
Date"),
by
and
between
the
City
of
Poway,
a
Municipal
Corporation
(the
"Landlord"),
and
Moon
Valley
Nurseries
Intermediate
Holdings,
LLC,
a
Delaware
limited
liability
company
('Tenant").
The
Landlord
and
the
Tenant
are
at
times
referred
to
herein
as
the
"Parties".
RECITALS
WHEREAS,
Landlord
is
the
owner
in
fee
simple
of
an
unimproved
parcel
of
land
located
in
the
City
of
Poway,
San
Diego
County,
State
of
California,
legally
described
on
the
attached
Exhibit
A
("the
Owned
Premises
11 ).
The
Assessor's
Parcel
Number
of
the
Owned
Premises
on
Highland
Valley
Road
is
APN
272-150-38.
WHEREAS,
Evergreen
Nursery
(Evergreen
11 )
entered
into
a
lease
agreement
with
the
City
of
Poway
("City
11 )
in
2006
to
use
as
a
growing
and
holding
area
for
nursery
products,
including
trees
on
property
owned
by
the
City
of
Poway.
WHEREAS,
the
lease
agreement
between
Evergreen
and
the
City
is
valid
through
December
19,
2021.
WHEREAS,
City
staff
has
recently
learned
that
Evergreen
Nursery
has
sold
their
business
to
the
Tenant
and
that
the
Tennant
is
currently
operating
the
business
on
City
property
.
WHEREAS,
Section
11 of
the
lease
agreement
between
Evergreen
and
the
City
prohibits
the
assignment
of
the
lease
and
any
rights,
benefits,
liabilities
and
obligations
to
any
person
or
entity,
without
the
prior
written
approval
of
the
City.
WHEREAS,
the
Tenant
and
Landlord
seek
to
enter
a
Lease
at
a
monthly
rental
rate
which
is
consistent
with
other
rental
agreements
on
City-owned
land
to
allow
for
the
continued
operation
of
the
nursery
business,
which
includes
growing
and
holding
areas
for
nursery
products
WHEREAS,
Tenant
successfully
operates
41 nursery
locations
in
five
states,
including
five
locations
in
San
Diego
County.
WHEREAS,
the
Tenant
will
obtain
any
and
all
necessary
permits
and
approvals
from
the
City
of
Poway
as
part
of
the
execution
of
the
Lease.
WHEREAS,
in
accordance
with
the
above,
by
this
Lease,
the
Landlord
desires
to
lease
to
the
Tenant,
and
the
Tenant
desires
to
lease
from
the
Owned
Premises
upon
the
terms
and
conditions
set
forth
herein.
WHEREAS,
the
parties
intend
this
Lease
to
be
retroactive
such
that
it
covers
the
entire
period
of
Tenanf
s occupancy
of
the
Owned
Premises.
WHEREAS,
the
parties
understand
and
agree
that
this
Lease
is
what
is
commonly
known
as
a
"triple
net"
or
"net-net-net"
lease,
except
as
otherwise
provided
herein,
and
Tenant
acknowledges
and
agrees
that
the
Landlord
shall
not
be
obligated
by
the
terms
of
this
Lease
or
otherwise
to
perform
any
maintenance
or
construct
or
repair
any
improvements
at
the
Property.
Additionally,
Tenant
6 of
17 April 19, 2022, Item #4
acknowledges
and
agrees
that
(i)
the
Landlord
has
made
no
representation
or
warranty
regarding
the
fitness
of
the
Property
for
Tenant's
intended
use
thereof,
and
(ii)
Tenant
is
familiar
with
the
condition
of
the
Property
and
the
appropriateness
of
the
Property
for
Tenant's
operation
of
the
Business
thereon. NOW,
THEREFORE,
the
Landlord and
Tenant
hereby
agree
as
follows:
1. Lease
Term.
The
Landlord
hereby
leases
to
Tenant
the
Property,
and
Tenant
hereby
leases
the
same
from
the
Landlord,
for
a
term
commencing
on
December
20,
2022
("Commencement
Date")
and
ending
on
December
19,
2027
(the
"Lease
Term").
Tenant
shall
have
the
right
to
renew
this
Lease
for
two
additional
periods
of
five
(5)
years
by
delivering
to
Landlord
written
notice
of
Tenant's
intent
to
renew
not
less
than
three
(3)
months
prior
to
the
expiration
of
the
Lease
Term,
or
of
the
first
extension
period.
Any
such
renewal
shall
be
on
the
same
terms
and
conditions
as
this
Lease.
2. Relocation
Assistance.
Tenant
hereby
acknowledges
and
agrees
that
Tenant
shall
not
incur
any
right,
interest,
or
claim
in
or
to
any
benefits
or
assistance
arising
under
Government
Code
Section
7260,
et
seq.
or
any
other
federal,
state
or
local
law,
rule,
or
regulation
relating
to
or
arising
from
Tenant's
relocation
from
the
Property
or
the
termination
of
this
Lease.
To
the
extent
Tenant
is
eligible
for
such
benefits Tenant
hereby
voluntarily
and
expressly
waives
each
and
every
right,
title
or
interest
in
and
to
such
benefits.
a.
Net
Lease.
It
is
the
intent
of
the
parties
that
the
rent
provided
herein
shall
be
absolutely
net
to
the
Landlord
and
that
Tenant
shall
pay
all
costs,
taxes,
assessments,
charges,
and
expenses
of
every
kind
and
nature
imposed
on
or
against
the
Property
which
may
arise
or
become
due
during
the
Lease
Term,
and
which,
except
for
execution
hereof,
would
or
could
have
been
payable
by
the
Landlord.
Tenant
recognizes
and
acknowledges
that
this
Lease
may
create
a "possessory
interest"
in
the
Property
as
defined
in
California
Revenue
and
Taxation
Code
section
107,
and
that
Tenant's
property
interest
may
be
subject
to
property
taxation
levied
on
the
Tenant's
property
interest.
Tenant
further
acknowledges,
and
agrees,
that
this
subdivision
(a)
meets
the
requirements
set
forth
in
Revenue
and
Taxation
Code
section
107.G(a).
b.
Rent.
Tenant
shall
pay
to
the
Landlord
during
the
initial
year
of
the
Lease
Term
the
amount
of
Four-Thousand
Two
Hundred
Dollars
($4,200.00)
per
month("Rent")
or
$50,400
per
year.
Tenant
shall
pay
rent
in
advance,
starting
on
the
Commencement
Date
of
this
Lease
and
on
the
1st
day
of
each
calendar
month
thereafter
("Rent
Due
Date"),
without
offset,
deduction,
prior
notice
or
demand,
beginning
on
the
Commencement
Date.
In
order
to
bring
the
Rent
amount
equal
to
the
standard
rental
rate
charged
for
other
City-owned
properties,
Rent
shall
be
annually
increased
by
Six
Thousand
Dollars
($9,000.00)
per
year
as
follows:
7 of
17 April 19, 2022, Item #4
Year 2
Year 3
C.
$59,400/year ($4,950/month)
$68,400/year ($5, 700/month)
Year 4
Year 5
$77,400/year ($6,450/month)
$86,400/year ($7,200/month)
If the Lease Term is renewed as described in Section 1 above, rent shall increase 3% per year for the remainder of the Lease.
d. Late Payment. Tenant shall pay Landlord a late payment charge equal to five percent {5%) of the Rent for any Rent not paid within thirty {30) days after receipt of notice from Landlord to Tenant. Any amounts not paid within the previously mentioned thirty (30) day period shall bear interest until paid at the lesser of the rate of two percent (2%) per month or the highest rate permitted by law. e. Termination. If this Lease is terminated at a time other than on the last day of the term, Rent shall be prorated as of the date of termination and, in the event of termination for any reason other than nonpayment of Rent, the balance of all prepaid Rent shall be refunded to Tenant within thirty {30) days of the date of termination and the removal of the Tenant's property from the Premises.
If this Lease is terminated at a time other than on the last day of the term, Rent shall be prorated as of the date of termination and, in the event of termination for any reason other than nonpayment of Rent, the balance of all prepaid Rent shall be refunded to Tenant within thirty (30) days of the date of termination and the removal of the Tenant's property from the Premises.
f. Expiration. Tenant will have no right or privilege whatsoever to use or occupy the License Area in any manner or for any purpose after this Lease expires or terminates. In the event that Tenant continues to use or occupy the Property after this Lease expires or terminates, this Lease will automatically convert to a month-to-month lease on the same terms and conditions, except that (1) the Rent will be automatically increased to one hundred fifty percent (150%) over the Rent payable in the immediately previous year, and will continue to increase in accordance with Section 3.a (Rent) and (2) either the City or Tenant may terminate such license on 30 days' written notice for any or no reason.
4. Hazardous Materials. Tenant shall not use, handle, store, or dispose of any hazardous, toxic, or radioactive matter including, without limitation, those materials identified in Chapter 11, Division 4.5 ofTitle 22 of the California Code of Regulations ("Title 22"), as amended from time to time (collectively, "Hazardous Materials").
Tenant shall be solely responsible for, shall pay for, defend (with an attorney approved by the Landlord, such approval not to be unreasonably withheld, conditioned or delayed), indemnify and hold the Landlord, its officials, officers, employees and agents, harmless against and from all claims, judgments, liabilities, losses, liens, costs and expenses, arising out of or involving any Hazardous Materials brought onto the Property by or for Tenant or by any of Tenant's employees, agents, contractors, visitors or invitees during the term of this Lease. Tenant's obligations hereunder shall exclude pre-existing conditions and shall include, but not be limited to, the investigation, removal, clean-up and/or restoration work as required by applicable law or ordered by any regulatory agency, including but not limited to the San Diego Regional Water Quality Control Board, the California Department of Toxic Substances Control, or the United States Environmental Protection Agency. 8 of 17
April 19, 2022, Item #4
5. Sublease and Assignment. Tenant shall not sublease all or any part of the Property, or assign this Lease in whole or in part without the Landlord's consent.
6. Access Rights to Third Party Property. Tenant is responsible at its sole expense for securing all necessary access rights from any and all third parties owning property adjacent to the leased premises. Tenant shall defend, indemnify and hold the Landlord, its elected and appointed officers, employees and agents, harmless from all liability whatsoever on account of any damage, injury or liability of any kind arising from Tenant's failure to secure such access rights from third party property owners.
7. Alterations and Improvements.
(a) Maintenance and Repairs. During and upon termination of the Lease Term, Tenant shall make all necessary repairs and maintenance to the Property, in so that the Property is returned to the Landlord in the manner of which it was leased, at Tenant's own expense. Tenant shall also make any and all repairs relating to the Tenant's specific use of the Property at Tenant's expense.
Tenant shall maintain all portions of the Property that are visible to the public in good condition, including the fencing, ground maintenance, and landscaping. Tenant shall exercise due diligence to ensure any airborne dirt/gravel/dust is mitigated for surrounding private properties. Graffiti on the Property shall be removed by Tenant within seventy-two (72) hours. In no event shall this Lease be interpreted to require the Landlord to expend funds for the purpose of conducting repairs or maintenance of the Property. Tenant acknowledges and agrees that Tenant is familiar with the condition of the Property and is aware of the adequacy and fitness of the Property for Tenant's intended use thereof for the operation of the Business. THE LANDLORD EXPRESSLY DISCLAIMS ANY
WARRANTY OF HABITABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR ANY
COVENANT OF QUIET ENJOYMENT WITH RESPECTTOTHE PROPERTY AND/OR TENANT'S USE THEREOF PURSUANT TO THIS LEASE. In the event ofa force majeure causing significant damage to the Property, Tenant may elect to make all necessary repairs and continue occupying the Property, or shall be entitled to terminate this Lease.
(b) Alterations and Improvements. Tenant, at Tenant's expense, shall have the right, following the City's reasonable consent, to make improvements to all or any part of the Property from time to time as Tenant may deem desirable, provided the same are made in a workmanlike manner, utilizing good quality materials, and in compliance with all applicable federal, state, and local statutes, rules, and regulations. Tenant shall have the right to place and install personal property, trade fixtures, equipment and other temporary installations in and upon the Property, and fasten the same to the Property. All personal property, equipment, machinery, trade fixtures and temporary installations, whether acquired by Tenant at the commencement of the Lease term or placed or installed on the Property by Tenant thereafter, shall remain Tenant's property free and clear of any claim by the Landlord. Tenant shall have the right to remove the same at any time during the term of this Lease; provided that Tenant shall be responsible for the repair ofany damage caused by such removal.
8. Liens. Tenant agrees that it will pay or cause to be paid all costs for work done by it or caused to be done by it on the Property ofa character which will or may result in liens on the Landlord's reversionary estate therein, and Tenant shall keep the Property free and clear of all mechanics' liens and other liens on account of work done for Tenant or persons claiming under it. If any such lien shall at any time be filed against the Property, Tenant shall either cause the same to be discharged within thirty (30) days after the recording thereof, or if Tenant, in Tenant's discretion and in good faith, determines that such lien should be contested, shall furnish such security as may be reasonably 9 of 17
April 19, 2022, Item #4
required
by
the
Landlord.
If
Tenant shall
fail
to
furnish
such
security,
then,
in
addition
to
any
other
right
or
remedy
of
the
Landlord
resulting
from
Tenant's
said
default,
the
Landlord
may,
but
shall
not
be
obligated
to,
discharge
the
same
either
by
paying
the
amount
claimed
to
be
due
or
by
procuring
the
discharge
of
such
lien
by
giving
security
or
in
such
other
manner
as
is,
or
may
be,
prescribed
by
law.
Tenant
shall
repay
to
the
Landlord,
as
"Additional
Rent,"
on
demand,
all
sums
disbursed
or
deposited
by
the
Landlord
pursuant
to
the
provisions
of
this
Paragraph
7,
including
all
costs,
expenses
and
attorneys'
fees
incurred
by
the
Landlord
in
connection
therewith.
Nothing
contained
herein
shall
imply
any
consent
or
agreement
on
the
part
of
the
Landlord
to
assume
any
liability
under
any
mechanics'
lien
or
other
lien
law.
Should
any
claims
of
lien
be
filed
against
the
Property
or
any
action
affecting
the
title
to
the
Property
be
commenced,
the
party
receiving
notice
of
such
lien
or
action
shall
forthwith
use
its
commercially
reasonable
efforts
to
give
the
other
party
written
notice
thereof
within
five
(5)
days
after
receipt.
The
Landlord
or
its
representative(s)
shall
have
the
right
to
post
and
keep
posted
upon
the
Property
notices
of
nonresponsibility
or
such
other
notices
that
the
Landlord
may
deem
to
be
proper
for
the
protection
of
the
Landlord's
interest
in
the
Property.
Tenant
shall,
before
the
commencement
of
any
work
that
might
result
in
any
such
lien,
give
to
the
Landlord
written
notice
of
its
intention
to
do
so
in
sufficient
time
to
enable
the
posting
of
such
notices
9. Insurance. (a)
Property
Insurance
Coverage.
Tenant
shall,
at
its
own
cost
and
expense,
maintain
in
full
force
and
effect
property
insurance,
including
fire
and
extended
coverage
insurance,
covering
Tenant's
personal
property,
including
removable
trade
fixtures,
located
in
the
Property,
in
such
amounts
as
the
Landlord
shall
deem
appropriate.
(b)
General
Liability
Insurance.
Tenant
shall,
at
its
own
cost
and
expense,
maintain
a
policy
or
policies
of
comprehensive
general
liability
insurance
with
respect
to
the
Property
with
the
premiums
thereon
fully
paid
on
or
before
the
due
date,
which
insurance
shall
afford
minimum
protection
in
the
aggregate
of
not
less
than
Two
Million
Dollars
($2,000,000)
combined
single
limit
coverage
of
bodily
injury,
property
damage
or
combination
thereof.
(c)
Workers'
Compensation
Insurance.
Tenant
shall
provide
workers'
compensation
insurance
as
required
by
law
(d)
Additional
Insurance
Requirements.
All
liability
insurance
shall
include,
but
not
be
limited
to,
personal
injury,
cross
liability,
and
severability
of
interest
clauses,
products/completed
operations,
broad
form
property
damage,
independent
contractors,
and
owned,
nonowned
and
hired
vehicles.
All
insurance
policies
shall
name
the
Landlord
as
an
additional
insured,
shall
provide
for
notice
to
the
Landlord no
later
than
thirty
(30)
days
prior
to
any
cancellation
or
modification
of
such
policies,
and
shall
be
provided
by
Class
A-VII
rated
insurance
carriers
reasonably
acceptable
to
the
Landlord.
Tenant
shall
provide
the
Landlord
with
current
Certificates
of
Insurance
evidencing
Tenant's
compliance
with
this
Paragraph
no
later
than
the
Commencement
Date
and
upon
any
subsequent
request
by
the
Landlord.
10 of
17 April 19, 2022, Item #4
10. Indemnification. (a)
Tenant
shall
defend,
indemnify
and
hold
the
Landlord,
its
elected
and
appointed
officers,
employees
and
agents,
harmless
from
all
liability
whatsoever
on
account
of
any
damage,
injury
or
liability
of
any
kind
or
for
any
injury
to
or
death
of
persons
or
damage
to
property
ofTenant
or
any
other
person
occurring
during
the
term
of
this
Lease
arising
from
any
of
the
following
(i)
the
use,
occupancy
or
enjoyment
of
the
Property,
or
Tenant's
operations
thereon,
by
Tenant
or
Tenant's
customers,
employees,
contractors,
subcontractors,
invitees,
permittees,
and
assignees,
or
(ii)
Tenant's
negligence
or
intentional
misconduct,
including
any
breach
of
this
Lease
beyond
any
applicable
notice
and
cure
period,
or
(iii)
liens,
claims
and
demands
related
to
Tenant's
use
of
the
Property.
Except
to
the
extent
arising
due
to
Landlord's
negligence
or
intentional
misconduct,
Tenant
shall
in
all
cases
accept
any
tender
of
the
defense
of
any
action
or
proceeding
arising
out
of
the
foregoing
in
which
Landlord
is
named
or
made
party
and
shall
defend
the
Landlord
as
provided
herein
with
counsel
reasonably
selected
by
Tenant.
Tenant
shall
not
be
liable
for
such
damage
or
injury
to
the
extent
and
in
the
proportion
that
the
same
is
ultimately
determined
to
be
attributable
to
the
negligence
or
misconduct
of
the
Landlord
or
its
officers,
employees,
agents
or
representatives,
or
the
Landlord's
failure
to
perform
its
obligations
pursuant
to
this
Lease.
Tenant's
obligation
to
indemnify
shall
include
reasonable
attorneys'
fees
and
investigation
costs
and
all
other
reasonable
costs,
expenses
and
liabilities
incurred
by
Landlord
. This
indemnity
provision
shall
apply
to
all
claims
that
accrued,
or
injuries
that
occurred,
prior
to
Tenant
vacating
the
Property,
regardless
of
when
such
claims
or
injuries
were
discovered.
11. Assumption
of
Risk.
Except
for
injuries
to
persons
caused
by
the
willful
misconduct
of
Landlord,
and
not
covered
by
insurance
maintained,
or
required
by
this
Lease
to
be
maintained,
by
Tenant:
(a)
Tenant
hereby
assumes
the
risk
ofany
and
all
injury
and
damage
to
the
personnel
(including
death)
and
property
of
Tenant,
including
its
employees,
contractors
and
subcontractors,
in
or
about
the
Property;
and
(b)
the
Parties
hereby
agree
that
the
Landlord
is
not
to
be
liable
for
any
injury
or
damage
which
may
be
sustained
by
the
person,
goods
or
property
of
Tenant
or
its
employees,
contractors,
subcontractors
in
or
about
the
Property,
whether
said
damage
or
injury
results
from
conditions
arising
within
the
Property
or
from
other
sources.
12. Utilities.
To
the
extent
applicable,
Tenant
shall
pay
any
and
all
charges
for
water,
sewer,
gas,
electricity,
telephone,
and/or
any
other
services
and
utilities
used
by
Tenant
on
the
Property
during
the
term
of
this
Lease
unless
otherwise
expressly
agreed
in
writing
by
the
Landlord.
Tenant
shall
indemnify
and
hold
the
Landlord
harmless
from
and
against
any
liability
or
damages
resulting
from,
arising
out
of,
or
connected
with,
the
provision
of,
or
failure
to
provide
or
pay
any
charges
assessed
against
the
Property
for
such
utility
services;
provided,
however
that
Tenant
shall
not
indemnify
the
Landlord
for
damages
resulting
from
the
loss
of
any
utility
service
which
results
from
the
Landlord's
conduct
or
the
conduct
of
any
contractors,
engineers
or
third
parties
acting
on
behalf
of
the
Landlord
that
are
in
the
Landlord's
control.
13. Inspection
. The
City
shall
have
the
right
to
enter
upon
the
Property
at
all
reasonable
hours
to
inspect
the
same
upon
one
(1)
business
day's
notice
to
the
Tenant,
provided
the
City
shall
not
thereby
unreasonably
interfere
with
Tenant's
business
on
the
Property.
14. Damage
and
Destruction.
In
addition
to
other
rights
herein,
if the
Property
or
any
part
thereof
or
any
appurtenance
thereto
is
so
damaged
by
fire,
casualty
or
structural
defects
that
the
same
cannot
be
used
for
Tenant's
purposes,
or
if
the
Property
cannot
be
used
for
Tenant's
purposes
for
any
other
reason,
then
Tenant
shall
have
the
right
within
ninety
(90}
days
following
such
damage
11 of
17 April 19, 2022, Item #4
to
elect
to
terminate
this
Lease
as
of
the
date
of
such
damage
by
providing
written
notice
to
the
City.
In
the
event
of
minor
damage
to
any
part
of
the
Property,
and
if
such
damage
does
not
render
the
Property
unusable
for
Tenant's
purposes
and
subject
to
Paragraph
6(a)
above,
Tenant
shall
promptly
repair
such
damage
at
Tenant's
sole
cost
and
expense.
In
making
the
repairs
called
for
in
this
paragraph,
Tenant
shall
not
be
liable
for
any
delays
resulting
from
strikes,
governmental
restrictions,
inability
to
obtain
necessary
materials
or
labor
or
other
matters
which
are
beyond
the
reasonable
control
of
Tenant.
15. Quiet
Possession.
The
Landlord
covenants
and
warrants
that
upon
performance
by
Tenant
of
its
obligations
hereunder,
the
Landlord
will
keep
and
maintain
Tenant
in
exclusive,
quiet,
peaceable,
undisturbed
and
uninterrupted
possession
of
the
Property
during
the
term
of
this
Lease;
provided
that
the
Landlord
shall
have
no
obligation
to
expend
funds
to
repair
or
maintain
the
Property
to
maintain
compliance
with
applicable
laws
orto
maintain
the
Leased
Premises
in
the
condition
required
for
Tenant's
intended
use
and
quiet
enjoyment
thereof.
16. Consent.
The
Landlord
shall
not
unreasonably
withhold
or
delay
its
consent
with
respect
to
any
matter
for
which
the
Landlord's
consent
is
required
or
desirable
under
this
Lease.
17. Material
Breach.
In
addition
to
any
other
remedies
available
at
law
or
in
equity,
any
party
not
in
default
hereunder
may
immediately
terminate
this
Lease
upon
the
breach
of
a
material
obligation
under
this
Lease
by
the
other
party
that
is
not
cured
within
thirty
(30)
days
after
written
notice
of
the
breach,
by
providing
written
notice
of
intent
to
terminate
to
all
other
parties
hereto.
18. Compliance
with
Law.
Tenant
shall
comply
with
all
federal,
state,
and
local
laws,
orders,
ordinances
and
other
public
requirements
now
or
hereafter
pertaining
to
Tenant's
operation
of
the
Business
and
its
use
of
the
Property.
The
Landlord
shall
comply
with
all
federal,
state,
and
local
laws,
orders,
ordinances
and
other
public
requirements
now
or
hereafter
affecting
the
Property.
19. Mutual
Representations.
Each
party
hereby
represents
and
warrants
(i)
he
or
she
is
an
individual
or
it
is
a
duly
organized
entity,
validly
existing
and
in
good
standing
under
the
laws
of
California
or
Delaware;
(ii)
that
the
party
has
the
legal
right
and
authority
to
enter
into
and
perform
its
obligations
under
this
Lease;
and
(iii)
that
the
execution
and
performance
of
this
Lease
will
not
conflict
with
or
violate
any
provision
of
any
law
having
applicability
to
such
party;
and
(iv)
that
this
Lease,
when
executed
and
delivered,
will
constitute
a
valid
and
binding
obligation
of
such
party
and
will
be
enforceable
against
such
party
in
accordance
with
its
terms.
20. Waiver.
No
express
waiver
shall
affect
any
default
other
than
the
default
specified
in
the
express
waiver
and
any
waiver
shall
be
effective
only
for
the
time
and
to
the
extent
therein
stated.
No
waiver
by
the
Landlord
or
Tenant
shall
be
construed
asa
waiver
ofa
subsequent
breach
of
the
same
covenant,
term
or
condition.
21. Assignment
and
Delegation.
Except
as
expressly
permitted
by
the
terms
and
provisions
herein,
no
party
shall
assign
any
of
its
rights
or
delegate
any
of
its
duties
hereunder
without
the
prior
written
consent
of
the
other
parties,
provided
that,
notwithstanding
the
foregoing,
each
party
may
assign
this
Lease
pursuant
to
a
merger
or
a
sale
of
all
or
substantially
all
of
its
assets
or
capital
stock.
Except
as
permitted
by
the
foregoing,
any
attempted
assignment
or
delegation
shall
be
null,
void
and
of
no
effect.
22. Notices.
All
notices
required
by
or
relating
to
this
Lease
shall
be
in
writing
and
shall
be
sent
via
certified
mail,
postage
prepaid,
return
receipt
requested
(and
by
email),
to
each
and
12 of
17 April 19, 2022, Item #4
every party to this Lease and addressed as follows:
To Tenant:
To Landlord:
Moon Valley Nurseries
Intermediate Holdings,
LLC
Attn: Brian Flood
19820 N. 7th Street,
Suite 260
Phoenix, AZ 85024
Email:BFlood@mvncorp.
com
City of Poway City
Attn: City Manager
13325 Civic Center Drive
Poway, CA 92064
Email: ----
23. Counterparts. This Lease may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
24. Headings. The article, section, and paragraph titles and headings contained in this Lease are inserted as a matter of convenience and for ease of reference only and shall be disregarded for all other purposes, including the construction or enforcement of this Lease or any of its provisions.
25. Definitions. Capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement.
26. Pronouns. Whenever used in this Lease, the singular shall include the plural, the plural shall include the singular, and the neuter gender shall include the male and female as well as a trust, firm, company, or corporation, all as the context and meaning of this Lease may require.
27. Amendments. This Lease may be altered, amended, or repealed only by a writing signed by all of the parties.
13 of 17
April 19, 2022, Item #4
28. Additional Documents and Acts. The parties to this Lease shall promptly execute and deliver any and all additional documents, instruments, notices, and other assurances, and shall do any and all other acts and things, reasonably necessary in connection with the performance of their respective obligations under this Lease and to carry out the intent of the parties.
29. Severability. If any provision of this Lease is determined by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remaining provisions of this Lease shall remain in effect.
30. Successors and Assigns. This Lease shall be binding on and inure to the benefit of the parties and their heirs, personal representatives, and permitted successors and assigns.
31. Governing Law and Forum Selection. This Lease shall be governed by, and construed in accordance with, the laws of the State of California. The federal or state courts located in San Diego County, California shall have exclusive jurisdiction to hear any dispute arising under this Lease. Each party hereto consents to personal jurisdiction in San Diego County, California, and hereby authorizes and accepts service of process sufficient for personal jurisdiction by first class mail, registered or certified, postage prepaid, to its address for giving notice as set forth herein. Tenant hereby waives any right to remove any action from San Diego County as is otherwise permitted by California Code of Civil Procedure section 394.
32. Attorneys' Fees. In the event Landlord or Tenant commences any action or proceeding, including but not limited to the filing of a lawsuit, in connection with the enforcement of this Lease, then as between Landlord and Tenant, the prevailing party shall be entitled to recover from the losing party all of its costs and expenses, including court costs, arbitration costs, expert witness fees, and reasonable attorneys' fees incurred in connection with such action, and all fees, costs and expenses incurred on any appeal or in collection of any judgment.
33. Entire Agreement. This Lease constitutes the whole and entire agreement of the parties with respect to the subject matter of this Lease, and it shall not be modified or amended in any respect except by a written instrument executed by all the parties. This Lease replaces and supersedes all prior written and oral agreements by and among the parties or any of them. (Remainder of Page Intentionally Left Blank)
14 of 17
April 19, 2022, Item #4
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.
LANDLORD:
City of Poway,
a municipal corporation
By: -----------
Chris Hazeltine, City Manager
ATTEST:
By: -----------
Carrie Gallagher, CMC City Clerk
APPROVED AS TO FORM:
By:-----------
Alan Fenstermacher, City Attorney
15 of 17
TENANT:
Moon Valley Nurseries Intermediate Holdings,
LLC, a Delaware limited liability company
By:
Name: Brian Flood
Title: CEO
By:------------
April 19, 2022, Item #4
16 of
17 Exhibit
A
Legal
Description
APN
272-150-38
April 19, 2022, Item #4
17 of
17 0 0 3 .. ~ ::,.. 0
Exhibit
B
Vicinity
Map
APN
272-150-38