Poway City Council
December 6, 2022

December 6, 2022, Item #6
DATE:

TO:

FROM:

CONTACT:

SUBJECT:

Summary:

AGENDA RE PQ RT City of Poway
December 6, 2022
Honorable Mayor and Members of the City Council
Chris Hazeltine, City Manager
Wendy Kaserman, Assistant City Manager WV­
(858) 668-4502 or [email protected]
Approval of Lease Agreement with Sportsplex, USA, Inc.

CITY COUNCIL
The City of Poway originally entered into a lease agreement for the operation and management of the South Poway Sports Park in 1992. The City approved reassignment of the lease to Sportsplex, USA, Inc. (Sportsplex) in 1997. Through the years, the lease has been amended eight times. Most recently the agreement was amended in 2020 when Sportsplex changed ownership. The existing lease is set to expire in December 2023. Staff is proposing the City Council approve a new lease with new terms and conditions.

Recommended Action:

It is recommended the City Council approve the lease agreement with Sportsplex, USA, Inc. and authorize the City Manager to execute the agreement.

Discussion:

The City of Poway constructed the South Poway Sports Park in 1992. It was designed with the intention of being operated by a private concessionaire. The City originally entered into an agreement with Sportsparks/Kajima for the operation and management of the facility when it opened. The lease was reassigned to Sportsplex in 1997. In May 2020, ownership of Sportplex transferred from the previous owner, William Berghoff, to the facility's long-time manager, Sean Melvin. In recognition of the ownership change, the City entered into an eighth amendment to the original agreement. That amendment is set to expire in December 2023.

Through the years the terms of the lease have changed multiple times in terms of responsibilities, rent and credits for various projects. The current terms include monthly rent of $4,000/month, 8% of gross receipts (less monthly rent paid), and an annual $13,200 rent credit for landscaping. Sportsplex is responsible for indoor water costs, while the City is responsible for outdoor water costs.

In developing the new lease agreement, staff had two primary objectives. The first was to simplify the 1 of23
December 6, 2022, Item #6
terms
of
the
agreement
and
make
the
financial
terms
less
complicated.

The
second
goal
was
to
work
with
Mr.

Melvin
to
draft
a lease
agreement
where
Sportsplex
bears
all
responsibility
for
operating
and
capital
costs
with
no
City
financial
support
either
through
credits
or
payments
of
certain
expenses
(i.e.
outdoor
water).

From
Mr.

Melvin's
perspective,
since
the
current
lease
is
due
to
expire
in
December
2023,
he
was
looking
to
secure
a
long-term
lease
before
investing
in
any
significant
improvements
and/or
capital
replacement
projects.

To
achieve
the
goals
of
both
parties,
the
City
negotiated
new
lease
terms
that
make
business
sense
to
both
the
City,
as
well
as
Mr
. Melvin.

Going
forward,
as
Sportsplex
revenues
increase
beyond
specific
thresholds,
the
amount
of
rent
paid
to
the
City
will
increase
as
well.

The
primary
terms
of
the
new
lease
are
set
forth
below.

Term If
approved
by
the
City
Council
on
December
6,
2022,
the
lease
will
take
effect
on
January
1,
2023.

The
initial
term
is
five
years,
with
the
option
to
extend
by
two
additional
five
year
terms.

Rent Monthly
rent
will
increase
from
$4,000/month
to
$5,000/month
for
the
initial
five
year
term
. Monthly
rent
will
increase
from
$5,000/month
to
$6,000/month
upon
execution
of
the
first
five
year
extension
and
rent
will
in
increase
again
from
$6,000/month
to
$7,000/month
upon
execution
of
the
second
five
year
extension.

Percentage
rent
will
not
apply
until
the
Sportsplex's
annual
gross
revenues
reach
$2,000,000
or
greater.

If
gross
revenues,
which
are
defined
in
the
agreement,
reach
$2,000,000,
Sportsplex
will
pay
the
City
2%
of
gross
revenues
in
addition
to
the
monthly
rent.

If
gross
revenues
reach
$2,500,000,
Sportsplex
will
pay
the
City

2.5%
of
gross
revenues
in
addition
to
monthly
rent,
and
if gross
revenues
reach
$3,000,000,
Sportsplex
will
pay
the
City
3%
of
gross
revenues
in
addition
to
monthly
rent.

Operating
Costs
and
Capital
Costs
For
the
term
of
the
lease,
Sportsplex
will
be
responsible
for
all
operating
costs
including
indoor
and
outdoor
water
costs,
tree
and
landscaping
maintenance
and
capital
replacement
costs.

The
agreement
describes
the
City's
expectations
in
terms
of
tree
maintenance
and
provides
a
three
year
timeframe
for
all
trees
to
be
on
the
prescribed
maintenance
schedule.

Updated
Language/Requirements
In
addition
to
the
terms
described
above,
the
lease
has
also
been
updated
to
include
language
about
compliance
with
regional
storm
water
requirements,
prevailing
wage
requirements
as
applicable,
and
current
insurance/indemnification
requirements.

Mr
.

Melvin
has
expressed
some
interest
in
converting
portions
of
the
facility
to
solar
power,
language
has
been
added
to
ensure
that
if
this
is
pursued,
the
City
bears
no
long-term
financial
obligations
to
any
agreements
Mr.

Melvin
may
enter
into
related
to
solar
power.

Additionally,
the
agreement
makes
clear
that,
as
would
be
the
case
with
any
private
development
project,
the
appropriate
permits
are
required
for
maintenance
and/or
capital
work
at
the
facility.

Miscellaneous 2
of23
December 6, 2022, Item #6
Other
provisions,
added
to
memorialize current
practices
, include
the
City's
free
use
of
the
facility
fo
r
the
second
Fourth
of
July
fire
works
display
that
was
added
in
2020,
as
well
as
the
Sportsplex
receiving
free
advertising
in
the
City's
quarterly
recreation
guide
.

City
Staff
and
Mr.

Melvin
have
reviewed
and
discussed
in
detail
the
proposed
terms
of
the
agreement.

Since
entering
into
the
current
agreement
with
Mr.

Melvin
in
2020,
he
has
proven
to
be
a
good
business
partner
with
the
City
. As
proposed
in
the
draft
agreement
for
City
Council's
consideration,
the
City
looks
forward
to
continuing
to
work
with
Mr.

Melvin
for
the
foreseeable
future.

Environmental
Review:

The
approval
of
the
Amended
and
Restated
Lease
Agreement
for
an
existing
facility
is
not
a "project''
under
CEQA
because
approval
of
this
lease
will
not
result
in
a direct
physical
change
in
the
environment,
or
a
reasonably
foreseeable
indirect
physical
change
in
the
environment.
(Pub.

Res
.

Code§
21065
.)
Even
if the
approval
of
this
lease
was
a
project,
it
would
be
exempt
from
CEQA
review
under
the
Class
1 (Existing
Facilities)
exemption.

Fiscal
Impact:

During
the
initial
five-year
term
of
the
lease
, annual
lease
revenue
will
be
$60,000
per
year.

This
will
increase
to
$72,000
per
year
with
the
first
five
year
extension
and
increase
again
to
$84,000
per
year
with
the
second
five
year
extension
of
the
lease.

With
the
new
lease,
the
City
will
no
longer
be
paying
Sportsplex
the
$13,200
annual
rent
credit
for
landscaping
and
will
no
longer
be
paying
for
outdoor
water
which
is
currently
approximately
$38,000
annually
and
increasing
in
future
years
based
on
approved
water
rates.

Depending
upon
how
the
Sportsplex's
gross
revenues
increase
over
time,
the
City
will
see
more
lease
revenue
as
Sportsplex's
revenues
increase
and
Sportsplex
begins paying
percentage
rent
in
addition
to
monthly
rent.

Additionally,
with
Sportsplex
assuming
all
responsibility
for
tree
and
landscape
maintenance,
as
well
as
capital
replacement
costs,
there
are
additional
future
savings
to
the
City's
General
Fund.

Public
Notification:

A
copy
of
the
agenda
report
has
been
provided
to
Sean
Melvin,
owner
of
Sports
pl
ex,
USA,
Inc.

Attachments: A.

Lease
Agreement
Reviewed/Approved
By:

Wend
aserman
Assistant
City
Manager
3 of23
Reviewed
By:

Alan
Fenstermacher
City
Attorney
Approved
By:

Chr#/Jp
City
Manager
December 6, 2022, Item #6
LEASE

AGREEMENT
This

AMENDED
AND

RESTATED
LEASE

AGREEMENT
(the
"Lease")
is
entered
into
as
of
January
1,
2023,
(the
"Effective
Date"),
by
and
between
the
City
of
Poway,
a
Municipal
Corporation
(the
"City"),
and

SPORTSPLEX,
USA,
Inc
., a
California
Corporation
(the
"Tenant"),
collectively
referred
to
herein
as
the
"Parties."

RECITALS

WHEREAS,
the
City
owns
the
property
located
at
12349
Mclvers
Court,
Poway,
California,
as
shown
in
the
attached
Exhibit
A
(the
"Premises"),
and
is
commonly
known
as
the
Sportsplex
USA
Poway
(the
"Sportsplex");

WHEREAS,
Sportsplex
contains
three
tournament
quality,
professionally
maintained
softball
fields,
four
slow-pitch
batting
cages
and
two
indoor
soccer
arenas
with
advanced
synthetic
turf;

WHEREAS,
in
November
1992,
the
City
entered
into
the
original
Lease
Agreement
(the
"Original
Agreement")
with
Sportsparks/Kajima
for
the
operation
of
the
Sportsplex;

WHEREAS,
the
Original
Agreement
has
been
amended
eight
(8)
times,
with
the
most
recent
amendment
occurring
in
June
of
2020,
and
will
expire
on December
31,
2023;

WHEREAS,
the
Parties
seek
to
terminate
the
current
agreement
early
and
enter
into
this
entirely
new,
restated
Lease
to
define
the
roles
and
responsibilities
of
the
City
and
the
Tenant,
including
the
obligation
for
the
payment
of
all
expenses;

WHEREAS,
as
of
the
effective
date
of
this
Lease,
the
Original
Agreement,
as
amended,
shall
have
no
further
force
and
effect;

WHEREAS,
for
good
and
adequate
consideration,
the
Parties
desire
to
enter
into
the
Lease
to
allow
continued
operation
of
the
Sportsplex
by
the
Tenant.

NOW,

THEREFORE,
the
City
and
Tenant
hereby
agree
as
follows:

1. Lease
Term.

The
City
hereby
leases
to
Tenant
the
Premises,
and
Tenant
hereby
leases
the
same
from
the
City,
for
a term
commencing
on
January
1,
2023
(the
"Commencement
Date")
and
ending
on
January
1,
2028
(the "Lease
Term").

Tenant
shall
have
the
right
to
renew
this
Lease
for
two
additional
periods
of
five
(5)
years
by
delivering
to
City
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. Type
of
Use.

The
Premises
are
being
leased
to
Tenant
for
the
operation
and
maintenance
of
the
Sportsplex,
in
substantial
accordance
with
this
Agreement,
or
such
other
commercial
recreation
and
sports
activities
and
related
support
functions
as
may
be
approved
by
City,
in
advance,
in
its
sole
discretion.

The
Sportsplex
and
related
facilities
shall
be
operated
on
a
nondiscriminatory
basis
for
4 of
23 ATTACHMENT
A
December 6, 2022, Item #6
general
public
use
and
in
compliance
with
all
applicable
federal,
state,
and-local
laws
and
regulations
.

Tenant
shall
not
permit
overnight
camping
or
sleeping
on
the
Premises.

Tenant
shall
not
use
the
Premises
for
any
other
purpose
without
in
each
instance
obtaining
City's
prior
written
consent.

In
the
event
the
City
agrees
to
permit
the
facilities
to
be
used
for
other
commercial
recreation
and
sports
activities
and
related
support
functions,
Tenant
understands
the
City
may
request
a
modification
of
the
terms
of
this
Lease,
including
without
limitation,
modified
provisions
regarding
the
payment
of
rent
. This
requirement
does
not
apply
to
the
City's
use
of
the
Sportsplex
as
described
in
Section
15 below.

3. Lease
Area.

The
premises
("Premises")
are
improved
with
three
regulation
softball
fields,
a
concession
building,
two
indoor
soccer
fields,
batting
cages,
group
picnic
area,
concrete
amphitheater
seating,
parking
lots,
lighting
facilities,
landscaping,
irrigation
system,
a ticket
booth,
and
a
maintenance
building.

Excluded
from
the
scope
of
this
Lease
is
the
vacant
land
known
as
the
"Upper
Pad",
located
at
the
corner
of
Crosthwaite
Circle
and
Stowe
Drive,
as
delineated
on
Exhibit
A.

The
Upper
Pad
is
City-owned
land
and
cannot
be
altered
or
used
for
any
purpose
by
the
Tenant
without
prior
written
permission
from
the
City.

4. As
is
Condition
.

The
Tenant
has
leased
the
Sportsplex
since
June
9,
2020
and
is
familiar
with
the
condition
of
the
Premises.

The
Premises
are
leased
in
an
as-is
physical
condition
only.

By
continuing
to
take
possession
of
the
Premises,
Tenant
acknowledges
the
Premises
are
in
good
and
Tenantable
condition
for
the
purposes
intended
and
does-not
hold
the
City
responsible
for
any
repairs
or
improvements,
including
but
not
limited
to:
physical
infrastructure,
landscaping,
and
irrigation
systems.

The
parties
agree
that
at
the
time
of
execution
of
the
agreement,
the
irrigation
system
is
accepted
in
as-is
condition.

Should
there
be
a
point
in
the
future
when
comprehensive
repairs
to
the
system
are
required
or
desired
by
both
parties,
equitable
cost
sharing
will
be
discussed
at
that
time
and
the
terms
will
be
managed
through
an
addendum
to
the
Lease
.

5. Holdover.

Tenant
will
have
no
right
or
privilege
whatsoever
to
use
or
occupy
the
Lease
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
Lease
Area
after
this
Lease
expires
or
terminates,
this
Lease
will
automatically
convert
to
a
month-to-month
Lease
on
the
same
terms
and
conditions
(the
"Holdover
Term"),
except
that
(1)
the
Minimum
Monthly
Lease
Fee
will
be
automatically
increased
to
one
hundred
fifty
percent
(150%)
over
the
Minimum
Monthly
rent
and
the
Annual
Percentage
Rent
payable
in
the
immediately
previous
year
(the
"Holdover
Fee"),
and
will
continue
to
increase
by
five
percent
annually
{5%)
in
accordance
with
Section
6{b)
(Annual
Percentage
Rent)
. provided,
however,
City
shall
have
the
right
to
terminate
the
holdover
tenancy
at
will.

6. 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
Premises
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.
5 of23
December 6, 2022, Item #6

7. Quitclaim
of
Tenant's
Interest.

On
termination
of
this
Lease
for
any
reason,
Tenant
shall
deliver
to
City
a
quitclaim
deed
in
recordable
form
quitclaiming
all
its
rights
in
and
to
the
premises.

Tenant
or
its
successor
in
interest
shall
deliver
the
same
within
five
(5)
days
after
receiving
written
demand
therefor.

City
may
record
such
deed
only
on
the
expiration
or
earlier
termination
of
this
Lease.

If
Tenant
fails
or
refuses
to
deliver
the
required
deed,
the
City
may
prepare
and
record
a
notice
reciting
Tenant's
failure
to
execute
this
lease
provision
and
the
notice
will
be
conclusive
evidence
of
the
termination
of
this
Lease
and
all
Tenant's
rights
to
the
premises.

8. Rent.
a.

Minimum
Monthly
Rent
-Tenant
shall
pay
City
monthly,
within
ten
(10)
days
of
month-end,
without
deduction,
offset,
prior
notice
or
demand,
a
Minimum
Monthly
Rent
of
the
Sportsplex.

The
Minimum
Monthly
Rent
shall
be
$5,000.

The
minimum
monthly
rent
will
increase
by
$1,000
per
month,
when
each
future
extension
provided
for
in
this
Lease
is
executed.
b.

Annual
Percentage
Rent.

In
addition
to
the
Minimum
Monthly
Rent,
when
total
gross
receipts
reach
the
thresholds
described
below,
the
Tenant
shall
pay
the
City
an
Annual
Percentage
Rent,
in
addition
to
the
Minimum
Monthly
Rent.

If Annual
Percentage
Rent
is
applicable,
it
shall
be
due
and
payable
by
March
1 of
each
year
for
the
prior
calendar
year
.

1. Total
Annual
Gross
Receipts
$2,000,000
or
greater,
Annual
Percentage
Rent
shall
be
2%
of
total
annual
gross
receipts.

2. Total
Annual
Gross
Receipts
$2,500,000
or
greater,
Annual
Percentage
Rent
shall
be

2.5%
of
total
annual
gross
receipts.

3. Total
Annual
Gross
Receipts
$3,000,000
or
greater,
Annual
Percentage
Rent
shall
be
3%
of
total
annual
gross
receipts.
c.

Additional
Rent.

Taxes,
property
and
liability
insurance
premiums,
and
all
utilities
paid
by
the
Tenant
pursuant
to
the
provisions
of
this
Lease
shall
constitute
Additional
Rent
and
upon
the
failure
of
Tenant
to
pay
any
of
such
amounts,
City
shall
have
the
same
rights
and
remedies
as
otherwise
provided
in
this
Lease
for
the
failure
to
pay
rent.
d.

Net
Rent.

As
set
forth
in
Section
12 of
this
Lease,
it
is
the
intention
of
the
parties
that
the
rent
payments
herein
specified
shall
be
net
to
City
in
each
year
during
the
term
of
this
Lease,
that
all
costs,
expenses,
and
obligations
of
every
kind
relating
to
the
Premises
(except
as
may
be
otherwise
specifically
provided
in
this
Lease),
which
may
arise
or
become
due
during
the
term
of
this
Lease,
shall
be
paid
by
Tenant,
and
Lessee
shall
indemnify,
defend
and
hold
City
harmless
against
such
costs,
expenses
and
obligations
e.

Late
Payment
. Tenant
shall
pay
City
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
City
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.
6 of23
December 6, 2022, Item #6
f.

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
sixty
(60)
days
of
the
date
of
termination
and
the
removal
of
the
Tenant's
property
from
the
Premises.

9. Accounting
of
Gross
Receipts.

At
such
time
Tenant
submits
to
City
the
Annual
Percentage
Rent,
such
payment
shall
be
accompanied
by
a
monthly
financial
statement
showing
the
Gross
Receipts
derived
from
all
operations
at
the
Premises
during
the
preceding
month,
together
with
a
detailed
itemization
of
the
goods
and
services
provided,
and
all
costs
and
expenses
incurred
as
well
as
all
deductions-or
exclusions
there
from
(as
shown
in
Section
10 below).

Tenant
shall
also
provide
to
City
within
thirty
(30)
days
after
the
-end
of
each
calendar
year
a financial
statement
showing
the
Gross
Receipts
derived
from
all
operations
at
the
Premises
for
the
preceding
calendar
year,
together
with
a
detailed
itemization
of
the
goods
and
services
provided,
and
all
costs
and
expenses
incurred
as
well
as
all
deductions
or
exclusions
therefrom.

If
Tenant
shall
fail
to
prepare
and
del
iver
any
such
written
statement
and
itemization
within
the
required
time,
and
such
failure
shall
continue
after
thirty
(30)
days'
notice
thereof
by
City
to
Tenant,
then
City
may
cause,
but
shall
not
be
obligated
to
cause,
an
audit
to,
be
made
of
all
books,
records,
and
accounts
of
the
operations
at
the
Premises
for
such
delinquent
accounting
period
and
may
prepare
the
statement
or
statements
which
Tenant
shall
have
failed
to
prepare
and
deliver.

Tenant
shall
pay
on
demand
all
expenses
of
such
audit
and
the
preparation
of
any
such
statements
and
all
sums
as
may
be
shown
by
such
audit
to
be
due
as
rent
together
with
interest
on
the
past
due
amounts
at
the
rate
of
ten
percent
per
year
.

10. Maintenance
and
Inspection
of
Adequate
Business
Records
. Tenant
shall
maintain
at
the
premises
or
at
its
office
at
12349
Mclvers
Court,
Poway,
California
92064,
full
, complete,
and
accurate
books,
records,
and
accounts
of,
all
daily
Gross
Receipts
and
other
records
used
in
calculating
the
Gross
Receipts.

Tenant
shall
keep
all
such
records
for
three
(3)
years.

Tenant
shall
also
maintain
detailed
records
on
the
utilization
of
the
facilities,
schedules
of
teams,
contact
information
for
teams,
and
other
pertinent
information
on
the
operation
and
management
of
the
facility.

Tenant
shall
submit
hard
copies
or
electronic
copies
of
these
records
to
the
City
upon
the
City's
request
for
the
documents
.

City
and
its
agents
shall
have
the
right
at
reasonable
times
upon
request
to
examine
and
inspect
all
of
the
books
and
records
of
Tenant
pertain
ing
to
Tenant's
operations
at
the
Premises,
for
the
purpose
of
investigating
and
verifying
the
accuracy
of
statement
of
Gross
Receipts.

In
addition,
City
may
once
in
any
calendar
year
cause
an
audit
of
the
operation
of
the
Tenant
to
be
made
by
an
independent
certified
accountant
mutually
agreed
to
by
City
and
Tenant
and
if
the
statement
of
gross
receipts
previously
made
to
the
City
shall
be
found
inaccurate,
then
and
in
that
event,
there
shall
be
an
adjustment
and
one
party
shall
the
other
on
demand
such
sums
as
may
be
necessary
to
settle
in
full
the
accurate
amount
of
said
rent
payments
that
should
have
been
paid
for
the
period
or
periods
covered
by
such
inaccurate
statement
or
statements,
together
with
interest
on
past
due amounts
at
the
rate
of
two
(2)
percent
over
the
Federal
Reserve
Bank
of
San
Francisco
prime
rate
: In
the
event
City
and
Lessee
are
unable
to
agree
upon
an
independent
certified
accountant
w
ithin
thirty
(30)
days
of
City's
election
to
cause
an
audit,
the
parties
agree
that
any
accountant
selected
from
the
"Big
4"
accounting
firms
shall
be
acceptable
to
both.

If
said
audit
shall
disclose
an
inaccuracy
in
favor
of
City,
7 of23
December 6, 2022, Item #6
of
greater
than
a
five
percent
{5%)
error
with
respect
to
the
amount
of
Gross
Receipts
reported
by
Tenant
for
the
period
of
said
report,
then
Tenant
shall
immediately
pay
to
City
the
cost
of
such
audit;
otherwise,
the
cost
of
such
audit
shall
be
paid
by
City.

If
such
audit
shall
disclose
any
willful
inaccuracy
with
respect
to
Gross
Receipts
reported
by
Tenant,
Tenant
shall
pay
triple
the
amount
due
as
a result
of
the
audit. 11.
following:

Gross
Receipts
Exclusions.

Cost
that
are
excluded
from
to
the
Gross
Receipts
include
the
a.

The
amount
of
all
sales
tax
receipts
required
to
be
accounted
for
by
the
Tenant
and
paid
to
any
government
or
governmental
agency,
but
not
the
amount
of
any
excise
tax
(except
a consumer
excise
tax)
or
other
governmental
obligation
in
the
nature
of
a tax
on
the
privilege
of
doing
business;
b.

The
amount
of
any
sales
initially
included
in
Sportsplex
Gross
Revenues
that
are
subsequently
subject
to
refund
or
credit;
c.

The
amount
of
any
revenues
received
by
any
licensee,
contractor
or
concessionaire
(unless
such
licensee,
contractor
or
concessionaire
is
an
Affiliate)
operating
in
or
from
the
Sportsplex
that
are
not
paid
or
required
to
be
paid
to
the
Operator,
provided
that
such
revenues
are
not
derived from
the
sale
of
food
or
beverages;
d.

Revenues
received
by
any
outside
catering
company
that
is
not
an
Affiliate
allowed
to
cater
a group,
business
or
other
special
event
at
the
Sports
Park
or
otherwise
on
the
Property
shall
not
be
included
in
Sports
Park
Gross
Revenues,
except
any
revenues
paid
to
the
Operator
for
the
right
to
bring
in
an
outside
caterer
to
handle
food
or
beverage
sales
or
any
commissions
or
other
type
of
fees
paid
to
the
Operator
from
revenues
received
by
the
outside
caterer.

As
an
illustration,
if Company
X
contracts
with
the
Operator
to
cater
food
service
for
its
group
business
event,
the
gross
revenues
received
by
the
Operator
for
catering
such
event
shall
be
included
in
Sports
Park
Gross
Revenues.

If
Company
X
uses
its
own
catering
company
to
cater
its
group
business
event,
only
the
fees
or
commissions
paid
to
the
Operator
by
Company
X
(or
its
caterer)
for
the
right
to
bring
in
an
outside
caterer
shall
be
included
in
Sports
Park
Gross
Revenues.
e.

Traditional
or
customary
waiter/waitress
gratuities
paid
or
given
by
customers
to
non-
Management
Staff
employees
of
the
Tenant;
f.

Proceeds
of
insurance
other
than
business
interruption
insurance
applicable
to
the
Sportsplex,
if
any,
which
shall
be
used
and
applied
pursuant
to
Section
22 12
.

Net
Lease.

It
is
the
intent
of
the
parties
that
the
rent
provided
herein
shall
be
absolutely
net
to
the
City
and
that
Tenant
shall
pay
all
costs,
taxes,
assessments,
charges,
and
expenses
of
every
kind
and
nature
imposed
on
or
against
the
Premises
which
may
arise
or
become
due
during
the
Lease
Term,
and
which,
except
for
execution
hereof,
would
or
could
have
been
payable
by
the
City.

Tenant
recognizes
and
acknowledges
that
this
Lease
may
create
a
"possessory
interest"
in
the
Premises
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).
8 of23
December 6, 2022, Item #6
13 .

Surrender.

Upon
the
term
ination
of
this
Lease
all
buildings,
structures,
improvements,
and
trade
fixtures
permanently
affixed
to
the
Premises
together
with
all
records
and
computer
records
provided
to
the
City
shall
become
the
property
of
City.

Tenant
covenants
to
peaceably
yield
up
and
surrender
the
Premises
to
City,
including
all
such
improvements
and
trade
fixtures
in
good
order,
repair
and
condition,
reasonable
wear
and
tear,
and
damage
by
casualty
excepted
. At
the
option
of
City,
Tenant
shall
further
surrender
to
City
all
personal
property
and
equipment
necessary
to
operate
the
facilities;
City
shall
pay
to
Tenant
within
sixty
{60)
days
of
such
surrender
the
Fair
Market
value
or
Fair
Rental
value
of
such
personal
property,
subject
to
set-off
against
rent
arrearage
.

14. Community
Services
Guide
Advertising
.

During
the
Lease
Term,
the
Tenant
shall
be
permitted
to
advertise,
at
no
cost
to
the
Tenant,
in
each
issue
of
the
City
of
Poway
Community
Services
Guide,
produced
electronically
on
a
quarterly
basis.

The
ad
shall
be
a
half
page.

The
ad
will
appear
in
the
facilities
section
of
the
guide
and
shall
be
general
advertising
in
nature,
not
specific
class
numbers
with
days
and
times.

The
City
shall
have
authority
to
modify
the
ad
content
at
its'
sole
discretion.

The
artwork
shall
be
delivered
in
PDF
format
and
is
due
according
to
the
current
year
production
calendar
.

An
email
reminder
will
be
sent
approximately
two
weeks
before
the
ad
is
due
.

15. City
Use
of
the
Facility
. The
Tenant
agrees
to
allow
the
City
the
free
use
of
the
facility
to
stage
one
of
the
annual
Fourth
of
July
fireworks
shows
. The
City
shall
be
granted
access
to
perform
the
following
activities
:
a.

City
Fire
Inspectors
can
have
access
to
the
Premises
one
month,
one
week,
and
one
day
prior
to
the
show
.
b.

City
can
have
access
to
perform
any
landscape
maintenance
starting
4 weeks
prior
to
the
show
and
up
until
the
show
.
c.

Fireworks
company
can
have
access
to
the
site
on
July
3 rd
for
early
set
up
starting
at
noon
.
d.

Facility
will
be
completely
closed
for
Firework
show
on
July
4 th
•
e.

Parking
lot
will
be
closed
on
July
4 th, unless
an
agreement
is
made
between
the
Sportsplex
and
City
of
Poway
.
f.

The
City
will
have
the
next
business
day
following
the
4 th
of
July
to
perform
any
necessary
clean-up.
g.

If
the
annual
fireworks
show
is
cancelled
in
a
particular
year
or
discontinued
at
some
point
during
the
Lease
Term,
the
City
shall
notify
the
Tenant
as
soon
as
it
is
aware
of
the
cancellation
or
discontinuance
.

16. 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
City,
such
approval
not
to
be
unreasonably
withheld,
conditioned
or
delayed),
indemnify
and
hold
the
City,
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
Premises
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
investigat
ion,
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
9 of23
December 6, 2022, Item #6
Diego
Regional
Water
Quality
Control
Board,
the
California
Department
ofToxic
Substances
Control,
or
the
United
States
Environmental
Protection
Agency
.
17 .

Stormwater
Compliance.

In
accordance
with
the
California
Regional
Water
Quality
Control
Board
San
Diego
Region
Order
Number
R9-2017-0077,
(hereinafter
referred
to
collectively
as
"Trash
Amendment"),
the
City
of
Poway's
Stormwater
Management
and
Discharge
Control
Ordinance,
Poway
Municipal
Code,
Chapter
13 and
16 (the
"Stormwater
Ordinance")
and/or
other
ordinances
or
regulations
of
City
which
regulate
urban
runoff,
Tenant
shall
manage
storm
water
runoff
and
trash
generation
from
the

PREMISES
with
the
installation
of
Storm
Water
Trash
Facilities
which
are
identified
as
"Best
Management
Practices"
or
"BMPs".

Installation
of
BMPs
shall
be
completed
within
the
Lease
Term
.

The
manner
and
standards
by
which
the
BMPs
must
be
repaired
and
maintained
in
order
to
retain
their
effectiveness
are
as
set
forth
in
the
Operation
and
Maintenance
Plan
(hereinafter
"O&M
PLAN")
and
shall
be
provided
to
the
CITY
at
time
of
installation.

Maintenance
of
Storm
Water
Trash
Facilities.

Tenant
agrees,
for
itself
and
its
successors
in
interest,
to
all
or
any
portion
of
the

PREMISES,
to
comply
in
all respects
with
the
requirements
of
the
Stormwater
Ordinance
with
regards
to
the
maintenance
of
BMPs,
and
in
particular
agrees
to
perform,
at
its
sole
cost,
expense
and
liability,
the
following
"MAINTENANCE
ACTIVITIES":
all
inspections,
cleaning,
repairs,
servicing,
maintenance
and
other
actions
specified
in
the
O&M
PLAN,
with
respect
to
all
of
the
BMPs
listed
above,
at
the
times
and
in
the
manner
specified
in
the
O&M
PLAN.

Tenant
shall
keep
records
of
this
maintenance
and
provide
copies
of
such
records
and
annual
certification
of
maintenance
as
requested
by
City.

Tenant
shall
initiate,
perform
and
complete
all

MAINTENANCE

ACTIVITIES
at
the
required
time,
without
request
or
demand
from
City
or
any
other
agency.

Tenant
further
agrees
that
"MAINTENANCE
ACTIVITIES"
shall
include
replacement
or
modification
of
the
BM
Ps
in
the
event
of
failure.

Replacement
shall
be
with
an
identical
type,
size
and
model
of
BMP,
except
that:
a.

The
City
Engineer
may
authorize
substitution
of
an
alternative
BMP
if
he
or
she
determines
that
it
will
be
as
effective
as
the
failed
BMP;
and
b.

If
the
failure
of
the
BMP,
in
the
judgment
of
the
City
Engineer,
indicates
that
the
BMP
in
use
is
inappropriate
or
inadequate
to
the
circumstances,
the
BMP
must
be
modified
or
replaced
with
a
more
effective
BMP
to
prevent
future
failure
in
the
same
or
similar
circumstances.
ltis
agreed
that
City
shall
have
the
right,
but
not
the
obligation,
to
elect
to
perform
any
or
all
of
the

MAINTENANCE

ACTIVITIES
if,
in
the
City's
sole
judgment,
Tenant
has
failed
to
perform
the
same.

Such
maintenance
by
the
CITY
shall
be
conducted
in
accordance
with
the
nuisance
abatement
procedures
set
forth
in
Poway
Municipal
Code
Chapter

8.72. In
the
case
of
maintenance
performed
by
the
City,
it
may
be
performed
by
City
forces,
or
a
contractor
hired
by
the
City,
at
the
City's
sole
election
.

It
is
recognized
and
understood
that
the
City
makes
no
representation
that
it
intends
to
or
will
perform
any
of
the

MAINTENANCE

ACTIVITIES,
and
any
election
by
City
to
perform
any
of
the

MAINTENANCE

ACTIVITIES
shall
in
no
way
relieve
Tenant
of
its
continuing
maintenance
obligations
under
this
agreement.

If
City
elects
to
perform
any
of
the

MAINTENANCE

ACTIVITIES,
it
is
understood
that
City
shall
be
deemed
to
be
acting
as
the
agent
of
the
Tenant
and
said
work
shall
be
without
warranty
or
representation
by
City
as
to
safety
or
effectiveness,
shall
be
deemed
to
be
accepted
by
Tenant
"as
is",
and
shall
be
covered
by
Tenant's
indemnity
provisions
below.

If
City
performs
any
of
the

MAINTENANCE

ACTIVITIES,
after
City
has
demanded
that
Tenant
perform
the
same
and
Tenant
has
failed
to
do
so
within
a reasonable
time
stated
in
the
City's
demand,
then
Tenant
shall
10 of
23 December 6, 2022, Item #6
pay
all
of
City's
costs
incurred
in
performing
the

MAINTENANCE

ACTIVITIES,
plus
an
administrative
fee.

Tenant's
obligation
to
pay
City's
costs
of
performing

MAINTENANCE

ACTIVITIES
is
a
continuing
obligation.

If
Tenant
fails
to
pay
City's
costs
for
performing

MAINTENANCE

ACTIVITIES,
City
may
assess
a
lien
on
the
property
or
properties
of
the
responsible
parties
pursuant
to
the
procedures
set
forth
in
Poway
Municipal
Code
Chapter

8.72. City
shall
have
the
right,
at
any
time
and
without
prior
notice
to
Tenant,
to
enter
upon
any
part
of
said
area
as
may
be
necessary
or
convenient
for
such
purposes
.

Tenant
shall
at
all
times
maintain
the

PREMISES
so
as
to
make
City's
access
clear
and
unobstructed
.

City
shall
not
be
liable
for,
and
Tenant
and
its
successors
in
interest
shall
defend
and
indemnify
City
and
the
employees
and
agents
of
City(collectively
"CITY
PARTIES"),
against
any
and
all
claims,
demands,
liability,
judgments,
awards,
fines,
mechanic's
liens
or
other
liens,
labor
disputes,
losses,
damages,
expenses,
charges
or
costs
of
any
kind
or
character,
including
attorneys'
fees
and
court
costs
(hereinafter
collectively
referred
to
as
"CLAIMS"),
related
to
this
Agreement
(specifically
including
but
not
limited
to
Tenant's
alleged
noncompliance
with
the
Trash
Amendment
or
the
Stormwater
Ordinance),
and
arising
either
directly
or
indirectly
from
any
act,
error,
omission
or
negligence
of
Tenant,
Tenant's
successors,
or
their
contractors,
licensees,
agents,
servants
or
employees,
including,
without
limitation,
claims
caused
by
the
concurrent
negligent
act,
error
or
omission,
whether
active
or
passive,
of
CITY

PARTIES
. Tenant
shall
have
no
obligation,
however,
to
defend
or
indemnify
CITY

PARTIES
from
a
claim
if
it
is
determined
by
a
court
of
competent
jurisdiction
that
such
claim
was
caused
by
the
sole
negligence
or
willful
misconduct
of
CITY
PARTIES.

Nothing
in
this
Agreement,
City's
approval
of
any
development
application,
building
permit,
or
plans
and
specifications,
or
inspection
of
the
work
is
intended
to
acknowledge
responsibility
for
any
such
matter,
and
CITY

PARTIES
shall
have
absolutely
no
responsibility
or
liability
therefore
unless
otherwise
provided
by
applicable
law.

18. Sublease
and
Assignment
.

Tenant
shall
not
sublease
all
or
any
part
of
the
Premises,
or
assign
this
Lease
in
whole
or
in
part
without
the
City's
written
consent
.

19. Operational
Standards.

Prior
to
the
execution
of
this
Lease,
and
annually
thereafter
and
sixty
(60)
days
prior
to
the
commencement
of
each
Lease
Year,
Tenant
shall
submit
to
City
a
"Facility
Operation
Plan."
Said
plan
shall
contain
a
description
of
planned
events,
including
league
play
and
tournaments,
as
well
as
hours
of
operation.

The
Facility
Operation
Plan
shall
include
a
description
of
the
proposed
marketing
and
advertising
program.

Tenant
shall
operate
the
Sportsplex
in
a
competent
and
professional
manner
equal
to
or
exceeding
that
specified
in
the
Facility
Operation
Plan
. City
shall
have
the
right
at
reasonable
times
to
inspect
the
premises
. Should
City
find
Operational
Standards
have
fallen
below
a
minimum
acceptable
level
in
any
area,
Lessor
shall
notify
Tenant
in
writing
of
the
specified
subject
areas
requiring
correction.

Tenant
shall
than
have
a period
not
exceeding
thirty
(30)
days
to
correct
said
deficiency
.

20. 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
Premises,
in
so
that
the
Premises
is
returned
to
the
City
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
Premises
at
Tenant's
expense.

Tenant
shall
maintain
all
portions
of
the
Premises
that
are
visible
to
the
public
in
good
condition,
11 of
23 December 6, 2022, Item #6
including
the
fencing,
parking
lot,
lighting,
sidewalks,
physical
structures,
ground
maintenance,
the
irrigation
system,
and
landscaping.

Tenant
shall
maintain
the
trees
and
landscaping
as
described
below. Trees All
trees
in
defined
area
of
responsibility
shall
have
a maximum
of
a three-year
trim
cycle.

Tenant
has
three
years
from
the
effective
date
of
the
Lease
to
bring
all
trees
on
to
the
three-year
trim
cycle.

Progress
reports
toward
getting
all
trees
on
the
three-year
trim
cycle
shall
be
provided
to
the
City
on
a
biannual
basis
with
the
first
report
due
six
months
after
execution
of
the
Lease.

During
trim
cycle,
a
licensed
arborist
shall
assess
the
trees
and
give
a report
on
health
condition
and
any
recommendations.

Also
in
this
report,
the
following
shall
be
listed:

Tree
species,
Tree
Height,
Tree
Diameter
Breast
Height
(DBH),
Tree
health
condition,
note
of
what
was
done
at
the
trim
cycle
(treatment,
trim/prune),
note
when
last
grid
was
done,
estimated
value.

Any
dead,
dying,
poorly
structured,
diseased,
or
imminent
public
danger
trees
shall
be
addressed
immediately. Volunteer
trees
that
have
a<
3 inch
DBH
shall
be
removed
during
weekly
routine
maintenance.

Vegetation
(landscaping)
Landscape
maintenance
shall
occur
once
·a
week
and
will
include:

Weeding,
removal
of
leaves
and
dropped
branches,
hedge
bushes
and
other
plants,
removal
of
volunteer
trees
that
are<
3 inch
DBH,
check
irrigation
operation,
repair
irrigation,
add
or
spread
mulch,
prune
low
hanging
tree
branches.

Irrigation
System
The
parties
agree
that
at
the
time
of
execution
of
the
agreement,
the
irrigation
system
is
accepted
in
as-is
condition.

Should
there
be
a
point
in
the
future
when
comprehensive
repairs
to
the
system
are
required
or
desired
by
both
parties,
equitable
cost
sharing
will
be
discussed
at
that
time
and
the
terms
will
be
managed
through
an
addendum
to
the
agreement.
b.

Tenant
shall
exercise
due
diligence
to
ensure
any
airborne
dirt/gravel/dust/pollutants
is
mitigated
for
surrounding
private
properties.

Stormwater
runoff
from
the
Premises shall
remain
in
compliance
with
all
Federal,
State
and
local
regulations/laws.

Graffiti
on
the
Premises
shall
be
removed
by
Tenant
within
seventy-two
(72)
hours.

In
no
event
shall
this
Lease
be
interpreted
to
require
the
City
to
expend
funds
for
the
purpose
of
conducting
repairs
or
maintenance
of
the
Premises.

Tenant
acknowledges
and
agrees
that
Tenant
is
familiar
with
the
condition
of
the
Premises
and
is
aware
of
the
adequacy
and
fitness
of
the
Premises
for
Tenant's
intended
use
thereof
for
the
operation
of
the
Business
. THE
CITY

EXPRESSLY

DISCLAIMS
ANY

WARRANTY
OF

HABITABILITY,

WARRANTY
OF

FITNESS
FOR
A

PARTICULAR

PURPOSE,
OR
ANY

COVENANT
OF
QUIET

ENJOYMENT
WITH

RESPECT
TO
THE

PREMISES
AND/OR

TENANT'S
USE

THEREOF

PURSUANT
TO
THIS
LEASE.

In
the
event
of
a force
majeure
causing
significant
damage
to
the
Premises,
Tenant
may
elect
to
make
all
necessary
repairs
and
continue
occupying
the
Premises
or
shall
be
entitled
to
terminate
this
Lease.
c.

Alterations
and
Improvements.

Tenant,
at
Tenant's
expense,
shall
have
the
right,
following
the
City's
consent
and
issuance
of
appropriate
building
or
other
required
City
permit
and
inspection
as
necessary,
which
the
City
has
no
obligation
to
issue,
to
make
improvements
to
all
or
any
part
of
the
Premises
from
time
to
time
as
Tenant
may
deem desirable,
provided
the
same
are
made
in
12 of
23 December 6, 2022, Item #6
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
Premises,
and
fasten
the
same
to
the
Premises.

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
Premises
by
Tenant
thereafter,
shall
remain
Tenant's
property
free
and
clear
of
any
claim
by
the
City.

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
of
any
damage
caused
by
such
removal.
d.

Capital
Equipment
Repair
and
Replacement.

Tenant
shall
be
solely
responsible
for
all
capital
equipment
repair
and
replacement
on
the
premises
for
the
duration
of
the
lease
including
but
not
limited
to
HVAC,
plumbing,
roofing,
lighting,
and
scoreboards.

Tenant
shall
be
responsible
for
applying
for
all
appropriate
permits
associated
with
capital
equipment
repair
and
replacement.
e.

No
City
Obligations.

In
connection
with
any
maintenance,
repairs,
alterations
or
improvements
to
the
Premises,
Tenant
shall
not
place
any
obligations
on
the
Premises
that
would
obligate
the
City
to
make
any
payment
or
take
any
other
action,
at
any
time.

In
particular,
if
Tenant
replaces
any
lighting
with
solar
lighting
or
otherwise
installs
solar
facilities
on
the
Premises,
Tenant
shall
not
obligate
the
Premises
or
City
to
make
any
payments
or
take
any
action,
including
any
long­
term
financing
that
would
extend
beyond
the
term
of
this
Lease
.

Instead,
all
obligations
shall
be
personal
to
the
Tenant,
and
shall
not
run
with
the
land,
and
Tenant
agrees
it
has
no
authority
to
enter
into
such
agreement.
f.

Prevailing
Wage.

Tenant
shall
be
solely
responsible,
expressly
or
impliedly
and
legally
and
financially,
for
determining
and
effectuating
compliance
with
all
applicable
federal,
state
and
local
public
works
requirements,
prevailing
wage
laws,
and
labor
laws
and
standards,
and
City
makes
no
representation
, either
legally
and/or
financially,
as
to
the
applicability
or
non-applicability
of
any
federal,
state
and
local
laws
to
any
of
the
Tenant's
work
on
the
Premises.

Tenant
expressly,
knowingly
and
voluntarily
acknowledges
and
agrees
that
City
has
not
previously
represented
to
Tenant
or
to
any
representative,
agent
or
affiliate
of
Tenant,
or
any
contractor(s)
or
any
subcontractor(s),
in
writing
or
otherwise,
in
a
call
for
bids
or
otherwise,
that
any
anticipated
work
on
the
Premises
under
this
Section
19 is
(or
is
not)
a
"public
work,"
as
defined
in
Section
1720
of
the
Labor
Code
or
under
the
Davis-Bacon
Act,
40 U.S
.C.

Section
3141,
et
seq
., and
the
regulations
promulgated
thereunder
set
forth
at
29 CFR
Part
1 (collectively,
"Davis-Bacon").

Tenant
knowingly
and
voluntarily
agrees
that
Tenant
shall
have
the
obligation
to
provide
any
and
all
disclosures
or
identifications
as
and
to
the
extent
required
by
Labor
Code
Section
1781
and/or
by
Davis-Bacon,
as
the
same
may
be
amended
from
time
to
time,
or
any
other
similar
law
or
regulation.

Tenant
shall
indemnify,
protect,
pay
for,
defend
and
hold
harmless
City,
with
legal
counsel
reasonably
acceptable
to
City
from
and
against
any
and
all
loss,
liability,
damage,
claim,
cost,
expense
and/or
"increased
costs"
(including
reasonable
attorney's
fees,
court
and
litigation
costs,
and
fees
of
expert
witnesses)
which
results
or
arises
in
any
way
from
any
of
the
following:
(i)
the
noncompliance
by
Tenant
or
its
contractor
with
any
applicable
local,
state
and/or
federal
law
or
regulation,
including,
without
limitation,
any
applicable
federal
and/or
state
labor
laws
or
regulations
(including,
without
limitation,
if
applicable,
the
requirement
to
pay
state
and/or
federal
prevailing
wages
and
hire
apprentices);
(ii)
the
implementation
of
Section
1781
of
the
Labor
Code
and/or
of
Davis-Bacon,
as
the
same
may
be
amended
from
time
to
time,
or
any
other
similar
law
or
regulation;
and/or
(iii)
failure
by
Tenant
to
provide
any
required
disclosure
or
identification
as
required
by
Labor
Code
Section
1781
and/or
by
Davis-Bacon,
as
the
same
may
be
13 of
23 December 6, 2022, Item #6
amended
from
time
to
time,
or
any
othe
r similar
law
or
regulation.

It
is
agreed
by
the
Parties
that,
in
connection
with
any
work
on
hit
Premises,
including,
without
limitation,
any
and
all
public
works
(as
defined
by
applicable
law
or
regulation),
Tenant
shall
bear
all
risks
of
payment
or
non
-payment
of
prevailing
wages
under
applicab
le federal,
state
and
local
law
or
regulation
and/or
the
implementation
of
Labor
Code
Section
1781
and/or
by
Davis-Bacon,
as
the
same
may
be
amended
from
time
to
time,
and/or
any
other
similar
law
or
regulation
.

The
foregoing
indemnity
shall
survive
termination
of
this
Agreement
and
shall
cont
inue
after
completion
of
the
construction
and
development
of
the
Project
.

21. 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
Premises
of
a
character
which
will
or
may
result
in
liens
on
the
City's
reversionary
estate
therein,
and
Tenant
shall
keep
the
Premises
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
aga
inst
the
Premises,
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
required
by
the
City
. If
Tenant
shall
fail
to
furnish
such
secur
ity,
then
, in
addition
to
any
other
right
or
remedy
of
the
City
resulting
from
Tenant's
said
default,
the
City
may,
but
shall
not
be
obl
igated
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
City,
as
"Additional
Rent,"
on
demand,
all
sums
disbursed
or
deposited
by
the
City
pursuant
to
the
provisions
of
this
Paragraph
7,
including
all
costs,
expenses
and
attorneys'
fees
incurred
by
the
City
in
connection
therewith.

Nothing
contained
herein
shall
imply
any
consent
or
agreement
on
the
part
of
the
City
to
assume
any
liability
under
any
mechanics'
lien
or
other
lien
law.

Should
any
claims
of
lien
be
filed
against
the
Premises
or
any
action
affecting
the
title
to
the
Premises
be
commenced,
the
party
receiving
notice
of
such
lien
or
action
shall
forthwith
use
its
commercially
reasonable
efforts
to
give
the
other
party
wr
itten
notice
thereof
within
five
(5)
days
after
receipt
. The
City
or
its
representative(s)
shall
have
the
right
to
post
and
keep
posted
upon
the
Premises
notices
of
nonresponsibility
or
such
other
notices
that
the
City
may
deem
to
be
proper
for
the
protection
of
the
City's
interest
in
the
Premises.

Tenant
shall,
before
the
commencement
of
any
work
that
might
result
in
any
such
lien,
give
to
the
City
written
notice
of
its
intention
to
do
so
in
sufficient
time
to
enable
the
posting
of
such
notices
22 .

Insurance
.

Tenant
shall
obtain
, at
its
own
cost
and
expense,
and
maintain
in
full
force
and
effect,
the
following
types
and
amounts
of
insurance
during
the
term
of
this
agreement
:
a.

Property
Insurance
Coverage.

Tenant
shall
possess
property
insurance
, including
fire
and
extended coverage
insurance,
covering
Tenant's
personal
property,
including
removable
trade
fixtures,
located
in
the
Property,
on
a
replacement
cost
basis
. Tenant
must
also
have
business
interruption
expense
or
similar
coverage
as
part
of
their
property
insurance
policy
or
under
a separate
form
sufficient
to
cover
rental
payments
in
the
event
of
business
interruption.
b.

General
Liability
Insurance.

Tenant
shall
possess
a
policy
or
policies
of
comprehensive
general
liability
insurance
with
respect
to
the
Premises
with
coverage
of
not
less
than
Three
Million
Dollars
($3,000,000),
with
a
minimum
aggregate
amount
of
Four
Million
Dollars
($4,000,000)
combined
single
limit
coverage
of
bodily
injury,
property
damage
or
combination
thereof.

An
excess,
or
umbrella
policy
is
also
acceptable
to
provide
the
aggregate
amount
of
coverage.
14 of
23 December 6, 2022, Item #6
c.

Workers'
Compensation
Insurance.

Tenant
shall
possess
workers'
compensation
insurance
as
required
by
law
. Tenant
shall
also
provide
employer's
liability
coverage
in
the
minimum
amount
of
One
Million
Dollars
($1,000,000)
per
act
or
disease
and
must
also
provide
a
waiver
of
subrogation
in
favor
of
City.
d.

Automobile
Liability
. Tenant
shall
possess
automobile
insurance
to
include
owned,
hired,
and
non-owned
vehicles
with
a
minimum
coverage
amount
of
One
Million
Dollars
($1,000,000),
combined
single
limit.
e.

Professional
Liability/Errors
&
Omissions.

Tenant
shall
possess
Professional
Liability/Errors
and
Omissions
insurance
with
a
minimum
coverage
amount
of
One
Million
Dollars
($1,000,000),
per
claim.
f.

Liquor
Liability
. Tenant
shall
possess
liquor
liability
insurance
to
extend
coverage
to
drunk
driving
accidents,
assault
and
battery
claims,
accusations
of
sexual
assault,
and
any
other
claims
associated,
with
a
minimum
coverage
amount
of
One
Million
Dollars
($1,000,000)
.
g.

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
be
an
admitted
surety,
or
an
insurance
company
listed
by
the
State
Insurance
Commissioner,
and
shall
have
a rating
in
the
latest
AM
Best
Rating
Guide
of
a minimum
of
"A-"
and
a minimum
of
Class
VI.
23 .

Endorsements.

Endorsements
shall
be
obtained
so
that
each
policy
contains
the
following
three
provisions: a.

Additional
Insured.
(Not
required
for
Professional
Errors
and
Omissions
Liability
Insurance
or
Workers'
Compensation.) "City
of
Poway
and
its
elected
and
appointed
boards,
officers,
agents,
and
employees
are
additional
insureds
with
respect
to
this
subject
project
and
contract
with
City
."
(b)
Notice.
"Said
policy
shall
not
terminate,
nor
shall
it
be
canceled,
until
thirty
(30)
days
after
written
notice
is
given
to
City."
(c)
Primary
Coverage.
"The
policy
provides
primary
coverage
to
City
and
its
elected
and
appointed
boards,
officers,
agents,
and
employees.

It
is
not
secondary
or
in
any
way
subordinate
to
any
other
insurance
or
coverage
maintained
by
City
."

24. Insurance
Certificates.

Tenant
shall
provide
City
certificates
of
insurance
and
their
endorsements
showing
the
insurance
coverages
described
in
the
paragraphs
above,
in
a form
and
content
approved
by
City,
prior
to
beginning
work
under
this
Agreement
.

25. Indemnification.

Tenant
shall
defend,
indemnify
and
hold
the
City,
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
of
Tenant
or
any
other
person
occurring
during
the
term
of
this
Lease
arising
from
any
of
the
following:
(i)
15 of
23 December 6, 2022, Item #6
the
use,
occupancy
or
enjoyment
of
the
Premises,
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
Premises.

Except
to
the
extent
arising
due
to
City'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
City
is
named
or
made
party
and
shall
defend
the
City
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
City
or
its
officers,
employees,
agents
or
representatives,
or
the
City'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
City.

This
indemnity
provision
shall
apply
to
all
claims
that
accrued,
or
injuries
that
occurred,
prior
to
Tenant
vacating
the
Premises,
regardless
of
when
such
claims
or
injuries
were
discovered,
and
shall
survive
the
termination
of
this
Lease